Acquisition Agreement

ACQUISITION AGREEMENT


Among


INTERNATIONAL MUREX TECHNOLOGIES CORPORATION,


ABBOTT LABORATORIES


and


AAC ACQUISITION LTD.


dated as of March 13, 1998


TABLE OF CONTENTS


PAGE
---- ARTICLE I THE OFFER. . . . . . . . . . . . . . . . . . . . . . . . . . . . -2-


Section 1.1 The Offer. . . . . . . . . . . . . . . . . . . . . . . . -2-
Section 1.2 Company Action . . . . . . . . . . . . . . . . . . . . . -3-
Section 1.3 Boards of Directors and Committees; Section 14(f). . . . -5-
Section 1.4 Company Stock Options. . . . . . . . . . . . . . . . . . -6-


ARTICLE II THE COMPLETION OF THE ACQUISITION . . . . . . . . . . . . . . . -7-


Section 2.1 The Compulsory Acquisition . . . . . . . . . . . . . . . -7-
Section 2.2 The Amalgamation . . . . . . . . . . . . . . . . . . . . -7-
Section 2.3 Meeting and Voting . . . . . . . . . . . . . . . . . . . -7-


ARTICLE III EXCHANGE OF SHARE CAPITAL . . . . . . . . . . . . . . . . . . . -8-


Section 3.1 Exchange of Share Capital. . . . . . . . . . . . . . . -8-
Section 3.2 Exchange of Certificates . . . . . . . . . . . . . . . . -8-
Section 3.3 Shareholders' Meeting. . . . . . . . . . . . . . . . . .-10-
Section 3.4 Dissenting Shares. . . . . . . . . . . . . . . . . . . .-11-


ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . . . . .-11-


Section 4.1 Organization and Qualification; Subsidiaries . . . . . .-11-
Section 4.2 Capitalization of the Company and Its Subsidiaries . . .-12-
Section 4.3 Authority Relative to This Agreement . . . . . . . . . .-13-
Section 4.4 Non-Contravention; Required Filings and Consents . . . .-13-
Section 4.5 SEC Reports. . . . . . . . . . . . . . . . . . . . . . .-14-
Section 4.6 Absence of Certain Changes; Derivatives. . . . . . . . .-15-
Section 4.7 Board Recommendation Statement; Offer Documents. . . . .-15-
Section 4.8 Finder's Fee; Professional Expenses. . . . . . . . . . .-15-
Section 4.9 Absence of Litigation. . . . . . . . . . . . . . . . . .-16-
Section 4.10 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . .-16-
Section 4.11 Employee Benefits. . . . . . . . . . . . . . . . . . . .-17-
Section 4.12 Compliance . . . . . . . . . . . . . . . . . . . . . . .-20-
Section 4.13 Environmental Matters. . . . . . . . . . . . . . . . . .-20-
Section 4.14 Intellectual Property. . . . . . . . . . . . . . . . . .-21-
Section 4.15 Significant Agreements . . . . . . . . . . . . . . . . .-22-
Section 4.16 Insurance. . . . . . . . . . . . . . . . . . . . . . . .-23-
Section 4.17 Properties . . . . . . . . . . . . . . . . . . . . . . .-24-
Section 4.18 Labor Matters. . . . . . . . . . . . . . . . . . . . . .-24-
Section 4.19 Regulatory Matters . . . . . . . . . . . . . . . . . . .-24-


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Section 4.20 Voting Requirements. . . . . . . . . . . . . . . . . . .-26-


ARTICLE V REPRESENTATIONS AND WARRANTIES OF
PARENT AND SUBSIDIARY . . . . . . . . . . . . . . . . . . . .-26-


Section 5.1 Organization . . . . . . . . . . . . . . . . . . . . . .-26-
Section 5.2 Authority Relative to this Agreement . . . . . . . . . .-26-
Section 5.3 Non-Contravention; Required Filings and Consents . . . .-26-
Section 5.4 Offer Documents; Board Recommendation Statement;
Proxy Statement. . . . . . . . . . . . . . . . . . . .-27-
Section 5.5 No Prior Activities. . . . . . . . . . . . . . . . . . .-28-
Section 5.6 Financing. . . . . . . . . . . . . . . . . . . . . . . .-28-
Section 5.7 No Share Ownership . . . . . . . . . . . . . . . . . . .-28-


