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): July 14, 2015
Celgene Corporation
(Exact name of registrant as specified
in its charter)
Delaware |
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001-34912 |
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22-2711928 |
(State or other jurisdiction
of incorporation) |
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(Commission
File Number) |
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(IRS Employer
Identification No.) |
86 Morris Avenue
Summit, New Jersey 07901
(Address of principal executive offices,
including zip code)
(908) 673-9000
(Registrant’s telephone number,
including area code)
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. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12) |
| x | Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01 Entry Into a Material Definitive Agreement.
Agreement and Plan of Merger
On July 14, 2015, Celgene Corporation, a Delaware corporation
(“Celgene”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Receptos, Inc.,
a Delaware corporation (“Receptos”), and Strix Corporation, a Delaware corporation and a wholly-owned subsidiary of
Celgene (“Acquisition Sub”), pursuant to which, among other things, subject to the terms and conditions of the Merger
Agreement, Acquisition Sub will commence a tender offer (the “Offer”) for all of the outstanding shares of common stock
of Receptos, par value $0.001 per share (the “Receptos Shares”), at a purchase price of $232.00 per Receptos Share,
net to the holder thereof in cash, subject to reduction for any applicable withholding taxes (the “Offer Price”). Following
the completion of the Offer and subject to the satisfaction or waiver of certain conditions set forth in the Merger Agreement,
Acquisition Sub will merge with and into Receptos, with Receptos surviving as a wholly-owned subsidiary of Celgene, pursuant to
the procedure provided for under Section 251(h) of the Delaware General Corporation Law without any stockholder approvals
(the “Merger”). At the effective time of the Merger (the “Effective Time”), each outstanding Receptos Share,
other than any shares owned by Acquisition Sub or any
stockholders who are entitled to and who properly exercise appraisal rights under Delaware law, will be automatically converted
into the right to receive an amount in cash equal to the Offer Price, without interest. The Celgene Board of Directors has, by
unanimous vote, approved the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement.
Subject to the terms and conditions of the
Merger Agreement, Receptos will take such action as may be necessary so that, at the Effective Time, each outstanding and
vested Receptos stock option will be cancelled and converted into the right to receive an amount in cash, if any, without
interest and less the amount of any withholding taxes, equal to the product of (A) the number of Receptos Shares
underlying such stock option and (B) an amount equal to (x) the Offer Price less (y) the per share exercise price of
such stock option. For unvested Receptos stock options and restricted stock units that are outstanding at the Effective Time and held by
employees, such amount does not become payable until the later of the Effective Time and December 31, 2015, subject to the
holder of the applicable unvested award remaining employed through the payment date (unless the holder of such award dies or
becomes disabled, such holder’s employment is terminated without cause or for good reason or such award is subject to
earlier vesting pursuant to the original terms thereof).
Acquisition Sub’s obligation to purchase Receptos
Shares validly tendered and not withdrawn pursuant to the Offer is subject to the satisfaction or waiver of various closing
conditions, including (i) the expiration or termination of any waiting period (and extensions thereof) applicable to the
transactions contemplated by the Merger Agreement under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
(“HSR Approval”), (ii) that the number of Receptos Shares validly tendered and not withdrawn in accordance
with the terms of the Offer, together with Receptos Shares then owned by Celgene, Acquisition Sub and their respective
wholly-owned subsidiaries, represents at least a majority of all then outstanding Receptos Shares (not including Receptos
Shares tendered pursuant to guaranteed delivery procedures unless and until such Receptos Shares are actually
“received” in accordance with the terms of the Offer), (iii) the absence of any law or order by any
governmental authority that would make illegal or otherwise prohibit the Offer, the acquisition of Receptos Shares by Celgene
or Acquisition Sub or the Merger, (iv) the accuracy of the representations and warranties of Receptos contained in
the Merger Agreement (subject to certain materiality standards), (v) Receptos’ material compliance with its
covenants contained in the Merger Agreement, (vi) there not having been a material adverse effect on Receptos following
the execution of the Merger Agreement that is continuing and (vii) other customary conditions.
The Merger Agreement contains customary representations, warranties
and covenants, including, among others, covenants obligating Receptos to continue to conduct its business in the ordinary course
during the period between the execution of the Merger Agreement and the closing and obligating Celgene and Receptos to use commercially
reasonable efforts to obtain required government approvals.
The Merger Agreement also includes covenants requiring Receptos
not to solicit, or enter into discussions with third parties relating to, alternative business combination transactions during
the period between the execution of the Merger Agreement and the closing, subject to fulfillment of certain fiduciary requirements
of the Receptos Board of
Directors (the “Receptos Board”) and, subject to
certain exceptions, not to withhold, withdraw, amend, modify or qualify in a manner adverse to Celgene the recommendation of the
Receptos Board that Receptos stockholders tender their Receptos Shares to Acquisition Sub pursuant to the Offer.
The Merger Agreement contains certain termination
rights, including the right of either party to terminate the Merger Agreement if the Offer is not consummated on or before
July 14, 2016 or in the event that HSR Approval is not obtained under certain circumstances, the right of Receptos to
terminate the Merger Agreement to accept a superior proposal for an alternative business combination (so long as Receptos
complies with certain notice and other requirements under the Merger Agreement) and the right of Celgene to terminate due to
a change of recommendation by the Receptos Board. Upon termination of the Merger Agreement by Receptos or Celgene upon
specified conditions, a termination fee of $230,000,000 may be payable by Receptos to Celgene. The Merger Agreement also provides
that Celgene will be required to pay Receptos a reverse termination fee of $400,000,000 and extend Receptos a loan in the
amount of $350,000,000 in the event that HSR Approval is not obtained under certain circumstances.
The foregoing description of the Merger Agreement is not complete
and is qualified in its entirety by reference to the Merger Agreement, a copy of which is attached to this report as Exhibit 2.1
and is incorporated herein by reference.
The Merger Agreement and the above description thereof have
been included to provide investors and stockholders with information regarding the terms of the agreement. They are not intended
to provide any other factual information about Receptos or Celgene or their respective subsidiaries or affiliates or stockholders.
The representations, warranties and covenants contained in the Merger Agreement were made only for purposes of the Merger Agreement
as of the specific dates therein, were solely for the benefit of the parties to the Merger Agreement, may be subject to limitations
agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating
contractual risk among the parties to the Merger Agreement instead of establishing these matters as facts, and may be subject to
standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors should
not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state
of facts or condition of the parties thereto or any of their respective subsidiaries or affiliates. Moreover, information concerning
the subject matter of representations and warranties may change after the date of the Merger Agreement, which subsequent information
may or may not be fully reflected in Receptos’ or Celgene’s public disclosures. Accordingly, investors should read
the representations and warranties in the Merger Agreement not in isolation but only in conjunction with the other information
about Receptos or Celgene and their respective subsidiaries that the respective companies include in reports, statements and other
filings they make with the U.S. Securities and Exchange Commission (the “SEC”).
Bridge Loan Facility Commitment Letter
In connection with the Merger Agreement, on July 14, 2015,
Celgene entered into a bridge loan facility commitment letter (the “Commitment Letter”) with JPMorgan Chase Bank,
N.A. and J.P. Morgan Securities LLC (the “Commitment Parties”), pursuant to which, among other things, the
Commitment Parties have committed to provide Celgene with an unsecured bridge loan facility in the amount of up to
$5,000,000,000 to finance, in part, the acquisition of Receptos (the “Financing”). The Commitment Parties’
commitment to provide the Financing is subject to various conditions, including (i) consummation of the Merger in accordance
with the Merger Agreement, (ii) the negotiation and execution of definitive documentation consistent with the Commitment
Letter, (iii) delivery of certain audited, unaudited and pro forma financial statements, (iv) the absence of a material
adverse effect on Receptos, (v) the accuracy of specified representations and warranties of Receptos in the Merger Agreement
and specified representations and warranties of Celgene to be set forth in the definitive loan documents, and (iv) other
customary closing conditions.
The foregoing description
of the Commitment Letter is not complete and is qualified in its entirety by reference to the Commitment Letter, a copy of which
is attached to this report as Exhibit 10.1 and is incorporated herein by reference.
Tender and Support Agreement
Concurrently with the execution of the Merger Agreement, William
H. Rastetter, Ph.D., Chairman of the Receptos Board, and Faheem Hasnain, Receptos’ President and Chief Executive Officer,
entered into a tender and support agreement with Celgene and Acquisition Sub (the “Support Agreement”), pursuant to
which each of them has agreed, among other things, to tender his Receptos Shares pursuant to the Offer. The Support Agreement will
terminate upon the earliest to occur of (i) the Effective Time, (ii) a change of recommendation of the Receptos Board, and (iii)
the date that the Merger Agreement is terminated in accordance with its terms.
The foregoing description
of the Support Agreement is not complete and is qualified in its entirety by reference to the Support Agreement, a copy of which
is attached to this report as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. |
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Description |
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2.1 |
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Agreement and Plan of Merger, dated as of July 14, 2015, among Celgene Corporation, Strix Corporation and Receptos, Inc.* |
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10.1 |
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Commitment Letter, dated as of July 14, 2015, among Celgene Corporation, JPMorgan Chase Bank, N.A. and J.P. Morgan Securities LLC. |
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99.1 |
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Tender and Support Agreement, dated as of July 14, 2015, among Celgene Corporation, Strix Corporation, Faheem Hasnain and William H. Rastetter. |
| * | Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. Celgene hereby agrees to furnish supplementally a
copy of any of the omitted schedules upon request by the U.S. Securities and Exchange Commission. |
Important Information
The Offer described herein
has not yet commenced. The description contained herein is for informational purposes only and is not an offer to buy or
the solicitation of an offer to sell any shares of Receptos. At the time the Offer is commenced, Celgene and Acquisition
Sub intend to file with the SEC a Tender Offer Statement on Schedule TO containing an offer
to purchase, a form of letter of transmittal and other documents relating to the Offer, and Receptos intends to file a Solicitation/Recommendation
Statement on Schedule 14D-9 with respect to the Offer. Celgene, Acquisition Sub
and Receptos intend to mail these documents to the stockholders of Receptos. THESE DOCUMENTS, AS EACH MAY BE AMENDED OR SUPPLEMENTED
FROM TIME TO TIME, WILL CONTAIN IMPORTANT INFORMATION ABOUT THE TENDER OFFER AND RECEPTOS STOCKHOLDERS ARE URGED TO READ THEM CAREFULLY
WHEN THEY BECOME AVAILABLE. Stockholders of Receptos will be able to obtain a free copy of these documents (when they become
available) and other documents filed by Receptos, Celgene or Acquisition Sub with
the SEC at the website maintained by the SEC at www.sec.gov.
Forward-Looking Statements
This communication contains forward-looking statements, which
are generally statements that are not historical facts. Forward-looking statements can be identified by the words “expects,”
“anticipates,” “believes,” “intends,” “estimates,” “plans,” “will,”
“outlook” and similar expressions. Forward-looking statements are based on management's current plans, estimates, assumptions
and projections, and speak only as of the date they are made. Celgene undertakes no obligation to update any forward-looking
statement in light of new information or future events, except as otherwise required by law. Forward-looking statements involve
inherent risks and
uncertainties, most of which are difficult to predict and are
generally beyond the control of Celgene, including the following:
(a) the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement;
(b) the inability to complete the transaction due to the failure to satisfy conditions to the transaction; (c) the risk that the
proposed transaction disrupts current plans and operations; (d) difficulties or unanticipated expenses in connection with integrating
Receptos into Celgene; (e) the risk that the acquisition does not perform as planned; and (f) potential difficulties in employee
retention following the closing of the transaction. Actual results
or outcomes may differ materially from those implied by the forward-looking statements as a result of the impact of a number of
factors, many of which are
discussed in more detail in Celgene’s public reports filed with the SEC.
SIGNATURES
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.
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CELGENE CORPORATION |
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Date: July 15, 2015 |
By: |
/s/ Peter N. Kellogg |
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Peter N. Kellogg |
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Executive Vice President and
Chief Financial Officer |
EXHIBIT INDEX
Exhibit No. |
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Description |
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2.1 |
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Agreement and Plan of Merger, dated as of July 14, 2015, among Celgene Corporation, Strix Corporation and Receptos, Inc.* |
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10.1 |
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Commitment Letter, dated as of July 14, 2015, among Celgene
Corporation, JPMorgan Chase Bank, N.A. and J.P. Morgan Securities LLC.
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99.1 |
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Tender and Support Agreement, dated as of July 14, 2015, among Celgene Corporation, Strix Corporation, Faheem Hasnain and William H. Rastetter. |
| * | Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. Celgene hereby agrees to furnish supplementally a
copy of any of the omitted schedules upon request by the U.S. Securities and Exchange Commission. |
Exhibit 2.1
Execution Copy
AGREEMENT AND PLAN OF MERGER
by and among
CELGENE CORPORATION,
STRIX CORPORATION
and
RECEPTOS, INC.
Dated as of July 14, 2015
TABLE OF CONTENTS
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Page |
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Article
I DEFINITIONS & INTERPRETATIONS |
2 |
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1.1 |
Certain Definitions |
2 |
1.2 |
Additional Definitions |
13 |
1.3 |
Certain Interpretations |
15 |
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Article
II THE OFFER |
16 |
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2.1 |
The Offer |
16 |
2.2 |
Company Actions |
20 |
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Article
III THE MERGER |
22 |
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3.1 |
The Merger |
22 |
3.2 |
The Effective Time |
23 |
3.3 |
The Closing |
23 |
3.4 |
Effect of the Merger |
23 |
3.5 |
Certificate of Incorporation and Bylaws |
23 |
3.6 |
Directors and Officers |
23 |
3.7 |
Effect on Capital Stock |
24 |
3.8 |
Exchange of Certificates |
27 |
3.9 |
No Further Ownership Rights in Company Common Stock |
29 |
3.10 |
Lost, Stolen or Destroyed Certificates |
30 |
3.11 |
Necessary Further Actions |
30 |
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Article
IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY |
30 |
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4.1 |
Organization and Qualification |
31 |
4.2 |
Capitalization |
31 |
4.3 |
Corporate Power; Enforceability |
33 |
4.4 |
Stockholder Approval |
34 |
4.5 |
Consents and Approvals; No Violation |
34 |
4.6 |
Reports; Financial Statements |
34 |
4.7 |
Absence of Certain Changes |
36 |
4.8 |
Schedule TO; Schedule 14D-9 |
36 |
4.9 |
Brokers; Certain Expenses |
36 |
4.10 |
Employee Benefit Matters/Employees |
37 |
4.11 |
Litigation |
39 |
4.12 |
Tax Matters |
39 |
4.13 |
Compliance with Law; No Default; Permits |
41 |
4.14 |
Environmental Matters |
41 |
4.15 |
Intellectual Property |
42 |
4.16 |
Property |
44 |
4.17 |
Material Contracts |
44 |
4.18 |
Regulatory Compliance |
47 |
4.19 |
Insurance |
48 |
TABLE
OF CONTENTS
(Continued)
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Page |
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4.20 |
Questionable Payments |
48 |
4.21 |
Related Party Transactions |
49 |
4.22 |
Opinion of Financial Advisor of the Company |
49 |
4.23 |
State Takeover Statutes Inapplicable |
49 |
4.24 |
Billing Arrangements |
49 |
4.25 |
No Other Representations or Warranties |
50 |
4.26 |
Disclaimer of Other Representations and Warranties |
50 |
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Article
V REPRESENTATIONS AND WARRANTIES OF PARENT AND ACQUISITION SUB |
50 |
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5.1 |
Organization and Qualification |
50 |
5.2 |
Authority for this Agreement |
50 |
5.3 |
Schedule TO; Schedule 14D-9 |
51 |
5.4 |
Consents and Approvals; No Violation |
51 |
5.5 |
Litigation |
52 |
5.6 |
Interested Stockholder |
52 |
5.7 |
Sufficient Funds |
52 |
5.8 |
Brokers |
52 |
5.9 |
Operations of Acquisition Sub |
52 |
5.10 |
No Other Representations or Warranties |
53 |
5.11 |
Disclaimer of Other Representations and Warranties |
53 |
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Article
VI COVENANTS OF THE COMPANY |
53 |
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6.1 |
Conduct of Business of the Company |
53 |
6.2 |
No Solicitation |
57 |
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Article
VII ADDITIONAL COVENANTS |
59 |
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7.1 |
Reasonable Best Efforts to Complete |
59 |
7.2 |
Antitrust Filings |
60 |
7.3 |
Merger |
61 |
7.4 |
Company Board Recommendation |
61 |
7.5 |
Public Statements and Disclosure |
63 |
7.6 |
Anti-Takeover Laws |
64 |
7.7 |
Access |
64 |
7.8 |
Section 16(b) Exemption |
65 |
7.9 |
Directors’ and Officers’ Indemnification and Insurance |
65 |
7.10 |
Employee Matters |
68 |
7.11 |
Obligations of Acquisition Sub |
70 |
7.12 |
Notification of Certain Matters |
70 |
7.13 |
Certain Litigation |
71 |
7.14 |
Compensation Arrangements |
71 |
7.15 |
Certain Tax Matters |
71 |
7.16 |
NASDAQ De-Listing; Exchange Act Deregistration |
72 |
7.17 |
Cooperation |
72 |
TABLE
OF CONTENTS
(Continued)
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Page |
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Article
VIII CONDITIONS TO THE MERGER |
73 |
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8.1 |
Conditions |
73 |
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Article
IX TERMINATION, AMENDMENT AND WAIVER |
74 |
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9.1 |
Termination Prior to the Acceptance Time |
74 |
9.2 |
Termination Before or After Acceptance Time and Prior to Effective
Time |
76 |
9.3 |
Notice of Termination; Effect of Termination |
76 |
9.4 |
Fees and Expenses |
76 |
9.5 |
Amendment |
79 |
9.6 |
Extension; Waiver |
79 |
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Article
X GENERAL PROVISIONS |
79 |
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10.1 |
Survival of Representations, Warranties and Covenants |
79 |
10.2 |
Notices |
79 |
10.3 |
Assignment |
80 |
10.4 |
Confidentiality |
80 |
10.5 |
Entire Agreement |
81 |
10.6 |
Third Party Beneficiaries |
81 |
10.7 |
Severability |
81 |
10.8 |
Remedies |
82 |
10.9 |
Governing Law |
82 |
10.10 |
Consent to Jurisdiction |
83 |
10.11 |
WAIVER OF JURY TRIAL |
84 |
10.12 |
Disclosure Letter References |
84 |
10.13 |
Counterparts |
84 |
10.14 |
No Recourse to Financing Sources |
84 |
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Exhibit A – Form of Support Agreement |
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Exhibit B – Amended and Restated Certificate of Incorporation |
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AGREEMENT AND PLAN
OF MERGER
THIS AGREEMENT AND
PLAN OF MERGER (this “Agreement”) is made and entered into as of July 14, 2015 by and among Celgene Corporation,
a Delaware corporation (“Parent”), Strix Corporation, a Delaware corporation and a direct wholly owned subsidiary
of Parent (“Acquisition Sub”), and Receptos, Inc., a Delaware corporation (the “Company”).
WITNESSETH:
WHEREAS, it is proposed
that Acquisition Sub shall commence a tender offer (the “Offer”) to acquire all of the outstanding shares (the
“Company Shares”) of Common Stock, par value $0.001 per share, of the Company (the “Company Common
Stock”) (other than the Cancelled Company Shares), at a price of $232.00 per Company Share, net to the holder thereof,
subject to reduction for any applicable withholding Taxes payable in respect thereof, in cash (such amount, or any different amount
per Company Share that may be paid pursuant to the Offer, being hereinafter referred to as the “Offer Price”),
all upon the terms and subject to the conditions set forth herein;
WHEREAS, it is also
proposed that, as soon as practicable following the consummation of the Offer, Acquisition Sub will merge with and into the Company
(the “Merger”) in accordance with the General Corporation Law of the State of Delaware (the “DGCL”)
and each Company Share that is not tendered and accepted pursuant to the Offer (other than Cancelled Company Shares and Dissenting
Company Shares) will thereupon be cancelled and converted into the right to receive cash in an amount equal to the Offer Price,
and the Company will survive the Merger as a wholly owned subsidiary of Parent, all upon the terms and subject to the conditions
set forth herein;
WHEREAS, the parties
intend for the Merger to be effected under Section 251(h) of the DGCL pursuant to the terms of this Agreement;
WHEREAS, the Company
Board has (i) determined that it is in the best interests of the Company and its stockholders to enter into, and approved
and declared advisable, this Agreement, (ii) approved the execution and delivery by the Company of this Agreement, the performance
by the Company of its covenants and agreements contained herein and the consummation of the Offer and the Merger upon the terms
and subject to the conditions contained herein, and (iii) resolved, subject to the terms and conditions set forth in this
Agreement, to recommend that the holders of Company Shares accept the Offer and tender their Company Shares to Acquisition Sub
pursuant to the Offer;
WHEREAS, the Board
of Directors of each of Parent and Acquisition Sub have (i) approved and declared advisable this Agreement, and (ii) approved
the execution and delivery by Parent and Acquisition Sub, respectively, of this Agreement, the performance by Parent and Acquisition
Sub, respectively, of their respective covenants and agreements contained herein and the consummation of the Offer and the Merger
upon the terms and subject to the conditions contained herein;
WHEREAS, as an inducement
and condition to Parent entering into this Agreement, certain stockholders of the Company are entering into a tender and support
agreement with Parent and Acquisition Sub simultaneously with the execution of this Agreement in substantially the form attached
hereto as Exhibit A (the “Support Agreement”), pursuant to which, among other things, such stockholders
have agreed, upon the terms and subject to the conditions set forth therein, to tender the Company Shares held by them in the
Offer and support the actions necessary to consummate the Merger; and
WHEREAS, Parent, Acquisition
Sub and the Company desire to make certain representations, warranties, covenants and agreements in connection with this Agreement
and the transactions contemplated hereby to prescribe certain conditions with respect to the consummation of the transactions
contemplated by this Agreement.
NOW, THEREFORE, in
consideration of the foregoing premises and the representations, warranties, covenants and agreements set forth herein, as well
as other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and accepted, and intending
to be legally bound hereby, Parent, Acquisition Sub and the Company hereby agree as follows:
Article I
DEFINITIONS & INTERPRETATIONS
1.1 Certain
Definitions. For all purposes of and under this Agreement, the following capitalized terms shall have the following
respective meanings:
“Acceptable
Confidentiality Agreement” shall mean an agreement that is executed, delivered and effective after the execution, delivery
and effectiveness of this Agreement, and which contains customary provisions that require any counter-party(ies) thereto (and
any of its (their) representatives named therein) that receive material non-public information of or with respect to the Company
to keep such information confidential; provided that such confidentiality provisions are no less restrictive in the aggregate
to such counter-party(ies) (and any of its (their) representatives named therein), and shall contain such other terms that are,
in the aggregate, no less favorable to the Company than the terms of the Confidentiality Agreement. Notwithstanding the foregoing,
an “Acceptable Confidentiality Agreement” shall not include any provision calling for any exclusive right to negotiate
with such party or having the effect of prohibiting the Company from satisfying its obligations hereunder.
“Acceptance
Time” shall mean the date and time of the initial irrevocable acceptance for payment by Acquisition Sub of Shares pursuant
to and subject to the conditions of the Offer.
“Acquisition
Proposal” shall mean any offer or proposal (other than an offer or proposal by Parent or Acquisition Sub) relating to
an Acquisition Transaction.
“Acquisition
Transaction” shall mean any transaction or series of related transactions (other than the transactions contemplated
by this Agreement) resulting in: (i) any purchase from, or acquisition by, any Person or “group” (as defined under
Section 13(d) of the Exchange Act and the rules and regulations thereunder) of more than a twenty percent (20%) interest in the
total outstanding voting securities of the Company or any tender offer or exchange offer that if consummated would result in any
Person or group (as defined under Section 13(d) of the Exchange Act and the rules and regulations thereunder) beneficially owning
twenty percent (20%) or more of the total outstanding voting securities of the Company; (ii) any merger, consolidation, business
combination or other similar transaction involving the Company or its Subsidiaries (A) pursuant to which any Person or “group”
(as defined in or under Section 13(d) of the Exchange Act), other than the Company Stockholders (as a group) immediately prior
to the consummation of such transaction, would hold Company Common Stock representing more than twenty percent (20%) of the voting
power of the surviving entity after giving effect to the consummation of such transaction or (B) as a result of which the
Company Stockholders (as a group) immediately prior to the consummation of such transaction would hold Company Common Stock representing
less than eighty percent (80%) of the voting power of the surviving entity after giving effect to the consummation of such transaction;
(iii) any sale, lease (other than in the ordinary course of business), exchange, transfer, license (other than in the ordinary
course of business), acquisition or disposition of more than twenty percent (20%) of the assets of the Company or its Subsidiaries
on a consolidated basis determined on a book-value basis, it being understood that voting securities of any Subsidiaries of the
Company are to be deemed assets of the Company; (iv) any license, collaboration, co-marketing or similar arrangement with any
third party in respect of any of the Company Products listed on Section 1.1(a) of the Company Disclosure Letter; or (v) any
liquidation or dissolution of the Company; provided, however, the Merger and the transactions contemplated hereby shall
not be deemed an Acquisition Transaction in any case.
“Affiliate”
shall mean, with respect to any Person, any other Person which directly or indirectly controls, is controlled by or is under common
control with such Person. For purposes of the immediately preceding sentence, the term “control” (including, with
correlative meanings, the terms “controlling,” “controlled by” and “under common control with”),
as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction
of the management and policies of such Person, whether through ownership of voting securities, by Contract or otherwise.
“Antitrust
Law” shall mean the Sherman Antitrust Act of 1890, as amended, the Clayton Act of 1914, as amended, the HSR Act, the
Federal Trade Commission Act, as amended, and all other Laws that are designed or intended to prohibit, restrict or regulate actions
having the purpose or effect of monopolization or restraint of trade or significant impediments or lessening of competition or
the creation or strengthening of a dominant position through merger or acquisition, in any case that are applicable to the transactions
contemplated by this Agreement.
“Business Day”
shall have the meaning given to such term in Rule 14d-1(g) under the Exchange Act.
“Code”
shall mean the Internal Revenue Code of 1986, as amended.
“Company Board”
shall mean the Board of Directors of the Company.
“Company Intellectual
Property Rights” shall mean all Intellectual Property Rights owned, used or held for use in, the operation of the Company’s
and its Subsidiaries’ respective businesses.
“Company Material
Adverse Effect” shall mean any change, condition, occurrence, effect, event, circumstance or development (each a “Change”,
and collectively, “Changes”), individually or in the aggregate, and taken together with all other Changes that
have occurred prior to the date of determination of the occurrence of the Company Material Adverse Effect, that (a) has had or
would reasonably be expected to have a material adverse effect on the business, assets, Liabilities, condition (financial or otherwise)
or results of operations of the Company and its Subsidiaries, taken as a whole, or (b) would reasonably be expected to prevent,
materially delay or materially impair the ability of the Company to consummate the Merger and the other transactions contemplated
by this Agreement; provided, however, that no Change (by itself or when aggregated or taken together with any and all other
Changes) directly or indirectly resulting from, attributable to or arising out of any of the following shall be deemed to be or
constitute a “Company Material Adverse Effect,” and no Change (by itself or when aggregated or taken together with
any and all other such Changes) directly or indirectly resulting from, attributable to or arising out of any of the following
shall be taken into account when determining whether a “Company Material Adverse Effect” has occurred, to the extent
such Changes do not disproportionately affect the Company and its Subsidiaries in any material respect relative to other companies
operating in any industry or industries in which the Company and its Subsidiaries operate in the events of (i) through (vi):
(i) general
economic conditions (or changes in such conditions) in the United States or any other country or region in the world, or conditions
in the global economy generally;
(ii) conditions
(or changes in such conditions) in the securities markets, capital markets, credit markets, currency markets or other financial
markets in the United States or any other country or region in the world, including (A) changes in interest rates in the United
States or any other country or region in the world and changes in exchange rates for the currencies of any countries and (B) any
suspension of trading in securities (whether equity, debt, derivative or hybrid securities) generally on any securities exchange
or over-the-counter market operating in the United States or any other country or region in the world;
(iii) conditions
(or changes in such conditions) in the industries in which the Company and its Subsidiaries conduct business;
(iv) political
conditions (or changes in such conditions) in the United States or any other country or region in the world or acts of war, sabotage
or terrorism (including any escalation or general worsening of any such acts of war, sabotage or terrorism) in the United States
or any other country or region in the world;
(v) earthquakes,
hurricanes, tsunamis, tornadoes, floods, mudslides, wild fires or other natural disasters, weather conditions and other force
majeure events in the United States or any other country or region in the world;
(vi) changes
in Law or other legal or regulatory conditions (or the interpretation thereof) or changes in GAAP or other accounting standards
(or the interpretation thereof);
(vii) the
announcement of, or the compliance with the express terms of, this Agreement, or the pendency or consummation of the transactions
contemplated hereby, including (A) the identity of Parent, (B) any departure or termination of any officers, directors, employees
or independent contractors of the Company or its Subsidiaries, (C) the termination or potential termination of (or the failure
or potential failure to renew or enter into) any Contracts with customers, suppliers, distributors or other business partners,
and (D) any other negative development (or potential negative development) in the Company’s relationships with any of its
customers, suppliers, distributors or other business partners;
(viii) data
derived from clinical trials being conducted by or on behalf of the Company or its Subsidiaries or the announcements thereof (but
not, in each case, the underlying cause of such data to the extent such cause relates to any Serious Adverse Event);
(ix) any
determination by, or delay of a determination by, the FDA or any other Governmental Authority, or any panel or advisory body empowered
or appointed thereby, or any indication that any such entity, panel or body will make any determination or delay in making any
determination, with respect to the approvability, labeling, contents of package insert, prescribing information, risk management
profile, CMC matters, pre-approval inspection matters or requirements relating to the results of any pre-clinical or clinical
testing sponsored by the Company, any of its competitors or any of their respective collaboration partners (but not, in each case,
the underlying cause of such determination or delay of a determination to the extent such cause relates to any Serious Adverse
Event);
(x) any
recommendations or statements published or proposed by any professional medical organization, Governmental Authority or panel
or advisory body empowered or appointed thereby, relating to products or product candidates of the Company or any of its competitors
(but not, in each case, the underlying cause of such recommendations or statements to the extent such cause relates to any Serious
Adverse Event);
(xi) any
actions taken or failure to take action, in each case, by Parent or any of its controlled Affiliates, or to which an officer of
Parent has consented, or which an officer of Parent has requested, or the taking of any action required by the express terms of
this Agreement, or the failure to take any action prohibited by the express terms of this Agreement;
(xii) changes
in the Company’s stock price or the trading volume of the Company’s stock, in and of itself, or any failure by the
Company to meet any estimates or expectations of the Company’s revenue, earnings or other financial performance or results
of operations for any period, in and of itself, or any failure by the Company to meet any internal
budgets, plans or forecasts
of its revenues, earnings or other financial performance or results of operations, in and of itself (but not, in each case, the
underlying cause of such changes or failures, unless such changes or failures would otherwise be excepted from this definition);
or
(xiii) any
Legal Proceedings made or brought by any of the current or former stockholders of the Company (on their own behalf or on behalf
of the Company) against the Company arising out of the Merger or in connection with any other transactions contemplated by this
Agreement.
“Company Options”
shall mean any options to purchase Company Shares outstanding under the Company Stock Plans.
“Company Preferred
Stock” shall mean the Preferred Stock, par value $0.001 per share, of the Company.
“Company Product”
shall mean any pharmaceutical product that is being researched, tested, developed, commercialized, manufactured, sold or distributed
by or on behalf of the Company or any of its Subsidiaries and that is owned by, licensed to, or otherwise used in the business
of, the Company or any of its Subsidiaries, or for which the Company or any of its Subsidiaries has the right to receive payment.
“Company Registered
Intellectual Property Rights” shall mean all of the Registered Intellectual Property Rights owned or purported to be
owned by the Company or any of its Subsidiaries.
“Company Restricted
Shares” shall mean any outstanding restricted Company Shares awarded pursuant to any Company Stock Plans.
“Company RSU
Award” shall mean any award of restricted stock units outstanding under the Company Stock Plans.
“Company Stock
Plans” shall mean the 2008 Stock Plan, as amended, and the 2013 Stock Incentive Plan.
“Company Stockholders”
shall mean holders of Company Shares in their capacity as such.
“Continuing
Employees” shall mean all employees of the Company or any of its Subsidiaries who, as of the Closing, continue their
employment with the Company or any of its Subsidiaries.
“Contract”
shall mean any legally binding contract, subcontract, agreement, arrangement, commitment, obligation, understanding, license,
sublicense, note, bond, mortgage, indenture, deed of trust, franchise, lease, sublease, loan, credit agreement or other instrument,
whether written or oral.
“Data Room”
shall mean that certain electronic datasite maintained by Merrill Corporation under the project name “Receptos” in
connection with the transactions contemplated by this Agreement as in effect at 4:00 p.m. (Eastern) on the date hereof.
“Delaware Law”
shall mean the DGCL and any other applicable Law (including common law) of the State of Delaware.
“DOJ”
shall mean the United States Department of Justice or any successor thereto.
“Domain Names”
shall mean domain names and uniform resource locators.
“Environmental
Law” shall mean all Laws relating in any way to the environment, preservation or reclamation of natural resources, the
presence, management or Release of, or exposure to, Hazardous Substances, or to human health and safety, including the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C. § 9601 et seq.), the Hazardous Materials Transportation
Act (49 U.S.C. § 5101 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. § 6901 et seq.),
the Clean Water Act (33 U.S.C. § 1251 et seq.), the Clean Air Act (42 U.S.C. § 7401 et seq.), the Safe
Drinking Water Act (42 U.S.C. § 300f et seq.), the Toxic Substances Control Act (15 U.S.C. § 2601 et seq.),
the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. § 136 et seq.) and the Occupational Safety and Health
Act (29 U.S.C. § 651 et seq.), each of their state and local counterparts or equivalents, each of their foreign and
international equivalents, and any transfer of ownership notification or approval statute, as each has been amended and the regulations
promulgated pursuant thereto.
“ERISA”
shall mean the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder,
or any successor statute, rules and regulations thereto.
“ERISA Affiliate”
shall mean, with respect to any entity, trade or business (whether or not incorporated), any other entity, trade or business (whether
or not incorporated) that is a member of a group described in Section 414(b), (c), (m) or (o) of the Code or Section 4001(b)(1)
of ERISA that includes the first entity, trade or business (whether or not incorporated), or that is a member of the same “controlled
group” as the first entity, trade or business (whether or not incorporated) pursuant to Section 4001(a)(14) of ERISA.
“Exchange Act”
shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder, or any successor
statute, rules and regulations thereto.
“FDA”
shall mean the United States Food and Drug Administration or any successor thereto.
“Financing”
shall mean any debt or equity financing or financings in connection with the transactions contemplated by this Agreement, including
any offering or private
placement of debt securities
or borrowing of loans and any related engagement letter and including any credit facilities or capital markets debt financing
or equity or equity-related offerings.
“Financing
Sources” shall mean the agents, arrangers, lenders and other entities that have committed to provide or arrange or otherwise
entered into agreements in connection with any Financing, including the parties to any commitment letter or engagement letter
in respect of any Financing or to any joinder agreements, indentures, credit agreements or other agreements entered pursuant thereto
or relating thereto, together with their Affiliates and the current, former or future officers, directors, employees, partners,
trustees, shareholders, equityholders, managers, members, limited partners, controlling persons, agents and representatives of
each of them and the successors and assigns of the foregoing Persons.
“FTC”
shall mean the United States Federal Trade Commission or any successor thereto.
“GAAP”
shall mean generally accepted accounting principles, as applied in the United States.
“Governmental
Authority” shall mean (i) any government, (ii) any governmental or regulatory entity, body, department, commission,
subdivision, board, administrative agency or instrumentality, (iii) any court, tribunal, judicial body, or an arbitrator or arbitration
panel, or (iv) any non-governmental self-regulatory agency, securities exchange, commission or authority, in each of (i)
through (iv) whether supranational, national, federal, state, county, municipal, provincial, and whether local or foreign. For
the avoidance of doubt, Governmental Authority includes the FDA and any other domestic or foreign entity that regulates or has
jurisdiction over the quality, identity, strength, purity, safety, efficacy, testing, manufacturing, marketing, distribution,
sale, storage, pricing, import or export of any Company Product.
“Hazardous
Substance” shall mean any material, substance or waste that is defined, classified, or otherwise characterized under
or pursuant to any Environmental Law as “hazardous”, “toxic”, a “pollutant”, a “contaminant”,
“radioactive” or words of similar meaning or effect, including petroleum and its by-products, asbestos, polychlorinated
biphenyls, radon, mold, urea formaldehyde insulation, silica, chlorofluorocarbons, and all other ozone-depleting substances.
“Health Care
Law” shall mean all Laws relating in any way to patient care and human health and safety, including such Laws pertaining
to: (i) the research, development, testing, production, manufacturing, marketing, transfer, distribution and sale of drugs, including
the United States Food, Drug and Cosmetic Act; (ii) the reimbursement and payment for drugs, including any United States federal
health care program (as such term is defined in 42 U.S.C. § 1320a-7b(f)), and arrangements between providers of health care
products or services that are paid for by any Governmental Authority or other Person, including the federal Anti-Kickback Statute
(42 U.S.C. § 1320a-7b(b)), the civil False Claims Act (31 U.S.C. § 3729 et seq.), the administrative False Claims
Law (42 U.S.C. § 1320a-7b(a)), Sections 1320a-7 and 1320a-7a of Title 42 of the United States Code, Medicare (Title XVIII
of the Social Security Act) and
Medicaid (Title XIX
of the Social Security Act); (iii) the privacy and security of patient-identifying health care information, including the Health
Insurance Portability and Accountability Act of 1996 (42 U.S.C. § 1320d et seq.) and (vi) the regulations promulgated
under each of the foregoing and similar applicable Laws of other Governmental Authorities.
“HSR Act”
shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder,
or any successor statute, rules and regulations thereto.
“IND”
shall mean an application submitted to any Governmental Authority to initiate human clinical investigations or trials with respect
to a product or therapy, including (i) an investigational new drug application or any successor application or procedure filed
with the FDA, or any foreign equivalent thereof, and (ii) all supplements and amendments that may be filed with respect to the
foregoing.
“Intellectual
Property” shall mean all intellectual property, regardless of form, including: (i) published and unpublished works of
authorship, including audiovisual works, collective works, computer programs, compilations, databases, derivative works, literary
works, maskworks, software and sound recordings (“Works of Authorship”); (ii) inventions and discoveries,
including articles of manufacture, business methods, compositions of matter, improvements, machines, methods, and processes and
new uses for any of the preceding items (“Inventions”); (iii) words, names, symbols, devices, designs and other
designations, and combinations of the preceding items, used to identify or distinguish a business, good, group, product or service
or to indicate a form of certification, including logos, product designs and product features (“Trademarks”);
(iv) trade secrets, know-how, technologies, processes, techniques, protocols, methods, formulae, product specifications, data,
algorithms, compositions, layouts, methodologies, ideas, research and development and confidential information (including technical
data, customer and supplier lists, pricing and cost information and business and marketing plans and proposals) (“Know-How”);
(v) software (including source code, executable code, systems, network tools, data, databases, firmware and related documentation)
(“Software”); (vi) Domain Names; (vii) improvements, derivatives, modifications, enhancements, revisions and
releases relating to any of the foregoing; and (viii) instantiations of any of the foregoing in any form and embodied in any media.
“Intellectual
Property Rights” shall mean all U.S. and foreign common law and statutory rights in, arising out of, or associated with
Intellectual Property in any jurisdiction, including (i) rights in, arising out of, or associated with Works of Authorship, including
rights granted under the U.S. Copyright Act or analogous foreign common law or statutory regime, including copyrights; (ii) rights
in, arising out of, or associated with Inventions, including rights granted under the U.S. Patent Act or analogous foreign common
law or statutory regime, including patents, utility models and inventors’ certificates and all disclosures, applications
reissues, divisionals, re-examinations, renewals, substitutions, revisions, extensions, provisionals, continuations and continuations-in-part
thereof ; (iii) rights in, arising out of, or associated with Trademarks, including rights granted under the Lanham Act or analogous
foreign common law or statutory regime; (iv) rights in, arising out of, or associated with Know-How,
including rights granted
under the Uniform Trade Secrets Act or analogous foreign common law or statutory regime; (v) rights in, arising out of, or associated
with Software; and (vi) all U.S. and foreign common law and statutory rights to sue or recover and retain damages, costs or attorneys’
fees for past, present or future infringement, misappropriation or other violation of any of the foregoing. For the avoidance
of doubt, Intellectual Property Rights include Registered Intellectual Property Rights.
“Intervening
Event” shall mean an event, change, effect, fact, condition, circumstance, development or occurrence that is material
to the Company and its Subsidiaries, taken as a whole, that was not known to, or reasonably foreseeable by, the Company Board
prior to the date of this Agreement, which event, change, effect, fact, condition, circumstance, development or occurrence becomes
known to the Company Board prior to the Acceptance Time and does not involve or relate to any Acquisition Proposal, fluctuation
in the market price or trading volume of the Company Shares, in and of itself, or any results of any clinical trials.
“IRS”
shall mean the United States Internal Revenue Service or any successor thereto.
“Knowledge”
of the Company, with respect to any matter in question, shall mean the actual knowledge of any of the individuals listed on Section
1.1(a) of the Company Disclosure Letter, after reasonable inquiry under the circumstances.
“Law”
shall mean any and all applicable federal, state, local, municipal, foreign or other law, statute, constitution, principle of
common law, ordinance, code, rule, regulation, ruling or other legal requirement issued, enacted, adopted, promulgated, implemented
or otherwise put into effect by or under the authority of any Governmental Authority.
“Legal Proceeding”
shall mean any (i) civil, criminal or administrative actions, suits, claims or charges, or (ii) litigations, arbitrations, oppositions,
interferences, reexaminations, investigations or other proceedings, in each of (i) and (ii) before any Governmental Authority.
“Liabilities”
shall mean any liability, obligation or commitment of any kind (whether accrued, absolute, contingent, matured, unmatured or otherwise
and whether or not required to be recorded or reflected on a balance sheet prepared in accordance with GAAP).
“Lien”
shall mean any lien, pledge, hypothecation, charge, mortgage, security interest, encumbrance, option, right of way, easement,
right of first or last offer, preemptive right or other restriction of similar nature (including any restriction on the transfer
of any security or other asset, any restriction on the possession, exercise or transfer of any other attribute of ownership of
any asset).
“NASDAQ”
shall mean The NASDAQ Global Market.
“Order”
shall mean any order, judgment, conciliation agreement, award, decision, decree, injunction, ruling, writ or assessment of any
Governmental Authority (whether
temporary, preliminary
or permanent) that is binding on any Person or its property under applicable Law.
“Permit”
shall mean franchises, grants, authorizations, establishment registrations, licenses, permits, easements, variances, exceptions,
consents, certificates, approvals and Orders of any Governmental Authority.
“Permitted
Liens” shall mean any of the following: (i) Liens for Taxes, assessments and governmental charges or levies either not
yet delinquent or which are being contested in good faith by appropriate proceedings and for which appropriate reserves have been
established on the consolidated financial statements of the Company and its Subsidiaries in accordance with GAAP; (ii) mechanics,
carriers’, workmen’s, warehouseman’s, repairmen’s, materialmen’s, landlords’ or other Liens
arising or incurred in the ordinary course of business relating to obligations as to which there is no default for a period greater
than sixty (60) days or that are being contested in good faith by appropriate proceedings and for which appropriate reserves have
been established on the consolidated financial statements of the Company and its Subsidiaries in accordance with GAAP; (iii) easements,
covenants and rights of way (unrecorded and of record) and other similar restrictions, zoning, entitlements, conservation, building
and other land use and environmental restrictions or regulations promulgated by Governmental Authorities, in each case that do
not materially adversely impact the current use of the affected property; (iv) Liens the existence of which are disclosed in the
notes to the consolidated financial statements of the Company included in the Company Form 10-K; (v) all exceptions, restrictions,
imperfections of title, charges and other Liens that do not materially adversely interfere with the present use of the subject
assets of the Company and its Subsidiaries, taken as a whole; (vi) Liens incurred in the ordinary course of business in connection
with workers’ compensation, unemployment insurance and other types of social security; (vii) with respect to leased
or licensed personal property or Intellectual Property, the written terms and conditions of the lease or license applicable thereto
to the extent made available to Parent; and (viii) Liens described in Section 1.1(b) of the Company Disclosure
Letter.
“Person”
shall mean any individual, corporation (including any non-profit corporation), general partnership, limited partnership, limited
liability partnership, joint venture, estate, trust, company (including any limited liability company or joint stock company),
firm or other enterprise, association, organization, entity or Governmental Authority.
“Registered
Intellectual Property Rights” shall mean all Intellectual Property Rights that are the subject of an application, certificate,
filing, registration, or other document issued by, filed with, or recorded by, any Governmental Authority in any jurisdiction.
“Regulatory
Condition” shall mean the conditions to the consummation of the Offer set forth in Annex A related to approvals
under the HSR Act.
“Release”
shall mean release, spill, emission, discharge, leaking, pouring, dumping, emptying, pumping, injection, deposit, disposal, dispersal,
leaching or migration into the indoor or outdoor environment (including soil, ambient air, surface water, groundwater and surface
or subsurface strata) or into or out of any property.
“representative”
shall mean, with respect to any Person, such Person’s directors, officers, employees, controlled Affiliates, advisors (including
attorneys, accountants, consultants, investment bankers and financial advisors), and other authorized agents or representatives
retained by such Person.
“Sarbanes-Oxley
Act” shall mean the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations promulgated thereunder, or
any successor statute, rules or regulations thereto.
“SEC”
shall mean the United States Securities and Exchange Commission or any successor thereto.
“Securities
Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder, or any
successor statute, rules or regulations thereto.
“Serious Adverse
Event” shall mean an adverse event that would require a report to the FDA pursuant to 21 C.F.R. 312.32(c)(1) or 21 C.F.R.
312.32(c)(2), or any foreign equivalent thereof.
“Subsidiary”
of any Person shall mean (i) a corporation more than fifty percent (50%) of the combined voting power of the outstanding voting
stock of which is owned, directly or indirectly, by such Person or by one or more other Subsidiaries of such Person or by such
Person and one or more other Subsidiaries thereof, (ii) a partnership of which such Person or one or more other Subsidiaries of
such Person or such Person and one or more other Subsidiaries thereof, directly or indirectly, is the general partner and has
the power to direct the policies, management and affairs of such partnership, (iii) a limited liability company of which such
Person or one or more other Subsidiaries of such Person or such Person and one or more other Subsidiaries thereof, directly or
indirectly, is the managing member and has the power to direct the policies, management and affairs of such company or (iv) any
other Person (other than a corporation, partnership or limited liability company) in which such Person or one or more other Subsidiaries
of such Person or such Person and one or more other Subsidiaries thereof, directly or indirectly, has at least a majority ownership
and power to direct the policies, management and affairs thereof.
