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AGREEMENT AND PLAN OF REORGANIZATION
AMONG
CONCEPTUS, INC.
CPTS ACQUISITION CORPORATION
AND
MICROGYN, INC.
DATED AS OF OCTOBER 29, 1996
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TABLE OF CONTENTS
AGREEMENT AND PLAN OF MERGER
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ARTICLE I - THE MERGER...................................... 1
Section 1.1 Actions to be Taken........................ 1
Section 1.2 Common Stock of Surviving Corporation...... 2
Section 1.3 Conversion or Cancellation of
Microgyn Capital Stock..................... 2
Section 1.4 No Fractional Interests.................... 6
Section 1.5 Issuance and Delivery of Merger
Securities................................. 6
Section 1.6 Stock Transfer Books....................... 7
Section 1.7 Shareholders' Meeting...................... 7
Section 1.8 Filing of Merger Documents................. 8
Section 1.9 Merger of Surviving Corporation
and Conceptus.............................. 8
ARTICLE II - REPRESENTATIONS AND WARRANTIES OF MICROGYN..... 8
Section 2.1 Corporate Organization..................... 8
Section 2.2 Capital Structure.......................... 9
Section 2.3 No Other Agreements to Sell
Assets, Merge, Etc......................... 9
Section 2.4 Authorization; Execution and
Delivery................................... 10
Section 2.5 Governmental Approvals and
Filings.................................... 10
Section 2.6 No Conflict................................ 10
Section 2.7 Financial Statements; Absence of
Undisclosed Liabilities.................... 11
Section 2.8 Absence of Changes......................... 11
Section 2.9 Contracts and Commitments.................. 11
Section 2.10 Legal Proceedings......................... 13
Section 2.11 ERISA Matters............................. 13
Section 2.12 Taxes..................................... 14
Section 2.13 Intellectual Property..................... 15
Section 2.14 Environmental Matters..................... 19
Section 2.15 Certain Agreements........................ 20
Section 2.16 Interests of Officers and
Directors................................. 20
Section 2.17 Restrictions on Business
Activities................................ 20
Section 2.18 Title to Properties; Absence of
Liens and Encumbrances; Condition
of Equipment.............................. 20
Section 2.19 Regulatory Matters; Governmental
Licenses; Compliance with Laws............ 21
Section 2.20 Labor Matters............................. 21
Section 2.21 Questionable Payments..................... 22
Section 2.22 Insurance................................. 22
Section 2.23 Brokers................................... 23
Section 2.24 Disclosure................................ 23
Section 2.25 Vote Required............................. 23
Section 2.26 Microgyn Affiliates....................... 23
TABLE OF CONTENTS
(CONTINUED)
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ARTICLE III - REPRESENTATIONS AND WARRANTIES OF TARGET
AND SUB ...................................... 23
Section 3.1 Corporate Organization..................... 24
Section 3.2 Capital Structure.......................... 24
Section 3.3 Authorization, Execution and
Delivery................................... 24
Section 3.4 Governmental Approvals and
Filings.................................... 25
Section 3.5 No Conflict................................ 25
Section 3.6 Reports; Accuracy of Information........... 25
Section 3.7 Litigation................................. 26
Section 3.8 No Material Adverse Change................. 26
Section 3.9 Brokers.................................... 26
Section 3.10 Resale of Merger Shares................... 26
ARTICLE IV - COVENANTS OF MICROGYN.......................... 27
Section 4.1 Regular Course of Business................. 27
Section 4.2 Restricted Activities and
Transactions............................... 27
Section 4.3 Dividends and Distributions;
Repurchases................................ 29
Section 4.4 No Default or Violation.................... 29
Section 4.5 Taxes; Consent............................. 29
Section 4.6 Advice of Changes.......................... 30
Section 4.7 Negotiation With Others.................... 30
Section 4.8 Acquisition Proposals...................... 30
Section 4.9 Consents, Approvals and Filings............ 30
Section 4.10 Access to Records and Properties.......... 31
Section 4.11 Non-Competition Agreements................ 31
ARTICLE V - COVENANTS OF TARGET AND SUB..................... 31
Section 5.1 Listing Application........................ 31
Section 5.2 Employee Benefits.......................... 31
Section 5.3 Conduct of Microgyn Business............... 31
Section 5.4 Microgyn Obligations Under MSI
Agreements................................. 32
Section 5.5 Securities Law Compliance.................. 32
Section 5.6 Reports Under Securities Exchange
Act of 1934................................ 33
ARTICLE VI - SECURITIES ACT COMPLIANCE...................... 33
Section 6.1 Securities Act Exemption................... 33
Section 6.2 Fairness Hearing and Permit................ 33
Section 6.3 Stock Restrictions......................... 33
Section 6.4 Shareholders' Representations
Regarding Securities Law Matters........... 34
ARTICLE VII - MUTUAL COVENANTS.............................. 34
Section 7.1 Confidentiality............................ 34
Section 7.2 Expenses................................... 36
Section 7.3 Public Announcements....................... 36
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TABLE OF CONTENTS
(CONTINUED)
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Section 7.4 Agreements to Cooperate.................... 37
Section 7.5 State Statutes............................. 38
Section 7.6 Additional Agreements...................... 38
ARTICLE VIII - PROXY STATEMENT.............................. 38
Section 8.1 Preparation................................ 38
Section 8.2 Representations, Warranties and
Covenants of Microgyn...................... 38
Section 8.3 Representations, Warranties and
Covenants of Conceptus..................... 38
Section 8.4 Mailing to Shareholders;
Recommendation of Microgyn Board;
Microgyn Special Meeting................... 39
ARTICLE IX - CONDITIONS TO THE OBLIGATIONS OF CONCEPTUS
AND SUB........................................ 39
Section 9.1 Representations and Warranties............. 39
Section 9.2 Performance of Covenants................... 39
Section 9.3 No Governmental or Other
Proceeding or Litigation................... 39
Section 9.4 Approvals and Consents..................... 40
Section 9.5 Opinion of Counsel......................... 40
Section 9.6 Certificate................................ 40
Section 9.7 Dissenting Shares.......................... 40
Section 9.8 No Material Adverse Change................. 40
Section 9.9 Resignation of Officers and
Directors.................................. 40
Section 9.10 FIRPTA.................................... 40
Section 9.11 Microgyn Warrants......................... 41
Section 9.12 Exchange and Escrow Agreement............. 41
Section 9.13 Non-Competition Agreements................ 41
Section 9.14 Microgyn Advisors......................... 41
Section 9.15 Termination Agreement..................... 41
Section 9.16 Employment Agreements..................... 41
ARTICLE X - CONDITIONS TO MICROGYN'S OBLIGATIONS............ 41
Section 10.1 Representations and Warranties............ 41
Section 10.2 Performance of Covenants.................. 41
Section 10.3 No Governmental or Other
Proceeding or Litigation.................. 41
Section 10.4 Approvals and Consents.................... 42
Section 10.5 Opinion of Counsel........................ 42
Section 10.6 Certificates.............................. 42
Section 10.7 Employment Agreements..................... 42
ARTICLE XI - CLOSING........................................ 42
ARTICLE XII - INDEMNITY AND ESCROW.......................... 43
Section 12.1 Indemnification........................... 43
Section 12.2 Escrow of Shares.......................... 43
Section 12.3 Remedies.................................. 43
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TABLE OF CONTENTS
(CONTINUED)
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Section 12.4 Terms of Escrow........................... 43
Section 12.5 "Escrow Interest" Defined................. 45
Section 12.6 Microgyn Shareholders'
Representatives........................... 45
Section 12.7 Mechanics of Making Claims................ 45
Section 12.8 Escrow Agent's Duties..................... 46
ARTICLE XIII - TERMINATION.................................. 47
Section 13.1 Termination and Abandonment............... 47
Section 13.2 Effect of Termination..................... 48
ARTICLE XIV - MISCELLANEOUS PROVISIONS...................... 49
Section 14.1 Amendment and Modification................ 49
Section 14.2 Waiver of Compliance...................... 49
Section 14.3 No Survival of Representations
and Warranties............................ 49
Section 14.4 Notices................................... 49
Section 14.5 Assignment................................ 50
Section 14.6 Governing Law............................. 50
Section 14.7 Parties in Interest....................... 50
Section 14.8 Counterparts.............................. 51
Section 14.9 Headings and References................... 51
Section 14.10 Entire Agreement......................... 51
Section 14.11 Severability............................. 51
Section 14.12 Other Remedies........................... 51
Section 14.13 Further Assurances....................... 51
Section 14.14 Absence of Third Party
Beneficiary Rights....................... 51
Section 14.15 Mutual Drafting.......................... 52
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TABLE OF CONTENTS
(CONTINUED)
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EXHIBITS
Exhibit A Form of Articles of Merger
Exhibit B-1,-2,-3 Forms of Non-Competition Agreement
Exhibit C Form of Opinion of Microgyn Legal Counsel
Exhibit D Form of Exchange and Escrow Agreement
Exhibit E Form of Termination Agreement
Exhibit F Form of Opinion of Conceptus Legal Counsel
Exhibit G Form of Consulting Agreement
Exhibit H Form of Employment Agreement
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AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (this "AGREEMENT") is entered
into as of October 29, 1996, among Conceptus, Inc., a Delaware corporation
("CONCEPTUS"), CPTS Acquisition Corporation, a Massachusetts corporation and
a wholly-owned subsidiary of Conceptus ("SUB"), and Microgyn, Inc., a
Massachusetts corporation ("MICROGYN").
RECITALS
A. The Boards of Directors of Conceptus, Sub and Microgyn have deemed
it advisable that Conceptus and Microgyn combine their operations by a merger
of Sub into Microgyn, under the terms and conditions hereinafter set forth
(the "MERGER").
B. The Boards of Directors of Conceptus, Sub and Microgyn, have
approved and adopted this Agreement and the Articles of Merger (as defined
below).
In consideration of the mutual representations, warranties, covenants
and agreements herein contained and subject to the conditions and other terms
herein contained, the parties hereto agree as follows:
ARTICLE I
THE MERGER
Section 1.1 ACTIONS TO BE TAKEN. Upon performance (or waiver) of all
covenants and obligations of the parties contained herein and upon
fulfillment (or waiver) of all conditions to the obligations of the parties
contained herein, at the Effective Time (as defined below) and pursuant to
the Massachusetts Business Corporation Law (the "MBCL") the following will
occur:
(a) Sub will be merged with and into Microgyn, which will be the
surviving corporation (the "SURVIVING CORPORATION"), and the separate
existence and corporate organization of Sub will cease, and thereupon
Microgyn and Sub will be a single corporation;
(b) Microgyn, as the Surviving Corporation, will succeed, insofar
as permitted by law, to all rights, assets, liabilities and obligations of
Sub in accordance with the MBCL;
(c) the Articles of Organization and Bylaws of Sub will be the
Articles of Organization and Bylaws of the Surviving Corporation until
amended as provided by law;
(d) The officers and directors of Sub will be the initial officers
and directors of the Surviving Corporation at and after the Effective Time,
each to hold office in accordance with the Articles of Organization and
Bylaws of the Surviving Corporation.
As soon as practicable after each condition to the obligations of
Conceptus and Sub and Microgyn hereunder has been satisfied or waived, an
Articles of Merger, in the form attached hereto as EXHIBIT A and properly
completed and executed in accordance with the MBCL (the "ARTICLES OF MERGER")
will be filed with the Secretary of State of the Commonwealth of
Massachusetts, together with all required certificates. The Merger will
become effective at the time and on the date the Articles of Merger is so
filed. The date and time when the Merger becomes effective is referred to
herein as the "EFFECTIVE TIME."
Section 1.2 COMMON STOCK OF SURVIVING CORPORATION. Following the
Effective Time, all issued and outstanding shares of Common Stock of Sub will
continue to be fully paid and nonassessable shares of Common Stock of the
Surviving Corporation. Each certificate of Sub evidencing ownership of any
such shares will continue to evidence ownership of the same number of shares
of Common Stock of the Surviving Corporation.
Section 1.3 EFFECT ON MICROGYN'S CAPITAL STOCK.
At the Effective Time, by virtue of the Merger and without any
action on the part of any holder thereof, all shares of the capital stock of
Microgyn ("MICROGYN CAPITAL STOCK"), issued and outstanding immediately prior
to the Effective Time (other than any shares cancelled or retired pursuant to
Section 1.3(e) and other than Dissenting Shares (as defined below)) will
cease to be outstanding and will be converted into, and each former holder
thereof (excluding any holder of shares referred to in Section 1.3(e) or
Dissenting Shares, a "MICROGYN SHAREHOLDER") shall thereafter be entitled to
the following rights:
(a) CASH PAYMENT. Each Microgyn Shareholder shall have the right
to receive in cash at the Closing, as defined below (or thereafter in
accordance with Section 1.5(b)) an amount (rounded to the nearest cent, the
"CASH PAYMENT") equal to the product of (i) $3,000,000 (subject to reduction
pursuant to Section 7.2(a) below) multiplied by (ii) a fraction, the
numerator of which shall be the number of shares of Microgyn Capital Stock
held by such holder immediately prior to the Closing, as shall be set forth
on a list of Microgyn Shareholders certified by the Clerk of Microgyn and
delivered to Conceptus at the Closing, and the denominator of which shall be
the aggregate number of shares of Microgyn Capital Stock outstanding
immediately prior to the Closing (such fraction being hereafter referred to
as such holder's "PROPORTIONATE INTEREST").
(b) STOCK PAYMENT. Subject to the indemnification and escrow
provisions described in Section 1.5(c) and Article XII below, each Microgyn
Shareholder shall have the right to receive, on the date six months following
the Closing, shares of Common Stock of Conceptus, $0.003 par value per share
(the "CONCEPTUS COMMON STOCK") equal to an amount determined by multiplying
(i) an amount of shares of Conceptus Common Stock (the "INITIAL MERGER
SHARES") determined by dividing (A) $1,000,000 by (B) the average closing
price of the Conceptus Common Stock on the Nasdaq Stock Market (or any other
exchange or dealer automated quotation system on which such stock shall be
traded in lieu of trading on the Nasdaq Stock Market) for the twenty
consecutive trading days ending on the second trading day prior to the date
six months following the Closing (the "INITIAL AVERAGE PRICE"), by (ii) such
holder's Proportionate Interest. The parties contemplate under Section 1.5(c)
and Article XII that fifty percent (50%) of the Initial Merger Shares
(rounded down to the nearest whole share) will be deposited into escrow to
secure certain indemnification obligations of the Microgyn Shareholders.
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(c) CONTINGENT STOCK PAYMENT. Subject to the conditions set forth
in this Section 1.3(c), each Microgyn Shareholder shall have the right to
receive, within thirty (30) days following the last day (the "THRESHOLD
DATE") of the twelfth (12th) full calendar month following the first
commercial sale of a Microgyn Product by Conceptus or its distributor(s) in
the United States, that number of shares of Conceptus Common Stock equal to
an amount determined by multiplying (i) an amount of shares of Conceptus
Common Stock (the "CONTINGENT MERGER SHARES" and together with the Initial
Merger Shares, the "MERGER SHARES") determined by dividing (A) $1,000,000 by
(B) the average closing price of the Common Stock on the Nasdaq Stock Market
for the twenty consecutive trading days ending on the second trading day
prior to the Threshold Date, by (ii) such holder's Proportionate Interest.
Conceptus's stock issuance obligations under this Section are contingent upon
satisfaction of the following conditions: (i) net sales revenues to Conceptus
from sales of Microgyn Products during calendar year 1997 (including both
domestic and international sales) must be greater than $200,000 and (ii) net
sales revenues (including both domestic and international sales) to Conceptus
from sales of Microgyn Products during the first twelve full calendar months
following the initial domestic commercial sale of a Microgyn Product by
Conceptus must be greater than $3,500,000. For purposes of this Section 1.3
only, (i) a "commercial sale" shall mean the sale of a product for income
generation purposes other than in connection with research and development,
pre-clinical or clinical trial applications, a "Microgyn Product" shall mean
any product sold by Conceptus, Microgyn or any of their subsidiaries or
affiliates that either (i) includes any of the technology owned or licensed
by Microgyn on the Closing Date or (ii) is one of the Microgyn Products
listed on the Microgyn Disclosure Schedule, and "net sales revenues" shall
mean gross revenues less returns and customary and ordinary customer
allowances and shall be calculated in accordance with the generally accepted
accounting principles.
(d) EARN-OUT PAYMENTS.
(i) Subject to the conditions set forth in this subsection
(d), the Microgyn Shareholders shall have the right to receive "earn-out
payments" (the "EARN-OUT PAYMENTS") in the aggregate equal to a percentage of
the Earn-Out Margin (as defined below) from sales of Microgyn Products by
Microgyn, Conceptus or any of their subsidiaries or affiliates associated
with Microgyn's operations on an annual basis for calendar years 1997-2001,
as follows: (a) for any such calendar year in which the Earn-Out Margin is
greater than 75% of the Earn-Out Margin forecasted by Microgyn in its Pro
Forma Income Statements issued as part of Microgyn's current business plan
dated July 1996 (the "MICROGYN BUSINESS PLAN"), a copy of which has been
provided to Conceptus, Conceptus will pay to the Microgyn Shareholders an
aggregate amount equal to 7% of the Earn-Out Margin for such calendar year,
and (b) if, at the end of any such calendar year, the cumulative Earn-Out
Margin (for years 1997 through such year) is greater than 75% of the
cumulative Earn-Out Margin forecasted in the Microgyn Business Plan for the
same period, Conceptus will pay to the Microgyn Shareholders an aggregate
amount equal to 7% of the Earn-Out Margin for all periods, including the year
just completed, as to which no Earn-Out Payment has yet been made. In
addition, in the event that the first commercial sale of a Microgyn Product
by Conceptus, its affiliates or distributors anywhere in the world occurs on
or before June 30, 1997, then Conceptus shall pay to the Microgyn
Shareholders Earn-Out Payments for the first calendar quarter of calendar
year 2002 equal to 7% of the Earn-Out Margin
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for such period provided that the Earn-Out Margin for such calendar quarter
is greater than 18.75% of the Earn-Out Margin forecasted in the Microgyn
Business Plan for calendar year 2001. Nothing in the preceding sentence shall
be interpreted to cause Conceptus to pay to the Microgyn Shareholders more
than 7% of the Earn-Out Margin for any such year or period. "EARN-OUT
MARGIN" is defined as gross profit (net sales revenues less cost of goods
sold for Microgyn Products) less those research and development expenses
(including expenses for regulatory and clinical affairs) incurred
specifically relating to Microgyn Products.
(ii) Conceptus will pay Earn-Out Payments within 45 days
following the end of each year (or other applicable period). The Earn-Out
Payments will be made in cash and/or shares of Conceptus Common Stock, at the
option of Conceptus. To the extent that Conceptus chooses to fund any such
Earn-Out Payments in whole or in part with shares of Conceptus Common Stock,
such shares will be valued based on the average closing price of the Common
Stock on the Nasdaq Stock Market for the twenty consecutive trading days
ending on the second trading day prior to the payment date for such Earn-Out
Payment and any such shares so issued shall be deemed included in the
definition of "Merger Shares" under this Agreement. The Earn-Out Payments
shall be made as follows: the aggregate Earn-Out Payment for each such period
shall be multiplied by the cumulative Proportionate Interests of the Microgyn
Shareholders entitled to receive such payments and the product thereof shall
be paid (a) fifty percent (50%) to Medical Scientific, Inc. ("MSI") and (b)
fifty percent (50%) to the remaining Microgyn Shareholders (excluding MSI),
to be allocated in proportion to their relative Proportionate Interests.
