-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GN2IUjiZ+1m3xWtzXlR4jgbYFWcmJYS7fxwFojt9rLz2Rl9pIoheGqrQVYL/YLdn RORQVb5aWunpoZgfZW4N1A== 0000950123-03-008544.txt : 20030725 0000950123-03-008544.hdr.sgml : 20030725 20030725172651 ACCESSION NUMBER: 0000950123-03-008544 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 10 CONFORMED PERIOD OF REPORT: 20030724 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20030725 FILER: COMPANY DATA: COMPANY CONFORMED NAME: IGEN INTERNATIONAL INC /DE CENTRAL INDEX KEY: 0000916304 STANDARD INDUSTRIAL CLASSIFICATION: PATENT OWNERS & LESSORS [6794] IRS NUMBER: 942852543 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-23252 FILM NUMBER: 03804278 BUSINESS ADDRESS: STREET 1: 16020 INDUSTRIAL DR CITY: GAITHERSBURG STATE: MD ZIP: 20877 BUSINESS PHONE: 3019848000 MAIL ADDRESS: STREET 1: 16020 INDUSTRIAL DRIVE CITY: GAITHERSBURG STATE: MD ZIP: 20877 FORMER COMPANY: FORMER CONFORMED NAME: IGEN INC /CA/ DATE OF NAME CHANGE: 19931216 8-K 1 y88675e8vk.txt FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported: July 24, 2003): IGEN INTERNATIONAL, INC. (Exact name of registrant as specified in its charter) Delaware 0-23252 94-2852543 (State or other Jurisdiction of (Commission File Number) (I.R.S. Employer Incorporation) Identification No.) 16020 Industrial Drive Gaithersburg, Maryland 20877 (Principal Executive Office) (Zip Code) Registrant's telephone number, including area code: (301) 869-9800 Exhibit Index on Page 6 Item 5. Other Events and Regulation FD Disclosure On July 24, 2003, IGEN International, Inc. ("IGEN") and Roche Holding Ltd. ("Roche") jointly announced that they had reached definitive agreements to resolve their long-running dispute on the rights to ORIGEN, IGEN's electrochemiluminescence (ECL) technology used by Roche's diagnostics division. The transaction, which has been approved by the Boards of Directors of IGEN and Roche, will enable both companies to independently maximize the value of their respective technology assets and businesses. Under the terms of the agreements, Roche will acquire IGEN, thereby securing rights to ORIGEN technology used in its Elecsys(R) diagnostics product line. For each IGEN share, IGEN shareholders will receive $47.25 in cash and one share of a newly formed public company to be spun off by IGEN in a fully taxable transaction. IGEN has 26.7 million fully diluted outstanding shares. The new company, which will be 100% owned by IGEN shareholders, will own ORIGEN technology, assume certain ongoing IGEN businesses and is expected to have approximately $155 million in working capital. This working capital will be provided primarily by Roche as part of the transaction, in addition to the $47.25 per share cash payment to be made to IGEN shareholders. Through the acquisition of IGEN, Roche will secure, among other assets, new non-exclusive, fully paid-up, worldwide and perpetual rights that will permit Roche to continue to commercialize ORIGEN technology in the human in-vitro diagnostics field and continue to sell and further develop its Elecsys products for centralized laboratories, hospital labs and blood banks. In addition, Roche generally will be able to sell certain ORIGEN-based immunochemistry systems into point of care sites and physicians offices. Improvements of the ECL technology developed by Roche until the closing date will remain with Roche. IGEN will receive a license to those improvements. As reported by Roche, Roche's ECL-based Lab Diagnostics business had sales in 2002 of approximately CHF 560 million (US $404 million), with a compound annual growth rate in local currencies of approximately 23% over the last three years. Upon completion of the acquisition, the new company to be spun-off by IGEN to its shareholders will hold IGEN's patents and assume its biodefense, life science and industrial businesses, as well as opportunities in the clinical diagnostics field. The new company will also hold IGEN's equity interest in the Meso Scale Diagnostics ("MSD") joint venture. The new company will be able to address the entire clinical diagnostic market, including the hospital, blood bank and reference lab markets that were previously exclusively held by Roche. The new company will also receive rights to certain improvements relating to Roche's Elecsys product line and royalty-bearing licenses to PCR, a nucleic acid amplification technology, for use in most fields. The new company, which will be named prior to closing the transaction, will be managed by IGEN's current management team and headquartered in Gaithersburg, Maryland. It is expected that the new company's shares will be listed on Nasdaq upon completion of the spin-off. As part of the agreement, Roche will immediately pay IGEN $18.6 million in cash for compensatory damages as confirmed on July 9, 2003 by the U.S. Court of Appeals for the Fourth Circuit. Roche will also immediately pay to IGEN the royalties owed to IGEN for the quarter ended June 30, 2003. Effective immediately, there will be no further royalties owed to IGEN, 2 and Roche will pay a fixed fee of $5 million per month to IGEN for the use of ORIGEN technology pending completion of the transaction. As part of the transaction, the MSD joint venture will expire. Following the closing, the new company will make a final capital contribution of $37.5 million to MSD. The transaction is expected to close by calendar year-end, subject to the approval of IGEN shareholders and receipt of necessary regulatory approvals and other limited closing conditions. The foregoing description of the transaction is qualified in its entirety by reference to the terms of the agreements which are filed as Exhibits to this Form 8-K and are incorporated herein by reference. IGEN CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS This Form 8-K contains forward-looking statements within the meaning of the "safe harbor" provision of the Private Securities Litigation Reform Act of 1995. All statements that are not statements of historical fact are forward-looking statements. The words "may," "should," "will," "expect," "could," "anticipate," "believe," "estimate," "plan," "intend" and similar expressions have been used to identify certain of the forward-looking statements in this Form 8-K. We have based these forward-looking statements on management's current expectations, estimates and projections and they are subject to a number of risks, uncertainties and assumptions which could cause actual results to differ materially from those described in the forward-looking statements. The following factors are among those that may cause actual results to differ materially from our forward-looking statements: the approval of the transaction by IGEN shareholders; the value of the transaction to shareholders; the satisfaction of closing conditions; the timing of the closing for the transaction; our relationship with Roche Diagnostics GmbH; our ability to develop and introduce new or enhanced products; our ability to enter into new collaborations on favorable terms, if at all; our ability to suspend ongoing patent litigation and to renew these litigations if the transaction does not close; our ability to expand the commercialization of existing products; our ability to effectively compete in the various markets in which we currently, and plan to, have product offerings; domestic and foreign governmental and public policy changes, particularly related to health care costs, that may affect new investments and purchases made by customers; availability of financing and financial resources in the amounts, at the times and on the terms required to support our future business; protection and validity of patent and other intellectual property rights; and changes in general economic, business and industry conditions. These and other risk factors are discussed in IGEN's annual report on Form 10-K for the year ended March 31, 2003, filed with the Securities and Exchange Commission (SEC) and available at the Investor Relations section of IGEN's web site at www.igen.com or the SEC's web site at www.sec.gov. IGEN disclaims any intent or obligation to update any forward looking statements. ADDITIONAL INFORMATION AND WHERE YOU CAN FIND IT Investors and security holders are urged to read the proxy statement/prospectus regarding the business combination transaction referenced in the foregoing information, when it becomes available, because it will contain important information. The proxy statement/prospectus will be filed with the Securities and Exchange Commission by IGEN and IGEN Integrated Healthcare, LLC. Investors and security holders may obtain a free copy of the proxy statement/prospectus 3 (when it is available) and other documents filed by IGEN and IGEN Integrated Healthcare, LLC with the SEC at the SEC's web site at www.sec.gov. The proxy statement/prospectus (when it is available) and these other documents may also be obtained for free from IGEN by directing a request to IGEN International, Inc., 16020 Industrial Drive, Gaithersburg, MD 20877, (301) 869-9800, Attention: General Counsel. IGEN, its directors, and certain of its executive officers may be considered participants in the solicitation of proxies in connection with the business combination transaction referenced in the foregoing information. Information about the directors and executive officers of IGEN and their ownership of IGEN stock is set forth in IGEN's Proxy Statement with respect to its Annual Meeting for the year ended March 31, 2002. Investors may obtain additional information regarding the interests of such participants by reading the proxy statement/prospectus when it becomes available. Item 7. Financial Statements and Exhibits (a) Financial Statements None. (b) Pro Forma Financial Information. None. (c) Exhibits 99.1 Agreement and Plan of Merger, dated as of July 24, 2003, among Roche Holding Ltd, 66 Acquisition Corporation II, IGEN International, Inc. and IGEN Integrated Healthcare, LLC. 99.2 Restructuring Agreement, dated as of July 24, 2003, between IGEN International, Inc. and IGEN Integrated Healthcare, LLC. 99.3 Post-Closing Covenants Agreement, dated as of July 24, 2003, among Roche Holding Ltd, IGEN International, Inc. and IGEN Integrated Healthcare, LLC. 99.4 Tax Allocation Agreement, dated as of July 24, 2003, among Roche Holding Ltd, 66 Acquisition Corporation II, IGEN International, Inc. and IGEN Integrated Healthcare, LLC. 99.5 Ongoing Litigation Agreement, dated as of July 24, 2003, among IGEN International, Inc., Roche Diagnostics GmbH and Roche Diagnostics Corporation. 99.6 Release and Agreement, dated as of July 24, 2003, between IGEN International, Inc., IGEN Integrated Healthcare, LLC and each company 4 listed on the signature page thereto under the heading "Related Companies". 99.7 Global Consent and Agreement, dated as of July 24, 2003, among Roche Holding Ltd, IGEN International, Inc., IGEN Integrated Healthcare, LLC, Meso Scale Diagnostics, LLC., Meso Scale Technologies, LLC., Jacob Wohlstadter and JW Consulting Services L.L.C. 99.8 Letter Agreement, dated July 24, 2003, among Meso Scale Diagnostics, LLC., Meso Scale Technologies, LLC., JW Consulting Services, L.L.C., Jacob N. Wohlstadter and IGEN International, Inc. 99.9 Letter Agreement, dated July 24, 2003, between Samuel J. Wohlstadter and IGEN Integrated Healthcare, LLC. 5 EXHIBIT INDEX Exhibit No. Description - ----------- ----------- 99.1 Agreement and Plan of Merger, dated as of July 24, 2003, among Roche Holding Ltd, 66 Acquisition Corporation II, IGEN International, Inc. and IGEN Integrated Healthcare, LLC. 99.2 Restructuring Agreement, dated as of July 24, 2003, between IGEN International, Inc. and IGEN Integrated Healthcare, LLC. 99.3 Post-Closing Covenants Agreement, dated as of July 24, 2003, among Roche Holding Ltd, IGEN International, Inc. and IGEN Integrated Healthcare, LLC. 99.4 Tax Allocation Agreement, dated as of July 24, 2003, among Roche Holding Ltd, 66 Acquisition Corporation II, IGEN International, Inc. and IGEN Integrated Healthcare, LLC. 99.5 Ongoing Litigation Agreement, dated as of July 24, 2003, among IGEN International, Inc., Roche Diagnostics GmbH and Roche Diagnostics Corporation. 99.6 Release and Agreement, dated as of July 24, 2003, between IGEN International, Inc., IGEN Integrated Healthcare, LLC and each company listed on the signature page thereto under the heading "Related Companies". 99.7 Global Consent and Agreement, dated as of July 24, 2003, among Roche Holding Ltd, IGEN International, Inc., IGEN Integrated Healthcare, LLC, Meso Scale Diagnostics, LLC., Meso Scale Technologies, LLC., Jacob Wohlstadter and JW Consulting Services L.L.C. 99.8 Letter Agreement, dated July 24, 2003, among Meso Scale Diagnostics, LLC., Meso Scale Technologies, LLC., JW Consulting Services, L.L.C., Jacob N. Wohlstadter and IGEN International, Inc. 99.9 Letter Agreement, dated July 24, 2003, between Samuel J. Wohlstadter and IGEN Integrated Healthcare, LLC. 6 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: July 24, 2003 IGEN INTERNATIONAL, INC. By: /s/ Richard J. Massey ----------------------------- Name: Richard J. Massey Title: President and Chief Operating Officer 7 EX-99.1 3 y88675exv99w1.txt AGREEMENT AND PLAN OF MERGER EXHIBIT 99.1 ================================================================================ AGREEMENT AND PLAN OF MERGER Dated as of July 24, 2003, Among ROCHE HOLDING LTD, 66 ACQUISITION CORPORATION II, IGEN INTERNATIONAL, INC. And IGEN INTEGRATED HEALTHCARE, LLC ================================================================================ TABLE OF CONTENTS
Page ---- ARTICLE I The Merger SECTION 1.01. The Merger ................................................................................ 3 SECTION 1.02. Closing ................................................................................... 4 SECTION 1.03. Effective Time............................................................................. 4 SECTION 1.04. Effects ................................................................................... 5 SECTION 1.05. Certificate of Incorporation and By-laws................................................... 5 SECTION 1.06. Directors ................................................................................. 5 SECTION 1.07. Officers .................................................................................. 5 ARTICLE II Effect on the Capital Stock of the Constituent Corporations; Exchange of Certificates SECTION 2.01. Effect on Capital Stock.................................................................... 5 SECTION 2.02. Exchange of Certificates................................................................... 8 SECTION 2.03. Company Convertible Debentures............................................................. 15 SECTION 2.04. Company Warrants........................................................................... 15 ARTICLE III Related Transactions SECTION 3.01. Restructuring of Assets and Assumption of Liabilities...................................... 15 SECTION 3.02. Ongoing Litigation Agreement............................................................... 16 ARTICLE IV Representations and Warranties of the Company SECTION 4.01. Organization, Standing and Power........................................................... 17 SECTION 4.02. Capital Structure; Subsidiaries............................................................ 17 SECTION 4.03. Newco ..................................................................................... 20
ii SECTION 4.04. Authority; Execution and Delivery; Enforceability.......................................... 20 SECTION 4.05. No Conflicts; Consents..................................................................... 22 SECTION 4.06. Intellectual Property...................................................................... 24 SECTION 4.07. Brokers; Schedule of Fees and Expenses..................................................... 27 SECTION 4.08. Opinion of Financial Advisor............................................................... 27 SECTION 4.09. SEC Filings ............................................................................... 27 SECTION 4.10. Financial Statements....................................................................... 28 SECTION 4.11. Disclosure Documents....................................................................... 29 SECTION 4.12. Litigation ................................................................................ 29 SECTION 4.13. Absence of Certain Changes................................................................. 30 SECTION 4.14. Employee Matters Generally; Company Benefit Plans.......................................... 32 SECTION 4.15. No Undisclosed Material Liabilities........................................................ 33 SECTION 4.16. Transactions with Related Persons.......................................................... 33 SECTION 4.17. Compliance with Law and Judgments.......................................................... 35 SECTION 4.18. Environmental Matters...................................................................... 35 SECTION 4.19. Tax Matters ............................................................................... 35 SECTION 4.20. Newco Solvency............................................................................. 37 SECTION 4.21. Limitation ................................................................................ 37 ARTICLE V Representations and Warranties of Parent and Sub SECTION 5.01. Organization, Standing and Power........................................................... 38 SECTION 5.02. Sub ....................................................................................... 38 SECTION 5.03. Authority; Execution and Delivery; Enforceability.......................................... 39 SECTION 5.04. No Conflicts; Consents..................................................................... 39 SECTION 5.05. Brokers ................................................................................... 41 SECTION 5.06. Financing .. .............................................................................. 41 SECTION 5.07. Financial Statements....................................................................... 41 SECTION 5.08. Stock Ownership; Interested Stockholders................................................... 41 ARTICLE VI Covenants Relating to Conduct of Business SECTION 6.01. Conduct of Business........................................................................ 41 SECTION 6.02. No Solicitation............................................................................ 46
iii ARTICLE VII Additional Agreements SECTION 7.01. Preparation of the Proxy Statement, the Newco Form S-4 and the Newco Form 8-A; Company Stockholders Meeting .................................................................... 50 SECTION 7.02. Access to Information; Confidentiality..................................................... 52 SECTION 7.03. Reasonable Best Efforts; Notification...................................................... 53 SECTION 7.04. Stock Options.............................................................................. 54 SECTION 7.05. Certain Claims............................................................................. 55 SECTION 7.06. Fees and Expenses.......................................................................... 57 SECTION 7.07. Public Announcements....................................................................... 59 SECTION 7.08. Transfer Taxes............................................................................. 59 SECTION 7.09. Rights Agreement; Consequences if Rights Triggered......................................... 59 SECTION 7.10. Listing of Newco Common Stock.............................................................. 60 SECTION 7.11. Modifications to the License Agreement..................................................... 60 SECTION 7.12. Standstill ................................................................................ 60 SECTION 7.13. Pending Litigation......................................................................... 61 SECTION 7.14. Company Secured Notes...................................................................... 61 SECTION 7.15. Restructuring.............................................................................. 62 SECTION 7.16. Notices of Certain Events.................................................................. 62 SECTION 7.17. Company Financing Transaction.............................................................. 63 ARTICLE VIII Conditions Precedent SECTION 8.01. Conditions to Each Party's Obligation to Effect the Merger................................. 63 SECTION 8.02. Conditions to Obligations of Parent and Sub................................................ 64 SECTION 8.03. Conditions to Obligations of the Company and Newco......................................... 66 SECTION 8.04. Frustration of Closing Conditions.......................................................... 67 ARTICLE IX Termination, Amendment and Waiver SECTION 9.01. Termination ............................................................................... 67 SECTION 9.02. Effect of Termination...................................................................... 69 SECTION 9.03. Amendment ................................................................................. 69
iv SECTION 9.04. Extension; Waiver.......................................................................... 70 SECTION 9.05. Procedure for Termination, Amendment, Extension or Waiver.................................. 70 ARTICLE X General Provisions SECTION 10.01. Nonsurvival of Representations and Warranties............................................. 71 SECTION 10.02. Notices .................................................................................. 71 SECTION 10.03. Definitions .............................................................................. 72 SECTION 10.04. Interpretation............................................................................ 78 SECTION 10.05. Severability.............................................................................. 78 SECTION 10.06. Counterparts.............................................................................. 79 SECTION 10.07. Entire Agreement; No Third-Party Beneficiaries............................................ 79 SECTION 10.08. Governing Law............................................................................. 79 SECTION 10.09. Assignment ............................................................................... 79 SECTION 10.10. Enforcement; Consent to Service of Process................................................ 80
v Index of Defined Terms Acquiring Person................................................................ Company Rights Agreement affiliate....................................................................... Section 10.03 Agreement....................................................................... Preamble Appraisal Shares................................................................ Section 2.01(d) Assumed Liabilities............................................................. Restructuring Agreement Authorized Agent................................................................ Section 10.10(b) Cash Amount..................................................................... Section 7.17 Certificates.................................................................... Section 2.02(b) Certificate of Merger........................................................... Section 1.03 Closing......................................................................... Section 1.02 Closing Date.................................................................... Section 1.02 Code............................................................................ Recitals Commercial Agreements........................................................... Section 10.03 Company......................................................................... Preamble Company Benefit Plan............................................................ Section 4.14(c) Company Board................................................................... Section 4.04(b) Company By-laws................................................................. Section 4.01 Company Capital Stock........................................................... Section 4.02(a) Company Charter................................................................. Section 4.01 Company Common Stock............................................................ Recitals Company Convertible Debentures.................................................. Section 4.02(a) Company Derivative Securities................................................... Section 4.02(a) Company Disclosure Letter....................................................... Article IV Company Records................................................................. Restructuring Agreement Company Rights.................................................................. Section 4.02(a) Company Rights Agreement........................................................ Section 4.02(a) Company SEC Filings............................................................. Section 4.09(a) Company Secured Notes........................................................... Section 7.14 Company Series A Preferred Stock................................................ Section 4.02(a) Company Series B Preferred Stock................................................ Section 4.02(a) Company Stockholder Approval.................................................... Section 4.04(c) Company Stockholders Meeting.................................................... Section 7.01(b) Company Stock Option............................................................ Section 7.04(c) Company Stock Plans............................................................. Section 7.04(c) Company Subsidiaries............................................................ Section 4.02(b) Company Takeover Proposal....................................................... Section 6.02(h) Company Warrants................................................................ Section 4.02(a) Confidentiality Agreement....................................................... Section 7.02 Consent......................................................................... Section 4.05(b) Continuing Licensee Subsidiary.................................................. Restructuring Agreement Contract........................................................................ Section 4.05(a) Court of Appeals Opinion........................................................ Section 10.03
vi Covenants Not To Sue............................................................ Section 10.03 Covenant Payment................................................................ Recitals Covered ECL Technology.......................................................... Section 10.03 Cut-Off Date.................................................................... Section 7.17 Damages Payment................................................................. Recitals DGCL............................................................................ Section 1.01 Distribution Date............................................................... Company Rights Agreement Effective Time.................................................................. Section 1.03 Environmental Law............................................................... Section 10.03 ERISA........................................................................... Section 4.14(a) ERISA Affiliate................................................................. Section 4.14(a) Excess Shares................................................................... Section 2.02(e) Exchange Act.................................................................... Section 4.05(b) Exchange Agent.................................................................. Section 2.02(a) Exchange Fund................................................................... Section 2.02(a) Exchange Ratio.................................................................. Section 2.01(c) FHLR............................................................................ Section 10.03 Final Judgment.................................................................. Section 3.02(b) GAAP............................................................................ Section 4.10 Governmental Entity............................................................. Section 4.05(b) Hazardous Material.............................................................. Section 10.03 HSR Act......................................................................... Section 4.05(b) Hyperion........................................................................ Section 4.16(e) ICS............................................................................. Section 4.16(e) Improvements License Agreement.................................................. Section 10.03 Insolvent....................................................................... Section 10.03 Intellectual Property Rights.................................................... Section 10.03 Intended Treatment.............................................................. Recitals I/R Agreements.................................................................. Restructuring Agreement Judgment........................................................................ Section 4.05(a) June 30 Royalty Payment......................................................... Recitals JW.............................................................................. Section 10.03 JW Consulting................................................................... Section 10.03 Law............................................................................. Section 4.05(a) Letter Agreement................................................................ Section 7.02 Liabilities..................................................................... Section 10.03 License Agreement............................................................... Restructuring Agreement Licensed Intellectual Property Rights........................................... Section 10.03 License Litigation.............................................................. Section 10.03 Liens........................................................................... Section 4.02(b) Limited Mutual Release and Agreement............................................ Section 10.03 Loan............................................................................ Section 7.17 Merger.......................................................................... Recitals Merger Consideration............................................................ Section 2.01(c) MSD............................................................................. Section 10.03
vii MSD Agreements.......................................................... Section 10.03 MSD Consent............................................................. Section 10.03 MST..................................................................... Section 10.03 Nasdaq.................................................................. Section 2.02(e) Newco................................................................... Preamble Newco Common Stock...................................................... Recitals Newco Company........................................................... Restructuring Agreement Newco Form 8-A.......................................................... Section 4.05(b) Newco Form S-4.......................................................... Section 4.05(b) Newco Information....................................................... Post-Closing Covenants Agreement Newco I/R Agreement..................................................... Restructuring Agreement Newco Rights............................................................ Section 10.03 Newco Shares Trust...................................................... Section 2.02(e) New Patent Litigation................................................... Section 10.03 1992 License Agreement.................................................. Section 10.03 Ongoing Litigation Agreement............................................ Recitals Option Shares........................................................... Section 7.04(a) Outside Date............................................................ Section 9.01(b) Owned Intellectual Property Rights...................................... Section 10.03 Parent.................................................................. Preamble Parent Material Adverse Effect.......................................... Section 10.03 Parent Note............................................................. Section 7.17 PCR License Agreement................................................... Section 10.03 PCR Services Agreement.................................................. Section 10.03 Per Share Cash Merger Consideration..................................... Recitals person.................................................................. Section 10.03 Post-Closing Covenants Agreement........................................ Recitals Proteinix............................................................... Section 4.16(e) Proxy Statement......................................................... Section 4.05(b) R Corp.................................................................. Recitals R Diagnostics........................................................... Recitals Related Persons......................................................... Section 4.16 Release................................................................. Section 10.03 Representatives......................................................... Section 6.02(a) Restructuring........................................................... Restructuring Agreement Restructuring Agreement................................................. Recitals RMS..................................................................... Section 10.03 R Party ................................................................ Section 10.03 SEC..................................................................... Section 4.05(b) Section 262............................................................. Section 2.01(d) Securities Act.......................................................... Section 4.09(c) Senior Secured Notes Purchase Agreement............................................. Section 10.03 Shares Acquisition Date................................................. Company Rights Agreement Sub..................................................................... Preamble
viii subsidiary...................................................................... Section 10.03 Subsidiary Securities........................................................... Section 4.02(b) Superior Company Proposal....................................................... Section 6.02(h) Surviving Corporation........................................................... Section 1.01 Tax Allocation Agreement........................................................ Recitals Taxes........................................................................... Section 4.19(f) Taxing Authority................................................................ Section 4.19(f) Tax Return...................................................................... Section 4.19(f) Transactions.................................................................... Section 1.01 Transaction Agreements.......................................................... Section 10.03 Transaction Material Adverse Effect............................................. Section 10.03 Transfer Taxes.................................................................. Section 7.08 Voting Company Debt............................................................. Section 4.02(a) Wellstat Biologics.............................................................. Section 4.16(e) Wellstat Therapeutics........................................................... Section 4.16(e)
AGREEMENT AND PLAN OF MERGER dated as of July 24, 2003 (this "Agreement"), among ROCHE HOLDING LTD, a joint stock company organized under the laws of Switzerland ("Parent"), 66 ACQUISITION CORPORATION II, a Delaware corporation ("Sub") and a wholly owned subsidiary of Parent, IGEN INTERNATIONAL, INC., a Delaware corporation (the "Company"), and IGEN INTEGRATED HEALTHCARE, LLC, a Delaware limited liability company ("Newco") and a wholly owned subsidiary of the Company. WHEREAS the respective Boards of Directors of Parent, Sub, the Company and Newco have approved and declared advisable this Agreement and the transactions contemplated hereby on the terms and subject to the conditions set forth in this Agreement and the sole stockholder of Sub has adopted this Agreement; WHEREAS simultaneously with the execution and delivery of this Agreement, the Company, Roche Diagnostics GmbH, a German limited liability company ("R Diagnostics"), Roche Diagnostics Corporation, an Indiana corporation ("R Corp"), MSD (as defined in Section 10.03) and MST (as defined in Section 10.03) are entering into an agreement (the "Ongoing Litigation Agreement") pursuant to which, among other things, R Diagnostics and R Corp shall (a) deliver to the Company payment not later than two business days after the date of this Agreement, by wire transfer to a bank account designated by the Company, (i) $18,600,000 in immediately available funds (the "Damages Payment") in respect of damages arising out of the License Litigation (as defined in Section 10.03), and (ii) $10,620,000 in immediately available funds for the royalties payment due and payable under the 1992 License Agreement (as defined in Section 10.03) for the quarter ended June 30, 2003 (the "June 30 Royalty Payment"), (b) be entitled to rely on the covenant not to sue with respect to the Licensed ECL Technology (as defined in the 1992 License Agreement (as defined in Section 10.03)) in accordance with the terms of the Ongoing Litigation Agreement until the earlier to occur of the Effective Time (as defined in Section 1.03) and the termination of this Agreement for any reason and (c) deliver to the Company payment, by wire transfer to a bank account designated by the Company, $5,000,000 in 2 immediately available funds (i) not later than two business days after the date of this Agreement and (ii) on the last day of each month ending after August 1, 2003, and prior to the earlier to occur of the Effective Time and the date of termination of this Agreement for any reason (each such payment, a "Covenant Payment" and collectively, the "Covenant Payments"); provided that R Diagnostics shall be obligated in accordance with the Ongoing Litigation Agreement to make a Covenant Payment immediately prior to the Effective Time or not later than two business days after the Merger Agreement is terminated; WHEREAS simultaneously with the execution and delivery of this Agreement, the Company and Newco are entering into an agreement (the "Restructuring Agreement") pursuant to which, prior to the Effective Time, the Restructuring (as defined in the Restructuring Agreement) will be effected, as part of which (a) certain of the assets of the Company will be transferred to Newco or one or more of Newco's subsidiaries and (b) Newco or one or more of its subsidiaries will assume the Assumed Liabilities (as defined in the Restructuring Agreement); WHEREAS on the terms and subject to the conditions set forth in this Agreement, at the Effective Time, Sub will merge with and into the Company (the "Merger") as a result of which (a) a portion of each issued share of common stock, par value $0.001 per share, of the Company (including, except as the context otherwise requires, the associated Company Rights (as defined in Section 4.02(a)), the "Company Common Stock"), not owned by the Company, Parent, Sub or Parent's other subsidiaries shall be converted into the right to receive a number of fully paid and non-assessable shares of common stock, par value $0.001 per share, of Newco (including, except as the context otherwise requires, the associated Newco Rights (as defined in Section 10.03), the "Newco Common Stock"), equal to the Exchange Ratio (as defined in Section 2.01(c)), in exchange for such portion of each share of Company Common Stock that is equal in value to the Newco Common Stock received and (b) the remaining portion of each share of Company Common Stock shall be converted into the right to receive cash in an amount equal to $47.25 (the "Per Share Cash Merger Consideration"), each as herein provided; 3 WHEREAS the Company and Parent intend to treat the exchange of Company Common Stock for cash and the exchange of Company Common Stock for Newco Common Stock as a single integrated transaction comprising a taxable sale or exchange of Company Common Stock as described in Section 1001 of the Internal Revenue Code of 1986, as amended (the "Code"), and a complete redemption of the remaining Company Common Stock owned by the relevant shareholders within the meaning of Section 302(b)(3) of the Code, respectively (the "Intended Treatment"); WHEREAS simultaneously with the execution and delivery of this Agreement, Parent, the Company and Newco are entering into an agreement (the "Post-Closing Covenants Agreement") that sets forth certain agreements that will govern certain matters that may arise following the Effective Time; WHEREAS simultaneously with the execution and delivery of this Agreement, Parent, Sub, the Company and Newco are entering into an agreement (the "Tax Allocation Agreement") relating to certain Tax (as defined in Section 4.19(f)) matters; WHEREAS simultaneously with the execution and delivery of this Agreement, the parties hereto and their applicable affiliates are entering into certain other agreements relating to the Transactions (as defined in Section 1.01) and certain other commercial arrangements; and WHEREAS Parent, Sub, the Company and Newco desire to make certain representations, warranties, covenants and agreements in connection with the Merger and also to establish various conditions to the Merger. NOW, THEREFORE, the parties hereto agree as follows: ARTICLE I The Merger SECTION 1.01. The Merger. On the terms and subject to the conditions set forth in this Agreement, and 4 in accordance with the Delaware General Corporation Law (the "DGCL"), Sub shall be merged with and into the Company at the Effective Time. At the Effective Time, the separate corporate existence of Sub shall cease and the Company shall continue as the surviving corporation (the "Surviving Corporation"). The Merger and the other transactions contemplated by this Agreement and the other Transaction Agreements (as defined in Section 10.03) are referred to in this Agreement collectively as the "Transactions". SECTION 1.02. Closing. The closing of the Merger (the "Closing") shall take place at the offices of Cravath, Swaine & Moore LLP, 825 Eighth Avenue, New York, New York 10019 at 10:00 a.m. on the second business day following the satisfaction (or, to the extent permitted by Law (as defined in Section 4.05(a)), waiver by the applicable party or parties) of the conditions set forth in Article VIII (other than those conditions that by their terms cannot be satisfied until the time of the Closing but subject to the satisfaction (or, to the extent permitted by Law, waiver by the applicable party or parties) of such conditions); provided, however, that if all the conditions set forth in Article VIII shall not have been satisfied (or, to the extent permitted by Law, waived by the applicable party or parties) on such second business day, then the Closing shall take place on the first business day on which all such conditions shall have been satisfied (or, to the extent permitted by Law, waived by the applicable party or parties). The date on which the Closing occurs is referred to in this Agreement as the "Closing Date". SECTION 1.03. Effective Time. Prior to the Closing, the Company shall prepare, and, as soon as practicable on the Closing Date, the Company shall file with the Secretary of State of the State of Delaware, a certificate of merger (the "Certificate of Merger") executed in accordance with the relevant provisions of the DGCL. Parent or the Surviving Corporation shall make all other filings or recordings required under the DGCL as soon as practicable on or after the Closing Date. The Merger shall become effective at such time as the Certificate of Merger is duly filed with such Secretary of State, or at such other time as Parent and the Company shall agree and specify in the Certificate of Merger (the time at which the Merger becomes effective being the "Effective Time"). 5 SECTION 1.04. Effects. The Merger shall have the effects set forth in Section 259 of the DGCL. SECTION 1.05. Certificate of Incorporation and By-laws. (a) The certificate of incorporation of the Company, as in effect immediately prior to the Effective Time, shall be amended at the Effective Time so that Article IV of such certificate of incorporation is amended to read in its entirety as follows: "The total number of shares of all classes of stock which the corporation shall have authority to issue is 100,000 shares of Common Stock, par value $0.001 per share", and, as so amended, such certificate of incorporation shall be the certificate of incorporation of the Surviving Corporation until thereafter changed or amended as provided therein or by applicable Law. (b) The by-laws of Sub as in effect immediately prior to the Effective Time shall be the by-laws of the Surviving Corporation until thereafter changed or amended as provided therein or by applicable Law. SECTION 1.06. Directors. The directors of Sub immediately prior to the Effective Time shall be the directors of the Surviving Corporation, until the earlier of their resignation or removal or until their respective successors are duly elected and qualified, as the case may be. SECTION 1.07. Officers. The officers of Sub immediately prior to the Effective Time shall be the officers of the Surviving Corporation, until the earlier of their resignation or removal or until their respective successors are duly elected or appointed and qualified, as the case may be. ARTICLE II Effect on the Capital Stock of the Constituent Corporations; Exchange of Certificates SECTION 2.01. Effect on Capital Stock. At the Effective Time, by virtue of the Merger and without any action on the part of any holder of any shares of Company Common Stock or any shares of capital stock of Sub: 6 (a) Capital Stock of Sub. Each issued and outstanding share of capital stock of Sub shall be converted into and become one fully paid and nonassessable share of common stock, par value $0.001 per share, of the Surviving Corporation. (b) Cancelation of Treasury Stock and Parent- Owned Stock. Each share of Company Common Stock that is owned by the Company, Parent or Sub shall no longer be outstanding and shall automatically be canceled and retired and shall cease to exist, and no consideration shall be delivered or deliverable in exchange therefor. Each share of Company Common Stock that is owned by any subsidiary of the Company or Parent (other than Sub) shall automatically be converted into one fully paid and nonassessable share of common stock, par value $0.001 per share, of the Surviving Corporation. (c) Conversion of Company Common Stock.(i) Subject to Sections 2.01(b), 2.01(d) and 2.02(e), (A) a portion of each issued and outstanding share of Company Common Stock shall be converted into the right to receive, from the Company, one (the "Exchange Ratio") fully paid and nonassessable share of Newco Common Stock in exchange for such portion of each share of Company Common Stock that is equal in value to the Newco Common Stock received and (B) the remaining portion of each issued and outstanding share of Company Common Stock shall be converted into the right to receive, from Parent or Sub, an amount in cash equal to the Per Share Cash Merger Consideration. (ii) The shares of Newco Common Stock and the cash amount payable upon the conversion of shares of Company Common Stock pursuant to this Section 2.01(c) and cash in lieu of fractional shares of Newco Common Stock as contemplated by Section 2.02(e) are referred to collectively as the "Merger Consideration". As of the Effective Time, all such shares of Company Common Stock shall no longer be outstanding and shall automatically be canceled and retired and shall cease to exist, and each holder of a certificate representing any such shares of Company Common Stock shall cease to have any rights with respect thereto, except the right to receive Merger Consideration and any dividends or other distributions to which such 7 holder is entitled pursuant to Section 2.02(c) upon surrender of such certificate in accordance with Section 2.02, without interest, and except for the right to receive payments to which such holder is entitled pursuant to Section 2.02(d), without interest. (d) Appraisal Rights. Notwithstanding anything in this Agreement to the contrary, shares ("Appraisal Shares") of Company Common Stock that are outstanding immediately prior to the Effective Time and that are held by any person who is entitled to demand and properly demands appraisal of such Shares pursuant to, and who complies in all respects with, Section 262 of the DGCL ("Section 262") shall not be converted into Merger Consideration as provided in Section 2.01(c), but rather the holders of Appraisal Shares shall be entitled to payment of the fair value of such Appraisal Shares in accordance with Section 262; provided, however, that if any such holder shall fail to perfect or otherwise shall waive, withdraw or lose the right to appraisal under Section 262, then the right of such holder to be paid the fair value of such holder's Appraisal Shares shall cease and such Appraisal Shares shall be deemed to have been converted as of the Effective Time into, and to have become exchangeable solely for the right to receive, Merger Consideration as provided in Section 2.01(c). The Company shall serve prompt notice to Parent of any demands received by the Company for appraisal of any shares of Company Common Stock, and Parent shall have the right to participate in and direct all negotiations and proceedings with respect to such demands. Prior to the Effective Time, the Company shall not, without the prior written consent of Parent, make any payment with respect to, or settle or offer to settle, any such demands, or agree to do any of the foregoing. (e) Adjustments. If, during the period between the date of this Agreement and the Effective Time, the number of shares of Company Common Stock issued and outstanding changes (or there is established a record date for changing) as a result of a reclassification, recapitalization, stock split or combination, stock dividend, exchange or readjustment of the Company Common Stock, the Per Share Cash Merger Consideration and the 8 Exchange Ratio shall be appropriately adjusted to reflect such reclassification, recapitalization, stock split or combination, stock dividend, exchange or readjustment. (f) Withholding Rights. Any of Parent, the Surviving Corporation, Newco or the Exchange Agent (as defined in Section 2.02(a)) shall be entitled to deduct and withhold from the consideration otherwise payable to any person pursuant to this Article II such amounts as it may be required to deduct and withhold with respect to the making of such payment in accordance with the Intended Treatment under any provision of Federal, state, local or foreign Tax law. To the extent that amounts so deducted or withheld and paid over to the appropriate Taxing Authority (as defined in Section 4.19(f)) are attributable to the portion of the consideration consisting of Newco Common Stock, then the Surviving Corporation, Newco or the Exchange Agent, as the case may be, will be treated as though the applicable payor withheld an appropriate amount of such consideration otherwise payable to a holder of Company Common Stock pursuant to this Agreement and then sold such consideration for an amount of cash equal to its fair market value at the time of such deemed sale and paid such cash proceeds to the appropriate Taxing Authority. All deducted or withheld amounts described in this Section 2.01(f) shall, for all purposes of this Agreement, be treated as having been paid to the applicable holder of the Company Common Stock, Company Convertible Debentures or Company Warrants (Company Convertible Debentures and Company Warrants, each as defined in Section 4.02(a)), as the case may be, in respect of which the Surviving Corporation, Parent or the Exchange Agent, as the case may be, made such deduction and withholding. SECTION 2.02. Exchange of Certificates.(a) Exchange Agent. (i) As of the Effective Time, the Company shall, or Newco shall, on behalf of the Company, deposit in trust with a bank or trust company as may be designated by Parent and reasonably acceptable to the Company (the "Exchange Agent"), for the benefit of the holders of shares of Company Common Stock outstanding immediately prior to the Effective Time, certificates representing the shares of Newco Common Stock (including all shares of Newco Common Stock owned by the Company at the Effective Time, whether as a result of the 9 Restructuring or otherwise) issuable pursuant to Section 2.01 in exchange for shares of Company Common Stock converted pursuant to this Article II and (ii) Parent shall from time to time as needed deposit in trust with the Exchange Agent for the benefit of holders of shares of Company Common Stock, cash necessary to pay the cash amount of the Merger Consideration payable pursuant to Section 2.01 in exchange for the shares of Company Common Stock converted pursuant to this Article II (such shares of Newco Common Stock and cash, together with any dividends or other distributions with respect thereto, being hereinafter referred to as the "Exchange Fund"). The Exchange Agent shall, pursuant to irrevocable instructions, deliver the Newco Common Stock and cash contemplated to be issued or paid pursuant to Section 2.01 out of the Exchange Fund. The Exchange Fund shall not be used for any other purpose. (b) Exchange Procedures. As soon as reasonably practicable after the Effective Time, the Exchange Agent shall mail to each holder of record of a certificate or certificates (the "Certificates") that immediately prior to the Effective Time represented outstanding shares of Company Common Stock, (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 shall be in such form and have such other provisions as Parent and the Company may reasonably specify prior to the Effective Time) and (ii) instructions for use in effecting the surrender of the Certificates in exchange for Merger Consideration. Upon surrender of a Certificate for cancelation to the Exchange Agent, together with such letter of transmittal, duly executed, 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 certificate representing that number of whole shares of Newco Common Stock (together with cash in lieu of fractional shares) and the amount of cash that such holder has the right to receive pursuant to the provisions of this Article II, and the Certificate so surrendered shall forthwith be canceled. Until such time as a certificate representing Newco Common Stock is issued to or at the direction of the holder of a surrendered Certificate, such Newco Common Stock shall be deemed not outstanding and shall not be entitled to vote on any 10 matter. In the event of a transfer of ownership of Company Common Stock that is not registered in the transfer records of the Company, a certificate representing the appropriate number of whole shares of Newco Common Stock (together with cash in lieu of fractional shares) and the appropriate amount of cash may be issued and paid to a person other than the person in whose name the Certificate so surrendered is registered, if such Certificate shall be properly endorsed or otherwise be in proper form for transfer and the person requesting such payment shall pay any transfer or other Taxes required by reason of the issuance of shares of Newco Common Stock and the payment of cash to a person other than the registered holder of such Certificate or establish to the reasonable satisfaction of Parent and Newco that such Taxes have been paid or are not applicable. No interest shall be paid or accrue on any cash payable upon surrender of any Certificate. (c) Distributions with Respect to Unexchanged Shares. No dividends or other distributions with respect to Newco Common Stock with a record date after the Effective Time shall be paid to the holder of any Certificate with respect to the shares of Newco Common Stock issuable upon surrender thereof, and no cash payment in lieu of fractional shares shall be paid to any such holder pursuant to Section 2.02(e), until the surrender of such Certificate in accordance with this Article II. Subject to applicable Law, following surrender of any such Certificate, there shall be paid to the holder of the certificate representing whole shares of Newco Common Stock issued in exchange therefor, without interest, (i) at the time of such surrender, the amount of any cash payable in lieu of a fractional share of Newco Common Stock to which such holder is entitled pursuant to Section 2.02(e) and the amount of dividends or other distributions with a record date after the Effective Time theretofore paid with respect to such whole shares of Newco Common Stock, and (ii) 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 whole shares of Newco Common Stock. (d) No Further Ownership Rights in Company Common Stock. The Merger Consideration paid upon the 11 surrender for exchange of Certificates in accordance with the terms of this Article II shall be deemed to have been paid in full satisfaction of all rights pertaining to such shares of Company Common Stock, subject, however, to the Surviving Corporation's obligation to pay any dividends or make any other distributions with a record date prior to the Effective Time that may have been declared or made by the Company on such shares of Company Common Stock in accordance with the terms of this Agreement or prior to the date of this Agreement and that remain unpaid at the Effective Time, and after the Effective Time there shall be no further registration of transfers on the stock transfer books of the Surviving Corporation of shares of Company Common Stock that were outstanding immediately prior to the Effective Time. If, after the Effective Time, any Certificates formerly representing shares of Company Common Stock are presented to the Surviving Corporation or the Exchange Agent for any reason, they shall be canceled and exchanged as provided in this Article II. (e) No Fractional Shares. (i) No certificates or scrip representing fractional shares of Newco Common Stock shall be issued upon the conversion of Company Common Stock pursuant to Section 2.01, and such fractional share interests shall not entitle the owner thereof to vote or to any rights of a holder of Newco Common Stock. For purposes of this Section 2.02(e), all fractional shares to which a single record holder would be entitled as a result of the conversion of all shares of Company Common Stock held by such holder as of the Effective Time under all Certificates shall be aggregated and calculations shall be rounded to three decimal places. (ii) As promptly as practicable following the Effective Time, the Exchange Agent shall determine the excess of (A) the number of shares of Newco Common Stock delivered to the Exchange Agent by the Company or Newco pursuant to Section 2.02(a) over (B) the aggregate number of whole shares of Newco Common Stock to be issued to holders of Company Common Stock pursuant to Section 2.02(b) (such excess being herein called the "Excess Shares"). As soon after the Effective Time as practicable, the Exchange Agent, as agent for the holders of Company Common Stock, shall sell the Excess Shares at then prevailing prices on 12 the Nasdaq Stock Market ("Nasdaq"), if the shares of Newco Common Stock are quoted on Nasdaq, or otherwise on the national securities exchange on which the shares of Newco Common Stock are listed, all in the manner provided in Section 2.02(e)(iii). (iii) The sale of the Excess Shares by the Exchange Agent shall be executed on the Nasdaq or such national securities exchange, as the case may be, and shall be executed in round lots to the extent practicable. The proceeds from such sale or sales available for distribution to the holders of Company Common Stock shall be reduced by the compensation payable to the Exchange Agent and the expenses incurred by the Exchange Agent, in each case, in connection with such sale or sales of the Excess Shares, including all related commissions, Transfer Taxes (as defined in Section 7.08) and other out-of-pocket transaction costs. Until the net proceeds of such sale or sales have been distributed to the holders of Company Common Stock entitled thereto, the Exchange Agent shall hold such proceeds in trust for such holders of Company Common Stock (the "Newco Shares Trust"). The Exchange Agent shall determine the portion of the Newco Shares Trust to which each holder of a Certificate shall be entitled, if any, by multiplying the amount of the aggregate net proceeds comprising the Newco Shares Trust by a fraction, the numerator of which is the amount of the fractional share interest in a share of Newco Common Stock to which such holder is entitled under Section 2.01(c) (or would be entitled but for this Section 2.02(e)) and the denominator of which is the aggregate amount of fractional interests in a share of Newco Common Stock to which all holders of Company Common Stock are entitled. (iv) As soon as practicable after the determination of the amount of cash, if any, to be paid to holders of Company Common Stock in lieu of any fractional share interests in Newco Common Stock, the Exchange Agent shall in accordance with this Article II, make available such amounts, without interest, to the former holders of Company Common Stock entitled to receive such cash. 13 (f) Termination of Exchange Fund and Newco Shares Trust. Any portion of the Exchange Fund that remains undistributed to the holders of the Certificates for 9 months after the Effective Time shall be delivered (i) in the case of shares of Newco Common Stock deposited in the Exchange Fund by the Company or Newco and cash deposited in the Exchange Fund by Newco, to Newco and (ii) in the case of cash deposited in the Exchange Fund by Parent or the Surviving Corporation, to Parent or the Surviving Corporation, as applicable, in each case upon demand, and any holders of the Certificates who have not theretofore complied with this Article II shall thereafter (x) look only to Newco for, and Newco shall remain liable for, payment of their claim for Newco Common Stock and any dividends or distributions with respect to Newco Common Stock and (y) look only to Parent for, and Parent shall remain liable for, payment of their claim for cash payable pursuant to Section 2.01(c)(i)(B), in each case in accordance with this Article II. Any portion of the Newco Shares Trust that remains undistributed to the holders of the Certificates for 9 months after the Effective Time shall be delivered to Newco, upon demand, and any holder of the Certificates who has not theretofore complied with this Article II shall thereafter look only to Newco for payment of its claim for such cash. (g) No Liability. None of Parent, Sub, the Company, Newco or the Exchange Agent shall be liable to any person in respect of any shares of Newco Common Stock or cash from the Exchange Fund or the Newco Shares Trust delivered to a public official pursuant to any applicable abandoned property, escheat or similar Law. If any Certificate has not been surrendered prior to the date on which Merger Consideration in respect of such Certificate (or any dividends or other distributions with respect thereto) would otherwise escheat to or become the property of any Governmental Entity (as defined in Section 4.05(b))), any such shares or cash in respect of such Certificate shall, to the extent permitted by applicable Law, become the property of the Surviving Corporation (with respect to any remaining cash payable pursuant to Section 2.01(c)(i)(B)) and the property of Newco (with respect to any remaining shares of Newco Common Stock and cash related thereto), free and clear of all 14 claims or interest of any person previously entitled thereto. (h) Investment of Exchange Fund and the Newco Shares Trust. The Exchange Agent shall invest any cash included in the Exchange Fund and payable pursuant to Section 2.01(c)(i)(B) as directed by Parent, and any other cash included in the Exchange Fund as directed by Newco, in each case on a daily basis. Pending payment of such funds to the holders of Certificates for shares of Company Common Stock, such funds will be held and shall be invested by the