EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
BY AND AMONG
ANGIOTECH PHARMACEUTICALS, INC.,
CHARDONNAY ACQUISITION CORP.
AND
COHESION TECHNOLOGIES, INC.
DATED AS OF SEPTEMBER 27, 2002
TABLE OF CONTENTS
Article I The Merger....................................................................................... 1
1.1 THE MERGER....................................................................................... 1
1.2 CLOSING; EFFECTIVE TIME.......................................................................... 2
1.3 EFFECTS OF THE MERGER............................................................................ 2
1.4 CERTIFICATE OF INCORPORATION; BYLAWS............................................................. 2
1.5 DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION.............................................. 2
Article II Conversion of Shares............................................................................. 3
2.1 CONVERSION OF STOCK.............................................................................. 3
2.2 COHESION OPTIONS; COHESION PURCHASE PLANS; COHESION WARRANTS..................................... 4
2.3 EXCHANGE OF STOCK CERTIFICATES................................................................... 5
2.4 LOST, STOLEN OR DESTROYED CERTIFICATES........................................................... 6
2.5 TAX CONSEQUENCES................................................................................. 6
Article III Representations and Warranties of Cohesion....................................................... 7
3.1 ORGANIZATION, ETC................................................................................ 7
3.2 AUTHORITY RELATIVE TO THIS AGREEMENT............................................................. 8
3.3 NO VIOLATIONS, ETC............................................................................... 8
3.4 BOARD RECOMMENDATION............................................................................. 9
3.5 FAIRNESS OPINION................................................................................. 9
3.6 CAPITALIZATION................................................................................... 9
3.7 SEC FILINGS...................................................................................... 10
3.8 FINANCIAL STATEMENTS............................................................................. 11
3.9 ABSENCE OF UNDISCLOSED LIABILITIES............................................................... 11
3.10 ABSENCE OF CHANGES OR EVENTS..................................................................... 11
3.11 SUBSIDIARIES..................................................................................... 13
3.12 NEUCOLL, INC..................................................................................... 13
3.13 LITIGATION....................................................................................... 14
3.14 INSURANCE........................................................................................ 14
3.15 CONTRACTS AND COMMITMENTS........................................................................ 14
3.16 LABOR MATTERS; EMPLOYMENT AND LABOR CONTRACTS.................................................... 16
3.17 COMPLIANCE WITH LAWS............................................................................. 16
3.18 INTELLECTUAL PROPERTY RIGHTS..................................................................... 18
3.19 TAXES............................................................................................ 20
3.20 EMPLOYEE BENEFIT PLANS; ERISA.................................................................... 21
3.21 ENVIRONMENTAL MATTERS............................................................................ 23
3.22 AFFILIATES....................................................................................... 26
3.23 FINDERS OR BROKERS............................................................................... 26
3.24 REGISTRATION STATEMENT; PROXY STATEMENT/PROSPECTUS............................................... 26
3.25 PROPERTY; EQUIPMENT; LEASEHOLD................................................................... 26
3.26 AMENDMENT TO RIGHTS AGREEMENT.................................................................... 27
Article IV Representations and Warranties of Angiotech and Merger Sub....................................... 27
4.1 ORGANIZATION, ETC................................................................................ 27
i
INDEX OF DEFINED TERMS
(CONTINUED)
4.2 AUTHORITY RELATIVE TO THIS AGREEMENT............................................................. 28
4.3 NO VIOLATIONS, ETC............................................................................... 28
4.4 CAPITALIZATION................................................................................... 29
4.5 REGISTRATION STATEMENT; PROXY STATEMENT/PROSPECTUS............................................... 29
4.6 SEC FILINGS...................................................................................... 30
4.7 FINANCIAL STATEMENTS............................................................................. 30
4.8 ABSENCE OF UNDISCLOSED LIABILITIES............................................................... 30
4.9 ABSENCE OF CHANGES OR EVENTS..................................................................... 30
4.10 LITIGATION....................................................................................... 31
4.11 COMPLIANCE WITH LAWS............................................................................. 31
4.12 ENVIRONMENTAL MATTERS............................................................................ 32
4.13 INTELLECTUAL PROPERTY RIGHTS..................................................................... 34
4.14 OWNERSHIP OF MERGER SUB; NO PRIOR ACTIVITIES..................................................... 36
Article V Covenants........................................................................................ 36
5.1 CONDUCT OF BUSINESS DURING INTERIM PERIOD........................................................ 36
5.2 NO SOLICITATION.................................................................................. 38
5.3 ACCESS TO INFORMATION............................................................................ 40
5.4 STOCKHOLDER MEETING; REGISTRATION STATEMENT; BOARD RECOMMENDATIONS............................... 40
5.5 COMMERCIALLY REASONABLE EFFORTS.................................................................. 42
5.6 PUBLIC ANNOUNCEMENTS............................................................................. 42
5.7 NOTIFICATION OF CERTAIN MATTERS.................................................................. 43
5.8 INDEMNIFICATION.................................................................................. 43
5.9 AFFILIATE AGREEMENTS............................................................................. 44
5.10 STOCK EXCHANGE LISTING........................................................................... 44
5.11 RESIGNATION OF DIRECTORS AND OFFICERS............................................................ 44
5.12 CONSENTS OF ANGIOTECH'S AND COHESION'S ACCOUNTANTS............................................... 44
5.13 COHESION VOTING AGREEMENTS....................................................................... 45
5.14 FORM S-8......................................................................................... 45
5.15 NOTIFICATION OF CERTAIN MATTERS.................................................................. 45
5.16 SEC FILINGS...................................................................................... 45
5.17 EMPLOYEE BENEFIT MATTERS......................................................................... 46
5.18 RIGHTS AGREEMENT................................................................................. 46
5.19 TAX MATTERS...................................................................................... 46
Article VI Conditions to the Obligations of Each Party...................................................... 47
6.1 REGISTRATION STATEMENT........................................................................... 47
6.2 COHESION STOCKHOLDER APPROVAL.................................................................... 47
6.3 LISTING OF ADDITIONAL SHARES..................................................................... 47
6.4 GOVERNMENTAL CLEARANCES.......................................................................... 47
6.5 TAX MATTERS...................................................................................... 48
6.6 STATUTE OR DECREE................................................................................ 48
Article VII Conditions to the Obligations of Cohesion and Angiotech.......................................... 48
7.1 ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF COHESION............................................. 48
7.2 ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF ANGIOTECH AND MERGER SUB............................. 49
ii
INDEX OF DEFINED TERMS
(CONTINUED)
Article VIII Termination...................................................................................... 49
8.1 TERMINATION...................................................................................... 49
8.2 NOTICE OF TERMINATION; EFFECT OF TERMINATION..................................................... 51
8.3 FEES AND EXPENSES................................................................................ 51
Article IX Miscellaneous.................................................................................... 53
9.1 AMENDMENT AND MODIFICATION....................................................................... 53
9.2 WAIVER OF COMPLIANCE; CONSENTS................................................................... 54
9.3 SURVIVAL; INVESTIGATIONS......................................................................... 54
9.4 NOTICES.......................................................................................... 54
9.5 ASSIGNMENT; THIRD PARTY BENEFICIARIES............................................................ 55
9.6 GOVERNING LAW; JURISDICTION...................................................................... 55
9.7 WAIVER OF JURY TRIAL............................................................................. 55
9.8 COUNTERPARTS..................................................................................... 56
9.9 SEVERABILITY..................................................................................... 56
9.10 INTERPRETATION................................................................................... 56
9.11 ENTIRE AGREEMENT................................................................................. 56
9.12 DEFINITION OF "LAW".............................................................................. 56
9.13 RULES OF CONSTRUCTION............................................................................ 56
iii
INDEX OF DEFINED TERMS
"Acquisition Proposal"........................................ Section 5.2(a)
"Acquisition Transaction"..................................... Section 5.2(a)
"Action"...................................................... Section 3.13(a)
"Affiliates".................................................. Section 3.22
"Agreement"................................................... Preamble
"Antitrust Division".......................................... Section 5.5(a)
"Angiotech"................................................... Preamble
"Angiotech Balance Sheet"..................................... Section 4.7
"Angiotech Certificates"...................................... Section 2.1(c)
"Angiotech Closing Value"..................................... Section 2.1(f)
"Angiotech Common Stock"...................................... Recitals
"Angiotech Disclosure Statement".............................. Article IV
"Angiotech Expenses".......................................... Section 8.3(b)(i)
"Angiotech Financial Statements".............................. Section 4.7
"Angiotech IP Rights"......................................... Section 4.13(b)
"Angiotech Material Adverse Effect"........................... Section 4.1(a)
"Angiotech Permits"........................................... Section 4.11(b)
"Angiotech Real Property"..................................... Section 4.12(a)(iv)
"Angiotech Reference Price"................................... Section 2.1
"Angiotech SEC Reports"....................................... Section 4.6
"Angiotech Subsidiaries"...................................... Section 4.1(a)
"Angiotech Termination Fee"................................... Section 8.3(c)(i)
"Angiotech Triggering Event".................................. Section 8.1
"Assumed Cohesion Options".................................... Section 2.2(a)
"Assumed Cohesion Warrants"................................... Section 2.2(c)
"Business Day"................................................ Section 1.2
"CDAPCA"...................................................... Section 3.17(b)
"CERCLA"...................................................... Section 3.21(a)(iii)
"CERCLIS"..................................................... Section 3.21(b)(vii)
"Certificate of Merger"....................................... Section 1.2
"Cohesion".................................................... Preamble
"Cohesion Acquisition"........................................ Section 8.3(b)
"Cohesion Affiliate Agreement"................................ Section 5.9
"Cohesion Balance Sheet"...................................... Section 3.8
"Cohesion Certificate"........................................ Section 2.3(c)
"Cohesion Common Stock"....................................... Recitals
"Cohesion Contract"........................................... Section 3.15(b)
"Cohesion Disclosure Statement"............................... Article III
"Cohesion Expenses"........................................... Section 8.3(c)(i)
"Cohesion Financial Statements"............................... Section 3.8
"Cohesion IP Rights".......................................... Section 3.18(a)
"Cohesion Material Adverse Effect"............................ Section 3.1(a)
"Cohesion Options"............................................ Section 2.2(a)
"Cohesion Permits"............................................ Section 3.17(b)
"Cohesion Preferred Stock".................................... Section 3.6(a)
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INDEX OF DEFINED TERMS
(CONTINUED)
"Cohesion Purchase Plan"...................................... Section 2.2(b)
"Cohesion Real Property"...................................... Section 3.21(b)(iv)
"Cohesion SEC Reports"........................................ Section 3.7
"Cohesion Stock Plans"........................................ Section 2.2(a)
"Cohesion Stockholder Meeting"................................ Section 5.4(a)
"Cohesion Termination Fee".................................... Section 8.3(b)(i)
"Cohesion Triggering Event"................................... Section 8.1
"Cohesion Voting Agreements".................................. Recitals
"Cohesion Warrants"........................................... Section 2.2(c)
"Closing"..................................................... Section 1.2
"Closing Date"................................................ Section 1.2
"COBRA"....................................................... Section 3.16(b)
"Code"........................................................ Recitals
"Common Stock Purchase Agreement"............................. Section 3.6(c)
"Confidentiality Agreement"................................... Section 5.3
"Contractor".................................................. Section 3.21(a)(i)
"CSA"......................................................... Section 3.17(b)
"DEA"......................................................... Section 3.17(b)
"Delaware Law"................................................ Section 1.1
"Effective Time".............................................. Section 1.2
"Employee Benefit Plans"...................................... Section 3.20(a)
"End Date".................................................... Section 8.1(b)
"Environment"................................................. Section 3.21(a)(ii)
"Environmental Law"........................................... Section 3.21(a)(iii)
"Environmental Permit"........................................ Section 3.21(a)(iv)
"ERISA"....................................................... Section 3.20(a)
"ERISA Affiliate"............................................. Section 3.20(a)
"Exchange Act"................................................ Section 3.3(a)
"Exchange Agent".............................................. Section 2.3(a)
"Exchange Multiple"........................................... Section 2.1(g)
"Exchange Quotient"........................................... Section 2.1(g)
"Exchange Ratio".............................................. Section 2.1
"FDA"......................................................... Section 3.17(b)
"FDCA"........................................................ Section 3.17(b)
"Final Offering Period"....................................... Section 2.2(b)
"Foreign Plan"................................................ Section 3.20(n)
"FTC"......................................................... Section 5.5(a)
"GAAP"........................................................ Section 3.8
"Government Entity"........................................... Section 3.3(a)
"Hazardous Material".......................................... Section 3.21(a)(v)
"Holder"...................................................... Section 2.3(c)
"HSR Act"..................................................... Section 3.3(a)
"Indemnified Parties"......................................... Section 5.8(a)
"IRS"......................................................... Section 3.20(j)
"law"......................................................... Section 9.12
v
INDEX OF DEFINED TERMS
(CONTINUED)
"Merger"...................................................... Recitals
"Merger Sub".................................................. Preamble
"Merger Sub Common Stock"..................................... Section 2.1(d)
"Nasdaq"...................................................... Section 2.1
"Notice of Superior Offer".................................... Section 5.4(c)
"Pension Plans"............................................... Section 3.20(a)
"Person"...................................................... Section 2.1(g)
"Potential Acquiror".......................................... Section 5.2(a)
"Proxy Statement/Prospectus".................................. Section 3.24
"Reference Date".............................................. Section 3.8
"Registration Statement"...................................... Section 3.24
"Rights Agreement"............................................ Section 3.4
"SEC"......................................................... Section 3.7
"Securities Act".............................................. Section 3.7
"Subsidiary".................................................. Section 2.1(g)
"Superior Offer".............................................. Section 5.4(c)
"Surviving Corporation"....................................... Section 1.1
"Tax" or "Taxes".............................................. Section 3.19(a)
"Tax Representation Letters".................................. Section 6.5
"Tax Return" or "Tax Returns"................................. Section 3.19(a)
"Trading Day"................................................. Section 2.1
"Waiver Agreement"............................................ Section 3.9
"Welfare Plans"............................................... Section 3.20(a)
vi
AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION (this "AGREEMENT") is made and
entered into as of September 27, 2002 by and among Angiotech Pharmaceuticals,
Inc., a corporation organized under the laws of British Columbia ("ANGIOTECH"),
Chardonnay Acquisition Corp., a Delaware corporation and wholly-owned subsidiary
of Angiotech ("MERGER SUB"), and Cohesion Technologies, Inc, a Delaware
corporation ("COHESION"), with respect to the following facts:
A. The respective boards of directors of Angiotech, Merger Sub and
Cohesion have approved and declared advisable this Agreement and the merger of
Merger Sub with and into Cohesion (the "MERGER"), upon the terms and subject to
the conditions set forth herein, and have determined that the Merger and the
other transactions contemplated by this Agreement are fair to, and in the best
interests of, their respective stockholders.
B. Pursuant to the Merger, among other things, the outstanding shares of
Cohesion Common Stock, $0.001 par value ("COHESION COMMON STOCK"), will be
converted into the right to receive shares of Angiotech Common Stock, no par
value ("ANGIOTECH COMMON STOCK"), at the rate set forth herein.
C. Concurrently with the execution and delivery of this Agreement and as a
condition and inducement to Angiotech's and Merger Sub's willingness to enter
into this Agreement, Angiotech is entering into voting agreements in the form of
Exhibit A attached hereto with each of the members of Cohesion's board of
directors, in their respective capacities as Cohesion stockholders (the
"COHESION VOTING AGREEMENTS").
D. For United States federal income tax purposes, it is intended that the
Merger will qualify as a reorganization under the provisions of Section 368(a)
of the Internal Revenue Code of 1986, as amended (the "CODE").
The parties agree as follows:
ARTICLE I
THE MERGER
1.1 THE MERGER
At the Effective Time (as defined in Section 1.2) and subject to and upon
the terms and conditions of this Agreement and the applicable provisions of the
General Corporation Law of the State of Delaware (the "DELAWARE LAW"), (i)
Merger Sub shall be merged with and into Cohesion, (ii) the separate corporate
existence of Merger Sub shall cease, and (iii) Cohesion shall be the surviving
corporation and a wholly-owned subsidiary of Angiotech. Cohesion, as the
surviving corporation after the Merger, is hereinafter sometimes referred to as
the "SURVIVING CORPORATION."