(iii) An Advisory Committee (the "ADVISORY COMMITTEE")
consisting of four inviduals, two representatives of Conceptus and two
representatives of the Microgyn Shareholders, who shall initially be ▇▇▇▇▇
▇▇▇▇▇▇▇▇, M.D. and ▇▇▇▇ ▇▇▇▇▇▇▇▇ until otherwise reconstituted by the written
consent of the Representatives (as defined in Section 12.6 below) and
Conceptus. The Advisory Committee shall (a) review the status of ongoing
Microgyn development projects and project budgets, (b) review the annual
Microgyn project plan and related project allocations, and (c) participate in
the quarterly planning meetings between Microgyn and MSI. Covenants with
respect to the conduct of Microgyn's business following the Effective Time
are contained in Article V hereof.
(e) CANCELLED SHARES. Each share of Microgyn Capital Stock which,
immediately prior to the Effective Time, was issued and held in the treasury
of Microgyn or was issued and outstanding and held by Conceptus, Sub or
Microgyn will be cancelled or retired and no payments will be made with
respect thereto.
(f) DISSENTING SHARES. Notwithstanding anything in this Agreement
to the contrary, shares of Microgyn capital stock which are held by any
person or entity exercising the appraisal rights delineated in Sections 85-98
of the MBCL or which remain eligible at the Effective Time to exercise such
rights (collectively, "DISSENTING SHARES") will not (except as provided
below) be converted into or represent a right to receive any consideration
described in Sections 1.3(a)-(d), but the holders thereof will be entitled
only to such rights as are granted by the MBCL. Each holder of Dissenting
Shares who becomes entitled to payment therefor pursuant
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to the MBCL will receive payment from the Surviving Corporation in accordance
with the MBCL; PROVIDED, HOWEVER, that (i) if any such holder of Dissenting
Shares shall have failed to establish his entitlement to dissenter's rights
as provided in the MBCL, (ii) if any such holder of Dissenting Shares shall
have effectively withdrawn his demand for purchase thereof or lost his right
to purchase and payment therefor under the MBCL, or (iii) if neither any
holder of Dissenting Shares nor the Surviving Corporation shall have filed a
petition demanding a determination of the value of all Dissenting Shares
within the time provided in the MBCL, such holder or holders (as the case may
be) shall forfeit the right to demand repurchase with respect to such shares
of Microgyn capital stock and such shares of Microgyn shall thereupon be
deemed to have been converted, as of the Effective Time, into and represent
the right to receive the consideration described in Sections 1.3(a)-(d).
Microgyn will give Conceptus prompt notice of any written demands for
purchase and any other instruments served pursuant to Sections 85-98 of the
MBCL and received by Microgyn and will cooperate with Conceptus in any
negotiations or proceedings with respect to demands for purchase under the
MBCL. Microgyn will not, without the written consent of Conceptus,
voluntarily make any payment with respect to any demands for purchase or
offer to settle or settle any such demands.
(g) ACCOUNTING DETERMINATIONS. Accounting determinations
regarding the business of Microgyn with respect to Sections 1.3(c) and 1.3(d)
above will be made by the Board of Directors of the Surviving Corporation in
accordance with generally accepted accounting principles. If the
Representatives (as defined in Section 12.6 below) object to material
accounting decisions affecting the Contingent Merger Shares or the Earn-Out
Payments, Conceptus will appoint an independent "Big Six" public accounting
firm satisfactory to Conceptus and the Representatives to decide the proper
accounting treatment. Such firm's decision will be final. Any objections or
claims of the Representatives based on accounting determinations or
principles shall be made by the Representatives in writing within 60 days
after the Representatives receive statements reflecting such determination or
otherwise receive notice of such determination. Any such objections or
claims shall be waived unless asserted within such 60-day period. Conceptus
shall pay one-half (1/2) of the cost of retaining such accounting firm and
one-half (1/2) of the cost of retaining such accounting firm shall be
deducted from the aggregate dollar amount of Contingent Merger Shares or the
aggregate Earn-Out Payments for the period(s) in question, as applicable.
Such accounting firm shall be governed by the terms of this Agreement which
shall control their deliberations and otherwise by generally accepted
accounting principles.
(h) ALTERNATIVE PAYMENT. If, on any payment date set forth in
Sections 1.3(a-d) above on which Merger Shares would otherwise be issued,
Conceptus does not at such time have in place a permit from the California
Department of Corporations qualifying the issuance of such shares such that
they are exempt under Section 3(a) of the Securities Act of 1933, as amended
(the "SECURITIES ACT") and resaleable pursuant to the provisions of Rule 145
promulgated under the Securites Act without application of any holding period
other than as specifically noted in such rule ("145 RESALEABLE"), Conceptus
shall pay to the Microgyn Shareholders an amount in cash equivalent to the
value of the Merger Shares which would otherwise have been issued pursuant to
such provisions (calculated in accordance with the trailing averages set
forth therein); provided that, Conceptus shall not be obligated to do so if
such a permit is not necessary to make such shares 145 resaleable or
otherwise allow for them to be resold in a manner no more restrictive than as
provided for in Rule 145 and provided, further, that the foregoing obligation
to
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pay cash shall not apply in the event that Section 7.6(b) (regarding the
approval of the initial Permit Application or the grant of the Hearing, as
defined in Article VI) becomes effective.
Section 1.4 NO FRACTIONAL INTERESTS. Neither certificates nor scrip
for fractional interests in the Conceptus Merger Shares issued pursuant to
Section 1.3(b), (c) or (d) hereof will be issued, but in lieu thereof each
holder who would otherwise have been entitled pursuant to Section 1.3(b),(c)
or (d) hereof to a fraction of a share of Conceptus Common Stock will be paid
an amount in cash equal to such fraction multiplied by the applicable average
closing price of such stock for the twenty trading days ending on the second
trading day prior to the date on which such stock would otherwise have been
issued.
Section 1.5 ISSUANCE AND DELIVERY OF MERGER CONSIDERATION.
(a) As promptly as practicable following the execution of this
Agreement and in any event not later than the Closing, Conceptus shall
appoint an entity reasonable acceptable to Microgyn to act as Exchange Agent
(the "EXCHANGE AGENT") hereunder. As soon as practicable prior to the time
deadlines in Sections 1.3(b), 1.3(c), and 1.3(d), Conceptus will issue and
deliver to the Exchange Agent certificates ("NEW CERTIFICATES") representing
a sufficient number of shares of Conceptus Common Stock for issuance pursuant
to Sections 1.3(b), 1.3(c) and 1.3(d) hereof. In addition, Conceptus will
deliver to the Exchange Agent, when required, checks sufficient to settle the
payment for any unpaid Cash Payments, applicable Earn-Out Payments and
payments for fractional interests.
(b) Unless delivered to Conceptus at the Closing, as soon as
practicable following the Effective Time, the Microgyn Shareholders shall
deliver to the Exchange Agent executed transmittal letters, together with
their original Microgyn stock certificate(s) (the "OLD CERTIFICATES") and
such other documentation as the Exchange Agent may reasonably require to
effect the exchange. Upon receipt of such transmittal letters and Old
Certificates, the Exchange Agent will, as promptly as practicable, deliver to
each holder of such surrendered Microgyn certificates, a check in the amount
of the proportional Cash Payment due such holder pursuant to 1.3(a) above (to
the extent that such checks were not delivered to such holder(s) at the
Closing), and, if and at such times as called for under Sections 1.3(b), (c)
and (d), New Certificates representing the number of shares of Conceptus
Common Stock (or in the case of Earn-Out Payments to be paid in cash, checks
in such amounts) to which the Microgyn Shareholder is entitled, together with
checks for payment of cash in lieu of fractional interests to be issued in
respect of the Old Certificates. Conceptus will deliver to the Exchange
Agent, when required, cash sufficient to settle the payment for fractional
interests.
(c) On or before the date six months following the Effective Time,
in accordance with Article XII hereof, Conceptus will cause fifty percent
(50%) of the aggregate number of Initial Merger Shares (rounded down to the
nearest whole share, the "ESCROW SHARES"), to be deposited in the Escrow
Fund. Such shares shall be issued in the name of the applicable escrow agent
or its nominee for the benefit of the holders of the Microgyn Shareholders.
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(d) Until Old Certificates have been surrendered and exchanged as
herein provided for Cash Payments and New Certificates, each outstanding Old
Certificate will be deemed for all corporate purposes of Conceptus, other
than the payment of dividends or any distributions, to evidence the right to
receive such Cash Payment(s) and, after the date six months following the
Closing, ownership of the number of Merger Shares into which the number of
shares of Microgyn Capital Stock shown thereon have been converted pursuant
to Section 1.3 hereof. No dividends or other distributions declared on
Conceptus Common Stock will be paid to persons otherwise entitled to receive
the same until the Old Certificates have been surrendered in exchange for New
Certificates in the manner herein provided, but upon such surrender, such
dividends or other distributions will be paid to such persons in accordance
with the terms of such securities. In no event will the persons entitled to
receive such dividends or other distributions be entitled to receive interest
on such dividends or other distributions. From and after the Effective Time,
Conceptus will, however, be entitled to treat Old Certificates which have not
yet been surrendered for exchange as evidencing the ownership of the
corresponding number of shares of Merger Shares, notwithstanding any failure
to surrender such Old Certificates.
(e) No transfer taxes will be payable by any shareholder of
Microgyn in connection with the exchange of Old Certificates for New
Certificates, except that if any New Certificate is to be issued in a name
other than that in which the Old Certificate surrendered in exchange therefor
is registered, it will be a condition of such exchange that the person
requesting such exchange will pay to the Exchange Agent any transfer or other
taxes required by reason of the issuance of the New Certificate in a name
other than the registered holder of the Old Certificate, or will establish to
the satisfaction of the Exchange Agent that such tax has been paid or is not
applicable.
(f) In the event that the appointment of the Exchange Agent is
terminated, following such termination, Old Certificates will be surrendered
to, and Cash Payments, Earn-Out Payments and New Certificates delivered by,
Conceptus or its agent. If outstanding Old Certificates are not surrendered
prior to two years after the Effective Time (or, in any particular case,
prior to such earlier date on which dividends or other distributions, if any,
would otherwise escheat to or become the property of any governmental unit or
agency), the amount of dividends and other distributions, if any, which have
become payable and which thereafter become payable on Merger Shares evidenced
by such Old Certificates as provided herein will, to the extent permitted by
applicable law, become the property of the Surviving Corporation (and, to the
extent not in its possession, will be paid over to it by Conceptus), free and
clear of all claims or interest of any person previously entitled thereto.
Section 1.6 STOCK TRANSFER BOOKS. At the Effective Time, the stock
transfer books of Microgyn will be closed and no transfer of Microgyn Capital
Stock will thereafter be made.
Section 1.7 SHAREHOLDERS' MEETING.
(a) As soon as practicable after the receipt by Conceptus of
approval for mailing of the Notice of Hearing from the California Department
of Corporations with respect to the issuance of the Merger Shares in
connection with the Merger, the Board of Directors of Microgyn will duly
call, and cause to be held, a special meeting of the shareholders of Microgyn
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(the "MICROGYN SPECIAL MEETING") for the purpose of approving this Agreement
and the Merger and will recommend the approval of this Agreement and the
Merger to the Microgyn shareholders, which recommendation shall not be
withheld, withdrawn or modified unless, in the good faith judgment of the
Microgyn Board of Directors based on the advice of its legal counsel set
forth in a written opinion or memorandum, such action is required to comply
with the fiduciary duty of the Board under applicable law.
(b) Conceptus and Microgyn will coordinate and cooperate with
respect to the timing of the Microgyn Special Meeting.
(c) Microgyn will, subject to Section 4.7, use its best efforts to
solicit from its shareholders proxies in favor of the matters set forth in
Section 1.7(a) and take all other action necessary or advisable to secure the
vote or consent of its shareholders required by the MBCL.
Section 1.8 FILING OF MERGER DOCUMENTS. As soon as practicable after
the requisite approval of the shareholders of Microgyn has been obtained as
provided in Section 1.7, and each other condition to the obligations of
Conceptus and Sub and Microgyn hereunder has been satisfied or waived,
Microgyn and Sub will deliver the Articles of Merger for filing with the
Secretary of State of the Commonwealth of Massachusetts and Conceptus and Sub
and Microgyn will take such other and further actions as may be required by
the MBCL in connection with such filing and the consummation of the Merger.
Section 1.9 MERGER OF SURVIVING CORPORATION AND CONCEPTUS. Following
the Merger, Conceptus may but shall not be obligated to cause the Surviving
Corporation to merge with and into Conceptus, with Conceptus the surviving
corporation of that merger (the "SUBSEQUENT MERGER").
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF MICROGYN
As of the date hereof, except as disclosed in a document referring
specifically to the relevant subsections of this Article II which is
delivered by Microgyn to Conceptus prior to execution of this Agreement (the
"MICROGYN DISCLOSURE SCHEDULE") Microgyn hereby represents and warrants to
Conceptus and Sub, which representations, to the extent to that they refer to
the "knowledge" of Microgyn, shall be deemed to encompass the individual
knowledge of each officer and director of Microgyn, as follows:
Section 2.1 CORPORATE ORGANIZATION. Microgyn is a corporation duly
organized, validly existing and in good standing under the laws of its state
of incorporation and has all requisite corporate power and authority and all
necessary governmental authorizations to own, lease and operate its
properties and to conduct its business as it is now being conducted.
Microgyn has no Subsidiaries (as defined below). Microgyn is duly qualified
or licensed to do business and is in good standing as a foreign corporation
in each state or other jurisdiction in which the nature of its business or
operations or ownership of its property requires such qualification or
licensing, except
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where the failure to be so qualified or licensed would not, individually or
in the aggregate, materially and adversely affect the condition (financial or
other), business, properties, prospects (as currently contemplated), net
worth or results of operations of Microgyn taken as a whole (collectively,
"MICROGYN'S BUSINESS"). The minute book of Microgyn, as made available to
Conceptus, contain complete and accurate records of all corporate action
taken by Microgyn since its date of incorporation. Microgyn has no direct or
indirect interest in or loans to any partnership, corporation, joint venture,
business association or other entity other than MSI under the agreements set
forth in the Microgyn Disclosure Schedule (the "MSI AGREEMENTS"). Microgyn
has delivered to Conceptus complete and correct copies of the Articles of
Organization and Bylaws (or other organizational or charter documents) of
Microgyn, in each case as amended to the date hereof. As used in this
Agreement, the term "SUBSIDIARY" means a "subsidiary" as defined in Rule 1.01
in Regulation S-X promulgated under the Securities Act.
Section 2.2 CAPITAL STRUCTURE. The authorized capital stock of
Microgyn consists of 100,000 shares of Series A Voting Common Stock, $0.001
par value per share and 50,000 shares of Series B Nonvoting Common Stock,
$0.001 par value per share (collectively, the "MICROGYN COMMON STOCK"),
50,000 shares of Preferred Stock, $0.001 par value per share (the "MICROGYN
PREFERRED STOCK" and collectively with the Microgyn Common Stock, the
"MICROGYN CAPITAL STOCK"). Upon execution of this Agreement on the date
hereof by Microgyn, there were outstanding 79,999 shares of Microgyn Series A
Voting Common Stock, and no shares of outstanding Microgyn Series B Nonvoting
Common Stock or Preferred Stock. No shares of Microgyn Common Stock were
reserved for issuance upon the exercise of outstanding employee stock
options. All outstanding shares of Microgyn Capital Stock are validly
issued, fully paid and nonassessable and not subject to preemptive rights
created by statute, Microgyn's Articles of Organization or Bylaws or any
agreement to which Microgyn is a party or by which Microgyn may be bound.
All outstanding shares of Microgyn Capital Stock have been issued in
compliance with all applicable federal, state and foreign securities laws.
Microgyn has provided Conceptus and its legal counsel with a complete and
accurate list of (a) all issuances of Microgyn Capital Stock and (b) the
names and addresses of all holders of Microgyn Capital Stock, together with
the number of shares held by each holder. There are no options, warrants,
calls, conversion rights, commitments or agreements of any character to which
Microgyn is a party or by which any of them may be bound that do or may
obligate Microgyn to issue, deliver or sell, or cause to be issued, delivered
or sold, additional shares of Microgyn Capital Stock or that do or may
obligate Microgyn to grant, extend or enter into any such option, warrant,
call, conversion right, commitment or agreement. Microgyn is not under any
obligation to register under the Securities Act any of its presently
outstanding securities or any securities that may subsequently be issued.
There are no agreements or understandings to which Microgyn is a party or, to
the knowledge of Microgyn, any other agreements or understandings, with
respect to the transfer or voting of shares of Microgyn Capital Stock.
Section 2.3 NO OTHER AGREEMENTS TO SELL ASSETS, MERGE, ETC. Except
as provided hereby or in the MSI Agreements, Microgyn has no legal
obligation, absolute or contingent, to any person or firm to sell assets
other than in the ordinary course of business or to effect any merger,
consolidation or reorganization of Microgyn or to enter into any agreement
with respect thereto.
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Section 2.4 AUTHORIZATION; EXECUTION AND DELIVERY. Microgyn has all
requisite corporate power and authority (a) to execute and deliver this
Agreement, the Articles of Merger and the agreements attached as exhibits
hereto to which Microgyn is a party (the "MICROGYN ANCILLARY AGREEMENTS"),
(b) subject to the approval of this Agreement and the Articles of Merger by
the holders of two-thirds of the outstanding shares of Microgyn Common Stock,
voting as separate classes, to perform its obligations under this Agreement,
the Articles of Merger and the Microgyn Ancillary Agreements, and (c) to
consummate the transactions contemplated hereby and thereby. The execution,
delivery and performance of this Agreement, the Articles of Merger and the
Microgyn Ancillary Agreements by Microgyn and the consummation by Microgyn of
the transactions contemplated hereby and thereby have been duly approved and
authorized by all requisite corporate action of Microgyn, subject to
obtaining any necessary approval of its shareholders. This Agreement has
been duly executed and delivered by Microgyn and, subject to obtaining any
necessary approval of holders of two-thirds of the outstanding shares of
Microgyn Common Stock, and assuming its due authorization, execution and
delivery by Conceptus and Sub, constitutes the legal, valid and binding
obligation of Microgyn, enforceable in accordance with its terms. The Board
of Directors of Microgyn has unanimously determined that it is advisable and
in the best interest of Microgyn's shareholders for Microgyn to enter into a
strategic business combination with Conceptus upon the terms and subject to
the conditions of this Agreement.
Section 2.5 GOVERNMENTAL APPROVALS AND FILINGS. No approval,
authorization, consent, license, clearance or order of, declaration or
notification to, or filing, registration or compliance with, any governmental
or regulatory authority ("GOVERNMENTAL ENTITY") is required on the part of
Microgyn in order (a) to permit Microgyn to perform its obligations under
this Agreement or (b) to prevent the termination of any right, privilege,
license or agreement of Microgyn, or to prevent any loss to Microgyn's
Business, by reason of the transactions contemplated by this Agreement,
except for the filing of the Articles of Merger as required by the MBCL.