Exchange Agent as directed in accordance with the previous sentence (so long as such directions do not impair the rights of holders of Company Common Stock) in the direct obligations of the United States, obligations for which the full faith and credit of the United States is pledged to provide for the payment of principal and interest or commercial paper rated of the highest quality by Moody's Investors Services, Inc. or Standard & Poor's Corporation. Parent or Newco, as applicable, will promptly replace any monies lost through any investment made in accordance with its instructions pursuant to this Section 2.02(h). If for any reason (including losses) the Exchange Fund or the Newco Shares Trust is inadequate to pay the amounts to which holders of the Company Common Stock shall be entitled under this Article II, Parent and the Surviving Corporation shall in any event be liable for payment thereof (with respect to cash payable pursuant to Section 2.01(c)(i)(B)) and Newco shall in any event be liable for payment thereof (with respect to shares of Newco Common Stock and cash related thereto). The Exchange Fund and the Newco Shares Trust shall not be used except as provided in this Agreement. Any interest and other income resulting from such investments shall be paid to Parent or the Surviving Corporation, as Parent directs (with respect to cash payable pursuant to Section 2.01(c)(i)(B)) and to Newco (with respect to any other cash). (i) Lost, Stolen or Destroyed Certificates. If any Certificate has 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 reasonably required by Parent or Newco, the posting by such person of a bond in such reasonable amount as Parent or Newco may direct as indemnity against any claim 15 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 Merger Consideration (and any dividends or other distributions with respect thereto) pursuant to this Article II. SECTION 2.03. Company Convertible Debentures. As of and after the Effective Time, from time to time and at any time upon the conversion of any Company Convertible Debentures by any holder thereof, (a) Newco shall deliver to such holder the number of shares of Newco Common Stock and cash in lieu of fractional shares of Newco Common Stock such holder would have been entitled to receive as if such holder had converted the Company Convertible Debentures into shares of Company Common Stock immediately prior to the Effective Time and (b) Parent shall, or shall cause the Company to, deliver to such holder the amount of cash such holder would have been entitled to receive as if such holder had converted the Company Convertible Debentures into shares of Company Common Stock immediately prior to the Effective Time. SECTION 2.04. Company Warrants. As of and after the Effective Time, from time to time and at any time upon the exercise of any Company Warrants by any holder thereof, (a) Newco shall deliver to such holder the number of shares of Newco Common Stock and cash in lieu of fractional shares of Newco Common Stock as if such holder had exercised the Company Warrant for the shares of Company Common Stock issuable upon exercise of the Company Warrant immediately prior to the Effective Time and (b) Parent shall, or shall cause the Company to, deliver to such holder the amount of cash as if such holder had exercised the Company Warrant for the shares of Company Common Stock issuable upon exercise of the Company Warrant immediately prior to the Effective Time. ARTICLE III Related Transactions SECTION 3.01. Restructuring of Assets and Assumption of Liabilities. Prior to the Effective Time and pursuant to the terms of the Restructuring Agreement, the Company and the Company Subsidiaries (as defined in 16 Section 4.02(b)), including Newco, shall consummate the Restructuring upon the terms and subject to the conditions set forth in the Restructuring Agreement. SECTION 3.02. Ongoing Litigation Agreement. (a) Simultaneously with the execution and delivery of the Ongoing Litigation Agreement, Parent shall cause R Diagnostics to pay to the Company the Damages Payment and the June 30 Royalty Payment. The Damages Payment and the June 30 Royalty Payment are non-refundable and irrevocable in all circumstances. (b) Notwithstanding any provision in this Agreement to the contrary, the parties agree that the Damages Payment is made solely with respect to the monetary damages awarded in the License Litigation as set forth in the Court of Appeals Opinion (as defined in Section 10.03) and that, except as provided in the Ongoing Litigation Agreement, neither the Company nor R Diagnostics shall be deemed to have (i) made a settlement with respect to, waived, given-up, compromised, prejudiced or qualified in any manner (A) the right of such person to fully prosecute the New Patent Litigation (as defined in Section 10.03), (B) any rights or interests of such person which are the subject of the New Patent Litigation or (C) any claim made or to be made by such person, whether for damages or otherwise, in the New Patent Litigation or (ii) made a settlement with respect to, waived, given up, compromised, prejudiced or qualified in any manner any of its other rights or interests under the final judgment entered by the United States District Court for the District of Maryland in the License Litigation on February 15, 2002 (the "Final Judgment")(as modified by the Court of Appeals Opinion) or any final judgment entered by the United States District Court for the District of Maryland not inconsistent with the mandate to be returned by the United States Court of Appeals for the Fourth Circuit in connection with the Court of Appeals Opinion. ARTICLE IV Representations and Warranties of the Company The Company represents and warrants to Parent and Sub that, except (a) as disclosed or set forth in the 17 Company SEC Filings (as defined in Section 4.09(a)) filed and publicly available prior to the date of this Agreement or (b) as set forth in the letter (with specific reference to the Section of this Agreement to which the information stated in such letter relates and such other Sections to the extent a matter is disclosed in such a way as to make its relevance to the information called for by such other Section reasonably apparent) dated the date of this Agreement, from the Company to Parent and Sub (the "Company Disclosure Letter"), and, in each case subject to Section 4.21: SECTION 4.01. Organization, Standing and Power. Each of the Company, Newco and the Continuing Licensee Subsidiary (as defined in the Restructuring Agreement) is duly organized, validly existing and in good standing under the laws of the State of Delaware and has all corporate or limited liability company powers, as applicable, governmental licenses and Consents (as defined in Section 4.05(b)) required to carry on its business as now conducted, except for any such licenses and Consents the failure of which to have or obtain that, individually or in the aggregate, does not have a Transaction Material Adverse Effect (as defined in Section 10.03). The Company has made available to Parent true and complete copies of the certificate of incorporation of the Company, as amended through the date of this Agreement (as so amended, the "Company Charter"), the by-laws of the Company, as amended through the date of this Agreement (as so amended, the "Company By-laws"), and the certificate of formation and the limited liability company agreement of each of Newco and the Continuing Licensee Subsidiary, in each case, as amended through the date of this Agreement. SECTION 4.02. Capital Structure; Subsidiaries. (a) The authorized capital stock of the Company consists of 50,000,000 shares of Company Common Stock and 10,000,000 shares of Preferred Stock, par value $0.001 per share, of which (x) 600,000 shares are designated as Series A Junior Participating Preferred Stock (the "Company Series A Preferred Stock") and (y) 25,000 shares are designated as Series B Convertible Preferred Stock, par value $0.001 per share (the "Company Series B Preferred Stock" and, together with the Company Common Stock and the Company Series A Preferred Stock, the "Company Capital Stock"). At the 18 close of business on July 17, 2003, (i) 23,775,277 shares of Company Common Stock were issued and outstanding, (ii) no shares of Company Capital Stock were held by the Company in its treasury, (iii) 1,550,509 shares of Company Common Stock were subject to outstanding Company Stock Options (as defined in Section 7.04(c)) and 742,256 additional shares of Company Common Stock were reserved for and subject to issuance pursuant to the Company Stock Plans (as defined in Section 7.04(c)), (iv) 600,000 shares of Company Series A Preferred Stock were reserved for and subject to issuance in connection with the rights (the "Company Rights") issued pursuant to the Rights Agreement dated as of November 6, 1996 (as amended from time to time, the "Company Rights Agreement"), between the Company and The First National Bank of Boston, as Rights Agent, (v) 1,129,032 shares of Company Common Stock were reserved for and subject to issuance upon conversion of the Subordinated Convertible Debentures of the Company (the "Company Convertible Debentures") at a conversion price of $31.00 per share and (vi) warrants to purchase 282,258 shares of Company Common Stock with an exercise price of $31.00 per share were outstanding (the "Company Warrants"). Except as set forth above, at the close of business on July 17, 2003, no shares of capital stock or other voting securities of the Company were issued, reserved for issuance or outstanding. There are no outstanding stock appreciation rights linked to the price of Company Common Stock and granted under any Company Stock Plan. Section 4.02(a) of the Company Disclosure Letter sets forth a true and complete list, as of the close of business on July 17, 2003, of all outstanding Company Stock Options, Company Convertible Debentures, Company Warrants and all other rights, if any (collectively, the "Company Derivative Securities"), to purchase or receive Company Common Stock issued or granted by the Company or any Company Subsidiary, the number of shares subject thereto, the grant dates and exercise prices thereof. All outstanding shares of Company Common Stock are, and all such shares that may be issued prior to the Effective Time will be when issued, duly authorized, validly issued, fully paid and nonassessable. Except as set forth above, there are not any bonds, debentures, notes or other indebtedness of the Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of Company Common 19 Stock may vote ("Voting Company Debt"). Except as set forth above and except for changes since July 17, 2003, resulting from the exercise or conversion of the Company Derivative Securities outstanding on such date or permitted to be issued pursuant to this Agreement, there are not any options, warrants, rights, convertible or exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts (as defined in Section 4.05(a)), arrangements or undertakings of any kind to which the Company or any Company Subsidiary is a party or by which any of them is bound (i) obligating the Company or any Company Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, the Company or of any Company Subsidiary or any Voting Company Debt or (ii) obligating the Company or any Company Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking. As of the date of this Agreement, there are not any outstanding contractual obligations of the Company or any Company Subsidiary to repurchase, redeem or otherwise acquire any shares of capital stock of the Company or any Company Subsidiary. No Company Subsidiary owns any shares of Company Common Stock. (b) Section 4.02(b) of the Company Disclosure Letter lists each subsidiary of the Company (the "Company Subsidiaries"). Each Company Subsidiary (other than Newco and the Continuing Licensee Subsidiary) is a corporation duly incorporated, validly existing and in good standing under the laws of the jurisdiction in which it is organized (in the case of good standing, to the extent such jurisdiction recognizes such concept) and has all corporate powers, governmental licenses and Consents required to carry on its business as now conducted, except for any such licenses and Consents the failure of which to have or obtain that, individually or in the aggregate, does not have a Transaction Material Adverse Effect. All of the outstanding capital stock of, or other voting securities or ownership interests in, each Company Subsidiary, is owned by the Company, directly or indirectly, free and clear of all pledges, claims, liens, charges, encumbrances, 20 mortgages, security interests and other adverse claims of any kind or nature whatsoever (collectively, "Liens") and free of any other limitation or restriction (including any restriction on the right to vote, sell or otherwise dispose of such stock or other securities or ownership interests). There are no outstanding (i) securities of the Company or any Company Subsidiary convertible into or exchangeable for shares of capital stock or other voting securities or ownership interests in any Company Subsidiary or (ii) options or other rights to acquire from the Company or any Company Subsidiary or other obligation of the Company or any Company Subsidiary to issue, any capital stock, voting securities or other ownership interests in, or any securities convertible into or exchangeable for, any capital stock, voting securities or ownership interests in, any Company Subsidiary (the items in clauses (i) and (ii) being referred to collectively as the "Subsidiary Securities"). There are no outstanding obligations of the Company or any Company Subsidiary to repurchase, redeem or otherwise acquire any Subsidiary Securities. SECTION 4.03. Newco. Since the date of its formation, Newco has not carried on any business or conducted any operation other than the execution of this Agreement, the other Transaction Agreements to which it is a party and the Commercial Agreements (as defined in Section 10.03) to which it is party, the performance of its obligations hereunder and thereunder and matters ancillary thereto. SECTION 4.04. Authority; Execution and Delivery; Enforceability. (a) Each of the Company and Newco has all requisite corporate or limited liability company power and authority, as applicable, to execute and deliver (i) each Transaction Agreement to which it is a party and to consummate the Transactions contemplated thereby and (ii) each Commercial Agreement to which it is a party and to perform its obligations thereunder. The execution and delivery by each of the Company and Newco of (A) each Transaction Agreement to which it is a party and the consummation by each of the Company and Newco of the Transactions contemplated thereby and (B) each Commercial Agreement to which it is a party, and the performance by each of the Company and Newco of its obligations thereunder, in each case have been duly authorized by all 21 necessary corporate action on the part of the Company and by all limited liability company action on the part of Newco, subject, in the case of the Merger, to receipt of the Company Stockholder Approval (as defined in Section 4.04(c)). Each of the Company and Newco has duly executed and delivered this Agreement, each other Transaction Agreement to which it is a party and each Commercial Agreement to which it is a party, and, assuming due execution and delivery hereof and thereof by each party hereto and thereto that is not an affiliate of the Company, this Agreement, each such Transaction Agreement and each such Commercial Agreement constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms. (b) The Board of Directors of the Company (the "Company Board"), at a meeting duly called and held, duly and unanimously adopted resolutions (i) approving this Agreement, each other Transaction Agreement, the Merger and the other Transactions, (ii) approving each Commercial Agreement and the performance by the Company of its obligations thereunder, (iii) determining that the terms of the Merger and the other Transactions are fair to and in the best interests of the Company and its stockholders, (iv) recommending that the Company's stockholders adopt this Agreement and (v) declaring that this Agreement is advisable. Assuming the accuracy of Parent's and Sub's representations and warranties in Section 5.08, such resolutions are sufficient to render inapplicable to this Agreement and the Merger the provisions of Section 203 of the DGCL, and to the Company's knowledge, no other state takeover statute or similar statute or regulation applies or purports to apply to the Company with respect to this Agreement or the Merger. The Company as the sole member of Newco, has approved (A) each other Transaction Agreement, the Merger and the other Transactions and (B) each Commercial Agreement to which Newco is a party and the performance by Newco of its obligations thereunder. The Company as the sole member of Newco will adopt this Agreement. (c) Assuming the accuracy of Parent's and Sub's representations and warranties in Section 5.08, the only vote of holders of any class or series of Company Capital Stock that is necessary to approve and adopt this Agreement 22 and the Merger is the adoption of this Agreement by the holders of a majority of the outstanding shares of Company Common Stock (the "Company Stockholder Approval"). The affirmative vote of the holders of Company Capital Stock, or any of them, is not necessary to consummate any Transaction other than the Merger. SECTION 4.05. No Conflicts; Consents. (a) The execution and delivery by each of the Company and Newco of this Agreement and the other Transaction Agreements to which it is a party and each Commercial Agreement to which it is a party do not, and the consummation of the Merger and the other Transactions and the performance by the Company or Newco of its obligations under the Commercial Agreements and compliance with the terms hereof and thereof will not, conflict with, or result in any violation of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancelation or acceleration of any obligation or to loss of a material benefit under, or result in the creation of any Lien upon any of the properties or assets of the Company or any Company Subsidiary under, any provision of (i) the Company Charter, the Company By-laws or the comparable charter, organizational or formation documents of any Company Subsidiary, (ii) any contract, lease, license, indenture, note, bond, agreement, permit, concession, franchise or other instrument (other than a Company Benefit Plan (as defined in Section 4.14(c))) (a "Contract") to which the Company or any Company Subsidiary is a party or by which any of their respective properties or assets is bound or (iii) subject to the filings and other matters referred to in Section 4.05(b), any judgment, order or decree ("Judgment") or statute, law, ordinance, rule or regulation whether foreign or domestic ("Law") applicable to the Company or any Company Subsidiary or their respective properties or assets, other than, in the case of clauses (ii) and (iii) above, any such items that, individually or in the aggregate, do not have a Transaction Material Adverse Effect and do not materially impair the ability of the Company or any Company Subsidiary to perform its obligations under this Agreement, any other Transaction Agreement or any Commercial Agreement or to consummate the Transactions. 23 (b) No consent, approval, license, permit, order or authorization ("Consent") of, or registration, declaration or filing with, or permit from, any domestic or foreign (whether national, Federal, state, provincial, local or otherwise) government or any court of competent jurisdiction, administrative agency or commission or other governmental authority or instrumentality, domestic or foreign (each, a "Governmental Entity"), is required to be obtained or made by the Company or any Company Subsidiary in connection with the execution, delivery and performance of this Agreement, any other Transaction Agreement or any Commercial Agreement by the Company or any Company Subsidiary or the consummation of the Transactions or the performance by the Company or any Company Subsidiary of its obligations under the Commercial Agreements, other than (i) compliance with and filings under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), (ii) the filing with the Securities and Exchange Commission (the "SEC") of (A) a proxy statement relating to the adoption of this Agreement by the Company's stockholders (as amended or supplemented from time to time, the "Proxy Statement"), (B) a registration statement on Form S-4 to be filed with the SEC by the Company in connection with the distribution of Newco Common Stock in the Merger (as amended or supplemented from time to time, the "Newco Form S-4"), (C) a registration statement on Form 8-A under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), in connection with the distribution of Newco Common Stock in the Merger (the "Newco Form 8-A") and (D) such reports under Sections 13 and 16 of the Exchange Act as may be required in connection with this Agreement, the other Transaction Agreements, the Merger and the other Transactions, (iii) the filing of the Certificate of Merger with the Secretary of State of the State of Delaware and appropriate documents with the relevant authorities of the other jurisdictions in which the Company is qualified to do business, (iv) such filings with and approvals of a national securities exchange or Nasdaq to permit the shares of Newco Common Stock that are to be distributed in the Merger to be approved for listing on such national securities exchange, or approved for quotation on Nasdaq, as the case may be, in either case subject to official notice of issuance, (v) compliance with and such filings as may be required under applicable Environmental Law (as defined in Section 10.03), (vi) such 24 filings as may be required in connection with Transfer Taxes, (vii) filings under any applicable state takeover Law and (viii) such other items (A) that may be required under the applicable Law of Switzerland, Germany or Italy, (B) required solely by reason of the participation of Parent (as opposed to any third party) in the Transactions or (C) that the failure of which to obtain or make, individually or in the aggregate, does not have a Transaction Material Adverse Effect and does not materially impair the ability of the Company or any Company Subsidiary to perform its obligations under this Agreement, any other Transaction Agreement or any Commercial Agreement or to consummate the Transactions. (c) Assuming the accuracy of Parent's and Sub's representations and warranties in Section 5.08, the Company and the Company Board have taken all action necessary to (i) render the Company Rights inapplicable to this Agreement, the Merger and the other Transactions and (ii) ensure that (A) neither Parent nor any of its affiliates or associates is or will become an "Acquiring Person" (as defined in the Company Rights Agreement) by reason of this Agreement, the Merger or any other Transaction), (B) a "Distribution Date" (as defined in the Company Rights Agreement) shall not occur by reason of this Agreement, the Merger or any other Transaction and (C) the Company Rights shall expire immediately prior to the Effective Time. SECTION 4.06. Intellectual Property. (a) The Company and the Company Subsidiaries own, jointly own, or have been licensed the right to use pursuant to licenses that remain in full force and effect, all Intellectual Property Rights (as defined in Section 10.03) that constitute Covered ECL Technology. (b) As of the Effective Time, assuming the due authorization, execution and delivery by each party thereto that is not an affiliate of the Company as of the Effective Time, the License Agreement (as defined in the Restructuring Agreement) will constitute Newco's legal, valid and binding obligation, enforceable against Newco in accordance with its terms. 25 (c) (i) The Company has all requisite corporate power and authority to enter into the License Agreement and to grant the license to the Continuing Licensee Subsidiary under the Covered ECL Technology pursuant to the License Agreement and to fully perform its obligations thereunder, and the grant of rights and licenses, and the performance of its obligations thereunder, will not conflict with the Company Charter or any Contract or other arrangement to which the Company is a party or by which it is bound, (ii) the Company has title to or license rights in the Covered ECL Technology sufficient to grant such license rights to the Continuing Licensee Subsidiary and its affiliates, (iii) the Company has not assigned, transferred, licensed or otherwise disposed of the Covered ECL Technology in any manner that limits or restricts the Continuing Licensee Subsidiary's or its affiliates' exploitation of the license granted by the Company thereunder and (iv) no Consent, notice or waiver, to or from any person (other than the Consent attached to the License Agreement), including from any Governmental Entity or third party holder of Intellectual Property Rights, is required to be obtained or made by the Company in connection with its execution and delivery, or by Newco in connection with its performance following the Effective Time, of the License Agreement, other than, in the case of each of clauses (i), (ii), (iii) and (iv) above, any such items that, individually or in the aggregate, do not have a Transaction Material Adverse Effect. For purposes of this Section 4.06(c), the Continuing Licensee Subsidiary shall be deemed not to be an affiliate or a subsidiary of the Company. (d) Neither the Company nor any Company Subsidiary has infringed, misappropriated or otherwise violated any Intellectual Property Right of any person, except for any such infringement, misappropriation or other conflict that individually or in the aggregate does not have a Transaction Material Adverse Effect. There is no action, suit, investigation or proceeding pending against or affecting, or, to the knowledge of the Company, threatened against, the Company or any Company Subsidiary or any of their present or former officers, directors and employees (i) challenging or seeking to deny or restrict, the rights of the Company or any Company Subsidiary in any of the Owned Intellectual Property Rights (as defined in 26 Section 10.03) and the Licensed Intellectual Property Rights (as defined in Section 10.03), (ii) alleging that the use of the Owned Intellectual Property Rights or any services provided, processes used or products manufactured, used, imported or sold by the Company or any Company Subsidiary do or may conflict with, or the Licensed Intellectual Property Rights misappropriate, infringe or otherwise violate any Intellectual Property Right of any third party or (iii) alleging that the Company or any Company Subsidiary in the provision of services, use of processes or manufacture of products has infringed, misappropriated or otherwise violated any Intellectual Property Right of any third party, except in the case of each of clauses (i), (ii) and (iii) above, for such actions, suits, investigations or proceedings the outcome of which individually or in the aggregate does not have a Transaction Material Adverse Effect. (e) The Company and the Company Subsidiaries hold all right, title and interest in and to all material Owned Intellectual Property Rights and all of the Company's and the Company Subsidiaries' licenses under material Licensed Intellectual Property Rights, free and clear of any Lien. In each case where a patent or patent application, trademark registration or trademark application, service mark registration or service mark application, or copyright registration or copyright application included in the Owned Intellectual Property is held by assignment, the assignment has been recorded with the Governmental Entity from which the patent or registration issued or before which the application or application for registration is pending, except in each case for failures to record that, individually or in the aggregate, do not have a Transaction Material Adverse Effect. Each of the Company and the Company Subsidiaries has taken all reasonable and necessary actions to maintain and protect its material Owned Intellectual Property Rights and its rights in the material Licensed Intellectual Property Rights. (f) To the knowledge of the Company, no person has infringed, misappropriated or otherwise violated any Owned Intellectual Property Right or Licensed Intellectual Property Right, except for any such infringement, misappropriation or other violation that individually or in 27 the aggregate does not have a Transaction Material Adverse Effect. The Company and the Company Subsidiaries have taken reasonable steps in accordance with customary industry practice to maintain the confidentiality of all material confidential Intellectual Property Rights of the Company or any Company Subsidiary that are material to the business and operations of the Company and the Company Subsidiaries, taken as a whole, and the value of which to the Company or any Company Subsidiary is contingent upon the confidentiality thereof, and to the knowledge of the Company, such confidential information has not been disclosed other than to employees, consultants, Representatives (as defined in Section 6.02(a)) and agents of the Company or any Company Subsidiary or other persons bound to the Company or a Company Subsidiary by a written obligation of confidentiality. (g) The Company has not delivered any of the notices contemplated by Section 3 or 4 of the Extension Agreement dated July 11, 2002, by and between the Company and Eisai Co., Ltd. SECTION 4.07. Brokers; Schedule of Fees and Expenses. No broker, investment banker, financial advisor or other person, other than as set forth in Section 4.07 of the Company Disclosure Letter, is entitled to any broker's, finder's, financial advisor's or other similar fee or commission in connection with the Merger and the other Transactions or the execution and delivery of the Commercial Agreements based upon arrangements made by or on behalf of the Company. SECTION 4.08. Opinion of Financial Advisor. The Company has received the opinion of Lehman Brothers Inc., 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 Company Common Stock. The Company will deliver a true and complete copy of such opinion to Parent promptly after receipt thereof. SECTION 4.09. SEC Filings. (a) The Company has made available to Parent (i) the Company's annual reports on Form 10-K for its fiscal years ended March 31, 2003, 2002 and 2001, as amended, (ii) its proxy statement relating to meetings of, or actions taken without a meeting 28 by, the stockholders of the Company held since March 31, 2000, and (iii) all of its other reports, forms, statements, schedules, registration statements and other documents (including exhibits and other information incorporated therein) filed with the SEC since March 31, 2001 (the documents referred to in this Section 4.09(a) being referred to collectively as the "Company SEC Filings"). (b) As of its respective filing date, each such Company SEC Filing filed pursuant to the Exchange Act did not 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 made therein, in the light of the circumstances under which they were made, not misleading. (c) Each such Company SEC Filing that is a registration statement, as amended or supplemented, if applicable, filed pursuant to the Securities Act of 1933, as amended (the "Securities Act"), as of the date such statement or amendment became effective, did not 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 made therein, in the light of the circumstances under which they were made, not misleading. (d) As of its filing date, each Company SEC Filing complied as to form in all material respects with the applicable requirements of the Securities Act or the Exchange Act, as the case may be. SECTION 4.10. Financial Statements. The audited consolidated financial statements (including the related notes) and unaudited consolidated interim financial statements (including the related notes) of the Company included in the Company SEC Filings comply as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") (except, in the case of unaudited statements, as permitted by Form 10-Q of the SEC) applied on a consistent basis during the periods involved (except as may be indicated in 29 the notes thereto) and fairly present the consolidated financial position of the Company and its consolidated subsidiaries as of the dates thereof and the consolidated results of their operations and cash flows for the periods shown (subject, in the case of unaudited statements, to normal year-end audit adjustments). SECTION 4.11. Disclosure Documents. (a) Each document required to be filed by the Company with the SEC or required to be distributed or otherwise disseminated to the Company's stockholders in connection with the Merger and the other Transactions, including the Proxy Statement and the Newco Form S-4, to be filed with the SEC in connection with the Merger and the other Transactions, and any amendments or supplements thereto, when filed, distributed or disseminated, as applicable, will comply as to form in all material respects with the applicable requirements of the Exchange Act. (b) (i) At the time the Proxy Statement or any amendment or supplement thereto is first mailed to stockholders of the Company, and at the time such stockholders vote on adoption of this Agreement, the Proxy Statement, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, and (ii) at the time the Newco Form S-4 or any amendment or supplement thereto becomes effective, the Newco S-4, as amended or supplemented, will not 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, in light of the circumstances under which they were made, not misleading, except that no representation or warranty is made by the Company in this Section 4.11(b) with respect to statements made or incorporated by reference therein based on information supplied by Parent or Sub specifically for inclusion or incorporation by reference in such documents. SECTION 4.12. Litigation. Except with respect to intellectual property, environmental matters and tax matters, which are the subject of Sections 4.06, 4.18 and 4.19, respectively, there is no action, suit or proceeding 30 or, to the knowledge of the Company, investigation, pending against, or to the knowledge of the Company, threatened against, the Company or any Company Subsidiary or any of their respective properties or any of their respective present or former officers or directors, in each case in their capacity as officers or directors of the Company or any Company Subsidiary, before any court or arbitrator or before or by any Governmental Entity which, individually or in the aggregate, has a Transaction Material Adverse Effect. SECTION 4.13. Absence of Certain Changes. (a) From March 31, 2003 until the date of this Agreement the business of the Company and the Company Subsidiaries has been conducted in the ordinary course consistent with past practice. (b) Since March 31, 2003, there has not been (i) any event, occurrence or development or state of circumstances or facts which, individually or in the aggregate, has had or has a Transaction Material Adverse Effect or (ii) any labor dispute, other than routine individual grievances, or any activity or proceeding by a labor union or representative thereof to organize any employees of the Company or any Company Subsidiary, which employees were not subject to a collective bargaining agreement at March 31, 2002, or any lockouts, strikes, slowdowns, work stoppages or threats thereof by or with respect to such employees. (c) From March 31, 2003 until the date of this Agreement, there has not been (i) (A) any declaration, setting aside or payment of any dividend or other distribution with respect to any shares of capital stock of the Company or any Company Subsidiary other than dividends and distributions by a direct or indirect wholly owned subsidiary of the Company to its parent or (B) any repurchase, redemption or other acquisition by the Company or any Company Subsidiary of any outstanding shares of capital stock or other securities of the Company or any Company Subsidiary other than (x) the issuance of Company Common Stock upon (1) the exercise of Company Stock Options outstanding as of the date of 31 this Agreement and in accordance with the terms thereof in effect as of the date of this Agreement, (2) the conversion of Company Convertible Debentures outstanding as of the date of this Agreement and in accordance with the terms thereof in effect as of the date of this Agreement and (3) the exercise of Company Warrants outstanding as of the date of this Agreement and in accordance with the terms thereof in effect as of the date of this Agreement and (y) pursuant to the Company Stock Plans as in effect on the date of this Agreement; (ii) any amendment of any material term of any outstanding security of the Company or any Company Subsidiary; (iii) any incurrence, assumption or guarantee by the Company or any Company Subsidiary of any indebtedness for borrowed money in an aggregate principal amount in excess of $10,000,000; (iv) any change in any method of accounting or accounting principles or practices materially affecting the reported consolidated assets, liabilities or results of operations of the Company or any Company Subsidiary, except for any such change required by a change in GAAP or applicable Law; (v) any material Tax election made or changed, any annual Tax accounting period changed, any method of Tax accounting adopted or changed, any material amended Tax Returns (as defined in Section 4.19(f)) or claims for material Tax refunds filed, any material closing agreement entered into, any material Tax claim, audit or assessment settled, or any right to claim a material Tax refund, offset or other reduction in Liability (as defined in Section 10.03) for Taxes surrendered, in each case by the Company or any Company Subsidiary; (vi) any creation or other incurrence by the Company or any Company Subsidiary of any Lien on any material asset other than in the ordinary course consistent with past practice; 32 (vii) any making of any loan, advance or capital contributions to, or investment in, any person other than (A) loans, advances or capital contributions to, or investments in, its wholly-owned subsidiaries, (B) the extension of trade credit in the ordinary course consistent with past practice or (C) investments in any person in the ordinary course pursuant to the Company's investment policy approved by the Company Board as in effect on the date of this Agreement, a copy of which policy is set forth in Section 4.13(c) of the Company Disclosure Letter; (viii) any damage, destruction or other casualty loss (whether or not covered by insurance) affecting the business or assets of the Company or any Company Subsidiary that is material to the Company and the Company Subsidiaries, taken as a whole; (ix) any sale, lease, license or other disposition of any Owned Intellectual Property Right other than sales, leases, licenses or other dispositions that have not had a Transaction Material Adverse Effect; or (x) any (A) entry into or amendment of any severance or termination arrangement or any employment, deferred compensation or similar agreement with any director or officer of the Company or any Company Subsidiary or (B) establishment, adoption or amendment (except as required by applicable Law) of any collective bargaining or material bonus, profit-sharing, thrift, pension, retirement, deferred compensation, compensation, stock option, restricted stock or other benefit plan or arrangement covering any director, officer or employee of the Company or any Company Subsidiary. SECTION 4.14. Employee Matters Generally; Company Benefit Plans. (a) None of the Company, any Company Subsidiary and any of its ERISA Affiliates (as defined below) sponsors, maintains, contributes to or is required to contribute to any employee plan subject to Title IV of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or Section 412 of the Code, and none of the Company, any Company Subsidiary and any of its 33 ERISA Affiliates has in the past maintained, contributed to or been required to contribute to any employee plan subject to Title IV of ERISA or Section 412 of the Code. For purposes of this Section, "ERISA Affiliate" of any entity means any other entity that, together with such entity, would be treated as a single employer under Section 414 of the Code. (b) None of the Company, any Company Subsidiary, any of the Company's ERISA Affiliates and any predecessor thereof contributes to, or has in the past contributed to, any multiemployer plan, as defined in Section 3(37) of ERISA. (c) "Company Benefit Plan" means any agreement, plan, program, policy or other arrangement, in each case, covering one or more current or former employees or directors of, or current or former independent contractors with respect to, the Company or any Company Subsidiary. SECTION 4.15. No Undisclosed Material Liabilities. Except with respect to environmental matters and tax matters, which are the subject of Sections 4.18 and 4.19, respectively, there are no Liabilities of the Company or any Company Subsidiary other than Liabilities that do not have, individually or in the aggregate, a Transaction Material Adverse Effect. SECTION 4.16. Transactions with Related Persons. (a) Section 4.16(a) of the Company Disclosure Letter sets forth a list of all Contracts, promises, commitments and understandings in effect as of the date of this Agreement with Related Persons and not required to be disclosed in the Company SEC Filings pursuant to Item 404 of Regulation S-K and, with respect to any such oral Contract, promise, commitment or understanding, a true and complete description thereof. Since March 31, 2003, neither the Company nor any Company Subsidiary has (i) purchased, leased or otherwise acquired any material property or assets or obtained any material services from, (ii) sold, leased or otherwise disposed of any material property or assets or provided any material services to (except with respect to remuneration for services rendered in the ordinary course as director, officer or employee of the Company or any Company Subsidiary), (iii) entered into or 34 modified in any manner any Contract, promise, commitment or understanding with or (iv) borrowed any money from, or made or forgiven any loan or other advance to, any officer, director or affiliate of the Company or any Company Subsidiary or any person who has a family relationship (as defined in Item 401(d) of Regulation S-K) with any officer, director or affiliate of the Company or any Company Subsidiary (collectively, "Related Persons"). Prior to the date of this Agreement, the Company has made available to Parent or its Representatives true and complete copies of each written Contract, promise, commitment and understanding between the Company or any Company Subsidiary, on the one hand, and any Related Person, on the other. (b) Neither the Company nor any Company Subsidiary has any Contracts, promises, commitments or understandings that include any material obligation or commitment between the Company or any Company Subsidiary and any Related Person. (c) The assets of the Company or any Company Subsidiary do not include any receivable or other obligation or commitment from a Related Person to the Company or any of Company Subsidiary. (d) The Liabilities of the Company and the Company Subsidiaries do not include any payable or other obligation or commitment from the Company or any Company Subsidiary to any Related Person. (e) Prior to the date of this Agreement, the Company has made available to Parent or its Representatives true and complete copies of each Contract, promise, commitment and understanding between the Company, any Company Subsidiary or any of their respective affiliates, on the one hand, and MSD, MST, JW, JW Consulting (each of JW and JW Consulting, as defined in Section 10.03), Hyperion Catalysis International, a California corporation ("Hyperion"), Wellstat Biologics Corporation, a Delaware corporation ("Wellstat Biologics"), Wellstat Therapeutics Corporation, a California corporation ("Wellstat Therapeutics"), Proteinix Corporation, a Delaware corporation ("Proteinix"), and Integrated Chemical Synthesizers, Inc., a Delaware corporation ("ICS"), or any 35 of their respective affiliates, on the other hand (or, with respect to any such oral Contract, promise, commitment or understanding, a true and complete description thereof). (f) For purposes of the definition of "Related Person", each of JW, JW Consulting, Hyperion, Wellstat Biologics, Wellstat Therapeutics, Proteinix and ICS shall be deemed to be an affiliate of the Company. SECTION 4.17. Compliance with Law and Judgments. Except with respect to intellectual property, environmental matters and tax matters, which are the subject of Sections 4.06, 4.18 and 4.19, respectively, from March 31, 2001, (a) each of the Company and the Company Subsidiaries has been in compliance with all applicable Law and Judgments, except for instances of possible noncompliance that, individually or in the aggregate, does not have a Transaction Material Adverse Effect and (b) to the knowledge of the Company, the Company is not under investigation with respect to and has not been threatened to be charged with or been given written notice of any violation of, any applicable Law or Judgment, except in each case for such investigations, charges or notices that individually or in the aggregate do not have a Transaction Material Adverse Effect. SECTION 4.18. Environmental Matters. With such exceptions as do not have, individually or in the aggregate, a Transaction Material Adverse Effect: (a) No written notice, demand, request for information, citation, summons or order has been received, no penalty has been assessed, and no investigation, action, claim, suit or proceeding is pending or, to the knowledge of the Company, is threatened by any Governmental Entity or other person pursuant to or arising out of any Environmental Law; and (b) there are no Liabilities of the Company or any Company Subsidiary arising under or pursuant to any Environmental Law and arising from actions occurring or conditions existing on or prior to the Effective Time. SECTION 4.19. Tax Matters. (a) All material Tax Returns required by applicable Law to be filed with any Taxing Authority by, or on behalf of, the Company or any 36 Company Subsidiary have been filed when due in accordance with applicable Law, and all such material Tax Returns are, or will be at the time of filing, true and complete in all material respects. (b) The Company and each Company Subsidiary has paid (or has had paid on its behalf) or has withheld and remitted to the appropriate Taxing Authority all Taxes due and payable, or, where payment is not yet due, has established (or has had established on its behalf and for its sole benefit and recourse) in accordance with GAAP an accrual for all material Taxes through the end of the most recent taxable period ending prior to the date of this Agreement. (c) The income and franchise Tax Returns of the Company and the Company Subsidiaries through the Tax year ended December 31, 1998 have been examined and closed or are Tax Returns with respect to which the applicable period for assessment under applicable Law, after giving effect to extensions or waivers, has expired. (d) The Company and each Company Subsidiary have withheld all material amounts required to have been withheld by them in connection with amounts paid or owed to any employee, independent contractor, creditor, shareholder or any other third party; such withheld amounts were either duly paid to the appropriate Taxing Authority or set aside in accounts for such purpose. The Company and each Company Subsidiary have reported such withheld amounts to the appropriate Taxing Authority and to each such employee, independent contractor, creditor, shareholder or any other third party, as required under any Law. (e) As of the date of this Agreement, there is no material audit, action, suit, investigation or proceeding now pending or, to the knowledge of the Company, threatened in writing against or with respect to Company or the Company Subsidiaries in respect of any Tax. (f) The following terms shall have the meanings set forth below: "Taxes" means (i) all forms of taxation or duties imposed, or required to be collected or withheld, including charges, together with any related interest, penalties or 37 other additional amounts, (ii) Liability for the payment of any amount of the type described in the preceding clause (i) as a result of being a member of an affiliated, consolidated, combined or unitary group or (iii) Liability for the payment of any amounts as a result of being party to any Tax sharing agreement (other than this Agreement or any other Transaction Agreement) or as a result of any express or implied obligation to indemnify any other person with respect to the payment of any amount described in the immediately preceding clauses (i) or (ii) (other than an obligation to indemnify under the Tax Allocation Agreement). "Taxing Authority" means the United States Internal Revenue Service and any other national, Federal, state, provincial, local, or other Governmental Entity, whether domestic or foreign, responsible for the administration of Taxes. "Tax Return" means any return, filing, report, questionnaire, information statement or other document required to be filed, including amended returns that may be filed, for any taxable period with any Taxing Authority (whether or not a payment is required to be made with respect to such filing). SECTION 4.20. Newco Solvency. Immediately following the Effective Time, and after giving effect to the Restructuring and the other Transactions and the execution and delivery of the Commercial Agreements, Newco will not be Insolvent. SECTION 4.21. Limitation. NOTWITHSTANDING ANY PROVISION IN THIS AGREEMENT TO THE CONTRARY, (A) NO REPRESENTATION OR WARRANTY IS MADE BY THE COMPANY WITH RESPECT TO (I) PARENT OR ANY OF ITS AFFILIATES OR THEIR RESPECTIVE BUSINESSES, PROPERTIES (INCLUDING ANY OR ALL PATENTS, PATENT RIGHTS, TRADEMARKS, TRADEMARK RIGHTS, TRADE NAMES, TRADE NAME RIGHTS, SERVICE MARKS, SERVICE MARK RIGHTS AND OTHER INTELLECTUAL PROPERTY OWNED BY PARENT OR ANY OF ITS AFFILIATES), ASSETS OR OPERATIONS, (II) ANY BUSINESS RELATIONSHIP BETWEEN THE COMPANY OR ANY OF ITS AFFILIATES, ON THE ONE HAND, AND PARENT OR ANY OF ITS AFFILIATES, ON THE OTHER HAND, OR (III) ANY ACTION, SUIT, PROCEEDING OR CONTRACT TO WHICH PARENT OR ANY OF ITS 38 AFFILIATES IS A PARTY (INCLUDING THE LICENSE LITIGATION, THE NEW PATENT LITIGATION, ANY SUCH CONTRACTS TO WHICH THE COMPANY OR ANY COMPANY SUBSIDIARY IS OR WAS A PARTY AND IN PARTICULAR THE 1992 LICENSE AGREEMENT AND THE ONGOING LITIGATION AGREEMENT), AND (B) NO FACT, EVENT, CHANGE, EFFECT OR DEVELOPMENT RELATING TO ANY OF THE FOREGOING SHALL BE DEEMED TO RESULT IN THE BREACH BY THE COMPANY OF ANY REPRESENTATION, WARRANTY, COVENANT OR AGREEMENT IN THIS AGREEMENT OR OTHERWISE IN A TRANSACTION MATERIAL ADVERSE EFFECT; PROVIDED, HOWEVER, THAT THIS SECTION 4.21 SHALL IN NO WAY MODIFY THE REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND NEWCO IN SECTION 4.06. ARTICLE V Representations and Warranties of Parent and Sub Parent and Sub, jointly and severally, represent and warrant to the Company as follows: SECTION 5.01. Organization, Standing and Power. Each of Parent and Sub is duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is organized (in the case of good standing, to the extent such jurisdiction recognizes such concept) and has all corporate powers, governmental licenses and Consents required to carry on its business as now conducted, except for any such licenses and Consents the failure of which to have or obtain that, individually or in the aggregate, does not have a Parent Material Adverse Effect (as defined in Section 10.03). Parent has made available to the Company true and complete copies of the articles of incorporation and other organizational documents, in each case as amended to the date of this Agreement, for each of Parent and Sub. Bearer shares and non-voting equity securities of Parent are listed on the SWX Swiss Exchange. SECTION 5.02. Sub. (a) Since the date of its incorporation, Sub has not carried on any business or conducted any operations ---- other than the execution of this Agreement, the performance of its obligations hereunder and matters ancillary thereto. (b) The authorized capital stock of Sub consists of 1,000 shares of common stock, par value $0.001 per 39 share, all of which have been validly issued, are fully paid and nonassessable and are owned by Parent free and clear of any Lien. SECTION 5.03. Authority; Execution and Delivery; Enforceability. Each R Party (as defined in Section 10.03) has all requisite power and authority to execute and deliver (a) each Transaction Agreement to which it is a party and to consummate the Transactions contemplated thereby and (b) each Commercial Agreement to which it is a party and to perform its obligations thereunder. The execution and delivery by each R Party of (i) each Transaction Agreement to which it is a party and the consummation by it of the Transactions contemplated thereby and (ii) each Commercial Agreement to which it is a party, and the performance by each R Party of its obligations thereunder, in each case have been duly authorized by all necessary action on the part of such R Party. Parent, as sole stockholder of Sub, will adopt this Agreement. Each of Parent and Sub has duly executed and delivered this Agreement and each other Transaction Agreement to which it is a party, and, assuming due execution and delivery hereof and thereof by each party hereto and thereto that is not an affiliate of Parent, this Agreement and each such Transaction Agreement constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms. Each R Party has duly executed and delivered each Transaction Agreement to which it is a party and each Commercial Agreement to which it is a party, and, assuming the due authorization, execution and delivery thereof by each party thereto that is not an affiliate of Parent, each Transaction Agreement and each Commercial Agreement constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms. SECTION 5.04. No Conflicts; Consents. (a) The execution and delivery by each R Party of this Agreement and the other Transaction Agreements to which it is a party and each Commercial Agreement to which it is a party, do not, and the consummation of the Merger and the other Transactions and the performance by such R Party of its obligations under the Commercial Agreements and compliance with the terms hereof and thereof will not, conflict with, or result in any violation of or default (with or without 40 notice or lapse of time, or both) under, or give rise to a right of termination, cancelation or acceleration of any obligation or to loss of a material benefit under, or result in the creation of any Lien upon any of the properties or assets of any R Party under, any provision of (i) the articles of incorporation or other organizational documents of any R Party, (ii) any Contract to which any R Party or any of its affiliates is a party or by which any of their respective properties or assets is bound or (iii) subject to the filings and other matters referred to in Section 5.04(b), any Judgment or Law applicable to any R Party or any of their respective properties or assets, other than, in the case of clauses (ii) and (iii) above, any such items that, individually or in the aggregate, do not have a Parent Material Adverse Effect and do not materially impair the ability of any R Party to perform its obligations under this Agreement, any other Transaction Agreement or any Commercial Agreement or to consummate the Transactions. (b) No Consent of, or registration, declaration or filing with, or permit from, any Governmental Entity is required to be obtained or made by any R Party in connection with the execution, delivery and performance of this Agreement, any other Transaction Agreement or Commercial Agreement by any R Party or the consummation of the Transactions or the performance by any R Party under the Commercial Agreements, other than (i) compliance with and filings under the HSR Act, (ii) the filing with the SEC of such reports under Sections 13 and 16 of the Exchange Act, as may be required in connection with this Agreement, the other Transaction Agreements, the Merger and the other Transactions, (iii) the filing of the Certificate of Merger with the Secretary of State of the State of Delaware, (iv) compliance with and such filings as may be required under applicable Environmental Law, (v) such filings as may be required in connection with Transfer Taxes, (vi) filings under any applicable state takeover Law and (vii) such other items (A) required solely by reason of the participation of the Company (as opposed to any third party) in the Transactions or (B) that the failure of which to obtain or make, individually or in the aggregate, does not have a Parent Material Adverse Effect and does not materially impair the ability of any R Party to perform its obligations under this Agreement, any other Transaction 41 Agreement or any Commercial Agreement or to consummate the Transactions. SECTION 5.05. Brokers. No broker, investment banker, financial advisor or other person is entitled to any broker's, finder's, financial advisor's or other similar fee or commission in connection with the Merger and the other Transactions or the execution and delivery of the Commercial Agreements based upon arrangements made by or on behalf of Parent or any of its affiliates. SECTION 5.06. Financing. At the Effective Time, Parent and Sub will have available all of the funds necessary for the acquisition of all shares of Company Common Stock pursuant to the Merger and to perform their respective obligations under this Agreement and the other Transaction Agreements. SECTION 5.07. Financial Statements. The audited consolidated financial statements (including the related notes) of Parent for the year ended December 31, 2002, have been prepared in accordance with international accounting standards applied on a consistent basis during the period involved (except as may be indicated in the notes thereto) and fairly present the consolidated financial position of Parent and its consolidated subsidiaries as of the date thereof and the consolidated results of their operations and cash flows for the period shown. SECTION 5.08. Stock Ownership; Interested Stockholders. Neither Parent nor Sub beneficially owns any Company Common Stock and neither Parent nor Sub is, or at any time during the three years preceding the date of this Agreement has been, an "interested stockholder" of the Company, as such term is defined in Section 203(c)(5) of the DGCL. ARTICLE VI Covenants Relating to Conduct of Business SECTION 6.01. Conduct of Business. (a) Conduct of Business by the Company. Except for matters set forth in the Company Disclosure Letter or otherwise expressly contemplated by this Agreement, any other Transaction Agreement or any of the Commercial Agreements, from the 42 date of this Agreement to the Effective Time the Company shall, and shall cause each Company Subsidiary to, conduct its business in the usual, regular and ordinary course consistent with past practice and, to the extent consistent therewith, shall use their reasonable best efforts to preserve intact their business organizations and relationships with third parties. In addition, and without limiting the generality of the foregoing, except for matters set forth in the Company Disclosure Letter or otherwise expressly contemplated by this Agreement, any other Transaction Agreement or any of the Commercial Agreements, from the date of this Agreement to the Effective Time, the Company shall not, and shall not permit any Company Subsidiary to, do any of the following without the prior written consent of Parent: (i) (A) declare, set aside or pay any dividends on, or make any other distributions in respect of, its capital stock, other than dividends and distributions by a direct or indirect wholly owned subsidiary of the Company to its parent, (B) split, combine or reclassify any of its capital 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 (C) purchase, redeem or otherwise acquire any shares of capital stock of the Company or any Company Subsidiary or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities other than (1) the issuance of Company Common Stock (and associated Company Rights) upon (x) the exercise of Company Stock Options outstanding as of the date of this Agreement and in accordance with the terms thereof in effect as of the date of this Agreement, (y) the conversion of Company Convertible Debentures outstanding as of the date of this Agreement and in accordance with the terms thereof in effect as of the date of this Agreement and (z) the exercise of Company Warrants outstanding as of the date of this Agreement and in accordance with the terms thereof in effect as of the date of this Agreement, (2) the issuance of Company Capital Stock upon the exercise of Company Rights and (3) pursuant to the Company Stock Plans as in effect on the date of this Agreement; 43 (ii) issue, deliver, sell or grant (A) any shares of its capital stock, (B) any Voting Company Debt or other voting securities, (C) any securities convertible into or exchangeable for, or any options, warrants or rights to acquire, any such shares, Voting Company Debt, voting securities or convertible or exchangeable securities or (D) any "phantom" stock, "phantom" stock rights, stock appreciation rights or stock-based performance units, in each case other than (1) the issuance of Company Common Stock (and associated Company Rights) upon (x) the exercise of Company Stock Options outstanding as of the date of this Agreement and in accordance with the terms thereof in effect as of the date of this Agreement, (y) the conversion of Company Convertible Debentures outstanding as of the date of this Agreement and in accordance with the terms thereof in effect as of the date of this Agreement and (z) the exercise of Company Warrants outstanding as of the date of this Agreement and in accordance with the terms thereof in effect as of the date of this Agreement, and (2) the issuance of Company Capital Stock upon the exercise of Company Rights; (iii) amend or propose any amendment to its certificate of incorporation, by-laws or other comparable charter or organizational documents (other than amendments or proposals to the certificate of incorporation, bylaws or other comparable charter or organizational documents of Newco, any Company Subsidiary that is contemplated to become a subsidiary of Newco pursuant to the Restructuring or any other subsidiary of Newco that do not materially impair the ability of Newco, any Company Subsidiary that is contemplated to become a subsidiary of Newco pursuant to the Restructuring or any other subsidiaries of Newco to perform its obligations under this Agreement, any other Transaction Agreement or any Commercial Agreement or consummate the Transactions or perform their obligations under any Commercial Agreement); (iv) make any change in accounting methods, principles or practices materially affecting the reported consolidated assets, liabilities or results of operations of the Company or any Company 44 Subsidiary, except for any such change required by GAAP or applicable Law; (v) make or change any material Tax election; change any annual Tax accounting period; file any material amended Tax Returns or claims for material Tax refunds; enter into any material closing agreement; settle any material Tax claim, audit or assessment; or surrender any right to claim a material Tax refund, offset or other reduction in Liabilities for Taxes; (vi) amend any material term of any outstanding security of the Company or any Company Subsidiary; (vii) merge or consolidate with any other person or acquire a material amount of stock or assets of any unrelated third person, in each case other than (A) one or more acquisitions of stock or assets (including inventory and fixed assets) of any unrelated third person by any Newco Company (as defined in the Restructuring Agreement) involving the expenditure in the aggregate of no greater than $20,000,000 (or its equivalent in any other currency) minus the amount of any loan, advance or capital contribution to, or investment in, any unrelated third person made pursuant to Section 6.01(a)(xi)(F) or (B) any acquisition of inventory or fixed assets in the ordinary course consistent with past practice; (viii) sell, lease, license or otherwise dispose of any material subsidiary or any assets or property, including any Intellectual Property Right, except in each case for such sales, leases, licenses or other dispositions to an unrelated third person that do not have a Transaction Material Adverse Effect; (ix) incur, assume or guarantee any indebtedness for borrowed money in an aggregate principal amount in excess of $10,000,000 (or its