“Superior Proposal”
shall mean an unsolicited, bona fide written Acquisition Proposal for an Acquisition Transaction made after the date hereof on
terms that the Company Board determines in good faith, after consultation with outside legal counsel and its financial advisor,
taking into account all financial, legal, regulatory and any other aspects of the transaction described in such proposal deemed
relevant by the Company Board, including the identity of the Person making such proposal, any break-up fees, expense reimbursement
provisions and conditions to consummation, as well as any Modified Terms proposed by Parent and Acquisition Sub in response to
such proposal or otherwise, to be more favorable to the Company Stockholders from a financial point of view than the terms of
the Merger and reasonably likely to receive all required governmental approvals and otherwise reasonably capable of being completed
on the terms proposed; provided, however, that for purposes of the reference to an “Acquisition Proposal”
in this definition of a “Superior Proposal,” all references
to (i) “more
than twenty percent (20%)” in the definition of “Acquisition Transaction” shall be deemed to be references to
“more than eighty percent (80%)” and (ii) “less than eighty percent (80%)” shall be deemed to be references
to “less than twenty percent (20%).”
“Tax”
shall mean any federal, state, local or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental, customs duties, capital stock, franchise, profits, withholding, social security,
unemployment, disability, real property, personal property, sales, use, transfer, registration, ad valorem, value added, alternative
or add-on minimum or estimated tax or other tax of any kind whatsoever imposed by any Governmental Authority, including any interest,
penalty or addition to tax imposed by any Governmental Authority, whether disputed or not.
“Tax Return”
shall mean any report, declaration, return, information return, claim for refund, or statement required to be filed with any Governmental
Authority relating to Taxes, including any schedule or attachment thereto, and including any amendments thereof and any documents
with respect to the extension of time to file any of the foregoing.
1.2 Additional
Definitions. The following capitalized terms shall have the respective meanings ascribed thereto in the respective sections
of this Agreement set forth opposite each of the capitalized terms below:
Term |
|
Section
Reference |
|
|
|
Accepted Company Shares |
|
3.7(a)(ii) |
Acquisition Sub |
|
Preamble |
Agreement |
|
Preamble |
Alternative Acquisition Agreement |
|
6.2(b) |
Anniversary Date |
|
3.7(d) |
Cancelled Company Shares |
|
3.7(a)(ii) |
Capitalization Date |
|
4.2(a) |
Certificate of Merger |
|
3.2 |
Certificates |
|
3.8(c) |
Change |
|
1.1 |
Change of Recommendation Notice |
|
7.4(b)(ii) |
Changes |
|
1.1 |
Closing |
|
3.3 |
Closing Date |
|
3.3 |
COBRA |
|
4.10(d) |
Company |
|
Preamble |
Company Board Recommendation |
|
7.4(a) |
Company Board Recommendation Change |
|
7.4(b) |
Company Common Stock |
|
Recitals |
Company Disclosure Letter |
|
Article IV |
Company Financial Advisor |
|
4.9 |
Company Form 10-K |
|
Article IV |
Company Plans |
|
7.10(b) |
Company SEC Reports |
|
4.6(a) |
Company Securities |
|
4.2(c) |
Company Shares |
|
Recitals |
Company Systems |
|
4.15(h) |
Company Termination Fee |
|
9.4(b)(i) |
Competing Acquisition Transaction |
|
9.4(b)(i) |
Confidentiality Agreement |
|
10.4 |
Current Company D&O Insurance |
|
7.9(c) |
DGCL |
|
Recitals |
Disclosed Transaction |
|
9.4(b) |
Dissenting Company Shares |
|
3.7(c)(i) |
Effective Time |
|
3.2 |
Environmental Permits |
|
4.14(b) |
Exchange Fund |
|
3.8(b) |
Expiration Time |
|
2.1(d)(i) |
FDA Permits |
|
4.18(b) |
Indemnified Persons |
|
7.9(a) |
Inventions |
|
1.1 |
Know-How |
|
1.1 |
Leased Real Property |
|
4.16(b) |
Material Contract |
|
4.17 |
Maximum Annual Premium |
|
7.9(c) |
Merger |
|
Recitals |
Merger Consideration |
|
3.7(a)(i) |
Minimum Condition |
|
2.1(a)(i) |
Modified Terms |
|
7.4(b) |
Multiemployer Plan |
|
4.10(c) |
New Plans |
|
7.10(b) |
Offer |
|
Recitals |
Offer Documents |
|
2.1(g)(i) |
Offer Price |
|
Recitals |
Offer to Purchase |
|
2.1(a) |
Option Consideration |
|
3.7(d) |
Parent |
|
Preamble |
Parent Termination Fee |
|
9.4(c) |
Patent Rights |
|
1.1 |
Payment Agent |
|
3.8(a) |
Plan |
|
4.10(a) |
Real Property Leases |
|
4.16(b) |
Restraint |
|
8.1(b) |
Restricted Share Consideration |
|
3.7(a)(i) |
RSU Consideration |
|
3.7(e) |
Schedule 14D-9 |
|
2.2(b) |
Schedule TO |
|
2.1(g)(i) |
Software |
|
1.1 |
Stockholder List Date |
|
2.2(c) |
Subsidiary Securities |
|
4.2(d) |
Support Agreement |
|
Recitals |
Surviving Corporation |
|
3.1 |
Termination Date |
|
9.1(b) |
Trademarks |
|
1.1 |
Uncertificated Shares |
|
3.8(c) |
Works of Authorship |
|
1.1 |
1.3 Certain
Interpretations.
(a) Unless
otherwise indicated, all references herein to Articles, Sections, Annexes, Exhibits or Schedules, shall be deemed to refer to
Articles, Sections, Annexes, Exhibits or Schedules of or to this Agreement, as applicable.
(b) Unless
otherwise indicated, the words “include,” “includes” and “including,” when used herein, shall
be deemed in each case to be followed by the words “without limitation.”
(c) The
table of contents and headings set forth in this Agreement are for convenience of reference purposes only and shall not affect
or be deemed to affect in any way the meaning or interpretation of this Agreement or any term or provision hereof.
(d) Unless
otherwise indicated, all references herein to the Subsidiaries of a Person shall be deemed to include all direct and indirect
Subsidiaries of such Person unless otherwise indicated or the context otherwise requires.
(e) Whenever
the context may require, any pronouns used in this Agreement shall include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns and pronouns shall include the plural, and vice versa.
(f) References
to “$” and “dollars” are to the currency of the United States of America.
(g) Any
dollar or percentage thresholds set forth herein shall not be used as a benchmark for the determination of what is or is not “material”
or a “Company Material Adverse Effect” under this Agreement.
(h) When
used herein, the word “extent” and the phrase “to the extent” shall mean the degree to which a subject
or other thing extends, and such word or phrase shall not simply mean “if.”
(i) The
parties hereto agree that they have been represented by counsel during the negotiation and execution of this Agreement and, therefore,
waive the application of any
Law, holding or rule
of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such
agreement or document.
(j) For
purposes of this Agreement, only information that was posted in the Data Room will be deemed to have been “made available”
by the Company to Parent.
Article II
THE OFFER
2.1 The
Offer.
(a) Terms
and Conditions of the Offer. Provided that this Agreement shall not have been terminated pursuant to Article IX,
as promptly as practicable after the date hereof (but in no event more than ten (10) Business Days thereafter), Acquisition Sub
shall (and Parent shall cause Acquisition Sub to) commence (within the meaning of Rule 14d-2 promulgated under the Exchange
Act) the Offer to purchase any and all of the Company Shares (other than the Cancelled Company Shares) at a price per Company
Share, subject to the terms of Section 2.1(c), equal to the Offer Price. The Offer shall be made by
means of an offer to purchase (the “Offer to Purchase”) that is disseminated to all of the Company Stockholders
and contains the terms and conditions set forth in this Agreement and in Annex A. Each of Parent and Acquisition
Sub shall use its reasonable best efforts to consummate the Offer, subject to the terms and conditions hereof and thereof. The
Offer shall be subject only to:
(i) the
condition (the “Minimum Condition”) that, prior to the expiration of the Offer, there be validly tendered and
not withdrawn in accordance with the terms of the Offer a number of Company Shares (not including Company Shares tendered pursuant
to guaranteed delivery procedures unless and until the Company Shares tendered pursuant to guaranteed delivery procedures are
actually “received” (as such term is defined in Section 251(h)(6)(d) of the DGCL) in accordance with the terms
of the Offer) that, together with the Company Shares then owned by Acquisition Sub (if any), represents at least a majority of
all then outstanding Company Shares; and
(ii) the
other conditions set forth in Annex A, as such conditions may be modified in accordance with this Agreement.
(b) Waiver
of Conditions. Acquisition Sub expressly reserves the right to waive any of the conditions to the Offer and to make any change
in the terms of or conditions to the Offer; provided, however, that notwithstanding the foregoing or anything
to the contrary set forth herein, without the prior written consent of the Company in its sole and absolute discretion, Acquisition
Sub may not (and Parent shall not permit Acquisition Sub to) (i) waive the Minimum Condition, the condition set forth in
clause (A) of Annex A, or the condition set forth in clause (C)(1) of Annex A, or (ii) make
any change in the terms of or conditions to the Offer that (A) changes the form of consideration to be paid in the Offer,
(B) decreases the Offer Price or the number of Company Shares sought in the Offer, other than in the manner required by Section
2.1(c), (C) extends the Offer, other than in a manner required or permitted by the provisions
of Section 2.1(d),
(D) imposes conditions to the Offer other than those set forth in Annex A, (E) modifies the conditions set
forth in Annex A or (F) amends any other term or condition of the Offer in any manner that is adverse to the
holders of Company Shares.
(c) Adjustments
to the Offer Price. Subject to the terms of this Agreement, the Offer Price shall be adjusted appropriately to reflect the
effect of any stock split, reverse stock split, stock dividend (including any dividend or distribution of securities convertible
into Company Common Stock), reclassification, combination, exchange of shares or other like change with respect to Company Common
Stock occurring on or after the date hereof and prior to the Acceptance Time.
(d) Expiration
and Extension of the Offer.
(i) Unless
the Offer is extended pursuant to and in accordance with this Agreement, the Offer shall expire at midnight, New York Time, on
the date that is twenty (20) Business Days after the date the Offer is first commenced (within the meaning of Rule 14d-2 promulgated
under the Exchange Act) (as such date and time may be extended, the “Expiration Time”). In the event
that the Offer is extended pursuant to and in accordance with this Agreement, then the Offer shall expire on the date and at the
time to which the Offer has been so extended.
(ii) Notwithstanding
the provisions of Section 2.1(d)(i) or anything to the contrary set forth in this Agreement, unless this Agreement
has been terminated in accordance with its terms:
(A) Acquisition
Sub shall extend the Offer for the minimum period required by any Law or Order, or any rule, regulation, interpretation or position
of the SEC or its staff or NASDAQ, in any such case that is applicable to the Offer;
(B) in
the event that any of the conditions to the Offer set forth on Annex A, other than the Minimum Condition, are not satisfied
or waived (if permitted hereunder) as of any then scheduled expiration of the Offer, Acquisition Sub may (and, if requested by
the Company, shall) extend the Offer for successive extension periods of up to fifteen (15) Business Days each (or any longer
period as may be approved in advance by the Company) in order to permit the satisfaction of all of the conditions to the Offer;
provided, however, that Acquisition Sub shall be required to extend the Offer pursuant to this clause (B) only
if such condition or conditions are capable of being satisfied on or before the Termination Date; and
(C) in
the event that all of the conditions to the Offer set forth on Annex A have been satisfied or waived (if permitted hereunder),
except that the Minimum Condition has not been satisfied, as of any then scheduled expiration of the Offer, Acquisition Sub shall
extend the Offer for an extension period of ten (10) Business Days (or any longer period as may be approved in advance by the
Company), it being understood and agreed that Acquisition Sub shall not be required to extend the Offer pursuant to this clause
(C) on more than two (2) occasions, but may, in its sole and absolute discretion, elect to do so;
provided, however,
that the foregoing clauses (A), (B) or (C) of this Section 2.1(d)(ii) shall not be deemed to impair, limit or otherwise
restrict in any manner the right of the parties to terminate this Agreement pursuant to the terms of Article IX.
(iii) Neither
Parent nor Acquisition Sub shall extend the Offer in any manner other than pursuant to and in accordance with the provisions of
Section 2.1(d)(ii) without the prior written consent of the Company.
(iv) Neither
Parent nor Acquisition Sub shall terminate or withdraw the Offer prior to the then scheduled expiration of the Offer without the
prior written consent of the Company or unless this Agreement is validly terminated in accordance with Article IX,
in which case Acquisition Sub shall (and Parent shall cause Acquisition Sub to) irrevocably and unconditionally terminate the
Offer promptly (but in no event more than one (1) Business Day) after such termination of this Agreement.
(e) Payment
for Company Shares. On the terms and subject to the satisfaction or waiver by Acquisition Sub of the conditions set forth
in this Agreement and the Offer as of the Expiration Time, Acquisition Sub shall (and Parent shall cause Acquisition Sub to) accept
for payment, and pay for, all Company Shares that are validly tendered and not withdrawn pursuant to the Offer promptly (within
the meaning of Section 14e-1(c) promulgated under the Exchange Act) after the Expiration Time (as it may be extended in accordance
with Section 2.1(d)(ii)). Without limiting the generality of the foregoing, Parent shall provide or
cause to be provided to Acquisition Sub on a timely basis the funds necessary to pay for any Company Shares that Acquisition Sub
becomes obligated to purchase pursuant to the Offer; provided, however, that without the prior written consent
of the Company, Acquisition Sub shall not accept for payment or pay for any Company Shares if, as a result, Acquisition Sub would
acquire less than the number of Company Shares necessary to satisfy the Minimum Condition. The Offer Price payable
in respect of each Company Share validly tendered and not withdrawn pursuant to the Offer shall be paid net to the holder thereof
in cash, subject to reduction for any withholding Taxes payable in respect thereof pursuant to applicable Law. The Company shall
register the transfer of Company Shares accepted for payment effective immediately after the Acceptance Time; provided that
Acquisition Sub pays for such Company Shares concurrently with such transfer.
(f) Subsequent
Offering Period. Subject to the last sentence of this Section 2.1(f), Acquisition Sub may (but shall not
be required to), and the Offer to Purchase shall reserve the right to, provide for a “subsequent offering period”
(within the meaning of Rule 14d-11 promulgated under the Exchange Act) of not less than three (3) nor more than twenty (20) Business
Days immediately following the expiration of the Offer. Subject to the terms and conditions of this Agreement and the
Offer, Acquisition Sub shall (and Parent shall cause Acquisition Sub to) accept for payment, and pay for, all Company Shares that
are validly tendered during the “subsequent offering period” promptly (within the meaning of Section 14e-1(c)
promulgated under the Exchange Act) after any such Company Shares are validly tendered during the “subsequent offering period.” Without
limiting the generality of the foregoing, Parent shall provide or cause to be provided to Acquisition Sub on a timely basis the
funds necessary to
pay for any Company
Shares that Acquisition Sub becomes obligated to purchase during such “subsequent offering period.” The
Offer Price payable in respect of each Company Share that is validly tendered during the “subsequent offering period”
shall be paid net to the holder thereof in cash, subject to reduction for any withholding Taxes payable in respect thereof pursuant
to applicable Law. Notwithstanding anything to the contrary set forth in this Agreement, Acquisition Sub shall not (and Parent
shall cause Acquisition Sub not to) commence any “subsequent offering period” after the Acceptance Time if the Merger
can be effected pursuant to Section 251(h) of the DGCL.
(g) Schedule
TO; Offer Documents. As soon as practicable on the date the Offer is first commenced (within the meaning of Rule 14d-2 promulgated
under the Exchange Act), Parent and Acquisition Sub shall:
(i) prepare
and file with the SEC a Tender Offer Statement on Schedule TO (together with all amendments and supplements thereto, and including
all exhibits thereto, the “Schedule TO”) with respect to the Offer in accordance with Rule 14d-3(a) promulgated
under the Exchange Act, which Schedule TO shall contain as an exhibit the Offer to Purchase and forms of the letter of transmittal
and summary advertisement, if any, and other required or customary ancillary documents, in each case, in respect of the Offer
(together with any supplements or amendments thereto, the “Offer Documents”);
(ii) deliver
a copy of the Schedule TO, including all exhibits thereto, to the Company at its principal executive offices in accordance with
Rule 14d-3(a) promulgated under the Exchange Act;
(iii) give
telephonic notice of the information required by Rule 14d-3 promulgated under the Exchange Act, and mail by means of first class
mail a copy of the Schedule TO, to NASDAQ in accordance with Rule 14d-3(a) promulgated under the Exchange Act; and
(iv) cause
the Offer Documents to be disseminated to all holders of Company Shares as and to the extent required by applicable Law (including
the Exchange Act).
(h) Parent
and Acquisition Sub shall cause the Schedule TO and the Offer Documents to comply as to form in all material respects with the
requirements of applicable Law. Subject to the provisions of Section 7.4, the Schedule TO and the Offer Documents may include
a description of the determinations, approvals and recommendations of the Company Board set forth in Section 2.2(a) and
Section 7.4(a) that relate to the Offer. The Company shall furnish in writing to Parent and Acquisition
Sub all information concerning the Company and its Subsidiaries that is required by applicable Laws or reasonably requested by
Parent or Acquisition Sub to be included in the Schedule TO or the Offer Documents so as to enable Parent and Acquisition Sub
to comply with their obligations under this Section 2.1(h). Parent, Acquisition Sub and the Company
shall cooperate in good faith to determine the information regarding the Company that is necessary to include in the Schedule
TO and the Offer Documents in order to satisfy applicable Laws. Each of Parent, Acquisition Sub and the Company shall
promptly correct any information provided by it or any of its respective directors, officers, employees,
Affiliates, agents or
other representatives for use in the Schedule TO or the Offer Documents if and to the extent such information shall have become
false or misleading in any material respect. Parent and Acquisition Sub shall take all steps necessary to cause the
Schedule TO and the Offer Documents, as so corrected, to be filed with the SEC and the other Offer Documents, as so corrected,
to be disseminated to the Company Stockholders, in each case as and to the extent required by applicable Laws, or by the SEC or
its staff or NASDAQ. Parent and Acquisition Sub shall provide the Company and its counsel a reasonable opportunity
to review and comment on the Schedule TO and the Offer Documents prior to the filing thereof with the SEC, and Parent and Acquisition
Sub shall give reasonable and good faith consideration to any comments made by the Company and its counsel (it being understood
that the Company and its counsel shall provide any comments thereon as soon as reasonably practicable). Parent and Acquisition
Sub shall provide in writing to the Company and its counsel any and all comments or other communications, whether written or oral,
that Parent, Acquisition Sub or their counsel may receive from the SEC or any other Governmental Authority or its staff with respect
to the Schedule TO and the Offer Documents promptly after such receipt, and Parent and Acquisition Sub shall provide the Company
and its counsel a reasonable opportunity to participate in the formulation of any response to any such comments of the SEC or
any other Governmental Authority or its staff (including by providing a reasonable opportunity for the Company and its counsel
to review and comment on any such response, which comments Parent and Acquisition Sub shall consider reasonably and in good faith).
2.2 Company
Actions.
(a) Company
Determinations, Approvals and Recommendations. The Company hereby approves and consents to the Offer and represents and warrants
to Parent and Acquisition Sub that, at a meeting duly called and held prior to the date hereof, the Company Board has, upon the
terms and subject to the conditions set forth herein, unanimously:
(i) determined
that this Agreement and the transactions contemplated hereby are advisable and fair to, and in the best interests of, the Company
and its stockholders;
(ii) assuming
the accuracy of the representations in Section 5.6, taken as of the date hereof, and determined to take at all times
on or prior to the Effective Time, all actions so that the restrictions contained in Section 203 of the DGCL applicable to “business
combinations” (as defined in Section 203(c) of the DGCL) are and will be inapplicable to the execution, delivery and performance
of this Agreement and the Support Agreement, and to the consummation of the Offer, the Merger and the other transactions contemplated
thereby;
(iii) approved
the execution and delivery by the Company of this Agreement, the performance by the Company of its covenants and agreements contained
herein and the consummation of the Offer and the Merger upon the terms and subject to the conditions contained herein; and
(iv) resolved
to recommend that the holders of Company Shares accept the Offer and tender their Company Shares to Acquisition Sub pursuant to
the Offer; provided,
however, that
such recommendation may be withheld, withdrawn, amended or modified solely in accordance with the terms of this Agreement.
The Company hereby represents
and warrants to Parent and Acquisition Sub that none of the foregoing resolutions of the Company Board have been amended, rescinded
or modified as of the date hereof. The Company hereby consents to the inclusion of the foregoing determinations and approvals
in the Offer Documents and, to the extent that the foregoing recommendation of the Company Board is not withheld, withdrawn, amended
or modified in accordance with this Agreement, the Company hereby consents to the inclusion of such recommendation in the Offer
Documents.
(b) Schedule
14D-9. The Company shall (i) file with the SEC, concurrently with the filing by Parent and Acquisition Sub of the Schedule TO
and the Offer Documents or as soon as reasonably practicable thereafter, a Solicitation/Recommendation Statement on Schedule 14D-9
(together with all amendments and supplements thereto, and including all exhibits thereto, the “Schedule 14D-9”)
containing, except as provided in Section 7.4(b), the Company Board Recommendation and a notice of appraisal rights in
accordance with Section 262 of the DGCL and (ii) take all steps necessary to disseminate the Schedule 14D-9 to the Company
Stockholders as and to the extent required by Rule 14d-9 promulgated under the Exchange Act and any other applicable U.S. federal
securities Laws. Prior to such filing and dissemination, the Company shall set the Stockholder List Date as the record date for
the purpose of receiving the notice required by Section 262(d)(2) of the DGCL. The Company shall cause the Schedule 14D-9 to comply
as to form in all material respects with the requirements of applicable Law. To the extent requested by the Company, Parent shall
cause the Schedule 14D-9 to be mailed or otherwise disseminated to the holders of Company Shares together with the Offer Documents.
Each of Parent and Acquisition Sub shall furnish in writing to the Company all information concerning Parent and Acquisition Sub
that is required by applicable Laws or reasonably requested by the Company to be included in the Schedule 14D-9 so as to enable
the Company to comply with its obligations under this Section 2.2(b). Parent, Acquisition Sub and the Company shall
cooperate in good faith to determine the information regarding the Company that is necessary to include in the Schedule 14D-9
in order to satisfy applicable Laws. Each of the Company, Parent and Acquisition Sub shall promptly correct any information provided
by it or any of its respective directors, officers, employees, Affiliates, agents or other representatives for use in the Schedule 14D-9
if and to the extent that such information shall have become false or misleading in any material respect. The Company shall take
all steps necessary to cause the Schedule 14D-9, as so corrected, to be filed with the SEC and disseminated to the Company
Stockholders, in each case as and to the extent required by applicable Laws. Unless the Company Board has effected a Company Board
Recommendation Change, the Company shall provide Parent, Acquisition Sub and their counsel a reasonable opportunity to review
and comment on the Schedule 14D-9 prior to the filing thereof with the SEC, and the Company shall give reasonable and good
faith consideration to any comments made by Parent, Acquisition Sub and their counsel (it being understood that Parent, Acquisition
Sub and their counsel shall provide any comments thereon as soon as reasonably practicable). Unless the Company Board has effected
a Company Board Recommendation Change, the Company shall provide in writing to Parent, Acquisition Sub and their counsel any comments
or other communications, whether
written or oral, the
Company or its counsel may receive from the SEC or its staff with respect to the Schedule 14D-9 promptly after such receipt,
and unless the Company Board has effected a Company Board Recommendation Change, the Company shall provide Parent, Acquisition
Sub and their counsel a reasonable opportunity to participate in the formulation of any response to any such comments of the SEC
or its staff (including by providing a reasonable opportunity for Parent, Acquisition Sub and their counsel to review and comment
on any such response, which comments the Company shall consider reasonably and in good faith).
(c) Company
Information. In connection with the Offer, the Company shall, or shall cause its transfer agent to, furnish Parent and Acquisition
Sub with such assistance and such information as Parent or its agents may reasonably request in order to disseminate and otherwise
communicate the Offer to the record and beneficial holders of Company Shares, including a list, as of the most recent practicable
date, of the stockholders of the Company, mailing labels and any available listing or computer files containing the names and
addresses of all record and beneficial holders of Company Shares, and lists of security positions of Company Shares held in stock
depositories (including updated lists of stockholders, mailing labels, listings or files of securities positions) (the date of
the list used to determine the Persons to whom the Offer Documents and Schedule 14D-9 are first disseminated, the “Stockholder
List Date”). Subject to applicable Laws, and except for such steps as are necessary to disseminate the Offer Documents
and any other documents necessary to consummate the Merger, Parent and Acquisition Sub (and their respective agents) shall:
(i) hold
in confidence the information contained in any such lists of stockholders, mailing labels and listings or files of securities
positions;
(ii) use
such information only in connection with the Offer and the Merger and only in the manner provided in this Agreement; and
(iii) if
(A) this Agreement shall be terminated pursuant to Article IX, and (B) Parent and Acquisition Sub shall
withdraw the Offer, promptly return (and shall use their respective reasonable best efforts to cause their agents to deliver)
to the Company any and all copies and any extracts or summaries from such information then in their possession or control.
Article III
THE MERGER
3.1 The
Merger. Upon the terms and subject to the conditions set forth in this Agreement and the applicable provisions of the
DGCL, at the Effective Time, Acquisition Sub shall be merged with and into the Company, the separate corporate existence of Acquisition
Sub shall thereupon cease and the Company shall continue as the surviving corporation of the Merger. The Merger shall be effected
under Section 251(h) of the DGCL and shall be effected as soon as practicable following the Acceptance Time. The Company, as the
surviving corporation of the Merger, is sometimes referred to herein as the “Surviving Corporation.”
3.2 The
Effective Time. Upon the terms and subject to the conditions set forth in this Agreement, on the Closing Date, Parent,
Acquisition Sub and the Company shall cause the Merger to be consummated under the DGCL by filing a certificate of merger in such
form as required by, and executed in accordance with, the DGCL (the “Certificate of Merger”) with the Secretary
of State of the State of Delaware (the time and day of such filing and acceptance by the Secretary of State of the State of Delaware,
or such later time and day as may be agreed in writing by Parent, Acquisition Sub and the Company and specified in the Certificate
of Merger, being referred to herein as the “Effective Time”).
3.3 The
Closing. The consummation of the Merger shall take place at a closing (the “Closing”) to occur at
the offices of Latham & Watkins LLP, 650 Town Center Drive, 20th Floor, Costa Mesa, California 92626, as promptly as practicable
following the Acceptance Time, and in any case no later than the second (2nd) Business Day after the satisfaction of
the last to be satisfied of the conditions set forth in Article VIII (other than those conditions that, by their nature,
are to be satisfied at the Closing, but subject to the satisfaction (or waiver, if permitted by applicable Law) of those conditions),
or at such other location, date and time as Parent, Acquisition Sub and the Company shall mutually agree upon in writing. The
date upon which the Closing shall actually occur pursuant hereto is referred to herein as the “Closing Date.”
3.4 Effect
of the Merger. At the Effective Time, the effect of the Merger shall be as provided in this Agreement and the applicable
provisions of the DGCL. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time all of the
property, rights, privileges, powers and franchises of the Company and Acquisition Sub shall vest in the Surviving Corporation,
and all debts, Liabilities and duties of the Company and Acquisition Sub shall become the debts, Liabilities and duties of the
Surviving Corporation.
3.5 Certificate
of Incorporation and Bylaws.
(a) Certificate
of Incorporation. At the Effective Time, subject to the provisions of Section 7.9(a), the certificate of incorporation
of the Company shall be amended and restated in its entirety to read in the form attached hereto as Exhibit B, and such
amended and restated certificate of incorporation shall be the certificate of incorporation of the Surviving Corporation until
thereafter amended in accordance with the applicable provisions of the DGCL and such certificate of incorporation (subject to
the provisions of Section 7.9(a)).
(b) Bylaws.
At the Effective Time, subject to the provisions of Section 7.9(a), the bylaws of Acquisition Sub, as in effect immediately
prior to the Effective Time, shall become the bylaws of the Surviving Corporation until thereafter amended in accordance with
the applicable provisions of the DGCL, the certificate of incorporation of the Surviving Corporation and such bylaws (subject
to the provisions of Section 7.9(a)).
3.6 Directors
and Officers.
(a) Directors.
The parties hereto shall take all necessary action to cause the directors of Acquisition Sub immediately prior to the Effective
Time to be, effective as of the Effective Time, appointed as the sole members of the board of directors of the Surviving
Corporation, each to
hold office in accordance with the certificate of incorporation and bylaws of the Surviving Corporation until their respective
successors are duly elected or appointed and qualified or their earlier death, resignation or removal.
(b) Officers.
The parties hereto shall take all necessary action to cause the individuals designated by Parent to be, effective as of the Effective
Time, appointed as the sole officers of the Surviving Corporation, each to hold office in accordance with the certificate of incorporation
and bylaws of the Surviving Corporation until their respective successors are duly appointed and qualified or their earlier death,
resignation or removal.
3.7 Effect
on Capital Stock.
(a) Capital
Stock. Upon the terms and subject to the conditions set forth in this Agreement, at the Effective Time, by virtue of the Merger
and without any action on the part of Parent, Acquisition Sub, the Company, or the holders of any of the following securities,
the following shall occur:
(i) Company
Common Stock. Each share of Company Common Stock that is outstanding immediately prior to the Effective Time (including each
Company Restricted Share, but excluding (A) Cancelled Company Shares, (B) Accepted Company Shares and (C) any Dissenting
Company Shares) shall be automatically converted into the right to receive cash in an amount equal to the Offer Price (the “Merger
Consideration”), without interest thereon, upon the surrender of the certificate representing such share of Company
Common Stock in the manner provided in Section 3.8 (or in the case of a lost, stolen or destroyed certificate, upon
delivery of an affidavit in the manner provided in Section 3.10). Notwithstanding the foregoing, within three (3)
Business Days after the Closing, with respect to each Company Restricted Share outstanding immediately prior to the Effective
Time, Parent shall pay by wire transfer of immediately available funds to the Surviving Corporation, and Parent shall cause the
Surviving Corporation to pay to the holders of such Company Restricted Shares, the applicable Merger Consideration (such consideration,
in the aggregate, the “Restricted Share Consideration”), less any applicable withholding Taxes payable in respect
thereof, as promptly as practicable (and in no event later than the next regular payroll date) thereafter.
(ii) Excluded
Company Common Stock. Each share of Company Common Stock (A) owned by Parent, Acquisition Sub or the Company, or by any direct
or indirect wholly owned Subsidiary of Parent, Acquisition Sub or the Company, in each case immediately prior to the commencement
of the Offer (“Cancelled Company Shares”), or (B) irrevocably accepted for purchase pursuant to the Offer (“Accepted
Company Shares”), shall be cancelled and extinguished without any conversion thereof or further consideration paid therefor.
(iii) Capital
Stock of Acquisition Sub. Each share of common stock, par value $0.01 per share, of Acquisition Sub that is outstanding immediately
prior to the Effective Time shall be converted into one validly issued, fully paid and nonassessable share of common stock of
the Surviving Corporation. Each certificate evidencing ownership of such
shares of common stock
of Acquisition Sub shall thereafter evidence ownership of shares of common stock of the Surviving Corporation.
(b) Adjustment
to the Merger Consideration. Subject to the terms of this Agreement, the Merger Consideration shall be adjusted appropriately
to reflect the effect of any stock split, reverse stock split, stock dividend (including any dividend or distribution of securities
convertible into Company Common Stock), reclassification, combination, exchange of shares or other like change with respect to
Company Common Stock occurring on or after the date hereof and prior to the Effective Time.
(c) Statutory
Rights of Appraisal.
(i) Notwithstanding
anything to the contrary set forth in this Agreement, all Company Shares that are issued and outstanding immediately prior to
the Effective Time and held by Company Stockholders who shall have neither voted in favor of the Merger nor consented thereto
in writing and who shall have properly and validly perfected their statutory rights of appraisal in respect of such Company Shares
in accordance with Section 262 of the DGCL (collectively, “Dissenting Company Shares”) shall not be converted
into, or represent the right to receive, the Merger Consideration pursuant to Section 3.7(a),
but instead will be entitled to only such rights as are granted by Section 262 of the DGCL to a holder of Dissenting Company Shares,
except that all Dissenting Company Shares held by Company Stockholders who shall have failed to perfect or who shall have effectively
withdrawn or lost their rights to appraisal of such Dissenting Company Shares under such Section 262 of the DGCL shall no
longer be considered to be Dissenting Company Shares and shall thereupon be deemed to have been converted into, and to have become
exchangeable for, as of the Effective Time, the right to receive the Merger Consideration, without interest thereon, upon surrender
of the certificate or certificates that formerly evidenced such Company Shares in the manner provided in Section 3.8.
(ii) The
Company shall give Parent (A) prompt notice of any demands for appraisal received by the Company, withdrawals of such demands,
and any other instruments served pursuant to Delaware Law and received by the Company in respect of Dissenting Company Shares
and (B) the opportunity to direct all negotiations and proceedings with respect to demands for appraisal under Delaware Law
in respect of Dissenting Company Shares. Prior to the Effective Time, the Company shall not, except with the prior written consent
of Parent, voluntarily make any payment with respect to any demands for appraisal, or settle or offer to settle any such demands
for payment, in respect of Dissenting Company Shares.
(d) Company
Options. At the Effective Time, each outstanding Company Option, whether vested or unvested or exercisable or unexercisable
under the Company Stock Plans, shall, automatically and without any required action on the part of the holder thereof, be cancelled
and converted into only the right to receive (without interest), an amount in cash (such consideration, in the aggregate, the
“Option Consideration”), less applicable Tax withholdings, equal to (i) for each Company Option that is vested
and exercisable as of the Effective Time, the product of (A) the excess, if any, of (1) the Offer Price over (2) the exercise
price per share of
such Company Option,
and (B) the number of Company Shares underlying such Company Option, payable in a lump sum as soon as reasonably practicable (but
no later than the first payroll period) after the Effective Time and (ii) for each Company Option that is not vested as of the
Effective Time, an amount in cash equal to the product of (A) the excess, if any, of (1) the Offer Price over (2) the exercise
price per share of such Company Option, and (B) the number of Company Shares underlying such Company Option, payable no later
than the second payroll period after the applicable vesting date of such former Company Option, provided that such cash
amount shall remain subject to the same vesting schedule as in effect immediately before the Effective Time with respect to the
unvested former Company Option, and the holder of such former Company Option must remain in service to Parent, the Company, the
Surviving Corporation or any of their respective Affiliates through the applicable vesting date to receive payment in respect
thereof; provided, further, that (w) to the extent such cash amount remains unvested as of December 31, 2015 (the
“Anniversary Date”) and such holder remains in service with Parent, the Company, the Surviving Corporation
or any of their respective Affiliates, such amount shall vest on the Anniversary Date, and shall be paid no later than the Anniversary
Date or (x) shall vest in full earlier if the former Company Option holder’s service to Parent, the Company, the Surviving
Corporation or any of their respective Affiliates terminates without Cause (as defined below), for Good Reason (as defined below)
or due to such holder’s death or disability, in any case, prior to the Anniversary Date, in which case payment of the then-unvested
cash amounts herein shall be made by no later than the second payroll period after the date of such termination of employment.
The foregoing payment shall be determined and interpreted in a manner intended to be exempt from Section 409A. Notwithstanding
the foregoing, (y) any unvested Company Option held by an individual who is a non-employee member of the Company Board at the
Effective Time shall become vested and exercisable in full upon the Effective Time and will be treated in accordance with Section
3.7(d)(i) and (z) in the event the Effective Time occurs after the Anniversary Date, any unvested Company Option shall become
vested and exercisable in full upon the Effective Time and will be treated in accordance with Section 3.7(d)(i). For the
avoidance of doubt, if the exercise price per share of any Company Option, whether vested or unvested or exercisable or unexercisable
as of the Effective Time, is equal to or greater than the Offer Price, then by virtue of the occurrence of the Effective Time
and without any action on the part of Parent, Acquisition Sub, the Company, the Surviving Corporation or the holders thereof,
the Company Option will automatically terminate and be canceled without payment of any consideration to the holder thereof. “Cause”
and “Good Reason” shall have the respective meanings ascribed to such terms (or similar terms, such as “Constructive
Termination”) in the applicable Company Option holder’s employment agreement with the Company or, if there is no employment
agreement or such employment agreement does not define such terms, “Cause” and “Good Reason” shall have
the respective meanings ascribed to such terms in the Company’s Change in Control Severance Plan as in effect immediately
before the date hereof.
(e) Company
RSU Awards. At the Effective Time, each outstanding Company RSU Award, whether vested or unvested, shall, automatically and
without any required action on the part of the holder thereof, be cancelled and converted into only the right to receive (without
interest), an amount in cash (such consideration, in the aggregate, the “RSU Consideration”), less applicable
Tax withholdings, payable as soon as reasonably practicable
(but no later than the
first payroll period) after the later of the Effective Time or the date such former Company RSU Award (or the relevant portion
thereof) vests, equal to the product of (A) the Offer Price, and (B) the number of Company Shares underlying such Company RSU
Award immediately prior to the Effective Time; provided that any such RSU Consideration shall remain subject to the same
vesting schedule as in effect immediately before the Effective Time with respect to the former Company RSU Award and the holder
of such former Company RSU Award must remain in service to Parent, the Company, the Surviving Corporation or any of their respective
Affiliates through the applicable vesting date to receive payment in respect thereof; provided, further, that (w)
to the extent such cash amount remains unvested as of the Anniversary Date, such cash amount shall vest on the Anniversary Date
and shall be paid no later than the Anniversary Date or (x) such cash amount shall vest in full earlier if the former Company
RSU holder’s service to Parent, the Company, the Surviving Corporation or any of their respective Affiliates terminates
without Cause, for Good Reason, death or disability, in any case, prior to the Anniversary Date in which case payment of the amounts
herein shall be made by no later than the second payroll period after the date of such termination. Notwithstanding the foregoing,
(y) any unvested Company RSU Award held by an individual who is a non-employee member of the Company Board at the Effective Time
shall become vested in full upon the Effective Time and the RSU Consideration will be paid in a lump sum as soon as reasonably
practicable (but no later than the first payroll period) after the Effective Time and (z) in the event the Effective Time occurs
after the Anniversary Date, any unvested Company RSU Award shall become vested in full upon the Effective Time and the RSU Consideration
will be paid in a lump sum as soon as reasonably practicable (but no later than the first payroll period) after the Effective
Time.
(f) Additional
Actions. As soon as reasonably practicable following the date hereof, and in any event prior to the Effective Time, the Company
Board (or, if appropriate, any authorized committee) shall adopt such resolutions and take such other actions as may be required
to effectuate all of the actions contemplated by this Section 3.7, contingent on the Closing of the Merger.
3.8 Exchange
of Certificates.
(a) Payment
Agent. Prior to the Acceptance Time, Parent shall select a bank or trust company reasonably acceptable to the Company to act
as the payment agent for the Merger (the “Payment Agent”).
(b) Exchange
Fund. At the Closing, Parent shall deposit (or cause to be deposited) with the Payment Agent, for payment to the holders of
Company Shares pursuant to the provisions of this Article III, an amount of cash equal to the aggregate consideration
to which holders of Company Common Stock are entitled under this Article III (which, for the avoidance of doubt, shall
not include the Option Consideration, RSU Consideration or Restricted Share Consideration). Until disbursed in accordance with
the terms and conditions of this Agreement, such funds shall be invested by the Payment Agent, as directed by Parent or the Surviving
Corporation, in obligations of or guaranteed by the United States of America or obligations of an agency of the
United States of America
which are backed by the full faith and credit of the United States of America (such cash amount being referred to herein as the
“Exchange Fund”). Any interest and other income resulting from such investments shall be paid to Parent. No
investment or losses thereon shall affect the consideration to which holders of Company Common Stock are entitled under this Article III
and to the extent that there are any losses with respect to any investments of the Exchange Fund, or the Exchange Fund diminishes
for any reason below the amount required to promptly pay in full the cash amounts contemplated by this Article III,
Parent shall, or shall cause the Surviving Corporation to, promptly replace or restore the cash in the Exchange Fund so as to
ensure that the Exchange Fund is at all times maintained at a level sufficient to make in full such payments contemplated by this
Article III.
(c) Payment
Procedures. Promptly following the Effective Time, Parent and the Surviving Corporation shall cause the Payment Agent to mail
to each holder of record (as of immediately prior to the Effective Time and in each case other than holders of Company Restricted
Shares) of (i) a certificate or certificates (the “Certificates”) which immediately prior to the Effective
Time represented outstanding Company Shares and (ii) uncertificated Company Shares (the “Uncertificated Shares”),
in each case, whose shares were converted into the right to receive the Merger Consideration pursuant to Section 3.7
(A) a letter of transmittal in customary form (which shall specify that delivery shall be effected, and risk of loss and
title to the Certificates shall pass, only upon delivery of the Certificates to the Payment Agent), and (B) instructions
for use in effecting the surrender of the Certificates and Uncertificated Shares in exchange for the Merger Consideration payable
in respect thereof pursuant to the provisions of this Article III. Upon surrender of Certificates for cancellation
to the Payment Agent, together with such letter of transmittal, duly completed and validly executed in accordance with the instructions
thereto, the holders of such Certificates shall be entitled to receive in exchange therefor an amount in cash equal to the product
obtained by multiplying (x) the aggregate number of Company Shares represented by such Certificate that were converted into
the right to receive the Merger Consideration pursuant to Section 3.7, by (y) the Merger Consideration (less
any applicable withholding Tax pursuant to Section 3.8(e)), and the Certificates so surrendered shall forthwith be canceled.
Upon receipt of an “agent’s message” by the Payment Agent (or such other evidence, if any, of transfer as the
Payment Agent may reasonably request) in the case of a book-entry transfer of Uncertificated Shares, the holders of such Uncertificated
Shares shall be entitled to receive in exchange therefor an amount in cash equal to the product obtained by multiplying (x) the
aggregate number of Company Shares represented by such holder’s transferred Uncertificated Shares that were converted into
the right to receive the Merger Consideration pursuant to Section 3.7, by (y) the Merger Consideration (less
any applicable withholding Tax pursuant to Section 3.8(e)), and the transferred Uncertificated Shares so surrendered shall
forthwith be canceled. The Payment Agent shall accept such Certificates and transferred Uncertificated Shares upon compliance
with such reasonable terms and conditions as the Payment Agent may impose to effect an orderly exchange thereof in accordance
with normal exchange practices. No interest shall be paid or accrued for the benefit of holders of the Certificates and Uncertificated
Shares on the Merger Consideration payable upon the surrender of such Certificates and Uncertificated Shares pursuant to this
Section 3.8. Until so surrendered, outstanding Certificates and Uncertificated Shares shall be deemed, from and after
the Effective Time, to evidence only the right to receive the Merger Consideration, without interest thereon, payable in respect
thereof pursuant to the provisions of this Article III.
(d) Transfers
of Ownership. In the event that a transfer of ownership of Company Shares is not registered in the stock transfer books or
ledger of the Company, or if the Merger Consideration is to be paid in a name other than that in which the Certificates or Uncertificated
Shares surrendered in exchange therefor are registered in the stock transfer books or ledger of the Company, the Merger Consideration
may be paid to a Person other than the Person in whose name the Certificate or Uncertificated Share so surrendered is registered
in the stock transfer books or ledger of the Company only if such Certificate or Uncertificated Shares is properly endorsed and
otherwise in proper form for surrender and transfer and the Person requesting such payment has paid to Parent (or any agent designated
by Parent) any transfer Taxes required by reason of the payment of the Merger Consideration to a Person other than the registered
holder of such Certificate or Uncertificated Shares, or established to the reasonable satisfaction of Parent (or any agent designated
by Parent) that such transfer Taxes have been paid or are otherwise not payable.
(e) Required
Withholding. Each of the Payment Agent, Parent, Acquisition Sub and the Surviving Corporation shall be entitled to deduct
and withhold from any cash amounts payable pursuant to this Agreement such amounts as are required to be deducted or withheld
therefrom under applicable Law. To the extent that such amounts are so deducted, withheld and remitted to the applicable Governmental
Authority, such amounts shall be treated for all purposes under this Agreement as having been paid to the Person to whom such
amounts would otherwise have been paid.
(f) No
Liability. Notwithstanding anything to the contrary set forth in this Agreement, none of the Payment Agent, Parent, Acquisition
Sub, the Surviving Corporation or any other party hereto shall be liable to a holder of Company Shares in respect of any amounts
that would otherwise have been payable in respect of any Certificates or Uncertificated Shares from the Exchange Fund delivered
to a public official pursuant to any applicable abandoned property, escheat or similar Law.
(g) Distribution
of Exchange Fund to Parent. Any portion of the Exchange Fund (including any interest or other amounts earned with respect
thereto) that remains undistributed to the holders of the Certificates or Uncertificated Shares on the date that is nine (9) months
after the Effective Time shall be delivered to Parent upon demand, and any holders of Company Shares who have not theretofore
surrendered their Certificates or Uncertificated Shares representing such Company Shares that were issued and outstanding immediately
prior to the Effective Time for exchange pursuant to the provisions of this Section 3.8 shall thereafter look for
payment of the Merger Consideration payable in respect of the Company Shares represented by such Certificates or Uncertificated
Shares solely to Parent, as general creditors thereof, for any claim to the applicable Merger Consideration to which such holders
may be entitled pursuant to the provisions of this Article III.
3.9 No
Further Ownership Rights in Company Common Stock. From and after the Effective Time, all Company Shares shall no longer
be outstanding and shall automatically be cancelled, retired and cease to exist, and each holder of a Certificate or Uncertificated
Shares theretofore representing any Company Shares shall, subject to Section 3.7(c)(i), cease to have
any rights with respect
thereto, except the right to receive the Merger Consideration payable therefor upon the surrender thereof in accordance with the
provisions of Section 3.8. The Merger Consideration paid in accordance with the terms of this Article III
shall be deemed to have been paid in full satisfaction of all rights pertaining to such shares of the Company Common Stock.
At the Effective Time, the stock transfer books of the Surviving Corporation shall be closed, and thereafter there shall be no
further registration of transfers on the records of the Surviving Corporation of Company Shares that were issued and outstanding
immediately prior to the Effective Time, other than transfers to reflect, in accordance with customary settlement procedures,
trades effected prior to the Effective Time. If, after the Effective Time, Certificates or Uncertificated Shares are presented
to the Surviving Corporation for any reason, they shall be canceled and exchanged as provided in this Article III.
3.10 Lost,
Stolen or Destroyed Certificates. In the event that any Certificates shall have been lost, stolen or destroyed, the Payment
Agent shall issue in exchange for such lost, stolen or destroyed Certificates, upon the making of an affidavit of that fact by
the holder thereof, in the form and substance reasonably satisfactory to the Surviving Corporation, and the posting by such holders
of a bond in customary and reasonable amount and upon such terms as may reasonably be required by Parent as indemnity against
any claim that may be made against it with respect to such Certificate, the Merger Consideration payable in respect thereof pursuant
to Section 3.7.
