Exhibit 10.1
AMENDED AND RESTATED
TRANSACTION AGREEMENT
among
BOSTON SCIENTIFIC CORPORATION,
NEMO I ACQUISITION, INC.,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
(in his capacity as Stockholders' Representative)
and
RUBICON MEDICAL CORPORATION
Dated as of April 13, 2005
TABLE OF CONTENTS
Page
Article I
DEFINITIONS
Section 1.01. Definitions.....................................................2
Article II
SUBSCRIPTION
Section 2.01. Subscription....................................................9
Section 2.02. Closing.........................................................9
Article III
the EXERCISE AND THE offer
Section 3.01. The Exercise and the Offer......................................9
Section 3.02. Exchange of Certificates.......................................12
Section 3.03. Company Action.................................................15
Section 3.04. Directors......................................................16
Article IV
THE MERGER
Section 4.01. The Merger.....................................................17
Section 4.02. Effective Time; Closing........................................17
Section 4.03. Effect of the Merger...........................................18
Section 4.04. Conversion of Securities.......................................18
Section 4.05. Stock Transfer Books...........................................18
Section 4.06. Certificate of Incorporation; By-laws..........................18
Section 4.07. Directors and Officers.........................................19
Section 4.08. Company Stockholders' Meeting..................................19
Section 4.09. Preparation of Merger Registration Statement and Merger
Proxy Statement/Prospectus...................................19
Section 4.10. Appraisal Rights/Dissenting Shares.............................20
Article V
COMPANY STOCK OPTIONS; AFFILIATES; EARN-OUT PAYMENTS
Section 5.01. Company Stock Options..........................................20
Section 5.02. Affiliates.....................................................21
Section 5.03. Earn-out Payments..............................................21
Section 5.04. Disputes.......................................................22
Article VI
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 6.01. Organization and Qualification; Subsidiaries...................23
Section 6.02. Certificate of Incorporation and By-laws.......................23
Section 6.03. Capitalization.................................................23
Section 6.04. Authority Relative to this Agreement...........................24
Section 6.05. No Conflict; Required Filings and Consents.....................25
Section 6.06. Permits; Compliance............................................25
Section 6.07. SEC Filings; Financial Statements..............................27
Section 6.08. Absence of Certain Changes or Events...........................28
Section 6.09. Absence of Litigation..........................................28
Section 6.10. Employee Benefit Plans.........................................28
Section 6.11. Labor and Employment Matters...................................30
Section 6.12. Real Property and Leases.......................................31
Section 6.13. Intellectual Property..........................................31
Section 6.14. Taxes..........................................................33
Section 6.15. Environmental Matters..........................................34
Section 6.16. Material Contracts.............................................34
Section 6.17. Insurance......................................................35
Section 6.18. Information to Be Supplied.....................................36
Section 6.19. Brokers........................................................37
Section 6.20. Opinion of Advisor.............................................37
Article VII
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
Section 7.01. Corporate Organization.........................................37
Section 7.02. Certificate of Incorporation and By-laws.......................37
Section 7.03. Capitalization.................................................37
Section 7.04. Authority Relative to this Agreement...........................38
Section 7.05. No Conflict; Required Filings and Consents.....................38
Section 7.06. Permits; Compliance............................................39
Section 7.07. SEC Filings; Financial Statements..............................39
Section 7.08. Absence of Certain Changes or Events...........................40
Section 7.09. Operations of Purchaser........................................40
Section 7.10. Information to Be Supplied.....................................40
Section 7.11. Brokers........................................................41
Section 7.12. Financial Projections..........................................41
Section 7.13. Investor Representations.......................................41
Article VIII
CONDUCT OF BUSINESS PENDING THE MERGER
Section 8.01. Conduct of Business by the Company.............................41
Section 8.02. Intellectual Property..........................................44
Article IX
ADDITIONAL AGREEMENTS
Section 9.01. Access to Information; Confidentiality.........................44
Section 9.02. No Solicitation of Transactions................................45
Section 9.03. Notification of Certain Matters................................46
Section 9.04. Company Affiliates.............................................46
Section 9.05. Further Action; Reasonable Best Efforts........................46
Section 9.06. NYSE Listing...................................................47
Section 9.07. Public Announcements...........................................47
Section 9.08. Management Team................................................47
Section 9.09. Directors' and Officers' Indemnification.......................47
Article X
CONDITIONS TO THE MERGER
Section 10.01. Conditions to the Merger......................................48
Article XI
TERMINATION, AMENDMENT AND WAIVER
Section 11.01. Termination...................................................49
Section 11.02. Effect of Termination.........................................50
Section 11.03. Fees and Expenses.............................................50
Section 11.04. Amendment.....................................................50
Section 11.05. Waiver........................................................50
Article XII
GENERAL PROVISIONS
Section 12.01. Non-Survival of Representations, Warranties
and Agreements..............................................51
Section 12.02. Withholding Rights............................................51
Section 12.03. Notices.......................................................51
Section 12.04. Severability..................................................52
Section 12.05. Entire Agreement; Assignment..................................52
Section 12.06. Parties in Interest...........................................52
Section 12.07. Specific Performance..........................................53
Section 12.08. Governing Law.................................................53
Section 12.09. Waiver of Jury Trial..........................................53
Section 12.10. Headings......................................................53
Section 12.11. Counterparts..................................................53
Section 12.12. Attorneys' Fees...............................................54
AMENDED AND RESTATED
TRANSACTION AGREEMENT
This AMENDED AND RESTATED TRANSACTION AGREEMENT, dated as of April 13,
2005 (this "Agreement"), is entered into among Boston Scientific Corporation, a
Delaware corporation ("Parent"), Nemo I Acquisition, Inc., a Delaware
corporation and a wholly owned subsidiary of Parent ("Purchaser"), Rubicon
Medical Corporation, a Delaware corporation (the "Company"), and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, in his capacity as stockholders' representative ("▇▇▇▇▇▇" or
"Stockholders' Representative"). Parent, Purchaser, the Company and ▇▇▇▇▇▇ are
sometimes collectively referred to herein as the "Parties").
WHEREAS, pursuant to an agreement dated July 17, 2003 (the "Term
Sheet") among Parent, the Company, ▇▇▇▇▇▇ Family Enterprises, a Utah family
limited partnership ("BFE"), ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("▇▇▇▇▇▇") and ▇▇▇▇▇▇ (▇▇▇▇▇▇, BFE
and ▇▇▇▇▇▇, together with ▇▇▇▇▇▇▇ ▇. and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Family Limited
Partnership, a Utah family limited partnership, collectively, the "Controlling
Stockholders"), Parent purchased 2,000,000 shares of the Company's common stock,
par value $0.001 ("Common Stock"), for $2 million in cash (the "First Equity
Investment");
WHEREAS, on October 29, 2003, the Parties entered into the original
Transaction Agreement, as amended as of September 30, 2004 (the "Original
Agreement") pursuant to which Parent purchased, and the Company issued to
Parent, 1,090,147 of shares of Series A Convertible Preferred Stock (the
"Preferred Stock") for $15 million in cash, which have the terms and conditions
set forth in the Certificate of Designation attached hereto as Exhibit A,
including that such shares of Preferred Stock are convertible into such number
of shares of Common Stock that, when aggregated with the Common Stock issued
pursuant to the First Equity Investment, shall constitute 18% of the equity of
the Company on a Fully Diluted Basis (as defined below) as of the date of
issuance of the Preferred Stock;
WHEREAS, Parent, Purchaser and the Controlling Stockholders entered
into option agreements, originally dated as of October 29, 2003 and amended and
restated as of the date hereof (the "Option Agreements"), providing that, among
other things, (i) each of the Controlling Stockholders have granted an option to
Parent and Purchaser to purchase all of their shares of Common Stock and all of
their options to purchase Common Stock for the consideration set forth therein
payable in cash (the "Purchase Option") and (ii) Parent may require the
Controlling Stockholders, in lieu of selling their equity interests in the
Company to Purchaser as described in clause (i), to tender their shares of
Common Stock into the Offer (as defined below) in exchange for, at the option of
Parent or Purchaser, either cash or shares of common stock of Parent, par value
$0.01 per share ("Parent Common Stock") (such option, the "Offer Option");
WHEREAS, as a condition to the willingness of the Company to amend the
Original Agreement as set forth herein, and the willingness of the Controlling
Stockholders to amend the Original Option Agreements as set forth in the Option
Agreement, Parent and Purchaser have agreed to exercise either the Purchase
Option or the Offer Option concurrently with the execution of this Agreement;
WHEREAS, in the event the Purchase Option is exercised, as soon as
practicable after the closing of the acquisition by Parent or Purchaser from the
Controlling Stockholders of the shares of Common Stock and options to purchase
Common Stock pursuant to the exercise of the Purchase Option (the "Purchase
Option Closing"), Purchaser shall commence a cash tender offer to acquire all of
the issued and outstanding shares of Common Stock upon the terms and subject to
the conditions of this Agreement and such cash tender offer;
WHEREAS, in the event the Offer Option is exercised, as soon as
practicable after Purchaser gives written notice to the Controlling Stockholders
of its exercise of the Offer Option, Purchaser shall commence an exchange offer
or a cash tender offer (either such exchange offer or cash tender offer, as the
case may be, the "Offer") to acquire all of the issued and outstanding shares of
Common Stock upon the terms and subject to the conditions of this Agreement and
the Offer;
WHEREAS, the Board of Directors of the Company (the "Company Board")
has, subject to the provisions of this Agreement, unanimously resolved to
recommend that holders of shares of Common Stock tender their shares of Common
Stock into the Offer, if made;
WHEREAS, in furtherance of the transactions contemplated hereby, each
of the Board of Directors of Purchaser and the Company Board has approved this
Agreement and declared its advisability and approved the merger (the "Merger")
of Purchaser with and into the Company in accordance with the General
Corporation Law of the State of Delaware (the "DGCL"), upon the terms and
subject to the conditions set forth herein; and
WHEREAS, the Parties wish to amend and restate the Original Agreement
in its entirety as follows.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, Parent, Purchaser and the Company hereby agree as follows:
Article I.
DEFINITIONS
Section 1.01. Definitions. (a) For purposes of this Agreement:
"affiliate" of a specified person means a person who, directly
or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such specified person.
"Average Parent Stock Price" means the average of the per
share closing prices of Parent Common Stock on the NYSE (as reported in
The Wall Street Journal) during the 20 consecutive trading days ending
on (and including) the trading day that is two trading days prior to
(i) the date on which the Exchange Offer Registration Statement becomes
effective if the Offer Option is exercised or, (ii) any other
applicable date specified herein.
"beneficial owner", with respect to any Shares, has the
meaning ascribed to such term under Rule 13d-3(a) of the Exchange Act.
"business day" means any day on which the principal offices of
the SEC in Washington, D.C. are open to accept filings, or, in the case
of determining a date when any payment is due, any day on which banks
are not required or authorized to close in The City of New York.
"Cash Consideration" means $1.50 per Share, together with any
rights to receive the Earn-out Payments.
"Cause" means the occurrence of any of the following events:
(i) a continuing failure or refusal of a person after written notice
from the Company to perform the duties required of him or her as an
employee of the Company or its Subsidiary; (ii) any continuing willful
misconduct by a person after written notice from the Company relating,
directly or indirectly, to the Company or its Subsidiary, or any
continuing breach by a person after written notice from the Company of
any policy of the Company, as reasonably determined by the Company
Board; (iii) any misuse or misappropriation by a person of property or
assets of the Company or its Subsidiary; (iv) any willful violation by
a person of any Law applicable to the business of the Company or its
Subsidiary, or a person's commission of a common law fraud or
conviction of a crime; or (v) any other willful misconduct by a person
that is injurious to the financial condition or business reputation of,
or is otherwise injurious to, the Company or its Subsidiary; provided,
however, that Cause shall not exist unless the failure, breach, or
other misconduct is material, and provided further that in the case of
▇▇▇▇▇▇, Cause shall have the meaning set forth in his employment
agreement with the Company.
"Code" means United States Internal Revenue Code of 1986, as
amended from time to time.
"Company Licensed Intellectual Property" means all (i)
licenses of Intellectual Property to the Company by any third party and
(ii) licenses of Intellectual Property by the Company to any third
party.
"Company Material Adverse Effect" means any event,
circumstance, change or effect that, individually or in the aggregate
with all other events, circumstances, changes and effects, is or is
reasonably likely to be materially adverse to (i) the business,
financial condition, prospects, assets, liabilities, intellectual
property or results of operations of the Company and its Subsidiary
taken as a whole or (ii) the ability of the Company to consummate the
Transactions; provided, however, that the mere fact that the Company is
operating at a loss and/or has exhausted its cash assets shall not, in
and of itself, constitute a "Company Material Adverse Effect".
"Company Owned Intellectual Property" means all Intellectual
Property owned by the Company.
"Company Stock Option Plan" means the Company 2001 Stock Plan,
as amended through the date of this Agreement.
"Company Stock Option" means any option outstanding, whether
or not exercisable and whether or not vested, under the Company Stock
Option Plan.
"Consideration" means either the Cash Consideration or the
Share Consideration, as the case may be.
"control" (including the terms "controlled by" and "under
common control with") means the possession, directly or indirectly, or
as trustee or executor, of the power to direct or cause the direction
of the management and policies of a person, whether through the
ownership of voting securities, as trustee or executor, by contract or
credit arrangement or otherwise.
"Earn-out Payments" means the Milestone 1 Earn-out Payment,
the Milestone 2 Earn-out Payment and the Milestone 3 Earn-out Payment.
"Earn-out Period" means the first five years following the
achievement of Milestone 1.
"Environmental Law" means any United States federal, state,
local or non-United States laws relating to (i) releases or threatened
releases of Hazardous Substances or materials containing Hazardous
Substances, (ii) the manufacture, handling, transport, use, treatment,
storage or disposal of Hazardous Substances or materials containing
Hazardous Substances or (iii) pollution or protection of the
environment, health, safety or natural resources.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Exchange Ratio" means the quotient determined by dividing
$1.50 by the Average Parent Stock Price and rounding the result to the
nearest one thousandth of a share.
"Filter" means a medical device that (i) includes a membrane
that is formed into a sack, together with a guidewire and wire
mechanism for constraining and deploying the mouth of the sack, which,
when deployed, approximates the walls of a blood vessel thereby
allowing the membrane to capture particles in the blood stream, (ii) is
the same as, or substantially the same as, the filter device used by
the Company in its European clinical trials, and (iii) would otherwise
infringe a valid and enforceable patent claim of the Company's
Intellectual Property.
"Former Stockholders Committee" means a committee consisting
of the Controlling Stockholders and a third party who may or may not be
a former stockholder of the Company to be selected by the Controlling
Stockholders.
"Fully Diluted Basis" means after taking into account all
outstanding shares of Common Stock and assuming the exercise,
conversion or exchange of all options, warrants, convertible or
exchangeable securities and similar rights in respect of shares of
Common Stock and the issuance of all shares of Common Stock that the
Company is authorized or obligated to issue thereunder.
"Hazardous Substances" means (i) those substances defined in
or regulated under the following United States federal statutes and
their state counterparts, as each may be amended from time to time, and
all regulations thereunder: the Hazardous Materials Transportation Act,
the Resource Conservation and Recovery Act, the Comprehensive
Environmental Response, Compensation and Liability Act, the Clean Water
Act, the Safe Drinking Water Act, the Atomic Energy Act, the Federal
Insecticide, Fungicide, and Rodenticide Act and the Clean Air Act; (ii)
petroleum and petroleum products; (iii) natural gas, synthetic gas and
any mixtures thereof; and (iv) polychlorinated biphenyls, asbestos and
radon.
"Intellectual Property" means (i) United States and
international patents, patent applications and statutory invention
registrations, (ii) trademarks, service marks, trade dress, logos,
trade names, corporate names and other source identifiers, and
registrations and applications for registration thereof, (iii)
copyrightable works, copyrights, and registrations and applications for
registration thereof and (iv) confidential and proprietary information,
including trade secrets and know-how.
"knowledge" means, with respect to the Company, the knowledge
of the persons set forth on Exhibit 1.01 attached hereto after due
inquiry by such persons of employees of the Company who shall
reasonably be expected to have knowledge of the subject matter of such
inquiry.
"Milestone 1" means the date on which the Company, Parent,
Purchaser or any surviving or successor entity receives approval from
the FDA (which approval is not subject to limitations that would
inhibit marketing or selling to a significant portion of the market for
the approved indication and is predicated on clinical trial data
collected by the Company or Parent) for commercial release of the
Filter or another device of Parent, Purchaser or of another subsidiary
or controlled affiliate of Parent that (a) incorporates the Company's
constraint and actuation technologies, (b) would otherwise infringe a
valid and enforceable patent claim of the Company's Intellectual
Property, and (c) is for an embolic protection indication for one of
the following disease or anatomical indications: (i) carotid artery,
(ii) acute myocardial infarction, (iii) native coronary vessels, (iv)
coronary vein grafts or (v) renal arteries.
"Milestone 2" means when Net Sales of the Filter or of any
other device of Parent, Purchaser or of any other subsidiary or
controlled affiliate of Parent that (a) incorporates the Company's
constraint and actuation technologies, (b) would otherwise infringe a
valid and enforceable patent claim of the Company's Intellectual
Property, and (c) is for an embolic protection indication for one of
the following disease or anatomical indications: (i) carotid artery,
(ii) acute myocardial infarction, (iii) native coronary vessels, (iv)
coronary vein grafts or (v) renal arteries, exceed $50 million during a
period of 12 or fewer consecutive months.
"Milestone 3" means when Net Sales of the Filter or of any
other device of Parent, Purchaser or of any other subsidiary or
controlled affiliate of Parent that (a) incorporates the Company's
constraint and actuation technologies, (b) would otherwise infringe a
valid and enforceable patent claim of the Company's Intellectual
Property, and (c) is for an embolic protection indication for one of
the following disease or anatomical indications: (i) carotid artery,
(ii) acute myocardial infarction, (iii) native coronary vessels, (iv)
coronary vein grafts or (v) renal arteries, exceed $100 million during
a period of 12 or fewer consecutive months.
"Net Sales" means the aggregate amount of consolidated net
sales recorded by Parent from the sales of the products in accordance
with United States generally accepted accounting principles,
consistently applied by Parent across all similar product lines, in
connection with the preparation of its financial statements as publicly
reported.
"NYSE" means The New York Stock Exchange.
"Option" means either the Purchase Option or the Offer Option,
as the case may be.
"Option Period" means the period during which Parent may
exercise an Option, which commences on the date of this Agreement and
terminates on the calendar day following such date.
"Order" means any law, rule, regulation, judgment, decree,
executive order or award.
