EXHIBIT 99.1
AGREEMENT AND PLAN OF MERGER
among
Millennium Pharmaceuticals, Inc.,
PGM Corporation
and
COR Therapeutics, Inc.
December 5, 2001
TABLE OF CONTENTS
Page
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ARTICLE I THE MERGER ............................................... 1
Section 1.01 Effective Time of the Merger ............................. 1
Section 1.02 Closing 2
Section 1.03 Effects of the Merger .................................... 2
Section 1.04 Directors ................................................ 2
ARTICLE II CONVERSION OF SECURITIES ................................. 3
Section 2.01 Conversion of Capital Stock .............................. 3
Section 2.02 Exchange of Certificates ................................. 5
ARTICLE III REPRESENTATIONS AND WARRANTIES OF CRIMSON ................ 8
Section 3.01 Organization of COR ...................................... 9
Section 3.02 COR Capital Structure .................................... 9
Section 3.03 Authority; No Conflict; Required Filings and Consents .... 11
Section 3.04 SEC Filings; Financial Statements ........................ 13
Section 3.05 No Undisclosed Liabilities ............................... 13
Section 3.06 Absence of Certain Changes or Events ..................... 14
Section 3.07 [Intentionally Omitted] .................................. 14
Section 3.08 [Intentionally Omitted] .................................. 14
Section 3.09 Taxes .................................................... 14
Section 3.10 Properties ............................................... 15
Section 3.11 Suppliers ................................................ 16
Section 3.12 Intellectual Property .................................... 16
Section 3.13 Agreements, Contracts and Commitments .................... 17
Section 3.14 Product Liability; Litigation ............................ 18
Section 3.15 Environmental Matters .................................... 18
Section 3.16 Employee Benefit Plans ................................... 19
Section 3.17 Compliance With Laws ..................................... 21
Section 3.18 Preclinical Testing and Clinical Trials .................. 21
Section 3.19 Certain Regulatory Matters ............................... 21
Section 3.20 Tax Matters .............................................. 22
Section 3.21 Registration Statement; Proxy Statement/Prospectus ....... 22
Section 3.22 Labor Matters ............................................ 23
Section 3.23 Insurance ................................................ 23
Section 3.24 No Existing Discussions .................................. 24
Section 3.25 Opinion of Financial Advisor ............................. 24
Section 3.26 Section 203 of the DGCL and Business Combination Provisions
of Certificate of Incorporation Not Applicable ........... 24
Section 3.27 Rights Agreement ......................................... 24
Section 3.28 Broker Fees .............................................. 25
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF Millennium AND SUB ..... 25
Section 4.01 Organization of Millennium and Sub ....................... 26
Section 4.02 Millennium Capital Structure ............................. 26
Section 4.03 Authority; No Conflict; Required Filings and Consents .... 26
Section 4.04 SEC Filings; Financial Statements ........................ 28
Section 4.05 No Undisclosed Liabilities ............................... 28
Section 4.06 Absence of Certain Changes or Events ..................... 29
Section 4.07 Litigation ............................................... 29
Section 4.08 Compliance With Laws ..................................... 29
Section 4.09 Tax Matters .............................................. 29
Section 4.10 Intellectual Property .................................... 29
Section 4.11 Agreements, Contracts and Commitments .................... 30
Section 4.12 Product Liability ........................................ 31
Section 4.13 Environmental Matters .................................... 31
Section 4.14 Employee Benefits Plans .................................. 31
Section 4.15 Preclinical Testing and Clinical Trials .................. 33
Section 4.16 Certain Regulatory Matters ............................... 33
Section 4.17 Registration Statement; Proxy Statement/Prospectus ....... 34
Section 4.18 Operations of Sub ........................................ 34
Section 4.19 Opinion of Financial Advisor ............................. 34
Section 4.20 Broker's Fees ............................................ 34
ARTICLE V CONDUCT OF BUSINESS ...................................... 35
Section 5.01 Covenants of COR ......................................... 35
Section 5.02 Covenants of Millennium .................................. 38
Section 5.03 Cooperation .............................................. 39
Section 5.04 Confidentiality .......................................... 39
ARTICLE VI ADDITIONAL AGREEMENTS .................................... 39
Section 6.01 No Solicitation .......................................... 39
Section 6.02 Proxy Statement/Prospectus; Registration Statement ....... 42
Section 6.03 Nasdaq Quotation ......................................... 42
Section 6.04 Access to Information .................................... 42
Section 6.05 Stockholders Meetings .................................... 43
Section 6.06 Legal Conditions to Merger ............................... 44
Section 6.07 Public Disclosure ........................................ 45
Section 6.08 Tax-Free Reorganization .................................. 45
Section 6.09 Affiliate Agreements ..................................... 45
Section 6.10 Nasdaq Listing ........................................... 46
Section 6.11 Stock Plans .............................................. 46
Section 6.12 Indemnification .......................................... 47
Section 6.13 Notification of Certain Matters .......................... 47
Section 6.14 Stockholder Litigation ................................... 48
Section 6.15 Employee Matters ......................................... 48
Section 6.16 401(k) Plan .............................................. 48
Section 6.17 Exemption from Liability Under Section 16(b) ............. 48
Section 6.18 Board Representation ..................................... 49
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Section 6.19 Indentures ............................................... 49
ARTICLE VII CONDITIONS TO MERGER ..................................... 49
Section 7.01 Conditions to Each Party's Obligation To Effect
the Merger ............................................... 49
Section 7.02 Additional Conditions to Obligations of Millennium
and Sub .................................................. 50
Section 7.03 Additional Conditions to Obligations of COR .............. 51
ARTICLE VIII TERMINATION AND AMENDMENT ................................ 52
Section 8.01 Termination .............................................. 52
Section 8.02 Effect of Termination .................................... 54
Section 8.03 Fees and Expenses ........................................ 55
Section 8.04 Amendment ................................................ 57
Section 8.05 Extension; Waiver ........................................ 57
ARTICLE IX MISCELLANEOUS ............................................ 58
Section 9.01 Nonsurvival of Representations, Warranties
and Agreements ........................................... 58
Section 9.02 Notices .................................................. 58
Section 9.03 Interpretation ........................................... 59
Section 9.04 Counterparts ............................................. 59
Section 9.05 Entire Agreement; No Third Party Beneficiaries ........... 59
Section 9.06 Governing Law; Submission to Jurisdiction ................ 59
Section 9.07 Other Remedies; Specific Performance ..................... 60
Section 9.08 Assignment ............................................... 60
Section 9.09 Severability ............................................. 60
Section 9.10 Waiver of Jury Trial ..................................... 60
Exhibit A Form of COR Voting Agreement
Exhibit B Form of Millennium Voting Agreement
Exhibit C Amendment to COR Rights Agreement
Exhibit D Form of Affiliate Agreement to be executed by COR Affiliates
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TABLE OF DEFINED TERMS
Cross Reference
Terms in Agreement
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Acquisition Proposal ....................................... Section 6.01(a)
Affiliate .................................................. Section 6.09
Affiliate Agreements ....................................... Section 6.09
Agreement .................................................. Preamble
Alternative Transaction .................................... Section 8.03(i)
Antitrust Laws ............................................. Section 6.06(b)
Bankruptcy and Equity Exception ............................ Section 3.03(a)
Certificate of Merger ...................................... Section 1.01
Certificates ............................................... Section 2.02(b)
Closing .................................................... Section 1.02
Closing Date ............................................... Section 1.02
Code ....................................................... Preamble
Confidentiality Agreement .................................. Section 5.04
Constituent Corporations ................................... Section 1.03
COR ........................................................ Preamble
COR 401(k) Plan ............................................ Section 6.16
COR Balance Sheet .......................................... Section 3.04(b)
COR Common Stock ........................................... Section 2.01(a)
COR Convertible Notes ...................................... Section 3.02(a)
COR Disclosure Schedule .................................... Article III
COR Employee Plans ......................................... Section 3.16(a)
COR Employees .............................................. Section 6.15
COR Insiders ............................................... Section 6.17(c)
COR Intellectual Property Rights ........................... Section 3.12(b)
COR Material Adverse Effect ................................ Article III
COR Material Contracts ..................................... Section 3.13(a)
COR Meeting ................................................ Section 3.21
COR Preferred Stock ........................................ Section 3.02(a)
COR Programs ............................................... Article III
COR Rights ................................................. Section 3.02(a)
COR Rights Plan ............................................ Section 3.02(a)
COR SEC Reports ............................................ Section 3.04(a)
COR Stock Options .......................................... Section 3.02(a)
COR Stock Plans ............................................ Section 3.02(a)
COR Voting Agreements ...................................... Preamble
COR Voting Proposal ........................................ Section 6.05(a)
DGCL ....................................................... Section 1.01
Effective Time ............................................. Section 1.01
Environmental Law .......................................... Section 3.15(b)
ERISA ...................................................... Section 3.16(a)
ERISA Affiliate ............................................ Section 3.16(e)
ESPP ....................................................... Section 6.11(d)
Exchange Act ............................................... Section 3.03(c)
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Exchange Agent ............................................. Section 2.02(a)
Exchange Fund .............................................. Section 2.02(a)
Exchange Ratio ............................................. Section 2.01(a)
FDA ........................................................ Section 3.18
GCP ........................................................ Section 3.19(b)
GLP ........................................................ Section 3.19(b)
GMP ........................................................ Section 3.19(b)
Goldman Sachs .............................................. Section 3.25
Governmental Entity ........................................ Section 3.03(c)
Hazardous Substance ........................................ Section 3.15(c)
HSR Act .................................................... Section 3.03(c)
Indemnified Parties ........................................ Section 6.12(a)
Intellectual Property Rights ............................... Section 3.12(b)
IRS ........................................................ Section 3.09(c)
Joint Proxy Statement ...................................... Section 3.21
Leases ..................................................... Section 3.10
Millennium ................................................. Preamble
Millennium 401(k) Plan ..................................... Section 6.16
Millennium Balance Sheet ................................... Section 4.04(b)
Millennium Common Stock .................................... Section 2.01(a)
Millennium Disclosure Schedule ............................. Article IV
Millennium Employee Plans .................................. Section 4.14(a)
Millennium Intellectual Property Rights .................... Section 4.10(a)
Millennium Knowledge Parties ............................... Article IV
Millennium Material Adverse Effect ......................... Article IV
Millennium Material Contract ............................... Section 4.11(a)
Millennium Meeting ......................................... Section 3.21
Millennium Preferred Stock ................................. Section 4.02
Millennium Rights .......................................... Section 4.02
Millennium Rights Agreement ................................ Section 4.02
Millennium SEC Reports ..................................... Section 4.04(a)
Millennium Stock Plans ..................................... Section 4.02
Millennium Voting Agreements ............................... Preamble
Millennium Voting Proposal ................................. Section 6.05(b)
Merger ..................................................... Preamble
Merger Shares .............................................. Section 2.01(a)
Morgan Stanley ............................................. Section 4.19
Order ...................................................... Section 7.01(e)
Outside Date ............................................... Section 8.01(b)
Parent ..................................................... Section 3.01
Phase II Products .......................................... Section 4.10(a)
Registration Statement ..................................... Section 3.21
Regulation M-A Filing ...................................... Section 3.21
Representatives ............................................ Section 6.01(a)
Rule 145 ................................................... Section 6.09
SEC ........................................................ Section 3.03(c)
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Section 16 Information ..................................... Section 6.17(b)
Securities Act ............................................. Section 3.03(c)
Sub ........................................................ Preamble
Subsidiary ................................................. Section 3.01
Superior Proposal .......................................... Section 6.01(a)
Surviving Corporation ...................................... Section 1.03
Tax ........................................................ Section 3.09(b)
Tax Returns ................................................ Section 3.09(b)
Taxes ...................................................... Section 3.09(b)
Third Party ................................................ Section 8.03(i)
Third Party Licenses ....................................... Section 3.12(a)
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AGREEMENT AND PLAN OF MERGER
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AGREEMENT AND PLAN OF MERGER (the "Agreement"), dated as of December 5,
2001, by and among Millennium Pharmaceuticals, Inc., a Delaware corporation
("Millennium"), PGM Corporation, a Delaware corporation and a direct,
wholly-owned, newly-formed subsidiary of Millennium ("Sub"), and COR
Therapeutics, Inc., a Delaware corporation ("COR").
WHEREAS, the Boards of Directors of Millennium and COR deem it advisable
and in the best interests of each corporation and its respective stockholders
that Millennium and COR combine in order to advance the long-term business
interests of Millennium and COR;
WHEREAS, the combination of Millennium and COR shall be effected by the
terms of this Agreement through a merger of Sub into COR, as a result of which
the stockholders of COR will become stockholders of Millennium and COR will
become a wholly-owned subsidiary of Millennium (the "Merger");
WHEREAS, concurrently with the execution of this Agreement, and as a
condition and inducement to the parties' willingness to enter into this
Agreement, Millennium and certain officers and directors of COR who are
stockholders of COR have executed Voting Agreements in favor of Millennium in
the form attached hereto as Exhibit A (the "COR Voting Agreements") and COR and
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certain officers and directors of Millennium who are stockholders of Millennium
have executed Voting Agreements in favor of COR in the form attached hereto as
Exhibit B (the "Millennium Voting Agreements"); and
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WHEREAS, for Federal income tax purposes, it is intended that the Merger
shall qualify as a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code") and this Agreement shall
constitute a plan of reorganization pursuant to Section 368(a) of the Code.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth below, the
parties agree as follows:
ARTICLE I
THE MERGER
Section 1.01 Effective Time of the Merger. Subject to the provisions of
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this Agreement, a certificate of merger in such form as is required by the
relevant provisions of the Delaware General Corporation Law ("DGCL") (the
"Certificate of Merger") shall be duly executed and acknowledged by the
Surviving Corporation (as defined in Section 1.03) and thereafter delivered to
the Secretary of State of the State of Delaware for filing, immediately after
the Closing (as defined in Section 1.02). The Merger shall become effective upon
the filing of the Certificate of Merger with the Secretary of State of the State
of Delaware or at such later time as is established by Millennium and COR and
set forth in the Certificate of Merger in accordance with the DGCL (the
"Effective Time").
Section 1.02 Closing. The closing of the Merger (the "Closing") will take
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place at 10:00 a.m., Boston time, on a date to be specified by Millennium and
COR (the "Closing Date"), which shall be no later than the fifth business day
after satisfaction or waiver of the conditions set forth in Article VII (other
than delivery of items to be delivered at the Closing and other than
satisfaction of those conditions that by their nature are to be satisfied at the
Closing, it being understood that the occurrence of the Closing shall remain
subject to the delivery of such items and the satisfaction or waiver of such
conditions at the Closing), at the offices of Hale and Dorr LLP, 60 State
Street, Boston, Massachusetts, unless another date, place or time is agreed to
in writing by Millennium and COR.
Section 1.03 Effects of the Merger. Subject to the terms and conditions of
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this Agreement, and pursuant to the provisions of the DGCL, at the Effective
Time (i) the separate existence of Sub shall cease and Sub shall be merged with
and into COR (Sub and COR are sometimes referred to herein as the "Constituent
Corporations" and COR following the Merger is sometimes referred to herein as
the "Surviving Corporation"), (ii) the Certificate of Incorporation of COR as in
effect on the date of this Agreement shall be amended so that Article FOURTH of
such Certificate of Incorporation reads in its entirety as follows: "The total
number of shares of all classes of stock which the Corporation shall have
authority to issue is 1,000, all of which shall consist of common stock, $.01
par value per share," and, as so amended, such Certificate of Incorporation
shall be the Certificate of Incorporation of the Surviving Corporation, until
further amended in accordance with the DGCL and (iii) the By-laws of Sub as in
effect immediately prior to the Effective Time shall be amended to change all
references to the name of Sub to refer to the name of COR, and, as so amended,
such By-laws shall be the By-laws of the Surviving Corporation, until further
amended in accordance with the DGCL. The Merger shall have the effects set forth
in Section 259 of the DGCL.
Section 1.04 Directors. The directors of Sub immediately prior to the
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Effective Time shall be the initial directors of the Surviving Corporation, each
to hold office in accordance with the Certificate of Incorporation and By-Laws
of the Surviving Corporation.
Section 1.05 Alternative Structure of Merger. At the election of
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Millennium prior to December 21, 2001 and after concluding reasonably and in
good faith that it would be obligated to take the actions described in Schedule
1.05 if the Merger was not restructured in the manner described in this Section
1.05, and with the prior written consent of COR which shall not be unreasonably
withheld, the Merger may be structured so that COR shall be merged with and into
Millennium with the result that Millennium shall be the "Surviving Corporation."
If the Merger is so structured, (i) the inaccuracy of any representation or
warranty of COR or Millennium, which representation or warranty is or becomes
inaccurate directly or indirectly as the result of Millennium, rather than COR,
being the Surviving Corporation, shall not be deemed to be a breach of such
representation or warranty, (ii) the failure by COR or Millennium to perform or
comply with a covenant or agreement: (A) that arose as a result of Millennium,
rather than COR, being the Surviving Corporation (including any covenant
contained in this Section 1.05), or (B) to the extent that the failure occurred
directly or indirectly as a result of Millennium, rather than COR, being the
Surviving Corporation, shall not be deemed to be a breach of or failure to
comply with such covenant or agreement, (iii) any condition to the obligation of
COR or Millennium to effect the Merger which is not satisfied, or any
termination right that becomes available, directly or indirectly as a direct or
indirect result of Millennium, rather than COR,
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being the Surviving Corporation, shall be deemed satisfied or unavailable, as
the case may be, and (iv) the other provisions of this Agreement relating to the
Merger (including without limitation Section 1.03 and 1.04) shall be deemed to
be appropriately modified to reflect such alternative structure. Without
limiting the foregoing, COR acknowledges and agrees that (A) in the event that
the Merger is structured as set forth in this Section 1.05, the Millennium
Voting Proposal shall be defined to also include the adoption of this Agreement
and the approval of the Merger, and that the vote required thereby shall be the
affirmative vote of the holders of a majority of the shares of Millennium Common
Stock outstanding on the record date for the Millennium Meeting at which a
quorum is present, and (B) it shall not have the right to withhold its consent
to the structuring of the Merger as set forth in this Section 1.05 in whole or
in part because of such change in the Millennium Voting Proposal. If the Merger
is structured as set forth in this Section 1.05, Millennium and COR agree to (I)
use all commercially reasonable efforts to obtain all consents necessary, and
otherwise cause the satisfaction of all conditions to the obligations of COR and
Millennium to effect the Merger without giving effect to the provisions of
clause (iii) of the second sentence of this Section, and (II) enter into
agreements and other instruments reasonably requested by Millennium or COR,
including if necessary an amendment to this Agreement, to effect such structure.
If COR provides Millennium with a written legal opinion of Cooley Godward LLP or
another law firm reasonably acceptable to Millennium, in a form reasonably
acceptable to Millennium, indicating in substance that Millennium would not be
obligated to take the actions described in Schedule 1.05 if the Merger remained
structured in the manner described in Section 1.03, the ability to restructure
the Merger in the manner described in this Section 1.05 shall terminate.
ARTICLE II
CONVERSION OF SECURITIES
Section 2.01 Conversion of Capital Stock.
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(a) Capital Stock of Sub; Cancellation of Treasury Stock and Millennium
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Owned Stock; Exchange Ratio. As of the Effective Time, by virtue of the Merger
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and without any action on the part of COR or Sub or the holder of any shares of
capital stock of COR or capital stock of Sub:
(i) Each issued and outstanding share of the capital stock of Sub
shall cease to be outstanding, shall cease to exist and shall be converted
into and become one fully paid and nonassessable shares of common stock of
the Surviving Corporation.
(ii) All shares of common stock, $.0001 par value per share, of COR
("COR Common Stock") that are owned by COR as treasury stock or by any
wholly-owned Subsidiary (as defined in Section 3.01) of COR and any shares
of COR Common Stock owned by Millennium, Sub or any other wholly-owned
Subsidiary of Millennium shall be cancelled and retired and shall cease to
exist and no stock of Millennium or other consideration shall be delivered
in exchange therefor. Any shares of common stock, $.001 par value per
share, of Millennium ("Millennium Common Stock") owned by COR shall be
unaffected by the Merger.
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(iii) Subject to Section 2.02, each issued and outstanding share of
COR Common Stock (other than shares to be cancelled in accordance with
Section 2.01(a)(ii)), shall be converted into the right to receive 0.9873
shares (the "Exchange Ratio") of Millennium Common Stock (collectively, the
"Merger Shares"). All such shares of COR Common Stock, when so converted,
shall no longer be outstanding and shall automatically be cancelled and
retired and shall cease to exist, and each holder of a certificate
representing any such shares shall cease to have any rights with respect
thereto, except the right to receive shares of Millennium Common Stock and
any cash in lieu of fractional shares of Millennium Common Stock to be
issued or paid in consideration therefor upon the surrender of such
certificate in accordance with Section 2.02, without interest.
(iv) Notwithstanding anything to the contrary contained in this
Agreement, if and only if the "Actual Signing Date Number of Shares" (as
defined below) exceeds the "Maximum Signing Date Number of Shares" (as
defined below), then the Exchange Ratio shall be equal to the product of:
(1) the number that would have otherwise constituted the Exchange Ratio but
for this Section 2.01(a)(iv); multiplied by (2) a fraction, the numerator
of which shall be the Maximum Signing Date Number of Shares, and the
denominator of which shall be the Actual Signing Date Number of Shares. In
no event shall such fraction be greater than one. Notwithstanding the
foregoing, in the event that the Actual Signing Date Number of Shares
exceeds the Maximum Signing Date Number of Shares by less than 37,500
shares, the provisions of this Section 2.01(a)(iv) shall not apply to
adjust the Exchange Ratio. For purposes of this Section 2.01(a)(iv):
(A) the "Actual Signing Date Number of Shares" shall be equal to the
sum of:
(1) the number of shares of COR Common Stock outstanding as of
the date of this Agreement (even if such number is different
from the number represented by COR in Section 3.02); and
(2) the number of shares of COR Common Stock issuable upon the
exercise of any COR Stock Options or COR Convertible Notes
(even if such number is different from the number
represented by COR in Section 3.02), in each case
outstanding as of the date of this Agreement; and
(B) the "Maximum Signing Date Number of Shares" shall be equal to
78,232,268 shares.
(b) Adjustments to Exchange Ratio. The Exchange Ratio shall be
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appropriately and proportionately adjusted to reflect fully the effect of any
stock split, reverse stock split, stock dividend (including any dividend or
distribution of securities convertible into Millennium Common Stock or COR
Common Stock), reorganization, reclassification, recapitalization or other like
change with respect to Millennium Common Stock or COR
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Common Stock occurring (or for which a record date is established) after the
date hereof and on or prior to the Effective Time.