3.11 Necessary
Further Actions. As of the Effective Time, the officers and directors of Parent and the Surviving Corporation will be
authorized to execute and deliver, in the name and on behalf of the Company and Acquisition Sub, any deeds, bills of sale, assignments
or assurances and to take and do, in the name and on behalf of the Company and Acquisition Sub, any other actions and things to
vest, perfect or confirm of record or otherwise in the Surviving Corporation any and all right, title and interest in, to and
under any of the rights, properties or assets acquired or to be acquired by the Surviving Corporation as a result of, or in connection
with, the Merger.
Article IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except (i) as disclosed
in the letter delivered by the Company to Parent on the date of this Agreement (the “Company Disclosure Letter”),
or (ii) as disclosed in the Annual Report on Form 10-K of the Company for the fiscal year ended December 31, 2014 (the “Company
Form 10-K”) and in any Company SEC Reports filed with or furnished to the SEC by the Company since January 1, 2015 and
publicly disseminated via the SEC’s EDGAR service prior to the date hereof (other than in any “risk factor”
disclosure or any other forward-looking, cautionary or predictive statements set forth therein and provided that nothing in such
Company SEC Reports shall be deemed to modify or qualify the representations and warranties set forth in Section 4.2 and
Section 4.3), the Company hereby represents and warrants to Parent and Acquisition Sub as follows:
4.1 Organization
and Qualification.
(a) The
Company and each of its Subsidiaries is duly organized and validly existing and in good standing (to the extent such concepts
are recognized in the applicable jurisdiction) under the Laws of its jurisdiction of incorporation, with all corporate power and
authority to own, lease and operate its properties and conduct its business as currently conducted, except in the case of the
Company’s Subsidiaries for such failures to be in good standing or have such power that would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect. The Company and each of its Subsidiaries is duly
qualified and in good standing as a foreign corporation authorized to do business in each of the jurisdictions in which the character
of the properties owned or held under lease by it or the nature or conduct of the business transacted by it makes such qualification
necessary, except for such failures to be so qualified and in good standing that would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect.
(b) The
Company has heretofore made available to Parent true, correct and complete copies of the certificate of incorporation and bylaws
(or similar governing documents) as currently in effect for the Company and each of its Subsidiaries. The Company and each of
its Subsidiaries is in compliance in all material respects with the provisions of its certificate of incorporation and bylaws
(or similar governing documents). Section 4.1(b) of the Company Disclosure Letter sets forth a true, correct and complete
list of each Subsidiary of the Company, the authorized and outstanding capital stock of each Subsidiary of the Company and the
jurisdiction of organization of each Subsidiary of the Company. Neither the Company nor any of its Subsidiaries, directly or indirectly,
owns any interest in any Person other than the Company’s Subsidiaries.
4.2 Capitalization.
(a) The
authorized capital stock of the Company consists of 200,000,000 shares of Company Common Stock and 10,000,000 shares of Company
Preferred Stock. At the close of business on July 13, 2015 (the “Capitalization Date”), (i) 31,604,369 shares
of Company Common Stock were issued and outstanding (including 113,603 Company Restricted Shares); (ii) no shares of Company Preferred
Stock were issued and outstanding; (iii) no shares of Company Common Stock were held by the Company in its treasury; (iv) an aggregate
of 1,077,208 shares of Company Common Stock remained available for issuance under the Company Stock Plans, excluding shares underlying
outstanding awards, and (v) under the Company Stock Plans, there were outstanding Company Options to purchase 2,007,379 shares
of Company Common Stock and outstanding Company RSU Awards with respect to 376,612 shares of Company Common Stock. Except as set
forth in the preceding sentence, at the close of business on the Capitalization Date, no Company Securities or other voting securities
of or equity interests in the Company were issued, reserved for issuance or outstanding. From the Capitalization Date until and
including the date hereof, the Company has not issued any shares of its capital stock, has not granted any options, restricted
stock, restricted stock units, stock appreciation rights, warrants or rights or entered into any other agreements or commitments
to issue any shares of its capital stock, or granted any other awards in respect of any shares of its capital stock and has not
split, combined or reclassified any of its shares of capital stock. No purchase or other rights have been granted or are otherwise
outstanding under the Company’s
Employee Stock Purchase
Plan, adopted by the Company effective as of immediately prior to the closing of the Company’s initial public offering.
(b) Section
4.2(b) of the Company Disclosure Letter contains a true, correct and complete list, as of the date hereof, of the name of
each holder of Company Options, Company Restricted Shares and Company RSU Awards, the number of outstanding Company Options, Company
Restricted Shares and Company RSU Awards held by such holder, the grant date of each such Company Option, Company Restricted Share
and Company RSU Award, the number of Company Shares such holder is entitled to receive upon the exercise of each Company Option
and the corresponding exercise price, the expiration date of each Company Option, the vesting schedule of each such Company Option,
Company Restricted Share and Company RSU Award and the Company Stock Plan pursuant to which each such Company Option, Company
Restricted Share or Company RSU Award was granted. Except as set forth on Section 4.2(b) of the Company Disclosure Letter,
each Company Option, Company Restricted Share and Company RSU Award grant was made in accordance in all material respects with
the terms of the applicable Company Stock Plan and applicable Law. No Company Option (i) has an exercise price that has been
or may be less than the fair market value of the underlying equity as of the date such Company Option was granted or (ii) has
any feature for the deferral of compensation other than the deferral of recognition of income until the later of exercise or disposition
of such Company Option.
(c) Except
for the Company Options, the Company Restricted Shares and the Company RSU Awards, there are no outstanding (A) securities
of the Company convertible into or exchangeable for shares of capital stock or voting securities or ownership interests in the
Company, (B) options, calls, warrants, rights or other agreements or commitments requiring the Company to issue, or other
obligations of the Company to issue, any capital stock, voting securities or other ownership interests in (or securities convertible
into or exchangeable for capital stock or voting securities or other ownership interests in) the Company (or, in each case, the
economic equivalent thereof), (C) obligations of the Company to grant, extend or enter into any subscription, warrant, right,
convertible or exchangeable security or other similar agreement or commitment relating to any capital stock, voting securities
(including voting debt) or other ownership interests in the Company, (D) restricted shares, restricted stock units, stock appreciation
rights, performance shares or units, contingent value rights, “phantom” stock or similar securities or rights issued
by the Company that are derivative of, or provide economic benefits based, directly or indirectly, on the value or price of, any
shares of capital stock or voting securities of, or other ownership interests in, the Company (the items in clauses (A),
(B), (C) and (D), together with the Company Common Stock, Company Preferred Stock, Company Restricted Shares,
Company Options and Company RSU Awards, being referred to collectively as “Company Securities”) or (E) obligations
of the Company or any of its Subsidiaries to make any payments based on the price or value of the Company Shares. There are no
outstanding obligations of the Company or any of its Subsidiaries to purchase, redeem or otherwise acquire any Company Securities.
There are no voting trusts or other agreements or understandings to which the Company or any of its Subsidiaries is a party with
respect to the voting of capital stock of the Company. All outstanding securities of the Company have been duly authorized, offered
and validly issued in compliance in all material respects with all applicable Laws, including the
Securities Act and “blue
sky” Laws, are fully paid and nonassessable and are free of preemptive rights. There are no bonds, debentures, notes or
other indebtedness of the Company having the right to vote (or convertible into, or exchangeable for, securities having the right
to vote) on any matters on which holders of Company Shares may vote.
(d) The
Company or another of its Subsidiaries is the record and beneficial owner of all the outstanding shares of capital stock of each
Subsidiary of the Company, free and clear of any Lien (other than Permitted Liens), and there are no irrevocable proxies with
respect to any such shares. There are no outstanding (i) securities of the Company or any of its Subsidiaries convertible
into or exchangeable for shares of capital stock or other voting securities or ownership interests in any Subsidiary of the Company,
(ii) options, restricted stock, calls, warrants, rights or other agreements or commitments to acquire from the Company or
any of its Subsidiaries, or obligations of the Company or any of its Subsidiaries to issue, any capital stock, voting securities
or other ownership interests in (or securities convertible into or exchangeable for capital stock or voting securities or other
ownership interests in) any Subsidiary of the Company, (iii) obligations of the Company or any of its Subsidiaries to grant, extend
or enter into any subscription, warrant, right, convertible or exchangeable security or other similar agreement or commitment
relating to any capital stock, voting securities (including voting debt) or other ownership interests in any Subsidiary of the
Company (the items in clauses (i), (ii) and (iii), together with the capital stock of such Subsidiaries,
being referred to collectively as “Subsidiary Securities”) or (iv) obligations of the Company or any of its
Subsidiaries to make any payment based on the value of any shares of any Subsidiary of the Company. There are no outstanding obligations
of the Company or any of its Subsidiaries to purchase, redeem or otherwise acquire any outstanding Subsidiary Securities. There
are no voting trusts or other agreements or understandings to which the Company or any of its Subsidiaries is a party with respect
to the voting of capital stock of any Subsidiary of the Company. All outstanding securities of each Subsidiary of the Company
have been duly authorized, offered and validly issued in compliance in all material respects with all applicable Laws, including
the Securities Act and “blue sky” Laws, are fully paid and nonassessable and are free of preemptive rights.
4.3 Corporate
Power; Enforceability. The Company has all requisite corporate power and authority to execute and deliver this Agreement,
to perform its covenants and obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery
by the Company of this Agreement, the performance by the Company of its covenants and obligations hereunder and the consummation
by the Company of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action
on the part of the Company, and no additional corporate proceedings or actions on the part of the Company are necessary to authorize
the execution and delivery by the Company of this Agreement, the performance by the Company of its covenants and obligations hereunder
or the consummation of the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by
the Company and, assuming the due authorization, execution and delivery by Parent and Acquisition Sub, constitutes a legal, valid
and binding obligation of the Company, enforceable against the Company in accordance with its terms, except that such enforceability
(a) may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other
similar Laws affecting
or relating to creditors’ rights generally, and (b) is subject to general principles of equity.
4.4 Stockholder
Approval. The affirmative vote of the holders of a majority of the outstanding Company Shares is the only vote of the holders
of any class or series of the Company’s capital stock that, absent Section 251(h) of the DGCL, would have been necessary
under applicable Law and the Company’s certificate of incorporation and bylaws to adopt, approve or authorize this Agreement
and consummate the Merger and other transactions contemplated hereby in their capacity as stockholders of the Company.
4.5 Consents
and Approvals; No Violation. Neither the execution, delivery and performance of this Agreement by the Company nor the consummation
of the transactions contemplated hereby will (a) violate or conflict with or result in any breach of any provision of the
respective certificate of incorporation or bylaws (or other similar governing documents) of the Company or any of its Subsidiaries,
(b) require any Permit of, or filing with or notification to, any Governmental Authority except (i) as may be required under
the HSR Act, (ii) the applicable requirements of any federal or state securities Laws, including compliance with the Exchange
Act and the rules and regulations promulgated thereunder, (iii) the filing of the Certificate of Merger as required by the
DGCL or (iv) the applicable requirements of NASDAQ, (c) violate, conflict with, or result in a breach of any provisions of,
or require any notice, consent, waiver or approval or result in a default or loss of any material rights (or give rise to any
right of termination, cancellation, modification or acceleration or any event that, with the giving of notice, the passage of
time or otherwise, would constitute a default or give rise to any such right) under any of the terms, conditions or provisions
of any Contract or obligation to which the Company or any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries or any of their respective assets may be bound, (d) result in the creation or imposition of any Lien on any
asset of the Company or any of its Subsidiaries (other than Permitted Liens) or (e) violate any Law or Order applicable to
the Company or any of its Subsidiaries or by which any of their respective assets are bound.
4.6 Reports;
Financial Statements.
(a) Since
May 8, 2013, the Company has timely filed or furnished all reports, schedules, forms, statements and other documents
required to be filed or furnished by it with the SEC (the “Company SEC Reports”), all of which have
complied as of their respective filing dates or, if amended or superseded by a subsequent filing, as of the date of the last
such amendment or superseding filing made at least
two (2) Business Days prior to the date hereof, in all material respects with all applicable requirements of the Securities Act,
the Exchange Act and the Sarbanes-Oxley Act and, in each case, the rules and regulations of the SEC promulgated thereunder. No
executive officer of the Company has failed in any respect to make the certifications required of him or her under Section 302
or 906 of the Sarbanes-Oxley Act with respect to any Company SEC Report. None of the Company SEC Reports, including any financial
statements or schedules included or incorporated by reference therein, at the time filed or at the time such Company SEC Report
became effective, as applicable, or, if amended or superseded by a subsequent filing, as of the date of the last such amendment
or superseding
filing made at least two (2) Business Days prior to the date hereof, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. As of the date of this Agreement, (i) to the Knowledge
of the Company, none of the Company SEC Reports is the subject of ongoing SEC review or outstanding SEC investigation and (ii)
there are no outstanding or unresolved comments in comment letters received from the SEC staff with respect to the Company SEC
Reports. None of the Company’s Subsidiaries is required to file periodic reports with the SEC pursuant to the Exchange Act.
(b) The
audited and unaudited consolidated financial statements (including the related notes thereto) of the Company included (or incorporated
by reference) in the Company SEC Reports (i) complied as to form in all material respects with the published rules and regulations
of the SEC with respect thereto, (ii) have been prepared in accordance with GAAP (except as may be indicated in the notes thereto)
applied on a consistent basis throughout the periods involved and (iii) fairly present in all material respects the consolidated
financial position of the Company and its Subsidiaries as of their respective dates, and the consolidated income, stockholders
equity, results of operations and changes in consolidated financial position or cash flows for the periods presented therein (subject,
in the case of the unaudited financial statements, to the absence of footnotes and normal year-end audit adjustments that are
not material in amount). The books of account and other financial records of the Company and each of its Subsidiaries are true
and complete in all material respects.
(c) Except
to the extent reflected or reserved against in the most recent consolidated balance sheet of the Company (or the notes thereto)
included in the Company SEC Reports, the Company and its Subsidiaries do not have any Liabilities of any nature, except Liabilities
that (i) were incurred since the date of such balance sheet in the ordinary course of business, (ii) would not, individually or
in the aggregate, reasonably be expected to have a Company Material Adverse Effect or (iii) have been incurred in connection with
the performance by the Company of its obligations under this Agreement or the transactions contemplated hereby.
(d) The
Company has established and maintained a system of internal control over financial reporting (as defined in Rule 13a-15 under
the Exchange Act). Such internal controls are sufficient to provide reasonable assurance regarding the reliability of the Company’s
financial reporting and the preparation of Company financial statements for external purposes in accordance with GAAP. Since January
1, 2013, the Company’s principal executive officer and principal financial officer have disclosed to the Company’s
auditors and the audit committee of the Company Board (i) all significant deficiencies and material weaknesses in the design or
operation of internal controls over financial reporting that are reasonably likely to adversely affect the Company’s ability
to record, process, summarize and report financial information, and (ii) any fraud, whether or not material, that involves management
or other employees who have a significant role in the Company’s internal controls.
(e) The
Company has established and maintains disclosure controls and procedures (as such term is defined in Rule 13a-15 under the Exchange
Act). Such disclosure
controls and procedures
are designed to ensure that (i) material information relating to the Company and its Subsidiaries is made known to the Company’s
principal executive officer and principal financial officer, and (ii) all such information is communicated in a timely fashion
to the Company’s principal executive officer and its principal financial officer to allow for timely decisions regarding
the disclosure of such information by the Company in the reports that it files or submits to the SEC under the Exchange Act.
(f) The
Company has not extended or maintained credit, arranged for the extension of credit, or renewed an extension of credit, in the
form of a personal loan to or for any executive officer of the Company (as defined in Rule 3b-7 under the Exchange Act) or director
of the Company.
(g) The
Company is not subject to any “Off-Balance Sheet Arrangement” (as defined in Item 303(a) of Regulation S-K under the
Securities Act).
4.7 Absence
of Certain Changes. Since January 1, 2015, (a) the Company and its Subsidiaries have not suffered any Company Material Adverse
Effect, and (b) the Company and its Subsidiaries have (i) conducted their respective businesses in all material respects in the
ordinary course of business consistent with past practice and (ii) not taken or failed to take any action that, had such action
been taken or failed to have been taken after the date hereof, would have required Parent’s consent under Section 6.1(c),
(d), (f), (g), (h), (i), (j), (m), (o), (p), (t) or (u) (but only with respect to any of the foregoing actions), in each case,
except for the negotiation, execution, delivery and performance of this Agreement.
4.8 Schedule
TO; Schedule 14D-9.
(a) None
of the information provided or to be provided in writing by or on behalf of the Company or any of its directors, officers, employees,
Affiliates, agents or other representatives for inclusion or incorporation by reference in the Schedule TO or the Offer Documents
will contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading.
(b) The
Schedule 14D-9, when filed with the SEC, at the time of any amendment of or supplement thereto, at the time of any publication,
distribution or dissemination thereof and at the time of the commencement of the Offer, will comply as to form in all material
respects with the applicable requirements of the Exchange Act and all other applicable Laws, and will not contain any untrue statement
of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that no representation or warranty is made by the Company
with respect to information supplied by or on behalf Parent or Acquisition Sub or any of their directors, officers, employees,
Affiliates, agents or other representatives specifically for inclusion or incorporation by reference in the Schedule 14D-9.
4.9 Brokers;
Certain Expenses. No broker, finder, investment banker, financial advisor or other Person (other than Centerview Partners
LLC (the “Company Financial
Advisor”),
whose fees and expenses shall be paid by the Company; provided, however, that such fees and expenses shall not exceed
the amounts set forth in the engagement letter between the Company and the Company Financial Advisor which has been made available
to Parent) is or shall be entitled to receive any brokerage, finder’s, financial advisor’s, transaction or other fee
or commission in connection with this Agreement or the transactions contemplated hereby based upon agreements made by or on behalf
of the Company, any of its Subsidiaries or any of their respective officers, directors or employees.
4.10 Employee
Benefit Matters/Employees.
(a) Section
4.10(a) of the Company Disclosure Letter sets forth a complete list of each material Plan. For purposes of this Agreement,
the term “Plan” shall mean each (i) “employee benefit plan” as that term is defined in Section
3(3) of ERISA, whether or not subject to ERISA, (ii)employment, consulting, pension, retirement, profit sharing, deferred compensation,
stock option, change in control, retention, equity or equity-based compensation, stock purchase, employee stock ownership, severance
pay, vacation, bonus or other incentive plans, programs, policies or agreements, and (iii) medical, vision, dental or other health
plans, life insurance plans, or fringe benefit plans, in each case of clauses (i) through (iii), whether oral or written, maintained
or contributed to by the Company or any of its Subsidiaries, or required to be maintained or contributed to by the Company of
its Subsidiaries or otherwise providing for payments or benefits for or to any current or former employees, directors, officers,
consultants or other service providers of the Company or any of its Subsidiaries and/or their dependents or beneficiaries. With
respect to the Plans listed on Section 4.10(a) of the Company Disclosure Letter, to the extent applicable, true, correct
and complete copies of the following have been made available to Parent by the Company: (A) all Plans, including amendments thereto;
(B) the most recent annual report on Form 5500 filed with respect to each Plan (if required by applicable Law) and the most recent
actuarial report, financial statement or valuation report in respect of each Plan, if any; (C) the most recent summary plan description
for each Plan for which a summary plan description is required by applicable Law and all related summaries of material modifications;
(D) the most recent IRS determination, notification, or opinion letter, if any, received with respect to any applicable Plan;
(E) each trust agreement relating to any Plan (as applicable); and (F) all material correspondence to or from any Governmental
Authority relating to any Plan.
(b)
Each Plan that is intended to be qualified under Section 401(a) of the Code either has received a favorable determination letter
from the IRS or may rely upon a favorable prototype opinion letter from the IRS as to its qualified status, and, to the Knowledge
of the Company, nothing has occurred since the date of the latest favorable determination letter or prototype opinion letter,
as applicable, that would reasonably be expected to adversely affect the qualification of any such Plan. Each Plan and any related
trust complies in all material respects, and has been maintained and administered in compliance in all material respects, with
ERISA, the Code and other applicable Laws. Except as would not, individually or in the aggregate, reasonably be expected to have
a Company Material Adverse Effect, other than routine claims for benefits, there are no suits, claims, proceedings, actions, governmental
audits or investigations that are pending or, to the Knowledge of the Company, threatened against or
involving any Plan or
asserting any rights to or claims for benefits under any Company Benefit Plan. No non-exempt “prohibited transaction”
(within the meaning of Section 4975 of the Code and Section 406 of ERISA) has occurred or is reasonably expected to occur with
respect to any Plan.
(c) No
Plan is a “multiemployer plan” (as defined in Section 3(37) or 4001(a)(3) of ERISA) (a “Multiemployer Plan”)
or other pension plan subject to Title IV of ERISA or Section 412 of the Code. During the six (6) years prior to the date hereof,
no Liability under Title IV or Section 302 of ERISA has been incurred by the Company or any ERISA Affiliate that has not been
satisfied in full, and no condition exists that presents a risk to the Company or any such ERISA Affiliates of incurring any such
Liability. Neither the Company nor any of its ERISA Affiliates sponsors, maintains, or contributes to, or has, within the past
six (6) years, sponsored, maintained or contributed to, a Multiemployer Plan or other pension plan subject to Title IV of ERISA
or Section 412 of the Code.
(d) No
Plan provides for post-retirement or other post-employment welfare benefits (other than as required by health care continuation
coverage as required by Section 4980B of the Code or any similar state law (“COBRA”), coverage through the
end of the calendar month in which a termination of employment occurs or an applicable employment agreement or severance agreement,
plan or policy (in each case, that is set forth on Schedule 4.10(a) of the Company Disclosure Letter) requiring the Company
to pay or subsidize COBRA premiums for a terminated employee under the terms and conditions thereof.
(e) No
Plan or other agreement or Contract between the Company (or any of its Subsidiaries) and an employee or other individual has resulted
in or could reasonably be expected to result in the payment of any “excess parachute payment” within the meaning of
Section 280G(b)(1) of the Code. No Person is entitled to receive any additional payment from the Company or any of its Subsidiaries
in the event that any Tax required by Code Section 409A or 4999(a) is imposed on such Person.
(f) Neither
the execution by the Company of this Agreement nor the consummation of the transactions contemplated hereby will (either alone
or upon occurrence of any additional or subsequent events): (i) entitle any current or former employee, consultant or director
of the Company or any of its Subsidiaries or any group of such employees, consultants or directors to any payment of compensation;
(ii) increase the amount of compensation or benefits due to any such employee, consultant or director; or (iii) accelerate the
vesting, funding or time of payment of any compensation, equity award or other benefit.
(g) Except
as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, (i) neither
the Company nor any of its Subsidiaries is the subject of any pending or, to the Knowledge of the Company, threatened proceeding
alleging that the Company or any of its Subsidiaries has engaged in any unfair labor practice under any applicable Law and (ii)
there is no pending or, to the Knowledge of the Company, threatened labor strike, dispute, walkout, work stoppage, slowdown or
lockout with respect to employees of the Company or any of its Subsidiaries, and no such strike, dispute,
walkout, slowdown or
lockout has occurred within the past three (3) years. Neither the Company nor any of its Subsidiaries is a party to any collective
bargaining agreement, and there are no labor unions or other organizations representing, or, to the Knowledge of the Company purporting
to represent or attempting to represent, any employee of the Company or any of its Subsidiaries.
(h) Except
as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, (i) there are
no unfair labor practices, arbitrations, suits, claims, actions, charges, litigations or other proceedings or grievances relating
to any current or former employee or individual independent contractor of the Company or any of its Subsidiaries and (ii) the
Company and each of its Subsidiaries are in compliance with all applicable Laws relating to employment, including Laws relating
to terms and conditions of employment, safety and health, discrimination, workers’ compensation, mass layoffs, plant closings,
worker classification, exempt or non-exempt status of employees, hours of work and the payment of wages or overtime wages.
4.11 Litigation.
There is no Legal Proceeding or governmental or administrative investigation, audit, inquiry or action pending or, to the Knowledge
of the Company, threatened against or relating to the Company or any of its Subsidiaries or any of their respective assets, or
any executive officer, director or employee of the Company or any of its Subsidiaries in their capacities as such, or any Company
Products, that, if adversely determined, would individually or in the aggregate, reasonably be expected to be material to the
Company and its Subsidiaries, taken as a whole. Neither the Company nor any of its Subsidiaries is subject to any material outstanding
Order.
4.12 Tax
Matters.
(a) The
Company and each of its Subsidiaries have timely filed all material Tax Returns required to be filed (taking into account any
extensions of time within which to file such Tax Returns) and all such Tax Returns are complete and accurate in all material respects,
and (ii) the Company and each of its Subsidiaries have paid all material Taxes required to have been paid, whether or not reflected
on a Tax Return, or have established an adequate reserve therefor on the consolidated financial statements of the Company and
its Subsidiaries in accordance with GAAP.
(b) The
Company and its Subsidiaries have not received written notice of any audits or proceedings and, to the Knowledge of the Company,
there are no pending or threatened audits, examinations, assessments or other proceedings, in each case, in respect of material
Taxes of the Company or any Subsidiary. The relevant statute of limitations is closed with respect to the federal income Tax Returns
of the Company and its Subsidiaries for all years through 2011.
(c) The
Company and each of its Subsidiaries have complied in all material respects with all applicable Laws, rules and regulations relating
to the payment and withholding of Taxes and have withheld and paid all material Taxes required to have been withheld and paid,
in each case, in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder or other
third party.
(d) None
of the Company or any of its Subsidiaries has constituted either a distributing corporation or a controlled corporation (within
the meaning of Section 355(a)(1)(A) of the Code) in a distribution of stock intended to qualify for Tax-free treatment under Section
355 of the Code within the past two (2) years.
(e) There
are no Liens for material Taxes upon any property or assets of the Company or any of its Subsidiaries, except for Liens for Taxes
not yet due or for Taxes which are being contested in good faith by appropriate proceedings and for which adequate reserves, in
accordance with GAAP, have been established.
(f) No
closing agreement pursuant to Section 7121 of the Code (or any similar provision of state, local or foreign Law) or any ruling
with respect to material Taxes has been entered into by or with respect to the Company or any of its Subsidiaries that still has
any effect.
(g) None
of the Company or any of its Subsidiaries is party to or bound by or currently has any material Liability under any Contract providing
for the allocation, sharing or indemnification of Taxes (other than customary gross-up or indemnification provisions in credit,
derivatives, leases and similar agreements entered into in the ordinary course of business).
(h) None
of the Company or any of its Subsidiaries has been included in any consolidated, unitary or combined Tax Return (other than Tax
Returns which include only the Company and any of its Subsidiaries) provided for under the Laws of the United States, any foreign
jurisdiction or any state or locality with respect to Taxes for any taxable year. Neither the Company nor any of its Subsidiaries
is liable for the Taxes of any other Person (other than the Company or any of its Subsidiaries) under Treasury Regulation Section
1.1502-6 or any similar provision of state, local or foreign Tax Law, as a transferee or successor.
(i) In
the last six (6) years, no claim has been made in writing by any Governmental Authority in a jurisdiction where the Company and
its Subsidiaries do not file Tax Returns that any such entity is, or may be, subject to taxation by that jurisdiction.
(j) The
Company and its Subsidiaries have made available to Parent copies of (i) all of their material income Tax Returns filed within
the past three (3) years, (ii) all audit reports, letter rulings, technical advice memoranda and similar documents issued by a
Governmental Authority within the past five (5) years relating to the federal, state, local or foreign Taxes due from or with
respect to the Company or any of its Subsidiaries, and (iii) any closing letters or agreements entered into by the Company or
any of its Subsidiaries with any Governmental Authority within the past five (5) years with respect to Taxes.
(k) The
Company is not a United States real property holding corporation within the meaning of Section 897(c)(2) of the Code, and has
not been one during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code.
(l) Neither
the Company nor any of its Subsidiaries has entered into any transaction that constitutes a listed transaction under Treasury
Regulation Section 1.6011-4(b)(2).
4.13 Compliance
with Law; No Default; Permits. Except in each case as would not, individually or in the aggregate, reasonably be expected
to have a Company Material Adverse Effect, (a) neither the Company nor any of its Subsidiaries is, or has been since January 1,
2012, in conflict with, in default with respect to or in violation of, (i) any Laws applicable to the Company or any of its Subsidiaries
or by which any property or asset of the Company or any of its Subsidiaries is bound or affected or (ii) any Contract to which
the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries, or any property or asset
of the Company or any of its Subsidiaries, is bound or affected; (b) the Company and each of its Subsidiaries have all Permits
required to conduct their businesses as currently conducted and such Permits are valid and in full force and effect; (c) neither
the Company nor any of its Subsidiaries has received written or, to the Knowledge of the Company, oral notice from any Governmental
Authority threatening to revoke, terminate, modify or not renew any such Permit and the Company has no Knowledge of any reasonable
basis for any such revocation, termination, modification or nonrenewal; and (d) the Company and each of its Subsidiaries are in
compliance with the terms of such Permits.
4.14 Environmental
Matters. Except in each case as would not, individually or in the aggregate, reasonably be expected to have a Company Material
Adverse Effect:
(a) Each
of the Company and its Subsidiaries is, and has been at all times since January 1, 2013 in compliance with all applicable Environmental
Laws. There is no Liability, Legal Proceeding or Order relating to or arising under Environmental Laws that is pending or, to
the Knowledge of the Company, threatened against or affecting the Company or any of its Subsidiaries or any real property currently
or, to the Knowledge of the Company, formerly, owned, operated or leased by the Company or any of its Subsidiaries. Neither the
Company nor any of its Subsidiaries has received any written notice of or entered into or assumed (by Contract or operation of
Law or otherwise), any Liability, Legal Proceeding or Order relating to or arising under Environmental Laws. To the Knowledge
of the Company, no facts, circumstances or conditions exist that would reasonably be expected to result in the Company and its
Subsidiaries incurring Liabilities or becoming subject to any Legal Proceeding or Order, in each case, relating to or arising
under Environmental Laws. There have been no Releases of Hazardous Substances on properties currently or, to the Knowledge of
the Company, formerly, owned, operated or leased by the Company or any of its Subsidiaries.
(b) The
Company and each of its Subsidiaries has obtained and currently maintains all Permits necessary under Environmental Laws for their
operations as presently conducted (“Environmental Permits”), there is no investigation known to the Company,
nor any action pending or, to the Knowledge of the Company, threatened seeking to revoke such Environmental Permits, and neither
the Company nor any of its Subsidiaries has received any written notice from any Person to the effect that there is lacking any
Environmental Permit required under Environmental Law for the current use or operation of any property owned,
operated or leased by
the Company or any of its Subsidiaries. Neither the execution and delivery of this Agreement by the Company, nor the consummation
by the Company of the transactions contemplated hereby, nor compliance by the Company with any of the provisions hereof, will
result in the termination or revocation of, or a right of termination or cancellation under, any Environmental Permit.
(c) The
Company has made available to Parent true, complete and correct copies and results of any reports, data, investigations, audits,
assessments (including Phase I environmental site assessments and Phase II environmental site assessments), studies, analyses,
tests or monitoring in the possession or control of the Company or any of its Subsidiaries pertaining to (i) any unresolved Liability,
Legal Proceeding or Order relating to or arising under Environmental Laws, (ii) any Hazardous Substances in, on, beneath or adjacent
to any property currently or formerly owned, operated or leased by the Company or any of its Subsidiaries or (iii) the Company’s
or any of its Subsidiaries’ compliance with applicable Environmental Laws.
4.15 Intellectual
Property.
(a) Section
4.15(a) of the Company Disclosure Letter sets forth a true and complete list of all Company Registered Intellectual Property
Rights, together with the name of the current owner(s), the applicable jurisdictions and the application or registration numbers.
Except as otherwise indicated, the Company or a Subsidiary of the Company is the exclusive owner of all Company Registered Intellectual
Property Rights, free and clear of any Liens other than Permitted Liens.
(b) The
Company and its Subsidiaries own and possess all right, title and interest in and to, or otherwise have the legal right to use,
all of the Company Intellectual Property Rights, free and clear of all Liens, other than Permitted Liens. The entry into and consummation
of the transactions contemplated by this Agreement will not impair the right, title or interest of the Company or any of its Subsidiaries
in or to any Company Intellectual Property Rights, and all of the Company Intellectual Property Rights will be owned or available
for use by the Company and its Subsidiaries immediately after the Effective Time on terms and conditions identical to those under
which the Company and its Subsidiaries owned or used such Company Intellectual Property immediately prior to the Effective Time.
(c) Except
as would not result in the loss of any material Company Intellectual Property Rights, each Person who is or was an employee or
contractor of Company or any of its Subsidiaries and who is or was involved in the creation or development of any Intellectual
Property and/or who has had access to confidential information of the Company or any of its Subsidiaries has executed a valid
agreement containing a present assignment to the Company or one of its Subsidiaries of such employee’s or contractor’s
rights to such Intellectual Property and containing provisions providing for the protection of confidential information. The Company
and its Subsidiaries have taken commercially reasonable actions to maintain, protect and enforce the Company Intellectual Property,
including the secrecy, confidentiality and value of trade secrets and other confidential information.
(d) All
Company Registered Intellectual Property Rights are valid, subsisting and, to the Knowledge of the Company, enforceable. To the
Knowledge of the Company, all Registered Intellectual Property Rights that are exclusively licensed to the Company or any of its
Subsidiaries are valid, subsisting and enforceable. Since January 1, 2012, the Company and its Subsidiaries have not received
written notice from any third party challenging the validity, enforceability, use or ownership of any Company Intellectual Property
Rights, nor is the Company or any of its Subsidiaries currently a party to any proceeding relating to any such challenge, nor,
to the Knowledge of the Company, is any such claim threatened in writing.
(e) Since
January 1, 2012 until the date hereof, neither Company nor any of its Subsidiaries have received any written notice from any third
party, and, to the Knowledge of Company, there is no other assertion or threat from any third party, that the operation of the
business of Company or any of its Subsidiaries, or any of their products or services, infringes, misappropriates or otherwise
violates the Intellectual Property of any third party. The operation of the business of the Company and its Subsidiaries, including
the development and commercialization of Company Products, as currently conducted and as conducted during the past three (3) years,
and, to the Knowledge of the Company, as currently proposed to be conducted, does not, has not and will not infringe, misappropriate
or otherwise violate the Intellectual Property Rights of any third party.
(f) To
the Knowledge of the Company, during the past three (3) years, no third party has infringed, misappropriated or otherwise violated
any Company Intellectual Property Rights owned by, or exclusively licensed by, the Company or any of its Subsidiaries in a manner
that would reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole. The Company and its Subsidiaries
are not currently, and have not been, during the past three (3) years, a party to any proceeding (i) challenging the validity,
enforceability, use or ownership of any Company Intellectual Property Rights or (ii) asserting that any third party, or any third
party products or services, has infringed, or misappropriated or otherwise violated any Company Intellectual Property Rights.
(g) No
funding, facility or personnel of any Governmental Authority or any university, college, research institute or other educational
institution was or is being used, directly or indirectly, to create, in whole or in part, Company Intellectual Property Rights,
except for any such funding or use of such facility or personnel that does not result in such Governmental Authority or institution
obtaining ownership rights to such Company Intellectual Property Rights.
(h) The
Company and its Subsidiaries are, and for the last three (3) years have been, in compliance in all material respects with (i)
all applicable data protection or privacy laws governing the collection or use of personal information and (ii) any privacy policies
and related policies, programs or other notices that concern the Company’s and its Subsidiaries’ collection or use
of personal information in the conduct of their respective businesses. The Company and its Subsidiaries have taken reasonable
actions to protect the security and integrity of their servers, systems, sites, circuits, networks, interfaces, platforms and
other telecom assets and equipment (collectively, the “Company Systems”) and the data stored or contained therein
or transmitted
thereby, including procedures
preventing unauthorized access and the introduction of a virus and the taking and storing on-site and off-site of back-up copies
of critical data. To the Knowledge of the Company, there have been no unauthorized intrusions or breaches of the security of the
Company Systems.
4.16 Property.
(a) Neither
the Company nor any of its Subsidiaries owns any real property.
(b) Section
4.16(b) of the Company Disclosure Letter sets forth a true, correct and complete list of all leases, subleases and other agreements
under which the Company or any of its Subsidiaries uses or occupies or has the right to use or occupy, now or in the future, any
real property (the “Real Property Leases”). The Company has heretofore made available to Parent true, correct
and complete copies of all Real Property Leases (including all modifications, amendments, supplements, waivers and side letters
thereto). Each Real Property Lease is valid and binding on the Company or the Subsidiary of the Company that is party thereto
and, to the Knowledge of the Company, each other party thereto, is in full force and effect, and all rent and other sums and charges
payable by the Company or any of its Subsidiaries as tenants thereunder are current in all material respects. No termination event
or condition or uncured default of a material nature on the part of the Company or, if applicable, its Subsidiary or, to the Knowledge
of the Company, the landlord thereunder exists under any Real Property Lease. The Company and each of its Subsidiaries has a good
and valid leasehold interest in each parcel of real property subject to a Real Property Lease (the “Leased Real Property”)
free and clear of all Liens, except Permitted Liens. Neither the Company nor any of its Subsidiaries has received written notice
of any pending, and to the Knowledge of the Company, there is no threatened, condemnation with respect to any Leased Real Property.
(c) Except
as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, all of the buildings
and structures on the Leased Real Property are in good condition of maintenance and repair, ordinary wear and tear excepted, and
are adequate, sufficient and suitable for their present uses and purposes.
(d) The
Company and each of its Subsidiaries have good and valid title to, or a valid and enforceable leasehold interest in, or other
right to use, all personal property owned, used or held for use by them, except as would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect. Except as would not, individually or in the aggregate, reasonably
be expected to have a Company Material Adverse Effect, all personal property owned, used or held for use by the Company its Subsidiaries
as of the date of this Agreement is in good operating condition and in good condition of maintenance and repair, ordinary wear
and tear excepted.
4.17 Material
Contracts.
(a) Section
4.17(a) of the Company Disclosure Letter lists as of the date hereof, and the Company has made available to Parent and Acquisition
Sub (or outside counsel) true, correct and complete copies of, each Contract (other than Plans), to which the Company or
any of its Subsidiaries
is a party or by which the Company, any of its Subsidiaries or any of their respective properties or assets is bound that:
(i) would
be required to be filed by the Company as a “material contract” pursuant to Item 601(b)(10) of Regulation S-K under
the Securities Act or disclosed by the Company on a Current Report on Form 8-K;
(ii) contains
covenants that limit the ability of the Company or any of its Subsidiaries (or which, following the consummation of the Merger,
could restrict or purports to restrict the ability of the Surviving Corporation or Parent or any of their respective Affiliates)
(A) to compete in any business or with any Person or in any geographic area or to sell, supply or distribute any service or product
(including any non-compete, exclusivity or “most-favored nation” provisions), (B) to purchase or acquire an interest
in or substantially all of the assets of any other entity, except, in each case, for any such Contract that may be cancelled without
notice or penalty or other Liability of the Company or any of its Subsidiaries upon notice of sixty (60) days or less or (C) to
enforce its rights under any Contract, agreement or applicable Law, including any covenant not to sue;
(iii) provides
for or governs the formation, creation, operation, management or control of any partnership, joint venture or similar arrangement;
(iv) involves
(A) the use or license by the Company or any of its Subsidiaries of any Intellectual Property Rights owned by a third party (other
than shrink-wrap, click-wrap and off-the-shelf or non-customized commercially available software with annual license, maintenance,
support and other fees of less than $100,000 per Contract) or (B) the joint development of products or technology with a third
party;
(v) involves
the license by the Company or any of its Subsidiaries of any of its Intellectual Property Rights to any third party;
(vi) constitutes
a manufacturing, supply, distribution or marketing agreement that provides for minimum payment obligations by the Company of at
least $500,000 in the past twelve (12) months or in any prospective twelve (12) month period or contains a covenant not to sue
with a third party;
(vii) other
than solely among wholly owned Subsidiaries of the Company, relates to indebtedness having an outstanding principal amount in
excess of $500,000;
(viii) relates
to (A) any acquisition, divestiture, merger or similar transaction completed in the five (5) year period immediately preceding
the date hereof and contains material obligations that are still in effect (excluding any transactions solely among the Company
and any wholly owned Company Subsidiary), or (B) the acquisition or disposition, directly or indirectly (by merger, purchase or
sale of stock or assets or otherwise) of material assets, a business or capital stock or other equity interest of another Person
that has not yet been consummated;
(ix) has
any current or ongoing obligations to, or rights in favor of, any current or former director, officer or Affiliate of the Company
or any of its Subsidiaries, including any Contract that obligates the Company or any of its Subsidiaries to indemnify or hold
harmless any past or present director, officer, trustee or employee of the Company or any of its Subsidiaries (other than the
certificate of incorporation or bylaws (or similar governing documents) of the Company or any of its Subsidiaries);
(x) provides
for material “earn-outs” or other material contingent payments by the Company or any of its Subsidiaries other than
those with respect to which there are no further obligations under such provisions;
(xi) involves
a grant to any Person of any right of first offer or right of first refusal to purchase, lease, sublease, use, possess or occupy
all or any substantial part of any material assets, rights or properties of the Company or any of its Subsidiaries;
(xii) constitutes
an interest rate cap, interest rate collar, interest rate swap or other Contract relating to a hedging transaction;
(xiii) to
the Knowledge of the Company, would reasonably be expected to prohibit or materially delay the consummation of the transactions
contemplated hereby; or
(xiv) would
reasonably be expected to involve aggregate payments by the Company and its Subsidiaries or to the Company or any of its Subsidiaries
under such Contract of more than $2,500,000 in any one year or $10,000,000 over the term of the Contract (including by means of
royalty payments) other than any such Contract that may be cancelled without notice or penalty or other Liability of the Company
or any of its Subsidiaries upon notice of sixty (60) days or less.
Each Contract of the
type described in clauses (i) through (xiv) above, other than a Plan, is referred to herein as a “Material Contract”.
(b) Except
as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, (i) each Material
Contract is valid and binding on the Company or the Subsidiary of the Company that is a party thereto and, to the Knowledge of
the Company, each other party thereto, and is in full force and effect and (ii) the Company and its Subsidiaries have, and, to
the Knowledge of the Company, each other party thereto has, performed and complied with all obligations required to be performed
or complied with by them under each Material Contract. There is no default under any Material Contract by the Company or any of
its Subsidiaries, or, to the Knowledge of the Company, by any other party thereto, and no event has occurred that with the lapse
of time or the giving of notice or both would constitute a default thereunder by the Company or any of its Subsidiaries or, to
the Knowledge of the Company, by any other party thereto, except for those defaults which would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect.
4.18 Regulatory
Compliance.
(a) Except,
in each case, as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect,
(i) the Company and its Subsidiaries are, and since January 1, 2013, have been, in compliance with all Health Care Laws applicable
to the Company and its Subsidiaries, or by which any property, business product or other asset of the Company and its Subsidiaries
is bound or affected, (ii) since January 1, 2013, the Company and its Subsidiaries have not received any written notification
of any pending or, to the Knowledge of the Company, threatened, claim, suit, proceeding, hearing, enforcement, audit, investigation
or arbitration from any Governmental Authority, including the FDA, alleging non-compliance by, or Liability of, the Company or
any of its Subsidiaries under any Health Care Laws and (iii) each Company Product is being, and since January 1, 2013, has been,
researched, developed, manufactured, stored, distributed and marketed in compliance with all applicable Health Care Laws.
(b) Except
as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, the Company
and its Subsidiaries hold such Permits of the FDA and similar Governmental Authorities required for the conduct of their respective
businesses as currently conducted, including INDs (collectively, the “FDA Permits”), and all such FDA Permits
are in full force and effect.
(c) Since
January 1, 2013, all reports, documents, claims and notices required to be filed, maintained, or furnished to the FDA or similar
Governmental Authority by the Company and its Subsidiaries have been so filed, maintained or furnished, except where failure to
file, maintain or furnish such reports, documents, claims or notices would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect, and all such reports, documents, claims and notices were complete and correct
in all material respects on the date filed (or were corrected in or supplemented by a subsequent filing). Since January 1, 2013,
the Company and its Subsidiaries have not made any untrue statement of material fact or fraudulent statement to the FDA or any
similar Governmental Authority, or failed to disclose a material fact required to be disclosed to the FDA or any similar Governmental
Authority.
(d) To
the Knowledge of the Company, the clinical and pre-clinical studies conducted by or on behalf of the Company or its Subsidiaries
(including those sponsored by the Company or its Subsidiaries) have been and, if still pending, are being conducted in all material
respects in accordance with experimental protocols, procedures and controls pursuant to all applicable Health Care Laws, including,
but not limited to, the Federal Food, Drug and Cosmetic Act and its applicable implementing regulations at 21 C.F.R. Parts 50,
54, 56, 58 and 312. Since January 1, 2013, the Company and its Subsidiaries have not received any written notice or other correspondence
from the FDA or any similar Governmental Authority requiring the termination, suspension or material modification of any ongoing
clinical or pre-clinical study conducted by or on behalf of the Company or its Subsidiaries. To the Knowledge of the Company,
there are no pending or threatened actions or proceedings by the FDA or any similar Governmental Authority which would prohibit
or impede the potential future commercial sale of any of Company Products.
(e) As
of the date hereof, to the Knowledge of the Company, no material adverse determination by the FDA or any other Governmental Authority,
with respect to the approvability of any Company Product has been made or is reasonably expected to be made between the date of
this Agreement and the Termination Date.
(f) The
Company has made available to Parent true, correct and complete copies of all material filings made by the Company and its Subsidiaries
with the FDA or any similar Governmental Authority with respect to Company Products, and all material correspondence between the
Company or any of its Subsidiaries and the FDA or any similar Governmental Authority with respect to Company Products.
(g) None
of the Company or any of its Subsidiaries, or, to the Knowledge of the Company, any agent or representative thereof or any Person
that researches, develops or manufactures Company Products pursuant to an agreement with the Company or any of its Subsidiaries,
has been debarred, excluded or disqualified (or convicted of any crime or engaged in any conduct for which debarment, exclusion
or disqualification is mandated) pursuant to 21 U.S.C. §335a or any other Health Care Law.
(h) None
of the Company or any of its Subsidiaries is a party to any material corporate integrity agreements, deferred prosecution agreements,
monitoring agreements, consent decrees, settlement orders or similar agreements with or imposed by any Governmental Authority.