ARTICLE VI COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . .-28-


Section 6.1 Conduct of Business of the Company . . . . . . . . . . .-28-
Section 6.2 Access to Information. . . . . . . . . . . . . . . . . .-30-
Section 6.3 Reasonable Best Efforts. . . . . . . . . . . . . . . . .-31-
Section 6.4 Public Announcements . . . . . . . . . . . . . . . . . .-31-
Section 6.5 Indemnification. . . . . . . . . . . . . . . . . . . . .-32-
Section 6.6 Notification of Certain Matters. . . . . . . . . . . . .-32-
Section 6.7 Termination of Stock Plans . . . . . . . . . . . . . . .-33-
Section 6.8 No Solicitation. . . . . . . . . . . . . . . . . . . . .-33-
Section 6.9 Chiron License Agreement. . . . . . . . . . . . . . . .-35-
Section 6.10 Litigation Between Parent and the Company. . . . . . . .-35-
Section 6.11 Rights Plan. . . . . . . . . . . . . . . . . . . . . . .-35-
Section 6.12 Post-Option Exercise . . . . . . . . . . . . . . . . . .-36-


ARTICLE VII CONDITIONS TO THE COMPLETION OF THE ACQUISITION . . . . . . . .-36-


Section 7.1 Conditions to Each Party's Obligation to Effect the
Completion of the Acquisition. . . . . . . . . . . . . .-36-
Section 7.2 Conditions to the Obligation of Parent and
Subsidiary to Effect the Completion of the Acquisition .-37-
Section 7.3 Conditions to the Obligation of the Company to
Effect the Completion of the Acquisition . . . . . . . .-37-


ARTICLE VIII TERMINATION; EXPENSES; AMENDMENT; WAIVER . . . . . . . . . . .-37-


Section 8.1 Termination. . . . . . . . . . . . . . . . . . . . . . .-37-
Section 8.2 Effect of Termination. . . . . . . . . . . . . . . . . .-39-
Section 8.3 Fees and Expenses. . . . . . . . . . . . . . . . . . . .-40-
Section 8.4 Amendment. . . . . . . . . . . . . . . . . . . . . . . .-40-
Section 8.5 Extension; Waiver. . . . . . . . . . . . . . . . . . . .-40-


ARTICLE IX MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . .-40-


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Section 9.1 Nonsurvival of Representations and Warranties. . . . . .-40-
Section 9.2 Entire Agreement; Assignment . . . . . . . . . . . . . .-40-
Section 9.3 Notices. . . . . . . . . . . . . . . . . . . . . . . . .-40-
Section 9.4 Governing Law. . . . . . . . . . . . . . . . . . . . . .-42-
Section 9.5 Parties in Interest. . . . . . . . . . . . . . . . . . .-42-
Section 9.6 Specific Performance . . . . . . . . . . . . . . . . . .-42-
Section 9.7 Severability . . . . . . . . . . . . . . . . . . . . . .-42-
Section 9.8 Descriptive Headings . . . . . . . . . . . . . . . . . .-43-
Section 9.9 Certain Definitions. . . . . . . . . . . . . . . . . . .-43-
Section 9.10 Counterparts . . . . . . . . . . . . . . . . . . . . . .-46-


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ACQUISITION AGREEMENT


THIS ACQUISITION AGREEMENT, dated as of March 13, 1998, is among INTERNATIONAL MUREX TECHNOLOGIES CORPORATION, a British Columbia company (the "Company"), ABBOTT LABORATORIES, an Illinois corporation ("Parent") and AAC ACQUISITION LTD., a British Columbia company and an indirect wholly owned subsidiary of Parent ("Subsidiary").


