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EXHIBIT 2.1
THE MERGER
SECTION 1.1 The Merger.
(a) Upon the terms and subject to the conditions of this Agreement, and in
accordance with the DGCL, at the Effective Time (as defined in Section 1.1(b),
Merger Sub shall be merged (the "Merger") with and into the Company, whereupon
the separate existence of Merger Sub shall cease, and the Company shall continue
as the surviving corporation (sometimes referred to herein as the "Surviving
Corporation") and shall continue to be governed by the DGCL.
(b) Concurrently with the Closing (as defined in Section 1.7 hereof), the
Company, Parent and Merger Sub shall cause a certificate of merger (the
"Certificate Of Merger") with respect to the Merger to be executed and filed
with the Secretary of State of the State of Delaware (the "Secretary Of State")
as provided in the DGCL and shall make all other filings or recordings required
by the DGCL in connection with the Merger. The Merger shall become effective on
the date and time at which the Certificate of Merger has been duly filed with
the Secretary of State or at such later date and time as is agreed between the
parties and specified in the Certificate of Merger, and such date and time is
hereinafter referred to as the "Effective Time."
(c) The Merger shall have the effects set forth in the DGCL. Without
limiting the generality of the foregoing and subject thereto, from and after the
Effective Time, the Surviving Corporation shall possess all properties, rights,
privileges, immunities, powers and franchises and be subject to all of the
obligations, restrictions, disabilities, liabilities, debts and duties of the
Company and Merger Sub.
SECTION 1.2 Effect On Common Stock. At the Effective Time:
(a) Cancellation of Shares of Common Stock. Each share of Common Stock
held by the Company as treasury stock and each share of Common Stock owned
by Parent, Merger Sub or any direct or indirect wholly-owned subsidiary of
Parent or the Company immediately prior to the Effective Time shall
automatically be cancelled and cease to exist, and no consideration or
payment shall be delivered
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therefor or in respect thereto. All shares of Common Stock to be converted
into the right to receive the Merger Consideration pursuant to this Section
1.2 shall, by virtue of the Merger and without any action on the part of
the holders thereof, cease to be outstanding, be cancelled and cease to
exist, and each holder of a Certificate (as defined in Section 1.3(b))
shall thereafter cease to have any rights with respect to such shares of
Common Stock, except the right to receive the Merger Consideration into
which such shares of Common Stock have been converted.
(b) Conversion of Shares of Common Stock. Subject to Section 1.3(d)
hereof, each share of Common Stock issued and outstanding immediately prior
to the Effective Time (other than shares of Common Stock referred to in the
first sentence of Section 1.2(a) hereof and Dissenting Shares (as defined
in Section 1.2(c)) shall, by virtue of the Merger and without any action on
the part of the holder thereof, be converted into the right to receive an
amount of cash, without interest, equal to $48.00 (the "Merger
Consideration").
(c) Dissenting Shares.
(i) Any shares of Common Stock held by a holder who has demanded
and perfected appraisal rights for such shares in accordance with
Section 262 of the DGCL and who, as of the Effective Time, has not
effectively withdrawn or lost such appraisal rights ("Dissenting
Shares") shall not be converted into or represent a right to receive
Merger Consideration pursuant to Section 1.2(b), but the holder thereof
shall only be entitled to such rights as are granted by the DGCL.
(ii) Notwithstanding the provisions of subsection (i) above, if any
holder of shares of Common Stock who demands appraisal of such shares
under the DGCL shall effectively withdraw or lose (through failure to
perfect or otherwise) such holder's appraisal rights, then, as of the
later of (A) the Effective Time or (B) the occurrence of such event,
such holder's shares of Common Stock shall automatically be converted
into and represent only the right to receive Merger Consideration as
provided in Section 1.2(b), without interest thereon, upon surrender of
the Certificate representing such shares.
(iii) The Company shall give Parent (A) prompt notice of its
receipt of any written demands for appraisal of any shares of Common
Stock, withdrawals of such demands, and any other instruments relating
to the Merger served pursuant to the DGCL and received by the Company
and (B) the opportunity to direct all negotiations and proceedings with
respect to demands for appraisal of any shares of Common Stock under the
DGCL. The Company shall not, except with the prior written consent of
Parent or as may be required under applicable law (in which case Parent
shall be consulted), voluntarily make any payment with respect to any
demands for the appraisal of Common Stock or offer to settle or settle
any such demands or approve any withdrawal of such demands.
(d) Closing of the Company's Transfer Books. At the Effective Time,
the stock transfer books of the Company shall be closed and no transfer of
Common Stock shall thereafter be made. If, after the Effective Time,
Certificates are presented to the Surviving Corporation, they shall be
cancelled and exchanged for the Merger Consideration as provided in this
Article I, subject to applicable law in the case of Dissenting Shares.
(e) Conversion of Common Stock of Merger Sub. Each share of common
stock of Merger Sub issued and outstanding immediately prior to the
Effective Time shall be converted into one share of common stock of the
Surviving Corporation with the same rights, powers and privileges as the
shares so converted and shall constitute the only outstanding shares of
capital stock of the Surviving Corporation.
SECTION 1.3 Exchange Of Certificates.
(a) Prior to the mailing of the Proxy Statement (as defined in Section 3.9
hereof) a bank, trust company or other person reasonably acceptable to the
Company shall be designated by Parent to act as the depositary and paying agent
for the delivery of the Merger Consideration in exchange for shares of Common
Stock (the "Paying Agent") in connection with the Merger. From time to time, as
necessary, at or following the Effective Time, Parent shall deposit, or cause to
be deposited, with the Paying Agent the amount needed to pay the
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portion of the aggregate Merger Consideration for the benefit of the holders of
shares of Common Stock which are converted into the right to receive the Merger
Consideration pursuant to Section 1.2(b) hereof for which Certificates have been
surrendered or payment is otherwise due (the "Exchange Fund"). For purposes of
this Agreement, "person" means any natural person, firm, individual,
corporation, limited liability company, partnership, association, joint venture,
company, business trust, trust or any other entity or organization, whether
incorporated or unincorporated, including a government or political subdivision
or any agency or instrumentality thereof.
(b) As of or promptly following the Effective Time, the Surviving
Corporation shall cause the Paying Agent to mail to each holder of record of a
certificate or certificates, which immediately prior to the Effective Time
represented outstanding shares of Common Stock (other than Dissenting Shares)
(the "Certificates"), (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 proper delivery of the Certificates to the Paying Agent and
which shall be in the form and have such other provisions as Parent and the
Company may reasonably specify) and (ii) instructions for use in effecting the
surrender of the Certificates in exchange for the Merger Consideration into
which the number of shares of Common Stock previously represented by such
Certificate shall have been converted into the right to receive pursuant to this
Agreement. Upon surrender of a Certificate for cancellation to the Paying Agent,
together with a letter of transmittal duly completed and validly executed in
accordance with the instructions thereto, and such other documents as may
reasonably be required pursuant to such instructions, the holder of such
Certificate shall be entitled to receive in exchange therefor the Merger
Consideration for each share of Common Stock formerly represented by such
Certificate, to be distributed as soon as practicable after the Effective Time,
and the Certificate so surrendered shall be forthwith cancelled. The Paying
Agent shall accept such Certificates upon compliance with such reasonable terms
and conditions as the Paying Agent may impose to effect an orderly exchange
thereof in accordance with normal exchange practices.
(c) Any portion of the Exchange Fund which remains undistributed to the
holders of Certificates for six months after the Effective Time shall be
delivered to Parent, upon demand, and any holders of shares of Common Stock
prior to the Merger who have not theretofore complied with this Article I shall
thereafter look for payment of their claim, as general creditors thereof, only
to Parent for their claim for Merger Consideration, without interest.
(d) None of Parent, the Company or the Paying Agent shall be liable to any
person in respect of any Merger Consideration held in the Exchange Fund
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar law. If any Certificates shall not have been surrendered
prior to one year after the Effective Time (or immediately prior to such earlier
date on which Merger Consideration in respect of such Certificate would
otherwise escheat to or become the property of any Governmental Entity (as
defined in Section 3.3(b) hereof)), any such Merger Consideration in respect of
such Certificate shall, to the extent permitted by applicable law, become the
property of Parent, free and clear of all claims or interest of any person
previously entitled thereto.
SECTION 1.4 Transfer Taxes; Withholding. If any Merger Consideration is to
be remitted to a person other than the person in whose name the Certificate
surrendered in exchange therefor is registered, it shall be a condition of such
exchange that the Certificate so surrendered shall be properly endorsed and
otherwise in proper form for transfer and that the person requesting such
exchange shall pay to the Paying Agent any transfer or other Taxes (as defined
in Section 3.11(b) hereof) required by reason of the remittance of such Merger
Consideration to a person other than the registered holder of the Certificate so
surrendered, or shall establish to the satisfaction of the Paying Agent that
such Tax either has been paid or is not applicable. Parent or the Paying Agent
shall be entitled to deduct and withhold from the Merger Consideration otherwise
payable pursuant to this Agreement to any holder of shares of Common Stock such
amounts as Parent or the Paying Agent are required to deduct and withhold under
the Internal Revenue Code of 1986, as amended (the "Code"), or any provision of
state, local or foreign Tax law, with respect to the making of such payment. To
the extent that amounts are so withheld by Parent or the Paying Agent, such
withheld amounts shall be treated for all purposes of this Agreement as having
been paid to the holder of shares of Common Stock in respect of whom such
deduction and withholding was made by Parent or the Paying Agent.
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SECTION 1.5 Stock Options; Stock Units; Stock Purchase Plan.
(a) As to options to purchase Common Stock outstanding under the Company's
Third Amended and Restated 1994 Stock Incentive Plan (the "1994 Company
Options"):
(i) Not later than 30 days prior to the Effective Time, the Company
shall send a notice (the "Option Notice") to all holders of 1994 Company
Options stating: (A) that such options, by their terms, become exercisable
in full as to the aggregate number of shares subject thereto at the
Effective Time, (B) that the holder of any 1994 Company Options exercised
prior to the Effective Time shall receive shares of Common Stock which will
be converted into the right to receive $48 per share at the Effective Time,
(C) that the holder of any 1994 Company Options exercised prior to but
effective as of the Effective Time will receive $48 per share or, if
exercised on a net basis pursuant to Section 1.5(a)(iii), the amount
specified therein, and (D) that options outstanding after the Effective
Time will be assumed by Parent and be exercisable to purchase shares of
Parent common stock as provided in Section 1.5(a)(iv).
(ii) The Company shall permit each holder of a 1994 Company Option who
desires to exercise all or any portion of such 1994 Company Option
following receipt of the Option Notice to exercise such 1994 Company Option
prior to the Effective Time. To the extent 1994 Company Options would not
be exercisable but for the Merger, such exercises may be made contingent on
the Merger becoming effective.
(iii) The Company shall offer to all holders of 1994 Company Options a
procedure not provided in the agreements evidencing such options whereby
the option holders may elect to exercise their options in advance of, but
effective at, the Effective Time and not pay the exercise price in cash
upon exercise but instead receive after the Effective Time the excess, if
any, of (A) the product of the Merger Consideration multiplied by the
aggregate number of shares of Common Stock subject to such 1994 Company
Option immediately prior to the Effective Time over (B) the aggregate
exercise price of all such shares of Common Stock subject to such 1994
Company Option. The aggregate amount payable pursuant to this Section
1.5(a)(iii) and Section 1.5(b)(ii) shall hereinafter be referred to as the
"Option Cash-Out Amount." In no event shall the procedure described in this
Section 1.5(a)(iii) be available with respect to 1994 Company Options
assumed by Parent pursuant to Section 1.5(a)(iv).
(iv) Each 1994 Company Option outstanding immediately after the
Effective Time shall, without any action on the part of the holder thereof,
be assumed by Parent in such manner that Parent (i) is a corporation
"assuming a stock option in a transaction to which Section 424(a) applies"
within the meaning of Section 424 of the Code and the regulations
thereunder or (ii) to the extent that Section 424 of the Code does not
apply to any such 1994 Company Option, would be such a corporation were
Section 424 of the Code applicable to such 1994 Company Option. After the
Effective Time, all references to the Company in the 1994 Company Options
shall be deemed to refer to Parent. The 1994 Company Options assumed by
Parent shall be exercisable upon the same terms and conditions except that
(i) such 1994 Company Options shall entitle the holder to purchase from
Parent the number of shares of Parent common stock (rounded down to the
nearest whole number of such shares) that equals (X) the number of shares
of Common Stock subject to such 1994 Company Option immediately prior to
the Effective Time, multiplied by (Y) the quotient of $48 divided by the
Formula Value of the Parent common stock, (ii) the option exercise price
per share of Parent common stock shall be an amount (rounded up to the
nearest full cent) equal to (X) the option exercise price per share of
Common Stock in effect immediately prior to the Effective Time divided by
(Y) the quotient of $48 divided by the Formula Value of the Parent common
stock. The Formula Value of the Parent common stock will equal the average
(rounded to the nearest full cent, with the cents rounded up if the third
decimal place is 5 or more) of the closing sale prices (rounded to the
nearest whole cent) of Parent common stock, on the New York Stock Exchange
("NYSE") Composite Tape as reported in The Wall Street Journal, for the ten
(10) consecutive NYSE trading days ending on and including the NYSE trading
day that is three NYSE trading days prior to the Effective Time.
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(b) As to options to purchase Common Stock issued under the MiniMed
Technologies Limited Amended and Restated 1992 Option Plan (the "1992 Plan") and
assumed by the Company (the "1992 Company Options"):
(i) The committee of the Board of Directors administering the 1992
Plan has accelerated the exercise dates of all outstanding 1992 Company
Options contingent upon and effective as of the Effective Time so that all
such options will be exercisable in full at that time.
(ii) The Company shall offer to all holders of 1992 Company Options a
procedure not provided in the agreements evidencing such options whereby
the option holders may elect to exercise their options in advance of, but
effective at, the Effective Time and not pay the exercise price in cash
upon exercise but instead receive after the Effective Time the excess, if
any, of (A) the product of the Merger Consideration multiplied by the
aggregate number of shares of Common Stock subject to such 1992 Company
Option immediately prior to the Effective Time over (B) the aggregate
exercise price of all such shares of Common Stock subject to such 1992
Company Option. The aggregate amount payable pursuant to this Section
1.5(b)(ii) shall be included in the Option Cash-Out Amount as provided in
Section 1.5(a)(iii) above. In no event shall the procedure described in
this Section 1.5(b)(ii) be available with respect to 1992 Company Options
assumed by Parent pursuant to Section 1.5(b)(iii).
(iii) Each 1992 Company Option outstanding immediately after the
Effective Time shall, without any action on the part of the holder thereof,
be assumed by Parent in such manner that Parent (i) is a corporation
"assuming a stock option in a transaction to which Section 424(a) applies"
within the meaning of Section 424 of the Code and the regulations
thereunder or (ii) to the extent that Section 424 of the Code does not
apply to any such 1992 Company Option, would be such a corporation were
Section 424 of the Code applicable to such 1992 Company Option. After the
Effective Time, all references to the Company in the 1992 Company Options
shall be deemed to refer to Parent. The 1992 Company Options assumed by
Parent shall be exercisable upon the same terms and conditions except that
(i) such 1992 Company Options shall entitle the holder to purchase from
Parent the number of shares of Parent common stock (rounded down to the
nearest whole number of such shares) that equals (X) the number of shares
of Common Stock subject to such 1992 Company Option immediately prior to
the Effective Time, multiplied by (Y) the quotient of $48 divided by the
Formula Value of the Parent common stock and (ii) the option exercise price
per share of Parent common stock shall be an amount (rounded up to the
nearest full cent) equal to (X) the option exercise price per share of
Common Stock in effect immediately prior to the Effective Time divided by
(Y) the quotient of $48 divided by the Formula Value of the Parent common
stock.
(iv) The 1994 Company Options and the 1992 Company Options are
referred to collectively in this Agreement as the "Company Options."
(c) Non-Employee Director Deferred Stock Units Plan. Not later than 30 days
prior to the Effective Time, the Company shall send a notice to the holders of
outstanding units issued pursuant to the Non-Employee Director Deferred Stock
Units Plan (the "Units") stating: (i) that the Units shall not be assumed in
connection with the Merger, (ii) that rights under any Units outstanding as of
the Effective Time shall terminate and be cancelled at the Effective Time and
represent only the right to receive the consideration, if any, specified in this
Section 1.5(c) in accordance with this Agreement, and (iii) setting forth the
Merger Consideration. At the Effective Time, each Unit shall, by virtue of the
Merger and without any action on the part of the holder thereof, be converted
into, and represent only, the right to receive, upon delivery thereof to the
Company, an amount in cash equal to the Merger Consideration. The aggregate
amount payable pursuant to this paragraph (c) shall hereinafter be referred to
as the "Unit Cash-Out Amount."