4.19 Insurance.
Section 4.19 of the Company Disclosure Letter sets forth a true, correct and complete list of all currently effective material
insurance policies and material self-insurance programs issued in favor of the Company or any of its Subsidiaries, or pursuant
to which the Company or any of its Subsidiaries is a named insured or otherwise a beneficiary. With respect to each such insurance
policy, except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect,
(i) each such policy is in full force and effect and all premiums due thereon have been paid, (ii) neither the Company nor
any of its Subsidiaries is in breach or default, and neither the Company nor any of its Subsidiaries has taken any action or failed
to take any action which, with notice or the lapse of time or both, would constitute such a breach or default, or permit termination
or modification of, any such policy, (iii) to the Knowledge of the Company, no insurer on any such policy has been declared insolvent
or placed in receivership, conservatorship or liquidation, and no notice of cancellation, termination or material premium increase
has been received with respect to any such policy, and (iv) there is no material claim pending under such policy as to which coverage
has been questioned, denied or disputed by the underwriters of such policy.
4.20 Questionable
Payments. None of the Company nor any of its Subsidiaries (nor any of their respective directors, executives, representatives,
agents or employees) (a) has used or is using any corporate funds for any illegal contributions, gifts, entertainment or other
unlawful expenses relating to political activity, (b) has used or is using any corporate funds for any direct or indirect unlawful
payments to any foreign or domestic government officials or employees, (c) has violated or is violating any provision of the Foreign
Corrupt Practices Act of 1977, (d) has
established or maintained,
or is maintaining, any unlawful fund of corporate monies or other properties, (e) has engaged in or otherwise participated in,
assisted or facilitated any transaction that is prohibited by any applicable embargo or related trade restriction imposed by the
United States Office of Foreign Assets Control or any other agency of the United States government or (f) has made any bribe,
unlawful rebate, unlawful payoff, influence payment, kickback or other unlawful payment of any nature.
4.21 Related
Party Transactions. No current director, officer or Affiliate of the Company or any of its Subsidiaries (a) has outstanding
any indebtedness to the Company or any of its Subsidiaries, or (b) is otherwise a party to, or directly or indirectly benefits
from, any Contract, arrangement or understanding with the Company or any of its Subsidiaries of a type that would be required
to be disclosed under Item 404 of Regulation S-K under the Securities Act.
4.22 Opinion
of Financial Advisor of the Company. The Company Board has received the written opinion of the Company Financial Advisor to
the effect that, as of the date of such opinion, and based upon and subject to the various assumptions made, procedures followed,
matters considered and limitations on the review undertaken in preparing such opinion as set forth therein, the consideration
consisting of $232.00 per Company Share to be paid to the holders of Company Shares (other than holders of Cancelled Company Shares
and Dissenting Company Shares and shares held by Affiliates of Parent) pursuant to this Agreement is fair, from a financial point
of view, to such holders. Such opinion has not been withdrawn, rescinded or modified in any way and as soon as practicable following
the date hereof, a conformed copy of such opinion will be made available to Parent for informational purposes only.
4.23 State
Takeover Statutes Inapplicable. Assuming that the representations of Parent and Acquisition Sub set forth in Section 5.6
of this Agreement are true, accurate and complete, the Company Board has taken all necessary actions so that the restrictions
on business combinations set forth in Section 203 of the DGCL and any other similar applicable Law are not applicable to
this Agreement, the Support Agreement and the transactions contemplated hereby and thereby. No other state takeover statute or
similar statute or regulation applies to or purports to apply to the Offer, the Merger, the Support Agreement or the other transactions
contemplated hereby or thereby. No “fair price,” “moratorium,” “control share acquisition”
or other similar anti-takeover statute or regulation or any anti-takeover provision in the Company’s certificate of incorporation
and bylaws is, or at the Effective Time will be, applicable to the Company Shares, the Merger or the other transactions contemplated
by this Agreement.
4.24 Billing
Arrangements. Section 4.24 of the Company Disclosure Letter sets forth the Company’s outside legal, accounting
and financial advisors retained as of the date hereof by the Company and its Subsidiaries in connection with the transactions
contemplated by this Agreement, and discloses any contingent payment arrangements requiring payments to be made to any such advisors
in connection with the transactions contemplated by this Agreement that are contingent upon the execution of this Agreement or
the consummation of the transactions contemplated hereby or, in the case of advisors customarily compensated on the basis of hourly
time charges, are not based on actual time charges and expense reimbursement.
4.25 No
Other Representations or Warranties. Except for the representations and warranties contained in this Article IV
and Section 2.2, neither the Company nor any other Person on behalf of the Company makes any express or implied representation
or warranty with respect to the Company or with respect to any other information provided to Parent or Acquisition Sub in connection
with the transactions contemplated hereby.
4.26 Disclaimer
of Other Representations and Warranties. The Company acknowledges and agrees that, except for the representations and warranties
expressly set forth in this Agreement (a) neither Parent nor Acquisition Sub is making, or has made, any representations or warranties
relating to itself or its business or otherwise in connection with the Merger, and the Company is not relying on any representation
or warranty of Parent or Acquisition Sub except for those expressly set forth in this Agreement, and (b) no Person has been authorized
by Parent or Acquisition Sub to make any representation or warranty relating to Parent or Acquisition Sub or their respective
businesses, and if made, such representation or warranty must not be relied upon by the Company as having been authorized by Parent
or Acquisition Sub. Nothing in this Section 4.26 shall impact any rights of any party to this Agreement in respect of fraud.
Article V
REPRESENTATIONS AND WARRANTIES OF
PARENT AND ACQUISITION SUB
Parent and Acquisition
Sub hereby represent and warrant to the Company as follows:
5.1 Organization
and Qualification. Each of Parent and Acquisition Sub is duly organized and validly existing and in good standing under the
Laws of the jurisdiction of its organization. All of the issued and outstanding capital stock of Acquisition Sub is owned directly
by Parent. Both Parent and Acquisition Sub are in compliance in all material respects with the provisions of their respective
certificates of incorporation and bylaws (or other similar governing documents).
5.2 Authority
for this Agreement. Each of Parent and Acquisition Sub has requisite corporate power and authority to execute and deliver
this Agreement, to perform their respective covenants and obligations hereunder and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement by Parent and Acquisition Sub and, subject to the adoption of this Agreement
by Parent, as the sole stockholder of Acquisition Sub (which adoption shall occur immediately after the execution and delivery
of this Agreement), the performance by Parent and Acquisition Sub of their respective covenants and obligations hereunder and
the consummation of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate proceedings
on the part of Parent and Acquisition Sub and no additional corporate proceedings on the part of Parent or Acquisition Sub are
necessary to authorize the execution and delivery by
Parent and Acquisition
Sub of this Agreement, the performance by Parent and Acquisition Sub of their respective covenants and obligations hereunder or
the consummation by Parent and Acquisition Sub of the transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by Parent and Acquisition Sub and, assuming the due authorization, execution and delivery by the Company,
constitutes a legal, valid and binding obligation of each of Parent and Acquisition Sub, enforceable against each of Parent and
Acquisition Sub in accordance with its terms, except that such enforceability (a) may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other similar Laws affecting or relating to creditors’ rights generally, and (b) is subject
to general principles of equity. As of the date of this Agreement, the Board of Directors of Parent and the Board of Directors
of Acquisition Sub have each declared the advisability of and approved and adopted this Agreement and the Merger at meetings duly
called and held (or by unanimous written consent).
5.3 Schedule
TO; Schedule 14D-9.
(a) The
Schedule TO and the Offer Documents, when filed with the SEC, at the time of any amendment of or supplement thereto, at the time
of any publication, distribution or dissemination thereof and at the time of the commencement of the Offer, will comply as to
form in all material respects with the applicable requirements of the Exchange Act and all other applicable Laws, and will not
contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading; provided, however, that no representation
or warranty is made by Parent or Acquisition Sub with respect to information supplied by or on behalf of the Company specifically
for inclusion or incorporation by reference in the Schedule TO or the Offer Documents.
(b) None
of the information provided or to be provided in writing by or on behalf of Parent or Acquisition Sub or any of their directors,
officers, employees, Affiliates, agents or other representatives for inclusion or incorporation by reference in the Schedule 14D-9
will contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading.
5.4 Consents
and Approvals; No Violation. Neither the execution, delivery and performance of this Agreement by Parent or Acquisition Sub
nor the consummation of the transactions contemplated hereby will (a) violate or conflict with or result in any breach of
any provision of the respective certificate of incorporation or bylaws (or other similar governing documents) of Parent or Acquisition
Sub, (b) require any Permit of, or filing with or notification to, any Governmental Authority except (i) as may be required
under the HSR Act, (ii) the applicable requirements of any federal or state securities Laws, including the Exchange Act and the
rules and regulations promulgated thereunder, (iii) the filing of the Certificate of Merger as required by the DGCL, or (iv) the
applicable requirements of NASDAQ, (c) violate, conflict with or result in a breach of any provision of, or require any notice,
consent, waiver or approval or result in a default (or give rise to any right of termination, cancellation, modification or acceleration
or any event that, with the giving of notice, the passage of time or otherwise, would constitute a default or give rise to any
such right) under any of the terms, conditions or provisions of any Contract or obligation to which Parent or Acquisition Sub
or any of their respective Subsidiaries is a party or by which Parent or any of its Subsidiaries or any of their
respective assets may
be bound, or (d) violate any Law or Order applicable to Parent or any of its Subsidiaries (including Acquisition Sub) or
by which any of their respective assets are bound, except as would not, or would not reasonably be expected to, prevent, materially
delay or materially impair the ability of Parent or Acquisition Sub to consummate the Merger or the other transactions contemplated
hereby.
5.5 Litigation.
There is no Legal Proceeding or governmental or administrative investigation or action pending or, to the knowledge of Parent,
threatened against or relating to Parent or any of its Subsidiaries that would, or seeks to, prevent, materially delay or materially
impair the ability of Parent or Acquisition Sub to consummate the Merger or the other transactions contemplated hereby. Neither
Parent nor any of its Subsidiaries is subject to any outstanding Order that, individually or in the aggregate, would, or seeks
to, prevent, materially delay or materially impair the ability of Parent or Acquisition Sub to consummate the Merger or the other
transactions contemplated hereby.
5.6 Interested
Stockholder. Neither Parent nor any of its Subsidiaries, nor any “affiliate” or “associate” (as such
terms are defined in Section 203 of the DGCL) of any thereof, is, or has been at any time during the period commencing three (3)
years prior to the date hereof through the date hereof, an “interested stockholder” of the Company, as such term is
defined in Section 203 of the DGCL. None of Parent, Acquisition Sub nor any of their Affiliates directly or indirectly owns any
Company Shares as of the date hereof, other than shares beneficially owned through benefit or pension plans.
5.7 Sufficient
Funds. Parent currently has, or as of the Acceptance Time and the Effective Time will have, available to it, and Acquisition
Sub will have as of the Acceptance Time and at and as of the Closing, sufficient funds (including cash, cash equivalents, available
lines of credit or other sources of immediately available funds) for the satisfaction of all of Parent’s and Acquisition
Sub’s obligations under this Agreement, including the payment of the aggregate Offer Price and Merger Consideration and
the consideration in respect of the Company Options, Company Restricted Shares and Company RSU Awards and to pay all related fees
and expenses required to be paid by Parent or Acquisition Sub pursuant to the terms of this Agreement. Parent’s and Acquisition
Sub’s obligations hereunder, including their obligations to consummate the Merger, are not subject to a condition regarding
Parent’s or Acquisition Sub’s obtaining of funds to consummate the transactions contemplated by this Agreement.
5.8 Brokers.
The Company will not be responsible for any brokerage, finder’s, financial advisor’s or other fee or commission payable
to any broker, finder or investment banker in connection with the transactions contemplated by this Agreement based upon arrangements
made by and on behalf of Parent and Acquisition Sub.
5.9 Operations
of Acquisition Sub. Acquisition Sub has been formed solely for the purpose of engaging in the transactions contemplated hereby
and, prior to the Effective Time, Acquisition Sub will not have engaged in any other business activities and will have incurred
no Liabilities other than those incident to its formation or as contemplated by this Agreement.
5.10 No
Other Representations or Warranties. Except for the representations and warranties contained in this Article V,
none of Parent or Acquisition Sub or any other Person on behalf of Parent or Acquisition Sub makes any express or implied representation
or warranty with respect to Parent or any of its Subsidiaries or with respect to any other information provided to the Company
in connection with the transactions contemplated hereby.
5.11 Disclaimer
of Other Representations and Warranties. Parent and Acquisition Sub each acknowledges and agrees that, except for the representations
and warranties expressly set forth in this Agreement (a) neither the Company nor any of its Subsidiaries makes, or has made, any
representations or warranties relating to itself or its business or otherwise in connection with the Merger, and Parent and Acquisition
Sub are not relying on any representation or warranty except for those expressly set forth in this Agreement, (b) no Person has
been authorized by the Company or any of its Subsidiaries to make any representation or warranty relating to itself or its business
or otherwise in connection with the Merger, and if made, such representation or warranty must not be relied upon by Parent or
Acquisition Sub as having been authorized by such party, and (c) any estimates, projections, predictions, data, financial information,
memoranda, presentations or any other materials or information provided or addressed to Parent, Acquisition Sub or any of their
representatives are not and shall not be deemed to be or include representations or warranties unless any such materials or information
is the subject of any express representation or warranty set forth in Article IV or Section 2.2 of this Agreement.
Nothing in this Section 5.11 shall impact any rights of any party to this Agreement in respect of fraud.
Article VI
COVENANTS OF THE COMPANY
6.1 Conduct
of Business of the Company. Except as described in Section 6.1 of the Company Disclosure Letter or as expressly provided
for by this Agreement, during the period from the date of this Agreement and continuing until the earlier of the termination of
this Agreement or the Effective Time, the Company will conduct and will cause each of its Subsidiaries to conduct its operations
in all material respects in the ordinary and usual course of business consistent with past practice, and the Company will use
and will cause each of its Subsidiaries to use its reasonable best efforts to maintain and preserve intact its business organization,
preserve the present relationships and goodwill with those Persons having significant business relationships with the Company
or any of its Subsidiaries, keep available the services of its current officers and key employees, maintain in effect all material
Permits pursuant to which the Company or any of its Subsidiaries currently operates and maintain and enforce in all material respects
the Company Intellectual Property Rights. Without limiting the generality of the foregoing and except as otherwise expressly provided
for by this Agreement, during the period specified in the preceding sentence, without the prior written consent of Parent (which
consent shall not be unreasonably conditioned, withheld or delayed), the Company will not and will not permit any of its Subsidiaries
to:
(a) issue,
sell, deliver, transfer, convey, dispose of, grant options or rights to purchase, pledge, or authorize or propose the issuance,
sale, delivery, transfer, conveyance,
disposition, grant of
options or rights to purchase or pledge, any Company Securities or Subsidiary Securities, other than Company Shares issuable upon
exercise of the Company Options or vesting of Company Restricted Shares or Company RSU Awards outstanding on the date hereof in
accordance with their existing terms;
(b) repurchase,
acquire or redeem, directly or indirectly or amend any Company Securities, except in connection with (i) the forfeiture or expiration
of Company Options, Company Restricted Shares or Company RSU Awards outstanding as of the date hereof, and (ii) the withholding
of Company Shares to satisfy Tax withholding obligations with respect to the Company Options, Company Restricted Shares or Company
RSU Awards outstanding as of the date hereof pursuant to any obligations contained in the applicable Company Stock Plan;
(c) split,
combine, reclassify, subdivide, exchange, recapitalize or enter into any similar transaction in respect of its capital stock or
declare, set aside, make or pay any dividend or distribution (whether in cash, stock or property) on any shares of its capital
stock (other than cash dividends paid to the Company or one of its wholly owned Subsidiaries by a wholly owned Subsidiary of the
Company with regard to its capital stock or other equity interests);
(d) (i) make
any acquisition or disposition, by means of a merger, consolidation, recapitalization, joint venture or otherwise, of any business,
assets or securities or any sale, lease, license, encumbrance or other disposition of any business, assets or securities of the
Company or any of its Subsidiaries or any third party, in each case involving the payment of consideration (including consideration
in the form of assumption of Liabilities) of $750,000 or more or the disposition of assets or securities with a fair market value
in excess of $750,000, except for purchases or sales of raw materials, inventory or clinical trial drug supplies made in the ordinary
course of business and consistent with past practice, (ii) adopt a plan of complete or partial liquidation, dissolution,
recapitalization, restructuring or other reorganization of the Company or its Subsidiaries, (iii) merge or consolidate with or
into any other Person, (iv) enter into any Contract that contains a change of control or similar provision that would require
a material payment to the other party or parties thereto in connection with the Offer, the Merger or the other transactions contemplated
by this Agreement, (v) other than in the ordinary course of business consistent with past practice, enter into a Contract
that would have been a Material Contract if it were in effect as of the date hereof, amend any Material Contract in any material
respect, terminate any Material Contract or grant any release or relinquishment of any material rights under any Material Contract,
or (vi) other than in the ordinary course of business consistent with past practice, enter into, modify, supplement or amend any
material lease or sublease of any real property;
(e) (i) incur,
assume or otherwise become liable or responsible for any long-term debt or short-term debt, except for short-term debt incurred
in the ordinary course of business consistent with past practice to fund working capital requirements in an amount not to exceed
$750,000 at any time, (ii) repay (other than in the ordinary course of business consistent
with past practice),
redeem or repurchase any long-term or short-term debt or (iii) cancel any material debt or claim owed to the Company or any of
its Subsidiaries;
(f) assume,
guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations
of any other Person except wholly owned Subsidiaries of the Company;
(g) make
any loans, advances or capital contributions to, or investments in, or forgive any loans of, any other Person (other than wholly
owned Subsidiaries of the Company);
(h) change
in any material respect, any financial accounting methods, principles or practices used by it, except as required by GAAP or applicable
Law;
(i) adopt
or change any method of Tax accounting, make or change any material Tax election, extend the statute of limitations or file any
extension request relating to material Taxes with any Governmental Authority, amend any material Tax Return, in each case, other
than as required by applicable Law or in the ordinary course of business, or settle or compromise any material income Tax liability;
(j) adopt
any amendments to its certificate of incorporation or bylaws (or other similar governing documents);
(k) except
as required by applicable Law, the terms of this Agreement or any Plan in existence as of the date hereof and set forth on Section
4.10(a) of the Company Disclosure Letter, (i) increase the compensation (cash or equity) or benefits payable or to become
payable to any of its directors, officers, employees or individual independent contractors, (ii) grant to any of its directors,
officers, employees or individual independent contractors any increase in severance or termination pay, (iii) pay or award, or
commit to pay or award, any bonuses or incentive compensation (other than annual bonuses payable in the ordinary course of business
consistent with past practice during the first quarter of the Company’s fiscal year), or (iv) enter into any employment,
consulting, severance, retention or termination agreement (including, for the avoidance of doubt, offer letters) with any of its
directors, officers, employees or, except in the ordinary course of business, individual contractors, (v) establish, adopt, enter
into, amend or terminate any collective bargaining agreement or Plan (including any agreement or plan which would constitute a
Plan if entered into as of the date hereof), or (vi) take any action to accelerate any payment or benefit, or the funding of any
payment or benefit, payable or to become payable to any of its directors, officers, employees or individual independent contractors;
(l) incur
any capital expenditure or any obligations, Liabilities or indebtedness in respect thereof, except for any capital expenditure
in an amount not to exceed, in any fiscal quarter, $1,000,000 in the aggregate;
(m) discharge,
settle or compromise (i) any suit, action, claim, proceeding or investigation that is disclosed in the Company SEC Reports filed
prior to the date hereof or (ii) any other suit, action, claim, proceeding or investigation, other than, in each case, a settlement
solely for monetary
damages (without any admission of liability or other adverse consequences or restrictions on the Company, Parent, Acquisition
Sub or the Surviving Corporation) not in excess of $500,000 individually or $2,500,000 in the aggregate;
(n) hire
or terminate (other than for cause) the employment or service of any officer or employee (which employee has annual target compensation
(based on cash and equity) of $200,000 or greater) of the Company or any of its Subsidiaries or appoint any Person to a position
of executive officer or director of the Company or any of its Subsidiaries, or (ii) promote any officers or employees, except,
provided that prior notice is provided to Parent, for a promotion of any employee that is in the ordinary course of business and
consistent with past practice;
(o) form
or commence the operations of any business or any corporation, partnership, limited liability company, joint venture, business
association or other business organization or enter into any new line of business;
(p) enter
into any Contract or transaction between the Company or any of its Subsidiaries, on the one hand, and any Affiliate of the Company
or any of its Subsidiaries on the other hand, other than in the ordinary course of business consistent with past practice and
on terms no less favorable to the Company or its Subsidiary, as applicable, than the terms governing such transactions with third
parties;
(q) waive,
release or assign any material rights or claims or make any material payment, directly or indirectly, of any Liability of the
Company or any of its Subsidiaries before the same comes due in accordance with its terms, other than in the ordinary course of
business consistent with past practice;
(r) amend
or modify the compensation terms or any other obligations of the Company contained in the engagement letter with the Company Financial
Advisor in a manner adverse to the Company, any of its Subsidiaries or Parent or engage other financial advisers in connection
with the transactions contemplated by this Agreement;
(s) enter
into, amend or cancel any insurance policies other than in the ordinary course of business consistent with past practice;
(t) sell,
license, assign, transfer, abandon or otherwise dispose of, any Company Intellectual Property; or
(u) authorize,
offer, agree or commit, in writing or otherwise, to take any of the foregoing actions.
Notwithstanding the
foregoing, nothing in this Agreement is intended to give Parent, directly or indirectly, the right to control or direct the business
or operations of the Company or its Subsidiaries at any time prior to the Acceptance Time. Prior to the Acceptance Time, the Company
and its Subsidiaries shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision
over their own business and operations.
6.2 No
Solicitation.
(a) The
Company and its Subsidiaries shall immediately cease and cause to be terminated any and all existing activities, discussions or
negotiations with any Persons (other than Parent and Acquisition Sub) conducted heretofore with respect to any proposal that constitutes
or would reasonably be expected to lead to, any Acquisition Proposal.
(b) Subject
to Section 6.2(c), at all times during the period commencing on the date of this Agreement and continuing until the
earlier to occur of the termination of this Agreement pursuant to Article IX and the Effective Time, neither the Company
nor any of its Subsidiaries nor any of their respective officers, directors or employees shall, and the Company shall instruct
its and its Subsidiaries’ other representatives not to, directly or indirectly, (i) whether publicly or otherwise, solicit,
initiate, induce, cause, knowingly encourage or knowingly take any other action designed to facilitate or assist, any proposal,
inquiry, indication of interest or offer that constitutes or would reasonably be expected to lead to an Acquisition Proposal,
(ii) furnish to any Person (other than Parent, Acquisition Sub or any designees of Parent or Acquisition Sub) any non-public
information relating to the Company or any of its Subsidiaries, or afford to any Person (other than Parent, Acquisition Sub or
any designees of Parent or Acquisition Sub) access to the business, properties, assets, books, records or other non-public information,
or to any personnel, of the Company or any of its Subsidiaries, in any such case with the intent to encourage, induce, facilitate
or assist the making, submission or announcement of any proposal, inquiry, indication of interest or offer that constitutes or
would reasonably be expected to lead to an Acquisition Proposal, (iii) conduct, participate, maintain or engage in, or continue
to conduct, participate, maintain or engage in, any discussions or negotiations with any Person, or take any action, with respect
to any proposal, inquiry, indication of interest or offer that constitutes, or would reasonably be expected to lead to, an Acquisition
Proposal (provided, however, nothing contained herein shall prohibit the Company or any of its representatives from informing
any third party of the provisions set forth in this Section 6.2 or contacting the Person (or the representatives of such
Person) that made any Acquisition Proposal solely for the purpose of seeking clarification of solely those terms or conditions
of such Acquisition Proposal that require clarification so as to determine whether such Acquisition Proposal is, or is reasonably
likely to result in, a Superior Proposal), (iv) approve, endorse or recommend any Acquisition Proposal (except to the extent expressly
permitted pursuant to Section 7.4(b)), (v) enter into any letter of intent, memorandum of understanding, agreement
in principle or similar document, or any Contract or commitment contemplating or otherwise providing for or relating to an Acquisition
Transaction (other than an Acceptable Confidentiality Agreement) (an “Alternative Acquisition Agreement”),
(vi) take any action to make the provisions of any state takeover statute or similar statute or regulation (including the
restrictions under Section 203 of the DGCL), or any anti-takeover provision in the Company’s organizational documents,
inapplicable to any transactions contemplated by an Acquisition Proposal, (vii) amend or grant any waiver or release under, or
fail to enforce, any standstill or similar Contract with respect to any class of equity securities of the Company or any of its
Subsidiaries, or (viii) propose or agree to any of the foregoing. The Company shall, as soon as practicable following the date
hereof but in any event within two (2) Business Days, request of each Person that has heretofore executed a confidentiality agreement
in connection with its consideration of an Acquisition Proposal to
promptly return all
confidential information furnished prior to the execution of this Agreement to or for the benefit of such Person by or on behalf
of the Company or any of its Subsidiaries or representatives. From and after the date of this Agreement, the Company and its Subsidiaries
and their respective officers, directors and employees shall use their reasonable best efforts to enforce any confidentiality
provisions or provisions of similar effect to which the Company or any of its Subsidiaries is a party or of which the Company
or any of the Company Subsidiaries is a beneficiary.
(c) As
promptly as practicable, and in any event within twenty-four (24) hours, following the receipt by the Company, any of its Subsidiaries
or any of their respective representatives of (x) an Acquisition Proposal, (y) any request for nonpublic information, to engage
in negotiations or discussions regarding, or any other inquiry that would reasonably be expected to lead to, an Acquisition Proposal,
or (z) any request for a waiver or release under any standstill or similar Contract, the Company shall provide Parent with
oral and written notice of (i) the receipt of such Acquisition Proposal, request or inquiry, (ii) the material terms and conditions
of such Acquisition Proposal, request or inquiry (including any financing arrangements), and (iii) the identity of the Person
or group (as defined under Section 13(d) of the Exchange Act) making such Acquisition Proposal, request or inquiry and a copy
of all written materials provided by such Person or group in connection with such Acquisition Proposal, request or inquiry (provided
that the Company may redact, and not disclose, the identity of the Person or group making any such Acquisition Proposal if
disclosure of such identity would violate the terms of a Contract by which the Company is bound as of the date hereof). The Company
shall keep Parent informed as promptly as practicable with respect to the status and details of such Acquisition Proposal, request
or inquiry (and in any event within twenty-four (24) hours following any changes to such Acquisition Proposal, request or inquiry),
including by providing copies of all written materials received by the Company, any of its Subsidiaries or their respective representatives
relating to such Acquisition Proposal after written notice of such Acquisition Proposal is delivered to Parent pursuant to this
Section 6.2(c).
(d) Notwithstanding
anything to the contrary set forth in this Section 6.2 or elsewhere in this Agreement, but subject to Section 6.2(c),
prior to the Acceptance Time, the Company may request clarifications from, waive provisions of a standstill or similar Contract
applicable to, enter into or participate in discussions or negotiations with or furnish information to, any Person or group (as
defined under Section 13(d) of the Exchange Act) (or its representatives) in response to an unsolicited written Acquisition Proposal
that could reasonably be expected to lead to a Superior Proposal, in each case made after the date of this Agreement and under
circumstances not otherwise involving a breach of this Agreement, if (A) such action is taken subject to an Acceptable Confidentiality
Agreement, and (B) the Company Board reasonably determines in good faith, after consultation with outside legal counsel, that
the failure to take such actions would be inconsistent with its fiduciary duties under applicable Law. The Company shall, prior
to or substantially simultaneously with the provision of any non-public information of the Company to any such Person, provide
such information to Parent (including by posting such information to the Data Room), to the extent such information has not previously
been provided or made available to Parent.
(e) Without
limiting the foregoing, the Company agrees that any violation of the restrictions set forth in this Section 6.2 by any
representative of the Company or any of its Subsidiaries shall constitute a breach by the Company of this Section 6.2.
Article VII
ADDITIONAL COVENANTS
7.1 Reasonable
Best Efforts to Complete.
(a) Upon
the terms and subject to the conditions set forth in this Agreement, each of Parent, Acquisition Sub and the Company shall, and
shall cause each of their respective Subsidiaries to, use its reasonable best efforts to take, or cause to be taken, all actions,
and to do, or cause to be done, and to assist and cooperate with the other party or parties hereto in doing, all things reasonably
necessary, proper or advisable under applicable Law or otherwise to consummate and make effective, in the most expeditious manner
practicable, the transactions contemplated by this Agreement, including using reasonable best efforts to (i) cause the conditions
to the Offer set forth in Section 2.1(a) and Annex A to be satisfied and cause the conditions to the Merger
set forth in Article VIII to be satisfied; (ii) obtain all necessary actions or non-actions, waivers, consents, approvals,
orders and authorizations from Governmental Authorities and any other Person and make all necessary registrations, declarations,
notifications and filings with Governmental Authorities or any other Person, that are necessary to consummate the Offer and the
Merger; and (iii) obtain all necessary or appropriate consents, waivers and approvals under any Material Contracts to which
the Company or any of its Subsidiaries is a party in connection with this Agreement and the consummation of the transactions contemplated
hereby. Notwithstanding anything to the contrary herein, the Company shall not be required prior to the Effective Time to pay
any consent or other similar fee, “profit-sharing” or other similar payment or other consideration (including increased
rent or other similar payments or any amendments, supplements or other modifications to (or waivers of) the existing terms of
any Contract), or the provision of additional security (including a guaranty) or otherwise assume or agree to assume any Liability
that is not conditioned upon the consummation of the Merger, to obtain any consent, waiver or approval of any Person (including
any Governmental Authority) under any Contract.
(b) Both
Parent and the Company agree, on behalf of themselves and their respective Affiliates, that, between the date of this Agreement
and the Effective Time, neither Parent nor the Company shall, and neither Parent nor the Company shall cause its Affiliates to,
enter into any definitive agreements or arrangements for, or consummate, an acquisition (via stock purchase, merger, consolidation,
purchase of assets or otherwise) of any ownership interest or assets of any Person if such ownership interest or assets would
reasonably be expected to result in any delay in obtaining, or to result in the failure to obtain, any regulatory approvals required
in connection with the transactions contemplated hereby (including the Merger), or would otherwise reasonably be expected to prevent
or delay the Merger.
7.2 Antitrust
Filings.
(a) Each
of Parent and Acquisition Sub (and their respective Affiliates, if applicable), on the one hand, and the Company, on the other
hand, shall file with the FTC and the Antitrust Division of the DOJ a Notification and Report Form relating to this Agreement
and the transactions contemplated hereby as required by the HSR Act as soon as practicable after the date of this Agreement but
in no event later than fifteen (15) days following the date of this Agreement. Each of Parent and the Company shall (i) cooperate
and coordinate with the other in the making of such filings, (ii) supply the other with any information and documentary material
that may be required in order to make such filings, (iii) supply any additional information that reasonably may be required
or requested by the FTC or the DOJ, and (iv) use reasonable best efforts to cause the expiration or termination of the applicable
waiting periods under the HSR Act as soon as practicable, and to avoid any impediment to the consummation of the Offer or the
Merger under any Antitrust Laws. Further, and for the avoidance of doubt, Parent will not extend any waiting period under the
HSR Act or enter into any agreement with the FTC, the Antitrust Division of the DOJ or any other Governmental Authority not to
consummate the transactions contemplated by this Agreement, except with the prior written consent of the Company (which consent
shall not be unreasonably withheld, conditioned or delayed). Notwithstanding anything herein to the contrary, in no event shall
Parent be required to (i) propose, negotiate, commit to or effect, by consent decree, hold separate order or otherwise, conduct
of business restrictions, or a sale or disposition of assets or businesses or a license or grant of commercialization rights to
businesses, products, product lines, fields of use or assets of Parent or its Affiliates (including, after the Closing, the Surviving
Corporation and its Affiliates), or (ii) contest or resist any Legal Proceeding or seek to have vacated, lifted, reversed or overturned
any Order that may result from such Legal Proceedings, whether temporary, preliminary or permanent, that is in effect and that
prohibits, prevents or restricts consummation of the transactions contemplated by this Agreement; provided that Parent
shall have the right, in its sole discretion, to take any of the actions described in the foregoing subclause (ii), and, if Parent
elects to take any such action, the Company shall reasonably cooperate with Parent in connection therewith.
(b) Each
of Parent and Acquisition Sub (and their respective Affiliates, if applicable), on the one hand, and the Company, on the other
hand, shall promptly inform the other of any communication from any Governmental Authority regarding any of the transactions contemplated
by this Agreement in connection with any filings or investigations with, by or before any Governmental Authority relating to this
Agreement or the transactions contemplated hereby, including any proceedings initiated by a private party. If any party hereto
or an Affiliate thereof shall receive a request for additional information or documentary material from any Governmental Authority
with respect to the transactions contemplated by this Agreement pursuant to the HSR Act with respect to which any such filings
have been made, then such party shall use its reasonable best efforts to make, or cause to be made, as soon as reasonably practicable
and after consultation with the other party, an appropriate response in substantial compliance with such request. In connection
with and without limiting the foregoing, to the extent reasonably practicable and unless prohibited by applicable Law or by the
applicable Governmental Authority, the parties hereto agree to (i) give each other reasonable advance notice
of all meetings and
conference calls with any Governmental Authority relating to the Offer or the Merger, (ii) give each other an opportunity to participate
in each of such meetings and conference calls, (iii) keep the other party reasonably apprised with respect to any oral communications
with any Governmental Authority regarding the Offer or the Merger, (iv) cooperate in the filing of any analyses, presentations,
memoranda, briefs, arguments, opinions or other written communications explaining or defending the Offer and the Merger, articulating
any regulatory or competitive argument and/or responding to requests or objections made by any Governmental Authority, (v) provide
each other with a reasonable advance opportunity to review and comment upon, and consider in good faith the views of the other
with respect to, all written communications (including any analyses, presentations, memoranda, briefs, arguments and opinions)
with a Governmental Authority regarding the Offer and the Merger, (vi) provide each other (or counsel of each party, as appropriate)
with copies of all written communications to or from any Governmental Authority relating to the Offer or the Merger, and (vii)
cooperate and provide each other with a reasonable opportunity to participate in, and consider in good faith the views of the
other with respect to, all material deliberations with respect to all efforts to satisfy the conditions set forth in clauses (A)
and (C)(1) of Annex A and Section 8.1(a). Any such disclosures, rights to participate or provisions of information
by one party to the other may be made on a counsel-only basis to the extent required under applicable Law or to remove references
concerning the valuation of the Company or confidential competitively sensitive business information regarding the parties.
(c) Each
of Parent, Acquisition Sub and the Company shall cooperate with one another in good faith to (i) promptly determine whether any
filings not contemplated by Section 7.2(a) are required to be made, and whether any other consents, approvals, permits
or authorizations not contemplated by Section 7.2(a) are required to be obtained, from any Governmental Authority
under any other applicable Law in connection with the transactions contemplated hereby, and (ii) promptly make any filings, furnish
information required in connection therewith and seek to obtain timely any such consents, permits, authorizations, approvals or
waivers that the parties determine are required to be made or obtained in connection with the transactions contemplated hereby.
7.3 Merger.
Following the Acceptance Time, each of Parent, Acquisition Sub and the Company shall take all necessary and appropriate actions
to cause the Merger to become effective as soon as practicable after the Acceptance Time, without a meeting of the stockholders
of the Company, in accordance with Section 251(h) of the DGCL and upon the terms and subject to the conditions of this Agreement.
In furtherance, and without limiting the generality, of the foregoing, neither Parent nor Acquisition Sub shall, and shall not
permit and shall cause their respective representatives not to, take any action that could render Section 251(h) of the DGCL inapplicable
to the Merger.
7.4 Company
Board Recommendation.
(a) Subject
to the terms of Section 7.4(b) and Section 7.4(c), the Company Board shall recommend that the holders
of Company Shares accept the Offer and tender their
Company Shares to Acquisition
Sub pursuant to the Offer (the “Company Board Recommendation”).
(b) Except
to the extent permitted by this Section 7.4, neither the Company Board nor any committee thereof shall (x) withhold, withdraw,
amend, modify or qualify in a manner adverse to Parent or Acquisition Sub, or publicly propose to withhold, withdraw, amend, modify
or qualify in a manner adverse to Parent or Acquisition Sub, the Company Board Recommendation, (y) approve, adopt, declare advisable,
endorse or recommend an Acquisition Proposal or publicly propose to approve, adopt, declare advisable, endorse or recommend an
Acquisition Proposal (each of clauses (x) and (y), a “Company Board Recommendation Change”), or (z) cause or
permit the Company or any of its Subsidiaries to enter into any Alternative Acquisition Agreement; provided, however, that
a “stop, look and listen” communication by the Company Board or any committee thereof to the Company Stockholders
pursuant to Rule 14d-9(f) of the Exchange Act, or any substantially similar communication, shall not be deemed to be a Company
Board Recommendation Change. Notwithstanding the foregoing or anything to the contrary set forth in this Agreement, at any time
prior to the Acceptance Time, (1) in response to the receipt of a Superior Proposal or an Intervening Event, the Company Board
may effect a Company Board Recommendation Change or (2) in response to the receipt of a Superior Proposal, the Company may terminate
this Agreement in order to enter into an Alternative Acquisition Agreement with respect to such Superior Proposal pursuant to
Section 9.1(e), in either case, if all of the following conditions in clauses (i) through (iv) and the last paragraph
of this Section 7.4(b) are met:
(i) A
Superior Proposal with respect to the Company has been made and has not been withdrawn or an Intervening Event has occurred;
(ii) The
Company shall have delivered to Parent written notice (a “Change of Recommendation Notice”) at least four (4)
Business Days prior to effecting such Company Board Recommendation Change or termination of this Agreement, which notice shall
state expressly (x) that it has received a Superior Proposal or an Intervening Event has occurred, (y) in the case of
a Superior Proposal, the material terms and conditions of such Superior Proposal (including any financing arrangements) and the
identity of the Person or group (as defined under Section 13(d) of the Exchange Act) making such Superior Proposal and a copy
of all written materials provided by such Person or group in connection with such Superior Proposal (provided that the
Company may redact, and not disclose, the identity of the Person or group making any such Superior Proposal if disclosure of such
identity would violate the terms of a Contract by which the Company is bound as of the date hereof), or, in the case of an Intervening
Event, the material facts and circumstances related to such Intervening Event, and (z) that it intends to terminate this
Agreement pursuant to Section 9.1(e) or effect a Company Board Recommendation Change (it being understood and agreed that
delivery of a Change of Recommendation Notice shall not, by itself, be deemed to be a Company Board Recommendation Change);
(iii) The
Company Board has concluded in good faith, after consultation with outside legal counsel, that the failure to effect a Company
Board
Recommendation Change
or terminate this Agreement pursuant to Section 9.1(e) would be inconsistent with its fiduciary duties under applicable
Law; and
(iv) In
the case of a Superior Proposal, the Superior Proposal did not involve a material breach by the Company, any of its Subsidiaries
or any of their respective representatives of any of the provisions set forth in Section 6.2 or this Section 7.4.
During such four (4)
Business Days after delivering the Change of Recommendation Notice, the Company shall provide Parent a reasonable opportunity
to make adjustments to the terms and conditions of this Agreement (the “Modified Terms”), and shall consider
and negotiate (to the extent Parent desires to negotiate) in good faith with Parent and its representatives such Modified Terms.
Notwithstanding anything in this Section 7.4(b) to the contrary, the Company Board may not terminate this Agreement pursuant
to Section 9.1(e) or effect a Company Board Recommendation Change until the expiration of such four (4) Business Day period
and unless and until the Company Board concludes in good faith, after considering the Modified Terms (if any are proposed by Parent)
and consultation with outside legal counsel, that the failure to terminate this Agreement pursuant to Section 9.1(e) or
to effect a Company Board Recommendation Change would still be inconsistent with its fiduciary duties under applicable Law. In
the event of any material amendment or modification to any Superior Proposal, the Company shall promptly (but in any event within
twenty-four (24) hours of occurrence) notify Parent of any such amendment or modification and, for each of the first three (3)
such amendments or modifications to such Superior Proposal, the Company Board and its representatives shall be required to negotiate
in good faith with Parent regarding any Modified Terms proposed by Parent in response to such amendment or modification until
the later to occur of two (2) Business Days after the Company Board provides written notice of such amendment or modification
to Parent and the end of the original four (4) Business Day period described above. In the event there is a Company Board Recommendation
Change made in compliance with this Section 7.4(b) with respect to a Superior Proposal, the Company shall only enter into
an Alternative Acquisition Agreement with respect thereto by terminating this Agreement pursuant to Section 9.1(e).
(c) Nothing
in this Agreement shall prohibit the Company Board from (i) taking and disclosing to the Company Stockholders a position
contemplated by Rule 14e-2(a) under the Exchange Act or complying with the provisions of Rule 14d-9 promulgated under the
Exchange Act, and (ii) making any disclosure to the Company Stockholders if the Company Board determines in good faith (after
consultation with its outside legal counsel) that the failure to make such disclosure would be inconsistent with its fiduciary
duties to the Company Stockholders under applicable Law; provided, however, that the taking of any such position
or making of any such disclosure contemplated by this Section 7.4(c) may be a Company Board Recommendation Change, and,
if so, shall not affect the Company’s and the Company Board’s duties under this Section 7.4, including with
respect to the Change of Recommendation Notice and the requirements for making a Company Board Recommendation Change.
7.5 Public
Statements and Disclosure. None of the Company, on the one hand, or Parent and Acquisition Sub, on the other hand, shall
issue (or shall cause its Affiliates or
representatives to issue)
any public release or make any public announcement concerning this Agreement or the transactions contemplated by this Agreement
without the prior written consent of the other (which consent shall not be unreasonably withheld, conditioned or delayed), except
as such release or announcement is required by applicable Law or the rules or regulations of NASDAQ, in which case the party required
to make the release or announcement shall use its reasonable best efforts to allow the other party or parties hereto a reasonable
opportunity to comment on such release or announcement in advance of such issuance (it being understood that the final form and
content of any such release or announcement, as well as the timing of any such release or announcement, shall be at the final
discretion of the disclosing party); provided, however, that the restrictions set forth in this Section 7.5
shall not apply to any release or announcement made or proposed to be made by the Company in compliance with Section 7.4.
7.6 Anti-Takeover
Laws. Neither the Company nor the Company Board will take any action that would cause this Agreement, the Offer, the
Merger or the other transactions contemplated hereby to be subject to any state anti-takeover or other similar Law. In the event
that any state anti-takeover or other similar Law is or becomes applicable to this Agreement or any of the transactions contemplated
by this Agreement, the Company and Company Board shall grant such approval and take such action as necessary so that such transactions
contemplated by this Agreement may be consummated as promptly as practicable on the terms and subject to the conditions set forth
in this Agreement and otherwise to minimize the effect of such Law on this Agreement and the transactions contemplated hereby.
7.7 Access.
(a) At
all times during the period commencing on the date of this Agreement and continuing until the earlier to occur of the termination
of this Agreement pursuant to Article IX and the Effective Time, the Company shall (and shall cause its Subsidiaries
to) afford Parent, its Subsidiaries and their respective Financing Sources, financial advisors, business consultants, legal counsel,
accountants and other agents and representatives reasonable access during normal business hours, upon reasonable notice, to the
properties, Permits, Contracts, books and records and personnel of the Company and its Subsidiaries and furnish all other information
concerning the Company, its Subsidiaries and their respective businesses, properties and personnel as Parent may reasonably request;
provided, however, that the Company may restrict or otherwise prohibit access to any documents or information to the extent
that, in the reasonable good faith judgment of the Company, (i) any applicable Law requires the Company to restrict or otherwise
prohibit access to such documents or information, (ii) granting such access would violate any obligations of the Company or any
of its Subsidiaries with respect to confidentiality to any third party or otherwise breach, contravene or violate, or give a third
party the right to terminate or accelerate rights under, any then effective Contract to which the Company or any of its Subsidiaries
is a party, or (iii) access to such documents or information would give rise to a risk of waiving any attorney-client privilege,
work product doctrine or other applicable privilege applicable to such documents or information. In the event that the Company
does not provide access or information in reliance on the preceding sentence, it shall use its reasonable best efforts to obtain
the consent of the applicable third party that is required in order to disclose the applicable information and otherwise communicate
the applicable information to
Parent in a way that
would not violate the applicable Law, Contract or obligation or waive such a privilege. Any investigation conducted pursuant to
the access contemplated by this Section 7.7(a) shall be conducted in a manner that does not unreasonably interfere
with the conduct of the business of the Company or its Subsidiaries or create a material risk of damage or destruction to any
property or assets of the Company or any of its Subsidiaries. Any access to the properties of the Company or any of its Subsidiaries
shall be subject to the Company’s reasonable security measures and insurance requirements and shall not include the right
to perform invasive testing without the Company’s prior written consent (which consent shall not be unreasonably conditioned,
withheld or delayed). The terms and conditions of the Confidentiality Agreement shall apply to any information obtained by Parent,
its Subsidiaries or their respective Financing Sources, financial advisors, business consultants, legal counsel, accountants and
other agents and representatives in connection with any investigation conducted pursuant to the access contemplated by this Section 7.7(a).
(b) The
Company shall prepare monthly and quarterly financial statements relating to the Company and its Subsidiaries during the period
from the date of this Agreement until the earlier to occur of the termination of this Agreement pursuant to Article IX
and the Effective Time and shall deliver copies thereof to Parent within forty-five (45) days following the end of each month.
All financial statements delivered pursuant to this Section 7.7(b) shall be in all material respects in accordance
with the books and records of the Company and its Subsidiaries and shall be in a form consistent with such financial statements
prepared by the Company prior to the date of this Agreement. During the period from the date of this Agreement until the earlier
to occur of the termination of this Agreement pursuant to Article IX and the Effective Time, the Company shall file
with the SEC each of its Quarterly Reports on Form 10-Q within forty-five (45) days after the end of the applicable fiscal quarter
of the Company; provided that the Company will file its Quarterly Report on Form 10-Q for the fiscal quarter ended June
30, 2015 by no later than July 31, 2015.
7.8 Section 16(b)
Exemption. The Company shall take all actions as may be reasonably required to cause the transactions contemplated
by this Agreement and any other dispositions of equity securities of the Company (including “derivative securities”
(as defined in Rule 16a-1(c) under the Exchange Act)) in connection with the transactions contemplated by this Agreement by each
individual who is a director or executive officer of the Company to be exempt under Rule 16b-3 promulgated under the Exchange
Act.
7.9 Directors’
and Officers’ Indemnification and Insurance.