WHEREAS, the Boards of Directors of Parent, Subsidiary and the Company have each approved the acquisition of the Company by Parent and Subsidiary upon the terms and subject to the conditions set forth in this Agreement;


WHEREAS, in furtherance thereof, it is proposed that Subsidiary shall make a tender offer to acquire all outstanding common shares, without par value, of the Company (the "Shares"), for a net cash amount of U.S.$13.00 per Share (such amount, or any greater amount per Share paid pursuant to the tender offer, being hereinafter referred to as the "Per Share Amount") in accordance with the terms and subject to the conditions provided for herein (the "Offer");


WHEREAS, the Board of Directors of the Company (the "Board") has (i) determined that the consideration to be paid for each Share in the Offer and the Completion of the Acquisition (as defined in the recital below) is fair to and in the best interests of the shareholders of the Company and (ii) approved this Agreement and the transactions contemplated hereby and resolved to recommend acceptance of the Offer and approval and, if necessary, the adoption of this Agreement by the shareholders of the Company; and


WHEREAS, the Boards of Directors of Parent and Subsidiary have each approved the completion of the acquisition of the Company by Parent and Subsidiary (the "Completion of the Acquisition") through either (1) the acquisition procedure (as contemplated under Section 255 of the BC Act (as defined along with certain other terms in Section 9.9)) (the "Compulsory Acquisition") if Subsidiary has purchased enough Shares in the Offer to permit a Compulsory Acquisition or, if not, (2) an amalgamation, arrangement or other business combination (as contemplated under the BC Act) (the "Amalgamation") of Subsidiary with the Company following the Offer upon the terms and subject to the conditions set forth herein and in any other agreement required to effect the Amalgamation.


NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained, and intending to be legally bound hereby, the Company, Parent and Subsidiary hereby agree as follows.


ARTICLE I


THE OFFER


Section 1.1 THE OFFER. (a) Provided that this Agreement shall not have been terminated in accordance with Section 8.1 and no event shall have occurred or circumstance shall exist which constitutes a failure to satisfy any of the conditions set forth in Annex A hereto, Subsidiary shall commence the Offer as promptly as practicable, but in no event later than the fifth business day following the public announcement of the terms of this Agreement. The obligation of Subsidiary to accept for payment and pay for Shares tendered pursuant to the Offer shall be subject to the condition that a number of Shares representing not less than 75% of the Company's outstanding voting power (assuming the exercise of all outstanding options to purchase Shares which options are not subject to binding agreements to cancel) shall have been validly tendered and not withdrawn prior to the expiration of the Offer (the "Minimum Condition"), and the obligation of Subsidiary to commence the Offer and accept for payment and pay for Shares tendered pursuant to the Offer shall be subject to the other conditions set forth in Annex A hereto. It is agreed that the Minimum Condition and the other conditions set forth in Annex A hereto are for the sole benefit of Subsidiary and may be asserted by Subsidiary regardless of the circumstances giving rise to any such condition. Subsidiary expressly reserves the right in its sole discretion to waive, in whole or in part, at any time or from time to time, any such condition, to increase the price per Share payable in the Offer or to make any other changes in the terms and conditions of the Offer; PROVIDED that Subsidiary may only waive the Minimum Condition as long as Subsidiary purchases at least a majority of the Shares outstanding (assuming the exercise of all outstanding options to purchase Shares which options are not subject to binding agreements to cancel) and that, unless previously approved by the Company in writing, no change may be made that decreases the price per Share payable in the Offer, changes the form of consideration payable in the Offer, reduces the maximum number of Shares that Subsidiary offers to purchase in the Offer below a majority of the Shares outstanding (assuming the exercise of all outstanding options to purchase Shares which options are not subject to binding agreements to cancel), imposes conditions to the Offer in addition to those set forth in Annex A hereto or otherwise amends the terms of the Offer in any way that would be materially adverse to holders of Shares. Subject to the next sentence, Subsidiary covenants and agrees that, subject to the terms and conditions of this Agreement, including, without limitation, the conditions of the Offer set forth in Annex A hereto, Subsidiary shall accept for payment and pay for Shares which have been validly tendered and not withdrawn pursuant to the Offer as soon as it is permitted to do so under applicable law. Notwithstanding the foregoing, Subsidiary (i) may extend the Offer to purchase Shares in excess of the Shares required to satisfy the Minimum Condition up to the tenth business day following the date on which all conditions to the Offer shall first have been satisfied or waived, provided that, by virtue of making any such extension, Subsidiary shall be deemed to waive and thereafter shall not be entitled to assert any of the conditions to the consummation of the Offer contained in subsections (b), (c), (d) and (e) to Annex A hereto, (ii) shall extend the Offer at least until 11:59 p.m. New York City time on the sixth business day following the delivery to Parent of a Notice of Superior Proposal (as defined in Section 6.8) and (iii) shall extend the Offer at least until the expiration of the period set forth


