UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of
The
Securities Exchange Act of 1934
September 5, 2005
Date
of Report (Date of earliest event reported)
MAXIM
PHARMACEUTICALS, INC.
(Exact
name of registrant as specified in its charter)
Delaware
|
|
1-14430
|
|
87-0279983
|
(State
or other jurisdiction
|
|
(Commission
|
|
(IRS
Employer
|
of
incorporation)
|
|
File
Number)
|
|
Identification
No.)
|
8899 UNIVERSITY CENTER LANE, SUITE 400
SAN DIEGO,
CALIFORNIA 92122
(Address of principal executive
offices, including zip code)
(858)
453-4040
(Registrants
telephone number, including area code)
N/A
(Former name
or former address, if changed since last report)
Check the appropriate box
below if the Form 8-K filing is intended to simultaneously satisfy the filing
obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
ý
Written communications pursuant to Rule 425
under the Securities Act (17 CFR 230.425)
ý
Soliciting material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to
Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to
Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item
1.01 Entry into a Material Definitive
Agreement.
Entry into Agreement and Plan of Merger
On September 6, 2005, Maxim Pharmaceuticals,
Inc., or Maxim, entered into a definitive Agreement and Plan of Merger
, by and among Maxim, EpiCept
Corporation, or EpiCept, and Magazine Acquisition Corp., or Merger-Sub, a
wholly-owned subsidiary of EpiCept.
Pursuant to the Merger Agreement and subject to the terms and conditions
set forth therein, Merger Sub will merge with and into Maxim, with Maxim
surviving as a wholly owned subsidiary of EpiCept. The Merger Agreement has been approved by the
boards of directors of both Maxim and EpiCept.
The terms of the Merger Agreement provide for
EpiCept to issue shares of its common stock to Maxim stockholders in exchange
for all of the outstanding shares of Maxim, with Maxim stockholders receiving 0.194034
of a share of EpiCept common stock for each share of Maxim common stock that
they hold. Upon consummation of the
merger, EpiCept stockholders will retain approximately 72%, and the former Maxim
stockholders will receive approximately 28%, ownership of the combined company
calculated on a fully diluted basis. Most
of the outstanding options and all of the outstanding warrants to purchase
Maxim common stock will be assumed by EpiCept in connection with the merger.
Immediately
prior to consummation of the merger, all of EpiCepts outstanding preferred
stock and debt will be converted into EpiCept common stock, except for debt of
approximately $1 million owed by EpiCept and for certain debt owed by EpiCepts
wholly-owned German subsidiary. In
addition, immediately prior to consummation of the merger, all outstanding
warrants to purchase EpiCepts common stock will be exercised or will expire,
other than warrants issued in connection with the $1 million of debt referenced
above, which warrants may remain outstanding.
The merger is intended to qualify for federal income tax purposes
as a reorganization under the provisions of Section 368 of the Internal Revenue
Code of 1986, as amended.
The transaction is anticipated to close during the fourth quarter of
2005, subject to the satisfaction of customary closing conditions, including
the approval of the merger by the stockholders of Maxim. Maxims directors and executive officers, who
hold in the aggregate less than 1% of the outstanding shares of Maxim common
stock, have entered into voting agreements with EpiCept, whereby they have irrevocably
agreed to vote in favor of the merger.
In addition, each of Maxims directors and executive officers have
entered into an affiliate agreement with EpiCept, whereby they have agreed to
comply with the
requirements of Rule 145 promulgated under
the Securities Act of 1933, as amended, in connection with sales of EpiCept
common stock issued to them in the merger.
The combined company will retain EpiCepts
CEO, corporate name and headquarters in Englewood Cliffs, NJ. In addition, Dr. Ben Tseng, Maxims Vice
President, Research, will become Esquires Chief Scientific Officer. The combined companys board of directors
will consist of five current EpiCept directors and two current Maxim
directors. EpiCept is expected to
continue to operate Maxims research facility in San Diego, California.
The Merger Agreement is attached to this report as Exhibit 2.1. The foregoing description is qualified in its
entirety by reference to the full text of the Merger Agreement. A copy of the joint press release issued by Maxim
and EpiCept announcing the transaction is incorporated by reference as Exhibit 99.1.
2
Amendment of Rights Agreement
Prior to the execution of the Merger
Agreement, on September 5, 2005, Maxim entered into an amendment to its Rights
Agreement, dated as of June 15, 2000, between Maxim and American Stock Transfer
and Trust Company,
to ensure (among other
things) that none of the (a) approval, execution, delivery of performance of
the Merger Agreement, (b) the public disclosure of the merger, the Merger
Agreement and the transactions contemplated thereby or (c) the consummation of
the merger or any of the transactions contemplated by the Merger Agreement will
trigger the rights under the Rights Agreement.
In addition, the amendment to the Rights
Agreement provides that the rights issued under the Rights Agreement will
expire immediately prior to the effective date of the merger.
A copy of the amendment to the Rights Agreement is attached to this
report as Exhibit 4.1. The foregoing description is qualified in its entirety
by reference to the full text of such exhibit.
Additional
Information
In connection with the proposed
transaction, Maxim and EpiCept will file a registration statement that contains
a proxy statement/prospectus with the Securities and Exchange Commission.
Shareholders of Maxim and
other investors are urged to read the proxy statement/prospectus (including any
amendments or supplements to the proxy statement/prospectus) regarding the
proposed transaction when it becomes available because it will contain
important information.
Maxims
shareholders will be able to obtain a free copy of the proxy
statement/prospectus, as well as other filings containing information about
Maxim and EpiCept, without charge, at the SECs Internet site
(http://www.sec.gov). Copies of the
proxy statement/prospectus and the filings with the SEC that will be
incorporated by reference in the proxy statement/prospectus can also be
obtained, without charge, by directing a request to Maxim Pharmaceuticals, 8899
University Center Lane, Suite 400, San Diego, CA 92122, Attention: Investor Relations, Telephone: (858)
453-4040.
Participants
in the Solicitation
Maxim and its directors and
executive officers and EpiCept and its directors and executive officers may be
deemed to be participants in the solicitation of proxies from the shareholders
of Maxim in connection with the proposed transaction. Information regarding the special interests
of these directors and executive officers in the merger transaction will be
included in the proxy statement/prospectus of Maxim and EpiCept referred to
above. Additional information regarding
the directors and executive officers of Maxim is also included in Maxims proxy
statement for its 2005 Annual Meeting of Stockholders, which was filed with the
SEC on January 19, 2005. Additional
information regarding the directors and executive officers of EpiCept is also
included in EpiCepts registration statement on Form S-1, which was filed with
the SEC on April 18, 2005. These
documents are available free of charge at the SECs web site
(http://www.sec.gov)
and from
Investor Relations at Maxim at the address described above.
Item
3.03 Material Modification to Rights of Security Holders.
See the disclosure set forth in Item 1.01 Entry into a Material
Definitive Agreement which is incorporated by reference into this Item 3.03.
3
Item
9.01 Financial Statements and Exhibits.
(a)
Financial Statements of
Businesses Acquired.
Not Applicable.
(b)
Pro Forma Financial
Information.
Not Applicable.
(c)
Exhibits.
2.1
Agreement and Plan of Merger,
dated as of September 6, 2005, by
and among Maxim Pharmaceuticals, Inc., EpiCept Corporation, and Magazine
Acquisition Corp., a wholly-owned subsidiary of EpiCept Corporation.
4.1
Amendment to Rights
Agreement, dated as of September 5, 2005, between Maxim Pharmaceuticals, Inc.
and American Stock Transfer and Trust Company.
99.1
Joint press release, dated September 6, 2005
4
SIGNATURE
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned hereunto duly authorized.
|
MAXIM PHARMACEUTICALS, INC.
|
|
|
Date: September 6, 2005
|
/s/
John D. Prunty
|
|
John
D. Prunty
|
|
Vice President, Finance and Chief Financial Officer
(Principal Financial and Accounting Officer duly
authorized to sign on behalf of the registrant)
|
5
INDEX TO EXHIBITS
2.1
Agreement and Plan of
Merger, dated as of September 6, 2005, by and among Maxim Pharmaceuticals, Inc., EpiCept
Corporation, and Magazine Acquisition Corp., a wholly-owned subsidiary of
EpiCept Corporation.
4.1
Amendment to Rights
Agreement, dated as of September 5, 2005, between Maxim Pharmaceuticals, Inc.
and American Stock Transfer and Trust Company.
99.1
Joint press release, dated September 6, 2005
6
Exhibit
2.1
AGREEMENT AND PLAN OF
MERGER
AMONG
EPICEPT CORPORATION,
MAGAZINE ACQUISITION CORP.
AND
MAXIM PHARMACEUTICALS,
INC.
Dated as of September 6,
2005
INDEX OF EXHIBITS
Exhibit A
|
Amended and Restated Certificate of Incorporation
|
|
|
Exhibit B
|
Maxim
Voting Agreement
|
|
|
Exhibit C
|
Certificate of Incorporation of the Surviving
Corporation
|
|
|
Exhibit D
|
Maxim
Affiliate Agreement
|
AGREEMENT AND PLAN OF
MERGER
This AGREEMENT AND PLAN OF MERGER (the
Agreement
)
is made and entered into as of September 6, 2005 among EpiCept Corporation, a
Delaware corporation (
EpiCept
), Magazine
Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of EpiCept
(
Merger Sub
), and Maxim Pharmaceuticals, Inc., a Delaware
corporation (
Maxim
).
RECITALS
A. Upon the terms and
subject to the conditions of this Agreement and in accordance with the General
Corporation Law of the State of Delaware (the
DGCL
),
Maxim and EpiCept will enter into a business combination transaction pursuant
to which Merger Sub will merge with and into Maxim (the
Merger
).
B. The Board of
Directors of Maxim (i) has determined that the Merger is advisable and
fair to, and in the best interests of, Maxim and its stockholders,
(ii) has approved this Agreement, the Merger and the other transactions
contemplated by this Agreement and has deemed this Agreement advisable and
(iii) has approved and determined to recommend the approval and adoption of
this Agreement and the approval of the Merger to the stockholders of Maxim.
C. The Board of
Directors of EpiCept (i) has approved this Agreement, the Merger and the
other transactions contemplated by this Agreement, (ii) has approved and
declared advisable an amended and restated Certificate of Incorporation of EpiCept
in the form attached hereto as
Exhibit A
(the
Amended and
Restated Certificate of Incorporation
), and (iii) has approved the issuance
of shares of EpiCept Common Stock (as defined below) to the stockholders of Maxim
pursuant to the terms of this Agreement (the
Share
Issuance
).
D. Concurrently with
the execution and delivery of this Agreement and as a condition and inducement to
Maxims willingness to enter into this Agreement, certain EpiCept stockholders
(collectively, the
Principal EpiCept
Stockholders
), who in the aggregate own sufficient outstanding
shares of each class of voting capital stock of EpiCept to approve the transactions
contemplated hereby and convert all outstanding shares of EpiCept preferred
stock into EpiCept Common Stock pursuant to the requirements of EpiCepts
charter and the DGCL, have executed and delivered written consents in
accordance with Section 228 of the DGCL (the
Principal
Stockholder Consent
) pursuant to which the record holders of the
shares of EpiCept Common Stock beneficially owned by each of the Principal EpiCept
Stockholders have consented to the adoption of the Amended and Restated Certificate
of Incorporation and approval of the Share Issuance without a meeting, without
prior notice and without a vote.
E. On or prior to the
Effective Time (as defined below), (i) all of the outstanding shares of EpiCepts
Series A Convertible Preferred Stock, Series B Convertible Preferred Stock and
Series C Convertible Preferred Stock, (ii) all of the outstanding warrants to
purchase shares of EpiCept Preferred Stock and shares of EpiCept Common Stock (other
than the Sanders
1
Warrants (as defined below)) and (iii) all outstanding
convertible notes issued by EpiCept which are convertible into shares of EpiCept
Common Stock (other the Sanders Notes (as defined below)), in each case will be
converted into EpiCept Common Stock in accordance with their terms
(collectively, the
EpiCept Conversions
).
F. Concurrently with
the execution of this Agreement and as a condition and inducement to EpiCepts
willingness to enter into this Agreement, EpiCept and certain stockholders of Maxim
are entering into voting agreements in substantially the form attached hereto
as
Exhibit B
(the
Maxim Voting Agreements
).
G. The parties intend
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 by executing this Agreement, to adopt a plan of
reorganization.
NOW, THEREFORE
, in consideration
of the covenants, promises and representations set forth herein, and for other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
ARTICLE I
THE MERGER
1.1
The Merger
. At the Effective Time and subject to and upon
the terms and conditions of this Agreement and the applicable provisions of the
DGCL, Merger Sub shall be merged with and into Maxim, the separate corporate
existence of Merger Sub shall cease and Maxim shall continue as the surviving
corporation. Maxim as the surviving
corporation after the Merger is hereinafter sometimes referred to as the
Surviving Corporation
.
1.2
Effective Time;
Closing
. Subject to the provisions
of this Agreement, the parties hereto shall cause the Merger to be consummated
by filing a Certificate of Merger (the
Certificate of Merger
)
with the Secretary of State of the State of Delaware in accordance with the
relevant provisions of the DGCL (the time of such filing with the Secretary of
State of the State of Delaware (or such later time as may be agreed in writing
by the parties and specified in the Certificate of Merger) being the
Effective Time
) as soon as practicable on the Closing Date
(as herein defined). The closing of the
Merger (the
Closing
) shall take place at the
offices of Cooley Godward LLP, located at 4401 Eastgate Mall, San Diego,
California, at a time and date to be specified by the parties, which shall be
no later than the second business day after the satisfaction or waiver of the
conditions set forth in Article VI (other than those conditions that by
their nature are to be satisfied at the Closing, but subject to the
satisfaction or waiver of those conditions at such time), or at such other
time, date and location as the parties hereto agree in writing (the
Closing Date
).
1.3
Effect of the
Merger
. At the Effective Time, the
effect of the Merger shall be as provided in this Agreement and the applicable
provisions of the DGCL. Without limiting
the generality of the foregoing, and subject thereto, at the Effective Time all
the property, rights,
2
privileges, powers and franchises of Maxim and Merger
Sub shall vest in the Surviving Corporation, and all debts, liabilities and
duties of Maxim and Merger Sub shall become the debts, liabilities and duties
of the Surviving Corporation.
1.4
Certificate of
Incorporation; Bylaws; Officers and Directors
.
(a) At the Effective Time, the Certificate of
Incorporation of the Surviving Corporation shall be amended and restated in its
entirety to read as set forth on
Exhibit C
.
(b) At the Effective Time, the Bylaws of the
Surviving Corporation shall be amended and restated in their entirety to be
identical to the Bylaws of Merger Sub, as in effect immediately prior to the
Effective Time, until thereafter amended in accordance with the DGCL and as
provided in such Bylaws.
(c) At the Effective Time, the officers of Maxim
shall be the officers of the Surviving Corporation, subject to change
thereafter, and the directors of Merger Sub shall be the directors of the
Surviving Corporation.
1.5
Effect on Capital
Stock
. Subject to the terms and
conditions of this Agreement, at the Effective Time, by virtue of the Merger
and without any action on the part of Merger Sub, Maxim or the holders of any
of the following securities, the following shall occur:
(a)
Conversion of Maxim Common Stock
. Each share of Common Stock, $0.001 par value
per share, of Maxim (the
Maxim Common Stock
)
issued and outstanding immediately prior to the Effective Time, including Maxim
Common Stock held by Maxim or any direct or indirect wholly owned subsidiary of
Maxim, but excluding any shares of Maxim Common Stock to be canceled pursuant
to Section 1.5(c), will be automatically converted into the right to
receive a number of shares of Common Stock, par value $0.0001 per share, of EpiCept
(the
EpiCept Common Stock
) equal to the
Exchange Ratio and cash in lieu of fractional shares pursuant to Section
1.5(f). For this purpose,
Exchange Ratio
shall mean 0.194034 (subject to appropriate adjustment
as a result of any inaccuracies in the capitalization representations in
Sections 2.2 and 3.2);
provided, however,
that if shares of EpiCept Common Stock are issued after the date of this
Agreement as permitted by Section 5.22, the Exchange Ratio shall
be .388889 (28 divided by 72) multiplied by a fraction the numerator of
which is 14,173,791 (the number of EpiCept shares deemed outstanding
post reverse split as determined for the calculation) plus the number
of post split shares of EpiCept Common Stock issued in
accordance with Section 5.22 and the denominator of which is 28,407,570 (the
number of Maxim shares deemed outstanding as determined for the
calculation).
(b)
Unvested Stock
. If any shares of Maxim Common Stock
outstanding immediately prior to the Effective Time are unvested or are subject
to a repurchase option, risk of forfeiture or other condition under any
applicable restricted stock purchase agreement or other agreement with Maxim,
then the shares of EpiCept Common Stock issued in exchange for such shares of Maxim
Common Stock will also be unvested and subject to the same
3
repurchase option, risk
of forfeiture or other condition, and the certificates representing such shares
of EpiCept Common Stock shall accordingly be marked with appropriate
legends. Maxim shall take all action
that may be necessary to ensure that, from and after the Effective Time, the
Surviving Corporation is entitled to exercise any such repurchase option or
other right set forth in any such restricted stock purchase agreement or other
agreement.
(c)
Cancellation of Treasury Stock
. Each share of Maxim Common Stock held by
Maxim immediately prior to the Effective Time shall be canceled and
extinguished without any conversion thereof.
(d)
Stock Options and Warrants
. At the Effective Time (i) all options to
purchase Maxim Common Stock then outstanding (the
Maxim
Options
), including options issued under Maxims Amended and
Restated 1993 Long Term Incentive Plan (the
1993 Plan
),
the Cytovia, Inc. 1998 Equity Incentive Plan, the 2000 Nonstatutory Stock
Option Plan and the 2001 Incentive Stock Option Plan (collectively, the
Maxim Stock Option Plans
), and (ii) all warrants to
purchase Maxim Common Stock then outstanding, shall be assumed by EpiCept, in
each case only to the extent provided in Section 5.9.
(e)
Capital Stock of Merger Sub
. Each share of Common Stock, $0.01 par value
per share, of Merger Sub issued and outstanding immediately prior to the
Effective Time shall be converted into and exchanged for one validly issued,
fully paid and nonassessable share of Common Stock, $0.0001 par value, of the
Surviving Corporation. Each stock
certificate of Merger Sub evidencing ownership of any such shares shall, as of
the Effective Time, evidence ownership of such shares of Common Stock of the
Surviving Corporation.
(f)
Fractional Shares
. No fraction of a share of EpiCept Common
Stock will be issued by virtue of the Merger, but in lieu thereof, each holder
of shares of Maxim Common Stock who would otherwise be entitled to receive a
fraction of a share of EpiCept Common Stock (after aggregating all fractional
shares of EpiCept Common Stock to be received by such holder) shall receive
from EpiCept an amount of cash (rounded to the nearest whole cent), without
interest, equal to the product of (i) the number of such shares of Maxim
Common Stock that would otherwise be converted into a fraction of a share of EpiCept
Common Stock, multiplied by (ii) the average of the closing sale prices of
one share of Maxim Common Stock for the five (5) most recent days that Maxim
Common Stock has traded ending on the full trading day immediately prior to the
Effective Time, as reported on the Nasdaq National Market (
Nasdaq
).
1.6
Surrender of
Certificates
.
(a)
Exchange Agent
. Prior to the Effective Time, EpiCept shall
select an institution reasonably satisfactory to Maxim to act as the exchange
agent (the
Exchange Agent
) in the Merger.
4
(b)
Maxim to Provide Common Stock
. Promptly after the Effective Time, EpiCept
shall make available to the Exchange Agent for exchange in accordance with this
Article I, (i) certificates representing the shares of EpiCept Common
Stock issuable pursuant to Section 1.5(a) in exchange for outstanding
shares of Maxim Common Stock, (ii) an
Exchange
Fund
consisting of cash in an amount sufficient for payment in lieu
of fractional shares pursuant to Section 1.5(f) and any dividends or
distributions to which holders of shares of Maxim Common Stock may be entitled
pursuant to Section 1.6(d).
(c)
Exchange Procedures
. Promptly after the Effective Time, EpiCept
shall cause the Exchange Agent to mail to each holder of record (as of the
Effective Time) to such holders address of record of a certificate or
certificates (the
Certificates
)
that immediately prior to the Effective Time represented outstanding shares of Maxim
Common Stock whose shares were converted into shares of EpiCept Common Stock
pursuant to Section 1.5, cash in lieu of any fractional shares pursuant to
Section 1.5(f) and any dividends or other distributions pursuant to
Section 1.6(d), (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 EpiCept may reasonably
specify), (ii) instructions for use in effecting the surrender of the
Certificates in exchange for certificates representing whole shares of EpiCept
Common Stock, cash in lieu of any fractional shares pursuant to Section 1.5(f)
and any dividends or other distributions pursuant to Section 1.6(d), and
(iii) such other documents as may reasonably be required by the Exchange
Agent. Upon surrender of Certificates
for cancellation to the Exchange Agent or to such other agent or agents as may
be appointed by EpiCept, together with such letter of transmittal, duly
completed and validly executed in accordance with the instructions thereto and
such other documents as may reasonably be required by the Exchange Agent, each
holder of a Certificate shall be entitled to receive in exchange therefor
certificates representing the number of whole shares of EpiCept Common Stock
(after taking into account all Certificates surrendered by such holder) to
which such holder is entitled pursuant to Section 1.5(a) (which shall be
in uncertificated book entry form unless a physical certificate is requested or
is otherwise required by applicable law rule or regulation), payment in lieu of
fractional shares which such holder has the right to receive pursuant to
Section 1.5(f) and any dividends or distributions payable pursuant to
Section 1.6(d), and the Certificates so surrendered shall forthwith be
canceled. Until so surrendered,
outstanding Certificates will be deemed from and after the Effective Time, for
all corporate purposes, to evidence the ownership of, the number of whole
shares of EpiCept Common Stock issuable pursuant to Section 1.5(a), and
the right to receive an amount of cash in lieu of the issuance of any
fractional shares in accordance with Section 1.5(f) and any dividends or
distributions payable pursuant to Section 1.6(d).
(d)
Distributions With Respect to Unexchanged
Shares
. No dividends or other
distributions declared or made after the date of this Agreement with respect to
EpiCept Common Stock with a record date after the Effective Time and no payment
in lieu of fractional shares pursuant to Section 1.5(f) will be paid to the
holder of any unsurrendered
5
Certificate with respect
to the shares of EpiCept Common Stock issuable pursuant to Section 1.5,
until the holder of record of such Certificate shall surrender such Certificate. Subject to applicable law, following
surrender of any such Certificates, the Exchange Agent or any other agent
designated by EpiCept shall deliver to the holders thereof, without interest,
(i) promptly after such surrender, the number of whole shares of EpiCept
Common Stock issued in exchange therefor along with payment in lieu of
fractional shares pursuant to Section 1.5(f) and the amount of any such
dividends or other distributions with a record date after the Effective Time
and theretofore paid with respect to such whole shares of EpiCept Common Stock
and (ii) at the appropriate payment date, the amount of dividends or other
distributions with a record date after the Effective Time and a payment date
subsequent to such surrender payable with respect to such whole shares of EpiCept
Common Stock.
(e)
Transfers of Ownership
. If certificates for shares of EpiCept Common
Stock are to be issued in a name other than that in which the Certificates
surrendered in exchange therefor are registered, it will be a condition of the
issuance thereof that the Certificates so surrendered will be properly endorsed
and otherwise in proper form for transfer and that the persons requesting such
exchange will have paid to EpiCept or any agent designated by it any transfer
or other taxes required by reason of the issuance of certificates for shares of
EpiCept Common Stock in any name other than that of the registered holders of
the Certificates surrendered, or established to the reasonable satisfaction of EpiCept
or any agent designated by it that such tax has been paid or is not payable.
(f)
Required Withholding
. Each of EpiCept, the Exchange Agent and the
Surviving Corporation shall be entitled to deduct and withhold from any
consideration payable or otherwise deliverable pursuant to this Agreement to
any former holder of Maxim Common Stock such amounts as may be required to be
deducted or withheld therefrom under the Code and the rules and regulations
promulgated thereunder, or under any provision of state, local or foreign tax
law or under any other applicable legal requirement. To the extent such amounts are so deducted or
withheld, the amount of such consideration shall be treated for all purposes
under this Agreement as having been paid to the person to whom such consideration
would otherwise have been paid.
(g)
No Liability
. Notwithstanding anything to the contrary in
this Section 1.6, none of the Exchange Agent, the Surviving Corporation or
any party hereto shall be liable to a holder of shares Maxim Common Stock for
any amount properly paid to a public official pursuant to any applicable
abandoned property, escheat or similar law.
(h)
Investment of Exchange Fund
. The Exchange Agent shall invest any cash
included in the Exchange Fund as directed by EpiCept on a daily basis;
provided
that no such investment or loss thereon shall affect the amounts payable to Maxim
stockholders pursuant to this Section 1.6.
Any interest and other income resulting from such investment shall
become a part of the Exchange Fund, and any amounts in excess of the amounts
payable to Maxim stockholders pursuant to this Section 1.6 shall promptly be
paid to EpiCept.
6
(i)
Termination of Exchange Fund
. Any portion of the Exchange Fund which remains
undistributed to the holders of Certificates six (6) months after the Effective
Time shall, at EpiCepts request, be delivered to EpiCept and any holders of
the Certificates who have not surrendered such Certificates in compliance with
this Section 1.6 shall after such delivery to EpiCept look only to EpiCept
for the shares of EpiCept Common Stock pursuant to Section 1.5(a), cash in
lieu of fractional shares pursuant to Section 1.5(f) and any dividends or
other distributions pursuant to Section 1.6(d) with respect to the shares
of Maxim Common Stock formerly represented thereby. Any such portion of the Exchange Fund
remaining unclaimed by holders of shares of Maxim Common Stock immediately
prior to such time as such amounts would otherwise escheat to or become
property of any Governmental Entity (as defined in Section 2.4(b)) shall,
to the extent permitted by law, become the property of EpiCept free and clear
of any claims or interest of any Person previously entitled thereto.
1.7
No Further
Ownership Rights in EpiCept Common Stock
. All shares of EpiCept Common Stock issued in
accordance with the terms hereof (including any cash paid in respect thereof
pursuant to Section 1.5(f) and 1.6(d)) shall be deemed to have been issued
in full satisfaction of all rights pertaining to such shares of Maxim Common
Stock, and there shall be no further registration of transfers on the records
of the Surviving Corporation of shares of Maxim Common Stock that were
outstanding immediately prior to the Effective Time. If, after the Effective Time, Certificates
are presented to the Surviving Corporation for any reason, they shall be
canceled and exchanged as provided in this Article I.
1.8
Lost, Stolen or
Destroyed Certificates
. In the event
that any Certificates shall have been lost, stolen or destroyed, the Exchange
Agent shall issue and pay in exchange for such lost, stolen or destroyed
Certificates, upon the making of an affidavit of that fact by the holder
thereof, such shares of EpiCept Common Stock to which such holder is entitled
pursuant to Section 1.5(a), cash for fractional shares, if any, as may be
required pursuant to Section 1.5(f) and any dividends or distributions
payable pursuant to Section 1.6(d);
provided, however,
that EpiCept may, in its discretion and as a condition precedent to the
issuance and payment thereof, require the owner of such lost, stolen or
destroyed Certificates to deliver a bond in such sum as it may reasonably
direct as indemnity against any claim that may be made against EpiCept, Maxim
or the Exchange Agent with respect to the Certificates alleged to have been
lost, stolen or destroyed.
1.9
Tax Consequences
.
It is intended by the parties hereto
that the Merger shall constitute a reorganization within the meaning of
Section 368 of the Code. The
parties hereto adopt this Agreement as a plan of reorganization within the
meaning of Sections 1.368-2(g) and 1.368-3(a) of the United
States Income Tax Regulations promulgated under the Code (the
Treasury Regulations
).
1.10
Taking of Necessary
Action; Further Action
. If, at any
time after the Effective Time, any further action is necessary or desirable to
carry out the purposes of this Agreement and to vest the Surviving Corporation
with full right, title and possession to all assets, property,
7
rights, privileges, powers and franchises of Maxim and
Merger Sub, the officers and directors of Maxim and Merger Sub will take all
such lawful and necessary action.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF EPICEPT AND MERGER SUB
EpiCept and Merger Sub represent and warrant to Maxim,
subject to such exceptions as are disclosed in writing in the disclosure
schedule supplied by EpiCept to Maxim, dated as of the date hereof and
certified by a duly authorized officer of EpiCept (the
EpiCept
Disclosure Schedule
), which disclosure in the EpiCept Disclosure
Schedule shall provide an exception to or otherwise qualify the representations
and warranties of EpiCept and Merger Sub contained in the section of this
Agreement corresponding by number to such disclosure and the other
representations and warranties herein to the extent such disclosure is readily
apparent on its face to be applicable to such other representations or
warranties, as follows:
2.1
Organization of EpiCept
.
(a) EpiCept, Merger Sub and each of EpiCepts
subsidiaries is a corporation duly organized, validly existing and, to the
extent applicable in such jurisdiction, in good standing under the laws of the
jurisdiction of its incorporation; has the corporate power and authority to
own, lease and operate its assets and property and to carry on its business as
now being conducted and as proposed to be conducted; and is duly qualified to
do business and, to the extent applicable in such jurisdiction, in good
standing as a foreign corporation in each jurisdiction in which the failure to
be so qualified, individually or in the aggregate, would have a Material
Adverse Effect (as defined in Section 8.3) on EpiCept.
(b) EpiCept has delivered to Maxim a true and
complete list of all of EpiCepts subsidiaries, indicating the jurisdiction of
incorporation of each subsidiary and EpiCepts equity interest therein.
(c) EpiCept has delivered or made available to Maxim
a true and correct copy of the Certificate of Incorporation and Bylaws of EpiCept
and similar governing instruments of each of its subsidiaries, including a
recent excerpt from the commercial register (
Handelsregisterauszug
)
for EpiCept GmbH, each as amended to date, and each such instrument is in full
force and effect. Neither EpiCept nor
any of its subsidiaries is in violation of any of the provisions of its
Certificate of Incorporation or Bylaws or equivalent governing instruments.