(a) The
Surviving Corporation and its Subsidiaries as of the Effective Time shall (and, Parent shall cause the Surviving Corporation and
its Subsidiaries as of the Effective Time to) honor and fulfill in all respects the obligations of the Company and its Subsidiaries
under (i) the indemnification agreements (A) listed in Section 7.9(a) of the Company Disclosure Letter between the Company
or any of its Subsidiaries and any of their respective current or former directors and officers and (B) between the Company or
any of its Subsidiaries and any person who becomes a director or officer of the Company or any of its Subsidiaries prior to the
Effective Time to the extent permitted pursuant to the terms of this Agreement (provided that
any such indemnification
agreement entered into with any person who becomes a director or officer of the Company or any of its Subsidiaries following the
date of this Agreement in accordance with the terms of this Agreement shall be in substantially the same form as the indemnification
agreements listed in Section 7.9(a) of the Company Disclosure Letter) (the “Indemnified Persons”), and
(ii) the indemnification, expense advancement and exculpation provisions in any certificate of incorporation or bylaws or comparable
organizational document of the Company or any of its Subsidiaries in effect on the date of this Agreement. In addition, during
the period commencing at the Effective Time and ending on the sixth (6th) anniversary of the Effective Time, the Surviving
Corporation and its Subsidiaries as of the Effective Time shall (and Parent shall cause the Surviving Corporation and its Subsidiaries
as of the Effective Time to) cause the certificates of incorporation and bylaws (and other similar organizational documents) of
the Surviving Corporation and its Subsidiaries as of the Acceptance Time to contain provisions with respect to indemnification,
exculpation and the advancement of expenses that are no less favorable than the indemnification, exculpation and advancement of
expenses provisions contained in the certificates of incorporation and bylaws (or other similar organizational documents) of the
Company and its Subsidiaries as of the date hereof, and during such six (6) year period, such provisions shall not be repealed,
amended or otherwise modified in any manner that would adversely affect the rights thereunder of any Indemnified Person except
as required by applicable Law or as provided below.
(b) Without
limiting the generality of the provisions of Section 7.9(a), during the period commencing at the Effective Time and ending
on the sixth (6th) anniversary of the Effective Time, to the fullest extent permitted by applicable Law, the Surviving
Corporation and its Subsidiaries as of the Effective Time shall (and Parent shall cause the Surviving Corporation and its Subsidiaries
as of the Effective Time to) indemnify and hold harmless each Indemnified Person from and against any costs, fees and expenses
(including reasonable attorneys’ fees and investigation expenses), judgments, fines, losses, claims, damages, Liabilities
and amounts paid in settlement in connection with any claim, proceeding, investigation or inquiry, whether civil, criminal, administrative
or investigative, to the extent such claim, proceeding, investigation or inquiry arises directly or indirectly out of or pertains
directly or indirectly to any action or omission or alleged action or omission in such Indemnified Person’s capacity as
such that occurred prior to or at the Effective Time (including in connection with any of the transactions contemplated by this
Agreement); provided, however, that if, at any time prior to the sixth (6th) anniversary of the Effective
Time, any Indemnified Person delivers to Parent a written notice asserting in good faith a claim for indemnification under this
Section 7.9(b), then the claim asserted in such notice shall survive the sixth (6th) anniversary of the Effective
Time until such time as such claim is fully and finally resolved. In addition, during the period commencing at the Effective Time
and ending on the sixth (6th) anniversary of the Effective Time, to the fullest extent permitted by applicable Law,
the Surviving Corporation and its Subsidiaries as of the Effective Time shall (and Parent shall cause the Surviving Corporation
and its Subsidiaries as of the Effective Time to) advance, prior to the final disposition of any claim, proceeding, investigation
or inquiry for which indemnification may be sought under this Agreement, promptly following request by an Indemnified Person therefor,
all costs, fees and expenses (including reasonable attorneys’ fees and investigation expenses) incurred by such Indemnified
Person in connection with any such claim, proceeding, investigation or inquiry upon receipt of an
undertaking by such
Indemnified Person to repay such advances if it is ultimately decided in a final, non-appealable judgment by a court of competent
jurisdiction that such Indemnified Person is not entitled to indemnification hereunder. In the event of any such claim, proceeding,
investigation or inquiry, (i) the Surviving Corporation shall have the right to control the defense thereof after the Acceptance
Time, (ii) each Indemnified Person shall be entitled to retain his or her own counsel, whether or not the Surviving Corporation
shall elect to control the defense of any such claim, proceeding, investigation or inquiry, (iii) subject to the receipt
of the undertaking referred to in the preceding sentence, the Surviving Corporation shall pay all reasonable fees and expenses
of any counsel retained by an Indemnified Person, promptly after statements therefor are received, whether or not the Surviving
Corporation shall elect to control the defense of any such claim, proceeding, investigation or inquiry, and (iv) no Indemnified
Person shall be liable for any settlement effected without his or her prior express written consent; provided that such
consent is not unreasonably withheld, conditioned or delayed. Notwithstanding anything to the contrary set forth in this Section
7.9(b) or elsewhere in this Agreement, neither the Surviving Corporation nor any of its Affiliates (including Parent) (A)
shall settle or otherwise compromise or consent to the entry of any judgment or otherwise seek termination with respect to any
claim, proceeding, investigation or inquiry for which indemnification may be sought by an Indemnified Person under this Agreement
unless such settlement, compromise, consent or termination includes an unconditional release of all Indemnified Persons from all
liability arising out of such claim, proceeding, investigation or inquiry (B) shall be liable for any settlement effected without
their prior written consent (which consent shall not be unreasonably withheld, delayed or conditioned) or (C) shall have any obligation
hereunder to any Indemnified Person if it is ultimately decided in a final, non-appealable judgment by a court of competent jurisdiction
that such indemnification is prohibited by applicable Law, in which case the Indemnified Person shall promptly refund to Parent
or the Surviving Corporation the amount of all such expenses theretofore advanced pursuant hereto.
(c) During
the period commencing at the Effective Time and ending on the sixth (6th) anniversary of the Effective Time, the Surviving
Corporation shall (and Parent shall cause the Surviving Corporation to) maintain in effect directors’ and officers’
liability insurance in respect of acts or omissions occurring at or prior to the Effective Time, covering each person covered
by the Company’s currently in force directors’ and officers’ liability insurance (“Current Company
D&O Insurance”), on terms with respect to the coverage and amounts that are no less favorable than those of the
Current Company D&O Insurance; provided, however, that in satisfying its obligations under this Section 7.9(b),
Parent and the Surviving Corporation shall not be obligated to pay annual premiums in excess of three hundred percent (300%) of
the annual amount paid by the Company for coverage during its current coverage period, which amount is set forth in Section 7.9(b)
of the Company Disclosure Letter (such three hundred percent (300%) amount, the “Maximum Annual Premium”);
provided that, if the annual premiums of such insurance coverage exceed such amount, Parent and the Surviving Corporation
shall be obligated to obtain a policy with the greatest coverage available for the Maximum Annual Premium. Prior to the Effective
Time, notwithstanding anything to the contrary set forth in this Agreement, the Company may purchase a six (6) year “tail”
prepaid policy on the Current Company D&O Insurance. In the event that the Company elects to purchase such a “tail”
policy prior to the Effective Time, the Surviving Corporation shall (and Parent shall cause the Surviving
Corporation to) maintain
such “tail” policy in full force and effect and continue to honor their respective obligations thereunder, in lieu
of all other obligations of Parent and the Surviving Corporation under the first sentence of this Section 7.9(b) for so
long as such “tail” policy shall be maintained in full force and effect.
(d) In
the event that Parent or the Surviving Corporation (or any of its successors or assigns) (i) consolidates with or merges into
any other Person and is not 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, in each such case, proper provision shall
be made so that the successors and assigns of Parent and the Surviving Corporation shall assume all of the obligations thereof
set forth in this Section 7.9.
7.10 Employee
Matters.
(a) For
a period of twelve (12) months following the Effective Time (or, if earlier, the date of termination of the applicable Continuing
Employee), the Surviving Corporation shall (and Parent shall cause the Surviving Corporation to) provide to each Continuing Employee
(i) a base salary or wage rate, as applicable, and annual cash bonus opportunity, in each case, that is not less favorable
than the base salary or wage rate (as applicable) and annual bonus opportunity provided to such Continuing Employee immediately
prior to the Effective Time and (ii) other compensation and benefits (excluding benefits provided pursuant to any defined
benefit pension plans) that in the case of this clause (ii) are either, in Parent’s sole discretion, (A) taken as a
whole, at least as favorable in the aggregate to the other compensation and benefits provided to such Continuing Employee immediately
prior to the Effective Time or (B) taken as a whole, substantially similar to the other compensation and benefits provided
to similarly situated employees of Parent and its Affiliates (other than the Company or the Surviving Corporation).
(b) To
the extent that a Plan or any other employee benefit plan or other compensation or severance arrangement of the Surviving Corporation
or any of its Subsidiaries (together, the “Company Plans”) or any employee benefit plan or other compensation
or severance arrangement of Parent is made available to any Continuing Employee on or following the Effective Time, the Surviving
Corporation shall (and Parent shall cause the Surviving Corporation to) credit such Continuing Employee for all service with the
Company and its Subsidiaries prior to the Effective Time solely for purposes of eligibility to participate, vesting and entitlement
to vacation/paid time off benefits where length of service is relevant, in any case, to the same extent as such Continuing Employee
was entitled prior to the Effective Time under any similar Plan; provided, however, that such service need not be credited
(i) to the extent that it would result in duplication of coverage or benefits, (ii) under a newly established plan for which prior
service is not taken into account or with respect to any equity based compensation or (iii) if it results in benefit accruals
under a defined benefit plan. In addition, and without limiting the generality of the foregoing, Parent shall (or shall cause
the Surviving Corporation to): (A) ensure that each Continuing Employee shall be immediately eligible to participate, without
any waiting time, in any and all employee benefit plans sponsored by the Surviving Corporation and its Subsidiaries (other than
the Company Plans) (such plans, collectively, the “New Plans”) to the
extent coverage under
any such New Plan replaces coverage under a comparable Company Plan in which such Continuing Employee participates immediately
before the Effective Time; (B) for purposes of each New Plan providing medical, dental, pharmaceutical, vision and/or disability
benefits to any Continuing Employee from and after the Effective Time, (1) cause all waiting periods, pre-existing condition
exclusions, evidence of insurability requirements and actively-at-work requirements of such New Plan to be waived for such Continuing
Employee and his or her covered dependents to the extent such waiting periods, pre-existing condition exclusions, evidence of
insurability requirements or actively-at-work requirements were waived or satisfied under the comparable Plan, and (2) recognize,
or cause to be recognized, any eligible expenses incurred by such Continuing Employee and his or her covered dependents under
a Plan during the portion of the plan year prior to the Effective Time to be taken into account under such New Plan for purposes
of satisfying all deductible, coinsurance and maximum out-of-pocket requirements applicable to such Continuing Employee and his
or her covered dependents for the applicable plan year as if such amounts had been paid in accordance with such New Plan; and
(C) ensure that the accounts of such Continuing Employees under any New Plan that is a flexible spending plan are credited with
any unused balance in the account of such Continuing Employee under the applicable Company Plan solely to the extent the Continuing
Employee commenced participation in the New Plan in the same plan year as the unused balance was credited to the corresponding
Plan.
(c) Notwithstanding
anything to the contrary set forth in this Agreement, no provision of this Agreement shall be deemed to (i) guarantee employment
for any Person for any period of time for, or preclude the ability of Parent or the Surviving Corporation to terminate the employment
of, any Continuing Employee for any reason, (ii) require Parent or the Surviving Corporation to continue any Plan, Company Plan
or New Plan or prevent the amendment, modification or termination thereof after the Effective Time, or (iii) be treated as an
amendment or other modification of any Plan, Company Plan or New Plan. The provisions of this Section 7.10 are solely for
the benefit of the parties to this Agreement, and no Continuing Employee (including any beneficiary or dependent thereof) or other
Person shall be regarded for any purpose as a third party beneficiary of this Agreement, and no provision of this Section 7.10
shall create such rights in any such persons.
(d) Unless
otherwise requested by Parent at least ten (10) days prior to the Closing, the Company shall terminate any and all Plans intended
to qualify under Section 401(a) of the Code that include a cash or deferred arrangement intended to satisfy the provisions of
Section 401(k) of the Code (the “Company 401(k) Plans”), such termination effective not later than the day
immediately preceding the Closing. In the event of such termination, the Company shall provide Parent with evidence that such
Company 401(k) Plans have been terminated pursuant to resolution (the form and substance of which shall be subject to prior review
and approval by Parent) of the Company Board. In the event of such termination, Parent shall cause each Continuing Employee who
is a participant in a Company 401(k) Plan to be allowed to participate, effective as of the Closing, in a tax qualified plan which
includes a cash or deferred arrangement intended to satisfy the provisions of Section 401(k) of the Code that is sponsored and
maintained by Parent or an Affiliate of Parent (the “Parent 401(k) Plan”) and such Continuing Employee shall
be credited with eligibility service and vesting service for all periods
of service with the
Company or any other entity to the extent so credited with such service under the applicable Company 401(k) Plan. In addition,
Parent shall, or shall cause an Affiliate to, take all actions necessary so that the Parent 401(k) Plan will accept rollover contributions
of “eligible rollover distributions” (within the meaning of Section 401(a)(31) of the Code, inclusive of loans) from
the Company 401(k) Plan.
7.11 Obligations
of Acquisition Sub. Parent shall take all action necessary to cause Acquisition Sub and the Surviving Corporation to
perform their respective obligations under this Agreement before and after the Effective Time, as applicable (including, with
respect to Acquisition Sub, to consummate the transactions contemplated hereby upon the terms and subject to the conditions set
forth in this Agreement).
7.12 Notification
of Certain Matters.
(a) At
all times during the period commencing on the date of this Agreement and continuing until the earlier to occur of the termination
of this Agreement pursuant to Article IX and the Effective Time, the Company shall give prompt notice to Parent and
Acquisition Sub upon becoming aware that any representation or warranty made by it in this Agreement has become untrue or inaccurate
in any material respect, or of any failure of the Company to comply with or satisfy in any material respect any covenant, condition
or agreement to be complied with or satisfied by it under this Agreement, in any such case if and only to the extent that such
untruth or inaccuracy, or such failure, would reasonably be expected to cause any of the conditions to the obligations of Parent
and Acquisition Sub to consummate the transactions contemplated hereby set forth in paragraphs (C)(2) and (C)(3) of Annex A
to fail to be satisfied at the then scheduled expiration of the Offer; provided, however, that no such notification
shall affect or be deemed to modify any representation or warranty of the Company set forth in this Agreement or the conditions
to the obligations of Parent and Acquisition Sub to consummate the transactions contemplated by this Agreement or the remedies
available to the parties hereunder or update any section of the Company Disclosure Letter; and provided further, that the
terms and conditions of the Confidentiality Agreement shall apply to any information provided to Parent pursuant to this Section 7.12(a).
(b) At
all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur
of the termination of this Agreement pursuant to Article IX and the Effective Time, Parent shall give prompt notice
to the Company upon becoming aware that any representation or warranty made by Parent or Acquisition Sub in this Agreement has
become untrue or inaccurate in any material respect, or of any failure of Parent or Acquisition Sub to comply with or satisfy
in any material respect any covenant, condition or agreement to be complied with or satisfied by it under this Agreement, in any
such case if and only to the extent that such untruth or inaccuracy, or such failure, would reasonably be expected to prevent,
materially delay or materially impair the ability of Parent and Acquisition Sub to consummate the Merger and the transactions
contemplated by this Agreement (including the Offer); provided, however, that no such notification shall affect or be deemed
to modify any representation or warranty of Parent or Acquisition Sub set forth in this Agreement or the conditions to the obligations
of the Company to consummate the transactions
contemplated by this
Agreement or the remedies available to the parties hereunder; and provided further, that the terms and conditions of the
Confidentiality Agreement shall apply to any information provided to the Company pursuant to this Section 7.12(b).
(c) At
all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur
of the termination of this Agreement pursuant to Article IX and the Effective Time, each of the Company and Parent
shall give prompt notice to the other of (i) any written notice from any Person alleging that the approval or consent of such
Person is or may be required in connection with the Offer, the Merger or the other transactions contemplated by this Agreement,
and (ii) any written notice or other communication from any Governmental Authority in connection with the Offer, the Merger or
the other transactions contemplated by this Agreement; provided, however, that no such notification shall affect or be
deemed to modify any representation or warranty of any party set forth in this Agreement or the conditions to the obligations
of the parties to consummate the transactions contemplated by this Agreement or the remedies available to the parties hereunder
or update any section of the Company Disclosure Letter; and provided further, that the terms and conditions of the Confidentiality
Agreement shall apply to any information provided pursuant to this Section 7.12(c).
7.13 Certain
Litigation. The Company shall promptly advise Parent of any litigation commenced after the date hereof against the Company
or any of its directors (in their capacity as such) by any Company Stockholders (on their own behalf or on behalf of the Company)
relating to this Agreement or the transactions contemplated hereby, and shall keep Parent reasonably informed regarding any such
litigation. The Company shall give Parent the opportunity to participate with the Company in the defense or settlement of any
such stockholder litigation and shall consider Parent’s views with respect to such stockholder litigation. Notwithstanding
anything to the contrary contained herein, the Company shall not settle such Legal Proceedings relating to this Agreement or the
transactions contemplated hereby without the prior written consent of Parent (which shall not be unreasonably withheld, delayed
or conditioned).
7.14 Compensation
Arrangements. Prior to the Effective Time, the Company (acting through the Compensation Committee of the Company Board
or its independent directors, to the extent required under applicable Law) will take all steps that may be necessary or advisable
to cause each Plan, in all such cases in which any such Plan is amended, modified or supplemented or pursuant to which consideration
is or shall be paid to such officers, directors or employees, to satisfy the requirements of the non-exclusive safe harbor set
forth in Rule 14d-10(d) of the Exchange Act. The Company shall deliver to Parent copies of all resolutions and consents
prepared in connection with the actions required under this Section 7.14, and shall provide Parent with a reasonable opportunity
to review and comment on any drafts of such materials and give reasonable and good faith consideration to any comments proposed
by Parent.
7.15 Certain
Tax Matters. Between the date of this Agreement and the Effective Time or the earlier termination of this Agreement
pursuant to Article IX, (a) the Company and each of its Subsidiaries shall promptly notify Parent of any suit, claim,
action, investigation, proceeding or audit pending against or with respect to the Company or any of its Subsidiaries in respect
of
any material Tax and
(b) the Company and each of its Subsidiaries will retain all books, documents and records necessary for the preparation of Tax
Returns.
7.16 NASDAQ
De-Listing; Exchange Act Deregistration. Prior to the Effective Time, the Company shall cooperate with Parent and shall
take, or cause to be taken, all actions, and do or cause to be done all things reasonably requested by Parent in connection with
the de-listing by the Surviving Corporation of the Company Common Stock from NASDAQ and the deregistration of the Company Common
Stock under the Exchange Act as promptly as practicable after the Effective Time.
7.17 Cooperation.
Prior to the Closing Date, the Company shall use its reasonable best efforts to provide, and cause each of its Subsidiaries and
representatives to provide, to Parent and Acquisition Sub such cooperation reasonably requested by Parent in connection with any
Financing, including the syndication of any bank financing and any public or private offering of debt and/or equity securities
of Parent (including marketing efforts in connection therewith); provided that such requested cooperation does not unreasonably
interfere with the ongoing operations of the Company or any of its Subsidiaries. Such cooperation shall include using reasonable
best efforts to: (a) furnish Parent and Acquisition Sub with all historical financial statements and business and other financial
data and information of the Company and its Subsidiaries as may be reasonably requested by Parent in connection with any Financing,
including all financial information required by the Financing Sources and all financial statements, financial data, audit reports
and other information regarding the Company and its Subsidiaries required by Regulation S-X and Regulation S-K under the Securities
Act for an offering of securities of Parent on a registration statement filed with the SEC, in each case, of the type that would
permit the Company’s independent auditors to deliver customary “comfort” (including customary “negative
assurance” comfort) from independent auditors in connection with such offering which such auditors are prepared to provide
upon completion of customary procedures (collectively, the “Required Information”); (b) participate, upon reasonable
notice, in meetings, presentations, road shows, due diligence sessions, drafting sessions and sessions with rating agencies in
connection with any Financing; (c) assist with the preparation of customary materials for rating agency presentations, marketing
materials, confidential information memoranda, lender presentations, offering documents and other documents necessary for any
Financing; (d) cause its independent auditors to deliver accountants’ comfort letters (including customary negative assurances);
(e) cause its independent auditors to deliver customary accountants’ consents to the use of their reports in any material
relating to any Financing as reasonably requested by Parent; (f) reasonably cooperate with the due diligence of the arrangers
or underwriters of any Financing; (g) execute and deliver customary definitive financing documents to the extent reasonably requested
by Parent, including certificates, and other documents, to the extent reasonably requested by Parent; provided that the
effectiveness of any definitive documentation executed by the Company or any Company Subsidiary shall be subject to the consummation
of the Merger; and (h) deliver at least five (5) days prior to the Closing Date all customary documentation and other information
reasonably requested by the Financing Sources at least five (5) days prior to such date that is required by bank regulatory authorities
under applicable “know-your-customer” and anti-money laundering rules and regulations, including the Patriot Act.
The Company hereby consents to the use of its and the its Subsidiaries’
logos in connection
with any Financing; provided that such logos are used solely in a manner that is not intended to or reasonably likely to
harm or disparage the Company or any of its Subsidiaries or the reputation or goodwill of the Company or any of its Subsidiaries.
The Company will use reasonable best efforts to provide Parent with updates to the Required Information so that marketing materials
used in any Financing do not contain any untrue statement of a material fact or omit to state a fact necessary to make the statements
contained therein not misleading as a result of a misstatement or omission with respect to the Required Information, other than,
in each case, with respect to information supplied by or on behalf of Parent or Acquisition Sub. Notwithstanding any other provision
set forth herein, in the Confidentiality Agreement or in any other agreement between the Company and Parent (or its Affiliates),
the Company agrees that Parent and its Affiliates may share information regarding the Company and its Subsidiaries, including
customary projections with respect to the Company and its business, with the Financing Sources, and that Parent, its Affiliates
and such Financing Sources may share such information with potential Financing Sources in connection with any marketing efforts
in connection with any Financing, provided that the recipients of such information agree to customary confidentiality arrangements.
The Company shall have the right to review and comment on the portions of such marketing materials relating to the Company prior
to the dissemination of such materials to any counterparties to any proposed financing transaction (or filing with any Governmental
Authority); provided that the Company shall communicate in writing its comments, if any, to Parent and its counsel within
a reasonable period of time under the circumstances and consistent with the time accorded to other participants who were asked
to review and comment on such marketing materials. Parent shall promptly, upon request by the Company, reimburse the Company for
all reasonable and documented out-of-pocket costs and expenses incurred by the Company or any of its Subsidiaries and their respective
representatives in connection with any Financing, including the cooperation of the Company and its Subsidiaries and representatives
contemplated by this Section 7.17. Parent and Acquisition Sub acknowledge and agree that obtaining any financing is not
a condition to the Offer or to the Closing.
Article VIII
CONDITIONS TO THE MERGER
8.1 Conditions.
The respective obligations of Parent, Acquisition Sub and the Company to consummate the Merger shall be subject to the satisfaction
or waiver (where permissible under applicable Law) prior to the Effective Time, of each of the following conditions:
(a) Purchase
of Company Shares. Acquisition Sub shall have irrevocably accepted for payment all of the Company Shares validly tendered
and not withdrawn pursuant to the Offer.
(b) No
Legal Prohibition. No Governmental Authority of competent jurisdiction shall have (i) enacted, issued or promulgated
any Law that is in effect as of immediately prior to the Effective Time and has the effect of making the Merger illegal or which
has the effect of restricting, prohibiting or otherwise preventing the consummation of the
Merger, or (ii) issued
or granted any Order that is in effect as of immediately prior to the Effective Time and has the effect of making the Merger illegal
or which has the effect of restricting, prohibiting or otherwise preventing the consummation of the Merger (collectively, a “Restraint”).
Article IX
TERMINATION, AMENDMENT AND WAIVER
9.1 Termination
Prior to the Acceptance Time. This Agreement may be terminated and the Offer may be abandoned at any time prior to the
Acceptance Time (it being agreed that the party hereto terminating this Agreement pursuant to this Section 9.1 shall
give prompt written notice of such termination to the other party or parties hereto and that any termination by Parent also shall
be an effective termination by Acquisition Sub):
(a) by
mutual written agreement of Parent and the Company; or
(b) by
either Parent or the Company, (i) if the Acceptance Time shall not have occurred on or before July 14, 2016 (the “Termination
Date”), or (ii) if there exists any Restraint having the effect set forth in Section 8.1(b), or which would
enjoin, restrain, prevent or prohibit the commencement or closing of the Offer, or that would make the commencement or closing
of the Offer illegal (which in each case, has become final and non-appealable); provided that the right to terminate this
Agreement pursuant to this Section 9.1(b) shall not be available to any party hereto whose action or failure to fulfill
any obligation under this Agreement has been the principal cause of or resulted in (x) any of the conditions to the Offer
set forth in Annex A having failed to be satisfied and such action or failure to act constitutes a material breach of this
Agreement, or (y) the expiration or termination of the Offer in accordance with the terms of this Agreement and the Offer
without Acquisition Sub having accepted for payment any Company Shares tendered pursuant to the Offer and such action or failure
to act constitutes a material breach of this Agreement; or
(c) by
the Company, in the event that (i) the Company is not then in material breach of this Agreement, (ii) Parent and/or Acquisition
Sub shall have breached or otherwise violated any of their respective covenants or agreements, or other obligations under this
Agreement, or any of the representations and warranties of Parent and Acquisition Sub set forth in this Agreement shall have become
inaccurate, which breach, violation or inaccuracy, individually or in the aggregate with other such breaches, violations or inaccuracies,
would reasonably be expected to prevent the consummation of the Offer prior to the Termination Date, and (iii) such breach, violation
or inaccuracy described in clause (ii) is not capable of being cured by the Termination Date or if curable through use of reasonable
best efforts, is not cured by the twentieth (20th) Business Day following the Company’s delivery of written notice
to Parent of such breach, violation or inaccuracy (or, if less than twenty (20) Business Days prior to the Termination Date, prior
to the Termination Date); or
(d) by
Parent, in the event that (i) Parent and Acquisition Sub are not then in material breach of this Agreement, (ii) the Company shall
have breached or otherwise violated
any of its covenants
or agreements or other obligations under this Agreement, or any of the representations and warranties of the Company set forth
in this Agreement shall have become inaccurate, in either case such that the conditions to the Offer set forth in Annex A
are not capable of being satisfied by the Termination Date, or there has been a Company Material Adverse Effect such that the
conditions to the Offer set forth in Annex A are not capable of being satisfied by the Termination Date, and (iii) such
breach, violation, inaccuracy or Company Material Adverse Effect described in clause (ii) is not capable of being cured by the
Termination Date or if curable through use of reasonable best efforts, is not cured by the twentieth (20th) Business
Day following Parent’s delivery of written notice to the Company of such breach, violation, inaccuracy or Company Material
Adverse Effect (or, if less than twenty (20) Business Days prior to the Termination Date, prior to the Termination Date); or
(e) by
the Company, in order to enter into an Alternative Acquisition Agreement with respect to a Superior Proposal in accordance with
the terms set forth in Section 7.4(b); provided that substantially concurrent with the termination of this Agreement,
the Company enters into an Alternative Acquisition Agreement providing for a Superior Proposal that did not involve a material
breach of this Agreement and prior to or concurrent with such termination, the Company pays Parent the Company Termination Fee
payable to Parent pursuant to Section 9.4(b)(ii);
(f) by
Parent, in the event that (i) the Company Board or any committee thereof shall have effected or resolved to effect a Company
Board Recommendation Change (provided that Parent’s right to terminate this Agreement pursuant to this subclause
(i) shall expire at 5:00 p.m. (New York City time) on the fifteenth (15th) day following the date on which the event
first permitting such termination occurred), (ii) the Company shall have failed to include the Company Board Recommendation
in the Schedule 14D-9, (iii) the Company Board fails to publicly recommend against any Acquisition Proposal within ten (10) Business
Days of the request of Parent to do so or fails to reaffirm (publicly, if so requested) the Company Board Recommendation within
ten (10) Business Days of Parent’s request to do so, (iv) a tender or exchange offer relating to the Company’s
securities shall have been commenced by a Person unaffiliated with Parent and the Company shall not have sent to its security
holders pursuant to Rule 14D-9 promulgated under the Exchange Act, within ten (10) Business Days after such tender or exchange
offer is first published, sent or given, a statement disclosing that the Company Board recommends rejection of such tender or
exchange offer, or (v) the Company shall have materially breached its obligations under Section 6.2 or Section 7.4,
which material breach either results in an Acquisition Proposal or materially hinders, materially delays or prevents the consummation
of the transactions contemplated by this Agreement; or
(g) by
the Company or Parent, at any time on or after the earlier to occur of (i) sixty (60) days following substantial compliance
with a request for additional information or documentary material under 16 CFR 803.20 from any Governmental Authority with respect
to the transactions contemplated by this Agreement pursuant to the HSR Act with respect to which any filing under Section 7.2(b)
has been made, and (ii) March 14, 2016, in the event that the Regulatory Condition has not been satisfied on or prior to the
date of such termination (provided that the right to terminate this Agreement pursuant to this Section 9.1(g) shall
not be available to
either party if a representative
of a Governmental Authority of competent jurisdiction with the authority to make a recommendation has indicated that he or she
has recommended that the Regulatory Condition will be satisfied within forty-five (45) days of the proposed date of termination).
9.2 Termination
Before or After Acceptance Time and Prior to Effective Time. Notwithstanding anything to the contrary contained herein,
this Agreement may be terminated and the Offer and/or the Merger may be abandoned, at any time prior to the Effective Time (it
being agreed that the party hereto terminating this Agreement pursuant to this Section 9.2 shall give prompt written
notice of such termination to the other party or parties hereto), by either Parent or the Company in the event of a Restraint
(which has become final and non-appealable).
9.3 Notice
of Termination; Effect of Termination. Any proper and valid termination of this Agreement pursuant to Section 9.1
or Section 9.2 shall be effective immediately upon the delivery of written notice of the terminating party to
the other party or parties hereto, as applicable, specifying the provision hereof pursuant to which such termination is made.
In the event of the termination of this Agreement pursuant to Section 9.1 or Section 9.2, this Agreement
shall be of no further force or effect without liability of any party or parties hereto, as applicable (or any director, officer,
employee, Affiliate, agent or other representative of such party or parties) to the other party or parties hereto, as applicable,
except (a) for the terms of Section 7.5, this Section 9.3, Section 9.4 and Article X,
and the definitions of all defined terms appearing in such Sections, each of which shall survive the termination of this Agreement,
and (b) that nothing herein shall relieve any party or parties hereto, as applicable, from any liability or damages resulting
from any fraud or willful or intentional breach of this Agreement that occurs prior to such termination, in which case the aggrieved
party shall be entitled to all remedies available at law or in equity. In addition to the foregoing, no termination of this Agreement
shall affect the obligations of the parties hereto set forth in the Confidentiality Agreement, all of which obligations shall
survive termination of this Agreement in accordance with their terms.
9.4 Fees
and Expenses.
(a) General.
Except as set forth in this Section 9.4, all fees and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party or parties, as applicable, incurring such expenses whether or not
the Offer and/or the Merger is consummated.
(b) Company
Termination Fee.
(i) In
the event that (A) this Agreement is terminated (1) by Parent or the Company pursuant to Section 9.1(b) (provided,
that (x) the Minimum Condition has not been satisfied at the time of such termination pursuant to Section 9.1(b), (y) the
condition to the Offer set forth in clause (A) of Annex A is satisfied at the time of such termination pursuant to Section
9.1(b), and (z) the condition to the Offer set forth in clause (C)(1) of Annex A is satisfied at the time of such
termination pursuant to Section 9.1(b)), or (2) by Parent pursuant to Section 9.1(d), (B) following the execution
and delivery of this Agreement and prior to such termination of this Agreement, an Acquisition Proposal shall have been publicly
announced or shall have become publicly disclosed and, in either case, shall not have been publicly withdrawn prior to termination
of this
Agreement (any such
Acquisition Proposal, a “Disclosed Transaction”), and (C) within twelve (12) months following such termination
of this Agreement, the Company enters into a definitive agreement with any third party with respect to any Competing Acquisition
Transaction that is later consummated or any Competing Acquisition Transaction is consummated, the Company shall pay to Parent
$230,000,000 (the “Company Termination Fee”), by wire transfer of immediately
available funds to an account or accounts designated in writing by Parent, upon the consummation of such Competing Acquisition
Transaction. For purposes of the foregoing, a “Competing Acquisition Transaction” shall have the same meaning
as an “Acquisition Transaction” except that (i) all references therein to (x) “more than twenty percent (20%)”
shall be deemed to be references to “more than fifty percent (50%)” and (y) “less than eighty percent (80%)”
shall be deemed to be references to “less than fifty percent (50%),” and (ii) a Competing Acquisition Transaction
shall not include a transaction of the type described in clause (iv) of the definition of Acquisition Transaction unless such
transaction (1) is a Competing Acquisition Transaction without regard to clause (iv) of the definition of Acquisition Transaction,
(2) is a Disclosed Transaction, or (3) together with other transactions entered into by the Company during such twelve (12) month
period, results in the grant of exclusive (or exclusive except as to the Company and/or its Subsidiaries) commercialization rights
for the Company Product listed as item 1 under the heading “Company Product” on Section 1.1(a) of the Company
Disclosure Letter for substantially all major markets.
(ii) In
the event that this Agreement is terminated by the Company pursuant to Section 9.1(e), the Company shall pay to Parent
the Company Termination Fee by wire transfer of immediately available funds to an account or accounts designated in writing by
Parent, as a condition to the effectiveness of such termination.
(iii) In
the event that this Agreement is terminated by Parent pursuant to Section 9.1(f), the Company shall pay to Parent
the Company Termination Fee, as promptly as practicable (and in any event within two (2) Business Days following such termination),
by wire transfer of immediately available funds to an account or accounts designated in writing by Parent.
(iv) The
payment by the Company of the Company Termination Fee pursuant to this Section 9.4(b) shall be the sole and exclusive remedy
of Parent and Acquisition Sub in the event of termination of this Agreement under circumstances requiring the payment of the Company
Termination Fee pursuant to this Section 9.4(b), other than with respect to claims for, arising out of or in connection
with fraud or in the case of a willful material breach or intentional material breach of this Agreement.
(c) Parent
Termination Fee.
(i) Subject
to the terms of this Section 9.4(c), in the event that (i) this Agreement is terminated (1) by Parent or the Company pursuant
to Section 9.1(b), or (2) by the Company or Parent pursuant to Section 9.1(g), (ii) at the time of such termination
of this
Agreement, the Regulatory
Condition has not been satisfied, and (iii) the failure of the Regulatory Condition to be satisfied did not result from any breach
by the Company of any covenant or obligation set forth in this Agreement, Parent shall (A) pay to the Company $400,000,000 (the
“Parent Termination Fee”), as promptly as practicable (and in any event within two (2) Business Days following
such termination), by wire transfer of immediately available funds to an account or accounts designated in writing by the Company,
and (B) enter into a loan agreement with the Company consistent with the terms set forth on Section 9.4(c)(i) of the Company
Disclosure Letter, pursuant to which Parent commits to loan the Company up to an aggregate principal amount of $350,000,000 (the
“Parent Loan”) upon written notice from the Company (and Parent and the Company shall use reasonable best efforts
to enter into such loan agreement within twenty (20) Business Days following such notice).
(ii) The
payment by Parent of the Parent Termination Fee and the extension by Parent of the Parent Loan to the Company pursuant to this
Section 9.4(c) shall be the sole and exclusive remedy of the Company in the event of termination of this Agreement under
circumstances requiring the payment of the Parent Termination Fee pursuant to this Section 9.4(c), other than with respect
to claims for, arising out of or in connection with fraud or in the case of a willful material breach or intentional material
breach of this Agreement.
(d) Single
Payment Only. The parties hereto acknowledge and hereby agree that in no event shall (i) the Company be required to pay the
Company Termination Fee on more than one (1) occasion, whether or not the Company Termination Fee may be payable under more than
one provision of this Agreement at the same or at different times and the occurrence of different events, and (ii) Parent be required
to pay the Parent Termination Fee or extend the Parent Loan to the Company on more than one (1) occasion.
(e) Consequence
of Non-Payment. The Company and Parent acknowledge that the agreements contained in Section 9.4(b) and Section 9.4(c)
are an integral part of the transactions contemplated by this Agreement, and that, without these agreements, neither Parent
nor the Company would enter into this Agreement; accordingly, if the Company or Parent, as applicable, fails to promptly pay or
loan any amount due pursuant to Section 9.4(b) or Section 9.4(c) (including the return of the Parent Termination
Fee to Parent), as applicable, and, in order to obtain such payment or loan, Parent commences a suit that results in a judgment
against the Company for the Company Termination Fee or the return of the Parent Termination Fee or the Company commences a suit
that results in a judgment against Parent for the Parent Termination Fee or the extension by Parent of the Parent Loan to the
Company, as the case may be, the Company or Parent, as applicable, shall pay the other party its costs and expenses (including
attorneys’ fees) in connection with such suit, together with interest at a rate per annum equal to the prime lending rate
prevailing during the period as published in The Wall Street Journal.
(f) Transfer
Taxes. Except as expressly provided in Section 3.8(d), all transfer, documentary, sales, use, stamp, registration and
other similar Taxes and fees incurred in connection with the transaction contemplated by this Agreement shall be paid by Parent
and Acquisition Sub when due.
9.5 Amendment.
Subject to applicable Law and subject to the other provisions of this Agreement, this Agreement may be amended by the parties
hereto at any time prior to the Effective Time by execution of an instrument in writing signed on behalf of each of Parent, Acquisition
Sub and the Company; provided, however, that (a) no amendment shall be made to this Agreement that requires the approval
of Company Stockholders under Delaware Law or the rules of NASDAQ, without such approval, (b) this Section 9.5, Section
10.6, Section 10.9, Section 10.10, Section 10.11 and Section 10.14 (and any related definitions
insofar as they affect such Sections) may not be amended, supplemented, waived or otherwise modified in a manner adverse to the
Financing Sources, in each case, without the prior written consent of the Financing Sources.
9.6 Extension;
Waiver. At any time and from time to time prior to the Effective Time, any party or parties hereto may, to the extent
legally allowed and except as otherwise set forth herein, (a) extend the time for the performance of any of the obligations or
other acts of the other party or parties hereto, as applicable, (b) waive any inaccuracies in the representations and warranties
made to such party or parties hereto contained herein or in any document delivered pursuant hereto and (c) waive compliance
with any of the agreements or conditions for the benefit of such party or parties hereto contained herein. Any agreement on the
part of a party or parties hereto to any such extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party or parties, as applicable. Any delay in exercising any right under this Agreement shall not constitute
a waiver of such right. The conditions to each of the parties’ obligations to consummate the Merger are for the sole benefit
of such party and may be waived by such party in whole or in part to the extent permitted by applicable Law.
Article X
GENERAL PROVISIONS
10.1 Survival
of Representations, Warranties and Covenants. The representations, warranties and covenants of the Company, Parent and
Acquisition Sub contained in this Agreement shall terminate at the Effective Time, and only the covenants that by their terms
survive the Effective Time shall so survive the Effective Time in accordance with their respective terms.
10.2 Notices.
All notices and other communications hereunder shall be in writing and shall be deemed to have been duly delivered and received
hereunder (i) two (2) Business Days after being sent by registered or certified mail, return receipt requested, postage prepaid,
(ii) one (1) Business Day after being sent for next Business Day delivery, fees prepaid, via a reputable nationwide overnight
courier service, or (iii) immediately upon delivery by hand or by facsimile (with a written or electronic confirmation of delivery),
in each case to the intended recipient as set forth below:
(a) if to Parent or Acquisition Sub, to:
c/o Celgene Corporation
86 Morris Avenue
Summit, New Jersey
07901
Attention: General
Counsel
Facsimile
No.: (908) 673-2771
with a copy
(which shall not constitute notice) to:
Proskauer
Rose LLP
Eleven Times
Square
New York,
New York 10036-8299
| Attention: | Robert A. Cantone |
Daniel I. Ganitsky
Ori Solomon
Facsimile
No.: (212) 969-2900
(b) if to the Company,
to:
Receptos,
Inc.
3033 Science
Park Road, Suite 300
San Diego,
California 92121
Attention:
General Counsel
Facsimile
No.: (858) 587-2659
with a copy
(which shall not constitute notice) to:
Latham &
Watkins LLP
885 Third
Avenue
New York,
New York 10022-4834
| Attention: | Charles K. Ruck |
R. Scott Shean
Facsimile
No.: (212) 751-4864
10.3 Assignment.
No party may assign (by operation of Law or otherwise) either this Agreement or any of its rights, interests, or obligations hereunder
without the prior written approval of the other parties, except that Acquisition Sub may assign, in its sole discretion, any or
all of its rights, interests, or obligations hereunder to any direct wholly owned Subsidiary of Parent without the prior written
approval of the Company. Subject to the preceding sentence, this Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their respective successors and permitted assigns. Any purported assignment in violation of this Agreement
will be void ab initio.
10.4 Confidentiality.
Parent, Acquisition Sub and the Company hereby acknowledge that Parent and the Company have previously executed a Confidentiality
Agreement, dated as of August 28, 2013 (as amended, the “Confidentiality Agreement”), which will continue in
full force and effect in accordance with its terms.
10.5 Entire
Agreement. This Agreement (and the schedules, annexes and exhibits hereto) and the documents and instruments and
other agreements among the parties hereto as contemplated by or referred to herein, including the Company Disclosure Letter, the
Support Agreement and the Annexes hereto, constitute the entire agreement among the parties with respect to the subject matter
hereof and supersede all prior agreements and understandings, both written and oral, among the parties with respect to the subject
matter hereof; provided, however, the Confidentiality Agreement shall not be superseded, shall survive any termination
of this Agreement and shall continue in full force and effect until the earlier to occur of (a) the Effective Time and (b) the
date on which the Confidentiality Agreement expires in accordance with its terms or is validly terminated by the parties thereto.
EACH PARTY HERETO AGREES THAT, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS AGREEMENT, NEITHER PARENT, ACQUISITION
SUB OR ANY OF THEIR AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES OR REPRESENTATIVES, ON THE ONE HAND, NOR THE COMPANY OR ANY OF
ITS AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES OR REPRESENTATIVES, ON THE OTHER HAND, MAKES ANY REPRESENTATIONS OR WARRANTIES
TO THE OTHER, AND EACH PARTY HEREBY DISCLAIMS ANY OTHER REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED (INCLUDING ANY IMPLIED
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE), OR AS TO THE ACCURACY OR COMPLETENESS OF ANY OTHER INFORMATION,
MADE (OR MADE AVAILABLE BY) BY ITSELF OR ANY OF ITS REPRESENTATIVES, WITH RESPECT TO, OR IN CONNECTION WITH, THE NEGOTIATION,
EXECUTION OR DELIVERY OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, NOTWITHSTANDING THE DELIVERY OR DISCLOSURE TO
THE OTHER OR THE OTHER’S REPRESENTATIVES OF ANY DOCUMENTATION OR OTHER INFORMATION WITH RESPECT TO ANY ONE OR MORE OF THE
FOREGOING. NOTHING IN THIS SECTION 10.5 SHALL IMPACT ANY RIGHTS OF ANY PARTY TO THIS AGREEMENT IN RESPECT OF FRAUD.
10.6 Third
Party Beneficiaries. This Agreement is not intended to, and shall not, confer upon any Person (other than the parties
hereto and their respective successors and permitted assigns) any rights, benefits, obligations, liabilities or remedies hereunder,
except (a) as set forth in or contemplated by the terms and provisions of Section 7.9, (b) from and after the
Acceptance Time, the rights of holders of shares of the Company Common to receive the consideration pursuant to the Offer, as
set forth in Article II, and (c) from and after the Effective Time, the rights of holders of shares of the Company
Common Stock and other Company Securities to receive the consideration pursuant to the Merger, as set forth in Article III.
Notwithstanding anything herein to the contrary, the Financing Sources shall be express third party beneficiaries of this Section
10.6 and Section 9.5, Section 10.9, Section 10.10, Section 10.11 and Section 10.14, and
each of such Sections shall expressly inure to the benefit of the Financing Sources and the Financing Sources shall be entitled
to rely on and enforce the provisions of such Sections.
10.7 Severability.
In the event that any provision of this Agreement, or the application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or
unenforceable, the remainder
of this Agreement will continue in full force and effect and the application of such provision to other persons or circumstances
will be interpreted so as reasonably to effect the intent of the parties hereto. The parties further agree to negotiate in good
faith in an effort to replace such void or unenforceable provision of this Agreement with a valid and enforceable provision that
will achieve, to the maximum extent possible, the economic, business and other purposes of such void or unenforceable provision.
10.8 Remedies.
(a) Except
as otherwise provided herein (including in Section 9.4(b)(iv)), any and all remedies herein expressly conferred upon a
party will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon such party,
and the exercise by a party of any one remedy will not preclude the exercise of any other remedy.
(b) The
parties hereto hereby agree that irreparable damage would occur in the event that any provision of this Agreement were not performed
in accordance with its specific terms or were otherwise breached, and that money damages or other legal remedies would not be
an adequate remedy for any such damages. Accordingly, the parties hereto acknowledge and hereby agree that in the event of any
breach or threatened breach by the Company, on the one hand, or Parent and/or Acquisition Sub, on the other hand, of any of their
respective covenants or obligations set forth in this Agreement, the Company, on the one hand, and Parent and Acquisition Sub,
on the other hand, shall be entitled to an injunction or injunctions to prevent or restrain breaches or threatened breaches of
this Agreement, by the other (as applicable), and to specifically enforce the terms and provisions of this Agreement to prevent
breaches or threatened breaches of, or to enforce compliance with, the covenants and obligations of the other under this Agreement.
The Company, on the one hand, and Parent and Acquisition Sub, on the other hand hereby agree not to raise any objections to the
availability of the equitable remedy of specific performance to prevent or restrain breaches or threatened breaches of this Agreement
by such party (or parties), and to specifically enforce the terms and provisions of this Agreement to prevent breaches or threatened
breaches of, or to enforce compliance with, the covenants and obligations of such party (or parties) under this Agreement.
10.9 Governing
Law. This Agreement shall be governed by and construed in accordance with the Laws of the State of Delaware, regardless
of the Laws that might otherwise govern under applicable principles of conflicts of law thereof. Notwithstanding anything herein
to the contrary, the Company (on behalf of itself, its Subsidiaries and the directors, officers, employees, consultants, financial
advisors, accountants, legal counsel, investment bankers, and other agents, advisors and representatives of each of them) and
each of the other parties hereto agrees that any claim, controversy or dispute of any kind or nature (whether based upon contract,
tort or otherwise) against a Financing Source that is in any way related to this Agreement, the Merger, the Offer or any of the
other transactions contemplated by this Agreement, including any dispute arising out of or relating in any way to any Financing,
shall be governed by, and construed in accordance with, the laws of the State of New York without regard to conflict of law principles
(other than Sections 5-1401 and 5-1402 of the New York General Obligations Law); provided that (i) the interpretation of
the definition of Company Material Adverse Effect
and whether or not a
Company Material Adverse Effect has occurred, (ii) the determination of the accuracy of any representations made in this Agreement
and whether as a result of any inaccuracy thereof Parent, Merger Sub or their respective affiliates have the right to terminate
its obligations under this Agreement, or to decline to consummate the transactions pursuant to this Agreement and (iii) the determination
of whether the Offer, the Merger and the other transactions contemplated by this Agreement have been consummated in accordance
with the terms of this Agreement, in each case, shall be governed by, and construed and interpreted solely in accordance with,
the laws of the State of Delaware without giving effect to conflicts of laws principles that would result in the application of
the Law of any other state.