(d) Exchange Procedures for Company Options or Units. Promptly following
the Effective Time, Parent shall cause the Paying Agent to mail to each holder
of a Company Option exercised as of the Effective Time and to each holder of a
Unit outstanding at the Effective Time (i) a letter of transmittal (which shall
be in such form and have such other provisions as Parent may reasonably
specify), and (ii) instructions for use in receiving cash payable in respect of
such Company Options or Units. Upon the delivery of such letter of transmittal,
duly completed and validly executed in accordance with the instructions thereto,
together with the
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documentation representing such Company Options or Units surrendered thereby, to
the Paying Agent, the holders of such Company Options shall be entitled to
receive the Option Cash-Out Amount or other amount payable to them in respect of
such Company Options pursuant to Section 1.5(a) or (b) or the Unit Cash-Out
Amount payable to them pursuant to Section 1.5(c).
(e) ESPP. Not later than 30 days prior to the Effective Time, the Company
shall send notice to the holders of options under the Company's Employee Stock
Purchase Plan (the "ESPP") accelerating the exercise of such options for a 30
day period from the date of the notice. On the 30th day after the date of the
notice, in accordance with the terms of the ESPP, all rights to purchase shares
of Common Stock outstanding under the ESPP immediately prior to that date shall
be exercised (unless the participant withdraws as provided in the ESPP) and each
share of Common Stock purchased pursuant to such exercise shall, by virtue of
the Merger, and without any action on the part of the holder thereof, be
converted into the right to receive the Merger Consideration payable in respect
thereof. Any Common Stock issued pursuant to the ESPP shall be deemed issued and
outstanding at the Effective Time. The Company will offer to the participants in
the ESPP a procedure not provided for in the ESPP whereby no certificates
representing Common Stock of the Company will be issued upon exercise of the
options and after the Effective Time the holders will be entitled to receive
from the Paying Agent the Merger Consideration for each share of Common Stock
issued upon exercise of such options. Parent will make appropriate arrangements
with the Paying Agent so that participants in the ESPP who elect not to receive
stock certificates upon exercise of their options will be able to receive the
Merger Consideration to which they are entitled without the submission of stock
certificates. No offering or purchase periods under the ESPP shall be commenced
after the date hereof, no participant in the ESPP shall be permitted to increase
his or her level of participation in the ESPP after the date hereof, and the
ESPP and all purchase rights thereunder shall be terminated effective as of the
Effective Time.
(f) Registration of Parent Common Stock. Parent will prepare and file with
the United States Securities and Exchange Commission (the "SEC") a registration
statement on Form S-8 (or any successor form) under the Securities Act of 1933,
as amended, and the rules and regulations thereunder (the "Securities Act"),
with respect to the shares of Parent common stock subject to the Company Options
assumed by Parent pursuant to Section 1.5(a) and (b), and, where applicable,
will use commercially reasonable efforts to have such registration statement
become effective at or prior to the Effective Time and to maintain the
effectiveness of such registration statement covering such Company Options (and
maintain the current status of the prospectus contained therein or required
pursuant thereto) for so long as any of such Company Options remain outstanding.
SECTION 1.6 Lost Certificates. If any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if required by
the Surviving Corporation, the posting by such person of a bond, in such
reasonable amount as the Surviving Corporation may direct, as indemnity against
any claim that may be made against it with respect to such Certificate, the
Paying Agent will pay the Merger Consideration to which the holder thereof is
entitled pursuant to this Article I in exchange for such lost, stolen or
destroyed Certificate.
SECTION 1.7 Merger Closing. Subject to the satisfaction or waiver of the
conditions set forth in Article VI hereof, the closing of the Merger (the
"Closing") will take place at 10:00 a.m., California time, on the date that the
Company's stockholders vote to adopt this Agreement in accordance with the DGCL,
or as soon thereafter as, and in any event no later than the second business day
after, the conditions set forth in Article VI hereof have been satisfied or
waived, or on such other date and/or at such other time as Parent and the
Company may mutually agree. The date on which the Closing actually occurs is
referred to herein as the "Closing Date." The Closing shall take place by
telecopy exchange of signature pages with originals to follow by overnight
delivery, or in such other manner or at such place as the parties hereto may
agree. At the Closing, subject to the provisions of Article VI, Parent, Merger
Sub, and the Company shall cause the Certificate of Merger to be filed in
accordance with Section 1.1(b), and shall take any and all other lawful actions
and do any and all other lawful things necessary to cause the Merger to become
effective to the extent provided in Section 5.7.
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ARTICLE II
THE SURVIVING CORPORATION
SECTION 2.1 Certificate Of Incorporation. The Certificate of Incorporation
of the Company, as in effect immediately prior to the Effective Time, shall be
amended as of the Effective Time to read as set forth on Exhibit A to this
Agreement.
SECTION 2.2 Bylaws. The Bylaws of Merger Sub, as in effect immediately
prior to the Effective Time, shall be the Bylaws of the Surviving Corporation
until thereafter amended in accordance with applicable law, the certificate of
incorporation of such entity and the Bylaws of such entity.
SECTION 2.3 Directors. The directors of Merger Sub immediately prior to
the Effective Time shall be the directors of the Surviving Corporation until
their respective successors shall be duly elected and qualified.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except (i) as set forth in a document (the "Company Disclosure Schedule")
of even date herewith and concurrently delivered herewith, referring
specifically to the representations and warranties in this Agreement and which
identifies by section number the section of this Article III to which such
disclosure relates unless the relevance and magnitude of such disclosure to
another section of this Agreement is reasonably evident, without the need for
additional information or explanation, from the contents of the referenced
disclosure or the nature of the document in question, or (ii) as specifically
described through express disclosure of current, specific facts (excluding
statements of possibilities, potential risks or general qualifications) set
forth in the Company's Annual Report on Form 10-K for the fiscal year ended
December 29, 2000, in the Company's Quarterly Report on Form 10-Q for the
quarter ended March 30, 2001, or in the Company's 2001 Proxy Statement, to the
extent the relevancy of such disclosure to such particular representation and
warranty is readily apparent, the Company hereby makes the following
representations and warranties to Parent and Merger Sub:
SECTION 3.1 Corporate Existence And Power. The Company is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Delaware, and has all corporate powers and all governmental licenses,
authorizations, consents and approvals (collectively, "Licenses") required to
carry on its business as now conducted except for failures to have any such
License which could not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect (as defined below). The Company is
duly qualified to do business as a foreign corporation and is in good standing
in each jurisdiction where the character of the property owned, leased or
operated by it or the nature of its activities makes such qualification
necessary, except in such jurisdictions where failures to be so qualified could
not reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect. As used herein, the term "Company Material Adverse
Effect" means any change, effect, event, occurrence, state of facts or
development that is or could reasonably be expected to be materially adverse to
(i) the business (including its prospects, current products or products
identified for development), assets, financial condition or results of
operations of the Company and its Subsidiaries, taking the Company and its
Subsidiaries together as a whole; or (ii) the Company's ability to perform any
of its material obligations under this Agreement or to consummate the Merger; or
(iii) the ability of the Surviving Corporation or Parent to conduct such
business, as presently conducted or proposed to be conducted, following the
Effective Time or the ability of Parent to exercise full rights of ownership of
the Company or its assets or business, except in each case for any such change,
effect, event, occurrence, state of facts or development resulting from (i)
changes in general economic, regulatory or political conditions, or (ii) changes
in the medical device industry generally. The Company has heretofore delivered
or made available to Parent or its advisers complete and accurate copies of the
Certificate or Articles of Incorporation, Bylaws and other governing instruments
of the Company and each Subsidiary, as currently in effect, and of the
organizational documents and agreements defining the rights of the Company or
any Subsidiary with respect to any material joint ventures, partnerships or
other business in which the Company owns a less-than-100% interest. Neither the
Company nor any Subsidiary, directly or
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indirectly, owns or controls or has any equity, partnership, or other ownership
interest in any corporation, partnership, joint venture, or other business
association or entity that is material to the Company and its Subsidiaries,
considered as a whole. For purposes of this Agreement, "Subsidiary" means with
respect to any person, any corporation or other legal entity of which such
person owns, directly or indirectly, more than 50% of the outstanding stock or
other equity interests, the holders of which are entitled to vote for the
election of the board of directors or other governing body of such corporation
or other legal entity.
SECTION 3.2 Corporate Authorization.
(a) The Company has the requisite corporate power and authority to execute
and deliver this Agreement and, subject to adoption of this Agreement by the
Company's stockholders as set forth in Section 3.2(b) hereof and as contemplated
by Section 5.3 hereof, to perform its obligations hereunder. The execution and
delivery of this Agreement and the performance of its obligations hereunder have
been duly and validly authorized, and this Agreement has been unanimously
approved, by the Board of Directors and the Special Committee of the Company
originally established on May 11, 2000 by the Board of Directors and
reconstituted and reaffirmed on February 9, 2001 (as constituted from time to
time, the "Special Committee") of the Company, and no other action of the
Company's Board of Directors or the Special Committee or corporate proceedings
on the part of the Company or any Subsidiary of the Company, other than the
adoption of this Agreement by the Company's stockholders, are necessary to
authorize the execution, delivery and performance of this Agreement or to
consummate the transactions contemplated hereby. The Board of Directors of the
Company and the Special Committee have declared the advisability of this
Agreement. This Agreement has been duly executed and delivered by the Company
and constitutes, assuming due authorization, execution and delivery of this
Agreement by Parent and Merger Sub, a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, subject
to laws of general application relating to bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws affecting
creditors rights generally, and general equitable principles (whether considered
in a proceeding in equity or at law).
(b) Under applicable law, the current Certificate of Incorporation of the
Company and the rules of The Nasdaq Stock Market, the affirmative vote of the
holders of a majority of the shares of Common Stock outstanding on the record
date, established by the Board of Directors of the Company in accordance with
the Bylaws of the Company, applicable law and this Agreement, is the vote
required for the stockholders of the Company to adopt this Agreement.
SECTION 3.3 Consents And Approvals; No Violations.
(a) Neither the execution and delivery of this Agreement nor the
performance by the Company of its obligations hereunder will (i) conflict with
or result in any breach of any provision of the current Certificate of
Incorporation or the Bylaws of the Company; (ii) result in a violation or breach
of, result in the creation of any Lien on any properties or assets owned or used
by the Company or any Subsidiary pursuant to, or constitute (with or without due
notice or lapse of time or both) a default (or give rise to any right of
termination, cancellation or acceleration or obligation to repurchase, repay,
redeem or acquire or any similar right or obligation) under, any of the terms,
conditions or provisions of any note, mortgage, letter of credit, other evidence
of indebtedness, guarantee, license, lease or agreement or similar instrument or
obligation to which the Company or any of its Subsidiaries is a party or by
which any of them or any of their assets may be bound; or (iii) assuming that
the filings, registrations, notifications, authorizations, consents and
approvals referred to in subsection (b) below have been obtained or made, as the
case may be, violate any order, injunction, decree, statute, rule or regulation
of any Governmental Entity to which the Company or any of its Subsidiaries is
subject, excluding from the foregoing clauses (ii) and (iii) such requirements,
defaults, breaches, rights or violations that could not reasonably be expected
to have, individually or in the aggregate, a Company Material Adverse Effect.
(b) No filing or registration with, notification to, or authorization,
consent or approval of, any government or any agency, court, tribunal,
commission, board, bureau, department, political subdivision or other
instrumentality of any government (including any regulatory or administrative
agency), whether federal, state, multinational (including the European
Community), provincial, municipal, domestic or foreign (each, a
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"Governmental Entity") is required in connection with the execution and delivery
of this Agreement by the Company or the performance by the Company of its
obligations hereunder, except (i) the filing of the Certificate of Merger in
accordance with the DGCL and filings to maintain the good standing of the
Surviving Corporation; (ii) compliance with any applicable requirements of the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended, and the rules
and regulations thereunder (the "HSR Act"), and the antitrust, competition,
foreign investment, or similar laws of any foreign countries or supranational
commissions or boards that require pre-merger notifications or filings with
respect to the Merger (collectively, the "Foreign Merger Laws"); (iii)
compliance with any applicable requirements of the Securities Act and the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder (the "Exchange Act"); (iv) compliance with any applicable
requirements of state blue sky or takeover laws; and (v) such other consents,
approvals, orders, authorizations, notifications, registrations, declarations
and filings the failure of which to be obtained or made could not reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse
Effect.
SECTION 3.4 Capitalization. The authorized capital stock of the Company
consists of 100,000,000 shares of Common Stock, par value $0.01 per share, of
the Company (the "Common Stock") and 10,000,000 shares of preferred stock, par
value $0.01 per share, of the Company (the "Preferred Stock"). As of the date of
this Agreement, there are 64,741,816 shares of Common Stock issued and
outstanding and no shares of Preferred Stock issued or outstanding. All shares
of capital stock of the Company have been duly authorized and validly issued and
are fully paid and nonassessable and were not issued in violation of any
preemptive rights. As of the date of this Agreement, there are (i) outstanding
Options to purchase 8,943,510 shares of Common Stock, each of which Options are
listed, together with its respective exercise price, in the Company Disclosure
Schedule; (ii) rights to purchase approximately 27,379 shares of Common Stock
under the ESPP (estimated as of August 31, 2001, based on the current
contribution rates of the participants for the current offering periods in
process as of the date of this Agreement and assuming such current offering
periods are terminated on August 31, 2001 and assuming a per share purchase
price equal to 85% of the market price of the Common Stock on May 15, 2001 for
this purpose); (iii) rights declared as a dividend in connection with the Rights
Agreement, dated as of May 23, 1995 and as amended effective May 1, 1999,
between the Company and ▇▇▇▇▇▇ Trust of California (the "Rights Plan"); and (iv)
rights to acquire approximately 35,144 shares of Common Stock under the
Company's Non-Employee Directors Deferred Stock Units Plan. Except as set forth
in this Section 3.4, there are outstanding (v) no shares of capital stock or
other voting securities of the Company, (vi) no securities of the Company or any
Subsidiary of the Company convertible into or exchangeable for shares of capital
stock or voting securities of the Company and (vii) no options or other rights
to acquire from the Company, and no obligation of the Company to issue, any
capital stock, voting securities or securities convertible into or exchangeable
for capital stock or voting securities of the Company (the items in clauses (v),
(vi) and (vii) being referred to collectively as the "Company Securities"). To
the knowledge of the Company, as of the date of this Agreement, there are not
any agreements that relate to the voting or control of Company Securities. There
are no outstanding obligations of the Company or any of its Subsidiaries to
repurchase, redeem or otherwise acquire any Company Securities. No Subsidiary of
the Company owns any capital stock or other voting securities of the Company.
Schedule 3.4 of the Company Disclosure Schedule sets forth a complete and
accurate list of all stock options, warrants, and other rights to acquire Common
Stock (other than rights outstanding under the Rights Plan), including the name
of the holder, the date of grant, acquisition price, number of shares,
exercisability schedule, termination date, and, in the case of options, the type
of option under the Code. No consent of holders of any such rights, including
participants under the Company's Option Plans or the ESPP, is required to carry
out the provisions of Section 1.5. All actions, if any, required to allow for
the treatment of Company Options, Units and the ESPP as is provided in Section
1.5 have been, or prior to the Closing will be, validly taken by the Company. In
no event will the aggregate number of shares of Common Stock outstanding at the
Effective Time (including all shares subject to then outstanding Company Options
or other rights to acquire or commitments to issue shares of Company stock)
exceed the sum of the outstanding shares of Company Common Stock described in
the first sentence of this Section 3.4, plus any shares of Company Common Stock
issued upon the exercise of outstanding options to purchase Company Common Stock
identified in this Section 3.4, plus any shares of
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Company Common Stock issued by the Company in connection with the Units, plus
any shares of Company Common Stock issued by the Company upon exercise of rights
under the ESPP.
SECTION 3.5 Subsidiaries.
(a) Each Subsidiary of the Company (i) is a corporation duly incorporated,
validly existing and in good standing under the laws of its jurisdiction of
incorporation, (ii) has all corporate powers and all material Licenses required
to carry on its business as now conducted, and (iii) is duly qualified to do
business as a foreign corporation and is in good standing in each jurisdiction
where the character of the property owned or leased by it or the nature of its
activities makes such qualification necessary, except for failures of this
representation and warranty to be true which could not reasonably be expected to
have, individually or in the aggregate, a Company Material Adverse Effect. All
Subsidiaries of the Company and their respective jurisdictions of incorporation
are identified in Schedule 3.5 of the Company Disclosure Schedule.