"Parent Material Adverse Effect" means any event,
circumstance, change or effect that, individually or in the aggregate
with all other events, circumstances, changes and effects, is or is
reasonably likely to be materially adverse to (i) the business,
financial condition, prospects, assets, liabilities or results of
operations of Parent and its subsidiaries taken as a whole or (ii) the
ability of Parent to consummate the Transactions.
"person" means an individual, corporation, partnership,
limited partnership, limited liability company, syndicate, person,
trust, association or entity or government, political subdivision,
agency or instrumentality of a government.
"Registration Rights Agreement" means the agreement entered
into concurrently herewith by the Company, Parent and Purchaser.
"Share" means one outstanding share of Common Stock.
"Share Consideration" means the number of shares of Parent
Common Stock equal to the Exchange Ratio, together with any rights to
receive cash in lieu of fractional shares pursuant to Section 3.02 and
the Earn-out Payments.
"subsidiary" or "subsidiaries" of the Company, the Surviving
Corporation, Parent or any other person means an affiliate controlled
by such person, directly or indirectly, through one or more
intermediaries.
"Tax" or "Taxes" means any and all taxes, fees, levies,
duties, tariffs, imposts and other charges of any kind (together with
any and all interest, penalties, additions to tax and additional
amounts imposed with respect thereto) imposed by any Governmental
Authority or taxing authority, including: taxes or other charges on or
with respect to income, franchise, windfall or other profits, gross
receipts, property, sales, use, capital stock, payroll, employment,
social security, workers' compensation, unemployment compensation or
net worth; taxes or other charges in the nature of excise, withholding,
ad valorem, stamp, transfer, value-added or gains taxes; license,
registration and documentation fees; and customers' duties, tariffs and
similar charges.
"Tax Return" means any return, report, schedule, declaration,
estimate or election (including attachments to any of the foregoing)
filed or required to be filed with any Governmental Authority or taxing
authority with respect to Taxes.
"$" means United States Dollars.
(b) The following terms have the meaning set forth in the Sections set
forth below:
Defined Term Location of Definition
------------ ----------------------
Action.............................................. ss. 6.09
Activities to Date.................................. ss. 6.06(b)
Agreement........................................... Preamble
▇▇▇▇▇▇.............................................. Recitals
BFE................................................. Recitals
Blue Sky Laws....................................... ss. 6.03(c)
Cash Offer Documents................................ ss. 3.01(c)
Cash Schedule TO.................................... ss. 3.01(c)
Cash Tender Offer................................... ss. 3.01(a)
Certificate of Merger............................... ss. 4.02
Certificates........................................ ss. 3.02(a)
Common Stock........................................ Recitals
Company............................................. Preamble
Company Affiliate................................... ss. 9.04
Company Board....................................... Recitals
Company Disclosure Schedule......................... ss. 6.03(a)
Company Licenses ................................... ss. 6.06(b)
Company Permits..................................... ss. 6.06(a)
Company Preferred Stock............................. ss. 6.03(a)
Company Products.................................... ss. 6.06(b)
Company SEC Reports................................. ss. 6.07(a)
Company Stockholders' Meeting....................... ss. 4.08(a)
Competing Transaction............................... ss. 9.02(c)
Confidentiality Agreement........................... ss. 9.01(b)
Continuing Directors................................ ss. 3.04(a)
Controlling Stockholders............................ Recitals
DGCL................................................ Recitals
Dissenting Shares................................... ss. 4.10(a)
Effective Time...................................... ss. 4.02
Earn-out Recipients ................................ ss. 5.03(a)
Environmental Permits............................... ss. 6.15
ERISA............................................... ss. 6.10(a)
Exchange Agent...................................... ss. 3.02(a)
Exchange Fund....................................... ss. 3.02(a)
Exchange Offer ..................................... ss. 3.01(a)
Exchange Offer Documents............................ ss. 3.01(d)
Exchange Offer Prospectus........................... ss. 3.01(d)
Exchange Offer Registration Statement............... ss. 3.01(d)
Exchange Offer Schedule TO ......................... ss. 3.01(d)
FDA................................................. ss. 6.06(b)
First Equity Investment............................. Recitals
GAAP................................................ ss. 6.07(b)
Governmental Authority.............................. ss. 6.05(b)
HSR Act............................................. ss. 6.05(b)
Indemnification Agreements.......................... ss. 9.09
Initial Expiration Date............................. ss. 3.01(b)
IRS................................................. ss. 6.10(a)
Law................................................. ss. 6.05(a)
Liens............................................... ss. 6.12(b)
▇▇▇▇▇▇.............................................. Preamble
Material Contracts.................................. ss. 6.16(a)
Merger.............................................. Recitals
Merger Proxy Statement/Prospectus................... ss. 4.09
Merger Registration Statement....................... ss. 4.09
Milestone 1 Earn-out Payment........................ ss. 5.03(a)
Milestone 2 Earn-out Payment........................ ss. 5.03(a)
Milestone 3 Earn-out Payment........................ ss. 5.03(a)
Offer............................................... Recitals
Offer Documents..................................... ss. 3.01(f)
Offer Option........................................ Recitals
Offer to Purchase................................... ss. 3.01(c)
Option Agreements................................... Recitals
Option Payment...................................... ss. 5.01
Parent.............................................. Preamble
Parent Common Stock................................. Recitals
Parent Permits...................................... ss. 7.06
Parent SEC Reports.................................. ss. 7.07
Parties............................................. Preamble
Paying Agent........................................ ss. 3.02(b)
Plans............................................... ss. 6.10(a)
Preferred Shares.................................... ss. 2.01
Preferred Stock..................................... Recitals
Purchase Option..................................... Recitals
Purchase Option Closing............................. Recitals
Purchaser........................................... Preamble
Representatives..................................... ss. 9.01(a)
Schedule TO......................................... ss. 3.01(f)
SEC................................................. ss. 3.01(b)
Second-Step Merger.................................. ss. 3.01(a)
Securities Act...................................... ss. 3.01(d)
Stockholders' Representative........................ Preamble
Subscription Price.................................. ss. 2.01
Subsidiary.......................................... ss. 6.01(a)
Superior Proposal................................... ss. 9.02(d)
Surviving Corporation............................... ss. 4.01(a)
Term Sheet.......................................... Recitals
Transactions........................................ ss. 3.03(a)
2003 Balance Sheet.................................. ss. 6.07(c)
Article II.
SUBSCRIPTION
Section 2.01. Subscription. Concurrently with the execution of the Original
Agreement, the Company issued, sold and delivered to Parent, and Parent
subscribed for, purchased and acquired from the Company, 1,090,147 shares of
Preferred Stock (the "Preferred Shares") for an aggregate subscription price of
$15 million (the "Subscription Price").
Section 2.02. Closing. Concurrently with the execution of the Original
Agreement, the Company delivered to Parent a certificate representing the
Preferred Shares and Parent delivered to the Company the Subscription Price by
wire transfer in immediately available funds to an account designated in writing
by the Company.
Article III.
THE EXERCISE AND THE OFFER
Section 3.01. The Exercise and the Offer. (a) (i) Concurrently with the
execution of this Agreement, Parent or Purchaser shall exercise either the
Purchase Option or the Offer Option. As promptly as reasonably practicable after
the Purchase Option Closing or the exercise of the Offer Option, Purchaser shall
(1) if Parent elected to issue shares of Parent Common Stock as consideration in
its exercise of the Offer Option, commence the Offer to exchange the Share
Consideration for each Share (the "Exchange Offer") or (2) if Parent or
Purchaser elected to exercise the Purchase Option or elected to pay cash as
consideration in its exercise of the Offer Option, commence the Offer as a cash
tender offer for the Cash Consideration (the "Cash Tender Offer").
(ii) Second-Step Merger. Subject to the provisions of this Agreement,
following acceptance of Shares pursuant to the Offer, Purchaser shall effect a
second-step Merger to merge Purchaser with and into the Company, as more fully
set forth in Article IV (the "Second-Step Merger").
(b) The obligation of Purchaser to accept Shares tendered pursuant to
the Offer shall be subject to the conditions set forth in Annex A. Purchaser
expressly reserves the right to waive any such condition, to increase the
Consideration, and to make any other changes in the terms and conditions of the
Offer; provided, however, that no change may be made which decreases the
Consideration or which reduces the maximum number of Shares to be purchased in
the Offer or which imposes conditions to the Offer in addition to those set
forth in Annex A. Notwithstanding the foregoing, Purchaser may, without the
consent of the Company, (i) extend the Offer for one or more periods (of not
more than 10 business days each) beyond the scheduled expiration date, which
shall initially be 30 days following the commencement of the Offer (the "Initial
Expiration Date"), if, at any scheduled expiration of the Offer, any of the
conditions to Purchaser's obligation to accept Shares tendered pursuant to the
Offer shall not be satisfied or waived or (ii) extend the Offer for any period
required by any rule, regulation or interpretation of the U.S. Securities and
Exchange Commission (the "SEC"), or the staff thereof, applicable to the Offer.
Subject to the terms and conditions of the Offer, this Agreement and the
satisfaction (or waiver to the extent permitted by this Agreement) of the
conditions to the Offer, Purchaser shall accept all Shares validly tendered and
not withdrawn pursuant to the Offer as soon as practicable after the applicable
expiration date of the Offer and shall pay the Consideration for all such Shares
promptly after acceptance. Notwithstanding the immediately preceding sentence
and subject to the applicable rules of the SEC and the terms and conditions of
the Offer, Purchaser expressly reserves the right to delay payment for or
exchange of, as the case may be, Shares in order to comply in whole or in part
with Laws; provided that any such delay shall not extend beyond the date that is
180 days following the acceptance of the Shares for payment; provided, further,
that the Consideration for such accepted Shares shall be deposited with the
Exchange Agent or the Paying Agent, as applicable, during the period from the
date that Parent or Purchaser would otherwise have been required to pay for
Shares in accordance with the prompt payment rules of the Exchange Act to the
date of payment of the Consideration. If the Consideration is to be issued to a
person other than the person in whose name the surrendered certificate formerly
evidencing Shares is registered on the stock transfer books of the Company, it
shall be a condition of exchange or payment, as the case may be, that the
certificate so surrendered shall be endorsed properly or otherwise be in proper
form for transfer and that the person requesting such exchange or payment, as
the case may be, shall have paid all transfer and other taxes required by reason
of the issuance or payment, as the case may be, of the Consideration to a person
other than the registered holder of the certificate surrendered, or shall have
established to the satisfaction of Purchaser that such taxes either have been
paid or are not applicable.
(c) If Purchaser commences a Cash Tender Offer, as promptly as
reasonably practicable after the Purchase Option Closing or Purchaser's exercise
of the Offer Option, as applicable, to the extent required by applicable Law,
Purchaser shall file with the SEC a Tender Offer Statement on Schedule TO that
shall comply with the Exchange Act (together with all amendments and supplements
thereto, the "Cash Schedule TO") with respect to the Offer. The Cash Schedule TO
shall contain or shall incorporate by reference an offer to purchase (the "Offer
to Purchase") and forms of the related letter of transmittal and any related
summary advertisement (the Cash Schedule TO, the Offer to Purchase and such
other documents, together with all supplements and amendments thereto, being
referred to herein collectively as the "Cash Offer Documents").
(d) If Purchaser commences an Exchange Offer, as promptly as reasonably
practicable after Purchaser's exercise of the Offer Option, Parent shall file
with the SEC a registration statement on Form S-4 to register the offer and sale
of shares of Parent Common Stock pursuant to the Offer (together with any
amendments or supplements thereto, the "Exchange Offer Registration Statement").
The Exchange Offer Registration Statement shall include a preliminary prospectus
containing the information required under the Exchange Act (the "Exchange Offer
Prospectus"). As promptly as reasonably practicable on the date of commencement
of the Offer, to the extent required by applicable Law, Parent and Purchaser
shall (i) file with the SEC a Tender Offer Statement on Schedule TO (together
with all amendments and supplements thereto, the "Exchange Offer Schedule TO")
with respect to the Offer, which shall contain or incorporate by reference all
or part of the Exchange Offer Prospectus and the form of the related letter of
transmittal and any related summary advertisement (the Exchange Offer
Registration Statement, the Exchange Offer Schedule TO, the Exchange Offer
Prospectus and such other documents, together with any amendments or supplements
thereto, being referred to herein collectively as the "Exchange Offer
Documents") and (ii) cause the Exchange Offer Documents to be disseminated to
holders of Shares. Each of the Company and Parent shall use their reasonable
best efforts to have the Exchange Offer Registration Statement declared
effective under the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder (the "Securities Act"), as promptly as
practicable after the filing thereof with the SEC and to keep the Exchange Offer
Registration Statement effective as long as necessary to complete the Offer;
provided, however, that Parent or Purchaser shall pay any and all SEC filing
fees incurred in connection with the Exchange Offer Documents.
(e) The Exchange Ratio, the Consideration and any other amounts payable
pursuant to the Offer or the Second-Step Merger shall be adjusted to reflect
appropriately the effect of any stock split, reverse stock split, stock dividend
(including any dividend or distribution of securities convertible into Common
Stock or Parent Common Stock), extraordinary cash dividends, reorganization,
recapitalization, reclassification, combination, exchange of shares or other
like change with respect to Common Stock or Parent Common Stock occurring or
having a record date on or after the date hereof and prior to the Effective
Time.
(f) Each of Parent, Purchaser and the Company agrees to correct
promptly any information provided by it for use in the Exchange Offer Documents
or the Cash Offer Documents, as the case may be (the "Offer Documents"), if and
to the extent that such information shall have become false or misleading in any
material respect and to supplement the Offer Documents to include any
information that shall become necessary to include in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. Parent and Purchaser further agree to take all steps necessary
to cause the Cash Schedule TO or the Exchange Offer Schedule TO, as the case may
be (the "Schedule TO"), as so corrected to be filed with the SEC and to cause
the other Offer Documents as so corrected to be, at such time as reasonably
agreed by Parent and the Company, disseminated to holders of Shares, in each
case as and to the extent required by applicable federal securities laws. The
Company and its counsel shall be given reasonable opportunity to review and
comment on the Offer Documents prior to the filing of such documents with the
SEC or the dissemination of such documents to holders of Shares for the purpose
of ensuring consistency with this Agreement and that the Offer made to the
holders of Shares other than the Controlling Stockholders is no less favorable
to such holders than the terms contained in the Option Agreements are to the
Controlling Stockholders. Parent and Purchaser agree to provide the Company and
its counsel with any comments that Parent, Purchaser or their counsel may
receive from the SEC or its staff with respect to the Offer Documents promptly
after receipt of such comments and shall provide the Company and its counsel an
opportunity to participate in the response of Parent or Purchaser to such
comments.
Section 3.02 Exchange of Certificates. If Purchaser effects an Exchange Offer:
(i) Exchange Agent. Parent shall deposit, or shall cause to be
deposited, with a bank or trust company designated by Parent
and reasonably satisfactory to the Company (the "Exchange
Agent"), for the benefit of the holders of Shares, for
exchange in accordance with this Agreement through the
Exchange Agent, certificates representing the shares of Parent
Common Stock issuable pursuant to Sections 3.01(a) (in
connection with the Exchange Offer) and 4.04 (in connection
with the Second-Step Merger) at such times as such shares of
Parent Common Stock are issuable pursuant thereto, and cash,
from time to time as required to make payments in lieu of any
fractional shares pursuant to Section 3.02(a)(v) (such cash
and certificates for shares of Parent Common Stock, together
with any dividends or distributions with respect thereto to
which such holders of Shares are entitled pursuant to Section
3.02(a)(iii), being hereinafter referred to as the "Exchange
Fund"). The Exchange Agent shall deliver the shares of Parent
Common Stock contemplated to be issued pursuant to Sections
3.01(a) and 4.04 out of the Exchange Fund. Except as
contemplated by Section 3.02(a)(vi), the Exchange Fund shall
not be used for any other purpose. Exchange procedures for
shares of Parent Common Stock issuable pursuant to Section
3.01(a)(ii) shall be as set forth in the Exchange Offer
Documents.
(ii) Exchange Procedures for Exchange Offer Followed by Second-Step
Merger. As promptly as practicable after the Effective Time,
Parent shall cause the Exchange Agent to mail to each person
who was, at the Effective Time, a holder of record of Shares
entitled to receive the Share Consideration pursuant to
Section 4.04(a): (i) a letter of transmittal (which shall be
in customary form and shall specify that delivery shall be
effected, and risk of loss and title to the certificates
evidencing such Shares (the "Certificates") shall pass, only
upon proper delivery of the Certificates to the Exchange
Agent) and (ii) instructions for use in effecting the
surrender of the Certificates pursuant to such letter of
transmittal. Upon surrender to the Exchange Agent of a
Certificate for cancellation, together with such letter of
transmittal, duly completed and validly executed in accordance
with the instructions thereto, and such other documents as may
be required pursuant to such instructions, the holder of such
Certificate shall be entitled to receive in exchange therefor
the Share Consideration, including a certificate representing
that number of whole shares of Parent Common Stock which such
holder has the right to receive in respect of the Shares
formerly represented by such Certificate (after taking into
account all Shares then held by such holder), cash in lieu of
any fractional shares of Parent Common Stock to which such
holder is entitled pursuant to Section 3.02(a)(v) and any
dividends or other distributions to which such holder is
entitled pursuant to Section 3.02(a)(iii), and the Certificate
so surrendered shall forthwith be cancelled. In the event of a
transfer of ownership of Shares that is not registered in the
transfer records of the Company, the Share Consideration,
including a certificate representing the proper number of
shares of Parent Common Stock, cash in lieu of any fractional
shares of Parent Common Stock to which such holder is entitled
pursuant to Section 3.02(a)(v) and any dividends or other
distributions to which such holder is entitled pursuant to
Section 3.02(a)(iii) may be issued to a transferee if the
Certificate representing such Shares is presented to the
Exchange Agent, accompanied by all documents required to
evidence and effect such transfer and by evidence that any
applicable stock transfer taxes have been paid. Until
surrendered as contemplated by this Section 3.02(a), each
Certificate shall be deemed at all times after the Effective
Time to represent only the right to receive upon such
surrender the Share Consideration, including the certificate
representing shares of Parent Common Stock, cash in lieu of
any fractional shares of Parent Common Stock to which such
holder is entitled pursuant to Section 3.02(a)(v) and any
dividends or other distributions to which such holder is
entitled pursuant to Section 3.02(a)(iii).