10.10 Consent
to Jurisdiction. Each of the parties hereto (a) irrevocably consents to the service of the summons and complaint and
any other process in any action or proceeding relating to the transactions contemplated by this Agreement, for and on behalf
of itself or any of its properties or assets, in accordance with Section 10.2 or in such other manner as may
be permitted by applicable Law, and nothing in this Section 10.10 shall affect the right of any party to serve legal
process in any other manner permitted by applicable Law; (b) irrevocably
and unconditionally consents and submits itself and its properties
and assets in any action or proceeding to the exclusive jurisdiction of the Court of Chancery of the State of Delaware (or, only
if the Court of Chancery of the State of Delaware declines to accept or does not have jurisdiction over a particular matter, any
federal or other state court within the State of Delaware) in the event any dispute or controversy
arises out of this Agreement or the transactions contemplated hereby, or for recognition and enforcement of any judgment in respect
thereof; (c) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave
from any such court; (d) agrees that any actions or proceedings arising in connection with this Agreement or the transactions
contemplated hereby shall be brought, tried and determined only in the Court of Chancery of the State of Delaware (or, only if
the Court of Chancery of the State of Delaware declines to accept or does not have jurisdiction over a particular matter, any
federal or other state court within the State of Delaware); (e) waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court
and agrees not to plead or claim the same; and (f) agrees that it will not bring any action relating to this Agreement or the
transactions contemplated hereby in any court other than the aforesaid courts. Each of Parent, Acquisition Sub and the Company
agrees that a final judgment in any action or proceeding in such courts as provided above shall be conclusive and may be enforced
in other jurisdictions by suit on the judgment or in any other manner provided by applicable Law. Notwithstanding anything herein
to the contrary, each of the parties hereto agrees (on behalf of itself, its Subsidiaries and the directors, officers, employees,
consultants, financial advisors, accountants, legal counsel, investment bankers, and other agents, advisors and representatives
of each of them) that it will not bring or support any action, cause of action, claim, cross-claim or third-party claim of any
kind or description, whether in law or in equity, whether in contract or in tort or otherwise, against the Financing Sources in
any way relating to this Agreement, the Merger, the Offer or any of the other transactions contemplated by this Agreement, including
any dispute arising out of or relating in any way to any Financing or the performance thereof or the transactions contemplated
thereby, in any forum other than exclusively in the Supreme Court of the State of New York, County of New York, or, if under applicable
Law exclusive jurisdiction
is vested in the federal
courts, the United States District Court for the Southern District of New York (and appellate courts thereof).
10.11 WAIVER
OF JURY TRIAL. EACH OF PARENT, ACQUISITION SUB AND THE COMPANY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR ANY FINANCING OR THE ACTIONS OF PARENT, ACQUISITION SUB OR THE COMPANY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND
ENFORCEMENT HEREOF OR THE ACTIONS OF ANY FINANCING SOURCE IN CONNECTION WITH ANY FINANCING (INCLUDING ANY ACTION, PROCEEDING OR
COUNTERCLAIM AGAINST ANY FINANCING SOURCE).
10.12 Disclosure
Letter References. The Company Disclosure Letter shall be arranged in numbered and lettered parts and subparts corresponding
to the numbered and lettered sections and subsections contained in this Agreement. The parties hereto agree that the disclosure
set forth in any particular section or subsection of the Company Disclosure Letter shall be deemed to be an exception to (or,
as applicable, a disclosure for purposes of) (i) the representations and warranties (or covenants, as applicable) of the Company
that are set forth in the corresponding section or subsection of this Agreement, and (ii) any other representations and warranties
(or covenants, as applicable) of the Company that are set forth in this Agreement, but in the case of this clause (ii) only if
the relevance of that disclosure as an exception to (or a disclosure for purposes of) such other representations and warranties
(or covenants, as applicable) is reasonably apparent on the face of such disclosure.
10.13 Counterparts.
This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall
become effective when one or more counterparts have been signed by each of the parties and delivered to the other party, it being
understood that all parties need not sign the same counterpart. Delivery of an executed counterpart of a signature page to
this Agreement by facsimile or other electronic transmission, including by e-mail attachment, shall be effective as delivery of
a manually executed counterpart of this Agreement.
10.14 No
Recourse to Financing Sources. Notwithstanding anything herein to the contrary, the Company (on behalf of itself, its
Subsidiaries and the directors, officers, employees, consultants, financial advisors, accountants, legal counsel, investment bankers,
and other agents, advisors and representatives of each of them) acknowledges and agrees that it (and such other Persons) shall
have no recourse against the Financing Sources, and the Financing Sources shall be subject to no liability or claims by the Company
(or such other Persons) in connection with the Financing or in any way relating to this Agreement or any of the transactions contemplated
hereby or thereby, whether at law, in equity, in contract, in tort or otherwise.
(Remainder of Page Intentionally Left
Blank)
IN WITNESS WHEREOF,
the undersigned have caused this Agreement to be executed by their respective duly authorized officers to be effective as of the
date first above written.
|
CELGENE CORPORATION |
|
|
|
|
By: |
/s/ Robert J. Hugin |
|
|
|
|
Name: |
Robert J. Hugin |
|
|
|
|
Title: |
Chairman and CEO |
|
|
|
|
STRIX CORPORATION |
|
|
|
|
By: |
/s/ Robert J. Hugin |
|
|
|
|
Name: |
Robert J. Hugin |
|
|
|
|
Title: |
CEO |
|
|
|
|
RECEPTOS, INC. |
|
|
|
|
By: |
/s/ Faheem Hasnain |
|
|
|
|
Name: |
Faheem Hasnain |
|
|
|
|
Title: |
President and Chief Executive Officer |
(Signature Page
to Agreement and Plan of Merger)
ANNEX A
CONDITIONS TO THE
OFFER
Notwithstanding any
other provision of the Offer, but subject to compliance with the terms and conditions of that certain Agreement and Plan of Merger,
dated as of July 14, 2015 (the “Agreement”) by and among Celgene Corporation, a Delaware corporation (“Parent”),
Strix Corporation, a Delaware corporation and a direct wholly owned subsidiary of Parent (“Acquisition Sub”),
and Receptos, Inc. a Delaware corporation (the “Company”) (capitalized terms that are used but not otherwise
defined in this Annex A shall have the respective meanings ascribed thereto in the Agreement), and in addition to
(and not in limitation of) the obligations of Acquisition Sub to extend the Offer pursuant to the terms and conditions of the
Agreement, Acquisition Sub shall not be required to accept for payment or, subject to any applicable rules and regulations of
the SEC (including Rule 14e-1(c) promulgated under the Exchange Act (relating to the obligation of Acquisition Sub to pay
for or return tendered Company Shares promptly after termination or withdrawal of the Offer)), pay for any Company Shares that
are validly tendered pursuant to the Offer and not withdrawn prior to the expiration of the Offer, and may extend, terminate or
amend the Offer, in each case, only to the extent provided by the Agreement, in the event that, as of immediately prior to the
Expiration Time (A) any waiting period (and extensions thereof) applicable to the transactions contemplated by this Agreement
under the HSR Act shall not have expired or been terminated; (B) the Minimum Condition shall not have been satisfied; or (C) any
of the following shall have occurred and continue to exist:
(1) any
Governmental Authority of competent jurisdiction shall have (i) enacted, issued or promulgated any Law that is in effect as of
immediately prior to the expiration of the Offer and has the effect of making the Offer, the acquisition of Company Shares by
Parent or Acquisition Sub or the Merger illegal or which has the effect of restricting, prohibiting or otherwise preventing the
consummation of the Offer, the acquisition of Company Shares by Parent or Acquisition Sub or the Merger, or (ii) issued or granted
any Order that is in effect as of immediately prior to the expiration of the Offer and has the effect of making the Offer, the
acquisition of Company Shares by Parent or Acquisition Sub or the Merger illegal or which has the effect of restricting, prohibiting
or otherwise preventing the consummation of the Offer, the acquisition of Company Shares by Parent or Acquisition Sub or the Merger;
(2)
(i) the representations and warranties set forth in Section 4.2(a) (Capitalization) (other than the representations and
warranties contained in Section 4.2(a)), and Section 4.3 (Corporate Power; Enforceability) shall not be true and
correct in all material respects at and as of the date of the Agreement and at and as of the Expiration Time, as though made at
and as of the Expiration Time, (ii) the representations and warranties set forth in Section 4.2(a) (Capitalization) shall
not be true and correct in all respects (other than in the case of exceptions relating to the outstanding shares of Company Common
Stock as of the Capitalization Date which would not result in cost, expense or liability to the Company, Parent and their Affiliates
exceeding $75,000,000 in the aggregate), at and as of the date of the Agreement and at and as of the Expiration Time, as though
made at and as of the Expiration Time, and (iii) each of the other representations and warranties of the Company in the Agreement
shall not be true and correct in all respects at and as of the date of the Agreement and at and as of the Expiration Time, as
though made at and as of the Expiration Time, except (x) in each case, representations and warranties that are expressly made
as of an earlier date shall be true and
correct only at and
as of such date, and (y) in the case of subclause (iii), where the failure of such representations or warranties to be true and
correct (without giving effect to any qualification as to “materiality” or “Company Material Adverse Effect”
qualifiers set forth therein) would not, individually or in the aggregate, have or reasonably be expected to have a Company Material
Adverse Effect;
(3) the
Company shall have failed to perform in all material respects any obligations, agreements or covenants to be performed, or complied
with, by it under the Agreement at or prior to the Expiration Time;
(4) a
Company Material Adverse Effect shall have arisen or occurred following the execution and delivery of this Agreement that is continuing;
(5) the
Agreement shall have been terminated in accordance with its terms; or
(6) the
Company shall not have delivered to Parent a certificate, signed by an executive officer of the Company, certifying that the conditions
set forth in clauses (C)(2), (C)(3) and (C)(4) of this Annex A have been duly satisfied.
The foregoing conditions
are for the sole benefit of Parent and Acquisition Sub, may be asserted by Parent or Acquisition Sub regardless of the circumstances
giving rise to such condition and may be waived by Parent or Acquisition Sub in whole or in part at any time and from time to
time in the sole and absolute discretion of Parent or Acquisition Sub, subject in each case to the terms of the Agreement. The
failure by Parent or Acquisition Sub at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such
right and, each such right shall be deemed an ongoing right which may be asserted at any time and from time to time.
* * * * * *
EXHIBIT A
TENDER AND SUPPORT
AGREEMENT
Execution Version
TENDER AND SUPPORT
AGREEMENT
by and among
CELGENE CORPORATION,
STRIX CORPORATION,
and
EACH OF THE STOCKHOLDERS NAMED HEREIN
_________________________
Dated as of July 14, 2015
_________________________
TENDER AND SUPPORT
AGREEMENT
THIS TENDER AND SUPPORT
AGREEMENT, dated as of July 14, 2015 (this “Agreement”), by and among Celgene Corporation, a Delaware corporation
(“Parent”), Strix Corporation, a Delaware corporation and a direct wholly owned subsidiary of Parent (“Acquisition
Sub”), and each of the stockholders of Receptos, Inc., a Delaware corporation (the “Company”), named
in Schedule 1 attached hereto (each, a “Principal Holder”).
Recitals
WHEREAS, concurrently with
or immediately following the execution of this Agreement, Parent, Acquisition Sub and the Company are entering into an Agreement
and Plan of Merger, dated as of the date hereof (as amended, supplemented, restated or otherwise modified from time to time, the
“Merger Agreement”), which provides, among other things, for (i) Acquisition Sub to commence a tender
offer, (as it may be amended from time to time as provided under the Merger Agreement, the “Offer”) to acquire
all of the outstanding shares of common stock, par value $0.001 per share, of the Company (the “Common Stock”)
subject to the terms and conditions of the Merger Agreement, and (ii) as soon as practicable following the consummation of
the Offer, Acquisition Sub will merge with and into the Company (the “Merger”), whereby, except as expressly
provided in Article III of the Merger Agreement, each issued and outstanding share of Common Stock immediately prior to the
effective time of the Merger will be cancelled and converted into the right to receive the merger consideration specified therein,
in each case, upon the terms and subject to the conditions set forth in the Merger Agreement;
WHEREAS, as of the date
hereof, each Principal Holder is the beneficial and/or record owner of his Existing Shares (as defined herein);
WHEREAS, as an inducement
and condition to Parent and Acquisition Sub entering into the Merger Agreement, Parent and Acquisition Sub have requested that
each Principal Holder agree, and each Principal Holder has agreed, severally and not jointly, to (i) enter into this Agreement,
(ii) abide by the covenants and obligations with respect to the Covered Shares (as defined herein) set forth herein, (iii) tender
the shares of Common Stock owned by them in the Offer, and (iv) support the Merger, the Offer and the other transactions
contemplated by the Merger Agreement (collectively, the “Transactions”); and
WHEREAS, the respective
boards of directors of Parent, Acquisition Sub and the Company have approved the Merger Agreement, the Offer, the Merger and the
other Transactions, understanding that the execution and delivery of this Agreement by the Principal Holders is a material inducement
and condition to Parent’s and Acquisition Sub’s willingness to enter into the Merger Agreement.
NOW, THEREFORE, in consideration
of the foregoing and the mutual representations, warranties, covenants and agreements herein contained, and intending to be legally
bound hereby, the parties hereto agree as follows:
ARTICLE I
GENERAL
1.1. Defined Terms.
The following capitalized terms, as used in this Agreement, shall have the meanings set forth below. Capitalized terms used but
not otherwise defined herein shall have the meanings ascribed thereto in the Merger Agreement.
“Agreement”
has the meaning set forth in the preamble hereto.
“Acquisition Sub”
has the meaning set forth in the preamble hereto.
“Beneficial Ownership”
has the meaning ascribed to such term in Rule 13d-3 under the Securities Exchange Act of 1934, as amended. The terms “Beneficially
Own,” “Beneficially Owned” and “Beneficial Owner” shall each have a correlative
meaning.
“Company”
has the meaning set forth in the preamble hereto.
“Company Equity
Awards” means, collectively, Company Options and Company RSU Awards.
“Common Stock”
has the meaning set forth in the recitals hereto.
“Covered Shares”
means, with respect to each Principal Holder and as of any given date, such Principal Holder’s Existing Shares, together
with any shares of Common Stock or other voting capital stock of the Company and any shares of Common Stock or other voting capital
stock of the Company issued upon the conversion, vesting payment, exercise or exchange of securities (including Company Equity
Awards), in all cases that such Principal Holder has or acquires Beneficial Ownership of on or after the date hereof as of such
given date.
“Encumbrance”
means any security interest, pledge, mortgage, lien (statutory or other), charge, option to purchase, lease or other right to
acquire any interest or any claim, restriction, covenant, title defect, hypothecation, assignment, deposit arrangement or other
encumbrance of any kind or any preference, priority or other security agreement or preferential arrangement of any kind or nature
whatsoever (including any conditional sale or other title retention agreement), but excluding any obligation under this Agreement
and any applicable restrictions on transfer under the Securities Act. The term “Encumber” shall have a correlative
meaning.
“Existing Shares”
means, with respect to each Principal Holder, an aggregate number of shares of Common Stock (including Company Restricted Shares)
Beneficially Owned by such Principal Holder as of the date hereof, as set forth opposite the Principal Holder’s name on
Schedule 1 hereto.
“Grantees”
has the meaning set forth in Section 2.4.
“Merger”
has the meaning set forth in the recitals hereto.
“Merger Agreement”
has the meaning set forth in the recitals hereto.
“Merger Agreement
Termination Date” shall mean the date that the Merger Agreement shall be terminated in accordance with its terms.
“Offer”
has the meaning set forth in the recitals hereto.
“Parent”
has the meaning set forth in the preamble hereto.
“Permitted Transfer”
means a (a) Transfer of Covered Shares by a Principal Holder to an Affiliate of such Principal Holder, provided that, such Affiliate
shall remain an Affiliate of such Principal Holder at all times following such Transfer or (b) a Transfer by a Principal Holder
to (i) a descendant, heir, executor, administrator, testamentary trustee, lifetime trustee or legatee of such Principal Holder,
or (ii) any trust, the beneficiaries of which include only such Principal Holder or the Persons named in clause (i).
“Permitted Transferee”
shall mean any Person that Beneficially Owns Covered Shares pursuant to a Permitted Transfer.
“Principal Holder”
has the meaning set forth in the preamble hereto.
“Transactions”
has the meaning set forth in the recitals hereto.
“Transfer”
means, directly or indirectly, to sell, transfer, assign, pledge, hedge, gift, Encumber, hypothecate or similarly dispose of (by
merger (including by conversion into securities or other consideration), by tendering into any tender or exchange offer, by testamentary
disposition, by operation of law or otherwise), either voluntarily or involuntarily, or to enter into any Contract, derivative
arrangement, option or other arrangement or understanding with respect to the voting of or sale, transfer, assignment, pledge,
Encumbrance, hypothecation or similar disposition of (by merger, by tendering into any tender or exchange offer, by testamentary
disposition, by operation of law or otherwise).
ARTICLE II
VOTING
2.1. Agreement to
Vote and Support. Each Principal Holder hereby irrevocably and unconditionally agrees, severally and not jointly, that during
the term of this Agreement, at any meeting of the stockholders of the Company, however called, including any adjournment or postponement
thereof, and in connection with any written consent of the stockholders of the Company proposed to be taken, such Principal Holder
shall, in each case to the fullest extent that the Covered Shares are entitled to vote thereon or consent thereto:
(a) appear at each such
meeting or otherwise cause his Covered Shares to be counted as present thereat for purposes of calculating a quorum; and
(b) vote (or cause to be
voted) solely in such Principal Holder’s capacity as a stockholder of the Company, in person or by proxy covering, all of
his Covered Shares (to the extent not purchased in the Offer) against any Acquisition Proposal and against any other action, agreement
or transaction that is intended, or would reasonably be expected to impede, interfere with, delay, postpone or frustrate the purposes
of or adversely affect the Offer, the Merger or the other Transactions or this Agreement or the performance by the Company of
its obligations under the Merger Agreement or by such Principal Holder of his obligations under this Agreement, including: (1)
any extraordinary corporate transaction, such as a merger, consolidation or other business combination involving the Company or
its Subsidiaries (other than the Merger); (2) a sale, lease or transfer of all or substantially all of the assets of the Company
or any of its Subsidiaries or any reorganization, recapitalization or liquidation of the Company or any of its Subsidiaries; or
(3) (i) any change in a majority of persons who constitute the Board of Directors of the Company as of the date hereof, except
for changes requested or expressly permitted by Parent, (ii) any change in the present capitalization or dividend policy of the
Company or any amendment or other change to the Company’s certificate of incorporation or bylaws or (iii) any other material
change in the Company’s organizational structure or business; except, in the case of clauses (i) through (iii), to the extent
expressly permitted by the Merger Agreement or approved by Parent.
2.2. No Inconsistent
Agreements. Each Principal Holder hereby represents, warrants, covenants and agrees that, except for this Agreement, such
Principal Holder (a) has not entered into, and shall not enter into at any time while this Agreement remains in effect, any
voting agreement or voting trust with respect to the Covered Shares, (b) has not granted, and shall not grant at any time
while this Agreement remains in effect, a proxy (except pursuant to Section 2.4), consent or power of attorney with respect
to the Covered Shares and (c) has not taken and shall not knowingly take any action that would make any representation or
warranty of such Principal Holder contained herein untrue or incorrect or have the effect of preventing or disabling such Principal
Holder from performing any of his obligations under this Agreement. Each Principal Holder hereby represents that all proxies,
powers of attorney, instructions or other requests given by such Principal Holder prior to the execution of this Agreement in
respect of the voting of such Principal Holder’s Covered Shares, if any, are not irrevocable and each Principal Holder hereby
revokes (and agrees to take any necessary further action to cause to be revoked) any all previous proxies, powers of attorney,
instructions or other requests with respect to such Principal Holder’s Covered Shares.
2.3. Tender of the
Covered Shares.
(a) Each Principal Holder
hereby agrees that, during the term of this Agreement, unless the Offer is earlier terminated or withdrawn by Acquisition Sub,
it shall duly tender (and deliver any certificates evidencing) the Covered Shares beneficially held by him or her, or cause his
Covered Shares to be duly tendered, into the Offer in accordance with the procedures set forth in the Offer Documents, free and
clear of all Encumbrances.
(b) Each Principal Holder
agrees that once the Covered Shares are tendered into the Offer, such Principal Holder shall not withdraw any Covered Shares from
the Offer unless
and until (i) the
date that the Offer is terminated, withdrawn or expired, or (ii) the termination of this Agreement in accordance with Section
5.1.
(c) Notwithstanding
anything to the contrary in this Section 2.3, no Principal Holder shall be required, for purposes of this Agreement, to
exercise any unexercised Company Options held by such Principal Holder.
2.4. Proxy. Each
Principal Holder hereby irrevocably appoints as his proxy and attorney-in-fact, Parent and any Person or Persons designated by
Parent (collectively, the “Grantees”), each of them individually, with full power of substitution and resubstitution,
to vote or execute written consents with respect to the Covered Shares in accordance with Section 2.1 and, in the discretion
of the Grantees, with respect to any proposed postponements or adjournments of any annual or special meetings of the stockholders
of the Company at which any of the matters described in Section 2.1 is to be considered. This proxy is coupled with an
interest, was given to secure the obligations of such Principal Holder under Section 2.1(a), was given as an additional
inducement of Parent and Acquisition Sub to enter into the Merger Agreement and shall be irrevocable, and such Principal Holder
shall take such further action or execute such other instruments as may be necessary to effectuate the intent of this proxy and
hereby revokes any proxy previously granted by such Principal Holder with respect to the Covered Shares. The power of attorney
granted by each Principal Holder herein is a durable power of attorney and shall survive the dissolution, bankruptcy, death or
incapacity of such Principal Holder. Parent may terminate this proxy with respect to any Principal Holder at any time at its sole
election by written notice provided to such Principal Holder. The proxy granted by each Principal Holder pursuant to this Section
2.4 shall be automatically revoked upon the termination of this Agreement in accordance with Section 5.1.
ARTICLE III
REPRESENTATIONS AND
WARRANTIES
3.1. Representations
and Warranties of Each Principal Holder . Each Principal Holder hereby represents and warrants to Parent and Acquisition Sub,
severally and not jointly, as follows:
(a) Authorization; Validity
of Agreement; Necessary Action. Such Principal Holder has the full power and authority and the requisite capacity and authority
to execute and deliver this Agreement, to perform his obligations hereunder and to consummate the transactions contemplated hereby.
This Agreement has been duly executed and delivered by such Principal Holder and, assuming this Agreement constitutes a valid
and binding obligation of Acquisition Sub and Parent, constitutes a legal, valid and binding obligation of such Principal Holder,
enforceable against it in accordance with its terms, subject to the effect of any bankruptcy, insolvency (including all Laws related
to fraudulent transfers), reorganization, moratorium or similar Laws affecting creditors’ rights generally and subject to
the effect of general principles of equity. The execution and delivery of this Agreement by such Principal Holder, the performance
of his obligations hereunder and the consummation of the transactions contemplated hereby have been duly authorized by all necessary
action on the part of such Principal Holder; and (ii) no
other proceedings on the
part of such Principal Holder are necessary to authorize this Agreement, the performance of his obligations hereunder and the
consummation of the transactions contemplated hereby.
(b) Ownership. Such
Principal Holder’s Existing Shares are, and except for Transfers permitted between the date hereof and the Acceptance Time
pursuant to Section 4.1(a), all of the Covered Shares owned by such Principal Holder from the date hereof through and on
the Acceptance Time will be, Beneficially Owned and owned of record by such Principal Holder. Such Principal Holder has good and
valid title to the Principal Holder’s Existing Shares, free and clear of any Encumbrances (except for transfer restrictions
set forth in an applicable award agreement evidencing Company Restricted Shares). Other than the Existing Shares and Company Equity
Awards set forth on Schedule 1 hereto, as of the date hereof such Principal Holder does not Beneficially Own or own of
record: (i) any securities of the Company convertible into or exchangeable or exercisable for shares of capital stock or
other voting securities or equity interests of the Company, (ii) any warrants, calls, options or other rights to acquire
from the Company any capital stock, voting securities, equity interests or securities convertible into or exchangeable or exercisable
for capital stock or voting securities of the Company, or any stock appreciation rights, or (iii) “phantom” stock
rights, performance units or other rights to receive shares of Common Stock (or cash or other economic benefit in respect thereof)
on a deferred basis. As of the date hereof, such Principal Holder’s Existing Shares constitute all of the shares of Common
Stock Beneficially Owned or owned of record by such Principal Holder. Except for the proxy granted to the Grantees pursuant to
Section 2.4, such Principal Holder has and will have at all times through the Acceptance Time sole voting power (including
the right to control such vote as contemplated herein), sole power of disposition, sole power to issue instructions with respect
to the matters set forth in Article II and sole power to agree to all of the matters set forth in this Agreement, in each
case with respect to all of such Principal Holder’s Existing Shares and with respect to all of the Covered Shares owned
by such Principal Holder as of the Acceptance Time.
(c) No Violation.
The execution and delivery of this Agreement by such Principal Holder does not, and the performance by such Principal Holder of
his obligations under this Agreement will not (i) conflict with or violate any Law, ordinance or regulation of any Governmental
Authority, applicable to such Principal Holder or by which any of his respective assets or properties is bound or (ii) conflict
with, result in any breach of or constitute a default (or an event that with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, modification, acceleration or cancellation of, or result in the creation of
any Encumbrance on the properties or assets of such Principal Holder pursuant to, any Contract, Permit or other instrument or
obligation to which such Principal Holder is a party or by which such Principal Holder, and/or any of his assets or properties
is bound, except for any of the foregoing as would not reasonably be expected, either individually or in the aggregate, to impair
the ability of such Principal Holder to perform his obligations hereunder or to consummate the transactions contemplated hereby.
(d) Consents and Approvals.
The execution and delivery of this Agreement by such Principal Holder does not, and the performance by such Principal Holder of
his obligations under this Agreement and the consummation by such Principal Holder of the transactions
contemplated hereby will
not, require such Principal Holder to obtain any consent, approval, authorization or permit of, or to make any registration, declaration,
filing with or notification to, any Governmental Authority, except for any of the foregoing as would not reasonably be expected,
either individually or in the aggregate, to impair the ability of such Principal Holder to perform his obligations hereunder or
to consummate the transactions contemplated hereby. Each Principal Holder shall provide any spousal consent necessary under any
“community property” or other Laws in order to enforce the obligations of such Principal Holder under this Agreement.
(e) Absence of Litigation.
There is no Legal Proceeding pending or, to the knowledge of such Principal Holder, threatened by, against, or involving or affecting
such Principal Holder and/or any of his respective Affiliates before or by any Governmental Authority that could reasonably be
expected to impair the ability of such Principal Holder to perform his obligations hereunder or to consummate the transactions
contemplated hereby.
(f) Reliance by Parent
and Acquisition Sub. Such Principal Holder understands and acknowledges that Parent and Acquisition Sub are entering into
the Merger Agreement in reliance upon the execution and delivery of this Agreement by such Principal Holder and the representations,
warranties, covenants and agreements of such Principal Holder contained herein and that the same are a material inducement thereto.
Such Principal Holder understands and acknowledges that the Merger Agreement governs the terms of the Offer, Merger and the other
Transactions. Such Principal Holder has received and reviewed a copy of the Merger Agreement.
3.2. Representations
and Warranties of Parent and Acquisition Sub. Parent and Acquisition Sub jointly and severally represent and warrant that
they have the requisite corporate power and authority to execute and deliver this Agreement, to perform their obligations hereunder
and to consummate the transactions contemplated hereby. This Agreement has been duly executed and delivered by Parent and Acquisition
Sub and, assuming this Agreement constitutes a valid and binding obligation of each Principal Holder, constitutes a legal, valid
and binding obligation of Parent and Acquisition Sub, as applicable, enforceable against Parent and Acquisition Sub, as applicable,
in accordance with its terms, subject to the effect of any bankruptcy, insolvency (including all Laws related to fraudulent transfers),
reorganization, moratorium or similar Laws affecting creditors’ rights generally and subject to the effect of general principles
of equity.
ARTICLE IV
OTHER COVENANTS
4.1. Prohibition on
Transfers; Other Actions. Until the termination of this Agreement in accordance with Section 5.1, each Principal Holder,
solely with respect to himself, agrees that he shall not (a) Transfer any of the Covered Shares, Beneficial Ownership thereof
or any other interest therein unless (i) such Transfer is a Permitted Transfer, and (ii) such Permitted Transferee executes
and delivers to Parent a written agreement, in form and substance reasonably acceptable to Parent, to assume all of such Principal
Holder’s obligations hereunder in respect of the securities subject to such Transfer and to be bound by the terms of this
Agreement, with respect to the securities subject to such Transfer, to the same extent as such Principal Holder is
bound hereunder and to
make each of the representations and warranties hereunder in respect of the securities Transferred as such Principal Holder shall
have made hereunder, (b) enter into any agreement, arrangement or understanding with any Person, or take any other action,
that violates or conflicts with or would reasonably be expected to violate or conflict with, or result in or give rise to a violation
of or conflict with, such Principal Holder’s representations, warranties, covenants and obligations under this Agreement
or is inconsistent with the transactions contemplated by the Merger Agreement or the provisions thereof, (c) directly or
indirectly take any action or cause the taking of any other action that could restrict or otherwise affect such Principal Holder’s
legal power, authority and right to comply with and perform his covenants and obligations under this Agreement or (d) discuss,
negotiate, make an offer or enter into a contract, agreement, understanding, commitment or other arrangement with respect to any
matter related to this Agreement, except in the case of clause (d) as would not reasonably be expected to prevent or materially
delay such Principal Holder’s ability to perform his obligations hereunder. Any Transfer in violation of this provision
shall be void ab initio.
4.2. Adjustments.
In the event of a stock split, stock dividend or distribution (including any dividend or distribution of securities convertible
into Common Stock), or any change in the Common Stock by reason of any split-up, reverse stock split, reorganization, recapitalization,
combination, reclassification, exchange of shares or the like, the terms “Existing Shares” and “Covered Shares”
shall be deemed to refer to and include such shares as well as all such stock dividends and distributions and any securities into
which or for which any or all of such shares may be changed or exchanged or which are received in such transaction.
4.3. Notice of Acquisitions.
Each Principal Holder shall notify Parent as promptly as practicable (and in any event within two (2) Business Days after receipt)
in writing of the number of any additional shares of Common Stock, Company Equity Awards or other securities of the Company of
which such Principal Holder acquires Beneficial Ownership on or after the date hereof, other than shares of Common Stock issued
pursuant to the exercise, vesting and/or payment of Company Equity Awards.
4.4. Waiver of Dissenters
Rights. Each Principal Holder hereby irrevocably waives, and agrees not to assert or perfect, and shall cause any of his Affiliates
who hold any Covered Shares to waive and to not assert or perfect, any rights of appraisal or rights to dissent from the Merger
that the Principal Holder may have under applicable Laws or otherwise, including Section 262 of the DGCL by virtue of ownership
of the Covered Shares.
4.5. Further Assurances.
From time to time, at Parent’s request and without further consideration, each Principal Holder shall cooperate with Parent
and Acquisition Sub in making all filings and obtaining all consents of Governmental Authorities and third parties and execute
and deliver such additional documents and take all such further actions as may be reasonably necessary or desirable to effect
the actions and consummate the transactions contemplated by this Agreement.
ARTICLE V
MISCELLANEOUS
5.1. Termination.
This Agreement shall terminate, and no party shall have any rights or obligations hereunder, (a) automatically, without any notice
or other action by any Person, upon the earliest to occur of (i) the Effective Time, (ii) a Company Board Recommendation
Change and (iii) the Merger Agreement Termination Date, or (b) with respect to any Principal Holder, upon the mutual written
agreement of Parent and such Principal Holder. Notwithstanding the foregoing, the provisions of this Article V (other than
Section 5.4) shall survive any termination of this Agreement without regard to any temporal limitation. Neither the provisions
of this Section 5.1 nor the termination of this Agreement shall relieve any party hereto from any liability to any other
party arising out of or in connection with a prior breach of this Agreement.
5.2. No Ownership
Interest. Nothing contained in this Agreement shall be deemed to vest in Parent or Acquisition Sub any direct or indirect
ownership or incidence of ownership of or with respect to any Covered Shares. All rights, ownership and economic benefits of and
relating to the Covered Shares remain vested in and belong to the applicable Principal Holder, and nothing herein shall, or shall
be construed to, grant Parent any power, sole or shared, to direct or control the voting or disposition of any of the Covered
Shares, except as otherwise provided herein.
5.3. Expenses.
Whether or not the Transactions are consummated, all expenses incurred by any party to this Agreement or on its behalf in connection
with this Agreement and the Transactions shall be paid by the party incurring those expenses.
5.4. Public Announcements.
Except as required by applicable Law (in which case the Principal Holder required to make the announcement will use his reasonable
efforts to allow Parent reasonable time to comment on such announcement in advance of such issuance), no public announcements
by any Principal Holder regarding this Agreement, the transactions contemplated hereby, the Merger Agreement or the Transactions
are permitted. Each Principal Holder (a) consents to and authorizes the publication and disclosure by Parent and its Affiliates
of his identity and holding of the Covered Shares and the nature of his commitments and obligations under this Agreement in any
announcement or disclosure required by the SEC or other Governmental Authority, the Offer or any other disclosure document in
connection with the Offer, the Merger, any other Transaction or the transactions contemplated by this Agreement, (b) agrees to
give to Parent any information it may reasonably require for the preparation of any such disclosure documents and (c) agrees to
promptly notify Parent of any required corrections with respect to any written information supplied by him specifically for use
in any such disclosure document, if any, to the extent that any shall be or have become false or misleading in any material respect.
5.5. Notices.
All notices and other communications hereunder shall be in writing and shall be deemed to have been duly delivered and received
hereunder (a) two (2) Business Days after being sent by registered or certified mail, return receipt requested, postage prepaid,
(b) one (1) Business Day after being sent for next Business Day delivery, fees prepaid, via a reputable
nationwide overnight courier
service, or (c) immediately upon delivery by hand or by facsimile (with a written or electronic confirmation of delivery), in
each case to the intended recipient as set forth below:
If to Parent or
Acquisition Sub to:
c/o Celgene Corporation
86 Morris Avenue
Summit, New Jersey 07901
Attention: General
Counsel
Facsimile No.:
(908) 673-2771
with a copy (which
shall not constitute notice) to:
Proskauer Rose
LLP
Eleven Times Square
New York, New York 10036
| Attention: | Robert A. Cantone |
Daniel I. Ganitsky
Ori Solomon
Facsimile: (212)
969-2900
If to a Principal
Holder, to such Principal Holder at the address specified on Schedule 1, with a copy (which shall not constitute notice)
to:
Latham &
Watkins LLP
885 Third Avenue
New York, New York
10022-4834
| Attention: | Charles K. Ruck |
R. Scott Shean
Facsimile:
(212) 751-4864
5.6. Interpretation.
The principles set forth in Section 1.3 of the Merger Agreement shall apply to this Agreement.
5.7. Consents and
Approvals. For any matter under this Agreement requiring the consent or approval of any party to be valid and binding on the
parties, such consent or approval must be in writing.
5.8. Counterparts.
This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall
become effective when one or more counterparts have been signed by each of the parties and delivered to the other party, it being
understood that all parties need not sign the same counterpart. Delivery of an executed counterpart of a signature page to
this Agreement by facsimile or other electronic transmission,
including by e-mail attachment,
shall be effective as delivery of a manually executed counterpart of this Agreement.
5.9. Entire Agreement;
No-Third Party Beneficiaries. This Agreement and the Merger Agreement (and the schedules, annexes and exhibits hereto and
thereto) and the documents and instruments and other agreements among the parties hereto and thereto as contemplated by or
referred to herein or therein, constitute the entire agreement among the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter
hereof. This Agreement is not intended to, and shall not, confer upon any Person (other than the parties hereto and their respective
successors and permitted assigns) any rights, benefits, obligations, liabilities or remedies hereunder.
5.10. Governing Law.
This Agreement shall be governed by and construed in accordance with the Laws of the State of Delaware, regardless of the Laws
that might otherwise govern under applicable principles of conflicts of law thereof.
5.11. Assignment.
Except in connection with a Permitted Transfer, no party may assign (by operation of Law or otherwise) either this Agreement or
any of its rights, interests or obligations hereunder without the prior written approval of the other parties, except that Acquisition
Sub may assign, in its sole discretion, any or all of its rights, interests, or obligations hereunder to any direct wholly owned
Subsidiary of Parent without the prior written approval of the Principal Holders. Subject to the preceding sentence, this Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and Permitted Transferees.
Any purported assignment in violation of this Agreement will be void ab initio.
5.12. Specific Enforcement;
Submission to Jurisdiction; Service.
(a) The parties hereto
hereby agree that irreparable damage would occur in the event that any provision of this Agreement were not performed in accordance
with its specific terms or were otherwise breached, and that money damages or other legal remedies would not be an adequate remedy
for any such damages. Accordingly, the parties hereto acknowledge and hereby agree that in the event of any breach or threatened
breach by the Principal Holders, on the one hand, or Parent and/or Acquisition Sub, on the other hand, of any of their respective
covenants or obligations set forth in this Agreement, the Principal Holders, on the one hand, and Parent and Acquisition Sub,
on the other hand, shall be entitled to an injunction or injunctions to prevent or restrain breaches or threatened breaches of
this Agreement, by the other (as applicable), and to specifically enforce the terms and provisions of this Agreement to prevent
breaches or threatened breaches of, or to enforce compliance with, the covenants and obligations of the other under this Agreement.
The Principal Holders, on the one hand, and Parent and Acquisition Sub, on the other hand hereby agree not to raise any objections
to the availability of the equitable remedy of specific performance to prevent or restrain breaches or threatened breaches of
this Agreement by such party (or parties), and to specifically enforce the terms and provisions of this Agreement to prevent breaches
or threatened breaches of, or to enforce compliance with, the covenants and obligations of such party (or parties) under this
Agreement.
(b) Each of the parties
hereto (i) irrevocably consents to the service of the summons and complaint and any other process in any action or proceeding
relating to the transactions contemplated by this Agreement, for and on behalf of itself or any of its properties or assets, in
accordance with Section 5.5 or in such other manner as may be permitted by applicable Law, and nothing in this Section
5.12(b) shall affect the right of any party to serve legal process in any other manner permitted by applicable Law; (ii) irrevocably
and unconditionally consents and submits itself and its properties and assets in any action or proceeding to the exclusive jurisdiction
of the Court of Chancery of the State of Delaware (or, only if the Court of Chancery of the State of Delaware declines to accept
or does not have jurisdiction over a particular matter, any federal or other state court within the State of Delaware) in the
event any dispute or controversy arises out of this Agreement or the transactions contemplated hereby, or for recognition and
enforcement of any judgment in respect thereof; (iii) agrees that it will not attempt to deny or defeat such personal jurisdiction
by motion or other request for leave from any such court; (iv) agrees that any actions or proceedings arising in connection with
this Agreement or the transactions contemplated hereby shall be brought, tried and determined only in the Court of Chancery of
the State of Delaware (or, only if the Court of Chancery of the State of Delaware declines to accept or does not have jurisdiction
over a particular matter, any federal or other state court within the State of Delaware); (v) waives any objection that it may
now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought
in an inconvenient court and agrees not to plead or claim the same; and (vi) agrees that it will not bring any action relating
to this Agreement or the transactions contemplated hereby in any court other than the aforesaid courts. Each of Parent, Acquisition
Sub and the Principal Holders agrees that a final judgment in any action or proceeding in such courts as provided above shall
be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable
Law.
5.13. Waiver of Jury
Trial. EACH OF PARENT, ACQUISITION SUB AND THE PRINCIPAL HOLDERS HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE ACTIONS OF PARENT, ACQUISITION SUB OR THE PRINCIPAL HOLDERS IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT
HEREOF.
5.14. Amendment; Waiver.
Subject to applicable Law and subject to the other provisions of this Agreement, this Agreement may be amended by the parties
hereto at any time prior to the Effective Time by execution of an instrument in writing signed on behalf of each of Parent, Acquisition
Sub and the Principal Holders (or, in the case of an Amendment relating only to a certain Principal Holder, by each of Parent,
Acquisition Sub and such Principal Holder); provided, however, no amendment shall be made to this Agreement that requires
the approval of Company Stockholders under Delaware Law or the rules of NASDAQ, without such approval. At any time and from time
to time prior to the Effective Time, any party or parties hereto may, to the extent legally allowed and except as otherwise set
forth herein, (a) extend the time for the performance of any of the obligations or other acts of the other party or parties hereto,
as applicable, (b) waive any inaccuracies in the representations and warranties made to such party or parties hereto contained
herein or in any document delivered pursuant hereto and (c) waive compliance with any of the agreements or conditions for
the benefit of such party
or parties hereto contained
herein. Any agreement on the part of a party or parties hereto to any such extension or waiver shall be valid only if set forth
in an instrument in writing signed on behalf of such party or parties, as applicable. Any delay in exercising any right under
this Agreement shall not constitute a waiver of such right.
5.15. Severability.
In the event that any provision of this Agreement, or the application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this Agreement will continue in full force and effect and
the application of such provision to other persons or circumstances will be interpreted so as reasonably to effect the intent
of the parties hereto. The parties further agree to negotiate in good faith in an effort to replace such void or unenforceable
provision of this Agreement with a valid and enforceable provision that will achieve, to the maximum extent possible, the economic,
business and other purposes of such void or unenforceable provision.
5.16. Action by Stockholder
Capacity Only. Parent acknowledges that each Principal Holder has entered into this Agreement solely in his capacity as the
record and/or beneficial owner of the Covered Shares (and not in any other capacity, including any capacity as a director or officer
of the Company). Nothing herein shall limit or affect any actions taken by any Principal Holder, or require a Principal Holder
to take any action, in each case, in his capacity as a director or officer of the Company, including to disclose information acquired
solely in their capacity as a director or officer of the Company, and any actions taken (whatsoever), or failure to take any actions
(whatsoever), by him in such capacity as a director or officer of the Company shall not be deemed to constitute a breach of this
Agreement.
5.17. Several, Not
Joint Obligations. The representations, warranties, covenants and other obligations of the Principal Holders under this Agreement
are, in all respects, several and not joint, such that no Principal Holder shall be liable or otherwise responsible for any representations,
warranties, covenants or other obligations of any other Principal Holder, or any breach or violation thereof.
[Remainder of this
page intentionally left blank]
IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be signed (where applicable, by their respective officers or other authorized Person
thereunto duly authorized) as of the date first written above.
|
CELGENE CORPORATION |
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By: |
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Name: |
Robert J. Hugin |
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Title: |
Chairman and CEO |
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STRIX CORPORATION |
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By: |
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Name: |
Robert J. Hugin |
|
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Title: |
CEO |
[Signature Page to
Tender and Support Agreement]
IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be signed as of the date first written above.
|
PRINCIPAL HOLDERS |
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Faheem Hasnain |
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William H. Rastetter, Ph.D. |
[Signature Page to
Tender and Support Agreement]
SCHEDULE 1
PRINCIPAL HOLDERS
Principal Holder Name and Address |
|
Existing Shares |
|
Company Equity
Awards* |
Faheem Hasnain
c/o Receptos, Inc.
3033 Science Park
Road, Suite 300
San Diego, California
92121 |
|
374,520 |
|
447,940 |
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William H. Rastetter,
Ph.D.
c/o Receptos, Inc.
3033 Science Park
Road, Suite 300
San Diego, California
92121 |
|
260,806 |
|
35,600 |
* To the extent not counted
as Existing Shares, and to the extent expressly set forth in Section 4.2(b) of the Company Disclosure Letter, which is incorporated
herein by reference to the extent applicable.
EXHIBIT B
FORM OF
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
RECEPTOS,
Inc.
| 1. | The name of the corporation is Receptos,
Inc. (the “Corporation”). |
| 2. | The address of its registered office
in the State of Delaware is 2711 Centerville Road, Suite 400, Wilmington, Delaware, 19808,
New Castle County and the name of its registered agent at such address is Corporation
Service Company. |
| 3. | The nature of the business or purposes
to be conducted or promoted is to engage in any lawful act or activity for which corporations
may be organized under the General Corporation Law of Delaware. |
| 4. | The total number of shares of stock
which the Corporation shall have authority to issue is ONE THOUSAND (1,000) shares, all
of which shares shall be designated as common shares, and the par value of each of such
shares shall be one cent ($0.01), amounting in aggregate to TEN DOLLARS and NO/100s ($10.00). |
| 5. | The Corporation is to have perpetual
existence. |
| 6. | The business of the Corporation shall
be managed by its Board of Directors. The by-laws may prescribe the number of directors;
may provide for the increase or reduction thereof; and may prescribe the number necessary
to constitute a quorum, which number may be less than a majority of the whole Board of
Directors, but not less than the number required by law. To the fullest extent permitted
by the General Corporation Law of Delaware as it now exists or may hereafter be amended
(but, in the case of any such amendment, only to the extent that such amendment permits
the Corporation to provide broader director protection rights than permitted prior thereto),
no director of the Corporation shall be personally liable to the Corporation or any of
its stockholders for monetary damages arising from a breach of fiduciary duty owed to
the Corporation or its stockholders. Any repeal or modification of this section by the
stockholders of the Corporation shall be prospective only, and shall not adversely affect
any right or protection of a director of the Corporation existing at the time of such
repeal or modification with respect to acts or omissions occurring prior to such repeal
or modification. |
| 7. | Each person who is or was a director
or officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent
of another corporation or of a partnership, joint venture, trust, employee benefit plan or other enterprise (including the heirs,
executors, administrators or estate of such person), in any such case, at or prior to the effective time of the merger of Strix
Corporation with and into the Corporation pursuant to the terms of the agreement and plan of merger dated as of July [Ÿ], 2015,
by and among the Corporation, Celgene Corporation, and Strix Corporation, shall be indemnified and advanced expenses by the Corporation,
in accordance with the by-laws of the Corporation1, to the fullest extent authorized by the General Corporation Law
of Delaware, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such
amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide
prior to such amendment), or any other applicable laws as presently or hereinafter in effect. The right to indemnification and
advancement of expenses hereunder shall not be exclusive of any other right that any person may have or hereafter acquire under
any statute, provision of this Amended and Restated Certificate of Incorporation or by-laws of the Corporation, agreement, vote
of stockholders or disinterested directors or otherwise. |
| 8. | Subject to such by-laws as may be
adopted from time to time by the stockholders of the Corporation, the Board of Directors
is expressly authorized to adopt, alter, amend and repeal the by-laws of the Corporation,
but any by-law adopted by the Board of Directors may be altered, amended or repealed
by the stockholders of the Corporation. |
| 9. | The Corporation reserves the right
to amend, alter, change or repeal any provision contained in this Amended and Restated
Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and
all rights conferred upon the stockholders of the Corporation herein are granted subject
to this reservation. Notwithstanding the foregoing, any amendment, alteration, change
or repeal of any provision of Section 6 or Section 7 of this Amended and Restated Certificate
of Incorporation shall not adversely affect any right or protection existing hereunder
immediately prior to such amendment, alteration, change or repeal. |
* * *
1
Note: By-laws of Strix Corporation to incorporate indemnification provisions from Receptos by-laws.
