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Document Preview Agreement and Plan of Merger |
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Title: |
Agreement and Plan of Merger |
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Entities: |
Royal Bank of Canada; Targeted Genetics Corp.; Davis Wright Tremaine; Dorsey & Whitney LLP |
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Date: |
2004 |
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Size: |
Preview shows 24KB of 284KB total |
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Price: |
$99 |
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ID: |
#328419 |
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Start of Preview |
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AGREEMENT AND PLAN OF MERGER
BY AND AMONG
CHROMOS MOLECULAR SYSTEMS INC.
and
CHROMOS, INC.
and
CELLEXSYS, INC.
and
CERTAIN SHAREHOLDERS OF CELLEXSYS, INC.
dated as of June 21, 2004
TABLE OF CONTENTS
{TABLE}
{CAPTION}
PAGE
{S} {C}
1. DEFINITIONS............................................................................... 1
2. THE MERGER................................................................................ 10
2.1 The Merger ............................................................................... 10
2.2 The Closing............................................................................... 10
2.3 Effective Date and Time................................................................... 11
2.4 Articles of Incorporation of the Surviving Corporation.................................... 11
2.5 Bylaws of the Surviving Corporation....................................................... 11
2.6 Directors and Officers.................................................................... 11
2.7 Merger Consideration; Conversion of Shares................................................ 11
(a) Cancellation of Company Shares............................................... 11
(b) Consideration................................................................ 11
(c) Payment of Merger Consideration.............................................. 12
(d) Closing of Transfer Books; Surrender of Certificates......................... 13
(e) Deliveries at the Closing.................................................... 13
(f) Minimum Net Asset Adjustment................................................. 14
(g) The Deposit.................................................................. 16
(h) Outstanding Merger Sub Shares to be Converted................................ 16
(i) Outstanding Options to Purchase Company Shares............................... 16
(j) Shareholders' Rights under Washington Law.................................... 16
(k) No Dividends................................................................. 16
(l) No Fractional Shares......................................................... 17
2.8 Shareholder Representative................................................................ 17
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE PRINCIPAL SHAREHOLDERS.............. 17
(a) Organization of the Company.................................................. 17
(b) Charter Documents; Records................................................... 18
(c) Authorization of Transaction................................................. 18
(d) Noncontravention............................................................. 18
(e) Brokers' Fees................................................................ 19
(f) Title to Assets.............................................................. 19
(g) Capitalization; Company Shares............................................... 19
(h) Financial Statements......................................................... 20
(i) Events Subsequent to December 31, 2003....................................... 21
(j) Undisclosed Liabilities...................................................... 22
(k) Legal Compliance............................................................. 23
(l) Clinical Trials.............................................................. 23
(m) Tax Matters.................................................................. 24
(n) Real Property................................................................ 26
(o) Intellectual Property........................................................ 26
(p) Software..................................................................... 29
{/TABLE}
-i-
{PAGE}
TABLE OF CONTENTS
(continued)
{TABLE}
{CAPTION}
PAGE
{S} {C}
(q) Use of Intellectual Property................................................. 30
(r) Contracts.................................................................... 30
(s) Powers of Attorney........................................................... 32
(t) Insurance.................................................................... 32
(u) Litigation................................................................... 33
(v) Product Liability............................................................ 33
(w) Employees.................................................................... 33
(x) Employee Benefits............................................................ 34
(y) Guaranties................................................................... 37
(z) Environment, Health, and Safety.............................................. 37
(aa) Certain Business Relationships with the Company.............................. 37
(bb) Certain Payments............................................................. 37
(cc) Access....................................................................... 38
(dd) Vote Required ............................................................... 38
4. REPRESENTATIONS AND WARRANTIES OF THE PARENT AND MERGER SUB............................... 38
(a) Organization................................................................. 38
(b) Authorization of Transaction................................................. 38
(c) Noncontravention............................................................. 39
(d) Broker's Fees................................................................ 39
(e) The Parent Shares............................................................ 39
(f) Convertible Debenture and Convertible Debenture Shares....................... 39
(g) Foreign Issuer............................................................... 40
(h) Public Disclosure Record..................................................... 40