Section 2.6 NO CONFLICT. Except for the receipt of any required
approval of the shareholders of Microgyn as contemplated by Section 1.7(a)
hereof, and compliance with the governmental and regulatory requirements
described in Section 2.5 hereof, neither the execution, delivery and
performance of this Agreement, the Articles of Merger and the Microgyn
Ancillary Agreements by Microgyn nor the consummation by Microgyn of the
transactions contemplated hereby and thereby, including the Subsequent
Merger, will (a) conflict with, or result in a breach of, any of the terms,
conditions or provisions of Microgyn's Articles of Organization or Bylaws (or
other organizational or charter documents), (b) conflict with, result in a
breach or violation of, give rise to a termination right or a default under,
result in the acceleration of performance under (whether or not after the
giving of notice or lapse of time or both), any mortgage, lien, lease,
agreement, note, bond, indenture, guarantee or instrument or any license or
franchise granted by or to a third party, in each case, that is material to
Microgyn's Business or that is referenced in the Microgyn Disclosure
Schedule, (c) conflict with, or result in a violation of, any statute,
regulation, law, ordinance, writ, injunction, order, judgment or decree to
which Microgyn or any of their assets may be subject, (d) give rise to a
declaration or imposition of any lien, charge, security interest or
encumbrance of any nature whatsoever upon any of the assets of Microgyn, (e)
adversely affect any franchise, license, permit or other governmental
approval which is material to Microgyn's Business or is necessary to enable
Microgyn to carry on its business as
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presently conducted or is required of any employee or agent of Microgyn to
enable each of them to carry out such person's duties on behalf of Microgyn
or (f) require the consent of any third party.
Section 2.7 FINANCIAL STATEMENTS; ABSENCE OF UNDISCLOSED LIABILITIES.
(a) Microgyn has furnished Conceptus with the cash basis balance
sheet at September 30, 1996 (collectively, the "MICROGYN FINANCIAL
STATEMENTS"). The Microgyn Financial Statements (i) are in accordance with
the respective books of Microgyn; (ii) present fairly the financial position
of Microgyn as of the date thereof and the consolidated results of operations
and cash flows of Microgyn for the periods indicated therein; and (iii) do
not reflect any material items of nonrecurring income except as stated
therein. Since inception, there has been no change in Microgyn's accounting
principles, methods or policies.
(b) Microgyn has no liabilities of any nature, whether accrued,
absolute, contingent or otherwise, and whether due or to become due, which
were not disclosed or provided for in the Microgyn Disclosure Schedule or the
Microgyn Financial Statements other than obligations and liabilities incurred
since September 30, 1996 which are not individually or in the aggregate,
material to Microgyn's Business.
(c) Microgyn makes and keeps accurate books and records reflecting
in all material respects its assets and maintains internal accounting
controls which provide reasonable assurance that (i) transactions are
executed in accordance with management's authorization, (ii) transactions are
recorded to permit preparation of Microgyn's financial statements and to
maintain accountability in all material respects for the assets of Microgyn,
(iii) access to the assets of Microgyn are permitted only in accordance with
management's authorization, and (iv) the recorded accountability of the
assets of Microgyn is compared with existing assets at reasonable intervals.
Section 2.8 ABSENCE OF CHANGES. Since September 30, 1996 (a) there
has been no material adverse change in Microgyn's Business or any development
as to Microgyn known to Microgyn that is reasonably expected to cause a
material adverse change in Microgyn's Business; (b) there has been no damage,
destruction or loss (whether or not covered by insurance) materially and
adversely affecting any assets material to Microgyn's Business; (c) there has
been no change by Microgyn in accounting principles or methods except insofar
as may be required by a change in generally accepted accounting principles;
(d) there has been no revaluation by Microgyn of any of its assets,
including, without limitation, writing down the value of inventory or writing
off notes or accounts receivable; (e) Microgyn has conducted its business
only in the ordinary course consistent with past practice; and (f) no event
described in Section 4.2 or Section 4.3 hereof has occurred.
Section 2.9 CONTRACTS AND COMMITMENTS. Except for agreements
disclosed on the Microgyn Disclosure Schedule:
(a) Microgyn is not a party or subject to:
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(i) Any union contract or collective bargaining agreement or
any employment contract or arrangement, written or oral, providing for future
compensation with any officer, consultant, director or employee which is not
terminable by it on 30 days' notice or less without penalty or obligation to
make payments related to such termination, other than (A) (in the case of
employees other than executive officers) such severance agreements as are not
different from standard arrangements offered to employees generally in the
ordinary course of business consistent with Microgyn's past practices, a
description of which is set forth in the Microgyn Disclosure Schedule and (B)
such agreements as may be imposed or implied by law;
(ii) Any plans, contracts or arrangements, written or
oral, which collectively require aggregate payments by Microgyn in excess of
$25,000 for bonuses, pensions, deferred compensation, severance pay or
benefits, retirement payments, profit-sharing, or the like;
(iii) Any joint marketing, joint development or joint
venture contract or arrangement or any other agreement which has involved or
is expected to involve a sharing of profits with other persons;
(iv) Any existing OEM agreement, distribution agreement,
volume purchase agreement, or other similar agreement in which the annual
amount involved is expected to exceed in 1996 or any subsequent year, $5,000
or pursuant to which Microgyn has granted or received most favored customer
provisions or exclusive marketing rights related to any product, group of
products or territory;
(v) Any lease for real or personal property pursuant to
which the amount of payments which Microgyn is required to make on an annual
basis exceeds $5,000;
(vi) Any agreement, contract, mortgage, indenture, lease,
instrument, license, franchise, permit, concession, arrangement, commitment
or authorization which may be, by its terms, terminated or breached by reason
of the execution of this Agreement, the Articles of Merger or any Microgyn
Ancillary Agreement, the closing of the Merger, or the consummation of the
transactions contemplated hereby or thereby, including the Subsequent Merger;
(vii) Except for trade indebtedness incurred in the
ordinary course of business, any instrument evidencing or related in any way
to indebtedness in excess of $5,000 incurred in the acquisition of companies
or other entities or indebtedness in excess of $5,000 for borrowed money by
way of direct loan, sale of debt securities, purchase money obligation,
conditional sale, guarantee, indemnification or otherwise;
(viii) Any license agreement, either as licensor or
licensee;
(ix) Any contract containing covenants purporting to
limit Microgyn's freedom to compete in any line of business or in any
geographic area or with any third party;
(x) Any agreement, contract or commitment relating
to capital expenditures and involving future obligations in excess of $5,000;
or
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(xi) Any other agreement, contract or commitment which
is material to Microgyn's Business.
(b) Each agreement, contract, mortgage, indenture, plan, lease,
instrument, permit, concession, franchise, arrangement, license and
commitment listed in the Microgyn Disclosure Schedule is valid and binding on
Microgyn and is in full force and effect, and neither Microgyn nor, to the
knowledge of Microgyn, any other party thereto, has breached any material
provision of, or is in default under the terms of, any such agreement,
contract, mortgage, indenture, plan, lease, instrument, permit, concession,
franchise, arrangement, license or commitment.
(c) There is no agreement, judgment, injunction, order or decree
binding upon Microgyn which has or could reasonably be expected to have the
effect of prohibiting or materially impairing any material current business
practice of Microgyn, any acquisition of material property by Microgyn or the
conduct of business by Microgyn as currently conducted or as proposed to be
conducted by Microgyn in the Microgyn Business Plan.
Section 2.10 LEGAL PROCEEDINGS. Microgyn is not in violation of, and
has not received any notice of any violation of (a) any applicable statute,
law, regulation, ordinance, writ, injunction, order, judgment or decree, the
effect of which violation could, individually or in the aggregate, be
materially adverse to Microgyn's Business, or (b) any provision of the
Articles of Organization or Bylaws (or other organizational or charter
document) of Microgyn. There is no order, writ, injunction, judgment or
decree outstanding, and no legal, administrative, arbitration or other
proceeding, action, suit or governmental investigation or inquiry against or
relating to Microgyn or its assets or business ("MICROGYN LEGAL PROCEEDINGS")
pending or, to the knowledge of Microgyn, threatened and, to the knowledge of
Microgyn, there are no claims (including unasserted claims as to which there
has been a manifestation by a potential claimant of an awareness of such
claim or it is considered probable that a claim will be asserted and there is
a reasonable possibility that the outcome will be unfavorable, all as such
terms are used in Statement of Financial Accounting Standards No. 5), against
or relating to Microgyn or its assets or business, which pending or
threatened Microgyn Legal Proceedings or claims would reasonably be expected
to have, individually or in the aggregate, a material adverse effect on
Microgyn's Business. There is no Microgyn Legal Proceeding which in any
manner challenges or seeks to prevent, enjoin, alter or delay any of the
transactions contemplated hereby. There are no existing liabilities that
require Microgyn to indemnify its officers and directors for acts or
omissions by such persons or existing agreements to provide indemnification
for such liabilities. The Microgyn Disclosure Schedule sets forth with
respect to each Microgyn Legal Proceeding, to the extent that the aggregate
remedies or damages claimed for each such complaint are unspecified, involve
specific performance or injunctive relief or exceed $25,000, the forum, the
parties thereto, a brief description of the subject matter thereof and the
amount of damages claimed.
Section 2.11 ERISA MATTERS. Microgyn and any trade or business
(whether or not incorporated) which is treated as a single employer with
Microgyn (an "ERISA AFFILIATE") within the meaning of Section 414(b), (c),
(m) or (o) of the Internal Revenue Code of 1986, as amended (the "CODE"), has
no (i) material employee benefit plans (as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")), (ii)
loans to any
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non-officer employee in excess of $5,000, loans to officers and directors and
any stock option, stock purchase, phantom stock, stock appreciation right,
supplemental retirement, severance, sabbatical, medical, dental, vision care,
disability, employee relocation, cafeteria benefit (Code section 125) or
dependent care (Code Section 129), life insurance or accident insurance
plans, programs or arrangements, (iii) bonus, pension, profit sharing,
savings, deferred compensation or incentive plans, programs or arrangements,
(iv) other fringe or employee benefit plans, programs or arrangements that
apply to senior management of Microgyn and that do not generally apply to all
employees, or (v) except as set forth in the Microgyn Disclosure Schedule,
current or former employment or executive compensation or severance
agreements, written or otherwise, as to which unsatisfied obligations of
Microgyn of greater than $5,000 remain for the benefit of, or relating to,
any present or former employee, consultant or director of Microgyn (together,
the "MICROGYN EMPLOYEE PLANS").
Section 2.12 TAXES.
(a) For purposes of this Section 2.12 and other provisions of this
Agreement relating to Taxes, the following definitions shall apply:
(i) The term "TAXES" shall mean all taxes, however
denominated, including any interest, penalties or other additions to tax that
may become payable in respect thereof, (A) imposed by any federal,
territorial, state, local or foreign government or any agency or political
subdivision of any such government, which taxes shall include, without
limiting the generality of the foregoing, all income or profits taxes
(including but not limited to, federal income taxes and state income taxes),
payroll and employee withholding taxes, unemployment insurance, social
security taxes, sales and use taxes, ad valorem taxes, excise taxes,
franchise taxes, gross receipts taxes, business license taxes, occupation
taxes, real and personal property taxes, stamp taxes, environmental taxes,
transfer taxes, workers' compensation, Pension Benefit Guaranty Corporation
premiums and other governmental charges, and other obligations of the same or
of a similar nature to any of the foregoing, which are required to be paid,
withheld or collected, (B) any liability for the payment of amounts referred
to in (A) as a result of being a member of any affiliated, consolidated,
combined or unitary group, or (C) any liability for amounts referred to in
(A) or (B) as a result of any obligation to indemnify another person.
(ii) The term "RETURNS" shall mean all reports, estimates,
declarations of estimated tax, information statements and returns relating
to, or required to be filed in connection with, any Taxes, including
information returns or reports with respect to backup withholding and other
payments to third parties.
(b) Microgyn has not been required to file any returns and has
incurred no liability for taxes (including estimated taxes). Microgyn has
withheld and paid over all Taxes required to have been withheld and paid
over, and complied with all information reporting and backup withholding
requirements, including maintenance of required records with respect thereto,
in connection with amounts paid or owing to any employee, creditor,
independent contractor, or other third party. There are no liens on any of
the assets of Microgyn with respect to Taxes, other than liens for Taxes not
yet due and payable or for Taxes that Microgyn is contesting in good faith
through appropriate proceedings and for which appropriate reserves have been
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established. Microgyn has not at any time been a member of any partnership or
joint venture for a period for which the statue of limitations for any Tax
potentially applicable as a result of such membership has not expired. No
liability for Taxes of Microgyn will be incurred prior to Closing other than
in the ordinary course of business.
(c) No deficiencies exist or have been asserted (either in writing
or verbally, formally or informally) or are expected to be asserted with
respect to Taxes of Microgyn, and Microgyn has not received notice (either in
writing or verbally, formally or informally) nor expects to receive notice
that it has not filed a Return or paid Taxes required to be filed or paid.
Microgyn is not a party to any action or proceeding for assessment or
collection of Taxes, nor has such event been asserted or threatened (either
in writing or verbally, formally or informally) against Microgyn or any of
its assets. No waiver or extension of any statute of limitations is in
effect with respect to Taxes or Returns of Microgyn.
(d) Microgyn is not (and has ever been) a party to any tax sharing
agreement.
(e) Microgyn is not, nor has it been, a United States real
property holding corporation within the meaning of Section 897(c)(2) of the
Code during the applicable period specified in Section 897(c)(1)(A)(ii) of
the Code, and Conceptus is not required to withhold tax by reason of Section
1445 of the Code. Microgyn is not a "consenting corporation" under Section
341(f) of the Code. Microgyn has not entered into any compensatory agreements
with respect to the performance of services which payment thereunder would
result in a nondeductible expense to Microgyn pursuant to Section 280G of the
Code or an excise tax to the recipient of such payment pursuant to Section
4999 of the Code. Microgyn has not agreed to, nor is it required to make, any
adjustment under Code Section 481(a) by reason of, a change in accounting
method, and Microgyn will not otherwise have any income reportable for a
period ending after the Closing Date attributable to a transaction or other
event (e.g., an installment sale) occurring prior to the Closing Date.
Microgyn is not, nor has it been, a "reporting corporation" subject to the
information reporting and record maintenance requirements of Section 6038A
and the regulations thereunder. Microgyn is in compliance with the terms and
conditions of any applicable tax exemptions, agreements or orders of any
foreign government to which it may be subject or which it may have claimed,
and the transactions contemplated by this Agreement will not have any adverse
effect on such compliance.
(f) Microgyn has no net operating losses and credit carryovers or
other tax attributes that are currently subject to limitation under Sections
382, 383 or 384 of the Code (or comparable provisions of state tax law).
Section 2.13 INTELLECTUAL PROPERTY.
(a) Other than the rights of MSI and others set forth in the MSI
Agreements, Microgyn owns or has the exclusive right to use, make, sell,
license, or sublicense and bring actions for infringement of all Microgyn
Products (as defined below) and Intellectual Property Rights (as defined
below) developed by or for Microgyn or that are used or currently proposed to
be used in the business of Microgyn as currently conducted or proposed to be
conducted in the Microgyn Business Plan. Although Microgyn has no knowledge
of any such inventions or rights,
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the parties acknowledge that an independent third party (without the
assistance, involvement, permission or other complicity of Microgyn or its
employees, officers or directors) may have the ability to practice inventions
or rights relating to products in Microgyn's industry comparable to the
Microgyn Products, which inventions or rights were independently developed by
such party or licensed by such party from another independent third party to
the extent that such inventions or rights do not contravene an issued patent
or trademark, or application therefor, owned by or exclusively licensed to
Microgyn. All of the Microgyn Products and Microgyn Intellectual Property
Rights are owned or licensed by Microgyn free and clear of any rights or
claims of any former employees, consultants, officers and directors of
Microgyn and current or former employers of all current and former employees,
consultants, officers and directors of Microgyn other than the rights of MSI
and others set forth in the MSI Agreements. All taxes and fees, including,
without limitation, patent and trademark registration and prosecution fees
and all professional fees in connection therewith pertaining to the Microgyn
Intellectual Property Rights, due and payable on or before the date hereof,
have been paid by Microgyn except as set forth on the Microgyn Disclosure
Schedule.
(b) Microgyn's current products and products under development are
listed on the Microgyn Disclosure Schedule (collectively, the "MICROGYN
PRODUCTS"). Other than the rights granted to MSI, no person has a license to
make, use or distribute or the right to acquire such a license with respect
to any current or future version of any Microgyn Product or any Microgyn
Product that is under development, and no agreement to which Microgyn is a
party will restrict the Surviving Corporation or Conceptus from charging
customers for any such new version. Except as set forth in the MSI
Agreements, no agreement for the support or maintenance of Microgyn Products
obligates Microgyn, or would obligate the Surviving Corporation or Conceptus
after the Effective Time to provide any improvement, enhancement, change in
functionality or other alteration in the performance of the Microgyn Products.
(c) Except as set forth in the MSI Agreements, no person has a
right to receive a royalty or other payment in respect of any Microgyn
Product or Microgyn Intellectual Property Rights whether or not pursuant to
any contractual arrangements entered into by Microgyn. Except as set forth
in the MSI Agreements, Microgyn has no licenses granted, sold or otherwise
transferred by or to it nor other agreements to which it is a party, relating
in whole or in part to any Microgyn Product or Microgyn Intellectual Property
Rights.
(d) The execution, delivery and performance of this Agreement, the
Articles of Merger and the Microgyn Ancillary Agreements, the consummation of
the Merger and the consummation of the other transactions contemplated hereby
and thereby (including without limitation the continued conduct by Conceptus
after the Merger of Microgyn's Business as presently conducted and as
proposed to be conducted in the Microgyn Business Plan and the incorporation
of any Microgyn Product or Microgyn Intellectual Property Right in any
product of Conceptus or the Surviving Corporation) will not breach, violate
or conflict with any instrument or agreement governing any such Microgyn
Product or Microgyn Intellectual Property Right necessary or required for, or
used in, the conduct of the business of Microgyn as presently conducted or as
proposed to be conducted and will not cause the forfeiture or termination or
give rise to a right of forfeiture or termination of any such Microgyn
Product or Microgyn Intellectual Property Right or in any way impair the
right of Conceptus or the Surviving Corporation or any
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of its subsidiaries to use, sell, license or dispose of, either as
part or all of an Microgyn Product or subsequent to the Closing (as defined
in Article I) as part or all of a product of Conceptus or the Surviving
Corporation, or to bring any action for the infringement of, any such
Microgyn Product or Microgyn Intellectual Property Right or portion thereof.
(e) The development, manufacture, marketing, license, sale or use
of any Microgyn Product or Microgyn Intellectual Property Right does not and
will not violate any license or agreement to which Microgyn is a party or
infringe any Intellectual Property Right of any other party; there is no
pending or, to the knowledge of Microgyn, threatened claim or litigation
contesting the validity, ownership or right to use, sell, license or dispose
of any Intellectual Property Right necessary or required for, or used in, the
conduct of the business of Microgyn as presently conducted nor, to the
knowledge of Microgyn, is there any basis for any such claim, nor has
Microgyn received any notice asserting that any such Intellectual Property
Right or the proposed use, sale, license or disposition thereof conflicts or
will conflict with the rights of any other party, nor, to the knowledge of
Microgyn, is there any basis for any such assertion. To Microgyn's
knowledge, there is no infringement on the part of any third party of
Microgyn's Intellectual Property Rights.