(b) All of the outstanding shares of capital stock of each Subsidiary of
the Company are duly authorized, validly issued, fully paid and nonassessable,
and such shares are owned by the Company or by a Subsidiary of the Company
(other than, if necessary, shares constituting directors' qualifying shares or
similar shares and shares required to be owned by citizens of such subsidiary's
jurisdiction of organization) free and clear of any Liens (as defined hereafter)
or limitations on voting rights. There are no subscriptions, options, warrants,
calls, rights, convertible securities or other agreements or commitments of any
character relating to the issuance, transfer, sale, delivery, voting or
redemption (including any rights of conversion or exchange under any outstanding
security or other instrument) for any of the capital stock or other equity
interests of any of such Subsidiaries. There are no agreements requiring the
Company or any of its Subsidiaries to make contributions to the capital of, or
lend or advance funds to, any Subsidiaries of the Company. For purposes of this
Agreement, "Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest, assessment, claim, third party interest or
encumbrance of any kind in respect of such asset.
SECTION 3.6 SEC Documents. Since December 31, 1998, the Company has filed
all required reports, proxy statements, registration statements, forms and other
documents required to be filed with the SEC (the "Company SEC Documents"). As of
their respective dates, and giving effect to any amendments thereto, (a) the
Company SEC Documents complied in all material respects with the requirements of
the Securities Act or the Exchange Act, as the case may be, and the applicable
rules and regulations of the SEC promulgated thereunder and (b) none of the
Company SEC Documents contained any untrue statement of a material fact or
omitted 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.
SECTION 3.7 Financial Statements. The financial statements of the Company
(including, in each case, any notes and schedules thereto) included in the
Company SEC Documents (a) were prepared from the books and records of the
Company and its Subsidiaries, (b) comply as to form in all material respects
with all applicable accounting requirements and the rules and regulations of the
SEC with respect thereto, (c) are in conformity with United States generally
accepted accounting principles ("GAAP"), applied on a consistent basis (except
in the case of unaudited statements, as permitted by Form 10-Q as filed with the
SEC under the Exchange Act) during the periods involved and (d) fairly present,
in all material respects, the consolidated financial position of the Company and
its consolidated Subsidiaries as of the dates thereof and the consolidated
results of their operations and cash flows for the periods then ended (subject,
in the case of unaudited statements, to normal year-end audit adjustments which
were not and are not expected to be, individually or in the aggregate, material
in amount). The statements of earnings included in the audited or unaudited
interim financial statements in the Company SEC Documents do not contain any
material items of special or nonrecurring income or any other income not earned
in the ordinary course of business required to be disclosed separately in
accordance with GAAP, except as expressly specified in the applicable statement
of operations or notes thereto.
SECTION 3.8 Absence Of Undisclosed Liabilities. Neither the Company nor
any of its Subsidiaries has any liabilities or obligations of any nature
(whether accrued, absolute, contingent or otherwise) except (i) liabilities or
obligations that are accrued or reserved against in the audited consolidated
balance sheet of the Company as of December 29, 2000 contained in the Company's
Annual Report on Form 10-K for the
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fiscal year ended December 29, 2000 (the "Company Audited Balance Sheet") or in
the unaudited consolidated balance sheet of the Company as of March 30, 2001
contained in the Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended March 30, 2001 (the "Company Interim Balance Sheet") or referred to in the
notes thereto; (ii) liabilities or obligations incurred in the ordinary course
of business and of a type and in an amount consistent with past practice, since
March 30, 2001; and (iii) liabilities or obligations that could not reasonably
be expected to have, individually or in the aggregate, a Company Material
Adverse Effect.
SECTION 3.9 Proxy Statement. None of the information contained in the
proxy statement to be filed with the SEC by the Company pursuant to Section 5.3
hereof (the "Proxy Statement") will, as of the date mailed to the stockholders
of the Company, as of the time of the stockholders meeting of the Company (the
"Company Stockholders' Meeting") in connection with the transactions
contemplated hereby and as of the Effective Time, 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 Proxy Statement
will comply as to form in all material respects with the provisions of the
Exchange Act and the rules and regulations promulgated by the SEC thereunder.
Notwithstanding the foregoing, the Company makes no representation or warranty
with respect to any information supplied by Parent or Merger Sub for inclusion
in the Proxy Statement.
SECTION 3.10 Absence Of Material Adverse Changes, Etc. Since December 29,
2000, there has not been any change, effect, event, occurrence, state of facts
or development known to the Company that, individually or in the aggregate, has
had or could reasonably be expected to have a Company Material Adverse Effect.
Without limiting the foregoing, since December 29, 2000, and except as permitted
by Section 5.1, (i) the Company and its Subsidiaries have conducted their
business in the ordinary course of business and consistent with past practice
and (ii) there has not been:
(a) any declaration, setting aside or payment of any dividend or other
distribution with respect to any shares of capital stock of the Company, or
any repurchase, redemption or other acquisition by the Company or any
Subsidiary (other than any wholly-owned Subsidiary) of the Company of any
outstanding shares of capital stock or other equity securities of, or other
ownership interests in, the Company or of any Company Securities;
(b) any amendment of any provision of the Certificate of Incorporation
or Bylaws of, or of any material term of any outstanding security issued
by, the Company or any Subsidiary (other than any wholly-owned Subsidiary)
of the Company;
(c) any incurrence, assumption or guarantee by the Company or any
Subsidiary of the Company of any indebtedness for borrowed money other than
borrowings under existing short term credit facilities;
(d) any change in any method of accounting or accounting practice by
the Company or any Subsidiary of the Company, except for any such change
required by reason of a change in GAAP and concurred with by the Company's
independent public accountants;
(e) any (i) grant of any severance or termination pay to any director,
officer or employee of the Company or any Subsidiary of the Company, (ii)
employment, deferred compensation or other similar agreement entered into
with (or any amendment to any such existing agreement) any director,
officer or employee of the Company or any Subsidiary of the Company, (iii)
increase in benefits payable under any existing severance or termination
pay policies or employment agreements, or (iv) increase in compensation,
bonus or other benefits payable to directors, officers or employees of the
Company or any Subsidiary of the Company, in each case other than in the
ordinary course of business and consistent with past practice;
(f) issuance of Company Securities other than (i) pursuant to Company
Options outstanding as of December 29, 2000 and the issuance of Company
Options after such date in the ordinary course of business and consistent
with past practice (and the issuance of Company Securities pursuant
thereto), (ii) shares of Common Stock issued pursuant to the ESPP, (iii)
Units issued under the Non-Employee
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Director Deferred Stock Units Plan; and (iv) corresponding issuances of
rights pursuant to the Rights Plan;
(g) acquisition or disposition of assets material to the Company and
its Subsidiaries, except for sales of inventory in the ordinary course of
business consistent with past practice, or any acquisition or disposition
of capital stock of any third party (other than acquisitions or
dispositions of non-controlling equity interests of third parties in the
ordinary course of business) or any merger or consolidation with any third
party, by the Company or any Subsidiary of the Company;
(h) entry by the Company into any joint venture, partnership or
similar agreement with any person other than a wholly-owned Subsidiary of
the Company; or
(i) any authorization of, or commitment or agreement to take any of,
the foregoing actions except as otherwise permitted by this Agreement.
SECTION 3.11 Taxes.
(a)(1) All federal, state, local and foreign Tax Returns (as defined below)
required to be filed by or on behalf of the Company, each of its Subsidiaries,
and each affiliated, combined, consolidated or unitary group of which the
Company or any of its Subsidiaries is a member (a "Company Group") have been
timely filed, and all returns filed are complete and accurate except to the
extent any failure to file or any inaccuracies in filed returns could not
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect; (2) all Taxes (as defined below) due and owing by the
Company, any Subsidiary of the Company or any Company Group have been paid, and
all Taxes that have accrued but which are not yet due and owing have been
adequately reserved for in the Company Audited Balance Sheet or the Company
Interim Balance Sheet in accordance with GAAP, except to the extent any failure
to pay or reserve could not reasonably be expected to have, individually or in
the aggregate, a Company Material Adverse Effect and except with respect to
Taxes arising in the ordinary course of business after the date of the Company
Interim Balance Sheet; (3) there is no presently pending or, to the knowledge of
the Company, contemplated or scheduled audit examination, deficiency, refund
litigation, proposed adjustment or matter in controversy with respect to any
Taxes due and owing by the Company, any Subsidiary of the Company or any Company
Group; (4) neither the Company nor any Subsidiary of the Company has filed any
waiver of the statute of limitations applicable to the assessment or collection
of any Tax; (5) all assessments for Taxes due and owing by the Company, any
Subsidiary of the Company or any Company Group with respect to completed and
settled examinations or concluded litigation have been paid, except for
assessments the failure of which to pay could not reasonably be expected to
have, individually or in the aggregate, a Company Material Adverse Effect; (6)
neither the Company nor any Subsidiary of the Company is a party to any tax
indemnity agreement, tax sharing agreement or other agreement under which the
Company or any Subsidiary of the Company could become liable to another person
as a result of the imposition of a Tax upon any person, or the assessment or
collection of such a Tax; (7) the Company and each of its Subsidiaries has
complied with all rules and regulations relating to the withholding of Taxes,
except where the failure to be in compliance could not reasonably be expected to
have, individually or in the aggregate, a Company Material Adverse Effect; (8)
neither the Company, any Subsidiary of the Company, nor any Company Group member
is a party to any agreement, contract, arrangement or plan that has resulted or
would result, individually or in the aggregate, in connection with this
Agreement or any change of control of the Company, any Subsidiary of the
Company, or any Company Group member in the payment of any "excess parachute
payments" within the meaning of Section 280G of the Code; and (9) neither the
Company, any Subsidiary of the Company, nor any Company Group Member has made
any payments since December 29, 2000, and is not a party to an agreement that
could require it to make any payments (including any deemed payment of
compensation upon exercise of an option), that would not be fully deductible by
reason of Section 162(m) of the Code.
(b) For purposes of this Agreement, (i) "Taxes" means all taxes, levies or
other like assessments, charges or fees (including estimated taxes, charges and
fees), including income, corporation, advance corporation, gross receipts,
transfer, excise, property, sales, use, value-added, license, payroll,
withholding, social security and franchise or other governmental taxes or
charges, imposed by the United States or any state, county, local or foreign
government or subdivision or agency thereof, and such term shall include any
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interest, penalties or additions to tax attributable to such taxes and (ii) "Tax
Return" means any report, return, statement or other written information
required to be supplied to a taxing authority in connection with Taxes.
SECTION 3.12 Employee Benefit Plans.
(a) Except for any plan, fund, program, agreement or arrangement that is
subject to the laws of any jurisdiction outside the United States, Schedule
3.12(a) of the Company Disclosure Schedule contains a true and complete list of
each deferred compensation, incentive compensation, and equity compensation
plan; each "welfare" plan, fund or program (within the meaning of Section 3(1)
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"));
each "pension" plan, fund or program (within the meaning of Section 3(2) of
ERISA); each employment, termination or severance agreement; and each other
employee benefit plan, fund, program, agreement or arrangement that is
sponsored, maintained or contributed to or required to be contributed to by the
Company, any Subsidiary of the Company, or by any trade or business, whether or
not incorporated (each, an "ERISA Affiliate"), that together with the Company
would be deemed a "single employer" within the meaning of Section 4001(b) of
ERISA, or to which the Company, any Subsidiary of the Company, or an ERISA
Affiliate is party, whether written or oral, for the benefit of any employee,
consultant, director or former employee, consultant or director of the Company
or any Subsidiary of the Company. The plans, funds, programs, agreements and
arrangements listed on Schedule 3.12(a) of the Company Disclosure Schedule are
referred to herein collectively as the "Plans."
(b) With respect to each Plan, the Company has heretofore delivered or made
available to Parent true and complete copies of the Plan and any amendments
thereto (or if the Plan is not a written Plan, a description thereof), any
related trust or other funding vehicle, the most recent reports or summaries
required under ERISA or the Code and the most recent determination letter
received from the Internal Revenue Service with respect to each Plan intended to
qualify under Section 401 of the Code.
(c) No liability under Title IV or Section 302 of ERISA or Section 412 of
the Code has been incurred by the Company or any ERISA Affiliate that has not
been satisfied in full, other than liability for premiums due the Pension
Benefit Guaranty Corporation (which premiums have been paid when due).
(d) No Plan is a "multiemployer plan," as defined in Section 3(37) of
ERISA, nor is any Plan a plan described in Section 4063(a) of ERISA. Neither the
Company nor any ERISA Affiliate maintains, participates in, contributes to, or
has any obligation to contribute or any liability with respect to any multiple
employer or multiemployer plan, or has had any obligation with respect to such a
plan.
(e) Each Plan has been operated and administered in all material respects
in accordance with its terms and applicable law, including ERISA and the Code.
(f) Each Plan intended to be "qualified" within the meaning of Section
401(a) of the Code has received a favorable determination letter from the
Internal Revenue Service, or in the case of such a Plan for which a favorable
determination letter has not yet been received, the applicable remedial
amendment period under Section 401(b) of the Code has not expired.
(g) No Plan provides medical, surgical, hospitalization, death or similar
benefits (whether or not insured) for employees or former employees of the
Company or any Subsidiary for periods extending beyond their retirement or other
termination of service, other than (i) coverage mandated by applicable law, (ii)
death benefits under any "pension plan," or (iii) benefits the full cost of
which is borne by the current or former employee (or his or her beneficiary),
dependant or other covered person.
(h) There are no pending, or to the knowledge of the Company, threatened or
anticipated, claims that could reasonably be expected to have, individually or
in the aggregate, a Company Material Adverse Effect by or on behalf of any Plan,
or by any employee or beneficiary covered under any such Plan (other than
routine claims for benefits). No event has occurred and, to the knowledge of the
Company, there exists no condition or set of circumstances in connection with
which the Company or any of its Subsidiaries would be subject to any liability
under the terms of such Plans (other than the payment of benefits thereunder),
ERISA, the Code
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or any other applicable law that could reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect.
(i) The consummation of the transactions contemplated by this Agreement
will not, either alone or in combination with another event, (i) entitle any
current or former employee or officer of the Company or any ERISA Affiliate to
severance pay, unemployment compensation or any other payment, except as
expressly provided in this Agreement, or (ii) accelerate the time of payment or
vesting, or increase the amount of compensation due any such employee or
officer, other than payments, accelerations or increases (x) under any employee
benefit plan that is subject to the laws of a jurisdiction outside of the United
States or (y) mandated by applicable law or the terms of the Plans.
(j) No amounts payable under the Plans will fail to be deductible for
federal income tax purposes by virtue of Section 280G of the Code.
(k) To the knowledge of the Company, all employee benefit plans that are
subject to the laws of any jurisdiction outside the United States are in
material compliance with such applicable laws, including relevant Tax laws, and
the requirements of any trust deed under which they were established, except for
such exceptions to the foregoing which, in the aggregate, could not reasonably
be expected to have, individually or in the aggregate, a Company Material
Adverse Effect. Schedule 3.12(k) lists all material employee pension benefit
plans that are subject to the laws of any jurisdiction outside the United
States.
(l) Each Plan can be amended prospectively or terminated at any time,
without advance notice, and without any liability other than for benefits
accrued prior to such amendment or termination (other than administrative
charges normally incurred in a plan termination).
(m) No agreement, commitment, or obligation exists to increase any benefits
under any Plan or to adopt any new Plan.
(n) No Plan has any unfunded accrued benefits that are not fully reflected
in the Company Audited Balance Sheet.
(o) No pension plan subject to Title IV of ERISA (an "ERISA Pension Plan")
has incurred any "accumulated funding deficiency" or "waived funding deficiency"
within the meaning of Section 302 of ERISA or Section 412 of the Code and
neither the Company nor any Subsidiary of the Company has ever sought to obtain
any variance from the minimum funding standards pursuant to Section 412(d) of
the Code. The funding method used in connection with each ERISA Pension Plan
meets the requirements of ERISA and the Code and the actuarial assumptions used
in connection with each such plan are reasonable, given the experience of such
ERISA Pension Plan and reasonable expectations.
(p) The fair market value of the plan assets of each ERISA Pension Plan are
at least equal to (i) the present value of its benefit liabilities (as defined
in ERISA Section 4001(a)(16)), including any unpredictable contingent event
benefits within the meaning of Code Section 412(l)(7), and determined on the
basis of assumptions prescribed by the PBGC for purposes of ERISA Section 4044),
and (ii) the Projected Benefit Obligations thereunder, as defined in Statement
of Financial Accounting Standards No. 87, including any allowance for indexation
and ad hoc increases. No ERISA Pension Plan has been completely or partially
terminated or been the subject of a Reportable Event under ERISA Section 4043.
No proceeding by the PBGC to terminate any ERISA Pension Plan has been
instituted, and neither the Company nor any Subsidiary of the Company has
incurred any liability to the PBGC (other than the PBGC premiums, all of which
have been timely paid) or otherwise under Title IV of ERISA with respect to any
ERISA Pension Plan.
(q) Neither the Company nor any Subsidiary of the Company maintains or
participates in any Voluntary Employees' Beneficiary Association, under Code
Sections 419 and 419A, which is intended to be exempt from taxation under
section 501(c)(9) of the Code.