equivalent in any other currency), whether pursuant to one or more transactions, other than any guarantee by 45 the Company or any Company Subsidiary pursuant to any agreement in effect as of the date of this Agreement; (x) create or incur any Lien on any material asset of the Company and the Company Subsidiaries, taken as a whole, other than in the ordinary course consistent with past practice; (xi) make any loan, advance or capital contributions to, or investment in, any person other than (A) to the extent permitted by Section 6.01(a)(ix), (B) loans, advances or capital contributions to, or investments in, its wholly-owned subsidiaries, (C) the extension of trade credit in the ordinary course consistent with past practice, (D) investments in any person in the ordinary course pursuant to the Company's investment policy approved by the Company Board as in effect as of the date of this Agreement, a copy of which policy is set forth in Section 4.13(c) of the Company Disclosure Letter, (E) loans, advances or capital contributions to, or investments in, any person as described in, or pursuant to any agreement listed in Section 6.01(a)(xi)(E) of the Company Disclosure Letter or (F) loans, advances or capital contributions to, or investments in, any unrelated third person that are not otherwise permitted by clauses (A) through (E) of this Section 6.01(a)(xi) and involve the expenditure in the aggregate of no greater than $20,000,000 minus the amount of any expenditure made pursuant to Section 6.01(a)(vii)(A); (xii) any establishment, adoption or amendment (except as required by applicable Law) of any collective bargaining or material bonus, profit-sharing, thrift, pension, retirement, deferred compensation, compensation, stock option, restricted stock or other benefit plan covering any director, officer or employee of the Company or any Company Subsidiary (other than Newco, any Company Subsidiary that is contemplated to become a subsidiary of Newco pursuant to the Restructuring or any other subsidiaries of Newco); for the avoidance of doubt this clause (xii) shall not be construed to prohibit any award or payment of any bonus or other 46 compensation to any director, officer or other employee on an individual basis in a manner consistent with past practice; or (xiii) authorize any of, or commit or agree to take any of, the foregoing actions; provided, however, that prior to the Effective Time, Newco may authorize, or commit or agree to take, any such action after the Effective Time. (b) Consent. Notwithstanding the second sentence of Section 6.01(a), Parent shall not unreasonably withhold, condition or delay its consent with respect to any request by the Company with respect to any action prohibited by Section 6.01(a)(iv), 6.01(a)(v), 6.01(a)(x), 6.01(a)(xi), 6.01(a)(xii) or 6.01(a)(xiii)(solely to the extent relating to actions described in Section 6.01(a)(iv), 6.01(a)(v), 6.01(a)(x), 6.01(a)(xi) or 6.01(a)(xii)). (c) Actions by Parent and the Company. (i) Parent shall not, and shall not permit any of its affiliates to, take any action that would, or that is reasonably likely to, result in any condition to the Merger set forth in Article VIII, not being satisfied. (ii) The Company shall not, and shall not permit any of its affiliates to, take any action that would, or that is reasonably likely to, result in any condition to the Merger set forth in Article VIII, not being satisfied. SECTION 6.02. No Solicitation. (a) The Company shall not, nor shall it authorize or permit any Company Subsidiary to, nor shall it authorize or permit any officer, director or employee of, or any investment banker, attorney or other advisor or representative (collectively, "Representatives") of, the Company or any Company Subsidiary to, (i) directly or indirectly solicit, initiate or encourage the submission of any Company Takeover Proposal (as defined in Section 6.02(h)), (ii) enter into any agreement with respect to any Company Takeover Proposal (except a confidentiality agreement in accordance with this Section 6.02(a)), (iii) grant any waiver or release under any standstill or similar agreement with respect to any 47 class of equity securities of the Company or any Company Subsidiary or (iv) directly or indirectly (A) participate in any discussions or negotiations with, or furnish any information with respect to, the Company or any Company Subsidiary to any person that is seeking to make, or has made, any proposal that constitutes a Company Takeover Proposal or (B) afford access to the business, properties, assets, books or records of the Company or any Company Subsidiary to, otherwise cooperate in any way with, or knowingly assist, participate in, facilitate or encourage any effort by any person that is seeking to make, or has made, any proposal that constitutes a Company Takeover Proposal; provided, however, that prior to obtaining the Company Stockholder Approval the Company and its Representatives may, in response to a Company Takeover Proposal that was not solicited by the Company and that did not otherwise result from a breach of this Section 6.02(a), and subject to compliance with Sections 6.02(c) and 6.02(d), (x) furnish information with respect to the Company and the Company Subsidiaries to the person making such Company Takeover Proposal and its Representatives pursuant to a customary confidentiality agreement with terms not materially less favorable to the Company and not materially less restrictive to the person making such Company Takeover Proposal than those contained in the Confidentiality Agreement (as defined in Section 7.02) and Section 7.12 of this Agreement (a copy of which shall be provided to Parent for informational purposes only) and (y) participate in discussions or negotiations (including solicitation of a revised Company Takeover Proposal) with such person and its Representatives regarding such Company Takeover Proposal, if and only if, in the case of each of (x) and (y) above, the Company Board determines in good faith, after receipt of the advice of its financial advisor and outside legal counsel, that such Company Takeover Proposal is reasonably likely to result in a Superior Company Proposal (as defined in Section 6.02(h)). (b) Neither the Company Board nor any committee thereof shall (i) withdraw or modify in a manner adverse to Parent or Sub, or propose publicly to withdraw or modify in a manner adverse to Parent or Sub, the approval or recommendation by the Company Board or any such committee of this Agreement or the Merger, in each case unless the Company Board determines in good faith, after consultation 48 with outside counsel, that it is necessary to do so in order to comply with its fiduciary duties under applicable Law, (ii) approve any letter of intent, agreement in principle, acquisition agreement or similar agreement relating to any Company Takeover Proposal or (iii) approve or recommend, or propose publicly to approve or recommend, any Company Takeover Proposal. (c) In addition to the obligations of the Company set forth in Section 9.05(b)(iii), the Company shall promptly (and in no event later than 1 business day after receipt of the relevant proposal or inquiry) advise Parent orally and in writing of any Company Takeover Proposal or any inquiry from a third party to an officer or director of the Company with respect to the making of a Company Takeover Proposal, the identity of the person making any such Company Takeover Proposal or inquiry and the material terms of any such Company Takeover Proposal or inquiry. The Company shall keep Parent promptly informed of the status (including any change to the material terms) of any such Company Takeover Proposal. (d) Nothing contained in this Section 6.02 shall prohibit the Company from taking and disclosing to its stockholders a position contemplated by Rule 14e-2(a) promulgated under the Exchange Act or from making any disclosure to the Company's stockholders if, in the good faith judgment of the Company Board, after consultation with outside counsel, failure so to disclose would be inconsistent with its obligations under applicable Law. (e) Notwithstanding clauses (a) and (b) of this Section 6.02, if, prior to obtaining the Company Stockholder Approval, the Company Board receives a Superior Company Proposal, then the Company Board may, in accordance with Section 9.05(b) (including the notice provisions therein), approve and recommend such Superior Company Proposal and cause the Company to terminate this Agreement and concurrently enter into a definitive agreement providing for implementation of such Superior Company Proposal. (f) The Company (i) shall, and shall cause the Company Subsidiaries to, and shall instruct its Representatives to, cease immediately and cause to be 49 terminated all activities, discussions or negotiations, if any, with any persons conducted prior to the date of this Agreement with respect to any Company Takeover Proposal and (ii) shall promptly request each person, if any, that has executed a confidentiality agreement within the 12 months prior to the date of this Agreement in connection with such person's consideration of any Company Takeover Proposal to return or destroy all confidential information heretofore furnished to such person by or on behalf of the Company or any Company Subsidiary. (g) The Company shall promptly inform the Company Subsidiaries and its Representatives of the obligations undertaken in this Section 6.02. (h) For purposes of the Transaction Agreements: "Company Takeover Proposal" means (i) any proposal or offer for a merger, consolidation, dissolution, recapitalization or other business combination involving the Company, (ii) any proposal or offer to acquire in any manner, directly or indirectly, over 20% of the equity securities or consolidated total assets of the Company or (iii) any other transaction the consummation of which would reasonably be expected to impede, prevent or materially delay the Merger, in each case other than (A) the Transactions, (B) the performance of obligations pursuant to the Commercial Agreements or (C) any transaction involving Newco or its subsidiaries that will be consummated after the Effective Time. "Superior Company Proposal" means any bona fide, unsolicited written proposal made by a third party to acquire, directly or indirectly, including pursuant to a tender or exchange offer, a merger, a consolidation, a liquidation or dissolution, a recapitalization or similar transaction, more than 50% of the combined voting power of the shares of Company Common Stock then outstanding or all or substantially all of the assets of the Company and the Company Subsidiaries, taken as a whole, on terms which the Company Board determines in good faith to be more favorable to the holders of Company Common Stock than the Transactions 50 (after consultation with a financial advisor of nationally recognized reputation), taking into account all the terms and conditions of such proposal, including any break-up fees, expense reimbursement provisions and conditions to consummation, and this Agreement (including any proposal by Parent to amend the terms of the Transactions), and for which financing, to the extent required, is then fully committed or reasonably determined to be available by the Company Board. ARTICLE VII Additional Agreements SECTION 7.01. Preparation of the Proxy Statement, the Newco Form S-4 and the Newco Form 8-A; Company Stockholders Meeting. (a) As soon as practicable following the date of this Agreement, the Company shall (i) prepare the Proxy Statement, the Newco Form S-4 and the Newco Form 8-A and (ii) file the Proxy Statement, the Newco Form S-4 and the Newco Form 8-A with the SEC. The Proxy Statement will be included as a prospectus in the Newco Form S-4. Each of the Company and Parent shall use its reasonable best efforts to have the Newco Form S-4 declared effective under the Securities Act as promptly as practicable after such filing. Each of the Company and Parent shall use its reasonable best efforts to cause the Proxy Statement to be mailed to the Company's stockholders as promptly as practicable after the Newco Form S-4 is declared effective under the Securities Act. Each of Parent and the Company shall also take any action (other than qualifying to do business in any jurisdiction in which is not now so qualified or to file a general consent to service of process) required to be taken under any applicable state securities laws in connection with the issuance and distribution of Newco Common Stock in the Merger. Parent shall furnish all information concerning Parent, the Transactions, the Transaction Agreements and the Commercial Agreements and shall provide all other assistance and cooperation as may be reasonably requested by the Company in connection with the preparation, filing and distribution of the Proxy Statement and the Newco Form S-4 and any other action described in this Section 7.01(a). The parties shall notify each other promptly of the receipt 51 of any comments from the SEC or its staff and of any request by the SEC or its staff for amendments or supplements to the Proxy Statement, the Newco Form S-4 or the Newco Form 8-A or for additional information and shall supply each other with copies of all correspondence between it or any of its Representatives, on the one hand, and the SEC or its staff on the other hand, with respect to the Proxy Statement, the Newco Form S-4, the Newco Form 8-A, the Merger, the other Transactions, the Transaction Agreements or the Commercial Agreements. Each of the Company and Parent shall use its reasonable best efforts to respond as promptly as practicable to any such comments or requests of the SEC. If at any time prior to receipt of the Company Stockholder Approval there shall occur any event that should be set forth in an amendment or supplement to the Proxy Statement, the Newco Form S-4 or the Newco Form 8-A, the Company shall promptly prepare and mail to its stockholders such an amendment or supplement, and Parent shall cooperate in connection therewith. The Company shall not mail any Proxy Statement, the Newco Form S-4 or the Newco Form 8-A or any amendment or supplement thereto, to which Parent reasonably objects in a timely manner. (b) The Company shall, as promptly as practicable following the date of this Agreement (taking into account any delays reasonably required as a result of the occurrence of any event described in the last sentence of this clause (b)), duly call, give notice of, convene and hold a meeting of its stockholders (the "Company Stockholders Meeting") for the purpose of seeking the Company Stockholder Approval. The Company shall, through the Company Board, recommend to its stockholders that they give the Company Stockholder Approval, except to the extent that the Company Board shall have withdrawn or modified its approval or recommendation of this Agreement, the Restructuring or the Merger as permitted by Section 6.02(b). Without limiting the generality of the foregoing, the Company agrees that its obligations pursuant to the first sentence of this Section 7.01(b) shall not be affected by (i) the commencement, public proposal, public disclosure or communication to the Company of any Company Takeover Proposal or (ii) the withdrawal or modification by the Company Board of its approval or recommendation of this Agreement, the Restructuring or the Merger. 52 SECTION 7.02. Access to Information; Confidentiality. The Company shall, and shall cause each Company Subsidiary to, afford to Parent, and to Parent's affiliates and their respective officers, employees and Representatives, reasonable access during normal business hours during the period after the date of this Agreement and prior to the Effective Time to the Company Records (as defined in the Restructuring Agreement); provided, however, that such access will not unreasonably interfere with the normal operations of the Company or any Company Subsidiary and the reasonable out-of-pocket expenses of the Company and any Company Subsidiary incurred in connection therewith will be paid by Parent; provided further, however, that the Company or any Company Subsidiary may withhold (a) any document or information that (i) the disclosure of which would violate any Contract with a third party or any applicable Law or Judgment or would result in the waiver of any legal privilege or work-product protection or (ii) otherwise relates to any litigation (A) between the Company and any of its affiliates, on the one hand, and Parent and any of its affiliates, on the other hand (including the License Litigation and the New Patent Litigation), or (B) in which the party requesting such document or information or any of its affiliates otherwise has an interest, or (b) such portions of documents or information that its outside counsel advises should not be disclosed in order to ensure compliance with antitrust or other similar Laws. Subject to the next two sentences of this Section 7.02, all information exchanged pursuant to this Section 7.02 shall be subject to the confidentiality agreement dated October 8, 2001, between the Company and affiliates of Parent (the "Confidentiality Agreement"), and the letter agreement dated November 6, 2002, between the Company and R Diagnostics (the "Letter Agreement"). As of and after the Effective Time, the Confidentiality Agreement shall have no further force and effect and shall be superseded by Section 3.07 of the Post-Closing Covenants Agreement. As of and after the Effective Time, Parent shall, and shall cause its affiliates to, treat all Newco Information (as defined in the Post-Closing Covenants Agreement), including information exchanged pursuant to this Section 7.02, as subject to Section 3.07 of the Post-Closing Covenants Agreement. None of the Company Records provided or received by any party to this Agreement will affect any of the representations and warranties of the 53 parties hereto contained in this Agreement or the conditions hereunder to the obligations of the parties hereto. SECTION 7.03. Reasonable Best Efforts; Notification. Upon the terms and subject to the conditions set forth in this Agreement, each of the parties shall use its reasonable best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the Merger and the other Transactions, including (a) the taking of all acts necessary to cause the conditions to Closing to be satisfied as promptly as practicable, (b) the obtaining of all necessary actions or nonactions, waivers and Consents from Governmental Entities and the making of all necessary registrations and filings (including filings with Governmental Entities, if any) and the taking of all reasonable steps as may be necessary to obtain a Consent or waiver from, or to avoid an action or proceeding by, any Governmental Entity, (c) the obtaining of all necessary Consents or waivers from third parties; provided, however, that the parties shall not be required to pay or commit to pay any amount to (or incur any obligation in favor of) any person from whom any such Consent or waiver may be required (other than nominal filing or application fees), (d) the defending of any lawsuits or other legal proceedings, whether judicial or administrative, challenging this Agreement or the consummation of any of the Transactions, including seeking to have any stay, order or injunction entered by any court or other Governmental Entity preventing consummation of any of the Transactions vacated or reversed and (e) the execution and delivery of any additional instruments necessary to consummate the Transactions and to fully carry out the purposes of this Agreement and the other Transaction Agreements. In connection with and without limiting the foregoing, (i) the Company and the Company Board shall (A) take all action necessary to ensure that no state takeover statute or similar statute or regulation is or becomes applicable to any Transaction or this Agreement or any other Transaction Agreement and (B) if any state takeover statute or similar statute or regulation becomes applicable to any Transaction or this Agreement or any other Transaction Agreement, take 54 all action necessary to ensure that the Merger and the other Transactions may be consummated as promptly as practicable on the terms contemplated by this Agreement and otherwise to minimize the effect of such statute or regulation on the Merger and the other Transactions and (ii) Parent, on behalf of itself and its subsidiaries and affiliates, is hereby deemed to have granted any consent with respect to, and waived compliance with any requirements of, any term or provision of any Contract or arrangement in effect as of the date of this Agreement, between and among Parent or any of its subsidiaries or affiliates, on the one hand, and the Company or any Company Subsidiaries or affiliates, on the other hand, to the extent necessary in order to consummate the Transactions without resulting in a breach, default or other violation of any such Contract or arrangement. Notwithstanding the foregoing, the Company and its Representatives shall not be prohibited under this Section 7.03 from taking any action permitted by Section 6.02. SECTION 7.04. Stock Options. (a) As soon as reasonably practicable following the date of this Agreement (or, in the case of any Company Stock Plan adopted after the date of this Agreement and prior to the Effective Time, as soon as reasonably practicable following the date of such Plan's adoption), the Company Board (or, if appropriate, any committee administering the Company Stock Plans) shall adopt such resolutions or take such other actions as may be required in order that each outstanding Company Stock Option, whether vested or unvested, shall be canceled upon the occurrence of the Effective Time, and that the holder of such Company Stock Option shall become entitled, within five business days following the Effective Time, to receive (i) a cash payment from Parent, in an amount equal to the product of (A) the excess of the Per Share Cash Merger Consideration over the exercise price of such Company Stock Option multiplied by (B) the number of shares of Company Common Stock for which such Company Stock Option shall not theretofore have been exercised (the "Option Shares") and (ii) a number of shares of Newco Common Stock from the Company equal to the product of (A) the Exchange Ratio multiplied by (B) the number of Option Shares. To the extent that the foregoing provisions would otherwise require the Company to provide to the holder of a Company Stock Option a fractional share of 55 Newco Common Stock, the Exchange Agent will instead pay cash in lieu of such fractional share based on the value of a share of Newco Common Stock determined in accordance with Section 2.02(e). All payments and distributions pursuant to this Section shall be subject to all appropriate withholding. (b) Prior to the Effective Time, the Company Board shall adopt resolutions terminating the Company Stock Plans, and deleting provisions in any other Company Benefit Plan providing for the issuance, transfer or grant of any capital stock of the Company or any interest in respect of any capital stock of the Company, as of the Effective Time. (c) In this Agreement: "Company Stock Option" means any option to purchase Company Common Stock granted under any Company Stock Plan. "Company Stock Plans" means the Company's 2001 Broad Based Option Plan, the Company's 1994 Stock Option Plan, the Company's 1994 Non-Employee Directors Stock Option Plan, the Company's 1985 Stock Option Plan and any plans permitting the grant of options to purchase Company Common Stock that are adopted by the Company or any Company Subsidiary after the date of this Agreement and prior to the Effective Time in compliance with the terms of this Agreement, in each case as amended through the date of this Agreement. SECTION 7.05. Certain Claims. (a) Parent shall not, and shall not permit any affiliate of Parent or encourage any other person to, either before or after the Effective Time, assert any rights or pursue any actions or claims, whether directly or on a derivative basis, against (i) the Company or any of its affiliates or Newco or any affiliate of Newco or (ii) any of the current or former directors, officers, members of the board of managers, members, managers, employees, consultants, advisors, attorneys, trustees or agents of the Company or any of its affiliates or Newco or any affiliate of Newco (in each case, solely in their capacities as such), in each case for acts or omissions occurring (A) prior to the date of this Agreement or (B) after the date of this Agreement and prior 56 to the Effective Time, whether known or unknown, and Parent shall not, and Parent shall not permit any affiliate of Parent to, cooperate with any person in the assertion of any such rights or pursuing any such actions or claims except (x) as required by subpoena or other judicial or legal process or (y) as required by any inquiry by a Governmental Entity, but in each case only to the extent such inquiry or requirement to cooperate has not arisen as a result of a breach of this Section 7.05(a); provided, however, that this Section 7.05(a) shall not (1) affect any person's right to enforce any Transaction Agreement, any Commercial Agreement, any I/R Agreement (as defined in the Restructuring Agreement), any Newco I/R Agreement (as defined in the Restructuring Agreement), any agreement entered into between the Company, Newco or any of their respective affiliates, on the one hand, and any of the R Parties or any of their respective affiliates, on the other hand, after the date of this Agreement but prior to the Effective Time or any provision herein or therein in accordance with its terms, (2) apply to any act or omission which constitutes fraud in the inducement with respect to any Transaction Agreement or any Commercial Agreement or (3) apply to any action permitted or required by the Ongoing Litigation Agreement; provided further, however, that in the event this Agreement is terminated, this Section 7.05(a) shall be null and void and shall not operate as a waiver or release of any rights, actions, interests or claims that might have been asserted or pursued but for this Section 7.05(a). (b) The Company shall not, and shall not permit any affiliate of the Company or encourage any other person to, either before or after the Effective Time, assert any rights or pursue any actions or claims, whether directly or on a derivative basis, against (i) Parent or any of its affiliates or (ii) any of the current or former directors, officers, members of the board of managers, members, managers, employees, consultants, advisors, attorneys, trustees or agents of Parent or any of its affiliates (in each case, solely in their capacities as such), in each case for acts or omissions occurring (A) prior to the date of this Agreement or (B) after the date of this Agreement and prior to the Effective Time, whether known or unknown, and the Company shall not, and shall not permit any affiliate of the Company to, cooperate with any person in 57 the assertion of any such rights or pursuing any such actions or claims except (x) as required by subpoena or other judicial or legal process or (y) as required by any inquiry by a Governmental Entity, but in each case only to the extent such inquiry or requirement to cooperate has not arisen as result of a breach of this Section 7.05(b); provided, however, that this Section 7.05(b) shall not (1) affect any person's right to enforce any Transaction Agreement, any Commercial Agreement, any I/R Agreement, any Newco I/R Agreement, any agreement entered into between the Company, Newco or any of their respective affiliates, on the one hand, and any of the R Parties or any of their respective affiliates, on the other hand, after the date of this Agreement but prior to the Effective Time or any provision herein or therein in accordance with its terms, (2) apply to any act or omission which constitutes fraud in the inducement with respect to any Transaction Agreement or any Commercial Agreement or (3) apply to any action permitted or required by the Ongoing Litigation Agreement; provided further, however, that prior to the Effective Time, the Company shall be entitled to take any and all actions necessary to dismiss the New Patent Litigation; and provided further, however, that in the event this Agreement is terminated, this Section 7.05(b) shall be null and void and shall not operate as a waiver or release of any rights, actions, interests or claims that might have been asserted or pursued but for this Section 7.05(b). SECTION 7.06. Fees and Expenses. (a) Except as provided in this Agreement or in any other Transaction Agreement, all fees and expenses incurred in connection with the Merger and the other Transactions shall be paid by the party incurring such fees or expenses (it being understood that such fees and expenses of the Company shall be paid by the Company prior to the Closing or assumed by Newco pursuant to the Restructuring Agreement) whether or not the Merger is consummated. (b) The Company shall pay to Parent a fee of $26,600,000 if: (i) the Company terminates this Agreement pursuant to Section 9.01(d) and consummates the transactions contemplated by the applicable Superior Company Proposal or any other Company Takeover Proposal (solely for the purpose of this Section 7.06(b), "Company Takeover Proposal" shall have the meaning set forth in the 58 definition of Company Takeover Proposal in Section 6.02(h), except that the reference in such definition to "20%" shall be deemed to be a reference to "50%") received by the Company following such termination, or (ii) (A) either (1) Parent terminates this Agreement pursuant to Section 9.01(c) or (2) (x) after the date of this Agreement, any person makes a Company Takeover Proposal, (y) the Merger shall not have occurred on or before the Outside Date (as defined in Section 9.01(b)(i)) and (z) this Agreement is thereafter terminated pursuant to Section 9.01(b)(i) (but only if the Company Stockholders Meeting has not been held by the date that is two days prior to the date of such termination), and (B) within 12 months after such termination the Company consummates the transactions contemplated by a Company Takeover Proposal. For the avoidance of doubt, the parties expressly agree that in no event will a fee be paid pursuant to this Section 7.06(b) unless and until the transactions contemplated by a Company Takeover Proposal (including a Company Takeover Proposal that constitutes a Superior Company Proposal) are consummated (and the payment of such fee shall otherwise be subject to the other provisions of this Section 7.06(b)). Any fee due under this Section 7.06(b) shall be paid by wire transfer of same-day funds on the date of such consummation of transactions referred to in Section 7.06(b)(i) or 7.06(b)(ii)(B), as the case may be, to an account designated by Parent. (c) The Company shall reimburse Parent and Sub for all their reasonable expenses incurred in connection with this Agreement, the Commercial Agreements, the Merger, the other Transactions or the execution and delivery of the Commercial Agreements (i) in the event this Agreement is terminated by the Company in the circumstances described in Section 7.06(b)(i), no later than the date of such termination by the Company or (ii) in the event this Agreement is terminated by Parent pursuant to Section 9.01(c), within two business days after such termination by Parent; provided that the aggregate amount of such reimbursement shall not exceed $5,000,000. All payments made pursuant to this Section 7.06(c) shall be paid by wire transfer of same day funds on the date such payment is due to an account designated by Parent. 59 (d) The Company acknowledges that the agreements contained in this Section 7.06 are an integral part of the Transactions and that, without these agreements, Parent and Sub would not enter into this Agreement. SECTION 7.07. Public Announcements. Prior to the Effective Time, Parent and Sub, on the one hand, and the Company and Newco, on the other hand, shall consult with each other before issuing, and provide each other the opportunity to review and comment upon, any press release or other public statements with respect to the Merger, the other Transactions, the Commercial Agreements and the transactions contemplated thereby and shall not issue any such press release or make any such public statement prior to such consultation, except as may be required by applicable Law, court process or by obligations pursuant to any listing agreement with any national securities exchange. SECTION 7.08. Transfer Taxes. Subject to Section 2.01(f), all stock transfer, real estate transfer, documentary, stamp, recording and other similar Taxes (including interest, penalties and additions to any such Taxes) ("Transfer Taxes") incurred in connection with the Transactions shall be paid as set forth in the Tax Allocation Agreement. SECTION 7.09. Rights Agreement; Consequences if Rights Triggered. Except as approved in writing by Parent, the Company Board shall not (a) amend the Company Rights Agreement, (b) redeem the Company Rights or (c) take any action with respect to, or make any determination under, the Company Rights Agreement, except, in each case, to the extent necessary to comply with the fiduciary duties of the Company Board as determined by it in good faith after consultation with outside counsel. If any Distribution Date or Shares Acquisition Date (as defined in the Company Rights Agreement) occurs under the Company Rights Agreement at any time during the period from the date of this Agreement to the Effective Time, the Company and Parent shall make such adjustment to the Merger Consideration as the Company and Parent shall mutually agree so as to preserve the economic benefits that the Company and Parent each reasonably expected on the date of this Agreement to 60 receive as a result of the Merger and the other Transactions. SECTION 7.10. Listing of Newco Common Stock. The Company shall use its reasonable best efforts to cause the shares of Newco Common Stock to be distributed in the Merger to be approved for listing on a national securities exchange or approved for quotation on Nasdaq, in each case subject to official notice of issuance, prior to the Closing Date. SECTION 7.11. Modifications to the License Agreement. The Company shall not, prior to the Effective Time, amend, waive or fail to enforce any provision of the License Agreement without the prior written consent of Parent. SECTION 7.12. Standstill. From the date of this Agreement to the earlier of the Effective Time or the fifth anniversary of the termination of this Agreement in accordance with Section 9.01, Parent shall not, and Parent shall not permit any of its affiliates to, in any manner, whether publicly or otherwise, directly or indirectly, other than pursuant to or in furtherance of the Merger on the terms and subject to the conditions set forth in or as otherwise permitted by this Agreement, (a) acquire, agree to acquire or make any proposal to acquire, directly or indirectly, any securities or assets of the Company or any Company Subsidiary, except at the unsolicited specific written request of the Company, (b) propose to enter into, directly or indirectly, any tender or exchange offer, merger or other business combination or similar transaction involving the Company or any Company Subsidiary, except at the unsolicited specific written request of the Company, (c) form, join or in any way participate in a "group" (within the meaning of Section 13(d)(3) of the Exchange Act) with respect to any securities of the Company or any Company Subsidiary, (d) enter into any discussions, negotiations, arrangements, understandings or agreements (whether written or oral) with any other person (other than its Representatives) regarding any possible purchase or sale of any securities or assets of the Company or any Company Subsidiary, (e) make, or in any way participate, directly or indirectly, in any "solicitation" of "proxies" (as such terms are used in the proxy rules of the SEC) to 61 vote, or seek to advise or influence any person with respect to the voting of, any securities of the Company or any Company Subsidiary, (f) call, or seek to call, a meeting of the Company's shareholders or initiate or propose any shareholder proposal or execute any written consent with respect to the Company, (g) otherwise act, alone or in concert with others, to seek or attempt to control or influence the management, Company Board or policies of the Company (except to the extent conduct or settlement of litigation between R Diagnostics and the Company might be deemed such an attempt), (h) disclose any intention, plan or arrangement inconsistent with the foregoing or (i) advise, assist or encourage any other persons in connection with any of the foregoing. During the applicable period covered by the preceding sentence of this Section 7.12, Parent shall not, and Parent shall not permit any of its affiliates to, (i) request, directly or indirectly, that the Company or any of its Representatives amend or waive any provisions of this Section 7.12 (including, this sentence) or (ii) take any action which could reasonably be expected to require the Company to make a public announcement regarding the possibility of a business combination, merger or similar transaction other than the Merger, the other Transactions and the transactions contemplated by the Commercial Agreements. SECTION 7.13. Pending Litigation. Each of the parties hereto acknowledges and agrees that their obligations, agreements and covenants under this Agreement, any other Transaction Agreement or any Commercial Agreement shall not in any way be diminished or otherwise affected by, and the consummation of the Merger, any of the other Transactions or the transactions contemplated by any of the Commercial Agreements and shall not in any way be conditioned upon or delayed as a result of, the status of or any development relating to the License Litigation or the New Patent Litigation. SECTION 7.14. Company Secured Notes. Prior to the Effective Time, the Company shall give each holder of the 8.50% Senior Secured Notes of the Company (the "Company Secured Notes") notice of optional prepayment in accordance with Section 8.2 of the Senior Secured Notes Purchase Agreement (as defined in Section 10.03) and shall thereafter pay in full the Company Secured Notes and 62 discharge and satisfy in full all obligations of the Company under the Senior Secured Notes Purchase Agreement, if any, in accordance with such notice and otherwise in accordance with the procedures set forth in the Senior Secured Notes Purchase Agreement. SECTION 7.15. Restructuring. The parties to this Agreement acknowledge and agree that the implementation of the Restructuring, any of the other Transactions or the performance by the relevant parties of their obligations under the Commercial Agreements, in each case in accordance with their respective terms, shall not constitute (a) a breach or failure to be true or correct of any of the representations, warranties, agreements or covenants set forth in this Agreement or any other Transaction Agreement or (b) otherwise result in the failure of any condition to the obligations of any party hereto to effect the Merger or any other Transaction. SECTION 7.16. Notices of Certain Events. (a) The Company shall promptly notify Parent of: (i) any notice or other communication from any person alleging that the Consent of such person is or may be required in connection with the Transactions or the execution and delivery of the Commercial Agreements; (ii) any notice or other communication from any Governmental Entity in connection with the Transactions or the execution and delivery of the Commercial Agreements; and (iii) any actions, suits, claims, investigations or proceedings commenced or, to its knowledge, threatened against, the Company or any Company Subsidiary that, if pending on the date of this Agreement, would have been required to have been disclosed pursuant to Section 4.06, 4.12, 4.17, 4.18 or 4.19 or that relate to the consummation of the Transactions or the execution and delivery of the Commercial Agreements. (b) Parent shall promptly notify the Company of: 63 (i) any notice or other communication from any person alleging that the Consent of such person is or may be required in connection with the Transactions or the execution and delivery of the Commercial Agreements; (ii) any notice or other communication from any Governmental Entity in connection with the Transactions or the execution and delivery of the Commercial Agreements; and (iii) any actions, suits, claims, investigations or proceedings commenced or, to its knowledge, threatened against, any R Party that relate to the consummation of the Transactions or the execution and delivery of the Commercial Agreements. SECTION 7.17. Company Financing Transaction. Prior to the Effective Time, each of Parent and the Company shall execute and deliver a note in substantially the form attached hereto as Exhibit A (the "Parent Note") pursuant to which Parent shall loan (the "Loan") to the Company an amount equal to $214,000,000 minus the amount (the "Cash Amount") of cash received by the Company from (a) the exercise of Company Stock Options and (b) the exercise of Company Warrants, in each case during the period from the date of this Agreement to 5:00 p.m., New York City time, on the date (the "Cut-Off Date") that is two business days prior to the Effective Time. The Company shall provide Parent with written notice of the Cash Amount one day prior to the Effective Time. Immediately prior to the Effective Time, Parent shall make the Loan. ARTICLE VIII Conditions Precedent SECTION 8.01. Conditions to Each Party's Obligation to Effect the Merger. The respective obligations of each party 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. The Company shall have obtained the Company Stockholder Approval. 64 (b) Antitrust. Any waiting period under the HSR Act applicable to the Merger shall have expired or been terminated. (c) No Injunctions or Restraints. No temporary restraining order, preliminary or permanent injunction or other order issued by any court of competent jurisdiction or other Law preventing the consummation of the Merger shall be in effect; provided, however, that prior to asserting this condition the applicable party shall have used its reasonable best efforts to prevent the entry of any such injunction or other order and to appeal as promptly as possible any such injunction or other order that may be entered. (d) Form S-4. The Newco Form S-4 shall have become effective under the Securities Act and shall not be the subject of any stop order or proceedings seeking a stop order. (e) MSD. The MSD Agreements shall be in full force and effect and shall not have been amended or modified, and no provision thereof shall have been waived, without the prior written consent of Parent and the Company. (f) Limited Mutual Release and Agreement. The Limited Mutual Release and Agreement shall be in full force and effect and shall not have been amended or modified, and no provision thereof shall have been waived, without the prior written consent of Parent, the Company and Newco. SECTION 8.02. Conditions to Obligations of Parent and Sub. The obligations of Parent and Sub to effect the Merger are further subject to the satisfaction or waiver on or prior to the Closing Date of the following conditions: (a) Representations and Warranties. (i) The representations and warranties of the Company contained in Sections 4.06(c), 4.06(g), 4.13(b)(i) and 4.20 shall be true and correct, (ii) the representations and warranties of the Company contained in Section 4.02(a) shall be true and correct in all material respects, (iii) all other representations and warranties of the Company contained in this Agreement (A) that are qualified by a reference to 65 materiality or a Transaction Material Adverse Effect shall be true and correct (without regard to such reference), other than for such failures to be true and correct that, individually or in the aggregate, do not have a Transaction Material Adverse Effect, and (B) that are not so qualified shall be true and correct, other than for such failures to be true and correct that, individually or in the aggregate, do not have a Transaction Material Adverse Effect, in the case of each of clauses (i), (ii), (iii)(A) and (iii)(B), as of the date of this Agreement and as of the Closing Date, except to the extent such representations and warranties expressly relate to an earlier date (in which case as of such earlier date), and (iv) Parent shall have received a certificate signed by the chief executive officer of the Company to the foregoing effect. (b) Performance of Obligations of the Company. (i) The Company shall have performed (A) its obligations required to be performed by it under Sections 6.01(a)(iii), 6.01(a)(viii) and 7.11, (B) in all material respects its obligations required to be performed by it under Sections 2.01(d), 6.01(a)(i), 6.01(a)(ii), 6.01(a)(vi), 6.01(a)(vii), 6.01(a)(ix), 6.01(a)(xi), 6.01(a)(xii), 6.01(a)(xiii) (solely to the extent relating to actions described in Section 6.01(a)(i), 6.01(a)(ii), 6.01(a)(vi), 6.01(a)(vii), 6.01(a)(ix), 6.01(a)(xi) or 6.01(a)(xii)), 7.04, 7.05 and 7.09, (C) its obligations required to be performed by it under covenants in this Agreement qualified by a reference to materiality or a Transaction Material Adverse Effect (without regard to such reference), other than such failures to perform that, individually or in the aggregate, do not have a Transaction Material Adverse Effect, and (D) all other obligations under this Agreement, other than such failures to perform that, individually or in the aggregate, do not have a Transaction Material Adverse Effect and (ii) Parent shall have received a certificate signed by the chief executive officer of the Company to the foregoing effect. (c) Pre-Merger Transactions. The transactions contemplated by Section 3.01 shall have been consummated in accordance with the terms of this Agreement and the Restructuring Agreement in all material respects. 66 (d) Company Secured Notes. The Company shall have paid in full the Company Secured Notes as contemplated by Section 7.14. (e) Solvency Opinion. The Company shall have received an opinion from Duff & Phelps, LLC, American Appraisal Associates, Inc., Valuation Research, Inc. or other independent solvency firm of nationally recognized reputation reasonably acceptable to Parent in customary form and subject to customary qualifications and assumptions addressed to the Company Board substantially to the effect that Newco will not be Insolvent immediately after the Effective Time and after giving effect to the Restructuring, the other Transactions and the execution and delivery of the Commercial Agreements. SECTION 8.03. Conditions to Obligations of the Company and Newco. The obligations of the Company and Newco to effect the Merger are further subject to the satisfaction or waiver on or prior to the Closing Date of the following conditions: (a) Representations and Warranties. (i) The representations and warranties of Parent and Sub in this Agreement that are qualified as to materiality shall be true and correct, and the representations and warranties of Parent and Sub in this Agreement that are not so qualified shall be true and correct in all material respects, in each case as of the date of this Agreement and as of the Closing Date, except to the extent such representations and warranties expressly relate to an earlier date (in which case on and as of such earlier date) and (ii) the Company and Newco shall have received a certificate signed by the chief executive officer of Parent to the foregoing effect. (b) Performance of Obligations of Parent and Sub. (i) Parent and Sub shall have performed in all material respects their obligations and complied in all material respects with their agreements and covenants under this Agreement and (ii) the Company and Newco shall have received a certificate signed by the chief executive officer of Parent to the foregoing effect. (c) Pre-Merger Transactions. The payment of the Damages Payment and the June 30 Royalty Payment shall have 67 been made in accordance with the terms of the Ongoing Litigation Agreement. (d) Listing of Newco Common Stock. The shares of Newco Common Stock issuable to the Company's stockholders as contemplated by this Agreement shall have been approved for listing on a national securities exchange, or approved for quotation on Nasdaq, in either case subject only to official notice of issuance. (e) Financing. The Parent Note shall have been executed and delivered by the parties thereto and the Company shall have received from Parent not less than $214,000,000 minus the Cash Amount in immediately available funds. SECTION 8.04. Frustration of Closing Conditions. Neither the Company, on the one hand, nor Parent or Sub, on the other hand, may rely on the failure of any condition set forth in Article VIII to be satisfied if such failure was caused by the failure of the Company, on the one hand, or Parent or Sub on the other hand, to use its reasonable best efforts to consummate the Merger and the other Transactions, as required by and subject to Section 7.03. ARTICLE IX Termination, Amendment and Waiver SECTION 9.01. Termination. This Agreement may be terminated at any time prior to the Effective Time, whether before or after receipt of Company Stockholder Approval: (a) by mutual written consent of Parent, Sub, the Company and Newco; (b) by either Parent or the Company: (i) if the Merger does not occur on or before July 24, 2004 (the "Outside Date"), unless the failure to consummate the Merger is the result of a material breach of this Agreement by the party seeking to terminate this Agreement; provided, however, that the passage of such period shall be tolled for any part thereof during which any party shall be subject to a 68 non-final order, injunction or action preventing the Merger; (ii) if any Law preventing the Merger shall come into effect or if any Governmental Entity issues an order, or injunction, or takes any other action permanently preventing the consummation of the Merger and such order, injunction or other action shall have become final and nonappealable, unless such order, injunction or other action is the result of a material breach of this Agreement by the party seeking to terminate; provided, however, that prior to seeking to terminate, such party shall have used its reasonable best efforts to prevent such injunction, order or other action and to appeal as promptly as possible any such injunction, order or other action; or (iii) if, upon a vote at the Company Stockholders Meeting or any postponement or adjournment thereof, the Company Stockholder Approval is not obtained; (c) by Parent, if the Company Board or any committee thereof (i)(A) withdraws or modifies, in a manner adverse to Parent or Sub, or (B) proposes publicly to withdraw or modify, in a manner adverse to Parent or Sub, in either case, its approval or recommendation of this Agreement or the Merger, (ii) fails to recommend to the Company's stockholders that they adopt this Agreement or (iii) approves or recommends, or proposes publicly to approve or recommend, any Company Takeover Proposal; (d) by the Company in accordance with Section 9.05(b), including the notice provisions therein; (e) by the Company, if Parent breaches or fails to perform in any material respect any of its representations, warranties or covenants contained in this Agreement, which breach or failure to perform, if capable of being cured, has not been cured within 30 days after the giving of written notice to Parent of such breach (provided that the Company may not terminate this Agreement pursuant to this Section 9.01(e) if it is then in material breach of any of its representations, warranties or covenants in this Agreement); or 69 (f) by the Company if it has not received the Damages Payment, the June 30 Royalty Payment or any Covenant Payment in immediately available funds in accordance with the terms of this Agreement and the Ongoing Litigation Agreement. SECTION 9.02. Effect of Termination. In the event of termination of this Agreement by either the Company or Parent as provided in Section 9.01, this Agreement shall forthwith become void and have no effect, without any Liability on the part of Parent, Sub or the Company, other than Section 3.02, Section 4.07, Section 5.05, the fourth to last sentence of Section 7.02, Section 7.06, 7.07, 7.12, this Section 9.02 and Article X, which provisions shall survive such termination, and except for any liability that results from the material breach by a party of any representation, warranty or covenant set forth in this Agreement. Notwithstanding any provision in this Agreement to the contrary, as a result of the termination of this Agreement, neither Parent (on behalf of R Diagnostics) nor the Company shall be deemed to have (a) made a settlement with respect to, waived, given-up, compromised, prejudiced or qualified in any manner (i) its right to fully prosecute the New Patent Litigation, (ii) any of its rights or interests which are the subject of the New Patent Litigation or (iii) any claim made or to be made by either Parent or the Company, whether for damages or otherwise, in the New Patent Litigation or (b) made a settlement with respect to, waived, given up, compromised, prejudiced or qualified in any manner any of its rights or interests under the Final Judgment (as modified by the Court of Appeals Opinion) or any final judgment entered by the United States District Court for the District of Maryland consistent with the mandate to be returned by the United States Court of Appeals for the Fourth Circuit in connection with the Court of Appeals Opinion. Each of the Confidentiality Agreement and the Letter Agreement shall survive termination of this Agreement. SECTION 9.03. Amendment. This Agreement may be amended by the parties at any time before or after receipt of the Company Stockholder Approval; provided, however, that after receipt of the Company Stockholder Approval, there shall be made no amendment that by applicable Law 70 requires further approval by the stockholders of the Company without the further approval of such stockholders. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties. Notwithstanding the foregoing, at any time prior to receipt of the Company Stockholder Approval, Newco may, in its sole discretion and with, if necessary, approval of its Board of Directors, unilaterally change the Exchange Ratio to equal the product of (a) a number determined by Newco and (b) such ratio prior to such change. SECTION 9.04. Extension; Waiver. At any time prior to the Effective Time, the parties may (a) extend the time for the performance of any of the obligations or other acts of the other parties, (b) waive any inaccuracies in the representations and warranties contained in this Agreement or in any document delivered pursuant to this Agreement or (c) subject to the proviso of Section 9.03, waive compliance with any of the agreements or conditions contained in this Agreement. Any agreement on the part of a party to any such extension or waiver shall be valid only if set forth in an instrument in writing 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 such rights. SECTION 9.05. Procedure for Termination, Amendment, Extension or Waiver. (a) A termination of this Agreement pursuant to Section 9.01, an amendment of this Agreement pursuant to Section 9.03 or an extension or waiver pursuant to Section 9.04 shall, in order to be effective, require in the case of Parent, Sub, the Company or Newco, action by its Board of Directors or the duly authorized designee of its Board of Directors. (b) The Company may terminate this Agreement pursuant to Section 9.01(d) only if (i) the Company Board has received a Company Takeover Proposal, (ii) the Company Board shall have determined in good faith that such Company Takeover Proposal constitutes a Superior Company Proposal, (iii) the Company has notified Parent in writing of the determination described in Section 9.05(b)(ii), the identity of the person making the Superior Company Proposal and the material terms and conditions of the Superior Company Proposal; (iv) at least three business days 71 following receipt by Parent of the notice referred to in Section 9.05(b)(iii), and, taking into account any revised proposal made by Parent since receipt of the notice referred to in Section 9.05(b)(iii), such Superior Company Proposal remains a Superior Company Proposal and the Company Board has again made the determinations referred to in Section 9.05(b)(ii) (although no additional time period shall be required following such determinations, but it being understood that any amendment to the price or any other material terms of such a Superior Company Proposal shall require an additional notice and a new three business day period), (v) the Company is in compliance with Section 6.02 and (vi) the Company Board concurrently approves and recommends, and the Company concurrently enters into, a definitive agreement providing for the implementation of such Superior Company Proposal. ARTICLE X General Provisions SECTION 10.01. Nonsurvival of Representations and Warranties. None of the representations and warranties in this Agreement or in any instrument delivered pursuant to this Agreement shall survive the Effective Time. This Section 10.01 shall not limit any covenant or agreement of the parties which by its terms contemplates performance after the Effective Time. SECTION 10.02. Notices. All notices, requests, claims, demands and other communications under this Agreement shall be in writing and shall be deemed given upon receipt by the parties at the following addresses (or at such other address for a party as shall be specified by like notice) of a fax followed by delivery of such notice by overnight courier of an international reputation: (a) if to Parent or Sub or, after the Effective Time, the Company, to Roche Holding Ltd Grenzacherstrasse 124 CH-4070 Basel Switzerland 72 Attention: Bruno Maier Fax: +41 61 688 3196 with a copy to: Davis Polk & Wardwell 450 Lexington Avenue New York, NY 10017 Attention: Ulrika Ekman Fax: (212) 450-3800 (b) if to Newco or, prior to the Effective Time, the Company, to IGEN International, Inc. 16020 Industrial Drive Gaithersburg, MD 20877 Attention: President Fax: (301) 208-3789 with a copy to: Cravath, Swaine & Moore LLP 825 Eighth Avenue New York, NY 10019 Attention: Philip A. Gelston Sarkis Jebejian Fax: (212) 474-3700 SECTION 10.03. Definitions. For purposes of the Transaction Agreements: An "affiliate" of any person means another person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such first person. For the avoidance of doubt, (a) none of MSD, MST, JW, JW Consulting, Hyperion Catalysis, Wellstat Biologics, Wellstat Therapeutics, Proteinix and ICS is an affiliate of the Company or Newco for purposes of the Transaction Agreements and (b) neither Genentech, Inc., a Delaware corporation, nor Chugai Pharmaceutical Co., Ltd, a Japanese company, is an 73 affiliate of Parent or Sub for purposes of the Transaction Agreements. "Commercial Agreements" means the Covenants Not to Sue, the Improvements License Agreement, the License Agreement, the PCR License Agreement and the PCR Services Agreement. "Court of Appeals Opinion" means the Opinion of the Court of Appeals for the Fourth Circuit dated July 9, 2003, with respect to Appeal No. 02-1537 (4th Cir.). "Covered ECL Technology" shall have the meaning given to the term Licensed ECL Technology in the License Agreement. "Covenants Not to Sue" means that certain agreement entered into simultaneously with the execution and delivery of this Agreement by Newco, MSD, MST, R Diagnostics, Parent and the Continuing Licensee Subsidiary providing for the reciprocal covenants not to sue of each party thereto. "Environmental Law" means any binding and applicable Law, code, Judgment, injunction, Consent, or agreement issued, promulgated or entered into by or with any Governmental Entity, relating in any way to pollution, preservation or reclamation of natural resources, the presence, management, Release or threat of Release of, or exposure to, Hazardous Materials or to human health and safety. "FHLR" means F. Hoffmann-La Roche Ltd, a Swiss limited liability company. "Hazardous Material" means any chemical, material, substance, waste, pollutant or contaminant that is prohibited or regulated by or pursuant to any Environmental Law, including petroleum products and byproducts, asbestos, urea formaldehyde foam insulation, asbestos or asbestos-containing materials, medical or infectious wastes, polychlorinated biphenyls, radon gas, chlorofluorocarbons and all other ozone-depleting substances. 74 "Improvements License Agreement" means that certain agreement entered into simultaneously with the execution and delivery of this Agreement by the Company and R Diagnostics providing for the license of certain intellectual property improvements. "Insolvent" with respect to any person means, on the date of determination, (a) the fair value of the assets of such person, at a fair valuation, will not exceed its liabilities, subordinated, contingent or otherwise, (b) the present fair saleable value of the property of such person will not exceed the amount that will be required to pay the probable liability of its debts and other liabilities, subordinated, contingent, or otherwise, as such liabilities become absolute and matured, or (c) such person will be unable to pay its liabilities, subordinated, contingent or otherwise, as such liabilities become absolute and matured. Any determination as to the Insolvency of any person shall be made in a manner consistent with and assuming the Intended Treatment. "Intellectual Property Rights" means (a) trademarks, service marks, brand names, certification marks, trade dress, assumed names, trade names 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, (b) patents, applications for patents (including divisions, continuations, continuations in part and renewal applications), (c) non-public information, trade secrets and confidential information and rights in any jurisdiction to limit the use or disclosure thereof by any person, and (d) copyrighted works and registrations or applications for registration of copyrights in any jurisdiction, and any renewals or extensions thereof. "JW" means Jacob Wohlstadter, an individual whose business address is MSD, 9238 Gaither Road, Gaithersburg, MD 20877. "JW Consulting" means JW Consulting Services, L.L.C., a Delaware limited liability company. "Liabilities" means any and all debts, liabilities, commitments and obligations, whether fixed, 75 contingent or absolute, matured or unmatured, liquidated or unliquidated, accrued or not accrued, known or unknown, whenever or however arising and whether or not the same would be required by GAAP to be reflected in financial statements or disclosed in the notes thereto. "Licensed Intellectual Property Rights" means all Intellectual Property Rights owned by a third party and licensed or sublicensed to either the Company or any Company Subsidiary. "License Litigation" means Civil Action PJM-97-3461 (D. Md.) and Appeal No. 02-1537 (4th Cir.). "Limited Mutual Release and Agreement" means the Release and Agreement dated as of the date of this Agreement, among the Company, Newco, Hyperion, Wellstat Biologics, Wellstat Therapeutics, Proteinix and ICS. "MSD" means Meso Scale Diagnostics, LLC., a Delaware limited liability company. "MSD Agreements" means the agreements set forth on Schedule A to this Agreement. "MSD Consent" means the Global Consent and Agreement dated as of the date of this Agreement, among Parent, the Company, Newco, MSD, MST, JW and JW Consulting. "MST" means Meso Scale Technologies, LLC., a Delaware limited liability company. "Newco Rights" mean the rights issued pursuant to a shareholder rights agreement as contemplated by Section 2.02 of the Restructuring Agreement. "New Patent Litigation" means Civil Action Case No. PJM 03CV2000 pending as of the date of this Agreement before the United States District Court for the District of Maryland and any related actions (other than the License Litigation) and the Civil Action, Case No. LG Dusseldorf 4b O 258/03, in the regional court of Dusseldorf, Germany, filed on July 9, 2003, and any related actions (other than the License Litigation). 