(f) Microgyn has taken reasonable and practicable steps
(including, without limitation, entering into confidentiality and
non-disclosure agreements with all officers and employees of and consultants
to Microgyn with access to or knowledge of Microgyn's Intellectual Property
Rights) to maintain the secrecy and confidentiality of, and its proprietary
rights in, all Intellectual Property Rights necessary or required for, or
used in, the conduct of Microgyn's Business. All employees, consultants,
officers, directors and shareholders of Microgyn that have had access to any
material portion of the Microgyn Intellectual Property Rights are parties to
a written agreement ("PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT"),
under which each such person or entity (i) is obligated to disclose and
transfer to Microgyn, without the receipt by such person of any additional
value therefor (other than normal salary or fees for consulting services),
all inventions, developments and discoveries which, during the period of
employment with or performance of services for Microgyn, he makes or
conceives of either solely or jointly with others, that relate to any subject
matter with which his work for Microgyn may be concerned, or relate to or are
connected with the business, products or projects of Microgyn, or involve the
use of the time, material or facilities of Microgyn, and (ii) is obligated to
maintain the confidentiality of proprietary information of Microgyn. To
Microgyn's knowledge, none of Microgyn's employees, consultants, officers or
directors is obligated under any contract (including licenses, covenants or
commitments of any nature) or other agreement, or subject to any judgment,
decree or order of any court or administrative agency, that would conflict
with their obligation to use their best efforts to promote the interests of
Microgyn in the Microgyn Business or that would conflict with the Microgyn
Business. Other than technology licensed under the MSI Agreements, it is
currently not necessary nor will it be necessary for Microgyn to utilize in
the Microgyn Business nor will Microgyn utilize in the Microgyn Business any
inventions of any of such persons or entities (or people it currently intends
to hire) made or owned prior to their employment by or affiliation with
Microgyn, nor is it or will it be necessary to utilize any other assets or
rights of any such persons or entities (or people it currently intends to
hire) made or owned prior to their employment with or engagement by Microgyn,
in violation of any registered patents, trade names, trademarks or copyrights
or any other limitations or
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restrictions to which any such person or entity is a party or to which any of
such assets or rights may be subject, except to the extent that such
utilization would not have a material adverse effect on the Microgyn
Business. None of Microgyn's employees, consultants, officers, directors or
shareholders that has had knowledge or access to information relating to
Microgyn's Business has taken, removed or made use of any proprietary
documentation, manuals, products, materials, or any other tangible item from
his previous employer relating to the business as conducted of such previous
employer which has resulted in Microgyn's access to or use of such
proprietary items in Microgyn's Business, and Microgyn and each Microgyn
Subsidiary will not gain access to or make use of any such proprietary items
in Microgyn's Business, except to the extent that any such activities would
not have a material adverse effect on Microgyn's Business.
(g) The MSI Agreements are the only licenses, sublicenses and
other agreements as to which Microgyn is a party and pursuant to which
Microgyn or any other person is authorized to use, license, sublicense, sell
or distribute any Intellectual Property Right and includes the identity of
all parties thereto, a description of the nature and subject matter thereof,
the applicable royalty and the term thereof. Microgyn is not in violation of
any license, sublicense or agreement described on such list except such
violations as do not materially impair Microgyn's rights under such license,
sublicense or agreement. The MSI Agreements are the only exclusive
arrangement between Microgyn and any third party to use, license, sublicense,
sell or distribute any Microgyn Intellectual Property Right or any Microgyn
Product.
(h) The Microgyn Disclosure Schedule contains a complete and
accurate list of all applications, filings and other formal actions made or
taken (including any results thereof) pursuant to federal, state, local and
foreign laws by Microgyn to perfect or protect its interest in Microgyn
Intellectual Property Rights, including, without limitation, all patents,
patent applications, trademarks, trademark applications, service marks and
copyright registrations. As used herein, the term "INTELLECTUAL PROPERTY
RIGHTS" means all intellectual property rights, including, without
limitation, domestic and foreign patents, patent applications, patent rights,
trademarks, trademark registrations, trademark applications, trade names,
service marks, service ▇▇▇▇ applications, copyrights, copyright applications,
licenses, know-how, trade secrets, trade rights, proprietary processes and
formulae, inventions, development tools, designs, plans, specifications,
technical information and other proprietary rights, whether or not
registered, and all documentation and media relating to the above, and the
term "MICROGYN INTELLECTUAL PROPERTY RIGHT" shall mean Intellectual Property
Rights owned by or granted exclusively or nonexclusively to Microgyn.
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Section 2.14 ENVIRONMENTAL MATTERS.
(a) The operations of Microgyn (i) comply and have complied in all
material respects with all federal, state and local environmental, health and
safety laws, statutes and regulations, (ii) are not the subject of any
judicial or administrative proceeding alleging the violation of any federal,
state or local environment, health or safety law, statute or regulation, and
(iii) are not the subject of any federal or state investigation pursuant to
which Microgyn has been ordered to respond to a release of any hazardous or
toxic waste, substance or constituent or other substance, into the
environment in violation of law.
(b) Microgyn has not (i) filed any notice under federal or state
law indicating past or present treatment, storage or disposal requiring a
Part B permit or designation of "interim status" as defined under 40 C.F.R.
Parts 260-270 or any state equivalent of a hazardous or toxic waste as
defined therein or reporting a spill or release of a hazardous or toxic
waste, substance or constituent or other substance, into the environment
except in accordance with applicable law, or (ii) released, as defined in the
Comprehensive Environmental Response Compensation and Liability Act (42
U.S.C. Section 9601 ET SEQ.), any hazardous substance as defined therein into
the environment.
(c) None of the operations of Microgyn involve, or have ever
involved, the generation, transportation, treatment or disposal, as defined
under 40 C.F.R. Parts 260-270 or any state equivalent, of any hazardous or
toxic waste, substance or constituent.
(d) No claim, complaint, or administrative proceeding has been
brought or is currently pending against Microgyn relating to any liability of
Microgyn existing or threatened with respect to hazardous or toxic waste,
substances or constituents or other substances or as to the investigation or
remediation of hazardous or toxic waste, substances or constituents or other
substances.
As used herein "FEDERAL, STATE AND LOCAL ENVIRONMENTAL, HEALTH AND
SAFETY LAWS, STATUTES OR REGULATIONS" means any and all laws, rules,
regulations, orders, treaties, statutes and codes promulgated by any local,
state, federal or international governmental authority or agency which has
jurisdiction over any portion of the current operations of Microgyn, which
prohibits, regulates or controls any hazardous material or the
transportation, storage, transfer, recycling, use, treatment, manufacture,
investigation, removal, remediation, release, exposure of others to, sale or
distribution of hazardous materials including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act (42
U.S.C. Section 9601 ET SEQ.), the Hazardous Material Transportation Act (49
U.S.C. Section 1801 ET SEQ.), the Resource Conservation and Recovery Act (42
U.S.C. Section 6901 ET SEQ.), the Federal Water Pollution Control Act (33
U.S.C. Section 1251 ET SEQ.), the Clean Air Act (42 U.S.C. Section 7401 ET
SEQ.), the Toxic Substances Control Act, as amended (15 4U.S.C. Section 2601
ET SEQ.), and the Occupational Safety and Health Act (29 U.S.C. Section 651
ET SEQ.), as these laws have been amended or supplemented to date and any
analogous state or local statutes and the regulations promulgated to date
pursuant thereto.
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As used herein, "HAZARDOUS OR TOXIC WASTE, SUBSTANCE OR CONSTITUENT OR
OTHER SUBSTANCE" means those substances which are regulated by or form the
basis of liability under any federal, state and local environmental, health
and safety laws, statutes or regulations because they are radioactive, toxic,
hazardous or otherwise a danger to health, reproduction or the environment,
including, without limitation: (a) asbestos, (b) oil and petroleum products,
(c) explosives, (d) radioactive substances, pollutants or wastes, (e) urea
formaldehyde-containing building materials, (f) polychlorinated biphenyls,
(g) radon gas, and (h) ultra-hazardous or toxic substances, pollutants or
wastes.
Section 2.15 CERTAIN AGREEMENTS. Neither the execution and delivery
of this Agreement, the Articles of Merger and the Microgyn Ancillary
Agreements, nor the consummation of the transactions contemplated hereby or
thereby will (a) result in any payment (including, without limitation,
severance, unemployment compensation, golden parachute, bonus or otherwise)
becoming due to any director or employee of Microgyn, under any Microgyn
Employee Plan or otherwise, (b) increase any benefits otherwise payable under
any Mycrogyn Employee Plan, or (c) result in the acceleration of the time of
payment or vesting of any such benefits.
Section 2.16 INTERESTS OF OFFICERS AND DIRECTORS. No officer or
director of Microgyn or any "affiliate" or "associate" (as those terms are
defined in Rule 405 promulgated under the Securities Act) of any such person
has had, either directly or indirectly, a material interest in: (a) any
person or entity which purchases from or sells, licenses or furnishes to
Microgyn any goods, property, technology or intellectual or other property
rights or services; (b) any contract or agreement to which Microgyn is a
party or by which it may be bound or affected; or (c) any property, real or
personal, tangible or intangible, used in or pertaining to Microgyn's
Business, including any interest in the Microgyn Intellectual Property Rights.
Section 2.17 RESTRICTIONS ON BUSINESS ACTIVITIES. Other than the MSI
Agreements there is no material agreement, judgment, injunction, order or
decree binding upon Microgyn which has or could reasonably be expected to
have the effect of prohibiting or materially impairing any business practice
of Microgyn, any acquisition of property by Microgyn or the conduct of
business by Microgyn as currently conducted or as currently proposed to be
conducted by Microgyn.
Section 2.18 TITLE TO PROPERTIES; ABSENCE OF LIENS AND ENCUMBRANCES;
CONDITION OF EQUIPMENT.
(a) The Microgyn Disclosure Schedule lists all facilities occupied
by Microgyn since Microgyn's incorporation, and indicates the nature of
Microgyn's interest in such facilities. Microgyn has good and valid title
to, or, in the case of leased properties and assets, valid leasehold
interests in, all of its tangible properties and assets, real, personal and
mixed, used in its business, free and clear of any liens, charges, pledges,
security interests or other encumbrances, except those granted to Conceptus
and those reflected in the Microgyn Disclosure Schedule or except for such
imperfections of title and encumbrances, if any, which are not substantial in
character, amount or extent, and which do not materially detract from the
value, or interfere with the present use, of the property subject thereto or
affected thereby.
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(b) Microgyn does not own or lease any equipment.
Section 2.19 REGULATORY MATTERS; GOVERNMENTAL LICENSES; COMPLIANCE
WITH LAWS.
(a) The Microgyn Disclosure Schedule sets forth a complete and
accurate list and description of (i) all United States Food and Drug
Administration (the "FDA") and any other Governmental Entity inspector lists
of observations or similar documents made at inspections with respect to
Microgyn, including without limitation Form(s) FDA-483, (ii) Regulatory or
Warning Letters, Notices of Adverse Findings or Section 305 notices issued by
the FDA or any similar letters or notices issued by any other Governmental
Entity to Microgyn; (iii) all United States Pharmacopoeia Product Problem
Reporting Program complaints or reports and MedWatch FDA forms 3500, device
experience network complaints received by Microgyn and Medical Device Reports
("MDRS") filed by Microgyn; (iv) all product recalls and safety alerts
conducted by or issued to Microgyn; (v) any civil penalty actions begun by
the FDA or any other Governmental Entity against Microgyn of which Microgyn
is aware; and (vi) all 510(k) substantial equivalence letters or premarket
approval letters ("PMAS") received by Microgyn, all applications filed by
Microgyn for 510(k)s or PMAs and all assurances from the FDA, written or
oral, that any modifications to devices subject to issued 510(k)s or PMAs
remain covered by FDA and any other Governmental Entity approvals.
(b) Microgyn has obtained all consents, approvals, registrations,
certifications, authorizations, permits and licenses of, and has made all
filings with, or notifications to, all Governmental Entities pursuant to
applicable requirements of all federal, state or local and, to Microgyn's
knowledge, foreign, laws, ordinances, governmental rules or regulations
applicable to Microgyn and its current business, including but not limited
to, all such laws, ordinances, governmental rules or regulations relating to
registration of Microgyn's Products (at their current level of development
and use) and certification of its facilities. Microgyn is in compliance with
all federal, state or local and, to Microgyn's knowledge, foreign, laws,
ordinances, governmental rules or regulations relating to medical device
manufacturers and distributors or otherwise applicable to its current
business and has no reason to believe that any of its consents, approvals,
authorizations, registrations, certifications, permits, filings or
notifications that it has received or made to operate its business are
invalid or have been or are being suspended, cancelled, revoked or
questioned. There is no investigation or inquiry to which Microgyn is a
party or, to Microgyn's knowledge, pending or threatened relating to the
operation of Microgyn's business and its compliance with applicable federal,
state, local or foreign laws, ordinances, governmental rules or regulations.
(c) Microgyn is not in default with respect to any order of any
court, governmental authority or arbitration board or tribunal to which
Microgyn is a party or is subject.
Section 2.20 LABOR MATTERS.
(a) Microgyn is in compliance in all material respects with all
currently applicable laws and regulations respecting employment,
discrimination in employment, terms and conditions of employment and wages
and hours and occupational safety and health and employment practices, and
are not engaged in any unfair labor practice. Microgyn has complied
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in all material aspects with all applicable provisions of the Consolidated
Omnibus Budget Reconciliation Act of 1985 ("COBRA") and has no material
obligations with respect to any former employees or qualifying beneficiaries
thereunder. Microgyn has not received any notice from any Governmental
Entity, and there has not been asserted before any Governmental Entity, any
claim, action or proceeding to which Microgyn is a party or involving
Microgyn, and there is neither pending nor, to Microgyn's knowledge,
threatened any investigation or hearing concerning Microgyn arising out of or
based upon any such laws, regulations or practices. Except as is not
material to Microgyn's Business, Microgyn has not given to or received from,
or anticipates giving to or receiving from, any employee of Microgyn notice
of termination of employment. The Microgyn Disclosure Schedule sets forth
the terms pursuant to which all amounts may be payable (whether currently or
in the future) to current or former officers, directors, or employees of
Microgyn as a result of or in connection with the Merger.
(b) Microgyn is not a party to any labor agreement with respect to
its employees with any labor organization, union, group or association and
there are no employee unions (nor any other similar labor or employee
organizations) under local statutes, custom or practice. Microgyn has not
experienced any attempt by organized labor or its representatives to make
Microgyn conform to demands of organized labor relating to its employees or
to enter into a binding agreement with organized labor that would cover the
employees of Microgyn. To Microgyn's knowledge, there is no labor strike or
labor disturbance pending or threatened against Microgyn nor is any grievance
currently being asserted. Microgyn has not experienced a work stoppage or
other labor difficulty.
Section 2.21 QUESTIONABLE PAYMENTS. Neither Microgyn nor to its
knowledge any director, officer, agent or other employee of Microgyn has:
(a) made any payments or provided services or other favors in the United
States of America or in any foreign country in order to obtain preferential
treatment or consideration by any Governmental Entity with respect to any
aspect of the business of Microgyn; or (b) made any political contributions
which would be lawful under the laws of the United States or the foreign
country in which such payments were made. Neither Microgyn nor to its
knowledge any director, officer, agent or other employee of Microgyn has been
the subject of any inquiry or investigation by any Governmental Entity in
connection with payments or benefits or other favors to or for the benefit of
any governmental or armed services official, agent, representative or
employee with respect to any aspect of the business of Microgyn or with
respect to any political contribution.
Section 2.22 INSURANCE. The Microgyn Disclosure Schedule contains a
complete and accurate list of all policies or binders of fire, liability,
title, worker's compensation, product liability and other forms of insurance
maintained by Microgyn. Microgyn is not in default under any of such policies
or binders, and Microgyn has not failed to give any notice or to present any
claim under any such policy or binder in a due and timely fashion. There are
no facts known to Microgyn upon which an insurer might be justified in
reducing coverage or increasing premiums on existing policies or binders.
There are no outstanding unpaid claims under any such policies or binders.
All policies and binders provide sufficient coverage for the risks insured
against, are in full force and effect on the date hereof and shall be kept in
full force and effect through the Effective Time.
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Section 2.23 BROKERS. Other than with respect to amounts owed to ▇▇.
▇▇▇▇ ▇▇▇▇▇▇, as detailed on the Microgyn Disclosure Schedule, no broker,
finder or investment banker is entitled to any brokerage, finder's or other
fee or commission in connection with the transactions contemplated by this
Agreement. In the event that the preceding sentence is in any way
inaccurate, Microgyn agrees to indemnify and hold harmless Conceptus from any
liability for any commission or compensation in the nature of a finder's fee
(and the costs and expenses of defending against such liability or asserted
liability) for which Conceptus or any of its directors, officers, partners,
employees or representatives is responsible.
Section 2.24 DISCLOSURE. To the knowledge of Microgyn, other than
with respect to statements in the Microgyn Business Plan, no representation
or warranty made by Microgyn in this Agreement, nor any document, written
information, written statement, financial statement, certificate, schedule or
exhibit prepared and furnished or to be prepared and furnished by Microgyn or
its representatives pursuant hereto or in connection with the transactions
contemplated hereby, contains any untrue statement of a material fact, or
omits to state a material fact with respect to Microgyn (and specifically
excluding any external factors such as general market conditions, products of
competitors and other information in the public domain) necessary to make the
statements or facts contained herein or therein not misleading in light of
the circumstances under which they were furnished. The Microgyn Business
Plan and the financial projections contained therein were prepared in good
faith; however, Microgyn does not warrant that it will achieve such financial
projections. To the knowledge of Microgyn, there is no event, fact or
condition with respect to Microgyn (and specifically excluding any external
factors such as general market conditions, products of competitors and other
information in the public domain) that has resulted in, or could reasonably
be expected to result in, a material adverse effect on Microgyn's Business
that has not been set forth in this Agreement or in the Microgyn Disclosure
Schedule. Microgyn has provided copies to Conceptus of all documents and
information requested by Conceptus pursuant to Conceptus's diligence requests.
Section 2.25 VOTE REQUIRED. The affirmative votes of the holders of
two-thirds of the outstanding shares of Microgyn Common Stock is the only
vote of the holders of any class or series of Microgyn Capital Stock
necessary to approve this Agreement and the Merger.
Section 2.26 MICROGYN AFFILIATES. All persons that may be deemed to
be an "affiliate" of Microgyn, as defined in Rule 405 promulgated under the
Securities Act, are set forth in Section 2.26 of the Microgyn Disclosure
Schedule; provided this section shall not constitute an admission that such
persons are in fact affiliates.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
CONCEPTUS AND SUB
As of the date hereof, except as disclosed in a document referring
specifically to the relevant subsections of this Article III which is
delivered by Conceptus to Microgyn prior to execution of this Agreement (the
"CONCEPTUS DISCLOSURE SCHEDULE"), Conceptus and Sub hereby represent and
warrant to Microgyn and the Microgyn Shareholders, which representations, to
the
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extent to that they refer to the "knowledge" of Conceptus or Sub, shall be
deemed to encompass the individual knowledge of each officer and director of
Conceptus or Sub, as follows:
Section 3.1 CORPORATE ORGANIZATION. Conceptus and Sub are
corporations duly organized, validly existing and in good standing under the
laws of the State of Delaware and the Commonwealth of Massachusetts,
respectively, and each has all requisite corporate power and authority and
all necessary governmental authorizations to own, lease and operate its
properties and to conduct its business as it is now being conducted.