(iii) Distributions with Respect to Unexchanged Shares of Parent
Common Stock. Each holder of a Certificate shall be entitled
to receive all dividends or other distributions declared or
made after the Effective Time with respect to the Parent
Common Stock with a record date after the Effective Time;
provided, however, no dividends or other distributions
declared or made after the Effective Time with respect to the
Parent Common Stock with a record date after the Effective
Time shall be paid to the holder of any unsurrendered
Certificate with respect to the shares of Parent Common Stock
represented thereby, and no cash payment in lieu of any
fractional shares shall be paid to any such holder pursuant to
Section 3.02(a)(v), until the holder of such Certificate shall
surrender such Certificate. Subject to the effect of escheat,
tax or other Laws, following surrender of any such
Certificate, there shall be paid to the holder of the
certificates representing whole shares of Parent Common Stock
issued in exchange therefor, without interest, (i) promptly,
the amount of any cash payable with respect to a fractional
share of Parent Common Stock to which such holder is entitled
pursuant to Section 3.02(a)(v) and the amount of dividends or
other distributions with a record date after the Effective
Time and theretofore paid with respect to such whole shares of
Parent Common Stock and (ii) at the appropriate payment date,
the amount of dividends or other distributions, with a record
date after the Effective Time but prior to surrender and a
payment date occurring after surrender, payable with respect
to such whole shares of Parent Common Stock. Parent will
provide the Exchange Agent with the cash necessary to make the
payments contemplated by this Section 3.02(a)(iii).
(iv) No Further Rights in Common Stock. The Share Consideration,
including all shares of Parent Common Stock issued in
accordance with the terms hereof (including any cash paid
pursuant to Section 3.02(a)(iii) or (a)(v)), shall be deemed
to have been issued in full satisfaction of all rights
pertaining to such Shares.
(v) No Fractional Shares. No certificates or scrip representing
fractional shares of Parent Common Stock shall be issued upon
the surrender for exchange of Certificates, and such
fractional share interests will not entitle the owner thereof
to vote or to any other rights of a shareholder of Parent.
Each holder of a fractional share interest shall be paid an
amount in cash (without interest) equal to the product
obtained by multiplying (i) such fractional share interest to
which such holder (after taking into account all fractional
share interests then held by such holder) would otherwise be
entitled by (ii) the Average Parent Stock Price. As promptly
as practicable after the determination of the amount of cash,
if any, to be paid to holders of fractional share interests,
the Exchange Agent shall so notify Parent, and Parent shall
deposit such amount with the Exchange Agent and shall cause
the Exchange Agent to forward payments to such holders of
fractional share interests subject to and in accordance with
the terms of Section 3.02(a)(ii) and (a)(iii).
(vi) Termination of Exchange Fund. Any portion of the Exchange Fund
that remains undistributed to the holders of the Common Stock
for six months after the Effective Time shall be delivered to
Parent, upon demand, and any holders of the Common Stock who
have not theretofore complied with Articles III and IV shall
thereafter look only to Parent for the shares of Parent Common
Stock, any cash in lieu of fractional shares of Parent Common
Stock to which they are entitled pursuant to Section
3.02(a)(v) and any dividends or other distributions with
respect to Parent Common Stock to which they are entitled
pursuant to Section 3.02(a)(iii). Any portion of the Exchange
Fund remaining unclaimed by holders of Shares as of a date
which is immediately prior to such time as such amounts would
otherwise escheat to or become property of any government
entity shall, to the extent permitted by Law, become the
property of Parent free and clear of any claims or interest of
any person previously entitled thereto.
(vii) No Liability. None of the Exchange Agent, Parent, Purchaser or
the Surviving Corporation shall be liable to any holder of
Shares for any such Shares (or dividends or distributions with
respect thereto), or cash delivered to a public official
pursuant to any abandoned property, escheat or similar Law.
(viii) 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 Exchange Agent shall issue in
exchange for such lost, stolen or destroyed Certificate, the
Share Consideration, including the shares of Parent Common
Stock, any cash in lieu of fractional shares of Parent Common
Stock to which the holders thereof are entitled pursuant to
Section 3.02(a)(v) and any dividends or other distributions to
which the holders thereof are entitled pursuant to Section
3.02(a)(iii).
(b) If Purchaser effects a Cash Tender Offer:
(i) Paying Agent. Parent shall deposit, or shall cause to be
deposited, with a bank or trust company designated by Parent
and reasonably satisfactory to the Company (the "Paying
Agent"), such amount of funds as are payable pursuant to the
Cash Tender Offer. Such funds shall be invested by the Paying
Agent and shall be paid in accordance with Section 3.01(a)(i)
or 4.04(a), in each case as directed by Parent.
(ii) Exchange Procedures for Cash Tender Offer Followed by
Second-Step Merger. As promptly as practicable after the
Effective Time, Parent shall cause to be mailed to each person
who was, at the Effective Time, a holder of record of Shares
entitled to receive the Cash Consideration pursuant to Section
4.04(a): (i) a letter of transmittal (which shall be in
customary form and 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 (ii) instructions for use in effecting the
surrender of the Certificates pursuant to such letter of
transmittal. Upon surrender to the Paying Agent of a
Certificate, together with such letter of transmittal, duly
completed and validly executed in accordance with the
instructions thereto, and such other documents as may be
required pursuant to such instructions, the holder of such
Certificate shall be entitled to receive in exchange therefor
the Cash Consideration for each Share formerly evidenced by
such Certificate, and such Certificate shall then be canceled.
No interest shall accrue or be paid on the Cash Consideration
payable upon the surrender of any Certificate for the benefit
of the holder of such Certificate. If the payment equal to the
Cash Consideration is to be made to a person other than the
person in whose name the surrendered certificate formerly
evidencing Shares is registered on the stock transfer books of
the Company, it shall be a condition of payment that the
certificate so surrendered shall be endorsed properly or
otherwise be in proper form for transfer and that the person
requesting such payment shall have paid all transfer and other
similar taxes required by reason of the payment of the Cash
Consideration to a person other than the registered holder of
the certificate surrendered, or shall have established to the
satisfaction of Parent or Purchaser that such taxes either
have been paid or are not applicable.
(iii) Distributions with Respect to Unpaid Cash Amounts. Any portion
of the funds made available to the Paying Agent that remains
undistributed to the holders of the Common Stock for six
months after the Effective Time shall be delivered to Parent,
upon demand, and any holders of the Common Stock who have not
theretofore complied with Articles III and IV shall thereafter
look only to Parent for such funds. Any portion of the such
funds remaining unclaimed by holders of Shares as of a date
which is immediately prior to such time as such amounts would
otherwise escheat to or become property of any government
entity shall, to the extent permitted by Law, become the
property of Parent free and clear of any claims or interest of
any person previously entitled thereto.
Section 3.03. Company Action. The Company hereby approves of and consents to the
Offer and represents and warrants that the Company Board, at meetings duly
called and held on October 27, 2003 and April 12, 2005, has unanimously (i)
determined that this Agreement and the Option Agreements and the transactions
contemplated hereby (including the Offer and the Merger) and thereby
(collectively, the "Transactions") are fair to, and in the best interests of,
the holders of Shares, (ii) approved, adopted and declared advisable this
Agreement, the Option Agreements and the Transactions (such approval and
adoption having been made in accordance with the DGCL) and (iii) subject to
Section 9.02, resolved to recommend that the holders of Shares accept the Offer
and tender Shares pursuant to the Offer, and, if required under the DGCL, adopt
this Agreement. Subject to Section 9.02, the Company hereby consents to the
inclusion in the Offer Documents of the recommendation of the Company Board
described in this Section 3.03(a). Subject to Section 9.02, neither the Company
Board nor any committee thereof shall (i) withhold, withdraw, amend, change or
modify any approval or recommendation of the Transactions in any manner adverse
to Purchaser or Parent, (ii) approve or recommend, or propose to approve or
recommend, any other merger or other offer to the stockholders of the Company or
(iii) enter into any agreement with respect to any other merger or other offer
to the stockholders of the Company. Notwithstanding the foregoing, in the event
that the Company Board determines in good faith that it is required to do so by
its fiduciary duties under Law after consultation with outside legal counsel,
the Company Board may withhold, withdraw, amend, change or modify its approval
or recommendation of the Offer or the Merger. The Company represents and
warrants that it has been advised by its directors and executive officers that
they intend, as of the date of this Agreement, to tender all Shares beneficially
owned by them to Purchaser pursuant to the Offer.
(b) The Company shall promptly furnish Parent and Purchaser with
mailing labels containing the names and addresses of all record holders of
Shares and with security position listings of Shares held in stock depositories,
each as of the most recent date reasonably available, together with all other
available listings and computer files containing names, addresses and security
position listings of record holders and beneficial owners of Shares. The Company
shall promptly furnish Parent and Purchaser with such additional information,
including updated listings and computer files of stockholders, mailing labels
and security position listings, and such other assistance in disseminating the
Offer Documents to holders of Shares as Parent or Purchaser may reasonably
request. Subject to the requirements of Law, and except for such steps as are
necessary to disseminate the Offer Documents and any other documents necessary
to consummate the Offer or the Merger, Parent and Purchaser shall (i) hold in
confidence the information contained in such labels, listings and files and (ii)
use such information only in connection with the Transactions and, if this
Agreement shall be terminated in accordance with Section 11.01, Parent shall, at
its option, either deliver to the Company all copies of such information then in
its or Purchaser's possession or destroy such information.
Section 3.04. Directors. Effective upon the earlier of the Purchase Option
Closing and the acceptance for exchange by Purchaser of Shares pursuant to the
Offer, Parent shall be entitled to designate up to such number of directors,
rounded up to the next whole number, on the Company Board that equals the
product of (i) the total number of directors on the Company Board (giving effect
to the election of any additional directors pursuant to this Section 3.04) and
(ii) the percentage of the total number of shares of Company Common Stock
outstanding that are beneficially owned by Parent and/or Purchaser (including
shares of Company Common Stock accepted for exchange), and the Company shall
promptly take all action necessary to cause Parent's designees to be elected or
appointed to the Company Board, including increasing the number of directors,
and seeking and accepting resignations of incumbent directors. At such time, the
Company shall also use its reasonable best efforts to cause individuals
designated by Parent to constitute the number of members, rounded up to the next
whole number, on (y) each committee of the Company Board and (z) the board of
directors of its Subsidiary (and each committee thereof) that represents the
same percentage as such individuals represent on the Company Board, in each case
only to the extent permitted by Law. Notwithstanding the provisions of this
Section 3.04, the parties hereto shall use their respective reasonable best
efforts to ensure that at least two of the members of the Company Board who were
directors of the Company prior to the date described in the first sentence of
this Section 3.04(a) (the "Continuing Directors") shall continue as directors of
the Company until the Effective Time; provided that if there shall be in office
fewer than two Continuing Directors for any reason, the Company Board shall
cause a person designated by the remaining Continuing Director or, in the
absence of action by the Continuing Director, by the Stockholders'
Representative to fill such vacancy who shall be deemed to be a Continuing
Director for all purposes of this Agreement, or if no Continuing Directors then
remain, the other directors of the Company then in office shall designate two
persons to fill such vacancies who will not be officers or employees or
affiliates of the Company, Parent or Purchaser or any of their respective
subsidiaries and such persons shall be deemed to be Continuing Directors for all
purposes of this Agreement.
(b) Following the election or appointment of Parent's designees
pursuant to Section 3.04(a) and prior to the Effective Time, any amendment of
this Agreement or the Certificate of Incorporation or By-laws of the Company,
any termination of this Agreement by the Company, any extension by the Company
of the time for the performance of any of the obligations or other acts of
Parent or Purchaser or any waiver of any of the Company's rights hereunder,
shall require the concurrence of a majority of the directors of the Company then
in office who neither were designated by Parent nor (except for ▇▇▇▇▇▇) are
employees of the Company or its Subsidiary.
Article IV
THE MERGER
Section 4.01. The Merger. Upon the terms and subject to the conditions set forth
in Article X and in accordance with the DGCL, in the event the Offer is
consummated, at the Effective Time, Purchaser shall be merged with and into the
Company. As a result of the Merger, the separate corporate existence of
Purchaser shall cease and the Company shall continue as the surviving
corporation of the Merger (the "Surviving Corporation").
Section 4.02. Effective Time; Closing. As promptly as practicable after the
satisfaction or, if permissible, waiver of the conditions set forth in Article X
and, if applicable, the satisfaction of the conditions set forth in Annex A (to
the extent applicable to the Merger), the parties hereto shall cause the Merger
to be consummated by filing this Agreement or a certificate of merger (the
"Certificate of Merger") with the Secretary of State of the State of Delaware,
in such form as is required by, and executed in accordance with, the relevant
provisions of the DGCL (the date and time of such filing of the Certificate of
Merger being the "Effective Time"). Immediately prior to such filing of the
Certificate of Merger, a closing shall be held at the offices of Shearman &
Sterling LLP, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such other
place as the parties shall agree, for the purpose of confirming the satisfaction
or waiver, as the case may be, of the conditions set forth in Article X.
Section 4.03. Effect of the Merger. At the Effective Time, the effect of the
Merger shall be as provided in the applicable provisions of the DGCL. Without
limiting the generality of the foregoing, and subject thereto, at the Effective
Time, all the property, rights, privileges, powers and franchises of the Company
and Purchaser shall vest in the Surviving Corporation, and all debts,
liabilities, obligations, restrictions, disabilities and duties of each of the
Company and Purchaser shall become the debts, liabilities, obligations,
restrictions, disabilities and duties of the Surviving Corporation.
Section 4.04. Conversion of Securities. At the Effective Time, by virtue of the
Merger and without any action on the part of Purchaser, the Company or the
holders of any of the securities described in subparagraph (a), (b) or (c)
below, the following shall take place:
(a) each Share issued and outstanding immediately prior to the Effective
Time (other than any Shares to be canceled pursuant to Section 4.04(b)
and any Dissenting Shares (as defined in Section 4.10(a))) shall be
canceled and shall be converted automatically, subject to Section 3.02,
into the right to receive (i) if the Exchange Offer was consummated,
the Share Consideration or (ii) if the Cash Tender Offer was
consummated, the Cash Consideration, payable in each case without
interest upon surrender, in the manner provided in Section 3.02, of the
certificate that formerly evidenced such Share;
(b) each Share held in the treasury of the Company and each Share owned by
Purchaser, Parent or any direct or indirect wholly owned subsidiary of
Parent or of the Company immediately prior to the Effective Time shall
be canceled without any conversion thereof and no payment or
distribution shall be made with respect thereto; and
(c) each share of common stock, par value $0.01 per share, of Purchaser
issued and outstanding immediately prior to the Effective Time shall be
converted into and exchanged for one validly issued, fully paid and
nonassessable share of common stock, par value $0.01 per share, of the
Surviving Corporation.
Section 4.05. Stock Transfer Books. At the Effective Time, the stock transfer
books of the Company shall be closed and there shall be no further registration
of transfers of Shares thereafter on the records of the Company. From and after
the Effective Time, the holders of Certificates representing Shares outstanding
immediately prior to the Effective Time shall cease to have any rights with
respect to such Shares, except as otherwise provided in this Agreement or by
Law. If Purchaser effects an Exchange Offer, any Certificates presented to the
Exchange Agent or Parent on or after the Effective Time for any reason shall be
converted into the Share Consideration, including shares of Parent Common Stock,
any cash in lieu of fractional shares of Parent Common Stock to which the
holders thereof are entitled pursuant to Section 3.02(a)(v) and any dividends or
other distributions to which the holders thereof are entitled pursuant to
Section 3.02(a)(iii).
Section 4.06. Certificate of Incorporation; By-laws. (a) At the Effective Time,
the Certificate of Incorporation of Purchaser, as in effect immediately prior to
the Effective Time, shall be the Certificate of Incorporation of the Surviving
Corporation; provided, however, that, at the Effective Time, Article I of the
Certificate of Incorporation of the Surviving Corporation shall be amended to
read as follows: "The name of the corporation is Rubicon Medical Corporation".
(b) At the Effective Time, the By-laws of Purchaser, as in effect
immediately prior to the Effective Time, shall be the By-laws of the Surviving
Corporation.
Section 4.07. Directors and Officers. The directors of Purchaser immediately
prior to the Effective Time shall be the initial directors of the Surviving
Corporation, each to hold office in accordance with the Certificate of
Incorporation and By-laws of the Surviving Corporation, and the officers of the
Company immediately prior to the Effective Time shall be the initial officers of
the Surviving Corporation, in each case until their respective successors are
duly elected or appointed and qualified or until their earlier death,
resignation or removal.
Section 4.08. Company Stockholders' Meeting. If required by Law in order to
consummate the Merger following the consummation of the Offer, the Company,
acting through the Company Board, shall, in accordance with Law and the
Company's Certificate of Incorporation and By-laws, duly call, give notice of,
convene and hold an annual or special meeting of the holders of the Common Stock
(the "Company Stockholders' Meeting") as promptly as reasonably practicable
after the acceptance of Shares pursuant to the Offer for the purpose of voting
on this Agreement and the Merger. At the Company Stockholders' Meeting, Parent
and Purchaser shall cause all Shares then owned by them and their subsidiaries
to be voted in favor of the adoption of this Agreement. Notwithstanding the
foregoing, Parent may require the Company to prepare and distribute to the
stockholders of the Company an information statement that complies with
Regulation 14C of the Exchange Act in lieu of calling, giving notice of,
convening and holding the Company Stockholders' Meeting, in which case the
Company shall promptly prepare and distribute such information statement and
otherwise, to the extent applicable, comply with its obligations under this
Section 4.08(a).
(b) Notwithstanding Section 4.08(a), in the event that Purchaser shall
acquire at least 90% of the then outstanding Shares, the parties shall take all
necessary and appropriate action to cause the Merger to become effective in
accordance with Section 253 of the DGCL, as promptly as reasonably practicable
after such acquisition, without a meeting of the stockholders of the Company.
Section 4.09. Preparation of Merger Registration Statement and Merger Proxy
Statement/Prospectus. In the event the Exchange Offer is effected, if required
by Law, promptly after the acceptance for exchange of Shares pursuant to the
Exchange Offer, Parent and the Company shall prepare, and Parent shall file with
the SEC, a registration statement on Form S-4 or a post-effective amendment to
the Exchange Offer Registration Statement, as appropriate, to register the offer
and sale of shares of Parent Common Stock pursuant to the Merger (together with
any amendments or supplements thereto, the "Merger Registration Statement"),
which shall include the proxy statement/prospectus to be sent to the
stockholders of the Company relating to the Company Stockholders' Meeting or any
information statement to be sent to such stockholders, as appropriate (such
proxy statement or information statement, as amended or supplemented, being
referred to herein as the "Merger Proxy Statement/Prospectus"). Each of the
Company and Parent shall use reasonable best efforts to have the Merger
Registration Statement declared effective under the Securities Act as promptly
as reasonably practicable after the filing thereof and to keep the Merger
Registration Statement effective as long as is necessary to consummate the
Merger. The Company shall mail the Merger Proxy Statement/Prospectus to its
stockholders as promptly as reasonably practicable after the Merger Registration
Statement is declared effective under the Securities Act and, if necessary,
after the Merger Proxy Statement/Prospectus shall have been so mailed, promptly
circulate amended, supplemental or supplemented proxy material, and, if required
in connection therewith, resolicit proxies. Parent shall take any action (other
than applications to do business in any jurisdiction in which it is not now so
qualified or to file a general consent to service of process) required to be
taken under any applicable state securities or Blue Sky Laws in connection with
the issuance of Parent Common Stock in the Merger. No amendment or supplement to
the Merger Proxy Statement/Prospectus will be made by the Company or Parent
without the approval of the other party, which will not be unreasonably withheld
or delayed. Each party shall advise the other party, promptly after it receives
notice thereof, of the time when the Merger Registration Statement has become
effective or any supplement or amendment has been filed, the issuance of any
stop order, the suspension of the qualification of Parent Common Stock issuable
in connection with the Merger for offering or sale in any jurisdiction, or any
request by the SEC for amendment of the Merger Proxy Statement/Prospectus or
comments thereon and responses thereto or requests by the SEC for additional
information.
