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Item 1.01. Entry into a Material Definitive Agreement
On April 21,
2005, Shire Pharmaceutical Group plc, a public limited company organized
under the laws of England and Wales (Shire),
Transkaryotic Therapies, Inc., a Delaware corporation (TKT),
and Sparta Acquisition Corporation, a Delaware corporation and a wholly-owned
subsidiary of Shire (the Merger Subsidiary), entered
into an Agreement and Plan of Merger (the Acquisition Agreement).
In connection with the Acquisition Agreement, (i) Shire and TKT entered
into an Exclusive License Agreement (the License Agreement)
and (ii) Shire entered into a Voting Agreement (the Voting Agreement) with Warburg, Pincus Equity Partners, L.P., a Delaware limited partnership, Warburg, Pincus Netherlands Equity Partners I, C.V., a Netherlands Commanditaire Vennootschap, Warburg,
Pincus Netherlands Equity Partners III, C.V., a Netherlands Commanditaire Vennootschap, and Warburg Pincus & Co.,
a New York general partnership (collectively, Warburg Pincus).
The Acquisition Agreement, the License Agreement and the Voting Agreement are
attached as Exhibits 99.02, 99.03 and 99.04 and are each incorporated herein
by reference.
The Acquisition
Agreement provides that, upon the terms and subject to the conditions set
forth therein, the Merger Subsidiary will merge with and into TKT, with
TKT continuing as the surviving corporation (the Merger).
At the effective time of the Merger, TKT will become a wholly-owned subsidiary
of Shire and each outstanding share of common stock of TKT, other than those
shares as to which dissenters rights have been validly exercised,
will be converted into the right to receive $37.00 in cash.
Each of Shire
and TKT have made customary representations and warranties in the Acquisition
Agreement, which representations and warranties do not survive the consummation
of the Merger. In addition, between the signing of the Acquisition Agreement
and the consummation of the Merger, TKT has agreed to conduct its business
in the ordinary course consistent with past practice.
Consummation
of the Merger is subject to various conditions, including but not limited
to: (i) adoption of the Acquisition Agreement by the stockholders of TKT;
(ii) approval of the Merger by the shareholders of Shire; (iii) expiration
or termination of any applicable waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 and (iv) the representations and warranties
in the Acquisition Agreement being true and correct as of the effective
time of the Merger, except to the extent that any failure to be true and
correct would not have a material adverse effect on TKT or on Shires
ability to consummate the Merger. For the purposes of determining whether
there has been a material adverse effect on TKT, certain developments,
among them the results of TKTs current
clinical trial evaluating the use of I2S for Hunter syndrome, will be disregarded.
Shire is obligated to pay a termination fee to TKT of $40 million if the Acquisition Agreement is terminated as a result of Shires
shareholders not approving the Merger, if Shire fails to call and hold its
shareholder meeting in accordance with the Acquisition Agreement or if the
board of directors of Shire changes its recommendation in respect of the
Merger. TKT is obligated to pay a termination fee to Shire of $52 million
and an expense reimbursement of up to $4 million if the Acquisition Agreement
is terminated upon the occurrence of certain events, including if the board
of directors of TKT changes its recommendation in respect of the Acquisition
Agreement or if, in certain circumstances, TKT is acquired, or enters into
an agreement to be acquired, by a party other than Shire.
Subject to its
obligation to pay the termination fee, TKT may terminate the Acquisition
Agreement to accept an acquisition offer from a third party that it deems
to be superior to the Acquisition Agreement
with Shire, but only after first giving Shire
the opportunity to provide a counter offer. The Acquisition Agreement may
also be terminated by either Shire or TKT if the Merger is not consummated
by December 31, 2005.
Under the License
Agreement, TKT has granted Shire an irrevocable and perpetual license to
exclusively use, distribute and sell DYNEPO (a TKT pharmaceutical product)
outside of North America, as well as to manufacture DYNEPO. The license
only becomes effective if the Merger is not consummated due to: (i) the
occurrence of one or more of those circumstances in which Shire is obligated
to pay a termination fee; (ii) Shires termination of the Acquisition
Agreement, in whole or in part, as a result of the breach by TKT of its
representation and warranty as to the data provided by TKT to Shire with
respect to TKTs
current clinical trial evaluating the use of I2S for Hunter syndrome or
(iii) TKTs
termination of the Acquisition Agreement because Shire fails to perform, in any
material respect, any of its material covenants under the Acquisition Agreement
or because a breach of a representation or warranty made by Shire in the Acquisition
Agreement has occurred that would have a material adverse effect on the ability
of Shire to consummate the Merger and, in each case, such failure or breach cannot
be cured by December 31, 2005.
If the License Agreement becomes effective, Shire would be obligated to make a one-time payment to TKT of $450 million, with no royalties payable to TKT. Shire would also assume TKTs
obligation to pay single-digit royalties to Aventis Pharmaceuticals Inc.,
from which TKT originally licensed the rights to DYNEPO.
Warburg Pincus, which
beneficially owns approximately 14% of the outstanding shares of common stock
of TKT, has agreed pursuant to the Voting Agreement that it will vote its shares
in favor of the Acquisition Agreement at the meeting of TKT stockholders. If
the Acquisition Agreement is terminated, however, including by TKT in order to
accept an acquisition offer from a third party that it deems to be superior to
the Acquisition Agreement, the Voting Agreement also terminates.
On April 21, 2005,
Shire issued a press release announcing the execution of the Merger Agreement.
The press release is attached as Exhibit 99.01 and is incorporated herein by
reference.
Item 9.01. Financial Statements and Exhibits
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.
Dated: April 25, 2005
SHIRE TO BUILD ON SPECIALTY PORTFOLIO THROUGH ACQUISITION OF TRANSKARYOTIC
THERAPIES INC.
Basingstoke, UK and Wayne PA, US April 21, 2005 Shire Pharmaceuticals Group plc (LSE: SHP.L; NASDAQ:SHPGY; TSX:SHQ) (Shire) announced today that it has
signed a definitive agreement to acquire Transkaryotic Therapies, Inc. (NASDAQ:TKTX) (TKT) in an all cash transaction valued at $37 per outstanding TKT share, or approximately $1.6 billion. The acquisition is consistent with Shires
strategy and highly complementary to Shires business model to develop and market products for specialty pharmaceutical markets.
This is an important and complementary acquisition that delivers on our strategy and brings to us a new, sustainable area of specialty pharmaceutical expertise in a market where there are only a small number of
players. We expect that
TKTs protein-based drugs and clinical development pipeline based on a proven technology platform will enable us to diversify and broaden our revenue base while continuing to grow our profits and further build our
pipeline and platform for growth. We believe that this acquisition positions us well for the near and long term. We are looking forward to the prospect of working with our new colleagues from TKT.
Shire continues to perform in line with the guidance given at its preliminary results announcement on March 2, 2005 and will announce Q1 results on April 29, 2005.
Chief Executive Officer of TKT, David D Pendergast, Ph.D., said:
We are extremely gratified that Shire has recognized the value of our business and the dramatic progress we have made, particularly, in the last two years. We believe the substantial resources and capabilities of
Shire can accelerate the commercial opportunities of our products and future product candidates.
TKT is a US-based biopharmaceutical company researching, developing and commercializing therapeutics primarily for the treatment of rare genetic diseases caused by protein deficiencies. TKT currently has one marketed
product, REPLAGAL; a second product approved for marketing, DYNEPO; and multiple additional products in various stages of development. TKT is quoted on NASDAQ with the ticker, TKTX.
Both companies utilize small, specialized sales teams, which interact with specialist physicians. Importantly, TKT will expand Shires revenue generation in Europe and benefit from Shires experience and sales
teams in the renal and hematology areas.
Like Shire, TKT provides specific disease area expertise, a high quality product portfolio and a low-risk, well-balanced development pipeline with two attractive late-stage products. In addition, the ERT market provides a
good platform for further expansion through research and product in-licensing. TKTs product development is driven by its search for missing enzymes to develop into medicines for affected patients. Like Shire, it does not conduct high risk
discovery research and medicines for ERT generally benefit from fast development timelines.
Shire has successfully commercialized specialty products through an established infrastructure in the major pharmaceutical markets of North America and Europe and it expects to leverage this capability to realize the full
potential of TKTs product portfolio. Furthermore, Shire has the financial capability to accelerate the development of TKTs pipeline.
The acquisition of TKT will allow Shire to diversify its revenue base and expand its specialty expertise into ERT. Enzyme disorders are relatively low risk drug development areas as the mechanisms of action are well
established. Consequently, enzyme-related drugs have a high success rate in reaching the market. Most ERT drugs operate in niche areas with high unmet medical needs and qualify for orphan drug status.
TKT will add two approved products and two late-stage clinical development candidates with rapid development timelines to Shires portfolio
REPLAGAL: An enzyme replacement therapy product currently approved and marketed to treat patients with Fabry disease in 34 countries outside the US, of which the majority are in Europe. Sales of REPLAGAL reached $77 million
in 2004. It is estimated that the current market is $190 million in Western Europe. Incidence is estimated at 1 in
40,000 (orphan disease). Both ease of administration (one fifth the volume infusion of the competing product) and a broader label have helped to establish REPLAGALs competitive position.
DYNEPO: An erythropoietin (EPO) used for the treatment of kidney disease-related anemia. Shire will gain the European rights and is well placed to leverage its existing FOSRENOL® sales force in Europe to help DYNEPO
gain market share. DYNEPO, which is approved for marketing, is expected to be launched in Europe in 2006 and will be the first fully human EPO therapy. The European EPO market is currently more than $2.3 billion.
I2S: An enzyme replacement therapy currently in Phase 3 of development for the treatment of Hunter Syndrome. The product has gained fast track status in the US. Assuming the results of the Phase 3 trial are positive, I2S is
expected to launch in 2006. Shire estimates the market is approximately $300 million worldwide, of which US and EU are of equal size at approximately 40% each. Phase 3 data is expected to become available by the end of the second quarter
2005.
GA-GCB: A glucocerebrosidase currently in Phase 1/2 of development for the treatment of Gaucher disease, which is anticipated to be introduced in 2008. Estimated number of treated patients is around 4,000 worldwide, with
200-300 new patients expected to present each year. The total worldwide estimated market at December 2004 was approximately $840 million.
The ERT market has a number of attractive features and high unmet medical needs. ERT products that are brought to market normally benefit from long lifecycles driven by orphan drug status (seven years in the US and 10 years
in the EU), manufacturing complexities and a limited number of competitive players. ERT currently provides the optimal treatment for patients suffering from the relevant enzyme deficiencies.
The EPO market is large and growing, currently $2.3 billion in Europe. DYNEPO provides Shire with a good opportunity to leverage its European sales force expertise in this market with nephrologists and with
hematologists.
Significantly enhances Shires medium and long-term sales and EPS growth
The acquisition of TKT is expected to significantly enhance Shires sales and EPS growth beyond 2007 and sustain Shires consistent operating margin performance. The acquisition will provide the opportunity for
modest cost savings and is expected to be cash EPS and US GAAP EPS neutral in the second full year of ownership post closing. It is anticipated that there will be a one-time charge of approximately $800 million on closing relating mainly to the
write-off, under US GAAP, of the intangible asset value associated with the acquired in-process R&D pipeline, together with some restructuring costs.
TKTs capabilities and skill-sets expected to bring significant value to the combined organization
Shire's ability to commercialize DYNEPO through its specialist sales force and to accommodate TKTs R&D expenditure as well as future global marketing requirements makes it an attractive partner for the continued
development of the TKT business. There will be some cost savings, but Shire's overall intention is to develop and grow TKTs existing position in the ERT market and build on TKTs current revenue stream.
Under the terms of the acquisition agreement, TKT shareholders will receive a cash consideration of $37 per share of TKT common stock. The transaction values TKTs share capital as of the date of the merger agreement,
at $1.57 billion on a fully diluted basis. The acquisition price represents a premium of approximately:
The transaction has been unanimously approved by Shires board of directors and has been approved by a majority of TKTs directors. The transaction is subject to approval by the shareholders of both companies, as
well as regulatory approvals and satisfaction of other customary closing conditions including that representations and warranties in the acquisition agreement are true and correct as of the closing except to the extent that any failure to be true
and correct would not have a material adverse effect on TKT or on Shires ability to consummate the merger. For the purposes of determining whether there has been a material adverse effect on TKT, certain developments, among them the results of
TKTs current clinical trial evaluating the use of I2S for Hunter syndrome, will be disregarded. The transaction is expected to close in the summer of 2005. The acquisition agreement also contains provisions relating to the payment of break
fees by Shire and TKT, with TKT being obliged to pay Shire $52 million in specified circumstances and reimburse Shire for up to $4 million in expenses and Shire being obliged to pay TKT $40 million if the acquisition agreement is terminated as a
result of Shire shareholders not approving the transaction, if Shire fails to call and hold its shareholder meeting in accordance with the acquisition agreement, or the board of directors of Shire changing their recommendation in respect of the
transaction.
In addition, Shire and TKT have entered into an irrevocable and perpetual license agreement under which TKT grants to Shire the exclusive right to use, distribute and sell DYNEPO outside of North America, as well as the
right to manufcture. The license only takes effect if the closing of the acquisition agreement does not occur for specified reasons, which include those circumstances in which Shire is obliged to pay a break fee. If the license were to become
effective, Shire would make a one-time payment to TKT of $450 million with no royalties payable to TKT. Shire would assume TKTs obligation to pay single-digit royalties to Aventis, from which TKT originally licensed these DYNEPO rights. The
European EPO market, where DYNEPO is expected to launch in 2006, is currently worth more than $2.3 billion; Shire will leverage its existing FOSRENOL sales force in Europe to commercialize DYNEPO, which will be the first fully human EPO therapy.
Further details in relation to the break fees, the license in relation to DYNEPO, the closing conditions and other provisions of the acquisition agreement are set out in the appendix to this press release.
Warburg Pincus & Co. and certain of its affiliates, which together beneficially own approximately 14% of the outstanding shares of the common stock of TKT, have agreed, pursuant to a voting agreement with Shire, that
they will vote all their shares in favor of the acquisition agreement at the meeting of TKT stockholders. If the acquisition agreement is terminated, however, including by TKT in order to
accept an offer from a third party that it deems to be superior to the acquisition agreement, the voting agreement also terminates.
Closing of the transaction is subject to Hart-Scott-Rodino clearance, approval of TKTs and Shires shareholders and other customary conditions.
The cash consideration for the acquisition and the working capital requirements for Shire after completion of the acquisition will be met out of the current cash resources of the enlarged group, together with new debt
bridging facilities of $500 million from Goldman Sachs.
Shire Pharmaceuticals Group plc
Shire is a global specialty pharmaceutical company with a strategic focus on meeting the needs of the specialist physician and currently focuses on the search, development and marketing of products in its chosen therapeutic
areas. Shire has operations in the worlds key pharmaceutical markets (US, Canada, UK, France, Italy, Spain and Germany).
In 2004, Shire achieved total revenues of $1,363 million,
EBITDA of $518 million and net income of $269 million. As of December 31, 2004
Shire had $1,458 million in cash and cash equivalents and total debt of $43.3
million including $0.1 million in outstanding convertible notes and $43.2 million
in a loan facility. Shire continues to perform in line with the guidance given
at its preliminary results announcement on March 2, 2005 and will announce Q1 results
on April 29, 2005.
For further information on Shire, please visit the Companys website: www.shire.com. Goldman Sachs acted as financial advisor to
Shire in relation to the acquisition.
Transkaryotic Therapies, Inc. is a biopharmaceutical company primarily focused on researching, developing and commercializing treatments for rare diseases caused by protein deficiencies. Within this focus, the company markets Replagal , an enzyme replacement therapy for Fabry disease, and is developing treatments for Hunter
syndrome and Gaucher disease. In addition to its focus on rare diseases, TKT intends to commercialize Dynepo , its Gene-Activated® erythropoietin product for anemia related
to kidney disease, in the European Union. TKT was founded in 1988 and is headquartered in Cambridge, Massachusetts, with additional operations in Europe, Canada and South America. Additional information about TKT is available on the companys
website at http://www.tktx.com.
In 2004, TKT achieved total revenues of $78.1 million and a net loss of $(65.9) million. As of December 31, 2004 TKT had $155 million in cash and cash equivalents and total debt of $94.0 million in the form of convertible
notes and net assets of $194.3 million. For further information on TKT, please visit TKTs website: www.tktx.com SG Cowen & Co., LLC acted as financial
advisor to TKT in connection with the transaction. SG Cowen & Co., LLC and Banc of America Securities LLC each delivered an opinion that the consideration to be received by TKT stockholders is fair to such holders from a financial point of view.
A conference call will be held for analysts at 15:50 BST / 10:50 EDT today, April 21, 2005. Please dial USA / Canada toll free: 1 866 224 3295 or Standard International Dial In: +44 (0) 1452 568 060, password:
Shire.
Please call Souheil Salah on +44 (0) 1256 894160 or Heidi Wunder on 1 484 595 8709 if further details regarding the call are required.
There will also be a live audio webcast at www.shire.com. and tktx.com
Statements included herein that are not historical facts are forward-looking statements. Such forward-looking statements involve a number of risks and uncertainties and are subject to change at any time. In the event such
risks or uncertainties materialize, Shire's results could be materially affected. The risks and uncertainties include, but are not limited to, risks associated with the inherent uncertainty of pharmaceutical research, product development,
manufacturing and commercialization, the impact of competitive products, including, but not limited to, the impact of those on Shire's Attention Deficit & Hyperactivity Disorder (ADHD) franchise, patents, including but not limited to, legal
challenges relating to Shire's ADHD franchise, government regulation and approval, including but not limited to Health Canada's suspension of ADDERALL XR® sales in
Canada and the expected product approval dates of METHYPATCH® (MTS) (ADHD), SPD503 (ADHD), SPD465 (ADHD), SPD476 (ulcerative colitis), SPD 480 (ulcerative colitis) and
NRP104 (ADHD), including its scheduling classification by the Drug Enforcement Agency in the United States, Shire's ability to secure new products for development and other risks and uncertainties detailed from time to time in Shire's filings with
the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2004.
Goldman Sachs International, which is authorized and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Shire in relation to the acquisition and no one else and will not be
responsible to anyone other than Shire for providing the protections afforded to its customers or for providing advice in relation to the acquisition or in relation to any transaction, arrangement or other matter referred to in this announcement.
Summary of Principal Terms of Acquisition Agreement and Related Documents
Under the terms of the acquisition agreement, Shire will acquire TKT through the merger of one of its wholly owned subsidiaries with TKT. In consideration for the acquisition of TKT, Shire will pay $37 in cash per each TKT
share outstanding as of closing.
The acquisition agreement may be terminated by either Shire or TKT if the acquisition is not consummated by December 1, 2005.
The acquisition agreement contains representations and warranties that are typical of a transaction of this nature. These representations and warranties do not survive the closing of the transaction. Between the signing of
the acquisition agreement and the closing of the transaction, TKT must conduct its business in the ordinary course consistent with past practice.
The acquisition agreement contains conditions to the obligations of TKT and Shire to close, including but not limited to:
Shire must pay a break fee to TKT of $40 million if the acquisition agreement is terminated as a result of the Shire shareholders not approving the transaction, if Shire fails to call and hold its shareholder meeting in
accordance with the acquisition agreement, or if the board of directors of Shire changes its recommendation in respect of the transaction. TKT must pay a break fee to Shire of $52 million and an expense reimbursement of up to $4 million if the
acquisition agreement is terminated upon the occurrence of certain events, including if the board of directors of TKT changes its recommendation in respect of the transaction or if, in certain circumstances, TKT is acquired, or enters into an
agreement to be acquired by a party other than Shire.
Subject to its obligation to pay the break fee, TKT may terminate the acquisition agreement to accept an offer from a third party that it deems to be superior to the acquisition agreement with Shire, but only after first
giving Shire the opportunity to provide a counter offer.
In addition, Shire and TKT have entered into an irrevocable and perpetual license agreement under which TKT grants to Shire the right to use, distribute and sell DYNEPO outside of North America, as well as the right to
manufacture. The license only takes effect if closing of the acquisition agreement does not occur as a result of
ability of Shire to consummate the merger and, in each case, such failure or breach cannot be cured by December 1, 2005.
If the license were to become effective, Shire would make a one-time payment to TKT of $450 million with no royalties payable to TKT. Shire would assume TKTs obligation to pay single-digit royalties to Aventis, from
which TKT originally licensed these DYNEPO rights.
Warburg Pincus & Co. and certain of its affiliates, which together beneficially own approximately 14% of the outstanding shares of common stock of TKT, have agreed pursuant to a voting agreement with Shire, that they
will vote their shares in favor of the acquisition agreement at the meeting of TKT stockholders. If the acquisition agreement is terminated, however, including by TKT in order to accept an offer from a third party that it deems to be superior to the
acquisition agreement, the voting agreement also terminates.
The following definitions apply throughout this announcement unless the context otherwise requires:
References to $ are to the lawful currency of the United States of America.
AGREEMENT AND PLAN OF MERGER dated as of April 21, 2005 among
TRANSKARYOTIC THERAPIES, INC., SHIRE PHARMACEUTICALS GROUP PLC and
SPARTA ACQUISITION CORPORATION
AGREEMENT AND PLAN OF MERGER
AGREEMENT
AND PLAN OF MERGER (this Agreement) dated as of April
21, 2005, among Transkaryotic Therapies, Inc., a Delaware corporation (the Company),
Shire Pharmaceuticals Group plc, a public limited company incorporated under
the laws of England and Wales (Parent), and Sparta Acquisition
Corporation, a Delaware corporation and a wholly-owned subsidiary of Parent
(Merger Subsidiary).
WHEREAS, the respective Boards of Directors of the Company, Parent and Merger Subsidiary have approved and deemed it advisable that the respective stockholders of the Company, Parent and Merger
Subsidiary approve and adopt this Agreement pursuant to which, among other things, Parent would acquire the Company by means of a merger of Merger Subsidiary with and into the Company on the terms and subject to the conditions set forth in this
Agreement;
WHEREAS,
simultaneously with the execution and delivery of this Agreement, Parent
and the Company are entering into an agreement (the Dynepo License
Agreement) with respect to the manufacturing, distribution and sale
of the gene-activated pharmaceutical composition of erthyropoietin (Dynepo)
outside of North America; and
WHEREAS,
simultaneously with the execution and delivery of this Agreement, Parent,
on the one hand, and Warburg, Pincus Equity Partners, L.P., Warburg Pincus & Co.
and certain of their Affiliates, on the other hand, are entering into an
agreement (the Voting Agreement and, together with this
Agreement and the Dynepo License Agreement, the Transaction Agreements)
pursuant to which such stockholders will agree to take specified actions
in furtherance of the Merger;
NOW, THEREFORE, in consideration of the foregoing and the representations, warranties, covenants and agreements herein contained, the parties hereto agree as follows:
Section 1.01. Definitions. (a) The following terms, as used herein, have the following meanings:
Acquisition Proposal means,
other than the transactions contemplated by this Agreement, any Third Party
offer, proposal or inquiry relating to, or any Third Party indication of
interest in, (i) any acquisition or purchase, direct or
indirect, of 20% or more of the consolidated
assets of the Company and its Subsidiaries or over 20% of any class of equity
or voting securities of the Company, (ii) any tender offer (including a
self-tender offer) or exchange offer that, if consummated, would result
in any Third Partys beneficially owning 20% or more of any class of
equity or voting securities of the Company or any of its Subsidiaries whose
assets, individually or in the aggregate, constitute more than 20% of the
consolidated assets of the Company or (iii) a merger, consolidation, share
exchange, business combination, sale of substantially all the assets, reorganization,
recapitalization, liquidation, dissolution or other similar transaction
involving the Company or any of its Subsidiaries whose assets, individually
or in the aggregate, constitute more than 20% of the consolidated assets
of the Company.
Affiliate means,
with respect to any Person, any other Person directly or indirectly controlling,
controlled by or under common control with such Person.
AIM Study means the clinical trial evaluating the use of Iduronate-2-Sulfatase for Hunter syndrome entitled the Assessment
of I2S in MPS II.
Balance Sheet means
the consolidated balance sheet of the Company and its Subsidiaries as of
December 31, 2004 and the footnotes thereto set forth in the Company 10-K.
Balance Sheet Date means
December 31, 2004.
Business Day means
a day other than Saturday, Sunday or other day on which commercial banks
in New York, New York are authorized or required by law to close.
Code means
the Internal Revenue Code of 1986.
Company Disclosure Schedule means
the Company disclosure schedule delivered to Parent by the Company concurrently
herewith.
Company Employee Plan means
any Employee Plan that is maintained, administered, sponsored by or contributed
to by the Company, any of its Subsidiaries or any of their respective ERISA
Affiliates or with respect to which the Company or any of its Subsidiaries
has any liability and that covers current or former directors or employees
of the Company or any of its Subsidiaries.
Company International Plan means
any International Plan that is maintained, administered, sponsored by or
contributed to by the Company or any of its Subsidiaries or with respect
to which the Company or any of its Subsidiaries has any liability and that
covers current or former directors or employees of the Company or any of
its Subsidiaries.
Company Material Adverse Effect means a material adverse effect on the financial condition, business, assets or results of
operations of the Company and its Subsidiaries, taken as a whole, or on the Companys
ability to consummate the transactions contemplated by this Agreement, excluding
any such effect arising out of or resulting from (i) changes or conditions generally
affecting the industries in which the Company and its Subsidiaries operate and
not disproportionately affecting the Company and its Subsidiaries, (ii) changes
in general economic or business conditions affecting any region in which the
Company has a substantial presence, (iii) the public announcement or disclosure
of (x) the Transaction Agreements or (y) the consummation or proposed consummation
of the transactions contemplated by the Transaction Agreements, (iv) the results
of the AIM Study, (v) the taking of (x) any action contemplated by this Agreement
or (y) any action to which Parent shall have consented in writing, (vi) any failure,
in and of itself, by the Company to meet any projections, forecasts or revenue
or earnings predictions made public or provided by the Company in writing to
Parent prior to the date hereof (it being understood that the facts or occurrences
giving rise or contributing to such failure may be deemed to constitute, or be
taken into account in determining whether there has been or is reasonably likely
to be a Company Material Adverse Effect) and (vii) changes in laws of general
application or interpretations thereof by courts or other governmental entities.
Company 10-K means the Companys
annual report on Form 10-K for the fiscal year ended December 31, 2004.
Delaware Law means
the General Corporation Law of the State of Delaware.
Employee Plan means, written or otherwise, any (x) employee benefit plan, as defined in Section 3(3) of ERISA, (y)
employment, severance or similar service agreement, plan, arrangement or policy or any other plan or arrangement providing for compensation, bonuses, profit-sharing, stock option or other equity-based rights or other forms of incentive or deferred
compensation, vacation benefits, insurance (including any self-insured arrangements), medical, dental or vision benefits, disability or sick leave benefits, life insurance, employee assistance program, workers compensation,
supplemental unemployment benefits, severance benefits and post-employment or
retirement benefits (including compensation, pension or insurance benefits),
or (z) loan; in each case covering or extended to any current or former director
or employee; provided that any International Plan (and any plan or program that would otherwise constitute an International Plan, but for the proviso in the definition of such term) shall not constitute
an Employee Plan.
Environmental Laws means
any federal, state, local or foreign law (including common law), treaty,
judicial decision, regulation, rule, judgment, order, decree, injunction,
permit or governmental restriction or requirement or any agreement by the
Company with any governmental authority, relating to the
protection, investigation or restoration of human health and safety, environment or to pollutants, contaminants, wastes or chemicals or any toxic, radioactive, ignitable, corrosive, reactive or otherwise hazardous substances,
wastes or materials.
Environmental Permits means
all permits, licenses, franchises, certificates, approvals and other similar
authorizations of governmental authorities required by Environmental Laws
for the Company or any of its Subsidiaries to conduct its business.
ERISA means
the Employee Retirement Income Security Act of 1974.
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
HSR Act means
the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
Intellectual Property Rights means
inventions, whether or not patentable, reduced to practice or made the subject
of one or more pending patent applications, national and multinational statutory
invention registrations, patents and patent applications (including all
reissues, divisions, continuations, continuations-in-part, extensions and
reexaminations thereof) registered or applied for in the United States and
all other nations throughout the world, all improvements to the inventions
disclosed in each such registration, patent or patent application, trademarks,
service marks, trade dress, logos, domain names, trade names and corporate
names (whether or not registered) in the United States and all other nations
throughout the world, including all registrations and applications for registration
of the foregoing and all goodwill associated therewith, copyrights (whether
or not registered) and registrations and applications for registration thereof
in the United States and all other nations throughout the world, including
all derivative works, moral rights, renewals, extensions, reversions or
restorations associated with such copyrights, now or hereafter provided
by law, regardless of the medium of fixation or means of expression, trade
secrets and, whether or not confidential, and know-how (including manufacturing
and production processes and techniques and research and development information),
copies and tangible embodiments of any of the foregoing, in whatever form
or medium, all rights to obtain and rights to apply for patents, and to
register trademarks and copyrights and all rights in all of the foregoing
provided by treaties, conventions and common law.
International Plan means,
whether or not statutorily required, any (x) employment, severance or similar
service agreement, plan, arrangement or policy; (y) any other plan or arrangement
providing for compensation, bonuses, profit-sharing, stock option or other
equity-related rights or other forms of incentive or deferred compensation,
vacation benefits, insurance (including any self-insured arrangements),
medical, dental or vision benefits, disability or sick
leave benefits, life insurance, employee assistance
program, workers compensation, supplemental unemployment benefits,
severance benefits and post-employment or retirement benefits (including
compensation, pension or insurance benefits); or (z) loan; in each case
covering or extended to any current or former director or employee, where
such individuals are located exclusively outside of the United States; provided that a plan or program sponsored or operated by a governmental authority (including the State Earnings Related Pension Scheme in the United Kingdom) shall not constitute an International Plan.
Knowledge of
(a) the Company or any of its Subsidiaries means the knowledge of any of
the individuals set forth in Section 1.01 of the Company Disclosure Schedule
and (b) Parent or any of its Subsidiaries means the knowledge of the Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer or General
Counsel or any senior officer responsible for each functional area of Parent.
Licensed Intellectual Property Rights means
all Intellectual Property Rights owned by a Third Party and licensed or
sublicensed to the Company or any of its Subsidiaries.
Lien means,
with respect to any property or asset, any mortgage, lien, pledge, charge,
security interest, or other encumbrance of any kind in respect of such property
or asset. For purposes of this Agreement, a Person shall be deemed to own
subject to a Lien, any property or asset that it has acquired or holds subject
to the interest of a vendor or lessor under any conditional sale agreement,
capital lease or other title retention agreement relating to such property
or asset.
1933 Act means
the Securities Act of 1933.
1934 Act means
the Securities Exchange Act of 1934.
Owned Intellectual Property Rights means
all Intellectual Property Rights owned by the Company or any of its Subsidiaries.
Parent Material Adverse Effect means a material adverse effect on Parents
ability to consummate the transactions contemplated by this Agreement.
Person means
an individual, corporation, partnership, limited liability company, association,
trust or other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
Qualifying
Termination means (a) a termination
by either Parent or the Company pursuant to Section 10.01(b)(iv), (b) a
termination by the Company pursuant to Section 10.01(f) or Section 10.01(g)
or (c) a termination by Parent pursuant to Section 10.01(e) if Section 4.24
is among the provisions alleged by Parent to have been breached.
Sarbanes-Oxley Act means
the Sarbanes-Oxley Act of 2002.
SEC means
the Securities and Exchange Commission.
Shares means
the shares of common stock, $0.01 par value, of the Company.
Subsidiary means,
with respect to any Person, any entity of which securities or other ownership
interests having ordinary voting power to elect a majority of the board
of directors or other persons performing similar functions are at any time
directly or indirectly owned by such Person.
Third Party means
any Person other than Parent or any of its Affiliates and their respective
advisors and agents (acting in such capacity).