2.2
EpiCept Capital
Structure
.
(a) As of the date hereof, the authorized capital
stock of EpiCept consists of (i) 60,000,000 shares of EpiCept Common
Stock, and (ii) 19,632,262 shares of Preferred Stock, par value $0.0001
per share, of which (A) 3,422,620 shares are designated as Series A Convertible
Preferred Stock, (B) 3,440,069 shares are designated as Series B Convertible
8
Preferred Stock, and (C)
12,769,573 shares are designated as Series C Convertible Preferred Stock. As of the close of business on August 31,
2005, 6,796,985 shares of EpiCept Common Stock were issued and outstanding,
3,368,385 shares of EpiCepts Series A Convertible Preferred Stock were issued
and outstanding, 3,106,736 shares of EpiCepts Series B Convertible Preferred
Stock were issued and outstanding, 8,839,573 shares of EpiCepts Series C
Convertible Preferred Stock were issued and outstanding, and no other shares of
EpiCept Preferred Stock were issued or outstanding and no shares of EpiCept
Common Stock were held by EpiCept or any direct or indirect wholly owned
subsidiary of EpiCept. As of August 31,
2005, EpiCept had reserved an aggregate of 2,987,770 shares of EpiCept Common
Stock for issuance pursuant to EpiCepts 1995 Stock Option Plan (the
EpiCept Stock Option Plan
), of which 1,778,000 shares were
issuable upon exercise of outstanding stock options (the
EpiCept
Options
). As of August 31,
2005, EpiCept had fully reserved shares pursuant to outstanding and exercisable
warrants to purchase 1,083,333 shares of EpiCept Preferred Stock and 15,445,858
shares of EpiCept Common Stock (plus shares of EpiCept Common Stock issuable
upon the exercise of the Sanders Warrants) (collectively, the
EpiCept Warrants
).
As of August 31, 2005, EpiCept had fully reserved shares of EpiCept Common
Stock for issuance pursuant to (i) outstanding convertible notes issued by
EpiCept (other than the Sanders Notes) in an aggregate amount, inclusive of
accrued and unpaid interest and net of the notes to be used to exercise EpiCept
Warrants, of $6,542,650 which are convertible into 6,674,218 shares of EpiCept
Common Stock (other than the Sanders Notes, collectively, the
EpiCept Convertible Notes
), and (ii) outstanding
convertible notes issued by EpiCept GmbH in an aggregate principal amount of
2,045,168 euros which are convertible into 1,131,541 shares of EpiCept Common
Stock (collectively, the
Subsidiary Notes
). Except as set forth in the immediately
preceding three sentences, no shares of capital stock or other equity
securities of EpiCept are issued, reserved for issuance or outstanding. All of the outstanding shares of EpiCepts
capital stock have been duly authorized and validly issued and are fully paid
and nonassessable. All shares of EpiCept
Common Stock subject to issuance as aforesaid, upon issuance on the terms and
conditions specified in the instruments pursuant to which they are issuable,
shall be duly authorized, validly issued, fully paid and nonassessable. For purposes of this Agreement,
Sanders Warrants
means (i) that certain Amended and
Restated Stock Purchase Warrant, dated August 26, 2005, issued by EpiCept to
Sanders Opportunity Fund, L.P. and (ii) that certain Amended and Restated Stock
Purchase Warrant, dated August 26, 2005, issued by EpiCept to Sanders
Opportunity Fund (Institutional), L.P., and
Sanders
Notes
means (i) that certain 8% Senior Note Due 2006, dated March
3, 2005, issued by EpiCept to Sanders Opportunity Fund, L.P. and (ii) that
certain 8% Senior Note Due 2006, dated March 3, 2005, issued by EpiCept to
Sanders Opportunity Fund (Institutional), L.P.
(b) Section 2.2 of the EpiCept Disclosure
Schedule sets forth for each outstanding EpiCept Option and EpiCept
Warrant as of the date hereof, (i) the name of the holder of such EpiCept
Option or EpiCept Warrant, (ii) the EpiCept Stock Option Plan pursuant to
which such option was issued, (iii) the number of shares of EpiCept Common
Stock or EpiCept Preferred Stock issuable upon the exercise of such EpiCept
Option or
9
EpiCept Warrant,
(iv) the exercise price of such EpiCept Option or EpiCept Warrant, (v) the
date on which such EpiCept Option or EpiCept Warrant was granted, (vi) the
applicable vesting schedule for such EpiCept Option or EpiCept Warrant, and
(vii) the date on which such EpiCept Option or EpiCept Warrant expires.
(c) The EpiCept Warrants (other than the Sanders
Warrants) provide that (i) such EpiCept Warrants shall be exercisable only for
shares of EpiCept Common Stock immediately prior to the Effective Time and (ii)
such EpiCept Warrants will expire if not exercised prior to the Effective
Time. The EpiCept Convertible Notes (other
than the Sander Notes) provide that the principal amount and all accrued
interest thereon will be automatically converted into shares of EpiCept Common
Stock, in full satisfaction of such indebtedness, immediately prior to the
Effective Time.
(d) Immediately prior to the Effective Time (but
without giving effect to the EpiCept reverse stock split described in Section
5.20 and except as contemplated by Section 5.22), upon (i) the exercise of all
EpiCept Warrants (other than the Sanders Warrants) for shares of EpiCept Common
Stock, (ii) the conversion of all EpiCept Convertible Notes into shares of
EpiCept Common Stock and (iii) the conversion of all EpiCept Preferred Stock
into shares of EpiCept Common Stock, there will be (x) 53,927,401 shares of
EpiCept Common Stock issued and outstanding, plus (1) shares of EpiCept Common
Stock issuable upon the exercise of the Sanders Warrants, (2) 1,131,541 shares
of EpiCept Common Stock issued or deemed to be issued upon conversion of the
Subsidiary Notes, and (3) shares of EpiCept Common Stock issuable upon the
conversion of the post August 31, 2005 accrued and unpaid interest portion of the
EpiCept Convertible Notes, (y) no shares of EpiCept Preferred Stock issued and
outstanding and (z) EpiCept Options to purchase 1,778,000 shares of EpiCept
Common Stock. Except as set forth in the
immediately preceding sentence, no shares of capital stock or other equity
securities of EpiCept will be issued, reserved for issuance or outstanding
immediately prior to the Effective Time, other than shares issuable upon
conversion of the Sanders Notes and, if the Sanders Warrant and the Subsidiary
Notes are not exercised or exchanged prior to the Effective Time for shares of
Common Stock, then shares issuable upon the exercise or exchange thereof. EpiCept agrees to use commercially reasonable
efforts to amend the Sanders Warrants to be substantially in form delivered to
Maxim prior to the date of this Agreement.
2.3
Obligations With
Respect to Capital Stock
. As of the
date hereof, except as set forth in Section 2.2, there are no equity
securities, partnership interests or similar ownership interests of any class
of EpiCept, or any securities or rights exchangeable or convertible into or
exercisable for such equity securities, partnership interests or similar
ownership interests issued, reserved for issuance or outstanding. As of the date hereof, except for securities EpiCept
owns, directly or indirectly through one or more subsidiaries, there are no
equity securities, partnership interests or similar ownership interests of any
class of any subsidiary of EpiCept, or any security or rights exchangeable or
convertible into or exercisable for such equity securities, partnership
interests or similar ownership interests issued, reserved for issuance or
outstanding. As of the
10
date hereof, except as set forth in Section 2.2,
there are no options, warrants, equity securities, partnership interests or
similar ownership interests, calls, rights (including preemptive rights),
commitments or agreements of any character to which EpiCept or any of its
subsidiaries is a party or by which it is bound obligating EpiCept or any of
its subsidiaries to issue, deliver or sell, or cause to be issued, delivered or
sold, or repurchase, redeem or otherwise acquire, or cause the repurchase,
redemption or acquisition, of any shares of capital stock of EpiCept or any of
its subsidiaries or obligating EpiCept or any of its subsidiaries to grant,
extend, accelerate the vesting of or enter into any such option, warrant,
equity security, partnership interest or similar ownership interest, call,
right, commitment or agreement. There
are no registration rights and, to the Knowledge of EpiCept there are no voting
trusts, proxies or other agreements or understandings with respect to the
registration or voting of any equity security of any class of EpiCept or with
respect to the registration or voting of any equity security, partnership
interest or similar ownership interest of any class of any of its subsidiaries.
2.4
Authority
.
(a) Each of EpiCept and Merger Sub has all
requisite corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of this Agreement,
the filing of (i) the amendment to the Certificate of Incorporation with
respect to the conversion of the EpiCept Preferred Stock (the
Conversion Amendment
), (ii) the amendment to the
Certificate of Incorporation to effect the reverse stock split provided in
Section 5.20 (the
Reverse Split Amendment
)
and (iii) the Amended and Restated Certificate of Incorporation pursuant to the
DGCL and the consummation of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part of EpiCept. This Agreement has been duly executed and
delivered by EpiCept and Merger Sub and, assuming the due authorization,
execution and delivery by Maxim, constitutes a valid and binding obligation of EpiCept
and Merger Sub, enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy and other similar laws and general
principles of equity. The execution and
delivery of this Agreement by EpiCept and Merger Sub does not, and the
performance of this Agreement by EpiCept and Merger Sub will not,
(i) conflict with or violate the Certificate of Incorporation or Bylaws of
EpiCept or Merger Sub or the equivalent organizational documents of any of EpiCepts
subsidiaries, (ii) subject to compliance with the requirements set forth
in Section 2.4(b) below, conflict with or violate any law, rule,
regulation, order, judgment or decree (each a
Legal
Requirement
) applicable to EpiCept, Merger Sub or any of EpiCepts
subsidiaries or by which its or any of their respective properties is bound or
affected, or (iii) result in any breach of or constitute a default (or an
event that with notice or lapse of time or both would become a default) under,
or impair EpiCepts rights or alter the rights or obligations of EpiCept or any
third party under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of a lien or
encumbrance on any of the properties, including any leased real property, or
assets of EpiCept or any of its subsidiaries pursuant to, any EpiCept Contract
(as defined in Section 2.15). The EpiCept
Disclosure Schedule lists all consents, waivers and approvals under any of EpiCepts
11
or any of its
subsidiaries agreements, contracts, licenses or leases required to be
obtained, other than those already obtained, in connection with the
consummation of the transactions contemplated hereby, which, if not obtained,
would have a Material Adverse Effect on EpiCept or the Surviving Corporation or
have a material adverse effect on the ability of the parties to consummate the Merger.
(b) No consent, approval, order or authorization
of, or registration, declaration or filing with any court, administrative
agency or commission or other governmental authority or instrumentality (
Governmental Entity
) is required by or with respect to EpiCept,
Merger Sub or any of EpiCepts 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 Certificate of
Merger with the Secretary of State of the State of Delaware, (ii) the
filing of the Proxy Statement/Prospectus (as defined in Section 2.17) with
the Securities and Exchange Commission (the
SEC
)
in accordance with the Securities Exchange Act of 1934, as amended (the
Exchange Act
), to be included in the Form S-4
Registration Statement (the
Registration Statement
)
to be filed by EpiCept with the SEC in accordance with the Securities Act of
1933, as amended (the
Securities Act
),
and the effectiveness of the Registration Statement, (iii) such consents,
approvals, orders, authorizations, registrations, declarations and filings as
may be required under applicable federal and state securities laws, Nasdaq and
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
HSR Act
), and the comparable laws of any foreign country
reasonably determined by the parties to be required, (iv) the listing of
the EpiCept Common Stock for trading on Nasdaq and the Stockholm Stock
Exchange, (v) the filing of the Conversion Amendment, the Reverse Split
Amendment and the Amended and Restated Certificate of Incorporation, and (vi) such
other consents, authorizations, filings, approvals and registrations which, if
not obtained or made, would not be material to EpiCept or Maxim or have a material
adverse effect on the ability of the parties to consummate the Merger. The consents, approvals, orders,
authorizations, registrations, declarations and filings set forth in
(i) through (v) are referred to herein as the
Necessary
Consents
.
2.5
EpiCept Financial
Statements
. EpiCept has delivered or
made available to Maxim true and complete copies of (i) the audited
consolidated balance sheets of EpiCept and its subsidiaries as of December 31,
2003 and 2004, and the related audited statements of operations, preferred
stock and stockholders deficit and cash flows for the three years ended
December 31, 2004, together with all related notes and any required schedules
thereto, and (ii) the unaudited consolidated balance sheet of EpiCept and its
subsidiaries as of June 30, 2005 and the related statements of operations and
cash flows for the six months ended June 30, 2005 (collectively, the
EpiCept Financials
).
The EpiCept Financials (including, in each case, any notes thereto) were
prepared in accordance with United States generally accepted accounting
principles (
GAAP
) applied on a consistent
basis throughout the periods involved (except as may be indicated in the notes
thereto or, in the case of unaudited interim financials, as permitted by GAAP)
and each present fairly in all material respects the consolidated financial
position of EpiCept and its subsidiaries at the respective dates thereof and
the consolidated results of its
12
operations and cash flows for the periods indicated,
except that the unaudited interim financials were or are subject to normal and
recurring year-end adjustments which were not, or are not expected to be,
material in amount. The unaudited
balance sheet of EpiCept and its subsidiaries as of June 30, 2005 is
hereinafter referred to as the
EpiCept Balance Sheet.
Except as disclosed in the EpiCept
Financials, neither EpiCept nor any of its subsidiaries has any liabilities
(absolute, accrued, contingent or otherwise) of a nature required to be
disclosed on a balance sheet or in the related notes to the consolidated
financial statements prepared in accordance with GAAP which are, individually
or in the aggregate, material to the business, results of operations or
financial condition of EpiCept and its subsidiaries taken as a whole, except
liabilities incurred since the date of the EpiCept Balance Sheet in the
ordinary course of business consistent with past practices.
2.6
Absence of
Certain Changes or Events
.
(a) Since the date of the EpiCept Balance Sheet,
there has not been: (i) any Material Adverse Effect on EpiCept,
(ii) any change by EpiCept in its accounting methods, principles or
practices, except as required by concurrent changes in GAAP or the rules and
regulations promulgated by the SEC, (iii) any revaluation by EpiCept of
any of its assets including writing down the value of capitalized inventory or
writing off notes or accounts receivable other than in the ordinary course of
business, or (iv) other than pursuant to the Amended and Restated
Certificate of Incorporation, any split, combination or reclassification of any
of EpiCepts or any of its subsidiaries capital stock.
(b) From December 31, 2004 until the date of this
Agreement, EpiCept and its subsidiaries have not taken or legally committed to
take any of the actions specified in Sections 4.1(a) through 4.1(y).
2.7
Taxes
.
(a)
Definitions
. For the purposes of this Agreement,
Tax
or
Taxes
refers
to (i) all federal, state, local and foreign taxes, assessments and other
governmental charges, duties, impositions and liabilities, including taxes
based upon or measured by gross receipts, income, profits, sales, use and
occupation, and value added, ad valorem, transfer, franchise, withholding,
payroll, recapture, employment, social security, unemployment, national health
and geriatric care taxes, excise, severance, stamp, occupation and property
taxes, customs duties, fees and charges of any kind, (ii) all interest,
penalties, fines, additions to tax or additional amounts imposed by any Taxing
Authority in connection with any item described in clause (i), and (iii) any
transferee liability in respect of any items described in clauses (i) and/or
(ii) payable by reason of contract, assumption, transferee liability, operation
of Law, Treasury Regulation Section 1.1502-6(a) (or any predecessor or
successor thereof of any analogous or similar provision under Law) or
otherwise.
Taxing
Authority
means any taxing or other Governmental Body responsible
for the administration of any Tax.
13
(b)
Tax Returns and Audits
.
(i) EpiCept and each of its
subsidiaries have timely filed all material federal, state, local and foreign
returns, estimates, information statements and reports (
Returns
)
relating to Taxes required to be filed by EpiCept and each of its subsidiaries
with any Tax authority. Such Returns are
true and correct in all material respects and have been completed in accordance
with applicable law. EpiCept and each of
its subsidiaries have paid all Taxes shown to be due on such Returns.
(ii) Neither EpiCept nor any of its
subsidiaries has been delinquent in the payment of any material Tax nor is
there any material Tax deficiency or adjustment outstanding, proposed or
assessed against EpiCept or any of its subsidiaries, nor has EpiCept or any of
its subsidiaries executed any unexpired waiver of any statute of limitations on
or extending the period for the assessment or collection of any material Tax.
(iii) No audit or administrative or court
proceeding with respect to any material Return of EpiCept or any of its
subsidiaries by any Governmental Authority is presently in progress, nor has EpiCept
or any of its subsidiaries been notified in writing of any request for such an
audit or other proceeding.
(iv) Neither EpiCept nor any of its
subsidiaries had, as of June 30, 2005, any liability for any material unpaid
Taxes that has not been accrued or reserved against on the EpiCept Balance
Sheet in accordance with GAAP, whether asserted or unasserted, contingent or
otherwise. Since June 30, 2005, neither EpiCept
nor any of its subsidiaries has incurred any liability for any material Taxes
other than in the ordinary course of business.
(v) There is no contract, agreement, plan
or arrangement to which EpiCept or any of its subsidiaries is a party as of the
date of this Agreement, including but not limited to the provisions of this
Agreement, covering any employee or former employee of EpiCept or any of its
subsidiaries that, individually or collectively, would reasonably be expected
to give rise to the payment that would not be deductible pursuant to
Sections 404 or 280G or 162(m) of the Code. There is no contract, agreement, plan or
arrangement to which EpiCept or any of its subsidiaries is a party or by which
it is bound to compensate any individual for excise taxes paid pursuant to
Section 4999 of the Code.
(vi) Neither EpiCept nor any of its
subsidiaries (a) is party to or has any obligation under any Tax sharing,
indemnity or allocation agreement or arrangement, (b) has ever been a
member of an affiliated group (within the meaning of Code §1504(a)) filing a
consolidated federal income Tax Return (other than a group the common parent of
which was EpiCept), or (c) has any liability for the Taxes of any person
(other than EpiCept or any of its subsidiaries) under Treas. Reg. § 1.1502-6
(or any similar provision of state, local or foreign law), as a transferee or
successor, by contract, or otherwise.
14
(vii) Neither EpiCept nor any of its
subsidiaries has constituted either a distributing corporation or a controlled
corporation in a distribution of stock intended to qualify for tax-free
treatment under Section 355 of the Code (x) in the two years prior to
the date of this Agreement or (y) in a distribution which could otherwise
constitute part of a plan or series of related transactions (within the
meaning of Section 355(e) of the Code) in conjunction with the Merger.
(viii) EpiCept is not and has not been a United
States real property holding corporation within the meaning of Section 897 of
the Code during the five-year period ending on the Closing Date.
(ix) EpiCept has made available to Maxim
correct and complete copies of (i) all income and other material Returns of the
EpiCept and its subsidiaries for the preceding three taxable years and (ii) any
audit report issued within the last three years (or otherwise with respect to
any audit or proceeding in progress) relating to all income and other material
Taxes of EpiCept or any of its subsidiaries.
(x) No claim has been made by a Taxing
Authority in a jurisdiction where EpiCept or any of its subsidiaries does not
file Returns that EpiCept or a subsidiary of EpiCept is or may be subject to
taxation in that jurisdiction.
2.8
EpiCept
Intellectual Property
. For the
purposes of this Agreement, the following terms have the following definitions:
Intellectual Property
shall mean U.S. and foreign rights under patent, copyright, trademark or trade
secret law or any other similar statutory provision or common law doctrine.
Software
shall
mean computer programs whether in source code or object code form, together
with all related documentation.
Technology
shall mean, collectively, designs, formulas, formulations, compounds, cell
lines, clinical, pre-clinical and technical data, algorithms, procedures,
models, methods, techniques, discoveries, ideas, know-how, Software, tools,
data, databases, confidential and proprietary information, trade secrets,
inventions (whether patentable or not), creations, improvements, works of
authorship, and all recordings, graphs, drawings, reports, analyses, other
writings, documentation and any other embodiment of the above, in any form whether
or not specifically listed herein, and all related technology, that are used
in, incorporated in, embodied in or displayed by any of the foregoing, or used
or useful in the design, development, reproduction, maintenance or modification
of any of the foregoing.
EpiCept Intellectual Property
shall
mean any Intellectual Property that is owned by, or exclusively licensed to, EpiCept
or any of its subsidiaries.
15
Registered Intellectual Property
means
all United States, international and foreign: (i) Patents and Patent
applications (including provisional applications); (ii) registered
Trademarks, applications to register Trademarks, intent-to-use
applications, or other registrations or applications related to Trademarks;
(iii) registered Copyrights and applications for Copyright registration;
and (iv) any other Intellectual Property that is the subject of an
application, certificate, filing, registration or other document issued, filed
with, or recorded by any state, government or other public legal authority.
EpiCept Registered Intellectual Property
means all of the Registered Intellectual Property owned by, or filed in the
name of, EpiCept or any of its subsidiaries.
(a) Section 2.8(a) of the EpiCept Disclosure
Schedule sets forth a complete and accurate list of all registered patents,
trademarks, service marks and copyrights (collectively, the EpiCept Registered
Intellectual Property) and pending applications therefor, owned by EpiCept or
any of its subsidiaries, including the jurisdictions in which such
registrations or applications for registration have been filed. Section 2.8(a) of the EpiCept
Disclosure Schedule lists any proceedings or actions before any court, tribunal
or regulatory body (including the United States Patent and Trademark Office (PTO)
or equivalent authority anywhere in the world) related to EpiCept Registered
Intellectual Property.
(b) To the Knowledge of EpiCept, except as set
forth in Section 2.8(b) of the EpiCept Disclosure Schedule no Intellectual
Property or product or service owned by EpiCept or any of its subsidiaries is
subject to any proceeding or outstanding decree, order, judgment, contract,
license, agreement, or stipulation restricting in any manner the use, transfer,
or licensing thereof by EpiCept or any of its subsidiaries in a manner that
would reasonably be expected to have a Material Adverse Effect, or that may
affect the validity, use or enforceability of such Intellectual Property owned
by EpiCept in a manner that would reasonably be expected to have a Material
Adverse Effect.
(c) To the Knowledge of EpiCept, (i) except with
respect to any registered trademark or service mark that EpiCept is no longer
using, each material item of EpiCept Registered Intellectual Property is valid
and subsisting; (ii) all necessary registration, maintenance and renewal fees
currently due in connection with such EpiCept Registered Intellectual Property
have been made and all necessary documents, recordations and certificates in
connection with such EpiCept Registered Intellectual Property have been filed
with the relevant authorities in the United States or foreign jurisdictions, as
the case may be, for the purposes of maintaining such EpiCept Registered
Intellectual Property; and (iii) except as set forth in Section 2.8(c) of
the EpiCept Disclosure Schedule, there are no actions that must be taken by EpiCept
within 120 days of the Closing Date, including the payment of any registration,
renewal or maintenance fees or the filing of any responses to PTO office
actions, documents, applications or certificates for the purposes of obtaining,
maintaining, perfecting or renewing any such registrations and applications.
16
(d) Except with respect to licenses of Software
generally available for an annual license fee of no more than $25,000,
Section 2.8(d) of the EpiCept Disclosure Schedule sets forth a complete
and accurate list of all contracts, licenses and agreements pursuant to which EpiCept
or its subsidiaries licenses or otherwise is authorized to use any Technology
or Intellectual Property of a third party used in the businesses of EpiCept and
its subsidiaries, and all such contracts, licenses and agreements are in full
force and effect. Following the Closing,
EpiCept will continue to be permitted to exercise all of its rights under such
contracts, licenses and agreements to the same extent and in the same manner EpiCept
would have been able to had the transaction not occurred, and without the
payment of any additional consideration and without the necessity of any third
party consent. Except pursuant to the
licenses set forth on Section 2.8(d) of the EpiCept Disclosure Schedule,
neither EpiCept nor any of its subsidiaries is obligated to make any payments
by way of royalties, fees or otherwise to any third party with respect to use
of any Intellectual Property or Technology used in the business of EpiCept and
its subsidiaries.
(e) Section 2.8(e) of the EpiCept Disclosure
Schedule sets forth a complete and
accurate list of all contracts, licenses and agreements pursuant to which any EpiCept
Intellectual Property has been licensed to any third party. All such contracts, licenses and agreements
are in full force and effect and, to the Knowledge of EpiCept or any of its
subsidiaries, no third party has materially breached any term thereof.
(f) EpiCept and its subsidiaries have taken
reasonable steps to protect the proprietary status of confidential information
and trade secrets owned by EpiCept and its subsidiaries and of any confidential
information or trade secrets of third parties provided to EpiCept or any of its
subsidiaries (to the extent subject to confidentiality restrictions). Except where the failure to do so would not
reasonably be expected to have a Material Adverse Effect, EpiCept and its
subsidiaries have (i) executed valid and enforceable written agreements with
all of their employees by which the employees have (A) acknowledged the work
for hire status of Technology and Intellectual Property they may develop
during their employment; (B) agreed to assign to EpiCept or its subsidiaries
all their rights in and to any Technology and Intellectual Property they may
develop during their employment that does not qualify as a work for hire; and
(C) agreed to hold all confidential information of EpiCept and its subsidiaries
in confidence both during and after their employment; and (ii) executed valid
and enforceable written agreements with all consultants and contractors who have
been retained in connection with the development of Technology and Intellectual
Property by which the consultants and contractors have agreed to assign to EpiCept
or its subsidiaries all their rights in and to such Technology and Intellectual
Property and agreed to hold all confidential information of EpiCept and its
subsidiaries in confidence both during and after the term of their engagements.
(g) To the Knowledge of EpiCept, (i) all
Intellectual Property used in or necessary to the conduct of EpiCepts and each
of its subsidiaries businesses as presently conducted or currently
contemplated to be conducted by EpiCept and its subsidiaries is either
17
owned exclusively by EpiCept or is the subject of a
valid and enforceable license agreement; and (ii) the products, services and
the operation of the business of EpiCept and its subsidiaries as such business
currently is conducted, including EpiCepts and its subsidiaries design,
development, manufacture, marketing and sale of the products or services of EpiCept
and its subsidiaries (including products currently under development) do not
infringe or misappropriate the Intellectual Property of any third party or
constitute unfair competition or trade practices under the laws of any
jurisdiction. Except as set forth in Section 2.8(g) of the EpiCept
Disclosure Schedule, neither EpiCept nor any of its subsidiaries has received
notice from any third party that the operation of the business of EpiCept or
any of its subsidiaries or any act, product or service of EpiCept or any of its
subsidiaries, infringes or misappropriates the Intellectual Property of any
third party or constitutes unfair competition or trade practices under the laws
of any jurisdiction in a manner that would reasonably be expected to have a
Material Adverse Effect.
2.9
Compliance;
Permits; Restrictions
.
(a) Neither EpiCept nor any of its subsidiaries
nor the conduct of their respective businesses is, in any material respect, in
conflict with, or in default or violation of, any Legal Requirement applicable
to EpiCept or any of its subsidiaries or by which its or any of their
respective businesses or properties is bound or affected. No investigation or review by any
Governmental Entity is pending or, to the Knowledge of EpiCept, threatened
against EpiCept or its subsidiaries, nor has any Governmental Entity indicated
to EpiCept or any of its subsidiaries an intention to conduct the same. There is no agreement, judgment, injunction,
order or decree binding upon EpiCept or any of its subsidiaries which has or
could reasonably be expected to have the effect of prohibiting or materially
impairing any business practice of EpiCept or any of its subsidiaries, any
acquisition of material property by EpiCept or any of its subsidiaries or the
conduct of business by EpiCept or any of its subsidiaries as currently
conducted or presently proposed to be conducted.
(b) EpiCept and its subsidiaries hold all
permits, licenses, variances, exemptions, orders and approvals from
governmental authorities that are material to the operation of the business of EpiCept,
or any of its subsidiaries, as the case may be, including such permits,
licenses, approvals, consents and other authorizations issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies
(collectively, the
EpiCept Permits
). EpiCept and its subsidiaries are in
compliance in all material respects with the terms of the EpiCept Permits.
2.10
Litigation
. There is no suit, action, judgment,
proceeding, claim, arbitration or investigation (each an
Action
)
pending or, to the Knowledge of EpiCept, threatened, against or affecting EpiCept
or any subsidiary of EpiCept or any property or asset of EpiCept or any
subsidiary of EpiCept which, individually or in the aggregate, would reasonably
be expected to have a Material Adverse Effect on EpiCept, or which in any
manner seeks to prevent, enjoin, alter or delay any of the transactions
contemplated by this Agreement.
18
2.11
Brokers and
Finders Fees
. Except for fees
payable to Wachovia Securities pursuant to an engagement letter dated June 29,
2005, and a side letter dated August 17, 2005 (true and correct copies of which
have been delivered to Maxim), EpiCept has not incurred, nor will it incur,
directly or indirectly, any liability for brokerage or finders fees or agents
commissions or any similar charges in connection with this Agreement or any
transaction contemplated hereby.
2.12
Employee
Benefit Plans
.
(a) The
employee compensation, severance, termination pay, deferred compensation, stock
or stock-related awards, incentive, fringe or benefit plans, programs,
policies, commitments, occupational pension scheme or other arrangements
(whether or not set forth in a written document including for the avoidance of
doubt and for purposes of employees of EpiCept GmbH, any arrangements to be
deemed general bonus plan and gratification practices
betriebliche
Übung,
and including all employee benefit plans within the
meaning of Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended (
ERISA
))
covering any active employee, former employee, director or consultant of EpiCept,
any subsidiary of EpiCept or any trade or business (whether or not
incorporated) that is a member of a controlled group or that is under common
control with EpiCept within the meaning of Section 414 of the Code (for
purposes of Section 2.12 and Section 3.12, an
Affiliate
),
or with respect to which EpiCept or any of its subsidiaries has any liability
(contingent or otherwise), are referred to herein as the
EpiCept
Plans
.