THE UNDERSIGNED, said
Receptos, Inc., has caused this certificate to be executed by ____________________, its ___________________, this ___ day
of __________, ____.
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RECEPTOS, INC. |
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By: |
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Name: |
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Title: |
Exhibit 10.1
EXECUTION VERSION
JPMorgan
Chase Bank, N.A.
J.P.
Morgan Securities LLC
383 Madison Avenue
New York, NY 10179
July 14, 2015
Project Strix
US$5,000,000,000 Bridge Loan Facility
Commitment Letter
Celgene Corporation
400 Connell Park, 4th Floor
Berkeley Heights, NJ 07922
Attention: |
Jonathan Biller |
|
Senior Vice President, Tax and Treasury |
Ladies and Gentlemen:
Celgene Corporation,
a Delaware corporation (the “Company” or “you”), has advised JPMorgan Chase Bank, N.A. (“JPMCB”)
and J.P. Morgan Securities LLC (“JPMorgan” and, together with JPMCB, the “Commitment Parties”,
“we” or “us”) that it intends to acquire a company previously identified to us and code-named
Strix (the “Acquired Company”) through (a) the purchase of shares of common stock of the Acquired Company by
a wholly-owned subsidiary of the Company (“Merger Sub”) pursuant to a tender offer for any and all such shares
(the “Offer”) and (b) promptly following the closing of the Offer, the merger (the “Merger”)
of Merger Sub with and into the Acquired Company pursuant to Section 251(h) of the Delaware General Corporation Law, with the Acquired
Company surviving such Merger as the Company’s direct or indirect wholly-owned subsidiary (the “Acquisition”),
and to consummate the other Transactions (such term and each other capitalized term used but not defined herein having the meaning
assigned to it in the Summary of Terms and Conditions attached hereto as Exhibit A (the “Term Sheet”). In that
connection, the Company has requested that JPMorgan agree to structure and arrange a senior unsecured 364-day bridge loan facility
in the amount of US$5,000,000,000 (as such amount may be reduced as provided under the “Optional Commitment Reduction and
Prepayment” and “Mandatory Commitment Reduction and Prepayment” sections of the Term Sheet) (the “Facility”)
to finance the Acquisition and the other Transactions, and that JPMCB commit to provide the entire amount of the Facility.
JPMCB is pleased to advise
you of its commitment to provide the entire principal amount of the Facility upon the terms and subject to the conditions set forth
or referred to in this Commitment Letter and the Term Sheet.
It is agreed that JPMorgan
will act as the sole lead arranger and sole bookrunner, and that JPMCB will act as the exclusive administrative agent, for the
Facility, and each of them will, in such capacities, perform the duties and exercise the authority customarily performed and exercised
by it in such roles. It is agreed that (a) no additional agents, co-agents, arrangers, co-arrangers, bookrunners, managers
or co-managers will be
appointed, and no other
titles will be awarded, by you in connection with the Facility and (b) no compensation (other than compensation expressly
contemplated by the Term Sheet or the Fee Letters referred to below) will be paid in connection with the Facility, in each case
unless you and we shall so agree.
JPMCB reserves the right,
prior to or after the execution of definitive documentation for the Facility (but not before the public announcement by you of
the Acquisition), to syndicate all or a portion of its commitment hereunder to one or more financial institutions (which shall
be identified by JPMorgan in consultation with you) that (subject, to the extent required below, to your consent (such consent
not to be unreasonably withheld or delayed)) will become parties to such definitive documentation pursuant to a syndication to
be managed by JPMorgan (the financial institutions becoming parties to such definitive documentation being collectively referred
to as the “Lenders”). You agree to assist JPMorgan in completing an orderly and successful syndication of the
Facility reasonably satisfactory to us and you. In that regard, you agree promptly to prepare and provide to JPMorgan such information
with respect to the Company and its subsidiaries, and to use commercially reasonable efforts (consistent with the terms of the
Acquisition Agreement) to cause the Acquired Company promptly to prepare and provide to JPMorgan such information with respect
to the Acquired Company and its subsidiaries, in each case including financial information, as JPMorgan may reasonably request
in connection with the arrangement and syndication of the Facility. Your assistance shall also include (a) your using commercially
reasonable efforts to ensure that the syndication efforts benefit from your existing lending and investment banking relationships,
(b) direct contact between appropriate senior management of the Company and the proposed Lenders, in all cases at times and locations
to be mutually agreed, (c) your assistance, and your using commercially reasonable efforts (consistent with the terms of the Acquisition
Agreement) to cause the Acquired Company to assist, in the preparation of a Confidential Information Memorandum and other marketing
materials to be used in connection with the syndication of the Facility (collectively, “Information Materials”),
in each case in form and substance customary for transactions of this type, (d) prior to the launch of the General Syndication
(as defined below), your obtaining indicative pro forma ratings giving effect to the Transactions from each of Moody’s Investors
Service, Inc. (“Moody’s”) and Standard & Poor’s Financial Services LLC, a part of McGraw Hill
Financial (“S&P”), and (e) the hosting, with JPMorgan, of one or more meetings or conference calls
with prospective Lenders at times and locations to be mutually agreed. In addition, to facilitate an orderly and successful syndication
of the Facility, you agree that, until the earlier of the Closing Date and the completion of a successful syndication of the Facility
(as described in the Arranger Fee Letter referred to below), you and your subsidiaries will not, and you will use commercially
reasonable efforts (consistent with the terms of the Acquisition Agreement) to cause the Acquired Company and its subsidiaries
not to, issue, sell, offer, place or arrange, or engage in any discussions with respect to any of the foregoing, any debt securities
or commercial bank or other credit facilities of the Company, the Acquired Company or their respective subsidiaries that could
reasonably be expected to materially impair the syndication of the Facility, other than (i) the Facility, (ii) the Permanent Financing,
(iii) indebtedness incurred pursuant to the commitments in effect on the date hereof under the Existing Company Credit Agreement
and (iv) commercial paper financings in the ordinary course of business, without the prior written consent of JPMorgan. You agree
to afford JPMorgan a period of at least 20 consecutive business days from the launch of the General Syndication (it being acknowledged
and agreed that JPMorgan intends to launch the General Syndication promptly upon completion of the Information Materials) and immediately
prior to the Closing Date to syndicate the Facility, provided that such period shall not include any day from and including
August 21, 2015 through and including September 8, 2015, any day from and including November 25, 2015 through and including November
30, 2015, and any day from and including
December 18, 2015 through
and including January 4, 2016. Without limiting your obligations to assist with the syndication efforts as set forth herein, JPMCB
agrees that the completion of a successful syndication is not a condition to the initial funding under the Facility.
You hereby represent
and covenant that (a) all written information, other than the Projections and information of a general economic or industry nature,
that has been or will be made available to JPMorgan or JPMCB or to any of the Lenders by or on behalf of you (the “Information”)
is or, when furnished, will be, in each case when taken as a whole and in light of the circumstances when furnished, correct in
all material respects at the time furnished and does not or will not at the time furnished contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements contained therein, taken as a whole, not misleading
in light of the circumstances under which such statements are made (in each case after giving effect to all supplements and updates
theretofore provided) and (b) the Projections that have been or will be made available to JPMorgan or JPMCB or to any of the Lenders
by or on behalf of you in connection with the transactions contemplated hereby have been or, when made available, will be prepared
in good faith based upon assumptions believed by you to be reasonable at the time the Projections are so made available (it being
understood that Projections are not to be viewed as facts and are subject to significant uncertainties and contingencies many of
which are beyond your control, that no assurance can be given that any particular financial projections will be realized, that
actual results may differ from projected results and that such differences may be material); provided that, with respect
to any Information or Projections prepared by or relating to the Acquired Company or its subsidiaries, the foregoing representations
are made only to the best of your knowledge. You agree that if at any time until the Closing Date (or, if a successful syndication
shall not have been achieved by the Closing Date, the earlier of the completion of a successful syndication and the 60th day after
the Closing Date) the representations in the immediately preceding sentence would not be true if the Information and Projections
were being furnished (and, in the case of Projections, the applicable assumptions were being made), and such representations were
being made, at such time, then you will promptly supplement the Information and the Projections so that such representations or
warranties would be true under those circumstances. You understand that in connection with the syndication of the Facility we will
use and rely on the Information without independent verification thereof.
JPMorgan will, in consultation
with you, manage all aspects of the syndication of the Facility, including decisions as to the selection of institutions to be
approached and when they will be approached, when their commitments will be accepted, which institutions will participate, the
allocations of the commitments among the Lenders, the allocation of any title or role to any Lender and the amount and distribution
of fees among the Lenders, it being understood and agreed that each Lender (other than any Lender that is a party to the Existing
Company Credit Agreement or has otherwise been specifically identified in a writing agreed by you and us prior to the date hereof
as a permitted assignee (each such Lender, a “Permitted Assignee”)) shall be subject to your consent (not to
be unreasonably withheld or delayed), provided that, after the funding under the Facility, your consent shall not be required
in respect of any Lender becoming a party to the Facility in connection with the Initial Syndication or the General Syndication
(each as defined below). It is agreed that JPMCB and, upon becoming a party hereto, each Additional Initial Lender (as defined
below) may assign portions of its commitment hereunder to one or more Permitted Assignees and that upon the effectiveness of any
such assignment JPMCB and each Additional Initial Lender will be released from the portion of its commitment so assigned (such
assignments to be allocated, as among JPMCB and the Additional Initial Lenders, in the manner determined by JPMorgan). It is further
agreed that such assignments may be made as part of the general syndication of the Facility (the “General Syndication”,
and any financial
institution to which
an assignment is made as part of the General Syndication being referred to as a “General Syndication Lender”)
or as part of the solicitation of interest in the Facility prior to the launch of the General Syndication (the “Initial
Syndication”, and any financial institution to which such an assignment is made as part of the Initial Syndication being
referred to as an “Additional Initial Lender”). In connection with any assignments to Additional Initial Lenders
as part of the Initial Syndication, you agree (a) at the request of JPMorgan, at the earliest practicable date following delivery
to you of a draft of appropriate documentation (including, if requested by JPMorgan, an amendment and restatement of this Commitment
Letter, or one or more joinder agreements, pursuant to which such Additional Initial Lenders will become parties to this Commitment
Letter and extend commitments in respect of the Facility directly to you) containing such provisions relating to the allocation
of titles and roles, rights and responsibilities in connection with the syndication of the Facility, the allocation of any reductions
in the amount of the Facility and, to the extent determined by JPMorgan, rights of the Additional Initial Lenders to participate
in determinations to be made by JPMorgan under this Commitment Letter and the Arranger Fee Letter (but which will not, except as
agreed by you, add any new conditions to the availability of the Facility or change the terms of the Facility or increase the aggregate
compensation payable by you in connection therewith as set forth in this Commitment Letter and in the Fee Letters), to execute
and deliver such documentation, and (b) that JPMorgan shall have “left” placement in any and all marketing materials
and other documentation used in connection with the Facility and shall have the authority customarily associated with such placement.
You acknowledge and agree that the amount of the Facility will be reduced as provided under the “Optional Commitment Reduction
and Prepayment” section of the Term Sheet and under clause (a) or clause (b) of the “Mandatory Commitment Reduction
and Prepayment” section of the Term Sheet upon the occurrence of any of the events described therein at any time after the
date hereof, and that any such reduction will be allocated among the commitments of JPMCB and the Additional Initial Lenders in
respect of the Facility in the manner determined by JPMorgan.
As consideration for
JPMCB’s commitment hereunder and our agreements to perform the services described herein, you agree to pay to us fees in
the amounts and at the times set forth in the arranger fee letter dated the date hereof and delivered herewith (the “Arranger
Fee Letter”) and the administrative agent fee letter dated the date hereof and delivered herewith (the “Administrative
Agent Fee Letter” and, together with the Arranger Fee Letter, the “Fee Letters”).
The commitment of JPMCB
and the agreements of JPMCB and JPMorgan hereunder are subject to (a) since December 31, 2014, there not having occurred or come
to our attention any change, event, circumstance or development that has resulted, or could reasonably be expected to result, in
a Company Material Adverse Effect, (b) the negotiation, execution and delivery of definitive documentation for the Facility prepared
by our counsel, consistent with this Commitment Letter, the Term Sheet and the Fee Letters and satisfactory to us and you, (c)
your performance of your obligations expressly set forth in the third, fourth, fifth, sixth and seventh paragraphs of this Commitment
Letter and in the Fee Letters and (d) the other conditions expressly set forth in the Term Sheet and in Exhibit B hereto.
For purposes of the foregoing, “Company
Material Adverse Effect” means any change, condition, occurrence, effect, event, circumstance or development (each a
“Change”, and collectively, “Changes”), individually or in the aggregate, and taken together
with all other Changes that have occurred prior to the date of determination of the occurrence of the Company Material Adverse
Effect, that (a) has had or would reasonably be expected to have a material adverse effect on the business, assets, Liabilities
(such term and each other capitalized term in this definition that is not otherwise defined in this Commitment Letter having the
meaning
assigned in the Acquisition Agreement as in effect on the date
hereof), condition (financial or otherwise) or results of operations of the Acquired Company and its Subsidiaries, taken as a whole,
or (b) would reasonably be expected to prevent, materially delay or materially impair the ability of the Acquired Company to consummate
the Merger and the other transactions contemplated by the Acquisition Agreement; provided, however, that no Change (by itself
or when aggregated or taken together with any and all other Changes) directly or indirectly resulting from, attributable to or
arising out of any of the following shall be deemed to be or constitute a “Company Material Adverse Effect,” and no
Change (by itself or when aggregated or taken together with any and all other such Changes) directly or indirectly resulting from,
attributable to or arising out of any of the following shall be taken into account when determining whether a “Company Material
Adverse Effect” has occurred, to the extent such Changes do not disproportionately affect the Acquired Company and its Subsidiaries
in any material respect relative to other companies operating in any industry or industries in which the Acquired Company and its
Subsidiaries operate in the events of (i) through (vi):
(i) general
economic conditions (or changes in such conditions) in the United States or any other country or region in the world, or conditions
in the global economy generally;
(ii) conditions
(or changes in such conditions) in the securities markets, capital markets, credit markets, currency markets or other financial
markets in the United States or any other country or region in the world, including (A) changes in interest rates in the United
States or any other country or region in the world and changes in exchange rates for the currencies of any countries and (B) any
suspension of trading in securities (whether equity, debt, derivative or hybrid securities) generally on any securities exchange
or over-the-counter market operating in the United States or any other country or region in the world;
(iii) conditions
(or changes in such conditions) in the industries in which the Acquired Company and its Subsidiaries conduct business;
(iv) political
conditions (or changes in such conditions) in the United States or any other country or region in the world or acts of war, sabotage
or terrorism (including any escalation or general worsening of any such acts of war, sabotage or terrorism) in the United States
or any other country or region in the world;
(v) earthquakes,
hurricanes, tsunamis, tornadoes, floods, mudslides, wild fires or other natural disasters, weather conditions and other force majeure
events in the United States or any other country or region in the world;
(vi) changes
in law or other legal or regulatory conditions (or the interpretation thereof) or changes in GAAP or other accounting standards
(or the interpretation thereof);
(vii) the
announcement of, or the compliance with the express terms of, the Acquisition Agreement, or the pendency or consummation of the
transactions contemplated hereby, including (A) the identity of the Company, (B) any departure or termination of any officers,
directors, employees or independent contractors of the Acquired Company or its Subsidiaries, (C) the termination or potential termination
of (or the failure or potential failure to renew or enter into) any Contracts with customers,
suppliers, distributors or other
business partners, and (D) any other negative development (or potential negative development) in the Acquired Company’s relationships
with any of its customers, suppliers, distributors or other business partners;
(viii) data
derived from clinical trials being conducted by or on behalf of the Acquired Company or its Subsidiaries or the announcements thereof
(but not, in each case, the underlying cause of such data to the extent such cause relates to any adverse event that would require
a report to the United States Food and Drug Administration or any successor thereto (the “FDA”) pursuant to
21 C.F.R. 312.32(c)(1) or 21 C.F.R. 312.32(c)(2), or any foreign equivalent thereof (any such event, a “Serious Adverse
Event”));
(ix) any
determination by, or delay of a determination by, the FDA or any other Governmental Authority, or any panel or advisory body empowered
or appointed thereby, or any indication that any such entity, panel or body will make any determination or delay in making any
determination, with respect to the approvability, labeling, contents of package insert, prescribing information, risk management
profile, CMC matters, pre-approval inspection matters or requirements relating to the results of any pre-clinical or clinical testing
sponsored by the Acquired Company, any of its competitors or any of their respective collaboration partners (but not, in each case,
the underlying cause of such determination or delay of a determination to the extent such cause relates to any Serious Adverse
Event);
(x) any
recommendations or statements published or proposed by any professional medical organization, Governmental Authority or panel or
advisory body empowered or appointed thereby, relating to products or product candidates of the Acquired Company or any of its
competitors (but not, in each case, the underlying cause of such recommendations or statements to the extent such cause relates
to any Serious Adverse Event);
(xi) any
actions taken or failures to take action, in each case, by the Company or any of its controlled Affiliates, or to which an officer
of the Company has consented, or which an officer of the Company has requested (and which, in the case of any of the foregoing
actions or failures to take action that either (a) require your consent or the consent of Merger Sub under the Acquisition Agreement
or (b) could reasonably be expected to affect the Lenders in a materially adverse manner, have been consented to by JPMorgan),
or the taking of any action required by the express terms of the Acquisition Agreement, or the failure to take any action prohibited
by the express terms of the Acquisition Agreement;
(xii) changes
in the Acquired Company’s stock price or the trading volume of the Acquired Company’s stock, in and of itself, or any
failure by the Acquired Company to meet any estimates or expectations of the Acquired Company’s revenue, earnings or other
financial performance or results of operations for any period, in and of itself, or any failure by the Acquired Company to meet
any internal budgets, plans or forecasts of its revenues, earnings or other financial performance or results of operations, in
and of itself (but not, in each case, the underlying cause of such changes or failures, unless such changes or failures would otherwise
be excepted from this definition); or
(xiii) any
Legal Proceedings made or brought by any of the current or former stockholders of the Acquired Company (on their own behalf or
on behalf of the Acquired Company) against the Acquired Company arising out of the Merger or in connection with any other transactions
contemplated by the Acquisition Agreement.
Notwithstanding anything
in this Commitment Letter, the Term Sheet or the Fee Letters to the contrary (but subject to the satisfaction of the conditions
set forth or referred to herein), (a) the only representations relating to the Company, the Acquired Company and their respective
subsidiaries the accuracy of which shall be a condition to availability of the Facility on the Closing Date shall be (i) the representations
made by the Acquired Company in the Acquisition Agreement, but only to the extent that you (or any of your subsidiaries) have the
right under the Acquisition Agreement not to consummate the Offer or the Merger as a result of such representations in the Acquisition
Agreement being inaccurate (the “Acquisition Agreement Representations”), and (ii) the Specified Representations
(as defined below) and (b) the terms of the definitive documentation for the Facility shall be negotiated by the parties hereto
in good faith and will be in a form such that the Facility will not be unavailable on the Closing Date if the conditions set forth
or referred to herein and in the exhibits hereto are satisfied. For purposes hereof, “Specified Representations”
means the representations and warranties set forth in the Term Sheet with respect to organization and power, authorization, due
execution and delivery, noncontravention, governmental approvals, enforceability, solvency, Federal Reserve margin regulations,
Investment Company Act status and anti-corruption and trade sanctions laws. The provisions of this paragraph are referred to as
the “Limited Conditions Provision”.
You agree (a) to indemnify
and hold harmless JPMCB, JPMorgan and each of their affiliates, and each of the respective officers, directors, employees, members,
partners, trustees, advisors, agents and controlling persons of the foregoing (each, an “indemnified person”),
from and against any and all losses, claims, damages, liabilities and expenses, joint or several, to which any such indemnified
person may become subject arising out of or in connection with this Commitment Letter, the Term Sheet, the Fee Letters, the Facility,
the use of the proceeds thereof and the Acquisition and any related transaction or any claim, litigation, investigation or proceeding
relating to any of the foregoing, regardless of whether any indemnified person is a party thereto (and regardless of whether such
matter is initiated by you or by any other person), and to reimburse each indemnified person within 30 days following written demand
(together with reasonable backup documentation supporting such reimbursement request) for any reasonable and documented legal or
other out-of-pocket expenses incurred in connection with investigating or defending any of the foregoing (but limited, in the case
of legal fees and expenses, to one firm of counsel selected by JPMorgan for all such indemnified persons, taken as a whole, and,
solely in the case of an actual or potential conflict of interest where the indemnified person affected by such conflict informs
you of such conflict and thereafter retains its own counsel, one firm of counsel for such affected indemnified person (and, if
reasonably necessary, of one firm of local counsel in any relevant jurisdiction for all such indemnified persons, taken as a whole
and, solely in the case of an actual or potential conflict of interest where the indemnified person affected by such conflict informs
you of such conflict and thereafter retains its own counsel, one additional local counsel to each such affected indemnified person
in each such relevant jurisdiction); provided that the foregoing indemnity will not, as to any indemnified person, apply
to losses, claims, damages, liabilities or related expenses to the extent (i) they are determined by a final, non-appealable judgment
of a court of competent jurisdiction to have resulted from (A) the willful misconduct or gross negligence of such indemnified person
or (B) a material breach by such indemnified person of its agreements under this Commitment Letter or the Fee Letters that is not
cured promptly after it comes to our attention, or (ii) any dispute solely
among indemnified persons
which does not arise out of or in connection with any act or omission of the Company or any of its subsidiaries (other than a dispute
involving a claim against any indemnified person in its capacity as an arranger, agent or similar role in connection with the Facility
or the Existing Company Credit Agreement); and (b) to reimburse JPMCB, JPMorgan and each of their affiliates within 30 days following
receipt of the relevant invoice for all reasonable and documented out-of-pocket expenses
(including reasonable due diligence and travel expenses, if any, and reasonable and documented fees, charges and disbursements
of counsel (limited, in the case of legal fees and expenses, to the reasonable fees, charges and disbursements of Cravath, Swaine
& Moore LLP, as legal counsel to the Arranger and Administrative Agent and, if reasonably necessary, one local counsel in each
relevant jurisdiction for the Arranger and Administrative Agent)) incurred in connection with the Facility and any related documentation
(including this Commitment Letter, the Term Sheet, the Fee Letters and the definitive documentation for the Facility) or the preparation,
amendment, modification or waiver of any thereof. No indemnified person shall be liable for any damages arising from the use of
Information or other materials obtained through electronic, telecommunications or other information transmission systems, in each
case except to the extent any such damages are found by a final, non-appealable judgment of a court of competent jurisdiction to
arise from the gross negligence, bad faith or willful misconduct of such indemnified person, or for any special, indirect, consequential
or punitive damages in connection with this Commitment Letter, the Term Sheet, the Fee Letters, the Facility or its activities
related thereto.
This Commitment Letter
shall not be assignable by you without the prior written consent of JPMCB and JPMorgan (and any purported assignment without such
consent shall be null and void), is intended to be solely for the benefit of the parties hereto and the indemnified persons and
is not intended to confer any benefits upon, create any rights in favor of or be enforceable by or at the request of any person
other than the parties hereto and the indemnified persons. JPMCB and each Additional Initial Lender may assign portions of its
commitment to Additional Initial Lenders pursuant to the Initial Syndication and to the General Syndication Lenders pursuant to
the General Syndication (in each case as and subject to the limitations set forth in this Commitment Letter), and upon any such
assignment JPMCB or such Additional Initial Lender, as the case may be, shall be released from the portion of its commitment so
assigned. Any and all obligations of, and services to be provided by, JPMCB or JPMorgan hereunder may be performed, and any and
all rights of any of JPMCB or JPMorgan hereunder may be exercised, by or through its affiliates; provided that neither JPMCB
nor JPMorgan shall be relieved of any of its obligations hereunder in the event any such affiliate shall fail to perform such obligation
in accordance with the terms hereof. The commitments hereunder of JPMCB and the Additional Initial Lenders shall be superseded
by the commitments in respect of the Facility set forth in the definitive credit agreement for the Facility, and upon the execution
and delivery of the definitive credit agreement for the Facility by the parties thereto JPMCB and each Additional Initial Lender
shall be released from its commitment hereunder.
This Commitment Letter
may not be amended or waived except by an instrument in writing signed by you, JPMCB and JPMorgan. This Commitment Letter may be
executed in any number of counterparts, each of which shall be an original, and all of which, when taken together, shall constitute
one agreement. Delivery of an executed signature page of this Commitment Letter by facsimile transmission or other electronic means
shall be effective as delivery of a manually executed counterpart hereof. This Commitment Letter and the Fee Letters are the only
agreements that have been entered into among the parties hereto with respect to the Facility and set forth the entire understanding
of the parties hereto with respect thereto.
This
Commitment Letter shall be governed by, and construed in accordance with, the laws of the State of New York; provided
that the interpretation of the definition of the term “Company Material Adverse Effect” shall be governed by, and construed
in accordance with, the laws of the State of Delaware. Each party hereto irrevocably
and unconditionally submits to the exclusive jurisdiction of any state or Federal court sitting in the city of New York over any
suit, action or proceeding directly or indirectly arising out of, relating to, based upon or as a result of this Commitment Letter,
the Term Sheet, the Fee Letters or the transactions contemplated hereby. Each party hereto agrees that service of any process,
summons, notice or document by registered mail addressed to it at the address set forth above shall be effective service of process
for any suit, action or proceeding brought in any such court. Each party hereto irrevocably and unconditionally waives any objection
to the laying of venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action
or proceeding has been brought in any inconvenient forum. Each party hereto agrees that a final judgment in any such suit, action
or proceeding brought in any such court shall be conclusive and binding upon it and may be enforced in any other courts to whose
jurisdiction it is or may be subject, by suit upon judgment. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF, RELATING
TO, BASED UPON OR AS A RESULT OF THIS COMMITMENT LETTER, THE TERM SHEET, THE FEE LETTERS OR THE TRANSACTIONS CONTEMPLATED HEREBY.
This Commitment Letter
is delivered to you on the understanding that none of this Commitment Letter, the Term Sheet, the Fee Letters or any of their terms
or substance shall be disclosed, directly or indirectly, by you to any other person, except that (a) this Commitment Letter,
the Term Sheet, the Fee Letters and their terms and substance may be disclosed to your directors, officers, employees, agents,
auditors, attorneys and other advisors and representatives who are directly involved in the consideration of this matter and informed
of the confidential nature thereof, (b) this Commitment Letter, the Term Sheet and their terms and substance (and a version of
the Arranger Fee Letter redacted in a manner reasonably acceptable to JPMorgan) may be disclosed to the Acquired Company and its
directors, officers, employees, agents, auditors, attorneys and other advisors and representations who are directly involved in
the consideration of the Acquisition and informed of the confidential nature thereof, (c) this Commitment Letter, the Term Sheet
and their terms and substance (i) to Moody’s and S&P on a confidential basis, (ii) in any prospectus, offering memorandum
or confidential information memorandum relating to any Permanent Financing and (iii) in one or more filings with the Securities
and Exchange Commission (it being agreed, however, that the Fee Letters or their terms or substance will not be disclosed pursuant
to this clause (c) except as part of any disclosure in a filing with the Securities and Exchange Commission of aggregate fees and
expenses in connection with the contemplated transactions that does not permit the determination of particular fees), (d) this
Commitment Letter, the Term Sheet, the Fee Letters and their terms and substance otherwise may be disclosed to the extent reasonably
necessary in connection with the exercise of any remedy or enforcement of any right under this Commitment Letter, the Term Sheet
and/or Fee Letters and (e) this Commitment Letter, the Term Sheet, the Fee Letters and their terms and substance otherwise may
be disclosed as may be compelled in a judicial or administrative proceeding or as otherwise required by law (in which case you
agree to inform us promptly thereof), with the Company hereby acknowledging that no disclosure of the Fee Letters is required to
be made in its filings with the Securities and Exchange Commission. The foregoing restrictions shall cease to apply in respect
of the existence and contents of this Commitment Letter (but not in respect of the Fee
Letters and their contents)
on the earlier of the Closing Date and the date one year following the date on which this Commitment Letter has been signed by
you.
The Commitment Parties
shall treat confidentially all confidential information provided to them by or on behalf of you hereunder; provided, however,
that nothing herein shall prevent the Commitment Parties from disclosing any such information (a) pursuant to the order of any
court or administrative agency or in any pending legal or administrative proceeding, or otherwise as required by applicable law
or compulsory legal process (in which case the applicable Commitment Party agrees, to the extent practicable and not prohibited
by applicable law, to inform you promptly thereof), (b) upon the request or demand of any regulatory authority having or claiming
to have jurisdiction over the Commitment Parties or any of their respective affiliates (including, without limitation, in the course
of inspections, examinations or inquiries by federal or state government agencies, regulatory agencies, self-regulatory agencies
and rating agencies), (c) to the extent that such Information becomes publicly available other than by reason of disclosure in
violation of this agreement by the Commitment Parties, (d) to the Commitment Parties’ affiliates, and the Commitment Parties’
and their affiliates’ employees, officers, directors, legal counsel, independent auditors and other experts or agents who
need to know such Information in connection with the Transactions and are informed of the confidential nature of such Information
and instructed to keep such confidential Information confidential, (e) for purposes of establishing any defense available under
state and federal securities laws, including, without limitation, a “due diligence” defense, or for the purpose of
enforcing any rights of the Commitment Parties under this Commitment Letter or any Fee Letter, (f) to the extent that such Information
is or was received by the Commitment Parties from a third party that is not to the Commitment Parties’ knowledge subject
to confidentiality obligations to you, (g) to the extent that such Information is independently developed by the Commitment
Parties or (h) to potential Lenders, participants or assignees who agree to be bound by the terms of this paragraph (or language
substantially similar to this paragraph or as otherwise reasonably acceptable to you and each Commitment Party, including as may
be agreed in any confidential information memorandum or other marketing material); provided that, notwithstanding anything
herein to the contrary, in the case of any Commitment Party that is, or an affiliate of which is, a party to the Existing Company
Credit Agreement, such Commitment Party and its affiliates may disclose any such Information as and to the extent permitted by
such Existing Company Credit Agreement. The obligations of the Commitment Parties under this paragraph shall be superseded by the
confidentiality provisions of the definitive documentation for the Facility or, if such definitive documentation is not executed
and delivered, will terminate on the date that is two years after the date hereof.
You agree that each of
JPMCB and JPMorgan will act under this Commitment Letter as an independent contractor and that nothing in this Commitment Letter
or the Fee Letters, or the communications pursuant hereto or otherwise, will be deemed to create an advisory, fiduciary or agency
relationship or fiduciary or other implied duty between JPMCB or JPMorgan, on the one hand, and you, the Acquired Company or your
or its subsidiaries, affiliates or equityholders, on the other, irrespective of whether either JPMCB or JPMorgan has advised or
is advising you on other matters. You acknowledge and agree that (a) the financing transactions contemplated by this Commitment
Letter and the Fee Letters are arm’s-length commercial transactions among us and you, (b) in connection therewith and
with the process leading to such transactions, each of us is acting solely as a principal and not as an agent or fiduciary of you,
the Acquired Company, your or its subsidiaries and affiliates or any other person, and none of us has assumed (and will not be
deemed on the basis of our communications or activities hereunder to have assumed) an advisory or fiduciary responsibility or any
other obligation in favor of you, the Acquired Company, your or its subsidiaries or affiliates or any other person (irrespective
of
whether any of us or
any of our affiliates are concurrently providing other services to you), and (c) you are responsible for making your own independent
judgment with respect to such transactions and the process leading thereto and have consulted your own legal and financial advisors
to the extent you have deemed appropriate.
You acknowledge that
JPMCB, JPMorgan and their affiliates may be providing debt financing, equity capital or other services (including financial advisory
services) to other companies in respect of which you or the Acquired Company may have conflicting interests. Neither JPMCB nor
JPMorgan will use confidential information obtained from you in connection with the transactions contemplated hereby in connection
with the performance by it of services for other companies, or will furnish any such information to other companies. You also acknowledge
that neither JPMCB nor JPMorgan has any obligation to use in connection with the transactions contemplated hereby, or to furnish
to you, confidential information obtained from other companies.
You further acknowledge
that JPMCB and JPMorgan, together with their affiliates, is a full service securities firm engaged in securities trading and brokerage
activities as well as providing investment banking and other financial services. In the ordinary course of business, JPMCB, JPMorgan
and their affiliates may provide investment banking and other financial services to, and/or acquire, hold or sell, for their own
accounts and the accounts of customers, equity, debt and other securities and financial instruments (including bank loans and other
obligations) of, you and your subsidiaries and other companies with which you or your subsidiaries may have commercial or other
relationships. With respect to any securities and/or financial instruments so held by any of us, any of our affiliates or any of
our or their customers, all rights in respect of such securities and financial instruments, including any voting rights, will be
exercised by the holder of the rights, in its sole discretion.
The provisions contained
herein and in the Fee Letters relating to compensation, expense reimbursement, indemnification, governing law, submission to jurisdiction,
waiver of jury trial and confidentiality shall remain in full force and effect notwithstanding the termination of this Commitment
Letter or the commitment hereunder, and whether or not definitive documentation for the Facility shall be executed.
Each of JPMCB and JPMorgan
hereby notifies you that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October
26, 2001)) (the “Patriot Act”), it and the Lenders is required to obtain, verify and record information that
identifies you, which information includes your name and address and other information that will allow JPMCB, JPMorgan and the
Lenders to identify you in accordance with the Patriot Act.
If the foregoing correctly
sets forth our agreement, please indicate your acceptance of the terms hereof and of the Term Sheet and the Fee Letters by returning
to us executed counterparts hereof and of the Fee Letters not later than 6:00 p.m., New York City time, on July 14, 2015, failing
which JPMCB’s commitment and the agreements of JPMCB and JPMorgan hereunder will expire at such time. In the event the Closing
Date shall not theretofore have occurred, JPMCB’s commitment and the agreements of JPMCB and JPMorgan hereunder will automatically
expire and terminate on 5:00 p.m., New York City time, on July 14, 2016, without any further action or notice and without any further
obligation, unless each of JPMCB and JPMorgan, it its discretion, shall agree to an extension.
[Signature pages follow.]
We are pleased to have
been given the opportunity to assist you in connection with this important financing.
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Very truly yours, |
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jpmorgan chase bank, n.a., |
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by |
/s/ Vanessa Chiu |
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Name: Vanessa Chiu |
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Title: Executive Director |
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J.P. Morgan SECURITIES LLC, |
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by |
/s/ Thomas Delaney |
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Name: Thomas Delaney |
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Title: Executive Director |
Accepted and agreed to as of
the date set forth above by:
Celgene Corporation, |
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by |
/s/ Robert J. Hugin |
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Name: Robert J. Hugin |
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Title: Chariman and CEO |
EXHIBIT A
Project Strix
US$5,000,000,000 Bridge Loan Facility
Summary of Terms and Conditions1
Borrower: |
Celgene Corporation, a Delaware corporation (the “Borrower”). |
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Facility: |
US$5,000,000,000 senior unsecured 364-day bridge loan facility (the “Facility”). |
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Sole Lead Arranger
and Sole Bookrunner: |
J.P. Morgan Securities LLC (in such capacity, the “Arranger”). |
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Administrative Agent: |
JPMorgan Chase Bank, N.A. (“JPMCB” and, in such capacity, the “Administrative Agent”). |
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Lenders: |
A syndicate of lenders, including JPMCB, identified by the Arranger in consultation with the Borrower (the “Lenders”). |
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Transactions: |
The Borrower is entering into an Agreement and Plan of Merger (including all schedules and exhibits thereto, the “Acquisition Agreement”) among the Borrower, a newly formed wholly owned subsidiary of the Borrower (“Acquisition Sub”) and a company previously identified to the Arranger and code-named Strix (the “Acquired Company”), pursuant to which the Borrower will acquire the Acquired Company through (a) the purchase of shares of common stock of the Acquired Company by a wholly-owned subsidiary of the Company (“Merger Sub”) pursuant to a tender offer for any and all such shares (the “Offer”) and (b) promptly following the closing of the Offer, the merger of Merger Sub with and into the Acquired Company pursuant to Section 251(h) of the Delaware General Corporation Law (the “Merger”), with the Acquired Company surviving such Merger as the Company’s direct or indirect wholly-owned subsidiary (the “Acquisition”). In connection with the foregoing, the Borrower will (a) obtain the Facility and (b) pay the fees and expenses incurred in connection with the Acquisition and the Facility (the “Transaction Costs”). It is anticipated that all or a portion of the Facility will be replaced or refinanced by (i) the issuance of senior unsecured notes of the Borrower in a public offering or in a Rule 144A or other private placement (the “New Notes”) and/or (ii) the issuance of equity or equity-linked securities of the Borrower in a public offering (the “New Equity” and, together with the New Notes, the “Permanent Financing”). The transactions referred to in this paragraph are collectively referred to as the “Transactions”. |
1
Capitalized terms used but not otherwise defined in this Exhibit A have the meanings assigned thereto in the Commitment Letter
to which this Exhibit A is attached, including the other exhibits thereto.
Availability: |
The Facility will be available in a single drawing on the date on which the Offer is consummated (the “Closing Date”), but in no event later than the earlier of (a) July 14, 2016, and (b) the date that the Acquisition Agreement is terminated or expires in accordance with its terms without the closing of the Acquisition. Amounts borrowed under the Facility that are repaid or prepaid may not be reborrowed. |
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Use of Proceeds: |
The proceeds of the Facility will be used by the Borrower on the Closing Date, together with cash on hand, to finance the Acquisition and the other Transactions. |
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Maturity: |
The Facility will mature on the day that is 364 days after the Closing Date and, prior to the final maturity thereof, will not be subject to any scheduled amortization. |
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Interest Rates and Fees: |
As set forth on Annex I hereto. |
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Optional Commitment Reduction and Prepayment: |
The Borrower will be permitted, upon at least three business days’ prior notice, to terminate in whole, or from time to time reduce in part, the commitments under the Facility without penalty, in minimum amounts and multiples to be agreed. |
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The Borrower will be permitted, upon same day notice for ABR loans and at least three business days’ notice for Eurodollar loans, to prepay loans under the Facility in whole or in part, in minimum amounts and multiples to be agreed. |
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Mandatory Commitment Reduction and Prepayment: |
Commitments will be reduced, and loans
will be required to be prepaid, under the Facility in an aggregate amount equal to:
(a) 100% of the net
cash proceeds received by, or the aggregate amount of commitments obtained by, the Borrower or any of its subsidiaries from any
Debt Incurrence (as defined below), in each case after the date of the Commitment Letter to which this Exhibit A is attached, whether
before or after the Closing Date;
(b) 100% of the net
cash proceeds received by the Borrower or any of its subsidiaries from any Equity Issuance (as defined below) after the date of
the Commitment Letter to which this Exhibit A is attached, whether before or after the Closing Date; and
(c) 100% of the net
cash proceeds received by the Borrower or any of its subsidiaries from any sale or other disposition of assets (including proceeds
from the sale of equity interests in any subsidiary of the Borrower and insurance and condemnation proceeds) consummated after
the date of the Commitment Letter to which this Exhibit A is attached, whether before or after the Closing Date, subject to reinvestment
rights to be agreed. |
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“Debt Incurrence” means any incurrence of debt for borrowed money by the Borrower or any of its subsidiaries, whether pursuant to a public offering or in a Rule 144A or other private placement of debt securities (including debt securities convertible into equity securities) or incurrence of loans under any loan or credit facility, or any establishment of any commitments to make available to the Borrower or any of its subsidiaries any indebtedness for borrowed money, whether under any loan or credit facility or otherwise, other than (a) intercompany debt, (b) debt under the Existing Company Credit Agreement (but not any incremental commitments thereunder effected after the date of the Commitment Letter to which this Exhibit A is attached), (c) refinancings of existing indebtedness and (d) working capital facilities entered into by foreign subsidiaries of the Borrower. |
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“Equity Issuance” means any issuance of equity or equity-linked securities by the Borrower or any of its subsidiaries, whether pursuant to a public offering or in a Rule 144A or other private placement, other than securities issued pursuant to employee stock plans or employee compensation plans. |
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Prepayments Generally: |
All prepayments of loans under the Facility will be subject to, in the case of Eurodollar loans, compensation for breakage costs incurred by the Lenders if occurring other than on the last day of an Interest Period, but otherwise without penalty. |
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Documentation: |
The Facility will be documented under a credit agreement that will be consistent with this Exhibit A and will contain representations and warranties, affirmative covenants, negative covenants and events of default substantially similar to those in the Borrower’s US$1,750,000,000 Second Amended and Restated Credit Agreement dated as of April 17, 2015 (as in effect on the date hereof, the “Existing Company Credit Agreement”), with such changes thereto as are necessary or reasonably appropriate to reflect the terms set forth in this Exhibit A and in the Commitment Letter to which this Exhibit A is attached and the nature of the transactions contemplated hereby. |
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Representations
and Warranties: |
Limited to organization and powers; authorization, due execution and delivery; noncontravention of organizational documents, law or contractual restrictions; governmental approvals; enforceability; annual, quarterly and pro forma financial statements; absence of events or conditions that have resulted or would reasonably be expected to result in a material adverse change; absence of litigation relating to the Facility and other material litigation; Federal Reserve margin regulations; Investment Company Act status; disclosure; solvency after giving effect to the Transactions; and anti-corruption laws and regulations and trade sanctions. |
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Conditions Precedent
to Funding: |
The borrowing under the Facility will be subject to the receipt of a borrowing notice therefor and the conditions set forth or referred to in the eighth paragraph of, or in Exhibit B to, the Commitment Letter. |
Affirmative Covenants: |
Limited to compliance with laws (including anti-corruption laws and regulations and trade sanctions); payment of taxes; maintenance of insurance; preservation of existence; visitation rights; keeping of books; maintenance of properties; transactions with affiliates; delivery of annual and quarterly financial statements and other information; and delivery of notices of defaults or events of default. |
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Negative Covenants: |
Limited to restrictions on liens; mergers, consolidations or transfers of all or substantially all assets; subsidiary debt; changes in nature of business; and use of proceeds (including, without limitation, in compliance with anti-corruption laws and regulations and trade sanctions). |
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Financial Covenants: |
(a) Maximum
debt to EBITDA ratio, with required levels to be agreed.