(b) Each of the following terms is defined in the Section set forth opposite such term:
Section 1.02. Other Definitional And Interpretative Provisions. Unless
specified otherwise, in this Agreement the obligations of any party consisting
of more than one person are joint and several. The words hereof, herein and hereunder and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof. References to Articles, Sections, Exhibits and Schedules are to Articles, Sections,
Exhibits and Schedules of this Agreement unless otherwise specified. Any capitalized terms used in any Exhibit or Schedule but not otherwise defined therein, shall have the meaning as defined in this Agreement. Any singular term in this Agreement
shall be deemed to include the plural, and any plural term the singular. Whenever the words include, includes or including are used in this Agreement, they shall be deemed to be followed by the words without
limitation, whether or not they are in fact followed by those words or words of like import. Writing, written and
comparable terms refer to printing, typing and other means of reproducing words
(including electronic media) in a visible form. References to any statute are to that statute, as amended from time to time, and to the rules and regulations promulgated thereunder. References to any agreement or contract are to
that agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof; provided that
with respect to any agreement or contract listed on any Schedule hereto, all
such amendments, modifications or supplements must also be listed in the appropriate
Schedule. References to any Person include the successors and permitted assigns
of that Person. References from or through any date mean, unless otherwise specified,
from and including or through and including, respectively. References to law, laws or
to a particular statute or law shall be deemed also to include any and all related
rules, regulations, ordinances, directives, treaties and judicial or administrative
decisions, judgments, decrees or injunctions of any U.S. or non-U.S. federal,
state, local or foreign governmental authority. References to any U.S. legal
term shall, with respect to any jurisdiction other than the United States or
any state or territory thereof, be construed as references to the term or concept
which most nearly corresponds to it in that jurisdiction.
Section 2.01. The Merger.
(a) Subject to the terms and conditions of this Agreement, at the Effective
Time, Merger Subsidiary shall be merged (the Merger)
with and into the Company in accordance with Delaware Law, whereupon the
separate existence of Merger Subsidiary shall cease, and the Company shall
be the surviving corporation (the Surviving Corporation).
(b) The
closing of the Merger shall take place at the offices of Davis Polk & Wardwell,
450 Lexington Avenue, New York, New York as soon as practicable following
the satisfaction or, to the extent permitted hereunder, waiver (by the party
or parties entitled to the benefits thereof) of all conditions to the Merger
(other than any condition that by its nature cannot be satisfied until the
closing of the Merger, but subject to satisfaction of such condition), or
at such other place, date and time as may be agreed by the parties. The
date on which the closing of the Merger occurs is referred to in this Agreement
as the Closing Date.
The parties shall prepare and on the Closing Date shall file with the Secretary
of State of the State of Delaware a certificate of merger or other appropriate
documents executed in accordance with the relevant provisions of Delaware
Law and shall make all other filings or recordings required under Delaware
Law. The Merger shall become effective at such time (the Effective Time)
as the certificate of merger is duly filed with the Delaware Secretary of
State (or at such later time as Parent and the Company shall agree and is
specified in the certificate of merger).
(c) The Merger shall have the effects set forth in Section 259 of the Delaware Law.
Section 2.02. Conversion of Shares. At the Effective Time,
(a) except
as otherwise provided in Section 2.02(b) or Section 2.04, each Share outstanding
immediately prior to the Effective Time shall be converted into the right
to receive $37.00 in cash, without interest (the Merger Consideration);
(b) each Share held by the Company as treasury stock or owned by Parent or any of its wholly-owned Subsidiaries immediately prior to the
Effective Time shall be canceled, and no payment shall be made with respect thereto; and
(c) each share of common stock of Merger Subsidiary outstanding immediately prior to the Effective Time shall be converted into and become one
share of common stock, par value $0.01 per share, of the Surviving Corporation and shall constitute the only outstanding shares of capital stock of the Surviving Corporation.
Section 2.03. Surrender and Payment.
(a) Prior to the Effective Time, Parent shall appoint a bank or trust company,
reasonably acceptable to the Company (the Exchange Agent),
for the purpose of exchanging certificates that immediately prior to the
Effective Time represented Shares that were converted into the right to
receive the Merger Consideration pursuant to Section 2.02(a) (the Certificates)
for the Merger Consideration, and Parent and Exchange Agent shall enter
into an exchange agreement which shall, in form and substance, be reasonably
acceptable to the Company. Parent shall, on and from time to time after
the Effective Date, make available to the Exchange Agent, as needed, the
Merger Consideration to be paid in respect of the Certificates. As promptly
as practicable after the Effective Time, Parent shall send, or shall cause
the Exchange Agent to send, to each holder of Certificates a letter of transmittal
and instructions (which shall specify that the delivery shall be effected,
and risk of loss and title shall pass, only upon proper delivery of the
Certificates to the Exchange Agent and shall be reasonably acceptable to
the Company) for use in such exchange.
(b) Each holder of Shares that have been converted into the right to receive the Merger Consideration pursuant to Section 2.02(a) shall be
entitled to receive, upon surrender to the Exchange Agent of a Certificate, together with a properly completed letter of transmittal, the Merger Consideration payable for each Share formerly represented by a Certificate. Until so surrendered or
transferred, as the case may be, each such Certificate shall represent after the Effective Time for all purposes only the right to receive such Merger Consideration.
(c) If any portion of the Merger Consideration is to be paid to a Person other than the Person in whose name the surrendered Certificate is
registered, it shall be a condition to such payment that (i) either such Certificate shall be properly endorsed or shall otherwise be in proper form for transfer and (ii) the Person requesting such payment shall pay to the Exchange Agent any
transfer or other taxes required as a result of such payment to a Person other than the registered holder of such Certificate or establish to the satisfaction of the Exchange Agent that such tax has been paid or is not payable.
(d) After the Effective Time, there shall be no further registration of transfers of Shares. If, after the Effective Time, Certificates are
presented to the Surviving Corporation, they shall be canceled and exchanged for the Merger Consideration provided for, and in accordance with the procedures set forth, in this Article 2.
(e) Any
portion of the Merger Consideration made available to the Exchange Agent pursuant
to Section 2.03(a) (and any interest and other income earned thereon) that remains
unclaimed by the holders of Certificates six months after the Effective Time
shall be returned to the Surviving Corporation, upon demand, and any such holder
who has not exchanged such Certificate for the Merger Consideration in accordance
with this Section 2.03 prior to that time shall thereafter look only to the Surviving
Corporation for payment of the Merger Consideration in respect of such Shares
without any interest thereon. Notwithstanding the foregoing,
neither Parent nor the Surviving Corporation shall be liable to any holder of
Shares for any amount paid to a public official pursuant to applicable abandoned
property, escheat or similar laws. Any amounts remaining unclaimed by holders
of Shares two years after the Effective Time (or such earlier date immediately
prior to such time when the amounts would otherwise escheat to or become property
of any governmental authority) shall become, to the extent permitted by applicable
law, the property of the Surviving Corporation free and clear of any claims or
interest of any Person previously entitled thereto.
(f) Any portion of the Merger Consideration made available to the Exchange Agent pursuant to Section 2.03(a) to pay for Shares for which
appraisal rights have been perfected shall be returned to the Surviving Corporation, upon demand.
Section 2.04. Dissenting Shares. Notwithstanding Section 2.02, Shares which are issued and outstanding immediately prior to the Effective
Time and held by a holder who has not voted such Shares in favor of the Merger or consented thereto in writing and who has demanded appraisal for such Shares in accordance with Section 262 of the Delaware Law shall not be converted into the right to
receive the Merger Consideration, unless such holder fails to perfect, withdraws or loses the right to appraisal. If, after the Effective Time, such holder fails to perfect, withdraws or loses the right to appraisal, such Shares shall be treated as
if they had been converted as of the Effective Time into the right to
receive the Merger Consideration. The Company shall give Parent prompt notice of any demands received by the Company for appraisal of Shares, and Parent shall have the right to participate in all negotiations and proceedings with
respect to such demands. Except with the prior written consent of Parent, the Company shall not make any payment with respect to, or offer to settle or settle, any such demands.
Section 2.05. Company Stock Options.
(a) Except as provided in Section 2.05(b), each option (a Company
Stock Option) to purchase Shares granted under an equity compensation
plan or arrangement of the Company (a Company Stock Plan),
whether vested or unvested, that is outstanding immediately prior to the Effective
Time shall be canceled as of the Effective Time, and in consideration therefor
the Company shall pay the holder of such Company Stock Option at the Effective
Time an amount in cash equal to the product of (i) the excess, if any, of $37.00
over the applicable exercise price per Share of such Company Stock Option multiplied
by (ii) the number of Shares such holder could have purchased (assuming full
vesting of such Company Stock Option) had such holder exercised such Company
Stock Option in full immediately prior to the Effective Time.
(b) (i) Each Specified Stock Option, whether vested or unvested, that is outstanding immediately prior to the Effective Time shall be canceled
as of the Effective Time, and in substitution therefor Parent shall, as soon as reasonably practicable following the Effective Time (i.e.,
during the next available time that is not a closed period under applicable law or Parents
company policy), provide to the holder of such Specified Stock Option a stock
option of equivalent value under an equity compensation plan of Parent then in
effect (a Substituted Stock Option). A Substituted Stock Option shall be deemed to have value equivalent to the applicable Specified Stock Option if (x) the exercise price of such
Substituted Stock Option is calculated pursuant to the rules of Parents scheme for substituted grants on the date of grant of such Substituted Stock Option and (y) the number of shares of Parents
ordinary shares (Parent Shares) covered by such Substituted
Stock Option is equal to, as rounded down to the nearest whole share, the product
of the number of Shares that the holder of such Specified Stock Option could
have purchased (assuming full vesting of such Specified Stock Option) had such
holder exercised such Specified Stock Option in full immediately prior to the
Effective Time multiplied by the Exchange Ratio (as defined below), and further multiplied by a
Substitution Premium (as defined below). The Exchange
Ratio shall be a number (rounded to the nearest ten-thousandth) determined
by dividing the pound sterling equivalent of $37.00 (using an exchange rate agreed
between Parent and the Company, as in effect on the date on which the Effective
Time occurs) by the average of the closing sales prices of a Parent Share
(expressed in pound sterling at the same exchange rate) on the London Stock Exchange
during the five full trading days immediately preceding the date on which the
Effective Time occurs. The Substitution Premium shall be a number greater than 1 that Parents
Remuneration
Committee shall determine in its sole and reasonable discretion prior to the Effective Time to take into account the fact that Specified Stock Options would otherwise have vested over time, whereas Substituted Stock Options will
vest on the basis of performance.
(ii) At the Effective Time, Parent shall have effective a registration statement on Form S-8 (or another appropriate form) registering a number
of Parent Shares equal to the number of Parent Shares subject to the Substituted Stock Options. Such registration statement shall be kept effective (and the current status of the prospectus or prospectuses required thereby shall be maintained) as
long as any Substituted Stock Options may remain outstanding.
(c) Prior to the Effective Time, the Company shall deliver to the holders of Company Stock Options any required notices and shall take any
other required or appropriate action under the terms of such Company Stock Plans, including (i) obtaining any consents from such holders and (ii) making any amendments to the terms of such Company Stock Plans, in each case that are necessary to give
effect to the transactions contemplated by this Section 2.05.
Section 2.06. Adjustments. If, during the period between the date of this Agreement and the Effective Time, any change in the outstanding
Shares shall occur, including by reason of any reclassification, recapitalization, stock split or combination, exchange or readjustment of Shares, or stock dividend thereon with a record date during such period the Merger Consideration and any other
amounts payable pursuant to this Agreement shall be appropriately adjusted.
Section 2.07. Withholding Rights. Each of the Surviving Corporation and Parent shall be entitled to deduct and withhold from the
consideration otherwise payable to any Person pursuant to this Article 2 such amounts as it is required to deduct and withhold with respect to the making of such payment under any provision of federal, state, local or foreign Tax law. If the
Surviving Corporation or Parent, as the case may be, so withholds amounts, such amounts shall be treated for all purposes of this Agreement as having been paid to the holder of the Shares, options or warrants, as the case may be, in respect of which
the Surviving Corporation or Parent, as the case may be, made such deduction and withholding.
Section 2.08. Lost Certificates. If any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact
by the Person claiming such Certificate to be lost, stolen or destroyed and, if required by the Surviving Corporation, the posting by such Person of a bond, in such reasonable amount as the Surviving Corporation may direct, as indemnity against any
claim that may be made against it with respect to such Certificate, the Exchange Agent shall pay, in exchange for such lost, stolen or destroyed Certificate, the Merger Consideration to be paid in respect of the Shares represented by such
Certificate, as contemplated by this Article 2.
Section 3.01. Certificate of Incorporation. The certificate of incorporation of the Company in effect at the Effective Time shall be the
certificate of incorporation of the Surviving Corporation until amended in accordance with Delaware Law.
Section 3.02. Bylaws. The bylaws of the Company in effect at the Effective Time shall be the bylaws of the Surviving Corporation until
amended in accordance with Delaware Law.
Section 3.03. Directors and Officers. From and after the Effective Time, until successors are duly elected or appointed and qualified in
accordance with Delaware Law, (i) the directors of Merger Subsidiary at the Effective Time shall be the directors of the Surviving Corporation and (ii) the officers of the Company at the Effective Time shall be the officers of the Surviving
Corporation.
ARTICLE 4
Except as set forth in (i) the reports, schedules, forms, statements and other documents filed by the Company with, or furnished by the Company to, the SEC after January 1, 2004 and publicly available
prior to the date of this Agreement or (ii) the Company Disclosure Schedule (with specific reference to the Section or subsection of this Agreement to which the information stated therein relates; provided that information set forth in one Section or subsection of the Company Disclosure Schedule shall be deemed to apply to each other Section or subsection to which its relevance is readily apparent on
its face), the Company represents and warrants to Parent that:
Section 4.01. Corporate Existence and Power. The Company is a corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware and has all corporate powers and all governmental licenses, authorizations, permits, consents and approvals required to carry on its business as now conducted, except for those licenses, authorizations, permits,
consents and approvals the absence of which is not reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect. The Company is duly qualified to do business as a foreign corporation and is in good standing in each
jurisdiction where such qualification is necessary, except for those jurisdictions where failure to be so qualified is not reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect. The Company has heretofore
made available to Parent true and complete copies of the certificate of incorporation and bylaws of the Company as currently in effect.
Section 4.02. Corporate Authorization.
(a) The execution, delivery and performance by the Company of the Transaction
Agreements to which it is a party and the consummation by the Company of
the transactions contemplated thereby are within the Companys corporate
powers and, except for obtaining the Company Stockholder Approval in connection
with the consummation of the Merger, have been duly authorized by all necessary
corporate action on the part of the Company. Assuming the representation
in Section 5.08 is true and correct, the adoption of this Agreement by the
holders of a majority of the outstanding Shares (the Company Stockholder Approval) is the only vote of the holders of any of the Companys capital stock necessary in connection with the consummation of the transactions
contemplated by the Transaction Agreements. Each of the Transaction Agreements to which it is a party constitutes a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except (i) as the same may
be limited by applicable bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or similar laws of general application relating to or affecting creditors rights
and (ii) for the limitations imposed by general principles of equity (regardless
of whether considered in a proceeding at law or in equity).
(b) At
a meeting duly called and held, the Companys Board of Directors has (i) determined that the Transaction Agreements and the
transactions contemplated thereby are fair to and in the best interest of the Companys stockholders, (ii) approved the Transaction Agreements and the transactions contemplated thereby, (iii) resolved to recommend adoption of this Agreement by
its stockholders, (iv) declared this Agreement and the Merger advisable and (v) directed that this Agreement be submitted to a vote at a meeting of the Companys
stockholders.
Section 4.03. Governmental Authorization. The execution, delivery and performance by the Company of the Transaction Agreements to which it is
a party and the consummation by the Company of the transactions contemplated thereby require no action by the Company by or in respect of, or filing by the Company with, any governmental body, agency, official or authority, domestic, foreign or
supranational, other than (i) the filing of a certificate of merger with respect to the Merger with the Delaware Secretary of State, (ii) compliance with any applicable requirements of the HSR Act and any applicable competition, antitrust or similar
law of any jurisdiction outside the United States, (iii) compliance with any applicable requirements of the 1934 Act and the rules and regulations promulgated thereunder, (iv) such consents, approvals, orders, authorizations, registrations,
declarations and filings as may be required under applicable state securities laws and the securities laws of any foreign country and (v) any actions or filings the failure of which to take is not reasonably likely to have, individually or in the
aggregate, a Company Material Adverse Effect. To the Knowledge of the Company, as of the date of this Agreement, there is no material issue with regard to the transactions contemplated by the Transaction Agreements under the
HSR Act or any applicable competition, antitrust or similar law of any jurisdiction outside the United States.
Section 4.04. Non-contravention. The execution, delivery and performance by the Company of each Transaction Agreement to which it is a party
and the consummation by the Company of the transactions contemplated thereby do not and will not (i) contravene, conflict with or result in any violation or breach of any provision of the certificate of incorporation or bylaws of the Company, (ii)
assuming compliance with the matters referred to in Section 4.03, contravene, conflict with or result in a violation or breach of any provision of any law, statute, ordinance, rule, regulation, judgment, injunction, order or decree applicable to the
Company or any of its Subsidiaries, (iii) require any consent or other action by any Person under, constitute a default, or an event that, with or without notice or lapse of time or both, would constitute a default, under, or cause or permit the
termination, cancellation, acceleration or the loss of any material benefit to which the Company or any of its Subsidiaries is entitled under any provision of any agreement, other instrument, license, franchise, permit, certificate, approval or
other similar authorization to which the Company or any of its Subsidiaries is a party or by which any of their respective assets are bound or (iv) result in the creation or imposition of any Lien on any asset of the Company or any of its
Subsidiaries, except in the case of clauses (ii), (iii), and (iv) for such contraventions, conflicts, violations or breaches, failures to obtain any such consent or take any other action, defaults, terminations, cancellations, accelerations, losses
or Liens that are not reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect.
Section 4.05. Capitalization.
(a) The authorized capital stock of the Company consists of (i) 100,000,000
Shares and (ii) 10,000,000 shares of preferred stock, $0.01 par value per
share (the Preferred Stock), of which 1,000,000 shares
have been designated Series B Preferred Stock. As of the close of business
on April 15, 2005, there were outstanding 34,894,799 Shares and no shares
of Preferred Stock. As of the close of business on April 15, 2005, there
were outstanding Company Stock Options to purchase an aggregate of 6,383,731
Shares (of which options to purchase an aggregate of 5,384,682 Shares had
an exercise price equal to or less than $37.00 and a weighted-average exercise
price of $16.33) . Section 4.05(a) of the Company Disclosure Schedule sets
forth a schedule of all outstanding Company Stock Options as of the close
of business on April 15, 2005, including with respect to each such Company
Stock Option, the name of the holder, the equity compensation plan under
which it was granted, whether the option is an incentive stock option or
a non-qualified stock option, the exercise price and the grant date. All
outstanding shares of capital stock of the Company have been, and all Shares
that may be issued upon exercise of Company Stock Options will be when issued,
duly authorized, validly issued, fully paid and nonassessable. No Subsidiary
of the Company owns any shares of capital stock of the Company.
(b) Except
as set forth in this Section 4.05 and for changes since March 31, 2005 resulting
from the exercise of Company Stock Options outstanding on such date, as
of the date of this Agreement there are no outstanding (i) shares of capital
stock of or other voting securities or ownership interests in the Company,
(ii) securities of the Company convertible into or exchangeable for shares
of capital stock or other voting securities or ownership interests in the
Company or (iii) options or other rights to acquire from the Company, or
other obligation of the Company to issue, any capital stock or other voting
securities or ownership interests in or any securities convertible into
or exchangeable for capital stock or other voting securities or ownership
interests in the Company (the items in clauses (i), (ii) and (iii) being
referred to collectively as the Company Securities).
There are no outstanding obligations of the Company or any of its Subsidiaries
to repurchase, redeem or otherwise acquire any of the Company Securities.
Section 4.06. Subsidiaries. (a) Each Subsidiary of the Company is a corporation duly incorporated, validly existing and in good standing
(with respect to jurisdictions that recognize such concept) under the laws of its jurisdiction of incorporation, has all corporate powers and all governmental licenses, authorizations, permits, consents and approvals required to carry on its
business as now conducted, except for those licenses, authorizations, permits, consents and approvals the absence of which are not reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect. Each such Subsidiary
is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction (with respect to jurisdictions that recognize such concept) where such qualification is necessary, except for those jurisdictions where failure to
be so qualified is not reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect. All Subsidiaries of the Company and their respective jurisdictions of incorporation are identified in Section 4.06(a) of the
Company Disclosure Schedule.
(b) All
of the outstanding capital stock of, or other voting securities or ownership
interests in, each Subsidiary of the Company is owned by the Company, directly
or indirectly, free and clear of any Lien and free of any other limitation
or restriction (including any restriction on the right to vote, sell or
otherwise dispose of such capital stock or other voting securities or ownership
interests). There are no outstanding (i) securities of the Company or any
of its Subsidiaries convertible into or exchangeable for shares of capital
stock of or other voting securities or ownership interests in any Subsidiary
of the Company or (ii) options or other rights to acquire from the Company
or any of its Subsidiaries, or other obligation of the Company or any of
its Subsidiaries to issue, any capital stock of or other voting securities
or ownership interests in, or any securities convertible into or exchangeable
for any capital stock of or other voting securities or ownership interests
in, any Subsidiary of the Company (the items in clauses (i) and (ii) being
referred to collectively as the Company Subsidiary Securities).
There are no outstanding obligations of the Company or any of its Subsidiaries
to
repurchase, redeem or otherwise acquire any of the Company Subsidiary Securities.
Section 4.07. SEC Filings; Sarbanes-Oxley Act.
(a) The Company has made available to Parent true and complete copies of
(i) the Companys annual reports on Form 10-K for its fiscal years
ended December 31, 2004 and 2003, (ii) its proxy or information statements
relating to meetings of the stockholders of the Company held (or actions
taken without a meeting by such stockholders) since January 1, 2003 and
(iii) all of its other reports, statements, schedules and registration statements
filed with the SEC since December 31, 2003 (the documents referred to in
the foregoing clauses (i)-(iii), collectively, the Company SEC Documents).
The Company has made available to Parent true and complete copies of all
comment letters from the staff of the SEC relating to the Company SEC Documents
and all written responses of the Company thereto.
(b) As of its filing date, each Company SEC Document complied, and each such Company SEC Document filed subsequent to the date hereof will
comply, as to form in all material respects with the applicable requirements of the 1933 Act and the 1934 Act, as the case may be.
(c) As of its filing date (or, if amended or superseded by a filing prior to the date hereof, on the date of such filing), each Company SEC
Document filed pursuant to the 1934 Act did not, and each such Company SEC Document filed subsequent to the date hereof 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 made therein, in the light of the circumstances under which they were made, not misleading.
(d) Each Company SEC Document that is a registration statement, as amended or supplemented, if applicable, filed pursuant to the 1933 Act, as
of the date such registration statement or any post-effective amendment thereto 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 therein not misleading.
(e) Each
Company SEC Document that was required to be accompanied by the certifications
required to be filed or submitted by the Companys
principal executive officer and principal financial officer pursuant to the Sarbanes-Oxley
Act was accompanied by such certification and, at the time of filing or
submission of each such certification, such certification was true and accurate
and complied with the Sarbanes-Oxley Act.
(f) There are no outstanding loans made by the Company or any of its Subsidiaries to any executive officer (as defined in Rule 3b-7 under the
1934 Act) or director of the Company. The Company has not since the enactment of the Sarbanes-Oxley Act, taken any action prohibited by Section 402 of the Sarbanes-Oxley Act.
Section 4.08. Financial Statements.
The audited consolidated financial statements and unaudited consolidated
interim financial statements of the Company included in the Company SEC
Documents fairly present, in conformity with generally accepted accounting
principles in the United States (GAAP) applied on a consistent
basis (except as may be indicated in the notes thereto), the consolidated
financial position of the Company and its Subsidiaries as of the dates thereof
and their consolidated results of operations and cash flows for the periods
then ended (subject to normal year-end adjustments in the case of any unaudited
interim financial statements).
Section 4.09. Financial Controls.
The management of the Company has (i) established and maintained disclosure
controls and procedures (as defined in Rule 13a-15(e) under the 1934 Act)
to ensure that information required to be disclosed by the Company in the
reports that it files or submits under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the SECs rules and forms, (ii) established and maintains a system of internal control over financial reporting (as defined in Rule 13a-15(f) under the 1934 Act) designed to provide reasonable assurance regarding the reliability of
the Companys financial reporting and the preparation of Company financial statements for external purposes in accordance with GAAP and (iii) has disclosed, based on its most recent evaluation of internal control over financial reporting, to
the Companys auditors and the audit committee of the Companys Board of Directors (A) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting identified by the
management of the Company which are reasonably likely to adversely affect the Companys ability to record, process, summarize and report financial information and (B) any fraud, whether or not material, that involves management or other
employees who have a significant role in the Companys internal control
over financial reporting. The Company has disclosed to Parent prior to the date
hereof all disclosures described in clause (iii) of the immediately preceding
sentence made prior to the date of this Agreement.
Section 4.10. Disclosure Documents.
(a) The proxy statement of the Company to be filed with the SEC in connection
with the Merger (the Company Proxy Statement) and any
amendments or supplements thereto will, when filed, comply as to form in
all material respects with the applicable requirements of the 1934 Act.
At the time the Company 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 Company Proxy Statement, as supplemented
or amended, if applicable, will not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the statements
made therein, in the light of the circumstances under which they were made,
not misleading. The representations and warranties contained in this Section
4.10(a) will not apply to statements or omissions included in the Company
Proxy Statement based upon information furnished to the Company by Parent
specifically for use therein.
(b) All of the information provided or to be provided by the Company specifically for use in the Parent Shareholder Circular or in any
notification to any regulatory information service approved by the UK Listing Authority supplemental to the Parent Shareholder Circular, at the time the Parent Shareholder Circular is first mailed to shareholders of Parent or at the time any such
supplemental notification is made, respectively, and (in both cases) at the time such shareholders vote on the resolutions set forth in the Parent Shareholder Circular, will be in accordance with the facts and will not omit anything likely to affect
the import of such information.
Section 4.11. Absence of Certain Changes. Since the Balance Sheet Date, the business of the Company and its Subsidiaries has been conducted
in the ordinary course consistent with past practices and there has not been:
(a) any event, occurrence or circumstances that has had, or is reasonably be likely to have, individually or in the aggregate, a Company
Material Adverse Effect;
(b) 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 repurchase, redemption or other acquisition by the Company or any of its Subsidiaries of any outstanding shares of capital stock or other securities of, or other ownership interests in, the Company or any of its Subsidiaries (other than the
forfeiture or repurchase of restricted Shares granted under a Company Stock Plan);
(c) any amendment of any material term of any outstanding security of the Company or any of its Subsidiaries;
(d) prior to the date of this Agreement, any incurrence, assumption or guarantee by the Company or any of its Subsidiaries of any indebtedness
for borrowed money other than in the ordinary course of business and in amounts and on terms consistent with past practices;
(e) prior to the date of this Agreement, any creation or other incurrence by the Company or any of its Subsidiaries of any Lien on any material
asset other than in the ordinary course of business consistent with past practices;
(f) prior to the date of this Agreement, any making of any loan, advance or capital contributions to or investment in any Person other than (i)
loans, advances or capital contributions made in the ordinary course of business consistent with past practices or (ii) investments in its wholly-owned Subsidiaries made in the ordinary course of business consistent with past practices;
(g) prior to the date of this Agreement, any sale, lease (as lessor), license or other disposition of any properties or assets that are
material, individually or in the aggregate, to the Company and its Subsidiaries, taken as a
whole, except sales of assets in the ordinary course of business consistent with past practice;
(h) any change in any method of accounting or accounting principles or practice by the Company or any of its Subsidiaries, except for any such
change required by reason of a change in GAAP;
(i) prior to the date of this Agreement, any (i) grant of any material severance or termination pay to (or material amendment to any existing
arrangement with) any director or officer of the Company or any of its Subsidiaries, (ii) increase in the benefits payable under any existing severance or termination pay policies or employment or consultancy agreements to any director or officer of
the Company or any of its Subsidiaries, (iii) entering into of any employment, consultancy, deferred compensation, severance, retirement or other similar agreement (or any amendment to any such existing agreement) with any director or officer of the
Company or any of its Subsidiaries, (iv) establishment, adoption or material amendment (except as required to comply with applicable law) of any material collective bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred
compensation, compensation, equity compensation or other benefit plan or arrangement covering any director or employee of the Company or any of its Subsidiaries or (v) increase in compensation, bonus or other benefits payable to any director or
officer of the Company or any of its Subsidiaries, in each case other than in the ordinary course of business consistent with past practices and other than in connection with the hiring, election or promotion of new directors, officers or employees;
(j) any material labor dispute, other than routine individual grievances, or to the Knowledge of the Company, any material activity or
proceeding by a labor union or representative thereof to organize any employees of the Company or any of its Subsidiaries, which employees were not subject to a collective bargaining agreement at the Balance Sheet Date, or any lockouts, strikes,
slowdowns or work stoppages, or, to the Knowledge of the Company threats thereof, by or with respect to such employees; or
(k) 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 or claims for Tax refunds filed, any material closing agreement entered into, any Tax claim, audit or assessment settled, or any material right to claim a Tax refund, offset or other reduction in Tax liability
surrendered.
Section 4.12. No Undisclosed Material Liabilities. There are no liabilities or obligations of the Company or any of its Subsidiaries of any
kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise, and there is no existing condition, situation or set of circumstances that is reasonably likely to result in such a liability or obligation, other than:
(a) liabilities
or obligations disclosed and provided for in the Balance Sheet or in the
notes thereto or in the Company 10-K or any Company SEC Document filed subsequent
to the filing of the Company 10-K but prior to the date hereof (the Current SEC Documents);
and
(b) liabilities or obligations incurred in the ordinary course of business consistent with past practices since the Balance Sheet Date that are
not reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect.
Section 4.13. Compliance with Laws and Court Orders. The Company and each of its Subsidiaries is, and since January 1, 2002 has been, in
compliance with, and to the Knowledge of the Company is not under investigation with respect to and has not been threatened to be charged with or been given notice of any violation of, any applicable law, statute, ordinance, rule, regulation,
judgment, injunction, order or decree, except for failures to comply or violations that are not reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect.
Section 4.14. Litigation. There is no action, suit, investigation or proceeding (a) pending against, or, to the Knowledge of the Company,
threatened against the Company or any of its Subsidiaries or their respective properties or any Company Employees Plan or Company International Plan or (b) to the Knowledge of the Company, pending or threatened against any present or former officer,
director or employee of the Company or any of its Subsidiaries in respect of which action the Company or any of its Subsidiaries has indemnification obligations arising under applicable charter provisions, bylaw provisions or indemnification
agreements, in each case, before any court or arbitrator or before or by any governmental body, agency or official, domestic, foreign or supranational, that is reasonably likely to have, individually or in the aggregate, a Company Material Adverse
Effect.
Section 4.15. Finders Fees.
Except for SG Cowen & Co., LLC and Banc of America Securities LLC, copies
of whose engagement agreements have been provided to Parent, there is no
investment banker, broker, finder or other financial intermediary that has
been retained by or is authorized to act on behalf of the Company or any
of its Subsidiaries who would be entitled to any fee or commission in connection
with the transactions contemplated by the Transaction Agreements.
(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 of its
Subsidiaries have been filed when due (including any permitted extensions of time) in accordance with all applicable laws, and all such Tax Returns are, or will be at the time of filing, true and complete in all material respects, except for any
errors or
omissions that are not reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect.
(b) All Taxes shown as due on the Tax Returns filed by, or on behalf of, the Company or any of its Subsidiaries have been timely paid. The most
recent financial statements contained in the Company SEC Documents reflect an adequate reserve for all Taxes payable by the Company and its Subsidiaries for all Taxable periods and portions thereof through the date of such financial statements.