EpiCept Disclosure Schedule 2.12(a) contains a complete and
accurate list of each of the EpiCept Plans.
EpiCept has provided to Maxim:
(i) correct and complete copies of all documents embodying each EpiCept
Plan including all amendments thereto, all related trust documents, and all
material written agreements and contracts relating to each such EpiCept Plan;
(ii) the three (3) most recent annual reports (Form Series 5500
and all schedules and financial statements attached thereto), if any, required
under ERISA or the Code in connection with each EpiCept Plan; (iii) the
most recent summary plan description together with the summary(ies) of material
modifications thereto, if any, required under ERISA with respect to each EpiCept
Plan; (iv) all IRS determination, opinion, notification and advisory
letters relating to any EpiCept Plan; (v) all material correspondence to
or from any governmental agency relating to any EpiCept Plan; (vi) all
COBRA forms and related notices; (vii) all discrimination tests for each EpiCept
Plan, if applicable, for the most recent three (3) plan years; (viii) if
the EpiCept Plan is funded, the most recent periodic accounting of the EpiCept
Plan assets; and (ix) a description of any payments made in conformance with EpiCept
GmbHs general bonus plan and gratification practices (
betriebliche
Übung
).
(b) Each EpiCept Plan has been maintained and
administered in all material respects in compliance with its terms and with the
requirements prescribed by any and all statutes, orders, rules and regulations
(foreign or domestic), including ERISA and the Code, that are applicable to
such EpiCept Plans. No suit, action or
other litigation (excluding claims for benefits incurred in the ordinary course
of EpiCept Plan activities) has been brought, or to
19
the Knowledge of EpiCept
is threatened, against or with respect to any such EpiCept Plan. There are no audits, inquiries or proceedings
pending or, to the Knowledge of EpiCept, threatened by the Internal Revenue
Service (the
IRS
) or Department of Labor (the
DOL
) with respect to any EpiCept Plans. All contributions, reserves or premium
payments required to be made or accrued as of the date hereof to the EpiCept
Plans have been timely made or accrued.
Section 2.12(b) of the EpiCept Disclosure Schedule includes a
listing of the accrued vacation liability of EpiCept and any of its
subsidiaries as of June 30, 2005. Any EpiCept
Plan intended to be qualified under Section 401(a) of the Code and each
trust intended to qualify under Section 501(a) of the Code (i) has
either applied for or obtained a favorable determination, notification,
advisory and/or opinion letter, as applicable, as to its qualified status from
the IRS or still has a remaining period of time under applicable Treasury
Regulations or IRS pronouncements in which to apply for such letter and to make
any amendments necessary to obtain a favorable determination, and
(ii) incorporates or has been amended to incorporate all provisions
required to comply with the Tax Reform Act of 1986 and subsequent legislation,
unless the EpiCept Plan still has a remaining period of time under applicable
Treasury Regulations or IRS pronouncements in which to conform to such
legislation. EpiCept and or any of its
subsidiaries does not have any plan or commitment to establish any new EpiCept
Plan, to modify any EpiCept Plan (except to the extent required by law or to
conform any such EpiCept Plan to the requirements of any applicable law, in
each case as previously disclosed to Maxim in writing, or as required by this
Agreement), or to enter into any new EpiCept Plan. Each EpiCept Plan can be amended, terminated
or otherwise discontinued after the Effective Time in accordance with its
terms, without liability to Maxim, EpiCept or any of its subsidiaries or any of
its Affiliates (other than ordinary administration expenses or the issuance of EpiCept
Common Stock upon exercise of previously granted EpiCept Options).
(c) Neither EpiCept, any of its subsidiaries, nor
any of their Affiliates has at any time ever maintained, established,
sponsored, participated in, or contributed to any plan subject to Title IV
of ERISA or Section 412 of the Code and at no time has EpiCept, any of its
subsidiaries, nor any of their Affiliates contributed to or been requested to
contribute to any multiemployer plan, as such term is defined in Section 3(37)(A)
of ERISA. Neither EpiCept, any of its
subsidiaries nor any Affiliate has at any time ever maintained, established,
sponsored, participated in or contributed to any multiple employer plan, or to
any plan described in Section 413 of the Code. Neither EpiCept, any of its subsidiaries, nor
any officer or director of EpiCept or any of its subsidiaries is subject to any
liability or penalty under Section 4975 through 4980B of the Code or
Title I of ERISA. No prohibited
transaction, within the meaning of Section 4975 of the Code or
Sections 406 and 407 of ERISA, and not otherwise exempt under
Section 4975 of the Code or Section 408 of ERISA, has occurred with
respect to any EpiCept Plan.
(d) Neither EpiCept, any of its subsidiaries, nor
any of their Affiliates has, before the Effective Time and in any material
respect, violated any of the health continuation requirements of the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
20
and as codified in
Section 4980B of the Code and Sections 601 through 608 of ERISA, the
requirements of the Family Medical Leave Act of 1993, as amended, the Health
Insurance Portability and Accountability Act of 1996, as amended, or any
similar provisions of state or foreign law applicable to EpiCept or any of its
subsidiaries employees. None of the EpiCept
Plans promises or provides retiree medical or other retiree welfare benefits to
any person except as required by applicable law, and neither EpiCept nor any of
its subsidiaries has represented, promised or contracted (whether in oral or
written form) to provide such retiree benefits to any employee, former
employee, director, consultant or other person, except to the extent required
by statute. Except as specifically set
forth in Section 2.12(d) of the EpiCept Disclosure Schedule, no EpiCept Plan
provides health benefits that are not fully insured through an insurance
contract.
(e) Neither EpiCept nor any of its subsidiaries
is bound by or subject to (and none of its respective assets or properties is
bound by or subject to) any arrangement with any labor union.
Neither EpiCept nor any of its subsidiaries is a party to any works
council agreement or any other contract with a works council under the laws of any
foreign jurisdiction. No employee
of EpiCept or any of its subsidiaries is represented by any labor union or
covered by any collective bargaining agreement and, to the Knowledge of EpiCept,
no campaign to establish such representation is in progress. There is no pending or, to the Knowledge of EpiCept,
threatened labor dispute involving EpiCept or any of its subsidiaries and any
group of its employees nor has EpiCept or any of its subsidiaries experienced
any labor interruptions over the past three (3) years, and EpiCept and its
subsidiaries consider their relationships with their employees to be good. EpiCept and any of its subsidiaries
(i) is in compliance in all material respects with all applicable foreign,
federal, state and local laws, rules and regulations respecting employment,
employment practices, terms and conditions of employment and wages and hours,
in each case, with respect to its current or former employees; (ii) has
withheld and reported all amounts required by law or by agreement to be
withheld and reported with respect to wages, salaries and other payments to its
current or former employees; (iii) is not liable for any arrears of wages
or any taxes or any penalty for failure to comply with any of the foregoing
(including national health tax, national geriatric care tax, payroll tax or, if
applicable under the laws of any foreign jurisdiction, any national pension
insurance contributions levy, assessment or tariff); and (iv) is not
liable for any payment to any trust or other fund governed by or maintained by
or on behalf of any governmental authority, with respect to unemployment
compensation benefits, social security or other benefits or obligations
(including national health, geriatric care, pension and unemployment insurance
laws; personnel leasing laws or works constitution laws) for its current and
former employees (other than routine payments to be made in the normal course
of business and consistent with past practice).
There are no pending, threatened or reasonably anticipated claims or
actions against EpiCept or any of its subsidiaries under any workers
compensation policy or long-term disability policy. The EpiCept Disclosure Schedule identifies
each employee of EpiCept GmbH who is not fully available to perform work
because of disability or other leave
,
including
childcare leave or maternity leave under the laws of Germany, and sets forth
the basis of such disability or leave.
21
(f) Neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereby will (either alone
or upon the occurrence of any additional or subsequent events) (i) result
in any payment (including severance, unemployment compensation, golden
parachute, forgiveness of indebtedness, bonus or otherwise) becoming due to any
stockholder, director or employee of EpiCept or any of its subsidiaries under
any EpiCept Plan or otherwise, (ii) materially increase any benefits
otherwise payable under any EpiCept Plan, or (iii) result in the
acceleration of the time of payment or vesting of any such benefits.
(g) No payment or benefit which will or may be
made by EpiCept or any of its subsidiaries or its Affiliates in connection with
this transaction with respect to any employee or any other disqualified
individual (as defined in Code Section 280G and the regulations
thereunder) will be characterized as a parachute payment, within the meaning
of Code Section 280G(B)(2). In the
event that the execution and delivery of this Agreement or the consummation of
the transactions contemplated hereby (either alone or upon the occurrence of
any additional or subsequent events) results in any payment or benefit which
will be characterized as a parachute payment, within the meaning of Code
Section 280G(B)(2), Section 2.12(g) of the EpiCept Disclosure
Schedule shall list all persons who EpiCept reasonably believes are, with
respect to EpiCept or any of its subsidiaries, disqualified individuals
(within the meaning of Section 280G of the Code and the regulations
promulgated thereunder) as determined as of the date hereof and provide a
calculation of the aggregate excess parachute payments within the meaning of
Code Section 280G(B)(1). Within a
reasonable period of time after the last business day of each month after the
date hereof and on or about the date which is five (5) business days prior to
the expected date of the Closing, EpiCept shall, as and to the extent
necessary, deliver to Maxim a revised Schedule 2.12(g) which sets forth
any additional information which EpiCept reasonably believes would affect the
determination of the persons who are, with respect to EpiCept or any of its
subsidiaries, deemed to be disqualified individuals (within the meaning of
Section 280G of the Code and the regulations promulgated thereunder) or of
the calculation of the aggregate excess parachute payments as of the date of
each such revised Schedule 2.12(g).
(h) Each EpiCept Plan that has been adopted or
maintained by EpiCept or any of its subsidiaries or its Affiliates, whether
informally or formally, for the benefit of employees located outside the United
States is specifically set forth in Section 2.12(h) of the EpiCept
Disclosure Schedule.
2.13
Absence of Liens
and Encumbrances
. EpiCept and each
of its subsidiaries has good and valid title to, or, in the case of leased
assets, valid leasehold interests in, all of its tangible assets used in its
business, free and clear of any liens or encumbrances except as reflected in
the EpiCept Financials and except for liens for taxes not yet due and payable
and such imperfections of title and encumbrances, if any, which would not be
material to EpiCept.
22
2.14
Environmental Matters
.
(a)
Hazardous Material
. Except as set forth in Section 2.14(a) of the
EpiCept Disclosure Schedule no underground storage tanks and no amount of any
substance that has been designated by any Governmental Entity or by applicable
federal, state or local law to be radioactive, toxic, hazardous or otherwise a
danger to health or the environment, including PCBs, asbestos, petroleum,
urea-formaldehyde and all substances listed as hazardous substances pursuant to
the Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended, or defined as a hazardous waste pursuant to the United States
Resource Conservation and Recovery Act of 1976, as amended, and the regulations
promulgated pursuant to said laws, but excluding office and janitorial supplies
(a
Hazardous Material
), are present, as a
result of the actions of EpiCept, or its subsidiaries or any affiliate of EpiCept,
or, to the Knowledge of EpiCept, as a result of any actions of any third party
or otherwise, in, on or under any property, including the land and the
improvements, ground water and surface water thereof, that EpiCept or any of
its subsidiaries has at any time owned, operated, occupied or leased.
(b)
Hazardous Materials Activities
. Except as set forth in Section 2.14(b) of the
EpiCept Disclosure Schedule (i) neither EpiCept nor any of its
subsidiaries has transported, stored, used, manufactured, disposed of, released
or exposed its employees or others to Hazardous Materials in violation of any
law in effect on or before the Closing Date, and (ii) neither EpiCept nor
any of its subsidiaries has disposed of, transported, sold, used, released,
exposed its employees or others to or manufactured any product containing a
Hazardous Material (collectively,
Hazardous Materials
Activities
) in violation of any law, rule, regulation, treaty or
statute promulgated by any Governmental Entity in effect on or prior to the
Closing Date to prohibit, regulate or control Hazardous Materials or any
Hazardous Materials Activities.
(c)
Permits
. EpiCept and its subsidiaries currently hold
all environmental approvals, permits, licenses, clearances and consents (the
Environmental Permits
) necessary for the conduct of EpiCepts
and its subsidiaries Hazardous Material Activities and other businesses of EpiCept
and its subsidiaries as such activities and businesses are currently being
conducted, except where the failure to hold such Environmental Permits could
not be reasonably expected to result in a material liability to EpiCept.
(d)
Environmental Liabilities
. No action, proceeding, revocation proceeding,
amendment procedure, writ, injunction or claim is pending, or to EpiCepts
Knowledge, threatened concerning any Environmental Permit, Hazardous Material
or any Hazardous Materials Activity of EpiCept or any of its subsidiaries.
2.15
Agreements,
Contracts and Commitments
. The
following agreements, contracts or commitments with respect to which EpiCept or
one of its subsidiaries is a party or is bound are referred to herein as the
EpiCept Contracts
:
(a) any employment or consulting agreement,
contract or commitment with any officer or director or higher level employee or
member of EpiCepts Board of Directors, other
23
than those that are
terminable by EpiCept or any of its subsidiaries on no more than
thirty (30) days notice without liability or financial obligation to EpiCept;
(b) any agreement or plan, including any stock
option plan, stock appreciation right plan or stock purchase plan, any of the
benefits of which will be increased, or the vesting of 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;
(c) any agreement of guaranty;
(d) any agreement, contract or commitment
containing any covenant limiting in any respect the right of EpiCept or any of
its subsidiaries to engage in any line of business or to compete with any
person or granting any exclusive distribution or marketing rights;
(e) any agreement, contract or commitment
currently in force relating to the disposition or acquisition by EpiCept or any
of its subsidiaries after the date of this Agreement of assets in excess of
$150,000 not in the ordinary course of business or pursuant to which EpiCept
has any material ownership interest in any corporation, partnership, joint
venture or other business enterprise other than EpiCepts subsidiaries;
(f) any dealer, distributor, joint marketing,
alliance, development or other agreement currently in force under which EpiCept
or any of its subsidiaries have continuing material obligations to jointly
market any product, technology, compound or service, or any material agreement
pursuant to which EpiCept or any of its subsidiaries have continuing material
obligations to jointly develop any intellectual property that will not be
owned, in whole or in part, by EpiCept or any of its subsidiaries;
(g) any material agreement, contract or
commitment currently in force to license any third party to manufacture or
reproduce any EpiCept product, technology, compound or service or any material
agreement, contract or commitment currently in force to sell or distribute any EpiCept
product, compound or service except agreements with distributors or sales
representatives in the normal course of business cancelable without penalty
upon notice of ninety (90) days or less and substantially in the form
previously provided to Maxim;
(h) any mortgages, indentures, guarantees, loans
or credit agreements, security agreements or other agreements or instruments
relating to the borrowing of money or extension of credit (other than trade
payables arising, and advances to employees made, in the ordinary course of
business consistent with past practice);
(i) any settlement agreement entered into within
five (5) years prior to the date of this Agreement; or
24
(j) any other agreement, contract or commitment
(i) in connection with or pursuant to which EpiCept and its subsidiaries
will spend or receive (or are expected to spend or receive), in the aggregate,
more than $150,000 during the current fiscal year or during the next fiscal
year, or (ii) that is a material contract (as defined in Item 601(b)(10) of Regulation S-K of the SEC rules).
Section 2.15 of the EpiCept Disclosure Schedule sets forth a complete
list of the EpiCept Contracts (except that for this purpose the reference to
$150,000, where it appears in clause (i) of Section 2.15(j), instead shall be
deemed to refer to $300,000).
Neither EpiCept nor any of its subsidiaries, nor to EpiCepts Knowledge
any other party to an EpiCept Contract, is in material breach, violation or
default under, and neither EpiCept nor any of its subsidiaries has received
written notice that it has breached, violated or defaulted under, any of the
material terms or conditions of any EpiCept Contract in such a manner as would permit
any other party to cancel or terminate any such EpiCept Contract, or would
permit any other party to seek material damages or other material remedies (for
any or all of such breaches, violations or defaults, in the aggregate).
2.16
EpiCept Properties
.
Neither EpiCept nor any of its
subsidiaries owns any real property. EpiCept
and each of its subsidiaries have valid leasehold interests in all of their
material properties, free and clear of all liens, charges and encumbrances
except liens for taxes not yet due and payable and such liens or other
imperfections of title, if any, as do not materially detract from the value of
or materially interfere with the present use of the property affected thereby;
and all leases pursuant to which EpiCept or any of its subsidiaries lease from
others material real or personal property are valid and effective in accordance
with their respective terms, and there is not, under any such leases, any
existing material default or event of default of EpiCept or any of its subsidiaries
or, to EpiCepts Knowledge, any other party (or any event which with notice or
lapse of time, or both, would constitute a material default and in respect of
which EpiCept or its subsidiary has not taken steps to prevent such default
from occurring). All the plants,
structures, facilities, properties, leased premises and equipment of EpiCept
and its subsidiaries, except such as may be under construction as set forth in
Section 2.16 of the EpiCept Disclosure Schedule, are in good operating condition
and repair, in all material respects, normal wear and tear excepted.
2.17
Statements; Proxy
Statement/Prospectus
. None of the
information supplied or to be supplied by EpiCept or Merger Sub for inclusion
or incorporation by reference in (i) the Registration Statement will, at
the time it becomes effective under the Securities Act, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein not misleading
and (ii) the proxy statement/prospectus to be sent to the stockholders of Maxim
in connection with the meeting of Maxims stockholders to consider the approval
and adoption of this Agreement and approval of the Merger (the
Maxim Stockholders Meeting
) (such proxy
statement/prospectus as amended or supplemented is referred to herein as the
Proxy Statement/Prospectus
) shall not, on the date the
Proxy Statement/Prospectus is first mailed to Maxims stockholders or at the
time
25
of
the Maxim Stockholders Meeting, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they are made, not misleading.
The Registration Statement will comply as to form in all material
respects with the provisions of the Securities Act and the rules and
regulations thereunder. If at any time
before the Effective Time, any event relating to EpiCept, Merger Sub or any of
their affiliates, officers or directors should be discovered by EpiCept or
Merger Sub which should be set forth in a supplement to the Proxy
Statement/Prospectus, EpiCept shall promptly inform Maxim. Notwithstanding the foregoing, neither EpiCept
nor Merger Sub makes any representation or warranty with respect to any
information supplied or to be supplied by Maxim that is, will be, or is
required to be, contained in any of the foregoing documents.
2.18
Board Approval
.
The Board of Directors of EpiCept
(i) has determined that the Merger is advisable and fair to, and in the
best interests of, EpiCept and its stockholders, (ii) has approved this
Agreement, the Merger and the other transactions contemplated by this
Agreement, (iii) has approved and declared advisable the Conversion Amendment,
the Reverse Split Amendment and the Amended and Restated Certificate of
Incorporation, and (iv) has approved the Share Issuance.
2.19
Opinion of
Financial Advisors
. The Board of
Directors of EpiCept has received an opinion from Wachovia Securities to the
effect that, as of September 5, 2005, the Exchange Ratio is fair, from a
financial point of view, to EpiCept, a signed copy of which opinion will be
delivered to Maxim solely for informational purposes as promptly as practicable
after receipt thereof by EpiCept.
2.20
Approvals
. Pursuant to the Principal Stockholder Consent,
EpiCept has obtained the necessary approval of its stockholders for the
Conversion Amendment, the Reverse Split Amendment and the Amended and Restated
Certificate of Incorporation and the Share Issuance. The holders of (i) all of the outstanding
shares of EpiCepts Series A Convertible Preferred Stock, Series B Convertible
Preferred Stock and Series C Convertible Preferred Stock, (ii) all of the
outstanding warrants to purchase shares of EpiCept Preferred Stock and shares
of EpiCept Common Stock and (iii) all outstanding convertible notes issued by
(x) EpiCept which are convertible into shares of EpiCept Common Stock and (y) EpiCept
GmbH which are convertible into shares of EpiCept Common Stock, have agreed to
the EpiCept Conversions.
2.21
Repatriation of
Dividends and Other Distributions
. All
dividends and other distributions declared and payable on the equity or other
interests in EpiCept GmbH may, under the laws and regulations of the Federal
Republic of Germany as presently enacted or promulgated, be paid to EpiCept and
such dividends and distributions will be subject to withholding taxes at a rate
of 21.1% that may be reduced to 5% by means of refund under the laws and
regulations of the Federal Republic of Germany as presently enacted or
promulgated and are otherwise free and clear of any other tax, withholding or
deduction in the Federal Republic of Germany.
26
2.22
German Taxes
. No stamp or other issuance or transfer taxes
or duties and no capital gains, income, withholding or other taxes are payable
by or on behalf of EpiCept to the Federal Republic of Germany or any political
subdivision or taxing authority thereof or therein in connection with the
execution, delivery and performance of this Agreement.
2.23
Foreign Corrupt
Practices Act
. To EpiCepts
Knowledge, and to the actual knowledge of the executive officers of EpiCept
GmbH, neither EpiCept nor any of its subsidiaries, nor any officer, director,
employee or agent thereof or any stockholder thereof acting on behalf of EpiCept
or any of its subsidiaries, has taken any action or authorized, directed or
participated in any act, in violation of any provision of the United States
Foreign Corrupt Practices Act of 1977, as amended, applied to such entity or
person.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
MAXIM
Maxim represents and
warrants to EpiCept, subject to such exceptions as are disclosed in writing in
the disclosure schedule supplied by Maxim to EpiCept, dated as of the date
hereof and certified by a duly authorized officer of Maxim (the
Maxim Disclosure Schedule
), which disclosure in the Maxim
Disclosure Schedule shall provide an exception to or otherwise qualify the
representations and warranties of Maxim contained in the section of this
Agreement corresponding by number to such disclosure and the other
representations and warranties herein to the extent such disclosure is readily
apparent on its face to be applicable to such other representations or
warranties, as follows:
3.1
Organization of Maxim
.
(a) Maxim and
each of its subsidiaries is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation; has
the corporate power and authority to own, lease and operate its assets and
property and to carry on its business as now being conducted and as proposed to
be conducted; and is duly qualified to do business and in good standing as a
foreign corporation in each jurisdiction in which the failure to be so
qualified, individually or in the aggregate, would have a Material Adverse
Effect (as defined in Section 8.3) on Maxim.
(b) Maxim has delivered to EpiCept a true and
complete list of all of Maxims subsidiaries, indicating the jurisdiction of
incorporation of each subsidiary and Maxims equity interest therein.
(c) Maxim has delivered or made available to EpiCept
a true and correct copy of the Certificate of Incorporation and Bylaws of Maxim
and similar governing instruments of each of its subsidiaries, each as amended
to date, and each such instrument is in full force and effect. Neither Maxim nor any of its subsidiaries is
in violation of any of the provisions of its Certificate of Incorporation or
Bylaws or equivalent governing instruments.
27
3.2
Maxim Capital
Structure
.
(a) The authorized capital stock of Maxim consists
of (i) 60,000,000 shares of Maxim Common Stock, and (ii) 5,000,000
shares of Preferred Stock, par value $0.001 per share, of which 400,000 are
designated Series A Convertible Preferred Stock. As of the close of business on August 31,
2005, 28,402,808 shares of Maxim Common Stock were issued and outstanding and no
shares of Maxim Common Stock were held by Maxim or any direct or indirect
wholly owned subsidiary of Maxim. As of
the date hereof, no shares of Maxim Preferred Stock were issued or outstanding. As of August 31, 2005, Maxim had reserved an
aggregate of (i) 1,175,999 shares of Maxim Common Stock for issuance pursuant
to Maxims 1993 Long Term Incentive Plan, of which 620,092 shares had been
issued and 361,333 shares were issuable upon exercise of outstanding stock
options, (ii) 750,000 shares of Maxim Common Stock for issuance pursuant
to Maxims 2000 Nonstatutory Stock Option Plan, of which 79,940 shares had been
issued and 155,920 shares were issuable upon exercise of outstanding stock options,
and (iii) 4,173,500 shares of Maxim Common Stock for issuance pursuant to Maxims
2001 Incentive Stock Option Plan, of which 303,603 shares had been issued and 1,463,475
shares were issuable upon exercise of outstanding stock options. In addition, as of August 31, 2005, Maxim had
reserved for issuance 142,674 shares of Maxim Common Stock pursuant to Maxims
401(k) Plan, and 1,421,500 shares of Maxim Common Stock pursuant to: (i) outstanding and exercisable direct option
grants outside of any plan to purchase 130,000 shares of Maxim Common Stock,
(ii) outstanding and exercisable options assumed in connection with Maxims
acquisition of Cytovia, Inc. to purchase 14,166 shares of Maxim Common Stock,
and (iii) outstanding and exercisable warrants to purchase 1,277,334 shares of Maxim
Common Stock (the
Maxim Warrants
). Except as set forth in the immediately
preceding two sentences, no shares of capital stock or other equity securities
of Maxim are issued, reserved for issuance or outstanding except for rights
issuable pursuant to the Maxim Rights Agreement (as defined in Section 3.22)
or any other right issued in substitution thereof (the
Maxim
Rights
). Under the Maxim Rights Agreement, until the
Distribution Date (as defined in the Maxim Rights Agreement), (i) the Maxim
Rights will be evidenced by the certificates for Maxim Common Stock registered
in the names of the holders thereof (which certificates shall also be deemed to
be certificates for Maxim Rights (the
Maxim Rights Certificates
))
and not by separate Maxim Rights Certificates and (ii) the right to
receive Maxim Rights Certificates will be transferable only in connection with
the transfer of Maxim Common Stock. All
of the outstanding shares of Maxims capital stock have been duly authorized
and validly issued and are fully paid and nonassessable. All shares of Maxim Common Stock subject to
issuance as aforesaid, upon issuance on the terms and conditions specified in
the instruments pursuant to which they are issuable, shall be duly authorized,
validly issued, fully paid and nonassessable.
(b) Section 3.2 of the Maxim Disclosure
Schedule sets forth for each outstanding option to purchase shares of Maxim
Common Stock (each a
Maxim Option
)
and for each outstanding Maxim Warrant as of the date hereof, (i) the name
of the holder of such Maxim Option or Maxim Warrant (ii) the Maxim Stock Option
Plan pursuant to which
28
such option was issued,
if applicable, (iii) the number of shares of Maxim Common Stock issuable
upon the exercise of such Maxim Option or Maxim Warrant, (iv) the exercise
price of such Maxim Option or Maxim Warrant, (v) the date on which such Maxim
Option or Maxim Warrant was granted, (vi) the applicable vesting schedule
for such Maxim Option or Maxim Warrant, and (vii) the date on which such Maxim
Option or Maxim Warrant expires.
3.3
Obligations With
Respect to Capital Stock
. As of the
date hereof, except as set forth in Section 3.2, there are no equity
securities, partnership interests or similar ownership interests of any class
of Maxim, or any securities
or rights exchangeable or convertible into or exercisable for
such equity securities, partnership interests or similar ownership interests
issued, reserved for issuance or outstanding.
As of the date hereof, except for securities Maxim owns, directly or
indirectly through one or more subsidiaries, there are no equity securities,
partnership interests or similar ownership interests of any class of any
subsidiary of Maxim, or any security or right exchangeable or convertible into
or exercisable for such equity securities, partnership interests or similar
ownership interests issued, reserved for issuance or outstanding. As of the date hereof, except as set forth in
Section 3.2, there are no options, warrants, equity securities,
partnership interests or similar ownership interests, calls, rights (including
preemptive rights), commitments or agreements of any character to which Maxim
or any of its subsidiaries is a party or by which it is bound obligating Maxim
or any of its subsidiaries to issue, deliver or sell, or cause to be issued,
delivered or sold, or repurchase, redeem or otherwise acquire, or cause the
repurchase, redemption or acquisition, of any shares of capital stock of Maxim
or any of its subsidiaries or obligating Maxim or any of its subsidiaries to
grant, extend, accelerate the vesting of or enter into any such option,
warrant, equity security, partnership interest or similar ownership interest,
call, right, commitment or agreement.
Except for the Maxim Voting Agreements, there are no registration rights
and, to the Knowledge of Maxim there are no voting trusts, proxies or other
agreements or understandings with respect to the registration or voting of any
equity security of any class of Maxim or with respect to the registration or
voting of any equity security, partnership interest or similar ownership
interest of any class of any of its subsidiaries.
3.4
Authority
.
(a) Maxim has all requisite corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by all necessary corporate
action on the part of Maxim, subject only to the approval and adoption of this
Agreement and the approval of the Merger by Maxims stockholders and the filing
of the Certificate of Merger pursuant to the DGCL. This Agreement has been duly executed and
delivered by Maxim and, assuming the due authorization, execution and delivery
by EpiCept and Merger Sub, constitutes a valid and binding obligation of Maxim,
enforceable in accordance with its terms, except as enforceability may be
limited by bankruptcy and other similar laws and general principles of
equity. The execution and delivery of
this Agreement by Maxim does not, and the
29
performance of this
Agreement by Maxim will not, (i) conflict with or violate the Certificate
of Incorporation or Bylaws of Maxim or the equivalent organizational documents
of any of its subsidiaries, (ii) subject to obtaining the approval and
adoption of this Agreement and the approval of the Merger by Maxims
stockholders as contemplated in Section 5.2 (the
Maxim
Stockholder Approval
) and compliance with the requirements set
forth in Section 3.4(b) below, conflict with or violate any Legal
Requirement applicable to Maxim or any of its subsidiaries or by which its or
any of their respective properties is bound or affected, or (iii) result
in any breach of or constitute a default (or an event that with notice or lapse
of time or both would become a default) under, or impair Maxims rights or
alter the rights or obligations of Maxim or any third party under, or give to
others any rights of termination, amendment, acceleration or cancellation of,
or result in the creation of a lien or encumbrance on any of the properties,
including any leased real property, or assets of Maxim or any of its
subsidiaries pursuant to, any Maxim Contract (as defined in Section 3.15). The Maxim Disclosure Schedule lists all
consents, waivers and approvals under any of Maxims or any of its subsidiaries
agreements, contracts, licenses or leases required to be obtained (other than
those already obtained) in connection with the consummation of the transactions
contemplated hereby, which, if not obtained, would have a Material Adverse
Effect on Maxim or the Surviving Corporation or have a material adverse effect
on the ability of the parties to consummate the Merger.