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in paragraph (d) or (e) of Annex A if a notice of breach has been delivered in accordance therewith. The Per Share Amount payable in the Offer shall be paid net to the seller in cash, upon the terms and subject to the conditions of the Offer.


(b) As soon as practicable on the date of commencement of the Offer, Parent and Subsidiary shall file (i) with the Securities and Exchange Commission (the "SEC") a Tender Offer Statement on Schedule 14D-1 with respect to the Offer and (ii) with the appropriate Canadian authorities any required filings with respect to the Offer, which in the case of both (i) and (ii) will contain the offer to purchase, form of the related letter of transmittal and related documents published or filed by Parent or Subsidiary (together with any supplements or amendments thereto, the "Offer Documents"). Parent, Subsidiary and the Company each agrees promptly to correct any information provided by it for use in the Offer Documents if and to the extent that any such information shall have become false or misleading in any material respect and Parent and Subsidiary each further agrees to take all steps necessary to cause the Offer Documents as so corrected to be filed with the SEC and the appropriate Canadian authorities and to be disseminated to holders of Shares, in each case as and to the extent required by applicable laws. The Company and its counsel shall be given a reasonable opportunity to review and comment on the Offer Documents prior to their filing with the SEC and the appropriate Canadian authorities and shall be provided with any comments Parent, Subsidiary and their counsel may receive from the SEC or the appropriate Canadian authorities with respect to the Offer Documents promptly after receipt of such comments.


Section 1.2 COMPANY ACTION. (a) The Company hereby approves of and consents to the Offer and represents and warrants that the Board, at a meeting duly called and held on March 15, 1998, unanimously (i) determined that this Agreement and the transactions contemplated hereby, including the Offer and the Completion of the Acquisition, are fair to and in the best interests of the shareholders of the Company, (ii) approved this Agreement and the transactions contemplated hereby, including the Offer and the Completion of the Acquisition and (iii) resolved to recommend that the shareholders of the Company accept the Offer, tender their Shares thereunder to Subsidiary and, if required by applicable law, approve and adopt this Agreement and the Completion of the Acquisition. The Company further represents and warrants that Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ") has delivered to the Board its written opinion dated March 15, 1998 to the effect that, as of the date of such opinion, subject to the assumptions and limitations expressed therein, the consideration to be received by the holders of Shares in the Offer and the Completion of the Acquisition pursuant to this Agreement is fair to such holders from a financial point of view. The Company hereby consents to the inclusion in the Offer Documents of the fact of the recommendations of the Board described in this Section 1.2(a). The Company represents and warrants that the Board has made appropriate amendments to and determinations under the Rights Plan (the "Rights Plan Amendments and Determinations"), including without limitation: (A) an amendment to the definition of "Acquiring Person" under the Rights Plan to exclude Parent, Subsidiary and their subsidiaries from that definition; (B) an amendment to the definition of "Separation Time" under the Rights Plan to provide that the Separation Time shall not occur by virtue of the execution of this Agreement or the Shareholder Agreements, the consummation of the transactions