(c) The income and franchise Tax Returns of the Company and its Subsidiaries through the Tax year ended 1999 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) There is no claim, audit, action, suit, proceeding or investigation now pending or threatened in writing against or with respect to the
Company or its Subsidiaries in respect of any Tax, except for any claims, audits, actions, suits, proceedings or investigations that are not reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect.
(e) During the five-year period ending on the date hereof, neither the Company nor any of its Subsidiaries was a distributing corporation or a
controlled corporation in a transaction intended to be governed by Section 355 of the Code.
(f) There are no Liens for Taxes (other than for current Taxes not yet due and payable) on the assets of the Company or any of its
Subsidiaries, except for any Liens that are not reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect.
(g) Tax means
(i) any tax, governmental fee or other like assessment or charge in the
nature of a tax (including, but not limited to, withholding on amounts paid
to or by any Person), together with any interest, penalty, addition to tax
or additional amount imposed by any governmental authority (a Taxing Authority)
responsible for the imposition of any such tax (domestic or foreign), and
any liability for any of the foregoing as transferee, (ii) in the case of
the Company or any of its Subsidiaries, any liability for the payment of
any amount of the type described in clause (i) as a result of being or having
been before the Effective Time a member of an affiliated, consolidated,
combined or unitary group, or a party to any agreement or arrangement, as
a result of which liability of the Company or any of its Subsidiaries to
a Taxing Authority is determined or taken into account with reference to
the activities of any other Person, and (iii) any liability of the Company
or any of its Subsidiaries for the payment of any amount as a result of
being party to any tax sharing agreement or with respect to the payment
of any amount imposed on any person of the type described in (i) or (ii)
as a result of any existing express or implied agreement or arrangement
(including an indemnification agreement or arrangement). Tax Return means
any report, return, document, declaration or other information or filing required to be supplied to any Taxing Authority with respect to Taxes, including information returns, any documents with respect to or accompanying payments
of estimated Taxes, or with respect to or accompanying requests for the extension of time in which to file any such report, return, document, declaration or other information.
Section 4.17. Personnel Matters. (a) Section 4.17(a) of the Company Disclosure Schedule contains a correct and complete list identifying each
material Company Employee Plan. Copies of each material Company Employee Plan and any material amendments thereto have been furnished to Parent, and copies of, to the extent applicable, any related trust or funding agreements or insurance policies,
amendments thereto, prospectuses or summary plan descriptions relating thereto and the most recent annual report (Form 5500 including, if applicable, Schedule B thereto) and tax return (Form 990) prepared in connection therewith have been furnished
to Parent.
(b) Neither the Company nor any of its Subsidiaries nor any of their respective ERISA Affiliates nor any predecessor thereof sponsors,
maintains or contributes to, or has in the past sponsored, maintained or contributed to, any Employee Plan subject to Title IV of ERISA.
(c) Neither
the Company nor of its Subsidiaries nor any of their respective any ERISA
Affiliate nor any predecessor thereof contributes to, or has in the past
contributed to, any multiemployer plan, as defined in Section
3(37) of ERISA.
(d) Each Company Employee Plan that is intended to be qualified under Section 401(a) of the Code has received a favorable determination letter,
or has pending or has time remaining in which to file an application for such determination from the Internal Revenue Service, and the Company is not aware of any reason why any such determination letter should be revoked or not be issued. The
Company has furnished to Parent copies of the most recent Internal Revenue Service determination letters with respect to each such Company Employee Plan. Each Company Employee Plan has been maintained in material compliance with its terms and with
the requirements prescribed by any and all statutes, orders, rules and regulations, including ERISA and the Code, which are applicable to such Company Employee Plan. No events have occurred with respect to any Company Employee Plan that could result
in payment or assessment by or against the Company or any of its Subsidiaries or any of their respective ERISA Affiliates of any material excise taxes under Sections 4972, 4975, 4976, 4977, 4979, 4980B, 4980D, 4980E or 5000 of the Code.
(e) Neither the Company nor any of its Subsidiaries has any liability in respect of post-retirement health, medical or life insurance benefits
for retired, former or current employees of the Company or any of its Subsidiaries, except as required to comply with applicable law.
(f) Section 4.17(f) of the Company Disclosure Schedule contains a correct and complete list identifying each material Company International
Plan. Copies of each material Company International Plan and any material amendments thereto have been furnished to Parent, and copies of, to the extent applicable, any related trust or funding agreements or insurance policies, amendments thereto
and regulatory filings or similar documents that have been prepared therewith have been furnished to Parent. Each Company International Plan has been maintained in material compliance with its terms and with the requirements prescribed by any and
all applicable laws (including any special provisions relating to qualified plans where such Company International Plan was intended so to qualify) and has been maintained in good standing with applicable regulatory authorities.
(g) Except as set forth in Section 4.17(g) of the Company Disclosure Schedule, no Company Employee Plan or Company International Plan provides
for, as a result of the transactions contemplated by this Agreement (whether alone or in connection with other events), any payment of any material amount of money or other property to or the acceleration of or provision of any other material rights
or benefits to any present or former employee or director of the Company or any of its Subsidiaries, whether or not such payment, right or benefit would constitute a parachute payment within the meaning of Section 280G of the Code.
(h) Neither the Company nor any of its Subsidiaries is a party to or otherwise bound by any collective bargaining agreement, contract or other
agreement or understanding with a labor union or labor organization. No labor strike, slowdown or stoppage is actually pending or, to the Knowledge of the Company, threatened against or affecting the Company or any of its Subsidiaries.
(i) Since
the Balance Sheet Date, neither the Company nor any of its Subsidiaries
has effectuated (i) a plant closing (as defined
in the Worker Adjustment and Retraining Notification Act (the WARN Act)) affecting any site of employment or one or more facilities or operating units within any site of
employment or facility of the Company or any of its Subsidiaries; (ii) a mass layoff (as
defined in the WARN Act); or (iii) such other transaction, layoff, reduction
in force or employment terminations sufficient in number to trigger application
of any similar foreign, state or local law.
Section 4.18. Environmental Matters. (a) With such exceptions as are not reasonably likely to have, individually or in the aggregate, a
Company Material Adverse Effect:
(i) no notice, notification, demand, request for information, citation, summons or order has been received by the Company or any of its
Subsidiaries, no complaint has been filed, no penalty has been assessed against the Company, and, to the Knowledge of the Company, no investigation, action, claim, suit, proceeding or review is pending or is
threatened against the Company or any of its Subsidiaries by any governmental authority relating to or arising out of any Environmental Law; and
(ii) the Company and its Subsidiaries are and have been in compliance with all Environmental Laws and all Environmental Permits.
(b) There has been no environmental investigation, study, audit, test, review or other analysis conducted of which the Company has Knowledge in
relation to the current or prior business of the Company or any of its Subsidiaries or any property or facility now or previously owned or leased by the Company or any of its Subsidiaries that has not been delivered to Parent prior to the date
hereof.
(c) Neither the Company nor any of its Subsidiaries owns, leases or operates or has owned, leased or operated any real property, or conducts or
has conducted any operations, in New Jersey or Connecticut.
(d) For
purposes of this Section 4.18, the terms Company and Subsidiaries shall
include any entity that is, in whole or in part, a predecessor of the Company
or any of its Subsidiaries.
Section 4.19. Intellectual Property.
(a) Section 4.19(a) -1 of the Company Disclosure Schedule contains a true
and complete list of each of the registrations and applications for registration
of Intellectual Property Rights included in the Owned Intellectual Property
Rights that are material to the Company and its Subsidiaries, taken as whole.
Section 4.19(a) -2 of the Company Disclosure Schedule contains a true and
complete list of all agreements (including license agreements, research
agreements, development agreements, distribution agreements, settlement
agreements, consent to use agreements and covenants not to sue, but excluding
licenses for personal computer software that are generally available on
nondiscriminatory pricing terms and have an acquisition cost of $100,000
or less) to which the Company or any of its Subsidiaries is a party or otherwise
bound, granting or restricting any right to use, exploit or practice any
Intellectual Property Rights that are used or held for use by the Company
or any of its Subsidiaries and that are material to the Company and its
Subsidiaries, taken as whole (each, a License Agreement).
(b) To the Knowledge of the Company, the Licensed Intellectual Property Rights and the Owned Intellectual Property Rights together constitute
all the Intellectual Property Rights necessary to, or used or held for use in, the business of the Company and its Subsidiaries as currently conducted. The consummation of the transactions contemplated by this Agreement will not alter, encumber,
impair or extinguish in any material respect any Owned Intellectual Property Rights or Licensed Intellectual Property Rights that are material to the Company and its Subsidiaries, taken as a whole.
(c) Neither the Company nor any Subsidiary of the Company has given to any Person an indemnity in connection with any Intellectual Property
Right, other than indemnities that, individually or in the aggregate, are not reasonably likely to result in a material liability to the Company or any of its Subsidiaries.
(d) Except as would not be reasonably likely to have a Company Material Adverse Effect, neither the Company nor any Subsidiary of the Company
has infringed, misappropriated or otherwise violated any Intellectual Property Right of any third party. The Company and the Subsidiaries of the Company are in compliance with, and are not in breach of any term of any of the License Agreements and,
to the Knowledge of the Company, all other parties to such License Agreements are in compliance with, and have not breached any term of, such License Agreements, except for any failure to comply or breach that is not reasonably likely to have,
individually or in the aggregate, a Company Material Adverse Effect. There is no claim, action, suit, investigation or proceeding pending against, or, to the Knowledge of the Company, threatened in writing against, the Company or any of its
Subsidiaries (i) based upon, or challenging or seeking to deny or restrict, the rights of the Company or any Subsidiary of the Company in any of the Owned Intellectual Property Rights and the Licensed Intellectual Property Rights that are material
to the Company and its Subsidiaries, taken as a whole, or (ii) alleging that the use of the Owned Intellectual Property Rights or the Licensed Intellectual Property Rights or any services provided, processes used or products manufactured, used,
imported or sold by the Company or any of its Subsidiaries conflict with, misappropriate, infringe or otherwise violate any Intellectual Property Right of any third party.
(e) None of the registered Owned Intellectual Property Rights and registered Licensed Intellectual Property Rights material to the Company and
its Subsidiaries, taken as a whole, has been adjudged by a court or administrative body of competent jurisdiction invalid or unenforceable in whole or part, and, to the Knowledge of the Company, all such registered Owned Intellectual Property Rights
and registered Licensed Intellectual Property Rights are valid and enforceable.
(f) The Company or a Subsidiary of the Company holds all right, title and interest in and to all Owned Intellectual Property Rights that are
material to the Company and its Subsidiaries, taken as a whole, and all right, title and interest in licenses to all Licensed Intellectual Property Rights that are material to the Company and its Subsidiaries, taken as a whole, in each case, 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 duly recorded with the governmental authority from which the patent or registration issued or before which the application or application for registration is pending, except
any failure to duly record that is not reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect. The Company or a
26
Subsidiary of the Company has taken commercially reasonable actions to maintain and protect the registered Owned Intellectual Property Rights and the registered Licensed Intellectual Property Rights (to the extent the Company has
the right to take such actions with respect to such Licensed Intellectual Property) that are material to the Company and its Subsidiaries, taken as a whole, including payment of applicable maintenance fees and filing of applicable statements of
use.
(g) To the Knowledge of the Company, no Person has infringed, misappropriated or otherwise violated any Owned Intellectual Property Rights or
Licensed Intellectual Property Rights that are material to the Company and its Subsidiaries, taken as a whole, in a manner that would be reasonably likely to have a Company Material Adverse Effect. The Company or a Subsidiary of the Company has
taken reasonable steps in accordance with normal industry practice to maintain the confidentiality of all confidential Intellectual Property Rights, except any failure to take such steps that is not reasonably likely to have, individually or in the
aggregate, a Company Material Adverse Effect.
(h) To the Knowledge of the Company, none of the trademarks, service marks, applications for trademarks and applications for service marks
included in the Owned Intellectual Property Rights that are material to the Company and its Subsidiaries, taken as a whole, are subject to a pending opposition or cancellation procedure. To the Knowledge of the Company, none of the patents and
patent applications included in the Owned Intellectual Property Rights or the Licensed Intellectual Property Rights that are material to the Company and its Subsidiaries, taken as a whole, is the subject of an interference, protest, public use
proceeding, opposition, revocation proceeding, third party reexamination request or compulsory licensing arrangement.
(i) To the Knowledge of the Company, the Company or a Subsidiary of the Company owns or has the right to use all Intellectual Property Rights
necessary to use the HT 1080 cell line obtained from the American Type Culture Collection in the manufacture of the products sold by the Company or a Subsidiary of the Company.
Section 4.20. Regulatory Matters.
(a) With only such exceptions as are not reasonably likely to have, individually
or in the aggregate, a Company Material Adverse Effect, all manufacturing,
processing, distribution, labeling, storage, testing, specifications, sale
or marketing of products performed by or on behalf of the Company or any
of its Subsidiaries are in compliance with all applicable laws, rules, regulations,
or orders administered or issued by any governmental or supranational regulatory
authority, including the Food and Drug Administration (FDA),
the Drug Enforcement Agency, or any counterpart regulatory authorities in
the European Union.
(b) With only such exceptions as are not reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect, all
pre-clinical and clinical investigations conducted or sponsored by the Company or
any of its Subsidiaries are being conducted
in compliance with all applicable laws, rules, and regulations, administered
or issued by the FDA or any counterpart regulatory authorities in the European
Union, including: the FDAs standards for conducting non clinical laboratory studies contained in Title 21 part 58 of the Code of Federal Regulations; investigational new drug requirements; the FDAs
standards for the design, conduct, performance, monitoring, auditing, recording,
analysis and reporting of clinical trials contained in Title 21 parts 50,
54, 56, 312, 314, and 320 of the Code of Federal Regulations (including
informed consent and institutional review boards designed to ensure the
protection of rights and welfare of human subjects); federal and state laws,
rules and regulations restricting the use and disclosure of individually
identifiable health information; and, as applicable, the International Conference
on Harmonisation (ICH) GCP consolidated Guideline (E6). Neither the Company
nor any of its Subsidiaries has received any written information from the
FDA, or, to the extent applicable, counterpart regulators in the European
Union, which would reasonably be expected to lead to the denial of any application
for marketing approval currently pending before the FDA, or, to the extent
applicable, counterpart regulators in the European Union.
(c) Neither
the Company nor any of its Subsidiaries has received any oral or written
communication (including any warning letter, untitled letter, Form 483s
or similar notices) from the FDA or any counterpart regulatory authorities
in the European Union, and to the Companys Knowledge there is no action
or proceeding pending or threatened (including any prosecution, injunction,
seizure, civil fine, suspension or recall), in each case alleging that the
Company or any of its Subsidiaries is not currently in compliance with any
and all applicable laws, regulations or orders implemented by the FDA, the
Drug Enforcement Agency, any counterpart regulatory authorities in the European
Union or any other country, with only such exceptions as are not reasonably
likely to have, individually or in the aggregate, a Company Material Adverse
Effect. There are no pending voluntary or involuntary market withdrawals,
field corrective actions (including recalls), destruction orders, seizures
or other regulatory enforcement actions related to any product that are
reasonably likely to have, individually or in the aggregate, a Company Material
Adverse Effect.
(d) Neither
the Company nor any of its Subsidiaries has received any correspondence
from the FDA, or a counterpart regulatory authority in the European Union,
regarding, and, to the Companys Knowledge, there is no pending or
threatened action or proceeding against, the Company or any of its Subsidiaries
or any of its employees regarding any debarment action or investigation
undertaken pursuant to the Generic Drug Enforcement Act of 1992 (21 U.S.C.
Sections 335(a), (b) and (c)), or any similar regulation of the FDA or any
similar regulation of any counterpart regulatory authority in the European
Union, except for any action or proceeding that is not reasonably likely
to have, individually or in the aggregate, a Company Material Adverse Effect.
(e) To
the Companys Knowledge, no data generated by the Company or any of
its Subsidiaries with respect to its products that has been provided to
its 28
customers or otherwise made public is the subject of any regulatory or other action, either pending or threatened, by the FDA or any other comparable governmental authority relating to the truthfulness or scientific adequacy of
such data.
(f) Neither the Company nor any of its Subsidiaries is subject to any pending or, to the Knowledge of the Company, threatened, investigation by
(i) the FDA pursuant to its Fraud, Untrue, Material Facts, Bribery, and Illegal Gratuities Final Policy, (ii) the Department of Health and Human Services Office of Inspector General or Department of Justice pursuant to the Federal Anti-Kickback
Statute (42 U.S.C. Section 1320a-7(b)) or the Civil False Claims Act (31 U.S.C. Section 3729 et seq.) or (iii) any equivalent statute or policy of or in any country in the European Union,
and to the Knowledge of the Company, there is no basis therefor.
(g) The
Company has, prior to the execution of this Agreement, made available to
Parent copies of any and all documents in its or any of its Subsidiaries possession that are material to assessing the Companys or any of its Subsidiaries compliance
with the Federal Food, Drug and Cosmetic Act or the International Standards
Organization and their respective implementing regulations or any other
similar regulations in any applicable jurisdiction.
Section 4.21. Material Contracts. (a)
All of the material contracts (the Material
Contracts) of the Company and its Subsidiaries that are required to
be described in the Company SEC Documents (or to be filed as exhibits thereto)
are so described in the Company SEC Documents (or filed as exhibits thereto)
and are in full force and effect. Neither the Company nor any of its Subsidiaries
is a party to or bound by any contract (a Product Contract)
that relates to the research, development, distribution, supply, license, co-promotion
or manufacturing of any Key Product which, if terminated or not renewed, is reasonably
likely to have a material adverse effect on any Key Product. Each Product Contract
set forth in Section 4.21(a) of the Company Disclosure Schedule is in full force
and effect. True and complete copies of all Material Contracts and Product Contracts
have been made available by the Company to Parent. Neither the Company nor any
of its Subsidiaries nor, to the Knowledge of the Company, any other party is
in breach of or in default under any Material Contract or Product Contract, except
for such breaches and defaults as are not reasonably likely to have, individually
or in the aggregate, a Company Material Adverse Effect. Key Product means
any of Replagal, Iduronate-2-Sulfatase for Hunter syndrome and Gene-Activated
Glucocerebrosidase for Gaucher disease.
(b) Neither the Company nor any of its Subsidiaries is party to any agreement containing any provision or covenant limiting in any material
respect the ability of the Company or any of its Subsidiaries (or, after the consummation of the Merger, Parent, the Surviving Corporation or any of their respective Subsidiaries) to (i) sell any products or services of or to any other Person, (ii)
engage in any line of business or (iii) compete with or to obtain products or
services from any Person or limiting the ability of any Person to provide products or services to Parent or any of its Subsidiaries (or, after the consummation of the Merger, Parent, the Surviving Corporation or any of their
respective Subsidiaries), in each case under this Section 4.21(b) other than any territorial restriction contained in a license or distribution agreement disclosed to Parent pursuant to Section 4.19 or entered into after the date of this Agreement
in the ordinary course of business in compliance with the terms of this Agreement, which restriction is applicable solely to the product licensed or distributed under such agreement.
Section 4.22. Opinion of Financial Advisors.
The Company has received the opinions of SG Cowen & Co., LLC and Banc of America Securities
LLC, financial advisors to the Company, to the effect that, as of the date of this Agreement, the Merger Consideration is fair to the Companys
stockholders from a financial point of view.
Section 4.23. Antitakeover Statutes and Rights Agreement.
(a) Assuming that the representation in Section 5.08 is true and correct,
the Company has taken all action necessary to exempt the Merger, this Agreement,
the Voting Agreement and the transactions contemplated hereby and thereby
from Section 203 of the Delaware Law, and, accordingly, such Section does
not apply to any such transactions. No other control share acquisition, fair price, moratorium or
other antitakeover laws or regulations enacted under U.S. state or federal
laws apply to this Agreement or any of the transactions contemplated hereby.
(b) The
Company has taken all action necessary to render the rights issued pursuant
to the terms of the Companys Rights Agreement dated
December 31, 2000 between the Company and Equiserve Trust Company, N.A., inapplicable
to the Merger, this Agreement, the Voting Agreement and the transactions
contemplated hereby and thereby.
Section 4.24. Hunter Data. As
of the date of this Agreement, the Company has furnished all material information,
results and analyses of which it has Knowledge relating to the effect of
the Companys Iduronate-2-Sulfatase product (I2S) on patients with Hunter syndrome (the Hunter
Data) to Parent. As of the date of this Agreement, the Company has no Knowledge as to the likely results of the AIM Study.
Section 4.25. Dynepo License. The
license agreement provided to Parent prior to the date of this Agreement
(and attached as Section 4.25 of the Company Disclosure Schedules) is the
license agreement (with names and commercial payment terms redacted) negotiated
by the Company at arms-length with a bona fide Third Party with respect to the manufacture, distribution and sale of Dynepo outside of North America.
ARTICLE 5
Parent represents and warrants to the Company that:
Section 5.01. Corporate Existence and Power. Each of Parent and Merger Subsidiary is duly incorporated, duly organized, validly existing and,
in the case of Merger Subsidiary only, in good standing under the laws of its jurisdiction of incorporation and has all corporate powers and all governmental licenses, authorizations, permits, consents and approvals required to carry on its business
as now conducted, except for those licenses, authorizations, permits, consents and approvals the absence of which are not reasonably likely to have, individually or in the aggregate, a Parent Material Adverse Effect. Parent has heretofore made
available to the Company true and complete copies of the organizational documents of Parent and the certificate of incorporation and bylaws of Merger Subsidiary as currently in effect. Since the date of its incorporation, Merger Subsidiary has not
engaged in any activities other than in connection with or as contemplated by this Agreement.
Section 5.02. Corporate Authorization.
The execution, delivery and performance by Parent and Merger Subsidiary
of each Transaction Agreement to which it is a party and the consummation
by Parent and Merger Subsidiary of the transactions contemplated thereby
are within the corporate powers of Parent and Merger Subsidiary and, except
for the required approval of Parents shareholders
and the adoption of this Agreement by the sole stockholder of Merger Subsidiary, which in the case of Merger Subsidiary will be obtained promptly after the execution and delivery of this Agreement, in connection with the consummation of the
transactions contemplated thereby, have been duly authorized by all necessary company action on the part of Parent and Merger Subsidiary. The only vote of the holders of any of Parents share capital necessary in connection with the
consummation of the transactions contemplated by the Transaction Agreements is the affirmative vote on a show of hands of a simple majority of the holders of ordinary shares of Parent present in person at a duly convened general meeting of Parent,
or the affirmative vote on a poll of a simple majority of the votes attached to the issued ordinary shares of Parent voted in person or by proxy at such a general meeting in favor of the Merger. For the avoidance of doubt, no vote of the holders of
any of Parents share capital is necessary in connection with the entry into and performance by Parent of the Dynepo License Agreement. Each Transaction Agreement to which it is a party constitutes a valid and binding agreement of each of
Parent and Merger Subsidiary, enforceable against each of Parent and Merger Subsidiary in accordance with its terms, except (i) as the same may be limited by applicable bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or
similar laws of general application relating to or affecting creditors rights
and (ii) for the limitations imposed by general principles of equity (regardless
of whether considered in a proceeding at law or in equity).
Section 5.03. Governmental Authorization. The execution, delivery and performance by Parent and Merger Subsidiary of each Transaction
Agreement to which it is a party and the consummation by Parent and Merger Subsidiary of the transactions contemplated thereby require no action by Parent or Merger Subsidiary by or in respect of, or filing by Parent or Merger Subsidiary with, any
governmental body, agency, official or authority, domestic, foreign or supranational, other than (i) the filing of a certificate of merger with respect to the Merger with the Delaware Secretary of State, (ii) compliance with any applicable
requirements of the HSR Act and any applicable competition, antitrust or similar law of any jurisdiction outside the United States, (iii) compliance with any applicable requirements of the 1934 Act and the rules and regulations promulgated
thereunder, (iv) such consents, approvals, orders, authorizations, registrations, declarations and filings as may be required under applicable state securities laws and the securities laws of any foreign country (including any approvals contemplated
by Section 7.01) and (v) any actions or filings the failure of which to take is not reasonably likely to have, individually or in the aggregate, a Parent Material Adverse Effect. To the Knowledge of Parent, as of the date of this Agreement, there is
no material issue with regard to the transactions contemplated by the Transaction Agreements under the HSR Act or any applicable competition, antitrust or similar law of any jurisdiction outside the United States.
Section 5.04. Non-contravention. The execution, delivery and performance by Parent and Merger Subsidiary of each Transaction Agreement to
which it is a party and the consummation by Parent and Merger Subsidiary of the transactions contemplated thereby do not and will not (i) contravene, conflict with or result in any violation or breach of any provision of the organizational documents
of Parent or the certificate of incorporation or bylaws of Merger Subsidiary, (ii) assuming compliance with the matters referred to in Section 5.03, contravene, conflict with or result in any violation or breach of any provision of any law, rule,
regulation, judgment, injunction, order or decree applicable to Parent or Merger Subsidiary, (iii) require any consent or other action by any Person under, constitute a default or an event that, with or without notice or lapse of time or both, would
constitute a default, under, or cause or permit the termination, cancellation, acceleration or the loss of any material benefit to which Parent or any of its Subsidiaries is entitled under any provision of any agreement, other instrument, license,
franchise, permit, certificate, approval or other similar authorization to which Parent or any of its Subsidiaries is a party or by which any of their respective assets are bound or (iv) result in the creation or imposition of any Lien on any asset
of Parent or any of its Subsidiaries, except in the case of clauses (ii), (iii) and (iv) for such contraventions, conflicts, violations or breaches, failures to obtain any such consent or take any other action, defaults, terminations, cancellations,
accelerations, losses or Liens that are not reasonably likely to have, individually or in the aggregate, a Parent Material Adverse Effect.
Section 5.05. Disclosure Documents.
(a) The shareholder circular to be prepared by Parent and delivered to its
shareholders in connection with the Merger (the Parent Shareholder Circular)
will, at the time it is first mailed to shareholders of Parent, be in accordance
with facts and will not omit anything likely to affect the import of the
information contained in such Parent Shareholder Circular. As of the time
of the shareholder vote with respect to the approval of the Merger, Parent
shall have duly provided its shareholders, to the extent that Parent is
obligated to do so, with all notices as to changes in relevant facts or
circumstances since the delivery of the Parent Shareholder Circular that
are necessary in order for such shareholders to duly vote upon the resolutions
relating to the Merger at such time. The representations and warranties
contained in this Section 5.05(a) will not apply to statements or omissions
included in the Parent Shareholder Circular or any supplemental notification
based upon information furnished to Parent by the Company specifically for
use therein.
(b) None of the information provided or to be provided by Parent specifically for use in the Company Proxy Statement or any amendment or
supplement thereto, at the time the Company Proxy Statement or any amendment or supplement thereto is first mailed to stockholders of the Company and at the time the stockholders vote on adoption of this Agreement, will contain any untrue statement
of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading.
Section 5.06. Finders Fees.
Except for Goldman Sachs International and Parents other financial
advisors, whose fees, in each case, will be paid by Parent, there is no
investment banker, broker, finder or other financial intermediary that has
been retained by or is authorized to act on behalf of Parent who is entitled
to any fee or commission in connection with the transactions contemplated
by the Transaction Agreements.
Section 5.07. Financing. Parent will have at the Effective Time sufficient funds available to enable it to pay the Merger Consideration and
consummate the transactions contemplated hereby.
Section 5.08. Interested Stockholder. None
of Parent, Merger Subsidiary or any of their affiliates or associates is,
or has been within the last three years, an interested stockholder of
the Company as those terms are defined in Section 203 of the Delaware Law.
The Company agrees that:
Section 6.01. Conduct of the Company. Except as set forth in Section 6.01 of the Company Disclosure Schedule or as otherwise specifically
contemplated by this Agreement, from the date of this Agreement until the Effective Time, the Company and its Subsidiaries shall conduct their business in all material respects in the ordinary course consistent with past practice and shall use their
reasonable best efforts to preserve intact their business organizations and relationships with third parties and to keep available the services of their present officers and employees. Without limiting the generality of the foregoing, from the date
hereof until the Effective Time, except as set forth in Section 6.01 of the Company Disclosure Schedule or as specifically contemplated by this Agreement or with the prior written consent of Parent:
(a) the Company shall not adopt or propose any change to its certificate of incorporation or bylaws;
(b) the Company shall not, and shall not permit any of its Subsidiaries to, merge or consolidate with any other Person or acquire a material
amount of stock or assets of any other Person;
(c) the Company shall not, and shall not permit any of its Subsidiaries to, sell, lease, license or otherwise dispose of any material
Subsidiary or material amount of assets, securities or property (other than (i) pursuant to existing contracts or commitments, (ii) sales of inventory in the ordinary course of business consistent with past practices and (iii) dispositions to
wholly-owned domestic Subsidiaries of the Company);
(d) the Company shall not declare, set aside or pay any dividend or other distribution with respect to any shares of capital stock of the
Company, or repurchase, redeem or otherwise acquire any outstanding shares of capital stock or other securities of, or other ownership interests in, the Company or any of its Subsidiaries (other than the forfeiture or repurchase of restricted Shares
granted under a Company Stock Plan);
(e) the Company shall not, and shall not permit any of its Subsidiaries to, amend any material term of any outstanding security of the Company
or any of its Subsidiaries;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, create or incur any Lien on any material asset (other than any
immaterial Lien incurred in the ordinary course of business);
(g) the Company shall not, and shall not permit any of its Subsidiaries to, incur, assume or guarantee of any indebtedness for borrowed money
(other than indebtedness owed to the Company or one of its wholly-owned Subsidiaries);
(h) the Company shall not, and shall not permit any of its Subsidiaries to, make any loan, advance or capital contributions to or investment in
any Person (other than (i) investments in its wholly-owned Subsidiaries made in the ordinary course of business consistent with past practices and (ii) advances to employees for business travel expenses consistent with past practices and in no event
in excess of $10,000 per advance);
(i) the Company shall not, and shall not permit any of its Subsidiaries to, make any change in any method of accounting or accounting
principles or practice, except for any such change required by reason of a change in GAAP;
(j) the Company shall not, and shall not permit any of its Subsidiaries to, enter into or amend in any material respect any material contract,
agreement or arrangement (other than (i) contracts entered into in the ordinary course of business consistent with past practices providing for payments not in excess of $100,000 per contract and (ii) clinical, supply and manufacturing contracts
entered into in the ordinary course of business consistent with past practices providing for payments by the Company or any of its Subsidiaries not in excess of $200,000 per contract);
(k) the
Company shall not make any new equity compensation awards (other than (x)
any award of Company Stock Options that is made pursuant to an offer of
employment that has been made prior to the date hereof, whether or not accepted
as of the date hereof, and (y) any award of Company Stock Options that is
made pursuant to an offer of employment that is made on or after the date
hereof in the ordinary course of business consistent with past practice
(any Company Stock Option described in clause (y), a Specified Stock Option))
or re-price (or effectively re-price through an option exchange or otherwise)
any currently outstanding Company Stock Options, and shall not, and shall
not permit any of its Subsidiaries to, enter into or amend any existing,
employment, consultancy, deferred compensation, severance, retirement or
other similar agreement with any director or employee, unless such agreement
or amendment is (i) in the ordinary course consistent with past practice,
(ii) in accordance with the approved 2005 business plan of the Company and
its Subsidiaries or (iii) required to comply with applicable law (including
amendments to non-qualified deferred compensation plans to the extent necessary
to comply with Section 409A of the Code) or the terms of any Employee Plan
as in effect on the date hereof;
(l) the Company shall not, and shall not permit any of its Subsidiaries to, (A) make or change any material election or method of accounting
relating to Taxes, (B) file any amended Tax Return or claim for refund relating to material Taxes, (C) enter into any agreement with, or request a written ruling from, any Taxing Authority relating to material Taxes, or (D) compromise or settle any
audit, appeal, suit, other proceeding relating to a material Tax liability or claim for refund;
(m) the Company shall not, and shall not permit any of its Subsidiaries to waive, release, assign, settle or compromise any material claims, or
any material litigation or arbitration; and
(n) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.