(b) No consent, approval, order or authorization
of, or registration, declaration or filing with any Governmental Entity is
required by or with respect to Maxim 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 Necessary Consents
and (ii) such other consents, authorizations, filings, approvals and
registrations which, if not obtained or made, would not be material to Maxim or
EpiCept or have a material adverse effect on the ability of the parties to
consummate the Merger.
3.5
SEC Filings; Maxim
Financial Statements
.
(a) Maxim has filed and furnished all forms,
reports, schedules, prospectuses, registration, proxy and other statements
required to be filed by Maxim with the SEC since September 30, 2004, and has
made available to EpiCept such forms, reports, schedules, prospectuses,
registration, proxy and other statements in the form filed with the SEC. All such required forms, reports, schedules,
prospectuses, registration, proxy and other statements (including those that Maxim
may file subsequent to the date hereof), and all documents filed on a voluntary
basis on Form 8-K, and in each case including all exhibits and schedules
thereto and documents incorporated by reference therein, are referred to herein
collectively as the
Maxim SEC Reports
. As of their respective effective dates (in
the case of Maxim SEC Reports that are registration statements filed pursuant
to the requirements of the Securities Act) and as of their respective SEC
filing dates (in the case of all other Maxim SEC Reports), the Maxim SEC
Reports (i) were prepared in accordance with the requirements of the
Securities Act, the Exchange Act and the Sarbanes-Oxley Act of 2002 (the
Sarbanes-Oxley Act
),
30
as the case may be, and
the rules and regulations of the SEC thereunder applicable to such Maxim SEC Reports,
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 in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. Except to the
extent that information contained in any Maxim SEC Report has been revised or
superseded by a later-filed Maxim SEC Report, none of the Maxim SEC Reports
contains any untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. None of Maxims subsidiaries
is required to file any forms, reports or other documents with the SEC.
(b) Each of the consolidated financial statements
(including, in each case, any related notes and schedules thereto) contained in
the Maxim SEC Reports (the
Maxim Financials
),
(i) complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto, (ii) was prepared in accordance with GAAP (except, in the
case of unaudited quarterly statements, as indicated in the notes and schedules
thereto) applied on a consistent basis throughout the periods involved (except
as may be indicated in the notes and schedules thereto) and (iii) present
fairly in all material respects the consolidated financial position of Maxim
and its subsidiaries at the respective dates thereof and the consolidated
results of its operations and cash flows for the periods indicated, except that
the unaudited interim financial statements were or are subject to normal and
recurring year-end adjustments which were not, or are not expected to be,
material in amount. The balance sheet of
Maxim contained in the Maxim SEC Reports as of June 30, 2005 is hereinafter
referred to as the
Maxim Balance Sheet
. Except as disclosed in the Maxim Financials
included in the Maxim SEC Reports filed by Maxim and publicly available prior
to the date of this Agreement, neither Maxim nor any of its subsidiaries has
any liabilities (absolute, accrued, contingent or otherwise) of a nature
required to be disclosed on a balance sheet or in the related notes and schedules
to the consolidated financial statements prepared in accordance with GAAP which
are, individually or in the aggregate, material to the business, results of
operations or financial condition of Maxim and its subsidiaries taken as a
whole, except liabilities incurred since the date of the Maxim Balance Sheet in
the ordinary course of business consistent with past practices.
(c) Maxim has established and maintains internal
control over financial reporting and disclosure controls and procedures (as
such terms are defined in Rule 13a-15 and Rule 15d-15 under the Exchange Act);
such disclosure controls and procedures are designed to ensure that material
information relating to Maxim, including its consolidated subsidiaries,
required to be disclosed by Maxim in the reports that it files or submits under
the Exchange Act is accumulated and communicated to Maxims principal executive
officer and its principal financial officer to allow timely decisions regarding
required disclosure; and Maxims principal executive officer and its principal
financial officer believe such disclosure controls and procedures are effective
to ensure that information required to be disclosed by Maxim in the reports
that it files or submits under the Exchange Act is recorded, processed,
31
summarized
and reported within the time periods specified in SEC rules and forms. Maxims principal executive officer and its
principal financial officer have disclosed, based on their most recent evaluation
of internal control over financial reporting, to Maxims auditors and the audit
committee of the Board of Directors of Maxim (x) all significant deficiencies and
material weaknesses in the design or operation of internal controls over
financial reporting which are reasonably likely to adversely affect Maxims
ability to record, process, summarize and report financial information and (y)
any fraud, whether or not material, that involves management or other employees
who have a significant role in Maxims internal controls over financial
reporting. The principal executive
officer and the principal financial officer of Maxim have made all
certifications required by the Sarbanes-Oxley Act, the Exchange Act and any
related rules and regulations promulgated by the SEC with respect to all Maxim
SEC Reports, and the statements contained in such certifications are complete
and correct.
3.6
Absence of
Certain Changes or Events
.
(a) Since the date of the Maxim Balance Sheet,
there has not been: (i) any Material Adverse Effect on Maxim,
(ii) any change by Maxim in its accounting methods, principles or
practices, except as required by concurrent changes in GAAP or the rules and
regulations promulgated by the SEC, (iii) any revaluation by Maxim of any
of its assets, including writing down the value of capitalized inventory or
writing off notes or accounts receivable other than in the ordinary course of
business, or (iv) any split, combination or reclassification of any of Maxims
or any of its subsidiaries capital stock.
(b) From December 31, 2004 until the date of this
Agreement, Maxim and its subsidiaries have not taken or legally committed to
take any of the actions specified in Sections 4.2(a) through 4.2(y).
3.7
Taxes
.
(a) Maxim and each of its subsidiaries have
timely filed all material Returns relating to Taxes required to be filed by Maxim
and each of its subsidiaries with any Tax authority. Such Returns are true and correct in all
material respects and have been completed in accordance with applicable
law. Maxim and each of its subsidiaries
have paid all Taxes shown to be due on such Returns.
(b) Neither Maxim nor any of its subsidiaries has
been delinquent in the payment of any material Tax nor is there any material
Tax deficiency or adjustment outstanding, proposed or assessed against Maxim or
any of its subsidiaries, nor has Maxim or any of its subsidiaries executed any
unexpired waiver of any statute of limitations on or extending the period for
the assessment or collection of any material Tax.
(c) No audit or administrative or court
proceeding with respect to any material Return of Maxim or any of its
subsidiaries by any Governmental Authority is presently in
32
progress
,
nor has Maxim or any of its subsidiaries been notified in writing of any
request for such an audit or other proceeding.
(d) Neither Maxim nor any of its subsidiaries
had, as of June 30, 2005, any liability for any material unpaid Taxes that has
not been accrued for or reserved against on the Maxim Balance Sheet in
accordance with GAAP, whether asserted or unasserted, contingent or
otherwise. Since June 30, 2005, neither Maxim
nor any of its subsidiaries has incurred any liability for any material Taxes
other than in the ordinary course of business.
(e) There is no contract, agreement, plan or
arrangement to which Maxim or any of its subsidiaries is a party as of the date
of this Agreement, including but not limited to the provisions of this
Agreement, covering any employee or former employee of Maxim or any of its
subsidiaries that, individually or collectively, would reasonably be expected
to give rise to the payment that would not be deductible pursuant to
Sections 404, 280G or 162(m) of the Code.
There is no contract, agreement, plan or arrangement to which Maxim or
any of its subsidiaries is a party or by which it is bound to compensate any
individual for excise taxes paid pursuant to Section 4999 of the Code.
(f) Neither Maxim nor any of its subsidiaries
(a) is party to or has any obligation under any Tax sharing, indemnity or
allocation agreement or arrangement (b) has ever been a member of an
affiliated group (within the meaning of Code §1504(a)) filing a consolidated
federal income Tax Return (other than a group the common parent of which was Maxim)
or (c) has any liability for the Taxes of any person (other than Maxim or
any of its subsidiaries) under Treas. Reg. § 1.1502-6 (or any similar provision
of state, local or foreign law), as a transferee or successor, by contract, or
otherwise.
(g) Neither Maxim nor any of its subsidiaries has
constituted either a distributing corporation or a controlled corporation
in a distribution of stock intended to qualify for tax-free treatment under
Section 355 of the Code (x) in the two years prior to the date of
this Agreement or (y) in a distribution which could otherwise constitute
part of a plan or series of related transactions (within the meaning of
Section 355(e) of the Code) in conjunction with the Merger.
(h) Maxim is not and has not been a United
States real property holding corporation within the meaning of Section 897 of
the Code during the five-year period ending on the Closing Date.
(i) Maxim has made available to EpiCept correct
and complete copies of (i) all income and other material Returns of Maxim and
its subsidiaries for the preceding three taxable years and (ii) any audit
report issued within the last three years (or otherwise with respect to any
audit or proceeding in progress) relating to income and other material Taxes of
Maxim or any of its subsidiaries.
33
(j) No claim has been made by a Taxing Authority
in a jurisdiction where Maxim or any of its subsidiaries does not file Returns
that the Maxim or a subsidiary of Maxim is or may be subject to taxation in
that jurisdiction.
3.8
Maxim
Intellectual Property
. For the purposes of this Agreement, the
following terms have the following definitions:
Maxim Intellectual Property
shall mean
any Intellectual Property that is owned by, or exclusively licensed to, Maxim
or any of its subsidiaries.
Maxim Registered Intellectual Property
means all of the Registered Intellectual Property owned by, or filed in the
name of, Maxim or any of its subsidiaries.
(a) Section 3.8(a) of the Maxim Disclosure
Schedule sets forth a complete and accurate list of all registered patents,
trademarks, service marks and copyrights (collectively, the Maxim Registered
Intellectual Property) and pending applications therefor, owned by Maxim or
any of its subsidiaries, including the jurisdictions in which such
registrations or applications for registration have been filed. Section 3.8(a) of the Maxim Disclosure
Schedule lists any proceedings or actions before any court, tribunal or regulatory
body (including the PTO) or equivalent authority anywhere in the world) related
to Maxim Registered Intellectual Property.
(b) To the Knowledge of Maxim, except as set
forth in Section 3.8(b) of the Maxim Disclosure Schedule no Intellectual
Property or product or service owned by Maxim or any of its subsidiaries is
subject to any proceeding or outstanding decree, order, judgment, contract,
license, agreement, or stipulation restricting in any manner the use, transfer,
or licensing thereof by Maxim or any of its subsidiaries in a manner that would
reasonably be expected to have a Material Adverse Effect, or that may affect
the validity, use or enforceability of such Intellectual Property owned by Maxim
in a manner that would reasonably be expected to have a Material Adverse
Effect.
(c) To the Knowledge of Maxim, (i) except with
respect to any registered trademark or service mark that Maxim is no longer
using, each material item of Maxim Registered Intellectual Property is valid
and subsisting; (ii) all necessary registration, maintenance and renewal fees
currently due in connection with such Maxim Registered Intellectual Property
have been made and all necessary documents, recordations and certificates in
connection with such Maxim Registered Intellectual Property have been filed
with the relevant authorities in the United States or foreign jurisdictions, as
the case may be, for the purposes of maintaining such Maxim Registered
Intellectual Property; and (iii) except as set forth in Section 3.8(c) of
the Maxim Disclosure Schedule, there are no actions that must be taken by Maxim
within 120 days of the Closing Date, including the payment of any registration,
renewal or maintenance fees or the filing of any responses to PTO office
actions, documents, applications or certificates for the purposes of obtaining,
maintaining, perfecting or renewing any such registrations and applications.
34
(d) Except with respect to licenses of Software
generally available for an annual license fee of no more than $25,000,
Section 3.8(d) of the Maxim Disclosure Schedule sets forth a complete and
accurate list of all contracts, licenses and agreements pursuant to which Maxim
or its subsidiaries licenses or otherwise is authorized to use any Technology
or Intellectual Property of a third party used in the businesses of Maxim and
its subsidiaries, and all such contracts, licenses and agreements are in full
force and effect. Following the Closing,
the Surviving Corporation will be permitted to exercise all of Maxims rights
under such contracts, licenses and agreements to the same extent and in the
same manner Maxim would have been able to had the transaction not occurred, and
without the payment of any additional consideration and without the necessity
of any third party consent. Except
pursuant to the licenses set forth on Section 3.8(d) of the Maxim
Disclosure Schedule, neither Maxim nor any of its subsidiaries is obligated to
make any payments by way of royalties, fees or otherwise to any third party
with respect to use of any Intellectual Property or Technology used in the
business of Maxim and its subsidiaries.
(e) Section 3.8(e) of the Maxim Disclosure Schedule sets forth a
complete and accurate list of all contracts, licenses and agreements pursuant
to which any Intellectual Property owned by Maxim has been licensed to any
third party. All such contracts,
licenses and agreements are in full force and effect and, to the Knowledge of Maxim
or any of its subsidiaries, no third party has materially breached any term
thereof.
(f) Maxim and its subsidiaries have taken
reasonable steps to protect the proprietary status of confidential information
and trade secrets owned by Maxim and its subsidiaries and of any confidential
information or trade secrets of third parties provided to Maxim or any of its
subsidiaries (to the extent subject to confidentiality restrictions). Except where the failure to do so would not
reasonably be expected to have a Material Adverse Effect, Maxim and its
subsidiaries have (i) executed valid and enforceable written agreements with
all of their employees by which the employees have (A) acknowledged the work
for hire status of Technology and Intellectual Property they may develop
during their employment; (B) agreed to assign to Maxim or its subsidiaries all
their rights in and to any Technology and Intellectual Property they may
develop during their employment that does not qualify as a work for hire; and
(C) agreed to hold all confidential information of Maxim and its subsidiaries
in confidence both during and after their employment; and (ii) executed valid
and enforceable written agreements with all consultants and contractors who
have been retained in connection with the development of Technology and
Intellectual Property by which the consultants and contractors have agreed to
assign to Maxim or its subsidiaries all their rights in and to such Technology
and Intellectual Property and agreed to hold all confidential information of Maxim
and its subsidiaries in confidence both during and after the term of their
engagements.
(g) To the Knowledge of Maxim, (i) all
Intellectual Property used in or necessary to the conduct of Maxims and each
of its subsidiaries businesses as presently conducted or currently
contemplated to be conducted by Maxim and its subsidiaries is either
35
owned exclusively by Maxim
or is the subject of a valid and enforceable license agreement; and (ii) the
products, services and the operation of the business of Maxim and its
subsidiaries as such business currently is conducted, including Maxims and its
subsidiaries design, development, manufacture, marketing and sale of the
products or services of Maxim and its subsidiaries (including products
currently under development) do not infringe or misappropriate the Intellectual
Property of any third party or constitute unfair competition or trade practices
under the laws of any jurisdiction. Except as set forth in Section 3.8(g)
of the Maxim Disclosure Schedule, neither Maxim nor any of its subsidiaries has
received notice from any third party that the operation of the business of Maxim
or any of its subsidiaries or any act, product or service of Maxim or any of
its subsidiaries, infringes or misappropriates the Intellectual Property of any
third party or constitutes unfair competition or trade practices under the laws
of any jurisdiction in a manner that would reasonably be expected to have a
Material Adverse Effect.
3.9
Compliance; Permits;
Restrictions
.
(a) Neither Maxim nor any of its subsidiaries nor
the conduct of their respective businesses is, in any material respect, in
conflict with, or in default or violation of, any Legal Requirement applicable
to Maxim or any of its subsidiaries or by which its or any of their respective
businesses or properties is bound or affected.
No investigation or review by any Governmental Entity is pending or, to
the Knowledge of Maxim, threatened against Maxim or its subsidiaries, nor has
any Governmental Entity indicated to Maxim or any of its subsidiaries an
intention to conduct the same. There is
no agreement, judgment, injunction, order or decree binding upon Maxim or any
of its subsidiaries which has or could reasonably be expected to have the effect
of prohibiting or materially impairing any business practice of Maxim or any of
its subsidiaries, any acquisition of material property by Maxim or any of its
subsidiaries or the conduct of business by Maxim or any of its subsidiaries as
currently conducted or presently proposed to be conducted.
(b) Maxim and its subsidiaries hold all permits,
licenses, variances, exemptions, orders and approvals from governmental
authorities that are material to the operation of the business of Maxim, or any
of its subsidiaries, as the case may be, including, such permits, licenses,
approvals, consents and other authorizations issued by the appropriate federal,
state, local or foreign regulatory agencies or bodies (collectively, the
Maxim Permits
). Maxim
and its subsidiaries are in compliance in all material respects with the terms
of the Maxim Permits.
3.10
Litigation
. There is no Action pending or, to the
Knowledge of Maxim, threatened, against or affecting Maxim or any subsidiary of
Maxim or any property or asset of Maxim or any subsidiary of Maxim which,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect on Maxim, or which in any manner seeks to prevent,
enjoin, alter or delay any of the transactions contemplated by this Agreement.
36
3.11
Brokers and
Finders Fees
. Except for fees
payable to Piper Jaffray & Co. pursuant to an engagement letter dated March
3, 2005 (a true and correct copy of which has been delivered to EpiCept), Maxim
has not incurred, nor will it incur, directly or indirectly, any liability for
brokerage or finders fees or agents commissions or any similar charges in
connection with this Agreement or any transaction contemplated hereby.
3.12
Employee Benefit Plans
.
(a) The employee compensation, severance,
termination pay, deferred compensation, stock or stock-related awards,
incentive, fringe or benefit plans, programs, policies, commitments or other
arrangements (whether or not set forth in a written document and including all employee
benefit plans within the meaning of Section 3(3) of ERISA) covering any
active employee, former employee, director or consultant of Maxim, any
subsidiary of Maxim or any trade or business (whether or not incorporated) that
is an Affiliate, or with respect to which Maxim or any of its subsidiaries has
any liability (contingent or otherwise), are referred to herein as the
Maxim Plans
. Maxim
Disclosure Schedule 3.12(a) contains a complete and accurate list of each
of the Maxim Plans. Maxim has provided
to EpiCept: (i) correct and
complete copies of all documents embodying each Maxim Plan including all
amendments thereto, all related trust documents, and all material written
agreements and contracts relating to each such Maxim Plan; (ii) the
three (3) most recent annual reports (Form Series 5500 and all
schedules and financial statements attached thereto), if any, required under
ERISA or the Code in connection with each Maxim Plan; (iii) the most
recent summary plan description together with the summary(ies) of material
modifications thereto, if any, required under ERISA with respect to each Maxim
Plan; (iv) all IRS determination, opinion, notification and advisory
letters relating to any Maxim Plan; (v) all material correspondence to or
from any governmental agency relating to any Maxim Plan; (vi) all COBRA
forms and related notices; (vii) all discrimination tests for each Maxim
Plan, if applicable, for the most recent three (3) plan years; and
(viii) if the Maxim Plan is funded, the most recent periodic accounting of
the Maxim Plan assets.
(b) Each Maxim Plan has been maintained and
administered in all material respects in compliance with its terms and with the
requirements prescribed by any and all statutes, orders, rules and regulations
(foreign or domestic), including ERISA and the Code, that are applicable to
such Maxim Plans. No suit, action or
other litigation (excluding claims for benefits incurred in the ordinary course
of Maxim Plan activities) has been brought, or to the Knowledge of Maxim is
threatened, against or with respect to any such Maxim Plan. There are no audits, inquiries or proceedings
pending or, to the Knowledge of Maxim, threatened by the IRS or the DOL with
respect to any Maxim Plans. All contributions,
reserves or premium payments required to be made or accrued as of the date
hereof to the Maxim Plans have been timely made or accrued. Section 3.12(b) of the Maxim Disclosure
Schedule includes a listing of the accrued vacation liability of Maxim and any
of its subsidiaries as of June 30, 2005.
Any Maxim Plan intended to be qualified under Section 401(a) of the
Code and each trust intended to qualify under Section 501(a) of the Code
37
(i) has either
applied for or obtained a favorable determination, notification, advisory
and/or opinion letter, as applicable, as to its qualified status from the IRS
or still has a remaining period of time under applicable Treasury Regulations
or IRS pronouncements in which to apply for such letter and to make any
amendments necessary to obtain a favorable determination, and
(ii) incorporates or has been amended to incorporate all provisions
required to comply with the Tax Reform Act of 1986 and subsequent legislation,
unless the Maxim Plan still has a remaining period of time under applicable
Treasury Regulations or IRS pronouncements in which to conform to such
legislation. Maxim or any of its
subsidiaries does not have any plan or commitment to establish any new Maxim
Plan, to modify any Maxim Plan (except to the extent required by law or to
conform any such Maxim Plan to the requirements of any applicable law, in each
case as previously disclosed to EpiCept in writing, or as required by this
Agreement), or to enter into any new Maxim Plan. Each Maxim Plan can be amended, terminated or
otherwise discontinued after the Effective Time in accordance with its terms,
without liability to EpiCept, Maxim or any of its subsidiaries or any of its
Affiliates (other than ordinary administration expenses or the issuance of Maxim
Common Stock upon exercise of previously granted Maxim Options).
(c) Neither Maxim, any of its subsidiaries, nor
any of their Affiliates has at any time ever maintained, established,
sponsored, participated in, or contributed to any plan subject to Title IV
of ERISA or Section 412 of the Code and at no time has Maxim, any of its
subsidiaries, nor any of their Affiliates contributed to or been requested to
contribute to any multiemployer plan, as such term is defined in Section 3(37)(A) of ERISA.
Neither Maxim, any of its subsidiaries nor any Affiliate has at any time
ever maintained, established, sponsored, participated in or contributed to any
multiple employer plan, or to any plan described in Section 413
of the Code. Neither Maxim, any of its
subsidiaries, nor any officer or director of Maxim or any of its subsidiaries
is subject to any liability or penalty under Section 4975 through 4980B of
the Code or Title I of ERISA. No prohibited
transaction, within the meaning of Section 4975 of the Code or
Sections 406 and 407 of ERISA, and not otherwise exempt under
Section 4975 of the Code or Section 408 of ERISA, has occurred with
respect to any Maxim Plan.
(d) Neither Maxim, any of its subsidiaries, nor
any of their Affiliates has, before the Effective Time and in any material
respect, violated any of the health continuation requirements of the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended and as
codified in Section 4980B of the Code and Sections 601 through 608 of
ERISA, the requirements of the Family Medical Leave Act of 1993, as amended,
the Health Insurance Portability and Accountability Act of 1996, as amended, or
any similar provisions of state or foreign law applicable to Maxim or any of
its subsidiaries employees. None of the
Maxim Plans promises or provides retiree medical or other retiree welfare
benefits to any person except as required by applicable law, and neither Maxim
nor any of its subsidiaries has represented, promised or contracted (whether in
oral or written form) to provide such retiree benefits to any employee, former
employee, director, consultant or other person, except to the extent required
by statute. Except as specifically set
forth in Section 3.12(d) of the Maxim
38
Disclosure Schedule, no Maxim
Plan provides health benefits that are not fully insured through an insurance
contract.
(e) Neither Maxim nor any of its subsidiaries is
bound by or subject to (and none of its respective assets or properties is
bound by or subject to) any arrangement with any labor union. No employee of Maxim or any of its
subsidiaries is represented by any labor union or covered by any collective
bargaining agreement and, to the Knowledge of Maxim, no campaign to establish
such representation is in progress.
There is no pending or, to the Knowledge of Maxim, threatened labor
dispute involving Maxim or any of its subsidiaries and any group of its
employees nor has Maxim or any of its subsidiaries experienced any labor
interruptions over the past three (3) years, and Maxim and its
subsidiaries consider their relationships with their employees to be good. Maxim and any of its subsidiaries (i) is
in compliance in all material respects with all applicable foreign, federal,
state and local laws, rules and regulations respecting employment, employment
practices, terms and conditions of employment and wages and hours, in each
case, with respect to its current or former employees; (ii) has withheld
and reported all amounts required by law or by agreement to be withheld and
reported with respect to wages, salaries and other payments to its current or
former employees; (iii) is not liable for any arrears of wages or any taxes
or any penalty for failure to comply with any of the foregoing (including
national health tax, national geriatric care tax, payroll tax or, if applicable
under the laws of any foreign jurisdiction, any national pension insurance
contributions levy, assessment or tariff); and (iv) is not liable for any
payment to any trust or other fund governed by or maintained by or on behalf of
any governmental authority, with respect to unemployment compensation benefits,
social security or other benefits or obligations (including national health,
geriatric care, pension and unemployment insurance laws; personnel leasing laws
or works constitution laws) for its current and former employees (other than
routine payments to be made in the normal course of business and consistent with
past practice). There are no pending,
threatened or reasonably anticipated claims or actions against Maxim or any of
its subsidiaries under any workers compensation policy or long-term disability
policy.
(f) Neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereby will (either alone
or upon the occurrence of any additional or subsequent events) (i) result
in any payment (including severance, unemployment compensation, golden
parachute, forgiveness of indebtedness, bonus or otherwise) becoming due to any
stockholder, director or employee of Maxim or any of its subsidiaries under any
Maxim Plan or otherwise, (ii) materially increase any benefits otherwise
payable under any Maxim Plan, or (iii) result in the acceleration of the
time of payment or vesting of any such benefits.
(g) No payment or benefit which will or may be
made by Maxim or any of its subsidiaries or its Affiliates in connection with
this transaction with respect to any employee or any other disqualified
individual (as defined in Code Section 280G and the regulations
thereunder) will be characterized as a parachute payment, within the meaning
of Code
39
Section 280G(B)(2). In the event
that the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby (either alone or upon the occurrence of any
additional or subsequent events) results or could result in any payment or
benefit which will be characterized as a parachute payment, within the
meaning of Code Section 280G(B)(2), Section 3.12(g) of the Maxim Disclosure
Schedule shall list all persons who Maxim reasonably believes are, with respect
to Maxim or any of its subsidiaries, disqualified individuals (within the
meaning of Section 280G of the Code and the regulations promulgated
thereunder) as determined as of the date hereof and provide a calculation of
the aggregate excess parachute payments within the meaning of Code Section
280G(B)(1). Within a reasonable period
of time after the last business day of each month after the date hereof and on
or about the date which is five (5) business days prior to the expected date of
the Closing, Maxim shall, as and to the extent necessary, deliver to EpiCept a
revised Schedule 3.12(g) which sets forth any additional information which
Maxim reasonably believes would affect the determination of the persons who
are, with respect to Maxim or any of its subsidiaries, deemed to be disqualified
individuals (within the meaning of Section 280G of the Code and the
regulations promulgated thereunder) or of the calculation of the aggregate excess
parachute payments as of the date of each such revised Schedule 3.12(g).
(h) Each Maxim Plan that has been adopted or
maintained by Maxim or any of its subsidiaries or its Affiliates, whether
informally or formally, for the benefit of employees located outside the United
States is specifically set forth in Section 3.12(h) of the Maxim Disclosure
Schedule.
3.13
Absence of Liens
and Encumbrances
. Maxim and each of
its subsidiaries has good and valid title to, or, in the case of leased assets,
valid leasehold interests in, all of its tangible assets used in its business,
free and clear of any liens or encumbrances except as reflected in the Maxim
Financials and except for liens for taxes not yet due and payable and such
imperfections of title and encumbrances, if any, which would not be material to
Maxim.
3.14
Environmental Matters
.
(a)
Hazardous
Material
. Except as set forth in
Section 3.14(a) of the Maxim Disclosure Schedule no underground storage tanks
and no Hazardous Materials are present as a result of the actions of Maxim, of
its subsidiaries or any affiliate of Maxim, or to the Knowledge of Maxim, as a
result of any actions of any third party, or otherwise, in, on or under any
property, including the land and the improvements, ground water and surface
water thereof, that Maxim or any of its subsidiaries has at any time owned,
operated, occupied or leased.
(b)
Hazardous Materials Activities
. Except set forth in Section 3.14(b) of the Maxim
Disclosure Schedule (i) neither Maxim nor any of its subsidiaries has
transported, stored, used, manufactured, disposed of, released or exposed its
employees or others to Hazardous Materials in violation of any law in effect on
or before the Closing Date, and (ii) neither Maxim nor any of its
subsidiaries has engaged in Hazardous Materials Activities in
40
violation
of any law, rule, regulation, treaty or statute promulgated by any Governmental
Entity in effect on or prior to the Closing Date to prohibit, regulate or
control Hazardous Materials or any Hazardous Materials Activities.
(c)
Permits
. Maxim and its subsidiaries currently hold all
Environmental Permits necessary for the conduct of Maxims and its subsidiaries
Hazardous Material Activities and other businesses of Maxim and its
subsidiaries as such activities and businesses are currently being conducted,
except where the failure to hold such Environmental Permits could not be
reasonably expected to result in a material liability to Maxim.
(d)
Environmental Liabilities
. No action, proceeding, revocation proceeding,
amendment procedure, writ, injunction or claim is pending, or to Maxims
Knowledge, threatened concerning any Environmental Permit, Hazardous Material
or any Hazardous Materials Activity of Maxim or any of its subsidiaries.