1.2 CLOSING; EFFECTIVE TIME
The closing of the Merger and the other transactions contemplated hereby
(the "CLOSING") will take place at 8:00 a.m., local time, on a date to be
specified by the parties (the "CLOSING DATE"), which shall be no later than the
third Business Day after satisfaction or waiver of the conditions set forth in
Article VI and Article VII, unless another time or date is agreed to by the
parties hereto. The Closing shall take place at the offices of Xxxxxx & Xxxxxxx,
000 Xxxxxxxxxxxx Xxxxx, Xxxxx Xxxx, Xxxxxxxxxx, or at such other location as the
parties hereto shall mutually agree. At the Closing, the parties hereto shall
cause the Merger to be consummated by filing a certificate of merger
substantially in the form of Exhibit B attached hereto (the "CERTIFICATE OF
MERGER") with the Secretary of State of the State of Delaware, in accordance
with the relevant provisions of the Delaware Law (the time of such filing, or
such later time as may be agreed in writing by the parties and specified in the
Certificate of Merger, being the "EFFECTIVE TIME"). For purposes of this
Agreement, "BUSINESS DAY" means every day other than Saturdays, Sundays and days
when commercial banks are authorized to be closed for business in New York, New
York.
1.3 EFFECTS OF THE MERGER
The effects of the Merger shall be as provided in this Agreement, the
Certificate of Merger and the applicable provisions of the Delaware Law. Without
limiting the foregoing, at the Effective Time all the property, rights,
privileges, powers and franchises of Cohesion and Merger Sub shall vest in the
Surviving Corporation, and all debts, liabilities and duties of Cohesion and
Merger Sub shall become the debts, liabilities and duties of the Surviving
Corporation.
1.4 CERTIFICATE OF INCORPORATION; BYLAWS
(a) Subject to Section 5.8, from and after the Effective Time, the
certificate of incorporation of the Surviving Corporation shall be amended in
its entirety to read as the certificate of incorporation of Merger Sub, as in
effect immediately prior to the Effective Time; provided, however, that the name
of the Surviving Corporation shall be "Cohesion Technologies, Inc."
(b) Subject to Section 5.8, from and after the Effective Time, the
bylaws of Merger Sub, as in effect immediately prior to the Effective Time,
shall be the bylaws of the Surviving Corporation.
1.5 DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION
The directors and officers of Merger Sub immediately prior to the
Effective Time shall serve as the initial directors and officers of the
Surviving Corporation, until their respective successors are duly elected or
appointed and qualified.
2
ARTICLE II
CONVERSION OF SHARES
2.1 CONVERSION OF STOCK
Pursuant to the Merger, and without any action on the part of the holders
of any outstanding shares of capital stock or securities of Cohesion or Merger
Sub:
(a) As of the Effective Time, each share of Cohesion Common Stock
issued and outstanding immediately prior to the Effective Time (other than
shares of Cohesion Common Stock to be canceled pursuant to Section 2.1(c)) shall
be automatically converted into a number of fully paid and nonassessable share
of Angiotech Common Stock (the "EXCHANGE RATIO") calculated as follows: If the
Angiotech Reference Price is from $34.00 to $46.00 per share, the Exchange Ratio
will be the quotient of US $4.05 divided by the Angiotech Reference Price; if
the Angiotech Reference Price is above US $46.00 per share, the Exchange Ratio
will be 0.0880; and if the Angiotech Reference Price is below US $34.00 per
share, the Exchange Ratio will be 0.1191. The "ANGIOTECH REFERENCE PRICE" will
be the average of the daily high and low selling prices on the Nasdaq National
Market (the "NASDAQ") (as reported in The Wall Street Journal, or if not
reported therein, any other authoritative source) of one share of Angiotech
Common Stock during the twenty (20) Trading Day period ending on the third
Trading Day prior to the Effective Time. A "TRADING DAY" is a day on which the
Nasdaq is open and available for at least five hours for the trading of
securities.
(b) As of the Effective Time, each holder of a certificate or
certificates which immediately prior to the Effective Time represented
outstanding shares of Cohesion Common Stock shall cease to have any rights with
respect thereto, except the right to receive (i) the number of whole shares of
Angiotech Common Stock which such holder shall be entitled to receive pursuant
to the terms hereof, and (ii) cash in lieu of fractional shares of Angiotech
Common Stock in accordance with Section 2.1(f), without interest.
(c) As of the Effective Time, each share of Cohesion Common Stock
held of record immediately prior to the Effective Time by Cohesion, Merger Sub,
Angiotech or any Subsidiary (as defined in Section 2.1(g)) of Cohesion or of
Angiotech shall be canceled and extinguished without any conversion thereof.
(d) As of the Effective Time, each share of Common Stock, $0.001 par
value, of Merger Sub (the "MERGER SUB COMMON STOCK") issued and outstanding
immediately prior to the Effective Time shall be automatically converted into
one validly issued, fully paid and nonassessable share of Common Stock, $0.001
par value, of the Surviving Corporation. Each certificate evidencing ownership
of a number of shares of Merger Sub Common Stock shall be deemed to evidence
ownership of the same number of shares of Common Stock, $0.001 par value, of the
Surviving Corporation.
(e) Without limiting any other provision of this Agreement, the
Exchange Ratio shall be adjusted to reflect fully the effect of any stock split,
reverse stock split, stock dividend (including any dividend or distribution of
securities convertible into Angiotech
3
Common Stock or Cohesion Common Stock), extraordinary dividend or distribution,
reorganization, reclassification, recapitalization or other like change with
respect to Angiotech Common Stock or Cohesion Common Stock occurring or having a
record date or an effective date on or after the date hereof and prior to the
Effective Time.
(f) No fraction of a share of Angiotech Common Stock will be issued
by virtue of the Merger. Instead, each holder of shares of Cohesion Common Stock
who would otherwise be entitled to a fraction of a share of Angiotech Common
Stock (after aggregating all fractional shares of Angiotech Common Stock to be
received by such holder) shall receive from Angiotech an amount of cash (rounded
down to the nearest whole cent) equal to the product of (i) such fraction,
multiplied by (ii) the Angiotech Closing Value. For the purposes of this
Agreement, "ANGIOTECH CLOSING VALUE" shall mean the closing price of one share
of Angiotech Common Stock on the Nasdaq (as reported in The Wall Street Journal,
or if not reported therein, any other authoritative source) on the trading day
immediately preceding the Effective Time.
(g) For the purposes of this Agreement, the "EXCHANGE MULTIPLE" of
any quantity means the product obtained from multiplying such quantity by the
Exchange Ratio, and the "EXCHANGE QUOTIENT" of any quantity means the quotient
obtained from dividing such quantity by the Exchange Ratio. For purposes of this
Agreement, (i) the term "SUBSIDIARY," when used with respect to any Person,
means any corporation, entity or other organization, whether incorporated or
unincorporated, of which (A) at least a majority of the securities or other
interests having by their terms ordinary voting power to elect a majority of the
board of directors or others performing similar functions with respect to such
corporation, entity or other organization is directly or indirectly owned or
controlled by such Person (through ownership of securities, by contract or
otherwise) or (B) such Person or any Subsidiary of such Person is a general
partner of any general partnership or a manager of any limited liability
company; provided, however, that under no circumstances shall NeuColl, Inc., a
corporation organized under the laws of the State of Delaware, be deemed to be a
Subsidiary of Cohesion for purposes of this Agreement, other than for the
purpose of Section 3.19 of this Agreement for periods prior to March 2000, for
which periods and purpose NeuColl, Inc. shall be deemed to be a Subsidiary of
Cohesion. For the purposes of this Agreement, the term "PERSON" means any
individual, group, organization, corporation, partnership, joint venture,
limited liability company, trust or entity of any kind.
2.2 COHESION OPTIONS; COHESION PURCHASE PLANS; COHESION WARRANTS
(a) Not later than thirty (30) days prior to the Effective Time, all
outstanding options to purchase shares of Cohesion Common Stock (the "COHESION
OPTIONS"), whether or not then fully exercisable or vested, granted under any
plan or agreement of Cohesion or a Cohesion Stock Plan (as hereinafter defined),
other than purchase rights under the Cohesion Purchase Plan (as hereinafter
defined), shall become fully exercisable and vested. For purposes of this
Agreement, "COHESION STOCK PLANS" means Cohesion's 1998 Restated Stock Option
Plan, Cohesion's 1998 Directors' Stock Option Plan and Cohesion's 2002
Non-Qualified Stock Option Plan. At the Effective Time, each then outstanding
Cohesion Option shall be assumed by Angiotech in such a manner that it shall be
exercisable upon the same terms and conditions as under the Cohesion Stock Plan
or other plan or agreement pursuant to which it was granted; provided that (i)
each such option thereafter shall be exercisable for a number of shares of
4
Angiotech Common Stock (rounded down to the nearest whole share) equal to the
Exchange Multiple of the number of shares of Cohesion Common Stock subject to
such option, and (ii) the option price per share of Angiotech Common Stock
thereafter shall equal the Exchange Quotient of the option price per share of
Cohesion Common Stock subject to such option in effect immediately prior to the
Effective Time, rounded up to the nearest whole cent (the "ASSUMED COHESION
OPTIONS").
(b) Each outstanding purchase right under the Cohesion 2001 Employee
Stock Purchase Plan (the "COHESION PURCHASE PLAN") shall be exercised for the
purchase of shares of Angiotech Common Stock at the price per share determined
pursuant to the Cohesion Purchase Plan on the date immediately prior to the
Closing Date, pursuant to Section 19(b) of the Cohesion Purchase Plan (the
"FINAL OFFERING PERIOD"). At or prior to the Effective Time, Cohesion shall take
all action necessary to provide that, immediately following the Final Offering
Period, the Cohesion Purchase Plan shall be terminated and no Person shall have
any further right to purchase Angiotech Common Stock under the Cohesion Purchase
Plan.
(c) Each outstanding warrant to purchase Cohesion Common Stock (the
"COHESION WARRANTS") shall be assumed by Angiotech in such a manner that it
shall be exercisable upon the same terms and conditions as under the agreement
pursuant to which it was granted; provided that each such warrant thereafter
shall be exercisable for a number of shares of Angiotech Common Stock (rounded
down to the nearest whole share) equal to the Exchange Multiple of the number of
shares of Cohesion Common Stock subject to such warrant (the "ASSUMED COHESION
WARRANTS").
2.3 EXCHANGE OF STOCK CERTIFICATES
(a) Prior to the Effective Time, Angiotech shall enter into an
agreement with a bank or trust company selected by Angiotech and reasonably
acceptable to Cohesion to act as the exchange agent for the Merger (the
"EXCHANGE AGENT").
(b) At or prior to the Effective Time, Angiotech shall supply or
cause to be supplied to or for the account of the Exchange Agent in trust for
the benefit of the holders of Cohesion Common Stock, for exchange pursuant to
this Section 2.3: (i) certificates (or, book entry) evidencing the shares of
Angiotech Common Stock issuable pursuant to Section 2.1 to be exchanged for
outstanding shares of Cohesion Common Stock, and (ii) cash in an aggregate
amount sufficient to make the payments in lieu of fractional shares provided for
in Section 2.1(f).
(c) Promptly after the Effective Time, Angiotech shall mail or shall
cause to be mailed to each Holder a letter of transmittal in customary form
(which shall specify that delivery shall be effected, and risk of loss and title
to the Cohesion Certificates shall pass, only upon proper delivery of the
Cohesion Certificates to the Exchange Agent) and instructions for surrender of
the Cohesion Certificates. Upon surrender to the Exchange Agent of a Cohesion
Certificate, together with such letter of transmittal duly executed, the Holder
shall be entitled to receive in exchange therefor: (i) certificates evidencing
that number of shares of Angiotech Common Stock issuable to such Holder in
accordance with this Article II; (ii) any dividends or other distributions that
such Holder has the right to receive pursuant to Section 2.3(d); and (iii) cash
in respect of fractional shares as provided in Section 2.1(f), and such Cohesion
5
Certificate so surrendered shall forthwith be canceled. No certificate
representing shares of Angiotech Common Stock will be issued to a Person who is
not the registered owner of a surrendered Cohesion Certificate unless (i) the
Cohesion Certificate so surrendered has been properly endorsed or otherwise is
in proper form for transfer, and (ii) such Person shall either (A) pay any
transfer or other tax required by reason of such issuance or (B) establish to
the reasonable satisfaction of the Surviving Corporation that such tax has been
paid or is not applicable. Until surrendered in accordance with the provisions
of this Section 2.3, from and after the Effective Time, each Cohesion
Certificate shall be deemed to represent, for all purposes other than payment of
dividends, the right to receive a certificate representing the number of full
shares of Angiotech Common Stock as determined in accordance with this Article
II and cash in lieu of fractional shares as provided in Section 2.1(f). For
purposes of this Agreement, "COHESION CERTIFICATE" means a certificate which
immediately prior to the Effective Time represented shares of Cohesion Common
Stock, and "HOLDER" means a person who holds one or more Cohesion Certificates
as of the Effective Time.
(d) No dividend or other distribution declared with respect to
Angiotech Common Stock with a record date after the Effective Time will be paid
to Holders of unsurrendered Cohesion Certificates until such Holders surrender
their Cohesion Certificates. Upon the surrender of such Cohesion Certificates,
there shall be paid to such Holders, promptly after such surrender, the amount
of dividends or other distributions, excluding interest, declared with a record
date after the Effective Time and not paid because of the failure to surrender
Cohesion Certificates for exchange.
(e) Notwithstanding anything to the contrary in this Agreement,
neither the Exchange Agent, Angiotech, the Surviving Corporation nor any party
hereto shall be liable to any holder of shares of Cohesion Common Stock for
shares of Angiotech Common Stock or cash in lieu of fractional shares delivered
to a public official pursuant to any applicable abandoned property, escheat or
similar law.
2.4 LOST, STOLEN OR DESTROYED CERTIFICATES
In the event that any Cohesion Certificates shall have been lost, stolen
or destroyed, the Exchange Agent shall issue and pay in respect of such lost,
stolen or destroyed Cohesion Certificates, upon the making of an affidavit of
that fact by the holder thereof, the shares of Angiotech Common Stock as may be
required pursuant to Section 2.1 and cash in lieu of fractional shares, if any,
as may be required pursuant to Section 2.1(f) and any dividends or distributions
payable pursuant to Section 2.3(d); provided, however, that Angiotech may, in
its discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed Cohesion Certificates to deliver a bond
in such sum as it may reasonably direct as indemnity against any claim that may
be made against Angiotech or the Exchange Agent with respect to such Cohesion
Certificate alleged to have been lost, stolen or destroyed.
2.5 TAX CONSEQUENCES
For United States federal income tax purposes, it is intended by the
parties hereto that the Merger qualify as a "reorganization" within the meaning
of Section 368(a) of the Code and that
6
this Agreement constitute a "plan of reorganization" within the meaning of
Treasury Regulations Section 1.368-2(g).
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF COHESION
Cohesion makes to Angiotech and Merger Sub the representations and
warranties contained in this Article III, in each case subject to the exceptions
set forth in the disclosure statement, dated as of the date hereof (the
"COHESION DISCLOSURE STATEMENT"). The Cohesion Disclosure Statement shall be
arranged in schedules corresponding to the numbered and lettered Sections of
this Article III, and the disclosure on any Schedule of the Cohesion Disclosure
Statement shall only qualify the corresponding Section of this Article III,
unless the disclosure contained in such Section contains such information so as
to enable a reasonable person to determine that such disclosure qualifies or
otherwise applies to other Sections of this Article III.
3.1 ORGANIZATION, ETC.
(a) Cohesion is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation, and
has all requisite power and authority to own, lease and operate its properties
and to carry on its business as now being conducted, except where the failure to
be so organized, existing or in good standing or to have such power, authority
or qualification would not, individually or in the aggregate, reasonably be
expected to have a Cohesion Material Adverse Effect. Cohesion is duly qualified
as a foreign Person to do business, and is in good standing, in each
jurisdiction where the character of its owned or leased properties or the nature
of its activities makes such qualification necessary, except where the failure
to be so qualified or in good standing would not, individually or in the
aggregate, reasonably be expected to have a Cohesion Material Adverse Effect.
For the purposes of this Agreement, "COHESION MATERIAL ADVERSE
EFFECT" means any change, event, or effect that has had or would reasonably be
expected to have a material adverse effect on (i) the business, results of
operations, or financial condition of Cohesion, (ii) the ability of Cohesion to
consummate the Merger or any of the transactions contemplated by this Agreement
or to perform any of its obligations under this Agreement before the End Date,
or (iii) Angiotech's ability to vote, receive dividends with respect to or
otherwise exercise ownership rights with respect to the stock of the Surviving
Corporation under applicable U.S. federal and state law. Notwithstanding the
foregoing, with respect to item (i) above, none of the following shall be deemed
(either alone or in combination) to constitute, and none of the following shall
be taken into account in determining whether there has been or will be, a
Cohesion Material Adverse Effect: (A) any adverse change, event or effect
arising from or relating to general business or economic conditions; (B) any
adverse change, event or effect relating to or affecting the medical device
industry generally; and (C) any adverse change, event or effect arising from or
relating to the announcement or pendency of the Merger, including, but not
limited to, changes or effects which result from the loss of customers or delay,
cancellation or cessation of orders for Cohesion's products.