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SECTION 3.13 Litigation; Compliance With Laws.
(a) There is no claim, action, suit, proceeding or, to the knowledge of the
Company, investigation or review of any kind pending, or to the knowledge of the
Company, threatened against the Company or any Subsidiary of the Company or any
of their respective properties or any of their respective officers or directors
in their capacity as officers or directors of the Company or of any Subsidiary
of the Company which could reasonably be expected to have, individually or in
the aggregate, a Company Material Adverse Effect.
(b) Neither the Company nor any Subsidiary of the Company is in default or
violation of any applicable federal, state, local, or foreign laws, ordinances,
regulations, interpretations, judgments, decrees, injunctions, permits,
licenses, certificates, governmental requirements, orders, or other
promulgations, of any court or other Governmental Entity (and including those of
any nongovernmental self-regulatory agency and including environmental laws or
regulations), except for such defaults or violations that could not reasonably
be expected to have, individually or in the aggregate, a Company Material
Adverse Effect. The Company and each Subsidiary of the Company has timely filed
or otherwise provided all registrations, reports, data, and other information
and applications with respect to its medical device, pharmaceutical, consumer,
health care, and other governmentally regulated products (the "Regulated
Products") required to be filed with or otherwise provided to the FDA or any
other Governmental Entity with jurisdiction over the manufacture, use, or sale
of the Regulated Products, has complied with all applicable requirements of the
FDA or other Governmental Entity with respect to the Regulated Products, and all
regulatory licenses or approvals in respect thereof are in full force and
effect, except where the failure to file timely such registrations, reports,
data, information, and applications or to be in compliance or the failure to
have such licenses and approvals in full force and effect could not reasonably
be expected to have, individually or in the aggregate, a Company Material
Adverse Effect. All documentation, correspondence, reports, data, analyses and
certifications relating to or regarding any medical devices of the Company or
any Subsidiary of the Company, filed with or delivered by or on behalf of the
Company or any Subsidiary of the Company to any Governmental Entity was in all
material respects true and accurate when so filed or delivered and, to the
knowledge of the Company, remains true and accurate. All governmental approvals,
permits and licenses (collectively, "Permits") required to conduct the business
of the Company and its Subsidiaries as it is currently being conducted have been
obtained, are in full force and effect and are being complied with, except where
such failure could not reasonably be expected to have a Company Material Adverse
Effect.
SECTION 3.14 Labor Matters. (i) There is no labor strike, dispute,
slowdown, stoppage or lockout actually pending or, to the knowledge of the
Company, threatened against the Company or any Subsidiary of the Company; (ii)
to the knowledge of the Company, no union organizing campaign with respect to
employees of the Company or any Subsidiary of the Company is underway; (iii)
there is no unfair labor practice charge or complaint against the Company or any
Subsidiary of the Company pending or, to the knowledge of the Company,
threatened before the National Labor Relations Board or any similar state or
foreign agency; (iv) there is no written grievance pending relating to any
collective bargaining agreement or other grievance procedure to which the
Company or any Subsidiary of the Company is a party or subject; (v) to the
knowledge of the Company, no charges with respect to or relating to the Company
or any Subsidiary of the Company are pending before the Equal Employment
Opportunity Commission or any other agency responsible for the prevention of
unlawful employment practices; and (vi) there are no collective bargaining
agreements with any union covering employees of the Company or any Subsidiary of
the Company, except for such exceptions to the foregoing clauses (i) through
(vi) which could not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect.
SECTION 3.15 Certain Contracts And Arrangements. Schedule 3.15 of the
Company Disclosure Schedule lists, and the Company has heretofore furnished to
Parent complete and accurate copies of (or, if oral, the Company Disclosure
Schedule states all material provisions of), (a) every employment, material
consulting, severance or change of control agreement or arrangement for the
benefit of any director, officer, employee, other person or stockholder of the
Company or any Subsidiary of the Company or any affiliate thereof in effect as
of the date of this Agreement to which the Company or any Subsidiary of the
Company is a party or by which the Company or any Subsidiary of the Company or
any of their properties or assets is bound, (b) every material contract with
physicians, scientific advisory board members or material consultants in
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effect as of the date of this Agreement to which the Company or any Subsidiary
of the Company is a party or by which the Company or any Subsidiary of the
Company or any of their properties or assets is bound, and (c) every contract,
agreement, or understanding to which the Company or any Subsidiary of the
Company is a party that would reasonably be expected to involve payments by or
to the Company or any Subsidiary of the Company in excess of $500,000 during the
Company's current 2001 fiscal year, or the absence or performance of which could
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect, or that is material and was not made in the ordinary
course of business. Each material contract or agreement to which the Company or
any Subsidiary of the Company is a party or by which any of them is bound is in
full force and effect, and neither the Company nor any Subsidiary of the
Company, nor, to the knowledge of the Company, any other party thereto, is in
breach of, or default under, any material contract or material agreement to
which the Company or any Subsidiary of the Company is a party or by which any of
them is bound, and no event has occurred that with notice or passage of time or
both would constitute such a breach or default thereunder by the Company or any
Subsidiary of the Company, or, to the knowledge of the Company, any other party
thereto, except for such breaches and defaults which could not reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse
Effect. As of the date of this Agreement, neither the Company nor any Subsidiary
of the Company is a party to any contract, plan, agreement, understanding,
arrangement or obligation (i) that restricts the ability of the Company or any
Subsidiary of the Company, or after the Merger would restrict the Surviving
Corporation's or Parent's ability, to conduct any line of business, (ii) that
imposes on the Company or any Subsidiary of the Company material obligations
(including to pay material milestone payments or material license fees) not
reflected in the Company Audited Balance Sheet, or (iii) that would be required
to be filed with the SEC in a filing to which paragraph (b)(10) of Item 601 of
Regulation S-K of the Rules and Regulations of the SEC is applicable, which has
not been so filed.
SECTION 3.16 Environmental Matters.
(a)(i) "Cleanup" means all actions required to: (A) cleanup, remove, treat
or remediate Hazardous Materials (as defined hereafter) in the indoor or outdoor
environment; (B) prevent the Release (as defined hereafter) of Hazardous
Materials so that they do not migrate, endanger or threaten to endanger public
health or welfare or the indoor or outdoor environment; (C) perform pre-remedial
studies and investigations and post-remedial monitoring and care; or (D) respond
to any government requests for information or documents in any way relating to
cleanup, removal, treatment or remediation or potential cleanup, removal,
treatment or remediation of Hazardous Materials in the indoor or outdoor
environment.
(ii) "Environmental Claim" means any claim, action, cause of action,
investigation or written notice by any person alleging potential liability
(including potential liability for investigatory costs, Cleanup costs,
governmental response costs, natural resources damages, property damages,
personal injuries, or penalties) arising out of, based on or resulting from (A)
the presence or Release of any Hazardous Materials at any location, whether or
not owned or operated by the Company or any of its Subsidiaries or (B)
circumstances forming the basis of any violation of any Environmental Law (as
defined hereafter).
(iii) "Environmental Laws" means all federal, state, local and foreign
laws, statutes, decisions, orders, decrees, rules, regulations or requirements
relating to pollution or protection of the environment, human health or safety
or natural resources, including laws, statutes, decisions, orders, decrees,
rules, regulations or requirements relating to the presence, Release or
threatened Release, manufacture, processing, distribution, use, treatment,
storage, transport or handling of Hazardous Materials or to noise, odor, indoor
air quality or employee exposure to Hazardous Materials.
(iv) "Hazardous Materials" means asbestos, urea formaldehyde,
polychlorinated biphenyls, nuclear fuel or materials, chemical waste,
radioactive materials, lead-containing paint, asbestos-containing materials,
explosives, known carcinogens, petroleum products or by-products, pesticides,
fertilizers, or other substance which is toxic or hazardous, or which is a
pollutant, contaminant, chemical, material or substance defined as hazardous or
as a pollutant or contaminant in, or the use, transportation, storage, Release
or disposal of which is regulated by, any Environmental Laws.
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(v) "Release" means any release, spill, emission, discharge, leaking,
pumping, injection, deposit, disposal, dispersal, leaching or migration into the
environment (including ambient air, surface water, groundwater and surface or
subsurface strata) or into or out of any property, including the movement of
Hazardous Materials through or in the air, soil, surface water, groundwater or
property.
(b)(i) To the knowledge of the Company, the Company and its Subsidiaries
have at all times been and are in compliance with all applicable Environmental
Laws (which compliance includes, but is not limited to, the possession by the
Company and its Subsidiaries of all permits and other governmental
authorizations required under applicable Environmental Laws, and compliance with
the terms and conditions thereof), except where failures to be in compliance
could not reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect. Since inception, neither the Company nor any of
its Subsidiaries has received any written communication from a Governmental
Entity, citizens' group, employee or otherwise, alleging that the Company or any
of its Subsidiaries is not in such compliance, except where failure to be in
compliance could not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect.
(ii) To the knowledge of the Company, there is no Environmental Claim
pending or, to the knowledge of the Company, threatened against the Company or
any of its Subsidiaries or against any person whose liability for any
Environmental Claim the Company or any of its Subsidiaries has or may have
retained or assumed either contractually or by operation of law that could
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect.
(iii) To the knowledge of the Company, there are no present or past
actions, activities, circumstances, conditions, events or incidents, including
the Release or presence of any Hazardous Material, that could form the basis of
any Environmental Claim against the Company or any of its Subsidiaries or
against any person whose liability for any Environmental Claim the Company or
any of its Subsidiaries has or may have retained or assumed either contractually
or by operation of law that could reasonably be expected to have, individually
or in the aggregate, a Company Material Adverse Effect.
(iv) The Company agrees to cooperate with Parent to effect the retention of
any permits or other governmental authorizations under Environmental Laws that
will be required to permit the Company and its Subsidiaries to conduct the
business as conducted by the Company and its Subsidiaries immediately prior to
the Closing Date.
(v) The Company has made available to Parent all assessments, audits,
investigations, and sampling or similar reports in the possession of the Company
or its Subsidiaries relating to health and safety, the environment, any Release
of Hazardous Materials, or Environmental Costs and Liabilities.
SECTION 3.17 Intellectual Property.
(a) To the Company's knowledge, the Company and its Subsidiaries own, free
and clear of any Lien, or are licensed to use all Intellectual Property (as
defined hereafter) reasonably necessary for the Company and its Subsidiaries to
conduct their business as it is currently conducted or as proposed to be
conducted (the "Company Intellectual Property"), except as could not reasonably
be expected to have a Company Material Adverse Effect. Schedule 3.17(a) of the
Company Disclosure Schedule contains a complete and accurate list of all
patents, trademarks, trade names, service marks, copyrights, and all
applications for and registrations of any of the foregoing included in the
Company Intellectual Property.
(b)(i) All of the registrations relating to Company Intellectual Property
are subsisting and unexpired, and have not been abandoned, except as set forth
in Schedule 3.17(a) or as could not reasonably be expected to have a Company
Material Adverse Effect; (ii) to the knowledge of the Company, neither the use
of the Company Intellectual Property by the Company or any Subsidiary of the
Company in the present or proposed conduct of its business, nor the manufacture,
marketing, distribution, use or sale of any current product or service of the
Company or any Subsidiary of the Company or any product or service identified
for development by the Company or its Subsidiaries, infringes on the valid
Intellectual Property rights of any person; (iii) to the knowledge of the
Company, no judgment, decree, injunction, rule or order has been rendered by any
Governmental Entity which would limit, cancel or question the validity of any
Company Intellectual Property,
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or the Company's or its Subsidiaries' rights in and to any Company Intellectual
Property, in any respect that could reasonably be expected to have, individually
or in the aggregate, a Company Material Adverse Effect; and (iv) neither the
Company nor any Subsidiary of the Company has received notice of any pending or
threatened suit, action or adversarial proceeding that seeks to limit, cancel or
question the validity of any Company Intellectual Property, or the Company's or
its Subsidiaries' rights in and to any Company Intellectual Property, which
could reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect.
(c) For purposes of this Agreement "Intellectual Property" shall mean all
rights, privileges and priorities provided under U.S., state and foreign law
relating to intellectual property, including all (x)(1) proprietary inventions,
discoveries, processes, formulae, designs, methods, techniques, procedures,
concepts, developments, technology, new and useful improvements thereof and
proprietary know-how relating thereto, whether or not patented or eligible for
patent protection; (2) copyrights and copyrightable works, including computer
applications, programs, software, databases and related items; (3) trademarks,
service marks, trade names, and trade dress, the goodwill of any business
symbolized thereby, and all common-law rights relating thereto; (4) trade
secrets and other confidential information; (y) all registrations, applications,
and recordings for, and amendments, modifications and improvements to any of the
foregoing and (z) licenses or other similar agreements granting to the Company
or any of its Subsidiaries the rights to use any of the foregoing.
(d) To the knowledge of the Company, neither the Company nor any Subsidiary
of the Company has used or made use of any confidential or proprietary
information or trade secrets of any other person in breach of any agreement to
which the Company or any Subsidiary of the Company is subject or in violation of
any civil or criminal law, except as could not reasonably be expected to have a
Company Material Adverse Effect.
(e) The Company and each Subsidiary of the Company has taken commercially
reasonable security measures to protect the secrecy, confidentiality and value
of its trade secrets, except as could not reasonably be expected to have a
Company Material Adverse Effect.
(f) To the knowledge of the Company, all employees of the Company and each
Subsidiary of the Company have executed written agreements with the Company or
such Subsidiary that assign to the Company or such Subsidiary all rights to
inventions improvements, discoveries or information relating to the business of
the Company or such Subsidiary. To the Company's knowledge, no employee of the
Company or any Subsidiary of the Company has entered into any agreement that
restricts or limits in any way the scope or type of work in which the employee
may be engaged or requires the employee to transfer, assign or disclose any
Intellectual Property or information concerning the employee's work to anyone
other than the Company or such Subsidiary, except as could not reasonably be
expected to have a Company Material Adverse Effect.
SECTION 3.18 Opinion Of Financial Advisor. The Board of Directors of the
Company and the Special Committee have received the opinion of UBS Warburg LLC
that the Merger Consideration is fair from a financial point of view to the
holders of Common Stock. The Company will promptly after receipt of the written
opinion deliver a true and complete copy of such opinion to Parent for
informational purposes only.
SECTION 3.19 Board Recommendation. The Board of Directors of the Company
and the Special Committee, at meetings duly called and held, have each
unanimously approved this Agreement, the Agreements to Facilitate Merger and the
transactions contemplated hereby and thereby and (i) determined that this
Agreement and the transactions contemplated hereby, including the Merger, taken
together are fair to and in the best interests of the stockholders of the
Company; and (ii) resolved to recommend that the stockholders of the Company
adopt this Agreement.
SECTION 3.20 Finders' Fees. No act of the Company or any Subsidiary of the
Company has given or will give rise to any claim against any of the parties
hereto for a brokerage commission, finder's fee, or other like payment in
connection with the transactions contemplated herein, except payments in the
amounts specified in the Company Disclosure Schedule to those parties identified
thereon who have acted as a finder for the Company or have been retained by the
Company as financial advisors pursuant to the agreements or other documents
described in the Company Disclosure Schedule, copies of which have been provided
or made available to Parent or its advisors prior to the date of this Agreement.
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SECTION 3.21 Officers, Directors and Employees. Prior to the date hereof,
the Company has provided to Parent a list that, in all material respects,
completely and accurately sets forth the name, title and current annual salary
rate of each employee of the Company or of any Subsidiary of the Company,
together with a summary of the bonuses, commissions, additional compensation,
and other like cash benefits, if any, paid or payable to such persons for the
last fiscal year and proposed for the current fiscal year. Schedule 3.21 of the
Company Disclosure Schedule completely and accurately sets forth (i) the names
of all former officers of the Company or of any Subsidiary of the Company whose
employment with the Company or such Subsidiary has terminated either voluntarily
or involuntarily during the preceding 12-month period; and (ii) the names of the
officers (with all positions and titles indicated) and directors of the Company
and of each Subsidiary of the Company.
SECTION 3.22 Section 203 of DGCL. The Board of Directors of the Company
and the Special Committee has approved this Agreement, the Agreements to
Facilitate Merger, and the transactions contemplated hereby and thereby and have
taken such other actions so that neither the restrictions on "business
combinations" (as defined in Section 203 of the DGCL) as set forth in Section
203 of the DGCL nor the provisions of any other "fair price," "moratorium,"
"control share acquisition," or other similar anti-takeover statute or
regulation nor the provisions of any applicable anti-takeover provisions in the
Certificate of Incorporation or Bylaws of the Company will apply to this
Agreement, the Agreements to Facilitate Merger, or any of the transactions
contemplated hereby or thereby.