Section 6.02. Stockholder Meeting; Proxy Material.
The Company shall cause a meeting of its stockholders (the Company Stockholder Meeting) to be duly called and held as soon as reasonably practicable following the clearance of the Company Proxy Statement by the SEC for the purpose of obtaining the Company
Stockholder Approval. Without limiting the generality of the foregoing, the Companys obligations pursuant to the preceding sentence shall not be affected by any Adverse Recommendation Change. Notwithstanding the foregoing, if the Company
properly exercises its right to terminate this Agreement pursuant to and in accordance with Section 10.01(d), the Companys obligations pursuant to the first sentence of this Section 6.02 shall terminate. Subject to Section 6.03(b), the Board
of Directors of the Company shall recommend adoption of this Agreement by the Companys
stockholders and shall not (i) recommend the approval or adoption of any Acquisition
Proposal, (ii) determine that this Agreement or the Merger is no longer advisable,
(iii) withdraw or modify in any manner adverse to Parent or Merger Subsidiary
the recommendation of this Agreement, the Merger or any of the other transactions
contemplated hereby, (iv) recommend that the stockholders of the Company reject
this Agreement, the Merger or any of the other transactions contemplated hereby
or (v) resolve, agree or propose publicly to take any such actions (each such
action being referred to as an Adverse
Recommendation Change). In connection with the Company Stockholder
Meeting, the Company shall (i) promptly prepare and file with the SEC, shall
use its reasonable best efforts to have cleared by the SEC and shall thereafter
mail to its stockholders as promptly as reasonably practicable the Company Proxy
Statement and all other proxy materials for the Company Stockholder Meeting,
(ii) use its reasonable best efforts to obtain the Company Stockholder Approval
and (iii) otherwise comply with all legal requirements applicable to such meeting.
Section 6.03. No Solicitation; Other Offers. (a) Except as permitted by Section 6.03(b), neither the Company nor any of its Subsidiaries
shall, nor shall the Company or any of its Subsidiaries authorize or permit any of its or their officers, directors, employees, investment bankers, attorneys, accountants, consultants or other agents or advisors to, directly or indirectly, (i)
solicit, initiate or take any action to knowingly facilitate or encourage the submission of any Acquisition Proposal, (ii) enter into or participate in any discussions or negotiations with, furnish any nonpublic information relating to the Company
or any of its Subsidiaries or afford access to the business, properties, assets, books or records of the Company or any of its Subsidiaries to knowingly facilitate, or otherwise cooperate in any way with, any Third Party that has made, or has
informed the Company of any intention to make, or has publicly announced an 36
intention to make, an Acquisition Proposal,
(iii) (A) amend or grant any waiver or release under any standstill or similar
agreement with respect to any class of equity securities of the Company
or any of its Subsidiaries or (B) approve any transaction under, or any
Person becoming an interested stockholder under, Section 203
of Delaware Law or (iv) enter into any agreement with respect to an Acquisition
Proposal (other than a confidentiality agreement as contemplated by Section
6.03(b)) .
(b) Notwithstanding
the foregoing, the Company, directly or indirectly through advisors, agents
or other intermediaries, may (i) engage in negotiations or discussions with
any Third Party that, subject to the Companys compliance with Section
6.03(a), has made an Acquisition Proposal that the Board of Directors of
the Company has determined in good faith (after consultation with a financial
advisor of nationally recognized reputation) constitutes a Superior Proposal
or could reasonably be expected to lead to a Superior Proposal and/or (ii)
furnish to such Third Party nonpublic information relating to the Company
or any of its Subsidiaries pursuant to a confidentiality agreement with
terms no less favorable to the Company than those contained in the Confidentiality
Agreement dated October 13, 2004 between Parent and the Company (the Confidentiality Agreement) (it
being understood that such confidentiality agreement shall not be required
to contain a standstill provision). Notwithstanding anything to the contrary
in this Agreement, prior to receipt of the Company Stockholder Approval,
the Board of Directors of the Company shall be permitted to make an Adverse
Recommendation Change if the Board of Directors of the Company determines
in good faith, after consultation with outside legal counsel to the Company,
that it must take such action to comply with its fiduciary duties under
applicable law. Nothing contained herein shall prevent the Board of Directors
of the Company from complying with Rule 14d-9 and Rule 14e-2(a) under the
1934 Act with regard to an Acquisition Proposal or otherwise making disclosure
required by applicable law.
(c) The Board of Directors of the Company shall not take any of the actions referred to in Section 6.03(b) unless the Company shall have
delivered to Parent a prior written notice advising Parent that it intends to take such action. In addition, the Company shall notify Parent promptly (but in no event later than 24 hours) after receipt by the Company (or any of its advisors) of any
Acquisition Proposal or any request for nonpublic information relating to the Company or any of its Subsidiaries or for access to the business, properties, assets, books or records of the Company or any of its Subsidiaries by any Third Party that
has made, or has informed the Company of any intention to make, or has publicly announced an intention to make, an Acquisition Proposal. The Company shall provide such notice orally and in writing and shall identify the Third Party making, and the
material terms and conditions of, any such Acquisition Proposal or request. The Company shall keep Parent informed, on a current basis, of the status and details of any such Acquisition Proposal or request. The Company shall, and shall cause its
Subsidiaries and the advisors, employees and other
agents of the Company and any of its Subsidiaries to, cease immediately and cause to be terminated any and all existing activities, discussions and negotiations, if any, with any Third Party conducted prior to the date hereof with
respect to any Acquisition Proposal and shall use its reasonable best efforts to cause any such Third Party (or its agents or advisors) in possession of confidential information about the Company that was furnished by or on behalf of the Company to
return or destroy all such information.
Superior Proposal means
any bona fide, unsolicited written Acquisition Proposal (provided that
for the purpose of this definition, each reference to 20% in the definition of Acquisition Proposal shall be deemed to be a reference to 50%) on terms that
the Board of Directors of the Company determines in good faith after consulting with a financial advisor of nationally recognized reputation and taking into account all the terms and conditions of the Acquisition Proposal, including any break-up
fees, expense reimbursement provisions, conditions to consummation and the likelihood and timing of consummation, are more favorable to the Companys
stockholders than as provided hereunder and for which financing, to the extent
required, is then fully committed or reasonably determined to be available by
the Board of Directors of the Company.
Section 6.04. Access to Information. From the date hereof until the Effective Time and subject to applicable law, the Company shall (i) give
Parent, its counsel, financial advisors, auditors, potential financing sources and other authorized representatives reasonable access during normal business hours with reasonable notice to the offices, properties, employees, books and records of the
Company and the Subsidiaries, (ii) furnish to Parent, its counsel, financial advisors, auditors, potential financing sources and other authorized representatives such financial and operating data and other information as such Persons may reasonably
request and (iii) instruct the employees, counsel, financial advisors, auditors and other authorized representatives of the Company and its Subsidiaries to cooperate with Parent in its investigation of the Company and its Subsidiaries;
provided that Parent shall not be entitled to any data from the AIM Study prior to the time at which any member of the senior management of the Company is informed of such data. Any
investigation pursuant to this Section shall be conducted in such manner as not to interfere unreasonably with the conduct of the business of the Company and its Subsidiaries. No information or knowledge obtained by Parent in any investigation
pursuant to this Section shall affect or be deemed to modify any representation or warranty made by the Company hereunder. All information exchanged pursuant to Section 6.04 shall be provided pursuant to the terms of, and be subject to, the
Confidentiality Agreement.
Section 6.05. Voting of Shares of Parent Capital Stock. The Company shall cause the votes attaching to the ordinary shares of Parent
beneficially owned by it or any of its Subsidiaries to be cast in favor of approval of the Merger at the Parent Shareholder Meeting.
Section 6.06. Notices of Certain Events. The Company shall promptly notify Parent of:
(a) 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 contemplated by this Agreement;
(b) any material notice or other communication from any governmental or regulatory authority or agency in connection with the transactions
contemplated by this Agreement; and
(c) any actions, suits, claims, investigations or proceedings commenced or, to its Knowledge, threatened against, relating to or involving or
otherwise affecting the Company or any of its Subsidiaries that, if pending on the date of this Agreement, would have been required to have been disclosed pursuant to Section 4.13, 4.14, 4.17 or 4.18, as the case may be, or that relate to the
consummation of the transactions contemplated by the Transaction Agreements.
Parent agrees that:
Section 7.01. Shareholder Meeting. Parent
shall cause a general meeting of its shareholders (the Parent
Shareholder Meeting) to be duly called and held at substantially the same time as the Company Stockholder Meeting for the purpose of voting on the approval of the Merger in accordance with the applicable
requirements of the Listing Rules of the UK Listing Authority. Notwithstanding the foregoing, if Parent makes a Change in Parent Recommendation, Parents obligations pursuant to the first sentence of this Section 7.01 shall terminate. The Board
of Directors of Parent shall recommend approval of the Merger by Parents
shareholders and include such recommendation in the Parent Shareholder Circular
and shall not (a) fail to make, withdraw or modify in a manner adverse to the
Company such recommendation, (b) recommend that the shareholders of Parent reject
the Merger or (c) resolve, agree or publicly propose to take any such actions
(each such action being referred to as a Change in Parent
Recommendation). Notwithstanding anything in this Agreement to the
contrary, at any time prior to the Parent Shareholder Meeting, the Board of Directors
of Parent may if the Board of Directors of Parent determines in good faith, after
consultation with outside counsel to Parent, that it must do so to comply with
its fiduciary duties under applicable law, make a Change in Parent Recommendation.
In connection with such meeting, Parent shall (i) within a time frame consistent
with holding the Parent Shareholder Meeting at substantially the same time as
the Company Stockholder Meeting, prepare and then file with the UK Listing Authority
a draft copy of, shall use its reasonable best efforts to have approved by the
UK Listing Authority and shall thereafter mail to its shareholders, the Parent
Shareholder
Circular, (ii) use its reasonable best efforts to obtain the necessary approvals by its shareholders of this Agreement and the Merger and (iii) otherwise comply with all legal requirements applicable to such meeting.
Section 7.02. Obligations of Merger Subsidiary. Parent shall take all action necessary to cause Merger Subsidiary to perform its obligations
under this Agreement and to consummate the Merger on the terms and conditions set forth in this Agreement.
Section 7.03. Voting of Shares. Parent shall vote all Shares beneficially owned by it or any of its Subsidiaries in favor of adoption of this
Agreement at the Company Stockholder Meeting.
Section 7.04. Director and Officer Liability. Parent shall cause the Surviving Corporation, and the Surviving Corporation hereby agrees, to
do the following:
(a) The
Surviving Corporation shall, and Parent shall and shall cause the Surviving
Corporation to, indemnify and hold harmless the present and former officers
and directors of the Company (each an Indemnified Person) in respect of acts or omissions occurring at or prior to the Effective Time to the fullest extent
permitted by Delaware Law or any other applicable laws or provided under the Companys
certificate of incorporation and bylaws in effect on the date hereof; provided that such
indemnification shall be subject to any limitation imposed from time to time under applicable law.
(b) For
six years after the Effective Time, the Surviving Corporation shall maintain
in effect the current policies of directors and
officers liability insurance maintained by the Company (provided that Parent may substitute 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 in the aggregate) 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 7.04(b), the Surviving Corporation shall not be obligated to pay premiums in excess of 250% of the amount per annum the Company paid in its
last full fiscal year prior to the date of this Agreement, which amount the Company has disclosed to Parent prior to the date hereof; and provided further that if the annual premiums of such
insurance coverage exceed such amount, the Surviving Corporation shall be obligated to obtain a policy with the greatest coverage available, with respect to matters occurring prior to the Effective Time, for a cost not exceeding such amount.
(c) If Parent, the Surviving Corporation or any of their successors or assigns (i) consolidates with or merges into any other Person and shall
not be the continuing or surviving corporation or entity of such consolidation or merger, or (ii) transfers or conveys all or substantially all of its properties and assets to any Person, then, and in each such case, proper provision shall be made
so that the
successors and assigns of Parent or the Surviving Corporation, as the case may be, shall assume the obligations set forth in this Section 7.04.
(d) The rights of each Indemnified Person under this Section 7.04 shall be in addition to, and not in limitation of, any rights to
indemnification and exculpation of personal liability that such Person may have under the certificate of incorporation or bylaws of the Company or any of its Subsidiaries, or under Delaware Law or any other applicable laws or under any agreement of
any Indemnified Person with the Company or any of its Subsidiaries. These rights shall survive consummation of the Merger and are expressly intended to benefit, and shall be enforceable by, each Indemnified Person, his or her heirs and his or her
personal representatives.
Section 7.05. Employee Matters.
(a) During the period from the Effective Time through the first anniversary
thereof, Parent shall, and shall cause its Subsidiaries to, provide to each
individual employed by the Company or any of its Subsidiaries immediately
prior to the Effective Time (a Continuing Employee)
compensation and benefits that are no less favorable in the aggregate than those provided to such Continuing Employee by the Company and its Subsidiaries immediately prior to the Effective Time. Without limiting the generality of the foregoing,
Parent shall continue and maintain the Companys 2005 Management Bonus Plan on behalf of Continuing Employees in accordance with its terms and conditions in effect as of the date hereof and shall pay any amounts due thereunder in respect of the
2005 performance year in accordance with such terms, and for the 2006 performance year and subsequent performance years, Continuing Employees shall participate in the bonus plans of Parent as in effect from time to time. For the avoidance of doubt,
nothing in this Agreement shall constitute an express or implied promise of continued employment for any period or at all and will not interfere in any way with an employers
right to dismiss a Continuing Employee from employment at any time, with or without
cause.
(b) The
service of each Continuing Employee with the Company or its Subsidiaries
(or any predecessor employer) prior to the Effective Time shall be treated
as service with Parent and its Subsidiaries for all purposes under each
Employee Plan, International Plan or similar plan, program or arrangement
in which such Continuing Employee is eligible to participate after the Effective
Time (Continuing Employee Plans),
except as otherwise limited or prohibited by applicable law, statute, ordinance,
rule or regulation or the terms of such plan (provided that no such term shall apply to Continuing Employees differently than other similarly situated employees of Parent).
(c) Following the Effective Time, for purposes of each Continuing Employee Plan that provides employee welfare benefits, Parent shall, and
shall cause its Subsidiaries to, (i) waive any pre-existing condition, exclusion, actively-at-work requirement, waiting period or similar limitation and (ii) provide full
credit for any co-payments, deductibles or similar payments made or incurred by each Continuing Employee prior to the Effective Time.
(d) Parent shall, and shall cause its Subsidiaries to, honor each Company Employee Plan and Company International Plan in accordance with its
terms and all obligations thereunder that have accrued as of the Effective Time, including obligations with respect to vacation, severance agreements as set forth in Section 7.05(d) of the Company Disclosure Schedule, sick leave and paid time off.
For the avoidance of doubt, nothing in this Agreement is intended to prevent Parent from amending, suspending or terminating any such Company Employee Plan or Company International Plan in accordance with its terms, or causing a Subsidiary of Parent
to effect such an amendment, suspension or termination.
(e) Without limiting the generality of Section 7.05(a), Parent and the Company, as applicable, shall provide to the employees of the Company
and its Subsidiaries the retention, severance and other benefits set forth in Schedule 7.05(e) to this Agreement. Prior to the Effective Time, Parent and the Company shall cooperate in good faith (i) to prepare the plans, programs and other
documents necessary or appropriate to provide such benefits; provided that the Company shall not make any general communication regarding such plans, programs, documents or benefits to the
employees of the Company and its Subsidiaries without obtaining the prior approval of Parent (such approval not to be unreasonably withheld or delayed) and (ii) to prepare any reports or other filings with the SEC required to disclose any such
benefits within any applicable SEC deadlines.
Section 7.06. Conduct of Parent. Between
the date of this Agreement and the Effective Time, neither Parent nor any
of its Affiliates shall acquire, or agree to acquire, whether in the open
market or otherwise, any rights in any equity securities of the Company
other than pursuant to the Merger. During the period from the date of this
Agreement to the earlier of the Effective Time and the termination of this
Agreement in accordance with the terms hereof, except as consented to in
writing by the Company, none of Parent or any of its Subsidiaries shall
make any material acquisition that is reasonably likely to (a) materially
impair Parents ability to consummate the transactions contemplated
by the Transaction Agreements or (b) cause a material delay of the Merger.
The parties hereto agree that:
Section 8.01. Reasonable Best Efforts. (a) Subject to the terms and conditions of this Agreement, the Company and Parent shall use their
reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to
consummate the transactions contemplated by the Transaction Agreements, including (i) preparing and filing as promptly as practicable with any governmental authority or other third party all documentation to effect all necessary
filings, notices, petitions, statements, registrations, submissions of information, applications and other documents and (ii) obtaining and maintaining all approvals, consents, registrations, permits, authorizations and other confirmations required
to be obtained from any governmental authority or other third party that are necessary, proper or advisable to consummate the transactions contemplated by the Transaction Agreements. Parent and the Company shall, from the date hereof until the End
Date, use their reasonable best efforts to resist the entry of, or to have vacated or terminated, any judgment, injunction, order or decree that would restrain, prevent or delay the Effective Time.
(b) In furtherance and not in limitation of the foregoing, each of Parent and the Company shall make an appropriate filings of Notification and
Report Forms pursuant to the HSR Act with respect to the transactions contemplated by the Transaction Agreements as promptly as practicable and in any event within 15 Business Days of the date hereof and to supply as promptly as practicable any
additional information and documentary material that may be requested pursuant to the HSR Act and to take all other actions necessary to cause the expiration or termination of the applicable waiting periods under the HSR Act as soon as practicable.
Section 8.02. Certain Filings. The Company and Parent shall cooperate with one another (i) in connection with the preparation of the Company
Proxy Statement and the Parent Shareholder Circular, (ii) in determining whether any action by or in respect of, or filing with, any governmental authority is required in connection with the consummation of the transactions contemplated by the
Transaction Agreements and (iii) in taking such actions or making any such filings, furnishing information required in connection therewith or with the Company Proxy Statement or the Parent Shareholder Circular and seeking to obtain in a timely
manner any consents and approvals required in connection with the consummation of the transactions contemplated by the Transaction Agreements.
Section 8.03. Public Announcements. Parent and the Company shall consult with each other before issuing any press release or making any other
public statement, or scheduling any press conference or conference call with investors or analysts, with respect to this Agreement or the transactions contemplated hereby and, except as may be required by applicable law, order of a court of
competent jurisdiction or any listing agreement with or rule of any securities exchange or association, shall not issue any such press release or make any such other public statement or schedule any such press conference or conference call before
such consultation.
Section 8.04. Further Assurances. At and after the Effective Time, the officers and directors of the Surviving Corporation shall be
authorized to execute
and deliver, in the name and on behalf of the Company or Merger Subsidiary, any deeds, bills of sale, assignments or assurances and to take and do, in the name and on behalf of the Company or Merger Subsidiary, any other actions
and things to vest, perfect or confirm of record or otherwise in the Surviving Corporation any and all right, title and interest in, to and under any of the rights, properties or assets of the Company acquired or to be acquired by the Surviving
Corporation as a result of, or in connection with, the Merger.
Section 8.05. Employee Communications. Parent and the Company shall cooperate in good faith to permit, subject to applicable law, Parent to
send or make available written notices and other communication materials to the employees of the Company or any Subsidiary thereof; provided that Parent shall consult with the Company (and
consider in good faith the advice of the Company), and shall obtain the prior approval of the Company (such approval not to be unreasonably withheld or delayed).
Section 8.06. Amendments to Dynepo License Agreement. The Company and Parent will discuss in good faith until May 20, 2005 any modifications
to the Dynepo License Agreement reasonably requested in writing by either party; provided that in the event that such modifications are not mutually agreed by such date, the Dynepo License
Agreement as executed on the date of this Agreement will remain in effect on its original terms, subject to the conditions to its effectiveness set forth in Section 11.04(e) below.
Section 9.01. Conditions to Obligations of Each Party. The obligations of the Company, Parent and Merger Subsidiary to consummate the Merger
are subject to the satisfaction of the following conditions:
(a) the Company shall have obtained the Company Stockholder Approval;
(b) no provision of any applicable law or regulation and no judgment, injunction, order or decree of a governmental authority of competent
jurisdiction shall prohibit the consummation of the Merger;
(c) any applicable waiting period under the HSR Act relating to the Merger shall have expired or been terminated; and
(d) the Merger shall have been approved by the shareholders of Parent in accordance with the requirements of the Listing Rules of the UK
Listing Authority.
Section 9.02. Conditions to the Obligations of Parent and Merger Subsidiary. The obligations of Parent and Merger Subsidiary to consummate
the Merger are subject to the satisfaction or waiver (to the extent permitted by applicable law) of the following further conditions:
(a) (i) the Company shall have performed in all material respects all of its material obligations hereunder required to be performed by it at
or prior to the Effective Time, (ii) the representations and warranties of the Company contained in this Agreement (other than those set forth in clause (iii) below), disregarding all materiality and Company Material Adverse Effect qualifications
contained therein, shall be true and correct on and as of the Closing Date, other than representations and warranties that by their terms address matters only as of another specified time, which, disregarding all materiality and Company Material
Adverse Effect qualifications contained therein, shall be true and correct only as of such time, in each case, with only such exceptions as have not had, and are not reasonably likely to have, individually or in the aggregate, a Company Material
Adverse Effect, (iii) the representations and warranties of the Company set forth in Sections 4.01, 4.02, 4.05 and 4.23, disregarding all materiality and Company Material Adverse Effect qualifications contained therein, shall be true and correct in
all material respects on and as of the Closing Date, other than representations and warranties that by their terms address matters only as of another specified time, which, disregarding all materiality and Company Material Adverse Effect
qualifications contained therein, shall be true and correct in all material respects only as of such time, and (iv) Parent shall have received a certificate signed by an executive officer of the Company to the foregoing effect; and
(b) there
shall not be pending any action or proceeding by any government or governmental
authority or agency, domestic, foreign or supranational, before any court
or governmental authority or agency, domestic, foreign or supranational,
of a jurisdiction in which a material portion of the business or assets
of the Company and its Subsidiaries, taken as a whole, or Parent and its
Subsidiaries, taken as a whole, is located (i) challenging or seeking to
make illegal or to restrain or prohibit the consummation of the Merger or
(ii) seeking to restrain or prohibit Parents ownership or operation
(or that of its respective Subsidiaries) of all or any material portion
of the business or assets of the Company and its Subsidiaries, taken as
a whole, or of Parent and its Subsidiaries, taken as a whole, or to compel
Parent or any of its Subsidiaries or Affiliates to dispose of or hold separate
all or any material portion of the business or assets of the Company and
its Subsidiaries, taken as a whole, or of Parent and its Subsidiaries, taken
as a whole.
(c) the holders of not more than 15% of the Shares shall have demanded appraisal of their shares in accordance with Delaware Law.
Section 9.03. Conditions to the Obligations of the Company. The obligations of the Company to consummate the Merger are subject to the
satisfaction or waiver (to the extent permitted by applicable law) of the following
further conditions: (a) each of Parent and Merger Subsidiary shall have performed in all material respects all of its material obligations hereunder required to be performed by it at or prior to the Effective Time, (b) the
representations and warranties of Parent contained in this Agreement (other than those set forth in clause (c) below), disregarding all materiality and Parent Material Adverse Effect qualifications contained therein, shall be true and correct on and
as of the Closing Date, other than representations and warranties that by their terms address matters only as of another specified time, which, disregarding all materiality and Parent Material Adverse Effect qualifications contained therein, shall
be true and correct only as of such time, in each case, with only such exceptions as, individually or in the aggregate, have not had and are not reasonably likely to have a Parent Material Adverse Effect, (c) the representations and warranties of
Parent set forth in Sections 5.01 and 5.02, disregarding all materiality and Parent Material Adverse Effect qualifications contained therein, shall be true and correct in all material respects on and as of the Closing Date, other than
representations and warranties that by their terms address matters only as of another specified time, which, disregarding all materiality and Parent Material Adverse Effect qualifications contained therein, shall be true and correct in all material
respects only as of such time and (d) the Company shall have received a certificate signed by an executive officer of Parent to the foregoing effect.
Section 10.01. Termination. This Agreement may be terminated and the Merger may be abandoned at any time prior to the Effective Time
(notwithstanding receipt of the Company Stockholder Approval and/or any approval of this Agreement by the shareholders of Parent):
(a) by mutual written agreement of the Company and Parent;
(b) by either the Company or Parent, if:
(i) the
Merger has not been consummated on or before December 31, 2005 (the End Date); provided that the right to terminate this Agreement pursuant to this Section 10.01(b)(i) shall not be available to any party whose breach of any provision of this
Agreement results in the failure of the Merger to be consummated by such time;
(ii) (A) there shall be any law or regulation that makes consummation of the Merger illegal or otherwise prohibited or (B) any judgment,
injunction, order or decree of any court or governmental body having competent jurisdiction enjoining the Company, Parent or Merger Subsidiary from consummating the Merger is entered and such judgment, injunction, order or decree shall have become
final and nonappealable;
(iii) the Company Stockholder Approval shall not have been obtained at the Company Stockholder Meeting (or any adjournment thereof); or
(iv) the
Merger shall not have been approved in accordance with the requirements
of the Listing Rules of the UK Listing Authority by Parents shareholders
at the Parent Shareholder Meeting (or any adjournment thereof);
(c) by Parent, if the Board of Directors of the Company shall have made an Adverse Recommendation Change or shall have failed to call and hold
the Company Stockholder Meeting in accordance with Section 6.02;
(d) by the Company prior to the receipt of the Company Stockholder Approval; provided that (i) the Company notifies Parent, in writing at least 48 hours
falling within two Business Days prior to such termination, of its intention
to terminate this Agreement and to enter into a binding written agreement
concerning an Acquisition Proposal that constitutes a Superior Proposal
(a Competing Proposal), attaching the most current version
of such agreement (or a description of all material terms and conditions
thereof), and (ii) Parent does not make, within 48 hours falling within
two Business Days of receipt of such written notification, a binding written
offer (a New Offer) to amend the terms of this Agreement
to include terms that are at least as favorable to the stockholders of the
Company as such Competing Proposal, it being understood that the Company
shall not enter into any such binding agreement during such 48-hour period;
and provided further that the Company shall have paid any amounts due pursuant to Section
11.04 in accordance with its terms. If Parent shall have made a New Offer as contemplated by the foregoing clause (ii), then the Company may not terminate this Agreement pursuant to this Section 10.01(d) unless the Board of Directors of the Company
shall have determined in good faith, after consultation with a financial advisor of nationally recognized reputation and taking into account all the terms and conditions of such Competing Proposal, including any break-up fees, expense reimbursement
provisions, conditions to consummation and the likelihood and timing of consummation, that the terms of such Competing Proposal are more favorable than the terms of such New Offer;
(e) by Parent, if a breach of any representation or warranty or failure to perform any covenant or agreement on the part of the Company set
forth in this Agreement shall have occurred that would cause the condition set forth in Section 9.02(a) not to be satisfied, and as a result of such breach such condition is incapable of being satisfied by the End Date or the Company shall have
willfully and materially breached any of its obligations under Section 6.02 or Section 6.03;
(f) by the Company, if a breach of any representation or warranty or failure to perform any covenant or agreement on the part of the Parent or
Merger Subsidiary set forth in this Agreement shall have occurred that would cause the
condition set forth in Section 9.03 not to be satisfied, and as a result of such breach such condition is incapable of being satisfied by the End Date; or
(g) by the Company, if the Board of Directors of Parent shall have made a Change in Parent Recommendation or shall have failed to call and hold
the Parent Shareholder Meeting in accordance with Section 7.01.
The party desiring to terminate this Agreement pursuant to this Section 10.01 (other than pursuant to Section 10.01(a)) shall give notice of such termination to the other party.
Section 10.02. Effect of Termination. If this Agreement is terminated pursuant to Section 10.01, this Agreement shall become void and of no
effect without liability of any party (or any stockholder, director, officer, employee, agent, consultant or representative of such party) to the other party hereto; provided that, if such
termination shall result from the willful failure of either party to perform a covenant hereof, such party shall be fully liable for any and all liabilities and damages incurred or suffered by the other party as a result of such failure. The
provisions of this Section 10.02 and Sections 11.04, 11.06, 11.07 and 11.08 shall survive any termination hereof pursuant to Section 10.01 and, in addition, Section 8.01 (to the extent relating to the License Agreement) and Section 11.12 (to the
extent provided in Section 11.04) shall survive any Qualifying Termination.
Section 11.01. Notices. All notices, requests and other communications to any party hereunder shall be in writing (including facsimile
transmission) and shall be given,
if to Parent or Merger Subsidiary, to:
UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 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): April
21, 2005
Shire Pharmaceuticals Group plc
(Exact name of registrant as specified in its
charter)
England and Wales
(State or other jurisdiction of incorporation)
0-29630
98-0359573
(Commission File Number)
(IRS Employer Identification
No.)
Hampshire International Business Park, Chineham, Basingstoke,
Hampshire
RG24 8EP England
(Address of principal executive
offices) (Zip code)
Registrants telephone number, including area
code 44 1256 894 000
(Former name or former address, if changed
since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 8.01. Other Events
(c) Exhibits. The following exhibits are
filed herewith:
99.01
Press Release dated April 21, 2005
99.02
Agreement and Plan of Merger by and among Shire Pharmaceutical Group plc, Transkaryotic Therapies, Inc. and Sparta Acquisition Corporation, dated as of April 21, 2005
99.03
Exclusive License Agreement between Shire Pharmaceutical
Group plc and Transkaryotic Therapies, Inc.
99.04
Voting Agreement among Shire Pharmaceuticals Group
plc, Warburg, Pincus Equity Partners, L.P., Warburg, Pincus Netherlands Equity
Partners I, C.V., Warburg, Pincus Netherlands Equity Partners III, C.V. and Warburg
Pincus & Co.,
dated as of April 21, 2005
SHIRE PHARMACEUTICALS GROUP
PLC
By:
/s/ A C Russell
Name:
Angus Russell
Title:
Chief Financial Officer
EXHIBIT INDEX
Number
Description
99.01
Press Release dated April 21, 2005
99.02
Agreement and Plan of Merger by and among
Shire Pharmaceutical Group plc, Transkaryotic Therapies, Inc.
and Sparta Acquisition Corporation, dated as of April 21, 2005
99.03
Exclusive License Agreement between Shire
Pharmaceutical Group plc and Transkaryotic Therapies, Inc.
99.04
Voting Agreement among Shire Pharmaceuticals
Group plc, Warburg, Pincus Equity Partners, L.P., Warburg, Pincus
Netherlands Equity Partners I, C.V., Warburg, Pincus Netherlands
Equity Partners III, C.V. and Warburg Pincus & Co., dated
as of April 21, 2005
Hampshire International
Business Park
Chineham Basingstoke
Hampshire RG24 8EP
United Kingdom
Tel +44 (0)1256 894000
Fax +44 (0)1256 894708
www.shire.com
Press Release
Exhibit 99.01
FOR $1.6 BILLION
Strong strategic and business fit
o
Products sold by small, focused sales forces working with specialist physicians
o
Builds on Shires European and US specialty sales and marketing capabilities
o
Leverages Shires experience in renal and hematology
o
Relatively low risk development pipeline: enzyme-related
drugs have a high success rate in reaching the market
Adds two approved products, REPLAGAL and DYNEPO,
and two late- stage clinical development
products, Iduronate 2 sulfatase (I2S) and GA-GCB
Attractive market dynamics
o
Areas of high unmet medical need
o
Limited number of competitors
o
Enzyme replacement therapy (ERT) market - orphan drug status available
Expected to significantly enhance Shires medium
and long-term product sales and earnings per share (EPS) growth
o
Expected to be cash EPS and US GAAP EPS neutral
in the second full year of ownership post closing
TKTs capabilities and skill-sets expected to bring significant value to the combined organization
Shire Chief Executive Officer, Matthew Emmens, said:
Strong strategic and business fit
For further information please contact:
Shire:
Investor Relations
Cléa Rosenfeld (Rest of the World)
+
44 1256 894 160
Brian Piper (North America)
+
1 484 595 8252
Media
Jessica Mann (Rest of the World)
+
44 1256 894 280
Matthew Cabrey (North America)
+
1 484 595 8248
TKT:
Investor Relations
Justine Koenigsberg
+
1 617 349 0271
Media
Barbara Yates
+
1 781 258 6153
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995
Appendix
EBITDA
means earnings before interest, taxation, depreciation
and amortization;
Goldman Sachs
means Goldman Sachs International;
Shire
means Shire Pharmaceuticals Group plc, a public limited
company incorporated under the laws of England and Wales;
SG Cowen
means SG Cowen & Co. LLC;
TKT
means Transkaryotic Therapies, Inc.