(c) Unvested Stock. At the Effective Time, any unvested shares of COR
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Common Stock awarded to employees, directors or consultants pursuant to any of
COR's plans or arrangements and outstanding immediately prior to the Effective
Time shall be converted into unvested shares of Millennium Common Stock in
accordance with the Exchange Ratio and shall remain subject to the same terms,
restrictions and vesting schedule as in effect immediately prior to the
Effective Time, except to the extent by their terms as in effect on the date of
this Agreement such unvested shares of COR Common Stock vest at the Effective
Time. All outstanding rights which COR may hold immediately prior to the
Effective Time to repurchase unvested shares of COR Common Stock shall be
assigned to Millennium in the Merger and shall thereafter be exercisable by
Millennium upon the same terms and conditions in effect immediately prior to the
Effective Time, except that the shares purchasable pursuant to such rights and
the purchase price payable per share shall be appropriately adjusted to reflect
the Exchange Ratio. COR shall take all steps necessary to cause the foregoing
provisions of this Section 2.01(c) to occur.
Section 2.02 Exchange of Certificates. The procedures for exchanging
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outstanding shares of COR Common Stock for Millennium Common Stock pursuant to
the Merger are as follows:
(a) Exchange Agent. At the Effective Time, Millennium shall deposit with a
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bank or trust company designated by Millennium (the "Exchange Agent"), for the
benefit of the holders of shares of COR Common Stock, for exchange in accordance
with this Section 2.02, through the Exchange Agent, certificates representing
the shares of Millennium Common Stock issuable pursuant to Section 2.01 in
exchange for outstanding shares of COR Common Stock and cash in an amount
sufficient to make payments required pursuant to Section 2.02(e) (such shares of
Millennium Common Stock and such cash being hereinafter referred to as the
"Exchange Fund").
(b) Exchange Procedures. As promptly as practicable after the Effective
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Time, the Exchange Agent shall mail to each holder of record of a certificate or
certificates which immediately prior to the Effective Time represented
outstanding shares of COR Common Stock (the "Certificates") whose shares were
converted pursuant to Section 2.01 into the right to receive shares of
Millennium Common Stock (i) a letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates shall
pass, only upon delivery of the Certificates to the Exchange Agent and shall be
in such form and have such other provisions as Millennium may reasonably
specify) and (ii) instructions for effecting the surrender of the Certificates
in exchange for certificates representing shares of Millennium Common Stock
(plus cash in lieu of fractional shares, if any, of Millennium Common Stock and
any dividends or distributions as provided below). Upon surrender of a
Certificate for cancellation to the Exchange Agent or to such other agent or
agents as may be appointed by Millennium, together with such letter of
transmittal, duly executed, and such other documents as may reasonably be
required by the Exchange Agent, the holder of such Certificate shall be entitled
to receive in exchange therefor a certificate representing that number of whole
shares of Millennium Common Stock which such holder has the right to receive
pursuant to the provisions
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of this Article II plus cash in lieu of fractional shares pursuant to Section
2.02(e) and any dividends or distributions pursuant to Section 2.02(c), and the
Certificate so surrendered shall immediately be cancelled. In the event of a
transfer of ownership of COR Common Stock which is not registered in the
transfer records of COR, a certificate representing the proper number of shares
of Millennium Common Stock plus cash in lieu of fractional shares pursuant to
Section 2.02(e) and any dividends or distributions pursuant to Section 2.02(c)
may be issued or paid to a person other than the person in whose name the
Certificate so surrendered is registered, if the Certificate representing such
COR Common Stock is presented to the Exchange Agent, accompanied by all
documents required to evidence and effect such transfer and by evidence that any
applicable stock transfer taxes have been paid. Until surrendered as
contemplated by this Section 2.02, each Certificate shall be deemed at any time
after the Effective Time to represent only the right to receive upon such
surrender the certificate representing shares of Millennium Common Stock plus
cash in lieu of fractional shares pursuant to Section 2.02(e) and any dividends
or distributions pursuant to Section 2.02(c) as contemplated by this Section
2.02.
(c) Distributions with Respect to Unexchanged Shares. No dividends or
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other distributions declared or made after the Effective Time with respect to
Millennium Common Stock with a record date after the Effective Time shall be
paid to the holder of any unsurrendered Certificate with respect to the shares
of Millennium Common Stock represented thereby and no cash payment in lieu of
fractional shares shall be paid to any such holder pursuant to Section 2.02(e)
below until the holder of record of such Certificate shall surrender such
Certificate. Subject to the effect of applicable laws, following surrender of
any such Certificate, there shall be issued and paid to the record holder of the
Certificate (i) certificates representing whole shares of Millennium Common
Stock issued in exchange therefor, (ii) at the time of such surrender, the
amount of any cash payable in lieu of a fractional share of Millennium Common
Stock to which such holder is entitled pursuant to Section 2.02(e) below and the
amount of dividends or other distributions with a record date after the
Effective Time with respect to such whole shares of Millennium Common Stock with
a payment date on or prior to such time of surrender, without interest, and
(iii) at the appropriate payment date, the amount of dividends or other
distributions with a record date after the Effective Time but prior to surrender
and a payment date subsequent to surrender payable with respect to such whole
shares of Millennium Common Stock.
(d) No Further Ownership Rights in COR Common Stock. All shares of
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Millennium Common Stock issued upon the surrender for exchange of Certificates
in accordance with the terms hereof (including any cash or dividends or other
distributions paid pursuant to Sections 2.02(c) or 2.02(e)) shall be deemed to
have been issued in full satisfaction of all rights pertaining to such shares of
COR Common Stock, and from and after the Effective Time there shall be no
further registration of transfers on the stock transfer books of the Surviving
Corporation of the shares of COR Common Stock which were outstanding immediately
prior to the Effective Time. If, after the Effective Time, Certificates are
presented to the Surviving Corporation or the Exchange Agent for any reason,
they shall be cancelled and exchanged as provided in this Article II.
(e) No Fractional Shares. No certificate or scrip representing fractional
--------------------
shares of Millennium Common Stock shall be issued upon the surrender for
exchange of Certificates, and such fractional share interests will not entitle
the owner thereof to vote or to any other rights of a stockholder of Millennium.
Notwithstanding any other provision of this Agreement, each
- 6 -
holder of shares of COR Common Stock exchanged pursuant to the Merger who would
otherwise have been entitled to receive a fraction of a share of Millennium
Common Stock (after taking into account and aggregating all Certificates
delivered by such holder) shall receive, in lieu thereof, cash (without
interest) in an amount equal to such fractional part of a share of Millennium
Common Stock multiplied by the average of the last reported sale prices of
Millennium Common Stock, as reported on the Nasdaq National Market, during the
ten consecutive trading days ending on the last trading day prior to the Closing
Date.
(f) Termination of Exchange Fund. Any portion of the Exchange Fund which
----------------------------
remains undistributed to the stockholders of COR for 270 days after the
Effective Time shall be delivered to Millennium, upon demand, and any
stockholders of COR who have not previously complied with this Section 2.02
shall thereafter look only to Millennium for payment of their claim for
Millennium Common Stock, any cash in lieu of fractional shares of Millennium
Common Stock and any dividends or distributions with respect to Millennium
Common Stock.
(g) No Liability. To the extent permitted by applicable law, none of
------------
Millennium, Sub, COR, the Surviving Corporation, the Exchange Agent, or any of
their respective officers, directors, employees, agents or counsel, shall be
liable to any holder of shares of COR Common Stock or Millennium Common Stock,
as the case may be, for such shares (or cash, dividends or distributions with
respect thereto) properly delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law. If any Certificate shall
not have been surrendered prior to two years after the Effective Time (or
immediately prior to such earlier date on which any shares of Millennium Common
Stock, and any cash payable to the holder of such Certificate pursuant to this
Article II or any dividends or distributions payable to the holder of such
Certificate would otherwise escheat to or become the property of any
governmental body or authority), any such shares of Millennium Common Stock or
cash, dividends or distributions in respect of such Certificate shall, to the
extent permitted by applicable law, become the property of the Surviving
Corporation, free and clear of all claims or interest of any person previously
entitled thereto.
(h) Withholding Rights. Each of Millennium and the Surviving Corporation
------------------
shall be entitled to deduct and withhold from the consideration otherwise
payable pursuant to this Agreement to any holder of shares of COR Common Stock
such amounts as it is required to deduct and withhold with respect to the making
of such payment under the Code, or any provision of state, local or foreign tax
law. To the extent that amounts are so withheld by the Surviving Corporation or
Millennium, as the case may be, such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the holder of the shares of
COR Common Stock in respect of which such deduction and withholding was made by
the Surviving Corporation or Millennium, as the case may be.
(i) Lost Certificates. If any Certificate shall have been lost, stolen or
-----------------
destroyed, upon the making of an affidavit of that fact by the person claiming
such Certificate to be lost, stolen or destroyed and, if required by the
Surviving Corporation, the posting by such person of a bond in such reasonable
amount (but not more than the market value) as the Surviving Corporation may
direct as indemnity against any claim that may be made against it with respect
to such Certificate, the Exchange Agent will issue in exchange for such lost,
stolen or destroyed Certificate the shares of Millennium Common Stock and any
cash in lieu of
- 7 -
fractional shares, and unpaid dividends and distributions on shares of
Millennium Common Stock deliverable in respect thereof pursuant to this
Agreement.
(j) Affiliates. Notwithstanding anything herein to the contrary,
----------
Certificates surrendered for exchange by any Affiliate (as defined in Section
6.09 below) of COR shall not be exchanged until Millennium has received an
Affiliate Agreement (as defined in Section 6.09 below) from such Affiliate.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF CRIMSON
Except as set forth in the disclosure schedule delivered by COR to
Millennium on or before the date of this Agreement (the "COR Disclosure
Schedule") (which COR Disclosure Schedule shall be arranged in sections
corresponding to the numbered and lettered sections contained in this Article
III and the disclosure in any section shall qualify (1) the corresponding
section of this Article III and (2) other sections in this Article III to the
extent that it is reasonably apparent that it also qualifies or applies to such
other sections), COR represents and warrants to Millennium and Sub as follows in
this Article III. As used in this Agreement, any reference to "COR's knowledge",
"the knowledge of COR", "the best knowledge of COR", "of which COR is aware", or
any similar expression shall mean the actual knowledge of Vaughn M. Kailian,
President and Chief Executive Officer, Peter S. Roddy, Senior Vice President and
Chief Financial Officer, Charles J. Homey, Executive Vice President, Research
and Development, Lee M. Rauch, Senior Vice President, Corporate Development, and
Patrick A. Broderick, Senior Vice President and General Counsel.
For purposes of this Agreement, the term "COR Material Adverse Effect"
means any material adverse change, event, circumstance, development or effect on
(a) the assets, business, financial condition, results of operations or
prospects of COR and its Subsidiaries (as defined in Section 3.01 below) taken
as a whole; or (b) the ability of COR to consummate the transactions
contemplated by this Agreement; provided, however, that the following events
shall not be deemed to be, and shall not be taken into account in determining
whether there has been or whether there is likely or expected to be, a "COR
Material Adverse Effect" on or with respect to COR and its Subsidiaries taken as
a whole: (i) any adverse change in the stock price of COR in and of itself, as
quoted on the Nasdaq National Market; (ii) any adverse change, event,
circumstance, development or effect resulting from a change in general economic,
industry or financial market conditions not substantially disproportionately
affecting COR and its Subsidiaries taken as a whole; (iii) any change, event,
circumstance, development or effect resulting from a breach of this Agreement by
Millennium or Sub; (iv) any adverse change, event, circumstance, development or
effect resulting from any acts of terrorism or war, including the events of
September 11, 2001, fighting in Afghanistan, letters containing anthrax and
similar circumstances; (v) any adverse change, event, circumstance, development
or effect directly resulting from the announcement or pendency of the Merger;
and (vi) any adverse change, event, circumstance, development or effect
resulting from or relating to compliance with the terms of, or the taking of any
action expressly required by, this Agreement. For the avoidance of doubt, the
Parties agree that the terms "material", "materially" or "materiality" as used
in this Agreement with an initial lower case "m" shall have their respective
customary meanings,
- 8 -
without regard to the meaning ascribed to COR Material Adverse Effect in the
prior sentences of this paragraph or the meaning ascribed to Millennium Material
Adverse Effect in Article IV below.
Section 3.01 Organization of COR. COR and each of its Subsidiaries (as
-------------------
defined below) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, has all
requisite corporate power to own, lease and operate its properties and assets
and to carry on its business as now being conducted, and is duly qualified to do
business and is in good standing as a foreign corporation in each jurisdiction
in which the failure to be so qualified, individually or in the aggregate, would
be reasonably likely to be material to COR and its Subsidiaries taken as a
whole. Except as set forth in the COR SEC Reports (as defined in Section
3.04(a)) filed prior to the date hereof, neither COR nor any of its Subsidiaries
directly or indirectly owns any equity or similar interest in, or any interest
convertible into or exchangeable or exercisable for, any corporation,
partnership, joint venture or other business association or entity. As used in
this Agreement, the word "Subsidiary" means, with respect to a person or entity
(the "Parent"), any corporation or other organization, whether incorporated or
unincorporated, of which (i) such Parent or any other Subsidiary of such Parent
is a general partner or a managing member or (ii) at least a majority of the
securities or other interests having by their terms ordinary voting power to
elect a majority of the Board of Directors or others performing similar
functions with respect to such corporation or other organization is directly or
indirectly owned or controlled by such Parent or by any one or more of its
Subsidiaries, or by such Parent and one or more of its Subsidiaries. COR has
made available to Millennium true and complete copies of the Certificate of
Incorporation and By-Laws of COR and of the charter, by-laws or other
organizational documents of each Subsidiary of COR.
Section 3.02 COR Capital Structure.
---------------------
(a) The authorized capital stock of COR consists of 120,000,000 shares of
COR Common Stock and 5,000,000 shares of preferred stock, par value $.001 ("COR
Preferred Stock"). The rights and privileges of each class of COR's capital
stock are as set forth in COR's Certificate of Incorporation. As of December 3,
2001, (i) 55,706,426 shares of COR Common Stock are issued and outstanding, all
of which are duly authorized, validly issued, fully paid and nonassessable, (ii)
no shares of COR Common Stock were held in the treasury of COR or by
Subsidiaries of COR, and (iii) no shares of COR Preferred Stock were issued and
outstanding. All of the issued and outstanding COR Common Stock was issued in
compliance with applicable federal and state securities laws. Between December
3, 2001 and the date hereof, (i) no shares of COR Common Stock or COR Preferred
Stock were issued other than pursuant to the exercise of COR Stock Options (as
defined below) or the conversion of COR Convertible Notes (as defined below),
and (ii) no COR Stock Options have been issued or awarded. The COR Disclosure
Schedule sets forth the following information:
(1) all issued and outstanding shares of COR Common Stock that
constitute restricted stock or that are otherwise subject to a repurchase or
redemption right or right of first refusal in favor of COR; the name of the
applicable stockholder, the lapsing schedule for any such shares, including the
extent to which any such repurchase or redemption right or right of first
refusal has lapsed as of the date of this Agreement, whether (and to what
- 9 -
extent) the lapsing will be accelerated in any way by the transactions
contemplated by this Agreement or by termination of employment or change in
position following consummation of the Merger, and whether such holder has the
sole power to vote and dispose of such shares;
(2) as of December 3, 2001, the number of shares of COR Common Stock
reserved for future issuance pursuant to stock options granted and outstanding
as of the date of this Agreement (other than options granted under the ESPP (as
defined in Section 6.11(d) below)), and the plans and arrangements (whether
written or unwritten) under which such options were granted (collectively,
including the ESPP, the "COR Stock Plans"), a complete and accurate list of all
holders of options outstanding as of December 3, 2001 to purchase shares of COR
Common Stock (such outstanding options, the "COR Stock Options") under the COR
Stock Plans (other than the ESPP), indicating with respect to each such COR
Stock Option the employment status (e.g., employee or consultant) of the holder
thereof, the number of shares of COR Common Stock subject to each such COR Stock
Option, the exercise price, the date of grant, the expiration date and the
vesting schedule for any such options, including the extent to which any such
vesting has occurred as of the date of this Agreement, and whether (and to what
extent) the vesting will be accelerated in any way by the transactions
contemplated by this Agreement or by termination of employment or change in
position following consummation of the Merger;
(3) the number of shares of COR Common Stock reserved for future
issuance pursuant to notes convertible into COR Common Stock outstanding as of
the date of this Agreement (such notes, the "COR Convertible Notes") and the
identity of the indentures relating to such COR Convertible Notes; and
(4) the number of shares of COR Preferred Stock reserved for future
issuance pursuant to the rights (the "COR Rights") issued and issuable under the
Rights Agreement dated as of January 23, 1995 between COR and Chemical Trust
Company of California as rights agent (the "COR Rights Plan") and the agreements
or other documents under which the COR Rights were issued.
COR has made available to Millennium true and complete copies of all COR Stock
Plans and the forms of all stock option agreements evidencing COR Stock Options
granted under the COR Stock Plans or otherwise, the indentures and registration
rights agreements pursuant to which any COR Convertible Notes were issued, all
agreements under which any COR Rights were issued or are issuable and all
agreements governing unvested shares of COR Common Stock and the vesting
thereof. All shares of COR Common Stock or COR Preferred Stock issuable pursuant
to the COR Stock Options, the COR Convertible Notes or the COR Rights, upon
issuance on the terms and conditions specified in the instruments pursuant to
which they are issuable, will be duly authorized, validly issued, fully paid and
non-assessable. All outstanding shares of COR Common Stock and all COR Stock
Options, COR Convertible Notes and COR Rights were not, and all shares of COR
Common Stock or COR Preferred Stock issuable pursuant to the COR Stock Options,
the COR Convertible Notes or the COR Rights upon issuance on the terms and
conditions specified in the instruments pursuant to which they are issuable,
will not be, issued in violation of any purchase option, call option, right of
first refusal, preemptive right, subscription right or any similar right under
any provision of the DGCL, COR's Certificate of Incorporation or By-Laws or any
agreement to which COR is a party or is otherwise bound. There are no
- 10 -
obligations, contingent or otherwise, of COR or any of its Subsidiaries to
repurchase, redeem or otherwise acquire any shares of COR Common Stock or any
other capital stock of COR or any Subsidiary or to provide funds to or make any
investment (in the form of a loan, capital contribution or otherwise) in any
such Subsidiary or any other entity. All of the outstanding shares of capital
stock or other equity interests of each of COR's Subsidiaries are duly
authorized, validly issued, fully paid and non-assessable and all such shares
and other equity interests in any Subsidiary are owned by COR or another
wholly-owned Subsidiary of COR free and clear of all security interests, liens,
claims, pledges, agreements, limitations in COR's voting rights, charges or
other encumbrances of any nature.
(b) Except for the COR Common Stock outstanding as of the date of this
Agreement, the COR Stock Plans, the COR Convertible Notes, the COR Rights and
shares of capital stock and other securities of COR issued or issuable pursuant
to the foregoing, (i) there are no equity securities of any class of COR or any
of its Subsidiaries, or any security convertible or exchangeable into or
exercisable for such equity securities, issued, reserved for issuance or
outstanding, and (ii) there are no options, warrants, equity securities, calls,
rights, commitments or agreements of any character to which COR or any of its
Subsidiaries is a party or by which it or any of its Subsidiaries is bound
obligating COR or any of its Subsidiaries to issue, exchange, transfer, deliver
or sell, or cause to be issued, exchanged, transferred, delivered or sold,
additional shares of capital stock of or other equity interests in COR or any of
its Subsidiaries or obligating COR or any of its Subsidiaries to grant, extend,
accelerate the vesting of, otherwise modify or amend or enter into any such
option, warrant, equity security, call, right, commitment or agreement. Neither
COR nor any of its Subsidiaries has outstanding any stock appreciation rights,
phantom stock, performance based rights or similar rights or obligations. To the
best knowledge of COR, as of the date of this Agreement there are no voting
trusts, proxies or other voting agreements or understandings with respect to the
shares of capital stock of or other equity interests in COR or any of its
Subsidiaries other than the COR Voting Agreements. Upon the consummation of the
Merger, subject to compliance by Millennium with Sections 6.11 and 6.19 of this
Agreement, all options, warrants, equity securities, calls, rights, commitments
or agreements of any character to which COR or any of its Subsidiaries is a
party or by which it or any of its Subsidiaries is bound relating to the
issuance of COR securities or securities of any COR Subsidiary shall become
rights to obtain solely shares of Millennium Common Stock.
(c) There are no registration rights, and, other than the COR Rights
Plan, there is no rights agreement, "poison pill" anti-takeover plan or other
agreement or understanding to which COR or any of its Subsidiaries is a party or
by which it or they are bound with respect to any equity security of any class
of COR or any of its Subsidiaries or with respect to any equity security,
partnership interest or similar ownership interest of any class of any of its
Subsidiaries.
(d) Assuming that the Millennium Common Stock is listed on the Nasdaq
National Market and that there is no change to Section 262 of the DGCL after the
date hereof, COR stockholders are not entitled to dissenters' or appraisal
rights under applicable state law in connection with the Merger.
Section 3.03 Authority; No Conflict; Required Filings and Consents.
-----------------------------------------------------
- 11 -
(a) COR has all requisite corporate power and authority to enter into
this Agreement and to consummate the transactions contemplated by this
Agreement. The execution and delivery of this Agreement and the COR Voting
Agreements and the consummation of the transactions contemplated by this
Agreement by COR have been duly authorized by all necessary corporate action on
the part of COR and its Subsidiaries, subject only to the adoption of this
Agreement and the approval of the Merger by COR's stockholders under the DGCL.
Without limiting the generality of the preceding sentence, the board of
directors of COR (at a meeting duly called and held) has (i) unanimously
determined that the Merger is advisable and in the best interests of COR and its
stockholders, (ii) unanimously authorized and approved the execution, delivery
and performance of this Agreement by COR and unanimously approved the Merger,
(iii) unanimously recommended the adoption of this Agreement and the approval of
the Merger by COR's stockholders and directed that this Agreement be submitted
for consideration by COR's stockholders at a meeting of COR's stockholders, and
(iv) to the extent necessary, adopted a resolution having the effect of causing
the Merger and the other transactions contemplated by this Agreement or the COR
Voting Agreements not to be subject to the restrictions set forth in any state
takeover law (including Section 203 of the DGCL) or similar law that might
otherwise apply. This Agreement has been duly executed and delivered by COR and
constitutes the valid and binding obligation of COR, enforceable in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles (the "Bankruptcy
and Equity Exception").