3.15
Agreements,
Contracts and Commitments
. The
following agreements, contracts or commitments with respect to which Maxim or
one of its subsidiaries is a party or is bound are referred to herein as the
Maxim Contracts
:
(a) any employment or consulting agreement,
contract or commitment with any officer or director or higher level employee or
member of Maxims Board of Directors, other than those that are terminable by Maxim
or any of its subsidiaries on no more than thirty (30) days notice
without liability or financial obligation to Maxim;
(b) any agreement or plan, including any stock
option plan, stock appreciation right plan or stock purchase plan, any of the
benefits of which will be increased, or the vesting of 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;
(c) any agreement of guaranty;
(d) any agreement, contract or commitment
containing any covenant limiting in any respect the right of Maxim or any of
its subsidiaries to engage in any line of business or to compete with any
person or granting any exclusive distribution or marketing rights;
(e) any agreement, contract or commitment
currently in force relating to the disposition or acquisition by Maxim or any
of its subsidiaries after the date of this Agreement of assets in excess of
$150,000 not in the ordinary course of business or pursuant to which Maxim has
any material ownership interest in any corporation, partnership, joint venture
or other business enterprise other than Maxims subsidiaries;
(f) any dealer,
distributor, joint marketing, alliance, development or other agreement
currently in force under which Maxim or any of its subsidiaries have continuing
41
material obligations to
jointly market any product, technology, compound or service, or any material
agreement pursuant to which Maxim or any of its subsidiaries have continuing
material obligations to jointly develop any intellectual property that will not
be owned, in whole or in part, by Maxim or any of its subsidiaries;
(g) any material agreement, contract or
commitment currently in force to license any third party to manufacture or
reproduce any Maxim product, technology, compound or service or any material
agreement, contract or commitment currently in force to sell or distribute any Maxim
product, compound or service, except agreements with distributors or sales
representatives in the normal course of business cancelable without penalty
upon notice of ninety (90) days or less and substantially in the form
previously provided to EpiCept;
(h) any mortgages, indentures, guarantees, loans
or credit agreements, security agreements or other agreements or instruments relating
to the borrowing of money or extension of credit (other than trade payables
arising, and advances to employees made, in the ordinary course of business
consistent with past practice);
(i) any settlement
agreement entered into within five (5) years prior to the date of this
Agreement; or
(j) any other agreement, contract or commitment
(i) in connection with or pursuant to which Maxim and its subsidiaries
will spend or receive (or are expected to spend or receive), in the aggregate,
more than $150,000 during the current fiscal year or during the next fiscal
year, or (ii) that is a material contract (as defined in Item 601(b)(10) of Regulation S-K of the SEC rules).
Section 3.15 of the Maxim Disclosure Schedule sets forth a complete
list of the Maxim Contracts (except that for this purpose the reference to
$150,000, where it appears in clause (i) of Section 3.15(j), instead shall be
deemed to refer to $300,000).
Neither Maxim nor any of
its subsidiaries, nor to Maxims Knowledge any other party to a Maxim Contract
is in material breach, violation or default under, and neither Maxim nor any of
its subsidiaries has received written notice that it has breached, violated or
defaulted under, any of the material terms or conditions of any Maxim Contract
in such a manner as would permit any other party to cancel or terminate any
such Maxim Contract, or would permit any other party to seek material damages
or other material remedies (for any or all of such breaches, violations or
defaults, in the aggregate).
3.16
Maxim Properties
.
Neither Maxim nor any of its
subsidiaries owns any real property. Maxim
and each of its subsidiaries have valid leasehold interests in all of their
material properties, free and clear of all liens, charges and encumbrances
except liens for taxes not yet due and payable and such liens or other
imperfections of title, if any, as do not materially detract from the value of
or materially interfere with the present use of the property affected
42
thereby; and
all leases pursuant to which Maxim or any of its subsidiaries lease from others
material real or personal property are valid and effective in accordance with
their respective terms, and there is not, under any such leases, any existing
material default or event of default of Maxim or any of its subsidiaries or, to
Maxims Knowledge, any other party (or any event which with notice or lapse of
time, or both, would constitute a material default and in respect of which Maxim
or its subsidiary has not taken steps to prevent such default from
occurring). All the plants, structures,
facilities, properties, leased premises and equipment of Maxim and its
subsidiaries, except such as may be under construction as set forth in Section
3.16. of the Maxim Disclosure Schedule, are in good
operating condition and repair, in all material respects, normal wear and tear
excepted.
3.17
Statements; Proxy
Statement/Prospectus
. None of the
information supplied or to be supplied by Maxim for inclusion or incorporation
by reference in (i) the Registration Statement will at the time it becomes
effective under the Securities Act, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading and
(ii) the Proxy Statement/Prospectus shall not, on the date the Proxy
Statement/Prospectus is first mailed to Maxims stockholders, at the time of
the Maxim Stockholders Meeting, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they are made, 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 Maxim
Stockholders Meeting which has become false or misleading. The Proxy Statement/Prospectus will comply as
to form in all material respects with the provisions of the Exchange Act and
the rules and regulations thereunder. If
at any time before the Effective Time, any event relating to Maxim or any of
its affiliates, officers or directors should be discovered by Maxim which should be set forth in an amendment to the
Registration Statement, Maxim shall promptly inform EpiCept. Notwithstanding the foregoing, Maxim makes no
representation or warranty with respect to any information supplied or to be
supplied by EpiCept that is, will be, or is required to be contained in any of
the foregoing documents.
3.18
Board Approval
.
The Board of Directors of Maxim
(i) has determined that the Merger is advisable and fair to, and in the
best interests of, Maxim and its stockholders, (ii) has unanimously
approved this Agreement, the Merger and the other transactions contemplated by
this Agreement and (iii) has unanimously approved and determined to
recommend the approval and adoption of this Agreement and the approval of the
Merger by the stockholders of Maxim (the
Maxim Board Recommendation
).
3.19
Opinion of
Financial Advisor
. The Board of
Directors of Maxim has received an opinion from Piper Jaffray & Co., 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 Maxims stockholders (other
than EpiCept, if a stockholder), a signed copy of which opinion will be
delivered to EpiCept solely for informational purposes as promptly as
practicable after receipt thereof by Maxim.
43
3.20
Vote Required
.
The affirmative vote of the holders of a
majority of the outstanding shares of Maxim Common Stock in favor of the
approval and adoption of this Agreement and the approval of the Merger is the
only vote of the holders of any class or series of Maxims capital stock
necessary to approve and adopt this Agreement and approve the transactions
contemplated hereby.
3.21
State Takeover
Statutes
. The Board of Directors of Maxim
has approved this Agreement, the Maxim Voting Agreements and the Merger and the
other transactions contemplated hereby and thereby, and such approval is
sufficient to render inapplicable to the Merger and the other transactions
contemplated hereby and thereby the restrictions contained in Section 203
of the DGCL, to the extent, if any, such restrictions would otherwise be
applicable to the Merger, this Agreement, the Maxim Voting Agreements and the
other transactions contemplated by this Agreement and the Maxim Voting Agreements. No other state takeover statute or similar
statute or regulation applies or purports to apply to the Merger, this
Agreement, the Maxim Voting Agreements or the transactions contemplated hereby
and thereby.
3.22
Maxim Rights
Agreement
. Maxim has taken all
actions necessary to (a) render the Rights Agreement entered into as of June
15, 2000 between Maxim and American Stock Transfer & Trust Company (the
Maxim Rights Agreement
), inapplicable to the Merger and the
other transactions contemplated by this Agreement, (b) ensure that (i) for
purposes of the transactions contemplated by this Agreement, none of EpiCept,
Merger Sub or any other subsidiary of EpiCept is an Acquiring Person (as
defined in the Maxim Rights Agreement) pursuant to the Maxim Rights Agreement
and (ii) neither a Distribution Date nor a Triggering Event (as such terms are
defined in the Maxim Rights Agreement) will occur, in the case of clauses (i)
and (ii), solely by reason of the execution or delivery of this Agreement or
the consummation of the Merger and other transactions contemplated by this
Agreement, and (c) provide that the Final Expiration Date (as defined in the Maxim
Rights Agreement) shall occur immediately prior to the Effective Time.
3.23
Foreign Corrupt
Practices Act
. Neither Maxim nor any
of its subsidiaries, nor any officer, director, employee or agent thereof or
any stockholder thereof acting on behalf of Maxim or any of its subsidiaries,
has taken any action or authorized, directed or participated in any act, in
violation of any provision of the United States Foreign Corrupt Practices Act
of 1977, as amended, applied to such entity or person.
3.24
Affiliates
. Section 3.24 of the Maxim Disclosure Schedule
contains an accurate and complete list of the names and addresses of those
persons who are Maxim Affiliates (as defined in Section 5.13) as of the date
hereof.
ARTICLE IV
CONDUCT PRIOR TO THE EFFECTIVE TIME
4.1
Conduct of
Business by EpiCept
. During the
period from the date of this Agreement and continuing until the earlier of the
termination of this Agreement or the Effective
44
Time, EpiCept
(which for the purposes of this Article IV shall include EpiCept and each
of its subsidiaries) agrees, except (i) as required by law, (ii) as
specifically provided in this Agreement or Article IV of the EpiCept
Disclosure Schedule or (iii) to the extent that Maxim shall otherwise
consent in writing (the provision of a response to any request for such consent
not to be unreasonably delayed), to carry on its business in the ordinary
course, in substantially the same manner as heretofore conducted and in
compliance with all applicable laws and regulations, to pay its debts and taxes
when due subject to good faith disputes over such debts or taxes, to pay or
perform other material obligations when due, subject to good faith disputes
over such obligations, and use its commercially reasonable efforts consistent
with past practices and policies to preserve intact its present business
organization, keep available the services of its present officers and employees
and preserve its relationships with customers, suppliers, distributors,
licensors, licensees and others with which it has business dealings. In addition, except (x) as required by
law, (y) as specifically provided in this Agreement or Article IV of the EpiCept
Disclosure Schedule or (z) to the extent that Maxim shall otherwise
consent in writing (the provision of a response to any request for such consent
not to be unreasonably delayed), EpiCept shall not do any of the following and
shall prevent its subsidiaries from doing any of the following:
(a) Except pursuant to the terms of EpiCept Stock
Option Plan or written agreements outstanding on the date hereof and disclosed
to Maxim in Section 4.1(a) of the EpiCept Disclosure Schedule, accelerate,
amend, modify or waive any stock repurchase rights; accelerate, amend or modify
the period of exercisability or other material terms of options, warrants or
restricted stock; reprice or exchange options or warrants granted under any
employee, consultant or director stock plans or otherwise; or authorize cash
payments in exchange for any options, warrants or restricted stock granted
under any of such plans or otherwise;
(b) Enter into any material partnership
arrangements, joint development agreements or strategic alliances;
(c) Grant any severance or termination pay (cash,
equity or otherwise) to any officer or employee except pursuant to written
agreements outstanding, or policies existing, on the date hereof and as
disclosed in Section 4.1(c) of the EpiCept Disclosure Schedule or otherwise
immaterial in amount (not to exceed $15,000 individually and $150,000 in the
aggregate), or adopt any new severance plan or amend or modify or alter in any
manner any severance plan, agreement or arrangement existing on the date
hereof;
(d) Transfer or license to any person or entity
or otherwise extend, amend or modify in any material respect any rights to the EpiCept
Intellectual Property, or enter into any agreements or make other commitments
or arrangements to grant, transfer or license to any person future patent
rights, other than non-exclusive licenses granted to customers, resellers and
end users in the ordinary course of business consistent with past practices;
45
(e) Other than the filing of the Amended and
Restated Certificate of Incorporation, declare, set aside or pay any dividends
on or make any other distributions (whether in cash, stock, equity securities
or property) in respect of any capital stock or split, combine or reclassify
any capital stock or issue or authorize the issuance of any other securities in
respect of, in lieu of or in substitution for any capital stock;
(f) Purchase, redeem or otherwise acquire,
directly or indirectly, any shares of capital stock of EpiCept or its
subsidiaries, except repurchases of unvested shares at cost in connection with
the termination of the employment relationship with any employee pursuant to
stock option or purchase agreements in effect on the date hereof;
(g) Except as contemplated by Section 5.22, issue,
deliver, sell, authorize, pledge or otherwise encumber any shares of capital
stock or any securities convertible into shares of capital stock, or
subscriptions, rights, warrants or options to acquire any shares of capital
stock or any securities convertible into shares of capital stock, or enter into
or amend, modify or consent to other agreements or commitments of any character
obligating it to issue any such shares or convertible securities, other than
(i) the issuance, delivery and/or sale of shares of EpiCept Common Stock
pursuant to the exercise of stock options or warrants therefor outstanding as
of the date of this Agreement, (ii) the issuance of EpiCept Common Stock upon
the conversion of EpiCept preferred stock or convertible notes outstanding as
of the date of this Agreement, (iii) the EpiCept Conversions and (iv) pursuant
to the filing of the Amended and Restated Certificate of Incorporation;
(h) Cause, permit or propose any amendments to
the Certificate of Incorporation or Bylaws of EpiCept (or similar governing
instruments of any subsidiaries) except for the filing of the Conversion
Amendment, the Reverse Split Amendment and the Amended and Restated Certificate
of Incorporation;
(i) Acquire or agree to acquire by merging or
consolidating with, or by purchasing any equity interest in or a material
portion of the assets of, or by any other manner, any business or any
corporation, partnership, association or other business organization or
division thereof, or otherwise acquire or agree to acquire any assets that are
material, individually or in the aggregate, to the business of EpiCept, other
than in the ordinary course of business consistent with past practice;
(j) Sell, lease, license, encumber, convey,
assign, sublicense or otherwise dispose of or transfer, in whole or in part,
any properties or assets or any interest therein (other than those transfers or
licenses permitted by Section 4.1(d)) except for sales, leases, licenses,
encumbrances, conveyances, assignments, sublicenses, dispositions or other
transfers (i) in the ordinary course of business consistent with past
practice or (ii) of property or assets that are not material, individually
or in the aggregate, to the business of EpiCept;
(k) Except as contemplated by Section 5.22, incur
any indebtedness for borrowed money or guarantee any such indebtedness of
another person, issue or sell any debt
46
securities or options,
warrants, calls or other rights to acquire any debt securities of EpiCept,
enter into any keep well or other agreement to maintain any financial
statement condition or enter into any arrangement having the economic effect of
any of the foregoing other than (i) in connection with the financing of
ordinary course trade payables consistent with past practice or
(ii) pursuant to existing credit facilities in the ordinary course of
business;
(l) Adopt or amend any employee benefit plan or
employee stock purchase or employee stock option plan, or enter into any
employment contract or collective bargaining agreement (other than offer
letters and letter agreements entered into in the ordinary course of business
consistent with past practice with employees who are terminable at will), pay
any special bonus or special remuneration (cash, equity or otherwise) to any
director, employee or consultant, or increase the salaries or wage rates or
fringe benefits (including rights to severance or indemnification) of its
directors, officers, employees or consultants except payment of bonuses or
increases in salaries or wage rates or fringe benefits to non-officer employees
or consultants in the ordinary course of business consistent with past
practice;
(m) Make payments outside of the ordinary course
of business in excess of $150,000 in the aggregate;
(n) Except in the ordinary course of business
consistent with past practice, modify, amend or terminate any material contract
or agreement to which EpiCept or any of its subsidiaries is a party, or waive,
delay the exercise of, release or assign any material rights or material claims
thereunder;
(o) Enter into, or materially modify, any
material contract, agreement or obligation relating to the distribution, sale,
license or marketing by third parties of EpiCepts products or products
licensed by EpiCept, other than nonexclusive contracts, agreements or
obligations entered into in the ordinary course of business that can be terminated
or cancelled by EpiCept without material penalty or further material payment
and without more than ninety (90) days notice;
(p) Revalue any of its assets or, except as
required by GAAP, adopt or change any accounting methods, principles or practices;
(q) Enter into any closing agreement in respect
of material Taxes, settle any claim or assessment in respect of any material
Taxes, or consent to any extension or waiver of the limitation period
applicable to any claim or assessment in respect of any material Taxes or
surrender any right to claim a refund of Taxes or obtain any Tax ruling;
(r) Except as contemplated by Section 5.22, incur
or enter into any agreement or commitment in excess of $250,000 individually;
(s) Hire any employee or consultant with an
annual compensation level in excess of $125,000 or who is entitled to or is
paid a bonus in excess of $75,000;
47
(t) Pay, discharge or satisfy any claim,
liability or obligation (absolute, accrued, asserted or unasserted, contingent
or otherwise), other than the payment, discharge or satisfaction of amounts in
the ordinary course of business;
(u) Make any grant of exclusive rights to any
third party;
(v) Modify or amend in any manner that is materially
adverse to Maxim or EpiCept, or terminate, any material agreement or any
confidentiality agreement entered into by EpiCept or any subsidiary in the
ordinary course of business, or release or waive any material rights for
claims, or modify or amend in any manner materially adverse to Maxim or EpiCept,
any confidentiality, standstill or similar agreements to which EpiCept or any
of its subsidiaries is a party;
(w) Make or change any material Tax election,
change any method of accounting resulting in a material amount of additional
Tax or file any material amended Tax Return;
(x) Engage in any action with the intent to,
directly or indirectly, adversely impact or materially delay the consummation
of the Merger or any of the other transactions contemplated by this Agreement;
(y) Enter into or
extend the term or scope of any contract or agreement that purports to restrict
EpiCept, or any existing or future subsidiary or affiliate of EpiCept, from
engaging in any line of business or in any geographic area; or
(z) Agree in writing or otherwise to take any of
the actions described in Section 4.1(a) through (y) above.
4.2
Conduct of
Business by Maxim
. During the period
from the date of this Agreement and continuing until the earlier of the
termination of this Agreement pursuant to its terms or the Effective Time, Maxim
(which for the purposes of this Article IV shall include Maxim and each of
its subsidiaries) agrees, except (i) as required by law, (ii) as
specifically provided in this Agreement or Article IV of the Maxim
Disclosure Schedule or (iii) to the extent that EpiCept shall otherwise
consent in writing (the provision of a response to any request for such consent
not to be unreasonably delayed), to carry on its business in the ordinary
course, in substantially the same manner as heretofore conducted and in
compliance with all applicable laws and regulations, to pay its debts and taxes
when due subject to good faith disputes over such debts or taxes, to pay or
perform other material obligations when due, subject to good faith disputes
over such obligations and use its commercially reasonable efforts consistent
with past practices and policies to preserve intact its present business
organization, keep available the services of its present officers and employees
and preserve its relationships with customers, suppliers, distributors,
licensors, licensees and others with which it has business dealings. In addition, except (x) as required by
law, (y) as specifically provided in this Agreement or Article IV of the Maxim
Disclosure Schedule or (z) to the extent that EpiCept shall otherwise
48
consent
in writing (the provision of a
response to any request for such consent not to be unreasonably delayed), Maxim
shall not do any of the following and shall prevent its subsidiaries from doing
any of the following:
(a) Except or pursuant to the terms of Maxim
Stock Option Plans or written agreements outstanding on the date hereof and
disclosed to Maxim in Section 4.2(a) of the Maxim Disclosure Schedule,
accelerate, amend, modify or waive any stock repurchase rights; accelerate,
amend or modify the period of exercisability or other material terms of
options, warrants or restricted stock; reprice or exchange options or warrants
granted under any employee, consultant or director stock plans or otherwise; or
authorize cash payments in exchange for any options, warrants or restricted
stock granted under any of such plans or otherwise;
(b) Enter into any material partnership
arrangements, joint development agreements or strategic alliances;
(c) Grant any severance or termination pay (cash,
equity or otherwise) to any officer or employee except pursuant to written
agreements outstanding, or policies existing, on the date hereof and as
disclosed in Section 4.2(c) of the Maxim Disclosure Schedule or otherwise
immaterial in amount (not to exceed $15,000 individually and $150,000 in the
aggregate), or adopt any new severance plan or amend or modify or alter in any
manner any severance plan, agreement or arrangement existing on the date
hereof;
(d) Transfer or license to any person or entity
or otherwise extend, amend or modify in any material respect any rights to the Maxim
Intellectual Property, or enter into any agreements or make other commitments
or arrangements to grant, transfer or license to any person future patent
rights, other than non-exclusive licenses granted to customers, resellers and
end users in the ordinary course of business consistent with past practices;
(e) Declare, set aside or pay any dividends on or
make any other distributions (whether in cash, stock, equity securities or
property) in respect of any capital stock or split, combine or reclassify any
capital stock or issue or authorize the issuance of any other securities in
respect of, in lieu of or in substitution for any capital stock;
(f) Purchase, redeem or otherwise acquire,
directly or indirectly, any shares of capital stock of Maxim or its
subsidiaries, except repurchases of unvested shares at cost in connection with
the termination of the employment relationship with any employee pursuant to
stock option or purchase agreements in effect on the date hereof;
(g) Issue, deliver, sell, authorize, pledge or
otherwise encumber any shares of capital stock or any securities convertible
into shares of capital stock, or subscriptions, rights, warrants or options to
acquire any shares of capital stock or any securities convertible into shares
of capital stock, or enter into or amend, modify or consent to other agreements
or commitments of any character obligating it to issue any such shares or
convertible securities,
49
other than the issuance,
delivery and/or sale of shares of Maxim Common Stock pursuant to the exercise
of stock options or warrants therefor outstanding as of the date of this
Agreement.
(h) Cause, permit or propose any amendments to
the Certificate of Incorporation or Bylaws of Maxim (or similar governing
instruments of any subsidiaries);
(i) Acquire or agree to acquire by merging or
consolidating with, or by purchasing any equity interest in or a material
portion of the assets of, or by any other manner, any business or any
corporation, partnership, association or other business organization or
division thereof, or otherwise acquire or agree to acquire any assets that are
material, individually or in the aggregate, to the business of Maxim, other
than in the ordinary course of business consistent with past practice;
(j) Sell, lease, license, encumber, convey,
assign, sublicense or otherwise dispose of or transfer, in whole or in part,
any properties or assets or any interest therein (other than those transfers or
licenses permitted by Section 4.2(d)) except for sales, leases, licenses,
encumbrances, conveyances, assignments, sublicenses, dispositions or other
transfers (i) in the ordinary course of business consistent with past
practice or (ii) of property or assets that are not material, individually
or in the aggregate, to the business of Maxim;
(k) Incur any indebtedness for borrowed money or
guarantee any such indebtedness of another person, issue or sell any debt
securities or options, warrants, calls or other rights to acquire any debt
securities of Maxim, enter into any keep well or other agreement to maintain
any financial statement condition or enter into any arrangement having the
economic effect of any of the foregoing other than (i) in connection with
the financing of ordinary course trade payables consistent with past practice
or (ii) pursuant to existing credit facilities in the ordinary course of
business;
(l) Adopt or amend any employee benefit plan or
employee stock purchase or employee stock option plan, or enter into any
employment contract or collective bargaining agreement (other than offer
letters and letter agreements entered into in the ordinary course of business
consistent with past practice with employees who are terminable at will),
pay any special bonus or special remuneration (cash, equity
or otherwise) to any director, employee or consultant, or increase the salaries
or wage rates or fringe benefits (including rights to severance or
indemnification) of its directors, officers, employees or consultants except
payment of bonuses or increases in salaries or wage rates or fringe benefits to
non-officer employees or consultants in the ordinary course of business
consistent with past practice ;
(m) Make payments outside of the ordinary course
of business in excess of $150,000 in the aggregate;
(n) Except in the ordinary course of business
consistent with past practice, modify, amend or terminate any material contract
or agreement to which Maxim or any of its
50
subsidiaries
is a party or waive, delay the exercise of, release or assign any material
rights or material claims thereunder;
(o) Enter into, or materially modify, any
material contract, agreement or obligation relating to the distribution, sale,
license or marketing by third parties of Maxims products or products licensed
by Maxim, other than nonexclusive contracts, agreements or obligations entered
into in the ordinary course of business that can be terminated or cancelled by Maxim
without material penalty or further material payment and without more than
ninety (90) days notice;
(p) Revalue any of its assets or, except as
required by GAAP, adopt or change any accounting methods, principles or
practices;
(q) Enter into any closing agreement in respect
of material Taxes, settle any claim or assessment in respect of any material
Taxes, or consent to any extension or waiver of the limitation period
applicable to any claim or assessment in respect of any material Taxes or surrender any right to claim a refund of
Taxes or obtain any Tax ruling;
(r) Incur or enter into any agreement or
commitment in excess of $250,000 individually;
(s) Hire any employee or consultant with an
annual compensation level in excess of $125,000 or who is entitled to or is
paid a bonus in excess of $75,000;
(t) Pay, discharge or satisfy any claim,
liability or obligation (absolute, accrued, asserted or unasserted, contingent
or otherwise), other than the payment, discharge or satisfaction of amounts in
the ordinary course of business;
(u) Make any grant of exclusive rights to any
third party;
(v) Modify or amend in any manner that is
materially adverse to EpiCept or Maxim, or terminate, any material agreement or
any confidentiality agreement entered into by Maxim or any subsidiary in the
ordinary course of business, or release or waive any material rights for
claims, or modify or amend in any manner materially adverse to EpiCept or Maxim,
any confidentiality, standstill or similar agreements to which Maxim or any of
its subsidiaries is a party;
(w) Make or change any material Tax election,
change any method of accounting resulting in a material amount of additional
Tax or file any material amended Tax Return;
(x) Engage in any action with the intent to,
directly or indirectly, adversely impact or materially delay the consummation
of the Merger or any of the other transactions contemplated by this Agreement;
51
(y) Enter into or
extend the term or scope of any contract or agreement that purports to restrict
Maxim, or any existing or future subsidiary or affiliate of Maxim, from
engaging in any line of business or in any geographic area; or
(z) Agree in writing or otherwise to take any of
the actions described in Section 4.2(a) through (y) above.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1
Proxy Statement/Prospectus;
Registration Statement
. As promptly
as practicable after the execution of this Agreement, Maxim and EpiCept will
prepare and file with the SEC the Proxy Statement/Prospectus, and EpiCept will
prepare and file with the SEC the Registration Statement in which the Proxy
Statement/Prospectus is to be included as a prospectus. Maxim, EpiCept and Merger Sub will provide
each other with any information with respect to it which may be required or
appropriate for inclusion in the Proxy Statement/Prospectus and the
Registration Statement, or in any amendments or supplements thereto, and cause
its counsel and auditors to cooperate with the others counsel and auditors in
the preparation and filing of the Proxy Statement/Prospectus and the Registration
Statement pursuant to this Section 5.1.
Each of Maxim and EpiCept will respond to any comments from the SEC,
will use its best efforts to cause the Registration Statement to be declared
effective under the Securities Act as promptly as practicable after such filing
and to keep the Registration Statement effective as long as is necessary to
consummate the Merger and the transactions contemplated hereby. Each of Maxim and EpiCept will notify the
other promptly upon the receipt of any comments from the SEC or its staff in
connection with the filing of, or amendments or supplements to, the
Registration Statement and/or the Proxy Statement/Prospectus. Whenever any event occurs which is required
to be set forth in an amendment or supplement to the Proxy Statement/Prospectus
or the Registration Statement, Maxim or EpiCept, as the case may be, will
promptly inform the other of such occurrence and cooperate in filing with the
SEC or its staff, and/or mailing to stockholders of Maxim and/or EpiCept, such
amendment or supplement. Each of Maxim
and EpiCept shall cooperate and provide the other with a reasonable opportunity
to review and comment on any amendment or supplement to the Registration
Statement and Proxy Statement/Prospectus prior to filing such with the SEC, and
will provide each other with a copy of all such filings made with the SEC. Maxim will cause the Proxy
Statement/Prospectus to be mailed to its stockholders at the earliest
practicable time after the Registration Statement is declared effective by the
SEC. Each of the parties hereto shall
cause the Proxy Statement/Prospectus and the Registration Statement, as
applicable, to comply as to form and substance as to such party in all material
respects with the applicable requirements of (i) the Exchange Act,
(ii) the Securities Act, and (iii) the rules and regulations of
Nasdaq. Without in any way limiting or
affecting the requirements of Section 5.2(b) hereof, nothing in this Agreement
shall preclude either Maxim or EpiCept from including in the Proxy
Statement/Prospectus or any amendment or supplement thereto any information
that it reasonably determines is required to be disclosed pursuant to
applicable securities laws.
52
5.2
Meeting of Maxim
Stockholders; Maxim Board Recommendation
.
(a)
Meeting of Maxim Stockholders
. Promptly after the date hereof, Maxim will
take all action necessary or advisable in accordance with the DGCL and its
Certificate of Incorporation and Bylaws to call, hold and convene the Maxim
Stockholders Meeting to consider the approval and adoption of this Agreement
and approval of the Merger, to be held as promptly as practicable. Subject to Section 5.3(d), Maxim will
use its best efforts to solicit from its stockholders proxies in favor of the
approval and adoption of this Agreement and approval of the Merger, and will
take all other action necessary or advisable to secure the vote or consent of
its stockholders required by the rules of Nasdaq, the DGCL and its Certificate
of Incorporation to obtain such approvals, including engaging one or more
nationally recognized proxy solicitation firms and information agents to assist
in such solicitation. Notwithstanding
anything to the contrary contained in this Agreement, Maxim may adjourn or
postpone the Maxim Stockholders Meeting to the extent necessary to facilitate
the provision of any necessary supplement or amendment to the Proxy
Statement/Prospectus, provided that such supplement or amendment is provided to
its respective stockholders in advance of the vote to be taken at such meeting
or, if as of the time for which the Maxim Stockholders Meeting is originally
scheduled (as set forth in the Proxy Statement/Prospectus) there are
insufficient shares of Maxim Common Stock represented (either in person or by
proxy) to constitute a quorum necessary to conduct the business of such Maxim
Stockholders Meeting. Maxim shall
ensure that the Maxim Stockholders Meeting is called, noticed, convened, held
and conducted, and that all proxies solicited by it in connection with the Maxim
Stockholders Meeting are solicited in compliance with the DGCL, its
Certificate of Incorporation and Bylaws, the rules of Nasdaq and all other
applicable Legal Requirements.
(b)
Board Recommendation
. Subject to Section 5.3(d), except to the
extent that the Board of Directors of Maxim, or if applicable, a committee
thereof, determines in good faith after consulting with and receiving the
advice of its outside legal counsel, that taking or failing to take such action
is reasonably likely to result in a breach of its fiduciary duties under
applicable law: (i) the Board of
Directors of Maxim shall make the Maxim Board Recommendation to its
stockholders, (ii) the Proxy Statement/Prospectus shall include a statement
to the effect that the Board of Directors of Maxim has made the Maxim Board
Recommendation and (iii) neither the Board of Directors of Maxim nor any
committee thereof shall withdraw, amend or modify, or propose or resolve to
withdraw, amend or modify in a manner adverse to EpiCept, the Maxim Board
Recommendation.
5.3
Acquisition Proposals
.