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contemplated or permitted hereunder or thereunder or the acquisition or purchase of Shares by Parent, Subsidiary so their subsidiaries and a determination by the Board to the same effect; and (C) a determination under Section 1.1(a)(v) by the Board approving the acquisition of Shares by Parent, Subsidiary or their subsidiaries pursuant to this Agreement or the Shareholder Agreements, or any other acquisition or purchase of Shares by Parent, Subsidiary or their subsidiaries. The Company further represents and warrants that, because of the Rights Plan Amendments and Determinations, (i) the Rights Plan is inapplicable to Parent's and Subsidiary's entering into this Agreement and the Shareholder Agreements and (ii) the Rights Plan would not impede or cause an adverse effect on, or otherwise be applicable to Parent, Subsidiary or any of their subsidiaries if, Parent, Subsidiary or any of their subsidiaries (A) purchases or acquires, or proposes to purchase or acquire, any securities of the Company pursuant to the Offer, the Completion of the Acquisition or the Shareholder Agreements or (B) purchases or acquires or proposes to purchase or acquire any securities of the Company or enters into any agreement requiring or permitting the purchase or acquisition of any securities of the Company after Parent, Subsidiary or any of their subsidiaries has purchased or has acquired Shares pursuant to the Offer or upon exercise of an Option (as defined in each of the Shareholder Agreements).


(b) As soon as practicable on the date of commencement of the Offer, the Company shall file a combined Solicitation/Recommendation Statement on Schedule 14D-9 and any Directors' Circular required by Canadian law (together with any amendments or supplements thereto, the "Board Recommendation Statement"), shall file such Board Recommendation Statement with both the SEC and the appropriate Canadian authorities and shall mail the combined Board Recommendation Statement to the shareholders of the Company at the time of commencement of the Offer, together with the Offer Documents. The Board Recommendation Statement shall at all times contain the determinations, approvals and recommendations described in Section 1.2(a), unless, subject to the requirements of Section 6.8, the Company's directors determine in good faith, based upon the written advice of independent legal counsel, that the withdrawal of any of such determinations is required for the discharge of their fiduciary duties to shareholders under applicable law. Parent, Subsidiary and the Company each agrees promptly to correct any information provided by it for use in the Board Recommendation Statement if and to the extent that any such information shall have become false or misleading in any material respect. The Company further agrees to take all steps necessary to cause the Board Recommendation Statement as so corrected to be filed with the SEC and the appropriate Canadian authorities and to be disseminated to holders of Shares, in each case as and to the extent required by applicable U.S. federal and Canadian securities laws. Parent, Subsidiary and their counsel shall be given a reasonable opportunity to review and comment on the Board Recommendation Statement prior to its filing with the SEC and the appropriate Canadian authorities and shall be provided with any comments the Company and its counsel may receive from the SEC or the appropriate Canadian authorities with respect to the Board Recommendation Statement promptly after receipt of such comments.


(c) In connection with the Offer, the Company will promptly furnish Subsidiary with mailing labels, security position listings and any available listing or computer file containing the names and addresses of the record holders of the Shares as of a recent date


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and shall furnish Subsidiary with such additional information and assistance (including, without limitation, updated lists of shareholders, mailing labels and lists of securities positions) as Subsidiary or its agents may reasonably request in communicating the Offer to the record and beneficial holders of Shares. Subject to the requirements of applicable law, and except for such steps as are necessary to disseminate the Offer Documents and any other documents necessary to consummate the Completion of the Acquisition, Subsidiary and its affiliates and associates shall hold in confidence the information contained in any such labels, listings and files, will use such information only in connection with the Offer and the Completion of the Acquisition, and, if this Agreement shall be terminated, will deliver to the Company all copies of such information then in their possession.