(b) The execution and delivery of this Agreement by COR does not, and
the consummation of the transactions contemplated by this Agreement will not,
(i) conflict with, or result in any violation or breach of, any provision of the
Certificate of Incorporation or By-Laws of COR, or the charter, by-laws, or
other organizational document of any Subsidiary of COR, (ii) result in any
violation or breach of, or constitute (with or without notice or lapse of time,
or both) a default (or give rise to a right of termination, cancellation or
acceleration of any obligation or loss of any material benefit) under, or
require a consent or waiver under, or constitute a change in control under, or
require the payment of a penalty under or result in the imposition of any lien
on COR's or any of its Subsidiaries' assets under, any of the terms, conditions
or provisions of any material note, bond, mortgage, indenture, lease, license,
contract or other agreement, instrument or obligation to which COR or any of its
Subsidiaries is a party or by which any of them or any of their properties or
assets may be bound, or (iii) conflict with or violate any permit, concession,
franchise, license, judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to COR or any of its Subsidiaries or any of its or their
properties or assets, except in the case of clauses (ii) or (iii) for any
conflicts or violations which, individually or in the aggregate, are not
reasonably likely to have a COR Material Adverse Effect.
(c) No consent, approval, license, permit, waiver, order or
authorization of, or registration, declaration or filing with, any court,
administrative agency or commission or other governmental authority or
instrumentality, foreign or domestic ("Governmental Entity") is required by or
with respect to COR or any of its Subsidiaries in connection with the execution
and delivery of this Agreement or the consummation of the transactions
contemplated hereby, except for (i) the filing of a pre-merger notification
report under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, ("HSR Act") and the termination or expiration of the
- 12 -
waiting period applicable thereto, (ii) the filing of the Certificate of Merger
with the Delaware Secretary of State, (iii) the filing of the Joint Proxy
Statement (as defined in Section 3.21 below) with the Securities and Exchange
Commission (the "SEC") in accordance with the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), (iv) the filing of such reports or schedules
under Section 13 of the Exchange Act and materials under Rule 165 and Rule 425
of the Securities Act of 1933, as amended (the "Securities Act") as may be
required in connection with this Agreement and the transactions contemplated
hereby, (v) such consents, approvals, orders, authorizations, registrations,
declarations and filings as may be required under applicable state securities
laws and (vi) such other consents, licenses, permits, orders, authorizations,
filings, approvals and registrations which, if not obtained or made, would not
be reasonably likely, individually or in the aggregate, to have a COR Material
Adverse Effect. The only COR stockholder vote required for the approval of the
COR Voting Proposal (as defined in Section 6.05(a) below) is the affirmative
vote of a majority of the outstanding shares of COR Common Stock on the record
date for the COR Meeting (as defined in Section 3.21 below).
Section 3.04 SEC Filings; Financial Statements.
---------------------------------
(a) Each registration statement, proxy statement, schedule or report
required to be filed by COR or any of its Subsidiaries with the SEC since
January 1, 1998 under the Securities Act or the Exchange Act (collectively, the
"COR SEC Reports"), on the date filed (i) complied in all material respects with
the requirements of the Securities Act and the Exchange Act, as the case may be,
and (ii) did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. COR has made available to Millennium true and complete copies of
all COR SEC Reports and all exhibits thereto or true and complete copies of such
COR SEC Reports and exhibits are available on EDGAR. None of COR's Subsidiaries
is required to file any forms, reports or other documents with the SEC. Each of
the COR SEC Reports was filed on a timely basis.
(b) Except to the extent expressly stated therein, each of the
consolidated financial statements (including, in each case, any related notes
and schedules) contained in the COR SEC Reports (i) complied as to form in all
material respects with the applicable published rules and regulations of the SEC
with respect thereto, (ii) were prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes to such financial statements
or, in the case of unaudited statements, as permitted by Form 10-Q of the SEC)
and (iii) fairly presented the consolidated financial position of COR and its
Subsidiaries as of the dates and the consolidated results of operations and cash
flows of COR and its Subsidiaries for the periods indicated, consistent with the
books and records of COR and its Subsidiaries, except that the unaudited interim
financial statements were subject to normal and recurring year-end adjustments
which were not expected to be material in amount. The unaudited consolidated
balance sheet of COR as of September 30, 2001 contained in the COR Form 10-Q for
the quarter ended September 30, 2001 is referred to herein as the "COR Balance
Sheet."
Section 3.05 No Undisclosed Liabilities. Except (i) as disclosed in the COR
--------------------------
SEC Reports filed prior to the date hereof, (ii) for liabilities to perform its
contractual obligations (which does not include liabilities for breach of such
obligations), and (iii) for liabilities and
- 13 -
obligations incurred since the date of the COR Balance Sheet in the ordinary
course of business and consistent with past practice, COR and its Subsidiaries
do not have any liabilities, either accrued, contingent or otherwise (whether or
not required to be reflected in financial statements in accordance with
generally accepted accounting principles), and whether due or to become due,
which individually or in the aggregate are reasonably likely to have a COR
Material Adverse Effect.
Section 3.06 Absence of Certain Changes or Events. Except as disclosed in the
------------------------------------
COR SEC Reports filed prior to the date hereof, since the date of the COR
Balance Sheet, COR and its Subsidiaries have conducted their respective
businesses only in the ordinary course and in a manner consistent with past
practice and, since that date, there has not been (i) any event, change,
circumstance or development in the financial condition, results of operations,
business, properties or prospects of COR and its Subsidiaries, taken as a whole
that individually or in the aggregate has had, or is reasonably likely to have,
a COR Material Adverse Effect; (ii) any material damage, destruction or loss
(whether or not covered by insurance) with respect to COR or any of its
Subsidiaries; (iii) any material change by COR or any of its Subsidiaries in its
accounting methods not required pursuant to generally accepted accounting
principles; (iv) any material revaluation by COR or any of its Subsidiaries of
any of their assets; or (v) any other action or event that would have required
the consent of Millennium pursuant to Section 5.01 of this Agreement had such
action or event occurred after the date of this Agreement.
Section 3.07 [Intentionally Omitted]
Section 3.08 [Intentionally Omitted]
Section 3.09 Taxes.
-----
(a) Except for such items which are not, individually or in the
aggregate, reasonably likely to have a COR Material Adverse Effect: (i) COR and
each of its Subsidiaries has timely filed all Tax Returns (as defined below)
that it was required to file (taking into account applicable extensions), and
all such Tax Returns were correct and complete except to the extent that such
Tax Returns do not reflect unpaid Taxes (as defined below) for which accruals
and reserves have been set forth on the COR Balance Sheet; (ii) COR and each of
its Subsidiaries has paid on a timely basis all Taxes that were due (whether or
not shown) on any such Tax Returns; (iii) the unpaid Taxes of COR and its
Subsidiaries for Tax periods through the date of the COR Balance Sheet do not
exceed the accruals and reserves for Taxes set forth on the COR Balance Sheet
exclusive of any accruals and reserves for "deferred taxes" or similar items
that reflect timing differences between Tax and financial accounting principles;
(iv) all Taxes attributable to periods from and after the date of the COR
Balance Sheet have arisen in the ordinary course of business and are consistent
with regard to type and amount with Taxes incurred in comparable historical
periods; and (v) all Taxes that COR or any of its Subsidiaries is or was
required by law to withhold or collect have been duly withheld or collected and,
to the extent required, have been paid to the proper Governmental Entity.
(b) For purposes of this Agreement, (i) "Taxes" means all taxes,
charges, fees, levies or other similar assessments or liabilities, including
income, gross receipts, ad valorem, premium, value-added, excise, real property,
personal property, sales, use, services, transfer,
- 14 -
withholding, employment, payroll and franchise taxes imposed by the United
States of America or any state, local or foreign government, or any agency
thereof, or other political subdivision of the United States or any such
government, and any interest, fines, penalties, assessments or additions to tax
resulting from, attributable to or incurred in connection with any tax or any
contest or dispute thereof and (ii) "Tax Returns" means all reports, returns,
declarations, statements or other information required to be supplied to a
taxing authority in connection with Taxes.
(c) COR has made available to Millennium correct and complete copies
of all federal income Tax Returns, examination reports and statements of
deficiencies assessed against or agreed to by COR or any of its Subsidiaries
since December 31, 1994. The federal income Tax Returns of COR and each of its
Subsidiaries have been audited by the Internal Revenue Service ("IRS") or are
closed by the applicable statute of limitations for all taxable years through
December 31, 1994. No examination or audit of any Tax Return of COR or any of
its Subsidiaries by any Governmental Entity is currently in progress or, to the
knowledge of COR, threatened or contemplated. Neither COR nor any of its
Subsidiaries has been informed by any Governmental Entity that the Governmental
Entity believes that COR or any of its Subsidiaries was required to file any Tax
Return that was not filed. Neither COR nor any of its Subsidiaries has waived
any statute of limitations with respect to Taxes or agreed to an extension of
time with respect to a Tax assessment or deficiency.
(d) Neither COR nor any of its Subsidiaries: (i) is a "consenting
corporation" within the meaning of Section 341(f) of the Code, and none of the
assets of COR or any of its Subsidiaries is subject to an election under Section
341(f) of the Code; (ii) has been a United States real property holding
corporation within the meaning of Section 897(c)(2) of the Code during the
applicable period specified in Section 897(c)(l)(A)(ii) of the Code; (iii) has
made any payments, is obligated to make any payments, or is a party to any
agreement that could obligate it to make any payments that may be treated as an
"excess parachute payment" under Section 280G of the Code (without regard to
Section 280G(b)(4)); (iv) has any actual or potential liability for any Taxes of
any person (other than COR and its Subsidiaries) under Treasury Regulation
Section 1.1502-6 (or any similar provision of law in any jurisdiction), or as a
transferee or successor, by contract, or otherwise; or (v) is or has been
required to make a basis reduction pursuant to Treasury Regulation Section
1.1502-20(b) or Treasury Regulation Section 1.337(d)-2(b).
(e) Neither COR nor any of its Subsidiaries has distributed to its
shareholders or security holders stock or securities of a controlled
corporation, nor has stock or securities of COR or any Subsidiary been
distributed, in a transaction to which Section 355 of the Code applies (i) in
the two years prior to the date of this Agreement or (ii) in a distribution that
could otherwise constitute part of a "plan" or "series of related transactions"
(within the meaning of Section 355(e) of the Code).
Section 3.10 Properties. The COR Disclosure Schedule sets forth a true and
----------
complete list of all real property leased by COR or its Subsidiaries
(collectively "Leases") and the location of the premises. Neither COR nor any of
its Subsidiaries nor, to COR's knowledge, any other party to any such Leases is
in default under any of such Leases, except where the existence of such
defaults, individually or in the aggregate, are not reasonably likely to have an
COR Material
- 15 -
Adverse Effect. COR and its Subsidiaries do not own and have never owned any
real property. Each of the Leases is in full force and effect and is enforceable
in accordance with its terms and shall not cease to be in full force and effect
as a result of the transactions contemplated by this Agreement. Neither COR nor
any of its Subsidiaries leases, subleases or licenses any real property to any
person other than COR and its Subsidiaries. COR has made available to Millennium
true and complete copies of all Leases.
Section 3.11 Suppliers. No material supplier or exclusive supplier of COR or
---------
any of its Subsidiaries, including any manufacturer of Integrilin(R), has
indicated in writing to COR or any of its Subsidiaries that it will stop, or
decrease the rate of, supplying materials, products or services to COR or any of
its Subsidiaries or co-promotion partners. For the Integrilin(R) product, since
November 1, 2001, neither (a) manufacture of bulk drug substance or (b) filling
and finishing of such drug substance have been or are being performed for or on
behalf of COR or any of its Subsidiaries by Schering-Plough Ltd. (or any of its
affiliates) at any facility in Puerto Rico.
Section 3.12 Intellectual Property.
---------------------
(a) The COR Disclosure Schedule sets forth a true and complete list of
each of the following items: (1) all patents and applications therefor,
including any patent term extensions or supplementary protection certificates,
in the United States, the European Union or any country therein or Japan that
are owned by COR or any of its Subsidiaries or that are licensed or sublicensed
to COR or any of its Subsidiaries which relate to COR Intellectual Property
Rights (as defined below), (2) registrations of the trademark "Integrilin" and
applications therefor, (3) all licenses, agreements and contracts relating to
COR Intellectual Property Rights pursuant to which COR or any of its
Subsidiaries are entitled to use any Intellectual Property Rights (as defined
below) owned by any third party (the "Third Party Licenses"), other than
commercially available, mass marketed shrink-wrap software, and (4) all
agreements under which COR or any of its Subsidiaries has granted any third
party the right to use any COR Intellectual Property Rights.
(b) COR and its Subsidiaries exclusively own, or are licensed,
sublicensed or otherwise possess legally enforceable rights to use on an
exclusive basis (without any obligation to make any fixed or contingent
payments, including any royalty payments) all Intellectual Property Rights that
are now used or planned to be used in the manufacture, use, sale, offer for sale
or importation of, or which are necessary to make, have made, use, sell, offer
to sell or import Integrilin(R), cromafiban or RTK inhibitors CT-53518 or
CT-53608 (each, a "COR Product" and collectively the "COR Products") in the
United States, the European Union and the countries therein, and Japan (all such
Intellectual Property Rights described in this sentence constituting the "COR
Intellectual Property Rights"). For purposes hereof, "Intellectual Property
Rights" means all patents, including patent term extensions and supplementary
protection certificates, trademarks, trade names, domain names, service marks
and copyrights, any applications for and registrations of such patents,
trademarks, trade names, domain names, service marks and copyrights, and all
proprietary processes, formulae, methods, schematics, technology, know-how,
computer software programs or applications and tangible or intangible
proprietary information or material.
- 16 -
(c) The execution and delivery of this Agreement and consummation of
the Merger will not result in the breach of, or create on behalf of any third
party the right to terminate or modify, any license, sublicense or other
agreement to which COR or its Subsidiaries is a party and which relates to the
COR Intellectual Property Rights, including any Third Party License, except
where the breach, termination or modification, individually or in the aggregate
with every other such breach, termination or modification, is not reasonably
likely to have a COR Material Adverse Effect.
(d) To the knowledge of COR, (i) all patents, including all patent
term extensions and supplementary protection certificates, registered
trademarks, registered service marks and copyrights under which COR or any of
its Subsidiaries holds any rights and which are material to the business of COR
and its Subsidiaries, taken as a whole, are valid and subsisting, and (ii)
except as indicated on the COR Disclosure Schedule as being abandoned or
withdrawn, all applications for such patents, trademarks, service marks and
copyrights are subsisting and were filed in good faith. To the knowledge of COR,
no other person or entity is infringing, violating or misappropriating any of
the COR Intellectual Property Rights.
(e) To the knowledge of COR, none of the activities or business
previously or currently conducted by COR or any of its Subsidiaries relating to
the COR Products or currently planned to be conducted by COR or any of its
Subsidiaries relating to the COR Products (including the manufacture, use, sale,
offer for sale and importation of COR Products for any clinical indications)
infringes, violates or constitutes a misappropriation, in any material way, of
any Intellectual Property Rights of any other person or entity. Since January 1,
1995, neither COR nor any of its Subsidiaries has received any written
complaint, claim or notice alleging any such infringement, violation or
misappropriation, present or future.
(f) None of COR or any of its Subsidiaries is a party to any agreement
under which, following the Closing, a third party would be entitled to receive a
license or any other right in or to Intellectual Property Rights of Millennium
or any of Millennium's Affiliates (other than COR and its Subsidiaries) or
which, following the Closing, would restrict or limit the business or operations
of Millennium or any of its Affiliates (other than COR and its Subsidiaries).
(g) COR and its Subsidiaries have taken reasonable measures and
precautions to protect and maintain the confidentiality, secrecy and value of
all COR Intellectual Property Rights. To the knowledge of COR, no current or
former employee, officer, director, stockholder, consultant or independent
contractor has any right, claim or interest in or with respect to any COR
Intellectual Property Rights.
Section 3.13 Agreements, Contracts and Commitments.
-------------------------------------
(a) COR has filed with the SEC all contracts and agreements required
to be filed by COR under Item 601 of Regulation S-K or which it would be
required to file if it were required to file an Annual Report on Form 10-K on
the date of this Agreement (collectively, "COR Material Contracts"). Each COR
Material Contract is in full force and effect and is enforceable against COR
(and, to the knowledge of COR, against the other parties thereto) in accordance
with its terms, subject to the Bankruptcy and Equity Exception. Neither COR nor
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any of its Subsidiaries nor, to COR's knowledge, any other party to any COR
Material Contract is in violation of or in default under (nor does there exist
any condition which, upon the passage of time or the giving of notice or both,
would cause such a violation of or default under) any COR Material Contract,
except for violations or defaults that, individually or in the aggregate, are
not reasonably likely to have a COR Material Adverse Effect.
(b) The COR Disclosure Schedule sets forth a complete list of each
contract or agreement to which COR or any Subsidiary is a party or bound that
includes any non-competition, non-solicitation, standstill or similar
restrictions or undertakings on COR or any Subsidiary of COR. To COR's
knowledge, none of the contracts or agreements referred to in the foregoing
sentence would preclude Millennium or any of its Affiliates from engaging in any
current activities of Millennium or such Affiliates or any planned activities of
Millennium or such Affiliates that Millennium has disclosed in the Millennium
SEC Reports (as defined in Section 4.04(a) below) or otherwise disclosed to COR
in writing. Since January 1, 2001, there has been no transaction to which COR or
any of its Subsidiaries was or is a party which would be required to be
disclosed under Item 404 of Regulation S-K and which has not been disclosed in a
COR SEC Report filed prior to the date hereof.
Section 3.14 Product Liability; Litigation. No product liability claims have
-----------------------------
been asserted in a writing given to COR or any of its Subsidiaries or, to the
knowledge of COR, threatened against COR or any of its Subsidiaries relating to
products or product candidates developed, tested, manufactured, marketed,
distributed or sold by COR or any of its Subsidiaries. Except as described in
the COR SEC Reports filed prior to the date hereof, there is no (i) action, suit
or proceeding, claim, arbitration or investigation against COR or any of its
Subsidiaries pending or, to the knowledge of COR, threatened other than those
seeking only monetary damages in an amount, individually or together with
similar matters, not in excess of $100,000 or (ii) judgment, order or decree
outstanding against COR or any of its Subsidiaries.
Section 3.15 Environmental Matters.
---------------------
(a) Except as disclosed in the COR SEC Reports filed prior to the date
hereof and except for such matters that, individually or in the aggregate, are
not reasonably likely to have a COR Material Adverse Effect: (i) COR and its
Subsidiaries have complied with and are in compliance with all applicable
Environmental Laws (as defined in Section 3.15(b)); (ii) the properties
currently owned or operated by COR or any of its Subsidiaries (including soils,
groundwater, surface water, buildings or other structures) are not contaminated
with any Hazardous Substances (as defined in Section 3.15(c)); (iii) the
properties formerly owned or operated by COR or any of its Subsidiaries were not
contaminated with Hazardous Substances during or, to the knowledge of COR,
before the period of ownership or operation by COR or any of its Subsidiaries;
(iv) neither COR nor its Subsidiaries have received written notice that they are
subject to liability for any Hazardous Substance disposal or contamination on
the property of any third party and, to COR's knowledge, neither COR nor any of
its Subsidiaries is subject to any such liability; (v) neither COR nor any of
its Subsidiaries have released any Hazardous Substance into the environment in
violation of or which could result in response obligations under applicable
Environmental Laws; (vi) neither COR nor any of its Subsidiaries has received
any written notice, demand, letter, claim or request for information alleging
that COR or any of its Subsidiaries may be in violation of, liable under or have
obligations under any Environmental
- 18 -
Law and (vii) neither COR nor any of its Subsidiaries is subject to any orders,
decrees, injunctions or other arrangements with any Governmental Entity, or is
subject to any indemnity or other agreement with any third party relating to
liability or obligation under any Environmental Law or relating to Hazardous
Substances.
(b) As used herein, the term "Environmental Law" means any federal,
state, local or foreign law, regulation, order, decree, permit, authorization,
common law or agency requirement relating to: (A) the protection of,
investigation of effect on, or restoration of the environment, human health and
safety, or natural resources, (B) the handling, manufacturing, transportation,
use, presence, disposal, release or threatened release of any Hazardous
Substance or (C) noise, odor, wetlands, pollution, contamination or any injury
or threat of injury to persons or property related to any of them.
(c) As used herein, the term "Hazardous Substance" means any substance
that is: (A) listed, classified, regulated or which falls within the definition
of a "hazardous substance" or "hazardous material" pursuant to any Environmental
Law; (B) any petroleum product or by-product, asbestos-containing material,
lead-containing paint, pipes or plumbing, polychlorinated biphenyls, radioactive
materials or radon; or (C) any other substance which is regulated by any
Governmental Entity pursuant to any Environmental Law.
(d) This Section 3.15 shall be the exclusive section in this Agreement
containing representations and warranties of COR concerning environmental
matters.
Section 3.16 Employee Benefit Plans.
----------------------
(a) The COR Disclosure Schedule lists all material employee benefit
plans (as defined in Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA")) and all bonus, stock option, stock purchase,
incentive, deferred compensation, supplemental retirement, severance and other
similar employee benefit plans, and all unexpired severance agreements, written
or otherwise, for the benefit of, or relating to, any current or former employee
of COR or any of its Subsidiaries (together, the "COR Employee Plans").
(b) With respect to each COR Employee Plan, COR has furnished or made
available to Millennium, a true and complete copy of (i) the most recent annual
report (Form 5500) filed with the IRS, (ii) such COR Employee Plan, (iii) each
trust agreement and group annuity contract, if any, relating to such COR
Employee Plan and (iv) the most recent reports regarding the satisfaction of the
nondiscrimination requirements of Sections 410(b), 401(k) and 401(m) of the
Code.
(c) Each COR Employee Plan has been administered in all material
respects in accordance with its terms and each of COR, its Subsidiaries and each
of their ERISA Affiliates (as defined below) has in all material respects met
its obligations with respect to each COR Employee Plan and has made all required
contributions thereto. COR, its Subsidiaries, each ERISA Affiliate and each COR
Employee Plan are in compliance in all material respects with the currently
applicable provisions of ERISA and the Code and the regulations thereunder
(including Section 4980B of the Code, Subtitle K, Chapter 100 of the Code and
Sections 601 through 608 and Section 701 et seq. of ERISA). All filings and
reports as to each COR
- 19 -
Employee Plan required to have been submitted to the IRS or to the United States
Department of Labor have been duly submitted. No COR Employee Plan has assets
that include securities issued by COR or any ERISA Affiliate. Each COR Employee
Plan which is required to satisfy Section 401(k)(3) or Section 401(m)(2) of the
Code has been tested for compliance with, and satisfies the requirements of
Section 401(k)(3) and Section 401(m)(2) of the Code for each plan year ending
prior to the Closing Date. With respect to the COR Employee Plans, no event has
occurred which could reasonably be expected to be subject to any material
liability under ERISA, the Code or any other applicable law.
(d) With respect to the COR Employee Plans, there are no funded
benefit obligations for which contributions have not been made or properly
accrued and there are no material unfunded benefit obligations which have not
been accounted for by reserves, or otherwise properly footnoted in accordance
with generally accepted accounting principles, on the COR Balance Sheet.