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(b) Cohesion is not in violation of any provision of its certificate
of incorporation or bylaws.
3.2 AUTHORITY RELATIVE TO THIS AGREEMENT
Cohesion has full corporate power and authority to (i) execute and deliver
this Agreement and (ii) assuming the adoption of this Agreement by a majority of
the outstanding shares of Cohesion Common Stock at the Cohesion Stockholder
Meeting or any adjournment or postponement thereof in accordance with the
Delaware Law, consummate the Merger and the other transactions contemplated
hereby. The execution and delivery of this Agreement, and the consummation of
the Merger and the other transactions contemplated hereby, have been duly and
validly authorized by the vote of Cohesion's board of directors, and no other
corporate proceedings on the part of Cohesion are necessary to authorize this
Agreement or to consummate the Merger and the other transactions contemplated
hereby (other than, with respect to the Merger, the adoption of this Agreement
by a majority of the outstanding shares of Cohesion Common Stock at the Cohesion
Stockholder Meeting or any adjournment or postponement thereof in accordance
with the Delaware Law). This Agreement has been duly and validly executed and
delivered by Cohesion and, assuming due authorization, execution and delivery by
Angiotech and Merger Sub, constitutes a valid and binding agreement of Cohesion,
enforceable against Cohesion in accordance with its terms, except to the extent
that its enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting the enforcement of creditors'
rights generally or by general equitable principles.
3.3 NO VIOLATIONS, ETC.
(a) No filing with or notification to, and no permit, authorization,
consent or approval of, any court, administrative agency, commission or other
governmental or regulatory body, authority or instrumentality ("GOVERNMENT
ENTITY") or any Person is necessary on the part of Cohesion for the consummation
by Cohesion of the Merger and the other transactions contemplated hereby, except
(i) for the filing of the Certificate of Merger as required by the Delaware Law,
(ii) the applicable requirements of the Securities Exchange Act of 1934, as
amended (together with the Rules and Regulations promulgated thereunder, the
"EXCHANGE ACT"), state securities or "blue sky" laws and state takeover laws,
(iii) any filing required under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 0000 (xxx "XXX XXX") and (iv) where the failure to make such filing or
notification or to obtain such permit, authorization, consent or approval would
not, individually or in the aggregate, have a Cohesion Material Adverse Effect.
(b) Cohesion does not carry on, in whole or in part, an operating
business in Canada and neither the aggregate value of the assets in Canada of
Cohesion nor the gross revenues of Cohesion in or from Canada generated from
those assets, exceeds CDN $35,000,000.
(c) Neither the execution and delivery of this Agreement, nor the
consummation of the Merger and the other transactions contemplated hereby, nor
compliance by Cohesion with all of the provisions hereof and thereof, will,
subject to obtaining the approval of this Agreement by the holders of a majority
of the outstanding shares of Cohesion Common Stock at the Cohesion Stockholder
Meeting or any adjournment thereof in accordance with the
8
Delaware Law, (i) conflict with or result in any breach of any provision of the
certificate of incorporation or bylaws of Cohesion, (ii) violate any material
order, writ, injunction, decree, statute, rule or regulation applicable to
Cohesion, or by which any of its properties or assets may be bound, or (iii)
result in a violation or breach of, or constitute (with or without due notice or
lapse of time or both) a default under, or result in any material change in, or
give rise to any right of termination, cancellation, acceleration, redemption or
repurchase under, any of the terms, conditions or provisions of any material
note, bond, mortgage, indenture, deed of trust, license, lease, contract,
agreement or other instrument or obligation to which Cohesion is a party or by
which it or its properties or assets may be bound, except in the case of clauses
(ii) or (iii) above, for any such conflicts, breaches, violations, defaults or
other occurrences that would not individually or in the aggregate, reasonably be
expected to have a Cohesion Material Adverse Effect.
(d) Schedule 3.3(d) of the Cohesion Disclosure Statement sets forth
all notices, consents, waivers and approvals required to be obtained in
connection with the consummation of the transactions contemplated hereby under
any of Cohesion's notes, bonds, mortgages, indentures, deeds of trust, licenses
or leases, contracts, agreements or other instruments or obligations, the
failure to obtain which would reasonably be expected to have a Cohesion Material
Adverse Effect.
3.4 BOARD RECOMMENDATION
Cohesion's board of directors has, at a meeting of such board duly held on
September 26, 2002, (i) approved and adopted this Agreement, (ii) determined
that this Agreement is advisable, fair to and in the best interests of
Cohesion's stockholders, (iii) resolved to recommend adoption of this Agreement
to Cohesion's stockholders, (iv) resolved that Cohesion take all action
necessary to exempt the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby from the provisions of all
applicable state anti-takeover statutes or regulations including, but not
limited to, Section 203 of the Delaware Law, and (v) resolved to render the
rights issued under the Cohesion Rights Agreement, adopted by Cohesion's board
of directors on April 21, 1999 (the "RIGHTS AGREEMENT"), inapplicable to the
Merger, this Agreement and the other transactions contemplated hereby.
3.5 FAIRNESS OPINION
Cohesion has received the opinion of U.S. Bancorp Xxxxx Xxxxxxx Inc. dated
the date of the approval of this Agreement by Cohesion's board of directors to
the effect that the Exchange Ratio is fair to Cohesion's stockholders from a
financial point of view, and has provided a copy of such opinion to Angiotech.
3.6 CAPITALIZATION
(a) The authorized capital stock of Cohesion consists of 15,000,000
shares of Cohesion Common Stock and 5,000,000 shares of Preferred Stock, $0.001
par value ("COHESION PREFERRED STOCK"). As of September 25, 2002, there were (i)
9,479,436 shares of Cohesion Common Stock outstanding (excluding treasury
shares), (ii) no shares of Cohesion Preferred Stock outstanding, and (iii)
515,100 treasury shares.
9
(b) Except for the Cohesion Options, purchase rights under the
Cohesion Purchase Plans, the rights issued under the Cohesion Rights Agreement
and the Cohesion Warrants identified in Schedule 3.6(b) of the Cohesion
Disclosure Statement, there are no warrants, options, convertible securities,
calls, rights, stock appreciation rights, preemptive rights, rights of first
refusal, or agreements or commitments of any nature obligating Cohesion to
issue, deliver or sell, or cause to be issued, delivered or sold, additional
shares of capital stock or other equity interests of Cohesion, or obligating
Cohesion to grant, issue, extend, accelerate the vesting of, or enter into, any
such warrant, option, convertible security, call, right, stock appreciation
right, preemptive right, right of first refusal, agreement or commitment. To the
knowledge of Cohesion, except for the Cohesion Voting Agreements, there are no
voting trusts, proxies or other agreements or understandings with respect to the
capital stock of Cohesion. For purposes of this Agreement, "to the knowledge of
Cohesion," or words of similar import, shall mean the actual knowledge of the
persons set forth on Schedule 3.6(b) of the Cohesion Disclosure Statement.
(c) True and complete copies of the Cohesion Stock Plans, the
Cohesion Purchase Plans, the Rights Agreement, the Common Stock Purchase
Agreement dated July 24, 2002 (the "COMMON STOCK PURCHASE AGREEMENT") and of the
forms of all agreements and instruments relating to or issued under each
thereof, have been made available to Angiotech. Except as required by this
Agreement, such agreements, instruments, and forms have not been amended,
modified or supplemented, and there are no agreements to amend, modify or
supplement any such agreements, instruments or forms.
(d) Schedule 3.6(d) of the Cohesion Disclosure Statement sets forth
the following information with respect to each Cohesion Option: the aggregate
number of shares issuable thereunder, the type of option, the grant date, the
expiration date, the exercise price and the vesting schedule. Each Cohesion
Option was granted in accordance with the terms of the Cohesion Stock Plan
applicable thereto.
3.7 SEC FILINGS
Cohesion has filed with the United States Securities and Exchange
Commission (the "SEC") all required forms, reports, registration statements and
documents required to be filed by it with the SEC (collectively, all such forms,
reports, registration statements and documents filed since January 1, 2001 are
referred to herein as the "COHESION SEC REPORTS"). All of the Cohesion SEC
Reports complied as to form, when filed, in all material respects with the
applicable provisions of the Securities Act of 1933, as amended (together with
the rules and regulations promulgated thereunder, the "SECURITIES ACT") and the
Exchange Act, as the case may be. Accurate and complete copies of the Cohesion
SEC Reports have been made available to Angiotech. As of their respective dates,
the Cohesion SEC Reports (including all exhibits and schedules thereto and
documents incorporated by reference therein) 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 therein, in light of the
circumstances under which they were made, not misleading.
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3.8 FINANCIAL STATEMENTS
Each of the consolidated financial statements (including, in each case,
any related notes thereto) contained in the Cohesion SEC Reports (the "COHESION
FINANCIAL STATEMENTS"), (x) was prepared in accordance with generally accepted
accounting principles ("GAAP") in the United States applied on a consistent
basis throughout the periods involved (except as may be indicated in the notes
thereto or, in the case of unaudited interim financial statements, as may be
permitted by the SEC on Form 10-Q under the Exchange Act) and (y) fairly
presented the consolidated financial position of Cohesion as of the respective
dates thereof and the consolidated results of its operations and cash flows for
the periods indicated, consistent with the books and records of Cohesion, except
that the unaudited interim financial statements were or are subject to normal
and recurring year-end adjustments which were not, or are not expected to be,
material in amount. The balance sheet of Cohesion contained in Cohesion's Form
10-Q for the quarter ended June 30, 2002 (the "REFERENCE DATE") is hereinafter
referred to as the "COHESION BALANCE SHEET."
3.9 ABSENCE OF UNDISCLOSED LIABILITIES
Cohesion does not have any liabilities (absolute, accrued, contingent or
otherwise) other than liabilities or obligations: (i) included in the Cohesion
Balance Sheet and the related notes to the financial statements; (ii) reflected
in the Cohesion SEC Reports through the date of the filing of Cohesion's
Quarterly Report on Form 10-Q in respect of the quarter ended June 30, 2002;
(iii) incurred since the Reference Date in the ordinary course of business and
consistent with past practice; (iv) incurred in the ordinary course of business
which are not required by GAAP to be reflected on a balance sheet; (v) under the
Common Stock Purchase Agreement and the transactions contemplated thereby; (vi)
under the Waiver Agreement, dated as of August 30, 2002 (the "WAIVER
AGREEMENT"), by and among Cohesion and the investors listed on the signature
pages thereto; (vii) which do not have, individually or in the aggregate, a
Cohesion Material Adverse Effect; and (viii) under this Agreement.
3.10 ABSENCE OF CHANGES OR EVENTS
Except as described in the Cohesion SEC Reports or as contemplated by this
Agreement, the Common Stock Purchase Agreement or the Waiver Agreement, since
the Reference Date, no Cohesion Material Adverse Effect has occurred and, in
addition, Cohesion has not, directly or indirectly:
(a) purchased, otherwise acquired, or agreed to purchase or
otherwise acquire any shares of capital stock of Cohesion, or declared, set
aside or paid any dividend or otherwise made a distribution (whether in cash,
stock, property or any combination thereof) in respect of its capital stock
(other than dividends or other distributions payable solely to Cohesion or
repurchases of unvested shares from employees in connection with the termination
of employment (for any reason) in accordance with agreements outstanding or
policies existing on the date hereof, or entered into thereafter in the ordinary
course of business and consistent with past practice);
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(b) (i) created or incurred any indebtedness for borrowed money
exceeding US $100,000 in the aggregate, or (ii) except as set forth in Section
3.10(b) of the Cohesion Disclosure Statement, assumed, guaranteed, endorsed or
otherwise, as an accommodation, become responsible for the obligations of any
other Person, made any loans or advances to any other Person exceeding US
$100,000 in the aggregate, except for travel advances and other advances made to
employees in the ordinary course of business and consistent with past practice;
(c) instituted any change in accounting methods, principles or
practices other than as required by GAAP or the rules and regulations
promulgated by the SEC and disclosed in the notes to the Cohesion Financial
Statements;
(d) revalued any assets, including without limitation, writing down
the value of inventory or writing off notes or accounts receivable in excess of
amounts previously reserved as reflected in the Cohesion Balance Sheet;
(e) suffered any damage, destruction or loss, whether covered by
insurance or not, except for such as would not, individually or in the aggregate
exceed US $100,000;
(f) (i) increased in any manner the compensation of any of its
directors, officers or, other than in the ordinary course of business and
consistent with past practice or pursuant to written agreements outstanding on
the date hereof, of a non-officer employee; (ii) granted any severance or
termination pay to any person; (iii) entered into any oral or written
employment, consulting, indemnification or severance agreement with any person
other than agreements involving amounts in each case not in excess of US
$100,000; (iv) other than as required by law or the specific terms of the
Employee Benefit Plans, as defined in Section 3.20(a) hereof, adopted, become
obligated under, or amended any employee benefit plan, program or arrangement;
or (v) repriced any Cohesion Options granted under the Cohesion Stock Plans;
(g) sold, transferred, leased to a third party, licensed to a third
party, pledged, mortgaged, encumbered, or otherwise disposed of, or agreed to
sell, transfer, lease to a third party, license to a third party, pledge,
mortgage, encumber or otherwise dispose of, any material portion of any material
property (including intangibles, real, personal or mixed);
(h) except as required by this Agreement, adopted any amendment
to the certificate of incorporation or bylaws of Cohesion;
(i) effected any split, combination or reclassification of any
capital stock of Cohesion;
(j) been party to any merger, consolidation, share exchange,
business combination, recapitalization or similar transaction;
(k) made any capital expenditure in any calendar month which, when
added to all other capital expenditures made by or on behalf of Cohesion in such
calendar month, resulted in such capital expenditures exceeding US $100,000 in
the aggregate;
12
(l) paid, discharged or satisfied any material claims, liabilities
or obligations (absolute, accrued, contingent or otherwise), other than the
payment, discharge or satisfaction of liquidated claims, liabilities or
obligations when due and the payment, discharge or satisfaction of liabilities
(including accounts payable) in the ordinary course of business and consistent
with past practice, or collected, or accelerated the collection of, any material
amounts owed (including accounts receivable) other than their collection in the
ordinary course of business;
(m) entered into any hedging, option, derivative or other similar
transaction or any foreign exchange position or contract for the exchange of
currency other than in the ordinary course of business and consistent with past
practice;
(n) waived, released, assigned, settled or compromised any material
claim or litigation, or commenced a lawsuit other than in the ordinary course of
business for the routine collection of bills;
(o) except as required by a Government Entity, or as set forth in
Schedule 3.10(o) of the Cohesion Disclosure Statement made any material
amendment to any 510(k) Notification or Pre-Market Approval already submitted to
the FDA or to their foreign equivalents;
(p) delayed, suspended, terminated or otherwise discontinued any
planned or ongoing material research and development activities, programs,
clinical trials or other such activities; or
(q) entered into an agreement, contract, commitment or arrangement
to do any of the foregoing, or authorized, recommended, proposed or announced an
intention to do any of the foregoing other than as expressly contemplated by
this Agreement.
3.11 SUBSIDIARIES
Cohesion has no Subsidiaries and has had no Subsidiaries since August 18,
1998.
3.12 NEUCOLL, INC.
Cohesion is directly or indirectly the record and beneficial owner of
150,000 shares of common stock, 2,400,000 shares of Series A Preferred Stock and
a warrant to purchase 3,000,000 shares of common stock of NeuColl, Inc. In
addition, Cohesion holds a convertible note of NeuColl, Inc. which is
convertible into shares of common stock of NeuColl, Inc.; provided, that if such
note is converted, the number of shares of common stock for which the warrant
described in the previous sentence is exercisable shall be automatically reduced
by the number of shares of common stock issued on such conversion. Except as set
forth in Schedule 3.12 of the Cohesion Disclosure Statement, no director,
officer or employee of Cohesion serves as a director, consultant, officer or
employee of NeuColl, Inc. As of the date hereof, Cohesion is not a party to any
arrangement, agreement or instrument which may require Cohesion to indemnify any
person, assume any liability or make any payments to or on behalf of NeuColl,
Inc.