UK GAAP
means generally accepted accounting principles in the
United Kingdom;
US GAAP
means generally accepted accounting principles in the
United States;
TABLE OF CONTENTS
PAGE
ARTICLE 1
DEFINITIONS
Section 1.01.
Definitions
1
Section 1.02.
Other Definitional And Interpretative Provisions
7
ARTICLE 2
THE MERGER
Section 2.01.
The Merger
8
Section 2.02.
Conversion of Shares
9
Section 2.03.
Surrender and Payment
9
Section 2.04.
Dissenting Shares
10
Section 2.05.
Company Stock Options
11
Section 2.06.
Adjustments
12
Section 2.07.
Withholding Rights
12
Section 2.08.
Lost Certificates
12
ARTICLE 3
THE SURVIVING CORPORATION
Section 3.01.
Certificate
of Incorporation
13
Section 3.02.
Bylaws
13
Section 3.03.
Directors and Officers
13
ARTICLE 4
REPRESENTATIONS
AND WARRANTIES
OF THE COMPANY
Section 4.01.
Corporate Existence and Power
13
Section 4.02.
Corporate Authorization
14
Section 4.03.
Governmental Authorization
14
Section 4.04.
Non-contravention
15
Section 4.05.
Capitalization
15
Section 4.06.
Subsidiaries
16
Section 4.07.
SEC Filings; Sarbanes-Oxley Act
17
Section 4.08.
Financial Statements
18
Section 4.09.
Financial Controls
18
Section 4.10.
Disclosure Documents
18
Section 4.11.
Absence of Certain Changes
19
Section 4.12.
No Undisclosed Material Liabilities
20
i
PAGE
Section 4.13.
Compliance with Laws and Court Orders
21
Section 4.14.
Litigation
21
Section 4.15.
Finders Fees
21
Section 4.16.
Taxes
21
Section 4.17.
Personnel Matters
23
Section 4.18.
Environmental Matters
24
Section 4.19.
Intellectual Property
25
Section 4.20.
Regulatory Matters
27
Section 4.21.
Material Contracts
29
Section 4.22.
Opinion of Financial Advisors
30
Section 4.23.
Antitakeover Statutes and Rights Agreement
30
Section 4.24.
Hunter Data
30
Section 4.25.
Dynepo License
30
ARTICLE 5
REPRESENTATIONS
AND WARRANTIES
OF PARENT
Section 5.01.
Corporate Existence and Power
31
Section 5.02.
Corporate Authorization
31
Section 5.03.
Governmental Authorization
32
Section 5.04.
Non-contravention
32
Section 5.05.
Disclosure Documents
33
Section 5.06.
Finders Fees
33
Section 5.07.
Financing
33
Section 5.08.
Interested Stockholder
33
ARTICLE 6
COVENANTS
OF THE COMPANY
Section 6.01.
Conduct of the Company
34
Section 6.02.
Stockholder Meeting; Proxy Material
36
Section 6.03.
No Solicitation; Other Offers
36
Section 6.04.
Access to Information
38
Section 6.05.
Voting of Shares of Parent Capital Stock
38
Section 6.06.
Notices of Certain Events
39
ARTICLE 7
COVENANTS
OF PARENT
Section 7.01.
Shareholder Meeting
39
Section 7.02.
Obligations of Merger Subsidiary
40
Section 7.03.
Voting of Shares
40
Section 7.04.
Director and Officer Liability
40
Section 7.05.
Employee Matters
41
Section 7.06.
Conduct of Parent
42
ii
PAGE
ARTICLE 8
COVENANTS
OF PARENT
AND THE COMPANY
Section 8.01.
Reasonable Best Efforts
42
Section 8.02.
Certain Filings
43
Section 8.03.
Public Announcements
43
Section 8.04.
Further Assurances
43
Section 8.05.
Employee Communications
44
Section 8.06.
Amendments to Dynepo License Agreement
44
ARTICLE 9
CONDITIONS
TO THE MERGER
Section 9.01.
Conditions to Obligations of Each Party
44
Section 9.02.
Conditions to the Obligations of Parent and Merger Subsidiary
45
Section 9.03.
Conditions to the Obligations of the Company
45
ARTICLE 10
TERMINATION
Section 10.01.
Termination
46
Section 10.02.
Effect of Termination
48
ARTICLE 11
MISCELLANEOUS
Section 11.01.
Notices
48
Section 11.02.
Survival of Representations and Warranties
49
Section 11.03.
Amendments and Waivers
50
Section 11.04.
Expenses
50
Section 11.05.
Binding Effect; Benefit; No Third Party Beneficiaries; Assignment
Section 11.06.
Governing Law
52
Section 11.07.
Jurisdiction
52
Section 11.08.
WAIVER OF JURY TRIAL
52
Section 11.09.
Counterparts; Effectiveness
52
Section 11.10.
Entire Agreement
53
Section 11.11.
Severability
53
Section 11.12.
Specific Performance
53
iii
DEFINITIONS
Term
Section
Adverse Recommendation Change
6.02
Agreement
Preamble
Certificates
2.03
Change in Parent Recommendation
7.01
Closing Date
2.01
Company
Preamble
Company Payment Event
11.04
Company Proxy Statement
4.10
Company SEC Documents
4.07
Company Securities
4.05
Company Stock Option
2.05
Company Stock Plan
2.05
Company Stockholder Approval
4.02
Company Stockholder Meeting
6.02
Company Subsidiary Securities
4.06
Competing Proposal
10.01
Confidentiality Agreement
6.03
Continuing Employee
7.05
Continuing Employee Plans
7.05
Current SEC Documents
4.12
Dynepo
Recitals
Dynepo License Agreement
Recitals
Effective Time
2.01
End Date
10.01
Exchange Agent
2.03
Exchange Ratio
2.05
FDA
4.20
GAAP
4.08
Term
Section
Hunter Data
4.24
I2S
4.24
Indemnified Person
7.04
Key Product
4.21
License Agreement
4.19
Material Contract
4.21
Merger
2.01
Merger Consideration
2.02
Merger Subsidiary
Preamble
New Offer
10.01
Parent
Preamble
Parent Payment Event
11.04
Parent Share
2.05
Parent Shareholder Circular
5.05
Parent Shareholder Meeting
7.01
Preferred Stock
4.05
Product Contract
4.21
Specified Stock Option
6.01
Substituted Stock Option
2.05
Substitution Premium
2.05
Superior Proposal
6.03
Surviving Corporation
2.01
Tax
4.16
Tax Return
4.16
Taxing Authority
4.16
Transaction Agreements
Recitals
Voting Agreement
Recitals
Warn Act
4.17
THE MERGER
ARTICLE 3
THE SURVIVING CORPORATION
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
REPRESENTATIONS
AND WARRANTIES OF PARENT
COVENANTS
OF THE COMPANY
COVENANTS
OF PARENT
COVENANTS
OF PARENT AND THE COMPANY
CONDITIONS
TO THE MERGER
TERMINATION
MISCELLANEOUS
Shire Pharmaceuticals Group plc
Hampshire International Business Park
Chineham Basingstoke
Hampshire RG24 8EP
United Kingdom
Attention: Tatjana May, General Counsel
Facsimile No.: +44 (0) 12 5689 4710
with a copy to:
if
to the Company, to:.
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Attention: John J. McCarthy, Jr.
Leonard Kreynin
Facsimile No.: (212) 450-3800
with a copy to:
Transkaryotic Therapies, Inc
700 Main Street
Cambridge, MA 02139
Attention: Tamara Jones
Facsimile No.: (617) 613-4402
Wilmer Cutler Pickering Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
Attention: David E. Redlick
Facsimile No.: (617) 526-5000
or to such other address or facsimile number as such party may hereafter specify for the purpose by notice to the other parties hereto. All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. on a Business Day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed to have been received on the next succeeding Business Day in the place of receipt.
Section 11.02. Survival of Representations and Warranties. The representations, warranties, covenants and other agreements contained herein and in any certificate or other writing delivered pursuant hereto, including any rights arising out of any breach of such representations, warranties, covenants and other agreements, shall not survive the Effective Time. This Section 11.02 shall not, however, limit any covenant or agreement set forth in Section 7.04 of this
Agreement, which by its terms contemplates performance after the Effective Time.
Section 11.03. Amendments and Waivers. (a) Any provision of this Agreement may be amended or waived prior to the Effective Time 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 each party against whom the waiver is to be effective; provided that, after the adoption of this Agreement by the stockholders of the Company and without their further approval, no such amendment or waiver shall reduce the amount or change the kind of consideration to be received in exchange for the Shares.
(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 11.04. Expenses. (a) Except as otherwise provided herein, all costs and expenses incurred in connection with this Agreement shall be paid by the party incurring such cost or expense.
(b) If a Company Payment Event occurs, the Company shall pay Parent (by wire transfer of immediately available funds), if pursuant to (x) below, simultaneously with the occurrence of such Company Payment Event or, if pursuant to (y) below, within two Business Days following such Company Payment Event, a fee of $52,000,000; provided that if the Company Payment Event occurred solely as a result of a transfer, sale, lease, license or other transaction involving a material portion of the assets licensed under the Dynepo License Agreement being deemed an Acquisition Proposal pursuant to clause (z) of the definition of Company Payment Event, then the fee shall be reduced to $16,000,000.
A Company Payment Event shall be deemed to have occurred if (x) this Agreement shall have been terminated pursuant to Section 10.01(c) or Section 10.01(d), (y) within 12 months of the termination of this Agreement pursuant to Section 10.01(b)(i), the Company shall have entered into a definitive written agreement with respect to, recommended to its stockholders or consummated, an Acquisition Proposal if prior to such termination there shall have been made an Acquisition Proposal (provided that solely for purposes of this clause (y), the term Acquisition Proposal shall have the meaning set forth in Section 1.01(a), except that all references to 20% shall be deemed references to 45%) or (z) within 12 months of the termination of this Agreement pursuant to Section 10.01(b)(iii), the Company shall have entered into a definitive written agreement with respect to, recommended to its stockholders or consummated, an Acquisition Proposal if prior to the Company Stockholder Meeting there shall have been made an Acquisition Proposal (provided that solely for purposes of this
clause (z), the term Acquisition Proposal shall have the meaning set forth in Section 1.01(a), except that all references to 20% shall be deemed references to 33 1/3%, and it is understood that, for the purposes of this clause (z), any transfer, sale, lease, license or other transaction involving a material portion of the assets licensed under the Dynepo License Agreement shall be deemed an Acquisition Proposal).
(c) If a Parent Payment Event occurs, Parent shall pay the Company (by wire transfer of immediately available funds) within two Business Days following such Parent Payment Event, a fee of $40,000,000. A Parent Payment Event shall be deemed to have occurred if this Agreement shall have been terminated by either Parent or the Company pursuant to Section 10.01(b)(iv) or by the Company pursuant to Section 10.01(g) .
(d) If a Company Payment Event occurs, the Company shall reimburse Parent and its Affiliates (by wire transfer of immediately available funds), no later than two Business Days after such termination, for 100% of their documented out-of-pocket fees and expenses (including reasonable fees and expenses of their counsel) up to $4,000,000 actually incurred by any of them in connection with this Agreement and the transactions contemplated hereby, including the arrangement of, obtaining the commitment to provide or obtaining any financing for such transactions.
(e) If this Agreement is terminated pursuant to Section 10.01 in a Qualifying Termination, the Dynepo License Agreement shall become effective immediately thereafter and the payment described in Section 6.1 of the Dynepo License Agreement shall be immediately due and shall be payable (by wire transfer of immediately available funds) no later than two Business Days after such Qualifying Termination. For the avoidance of doubt, any disputes as to the effectiveness of the Dynepo License Agreement or the payment described in Section 6.1 of the Dynepo License Agreement shall be governed by Sections 11.07, 11.08 and 11.12 of this Agreement.
(f) Each party acknowledges that the agreements contained in this Section 11.04 are an integral part of the transactions contemplated by this Agreement and that, without these agreements, it would not enter into this Agreement. Accordingly, if any party fails promptly to pay any amount due to the other party pursuant to this Section 11.04, it shall also pay any costs and expenses incurred by such other party in connection with a legal action to enforce this Agreement that results in a judgment against such Party for such amount.
Section 11.05. Binding Effect; Benefit; No Third Party Beneficiaries; Assignment. (a) The provisions of this Agreement shall be binding upon and, except as provided in Section 7.04, shall inure to the benefit of the parties hereto and their respective successors and assigns. Except as provided in Section 7.04, no provision of this Agreement is intended to confer any rights, benefits,
remedies, obligations or liabilities hereunder upon any Person other than the parties hereto and their respective successors and assigns.
(b) No party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the consent of each other party hereto, except that Merger Subsidiary may transfer or assign, in whole or from time to time in part, to another wholly owned Subsidiary of Parent the right to enter into the transactions contemplated by this Agreement, but any such transfer or assignment shall not relieve Parent or Merger Subsidiary of its obligations hereunder. Any purported assignment without such consent shall be void.
Section 11.06. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to the conflicts of law rules of such state.
Section 11.07. Jurisdiction. The parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in any federal court located in the State of Delaware or any Court of Chancery in New Castle County in the State of Delaware, and each of the parties hereby irrevocably submits to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party as provided in Section 11.01 shall be deemed effective service of process on such party.
Section 11.08. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 11.09. Counterparts; Effectiveness. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by all of the other parties hereto. Until and unless each party has received a counterpart hereof signed by the other party hereto, this Agreement shall have no effect and no party shall have any right or obligation hereunder (whether by virtue of any other oral or written agreement or other communication).
Section 11.10. Entire Agreement. This Agreement, the Confidentiality Agreement and the License Agreement constitute the entire agreement between the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter hereof and thereof.
Section 11.11. Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated 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 a determination, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.
Section 11.12. Specific Performance. The parties hereto agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement or to enforce specifically the performance of the terms and provisions hereof in any federal court located in the State of Delaware or the Court of Chancery in New Castle County in the State of Delaware, in addition to any other remedy to which they are entitled at law or in equity.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.
TRANSKARYOTIC THERAPIES, INC. |
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By: | /s/ David Pendergast | |||
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Name: | David Pendergast | |||
Title: | President and CEO | |||
SHIRE PHARMACEUTICALS GROUP PLC |
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By: | /s/ Matthew Emmens | |||
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Name: | Matthew Emmens | |||
Title: | Chief Executive Officer | |||
SPARTA ACQUISITION CORPORATION | ||||
By: | /s/ Matthew Emmens | |||
Name: | Matthew Emmens | |||
Title: | Chief Executive Officer |
EXHIBIT 99.03
EXCLUSIVE LICENSE AGREEMENT
THIS EXCLUSIVE LICENSE AGREEMENT (this Agreement), effective as of the Effective Date (as defined below) is between Transkaryotic Therapies, Inc., a corporation organized under the laws of the State of Delaware with its principal offices at 700 Main Street, Cambridge, Massachusetts 02139 (TKT), and Shire Pharmaceutical Group plc, a public limited company incorporated under the laws of England and Wales (Shire). TKT and Shire may be referred to herein individually as a "Party" or collectively as the "Parties".
WHEREAS, TKT and Aventis (as defined below) have entered into the Aventis Agreement (as defined below) related to GA-EPO (as defined below); and
WHEREAS, pursuant to the Aventis Agreement, TKT enjoys certain rights and interests in and to GA-EPO (as defined below) in the Territory (as defined below), including the rights to a Registration Approval (as defined below) for GA-EPO in the European Union; and
WHEREAS, Shire is engaged in the business of manufacturing, marketing and selling pharmaceutical products; and
WHEREAS, certain additional manufacturing work, and related regulatory filings and approvals, are required prior to the commercialization of GA-EPO in the European Union; and
WHEREAS, Shire has knowledge, experience and expertise in obtaining and maintaining registration approvals and price and reimbursement approvals in the Territory, making therapeutic drugs for use in the Territory, and commercializing therapeutic drugs in the Territory; and
WHEREAS, TKT desires to appoint Shire to commercialize GA-EPO in the Territory, and Shire desires to accept such appointment, subject to the terms and conditions hereof;
WHEREAS, TKT and Shire are concurrently entering into an Agreement and Plan of Merger dated April 21, 2005 among Transkaryotic Therapies, Inc., Shire Group PLC and Shire Acquisition Corporation;
WHEREAS, this Agreement will not become effective and neither party shall have any obligations hereunder until and unless this Agreement becomes effective as set forth under Section 11.04 (e) of the Merger Agreement; and
WHEREAS, this Agreement shall terminate and have no force or effect upon the earlier of (i) the Effective Time (as defined in Section 2.01 of the Merger Agreement) and (ii) termination of the Merger Agreement (except pursuant to Section 11.04(e) of the Merger Agreement);
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NOW, THEREFORE, in consideration of the foregoing and the mutual terms, conditions and agreements set forth herein, and other good and valuable consideration, the sufficiency of which is hereby acknowledged, and intending to be mutually bound hereby, TKT and Shire hereby agree as follows:
As used in this Agreement, the singular includes the plural and the plural includes the singular, wherever so required by fact or context. Titles used in the Sections hereof are only for convenience and will not be regarded as part of this Agreement. Schedule means any schedule to this Agreement, each of them being made a part hereof. As used in this Agreement, and unless otherwise provided, the following terms have the meanings specified below. Certain other capitalized terms are defined elsewhere in this Agreement.
1974 Convention has the meaning set forth in Section 13.3 hereof.
Additional Indication means any indication other than the Initial Indication.
Adverse Drug Experience means any adverse experience as defined or contemplated by 21 C.F.R. 312.32 or 314.80 or which may be considered adverse events as defined by the EMEA or other applicable Regulatory Authorities.
Affiliate(s) means with respect to a Party, any corporation, firm, partnership or other entity, which directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with a Party to this Agreement; provided, however, that for purposes of this Agreement, Warburg, Pincus Equity Partners, L.P., Warburg, Pincus & Co., Warburg Pincus LLC, their various sister entities, and the companies under their control (other than TKT and entities controlled by TKT) will not be considered Affiliates of TKT. An entity will be deemed to control another entity if it (a) owns, directly or indirectly, at least fifty percent (50%) of the outstanding voting securities or capital stock (or such lesser percentage which is the maximum allowed to be owned by a foreign corporation in a particular jurisdiction) of such other entity, or has other comparable ownership interest with respect to any entity other than a corporation; or (b) has the power, whether pursuant to contract, ownership of securities or otherwise, to direct the management and policies of such entity.
Agreement has the meaning set forth in the preamble.
Auditor has the meaning set forth in Section 6.7(a) hereof.
Aventis means Aventis Pharmaceuticals Inc., a subsidiary of Sanofi-Aventis. The Parties understand and agree that, if the context so permits, the term Aventis may also encompass such other licensee of TKT with respect to exclusive rights to GA-EPO outside the Territory to the extent that, after the Effective Date of this Agreement, Aventis or TKT terminates Aventiss exclusive rights to GA-EPO outside the Territory and TKT licenses such rights to such other licensee (and provided that any such substitution will not adversely impact any of Shires rights or obligations under this Agreement).
Aventis Agreement means the Amended and Restated License Agreement dated March 26,
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Aventis Determination Date has the meaning set forth in Section 2.6(a) hereof.
Aventis Negative Determination has the meaning set forth in Section 2.6(a) hereof.
Aventis Oncology Data means the data generated by Aventis in conducting clinical trials of GA-EPO for oncology-related Additional Indications.
Aventis Positive Notification has the meaning set forth in Section 2.6(a) hereof.
Aventis Technology means all inventions, trade secrets, trademarks (all such trademarks, including without limitation the trademark Dynepo, in the Territory are set forth together with their registration information on Exhibit F hereto to the extent that such information is in the possession of TKT as of the Effective Date; provided that TKT will update Exhibit F from time to time to the extent it becomes aware of new information after the Effective Date), copyrights, knowhow, data, regulatory submissions and other intellectual property of any kind (including the patents and patent applications set forth on Exhibit C, and any proprietary biological materials, compounds or reagents in the Territory), which are owned or controlled by, or licensed (with the right to sublicense) to, Aventis as of March 26, 2004, relating to or necessary or useful for the manufacture, use, distribution, or sale of GA-EPO, including but not limited to any patents or patent applications licensed from Third Parties; provided, however, that the Marburg Technology will not be considered Aventis Technology. All Aventis Technology that has been licensed to Aventis by a Third Party is set forth on Exhibit D hereto, along with any costs, expenses, fees or royalties payable thereunder. For purposes of clarification, Aventis Technology will not include intellectual property developed by Third Parties related to testing procedures or methodologies utilized in the development and manufacture of GA-EPO, including but not limited to those procedures or methodologies developed by contractors or consultants of Aventis. Aventis Technology will include the Aventis Oncology Data upon delivery of the Aventis Oncology Data from Aventis to TKT.
cGMP means the regulatory requirements for current good manufacturing practices promulgated from time to time by (as applicable) the European Commission, the EMEA or other applicable Regulatory Authorities.
Chemical Comparability means that the Drug Substance manufactured in Lonzas 2000L facility in Slough, United Kingdom (Slough Drug Substance) is chemically, physically and biologically comparable to drug substance of GA-EPO used as a reference standard from the 2000L scale Drug Substance manufactured in Lonzas facility in Portsmouth, New Hampshire, United States, or if insufficient drug substance of GA-EPO used as a reference standard is available, suitably acceptable 2000L scale Drug Substance which is described in the MAA as of the Effective Date (Portsmouth Drug Substance). For purposes of this Agreement, Slough Drug Substance shall be considered to have Chemical Comparability to the Portsmouth Drug Substance if it meets the criteria for comparability set forth in Exhibit E hereto or such other criteria upon which the Parties mutually agree should be included in Exhibit E, or, in the event that the Slough Drug Substance does not meet the criteria for chemical comparability set forth in Exhibit E hereto, the Slough Drug Substance will nonetheless be deemed to meet the criteria for chemical comparability if the Parties so agree. CMC has the meaning set forth in Section 2.6(c) hereof.
CMC Meeting has the meaning set forth in Section 2.6(c) hereof.
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Commercially Reasonable Efforts means those efforts and resources of TKT comparable to those used generally within the pharmaceutical industry for any compound or product with similar market, commercialization or profitability potential in such country at a similar stage in its product life cycle, based on conditions prevailing at the time such efforts are undertaken.
Coordinating Committee has the meaning set forth in Section 2.4(a) hereof.
CRM Meeting has the meaning set forth in Section 2.5(b) hereof.
Determination Notice has the meaning set forth in Section 2.5(a) hereof.
Drug Substance means biologically active GA-EPO conforming to the Specifications or Specifications as defined in the Lonza Agreement, as the context requires, in a form appropriate for formulation and dispensing into dosage units.
Effective Date means the date upon which this Agreement becomes effective in accordance with Section 11.04(e) of the Merger Agreement.
EMEA means the European Medicines Agency or any successor agency with responsibilities comparable to the European Medicines Agency.
EPO means GA-EPO and Second Generation Products.
Final U.S. Determination has the meaning set forth in Section 5.2 hereof.
Finished Product means the Drug Substance after it has undergone filtration (including sterilizing filtration), filling and finishing activities in accordance with cGMP, and in a condition suitable for human use, whether the presentation is in vial or syringe form, or such other presentation as may be agreed by the Parties.
First Commercial Sale of GA-EPO means, on a country-by-country basis, the first sale by Shire or its Affiliates, sublicensees or distributors for use or consumption by the general public of GA-EPO, in any country in the Territory, after Registration Approval has been granted by the Regulatory Authority of such country. First Commercial Sale will not include sales of GA-EPO to an Affiliate, sublicensee or distributor unless the Affiliate, sublicensee or distributor is the end user of such GA-EPO, or the distribution of GA-EPO samples during the promotion thereof.
GA-EPO means the gene-activated pharmaceutical composition of erythropoietin, in any dosage form, formulation or combination, for the Initial Indication or any Additional Indication, as described more fully in Exhibit A hereto, and will not include any Second Generation Product.
Initial Indication means the treatment of anaemia in patients with chronic renal failure.
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Inventions has the meaning set forth in Section 9.1(a) hereof.
Liabilities means any and all debts, duties, liabilities and obligations of any nature whatsoever, whether accrued or fixed, absolute or contingent, mature or unmatured or determined or determinable, including, without limitation, those arising under any law, contract, agreement, commitment, instrument, permit, license, franchise or undertaking and those arising as a result of any act or omission, regardless of whether such debt, duty, liability or obligation would be required to be disclosed on a balance sheet prepared in accordance with generally accepted accounting principles and regardless of whether such debt, duty, liability or obligation is immediately due and payable.
Lonza means Lonza Biologics plc.Lonza Agreement means the Services Agreement dated July 23, 2004 between TKT and Lonza.
Lonza Technology means the Cell Line, Process, and Product as defined in the Lonza Agreement, including but not limited to the complete manufacturing and production specifications for GA-EPO.
Losses has the meaning set forth in Section 10.1 hereof.
MAA means the Marketing Authorization for GA-EPO that has been filed through the centralized procedure for the European Union and approved by the European Commission.
Merger Agreement means the Agreement and Plan of Merger dated April [ ], 2005 among TKT, Shire and Shire Acquisition Corp.
Manufacturing Know-How means all know-how, trade secrets, inventions, discoveries, improvements, methods, processes, data and other technology, whether or not patentable or copyrightable, and any patent applications, patents or copyrights based thereon during the Term of this Agreement relating to or necessary or useful for the manufacture, production and packaging of GA-EPO, including but not limited to testing procedures and methodologies used in the manufacture and development of GA-EPO covered by the TKT Patent Rights or which uses the TKT Technology or Aventis Technology.
Marburg Technology means all inventions, trade secrets, know-how, data and other intellectual property of any kind which is owned, controlled by or licensed to Aventis (with the right to sublicense) as of March 26, 2004 relating to the use of perfusion technology to process a serum free adapted version of a GA-EPO producing cell line; provided, however, that the Marburg Technology will not be considered Manufacturing Know-How owned by Aventis.
Material Activities means (a) the successful transfer of the MAA to Shire from Aventis or TKT, as the case may be, (b) the transfer of Aventis Oncology Data to Shire and (c) the establishment of Chemical Comparability.
Net Sales shall have the meaning set forth in the Aventis Agreement, but with respect to sales by Shire and Shires Affiliates and sublicensees rather than with respect to TKT and its Affiliates and
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Party and Parties has the meaning set forth in the preamble.
Phase IV Clinical Study means a human clinical study initiated in a country in the Territory for an approved indication after receipt of Registration Approval for such indication in such country.
Price means the price, where required, set by any Pricing and Reimbursement Authority from time to time at which GA-EPO may be sold in the relevant country.
Price and Reimbursement Approvals means the approvals of the price and the reimbursement category (where relevant) for GA-EPO as established from time to time by the relevant Pricing and Reimbursement Authority in the applicable country in the Territory. Price and Reimbursement Approvals will not include Registration Approval.
Pricing and Reimbursement Authority means the applicable authority of any country in the Territory with responsibility for setting the Price and/or Reimbursement for GA-EPO in such country.
Qualified Person means the person referred to in article 48 of Directive 2001/83/EC or in Article 13(2) of Directive 2001/20/EC.
Registration Approval means the approval of GA-EPO issued by the European Commission or any other Regulatory Authority in the Territory that is required for the commercial sale of GA-EPO in the applicable country in the Territory, including any required approvals by Regulatory Authorities of facilities to manufacture GA-EPO. Registration Approval will not include Price and Reimbursement Approval.
Regulatory Authority means the applicable regulatory authority of any country or countries in the Territory with responsibility for approving or registering GA-EPO for sale in such country.
Reimbursement means the reimbursement category established for GA-EPO from time to time by any Pricing and Reimbursement Authority in the applicable country in the Territory.
Royalty Report has the meaning set forth in Section 6.2 (c) hereof.
Sanofi-Aventis means the entity formed through the merger of Sanofi SA and Aventis SA.
Second Generation Product means any erythropoietin product or service that is: (a) any derivative, modification, mutant, fragment or peptide analog of erythropoietin or (b) any other therapy involving the administration of erythropoietin such as gene or cell therapy processes or cell therapy products, carrier systems, fusion proteins, polymers and peptides. For purposes of clarity, the definition of Second Generation Product does not include any small molecule. For the purpose of clarity, the definition of Second Generation Product includes versions of GA-EPO that are long acting.
Senior Executives will have the meaning set forth in Section 13.9(a) hereof.
Serious Adverse Drug Experience means any Adverse Drug Experience that is fatal or
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life threatening, is permanently disabling, requires in-patient hospitalization, or is a congenital anomaly, cancer or overdose, or any other event which would constitute a serious adverse drug experience pursuant to the terms of 21 C.F.R 312.32 or 314.80 or may be considered medically serious events as defined by the EMEA or other applicable Regulatory Authorities.
Shire has the meaning set forth in the preamble.
Specification s means the specifications, manufacturing processes and procedures and analytical assays and test methods for Drug Substance or Finished Product, as the case may be, approved by the European Commission, the EMEA or other applicable Regulatory Authority from time to time. It is understood and agreed that with respect to any Drug Substance sold to Shire by TKT, Specifications will mean specifications as defined in the Lonza Agreement.
Supplementary Protection Certificate means the supplementary protection certificate for medicinal products and their equivalents provided under Control Regulation (EEC) No. 1768/92 of June 18, 1992.
Term means the period beginning at the Effective Date and ending when this Agreement expires in accordance with Article 12 hereof.
Territory means all of the countries of the world, excluding the United States of America (and its territories and possession, including without limitation, Puerto Rico); provided however, that Canada will not be included in the Territory until such time that TKT has obtained the consent of Aventis for such inclusion .
Third Party means any person other than a Party to this Agreement or its Affiliates.
TKT has the meaning set forth in the preamble.TKT Excluded Field means products or services that: (i) have the biological function in humans of erythropoetin, (ii) have the same biological target as erythropoetin, and/or (iii) are directed to stimulating in a mammal the production of platelets and/or red blood cells.
TKT Intellectual Property means the TKT Patent Rights, the TKT Technology and the Trademarks.
TKT Patent Rights means all present and future patents, patent applications, patent extensions, certificates of invention, or applications for certificates of invention, together with any divisions, continuations or continuations-in-part thereof, which are owned or controlled by TKT relating to or necessary or useful for the development, manufacture, use, distribution, sale or other commercialization of EPO; provided, however, that TKT Patent Rights will not include Aventis Technology.
TKT Technology means all present and future inventions, trade secrets, copyrights, know-how, data, regulatory submissions and other intellectual property of any kind (including any proprietary biological materials, compounds or reagents but not including TKT Patent Rights) which are owned or controlled by, or licensed (with the right to sublicense) to, TKT relating to or
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necessary or useful for the manufacture, use, distribution, sale or other commercialization of EPO, including but not limited to any patents or patent applications licensed from Third Parties; provided, however, that TKT Technology will not include Aventis Technology.
TKTs Knowledge means the actual knowledge, without undertaking any additional investigation for purposes of entering into this Agreement, of the following employees of TKT: (a) David Pendergast, Chief Executive Officer, (b) Gregory Perry, Chief Financial Officer, (c) John Conley, Vice President of Business Development and Dynepo Program Executive, (d) Tamara Joseph, Vice President, Legal, and General Counsel, (e) Kerry Flynn, Vice President, Intellectual Property and Chief Intellectual Property Counsel and (f) Philip Chase, Chief Corporate Counsel.