Conceptus and Sub are duly qualified or licensed to do business and are in
good standing as foreign corporations in each state or other jurisdiction in
which the nature of their respective businesses or operations or ownership of
their property requires such qualification or licensing, except where the
failure to be so qualified or licensed would not, individually or in the
aggregate, materially and adversely affect the condition (financial or
other), business, properties, prospects (as currently contemplated), net
worth or results of operations of Conceptus and Sub taken as a whole
(collectively, "CONCEPTUS'S BUSINESS"). Conceptus has delivered to Microgyn
complete and correct copies of Conceptus's Certificate of Incorporation and
Bylaws and Sub's Articles of Organization and Bylaws, in each case as amended
to the date hereof.
Section 3.2 CAPITAL STRUCTURE. As of the date hereof the authorized
capital stock of Conceptus consists of 30,000,000 shares of Conceptus Common
Stock, and 3,000,000 shares of Preferred Stock, $0.003 par value ("CONCEPTUS
PREFERRED STOCK"). At the close of business on September 30, 1996, 9,148,045
shares of Conceptus Common Stock were outstanding and 1,060,668 shares of
Conceptus Common Stock were reserved for issuance upon the exercise of
outstanding stock options ("CONCEPTUS OPTIONS"), and no shares of Conceptus
Preferred Stock were outstanding. All outstanding shares of Conceptus Common
Stock are validly issued, fully paid, nonassessable and free of preemptive
rights. The shares of Conceptus Common Stock issuable in connection with the
Merger are duly authorized and reserved for issuance and, when issued in
accordance with the terms of this Agreement and the Articles of Merger, will
be validly issued, fully paid, nonassessable and free of preemptive rights.
As of the date hereof, the authorized capital stock of Sub consists of 100
shares of Common Stock, no par value, one of which is validly issued, fully
paid and nonassessable and owned by Conceptus. Except for the shares listed
above issuable pursuant to Conceptus Options, there are no options, warrants,
calls, conversion rights, commitments or agreements of any character to which
Conceptus or any Subsidiary of Conceptus is a party or by which any of them
may be bound obligating Conceptus or any Subsidiary of Conceptus to issue,
deliver or sell, or cause to be issued, delivered or sold, additional shares
of the capital stock of Conceptus or of any Subsidiary of Conceptus or
obligating Conceptus or any Subsidiary of Conceptus to grant, extend or enter
into any such option, warrant, call, conversion right, commitment or
agreement.
Section 3.3 AUTHORIZATION, EXECUTION AND DELIVERY. Conceptus and Sub
each has all requisite corporate power and authority (a) to execute and
deliver this Agreement, the Articles of Merger and the agreements attached as
exhibits hereto to which Conceptus or Sub is a party (the "CONCEPTUS
ANCILLARY AGREEMENTS"), (b) to perform its respective obligations under this
Agreement, the Articles of Merger and the Conceptus Ancillary Agreements, and
(c) to consummate the transactions contemplated hereby and thereby. The
execution, delivery and performance of this Agreement, the Articles of Merger
and the Conceptus Ancillary Agreements by Conceptus
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and Sub and the consummation by Conceptus and Sub of the transactions
contemplated hereby and thereby have been duly approved and authorized by all
requisite corporate action of Conceptus and Sub. This Agreement has been
duly executed and delivered by Conceptus and Sub and, assuming its due
authorization, execution and delivery by Microgyn, constitutes the legal,
valid and binding obligation of each of them, enforceable in accordance with
its terms. The Board of Directors of Conceptus has determined that it is
advisable and in the best interest of Conceptus's stockholders for Conceptus
to enter into a strategic business combination with Microgyn upon the terms
and subject to the conditions of this Agreement.
Section 3.4 GOVERNMENTAL APPROVALS AND FILINGS. No approval,
authorization, consent, license, clearance or order of, declaration or
notification to, or filing, registration or compliance with, any Governmental
Entity is required on the part of Conceptus or Sub in order (a) to permit
Conceptus and Sub to perform their respective obligations under this
Agreement or (b) to prevent the termination of any right, privilege, license
or agreement of Conceptus, or to prevent any loss to Conceptus's Business, by
reason of the transactions contemplated by this Agreement, except for (i) the
receipt of a permit from the California Department of Corporations (ii) the
filing of the Articles of Merger, as required by the MBCL, (iii) the
registration requirements of state securities or "Blue Sky" laws and (iv) the
rules of the Nasdaq National Market applicable to the Conceptus Common Stock.
Section 3.5 NO CONFLICT. Except for compliance with the governmental
and regulatory requirements described in Section 3.4 hereof, neither the
execution, delivery and performance of this Agreement, the Articles of Merger
and the Conceptus Ancillary Agreements by Conceptus and Sub nor the
consummation by Conceptus and Sub of the transactions contemplated hereby and
thereby, including the Subsequent Merger, will (a) conflict with, or result
in a breach of, any of the terms, conditions or provisions of Conceptus's
Certificate of Incorporation, Sub's Articles of Organization, Conceptus's
Bylaws or Sub's Bylaws, (b) conflict with, result in a breach or violation
of, give rise to a termination right or a default under, or result in the
acceleration of performance under (whether or not after the giving of notice
or lapse of time or both), any mortgage, lien, lease, agreement, note, bond,
indenture, guarantee or instrument or any license or franchise granted by or
to third party that is material to Conceptus's Business, (c) conflict with,
or result in a violation of, any statute, regulation, law, ordinance, writ,
injunction, order, judgment or decree to which Conceptus or Sub or any of
their respective assets may be subject, which conflict, breach, default or
violation would materially and adversely affect Conceptus's Business, (d)
give rise to a declaration or imposition of any lien, charge, security
interest or encumbrance of any nature whatsoever upon any of the assets of
Conceptus or Sub, (e) materially and adversely affect any franchise, license,
permit or other governmental approval which is material to Conceptus's
Business or is necessary to enable Conceptus or Sub to carry on their
respective businesses as presently conducted or is required of any employee
or agent thereof to enable each of them to carry out such person's duties on
behalf of Conceptus or Sub, as the case may be, or (f) require the consent of
any third party.
Section 3.6 REPORTS; ACCURACY OF INFORMATION. Conceptus has
previously delivered to Microgyn true and complete copies of (a) Conceptus's
annual report on Form 10-K for the year ended December 31, 1995, and
quarterly reports on Form 10-Q for the quarters ended March 31, 1996 and June
30, 1996, as filed by Conceptus with the Securities and Exchange Commission
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pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT"), and (b) the Company's notice of annual meeting,
proxy statement and annual report furnished to Conceptus's stockholders in
connection with its 1996 annual meeting of stockholders held on May 9, 1996.
As of their respective dates (or, if any such report or proxy statement shall
have been amended, as of the date of such amendment), such reports and proxy
statements (i) complied with all applicable provisions, rules and regulations
of federal securities laws and (ii) did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary to make the statements contained therein, in light of the
circumstances in which such statements were made, not misleading. Conceptus
has timely filed all reports and registration statements required to be filed
by Conceptus with the Commission under the rules and regulations of the
Commission.
Section 3.7 LITIGATION. There is no action, suit, proceeding,
investigation or claim pending or, to the knowledge of Conceptus, threatened
against Conceptus or any its Subsidiaries which could, individually or in the
aggregate, have a material adverse effect on Conceptus's Business or which in
any manner challenges or seeks to prevent, enjoin, alter or materially delay
any of the transactions contemplated hereby.
Section 3.8 NO MATERIAL ADVERSE CHANGE. Since the date of the
balance sheet included in Conceptus's most recently filed report on Form
10-Q, Conceptus has conducted its business in the ordinary course and there
has not occurred: (a) any material adverse change in the financial condition,
liabilities, assets or business of Conceptus; (b) any amendment or change in
the Certificate of Incorporation or Bylaws of Conceptus; (c) any damage to,
destruction of or loss of any assets of the Conceptus (whether or not covered
by insurance) that materially and adversely affects the financial condition
or business of Conceptus; or (d) any sale of a material amount of property of
Conceptus, except in the ordinary course of business.
Section 3.9 BROKERS. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement. In the event that the
preceding sentence is in any way inaccurate, Conceptus agrees to indemnify
and hold harmless Microgyn from any liability for any commission or
compensation in the nature of a finder's fee (and the costs and expenses of
defending against such liability or asserted liability) for which Conceptus
or any of its directors, officers, partners, employees or representatives is
responsible.
Section 3.10 RESALE OF MERGER SHARES. Assuming the issuance of a
Permit by the Commissioner following the Permit Application and Hearing, as
all of such terms are defined in Section 6.2 below, the Merger Shares may be
resold in compliance with Rule 145 promulgated under the Securities Act or
otherwise pursuant to a valid exemption from registration under the
Securities Act.
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ARTICLE IV
COVENANTS OF MICROGYN
Section 4.1 REGULAR COURSE OF BUSINESS. Except as otherwise
consented to in writing by Conceptus, prior to the Effective Time Microgyn
shall use its best efforts to conduct its business in the ordinary and usual
course consistent with past practice and shall use reasonable efforts to
maintain and preserve intact its business organizations, keep available the
services of its officers and employees and maintain positive relations with
licensors, licensees, suppliers, contractors, distributors, customers and
others having business relationships with them. Microgyn shall promptly
notify Conceptus of any event or occurrence not in the ordinary course of
business and will not enter into or amend any agreement or take any action
which reasonably could be expected to have a material adverse effect on
Microgyn's Business.
Section 4.2 RESTRICTED ACTIVITIES AND TRANSACTIONS. Except as
provided herein or as otherwise consented to in writing by Conceptus, prior
to the Effective Time, Microgyn will not:
(a) propose, adopt or permit an amendment of Microgyn's Articles
of Organization or Microgyn's Bylaws;
(b) issue, sell, encumber or deliver, or agree to issue, sell,
encumber or deliver, any shares of any class of capital stock of Microgyn or
any securities convertible into any such shares or convertible into
securities in turn so convertible, or any options, warrants, or other rights
calling for the issuance, sale or delivery of any such shares or convertible
securities (except pursuant to the conversion of securities convertible into
Microgyn Capital Stock and outstanding as of the date hereof) or authorize or
propose any change in its equity capitalization;
(c) split, combine or reclassify any of its capital stock or issue
or authorize or propose the issuance or authorization of any other securities
in respect of, in lieu of or in substitution for shares of its capital stock
or repurchase, redeem or otherwise acquire any shares of its capital stock,
(d) mortgage or pledge any of its assets, tangible or intangible;
(e) (i) borrow, or agree to borrow, any funds or voluntarily
incur, assume or become subject to, whether directly or by way of guarantee
or otherwise, any obligation or liability (absolute or contingent), (ii)
cancel or agree to cancel any debts or claims, (iii) lease, sell or transfer,
agree to lease, sell or transfer, or grant or agree to grant any preferential
rights to lease or acquire, any of its assets, property or rights (except for
(A) dispositions of obsolete or worthless assets, (B) sales of immaterial
assets not in excess of $5,000 in the aggregate and (C) leases of equipment
in the ordinary course of business pursuant to commitments as set forth in
the Microgyn Disclosure Schedule), or (iv) make or permit any material
amendments or termination of any material contract, agreement, license or
other right to which it is a party;
(f) grant any increase in compensation to any employee or director
(except for annual increases in salary or wages of, and bonus grants made to,
employees in the ordinary course of business consistent with past practice,
which increases or grants have been consented to
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in writing by Conceptus and have been listed in the Microgyn Disclosure
Schedule), or amend in any respect the terms of any Microgyn Employee Plan or
adopt any new Microgyn Employee Plan or similar arrangements or agreements
(except in each case as specifically provided in this Agreement or as
required by law), or enter into or amend any employment, severance or similar
arrangement;
(g) hire any management personnel or terminate any employee of
Microgyn , except in the ordinary course of business involving a person with
an annual salary of less than $25,000 and only (in the case of a new hire)
pursuant to an at-will arrangement without any severance benefits;
(h) acquire control or ownership of any other corporation,
association, joint venture, partnership, business trust or other business
entity, or acquire control or ownership of all or a substantial portion of
the assets of any of the foregoing, or incorporate or form, or cause to be
incorporated or formed, any corporation, association, joint venture,
partnership, business trust or other business entity, or merge, consolidate
or otherwise combine with any other corporation (except as provided for in
this Agreement), or otherwise acquire or agree to acquire any assets which
are material, individually or in the aggregate, to the Microgyn Business;
(j) pay, discharge or satisfy any claims, liabilities or
obligations (whether absolute, accrued, contingent or otherwise), other than
in the ordinary course of business consistent with past practice of
liabilities reflected or reserved against in the Microgyn Financial
Statements;
(k) except in the ordinary course of business, enter into or agree
to enter into any transaction material to Microgyn's Business;
(l) transfer or license to any person or entity, or otherwise
extend, amend or modify, any rights to the Microgyn Intellectual Property
Rights;
(m) enter into or amend any agreements pursuant to which any other
party is granted most favored customer status or exclusive marketing,
distribution or other similar rights with respect to any products of Microgyn;
(n) violate, amend or otherwise modify the material terms of any
of the contracts set forth on the Microgyn Disclosure Schedule;
(o) commence a lawsuit other than for the routine collection of
bills or to enforce Microgyn's rights under this Agreement, or settle a
lawsuit;
(p) change the accounting methods or practices followed by
Microgyn , including any change in any assumption underlying, or method of
calculating, any bad debt, contingency or other reserve, except as may be
required by changes in generally accepted accounting principles, make or
change any material Tax election, adopt or change any Tax accounting method,
file any material Return or any amendment to a material Return (other than as
required and in accordance with Section 4.5), enter into any material closing
agreement, settle any material Tax claim or assessment, or consent to any
extension or waiver of the limitation period
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applicable to any material Tax claim or assessment, without the prior consent
of Conceptus, which consent will not be unreasonably withheld (for purposes
of this covenant a "material" Tax Return, closing agreement, Tax claim or
assessment shall mean a Tax liability with respect to each such item in
excess of $5,000);
(q) take any action that would result in any of the
representations and warranties of Microgyn set forth in this Agreement
becoming untrue;
(r) make any changes in its investment portfolio other than the
reinvestment of the proceeds of maturing, redeemed or prepaid securities,
obligations or other investments into United States Treasury securities
maturing 90 days or less from the date of investment;
(s) allow or permit to be done any act by which any of its
insurance policies may be suspended, impaired or canceled;
(t) fail to comply in any material respect with all laws
applicable to it; or
(u) authorize or propose any of the foregoing, or enter into any
contract, agreement, commitment or arrangement to do any of the foregoing.
Section 4.3 DIVIDENDS AND DISTRIBUTIONS; REPURCHASES. Except as
otherwise consented to in writing by Conceptus prior to the Effective Time,
Microgyn will not declare or pay any dividend on its capital stock in cash,
stock or property, and will not redeem, repurchase or otherwise acquire any
shares, or rights to acquire shares, of its capital stock.
Section 4.4 NO DEFAULT OR VIOLATION. Except as otherwise consented
to in writing by Conceptus, prior to the Effective Time, Microgyn will use
its best efforts not to (a) violate, or commit a breach of or a default
under, any contract, agreement, lease, license, mortgage or commitment to
which it is a party or to which any of its assets may be subject or (b)
violate any statute, regulation, ordinance, writ, injunction, order, judgment
or decree, or any other requirement of any governmental body or court,
applicable to its assets or business, the effect of which in any such case in
clauses (a) or (b) would be materially adverse to Microgyn's Business.
Section 4.5 TAXES; CONSENT. Microgyn shall prepare and timely file
all Returns and amendments thereto required to be filed by it on or before
the Closing Date. Conceptus shall have a reasonable opportunity to review
all Returns and amendments thereto and to approve such Returns (which
approval shall not be unreasonably withheld). Microgyn shall pay and
discharge all Taxes, assessments and governmental charges upon or against it
or any of its properties or assets, and all liabilities at any time existing,
before the same shall become delinquent and before penalties accrue thereon,
except to the extent and as long as: (a) the same are being contested in good
faith and by appropriate proceedings pursued diligently and in such a manner
as not to cause any material adverse effect upon the condition (financial or
otherwise) or operations of Microgyn; and (b) Microgyn shall have set aside
on its books adequate reserves for such Taxes. Between the date of this
Agreement and the Closing Date, Microgyn shall give Conceptus and its
authorized representatives full access to all properties, books, records and
Returns of or relating to Microgyn, whether in possession of Microgyn, or
third-party professional advisors or
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representatives in order that Conceptus may have full opportunity to make
such investigations as it shall desire to make of the affairs of Microgyn.
Microgyn shall ensure that all third-party advisors and representatives of
Microgyn, including without limitation accountants and attorneys, fully
cooperate and be available to Conceptus in connection with such
investigation. Microgyn shall, as of the Closing Date, terminate all tax
allocation agreements or tax sharing agreements with respect to Microgyn and
shall ensure that any such agreements are of no further force or effect as to
Microgyn on and after the Closing Date.
Section 4.6 ADVICE OF CHANGES. Microgyn will promptly advise
Conceptus in writing of (a) any event occurring subsequent to the date of
this Agreement which would render any representation or warranty of Microgyn
contained in this Agreement, if made on or as of the date of such event or
the date of the Closing, untrue or inaccurate or (b) any material adverse
change in Microgyn's Business.
Section 4.7 NEGOTIATION WITH OTHERS. From and after the date of this
Agreement until the earlier of the Effective Time or the termination of this
Agreement in accordance with its terms, Microgyn shall not, directly or
indirectly, (a) solicit, initiate discussions or engage in negotiations with
any person (whether such negotiations are initiated by Microgyn or otherwise)
or take any other action intended or designed to facilitate the efforts of
any person, other than Conceptus, relating to the possible acquisition of
Microgyn (whether by way of merger, purchase of capital stock, purchase of
assets or otherwise) or any material portion of its or their capital stock or
assets (with any such efforts by any such person, including without
limitation a firm proposal to make such an acquisition, to be referred to as
an "ACQUISITION PROPOSAL"), (b) provide information with respect to Microgyn
to any person, other than Conceptus, relating to a possible Acquisition
Proposal by any person, other than Conceptus, (c) enter into an agreement
with any person, other than Conceptus, providing for a possible Acquisition
Proposal, or (d) make or authorize any statement, recommendation or
solicitation in support of any possible Acquisition Proposal by any person
other than by Conceptus. In addition, Microgyn agrees to immediately cease
any and all existing activities, discussions or negotiations with any parties
conducted prior to the date hereof with respect to the foregoing.
Section 4.8 ACQUISITION PROPOSALS. Microgyn will provide Conceptus
with immediate notice of any inquiry or offer Microgyn receives from or on
behalf of any third party of the type referred to in Section 4.7 hereof,
including in such notice the identity of the third party and a complete
description of any such inquiry or offer, and will provide Conceptus with
immediate notice if Microgyn provides or furnishes any information to any
third party relating to a possible Acquisition Proposal.
Section 4.9 CONSENTS, APPROVALS AND FILINGS. Subject to having
sufficient funds, Microgyn will use its best efforts to comply as promptly as
practicable with the governmental requirements specified in Section 2.5
hereof and to obtain on or before the Closing all necessary approvals,
authorizations, consents, licenses, clearances or orders of Governmental
Entities referred to in such section or of other persons referred to in
Section 2.6 or the Microgyn Disclosure Schedule.