Section 4.10. Appraisal Rights/Dissenting Shares. (a) Notwithstanding any
provision of this Agreement to the contrary and to the extent available under
the DGCL, Shares that are outstanding immediately prior to the Effective Time
and that are held by stockholders who shall have neither voted in favor of the
Merger nor consented thereto in writing and who shall have demanded properly in
writing appraisal for such Shares in accordance with Section 262 of the DGCL
(collectively, the "Dissenting Shares") shall not be converted into, or
represent the right to receive, the Consideration. Such stockholders shall be
entitled to receive payment of the appraised value of such Shares held by them
in accordance with the provisions of such Section 262, except that all
Dissenting Shares held by stockholders who shall have failed to perfect or who
effectively shall have withdrawn or lost their rights to appraisal of such
Shares under such Section 262 shall thereupon be deemed to have been converted
into, and to have become exchangeable for, as of the Effective Time, the right
to receive the Consideration, without any interest thereon, upon surrender, in
the manner provided in Section 3.02, of the certificate or certificates that
formerly evidenced such Shares.
(b) The Company shall give Parent (i) prompt notice of any demands for
appraisal received by the Company, withdrawals of such demands, and any other
instruments served pursuant to the DGCL and received by the Company and (ii) the
opportunity to direct all negotiations and proceedings with respect to demands
for appraisal under the DGCL. The Company shall not, except with the prior
written consent of Parent, make any payment with respect to any demands for
appraisal or offer to settle or settle any such demands.
Article V
COMPANY STOCK OPTIONS; AFFILIATES; EARN-OUT PAYMENTS
Section 5.01. Company Stock Options(a) . At or prior to the Effective Time, the
Company shall take all necessary action, including using its reasonable best
efforts to obtain the consent of the individual option holders, if necessary, to
(i) terminate the Company Stock Option Plan and (ii) cancel, at the Effective
Time, each outstanding Company Stock Option that is outstanding and unexercised,
whether or not vested or exercisable, as of such date. Parent acknowledges that
in accordance with the terms of the Company Stock Option Plan, each outstanding
Company Stock Option shall vest immediately prior to any "Change of Control" (as
defined in the Company Stock Option Plan) and that participating individual
option holders may provide the Company with an advance directive for the
exercise of such vested options in the event of a "Change of Control" caused by
any of the Transactions in order to receive the consideration provided for in
the Company Stock Option Plan upon the consummation of such Transaction. Each
holder of a Company Stock Option that is outstanding and unexercised at the
Effective Time and that has an exercise price per Share of Company Common Stock
that is less than the Consideration (excluding any rights to receive Earn-out
Payments) shall be entitled (subject to the provisions of this Section 5.01) to
be paid by the Surviving Corporation, with respect to each Share of Company
Common Stock that could have been purchased under such Company Stock Option, an
amount in cash (subject to any applicable withholding taxes) equal to the
excess, if any, of the Consideration (excluding any rights to receive Earn-out
Payments) over the applicable per share exercise price of such Company Stock
Option (the "Option Payment"). The Surviving Corporation shall make such Option
Payment as promptly as practicable after the Effective Time with respect to any
outstanding and fully vested Company Stock Options that have an exercise price
that is less than the Consideration (excluding any rights to receive Earn-out
Payments) as of such date. Any such payment shall be subject to all applicable
federal, state and local tax withholding requirements. The Company shall take
all necessary action to approve the disposition of the Company Stock Options in
connection with the Transactions to the extent necessary to exempt such
dispositions and acquisitions under Rule 16b-3 of the Exchange Act.
Section 5.02. Affiliates. Notwithstanding anything to the contrary herein, no
Share Consideration shall be delivered to a person who may be deemed an
"affiliate" of the Company in accordance with Section 9.04 for purposes of Rule
145 under the Securities Act until such person has executed and delivered to
Parent an executed copy of the affiliate letter contemplated in Section 9.04.
Section 5.03. Earn-out Payments. (a) Upon the achievement of each of (i)
Milestone 1 and (ii) prior to the expiry of the Earn-out Period, Milestone 2 and
Milestone 3, Parent shall promptly pay or cause to be paid to each of the
Controlling Stockholders and other holders of Common Stock whose shares were
purchased pursuant to an Option or the Offer or converted into the right to
receive Consideration pursuant to Section 4.04 (the "Earn-out Recipients")
either, at the option of Parent, (A) a number of shares of Parent Common Stock
having a value (based on the Average Parent Stock Price prior to the date of
payment) equal to $0.48, $0.50 or $0.46 in the case of Milestone 1, Milestone 2
or Milestone 3, respectively, multiplied by the number of shares of Common Stock
so purchased or converted or (B) an amount of cash equal to the number of shares
of Common Stock so purchased or converted multiplied by $0.48, $0.50 or $0.46 in
the case of Milestone 1, Milestone 2 or Milestone 3, respectively, (such amount
calculated pursuant to either clause A or B, the "Milestone 1 Earn-out Payment",
the "Milestone 2 Earn-out Payment" and the "Milestone 3 Earn-out Payment", as
applicable); provided, however, that Parent or Purchaser shall provide the same
form of consideration to all Earn-out Recipients.
(b) Nothing shall prevent Parent from conducting its business as it
sees fit at any time, and Parent shall not be bound to specifically focus on
developing, marketing or selling any particular product, including any Company
Product. The Former Stockholders Committee shall monitor progress towards the
achievement of Milestone 1, Milestone 2 and Milestone 3 and, in connection with
the monitoring of such progress with respect to Milestone 1, shall have access
to regular clinical updates relevant to the achievement of such Milestone, and
in connection with the monitoring of such progress with respect to Milestone 2
and Milestone 3, shall have the right to receive quarterly reports from Parent
relating to the calculation of Net Sales in the form and substance Parent
customarily prepares such reports in the ordinary course of business.
(c) Parent hereby agrees to keep, in accordance with its usual and
customary practice, books of account and records of Net Sales for each fiscal
quarter of Parent during the Earn-out Period, and Parent further grants the
Former Stockholders Committee, at the Former Stockholders Committee's expense
(subject to the penultimate sentence of this Section 5.03(c)), the right,
exercisable once during each 60 day period following the delivery to the Company
by Parent of an annual report of Net Sales for the fiscal year then ended, to
examine and to have a third party reasonably acceptable to Parent examine,
subject to the execution by such third party of a confidentiality agreement in
form and substance satisfactory to Parent, such books and records at the
location of such books and records on prior written notice of at least 10
business days. If any audit reveals a discrepancy of five percent (5%) or more
compared with reported Net Sales by the Company to the Former Stockholders
Committee, Parent shall pay for the cost of such audit. Nothing in this Section
5.03 shall be deemed to require Parent to keep any books of account or records
other than those which it maintains in the ordinary course of business, to
retain any such books of account or records for any period in excess of the
period for which Parent retains such records in the ordinary course of business,
or to provide access to any books and records of the Parent other than those
specified above.
Section 5.04. Disputes. In the event that Parent and the Company are unable to
reach agreement with respect to any material issue with respect to the
achievement of Milestone 1, Milestone 2 or Milestone 3, the appropriate senior
officer of Parent with knowledge of the embolic protection business of Parent
and the Stockholders' Representative shall consult with each other and attempt
to resolve such issue within 30 calendar days. Any issue that has not been
resolved in accordance with this Section 5.04 shall be resolved, if applicable,
in accordance with Section 12.08.
Article VI
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the Company Disclosure Schedule (the "Company
Disclosure Schedule"), which has been prepared and delivered by the Company to
Parent and Purchaser prior to the execution and delivery of this Agreement, the
Company hereby represents and warrants to Parent and Purchaser as of the date of
the Original Agreement (except as specifically represented and warranted as of a
date subsequent to October 29, 2003) and as of the date of this Agreement that:
Section 6.01. Organization and Qualification; Subsidiaries. (a) Each of the
Company and Rubicon Medical, Inc., a Utah corporation (the "Subsidiary"), is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and has the requisite corporate power
and authority and all necessary governmental approvals to own, lease and operate
its properties and to carry on its business as it is now being conducted. Each
of the Company and its Subsidiary is duly qualified or licensed as a foreign
corporation to do business, and is in good standing, in each jurisdiction where
the character of the properties owned, leased or operated by it or the nature of
its business makes such qualification or licensing necessary, except for such
failures to be so qualified or licensed and in good standing that would not
prevent or materially delay consummation of the Transactions or otherwise
prevent or materially delay the Company from performing its obligations under
this Agreement and would not have a Company Material Adverse Effect.
(b) The Subsidiary is the only subsidiary of the Company and the
Company owns all of the outstanding capital stock of the Subsidiary. The Company
does not directly or indirectly own any equity or similar interest in, or any
interest convertible into or exchangeable or exercisable for any equity or
similar interest in, any corporation, partnership, joint venture or other
business association or entity.
Section 6.02. Certificate of Incorporation and By-laws. The Company has
heretofore furnished to Parent a complete and correct copy of the Certificate of
Incorporation and the By-laws, each as amended to date, of the Company and the
Subsidiary. Such Certificates of Incorporation and By-laws are in full force and
effect. Neither the Company nor its Subsidiary is in material violation of any
of the provisions of its Certificate of Incorporation or By-laws.
Section 6.03. Capitalization. The authorized capital stock of the Company
consists of (i) 100,000,000 shares of Common Stock and (ii) 5,000,000 shares of
preferred stock, par value $0.001 per share ("Company Preferred Stock"). As of
the date of this Agreement, (i) 54,831,834 shares of Common Stock are issued and
outstanding (excluding Common Stock issued pursuant to the Company Stock Option
Plan), all of which are validly issued, fully paid and nonassessable, (ii) no
shares of Common Stock are held in the treasury of the Company and (iii)
6,000,000 shares of Common Stock have been issued pursuant to, or are reserved
for future issuance pursuant to, outstanding employee stock options or stock
incentive rights granted pursuant to the Company Stock Option Plan. Other than
the Preferred Stock issued to Purchaser on the date hereof pursuant to Section
2.01, as of the date of this Agreement, no shares of Company Preferred Stock are
issued and outstanding. Except for the Option or as set forth in this Section
6.03, there are no options, warrants or other rights, agreements, arrangements
or commitments of any character relating to the issued or unissued capital stock
of the Company or its Subsidiary or obligating the Company or its Subsidiary to
issue or sell any shares of capital stock of, or other equity interests in, the
Company or its Subsidiary. The Company has made available to Parent accurate and
complete copies of all stock option plans pursuant to which the Company has
granted such Company Stock Options that are currently outstanding. All shares of
Common Stock subject to issuance as aforesaid, upon issuance on the terms and
conditions specified in the instruments pursuant to which they are issuable,
will be duly authorized, validly issued, fully paid and nonassessable. There are
no outstanding contractual obligations of the Company or its Subsidiary to
repurchase, redeem or otherwise acquire any shares of Common Stock or any
capital stock of its Subsidiary or to provide funds to, or make any investment
(in the form of a loan, capital contribution or otherwise) in, its Subsidiary or
any other person. Except as set forth in Section 6.03(a) of the Company
Disclosure Schedule, there are no commitments or agreements of any character to
which the Company is bound obligating the Company to accelerate the vesting of
any Company Stock Option as a result of the Merger. All outstanding shares of
Common Stock, all outstanding Company Stock Options, and all outstanding shares
of capital stock of the Subsidiary have been issued and granted in material
compliance with (y) all applicable securities laws and other Laws and (z) all
requirements set forth in applicable contracts.
(b) Except as set forth in Section 6.03(b) of the Company Disclosure
Schedule, each outstanding share of capital stock of the Subsidiary is duly
authorized, validly issued, fully paid and nonassessable, and each such share is
owned by the Company free and clear of all security interests, liens, claims,
pledges, options, rights of first refusal, rights of first offer, agreements,
limitations on the Company's or its Subsidiary's voting rights, charges and
other encumbrances of any nature whatsoever.
(c) The shares of Preferred Stock issued pursuant to Article II (i)
have been duly authorized, validly issued, are fully paid and non-assessable and
are not subject to any Liens or preemptive rights created by statute, the
Company's Certificate of Incorporation or By-laws or any agreement to which the
Company is a party or is bound and (ii) are exempt from the registration
requirements of the Securities Act and registered or exempt from registration
under applicable state securities or "blue sky" laws ("Blue Sky Laws").
Section 6.04. Authority Relative to this Agreement. The Company has all
necessary corporate power and authority to execute and deliver this Agreement,
to perform its obligations hereunder and to consummate the Transactions. The
execution and delivery of this Agreement by the Company and the consummation by
the Company of the Transactions have been duly and validly authorized by all
necessary corporate action, and no other corporate proceedings on the part of
the Company are necessary to authorize this Agreement or to consummate the
Transactions (other than, with respect to the Merger, the approval and adoption
of this Agreement by the holders of a majority of the then-outstanding shares of
Common Stock, and the filing and recordation of appropriate merger documents as
required by the DGCL). This Agreement has been duly and validly executed and
delivered by the Company and, assuming the due authorization, execution and
delivery by Parent and Purchaser, constitutes a legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditor rights and general equitable and public policy principles.
The Company does not have a class of voting stock that is (i) listed on a
national securities exchange, (ii) authorized for quotation on the NASDAQ Stock
Market or (iii) held of record by more than 2,000 stockholders.
Section 6.05. No Conflict; Required Filings and Consents. (a) The execution and
delivery of this Agreement by the Company do not, and the performance of this
Agreement by the Company will not, (i) conflict with or violate the Certificate
of Incorporation or By-laws or any equivalent organizational documents of the
Company or its Subsidiary, (ii) assuming that all consents, approvals,
authorizations and other actions described in Section 6.05(b) have been obtained
and all filings and obligations described in Section 6.05(b) have been made,
conflict with or violate any United States or non-United States statute, law,
ordinance, regulation, rule, code, executive order, injunction, judgment, decree
or other order ("Law") applicable to the Company or its Subsidiary or by which
any property or asset of the Company or its Subsidiary is bound or affected or
(iii) result in any breach of or constitute a default (or an event which, with
notice or lapse of time or both, would become a default) under, or give to
others any right of termination, amendment, acceleration or cancellation of, or
result in the creation of a lien or other encumbrance on any property or asset
of the Company or its Subsidiary pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation, except, with respect to clause (iii), for any such
conflicts, violations, breaches, defaults or other occurrences which would not
prevent or materially delay consummation of the Merger or otherwise prevent or
materially delay the Company from performing its obligations under this
Agreement and would not have a Company Material Adverse Effect.
(b) The execution and delivery of this Agreement by the Company do not,
and the performance of this Agreement by the Company will not, require any
consent, approval, authorization or permit of, or filing with or notification
to, any United States federal, state, county or local or non-United States
government, governmental, regulatory or administrative authority, agency,
instrumentality or commission or any court, tribunal, or judicial or arbitral
body (a "Governmental Authority"), except (i) for applicable requirements, if
any, of the Securities Act, the Exchange Act, Blue Sky Laws, state takeover
laws, non-U.S. antitrust laws, filing and recordation of appropriate merger
documents as required by the DGCL and the pre-merger notification requirements
of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), and (ii) where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications, would not
prevent or materially delay consummation of the Transactions, or otherwise
prevent or materially delay the Company from performing its obligations under
this Agreement, and would not have a Company Material Adverse Effect.
Section 6.06. Permits; Compliance. (a) Each of the Company and its Subsidiary is
in possession of all registrations, franchises, grants, authorizations
(including marketing authorizations), licenses, permits, easements, variances,
exceptions, consents, certificates, approvals and orders of any Governmental
Authority necessary for each of the Company or its Subsidiary to manufacture,
market, sell, or distribute the Company Products (as defined in Section
6.06(b)), or to own, lease and operate its properties or to carry on its
business as it is now being conducted (the "Company Permits"), except where the
failure to have, or the suspension or cancellation of, any of the Company
Permits would not prevent or materially delay consummation of the Transactions
or otherwise prevent or materially delay the Company from performing its
obligations under this Agreement or would not have a Company Material Adverse
Effect. No suspension or cancellation of any of the Company Permits is pending
or, to the knowledge of the Company, threatened. Neither the Company nor its
Subsidiary is in conflict with, or in default, breach or violation of, in any
material respect, (i) any Law applicable to the Company or its Subsidiary or by
which any property or asset of the Company or its Subsidiary is bound or
affected or (ii) any note, bond, mortgage, indenture, contract, agreement,
lease, license, Company Permit, franchise or other instrument or obligation to
which the Company or its Subsidiary is a party or by which the Company or its
Subsidiary or any property or asset of the Company or its Subsidiary is bound.
(b) (i) With respect to the products of the Company and its Subsidiary
and, to the extent applicable, products under development (collectively, the
"Company Products"), (A) the Company or its Subsidiary has obtained, unless
otherwise exempt, all necessary and applicable approvals for the operation of
its business as currently conducted, clearances, authorizations, licenses and
registrations required by United States or foreign governments or government
agencies, to permit the design, development, pre-clinical and clinical testing,
manufacture, labeling, sale, distribution and promotion of the Company Products
(the "Activities to Date") with respect to each Company Product (collectively,
the "Company Licenses"); (B) the Company and its Subsidiary are in compliance in
all material respects with all terms and conditions of each Company License and
with all Law pertaining to the Activities to Date with respect to each Company
Product which is not required to be the subject of a Company License; (C) the
Company and its Subsidiary are in compliance in all material respects with all
Laws regarding registration, license, certification for each site at which a
Company Product is manufactured, labeled, sold or distributed; and (D) to the
extent any Company Product has been exported from the United States, the Company
has exported such Company Product in compliance in all material respects with
Law; (ii) all manufacturing operations relating to a Company Product performed
by and, with respect to manufacturing operations relating to a Company Product
performed on behalf of the Company have been and are being conducted in all
material respects in compliance with applicable current good manufacturing
practices and regulations issued by the U.S. Food and Drug Administration (the
"FDA") and, to the extent applicable, counterpart regulations in the European
Union and all other countries where compliance is required; (iii) all
non-clinical and clinical laboratory studies of Company Products under
development, sponsored by the Company and intended to be used to support
regulatory clearance or approval, have been and are being conducted in
compliance in all material respects with the current good laboratory practice
regulations of Governmental Authorities in the United States and, to the extent
applicable, counterpart regulations in the European Union and all other
countries; and (iv) the Company and its Subsidiary are in compliance in all
material respects with all applicable reporting requirements for all Company
Licenses or plant registrations described in clause (i) above, including
applicable adverse event reporting requirements in the United States and outside
of the United States under Law.