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3.13 LITIGATION
(a) There is no private or governmental claim, action, suit (whether
in law or in equity), investigation or proceeding of any nature ("ACTION")
pending or, to the knowledge of Cohesion, threatened against Cohesion, or its
officers and directors (in their capacities as such), or involving any of its
assets, before any court, governmental or regulatory authority or body, or
arbitration tribunal, except for those Actions which, individually or in the
aggregate, would not have a Cohesion Material Adverse Effect. There is no Action
pending or, to the knowledge of Cohesion, threatened which in any manner
challenges, seeks to, or is reasonably likely to prevent, enjoin, alter or delay
the transactions contemplated by this Agreement.
(b) There is no outstanding judgment, order, writ, injunction or
decree of any court, governmental or regulatory authority or body, or
arbitration tribunal in a proceeding to which Cohesion or any of its assets is
or was a party or by which Cohesion or any of its assets is bound.
3.14 INSURANCE
Schedule 3.14 of the Cohesion Disclosure Statement sets forth all
insurance policies (including without limitation workers' compensation insurance
policies) covering the business, properties or assets of Cohesion, the premiums
and coverage of such policies, and all claims in excess of US $100,000 made
against any such policies since January 1, 2001. All such policies are in
effect, and true and complete copies of all such policies have been made
available to Angiotech. Cohesion has not received notice of the cancellation or
threat of cancellation of any of such policy.
3.15 CONTRACTS AND COMMITMENTS
(a) Except as filed as an exhibit to the Cohesion SEC Reports,
Cohesion is not a party to or bound by any material oral or written contract,
obligation or commitment in any of the following categories:
(i) agreements or arrangements that contain severance pay,
understandings with respect to tax arrangements, understandings with respect to
expatriate benefits, or post-employment liabilities or obligations;
(ii) agreements or plans under which benefits will be
increased or accelerated by the occurrence of any of the transactions
contemplated by this Agreement, or under which the value of the benefits will be
calculated on the basis of any of the transactions contemplated by this
Agreement;
(iii) agreements, contracts or commitments currently in force
relating to the disposition or acquisition of assets other than in the ordinary
course of business, or relating to an ownership interest in any corporation,
partnership, joint venture or other business enterprise;
(iv) agreements, contracts or commitments for the purchase of
materials, supplies or equipment which provide for purchase prices substantially
greater than
14
those presently prevailing for such materials, supplies or equipment, or which
are with sole or single source suppliers;
(v) guarantees or other agreements, contracts or commitments
under which Cohesion is absolutely or contingently liable for (A) the
performance of any other person, firm or corporation (other than Cohesion), or
(B) the whole or any part of the indebtedness or liabilities of any other Person
(other than Cohesion);
(vi) powers of attorney authorizing the incurrence of a
material obligation on the part of Cohesion;
(vii) agreements, contracts or commitments which limit or
restrict (A) where Cohesion may conduct business, (B) the type or lines of
business (current or future) in which they may engage, or (C) any acquisition of
assets or stock (tangible or intangible) by Cohesion;
(viii) agreements, contracts or commitments containing any
agreement with respect to a change of control of Cohesion;
(ix) agreements, contracts or commitments for the borrowing or
lending of money, or the availability of credit (except credit extended by
Cohesion to customers in the ordinary course of business and consistent with
past practice or as otherwise contemplated by this Agreement);
(x) any hedging, option, derivative or other similar
transaction and any foreign exchange position or contract for the exchange of
currency;
(xi) any joint marketing or joint development agreement, or
any license or distribution agreement relating to any product of Cohesion
entered into other than in the ordinary course of business; or
(xii) any agreement not otherwise set forth on Schedule 3.15
and Schedule 3.18 of the Cohesion Disclosure Statement that expressly obligates
Cohesion to indemnify any other Person, including but not limited to any
employee or consultant of Cohesion, against any charge of infringement,
misappropriation or misuse of any intellectual property, other than
indemnification provisions contained in purchase orders or customer agreements
arising in the ordinary course of business.
(b) Neither Cohesion nor to the knowledge of Cohesion, any other
party to a Cohesion Contract (as hereinafter defined), has breached, violated or
defaulted under, or received notice that it has breached, violated or defaulted
under, nor does there exist any condition under which, with the passage of time
or the giving of notice or both, could reasonably be expected to cause such a
breach, violation or default under, any material agreement, contract or
commitment to which Cohesion is a party or by which it or any of its properties
or assets may be bound (any such agreement, contract or commitment, a "COHESION
CONTRACT"), other than any breaches, violations or defaults which, individually
or in the aggregate, would not have a Cohesion Material Adverse Effect.
15
(c) Each Cohesion Contract is a valid, binding and enforceable
obligation of Cohesion and to the knowledge of Cohesion, of the other party or
parties thereto, in accordance with its terms, and in full force and effect,
except where the failure to be valid, binding, enforceable and in full force and
effect would not reasonably be expected to have a Cohesion Material Adverse
Effect and to the extent enforcement may be limited by applicable bankruptcy,
insolvency, moratorium or other laws affecting the enforcement of creditors'
rights governing or by general principles of equity or by competition laws.
(d) An accurate and complete copy of each material Cohesion Contract
and any amendment thereto has been made available to Angiotech.
3.16 LABOR MATTERS; EMPLOYMENT AND LABOR CONTRACTS
(a) Cohesion is neither a party to any union contract or other
collective bargaining agreement, nor to the knowledge of Cohesion are there any
activities or proceedings of any labor union to organize any of its employees.
Cohesion is in compliance with all applicable (i) laws, regulations and
agreements respecting employment and employment practices, (ii) terms and
conditions of employment and (iii) occupational health and safety requirements,
except for those failures to comply which, individually or in the aggregate,
would not reasonably be expected to have a Cohesion Material Adverse Effect.
(b) There is no labor strike, slowdown or stoppage pending (or any
labor strike or stoppage threatened) against Cohesion. No petition for
certification has been filed and is pending before the National Labor Relations
Board with respect to any employees of Cohesion who are not currently organized.
Cohesion has no obligations under the Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended ("COBRA"), with respect to any former employees or
qualifying beneficiaries thereunder, except for obligations that would not
reasonably be expected to have, individually or in the aggregate, a Cohesion
Material Adverse Effect. There are no controversies pending or, to the knowledge
of Cohesion, threatened, between Cohesion and any of its employees, which
controversies would reasonably be expected to have, individually or in the
aggregate, a Cohesion Material Adverse Effect.
3.17 COMPLIANCE WITH LAWS
(a) Cohesion has not violated or failed to comply with any statute,
law, ordinance, rule or regulation (including without limitation relating to the
export or import of goods or technology) of any foreign, federal, state or local
government or any other governmental department or agency, except where any such
violations or failures to comply would not, individually or in the aggregate,
reasonably be expected to have a Cohesion Material Adverse Effect.
(b) Except as would not, individually or in the aggregate, have a
Cohesion Material Adverse Effect, Cohesion is in possession of all franchises,
grants, authorizations, licenses, establishment registrations, product listings,
permits, easements, variances, exceptions, consents, certificates, approvals and
orders of any Government Entity, including, without limitation, the United
States Food and Drug Administration (the "FDA"), the United States Drug
Enforcement Agency ("DEA") and similar authorities in the U.S. and non-U.S.
jurisdictions
16
necessary for Cohesion to own, lease and operate its properties or to develop,
produce, store, distribute, promote and sell its products or otherwise to carry
on its business as it is now being conducted (the "COHESION PERMITS"), and, as
of the date of this Agreement, no suspension or cancellation of any of the
Cohesion Permits is pending or, to the knowledge of Cohesion, threatened, except
where the failure to have, or the suspension or cancellation of, any of the
Cohesion Permits would not, individually or in the aggregate, have a Cohesion
Material Adverse Effect. Except for conflicts, defaults or violations which,
individually or in the aggregate, would not have a Cohesion Material Adverse
Effect, Cohesion is not in conflict with, or in default of, (i) any law
applicable to Cohesion or by which any property, asset or product of Cohesion is
bound or affected, including, without limitation, the Federal Food, Drug and
Cosmetic Act (the "FDCA"), the Comprehensive Drug Abuse Prevention and Control
Act of 1970 (the "CDAPCA"), the Controlled Substances Act (the "CSA") and any
other similar act or law or (ii) any Cohesion Permits.
(c) Except as would not, individually or in the aggregate, have a
Cohesion Material Adverse Effect:
(i) all manufacturing operations of Cohesion are being
conducted in substantial compliance with applicable good manufacturing
practices;
(ii) all necessary clearances or approvals from governmental
agencies for all device products which are manufactured or sold by Cohesion have
been obtained, and Cohesion is in substantial compliance with the most current
form of each applicable clearance or approval with respect to the development,
production, storage, distribution, promotion and sale by Cohesion of such
products;
(iii) all of the clinical studies which have been, or are
being conducted by or for Cohesion, are being conducted in substantial
compliance with generally accepted good clinical practices and all applicable
government regulatory, statutory and other requirements;
(iv) to the knowledge of Cohesion, none of its respective
officers, employees or agents (during the term of such person's employment by
Cohesion or while acting as an agent of Cohesion) has made any untrue statement
of a material fact or fraudulent statement to the FDA or any governmental agency
(including, without limitation, non-U.S. regulatory agencies), failed to
disclose a material fact required to be disclosed to the FDA or similar
governmental agency (including, without limitation, non-U.S. regulatory
agencies), or to the knowledge of Cohesion, committed an act, made a statement
or failed to make a statement that could reasonably be expected to provide a
basis for the FDA or similar governmental agency (including, without limitation,
non-U.S. regulatory agencies) to invoke its Application Integrity Policy or
similar governmental policy or regulation (including, without limitation,
non-U.S. policies or regulations), rule, regulation or law;
(v) to the knowledge of Cohesion, Cohesion has not received
any written notice that the FDA or any similar governmental agency (including,
without limitation, non-U.S. regulatory agencies) has commenced, or threatened
to initiate, any action to withdraw its approval or request the recall of any
product of Cohesion, or commenced, or overtly threatened to initiate, any action
to enjoin production at any facility of Cohesion;
17
(vi) to the knowledge of Cohesion, as to each article of drug,
device or cosmetic manufactured and/or distributed by Cohesion, such article is
not adulterated or misbranded within the meaning of the FDCA or any similar
governmental act or law of any jurisdiction (including, without limitation,
non-U.S. jurisdictions); and
(vii) To the knowledge of Cohesion, none of its respective
officers, employees or agents (during the term of such person's employment by
Cohesion or while acting as an agent of Cohesion), subsidiaries or affiliates
has been convicted of any crime or engaged in any conduct for which debarment or
similar punishment is mandated or permitted by any applicable law.
(d) As to each product subject to the jurisdiction of the FDA under
the FDCA which is developed, manufactured, tested, distributed, held and/or
marketed by Cohesion, to the knowledge of Cohesion such product is being
developed, manufactured, held and distributed in substantial compliance with all
applicable requirements under the FDCA, if applicable, including, but not
limited to, such requirements relating to investigational use, pre-market
clearance, good manufacturing practices, labeling, advertising, record keeping,
filing of reports and security, except for such non-compliance which,
individually or in the aggregate, would not have a Cohesion Material Adverse
Effect.
(e) To the knowledge of Cohesion, Cohesion has, prior to the
execution of this Agreement, provided to Angiotech copies of or made available
for Angiotech's review any and all documents in its possession material to
assessing Cohesion's compliance with the FDCA or the CDAPCA and implementing
regulations, including, but not limited to, copies in its possession of (i) all
483s issued during the last three years; (ii) all audit reports performed during
the last three years, whether performed by Cohesion or an outside consultant;
(iii) any material document (prepared by Cohesion) concerning any material oral
or written communication received from the FDA, the DEA or the United States
Department of Justice during the last three years; (iv) any administrative or
judicial order, ruling or agreement issued or entered into during the last three
years in which Cohesion or its respective predecessor companies were a named
party; or (v) any recall notice or order relating to any product of Cohesion.
(f) Schedule 3.17(f) of the Cohesion Disclosure Statement sets
forth a complete and accurate list of (i) medical devices made by Cohesion
with the FDA or similar U.S. or non-U.S. governmental agency, (ii) each
clinical trial protocol submitted by Cohesion to the FDA or similar U.S. or
non-U.S. governmental agency, (iii) each new Pre-Market Approval or 510(k)
Notification and any amendments or supplements thereto filed by Cohesion
pursuant to the FDCA, or any non-US. equivalents, (iv) each product license
application filed by Cohesion pursuant to the Public Health Service Act, as
amended, or any non-U.S. equivalents and (v) each establishment license
application filed with respect to any product of Cohesion under the Public
Health Service Act, as amended, or any non-U.S. equivalents.
3.18 INTELLECTUAL PROPERTY RIGHTS
(a) Cohesion owns or has the right to use all intellectual property
material used to and used in the conduct of its businesses (such intellectual
property and the rights thereto are collectively referred to herein as the
"COHESION IP RIGHTS"). No royalties or other payments
18
are payable to any Person with respect to commercialization of any products
presently sold or under development by Cohesion.
(b) The execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby will not constitute a
material breach of any instrument or agreement governing any material Cohesion
IP Rights, and will not (i) cause the modification of any terms of any licenses
or agreements relating to any material Cohesion IP Rights including, but not
limited to, the modification of the effective rate of any royalties or other
payments provided for in any such license or agreement, (ii) cause the
forfeiture or termination of any material Cohesion IP Rights, (iii) give rise to
a right of forfeiture or termination of any material Cohesion IP Rights or (iv)
materially impair the right of Cohesion, the Surviving Corporation or Angiotech
to use, sell or license any material Cohesion IP Rights or portion thereof.
(c) The manufacture, marketing, license, sale or intended use of any
product or technology currently licensed or sold or under development by
Cohesion does not (i) violate in any material respect any license or agreement
between Cohesion and any third party or (ii) to the knowledge of Cohesion,
infringe in any material respect any patents or other intellectual property
rights of any other party; and, to the knowledge of Cohesion, there is no
pending or threatened claim or litigation contesting the validity, ownership or
right to use, sell, license or dispose of any Cohesion IP Rights, or asserting
that any Cohesion IP Rights or the proposed use, sale, license or disposition
thereof, or the manufacture, use or sale of any products of Cohesion, conflicts
or will conflict with the rights of any other party.
(d) Cohesion has made available to Angiotech a worldwide list of all
patents, trade names, trademarks and service marks, and applications for any of
the foregoing owned or possessed by Cohesion and true and complete copies of
such materials have been made available to Angiotech.
(e) Cohesion has made available to Angiotech a true and complete
copy of its standard form of employee confidentiality agreement and taken
commercially reasonably necessary steps to ensure that all employees have
executed such an agreement. To the knowledge of Cohesion, all consultants or
third parties with access to proprietary information of Cohesion have executed
appropriate agreements or are otherwise under obligations not to disclose
confidential Cohesion IP Rights.
(f) Cohesion is neither aware nor does it have reason to believe
that any of its employees or consultants is obligated under any contract,
covenant or other agreement or commitment of any nature, or subject to any
judgment, decree or order of any court or administrative agency, that would
interfere with the use of such employee's or consultant's best efforts to
promote the interests of Cohesion or that would conflict with the business of
Cohesion as presently conducted or proposed to be conducted. Cohesion has not
entered into any agreement to indemnify any other person, including but not
limited to any employee or consultant of Cohesion, against any charge of
infringement, misappropriation or misuse of any intellectual property, other
than indemnification provisions contained in purchase orders, license
agreements, distribution agreements or other agreements arising in the ordinary
course of business. To the knowledge of Cohesion, all current and former
employees and consultants of
19
Cohesion having had a material role in developing Cohesion's medical devices
have signed valid and enforceable written assignments to Cohesion of any and all
rights or claims in any intellectual property that any such employee or
consultant has or may have by reason of any contribution, participation or other
role in the development, conception, creation, reduction to practice or
authorship of any invention, innovation, development or work of authorship or
any other intellectual property that is used in the business of Cohesion, and
Cohesion possesses signed copies of all such written assignments by such
employees and consultants.
3.19 TAXES
(a) For the purposes of this Agreement, "TAX" or "TAXES" refers to
any and all federal, state, local and foreign taxes, assessments and other
governmental charges, duties, impositions and liabilities relating to taxes,
including taxes based upon or measured by gross receipts, income, profits,
sales, use and occupation, and value added, ad valorem, transfer, franchise,
withholding, payroll, recapture, employment, excise and property taxes, together
with all interest, penalties and additions imposed with respect to such amounts.
For purposes of this Agreement, "TAX RETURN" or "TAX RETURNS" refers to all
federal, state and local and foreign returns, estimates, information statements
and reports relating to Taxes.