5. CONDITIONS TO OBLIGATION TO CLOSE......................................................... 40
(a) Conditions to Obligation of the Parent and Merger Sub........................ 40
(b) Conditions to Obligation of the Company and the Shareholders................. 44
6. PRE-CLOSING COVENANTS..................................................................... 46
(a) Access and Investigation..................................................... 46
(b) Operation of the Businesses of the Company................................... 46
(c) Negative Covenant............................................................ 47
(d) Obligation to Fund the Company............................................... 48
(e) Repayment of Advances Made by Targeted....................................... 48
(f) Intercompany Indebtedness.................................................... 48
(g) Termination of Plans......................................................... 48
(h) No Solicitation.............................................................. 49
(i) Satisfaction of Indebtedness................................................. 52
(j) Tax Matters.................................................................. 52
(k) Approval of Company Shareholders; Information Statement...................... 53
(l) Dissenting Shares............................................................ 54
{/TABLE}
-ii-
{PAGE}
TABLE OF CONTENTS
(continued)
{TABLE}
{CAPTION}
PAGE
{S} {C}
7. POST-CLOSING COVENANTS.................................................................... 54
(a) General...................................................................... 54
(b) Litigation Support........................................................... 55
(c) Transition................................................................... 55
(d) Confidentiality.............................................................. 55
(e) Noncompetition............................................................... 56
(f) Tax Matters.................................................................. 57
(g) Non-Solicitation............................................................. 60
(h) Foreign Private Issuer Status................................................ 61
(i) Listing of Parent Shares..................................................... 61
8. REMEDIES FOR BREACHES OF THIS AGREEMENT................................................... 61
(a) Survival of Representations and Warranties................................... 61
(b) Indemnification Provisions for Benefit of the Parent......................... 61
(c) Indemnification Holdback..................................................... 62
(d) Indemnification Provisions for Benefit of the Principal Shareholders......... 63
(e) Matters Involving Third Parties.............................................. 64
(f) Determination of Adverse Consequences........................................ 65
(g) Post-Closing................................................................. 65
9. TERMINATION AND EXTENSION................................................................. 65
(a) Termination.................................................................. 65
(b) Termination Fee Payable to Parent............................................ 67
(c) Termination Fee Payable to the Company....................................... 68
(d) Effect of Termination........................................................ 69
(e) Extension of Closing Date by Parent.......................................... 69
(f) Payment of Additional Deposit by Parent...................................... 69
(g) Treatment of Termination Fees................................................ 69
10. MISCELLANEOUS............................................................................. 70
(a) Press Releases and Public Announcements...................................... 70
(b) No Third-Party Beneficiaries................................................. 70
(c) Entire Agreement............................................................. 70
(d) Succession and Assignment.................................................... 70
(e) Counterparts................................................................. 70
(f) Headings..................................................................... 70
(g) Notices...................................................................... 70
(h) Governing Law................................................................ 71
(i) Amendments and Waivers....................................................... 71
(j) Severability................................................................. 72
(k) Expenses..................................................................... 72
(l) Construction................................................................. 72
(m) Incorporation of Exhibits and Schedules...................................... 72
{/TABLE}
-iii-
{PAGE}
TABLE OF CONTENTS
(continued)
{TABLE}
{CAPTION}
PAGE
{S} {C}
(n) Specific Performance......................................................... 72
(o) Submission to Jurisdiction................................................... 73
(p) Arbitration.................................................................. 73
{/TABLE}
TABLE OF SCHEDULES AND EXHIBITS:
{TABLE}
{S} {C}
Schedule A -- Company Disclosure Schedule
Schedule B -- Required Consents
Exhibit A -- Form of Convertible Debenture
Exhibit B -- Articles of Merger
Exhibit C -- Form of Milestone Payment Agreement
Exhibit D -- Form of Transition Services Agreement
Exhibit E -- Form of Opinion of Dorsey & Whitney LLP
Exhibit F -- Form of Opinion of Graham & Dunn
Exhibit G -- Form of Security Agreement
Exhibit H -- Form of Representation and Support Agreement
Exhibit I -- Form of Optionholder Representation Agreement
Exhibit J -- Form of Opinion of Fasken Martineau DuMoulin LLP
Exhibit K -- Form of Opinion of Davis Wright Tremaine LLP
{/TABLE}
-iv-
{PAGE}
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (this "AGREEMENT") is entered into on June 21,
2004, by and among CHROMOS MOLECULAR SYSTEMS INC. a corporation formed under the
laws of the Province of British Columbia, Canada (the "PARENT"), CHROMOS, INC.,
a corporation organized under the laws of the State of Washington ("MERGER
SUB"), CELLEXSYS, INC., a corporation organized under the laws of the State of
Washington (the "COMPANY"), and each of the Principal Shareholders (as defined
below) of the Company. The Parent, Merger Sub, the Company and the Principal
Shareholders are referred to collectively herein as the "PARTIES".