(c) To the knowledge of the Company, no filing or submission to the FDA
or any other Governmental Authority with regard to the Company Products that is
the basis for any approval or clearance contains any material omission or
materially false information.
(d) The Company is in material compliance with all FDA and non-United
States equivalent agencies and similar state and local Laws of Governmental
Agencies applicable to the maintenance, compilation and filing of reports,
including medical device reports, with regard to the Company Products. Section
6.06(d) of the Company Disclosure Schedule sets forth a list of all applicable
adverse event reports related to the Company Products, including any Medical
Device Reports (as defined in 21 CFR 803).
(e) The Company has not received any written notice or other written
communication from the FDA or any other Governmental Authority (i) contesting
the pre-market clearance or approval of, the uses of or the labeling and
promotion of any of the Company Products or (ii) otherwise alleging any
violation of any Laws by the Company.
Section 6.07. SEC Filings; Financial Statements. (a) The Company has filed all
forms, reports and documents required to be filed by it with the SEC since
December 7, 2000, and has heretofore delivered to Parent, in the form filed with
the SEC, (i) its Annual Reports on Form 10-K for the fiscal years ended December
31, 2001, 2002 and 2003, respectively, (ii) its Quarterly Reports on Form 10-Q
for the periods ended March 31, 2004, June 30, 2004, and September 30, 2004,
(iii) all other forms, reports and other registration statements (other than
Quarterly Reports on Form 10-Q not referred to in clause (ii) above) filed by
the Company with the SEC since December 7, 2000 (the forms, reports and other
documents referred to in clauses (i), (ii) and (iii) above being, collectively,
the "Company SEC Reports"). The Company SEC Reports (y) were prepared in all
material respects in accordance with either the requirements of the Securities
Act or the Exchange Act, as the case may be, and the rules and regulations
promulgated thereunder, and (z) did not, at the time they were filed, or, if
amended, as of the date of such amendment, contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. The Subsidiary is not
required to file any form, report or other document with the SEC.
(b) Each of the consolidated financial statements (including, in each
case, any notes thereto) contained in the Company SEC Reports was prepared in
accordance with United States generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods indicated (except as may be
indicated in the notes thereto or, in the case of unaudited statements, as
permitted by Form 10-Q of the SEC) and each fairly presents, in all material
respects, the consolidated financial position, results of operations and cash
flows of the Company and its consolidated Subsidiary as at the respective dates
thereof and for the respective periods indicated therein (subject, in the case
of unaudited statements, to normal and recurring year-end adjustments which
would not have had, and would not have, a Company Material Adverse Effect).
(c) Except as and to the extent set forth on the consolidated balance
sheet of the Company and its Subsidiary as at December 31, 2003, including the
notes thereto (the "2003 Balance Sheet"), neither the Company nor its Subsidiary
has any liability or obligation of any nature (whether accrued, absolute,
contingent or otherwise), except for liabilities and obligations, incurred in
the ordinary course of business consistent with past practice since the 2003
Balance Sheet, which would not prevent or materially delay consummation of the
Merger or otherwise prevent or materially delay the Company from performing its
obligations under this Agreement and would not have a Company Material Adverse
Effect.
(d) Except as set forth in Section 6.07(d) of the Company Disclosure
Schedule, the Company has heretofore furnished to Parent complete and correct
copies of all amendments and modifications that have not been filed by the
Company with the SEC to all agreements, documents and other instruments that
previously had been filed by the Company with the SEC and are currently in
effect.
Section 6.08. Absence of Certain Changes or Events. (a) From December 31, 2003
to the date of this Agreement, except as expressly contemplated by this
Agreement, (i) the Company and its Subsidiary have conducted their businesses
only in the ordinary course and in a manner consistent with past practice and
(ii) neither the Company nor its Subsidiary has taken any action that, if taken
after the date of this Agreement, would constitute a breach of any of the
covenants set forth in Section 8.01.
(b) From December 31, 2003, except as expressly contemplated by this
Agreement, there has not been any Company Material Adverse Effect.
Section 6.09. Absence of Litigation. There is no litigation, suit, claim,
action, proceeding or investigation (an "Action") pending or, to the knowledge
of the Company, threatened against the Company or its Subsidiary, or any
property or asset of the Company or its Subsidiary, before any Governmental
Authority. Neither the Company nor its Subsidiary nor any property or asset of
the Company or its Subsidiary is subject to any continuing order of, consent
decree, settlement agreement or other similar written agreement with, or, to the
knowledge of the Company, continuing investigation by, any Governmental
Authority, or any order, writ, judgment, injunction, decree, determination or
award of any Governmental Authority.
Section 6.10. Employee Benefit Plans. Section 6.10(a) of the Company Disclosure
Schedule lists (i) all employee benefit plans (as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")) and all
bonus, stock option, stock purchase, restricted stock, incentive, deferred
compensation, retiree medical or life insurance, supplemental retirement, change
of control, retention, severance or other benefit plans, programs or
arrangements, and all employment, termination, service, severance or other
contracts or agreements to which the Company or its Subsidiary is a party, with
respect to which the Company or its Subsidiary has any obligation or which are
maintained, contributed to or sponsored by the Company or its Subsidiary for the
benefit of any current or former employee, officer, independent contractor or
director of the Company or its Subsidiary, (ii) each employee benefit plan for
which the Company or its Subsidiary could incur liability in the event such plan
has been or were to be terminated, and (iii) any contracts, arrangements or
understandings between the Company or its Subsidiary and any current or former
officer, employee, independent contractor or director of the Company or its
Subsidiary, including any contracts, arrangements or understandings relating in
any way to a sale of the Company or its Subsidiary (collectively, the "Plans").
Each Plan is in writing and the Company has furnished to Parent a true and
complete copy of each Plan and has delivered to Parent a true and complete copy
of each document, if any, prepared in connection with each such Plan, including
(i) a copy of each trust or other funding arrangement, (ii) each latest summary
plan description and summary of material modifications, if any, (iii) the three
most recently filed Internal Revenue Service ("IRS") Forms 5500, (iv) the most
recently received IRS determination letter for each such Plan, and (v) the three
most recently prepared financial statements in connection with each such Plan,
if any. Neither the Company nor its Subsidiary has any express or implied
commitment (i) to create, incur liability with respect to or cause to exist any
other employee benefit plan, program or arrangement, (ii) to enter into any
contract or agreement to provide compensation or benefits to any individual, or
(iii) to modify, change or terminate any Plan, other than with respect to a
modification, change or termination required by ERISA or the Code.
(b) The Company has not now or at any time maintained, sponsored or
contributed to (i) a multiemployer plan (within the meaning of Section 3(37) or
4001(a)(3) of ERISA) or (ii) a single employer pension plan (within the meaning
of Section 4001(a)(15) of ERISA) for which the Company or its Subsidiary could
incur liability under Section 4063 or 4064 of ERISA. None of the Plans is
subject to Title IV of ERISA. Except as disclosed on Section 6.10(b) of the
Company Disclosure Schedule, none of the Plans (i) provides for the payment of
separation, severance, termination or similar-type benefits to any person, (ii)
obligates the Company or its Subsidiary to pay separation, severance,
termination or similar-type benefits solely or partially in connection with any
transaction contemplated by this Agreement, or (iii) obligates the Company or
its Subsidiary to make any payment or provide any benefit as a result of a
"change in control", within the meaning of such term under Section 280G of the
Code. None of the Plans provides for or promises retiree medical, disability or
life insurance benefits to any current or former employee, officer, independent
contractor or director of the Company or its Subsidiary.
(c) Each Plan is now and always has been operated in all material
respects in accordance with its terms and the requirements of all Laws,
including ERISA and the Code. The Company has not received any written notice or
other written communication of any action pending or, to the knowledge of the
Company, threatened with respect to any Plan (other than claims for benefits in
the ordinary course) and no fact or event exists that could reasonably be
expected to give rise to any such Action.
(d) Each Plan that is intended to be qualified under Section 401(a) of
the Code or Section 401(k) of the Code has timely received a favorable
determination letter from the IRS that the Plan is so qualified and each trust
established in connection with any Plan which is intended to be exempt from
federal income taxation under Section 501(a) of the Code has received a
determination letter from the IRS that it is so exempt, and no fact or event has
occurred since the date of such determination letter or letters from the IRS to
adversely affect, or could reasonably be expected to affect, the qualified
status of any such Plan or the exempt status of any such trust.
(e) There has not been any prohibited transaction (within the meaning
of Section 406 of ERISA or Section 4975 of the Code) with respect to any Plan.
(f) All contributions, premiums or payments required to be made with
respect to any Plan have been made on or before their due dates. All such
contributions have been fully deducted for income tax purposes, no such
deduction has been challenged or disallowed by any Governmental Authority and no
fact or event exists which could reasonably be expected to give rise to any such
challenge or disallowance.
(g) Except as set forth in Section 6.10(g) of the Company Disclosure
Schedule and other than the Company Stock Options, there are no other equity
related awards outstanding under the Company Stock Option Plan or under any
other plan, program, contract, agreement or arrangement.
(h) Each of the Plans is subject only to the Laws of the United States
or a political subdivision thereof.
Section 6.11. Labor and Employment Matters. (i) There are no controversies
pending or threatened in writing between the Company or its Subsidiary and any
of their respective employees; (ii) neither the Company nor its Subsidiary is a
party to any collective bargaining agreement or other labor union contract
applicable to persons employed by the Company or its Subsidiary, nor are there
any activities or proceedings of any labor union to organize any such employees;
(iii) neither the Company nor its Subsidiary has breached or otherwise failed to
comply with any provision of any such agreement or contract, and there are no
grievances outstanding against the Company or its Subsidiary under any such
agreement or contract; (iv) there are no unfair labor practice complaints
pending or threatened in writing against the Company or its Subsidiary before
the National Labor Relations Board or comparable state agency or any current
union representation questions involving employees of the Company or its
Subsidiary; and (v) there is no strike, slowdown, work stoppage or lockout, or,
to the knowledge of the Company, threat thereof, by or with respect to any
employees of the Company or its Subsidiary.
(b) The Company and its Subsidiary (i) are in compliance with all Laws
relating to the employment of labor, including those related to wages, hours,
collective bargaining and the payment and withholding of taxes and other sums as
required by the appropriate Governmental Authority and (ii) have withheld and
paid to the appropriate Governmental Authority or are holding for payment not
yet due to such Governmental Authority all amounts required to be withheld from
employees or former employees of the Company or its Subsidiary and are not
liable for any arrears of wages, taxes, penalties or other sums for failure to
comply with any of the foregoing. The Company and its Subsidiary have paid in
full to all employees or former employees or adequately accrued for in
accordance with GAAP consistently applied all wages, salaries, commissions,
bonuses, benefits and other compensation due to or on behalf of such persons,
and the Company has not received any written notice or other written
communication of any claim with respect to payment of wages, salary or overtime
pay that has been asserted or is now pending or threatened in writing before any
Governmental Authority with respect to any persons currently or formerly
employed by the Company or its Subsidiary. Neither the Company nor its
Subsidiary is a party to, or otherwise bound by, any consent decree with, or
citation by, any Governmental Authority relating to employees, former employees
or employment practices. The Company has not received any written notice or
other written communication of any charge or proceeding with respect to a
violation of any occupational safety or health standards that has been asserted
or is now pending or threatened in writing with respect to the Company. The
Company has not received any written notice or other written communication of
any charge of discrimination in employment or employment practices, for any
reason, including age, gender, race, religion or other legally protected
category, which has been asserted or is now pending or threatened in writing
before the United States Equal Employment Opportunity Commission, or any other
Governmental Authority in any jurisdiction in which the Company or its
Subsidiary has employed or employ any person.
(c) Except as set forth in Section 6.11(c) of the Company Disclosure
Schedule, all independent contractors, officers and salaried current and former
employees of the Company and its Subsidiary are under written obligation to the
Company and its Subsidiary to maintain in confidence all confidential or
proprietary information acquired by them in the course of their employment and
to assign to the Company and its Subsidiary all inventions made by them within
the scope of their employment during such employment and for a reasonable period
thereafter.
Section 6.12. Real Property and Leases. (a) The Company and its Subsidiary have
sufficient title to all their real property assets to conduct their respective
businesses as currently conducted or as contemplated to be conducted, with only
such exceptions as would not have a Company Material Adverse Effect.
(b) Neither the Company nor its Subsidiary owns any real property. Each
parcel of real property leased by the Company or its Subsidiary (i) is leased
free and clear of all mortgages, pledges, liens, security interests, conditional
and installment sale agreements, encumbrances, charges or other claims of third
parties of any kind against the Company or its Subsidiary, including any
easement, right of way or other encumbrance to title, or any option, right of
first refusal, or right of first offer applicable to the Company or its
Subsidiary (collectively, "Liens"), other than (A) Liens for current taxes and
assessments not yet past due, (B) inchoate mechanics' and materialmen's Liens
for construction in progress, (C) workmen's, repairmen's, warehousemen's and
carriers' Liens arising in the ordinary course of business of the Company or its
Subsidiary consistent with past practice, (D) Liens set forth in the Company's
or its Subsidiary's lease to such real property and (E) all matters of record,
Liens and other imperfections of title and encumbrances that would not have a
Company Material Adverse Effect, and (ii) is neither subject to any governmental
decree or order to be sold nor is being condemned, expropriated or otherwise
taken by any public authority, nor, to the knowledge of the Company, has any
such condemnation, expropriation or taking been proposed.
(c) All leases of real property leased for the use or benefit of the
Company or its Subsidiary to which the Company or its Subsidiary is a party are
in full force and effect and have not been modified or amended, and there exists
no default under any such lease by the Company or its Subsidiary, nor any event
which, with notice or lapse of time or both, would constitute a default
thereunder by the Company or its Subsidiary, except as would not have a Company
Material Adverse Effect.
Section 6.13. Intellectual Property. (a) Section 6.13(a) of the Company
Disclosure Schedule sets forth a true and complete list of all (i) patents
granted, assigned, licensed or pending to the Company (ii) registered and
pending trademarks for the Company.
(b) Except as set forth in Section 6.13(b) of the Company Disclosure
Schedule, the operation of the business of the Company as currently conducted or
as contemplated to be conducted does not, to the knowledge of the Company,
interfere with, conflict with, infringe upon, misappropriate or otherwise
violate the Intellectual Property rights of any third party in any material
respect, and no Action is pending or, to the knowledge of the Company,
threatened alleging that the operation of such business interferes with,
conflicts with, infringes upon, misappropriates or otherwise violates the
Intellectual Property rights of any third party.
(c) The Company is the sole owner of the entire right, title and
interest in and to, the Company Owned Intellectual Property or has a valid
license or other legal right under the Company Licensed Intellectual Property
subject to the terms of the license agreements governing the Company Licensed
Intellectual Property, used in the ordinary course of its business as presently
conducted or as contemplated by the Company to be conducted.
(d) (i) To the knowledge of the Company, the Company Owned Intellectual
Property and any Intellectual Property licensed to the Company under the Company
Licensed Intellectual Property are valid or enforceable, and (ii) the same have
not been adjudged invalid or unenforceable in whole or in part. The Company
Owned Intellectual Property and the Company Licensed Intellectual Property
constitute all of the Intellectual Property material to the operation of the
business of the Company as currently conducted or as currently contemplated by
the Company to be conducted.
(e) No Actions have been asserted, are pending, or, to the knowledge of
the Company, threatened against the Company (i) based upon or challenging or
seeking to deny or restrict the ownership by or license rights of the Company of
any of the Company Owned Intellectual Property or Company Licensed Intellectual
Property, (ii) alleging that any services provided by, processes used by, or
products manufactured or sold by the Company infringe or misappropriate any
Intellectual Property right of any third party or (iii) alleging that the
Company Licensed Intellectual Property is being licensed or sublicensed in
conflict with the terms of any license or other agreement.
(f) As of the date of this Agreement, no investigation taken by the
Company with assistance of counsel has led the Company to conclude that any
person is engaging in any activity that infringes or misappropriates the Company
Owned Intellectual Property or Company Licensed Intellectual Property. Except as
set forth in Section 6.13(f) of the Company Disclosure Schedule, the Company has
not granted any license or other right to any third party with respect to the
Company Owned Intellectual Property or Company Licensed Intellectual Property.
The execution, delivery and performance of this Agreement and the consummation
of the Transactions by the Company will not breach, violate or conflict with any
instrument or agreement concerning the Company Owned Intellectual Property and
will not cause the forfeiture or termination or give rise to a right of
forfeiture or termination of any of the Company Owned Intellectual Property or
materially impair the right of Parent to license or dispose of, or to bring any
action for the infringement of, any material Company Owned Intellectual
Property.
(g) The Company has delivered or made available to Parent correct and
complete copies of all the licenses of the Company Licensed Intellectual
Property, other than licenses of commercial off-the-shelf computer software.
With respect to each such license:
(i) with respect to any counterparty to the Company, to the
knowledge of the Company, and with respect to the Company,
such license is valid and binding and in full force and effect
and represents the entire agreement between the respective
licensor and licensee with respect to the subject matter of
such license;
(ii) except as set forth in Section 6.13(g) of the Company
Disclosure Schedule, such license will not cease to be valid
and binding and in full force and effect on terms identical in
all material respects to those currently in effect as a result
of the consummation of the Transactions, nor will the
consummation of the Transactions constitute a breach or
default under such license or otherwise so as to give the
licensor a right to terminate such license;
(iii) the Company has not (A) received any notice of termination or
cancellation under such license, (B) received any notice of
breach or default under such license, which breach has not
been cured or (C) granted to any other third party any rights,
adverse or otherwise, under such license that would constitute
a material breach of such license; and
(iv) neither the Company nor, to the knowledge of the Company, any
other party to such license is in material breach or default
thereof, and no event has occurred that, with notice or lapse
of time, would constitute such a material breach or default or
permit termination, modification or acceleration under such
license.