(b) Cohesion and each of its Subsidiaries have filed all material
Tax Returns required to be filed by them, and have paid (or Cohesion has paid on
behalf of each of its Subsidiaries) all Taxes due and payable as shown on such
Tax Returns. True and correct copies of all Tax Returns filed by Cohesion and
its Subsidiaries for the period beginning August 18, 1998 through the Closing
have been provided or made available to Angiotech. The most recent financial
statements contained in the Cohesion SEC Reports reflect an adequate reserve
(which reserves were established in accordance with GAAP) for the payment of all
Taxes of Cohesion and its Subsidiaries, accrued through the date of such
financial statements. To the actual knowledge of Xxxxxx X. Xxxxxxx, Cohesion's
Vice President, Finance and Controller, no deficiencies for any Taxes have been
proposed, asserted or assessed in writing against Cohesion or any of its
Subsidiaries. Any such deficiencies proposed, asserted or assessed that are
listed in the Cohesion Disclosure Statement are reflected by reserves maintained
in accordance with GAAP and are being contested in good faith and by appropriate
procedures.
(c) None of Cohesion and its Subsidiaries have filed any consent
agreement under Section 341(f) of the Code.
(d) None of Cohesion and its Subsidiaries have (i) received any
notice in writing that it is being audited by any taxing authority; (ii) granted
any presently operative waiver of any statute of limitations with respect to, or
any extension of a period for the assessment of, any Tax; (iii) granted to any
person a power of attorney with respect to Taxes, which power of attorney will
be in effect as of or following the Closing; (iv) received a written inquiry
regarding the filing of Tax Returns from a jurisdiction where it is not
presently filing Tax Returns; or (v) availed itself of any Tax amnesty or
similar relief in any taxing jurisdiction.
(e) Cohesion is not responsible for the Taxes of another Person
under Treasury Regulation Section 1.1502-6 or any analogous provision of
foreign, state or local law,
20
or under any contract, agreement or arrangement, other than for Taxes of its
Subsidiary under Treasury Regulation Section 1.1502-6.
(f) There is no lien for Taxes on any of the assets of Cohesion,
except for liens for Taxes not yet due and payable.
3.20 EMPLOYEE BENEFIT PLANS; ERISA
(a) Schedule 3.20 of the Cohesion Disclosure Statement sets forth a
complete list of each "employee pension benefit plan" as defined in Section 3(2)
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")
("PENSION PLANS"), "welfare benefit plan" as defined in Section 3(1) of ERISA
("WELFARE PLANS"), or stock bonus, stock option, restricted stock, stock
appreciation right, stock purchase, bonus, incentive, deferred compensation,
severance, holiday, or vacation plan, or any other employee benefit plan,
program, policy or arrangement covering employees (or former employees) employed
in the United States that either is maintained or contributed to by Cohesion or
any of its ERISA Affiliates (as hereinafter defined) or to which Cohesion or any
of its ERISA Affiliates is obligated to make payments or otherwise may have any
liability (collectively, the "EMPLOYEE BENEFIT PLANS") with respect to employees
or former employees of Cohesion or any of its ERISA Affiliates. For purposes of
this Agreement, "ERISA AFFILIATE" shall mean any person (as defined in Section
3(9) of ERISA) that is or has been a member of any group of persons described in
Section 414(b), (c), (m) or (o) of the Code, including without limitation
Cohesion.
(b) Cohesion and each of the Pension Plans and Welfare Plans, are in
compliance with the applicable provisions of ERISA, the Code and other
applicable laws, except where the failure to comply would not, individually or
in the aggregate, reasonably be expected to have a Cohesion Material Adverse
Effect.
(c) All contributions to, and payments from, the Pension Plans which
are required to have been made in accordance with the Pension Plans have been
timely made, except where the failure to make such contributions or payments on
a timely basis would not, individually or in the aggregate, reasonably be
expected to have a Cohesion Material Adverse Effect.
(d) To the knowledge of Cohesion, all of Cohesion's Pension Plans
intended to qualify under Section 401 of the Code so qualify and no event has
occurred and no condition exists with respect to the form or operation of such
Pension Plans which would cause the loss of such qualification or the imposition
of any material liability, penalty or tax under ERISA or the Code.
(e) To the knowledge of Cohesion, there are no (i) investigations
pending by any governmental entity involving the Pension Plans or Welfare Plans,
nor (ii) pending or threatened claims (other than routine claims for benefits),
suits or proceedings against any Pension Benefit or Welfare Plan, against the
assets of any of the trusts under any Pension Benefit or Welfare Plan or against
any fiduciary of any Pension Benefit or Welfare Plan with respect to the
operation of such plan or asserting any rights or claims to benefits under any
Pension Benefit Plan or against the assets of any trust under such plan, except
for those which would not,
21
individually or in the aggregate, give rise to any liability which would
reasonably be expected to have a Cohesion Material Adverse Effect. To the
knowledge of Cohesion, there are no facts which would give rise to any liability
under this Section 3.20(e) except for those which would not, individually or in
the aggregate, reasonably be expected to have a Cohesion Material Adverse Effect
in the event of any such investigation, claim, suit or proceeding.
(f) None of Cohesion, any employee of Cohesion, or to the knowledge
of Cohesion any trustee, administrator, other fiduciary or any other "party in
interest" or "disqualified person" with respect to the Pension Plans or Welfare
Plans, has engaged in a non-exempt "prohibited transaction" (as such term is
defined in Section 4975 of the Code or Section 406 of ERISA) other than such
transactions that would not, individually or in the aggregate, reasonably be
expected to have a Cohesion Material Adverse Effect.
(g) Neither Cohesion nor any of its ERISA Affiliates currently
maintain or contribute to any pension plan subject to Title IV of ERISA or
Section 412 of the Code or Section 302 of ERISA.
(h) Neither Cohesion nor any of its ERISA Affiliates has incurred
any material liability under Title IV of ERISA that has not been satisfied in
full.
(i) Neither Cohesion nor any of its ERISA Affiliates has any
material liability (including any contingent liability under Section 4204 of
ERISA) with respect to any multi-employer plan, within the meaning of Section
3(37) of ERISA, covering employees (or former employees) employed in the United
States.
(j) With respect to each of the Employee Benefit Plans, true,
correct and complete copies of the following documents have been made available
to Angiotech: (i) the plan document and any related trust agreement, including
amendments thereto, (ii) any current summary plan descriptions and other
material communications to participants relating to the Employee Benefit Plans,
(iii) the three most recent Forms 5500, if applicable, and (iv) the most recent
United States Internal Revenue Service ("IRS") determination letter, if
applicable.
(k) None of the Welfare Plans maintained by Cohesion provides for
continuing benefits or coverage for any participant or any beneficiary of a
participant following termination of employment, except as may be required under
COBRA, or except at the expense of the participant or the participant's
beneficiary. Cohesion has complied with the notice and continuation requirements
of Section 4980B of the Code, COBRA, Part 6 of Subtitle B of Title I of ERISA
and the regulations thereunder except where the failure to comply would not,
individually or in the aggregate, reasonably be expected to have a Cohesion
Material Adverse Effect.
(l) No liability under any Pension Benefit Plan or Welfare Plan has
been funded nor has any such obligation been satisfied with the purchase of a
contract from an insurance company as to which Cohesion has received notice that
such insurance company is in rehabilitation or a comparable proceeding.
(m) Except as provided in the Employee Benefit Plans, the
consummation of the transactions contemplated by this Agreement will not result
in an increase in the amount of
22
compensation or benefits or accelerate the vesting or timing of payment of any
benefits or compensation payable to or in respect of any employee of Cohesion.
(n) Except as set forth in Schedule 3.20(n) of the Cohesion
Disclosure Statement, Cohesion has not adopted and does not maintain or
contribute to any Foreign Plan. For purposes hereof, the term "FOREIGN PLAN"
shall mean any plan, program, policy, arrangement or agreement maintained or
contributed to by, or entered into with, Cohesion with respect to employees (or
former employees) employed outside the United States to the extent the benefits
provided thereunder are not mandated by the laws of the applicable foreign
jurisdiction.
3.21 ENVIRONMENTAL MATTERS
(a) For purposes of this Agreement:
(i) "CONTRACTOR" shall mean any person or entity, including
but not limited to partners, licensors, and licensees, with which Cohesion or
Angiotech, as the case may be, formerly or presently has any agreement or
arrangement (whether oral or written) under which such person or entity has or
had physical possession of, and was or is obligated to develop, test, process,
manufacture or produce any product or substance on behalf of Cohesion or
Angiotech, as the case may be.
(ii) "ENVIRONMENT" shall mean any land including, without
limitation, surface land and sub-surface strata, seabed or river bed and any
water (including, without limitation, coastal and inland waters, surface waters
and ground waters and water in drains and sewers) and air (including, without
limitation, air within buildings) and other natural or manmade structures above
or below ground.
(iii) "ENVIRONMENTAL LAW" means any law or regulation, now or
hereafter in effect and as amended, and any judicial or administrative
interpretation thereof, in each case relating to the Environment or harm to or
the protection of human health or animals or plants, including, without
limitation, laws relating to public and workers health and safety, emissions,
discharges or releases of chemicals or any other pollutants or contaminants or
industrial, radioactive, dangerous, toxic or hazardous substances or wastes
(whether in solid or liquid form or in the form of a gas or vapor and including
noise and genetically modified organisms) into the Environment or otherwise
relating to the manufacture processing use, treatment, storage, distribution,
disposal transport or handling of substances or wastes. Environmental Laws
include, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act, as amended ("CERCLA"), the Resource Conservation
and Recovery Act 42 USC, 6901 et seq., the Hazardous Materials Transportation
Act 49 USC, 6901 et seq., the Clean Water Act 33, 1251 et seq., the Toxic
Substances Control Act 15 USC, 2601 et seq., the Clean Air Act 42 USC, 7401 et
seq., the Safe Drinking Water Act 42 USC, 300f et seq., the Atomic Energy Act 42
USC, 2201 et seq., the Federal Food Drug and Cosmetic Act 21 USC, 136 et seq.,
and the Federal Food Drug and Cosmetic Act 21 USC, 301 et seq., or equivalent
statutes in countries other than the United States.
(iv) "ENVIRONMENTAL PERMIT" shall mean any permit, license,
consent, approval, certificate, qualification, specification, registration and
other authorization, and the
23
filing of all notifications, reports and assessments, required by any federal,
state, local or foreign government or regulatory entity pursuant to any
Environmental Law.
(v) "HAZARDOUS MATERIAL" shall mean any pollutant,
contaminant, or hazardous, toxic, medical, biohazardous, infectious or dangerous
waste, substance, gas, constituent or material, defined or regulated as such in,
or for purposes of, any Environmental Law, including, without limitation, any
asbestos, any petroleum, oil (including crude oil or any fraction thereof), any
radioactive substance, any polychlorinated biphenyls, any toxin, chemical,
virus, infectious disease or disease causing agent, and any other substance that
can give rise to liability under any Environmental Law.
(b) Except for such cases that, individually or in the aggregate,
have not and would not reasonably be expected to have a Cohesion Material
Adverse Effect:
(i) To the knowledge of Cohesion, Cohesion possesses all
Environmental Permits required under applicable Environmental Laws to conduct
its current business and to use and occupy the Cohesion Real Property (as
hereinafter defined) for its current business. All Environmental Permits are in
full force and effect and Cohesion is, and to the knowledge of Cohesion, have at
all times been, in material compliance with the terms and conditions of such
Environmental Permits.
(ii) There are no facts or circumstances indicating that any
Environmental Permits possessed by Cohesion would or might be revoked,
suspended, canceled or not renewed, and all appropriate necessary action in
connection with the renewal or extension of any Environmental Permits possessed
by Cohesion relating to the current business and the Cohesion Real Property (as
hereinafter defined) has been taken.
(iii) The execution and delivery of this Agreement and the
consummation by Cohesion of the Merger and other transactions contemplated
hereby and the exercise by Angiotech and the Surviving Corporation of rights to
own and operate the business of Cohesion and use and occupy the Real Property
(as hereinafter defined) and carry on its business substantially as presently
conducted will not affect the validity or require the transfer of any
Environmental Permits held by Cohesion and will not require any notification,
disclosure, registration, reporting, filing, investigation or remediation under
any Environmental Law.
(iv) Real property now or previously owned, leased or occupied
by Cohesion (the "COHESION REAL PROPERTY") is, to the knowledge of Cohesion, in
compliance with, and within the period of all applicable statutes of limitation,
has materially complied with all applicable Environmental Laws and has not
received notice of any unresolved liability under any Environmental Law; and
neither Cohesion, nor to the knowledge of Cohesion, is any portion of the Real
Property in violation of any Environmental Law.
(v) Cohesion has not received written notice of any civil,
criminal or administrative action, suit, demand, claim, complaint, hearing,
notice of violation, investigation, notice or demand letter, proceeding or
request for information pending or any liability (whether actual or contingent)
directed to Cohesion, under any Environmental Law, to make good, repair,
reinstate or clean up any of the Cohesion Real Property or any real property
previously owned,
24
leased, occupied or used by Cohesion. To the knowledge of Cohesion, there is no
act, omission, event or circumstance giving rise or likely to give rise in the
future to any such action, suit, demand, claim, complaint, hearing, notice of
violation, investigation, notice or demand letter, proceeding, or request or any
such liability or other liabilities (A) against Cohesion, or (B) against any
person or entity, including but not limited to any Contractor, in connection
with which liability could reasonably be imputed or attributed by law or
contract to Cohesion.
(vi) There has not been any disposal, spill, discharge, or
release of any Hazardous Material generated, used, owned, stored, or controlled
by Cohesion or its predecessors in interest, on, at, or under any property
presently or formerly owned, leased, or operated by Cohesion, any predecessor in
interest, or any Contractor, during the time of Cohesion or predecessors owned,
leased or operated such property and there are no Hazardous Materials located
in, at, on, or under, or in the vicinity of, any such facility or property, or
at any other location, in either case that could reasonably be expected to
require investigation, removal, remedial, or corrective action by Cohesion or
that would reasonably likely result in liability of, or costs in excess of, US
$100,000, individually or in the aggregate, to Cohesion under any Environmental
Law.
(vii) (A) Other than cleaning and office supplies normally
used in the operation of an office, Hazardous Materials have not been generated,
used, treated, handled or stored on, or transported to or from, or released on
any Cohesion Real Property or, any property adjoining any Cohesion Real Property
by Cohesion in material violation of any Environmental Law; (B) Cohesion has
disposed of all wastes, including those wastes containing Hazardous Materials,
in compliance with all applicable Environmental Law and Environmental Permits;
and (C) to the knowledge of Cohesion, Cohesion has not transported or arranged
for the transportation of any Hazardous materials to any location that is listed
or proposed for listing on the National Priorities List under CERCLA or on the
Comprehensive Environmental Response, Compensation and Liability Act Information
System ("CERCLIS") or any analogous state or country list or which is the
subject of any environmental claim.
(viii) There has not been any underground or aboveground
storage tank or other underground storage receptacle or related piping, or any
impoundment or other disposal area containing Hazardous Materials located on any
Cohesion Real Property owned, leased or operated by Cohesion or its predecessors
in interest during the period of such ownership, lease or operation, and no
asbestos or polychlorinated biphenyls have been used or disposed of, or have
been located at, on, or under any such facility or property during the period of
such ownership lease or operation;
(ix) Cohesion has taken all actions necessary under applicable
requirements of Environmental Law to register any products or materials required
to be registered by Cohesion (or any of its agents) thereunder.
(c) After a reasonable investigation made by Cohesion, Cohesion has
made available to Angiotech all material, non-privileged records and files
requested in writing by Angiotech, including, but not limited to, all
assessments, reports, studies, audits, analyses, tests and data in possession of
Cohesion concerning the existence of Hazardous Materials at facilities or
properties currently or formerly owned, operated, or leased by Cohesion or a
former
25
Subsidiary or a predecessor in interest, or concerning compliance by Cohesion
with, or liability under, any Environmental Law.
3.22 AFFILIATES
Cohesion has delivered to Angiotech in accordance with Section 5.9 a list
identifying all Persons, who to the knowledge of Cohesion, may be deemed to be
"affiliates" of Cohesion for purposes of Rule 145 under the Securities Act
("AFFILIATES").
3.23 FINDERS OR BROKERS
Except for U.S. Bancorp Xxxxx Xxxxxxx Inc., and pursuant to the provisions
of the Waiver Agreement, in each case which fees have been disclosed to
Angiotech, Cohesion has not employed any investment banker, broker, finder or
intermediary in connection with the transactions contemplated hereby who might
be entitled to a fee or any commission the receipt of which is conditioned upon
consummation of the Merger.