SECTION 3.23 Rights Plan. The Company has taken all action (including, if
required, amendment of the outstanding preferred share purchase rights issued
pursuant to the Rights Plan) so that the entering into of this Agreement and the
Agreements to Facilitate Merger, and the consummation of the transactions
contemplated hereby and thereby do not and will not result in the grant of any
rights to any person under the Rights Plan or enable the rights to purchase the
Company's Series B Junior Participating Cumulative Preferred Stock to be
exercised, or require that they be separated, distributed or triggered, and so
that as of the Effective Time such rights shall, without any payment by the
Company or Parent, expire with neither the Company nor Parent having any
obligations under, and no person having any rights under, the Rights Plan,
except for the payment of fees and expenses and indemnification to which the
Rights Agent is entitled under the Rights Plan. The Company has furnished Parent
with true and correct copies of all such actions.
SECTION 3.24 Merger Filings. The information as to the Company or any of
its affiliates or stockholders included in the Company's filing, or submitted to
Parent and Merger Sub for inclusion in their filing, if any, required to be
submitted under the HSR Act or under any Foreign Merger Laws shall be true,
correct, and complete in all material respects and shall comply in all material
respects with the applicable requirements of the HSR Act, the rules and
regulations issued by the Federal Trade Commission pursuant thereto, and Foreign
Merger Laws.
SECTION 3.25 Transactions with Related Parties. There are no existing
contracts, agreements, business dealings, arrangements or other understandings
between (a) the Company or any Subsidiary of the Company, and (b) any officer,
director or beneficial owner of more than 5% of the outstanding voting
securities of the Company or any Subsidiary of the Company (or any entity of
which such person is an officer, director or beneficial owner of more than 5% of
such entity's outstanding voting securities) (a "Related Party"). There are no
assets of any Related Party that are used in or necessary to the conduct of the
business of the Company or any Subsidiary of the Company.
SECTION 3.26 Minute Books. The Company has previously made available to
Parent or its representatives all of its minutes of meetings of and corporate
actions or written consents by the stockholders, Boards of Directors, and
committees of the Boards of Directors of the Company.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub, jointly and severally, represent and warrant to the
Company as follows:
SECTION 4.1 Corporate Existence and Authorization. Each of Parent and
Merger Sub is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation. Each of Parent and
Merger Sub has the requisite corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder. The execution
and delivery by ▇▇▇▇▇▇ and ▇▇▇▇▇▇ Sub of this Agreement and the performance of
their obligations hereunder have been duly and validly authorized by the Boards
of Directors of Parent and Merger Sub and by Parent as the sole stockholder of
Merger Sub, and no other action of Parent's or Merger Sub's Board of Directors
or corporate proceedings on the part of Parent or Merger Sub are necessary to
authorize the execution, delivery and performance of this Agreement or to
consummate the transactions contemplated hereby. This Agreement has been duly
executed and delivered by each of Parent and Merger Sub and constitutes,
assuming due authorization, execution and delivery of this Agreement by the
Company, a valid and binding obligation of each of Parent and Merger Sub,
enforceable against each of them in accordance with its terms, subject to laws
of general application relating to bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws affecting
creditors rights generally, and general equitable principles (whether considered
in a proceeding in equity or at law).
SECTION 4.2 Governmental Authorization. The execution, delivery and
performance by Parent and Merger Sub of this Agreement and the consummation by
Parent and Merger Sub of the transactions contemplated by this Agreement require
no action by or in respect of, or filing with, any governmental body, agency,
official or authority other than: (a) the filing of a certificate of merger with
respect to the Merger with the Secretary of State; (b) compliance with any
applicable requirements of the HSR Act and Foreign Merger Laws; (c) compliance
with any applicable requirements of the federal securities laws and state blue
sky or takeover laws; and (d) such other consents, approvals, orders,
authorizations, notifications, registrations, declarations and filings the
failure of which to be obtained or made could not reasonably be expected to be,
individually or in the aggregate, materially adverse to Parent's or Merger Sub's
ability to perform any of their material obligations under this Agreement or to
consummate the Merger.
SECTION 4.3 Non-Contravention. The execution, delivery and performance by
▇▇▇▇▇▇ and Merger Sub of this Agreement and the consummation by Parent and
Merger Sub of the transactions contemplated hereby do not and will not: (a)
conflict with or result in a breach of any provision of the current articles or
certificate of incorporation or bylaws of Parent or Merger Sub; (b) assuming the
filings, registrations, notifications, authorizations, consents and approvals
referred to in Section 4.2 have been obtained or made, violate any order,
injunction, decree, statute, rule or regulation of any Governmental Entity to
which Parent or Merger Sub is subject; or (c) constitute a default under or give
rise to any right of termination, cancellation or acceleration of any right or
obligation of Parent or Merger Sub or to a loss of any benefit to which Parent
or Merger Sub is entitled under any provision of any agreement, contract or
other instrument binding upon Parent or Merger Sub, in any manner that would
reasonably be expected to prevent, hinder or delay the timely completion of the
transactions contemplated by this Agreement.
SECTION 4.4 Litigation. There is no action pending or, to the knowledge of
Parent, threatened, against or affecting Parent or any of its Subsidiaries or
any of their respective properties or any of their respective officers or
directors in their capacity as officers or directors of Parent before any court
or arbitrator or before or by any governmental body, agency or official that
would, individually or in the aggregate, reasonably be expected to prevent,
hinder or delay the timely completion of the transactions contemplated by this
Agreement.
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ARTICLE V
PRECLOSING AND OTHER COVENANTS OF THE PARTIES
SECTION 5.1 Conduct Of The Business Of The Company. From the date hereof
until the Effective Time, the Company and its Subsidiaries shall conduct their
businesses in the ordinary course consistent with past practice and shall use
their commercially reasonable efforts to preserve intact their business
organizations and relationships with third parties and to keep available the
services of their present officers and employees. Without limiting the
generality of the foregoing, and except as otherwise expressly provided in or
contemplated by this Agreement, from the date of this Agreement until the
Effective Time, neither the Company nor any Subsidiary of the Company will,
without the prior written consent of Parent (such consent not to be unreasonably
withheld or delayed):
(a) amend its Certificate or Articles of Incorporation, Bylaws or
other governing documents;
(b) authorize for issuance, issue, sell, pledge, or deliver (whether
through the issuance or granting of additional options, warrants,
commitments, subscriptions, rights to purchase, or otherwise) any stock of
any class or any securities exercisable for the purchase of, or convertible
into, shares of stock of any class (other than the issuance of shares of
Company Common Stock pursuant to the exercise of stock options outstanding
on the date of this Agreement, the ESPP, or the issuance of Units);
(c) split, combine, or reclassify any shares of its capital stock
(whether by merger, consolidation, reorganization or otherwise), declare,
set aside, or pay any dividend or other distribution (whether in cash,
stock, or property or any combination thereof) in respect of the Company's
capital stock; or redeem or otherwise acquire any shares of its capital
stock or its other securities; or amend or alter any material term of any
of its outstanding securities;
(d) other than trade payables incurred in the ordinary course of
business and consistent with past practice and other than intercompany
indebtedness, create, incur or assume any indebtedness for borrowed money,
or assume, guarantee, endorse, or otherwise agree to become liable or
responsible for the obligations of any other person, or make any loans,
advances or capital contributions to, or investments in, any other person;
or create, incur or assume any material Lien on any material asset; or make
any tax election or permit any insurance naming the Company or any of its
Subsidiaries as a beneficiary or loss payable payee to be canceled or
terminated, except in the ordinary course of business and consistent with
practice.
(e)(i) increase in any manner the compensation of any of its
directors, officers, employees, or consultants, or accelerate the payment
of any such compensation, except anniversary date or annual performance
review salary increases for employees in the ordinary course of business
and in a manner consistent with past practices or as required by existing
contractual commitments or applicable law and except as provided in Section
1.5; (ii) except as required pursuant to Section 5.18, pay or accelerate or
otherwise modify the payment, vesting, exercisability, or other feature or
requirement of any pension, retirement allowance, severance, change of
control, stock option, or other employee benefit to any such director,
officer, employee or consultant; or (iii) except as required by existing
contractual commitments or applicable laws, commit itself to any additional
or increased pension, profit-sharing, bonus, incentive, deferred
compensation, group insurance, severance, change of control, retirement or
other benefit, plan, agreement, or arrangement except for arrangements and
agreements with newly hired employees in the ordinary course of business,
or to any employment agreement or, other than in the ordinary course of
business consistent with past practice, any consulting agreement, with or
for the benefit of any person, or amend any of such plans or any of such
agreements in existence on the date hereof (except any amendment required
by law or that would not materially increase benefits under the relevant
plan);
(f) except in the ordinary course of business and consistent with past
practice or pursuant to contractual obligations existing on the date
hereof, sell, transfer, mortgage, lease, license, pledge or otherwise
dispose of or encumber any assets or properties material to the Company and
its Subsidiaries, considered as a whole;
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(g) acquire or agree to acquire (i) by merging or consolidating with,
or by purchasing a substantial portion of the assets of, or by any other
manner, any business of any corporation, partnership, joint venture,
association, or other business organization or division thereof or (ii) any
assets that are material, individually or in the aggregate, to the Company
and its Subsidiaries, considered as a whole, except as provided in
subsection (h) below and except purchases of inventory, materials and
supplies in the ordinary course of business consistent with past practice;
(h) make or agree to make any capital expenditure or expenditures,
except for capital expenditures of $200,000 per month or less individually
and of $2,000,000 per month or less in the aggregate made pursuant to the
Company's budget previously provided to Parent. In addition, the Company is
permitted to make (i) capital expenditures included in Schedule 5.1(h), and
(ii) the planned repurchase of technology from American Medical Instruments
in the amount of $17 million;
(i) enter into or terminate, or amend, extend, renew, or otherwise
modify in any material respect (including by default or by failure to act)
any joint ventures or any other agreements, protocols or work plans
pursuant to agreements with third parties, commitments, or contracts that
are material to the Company and its Subsidiaries considered as a whole
(except agreements, commitments, or contracts expressly provided for or
contemplated by this Agreement or for the purchase, sale, or lease of
goods, services, or properties in the ordinary course of business
consistent with past practice);
(j) enter into or terminate, or amend, extend, renew, or otherwise
modify in any material respect (including by default or by failure to act)
any distribution, OEM, independent sales representative, noncompetition,
licensing, franchise, research and development, supply, or similar
contract, agreement, or understanding (except contracts, agreements or
understandings expressly provided for or contemplated by this Agreement or
that are not material and entered into in the ordinary course of business),
or enter into any contract, plan, agreement, understanding, arrangement or
obligation that restricts the ability of the Company or any Subsidiary of
the Company, or after the Merger would restrict the Surviving Corporation's
or Parent's ability, to conduct any line of business, or enter into any
contract or arrangement of a type described in Section 3.15;
(k) change in any material respect its general credit policy as to
sales of inventories or collection of receivables or its inventory
consignment practices;
(l) remove or permit to be removed from any building, facility, or
real property any material machinery, equipment, fixture, vehicle, or other
personal property or parts thereof, except in the ordinary course of
business consistent with past practice;
(m) alter or revise its accounting principles, procedures, methods, or
practices in any material respect, except as required by applicable law or
regulation or by a change in GAAP and concurred with by the Company's
independent public accountants;
(n) institute, settle, or compromise any claim, action, suit, or
proceeding pending or threatened by or against it, at law or in equity or
before any Governmental Entity (including the FDA) or any nongovernmental
self-regulatory agency;
(o) knowingly take any action, or fail to take any action, that would
render any representation, warranty, covenant, or agreement of the Company
in this Agreement inaccurate or breached such that the conditions in
Section 6.3(b) will not be satisfied as of the Closing Date; or
(p) agree or consent, whether in writing or otherwise, to do any of
the foregoing.
SECTION 5.2 Expenses. Whether or not the Merger is consummated, all costs
and expenses incurred in connection with this Agreement, the transactions
contemplated hereby, including the cost of printing the Proxy Statement and
filing it with the SEC, and filings under the HSR Act and any Foreign Merger
Laws will be paid by the party incurring such costs and expenses.
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SECTION 5.3 Proxy Statement; Stockholders' Meeting.
(a) The Company shall, in accordance with applicable law and the
Certificate of Incorporation and the Bylaws of the Company duly call, give
notice of, convene and hold the Company Stockholders' Meeting as promptly as
practicable after the date hereof for the purpose of considering and taking
action upon the adoption of this Agreement (the "Company Approval Matters").
Except as provided in Section 5.5, the Company shall use reasonable best efforts
to solicit from its stockholders proxies in favor of the adoption of this
Agreement pursuant to the Proxy Statement and shall take all other action
reasonably necessary or advisable to secure the vote or consent of stockholders
required by the DGCL or applicable stock exchange requirements to obtain such
approval. Except as set forth in this Section 5.5, the Company shall take all
other action reasonably necessary or advisable to promptly and expeditiously
secure any vote or consent of stockholders required by applicable law and the
Company's Certificate of Incorporation and Bylaws to effect the Merger.
(b) Promptly following the date of this Agreement, the Company shall
prepare and file with the SEC a proxy statement relating to the Company Approval
Matters (together with any amendments thereof and any supplements thereto, the
"Proxy Statement"). Parent and the Company shall cooperate with each other in
connection with the preparation of the Proxy Statement. The Company will use
reasonable best efforts to cause the Proxy Statement to be mailed to the
Company's stockholders as promptly as practicable after the date hereof. The
Proxy Statement shall include (i) the recommendation of the Board of Directors
of the Company to the Company's stockholders that they vote in favor of adoption
of this Agreement, subject to the right of the Board of Directors of the Company
to withdraw its recommendation and recommend a Superior Proposal determined to
be such in compliance with Section 5.5 of this Agreement, and (ii) the opinion
of UBS Warburg referred to in Section 3.18.
(c) The Company shall as promptly as practicable notify (and provide copies
to) Parent of the receipt of any comments from the SEC relating to the Proxy
Statement. All filings by the Company with the SEC in connection with the
transactions contemplated hereby, including the Proxy Statement and any
amendment or supplement thereto, shall be subject to the prior review of Parent,
and all mailings to the Company's stockholders in connection with the
transactions contemplated by this Agreement shall be subject to the prior review
of Parent.
(d) Unless and until this Agreement is validly terminated pursuant to
Article VII, nothing herein shall limit or eliminate in any way the Company's
obligation to call, give notice of, convene and hold the Company Stockholders'
Meeting and at such meeting submit this Agreement and the Merger to a vote of
the Company's stockholders (and not postpone or adjourn such meeting or the vote
by the Company's stockholders upon this Agreement and the Merger to another date
without Parent's approval).
SECTION 5.4 Access To Information; Confidentiality Agreement
(a) Except as required pursuant to any confidentiality agreement or similar
agreement or arrangement to which the Company or any of the Company's
Subsidiaries is a party (in which case the Company shall use all commercially
reasonable efforts to provide acceptable alternative arrangements, not in
violation of such agreement or arrangement, for disclosure to Parent or its
advisors) or pursuant to applicable law or the regulations or requirements of
any stock exchange or other regulatory organization with whose rules the Company
is required to comply, from the date of this Agreement to the Effective Time,
the Company shall (and shall direct its Subsidiaries to) (i) provide to Parent
(and its officers, directors, employees, accountants, consultants, legal
counsel, agents and other representatives (collectively, "Representatives"))
access at reasonable times during normal business hours in a manner so as not to
unreasonably disrupt the ordinary course of business upon prior written notice
to its and its Subsidiaries' officers, employees, agents, properties, offices
and other facilities and to the books and records thereof, and (ii) furnish
promptly to Parent all information concerning the Company's and its
Subsidiaries' businesses, prospects, properties, liabilities, results of
operations, financial condition, product evaluations and testing, pilot studies,
clinical data and studies and evaluations, patient results, regulatory
compliance, officers, employees, third party physicians and clinical
investigators, consultants, distributors, customers, suppliers, and others
having material dealings with the Company as Parent may reasonably request and
reasonable opportunity to contact and obtain information
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from such officers, employees, investigators, consultants, distributors,
customers, suppliers, and others having dealings with the Company as Parent may
reasonably request. Subject to the foregoing provisions, the Company's
obligation to afford access and provide information pursuant to the preceding
sentence shall include such access and information as Parent shall reasonably
deem necessary to enable Parent, or a third party designated by Parent and
approved by the Company, to conduct a reasonable audit of the Company's and its
Subsidiaries' product performance and quality, pilot studies, clinical data and
results, patient results, compliance with FDA regulations, policies and
procedures, relations and dealings with third party physicians and other
clinical investigators and consultants, and related performance and compliance
matters concerning the Company's and its Subsidiaries' products. During the
period from the date hereof to the Effective Time, the parties shall in good
faith meet and correspond on a regular basis for mutual consultation concerning
the conduct of the Company's and its Subsidiaries' businesses and, in connection
therewith, Parent shall be entitled to be kept informed concerning, the
Company's and its Subsidiaries' operations and business planning. No
investigation conducted pursuant to this Section 5.4 shall affect or be deemed
to modify any representation or warranty made in this Agreement or modify or
expand the conditions to closing set forth in Article VI. Nothing in this
Agreement will require disclosure prior to the Effective Time of minutes,
reports, or documents related to the Special Committee.