Trademarks means the trademarks, service marks, trade names, trade dress and logos used on or in connection with the identification or marketing of GA-EPO owned or controlled by or licensed (with the right to sublicense) to TKT, as listed in Exhibit B hereto (as the same may be amended and supplemented from time to time); provided, however, that Trademarks will not include Aventis Technology.
Trademark Infringement has the meaning set forth in Section 8.1(d) hereof.
U.S. Amgen Patent Litigation will have the meaning set forth in Section 5.2 hereof.
Vetter Agreement means an agreement to be entered into after the date of this Agreement between Vetter Pharma-Fertigung GmbH & Co. KG, and TKT with regard to the manufacture of GA-EPO.
2. DEVELOPMENT, APPROVAL AND REIMBURSEMENT OF PRODUCT
2.1. TKTs Responsibilities.
(a) At TKTs cost, TKT will undertake all activities necessary to transfer to Shire all documentation, information, regulatory, price and reimbursement applications and approvals, and know-how, including without limitation any Registration Approvals, related to EPO necessary for Shire to exercise its rights under this Agreement, in each case, as promptly as practicable after the Effective Date. In furtherance of the foregoing, TKT will, at TKTs expense:
(i) notify Aventis, within five (5) days of the Effective Date, that Aventis will be required, upon Shires request, to effectuate the transfer of all right, title, interest, possession and control of any application for regulatory authorization and regulatory authorization for GA-EPO in the Territory, including without limitation the MAA, and use Commercially Reasonable Efforts to cause Aventis to, within thirty (30) days of Shires request, prepare and submit an MAA license transfer application to the EMEA requesting transfer of the MAA from Aventis to Shire, or at Shires request, to TKT; provided, however, that in the event the MAA is transferred from Aventis to TKT, then TKT will transfer such MAA to Shire as promptly as practicable after transfer of the MAA from Aventis. Notwithstanding the foregoing, for the avoidance of doubt, Shire will have final decision-making authority with respect to plans, actions and filings for the MAA transfer and all regulatory submissions related thereto, regardless of whether the MAA is transferred directly to Shire or to TKT followed by transfer to Shire. except that if the MAA is transferred from Aventis to TKT in response
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to a request by Shire, then TKT shall promptly transfer the MAA to Shire and Shire shall cooperate fully with TKT to facilitate the transfer;
(ii) use Commercially Reasonable Efforts to cause Aventis to provide TKT with copies of all submissions related to GA-EPO to any Regulatory Authorities which have been made prior to March 26, 2004, and to provide copies of such submissions to Shire, including but not limited to a copy of the MAA;
(iii) TKT will provide (to the extent in TKTs possession), and will use Commercially Reasonable Efforts to cause Aventis to provide, Shire with copies of all submissions related to GA-EPO to Regulatory Authorities in any country outside the Territory and the results of all clinical trials conducted by, or under the supervision of, Aventis and any results, reports or publications of any local investigator initiated studies in the Territory with respect to GA-EPO (clinical or preclinical) available to Aventis. In addition, TKT will use Commercially Reasonable Efforts to cause Aventis to provide TKT with updated information on status and plans including timing for completion of the study reports with respect to the study related to the risk of tumor progression and thromboembolic events in cancer patients, and a list of clinical investigators who have been associated with the development of GA-EPO for both renal and oncology clinical development and will provide the foregoing to Shire upon TKTs receipt from Aventis;
(iv) use Commercially Reasonable Efforts to cause Aventis to provide to TKT all documentation related to GA-EPO available to Aventis which is reasonably required or useful for regulatory submissions by Shire, and to provide such documentation that is in TKTs possession or that TKT receives to Shire. Without limiting the generality of the foregoing, to the extent reasonably required or useful to Shire, TKT will use Commercially Reasonable Efforts to cause Aventis to provide TKT with pre-clinical data and reports, clinical data and reports (including but not limited to the Aventis Oncology Data), regulatory filings (including but not limited to the MAA), manufacturing data and reports, and any other information or documentation related to GA-EPO which Shire may reasonably request and which is in the possession of Aventis, and to provide Shire with copies of such pre-clinical data and reports, clinical data and reports (including but not limited to the Aventis Oncology Data), regulatory filings (including but not limited to the MAA), manufacturing data and reports, and any other information or documentation; provided, however, that Aventis will have the right to redact any documents provided to TKT to remove information not related to GA-EPO; and provided, further, that Shire will have the right to reference such documentation in its regulatory filings in the Territory but ownership of all such documentation (and any data contained in such documentation) so conveyed will remain vested in Aventis. In addition, TKT will use Commercially Reasonable Efforts to cause Aventis to provide TKT with copies of all submissions to Regulatory Authorities outside the Territory and the results of all clinical trials conducted by, or under the supervision of, TKT or Aventis with respect to GA-EPO, and to provide such copies of submissions and results of clinical trials provided by Aventis to TKT or otherwise in TKTs possession to Shire. For purposes of clarity, Shire shall not be required to pay any additional consideration to TKT or Aventis for the transfers contemplated by this Section 2.1(a)(iv), including with respect to the transfer of the Aventis Oncology Data;
(v) use Commercially Reasonable Efforts to facilitate direct communication and transfer of information and documentation related to GA-EPO between Shire and Aventis, including but not limited to the identification of personnel at Aventis appropriate to effectuate such transfer, and to cause Aventis to jointly participate with Shire in discussions and meetings with
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the EMEA, and any other relevant Regulatory Authorities in the Territory in order to agree to a plan for the transfer to Shire of the MAA;
(vi) use Commercially Reasonable Efforts to otherwise enforce TKTs rights under the Aventis Agreement in order to provide Shire with the information, documentation and rights reasonably required for Shire to exercise its rights under this Agreement;
(vii) use Commercially Reasonable Efforts to complete the Material Activities;
(viii) use Commercially Reasonable Efforts to establish Chemical Comparability of Drug Substance manufactured by Lonza in its UK facility;
(ix) transfer to Shire the pharmacovigilance database previously transferred to TKT by Aventis with respect to GA-EPO;
(x) use Commercially Reasonable Efforts to cause Aventis to (A) enter into a safety data exchange agreement to allow both Shire and Aventis to fulfill regulatory reporting requirements with respect to GA-EPO with the applicable Regulatory Authorities, (B) work with Shire to agree upon a benefit risk management plan, and (C) agree with Shire to allow Shire to hold the global safety database and manage global signal detection on behalf of Shire and Aventis; and
(xi) use Commercially Reasonable Efforts to cause Aventis to continue to fulfill its obligations as the holder of the MAA until the transfer thereof to Shire with respect to regulatory matters related to GA-EPO that are on-going as of the Effective Date, including but not limited to making regulatory submissions relating to the risk of tumor progression and thromboembolic events in cancer patients, maintaining responsibility for quality and pharmacovigilance matters and discharging responsibilities as the sponsor of clinical trials in the Territory (including handling responsibilities associated with the Clinical Trial Directive (01 May 2004) where implemented.
(b) TKT will use Commercially Reasonable Efforts to complete, at TKTs cost, any additional required technical transfer of the manufacturing processes for GA-EPO to Lonzas facility in Slough, UK and Vetter, as promptly as practicable.
(c) TKT will use Commercially Reasonable Efforts to provide Shire with reasonable assistance related to Shires activities with respect to GA-EPO in the Territory, at Shires cost and upon reasonable request to TKT, to the extent that TKT has the expertise required to provide such assistance, and upon reasonable terms to be agreed upon in good faith by the Parties. TKT will use sound and professional principles and practices in the performance of such assistance in accordance with normally accepted industry standards, and the performance will reflect TKTs best professional knowledge, skill and judgment. TKT will take direction from Shire with respect to the performance of such assistance.
(d) Notwithstanding the foregoing, in the event that TKT is unable to meet the obligations set forth in this Section 2.1 due to any scientific, medical, legal, or regulatory issue outside of TKTs control, then failure of TKT to complete the foregoing obligations will not be considered a breach of this Agreement.
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2.2. Development Activities. Shire will be responsible for the development of EPO that Shire may in its sole discretion propose to initiate and execute in the Territory, including registration and non-registration trials (including Phase IV Clinical Studies and other post-approval studies).
2.3. TKT Excluded Field. TKT agrees that for the Term of this Agreement, TKT and its Affiliates will not engage, directly or indirectly, in any activity involving the making using, developing, licensing, manufacturing, selling, importing or exporting any product or processes in the TKT Excluded Field for marketing and sales in the Territory.
2.4. Coordination with TKT.
(a) Coordinating Committee. Promptly after the Effective Date, to the extent requested by Shire, the Parties will establish a committee consisting of personnel from TKT and Shire with expertise in pre-clinical and clinical development, regulatory affairs, clinical safety and pharmacovigilance, reimbursement, sales, marketing, intellectual property, process development, and manufacturing (the Coordinating Committee). The Coordinating Committee will be an advisory, not a decision-making, body; each Party will retain final decision-making authority for the activities for which it is responsible hereunder. The Coordinating Committee will coordinate between the Parties on issues related to pre-clinical and clinical development, regulatory affairs, reimbursement, sales, marketing, intellectual property, process development, and manufacturing in relation to GA-EPO for which coordination between the Parties is necessary or desirable. In particular, the Coordinating Committee will discuss matters appropriate to the transition of GA-EPO from Aventis or TKT to Shire and matters relating to the transition of manufacturing responsibilities from TKTs licensees and sublicensees to Shire. For the avoidance of doubt, Shire or its Affiliates will be solely responsible for all Price and Reimbursement Approval proceedings with respect to GA-EPO in the Territory, and Shire will have complete discretion in setting pricing for GA-EPO in the Territory.
2.5. Coordination with Aventis.
(a) Aventis Notification Date. For purposes of information, according to the Aventis Agreement, promptly, but in no event more than ninety (90) days following a Final U.S. Determination (the Aventis Determination Date), Aventis is required to notify TKT in writing (a Determination Notice) of its intention to either (i) continue development and commercialization of GA-EPO in the United States (an Aventis Positive Notification), or (ii) terminate the Aventis Agreement (an Aventis Negative Determination). The failure of Aventis to deliver a Determination Notice to TKT within such ninety (90) day period will be deemed an Aventis Positive Notification.
(b) Clinical, Regulatory and Marketing Activities. To the extent requested by Aventis orShire, representatives of TKT, Shire (and its sublicensees) and Aventis (and its sublicensees) will meet from time to time as may be determined between such parties, but in no event less frequently than annually, at a place mutually agreed to by such parties (each, a CRM Meeting). At each CRM Meeting each party referenced in the first sentence hereof will review the clinical, regulatory and marketing activities undertaken by each other such party or its Affiliates or sublicensees since the previous CRM Meeting and will present its clinical, regulatory and marketing plans for GA-EPO for the ensuing year. Each such party will consider in good faith the clinical, regulatory and marketing plans of such other parties for GA-EPO for the ensuing year; provided, however, that no such party will be required to take any action to modify its clinical, regulatory or marketing plans based upon the plans of such other parties. In no event
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will TKT, Aventis and Shire discuss the pricing of GA-EPO, rebates, discounts or other related matters. Notwithstanding the foregoing, no CRM Meeting will be held prior to an Aventis Positive Notification.
(c) Chemistry, Manufacturing and Controls Activities. To the extent requested by Aventis orShire, representatives of TKT (and its Affiliates and sublicensees), Shire (and its Affiliates and sublicensees), Aventis (and its Affiliates and sublicensees) and any Third Party manufacturer of GA-EPO being utilized by a Party) will meet from time to time as may be determined between such parties, but in no event less frequently than annually , at a place mutually agreed to by such parties (each, a CMC Meeting). At each CMC Meeting, such parties will review the chemistry, manufacturing and controls (CMC) activities of Shire, TKT and Aventis (and their respective Affiliates and sublicensees) since the previous CMC Meeting, each of Shire, TKT and Aventis will present its CMC plans for GA-EPO for the ensuing quarter, and such parties will discuss any proposed material changes to the Specifications of GA-EPO, the manufacturing specifications or the quality control processes related to the manufacture and release of GA-EPO. Each of Shire, Aventis and TKT will consider in good faith the CMC plans of other such parties for GA-EPO for the ensuing year; provided, however, that no such party will be required to take any action to modify its CMC plans based upon the CMC plans of any other such party. Notwithstanding the foregoing, the Parties anticipate that no CMC Meeting will take place prior to an Aventis Positive Notification.
(d) Regulatory Matters.
(i) Adverse Event Reporting. Shire and TKT will each: (A) notify the other of each Serious Adverse Drug Experience with respect to GA-EPO within forty-eight (48) hours of the time such Serious Adverse Drug Experience becomes known to such Party or an Affiliate of such Party; and (B) notify the other of each Adverse Drug Experience with respect to GA-EPO within two (2) business days of the time such Adverse Drug Experience becomes known to such Party or an Affiliate of such Party. Shire agrees to use good faith efforts to coordinate with Aventis for purposes of adverse event reporting.
(ii) Shire Communication with Regulatory Authorities. Shire will not, without the prior written consent of TKT, or unless required by applicable law, correspond or communicate with the FDA or with any other Regulatory Authority outside the Territory regarding GA-EPO. Furthermore, Shire will, immediately upon receipt of any communication from the FDA or from any other Regulatory Authority outside the Territory regarding GA-EPO, forward a copy or description (if not in writing) of such communication to TKT, and respond to all inquiries of TKT relating thereto. If Shire is advised by its legal counsel that it must communicate with the FDA or with any other Regulatory Authority outside the Territory regarding GA-EPO, then Shire will so advise TKT immediately and, unless applicable law prohibits, provide TKT in advance with a copy or description of any proposed communication with the FDA or any other Regulatory Authority outside the Territory regarding GA-EPO and comply with any and all reasonable direction of TKT concerning any meeting or written or oral communication with the FDA or any other Regulatory Authority outside the Territory regarding GA-EPO.
(iii) TKT and Aventis Communication with Regulatory Authorities and Pricing and Reimbursement Authorities. Except as contemplated by Section 2.1, TKT will not, and will use Commercially Reasonable Efforts to ensure that Aventis does not, without the prior written consent of Shire, or unless required by applicable law, correspond or communicate with the European
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Commission, any Regulatory Authority or Pricing and Reimbursement Authorities in the Territory regarding GA-EPO. Furthermore, TKT will, and will use Commercially Reasonable Efforts to ensure that Aventis does, immediately upon receipt of any communication from the European Commission, any Regulatory Authority or Pricing and Reimbursement Authority in the Territory regarding GA-EPO, forward a copy or description (if not in writing) of such communication to Shire, and respond to all inquiries of Shire relating thereto. If TKT or Aventis is advised by its legal counsel that it must communicate with the European Commission, any Regulatory Authority or Pricing and Reimbursement Authority in the Territory regarding GA-EPO, then TKT will so advise Shire as promptly as practicable and, unless applicable law prohibits, TKT will provide, and will use Commercially Reasonable Efforts to ensure that Aventis provides, Shire in advance with a copy or description of any proposed communication with the European Commission, such Regulatory Authority or Pricing and Reimbursement Authority in the Territory regarding GA-EPO and TKT will comply, and will use Commercially Reasonable Efforts to ensure that Aventis complies, with any and all reasonable direction of Shire concerning any meeting or written or oral communication with the European Commission, such Regulatory Authority or Pricing and Reimbursement Authority in the Territory regarding GA-EPO.
(iv) Reference of Shire Documents. To the extent and only to the extent required of a TKT sublicensee under the Aventis Agreement, Shire will provide to TKT all documentation available to Shire which is reasonably required or useful for regulatory submissions by Aventis under the terms of the Aventis Agreement. Without limiting the generality of the foregoing, to the extent reasonably required or useful to TKT or Aventis, Shire will provide TKT with pre-clinical data and reports, clinical data and reports, regulatory filings, manufacturing data and reports, and any other information or documentation related to GA-EPO which TKT may reasonably request and which is in the possession of Shire. Shire will have the right to redact any documents provided to TKT to remove information not related to GA-EPO. TKT and Aventis will have the right to reference such documentation in their regulatory filings outside the Territory.
(e) Other Regulatory Communications. Shire agrees to keep TKT informed of key communications with Regulatory Authorities in the Territory that are likely to affect the regulatory environment outside the Territory, including but not limited to post-marketing safety issues with respect to GA-EPO. TKT agrees to keep Shire informed, and to use Commercially Reasonable Efforts to cause Aventis to keep Shire informed, of key communications with Regulatory Authorities outside the Territory relating to GA-EPO that are likely to affect the regulatory environment in the Territory, including but not limited to post-marketing safety issues with respect to GA-EPO.
(f) Shires reporting obligations under this Section 2 shall extend to, and not extend beyond, the reporting requirements to TKT and/or Aventis required to comply with the Aventis Agreement.
3. MANUFACTURE AND SUPPLY OF PRODUCT
3.1. Manufacture of EPO. Subject to Section 3.4 hereof, Shire will be responsible for all aspects of manufacture, distribution, quality control and release of all GA-EPO sold in the Territory and will bear the costs thereof.
3.2. Shire Responsibility. Subject to Section 3.4, Shire will be responsible for all clinical,
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regulatory, manufacturing, marketing and CMC activities related to the development, manufacture, distribution or sale of EPO in the Territory.
3.3. Third Party Manufacturers. Shire will be permitted to contract with one or more Third Parties to perform the manufacturing activities described herein in accordance with the terms hereof.
3.4. Lonza Agreement. TKT will continue to perform its obligations under the Lonza Agreement until the assignment of the Lonza Agreement to Shire as contemplated by the next sentence, and will use Commercially Reasonable Efforts to maintain satisfactory relationships with Lonza and any Third Parties having business relationships with TKT or Lonza relating to the manufacture and production of GA-EPO in the Territory. TKT will use Commercially Reasonable Efforts to obtain consent from Lonza to assign, and will (upon receipt of consent from Lonza) assign to Shire, TKTs rights and obligations under the Lonza Agreement, and Shire will accept such assignment of the Lonza Agreement; provided, however, that the assignment of the Lonza Agreement to Shire will be subject to the retention by TKT of (a) Liabilities arising under the Lonza Agreement prior to assignment thereof to Shire, and (b) Liabilities arising under Section 2.5 of the Lonza Agreement, whether such Liabilities arise before or after the assignment of the Lonza Agreement to Shire. TKT will be responsible for performing its obligations and exercising its rights under the Lonza Agreement in order to obtain orders of Drug Substance placed with Lonza under the Lonza Agreement as of the Effective Date; provided, however, that TKT will not be required to place any additional orders of Drug Substance with Lonza under the Lonza Agreement after the Effective Date. TKT shall take any action necessary or desirable (including any action reasonably requested by Shire) to enforce its rights under the Lonza Agreement in order to allow Shire to perform its obligations and exercise its rights under this Agreement, including without limitation, enforcing all of its available remedies against Lonza in the event that any batch of Drug Substance is discovered to have failed to meet Specifications.
3.5. Interim Supply. Notwithstanding Sections 3.4 hereof, Shire may order Drug Substance from TKT prior to the assignment of the Lonza Agreement to Shire in accordance with Section 3.4 hereof. Such orders will be pursuant to a purchase order setting forth certain terms and conditions of the supply, and such supply will be subject to the following principles:
(a) TKT will use Commercially Reasonable Efforts to cause Lonza to give Shire the right to audit Lonzas facility at Slough, UK, and to give Shire access to Lonzas facility at Slough, UK to perform such audits;
(b) TKT will promptly inform, and will use Commercially Reasonable Efforts to cause Lonza to promptly inform, Shire of any audit or inspection conducted by a Regulatory Authority in relation to Drug Substance, and shall consult with Shire before making any formal responses to questions or concerns raised by such Regulatory Authority;
(c) TKT will use Commercially Reasonable Efforts to prevent changes to Lonzas facility at Slough, UK or changes to the process for manufacture of Drug Substance from taking place without prior written consent from Shire, such consent not to be unreasonably withheld. TKT will promptly notify Shire of any material deviation from the manufacturing process or Specifications for Drug Substance (as defined in the Lonza Agreement) that are known to TKT; and
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(d) TKT or its licensee or sublicensee will have appropriate agreements in place with RCC Ltd. for the performance potency assays related to Drug Substance, to ensure testing in compliance with cGMP and Specifications (as defined in the Lonza Agreement) and shall provide Shire testing results in an agreed form, such agreement not to be unreasonably withheld.
3.6. Vetter Supply. Shire will use commercially reasonable efforts to obtain Finished Product from Vetter as soon as possible following the Effective Date. TKT will provide technology transfer support to Vetter, at TKTs cost, in accordance with Section 2.1(b) hereof. In the event that TKT enters into an Agreement with Vetter that relates to the subject matter of this Agreement (the Vetter Agreement), TKT will assign the Vetter Agreement to Shire, which assignment Shire will, provided that such agreement includes terms reasonably acceptable to Shire, accept.
4. SALES AND DISTRIBUTION OF PRODUCT
4.1. Shire Suspension of Distribution. Shire will notify TKT promptly if it becomes aware of a problem with the quality or safety of GA-EPO distributed in the Territory, or of a directive from the EMEA or any other applicable Regulatory Authority related to GA-EPO distributed in the Territory. Shire will determine whether to suspend sales and distribution of GA-EPO in the Territory. If Shire determines to suspend sales and distribution of GA-EPO in the Territory, Shire will inform TKT of such decision as promptly as practicable, and in any event, within twenty four (24) hours and sufficiently prior to public notice of such decision to allow TKT to determine how to comply with its own disclosure requirements. After any such suspension, Shire will in its reasonable discretion determine whether and when to resume sales and distribution of GA-EPO; provided, however, that no such suspension will be deemed to be a material breach by Shire hereunder.
4.2. Aventis or TKT Suspension of Distribution. TKT will notify Shire promptly if it becomes aware of a problem with the quality or safety of GA-EPO distributed outside the Territory, or of a directive from the FDA or any other applicable Regulatory Authority related to GA-EPO distributed outside the Territory. TKT or its licensee outside the Territory, as applicable, will determine whether to suspend sales and distribution of GA-EPO outside the Territory. If TKT or its licensee determines to suspend sales and distribution of GA-EPO outside the Territory, TKT will inform Shire of such decision as promptly as practicable, and in any event, within twenty four (24) hours and sufficiently prior to public notice of such decision to allow Shire to determine how to comply with its own disclosure requirements. After any such suspension, TKT or its licensee will in its reasonable discretion determine whether and when to resume sales and distribution of GA-EPO, provided that no such suspension of sales and distribution shall be deemed a material breach of TKT hereunder.
4.3. Product Recall in the Territory. Shire will notify, and will cause its licensee in the Territory to notify, TKT of any recalls required by the European Commission, the EMEA or other applicable Regulatory Authority with respect to GA-EPO in the Territory as promptly as practicable, and in any event, to the extent possible, within twenty four (24) hours and sufficiently prior to public notice of such recall to allow TKT to determine how to comply with its own disclosure requirements. Shire will handle all such product recall issues in accordance with Shire processes and in conformance with Regulatory Authority requirements. Upon such a recall, Shire will determine if such recall is applicable to any GA-EPO lot in distribution in the Territory (i.e., the recall event is (a) traceable to a Drug Substance batch involved in the manufacture of the Finished Product lot or to the finishing of
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the Finished Product, or (b) due to a fundamental issue with the manufacture of any and all formulated Drug Substance lots) and promptly notify its affected customers in the Territory using a letter containing appropriate instructions as to whether the customer should return or dispose of the affected GA-EPO. Shire will be responsible for any expenses incurred associated with the mailing, shipping and administrative expenses in connection with such a recall as well as the cost of replacement GA-EPO for Shire and its customers.
4.4 Product Recall outside the Territory. TKT will notify, and will cause its licensee outside the Territory to notify Shire of any recalls required by the applicable Regulatory Authority with respect to GA-EPO outside the Territory as promptly as practicable, and in any event, to the extent possible, within twenty four (24) hours and sufficiently prior to public notice of such recall to allow Shire to determine how to comply with its own disclosure requirements. TKT or its licensee will handle all such product recall issues in accordance with the processes of TKT or its sublicensees and in conformance with Regulatory Authority requirements. Upon such a recall, TKT or its licensee, as the case may be, will determine if such recall is applicable to any GA-EPO lot in distribution outside the Territory (i.e., the recall event is (a) traceable to a Drug Substance batch involved in the manufacture of the Finished Product lot or to the finishing of the Finished Product, or (b) due to a fundamental issue with the manufacture of any and all formulated Drug Substance lots) and promptly notify its affected customers outside the Territory using a letter containing appropriate instructions as to whether the customer should return or dispose of the affected GA-EPO. TKT or its licensee, as the case may be, will be responsible for any expenses incurred associated with the mailing, shipping and administrative expenses in connection with such a recall as well as the cost of replacement GA-EPO for TKT or its licensee and its or their customers.
4.5. Records. Shire will maintain for the longer of (a) two (2) years after the termination or expiration of this Agreement and (b) such period as required by law, the systems and records and such other information as will reasonably be required to effect a recall of GA-EPO in the Territory, and will make such information available to TKT, at its request, in the event of such a recall.
Furthermore, each Party will cooperate with the other Party in investigating any GA-EPO failure which results in the need for a recall in the Territory.
5. SCOPE OF LICENSE AND DISTRIBUTION
5.1. Grant of License Rights by TKT to Shire.
(a) Exclusive EPO License. Subject to payment to TKT under Section 6.1, TKT hereby grants to Shire an exclusive, irrevocable (subject to the Aventis Agreement) right and license under the Aventis Technology (to the extent that the Aventis Technology is sublicensable by TKT), the TKT Technology and the TKT Patent Rights to (1) (i) develop, import, make and have made GA-EPO throughout the world (subject to Section 5.2 hereof) for distribution and sale in the Territory and (ii) register, market, have marketed, offer for sale, sell, have sold, distribute, have distributed and otherwise commercialize GA-EPO in the Territory; and (2) subject to the Aventis Agreement, (i) develop, import, make and have made Second Generation Products throughout the world (subject to Section 5.2 hereof) for distribution and sale in the Territory and (ii) register, market, have marketed, offer for sale, sell, have sold, distribute, have distributed and otherwise commercialize Second Generation Products in the Territory .
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(b) Sublicenses of GA-EPO and Second Generation Products. Shire will have the right to grant sublicenses under the Aventis Technology (to the extent that TKT is able to grant such right to sublicense the Aventis Technology), the TKT Technology and the TKT Patent Rights license granted by TKT to Shire under Section 5.1(a) hereof; provided that such sublicenses are consistent with the rights and obligations defined in this Agreement. Shire will have no right to license or sublicense any right to market, have marketed, offer for sale, sell, have sold, distribute, have distributed or otherwise commercialize GA-EPO or Second Generation Products outside the Territory. Upon TKTs request, Shire will provide a copy of such sublicenses to TKT.
(c) Exclusive Manufacturing Know-How License. Subject to payment to TKT under Section 6.1, TKT hereby grants to Shire an exclusive, irrevocable (subject to the Aventis Agreement) and royalty-free right and license under Manufacturing Know-How (other than the Marburg Technology) owned or controlled by, or licensed (with the right to sublicense) to, TKT to make and have made (subject to Section 5.2 hereof) (1) GA-EPO throughout the world for distribution and sale in the Territory, and (2) subject to and to the extent permitted under any existing TKT third party agreements, including the Aventis Agreement, Second Generation Products throughout the world for distribution and sale in the Territory.
(d) Sublicenses of Manufacturing Know-How. Shire will have the right to grant sublicenses under the Manufacturing Know-How license granted by TKT to Shire under Section 5.1(c) hereof. Upon TKTs request, Shire will provide a copy of such sublicenses to TKT.
(e) Trademarks. Subject to payment to TKT under Section 6.1, TKT hereby grants to Shire an exclusive and irrevocable royalty-free right and license under Trademarks for use in connection with the packaging, marketing, promotion, distribution, sale and offering for sale of GA-EPO in the Territory.
5.2. Right to Manufacture and Conduct Clinical Studies. Each Party acknowledges and agrees that Aventis and TKT have responded to certain patent infringement actions brought by Amgen, Inc. and Kirin-Amgen, Inc. in the United States (the U. S. Amgen Patent Litigation). Shire and TKT, as the case may be, will not, and TKT will use Commercially Reasonable Efforts to cause Aventis not to, research, develop, import, make or have made GA-EPO in the United States until there has been a final determination of the U.S. Amgen Patent Litigation (whether as a result of the exhaustion of all appeals or a settlement between the parties thereto) (a Final U.S. Determination) which would legally permit the research, development, importation or manufacture of GA-EPO in the United States. Shire will not conduct any clinical study in any country outside the Territory without TKT having obtained the prior written consent of Aventis, which consent, in accordance with the Aventis Agreement, will not be unreasonably withheld, conditioned or delayed. Pursuant to Section 3.2.5(b) of the Aventis Agreement, Aventis does not have the right to conduct any clinical study in any country in the Territory without the prior written consent of TKT, which consent will not be granted without the prior written consent of Shire, which consent will not be unreasonably withheld, conditioned or delayed.
5.3. Reservation of TKT Rights. Notwithstanding the license grants set forth above, TKT at all times reserves the right under the Aventis Technology, the TKT Patent Rights, TKT Technology, and Manufacturing Know-How owned either exclusively by TKT or Aventis, or jointly by TKT and Aventis (a) to make and have made GA-EPO throughout the world (subject to Section 5.2 hereof) for distribution and sale outside the Territory; to develop, use and import GA-EPO throughout the world
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solely for non-clinical research purposes (subject to Section 5.2 hereof); and market, have marketed, offer for sale, sell, have sold, distribute, have distributed and otherwise commercialize GA-EPO outside the Territory, and (b) to make, have made, use, sublicense, distribute for sale and sell products other than GA-EPO and other than Second Generation Products throughout the world.
In consideration for the grant of the licenses set forth in Section 5.1 hereof and the other performances of TKT required under this Agreement, Shire will make the following payment set forth in this Article 6.1 if and only if the Effective Date occurs pursuant to the provisions of Section 11.04(e) of the Merger.
6.1. Payment. On the Effective Date, Shire agrees to pay to TKT a fee of U.S. FOUR HUNDRED FIFTY (U.S. $450) million dollars in full consideration for the rights and licenses it acquires under this Agreement (the License Fee), payable as follows: (a) Eighty Six (US $86) million dollars of the License Fee will be paid directly to Aventis to satisfy TKTs obligations under Section 7.2.3 of the Aventis Agreement; and (b) the remaining Three Hundred and Sixty Four ($364) million dollars will be paid directly to TKT. For the avoidance of doubt, no further payment whatsoever shall be owed by Shire to TKT under this Agreement, except as set forth in Section 6.5 hereof.
Also for the avoidance of doubt, TKT will be responsible for any capital expenditures by Lonza incurred prior to the date of assignment of the Lonza Agreement, and TKT will be responsible for any future invoices from Lonza to the extent that they relate to the technical transfer of the GA-EPO manufacturing processes.
6.2 Royalty Report. On a quarterly basis, within sixty (60) days after the end of each calendar quarter following the First Commercial Sale, Shire will provide TKT with a written report showing (on a country-by-country basis and in local currency, except where otherwise noted) the Net Sales of all GA-EPO sold by Shire or its Affiliates, its distributors and its permitted sublicensees, during the reporting period (the Royalty Report). The Royalty Report will include information that is consistent with the reporting obligations required for sublicensees under the Aventis Agreement.
6.3. Currency. The amounts due hereunder will be expressed in United States dollars. All payments owed under this Agreement will be made by wire transfer to a bank account designated by TKT, unless otherwise specified in writing by TKT.
6.4 Audits. During the Term and for a period of two (2) years thereafter, Shire will keep complete and accurate records in sufficient detail to permit TKT to confirm the completeness and accuracy of the information presented in each Royalty Report. Shire will permit an independent, certified public accountant selected by TKT and reasonably acceptable to Shire, which acceptance will not be unreasonably withheld (the Auditor) to audit or inspect those records of Shire that relate to Net Sales for the sole purpose of verifying Net Sales. Such inspection will be conducted during Shires normal business hours, no more than once in any twelve (12) month period and upon at least thirty (30) days prior written notice by TKT to Shire. The Auditor will execute a written confidentiality agreement with Shire and will disclose to TKT only the amount and accuracy of the Royalty Report. The Auditor will send a copy of the report to Shire at the same time it is sent to TKT and nothing
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contained herein shall prevent TKT from sharing such report with Aventis. The Royalty Report and any other financial or other proprietary Shire information shall be the Confidential Information of Shire.