(b) Minimum
EBITDA to interest expense ratio, with required levels to be agreed. |
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Events of Default: |
Limited to nonpayment of principal; nonpayment of interest, fees or other amounts (subject to a three Business Day grace period); inaccuracy of representations and warranties in any material respect; noncompliance with covenants; cross-payment default and cross-default resulting in or permitting acceleration in respect of indebtedness of $150,000,000 or more in the aggregate; bankruptcy and insolvency events; judgment defaults; change of control; and certain ERISA events. |
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Cost and Yield Protection: |
The credit agreement for the Facility will contain yield protection provisions, customary for facilities of this nature, protecting the Lenders in the event of unavailability of funding, funding losses, and reserve, capital adequacy or liquidity requirements (including, for the avoidance of doubt, any changes resulting from requests, rules, guidelines or directives concerning capital adequacy (x) issued in connection with the Dodd-Frank Wall Street Reform and Consumer Protection Act or (y) promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, regardless of the date enacted, adopted or issued). |
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All payments to be free and clear of any present or future taxes, withholdings or other deductions whatsoever (other than income taxes in the jurisdiction of the Lender’s applicable lending office). The Lenders will use reasonable efforts to minimize to the extent possible any applicable taxes and the Borrower will indemnify the Lenders and the Agent for such taxes paid by the Lenders or the Agent. |
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The Borrower will have the right to replace any defaulting Lender or any Lender which requests reimbursements for amounts owing under this section, provided that (i) no Default or Event of Default has occurred and is continuing, (ii) the Borrower has satisfied all of its obligations under the Facility relating to such Lender, and (iii) any replacement is acceptable to the Agent and the Borrower has paid the |
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Agent a $3,500 administrative fee if such replacement Lender is not an existing Lender. |
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Defaulting Lenders: |
The credit agreement for the Facility will contain customary “defaulting lender” provisions. |
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Voting Rights: |
Amendments and waivers will require the approval of Lenders holding a majority of the aggregate amount of the loans and unused commitments under the Facility; provided that the consent of all affected Lenders will be required with respect to customary matters, including (a) reductions in the unpaid principal amount or extensions of the scheduled final maturity date for the payment of principal of any loan, (b) reductions in interest rates or fees or extensions of the dates for payment thereof and (c) increases in the amounts or extensions of the expiry date of the Lenders’ commitments, and the consent of 100% of the Lenders will be required with respect to (i) modifications of the pro rata provisions of the credit agreement and (ii) modifications to any of the voting percentages. |
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Assignments and Participations: |
The Borrower may not assign its rights or obligations under the Facility without the prior written consent of the Lenders. Each Lender will have the right to assign to one or more eligible assignees all or a portion of its rights and obligations under the loan documents, with the consent, not to be unreasonably withheld or delayed, of the Administrative Agent and, so long as no Event of Default is continuing, the Borrower, in each case not to be unreasonably withheld, provided that (a) the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Agent within five business days after having received notice thereof and (b) no consent of the Borrower will be required after the Closing Date in the case of assignments to another Lender or an affiliate of a Lender or to approved funds, or as part of the primary syndication of the Facility. Minimum aggregate assignment levels will be $5,000,000 and increments of $1,000,000 in excess thereof. The parties to the assignment (other than the Borrower) will pay to the Administrative Agent an administrative fee of $3,500. |
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Each Lender will also have the right, without the consent of the Borrower or the Administrative Agent, to assign (i) as security, all or part of its rights under the loan documents, including to any Federal Reserve Bank and (ii) with notice to the Borrower and the Administrative Agent, all or part of its rights and obligations under the loan documents to any of its affiliates or another Lender. |
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Each Lender will have the right to sell participations in its rights and obligations under the loan documents, subject to customary restrictions on the participants’ voting rights. |
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Expenses and
Indemnification: |
The Borrower will pay (a) all reasonable and documented out-of-pocket expenses of the Administrative Agent and the Arranger and their affiliates associated with (i) the arrangement and syndication of the Facility and (ii) the preparation, execution, delivery and administration |
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of the credit documentation and any amendment or waiver with respect thereto (including the reasonable fees, charges and disbursements of Cravath, Swaine & Moore LLP, as legal counsel to the Arranger and Administrative Agent and, if reasonably necessary, one local counsel in each relevant jurisdiction for the Arranger and Administrative Agent) and (b) all out of-pocket expenses of the Administrative Agent and the Lenders (including the fees, charges and disbursements of a single legal counsel selected by the Arranger and Administrative Agent and, if reasonably necessary, one local counsel in each relevant jurisdiction and, in the event of any actual or potential conflict of interest, one additional counsel and one additional local counsel in each relevant jurisdiction for the person or persons affected by such conflict) in connection with the enforcement of the credit documentation. |
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The Borrower will indemnify the Administrative Agent, the Arranger, the other Lenders and their affiliates, and each of the respective officers, directors, employees, advisors, agents and controlling persons of the foregoing, and hold them harmless from and against all costs, expenses (including reasonable fees, disbursements and other charges of counsel) and liabilities arising in connection with the Facility and the transactions contemplated hereby (including the Acquisition), except, in the case of any indemnitee, to the extent such costs, expenses and liabilities are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or wilful misconduct of such indemnitee. |
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Governing Law and Jurisdiction: |
New York. |
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Counsel to Arranger and
Administrative Agent: |
Cravath, Swaine & Moore LLP. |
ANNEX I
Ticking Fee: |
A ticking fee will accrue and be payable to the Lenders on their unfunded commitments under the Facility, commencing on the 60th day following the date on which the Commitment Letter to which this Exhibit A is attached is executed and delivered and payable in arrears at the end of each calendar quarter and upon any termination of the commitments. On and following the first date (the “Ratings Date”) on which each of Moody’s and S&P shall have established ratings on a pro forma basis giving effect to the Acquisition for the Borrower’s senior, unsecured, non-credit-enhanced, long-term debt (the “Ratings”), the ticking fee will be determined based upon the Ratings, as set forth in the table appearing at the end of this Annex I. At all times prior to the Ratings Date, the ticking fee shall be 0.125% per annum. Ticking fees will be calculated on the basis of a 360-day year and actual days elapsed. |
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Duration Fees: |
The Borrower will pay to each Lender on each of the dates set forth below a Duration Fee equal to the applicable percentage set forth below of the aggregate principal amount of such Lender’s loans under the Facility outstanding on such date: |
Date | |
Duration Fee Percentage | |
| |
| |
90 days after the Closing Date | |
| 0.50 | % |
| |
| | |
180 days after the Closing Date | |
| 0.75 | % |
| |
| | |
270 days after the Closing Date | |
| 1.00 | % |
Interest Rates: |
Interest will be payable on loans under
the Facility at the following rates per annum:
(a) in
the case of Eurodollar loans, Adjusted LIBOR plus, prior to the Ratings Date, 1.125% per annum, and on and following the Ratings
Date, spreads determined based upon the Ratings, as set forth in the table appearing at the end of this Annex I, and
(b) in
the case of ABR loans, the ABR plus, prior to the Ratings Date, 0.125% per annum, and on and following the ratings Date, spreads
determined based upon the Ratings, as set forth in the table appearing at the end of this Annex I. |
|
|
|
As used herein: |
|
|
|
“Adjusted LIBOR” means the London interbank offered rate (determined by reference to the Reuters screen) (but in any event not |
|
less than zero), adjusted at all times for statutory reserves. |
|
|
|
“ABR” means the highest of (i) JPMCB’s Prime Rate, (ii) the Federal Funds Effective Rate (but in any event not less than zero) plus ½ of 1.00% and (iii) the Adjusted LIBOR for a one-month interest period plus 1.00%. |
|
|
Eurodollar Interest Periods: |
At the Borrower’s option, 1, 2 or 3 months. Interest on Eurodollar loans will be payable on the last day of each Interest Period and upon repayment or prepayment. |
|
|
Interest Rate Basis: |
Interest on Eurodollar loans will be payable in arrears on the basis of a 360-day year (calculated on the basis of the actual number of days elapsed). Interest on ABR loans will be payable quarterly in arrears on the basis of a 365/366-day year when ABR is based on JPMCB’s Prime Rate and otherwise on a 360-day year (in each case calculated on the basis of the actual number of days elapsed). |
|
|
Default Rate: |
With respect to overdue principal, the applicable interest rate plus 2.00% per annum and, with respect to any other overdue amount, the interest rate applicable to ABR loans under the Facility plus 2.00% per annum. |
Pricing Table:
2
| |
Ratings (Moody’s/S&P) | |
Eurodollar Spread | | |
ABR Spread | | |
Ticking Fee | |
| |
| |
| | |
| | |
| |
Level 1 | |
A+/A1 or above | |
| 0.750 | % | |
| 0.000 | % | |
| 0.060 | % |
| |
| |
| | | |
| | | |
| | |
Level 2 | |
A/A2 | |
| 0.875 | % | |
| 0.000 | % | |
| 0.070 | % |
| |
| |
| | | |
| | | |
| | |
Level 3 | |
A-/A3 | |
| 1.000 | % | |
| 0.000 | % | |
| 0.100 | % |
| |
| |
| | | |
| | | |
| | |
Level 4 | |
BBB+/Baa1 | |
| 1.125 | % | |
| 0.125 | % | |
| 0.125 | % |
| |
| |
| | | |
| | | |
| | |
Level 5 | |
BBB/Baa2 | |
| 1.250 | % | |
| 0.250 | % | |
| 0.150 | % |
| |
| |
| | | |
| | | |
| | |
Level 6 | |
Lower than BBB/Baa2 | |
| 1.500 | % | |
| 0.500 | % | |
| 0.200 | % |
2
If only one rating agency shall have in effect a Rating, the Eurodollar Spreads, ABR Spreads and Ticking Fee will be based upon
such Rating. If neither rating agency shall have in effect a Rating, the Eurodollar Spreads, ABR Spreads and Ticking Fee will be
based upon the Level 6. In the event of split Ratings, the Eurodollar Spreads, ABR Spreads and Ticking Fee will be based upon the
higher Rating, unless the Ratings differ by two or more Levels, in which case the Eurodollar Spreads and ABR Spreads will be based
upon the Level one level above that corresponding to the lower Rating.
Each of the interest
rate spreads set forth in the table will increase by 25 basis points on the 90th day after the Closing Date, by an additional 25
basis points on the 180th day after the Closing Date and by an additional 25 basis points on the 270th day after the Closing Date.
EXHIBIT B
Project Strix
$5,000,000,000 Bridge Loan Facility
Summary of Additional Conditions Precedent3
The borrowing under
the Senior Facilities shall be subject to the following conditions precedent:
| 1. | The terms of the Acquisition Agreement shall be satisfactory to the Arranger (it being acknowledged
that the Arranger is satisfied with the version of the Agreement and Plan of Merger by and Among Celgene Corporation, Strix Corporation
and Receptos, Inc., executed by the parties on the date hereof (the “Execution Version”). The Arranger shall
have received a copy of the definitive Acquisition Agreement (together with all the exhibits, schedules and other documents relating
thereto) executed by the parties thereto and certified by the Borrower as complete and correct. The Offer and the Merger shall
have been consummated, or substantially concurrently with the funding under the Facility shall be consummated, pursuant to and
on the terms set forth in the Execution Version, all approvals required for the Acquisition shall have been received and all conditions
precedent to the consummation of the Offer and the Merger shall have been satisfied, in each case without giving effect to amendments,
waivers, consents or other modifications after the date hereof that are materially adverse to the Arranger or the Lenders without
the consent of the Arranger, such consent not to be unreasonably withheld, delayed or conditioned (it being agreed that (a) any
decrease in the Offer Price in excess of 10% in the aggregate shall be deemed to be materially adverse to the interests of the
Arranger and the Lenders, (b) any decrease in the Offer Price of less than 10% in the aggregate shall be deemed to be materially
adverse to the interests of the Arranger and the Lenders unless such decrease in the Offer Price shall reduce dollar-for-dollar
the commitments in respect of the Bridge Facility and (c) any waiver or modification of the Minimum Condition (as defined in the
Execution Version) shall be deemed to be materially adverse to the Arranger and the Lenders). |
| 2. | The Lenders shall have received (a) U.S. GAAP audited consolidated balance sheets and related statements
of income, stockholders’ equity and cash flows of each of the Company and the Acquired Company for the three most recently
completed fiscal years ended at least 90 days prior to the Closing Date and (b) U.S. GAAP unaudited consolidated balance sheets
and related statements of income, stockholders’ equity and cash flows of each of the Company and the Acquired Company for
each subsequent fiscal quarter ended at least 45 days before the Closing Date (and comparable periods for the prior fiscal year);
provided that filing of the required financial statements on Form 10-K and Form 10-Q by the Company or the Acquired Company
will satisfy the foregoing requirements. |
| 3. | The Lenders shall have received a pro forma consolidated balance sheet and related pro forma consolidated
statement of income of the Company and its subsidiaries as of and for the 12-month period ending on the last day of the most recently
completed four-fiscal quarter period for which financial statements have been delivered pursuant to paragraph 2 above, prepared
after giving effect to the Transactions as if the Transactions had occurred |
3
Capitalized terms used but not otherwise defined herein have the meanings assigned thereto in the Commitment Letter to which this
Exhibit B is attached, including the other exhibits thereto.
| | as of such date (in the case of such balance sheet) or at the beginning of such period (in the
case of such statement of income) on a pro forma basis in accordance with Regulation S-X under the Securities Act of 1933,
as amended, together with such other adjustments as are reasonably satisfactory to the Arranger. |
| 4. | The Acquisition Agreement Representations and the Specified Representations shall be true and correct
in all material respects (or in all respects in the case of representations and warranties qualified as to materiality) at the
time of and after giving effect to the Acquisition and the borrowings under the Facility, and there shall exist no default or event
of default at the time of, or after giving effect to, such borrowing (subject, in the case of any default or event of default relating
to the accuracy of representations and warranties, to the Limited Conditions Provision). |
| 5. | No default or event of default shall exist under the Existing Company Credit Agreement (as the
same shall have been amended) and the Company shall be in compliance with each of its financial covenants under the Existing Company
Credit Agreement (as so amended) for the fiscal period for which financial statements shall as of the Closing Date have most recently
been delivered, in each case after giving pro forma effect to the Acquisition and the other Transactions to occur on the Closing
Date, including the borrowings under the Facility. |
| 6. | All fees due to the Administrative Agents, the Arranger and the Lenders pursuant to the Fee Letter
and, to the extent invoiced at least two business days prior to the Closing Date, all reasonable and documented expenses to be
paid or reimbursed to the Administrative Agent and the Arranger on or prior to the Closing Date pursuant to the Commitment Letter,
shall have been paid, in each case from the proceeds of the initial funding under the Facility. The Borrower shall have complied
with all of its obligations under the “Market Flex” provisions in the Fee Letter. |
| 7. | One or more investment banks (collectively, the “Investment Banks”) reasonably
satisfactory to the Arranger shall have been engaged to publicly sell or privately place the New Notes and the New Equity. At least
10 consecutive business days prior to the Closing Date (which 10 consecutive business-day period (i) shall exclude any day from
and including August 21, 2015, through and including September 8, 2015, any day from and including November 25, 2015, through and
including November 30, 2015, and any day from and including December 18, 2015, through and including January 4, 2016, the Company
shall have (A) provided to the Investment Banks one or more preliminary offering memoranda or preliminary private placement memoranda
relating to the offering of the New Notes in a form customary for private offerings of similar debt securities pursuant to Rule
144A (with registration rights) or, at the election of the Company, one or more preliminary prospectuses or preliminary prospectus
supplements pursuant to an effective and available registration statement on Form S-1 or Form S-3 under the Securities Act of 1933,
as amended (the “Securities Act”), relating to the offering of the New Notes in a form customary for public
offerings of similar debt securities registered pursuant to the Securities Act (including, in either case, all financial statements
and other information (including all audited financial statements, all unaudited financial statements (with respect to which the
Company’s and the Acquired Company’s independent accountants shall have performed a SAS 100 review, as applicable)
and all appropriate pro forma financial statements) that would enable the Investment Banks, among other things, to obtain customary
comfort letters from the Company’s and the Acquired Company’s independent registered public accounting firms) that
would be of the type that |
| | would be customary in a private offering of similar debt securities pursuant to Rule 144A (with
registration rights), or public offerings of similar debt securities registered pursuant to the Securities Act, as applicable (which,
in the case of a private offering pursuant to Rule 144A, for the avoidance of doubt, need not include financial statements or information
required by Rules 3-09, 3-10 or 3-16 of Regulation S-X, Compensation Discussion and Analysis required by Regulation S-K Item 402(b),
other information or financial data customarily excluded from a Rule 144A (with registration rights) offering memorandum), and
any applicable supplements to such offering documents, and at no time during such 10 consecutive business-day period shall the
financial information in such Debt Offering Document have become stale (the “Debt Offering Document”), (B) provided
to the Investment Banks drafts of customary comfort letters (including customary negative assurance comfort) by the independent
registered public accounting firm of the Company and, consistent with its obligations under the Acquisition Agreement, the Acquired
Company with respect to the financial information in the Debt Offering Document, which such accountants are prepared to issue upon
completion of customary procedures, each in form and substance customary for private offerings of similar debt securities pursuant
to Rule 144A (with registration rights), or public offerings of similar debt securities registered pursuant to the Securities Act,
as applicable, and (C) caused the senior management and other representatives of the Company and, in a manner consistent with
the Acquisition Agreement, the Acquired Company, to provide access in connection with due diligence investigations. |
| 8. | The Arranger shall have received the following customary closing documents: (a) a borrowing notice;
(b) customary legal opinions, certified organizational documents, customary evidence of authority, good standing certificates from
the jurisdictions of organization of the Company and customary secretary’s and officer’s certificates; and (c) at
least five days prior to the Closing Date, all documentation and other information required by bank regulatory authorities under
applicable “know-your-customer” and anti-money laundering rules and regulations, including, without limitation, the
Patriot Act. |
Exhibit 99.1
Execution Version
TENDER AND SUPPORT AGREEMENT
by and among
CELGENE CORPORATION,
STRIX CORPORATION,
and
EACH OF THE
STOCKHOLDERS NAMED HEREIN
Dated as of July 14, 2015
TENDER AND SUPPORT AGREEMENT
THIS TENDER AND SUPPORT AGREEMENT, dated as
of July 14, 2015 (this “Agreement”), by and among Celgene Corporation, a Delaware corporation (“Parent”),
Strix Corporation, a Delaware corporation and a direct wholly owned subsidiary of Parent (“Acquisition Sub”),
and each of the stockholders of Receptos, Inc., a Delaware corporation (the “Company”), named in Schedule
1 attached hereto (each, a “Principal Holder”).
Recitals
WHEREAS, concurrently with or immediately following
the execution of this Agreement, Parent, Acquisition Sub and the Company are entering into an Agreement and Plan of Merger, dated
as of the date hereof (as amended, supplemented, restated or otherwise modified from time to time, the “Merger Agreement”),
which provides, among other things, for (i) Acquisition Sub to commence a tender offer, (as it may be amended from time to
time as provided under the Merger Agreement, the “Offer”) to acquire all of the outstanding shares of common
stock, par value $0.001 per share, of the Company (the “Common Stock”) subject to the terms and conditions of
the Merger Agreement, and (ii) as soon as practicable following the consummation of the Offer, Acquisition Sub will merge
with and into the Company (the “Merger”), whereby, except as expressly provided in Article III of the Merger
Agreement, each issued and outstanding share of Common Stock immediately prior to the effective time of the Merger will be cancelled
and converted into the right to receive the merger consideration specified therein, in each case, upon the terms and subject to
the conditions set forth in the Merger Agreement;
WHEREAS, as of the date hereof, each Principal
Holder is the beneficial and/or record owner of his Existing Shares (as defined herein);
WHEREAS, as an inducement and condition to Parent
and Acquisition Sub entering into the Merger Agreement, Parent and Acquisition Sub have requested that each Principal Holder agree,
and each Principal Holder has agreed, severally and not jointly, to (i) enter into this Agreement, (ii) abide by the
covenants and obligations with respect to the Covered Shares (as defined herein) set forth herein, (iii) tender the shares
of Common Stock owned by them in the Offer, and (iv) support the Merger, the Offer and the other transactions contemplated
by the Merger Agreement (collectively, the “Transactions”); and
WHEREAS, the respective boards of directors of
Parent, Acquisition Sub and the Company have approved the Merger Agreement, the Offer, the Merger and the other Transactions, understanding
that the execution and delivery of this Agreement by the Principal Holders is a material inducement and condition to Parent’s
and Acquisition Sub’s willingness to enter into the Merger Agreement.
NOW, THEREFORE, in consideration of the foregoing
and the mutual representations, warranties, covenants and agreements herein contained, and intending to be legally bound hereby,
the parties hereto agree as follows:
ARTICLE I
GENERAL
1.1. Defined Terms. The following capitalized
terms, as used in this Agreement, shall have the meanings set forth below. Capitalized terms used but not otherwise defined herein
shall have the meanings ascribed thereto in the Merger Agreement.
“Agreement” has the meaning
set forth in the preamble hereto.
“Acquisition Sub” has the meaning
set forth in the preamble hereto.
“Beneficial Ownership” has
the meaning ascribed to such term in Rule 13d-3 under the Securities Exchange Act of 1934, as amended. The terms “Beneficially
Own,” “Beneficially Owned” and “Beneficial Owner” shall each have a correlative
meaning.
“Company” has the meaning set
forth in the preamble hereto.
“Company Equity Awards” means,
collectively, Company Options and Company RSU Awards.
“Common Stock” has the meaning
set forth in the recitals hereto.
“Covered Shares” means, with
respect to each Principal Holder and as of any given date, such Principal Holder’s Existing Shares, together with any shares
of Common Stock or other voting capital stock of the Company and any shares of Common Stock or other voting capital stock of the
Company issued upon the conversion, vesting payment, exercise or exchange of securities (including Company Equity Awards), in all
cases that such Principal Holder has or acquires Beneficial Ownership of on or after the date hereof as of such given date.
“Encumbrance” means any security
interest, pledge, mortgage, lien (statutory or other), charge, option to purchase, lease or other right to acquire any interest
or any claim, restriction, covenant, title defect, hypothecation, assignment, deposit arrangement or other encumbrance of any kind
or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including
any conditional sale or other title retention agreement), but excluding any obligation under this Agreement and any applicable
restrictions on transfer under the Securities Act. The term “Encumber” shall have a correlative meaning.
“Existing Shares” means, with
respect to each Principal Holder, an aggregate number of shares of Common Stock (including Company Restricted Shares) Beneficially
Owned by such Principal Holder as of the date hereof, as set forth opposite the Principal Holder’s name on Schedule 1
hereto.
“Grantees” has the meaning
set forth in Section 2.4.
“Merger” has the meaning set
forth in the recitals hereto.
“Merger Agreement” has the
meaning set forth in the recitals hereto.
“Merger Agreement Termination Date”
shall mean the date that the Merger Agreement shall be terminated in accordance with its terms.
“Offer” has the meaning set
forth in the recitals hereto.
“Parent” has the meaning set
forth in the preamble hereto.
“Permitted Transfer” means
a (a) Transfer of Covered Shares by a Principal Holder to an Affiliate of such Principal Holder, provided that, such Affiliate
shall remain an Affiliate of such Principal Holder at all times following such Transfer or (b) a Transfer by a Principal Holder
to (i) a descendant, heir, executor, administrator, testamentary trustee, lifetime trustee or legatee of such Principal Holder,
or (ii) any trust, the beneficiaries of which include only such Principal Holder or the Persons named in clause (i).
“Permitted Transferee” shall
mean any Person that Beneficially Owns Covered Shares pursuant to a Permitted Transfer.
“Principal Holder” has the
meaning set forth in the preamble hereto.
“Transactions” has the meaning
set forth in the recitals hereto.
“Transfer” means, directly
or indirectly, to sell, transfer, assign, pledge, hedge, gift, Encumber, hypothecate or similarly dispose of (by merger (including
by conversion into securities or other consideration), by tendering into any tender or exchange offer, by testamentary disposition,
by operation of law or otherwise), either voluntarily or involuntarily, or to enter into any Contract, derivative arrangement,
option or other arrangement or understanding with respect to the voting of or sale, transfer, assignment, pledge, Encumbrance,
hypothecation or similar disposition of (by merger, by tendering into any tender or exchange offer, by testamentary disposition,
by operation of law or otherwise).
ARTICLE II
VOTING
2.1. Agreement to Vote and Support. Each
Principal Holder hereby irrevocably and unconditionally agrees, severally and not jointly, that during the term of this Agreement,
at any meeting of the stockholders of the Company, however called, including any adjournment or postponement thereof, and in connection
with any written consent of the stockholders of the Company proposed to be taken, such Principal Holder shall, in each case to
the fullest extent that the Covered Shares are entitled to vote thereon or consent thereto:
(a) appear at each such meeting or otherwise cause
his Covered Shares to be counted as present thereat for purposes of calculating a quorum; and
(b) vote (or cause to be voted) solely in such
Principal Holder’s capacity as a stockholder of the Company, in person or by proxy covering, all of his Covered Shares (to
the extent not purchased in the Offer) against any Acquisition Proposal and against any other action, agreement or transaction
that is intended, or would reasonably be expected to impede, interfere with, delay, postpone or frustrate the purposes of or adversely
affect the Offer, the Merger or the other Transactions or this Agreement or the performance by the Company of its obligations under
the Merger Agreement or by such Principal Holder of his obligations under this Agreement, including: (1) any extraordinary corporate
transaction, such as a merger, consolidation or other business combination involving the Company or its Subsidiaries (other than
the Merger); (2) a sale, lease or transfer of all or substantially all of the assets of the Company or any of its Subsidiaries
or any reorganization, recapitalization or liquidation of the Company or any of its Subsidiaries; or (3) (i) any change in a majority
of persons who constitute the Board of Directors of the Company as of the date hereof, except for changes requested or expressly
permitted by Parent, (ii) any change in the present capitalization or dividend policy of the Company or any amendment or other
change to the Company’s certificate of incorporation or bylaws or (iii) any other material change in the Company’s
organizational structure or business; except, in the case of clauses (i) through (iii), to the extent expressly permitted by the
Merger Agreement or approved by Parent.
2.2. No Inconsistent Agreements. Each
Principal Holder hereby represents, warrants, covenants and agrees that, except for this Agreement, such Principal Holder (a) has
not entered into, and shall not enter into at any time while this Agreement remains in effect, any voting agreement or voting trust
with respect to the Covered Shares, (b) has not granted, and shall not grant at any time while this Agreement remains in effect,
a proxy (except pursuant to Section 2.4), consent or power of attorney with respect to the Covered Shares and (c) has
not taken and shall not knowingly take any action that would make any representation or warranty of such Principal Holder contained
herein untrue or incorrect or have the effect of preventing or disabling such Principal Holder from performing any of his obligations
under this Agreement. Each Principal Holder hereby represents that all proxies, powers of attorney, instructions or other requests
given by such Principal Holder prior to the execution of this Agreement in respect of the voting of such Principal Holder’s
Covered Shares, if any, are not irrevocable and each Principal Holder hereby revokes (and agrees to take any necessary further
action to cause to be revoked) any all previous proxies, powers of attorney, instructions or other requests with respect to such
Principal Holder’s Covered Shares.
2.3. Tender of the Covered Shares.
(a) Each Principal Holder hereby agrees that,
during the term of this Agreement, unless the Offer is earlier terminated or withdrawn by Acquisition Sub, it shall duly tender
(and deliver any certificates evidencing) the Covered Shares beneficially held by him or her, or cause his Covered Shares to be
duly tendered, into the Offer in accordance with the procedures set forth in the Offer Documents, free and clear of all Encumbrances.
(b) Each Principal Holder agrees that once the
Covered Shares are tendered into the Offer, such Principal Holder shall not withdraw any Covered Shares from the Offer unless
and until (i) the date that the Offer is terminated, withdrawn
or expired, or (ii) the termination of this Agreement in accordance with Section 5.1.
(c) Notwithstanding anything to the contrary
in this Section 2.3, no Principal Holder shall be required, for purposes of this Agreement, to exercise any unexercised
Company Options held by such Principal Holder.
2.4. Proxy. Each Principal Holder hereby
irrevocably appoints as his proxy and attorney-in-fact, Parent and any Person or Persons designated by Parent (collectively, the
“Grantees”), each of them individually, with full power of substitution and resubstitution, to vote or execute
written consents with respect to the Covered Shares in accordance with Section 2.1 and, in the discretion of the Grantees,
with respect to any proposed postponements or adjournments of any annual or special meetings of the stockholders of the Company
at which any of the matters described in Section 2.1 is to be considered. This proxy is coupled with an interest, was given
to secure the obligations of such Principal Holder under Section 2.1(a), was given as an additional inducement of Parent
and Acquisition Sub to enter into the Merger Agreement and shall be irrevocable, and such Principal Holder shall take such further
action or execute such other instruments as may be necessary to effectuate the intent of this proxy and hereby revokes any proxy
previously granted by such Principal Holder with respect to the Covered Shares. The power of attorney granted by each Principal
Holder herein is a durable power of attorney and shall survive the dissolution, bankruptcy, death or incapacity of such Principal
Holder. Parent may terminate this proxy with respect to any Principal Holder at any time at its sole election by written notice
provided to such Principal Holder. The proxy granted by each Principal Holder pursuant to this Section 2.4 shall be automatically
revoked upon the termination of this Agreement in accordance with Section 5.1.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1. Representations and Warranties of Each
Principal Holder . Each Principal Holder hereby represents and warrants to Parent and Acquisition Sub, severally and not jointly,
as follows:
(a) Authorization; Validity of Agreement; Necessary
Action. Such Principal Holder has the full power and authority and the requisite capacity and authority to execute and deliver
this Agreement, to perform his obligations hereunder and to consummate the transactions contemplated hereby. This Agreement has
been duly executed and delivered by such Principal Holder and, assuming this Agreement constitutes a valid and binding obligation
of Acquisition Sub and Parent, constitutes a legal, valid and binding obligation of such Principal Holder, enforceable against
it in accordance with its terms, subject to the effect of any bankruptcy, insolvency (including all Laws related to fraudulent
transfers), reorganization, moratorium or similar Laws affecting creditors’ rights generally and subject to the effect of
general principles of equity. The execution and delivery of this Agreement by such Principal Holder, the performance of his obligations
hereunder and the consummation of the transactions contemplated hereby have been duly authorized by all necessary action on the
part of such Principal Holder; and (ii) no
other proceedings on the part of such Principal Holder are necessary
to authorize this Agreement, the performance of his obligations hereunder and the consummation of the transactions contemplated
hereby.
(b) Ownership. Such Principal Holder’s
Existing Shares are, and except for Transfers permitted between the date hereof and the Acceptance Time pursuant to Section
4.1(a), all of the Covered Shares owned by such Principal Holder from the date hereof through and on the Acceptance Time will
be, Beneficially Owned and owned of record by such Principal Holder. Such Principal Holder has good and valid title to the Principal
Holder’s Existing Shares, free and clear of any Encumbrances (except for transfer restrictions set forth in an applicable
award agreement evidencing Company Restricted Shares). Other than the Existing Shares and Company Equity Awards set forth on Schedule
1 hereto, as of the date hereof such Principal Holder does not Beneficially Own or own of record: (i) any securities of
the Company convertible into or exchangeable or exercisable for shares of capital stock or other voting securities or equity interests
of the Company, (ii) any warrants, calls, options or other rights to acquire from the Company any capital stock, voting securities,
equity interests or securities convertible into or exchangeable or exercisable for capital stock or voting securities of the Company,
or any stock appreciation rights, or (iii) “phantom” stock rights, performance units or other rights to receive
shares of Common Stock (or cash or other economic benefit in respect thereof) on a deferred basis. As of the date hereof, such
Principal Holder’s Existing Shares constitute all of the shares of Common Stock Beneficially Owned or owned of record by
such Principal Holder. Except for the proxy granted to the Grantees pursuant to Section 2.4, such Principal Holder has and
will have at all times through the Acceptance Time sole voting power (including the right to control such vote as contemplated
herein), sole power of disposition, sole power to issue instructions with respect to the matters set forth in Article II
and sole power to agree to all of the matters set forth in this Agreement, in each case with respect to all of such Principal Holder’s
Existing Shares and with respect to all of the Covered Shares owned by such Principal Holder as of the Acceptance Time.
(c) No Violation. The execution and delivery
of this Agreement by such Principal Holder does not, and the performance by such Principal Holder of his obligations under this
Agreement will not (i) conflict with or violate any Law, ordinance or regulation of any Governmental Authority, applicable to such
Principal Holder or by which any of his respective assets or properties is bound or (ii) conflict with, result in any breach of
or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others
any rights of termination, modification, acceleration or cancellation of, or result in the creation of any Encumbrance on the properties
or assets of such Principal Holder pursuant to, any Contract, Permit or other instrument or obligation to which such Principal
Holder is a party or by which such Principal Holder, and/or any of his assets or properties is bound, except for any of the foregoing
as would not reasonably be expected, either individually or in the aggregate, to impair the ability of such Principal Holder to
perform his obligations hereunder or to consummate the transactions contemplated hereby.
(d) Consents and Approvals. The execution
and delivery of this Agreement by such Principal Holder does not, and the performance by such Principal Holder of his obligations
under this Agreement and the consummation by such Principal Holder of the transactions
contemplated hereby will not, require such Principal Holder to obtain
any consent, approval, authorization or permit of, or to make any registration, declaration, filing with or notification to, any
Governmental Authority, except for any of the foregoing as would not reasonably be expected, either individually or in the aggregate,
to impair the ability of such Principal Holder to perform his obligations hereunder or to consummate the transactions contemplated
hereby. Each Principal Holder shall provide any spousal consent necessary under any “community property” or other Laws
in order to enforce the obligations of such Principal Holder under this Agreement.
(e) Absence of Litigation. There is no
Legal Proceeding pending or, to the knowledge of such Principal Holder, threatened by, against, or involving or affecting such
Principal Holder and/or any of his respective Affiliates before or by any Governmental Authority that could reasonably be expected
to impair the ability of such Principal Holder to perform his obligations hereunder or to consummate the transactions contemplated
hereby.
(f) Reliance by Parent and Acquisition Sub.
Such Principal Holder understands and acknowledges that Parent and Acquisition Sub are entering into the Merger Agreement in reliance
upon the execution and delivery of this Agreement by such Principal Holder and the representations, warranties, covenants and agreements
of such Principal Holder contained herein and that the same are a material inducement thereto. Such Principal Holder understands
and acknowledges that the Merger Agreement governs the terms of the Offer, Merger and the other Transactions. Such Principal Holder
has received and reviewed a copy of the Merger Agreement.
3.2. Representations and Warranties of Parent
and Acquisition Sub. Parent and Acquisition Sub jointly and severally represent and warrant that they have the requisite corporate
power and authority to execute and deliver this Agreement, to perform their obligations hereunder and to consummate the transactions
contemplated hereby. This Agreement has been duly executed and delivered by Parent and Acquisition Sub and, assuming this Agreement
constitutes a valid and binding obligation of each Principal Holder, constitutes a legal, valid and binding obligation of Parent
and Acquisition Sub, as applicable, enforceable against Parent and Acquisition Sub, as applicable, in accordance with its terms,
subject to the effect of any bankruptcy, insolvency (including all Laws related to fraudulent transfers), reorganization, moratorium
or similar Laws affecting creditors’ rights generally and subject to the effect of general principles of equity.
ARTICLE IV
OTHER COVENANTS
4.1. Prohibition on Transfers; Other Actions.
Until the termination of this Agreement in accordance with Section 5.1, each Principal Holder, solely with respect to himself,
agrees that he shall not (a) Transfer any of the Covered Shares, Beneficial Ownership thereof or any other interest therein
unless (i) such Transfer is a Permitted Transfer, and (ii) such Permitted Transferee executes and delivers to Parent
a written agreement, in form and substance reasonably acceptable to Parent, to assume all of such Principal Holder’s obligations
hereunder in respect of the securities subject to such Transfer and to be bound by the terms of this Agreement, with respect to
the securities subject to such Transfer, to the same extent as such Principal Holder is
bound hereunder and to make each of the representations and warranties
hereunder in respect of the securities Transferred as such Principal Holder shall have made hereunder, (b) enter into any
agreement, arrangement or understanding with any Person, or take any other action, that violates or conflicts with or would reasonably
be expected to violate or conflict with, or result in or give rise to a violation of or conflict with, such Principal Holder’s
representations, warranties, covenants and obligations under this Agreement or is inconsistent with the transactions contemplated
by the Merger Agreement or the provisions thereof, (c) directly or indirectly take any action or cause the taking of any other
action that could restrict or otherwise affect such Principal Holder’s legal power, authority and right to comply with and
perform his covenants and obligations under this Agreement or (d) discuss, negotiate, make an offer or enter into a contract,
agreement, understanding, commitment or other arrangement with respect to any matter related to this Agreement, except in the case
of clause (d) as would not reasonably be expected to prevent or materially delay such Principal Holder’s ability to
perform his obligations hereunder. Any Transfer in violation of this provision shall be void ab initio.
4.2. Adjustments. In the event of a stock
split, stock dividend or distribution (including any dividend or distribution of securities convertible into Common Stock), or
any change in the Common Stock by reason of any split-up, reverse stock split, reorganization, recapitalization, combination, reclassification,
exchange of shares or the like, the terms “Existing Shares” and “Covered Shares” shall be deemed to refer
to and include such shares as well as all such stock dividends and distributions and any securities into which or for which any
or all of such shares may be changed or exchanged or which are received in such transaction.
4.3. Notice of Acquisitions. Each Principal
Holder shall notify Parent as promptly as practicable (and in any event within two (2) Business Days after receipt) in writing
of the number of any additional shares of Common Stock, Company Equity Awards or other securities of the Company of which such
Principal Holder acquires Beneficial Ownership on or after the date hereof, other than shares of Common Stock issued pursuant to
the exercise, vesting and/or payment of Company Equity Awards.
4.4. Waiver of Dissenters Rights. Each
Principal Holder hereby irrevocably waives, and agrees not to assert or perfect, and shall cause any of his Affiliates who hold
any Covered Shares to waive and to not assert or perfect, any rights of appraisal or rights to dissent from the Merger that the
Principal Holder may have under applicable Laws or otherwise, including Section 262 of the DGCL by virtue of ownership of the Covered
Shares.
4.5. Further Assurances. From time to
time, at Parent’s request and without further consideration, each Principal Holder shall cooperate with Parent and Acquisition
Sub in making all filings and obtaining all consents of Governmental Authorities and third parties and execute and deliver such
additional documents and take all such further actions as may be reasonably necessary or desirable to effect the actions and consummate
the transactions contemplated by this Agreement.
ARTICLE V
MISCELLANEOUS
5.1. Termination. This Agreement shall
terminate, and no party shall have any rights or obligations hereunder, (a) automatically, without any notice or other action by
any Person, upon the earliest to occur of (i) the Effective Time, (ii) a Company Board Recommendation Change and (iii) the
Merger Agreement Termination Date, or (b) with respect to any Principal Holder, upon the mutual written agreement of Parent and
such Principal Holder. Notwithstanding the foregoing, the provisions of this Article V (other than Section 5.4) shall
survive any termination of this Agreement without regard to any temporal limitation. Neither the provisions of this Section
5.1 nor the termination of this Agreement shall relieve any party hereto from any liability to any other party arising out
of or in connection with a prior breach of this Agreement.
5.2. No Ownership Interest. Nothing contained
in this Agreement shall be deemed to vest in Parent or Acquisition Sub any direct or indirect ownership or incidence of ownership
of or with respect to any Covered Shares. All rights, ownership and economic benefits of and relating to the Covered Shares remain
vested in and belong to the applicable Principal Holder, and nothing herein shall, or shall be construed to, grant Parent any power,
sole or shared, to direct or control the voting or disposition of any of the Covered Shares, except as otherwise provided herein.
5.3. Expenses. Whether or not the Transactions
are consummated, all expenses incurred by any party to this Agreement or on its behalf in connection with this Agreement and the
Transactions shall be paid by the party incurring those expenses.
5.4. Public Announcements. Except as
required by applicable Law (in which case the Principal Holder required to make the announcement will use his reasonable efforts
to allow Parent reasonable time to comment on such announcement in advance of such issuance), no public announcements by any Principal
Holder regarding this Agreement, the transactions contemplated hereby, the Merger Agreement or the Transactions are permitted.
Each Principal Holder (a) consents to and authorizes the publication and disclosure by Parent and its Affiliates of his identity
and holding of the Covered Shares and the nature of his commitments and obligations under this Agreement in any announcement or
disclosure required by the SEC or other Governmental Authority, the Offer or any other disclosure document in connection with the
Offer, the Merger, any other Transaction or the transactions contemplated by this Agreement, (b) agrees to give to Parent any information
it may reasonably require for the preparation of any such disclosure documents and (c) agrees to promptly notify Parent of any
required corrections with respect to any written information supplied by him specifically for use in any such disclosure document,
if any, to the extent that any shall be or have become false or misleading in any material respect.
5.5. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly delivered and received hereunder (a) two (2) Business Days
after being sent by registered or certified mail, return receipt requested, postage prepaid, (b) one (1) Business Day after being
sent for next Business Day delivery, fees prepaid, via a reputable
nationwide overnight courier service, or (c) immediately upon delivery
by hand or by facsimile (with a written or electronic confirmation of delivery), in each case to the intended recipient as set
forth below:
If to Parent or Acquisition Sub to:
c/o Celgene Corporation
86 Morris Avenue
Summit, New Jersey 07901
Attention: General Counsel
Facsimile No.: (908) 673-2771
with a copy (which shall not constitute notice) to:
Proskauer Rose LLP
Eleven Times Square
New York, New York 10036
|
Attention: |
Robert A. Cantone |
|
|
Daniel I. Ganitsky |
|
|
Ori Solomon |
|
Facsimile: |
(212) 969-2900 |
If to a Principal Holder, to such Principal Holder at the
address specified on Schedule 1, with a copy (which shall not constitute notice) to:
Latham & Watkins LLP
885 Third Avenue
New York, New York 10022-4834
|
Attention: |
Charles K. Ruck |
|
|
R. Scott Shean |
|
Facsimile: |
(212) 751-4864 |
5.6. Interpretation. The principles set
forth in Section 1.3 of the Merger Agreement shall apply to this Agreement.
5.7. Consents and Approvals. For any
matter under this Agreement requiring the consent or approval of any party to be valid and binding on the parties, such consent
or approval must be in writing.
5.8. Counterparts. This Agreement may
be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective
when one or more counterparts have been signed by each of the parties and delivered to the other party, it being understood that
all parties need not sign the same counterpart. Delivery of an executed counterpart of a signature page to this Agreement
by facsimile or other electronic transmission,
including by e-mail attachment, shall be effective as delivery of
a manually executed counterpart of this Agreement.
5.9. Entire Agreement; No-Third Party Beneficiaries.
This Agreement and the Merger Agreement (and the schedules, annexes and exhibits hereto and thereto) and the documents and instruments
and other agreements among the parties hereto and thereto as contemplated by or referred to herein or therein, constitute the entire
agreement among the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof. This Agreement is not intended to, and shall not,
confer upon any Person (other than the parties hereto and their respective successors and permitted assigns) any rights, benefits,
obligations, liabilities or remedies hereunder.
5.10. Governing Law. This Agreement shall
be governed by and construed in accordance with the Laws of the State of Delaware, regardless of the Laws that might otherwise
govern under applicable principles of conflicts of law thereof.
5.11. Assignment. Except in connection
with a Permitted Transfer, no party may assign (by operation of Law or otherwise) either this Agreement or any of its rights, interests
or obligations hereunder without the prior written approval of the other parties, except that Acquisition Sub may assign, in its
sole discretion, any or all of its rights, interests, or obligations hereunder to any direct wholly owned Subsidiary of Parent
without the prior written approval of the Principal Holders. Subject to the preceding sentence, this Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective successors and Permitted Transferees. Any purported
assignment in violation of this Agreement will be void ab initio.
5.12. Specific Enforcement; Submission to
Jurisdiction; Service.
(a) The parties hereto hereby agree that irreparable
damage would occur in the event that any provision of this Agreement were not performed in accordance with its specific terms or
were otherwise breached, and that money damages or other legal remedies would not be an adequate remedy for any such damages. Accordingly,
the parties hereto acknowledge and hereby agree that in the event of any breach or threatened breach by the Principal Holders,
on the one hand, or Parent and/or Acquisition Sub, on the other hand, of any of their respective covenants or obligations set forth
in this Agreement, the Principal Holders, on the one hand, and Parent and Acquisition Sub, on the other hand, shall be entitled
to an injunction or injunctions to prevent or restrain breaches or threatened breaches of this Agreement, by the other (as applicable),
and to specifically enforce the terms and provisions of this Agreement to prevent breaches or threatened breaches of, or to enforce
compliance with, the covenants and obligations of the other under this Agreement. The Principal Holders, on the one hand, and Parent
and Acquisition Sub, on the other hand hereby agree not to raise any objections to the availability of the equitable remedy of
specific performance to prevent or restrain breaches or threatened breaches of this Agreement by such party (or parties), and to
specifically enforce the terms and provisions of this Agreement to prevent breaches or threatened breaches of, or to enforce compliance
with, the covenants and obligations of such party (or parties) under this Agreement.
(b) Each of the parties hereto (i) irrevocably
consents to the service of the summons and complaint and any other process in any action or proceeding relating to the transactions
contemplated by this Agreement, for and on behalf of itself or any of its properties or assets, in accordance with Section 5.5
or in such other manner as may be permitted by applicable Law, and nothing in this Section 5.12(b) shall affect the right
of any party to serve legal process in any other manner permitted by applicable Law; (ii) irrevocably and unconditionally consents
and submits itself and its properties and assets in any action or proceeding to the exclusive jurisdiction of the Court of Chancery
of the State of Delaware (or, only if the Court of Chancery of the State of Delaware declines to accept or does not have jurisdiction
over a particular matter, any federal or other state court within the State of Delaware) in the event any dispute or controversy
arises out of this Agreement or the transactions contemplated hereby, or for recognition and enforcement of any judgment in respect
thereof; (iii) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave
from any such court; (iv) agrees that any actions or proceedings arising in connection with this Agreement or the transactions
contemplated hereby shall be brought, tried and determined only in the Court of Chancery of the State of Delaware (or, only if
the Court of Chancery of the State of Delaware declines to accept or does not have jurisdiction over a particular matter, any federal
or other state court within the State of Delaware); (v) waives any objection that it may now or hereafter have to the venue of
any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees
not to plead or claim the same; and (vi) agrees that it will not bring any action relating to this Agreement or the transactions
contemplated hereby in any court other than the aforesaid courts. Each of Parent, Acquisition Sub and the Principal Holders agrees
that a final judgment in any action or proceeding in such courts as provided above shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by applicable Law.
5.13. Waiver of Jury Trial. EACH OF PARENT,
ACQUISITION SUB AND THE PRINCIPAL HOLDERS HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF PARENT, ACQUISITION
SUB OR THE PRINCIPAL HOLDERS IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.
5.14. Amendment; Waiver. Subject to applicable
Law and subject to the other provisions of this Agreement, this Agreement may be amended by the parties hereto at any time prior
to the Effective Time by execution of an instrument in writing signed on behalf of each of Parent, Acquisition Sub and the Principal
Holders (or, in the case of an Amendment relating only to a certain Principal Holder, by each of Parent, Acquisition Sub and such
Principal Holder); provided, however, no amendment shall be made to this Agreement that requires the approval of Company
Stockholders under Delaware Law or the rules of NASDAQ, without such approval. At any time and from time to time prior to the Effective
Time, any party or parties hereto may, to the extent legally allowed and except as otherwise set forth herein, (a) extend the time
for the performance of any of the obligations or other acts of the other party or parties hereto, as applicable, (b) waive any
inaccuracies in the representations and warranties made to such party
or parties hereto contained herein or in any document delivered
pursuant hereto and (c) waive compliance with any of the agreements or conditions for the benefit of such party or parties
hereto contained herein. Any agreement on the part of a party or parties hereto to any such extension or waiver shall be valid
only if set forth in an instrument in writing signed on behalf of such party or parties, as applicable. Any delay in exercising
any right under this Agreement shall not constitute a waiver of such right.
5.15. Severability. In the event that
any provision of this Agreement, or the application thereof, becomes or is declared by a court of competent jurisdiction to be
illegal, void or unenforceable, the remainder of this Agreement will continue in full force and effect and the application of such
provision to other persons or circumstances will be interpreted so as reasonably to effect the intent of the parties hereto. The
parties further agree to negotiate in good faith in an effort to replace such void or unenforceable provision of this Agreement
with a valid and enforceable provision that will achieve, to the maximum extent possible, the economic, business and other purposes
of such void or unenforceable provision.
5.16. Action by Stockholder Capacity Only.
Parent acknowledges that each Principal Holder has entered into this Agreement solely in his capacity as the record and/or beneficial
owner of the Covered Shares (and not in any other capacity, including any capacity as a director or officer of the Company). Nothing
herein shall limit or affect any actions taken by any Principal Holder, or require a Principal Holder to take any action, in each
case, in his capacity as a director or officer of the Company, including to disclose information acquired solely in their capacity
as a director or officer of the Company, and any actions taken (whatsoever), or failure to take any actions (whatsoever), by him
in such capacity as a director or officer of the Company shall not be deemed to constitute a breach of this Agreement.
5.17. Several, Not Joint Obligations.
The representations, warranties, covenants and other obligations of the Principal Holders under this Agreement are, in all respects,
several and not joint, such that no Principal Holder shall be liable or otherwise responsible for any representations, warranties,
covenants or other obligations of any other Principal Holder, or any breach or violation thereof.
[Remainder of this page intentionally left
blank]
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be signed (where applicable, by their respective officers or other authorized Person thereunto duly authorized)
as of the date first written above.
|
CELGENE CORPORATION |
|
|
|
|
By: |
/s/ Robert J. Hugin |
|
|
Name: |
Robert J. Hugin |
|
|
Title: |
Chairman and CEO |
|
|
|
|
|
STRIX CORPORATION |
|
|
|
|
By: |
/s/ Robert J. Hugin |
|
|
Name: |
Robert J. Hugin |
|
|
Title: |
CEO |
[Signature Page to Tender and Support Agreement]
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be signed as of the date first written above.
|
PRINCIPAL HOLDERS |
|
|
|
/s/ Faheem Hasnain |
|
Faheem Hasnain |
|
|
|
/s/ William H. Rastetter, Ph.D. |
|
William H. Rastetter, Ph.D. |
[Signature Page to Tender and Support Agreement]
SCHEDULE 1
PRINCIPAL HOLDERS
Principal Holder Name and Address |
|
Existing Shares |
|
Company Equity
Awards* |
Faheem Hasnain
c/o Receptos, Inc.
3033 Science Park Road, Suite 300
San Diego, California 92121 |
|
374,520 |
|
447,940 |
|
|
|
|
|
William H. Rastetter, Ph.D.
c/o Receptos, Inc.
3033 Science Park Road, Suite 300
San Diego, California 92121 |
|
260,806 |
|
35,600 |
* To the extent not counted as Existing Shares, and to the extent
expressly set forth in Section 4.2(b) of the Company Disclosure Letter, which is incorporated herein by reference to the extent
applicable.
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