(h) The Company and its Subsidiary have taken reasonable steps in
accordance with normal industry practice to maintain the confidentiality of
their trade secrets and other confidential Intellectual Property. Except as set
forth in Section 6.13(h) of the Company Disclosure Schedule, to the knowledge of
the Company, (i) there has been no misappropriation of any material trade
secrets or other material confidential Company Owned Intellectual Property by
any person; (ii) no employee, independent contractor or agent of the Company has
misappropriated any trade secrets of any other person in the course of such
performance as an employee, independent contractor or agent; and (iii) no
employee, independent contractor or agent of the Company is in material default
or breach of any term of any employment agreement, non-disclosure agreement,
assignment of invention agreement or similar agreement or contract relating in
any way to the protection, ownership, development, use or transfer of Company
Owned Intellectual Property.
Section 6.14. Taxes. The Company and its Subsidiary have filed all Tax Returns
required to be filed by them and have paid and discharged all Taxes required to
be paid or discharged, other than (a) such payments as are being contested in
good faith by appropriate proceedings and (b) such filings, payments or other
occurrences that would not, individually or in the aggregate, have a Company
Material Adverse Effect. All such Tax Returns are true, accurate and complete.
Neither the IRS nor any other United States or non-United States taxing
authority or agency is now asserting or, to the knowledge of the Company,
threatening to assert against the Company or its Subsidiary any deficiency or
claim for any Taxes or interest thereon or penalties in connection therewith.
Neither the Company nor its Subsidiary has granted any waiver of any statute of
limitations with respect to, or any extension of a period for the assessment of,
any Tax. The accruals and reserves for Taxes reflected in the financial
statements in the Company SEC Reports are adequate to cover all Taxes accruable
through the date thereof (including interest and penalties, if any, thereon) in
accordance with GAAP. Neither the Company nor its Subsidiary has any liability
for the Taxes of any other person (other than the Company and its Subsidiary) by
reason of having joined in the filing of a consolidated, combined or unitary Tax
Return, by contract, by transferee liability or otherwise. There are no Tax
liens upon any property or assets of the Company or its Subsidiary except liens
for current Taxes not yet due. Neither the Company nor its Subsidiary has been
required to include in income any adjustment pursuant to Section 481 of the Code
by reason of a voluntary change in accounting method initiated by the Company or
its Subsidiary, and the IRS has not initiated or proposed any such adjustment or
change in accounting method, in either case which adjustment or change would
have a Company Material Adverse Effect. Neither the Company nor its Subsidiary
has been a "distributing corporation" or a "controlled corporation" in a
distribution intended to qualify under Section 355(e) of the Code within the
past five years. Neither the Company nor its Subsidiary has received a notice
from a taxing authority for a jurisdiction in which a Tax Return has not been
filed asserting that, or inquiring as to whether, the filing of such a Tax
Return may be required.
Section 6.15. Environmental Matters. Except as would not have a Company Material
Adverse Effect, (a) neither the Company nor its Subsidiary has violated and is
in violation of any Environmental Law; (b) none of the real property assets
currently or formerly owned, leased or operated by the Company or its Subsidiary
(including soils and surface and ground waters) are contaminated with any
Hazardous Substance; (c) neither the Company nor its Subsidiary is actually,
potentially or allegedly liable for any off-site contamination by Hazardous
Substances; (d) neither the Company nor its Subsidiary is actually, potentially
or allegedly liable under any Environmental Law (including pending or threatened
liens); (e) the Company and its Subsidiary have all permits, licenses and other
authorizations required under any Environmental Law ("Environmental Permits");
(f) the Company and its Subsidiary are in compliance with their Environmental
Permits; and (g) neither the execution of this Agreement nor the consummation of
the Transactions will require any investigation, remediation or other action
with respect to Hazardous Substances, or any notice to or consent of
Governmental Authorities or third parties, pursuant to any applicable
Environmental Law or Environmental Permit.
Section 6.16. Material Contracts. Section 6.16(a) of the Company Disclosure
Schedule sets forth a list of the following types of contracts and agreements to
which the Company or its Subsidiary is a party (such contracts, agreements and
arrangements as are required to be set forth in Section 6.16(a) of the Company
Disclosure Schedule being the "Material Contracts"):
(i) each contract and agreement which is likely to involve
consideration of more than $50,000, in the aggregate, over the
remaining term of such contract or agreement;
(ii) all broker, distributor, dealer, manufacturer's
representative, franchise, agency, sales promotion, market
research, marketing consulting and advertising contracts and
agreements to which the Company or its Subsidiary is a party;
(iii) all management contracts (excluding contracts for employment)
and contracts with consultants, including any contracts
involving the payment of royalties or other amounts calculated
based upon the revenues or income of the Company or its
Subsidiary or income or revenues related to any Company
Product to which the Company or its Subsidiary is a party;
(iv) all contracts and agreements evidencing indebtedness;
(v) all contracts and agreements with any Governmental Authority
to which the Company or its Subsidiary is a party;
(vi) all contracts and agreements that limit, or purport to limit,
the ability of the Company or its Subsidiary to compete in any
line of business or with any person or entity or in any
geographic area or during any period of time;
(vii) all contracts and agreements providing for benefits under any
Plan;
(viii) all material contracts or arrangements that result in any
person or entity holding a power of attorney from the Company
or its Subsidiary that relates to the Company, its Subsidiary
or their respective businesses;
(ix) all contracts for employment;
(x) all contracts with any stockholders or their affiliates; and
(xi) all other contracts and agreements, whether or not made in the
ordinary course of business, which are material to the Company
and its Subsidiary, taken as a whole, or the conduct of their
respective businesses, or the absence of which would prevent
or materially delay consummation of the Merger or otherwise
prevent or materially delay the Company from performing its
obligations under this Agreement or would have a Company
Material Adverse Effect.
(b) Except as would not prevent or materially delay consummation of the
Merger or otherwise prevent or materially delay the Company from performing its
obligations under this Agreement and would not have a Company Material Adverse
Effect, (i) each Material Contract is a legal, valid and binding agreement, and
none of the Material Contracts is in default by its terms or, to the knowledge
of the Company, has been canceled by the other party; (ii) to the Company's
knowledge, no other party is in breach or violation of, or default under, any
Material Contract; (iii) the Company and its Subsidiary are not in receipt of
any claim of default under any such agreement; and (iv) neither the execution of
this Agreement nor the consummation of any Transaction shall constitute default,
give rise to cancellation rights, or otherwise adversely affect any of the
Company's rights in any material respect under any Material Contract. The
Company has furnished or made available to Parent true and complete copies of
all Material Contracts, including any amendments thereto, as set forth in
Section 6.16(b) of the Company Disclosure Schedule.
Section 6.17. Insurance. Section 6.17(a) of the Company Disclosure Schedule sets
forth, with respect to each insurance policy under which the Company or its
Subsidiary has been an insured, a named insured or otherwise the principal
beneficiary of coverage at any time within the past three years, (i) the names
of the insurer, the principal insured and each named insured, (ii) the policy
number, (iii) the period, scope and amount of coverage and (iv) the premium
charged.
(b) With respect to each such insurance policy: (i) to the knowledge of
the Company, the policy is legal, valid, binding and enforceable in accordance
with its terms (subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar Laws of general applicability relating to
or affecting creditor rights and for general equitable and public policy
principles), and, except for policies that have expired under their terms in the
ordinary course, is in full force and effect; (ii) neither the Company nor its
Subsidiary is in material breach or default (including any such breach or
default with respect to the payment of premiums or the giving of notice), and no
event has occurred which, with notice or the lapse of time, would constitute
such a breach or default, or permit termination or modification, under the
policy; and (iii) to the knowledge of the Company, no insurer on the policy has
been declared insolvent or placed in receivership, conservatorship or
liquidation.
(c) At no time subsequent to July 31, 2000 has the Company or its
Subsidiary (i) been denied any insurance or indemnity bond coverage which it has
requested, (ii) made any material reduction in the scope or amount of its
insurance coverage or (iii) received notice from any of its insurance carriers
that any insurance premiums will be subject to increase in an amount materially
disproportionate to the amount of the increases with respect thereto (or with
respect to similar insurance) in prior years or that any insurance coverage
listed in Section 6.17(a) of the Company Disclosure Schedule will not be
available in the future substantially on the same terms as are now in effect.
Section 6.18. Information to Be Supplied. (a) Each of the documents, if any,
required to be filed by the Company with the SEC in connection with the Offer,
the Merger and the other Transactions will comply as to form in all material
respects with the requirements of the Exchange Act and the Securities Act, as
the case may be, and applicable rules and regulations thereunder. Each of the
documents, if any, required to be filed by the Company with the SEC in
connection with the Offer, the Merger and the other Transactions, and any of the
information supplied or to be supplied by the Company or its Subsidiary or their
representatives for inclusion or incorporation by reference in the Offer
Documents or the Merger Registration Statement, will not, on the date of its
filing or mailing or, in the case of the Merger Proxy Statement/Prospectus, at
the time of the Company Stockholders' Meeting or, in the case of the Offer
Documents, at the time the Offer is commenced or at the time Shares are accepted
for exchange pursuant to the Offer, 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. If, at any time prior to the
Effective Time, any event or circumstance relating to the Company or its
Subsidiary, or their respective officers or directors, should be discovered by
the Company which should be set forth in an amendment or a supplement to the
Offer Documents, the Merger Registration Statement or the Merger Proxy
Statement/Prospectus, the Company shall promptly inform Parent.
(b) Notwithstanding the foregoing provisions of this Section 6.18, no
representation or warranty is made by the Company with respect to statements
made or incorporated by reference in the Offer Documents, Merger Registration
Statement, the Merger Proxy Statement/Prospectus or the Schedule TO based on
information supplied by or on behalf of Parent or Purchaser for inclusion or
incorporation by reference therein or based on information which is not made in
or incorporated by reference in such documents but which should have been
disclosed pursuant to Section 7.10.
Section 6.19. Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the
Transactions based upon arrangements made by or on behalf of the Company.
Section 6.20. Opinion of Advisor. The Company (a) received the opinion of Duff &
▇▇▇▇▇▇ LLC, dated the date of the Original Agreement, to the effect that, as of
the date thereof, the Consideration was fair, from a financial point of view, to
the stockholders of the Company and (b) has received the opinion of Duff &
▇▇▇▇▇▇ LLC, dated the date of this Agreement, to the effect that, as of the date
hereof, the Consideration is fair, from a financial point of view, to the
stockholders of the Company.
Article VII
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
Parent and Purchaser hereby, jointly and severally, represent and
warrant as of the date of the Original Agreement (except as specifically
represented and warranted as of a date subsequent to October 29, 2003), and as
of the date of this Agreement to the Company that:
Section 7.01. Corporate Organization. Each of Parent and Purchaser is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has the requisite corporate power and authority and
all necessary governmental approvals to own, lease and operate its properties
and to carry on its business as it is now being conducted, except where the
failure to be so organized, existing or in good standing or to have such power,
authority and governmental approvals would not prevent or materially delay
consummation of the Merger or otherwise prevent or materially delay Parent or
Purchaser from performing their obligations under this Agreement and would not
have a Parent Material Adverse Effect.
Section 7.02. Certificate of Incorporation and By-laws. Parent has heretofore
furnished to the Company a complete and correct copy of the Certificate of
Incorporation and the By-laws of Parent and the Certificate of Incorporation and
By-laws of Purchaser, each as amended to date. Such Certificates of
Incorporation and By-laws are in full force and effect. Neither Parent nor
Purchaser is in violation of any of the provisions of its Certificate of
Incorporation or By-laws.
Section 7.03. Capitalization. (a) The authorized common stock of Parent consists
of 1,200,000,000 shares of Parent Common Stock. As of March 31, 2005, (i)
835,141,816 shares of Parent Common Stock are issued and outstanding, all of
which are validly issued, fully paid and non-assessable and (ii) 9,423,476
shares of Parent Common Stock are held in the treasury of Parent. Except as set
forth in this Section 7.03, except for stock options granted pursuant to the
stock option plans of Parent and except for contingent payments associated with
certain business combinations, there are no options, warrants or other rights,
agreements, arrangements or commitments of any character relating to the issued
or unissued capital stock of Parent or Purchaser or obligating Parent or
Purchaser to issue or sell any shares of capital stock of, or other equity
interests in, Parent or Purchaser. All shares of Parent Common Stock subject to
issuance as aforesaid, upon issuance on the terms and conditions specified in
the instruments pursuant to which they are issuable, will be duly authorized,
validly issued, fully paid and non-assessable. There are no outstanding
contractual obligations of Parent or Purchaser to repurchase, redeem or
otherwise acquire any shares of Parent Common Stock or any capital stock of
Purchaser. There are no outstanding contractual obligations of Parent to provide
funds to, or make any investment (in the form of a loan, capital contribution or
otherwise) in, Purchaser or any other person.
(b) The authorized capital stock of Purchaser consists of 1,000 shares
of common stock, par value $0.01 per share, all of which are duly authorized,
validly issued, fully paid and non-assessable and free of any preemptive rights
in respect thereof and all of which are owned by Parent. Each outstanding share
of capital stock of Purchaser is duly authorized, validly issued, fully paid and
non-assessable.
(c) The Share Consideration, including the shares of Parent Common
Stock, if any, to be issued pursuant to the Exchange Offer and the Merger (i)
will be duly authorized, validly issued, fully paid and non-assessable and not
subject to any Liens or preemptive rights created by statute, Parent's
Certificate of Incorporation or By-laws or any agreement to which Parent is a
party or is bound and (ii) will, when issued, be registered under the Securities
Act and registered or exempt from registration under applicable Blue Sky Laws.
Section 7.04. Authority Relative to this Agreement. Each of Parent and Purchaser
has all necessary corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and, if it exercises an Option,
to consummate the Transactions. The execution and delivery of this Agreement by
Parent and Purchaser have been duly and validly authorized by all necessary
corporate action, and no other corporate proceedings on the part of Parent or
Purchaser are necessary to authorize this Agreement. This Agreement has been
duly and validly executed and delivered by Parent and Purchaser and, assuming
due authorization, execution and delivery by the Company, constitutes a legal,
valid and binding obligation of each of Parent and Purchaser, enforceable
against each of Parent and Purchaser in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditor rights
and general equitable and public policy principles.
Section 7.05. No Conflict; Required Filings and Consents. (a) The execution and
delivery of this Agreement by Parent and Purchaser do not, and the performance
of this Agreement by Parent and Purchaser will not, (i) conflict with or violate
the Certificate of Incorporation or By-laws or other organizational documents of
either Parent or Purchaser, (ii) assuming that all consents, approvals,
authorizations and other actions described in Section 7.05(b) have been obtained
and all filings and obligations described in Section 7.05(b) have been made,
conflict with or violate any Law applicable to Parent or Purchaser or by which
any property or asset of either of them is bound or affected or (iii) result in
any breach of, or constitute a default (or an event which, with notice or lapse
of time or both, would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or other encumbrance on any property or asset of Parent or
Purchaser pursuant to, any note, bond, mortgage, indenture, contract, agreement,
lease, license, permit, franchise or other instrument or obligation to which
Parent or Purchaser is a party or by which Parent or Purchaser or any property
or asset of either of them is bound or affected, except, with respect to clause
(iii), for any such conflicts, violations, breaches, defaults or other
occurrences which would not prevent or materially delay consummation of the
Transactions or otherwise prevent or materially delay Parent and Purchaser from
performing their obligations under this Agreement and would not have a Parent
Material Adverse Effect.
(b) The execution and delivery of this Agreement by Parent and
Purchaser does not, and the performance of this Agreement by Parent and
Purchaser will not, require any consent, approval, authorization or permit of,
or filing with or notification to, any Governmental Authority, except (i) for
applicable requirements, if any, of the Securities Act, the Exchange Act, Blue
Sky Laws and state takeover laws, non-U.S. antitrust laws, the HSR Act and
filing and recordation of appropriate merger documents as required by the DGCL,
and (ii) where the failure to obtain such consents, approvals, authorizations or
permits, or to make such filings or notifications, would not prevent or
materially delay consummation of the Transactions, or otherwise prevent Parent
or Purchaser from performing their material obligations under this Agreement.
Section 7.06. Permits; Compliance. Each of Parent and Purchaser is in possession
of all franchises, grants, authorizations, licenses, permits, easements,
variances, exceptions, consents, certificates, approvals and orders of any
Governmental Authority necessary for Parent or Purchaser to own, lease and
operate its properties or to carry on its business as it is now being conducted
(the "Parent Permits"), except where the failure to have, or the suspension or
cancellation of, any of the Parent Permits would not prevent or materially delay
consummation of the Transactions or otherwise prevent or materially delay Parent
from performing its obligations under this Agreement or would not have a Parent
Material Adverse Effect. No suspension or cancellation of any of the Parent
Permits is pending or, to the knowledge of Parent, threatened. Neither Parent
nor Purchaser is in conflict with, or in default, breach or violation of, (a)
any Law applicable to Parent or Purchaser or by which any property or asset of
Parent or Purchaser is bound or affected or (b) any note, bond, mortgage,
indenture, contract, agreement, lease, license, Parent Permit, franchise or
other instrument or obligation to which Parent or Purchaser is a party or by
which Parent or Purchaser or any property or asset of Parent or Purchaser is
bound.
Section 7.07. SEC Filings; Financial Statements. (a) Parent has filed all forms,
reports and documents required to be filed by it with the SEC since December 31,
2001 (collectively, the "Parent SEC Reports"). The Parent SEC Reports (i) were
prepared in all material respects in accordance with either the requirements of
the Securities Act or the Exchange Act, as the case may be, and the rules and
regulations promulgated thereunder, and (ii) did not, at the time they were
filed, or, if amended, as of the date of such amendment, contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading.
(b) Each of the consolidated financial statements (including, in each
case, any notes thereto) contained in the Parent SEC Reports was prepared in
accordance with GAAP applied on a consistent basis throughout the periods
indicated (except as may be indicated in the notes thereto or, in the case of
unaudited statements, as permitted by Form 10-Q of the SEC) and each fairly
presents, in all material respects, the consolidated financial position, results
of operations and cash flows of Parent and its consolidated subsidiaries as at
the respective dates thereof and for the respective periods indicated therein,
except as otherwise noted therein (subject, in the case of unaudited statements,
to normal and recurring year-end adjustments which have not had, and would not
have, a Parent Material Adverse Effect).
Section 7.08. Absence of Certain Changes or Events. Since December 31, 2003,
except as expressly contemplated by this Agreement, there has not been any
Parent Material Adverse Effect.
Section 7.09. Operations of Purchaser. Purchaser is a direct, wholly owned
subsidiary of Parent, was formed solely for the purpose of engaging in the
Transactions, has engaged in no other business activities and has conducted its
operations only as contemplated by this Agreement.