76 "1992 License Agreement" means the License and Technology Development Agreement dated as of September 23, 1992, between the Company and R Diagnostics. "Owned Intellectual Property Rights" means all Intellectual Property Rights owned or jointly owned by either the Company or any Company Subsidiary. A "Parent Material Adverse Effect" means a material adverse effect on the business or assets of Parent and its subsidiaries, taken as a whole, other than facts, events, changes, effects and developments relating to the economy in general or to Parent's industry in general and not specifically relating to Parent or any of its subsidiaries. "PCR License Agreement" means the License Agreement (Human IVD, Veterinary IVD, HLA Typing, Paternity, DNA Manufacturing and Plasma Testing) dated as of the date of this Agreement, among Newco, R Diagnostics, FHLR and RMS (as defined in this Section 10.03). "PCR Services Agreement" means the License Agreement (Human IVD Services and Animal Diagnostic Services) dated as of the date of this Agreement, among Newco, R Diagnostics, FHLR and RMS. A "person" means any individual, firm, corporation, partnership, company, limited liability company, trust, joint venture, association, Governmental Entity or other entity. "Release" means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, disposing or migrating into or through the environment or any facility, building or structure. "RMS" means Roche Molecular Systems, Inc., a Delaware corporation. "R Parties" means R Corp, Parent, Sub, R Diagnostics, FHLR and RMS. 77 "Senior Secured Notes Purchase Agreement" means the Note Purchase Agreement, dated as of March 22, 1999, among the Company and the purchasers party thereto. A "subsidiary" of any person means another person, an amount of the voting securities or other voting ownership or voting partnership interests of which is sufficient to elect at least a majority of its Board of Directors or other governing body (or, if there are no such voting interests, 50% or more of the equity interests of which) is owned directly or indirectly by such first person. For the avoidance of doubt, neither Genentech, Inc., a Delaware corporation, nor Chugai Pharmaceutical Co., Ltd., a Japanese company, is a subsidiary of Parent or Sub for purposes of the Transaction Agreements. "Transaction Agreements" means this Agreement, the Restructuring Agreement, the Post-Closing Covenants Agreement, the Tax Allocation Agreement, the Limited Mutual Release and Agreement, the Ongoing Litigation Agreement and the MSD Consent. A "Transaction Material Adverse Effect" means any change, effect, occurrence, condition, development or state of facts that (a) renders the Company Insolvent immediately prior to the Effective Time or (b) after giving effect to and assuming the consummation of the Restructuring and the other Transactions, (i) results in or would reasonably be expected to result in a loss (in whole or in part or for any period of time other than any such loss that arises out of or results from any action by, or failure to act on the part of, R Diagnostics or any of its affiliates) (A) by the Company (through the Continuing Licensee Subsidiary) of its ownership of, rights to and under and license under the License Agreement or (B) by Newco of, or a failure by Newco to obtain or retain, its ownership of, rights to and license of the Intellectual Property Rights that comprise the Covered ECL Technology, in the case of each of clauses (i)(A) and (i)(B) that materially impairs the legal right of R Diagnostics and its affiliates, taken as a whole, to make, have made, use, sell, place or otherwise commercialize products using Covered ECL Technology as contemplated by the License Agreement or (ii) renders Newco Insolvent at the Effective Time; provided, however, that no change, effect, occurrence, condition or development or 78 state of facts (x) arising out of, related to, or in connection with, the License Litigation or the New Patent Litigation or (y) principally attributable to the economy in general or Newco's industry in general shall constitute a Transaction Material Adverse Effect. SECTION 10.04. Interpretation. When a reference is made in this Agreement to a Section, Exhibit, Schedule or party, such reference shall be to a Section of, or an Exhibit, Schedule or party 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". The words "hereof", "herein", "hereby" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The words "date hereof" shall refer to the date of this Agreement. The term "or" is not exclusive. The word "extent" in the phrase "to the extent" shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply "if". The words "in the ordinary course consistent with past practice" and words of similar import when used in this Agreement with respect to Newco or any of its subsidiaries shall be interpreted to mean in the ordinary course consistent with past practice of the Company and the Company Subsidiaries. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms. For the avoidance of doubt, all lower case words used in this Agreement shall be interpreted in accordance with Delaware Law unless such lower case word is otherwise defined in this Agreement. Any agreement or instrument defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement or instrument as from time to time amended, modified or supplemented. References to a person are also to its permitted successors and assigns. SECTION 10.05. Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any applicable Law, or 79 public policy, all other conditions 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 to the end that transactions contemplated hereby are fulfilled to the extent possible. SECTION 10.06. 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 parties. Each party need not sign the same counterpart. SECTION 10.07. Entire Agreement; No Third-Party Beneficiaries. This Agreement and the Company Disclosure Letter (a) taken together with the other Transaction Agreements, the Commercial Agreements, the Confidentiality Agreement and the Letter Agreement, constitute the entire agreement, and supersede all prior agreements and understandings, both written and oral, among the parties with respect to the Transactions and the transactions contemplated by the Commercial Agreements; provided, however, that as of and after the Effective Time, the Confidentiality Agreement shall have no further force and effect and shall be superseded by Section 3.07 of the Post-Closing Covenants Agreement and (b) except for the provisions of Article II, Section 7.04 and Section 7.05, is not intended to confer upon any person other than the parties any rights or remedies. SECTION 10.08. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof. SECTION 10.09. Assignment. Neither this Agreement nor any of the rights, interests or obligations 80 under this Agreement shall be assigned, in whole or in part, by operation of law or otherwise by any of the parties without the prior written consent of the other parties. Any purported assignment without such consent shall be void; provided, however, the parties acknowledge and agree that the conversion of Newco in accordance with Section 2.01 of the Restructuring Agreement and the continuation of Newco as a result thereof shall be deemed not to be an assignment and shall not require any consent of any party. Subject to the preceding sentences, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and assigns. SECTION 10.10. Enforcement; Consent to Service of Process. (a) 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 or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in any Delaware state court or any Federal court of the United States of America sitting in the State of Delaware, this being in addition to any other remedy to which they are entitled at law or in equity. In addition, each of the parties hereto (i) consents to submit itself to the personal jurisdiction of any Delaware state court or any Federal court of the United States sitting in the State of Delaware in the event any dispute arises out of this Agreement or any Transaction, (ii) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, (iii) agrees that it will not bring any action relating to this Agreement or any Transaction in any court other than in any Delaware state court or any Federal court of the United States of America sitting in the State of Delaware and (iv) waives any right to trial by jury with respect to any action related to or arising out of this Agreement or any Transaction. (b) Parent hereby appoints Roche Holdings, Inc., with offices on the date of this Agreement at 1201 N. Orange Street, Suite 1050, Wilmington, Delaware 19801, as its authorized agent (the "Authorized Agent"), upon whom 81 process may be served in any suit, action or proceeding arising out of or relating to this Agreement or any Transaction that may be instituted in any court described in Section 10.10(a). Parent agrees to take any and all reasonable action, including the filing of any and all documents, that may be necessary to establish and continue such appointment in full force and effect as aforesaid. Parent agrees that service of process upon the Authorized Agent shall be, in every respect, effective service of process upon Parent. 82 IN WITNESS WHEREOF, Parent, Sub, the Company and Newco have duly executed and delivered this Agreement, all as of the date first written above. ROCHE HOLDING LTD, By /s/ D. Franz B. Humer _________________________ Name: D. Franz B. Humer Title: President and Chairman By /s/ Erich Hunziker _________________________ Name: Erich Hunziker Title: Chief Financial Officer 66 ACQUISITION CORPORATION II, By /s/ G. Keller _________________________ Name: Gottlieb Keller Title: President IGEN INTERNATIONAL, INC., By /s/ Samuel J. Wohlstadter _________________________ Name: Samuel J. Wohlstadter Title: Chairman and Chief Executive Officer IGEN INTEGRATED HEALTHCARE, LLC, By /s/ Richard J. Massey _________________________ Name: Richard J. Massey Title: President and Chief Operating Officer SCHEDULE A MSD AGREEMENTS MSD Consent Consent by MSD and MST to the License Agreement in the form attached to the License Agreement Covenants Not to Sue Joinder of MSD and MST to the Ongoing Litigation Agreement in the form set forth in the Ongoing Litigation Agreement EXHIBIT A THIS NOTE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER APPLICABLE SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE SOLD OR TRANSFERRED UNDER CIRCUMSTANCES THAT WOULD RESULT IN A VIOLATION OF THE REGISTRATION REQUIREMENTS OF SUCH ACT OR OTHER APPLICABLE LAWS DEMAND NOTE Dated:__________________, 200__ FOR VALUE RECEIVED, the undersigned, IGEN INTERNATIONAL, INC., a Delaware corporation, (the "Borrower"), hereby promises to pay to the order of ROCHE HOLDING LTD, a joint stock company organized under the laws of Switzerland (the "Lender"), on demand after the Effective Time (as defined in the Merger Agreement (as defined below)), the principal sum of US$_____________ (______________ United States Dollars) (such principal sum, together with any accrued interest added to the principal hereof as hereinafter provided being referred to herein as the "Principal Amount"), and to pay interest (computed on the basis of 360-day years of twelve 30-day months) on the unpaid Principal Amount hereof from the date hereof at the rate of ______% per annum, payable semi-annually on December 1 and June 1 in each year (each such date, an "Interest Payment Date"), commencing on _____________, 200_, until the Principal Amount is paid in full and to pay on demand interest (so computed) on any overdue principal and, to the extent permitted by applicable law, on any overdue interest, from the due date thereof at a rate per annum equal to ______% until the obligation with respect to the payment thereof shall be discharged. The Borrower shall pay all amounts due hereunder on _______________ (the "Maturity Date") to the extent that such amount was not paid prior to the Maturity Date. Notwithstanding anything to the contrary in this Demand Note, the Lender shall not make any demand for payment hereunder until after the Effective Time. Payments of principal and interest shall be made in lawful money of the United States of America at the principal office of the Lender; provided, however, that the Borrower shall have the option, in lieu of paying accrued interest in cash A-1 on any Interest Payment Date, to satisfy its obligation to pay such accrued interest by adding the amount of such accrued interest to the principal hereof on such Interest Payment Date. Any amount so added to the principal hereof shall thereafter accrue interest at the applicable per annum rate set forth above until paid in full. The parties hereto agree that (i) no loan hereunder shall be made until immediately prior to the Effective Time (as defined in the Agreement and Plan of Merger dated as of July 21, 2003 (the "Merger Agreement") among the Lender, a wholly-owned subsidiary of the Lender, the Borrower and a wholly-owned subsidiary of the Borrower), (ii) no obligation to repay such loan shall arise until such loan is actually made and (iii) no interest shall accrue hereunder until such loan is actually made. The Borrower agrees that this Demand Note is and shall remain an unsubordinated obligation of the Borrower that ranks pari passu with all other senior unsecured indebtedness of the Borrower. The Borrower agrees that the account of the Lender shall be prima facie evidence of the amounts loaned by the Lender to the undersigned and the amounts repaid by the undersigned to the Lender. The date and amount of the initial Principal Amount, the date and amount of each addition to the Principal Amount, and the date and amount of each prepayment of the Principal Amount, may be endorsed by the Lender on the schedule attached hereto which is part of this Demand Note. The obligations of the Borrower under this Demand Note shall be absolute and the Borrower hereby irrevocably waives any right (whether arising by operation of law or otherwise) to any setoff, counterclaim or reduction of its obligations with respect to any amounts payable under this Demand Note based on any claims that the Borrower has against the Lender, its affiliates or any other person. Any outstanding amounts hereunder may be paid in full or in part without prior notice at any time. The Borrower hereby waives presentment for payment, demands, notice of dishonor and protest of this Demand Note and further agrees that none of its terms or provisions may be waived, altered, modified or amended except as the Lender may consent in a writing duly signed for and on its behalf. No failure or delay on the part of the Lender in exercising any of its rights, powers or privileges hereunder shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise of any right, power or privilege. The remedies provided herein are cumulative and are not exclusive of any remedies provided by law. A-2 This Demand Note is binding upon the Borrower and its successors and assigns and is for the benefit of the Lender and its successors and assigns, except that the Borrower may not assign or otherwise transfer its rights or obligations under this Demand Note. THIS DEMAND NOTE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE. IGEN INTERNATIONAL, INC. By: ------------------------------- Name: Title: A-3 ADVANCES AND PAYMENTS OF PRINCIPAL ================================================================================ Amount of Initial Additions to Principal Unpaid Notation Date Principal Principal Amount Principal Made Amount Amount Prepaid Amount By - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ================================================================================ A-4 EX-99.2 4 y88675exv99w2.txt RESTRUCTURING AGREEMENT EXHIBIT 99.2 ================================================================================ RESTRUCTURING AGREEMENT Dated as of July 24, 2003, Between IGEN INTERNATIONAL, INC. And IGEN INTEGRATED HEALTHCARE, LLC ================================================================================ TABLE OF CONTENTS ARTICLE I Definitions SECTION 1.01 Definitions.................................................................. 2 ARTICLE II Conversion; Capitalization of Newco and Its Subsidiaries SECTION 2.01 Conversion and Capitalization of Newco....................................... 9 SECTION 2.02 Newco Rights Plan............................................................ 10 SECTION 2.03 Newco Subsidiaries........................................................... 10 ARTICLE III Tax Matters ARTICLE IV Restructuring and Assumed Liabilities SECTION 4.01 Restructuring................................................................ 11 SECTION 4.02 Assumed Liabilities.......................................................... 12 SECTION 4.03 Transfer and Assumption Documentation........................................ 12 SECTION 4.04 Nonassignable Contracts; Retained Contracts.................................. 12 SECTION 4.05 Intercompany Arrangements.................................................... 13 ARTICLE V Other Agreements SECTION 5.01 Use of Name.................................................................. 14 SECTION 5.02 Books and Records............................................................ 15 SECTION 5.03 Further Assurances........................................................... 15 SECTION 5.04 Cooperation.................................................................. 15
ARTICLE VI Employee Matters SECTION 6.01 Employment of Employees...................................................... 16 SECTION 6.02 Liabilities Generally........................................................ 16 SECTION 6.03 Preservation of Rights to Amend or Terminate Plans........................... 17 SECTION 6.04 Reimbursement; Indemnification............................................... 17 SECTION 6.05 Actions By Newco............................................................. 17 SECTION 6.06 No Termination............................................................... 17 ARTICLE VII Conditions ARTICLE VIII Miscellaneous and General SECTION 8.01 Modification or Amendment.................................................... 19 SECTION 8.02 Termination.................................................................. 19 SECTION 8.03 Notices...................................................................... 19 SECTION 8.04 Interpretation............................................................... 20 SECTION 8.05 Severability................................................................. 21 SECTION 8.06 Counterparts................................................................. 21 SECTION 8.07 Entire Agreement; Third-Party Beneficiaries.................................. 22 SECTION 8.08 Certain Obligations.......................................................... 22 SECTION 8.09 Governing Law................................................................ 22 SECTION 8.10 Assignment................................................................... 22 SECTION 8.11 Enforcement; Consent to Service of Process................................... 23 SECTION 8.12 Extension; Waiver............................................................ 23
RESTRUCTURING AGREEMENT dated as of July 24, 2003 (this "Restructuring Agreement"), between IGEN INTERNATIONAL, INC., a Delaware corporation (the "Company"), and IGEN INTEGRATED HEALTHCARE, LLC, a Delaware limited liability company ("Newco") and a direct wholly owned subsidiary of the Company. WHEREAS ROCHE HOLDING LTD, a joint stock company organized under the laws of Switzerland ("Parent"), 66 ACQUISITION CORPORATION II, a Delaware corporation and a wholly owned subsidiary of Parent ("Sub"), the Company and Newco have entered into an Agreement and Plan of Merger, dated as of the date of this Restructuring Agreement (the "Merger Agreement"), providing for the Merger (as defined in the Merger Agreement); WHEREAS as a condition to their willingness to enter into the Merger Agreement, the parties thereto have requested that the parties hereto enter into this Agreement; WHEREAS the respective Boards of Directors of the Company and Newco have approved this Restructuring Agreement, pursuant to which the Restructuring (as defined below) will be consummated; WHEREAS the purpose of the Restructuring is to make possible the Merger by separating from the Assets (as defined below) and Liabilities of the Company and its subsidiaries those Assets and Liabilities that Parent will not acquire; and WHEREAS in the Restructuring, the Newco Assets (as defined below) will be transferred to Newco or one or more of its subsidiaries, which will thereafter conduct the Newco Business (as defined below), and Newco or one or more of its subsidiaries will assume the Assumed Liabilities (as defined below). NOW, THEREFORE, in consideration of the foregoing, and of the representations, warranties, covenants and agreements set forth herein, the parties hereto hereby agree as follows: 2 ARTICLE I Definitions SECTION 1.01 Definitions. Unless otherwise noted, terms used but not defined in this Restructuring Agreement shall have the meanings set forth in the Merger Agreement. In addition, the following terms shall have the following meanings: "Assets" shall mean any and all of the business, assets, properties, interests and rights of whatever kind and nature, whether tangible or intangible, whether real, personal or mixed, whether fixed, contingent or otherwise, and wherever located, including the following: (a) real property interests (including leases, subleases and licenses), land, plants, buildings, improvements and fixtures thereon and all other easements, rights, privileges and appurtenances thereto; (b) machinery, equipment, tooling, vehicles, furniture and fixtures, leasehold improvements, repair parts, tools, plant, laboratory and office equipment and other tangible personal property, together with any rights or claims arising out of the breach of any express or implied warranty by the manufacturers or sellers of any of such assets or any component part thereof; (c) inventories, including raw materials, work-in-process, finished goods, parts, accessories and supplies (including items in transit, on consignment or in the possession of any third party); (d) cash, bank accounts, notes, loans and accounts receivable (whether current or not current), interests as beneficiary under letters of credit, advances and performance and surety bonds; (e) certificates of deposit, banker's acceptances, shares of stock (including capital stock of subsidiaries), bonds, debentures, evidences of indebtedness, certificates of interest or participation in profit-sharing agreements, collateral-trust certificates, reorganization certificates or subscriptions, transferable shares, investment contracts, voting trust certificates, 3 puts, calls, straddles, options, swaps, collars, caps and other securities or hedging arrangements of any kind; (f) financial, accounting, Tax, operating and other data and records, including books, minute books, records, notes, sales and sales promotional data, advertising materials, credit information, cost and pricing information, customer and supplier lists, reference catalogs, payroll and personnel records, minute books, stock ledgers, stock transfer records and other similar property, rights and information; (g) patents (including all reissues, divisions, continuations, continuations in part and extensions thereof), patent applications (including renewal applications), patent rights, patent improvements and related technology, patent improvement rights, trademarks, trademark applications, registrations and other rights, trade names and trade dress, domain names, trade name rights and other indications of origin, service marks, service mark rights, service names, copyrights and copyright applications and registrations, commercial and technical information (including engineering, production and other designs, drawings, notebooks and other recording methods, specifications, formulae and technology), computer and electronic data processing programs and software, inventions, processes, trade secrets, know-how, confidential information and other proprietary property, rights and interests; (h) Contracts, sale orders, purchase orders, open bids and other commitments and all other legally binding arrangements, whether written or oral, and all rights and interests therein (including rights to earned or accrued but unpaid amounts); (i) credits, prepaid expenses, deposits and receipts held by third parties; (j) claims, causes of action, choses in action, rights under insurance policies, rights under express or implied warranties, rights of recovery, rights of set-off, rights of subrogation and all other rights of any kind; (k) Permits (as defined in this Section 1.01); 4 (l) all rights in and to products sold or leased (including products returned after the Restructuring and rights of rescission, repletion and reclamation); and (m) goodwill and going concern value. "Assumed Liabilities" shall mean all Liabilities of the Company and the subsidiaries of the Company arising from events, occurrences, actions, omissions, facts or circumstances occurring or existing before the Effective Time, whether asserted before, at or after the Effective Time, other than the Continuing Company Liabilities. For the avoidance of doubt, Assumed Liabilities shall include the Liabilities of the Company under the License Agreement, the Improvements License Agreement and any Newco Litigation. "Company" shall have the meaning set forth in the Preamble. "Company Records" shall mean (a) the minute books of the Company; (b) the financial, accounting and Tax records of the Company; (c) all filings made by the Company (i) with the SEC and all correspondence with the SEC related thereto and (ii) with NASDAQ and all correspondence with NASDAQ related thereto; (d) all filings and other documentation related to the I Names (as defined in this Section 1.01); (e) certain litigation files of the Company to be identified by the Company prior to the Effective Time; (f) all documentation related to the Continuing Company Assets (other than the Continuing Company Assets described in clause (b) of the definition of such term); (g) all documentation related to the Continuing Company Liabilities; and (h) all documentation related to the Company Stock Plans. 5 "Continuing Company Assets" shall mean (a) all claims, defenses, offsets, Judgments and demands arising out of (i) the License Litigation, including the Final Judgment (as modified by the Court of Appeals Opinion) or any final judgment entered by the United States District Court for the District of Maryland, and (ii) the New Patent Litigation; (b) the Company Records; (c) the capital stock of the Continuing Licensee Subsidiary and the entire right, title and interest of the Company therein; (d) the Continuing Licensee Subsidiary's (i) right, title and interest under the License Agreement and (ii) rights and interests under the Covenants Not to Sue; (e) the Company's rights and interests under the Transaction Agreements (including this Restructuring Agreement); (f) the "IGEN" name and all other names, imprints, trademarks, trade names, trade name rights, trade dress, domain names, service marks, service mark rights and service names of the Company and its applicable subsidiaries, whether or not registered, that include or are derivatives of the "IGEN" name, including all common law rights and all goodwill associated therewith (collectively, the "I Names"); (g) the Company's bank accounts (but not any cash in such bank accounts); (h) all rights under the insurance policies of the Company (except as provided in Section 3.01 of the Post-Closing Covenants Agreement); (i) the Permits of the Company set forth on Schedule 1.01(a); (j) the Retained Contracts and the entire right, title and interest of the Company in each Retained Contract; 6 (k) the I/R Agreements (as defined below), other than the Newco I/R Agreements (as defined below), and the entire right, title and interest of the Company in each I/R Agreement, other than any Newco I/R Agreement; (l) the Hitachi Technical Information (as defined below); (m) the Parent Note and the entire right, title and interest of the Company therein; (n) with respect to the Transferred Customers (as defined below), (i) all amounts due to the Company under open purchase orders or other receivables and (ii) all inventory intended for sale to such Transferred Customers; and (o) to the extent the Company receives any cash from the exercise of Company Stock Options or Company Warrants after the Cut-Off Date, such cash. "Continuing Company Business" shall mean the Continuing Company Assets and the Continuing Company Liabilities and the businesses of the Company and the subsidiaries of the Company and their respective predecessors arising out of or related thereto. "Continuing Company Liabilities" shall mean (a) subject to Section 2.01(e) of the Post-Closing Covenants Agreement, any Liabilities of the Company under any Transaction Agreement, (b) subject to Section 2.01(f) of the Post-Closing Covenants Agreement, any Liabilities of the Continuing Licensee Subsidiary under the License Agreement or the Covenants Not to Sue, (c) any Liabilities of the Company or any subsidiary of the Company owed to Parent or any of its affiliates, including under the I/R Agreements, other than the Newco I/R Agreements, (d) any Liabilities of the Company or any subsidiary of the Company owed to Parent or any of its affiliates arising out of (i) the License Litigation, including the Final Judgment (as modified by the Court of Appeals Opinion) or any final judgment entered by the United States District Court for the District of Maryland, and (ii) the New Patent Litigation, (e) any Liabilities of the Company with respect to the Transferred Customers, other than Liabilities arising from breaches by the Company prior to the Effective 7 Time for which the Company would have had an indemnification obligation under Article X of the Supply, Services and Support Agreement (as defined in the Post-Closing Covenants Agreement) if the Transactions had not occurred, (f) any Liabilities of the Company pursuant to the Parent Note and (g) subject to Section 2.01(b) of the Post-Closing Covenants Agreement, any Liabilities of the Company under any Retained Contract. "Continuing Licensee Subsidiary" shall mean IGEN LS LLC, a Delaware limited liability company and a wholly owned subsidiary of the Company. "Employees" shall mean all employees of the Company and the Company Subsidiaries immediately prior to the Effective Time. "Hitachi Technical Information" shall mean all of the unpublished patent applications and technical information of Hitachi High Technologies Corporation provided to R Diagnostics, which in turn R Diagnostics has provided to the Company prior to the date of this Restructuring Agreement. "I Names" shall have the meaning set forth in subsection (f) of the definition of Continuing Company Assets. "Intercompany Arrangements" shall have the meaning set forth in Section 4.05. "I/R Agreements" means the agreements set forth on Schedule 1.01(b) hereto. "Legally Permitted" shall have the meaning set forth in Section 6.06. "License Agreement" shall mean the License Agreement dated as of the date of this Restructuring Agreement between the Company and the Continuing Licensee Subsidiary. "Merger Agreement" shall have the meaning set forth in the Recitals. "Newco" shall have the meaning set forth in the Preamble. 8 "Newco Assets" shall have the meaning set forth in Section 4.01. "Newco Business" shall mean all the businesses of the Company and the subsidiaries of the Company and their respective predecessors, at or at any time prior to the Effective Time, other than the Continuing Company Business. "Newco Certificate of Incorporation" shall have the meaning set forth in Section 2.01. "Newco Companies" shall mean Newco and its subsidiaries (determined after giving effect to the transactions contemplated by Article IV of this Restructuring Agreement). "Newco I/R Agreements" shall mean all documents, understandings and arrangements relating to (a) the transfer from R Diagnostics to the Company of the patent application entitled "Assays Employing Electrochemiluminescent Label and Electrochemiluminescence Quencher", (b) all agreements reached by the ECL committee of R Diagnostics and the ECL Committee of the Company at meetings between the two parties, (c) all agreements reached by the improvements transition teams of each of R Diagnostics and the Company at meetings between the two parties and (d) the Assignment dated as of July 3, 2003, by R Corp in favor of the Company. "Newco Litigation" means any Action (as defined in the Post-Closing Covenants Agreement) in which the Company or any of its subsidiaries or one or more of their respective officers, directors or Employees is a named defendant relating to, involving or arising out of events occurring prior to the Effective Time. "Newco Names" shall have the meaning set forth in Section 4.01(f). "Parent" shall have the meaning set forth in the Recitals. "Permits" of a person shall mean such person's approvals, authorizations, certificates, filings, franchises, licenses, notices, permits and rights of or with all Governmental Entities, including (a) all authorizations under the Federal Food, Drug, and Cosmetic 9 Act of 1938, as amended, and the regulations of the Federal Food and Drug Administration promulgated thereunder and (b) under Environmental Law. "Restructuring" shall have the meaning set forth in Section 4.02. "Restructuring Agreement" shall have the meaning set forth in the Preamble. "Retained Contracts" shall mean the Contracts set forth on Schedule 1.01(c) hereto. "Sub" shall have the meaning set forth in the Recitals. "Termination Protection Program" shall have the meaning set forth in Section 6.01. "Transferred Benefit Plans" shall have the meaning set forth in Section 6.02. "Transferred Customers" shall mean each point-of-care customer under the Supply, Services and Support Agreement, dated as of May 1, 2000, between the Company and R Diagnostics. ARTICLE II Conversion; Capitalization of Newco and Its Subsidiaries SECTION 2.01 Conversion and Capitalization of Newco. (a) Prior to the Effective Time, the Company, as the sole member of Newco, shall (i) authorize the conversion of Newco to a corporation in accordance with Section 18-216 of the Delaware Limited Liability Company Act pursuant to which all outstanding limited liability company interests in Newco shall be converted into Newco Common Stock and (ii) cause Newco, in accordance with Section 265 of the DGCL, to file with the Secretary of State of the State of Delaware (A) a certificate of conversion and (B) a certificate of incorporation substantially in the form attached hereto as Exhibit A (the "Newco Certificate of Incorporation"), each executed in accordance with Section 103 of the DGCL. Prior to the Effective Time, Newco shall in connection with the 10 conversion referred to in the previous sentence adopt by-laws substantially in the form attached hereto as Exhibit B. Notwithstanding the foregoing, Newco may amend its certificate of incorporation or its by-laws in a manner consistent with Section 6.01(a)(iii) of the Merger Agreement. (b) Prior to the Effective Time, the Company shall cause the number of authorized shares of Newco Common Stock to be sufficient in order to consummate the Transactions. (c) The Company shall determine, in its sole discretion, the identity of Newco's directors and officers. (d) Prior to or at the Effective Time, the Company shall cause Newco to change its name to a name that does not include any I Name. SECTION 2.02 Newco Rights Plan. Prior to the Effective Time, but following Newco's conversion to a corporation (as set forth in Section 2.01), Newco may enter into a shareholder rights agreement commonly associated with the adoption of a "rights plan" and distribute the rights contemplated thereby in connection with the distribution of the Newco Common Stock in the Merger. SECTION 2.03 Newco Subsidiaries. Prior to the Effective Time, Newco may create one or more subsidiaries and may transfer any or all of the Newco Assets to such subsidiaries at any time or from time to time. Prior to the Effective Time, Newco or any subsidiary of Newco may (a) issue shares of its capital stock to the Company, Newco or any subsidiary of Newco and (b) split, combine or reclassify any of its capital 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. ARTICLE III Tax Matters Notwithstanding anything in this Restructuring Agreement to the contrary, Liabilities of the parties for Taxes are subject to the terms of the Tax Allocation Agreement. All obligations of Newco under the Tax 11 Allocation Agreement shall be treated as Assumed Liabilities and not as Continuing Company Liabilities under this Restructuring Agreement and all obligations of the Company under the Tax Allocation Agreement shall be treated as Continuing Company Liabilities and not as Assumed Liabilities under this Restructuring Agreement. ARTICLE IV Restructuring and Assumed Liabilities SECTION 4.01 Restructuring. Prior to the Effective Time, the Company and its subsidiaries shall contribute, convey, assign, transfer and deliver, or cause to be contributed, conveyed, assigned, transferred and delivered, to Newco or to the appropriate subsidiary or subsidiaries of Newco specified by the Company in its sole discretion prior to the Effective Time all of the Company's or its applicable subsidiaries' right, title and interest in and to all Assets of the Company or its applicable subsidiaries (including (a) shares of stock in subsidiaries of the Company other than Newco and the Continuing Licensee Subsidiary, (b) the License Agreement and the Company's entire right, title and interest thereunder (other than any right, title and interest of the Company in the License Agreement through the Continuing Licensee Subsidiary), (c) the Improvements License Agreement and the Company's entire right, title and interest thereunder, (d) Newco's rights and interests under the Transaction Agreements, (e) Newco's rights and interests under the Covenants Not to Sue, the PCR License Agreement and the PCR Services Agreement, (f) other than the I Names, any and all names, imprints, trademarks, trade names, trade name rights, trade dress, domain names, service marks, service mark rights and service names, whether or not registered, including all common law rights and all goodwill associated therewith (collectively, the "Newco Names") and (g) copies of the Company Records, subject to Section 5.02 of this Restructuring Agreement) other than the Continuing Company Assets (such contributed, conveyed, assigned, transferred and delivered Assets, the "Newco Assets") solely in exchange for Newco Common Stock or limited liability company interests in Newco. For the avoidance of doubt, the transfer of the Covered ECL Technology to Newco or its applicable subsidiaries as part of the Restructuring shall be subject to the License Agreement. 12 SECTION 4.02 Assumed Liabilities. Notwithstanding anything in Section 4.01 to the contrary, the parties agree that, except as otherwise specifically set forth in any Transaction Agreement (including the treatment of Liabilities for Taxes as set forth in Article III or employee-related Liabilities as set forth in Section 6.02) or any Commercial Agreement, at or prior to the Effective Time, (a) Newco shall, or shall cause the appropriate subsidiary or subsidiaries of Newco specified by the Company in its sole discretion prior to the Effective Time to, unconditionally assume and undertake to pay, satisfy and discharge all the Assumed Liabilities when such Assumed Liabilities become due in accordance with their terms and (b) the Company shall retain or shall unconditionally assume and undertake to pay, satisfy and discharge, all the Continuing Company Liabilities when such Continuing Company Liabilities become due in accordance with their terms. The transactions contemplated by Sections 4.01 and 4.02 of this Restructuring Agreement are referred to collectively as the "Restructuring". SECTION 4.03 Transfer and Assumption Documentation. In furtherance of the contribution, conveyance, assignment, transfer and delivery of the Assets and the assumption of the Liabilities, in each case, in accordance with this Article IV, (a) the transferor shall execute and deliver, and cause its subsidiaries to execute and deliver, such deeds, bills of sale, stock powers, certificates of title, assignments of Contracts and other instruments of contribution, conveyance, assignment, transfer and delivery necessary or appropriate to evidence such contribution, conveyance, assignment, transfer and delivery and (b) the transferee shall execute and deliver such instruments of assumption as necessary or appropriate to evidence such assumption. SECTION 4.04 Nonassignable Contracts; Retained Contracts. (a) Notwithstanding anything in this Restructuring Agreement to the contrary, this Restructuring Agreement shall not constitute an agreement to assign or transfer any Permit, sales order, purchase order, open bid or other commitment or Contract if an assignment or transfer or attempted assignment or transfer of the same without the Consent or waiver of the other party or parties thereto would constitute a breach thereof or in any way impair the rights of the Newco Companies thereunder. 13 (b) The Company shall use its reasonable best efforts to obtain all Consents and waivers and to resolve all impracticalities of assignments or transfers necessary to assign or transfer to the applicable Newco Company the Newco Assets to be conveyed pursuant to Section 4.01; provided, however, that the Company shall not be required to pay or commit to pay any amount to (or incur any obligation in favor of) any person from whom any such Consent or waiver may be required (other than nominal filing or application fees). If and when such Consents and waivers are obtained, the assignment or transfer of the applicable Newco Asset shall be effected in accordance with the terms of this Restructuring Agreement. If any such Consent or waiver is not obtained prior to the Effective Time, then after the Effective Time, the Company and Newco shall cooperate (at Newco's expense) in any lawful and reasonable arrangement reasonably proposed by Newco under which Newco shall obtain the economic claims, rights and benefits under the Permit, sales order, purchase order, open bid or other commitment or Contract with respect to which the Consent or waiver has not been obtained in accordance with this Restructuring Agreement. Such reasonable arrangement may include (a) the subcontracting, sublicensing or subleasing to Newco of any and all rights of the Company against such other party arising out of a breach or cancelation thereof by such other party and (b) the enforcement by the Company of such rights. To the extent, and only to the extent, Newco is able to receive the economic claims, rights and benefits under such Permit, sales order, purchase order, open bid or other commitment or Contract, Newco shall be responsible for the Assumed Liabilities, if any, arising under such Permit, sales order, purchase order, open bid or other commitment or Contract. SECTION 4.05 Intercompany Arrangements. All Contracts, arrangements and commitments (other than this Restructuring Agreement, the other Transaction Agreements and the Commercial Agreements), whether oral or written, solely between any Newco Company or any operating unit of any Newco Company, on the one hand, and the Company or any operating unit of the Company (other than any Newco Company or operating unit thereof), on the other hand, entered into prior to the Effective Time ("Intercompany Arrangements") shall terminate upon the Effective Time. All amounts under such Intercompany Arrangements which are unbilled and have 14 not been charged to the related Contract, arrangement or commitment as of the Effective Time shall be canceled upon the Effective Time. At or before the Effective Time, the Company shall cause all intercompany indebtedness (which shall include payables and receivables) between the Newco Companies or any operating unit of any Newco Company, on the one hand, and the Company (or any operating unit of the Company (other than any Newco Company or operating unit thereof)), on the other hand, including any indebtedness under the Intercompany Arrangements, to be canceled. ARTICLE V Other Agreements SECTION 5.01 Use of Name. (a) Except as provided below, from and after the Effective Time, Newco and its subsidiaries shall have all rights in and use of the Newco Names and the Company shall take such actions as are necessary or appropriate to vest such rights in Newco or any of its subsidiaries. As a result and subject to Section 5.01(b), prior to the Effective Time, the Company shall take or cause to be taken all action necessary or appropriate to promptly deliver to Newco any and all stationery, business cards, brochures, sales literature, promotional material and other documents, including invoices and purchase orders, bearing any Newco Name. (b) Within 30 days after the Closing Date, (i) the Company and its subsidiaries shall cease using and shall destroy all stationery, business cards, brochures, sales literature, promotional material and other documents, including invoices and purchase orders, in its possession bearing any Newco Name even if such stationery, business cards, brochures, sales literature, promotional material or other documents, including invoices and purchase orders, includes any I Name and (ii) Newco and its subsidiaries shall (A) destroy all stationery, business cards, brochures, sales literature, promotional material and other documents, including invoices and purchase orders, in its possession bearing any I Name even if such stationery, business cards, brochures, sales literature, promotional material or other documents, including invoices and purchase orders, also includes any Newco Name and (B) take or cause to be taken all actions necessary to change the name of any of the Newco companies to eliminate from the 15 name "IGEN" and all derivatives thereto, including any name confusingly similar thereto. SECTION 5.02 Books and Records. Prior to or as promptly as practicable after the Effective Time, Newco shall, and shall cause the other Newco Companies to, deliver to the Company the Company Records; provided that Newco shall be entitled to retain copies of such Company Records (unless Newco determines in good faith, after consultation with outside counsel, that such retention of copies would reasonably be expected to result in the loss of any applicable claim to privilege, immunity, confidentiality or other similar protection) and such copies shall for all purposes constitute Newco Assets. SECTION 5.03 Further Assurances. The parties agree that if, after the completion of the Restructuring, either party or its affiliates holds Assets which by the terms hereof or of the Merger Agreement were intended to be assigned and transferred to, or retained by, the other party, such party shall, at its expense, promptly assign and transfer or cause to be assigned and transferred such Assets to the other party, and the parties agree that the transferring party will hold such Assets as trustee of the transferee party and all income and risk of loss of the transferred Assets until the completion of the Restructuring shall be for the account of the intended owner. Each of the parties hereto, at its own cost and expense, promptly shall execute such documents and other instruments and take such further actions as may be reasonably required or desirable to carry out the provisions hereof and to consummate the transactions contemplated hereby. SECTION 5.04 Cooperation. The parties shall cooperate with each other in all reasonable respects to ensure (a) that the Restructuring and the assumption of the Continuing Company Liabilities and the Assumed Liabilities are consummated in accordance with the terms hereof, (b) the retention by the Company of the Continuing Company Assets, (c) the transfer to Newco of all the Newco Assets and (d) the allocation of employee Liabilities and provision of employee benefits in accordance with the provisions of Article VI. 16 ARTICLE VI Employee Matters SECTION 6.01 Employment of Employees. Effective as of the Effective Time, Newco shall offer to each Employee (a) who participates in the Company's Termination Protection Program (the "Termination Protection Program") employment in a Qualifying Position (as defined in the Termination Protection Program) and (b) who does not participate in the Company's Termination Protection program substantially comparable employment to the employment of such Employee immediately prior to the Effective Time. For the avoidance of doubt, Newco hereby assumes as an Assumed Liability the Termination Protection Program and the Company's obligation thereunder. Nothing contained in this Section 6.01 shall confer on any Employee any right to continued employment after the Effective Time, and each Employee shall continue to be employed "at-will" subject to any requirements under applicable foreign Law or any applicable individual agreement to the contrary. SECTION 6.02 Liabilities Generally. Without limiting the generality of Section 4.02, effective as of the Effective Time, Newco shall assume and be solely responsible for all Liabilities (including any Liabilities imposed by Law) with respect to each employee benefit plan, as such term is defined in Section 3(3) of ERISA, each employment, severance or similar Contract, plan, arrangement or policy and each other plan or arrangement providing for compensation, bonuses, profit-sharing, stock option or other stock related rights or other forms of incentive or deferred compensation, health or medical benefits, disability benefits, workers' compensation, supplemental unemployment benefits, severance benefits or post-employment pension or welfare benefits, which is maintained, administered or contributed to by the Company or any Company Subsidiary and covers any Employee or former employee (and their beneficiaries) of, or independent contractor (and their beneficiaries) with respect to, the Company or any Company Subsidiary, other than the Company Stock Plans and the Termination Protection Program, (such plans and arrangements are referred to collectively herein as the "Transferred Benefit Plans"). 17 SECTION 6.03 Preservation of Rights to Amend or Terminate Plans. Except as otherwise expressly provided in the Merger Agreement or this Restructuring Agreement, no provision of this Restructuring Agreement shall be construed as a limitation on the right of Newco to amend or terminate any Transferred Benefit Plan which right the Company or Newco, as applicable, would otherwise have under the terms of such Transferred Benefit Plan or otherwise, and no provision of this Restructuring Agreement shall be construed to create a right in any Employee or beneficiary of such Transferred Benefit Plan that such Employee or beneficiary would not otherwise have under the terms of the Transferred Benefit Plan itself. SECTION 6.04 Reimbursement; Indemnification. Newco acknowledges that the Company may incur costs and expenses (including contributions to plans and the payment of insurance, or other similar premiums) after the Effective Time pursuant to any of the Transferred Benefit Plans. Accordingly, Newco agrees to reimburse the Company, as promptly as practicable but in any event within 30 days of receipt from the Company of appropriate verification, for all such costs and expenses reasonably incurred after the Effective Time. If applicable foreign Law requires that the Company incur Liabilities in respect of Employees, notwithstanding the terms of this Restructuring Agreement, then Newco shall fully indemnify and hold harmless the Company to the extent of such Liabilities. All Liabilities retained, assumed or indemnified by Newco pursuant to this Article VI shall in each case be deemed to be Assumed Liabilities and shall be subject to the indemnification provisions set forth in Article II of the Post-Closing Covenants Agreement. SECTION 6.05 Actions By Newco. Any action required to be taken under this Article VI may be taken by one or more of the Newco Companies. SECTION 6.06 No Termination. To the extent permitted by applicable Law, the Company and Newco agree (a) that the transactions contemplated by this Restructuring Agreement, the other Transaction Agreements and the Commercial Agreements shall not constitute a termination of employment of any Employee that would entitle such Employee to receive severance or similar compensation and benefits and (b) to use their reasonable 18 best efforts to amend, if necessary, any applicable Company Benefit Plans so to provide. If under applicable foreign Law, any Employee employed outside the U.S. is deemed to have incurred a termination of employment as a result of the transactions contemplated by this Restructuring Agreement which entitles such Employee to receive any payment or benefit under any non-U.S. Transferred Benefit Plan, governmental plan or arrangement or pursuant to any Law, including severance benefits, irrespective of such individual's continued employment by Newco, then notwithstanding anything in this Restructuring Agreement to the contrary, to the extent Legally Permitted (as defined below), appropriate adjustments shall be made to the treatment of such Employee during such continued employment, including not giving such Employee credit for prior service or treating such Employee as having been newly hired immediately after such deemed termination, for purposes of all applicable non-U.S. Transferred Benefit Plans. "Legally Permitted" means permitted under the Law of the country, the labor union, works council or collective bargaining agreement, including mandated waiting periods before which working conditions (including benefits) cannot be changed, and upon receiving required agreement from individuals or Transferred Benefit Plan trustees, foundation boards and members, and any other organizations having a recognized right to determine or affect benefits or funding of the Transferred Benefit Plan. ARTICLE VII Conditions The obligations of the Company and Newco to consummate the Restructuring shall be subject to each of the Transaction Agreements and each of the Commercial Agreements having been executed and delivered by each of the parties thereto and being in full force and effect. This Article VII shall in no way restrict the ability of the Company or Newco to consummate the Restructuring or any portion thereof prior to the satisfaction of any condition thereto. 19 ARTICLE VIII Miscellaneous and General SECTION 8.01 Modification or Amendment. The parties hereto may modify or amend this Restructuring Agreement only by written agreement executed and delivered by duly authorized officers of the respective parties; provided, however, that prior to the Effective Time, for so long as the Merger Agreement remains in effect, this Agreement shall not be amended or modified, and no provision hereof waived, without the prior written consent of Parent. SECTION 8.02 Termination. In the event the Merger Agreement is terminated pursuant to its terms prior to the Effective Time, this Restructuring Agreement shall automatically and simultaneously terminate and the Restructuring shall automatically and simultaneously be abandoned without the approval of Newco or the stockholders of the Company. In the event of such termination, no party shall have any Liability to any other party pursuant to this Restructuring Agreement. It is understood and agreed that the consummation of the Merger shall not constitute a termination of this Restructuring Agreement. The Confidentiality Agreement and the Letter Agreement shall survive termination of this Restructuring Agreement prior to the Effective Time. SECTION 8.03 Notices. All notices, requests, claims, demands and other communications under this Restructuring Agreement shall be in writing and shall be deemed given upon receipt by the parties at the following addresses (or at such other address for a party as shall be specified by like notice) of a fax followed by delivery of such notice by overnight courier of an international reputation: 20 (a) if to the Company (after the Effective Time), to Roche Holding Ltd Grenzacherstrasse 124 CH-4070 Basel Switzerland Attention: Bruno Maier Fax: +41 61 688 3196 with a copy to: Davis Polk & Wardwell 450 Lexington Avenue New York, NY 10017 Attention: Ulrika Ekman Fax: (212) 450-3800 (b) if to the Company (prior to the Effective Time) or to Newco, to IGEN International, Inc. 16020 Industrial Drive Gaithersburg, MD 20877 Attention: President Fax: (301) 208-3789 with a copy to: Cravath, Swaine & Moore LLP 825 Eighth Avenue New York, NY 10019 Attention: Philip A. Gelston Sarkis Jebejian Fax: (212) 474-3700 SECTION 8.04 Interpretation. When a reference is made in this Restructuring Agreement to a Section, Exhibit, Schedule or party, such reference shall be to a Section of, or an Exhibit, Schedule or party to, this Restructuring Agreement unless otherwise indicated. The headings contained in this Restructuring Agreement are for 21 reference purposes only and shall not affect in any way the meaning or interpretation of this Restructuring Agreement. Whenever the words "include", "includes" or "including" are used in this Restructuring Agreement, they shall be deemed to be followed by the words "without limitation". The words "hereof", "herein", "hereby" and "hereunder" and words of similar import when used in this Restructuring Agreement shall refer to this Restructuring Agreement as a whole and not to any particular provision of this Restructuring Agreement. The words "date hereof" shall refer to the date of this Restructuring Agreement. The term "or" is not exclusive. The word "extent" in the phrase "to the extent" shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply "if". The definitions contained in this Restructuring Agreement are applicable to the singular as well as the plural forms of such terms. Any agreement or instrument defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement or instrument as from time to time amended, modified or supplemented. References to a person are also to its permitted successors and assigns. SECTION 8.05 Severability. If any term or other provision of this Restructuring Agreement is invalid, illegal or incapable of being enforced by any applicable Law, or public policy, all other conditions and provisions of this Restructuring 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 Restructuring Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that transactions contemplated hereby are fulfilled to the extent possible. SECTION 8.06 Counterparts. This Restructuring 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 parties. Each party need not sign the same counterpart. 22 SECTION 8.07 Entire Agreement; Third-Party Beneficiaries. This Restructuring Agreement (a) taken together with the other Transaction Agreements, the Commercial Agreements, the Confidentiality Agreement and the Letter Agreement constitute the entire agreement, and supersede all prior agreements and understandings, both written and oral, among the parties with respect to the Transactions and the transactions contemplated by the Commercial Agreements; provided, however, that as of and after the Effective Time, the Confidentiality Agreement shall have no further force and effect and shall be superseded by Section 3.07 of the Post-Closing Covenants Agreement and (b) nothing contained in this Restructuring Agreement is intended to confer upon any person other than the parties hereto and Parent, which shall be a third party beneficiary to this Restructuring Agreement, any benefit, right or remedy under or by reason of this Restructuring Agreement. SECTION 8.08 Certain Obligations. Whenever this Restructuring Agreement requires any of the subsidiaries of any party to take any action, this Restructuring Agreement will be deemed to include an undertaking on the part of such party to cause such subsidiary to take such action; provided, however, for the avoidance of doubt, at any time after the Effective Time, the Newco Companies shall not be considered to be subsidiaries of the Company. SECTION 8.09 Governing Law. This Restructuring Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof. SECTION 8.10 Assignment. Neither this Restructuring Agreement nor any of the rights, interests or obligations under this Restructuring Agreement shall be assigned, in whole or in part, by operation of law or otherwise by any of the parties without the prior written consent of the other parties. Any purported assignment without such consent shall be void; provided, however, the parties acknowledge and agree that the conversion of Newco in accordance with Section 2.01 of this Restructuring Agreement and the continuation of Newco as a result thereof shall be deemed not to be an assignment and shall not 23 require any consent of any party. Subject to the preceding sentences, this Restructuring Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and assigns. SECTION 8.11 Enforcement; Consent to Service of Process. The parties agree that irreparable damage would occur in the event that any of the provisions of this Restructuring Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Restructuring Agreement and to enforce specifically the terms and provisions of this Restructuring Agreement in any New York state court or any Federal court located in the State of New York, this being in addition to any other remedy to which they are entitled at law or in equity. In addition, each of the parties hereto (a) consents to submit itself to the personal jurisdiction of any New York state court or any Federal court located in the State of New York in the event any dispute arises out of this Restructuring Agreement or any transaction contemplated in this Restructuring Agreement, (b) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, (c) agrees that it will not bring any action relating to this Restructuring Agreement or any transaction contemplated in this Restructuring Agreement in any court other than any New York state court or any Federal court located in the State of New York and (d) waives any right to trial by jury with respect to any action related to or arising out of this Restructuring Agreement or any transaction contemplated in this Restructuring Agreement. SECTION 8.12 Extension; Waiver. At any time prior to the Effective Time, the parties may (a) extend the time for the performance of any of the obligations or other acts of the other parties or (b) waive compliance with any of the agreements or conditions contained in this Restructuring Agreement. Any agreement on the part of a party to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. The failure of any party to this Restructuring Agreement to assert any of its rights under this Restructuring Agreement or otherwise shall not constitute a waiver of such rights. 24 IN WITNESS WHEREOF, this Restructuring Agreement has been duly executed and delivered by the duly authorized officers of the parties hereto as of the date first herein above written. IGEN INTERNATIONAL, INC., by /s/ Samuel J. Wohlstadter ___________________________ Name: Samuel J. Wohlstadter Title: Chairman and Chief Executive Officer IGEN INTEGRATED HEALTHCARE, LLC, by /s/ Richard J. Massey ___________________________ Name: Richard J. Massey Title: President and Chief Operating Officer SCHEDULE 1.01(a) PERMITS Department of Health and Human Services, Centers for Disease Control and Prevention, Laboratory Registration Select Agent Transfer Program, Registration # 20020308-842, expires May 23, 2005. Department of Health and Human Services, National Institutes of Health, Animal Welfare Assurance, Assurance # A4088-01, expires August 31, 2007. United States Department of Justice, Drug Enforcement Administration, Controlled Substance Registration Certificate, Registration # RI0117134, expires November 30, 2003. State of Maryland, Division of Drug Control, Controlled Dangerous Substances Registration, Registration # 1024379, expired June 30, 2003. Department of Treasury, Bureau of Alcohol, Tobacco and Firearms, Special Tax Stamp-User of Tax-Free Alcohol, Control # 2002154-P55-005, expired June 30, 2003. State of Maryland, Alcohol and Tobacco Tax Division, Non-Beverage "C" - User of Tax-Free Alcohol, Permit # , NC-00676, open-ended until closed. United States Department of Agriculture, Animal and Plant Health Inspection Service, Importation Transportation of Controlled Materials and Organisms and Vectors -Import/Ship Subsystem Pumps, Permit # 47673 Research, expired March 14, 2003. United States Department of Agriculture, Animal and Plant Health Inspection Service, Importation Transportation of Controlled Materials and Organisms and Vectors - Import Bovine Products, Permit # 38348 Research, expired May 2, 2003. United States Department of Agriculture, Animal and Plant Health Inspection Service, Importation Transportation of Controlled Materials and Organisms and Vectors - Import Horse Serum, Permit # 42981 Research, expires March 27, 2004. 