(e) Neither COR, any Subsidiary of COR nor any trade or business
(whether or not incorporated) which is a member of a controlled group of
corporations or which is under common control with COR or any Subsidiary of COR
within the meaning of Section 414(b), (c), (m) or (o) of the Code (an "ERISA
Affiliate") has (i) ever maintained an COR Employee Plan which was subject to
Title IV of ERISA or Section 412 of the Code or (ii) ever been obligated to
contribute to a multiemployer plan (as defined in Section 4001(a)(3) of ERISA).
(f) Except as disclosed in COR SEC Reports filed prior to the date of
this Agreement, and except as provided for in this Agreement, neither COR nor
any of its Subsidiaries is a party to any oral or written (i) agreement with any
officer or other key employee of COR or any of its Subsidiaries, the benefits of
which are contingent, or the terms of which are materially altered, upon the
occurrence of a transaction involving COR of the nature contemplated by this
Agreement, (ii) agreement with any employee of COR or any of its Subsidiaries
(A) providing any term of employment or compensation guarantee extending for a
period longer than one year from the date hereof, (B) which is not terminable on
30 days' notice without penalty, or (C) providing for the payment of
compensation in excess of $100,000 per annum, or (iii) agreement or plan,
including any stock option plan, stock appreciation right plan, restricted stock
plan or stock purchase plan, any of the benefits of which will be increased, or
the vesting of the benefits of which will be accelerated, by the occurrence of
any of the transactions contemplated by this Agreement or the value of any of
the benefits of which will be calculated on the basis of any of the transactions
contemplated by this Agreement. COR has made available to Millennium such
information as is in COR's possession or under COR's control and reasonably
necessary for Millennium to calculate any excise tax due under Section 4999 of
the Code as a result of the transactions contemplated by this Agreement for
which COR or its Subsidiaries or Millennium may directly or indirectly become
liable and the amount of deductions that may be disallowed under Section 280G of
the Code as a result of the transactions contemplated by this Agreement.
(g) Each COR Employee Plan intended to be qualified under Section
401(a) of the Code has either obtained from the IRS a favorable determination
letter as to its qualified status under the Code, including all amendments to
the Code effected by the Tax Reform Act of 1986 and subsequent legislation, or
has applied (or has time remaining in which to apply) to the
- 20 -
IRS for such a determination letter prior to the expiration of the requisite
period under applicable Treasury Regulations or IRS pronouncements in which to
apply for such determination letter and to make any amendments necessary to
obtain a favorable determination or has been established under a standardized
prototype plan for which an IRS opinion letter has been obtained by the plan
sponsor and is valid as to the adopting employer. COR has furnished or made
available to Millennium a true and complete copy of the most recent IRS
determination or opinion with respect to each such COR Employee Plan and, to the
knowledge of COR, nothing has occurred since the inception of each such COR
Employee Plan which could reasonably be expected to cause the loss of the
tax-qualified status of any COR Employee Plan subject to Section 401(a) of the
Code.
(h) None of the COR Employee Plans promises or provides retiree
medical or other retiree welfare benefits to any person, except as required by
applicable law.
Section 3.17 Compliance With Laws. COR and each of its Subsidiaries has
--------------------
complied in all material respects with, is not in material violation of, and has
not received any notices of material violation with respect to, any foreign,
federal, state or local statute, law or regulation affecting the conduct of its
business, or the ownership or operation of its properties or assets.
Section 3.18 Preclinical Testing and Clinical Trials. The COR Disclosure
---------------------------------------
Schedule sets forth all human clinical trials conducted prior to the date of
this Agreement by COR or any of its Subsidiaries, on behalf of COR or any of its
Subsidiaries, or in which COR or any of its Subsidiaries has participated
(including any such trials which are still pending). The human clinical trials,
animal studies and other preclinical tests conducted by COR or any of its
Subsidiaries or in which COR or any of its Subsidiaries has participated, and
such studies and tests conducted on behalf of COR or any of its Subsidiaries,
were and, if still pending, are being conducted in all material respects in
accordance with (A) experimental protocols, informed consents, procedures and
controls generally used by qualified experts in the preclinical or clinical
study of products comparable to those being developed by COR or its
Subsidiaries, and (B) all applicable laws and regulations, including but not
limited to, 21 CFR part 50 (informed consent), part 56 (institutional review
boards), part 58 (good laboratory practices), part 812 (investigational device
exemptions), and all other applicable laws and regulations. None of COR, its
Subsidiaries or the contract research organization overseeing or assisting COR
in administering any clinical or preclinical trial or investigator-sponsored
trial of Integrilin(R), cromafiban or RTK inhibitors CT-53518 or CT-53608 on
behalf of COR or its Subsidiaries has received any notices or correspondence
from the Federal Food and Drug Administration (the "FDA") or any other
governmental agency, and no other agent or representative of COR or any of its
Subsidiaries has received any written notices or correspondence from the FDA or
any other governmental agency, requiring the delay, termination, suspension or
modification (other than such modifications as are normal in the regulatory
process) of any animal studies, preclinical tests or clinical trials conducted
by or on behalf of COR or any of its Subsidiaries or in which COR or any of its
Subsidiaries has participated. No clinical investigator acting for COR or any of
its Subsidiaries has been or is now, or is threatened to become, the subject of
any disbarment or disqualification proceedings by any regulatory agency.
Section 3.19 Certain Regulatory Matters.
--------------------------
- 21 -
(a) COR has made available to Millennium a true and complete copy of all
material written communications between COR or any of its Subsidiaries, on the
one hand, and the FDA or any other governmental entity on the other hand, and
any existing written summaries of material discussions between such parties,
that describe matters that are material to assessing compliance of COR with the
Federal Food, Drug and Cosmetic Act and its implementing regulations, including
copies of (i) all warning letters, notices of adverse findings and similar
correspondence, (ii) all audit reports, and (iii) any document concerning any
significant oral or written communication received from the FDA. COR has also
made available to Millennium true and complete copies of all complaints and
other information required to be maintained by COR or any of its Subsidiaries
pursuant to the United States Federal Food, Drug and Cosmetic Act and
Comprehensive Drug Abuse Prevention and Control Act of 1970 and the
corresponding laws of jurisdictions other than the United States.
(b) COR and its Subsidiaries have filed with the FDA and all applicable
state, local and foreign regulatory bodies for and received approval of all
material registrations, applications, licenses, requests for exemptions, permits
and other regulatory authorizations necessary to conduct the business of COR and
its Subsidiaries as currently conducted. COR and its Subsidiaries and, to COR's
knowledge, any third party which is a manufacturer for COR or its Subsidiaries,
are in compliance in all material respects with all such registrations,
applications, licenses, requests for exemptions, permits and other regulatory
authorizations. Each of COR, its Subsidiaries and, to its knowledge, any such
third party manufacturer is in compliance in all material respects with all
material FDA, state, local and foreign rules, regulations, guidelines and
policies, including, but not limited to, material FDA, state, local and foreign
rules, regulations and policies relating to good clinical practice ("GCP"), good
manufacturing practice ("GMP"), good laboratory practice ("GLP"), advertising
and promotion, pre- and post-marketing adverse drug experience and adverse drug
reaction reporting, and all other pre- and post-marketing reporting
requirements, as applicable; (i) no party granting any such registration,
application, license, request for exemption, permit or other authorization has
notified COR or any of its Subsidiaries in writing that it is considering
limiting, suspending or revoking the same, including by enjoining or limiting
the production of any product of COR or any of its Subsidiaries manufactured by
a third party manufacturer, and (ii) to the knowledge of COR there is no basis
for any such limitation, suspension or revocation.
(c) The COR Disclosure Schedule sets forth a description of any
discussions or negotiations since January 1, 2001 between COR or any of its
Subsidiaries or any party marketing, selling or co-promoting Integrilin(R) and
the Governmental Entity administering the Medicare program relating to any
proposed modification or change of the reimbursement rate or other reimbursement
arrangements with respect to Integrilin(R) and lists any written communications
relating to such discussions or negotiations.
Section 3.20 Tax Matters. To its knowledge, after consulting with its
-----------
independent auditors, neither COR nor any of its Affiliates (as defined in
Section 6.09 below) has taken or agreed to take any action which would prevent
the Merger from constituting a transaction qualifying as a reorganization under
368(a) of the Code.
Section 3.21 Registration Statement; Proxy Statement/Prospectus. The
--------------------------------------------------
information related to COR or to be supplied in writing by COR for inclusion in
the registration statement on
- 22 -
Form S-4 pursuant to which shares of Millennium Common Stock issued in the
Merger will be registered under the Securities Act (the "Registration
Statement"), or for inclusion in any filing pursuant to Rule 165 and Rule 425
under the Securities Act (each a "Regulation M-A Filing"), shall not at the time
the Registration Statement is declared effective by the SEC or any Regulation
M-A Filing is filed with the SEC, or at any time it is amended or supplemented,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
in the Registration Statement not misleading. The information related to COR or
to be supplied in writing by COR or any of its Subsidiaries for inclusion in the
joint proxy statement/prospectus to be sent to the stockholders of Millennium
and COR in connection with the meeting of COR's stockholders to consider this
Agreement and the Merger (the "COR Meeting") and in connection with the meeting
of Millennium's stockholders (the "Millennium Meeting") to consider the issuance
of shares of Millennium Common Stock pursuant to the Merger (the "Joint Proxy
Statement") shall not, on the date the Joint Proxy Statement is first mailed to
stockholders of COR or Millennium, at the time of the COR Meeting or the
Millennium Meeting or at the Effective Time, contain any statement which, at
such time and in light of the circumstances under which it shall be made, is
false or misleading with respect to any material fact, or omit to state any
material fact necessary in order to make the statements made in the Joint Proxy
Statement not false or misleading; or omit to state any material fact necessary
to correct any statement in any earlier communication with respect to the
solicitation of proxies for the COR Meeting or the Millennium Meeting which has
become false or misleading. If at any time prior to the Effective Time any event
relating to COR or any of its Affiliates, officers or directors should be
discovered by COR which should be set forth in an amendment to the Registration
Statement or a supplement to the Joint Proxy Statement, COR shall promptly
inform Millennium.
Section 3.22 Labor Matters.
-------------
(a) Neither COR nor any of its Subsidiaries is a party to or otherwise
bound by any collective bargaining agreement, contract or other agreement or
understanding with a labor union or labor organization. Neither COR nor any of
its Subsidiaries is the subject of any proceeding asserting that COR or any of
its Subsidiaries has committed an unfair labor practice or seeking to compel it
to bargain with any labor union or labor organization. There is not pending or,
to the knowledge of COR, threatened, any labor strike, dispute, walkout, work
stoppage, slow-down or lockout involving COR or any of its Subsidiaries that,
individually or in the aggregate, is reasonably likely to have a material effect
on COR and its Subsidiaries, taken as a whole. The COR Disclosure Schedule lists
all employees of COR or any of its Subsidiaries who are not citizens of the
United States and the respective immigration status of each such employee.
(b) Except as set forth on the COR Disclosure Schedule, no officer of
COR or any of its Subsidiaries at the vice-president (or equivalent) level or
above has an employment agreement with COR or any of its Subsidiaries (other
than (i) an oral agreement terminable without notice or (ii) an offer letter
that provides for at-will employment without severance arrangements).
Section 3.23 Insurance. All fire and casualty, general liability, business
---------
interruption, product liability, clinical trial and sprinkler and water damage
insurance policies maintained by
- 23 -
COR or any of its Subsidiaries are with reputable insurance carriers, provide
coverage for all normal risks incident to the business of COR and its
Subsidiaries and their respective properties and assets (taking into account the
products of COR and its Subsidiaries and the indications for which such products
are and have been sold). COR has made available to Millennium a summary of the
material insurance coverages (which shall include all product liability
coverages) maintained by COR and its Subsidiaries, including deductibles, and a
history of any claims made and claims paid since January 1, 1998 involving more
than $100,000. None of such material insurance policies (including all product
liability policies) will terminate or lapse (or be affected in any other
material manner) by reason of the transactions contemplated by this Agreement.
No insurer under any such insurance policy has canceled or disclaimed liability
under any such policy or notified COR in writing of its intent to do so or not
to renew any such policy, or has quoted COR new rates for the next policy year.
All material claims under the insurance policies have been filed by COR and its
Subsidiaries and paid in a timely fashion.
Section 3.24 No Existing Discussions. As of the time of execution and
-----------------------
delivery of this Agreement, neither COR nor any of its Subsidiaries is engaged,
directly or indirectly, in any discussions or negotiations with any other party
with respect to an Acquisition Proposal (as defined in Section 6.01).
Section 3.25 Opinion of Financial Advisor. The financial advisor of COR,
----------------------------
Goldman, Sachs & Co. ("Goldman Sachs"), has delivered to COR an opinion dated on
the date of this Agreement to the effect that, as of such date, the Exchange
Ratio is fair from a financial point of view to the holders of COR Common Stock.
A signed copy of such opinion will be delivered to Millennium as promptly as
practicable following the execution and delivery of this Agreement.
Section 3.26 Section 203 of the DGCL and Business Combination Provisions
-----------------------------------------------------------
of Certificate of Incorporation Not Applicable. The Board of Directors of COR
- ----------------------------------------------
has taken all actions so that the restrictions contained in Section 203 of the
DGCL applicable to a "business combination" (as defined in Section 203) will not
apply to the execution, delivery or performance of this Agreement or the COR
Voting Agreements or the consummation of the Merger or the other transactions
contemplated by this Agreement or the COR Voting Agreements. The provisions of
Article SIXTH of the Certificate of Incorporation of COR do not apply to the
execution, delivery or performance of this Agreement or the COR Voting
Agreements or the consummation of the Merger or the other transactions
contemplated by this Agreement or the COR Voting Agreements so as to require
that the COR Voting Proposal be approved by the affirmative vote of any
percentage of the outstanding shares of the COR Voting Stock greater than a
majority of the outstanding shares of COR Common Stock on the record date for
the COR Meeting or to require any other consent or approval that has not been
obtained on or before the date of this Agreement.
Section 3.27 Rights Agreement. COR has amended the COR Rights Plan in the
----------------
form of Exhibit C attached hereto and has taken all other action necessary or
appropriate so that the entering into of this Agreement and the COR Voting
Agreements do not and will not result in the ability of any person to exercise
any of the COR Rights under the COR Rights Plan or enable or require the COR
Rights issued thereunder to separate from the shares of COR Common Stock to
which they are attached or to be triggered or become exercisable or cease to be
redeemable.
- 24 -
Section 3.28 Broker Fees. Neither COR nor any of its Subsidiaries nor any
-----------
of their respective officers or directors has employed any broker, finder,
investment banker or financial advisor or incurred any liability for any
broker's fees, commissions or finder's fees in connection with any of the
transactions contemplated by this Agreement, except that COR has engaged, and
will pay a fee to, Goldman Sachs in accordance with the terms of a letter
agreement between COR and Goldman Sachs dated October 3, 1999, a true and
complete copy of which has been delivered to Millennium.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF Millennium AND SUB
Except as set forth in the disclosure schedule delivered by Millennium and
Sub to COR on or before the date of this Agreement (the "Millennium Disclosure
Schedule") (which Millennium Disclosure Schedule shall be arranged in sections
corresponding to the numbered and lettered sections contained in this Article IV
and the disclosure in any section shall qualify (1) the corresponding section of
this Article IV and (2) other sections in this Article IV to the extent that it
is reasonably apparent that it also qualifies or applies to such other
sections), Millennium and Sub represent and warrant to COR as follows in this
Article IV. As used in this Agreement, any reference to "Millennium's
knowledge", "the knowledge of Millennium", "the best knowledge of Millennium",
"of which Millennium is aware", or any similar expression shall mean the actual
knowledge of Mark J. Levin, Chairman and Chief Executive Officer, Kevin P.
Starr, Executive Vice President, Business Operations and Chief Financial
Officer, Robert Tepper, Executive Vice President and Chief Scientific Officer,
and John B. Douglas III, Senior Vice President and General Counsel (the
"Millennium Knowledge Parties").
For purposes of this Agreement, the term "Millennium Material Adverse
Effect" means any material adverse change, event, circumstance, development or
effect on (a) the assets, business, financial condition, results of operations
or prospects of Millennium and its Subsidiaries taken as a whole; or (b) the
ability of Millennium to consummate the transactions contemplated by this
Agreement; provided, however, that the following events shall not be deemed to
be, and shall not be taken into account in determining whether there has been or
whether there is likely or expected to be, a "Millennium Material Adverse
Effect" on or with respect to Millennium and its Subsidiaries taken as a whole:
(i) any adverse change in the stock price of Millennium in and of itself, as
quoted on the Nasdaq National Market; (ii) any adverse change, event,
circumstance, development or effect resulting from a change in general economic,
industry or financial market conditions not substantially disproportionately
affecting Millennium and its Subsidiaries taken as a whole; (iii) any change,
event, circumstance, development or effect resulting from a breach of this
Agreement by COR or Sub, (iv) any adverse change, event, circumstance,
development or effect resulting from any acts of terrorism or war, including the
events of September 11, 2001, fighting in Afghanistan, letters containing
anthrax and similar circumstances, (v) any adverse change, event, circumstance,
development or effect directly resulting from the announcement or pendency of
the Merger, and (vi) any adverse change, event, circumstance, development or
effect resulting from or relating to compliance with the terms of, the taking of
any action expressly required by, this Agreement. For the avoidance of doubt,
the Parties agree that the terms "material", "materially" or "materiality" as
used in this Agreement with an initial lower case "m" shall have their
respective customary meanings, without regard to
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the meaning ascribed to Millennium Material Adverse Effect in the prior
sentences of this paragraph or the meaning ascribed to COR Material Adverse
Effect in Article III above.
Section 4.01 Organization of Millennium and Sub. Each of Millennium and
----------------------------------
Sub is a corporation duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation, has all requisite corporate
power to own, lease and operate its properties and assets and to carry on its
business as now being conducted, and is duly qualified to do business and is in
good standing as a foreign corporation in each jurisdiction in which the failure
to be so qualified, individually or in the aggregate, would be reasonably likely
to be material. Millennium has made available to COR true and complete copies of
the Certificate of Incorporation and By-Laws of Millennium and of the charter,
by-laws or other organizational documents of each Subsidiary of Millennium.
Section 4.02 Millennium Capital Structure. As of the date of this
----------------------------
Agreement, the authorized capital stock of Millennium consists of (i)
500,000,000 shares of Millennium Common Stock, and (ii) 5,000,000 shares of
preferred stock, $.001 par value ("Millennium Preferred Stock") of which 500,000
shares have been designated Series A Junior Participating Preferred Stock. As of
December 3, 2001, there were issued and outstanding 222,671,521 shares of
Millennium Common Stock, all of which are validly issued, fully paid and
nonassessable, and no shares of Preferred Stock. Between December 3, 2001 and
the date of this Agreement, (i) no shares of Millennium Common Stock or
Millennium Preferred Stock were issued other than pursuant to the Millennium
Stock Plans (as defined below) or the warrants and other outstanding rights to
purchase Millennium Common Stock listed in Section 4.02 of the Millennium
Disclosure Schedules, and (ii) no stock options have been issued or awarded by
Millennium. All of the issued and outstanding Millennium Common Stock was issued
in compliance with applicable federal and state securities laws. The Millennium
Disclosure Schedule shows the number of shares of Millennium Common Stock and
Millennium Preferred Stock reserved for future issuance pursuant to (i) stock
options granted and outstanding as of December 3, 2001, and the plans under
which such options were granted (collectively, the "Millennium Stock Plans"),
(ii) the conversion of the 5.5% Convertible Subordinated Notes due January 15,
2007 outstanding on the date of this Agreement, (iii) the rights outstanding as
of the date of this Agreement (the "Millennium Rights") under the Rights
Agreement between Millennium and State Street Bank and Trust Company, as Rights
Agent, dated April 5, 2001 (the "Millennium Rights Agreement"); and (iv) the
warrants and other outstanding rights to purchase Millennium Common Stock
outstanding on the date of this Agreement. All shares of Millennium Common Stock
and Millennium Preferred Stock subject to issuance as specified above are duly
authorized and, upon issuance on the terms and conditions specified in the
instruments pursuant to which they are issuable, shall be validly issued, fully
paid and nonassessable.
Section 4.03 Authority; No Conflict; Required Filings and Consents.
-----------------------------------------------------
(a) Each of Millennium and Sub has all requisite corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated by this Agreement. The execution and delivery of this Agreement and
the Millennium Voting Agreements and the consummation of the transactions
contemplated by this Agreement have been duly authorized by all necessary
corporate action on the part of each of Millennium and Sub, subject only to the
approval of the Millennium Voting Proposal (as defined in
- 26 -
Section 6.05(b)) by Millennium's stockholders. Without limiting the generality
of the preceding sentence, the board of directors of Millennium (at a meeting
duly called and held) has (i) unanimously determined that the Merger is
advisable and in the best interests of Millennium, (ii) unanimously authorized
and approved the execution, delivery and performance of this Agreement by
Millennium and unanimously approved the Merger, and (iii) unanimously
recommended the approval of the issuance of the Merger Shares by Millennium's
stockholders and directed that the approval of the issuance of the Merger Shares
be submitted for consideration by Millennium's stockholders at a meeting of
Millennium's stockholders. This Agreement has been duly executed and delivered
by each of Millennium and Sub and constitutes the valid and binding obligation
of each of Millennium and Sub, enforceable in accordance with its terms, subject
to the Bankruptcy and Equity Exception. Millennium has reserved for issuance a
sufficient number of shares of Millennium Common Stock for the purpose of
issuing such shares to COR's security holders in accordance with Article II.
(b) The execution and delivery of this Agreement by each of Millennium and
Sub does not, and the consummation of the transactions contemplated by this
Agreement will not, (i) conflict with, or result in any violation or breach of,
any provision of the Certificate of Incorporation or By-Laws of Millennium or
Sub, (ii) result in any violation or breach of, or constitute (with or without
notice or lapse of time, or both) a default (or give rise to a right of
termination, cancellation or acceleration of any obligation or loss of any
material benefit) under, or require a consent or waiver under, any of the terms,
conditions or provisions of any material note, bond, mortgage, indenture, lease,
license, contract or other agreement, instrument or obligation to which
Millennium or any of its Subsidiaries is a party or by which any of them or any
of their properties or assets may be bound, or (iii) conflict with or violate
any permit, concession, franchise, license, judgment, order, decree, statute,
law, ordinance, rule or regulation applicable to Millennium or any of its
Subsidiaries or any of its or their properties or assets, except for any
conflicts or violations which, individually or in the aggregate, are not
reasonably likely to have a Millennium Material Adverse Effect. No person other
than Millennium will have the right, pursuant to registration rights or
otherwise, to sell shares of Millennium capital stock under the Registration
Statement.