6.5. Aventis. Shire will pay all amounts due to Third Parties in connection with the exercise of Shire's rights hereunder, including payments due to Aventis under the Aventis Agreement, such as royalties, arising from Shire's exercise of its rights under this Agreement, regardless of when incurred and regardless of whether they relate to periods prior to or after the Effective Date; provided, however, that except as set forth in Section 6.1 of this Agreement, Shire shall not be obligated to make any payments to Aventis arising under Section 7.2.3 of the Aventis Agreement.
7. REPRESENTATIONS AND WARRANTIES; CERTAIN COVENANTS.
7.1. Representations and Warranties of TKT. TKT hereby represents and warrants to Shire that, except as set forth on Schedule 7.1, as of the date of the Merger Agreement; provided, however, that any ongoing obligations contained in this Section 7.1 shall remain in force until completed:
(a) TKT is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware, with the corporate power and authority to enter into this Agreement and to perform its obligations hereunder. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all requisite corporate action on the part of TKT. This Agreement has been duly executed and delivered by TKT and constitutes the valid, binding and enforceable obligation of TKT, subject to applicable bankruptcy, reorganization, insolvency, moratorium and other laws affecting creditors rights generally from time to time in effect and to general principles of equity.
(b) TKT is not subject to, or bound by, any provision of:
(i) its articles or certificates of incorporation or by-laws;
(ii) to TKTs Knowledge, any material mortgage, deed of trust, lease, note, shareholders agreement, bond, indenture, license, permit, trust, custodianship, or other instrument, contract, agreement or restriction to which TKT is a party other than the Aventis Agreement; or
(iii) to TKTs Knowledge, any material judgment, order, writ, injunction or decree of any court, governmental body, administrative agency or arbitrator;
that would prevent, or be violated by, or under which there would be a default as a result of, nor is the consent of any person required for, the execution, delivery and performance by TKT of this Agreement and the obligations contained herein, including without limitation, the grant to Shire of the licenses described in Article 5 hereof.
(c) To TKTs Knowledge, TKT possesses the exclusive right, title and interest in and to the TKT Technology owned by TKT and the TKT Patent Rights in the Territory and that it has the full legal right and power to: (i) enter into the obligations set forth in this Agreement; and (ii) grant the rights and licenses set forth in Sections 5.1(a) through (d) hereof.
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(d) To TKTs Knowledge, (i) there are no encumbrances, liens or other claims affecting the TKT Technology, Manufacturing Know-How or the TKT Patent Rights with respect to GA-EPO in the Territory and (ii) such TKT Technology, Manufacturing Know-How and TKT Patent Rights with respect to GA-EPO in the Territory are valid, enforceable and free from infringement, and that there are no pending or threatened actions, suits or proceedings relating thereto.
(e) To TKTs Knowledge, there are no legal obstacles, including no valid and enforceable patent rights or other proprietary rights of Third Parties, which will prevent Shire from exercising its rights or performing its obligations under this Agreement or which will be infringed by the exercise of Shires rights and the performance of Shires obligations under this Agreement.
(f) In the Territory, to TKTs Knowledge, there is no Third Party infringing any of the TKT Patent Rights, Manufacturing Know-How or Aventis Technology or misappropriating TKT Technology, Manufacturing Know-How or Aventis Technology in derogation of the rights granted to Shire in this Agreement with respect to GA-EPO.
(g) There is no opposition or litigation pending for which TKT has been served or, to TKTs Knowledge, any litigation pending for which TKT has not been served or communication which threatens opposition or litigation action in the Territory, or other litigation before any patent and trademark office, court, or any other governmental entity in the Territory in regard to the TKT Patent Rights, Manufacturing Know-How or TKT Technology with respect to GA-EPO.
(h) TKT has taken reasonable measures to protect the confidentiality of the TKT Technology and Manufacturing Know-How. On occasions where TKT has granted access to Third Parties with respect to the TKT Technology or to other confidential information concerning GA-EPO, such access has been granted pursuant to an enforceable confidentiality agreement containing restrictions on the use of such information.
(i) To TKTs Knowledge, TKT is not in material breach or default of the Aventis Agreement and no event has occurred which with notice or lapse of time would constitute a material breach or default thereof by TKT. To TKTs Knowledge, Aventis is not in breach of the Aventis Agreement.
(j) To TKTs Knowledge, TKT has disclosed to or provided Shire with access to all material information pertaining to the existence of any material side effect, material toxicity effect, material carcinogenicity effect, material adverse effect or any instances of material deleterious physical effects or reactions resulting from, or alleged to result from, GA-EPO.
(k) TKT has paid all payments that are referenced in Schedule 3 of the Lonza Agreement to the extent such payments have become due and payable as of the Effective Date, in the amount of £3,919,713.
(l) The Marburg Technology is not required to commercialize GA EPO as set forth in the MAA.
(m) Except as set forth in the Aventis Agreement, as of the Effective Date, TKT has not granted, and will not grant during the term of this Agreement, any right, license or interest in
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or to the TKT Intellectual Property or Manufacturing Know-How that is in conflict with the rights or licenses granted to Shire under this Agreement.
(n) To TKTs Knowledge, Shire is the exclusive sublicensee of the Aventis Technology with respect to the manufacture of GA-EPO for distribution and sale in the Territory, and Shire is the exclusive sublicensee of the Aventis Technology with respect to the sale of GA-EPO in the Territory, as contemplated under this Agreement.
(o) To TKTs Knowledge, TKT is not in material breach or default of the Lonza Agreement and no event has occurred which with notice or lapse of time would constitute a material breach or default thereof by TKT. To TKTs Knowledge, Lonza is not in breach of the Lonza Agreement.
(p) TKT will transfer the TKT Technology, the TKT Patent Rights, the Aventis Technology and the Lonza Technology existing as of the Effective Date that is in TKTs possession to Shire within six (6) months of the Effective Date. For the avoidance of doubt, TKT will provide Shire within such six (6) month period all information existing as of the Effective Date and in TKTs possession and all materials, documentation, data, applications, authorizations, reports, filings, and the like which are in TKTs possession and are necessary or useful for the regulatory submissions of Shire. TKT agrees to use Commercially Reasonable Efforts to obtain any such information and materials, documentation, data, applications, authorizations, reports, filings, and the like in the possession of Aventis or Lonza within the above time frame and will provide Shire with the opportunity to step in and enforce Aventis, Lonza and other third party obligations to provide such information and data on TKTs behalf. TKT will continue to make prompt transfers of updates and improvements to the foregoing to Shire throughout the Term of this Agreement.
7.2. Representations and Warranties of Shire. Shire hereby represents and warrants to TKT that, as of the date of the Merger Agreement:
(a) Shire is a corporation duly incorporated, validly existing and in good standing under the laws of the United Kingdom with the corporate power and authority to enter into this Agreement and to perform its obligations hereunder. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all requisite corporate action on the part of Shire. This Agreement has been duly executed and delivered by Shire and constitutes the valid, binding and enforceable obligation of Shire, subject to applicable bankruptcy, reorganization, insolvency, moratorium and other laws affecting creditors rights generally from time to time in effect and to general principles of equity.
(b) Shire is not subject to, or bound by, any provision of:
(i) its articles or certificates of incorporation or by-laws;
(ii) to Shires actual knowledge, any material mortgage, deed of trust, lease, note, shareholders agreement, bond, indenture, license, permit, trust, custodianship, or other instrument, contract, agreement or restriction to which Shire is a party; or
(iii) to Shires actual knowledge, any material judgment, order, writ, injunction
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or decree of any court, governmental body, administrative agency or arbitrator;
that would prevent, or be violated by, or under which there would be a default as a result of, nor is the consent of any person required for, the execution, delivery and performance by Shire of this Agreement and the obligations contained herein.
(c) Shire has read the Aventis Agreement and a redacted version of the Lonza Agreement.
7.3. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES, AND NEITHER PARTY WILL BE LIABLE TO THE OTHER FOR, ANY WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, IN RESPECT OF GA-EPO, INCLUDING WITHOUT LIMITATION ANY WARRANTIES OF NON-INFRINGEMENT, MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE.
7.4. Aventis Agreement. Subject to Shires compliance with payment of Aventis royalties under Section 6.5 and provision of information under Section 2.5(f), TKT covenants and agrees that it will use Commercially Reasonable Efforts to: (a) perform its material obligations and responsibilities under the Aventis Agreement; (b) avoid taking any action or omitting to take any action that could constitute a material breach of its obligations under the Aventis Agreement; (c) promptly notify Shire if it receives a notice of default under the Aventis Agreement that could trigger termination of the Aventis Agreement or the licenses to Aventis Technology granted to TKT thereunder; and (d) take any action necessary or desirable (including any action reasonably requested by Shire) to enforce its rights under the Aventis Agreement in order to allow Shire to perform its obligations and exercise its rights under this Agreement. Furthermore, TKT covenants and agrees that it will use Commercially Reasonable Efforts to remedy any material breach of the Aventis Agreement by TKT within ninety (90) days after notice of default thereof from Aventis; provided, however, that TKT will not be deemed to have breached this covenant unless and until Aventis actually terminates the Aventis Agreement in accordance with Section 12.4.1 thereof as a result of such breach; provided, further, however, that if such breach is a result of any action or inaction of Shire, including without limitation, any failure of Shire to provide TKT with information required to be supplied by TKT to Aventis under the Aventis Agreement, and TKT has notified Shire within fifteen (15) days of receiving notice of such breach, then TKT shall not be deemed to be in breach of this Agreement.
7.5 Lonza Agreement. TKT covenants and agrees that it will use Commercially Reasonable Efforts to: (a) perform its material obligations and responsibilities under the Lonza Agreement; (b) avoid taking any action or omitting to take any action that could constitute a material breach of its obligations under the Lonza Agreement; (c) promptly notify Shire if it receives a notice of default under the Lonza Agreement that could trigger termination of the Lonza Agreement or the licenses to Lonza technology granted to TKT thereunder; and (d) take any action necessary or desirable (including any action reasonably requested by Shire) to enforce its rights under the Lonza Agreement in order to allow Shire to perform its obligations and exercise its rights under this Agreement. Furthermore, TKT covenants and agrees that it will use Commercially Reasonable Efforts to remedy any material breach of the Lonza Agreement by TKT within ninety (90) days after notice of default thereof from Lonza; provided, however, that TKT will not be deemed to have breached this covenant unless and until Lonza actually terminates the Lonza Agreement in
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accordance with Section 8.5.1 thereof as a result of such breach; provided, further, however, that if such breach is a result of any action or inaction of Shire, including without limitation, any failure of Shire to provide TKT with information required to be supplied by TKT to Lonza under the Lonza Agreement, and TKT has notified Shire within fifteen (15) days of receiving notice of such breach, then TKT shall not be deemed to be in breach of this Agreement.
7.6. GA-EPO Quality. TKT covenants that it will use Commercially Reasonable Efforts to ensure that the Drug Substance, Finished Product, raw materials related to the manufacture of Drug Substance and Finished Product, and GA-EPO in the process of being manufactured, obtained by Shire from TKT will, to the extent applicable (i) meet all Specifications (as defined in the Lonza Agreement); (ii) be manufactured in compliance with cGMP and other applicable laws; (iii) be manufactured and packaged in a diligent, efficient and skillful manner; (iv) meet all applicable purity and release standards; (v) have an assumed shelf-life of at least eighteen (18) months remaining upon delivery to Shire, unless otherwise agreed in writing with Shire (for purposes of clarity, the Parties acknowledge that the EMEA has not approved the manufacture of Slough Drug Substance as of the Effective Date, and therefore, there is no regulatory shelf-life for the Slough Drug Substance; however, the Parties have agreed to assume for purposes of this calculation, that the Drug Substance sold to Shire hereunder will have the same shelf-life as if it was Portsmouth Drug Substance); (vi) for each batch of Drug Substance supplied, TKT will provide Shire with a certificate of analysis and a certificate of conformance or an appropriate combination of both; and (vii) where Shire determines that a batch of Drug Substance is to be subsequently used in Finished Product for commercial sale or clinical trials, TKT shall provide, on Shires request, any other batch documentation or information reasonably necessary for the Qualified Person at Shire responsible for batch release to make the determination of suitability for commercial sale or use in clinical trials. For the avoidance of doubt, TKTs covenant under this Section 7.65 applies only to the one-time sale by TKT to Shire of Drug Substance and Finished Product.
7.7. Aventis Technology. TKT will use Commercially Reasonable Efforts to facilitate discussions between Aventis and Shire as promptly as practicable after the Effective Date with the purpose of allowing Shire to negotiate directly with Aventis with respect to: (a) a license to the Aventis Technology in the event of termination of the Aventis Agreement in accordance with Section 12.4.1 of the Aventis Agreement; (b) a direct transfer from Aventis to Shire of all documentation, information, regulatory and reimbursement applications and approvals, and knowhow, including without limitation any Registration Approvals, related to GA-EPO; (c) coordination of adverse event reporting; and (d) any other matter related to GA-EPO for which coordination between Shire and Aventis is necessary or desirable; provided, however, that the outcome of such negotiations will in no way affect the terms of this Agreement and that any information delivered by Aventis to Shire shall be considered TKTs information for purposes of Article 11 of this Agreement.
7.8. Compliance with Laws. Shire covenants that it will conduct the activities contemplated under this Agreement in compliance in all material respects with all applicable laws.
7.9. Delivery of GA-EPO Outside the Territory. Shire covenants that Shire will not, and will use Commercially Reasonable Efforts to ensure that GA-EPO distributed or sold pursuant to the licenses granted under Article 5 hereof is not, distributed or delivered outside the Territory.
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7.10. Intended Third Party Beneficiary. The Parties intend that Shire will be deemed an intended third party beneficiary of the Aventis Agreement and the Lonza Agreement, and that to the extent permitted by law, and to the extent consistent with the Aventis Agreement and Lonza Agreement respectively, TKT shall provide Shire with the right to step in and enforce all of TKTs rights and perform TKTs obligations under such agreements. It is the intent of this transaction that TKT is licensing, assigning, conveying, or granting all rights to Shire consistent with TKTs agreements to permit Shire to develop, register, make, use, sell, offer to sell, import, export, as soon as practicable, GA-EPO in the Territory. TKT will take such reasonable steps, including the execution of documents, and provide such cooperation, as is necessary to effect the intent of this transaction.
7.11. Survival. The representations and warranties in Sections 7.1 and 7.2 shall survive after the date of the Merger Agreement solely for purposes of Section 10 and shall terminate at the close of business eighteen months following the date of the Merger Agreement provided, however, that any ongoing obligations contained in Section 7.1 shall remain in force until completed.
8.1. Trademarks.
(a) Use of Shire Trademarks. Nothing contained herein shall prevent Shire from using its own trademarks in connection with the packaging, marketing, promotion, distribution, sale and offering for sale of GA-EPO in the Territory, nor shall anything contained herein require Shire to use the trademark Dynepo.
(b) Use of Dynepo Trademark. In the event that Shire determines to market GA-EPO using the trademark Dynepo, Shire shall so notify TKT and TKT shall use Commercially Reasonable Efforts to cause Aventis to negotiate a royalty-free trademark license with Shire regarding the use of the Dynepo trademark in connection with the packaging, marketing, promotion, distribution, sale and offering for sale of GA-EPO in the Territory. Notwithstanding the foregoing, it is understood that Shire has an exclusive sublicense to the trademark Dynepo in accordance with the terms of Section 5.1 hereof.
(c) Trademark Maintenance. Subject to any agreement to the contrary between Aventis and TKT, TKT will be responsible for registering and maintaining Trademarks at its own expense, and Aventis will be responsible for registering and maintaining trademarks contained within Aventis Technology.
(d) Infringement. Shire will notify TKT promptly upon learning of any actual, alleged or threatened infringement of any Trademark, or any unfair trade practices, trade dress imitation, passing off of counterfeit goods, or like offenses, or any such claims brought by a Third Party regarding GA-EPO (hereinafter Trademark Infringement). Upon learning of any Trademark Infringement, the Parties will confer as to the best response to such Trademark Infringement. In the event that the Trademark dispute is with respect Shires marketing of GA-EPO, in the absence of any other agreement between the Parties or subject to any other agreement between TKT and Aventis, Shire will have the sole right, in its own discretion, and at its own expense, to bring or defend an action to address such Trademark Infringement, in which case Shire will retain any damages recovered from
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any Third Party. In the event that the Trademark dispute is regarding anything other than Shires use of the Trademark in its packaging, marketing, promotion, distribution, sale and offering for sale of GA-EPO in the Territory, in the absence of any other agreement between the Parties or subject to any other agreement between TKT and Aventis, TKT will have the sole right, in its own discretion, and at its own expense, to bring or defend an action to address such Trademark Infringement, in which case TKT will retain any damages recovered from any Third Party.
(e) Trademark Usage. Shire will not use any Trademarks or any trademarks of Aventis in a way that would be confusing or otherwise adversely affect their value. Shire shall provide TKT with copies of any materials containing Trademarks prior to using or disseminating such materials in Argentina, Australia, Brazil, France, Germany, Israel, Italy, New Zealand, Spain, Taiwan, the United Kingdom and Japan and provide TKT an opportunity to provide comments on the proper use of such Trademarks within ten (10) days of receipt of such materials from Shire. If Shire does not receive comments from TKT within such ten (10) day period, then Shire will be free to use or disseminate such materials without further input from TKT.
9.1. Ownership.
(a) Ownership of Discoveries and Improvements. All right, title and interest in all writings, inventions, discoveries, improvements and other technology, whether or not patentable or copyrightable, and any patent applications, patents or copyrights based thereon (collectively, the Inventions) that are discovered, made or conceived solely by employees of TKT or others acting on behalf of TKT shall be owned by TKT. In addition, TKT shall retain ownership of all TKT Intellectual Property and Shire shall have no rights other than those granted herein with respect to the TKT Intellectual Property and the Aventis Technology. All right, title and interest in all inventions that are discovered, made or conceived solely by employees of Shire or others acting on behalf of Shire shall be owned by Shire. All right, title and interest in all Inventions that are discovered, made or conceived jointly by employees of TKT and Shire or others acting on their behalf shall be jointly owned by Shire and TKT. Each Party shall promptly disclose to the other Party the making, conception or reduction to practice of Inventions by employees or others acting on behalf of such Party.
(b) Cooperation of Employees. To the extent permitted by applicable law, each Party represents and agrees that its employees and consultants performing under this Agreement shall be obligated under a binding written agreement to assign to such Party, or as such Party shall direct, all Inventions made or conceived by such employee or consultant. In the case of non-employees working for other companies or institutions on behalf of TKT or Shire, TKT or Shire, as applicable, shall use Commercially Reasonable Efforts to obtain the right to license all Inventions made by such non-employees on behalf of TKT or Shire with the right to sublicense. TKT and Shire agree to undertake to enforce such agreements with employees or others or such rights pertaining to non-employees (including, where appropriate, by legal action) considering, among other things, the commercial value of such Inventions.
9.2. Filing, Prosecution and Maintenance of TKT Patent Rights and TKT Technology.
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(a) Filing, Prosecution and Maintenance. TKT shall be responsible for the filing, prosecution (including defense of oppositions) and maintenance of all patent applications and patents which make up the TKT Patent Rights and such other registrations related to the TKT Technology. For so long as any of the license grants set forth in Section 5.1 remain in effect, TKT agrees to use Commercially Reasonable Efforts to file and prosecute patent applications and maintain the TKT Patent Rights in such countries in the Territory in which Shire intends in good faith to file for Regulatory Approvals and to commercialize GA-EPO. TKT shall consult with Shire and keep Shire fully informed of important issues relating to the preparation, filing, prosecution and maintenance of such patent applications and patents in the Territory, including patent strategy with respect to both existing and future patent applications, patents and Patent Term Extensions (as defined in Section 9.4), and shall furnish to Shire copies of documents relevant to such preparation, filing, prosecution or maintenance sufficiently prior to filing such document or making any payment due thereunder to allow for review and comment by Shire, and TKT shall seriously consider all such comments.
If TKT elects not to continue to seek or maintain any patent or patent application which makes up the TKT Patent Rights in any country in the Territory, Shire shall have the right, at its option, but in the name of TKT and at Shires expense, to file, prosecute (including defense of oppositions) and maintain such TKT Patent Rights; provided, however, that the rights of the Parties with respect to any such TKT Patent Rights shall in all other respects be as described in this Agreement. TKT will advise Shire of all decisions taken with respect to any such election in a timely manner in order to allow Shire to protect its rights under this Section 9.2(a).
(b) Patent Filing Costs. TKT shall bear all costs associated with filing, prosecuting (including defense of oppositions) and maintaining patent applications and patents covering the TKT Patent Rights in all countries in the Territory, except as otherwise provided in Section 9.2(a).
(c) Aventis Technology. TKT will use Commercially Reasonable Efforts to cause Aventis to negotiate an agreement with Shire regarding Shires right to assume, at its option, responsibility for certain matters relating to the Aventis Technology, including the filing, prosecution and maintenance of any patents contained in the Aventis Technology upon Aventiss abandonment thereof.
9.3. Cooperation. Each Party shall make available to the other Party or its authorized attorneys, agents, representatives, employees, subcontractors or consultants to the extent reasonably necessary or appropriate to enable the appropriate Party to file, prosecute (including the defense of oppositions) and maintain patent applications and resulting patents with respect to Inventions owned by a Party and for periods of time reasonably sufficient for such Party to obtain the assistance it needs from such personnel. Where appropriate, each Party shall sign or cause to have signed all documents relating to said patent applications or patents reasonably requested by the other Party at no charge to the other Party. Notwithstanding the foregoing, Shire shall not be precluded from contesting the validity or enforceability of the TKT Patent Rights or TKT Technology; provided, however, that TKT shall have the right to terminate this Agreement in any country in the Territory in which Shire contests the validity or enforceability of the TKT Patent Rights or TKT Technology.
9.4. Patent Term Restoration. The Parties shall cooperate with each other in obtaining patent term restoration or extension, Supplemental Protection Certificates, regulatory extensions or exclusivity, or their equivalents (the foregoing collectively referred to as Patent Term Extensions), in the Territory where applicable to TKT Patent Rights, including providing copies of relevant regulatory submissions and correspondence and executing requisite documentation. TKT shall have
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the first right to make any elections in any country in the Territory regarding Patent Term Extensions with respect to TKT Patent Rights, and shall consult with Shire regarding TKTs strategy to maximize market exclusivity with respect to GA-EPO. If TKT decides not to obtain Patent Term Extensions in any country in the Territory with respect to TKT Patent Rights, Shire shall, at its sole cost and expense, have the right to obtain any such Patent Term Extensions in such country.
9.5. No Other Technology Rights. Except as otherwise expressly provided in this Agreement, under no circumstances shall a Party hereto, as a result of this Agreement, obtain any ownership interest in or other right to any technology, know-how, patents, pending patent applications, products, or biological materials of the other Party, including items owned, controlled or developed by the other Party, or transferred by the other Party to said Party, at any time pursuant to this Agreement. It is understood and agreed that this Agreement does not grant Shire any license or other right in the TKT Patent Rights for uses other than the development, production, manufacture, use, distribution for sale and sale of GA-EPO covered by the TKT Patent Rights or which uses the TKT Technology in the Territory, as set forth in Article 5 (except as provided in Section 2.4) .
9.6. Enforcement of TKT Patent Rights, TKT Technology and Aventis Technology.
(a) Infringement, Misappropriation or Misuse. Each Party shall give notice to the other Party of any (i) infringement of TKT Patent Rights or Aventis Technology in the Territory relating to GA-EPO or Second Generation Products; (ii) misappropriation or misuse of TKT Technology or Aventis Technology in the Territory relating to GA-EPO or Second Generation Products, or (iii) patent validity actions or any declaratory judgment actions related to the TKT Patent Rights, the TKT Technology or the Aventis Technology, promptly after such event in (i), (ii) or (iii) comes to such Partys attention. TKT and Shire shall thereafter consult and cooperate fully to determine a course of action, including but not limited to commencement of legal action by either or both TKT and Shire to terminate any infringement, misappropriation or misuse, subject to and in accordance with Sections 9.6(b) (f).
(b) Shires First Right to Act.
(1) Shire, upon notice to TKT, shall have the right, at Shires discretion, to initiate and prosecute and control legal action related to any of the events described in Section 9.6(a)(i) (iii) above, at Shires expense and in the name of Shire, and as appropriate, in the name of TKT. For any such action, in the event that Shire has the right pursuant hereto to initiate or prosecute such action or to control the defense of such action, but is not legally permitted to do so solely in its own name, or to the extent otherwise reasonably requested by Shire, TKT will join such action or defense voluntarily, and at Shires expense, will execute all documents necessary for Shire to initiate litigation to prosecute and maintain such action or for Shire to control such defense of such action. At TKTs own option and expense, TKT shall have the right to join such action.
(2) Notwithstanding Section 9 (b)(1), Shires first right to initiate and prosecute legal actions and to control the proceedings is subject to the following TKT Right to Control when the proceedings involve issues that TKT believes reasonably relate to a Validity Determination (as defined herein). The TKT Right to Control consists of the following:
(i) The parties will appoint an arbitrator who is a senior litigation partner from a well established intellectual property law firm with at least ten years of relevant
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experience. The arbitrator will be selected by the parties, and the parties will agree upon an appropriate arbitration mechanism and procedure, including some agreed upon standards by which the arbitrator should resolve any conflict of interest between the parties, prior to the initiation of an infringement action (or at an earlier mutually agreed to time).
(ii) In the event that Shire initiates an infringement action involving TKT Patent Rights, Shire will keep TKT fully informed of the proceedings, including the litigation strategy, and will consult with TKT prior to taking any material actions in the litigation that would result in a final determination on the rights of TKT.
(iii) TKT shall have the right to challenge, before the arbitrator, any proposed decision by Shire during the litigation proceeding that involves a validity determination of the gene activation technology claimed in the TKT Patents (a Validity Determination) that TKT reasonably believes will have a materially adverse effect on the validity of such patent rights covering its gene activation technology (an Adverse Validity Determination). If the arbitrator finds that Shires proposed action would be reasonably likely to result in an Adverse Validity Determination, then TKT shall have the right to control the litigation strategy with respect to the Validity Determination solely to the extent necessary to avoid an Adverse Validity Determination. Each decision involving a Validity Determination will be subject to the same arbitration challenge mechanism and each such dispute will be decided separately by the arbitrator.
(iv) The arbitrator shall, at the conclusion of the arbitration proceedings, make findings that include a determination of the appropriate scope, if any, of TKTs right to control and appropriate guidelines for managing any conflicts of interest of the parties in the litigation. This decision shall take into account the relative impact of expected outcomes on the interests of each of the parties, shall reflect the fact in certain respects that the financial terms of Shires license hereunder are those of an asset purchase rather than a license, and shall be reasonably tailored to the magnitude of the expected harm that might be suffered by each party. In the event of conflict of interest between the parties on litigation strategy that has an impact both on Validity Determination and on other issues involved in the litigation that would impact Shires interests, the arbitrator will have the right to determine which partys interest should prevail with respect to the issue in dispute, taking into account the relative impact of expected outcomes on the interests of each party.
(v) If and when TKT acquires the right to control any part of the litigation pursuant to this TKT Right to Control, TKT will keep Shire fully informed of its proposed actions, including the litigation strategy, will consult with Shire prior to taking any material actions in the litigation proceedings, and will ensure that Shire has reasonable opportunity to respond to TKTs proposed actions prior to such actions being taken. The parties will provide reasonable cooperation to each other and coordinate on litigation strategy that reasonably protects their respective interests.
(c) TKTs Second Right to Act.
(1) Shire shall promptly inform TKT if it elects not to exercise its first right as set forth in Section 9.6(b), and subject to the rights of Aventis, TKT shall thereafter have the second
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right, at TKTs discretion, to initiate and prosecute and control legal action related to any of the events described in Section 9.6(a)(i) (iii) above, at TKTs expense and in the name of TKT, and if necessary, in the name of Shire. For any such action, in the event that TKT has the right pursuant hereto to initiate or prosecute such action or to control the defense of such action, but is not legally permitted to do so solely in its own name, Shire will join such action or defense voluntarily, and at TKTs expense, will execute all documents necessary for TKT to initiate litigation to prosecute and maintain such action or for TKT to control such defense of such action. At Shires own option and expense, Shire shall have the right to join such action.
(2) Notwithstanding Section 9 (d)(1), TKTs right to initiate and prosecute legal actions and to control the proceedings is subject to the following Shire Right to Control when the proceedings involve issues that Shire believes reasonably relate to an EPO Determination (as defined herein). The Shire Right to Control consists of the following:
(i) The parties will appoint an arbitrator who is a senior litigation partner from a well established intellectual property law firm with at least ten years of relevant experience. The arbitrator will be selected by the parties, and the parties will agree upon an appropriate arbitration mechanism and procedure, including some agreed upon standards by which the arbitrator should resolve any conflict of interest between the parties, prior to the initiation of an infringement action (or at an earlier mutually agreed to time).
(ii) In the event that TKT initiates an infringement action involving TKT Patent Rights, TKT will keep Shire fully informed of the proceedings, including the litigation strategy, and will consult with Shire prior to taking any material actions in the litigation that would result in a final determination on the rights of Shire.
(iii) Shire shall have the right to challenge, before the arbitrator, any proposed decision by TKT during the litigation proceeding that relates to GA-EPO or Second Generation Products (an EPO Determination) that Shire reasonably believes will have a materially adverse effect on its development, manufacture, distribution, import, export and sale of EPO in the Territory (an Adverse EPO Determination). If the arbitrator finds that TKTs proposed action would be reasonably likely to result in an Adverse EPO Determination, then TKT shall have the right to control the litigation strategy with respect to the EPO Determination solely to the extent necessary to avoid an Adverse EPO Determination. Each decision involving an EPO Determination will be subject to the same arbitration challenge mechanism and each such dispute will be decided separately by the arbitrator.
(iv) The arbitrator shall, at the conclusion of the arbitration proceedings, make findings that include a determination of the appropriate scope, if any, of TKTs right to control and appropriate guidelines for managing any conflicts of interest of the parties in the litigation. This decision shall take into account the relative impact of expected outcomes on the interests of each of the parties, shall reflect the fact that the financial terms of Shires license hereunder are those of an asset purchase rather than a license, and shall be reasonably tailored to the magnitude of the expected harm that might be suffered by each party. In the event of conflict of interest between the parties on litigation strategy that has an impact both on the EPO Determination and on other issues involved in the litigation that would impact TKTs interests, the arbitrator will have the right to determine which partys interest should prevail with respect
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to the issue in dispute, taking into account the relative impact of expected outcomes on the interests of each party.
(v) If and when Shire acquires the right to control any part of the litigation pursuant to this Shire Right to Control, Shire will keep TKT fully informed of its proposed actions, including the litigation strategy, will consult with TKT prior to taking any material actions in the litigation proceedings, and will ensure that TKT has reasonable opportunity to respond to Shires proposed actions prior to such actions being taken. The parties will provide reasonable cooperation to each other and coordinate on litigation strategy that reasonably protects their respective interests.
(d) No Adverse Settlement Without Consent of the Other Party. Neither party will settle any suit involving the TKT Patent Rights, TKT Technology or Aventis Technology in a manner that would compromise the other partys rights under this Agreement without such partys consent.
(e) Cooperation. In any action, the Parties will cooperate fully and will provide each other with any information or assistance that either may reasonably request. The Parties shall keep each other informed of developments in such action or proceeding, including to the extent permissible by law and contracts, the status of any settlement negotiations and the terms of any offer related thereto.