(a)
No Solicitation
. Subject to Section 5.3(c), each of Maxim
and EpiCept agrees that neither it nor any of its subsidiaries shall, nor shall
it or any of its subsidiaries authorize or permit any of the officers,
directors and representatives (including any investment banker, attorney or
accountant retained by it or any of its subsidiaries) of it or its subsidiaries
to, and that it shall use commercially reasonable efforts to cause its and its
subsidiaries non-officer employees and other agents not to (and shall not
authorize any of them to) directly or
53
indirectly:
(i) solicit, initiate, knowingly encourage, knowingly facilitate or
knowingly induce any inquiry with respect to, or the making, submission or
announcement of, any Acquisition Proposal with respect to itself,
(ii) participate in any negotiations regarding, or furnish to any Person
any nonpublic information with respect to, or knowingly take any other action
to facilitate any inquiries or the making of any proposal that constitutes or
may reasonably be expected to lead to, any Acquisition Proposal with respect to
itself, (iii) engage in discussions with any Person with respect to any
Acquisition Proposal with respect to itself, except as to the existence of the
terms contained in this Section 5.3(a), (iv) release or permit the
release of any Person from, or waive or permit the waiver of any provision of,
any confidentiality, nondisclosure or similar agreement (other than as required
pursuant to the terms thereof as in effect on the date hereof) under which it
or any of its subsidiaries has any rights, or fail to use commercially
reasonable efforts to enforce or cause to be enforced in all material respects
each such agreement at the request of Maxim (in the case of an agreement under
which EpiCept has any rights) or EpiCept (in the case of an agreement under
which Maxim has any rights), (v) approve, endorse or recommend any
Acquisition Proposal with respect to itself (except to the extent specifically
permitted pursuant to Section 5.3(d)), (vi) with respect to Maxim,
amend or grant any waiver or release or approve any transaction or redeem
rights under the Maxim Rights Agreement (except as provided for under
Section 3.22), (vii) approve any transaction under Section 203
of the DGCL, (viii) approve of any persons becoming an interested
stockholder under Section 203 of the DGCL or (ix) enter into any
letter of intent or similar document or any contract, agreement or commitment
contemplating or otherwise relating to any Acquisition Proposal or transaction
contemplated thereby with respect to itself.
Each of Maxim and EpiCept agrees that it and its subsidiaries shall, and
it shall cause its and its subsidiaries officers, directors and
representatives (including any investment banker, attorney or accountant
retained by it or any of its subsidiaries) to, and it shall use commercially
reasonable efforts to cause its and its subsidiaries non-officer employees and
other agents to: immediately cease any and all existing activities, discussions
or negotiations with any third parties conducted heretofore with respect to any
Acquisition Proposal with respect to itself.
Each of Maxim and EpiCept agrees that it will promptly request each
Person that has entered into a confidentiality agreement with Maxim or EpiCept
in connection with its consideration of an Acquisition Proposal or equity
investment to return all confidential information heretofore furnished to such
Person by or on behalf of Maxim or EpiCept or any of their subsidiaries, as the
case may be.
(b)
Notification
of Unsolicited Acquisition Proposals
.
(i) As promptly as practicable (but in any event
within one business day) after any of Maxims or EpiCepts respective officers,
directors or representatives (including any investment banker, attorney or
accountant retained by it or any of its subsidiaries) receives or becomes aware
of the receipt of any Acquisition Proposal by Maxim or EpiCept, as the case may
be, or any request for nonpublic information or inquiry which Maxim or EpiCept,
as the case may be reasonably believes could lead to an Acquisition Proposal, Maxim
or EpiCept, as the case may be, shall provide the other
54
party
hereto with written notice of the material terms and conditions of such
Acquisition Proposal, request or inquiry, and the identity of the Person or
group making any such Acquisition Proposal, request or inquiry and a copy of
all written materials provided in connection with such Acquisition Proposal,
request or inquiry. The recipient of the
Acquisition Proposal, request or inquiry shall keep the other party hereto
informed as promptly as practicable (but in any event within one (1) business
day) in all material respects of the status and details (including all
amendments or proposed amendments) of any such Acquisition Proposal, request or
inquiry and shall promptly (but in any event within one (1) business day)
provide to the other party hereto a copy of all written and electronic
materials subsequently provided in connection with such Acquisition Proposal,
request or inquiry.
(ii) Maxim or EpiCept, as the case may be, shall
provide the other party with forty-eight (48) hours prior notice (or such
lesser prior notice as is provided to the members of its Board of Directors) of
any meeting of its Board of Directors at which its Board of Directors is
reasonably expected to consider any Acquisition Proposal.
(c)
Superior Offers
. Notwithstanding anything to the contrary
contained in Section 5.3(a), in the event that Maxim receives an
Acquisition Proposal that constitutes or that the Board of Directors of Maxim
determines in good faith is reasonably likely to result in a Superior Offer (as
defined in Section 5.3(g)) with respect to itself, it may, at any time
prior to obtaining the Maxim Stockholder Approval (but in no event after
obtaining the Maxim Stockholder Approval), take the following actions (but only
(i) if Maxim has not breached Section
5.3(a) in connection with the Superior Offer and (ii) to the extent that Maxims
Board of Directors believes in good faith, after consulting with and receiving
the advice of its outside legal counsel, that failure to take any such action is
reasonably likely to result in a breach of its fiduciary obligations under
applicable law):
(i) Furnish nonpublic information to the third
party making such Acquisition Proposal, provided that (i) (A) at
least one (1) business day prior to furnishing any such nonpublic information
to such party Maxim gives EpiCept written notice of its intention to furnish
nonpublic information and (B) Maxim receives from the third party an
executed confidentiality agreement, the terms of which are at least as
restrictive as the terms contained in the Confidentiality Agreement (as defined
in Section 5.4), and (ii) contemporaneously with furnishing any such
nonpublic information to such third party, it furnishes such nonpublic
information to EpiCept (to the extent such nonpublic information has not been
previously so furnished); and
(ii) Engage in discussions or negotiations with
the third party with respect to the Superior Offer, provided that at least
forty-eight (48) hours prior to entering into negotiations with such third party,
it gives EpiCept written notice of its intention to enter into negotiations
with such third party.
55
(d)
Change of Recommendation
. Notwithstanding the provisions of
Section 5.2(b), in response to the receipt of a Superior Offer, the Board
of Directors of Maxim may withdraw,
amend or modify the Maxim Board Recommendation and, in the case of a Superior
Offer that is a tender or exchange offer made directly to its stockholders, may
recommend that its stockholders accept the tender or exchange offer (any of the
foregoing actions in response to the receipt of a Superior Offer, whether by a
Board of Directors or a committee thereof, a
Change of
Recommendation
), if:
(i) it determines in good faith after consulting
with and receiving the advice of its outside legal counsel that taking or
failing to take such action is reasonably likely to result in a breach of its
fiduciary duties under applicable law; and
(ii) Maxim shall have (A) at least five (5)
business days prior to a Change of Recommendation provided to EpiCept written
notice which shall state expressly (1) that it has received such Superior
Offer, (2) the material terms and conditions of such Superior Offer and the
identity of the Person or group making the Superior Offer, (3) that it intends
to effect a Change of Recommendation and the manner in which it intends to do
so, (B) provided to EpiCept a copy of all written and electronic materials
delivered to the Person or group making the Superior Offer it has received, and
(C) made available to EpiCept all materials and information made available to
the Person or group making the Superior Offer it has received.
(e)
Continuing Obligation to Call, Hold and
Convene Stockholders Meeting; No Other Vote
. Notwithstanding anything to the contrary
contained in this Agreement, the obligation of Maxim to call, give notice of,
convene and hold the Maxim Stockholders Meeting shall not be limited or
otherwise affected by the commencement, disclosure, announcement or submission
to Maxim of any Acquisition Proposal with respect to it, or by any Change of
Recommendation. Neither Maxim nor EpiCept
shall submit to the vote of its respective stockholders any Acquisition
Proposal or publicly propose to do so.
(f)
Compliance with Tender Offer Rules
. Nothing contained in this Agreement shall
prohibit Maxim or its Board of Directors from taking and disclosing to its
stockholders a position contemplated by Rules 14d-9 and 14e-2(a)
promulgated under the Exchange Act;
provided
that the content of any
such disclosure thereunder shall be subject to the terms of Section 5.3 of
this Agreement. Without limiting the
foregoing proviso, Maxim shall not effect a Change of
Recommendation unless specifically permitted pursuant to the terms of
Section 5.3(d).
(g)
Certain Definitions
. For purposes of this Agreement, the following
terms shall have the following meanings:
(i)
Acquisition Proposal
,
with respect to a party, shall mean any offer or proposal, relating to any
transaction or series of related transactions involving: (A) any purchase or acquisition by any
Person or group (as defined under Section 13(d)
56
of the Exchange Act and
the rules and regulations thereunder) of more than a fifteen percent (15%)
interest in the total outstanding voting securities of such party or any tender
offer or exchange offer or other proposed acquisition of voting securities of
such party that, if consummated, would result in any Person or group
beneficially owning fifteen percent (15%) or more of the total outstanding
voting securities of such party, (B) any merger, consolidation, business combination
or similar transaction in which the stockholders of such party immediately
preceding such transaction hold, directly or indirectly, less than eighty-five
percent (85%) of the equity interests in the surviving or resulting entity of
such transaction or in any parent entity immediately following such
transaction, (C) any purchase from such party of more than a fifteen
percent (15%) interest in the total outstanding voting securities of such party
or the granting or issuance of rights to acquire more than a fifteen percent
(15%) interest in the total outstanding voting securities of such party,
including pursuant to options, warrants or similar rights to purchase voting
securities or the issuance of debt or other instruments convertible,
exchangeable or exercisable for voting securities of such party, or
(D) any sale, lease (other than in the ordinary course of business),
transfer, distribution, acquisition or disposition of more than fifteen percent
(15%) of the assets of such party (including its subsidiaries taken as a whole)
other than, in the case of EpiCept, any agreement with a third party with
respect to the development and commercialization of LidoPAIN SP (and no other
product of EpiCept) in Europe and Asia, and, in the case of Maxim, any agreement
with a third party with respect to the development and commercialization of
Ceplene or compounds identified through Maxims apoptosis program (and no other
products of Maxim), or (E) any liquidation or dissolution of such party (
provided, however
, that the transactions contemplated hereby
shall not be deemed an Acquisition Proposal in any case).
(ii)
Superior Offer
shall mean an unsolicited, bona fide written Acquisition Proposal made by a
third party after the date hereof on terms that the Board of Directors of Maxim
believes in good faith (after consultation with its outside legal counsel and a
financial advisor of nationally recognized reputation), taking into account,
among other things, all legal, financial, regulatory and other aspects of the
Acquisition Proposal and the Person making the offer and the strategic and
other benefits of the Merger, (i) is reasonably capable of being
consummated on the terms proposed, and (ii) if consummated on such terms
would result in a transaction more favorable, from a financial point of view,
to Maxims stockholders (in their capacities as stockholders) than the terms of
the Merger, it being understood and agreed that the inclusion of a due
diligence condition in an Acquisition Proposal shall preclude such Acquisition
Proposal from being a Superior Offer for the purposes of Section 5.3(d)
hereof. For the purposes of this
definition, the term Acquisition Proposal shall have the meaning assigned to
such term in Section 5.3(g)(i), except that
references to 15% therein shall be deemed to be references to 100%.
57
5.4
Confidentiality;
Access to Information; No Modification of Representations, Warranties or
Covenants
.
(a)
Confidentiality
. The parties acknowledge that EpiCept and Maxim
have previously executed a confidentiality agreement dated June 1, 2005 (the
Confidentiality Agreement
), which Confidentiality Agreement
will continue in full force and effect in accordance with its terms.
(b)
Access to Information
. Each of EpiCept and Maxim will afford the
other and the others accountants, counsel and other representatives reasonable
access during normal business hours to its properties, books, records and
personnel during the period prior to the Effective Time to obtain all
information concerning its business, including the status of product
development and commercialization efforts, clinical trials, properties, results
of operations and personnel, as such other party may reasonably request;
provided, however
, that any party may restrict the foregoing
access to the extent that any law, treaty, rule or regulation of any
Governmental Entity applicable to such party requires such party or its
subsidiaries to restrict or prohibit access to any such properties or information. Any information provided pursuant to this
Section 5.4(b) shall be subject to the Confidentiality Agreement.
(c)
No Modification of Representations and
Warranties or Covenants
. No
information or knowledge obtained in any investigation or notification pursuant
to this Section 5.4, Section 5.6 or Section 5.7 shall affect or
be deemed to modify any representation or warranty contained herein, the
covenants or agreements of the parties hereto or the conditions to the
obligations of the parties hereto under this Agreement.
5.5
Public Disclosure
. Without limiting any other provision of this
Agreement, Maxim and EpiCept will consult with each other and agree before
issuing any press release or otherwise making any public statement with respect
to the Merger, this Agreement or any Acquisition Proposal and will not issue
any such press release or make any such public statement prior to such
consultation and agreement, except as may be required by law or any listing
agreement with the Nasdaq or any other applicable national securities exchange
(in which case Maxim will first consult with EpiCept to the extent reasonably
practicable). The parties have agreed to
the text of the joint press release announcing the signing of this
Agreement. Notwithstanding the
provisions of this Section 5.5, in the event that there has been a Change of
Recommendation pursuant to Section 5.3(d) hereof, neither Maxim nor EpiCept
will have any further obligation to consult with each other, and agree, before
issuing any press release or otherwise making any public statement with respect
to the Merger, this Agreement or any Acquisition Proposal.
5.6
Regulatory
Filings; Reasonable Efforts
.
(a)
Regulatory Filings
. Each of Maxim and EpiCept shall coordinate
and cooperate with one another and shall each use all commercially reasonable
efforts to comply with, and shall each refrain from taking any action that
would impede compliance with, all
58
Legal Requirements with
respect to the Merger and the transactions contemplated hereunder, and as
promptly as practicable after the date hereof, each of Maxim and EpiCept shall
make all filings reasonably determined by the parties to be required by any
Governmental Entity in connection with the Merger and the transactions
contemplated hereby, including (i) Notification and Report Forms with the
United States Federal Trade Commission (the
FTC
)
and the Antitrust Division of the United States Department of Justice (
DOJ
) as required by the HSR Act, (ii) any other
comparable filing the failure of which to make could materially impair the
ability of the parties to close, (iii) other comparable pre-merger filings
pursuant to the merger notification or control laws of any applicable jurisdiction,
as agreed by the parties hereto and (iv) any filings required under the
Securities Act, the Exchange Act, any applicable state or securities or blue
sky laws and the securities laws of any foreign country, or any other Legal
Requirement relating to the Merger. Each
of Maxim and EpiCept will cause all documents that it is responsible for filing
with any Governmental Entity under this Section 5.6(a) to comply in all
material respects with all applicable Legal Requirements.
(b)
Exchange of Information
. Maxim and EpiCept each shall promptly supply
the other with any information that may be required in order to effectuate any
filings or application pursuant to Section 5.6(a). Except where prohibited by applicable Legal
Requirements, and subject to the Confidentiality Agreement, each of EpiCept and
Maxim shall consult with the other prior to taking a position with respect to
any such filing,
shall consider in good faith the views
of one another in connection with any analyses, appearances, presentations,
memoranda, briefs, white papers, arguments, opinions and proposals before
making or submitting any of the foregoing to any Governmental Entity by or on
behalf of any party hereto in connection with any investigations or proceedings
in connection with this Agreement or the transactions contemplated hereby
(including under any antitrust or fair trade Legal Requirement),
coordinate
with the other in preparing and exchanging such information and promptly
provide the other with copies of all filings, presentations or submissions (and
a summary of any oral presentations) made by such party with any Governmental
Entity in connection with this Agreement or the transactions contemplated
hereby,
provided
that with respect to any such filing, presentation or
submission, each of Maxim and EpiCept need not supply the other with copies (or
in case of oral presentations, a summary) to the extent that any law, treaty,
rule or regulation of any Governmental Entity applicable to such party requires
such party or its subsidiaries to restrict or prohibit access to any such
properties or information.
(c)
Notification
. Each of Maxim and EpiCept will notify the
other promptly upon the receipt of (i) any comments from any officials of
any Governmental Entity in connection with any filings made pursuant hereto and
(ii) any request by any officials of any Governmental Entity for
amendments or supplements to any filings made pursuant to, or information
provided to comply in all material respects with, any Legal Requirements. Whenever any event occurs that is required to
be set forth in an amendment or supplement to any filing made pursuant to
Section 5.6(a), Maxim or EpiCept, as the case may be, will
59
promptly
inform the other of such occurrence and cooperate in filing with the applicable
Governmental Entity such amendment or supplement.
(d)
Commercially Reasonable Efforts
. Subject to the express provisions of
Section 5.2 and Section 5.3 hereof and upon the terms and subject to
the conditions set forth herein, each of the parties agrees to use commercially
reasonable efforts to take, or cause to be taken, all actions, and to do, or
cause to be done, and to assist and cooperate with the other parties in doing,
all things necessary, proper or advisable to consummate and make effective, in
the most expeditious manner practicable, the Merger and the other transactions
contemplated by this Agreement, including using commercially reasonable efforts
to accomplish the following:
(i) the causing of the conditions precedent set forth in Article VI
to be satisfied, (ii) the obtaining of all necessary actions or
nonactions, waivers, consents, approvals, orders and authorizations from
Governmental Entities and the making of all necessary registrations, declarations
and filings (including registrations, declarations and filings with
Governmental Entities, if any) and the taking of such reasonable steps as may
be necessary to avoid any suit, claim, action, investigation or proceeding by
any Governmental Entity, (iii) the obtaining of all necessary consents,
approvals or waivers from third parties, including all Necessary Consents,
(iv) the defending of any suits, claims, actions, investigations or
proceedings, whether judicial or administrative, challenging this Agreement or
the consummation of the transactions contemplated hereby, including seeking to
have any stay or temporary restraining order entered by any court or other
Governmental Entity vacated or reversed and (v) the execution or delivery
of any additional instruments necessary to consummate the transactions
contemplated by, and to fully carry out the purposes of, this Agreement. In connection with and without limiting the
foregoing, subject to the other terms and conditions hereof, Maxim and its
Board of Directors shall, if any takeover statute or similar Legal Requirement
is or becomes applicable to the Merger, this Agreement or any of the
transactions contemplated by this Agreement, use commercially reasonable
efforts to ensure that the Merger and the other transactions contemplated by
this Agreement may be consummated as promptly as practicable on the terms
contemplated by this Agreement and otherwise to minimize the effect of such
Legal Requirement on the Merger, this Agreement and the transactions contemplated
hereby.
(e)
Limitation on Divestiture
. Notwithstanding anything in this Agreement to
the contrary, nothing contained in this Agreement shall be deemed to require Maxim
or EpiCept or any subsidiary or affiliate thereof to agree to any divestiture
by itself or any of its affiliates of shares of capital stock or of any
business, assets or property, or the imposition of any material limitation on
the ability of any of them to conduct their businesses or to own or exercise
control of such assets, properties and stock.
Neither party shall take or agree to take any action identified in the
immediately preceding sentence without the prior written consent of the other
party.
60
5.7
Notification of
Certain Matters
.
(a)
By EpiCept
. EpiCept shall give prompt notice to Maxim
when and if EpiCept becomes aware that any representation or warranty made by
it contained in this Agreement has become untrue or inaccurate, or that it has
failed to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it under this Agreement, in each case such that
the conditions set forth in Section 6.3(a) or 6.3(b) would not be
satisfied.
(b)
By Maxim
. Maxim shall give prompt notice to EpiCept
when and if Maxim becomes aware that any representation or warranty made by it
contained in this Agreement has become untrue or inaccurate, or that it has
failed to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it under this Agreement, in each case, such that
the conditions set forth in Section 6.2(a) or 6.2(b) would not be
satisfied.
5.8
Third-Party
Consents; Termination of Certain Agreements
. As soon as practicable
following the date hereof, Maxim and EpiCept will each use commercially
reasonable efforts to obtain any material consents, waivers and approvals under
any of its or its subsidiaries respective contracts required to be obtained in
connection with the consummation of the transactions contemplated hereby.
5.9
Stock Options and
Employee Benefits
.
(a)
Assumption of Stock Options
. At the Effective Time, each then outstanding Maxim
Option granted under the 1993 Plan, whether or not exercisable at the Effective
Time and regardless of the respective exercise prices thereof, will be assumed
by EpiCept. At the Effective time, each
then outstanding Maxim Option granted under the other Maxim Stock Option Plans,
which Maxim Option has an exercise price of $20.00 per share or less, whether
or not exercisable at the Effective Time, will be assumed by EpiCept. Each Maxim Option so assumed by EpiCept under
this Agreement will continue to have, and be subject to, the same terms and
conditions set forth in the applicable Maxim Stock Option Plan (and any applicable
stock option agreement for such Maxim Option) immediately prior to the
Effective Time (including any repurchase rights or vesting provisions), except
that (i) each Maxim Option will be exercisable (or will become exercisable
in accordance with its terms) for that number of whole shares of EpiCept Common
Stock equal to the product of the number of shares of Maxim Common Stock that
were issuable upon exercise of such Maxim Option immediately prior to the
Effective Time multiplied by the Exchange Ratio, rounded down to the nearest
whole number of shares of EpiCept Common Stock and (ii) the per share
exercise price for the shares of EpiCept Common Stock issuable upon exercise of
such assumed Maxim Option will be equal to the quotient determined by dividing
the exercise price per share of Maxim Common Stock at which such Maxim Option
was exercisable immediately prior to the Effective Time by the Exchange Ratio,
rounded up to the nearest whole cent.
Each assumed Maxim Option shall be vested immediately following the
Effective Time as to the same percentage of the total number of shares subject
thereto as it was vested as to immediately prior to the Effective Time. As soon as reasonably practicable following
the Closing Date,
61
EpiCept will issue to
each person who holds an assumed Maxim Option a document evidencing the
foregoing assumption of such Maxim Option by EpiCept. Maxim shall use commercially reasonable
efforts to obtain the agreement of each holder of options granted under the
1993 Plan that have an exercise price above $20.00 per share to the termination
of such options immediately prior to the Effective Time and shall take action
under the other Maxim Stock Option Plans such that each outstanding Maxim
Option granted under the other Maxim Stock Option Plans that has an exercise
price above $20.00 per share shall terminate on or prior to the Effective time.
(b)
Incentive Stock Options
. It is intended that Maxim Options assumed by EpiCept
shall (i) qualify following the Effective Time as incentive stock options as
defined in Section 422 of the Code to the extent Maxim Options qualified
as incentive stock options immediately prior to the Effective Time and (ii) not
be treated as deferred compensation under Section 409A of the Code, and the
provisions of this Section 5.9 shall be applied consistent with such
intent.
(c)
Assumption of Warrants
. At the Effective Time, each then outstanding Maxim
Warrant, whether or not exercisable at the Effective Time and regardless of the
respective exercise prices thereof, will be assumed by EpiCept. Each Maxim Warrant so assumed by EpiCept
under this Agreement will continue to have, and be subject to, the same terms
and conditions set forth in the applicable Maxim Warrant immediately prior to
the Effective Time, except that (i) each Maxim Warrant will be exercisable
(or will become exercisable in accordance with its terms) for that number of
whole shares of EpiCept Common Stock equal to the product of the number of
shares of Maxim Common Stock that were issuable upon exercise of such Maxim
Warrant immediately prior to the Effective Time multiplied by the Exchange
Ratio, rounded down to the nearest whole number of shares of EpiCept Common
Stock and (ii) the per share exercise price for the shares of EpiCept
Common Stock issuable upon exercise of such assumed Maxim Warrant will be equal
to the quotient determined by dividing the exercise price per share of Maxim
Common Stock at which such Maxim Warrant was exercisable immediately prior to
the Effective Time by the Exchange Ratio, rounded up to the nearest whole
cent. As soon as reasonably practicable
following the Closing Date, EpiCept will issue to each person who holds an
assumed Maxim Warrant a document evidencing the foregoing assumption of such Maxim
Warrant by EpiCept.
(d)
Treatment of Maxim 401(k) Plan
. If requested by EpiCept by written notice, Maxim
shall terminate any and all 401(k) plans effective no later than the day
immediately preceding the Closing Date. Maxim
shall not issue any additional shares of Maxim Common Stock as matching
contributions under the Maxim 401(k) plan.
If EpiCept provides such written notice to Maxim, Maxim shall provide EpiCept
with evidence that such 401(k) plan has been terminated (effective no later
than the day immediately preceding the Closing Date) pursuant to resolutions of
Maxims Board of Directors. The form and
substance of such resolutions shall be subject to review and approval of EpiCept. Maxim also shall take
62
such
other actions in furtherance of terminating such 401(k) plans as EpiCept may
reasonably require.
(e)
Benefits Generally
. For a period beginning on the Closing Date
and ending no earlier than the first anniversary of the Closing Date, EpiCept
or its affiliates shall provide to employees of Maxim and its affiliates who
continue employment with Maxim or any of its affiliates (Continuing Employees)
either (i) benefits that are substantially similar, in the aggregate, to
the benefits provided to the Continuing Employees immediately prior to the
Closing Date, (ii) benefits that are substantially similar, in the
aggregate, to the benefits offered to similarly situated employees of EpiCept,
or (iii) a combination of clauses (i) and (ii). To the extent permitted by applicable laws
and applicable tax qualification requirements (and subject to any generally
applicable break in service or similar rule), EpiCept shall cause Continuing
Employees to be credited with service with Maxim for purposes of eligibility
and vesting under any EpiCept 401(k) plan.
Nothing in this Section 5.9(c) shall be construed to entitle any
Continuing Employee to continue his or her employment with Maxim or any of its
affiliates. To the extent permitted by the applicable plans and subject to
approval by any applicable insurance carrier, with respect to any health plans
in which employees of Maxim or its affiliates are eligible to participate after
the Effective Time, EpiCept or its affiliates shall (i) waive all limitations
as to preexisting conditions exclusions and waiting periods with respect to
participation and coverage requirements applicable to such employees (to the
extent such exclusion was waived under applicable health plans offered to such
employees by EpiCept) and (ii) to the extent permitted by the applicable EpiCept
or Maxim insurance carrier, provide each such employee with credit for any
co-payments, deductibles and other such expenses paid during the applicable
period under any welfare plans maintained or contributed to by Maxim or its
affiliates prior to the Effective Time in satisfying any applicable deductible,
out-of-pocket or other such requirements for the corresponding period under any
welfare plans maintained or contributed to by EpiCept or its affiliates.
(f)
Form S-8
. EpiCept agrees to file a registration
statement on Form S-8 for the shares of EpiCept Common Stock issuable with
respect to assumed Maxim Options to the extent Form S-8 is available as
soon as is reasonably practicable after the Effective Time and shall maintain
the effectiveness of such registration statement thereafter for so long as any
of such options or other rights remain outstanding. Maxim shall cooperate with and assist EpiCept
in connection with the preparation and filing of a Registration Statement on
Form S-8 with respect to assumed Maxim Options.
5.10
Indemnification
.
(a)
Indemnity
. From and after the Effective Time, EpiCept
will, and will cause the Surviving Corporation to, (i) indemnify to the fullest
extent permitted by applicable law any person who is or was a director or
officer of Maxim (the
Indemnified Parties
)
with respect to all acts or omissions by them in their capacities as such at
any time prior to the Effective Time, and (ii) fulfill and honor in all
respects the obligations of Maxim pursuant to the Certificate of Incorporation
and Bylaws of Maxim and any indemnification agreements
63
disclosed
on Section 3.15 of the Maxim Disclosure Schedule and existing immediately prior
to the Effective Time between Maxim and the Indemnified Parties, subject to
applicable law. The Certificate of
Incorporation and Bylaws of the Surviving Corporation will contain provisions
with respect to exculpation and indemnification that are at least as favorable
to the Indemnified Parties as those contained in the Certificate of
Incorporation and Bylaws of Maxim as in effect on the date hereof, which
provisions will not be amended, repealed or otherwise modified for a period of
six years from the Effective Time in any manner that would adversely affect the
rights thereunder of individuals who, immediately prior to the Effective Time,
were directors, officers, employees or agents of Maxim, unless such modification
is required by law.
(b)
Insurance
. For a period of six (6) years after the
Effective Time, EpiCept shall cause the Surviving Corporation to use
commercially reasonable efforts to cause to be maintained in effect directors
and officers liability insurance maintained by Maxim covering those persons
who are covered by Maxims directors and officers liability insurance policy
as of the date hereof on terms comparable to those applicable to the current
directors and officers of Maxim;
provided, however
,
that in no event will the Surviving Corporation be required to expend, with
respect to any year, in excess of an amount equal to the greater of (i) one
hundred fifty percent (150%) of the annual premium currently paid by Maxim for
such coverage (and to the extent the amount it would be required to expend
would exceed one hundred fifty percent (150%) of the annual premium currently
paid by Maxim for such coverage, the Surviving Corporation shall use all
reasonable efforts to maintain the maximum amount of coverage as is available
for such one hundred fifty percent (150%) of such annual premium) or (ii) the
premium necessary to obtain the amount of coverage in effect under EpiCepts
directors and officers liability insurance policy or policies covering EpiCepts
directors and officers for such year;
provided
,
further
,
however
,
that in lieu of maintaining the directors and officers liability insurance as
described above, the Surviving Corporation may obtain as of the Effective Time tail
insurance policies with a claims period of at least six years from the Closing
with respect to the directors and officers liability insurance in amount and
scope at least as favorable as the coverage applicable to Maxims directors and
officers on the date hereof.
(c)
ThirdParty Beneficiaries
. This Section 5.10 is intended to be for
the benefit of, and shall be enforceable by the Indemnified Parties and their
heirs and personal representatives and shall be binding on EpiCept and the
Surviving Corporation and their respective successors and assigns. In the event EpiCept, the Surviving
Corporation or the successor or assign of either (i) consolidates with or
merges into any other Person and shall not be the continuing or surviving
corporation or entity in such consolidation or merger or (ii) transfers
all or substantially all of its properties and assets to any Person, then, and
in each case, proper provision shall be made so that the successor and assign
of EpiCept or the Surviving Corporation, as the case may be, honor the
indemnification obligations set forth in this Section 5.10.