(c) No consent, approval, license, permit, order or authorization of, or
registration, declaration or filing with, any Governmental Entity is required by
or with respect to Millennium or any of its Subsidiaries in connection with the
execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby, except for (i) the filing of the pre-merger notification
report under the HSR Act and the termination or expiration of the waiting period
applicable thereto, (ii) the filing of the Registration Statement with the SEC
in accordance with the Securities Act, (iii) the filing of the Certificate of
Merger with the Delaware Secretary of State, (iv) the filing of the Joint Proxy
Statement with the SEC in accordance with the Exchange Act, (v) the filings of
such reports or schedules under Section 13 of the Exchange Act and materials
under Rule 165 and Rule 425 of the Securities Act as may be required in
connection with this Agreement and the transactions contemplated hereby, (vi)
such consents, approvals, orders, authorizations, registrations, declarations
and filings as may be required under applicable state securities laws, (vii) the
filing with the Nasdaq National Market of notice of the listing of the shares of
Millennium Common Stock to be issued in the transactions contemplated by this
Agreement, and (viii) such other consents, licenses, permits, orders,
authorizations, filings, approvals and registrations which, if not obtained or
made, would not be reasonably
- 27 -
likely, individually or in the aggregate, to have a Millennium Material Adverse
Effect. The Millennium stockholder vote required for the approval of the
Millennium Voting Proposal (as defined in Section 6.05(b) below) is the
affirmative vote of the holders of a majority of the shares of Millennium Common
Stock voted at the Millennium Meeting at which a quorum of the holders of the
outstanding shares of Millennium Common Stock on the record date for the
Millennium Meeting is present.
Section 4.04 SEC Filings; Financial Statements.
---------------------------------
(a) Each registration statement, proxy statement, schedule or report
required to be filed by Millennium or any of its Subsidiaries with the SEC since
January 1, 1998 under the Securities Act or the Exchange Act (collectively, the
"Millennium SEC Reports") on the date filed (i) complied in all material
respects with the requirements of the Securities Act and the Exchange Act, as
the case may be, and (ii) did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading. Millennium has made available to COR true and
complete copies of all Millennium SEC Reports and all exhibits thereto or true
and complete copies of such Millennium SEC Reports and exhibits are available on
EDGAR. None of Millennium's Subsidiaries is required to file any forms, reports
or other documents with the SEC. Each of the Millennium SEC Reports was filed on
a timely basis.
(b) Except to the extent expressly stated therein, each of the
consolidated financial statements (including, in each case, any related notes
and schedules) contained in the Millennium SEC Reports (i) complied as to form
in all material respects with the applicable published rules and regulations of
the SEC with respect thereto, (ii) were prepared in accordance with generally
accepted accounting principles applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes to such financial
statements or, in the case of unaudited statements, as permitted by Form 10-Q of
the SEC) and (iii) fairly presented the consolidated financial position of
Millennium and its Subsidiaries and the consolidated results of operations and
cash flows for the periods indicated, consistent with the books and records of
Millennium and its Subsidiaries, except that the unaudited interim financial
statements were or are subject to normal and recurring year-end adjustments
which were not expected to be material in amount. The unaudited balance sheet of
Millennium as of September 30, 2001 is referred to as the "Millennium Balance
Sheet".
Section 4.05 No Undisclosed Liabilities. Except (i) as disclosed in the
--------------------------
Millennium SEC Reports filed prior to the date hereof, (ii) normal or recurring
liabilities incurred since the date of the Millennium Balance Sheet in the
ordinary course of business and consistent with past practice, (iii) for
liabilities to perform its contractual obligations (which does not include
liabilities for breach of such obligations), (iv) indebtedness for money
borrowed after the date of this Agreement, and (v) liabilities and obligations
incurred in connection with activities permitted by clauses (i), (ii) or (iii)
of Section 5.02(f) below, Millennium and its Subsidiaries do not have any
liabilities, either accrued, contingent or otherwise (whether or not required to
be reflected in financial statements in accordance with generally accepted
accounting principles), and whether due or to become due, which individually or
in the aggregate, are reasonably likely to have a Millennium Material Adverse
Effect.
- 28 -
Section 4.06 Absence of Certain Changes or Events. Except as disclosed in
------------------------------------
the Millennium SEC Reports filed prior to the date hereof, between the date of
the Millennium Balance Sheet and the date of this Agreement, Millennium and its
Subsidiaries have conducted their respective businesses only in the ordinary
course of business and consistent with past practice, and since the date of the
Millennium Balance Sheet, there has not been (i) any event, change or
development in the financial condition, results of operations, business,
properties or prospects of Millennium and its Subsidiaries, taken as a whole,
that, individually or in the aggregate, has had, or is reasonably likely to
have, a Millennium Material Adverse Effect (it being agreed that the activities
expressly referred to in clauses (i) or (ii) of Section 5.02(f) below shall be
deemed not to have a Millennium Material Adverse Effect); (ii) any damage,
destruction or loss (whether or not covered by insurance) with respect to
Millennium or any of its Subsidiaries having a Millennium Material Adverse
Effect; (iii) any material change by Millennium in its accounting methods not
required pursuant to generally accepted accounting principles, principles or
practices to which COR has not previously consented in writing; or (iv) any
revaluation by Millennium of any of its assets having a Millennium Material
Adverse Effect.
Section 4.07 Litigation. Except as described in the Millennium SEC Reports
----------
filed prior to the date hereof, there is no action, suit or proceeding, claim,
arbitration or investigation against Millennium or Sub pending or as to which
Millennium or Sub has received any written notice of assertion, which,
individually or in the aggregate, is reasonably likely to have a Millennium
Material Adverse Effect or a material adverse effect on the ability of
Millennium to consummate the transactions contemplated by this Agreement.
Section 4.08 Compliance With Laws. Millennium and each of its Subsidiaries
--------------------
has complied with, is not in violation of, and has not received any notices of
violation with respect to, any foreign, federal, state or local statute, law or
regulation with respect to the conduct of its business, or the ownership or
operation of its properties or assets, except for failures to comply or
violations which, individually or in the aggregate, have not had and are not
reasonably likely to have a Millennium Material Adverse Effect.
Section 4.09 Tax Matters. To its knowledge, after consulting with its
-----------
independent auditors, neither Millennium nor any of its Affiliates has taken or
agreed to take any action which would prevent the Merger from constituting a
transaction qualifying as a reorganization under Section 368(a) of the Code.
Section 4.10 Intellectual Property.
---------------------
(a) Millennium and its Subsidiaries exclusively own, or are licensed,
sublicensed or otherwise possess legally enforceable rights to use, pursuant to
the licenses, agreements and contracts listed in Section 4.10(a) of the
Millennium Disclosure Schedule, all Intellectual Property Rights that are now
used or planned to be used in the manufacture, use, sale, offer for sale or
importation of, or which are necessary to make, have made, use, sell, offer to
sell or import the product candidates of Millennium and its Subsidiaries that
are undergoing Phase II human clinical trials as of the date of this Agreement
(the "Phase II Products") in the United States, the European Union and the
countries therein, and Japan (all such Intellectual Property Rights described in
this sentence constituting the "Millennium Intellectual Property Rights").
- 29 -
(b) The execution and delivery of this Agreement and consummation of the
Merger will not result in the breach of, or create on behalf of any third party
the right to terminate or modify, any license, sublicense or other agreement to
which Millennium or any of its Subsidiaries is a party and which relates to the
Millennium Intellectual Property Rights, where the breach, termination or
modification, individually or in the aggregate with every other such breach,
termination or modification, would be material to Millennium and its
Subsidiaries taken as a whole.
(c) To the knowledge of Millennium, (i) all patents, including all patent
term extensions and supplementary protection certificates, registered
trademarks, registered service marks and copyrights included in the Millennium
Intellectual Property Rights under which Millennium or any of its Subsidiaries
holds any rights and which are material to the business of Millennium and its
Subsidiaries, taken as a whole, are valid and subsisting, and (ii) except as
indicated on the Millennium Disclosure Schedule as being abandoned or withdrawn,
all applications for such patents, trademarks, service marks and copyrights are
subsisting and were filed in good faith. To the knowledge of Millennium, no
other person or entity is infringing, violating or misappropriating any of the
Millennium Intellectual Property Rights.
(d) To the knowledge of Millennium, none of the activities or business
previously or currently conducted by Millennium or any of its Subsidiaries
relating to the Phase II Products or currently planned to be conducted by
Millennium or any of its Subsidiaries relating to the Phase II Products
infringes, violates or constitutes a misappropriation, in any material way, of
any Intellectual Property Rights of any other person or entity. Since January 1,
1995, neither Millennium nor any of its Subsidiaries has received any written
complaint, claim or notice alleging any such infringement, violation or
misappropriation, present or future.
(e) Millennium and its Subsidiaries have taken reasonable measures and
precautions to protect and maintain the confidentiality, secrecy and value of
all Millennium Intellectual Property Rights. To the knowledge of Millennium, no
current or former employee, officer, director, stockholder, consultant or
independent contractor has any right, claim or interest in or with respect to
any Millennium Intellectual Property Rights.
(f) Neither Millennium nor any of its Subsidiaries is a party to any
agreement under which, following the Closing, a third party would be entitled to
receive a license or any other right in or to Intellectual Property Rights of
COR or any of COR's Affiliates (other than Millennium and its Subsidiaries) or
which, following the Closing, would restrict or limit the business or operations
of COR or any of its Affiliates (other than Millennium and its Subsidiaries),
other than any license, right, restriction or limitation which would not,
individually or in the aggregate, have a Millennium Material Adverse Effect.
Section 4.11 Agreements, Contracts and Commitments.
-------------------------------------
(a) Neither Millennium nor any of its Subsidiaries nor, to Millennium's
knowledge, any other party to any contract or agreement required to be filed by
Millennium with the SEC under Item 601 of Regulation S-K or which it would be
required to file if it were required to file an Annual Report on Form 10-K on
the date of this Agreement (a "Millennium Material Contract") is in material
violation of or in material default under (nor does there exist
- 30 -
any condition which, upon the passage of time or the giving of notice or both,
would cause such a violation of or default under) any Millennium Material
Contract. Each Millennium Material Contract is in full force and effect and is
enforceable against Millennium (and, to the knowledge of Millennium, against the
other parties thereto) in accordance with its terms, subject to the Bankruptcy
and Equity Exception.
(b) To Millennium's knowledge, neither Millennium nor any of its
Subsidiaries is a party to or bound by any contract or agreement that includes
any non-competition, non-solicitation, standstill or similar restrictions or
undertakings that would preclude COR or any of its Affiliates from engaging in
any current activities of COR or such Affiliates or any planned activities of
COR or such Affiliates that COR has disclosed in the COR SEC Reports or
otherwise disclosed to Millennium in writing, other than those that would not
have a Millennium Material Adverse Effect.
Section 4.12 Product Liability. No product liability claims have been
-----------------
asserted in a writing given to Millennium or any of its Subsidiaries or, to the
knowledge of Millennium, threatened against Millennium or any of its
Subsidiaries relating to products or product candidates developed, tested,
manufactured, marketed, distributed or sold by Millennium or any of its
Subsidiaries.
Section 4.13 Environmental Matters. Except as disclosed in the Millennium
---------------------
SEC Reports filed prior to the date hereof and except for such matters that,
individually or in the aggregate, are not reasonably likely to have a Millennium
Material Adverse Effect: (i) Millennium and its Subsidiaries have complied with
and are in compliance with all applicable Environmental Laws; (ii) the
properties currently owned or operated by Millennium or any of its Subsidiaries
(including soils, groundwater, surface water, buildings or other structures) are
not contaminated with any Hazardous Substances; (iii) the properties formerly
owned or operated by Millennium or any of its Subsidiaries were not contaminated
with Hazardous Substances during or, to the knowledge of Millennium, before the
period of ownership or operation by Millennium or any of its Subsidiaries; (iv)
neither Millennium nor its Subsidiaries have received written notice that they
are subject to liability for any Hazardous Substance disposal or contamination
on the property of any third party and, to Millennium's knowledge, neither
Millennium nor any of its Subsidiaries is subject to any such liability; (v)
neither Millennium nor any of its Subsidiaries have released any Hazardous
Substance into the environment in violation of applicable Environmental Laws;
(vi) neither Millennium nor any of its Subsidiaries has received any written
notice, demand, letter, claim or request for information alleging that
Millennium or any of its Subsidiaries may be in violation of, liable under or
have obligations under any Environmental Law; and (vii) neither Millennium nor
any of its Subsidiaries is subject to any orders, decrees, injunctions or other
arrangements with any Governmental Entity, or is subject to any indemnity or
other agreement with any third party relating to liability or obligation under
any Environmental Law or relating to Hazardous Substances. This Section 4.13
shall be the exclusive section in this Agreement containing representations and
warranties of Millennium concerning environmental matters.
Section 4.14 Employee Benefits Plans.
-----------------------
- 31 -
(a) Each material employee benefit plan (as defined in Section 3(3) of
ERISA) and all bonus, stock option, stock purchase, incentive, deferred
compensation, supplemental retirement, severance and other similar employee
benefit plans, and all unexpired severance agreements, written or otherwise, for
the benefit of, or relating to, any current or former employee of Millennium or
any of its Subsidiaries are referred to as the "Millennium Employee Plans". Each
Millennium Employee Benefit Plan has been administered in all material respects
in accordance with its terms and each of Millennium, its Subsidiaries and each
of their ERISA Affiliates has in all material respects met its obligations with
respect to each Millennium Employee Plan and has made all required contributions
thereto. Millennium, its Subsidiaries, each ERISA Affiliate and each Millennium
Employee Plan are in compliance in all material respects with the currently
applicable provisions of ERISA and the Code and the regulations thereunder
(including Section 4980B of the Code, Subtitle K, Chapter 100 of the Code and
Sections 601 through 608 and Section 701 et seq. of ERISA). All filings and
reports as to each Millennium Employee Plan required to have been submitted to
the IRS or to the United States Department of Labor have been duly submitted. No
Millennium Employee Plan has assets that include securities issued by Millennium
or any ERISA Affiliate. Each Millennium Employee Plan which is required to
satisfy Section 401(k)(3) or Section 401(m)(2) of the Code has been tested for
compliance with, and satisfies the requirements of Section 401(k)(3) and Section
401(m)(2) of the Code for each plan year ending prior to the Closing Date.
(b) With respect to the Millennium Employee Plans, there are no funded
benefit obligations for which contributions have not been made or properly
accrued and there are no material unfunded benefit obligations which have not
been accounted for by reserves, or otherwise properly footnoted in accordance
with generally accepted accounting principles, on the Millennium Balance Sheet.
(c) Neither Millennium, any Subsidiary of Millennium nor any ERISA
Affiliate has (i) ever maintained an Millennium Employee Plan which was subject
to Title IV of ERISA or Section 412 of the Code or (ii) ever been obligated to
contribute to a multiemployer plan (as defined in Section 4001(a)(3) of ERISA).
(d) Each Millennium Employee Plan intended to be qualified under Section
401(a) of the Code has either obtained from the IRS a favorable determination
letter as to its qualified status under the Code, including all amendments to
the Code effected by the Tax Reform Act of 1986 and subsequent legislation, or
has applied (or has time remaining in which to apply) to the IRS for such a
determination letter prior to the expiration of the requisite period under
applicable Treasury Regulations or IRS pronouncements in which to apply for such
determination letter and to make any amendments necessary to obtain a favorable
determination or has been established under a standardized prototype plan for
which an IRS opinion letter has been obtained by the plan sponsor and is valid
as to the adopting employer. Millennium has furnished or made available to COR a
true and complete copy of the most recent IRS determination or opinion with
respect to each such Millennium Employee Plan and, to the knowledge of
Millennium, nothing has occurred since the inception of each such Millennium
Employee Plan which could reasonably be expected to cause the loss of the
tax-qualified status of any Millennium Employee Plan subject to Section 401(a)
of the Code.
- 32 -
(e) None of the Millennium Employee Plans promises or provides retiree
medical or other retiree welfare benefits to any person, except as required by
applicable law.
Section 4.15 Preclinical Testing and Clinical Trials. The Millennium
---------------------------------------
Disclosure Schedule sets forth all human clinical trials conducted prior to the
date of this Agreement by Millennium or any of its Subsidiaries, on behalf of
Millennium or any of its Subsidiaries, or in which Millennium or any of its
Subsidiaries has participated, with respect to the Phase II Products (including
any such trials which are still pending). The human clinical trials, animal
studies and other preclinical tests relating to the Phase II Products conducted
by Millennium or any of its Subsidiaries or in which Millennium or any of its
Subsidiaries has participated, and such studies and tests conducted on behalf of
Millennium or any of its Subsidiaries, were and, if still pending, are being
conducted in accordance with (A) experimental protocols, informed consents,
procedures and controls generally used by qualified experts in the preclinical
or clinical study of products comparable to the Phase II Products, and (B) all
applicable laws and regulations, including but not limited to, 21 CFR part 50
(informed consent), part 56 (institutional review boards), part 58 (good
laboratory practices), part 812 (investigational device exemptions), and all
other applicable laws and regulations, except for any noncompliances which,
individually or in the aggregate, are not reasonably likely to have a Millennium
Material Adverse Effect. None of Millennium, its Subsidiaries or the contract
research organization overseeing or assisting Millennium in administering any
clinical or preclinical trial or investigator-sponsored trials on behalf of
Millennium or its Subsidiaries has received any notices or correspondence from
the FDA or any other governmental agency, and no any agent or representative of
Millennium or any of its Subsidiaries has received any written notices or
correspondence from the FDA or any other governmental agency, requiring the
delay, termination, suspension or modification (other than such modifications as
are normal in the regulatory process) of any animal studies, preclinical tests
or clinical trials conducted by or on behalf of Millennium or any of its
Subsidiaries relating to the Phase II Products or in which Millennium or any of
its Subsidiaries has participated relating to the Phase II Products. No clinical
investigator acting for Millennium or any of its Subsidiaries with respect to
the Phase II Products has been or is now, or is threatened to become, the
subject of any disbarment or disqualification proceedings by any regulatory
agency.
Section 4.16 Certain Regulatory Matters. Millennium and its Subsidiaries
--------------------------
have, with respect to the Phase II Products, filed with the FDA and all
applicable state, local and foreign regulatory bodies for and received approval
of all material registrations, applications, licenses, requests for exemptions,
permits and other regulatory authorizations necessary to conduct the business of
Millennium and its Subsidiaries as currently conducted, except for any such
failures to file or receive approval which, individually or in the aggregate,
are not reasonably likely to have a Millennium Material Adverse Effect.
Millennium and its Subsidiaries and, to Millennium's knowledge, any third party
which is a manufacturer for Millennium or its Subsidiaries, with respect to the
Phase II Products, are in compliance with all such registrations, applications,
licenses, requests for exemptions, permits and other regulatory authorizations,
except for any such noncompliances which, individually or in the aggregate, are
not reasonably likely to have a Millennium Material Adverse Effect. Each of
Millennium, its Subsidiaries and, to Millennium's knowledge, any such third
party manufacturer, with respect to the Phase II Products, is in compliance with
all FDA, state, local and foreign rules, regulations, guidelines and policies,
including, but not limited to, material FDA, state, local and foreign rules,
- 33 -
regulations and policies relating to GMP and GLP, as applicable, except for any
such noncompliances which, individually or in the aggregate, are not reasonably
likely to have a Millennium Material Adverse Effect; and to the knowledge of
Millennium, no party granting any such registration, application, license,
request for exemption, permit or other authorization is considering limiting,
suspending or revoking the same except for any such limitations, suspensions or
revocations which, individually or in the aggregate, are not reasonably likely
to have a Millennium Material Adverse Effect.
Section 4.17 Registration Statement; Proxy Statement/Prospectus. The
--------------------------------------------------
information in the Registration Statement (except for information related to COR
or supplied in writing by COR for inclusion in the Registration Statement, as to
which Millennium makes no representation and which shall not constitute part of
a Millennium SEC Report for purposes of this Agreement) shall not at the time
the Registration Statement is declared effective by the SEC contain any untrue
statement of a material fact or omit to state any material fact required to be
stated in the Registration Statement or necessary in order to make the
statements in the Registration Statement not misleading. The information (except
for information related to COR or to be supplied in writing by COR for inclusion
in the Joint Proxy Statement, as to which Millennium makes no representation) in
the Joint Proxy Statement shall not, on the date the Joint Proxy Statement is
first mailed to stockholders of Millennium or COR, at the time of the Millennium
Meeting or the COR Meeting or at the Effective Time, contain any statement
which, at such time and in light of the circumstances under which it shall be
made, is false or misleading with respect to any material fact, or omit to state
any material fact necessary in order to make the statements made in the Joint
Proxy Statement not false or misleading; or omit to state any material fact
necessary to correct any statement in any earlier communication with respect to
the solicitation of proxies for the Millennium Meeting or the COR Meeting which
has become false or misleading. If at any time prior to the Effective Time any
event relating to Millennium or any of its Affiliates, officers or directors
should be discovered by Millennium which should be set forth in an amendment to
the Registration Statement or a supplement to the Joint Proxy Statement,
Millennium shall promptly inform COR.
Section 4.18 Operations of Sub. Sub was formed on November 30, 2001 solely
-----------------
for the purpose of engaging in the transactions contemplated by this Agreement,
has engaged in no other business activities and has conducted its operations
only as contemplated by this Agreement.
Section 4.19 Opinion of Financial Advisor. The financial advisor of
----------------------------
Millennium, Morgan Stanley & Co. Incorporated ("Morgan Stanley"), has delivered
to Millennium an opinion dated the date of this Agreement, to the effect that,
as of such date, the Exchange Ratio is fair from a financial point of view to
Millennium. A signed copy of such opinion will be delivered to COR as promptly
as practicable following the execution and delivery of this Agreement.
Section 4.20 Broker's Fees. Neither Millennium nor any of its Subsidiaries
-------------
nor any of their respective officers or directors has employed any broker,
finder, investment banker or financial advisor or incurred any liability for any
broker's fees, commissions or finder's fees in connection with any of the
transactions contemplated by this Agreement, except that Millennium has engaged,
and will pay a fee to, Morgan Stanley in accordance with the terms of a letter
agreement between Millennium and Morgan Stanley dated November 20, 2001, a true,
complete and correct copy of which has been delivered to COR.