Section 7.10. Information to Be Supplied. (a) Each of the Schedule TO and the
other documents, if any, required to be filed by Parent with the SEC in
connection with the Offer and the Merger shall comply as to form in all material
respects with the requirements of the Exchange Act and the Securities Act, as
the case may be, and applicable rules and regulations thereunder. Each of the
Schedule TO and the other documents, if any, required to be filed by the Company
with the SEC in connection with the Offer, the Merger and the other Transactions
and any information supplied or to be supplied by Parent or its subsidiaries or
their representatives for inclusion or incorporation by reference in the Offer
Documents or the Merger Registration Statement/Prospectus will not, on the date
of its filing or mailing or at the time they become effective under the
Securities Act or, in the case of the Exchange Offer Registration Statement, on
the dates the Offer Documents are mailed to stockholders of the Company and at
the time Shares are accepted for exchange pursuant to the Offer and, in the case
of the Merger Registration Statement, at the time of the Company Stockholders'
Meeting, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading. If, at any time prior to the Effective Time, any event or
circumstance relating to Parent or Purchaser, or their respective officers or
directors, should be discovered by Parent which should be set forth in an
amendment or a supplement to the Offer Documents, the Merger Registration
Statement or the Merger Proxy Statement/Prospectus, Parent shall promptly inform
the Company.
(b) Notwithstanding the foregoing provisions of this Section 7.10, no
representation or warranty is made by Parent with respect to statements made or
incorporated by reference in the Offer Documents, the Merger Registration
Statement, the Merger Proxy Statement/Prospectus or the Schedule TO based on
information supplied by or on behalf of the Company or its Subsidiary for
inclusion or incorporation by reference therein or based on information which is
not made in or incorporated by reference in such documents but which should have
been disclosed pursuant to Section 6.18.
Section 7.11. Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the
Transactions based upon arrangements made by or on behalf of Parent or
Purchaser.
Section 7.12. Financial Projections. Each of Parent and Purchaser has conducted
its own independent review and analysis of the financial prospects of the
business and has not relied on any financial projections provided by the Company
in connection with entering into this Agreement.
Section 7.13. Investor Representations. (a) Investment. Each of Parent and
Purchaser acquired the shares of Preferred Stock for its own account for
investment and not with a view to, or for sale in connection with, any
distribution thereof, nor with any present intention of distributing or selling
the same; and, except as contemplated by this Agreement, each of Parent and
Purchaser has no present or contemplated agreement, undertaking, arrangement,
obligation, indebtedness or commitment providing for the disposition thereof.
Each of such Parent and Purchaser is an "accredited investor" as defined in Rule
501(a) under the Securities Act. Each of such Parent and Purchaser understands
that the Preferred Stock has not been, and will not be, registered under the
Securities Act by reason of a specific exemption from the registration
provisions of the Securities Act, the availability of which depends upon, among
other things, the bona fide nature of the investment intent and the accuracy of
the representations as expressed herein. Parent and Purchaser further understand
that there is no assurance that any exemption from the Securities Act will be
available or, if available, that such exemption will allow Parent or Purchaser
to dispose of or otherwise transfer any or all of the Preferred Stock in the
amounts or at the times they might propose. Parent and Purchaser know of no
public solicitation or advertisement of an offer in connection with the proposed
issuance and sale of the Preferred Stock.
(b) No Public Market. Each of Parent and Purchaser understands that no
public market now exists for the Preferred Stock issued by the Company and that
the Company has made no assurances that a public market will ever exist for such
Preferred Stock. Each of Parent and Purchaser acknowledges that the Preferred
Stock and the underlying Common Stock must be held indefinitely unless
subsequently registered under the Securities Act or unless an exemption from
such registration is available.
Article VIII
CONDUCT OF BUSINESS PENDING THE MERGER
Section 8.01. Conduct of Business by the Company. The Company agrees that,
between the date of the Original Agreement and the Effective Time, except as set
forth in Section 8.01 of the Company Disclosure Schedule, unless Parent shall
otherwise consent in writing or unless otherwise instructed or approved by the
Company Board following the election of Parent's nominees to the Company Board
pursuant to Section 3.04:
(i) the businesses of the Company and its Subsidiary shall be conducted
only in, and the Company and its Subsidiary shall not take any action
except in, the ordinary course of business and in a manner consistent
with past practice; provided that the Company shall be entitled to
establish and fund an account in the amount of $300,000 for the purpose
of funding the costs and expenses incurred by the Former Stockholders
Committee and the Stockholders' Representative in connection with
performing their obligations hereunder; provided, further that any
funds remaining in such account shall revert to the general account of
the Company after the expiry of such obligations; and
(ii) the Company shall use its reasonable best efforts to preserve
substantially intact the business organization of the Company and its
Subsidiary, to keep available the services of the current officers,
employees and consultants of the Company and its Subsidiary and to
preserve the current relationships of the Company and its Subsidiary
with customers, suppliers and other persons with which the Company or
its Subsidiary has significant business relations.
By way of amplification and not limitation, except as expressly
contemplated by any other provision of this Agreement or as set forth in Section
8.01 of the Company Disclosure Schedule, neither the Company nor its Subsidiary
shall, between the date of this Agreement and the Effective Time, directly or
indirectly, do, or propose to do, any of the following without the prior written
consent of Parent (which consent shall not be unreasonably withheld):
(a) engage in any activity that could impair Parent's or Purchaser's
ability to exercise the Option or consummate the Transactions;
(b) amend or otherwise change its Certificate of Incorporation or
By-laws or equivalent organizational documents;
(c) issue, sell, pledge, dispose of, grant or encumber, or authorize
the issuance, sale, pledge, disposition, grant or encumbrance of, (i) any shares
of any class of capital stock of the Company or its Subsidiary, or any options,
warrants, convertible securities or other rights of any kind to acquire any
shares of such capital stock, or any other ownership interest (including any
phantom interest), of the Company or its Subsidiary, except for options issued
in the ordinary course of business to employees of the Company in an amount not
to exceed, in the aggregate, the amount authorized pursuant to the Company Stock
Option Plan as of the date hereof, or (ii) any assets of the Company or its
Subsidiary except for the sale of inventory in the ordinary course of business;
(d) except as expressly set forth in, and permitted by, Section 5.01,
waive any stock repurchase rights, accelerate, amend or change the period of
exercisability of options or restricted stock, reprice options granted under the
Company Stock Option Plan or authorize cash payments in exchange for any options
granted under such plan;
(e) declare, set aside, make or pay any dividend or other distribution,
payable in cash, stock, property or otherwise, with respect to any of its
capital stock;
(f) reclassify, combine, split, subdivide or redeem, or purchase or
otherwise acquire, directly or indirectly, any of its capital stock;
(g) (i) acquire (including by merger or acquisition of stock or assets
or any other business combination) any corporation, partnership, other business
organization or any division thereof or any material amount of assets; (ii)
incur any indebtedness for borrowed money or issue any debt securities or
assume, guarantee or endorse, or otherwise become responsible for, the
obligations of any person, or make any loans or advances, or grant any security
interest in any of its assets; (iii) enter into any contract or agreement other
than in the ordinary course of business and consistent with past practice; (iv)
authorize, or make any commitment with respect to, any single capital
expenditure which is in excess of $250,000 or capital expenditures which are, in
the aggregate, in excess of $500,000 for the Company and its Subsidiary in any
calendar year; (v) enter into any distribution or supply contract or agreement
that is not terminable by the Company or its Subsidiary without penalty within
60 days; or (vi) enter into or amend any contract, agreement, commitment or
arrangement with respect to any matter set forth in this Section 8.01(g);
(h) except as provided in existing agreements between the Company and
any director, officer or employee, copies of which have been provided to Parent
prior to the date hereof, and except as required by Law, increase or promise to
increase the compensation payable or to become payable or the benefits provided
to its directors, officers or employees, except for increases in the ordinary
course of business and consistent with past practice in salaries or wages of
employees of the Company or its Subsidiary who are not directors or officers of
the Company or its Subsidiary, or grant or promise to grant any severance or
termination pay to, or enter into any employment, service retention, change of
control or severance agreement with, any director, independent contractor,
officer or other employee of the Company or of its Subsidiary, or establish,
adopt, enter into or amend or promise to enter into or amend any collective
bargaining, bonus, profit-sharing, thrift, compensation, stock option,
restricted stock, pension, retirement, service retention, change of control,
deferred compensation, employment, termination, severance or other plan,
agreement, trust, fund, policy or arrangement for the benefit of any director,
officer, independent contractor or employee;
(i) take any action, other than reasonable and usual actions in the
ordinary course of business and consistent with past practice, with respect to
accounting policies or procedures;
(j) make, revoke or change any Tax election or method of Tax accounting
or settle or compromise any Tax liability;
(k) pay, discharge or satisfy any claim, liability or obligation
(absolute, accrued, asserted or unasserted, contingent or otherwise), other than
the payment, discharge or satisfaction, in the ordinary course of business and
consistent with past practice, of liabilities reflected or reserved against in
the 2002 Balance Sheet or subsequently incurred in the ordinary course of
business and consistent with past practice;
(l) amend, modify or consent to the termination of any Material
Contract, or amend, waive, modify or consent to the termination of the Company's
or its Subsidiary's rights thereunder;
(m) in-license any royalty-bearing Intellectual Property or license or
sublicense to any person any Company Owned Intellectual Property or Company
Licensed Intellectual Property;
(n) commence any Action other than an Action to enforce or to recover
damages for breach of this Agreement without first consulting with Parent or
agree to pay in any calendar year any royalties for Intellectual Property that
exceed in the aggregate 7% of Net Sales in such calendar year; or
(o) announce an intention, enter into any formal or informal agreement
or otherwise make a commitment, to do any of the foregoing.
Section 8.02. Intellectual Property. The Company shall maintain at least one
pending U.S. patent application in each independent patent family until the
expiration of the Option Period.
Article IX
ADDITIONAL AGREEMENTS
Section 9.01. Access to Information; Confidentiality. (a) From the date of the
Original Agreement until the Effective Time, the Company shall and shall cause
its Subsidiary to: (i) provide to Parent (and Parent's officers, directors,
employees, accountants, consultants, legal counsel, agents and other
representatives, collectively, "Representatives") access at reasonable times
upon prior notice to the officers, employees, agents, properties, offices and
other facilities of such party and its subsidiaries and to the books and records
thereof; (ii) furnish promptly to Parent such information concerning the
business, properties, contracts, assets, liabilities, personnel and other
aspects of such party and its subsidiaries as Parent or its Representatives may
reasonably request; and (iii) without limiting the generality of the foregoing
clauses (i) and (ii), the Company shall allow Parent to conduct in all respects
a customary due diligence investigation, including a quality audit, operations
audit and technical review; provided, however, that the documents set forth in
Section 9.01 of the Company Disclosure Schedule shall be provided only to Parent
upon Parent's written request and upon receipt by the Company from Parent of
reasonable assurances that Parent is requesting such documents in good faith and
in contemplation of its exercise of the Options and consummation of the
Transactions.
(b) All information obtained by Parent pursuant to this Section 9.01
shall be kept confidential in accordance with the Confidential Disclosure
Agreement, dated December 16, 2002 (the "Confidentiality Agreement"), between
Parent and the Subsidiary.
(c) No investigation pursuant to this Section 9.01 shall affect any
representation or warranty in this Agreement of any party hereto or any
condition to the obligations of the parties hereto.
(d) Notwithstanding anything herein to the contrary, each party (and
its representatives, agents and employees) may consult any tax advisor regarding
the tax treatment and tax structure of the Transactions and, upon reasonable
advance notice to the other party, may disclose to any person, without
limitation of any kind, the tax treatment and tax structure of the Transactions
and all materials (including opinions or other tax analyses) that are provided
relating to such treatment or structure.
Section 9.02. No Solicitation of Transactions. (a) The Company shall not,
directly or indirectly, and shall instruct its officers, directors, employees,
Subsidiary, agents or advisors or other representatives (including any
investment banker, attorney or accountant retained by it) not to, directly or
indirectly, solicit, initiate or knowingly encourage (including by way of
furnishing nonpublic information), or take any other action knowingly to
facilitate, any inquiries or the making of any proposal or offer (including any
proposal or offer to its stockholders) that constitutes, or may reasonably be
expected to lead to, any Competing Transaction (as defined below), or enter into
or maintain or continue discussions or negotiate with any person or entity in
furtherance of such inquiries or to obtain a Competing Transaction, or agree to
or endorse any Competing Transaction, or authorize or permit any of the
officers, directors or employees of such party or its Subsidiary, or any
investment banker, financial advisor, attorney, accountant or other
representative retained by the Company or its Subsidiary, to take any such
action. The Company shall notify Parent promptly if any proposal or offer, or
any inquiry or contact with any person with respect thereto, regarding a
Competing Transaction is made. The Company immediately shall cease and cause to
be terminated all existing discussions or negotiations with any parties
conducted heretofore with respect to a Competing Transaction. The Company shall
not release any third party from, or waive any provision of, any confidentiality
or standstill agreement to which it is a party.
(b) Notwithstanding anything to the contrary in this Section 9.02, the
Company Board may furnish information to, and enter into discussions with, a
person who has made an unsolicited, written, bona fide proposal or offer
regarding a Competing Transaction, if the Company Board has (i) determined, in
its good faith judgment (after having received the advice of Duff & ▇▇▇▇▇▇ LLC
or another financial advisor of nationally recognized reputation), that such
proposal or offer constitutes a Superior Proposal (as defined below), (ii)
determined, in its good faith judgment after consultation with independent legal
counsel (who may be the Company's regularly engaged independent legal counsel),
that, in light of such Superior Proposal, the furnishing of such information or
entering into discussions is required to comply with its fiduciary obligations
to the Company and its stockholders under Law, (iii) provided written notice to
Parent at least three business days prior to taking any such action of (x) its
intent to furnish information or enter into discussions with such person, (y)
the identity of such person and (z) the terms and conditions of such proposal or
offer and (iv) obtained from such person an executed confidentiality agreement
on terms no less favorable to the Company than those contained in the
Confidentiality Agreement.
(c) A "Competing Transaction" means any of the following (other than
the Transactions): (i) any merger, consolidation, share exchange, business
combination, recapitalization, liquidation, dissolution or other similar
transaction involving the Company or its Subsidiary; (ii) any sale, lease,
exchange, transfer, license or other disposition of all or a substantial part of
the assets of the Company or its Subsidiary; (iii) any sale, exchange, transfer
or other disposition of 20% or more of any class of equity securities of the
Company or its Subsidiary; (iv) any tender offer or exchange offer that, if
consummated, would result in any person beneficially owning 20% or more of any
class of equity securities of the Company or its Subsidiary; or (v) any other
transaction the consummation of which would reasonably be expected to impede,
interfere with, prevent or materially delay any of the Transactions.
(d) A "Superior Proposal" means an unsolicited written bona fide offer
made by a third party to consummate any of the following transactions: (i) a
merger, consolidation, share exchange, business combination or other similar
transaction involving the Company pursuant to which the shareholders of the
Company immediately preceding such transaction would hold less than 50% of the
equity interest in the surviving or resulting entity of such transaction or (ii)
the acquisition by any person or group (including by means of a tender offer or
an exchange offer or a two-step transaction involving a tender offer followed
with reasonable promptness by a cash-out merger involving the Company), directly
or indirectly, of ownership of 100% of the then outstanding shares of stock of
the Company, on terms (including conditions to consummation of the contemplated
transaction) that the Company Board determines, in its good faith judgment
(after having received the advice of Duff & ▇▇▇▇▇▇ LLC or another financial
advisor of nationally recognized reputation), to be more favorable to the
Company's stockholders than the Merger.
Section 9.03. Notification of Certain Matters. The Company shall give prompt
notice to Parent, and Parent shall give prompt notice to the Company, of (a) the
occurrence, or non-occurrence, of any event the occurrence, or non-occurrence,
of which could reasonably be expected to cause any representation or warranty
contained in this Agreement to be untrue or inaccurate in any material respect
and (b) any failure of the Company, Parent or Purchaser, as the case may be, to
comply with or satisfy any covenant or agreement to be complied with or
satisfied by it hereunder; provided, however, that the delivery of any notice
pursuant to this Section 9.03 shall not limit or otherwise affect the remedies
available hereunder to the party receiving such notice.
Section 9.04. Company Affiliates. No later than five business days after the
exercise of an Option, the Company shall deliver to Parent a list of names and
addresses of those persons who were, in the Company's reasonable judgment, on
such date, affiliates (within the meaning of Rule 145 of the rules and
regulations promulgated under the Securities Act (each such person being a
"Company Affiliate" )) of the Company. The Company shall provide Parent with
such information and documents as Parent shall reasonably request for purposes
of reviewing such list. In the event that an Exchange Offer is commenced, the
Company shall use its reasonable best efforts to deliver or cause to be
delivered to Parent, prior to the Initial Expiration Date, an affiliate letter
in form reasonably satisfactory to Parent, executed by each of the Company
Affiliates identified in the foregoing list and any person who shall, to the
knowledge of the Company, have become a Company Affiliate subsequent to the
delivery of such list.
Section 9.05. Further Action; Reasonable Best Efforts. Upon the terms and
subject to the conditions of this Agreement, each of the parties hereto shall
(i) if required, make promptly its respective filings, and thereafter make any
other required submissions, under the HSR Act and, if applicable, non-U.S.
antitrust laws with respect to the Transactions and (ii) if Parent or Purchaser
exercises any of the Options, use its reasonable best efforts to take, or cause
to be taken, all appropriate action, and to do, or cause to be done, all things
necessary, proper or advisable under Laws or otherwise to consummate and make
effective the Transactions, including using its reasonable best efforts to
obtain all Permits, consents, approvals, authorizations, qualifications and
orders of Governmental Authorities and parties to contracts with the Company and
its Subsidiary as are necessary for the consummation of the Transactions and to
fulfill the conditions to the Merger; provided that neither Purchaser nor Parent
will be required by this Section 9.05 to take any action, including entering
into any consent decree, hold separate orders or other arrangements, that (A)
requires the divestiture of any assets of any of Purchaser, Parent, the Company
or any of their respective subsidiaries or (B) limits Parent's freedom of action
with respect to, or its ability to retain, the Company and its Subsidiary or any
portion thereof or any of Parent's or its affiliates' other assets or
businesses; provided further that nothing in this Agreement shall be deemed to
require either Parent or Purchaser to exercise any Option. In case, at any time
after the Effective Time, any further action is necessary or desirable to carry
out the purposes of this Agreement, the proper officers and directors of each
party to this Agreement shall use their reasonable best efforts to take all such
action.
Section 9.06. NYSE Listing. Parent shall promptly prepare and submit to the NYSE
a listing application covering the shares of Parent Common Stock to be issued in
the Exchange Offer and in the Merger and shall use its reasonable best efforts
to obtain as promptly as reasonably practicable approval for the listing of such
shares of Parent Common Stock, subject to official notice of issuance to the
NYSE, and the Company shall cooperate with Parent with respect to such listing.