2 United States Department of Agriculture, Animal and Plant Health Inspection Service, Importation Transportation of Controlled Materials and Organisms and Vectors - Interstate Equine and Swine Viruses, Permit # 49488 Research, expires October 10, 2003. Department of Health and Human Services, Public Health Service, Centers for Disease Control and Prevention, Import/Transfer Etiological Agents or Vectors Human Disease - Import/Ship Pumps, PHS Permit # 2002-04-142, expired April 24, 2003. Department of Health and Human Services, Public Health Service, Centers Disease Control and Prevention, Import/Transfer Etiological Agents or Vectors Human Disease - Import/Ship Pumps, PHS Permit # 2002-11-107, expires November 25, 2003. Department of Health and Human Services, Public Health Service, Centers Disease Control and Prevention, Import/Transfer Etiological Agents or Vectors Human Disease - Import Recombinant Adenovirus, PHS Permit # 2003-02-206, expires February 28, 2004. State of Virginia, Department of Health-OEMS, Early Defibrillation Service Program, Registration # 0302055308, expires December 31, 2006. State of Maryland, Institute for Emergency Medical Services Systems, Facility Automated Defibrillation Program, Registration # 66, expires April 25, 2004. State of Maryland, Radiological Health Program, Radioactive Material License, License # MD-31-159-01, expires July 31, 2005. United States Environmental Protection Agency, Regulated Waste Activity, Identification # MDD048341937, open-ended until closed. United States Environmental Protection Agency, Regulated Waste Activity, Identification # CAL000255662, open-ended until closed. 3 State of Maryland, Department of Environment, Special Medical Waste Activity, Identification # SMW000004456, open-ended until closed. State of Maryland, Department of Environment, Special Medical Waste Activity, Identification # SMW000007664, open-ended until closed. State of Maryland, Department of Environment, Special Medical Waste Activity, Identification # SMW000008023, open-ended until closed. State of Maryland, Montgomery County Fire and Rescue Service, Hazardous Materials Use Certificate - General Use, Certificate # 2002-2057, expires September 1, 2003. State of Maryland, Montgomery County Fire and Rescue Service, Hazardous Materials Use Certificate - General Use, Certificate # 2002-2056, expires September 1, 2003. State of Maryland, Montgomery County Fire and Rescue Service, Hazardous Materials Use Certificate - General Use, Certificate # 2002-2055, expires September 1, 2003. State of Maryland, Montgomery County Fire and Rescue Service, Hazardous Materials Use Certificate - General Use, Receipt # 14595, expires September 1, 2003. State of Maryland, Montgomery County Fire and Rescue Service, Hazardous Materials Use Certificate - General Use, Certificate # 2002-0897, expires September 1, 2003. United States Department of Transportation, Hazardous Materials Certificate of Registration, Registration # 061803006026LN, expires June 30, 2006. San Diego County Department of Environmental Health, Hazardous Materials Division, Health Permit, Permit # 200552, open-ended until closed. SCHEDULE 1.01(b) I/R AGREEMENTS 1. Option for License and Technology Development Agreement by and between R Diagnostics and the Company, dated December 19, 1991. 2. Development Agreement between R Diagnostics and the Company, dated April 15, 1994, as amended by Amendment, dated December 4, 1996, Second Amendment, dated May 8, 2001, Third Amendment, dated July 23, 2002, and Fourth Amendment, dated February 10, 2003. 3. The Supply, Services and Support Agreement dated as of May 1, 2000, between the Company and R Diagnostics. 4. Advance Royalty Agreement by and between R Diagnostics and the Company, dated January 9, 1997. 5. Agreement between F. Hoffmann-La Roche Ltd. and the Company, signed by F. Hoffmann-La Roche Ltd. on November 16, 1990, and the Company on December 18, 1990. 6. Material Transfer Agreement by and between Hoffmann-La Roche Inc. and the Company, dated December 20, 1995. 7. Agreement Relating to the Videotaping of Roche Training Presentations between R Diagnostics and the Company, signed by R Diagnostics on December 16, 2002, and the Company on December 13, 2002. 8. 2002 ECL Translation Cost Approval by Roche 9. Confidentiality Agreement between the Boehringer Mannheim Biochemicals Division of Boehringer Mannheim Corporation and the Company, dated June 19, 1986. 10. Confidentiality Agreement between the Boehringer Mannheim Biochemicals Division of Boehringer Mannheim Corporation and the Company, dated November 7, 1986. 11. Secrecy Agreement between the Company and F. Hoffmann-La Roche & Co. Limited Company, dated September 16, 1988. 12. Non-disclosure Agreement between the Company and the Research and Development Division of Boehringer Mannheim Corporation, dated December 5, 1990. 2 13. Confidential Disclosure Agreement by and among the Company, Boehringer Mannheim Corporation and PA Consulting, dated July 15, 1992. 14. Agreement by and among F. Hoffmann-La Roche Ltd., the Company and B. Hauptman & Associates. 15. Agreement between F. Hoffmann-La Roche Ltd. and the Company, dated May 9, 2000. 16. Letter Agreement by and among the Company, F. Hoffmann-La Roche Ltd. and R Diagnostics, dated as of October 8, 2001. 17. Letter Agreement by and among Hogan & Hartson LLP, Hoffmann-La Roche Inc., MSD and MST, dated December 27, 2001. 18. Letter Agreement between the Company and R Diagnostics, dated November 6, 2002. 19. Nondisclosure Agreement between the Company and F. Hoffmann-La Roche Co., LTD., dated September 6, 1988. 20. Non-Disclosure Agreement between the Company and F. Hoffmann-La Roche Co., LTD, dated January 25, 1989. 21. Nondisclosure Agreement between the Company and Hoffmann-La Roche Inc., signed by the Company on June 6, 1989, and Hoffmann-La Roche Inc. on June 1, 1989. 22. Nondisclosure Agreement between the Company and F. Hoffmann-La Roche Ltd., dated June 24, 1991. 23. Nondisclosure Agreement between the Company and R Diagnostics, signed by R Diagnostics on June 14, 1991, and the Company on June 12, 1991. 24. Nondisclosure Agreement between the Company and R Diagnostics, dated April 23, 1993. 25. Letter Agreement between the Company and R Diagnostics, dated October 21, 1999. 26. 2002 Acknowledgement of Withdrawal of Debit Note 3 27. Allocation Agreement by and between the Company and Roche Diagnostics Corporation, signed by the Company on January 7, 2001, and Roche Diagnostics Corporation on January 10, 2001. 28. Letter Agreement between R Diagnostics and the Company, dated May 20, 2002. 29. Letter Agreement between the Company and R Diagnostics, dated February 6, 2003. 30. Letter Agreement between R Diagnostics and the Company, dated February 5, 2002. 31. Letter Agreement between R Diagnostics and the Company, dated September 11, 2002. 32. Letter Agreement between R Diagnostics and the Company, dated June 12, 2001. 33. Letter from R Diagnostics to the Company, dated April 1, 2003, and Letter from the Company to R Diagnostics, dated April 21, 2003. 34. Study Agreement between the Company and Syntex (USA) Inc., dated March 15, 1995. 35. Assignment dated as of July 3, 2003, by R Corp in favor of the Company. 36. All documents, understandings and arrangements relating to the transfer from R Diagnostics to the Company of the patent application entitled "Assays Employing Electrochemiluminescent Label and Electrochemiluminescence Quencher." 37. All ongoing court imposed obligations applicable to R Diagnostics and any of its affiliates and the Company arising from any litigation between such parties. 38. All agreements between Wilmer, Cutler & Pickering and Foley & Lardner in connection with the License Litigation. 39. All documents, understanding and arrangements relating to all agreements reached by the ECL committee of R 4 Diagnostics and the Company at meetings between the two parties. 40. All documents, understandings and arrangements relating to all agreements reached by the improvements transition teams of R Diagnostics and the Company at meetings between the two parties. 41. All documents, understandings and arrangements relating to all agreements between R Diagnostics and the Company relating to transfer pricing of ECL assays. SCHEDULE 1.01(c) RETAINED CONTRACTS 1. Common Stock Purchase Agreement, dated as of February 9, 2001, between the Company and Acqua Wellington North American Equities Fund, Ltd., and the accompanying Letter Agreement thereto, dated the same date thereof. 2. Common Stock Purchase Agreement, dated as of December 7, 2001, between the Company and Acqua Wellington Opportunity I, Ltd. 3. Common Stock Purchase Agreement, dated as of December 7, 2001, between the Company and Acqua Wellington Private Placement Fund, Ltd. 4. Common Stock Purchase Agreement, dated as of March 8, 2002, between the Company and Acqua Wellington Opportunity I, Ltd. 5. Common Stock Purchase Agreement, dated March 8, 2002, between the Company and Acqua Wellington Private Placement Fund, Ltd. 6. The Registration Rights Agreement, dated as of December 7, 2001, between the Company and Acqua Wellington Opportunity I, Ltd. 7. The Registration Rights Agreement, dated as of December 7, 2001, between the Company and Acqua Wellington Private Placement Fund, Ltd. 8. The Registration Rights Agreement, dated as of March 8, 2002, between the Company and Acqua Wellington Opportunity I, Ltd. 9. The Registration Rights Agreement, dated March 8, 2002, between the Company and Acqua Wellington Private Placement Fund, Ltd. 10. Securities Purchase Agreement, dated as of January 11, 2000, among the Company and the purchasers party thereto. 11. Purchase Agreement, dated as of December 16, 1997, among the Company and the purchasers party thereto. 2 12. Registration Rights Agreement, dated as of January 11, 2000, among the Company and the other persons party thereto. 13. The Company's $30,000,000 8.50% Senior Secured Notes due 2006. 14. Note Purchase Agreement, dated as of March 22, 1999, among the Company and the purchasers party thereto. 15. Collateral Account and Security Agreement, dated as of March 22, 1999, among the Company, the purchasers from time to time party thereto, Bankers Trust Company, as Collateral Agent and Bankers Trust Company, as Depositary Agent. 16. The Company Rights Agreement. EX-99.3 5 y88675exv99w3.txt POST-CLOSING COVENANTS AGREEMENT EXHIBIT 99.3 ================================================================================ POST-CLOSING COVENANTS AGREEMENT Dated as of July 24, 2003, Among ROCHE HOLDING LTD, IGEN INTERNATIONAL, INC. And IGEN INTEGRATED HEALTHCARE, LLC ================================================================================ ARTICLE I Definitions SECTION 1.01. Definitions ............................................................. 2 ARTICLE II Indemnification SECTION 2.01. Indemnification by Newco................................................. 5 SECTION 2.02. Indemnification by Parent................................................ 6 SECTION 2.03. Procedures Relating to Indemnification................................... 8 SECTION 2.04. Certain Limitations...................................................... 11 SECTION 2.05. Exclusivity of Tax Allocation Agreement.................................. 12 SECTION 2.06. Exclusivity of Remedies.................................................. 13 ARTICLE III Other Agreements SECTION 3.01. Insurance ............................................................... 13 SECTION 3.02. Characterization of Payments............................................. 14 SECTION 3.03. Agreement Not to Solicit Employees....................................... 14 SECTION 3.04. Successors .............................................................. 15 SECTION 3.05. Third Party Rights; Notices.............................................. 16 SECTION 3.06. Retention of Records..................................................... 17 SECTION 3.07. Confidentiality; Preservation of Privilege; Access....................... 17 SECTION 3.08. Indemnification; Certain Claims.......................................... 21 SECTION 3.09. Public Announcements..................................................... 24 SECTION 3.10. Standstill .............................................................. 24 SECTION 3.11. Transferred Customers.................................................... 25 SECTION 3.12. New Patent Litigation.................................................... 25 SECTION 3.13. I/R Agreements .......................................................... 26 SECTION 3.14. PCR License Payment...................................................... 26 ARTICLE IV Mutual Releases SECTION 4.01. Mutual Releases.......................................................... 26 SECTION 4.02. Enforcement of Article IV................................................ 27
ARTICLE V Miscellaneous and General SECTION 5.01. Effectiveness; Modification or Amendment................................. 27 SECTION 5.02. Termination ............................................................. 28 SECTION 5.03. Notices ................................................................. 28 SECTION 5.04. Interpretation .......................................................... 29 SECTION 5.05. Severability ............................................................ 30 SECTION 5.06. Counterparts ............................................................ 30 SECTION 5.07. Entire Agreement; Third-Party Beneficiaries.............................. 30 SECTION 5.08. Certain Obligations...................................................... 30 SECTION 5.09. Governing Law ........................................................... 31 SECTION 5.10. Assignment .............................................................. 31 SECTION 5.11. Enforcement; Consent to Service of Process............................... 31 SECTION 5.12. Extension; Waiver........................................................ 32
POST-CLOSING COVENANTS AGREEMENT dated as of July 24, 2003 (this "Agreement"), among ROCHE HOLDING LTD, a joint stock company organized under the laws of Switzerland ("Parent"), IGEN INTERNATIONAL, INC., a Delaware corporation (the "Company"), and IGEN INTEGRATED HEALTHCARE, LLC, a Delaware limited liability company ("Newco"). WHEREAS Parent, 66 ACQUISITION CORPORATION II, a Delaware corporation and a wholly owned subsidiary of Parent ("Sub"), the Company and Newco have entered into an Agreement and Plan of Merger dated as of the date of this Agreement (the "Merger Agreement"), providing for the Merger (as defined in the Merger Agreement); WHEREAS simultaneously with the execution and delivery of this Agreement, the Company and Newco are entering into a Restructuring Agreement, dated as of the date of this Agreement (the "Restructuring Agreement"), pursuant to which prior to the Effective Time (as defined in the Merger Agreement), among other things (a) the Newco Assets (as defined in the Restructuring Agreement) will be transferred to Newco or one or more of Newco's subsidiaries and (b) Newco or one or more of its subsidiaries will assume the Assumed Liabilities (as defined in the Restructuring Agreement); WHEREAS as a condition to their willingness to enter into the Merger Agreement and the Restructuring Agreement, the parties thereto have requested that the parties hereto enter into this Agreement; and WHEREAS the parties to this Agreement have determined that it is necessary and desirable to set forth certain agreements that will govern certain matters that may arise following the Effective Time. NOW, THEREFORE, in consideration of the foregoing, and the representations, warranties, covenants and agreements set forth herein, the parties hereto hereby agree as follows: 2 ARTICLE I Definitions SECTION 1.01. Definitions. Unless otherwise noted, terms used but not defined in this Agreement shall have the meanings set forth in the Merger Agreement or, if not set forth in the Merger Agreement, in the Restructuring Agreement. In addition, the following terms shall have the following meanings: "Action" shall have the meaning set forth in Section 3.07(c). "Business Day" shall mean any day other than a Saturday, Sunday and any day on which the banks in Germany, Switzerland or the United States or the federal courts in the United States are permitted or required by applicable Law to close. "Company Recourse Right" shall have the meaning set forth in Section 3.05(b). "Filings" shall mean the Proxy Statement, the Newco Form S-4, the Newco Form 8-A and any other document filed or required to be filed with the SEC by the Company or Newco in connection with the Transactions, or any preliminary or final form thereof or any amendment or supplement thereto. "Indemnifiable Losses" shall mean, subject to Section 2.04 and Section 2.05, all losses, Liabilities, damages, deficiencies, fines, expenses, Actions, demands, Judgments or settlements, whether or not resulting from Third Party Claims, including interest and penalties recovered by a third party with respect thereto and out-of-pocket expenses and reasonable attorneys' and accountants' fees and expenses incurred in the investigation or defense of any of the same or in asserting, preserving or enforcing any of an Indemnitee's rights hereunder, suffered or incurred by an Indemnitee. "Indemnifying Party" shall have the meaning set forth in Section 2.03(a). "Indemnitee" shall mean any of the Parent Indemnitees or the Newco Indemnitees, as the case may be, who or which may seek indemnification under this Agreement. 3 "PCR License Payment" shall mean the $50,000,000 payment due not later than two Business Days after the Effective Time pursuant to the PCR License Agreement. "Newco Indemnitees" shall mean Newco, each affiliate of Newco, including any of its direct or indirect subsidiaries, each of their respective Representatives and each of the heirs, executors, successors and assigns of any of the foregoing. "Newco Information" shall mean the Company Records and any and all information, technical data or know-how, whether written or oral (including that which relates to research, manufacturing, product plans, products, services, suppliers, customers, markets, software, developments, inventions, processes, designs, drawings, engineering, hardware configuration information, marketing, finances or individuals in the employment) of any Newco Company after giving effect to the Restructuring, that the Company or any of its affiliates (including Newco and its subsidiaries) or any of their respective Representatives furnishes or has furnished to Parent or any of its affiliates (collectively, the "receiving person") or any of their respective Representatives whether furnished orally or in writing or by any other means or gathered by inspection and regardless of whether the same is specifically marked or designated as "confidential" or "proprietary", together with any and all notes, memoranda, analyses, compilations, studies or other documents (whether in hard copy or electronic media) prepared by the receiving person or any of its Representatives which contain or otherwise reflect such Newco Information, together with any and all copies, extracts or other reproductions of any of the same; provided, however, that the term "Newco Information" does not include information that: (a) is or becomes generally available to the public through no wrongful act of the receiving person or its Representatives; or (b) is or becomes available to the receiving person on a non-confidential basis from a source other than (i) the Company or any of its affiliates, (ii) Newco or any of its affiliates or (iii) their respective Representatives, provided that such source is not known by the receiving person to be subject to a confidentiality agreement with the Company or any of its affiliates or Newco or any of its affiliates. 4 "Newco Recourse Right" shall have the meaning set forth in Section 3.05(a). "Newco Successor Company" shall have the meaning set forth in Section 3.04(a). "Parent Indemnitees" shall mean Parent, each affiliate of Parent, including any of its direct or indirect subsidiaries (including, after the Effective Time, the Company), each of their respective Representatives and each of the heirs, executors, successors and assigns of any of the foregoing. "Parent Information" shall mean the Company Records and any and all information, technical data or know-how, whether written or oral (including that which relates to research, manufacturing, product plans, products, services, suppliers, customers, markets, software, developments, inventions, processes, designs, drawings, engineering, hardware configuration information, marketing, finances or individuals in the employment) of Parent or any of its affiliates after giving effect to the Restructuring and the Merger, that Parent or any of its affiliates or any of their respective Representatives furnishes or has furnished to the Company (prior to the Effective Time), Newco or any of their respective affiliates (collectively, the "receiving person") or any of their respective Representatives whether furnished orally or in writing or by any other means or gathered by inspection and regardless of whether the same is specifically marked or designated as "confidential" or "proprietary", together with any and all notes, memoranda, analyses, compilations, studies or other documents (whether in hard copy or electronic media) prepared by the receiving person or any of its Representatives which contain or otherwise reflect such Parent Information, together with any and all copies, extracts or other reproductions of any of the same; provided, however, that the term "Parent Information" does not include information that: (a) is or becomes generally available to the public through no wrongful act of the receiving person or its Representatives; or (b) is or becomes available to the receiving person on a non-confidential basis from a source other than Parent or any of its affiliates or Representatives, provided that such source is not known by the receiving 5 person to be subject to a confidentiality agreement with Parent or any of its affiliates. "Parent Successor Company" shall have the meaning set forth in Section 3.04(b). "Prevailing Party" shall have the meaning set forth in Section 4.02. "Request" shall have the meaning set forth in Section 3.07(c). "Third Party Claim" shall have the meaning set forth in Section 2.03(a). ARTICLE II Indemnification SECTION 2.01. Indemnification by Newco. Subject to the provisions of this Article II, from and after the Effective Time Newco shall indemnify, defend and hold harmless the Parent Indemnitees from and against, and pay or reimburse the Parent Indemnitees for, all Indemnifiable Losses, as incurred, to the extent: (a) relating to or arising from the Newco Business, the Newco Assets or the Assumed Liabilities (including the failure by Newco or any Newco Company to pay, perform or otherwise discharge any of the Assumed Liabilities in accordance with their terms), whether such Indemnifiable Losses relate to or arise from events, occurrences, actions, omissions, facts or circumstances occurring, existing or asserted before, at or after the Effective Time; (b) relating to or arising from the Retained Contracts, whether such Indemnifiable Losses relate to or arise from events, occurrences, actions, omissions, facts or circumstances occurring, existing or asserted before, at or after the Effective Time; provided, however, that with respect to Indemnifiable Losses related to or arising from events, occurrences, facts or circumstances relating to or arising from actions or omissions by the Company occurring after the Effective Time, Newco shall not be liable to the extent such Indemnifiable Losses directly relate to or arise from actions or omissions by the Company that are 6 inconsistent in any respect with any written instruction from Newco with respect to such Retained Contract; (c) relating to or arising from any untrue or allegedly untrue statement of a material fact contained in any of the Filings by the Company prior to the Effective Time or by Newco at any time, or any omission to state therein a material fact relating to the Company or any Newco Company required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, but in each case not with respect to statements made therein or incorporated by reference therein based upon information supplied by Parent or any of its affiliates or any of their respective Representatives specifically for inclusion or incorporation by reference therein; (d) relating to or arising from the breach by any Newco Company of any agreement or covenant contained in any Transaction Agreement which is to be performed or complied with by it after the Effective Time; (e) relating to or arising from the breach by the Company or Newco prior to the Effective Time of any agreement or covenant contained in any Transaction Agreement which is to be performed or complied with by it prior to the Effective Time; (f) relating to or arising from the breach by the Continuing Licensee Subsidiary of any agreement or covenant contained in the License Agreement or the Covenants Not to Sue, in each case which is to be performed or complied with by it prior to the Effective Time; or (g) relating to or arising from any guarantee, performance bond or other Contract that Parent, any of its affiliates or the Company may be required to grant in favor of, or enter into with, any Governmental Entity, whether prior to, at or after the Effective Time, in connection with any Contract entered into prior to the Effective Time by the Company or any Company Subsidiary with any Governmental Entity. SECTION 2.02. Indemnification by Parent. Subject to the provisions of this Article II, from and after the Effective Time Parent shall indemnify, defend and hold harmless the Newco Indemnitees from and against, and 7 pay or reimburse the Newco Indemnitees, for all Indemnifiable Losses, as incurred, to the extent: (a) relating to or arising from the Continuing Company Business, the Continuing Company Assets or the Continuing Company Liabilities (including the failure by the Company to pay, perform or otherwise discharge any of the Continuing Company Liabilities in accordance with their terms), whether such Indemnifiable Losses relate to or arise from events, occurrences, actions, omissions, facts or circumstances occurring, existing or asserted before, at or after the Effective Time (other than Indemnifiable Losses that relate to or arise from (i) the Retained Contracts, which are the subject of Section 2.02(b), and (ii) the Transaction Agreements, which are the subject of Sections 2.02(d) and 2.02(e)); (b) relating to or arising from the Retained Contracts with respect to such Indemnifiable Losses relating to or arising from events, occurrences, facts or circumstances relating to or arising from actions or omissions by the Company occurring after the Effective Time that are inconsistent in any respect with any written instruction from Newco with respect to such Retained Contract; (c) relating to or arising from any untrue statement of a material fact contained in any of the Filings, or any omission or alleged omission to state therein 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, but only with respect to statements made therein or incorporated by reference therein based upon information supplied by Parent or any of its affiliates or any of their respective Representatives (including, after the Effective Time, the Company and the subsidiaries of the Company) specifically for inclusion or incorporation by reference therein; (d) relating to or arising from the breach by Parent or any of its affiliates (other than, prior to the Effective Time, the Company, Newco or any of their affiliates) of any agreement or covenant contained in any Transaction Agreement, whether such Indemnifiable Losses relate to or arise from events, occurrences, actions, omissions, facts or circumstances occurring, existing or asserted before, at or after the Effective Time; or 8 (e) relating to or arising from the breach by the Company of any agreement or covenant contained in any Transaction Agreement which is to be performed or complied with by it after the Effective Time. SECTION 2.03. Procedures Relating to Indemnification. (a) In order for an Indemnitee to be entitled to any indemnification provided for under this Agreement in respect of, arising out of or involving a claim made by any person who is not an Indemnitee against such Indemnitee (a "Third Party Claim"), such Indemnitee must notify the party who may become obligated to provide indemnification hereunder (the "Indemnifying Party") in writing, and in reasonable detail, of the Third Party Claim reasonably promptly, and in any event within 10 Business Days after receipt by such Indemnitee of written notice of the Third Party Claim; provided, however, that failure to give such notification shall not affect the indemnification provided hereunder except to the extent the Indemnifying Party shall have been actually and materially prejudiced as a result of such failure; provided further, however, that with respect to any Third Party Claim for which Newco is the Indemnifying Party, such Indemnifying Party shall be deemed to have received notice with respect to such Third Party Claim by or against the Company or any of its subsidiaries (other than the Newco Companies) for which the Company or any of its subsidiaries (other than the Newco Companies) received notice prior to the Effective Time. After any required notification (if applicable), the Indemnitee shall deliver to the Indemnifying Party, promptly after the Indemnitee's receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third Party Claim. (b) If a Third Party Claim is made against an Indemnitee, the Indemnifying Party will be entitled to participate in the defense thereof and, if it so chooses, to assume the defense thereof (at the expense of the Indemnifying Party) with counsel selected by the Indemnifying Party and reasonably satisfactory to the Indemnitee. Should the Indemnifying Party so elect to assume the defense of a Third Party Claim, the Indemnifying Party will not be liable to the Indemnitee for any legal expenses subsequently incurred by the Indemnitee in connection with the defense thereof. If the Indemnifying Party assumes such defense, the Indemnitee shall have the right to participate, at its own expense, in the defense 9 thereof solely to assert any additional defenses and to employ counsel, at its own expense, except as set forth below, separate from the counsel employed by the Indemnifying Party, it being understood that the Indemnifying Party shall control such defense. The Indemnifying Party shall be liable for the reasonable fees and expenses of counsel employed by the Indemnitee for any period during which the Indemnifying Party has not assumed the defense thereof (other than during any period in which the Indemnitee shall have failed to give notice of the Third Party Claim as provided above). Notwithstanding the foregoing, the Indemnifying Party shall not be entitled to assume the defense of any Third Party Claim (and shall not be liable for the fees and expenses of counsel incurred by the Indemnitee in defending such Third Party Claim, except for the reasonable fees and expenses of counsel selected by the Indemnifying Party and reasonably satisfactory to the Indemnitee) if the Third Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee which the Indemnitee reasonably determines, after conferring with its counsel, cannot be separated from any related claim for money damages. If such equitable or other relief portion of the Third Party Claim can be so separated from that for money damages, the Indemnifying Party shall be entitled to assume the defense of the portion relating to money damages. The indemnification required by Section 2.01 or 2.02, as the case may be, shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or the Indemnifiable Loss is incurred. If the Indemnifying Party chooses to defend or prosecute a Third Party Claim (i) all the parties hereto reasonably necessary or appropriate for such defense or prosecution shall cooperate in the defense or prosecution thereof, which cooperation shall include the retention in accordance with this Agreement and (upon the Indemnifying Party's request) the provision to the Indemnifying Party of records and information which are reasonably relevant to such Third Party Claim, (ii) the Indemnifying Party shall keep the Indemnitee reasonably informed of all significant developments in connection with the defense or prosecution of such Third Party Claim and (iii) the Indemnitee will agree to any settlement, compromise or discharge of such Third Party Claim which the Indemnifying Party may recommend (after representing to the Indemnitee that such settlement is reasonably likely to be acceptable to the 10 parties to the Third Party Claim) and which by its terms obligates the Indemnifying Party to pay the full amount of liability in connection with such Third Party Claim; provided, however, that, without the Indemnitee's consent (which consent shall not be unreasonably withheld, conditioned or delayed), the Indemnifying Party shall not consent to entry of any Judgment or enter into any settlement (x) that provides for injunctive or other nonmonetary relief affecting the Indemnitee or its properties or (y) that does not include as an unconditional term thereof the giving by each claimant or plaintiff to such Indemnitee of a release from all liability with respect to such claim; provided further, however, that if the Indemnitee does not consent to any settlement recommended by the Indemnifying Party (after representing to the Indemnitee that such settlement is reasonably likely to be acceptable to the parties to the Third Party Claim) then the Indemnifying Party (1) shall not in any event be obligated to indemnify the Indemnitee, or otherwise be responsible, for any amount in excess of the amount of the settlement so recommended by the Indemnifying Party and (2) shall be entitled to reimbursement of the fees and expenses of counsel incurred by the Indemnifying Party after the date on which the recommendation was made to the Indemnitee in the event the final and unappealable Judgment in such Third Party Claim exceeds the amount of the settlement so recommended. If the Indemnifying Party shall have assumed the defense of a Third Party Claim, the Indemnitee shall not admit any liability with respect to, or settle, compromise or discharge, such Third Party Claim without the Indemnifying Party's prior written consent. If the Indemnifying Party does not or is not entitled to assume the defense of a Third Party Claim, the Indemnitee may defend the same in such manner as it may deem appropriate; provided, however, that the Indemnitee shall not admit any liability with respect to, or settle, compromise or discharge such Third-Party Claim without the Indemnifying Party's prior written consent. (c) In order for an Indemnitee to be entitled to any indemnification provided for under this Agreement in respect of a claim that does not involve a Third Party Claim, the Indemnitee shall deliver notice of such claim (in reasonably sufficient detail to enable the Indemnifying Party to evaluate such claim) with reasonable promptness to the Indemnifying Party. The failure by any Indemnitee to give such notification shall not affect the indemnification 11 provided hereunder except to the extent that the Indemnifying Party shall have been actually and materially prejudiced as a result of such failure. If the Indemnifying Party does not notify the Indemnitee within 20 Business Days following its receipt of such notice that the Indemnifying Party disputes its liability with respect to such claim under Section 2.01 or 2.02, as the case may be, the claim shall be conclusively deemed a liability of the Indemnifying Party under Section 2.01 or 2.02, as the case may be, and the Indemnifying Party shall pay the amount of such liability to the Indemnitee on demand or, in the case of any notice in which the amount of the claim (or any portion thereof) is estimated, on such later date when the amount of such claim (or such portion thereof) becomes finally determined. If the Indemnifying Party has timely disputed its liability with respect to such claim, as provided above, the Indemnifying Party and the Indemnitee shall proceed in good faith to negotiate a resolution of such dispute and, if not resolved through negotiations, such dispute shall be resolved by litigation in an appropriate court of competent jurisdiction. (d) Notwithstanding any other provision of this Agreement, Newco acknowledges and agrees that Newco shall (solely at its own cost and expense) assume and continue the defense of the Newco Litigation and use its reasonable best efforts to defend any Parent Indemnitee and to cause any Parent Indemnitee to be dismissed with prejudice as a party to any Newco Litigation. SECTION 2.04. Certain Limitations. (a) The amount of any Indemnifiable Losses or other liability for which indemnification is provided under this Agreement shall be net of any amounts actually recovered by the Indemnitee from third parties (including amounts actually recovered under insurance policies) with respect to such Indemnifiable Losses. The Indemnitee shall use its reasonable best efforts to seek to obtain recovery in respect of any Indemnifiable Loss or such other liability under any available insurance policy. (b) No Indemnitee shall be entitled to indemnification provided for under this Agreement if the facts, events or other circumstances giving rise to the indemnification claim arose from or are related to (i) any breach of the representations, warranties, covenants or agreements of such Indemnitee or its affiliates in this Agreement or in any other Transaction Agreement (it being 12 understood that the representations, warranties, covenants and agreements of the Company in the Merger Agreement shall for the sole purpose of this Section 2.04(b) be deemed to have been given by Newco) or (ii) actions, omissions, inactions or disclosures taken or made by the Indemnitee or its affiliates. (c) All indemnification payments under this Agreement shall be reduced to take account of the present value of any net Tax benefit (including any current or future deductions, any reduction of income or gain upon a sale, disposition, conveyance, license or other similar transaction as a result of increased Tax basis, any Tax refunds received, any use of a credit of Taxes and any increase in the amount of losses, reliefs, allowances or other similar Tax attributes) realized by the Indemnitee in connection with or otherwise arising (directly or indirectly) from the incurrence of any Indemnifiable Loss. Upon the written request of the Indemnifying Party, the Indemnitee shall provide the amount of the Tax benefit realized by the Indemnitee in connection with or otherwise arising (directly or indirectly) from the incurrence of any Indemnifiable Loss together with reasonable detail with respect to such calculation. In computing the amount of any such Tax benefit, the Indemnitee shall be deemed to recognize all other items of income, gain, loss, deduction or credit before recognizing any item arising from the receipt of any indemnification payment hereunder or the incurrence or payment of any Indemnifiable Loss. The Indemnitee shall cooperate fully with all requests from the Indemnifying Party in connection with determining the present value of such net Tax benefit. (d) The amount of all indemnification obligations under this Agreement shall be calculated on an after-tax basis (without taking into account any net operating loss or other similar tax credit or item available to offset such amount). Any payments made to one party by another party pursuant to this Agreement shall be treated for all Tax purposes as nontaxable payments (dividends or capital contributions, as the case may be) made between Newco and the Company immediately prior to the Merger, unless, and then only to the extent, otherwise required by a Final Determination (as defined in the Tax Allocation Agreement). SECTION 2.05. Exclusivity of Tax Allocation Agreement. Except for Sections 2.04(c), 2.04(d) and 3.02 13 of this Agreement, and Sections 2.01(f), 4.19 and 7.08 of the Merger Agreement, the Tax Allocation Agreement shall be the exclusive agreement among the parties with respect to all Tax matters, including indemnification and any procedures in connection therewith. SECTION 2.06. Exclusivity of Remedies. From and after the Effective Time, the remedies provided for in this Article II shall, as between the parties, be the exclusive monetary remedies of the parties to this Agreement with respect to the Transaction Agreements, except if the indemnification for the Indemnifiable Losses provided for in this Article II is unavailable to any Indemnitee for any reason, the Indemnifying Party shall contribute to the amount paid or payable by such Indemnitee as a result of any Indemnifiable Losses in such proportion as is appropriate to reflect any relevant equitable considerations. Each party hereto agrees that the previous sentence shall not limit or otherwise affect any non-monetary right or remedy which any party to this Agreement may have under the Transaction Agreements or otherwise limit or affect any such party's right to seek equitable relief, including specific performance. For the avoidance of doubt, each party hereto agrees that this Article II shall not confer any (a) additional remedy on any person for any breach of any representation, warranty or covenant contained in any Commercial Agreement, except as provided in 2.01(f), and (b) remedy on any person for any breach of any covenant or agreement set forth in any Transaction Agreement that does not survive the Effective Time. ARTICLE III Other Agreements SECTION 3.01. Insurance. From the Effective Time until the expiration of such policies according to their terms, the Company shall use its reasonable best efforts to maintain in effect the insurance policies maintained by the Company immediately prior to the Effective Time (other than directors' and officers' liability insurance policies, which are the subject of Section 3.08(b)) for which premiums have been paid in full prior to the Effective Time and shall not take any action to surrender, terminate or otherwise limit the coverage thereof; provided, however, that in maintaining such policies, the Company shall not be required to make any expenditures or incur any Liabilities with respect to the 14 maintenance of such policies (other than any expenditures in connection with administering or making claims under such policies, which expenditures shall be reimbursed by Newco). In the event that any Newco Asset suffers any damage, destruction or other casualty loss, the Company shall surrender to Newco (a) all insurance proceeds received with respect to such damage, destruction or casualty loss and (b) all rights of the Company with respect to any causes of action in connection with such damage, destruction or casualty loss. The Company shall make available to the Newco Companies the benefit of any workers' compensation, general liability, product liability, automobile liability, umbrella (excess) liability or crime or other insurance policy covering or relating to the Newco Business, the Newco Assets or the Assumed Liabilities. The Company shall promptly pay to Newco all insurance proceeds relating to the Newco Business, the Newco Assets or the Assumed Liabilities received by the Company under any insurance policy. Nothing in this Section 3.01 shall (i) reduce, limit or otherwise affect the right of the Company to seek or obtain insurance proceeds with respect to any damage, destruction or casualty loss to or of a Continuing Company Asset, nor shall anything in this Section 3.01 reduce, limit or otherwise affect any of the rights of Newco or any other Newco Indemnitee set forth in Article II or (ii) require the Company to obtain any additional insurance with respect to any Newco Asset. SECTION 3.02. Characterization of Payments. The payments made pursuant to this Agreement shall be treated as occurring immediately before the Effective Time, and none of the Newco Companies, the Company and its subsidiaries and Parent and its subsidiaries or any affiliate of any of the foregoing shall take any position inconsistent with such treatment before any Taxing Authority (as defined in the Tax Allocation Agreement), except to the extent that a Final Determination with respect to the recipient party causes any such payment to not be so treated. SECTION 3.03. Agreement Not to Solicit Employees. (a) Parent understands that Newco shall be entitled to protect and preserve the going concern value of the Newco Business to the extent permitted by Law and that Newco would not have entered into this Agreement, the Restructuring Agreement, the Merger Agreement or the other 15 Transaction Agreements to which it is a party absent the provisions of this Section 3.03; provided, however, that this Section 3.03 shall not inure to the benefit of any person (or such person's affiliates other than Newco and its subsidiaries as of immediately prior to the date of such sale, conveyance, transfer, lease or acquisition) (i) to whom Newco sells, conveys, transfers or leases, in one transaction or a series of related transactions, directly or indirectly, all or substantially all of its assets or (ii) who acquires, in one transaction or a series of related transactions, directly or indirectly, more than a majority of the outstanding shares of Newco Common Stock whether by stock purchase, merger, share exchange or otherwise. (b) Parent agrees that for a period of two years from and after the Effective Time, it shall not, and shall not permit its subsidiaries to, directly or indirectly, solicit for employment any individual employed by any Newco Company or any of their respective divisions. Notwithstanding the foregoing, it shall not constitute a breach of the foregoing sentence if Parent or its subsidiaries make solicitations for employment by general advertisements in periodicals of broad distribution or other advertisement media of similar nature that are not specifically directed at Employees. SECTION 3.04. Successors. (a) Newco shall not consolidate with or merge with or into, or sell, convey, transfer or lease, in one transaction or a series of related transactions, all or substantially all of its assets to, any person, unless the resulting, surviving or transferee person (the "Newco Successor Company") shall expressly assume in writing all the obligations of Newco under this Agreement. Except as otherwise provided in Section 3.03(a), such Newco Successor Company shall be the successor to Newco and shall succeed to, and be substituted for, Newco under this Agreement, but in the case of a sale, conveyance, transfer or lease of less than substantially all of its assets, Newco shall not be released from its obligations hereunder. (b) Parent shall not consolidate with or merge with or into, or sell, convey, transfer or lease, in one transaction or a series of related transactions, all or substantially all of its assets to, any person, unless the resulting, surviving or transferee person (the "Parent Successor Company") shall expressly assume in writing all 16 the obligations of Parent under this Agreement. Such Parent Successor Company shall be the successor to Parent and shall succeed to, and be substituted for, Parent under this Agreement, but in the case of a sale, conveyance, transfer or lease of less than substantially all of its assets, Parent shall not be released from its obligations hereunder. SECTION 3.05. Third Party Rights; Notices. (a) In the event that after the Effective Time any of the Newco Companies holds any right to indemnification other than a right to indemnification under this Agreement or any other contractual or other right (collectively, a "Newco Recourse Right") with respect to any Continuing Company Liability or any Assumed Liability for which the Company is held responsible, then (i) to the extent possible such Newco Recourse Right shall be deemed to be held as a shared right of the applicable Newco Companies and the Company to the extent necessary to protect the Company against such Continuing Company Liability or such Assumed Liability and (ii) to the extent not so possible, Newco shall, or shall cause the applicable Newco Company to, assert or otherwise make available to the Company the full benefit of such Newco Recourse Right by making a claim on behalf of the Company or taking other steps reasonably requested by the Company. (b) In the event that after the Effective Time the Company holds any right to indemnification or any other contractual or other right (collectively, a "Company Recourse Right") with respect to any Assumed Liability or any Continuing Company Liability for which any of the Newco Companies are held responsible, then (i) to the extent possible such Company Recourse Right shall be deemed to be held as a shared right of the Company and the applicable Newco Companies to the extent necessary to protect the Newco Companies against such Assumed Liability or such Continuing Company Liability and (ii) to the extent not so possible, the Company shall assert or otherwise make available to the Newco Companies the full benefit of such Company Recourse Right by making a claim on behalf of the Newco Companies or taking other steps reasonably requested by the Newco Companies. (c) The Company hereby agrees to provide prompt written notice to Newco of any notice or other written communication received by the Company with respect to any 17 Retained Contract and a copy of such notice or other written communication. SECTION 3.06. Retention of Records. Except as provided in any of the Transaction Agreements and except for any records related to Taxes (as defined in the Tax Allocation Agreement) which are the subject of, and governed by, the Tax Allocation Agreement, if any Company Records (as defined in the Restructuring Agreement) are retained by the Company or a Newco Company, the Company shall, and Newco shall, and Newco shall cause the other Newco Companies to, retain all such Company Records in the Company's or Newco Companies' possession or under their respective control until such Company Records are at least six years old (or for such longer period as may be required by Law) except that if, prior to the expiration of such period, the Company or any Newco Company wishes to destroy or dispose of any such Company Records that are at least three years old, then prior to destroying or disposing of any of such Company Records, (a) the Company or Newco, as applicable, shall provide no less than 60 days' prior written notice to the other person, specifying the Company Records proposed to be destroyed or disposed of, and (b) if, prior to the scheduled date of such destruction or disposal, the other person requests in writing that any of the Company Records proposed to be destroyed or disposed of be delivered to such other person, the Company or Newco, as applicable, promptly shall arrange for the delivery of the requested Company Records to a location specified by, and at the expense of, the requesting person. SECTION 3.07. Confidentiality; Preservation of Privilege; Access. (a) (i) Parent shall keep, and shall cause its affiliates and Representatives to keep, the Newco Information strictly confidential and will disclose such Newco Information only to such of its affiliates and Representatives who need to know such Newco Information and who agree to be bound by this Section 3.07 and agree not to disclose such Newco Information to any other person. Without the prior written consent of Newco, Parent shall not, and Parent shall cause each other receiving person and their respective Representatives not to, disclose the Newco Information to any person except as may be required by Law or judicial process and in accordance with this Section 3.07. (ii) Newco shall keep, and shall cause its affiliates and Representatives to keep, the Parent Information strictly confidential and will disclose such 18 Parent Information only to such of its affiliates and Representatives who need to know such Parent Information and who agree to be bound by this Section 3.07 and agree not to disclose such Parent Information to any other person. Without the prior written consent of Parent, Parent shall not, and shall cause each other receiving person and their respective Representatives not to disclose the Parent Information to any person except as may be required by Law or judicial process and in accordance with this Section 3.07. (b) (i) In the event that any receiving person or any of its Representatives receives a request or is required by Law or judicial process to disclose to a court or other tribunal all or any part of the Newco Information, such receiving party or its Representatives shall promptly notify Newco of the request in writing, and consult with and assist Newco in seeking a protective order or request for other appropriate remedy. In the event that such protective order or other remedy is not obtained or Newco waives compliance with the terms of this Section 3.07, such receiving party or its Representatives, as applicable, shall disclose only that portion of the Newco Information or facts which it determines in good faith, after consultation with outside counsel, is legally required to be disclosed, and will exercise its reasonable best efforts to assure that confidential treatment will be accorded such Newco Information or facts by the persons or entities receiving the same. Newco will be given an opportunity to review the Newco Information or facts prior to disclosure. (ii) In the event that any receiving person or any of its Representatives receives a request or is required by Law or judicial process to disclose to a court or other tribunal all or any part of the Parent Information, such receiving party or its Representatives shall promptly notify Parent of the request in writing, and consult with and assist Parent in seeking a protective order or request for other appropriate remedy. In the event that such protective order or other remedy is not obtained or Parent waives compliance with the terms of this Section 3.07, such receiving party or its Representatives, as applicable, shall disclose only that portion of the Parent Information or facts which it determines in good faith, after consultation with outside counsel, is legally required to be disclosed, and will exercise its reasonable best efforts to assure that confidential treatment will be accorded such Parent Information or facts by the persons or entities 19 receiving the same. Parent will be given an opportunity to review the Parent Information or facts prior to disclosure. (c) Each party to this Agreement shall, promptly (and in any event within 10 Business Days of such receipt) upon its receipt or the receipt by any of its affiliates of a request or requirement (by oral questions, interrogatories, requests for documents, Parent Information or Newco Information, as applicable, subpoenas, civil investigative demands or other similar processes) reasonably regarded as calling for the inspection or production of any documents or other Parent Information or Newco Information, as applicable, which relates to the business or operations of any other party to this Agreement (a "Request"), notify the party to this Agreement whose documents, Parent Information or Newco Information, as applicable, is the subject of such Request. The preceding sentence shall apply regardless of whether the person delivering the Request is a party in the claim, suit, action, arbitration, inquiry, investigation or other proceeding of any nature (whether criminal, civil, legislative, administrative, regulatory, prosecutorial or otherwise) by or before any arbitrator or Governmental Entity or similar person or body (each, an "Action"), to which the Request relates. In addition to complying with the applicable provisions of Section 3.07(b), each party shall use reasonable best efforts to assert and maintain, or cause its affiliates to assert and maintain, any applicable claim to privilege, immunity, confidentiality or protection in order to protect such documents and other Parent Information or Newco Information, as applicable, from disclosure, and shall use reasonable best efforts to seek to condition any disclosure which may be required on such protective terms as it may reasonably determine to be appropriate. Following the receipt of the notice described in the first sentence of this Section 3.07(c), no party may waive an applicable privilege without the prior written consent of the affected party to this Agreement (or any affected affiliate or affiliates of any such party) except, in the opinion of such party's counsel, as required by Law. (d) From and after the Effective Time, Newco shall, and shall cause each Newco Company to, afford to Parent, and to Parent's Representatives, reasonable access during normal business hours to documents within the possession or control of any Newco Company that were Assets of the Company transferred to Newco in the Restructuring 20 (other than any Asset that constitutes a Company Record), to the extent such access is reasonably required for the purposes of defending any Action commenced or threatened in writing against the Company (other than any Action which arose or resulted from or is related to any breach of any Transaction Agreement or in which the Company and Newco's interests are adverse) directly relating to the business, Assets (other than Intellectual Property Rights or any Asset related thereto) or Liabilities of the Company as they existed immediately prior to giving effect to the Restructuring; provided, however, that such access will not unreasonably interfere with the normal operations of any Newco Company and the reasonable out-of-pocket expenses of any Newco Company incurred in connection therewith will be paid by Parent; provided further, however, that any Newco Company may withhold (i) any document that (A) the disclosure of which would violate any Contract with a third party or any applicable Law or Judgment or would result in the waiver of any legal privilege or work-product protection (provided that such Newco Company shall have used its reasonable best efforts to obtain a Consent or waiver from such third party or to establish a joint-defense privilege to the extent it is reasonably available, as applicable; provided, however, that such Newco Company shall not be required to pay or commit to pay any amount to (or incur any obligation in favor of) any person from whom such Consent or waiver may be required) or (B) otherwise relates to any Action between the Newco and any of its affiliates, on the one hand, and the Company and any of its affiliates, on the other hand, or (ii) such documents or portions of documents that Newco determines in good faith, after consultation with outside counsel, should not be disclosed in order to ensure compliance with antitrust or other similar Law or Judgment. For the avoidance of doubt, all documents provided to Parent, or Parent's Representatives pursuant to this Section 3.07(e) shall be subject to Parent's obligations with respect to Newco Information contained in paragraphs (a) and (b) of Section 3.07. (e) Each of the parties to this Agreement hereby agrees that (i) nothing in this Section 3.07 shall override any confidentiality obligation owed by it or its affiliates pursuant to any Commercial Agreement and (ii) in the event of a conflict between the confidentiality provisions set forth in any Commercial Agreement, on the one hand, and 21 this Agreement, on the other hand, the provisions set forth in the applicable Commercial Agreement shall govern. SECTION 3.08. Indemnification; Certain Claims. (a) To the fullest extent permitted by Law, Parent shall cause the Company to honor all its obligations to indemnify (including any obligations to advance funds for expenses) the current or former directors or officers of the Company for acts or omissions by such directors or officers occurring prior to the Effective Time to the fullest extent that such obligations of the Company exist on the date of this Agreement pursuant to the Company Charter, the Company By-laws or individual indemnity agreements and such obligations shall survive the Merger and shall continue in full force and effect in accordance with their respective terms until the expiration of the applicable statute of limitations with respect to any claims against such directors or officers arising out of such acts or omissions. (b) From the Effective Time until the sixth anniversary of the Effective Time, Parent shall cause to be maintained in effect the current policies of directors' and officers' liability insurance maintained by the Company (provided that Parent may cause to be substituted therefor policies with reputable and financially sound carriers of at least the same coverage and amounts containing terms and conditions which are no less advantageous) with respect to claims arising from or related to facts or events which occurred at or before the Effective Time; provided that in satisfying its obligation under this Section 3.08(b), Parent shall not be obligated to pay premiums in excess of 250% of the amount per annum required to be paid by the Company in the twelve months ending December 12, 2003, which amount is set forth in clause (x) of Section 6.01 (introductory paragraph) of the Company Disclosure Letter; and provided, further, that if the annual premiums of such insurance exceed such amount, Parent shall nevertheless obtain such insurance; provided that Newco shall pay the Company the amount of any premiums in excess of 250% of the amount per annum required to be paid by the Company in the twelve months ending December 12, 2003. (c) Parent shall not permit the Company to amend or repeal any provision of the Company Charter or Company By-laws after the Effective Time if such action would adversely affect the rights of individuals who on or prior to the Effective Time were entitled to advances, 22 indemnification or exculpation thereunder for actions or omissions by such individuals prior to the Effective Time. The individuals referred to in the preceding sentence shall include any individuals who served as of the Effective Time as directors or officers of any subsidiary of the Company at the Company's request, it being acknowledged by the parties hereto that each director or officer of the Company who is currently serving as a director or officer of a subsidiary of the Company is doing so at such request of the Company. (d) In the event the Company or any successor to the Company (i) consolidates with or merges into any other person and shall not be the continuing or surviving corporation or entity in such consolidation or merger or (ii) transfers all or substantially all its properties and assets to any person, then, and in each case, proper provision shall be made so that the successors to the Company or the successors of any successor to the Company, as the case may be, honor the obligations of the Company set forth in this Section 3.08. For the avoidance of doubt, this Section 3.08(d) shall similarly apply to successive consolidations, mergers and transfers. (e) Following the Effective Time, Parent shall not, and Parent shall not permit the Company or any other affiliate of Parent or encourage any other person to, assert any rights or pursue any Action, whether directly or on a derivative basis, against (i) the Company or any of its affiliates or Newco or any of its affiliates or (ii) any of the current or former directors, officers, members of the board of managers, members, managers, consultants, advisors, attorneys, trustees, agents or individuals in the employment of the Company or any of its affiliates or of Newco or any of its affiliates (in each case, solely in their capacities as such), in each case for acts or omissions occurring prior to the Effective Time, whether known or unknown, and Parent shall not, and Parent shall not permit the Company or any other affiliate of Parent to, cooperate with any person in the assertion of any such rights or pursuing any such Action except (x) as required by subpoena or other judicial or legal process or (y) as required by any inquiry by a Governmental Entity, but in each case only to the extent such inquiry or requirement to cooperate has not arisen as a result of a breach of this Section 3.08(e); provided, however, that this Section 3.08(e) shall not (A) affect any person's 23 right to enforce any Transaction Agreement, any Commercial Agreement, any Newco I/R Agreement or any agreement entered into between the Company, Newco or any of their respective affiliates, on the one hand, and any of the R Parties or any of their respective affiliates, on the other hand, after the date of this Agreement but prior to the Effective Time or any provision herein or therein in accordance with its terms, (B) apply to any act or omission which constitutes fraud in the inducement with respect to any of the Transaction Agreements or any of the Commercial Agreements, (C) apply to any action permitted or required by Section 3.12 or (D) apply to any action permitted or required by the Ongoing Litigation Agreement; provided further, however, that in the event this Agreement is terminated, this Section 3.08(e) shall be null and void and shall not operate as a waiver or release of any rights or Actions that might have been asserted or pursued but for this Section 3.08(e). Following the Effective Time, Parent shall, and shall cause the Company and its other affiliates to, cooperate with the current and former directors, officers, members of the board of managers, members, managers, consultants, advisors, agents and individuals in the employment of the Company and Newco in seeking the dismissal of any derivative suits or other suits for or on behalf of