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ARTICLE V
CONDUCT OF BUSINESS
Section 5.01 Covenants of COR. During the period from the date of this
----------------
Agreement and continuing until the earlier of the termination of this Agreement
or the Effective Time, except as expressly contemplated by this Agreement or set
forth in the COR Disclosure Schedule, COR agrees as to itself and its
Subsidiaries (except to the extent that Millennium shall otherwise consent in
writing) to carry on its business in the usual, regular and ordinary course in
substantially the same manner as previously conducted, to pay its debts and
Taxes and perform other obligations when due subject to good faith disputes over
such debts, Taxes or obligations, and, to the extent consistent with such
business, use commercially reasonable efforts consistent with past practices and
policies to preserve substantially intact its present business organization,
keep available the services of its present officers and key employees and
preserve its relationships with customers, strategic partners, suppliers,
distributors, and others having material business dealings with it. Except as
contemplated by this Agreement or set forth in the COR Disclosure Schedule, COR
shall not (and shall not permit any of its Subsidiaries to), without the prior
written consent of Millennium:
(a) Change the nature of its business operations such that COR is no
longer primarily engaged in the biopharmaceutical business;
(b) Other than with respect to the termination of the ESPP (as defined
in Section 6.11(d) below) and except as provided by their terms as in effect on
the date of this Agreement (i) accelerate, amend or change the period of
exercisability of any outstanding option or restricted stock granted under any
COR Stock Plan, or the terms of the conversion rights of any COR Convertible
Notes, or (ii) authorize or make cash payments in exchange for any COR
Convertible Note or any option granted under any of such plans, except as
required by the terms of the COR Convertible Notes or any such plans or any
related agreements in effect as of the date of this Agreement;
(c) Declare, set aside or pay any dividends on or make any other
distributions (whether in cash, securities or other property) in respect of any
of its capital stock, or split, combine or reclassify any of its capital stock
or issue or authorize the issuance of any other securities in respect of, in
lieu of or in substitution of shares of its capital stock or any of its other
securities, or purchase, redeem or otherwise acquire, directly or indirectly,
any shares of its capital stock or any of its other securities or any rights,
warrants or options to acquire any such shares or other securities;
(d) Issue, deliver or sell, or authorize or propose the issuance,
delivery or sale of, any shares of its capital stock or securities convertible
into shares of its capital stock, or subscriptions, rights, warrants or options
to acquire, or other agreements or commitments of any character obligating it to
issue any such shares or other convertible securities, other than the issuance
of shares of COR Common Stock pursuant to the exercise of the COR Convertible
Notes or COR Stock Options outstanding on the date of this Agreement, in
accordance with the terms set forth in the instruments pursuant to which they
are issuable as of the date of this Agreement;
- 35 -
(e) Amend or accelerate the payment, right to payment or vesting of
any compensation or benefits (including equity-based compensation or benefits),
except to the extent required by the terms of agreements, plans or arrangements
as in existence as of the date of this Agreement providing for such compensation
or benefits, or fail to take any action under any of the COR Stock Plans which
is permitted or required to be taken thereunder in order to prevent the
acceleration of any such payment, right to payment or vesting of compensation or
benefits;
(f) Acquire or agree to acquire by merging or consolidating with, or
by purchasing a substantial equity interest in or substantial portion of the
assets of, or by any other manner, any business or any corporation, partnership
or other business organization or division, or otherwise acquire or agree to
acquire any assets (other than inventory and other items in the ordinary course
of business and consistent with past practice);
(g) Other than sales of inventory in the ordinary course of business
and disposition of unused plant and equipment assets consistent with past
practice, sell, lease or otherwise dispose of any of its properties or assets;
(h) Except as required by applicable law, (i) other than increases in
compensation for employees (but not including officers at the vice-president
level and above) in the ordinary course of business consistent with past
practice, or as may be contractually required by any employee agreement or COR
Employee Plan listed on the COR Disclosure Schedule and in effect on the date of
this Agreement, increase or agree to increase the compensation payable or to
become payable to any directors, officers or employees (provided, however, that
with respect to this clause (h)(i), Millennium's prior written consent shall not
be unreasonably withheld), (ii) other than as may be contractually required by
any employee agreement or COR Employee Plan listed on the COR Disclosure
Schedule and in effect on the date of this Agreement, grant any severance or
termination pay to, or enter into any employment or severance agreements with,
any directors, officers or employees, (iii) enter into any collective bargaining
agreement, (iv) establish, adopt, enter into or amend any bonus, profit sharing,
thrift, compensation, stock option, restricted stock, pension, retirement,
deferred compensation, employment, termination or severance or other plan, trust
or fund for the benefit of any directors, officers or employees or (v) forgive
any indebtedness of any directors, officers or employees to COR or any of its
Subsidiaries;
(i) Amend or propose to amend its charter or by-laws, except as
required by this Agreement;
(j) (A) Incur any indebtedness for borrowed money (not including trade
payables incurred in the ordinary course of business consistent with past
practice), (B) issue, sell or amend any debt securities or other rights to
acquire any debt securities of COR or any of its Subsidiaries, guarantee any
debt securities of another person, enter into any "keep well" or other agreement
to maintain any financial statement condition of another person or enter into
any arrangement having the economic effect of any of the foregoing, (C) make any
loans, advances (other than routine advances to employees in the ordinary course
of business) or capital contributions to, or investment in, any other person,
other than COR or any of its direct or indirect wholly owned Subsidiaries or (D)
except in the ordinary course of business consistent with past practice, enter
into any hedging agreement or other financial agreement or arrangement
- 36 -
designed to protect COR or its Subsidiaries against fluctuations in commodities
prices or exchange rates;
(k) Initiate, compromise, or settle any litigation or arbitration
proceeding required to be disclosed in the COR Disclosure Schedule or which
would have been required to be disclosed if in existence on the date of this
Agreement;
(l) Other than in the ordinary course of business consistent with past
practice, enter into, modify, amend or terminate in any material respect any
contract, license or other agreement that is material to COR and its
Subsidiaries taken as a whole or which is otherwise required to be disclosed
under Section 3.13(b) above or which would have been required to be so disclosed
if in existence on the date of this Agreement, or other than in the ordinary
course of business consistent with past practice waive, release or assign any
material rights or claims under any such contract, license or agreement;
(m) Make or rescind any material Tax election, settle or compromise
any material Tax liability or amend any material Tax return in any material
respect;
(n) Materially change its methods of accounting as in effect at
September 30, 2001 except as required by generally accepted accounting
principles;
(o) Make or commit to make any capital expenditures that in the
aggregate exceed the capital budget furnished by COR to Millennium in writing
prior to the date of this Agreement;
(p) License any Intellectual Property Rights that relate to the COR
Products to or from any third party, other than shrink-wrapped off-the-shelf
software licenses;
(q) Close any material facility or office;
(r) Make new investments (or renew existing investments) in (i) debt
securities or other instruments maturing more than 180 days after the date of
investment, or (ii) equity securities of any entity other than wholly-owned COR
Subsidiaries;
(s) Initiate any new clinical trials or any new phase of any ongoing
clinical trials or approve or participate in any investigator-sponsored trial
that COR becomes aware of or file any new drug application or biologics license
application with the FDA or any similar foreign regulatory body with respect to
any product under development (provided, that with respect to this clause (s),
Millennium's prior written consent shall not be unreasonably withheld);
(t) Knowingly take any action that would reasonably be expected to
materially delay, materially impede or materially restrict the consummation of
the transactions contemplated hereby;
(u) Adopt or implement any stockholder rights plan or, except as
provided in Section 3.27, alter or further amend or redeem the COR Rights Plan
or the COR Rights;
- 37 -
(v) Take any action to render Section 203 of the DGCL or any other
state takeover statute or similar statute or regulation, or Article SIXTH of the
COR Certificate of Incorporation, inapplicable to any person in respect of any
Acquisition Proposal (as defined in Section 6.01 below);
(w) [Intentionally Omitted];
(x) Take any action (including action otherwise permitted in this
Section 5.01) that would prevent or impede the Merger from qualifying as a
"reorganization" within the meaning of Section 368(a) of the Code; or
(y) authorize any of, or commit or agree, in writing or otherwise, to
take any of, the foregoing actions or any action which would prevent the
satisfaction of any conditions in Article VII hereof.
Section 5.02 Covenants of Millennium. During the period from the date of
-----------------------
this Agreement and continuing until the earlier of the termination of this
Agreement or the Effective Time, Millennium shall not, without the written
consent of COR:
(a) change the nature of its business operations such that Millennium
is no longer primarily engaged in the biopharmaceutical business;
(b) make any amendment to Millennium's Certificate of Incorporation
that adversely affects the Millennium Common Stock;
(c) make any material changes to the Certificate of Incorporation of
Sub;
(d) declare, set aside or pay any dividends on or make any other
distributions (whether in cash, securities or other property) in respect of any
of its capital stock (other than a stock split in the form of a stock dividend),
or combine or reclassify any of its capital stock or issue or authorize the
issuance of any other securities in respect of, in lieu of or in substitution of
shares of its capital stock (it being understood that the foregoing does not
restrict the grant, issuance, exercise or conversion of options or warrants to
purchase, or securities convertible into, capital stock);
(e) take any action that is material and adverse to the stockholders
of COR as prospective stockholders of Millennium and that affects COR
stockholders disproportionately as compared to the current stockholders of
Millennium;
(f) issue any shares of its capital stock or securities convertible
into shares of its capital stock, other than (i) issuances of capital stock
pursuant to the terms of agreements and other instruments as in effect on the
date of this Agreement; (ii) issuances of options and shares of capital stock to
its and its Subsidiaries' employees and consultants; and (iii) subject to
Section 5.02(g), issuances of up to 20,000,000 shares of Millennium Common Stock
(or securities exercisable for or convertible into the same) as Millennium may
determine in its discretion (subject to adjustment for stock dividends, stock
splits, combinations or other recapitalizations affecting such shares);
- 38 -
(g) knowingly take any action that would reasonably be expected to
materially delay, materially impede or materially restrict the consummation of
the transactions contemplated hereby;
(h) take any action (including action otherwise permitted in this
Section 5.02) that would prevent or impede the Merger from qualifying as a
"reorganization" within the meaning of Section 368(a) of the Code
(i) permit or cause any of its Subsidiaries to do any of the foregoing
or agree or commit to any of the foregoing, except that its Subsidiaries
shall not be so precluded with respect to the actions in clauses (d) and
(f) with respect to such Subsidiaries' capital stock or securities
convertible solely into its capital stock; or
(j) agree in writing or otherwise to take any of the foregoing
actions.
Section 5.03 Cooperation. Subject to compliance with applicable law, from
-----------
the date hereof until the earlier of the Effective Time or the termination of
this Agreement pursuant to its terms, each of COR and Millennium, and each of
their respective Subsidiaries, shall make its officers available to confer on a
regular and frequent basis with one or more representatives of any other party
to this Agreement to report on the general status of ongoing operations and
shall promptly provide such other party or its counsel with copies of all
filings made by such party with any Governmental Entity in connection with this
Agreement, the Merger and the transactions contemplated hereby.
Section 5.04 Confidentiality. The parties acknowledge that Millennium and
---------------
COR have previously executed a Mutual Confidentiality Agreement dated as of
August 30, 2001 (the "Confidentiality Agreement"), which Confidentiality
Agreement will continue in full force and effect in accordance with its terms,
except as expressly modified herein.
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.01 No Solicitation.
---------------
(a) From and after the date of this Agreement until the earlier of the
Effective Time or termination of this Agreement pursuant to its terms, COR shall
not, nor shall it cause, authorize or permit (provided that with respect to its
non-officer employees, the foregoing word "permit" shall be deemed to mean
"knowingly permit") any of its Subsidiaries or Affiliates or any of its or their
directors, employees, officers, investment bankers, attorneys, accountants or
other advisors or representatives (collectively, "Representatives") to, directly
or indirectly: (i) solicit, initiate, or encourage any inquiries or proposals
that constitute, or could reasonably be expected to lead to, a proposal or offer
for a merger, consolidation, business combination, sale of substantial assets,
tender or exchange offer, share exchange, sale of shares of capital stock or
similar transaction involving COR or any of its Subsidiaries, other than the
transactions with Millennium contemplated by this Agreement and issuances of
capital stock expressly permitted by Section 5.01(d) above (any of the foregoing
inquiries or proposals being referred to in this Agreement as an "Acquisition
Proposal"; provided, however, that an inquiry or proposal shall
- 39 -
not be deemed to be an Acquisition Proposal if (W) it is unsolicited by COR or
any of its Subsidiaries or Affiliates or any of its or their Representatives,
(X) it involves less than 1% of the outstanding shares of COR Common Stock, (Y)
it is received by a non-officer employee of COR or an individual separately
retained as a sales representative of COR acting in his capacity as such, and
(Z) COR upon becoming aware of such inquiry or proposal, or such person
receiving such inquiry or proposal immediately upon becoming aware that such
inquiry or proposal is otherwise subject to this Section 6.01, notifies the
maker of such inquiry or proposal that such inquiry or proposal, and any further
communications related thereto, are prohibited by the terms of this Section 6.01
and thereupon ceases any further communications in violation of this Section
6.01), (ii) engage in negotiations or discussions concerning, or provide any
non-public information to any person or entity relating to, any Acquisition
Proposal, (iii) subject to applicable law and the satisfaction of the conditions
set forth in the proviso clause of the second sentence of Section 6.05(a),
withdraw or modify or propose to withdraw or modify the approval of the Merger
by the COR Board of Directors or the recommendation by the COR Board of
Directors of the adoption of this Agreement and the approval of the Merger, (iv)
(A) amend or grant any waiver or release under any standstill or similar
agreement with respect to any COR Common Stock, (B) amend or grant any waiver or
release or approve any transaction or redeem rights under the COR Rights Plan
(except as provided for under Section 3.27), (C) approve any transaction under
Section 203 of the DGCL or under Article SIXTH of COR's Certificate of
Incorporation, or (D) approve of any person's becoming an "interested
stockholder" under Section 203 of the DGCL or under Article SIXTH of COR's
Certificate of Incorporation, (v) approve, agree to or recommend any Acquisition
Proposal, or (vi) enter into any agreement, letter of intent or similar document
or contract relating to any Acquisition Proposal other than a confidentiality
agreement referred to in clause (A)(2) below; provided, however, that so long as
COR and its Subsidiaries have not breached this Section 6.01 in a manner that
resulted in its receipt of the unsolicited bona fide written Acquisition
Proposal referred to in the immediately following clause (A), or otherwise
breached this Section 6.01 in any material respect, nothing contained in this
Agreement shall prevent COR or its Board of Directors, from:
(A) furnishing non-public information to, or entering into
discussions or negotiations with, any person or entity in connection with an
unsolicited bona fide written Acquisition Proposal that would result in the
acquisition of all of the combined voting power of the shares of COR then
outstanding or all or substantially all of the consolidated assets of COR and
its Subsidiaries by such person or entity, if and only to the extent that:
(1) the Board of Directors of COR believes in good faith
(after consultation with its financial advisor) that such Acquisition Proposal
is reasonably capable of being completed on the terms proposed and would, if
consummated on such terms, result in a transaction more favorable than the
transaction contemplated by this Agreement (or any counterproposal by
Millennium), after taking into account all relevant factors, including the risk
of non-consummation of such other Acquisition Proposal or counterproposal (any
such more favorable Acquisition Proposal being referred to in this Agreement as
a "Superior Proposal") and COR's Board of Directors determines in good faith
after consultation with outside legal counsel that such action is necessary for
such Board of Directors to comply with its fiduciary duties to stockholders
under applicable law;
- 40 -
(2) prior to furnishing such non-public information to, or
entering into discussions or negotiations with, such person or entity, such
Board of Directors receives from such person or entity an executed
confidentiality agreement with customary terms and provisions (which such
agreement shall not interfere with the ability of Millennium to make, and of COR
to accept, a counterproposal); and
(3) prior to furnishing such information or discussing or
negotiating a Superior Proposal with the person making such Superior Proposal,
COR provides Millennium with at least three business days' prior notice thereof;
or
(B) complying with Rule 14d-9 and 14e-2 promulgated under the
Exchange Act with regard to an Acquisition Proposal.
(b) COR will, and will cause its Representatives to, immediately cease
any and all discussions, negotiations or activities prohibited under Section
6.01(a) existing as of the date of this Agreement as to any Acquisition Proposal
with any parties conducted heretofore and will use commercially reasonable
efforts to obtain the return of any confidential information furnished to any
such parties.
(c) COR shall notify Millennium promptly (and in no event more than 24
hours) after receipt by COR (directly or through its advisors) of any
Acquisition Proposal or any request for nonpublic information in connection with
an Acquisition Proposal or for access to the properties, books or records of COR
by any person or entity that informs COR that it is considering making, or has
made, an Acquisition Proposal. Such notice shall be made orally and in writing
and shall indicate in detail the identity of the offeror and the material terms
and conditions of such proposal, inquiry or contact. COR shall continue to keep
Millennium informed, on a prompt and current basis, of the status of any such
discussions or negotiations and the terms being discussed or negotiated. Nothing
in this Section 6.01(c) shall be deemed to modify COR's obligations under
Section 6.01(a) above.
(d) Nothing in this Section 6.01 shall (i) permit COR to terminate
this Agreement (except as specifically provided in Section 8.01 hereof), (ii)
permit COR to enter into any agreement with respect to an Acquisition Proposal
during the term of this Agreement (it being agreed by COR that during the term
of this Agreement, COR shall not enter into any agreement with any person that
provides for, or in any way facilitates, an Acquisition Proposal (other than (i)
a confidentiality agreement of the type referred to in Section 6.01(a) above or
(ii) as expressly set forth in Section 6.01(e))) or (iii) affect any other
obligation of COR under this Agreement.
(e) Notwithstanding the foregoing provisions of this Section 6.01, if
the conditions of subparagraphs (A)(1), (2) and (3) of Section 6.01(a) have been
satisfied and COR then has the right to terminate this Agreement pursuant to
Section 8.01(g), then COR may, in connection with the termination by it of this
Agreement pursuant to Section 8.01(g), take any of the actions described in
clauses (iii), (iv), (v) and (vi) of Section 6.01(a) contemporaneously with the
termination of this Agreement pursuant to Section 8.01(g) and the payment to
Millennium of the fee described in Section 8.03(c).
- 41 -
Section 6.02 Proxy Statement/Prospectus; Registration Statement.
--------------------------------------------------
(a) As promptly as practical after the execution of this Agreement,
Millennium and COR shall prepare and file with the SEC the Joint Proxy
Statement, and Millennium, in cooperation with COR, shall prepare and file with
the SEC the Registration Statement, in which the Joint Proxy Statement will be
included as a prospectus. Millennium and COR shall respectively use commercially
reasonable efforts to file with the SEC the Joint Proxy Statement within 45 days
of the date hereof. Millennium and COR shall respectively use commercially
reasonable efforts to cause the Registration Statement to become effective under
the Securities Act and any applicable state securities laws as soon after such
filing as practicable. Each of Millennium and COR will respond to any comments
of the SEC and will use its respective commercially reasonable efforts to have
the Joint Proxy Statement cleared by the SEC and the Registration Statement
declared effective under the Securities Act as promptly as practicable after
such filings and will cause the Joint Proxy Statement and the prospectus
contained with the Registration Statement to be mailed to its stockholders at
the earliest practicable time after both the Joint Proxy Statement is cleared by
the SEC and the Registration Statement is declared effective under the
Securities Act. Each of Millennium and COR will notify the other promptly upon
the receipt of any comments from the SEC or its staff or any other government
officials and of any request by the SEC or its staff or any other government
officials for amendments or supplements to the Registration Statement, the Joint
Proxy Statement or any filing pursuant to Section 6.02(b) or for additional
information and will supply the other with copies of all correspondence between
such party or any of its Representatives, on the one hand, and the SEC, or its
staff or any other government officials, on the other hand, with respect to the
Registration Statement, the Joint Proxy Statement, the Merger or any filing
pursuant to Section 6.02(b). Each of Millennium and COR will cause all documents
that it is responsible for filing with the SEC or other regulatory authorities
under this Section 6.02 to comply in all material respects with all applicable
requirements of law and the rules and regulations promulgated thereunder.
Whenever any event occurs which is required to be set forth in an amendment or
supplement to the Joint Proxy Statement, the Registration Statement or any
filing pursuant to Section 6.02(b), Millennium or COR, as the case may be, will
promptly inform the other of such occurrence and cooperate in filing with the
SEC or its staff or any other government officials, and/or mailing to
stockholders of Millennium and/or COR, such amendment or supplement.
(b) Each of Millennium and COR shall make all filings it is required
to make with respect to the Merger under the Securities Act, the Exchange Act,
applicable state blue sky laws and the rules and regulations thereunder.
Section 6.03 Nasdaq Quotation. Each of Millennium and COR agrees to use
----------------
commercially reasonable efforts to continue the quotation of its common stock on
the Nasdaq National Market until the first to occur of the Effective Time or the
termination of this Agreement.
Section 6.04 Access to Information. Upon reasonable notice COR and Millennium
---------------------
shall (and shall cause their respective Subsidiaries to) afford to each other's
Representatives, reasonable access, during normal business hours (in a manner
that does not unreasonably disrupt or interfere with business operations) during
the period prior to the Effective Time, to all its
- 42 -
personnel, properties, books, contracts, commitments and records and, during
such period, COR and Millennium shall (and shall cause their respective
Subsidiaries to) furnish promptly to the other (a) a copy of each report,
schedule, registration statement and other document filed or received by it
during such period pursuant to the requirements of federal securities laws and
(b) all other information concerning its business, properties and personnel as
the other may reasonably request, including the results of any pre-clinical or
clinical trials. Unless otherwise required by law, Millennium and COR will hold
any such information which is nonpublic in confidence in accordance with the
Confidentiality Agreement. No information or knowledge obtained in any
investigation pursuant to this Section 6.04 or otherwise shall affect or be
deemed to modify any representation or warranty contained in this Agreement or
the conditions to the obligations of the parties to consummate the Merger.
Section 6.05 Stockholders Meetings.
---------------------
(a) COR, acting through its Board of Directors, shall, subject to and
in accordance with applicable law and its Certificate of Incorporation and
By-Laws, promptly and duly call, give notice of, convene and hold as soon as
practicable following the date on which the Registration Statement becomes
effective the COR Meeting for the purpose of voting to adopt this Agreement and
approve the Merger (the "COR Voting Proposal"). The Board of Directors of COR
shall (i) subject to applicable law, recommend approval and adoption of the COR
Voting Proposal by the stockholders of COR and include in the Joint Proxy
Statement such recommendation (ii) not withdraw or modify such recommendation,
and (iii) take all reasonable and lawful action to solicit and obtain such
approval; provided, however, that the Board of Directors of COR may withdraw or
modify such recommendation if (but only if) such Board of Directors after
consultation with its outside legal counsel determines that it is required, in
order to comply with its fiduciary duties to stockholders under applicable law,
to withdraw or modify its recommendation as to the adoption of this Agreement
and the approval of the Merger.
(b) Millennium, acting through its Board of Directors, shall, subject
to and in accordance with applicable law and its Certificate of Incorporation
and By-Laws, promptly and duly call, give notice of, convene and hold as soon as
practicable following the date on which the Registration Statement becomes
effective, the Millennium Meeting for the purpose of voting to approve the
issuance of the shares of Millennium Common Stock to be issued in the Merger
(the "Millennium Voting Proposal"). The Board of Directors of Millennium shall
(i) recommend approval of the Millennium Voting Proposal and include in the
Joint Proxy Statement such recommendation (ii) not withdraw or modify such
recommendation, and (iii) take all reasonable and lawful action to solicit and
obtain such approval; provided that Millennium may withdraw or modify such
recommendation if the Board of Directors after consultation with its outside
legal counsel determines that it is required to do so to comply with its
fiduciary duties to stockholders under applicable law. Millennium, as sole
stockholder of Sub, shall approve this Agreement.