(b) Parent and each of its employees and other representatives shall hold
in confidence all such nonpublic information as required and in accordance with
the confidentiality agreement between Parent and the Company dated April 26,
2000 (the "Confidentiality Agreement").
SECTION 5.5 No Solicitation.
(a) The Company shall not (whether directly or indirectly through advisors,
agents or other intermediaries), and the Company shall cause its respective
officers, directors, advisors, representatives or other agents (including any
investment banker, attorney, or accountant retained by the Company or any
Subsidiary) not to, directly or indirectly, (1) solicit, initiate or knowingly
encourage any Acquisition Proposal (as defined hereafter) or (2) participate in
or encourage in any way discussions or negotiations with, or provide any
nonpublic information to, any corporation, partnership, person, or other entity
or group (other than Parent or any affiliate or agent of Parent) concerning any
Acquisition Proposal, or otherwise facilitate any effort or attempt to make or
implement an Acquisition Proposal; provided, however, that, notwithstanding the
foregoing provisions of this Section 5.5, this Agreement shall not prohibit the
Company's Special Committee from, prior to the date on which the Company's
stockholders adopt this Agreement in accordance with the DGCL, furnishing
nonpublic information to or entering into discussions or negotiations with, any
person or entity that makes an unsolicited Superior Proposal, if, and only to
the extent that, (i) the failure of the Company's Board of Directors to take
action with respect to a Superior Proposal would be a breach of the Board's
fiduciary duties to its shareholders imposed by applicable law; (ii) prior to
first furnishing nonpublic information to, or first entering into substantive
discussions and negotiations with, such person or entity after the date hereof,
the Company (A) provides written notice of at least five business days to Parent
to the effect that it intends to furnish information to, or enter into
discussions or negotiations with, such person or entity, and naming and
identifying the person or entity making the Acquisition Proposal, and (B)
receives from such person or entity an executed confidentiality agreement with
terms no less favorable to the Company than the Confidentiality Agreement (as
defined in Section 5.4(b)) entered into with Parent; and (iii) the Company
concurrently provides Parent with all non-public information to be provided to
such person or entity that Parent has not previously received from the Company,
and the Company keeps Parent informed, on a daily or more regular basis if the
context requires or Parent so requests, of the status, terms and conditions and
all other material information with respect to any such discussions or
negotiations.
(b) For purposes of this Agreement, "Acquisition Proposal" means any offer
or proposal for any of the following involving the Company or any Subsidiary of
the Company: (i) any tender offer, exchange offer, merger, consolidation, share
exchange, business combination or similar transaction involving more than fifty
percent of capital stock of the Company or any Subsidiary of the Company; (ii)
any transaction or series of related transactions pursuant to which any person
or entity (or its stockholders), other than Parent, or Merger Sub or any of
their affiliates (a "Third Party") acquires shares (or securities exercisable
for or convertible into shares) representing more than fifty percent of the
outstanding shares of any class of capital stock of the
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Company or any Subsidiary of the Company; or (iii) any sale, lease, exchange,
licensing, transfer or other disposition pursuant to which a Third Party
acquires control of more than 20% of the assets (including, but not limited to,
intellectual property assets) of the Company and its Subsidiaries taken as a
whole (determined by reference to the fair market value of such assets), in a
single transaction or series of related transactions.
(c) As used herein, a "Superior Proposal" shall mean a bona fide
Acquisition Proposal (i) that the Company's Special Committee has reasonably and
in good faith determined (with the advice of its financial advisors and taking
into account all material legal, financial and regulatory aspects of such
Acquisition Proposal) to be more favorable to the Company's stockholders than
the transactions contemplated by this Agreement; and (ii) with respect to which
the financing required to consummate the transaction contemplated by such
Acquisition Proposal is committed or in the good faith determination of the
Company's Special Committee, after consultation with its financial advisor, is
likely to be obtained on a timely basis.
(d) The Company will immediately terminate all discussions with Third
Parties concerning any Acquisition Proposal, and will request that such Third
Parties promptly return any confidential information furnished by the Company in
connection with any Acquisition Proposal. Subject to this Section 5.5, the
Company will not waive any provision of any confidentiality, standstill or
similar agreement entered into with any Third Party regarding any Acquisition
Proposal, and prior to the Closing shall enforce all such agreements in
accordance with their terms. The Company will promptly communicate to Parent the
name of the person or entity submitting, and a detailed description of the terms
and conditions of, any proposal or inquiry that it receives after the date
hereof in respect of any Acquisition Proposal or a reasonably detailed
description of any such information requested from it after the date hereof or
of any such negotiations or discussions being sought to be initiated or
continued with the Company after the date hereof in respect of an Acquisition
Proposal.
(e) Nothing contained in this Section 5.5 shall (i) permit the Company to
terminate this Agreement (except as specifically provided in Article VII
hereof), or (ii) permit the Company to enter into any agreement providing for an
Acquisition Proposal (other than the confidentiality agreement as provided, and
in the circumstances and under the conditions set forth, above) for as long as
this Agreement remains in effect.
(f) Nothing contained in this Section 5.5 shall prohibit the Company or the
Company's Board of Directors from taking and disclosing to the Company's
stockholders a position with respect to a tender or exchange offer by a third
party pursuant to Rules 14d-9 and 14e-2(a) promulgated under the Exchange Act or
from making any disclosure required by applicable law.
SECTION 5.6 Director And Officer Liability.
(a) Parent and the Company agree that all rights to indemnification and
advancement of expenses and all limitations on liability existing in favor of
any Indemnitee (as defined hereafter) as provided in the Certificate of
Incorporation or Bylaws of the Company existing on the date of this Agreement
shall survive the Merger and continue in full force and effect in accordance
with its terms for at least six years after the Effective Time, unless
modification of such rights or limitations is required by law.
(b) For six years after the Effective Time, Parent shall or shall cause the
Surviving Corporation to indemnify and hold harmless, and to advance expenses
to, the individuals who on or prior to the Effective Time were officers,
directors, employees or agents of the Company (the "Indemnitees") to the full
extent permitted by applicable law. In the event any claim in respect of which
indemnification is available pursuant to the foregoing provisions is or may be
asserted or made within such six-year period, all rights to indemnification and
advancement of expenses shall continue until such claim is disposed of or all
judgments, orders, decrees or other rulings in connection with such claim are
fully satisfied.
(c) From and after the Effective Time, Parent will cause the Surviving
Corporation to fulfill and honor in all respects the obligations of the Company
pursuant to each indemnification agreement that is described in Schedule 5.6 of
the Company Disclosure Schedule and is in effect at the Effective Time. Parent
shall guarantee the obligations of the Surviving Corporation with respect to the
indemnification and payment of fees and expenses provisions contained in the
Surviving Corporation's Certificate of Incorporation and Bylaws with
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respect to acts occurring at or before the Effective Time (including the
transactions contemplated by this Agreement).
(d) For a period of three years after the Effective Time, Parent shall, at
its selection, either: (i) cause to be maintained in effect the Company's
current directors' and officers' liability insurance policy (a copy of which has
been heretofore delivered or made available to Parent or its advisors) with
respect to claims arising from facts or events that occurred at or prior to the
Effective Time; or (ii) extend the discovery or reporting period under the
Company's current policy for three years from the Effective Time to maintain in
effect directors' and officers' liability insurance with respect to claims
arising from facts or events that occurred at or prior to the Effective Time for
those persons who are currently covered by the Company's directors' and
officers' liability insurance policy on terms no less favorable than the terms
of such current insurance policy; or (iii) substitute coverage under Parent's
directors' and officers' liability insurance or coverage under other policies
providing coverage on terms and conditions that are no less advantageous to such
persons than the Company's current insurance with respect to claims arising from
facts or events that occurred at or prior to the Effective Time; provided,
however, that in no event shall Parent be required to expend for any such
coverage an amount per year in excess of 150% of the annual premium currently
paid by the Company for such insurance; and provided further that if the cost
per year of such coverage exceeds such 150% amount, Parent shall be obligated to
obtain such coverage as is available for a cost per year not exceeding such
amount. The Company represents that the Company Disclosure Schedule sets forth
the annual premium currently paid by the Company for such insurance.
(e) In the event Parent, the Surviving Corporation or any of their
successors or assigns (i) consolidates with or merges into any other person and
shall not be the continuing or surviving corporation or entity of such
consolidation or merger or (ii) transfers all or substantially all of its
properties and assets to any person, then and in each such case, proper
provisions shall be made so that the successors and assigns of Parent or the
Surviving Corporation, as the case may be, shall assume the obligations set
forth in this Section 5.6.
(f) This Section 5.6 shall survive the consummation of the Merger at the
Effective Time, is intended to benefit the Company, Parent, the Surviving
Corporation and the Indemnitees, and shall be binding on all successors and
assigns of Parent and the Surviving Corporation.
SECTION 5.7 Commercially Reasonable Efforts. Upon the terms and subject to
the conditions of this Agreement, each party hereto shall use commercially
reasonable efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to consummate the transactions contemplated by this
Agreement.
SECTION 5.8 Consents; Certain Filings.
(a) The Company and Parent shall cooperate with one another (i) in
connection with the preparation of the Proxy Statement, (ii) in determining
whether any action by or in respect of, or filing with, any Governmental Entity
is required, or any actions, consents, approvals or waivers are required to be
obtained from parties to any material contracts, in connection with the
consummation of the transactions contemplated by this Agreement and (iii) in
seeking any such actions, consents, approvals or waivers or making any such
filings, furnishing information required in connection therewith or with the
Proxy Statement and seeking timely to obtain any such actions, consents,
approvals or waivers.
(b) Without limiting the provisions of this Section 5.8, each party hereto
shall, if applicable, file with the Department of Justice and the Federal Trade
Commission a Pre-Merger Notification and Report Form pursuant to the HSR Act in
respect of the transactions contemplated hereby as soon as reasonably
practicable, and each party will use commercially reasonable efforts to take or
cause to be taken all actions necessary, including to promptly and fully comply
with any requests for information from regulatory Governmental Entities, to
obtain any clearance, waiver, approval or authorization relating to the HSR Act
that is necessary to enable the parties to consummate the transactions
contemplated by this Agreement. Without limiting the provisions of this Section
5.8, each party hereto shall use commercially reasonable efforts to promptly
make the filings required to be made by it with all foreign Governmental
Entities in any jurisdiction in which the parties believe it is necessary or
advisable.
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(c) The Company and Parent shall each use commercially reasonable efforts
to resolve such objections, if any, as may be asserted with respect to the
Merger or any other transaction contemplated by this Agreement under any
Antitrust Law (as defined below). If any administrative, judicial or legislative
action or proceeding is instituted (or threatened to be instituted) challenging
the Merger or any other transaction contemplated by this Agreement as violative
of any Antitrust Law, the Company and Parent shall each cooperate to contest and
resist any such action or proceeding, and to have vacated, lifted, reversed or
overturned any decree, judgment, injunction or other order (whether temporary,
preliminary or permanent) that is in effect and that restricts, prevents or
prohibits consummation of the Merger or any other transaction contemplated by
this Agreement, including, without limitation, by pursuing all reasonable
avenues of administrative and judicial appeal. Notwithstanding anything to the
contrary in this Agreement, none of Parent, any of its Subsidiaries or the
Surviving Corporation, shall be required (and the Company shall not, without the
prior written consent of Parent, agree, but shall, if so directed by ▇▇▇▇▇▇,
agree, effective after the Effective Time) to hold separate or divest any of
their respective assets or operations or enter into any consent decree or
licensing or other arrangement with respect to any of their assets or operations
or to otherwise take or commit to take any action that limits its freedom of
action with respect to, or its ability to retain, as of and after the Effective
Time any businesses or assets of the Company, Parent or any of their respective
affiliates.
(d) Each of the Company and Parent shall promptly inform the other party of
any material communication received by such party from the Federal Trade
Commission, the Antitrust Division of the Department of Justice or any other
governmental or regulatory authority regarding any of the transactions
contemplated hereby.
(e) The Company will, at its cost and expense, use all reasonable efforts
to obtain all approvals and consents of all third parties necessary on the part
of the Company or its Subsidiaries to promptly consummate the transactions
contemplated hereby. ▇▇▇▇▇▇ agrees to cooperate with the Company in connection
with obtaining such approvals and consents. Parent will, at its cost and
expense, use all reasonable efforts to obtain all approvals and consents of all
third parties necessary on the part of Parent or Merger Sub to promptly
consummate the transactions contemplated hereby. The Company agrees to cooperate
with Parent in connection with obtaining such approvals and consents.
(f) "Antitrust Law" means the ▇▇▇▇▇▇▇ Act, as amended, the ▇▇▇▇▇▇▇ Act, as
amended, and all other federal, state and foreign statutes, rules, regulations,
orders, decrees, administrative and judicial doctrines, and other laws that are
designed or intended to prohibit, restrict or regulate competition or actions
having the purpose or effect of monopolization or restraint of trade.
SECTION 5.9 Public Announcements. The parties shall issue press releases
in agreed upon form announcing the execution of this Agreement as soon as
practicable on or after the date hereof. Neither the Company, Parent nor any of
their respective affiliates shall issue or cause the publication of any press
release or other public announcement with respect to the Merger, this Agreement
or the other transactions contemplated hereby without the prior written consent
of the other party, except as may be required by law or by any listing agreement
with, or the policies of, a national securities exchange or the NASDAQ National
Market.
SECTION 5.10 Further Assurances. At and after the Effective Time, the
officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of the Company or Merger Sub, any
deeds, bills of sale, assignments or assurances and to take and do, in the name
and on behalf of the Company or Merger Sub, any other actions to vest, perfect
or confirm of record or otherwise in the Surviving Corporation any and all
right, title and interest in, to and under any of the rights, properties or
assets of the Company acquired or to be acquired by the Surviving Corporation,
as a result of, or in connection with, the Merger.
SECTION 5.11 Employee Matters.
(a) From and after the Effective Time, Parent shall to the extent
practicable cause the Surviving Corporation to provide employee benefits and
programs to the Company's employees that, in the aggregate, are substantially
comparable or more favorable, as a whole, than those in existence as of the date
hereof and
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disclosed in writing to Parent prior to the execution hereof; provided that
stock-based compensation shall be comparable to that offered by Parent and its
subsidiaries generally. To the extent Parent satisfies its obligations under
this Section by maintaining Company benefit plans, Parent shall not be required
to include employees of the Company in Parent's benefit plans.
(b) Parent shall, or shall cause the Company to, give individuals who are
employed by the Company or any of its Subsidiaries as of the Effective Time and
who remain employees of the Company or such Subsidiary following the Effective
Time (each such employee, an "Affected Employee") full credit to the extent each
such Affected Employee has been credited with service under each comparable
employee benefit plan or arrangement maintained by the Company immediately prior
to the Effective Time for purposes of eligibility, level of participation and
vesting under each employee benefit plan or arrangement maintained by Parent or
the Company for such Affected Employee's service with the Company.
(c) Under no circumstances shall employees receive credit for service
accrued or deemed accrued prior to the Effective Time with the Company or such
Subsidiary, as the case may be, for benefit accruals under any employee pension
benefit plan (as defined by Section 3(2) of ERISA) or any retiree health plan.
SECTION 5.12 State Takeover Laws. If any "fair price," "business
combination" or "control share acquisition" statute or other similar statute or
regulation is or may become applicable to the Merger, the Company shall take
such actions as are necessary so that the transactions contemplated by this
Agreement may be consummated as promptly as practicable on the terms
contemplated hereby and otherwise act to eliminate or minimize the effects of
any such statute or regulation on the Merger.
SECTION 5.13 Certain Notifications. Between the date hereof and the
Effective Time, the Company and Parent shall each promptly notify the other in
writing after becoming aware of the occurrence of any event which will, or is
reasonably likely to, result in the failure to satisfy any of the conditions to
such other party's obligations specified in Article VI.
SECTION 5.14 Voting of Shares. To induce Parent to execute this Agreement,
certain officers and directors of the Company have executed and delivered as of
the date hereof Agreements to Facilitate Merger in the form attached hereto as
Exhibit B, pursuant to which each such person has agreed to vote all of his or
her shares of Common Stock in favor of the adoption of this Agreement. To the
extent not already delivered to Parent, the Company will use reasonable best
efforts to have all other such affiliates execute and deliver to Parent
Agreements to Facilitate Merger as soon as practicable after the date hereof.
SECTION 5.15 Stock Rights. Prior to the Effective Time, the Company shall
obtain all consents and agreements and take any other action required to allow
for the treatment of Company Options, Units and rights pursuant to the ESPP as
is provided in Section 1.5.