64
5.11
Board of Directors
of EpiCept
The Board of Directors of EpiCept will take all actions
necessary such that effective as of the Effective Time, five (5) directors
selected by a majority of the EpiCept directors, including EpiCepts current
Chairman and current Chief Executive Officer, and two (2) directors of Maxim
selected by a majority of the Maxim directors shall be members of the Board of
Directors of EpiCept.
5.12
Nasdaq
and Stockholm Stock Exchange Listing
. Prior to the Effective Time, EpiCept agrees to
use best efforts to take all actions, including the completion of appropriate
applications, the payment of all fees and any such other actions necessary to
authorize for listing on Nasdaq and the Stockholm Stock Exchange, the EpiCept
Common Stock, the shares of EpiCept Common Stock issuable, and those required
to be reserved for issuance, in connection with the Merger subject to official
notice of issuance.
5.13
Maxim Affiliates;
Restrictive Legend
. Maxim has
delivered or caused to be delivered to EpiCept, on or prior to the date hereof,
from each person who may reasonably be deemed to be an affiliate of Maxim for
purposes of Rule 145 promulgated under the Securities Act (a
Maxim Affiliate
) an executed affiliate agreement in the
form attached hereto as Exhibit D (the
Maxim Affiliate Agreement
),
each of which will be in full force and effect as of the Effective Time. In the event that any other person becomes a Maxim
Affiliate following the date of this Agreement, Maxim will use commercially
reasonable efforts to deliver or cause to be delivered to EpiCept an executed Maxim
Affiliate Agreement with respect to such person as soon as possible. EpiCept will be entitled to place appropriate
legends on the certificates evidencing any EpiCept Common Stock to be received
by a Maxim Affiliate pursuant to the terms of this Agreement and to issue
appropriate stop transfer instructions to the transfer agent for the EpiCept
Common Stock, consistent with the terms of the Maxim Affiliate Agreement.
5.14
Treatment as
Reorganization
. Neither Maxim nor EpiCept
will, nor will they permit any of their respective subsidiaries to, take any action
prior to or after the Closing that would reasonably be expected to cause the
Merger to fail to qualify as a reorganization with the
meaning of Section 368(a) of the Code.
5.15
Section 16 Matters
. Prior to the Effective Time, the Board of
Directors of Maxim shall adopt a resolution consistent with the interpretative
guidance of the SEC so that (i) the assumption of Maxim Options held by Maxim
Insiders (as defined below) pursuant to this Agreement, and (ii) the
receipt by Maxim Insiders of EpiCept Common Stock in exchange for Maxim Common
Stock pursuant to the Merger, shall be exempt transactions for purposes of
Section 16 of the Exchange Act by any officer or director of Maxim who may
become a covered person for purposes of Section 16 of the Exchange Act (an
Maxim
Insider
).
5.16
Rights Plan
. Maxim shall not, except as required by this
Agreement, modify or amend the Maxim Rights Agreement.
5.17
Tax Matters
. At or prior to the filing of the Registration
Statement, Maxim and EpiCept will execute and deliver to Cooley Godward LLP,
and to Weil, Gotshal & Manges LLP
65
tax
representation letters in the form to be agreed upon by Weil, Gotshal &
Manges LLP and Cooley Godward LLP. Maxim,
Merger Sub and EpiCept shall each confirm to Cooley Godward LLP, and to Weil,
Gotshal & Manges LLP the accuracy and completeness, as of the time the
Registration Statement is declared effective and as of the Effective Time, of
the tax representation letters delivered pursuant to the immediately preceding
sentence. Following delivery of the tax
representation letters pursuant to the first sentence of this Section 5.17,
Maxim will use its commercially reasonable efforts to cause Cooley Godward LLP,
to deliver to it, and EpiCept will use its commercially reasonable efforts to
cause Weil, Gotshal & Manges LLP to deliver to it, a tax opinion satisfying
the requirements of Item 601 of Regulation S-K promulgated under the
Securities Act. In rendering such
opinions, each of such counsel shall be entitled to rely on the tax
representation letters referred to in this Section 5.17.
5.18
FIRPTA Matters
. At the Closing, (a) Maxim shall deliver to EpiCept
a statement (in such form as may be reasonably requested by counsel to EpiCept)
conforming to the requirements of Section 1.897 2(h)(1)(i)
of the United States Treasury Regulations, and (b) Maxim shall deliver to the
IRS the notification required under Section 1.897 2(h)(2) of the United
States Treasury Regulations.
5.19
Securityholder
Litigation
. Maxim shall give EpiCept
the opportunity to participate in the defense or settlement of any
securityholder litigation against Maxim and/or its directors relating to the
Merger, and no such settlement in excess of the coverage amounts provided by
insurance (if the insurance company commits to pay such settlement amount) shall
be agreed to without EpiCepts prior consent.
5.20
Capitalization
Matters
. Promptly following the
execution and delivery of this Agreement, EpiCept shall file the Conversion
Amendment with the Secretary of State of the State of Delaware. Following the EpiCept Conversions and prior
to the Effective Time, EpiCept shall effect a 1-for-4
reverse stock split of the outstanding EpiCept Common Stock by filing the
Reverse Split Amendment with the Secretary of State of the State of Delaware.
5.21
Exchange of
Indebtedness
. Prior to the Effective
Time, EpiCept shall exercise its right pursuant to Section 1(a) of the Second
Exchange Option Agreement dated February 17, 1998 by and between tbg
Technologie-Beteiligungs-Gesellschaft mbh der Deutschen Ausgleichsbank, a
German limited liability company (
tbg
), and EpiCept
(the
Exchange
Option Agreement
), and will otherwise take all actions reasonably
necessary, to cause the exchange of tbgs claim for the Principal Amount of the
Silent Partnership II (as such terms are defined in the Exchange Option
Agreement) for shares of EpiCept Common Stock in accordance with the terms of
the Exchange Option Agreement to the extent EpiCept has the right to do so
under the terms of the Exchange Option Agreement. If EpiCept does not have the right to do so
under the terms of the Exchange Option Agreement, EpiCept shall use
commercially reasonable efforts to obtain such right; provided, however, that,
notwithstanding anything herein to the contrary, the failure to obtain such
right or any breach of this covenant by EpiCept shall not cause a change to the
Exchange Ratio.
66
5.22
Bridge Financing
. Prior to the Effective Time, EpiCept shall be
permitted to borrow indebtedness and issue EpiCept Common Stock and preferred
stock to raise additional capital;
provided, however
,
that (a) all such indebtedness, including accrued interest thereon, and
preferred stock shall be converted into EpiCept Common Stock immediately prior
to the Effective Time, (b) the Exchange Ratio shall be adjusted to reflect any
such issuance of EpiCept Common Stock, whether directly or upon such a
conversion, as contemplated by the definition of Exchange Ratio as provided in
Section 1.5(a).
ARTICLE VI
CONDITIONS TO THE MERGER
6.1
Conditions to
Obligations of Each Party to Effect the Merger
. The respective obligations of each party to
this Agreement to effect the Merger shall be subject to the satisfaction at or
prior to the Closing Date of the following conditions, any of which may be
waived, in writing, by mutual agreement of EpiCept and Maxim:
(a)
Stockholder Approval
. The Maxim Stockholder Approval shall have
been obtained.
(b)
No Order
. No Governmental Entity of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
statute, rule, regulation, executive order, decree, injunction or other order
(whether temporary, preliminary or permanent) which is in effect and which has
the effect of making the Merger illegal or otherwise prohibiting consummation
of the Merger.
(c)
Registration Statement Effective; Proxy
Statement/Prospectus
. The SEC shall
have declared the Registration Statement effective. No stop order suspending the effectiveness of
the Registration Statement or any part thereof shall have been issued and no
proceeding for that purpose, and no similar proceeding in respect of the Proxy
Statement/Prospectus, shall have been initiated or threatened in writing by the
SEC.
(d)
HSR Act
. The waiting period (and any extension
thereof) under the HSR Act relating to the transactions contemplated hereby
will have expired or terminated early, if required. Satisfaction of all other material foreign antitrust
requirements reasonably determined to apply prior to the Closing in connection
with the transaction contemplated hereby shall have been obtained.
(e)
No Governmental Restriction
. There shall not be any pending or overtly
threatened suit or action asserted by any Governmental Authority
(i) challenging or seeking to restrain or prohibit the consummation of the
Merger or any of the other transactions contemplated by this Agreement or
(ii) seeking to impose on Maxim or EpiCept or any subsidiary or affiliate
thereof any divestiture of shares of capital stock or of any business, assets
or property, or the imposition of any material limitation on the ability of any
of them to conduct their businesses or to own or exercise control of such
assets, properties and stock.
67
(f)
Tax Opinions
. Maxim and EpiCept shall each have received
written opinions from their respective counsel (Cooley Godward LLP, and Weil,
Gotshal & Manges LLP, respectively), in form and substance reasonably
satisfactory to them, to the effect that the Merger will constitute a reorganization within the meaning of Section 368(a)
of the Code and such opinions shall not have been withdrawn. It is understood that (i) in rendering such
opinions, Weil, Gotshal & Manges LLP and Cooley Godward LLP, shall rely
upon the tax representation letters referred to in Section 5.17, and
(ii) if Cooley Godward LLP, does not render the opinion required by this
Section 6.1(f) to Maxim or withdraws or modifies such opinion, such
condition will nonetheless be deemed to be satisfied if Weil, Gotshal &
Manges LLP renders such opinion to Maxim, and if Weil, Gotshal & Manges LLP
does not render the opinion required by this Section 6.1(f) to EpiCept or
withdraws or modifies such opinion, such condition will nonetheless be deemed
to be satisfied if Cooley Godward LLP, renders such opinion to EpiCept.
(g)
Nasdaq
Listing
. The shares of EpiCept Common Stock to be
issued in the Merger shall have been authorized for listing on the Nasdaq, subject to official notice of issuance.
6.2
Additional
Conditions to Obligations of EpiCept
. The obligation of EpiCept to consummate and
effect the Merger shall be subject to the satisfaction at or prior to the
Closing Date of each of the following conditions, any of which may be waived,
in writing, exclusively by EpiCept:
(a)
Representations and Warranties
. The representations and warranties of Maxim
contained in this Agreement that are qualified as to materiality or Material
Adverse Effect shall be true and correct, and the representations and
warranties of Maxim contained in this Agreement that are not so qualified shall
be true and correct in all material respects, in each case as of the date of
this Agreement as though made on the date of this Agreement and as of the
Closing Date as though made on the Closing Date, except (i) in each case, or in
the aggregate, where the failure to be true and correct would not reasonably be
expected to have a Material Adverse Effect on Maxim, or (ii) to the extent such
representations and warranties expressly relate to an earlier date, in which
case such representations shall have been true and correct as of such earlier
date. EpiCept shall have received a
certificate with respect to the foregoing signed on behalf of Maxim by the
Chief Executive Officer and the Chief Financial Officer of Maxim.
(b)
Agreements and Covenants
. Maxim shall have performed or complied in all
material respects with the agreements and covenants required by this Agreement
to be performed or complied with by it on or prior to the Closing Date, and EpiCept
shall have received a certificate to such effect signed on behalf of Maxim by
the Chief Executive Officer and the Chief Financial Officer of Maxim.
(c)
Agreements and Documents
. EpiCept shall have received Affiliate
Agreements in the form of Exhibit D, executed by the Persons identified on
Section 3.24 of
68
the Maxim Disclosure
Schedule and by any other Person who could reasonably be deemed to be an affiliate
of Maxim for purposes of the Securities Act, each of which shall be in full
force and effect and shall not have been repudiated by any party thereto.
(d)
Maxim Form 10-K
.
Maxim shall have filed with the SEC its Annual
Report on Form 10-K for its fiscal year ended September 30, 2005 in compliance
with the Exchange Act and Section 404 of the Sarbanes-Oxley Act, including the
required management and auditor reports.
6.3
Additional
Conditions to the Obligations of Maxim
. The obligations of Maxim to consummate and
effect the Merger shall be subject to the satisfaction at or prior to the
Closing Date of each of the following conditions, any of which may be waived,
in writing, exclusively by Maxim:
(a)
Representations and Warranties
. The representations and warranties of EpiCept
contained in this Agreement that are qualified as to materiality or Material
Adverse Effect shall be true and correct, and the representations and
warranties of EpiCept contained in this Agreement that are not so qualified
shall be true and correct in all material respects, in each case as of the date
of this Agreement as though made on the date of this Agreement and as of the
Closing Date as though made on the Closing Date, except (i) in each case, or in
the aggregate, where the failure to be true and correct would not reasonably be
expected to have a Material Adverse Effect on EpiCept, or (ii) to the extent
such representations and warranties expressly relate to an earlier date, in
which case such representations shall have been true and correct as of such
earlier date. Maxim shall have received
a certificate signed on behalf of EpiCept by the chief executive officer and
the chief financial officer of EpiCept.
(b)
Agreements and Covenants
. EpiCept shall have performed or complied in
all material respects with the agreements and covenants required by this
Agreement to be performed or complied with by it at or prior to the Closing
Date, and Maxim shall have received a certificate to such effect signed on
behalf of EpiCept by the Chief Executive Officer and the Chief Financial
Officer of EpiCept.
(c)
Resignation of Directors
. EpiCept shall have received from members of
its Board of Directors written letters of resignation that shall have not been
revoked or rescinded such that no more than five (5) such persons shall remain members
of the Board of Directors of EpiCept at the Effective Time, and the Board of
Directors of EpiCept shall have duly adopted by a majority vote at a meeting of
such Board of Directors prior to the receipt of the aforementioned resignations
resolutions that shall not have been revoked or rescinded electing John F.
Bedard and Robert L. Zerbe as members of the Board of Directors of EpiCept to
fill the vacancies created by the aforementioned resignations, such elections
to be effective at the Effective Time.
(d)
Conversion of Preferred Stock and Certain
Notes
. The EpiCept Conversions shall
have occurred.
69
(e)
Reverse Stock Split
. The reverse stock split described in Section
5.20 shall have occurred prior to the Effective Time and EpiCept shall have
delivered evidence thereof reasonably satisfactory to Maxim.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
7.1
Termination
. This Agreement may be terminated at any time
prior to the Effective Time, by action taken or authorized by the Board of
Directors of the terminating party or parties, and except as provided below,
whether before or after the requisite approvals of the stockholders of EpiCept
or Maxim:
(a) by mutual written
consent duly authorized by the Boards of Directors of Maxim and EpiCept;
(b) by either EpiCept or Maxim if the Merger
shall not have been consummated by March 31, 2006 (the
End Date
);
provided, however
, that the right to
terminate this Agreement under this Section 7.1(b) shall not be available
to any party whose action or failure to act has been a principal cause of the
failure of the Merger to occur on or before such date and such action or
failure to act constitutes a breach of this Agreement;
(c) by either EpiCept or Maxim if a Governmental
Entity shall have issued an order, decree or ruling or taken any other
action (including the failure to have taken an action), in any case having the
effect of permanently restraining, enjoining or otherwise prohibiting the
Merger, which order, decree, ruling or other action is final and nonappealable;
(d) by either EpiCept or Maxim if the required
approval of the stockholders of Maxim contemplated by this Agreement shall not
have been obtained by reason of the failure to obtain the required vote at a
meeting of Maxim stockholders duly convened therefor or at any adjournment or
postponement thereof;
(e) by EpiCept prior to the approval and adoption
of this Agreement and approval of the Merger by the required vote of the
stockholders of Maxim if a Triggering Event (as defined below in this
Section 7.1) with respect to Maxim shall have occurred and such
termination shall have been effected within ten (10) business days after EpiCept
shall have received notice of the occurrence of such Triggering Event;
(f) by EpiCept, upon a breach of any
representation, warranty, covenant or agreement on the part of Maxim set forth
in this Agreement, or if any representation or warranty of Maxim shall have
become inaccurate, in either case such that the conditions set forth in
Section 6.2(a) or Section 6.2(b) would not be satisfied as of the
time of such breach or as of the time such representation or warranty shall
have become inaccurate,
provided
that if such inaccuracy in Maxims
representations and warranties or breach by Maxim is curable by Maxim through
the exercise of its commercially reasonable efforts, then this Agreement shall
70
not terminate pursuant to
this Section 7.1(f) as a result of such particular breach or inaccuracy
until the earlier of (i) the End Date and (ii) Maxim ceasing to
exercise commercially reasonable efforts to cure such breach (it being
understood that this Agreement shall not terminate pursuant to this
Section 7.1(f) as a result of such particular breach or inaccuracy if such
breach by Maxim is cured prior to such termination becoming effective); and
(g) by Maxim, upon a breach of any
representation, warranty, covenant or agreement on the part of EpiCept set
forth in this Agreement, or if any representation or warranty of EpiCept shall
have become inaccurate, in either case such that the conditions set forth in
Section 6.3(a) or Section 6.3(b) would not be satisfied as of the
time of such breach or as of the time such representation or warranty shall
have become inaccurate,
provided
, that if such inaccuracy in EpiCepts
representations and warranties or breach by EpiCept is curable by EpiCept
through the exercise of its commercially reasonable efforts, then this
Agreement shall not terminate pursuant to this Section 7.1(g) as a result
of such particular breach or inaccuracy until the earlier of (i) the End
Date and (ii) EpiCept ceasing to exercise commercially reasonable efforts
to cure such breach (it being understood that this Agreement shall not
terminate pursuant to this Section 7.1(g) as a result of such particular
breach or inaccuracy if such breach by EpiCept is cured prior to such
termination becoming effective).
For the purposes of this Agreement, a
Triggering
Event
, with respect to Maxim, shall be deemed to have occurred
if: (i) Maxims Board of Directors
or any committee thereof shall for any reason have withdrawn or shall have
amended or modified in a manner adverse to EpiCept, the Maxim Board
Recommendation, or shall have resolved to do any of the same, (ii) Maxims
Board of Directors fails to reaffirm (publicly, if so requested) the Maxim
Board Recommendation within ten (10) business days after EpiCept requests in
writing that such recommendation be reaffirmed after the public announcement of
an Acquisition Proposal, (iii) Maxims Board of Directors or any committee
thereof shall have approved or recommended any Acquisition Proposal, or shall
have resolved to do any of the same, or (iv) Maxim has intentionally and
materially breached the provisions of Section 5.2(b) or 5.3 hereof.
7.2
Effect of Termination
. In the event of the termination of this
Agreement as provided in Section 7.1, this Agreement shall be of no
further force or effect, except (i) as set forth in Section 5.4(a),
this Section 7.2, Section 7.3 and Article VIII, each of which
shall survive the termination of this Agreement and (ii) nothing herein
shall relieve any party from liability for fraud in connection with, or any
intentional or willful breach of, this Agreement. No termination of this Agreement shall affect
the obligations of the parties contained in the Confidentiality Agreement, all of
which obligations shall survive termination of this Agreement in accordance
with their terms.
7.3
Fees and Expenses
.
(a)
General
. Except as set forth in this Section 7.3,
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;
71
provided, however
,
that Maxim and EpiCept shall share equally (i) all fees and expenses,
other than attorneys and accountants fees and expenses, incurred in relation
to the printing and filing (with the SEC) of the Proxy Statement/Prospectus
(including any preliminary materials related thereto) and the Registration
Statement (including financial statements and exhibits) and any amendments or
supplements thereto and (ii) the filing fee for the Notification and
Report Forms filed with the FTC and DOJ under the HSR Act, if any, or any other
filing fee required by a Governmental Entity pursuant to Section 5.6(a).
(b)
Payments by Maxim
.
(i) In the event that this Agreement is
terminated by Maxim or EpiCept pursuant to Section 7.1(d), then in either case Maxim
shall pay to EpiCept an amount equal to the lesser of (1) all Expenses of EpiCept
and Merger Sub; and (2) $650,000. Any payment
required to be made pursuant to this Section 7.3(b)(i)
shall be made to EpiCept not later than two (2) business days after delivery by
EpiCept to Maxim of a demand for payment and an itemization setting forth in
reasonable detail all Expenses of EpiCept and Merger Sub. All such payments shall be made by wire
transfer of immediately available funds to an account to be designated by EpiCept. No additional amounts shall be required to be
paid by Maxim under this Section 7.3(b)(i) once the
amount required to be paid by Maxim under Sections 7.3(b)(ii) or (iii) has been
paid.
(ii) In the event that (A) this Agreement
is terminated by Maxim or EpiCept pursuant to Sections 7.1(b) or (d), (B)
following the date hereof and prior to the termination of this Agreement, an
Acquisition Proposal with respect to Maxim shall have been made or communicated
to Maxim or shall have been made directly to the stockholders of Maxim
generally or any Person shall have publicly announced an intention to make an
Acquisition Proposal (in each case whether or not such Acquisition Proposal has
been withdrawn prior to the event giving rise to the right of termination under
Section 7.1), (C) within twelve (12) months following the termination of this
Agreement Maxim enters into a definitive agreement with respect to, or
consummates an Acquisition (as defined in Section 7.3(b)(vi)) with the Person
making the Acquisition Proposal or its Affiliate or with any other Person (so
long as the Acquisition with that other Person is on terms that are at least as
favorable, from a financial point of view, to Maxims stockholders (in their
capacities as stockholders) as the terms of the Acquisition Proposal described
in clause (B) above), and (D) such Acquisition is consummated, then upon the
consummation of the Acquisition of Maxim described in clause (C), Maxim shall
pay EpiCept a fee equal to $1,400,000, less any amounts paid under Section
7.3(b)(i), in immediately available funds on the day of such consummation.
(iii) In the event that (A) this Agreement
is terminated by Maxim or EpiCept pursuant to Sections 7.1(b) or (d), (B)
following the date hereof and prior to the termination of this Agreement, an
Acquisition Proposal with respect to Maxim shall have been made or communicated
to Maxim or shall have been made directly to the stockholders of Maxim
generally or any Person shall have publicly announced an
72
intention to make an
Acquisition Proposal (in each case whether or not such Acquisition Proposal has
been withdrawn prior to the event giving rise to the right of termination under
Section 7.1), (C) within twelve (12) months following the termination of
this Agreement Maxim enters into a definitive agreement with respect to, or
consummates, an Acquisition other than an Acquisition described in Section
7.3(b)(ii), and (D) such Acquisition is consummated, then upon the consummation
of such Acquisition of Maxim, Maxim shall pay EpiCept a fee equal to
$1,000,000, less any amounts paid under Section 7.3(b)(i), in immediately
available funds on the day of such consummation.
(iv) In the event that this Agreement is
terminated by EpiCept pursuant to Section 7.1(e), then Maxim shall pay EpiCept
a fee equal to $1,000,000 within two (2) business days of such termination;
provided, however,
that if within twelve (12) months
following the termination of this Agreement pursuant to Section 7.1(e) Maxim
enters into a definitive agreement with respect to, or consummates, an
Acquisition with any person (so long as the Acquisition with that other Person
is on terms that are at least as favorable, from a financial point of view, to Maxims
stockholders (in their capacities as stockholders) as the terms of this
Agreement), and such Acquisition is consummated, then upon such consummation of
the Acquisition of Maxim, Maxim shall pay EpiCept an additional fee equal to
$400,000, payable in immediately available funds on the day of such
consummation.
(v) Maxim acknowledges that the
agreements contained in this Section 7.3(b) are an integral part of the
transactions contemplated by this Agreement, and that, without these
agreements, EpiCept would not enter into this Agreement; accordingly, if Maxim
fails to pay in a timely manner the amounts due pursuant to this
Section 7.3(b), and, in order to obtain such payment, EpiCept makes a
claim that results in a judgment against Maxim for the amounts set forth in
this Section 7.3(b), Maxim shall pay to EpiCept its reasonable costs and
expenses (including reasonable attorneys fees and expenses) in connection with
such suit, together with interest on the amounts set forth in this Section
7.3(b) at the prime rate of Citibank, N.A. in effect on the date such payment
was required to be made. Payment of the
amounts described in this Section 7.3(b) shall not be in lieu of damages
incurred in the event of breach of this Agreement.
(vi) For the purposes of this
Section 7.3(b) only,
Acquisition
,
with respect to a party hereto, shall mean, other than the transactions
contemplated by this Agreement, a transaction pursuant to an Acquisition
Proposal (as defined in Section 5.3(g)(i), except that fifty percent (50%)
shall be substituted for fifteen percent (15%) where it appears in such
definition, and
Expenses
shall mean the
reasonable out of pocket fees and expenses (including all reasonable fees and
expenses of counsel, accountants, financial advisors and investment bankers to EpiCept)
reasonably incurred by EpiCept or on its behalf in connection with the
authorization, preparation, negotiation, execution and performance of this
Agreement, the preparation, printing, filing and mailing of the Proxy
Statement/Prospectus and the Registration Statement, the filing or
73
any
required notices under applicable antitrust law or other regulations and all
other matters related to this Agreement, the Merger and the other transactions
contemplated hereby.
7.4
Amendment
. Subject to applicable law, 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 Maxim
and EpiCept, provided, after any such approval, no amendment shall be made
which by law or in accordance with the rules of Nasdaq requires further
approval by such stockholders without such further stockholder approval. This Agreement may be not amended except by
execution of an instrument in writing signed on behalf of each of Maxim and EpiCept.
7.5
Extension; Waiver
. At any time prior to the Effective Time either
party hereto, by action taken or authorized by their respective Board of
Directors, may, to the extent legally allowed, (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
made to such party contained herein or in any document delivered pursuant
hereto and (iii) waive compliance with any of the agreements or conditions
for the benefit of such party 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 an instrument in writing signed on
behalf of such party. Delay in
exercising any right under this Agreement shall not constitute a waiver of such
right.
ARTICLE VIII
GENERAL PROVISIONS
8.1
Non-Survival of
Representations and Warranties
. The
representations and warranties of EpiCept and Maxim contained in this Agreement,
or any certificate or instrument delivered pursuant to this Agreement,
shall terminate at the Effective Time, and only the covenants that by their
terms survive the Effective Time and this Article VIII shall survive the
Effective Time.
8.2
Notices
. All notices and other communications hereunder
shall be in writing and shall be deemed duly given (i) on the date of
delivery if delivered personally, (ii) on the date of confirmation of
receipt (or, the first business day following such receipt if the date is not a
business day) of transmission by telecopy or telefacsimile or (iii) on the
date of confirmation of receipt (or, the first business day following such
receipt if the date is not a business day) if delivered by a nationally
recognized courier service. All notices
hereunder shall be delivered as set forth below, or
pursuant to such other instructions as may be designated in writing by the
party to receive such notice:
(a) if to Maxim, to:
Maxim Pharmaceuticals,
Inc.
8899 University
Center Lane, Suite 400
74
San Diego, CA
92122
|
|
|
Attention: Chief
Executive Officer
|
|
|
Fax No.: (858)
453-5005
|
|
|
|
|
|
with a copy to:
|
|
|
|
|
|
Cooley Godward
LLP
|
|
|
4401 Eastgate
Mall
|
|
|
San Diego, CA
92121
|
|
|
Attention: Lance
W. Bridges
|
|
|
Fax No.: (858)
550-6420
|
|
|
|
|
|
(b) if to EpiCept or Merger Sub, to:
|
|
|
|
|
|
EpiCept Corporation
|
|
|
270 Sylvan Avenue
|
|
|
Englewood Cliffs, NJ
07632
|
|
|
Attention:
Chief Executive Officer
|
|
|
Fax No.: (201)
837-0200
|
|
|
|
|
|
with
a copy to:
|
|
|
|
|
|
Weil,
Gotshal & Manges LLP
|
|
|
767
Fifth Avenue
|
|
|
New
York, NY 10153
|
|
|
Attention:
|
Alexander D.
Lynch
|
|
|
|
Ted S. Waksman
|
|
|
Fax No.: (212)
310-8007
|
|
|
8.3 Interpretation;
Knowledge.
(a) When a reference is made in this Agreement to
Exhibits, such reference shall be to an Exhibit to this Agreement unless
otherwise indicated. When a reference is
made in this Agreement to Sections, such reference shall be to a
section of this Agreement unless otherwise indicated. For purposes of this Agreement, the words
include
,
includes
and
including
, when used herein, shall be deemed in each case
to be followed by the words without limitation. The table of contents and headings contained
in this Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement. When reference is made herein to
the business of
an entity, such reference shall be deemed
to include the business of such entity and its subsidiaries, taken as a whole.
(b) For purposes of this Agreement, the term
Knowledge
means, with respect to a party hereto, with
respect to any matter in question, the actual knowledge of the executive
officers of such party.
75
(c) For purposes of this Agreement, the term
Material Adverse Effect
, when used in connection with an
entity, means any fact, change, event, development, circumstance or effect (any
such item, an
Effect
), individually or when
taken together with all other Effects that have occurred prior to the date of
determination of the occurrence of the Material Adverse Effect, that is or
could reasonably be expected to be materially adverse to the business, assets
(including intangible assets), capitalization, condition (financial or otherwise)
or results of operations of such entity taken as a whole with its subsidiaries;
provided, however
, that in no event
shall any of the following, alone or in combination, be deemed to constitute,
and none of the following will be taken into account in determining whether
there has been or will be, a Material Adverse Effect on any entity: any Effect resulting from (A) general
economic conditions or conditions generally affecting the biotechnology
industry, except in either case to the extent such party is materially
disproportionately affected thereby, (B) the announcement or pendency of
the Merger, (C) any adverse Effect resulting from or relating to any change in
accounting requirements or principles or any change in applicable laws, rules
or regulations or the interpretation thereof, (D) with respect to Maxim, any
adverse Effect resulting from or relating to regulatory filings for the
approval of Ceplene in Europe or Maxims licensing or partnering of Ceplene or
compounds identified through its apoptosis research program (including any
failure to license or partner such products or the termination or modification
of any such existing license or partnering arrangement), or (E) with
respect to Maxim, a change in the stock price or trading volume of Maxim,
provided
that clause (E) shall not exclude any underlying Effect which may have
caused such change in stock price or trading volume.
(d) For purposes of this Agreement, the term
Person
shall mean any individual, corporation (including
any non-profit corporation), general partnership, limited partnership, limited
liability partnership, joint venture, estate, trust, company (including any
limited liability company or joint stock company), firm or other enterprise,
association, organization, entity or Governmental Entity.