3.24 REGISTRATION STATEMENT; PROXY STATEMENT/PROSPECTUS
The information supplied by Cohesion expressly for the purpose of
including the information or incorporating the information by reference in the
Registration Statement on Form F-4 registering the Angiotech Common Stock to be
issued in connection with the Merger (the "REGISTRATION STATEMENT") as it
relates to Cohesion, at the time the Registration Statement is declared
effective by the SEC, shall not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading. The information supplied by
Cohesion expressly for the purpose of including the information in the proxy
statement/prospectus to be sent to Cohesion's stockholders in connection with
the Cohesion Stockholder Meeting (such proxy statement/prospectus, as amended
and supplemented is referred to herein as the "PROXY STATEMENT/PROSPECTUS"), at
the date the Proxy Statement/Prospectus is first mailed to stockholders, at the
time of the Cohesion Stockholder Meeting and at the Effective Time shall not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. If at any time prior to the Effective Time any event with respect to
Cohesion shall occur which is required to be described in the Proxy
Statement/Prospectus, such event shall be so described, and an amendment or
supplement shall be promptly filed with the SEC and, as required by law,
disseminated to Cohesion's stockholders. Notwithstanding the foregoing, Cohesion
makes no representation or warranty with respect to any information supplied by
Angiotech or Merger Sub which is contained in the Registration Statement or
Proxy Statement/Prospectus.
3.25 PROPERTY; EQUIPMENT; LEASEHOLD
All material items of equipment and other tangible assets owned by or
leased to Cohesion are adequate for the use to which they are being put, are in
safe condition and good repair and are adequate for the conduct of the business
of Cohesion in the manner in which such business is currently being conducted.
Except as set forth on Schedule 3.25 of the Cohesion Disclosure Statement,
Cohesion does not own any real property or any interest in real property.
26
Schedule 3.25 of the Cohesion Disclosure Statement contains an accurate and
complete list of all of Cohesion's real property leases and any and all
amendments thereto.
3.26 AMENDMENT TO RIGHTS AGREEMENT
As of the date hereof, Cohesion has taken all action necessary to (i)
amend the Rights Agreement to provide that neither Angiotech nor Merger Sub nor
any of their respective affiliates shall be deemed to be an Acquiring Person (as
such term is defined in the Rights Agreement), that neither a Distribution Date
nor Shares Acquisition Date (as each such term is defined in the Rights
Agreement) shall be deemed to occur and the rights issued under the Rights
Agreement will not separate from Cohesion Common Stock, in each case as a result
of the execution, delivery or performance of this Agreement, the Cohesion Voting
Agreements or the public announcement or consummation of the Merger, or the
other transactions contemplated by this Agreement or the Cohesion Voting
Agreements and (ii) amend the Rights Agreement to provide for the expiration of
the rights issued under the Rights Agreement as of the Effective Time.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ANGIOTECH AND MERGER SUB
Angiotech and Merger Sub make to Cohesion the representations and
warranties contained in this Article IV, in each case subject to the exceptions
set forth in the disclosure statement, dated as of the date hereof (the
"ANGIOTECH DISCLOSURE STATEMENT"). The Angiotech Disclosure Statement shall be
arranged in schedules corresponding to the numbered and lettered Sections of
this Article IV, and the disclosure on any Schedule of the Angiotech Disclosure
Statement shall only qualify the corresponding Section of this Article IV,
unless the disclosure contained in such Section contains such information so as
to enable a reasonable person to determine that such disclosure qualifies or
otherwise applies to other Sections of this Article IV.
4.1 ORGANIZATION, ETC.
(a) Each of Angiotech, its Subsidiaries set forth on Section 4.1(a)
of the Angiotech Disclosure Statement (the "ANGIOTECH SUBSIDIARIES") and Merger
Sub is a corporation duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation and has all requisite power
and authority to own, lease and operate its properties and to carry on its
business as now being conducted. Angiotech and each Angiotech Subsidiary are
duly qualified as a foreign Person to do business, and are each in good
standing, in each jurisdiction where the character of its owned or leased
properties or the nature of its activities makes such qualification necessary,
except where the failure to be so qualified or in good standing would not,
individually and in the aggregate, have an Angiotech Material Adverse Effect.
For the purposes of this Agreement, "ANGIOTECH MATERIAL ADVERSE
EFFECT" means any change, event, or effect that has had or would reasonably be
expected to have a material adverse effect on (i) the business, results of
operations, or financial condition of Angiotech and its Subsidiaries, taken as a
whole, or (ii) the ability of Angiotech to consummate the Merger or
27
any of the transactions contemplated by the Agreement or to perform any of its
obligations under the Agreement before the End Date. Notwithstanding the
foregoing, with respect to item (i) above, none of the following shall be deemed
(either alone or in combination) to constitute, and none of the following shall
be taken into account in determining whether there has been or will be, a
Angiotech Material Adverse Effect: (A) any adverse change, event or effect
arising from or relating to general business or economic conditions; (B) any
adverse change, event or effect relating to or affecting the medical device
industry generally; and (C) any adverse change, event or effect arising from or
relating to the announcement or pendency of the Merger, including, but not
limited to, changes or effects which result from the loss of customers or delay,
cancellation or cessation of orders for Angiotech's products.
(b) Neither Angiotech, the Angiotech Subsidiaries nor Merger Sub is
in violation of any provision of its certificate of incorporation, bylaws or
other charter documents.
4.2 AUTHORITY RELATIVE TO THIS AGREEMENT
Each of Angiotech and Merger Sub has full corporate power and authority to
execute and deliver this Agreement and to consummate the Merger and the other
transactions contemplated hereby. The execution and delivery of this Agreement,
and the consummation of the Merger and the other transactions contemplated
hereby have been duly and validly authorized by the board of directors of each
of Angiotech and Merger Sub and no other corporate proceedings on the part of
either Angiotech or Merger Sub are necessary to authorize this Agreement or to
consummate the Merger and the other transactions contemplated hereby. This
Agreement has been duly and validly executed and delivered by Angiotech and
Merger Sub and, assuming due authorization, execution and delivery by Cohesion,
constitutes a valid and binding agreement of each of Angiotech and Merger Sub,
enforceable against each of them in accordance with its terms, except to the
extent that its enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting the enforcement
of creditors' rights generally or by general equitable principles. No approval
of the stockholders of Angiotech is required under applicable law, Angiotech's
certificate of incorporation and bylaws, the rules of Nasdaq and the Toronto
Stock Exchange and any other applicable legal requirement in connection with the
execution and delivery of this Agreement by Angiotech and Merger Sub, the
performance of their respective obligations hereunder and the consummation of
the Merger and the other transactions contemplated hereby.
4.3 NO VIOLATIONS, ETC
No filing with or notification to, and no permit, authorization, consent
or approval of, any Government Entity or any Person is necessary on the part of
either Angiotech or Merger Sub for the consummation by Angiotech or Merger Sub
of the Merger or the other transactions contemplated hereby, except for (i) the
filing of the Certificate of Merger as required by the Delaware Law, (ii) the
filing with the SEC and the effectiveness of the Registration Statement, (iii)
the applicable requirements of the Exchange Act, state securities or "blue sky"
laws, state takeover laws and the listing requirements of the Nasdaq, (iv) any
filings required under and in compliance with the HSR Act, and (v) where the
failure to make such filing or notification or to obtain such permit,
authorization, consent or approval would not prevent or materially delay the
Merger, or otherwise prevent or materially delay Angiotech or Merger Sub from
performing their
28
obligations under this Agreement or, individually or in the aggregate, have an
Angiotech Material Adverse Effect. Neither the execution and delivery of this
Agreement, nor the consummation of the Merger or the other transactions
contemplated hereby, nor compliance by Angiotech and Merger Sub with all of the
provisions hereof will (i) conflict with or result in any breach of any
provision of the certificate of incorporation, bylaws or other charter documents
of Angiotech or any Angiotech Subsidiary, (ii) violate any material order, writ,
injunction, decree, statute, rule or regulation applicable to Angiotech or any
Angiotech Subsidiary, or by which any of their properties or assets may be
bound, or (iii) result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default under, or result in any
material change in, or give rise to any right of termination, cancellation,
acceleration, redemption or repurchase under, any of the terms, conditions or
provisions of any material note, bond, mortgage, indenture, deed of trust,
license, lease, contract, agreement or other instrument or obligation to which
Angiotech or any Angiotech Subsidiary is a party or by which any of them or any
of their properties or assets may be bound.
4.4 CAPITALIZATION
The authorized capital stock of Angiotech consists of 200,000,000 shares
of Common Stock, no par value, of which there were 15,731,867 shares issued and
outstanding as of September 24, 2002, and 50,000,000 shares of Class I
Preference stock, no par value, of which no shares are issued or outstanding.
Except as set forth on Schedule 4.4 of the Angiotech Disclosure Statement, there
are no warrants, options, convertible securities, calls, rights, stock
appreciation rights, preemptive rights, rights of first refusal, or agreements
or commitments of any nature obligating Angiotech to issue, deliver or sell, or
cause to be issued, delivered or sold, additional shares of capital stock or
other equity interests of Angiotech, or obligating Angiotech to grant, issue,
extend, accelerate the vesting of, or enter into, any such warrant, option,
convertible security, call, right, stock appreciation right, preemptive right,
right of first refusal, agreement or commitment. The authorized capital stock of
Merger Sub consists of 100 shares of Common Stock, $0.001 par value, all of
which are issued and outstanding and are held by Angiotech. Merger Sub was
formed for the purpose of consummating the Merger and has no material assets or
liabilities except as necessary for such purpose. All outstanding shares of
Angiotech Common Stock are duly authorized, validly issued, fully paid and
nonassessable and are not subject to preemptive rights created by statute, the
certificate of incorporation or bylaws of Angiotech or any agreement to which
Angiotech is a party or by which it is bound.
4.5 REGISTRATION STATEMENT; PROXY STATEMENT/PROSPECTUS
The information supplied by Angiotech and Merger Sub expressly for the
purpose of including the information, or incorporating the information by
reference, in the Registration Statement or Proxy Statement/Prospectus as it
relates to Angiotech or Merger Sub, at the time the Registration Statement is
declared effective by the SEC, at the time of the Cohesion Stockholder Meeting,
at the Effective Time and at the date the Proxy Statement/Prospectus is first
mailed to stockholders, shall not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading. If at any time
prior to the Effective Time any event shall occur which is required to be
described in the Registration Statement or Proxy Statement/Prospectus, such
event shall be so described, and an amendment or supplement shall be promptly
filed with the SEC
29
and, as required by law, disseminated to Cohesion's stockholders.
Notwithstanding the foregoing, Angiotech makes no representation or warranty
with respect to any information supplied by Cohesion which is contained in the
Registration Statement or Proxy Statement/Prospectus.
4.6 SEC FILINGS
Angiotech has filed with the SEC all required forms, reports, registration
statements and documents required to be filed by it with the SEC (collectively,
all such forms, reports, registration statements and documents filed after
January 1, 2001 are referred to herein as the "ANGIOTECH SEC REPORTS"), all of
which complied as to form when filed in all material respects with the
applicable provisions of the Securities Act and the Exchange Act, as the case
may be. Accurate and complete copies of the Angiotech SEC Reports have been made
available to Cohesion. As of their respective dates, the Angiotech SEC Reports
(including all exhibits and schedules thereto and documents incorporated by
reference therein) 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 therein, in light of the circumstances under which they were
made, not misleading.
4.7 FINANCIAL STATEMENTS
Each of the consolidated financial statements (including, in each case,
any related notes thereto) contained in the Angiotech SEC Reports (the
"ANGIOTECH FINANCIAL STATEMENTS"), (x) was prepared in accordance with Canadian
GAAP applied on a consistent basis throughout the periods involved (except as
may be indicated in the notes thereto or, in the case of unaudited interim
financial statements, as may be permitted by the SEC on Form 6-K under the
Exchange Act) and (y) fairly presented the consolidated financial position of
Angiotech and each Angiotech Subsidiary as of the respective dates thereof and
the consolidated results of its operations and cash flows for the periods
indicated, consistent with the books and records of Angiotech, except that the
unaudited interim financial statements were or are subject to normal and
recurring year-end adjustments which were not, or are not expected to be,
material in amount. The balance sheet of Angiotech for the fiscal quarter ended
June 30, 2002 is hereinafter referred to as the "ANGIOTECH BALANCE SHEET."
4.8 ABSENCE OF UNDISCLOSED LIABILITIES
Neither Angiotech nor any Angiotech Subsidiary has any liabilities
(absolute, accrued, contingent or otherwise) other than (i) liabilities included
in the Angiotech Balance Sheet and the related notes to the financial
statements, (ii) normal or recurring liabilities incurred since June 30, 2002 in
the ordinary course of business and consistent with past practice, which,
individually or in the aggregate, are not or would not be reasonably likely to
have, an Angiotech Material Adverse Effect, and (iii) under this Agreement.
4.9 ABSENCE OF CHANGES OR EVENTS
Except as contemplated by this Agreement, since June 30, 2002, Angiotech
has not incurred suffered or made any of the following: (a) an Angiotech
Material Adverse Effect; (b) a declaration, setting aside or payment of any
dividend on, or other distribution (whether in
30
cash, stock or property) in respect of, any of Angiotech or its Subsidiaries'
capital stock, or any purchase, redemption or other acquisition by Angiotech of
any shares of Angiotech's capital stock or other securities of Angiotech or its
Subsidiaries or any options, warrants, calls or rights to acquire any such
shares or other securities, except for repurchases which are not, individually
or in the aggregate, material in amount from employees following their
termination pursuant to the terms of their pre-existing stock option or purchase
agreements; (c) a material change by Angiotech in its accounting methods,
principles or practices, except as required by concurrent changes in Canadian
GAAP; (d) a material revaluation by Angiotech of any of its material assets,
including writing off notes or accounts receivable other than in the ordinary
course of business; or (e) any amendment to Angiotech's certificate of
incorporation or bylaws, or execution of any agreement with respect to, or
consummation of, any merger, consolidation, share exchange, business combination
or recapitalization.
4.10 LITIGATION
(a) There is no Action pending or, to the knowledge of Angiotech,
threatened against Angiotech or any Angiotech Subsidiary, or any of their
respective officers and directors (in their capacities as such), or involving
any of their assets, before any court, or governmental or regulatory authority
or body, or arbitration tribunal, except for those Actions which, individually
or in the aggregate, would not have an Angiotech Material Adverse Effect. There
is no Action pending or, to the knowledge of Angiotech, threatened which in any
manner challenges, seeks to, or is reasonably likely to prevent, enjoin, alter
or delay the transactions anticipated by this Agreement.
(b) There is no outstanding judgment, order, writ, injunction or
decree of any court, governmental or regulatory authority or body, or
arbitration tribunal in a proceeding to which Angiotech, any of its
Subsidiaries, or any of their assets is or was a party or by which Angiotech,
any of its Subsidiaries, or any of their assets is bound.
4.11 COMPLIANCE WITH LAWS
(a) Neither Angiotech nor any Angiotech Subsidiary has violated or
failed to comply with any statute, law, ordinance, rule or regulation
(including, without limitation, relating to the export or import of goods or
technology) of any foreign, federal, provincial, state or local government or
any other governmental department or agency, except where any such violations or
failures to comply would not, individually or in the aggregate, have an
Angiotech Material Adverse Effect. Angiotech and Merger Sub have all permits,
licenses and franchises from governmental agencies required to conduct their
businesses as now being conducted and as proposed to be conducted, except for
those the absence of which would not, individually or in the aggregate, have an
Angiotech Material Adverse Effect.
(b) Except as would not, individually or in the aggregate, have an
Angiotech Material Adverse Effect, each of Angiotech and its Subsidiaries is in
possession of all franchises, grants, authorizations, licenses, establishment
registrations, product listings, permits, easements, variances, exceptions,
consents, certificates, approvals and orders of any Government Entity,
including, without limitation, the FDA, the DEA and similar authorities in the
U.S. and non-U.S. jurisdictions necessary for Angiotech or its Subsidiaries to
own, lease and operate its properties
31
or to develop, produce, store, distribute, promote and sell its products or
otherwise to carry on its business as it is now being conducted (the "ANGIOTECH
PERMITS"), and, as of the date of this Agreement, no suspension or cancellation
of any of the Angiotech Permits is pending or, to the knowledge of Angiotech,
threatened, except where the failure to have, or the suspension or cancellation
of, any of the Angiotech Permits would not, individually or in the aggregate,
have an Angiotech Material Adverse Effect. Except for conflicts, defaults or
violations which, individually or in the aggregate, would not have an Angiotech
Material Adverse Effect, neither Angiotech nor any of its Subsidiaries is in
conflict with, or in default of, (i) any law applicable to Angiotech or any of
its Subsidiaries or by which any property, asset or product of Angiotech or any
of its Subsidiaries is bound or affected, including, without limitation, the
FDCA, the CDAPCA, the CSA and any other similar act or law or (ii) any Angiotech
Permits.