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Section 4.10 ACCESS TO RECORDS AND PROPERTIES. Conceptus may, prior
to the Effective Time, through its employees, agents and representatives,
continue to conduct or cause to be conducted a detailed review of the
business, financial condition, properties, assets, books and records of
Microgyn. Microgyn agrees to assist Conceptus in conducting such review and
investigation and will provide, and will cause its independent public
accountants (if any) to provide (subject to Conceptus's agreement to any
hold-harmless or indemnity reasonably required by such independent public
accountants), Conceptus and its employees, agents and representatives full
access to, and complete information concerning all aspects of the business of
Microgyn, including its books, records (including Returns filed or in
preparation), personnel and premises, the audit work papers and other records
relating to Microgyn of its independent public accountants. Neither any
investigation by Conceptus nor the receipt by Conceptus of any data or
information from Microgyn, its independent public accountants and other
representatives or advisors will affect the right of Conceptus or Sub to rely
on the representations, warranties or covenants of Microgyn or the right of
Conceptus to terminate this Agreement as provided in Section 13.1 hereof.
Section 4.11 NON-COMPETITION AGREEMENTS. Prior to the Closing,
Microgyn will use its reasonable best efforts to cause those shareholders set
forth in Section 4.11 of the Microgyn Disclosure Schedule to execute and
deliver to Conceptus Non-Competition Agreements substantially in the form of
EXHIBIT ▇-▇, ▇-▇ and B-3 attached hereto (the "NON-COMPETITION AGREEMENTS").
ARTICLE V
COVENANTS OF CONCEPTUS AND SUB
Section 5.1 LISTING APPLICATION. Conceptus will prepare and submit
to the Nasdaq National Market an additional listing application covering the
Merger Securities issuable in connection with the Merger and will use its
best efforts to obtain approval for the listing of such securities upon
official notice of issuance.
Section 5.2 EMPLOYEE BENEFITS. Promptly following the Effective
Time, Conceptus will take all steps necessary to make available to those
employees of Microgyn that will become employees of Conceptus or the
Surviving Corporation all employee benefits then offered to Conceptus
employees of like circumstance.
Section 5.3 CONDUCT OF MICROGYN BUSINESS.
(a) It is Conceptus's intent to invest in research and
development ("R&D") to successfully commercialize the Microgyn sheath (CISS)
product in order to achieve the level of sales projected in the Microgyn
Business Plan. Accordingly, Conceptus will fund Microgyn's R&D expenses
(including regulatory expenses) at no less than the levels set forth in the
Microgyn Business Plan through the period ending twelve (12) full calendar
months after the initial domestic commercial sale of a Microgyn Product (as
such terms and periods are discussed in Section 1.3(c) above). It is also
agreed that Conceptus needs a mechanism to adjust R&D expenditures should
sales fall far short of the projected level of sales in the Microgyn Business
Plan. To this end, at
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the end of the first twelve (12) full calendar months of commercial sales of
Microgyn Products in the United States (the "FIRST REVIEW") and on the
anniversary date thereafter (each a "SUBSEQUENT REVIEW") through the period
ending December 31, 2001, Conceptus will review actual sales performance for
Microgyn Products versus projected levels set forth in the Microgyn Business
Plan. If at the First Review actual sales of Microgyn Products for the
preceding twelve (12) calendar months exceed $3.5 million worldwide,
Conceptus will provide R&D funding for the Microgyn projects over the next
twelve (12) calendar months at a level no less than the sum of the amounts
set forth in the Microgyn Business Plan for such period. Thereafter at each
Subsequent Review, if actual worldwide sales of Microgyn Products exceed an
amount equal to double the minimum worldwide sales for the prior twelve-month
period (as set forth in the final sentence of this paragraph), Conceptus will
continue to provide R&D funding over the next twelve (12) full months at a
level no less than the sum of the amounts set forth in the Microgyn Business
Plan for such period. If at the First Review or at any Subsequent Review
actual worldwide sales of Microgyn Products for the prior twelve (12)
calendar months fail to meet the following minimum levels, Conceptus will not
be obligated thereafter to provide the level of R&D funding set forth in the
Microgyn Business Plan: First Review - $3.5 million; Second Review - $7.0
million; Third Review - $14.0 million; Fourth Review - $28.0 million.
Nothing in this paragraph shall be construed to apply to, or create
obligations on the part of Conceptus regarding, the funding of the Microgyn
projects by Conceptus after December 31, 2001.
(b) It is Conceptus's intent to build a single, physician-focused
United States sales force to sell a broad range of Conceptus products
including its existing and future products, the Microgyn Products and any
other products the marketing rights to which may be acquired by Conceptus.
Conceptus currently employs five United States sales representatives. So
long as the sales of the Microgyn Products are consistent with the projected
sales figures set forth in the Microgyn Business Plan, Conceptus will use its
best efforts to market and sell Microgyn Products in the manner described in
the Microgyn Business Plan or in another manner not less favorable to the
Microgyn Shareholders' interest under Section 1.3(c) and (d) above.
(c) During the calendar years 1997-2001, Conceptus will at all
times maintain the Surviving Corporation as a separate subsidiary or a
separate business unit for which gross profit and research and development
expenses (including expenses for regulatory and clinical affairs) are
calculated.
Section 5.4 MICROGYN OBLIGATIONS UNDER MSI AGREEMENTS. Following the
Effective Time, the Surviving Corporation shall comply, and Conceptus shall
cause such corporation to comply, fully with Microgyn's obligations under the
various agreements between Microgyn and MSI, including, without limitation,
obligations to pay all amounts payable by Microgyn under such contracts.
Section 5.5 SECURITIES LAW COMPLIANCE. Conceptus will use its best
efforts to (a) comply with all applicable state securities ("blue sky") laws
with respect to the issuance of the Merger Shares, and (b) apply for and
obtain a Permit from the Commissioner with respect to the issuance of the
Merger Shares, as described in Article VI below.
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Section 5.6 REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934.
Conceptus will use its best efforts to file with the Securities and Exchange
Commission in a timely manner all reports and other documents required of
Conceptus under the Securities Act and the Exchange Act to the extent
necessary to allow the Microgyn Shareholders to dispose of their Merger
Shares pursuant to Rule 145 under the Securities Act.
ARTICLE VI
SECURITIES ACT COMPLIANCE
Section 6.1 SECURITIES ACT EXEMPTION. The Conceptus Common Stock to
be issued pursuant to this Agreement and the Articles of Mergers shall not be
registered under the Securities Act in reliance upon the exemption contained
in Section 3(a)(10) of said Securities Act.
Section 6.2 FAIRNESS HEARING AND PERMIT. Conceptus has filed or will
file with the California Commissioner of Corporations (the "COMMISSIONER") a
permit application in the form prescribed by the Commissioner (the "PERMIT
APPLICATION") and a hearing request (the "HEARING REQUEST") for a hearing to
be held by the Commissioner to consider the terms, conditions and fairness of
the transactions contemplated by this Agreement and the Articles of Merger
pursuant to Section 25142 of the California Corporate Securities Laws of
1968, as amended (the "HEARING"). As soon as permitted by the Commissioner,
Conceptus shall cause the mailing of a hearing notice pursuant to, and
meeting the requirements of, Article 2 of Subchapter 1 of the California
Administrative Code, Title 10, Chapter 3, as amended, (the "HEARING NOTICE")
concerning the Hearing to all holders of Microgyn Capital Stock entitled to
receive such notice pursuant to the requirements of the rules of the
Commissioner and the California Corporate Securities Laws of 1968, as
amended. Microgyn shall furnish to Conceptus such data and information
concerning Microgyn as is necessary for Conceptus's preparation and filing of
the Permit Application, the Hearing Request and the Hearing Notice. All
documents relating to the Hearing and filed with the Commissioner shall
contain all of the material required to be contained therein by the
California Corporate Securities Laws of 1968, as amended, and the rules and
regulations thereunder.
Section 6.3 STOCK RESTRICTIONS. In addition to any legend imposed by
applicable state securities laws, the certificates representing the Merger
Shares issued to persons or entities that may be deemed an affiliate of
Microgyn or Conceptus upon the execution of this Agreement or at any time
thereafter shall bear a restrictive legend stating substantially as follows:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH
RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR
UNLESS SOLD PURSUANT TO RULE 145 OF SUCH ACT.
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Section 6.4 SHAREHOLDERS' REPRESENTATIONS REGARDING SECURITIES LAW
MATTERS. Each Microgyn Shareholder, by virtue of the Merger and such
conversion, shall be bound by the following provisions:
(a) The Microgyn Shareholder will not offer, sell or otherwise
dispose of any shares of Conceptus Common Stock except in compliance with the
Securities Act and the rules and regulations thereunder; and
(b) The Microgyn Shareholder will not make any sale, transfer or
other disposition of the Conceptus Common Stock unless (i) such sale,
transfer or other disposition is within the limitations of and in compliance
with Rule 145 promulgated by the Securities and Exchange Commission under the
Securities Act, and the Microgyn Shareholder furnishes Conceptus with
reasonable proof of compliance with such Rule, or (ii) in the opinion of
counsel reasonably acceptable to Conceptus and its counsel, some other
exemption from registration under the Securities Act is available with
respect to any such proposed sale, transfer or other disposition of the
Conceptus Common Stock, or (iii) the offer and sale of the Conceptus Common
Stock is registered under the Securities Act.
ARTICLE VII
MUTUAL COVENANTS
Section 7.1 CONFIDENTIALITY.
(a) In connection with the negotiation of this Agreement, the
preparation for the consummation of the transaction contemplated hereby, and
the performance of obligations hereunder, each party hereto acknowledges that
it has had, and will have, access to confidential information relating to the
other party, including, but not limited to, technical, manufacturing or
marketing information, ideas, methods, developments, inventions,
improvements, business plans, trade secrets, scientific or statistical data,
diagrams, drawings, specifications or other proprietary information relating
thereto, together with all analyses, compilations, studies or other
documents, records or data prepared by the parties or their respective
representatives which contain or otherwise reflect or are generated from such
information. All such information is herein referred to as "CONFIDENTIAL
INFORMATION"; provided, however, that the term "Confidential Information"
does not include information received by a party in connection with the
transaction contemplated hereby which (i) is or becomes generally available
to the public other than as a result of a disclosure by such party or its
representatives, (ii) was within such party's possession (as evidenced by
duly authenticated writings) prior to its being furnished to such party by or
on behalf of the other party in connection with the transaction contemplated
hereby, provided that the source of such information was not known by such
party to be bound by a confidentiality agreement with or other contractual,
legal or fiduciary obligation of confidentiality to the other party or any
other person with respect to such information or (iii) becomes available to
such party on a non-confidential basis from a source other than the other
party or any of its representatives, provided that such source is not bound
by a confidentiality agreement with or other contractual,
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legal or fiduciary obligation of confidentiality to the other party or any
other person with respect to such information.
(b) Nothing in this Section 7.1 is intended to grant any rights
under any patent or copyright of either party, nor shall this Section 7.1
grant any right in or to the other party's Confidential Information. Each
party shall use the other party's Confidential Information solely for the
purpose of consummating the transaction contemplated by this Agreement and
shall use reasonable efforts to treat all Confidential Information as
confidential, preserve the confidentiality thereof and not disclose any
Confidential Information, except to its representatives and affiliates who
need to know such Confidential Information in connection with the transaction
contemplated hereby. Each party shall cause its representatives to comply
with the covenants in the preceding sentence.
(c) All Confidential Information shall remain the property of the
party who originally possessed such information. In the event of the
termination of this Agreement for any reason whatsoever, Conceptus shall, and
shall cause its representatives to, promptly return to Microgyn, and Microgyn
shall, and shall cause its representatives to, promptly return to Conceptus,
all Confidential Information (including all copies, summaries and extracts
thereof and all analyses, compilations, studies or other documents, records
or data which contain, reflect or are generated from such Confidential
Information) furnished to Conceptus or Microgyn, as the case may be, by the
other party in connection with the transactions contemplated hereby.
(d) If a party or any of its representatives or affiliates is
requested or required (by oral questions, interrogatories, requests for
information or documents in legal proceedings, subpoena, civil investigative
demand or other similar process) or is otherwise required by operation of law
to disclose any Confidential Information, such party shall provide the other
party with prompt written notice of such request or requirement, which notice
shall, if practicable, be at least 48 hours prior to making such disclosure,
so that the other party may seek a protective order or other appropriate
remedy and/or waive compliance with the provisions of this Agreement. If, in
the absence of a protective order or other remedy or the receipt of such a
waiver, such party or any of its representatives are nonetheless, in the
opinion of counsel, legally compelled to disclose Confidential Information,
then such party may disclose that portion or the Confidential Information
which such counsel advises is legally required to be disclosed, provided that
such party uses its reasonable efforts to preserve the confidentiality of the
Confidential Information, whereupon such disclosure shall not constitute a
breach of this Agreement.
(e) Each party agrees that its obligations provided herein are
necessary and reasonable in order to protect the other party and its
business, and each party expressly agrees that monetary damages would be
inadequate to compensate a party for any breach by the other party of its
covenants and agreements set forth herein. Accordingly, each party agrees
and acknowledges that any such breach or threatened breach will cause
irreparable injury to the other party and that, in addition to any other
remedies that may be available, in law, in equity or otherwise, such party
shall be entitled to obtain injunctive relief against the threatened breach
of this Agreement or the continuation of any such breach, without the
necessity of proving actual damages.
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Section 7.2 EXPENSES.
(a) Except as otherwise provided in this Section 7.2, in the event
the Merger is not consummated, Conceptus and Microgyn will each separately
bear its own expenses incurred in connection with this Agreement or any
transaction contemplated hereby, except that in the event that the Closing
occurs, Conceptus agrees to pay the expenses, not to exceed an aggregate of
$250,000, of Microgyn's legal, accounting and financial advisors. The
parties acknowledge that any excess fees over and above such $250,000 amount
will be borne directly by the Microgyn Shareholders via a corresponding
decrease in the aggregate amount of Cash Payments to be made by Conceptus.
(b) In the event that the transaction is not consummated because
(a) the Microgyn Board of Directors or Shareholders do not approve the
transaction or elect not to continue to pursue the transaction (including
entertaining competitive offers), then Microgyn shall pay to Conceptus within
five business days of such event an amount equal to Conceptus's documented
out-of-pocket expenses incurred in pursuit of this transaction; PROVIDED that
such decision not to approve or not to pursue is not based on fraud or
willful misconduct on the part of Conceptus or its agents and PROVIDED,
FURTHER, that such election is not based upon the circumstances set forth in
Sections 13.1(a), (c) or (e) below, or (b) the Conceptus Board of Directors
does not approve the transaction or Conceptus elects not to continue to
pursue the transaction, then the principal and all accrued interest on the
outstanding secured loan from Conceptus to Microgyn shall be deemed forgiven
and Conceptus shall pay to Microgyn within five business days of such event
an amount equal to Microgyn's documented out-of-pocket expenses incurred in
pursuit of this transaction; PROVIDED that such decision not to approve or
not to pursue is not based on fraud or willful misconduct on the part of
Microgyn or its agents and PROVIDED, FURTHER, that such election is not based
upon the circumstances set forth in Sections 13.1(a), (c), (d) or (f).
Section 7.3 PUBLIC ANNOUNCEMENTS. Except as provided for herein,
Conceptus and Microgyn shall not from and after the date hereof and prior to
the Effective Time make, issue or release any public announcement, press
release, public statement or acknowledgment of the existence of, or reveal
publicly the terms, conditions and status of, the transactions provided for
herein (including any generally disseminated written communication to
employees, customers or the trade) without the prior consent of the other
party as to the content and time of release of and the media in which such
statement or announcement is to be made; PROVIDED, HOWEVER, that in the case
of announcements, statements, acknowledgments or disclosures which any party
is required by law to make, issue or release, the making, issuing or
releasing of any such announcement, statement, acknowledgment or disclosure
by the party so required to do so by law shall not constitute a breach of
this Agreement if such party shall have given, to the extent reasonably
possible, not less than one calendar day prior notice to the other party, and
shall have attempted, to the extent reasonably possible, to clear such
announcement, statement, acknowledgment or disclosure with the other party.
Each party hereto agrees that it will not unreasonably withhold any such
consent or clearance.
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Section 7.4 AGREEMENTS TO COOPERATE.
(a) Microgyn shall take all reasonable actions necessary to comply
promptly with all legal requirements which may be imposed on Microgyn with
respect to the Merger and shall take all reasonable actions necessary to
cooperate promptly with and furnish information to Conceptus in connection
with any such requirements imposed upon Conceptus or Sub or any Subsidiary of
Conceptus or Sub in connection with the Merger. Microgyn shall take, all
reasonable actions necessary (i) to obtain (and will take all reasonable
actions necessary to promptly cooperate with Conceptus or Sub and their
Subsidiaries in obtaining) any consent, authorization, order or approval of,
or any exemption by, any Governmental Entity, or other third party, required
to be obtained or made by Microgyn (or by Conceptus or Sub or any of their
Subsidiaries) in connection with the Merger or the taking of any action
contemplated by this Agreement; (ii) to lift, rescind or mitigate the effect
of any injunction or restraining order or other order adversely affecting the
ability of Microgyn to consummate the transactions contemplated hereby; (iii)
to fulfill all conditions applicable to Microgyn pursuant to this Agreement;
and (iv) to prevent, with respect to a threatened or pending temporary,
preliminary or permanent injunction or other order, decree or ruling, the
entry, or promulgation thereof, as the case may be; PROVIDED, HOWEVER, that
Microgyn shall not be obligated to dispose of or hold separate all or a
material portion of the business or assets of Microgyn taken as a whole.
(b) Conceptus and Sub shall take, and shall cause their
Subsidiaries to take, all reasonable actions necessary to comply promptly
with all legal requirements which may be imposed on them or their
Subsidiaries with respect to the Merger and shall take all reasonable actions
necessary to cooperate promptly with and furnish information to Microgyn in
connection with any such requirements imposed upon Microgyn in connection
with the Merger. Conceptus and Sub shall take, and shall cause their
Subsidiaries to take, all reasonable actions necessary (i) to obtain (and
will take all reasonable actions necessary to promptly cooperate with
Microgyn in obtaining) any consent, authorization, order or approval of, or
any exemption by, any Governmental Entity, or other third party, required to
be obtained or made by Conceptus or Sub or any of their Subsidiaries (or by
Microgyn) in connection with the Merger or the taking of any action
contemplated by this Agreement; (ii) to lift, rescind or mitigate the effect
of any injunction or restraining order or other order adversely affecting the
ability of Conceptus or Sub to consummate the transactions contemplated
hereby; (iii) to fulfill all conditions applicable to Conceptus or Sub
pursuant to this Agreement; and (iv) to prevent, with respect to a threatened
or pending temporary, preliminary or permanent injunction or other order,
decree or ruling or statute, rule, regulation or executive order, the entry,
enactment or promulgation thereof, as the case may be; PROVIDED, HOWEVER,
that Conceptus shall not be obligated to, nor shall Conceptus be obligated to
cause its Subsidiaries to, dispose of or hold separate or otherwise
relinquish all or a portion of the business or assets of Conceptus and its
Subsidiaries, taken as a whole, or to change its or Microgyn's business in
any way.
(c) The parties hereto will consult and cooperate with one
another, and consider in good faith the views of one another, in connection
with any analyses, appearances, presentations, memoranda, briefs, arguments,
opinions and proposals made or submitted by or on behalf of any party hereto
in connection with proceedings under or relating to any other federal or
state antitrust or fair trade law.