(c) The persons listed on Schedule 6.05(c) have each executed and
----------------
delivered a COR Voting Agreement to Millennium and Sub concurrently with the
signing of this Agreement.
(d) The persons listed on Schedule 6.05(d) have each executed and
----------------
delivered a Millennium Voting Agreement to COR concurrently with the signing of
this Agreement.
- 43 -
(e) Each of COR and Millennium shall retain a proxy solicitation firm
reasonably acceptable to the other party for assistance in connection with the
solicitation of proxies for the COR Meeting and the Millennium Meeting,
respectively.
(f) Unless otherwise mutually agreed by Millennium and COR, Millennium
and COR shall coordinate and cooperate with respect to the timing of the
Stockholders Meetings contemplated by this Section 6.05 and shall use
commercially reasonable efforts to hold such meetings at the same time and on
the same date.
Section 6.06 Legal Conditions to Merger.
--------------------------
(a) Subject to the terms hereof, including Section 6.06(b), COR and
Millennium shall use their respective commercially reasonable efforts to take,
or cause to be taken, all appropriate action, and do, or cause to be done, all
things necessary and proper under applicable law to consummate and make
effective the Merger and the other transactions contemplated hereby as promptly
as practicable, including to (i) obtain from any Governmental Entity or any
other third party any consents, licenses, permits (including any re-issuances
thereof), waivers, approvals, authorizations, or orders required to be obtained
or made by COR or Millennium or any of their Subsidiaries in connection with the
authorization, execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby including the Merger, (ii) as promptly as
practicable, make all necessary filings, and thereafter make any other required
submissions, with respect to this Agreement and the Merger required under (A)
the Securities Act and the Exchange Act, and any other applicable federal or
state securities laws, (B) the HSR Act and any related governmental request
thereunder, and (C) any other applicable law and (iii) execute or deliver any
additional instruments necessary to consummate the transactions contemplated by,
and to fully carry out the purposes of, this Agreement. COR and Millennium shall
cooperate with each other in connection with the making of all such filings,
including providing copies of all such documents to the non-filing party and its
advisors prior to filing and, if requested, to accept all reasonable additions,
deletions or changes suggested in connection therewith. COR and Millennium shall
use their respective commercially reasonable efforts to furnish to each other
all information required for any application or other filing to be made pursuant
to the rules and regulations of any applicable law (including all information
required to be included in the Joint Proxy Statement and the Registration
Statement) in connection with the transactions contemplated by this Agreement.
For avoidance of doubt, Millennium and COR agree that if and to the extent the
requirements of Section 6.06(a) and Section 6.06(b) are not consistent with each
other, the requirements of Section 6.06(b) shall control.
(b) Subject to the terms hereof, Millennium and COR agree, and shall
cause each of their respective Subsidiaries, to cooperate and to use their
respective commercially reasonable efforts to obtain any government clearances
or approvals required for Closing under the HSR Act, the Sherman Act, as
amended, the Clayton Act, as amended, the Federal Trade Commission Act, as
amended, and any other federal, state or foreign law or, regulation or decree
designed to prohibit, restrict or regulate actions for the purpose or effect of
monopolization or restraint of trade (collectively "Antitrust Laws") and to
respond to any government requests for information under any Antitrust Law. The
parties hereto will consult and cooperate with one another, and consider in good
faith the views of one another, in connection with any analyses,
- 44 -
appearances, presentations, memoranda, briefs, arguments, opinions and proposals
made or submitted by or on behalf of any party hereto in connection with
proceedings under or relating to any Antitrust Law. Millennium shall be entitled
to direct any proceedings or negotiations with any Governmental Entity relating
to any of the foregoing, provided that it shall afford COR a reasonable
opportunity to participate therein. Notwithstanding anything to the contrary in
this Section 6.06, (A) neither Millennium nor any of its Subsidiaries shall be
required, except to the extent it determines to do so in its sole discretion, to
(i) divest, or grant to any third party any rights in, any of their respective
businesses, product lines or assets or (ii) take or agree to take any other
action, or agree to any limitation that is reasonably likely, individually or in
the aggregate, to have a Millennium Material Adverse Effect or an COR Material
Adverse Effect after the Effective Time, and (B) COR shall not be required,
except to the extent it determines to do so in its sole discretion, to divest,
or grant to any third party any rights in, Integrilin(R).
(c) Each of COR and Millennium shall give (or shall cause their
respective Subsidiaries to give) any notices to third parties, and use, and
cause their respective Subsidiaries to use, their commercially reasonable
efforts to obtain any third party consents related to or required in connection
with the Merger that are (A) necessary to consummate the transactions
contemplated hereby, (B) disclosed or required to be disclosed in the COR
Disclosure Schedule or the Millennium Disclosure Schedule, as the case may be,
or (C) required to prevent an COR Material Adverse Effect or a Millennium
Material Adverse Effect from occurring prior to or after the Effective Time.
Section 6.07 Public Disclosure. Except as required by law, (i) the press
-----------------
release announcing the execution of this Agreement shall be issued only in such
form as shall be mutually agreed upon by COR and Millennium and (ii) Millennium
and COR shall each use its commercially reasonable efforts to consult with the
other party before issuing any other press release or otherwise making any
public statement with respect to the Merger or this Agreement and shall not
issue any such press release or make any such public statement prior to using
such efforts.
Section 6.08 Tax-Free Reorganization. Millennium, Sub and COR shall each use
-----------------------
its commercially reasonable efforts to cause the Merger to be treated as a
reorganization within the meaning of Section 368(a) of the Code. The parties
hereto hereby adopt this Agreement as a plan of reorganization.
Section 6.09 Affiliate Agreements. Upon the execution of this Agreement, COR
--------------------
will provide Millennium with a list of those persons who may be deemed to be
"affiliates" of COR within the meaning of Rule 145 (each such person is referred
to as an "Affiliate") promulgated under the Securities Act ("Rule 145"). COR
shall provide Millennium such information and documents as Millennium shall
reasonably request for purposes of reviewing such list and shall notify
Millennium in writing regarding any change in the identity of its Affiliates
prior to the Closing Date. COR has delivered or caused to be delivered to
Millennium, prior to the execution of this Agreement, from each of its
Affiliates, an executed Affiliate Agreement, in substantially the form appended
hereto as Exhibit D (collectively, the "Affiliate Agreements"). Millennium shall
be entitled to place appropriate legends on the certificates evidencing any
Millennium Common Stock to be received by such Affiliates of COR pursuant to the
terms of this Agreement, and to issue appropriate stop transfer instructions to
the transfer agent for the
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Millennium Common Stock, consistent with the terms of the Affiliate Agreements;
provided that such legend shall be removed by delivery of a substitute
certificate without such legend under the circumstances described in the
Affiliate Agreements.
Section 6.10 Nasdaq Listing. Millennium shall use commercially reasonable
--------------
efforts to cause the shares of Millennium Common Stock to be issued in the
Merger, upon the exercise of COR Stock Options assumed in connection with the
Merger and upon the conversion of the COR Convertible Notes to be listed on the
Nasdaq National Market, subject to official notice of issuance, on or prior to
the Closing Date.
Section 6.11 Stock Plans.
-----------
(a) At the Effective Time, by virtue of the Merger and without any
action on the part of any holder of a COR Stock Option, the COR Stock Plans and
COR Stock Options shall be assumed by Millennium. At the Effective Time, each
COR Stock Option, whether vested or unvested, shall be deemed to constitute an
option or warrant to acquire, on the same terms and conditions as were
applicable under such COR Stock Option, the same number of shares of Millennium
Common Stock as the holder of such COR Stock Option would have been entitled to
receive pursuant to the Merger had such holder exercised such COR Stock Option
in full immediately prior to the Effective Time (rounded downward to the nearest
whole number), at a price per share (rounded upward to the nearest whole cent)
equal to (y) the aggregate exercise price for the shares of COR Common Stock
purchasable pursuant to such COR Stock Option immediately prior to the Effective
Time divided by (z) the number of full shares of Millennium Common Stock deemed
purchasable pursuant to such COR Stock Option in accordance with the foregoing.
At the request of Millennium, the Board of Directors of COR shall cooperate with
Millennium to take all necessary actions, pursuant to the COR Stock Plans and
the instruments evidencing the COR Stock Options, to provide for the conversion
of the COR Stock Options in accordance with this Section, and to provide that no
consent of the holders of the COR Stock Options is required in connection with
such conversion. Millennium shall use reasonable efforts to cause any assumed
COR Stock Options that qualify as "incentive stock options" as defined in
Section 422 of the Code immediately prior to the Effective Time to continue to
so qualify immediately after the Effective Time; provided, however, that
Millennium shall have no liability to a holder of any such options, or any other
party, if an assumed COR Stock Option (or any part thereof) does not qualify as
an incentive stock option for any reason.
(b) As soon as practicable after the Effective Time, Millennium shall
deliver to the participants in COR Stock Plans appropriate notice setting forth
such participants' rights pursuant thereto.
(c) At or prior to the Effective Time, Millennium shall take all
corporate action necessary to authorize and reserve for issuance at all times a
sufficient number of shares of Millennium Common Stock for delivery under the
COR Stock Plans and COR Convertible Notes. As soon as practicable (or in any
event within five business days) after the Effective Time, Millennium shall file
a registration statement on Form S-8 (or any successor or other appropriate
forms), or another appropriate form with respect to the shares of Millennium
Common Stock subject to the COR Stock Options and shall use its best efforts to
maintain the effectiveness of such registration statement or registration
statements (and maintain the current
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status of the prospectus or prospectuses contained therein) for so long as such
options remain outstanding.
(d) COR shall terminate the 1991 Employee Stock Purchase Plan (the
"ESPP") in accordance with its terms immediately prior to the Effective Time and
the participants in the ESPP shall be permitted to exercise any then outstanding
options thereunder at such time.
Section 6.12 Indemnification.
---------------
(a) From and after the Effective Time, Millennium shall, for a period
of six years after the Effective Time, cause the Surviving Corporation to honor
all of COR's obligations to indemnify and hold harmless (including any such
obligations to advance expenses as incurred) each present and former director
and officer of COR (the "Indemnified Parties"), against any costs or expenses
(including attorneys' fees), judgments, fines, losses, claims, damages,
liabilities or amounts paid in settlement incurred in connection with any claim,
action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, arising out of or pertaining to matters
existing or occurring at or prior to the Effective Time, whether asserted or
claimed prior to, at or after the Effective Time, to the extent that the
Indemnified Parties would have been entitled to be so indemnified and held
harmless pursuant to the terms of contracts or other documents in existence on
the date of this Agreement.
(b) From and after the Effective Time, Millennium shall, for a period
of six years after the Effective Time, cause the Surviving Corporation to
maintain (to the extent available in the market) in effect a directors' and
officers' liability insurance policy covering those persons who are currently
covered by COR's directors' and officers' liability insurance policy (a true and
complete copy of which has been heretofore delivered to Millennium) with
coverage in amount and scope in all material respects at least as favorable to
such persons as COR's existing coverage; provided, however, that in no event
shall Millennium or the Surviving Corporation be required to expend in excess of
200% the annual premium currently paid by COR for such coverage.
(c) Millennium shall pay all expenses, including reasonable attorneys
fees, that may be incurred by the persons referred to in this Section 6.12 in
connection with their successful enforcement of their rights provided in this
Section 6.12.
Section 6.13 Notification of Certain Matters. Millennium will give prompt
-------------------------------
notice to COR, and COR will give prompt notice to Millennium, upon becoming
aware of the occurrence, or failure to occur, of any event, which occurrence or
failure to occur would be reasonably likely to cause (a) any representation or
warranty of such party contained in this Agreement to be untrue or inaccurate in
any material respect at any time from the date of this Agreement to the
Effective Time, or (b) any material failure of Millennium or Sub or COR, as the
case may be, or of any officer, director, employee or agent thereof, to comply
with or satisfy any covenant, condition or agreement to be complied with or
satisfied by it under this Agreement. Notwithstanding the above, the delivery of
any notice pursuant to this Section will not limit or otherwise affect the
remedies available hereunder to the party receiving such notice or the
conditions to such party's obligation to consummate the Merger.
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Section 6.14 Stockholder Litigation. Until the earlier of the termination of
----------------------
this Agreement in accordance with its terms or the Effective Time, COR shall
give Millennium the opportunity to participate in the defense or settlement of
any stockholder litigation against COR or its Board of Directors relating to
this Agreement or any of the transactions contemplated by this Agreement, and
shall not settle any such litigation without Millennium's prior written consent.
Section 6.15 Employee Matters. As promptly as practicable after the Effective
----------------
Time, Millennium shall enroll persons who are, immediately before the Effective
Time, employees of COR or its Subsidiaries ("COR Employees") in Millennium's
employee benefit plans, to the extent applicable, including its medical plan,
dental plan, life insurance plan and disability plan, under the same coverage
applicable to similarly situated employees of Millennium, giving such COR
Employees service credit for their employment with COR for eligibility and
vesting purposes for all of Millennium's employee benefit plans (including
health coverage and vacation plans), as if such service had been performed with
Millennium and waiving any preexisting condition exclusion with respect to
Millennium's medical plan, to the extent that such preexisting condition would
have been covered under COR's plan. Notwithstanding the foregoing, if it is not
reasonably practicable for COR Employees to be enrolled in any one or more of
Millennium's employee benefit plans, due to geographic location or otherwise,
Millennium shall continue to enroll such COR Employees in the corresponding COR
Plan in which such COR Employees are enrolled as of the Effective Time or in a
reasonably comparable plan. Millennium shall use commercially reasonable efforts
to credit each COR Employee with deductible payments and co-payments paid by
such COR Employee under COR's healthcare plans in 2002 prior to the Effective
Time for purposes of determining the extent to which any such COR Employee has
satisfied his or her deductible and whether he or she has reached the
out-of-pocket maximum under Millennium's medical plan for such plan year.
Millennium shall give credit to each COR Employee that becomes an employee of
Millennium for earned but unused vacation and accrued vacation. Nothing in this
Section 6.15 shall prevent Millennium from modifying or terminating any
Millennium employee benefit plan (including a COR benefit plan which is
continued after the Effective Time) at any time and from time to time in its
sole determination.
Section 6.16 401(k) Plan. Except as otherwise requested by Millennium, at
-----------
least one business day prior to the Effective Time, COR shall take all action
required to terminate any 401(k) Plan maintained by COR or any ERISA Affiliate
(individually or together, the "COR 401(k) Plan") in accordance with its terms
and applicable law, including ERISA and the Code. Without limiting the
generality of Section 6.15, all COR Employees who are participants in the COR
401(k) Plan as of the date the COR 401(k) Plan is terminated shall become
eligible to participate in the Millennium 401(k) plan (the "Millennium 401(k)
Plan") as soon as administratively feasible following the Effective Time.
Section 6.17 Exemption from Liability Under Section 16(b).
--------------------------------------------
(a) The board of directors of Millennium, or a committee thereof
consisting solely of non-employee directors (as such term is defined for
purposes of Rule 16b-3(d) under the Exchange Act), shall adopt a resolution in
advance of the Effective Time providing that the receipt by the COR Insiders (as
defined below) of Millennium Common Stock in exchange for
- 48 -
shares of COR Common Stock, and of options to purchase Millennium Common Stock
upon assumption and conversion of COR Stock Options, in each case pursuant to
the transactions contemplated hereby and to the extent such securities are
listed in the Section 16 Information (as defined below), is intended to be
exempt pursuant to Rule 16b-3 under the Exchange Act.
(b) For purposes of Section 6.17(a), "Section 16 Information" shall
mean information regarding the COR Insiders and the number of shares of COR
Common Stock or other COR equity securities deemed to be beneficially owned by
each such COR Insider and expected to be exchanged for Millennium Common Stock,
and options to purchase Millennium Common Stock, in each case, in connection
with the Merger, which shall be provided by COR to Millennium at least 20
business days prior to the Closing.
(c) For purposes of Section 6.17(a), "COR Insiders" shall mean those
officers and directors of COR who immediately after the Closing become subject
to the reporting requirements of Section 16(a) of the Exchange Act with respect
to equity securities of Millennium as a result of their positions with
Millennium immediately after the Closing.
Section 6.18 Board Representation. Subject to applicable law, Millennium
--------------------
shall take all action as may be required such that upon the Effective Time,
Vaughn M. Kailian, Ginger L. Graham, Ernest Mario and Shaun R. Coughlin shall be
elected by the Board of Directors of Millennium as Class I director, Class I
director, Class II director and Class III director, respectively, to the extent
such persons are willing and able to so serve.
Section 6.19 Indentures. COR and Millennium shall take all actions as shall
----------
be required by the indentures for the COR Convertible Notes in connection with
the transactions contemplated by this Agreement, including the execution and
delivery of supplemental indentures and related officers' certificates and
related opinions of counsel simultaneously with the Closing. Immediately
following the Effective Time, Millennium will enter into a supplemental
indenture with the trustees of the COR Convertible Notes pursuant to which
Millennium will provide a full and unconditional guarantee of COR's obligations
under the COR Convertible Notes.
ARTICLE VII
CONDITIONS TO MERGER
Section 7.01 Conditions to Each Party's Obligation To Effect the Merger. The
----------------------------------------------------------
respective obligations of each party to this Agreement to effect the Merger
shall be subject to the satisfaction or waiver on or prior to the Closing Date
of the following conditions:
(a) Stockholder Approvals. The COR Voting Proposal shall have been
approved and adopted by the affirmative vote of the holders of a majority of the
shares of COR Common Stock outstanding on the record date for the COR Meeting
and the Millennium Voting Proposal shall have been approved by the affirmative
vote of the holders of a majority of the shares of Millennium Common Stock voted
at the Millennium Meeting at which a quorum is present.
- 49 -
(b) HSR Act. The waiting period applicable to the consummation of the
-------
Merger under the HSR Act shall have expired or been terminated.
(c) Governmental Approvals. Other than the filing provided for by Section
----------------------
1.02, all authorizations, consents, orders or approvals of, or declarations or
filings with, or expirations of waiting periods imposed by, any Governmental
Entity in connection with the Merger and the consummation of the other
transactions contemplated hereby, the failure of which to file, obtain or occur
is reasonably likely to have a Millennium Material Adverse Effect or an COR
Material Adverse Effect, shall have been filed, been obtained or occurred.
(d) Registration Statement; Joint Proxy Statement/Prospectus. The
--------------------------------------------------------
Registration Statement shall have become effective under the Securities Act and
no stop order suspending the effectiveness of the Registration Statement shall
have been issued and no proceeding for that purpose, and no similar proceeding
with respect to the Joint Proxy Statement/Prospectus, shall have been initiated
or threatened in writing by the SEC or its staff.
(e) No Injunctions. No Governmental Entity of competent jurisdiction shall
--------------
have enacted, issued, promulgated, enforced or entered any order, executive
order, stay, decree, judgment or injunction (each an "Order") or statute, rule
or regulation which is in effect and which has the effect of making the Merger
illegal or otherwise prohibiting consummation of the Merger.
(f) Nasdaq. The shares of Millennium Common Stock to be issued in the
------
Merger, upon the exercise of COR Stock Options assumed in connection with the
Merger and upon the conversion of the COR Convertible Notes shall have been
approved for listing on the Nasdaq National Market, subject only to official
notice of issuance.
Section 7.02 Additional Conditions to Obligations of Millennium and Sub. The
----------------------------------------------------------
obligations of Millennium and Sub to effect the Merger are subject to the
satisfaction on or prior to the Closing Date of each of the following
conditions, any of which may be waived in writing exclusively by Millennium and
Sub:
(a) Representations and Warranties. The representations and warranties of
------------------------------
COR set forth in this Agreement shall be true and correct (X) as of the date of
this Agreement and (Y) (except to the extent such representations and warranties
speak as of an earlier date) as of the Effective Time as though made at and as
of the Effective Time, except (i) in the case of clause (Y), for changes
expressly contemplated by this Agreement and (ii) in the case of both clauses
(X) and (Y) where the failures to be true and correct, individually or in the
aggregate and (except with respect to the first sentence of Section 3.13(a),
Section 3.19(b) and the second sentence of Section 3.23) without regard to any
qualifications as to materiality or COR Material Adverse Effect contained in
such representations and warranties, have not had and are not reasonably likely
to have a COR Material Adverse Effect; and Millennium shall have received a
certificate signed on behalf of COR by the chief executive officer and the chief
financial officer of COR to such effect.
(b) Performance of Obligations of COR. COR shall have performed in all
---------------------------------
material respects all obligations required to be performed by it under this
Agreement at or prior
- 50 -
to the Closing Date; and Millennium shall have received a certificate signed on
behalf of COR by the chief executive officer and the chief financial officer of
COR to such effect.
(c) Tax Opinion. Millennium shall have received a written opinion from
-----------
Hale and Dorr LLP, counsel to Millennium, to the effect that the Merger will be
treated for federal income tax purposes as a tax-free reorganization within the
meaning of Section 368(a) of the Code; provided that if Hale and Dorr LLP does
not render such opinion, this condition shall nonetheless be deemed satisfied if
Cooley Godward LLP renders such opinion to Millennium (it being agreed that
Millennium and COR shall each provide reasonable cooperation, including making
representations, to Hale and Dorr LLP or Cooley Godward LLP, as the case may be,
as the law firm rendering such opinion may reasonably request in order to enable
them to render such opinion).
(d) Third Party Consents. COR shall have obtained each consent or approval
--------------------
of any third party (other than a Governmental Entity) required in connection
with the Merger or the consummation of the other transactions contemplated
hereby, the failure of which to obtain, individually or in the aggregate, is
reasonably likely to have an COR Material Adverse Effect.
(e) No Restraints. Except as would not, individually or in the aggregate,
-------------
reasonably be expected to result in a COR Material Adverse Effect or a
Millennium Material Adverse Effect, there shall not be instituted or pending any
action or proceeding by any Governmental Entity (i) seeking to restrain,
prohibit or otherwise interfere with the ownership or operation by Millennium or
any of its Subsidiaries of all or any portion of the business of COR or any of
its Subsidiaries or of Millennium or any of its Subsidiaries or to compel
Millennium or any of its Subsidiaries to dispose of or hold separate all or any
portion of the business or assets of COR or any of its Subsidiaries or of
Millennium or any of its Subsidiaries, (ii) seeking to impose or confirm
limitations on the ability of Millennium or any of its Subsidiaries effectively
to exercise full rights of ownership of the shares of COR Common Stock (or
shares of stock of the Surviving Corporation) including the right to vote any
such shares on any matters properly presented to stockholders or (iii) seeking
to require divestiture by Millennium or any of its Subsidiaries of any such
shares.