(c) Except as would not, individually or in the aggregate, have an
Angiotech Material Adverse Effect:
(i) all manufacturing operations of Angiotech and its
Subsidiaries are being conducted in substantial compliance with applicable
good manufacturing practices;
(ii) all necessary clearances or approvals from governmental
agencies for all device products which are manufactured or sold by Angiotech and
its Subsidiaries have been obtained, and each of Angiotech and its Subsidiaries
are in substantial compliance with the most current form of each applicable
clearance or approval with respect to the development, production, storage,
distribution, promotion and sale by Angiotech and its Subsidiaries of such
products;
(iii) all of the clinical studies which have been, or are
being conducted by or for Angiotech and its Subsidiaries, are being conducted in
substantial compliance with generally accepted good clinical practices and all
applicable government regulatory, statutory and other requirements; and
(iv) neither Angiotech nor any of its Subsidiaries has
received any written notice that the FDA or any governmental agency (including,
without limitation, non-U.S. regulatory agencies) has commenced, or threatened
to initiate, any action to withdraw its approval or request the recall of any
product of Angiotech or any of its Subsidiaries, or commenced, or overtly
threatened to initiate, any action to enjoin production at any facility of
Angiotech or any of its Subsidiaries.
4.12 ENVIRONMENTAL MATTERS
(a) Except for such cases that, individually or in the aggregate,
have not and would not reasonably be expected to have an Angiotech Material
Adverse Effect:
(i) Each of Angiotech and its Subsidiaries, to the knowledge
of Angiotech, possesses all Environmental Permits required under applicable
Environmental Laws to conduct its current business and to use and occupy the
Angiotech Real Property (as hereinafter defined) for its current business. All
Environmental Permits are in full force and effect and Angiotech and its
Subsidiaries are, and to the knowledge of Angiotech, have at all times been, in
material compliance with the terms and conditions of such Environmental Permits.
32
(ii) There are no facts or circumstances indicating that any
Environmental Permits possessed by Angiotech or any of its Subsidiaries would or
might be revoked, suspended, canceled or not renewed, and all appropriate
necessary action in connection with the renewal or extension of any
Environmental Permits possessed by Angiotech or any of its Subsidiaries relating
to the current business and the Angiotech Real Property has been taken.
(iii) The execution and delivery of this Agreement and the
consummation by Angiotech of the Merger and other transactions contemplated
hereby and the exercise by Angiotech and the Surviving Corporation of rights to
own and operate the business of Cohesion and its Subsidiaries and use and occupy
the Angiotech Real Property and carry on its business substantially as presently
conducted will not affect the validity or require the transfer of any
Environmental Permits held by Angiotech or any of its Subsidiaries and will not
require any notification, disclosure, registration, reporting, filing,
investigation or remediation under any Environmental Law.
(iv) Real property now or previously owned, leased or occupied
by Angiotech and each of its Subsidiaries (the "ANGIOTECH REAL PROPERTY") is, to
the knowledge of Angiotech, in compliance with, and within the period of all
applicable statutes of limitation, has materially complied with all applicable
Environmental Laws and has not received notice of any unresolved liability under
any Environmental Law; and neither Angiotech, any of its Subsidiaries nor, to
the knowledge of Angiotech, is any portion of the Angiotech Real Property in
violation of any Environmental Law.
(v) Neither Angiotech nor its Subsidiaries has received
written notice of any civil, criminal or administrative action, suit, demand,
claim, complaint, hearing, notice of violation, investigation, notice or demand
letter, proceeding or request for information pending or any liability (whether
actual or contingent), directed to Angiotech or any of its Subsidiaries, under
any Environmental Law, to make good, repair, reinstate or clean up any of the
Angiotech Real Property or any real property previously owned, leased, occupied
or used by Angiotech or any of its Subsidiaries. To the knowledge of Angiotech,
there is no act, omission, event or circumstance giving rise or likely to give
rise in the future to any such action, suit, demand, claim, complaint, hearing,
notice of violation, investigation, notice or demand letter, proceeding, or
request or any such liability or other liabilities (A) against Angiotech or any
of its Subsidiaries, or (B) against any person or entity, including but not
limited to any Contractor, in connection with which liability could reasonably
be imputed or attributed by law or contract to Angiotech or any of its
Subsidiaries.
(vi) There has not been any disposal, spill, discharge, or
release of any Hazardous Material generated, used, owned, stored, or controlled
by Angiotech, or any of its Subsidiaries, or respective predecessors in
interest, on, at, or under any property presently or formerly owned, leased, or
operated by Angiotech, any of its Subsidiaries, any predecessor in interest, or
any Contractor, during the time Angiotech or any of its Subsidiaries or
predecessors owned, leased or operated such property, and there are no Hazardous
Materials located in, at, on, or under, or in the vicinity of, any such facility
or property, or at any other location, in either case that could reasonably be
expected to require investigation, removal, remedial, or corrective action by
Angiotech or any of its Subsidiaries or that would reasonably likely result in
liability
33
of, or costs in excess of, $100,000, individually or in the aggregate, to
Angiotech or any of its Subsidiaries under any Environmental Law.
(vii) (A) Other than cleaning and office supplies normally
used in the operation of an office, Hazardous Materials have not been generated,
used, treated, handled or stored on, or transported to or from, or released on
any Angiotech Real Property or, any property adjoining any Angiotech Real
Property by Angiotech or its Subsidiaries in material violation of any
Environmental Law; (B) Angiotech and its Subsidiaries have disposed of all
wastes, including those wastes containing Hazardous Materials, in material
compliance with all applicable Environmental Law and Environmental Permits; and
(C) to the knowledge of Angiotech, neither Angiotech nor any of its Subsidiaries
has transported or arranged for the transportation of any Hazardous materials to
any location that is listed or proposed for listing on the National Priorities
List under CERCLA or on the CERCLIS or any analogous state or country list or
which is the subject of any environmental claim.
(viii) There has not been any underground or aboveground
storage tank or other underground storage receptacle or related piping, or any
impoundment or other disposal area containing Hazardous Materials located on any
Angiotech Real Property owned, leased or operated by Angiotech, any of its
Subsidiaries, or respective predecessors in interest during the period of such
ownership, lease or operation.
(ix) Angiotech and its Subsidiaries have taken all actions
necessary under applicable requirements of Environmental Law to register any
products or materials required to be registered by Angiotech or any of its
Subsidiaries (or any of their respective agents) thereunder.
(b) After a reasonable investigation made by Angiotech, Angiotech
has made available to Cohesion all material, non-privileged records and files
requested in writing by Cohesion, including, but not limited to, all
assessments, reports, studies, audits, analyses, tests and data in possession of
Angiotech and its Subsidiaries concerning the existence of Hazardous Materials
at facilities or properties currently or formerly owned, operated, or leased by
Angiotech or any present or former Subsidiary or predecessor in interest, or
concerning compliance by Angiotech and its Subsidiaries with, or liability
under, any Environmental Law.
4.13 INTELLECTUAL PROPERTY RIGHTS
(a) Angiotech and the Angiotech Subsidiaries own or have the right
to use all intellectual property which is material to the conduct of their
respective businesses (such intellectual property and such rights are
collectively referred to herein as the "ANGIOTECH IP RIGHTS").
(b) To the knowledge of Angiotech, the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby will not constitute a material breach of any instrument or
agreement governing any material Angiotech IP Rights, and will not (i) cause the
modification of any terms of any licenses or agreements relating to any material
Angiotech IP Rights including, but not limited to, the modification of the
effective rate of any royalties or other payments provided for in any such
license or agreement,
34
(ii) cause the forfeiture or termination of any material Angiotech IP Rights,
(iii) give rise to a right of forfeiture or termination of any material
Angiotech IP Rights or (iv) materially impair the right of Cohesion, the
Surviving Corporation or Angiotech to use, sell or license any material
Angiotech IP Rights or portion thereof.
(c) The manufacture, marketing, license, sale or use by Angiotech of
any product or technology currently licensed or sold by Angiotech or any of its
Subsidiaries does not (i) violate in any material respect any license or
agreement between Angiotech or any of its Subsidiaries and any other party or
(ii) to the knowledge of Angiotech, infringe in any material respect any patents
or other intellectual property rights of any other party; and, to the knowledge
of Angiotech or its Subsidiaries, there is no pending or threatened claim or
litigation contesting the validity, ownership or right to use, sell, license or
dispose of any of the Angiotech IP Rights, or asserting that the proposed use,
sale, license or disposition thereof, or the manufacture, use or sale of any
Angiotech IP Rights, or asserting that any Angiotech IP Rights or the proposed
use, sale, license or disposition thereof, or the manufacture, use or sale of
any products of Angiotech will conflict with the rights of any other party.
(d) Angiotech has made available to Cohesion a worldwide list of all
patents, trade names, trademarks and service marks, and applications for any of
the foregoing owned or possessed by Angiotech or any of its Subsidiaries and
true and complete copies of such materials have been made available to Cohesion.
(e) Angiotech has made available to Cohesion a true and complete
copy of its standard form of employee confidentiality agreement and taken
commercially reasonably necessary steps to ensure that all employees have
executed such an agreement. To the knowledge of Angiotech, all consultants or
third parties with access to proprietary information of Angiotech have executed
appropriate agreements or are otherwise under obligations not to disclose
confidential Angiotech IP Rights.
(f) To the knowledge of Angiotech, neither Angiotech nor any of its
Subsidiaries is aware or has reason to believe that any of its employees or
consultants is obligated under any contract, covenant or other agreement or
commitment of any nature, or subject to any judgment, decree or order of any
court or administrative agency, that would interfere with the use of such
employee's or consultant's best efforts to promote the interests of Angiotech
and its Subsidiaries or that would conflict with the business of Angiotech as
presently conducted or proposed to be conducted. To the knowledge of Angiotech,
neither Angiotech nor any of its Subsidiaries has entered into any agreement to
indemnify any other person, including but not limited to any employee or
consultant of Angiotech or of any of its Subsidiaries, against any charge of
infringement, misappropriation or misuse of any intellectual property, other
than indemnification provisions contained in purchase orders, license
agreements, distribution agreements or other agreements arising in the ordinary
course of business. To the knowledge of Angiotech, all current and former
employees and consultants of any of Angiotech or of any of its Subsidiaries
having had a material role in developing Angiotech's medical devices and
pharmaceutical products have signed valid and enforceable written assignments to
Angiotech or its Subsidiaries of any and all rights or claims in any
intellectual property that any such employee or consultant has or may have by
reason of any contribution, participation or other role in the development,
conception, creation, reduction to practice or authorship of any invention,
35
innovation, development or work of authorship or any other intellectual property
that is used in the business of Angiotech and its Subsidiaries, and Angiotech
and its Subsidiaries possess signed copies of all such written assignments by
such employees and consultants.
4.14 OWNERSHIP OF MERGER SUB; NO PRIOR ACTIVITIES
(a) Merger Sub was formed solely for the purpose of engaging in the
transactions contemplated by this Agreement. All of the outstanding capital
stock of Merger Sub is owned of record and beneficially by Angiotech.
(b) Except for obligations or liabilities incurred in connection
with its incorporation or organization and the transactions contemplated by this
Agreement, Merger Sub has not and will not have prior to the Effective Time
incurred, directly or indirectly, through any Subsidiary or Affiliate, any
obligations or liabilities or engaged in any business activities of any type or
kind whatsoever or entered into any agreements or arrangements with any person.
Merger Sub has no Subsidiaries.
ARTICLE V
COVENANTS
5.1 CONDUCT OF BUSINESS DURING INTERIM PERIOD
Except as contemplated or required by this Agreement or as expressly
consented to in writing by Angiotech (which consent shall not be unreasonably
withheld, conditioned or delayed), during the period from the date of this
Agreement to the earlier of the termination of this Agreement or the Effective
Time, Cohesion will (i) conduct its operations according to its ordinary and
usual course of business and consistent with past practice, (ii) use
commercially reasonable efforts to preserve intact its business organization, to
keep available the services of its officers and employees in each business
function and to maintain satisfactory relationships with suppliers,
distributors, customers and others having business relationships with it, and
(iii) not take any action which would adversely affect its ability to consummate
the Merger or the other transactions contemplated hereby. Without limiting the
generality of the foregoing, and except as otherwise expressly provided in this
Agreement, prior to the earlier of the termination of this Agreement or
Effective Time, Cohesion will not, without the prior written consent of
Angiotech (which consent shall not be unreasonably withheld, conditioned or
delayed), directly or indirectly, do any of the following:
(a) purchase, otherwise acquire, or agree to purchase or otherwise
acquire any shares of capital stock of Cohesion, or declare, set aside or pay
any dividend or otherwise make a distribution (whether in cash, stock, property
or any combination thereof) in respect of their capital stock (other than
dividends or other distributions payable solely to Cohesion or its wholly-owned
Subsidiary or repurchases of shares from employees in connection with the
termination of employment (for any reason) in accordance with agreements
outstanding or policies existing on the date hereof, or entered into thereafter
in the ordinary course of business and consistent with past practice);
36
(b) (i) create or incur any indebtedness for borrowed money
exceeding US $100,000 in the aggregate other than ordinary course trade payables
or pursuant to existing credit facilities in the ordinary course of business, or
(ii) except as set forth in Section 5.1(b) of the Cohesion Disclosure Statement,
assume, guarantee, endorse or otherwise, as an accommodation, become responsible
for the obligations of any other Person, make any loans or advances to any other
Person exceeding US $100,000 in the aggregate except for travel advances and
other advances made to employees in the ordinary course of business and
consistent with past practice; provided, however, that Cohesion shall be
permitted to incur up to $3.0 million of indebtedness on commercially reasonable
terms, to the extent required to finance the Cohesion's working capital
requirements and provided further, Cohesion shall not make any expenditures of
the proceeds of such indebtedness in excess of $100,000, except in the ordinary
course of business, without the prior written consent of Angiotech, which shall
not be unreasonably withheld or delayed;
(c) institute any change in accounting methods, principles or
practices other than as required by GAAP or the rules and regulations
promulgated by the SEC;
(d) revalue any assets, including without limitation, writing down
the value of inventory or writing off notes or accounts receivable in excess of
amounts previously reserved as reflected in the Cohesion Balance Sheet;
(e) (i) increase in any manner the compensation of any of its
directors, officers or, other than in the ordinary course of business and
consistent with past practice or pursuant to written agreements outstanding on
the date hereof, of a non-officer employee; (ii) grant any severance or
termination pay to any person; (iii) except as set forth in Schedule 5.1(e) to
the Cohesion Disclosure Statement, enter into any oral or written employment,
consulting, indemnification or severance agreement with any person other than
agreements involving amounts in each case not in excess of US $100,000; (iv)
other than as required by law or the specific terms of the Employee Benefit
Plans, as defined in Section 3.20(a) hereof, adopt, become obligated under, or
amend any employee benefit plan, program or arrangement; or (v) reprice any
Cohesion Options granted under the Cohesion Stock Plans;
(f) sell, transfer, lease to a third party, license to a third
party, pledge, mortgage, encumber, or otherwise abandon or dispose of, or agree
to sell, transfer, lease to a third party, license to a third party, pledge,
mortgage, encumber or otherwise dispose of or abandon, any material portion of
any material property (including intellectual property and other intangible
property, real, personal or mixed), except in the ordinary course of business;
(g) except as required by this Agreement, adopt any amendment to
the certificate of incorporation or bylaws of Cohesion;
(h) effect any split, combination or reclassification of any
capital stock of Cohesion;
(i) become party to any merger, consolidation, share exchange,
business combination, recapitalization or similar transaction;
37
(j) make any individual capital expenditure exceeding US $100,000 in
any calendar month which, when added to all other capital expenditures made by
or on behalf of Cohesion in such calendar month, result in such capital
expenditures exceeding US $250,000 in the aggregate;
(k) pay, discharge or satisfy any material claims, liabilities or
obligations (absolute, accrued, contingent or otherwise), other than the
payment, discharge or satisfaction of liquidated claims, liabilities or
obligations when due and the payment, discharge or satisfaction of liabilities
(including accounts payable) in the ordinary course of business and consistent
with past practice, or collect, or accelerate the collection of, any material
amounts owed (including accounts receivable) other than their collection in the
ordinary course of business;
(l) enter into any hedging, option, derivative or other similar
transaction or any foreign exchange position or contract for the exchange of
currency other than in the ordinary course of business and consistent with past
practice;
(m) waive, release, assign, settle or compromise any material claim
or litigation, or commence a lawsuit other than in the ordinary course of
business for the routine collection of bills;
(n) suspend, terminate or otherwise discontinue any planned or
ongoing material research and development activities, programs, clinical trials
or other such activities;
(o) except as permitted in Section 5.2 or Section 5.4(c) of this
Agreement authorize, solicit, propose or announce an intention to authorize,
recommend or propose, or enter into any agreement in principle or an agreement
with any other Person with respect to, any plan of liquidation or dissolution,
any acquisition of a material amount of assets or securities, any disposition of
a material amount of assets or securities, any material change in
capitalization, or any partnership, association, joint venture, joint
development, technology transfer, or other material business alliance; or
(p) enter into an agreement, contract, commitment or arrangement to
do any of the foregoing, or authorize, recommend, propose or announce an
intention to do any of the foregoing other than as expressly contemplated by
this Agreement.