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Section 7.5 STATE STATUTES. If any state takeover law shall become
applicable to the transactions contemplated by this Agreement, Conceptus and
its Board of Directors or Microgyn and its Board of Directors, as the case
may be, shall use their reasonable efforts to grant such approvals and take
such actions as are necessary so that the transactions contemplated by this
Agreement may be consummated as promptly as practicable on the terms
contemplated by this Agreement and otherwise to minimize the effects of such
state takeover law on the transactions contemplated by this Agreement.
Section 7.6 ADDITIONAL AGREEMENTS.
(a) In case at any time after the Effective Time of the Merger any
further action is reasonably necessary to carry out the purposes of this
Agreement or to vest the Surviving Corporation with full title to all
properties, assets, rights, approvals, immunities and franchises of Microgyn
and Sub, the proper officers and directors of each corporation party to this
Agreement shall take all such necessary action.
(b) In the event that the Commissioner declines to approve
Conceptus's Permit Application, or to grant or conduct the Hearing in
connection therewith, as described in Section 6.2 above, the parties agree to
negotiate in good faith toward an alternative solution with respect to the
issuance of the Merger Shares and the provision of acceptable avenues for
resale of such shares; PROVIDED, HOWEVER, that nothing in this paragraph
shall prohibit any party from exercising its rights in Article XIII
(Termination) below.
ARTICLE VIII
PROXY STATEMENT
Section 8.1 PREPARATION. Conceptus and Microgyn will cooperate in
the prompt preparation by Microgyn of a proxy statement for submission to the
shareholders of Microgyn in connection with the Microgyn Special Meeting (the
"PROXY STATEMENT").
Section 8.2 REPRESENTATIONS, WARRANTIES AND COVENANTS OF MICROGYN.
Microgyn represents and warrants to Conceptus that the Proxy Statement will
not, at the time of its issuance, at the time of the Microgyn Special Meeting
and at the Effective Time contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
made, in the light of the circumstances under which they were made, not
misleading except that no representation or warranty is made with respect to
information set forth in the Proxy Statement concerning Conceptus or any
Subsidiary thereof furnished by Conceptus or any such Subsidiary in writing
expressly for use in the Proxy Statement. Microgyn will promptly advise
Conceptus in writing if at any time prior to the Effective Time it obtains
knowledge of any facts that might make it necessary or appropriate to amend
or supplement the Proxy Statement in order to make the statements contained
or incorporated by reference therein not misleading or to comply with
applicable law.
Section 8.3 REPRESENTATIONS, WARRANTIES AND COVENANTS OF CONCEPTUS.
Conceptus represents and warrants to Microgyn that the information set forth
in the Proxy Statement
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concerning Conceptus or any Subsidiary thereof furnished by Conceptus or any
such Subsidiary to Microgyn in writing expressly for use in the Proxy
Statement will not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements made, in
the light of the circumstances under which they were made, not misleading.
Conceptus will promptly advise Microgyn in writing if at any time prior to
the Effective Time it obtains knowledge of any facts that might make it
necessary or appropriate to amend or supplement the Proxy Statement in order
to make the statements contained or incorporated by reference therein not
misleading or to comply with applicable law.
Section 8.4 MAILING TO SHAREHOLDERS; RECOMMENDATION OF MICROGYN
BOARD; MICROGYN SPECIAL MEETING. Microgyn will cause the Proxy Statement to
be mailed to Microgyn's shareholders as soon as practicable after the receipt
of the Permit from the Commissioner in accordance with applicable state law.
Microgyn will call the Microgyn Special Meeting to be held as promptly as
practicable for the purpose of obtaining the shareholder approval of this
Agreement and the Merger and shall use all reasonable efforts to obtain such
approval. Microgyn shall coordinate and cooperate with Conceptus with
respect to the timing of the Microgyn Special Meeting. Microgyn shall not
change the date of the Microgyn Special Meeting without the prior written
consent of Conceptus, nor shall Microgyn adjourn the Microgyn Special Meeting
without the prior written consent of Conceptus, unless such adjournment is
due to the lack of a quorum, in which case the Chairman of the Microgyn
Special Meeting shall announce at such meeting the time and place of the
adjourned meeting.
ARTICLE IX
CONDITIONS TO THE OBLIGATIONS OF
CONCEPTUS AND SUB
The obligations of Conceptus and Sub under this Agreement to consummate
the Merger will be subject to the satisfaction, or to the waiver by them in
the manner contemplated by Section 14.2, on or before the Closing, of the
following conditions:
Section 9.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Microgyn contained in this Agreement will be true and correct
on and as of the Effective Time, except for changes contemplated by this
Agreement and except for statements which address items only as of a
particular date, with the same force and effect as if made on and as of the
Effective Time, except, in all such cases, for such breaches, inaccuracies or
omissions which in the aggregate do not have a material adverse effect on
Microgyn's Business.
Section 9.2 PERFORMANCE OF COVENANTS. Microgyn shall have performed
and complied in all material respects with each and every covenant, agreement
and condition required by this Agreement to be performed or complied with by
it prior to or on the Closing.
Section 9.3 NO GOVERNMENTAL OR OTHER PROCEEDING OR LITIGATION. No
order of any court or administrative agency will be in effect which restrains
or prohibits any transaction contemplated hereby or which would limit or
otherwise affect in a material respect Conceptus's ownership of Microgyn; no
suit, action, or proceeding by any Governmental Entity or other
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person or entity, or investigation or inquiry by any Governmental Entity,
will be pending or, in the case of a Governmental Entity, threatened against
Conceptus, Sub or Microgyn, which challenges the validity or legality, or
seeks to restrain the consummation, of any transaction contemplated hereby,
including the Subsequent Merger, or which seeks to limit or otherwise affect
Conceptus's ownership of Microgyn, and no written advice shall have been
received by Conceptus, Sub, Microgyn or their respective counsel from any
Governmental Entity, and remain in effect, stating that an action or
proceeding will, if the Merger is consummated or sought to be consummated, be
filed seeking to invalidate or restrain the Merger or limit or otherwise
affect Conceptus's ownership of Microgyn and there shall not be any action
taken, or any statute, rule, regulation or order enacted, entered, enforced
or deemed applicable to the Merger, which would (a) make the consummation of
the Merger illegal, (b) render Conceptus, Sub or Microgyn unable to
consummate the Merger or (c) prohibit Conceptus', Sub's or Microgyn's
ownership or operation of all or any material portion of the business or
assets of Microgyn and its Subsidiaries, taken as a whole, as a result of the
Merger, or compel Conceptus, Sub or Microgyn to dispose of or hold separate
all or any material portion of the business or assets of Microgyn and its
Subsidiaries, taken as a whole.
Section 9.4 APPROVALS AND CONSENTS. The approval of the shareholders
of Microgyn referred to in Section 1.7 hereof, and all approvals and
authorizations of the Governmental Entities and other third parties referred
to in Sections 2.5, 2.6, 3.4 and 3.5 hereof and in the Microgyn Disclosure
Schedule shall have been obtained.
Section 9.5 OPINION OF COUNSEL. Conceptus shall have received from
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, counsel to Microgyn, an opinion dated the date of the
Closing and addressed to Conceptus, substantially in the form attached hereto
as EXHIBIT C.
Section 9.6 CERTIFICATE. Conceptus shall have received a certificate
signed by the Chief Executive Officer of Microgyn to the effect that the
conditions set forth in Section 9.1 and 9.2 have been met.
Section 9.7 DISSENTING SHARES. The aggregate number of Dissenting
Shares for which demands for payment are filed or may still be filed shall
not exceed ten percent (10%) of the outstanding shares of Microgyn Capital
Stock immediately prior to the Effective Time.
Section 9.8 NO MATERIAL ADVERSE CHANGE. There shall have been no
material adverse change in Microgyn's Business from the date hereof through
the Closing Date.
Section 9.9 RESIGNATION OF OFFICERS AND DIRECTORS. The officers and
directors of Microgyn in office immediately prior to the Effective Time shall
have resigned as officers and directors of the Surviving Corporation
effective as of the Effective Time.
Section 9.10 FIRPTA. At the Closing, Microgyn shall deliver to
Conceptus a properly executed statement conforming to the requirements of
Treasury Regulation Sections 1.897-2(h)(l)(i) and 1.445-2(c)(3) and Microgyn
further agrees to provide the notification to the Internal Revenue Service
required pursuant to Treasury Regulation Section 1.897-2(h)(2).
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Section 9.11 MICROGYN WARRANTS. All warrants, options or other
rights to purchase shares of Microgyn Capital Stock shall have terminated by
full exercise or cancellation thereof.
Section 9.12 EXCHANGE AND ESCROW AGREEMENT. Conceptus, the
Representatives, the Exchange Agent and the Escrow Agent shall have entered
into an Exchange and Escrow Agreement substantially in the form attached
hereto as EXHIBIT D.
Section 9.13 NON-COMPETITION AGREEMENTS. Conceptus shall have
received at or prior to the Closing from each person referenced in Section
4.11 of the Microgyn Disclosure Schedule a Non-Competition Agreement executed
by such person.
Section 9.14 MICROGYN ADVISORS. Microgyn shall have obtained from its
legal, accounting and financial advisors, and delivered to Conceptus, final
invoices for services rendered by such parties in connection with the Merger
which shall include the written representation of such advisors that such
invoices set forth all fees and expenses incurred by or owed to such advisors
by Microgyn in connection with the Merger.
Section 9.15 TERMINATION AGREEMENT. Microgyn shall have obtained from
the parties in interest thereto an executed Termination Agreement in
substantially the form attached hereto as EXHIBIT E.
Section 9.16 EMPLOYMENT AND CONSULTING AGREEMENTS. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
M.D. and ▇▇▇▇▇ ▇▇▇▇▇ shall have delivered at or prior to the Closing a duly
executed Consulting Agreement and Employment Agreement, respectively, in
substantially the forms attached hereto as EXHIBIT G and EXHIBIT H.
ARTICLE X
CONDITIONS TO MICROGYN'S OBLIGATIONS
The obligations of Microgyn under this Agreement to consummate the
Merger will be subject to the satisfaction, or to the waiver by Microgyn in
the manner contemplated by Section 14.2, on or before the Closing, of the
following conditions:
Section 10.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Conceptus and Sub contained in this Agreement will be true and
correct on and as of the Effective Time, with the same force and effect as if
made on and as of the Effective Time.
Section 10.2 PERFORMANCE OF COVENANTS. Conceptus and Sub shall have
performed and complied in all material respects with each and every covenant,
agreement and condition required by this Agreement to be performed or
complied with by each prior to or at the Closing.
Section 10.3 NO GOVERNMENTAL OR OTHER PROCEEDING OR LITIGATION. No
order of any court or administrative agency will be in effect which restrains
or prohibits any transaction contemplated hereby or which would limit or
otherwise affect in a material respect Conceptus's ownership of Microgyn; no
suit, action or proceeding by any Governmental Entity or other person or
entity or investigation by any Governmental Entity, will be pending or, in
the case of a
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Governmental Entity, threatened against Conceptus, Sub or Microgyn, which
challenges the validity or legality, or seeks to restrain the consummation,
of any transaction contemplated hereby, including the Subsequent Merger, or
which seeks to limit or otherwise affect Conceptus's ownership of Microgyn;
and no written advice shall have been received by Conceptus, Sub, Microgyn or
their respective counsel from any Governmental Entity, and remain in effect,
stating that an action or proceeding will, if the Merger is consummated or
sought to be consummated, be filed seeking to invalidate or restrain the
Merger or limit or otherwise affect Conceptus's ownership of Microgyn and
there shall not be any action taken, or any statute, rule, regulation or
order enacted, entered, enforced or deemed applicable to the Merger, which
would (a) make the consummation of the Merger illegal or (b) render
Conceptus, Sub or Microgyn unable to consummate the Merger.
Section 10.4 APPROVALS AND CONSENTS. The approval of the shareholders
of Microgyn referred to in Section 1.7 hereof, and all approvals and
authorizations of the Governmental Entities and other third parties referred
to in Sections 2.5, 2.6, 3.4 and 3.5 hereof shall have been obtained.
Section 10.5 OPINION OF COUNSEL. Microgyn shall have received from
Venture Law Group, A Professional Corporation, counsel to Conceptus and Sub,
an opinion dated the date of the Closing and addressed to Microgyn,
substantially in the form attached hereto as EXHIBIT F.
Section 10.6 CERTIFICATES. Microgyn shall have received certificates
signed by the Chief Financial Officer or Treasurer of each of Conceptus and
Sub to the effect that the conditions set forth in Sections 10.1 and 10.2
have been met.
Section 10.7 EMPLOYMENT AND CONSULTING AGREEMENTS. Conceptus shall
have delivered at or prior to the Closing a duly executed Consulting
Agreement in substantially the form attached hereto as EXHIBIT G with ▇▇▇▇▇
▇▇▇▇▇▇▇▇, M.D., and an Employment Agreement in substantially the form
attached hereto as EXHIBIT H with ▇▇▇▇▇ ▇▇▇▇▇.
ARTICLE XI
CLOSING
Unless this Agreement shall have been terminated and the Merger shall
have been abandoned pursuant to a provision of Article XIII hereof, a closing
(the "CLOSING") will be held, as soon as practicable after the satisfaction
or waiver of the conditions set forth in Articles IX and X, at the offices of
Venture Law Group, A Professional Corporation, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. At the date of the Closing (the "CLOSING DATE"), the
documents referred to in Articles IX and X will be exchanged by the parties
and, immediately thereafter, the Articles of Merger will be filed by Microgyn
and Sub with the Secretary of State of the Commonwealth of Massachusetts.
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ARTICLE XII
INDEMNITY AND ESCROW
Section 12.1 INDEMNIFICATION.
(a) From and after the Effective Time, the Microgyn Shareholders
shall indemnify and hold harmless Conceptus, Conceptus's Subsidiaries
(including the Subsidiaries of Microgyn) and the Surviving Corporation and
their respective affiliates, officers, directors, employees, representatives
and agents (collectively, the "INDEMNIFIED PARTIES") from and against any
claims, losses, liabilities, damages, arbitration or any legal actions
(including, without limitation, interest, penalties and reasonably incurred
costs, expenses and legal fees and expenses) (collectively, "LOSSES") arising
from or in connection with any breach of a representation, warranty, covenant
or agreement of Microgyn contained in this Agreement, including any Exhibits
or Schedules attached hereto, and the Articles of Merger, which breach
becomes known to Conceptus within eighteen (18) months following the
Effective Date. Losses in each case shall be net of the amount of any
insurance proceeds, indemnity and contribution actually recovered by
Conceptus or the Surviving Corporation.
(b) The Microgyn Shareholders shall not be obligated to indemnify
the Indemnified Parties pursuant to this Article XII with respect to any
Losses pursuant to Section 12.1(a) until the aggregate amount of such Losses
exceeds fifty thousand dollars ($50,000) (the "BASKET AMOUNT"), whereupon the
Microgyn Shareholders shall be obligated to indemnify the Indemnified Parties
for all of such Losses including and in excess of such amount.
Section 12.2 ESCROW OF SHARES. On or before the date six months
following the Effective Time, the Escrow Shares will be registered in the
name of such nominee as the Escrow Agent shall determine, and will be
deposited with an escrow agent appointed by Conceptus and reasonably
acceptable to Microgyn (or, if such the identity of such agent shall need to
change following the Effective Time, other institution acceptable to
Conceptus and the Representatives (as defined in Section 12.6)), such agent
being referred to herein as the "ESCROW AGENT" and such deposit being
referred to as the "ESCROW FUND."
Section 12.3 REMEDIES. The Escrow Fund provided for herein is
intended by the parties to this Agreement to apply to breaches of any
representation, warranty, covenant or agreement of Microgyn contained in this
Agreement, including any Exhibits or Schedules attached hereto, and the
Articles of Merger, and, resort to the Escrow Fund shall be the exclusive
remedy of the Indemnified Parties for such breaches; PROVIDED, HOWEVER, that
the restrictions set forth herein do not limit any other potential remedies
of Conceptus for any fraud or willful deceit by Microgyn, its officers,
directors, employees, agents or affiliates.
Section 12.4 TERMS OF ESCROW.
(a) MAINTENANCE AND REDUCTION FOR CLAIMS. The Escrow Fund will be
governed by the terms set forth herein and in the Exchange and Escrow
Agreement and maintained at Conceptus's sole cost and expense. The
obligation of Conceptus to issue the
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Escrow Shares otherwise issuable in connection with the Merger shall be
subject to reduction to satisfy the Microgyn Shareholders' obligations under
this Article XII. Claims for Losses made by Conceptus or any other
Indemnified Party that (a) are accepted as valid by the Representatives (as
defined in Section 12.6), or (b) are determined to be valid through court
proceedings or which otherwise are allowed as described in this Article XII,
shall reduce the number of Escrow Shares issuable to the Microgyn
Shareholders by the number of Escrow Shares (rounded to the closest whole
number) equal to the amount of such Losses divided by the deemed Initial
Average Price for purposes of Section 1.3(b) above. As to each Microgyn
Shareholder, any such reduction shall be made on a pro rata basis based upon
the Escrow Interest (as defined below) of each Microgyn Shareholder. The
interest of each Microgyn Shareholder in the Escrow Shares shall not be
assignable or transferable in any manner except by operation of law, by will
or by the laws of descent until such Escrow Shares are issued to the Microgyn
Shareholders. Claims for Losses made by Conceptus or any other Indemnified
Party prior to the establishment of the Escrow Fund shall accrue and apply
toward the Escrow Fund once established.
(b) DELIVERY OF ESCROW SHARES. As soon as practicable after
receipt of written notice from Conceptus that the Escrow Expiration Date (as
defined below) has occurred, the Escrow Agent shall deliver the Escrow
Shares, after giving effect to the reductions in or holdbacks of the number
of Escrow Shares deliverable to Conceptus pursuant to Section 12.7 and, if
applicable, Section 12.4(c) below. The "ESCROW EXPIRATION DATE" shall mean a
date on or before the date eighteen (18) months following the Effective Date,
as determined by Conceptus. The period commencing upon the Closing Date and
ending upon the Escrow Expiration Date shall be referred to as the "ESCROW
PERIOD" for the Escrow Fund. Unless extended pursuant to Section 12.4(c)
hereof, the Excrow Fund shall terminate on the Escrow Expiration Date.
(c) EXTENSION OF ESCROW. Notwithstanding Section 12.4(b), to the
extent Conceptus has made a claim which has not been resolved in accordance
with Section 12.7 below on or before the Escrow Expiration Date, the Escrow
Agent shall withhold the issuance of and maintain in the Escrow Fund such
number of Escrow Shares as instructed in writing by Conceptus and the
Representatives and upon resolution of such claim such withheld Escrow
Shares, after giving effect to any appropriate further reduction under
Section 12.7(b), shall be transferred by the Escrow Agent into the respective
names of the Microgyn Shareholders and the Escrow Fund shall terminate.
(d) PROTECTION OF ESCROW FUND. The Escrow Agent shall hold and
safeguard the Escrow Fund during the Escrow Period, shall treat such Escrow
Fund as a trust fund in accordance with the terms of this Agreement and not
as the property of Conceptus and shall hold and dispose of the Escrow Fund
only in accordance with the terms hereof and of the Exchange and Escrow
Agreement.
(e) DISTRIBUTIONS; VOTING.