Section 1.3 BOARDS OF DIRECTORS AND COMMITTEES; SECTION 14(f). (a) Promptly upon the purchase by Subsidiary of Shares pursuant to the Offer and from time to time thereafter, so long as Parent and Subsidiary are not in material breach of their respective obligations hereunder, Subsidiary shall be entitled to designate up to such number of directors, rounded up to the next whole number, on the Board that equals the product of (i) the total number of directors on the Board (giving effect to the election of any additional directors pursuant to this Section) and (ii) the percentage that the number of Shares owned by Subsidiary and its affiliates (including any Shares purchased pursuant to the Offer) bears to the total number of outstanding Shares, and the Company shall, upon request by Subsidiary, promptly either increase the size of the Board to the extent permitted by applicable law or use its reasonable best efforts to secure the resignation of such number of directors as is necessary to enable Subsidiary's designees to be elected to the Board and shall cause Subsidiary's designees to be so elected; PROVIDED, HOWEVER, that at all times prior to the Completion of the Acquisition at least two persons who are directors of the Company as of the date hereof and designated by the Company as soon as reasonably practicable after the date hereof (or who are designated by such designated directors) shall be entitled to remain directors of the Company (the "Continuing Directors"). Promptly upon request by Subsidiary, the Company will use its reasonable best efforts to cause persons designated by Subsidiary to constitute the same percentage as the number of Subsidiary's designees to the Board bears to the total number of directors on the Board on (i) each committee of the Board, (ii) each board of directors or similar governing body or bodies of each subsidiary of the Company designated by Subsidiary and (iii) each committee of each such board or body. Notwithstanding the foregoing, until the completion of the Offer, the Company shall use its reasonable best efforts to ensure that all of the members of the Board and of such boards, bodies and committees as of the date hereof who are not employees of the Company shall remain members of the Board and such boards, bodies and committees. In complying with this subsection (a) and without restricting the right of the two Continuing Directors to serve on the Board, the parties shall cause the composition of the Board and its committees to comply with applicable law and listing requirements.


(b) The Company's obligations to appoint designees to the Board shall be subject to Section 14(f) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Rule 14f-1 promulgated thereunder. The Company shall promptly take all actions required pursuant to Section 14(f) and Rule 14f-1 in order to fulfill its obligations under this


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Section 1.3 and shall include in the Board Recommendation Statement such information with respect to the Company and its officers and directors as is required under Section 14(f) and Rule 14f-1. Parent or Subsidiary will supply to the Company in writing and be solely responsible for any information with respect to either of them and their nominees, officers, directors and affiliates required by Section 14(f) and Rule 14f-1.


(c) Following the election or appointment of Subsidiary's designees to the Board pursuant to this Section 1.3 and prior to the Effective Time, any amendment or modification of this Agreement or the Articles of Association or Memorandum of Association of the Company, any termination of this Agreement by the Company, any extension by the Company of the time for the performance of any of the obligations or other acts of Parent or Subsidiary, any waiver of any of the Company's rights hereunder or any other action with respect to this Agreement or the transactions contemplated hereby which is materially adverse to holders of Shares generally (other than Subsidiary) will require the concurrence of at least fifty percent of the Continuing Directors.


Section 1.4 COMPANY STOCK OPTIONS. (a) Unless Parent and the Company make the Option Election (as defined below), the Company shall, prior to completion of the Offer: (i) use its best efforts to amend each outstanding stock option, warrant or other right to acquire Shares ("Company Options") or any plans with respect to Company Options to permit vesting of unvested and exercise of Company Options contingent on consummation of the Offer; (ii) declare all Company Options to be fully exercisable and vested prior to the completion of the Offer and contingent on consummation of the Offer; and (iii) use its best efforts to cause the holders of Company Options to exercise their Company Options and tender the Shares so acquired in the Offer.


(b) Parent and the Company may agree, after consulting their respective counsel, to implement the steps set forth in this Section 1.4(b) instead of the steps set forth in Section 1.4(a) (the "Option Election"). If the parties make the Option Election: (i) immediately prior to consummation of the Offer, the Company shall offer to pay to the holder of each Company Option, in exchange for the agreement by such holder to cancel his, her or its Company Options, an amount equal to (x) the difference between the Per Share Amount and the per Share exercise price of such Company Option, multiplied by (y) the number of Shares underlying such holder's Company Option; (ii) the Company will use its best efforts to cause the holders of Company Options to accept the Company's offer set forth above and enter into appropriate cancellation agreements; and (iii) Parent shall, immediately following consummation of the Offer, lend to (subject to any of the Company's contractual restrictions and at the Applicable Federal Rate) or contribute to the capital of the Company cash in an amount equal to the amount necessary to satisfy payment by the Company of the amounts required under this Section 1.4(b).


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(c) The Company, Parent and the Board shall take whatever actions are required such that, as of the Effective Time, any Company ...