Section 9.07. Public Announcements(a) . The initial press release or releases
relating to this Agreement shall have been agreed to by each of Parent and the
Company. Thereafter, (a) unless otherwise required by Law, the Company shall not
issue any press release or otherwise make any public statements with respect to
this Agreement, the Merger or any of the other Transactions without the prior
written consent of Parent and (b) unless otherwise required by Law or the
requirements of the NYSE, Parent shall not issue any press release or otherwise
make any public statements with respect to this Agreement, the Merger or any of
the other Transactions without the prior written consent of the Company.
Section 9.08. Management Team. Parent shall not terminate the employment of
▇▇▇▇▇▇ as President and CEO, ▇▇▇▇▇ ▇'▇▇▇▇▇ as Vice President of Clinical and
Regulatory Affairs, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ as Vice President of Research and
Development, ▇▇▇ ▇▇▇▇▇▇▇ as Vice President of Operations and ▇▇▇▇▇ ▇▇▇▇▇ as
Chief Financial Officer, other than for Cause, prior to the earlier of (a) the
achievement of Milestone 1 and (b) the third anniversary of the date of the
Original Agreement.
Section 9.09. Directors' and Officers' Indemnification. From and after the
Effective Time or at any other time when Parent or Purchaser owns shares of
Common Stock constituting a majority of the shares of outstanding Common Stock,
Parent and Purchaser shall, and shall cause the Surviving Corporation to,
fulfill and honor in all respects the obligations of the Company pursuant to any
indemnification agreements between the Company and its directors, officers and
Controlling Stockholders in effect immediately prior to the Effective Time and
previously made available to Parent prior to the execution hereof, and any
indemnification and limitation of liability provisions under the Company's
Certificate of Incorporation and Bylaws as in effect immediately prior to the
Effective Date, in each case to the extent that such agreements, Certificate of
Incorporation and Bylaws are reasonably acceptable to Parent. Parent and
Purchaser acknowledge that the Company Board has caused the Company to enter
into this Agreement and to enter into the transactions contemplated hereby in
reliance upon the covenants of Parent and Purchaser contained in this Section
9.09 and the further covenant by Parent and Purchaser not to challenge or cause
the Company to challenge the validity or enforceability of such indemnity
agreements entered into in accordance with the terms hereof. In the event the
Company is unable or otherwise fails to meet its indemnification obligations to
any director, officer or Controlling Stockholder under any of the
indemnification agreements referred to in the first sentence of this Section
9.09 (the "Indemnification Agreements"), then Parent shall perform the
indemnification obligations thereunder as to such director, officer or
Controlling Stockholder as if Parent were the indemnitor under such
Indemnification Agreement.
Article X
CONDITIONS TO THE MERGER
Section 10.01. Conditions to the Merger. The obligations of each party to effect
the Merger shall be subject to the satisfaction, at or prior to the Effective
Time, of the following conditions:
(a) Option. Purchaser shall have (i) effected the Purchase Option
Closing or (ii) exercised the Offer Option;
(b) Merger Registration Statement. If required, the Merger Registration
Statement shall have been declared effective by the SEC under the Securities Act
and no stop order suspending the effectiveness of the Merger Registration
Statement shall have been issued by the SEC and no proceeding for that purpose
shall have been initiated by the SEC;
(c) Stockholder Approval. If and to the extent required by the DGCL,
this Agreement shall have been adopted by the affirmative vote of the requisite
number of stockholders of the Company;
(d) No Order. No Governmental Authority shall have enacted, issued,
promulgated, enforced or entered any Law (whether temporary, preliminary or
permanent) which is then in effect and has the effect of making the acquisition
of Shares by Parent or Purchaser or any affiliate of either of them illegal or
otherwise restricting, preventing or prohibiting consummation of the
Transactions;
(e) Offer. Purchaser or its permitted assignee shall have accepted for
exchange or payment, as the case may be, and exchanged and paid for, as the case
may be, all Shares validly tendered and not withdrawn pursuant to the Offer;
(f) U.S. Antitrust Approvals and Waiting Periods. Any waiting period
(and any extension thereof) applicable to the consummation of the Offer or the
Merger under the HSR Act and, if applicable, non-U.S. antitrust laws shall have
expired or been terminated; and
(g) NYSE Listing. The shares of Parent Common Stock to be issued in the
Merger, if any, shall have been authorized for listing on the NYSE, subject to
official notice of issuance.
Article XI
TERMINATION, AMENDMENT AND WAIVER
Section 11.01. Termination. This Agreement shall or may be terminated and the
Merger and the other Transactions may be abandoned, notwithstanding any
requisite adoption of this Agreement by the stockholders of the Company in the
following circumstances:
(a) automatically, if following exercise of the Offer Option, the
Effective Time has not occurred within 24 months after exercise of the Offer
Option; provided that any termination pursuant to this Section 11.01(a) shall
not limit any remedy available to Parent or Purchaser if such delay is the
result of the Company's breach of this Agreement;
(b) by mutual written consent of each of Parent and the Company at any
time prior to the Effective Time;
(c) by Parent at any time following the exercise of an Option and prior
to the acquisition of Shares by Purchaser pursuant to the Offer, if due to an
occurrence or circumstance that would result in a failure to satisfy any
condition set forth in Annex A (other than a condition that has been waived),
Purchaser shall have (i) failed to commence the Offer within 30 days following
the Purchase Option Closing or the exercise of the Offer Option, as applicable,
(ii) terminated the Offer without having accepted any Shares for payment
thereunder or (iii) failed to accept Shares for payment pursuant to the Offer
within 90 days following the commencement of the Offer (provided, however, that
the applicable time period specified in clause (iii) of this Section 11.01(c)
shall be extended until the earlier to occur of (A) the fifth business day
following the public announcement of the expiration or termination of any
applicable waiting period under the HSR Act and (B) 180 days following the
exercise of an Option), unless such action or inaction under clauses (i), (ii)
or (iii) of this Section 11.01(c) shall have been caused by or resulted from the
failure of Parent or Purchaser to perform, in any material respect, any of their
material covenants or agreements contained in this Agreement, or the material
breach by Parent or Purchaser of any of their material representations or
warranties contained in this Agreement, in which case Parent may not terminate
this Agreement; or
(d) by the Company, at any time following the exercise of an Option and
prior to the acquisition of Shares by Purchaser pursuant to the Offer, if
Purchaser shall have (X) in breach of the terms of this Agreement by Parent or
Purchaser or (Y) because of the breach by the Company of the terms of this
Agreement, which breach has been caused by any action or failure to act by
Parent or Purchaser by reason of its control of the Company following the
Purchase Option Closing or (Z) because of the failure of any condition in Annex
A not caused by the Company, (i) failed to commence the Offer within 30 days
following the Purchase Option Closing or the exercise of the Offer Option, as
applicable, (ii) terminated the Offer without having accepted any Shares for
payment thereunder or (iii) failed to accept Shares for payment pursuant to the
Offer within 90 days following the commencement of the Offer (provided, however,
that the applicable time period specified in clause (iii) of this Section
11.01(d) shall be extended until the earlier to occur of (A) the fifth business
day following the public announcement of the expiration or termination of any
applicable waiting period under the HSR Act and (B) 180 days following the
exercise of an Option), unless such action or inaction under clauses (i), (ii)
or (iii) of this Section 11.01(d) shall have been caused by or resulted from the
failure of the Company or any of the Controlling Stockholders to perform, in any
material respect, any of their respective material covenants or agreements
contained in this Agreement or the Option Agreements or any material breach by
the Company or the Controlling Stockholders of any of their material
representations or warranties contained in this Agreement or the Option
Agreements, in which case the Company may not terminate this Agreement.
The party desiring to terminate this Agreement shall give written notice of such
termination to the other party.
Section 11.02. Effect of Termination. In the event of the termination of this
Agreement pursuant to Section 11.01, this Agreement shall forthwith become void,
and there shall be no liability hereunder on the part of any party hereto,
except (a) as set forth in Section 11.03 and (b) nothing herein shall relieve
any party from liability for any breach hereof prior to the date of such
termination; provided, however, that the Confidentiality Agreement and the terms
of Section 9.01(b) and Article XII shall survive any termination of this
Agreement.
Section 11.03. Fees and Expenses. All expenses incurred in connection with this
Agreement and the Transactions shall be paid by the party incurring such
expenses, whether or not the Merger or any other Transaction is consummated.
Section 11.04. Amendment. This Agreement may be amended by the parties hereto at
any time prior to the Effective Time; provided, however, that, after the
adoption of this Agreement by the stockholders of the Company, no amendment may
be made that would reduce the amount or change the type of consideration into
which each Share shall be converted upon consummation of the Merger. This
Agreement may not be amended except by an instrument in writing signed by each
of the parties hereto.
Section 11.05. Waiver. At any time prior to the Effective Time, any party hereto
may (a) extend the time for the performance of any obligation or other act of
any other party hereto, (b) waive any inaccuracy in the representations and
warranties of any other party contained herein or in any document delivered
pursuant hereto and (c) waive compliance with any agreement of any other party
or any condition to its own obligations contained herein. Any such extension or
waiver shall be valid if set forth in an instrument in writing signed by the
party or parties to be bound thereby.
Article XII
GENERAL PROVISIONS
Section 12.01. Non-Survival of Representations, Warranties and Agreements. The
representations, warranties and agreements in this Agreement and in any
certificate delivered pursuant hereto shall terminate at the Effective Time or
upon the termination of this Agreement pursuant to Section 11.01, as the case
may be, except that the agreements that by their terms survive the Effective
Time shall survive the Effective Time.
Section 12.02. Withholding Rights. Each of the Surviving Corporation and Parent
shall be entitled to deduct and withhold from the consideration otherwise
payable pursuant to this Agreement to any holder of Shares such amounts as it is
required to deduct and withhold with respect to the making of such payment under
the Code, or any provision of state, local or foreign tax law. To the extent
that amounts are so withheld by the Surviving Corporation or Parent, as the case
may be, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the holder of the Shares in respect of which
such deduction and withholding was made by the Surviving Corporation or Parent,
as the case may be.
Section 12.03. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by telecopy
or email or by registered or certified mail (postage prepaid, return receipt
requested) to the respective parties at the following addresses (or at such
other address for a party as shall be specified in a notice given in accordance
with this Section 12.03):
if to Parent or Purchaser:
Boston Scientific Corporation
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Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
with a copy to:
Boston Scientific Corporation
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Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Assistant General Counsel
Shearman & Sterling LLP
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Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇'▇▇▇▇▇
if to the Company:
Rubicon Medical Corporation
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Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: President and CEO
with a copy to:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
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Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: R. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
if to the Stockholders' Representative:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Rubicon Medical Corporation
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Section 12.04. 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 is not affected in any manner materially adverse to any party.
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 in order that the
Transactions be consummated as originally contemplated to the fullest extent
possible.
Section 12.05. Entire Agreement; Assignment. This Agreement, the Option
Agreements, the Registration Rights Agreement and the Confidentiality Agreement
constitute the entire agreement among the parties with respect to the subject
matter hereof and supersede all prior agreements and undertakings, both written
and oral, among the parties, or any of them, with respect to the subject matter
hereof, including the Term Sheet and the Original Agreement. This Agreement
shall not be assigned (whether pursuant to a merger, by operation of law or
otherwise), except that Parent and Purchaser may assign all or any of their
rights and obligations hereunder to any affiliate of Parent.
Section 12.06. Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any other person any
right, benefit or remedy of any nature whatsoever under or by reason of this
Agreement, other than Section 9.01 (which is intended to be for the benefit of
the persons covered thereby and may be enforced by such persons); provided that
Stockholders' Representative shall be entitled to enforce the provisions of
Section 5.03 against Parent or Purchaser on behalf of the Earn-out Recipients;
and provided, further that the directors, officers and Controlling Stockholders
of the Company as of the date of this Agreement shall be third party
beneficiaries of Section 9.09 and shall have the right the enforce the same in
the event of a breach of Section 9.09 by Parent.
Section 12.07. Specific Performance. The parties hereto agree that irreparable
damage would occur in the event any provision of this Agreement were not
performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or equity.
Section 12.08. Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Delaware. All actions and
proceedings arising out of or relating to this Agreement shall be heard and
determined exclusively in any Delaware state or federal court sitting in
Wilmington, Delaware. The parties hereto hereby (a) submit to the exclusive
jurisdiction of any state or federal court sitting in Wilmington, Delaware for
the purpose of any Action arising out of or relating to this Agreement brought
by any party hereto, and (b) irrevocably waive, and agree not to assert by way
of motion, defense, or otherwise, in any such Action, any claim that it is not
subject personally to the jurisdiction of the above-named courts, that its
property is exempt or immune from attachment or execution, that the Action is
brought in an inconvenient forum, that the venue of the Action is improper, or
that this Agreement or the Transactions may not be enforced in or by any of the
above-named courts.
Section 12.09. Waiver of Jury Trial. Each of the parties hereto hereby waives to
the fullest extent permitted by Law any right it may have to a trial by jury
with respect to any litigation directly or indirectly arising out of, under or
in connection with this Agreement or the Transactions. Each of the parties
hereto (a) certifies that no representative, agent or attorney of any other
party has represented, expressly or otherwise, that such other party would not,
in the event of litigation, seek to enforce that foregoing waiver and (b)
acknowledges that it and the other hereto have been induced to enter into this
Agreement and the Transactions, as applicable, by, among other things, the
mutual waivers and certifications in this Section 12.09.
Section 12.10. Headings. The descriptive headings contained in this Agreement
are included for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement.
Section 12.11. Counterparts. This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which when executed
shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement.
Section 12.12. Attorneys' Fees. If any legal action or other proceeding is
brought for the enforcement of this Agreement, or because of an alleged dispute,
breach, default or misrepresentation in connection with any of the provisions of
this Agreement, the successful or prevailing party shall be entitled to recover
reasonable attorneys' fees and other costs incurred in that action or
proceeding, in addition to any other relief to which it may be entitled.
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IN WITNESS WHEREOF, ▇▇▇▇▇▇ has executed this Agreement as of the date
first written above and Parent, Purchaser and the Company have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
BOSTON SCIENTIFIC CORPORATION
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and Chief Executive Office
NEMO I ACQUISITION, INC.
By /s/ ▇▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Assistant Secretary
RUBICON MEDICAL CORPORATION
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President/CEO
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/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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ANNEX A
Conditions to the Offer
Notwithstanding any other provision of the Offer, Purchaser shall not
be required to accept for exchange or payment, as the case may be, or exchange
or pay for, as the case may be, any Shares tendered pursuant to the Offer, and
may extend, terminate or amend the Offer, if (i) any applicable waiting period
under the HSR Act and, if applicable, non-U.S. antitrust laws shall not have
expired or been terminated prior to the expiration of the Offer, (ii) Purchaser
effects an Exchange Offer, the Exchange Offer Registration Statement shall not
have become effective under the Securities Act or shall be the subject of any
stop order or proceedings seeking a stop order, (iii) Purchaser effects an
Exchange Offer, the shares of Parent Common Stock to be issued in the Offer and
the Merger shall not have been approved for listing on the NYSE, subject to
official notice of issuance, or (iv) at any time on or after the exercise of an
Option and prior to the expiration of the Offer, any of the following conditions
shall exist:
(a) there shall have been instituted or be pending any Action
by a party other than Parent or any affiliate of Parent before any
Governmental Authority (i) challenging or seeking to make illegal,
materially delay, or otherwise, directly or indirectly, restrain or
prohibit or make materially more costly, the making of the Offer, the
acceptance for exchange or payment, as the case may be, of any Shares
by Parent, Purchaser or any other affiliate of Parent or the purchase
of Shares pursuant to the Option Agreements, or the consummation of any
other Transaction, or seeking to obtain damages in connection with any
Transaction; (ii) seeking to prohibit or limit the ownership or
operation by the Company, Parent or any of their subsidiaries of all or
any of the business or assets of the Company, Parent or any of their
subsidiaries; (iii) seeking to impose or confirm any limitation on the
ability of Parent, Purchaser or any other affiliate of Parent to
exercise effectively full rights of ownership of any Shares; (iv)
seeking to require divestiture by Parent, Purchaser or any other
affiliate of Parent of any Shares; or (v) which otherwise would prevent
or materially delay consummation of the Offer or the Merger or
otherwise prevent or materially delay the Company from performing its
obligations under this Agreement or would have a Company Material
Adverse Effect;
(b) there shall have been (i) any Law enacted, promulgated,
amended, issued or deemed applicable to (1) Parent, the Company or its
Subsidiary or affiliate of Parent or the Company or (2) any Transaction
or (ii) entered, promulgated or enforced by any court or Governmental
Authority, any Order of any kind which prohibits, restrains, restricts
or enjoins the consummation of the Offer or has effect of making the
Offer illegal, in each case, by any legislative body or Governmental
Authority that would result, directly or indirectly, in any of the
consequences referred to in clauses (i) through (v) of paragraph (a)
above;
(c) any Company Material Adverse Effect shall have occurred;
(d) there shall have occurred any general suspension of
trading in, or limitation on prices for, securities on the NYSE (other
than a shortening of trading hours or any coordinated trading halt
triggered solely as a result of a specified increase or decrease in a
market index);
(e) any representation or warranty of the Company in the
Agreement that is qualified as to materiality or Company Material
Adverse Effect shall not be true and correct or any such representation
or warranty that is not so qualified shall not be true and correct in
any material respect, in each case as if such representation or
warranty was made as of such time on or after the date of this
Agreement;
(f) the Company shall have failed to perform, in any material
respect, any obligation or to comply, in any material respect, with any
agreement or covenant of the Company to be performed or complied with
by it under the Agreement;
(g) the Agreement shall have been terminated in accordance
with its terms; and
(h) Parent and the Company shall have agreed that Purchaser
shall terminate the Offer or postpone the acceptance for exchange or
payment, as the case may be, of Shares thereunder;
which, in the reasonable judgment of Parent in any such case, and regardless of
the circumstances (including any action or inaction by Parent or any of its
affiliates) giving rise to any such condition, makes it inadvisable to proceed
with such acceptance for exchange or payment, as the case may be; provided,
however, that Parent and Purchaser shall be deemed to have waived any of the
foregoing conditions if and to the extent that either Parent or Purchaser,
whether by reason of its control of the Company following the Purchase Option
Closing or otherwise, or any affiliate of Parent or Purchaser, shall have caused
the existence of such condition or conditions.
The foregoing conditions are for the sole benefit of Purchaser and
Parent and may be waived by Purchaser or Parent in whole or in part at any time
and from time to time in their sole discretion. The failure by Parent or
Purchaser at any time to exercise any of the foregoing rights shall not be
deemed a waiver of any such right; the waiver of any such right with respect to
particular facts and other circumstances shall not be deemed a waiver with
respect to any other facts and circumstances; and each such right shall be
deemed an ongoing right that may be asserted at any time and from time to time.
EXHIBIT 1.01
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