shareholders of the Company pending as of the Effective Time. (f) Following the Effective Time, Newco shall not, and shall not permit any Newco Company or any affiliate of Newco or encourage any other person to, assert any rights or pursue any Action, whether directly or on a derivative basis, against (i) Parent or any of its affiliates or (ii) any of the current or former directors, officers, members of the board of managers, members, managers, consultants, advisors, attorneys, trustees, agents or individuals in the employment of Parent or any of its affiliates (in each case, solely in their capacities as such), in each case for acts or omissions occurring prior to the Effective Time, whether known or unknown, and Newco shall not, and shall not permit any Newco Company or any affiliate of Newco to, cooperate with any person in the assertion of any such rights or pursuing any such Action except (x) as required by subpoena or other judicial or legal process or (y) as required by any inquiry by a Governmental Entity, but in each case only to the extent such inquiry or requirement to cooperate has not arisen as a result of a breach of this Section 3.08(f); provided, 24 however, that this Section 3.08(f) shall not (A) affect any person's right to enforce any Transaction Agreement, any Commercial Agreement, any Newco I/R Agreement or any agreement entered into between the Company, Newco or any of their respective affiliates, on the one hand, and any of the R Parties or any of their respective affiliates, on the other hand, after the date of this Agreement but prior to the Effective Time or any provision herein or therein in accordance with its terms, (B) apply to any act or omission which constitutes fraud in the inducement with respect to any of the Transaction Agreements or any of the Commercial Agreements, (C) apply to any action permitted or required by Section 3.12 or (D) apply to any action permitted or required by the Ongoing Litigation Agreement; provided further, however, that in the event this Agreement is terminated, this Section 3.08(f) shall be null and void and shall not operate as a waiver or release of any rights or Actions that might have been asserted or pursued but for this Section 3.08(f). SECTION 3.09. Public Announcements. As of and after the Effective Time, Parent and its subsidiaries, including the Company, on the one hand, and Newco and its subsidiaries, on the other hand, shall consult with each other before issuing, and provide each other the opportunity to review and comment upon, any press release or other public statements with respect to the Merger or the other Transactions, and shall not issue any such press release or make any such public statement prior to such consultation, except as may be required by applicable Law, court process or by obligations pursuant to any listing agreement with any national securities exchange. SECTION 3.10. Standstill. From the Effective Time to the fourth anniversary of the Effective Time, Parent shall not, and Parent shall not permit any of its affiliates to, in any manner, whether publicly or otherwise, directly or indirectly, in each case, without the prior written approval of Newco (a) acquire, agree to acquire or make any proposal to acquire, directly or indirectly, any securities or assets of Newco or any subsidiary of Newco, except at the unsolicited specific written request of Newco, (b) propose to enter into, directly or indirectly, any tender or exchange offer, merger or other business combination or similar transaction involving Newco or any subsidiary of Newco, except at the unsolicited specific written request of Newco, (c) form, 25 join or in any way participate in a "group" (within the meaning of Section 13(d)(3) of the Exchange Act) with respect to any securities of Newco or any subsidiary of Newco, (d) enter into any discussions, negotiations, arrangements, understandings or agreements (whether written or oral) with any other person (other than financial advisors) regarding any possible purchase or sale of any securities or assets of Newco or any subsidiary of Newco, (e) make, or in any way participate, directly or indirectly, in any "solicitation" of "proxies" (as such terms are used in the proxy rules of the SEC) to vote, or seek to advise or influence any person with respect to the voting of, any securities of Newco or any subsidiary of Newco, (f) call, or seek to call, a meeting of Newco's shareholders or initiate or propose any shareholder proposal or execute any written consent with respect to Newco, (g) otherwise act, alone or in concert with others, to seek or attempt to control or influence the management, Board of Directors of Newco or policies of Newco (except to the extent conduct or settlement of litigation between R Diagnostics and the Company might be deemed such an attempt), (h) disclose any intention, plan or arrangement inconsistent with the foregoing or (i) advise, assist or encourage any other persons in connection with any of the foregoing. During the applicable period covered by this Section 3.10, Parent shall not, and Parent shall not permit any of its affiliates to, without the prior consent of Newco (i) request, directly or indirectly, that Newco or any of its Representatives amend or waive any provisions of this Section 3.10 (including this sentence) or (ii) take any action which could reasonably be expected to require Newco to make a public announcement regarding the possibility of a business combination, merger or similar transaction other than the Merger, the other Transactions and the transactions contemplated by the Commercial Agreements. SECTION 3.11. Transferred Customers. From and after the Effective Time, Newco shall assume the Company's rights and benefits under Article X of the Supply, Services and Support Agreement dated as of May 1, 2000 (the "Supply, Services and Support Agreement"), between the Company and R Diagnostics with respect to matters that occurred prior to the Effective Time. SECTION 3.12. New Patent Litigation. Promptly after the Effective Time, Parent shall cause R Diagnostics 26 to comply with its obligations under Section 2.4(b) of the Ongoing Litigation Agreement. SECTION 3.13. I/R Agreements. Notwithstanding anything to the contrary contained in this Agreement, no amendment, modification or waiver with respect to any I/R Agreement entered into after the Effective Time shall result in any Liability for Indemnifiable Losses or otherwise for Newco unless Newco consents in writing to such amendment, modification or waiver. SECTION 3.14. PCR License Payment. Newco hereby agrees to make the PCR License Payment in accordance with the PCR License Agreement and the PCR Services Agreement. ARTICLE IV Mutual Releases SECTION 4.01. Mutual Releases. Effective immediately prior to the Effective Time, in consideration of mutual releases, covenants, licenses, agreements, rights and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Parent, as to itself and its past, present and future affiliates (including, from and after the Effective Time, the Company), and its and their respective successors, predecessors, assigns, heirs, officers, directors, members of the board of managers, members, managers, employees, consultants and trustees, on the one hand (in each case, solely in their capacities as such), and each of the Company and Newco, as to itself and its past, present and future affiliates, and its and their respective successors, predecessors, assigns, heirs, officers, directors, members of the board of managers, members, managers, employees, consultants and trustees, on the other hand (in each case, solely in their capacities as such), hereby (a) releases, acquits and forever discharges the other and its past, present and future affiliates and its and their respective successors, predecessors, assigns, heirs, officers, directors, members of the board of managers, members, managers, employees, consultants and trustees (in each case, solely in their capacities as such), in respect of and from, and (b) agrees not to bring any Action against the other and its past, present and future affiliates and its and their respective successors, predecessors, assigns, heirs, officers, directors, members of the board of managers, members, managers, employees, consultants and 27 trustees (in each case, solely in their capacities as such) related to or arising our of, in the case of each of clause (a) and (b), any and all debts, demands, Actions, causes of action, suits, accounts, covenants, Contracts, agreements, torts, damages and any and all claims, defenses, offsets, Judgments, demands and Liabilities whatsoever, of every name and nature, both at law and in equity, known or unknown, suspected or unsuspected, accrued or unaccrued, which have been or could have been asserted against such other person, which the releasing person has or ever had which arise out of or in any way relate or are incidental to events, circumstances or actions taken by such other person prior to or as of the Effective Time; provided, however, that the foregoing general release shall not (i) affect any person's right to enforce any Transaction Agreement, any Commercial Agreement, any Newco I/R Agreement or any agreement entered into between the Company, Newco or any of their respective affiliates, on the one hand, and any of the R Parties or any of their respective affiliates, on the other hand, after the date of this Agreement but prior to the Effective Time or any provision herein or therein, in each case in accordance with its terms or (ii) apply to any act or omission which constitutes fraud in the inducement with respect to any Transaction Agreement or any Commercial Agreement. SECTION 4.02. Enforcement of Article IV. In the event of any Action, at law or in equity, among the parties to this Agreement (including, for purposes of this Section 4.02, affiliates, successors, assigns, heirs, officers, directors, members of the board of managers, members, managers, employees, consultants and trustees, in each case, covered by Section 4.01, that are third party beneficiaries under Section 5.07) in which a party to such Action (the "Prevailing Party") obtains a final and nonappealable order of a court of competent jurisdiction that provides or states that the other party breached Section 4.01, then the Prevailing Party shall be entitled to reimbursement from the other party of its legal fees and expenses incurred in such Action. ARTICLE V Miscellaneous and General SECTION 5.01. Effectiveness; Modification or Amendment. The parties hereto agree that (a) Sections 4.01 and 4.02 will become effective immediately prior to the 28 Effective Time and (b) each other provision of this Agreement will become effective at the Effective Time and, for the avoidance of doubt, references to the Company in such other provisions shall mean the Company after the Effective Time. The parties hereto may modify or amend this Agreement only by written agreement executed and delivered by duly authorized officers of the respective parties. SECTION 5.02. Termination. In the event the Merger Agreement is terminated pursuant to its terms prior to the Effective Time, this Agreement shall automatically and simultaneously terminate. In the event of such termination, no party shall have any liability to any other party pursuant to this Agreement. It is understood that consummation of the Merger shall not constitute a termination of this Agreement. SECTION 5.03. Notices. All notices, requests, claims, demands and other communications under this Agreement shall be in writing and shall be deemed given upon receipt by the parties at the following addresses (or at such other address for a party as shall be specified by like notice) of a fax followed by delivery of such notice by overnight courier (such courier being of an international reputation): (a) if to the Company (from and after the Effective Time) or to Parent, to Roche Holding Ltd Grenzacherstrasse 124 CH-4070 Basel Switzerland Attention: Bruno Maier Fax: +41 61 688 3196 with a copy to: Davis Polk & Wardwell 450 Lexington Avenue New York, NY 10017 Attention: Ulrika Ekman Fax: (212) 450-3800 29 (b) if to the Company (prior to the Effective Time) or to Newco, to IGEN International, Inc. 16020 Industrial Drive Gaithersburg, MD 20877 Attention: President Fax: (301) 208-3789 with a copy to: Cravath, Swaine & Moore LLP 825 Eighth Avenue New York, NY 10019 Attention: Philip A. Gelston Sarkis Jebejian Fax: (212) 474-3700 SECTION 5.04. Interpretation. When a reference is made in this Agreement to a Section, Exhibit, Schedule or party, such reference shall be to a Section of, or an Exhibit, Schedule or party to, this Agreement unless otherwise indicated. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words "include", "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation". The words "hereof", "herein", "hereby" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The words "date hereof" shall refer to the date of this Agreement. The term "or" is not exclusive. The word "extent" in the phrase "to the extent" shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply "if". The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms. Any agreement or instrument defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement or instrument as from time to time amended, modified or supplemented. References to a person are also to its permitted successors and assigns. 30 SECTION 5.05. Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any applicable Law, or public policy, all other conditions 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 to the end that transactions contemplated hereby are fulfilled to the extent possible. SECTION 5.06. 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 parties. Each party need not sign the same counterpart. SECTION 5.07. Entire Agreement; Third-Party Beneficiaries. This Agreement taken together with the other Transaction Agreements, the Commercial Agreements and the Letter Agreement constitutes the entire agreement, and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof and thereof. Except for the provisions of Article II, Section 3.08 and Article IV, nothing contained in this Agreement is intended to confer upon any person other than the parties hereto and their respective successors and permitted assigns, any benefit, right or remedy under or by reason of this Agreement, provided however, that any claim under Article II by a Parent Indemnitee or a Newco Indemnitee, as the case may be, that is not a party to this Agreement shall be brought on behalf of such Parent Indemnitee or Newco Indemnitee, as the case may be, by the party to this Agreement from which such Indemnitee's status as a Parent Indemnitee or Newco Indemnitee is derived. SECTION 5.08. Certain Obligations. Whenever this Agreement requires any of the subsidiaries of any party to take any action, this Agreement will be deemed to include an undertaking on the part of such party to cause such subsidiary to take such action; provided, however, for 31 the avoidance of doubt, at any time after the Effective Time, the Newco Companies shall not be considered to be subsidiaries of the Company. SECTION 5.09. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof. SECTION 5.10. Assignment. Except as provided in Section 3.04, neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned, in whole or in part, by operation of law or otherwise, by any of the parties without the prior written consent of the other parties. Any purported assignment without such consent shall be void; provided, however, the parties acknowledge and agree that the conversion of Newco in accordance with Section 2.01 of the Restructuring Agreement and the continuation of Newco as a result thereof shall be deemed not to be an assignment and shall not require any consent of any party. Except as otherwise provided in Section 3.03(a), subject to the preceding sentences, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and assigns. SECTION 5.11. Enforcement; Consent to Service of Process. (a) The parties agree that irreparable damage would occur and that the parties would not have any adequate remedy either pursuant to the indemnification provisions of Section 2.01 or 2.02, as the case may be, or at law in the event that any of the provisions of this Agreement, including Section 3.03, were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in any New York state court or any Federal court located in the State of New York, this being in addition to any other remedy to which they are entitled at law or in equity. In addition, each of the parties hereto (i) consents to submit itself to the personal jurisdiction of any New York state court or any Federal court located in the State of New York in the event any dispute arises out of this Agreement, (ii) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any 32 such court, (iii) agrees that it will not bring any Action relating to this Agreement in any court other than any New York state court or any Federal court located in the State of New York and (iv) waives any right to trial by jury with respect to any Action related to or arising out of this Agreement. (b) Parent hereby appoints the Authorized Agent as its authorized agent upon whom process may be served in any Action arising out of or relating to this Agreement or any Transaction that may be instituted in any court described in Section 5.11(a). Parent agrees to take any and all reasonable action, including the filing of any and all documents, that may be necessary to establish and continue such appointment in full force and effect as aforesaid. Parent agrees that service of process upon the Authorized Agent shall be, in every respect, effective service of process upon Parent. SECTION 5.12. Extension; Waiver. At any time the parties may (a) extend the time for the performance of any of the obligations or other acts of the other parties or (b) waive compliance with any of the agreements or conditions contained herein. Any agreement on the part of a party to any such extension or waiver shall be valid only if set forth in an instrument in writing 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 such rights. 33 IN WITNESS WHEREOF, Parent, the Company and Newco have duly executed and delivered this Agreement, all as of the date first herein above written. ROCHE HOLDING LTD, By /s/ D. Franz B. Humer ____________________________________ Name: D. Franz B. Humer Title: President and Chairman By /s/ Erich Hunziker ____________________________________ Name: Erich Hunziker Title: Chief Financial Officer IGEN INTERNATIONAL INC., By /s/ Samuel J. Wohlstadter ____________________________________ Name: Samuel J. Wohlstadter Title: Chairman and Chief Executive Officer IGEN INTEGRATED HEALTHCARE, LLC, By /s/ Richard J. Massey ____________________________________ Name: Richard J. Massey Title: President and Chief Operating Officer EX-99.4 6 y88675exv99w4.txt TAX ALLOCATION AGREEMENT EXHIBIT 99.4 EXECUTION VERSION ================================================================================ TAX ALLOCATION AGREEMENT Dated as of July 24, 2003, Among ROCHE HOLDING LTD, 66 ACQUISITION CORPORATION II, IGEN INTERNATIONAL, INC. And IGEN INTEGRATED HEALTHCARE, LLC ================================================================================ TABLE OF CONTENTS
Page ---- ARTICLE I Definitions ARTICLE II Preparation and Filing of Tax Returns SECTION 2.01. Tax Returns for Pre-Merger Periods and Straddle Periods ..................... 8 SECTION 2.02. Tax Returns for a Taxable Period Ending After the Effective Time (Other than Straddle Periods) ................................................. 9 SECTION 2.03. Manner of Tax Return Preparation ............................................ 9 SECTION 2.04. Transfer Tax Returns ........................................................ 9 SECTION 2.05. Amended Returns and Claims for Refund ....................................... 10 ARTICLE III Payment and Liability for Taxes SECTION 3.01. Payment and Liability for Taxes ............................................. 10 SECTION 3.02. Distribution Gain Payment ................................................... 12 SECTION 3.03. Payment and Liability for Transfer Taxes .................................... 12 SECTION 3.04. Tax Obligations Arising Under a Pre-Merger Period Tax Sharing Agreement ..... 13 ARTICLE IV Representations and Covenants SECTION 4.01. Representations of Parent and the Company ................................... 13 SECTION 4.02. Covenants of Parent and the Company ......................................... 14 SECTION 4.03. Covenants of Newco .......................................................... 15 SECTION 4.04. Consistent Tax and Regulatory Reporting ..................................... 15 SECTION 4.05. Representation of Newco ..................................................... 16
i ARTICLE V Indemnification; Tax Proceedings; Cooperation and Exchange of Information; Disputes SECTION 5.01. Indemnification for Breach of Representations and Covenants.................. 16 SECTION 5.02. Tax Proceedings.............................................................. 16 SECTION 5.03. Indemnification Payments..................................................... 18 SECTION 5.04. Cooperation and Exchange of Information...................................... 19 SECTION 5.05. Retention of Information..................................................... 20 SECTION 5.06. Disputes..................................................................... 20 ARTICLE VI Miscellaneous and General SECTION 6.01. Modification or Amendment ................................................... 21 SECTION 6.02. Termination ................................................................. 21 SECTION 6.03. Notices ..................................................................... 22 SECTION 6.04. Interpretation .............................................................. 23 SECTION 6.05. Severability ................................................................ 23 SECTION 6.06. Counterparts ................................................................ 24 SECTION 6.07. Entire Agreement; Third-Party Beneficiaries ................................. 24 SECTION 6.08. Certain Obligations ......................................................... 24 SECTION 6.09. Governing Law ............................................................... 24 SECTION 6.10. Assignment .................................................................. 24 SECTION 6.11. Enforcement; Consent to Service of Process .................................. 25 SECTION 6.12. Extension; Waiver ........................................................... 25
TAX ALLOCATION AGREEMENT dated as of July 24, 2003 (this "Agreement"), among ROCHE HOLDING LTD, a joint stock company organized under the laws of Switzerland ("Parent"), 66 ACQUISITION CORPORATION II, a Delaware corporation and a direct wholly owned subsidiary of Parent ("Sub"), IGEN INTERNATIONAL, INC., a Delaware corporation (the "Company"), and IGEN INTEGRATED HEALTHCARE, LLC, a Delaware limited liability company and a direct wholly owned subsidiary of the Company ("Newco" and, collectively with Parent, Sub and the Company, the "Companies"). WHEREAS, as of the date of this Agreement, the Company is the common parent of an affiliated group of domestic corporations (the "Company Consolidated Group") within the meaning of Section 1504(a) of the Internal Revenue Code of 1986, as amended (the "Code"), including Newco and its direct and indirect subsidiaries, which has elected to file consolidated Federal income Tax Returns (as defined in Article I); WHEREAS the Company, Roche Diagnostics GmbH, a German limited liability company ("R Diagnostics"), and Roche Diagnostics Corporation, an Indiana corporation ("R Corp"), are entering into an agreement (the "Ongoing Litigation Agreement") pursuant to which, among other things, R Diagnostics and R Corp shall make several payments to the Company; WHEREAS the Company and Newco are entering into an agreement (the "Restructuring Agreement") pursuant to which, prior to the Effective Time (as defined in Article I), the Restructuring (as defined in Article I) will be effected, as part of which certain of the assets and liabilities of the Company will be transferred to Newco or one or more of Newco's subsidiaries; WHEREAS, the respective Boards of Directors of the Company and Parent have proposed to cause the merger of Sub with and into the Company (the "Merger") at the Effective Time in accordance with the Agreement and Plan of Merger dated as of the date of this Agreement (the "Merger Agreement") among the Companies and R Company; WHEREAS, the Companies and R Company intend to treat the exchange of Company Common Stock (as defined in Article I) for cash and the exchange of Company Common Stock for Newco Common Stock (as defined in Article I) pursuant to the Merger as a single integrated transaction comprising a taxable sale or exchange of Company Common Stock as described in Section 1001 of the Code and a complete redemption of the remaining Company Common Stock owned by the relevant shareholders within the meaning of Section 302(b)(3) of the Code, respectively; WHEREAS, the Companies have determined and agreed that, as a result of the Merger, for U.S. Federal income tax purposes (i) the Company Consolidated Group will cease to exist on the Closing Date (as defined in Article I) and (ii) the Company Consolidated Group's tax year will end on the Closing Date; WHEREAS, immediately after the Closing Date, the Company will become a direct, wholly owned subsidiary of Parent; and WHEREAS, the Companies desire on behalf of themselves, their subsidiaries, and their successors to set forth their rights and obligations with respect to Taxes (as defined in Article I) relating to taxable periods before and after the Merger. NOW, THEREFORE, in consideration of foregoing, and of the representations, warranties, covenants and agreements set forth herein, the Companies (each on behalf of itself, each of its subsidiaries as of the date of this Agreement, its future subsidiaries and its successors) hereby agree as follows: ARTICLE I Definitions The following terms shall have the following meanings: 2 "Agreement" is defined in the preamble. "Closing Date" is defined in the Merger Agreement. "Code" is defined in the recitals. "Companies" is defined in the preamble. "Company" is defined in the preamble. "Company Attributes" is defined in Section 3.01(c) of this Agreement. "Company Consolidated Group" is defined in the recitals. "Company Common Stock" is defined in the Merger Agreement. "Company Group" means (i) the corporations that are members of the Company Consolidated Group and (ii) the corporations that would be members of the Company Consolidated Group but for the fact they are not includible corporations under Section 1504(b) of the Code. "Confidentiality Agreement" is defined in the Merger Agreement. "Covered ECL Technology" is defined in the Merger Agreement. "Distribution Gain Payment" shall mean the amount equal to the product of (A) the excess, if any, of (i) the First Day Trading Value over (ii) the sum of $100 million and the Newco Cash Amount multiplied by (B) 40%; provided, however, the Distribution Gain Payment shall not exceed $20 million. "Due Date" shall mean, with respect to any Tax Return or payment, the date on which such Tax Return is due to be filed with, or such payment is due to be made to, the appropriate Taxing Authority pursuant to applicable law, giving effect to any applicable extensions of the time for such filing or payment. 3 "Effective Time" is defined in the Merger Agreement. "Final Determination" means the final resolution of liability for any Tax for any taxable period by or as a result of: (i) a final and unappealable decision, judgment, decree or other order by any court of competent jurisdiction; (ii) a final settlement with the IRS, a closing agreement or accepted offer in compromise under Sections 7121 or 7122 of the Code or a comparable agreement under the laws of other jurisdictions, in each case which resolves the entire Tax liability for any taxable period; (iii) any allowance of a refund or credit in respect of an overpayment of Tax, but only after the expiration of all periods during which such refund may be recovered by the jurisdiction imposing the Tax; or (iv) any other final disposition, including, without limitation, by reason of the expiration of the applicable statute of limitations. "First Day Trading Value" means the product of (A) the average of the high and low trading price for a share of Newco Common Stock on the first full day of trading after the Merger and (B) the number of shares of Newco Common Stock distributed. "Governmental Entity" is defined in the Merger Agreement. "Group" means the Company Group, the Post-Merger Company Group, or the Newco Group, as applicable. "Indemnifying Party" is defined in Section 5.02(a) of this Agreement. "Indemnitee" is defined in Section 5.02(a) of this Agreement. "Indemnity Issue" is defined in Section 5.02(a) of this Agreement. "Intended Tax Treatment" is defined in Section 4.04 of this Agreement. "IRS" means the United States Internal Revenue Service. 4 "Letter Agreement" means the letter agreement dated November 6, 2002, between R Diagnostics and the Company. "License Agreement" is defined in the Restructuring Agreement. "Loan" is defined in the Merger Agreement. "Merger" is defined in the recitals. "Merger Agreement" is defined in the recitals. "Neutral Expert" is defined in Section 5.06 of this Agreement. "Newco" is defined in the preamble. "Newco Cash Amount" means the amount equal to the cash and cash equivalents as reflected on Newco's balance sheet, as measured immediately after the Effective Time. "Newco Common Stock" is defined in the Merger Agreement. "Newco Group" means Newco and each corporation that is, immediately after the Merger, a direct or indirect subsidiary of Newco. "Non-Transaction Taxes" means Taxes other than (i) Transaction Taxes and (ii) Transfer Taxes. "Ongoing Litigation Agreement" is defined in the recitals. "Parent" is defined in the preamble. "Person" means any individual, firm, corporation partnership, company, limited liability company, trust, joint venture, association, Governmental Entity or other entity. "Post-Merger Company Group" means (i) any affiliated group of corporations within the meaning of Section 1504(a) of the Code (or any other similar state, local or foreign law) of which the Company or any 5 subsidiary of the Company (or any successor thereto) is or has been a member or files or is required to file an affiliated, consolidated, combined, unitary or aggregate Tax Return at any time after the Closing Date or (ii) in the event that no group as described in the immediately preceding clause (i) exists, then the group of corporations comprised of the Company (or any successor thereto) and its direct and indirect subsidiaries. "Post-Merger Period" means any taxable period beginning after the Closing Date and, in the case of any Straddle Period, that portion of such Straddle Period that begins on the day immediately following the Closing Date. "Post-Signing Tax Returns" means any Tax Return of any member of the Company Group that is required to be filed during the period commencing on the first day after the date of this Agreement and ending on the Closing Date. "Pre-Merger Period" means any taxable period beginning on or before the Closing Date and, in the case of any Straddle Period, that portion of such Straddle Period ending on and including the Closing Date. "Preliminary Transactions" means (i) the Loan and (ii) any transaction undertaken by any member or members of the Company Group to prepare for the Restructuring or Merger. "R Corp" is defined in the recitals. "R Diagnostics" is defined in the recitals. "Responsible Party" is defined in Section 2.04 of this Agreement. "Restructuring" is defined in the Restructuring Agreement. "Restructuring Agreement" is defined in the recitals. "Straddle Period" means any taxable period that begins on or before and ends after the Closing Date. "Sub" is defined in the preamble. 6 "Surviving Corporation" is defined in the Merger Agreement. "Tax Controversy" is defined in Section 5.02(a) of this Agreement. "Taxes" means (i) all forms of taxation or duties imposed, or required to be collected or withheld, including, without limitation, charges, together with any related interest, penalties or other additional amounts, (ii) liability for the payment of any amount of the type described in the preceding clause (i) as a result of being a member of an affiliated, consolidated, combined or unitary group, and (iii) liability for the payment of any amounts as a result of being party to any tax sharing agreement (other than this Agreement) or as a result of any express or implied obligation to indemnify any other person with respect to the payment of any amount described in the immediately preceding clauses (i) or (ii) (other than an obligation to indemnify under this Agreement). "Taxing Authority" means the IRS and any other state, local, foreign or other Governmental Entity responsible for the administration of Taxes. "Tax Return" means any return, filing, report, questionnaire, information statement or other document required to be filed, including amended returns that may be filed, for any taxable period with any Taxing Authority (whether or not a payment is required to be made with respect to such filing). "Tax Ruling" means a private letter ruling issued by the IRS. "Transaction Agreements" is defined in the Merger Agreement. "Transaction Taxes" means any Taxes directly or indirectly resulting from, arising in connection with or otherwise related to (i) any of the actions taken pursuant to the Ongoing Litigation Agreement, (ii) the Preliminary Transactions, (iii) the Restructuring or (iv) the Merger; provided, however, Transaction Taxes does not include Transfer Taxes. 7 "Transactions" is defined in the Merger Agreement. "Transfer Taxes" is defined in the Merger Agreement. "Treasury Regulations" means the regulations promulgated from time to time under the Code as in effect for the relevant taxable period. "Underpayment Rate" means, with respect to Federal Taxes, the interest rate specified in Section 6621(a)(2) of the Code and, with respect to any other Tax, the interest rate specified in applicable law with respect to such Tax. ARTICLE II Preparation and Filing of Tax Returns SECTION 2.01. Tax Returns for Pre-Merger Periods and Straddle Periods. (a) Except as set forth in Section 2.01(b) of this Agreement, the Company shall prepare and timely file (or cause to be prepared and timely filed) all Tax Returns of each member of the Company Group for any Pre-Merger Period or Straddle Period; provided, however, in the case of any Post-Signing Tax Return (i) the Company shall deliver (or cause to be delivered) any such Post-Signing Tax Return to Parent at least 20 days before it is due, (ii) Parent shall have the right to examine and comment on such Post-Signing Tax Return prior to the filing thereof and (iii) Parent shall provide the Company with any such comments, in writing, no later than five days before such Post-Signing Tax Return is due. Similar provisions shall apply with respect to any consolidated, combined, unitary, or aggregate state, local, or foreign income Tax Return for any Pre-Merger Period or Straddle Period that includes any member of the Company Group or Post-Merger Company Group. (b) Newco shall, with respect to any Pre-Merger Period or Straddle Period, prepare (or cause to be prepared) and file (or cause to be filed) all separate state, local or foreign Tax Returns of each member of the Newco Group and any consolidated, 8 combined, unitary or aggregate state, local, or foreign Tax Returns that do not include any member of the Company Group or Post-Merger Company Group. SECTION 2.02. Tax Returns for a Taxable Period Ending After the Effective Time (Other than Straddle Periods). In the case of any Tax Return for any Post-Merger Period (other than a Straddle Period, which shall be governed by Section 2.01 of this Agreement), such Tax Returns shall be prepared and filed by the Company (or by Parent on behalf of the Company) if they relate to any member of the Post-Merger Company Group and by Newco if they relate to any member of the Newco Group. No party shall have any responsibility for preparing (or causing to be prepared) or filing (or causing to be filed) any Tax Return with respect to any member that is not a member of its Group. SECTION 2.03. Manner of Tax Return Preparation. All Tax Returns described in this Article II shall be prepared (i) in a manner consistent, and in accordance with, the representations, warranties, covenants, agreements and statements set forth in this Agreement (including, without limitation, Section 4.04 of this Agreement) and the other Transaction Agreements and (ii) in a manner consistent, and in accordance with, the applicable taxpayer's prior methods, practices and procedures (except to the extent that departure from such methods, practices and procedures (X) would be required, in the written opinion of nationally recognized Tax counsel, by a change in relevant Tax law or (Y) would not adversely affect another party to this Agreement). Notwithstanding the previous sentence, Tax Returns shall be prepared in the manner required by, and in accordance with, any applicable Final Determination. SECTION 2.04. Transfer Tax Returns. Any Tax Return with respect to any Transfer Tax incurred in connection with the Transactions shall be prepared and filed by the party (whether such party is Parent, the Company, Sub, the Surviving Corporation, or Newco (or any party related to, or affiliate of, any of the foregoing)) ordinarily responsible therefor under applicable law (in each case, the "Responsible Party"). Each Responsible Party shall use its reasonable best efforts to avail itself 9 of any available exemption or exemptions from any Transfer Taxes. Each of Parent, the Company, Sub, the Surviving Corporation and Newco (and any party related to, or affiliate of, any of the foregoing) shall use its reasonable best efforts to cooperate with, and assist, any Responsible Party described in the immediately preceding sentence in the preparation of any such Tax Return, including, without limitation, to furnish or otherwise provide such Responsible Party with information or documentation that may be reasonably necessary to obtain any exemption described in the immediately preceding sentence. SECTION 2.05. Amended Returns and Claims for Refund. Neither Parent nor any member of the Post-Merger Company Group (nor any entity that directly or indirectly controls the Company) shall amend (or cause or permit to be amended) a Tax Return or file (or cause or permit to be filed) a claim for Tax refund with respect to any Tax Return described in Section 2.01(a) of this Agreement without the prior written consent of Newco. ARTICLE III Payment and Liability for Taxes SECTION 3.01. Payment and Liability for Taxes. (a) The Company (or Parent) shall remit (or cause to be remitted) in a timely manner to the appropriate Taxing Authority all Taxes due in respect of any Tax for which the Company is required to file a Tax Return (as prepared in accordance with Section 2.03 of this Agreement and taking into account Section 3.01(c) of this Agreement) pursuant to Section 2.01(a) of this Agreement. Parent and the Company shall be liable for, shall, jointly and severally, indemnify each member of the Newco Group against, and shall be entitled to receive and retain all refunds of, all Taxes (other than Transfer Taxes, the responsibility for which is prescribed in Section 3.03 of this Agreement) of each member of the Company Group for, or attributable to, all 10 Pre-Merger Periods; provided, however, Newco shall be liable for, shall indemnify Parent and each member of the Company Group against, and shall be entitled to receive and retain all refunds of all Non-Transaction Taxes of each member of the Company Group for, or attributable to, all Pre-Merger Periods, except to the extent that such Non-Transaction Taxes arise or result from, or otherwise relate to, any actions, inactions, omissions or disclosures taken or made by Parent (or any party related to Parent) or, after the Closing Date, by the Company or any member of the Post-Merger Company Group, except for actions, inactions, omissions or disclosures required by (X) any Transaction Agreement or (Y) applicable United States law. For the avoidance of doubt, Parent and the Company shall be solely liable for, shall, jointly and severally, indemnify each member of the Newco Group against, and shall be entitled to receive and retain all refunds of all Transaction Taxes. (b) Newco shall remit (or cause to be remitted) in a timely manner to the appropriate Taxing Authority all Taxes due in respect of any Tax for which Newco is required to file a Tax Return pursuant to Section 2.01(b) of this Agreement. Newco shall be liable for, shall indemnify each member of the Company Group against, and shall be entitled to receive and retain all refunds of all Non-Transaction Taxes of each member of the Newco Group for all Tax periods. Parent and the Company shall be liable for, shall indemnify each member of the Newco Group against and retain all refunds of all Taxes of each member of the Post-Merger Company Group for all Post-Merger Periods. (c) For purposes of this Agreement, including for purposes of computing the respective amounts of Taxes for which the Company, on the one hand, and Newco, on the other hand, will be responsible hereunder, the Companies agree that any and all losses, credits, allowances or other similar Tax attributes of, or allocated under applicable Tax law to, the Company (or any member of the Company Group) arising in, or attributable to, any Pre-Merger Period (collectively, "Company Attributes") shall be used first to offset income, profits or gains of the Company (or any member of the Company Group) that arise in, or are attributable to, any Pre-Merger Period and that do not directly or indirectly result from, arise in connection with or otherwise relate to the Preliminary Transactions, the Restructuring or the Merger. For the avoidance of doubt, any Company Attributes remaining after the application of the immediately preceding 11 sentence shall be used by the Company (or any member of the Company Group or Post-Merger Company Group) to offset (i) income, profits or gains that give rise to any Transaction Taxes and (ii) income, profits or gains that arise in, or are attributable to, any Post-Merger Period. (d) (i) To the extent permitted by law or administrative practice, the taxable year of any member of the Company Group that includes the Effective Time shall be treated as closing on (and including) the Closing Date. The parties hereto agree that Treasury Regulations Section 1.1502-76(b)(1)(ii)(B) shall not apply to any transaction directly or indirectly resulting from, arising in connection with or otherwise related to the Preliminary Transactions, the Restructuring or the Merger. (ii) Where it is necessary to apportion between Newco, on the one hand, and the Company, on the other hand, the Tax liability of an entity for a Straddle Period which is not treated under this Section 3.01(d) as closing on the Closing Date, such liability shall be apportioned between the Pre-Merger Period and the Post-Merger Period on the basis of a "deemed" interim closing of the books, except that Taxes (such as real property Taxes) imposed on a periodic basis shall be allocated on a daily basis. For the avoidance of doubt, Parent and the Company shall be solely liable for, shall, jointly and severally, indemnify each member of the Newco Group against, and shall be entitled to receive and retain all refunds of all Transaction Taxes. SECTION 3.02. Distribution Gain Payment. Notwithstanding anything to the contrary in this Agreement, Newco will pay to the Company the Distribution Gain Payment in accordance with the principles of Sections 5.03(a) and 5.03(b) of this Agreement. SECTION 3.03. Payment and Liability for Transfer Taxes. Notwithstanding anything to the contrary in this Agreement, the Responsible Party shall remit (or cause to be remitted) in a timely manner to the appropriate Taxing 12 Authority all Transfer Taxes. In any case where any member of the Newco Group is the Responsible Party, Parent and the Company will be liable for, shall, jointly and severally, indemnify each member of the Newco Group against, and shall be entitled to receive refunds of one-half of the applicable Transfer Taxes. In the case where a member of the Newco Group is not the Responsible Party, Newco will be liable for, shall indemnify Parent and each member of the Company Group against, and shall be entitled to receive refunds of one-half of the applicable Transfer Taxes. SECTION 3.04. Tax Obligations Arising Under a Pre-Merger Period Tax Sharing Agreement. Except as set forth in this Agreement, any and all existing Tax sharing agreements, arrangements, understandings and practices regarding Taxes and their payment, allocation or sharing between any member of the Company Group and any member of the Newco Group shall be terminated as of the Effective Time and no remaining liabilities thereunder shall exist thereafter. This Section 3.04 does not address Tax sharing agreements (if any) solely among members of the Newco Group or solely among members of the Company Group. ARTICLE IV Representations and Covenants SECTION 4.01. Representations of Parent and the Company. Each of Parent and the Company, jointly and severally, represents and warrants to Newco that, as of the date of this Agreement, there is no plan or intention to: (a) liquidate any of the members of the Company Group (as comprised immediately before the Effective Time) or merge or consolidate any of such persons with any other person subsequent to the Merger; or (b) sell, dispose or cease to use and exploit the assets of any member of the Company Group (as comprised immediately before the Effective Time) subsequent to the Merger, except in the ordinary course of business; or (c) take any position on any Tax Return, take any action, omit to take any action or enter into any 13 transaction that is inconsistent with the Intended Tax Treatment. SECTION 4.02. Covenants of Parent and the Company. (a) Each of Parent and the Company agrees not to take, and not to permit (or cause) any member of the Post-Merger Company Group to take, any action that would cause the Company to be actually or constructively liquidated within two years of the Effective Time. (b) Each of Parent and the Company agrees that on or after the Closing Date, the Company shall not, and shall not permit any member of the Post-Merger Company Group to, make or change any tax election, change any accounting method, amend any Tax Return or take any position on any Tax Return, take any action, omit to take any action or enter into any transaction that results in a material increase in Tax liability of the Company with respect to any Pre-Merger Period. (c) Notwithstanding Section 4.01(a) of this Agreement, Parent, the Company and the members of the Post-Merger Company Group shall be permitted to take an action inconsistent with the provisions of Section 4.02(a) of this Agreement if, prior to taking such action, the Company: (i) provides notification to Newco of its plans with respect to such action, and promptly responds to any inquiries by Newco following such notification; and (ii) obtains and provides to Newco either: (A) a Tax Ruling to the effect that such action shall not cause any of the Transactions to be taxable (directly or indirectly) to Newco or the historic shareholders of the Company in a manner other than the Intended Tax Treatment, or (B) an opinion, in form and substance acceptable to Newco in its sole discretion, of Cravath, Swaine & Moore LLP (or of other independent counsel that is nationally 14 recognized as being expert in Federal Tax matters and is acceptable to Newco in its sole discretion) to the effect that such action shall not cause any of the Transactions to be taxable to Newco or the historic shareholders of the Company in a manner other than the Intended Tax Treatment. SECTION 4.03. Covenants of Newco. Newco agrees that on or after the Closing Date, Newco shall not, and shall not permit any member of the Newco Group to, without the consent of the Company (which consent shall not be unreasonably withheld, condition or delayed) make or change any tax election, change any accounting method, amend any Tax Return or take any position on any Tax Return, take any action, omit to take any action or enter into any transaction that results in a material increase in Tax liability or a reduction of any Tax attribute of the Company, except for actions, inactions or omissions required by (X) any Transaction Agreement or (Y) applicable United States law. SECTION 4.04. Consistent Tax and Regulatory Reporting. Parent, Sub, the Company and Newco each agree to report the Transactions as follows, for all Tax purposes (including, without limitation, all U.S. Federal income Tax purposes) and all other regulatory or other reporting purposes (the "Intended Tax Treatment"): (a) the Restructuring, including, without limitation, the transfer to Newco of the Covered ECL Technology subject to the License Agreement, will be reported as a transaction described in Section 351 of the Code whereby the Company will receive solely Newco Common Stock; (b) the exchange of Company Common Stock for cash and the exchange of Company Common Stock for Newco Common Stock, each pursuant to the Merger, will be reported as a single integrated transaction comprising a taxable sale or exchange of Company Common Stock as described in Section 1001 of the Code and a complete redemption of the remaining Company Common Stock owned by the relevant 15 shareholders within the meaning of Section 302(b)(3) of the Code, respectively. SECTION 4.05. Representation of Newco. Newco represents and warrants to Parent and the Company that, as of the date of this Agreement, there is no plan or intention to take any position on any Tax Return, take any action, omit to take any action or enter into any transaction that is inconsistent with the Intended Tax Treatment. ARTICLE V Indemnification; Tax Proceedings; Cooperation and Exchange of Information; Disputes SECTION 5.01. Indemnification for Breach of Representations and Covenants. Subject to the provisions of this Article V, Parent and the Company shall, jointly and severally, indemnify, defend and hold harmless Newco from and against, and pay or reimburse Newco for, all liabilities for Taxes as incurred relating to or arising from the breach by Parent or the Company of any of the representations or covenants set forth in Article IV of this Agreement. Subject to the provisions of this Article V, Newco shall indemnify, defend and hold harmless Parent or the Company from and against, and pay or reimburse Parent or the Company for, all liabilities for Taxes as incurred relating to or arising from the breach by Newco of any of the representations or covenants set forth in Article IV of this Agreement. The obligations to indemnify and hold harmless pursuant to this Section 5.01 shall terminate at the time the applicable statutes of limitations with respect to the Taxes in question expire (giving effect to any extension thereof); provided, however, that such obligations to indemnify and hold harmless shall not terminate with respect to any item as to which the person to be indemnified shall have, before the expiration of the applicable period, previously made a claim to the other party. SECTION 5.02. Tax Proceedings. (a) Notification. Within 15 days after a party (the "Indemnitee") becomes aware of the existence of a Tax issue (an "Indemnity Issue") that may give rise to an 16 indemnification claim under Article III or Section 5.01 of this Agreement (a "Tax Controversy"), by it against the other party (the "Indemnifying Party"), the Indemnitee shall promptly notify the Indemnifying Party of the Indemnity Issue, and thereafter shall promptly forward to the Indemnifying Party copies of notices and communications with a Taxing Authority relating to such Tax Controversy (including, without limitation, any IRS revenue agent's reports or similar reports, notices of proposed adjustment, or notices of deficiency). (b) Control of Tax Proceedings. The Indemnifying Party may elect to control, and may elect to have sole discretion in handling, settling or contesting any audit inquiry, information request, audit proceedings, suit, contest or any other action with respect to a Tax Controversy for which it would be required to indemnify the other party if it acknowledges in writing that it has sole liability for any Taxes that might arise in such proceeding. Notwithstanding anything to the contrary herein, the Indemnifying Party shall, upon the written request of the Indemnitee, keep the Indemnitee informed of all material developments relating to the applicable Tax Controversy and the Indemnitee may, at its own cost and expense and with its own counsel, monitor and participate in (but not control) the defense of such applicable Tax Controversy. The Indemnifying Party shall not admit any liability with respect to, or settle, compromise or discharge, any Tax proceeding with respect to a Tax Controversy on a basis that would adversely affect the Indemnitee without obtaining the Indemnitee's written consent, which consent shall not be unreasonably withheld, conditioned or delayed; provided, however, if the Indemnitee unreasonably withholds such consent to any such settlement, compromise or discharge recommended by the Indemnifying Party, then the Indemnifying Party (i) shall not in any event be obligated to indemnify the Indemnitee, or otherwise be responsible, for any amount in excess of the amount of the settlement, compromise or discharge so recommended by the Indemnifying Party and (ii) shall be entitled to reimbursement of the fees and expenses of counsel incurred by the Indemnifying Party after the date on which the recommendation was made to the 17 Indemnitee in the event the final and unappealable judgment in such Tax Controversy exceeds the amount of the settlement, compromise or discharge so recommended. The Indemnitee shall not admit any liability with respect to, or settle, compromise or discharge, any Tax Controversy without obtaining the Indemnifying Party's written consent, which consent shall not be unreasonably withheld, conditioned or delayed. Any out-of-pocket costs incurred in handling, settling or contesting a Tax Controversy shall be borne by the Indemnifying Party. SECTION 5.03. Indemnification Payments. (a) If an Indemnitee has a claim for an indemnification payment from an Indemnifying Party under this Agreement, the Indemnitee shall promptly provide to the Indemnifying Party notice of such claim, including a description of such claim and a detailed calculation of the amount of the indemnification payment that is claimed. The Indemnifying Party shall pay the amount of such indemnification obligation to the Indemnitee no later than 10 business days prior to the Due Date for the payment of the relevant Tax or 10 business days after the Indemnifying Party receives the Indemnitee's calculations of the Indemnifying Party's indemnification obligation hereunder, whichever occurs last, unless the Indemnifying Party reasonably disputes the amount of, or its liability for, such payment. Interest shall accrue with respect to any indemnification payment (including, without limitation, any disputed payment that is ultimately required to be made) not made within the period provided for payment, at the Underpayment Rate in effect under the Code at such time. (b) The amount of all indemnification obligations under this Agreement (other than the Distribution Gain Payment) shall be calculated on an after-tax basis (without taking into account any net operating loss or other similar tax credit or item available to offset such amount). Any payments made to one party by another party pursuant to this Agreement shall be treated for all Tax purposes as nontaxable payments (distributions or capital contributions, as the case may be) made immediately prior to the Merger, unless, and then only to the extent, otherwise required by a Final Determination. 18 (c) All indemnification payments under this Agreement shall be reduced to take account of the present value of any net Tax benefit (including, but not limited to, any current or future deductions, any reduction of income or gain upon a sale, disposition, conveyance, license or other similar transaction as a result of increased Tax basis, any Tax refunds received, any use of a credit of Taxes and any increase in the amount of losses, reliefs, allowances or other similar Tax attributes) realized by the Indemnitee in connection with or otherwise arising (directly or indirectly) from a Tax Controversy. Upon the written request of the Indemnifying Party, the Indemnitee shall provide the amount of the Tax benefit realized by the Indemnitee in connection with or otherwise arising (directly or indirectly) from a Tax Controversy together with reasonable detail with respect to such calculation. In computing the amount of any such Tax benefit, the Indemnitee shall be deemed to recognize all other items of income, gain, loss, deduction or credit before recognizing any item arising from the receipt of any indemnification payment hereunder or from a Tax Controversy. The Indemnitee shall cooperate fully with all commercially reasonable requests from the Indemnifying Party in connection with determining the present value of such net Tax benefit. SECTION 5.04. Cooperation and Exchange of Information. (a) Each member of the Company Group, Post-Merger Company Group, and the Newco Group shall cooperate fully with all reasonable requests from the other party in connection with the preparation and filing of Tax Returns, claims for refund, and Tax proceedings concerning issues or other matters covered by this Agreement. Such cooperation shall include, without limitation: (i) the retention until the expiration of the applicable statute of limitations (taking into account any extensions or waivers thereof), and the provision upon request, of Tax Returns, books, records (including, without limitation, information regarding ownership and Tax basis of property), documentation and other information relating to the Tax Returns, including accompanying schedules, related work papers, and 19 any other documents relating to rulings or other determinations by Taxing Authorities; (ii) the execution of any document that may be necessary or reasonably helpful in connection with any Tax proceeding, or the filing of a Tax Return or refund claim by a member of the Company Group or Newco Group, including certification, to the best of a party's knowledge, of the accuracy and completeness of the information it has supplied; and (iii) the use of the parties' reasonable best efforts to obtain any documentation that may be necessary or reasonably helpful in connection with any of the foregoing. Each party shall use its reasonable best efforts to make its employees and facilities available on a reasonable and mutually convenient basis in connection with the foregoing matters. (b) If a party fails to comply with any of its obligations set forth in Section 5.04(a) of this Agreement upon reasonable request and notice by the other party, and such failure results in the imposition of additional Taxes, the nonperforming party shall be liable in full for such additional Taxes. SECTION 5.05. Retention of Information. Without limiting Section 5.04(a)(i) of this Agreement, if a party wishes to dispose of documentation of the Company or Newco or any member of its respective Group, including, without limitation, books, records, Tax Returns and all supporting schedules and information relating thereto after the expiration of the applicable statute of limitations (taking into account any extensions or waivers thereof), then it shall provide written notice to the other party describing the documentation to be destroyed or disposed of 60 days prior to taking such action. The other party may arrange to take delivery of the documentation described in the notice at its expense during the succeeding 60-day period. SECTION 5.06. Disputes. If the parties disagree as to the calculation of any Tax or the amount of (but not 20 liability for) any payment to be made under this Agreement, the parties shall cooperate in good faith to resolve any such dispute, and any agreed-upon amount shall be promptly paid to the appropriate party. If the parties are unable to resolve such dispute within 30 days thereafter, such dispute shall be resolved by a nationally recognized law firm or independent accounting firm mutually acceptable to the Company and Newco or, if the Company and Newco are not able to so agree within 10 days after the end of such 30-day period, then the Company and Newco shall each select such a firm and such firms shall jointly select a third nationally recognized law firm or independent accounting firm to resolve the disputed matter (such firm or firms, the "Neutral Expert"). In all cases, the firm (or, if applicable, each of the firms) selected to serve as the Neutral Expert shall designate a partner who has had no prior contact with either party to receive and review any and all submissions from the parties. The parties shall instruct the Neutral Expert to render its decision in written form and as promptly as practicable, but in no event later than 45 days after its selection. The decision of the Neutral Expert shall be final and binding. The fees and expenses incurred in connection with such decision shall be shared by the Company and Newco in proportion to the final allocation of the Tax liability in dispute. Following the decision of the Neutral Expert, the parties shall each take (or cause to be taken) any action that is necessary or appropriate to implement such decision, including the filing of amended Tax Returns. ARTICLE VI Miscellaneous and General SECTION 6.01. Modification or Amendment. The parties hereto may modify or amend this Agreement only by written agreement executed and delivered by duly authorized officers of all of the respective parties hereto. SECTION 6.02. Termination. In the event the Merger Agreement is terminated pursuant to its terms prior to the Effective Time, this Agreement shall automatically and simultaneously terminate. In the event of such termination, no party shall have any liability to any other party pursuant to this Agreement. It is understood that 21 the consummation of the Merger shall not constitute a termination of this Agreement. SECTION 6.03. Notices. All notices, requests, claims, demands and other communications under this Agreement shall be in writing and shall be deemed given upon receipt by the parties at the following addresses (or at such other address for a party as shall be specified by like notice) (a) if to the Company (from and after the Effective Time) or to Parent or Sub, to Roche Holdings LTD Grenzaherstrasse 124 CH - 4070 Basel Switzerland Attention: Bruno Maier Fax: 41-616883196 with a copy to: Davis Polk & Wardwell 450 Lexington Avenue New York, NY 10017 Attention: Ulrika Ekman Fax: (212) 450-3800 (b) if to the Company (prior to the Effective Time) or to Newco, to IGEN International, Inc. 16020 Industrial Drive Gaithersburg, MD 20877 Attention: President Fax: (301) 208-3789 with a copy to: Cravath, Swaine & Moore LLP 825 Eighth Avenue 22 New York, New York 10019 Attention: Philip A. Gelston Sarkis Jebejian Fax: (212) 474-3700 SECTION 6.04. Interpretation. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words "include", "includes" or "including" are used in this Agreement, they shall not be deemed to be followed by the words "without limitation", unless so specified. The words "hereof", "herein", "hereby" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The words "date hereof" shall refer to the date of this Agreement. The term "or" is not exclusive. The word "extent" in the phrase "to the extent" shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply "if". The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms. Any agreement or instrument defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement or instrument as from time to time amended, modified or supplemented. References to a person are also to its permitted successors and assigns. SECTION 6.05. Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any applicable Law, or public policy, all other conditions 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 to the end that transactions contemplated hereby are fulfilled to the extent possible. 23 SECTION 6.06. 