SECTION 5.16 Noncompetition Agreements. To induce Parent to execute this
Agreement, the Company has caused those executives who, as of the date hereof,
have been specified in writing by Parent to execute and deliver to Parent as of
the date hereof (but expressly contingent upon the Closing of the Merger)
noncompetition agreements substantially in the form previously provided to the
Company and attached to such writing. To the extent not already delivered to
Parent, the Company shall use reasonable best efforts to have such other persons
who have been specified in such writing execute and deliver to Parent such
noncompetition agreements as soon as practicable after the date hereof.
SECTION 5.17 Subsidiary Shares. At or prior to the Closing, the Company
shall use reasonable best efforts to cause all issued and outstanding shares of
capital stock of the Company's Subsidiaries (other than any interests in joint
ventures or similar arrangements) owned by any person other than the Company or
any of its Subsidiaries to be transferred, effective at the Effective Time, for
no or nominal consideration to such person or persons designated by Parent.
SECTION 5.18 MRG Transaction.
(a) Parent will not consummate the transactions contemplated under the
Agreement and Plan of Merger dated of even date herewith (the "MRG Agreement")
between Parent and Medical Research Group, Inc. ("MRG") prior to the Effective
Time unless this Agreement has been terminated in a manner that results or
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could (with the passage of time or occurrence of events) result in the
Termination Fee being paid or payable pursuant to Section 7.3.
(b) Parent will not amend or modify the MRG Agreement or waive any rights
thereunder in a manner that would reasonably be expected to prevent or delay the
Effective Time or the timely closing under the MRG Agreement.
ARTICLE VI
CONDITIONS TO THE MERGER
SECTION 6.1 Conditions To Each Party's Obligations. The respective
obligations of the Company, Parent and Merger Sub to consummate the Merger are
subject to the satisfaction or, to the extent permitted by applicable law, the
waiver on or prior to the Effective Time of each of the following conditions:
(a) This Agreement shall have been adopted by the stockholders of the
Company in accordance with applicable law;
(b) Any applicable waiting periods under the HSR Act and any Foreign
Merger Law relating to the Merger shall have expired or been terminated;
(c) None of Parent, Merger Sub, or the Company shall be subject to any
final order, decree, or injunction of a court of competent jurisdiction
within the United States or the European Union that is then in effect and
(i) has the effect of making the Merger illegal or otherwise prohibiting
the consummation of the Merger, or (ii) would impose any material
limitation on the ability of Parent to effectively exercise full rights of
ownership of the Company or the assets or business of the Company or its
Subsidiaries;
SECTION 6.2 Conditions To The Company's Obligation To Consummate The
Merger. The obligation of the Company to consummate the Merger shall be further
subject to the satisfaction or, to the extent permitted by applicable law, the
waiver on or prior to the Effective Time of each of the following conditions:
(a) Parent and Merger Sub shall each have performed in all material
respects its respective agreements and covenants contained in or
contemplated by this Agreement that are required to be performed by it at
or prior to the Effective Time pursuant to the terms hereof;
(b) The representations and warranties of Parent contained in this
Agreement shall be true and correct in all material respects on the Closing
Date as though such representations and warranties were made on such date;
and
(c) The Company shall have received certificates signed by an
authorized officer of Parent, dated the Closing Date, to the effect that
the conditions set forth in Sections 6.2(a) and 6.2(b) hereof have been
satisfied or waived.
SECTION 6.3 Conditions To Parent's And Merger Sub's Obligations To
Consummate The Merger. The obligations of Parent and Merger Sub to effect the
Merger shall be further subject to the satisfaction, or to the extent permitted
by applicable law, the waiver on or prior to the Effective Time of each of the
following conditions:
(a) The Company shall have performed in all material respects each of
its agreements and covenants contained in or contemplated by this Agreement
that are required to be performed by it at or prior to the Effective Time
pursuant to the terms hereof;
(b) The representations and warranties of the Company contained in
this Agreement, without regard to any qualification or reference to
"material," "in all material respects," "Company Material Adverse Effect,"
or similar variations thereof shall be true and correct on the Closing Date
as though such representations and warranties were made on such date,
except that those representations and warranties that address matters only
as of a particular date shall remain true and correct as of such date, and
except in any case for any inaccuracies of representations and warranties
that have not had, or could
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not reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect; provided, however, notwithstanding the
foregoing, this Section 6.3(b) shall not be considered fulfilled or
satisfied if the representation and warranty set forth in the last sentence
of Section 3.4 is incorrect as of the Closing Date;
(c) Parent shall have received a certificate signed by the chief
executive officer of the Company, dated the Closing Date, to the effect
that the conditions set forth in Sections 6.3(a) and 6.3(b) hereof have
been satisfied or waived;
(d) The Company shall have obtained all permits, authorizations,
consents, and approvals required on its part to perform its obligations
under, and consummate the transactions contemplated by, this Agreement, in
form and substance satisfactory to Parent, except for such permits,
authorizations, consents and approvals the failure of which to obtain could
not reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect, and Parent and Merger Sub shall have
received evidence satisfactory to them of the receipt of such permits,
authorizations, consents, and approvals;
(e) Since the date of this Agreement, there shall not have occurred or
come into existence any change, event, occurrence, state of facts or
development that has had, or could reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect;
(f) Parent shall have received executed agreements from such persons,
and in such form satisfactory to Parent, with respect to the transfer of
Company Subsidiary shares of stock as described in Section 5.17 hereof; and
(g)(i) At the time all other conditions precedent to the closing of
the Merger have been satisfied or waived there shall not exist (A) any
failure of the representations and warranties of MRG contained in the MRG
Agreement (without regard to any qualification or reference to "material,"
"in all material respects," "Material Adverse Effect," or similar
variations thereof) to be true and correct or (B) any change, event,
occurrence, state of facts or development with respect to MRG that, in the
case of each of clause (A) or (B), has had or could reasonably be expected
to have, individually or in the aggregate, a Company Material Adverse
Effect. Solely for purposes of applying the definition of Company Material
Adverse Effect to this Section 6.3(g), "Company" means the Company and MRG
taken together as a whole).
(ii) Upon learning of any fact or circumstance that Parent determines
would lead to the closing condition set forth in this Section 6.3(g) not
being met (a "Potential Closing Problem"), Parent will give to the Company
prompt notice thereof and keep the Company reasonably informed (on a daily
or more frequent basis if the context requires or the Company so requests)
of the status, facts, and other material information with respect to any
such matter; provided that failure to give such notice shall not adversely
affect Parent's rights except, and only to the extent that, the Company
demonstrates it has been prejudiced by such failure. Parent will, at the
Company's request allow the Company and its representatives to be directly
involved in the discussions or negotiations with respect to any Potential
Closing Problem, and afford the Company and its representatives a
reasonable opportunity to actively participate in attempting to resolve the
Potential Closing Problem in a manner reasonably satisfactory to Parent.
(h) All applicable waiting periods under the HSR Act or any Foreign
Merger Law relating to the transactions contemplated by the MRG Agreement
shall have expired or been terminated.
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ARTICLE VII
TERMINATION
SECTION 7.1 Termination. Notwithstanding anything herein to the contrary,
this Agreement may be terminated and the transactions contemplated by this
Agreement may be abandoned at any time prior to the Closing Date, whether before
or after this Agreement has been adopted by the Company's stockholders:
(a) by the mutual written consent of the Company and Parent;
(b) by either the Company or Parent, if the Merger has not been
consummated by December 31, 2001, or such other date, if any, as the
Company and Parent shall agree upon; provided, that the party seeking to
terminate this Agreement pursuant to this Section 7.1(b) shall not have
breached in any material respect its obligations under this Agreement in
any manner that shall have been the proximate cause of, or resulted in, the
failure to consummate the Merger by such date; and provided further,
however, that, if a request for additional information is received from the
U.S. Federal Trade Commission ("FTC") or Department of Justice ("DOJ")
pursuant to the HSR Act or additional information is requested by a
governmental authority (a "Foreign Authority") pursuant to Foreign Merger
Laws, such date shall be extended to the later of (i) the date set forth
above or (ii) the 90th day following acknowledgment by the FTC, DOJ, or
Foreign Authority, as applicable, that Parent and the Company have complied
with such request, but in any event not later than March 31, 2002;
(c) by either Parent or the Company if a court of competent
jurisdiction or an administrative, governmental, or regulatory authority in
the United States or the European Union has issued a final nonappealable
order, decree, or ruling, or taken any other action, having the effect of
permanently restraining, enjoining, or otherwise prohibiting the Merger;
(d) by Parent, if (i) the Company has breached its obligations under
Section 5.5 in any material respect; or (ii) the Board of Directors of the
Company shall have withdrawn or modified or amended in any respect adverse
to Parent or Merger Sub its approval or recommendation of the Merger; or
(iii) the Board of Directors of the Company shall have recommended to the
stockholders of the Company any Acquisition Proposal or shall have resolved
or announced an intention to do so; or (iv) a tender offer or exchange
offer for 50% or more of the outstanding shares of the Company Common Stock
is announced or commenced and either (A) the Board of Directors of the
Company recommends acceptance of such tender offer or exchange offer by its
stockholders or (B) within ten (10) business days of such commencement, the
Board of Directors of the Company shall have failed to recommend against
acceptance of such tender offer or exchange offer by its stockholders;
(e) by either the Company or Parent, if the adoption of this Agreement
by the Company's stockholders as required under applicable law shall not
have been obtained at the Company Stockholders' Meeting; except that the
right to terminate this Agreement under this Section 7.1(e) will not be
available to any party whose failure to perform any obligation under this
Agreement has been the proximate cause of, or resulted in, the failure to
obtain the requisite vote of the stockholders of the Company; or
(f) by the Company prior to the adoption of this Agreement by the
Company's stockholders if (i) it has complied with, and continues to comply
with, all requirements, conditions and procedures of Section 5.5 in all
material respects, (ii) the Board of Directors of the Company has (upon the
recommendation of the Company's Special Committee) authorized, subject to
complying with the terms of this Agreement, the Company to enter into a
binding written agreement concerning a transaction that constitutes a
Superior Proposal and the Company notifies Parent in writing that it
intends to enter into such binding agreement, which notice must have
attached to it the most current version of such agreement, (iii) Parent
does not make, within five business days after receipt of such notice from
the Company, any offer that the Company's Special Committee reasonably and
in good faith determines, after consultation with its financial and legal
advisors, is at least as favorable to the stockholders of the Company as
the Superior Proposal and during such five business-day period the Company
reasonably considers and discusses in good faith all proposals submitted by
Parent and, without limiting the foregoing, meets with, and causes its
financial advisors and legal advisors to meet with, Parent and its
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advisors from time to time as requested by Parent to reasonably consider
and discuss in good faith Parent's proposals, and (iv) prior to or
concurrently with the Company's termination pursuant to this Section
7.1(f), the Company pays to Parent the fee required by Section 7.3 to be
paid to Parent in the manner therein provided. The Company agrees (x) that
it will not enter into a binding agreement referred to in clause (ii) above
until at least the sixth business day after Parent has received the notice
to Parent required by clause (ii) above, and (y) to notify Parent promptly
if its intention to enter into the binding agreement included in its notice
to Parent shall change at any time after giving such notice;
(g) by Parent if (i) Parent is not in material breach of its
obligations under this Agreement and (ii) there has been a material breach
by the Company of any of its representations, warranties, or obligations
under this Agreement such that the conditions in Section 6.3 will not be
satisfied ("Terminating Company Breach"); provided, however, that, if such
Terminating Company Breach is curable by the Company through the exercise
of commercially reasonable efforts and such cure is reasonably likely to be
completed prior to the applicable date specified in Section 7.1(b), then
for so long as the Company continues to exercise commercially reasonable
efforts, Parent may not terminate this Agreement under this Section 7.1(g);
or
(h) by the Company if (i) the Company is not in material breach of its
obligations under this Agreement and (ii) there has been a material breach
by Parent of any of its representations, warranties, or obligations under
this Agreement such that the conditions in Section 6.2 will not be
satisfied ("Terminating Parent Breach"); provided, however, that, if such
Terminating Parent Breach is curable by Parent through the exercise of
commercially reasonable efforts and such cure is reasonably likely to be
completed prior to the applicable date specified in Section 7.1(b), then
for so long as Parent continues to exercise commercially reasonable
efforts, the Company may not terminate this Agreement under this Section
7.1(h).
SECTION 7.2 Effect of Termination. The party desiring to terminate this
Agreement shall give written notice of such termination to the other party.
Except for any willful breach of this Agreement by any party hereto (which
willful breach and liability therefor shall not be affected by the termination
of this Agreement or the payment of any Termination Fee (as defined in Section
7.3(a) hereof)), if this Agreement is terminated pursuant to Section 7.1 hereof,
then this Agreement shall become void and of no effect with no liability on the
part of any party hereto; provided, however that notwithstanding such
termination the agreements contained in Sections 5.2, 5.4(b), 7.2, 7.3, 7.4 and
Article VIII hereof shall survive the termination hereof.
SECTION 7.3 Fees.
(a) The Company agrees to pay Parent in immediately available funds by wire
transfer to an account designated by Parent an amount equal to One Hundred Eight
Million Dollars ($108,000,000) (the "Termination Fee") if:
(i) this Agreement is terminated by Parent pursuant to Section 7.1(d)
(ii) through (iv) hereof; or
(ii)(A) this Agreement is terminated by Parent or the Company pursuant
to Section 7.1(b), 7.1(d)(i) or 7.1(e) hereof, (B) at or prior to the time
of such termination, an Acquisition Proposal with respect to the Company
shall have been made public and remains pending at the time of such
termination or at the time of the Company Stockholders' Meeting, and (C)
within twelve months after such termination, the Company shall enter into a
definitive agreement with respect to any Acquisition Proposal or the
transaction contemplated by any Acquisition Proposal relating to the
Company shall be consummated; or
(iii) this Agreement is terminated by the Company pursuant to Section
7.1(f) hereof.
(b) The Company shall pay the Termination Fee required to be paid pursuant
to Section 7.3(a) hereof (if all conditions thereto have been satisfied) (i)
prior to or concurrently with the termination of this Agreement by the Company,
(ii) not later than one business day after the termination of this Agreement by
Parent, or (iii) in the case of a fee payable pursuant to Section 7.3(a)(ii),
prior to the earlier of the execution
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of the definitive agreement with respect to, or the consummation of the
transaction contemplated by, the applicable Acquisition Proposal.
SECTION 7.4 No Penalty; Costs of Collection. The Company acknowledges that
the agreements contained in Section 7.3 are an integral part of the transactions
contemplated by this Agreement and are not a penalty, and that, without these
agreements, Parent would not enter into this Agreement. If the Company fails to
pay promptly the fee due pursuant to this Section 7.3, the Company shall also
pay to Parent Parent's costs and expenses (including legal fees and expenses) in
connection with any action, including the filing of any lawsuit or other legal
action, taken to collect payment, together with interest on the amount of the
unpaid fee under this section, accruing from its due date, at an interest rate
per annum equal to the prime commercial lending rate quoted by ▇▇▇▇▇ Fargo Bank
Minnesota, N.A.; provided, however, that Parent shall pay to the Company the
Company's costs and expenses (including legal fees and expenses) incurred in
connection with any such legal action if ▇▇▇▇▇▇'s claims against the Company in
such legal action do not prevail. Any change in the interest rate hereunder
resulting from a change in such prime rate shall be effective at the beginning
of the date of such change in such prime rate.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 Notices. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement to any
party hereunder shall be in writing and deemed given upon (a) personal delivery,
(b) transmitter's confirmation of a receipt of a facsimile transmission, or (c)
confirmed delivery by a standard overnight carrier or when delivered by hand
each case when addressed, transmitted or delivered, as the case may be, in
accordance with the following information (or with such other information for a
party as shall be specified by notice given hereunder by such party):
If to the Company, to:
MiniMed Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: President and COO
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (not constituting notice) to:
O'Melveny & ▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇. ▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Parent or Merger Sub, to:
Medtronic, Inc.
World Headquarters
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇.▇.
Minneapolis, MN 55432-5604
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with separate copies thereof addressed to:
Attn: General Counsel
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and
Attn: Vice President and Chief
Development Officer
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
SECTION 8.2 Survival Of Representations And Warranties. The respective
representations and warranties of Parent and the Company contained herein or in
any certificates or other documents delivered prior to or at the Closing shall
not be deemed waived or otherwise affected by any investigation made by any
party hereto. Except as otherwise provided herein or in any document
contemplated hereby, the representations and warranties contained herein and in
any certificate or other writing delivered pursuant hereto shall not survive the
Effective Time. All other covenants and agreements contained herein which by
their terms are to be performed in whole or in part, or which prohibit actions,
subsequent to the Effective Time, shall survive the Merger in accordance with
their terms.