9.7. Defense of Third Party Infringement Other than Declaratory Judgment Actions.
(a) Notice. If either Party or any of its Affiliates becomes aware of the potential for a claim of infringement, or is named as a defendant in a legal proceeding by a Third Party alleging infringement of a Third Party patent or other intellectual property right as a result of the development, manufacture, use, distribution for sale, sale, offer for sale, or importation of GA-EPO or a Second Generation Product in any country in the Territory, and to the extent such claim does not implicate rights included within the scope of Section 9.6, the Party first having such knowledge or notice of such Third Party claim shall promptly notify the other Party.
(b) Defendants Right to Control Its Own Defense.
(i) Each party shall have the sole right and responsibility to respond to, defend or prosecute any actions, challenges, infringements, misappropriations or proceedings brought by a Third Party against such party based upon the development, manufacture, use, distribution for sale, sale, offer for sale, or importation of GA-EPO or Second Generation Products in the Territory. The party named as a defendant in any such action shall have control over its own defense at its own expense.
(ii) Parties will provide reasonable cooperation to each other and will keep each other reasonably informed of any legal proceedings. Each party shall, at its own option and expense, have the right to join such action at its own expense solely to the extent that such action implicates such partys rights under this Agreement.
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(iii) No Adverse Settlement By One Party Without the Other Partys Consent. Neither party will take any actions or settle any suit involving the TKT Patent Rights or TKT Technology or Aventis Technology in a manner that would compromise or adversely impact any rights of the other party without obtaining the prior written consent of such party.
9.8. Sharing of Recovery. Any recovery obtained by either Party in connection with or as a result of any action contemplated by Section 9.6 or Section 9.7 whether by settlement or otherwise, shall be shared in order as follows (and any damages shall be borne as follows):
(i) the Party that prosecuted, or that controlled the defense of, the action shall recoup all of its costs and expenses incurred in connection with such action;
(ii) the other Party shall then, from funds remaining, recover its costs and expenses incurred in connection with such action to the extent that such costs and expenses are reasonably incurred to comply with such Partys obligations under this section, or to the extent that such Party participates in the prosecution or defense of such action but not as a party thereto;
(iii) any amount remaining shall be retained by the party initiating the suit (or any amount owed as a result of such suit paid by such party).
10. INDEMNIFICATION
10.1. Indemnification.
(a) Mutual Indemnification. Each Party will indemnify and hold the other Party and its Affiliates, and their respective directors, officers, employees and agents, harmless from and against all liabilities, penalties, costs, losses, damages and expenses (including reasonable attorneys fees and expenses) (Losses) to the extent incurred and arising out of or resulting from claims asserted by Third Parties relating to: (i) the negligence, recklessness or intentional acts or omissions of the indemnifying Party or its Affiliates, and their respective directors, officers, employees and agents with respect to this Agreement and the transactions contemplated hereby; and (ii) any breach of a representation, warranty, covenant or agreement, including any obligation of Shire to make payments under Section 6.5 hereof, of the indemnifying Party hereunder (except to the extent such Loss arose out of or resulted from the negligence, recklessness or intentional acts or omissions of the other Party or its Affiliates, and their respective directors, officers, employees and agents).
(b) Indemnification by Shire. To the extent not subject to Section 10.1(a) hereof, Shire will indemnify and hold TKT, its Affiliates, and their respective directors, officers, employees and agents (the TKT Indemnitees), harmless from and against all Losses to the extent incurred and arising out of or resulting from claims asserted by Third Parties relating to (i) the development, manufacture or commercialization of GA-EPO by Shire, its Affiliates, licensees, sublicensees or distributors after the Effective Date, regardless of whether such development, manufacture or commercialization is in the Territory (it being understood that Shire has no rights under this Agreement to commercialize GA-EPO or Second Generation Products outside the Territory); provided, however, that Shire shall not be liable to TKT with respect to manufacturing under this Section 10.1(b) prior to the date that any licensee or sublicensee of TKT, including Lonza, contracts
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directly with Shire and shall not be liable for any costs that TKT incurs pursuant to its right to control its own defense against a Third Party claim in Section 9.7, (ii) bodily injury, death or property damage attributable to Shires performance of its obligations under this Agreement, or the manufacture, distribution, sale or use of GA-EPO by Shire or its Affiliates in the Territory after the Effective Date, except to the extent such GA-EPO was provided to Shire by TKT, (iii) any negligent act or omission of Shire or its Affiliates, distributors, wholesalers, sublicensees or agents in the promotion, marketing, distribution and sale of GA-EPO, (iv) violations of any applicable law or regulation by Shire or its Affiliates or sublicensees (acting under an agreement with Shire) by virtue of which GA-EPO manufactured, distributed or sold will be alleged or determined to be not in compliance with any applicable law or regulation, or (v) any negligent act or omission of Shire or its Affiliates in connection with interactions and communications with governmental authorities.
(c) Indemnification by TKT. To the extent not subject to Section 10.1(a) hereof, TKT will indemnify and hold Shire, its Affiliates, and their respective directors, officers, employees and agents and sublicensees (the Shire Indemnitees), harmless from and against all Losses to the extent incurred and arising out of or resulting from claims (including product liability claims in tort, contract, strict liability or any other theory of liability) asserted by Third Parties relating to: (i) the development, manufacture or commercialization of GA-EPO by TKT, its Affiliates, licensees, sublicensees or distributors (including Aventis and Lonza) prior to the Effective Date, regardless of whether such development, manufacture or commercialization is in the Territory, (ii) the development, manufacture or commercialization of GA-EPO by TKT, its Affiliates, licensees, sublicensees or distributors (including Aventis and Lonza) after the Effective Date, regardless of whether such development, manufacture or commercialization is in the Territory (it being understood that TKT has no rights under this Agreement to commercialize GA-EPO in the Territory after the Effective Date); provided, however, that TKT shall not be liable to Shire under this Section 10.1(c)(ii) for activities undertaken after the Effective Date by any licensee or sublicensee of TKT that contracts directly with Shire to the extent they perform for Shire (including the assignment of the Lonza Agreement as contemplated hereby), after such contract with Shire or assignment to Shire occurs and provided that TKT shall not be liable for any costs that Shire incurs pursuant to its right to control its own defense against a Third Party claim in Section 9.7 , (iv) bodily injury, death or property damage attributable to the Drug Substance, Finished Product, raw materials related to the manufacture of Drug Substance and Finished Product, and GA-EPO in the process of being manufactured provided to Shire by TKT, due to a failure to meet Specifications (as defined in the Lonza Agreement) or other applicable requirements of Section 7.5, or (v) any use by either TKT or Aventis of any information provided to TKT by Shire under this Agreement for purposes of TKTs fulfillment of its obligations to Aventis under the Aventis Agreement, in any manner inconsistent with the Aventis Agreement or this Agreement.
10.2. Defense of Claim. The Party seeking indemnification hereunder agrees to give the other Party (a) prompt written notice of the institution of any claims asserted or made, (b) to the extent the indemnifying party is so obligated, but subject to Section 9 hereof, the opportunity to defend, negotiate and settle such claims, and (c) reasonable assistance in the defense of such claims. Notwithstanding the above, neither party shall be liable for the costs incurred by the other party pursuant to the exercise of the other partys rights under Section 9.7(a) .
10.3. Settlements. Neither Party may settle a claim or action covered by this Article 10 hereof without the prior written consent of the other Party if such settlement would impose any monetary obligation on the other Party or require the other Party to submit to an injunction or
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contractual obligation. Any payment made by a Party to settle any such claim or action will be at its own cost and expense.
10.4. Insurance. Shire will, during the Term, maintain commercially reasonable amounts of insurance or self-insurance given the size, nature and scope of its business from a reputable insurance carrier to cover against liability risks, including product liability insurance for the benefit of TKT. Shire will provide TKT with evidence of such insurance or self-insurance upon request.
10.5. No Consequential Damages. IN NO EVENT WILL ANY PARTY OR THEIR AFFILIATES BE LIABLE FOR SPECIAL, PUNITIVE, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER LEGAL THEORY AND IRRESPECTIVE OF WHETHER SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF ANY SUCH LOSS OR DAMAGE; PROVIDED THAT THIS LIMITATION WILL NOT LIMIT THE INDEMNIFICATION OBLIGATIONS OF THE PARTIES PURSUANT TO ARTICLE 10 HEREOF FOR SUCH DAMAGES CLAIMED BY A THIRD PARTY.
Each Party agrees and will undertake to keep any information regarding GA-EPO or otherwise received under this Agreement confidential and will refrain from disclosing it to any Third Party, unless (and to the extent) compelled to disclose by judicial or administrative process or, in the opinion of such Partys counsel, by the requirements of applicable law or regulations (including Securities and Exchange Commission rules and regulations), in which case the Party seeking to disclose such information will give the other Party reasonable advance notice of such disclosure in order to permit the other Party to seek an appropriate protective order or to attempt to reach mutual agreement regarding the portions of such information that should be subject to a request for confidential treatment, and except to the extent that such information (a) is required to be disclosed by either Party in order to carry out its rights or obligations hereunder, (b) is in the public domain through no fault of the Party to which it is furnished, including through prior public disclosure made in accordance with this Article 11, (c) is independently developed by the Party to which it is furnished without use of, reference to, or reliance upon, the furnishing Partys information, as evidenced by written documentation , or (d) is later lawfully acquired from other sources (without obligations of confidentiality) by the Party hereto to which it is furnished. Notwithstanding the foregoing, the Parties will issue a joint press release disclosing the existence and principal provisions of this Agreement, the text of which first will have been reviewed and approved by each Party (such approval not to be unreasonably withheld or delayed); provided, however, that such press release will not disclose any proprietary information of the other Party. Notwithstanding the foregoing, Shire recognizes and agrees that TKT will file this Agreement in connection with its securities filings in the United States and TKT acknowledges that Shire may also file this Agreement in connection with its own securities filings and related regulatory obligations. Each Party also agrees not to use any confidential information of the other Party obtained by it in connection with this Agreement for any purpose other than the to fulfill its obligations hereunder.
Each Party will be permitted to share information described in this Article 11 with Affiliates, employees, agents, sublicensees and subcontractors; provided, however, that such Affiliates, employees, agents, sublicensees and subcontractors are required to keep such information
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confidential. Shire acknowledges and agrees that TKT is permitted to share information about GA-EPO and this Agreement, including information described in this Article 11, with Sanofi-Aventis, Aventis and Lonza; provided, however, that upon assignment of the Lonza Agreement to Shire, TKT will not make any further disclosures of any information described in this Article 11 to Lonza except to the extent required to complete TKTs obligations under Section 2.2 hereof. Specifically, TKT is permitted to provide Sanofi-Aventis and Aventis with information required to be provided by TKT to them under the Aventis Agreement, including information related to the development, manufacture and sale of GA-EPO and any Second Generation Product, such as copies of regulatory filings and correspondence with Regulatory Authorities, manufacturing documentation (including batch records, protocols, and manufacturing processes), and pre-clinical and clinical information. TKT acknowledges and agrees that Shire is permitted to share information about GA-EPO and this Agreement, including information described in this Article 11, with Sanofi-Aventis, Aventis, Lonza and Vetter; provided, however, that Shire will not communicate with Sanofi-Aventis or Aventis prior to the Effective Date hereof. Furthermore, Shire and TKT may file such information publicly to the extent that such Party is required to do so in compliance with the rules and regulations promulgated by the United States Securities and Exchange Commission or equivalent foreign regulatory bodies.
Notwithstanding the foregoing, TKT acknowledges and agrees that Shire may publish the results of any clinical studies conducted by Shire with respect to GA-EPO under this Agreement on Shires Clinical Trials Register and that such publication will not be a breach of the confidentiality obligations provided in this Article 11.
12.1. Term. This Agreement will expire upon the later of (a) the last to expire of any patents included in the Aventis Technology, TKT Patents, TKT Technology, or Manufacturing Know How; or (b) and the existence of any Confidential Information still residing in the Aventis Technology, TKT Patents, TKT Technology, or Manufacturing Know How. Upon expiration of this Agreement, Shire will have a fully paid-up, royalty-free right and license under the Aventis Technology, TKT Patents, TKT Technology, or Manufacturing Know How to make, have made, use, sell, offer for sale, distribute and otherwise exploit EPO in the Territory. In addition, upon expiration of this Agreement, Shire will have the exclusive right to promote and sell GA-EPO under the Trademarks and any trademarks contained within Aventis Technology.
Notwithstanding the preceding, this Agreement will have no force and effect upon the earlier of (i) the Effective Time (as defined in Section 2.01 of the Merger Agreement) and (ii) termination of the Merger Agreement (except pursuant to Section 11.04(e) of the Merger Agreement).
13.1. Entire Agreement. This Agreement, together with the Exhibits and Schedules hereto, and the Merger Agreement of April [ ], 2005, sets forth the entire agreement and understanding between the Parties as to the subject matter hereof. Except as otherwise provided expressly herein, no modification, amendment or supplement to the Merger Agreement, this Agreement or to such Exhibit or Schedule will be effective for any purpose unless in writing and signed by the Parties hereto.
13.2. Binding Effect; Assignment. This Agreement may not be assigned or otherwise
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transferred by TKT without the consent of Shire; provided, however, that TKT may, without such consent, assign its rights and obligations under this Agreement (a) in connection with a corporate reorganization, to any Affiliate, all or substantially all of the equity interest of which is owned and controlled by TKT or its direct or indirect parent corporation, or (b) in connection with a merger, consolidation or sale of substantially all of TKTs assets to a Third Party; provided, however, that TKTs rights and obligations under this Agreement will be assumed by its successor in interest in any such transaction and will not be transferred separate from all or substantially all of its other business assets, including those business assets that are the subject of this Agreement. Any purported assignment in violation of the preceding sentence will be void. Shire may assign its rights herein, and this Agreement, without TKTs consent, subject to the Aventis Agreement; provided, however, that no such assignment shall relieve Shire of any of its obligations hereunder.
13.3. Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to the choice of law provisions thereof. To the extent it may be applicable, the Parties intend that the United Nations Convention on the International Sale of Goods, the 1974 Convention on the Limitation Period in the International Sale of Goods (the 1974 Convention) and the Protocol amending the 1974 Convention, done at Vienna on April 11, 1980, will not apply.
13.4. No Waiver; Remedies. No failure on the part of either Party hereto to exercise, and no delay in exercising, any right hereunder will operate as a waiver thereof; nor will any single or partial exercise of any such right preclude any other future exercise thereof or the exercise of any other right. The remedies herein are cumulative and not exclusive of any remedies provided by law.
13.5. Force Majeure. Neither Party will be held liable or responsible to the other Party nor be deemed to have defaulted under or breached this Agreement for failure or delay in fulfilling or performing any term of this Agreement when such failure or delay is caused by or results from causes beyond the reasonable control of the affected Party, including but not limited to fire, floods, embargoes, war, peril of the sea, acts of war (whether war is declared or not), locusts, insurrections, riots, civil commotions, strikes, lockouts or other labor disturbances, acts of God or acts, omissions or delays in acting by any governmental authority or the other Party.
13.6. Notices. All notices, reports and communications permitted or required by this Agreement will be in writing, will be in English and will be deemed given when delivered personally or transmitted by facsimile (and telephonically confirmed), four (4) business days after being mailed by registered or certified mail with postage prepaid and returned receipt requested, or when received, if sent by commercial overnight courier with fees prepaid (if available; otherwise, by the next best class of service available), to the Parties at the following addresses:
To Shire: | Shire Pharmaceutical Group plc. | |
To TKT: | Transkaryotic Therapies, Inc. 700 Main Street | |
Cambridge, Massachusetts 02139 | ||
Attention: President and Chief Executive Officer With a | ||
copy to: Legal Department | ||
Phone: 617-349-0200 | ||
Fax: 617-349-0550 |
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13.7. Severability. Any provision of this Agreement that is invalid or unenforceable in any jurisdiction will, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without invalidating the remaining provisions hereof, to the extent that the purpose of this Agreement is not materially altered, or affecting the validity or enforceability of such provision in any other jurisdiction.
13.8. Relationship of Parties. Shire will act as an independent contractor with respect hereto. Nothing in this Agreement will constitute or be deemed to constitute either Party as the legal representative or agent of the other, nor will either Party have the right or authority to assume, create, or incur any liability or any obligation of any kind, expressed or implied, in the name or on behalf of the other Party. The Parties do not intend, by entering into this Agreement, to enter into a partnership arrangement as described in the Internal Revenue Code of 1986, as amended, and applicable regulations.
13.9. Dispute Resolution.
(a) Except as otherwise expressly provided in the Merger Agreement, any disputes arising between the Parties relating to, arising out of or in any way connected with this Agreement or any term or condition hereof, or the performance by any Party of its obligations hereunder, whether before or after termination of this Agreement, that is not resolved by the Parties within thirty (30) days after notice of such dispute is given by one Party to the other in writing will be referred to the Chief Executive Officers of TKT and Shire or their designees who are authorized to settle such disputes on behalf of their respective companies (the Senior Executives). The Senior Executives will meet for negotiations within thirty (30) days after the end of such 30-day period referred to above, at a time and place mutually acceptable to both Senior Executives. If the Dispute has not been resolved within thirty (30) days after the end of the original 30-day period referred to above (which period may be extended by mutual agreement), subject to any rights to injunctive relief and unless otherwise specifically provided for herein, such dispute will be finally resolved as provided in Section 13.9(b) hereof.
(b) Except as otherwise expressly provided in the Merger Agreement, Shire and TKT agree that any disputes arising between the Parties relating to, arising out of or in any way connected with this Agreement or any term or condition hereof, or the performance by any Party of its obligations hereunder, whether before or after termination of this Agreement (other than a dispute described in Section 6.7 hereof), that is not resolved by the Parties pursuant to 13.9(a) hereof, will be resolved by the state and federal courts of the State of Delaware. TKT and Shire each hereby irrevocably submit to the jurisdiction of such courts with a venue in Wilmington or as close to Wilmington as possible under applicable law; provided, however, that each Party will have the right to institute judicial proceedings against the other or any Party acting on the others behalf in any jurisdiction in order to enforce the instituting Partys rights hereunder through reformation of contract, specific performance, injunction or any other form of injunctive relief. TKT and Shire hereby irrevocably waive any right to a jury trial and any objection relating to the venue of any dispute, action, or proceeding relating to this Agreement in the State of Delaware, including any claim that the State of Delaware is not a convenient forum.
(c) In the event that TKT and Aventis become involved in a dispute related to the
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Aventis Agreement, Shire will provide TKT in a timely manner with such information and support as TKT may reasonably request in order to allow TKT to adequately represent itself during such dispute, such support to be at TKTs cost.
13.10. Language. This Agreement is executed in the English language. A translation of this Agreement may be provided for understanding; provided, however, that in the event of any discrepancy or contradiction between this original English version and any translation hereof, this original English version will prevail.
13.11. Performance by Affiliates. To the extent that this Agreement imposes obligations on Affiliates of a Party, such Party agrees to cause its Affiliates to perform such obligations. Either Party may use one or more of its Affiliates to perform its obligations and duties hereunder; provided, however, that Shire and TKT will remain liable hereunder for the prompt payment and performance of all their respective obligations hereunder.
13.12. Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed an original and all of which, when taken together, will constitute one and the same agreement.
13.13. Expenses. Each Party will pay its own expenses except as specifically provided herein.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed by their respective duly authorized officers under seal as of the date first above written.
TRANSKARYOTIC THERAPIES, INC. | Shire Pharmaceutical Group plc | |
By: /s/ David Pendergast | By: /s/ Matthew Emmens | |
|
|
|
Name: David Pendergast, | Name: Matthew Emmens | |
Title: President and CEO | Title: Chief Executive Officer |
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EXHIBIT 99.04
VOTING AGREEMENT
This VOTING AGREEMENT (this Agreement), dated as of April 21, 2005, is among Shire Pharmaceuticals Group plc, a public limited company incorporated under the laws of England and Wales (Parent), Warburg, Pincus Equity Partners, L.P., a Delaware limited partnership (WPEP), Warburg, Pincus Netherlands Equity Partners I, C.V., a Netherlands Commanditaire Vennootschap (WPNEP I), Warburg, Pincus Netherlands Equity Partners III, C.V., a Netherlands Commanditaire Vennootschap (WPNEP III and together with WPNEP I, collectively the Netherlands Entities), and Warburg Pincus & Co., a New York general partnership (WP&Co., WPEP and each of the Netherlands Entities are each referred to herein as a Stockholder and collectively as the Stockholders).
WHEREAS, in order to induce Parent to enter into an Agreement and Plan of Merger, dated as of the date hereof (the Merger Agreement), with Transkaryotic Therapies, Inc., a Delaware corporation (the Company), and Sparta Acquisition Corporation, a Delaware corporation, Parent has requested the Stockholders, and the Stockholders have agreed, to enter into this Agreement with respect to all shares of common stock, par value $0.01 per share, of the Company that the Stockholders beneficially own (the Shares).
NOW, THEREFORE, the parties hereto agree as follows:
Section 1.01. Voting Agreement. Each Stockholder hereby agrees to vote all Shares that Stockholder is entitled to vote at the time of any vote or action by written consent to adopt the Merger Agreement and any actions related thereto at any meeting of the stockholders of the Company, and at any adjournment thereof, at which such Merger Agreement (or any amended version thereof), or such other actions, are submitted for the consideration and vote of the stockholders of the Company. Each Stockholder hereby agrees that it will not vote any Shares in favor of, or consent to, and will vote against and not consent to, the approval of any (i) Acquisition Proposal, (ii) reorganization, recapitalization, liquidation or winding-up of the Company or any other extraordinary transaction involving the Company, (iii) corporate action the consummation of which would prevent or delay the consummation of the transactions contemplated by the Merger Agreement or (iv) other matter relating to, or in connection with, any of the foregoing matters.
Section 1.02. Irrevocable Proxy. Each Stockholder hereby revokes any and all previous proxies granted with respect to the Shares. By entering into this Agreement, each Stockholder hereby grants a proxy appointing Parent as such Stockholders attorney-in-fact and proxy, with full power of substitution, for and in such Stockholders name, to vote, express, consent or dissent, or otherwise to utilize such voting power in the manner contemplated by Section 1.01. The proxy granted by each Stockholder pursuant to this ARTICLE 1 is irrevocable and is granted in consideration of Parent entering into this Agreement and the Merger Agreement and incurring certain related fees and expenses. The proxy granted by each Stockholder shall be automatically revoked upon termination of this Agreement in accordance with its terms.
ARTICLE 2
REPRESENTATIONS
AND WARRANTIES OF THE STOCKHOLDERS
Each Stockholder represents and warrants to Parent that:
Section 2.01. Authorization. The execution, delivery and performance by Stockholder of this Agreement and the consummation by Stockholder of the transactions contemplated hereby are within the powers of Stockholder and have been duly authorized by all necessary action. This Agreement constitutes a valid and binding agreement of Stockholder.
Section 2.02. Non-Contravention. The execution, delivery and performance by Stockholder of this Agreement and the consummation of the transactions contemplated hereby do not and will not (i) violate the partnership or limited partnership agreement of Stockholder, as applicable, (ii) assuming the filing of such reports as may be required under Sections 13(d) and 16 of the Securities Exchange Act of 1934, as amended (which reports each Stockholder agrees and covenants will be filed within the periods required by, and otherwise in compliance with, applicable law), violate any applicable law, rule, regulation, judgment, injunction, order or decree, (iii) require any consent or other action by any Person under, constitute a default under, or give rise to any right of termination, cancellation or acceleration or to a loss of any benefit to which Stockholder is entitled under any provision of any agreement or other instrument binding on Stockholder or (iv) result in the imposition of any Lien on any asset of Stockholder.
Section 2.03. Ownership of Shares. Stockholder is the record and beneficial owner of the Shares set forth under its name on the signature page hereto, free and clear of any Lien and any other limitation or restriction (including any restriction on the right to vote or otherwise dispose of the Shares). None of the Shares is subject to any voting trust or other agreement or arrangement with respect to the voting of such Shares.
Section 2.04. Total Shares. Except for the Shares set forth on the signature page hereto, Stockholder does not beneficially own any (i) shares of capital stock or voting securities of the Company, (ii) securities of the Company convertible into or exchangeable for shares of capital stock or voting securities of the Company or (iii) options or other rights to acquire from the Company any capital stock, voting securities or securities convertible into or exchangeable for capital stock or voting securities of the Company.
Section 2.05. Finders Fees. No investment banker, broker, finder or other intermediary is entitled to a fee or commission from Parent or the Company in respect of this Agreement based upon any arrangement or agreement made by or on behalf of Stockholder.
ARTICLE 3
REPRESENTATIONS
AND WARRANTIES OF PARENT
Parent represents and warrants to the Stockholders that:
Section 3.01. Authorization. The execution, delivery and performance by Parent of this Agreement and the consummation by Parent of the transactions contemplated hereby are within the corporate powers of Parent and have been duly authorized by all necessary corporate action. This Agreement constitutes a valid and binding agreement of Parent.
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Each Stockholder hereby covenants and agrees that:
Section 4.01. No Proxies for or Encumbrances on Shares. Except pursuant to the terms of this Agreement, Stockholder shall not, without the prior written consent of Parent, directly or indirectly, (i) grant any proxies or enter into any voting trust or other agreement or arrangement with respect to the voting of any Shares or (ii) sell, assign, transfer, encumber or otherwise dispose of, or enter into any contract, option or other arrangement or understanding with respect to the direct or indirect sale, assignment, transfer, encumbrance or other disposition of, any Shares during the term of this Agreement. Stockholder shall not seek or solicit any such sale, assignment, transfer, encumbrance or other disposition or any such contract, option or other arrangement or understanding and agrees to notify Parent promptly, and to provide all details requested by Parent, if Stockholder shall be approached or solicited, directly or indirectly, by any Person with respect to any of the foregoing.
Section 4.02. Other Offers. Subject to Section 5.12 herein, each Stockholder and its affiliates shall not, and shall use their reasonable best efforts to cause their officers, directors, employees or other agents not to, directly or indirectly, (i) take any action to solicit or initiate any Acquisition Proposal or (ii) engage in negotiations with, or disclose any nonpublic information relating to the Company or any of its Subsidiaries or afford access to the properties, books or records of the Company or any of its Subsidiaries to, any Person that may be considering making, or has made, an Acquisition Proposal or has agreed to endorse an Acquisition Proposal. Subject to Section 5.12 herein, Stockholder will promptly notify Parent after receipt of an Acquisition Proposal or any request for nonpublic information relating to the Company or any of its Subsidiaries or for access to the properties, books or records of the Company or any of its Subsidiaries by any Person that has made, or to Stockholders knowledge is intending to make, an Acquisition Proposal and will keep Parent informed, on a current basis, of the status and details of any such Acquisition Proposal or request.
Section 4.03. Appraisal Rights. Stockholder agrees not to exercise any rights (including, without limitation, under Section 262 of the General Corporation Law of the State of Delaware) to demand appraisal of any Shares which may arise with respect to the Merger.
Section 5.01. Definitional and Interpretative Provisions. The words hereof, herein and hereunder and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof. Any singular term in this Agreement shall be deemed to include the plural, and any plural term the singular. Whenever the words include, includes or including are used in this Agreement, they shall be deemed to be followed by the words without limitation, whether or not they are in fact followed by those words or words of like import. Writing, written and comparable terms refer to printing, typing and other means of reproducing words (including
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electronic media) in a visible form. References to any agreement or contract are to that agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof. References to any Person include the successors and permitted assigns of that Person.
Section 5.02. Further Assurances. Parent and the Stockholders will each execute and deliver, or cause to be executed and delivered, all further documents and instruments reasonably requested by Parent or the Stockholders, as applicable, and use their reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations, to consummate and make effective the transactions contemplated by this Agreement.
Section 5.03. Amendments; Termination. 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. This Agreement shall automatically terminate on the earlier to occur of (i) the Effective Time and (ii) the termination of the Merger Agreement.
Section 5.04. Expenses. All costs and expenses incurred in connection with this Agreement shall be paid by the party incurring such cost or expense.
Section 5.05. Successors and Assigns; Obligations of Stockholders. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided that no party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the consent of the other parties hereto, except that Parent may transfer or assign its rights and obligations to any Affiliate of Parent.
Section 5.06. Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State of Delaware.
Section 5.07. Counterparts; Effectiveness. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received counterparts hereof signed by the other party. Until and unless each party has received a counterpart hereof signed by the other party hereto, this Agreement shall have no effect and no party shall have any right or obligation hereunder (whether by virtue of any other oral or written agreement or other communication).
Section 5.08. Severability. If any term, provision or covenant of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions and covenants of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated.
Section 5.09. Specific Performance. The parties hereto agree that Parent would suffer irreparable damage in the event any provision of this Agreement is not performed in accordance with the terms hereof and that the parties shall be entitled to specific performance of the terms hereof in addition to any other remedy to which they are entitled at law or in equity.
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Section 5.10. Capitalized Terms. Capitalized terms used but not defined herein shall have the respective meanings set forth in the Merger Agreement.
Section 5.11. Notices. All notices, requests and other communications to any party hereunder shall be in writing (including facsimile transmission) and shall be given, if to Parent, as set forth in the Merger Agreement, and if to the Stockholders, to:
Warburg, Pincus Equity Partners, L.P.
Warburg, Pincus Netherlands Equity Partners I, C.V.
Warburg, Pincus Netherlands Equity Partners III, C.V.
Warburg Pincus & Co.
466 Lexington Avenue
New York, NY 10017
Attention: Jonathan S. Leff
Facsimile No.: (212) 878-9361
With a copy to (which shall not constitute notice):
Willkie Farr & Gallagher LLP
787 Seventh Avenue
New York, NY 10019
Attention: Steven J. Gartner, Esq.
Facsimile No.: (212) 728-8111
or to such other address or facsimile number as such party may hereafter specify for the purpose by notice to the other parties hereto. All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. on a Business Day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed to have been received on the next succeeding Business Day in the place of receipt
Section 5.12. Stockholder Capacity. Each Stockholder signs this Agreement solely in its capacity as the beneficial owner of the Shares set forth under its name on the signature page hereto, and nothing in this Agreement, including, without limitation, Section 4.02, shall prevent or in any way limit any officers, directors, employees or other agents of each Stockholder from taking any action in his or her capacity as a director or officer of the Company, including, without limitation, those actions permitted by Section 6.03 of the Merger Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.
SHIRE PHARMACEUTICALS GROUP PLC | |||
By: | /s/ Matthew Emmens | ||
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Name: | Matthew Emmens | ||
Title: | Chief Executive Officer | ||
WARBURG, PINCUS EQUITY PARTNERS, L.P. | |||
By: | Warburg Pincus Partners LLC, | ||
its General Partner | |||
By: | Warburg Pincus & Co., | ||
its Managing Member | |||
By: | /s/ | Scott Arenare | |
Name: Scott A. Arenare | |||
Title: Partner | |||
Number and Class of Shares Owned: 4,999,729 shares of common stock |
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WARBURG PINCUS & CO. | |||
By: | /s/ | Scott Arenare | |
Name: Scott A. Arenar | |||
Title: Partner | |||
Number and Class of Shares Owned: | |||
38,667 shares of common stock |
WARBURG, PINCUS NETHERLANDS
EQUITY PARTNERS I, C.V. |
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By: | Warburg Pincus Partners LLC, | ||
its General Partner | |||
By: Warburg Pincus & Co., its Managing Member |
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By: | /s/ Scott Arenare | ||
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Name: | Scott A. Arenar | ||
Title: | Partner | ||
Number and Class of Shares Owned: Shares of common stock included in 4,999,729 shares indicated above as owned by Warburg, Pincus Equity Partners, L.P. |
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WARBURG, PINCUS NETHERLANDS EQUITY PARTNERS III, C.V. |
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By: | Warburg Pincus Partners LLC, its General Partner |
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By: Warburg Pincus & Co., its Managing Member |
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By: | /s/ Scott Arenare | ||
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Name: | Scott A. Arenar | ||
Title: | Partner | ||
Number and Class of Shares
Owned: Shares of common stock included in 4,999,729 shares indicated above as owned by Warburg, Pincus Equity Partners, L.P. |
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