8.4
Counterparts
. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each
of the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
8.5
Entire Agreement;
Third-Party Beneficiaries
. This
Agreement and the documents and instruments and other agreements among the
parties hereto as contemplated by or referred to herein, including the EpiCept
Disclosure Schedule and the Maxim Disclosure Schedule, (i) constitute the
entire agreement among the parties with respect to the subject matter hereof
and supersede all prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof, it being
understood that the Confidentiality Agreement shall continue in full force and
effect until the Closing and shall survive any termination of this Agreement
and (ii) are not intended to confer upon any other Person any rights or
remedies hereunder, except as specifically provided in Section 5.10
following the Effective Time.
76
8.6
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 greatest extent possible, the economic,
business and other purposes of such void or unenforceable provision.
8.7
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 seek an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any state having jurisdiction, this
being in addition to any other remedy to which they are entitled at law or in
equity.
8.8
Governing Law
. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts
of law thereof.
8.9
Rules of Construction
. The parties hereto agree that they have been
represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding or rule
of construction providing that ambiguities in an agreement or other document
will be construed against the party drafting such agreement or document.
8.10
Assignment
. No party may assign either this Agreement or
any of its rights, interests, or obligations hereunder without the prior
written approval of the other parties.
Any purported assignment in violation of this Section 8.10 shall be
void. Subject to the preceding sentence,
this Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and permitted assigns.
8.11
Waiver of Jury Trial
. EACH PARTY 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 ANY PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND
ENFORCEMENT HEREOF.
8.12
Definitions
. The following terms are defined in the
sections of this Agreement set forth after such term below:
77
1993 Plan shall
have the meaning set forth in Section 1.5(d).
Acquisition
shall have the meaning set forth in Section 7.3(b)(v).
Acquisition
Proposal shall have the meaning set forth in Section 5.3(g)(i).
Action shall
have the meaning set forth in Section 2.10.
Affiliate shall
have the meaning set forth in Section 2.12(a).
Amended and
Restated Certificate of Incorporation shall have the meaning set forth in the
Paragraph C of Page 1
Agreement shall
have the meaning set forth in the first paragraph of Page 1
Certificate of
Merger shall have the meaning set forth in Section 1.2.
Certificates
shall have the meaning set forth in Section 1.6(c).
Change of
Recommendation shall have the meaning set forth in Section 5.3(d).
Closing shall
have the meaning set forth in Section 1.2.
Closing Date
shall have the meaning set forth in Section 1.2.
Code shall have
the meaning set forth in the Paragraph G of Page 2
Confidentiality
Agreement shall have the meaning set forth in Section 5.4(a).
Conversion
Amendment shall have the meaning set forth in Section 2.4(a).
DGCL shall have
the meaning set forth in the Paragraph A of Page 1
DOJ shall have
the meaning set forth in Section 5.6(a).
DOL shall have
the meaning set forth in Section 2.12(b).
End Date shall
have the meaning set forth in Section 7.1(b).
Effect shall
have the meaning set forth in Section 8.3(c).
Effective Time
shall have the meaning set forth in Section 1.2.
Environmental
Permits shall have the meaning set forth in Section 2.14(c).
ERISA shall have
the meaning set forth in Section 2.12(a).
78
EpiCept shall
have the meaning set forth in the first paragraph of Page 1
EpiCept Balance
Sheet shall have the meaning set forth in Section 2.5.
EpiCept Common
Stock shall have the meaning set forth in Section 1.5(a).
EpiCept Contracts
shall have the meaning set forth in Section 2.15.
EpiCept Conversions
shall have the meaning set forth in the Paragraph E of Page 2
EpiCept
Convertible Notes shall have the meaning set forth in Section 2.2.
EpiCept
Disclosure Schedule shall have the meaning set forth in the first paragraph of
Article II
EpiCept
Financials shall have the meaning set forth in Section 2.5.
EpiCept
Intellectual Property shall have the meaning set forth in Section 2.8.
EpiCept Options
shall have the meaning set forth in Section 2.2.
EpiCept Permits
shall have the meaning set forth in Section 2.9(b).
EpiCept Plans
shall have the meaning set forth in Section 2.12(a).
EpiCept
Registered Intellectual Property shall have the meaning set forth in Section
2.8.
EpiCept Stock
Option Plan shall have the meaning set forth in Section 2.2.
EpiCept Warrants
shall have the meaning set forth in Section 2.2.
Exchange Act
shall have the meaning set forth in Section 2.4(b).
Exchange Agent
shall have the meaning set forth in Section 1.6(a).
Exchange Fund
shall have the meaning set forth in Section 1.6(b).
Exchange Ratio
shall have the meaning set forth in Section 1.5(a).
Expenses shall
have the meaning set forth in Section 7.3(b)(v).
FTC shall have
the meaning set forth in Section 5.6(a).
GAAP shall have
the meaning set forth in Section 2.5.
79
Governmental
Entity shall have the meaning set forth in Section 2.4(b).
Hazardous
Material shall have the meaning set forth in Section 2.14(a).
Hazardous
Material Activities shall have the meaning set forth in Section 2.14(b).
HSR Act shall
have the meaning set forth in Section 2.4(b).
include shall have the meaning set forth in Section 8.3(a).
includes shall have the meaning set forth in Section
8.3(a).
including shall have the meaning set forth in Section
8.3(a).
Indemnified
Parties shall have the meaning set forth in Section 5.10(a).
Intellectual
Property shall have the meaning set forth in Section 2.8.
IRS shall have
the meaning set forth in Section 2.12(b).
Knowledge shall
have the meaning set forth in Section 8.3(b).
Legal Requirement
shall have the meaning set forth in Section 2.4(a).
Maxim shall have
the meaning set forth in the first paragraph of Page 1
Maxim Affiliate
shall have the meaning set forth in Section 5.13.
Maxim Affiliate
Agreement shall have the meaning set forth in Section 5.13.
Maxim Balance
Sheet shall have the meaning set forth in Section 3.5(b).
Maxim Board
Recommendation shall have the meaning set forth in Section 3.18.
Maxim Common
Stock shall have the meaning set forth in Section 1.5(a).
Maxim Contracts
shall have the meaning set forth in Section 3.15.
Maxim Disclosure
Schedule shall have the meaning set forth in the first paragraph of Article III
Maxim Financials
shall have the meaning set forth in Section 3.5(b).
Maxim Insider
shall have the meaning set forth in Section 5.15.
80
Maxim
Intellectual Property shall have the meaning set forth in Section 3.8.
Maxim Options
shall have the meaning set forth in Section 1.5(d).
Maxim Permits
shall have the meaning set forth in Section 3.9(b).
Maxim Plans
shall have the meaning set forth in Section 3.12(a).
Maxim Registered
Intellectual Property shall have the meaning set forth in Section 3.8.
Maxim Rights
shall have the meaning set forth in Section 3.2(a).
Maxim Rights
Agreement shall have the meaning set forth in Section 3.22.
Maxim Rights
Certificates shall have the meaning set forth in Section 3.2(a).
Maxim SEC Reports
shall have the meaning set forth in Section 3.5(a).
Maxim Stock
Option Plans shall have the meaning set forth in Section 1.5(d).
Maxim Stockholder
Approval shall have the meaning set forth in Section 3.4(a).
Maxim
Stockholders Meeting shall have the meaning set forth in Section 2.17.
Maxim Voting
Agreements shall have the meaning set forth in the Paragraph F of Page 2
Maxim Warrants
shall have the meaning set forth in Section 3.2(a).
Material Adverse
Effect shall have the meaning set forth in Section 8.3(c).
Merger shall
have the meaning set forth in the Paragraph A of Page
1
Merger Sub shall
have the meaning set forth in the first paragraph of Page 1
Nasdaq shall
have the meaning set forth in Section 1.5(f).
Necessary
Consents shall have the meaning set forth in Section 2.4(b).
Person shall
have the meaning set forth in Section 8.3(d).
Principal EpiCept
Stockholders shall have the meaning set forth in the Paragraph D of Page 1
81
Principal
Stockholder Consent shall have the meaning set forth in the Paragraph D of
Page 1
Proxy
Statement/Prospectus shall have the meaning set forth in Section 2.17.
PTO shall have
the meaning set forth in Section 2.8(a).
Registered
Intellectual Property shall have the meaning set forth in Section 2.8.
Registration
Statement shall have the meaning set forth in Section 2.4(b).
Returns shall
have the meaning set forth in Section 2.7(b)(i).
Reverse Split
Amendment shall have the meaning set forth in Section 2.4(a).
Sanders Notes
shall have the meaning set forth in Section 2.2(a).
Sanders Warrants
shall have the meaning set forth in Section 2.2(a).
Sarbanes-Oxley
Act shall have the meaning set forth in Section 3.5(a).
SEC shall have
the meaning set forth in Section 2.4(b).
Securities Act
shall have the meaning set forth in Section 2.4(b).
Share Issuance
shall have the meaning set forth in the Paragraph C of Page 1
Software shall
have the meaning set forth in Section 2.8.
Subsidiary Notes
shall have the meaning set forth in Section 2.2.
Superior Offer
shall have the meaning set forth in Section 5.3(g)(ii).
Surviving
Corporation shall have the meaning set forth in Section 1.1.
Tax shall have
the meaning set forth in Section 2.7(a).
Taxes shall have
the meaning set forth in Section 2.7(a).
Taxing Authority
shall have the meaning set forth in Section 2.7(a).
Technology shall
have the meaning set forth in Section 2.8.
the business of shall have the meaning set forth in Section
8.3(a).
Treasury
Regulations shall have the meaning set forth in Section 1.9.
82
Triggering Event
shall have the meaning set forth in Section 7.1(g).
83
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized respective officers as of the date first
written above.
|
EPICEPT CORPORATION
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ John V. Talley, Jr.
|
|
|
|
|
Name:
|
John V. Talley, Jr.
|
|
|
|
|
Title:
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
MAGAZINE ACQUISITION
CORP.
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ John V. Talley, Jr.
|
|
|
|
|
Name:
|
John V. Talley, Jr.
|
|
|
|
|
Title:
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
MAXIM PHARMACEUTICALS,
INC.
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Larry G. Stambaugh
|
|
|
|
|
Name:
|
Larry G. Stambaugh
|
|
|
|
|
Title:
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
84
Exhibit 4.1
MAXIM PHARMACEUTICALS, INC.
AMENDMENT TO RIGHTS AGREEMENT
THIS AMENDMENT TO RIGHTS
AGREEMENT
(this
Amendment
) is made as of September
5, 2005 by and between
MAXIM PHARMACEUTICALS,
INC.,
a Delaware corporation (the
Company
),
and
AMERICAN STOCK TRANSFER & TRUST COMPANY
(the
Rights
Agent
).
WHEREAS
, the Company and the Rights Agent entered into
that certain Rights Agreement dated as of June 15, 2000 (the
Rights Agreement
) (capitalized
terms used but not defined herein shall have the meaning assigned to them in
the Rights Agreement);
WHEREAS,
the
Company has been presented with a proposal whereby pursuant to an Agreement and
Plan of Merger (the
Merger Agreement
), Magazine
Acquisition Corp. (
Merger
Sub
), a Delaware corporation and wholly-owned subsidiary of EpiCept
Corporation (
EpiCept
), a Delaware
corporation, would be merged with and into the Company and the Company would be
the surviving corporation and a wholly-owned subsidiary of EpiCept (the
Merger
);
WHEREAS,
the
Board of Directors of the Company has determined that it is in the best
interests of the Companys stockholders that the Rights Agreement be amended as
set forth in this Amendment to ensure (among other things) that none of the (a)
approval, execution, delivery or performance of the Merger Agreement, (b) the
public disclosure of the Merger, the Merger Agreement and the transactions
contemplated thereby or (c) the consummation of the Merger or any of the
transactions contemplated by the Merger Agreement will cause EpiCept, Merger
Sub or any of their Affiliates or Associates to become an Acquiring Person or
result in a Stock Acquisition Date or otherwise trigger the Rights; and
WHEREAS,
the
Company desires to amend the Rights Agreement in accordance with Section 27 of
the Rights Agreement.
NOW, THEREFORE,
in consideration of the foregoing premises and
the mutual covenants and conditions set forth below, and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
parties to this Amendment hereby agree as follows:
AMENDMENT
1.
Amendment
of the Rights Agreement.
1.1
Section 1(a) of the
Rights Agreement, which sets forth the definition of Acquiring Person, is
hereby amended by adding the following new sentence at the end of Section 1(a):
Notwithstanding anything in this Agreement that might otherwise be
deemed to the contrary, neither EpiCept Corporation (
EpiCept
),
a Delaware corporation, nor Magazine Acquisition Corp. (
Merger Sub
), a
Delaware corporation and wholly-owned subsidiary of EpiCept, nor any of their
respective Affiliates or Associates, shall be deemed to be an Acquiring Person
in connection with, or as a result of: (i) the approval, execution, delivery or
performance
1
of the Agreement and Plan of Merger dated as of
September 6, 2005 among EpiCept, Merger Sub and the Company (as it may be
amended from time to time, the
Merger Agreement
),
or the approval, execution, delivery or performance of any amendment to the
Merger Agreement, (ii) the approval, execution, delivery or performance of
those certain Voting Agreements and Affiliate Agreements contemplated by the
Merger Agreement (the
Ancillary Agreements
)
or the approval, execution, delivery or performance of any amendment to any of
the Ancillary Agreements, (iii) the approval, execution, delivery or
performance of any other documents or instruments contemplated by the Merger
Agreement or performance of the transactions contemplated thereby ((i) - (iii),
collectively, the
EpiCept Acquisition Documents
),
(iv) the public announcement by the Company of the Merger (as defined in the
Merger Agreement) or (v) the consummation of the Merger.
1.2
Section 1(cc) of the
Rights Agreement, which sets forth the definition of Stock Acquisition Date
is hereby amended by adding the following new sentence at the end of Section
1(cc):
Notwithstanding anything in this Agreement that might otherwise be
deemed to the contrary, no Stock Acquisition Date shall be deemed to have
occurred in connection with, as a result of or otherwise by reason of (i) the
approval, execution, delivery or performance of the EpiCept Acquisition
Documents, (ii) the public announcement of the Merger or (iii) the consummation
of the Merger.
1.3
Section 1(gg) of the
Rights Agreement, which sets forth the definition of Triggering Event is
hereby amended by adding the following new sentence at the end of Section
1(gg):
Notwithstanding anything in this Agreement that might otherwise be
deemed to the contrary, no Triggering Event shall be deemed to have occurred in
connection with, as a result of or otherwise by reason of (i) the approval,
execution, delivery or performance of the EpiCept Acquisition Documents, (ii)
the public announcement of the Merger or (iii) the consummation of the Merger.
1.4
Section 3(a) of the
Rights Agreement is hereby amended by adding the following new paragraph at the
end of Section 3(a):
Notwithstanding anything in this Agreement that might otherwise be
deemed to the contrary, no Distribution Date shall be deemed to have occurred
in connection with, as a result of or otherwise by reason of (i) the approval,
execution, delivery or performance of the EpiCept Acquisition Documents, (ii)
the public announcement of the Merger or (iii) the consummation of the Merger.
1.5
Section 7(a) of the
Rights Agreement is hereby amended by deleting the word or that appears
immediately prior to the symbol (ii) , deleting the parenthetical (the
earlier of (i) and (ii) being herein referred to as the
Expiration
Date
) and deleting the period at the end of Section 7(a) and
by adding the following to the end of the amended Section 7(a):
or (iii) the time
immediately prior to the Effective Time (as defined in the Merger Agreement)
(the earlier of (i), (ii) and (iii) being herein referred to as the
Expiration Date
).
2
1.6
Section 13(a) of the
Rights Agreement is hereby amended by adding the following new paragraph at the
end of Section 13(a):
Notwithstanding anything
in this Agreement that might otherwise be deemed to the contrary, none of (i)
the approval, execution, delivery or performance of the EpiCept Acquisition
Documents, (ii) the public announcement of the Merger or (iii) the consummation
of the Merger, shall constitute a transaction described in this Section 13(a)
and none of such matters shall entitle or permit the holders of the Rights to
exercise the Rights, or otherwise give the holders of the Rights the right to
acquire securities of EpiCept. In
addition, none of EpiCept, Merger Sub or their Affiliates and Associates is,
nor shall any of them be deemed to be, a Principal Party by virtue of (i) the
approval, execution, delivery or performance of the EpiCept Acquisition
Documents, (ii) the public announcement of the Merger or (iii) the consummation
of the Merger.
1.7
A new Section 35 is
hereby added to the Rights Agreement reading in its entirety as follows:
This Agreement and the Rights established hereby will terminate in all
respects immediately prior to the Effective Time.
2.
No Other Amendment
. Except as modified by this Amendment, the
Rights Agreement shall remain in full force and effect without any
modification. By executing this
Amendment below, the Company certifies that this Amendment has been executed
and delivered in compliance with the terms of Section 27 of the Rights
Agreement.
This Amendment shall become effective following execution and delivery
by the Company and the Rights Agent immediately prior to the execution and
delivery of the Merger Agreement. Upon
any termination of the Merger Agreement pursuant to the terms of Section 7.1
thereof, or if the Merger Agreement is not executed or delivered, this
Amendment shall be cancelled and shall be of no further force or effect.
3. Governing Law
. This
Agreement shall be deemed to be a contract made under the laws of the State of
Delaware and for all purposes shall be governed by and construed in accordance
with the laws of such state applicable to contracts made and to be performed
entirely within such state.
4. Benefits of this Amendment
. Nothing
in this Amendment shall be construed to give to any Person other than the
Company, the Rights Agent and the registered holders of the Right Certificates
(and, prior to the Distribution Date, the Common Stock) any legal or equitable
right, remedy or claim under this Amendment; but this Amendment shall be for
the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the Distribution
Date, the Common Stock).
5. Effect of Amendment.
In the event of a conflict between this
Amendment and the Rights Agreement and the exhibits thereto, this Amendment
shall govern.
6. Severability.
If any term, provision, covenant or
restriction of this Amendment is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the
3
remainder of the terms, provisions, covenants and
restrictions of this Amendment shall remain in full force and effect.
7. Counterparts.
This Amendment may be executed in several
counterparts, each of which shall constitute an original and all of which, when
taken together, shall constitute one agreement.
[THIS SPACE INTENTIONALLY LEFT BLANK]
4
The parties hereto have caused this Amendment to
be executed and delivered as of the day and year first written above.
|
MAXIM PHARMACEUTICALS, INC.
|
|
|
|
|
|
/s/
Larry Stambaugh
|
|
|
Name: Larry Stambaugh
|
|
Title: Chairman of the
Board and Chief Executive Officer
|
|
|
|
|
|
AMERICAN STOCK TRANSFER &
TRUST COMPANY
|
|
|
|
|
|
By:
|
/s/
Carlos Pinto
|
|
|
|
|
Name:
|
Carlos Pinto
|
|
|
|
|
Title:
|
Vice President
|
|
|
|
|
|
|
|
[SIGNATURE PAGE TO AMENDMENT
TO RIGHTS AGREEMENT]
Exhibit 99.1
September 6, 2005
|
|
|
CONTACTS:
EpiCept Corporation
|
Maxim Pharmaceuticals
|
John V.
Talley
|
Larry G.
Stambaugh
|
Chief Executive
Officer
|
Chairman &
Chief Executive Officer
|
(201) 894-8980
|
|
|
|
FischerHealth
Life Sciences
|
John D. Prunty
|
Aline Schimmel
|
Chief Financial
Officer
|
(212)
601-8278
|
(858)
453-4040
|
Hallvarsson
& Halvarsson
Ulf Martensson
011 46 085 871 1243
EPICEPT CORPORATION AND MAXIM PHARMACEUTICALS
AGREE TO MERGE
ENGLEWOOD CLIFFS, NJ and SAN
DIEGO, CA, September 6, 2005 EpiCept Corporation (EpiCept), a privately held
corporation, and Maxim Pharmaceuticals, Inc. (Maxim) (Nasdaq: MAXM, SSE:
MAXM) announced today that they have entered into a definitive merger
agreement. The transaction is
anticipated to close during the fourth quarter of this year and is subject to
satisfaction of certain customary closing conditions, including the approval of
the shareholders of Maxim.
The new company, to be called
EpiCept Corporation, combines a late stage product portfolio of commercially
promising pain therapies, a planned cancer product registration filing in
Europe and an early stage discovery program for apoptosis inducers and
inhibitors designed to address unmet medical needs in the areas of oncology and
degenerative diseases.
Jack Talley, CEO of EpiCept,
stated This transaction will combine two companies to create a specialty
pharmaceutical company with a balanced portfolio of pain management and
oncology product candidates. This broad
pipeline will allow the company to be less reliant on the success of any one
product candidate. Additionally, several
of the product candidates are partnered with respected industry leaders,
further limiting the development risk, while other product opportunities are
still available for internal development and
1
commercialization. EpiCepts lead product candidates topically
deliver FDA-approved compounds to relieve pain.
We believe that topically delivered products have the potential to
eliminate risks inherent in systemic circulation, reduce side effects, minimize
drug interactions and raise barriers to entry for generics; and we believe the
use of already approved compounds has the potential to lower development costs
and risks and potentially accelerate time-to-market. Further, the broader pipeline will include a
novel anti-cancer candidate, Ceplene, intended to be filed in Europe for
remission-maintenance therapy for patients with acute myeloid leukemia (AML). Ceplene has a well-known safety profile with
over 2,000 patients having participated in clinical trials.
Larry Stambaugh, CEO of Maxim,
stated We are enthusiastic about the merger with EpiCept because we believe
the strength and resources of the combined entity offers our shareholders a
broader, more balanced portfolio of product candidates with significant market
potential. We publicly announced earlier
this year our intention to complete a strategic transaction to increase
shareholder value and build upon the potential of Maxims technologies. We believe this transaction accomplishes that
goal.
Merger Details
The terms of the merger
agreement provide for EpiCept to issue shares of its common stock to Maxim
Pharmaceuticals shareholders in exchange for all of the outstanding shares of
Maxim, with EpiCept shareholders retaining approximately 72 percent ownership
of the combined company and Maxim shareholders receiving approximately 28
percent, calculated on a fully diluted basis.
Based on the recent trading price of Maxims common stock, the
transaction would represent an implied equity value of approximately $136
million for the combined company.
The combined company will
retain EpiCepts CEO and corporate name (EpiCept Corporation) with headquarters
in Englewood Cliffs, NJ. In addition,
Dr. Ben Tseng, Maxims Vice President, Research, will become EpiCepts Chief
Scientific Officer. The combined companys
board of directors will consist of five current EpiCept directors and two
current Maxim directors. EpiCept is
expected to continue to operate Maxims research facility in San Diego,
California.
EpiCept currently has
operations in New Jersey and Munich, Germany.
Upon the closing of the transaction, EpiCepts common stock is expected
to trade on the Nasdaq National Market on which the company has reserved the
symbol EPCT, and on the Stockholm Stock Exchange. Maxims current ticker symbol MAXM will
become inactive on both Nasdaq and the Stockholm exchange after closing.
Wachovia Securities served as
financial advisor and Weil, Gotshal & Manges LLP as legal advisor to
EpiCept Corporation. Piper Jaffray &
Co. served as financial advisor and Cooley Godward LLP as legal advisor to
Maxim Pharmaceuticals.
Additional Information
In connection with the proposed
transaction, Maxim and EpiCept will file a registration statement that contains
a proxy statement/prospectus with the Securities and Exchange
2
Commission. SHAREHOLDERS OF MAXIM AND OTHER INVESTORS ARE
URGED TO READ THE PROXY STATEMENT/PROSPECTUS (INCLUDING ANY AMENDMENTS OR
SUPPLEMENTS TO THE PROXY STATEMENT/PROSPECTUS) REGARDING THE PROPOSED
TRANSACTION WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT
INFORMATION. Maxims shareholders will
be able to obtain a free copy of the proxy statement/prospectus, as well as
other filings containing information about Maxim and EpiCept, without charge,
at the SECs Internet site (http://www.sec.gov). Copies of the proxy statement/prospectus and
the filings with the SEC that will be incorporated by reference in the proxy
statement/prospectus can also be obtained, without charge, by directing a
request to Maxim Pharmaceuticals, 8899 University Center Lane, Suite 400, San
Diego, CA 92122, Attention: Investor
Relations, Telephone: (858) 453-4040.
Participants
in the Solicitation
Maxim and its directors and
executive officers and EpiCept and its directors and executive officers may be
deemed to be participants in the solicitation of proxies from the shareholders
of Maxim in connection with the proposed transaction. Information regarding the special interests
of these directors and executive officers in the merger transaction will be
included in the proxy statement/prospectus of Maxim and EpiCept referred to
above. Additional information regarding
the directors and executive officers of Maxim is also included in Maxims proxy
statement for its 2005 Annual Meeting of Stockholders, which was filed with the
SEC on January 19, 2005. Additional
information regarding the directors and executive officers of EpiCept is also
included in EpiCepts registration statement on Form S-1, which was filed with
the SEC on April 18, 2005. These
documents are available free of charge at the SECs web site
(http://www.sec.gov)
and from
Investor Relations at Maxim at the address described above.
This communication shall not
constitute an offer to sell or the solicitation of an offer to buy any
securities, nor shall there be any sale of securities in any jurisdiction in
which such offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made
except by means of a prospectus meeting the requirements of Section 10 of the
Securities Act of 1933, as amended.
Potential
Milestones for the Combined Company
EpiCept expects
to receive milestone payments from its partner, Adolor Corporation, in
connection with Adolors commencement of a Phase 2b clinical program for
LidoPAIN® SP, a sterile prescription analgesic patch currently in Phase 3
development in Europe designed to provide sustained topical delivery of
lidocaine to post-surgical or post-traumatic sutured wounds while also
providing a sterile protective covering for the wound. The first milestone is payable upon
commencement of the US Phase 2 trial, expected in 2005, and the second
milestone upon the commencement of the US Phase 3 program, expected in 2006.
3
In 2005, EpiCept
expects to enter into an additional licensing agreement for one of the lead
apoptosis compounds and expects to independently move one of the apoptosis
compounds forward into a Phase 1 clinical trial during the first half of 2006.
In the first
half of 2006, EpiCept expects to submit Ceplene (histamine dihydrochloride) for
EU approval. Ceplene has shown a
statistically significant improvement in leukemia-free survival (p = 0.0096) in
a Phase 3 clinical trial as a remission-maintenance therapy for patients with
acute myeloid leukemia (AML). Ceplene
has a well-known safety profile with over 2,000 patients having participated in
clinical trials.
In the second
quarter of 2006, EpiCept expects to report the results of its European Phase 3
trial of LidoPAIN® SP. If successful,
this trial could form the basis for a regulatory application to market the
product in Europe.
In 2006, EpiCept
intends to initiate a Phase 2b trial for LidoPAIN BP in acute lower back
pain. The program will be conducted
under the joint direction of EpiCept and Endo Pharmaceuticals.
Also in 2006,
EpiCept expects to commence a pivotal Phase 3 trial of EpiCept NP-1, a
prescription topical analgesic cream designed to provide long-term relief from
the pain caused by peripheral neuropathies.
Conference Call Information
EpiCepts and Maxims management teams will hold a
conference call this morning to discuss the transaction.
When:
|
Tuesday, September 6,
2005, 10:00 a.m. (Eastern Time)
|
Dial-in:
|
U.S. - 800/811-0667,
International 913/981-4901
|
Web cast:
|
https://cis.premconf.com/sc/scw.dll/?sid=1446617473;
|
|
www.EpiCept.com
|
|
www.Maxim.com
|
About EpiCept Corporation
EpiCept Corporation is a specialty pharmaceutical
company focused on the development and commercialization of topically delivered
prescription pain management therapeutics.
EpiCept has six products in clinical development for the treatment of
various types of pain: three are ready to enter, or have entered, pivotal Phase
2b or Phase 3 clinical trials.
About Maxim Pharmaceuticals
Maxim is a biopharmaceutical company dedicated to
developing innovative cancer therapeutics.
Maxim has completed one Phase 3 clinical trial of Ceplene plus
Interleukin-2 combination therapy as a remission maintenance therapy for
patients with acute myeloid leukemia.
Maxim is also engaged in the discovery and development of small-molecule
apoptosis inducers and inhibitors to treat a wide range of disorders,
4
including cancers and degenerative diseases. Using its proprietary high-throughput
screening technology and its chemical genetics approach several lead compounds
have been identified. Current efforts
continue toward the development of these compounds either internally or through
strategic collaborative arrangements.
Risk Factors
This news release contains certain forward-looking statements that
involve risks and uncertainties that could cause actual results to be
materially different from historical results or from any future results
expressed or implied by such forward-looking statements. Such forward-looking statements include
statements regarding the proposed transaction, the efficacy, safety, and
intended utilization of the Companies respective product candidates, the
conduct and results of future clinical trials, and plans regarding regulatory
filings, future research and clinical trials and plans regarding partnering
activities. Factors that may cause
actual results to differ materially include the risk that Maxim and EpiCept may
not be able to complete the proposed transaction, the risk that product
candidates that appeared promising in early research and clinical trials do not
demonstrate safety and/or efficacy in larger-scale or later clinical trials,
the risk that Maxim and EpiCept will not obtain approval to market their
respective products, the risks associated with reliance on outside financing to
meet capital requirements, and the risks associated with reliance on
collaborative partners for further clinical trials, development and
commercialization of product candidates.
You are urged to consider statements that include the words may, will,
would, could, should, believes, estimates, projects, potential, expects,
plans, anticipates, intends, continues, forecast, designed, goal,
or the negative of those words or other comparable words to be uncertain and
forward-looking. The transaction is
subject to customary closing conditions, including approval of Maxims
shareholders. These factors and others
are more fully discussed in Maxims periodic reports and other filings with the
SEC.
Note: The EpiCept logo is a trademark of
EpiCept. The Maxim logo is a trademark
of Maxim.
Editors
Note: This release is also available on
the Internet at http://www.EpiCept.com and http://www.Maxim.com.
##
5