SECTION 8.3 Interpretation. Whenever the words "include," "includes" or
"including" are used in this Agreement they shall be deemed to be followed by
the words, "but not limited to." As used in this Agreement, the term "affiliate"
shall have the meaning set forth in Rule 12b-2 promulgated under the Exchange
Act.
The article and section headings contained in this Agreement are solely for
the purpose of reference, are not part of the agreement of the parties hereto
and shall not in any way affect the meaning or interpretation of this Agreement.
Any matter disclosed pursuant to any Schedule of the Company Disclosure Schedule
shall not be deemed to be an admission or representation as to the materiality
of the item so disclosed.
SECTION 8.4 Amendments, Modification and Waiver.
(a) Except as may otherwise be provided herein, any provision of this
Agreement may be amended, modified or waived by the parties hereto, by action
taken by or authorized by their respective Board of Directors, prior to the
Closing Date if, and only if, such amendment or waiver is in writing and signed,
in the case of an amendment, by the Company and Parent or, in the case of a
waiver, by the party against whom the waiver is to be effective; provided that
after the adoption of this Agreement by the stockholders of the Company, no such
amendment shall be made except as allowed under applicable law.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 8.5 Successors And Assigns. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided that neither the Company nor Parent
may assign, delegate or otherwise transfer any of its rights or obligations
under this Agreement without the consent of the other parties hereto.
SECTION 8.6 Specific Performance. The parties acknowledge and agree that
any breach of the terms of this Agreement would give rise to irreparable harm
for which money damages would not be an adequate remedy and accordingly the
parties agree that, in addition to any other remedies, each shall be entitled to
enforce the terms of this Agreement by a decree of specific performance without
the necessity of proving the inadequacy of money damages as a remedy.
SECTION 8.7 Governing Law and Venue. 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 laws thereof) as to all matters, including matters of validity, construction,
effect, performance and remedies. The parties hereby (i) agree and consent to be
subject to the exclusive jurisdiction of any state or federal court in the State
of Delaware with respect to all actions and proceedings
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arising out of or relating to this Agreement (and each party agrees not to bring
any such action or proceeding in any other jurisdiction to which the other party
is subject); (ii) agree that all claims with respect to any such action or
proceeding may be heard and determined in such court; (iii) irrevocably waive
any defense of an inconvenient forum to the maintenance of any action or
proceeding in such court; (iv) consent to service of process by mailing or
delivering such service to the party at its respective principal business
address; and (v) agree that a final judgment in any such action or proceeding
from which there is no further appeal shall be conclusive and may be enforced in
any other jurisdictions by suit on the judgment or in any manner provided by
law.
SECTION 8.8 Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law, or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated herein are not affected in any manner materially
adverse to any party hereto. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in a mutually acceptable
manner.
SECTION 8.9 Third Party Beneficiaries. This Agreement is solely for the
benefit of the Company and its successors and permitted assigns, with respect to
the obligations of Parent and Merger Sub under this Agreement, and for the
benefit of Parent and Merger Sub, and their respective successors and permitted
assigns, with respect to the obligations of the Company under this Agreement,
and this Agreement shall not, except to the extent necessary to enforce the
provisions of Article I and Section 5.6 and 5.11 hereof be deemed to confer upon
or give to any other third party any remedy, claim, liability, reimbursement,
cause of action or other right.
SECTION 8.10 Entire Agreement. This Agreement, including any exhibits or
schedules hereto and the Confidentiality Agreement constitute the entire
agreement among the parties hereto with respect to the subject matter hereof and
supersedes all other prior agreements or understandings, both written and oral,
between the parties or any of them with respect to the subject matter hereof.
SECTION 8.11 Counterparts; Effectiveness. This Agreement may be signed in
any number of counterparts, each of which shall be deemed an original, with the
same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received counterparts hereof signed by all of the other parties hereto.
SECTION 8.12 Definitions. Each of the following terms is defined in the
Section set forth opposite such term.
TERM SECTION
---- -------
Acquisition Proposal........................................ 5.5(b)
Affected Employee........................................... 5.11(b)
Agreement................................................... Preamble
Antitrust Law............................................... 5.8(f)
Certificate of Merger....................................... 1.1(b)
Certificates................................................ 1.3(b)
Cleanup..................................................... 3.16(a)(i)
Closing..................................................... 1.7
Closing Date................................................ 1.7
Code........................................................ 1.4
Common Stock................................................ Preamble
Company..................................................... Preamble
Company Approval Matters.................................... 5.3(a)
Company Audited Balance Sheet............................... 3.8
Company Disclosure Schedule................................. 3
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TERM SECTION
---- -------
Company Group............................................... 3.11(a)
Company Intellectual Property............................... 3.17(a)
Company Interim Balance Sheet............................... 3.8
Company Material Adverse Effect............................. 3.1
Company Options............................................. 1.5(b)
Company SEC Documents....................................... 3.6
Company Securities.......................................... 3.4
Company Stockholders' Meeting............................... 3.9
Confidentiality Agreement................................... 5.4(b)
DGCL........................................................ Preamble
Dissenting Shares........................................... 1.2(c)(i)
DOJ......................................................... 7.1(b)
Effective Time.............................................. 1.1(b)
Environmental Claim......................................... 3.16(a)(ii)
Environmental Laws.......................................... 3.16(a)(iii)
ERISA....................................................... 3.12(a)
ERISA Affiliate............................................. 3.12(a)
ERISA Pension Plan.......................................... 3.12(o)
ESPP........................................................ 1.5(e)
Exchange Act................................................ 3.3(b)
Exchange Fund............................................... 1.3(a)
Foreign Authority........................................... 7.1(b)
Foreign Merger Laws......................................... 3.3(b)
Formula Value............................................... 1.5(a)
FTC......................................................... 7.1(b)
GAAP........................................................ 3.7
Governmental Entity......................................... 3.3(b)
Hazardous Materials......................................... 3.16(a)(iv)
HSR Act..................................................... 3.3(b)
Indemnitees................................................. 5.6(b)
Intellectual Property....................................... 3.17(c)
Licenses.................................................... 3.1
Lien........................................................ 3.5(b)
Merger...................................................... 1.1(a)
Merger Consideration........................................ 1.2(b)
Merger Sub.................................................. Preamble
MRG......................................................... 5.18
MRG Agreement............................................... 5.18
1992 Company Options........................................ 1.5(b)
1994 Company Options........................................ 1.5(a)
1992 Plan................................................... 1.5(b)
Option Cash-Out Amount...................................... 1.5(a)
Option Notice............................................... 1.5(a)
Parent...................................................... Preamble
Paying Agent................................................ 1.3(a)
Permits..................................................... 3.13(b)
Person...................................................... 1.3(a)
Plans....................................................... 3.12(a)
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TERM SECTION
---- -------
Potential Closing Problem................................... 6.3(g)
Proxy Statement............................................. 3.9, 5.3(b)
Regulated Products.......................................... 3.13(b)
Related Party............................................... 3.25
Release..................................................... 3.16(a)(v)
Representatives............................................. 5.4(a)
Rights Plan................................................. 3.4
SEC......................................................... 1.5(f)
Secretary Of State.......................................... 1.1(b)
Securities Act.............................................. 1.5(f)
Special Committee........................................... 3.2(a)
Subsidiary.................................................. 3.1
Superior Proposal........................................... 5.5(c)
Surviving Corporation....................................... 1.1(a)
Tax Return.................................................. 3.11(b)
Taxes....................................................... 3.11(b)
Terminating Company Breach.................................. 7.1(g)
Terminating Parent Breach................................... 7.1(h)
Termination Fee............................................. 7.3(a)
Unit Cash-Out Amount........................................ 1.5(c)
Units....................................................... 1.5(c)
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement and Plan
of Merger to be executed by their duly authorized respective officers as of the
date first written above.
MEDTRONIC, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President and Chief
Development Officer
MMI MERGER SUB, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
MINIMED INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and Chief Operating
Officer
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EXHIBIT A
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
MEDTRONIC MINIMED, INC.
ARTICLE 1
NAME
The name of the corporation shall be Medtronic MiniMed, Inc.
ARTICLE 2
REGISTERED OFFICE AND AGENT
The address of the registered office of the corporation in the State of
Delaware is ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇,
Delaware 19801. The name of its registered agent at such address is The
Corporation Trust Company.
ARTICLE 3
PURPOSES
The nature of the business or purposes to be conducted or promoted by the
corporation is to engage in any lawful acts and activities for which
corporations may be organized under the
Delaware General Corporation Law.
ARTICLE 4
STOCK
The aggregate number of shares the corporation has authority to issue shall
be 2,500 shares of Common Stock, $.01 par value. Holders of Common Stock shall
be entitled to one vote for each share of Common Stock held of record.
ARTICLE 5
RIGHTS OF STOCKHOLDERS
5.1) No Preemptive Rights. No holder of shares of the corporation of any
class now or hereafter authorized has any preferential or preemptive right to
subscribe for, purchase or receive any shares of the corporation of any class
now or hereafter authorized, or any options or warrants for such shares, which
may at any time be issued, sold or offered for sale by the corporation.
5.2) No Cumulative Voting Rights. No holder of shares of the corporation of
any class now or hereafter authorized shall be entitled to cumulative voting.
ARTICLE 6
MEETINGS AND BOOKS
6.1) Meetings of Stockholders and Election of Directors. Meetings of
stockholders may be held within or outside the State of
Delaware, as the Bylaws
may provide. Elections of directors need not be by written ballot unless and
except to the extent that the Bylaws so provide.
6.2) Corporate Books. The books of the corporation may be kept within or
(subject to any provision contained in the statutes) outside the State of
Delaware at such place or places as may be designated from time to time by the
Board of Directors or in the Bylaws of the corporation.
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ARTICLE 7
LIMITATION OF DIRECTOR LIABILITY
7.1) Limitation of Liability. To the fullest extent permitted by the
Delaware General Corporation Law as the same exists or as may hereafter be
amended, a director of the corporation shall not be personally liable to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director. If the Delaware General Corporation Law is hereafter amended
to authorize corporate action further eliminating or limiting the personal
liability of directors, then the liability of a director of the corporation
shall be eliminated or limited to the fullest extent permitted by the Delaware
General Corporation Law, as so amended.
7.2) Amendment of this Article. Neither any amendment nor repeal of this
Article 7, nor the adoption of any provision of this Amended and Restated
Certificate of Incorporation inconsistent with this Article 7, shall eliminate
or reduce the effect of this Article 7 or adversely affect any right or
protection of a director of the corporation in respect of any act, omission or
matter occurring, or any cause of action, suit, or claim that, but for this
Article 7, would accrue or arise, prior to such amendment, repeal, or adoption
of an inconsistent provision.
ARTICLE 8
BYLAWS
The Board of Directors is expressly authorized to make, alter and repeal
Bylaws of this corporation, subject to the power of the stockholders to change
or repeal such Bylaws and subject to any other limitations on such authority
provided by the Delaware General Corporation Law.
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EXHIBIT B
AGREEMENT TO FACILITATE MERGER
DATE:
---------------, 2001
PARTIES:
Medtronic, Inc., (hereinafter "Parent")
a Minnesota corporation
and
------------------------, an individual officer and/or director
of
MiniMed Inc. (hereinafter "Security Holder")
RECITALS:
A. Security Holder is the legal or beneficial owner of shares of Common
Stock of
MiniMed Inc., a Delaware corporation (the "Company"), and/or the holder
of options, warrants, or other rights to acquire shares of Company Common Stock.
B. Parent, the Company, and a wholly-owned subsidiary of Parent are
entering, or have entered, into an Agreement and Plan of Merger (the "
Merger
Agreement") pursuant to which it is proposed that Parent's subsidiary will merge
with and into the Company (the "Merger") and as a result of which the
outstanding shares of Company Common Stock shall be converted into the right to
receive a cash payment.
C. Security Holder deems it to be in Security Holder's best interest and
in the best interests of the Company and all other stockholders of the Company
that the
Merger Agreement be approved, ratified, and confirmed by the
stockholders of the Company, and it is a condition to Parent's obligations under
the
Merger Agreement that Security Holder enter into this Agreement.
D. It is understood and acknowledged by Security Holder that ▇▇▇▇▇▇'s
execution of the
Merger Agreement is being done in reliance, in part, upon the
contemporaneous execution and delivery of this Agreement, that Parent will incur
substantial expenses proceeding toward consummation of the Merger as
contemplated by the
Merger Agreement, and that such expenses will be undertaken,
in part, in reliance upon and as a result of the agreements and undertakings of
Security Holder set forth herein.
NOW, THEREFORE, in consideration of the foregoing, and in order to induce
Parent to execute the
Merger Agreement and to proceed as contemplated by the
Merger Agreement toward the consummation of the Merger, and for other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto agree as follows:
AGREEMENTS:
1. Vote in Favor of Merger. During the period commencing on the date hereof
and terminating upon the earlier of (i) the effective time of the Merger, and
(ii) the termination of the
Merger Agreement in accordance with its terms,
Security Holder agrees to vote (or cause to be voted) all shares of Company
Common Stock presently beneficially owned by Security Holder, and all shares of
Company Common Stock with respect to which Security Holder in the future
acquires beneficial ownership, at any meeting of the stockholders of the
Company, and in any action by written consent of the stockholders of the
Company, in favor of the approval, consent, and ratification of the
Merger
Agreement and the Merger and against any proposal or action that could impede,
interfere, frustrate, nullify or discourage the Merger, could facilitate an
acquisition of the Company, in any manner, by a party (other than Parent), or
could reasonably result in any of the conditions to the Company's obligations
under the
Merger Agreement not being fulfilled. To the extent inconsistent with
the foregoing provisions of this Section 1, Security 1-folder hereby revokes any
and all previous proxies with respect to any shares of Company Common Stock that
Security Holder owns or has the
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right to vote. Nothing in this Agreement shall be deemed to restrict or limit
Security Holder's right to act in his capacity as an officer or director of the
Company consistent with his fiduciary obligations in such capacity.
2. Representations and Warranties of Security Holder. Security Holder
represents and warrants to Parent that Security Holder has the legal capacity to
enter into and perform all of Security Holder's obligations under this
Agreement. The execution, delivery, and performance of this Agreement by
Security Holder will not violate any other agreement to which Security Holder is
a party, including, without limitation, any voting agreement, stockholders
agreement, or voting trust. This Agreement has been duly executed and delivered
by Security Holder and constitutes a legal, valid, and binding agreement of
Security Holder, enforceable in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium, and similar laws, now or hereafter in
effect.
3. Successors and Assigns. This Agreement shall be binding upon any
purchasers, donees, pled gees, and other transferees of Company Common stock
legally or beneficially owned by Security Holder. During the period commencing
on the date hereof and terminating upon the earlier of the effective time of the
Merger and the termination of the Merger Agreement in accordance with its terms,
Security Holder agrees not to make any sales, gifts, transfers, pledges, or
other dispositions of Company Common Stock without first making any such
transferee or pledgee fully aware of Security Holder's obligations under this
Agreement and obtaining such transferee's or pledgee's written agreement to
comply with all terms hereof.
4. Injunctive Relief. Security ▇▇▇▇▇▇ agrees that in the event of Security
▇▇▇▇▇▇'s breach of any provision of this Agreement, Parent may be without an
adequate remedy at law. Security ▇▇▇▇▇▇ therefore agrees that in the event of
Security ▇▇▇▇▇▇'s breach of any provision of this Agreement, Parent may elect to
institute and prosecute proceedings in any court of competent jurisdiction to
enforce specific performance or to enjoin the continuing breach of such
provision, as well as to obtain damages for breach of this Agreement. By seeking
or obtaining any such relief, Parent will not be precluded from seeking or
obtaining any other relief to which it may be entitled.
5. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same document.
6. Further Assurances. Security Holder shall execute and deliver such
additional documents and take such further action as may be necessary or
desirable to consummate the transactions contemplated by this Agreement.
7. Third-Party Beneficiaries. Nothing in this Agreement, expressed or
implied, shall be construed to give any person other than the parties hereto any
legal or equitable right, remedy. or claim under or by reason of this Agreement
or any provision contained herein.
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 Delaware principles of conflicts of
laws).
9. Effectiveness. If this Agreement is executed by Security Holder prior to
the approval of the Merger Agreement by the Company's Board of Directors, then
this Agreement shall be subject to, and shall become effective only upon, the
approval of the Merger Agreement by the Company's Board of Directors and the
execution and delivery of the Merger Agreement by the Company, Parent and
Parent's subsidiary. This Agreement shall terminate upon termination of the
Merger Agreement in accordance with its terms.
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IN WITNESS WHEREOF, ▇▇▇▇▇▇ has caused this Agreement to Facilitate Merger
to be executed by its duly authorized officer, and Security ▇▇▇▇▇▇ has executed
this Agreement, as of the date and year first above written.
Medtronic, Inc
By:
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Its:
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[Signature]
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[Print Name]
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