- 1 -
{PAGE}
RECITALS
A. The Company is in the business of the research and development of
intellectual property in the area of cell therapy technology, including a
patented process for expanding substantial quantities of antigen-specific
cytotoxic T-cells ex vivo (outside the body) before administering them for
therapeutic applications.
B. This Agreement contemplates a merger of the Company and Merger Sub on the
Closing Date, pursuant to which the Parent will acquire one hundred percent
(100%) of the outstanding shares of the Surviving Corporation (as defined
below), and in connection therewith, each of the Shareholders will receive
consideration in the form of cash or shares in the capital of the Parent,
together with such Shareholder's proportionate share of the Convertible
Debenture (as defined below).
Now, therefore, in consideration of the premises and the mutual promises herein
made, and in consideration of the representations, warranties, and covenants
herein contained, the Parties agree as follows:
1. DEFINITIONS.
"ACQUISITION PROPOSAL" has the meaning set forth in section 6(h)(i) below.
"ACQUISITION TRANSACTION" has the meaning set forth in section 6(h)(i)
below.
"ACTUAL VALUE" has the meaning in Section 2.7(f)(iv)(C) below.
"ADVERSE CONSEQUENCES" means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions,
judgments, orders, decrees, rulings, damages, penalties, fines, costs,
amounts paid in settlement, Liabilities, obligations, Taxes, liens,
losses, expenses, and fees, including court costs and reasonable
attorneys' fees and expenses.
"AFFILIATED GROUP" means any affiliated group within the meaning of Code
Section 1504(a) (or any similar group defined under a similar provision of
state, local, or foreign law).
"AGREEMENT" has the meaning set forth in the preface above.
"AMENDED TRANSACTION" has the meaning set forth in section 6(h)(iii)
below.
"ARTICLES OF MERGER" has the meaning set forth in Section 2.3 below.
"BOARD APPROVAL MODIFICATION" has the meaning set forth in Section
6(h)(iii) below.
"BUSINESS" means the business conducted by the Company prior to and as of
the Closing Date, which is the business of research and development of
intellectual property in the area of cell therapy technology, including a
patented process for expanding substantial
- 2 -
{PAGE}
quantities of antigen-specific T-cells ex vivo before administering them
for therapeutic applications.
"CERTIFICATES" has the meaning set forth in Section 2.7(d) below.
"CLOSING" has the meaning set forth in Section 2.2 below.
"CLOSING DATE" has the meaning set forth in Section 2.2 below.
"CLOSING DATE BALANCE SHEET" has the meaning set forth in Section
2.7(f)(ii) below.
"COBRA" has the meaning set forth in Section 3(x)(xi) below.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMPANY" means CellExSys, Inc.
"COMPANY BOARD" has the meaning set forth in Section 6(h)(ii) below.
"COMPANY DISCLOSURE SCHEDULE" has the meaning set forth in Section 3
below.
"COMPANY PLANS" has the meaning set forth in Section 3(x)(ii) below.
"COMPANY SHAREHOLDERS MEETING" has the meaning set forth in Section 6(k)
below.
"COMPANY SHARES" means, collectively all of the issued and outstanding
common shares and preferred shares of the Company as of the Closing Date.
"COMPANY'S TRANSACTIONAL EXPENSES" has the meaning set forth in Section
10(k)(iii) below.
"COMPETITIVE BUSINESS" means any business, trade or activity engaged in
the research and development, manufacture, or sale of intellectual
property, products or services in the area of cell therapy technology
using ex vivo (outside the body) expansion of autologous antigen-specific
T-cells.
"CONFIDENTIAL INFORMATION" means: (a) confidential data and confidential
information relating to the business of any Party (the "PROTECTED PARTY")
which is or has been disclosed to another Party (the "RECIPIENT") or of
which the Recipient became aware as a consequence of or through its
relationship with the Protected Party and which has value to the Protected
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