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 parties. Each party need not sign the same counterpart. SECTION 6.07. Entire Agreement; Third-Party Beneficiaries. This Agreement taken together with the other Transaction Agreements, the Confidentiality Agreement and the Letter Agreement 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 and thereof. Except for Section 3.01(a), Section 3.01(b), Section 3.03, Section 5.04 and Section 5.05 of this Agreement, nothing contained in this Agreement is intended to confer upon any person or entity other than the parties hereto and their respective successors and permitted assigns, any benefit, right or remedy under or by reason of this Agreement. SECTION 6.08. Certain Obligations. Whenever this Agreement requires any of the subsidiaries of any party to take any action, this Agreement will be deemed to include, without limitation, an undertaking on the part of such party to cause such subsidiary to take such action; provided, however, for the avoidance of doubt, at any time after the Effective Time, Newco and its subsidiaries shall not be considered to be subsidiaries of the Company. SECTION 6.09. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof. SECTION 6.10. Assignment. Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned, in whole or in part, by operation of law or otherwise by any of the parties without the prior written consent of the other parties. Any purported assignment without such consent shall be void; provided, however, the parties acknowledge and agree that the conversion of Newco in accordance with Section 2.01 of the Restructuring Agreement and the 24 continuation of Newco as a result thereof shall be deemed not to be an assignment and shall not require any consent of any party. 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. SECTION 6.11. Enforcement; Consent to Service of Process. 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 or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in any New York state court or any Federal court located in the State of New York, this being in addition to any other remedy to which they are entitled at law or in equity. In addition, each of the parties hereto (i) consents to submit itself to the personal jurisdiction of any New York state court or any Federal court located in the State of New York in the event any dispute arises out of this Agreement or any Transaction, (ii) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, (iii) agrees that it will not bring any action relating to this Agreement or any Transaction in any court other than any New York state court or any Federal court sitting in the State of New York and (iv) waives any right to trial by jury with respect to any action related to or arising out of this Agreement or any Transaction. SECTION 6.12. Extension; Waiver. At any time prior to the Restructuring, the parties may (a) extend the time for the performance of any of the obligations or other acts of the other parties or (b) waive compliance with any of the agreements or conditions contained herein. Any agreement on the part of a party to any such extension or waiver shall be valid only if set forth in an instrument in writing 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 such rights. 25 IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed by its respective duly authorized officer as of the date first set forth above. ROCHE HOLDING LTD by /s/ D. Franz B. Humer _____________________________________ Name: Franz B. Humer Title: President and Chairman by /s/ Erich Hunziker _____________________________________ Name: Erich Hunziker Title: Chief Financial Officer 66 ACQUISITION CORPORATION II by /s/ Gottlieb Keller _____________________________________ Name: Gottlieb Keller Title: President IGEN INTERNATIONAL, INC. by /s/ Samuel J. Wohlstadter _____________________________________ Name: Samuel J. Wohlstadter Title: Chairman and Chief Executive Officer IGEN INTEGRATED HEALTHCARE, LLC by /s/ Richard J. Massey _____________________________________ Name: Richard J. Massey Title: President and Chief Operating Officer 26 EX-99.5 7 y88675exv99w5.txt ONGOING LITIGATION AGREEMENT EXHIBIT 99.5 ONGOING LITIGATION AGREEMENT THIS ONGOING LITIGATION AGREEMENT (the "AGREEMENT") is entered into this 24th day of July, 2003 by and between IGEN INTERNATIONAL, INC., a corporation duly organized and validly existing under the laws of the State of Delaware, ("IGEN"), ROCHE DIAGNOSTICS Gmbh (formerly Boehringer Mannheim GmbH), a company duly organized and validly existing under the laws of the Federal Republic of Germany, and ROCHE DIAGNOSTICS CORPORATION, a corporation duly organized and validly existing under the laws of the State of Indiana (collectively "ROCHE") (collectively, the "PARTIES"). RECITALS WHEREAS, simultaneously with the execution and delivery of this Agreement, Roche Holding Ltd and IGEN, together with certain other specified parties, have executed an Agreement and Plan of Merger of even date herewith (the "MERGER AGREEMENT"), pursuant to which an Affiliate of Roche will merge with and into IGEN; and WHEREAS, IGEN and Roche agree that it is in their best interests that the Parties take certain actions in connection with the following legal proceedings involving the Parties: Igen International Inc. v. Roche Diagnostics GmbH, Case No. PJM 97CV3461 (D. Md. filed October 15, 1997), appealed as Appeal No. 02-1537 (4th Circuit decided July 9, 2003), and any successor action (the "MARYLAND CONTRACT ACTION"), Igen International Inc. v. Roche Diagnostics GmbH and Roche Diagnostics Inc., Case No. PJM 03CV2000 (D. Md. filed July 9, 2003) and any successor action (the "MARYLAND PATENT ACTION"), and Igen International Inc. v. Roche Diagnostics GmbH and Roche Diagnostics Inc., File No. LG Dusseldorf 4b O 258/03 (Dusseldorf, Germany filed July 9, 2003) and any successor action (the "GERMAN PATENT ACTION"); and WHEREAS, IGEN and Roche agree that the actions contemplated by this Agreement be without prejudice to either Party with regard to any action that either Party might have taken in the Maryland Contract Action, the Maryland Patent Action or the German Patent Action, including the filing of a preliminary injunction by IGEN in the Maryland Patent Action, and the filing of an interlocutory injunction by IGEN in addition to the German Patent Action. NOW, THEREFORE, in consideration of the mutual premises and covenants hereinafter set forth, the Parties agree as follows: ARTICLE 1 DEFINITIONS As used in this Agreement, capitalized terms shall have the respective meanings set forth below. Capitalized terms used but not defined in this Agreement shall have the meaning given to such terms in the Merger Agreement: 1.1 AFFILIATE. "Affiliate" of any person means another person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such first person. Neither Genentech Inc., 1 DNA Way, South San Francisco, California 94080-4990, USA nor Chugai Pharmaceutical Co., Ltd, 1-9 Kyobashi 2-chome, Chuo-ku, Tokyo, 104-8301, Japan shall be deemed an Affiliate of Roche for purposes of this Agreement. Neither Meso Scale Diagnostics, LLC., 9238 Gaither Road, Gaithersburg, Maryland, USA 20877 nor Meso Scale Technologies, LLC., 9238 Gaither Road, Gaithersburg, Maryland, USA 20877 shall be deemed an Affiliate of IGEN for purposes of this Agreement. 1.2 COMMERCIAL AGREEMENTS. "Commercial Agreements" shall have the meaning set forth in the Merger Agreement. 1.3 EFFECTIVE TIME. "Effective Time" shall have the meaning as set forth in the Merger Agreement. 1.4 FOURTH CIRCUIT. "Fourth Circuit" shall mean the U.S. Court of Appeals for the Fourth Circuit. 1.5 FOURTH CIRCUIT OPINION. "Fourth Circuit Opinion" shall mean the opinion of the Fourth Circuit issued on July 9, 2003 in the Maryland Contract Action. 1.6 GERMAN JOINT MOTION TO STAY. "German Joint Motion to Stay" shall mean the joint motions to stay the German Patent Action in the forms attached hereto as Appendix A. 1.7 GERMAN PATENT ACTION. "German Patent Action" shall have the meaning set forth in the Recitals, or any re-filing thereof as contemplated by Section 2.4 and the German Patent Interlocutory Injunction. 1.8 GERMAN PATENT INTERLOCUTORY INJUNCTION. "German Patent Interlocutory Injunction" shall mean an interlocutory injunction proceeding ("Einstweiliges Verfugungsverfahren") directed at the same or part of the same matter under dispute as the German Patent Action. 1.9 GOVERNMENTAL ENTITY. "Governmental Entity" shall mean any domestic or foreign (whether a national, federal, state, provincial, local or otherwise) government or any court of competent jurisdiction, agency or commission or other governmental authority or instrumentality, domestic or foreign. 1.10 IGEN/ROCHE ACTIONS. "IGEN/Roche Actions" shall mean the Maryland Patent Action and the German Patent Action. 1.11 LICENSE AGREEMENT. "License Agreement" shall mean the License and Technology Agreement between IGEN and Roche Diagnostics, GmbH (formerly Boehringer Mannheim, GmbH) dated as of September 23, 1992. 1.12 MARYLAND CONTRACT ACTION. "Maryland Contract Action" shall have the meaning set forth in the Recitals. 1.13 MARYLAND DISTRICT COURT. "Maryland District Court" shall mean United States District Court for the District of Maryland, Southern Division located in Greenbelt, Maryland. 2 1.14 MARYLAND JOINT MOTION. "Maryland Joint Motion to Stay" shall mean the joint motion to stay the Maryland Patent Action and proposed form of Order in the forms attached hereto as Appendix B. 1.15 MARYLAND PATENT ACTION. "Maryland Patent Action" shall have the meaning set forth in the Recitals, or any re-filing thereof as contemplated by Section 2.4. 1.16 MERGER. "Merger" shall mean the "Merger" as defined in the Merger Agreement. 1.17 MERGER AGREEMENT. "Merger Agreement" shall have the meaning set forth in the Recitals. 1.18 PERSON. "person" shall mean any individual, firm, corporation, partnership, company, limited liability company, trust, joint venture, association, Governmental Entity or other entity. 1.19 TRANSACTION AGREEMENTS. "Transaction Agreements" shall have the meaning set forth in the Merger Agreement. 1.20 TERMINATION DATE. "Termination Date" shall mean the earlier to occur of: (i) the Effective Time, or (ii) the termination of the Merger Agreement in accordance with its terms. ARTICLE II STAND STILL PROVISIONS 2.1 MARYLAND PATENT ACTION Immediately following the execution and delivery of this Agreement, the Parties shall file, or cause to be filed, the Maryland Joint Motion to Stay with the Maryland District Court. Until the Termination Date, each of the Parties agrees, and shall cause its Affiliates, to take such further actions as may be reasonably necessary, appropriate, desirable, or required in order to facilitate the Maryland District Court entering and maintaining the order contemplated by the Maryland Joint Motion to Stay. 2.2 MARYLAND CONTRACT ACTION Roche agrees for itself and its Affiliates that it shall file or cause to be filed any and all motions, pleadings and documents in the Maryland Contract Action appropriate or necessary to withdraw its petition for panel rehearing filed on July 23, 2003. Each of the Parties agrees, for itself and its Affiliates, that: (i) it shall not take any action or file any additional motions or pleadings in the Maryland Contract Action, including any further motions for rehearing or rehearing en banc that may be or could be filed with the Fourth Circuit, or any petition for writ of certiorari to the United States Supreme Court, in the Maryland Contract Action; (ii) it shall take any and all action that may reasonably be required or necessary in order to stay, or withdraw with the right to refile, any motion filed prior to the date hereof in the Maryland District Court with respect to the Maryland Contract Action that remains pending; and (iii) any time periods or limitations with respect to the right of any Party to appeal any order of the Maryland District Court entered in the Maryland Contract Action on or after the date hereof shall be tolled until the Termination Date. 3 2.3 GERMAN PATENT ACTION The Parties specifically agree that IGEN shall be authorized to proceed to serve or have served on Roche, and that Roche shall be authorized to indicate to the court its intention to defend itself in, the German Patent Action. The Parties further agree to jointly take all steps necessary to stay the German Patent Action after service especially by requesting a stay ("Ruhen des Verfahrens gemass Section 251 ZPO") until the Termination Date by filing German Joint Motion to Stay within a week after the date of this Agreement. Roche will refrain from taking any steps to achieve a dismissal of the German Patent Action at any time before the Termination Date. However, to the extent that dismissal occurs before the Termination Date, Roche and IGEN shall take all steps necessary promptly to re-instate the German Patent Action through to the Termination Date. 2.4 SUBSEQUENT ACTIONS. (a) Notwithstanding anything to the contrary contained in this Agreement, IGEN shall, upon advice of counsel in order to preserve its legal rights being asserted in the IGEN/Roche Actions, be permitted to withdraw and promptly re-file any of the IGEN/Roche Actions and such withdrawal and re-filing shall not be a violation of any of IGEN's obligations hereunder. Such refiled actions shall be within the definition of the IGEN/Roche Actions. Roche covenants and agrees that it shall not object to the withdrawal and re-filing of a complaint or other pleading in any of the IGEN/Roche Actions. (b) Promptly after the Effective Time: (i) IGEN shall, and shall cause its Affiliates to, withdraw and terminate each of the IGEN/Roche Actions and use its reasonable best efforts to cause the dismissal of such actions as soon thereafter as practicable; and (ii) Roche shall, and shall cause its Affiliates to, cooperate and use its reasonable best efforts to cause the dismissal of the IGEN/Roche Actions. If the pleadings, motions, filings and other submissions to or with the courts having jurisdiction over the IGEN/Roche Actions would adversely impact the intellectual property of IGEN Integrated Healthcare, LLC (or any successor thereto), then such pleading, filing or submission shall be made only after IGEN and Roche have received the prior written consent of IGEN Integrated Healthcare, LLC. (or any successor thereto), which consent shall not be unreasonably withheld, conditioned or delayed. IGEN Integrated Healthcare, LLC., shall be a third party beneficiary of this provision and shall be entitled to enforce this right as though it were a party hereto. ARTICLE 3 ONGOING OBLIGATIONS AND COVENANTS 3.1 COVENANT OF COOPERATION. (a) Each Party agrees, for itself and its Affiliates, to cooperate with the other Party in all reasonable respects, including in the preparation, execution and filing of all necessary or appropriate papers with the appropriate forums, to consummate and carry out the purposes and intent of each of the provisions of Article 2 of this Agreement. (b) Each of the Parties agrees, for itself and its Affiliates, that prior to the Termination Date it shall take all further necessary steps and actions before the court or courts having jurisdiction over of the IGEN/Roche Actions to avoid dismissal of the complaints pending in each of those cases prior to the Termination Date; provided, however, that to the extent that either of the IGEN/Roche Actions is dismissed by the court having jurisdiction in the 4 matter for any reason prior to the Termination Date, Roche shall not oppose (and if necessary take appropriate action to allow) the taking by IGEN of all steps reasonably necessary or desirable to re-instate the IGEN/Roche Action so dismissed. 3.2 NO INCONSISTENT ACTIONS. Each of the Parties, for itself and its Affiliates, agrees not to take any action before the Termination Date in derogation of or inconsistent with the obligations specified in this Agreement, including filing or prosecuting (other than requesting or providing for service of process and indicating an intention to defend as contemplated by Section 2.3) any inter partes or ex parte proceedings anywhere in the world in any court, patent office or other governmental relating to the subject matter of the IGEN/Roche Actions or to any of the patents that are the subject of any of the IGEN/Roche Actions, or any patent in any country claiming priority to any of the applications to which the patents in suit claim priority. 3.3 COVENANT NOT TO SUE. IGEN agrees that it shall not commence any new patent suit or prosecute any patent suit against Roche for any acts of Roche occurring between the date of the termination of the License Agreement through to (but not subsequent to) the Termination Date that, if taken prior to termination of the License Agreement, would have been within the scope of the license granted under the License Agreement. Nothing in this Agreement shall preclude IGEN or any of its Affiliates from asserting or filing, and IGEN for itself and each of its Affiliates reserves the right to assert and file, any claim, suit, action and proceeding against Roche and any of its Affiliates for any acts taken after the date of the termination of the License Agreement that are not within the scope of the license granted under the License Agreement. 3.4 COMPLIANCE WITH JUDGMENT. (a) Until the Effective Time, each of IGEN and Roche shall, and shall cause each of its Affiliates to, comply with all of its obligations under and in respect of the final judgment entered by the United States District Court for the District of Maryland in the License Litigation on February 15, 2002 (the "Final Judgment") (as modified by the Court of Appeals Opinion) or any final judgment entered not inconsistent with the mandate to be returned by the United States Court of Appeals for the Fourth Circuit in connection with the Court of Appeals Opinion. (b) Each of IGEN and Roche shall, and shall cause each of its Affiliates to, take any and all action necessary to cause the United States District Court for the District of Maryland to enter a final judgment not inconsistent with the mandate to be returned by the United States Court of Appeals for the Fourth Circuit in connection with the Court of Appeals Opinion. 3.5 PRESERVATION OF RIGHTS. The Parties agree that nothing in this Agreement can be construed as a waiver of any rights, and is without prejudice to the ability, of both Parties to prosecute the IGEN/Roche Actions, and any other actions not prosecuted as a result of this Agreement, after the Termination Date. Without limiting the generality of the foregoing, Roche covenants and agrees that it shall not, and shall not permit any of its Affiliates, to argue or assert that the period between the date of this Agreement and the Termination Date constitutes undue or unreasonable delay (or advancing any similar or comparable argument) in IGEN's filing for or seeking a motion for a preliminary injunction or an interlocutory injunction in either of the 5 IGEN/Roche Actions or that any such motion was not timely filed as a result of IGEN's complying with its obligations under this Agreement. ARTICLE 4 PAYMENTS 4.1 PAYMENTS. (a) Not later than two Business Days after the date of this Agreement, Roche shall pay to IGEN $18.6 million as full payment of the compensatory damages awarded in the Maryland Contract Action. (b) Not later than two Business Days after the date of this Agreement, Roche shall pay to IGEN $10.62 million as full payment to IGEN for royalties due and payable under the License Agreement for sales made in the second calendar quarter ended June 30, 2003. (c) Not later than two Business Days after the date of this Agreement, Roche shall pay to IGEN $5.0 million as partial consideration for this Agreement. (d) On the last Business Day of each month during the term of this Agreement, commencing in August, 2003, Roche shall pay to IGEN $5.0 million as partial consideration for this Agreement; provided, however, that with respect to the month in which the Termination Date occurs, Roche shall pay to IGEN immediately prior to the Effective Time (or, if such Termination Date occurred as a result of a termination of the Merger Agreement, on or prior to the second Business Day following such Termination Date) a pro rata portion of such monthly amount based on the number of days in such month to, but excluding, the Termination Date. (e) Any payment due to IGEN under this Agreement shall be paid by wire transfer of immediately available funds on the date such payment is due. All payments due under this Agreement shall be made in U.S. dollars. (f) IGEN agrees and acknowledges that no additional royalty payments are or will be due or payable under the License Agreement for any period prior to the date hereof or during the term of this Agreement. (g) For purposes of this Article 4, "Business Day" shall mean any day other than a Saturday, Sunday and any day on which the banks in Germany, Switzerland or the United States or the federal courts in the United States are permitted or required by applicable Law to close. ARTICLE 5 [RESERVED] 6 ARTICLE 6 TERM AND TERMINATION 6.1 TERM. Except as provided in Section 6.2, below, unless otherwise agreed by the Parties, this Agreement shall remain in full force and effect from and after the date first set forth above until the Termination Date. 6.2 TERMINATION. IGEN may, in its sole discretion, terminate this Agreement if Roche fails to make any payment when due, which failure has not been cured within ten days after IGEN has delivered to Roche written notice thereof. 6.3 CONSEQUENCES OF TERMINATION. In the event of any termination or expiration of this Agreement, IGEN shall be entitled to continue to prosecute the IGEN/Roche Actions without delay and both Parties covenant and agree that it shall not use this Agreement or any actions taken by any of the Parties hereunder for any purpose, including as evidence in or in support of any allegation made in, or any possible defense to, the IGEN/Roche Actions. Notwithstanding the expiration or termination of this Agreement, the provisions of Articles 1 and 8, and Sections 2.4, 3.3, 3.5, 4.1(d), 4.1(e) and 6.3, shall survive. ARTICLE 7 REPRESENTATIONS AND WARRANTIES Each Party hereby represents and warrants to the other that: (i) it has not filed or commenced any suit, claim, demand, proceeding or action ("ACTION") against the other Party and there is no such Action pending against the other Party, other than for the Maryland Contract Claim, the Maryland Patent Action, and the German Patent Action; and (ii) no consent, notice, approval, authorization, waiver or permit, to or from any person (other than the consent attached hereto), including any Governmental Entity or third party is required to be obtained or made by in connection with its execution, delivery and performance of this Agreement. ARTICLE 8 MISCELLANEOUS 8.1 WAIVER. No delay or omission on the part of either Party to this Agreement in requiring performance by the other Party or in exercising any right hereunder shall operate as a waiver of any provision hereof or of any right or rights hereunder; and the waiver, omission or delay in requiring performance or exercising any right hereunder on any one occasion shall not be construed as a bar to or waiver of such performance or right, or of any right or remedy under this Agreement, on any future occasion. Any agreement on the part of either Party to any such 7 extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such Party. 8.2 ASSIGNMENT. This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their permitted successors and assigns; provided, however, that neither Party shall assign any of its rights and obligations hereunder except as consented to by the other Party, which consent may be granted or withheld in the sole and absolute discretion of the non-assigning Party. In addition, IGEN agrees that this Agreement shall not be assigned or assignable to IGEN Integrated Healthcare, LLC as a part of the transactions contemplated by the Merger Agreement and shall remain a Continuing Company Asset as that term is defined in the Restructuring Agreement. Any assignment not in accordance with this Section 8.2 shall be void. 8.3 NOTICES. Any notice or other communication required or permitted to be given to either Party hereto shall be in writing and shall be deemed to have been properly given and to be effective on the date of delivery if delivered in person or by facsimile (with electronic confirmation of receipt and with a confirmation copy sent by internationally-recognized air courier service), to such Party at the following address:
In the case of IGEN: In the case of Roche Diagnostics, GmbH: - ------------------- --------------------------------------- IGEN International, Inc. Roche Diagnostics GmbH 16020 Industrial Drive Sandhofer Strasse 116 Gaithersburg, Maryland 20877 D-68305 Mannheim United States of America Federal Republic of Germany Attention: President Attention: Legal Department Fax No.: 301-208-3789 Fax No.: 011-49-621-759-4461 with copies to: In the case of Roche Diagnostics Corporation Cravath, Swaine & Moore LLP Roche Diagnostics Corporation 825 Eighth Avenue 9115 Hague Road New York, NY 10019 Indianapolis, Indiana 46250 Attention: Philip A. Gelston Attention: Steve Oldham Sarkis Jebejian Fax No.: 317-521-3082 Fax No.: 212-474-3700 Wilmer, Cutler & Pickering with copies, in the case of Roche Diagnostics, GmbH or 2445 M Street, N.W. Roche Diagnostics Corporation, to: Washington, DC 20037 Attention: Howard M. Shapiro Davis Polk & Wardwell Louis R. Cohen 450 Lexington Avenue Fax No.: 202-663-6363 New York, NY 10017 Attention: Ulrika Ekman Finnegan, Henderson, Farabow, Fax No.: 212-450-3800 Garrett & Dunner, L.L.P. 1300 I Street, N.W. Washington, DC 20005
8 Attention: Donald R. Dunner Fax No.: 202-408-4400 8.4 HEADINGS. The headings of the several Sections are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement. 8.5 FORCE MAJEURE. Any delays in performance by any Party under this Agreement (other than a Party's failure to make payments hereunder) shall not be considered a breach of this Agreement if and to the extent caused by occurrences beyond the reasonable control of the Party affected, including acts of God, embargoes, governmental restrictions, strikes or other concerted acts of workers, fire, flood, explosion, riots, wars, civil disorder, rebellion or sabotage. The Party suffering such occurrence shall immediately notify the other Party and any time for performance hereunder shall be extended by the actual time of delay caused by the occurrence. 8.6 INDEPENDENT CONTRACTORS. In granting, performing or exercising rights under this Agreement, Roche and IGEN are and shall act at all times as independent contractors and nothing contained in this Agreement shall be construed or implied to create an agency, partnership or employer and employee relationship between IGEN and Roche. At no time shall one Party make commitments or incur any charges or expenses for or in the name of the other Party. 8.7 SEVERABILITY. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any applicable Law, or public policy, all other conditions 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 to the end that transactions contemplated hereby are fulfilled to the extent possible. 8.8 INTERPRETATION. The official text of this Agreement shall be English. For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: (a) the terms of this Agreement do not amend or supersede, and shall not be used to interpret, the terms of the Merger Agreement or any of the Transaction Agreements or Commercial Agreements specified therein, including the Covenants Not to Sue (as defined in the Merger Agreement); (b) the terms defined in this Agreement have the meanings assigned to them in this Agreement and include the plural as well as the singular, and the use of any gender herein shall be deemed to include the other gender; 9 (c) references herein to "Sections," "Subsections," "Paragraphs," and other subdivisions without reference to a document are to designated Sections, Subsections, Paragraphs and other subdivisions of this Agreement; (d) a reference to a Subsection without further reference to a Section is a reference to such Subsection as contained in the same Section in which the reference appears, and this rule shall also apply to Paragraphs and other subdivisions; (e) the words "herein," "hereof," "hereunder," and other words of similar import refer to this Agreement as a whole and not to any particular provision; (f) the term "include" or "including" shall mean "including without limitation"; (g) the term "to the extent" shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply "if"; (h) the term "or" is not exclusive; and (i) the Appendices to this Agreement are hereby incorporated and made a part hereof and are an integral part of this Agreement. 8.9 CUMULATIVE RIGHTS. The rights, powers and remedies hereunder shall be in addition to, and not in limitation of, all rights, powers and remedies provided at law or in equity. All of such rights, powers and remedies shall be cumulative, and may be exercised successively or cumulatively. 8.10 ENTIRE AGREEMENT; AMENDMENT. This Agreement, taken together with the other Transactions Agreements, the Commercial Agreements, the Confidentiality Agreement and the Letter Agreement, embodies the entire understanding of the Parties with respect to the subject matter hereof and shall supersede all previous communications, representations or understandings, either oral or written, between the Parties relating to the subject matter hereof. This Agreement shall not be amended, altered or changed except by a written agreement signed by all of the Parties hereto. 8.11 NO THIRD PARTY BENEFICIARY RIGHTS. Except for the provisions of Section 2.4(b) related to dismissal of the IGEN/Roche Actions following the Termination Date, nothing contained in this Agreement is intended to confer upon any person other than the Parties hereto and their respective successors and permitted assigns, any benefit, right or remedy under or by reason of this Agreement. 8.12 COUNTERPARTS; EFFECTIVENESS. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original but all of which shall constitute one and the same agreement. This Agreement shall not become effective unless and until (i) signed and delivered by all Parties; and (ii) joined by Meso Scale Diagnostics, LLC. and Meso Scale Technologies, LLC. as evidenced by each of those companies signing the Joinder set forth on the signature page herof. 10 8.13 GOVERNING LAW. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof. 8.14 ENFORCEMENT; CONSENT TO SERVICE OF PROCESS. 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 or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in any New York state court or any Federal court of the United States of America sitting in New York City, this being in addition to any other remedy to which they are entitled at law or in equity. In addition, each of the parties hereto (i) consents to submit itself exclusively to the personal jurisdiction of any New York state court or any Federal Court of the United States sitting in New York City in the event any dispute arises out of this Agreement, (ii) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, (iii) agrees that it will not bring any action relating to this Agreement in any court other than in any New York state court or any Federal court of the United States of America sitting in New York City and (iv) waives any right to trial by jury with respect to any action related to or arising out of this Agreement. 11 IN WITNESS WHEREFORE, THE PARTIES HAVE CAUSED THIS AGREEMENT TO BE EXECUTED ON ITS BEHALF BY ITS DULY AUTHORIZED REPRESENTATIVE, ALL AS OF THE DATE FIRST ABOVE WRITTEN. IGEN INTERNATIONAL, INC. ROCHE DIAGNOSTICS GmbH By: /s/ C.J. Ruetsch _________________________________________ By: /s/ Richard J. Massey Claus-Joerg Ruetsch _________________________________________ ____________________________________________ Name (Typed or Printed) Title: General Counsel Richard J. Massey Date: July 24, 2003 ____________________________________________ Name (Typed or Printed) Title: President and Chief Operating Officer Date: July 24, 2003 By: /s/ Heino Von Prondzynski _________________________________________ ____________________________________________ Name (Typed or Printed) Title: Authorized Signatory Date: July 24, 2003 ROCHE DIAGNOSTICS CORPORATION By:/s/ Steve A. Oldham _________________________________________ Steve A. Oldham ____________________________________________ Name (Typed or Printed) Title: Vice President, General Counsel and Secretary Date: July 24, 2003 By: _________________________________________ ____________________________________________ Name (Typed or Printed) Date: July 24, 2003
12 JOINDER: EACH OF MESO SCALE TECHNOLOGIES, LLC., A DELAWARE LIMITED LIABILITY COMPANY AND MESO SCALE DIAGNOSTICS, LLC., A DELAWARE LIMITED LIABILITY COMPANY JOINS THIS ONGOING LITIGATION AGREEMENT SOLELY TO CONFIRM THAT IT AGREES TO BE BOUND BY SECTION 3.3 AND ARTICLE 8 OF THIS AGREEMENT AS THOUGH IT WERE IGEN FOR THIS PURPOSE. Meso Scale Technologies, LLC. Meso Scale Diagnostics, LLC. A Delaware Limited Liability Company A Delaware Limited Liability Company By: /s/ J. Wohlstadter By: /s/ J. Wohlstadter ------------------------- ----------------------- Print Name: Jacob Wohlstadter Print Name: Jacob Wohlstadter Title: President and Chief Executive Officer Title: President and Chief Executive Officer Date: July 24, 2003 Date: July 24, 2003
13 APPENDIX A FORM OF GERMAN JOINT MOTION 14 In the matter of IGEN INTERNATIONAL INC., 16020 Industrial Drive, Gaithersburg, MD 20877, USA, - claimant - represented by: : RAe Bird & Bird, Dusseldorf under assistance of: PAe Hoffmann Eitle, Munchen v e r s u s ROCHE DIAGNOSTICS GmbH, Sandhofer Strasse 116, 68305 Mannheim, - defendant - - - COURT FILE NO.: 4 b O 258/03 - we appoint ourselves for the defendant. The parties are in ongoing settlement talks. We therefore request, to order the stay of the proceeding according to sec. 251 (1) German Procedural Law. Attorney at law 15 Dusseldorf, den ..... 07.2003 In the matter of IGEN INTERNATIONAL INC., 16020 Industrial Drive, Gaithersburg, MD 20877, USA, - claimant - represented by: : RAe Bird & Bird, Dusseldorf under assistance of : PAe Hoffmann Eitle, Munchen v e r s u s ROCHE DIAGNOSTICS GmbH, Sandhofer Strasse 116, 68305 Mannheim, - defendant - - - COURT FILE NO.: 4 b O 258/03 - attached we file a check for deposit of the court fees and hereby request the service of the complaint. We ask to schedule a hearing date for this matter. The parties are in ongoing settlement talks. We therefore request, to order the stay of the procedure - after established service - according to sec. 251 (1) German Procedural Law. For the defendants representatives will announce their appointment after service and will themselves request the stay of the proceedings. Attorney at law Dusseldorf, den ..... 07.2003 16 In Sachen IGEN INTERNATIONAL INC., 16020 Industrial Drive, Gaithersburg, MD 20877, USA, - Klagerin - Prozessbevollmachtigte: RAe Bird & Bird, Dusseldorf Mitwirkend: PAe Hoffmann Eitle, Munchen g e g e n ROCHE DIAGNOSTICS GmbH, Sandhofer Strasse 116, 68305 Mannheim, - Beklagte - - - AZ.: 4 b O 258/03 - bestellen wir uns fur die Beklagte. Die Parteien befinden sich in Vergleichsverhandlungen. Wir beantragen daher, das Ruhen des Verfahrens gemass Section 251, Satz 1 ZPO anzuordnen. Rechtsanwalt 17 Dusseldorf, den ..... 07.2003 In Sachen IGEN INTERNATIONAL INC., 16020 Industrial Drive, Gaithersburg, MD 20877, USA, - Klagerin - Prozessbevollmachtigte: RAe Bird & Bird, Dusseldorf Mitwirkend: PAe Hoffmann Eitle, Munchen g e g e n ROCHE DIAGNOSTICS Gmbh, Sandhofer Strasse 116, 68305 Mannheim, - Beklagte - - - AZ.: 4 b O 258/03 - uberreichen wir anliegend einen Verrechnungsscheck uber die Gerichtsgebuhren und bitten um Zustellung der Klageschrift. Wir bitten von einer Terminierung abzusehen. Die Parteien befinden sich in Vergleichsverhandlungen. Wir beantragen daher, das Ruhen des Verfahrens - nach erfolgter Zustellung - gemass Section 251, Satz 1 ZPO anzuordnen. Fur die Beklagte werden sich nach Zustellung Prozessbevollmachtige bestellen und ihrerseits das Ruhen des Verfahrens beantragen. Rechtsanwalt 18 APPENDIX B FORM OF MARYLAND JOINT MOTION 19 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND SOUTHERN DIVISION IGEN INTERNATIONAL, INC. ) ) Plaintiff, ) Civil Action No. 03-CV-02000-PJM ) v. ) ) ROCHE DIAGNOSTICS CORP., et al. ) ) Defendants. ) ) - --------------------------------------------------------- JOINT MOTION TO STAY PROCEEDINGS Plaintiff IGEN International, Inc. ("IGEN") and Defendants Roche Diagnostics Corp. ("RDC") and Roche Diagnostics GmbH, ("RDG") pursuant to an agreement between the parties, jointly move for a stay of proceedings. Since the complaint was filed on July 9, 2003, the parties have executed a series of agreements including an Agreement and Plan of Merger dated as of July 24, 2003 ("Merger Agreement") among IGEN, IGEN Integrated Healthcare, LLC, Roche Holding Ltd, 66 Acquisition Corporation II (an affiliate of Roche Holding Ltd) under which, among other things, an affiliate of RDG and RDC will merge with and into IGEN. Contemporaneously with the execution of the Merger Agreement, the parties executed and delivered certain other agreements including an Ongoing Litigation Agreement. Under that agreement, the parties agreed that it was in their best interest, among other things, to jointly file this motion and to take such further actions as may be reasonably necessary, appropriate, desirable, or required in order to facilitate the court entering and maintaining the order contemplated by this motion. Under the terms of the Ongoing Litigation Agreement, the parties 20 agreed that the proceedings in this case, including the running of the time for serving the complaint upon Roche Diagnostics GmbH, are to be stayed until the earlier to occur of the termination or expiration of the Merger Agreement or consummation of the closing of merger as contemplated by the Merger Agreement. The parties agree that if the merger is not consummated, this stay will not prejudice IGEN's right to seek a preliminary injunction in this proceeding and agree that the stay shall not affect, and that Roche will not assert that the stay has affected, IGEN's contention that Roche's alleged infringement of the patents in suit is causing irreparable harm to IGEN. A proposed order consistent with this motion is attached. 21 Respectfully submitted, Dated: ____________________ _____________________________________ Donald R. Dunner Thomas H. Jenkins Gerald F. Ivey, Bar No. 03412 Geoffrey C. Mason, Bar No. 15772 William L. Strauss, Bar No. 15775 FINNEGAN, HENDERSON, FARABOW, GARRETT & DUNNER, L.L.P. 1300 I Street, N.W. Washington, D.C. 20005-3315 (202) 408-4000 Attorneys for Plaintiff IGEN International, Inc. Dated: ____________________ _____________________________________ [Attorney Name] [Firm Name] [Address] Attorneys for Defendants Roche Diagnostics Corp., et al. 22 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND SOUTHERN DIVISION IGEN INTERNATIONAL, INC. ) ) Plaintiff, ) Civil Action No. 03-CV-02000-PJM ) v. ) ) ROCHE DIAGNOSTICS CORP., et al. ) ) Defendants. ) ) - --------------------------------------------- ORDER The parties having filed a joint motion to stay proceedings to permit settlement discussions, IT IS HEREBY ORDERED: 1. All proceedings in this case are stayed until the earlier to occur of: (a) the termination or expiration of merger ("Merger") contemplated by the Agreement and Plan of Merger dated as of July 24, 2003 ("Merger Agreement") among Roche Holding Ltd, 66 Acquisition Corporation II, IGEN International, Inc. and IGEN Integrated Healthcare, LLC; or (b) consummation of the Merger in accordance with the Merger Agreement. 2. The parties shall report to the court in writing on the status of the efforts to consummate the Merger every 60 days from the date this order is signed. If the Merger is not consummated and the stay is lifted or expires, this stay will not prejudice IGEN's right to seek a preliminary injunction in this proceeding. Further, the parties agree that the stay shall not affect, and Roche shall not assert that the stay has affected, IGEN's contention that Roche's alleged infringement of the patents in suit is causing irreparable harm to IGEN. 23 _____________________________ For the Court 24 EX-99.6 8 y88675exv99w6.txt RELEASE AND AGREEMENT EXHIBIT 99.6 RELEASE AND AGREEMENT dated as of July 24, 2003 (this "Release and Agreement"), among IGEN International, Inc., a Delaware corporation (the "Company"), IGEN Integrated Healthcare, LLC, a Delaware limited liability company and a wholly owned subsidiary of the Company ("Newco"), and each company listed on the signature pages hereto under the heading "Related Companies" (each, a "Related Company" and collectively, the "Related Companies"). WHEREAS Roche Holding Ltd, a joint stock company organized under the laws of Switzerland ("R Company"), 66 Acquisition Corporation II, a Delaware corporation and a wholly owned subsidiary of R Company ("Sub"), the Company and Newco have entered into an Agreement and Plan of Merger dated as of July 23, 2003, (the "Merger Agreement"), providing for the Merger (as defined in the Merger Agreement); WHEREAS simultaneously with the execution and delivery of the Merger Agreement, the Company and Newco are entering into an agreement (the "Restructuring Agreement") pursuant to which, prior to the Effective Time (as defined in the Merger Agreement), the Restructuring (as defined in the Restructuring Agreement) will be effected; WHEREAS simultaneously with the execution and delivery of the Merger Agreement, R Company, Parent, the Company and Newco are entering into an agreement (the "Post-Closing Covenants Agreement") that sets forth certain agreements that will govern certain matters that may arise following the Effective Time; NOW, THEREFORE, in consideration of the foregoing, the parties hereto hereby agree as follows: ARTICLE I Mutual Releases SECTION 1.01. Mutual Releases. In consideration of the mutual releases, covenants, agreements, rights and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, effective as of the Release Time (as defined below), the Company, as to itself and its past, present and future affiliates (other than any Newco Company (as defined in the Restructuring Agreement)), and its and their respective successors, predecessors, assigns, heirs, officers, directors, employees, consultants and trustees, on the one hand (in each case, solely in their capacities as such), and the Related Companies, as to themselves and their past, present and future affiliates, and their respective successors, predecessors, assigns, heirs, officers, directors, employees, consultants and trustees, on the other hand (in each case, solely in their capacities as such), hereby (a) releases, acquits and forever discharges the other and its and their past, present and future affiliates, and its and their respective successors, predecessors, assigns, heirs, officers, directors, employees, consultants and trustees (in each case, solely in their capacities as such), of and from the Released Matters (as defined below) and (b) agrees not to bring any claim, suit, action, arbitration, inquiry, investigation or other proceeding of any nature by or before any arbitrator or Governmental Entity (as defined in the Merger Agreement) or similar person or body (each, an "Action") against the other and its and their past, present and future affiliates and its and their respective successors, predecessors, assigns, heirs, officers, directors, employees, consultants and trustees (in each case, solely in their capacities as such) related to or arising out of the Released Matters; provided, however, that this Release and Agreement shall not (i) affect any person's right to enforce this Release and Agreement, any Transaction Agreement (as defined in the Merger Agreement), any Commercial Agreement (as defined in the Merger Agreement), any Newco I/R Agreement (as defined in the Restructuring Agreement) or any provision herein or therein in accordance with its terms, (ii) relieve Newco or any Related Company from the obligation to pay any amounts accrued or due and payable under any Related Company Agreement (as defined in Section 2.02), (iii) apply to any pursuit of any Action against any person other than in connection with a Released Matter, (iv) be, or be construed as, a grant to the Company (or any affiliate thereof (other than any Newco Company)) of a license, express or implied, any freedom to operate, or any covenant not to sue under any intellectual property owned by, licensed to, or otherwise held at the Effective Time by any Related Company; or (v) be, or be construed as, a grant to any Related Company (or any affiliate thereof) of a license, express or implied, any freedom to operate, or any covenant not to sue under any intellectual property owned by, licensed to, or otherwise held at the Effective Time by the Company or any Newco Company. SECTION 1.02. Reimbursement. In the event of any Action among the parties to this Release and Agreement (including, for purposes of this Section 1.02, affiliates, successors, assigns, heirs, officers, directors, employees, consultants or trustees that are third party beneficiaries under this Release and Agreement) in which a party to such Action (the "Prevailing Party") obtains a final and nonappealable order of a court of competent jurisdiction that provides or states that the other party breached Section 1.01, then the Prevailing Party shall be entitled to reimbursement from the other party of its legal fees and expenses incurred in such Action. SECTION 1.03. Certain Agreements. (a) The Company and each of the Related Companies hereby agree that as part of the Restructuring, each Related Company Agreement that is not a written agreement executed on behalf of each of the parties thereto shall be memorialized in writing and executed on behalf of each of the parties thereto. In furtherance and not in limitation of Section 1.05 (a), each of the Related Companies acknowledges that, pursuant to the Restructuring Agreement and as part of the Restructuring, all of the Company's rights under and in respect of the Related Company Agreements shall be assigned to, and all of the Company's Liabilities under and in respect of the Related Company Agreements will be assumed by, Newco immediately prior to the Effective Time (the "Related Company Transfer"). (b) Each of the Related Companies hereby consents to the Related Company Transfer and, as of the Release Time, except as otherwise expressly provided in Section 1.01, unconditionally releases the Company from any and all obligations, 2 duties and Liabilities (express and implied) under the Related Company Agreements whether arising before, at or after the Related Company Transfer. Each of the Related Companies expressly agrees to perform its obligations, duties and Liabilities (express or implied) under the Related Company Agreements in favor of Newco, and Newco expressly agrees to assume and perform the Company's obligations, duties and liabilities (express or implied) under the Related Company Agreements in favor of the Related Companies. Each of the foregoing is conditioned upon the consummation of the Related Company Transfer, shall occur without any further action by any party, and, together with the Related Company Transfer, shall have the effect of novating and amending the Related Company Agreements. (c) The Company, Newco, and each of the Related Companies accordingly agree that as of and with effect from the Related Company Transfer each of the Related Company Agreements will no longer create or confer any rights or obligations on or as to the Company (or its affiliates (other than any Newco Company)) but will continue among the parties thereto (other than the Company) and Newco on the same terms and conditions as those stated in such Related Company Agreement. The Company, Newco and each of the Related Companies agree to amend and restate each such Related Company Agreement to reflect such novation. SECTION 1.04. Representations and Warranties. Each of (x) the Related Companies represents and warrants, severally and not jointly, to the Company and Newco and (y) the Company and Newco represents and warrants severally and not jointly, to each of the Related Companies, in each case as of the date hereof and as of the Effective Time, that: (a) Organization, Standing and Power. Such person is duly incorporated or formed, validly existing and in good standing under the laws of the state of its incorporation or formation, as applicable and has all corporate or limited liability company powers, as applicable, governmental licenses, authorizations, permits, consents and approvals, except for such governmental licenses, authorizations, permits, consents and approvals the failure of which to have or obtain, individually or in the aggregate, would not reasonably be expected to have a material adverse effect on the business of such person and such person's subsidiaries, taken as a whole. (b) Authority; Execution and Delivery; Enforceability. Such person has all requisite corporate or limited liability company power and authority, as applicable, to execute and deliver this Release and Agreement and to consummate the transactions contemplated hereby. The execution and delivery by such person of this Release and Agreement and the consummation by such person of the transactions contemplated hereby has been duly authorized by all necessary corporate or limited liability company action on the part of such person. Such person has duly executed and delivered this Release and Agreement, and, assuming due execution and delivery hereof by each other party hereto, this Release and Agreement constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms. 3 (c) No Conflicts. The execution and delivery by such person of this Release and Agreement does not, and the consummation of the transactions contemplated hereby and compliance with the terms hereof will not, conflict with, or result in any violation of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancelation or acceleration of any obligation or to loss of a material benefit under, or result in the creation of any lien upon any of the properties or assets of such person or any subsidiary of such person under, any provision of (i) the charter, organizational or formation documents of such person, (ii) any contract, lease, license, indenture, note, bond, agreement, permit, concession, franchise or other instrument (a "Contract") to which such person or any subsidiary of such person is a party or by which their respective properties or assets is bound or (iii) subject to the filings and other matters referred to in Section 1.06(d), any judgment, order or decree (a "Judgment") or statute, law, ordinance, rule or regulation whether foreign or domestic applicable to such person or any subsidiary of such person or their respective properties or assets, other than, in the case of clauses (ii) and (iii) above, any such items that, individually or in the aggregate, would not reasonably be expected to materially impair the ability of such person or any subsidiary of such person to perform its obligations under this Release and Agreement or consummate the transactions contemplated hereby (d) No Consents. No consent, approval, license, permit, order or authorization of, or registration, declaration or filing with, or permit from, any Governmental Entity, is required to be obtained or made by such person or any subsidiary of such person in connection with the execution, delivery and performance of this Release and Agreement or the consummation of the transactions contemplated hereby, other than such items that the failure of which to obtain or make, individually or in the aggregate, would not reasonably be expected to materially impair the ability of such person or any subsidiary of such person to perform its obligations under this Release and Agreement or consummate the transactions contemplated hereby. ARTICLE II Miscellaneous and General SECTION 2.01. Notices. All notices, requests, claims, demands and other communications under this Release and Agreement shall be in writing and shall be deemed given upon receipt by the parties at the following addresses (or at such other address for a party as shall be specified by like notice) of a fax followed by delivery of such notice by overnight courier of an international reputation: 4 (a) if to Newco or, prior to the Effective Time, the Company, to IGEN Integrated Healthcare, LLC 16020 Industrial Drive Gaithersburg, MD 20877 Attention: President Fax: (301) 208-3789 (b) if to the Related Companies, to Wellstat Therapeutics Corporation 930 Clopper Road Gaithersburg, MD 20878 Attention: Legal Counsel Fax: (240) 683-3794 SECTION 2.02. Definitions. Unless otherwise noted, terms used but not defined in this Release and Agreement shall have the meaning set forth in the Merger Agreement. In addition, the following terms shall have the following meanings: An "affiliate" of any person means another person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such first person. For the avoidance of doubt, (a) none of the Related Companies, MSD, MST, JW and JW Consulting is an affiliate of the Company or Newco for purposes of this Release and Agreement and (b) none of the Company, Newco, MSD, MST, JW and JW Consulting is an affiliate of any of the Related Companies for purposes of this Release and Agreement. "Related Company Agreements" means all Contracts, promises, commitments or understandings (whether oral or written) between the Company or any of its affiliates, on the one hand, and any Related Company or any of its affiliates, on the other hand. "Release Time" means the time immediately prior to the Effective Time. "Released Matter" means any and all debts, demands, Actions, causes of action, suits, accounts, covenants, Contracts, agreements, torts, damages and any and all claims, defenses, offsets, Judgments, demands and Liabilities (as defined in the Merger Agreement) whatsoever, of every name and nature, both at law and in equity, known or unknown, suspected or unsuspected, accrued or unaccrued, which have been or could have been asserted, relating to, based upon or arising from, or in connection with any relationship between the Company or any of its affiliates at or prior to the Release Time, on the one hand, and any Related Company or any of its affiliates, on the other hand, or any Related Company Agreement, in each case in existence at or prior to the Release Time. 5 SECTION 2.03. Interpretation. When a reference is made in this Release and Agreement to a Section, Exhibit, Schedule or party, such reference shall be to a Section of, or an Exhibit, Schedule or party to, this Release and Agreement unless otherwise indicated. The headings contained in this Release and Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Release and Agreement. Whenever the words "include", "includes", or "including" are used in this Release and Agreement, they shall be deemed to be followed by the words "without limitation". The words "hereof", "herein", "hereby" and "hereunder" and words of similar import when used in this Release and Agreement shall refer to this Release and Agreement as a whole and not to any particular provision of this Release and Agreement. The words "date hereof" shall refer to the date of this Release and Agreement. The term "or" is not exclusive. The word "extent" in the phrase "to the extent" shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply "if". The definitions contained in this Release and Agreement are applicable to the singular as well as the plural forms of such terms. Any agreement or instrument that is referred to herein means such agreement or instrument as from time to time amended, modified or supplemented. References to a person are also to its permitted successors and assigns. SECTION 2.04. Severability. If any term or other provision of this Release and Agreement is invalid, illegal or incapable of being enforced by any applicable Law (as defined in the Merger Agreement), or public policy, all other conditions and provisions of this Release and 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 Release and Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that transactions contemplated hereby are fulfilled to the extent possible. SECTION 2.05. Counterparts. This Release and 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 parties. Each party need not sign the same counterpart. SECTION 2.06. Entire Agreement; Third Party Beneficiaries. This Release and Agreement constitutes the entire agreement, and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof. Nothing contained in this Release and Agreement is intended to confer upon any person other than the parties hereto any benefit, right or remedy under or by reason of this Release and Agreement, except the persons referred to in Sections 1.01 and 1.02, who shall be third party beneficiaries of this Release and Agreement. 6 SECTION 2.07. Governing Law. This Release and Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof. SECTION 2.08. Assignment. Neither this Release and Agreement nor any of the rights, interests or obligations under this Release and Agreement shall be assigned, in whole or in part, by operation of law or otherwise by any of the parties without the prior written consent of the other parties. Any purported assignment without such consent shall be void; provided, however, the parties acknowledge and agree that the conversion of Newco in accordance with Section 2.01 of the Restructuring Agreement and the continuation of Newco as a result thereof shall be deemed not to be an assignment and shall not require any consent of any party. Subject to the preceding sentences, this Release and Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and assigns. SECTION 2.09. Enforcement; Consent to Service of Process. The parties agree that irreparable damage would occur in the event that any of the provisions of this Release and Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Release and Agreement and to enforce specifically the terms and provisions of this Release and Agreement in any New York state court or any Federal court located in the State of New York, this being in addition to any other remedy to which they are entitled at law or in equity. In addition, each of the parties hereto (a) consents to submit itself to the personal jurisdiction of any New York state court or any Federal court located in the State of New York in the event any dispute arises out of this Release and Agreement or any transaction contemplated in this Release and Agreement, (b) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, (c) agrees that it will not bring any action relating to this Release and Agreement or any transaction contemplated in this Release and Agreement in any court SECTION 2.10. Modification or Amendment. The parties hereto may modify or amend this Release and Agreement only by written agreement executed and delivered by duly authorized officers of the respective parties. At any time the parties hereto may waive compliance with any of the agreements or conditions contained herein. Any agreement on the part of a party to any such waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. The failure of any party to this Release and Agreement to assert any of its rights under this Release and Agreement or otherwise shall not constitute a waiver of such rights. SECTION 2.11. Nonsurvival of Representations and Warranties. None of the representations and warranties in this Release and Agreement shall survive the Effective Time (as defined in the Merger Agreement). This Section 2.11 shall not limit any covenant or agreement of the parties which by its terms contemplates performance after the Effective Time. 7 SECTION 2.12. Termination. In the event the Merger Agreement is terminated prior to the Effective Time, this Release and Agreement shall become null and void. 8 IN WITNESS WHEREOF, this Release and Agreement has been duly executed and delivered as of July 24, 2003, by the duly authorized officers of the parties hereto. IGEN INTERNATIONAL, INC., by /s/ Richard J. Massey _____________________________________ Name: Richard J. Massey Title: President and Chief Operating Officer IGEN INTEGRATED HEALTHCARE, LLC, by /s/ Richard J. Massey _____________________________________ Name: Richard J. Massey Title: President and Chief Operating Officer Related Companies: HYPERION CATALYSIS INTERNATIONAL, by /s/ Samuel J. Wohlstadter _____________________________________ Name: Samuel J. Wohlstadter Title: Chairman and Chief Executive Officer WELLSTAT BIOLOGICS CORPORATION, by /s/ Samuel J. Wohlstadter _____________________________________ Name: Samuel J. Wohlstadter Title: Chairman and Chief Executive Officer 9 WELLSTAT THERAPEUTICS CORPORATION, by /s/ Samuel J. Wohlstadter _____________________________________ Name: Samuel J. Wohlstadter Title: Chairman and Chief Executive Officer PROTEINIX CORPORATION, by /s/ Samuel J. Wohlstadter _____________________________________ Name: Samuel J. Wohlstadter Title: Chairman and Chief Executive Officer INTEGRATED CHEMICAL SYNTHESIZERS, INC., by /s/ Samuel J. Wohlstadter _____________________________________ Name: Samuel J. Wohlstadter Title: Chairman and Chief Executive Officer 10 EX-99.7 9 y88675exv99w7.txt GLOBAL CONSENT AGREEMENT EXHIBIT 99.7 GLOBAL CONSENT AND AGREEMENT GLOBAL CONSENT AND AGREEMENT (this "Agreement") dated as of July 24, 2003 among Roche Holding Ltd, a joint stock company organized under the laws of Switzerland ("Parent"), IGEN International, Inc., a Delaware corporation (the "Company"), IGEN Integrated Healthcare, LLC, a Delaware limited liability company and a wholly owned subsidiary of the Company ("Newco"), Meso Scale Diagnostics, LLC., a Delaware limited liability company ("MSD"), Meso Scale Technologies, LLC., a Delaware limited liability company ("MST"), Jacob Wohlstadter, an individual whose business address is MSD, 9238 Gaither Road, Gaithersburg, MD 20877 ("JW"), and JW Consulting Services, L.L.C., a Delaware limited liability company ("JWCS"). W I T N E S S E T H: WHEREAS, simultaneously with the execution and delivery of this Agreement, the Company, Newco, Parent and 66 Acquisition Corporation II, a Delaware corporation and a wholly owned subsidiary of Parent ("Sub"), are entering into an Agreement and Plan of Merger (the "Merger Agreement") pursuant to which, among other things and on the terms and subject to the conditions set forth therein, Sub will merge (the "Merger") with and into the Company; WHEREAS, simultaneously with the execution and delivery of this Agreement, the Company and Newco are entering into an agreement (the "Restructuring Agreement") pursuant to which, prior to the Effective Time (as defined in the Merger Agreement), the Restructuring (as defined in the Restructuring Agreement) will be effected, as part of which (a) certain of the assets of the Company, including the Company's limited liability membership interests in MSD, and the Company's rights under and in respect of the MSD Agreements (as defined below) will be transferred to Newco or one or more of Newco's Subsidiaries and (b) Newco or one or more of its Subsidiaries will assume the Assumed Liabilities (as defined in the Restructuring Agreement), including the Company's liabilities and obligations under and in respect of the MSD Agreements; WHEREAS, simultaneously with the execution and delivery of this Agreement, the Company, Newco, MSD, MST, JW and JWCS are entering into a certain letter agreement (the "Letter Agreement") that contemplates, among other things, certain agreements, arrangements and contributions in connection with the Transactions in consideration thereof and in consideration of the execution and delivery by MSD, MST, JW and JWCS of this Agreement; and WHEREAS, the Company and MST are the sole members of MSD; NOW, THEREFORE, the parties hereto agree as follows: ARTICLE 1 DEFINITIONS Section 1.01. Definitions. The following terms, as used herein, have the following meanings: "Action" means any claim, suit, action, arbitration, inquiry, investigation or other proceeding of any nature (whether criminal, civil, legislative, administrative, regulatory, prosecutorial or otherwise) by or before any arbitrator or Governmental Entity or similar Person or body. An "Affiliate" of any Person means another Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such first Person. For the avoidance of doubt, (i) none of MSD, MST, JW, JWCS, Hyperion Catalysis International, a California corporation, Wellstat Biologics Corporation, a Delaware corporation, Wellstat Therapeutics Corporation, a California corporation, Proteinix Corporation, a Delaware corporation, and Integrated Chemical Synthesizers, Inc., a Delaware corporation, is an Affiliate of the Company or Newco for purposes of this Agreement, and (ii) neither Genentech, Inc., a Delaware corporation, nor Chugai Pharmaceutical Co., Ltd, a Japanese company, is an Affiliate of Parent for purposes of this Agreement. "Consent to License Agreement" means the Consent by MSD and MST to the License Agreement and attached thereto. "Continuing Licensee Subsidiary" means IGEN LS LLC, a Delaware limited liability company and a wholly owned Subsidiary of the Company. "Covenants Not to Sue" means the Covenants Not to Sue dated as of the date hereof among Newco, Parent, R Diagnostics, MSD and MST. "Employment Agreement" means the Employment Agreement dated as of August 15, 2001 among MSD, the Company, MST and JW. "Governmental Entity" means any domestic or foreign (whether national, Federal, state, provincial, local or otherwise) government or any court of competent jurisdiction, administrative agency or commission or other governmental authority or instrumentality, domestic or foreign. "I/R Confidentiality Agreement" means the confidentiality agreement dated October 8, 2001 among the Company, R Diagnostics and F. Hoffmann-La Roche Ltd. "Joinder of the Ongoing Litigation Agreement" means the Joinder by MSD and MST to Section 3.3 and Article 8 of the Ongoing Litigation Agreement and attached thereto. 