(i) Any shares of Conceptus Common Stock or other equity
securities issued or distributed by Conceptus (including shares issued upon a
stock split) ("NEW SHARES") in respect of shares of Conceptus Common Stock in
the Escrow Fund which have not been released
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from the Escrow Fund shall be added to the Escrow Fund and become a part
thereof. New Shares issued in respect of shares of Conceptus Common Stock
which have been released from the Escrow Fund shall not be added to the
Escrow Fund, but shall be distributed to the holders thereof. When and if
cash dividends on shares of Conceptus Common Stock in the Escrow Fund shall
be declared and paid, they shall not be added to the Escrow Fund but shall be
paid to the Microgyn Shareholders on whose behalf the Escrow Shares are held.
(ii) Each Microgyn Shareholder shall have voting rights
with respect to the Escrow Shares held on behalf of such Microgyn Shareholder
(and on any voting securities added to the Escrow Fund in respect of such
Escrow Shares) so long as such Escrow Shares are held in the Escrow Fund.
Section 12.5 "ESCROW INTEREST" DEFINED. Each Microgyn Shareholder's
"ESCROW INTEREST" shall be a fraction calculated by dividing (a) the maximum
number of Escrow Shares potentially issuable to such Microgyn Shareholder by
(b) the maximum aggregate number of Escrow Shares potentially issuable to all
Microgyn Shareholders.
Section 12.6 MICROGYN SHAREHOLDERS' REPRESENTATIVES. During the Escrow
Period, the Microgyn Shareholders shall be represented hereunder by ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, M.D., and ▇▇▇▇ ▇▇▇▇▇▇▇▇ or their designees (the "REPRESENTATIVES").
The terms under which the Representatives will act will be as set forth in
an agreement that will be approved at the Microgyn Special Meeting, which
will be binding on all Microgyn Shareholders, irrespective of whether it is
executed by such Microgyn Shareholders.
Section 12.7 MECHANICS OF MAKING CLAIMS.
(a) In the event that any written claim or demand for which
Conceptus or any other Indemnified Party is entitled to indemnification is
sought against Conceptus or sought to be collected from Conceptus or any
other Indemnified Party by a third party, promptly after the assertion of any
such claim or demand, or otherwise promptly upon discovery of any other Loss
for which Conceptus or any other Indemnified Party seeks indemnification,
Conceptus or such other Indemnified Party shall notify the Escrow Agent and
the Representatives of such claim, demand or Loss; PROVIDED, HOWEVER, that
the failure promptly to give such notice shall not affect Conceptus's rights
hereunder except to the extent that such failure shall adversely affect the
Microgyn Shareholders or their rights hereunder. Conceptus shall advise the
Representatives of all material facts relating to such assertion within the
knowledge of Conceptus, and shall afford the Representatives, in the event
that they do not assume such defense pursuant to Section 12.7(d) below, the
opportunity to participate, at their own expense, in the defense against such
claims for liability, provided that Conceptus shall control such defense.
(b) As soon as practicable, but no earlier than the date 20
business days following the later of receipt by the Escrow Agent and the
Representatives of written notice from Conceptus or any other Indemnified
Party of a claim of indemnification pursuant to this Article XII, including a
brief description of the facts upon which such claim is based and the amount
of the losses with respect to such claim, the Escrow Agent shall, subject to
the provisions of Section 12.7(c), deliver to Conceptus or such other
Indemnified Party out of the Escrow Fund, that
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number of Escrow Shares (rounded to the closest whole number) equal to the
amount of such losses divided by the Initial Average Price for purposes of
Section 1.3(b) above. Conceptus shall deliver to the Escrow Agent evidence
of delivery of the written notice to the Representatives, and the Escrow
Agent shall be entitled to rely on such evidence for purposes of calculation
of the date on which the transfer of Ecrow Shares shall be made under this
Section 12.7(b).
(c) If the Representatives shall, in good faith, notify Conceptus
and the Escrow Agent in writing within such 20 business day period of their
objection to a claim of indemnification, the Escrow Shares shall not be
delivered to Conceptus or any other Indemnified Party until the rights of the
Microgyn Shareholders and Conceptus or such other Indemnified Party with
respect thereto have been agreed upon between the Representatives and
Conceptus or such other Indemnified Party or until such rights are finally
determined by a court of competent jurisdiction in San Francisco, California.
The Escrow Agent shall be entitled to act in accordance with such
determination and to make or withhold payments out of the Escrow Fund in
accordance therewith. The costs and expenses (including reasonable counsel
fees) of any such court proceeding shall be borne by the party against whom
the award is rendered or, in the case of an award of a portion of the amount
claimed, will be shared equally by Conceptus or such other Indemnified Party
and the Microgyn Shareholders.
(d) Conceptus shall have the right (i) to defend, settle or
compromise any claim or liability subject to indemnification under this
Article XII, and (ii) to be indemnified from and against all Losses resulting
therefrom, UNLESS the Representatives, within 20 calendar days after
receiving such notice of the claim or liability in accordance with Section
12.7(a) notify Conceptus in writing that they intend to assume the defense
against such claim or liability and in fact promptly do so.
(e) Except as otherwise provided in Section 12.7(d), the Microgyn
Shareholders shall not be liable under this Article XII for any settlement
effected without the prior consent of the Representatives (which consent may
not be unreasonably withheld) of any claim, liability or proceeding for which
indemnity may be sought hereunder. In the event that the Representatives
assume the defense of any claim, liability or proceeding pursuant to Section
12.7(d), the Representatives may not settle any such claim liability or
proceeding without the prior consent of Conceptus (which consent may not be
unreasonably withheld).
Section 12.8 ESCROW AGENT'S DUTIES.
(a) The Escrow Agent shall be obligated only for the performance
of such duties as are specifically set forth in this Article XII, and as set
forth in any additional written escrow instructions which the Escrow Agent
may receive after the date of this Agreement which are signed by an officer
of Conceptus and by each of the Representatives, and may rely and shall be
protected in relying or refraining from acting on any instrument reasonably
believed to be genuine and to have been signed or presented by the proper
party or parties. The Escrow Agent shall not be liable for any act done or
omitted hereunder as Escrow Agent while acting in good faith and in the
exercise of reasonable judgment, and any act done or omitted pursuant to the
advice of counsel shall be conclusive evidence of such good faith.
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(b) The Escrow Agent is hereby expressly authorized to disregard
any and all warnings given by any of the parties hereto or by any other
person, excepting only orders or process of courts of law, and is hereby
expressly authorized to comply with and obey orders, judgments or decrees of
any court. In case the Escrow Agent obeys or complies with any such order,
judgment or decree of any court, the Escrow Agent shall not be liable to any
of the parties hereto or to any other person by reason of such compliance,
notwithstanding any such order, judgment or decree being subsequently
reversed, modified, annulled, set aside, vacated or found to have been
entered without jurisdiction.
(c) The Escrow Agent shall not be liable in any respect on account
of the identity, authority or rights of the parties executing or delivering
or purporting to execute or deliver this Agreement or any documents or papers
deposited or called for hereunder.
(d) The Escrow Agent shall not be liable for the expiration of any
rights under any statute of limitations with respect to this Agreement or any
documents deposited with the Escrow Agent.
(e) The Escrow Agent may resign at any time upon giving at least
30 days written notice to Conceptus and the Representatives pursuant to the
provisions of this Agreement; provided, however, that no such resignation
shall become effective until the appointment of a successor escrow agent
which shall be accomplished as follows: Conceptus and the Representatives
shall use their best efforts to mutually agree upon a successor agent within
30 days after receiving such notice. If the parties fail to agree upon a
successor transfer agent within such time, Conceptus shall have the right to
appoint a successor escrow agent authorized to do business in California. The
successor escrow agent selected in the preceding manner shall execute and
deliver an instrument accepting such appointment and it shall thereupon be
deemed the Escrow Agent hereunder and it shall without further acts be vested
with all the estates, properties, rights, powers, and duties of the
predecessor Escrow Agent as if originally named as Escrow Agent. Thereafter,
the predecessor Escrow Agent shall be discharged for any further duties and
liabilities under this Agreement.
ARTICLE XIII
TERMINATION
Section 13.1 TERMINATION AND ABANDONMENT. This Agreement may be
terminated and the Merger may be abandoned before the Effective Time,
notwithstanding any approval and adoption of this Agreement by the
shareholders of Microgyn or by Conceptus in its capacity as sole shareholder
of Sub:
(a) by the mutual written consent of the Boards of Directors of
Conceptus and Microgyn;
(b) by Conceptus or by Microgyn at any time after December 31,
1996 (or such later date as shall have been agreed to in writing by them,
acting through their respective Boards of Directors) if the Merger for any
reason has not by such date become effective;
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PROVIDED, HOWEVER, that this provision shall not be available to any party
whose willful failure to fulfill any obligation under this Agreement has been
the cause of, or resulted in, the failure of the Effective Time to occur on
or before such date;
(c) by either Conceptus or Microgyn if a permanent injunction or
other order by any federal or state court would make illegal or otherwise
restrain or prohibit the consummation of the Merger shall have been issued
and shall have become final and nonappealable; or
(d) by Conceptus if there has been a material breach of any
representation, warranty, covenant or agreement contained in this Agreement
on the part of Microgyn and such breach has not been cured within five
business days after written notice from Conceptus to Microgyn (PROVIDED, that
Conceptus is not in material breach of the terms of this Agreement; and
PROVIDED FURTHER, that no cure period shall be required for a breach which by
its nature cannot be cured);
(e) by Microgyn if there has been a material breach of any
representation, warranty, covenant or agreement contained in this Agreement
on the part of Conceptus or Sub and such breach has not been cured within
five business days after written notice from Microgyn to Conceptus or Sub
(PROVIDED, that Microgyn is not in material breach of the terms of this
Agreement; and PROVIDED FURTHER, that no cure period shall be required for a
breach which by its nature cannot be cured); or
(f) by Conceptus or Microgyn, if the required approval of the
shareholders of Microgyn contemplated by this Agreement shall not have been
obtained by reason of the failure to obtain the required vote upon a vote
taken at the Microgyn Special Meeting or at any adjournment thereof to the
extent determined to be necessary subsequent to the date hereof
notwithstanding Microgyn's reasonable best efforts to ensure that such vote
was obtained.
The power of termination provided for by this Section 13 may be
exercised for Conceptus or Microgyn only by their respective Boards of
Directors and will be effective only after written notice thereof, signed on
behalf of the party for which it is given by its Chief Executive Officer or
other duly authorized officer, shall have been given to the other and all
fees and expenses required to be paid under Section 7.2, if any, shall have
been paid. If this Agreement is terminated in accordance with this Section
13.1, the Merger will be abandoned without further action by Conceptus, Sub
or Microgyn.
Section 13.2 EFFECT OF TERMINATION. In the event of termination and
abandonment of the Merger pursuant to Section 13.1, none of Conceptus, Sub,
or Microgyn shall have any liability or further obligation to any of the
others except as provided in Sections 7.1 and 7.2 and except for any breach
of this Agreement.
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ARTICLE XIV
MISCELLANEOUS PROVISIONS
Section 14.1 AMENDMENT AND MODIFICATION. To the fullest extent
provided by applicable law, this Agreement may be amended, modified and
supplemented with respect to any of the terms contained herein by mutual
consent of the respective Boards of Directors of Conceptus, Sub and Microgyn
or by their respective officers duly authorized by such Boards of Directors
by an appropriate written instrument executed at any time prior to the
Effective Time.
Section 14.2 WAIVER OF COMPLIANCE. To the fullest extent permitted by
law, each of Conceptus, Sub and Microgyn may, pursuant to action by its
respective Board of Directors, or its respective officers duly authorized by
its Board of Directors, by an instrument in writing extend the time for or
waive the performance of any of the obligations of the others or waive
compliance by the others with any of the covenants, or waive any of the
conditions to its obligations, contained herein; PROVIDED, HOWEVER, that the
obtaining of the approval of the shareholders of Microgyn referred to in
Section 1.7 hereof will not be waivable. No such extension of time or waiver
will operate as a waiver of, or estoppel with respect to, any subsequent or
other failure.
Section 14.3 NO SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
respective representations and warranties of each party hereto contained
herein will not be deemed to be waived or otherwise affected by any
investigation made by the other party hereto. Such representations and
warranties will be extinguished by and will not survive the Effective Time,
except with respect to the remedies set forth in Article XII and except for
remedies that may be available for fraud.
Section 14.4 NOTICES. All notices, requests, demands and other
communications required or permitted hereunder will be in writing and will be
deemed to have been duly given when delivered by hand or when mailed by
registered or certified mail, postage prepaid, or when given by facsimile
transmission (promptly confirmed in writing), as follows:
(a) If to Conceptus or Sub:
Conceptus, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President and
Chief Executive Officer
with a copy to:
Venture Law Group,
A Professional Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
or to such other person as Conceptus or Sub designates in writing
delivered to Microgyn in the manner provided in this
Section 14.4;
(b) If to Microgyn:
Microgyn, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Vice President
with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
or to such other person as Microgyn designates in writing, delivered to
Conceptus in the manner provided in this Section 14.4.
Section 14.5 ASSIGNMENT. This Agreement and all of the provisions
hereof will be binding upon and inure to the benefit of the parties hereto
(and in the case of Section 14.14 hereof, the persons intended to be
benefited thereby) and their respective successors and permitted assigns, but
neither this Agreement nor any of the rights, interests or obligations
hereunder may be assigned by any of the parties hereto without the prior
written consent of the other parties.
Section 14.6 GOVERNING LAW. This Agreement and the legal relations
between the parties hereto will be governed by and construed in accordance
with the laws of the State of California, without giving effect to the choice
of law principles thereof; PROVIDED, HOWEVER, that the law governing the
fiduciary duties of each party hereto and their respective boards of
directors and the law governing any other matters of internal corporate
governance of any of Conceptus, Sub or Microgyn shall be the law of their
respective jurisdictions of incorporation.
Section 14.7 PARTIES IN INTEREST. Nothing expressed or implied in
this Agreement is intended or will be construed to confer upon or give to any
person, firm or corporation other than the parties hereto any rights or
remedies under or by reason of this Agreement or any transaction contemplated
hereby, except as specifically provided in this Agreement.
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Section 14.8 COUNTERPARTS. This Agreement may be executed in two or
more counterparts and by the different parties hereto on separate
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
Section 14.9 HEADINGS AND REFERENCES. The headings of the sections
and articles of this Agreement are inserted for convenience of reference only
and will not by themselves determine the interpretation of this Agreement.
All references herein to sections and articles are to sections and articles
of this Agreement, unless otherwise indicated.
Section 14.10 ENTIRE AGREEMENT. This Agreement, including the Microgyn
Disclosure Schedule and the Conceptus Disclosure Schedule, the schedules and
exhibits and other documents referred to herein which form a part hereof,
contains the entire understanding of the parties hereto in respect of the
subject matter contained herein. There are no restrictions, promises,
representations, warranties, covenants, or undertakings with respect to the
subject matter contained herein, other than those expressly set forth or
referred to herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter,
including without limitation the Letter of Intent dated September 20, 1996
between Conceptus and Microgyn.
Section 14.11 SEVERABILITY. If any provision of this Agreement, or the
application thereof, will for any reason and to any extent be invalid or
unenforceable, the remainder of this Agreement and application of such
provision to other persons or circumstances will be interpreted so as
reasonably to effect the intent of the parties hereto. The parties further
agree to replace such invalid or unenforceable provision of this Agreement
with a valid and enforceable provision that will achieve, to the extent
possible, the economic, business and other purposes of the invalid and
unenforceable provision.
Section 14.12 OTHER REMEDIES. Except as otherwise provided herein, any
and all remedies herein expressly conferred upon a party will be deemed
cumulative with and not exclusive of any other remedy conferred hereby or by
law or equity on such party, and the exercise of any one remedy will not
preclude the exercise of any other.
Section 14.13 FURTHER ASSURANCES. Each party agrees to cooperate fully
with the other parties and to execute such further instruments, documents and
agreements and to give such further written assurances as may be reasonably
requested by any other party to evidence and reflect the transactions
described herein and contemplated hereby and to carry into effect the intents
and purposes of this Agreement.
Section 14.14 ABSENCE OF THIRD PARTY BENEFICIARY RIGHTS. Other than
with respect to the Microgyn Shareholders, who are intended third-party
beneficiaries to this Agreement, no provision of this Agreement is intended,
nor will be interpreted, to provide to create any third party beneficiary
rights or any other rights of any kind in any client, customer, affiliate,
employee, partner or any party hereto or any other person or entity unless
specifically provided otherwise herein, and, except as so provided, all
provisions hereof will be personal solely between the parties to this
Agreement.
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Section 14.15 MUTUAL DRAFTING. This Agreement is the joint product of
Conceptus and Microgyn, and each provision hereof has been subject to the
mutual consultation, negotiation and agreement of Conceptus and Microgyn, and
shall not be construed for or against any party hereto.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement and
Plan of Reorganization to be duly executed under seal as of the date and year
first written above.
MICROGYN, INC. CONCEPTUS, INC.
By: By:
---------------------------------- ------------------------------
President
By: Title:
---------------------------------- ---------------------------
Treasurer
CPTS ACQUISITION CORPORATION
By:
------------------------------
President
By:
------------------------------
Treasurer
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FIRST AMENDMENT TO
AGREEMENT AND PLAN OF REORGANIZATION
This First Amendment (the "AMENDMENT") to the Agreement and Plan of
Reorganization (the "AGREEMENT") dated as of October 29, 1996 by and between
Conceptus, Inc., a Delaware corporation ("CONCEPTUS"), Microgyn, Inc., a
Massachusetts corporation ("MICROGYN") and CPTS Acquisition Corporation, a
Massachusetts corporation and a wholly-owned subsidiary of Conceptus ("SUB")
is made and entered into as of November 7, 1996. Certain capitalized terms
used herein and not specifically defined herein shall have the meanings
ascribed to such terms in the Agreement.
RECITAL
Conceptus, Microgyn and Sub desire to amend the Agreement to modify
certain terms regarding additional agreements among the parties in connection
with the transferability and resaleability of the Merger Shares.
NOW THEREFORE, Conceptus, Microgyn and Sub, intending to be legally
bound, hereby agree as follows:
1. AMENDMENT OF AGREEMENT. Section 7.6(b) of the Agreement shall be
amended and restated in its entirety as follows:
"In the event that the Commissioner does or did not have the
authority to hold a Hearing with respect to the terms of the Merger
as described in Section 6.2 above, or in the event that the
Commissioner declines to grant or conduct the Hearing or issue to
Conceptus a Permit covering the Merger Shares, as a result of which
the exemption under Section 3(a)(10) of the Securities Act would be
unavailable with respect to the Merger, (i) Conceptus shall have
the option of substituting for any required payment of Merger
Shares an equivalent amount of cash, and (ii) Conceptus, Microgyn
and Sub (if such action occurs prior to the Closing) or Conceptus
and the Representatives (if such action occurs after the Closing)
agree to negotiate in good faith toward an alternative solution
with respect to the issuance of Merger Shares and the provision of
acceptable avenues for resale of such shares."
2. EFFECT OF AMENDMENT. Except as amended as set forth above, the
Agreement shall continue in full force and effect without change.
3. COUNTERPARTS. This Amendment may be executed in one or more
counterparts, and by different parties to this Amendment in separate
counterparts, each of which when executed shall be deemed to be an original
but all of which when taken together shall constitute one and the same
agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed under seal as of the date and year first written above.
MICROGYN, INC. CONCEPTUS, INC.
By: By:
---------------------------------- ------------------------------
President
By: Title:
---------------------------------- ---------------------------
Treasurer
CPTS ACQUISITION CORPORATION
By:
----------------------------------
President
By:
----------------------------------
Treasurer
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