(f) Resignations. Millennium shall have received copies of the
------------
resignations, effective as of the Effective Time, of each director of COR and
its Subsidiaries.
Section 7.03 Additional Conditions to Obligations of COR. The obligation of
-------------------------------------------
COR to effect the Merger is subject to the satisfaction on or prior to the
Closing Date of each of the following conditions, any of which may be waived, in
writing, exclusively by COR:
(a) Representations and Warranties. The representations and warranties of
------------------------------
Millennium and Sub set forth in this Agreement shall be true and correct (X) as
of the date of this Agreement and (Y) (except to the extent such representations
speak as of an earlier date) as of the Effective Time as though made at and as
of the Effective Time, except (i) in the case of clause (Y), for changes
expressly contemplated by this Agreement and (ii) in the case of both clauses
(X) and (Y) where the failures to be true and correct, individually or in the
aggregate and without regard to any qualifications as to materiality or
Millennium Material Adverse Effect contained in such representations and
warranties, have not had and are not reasonably likely to
- 51 -
have a Millennium Material Adverse Effect; and COR shall have received a
certificate signed on behalf of Millennium by the chief executive officer or the
chief financial officer of Millennium to such effect.
(b) Performance of Obligations of Millennium and Sub. Millennium and Sub
------------------------------------------------
shall have performed in all material respects all obligations required to be
performed by them under this Agreement at or prior to the Closing Date, and COR
shall have received a certificate signed on behalf of Millennium by the chief
executive officer or the chief financial officer of Millennium to such effect.
(c) Tax Opinion. COR shall have received the opinion of Cooley Godward
-----------
LLP, counsel to COR, to the effect that the Merger will be treated for Federal
income tax purposes as a tax-free reorganization within the meaning of Section
368(a) of the Code; provided that if Cooley Godward LLP does not render such
opinion, this condition shall nonetheless be deemed satisfied if Hale and Dorr
LLP renders such opinion to COR (it being agreed that Millennium and COR shall
each provide reasonable cooperation, including making representations, to Cooley
Godward LLP or Hale and Dorr LLP, as the case may be, as the law firm rendering
such opinion may reasonably request in order to enable them to render such
opinion).
(d) No Restraints. Except as would not, individually or in the aggregate,
-------------
reasonably be expected to result in a COR Material Adverse Effect or a
Millennium Material Adverse Effect, there shall not be instituted or pending any
action or proceeding by any Governmental Entity (i) seeking to restrain,
prohibit or otherwise interfere with the ownership or operation by Millennium or
any of its Subsidiaries of all or any portion of the business of COR or any of
its Subsidiaries or of Millennium or any of its Subsidiaries or to compel
Millennium or any of its Subsidiaries to dispose of or hold separate all or any
portion of the business or assets of COR or any of its Subsidiaries or of
Millennium or any of its Subsidiaries, (ii) seeking to impose or confirm
limitations on the ability of Millennium or any of its Subsidiaries effectively
to exercise full rights of ownership of the shares of COR Common Stock (or
shares of stock of the Surviving Corporation) including the right to vote any
such shares on any matters properly presented to stockholders or (iii) seeking
to require divestiture by Millennium or any of its Subsidiaries of any such
shares.
ARTICLE VIII
TERMINATION AND AMENDMENT
Section 8.01 Termination. This Agreement may be terminated at any time prior
-----------
to the Effective Time (with respect to Sections 8.01(b) through 8.01(g), by
written notice by the terminating party to the other party), whether before or
after approval of the matters presented in connection with the Merger by the
stockholders of COR or Millennium:
(a) by mutual written consent of Millennium and COR; or
(b) by either Millennium or COR if the Merger shall not have been
consummated on or before June 30, 2002 (the "Outside Date") (provided that the
right to
- 52 -
terminate this Agreement under this Section 8.01(b) shall not be available to
any party whose failure to fulfill any obligation under this Agreement has been
the principal cause of or resulted in the failure of the Merger to occur on or
before the Outside Date); or
(c) by either Millennium or COR if a Governmental Entity of competent
jurisdiction shall have issued a nonappealable final order, decree or ruling or
taken any other nonappealable final action, in each case having the effect of
permanently restraining, enjoining or otherwise prohibiting the Merger; or
(d) by Millennium or COR:
(i) if the COR Meeting (including any adjournment or postponement)
shall have been held and completed, and the required approval of
stockholders as contemplated by this Agreement shall not have been obtained
by reason of a failure to obtain the requisite vote of the stockholders of
COR in favor of the COR Voting Proposal; or
(ii) if the Millennium Meeting (including any adjournment or
postponement), shall have been held and completed and the required approval
of stockholders as contemplated by this Agreement shall not have been
obtained by reason of a failure to obtain the requisite vote of the
stockholders of Millennium in favor of the Millennium Voting Proposal
(provided that the right to terminate this Agreement under this Section 8.01(d)
shall not be available to any party whose failure to fulfill any obligation
under this Agreement has been the principal cause of or resulted in the failure
to obtain the approval of the COR Voting Proposal or Millennium Voting Proposal,
as applicable); or
(e) by Millennium, if (i) the Board of Directors of COR shall have failed
to recommend approval of the COR Voting Proposal in the Joint Proxy Statement or
shall have withdrawn or modified its recommendation of the COR Voting Proposal;
(ii) Millennium requests in writing that the Board of Directors of COR reconfirm
its recommendation of this Agreement or the Merger and the Board of Directors of
COR fails to do so within five business days after its receipt of Millennium's
request; (iii) the Board of Directors of COR shall have approved or recommended
to the stockholders of COR an Acquisition Proposal (other than the Merger); (iv)
a tender offer or exchange offer for outstanding shares of COR Common Stock is
commenced (other than by Millennium or an Affiliate of Millennium) and the Board
of Directors of COR recommends that the stockholders of COR tender their shares
in such tender or exchange offer or, within 10 days after such tender or
exchange offer, fails to recommend against acceptance of such offer or takes no
position with respect to the acceptance thereof; or (v) COR knowingly and
materially breaches any of its obligations under Sections 6.01, 6.02 or 6.05
(provided, however, that in the case of a breach under Section 6.02 or 6.05,
such breach shall not have been, or is not capable of being, cured prior to the
earlier of the day preceding the Outside Date or 30 days after written notice of
such breach from Millennium (which written notice shall include a reasonably
detailed description of the facts and circumstances surrounding such breach));
or
- 53 -
(f) by COR, if (i) the Board of Directors of Millennium shall have failed
to recommend approval of the Millennium Voting Proposal in the Joint Proxy
Statement or shall have withdrawn or modified its recommendation of the
Millennium Voting Proposal; (ii) COR requests in writing that the Board of
Directors of Millennium reconfirm its recommendation of the Millennium Voting
Proposal and the Board of Directors of Millennium fails to do so within five
business days after its receipt of COR's request; or (iii) Millennium knowingly
and materially breaches any of its obligations under Sections 6.02 or 6.05
(provided, however, that in the case of a breach under Section 6.02 or 6.05,
such breach shall not have been, or is not capable of being, cured prior to the
earlier of the day preceding the Outside Date or 30 days after written notice of
such breach from COR (which written notice shall include a reasonably detailed
description of the facts and circumstances surrounding such breach)); or
(g) by COR if contemporaneously with such termination COR bona fide
intends to enter into a binding written agreement for a Superior Proposal;
provided that:
(i) COR and its Subsidiaries shall not have breached Section 6.01 in
a manner that resulted in its receipt of such Superior Proposal or
otherwise breached Section 6.01 in any material respect;
(ii) COR shall have (1) notified Millennium in writing of COR's
receipt of such Superior Proposal, (2) further notified Millennium in
writing that COR intends to enter into a binding agreement with respect to
such Superior Proposal, subject to clause (iii) below, and (3) provided
Millennium together with the notice set forth in clause (2) a true and
complete copy of the current written version of such Superior Proposal (or
a summary containing all material terms and conditions of such Superior
Proposal);
(iii) Millennium does not make, within three business days after
receipt of COR's written notice pursuant to clause (ii)(2) above, an offer
that the Board of Directors of COR shall have concluded in good faith
(after consultation with its financial advisor and after taking into
account all relevant factors, including the risk of non-consummation of the
Superior Proposal and Millennium's counterproposal) is as favorable to the
stockholders of COR as such Superior Proposal; and
(iv) COR shall not later than the time of termination have paid
Millennium the termination fee required by Section 8.03(c)(iii); or
(h) by Millennium or COR, if there has been a breach of any
representation, warranty, covenant or agreement on the part of the other party
set forth in this Agreement, which breach (i) causes the conditions set forth in
Section 7.02(a) or (b) (in the case of termination by Millennium) or 7.03(a) or
(b) (in the case of termination by COR) not to be satisfied, and (ii) shall not
have been, or is not capable of being, cured within 30 days after written notice
of such breach from the terminating party (which written notice shall include a
reasonably detailed description of the facts and circumstances surrounding such
breach).
Section 8.02 Effect of Termination. In the event of termination of this
---------------------
Agreement as provided in Section 8.01, this Agreement shall immediately
become void and there shall be no
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liability or obligation on the part of Millennium, COR, Sub or their respective
officers, directors, stockholders or Affiliates; provided that (i) any such
termination shall not limit liability of any party to this Agreement for any
breach of this Agreement (which includes the making of any representation or
warranty by a party to this Agreement that was not true or accurate when made)
occurring prior to termination and (ii) the provisions of Sections 3.28, 4.20,
5.04, 6.04 (second sentence only), 6.07, this Section 8.02, Section 8.03 and
Article IX of this Agreement and the Confidentiality Agreement shall remain in
full force and effect and survive any termination of this Agreement.
Section 8.03 Fees and Expenses.
-----------------
(a) Except as set forth in this Section 8.03, all fees and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such expenses, whether or not the
Merger is consummated; provided however, that COR and Millennium shall share
equally the filing fee of (i) Millennium's pre-merger notification report under
the HSR Act, and (ii) all fees and expenses, other than accountants' and
attorneys' fees, incurred with respect to the printing and filing of the Joint
Proxy Statement (including any related preliminary materials) and the
Registration Statement and any amendments or supplements thereto.
(b) COR shall pay Millennium up to $3,000,000 as reimbursement for
expenses of Millennium actually incurred in connection with the transactions
contemplated by this Agreement prior to termination (including, but not limited
to, fees and expenses of Millennium's counsel, accountants and financial
advisors, but excluding any discretionary fees paid to such financial advisors),
upon the termination of this Agreement by Millennium or COR pursuant to Section
8.01(b) if the failure to satisfy the condition set forth in Section 7.02(a) or
(b) by the Outside Date shall have resulted in the Closing not occurring.
(c) COR shall pay Millennium a termination fee of $75,000,000 upon the
first to occur of:
(i) the termination of this Agreement by Millennium pursuant to
Section 8.01(e);
(ii) the termination of this Agreement by Millennium or COR pursuant
to Section 8.01(b) or Section 8.01(d)(i) if, (x) prior to such termination,
there shall have been publicly announced a proposal for a COR Alternative
Transaction (as defined in Section 8.03(i) below) which has not been
absolutely and unconditionally withdrawn or abandoned; and (y) a COR
Alternative Transaction is consummated within nine (9) months after the
termination of this Agreement or a definitive agreement for a COR
Alternative Transaction is entered into within nine (9) months after the
termination of this Agreement and such COR Alternative Transaction is
consummated within eighteen (18) months after the termination of this
Agreement; or
(iii) the termination of this Agreement by COR pursuant to Section
8.01(g).
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(d) Millennium shall pay COR up to $3,000,000 as reimbursement for expenses
of COR actually incurred in connection with the transactions contemplated by
this Agreement prior to termination (including, but not limited to, fees and
expenses of COR's counsel, accountants and financial advisors, but excluding any
discretionary fees paid to such financial advisors), upon the termination of
this Agreement by Millennium or COR pursuant to Section 8.01(b) if the failure
to satisfy the condition set forth in Section 7.03(a) or (b) by the Outside Date
shall have resulted in the Closing not occurring.
(e) Millennium shall pay COR a termination fee of $75,000,000 upon the
first to occur of:
(i) the termination of this Agreement by COR pursuant to Section
8.01(f) or
(ii) the termination of this Agreement by Millennium or COR pursuant
to Section 8.01(b) or Section 8.01(d)(ii) if, (x) prior to such termination,
there shall have been publicly announced a proposal or offer for a Millennium
Alternative Transaction (as defined in Section 8.03(i) below) which is directly
or indirectly contingent upon the Merger not being consummated, which proposal
or offer has not been absolutely and unconditionally withdrawn or abandoned; and
(y) a Millennium Alternative Transaction is consummated within nine (9) months
after the termination of this Agreement or a definitive agreement for a
Millennium Alternative Transaction is entered into within nine (9) months after
the termination of this Agreement and such Millennium Alternative Transaction is
consummated within eighteen (18) months after the termination of this Agreement.
(f) The expenses payable pursuant to Section 8.03(b), and 8.03(d) shall be
paid, by wire transfer of same day funds, within two business days after demand
therefor following the first to occur of the events giving rise to the payment
obligation described therein.
(g) The fees payable pursuant to Section 8.03(c) and Section 8.03(e) shall
be paid, by wire transfer of same day funds:
(i) within two business days after demand therefor following the first
to occur of the event giving rise to the payment obligation described
therein in the case of Section 8.03(c)(i) or Section 8.03(e)(i);
(ii) on the earlier of the date upon which a definitive agreement for
a COR Alternative Transaction is entered into or the date upon which a COR
Alternative Transaction is consummated in the case of Section 8.03(c)(ii);
(iii) on the earlier of the date upon which a definitive agreement for
a Millennium Alternative Transaction is entered into or the date upon which
a Millennium Alternative Transaction is consummated in the case of Section
8.03(e)(ii); and
(iv) at the time of COR's delivery of its termination notice in the case
of Section 8.03(c)(iii).
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(h) The parties acknowledge that the agreements contained in this Section
8.03 are not meant to constitute a measure of, or in any way limit, curtail or
impede the receipt of damages or other remedies with respect to a breach of this
Agreement. The provisions of this Section 8.03 are an integral part of the
transactions contemplated by this Agreement and without these agreements, the
parties would not enter into this Agreement. If one party fails to promptly pay
to the other any expense reimbursement or fee due hereunder, the defaulting
party shall pay the costs and expenses (including legal fees and expenses) in
connection with any action, including the filing of any lawsuit or other legal
action, taken to collect payment, together with interest on the amount of any
unpaid fee at the publicly announced prime rate of Fleet Bank, N.A. plus two
percent per annum, compounded monthly, from the date such expense reimbursement
or fee was required to be paid.
(i) As used in this Agreement, "Alternative Transaction" means with
respect to Millennium or COR (as the case may be):
(i) a transaction or series of related transactions (including
open market or private purchases) pursuant to which any person (or group of
persons) other than Millennium or its affiliates (in the case of COR) and
other than COR or its affiliates (in the case of Millennium) (a "Third
Party"), acquires more than 40% of the outstanding voting securities of COR
or Millennium (as the case may be) pursuant to a tender offer, exchange
offer or otherwise,
(ii) a merger or other business combination with a Third Party in
which the stockholders of Millennium or COR (as the case may be)
immediately prior to such transaction hold less than 60% of the equity
interests in the surviving entity, or if the surviving entity is a
Subsidiary, less than 60% of the equity interests of the Parent of the
surviving entity, immediately after such merger or other business
combination; or
(iii) any other transaction pursuant to which any Third Party acquires
control of assets (including for this purpose the outstanding equity
securities of Subsidiaries of COR or Millennium (as the case may be))
having a fair market value equal to more than 40% of the fair market value
of all the consolidated assets of COR or Millennium (as the case may be)
and its Subsidiaries immediately prior to such transaction.
Section 8.04 Amendment. This Agreement may be amended by the parties hereto,
---------
by action taken or authorized by their respective Boards of Directors, at any
time before or after approval of the matters presented in connection with the
Merger by the stockholders of COR or of Millennium, but, after any such
approval, no amendment shall be made which by law requires further approval by
such stockholders without such further approval. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties hereto.
Section 8.05 Extension; Waiver. At any time prior to the Effective Time, the
-----------------
parties hereto, by action taken or authorized by their respective Boards of
Directors, may, to the extent legally allowed, with respect to any party that is
not an Affiliate, (i) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (ii) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered
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pursuant hereto and (iii) waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in a written
instrument signed on behalf of such party. The failure of any party to this
Agreement to assert any of its rights under this Agreement or otherwise shall
not constitute a waiver of such rights.
ARTICLE IX
MISCELLANEOUS
Section 9.01 Nonsurvival of Representations, Warranties and Agreements.
---------------------------------------------------------
None of the representations, warranties and agreements in this Agreement or in
any instrument delivered pursuant to this Agreement shall survive the Effective
Time, except for the agreements contained in Articles I and II, Sections 6.08,
6.11 (other than the last sentence of Section 6.11(a)), 6.12, 6.15, 6.16, 6.18
and 6.19 and Article IX, the agreements of the Affiliates delivered pursuant to
Section 6.09 and the representations delivered pursuant to Sections 7.02(c) and
7.03(c).
Section 9.02 Notices. All notices, requests, demands, claims and other
-------
communications hereunder shall be in writing. Any notice, request, demand, claim
or other communication hereunder shall be deemed duly delivered three business
days after it is sent by registered or certified mail, return receipt requested,
postage prepaid, or one business day after it is sent via a reputable nationwide
overnight courier service for next business day delivery, in each case to the
intended recipient as set forth below:
(a) if to Millennium or Sub, to
Millennium
with a copy to:
Hale and Dorr LLP
60 State Street
Boston, MA 02109
Attn: David E. Redlick, Esq.
Telecopy: (617) 526-5000
(b) if to COR, to
COR
with a copy to:
Cooley Godward LLP
5 Palo Alto Square
Palo Alto, CA 94306
Attn: Keith Flaum, Esq.
Telecopy: (650) 849-7400
Any party may give any notice, request, demand, claim or other
communication hereunder using any other means (including personal delivery,
expedited courier, messenger
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service, telecopy, or ordinary mail but not electronic mail), but no such
notice, request, demand, claim or other communication shall be deemed to have
been duly given unless and until it actually is received by the party for whom
it is intended. Any party may change the address to which notices, requests,
demands, claims and other communications hereunder are to be delivered by giving
the other parties notice in the manner herein set forth.
Section 9.03 Interpretation. When a reference is made in this Agreement to
--------------
Articles or Sections, such reference shall be to an Article or a Section of this
Agreement unless otherwise indicated. The table of contents, table of defined
terms and headings contained in this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation of this Agreement.
The phrases "the date of this Agreement", "the date hereof," and terms of
similar import, unless the context otherwise requires, shall be deemed to refer
to December 5, 2001. The words "include," "includes" and "including" when used
herein shall be deemed in each case to be followed by the words "without
limitation." The language used in this Agreement shall be deemed to be the
language chosen by the parties hereto to express their mutual intent, and no
rule of strict construction shall be applied against any party.
Section 9.04 Counterparts. This Agreement may be executed in two or more
------------
counterparts, all of which shall be considered one and the same agreement and
shall become effective when two or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart. This Agreement may be executed and
delivered by facsimile transmission.
Section 9.05 Entire Agreement; No Third Party Beneficiaries. This Agreement
----------------------------------------------
(including the documents and the instruments executed or to be executed by the
parties hereto and referred to herein) and the Confidentiality Agreement (a)
constitute the entire agreements and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof, and (b) except for the provisions of Sections 6.08, 6.11
(other than the last sentence of Section 6.11(a)), 6.12, 6.15, 6.16, 6.17 and
6.18, which are intended for the benefit of the parties covered thereby, are not
intended to confer upon any person other than the parties hereto any rights or
remedies hereunder; provided that the Confidentiality Agreement shall remain in
full force and effect until the Effective Time.
Section 9.06 Governing Law; Submission to Jurisdiction. This Agreement
-----------------------------------------
shall be governed and construed in accordance with the laws of the State of
Delaware without regard to any applicable conflicts of law principles. Any suit,
action or proceeding seeking to enforce any provision of, or based on any matter
arising out of or in connection with, this Agreement or the transactions
contemplated hereby shall be brought exclusively in any federal or state court
located in the State of Delaware, and each of the parties hereby consents to the
jurisdiction of such courts (and of the appropriate appellate courts therefrom)
in any such suit, action or proceeding and irrevocably waives, to the fullest
extent permitted by law, any objection that it may now or hereafter have to the
laying of the venue of any such suit, action or proceeding in any such court or
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient form. Process in any such suit, action or proceeding
may be served on any party anywhere in the world, whether within or without the
jurisdiction of any such court. Without limiting the foregoing, each party
agrees that service of process on such party as
- 59 -
provided in Section 9.02 as to giving notice hereunder shall be deemed effective
service of process on such party.
Section 9.07 Other Remedies; Specific Performance. Except as otherwise
------------------------------------
provided herein, 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. The parties
hereto agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions of this
Agreement, this being in addition to any other remedy to which they are entitled
at law or in equity.
Section 9.08 Assignment. Neither this Agreement nor any of the rights,
----------
interests or obligations under this Agreement may be assigned or delegated, in
whole or in part, by operation of law or otherwise by any of the parties hereto
without the prior written consent of the other parties, and any such assignment
without such prior written consent shall be null and void. Subject to the
preceding sentence, this Agreement shall be binding upon, inure to the benefit
of, and be enforceable by, the parties hereto and their respective successors
and permitted assigns.
Section 9.09 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 replace such void or unenforceable provision of this Agreement with a valid
and enforceable provision that will achieve, to the extent possible, the
economic, business and other purposes of such void or unenforceable provision.
Section 9.10 Waiver of Jury Trial. EACH OF Millennium, CRIMSON AND SUB
--------------------
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 Millennium, CRIMSON OR SUB IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.
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IN WITNESS WHEREOF, Millennium, Sub and COR have caused this Agreement to
be signed by their respective officers thereunto duly authorized as of the date
first written above.
Millennium Pharmaceuticals, Inc.
By: /s/ Mark J. Levin
--------------------------------------------------
Title: Chief Executive Officer
-----------------------------------------------
PGM Corporation
By: /s/ Mark J. Levin
--------------------------------------------------
Title: President
-----------------------------------------------
COR Therapeutics, Inc.
By: /s/ Vaughn M. Kailian
--------------------------------------------------
Title: Chief Executive Officer
-----------------------------------------------
The undersigned, being the duly elected Secretary or Assistant Secretary of
PGM Corporation, hereby certifies that this Agreement has been adopted by a
majority of the votes represented by the outstanding shares of capital stock of
Sub entitled to vote on this Agreement.
/s/ Joel Goldberg
- ----------------------------------
[Secretary or Assistant Secretary]
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