2 "Liabilities" means any and all debts, liabilities, commitments and obligations, whether fixed, contingent or absolute, matured or unmatured, liquidated or unliquidated, accrued or not accrued, known or unknown, whenever or however arising and whether or not the same would be required by generally accepted accounting principles to be reflected in financial statements or disclosed in the notes thereto. "License Agreement" means the License Agreement dated as of the date of this Agreement between the Company and the Continuing Licensee Subsidiary. "LLC Agreement" means the Limited Liability Company Agreement of MSD dated as of November 30, 1995 by and between MST and the Company. "M/R Confidentiality Agreement" means the confidentiality agreement dated April 28, 2003 among the Company, MSD, R Diagnostics and F. Hoffmann-La Roche Ltd. "MSD Agreements" means all of the Contracts (as defined below) and understandings, whether oral or written, between MSD or any of its Affiliates or employees, on the one hand, and the Company or any of its Subsidiaries (other than Newco), on the other hand, including, but not limited to the agreements set forth on Schedule A to this Agreement, other than any stock option agreements between the Company and any employee of MSD (including all stock option agreements with JW granted to him in his capacity as a consultant to the Company). "MSD Transaction Documents" means (i) with respect to MSD and MST, the Consent to License Agreement, the Joinder of the Ongoing Litigation Agreement, and the Covenants Not to Sue, (ii) with respect to the Company, the License Agreement and the Ongoing Litigation Agreement, (iii) with respect to Newco, the Covenants Not to Sue, (iv) with respect to Parent, the Covenants Not to Sue and the Ongoing Litigation Agreement and (v) with respect to R Diagnostics, the Ongoing Litigation Agreement. "Ongoing Litigation Agreement" means the Ongoing Litigation Agreement entered into on the date of this Agreement by and between the Company, R Diagnostics and Roche Diagnostics Corporation, an Indiana corporation. "PCR License Agreement" means the PCR License Agreement dated as of the date of this Agreement among Newco, R Diagnostics, F. Hoffmann-LaRoche Ltd, a Swiss limited liability company, and Roche Molecular Systems, Inc., a Delaware corporation. "PCR Services Agreement" means the License Agreement (Human IVD Services and Animal Diagnostic Services) dated as of the date of this Agreement 3 among Newco, R Diagnostics, F. Hoffmann-LaRoche Ltd, a Swiss limited liability company, and Roche Molecular Systems, Inc., a Delaware corporation. A "Person" means any individual, firm, corporation, partnership, company, limited liability company, trust, joint venture, association, Governmental Entity or other entity. "Post-Closing Covenants Agreement" means the Post-Closing Covenants Agreement dated as of the date of this Agreement among Parent, the Company and Newco. "R Diagnostics" means Roche Diagnostics GmbH, a German limited liability company. A "Subsidiary" of any Person means another Person, an amount of the voting securities or other voting ownership or voting partnership interests of which is sufficient to elect at least a majority of its Board of Directors or other governing body (or, if there are no such voting interests, 50% or more of the equity interests of which) is owned directly or indirectly by such first Person. For the avoidance of doubt, neither Genentech, Inc., a Delaware corporation, nor Chugai Pharmaceutical Co., Ltd, a Japanese company, shall be deemed to be a Subsidiary of Parent for purposes of this Agreement. "Transaction Agreements" means (i) this Agreement, (ii) the Merger Agreement, (iii) the Restructuring Agreement, (iv) the Post-Closing Covenants Agreement, (v) the Tax Allocation Agreement dated as of the date hereof among Parent, Sub, the Company and Newco, (vi) the Ongoing Litigation Agreement, (vii) the Release and Agreement dated as of the date hereof among the Company, Newco, Hyperion Catalysis International, Wellstat Biologics Corporation, Wellstat Therapeutics Corporation, Proteinix Corporation and Integrated Chemical Synthesizers, Inc., (viii) the License Agreement, (ix) the Improvements License Agreement dated as of the date hereof between R Diagnostics and the Company, (x) the Covenants Not to Sue, (xi) the PCR License Agreement and (xii) the PCR Services Agreement. "Transactions" means the transactions contemplated by this Agreement and the other Transaction Agreements. ARTICLE 2 REPRESENTATIONS AND WARRANTIES Except for Section 2.05, with respect to which only MSD, MST and JWCS shall be deemed to have made the representations and warranties set forth therein, each of (a) MSD and MST represents and warrants, severally and not jointly, to Parent, the Company, Newco, JW and JWCS, (b) each of Parent, the Company and Newco represents and warrants, severally and not jointly, to MSD, 4 MST, JW and JWCS and (c) each of JW and JWCS represents and warrants, jointly and severally, to Parent, the Company, Newco, MSD and MST, in each case as of the date hereof and as of the Effective Time, that: Section 2.01. Organization, Standing and Power. If such Person is not a natural Person, such Person is duly formed or organized, validly existing and in good standing under the laws of the jurisdiction in which it is organized (in the case of good standing, to the extent such jurisdiction recognizes such concept) and has all corporate or limited liability company powers, as applicable, governmental licenses, authorizations, permits, consents and approvals required to carry on its business as now conducted, except for such governmental licenses, authorizations, permits, consents and approvals the failure of which to have or obtain, individually or in the aggregate, would not reasonably be expected to have a material adverse effect on the business of such Person and such Person's Subsidiaries, taken as a whole. Section 2.02. Authority; Execution and Delivery; Enforceability. If such Person is not a natural Person, such Person has all requisite corporate or limited liability company power and authority, as applicable, to execute and deliver this Agreement and each MSD Transaction Document to which it is a party and to consummate the transactions contemplated hereby and thereby. If such Person is not a natural Person, the execution and delivery by such Person of this Agreement and each MSD Transaction Document to which it is a party and the consummation by such Person of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate or limited liability company action on the part of such Person. If such Person is a natural Person, such Person has the full legal capacity to enter into, execute and deliver this Agreement without the consent or approval of any other Person. Such Person has duly executed and delivered this Agreement and each MSD Transaction Document to which it is a party, and, assuming due execution and delivery hereof by each other party hereto and thereto, this Agreement and each MSD Transaction Document to which it is a party constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms. Section 2.03. No Conflicts; Consents. (a) The execution and delivery by such Person of this Agreement and each MSD Transaction Document to which it is a party do not, and the consummation of the transactions contemplated hereby and thereby and compliance with the terms hereof and thereof will not, conflict with, or result in any violation of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to loss of a material benefit under, or result in the creation of any lien upon any of the properties or assets of such Person or any Subsidiary of such Person under, any provision of (i) if such Person is not a natural Person, the charter, organizational or formation documents of such Person, (ii) any contract, lease, license, indenture, note, bond, agreement, permit, concession, franchise or other instrument (a "Contract") to which such Person or any Subsidiary of such Person is a party or by which their respective properties or 5 assets is bound or (iii) subject to the filings and other matters referred to in Section 2.03(b), any judgment, order or decree (a "Judgment") or statute, law, ordinance, rule or regulation whether foreign or domestic applicable to such Person or any Subsidiary of such Person or their respective properties or assets, other than, (A) in the case of clauses (ii) and (iii) above, any such items that, individually or in the aggregate, (x) in the case of each of Parent, MSD, MST, JW and JWCS only, would not reasonably be expected to have a material adverse effect on the business of such Person and such Person's Subsidiaries, taken as a whole, and (y) would not reasonably be expected to materially impair the ability of such Person or any Subsidiary of such Person to perform its obligations under this Agreement or any MSD Transaction Document to which it is a party or consummate the transactions contemplated hereby and thereby or (B) in the case of clauses (i), (ii) and (iii) above, any such items that are waived or cured by operation of this Agreement or the Letter Agreement. (b) No consent, approval, license, permit, order or authorization of, or registration, declaration or filing with, or permit from, any Governmental Entity, is required to be obtained or made by such Person or any Subsidiary of such Person in connection with the execution, delivery and performance by such Person or any Subsidiary of such Person of this Agreement or any MSD Transaction Document to which it is a party or the consummation of the transactions contemplated hereby and thereby, other than such items that the failure of which to obtain or make, individually or in the aggregate, (i) in the case of each of Parent, MSD, MST, JW and JWCS only, would not reasonably be expected to have a material adverse effect on the business of such Person and such Person's Subsidiaries, taken as a whole, and (ii) would not reasonably be expected to materially impair the ability of such Person or any Subsidiary of such Person to perform its obligations under this Agreement or any MSD Transaction Document to which it is a party or consummate the transactions contemplated hereby and thereby. Section 2.04. Brokers. No broker, investment banker, financial advisor or other Person is entitled to any broker's, finder's, financial advisor's or other similar fee or commission in connection with the Transactions based upon arrangements made by or on behalf of such Person, other than in the case of the Company, Lehman Brothers, Inc. Section 2.05. Ownership of MSD, MST and JWCS. Each of MSD, MST and JWCS hereby represents and warrants, severally and not jointly, to Parent and Newco, as of the date hereof and as of the Effective Time, that (i) Schedule B sets forth a true and complete list of all the members, and their respective membership interests and voting rights, of each of MSD, MST and JWCS and (ii) none of MSD, MST or JWCS has any members other than as set forth on Schedule B. 6 ARTICLE 3 CERTAIN AGREEMENTS Section 3.01. Consent. Each of JW, JWCS, MSD and MST (each, a "Consenting Party") hereby acknowledges receipt of a copy of each Transaction Agreement, and each Consenting Party has carefully reviewed, and consulted its legal advisors with respect to, each Transaction Agreement. Each Consenting Party hereby consents to the Transaction Agreements and the consummation of the Transactions, and grants all waivers and consents which are necessary under the MSD Agreements to permit the consummation of the Transactions and the performance by the Company, Newco, and each Consenting Party of their obligations under the Transaction Agreements in accordance with their terms. Notwithstanding the preceding sentence, (a) the foregoing consents shall not (i) apply to any act or omission which constitutes fraud in the inducement with respect to this Agreement, the Letter Agreement, any MSD Transaction Document or the Transactions, or (ii) affect any Consenting Party's rights to enforce this Agreement, the Letter Agreement, any MSD Transaction Document to which it is a party or any Transaction Agreement to which it is a third party beneficiary, in each case, in accordance with its respective terms, and (b) from and after the effectiveness of the Restructuring, all of the MSD Agreements will remain in full force and effect and will be enforceable against each of the Consenting Parties and Newco in accordance with their terms. Section 3.02. Acknowledgement and Consent. (a) In furtherance and not in limitation of Section 3.01, each Consenting Party acknowledges that, pursuant to the Restructuring Agreement and as part of the Restructuring, all of the Company's rights under and in respect of the MSD Agreements shall be assigned to, and all of the Company's Liabilities under and in respect of the MSD Agreements will be assumed by, Newco upon the effectiveness of the Restructuring (the "MSD Transfer"). (b) Each Consenting Party hereby consents to the MSD Transfer and, as of and with effect from the consummation of the MSD Transfer, unconditionally releases the Company from its obligations, duties and Liabilities (express and implied) under the MSD Agreements, whether arising before, at or after the MSD Transfer. Each Consenting Party expressly consents to and accepts the assumption by Newco of all the rights, obligations, duties and Liabilities (express and implied) of the Company under the MSD Agreements, whether arising before, at or after the MSD Transfer, and agrees to perform its obligations, duties and Liabilities (express or implied) under the MSD Agreements in accordance with their terms in favor of Newco. In this regard, MST hereby consents to the admission of Newco as a Class A Member, a Class B Member and a Class C Member of MSD, effective upon the effectiveness of the MSD Transfer, as a successor to the Company, in accordance with Sections 8 and 9 of the LLC Agreement and hereby waives compliance by the Company and Newco with the terms and conditions thereof for the purposes of such admission. Each of the foregoing events is conditioned upon the consummation of the MSD Transfer, 7 shall occur simultaneously with the MSD Transfer without any further action by any party, and, together with the MSD Transfer, shall have the effect of amending the MSD Agreements. (c) The Company, Newco and each Consenting Party accordingly agree that as of and with effect from the MSD Transfer, each of the MSD Agreements will cease to create or confer any rights or obligations on or as to the Company, except for the Company's confidentiality obligations thereunder, which shall remain in full force and effect notwithstanding the MSD Transfer, and each of the MSD Agreements will continue as an agreement among the parties thereto (other than the Company) and Newco on the same terms and conditions as those stated in such MSD Agreement. The Company, Newco, MSD and MST agree to amend and restate each such MSD Agreement to reflect such matters effective from the MSD Transfer. (d) Each Consenting Party acknowledges and agrees that, notwithstanding any provision of any MSD Agreement to the contrary, such Consenting Party shall not be entitled to any payment from the Company as a result of or in connection with the Transactions or the MSD Transfer, except as specifically provided in the Letter Agreement and except as provided in any stock option agreements between the Company and any employee of MSD (including all stock option agreements with JW granted to him in his capacity as a consultant to the Company). (e) As of and with effect from the consummation of the MSD Transfer, except for the rights of the Continuing Licensee Subsidiary under the License Agreement and the Consent to License Agreement, (i) Newco shall own all right, title and interest in and to any and all intellectual property and other proprietary and confidential information or materials owned by the Company as of the date hereof or benefits acquired by the Company between the date hereof and immediately prior to the consummation of the MSD Transfer (other than that owned by MSD, MST, JW or JWCS or such rights that expire, terminate or are otherwise disposed of in a manner not inconsistent with the MSD Agreements) to which MSD, MST, JW or JWCS has any direct or indirect rights or benefits (including patents, copyrights and trade secrets) pursuant to the MSD Agreements and (ii) the Company thereafter shall hold no interest in MSD nor shall it have possession of, or rights or access to, any proprietary or confidential information of MSD, MST, JW or JWCS, and the Company will not own or otherwise have rights or seek to own or otherwise have rights in any intellectual property or other proprietary information or materials which MSD, MST, JW or JWCS owns or to which MSD, MST, JW or JWCS otherwise has any direct or indirect rights or benefits (including patents, copyrights and trade secrets) pursuant to the MSD Agreements. Section 3.03. Certain Claims. (a) Parent shall not, and shall not permit any other Affiliate of Parent or encourage any other Person to, either before or after the Effective Time, assert any rights or pursue any actions or claims, 8 whether directly or on a derivative basis, against (i) any Consenting Party or any of its or his Affiliates or (ii) any of the current or former members of the board of managers, members, managers, officers, employees, consultants, advisors, attorneys, trustees or agents of any Consenting Party or any of its or his Affiliates (in each case, solely in their capacities as such), in each case for acts or omissions occurring (A) prior to the date of this Agreement or (B) after the date of this Agreement and prior to the Effective Time, whether known or unknown, and Parent shall not, and Parent shall not permit any Affiliate of Parent to, cooperate with any Person in the assertion of any such rights or pursuing any such actions or claims except (x) as required by subpoena or other judicial or legal process or (y) as required by any inquiry by a Governmental Entity, but in each case only to the extent such inquiry or requirement to cooperate has not arisen as a result of a breach of this Section 3.03(a); provided, however, that this Section 3.03(a) shall not (1) affect any Person's right to enforce any Transaction Agreement, any MSD Transaction Document, any I/R Agreement (as defined in the Restructuring Agreement) or any Newco I/R Agreement (as defined in the Restructuring Agreement) or any provision herein or therein in accordance with its terms, (2) apply to any act or omission which constitutes fraud in the inducement with respect to any Transaction Agreement, any MSD Transaction Document, any I/R Agreement or any Newco I/R Agreement or (3) apply to any action permitted or required by the Ongoing Litigation Agreement; provided further, however, that in the event this Agreement is terminated, this Section 3.03(a) shall be null and void and shall not operate as a waiver or release of any rights, actions, interests or claims that might have been asserted or pursued but for this Section 3.03(a). (b) No Consenting Party shall, and no Consenting Party shall permit any other Affiliate of such Consenting Party or encourage any other Person to, either before or after the Effective Time, assert any rights or pursue any actions or claims, whether directly or on a derivative basis, against (i) Parent or any of its Affiliates or (ii) any of the current or former directors, officers, employees, consultants, advisors, attorneys, trustees or agents of Parent or any of its Affiliates (in each case, solely in their capacities as such), in each case for acts or omissions occurring (A) prior to the date of this Agreement or (B) after the date of this Agreement and prior to the Effective Time, whether known or unknown, and such Consenting Party shall not, and shall not permit any Affiliate of such Consenting Party to, cooperate with any Person in the assertion of any such rights or pursuing any such actions or claims except (x) as required by subpoena or other judicial or legal process or (y) as required by any inquiry by a Governmental Entity, but in each case only to the extent such inquiry or requirement to cooperate has not arisen as result of a breach of this Section 3.03(b); provided, however, that this Section 3.03(b) shall not (1) affect any Person's right to enforce any Transaction Agreement, any MSD Transaction Document, any I/R Agreement or any Newco I/R Agreement or any provision herein or therein in accordance with its terms, (2) apply to any act or omission which constitutes fraud in the inducement with respect to any Transaction Agreement, any MSD Transaction Document, any I/R Agreement or any Newco I/R Agreement or (3) apply to any action permitted or 9 required by the Ongoing Litigation Agreement; provided further, however, that in the event this Agreement is terminated, this Section 3.03(b) shall be null and void and shall not operate as a waiver or release of any rights, actions, interests or claims that might have been asserted or pursued but for this Section 3.03(b). Section 3.04. No Change Of Control; Other Agreements. (a) Each of the Company, Newco, and each Consenting Party acknowledges and agrees that the execution and delivery of the Transaction Agreements does not, and the consummation of the Transactions will not, constitute a "Change in Control" as defined in the Joint Venture Agreement dated as of November 30, 1995 among MSD, MST and the Company, as amended, or the Employment Agreement. (b) Each of the Company, Newco, MSD and MST acknowledges and agrees that (i) upon the MSD Transfer, notwithstanding anything in the LLC Agreement to the contrary, (A) the Company shall be permitted to transfer its entire interest in MSD to Newco and (B) Newco shall be admitted as a member of MSD with respect to the transferred interest, shall be bound as a member by the LLC Agreement and shall execute and deliver to MSD and MST a signature page to the LLC Agreement (but Newco shall be deemed a party to, and shall be bound by, the LLC Agreement whether or not it delivers such signature page), (ii) Sections 8 and 9 of the LLC Agreement with respect to the transfer of the Company's interest in MSD to Newco are waived for purposes of the foregoing transfer and admission, and (iii) the Company shall have no right to receive any distributions that may be made by MSD following the MSD Transfer. (c) This Agreement is deemed to constitute written notice to MSD, as required pursuant to Section 2.7(c) of the IGEN/MSD License Agreement, dated as of November 30, 1995, as amended, concerning the Merger and the other Transactions. (d) Each of the Company, MSD, MST and JW acknowledges and confirms that the Employment Agreement dated as of August 1, 1997, among MSD, the Company, MST and JW, is null and void and was superceded by the Employment Agreement. ARTICLE 4 RELEASES Section 4.01. Releases. Effective immediately prior to the Effective Time, in consideration of mutual releases, covenants, licenses, agreements, rights and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Parent, as to itself and its past, present and future Affiliates (including, from and after the Effective Time, the Company), and its and their respective successors, predecessors, assigns, heirs, officers, directors, employees, consultants and trustees, on the one hand (in each case, solely in their capacities as such), and each Consenting Party, as to itself or himself and its or his past, present and future Affiliates, and its or his and their respective successors, predecessors, assigns, heirs, officers, members of the board of managers, members, managers, employees, consultants and trustees, on the other hand (in each case, solely in their capacities as such), hereby (a) releases, acquits and forever discharges the other and its or his past, 10 present and future Affiliates and its or his and their respective successors, predecessors, assigns, heirs, officers, directors, members of the board of managers, members, managers, employees, consultants and trustees (in each case, solely in their capacities as such), in respect of and from, and (b) agrees not to bring any Action against the other and its or his past, present and future Affiliates and its or his and their respective successors, predecessors, assigns, heirs, officers, directors, members of the board of managers, members, managers, employees, consultants and trustees (in each case, solely in their capacities as such) related to or arising out of, in the case of each of clause (a) and (b), any and all debts, demands, Actions, causes of action, suits, accounts, covenants, Contracts, agreements, torts, damages and any and all claims, defenses, offsets, Judgments, demands and Liabilities whatsoever, of every name and nature, both at law and in equity, known or unknown, suspected or unsuspected, accrued or unaccrued, which have been or could have been asserted against such other Person, which the releasing Person has or ever had which arise out of or in any way relate or are incidental to events, circumstances or actions taken by such other Person prior to or as of the Effective Time; provided, however, that the foregoing general release shall not (i) affect any Person's right to enforce any Transaction Agreement, any MSD Transaction Document or any Newco I/R Agreement or any provision herein or therein in accordance with its terms or (ii) apply to any act or omission which constitutes fraud in the inducement with respect to any Transaction Agreement, any MSD Transaction Document or any Newco I/R Agreement. For the purposes of this Section 4.01, no Newco Company (as defined in the Restructuring Agreement) is or ever has been an Affiliate of Parent. ARTICLE 5 MISCELLANEOUS Section 5.01. Nonsurvival of Representations and Warranties. None of the representations and warranties in this Agreement shall survive the Effective Time. This Section 5.01 shall not limit any covenant or agreement of the parties which by its terms contemplates performance after the Effective Time. Section 5.02. Notices. All notices, requests, claims, demands and other communications under this Agreement shall be in writing and shall be deemed given upon receipt by the parties at the following addresses (or at such other address for a party as shall be specified by like notice) of a fax followed by delivery of such notice by overnight courier of an international reputation: (a) if to Parent or, after the Effective Time, the Company, to: 11 Roche Holding Ltd Grenzacherstrasse 124 CH-4070 Basel Switzerland Attention: Bruno Maier Fax: +41 61 688 3196 with a copy to: Davis Polk & Wardwell 450 Lexington Avenue New York, NY 10017 Attention: Ulrika Ekman Fax: (212) 450-3800 (b) if to Newco or, prior to the Effective Time, the Company, to: IGEN International, Inc. 16020 Industrial Drive Gaithersburg, MD 20077 Attention: President Fax: (301) 208-3789 and: Joint Venture Operating Committee IGEN International, Inc. 16020 Industrial Drive Gaithersburg, MD 20077 Attention: Chairman Fax: (301) 208-3789 with a copy to: Cravath, Swaine & Moore LLP 825 Eighth Avenue New York, NY 10019 Attention: Philip A. Gelston Sarkis Jebejian Fax: (212) 414-3700 and: Potter Anderson & Corroon LLP Hercules Plaza, 6th Floor 1313 N. Market Street 12 Wilmington, DE 19801 Attention: Michael D. Goldman Fax: 302-658-1192 (c) if to MSD or MST, to: Meso Scale Diagnostics, LLC. 9238 Gaither Road Gaithersburg, MD 20877 Attention: President and Chief Executive Officer Fax: (301) 947-7240 with a copy to: Hogan & Hartson L.L.P. 555 Thirteenth Street, N.W. Washington, D.C. 20004 Attention: Robert J. Waldman Fax: (202) 637-5910 Section 5.03. Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any applicable law, or public policy, all other conditions 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 to the end that transactions contemplated hereby are fulfilled to the extent possible. Section 5.04. 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 parties. Each party need not sign the same counterpart. Section 5.05 . Entire Agreement; No Third-Party Beneficiaries. This Agreement (a) taken together with the other Transaction Agreements, the MSD Transaction Documents, the MSD Agreements, the Letter Agreement, the I/R Confidentiality Agreement, the letter agreement dated November 6, 2002 between the Company and R Diagnostics and the M/R Confidentiality Agreement, constitute the entire agreement, and supersede all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter of this Agreement; provided that as of and after the Effective Time, the I/R Confidentiality Agreement shall have no further force and effect and shall be superseded by Section 3.07 of the Post-Closing Covenants Agreement and (b) 13 except for the provisions of Section 3.03 and Section 4.01 of this Agreement, is not intended to confer upon any Person other than the parties any rights or remedies. Section 5.06. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof. Section 5.07. Amendments and Waivers. (a) Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by each party to this Agreement, or in the case of a waiver, by the party against whom the waiver is to be effective; provided that prior to the Effective Time any waiver by the Company shall also require the prior written consent of Parent. (b) No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law. Section 5.08. Assignment. Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned, in whole or in part, by operation of law or otherwise by any of the parties without the prior written consent of the other parties; provided, however, that the parties acknowledge and agree that the conversion of Newco in accordance with Section 2.01 of the Restructuring Agreement and the continuation of Newco as a result thereof shall be deemed not to be an assignment and shall not require any consent of any party. Any purported assignment without such consent shall be void. Subject to the preceding sentences, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and assigns. Section 5.09. Enforcement; Consent to Service of Process. (a) 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 or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in any Delaware state court or any Federal court of the United States of America sitting in the State of Delaware, this being in addition to any other remedy to which they are entitled at law or in equity. In addition, except as otherwise specifically provided in any other Transaction Agreement with respect to the parties thereto, each of the parties hereto (i) consents to submit itself to the personal jurisdiction of any Delaware state court or any Federal Court of the United States sitting in the State of Delaware in the event any dispute arises out of this Agreement or any 14 Transaction, (ii) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, (iii) agrees that it will not bring any action relating to this Agreement or any Transaction in any court other than in any Delaware state court or any Federal court of the United States of America sitting in the State of Delaware and (iv) waives any right to trial by jury with respect to any action related to or arising out of this Agreement or any Transaction. (b) Parent hereby appoints Roche Holdings, Inc., with offices on the date of this Agreement at 1201 N. Orange Street, Suite 1050, Wilmington, Delaware 19801, as its authorized agent (the "Authorized Agent"), upon whom process may be served in any suit, action or proceeding arising out of or relating to this Agreement or any Transaction that may be instituted in any court described in Section 5.09(a). Parent agrees to take any and all reasonable action, including the filing of any and all documents, that may be necessary to establish and continue such appointment in full force and effect as aforesaid. Parent agrees that service of process upon the Authorized Agent shall be, in every respect, effective service of process upon Parent. Section 5.10. Termination. In the event the Merger Agreement is terminated pursuant to its terms prior to the Effective Time, this Agreement shall automatically and simultaneously terminate. In the event of such termination, no party shall have any liability to any other party pursuant to this Agreement. It is understood that consummation of the Merger shall not constitute a termination of this Agreement. Section 5.11. Interpretation. When a reference is made in this Agreement to a Section, Schedule or party, such reference shall be to a Section of or a Schedule or party to this Agreement unless otherwise indicated. Whenever the words "include", "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation". The words "hereof", "herein" and "hereby" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The words "date hereof" shall refer to the date of this Agreement. The term "or" is not exclusive. The word "extent" in the phrase "to the extent" shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply "if". The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms. Any agreement or instrument that is defined or referred to herein or in any agreement or instrument that is referred to herein, means such agreement or instrument as from time to time amended, modified or supplemented. References to a Person are also to its permitted successors and assigns. 15 IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first written above. ROCHE HOLDING LTD By: /s/ D. Franz B. Humer ------------------------------------- Name: D. Franz B. Humer Title: President and Chairman By: /s/ Erich Hunziker ------------------------------------- Name: Erich Hunziker Title: Chief Financial Officer IGEN INTERNATIONAL, INC. By: /s/ Samuel J. Wohlstadter ------------------------------------- Name: Samuel J. Wohlstadter Title: Chairman and Chief Executive Officer IGEN INTEGRATED HEALTHCARE, LLC By: /s/ Richard J. Massey ------------------------------------- Name: Richard J. Massey Title: President and Chief Operating Officer MESO SCALE DIAGNOSTICS, LLC. By: /s/ J. Wohlstadter ------------------------------------- Name: Jacob Wohlstadter Title: President and Chief Executive Officer MESO SCALE TECHNOLOGIES, LLC. By: /s/ J. Wohlstadter ------------------------------------- Name: Jacob Wohlstadter Title: President and Chief Executive Officer JACOB WOHLSTADTER /s/ J. Wohlstadter ----------------------------------- Name: Jacob Wohlstadter JW CONSULTING SERVICES, L.L.C. By: /s/ J. Wohlstadter ----------------------------------- Name: Jacob Wohlstadter Title: President and Chief Executive Officer SCHEDULE A MSD AGREEMENTS 1. Joint Venture Agreement dated as of November 30, 1995, as amended, among IGEN International, Inc. (the "Company"), Meso Scale Diagnostics, LLC. ("MSD") and Meso Scale Technologies, LLC. ("MST"). 2. Limited Liability Company Agreement of Meso Scale Diagnostics, LLC. dated as of November 30, 1995, as amended, between the Company and MST. 3. IGEN/MSD License Agreement dated as of November 30, 1995, as amended, between the Company and MSD. 4. MSD/MST Sublicense Agreement, dated as of November 30, 1995, as amended, among the Company, MSD and MST. 5. License Agreement dated as of November 30, 1995 among the Company, MSD and MST. 6. Employment Agreement dated as of August 15, 2001 among the Company, MSD, MST and Jacob N. Wohlstadter ("JW"). 7. Consulting Agreement dated as of August 15, 2001 between the Company and JW. 8. Letter agreement dated August 15, 2001, as amended, among the Company, MSD and MST regarding employees. 9. Letter agreement dated August 15, 2001, as amended, among the Company, MSD and MST regarding equipment. 10. Letter agreement dated August 15, 2001 among the Company, JW and JW Consulting Services, L.L.C. ("JWCS") regarding insurance. 11. Letter agreement dated August 15, 2001 among the Company, MSD, MST and JW regarding litigation and settlement fees and expenses. 12. Letter agreement dated August 15, 2001 among the Company, MSD and JW regarding certain advisory and related activities. 13. Letter agreement dated November 30, 1995 between the Company and JW regarding indemnification. A-1 14. Indemnification Agreement dated as of October 26, 2001 between the Company and JW. 15. Indemnification Agreement effective as of November 30, 1996 between the Company, JW and JWCS. 16. Agreement of Sublease for space at 9905A Gable Ridge Terrace, dated August 15, 2001, between the Company and MSD. 17. Agreement of Sublease for space at 9905D Gable Ridge Terrace, dated August 15, 2001, between the Company and MSD. 18. Agreement of Sublease for space at 9905B Gable Ridge Terrace, dated August 15, 2001, between the Company and MSD. 19. Agreement of Sublease for space at 9915A Gable Ridge Terrace, dated August 15, 2001, between the Company and MSD. 20. Agreement of Sublease for space at 9907C Gable Ridge Terrace, dated August 15, 2001, between the Company and MSD. 21. Agreement of Sublease for space at 9141 Industrial Court, dated August 15, 2001, between the Company and MSD. 22. Agreement of Sublease for space at 9101-9169 Arbuckle Drive, dated August 15, 2001, between the Company and MSD. 23. Agreement of Sublease for space at 8000 West Park Drive, dated August 15, 2001, between the Company and MSD. 24. Agreement of Sublease for space at 16020 Industrial Drive (Shared with the Company), dated August 15, 2001, between the Company and MSD. 25. Agreement of Sublease for space at 9149-9161 Industrial Court (includes "Clean Room"), dated August 15, 2001, between the Company and MSD. 26. Agreement of Sublease for space at 9234-9246 Gaither Road, dated August 15, 2001, between the Company and MSD. 27. Letter Agreement dated March 12, 2003 by and among the Company, MSD, MST, JWCS and JW, amending the MSD Agreements with respect to the formation of MSD Europe, L.L.C. 28. Letter agreement among MSD, the Company and MST dated January 30, 2001 A-2 29. Letter agreement among MSD, the Company and MST dated November 29, 2000 30. Letter agreement among MSD, the Company and MST and the attached non-binding term sheet dated February 20, 2001 31. Letter agreement among JW, MSD and the Company dated August 15, 2001 32. Employment Agreement among MSD, the Company, MST and JW dated as of August 1, 1997 33. Confidentiality agreement dated April 28, 2003 among the Company, MSD, R Diagnostics and F. Hoffmann-La Roche Ltd. 34. Letter agreement dated the date of the Agreement among the Company, Newco, MSD, MST, JW and JWCS A-3 SCHEDULE B OWNERSHIP OF MSD AND MST Meso Scale Diagnostics, LLC. The members of Meso Scale Diagnostics, LLC. ("MSD") consist of IGEN International, Inc. ("IGEN") and Meso Scale Technologies, LLC. ("MST"). The membership interests of IGEN and MST in MSD are as follows: Class A (voting) interest: 31% held by IGEN and 69% held by MST Class B (non-voting) interest: 100% held by IGEN and none held by MST Class C (non-voting) interest: 100% held by IGEN and none held by MST The voting rights of IGEN and MST with respect to MSD are set forth in the Joint Venture Agreement, dated as of November 30, 1995, among MSD, MST and IGEN, as amended, and in the MSD Limited Liability Company Agreement, dated as of November 30, 1995, between IGEN and MST, as amended. Meso Scale Technologies, LLC. The sole member of MST is Jacob N. Wohlstadter, who holds 100% of the membership interests and all voting rights associated therewith. JW Consulting Services, LLC. The sole member of JW Consulting Services, LLC. is Jacob N. Wohlstadter, who holds 100% of the membership interests and all voting rights associated therewith. B-1 EX-99.8 10 y88675exv99w8.txt LETTER AGREEMENT EXHIBIT 99.8 IGEN INTERNATIONAL, INC. 16020 INDUSTRIAL DRIVE GAITHERSBURG, MD 20877 July 24, 2003 Meso Scale Diagnostics, LLC. 9238 Gaither Road Gaithersburg, MD 20877 Attn: Jacob N. Wohlstadter Meso Scale Technologies, LLC., JW Consulting Services, L.L.C. and Jacob N. Wohlstadter Dear Mr. Wohlstadter: As you are aware, IGEN International, Inc., a Delaware corporation ("IGEN"), and Roche Holding Ltd, a joint stock company organized under the laws of Switzerland ("PARENT"), have agreed to enter into certain transactions, which include: (i) the merger of 66 Acquisition Corporation II ("MERGER SUB"), a Delaware corporation and wholly-owned subsidiary of Parent, with and into IGEN pursuant to the Agreement and Plan of Merger, dated as of the date hereof (the "MERGER AGREEMENT"), among IGEN, IGEN Integrated Healthcare, LLC, a Delaware limited liability company ("NEWCO"), Merger Sub and Parent (the "MERGER"), (ii) the transfer, prior to the Merger, of certain of IGEN's assets to Newco (or to one or more of Newco's subsidiaries), the assumption by Newco (or one or more of Newco's subsidiaries) of certain of the liabilities of IGEN, and the conversion of Newco from a Delaware limited liability company to a Delaware corporation pursuant to the Restructuring Agreement, dated as of the date hereof, between IGEN and Newco (the "Restructuring"), and (iii) the execution and delivery of certain other transaction agreements in connection with the foregoing. As part of the Restructuring, IGEN has agreed to contribute, transfer and assign to Newco all of IGEN's right, title and interest in and to the agreements previously entered into by two or more of the parties to this letter agreement, as set forth on SCHEDULE 1 attached hereto (collectively, the "JOINT VENTURE DOCUMENTS"), and Newco has agreed to assume all obligations and liabilities of IGEN under the Joint Venture Documents. In connection with the Proposed Transactions (as defined herein) and as a condition to their willingness to execute and deliver the Merger Agreement and the other agreements referenced above, IGEN and Parent have requested that Meso Scale Diagnostics, LLC. ("MSD"), Meso Scale Technologies, LLC. ("MST"), Jacob N. Wohlstadter ("JW") and JW Consulting Services, L.L.C. ("JWCS") execute and deliver one or more of the documents listed on SCHEDULE 2 to this letter agreement, including the Global Consent and Agreement, dated as of the date hereof, among Parent, IGEN, Newco, MSD, MST, JW and JWCS (the "GLOBAL CONSENT"). In consideration of the execution and delivery of such documents by MSD, MST, JW and JWCS, (i) IGEN and MST hereby agree to extend the expiration of the term of the Joint Venture Mr. Jacob N. Wohlstadter July 24, 2003 Page 2 Agreement as set forth in Section 8.1 thereof in accordance with the terms of this letter agreement (but not IGEN's obligation to provide funding to MSD under the Joint Venture Agreement other than pursuant to the terms of this letter agreement), (ii) Newco hereby agrees to make or cause to be made to MSD by wire transfer the Closing Payment (as defined herein), and IGEN hereby agrees to provide Interim Funding (as defined herein) to MSD, in accordance with the terms of this letter agreement and (iii) the parties to this letter agreement hereby agree to be bound by the other agreements and understandings set forth in this letter agreement. For purposes of this letter agreement, "PROPOSED TRANSACTIONS" shall have the same meaning as the term "Transactions" as defined in the Global Consent. 1. Closing Payment and Interim Funding. In the event the Merger is consummated, on the first business day following the date of the Effective Time (as defined in the Merger Agreement) of the Merger, Newco shall make or cause to be made to MSD by wire transfer a Class C capital contribution in the amount of U.S. $37.5 million (the "CLOSING PAYMENT"); provided, however, that in the event the date of the Effective Time has not occurred prior to December 1, 2003 (the expiration of IGEN's existing obligation to provide committed funding to MSD under the approved 2003 budget), IGEN shall provide continued funding to MSD to be paid monthly on the first day of each month commencing on December 1, 2003 in an amount per month equal to 1/12th of the aggregate committed funding of IGEN under the approved 2003 budget pursuant to the Joint Venture Agreement (the "INTERIM FUNDING") until the earlier to occur of (i) the date of the Effective Time or (ii) the termination of the Merger Agreement in accordance with its terms, which Interim Funding shall reduce the amount of any Closing Payment and shall be treated as a Class C capital contribution to MSD. In the event the date of the Effective Time does not occur, MSD shall not have any obligation to repay any amounts provided to MSD as Interim Funding pursuant to this letter agreement or otherwise (except to the extent IGEN is entitled to receive distributions on the Class C interests pursuant to the Joint Venture Documents). 2. Assignment of IGEN's Rights Hereunder to Newco. MST, MSD, JWCS and JW acknowledge that, upon the effectiveness of the Restructuring, this letter agreement, and all of IGEN's rights and obligations hereunder, shall be assigned by IGEN to Newco. 3. Consents. IGEN consents to MSD and MST granting the consents and joining in the licenses as set forth in the Consent to License Agreement. 4. Joint Venture Agreement Extension. Notwithstanding anything in the Joint Venture Agreement to the contrary, the term of the Joint Venture Agreement as set forth in Section 8.1 thereof shall expire on the later of (i) November 30, 2003 or (ii) the earlier of (a) the date of the Effective Time or (b) the termination of the Merger Agreement prior to the Effective Time in accordance with its terms; provided that IGEN's obligation to provide funding to MSD under the Joint Venture Agreement beyond November 30, 2003 shall not be extended other than pursuant to the terms of this letter agreement. 5. Developments. IGEN confirms and agrees that it will deliver a copy of all tangible items and electronic records or files included within the Developments (as defined in Section 3.6 of the Joint Venture Agreement) to MSD, and, upon MSD's request, agrees to provide MSD with Mr. Jacob N. Wohlstadter July 24, 2003 Page 3 reasonable access to copies of tangible items and electronic records or files included within the Developments in IGEN's possession or control. 6. Confidentiality. Notwithstanding the terms and conditions of any of the Joint Venture Documents, MSD may disclose the terms and conditions of one or more of the Joint Venture Documents and Confidential Information (as defined in Section 5.1 of the Joint Venture Agreement) to one or more third parties in connection with a proposed sale, acquisition, merger, financing or other similar transaction (including strategic collaborations) involving MSD (including disclosure of such information as required by a governmental rule or regulation and/or as reasonably requested by a third party to conduct a due diligence review) so long as (i) MSD provides written notice of such disclosure or proposed disclosure (any such notice to be kept confidential by the recipient thereof and not to be disclosed to any third party) to IGEN or, from and after the Effective Time, if any, Newco, no later than 30 days following such disclosure or, if earlier, its agreement to provide such disclosure, and (ii) each third party agrees to maintain the disclosed terms and conditions of the Joint Venture Documents and Confidential Information as confidential and to not disclose such information to any third party other than its attorneys, accountants and other professional advisors who agree to maintain such information as confidential and to not further disclose such information to any third party. 7. Confirmation Regarding Treatment of Options. IGEN confirms and agrees that (i) on May 9, 1997 IGEN granted to JW a ten-year non-qualified stock option to purchase 180,000 shares of common stock of IGEN at the exercise price per share specified therein and (ii) effective August 1, 2000 IGEN granted to JW a ten-year non-qualified stock option to purchase 75,000 shares of common stock of IGEN at the exercise price per share specified therein, pursuant to IGEN's 1994 Stock Option Plan (collectively, the "JW OPTIONS"). Consistent with Section 7.04 of the Merger Agreement, such JW Options shall be deemed "Company Stock Options" and shall be cancelled upon the occurrence of the Effective Time and JW, as the holder of such options, shall be entitled to receive the consideration described therein as payable to holders of Company Stock Options. 8. Representations and Warranties. Each of the parties to this letter agreement represents and warrants to the other parties to this letter agreement that the execution, delivery and performance of this letter agreement have been duly authorized by such party (including in the case of IGEN, by the Joint Venture Operating Committee of the Board of Directors of IGEN), that this letter agreement constitutes a valid and binding obligation of such party, enforceable in accordance with its terms, that such party has the right, power and authority to grant the rights and perform the obligations hereunder and under the Joint Venture Documents, and that neither the execution and delivery of this letter agreement nor the consummation of the performance of such party's obligations under this letter agreement constitutes a violation of, or default under, or conflicts with, (i) any terms of the articles of incorporation, bylaws or other organizational documents, as applicable, of such party, (ii) any order, judgment or decree of any court or governmental body binding upon or affecting such party, or (iii) any contract, commitment or other agreement or understanding to which such party is a party or by which it is bound. 9. Termination. In the event the Merger Agreement is terminated pursuant to its terms prior Mr. Jacob N. Wohlstadter July 24, 2003 Page 4 to the Effective Time, this letter agreement shall automatically and simultaneously terminate. In the event of such termination, no party shall have any liability to any other party pursuant to this letter agreement, except that IGEN will remain liable for any accrued and unpaid Interim Funding as of the date of such termination. It is understood that consummation of the Merger shall not constitute a termination of this letter agreement. 10. Miscellaneous. This letter agreement and the terms and conditions hereof (including payments to be made after the date hereof) shall survive the expiration of the term of the Joint Venture Agreement or the termination for any reason of the Joint Venture Agreement. This letter agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. This letter agreement may not be assigned by any party without the prior written consent of the other parties hereto, except (i) that the parties acknowledge and agree that the conversion of Newco in accordance with Section 2.01 of the Restructuring Agreement (as defined in the Merger Agreement) and the continuation of Newco as a result thereof shall be deemed not to be an assignment and shall not require the consent of any party and (ii) for the assignment by IGEN to Newco or an assignee described in the foregoing clause (i) in accordance with the provisions of paragraph 2 above. This letter agreement shall be deemed to modify and amend the Joint Venture Documents to the extent necessary to reflect the matters addressed in this letter agreement. It is agreed that the parties to this letter agreement shall be entitled, in addition to any and all other remedies, to an injunction or injunctions to prevent breaches of this letter agreement and to enforce specifically the terms and provisions of this letter agreement. This letter agreement shall be governed by and construed in accordance with Delaware law (excluding choice of law principles) except for those provisions applicable to a specific Joint Venture Document, in which case the governing law provision set forth in such Joint Venture Document shall apply. Any provision of this letter agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by each party to this letter agreement, or, in the case of a waiver, by the party against whom the waiver is to be effective. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law. Please confirm that the foregoing accurately sets forth our agreement with respect to the matters described in this letter agreement by signing in the space provided below and returning a copy to IGEN's General Counsel. Sincerely, IGEN INTERNATIONAL, INC. By: /s/ Samuel J. Wohlstadter ---------------------------- Name: Samuel J. Wohlstadter Title: Chairman and Chief Executive Officer Mr. Jacob N. Wohlstadter July 24, 2003 Page 5 AGREED UPON AND ACCEPTED: IGEN INTEGRATED HEALTHCARE, LLC By: /s/ Richard J. Massey ------------------------------------ Name: Richard J. Massey Title: President and Chief Operating Officer MESO SCALE DIAGNOSTICS, LLC. By: /s/ J. Wohlstadter ------------------------------------- Jacob N. Wohlstadter President and Chief Executive Officer MESO SCALE TECHNOLOGIES, LLC. By: /s/ J. Wohlstadter ------------------------------------- Jacob N. Wohlstadter President and Chief Executive Officer JW CONSULTING SERVICES, L.L.C. By: /s/ J. Wohlstadter ------------------------------------ Jacob N. Wohlstadter /s/ J. Wohlstadter - ---------------------------------------- JACOB N. WOHLSTADTER SCHEDULE 1 LIST OF JOINT VENTURE DOCUMENTS 1. Joint Venture Agreement dated as of November 30, 1995, as amended, among IGEN, MSD and MST ("JOINT VENTURE AGREEMENT"). 2. Limited Liability Company Agreement of Meso Scale Diagnostics, LLC. dated as of November 30, 1995, as amended, between IGEN and MST. 3. IGEN/MSD License Agreement dated as of November 30, 1995, as amended, between IGEN and MSD. 4. MSD/MST Sublicense Agreement, dated as of November 30, 1995, as amended, among IGEN, MSD and MST. 5. License Agreement dated as of November 30, 1995 among IGEN, MSD and MST. 6. Employment Agreement dated as of August 15, 2001 among IGEN, MSD, MST and JW. 7. Consulting Agreement dated as of August 15, 2001 between IGEN and JW ("CONSULTING AGREEMENT"). 8. Letter agreement dated August 15, 2001, as amended, among IGEN, MSD and MST regarding employees. 9. Letter agreement dated August 15, 2001, as amended, among IGEN, MSD and MST regarding equipment. 10. Letter agreement dated August 15, 2001 among IGEN, JW and JWCS regarding insurance. 11. Letter agreement dated August 15, 2001 among IGEN, MSD, MST and JW regarding litigation and settlement fees and expenses. 12. Letter agreement dated August 15, 2001 among IGEN, MSD and JW regarding certain advisory and related activities. 13. Letter agreement dated November 30, 1995 between IGEN and JW regarding indemnification. 14. Indemnification Agreement dated as of October 26, 2001 between IGEN and JW. 15. Indemnification Agreement effective as of November 30, 1996 between IGEN, JW and JWCS. 16. Agreement of Sublease for space at 9905A Gable Ridge Terrace, dated August 15, 2001, between IGEN and MSD. 17. Agreement of Sublease for space at 9905D Gable Ridge Terrace, dated August 15, 2001, between IGEN and MSD. 18. Agreement of Sublease for space at 9905B Gable Ridge Terrace, dated August 15, 2001, between IGEN and MSD. 19. Agreement of Sublease for space at 9915A Gable Ridge Terrace, dated August 15, 2001, between IGEN and MSD. 20. Agreement of Sublease for space at 9907C Gable Ridge Terrace, dated August 15, 2001, between IGEN and MSD. 21. Agreement of Sublease for space at 9141 Industrial Court, dated August 15, 2001, between IGEN and MSD. 22. Agreement of Sublease for space at 9101-9169 Arbuckle Drive, dated August 15, 2001, between IGEN and MSD. 23. Agreement of Sublease for space at 8000 West Park Drive, dated August 15, 2001, between IGEN and MSD. 24. Agreement of Sublease for space at 16020 Industrial Drive (Shared with IGEN), dated August 15, 2001, between IGEN and MSD. 25. Agreement of Sublease for space at 9149-9161 Industrial Court (includes "Clean Room"), dated August 15, 2001, between IGEN and MSD. 26. Agreement of Sublease for space at 9234-9246 Gaither Road, dated August 15, 2001, between IGEN and MSD. 27. Letter agreement dated March 12, 2003 by and among IGEN, MSD, MST, JWCS and JW, amending the Joint Venture Documents with respect to the formation of MSD Europe, L.L.C. 28. Letter agreement among MSD, IGEN and MST dated January 30, 2001. 29. Letter agreement among MSD, IGEN and MST dated November 19, 2000. 30. Letter agreement among MSD, IGEN and MST and the attached non-binding term sheet dated February 20, 2001. 31. Confidentiality agreement dated April 28, 2003 among IGEN, MSD, Roche Diagnostics GmbH and F. Hoffman-La Roche Ltd. SCHEDULE 2 LIST OF DOCUMENTS REGARDING PROPOSED TRANSACTIONS 1. Covenants Not to Sue (a copy of which is attached to this Schedule 2). 2. Consent by Meso Scale Diagnostics, LLC. and Meso Scale Technologies, LLC. to License Agreement (the "CONSENT TO LICENSE AGREEMENT") (a copy of which is attached to this Schedule 2). 3. Global Consent and Agreement (a copy of which is attached to this Schedule 2). 4. Joinder by Meso Scale Diagnostics, LLC. and Meso Scale Technologies, LLC. to Section 3.3 and Article 8 of the Ongoing Litigation Agreement (as defined in the Merger Agreement, a copy of which is attached to this Schedule 2). EX-99.9 11 y88675exv99w9.txt LETTER AGREEMENT EXHIBIT 99.9 IGEN Integrated Healthcare, LLC 16020 Industrial Drive Gaithersburg, MD 20877 July 24, 2003 Mr. Samuel J. Wohlstadter c/o IGEN International, Inc. 16020 Industrial Drive Gaithersburg, MD 20877 Dear Sam: We refer to the Agreement and Plan of Merger, draft dated as of July 24, 2003 (the "Merger Agreement"), among Roche Holding Ltd, 66 Acquisition Corporation II, IGEN International, Inc. ("IGEN") and IGEN Integrated Healthcare, LLC ("Newco"). Terms used herein and not defined shall have the meanings assigned to such terms in the Merger Agreement. At the request of the Board of Directors of IGEN and as an accommodation to facilitate completion of the transactions contemplated by the Merger Agreement, you hereby agree to subscribe for a new series of preferred stock to be issued by Newco following its conversion into a corporation for an aggregate cash amount of $7,500,000 (the "Purchase Amount"). The Purchase Amount shall be reduced by any reduction agreed to by the parties to the Letter Agreement (as defined below) in the aggregate amount Newco is obligated to pay to MSD (as defined below) pursuant to Section 1 of the Letter Agreement and shall be payable at such time and from time to time as Newco is obligated to pay MSD an aggregate amount in excess of $30,000,000 pursuant to Section 1 of the Letter Agreement, on substantially the terms specified in the Summary of Principal Terms and Conditions attached hereto as Exhibit A (the "Term Sheet"). For the avoidance of doubt, the aggregate amount to be paid pursuant to Section 1 of the Letter Agreement includes any Interim Funding provided pursuant to Section 1 of the Letter Agreement. As used herein, "Letter Agreement" means the letter agreement dated as of July 24, 2003, among IGEN, Newco, Meso Scale Diagnostics LLC. ("MSD"), Meso Scale Technologies, LLC., JW Consulting Services, L.L.C. and Jacob N. Wohlstadter. This letter shall not be assignable by any party without the prior written consent of each other party (and any purported assignment without such consent shall be null and void), except that (a) you may assign this letter without Newco's consent (provided, that such assignment shall not relieve you of any of your obligations hereunder) and (b) Newco may assign this letter to any other entity the common stock of which will be distributed to IGEN's stockholders in the transactions contemplated by the Merger Agreement. This letter is intended to be solely for the benefit of the parties hereto and is not intended to confer any benefits upon, or create any rights in favor of, any person other than the parties hereto. This letter may not be amended or waived except by an instrument in writing signed by each party. This letter may be executed in any number of counterparts, each of which shall be an original, and all of which, when taken together, shall constitute one agreement. Delivery of an executed signature page of this letter by facsimile transmission shall be effective as delivery of a manually executed counterpart hereof. This letter shall be governed by, and construed in accordance with, the laws of the State of Delaware. -2- If the foregoing correctly sets forth our binding agreement, please indicate your acceptance of the terms hereof (including the Term Sheet) by returning to us an executed counterpart hereof. Very truly yours, IGEN INTEGRATED HEALTHCARE, LLC By: /s/ Richard J. Massey ------------------------------ Name: Richard J. Massey Title: President and Chief Operating Officer Accepted and agreed to as of the date first written above by: SAMUEL J. WOHLSTADTER, By: /s/ Samuel J. Wohlstadter ------------------------------- Name: Samuel J. Wohlstadter -3- EXHIBIT A IGEN Integrated Healthcare, LLC ------------------------------- $7,500,000 Preferred Stock -------------------------- Summary of Principal Terms and Conditions ----------------------------------------- Stock Subscription: Pursuant to a Stock Subscription Agreement - ------------------ (the "Stock Subscription Agreement") to be entered into between IGEN Integrated Healthcare LLC, a Delaware limited liability company that will be converted into a corporation ("Newco"), and Samuel J. Wohlstadter ("SJW"), at the Effective Time SJW will purchase from Newco newly issued shares of Newco's preferred stock, par value $1.00 per share (the "Newco Preferred Stock"), for an aggregate cash amount of $7,500,000 (the "Purchase Amount"). The Purchase Amount shall be reduced by any reduction agreed to by the parties to the Letter Agreement (as defined below) in the aggregate amount Newco is obligated to pay to MSD pursuant to Section 1 of the Letter Agreement and shall be payable at such time and from time to time as Newco is obligated to pay MSD an aggregate amount in excess of $30,000,000 pursuant to Section 1 of the Letter Agreement. For the avoidance of doubt, the aggregate amount to be paid pursuant to Section 1 of the Letter Agreement includes any Interim Funding provided pursuant to Section 1 of the Letter Agreement. "Letter Agreement" means the letter agreement dated as of July 24, 2003, among IGEN, Newco, Meso Scale Diagnostics LLC. ("MSD"), Meso Scale Technologies, LLC., JW Consulting Services, L.L.C. and Jacob N. Wohlstadter. Use of Proceeds: Newco shall use the Purchase Proceeds to make - --------------- Class C capital contributions to Meso Scale Diagnostics, LLC., a Delaware limited liability company ("MSD"), in exchange for Class C membership interests of MSD ("Related Class C Interests"). Liquidation Preference: Each share of Newco Preferred Stock will have - ---------------------- a liquidation preference of $0.01 per share, which is the amount a holder of one share of Newco Preferred Stock would be entitled to receive if Newco were liquidated. Other Economic Characteristics: Except for its liquidation preference, the - ------------------------------ economic characteristics of the Newco Preferred Stock will mirror, in all respects, Newco's economic interest in the Related Class C Interests. A proportionate part of the Newco Preferred Stock will be redeemed in connection with any redemption by MSD with respect to the Related Class C Interests at a price identical to the redemption price paid to Newco for the Related Class C Interests. No distributions on the Newco Preferred Stock will be paid unless and until "Distributions" (as defined in the Limited Liability Company Agreement of MSD) are paid in respect of the Related Class C Interests, in which event distributions will be paid on the Newco Preferred Stock in the same manner and amount as such "Distributions." Redemption: Newco may redeem any outstanding Newco - ---------- Preferred Stock for $0.01 per share after such time as Newco is no longer entitled to receive any "Distributions" (as defined in the Limited Liability Company Agreement of MSD) with respect to Related Class C Interests. Ranking: Pari passu with Newco's existing and future - ------- preferred stock. Voting and Approval Rights: The holders of shares of the Newco Preferred - -------------------------- Stock will be entitled to all voting rights required by the DGCL and will be entitled in the aggregate to 1000 votes on all matters on which the holders of Newco common stock may vote. In addition, Newco will not consent to any adverse change to the terms of the Related Class C Interests without the consent of the holder of the Newco Preferred Stock. No Restrictions on Transfer: The Newco Preferred Stock will be - --------------------------- transferable, subject to applicable restrictions of Federal Securities Laws. Condition to Obligation to The occurrence of the Effective Time. - -------------------------- Purchase: - -------- -2- -----END PRIVACY-ENHANCED MESSAGE-----