5.2 NO SOLICITATION
(a) From and after the date of this Agreement until the Effective
Time or termination of this Agreement pursuant to Article VIII, Cohesion will
not, nor will it authorize or permit any of its respective officers, directors,
affiliates or employees or any investment banker, attorney or other advisor or
representative retained by it, directly or indirectly, (i) solicit, initiate,
knowingly encourage or knowingly induce the making, submission or announcement
of any Acquisition Proposal (as hereinafter defined), (ii) participate in any
discussions or negotiations regarding, or furnish to any Person any nonpublic
information with respect to, or take any other action to facilitate any
inquiries or the making of any proposal that constitutes or may reasonably be
expected to lead to, any Acquisition Proposal, (iii) engage in discussions with
any Person with respect to any Acquisition Proposal, (iv) approve, endorse or
recommend any Acquisition Proposal or (v) enter into any letter of intent or
similar document or any contract, agreement or
38
commitment contemplating or otherwise relating to any Acquisition Transaction
(as hereinafter defined); provided however, that this Section 5.2(a) shall not
prohibit Cohesion from furnishing nonpublic information to, or entering into
discussions or negotiations with, any Person that has made an unsolicited
Acquisition Proposal (a "POTENTIAL ACQUIROR") if Cohesion's board of directors
determines in good faith after receiving advice from its financial advisor, that
such Acquisition Proposal is reasonably likely to result in a Superior Offer (as
hereinafter defined). Cohesion agrees that any non-public information furnished
to a Potential Acquiror will be pursuant to a confidentiality, standstill and
nonsolicitation agreement containing provisions at least as favorable to
Cohesion as the confidentiality, standstill and nonsolicitation provisions of
the Confidentiality Agreement (as defined in Section 5.3). In the event that
Cohesion determines to provide any non-public information as described above, or
receives an Acquisition Proposal (or any material amendment to an Acquisition
Proposal previously received), it shall promptly, and in any event within
forty-eight (48) hours, inform Angiotech as to that fact and shall not furnish
such non-public information or enter into discussions or negotiations with such
Potential Acquiror until after Cohesion shall have furnished to Angiotech the
identity of such Potential Acquiror and the terms of such Acquisition Proposal
(or material amendment).
For purposes of this Agreement, "ACQUISITION PROPOSAL" shall mean
any offer or proposal (other than an offer or proposal by Angiotech) relating to
any Acquisition Transaction. For purposes of this Agreement, "ACQUISITION
TRANSACTION" shall mean any transaction or series of related transactions
involving: (A) any purchase from Cohesion or acquisition by any person or
"group" (as defined under Section 13(d) of the Exchange Act and the rules and
regulations thereunder) of more than a 30% interest in the total outstanding
voting securities of Cohesion or any tender offer or exchange offer that if
consummated would result in any person or "group" (as defined under Section
13(d) of the Exchange Act and the rules and regulations thereunder) beneficially
owning 30% or more of the total outstanding voting securities of Cohesion or any
merger, consolidation, business combination or similar transaction involving
Cohesion; (B) any sale, lease (other than in the ordinary course of business),
exchange, transfer, license (other than in the ordinary course of business),
acquisition or disposition of more than 30% of the assets of Cohesion; or (C)
any liquidation or dissolution of Cohesion.
(b) In addition to the obligations of Cohesion set forth in Section
5.2(a), Cohesion shall promptly, and in any event within forty-eight (48) hours,
(i) advise Angiotech orally of any oral Acquisition Proposal or any oral request
for nonpublic information or oral inquiry which Cohesion reasonably believes
would lead to an Acquisition Proposal or to any Acquisition Transaction, the
material terms and conditions of such oral Acquisition Proposal, request or
inquiry, and the identity of the person or group making any such oral
Acquisition Proposal, request or inquiry and (ii) advise Angiotech in writing of
any written Acquisition Proposal or any written request for nonpublic
information or written inquiry which Cohesion reasonably believes would lead to
an Acquisition Proposal or to any Acquisition Transaction, the material terms
and conditions of such written Acquisition Proposal, request or inquiry, and the
identity of the person or group making any such written Acquisition Proposal,
request or inquiry. Cohesion will keep Angiotech informed as promptly as
practicable in all material respects of the status of any such Acquisition
Proposal, request or inquiry made after the date hereof.
39
5.3 ACCESS TO INFORMATION
From the date of this Agreement until the Effective Time, each of Cohesion
and Angiotech will afford to the other and their authorized representatives
(including counsel, environmental and other consultants, accountants, auditors
and agents) reasonable access during normal business hours and upon reasonable
notice to all of its facilities, personnel and operations and to all of its and
its Subsidiaries books and records, will permit the other and its authorized
representatives to conduct inspections as they may reasonably request and will
instruct its officers and those of its Subsidiaries to furnish such persons with
such financial and operating data and other information with respect to its
business and properties as they may from time to time reasonably request,
subject to the restrictions set forth in the Confidentiality Agreement, dated as
of January 7, 2002 between Angiotech and Cohesion (the "CONFIDENTIALITY
AGREEMENT"). Angiotech and Merger Sub agree that each of them will treat any
such information in accordance with the Confidentiality Agreement, which shall
remain in full force and effect in accordance with its terms.
5.4 STOCKHOLDER MEETING; REGISTRATION STATEMENT; BOARD RECOMMENDATIONS
(a) Stockholder Meeting. Promptly after the date hereof and subject
to Section 5.4(c), Cohesion will take all action necessary in accordance with
the Delaware Law and its certificate of incorporation and bylaws to convene a
meeting of Cohesion's stockholders to consider adoption of this Agreement (the
"COHESION STOCKHOLDER MEETING") to be held as promptly as practicable, and in
any event (to the extent permissible under applicable law) within forty-five
(45) days after the declaration of effectiveness of the Registration Statement.
Subject to Section 5.4(c), Cohesion will use its commercially reasonable efforts
to solicit from its stockholders proxies in favor of the adoption of this
Agreement and the approval of the Merger and will take all other action
reasonably necessary or advisable to secure the vote or consent of its
stockholders required by the rules of the Nasdaq or the Delaware Law to obtain
such approvals. Notwithstanding anything to the contrary contained in this
Agreement, Cohesion may adjourn or postpone the Cohesion Stockholder Meeting to
the extent necessary to ensure that any necessary supplement or amendment to the
Proxy Statement/Prospectus is provided to Cohesion's stockholders in advance of
a vote on this Agreement or, if as of the time for which the Cohesion
Stockholder Meeting is originally scheduled (as set forth in the Proxy
Statement/Prospectus) there are insufficient shares of Cohesion Common Stock
represented (either in person or by proxy) to constitute a quorum necessary to
conduct the business of the Cohesion Stockholder Meeting. Cohesion shall ensure
that the Cohesion Stockholder Meeting is called, noticed, convened, held and
conducted, and that all proxies solicited by Cohesion in connection with the
Cohesion Stockholder Meeting are solicited, in compliance with the Delaware Law,
Cohesion's certificate of incorporation and bylaws, the rules of the Nasdaq and
all other applicable legal requirements.
(b) Subject to Section 5.4(c): (i) Cohesion's board of directors
shall recommend that Cohesion's stockholders vote in favor of the adoption of
this Agreement at the Cohesion Stockholder Meeting; (ii) the Proxy
Statement/Prospectus shall include a statement to the effect that Cohesion's
board of directors has recommended that Cohesion's stockholders vote in favor of
the adoption of this Agreement at the Cohesion Stockholder Meeting; and (iii)
neither Cohesion's board of directors nor any committee thereof shall withdraw,
amend or modify, or
40
propose or resolve to withdraw, amend or modify in a manner adverse to
Angiotech, the recommendation of Cohesion's board of directors that Cohesion's
stockholders vote in favor of the adoption of this Agreement.
(c) Nothing in this Agreement shall prevent Cohesion's board of
directors from withholding, withdrawing, amending or modifying its
recommendation in favor of the Merger or this Agreement if (A) Cohesion's board
of directors determines in good faith, after consultation with outside counsel,
that failure to do so would be inconsistent with the board's fiduciary duties
under applicable law or (B) (i) a Superior Offer (as hereinafter defined) is
made to Cohesion and is not withdrawn, (ii) Cohesion shall have provided written
notice to Angiotech (a "NOTICE OF SUPERIOR OFFER") advising Angiotech that
Cohesion has received a Superior Offer, specifying the material terms and
conditions of such Superior Offer and identifying the Person making such
Superior Offer and (iii) Angiotech shall not have, within three (3) Business
Days of Angiotech's receipt of the Notice of Superior Proposal, made a written
offer that Cohesion's board of directors by a majority vote determines in its
good faith judgment (after consultation with its financial advisor) to be at
least as favorable to Cohesion's stockholders as such Superior Proposal (it
being agreed that Cohesion's board of directors shall convene a meeting to
consider any such offer by Angiotech promptly following the receipt thereof).
For purposes of this Agreement, "SUPERIOR OFFER" shall mean an unsolicited, bona
fide written offer made by a third party to consummate any of the following
transactions: (i) a merger or consolidation involving Cohesion pursuant to which
Cohesion's stockholders immediately preceding such transaction hold less than a
majority of the equity interest in the surviving or resulting entity of such
transaction or (ii) the acquisition by any Person (including by way of a tender
offer or an exchange offer or a two step transaction involving a tender offer
followed with reasonable promptness by a cash-out merger involving Cohesion),
directly or indirectly, of ownership of more than 50% of the then outstanding
shares of capital stock of Cohesion, on terms that Cohesion's board of directors
determines, in its reasonable judgment (after consultation with its financial
advisor) to be more favorable to Cohesion stockholders than the terms of the
Merger; provided, however, that any such offer shall not be deemed to be a
"Superior Offer" if any financing required to consummate the transaction
contemplated by such offer is not committed and is not likely in the good faith
judgment of Cohesion's board of directors (after consultation with its financial
advisor) to be obtained by such third party on a timely basis.
(d) Nothing contained in this Agreement shall prohibit Cohesion or
its board of directors from taking and disclosing to its stockholders a position
contemplated by Rules 14d-9 and 14e-2(a) promulgated under the Exchange Act.
(e) As promptly as practicable after the execution of this
Agreement, Cohesion and Angiotech shall mutually prepare, and Cohesion shall
file with the SEC, a preliminary form of the Proxy Statement/Prospectus, which
shall include the opinion of U.S. Bancorp Xxxxx Xxxxxxx Inc. referred to in
Section 3.5. As promptly as practicable following receipt of SEC comments on
such preliminary Proxy Statement/Prospectus, Angiotech and Cohesion shall
mutually prepare a response to such comments. Upon resolution of all comments,
Angiotech shall file the Registration Statement with the SEC. Angiotech and
Cohesion shall use all commercially reasonable efforts to have the preliminary
Proxy Statement/Prospectus cleared by the SEC and the Registration Statement
declared effective by the SEC as promptly as practicable. Angiotech shall also
take any action required to be taken
41
under applicable state blue sky or securities laws in connection with Angiotech
Common Stock to be issued in exchange for the shares of Cohesion Common Stock.
Angiotech and Cohesion shall promptly furnish to each other all information, and
take such other actions (including without limitation using all commercially
reasonable efforts to provide any required consents of their respective
independent auditors), as may reasonably be requested in connection with any
action by any of them in connection with the preceding sentences of this Section
5.4(e). Whenever any party learns of the occurrence of any event which is
required to be set forth in an amendment or supplement to the Proxy
Statement/Prospectus, the Registration Statement or any other filing made
pursuant to this Section 5.4(e), Angiotech or Cohesion, as the case may be,
shall promptly inform the other of such occurrence and cooperate in filing with
the SEC or its staff and/or mailing to Cohesion's stockholders of such amendment
or supplement.
(f) Cohesion shall supply, for inclusion in the Registration
Statement and Proxy Statement/Prospectus, all information (as it relates to
Cohesion) required by Angiotech to comply with the requirements of the
Securities Act of British Columbia so as to permit Angiotech to issue Angiotech
Common Stock in British Columbia without the requirement of a prospectus filed
in British Columbia.
5.5 COMMERCIALLY REASONABLE EFFORTS
(a) Subject to the terms and conditions herein provided, Angiotech,
Merger Sub and Cohesion shall use commercially reasonable efforts to take, or
cause to be taken, all actions and do, or cause to be done, all things
necessary, proper or appropriate under this Agreement, applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement, including, without limitation, (i) if required, promptly filing
Notification and Report Forms under the HSR Act with the United States Federal
Trade Commission (the "FTC") and the Antitrust Division of the United States
Department of Justice (the "ANTITRUST DIVISION") and responding as promptly as
practicable to any inquiries received from the FTC or the Antitrust Division for
additional information or documentation, (ii) using commercially reasonable
efforts to obtain all necessary governmental and private party consents,
approvals or waivers, and (iii) using commercially reasonable efforts to lift
any legal bar to the Merger. Angiotech shall cause Merger Sub to perform all of
its obligations under this Agreement.
(b) Notwithstanding anything to the contrary in this Agreement,
neither Cohesion, Angiotech, nor the Surviving Corporation, nor any of their
Subsidiaries shall be required to (i) divest, hold separate or license any
business(es), product line(s) or asset(s), (ii) take any action or accept any
limitation that would reasonably be expected to have an Angiotech Material
Adverse Effect or a Cohesion Material Adverse Effect, or (iii) agree to any of
the foregoing.
5.6 PUBLIC ANNOUNCEMENTS
Before issuing any press release or otherwise making any public statement
with respect to the Merger or any of the other transactions contemplated hereby,
Angiotech, Merger Sub and Cohesion agree to consult with each other as to its
form and substance, and agree not to issue any such press release or general
communication to employees or make any public statement prior to
42
obtaining the consent of the other (which shall not be unreasonably withheld or
delayed), except as may be required by applicable law or by the rules and
regulations of or listing agreement with the Nasdaq, the Toronto Stock Exchange
or as may otherwise be required by the Nasdaq or the SEC or Canadian securities
authorities.
5.7 NOTIFICATION OF CERTAIN MATTERS
Each of Cohesion and Angiotech shall promptly notify the other party of
the occurrence or non-occurrence of any event the respective occurrence or
non-occurrence of which would be reasonably likely to cause any condition to the
obligations of the notifying party to effect the Merger not to be fulfilled.
Each of Cohesion and Angiotech shall also give prompt notice to the other of any
communication from any Person alleging that the consent of such Person is or may
be required in connection with the Merger or other transactions contemplated
hereby.
5.8 INDEMNIFICATION
(a) The certificate of incorporation and bylaws of the Surviving
Corporation shall contain, and Angiotech shall cause the Surviving Corporation
to fulfill and honor, the provisions with respect to indemnification, the
advancement of fees and expenses, and exculpation that are at least as favorable
with respect to Cohesion and the Indemnified Parties as those set forth in the
certificate of incorporation and bylaws of Cohesion as of the date of this
Agreement, which provisions shall not be amended, repealed or otherwise modified
for a period of six years from the Effective Time in any manner that would
adversely affect the rights thereunder of any of the Indemnified Parties. In
addition, Angiotech shall cause the Surviving Corporation to fulfill and honor
the obligations of Cohesion pursuant to indemnification agreements and
agreements for advancement of fees and expenses between Cohesion and any of the
Indemnified Parties which are set forth on Schedule 3.14 of the Cohesion
Disclosure Statement and provisions for any indemnification, advancement of fees
and expenses and exculpation under the certificate of incorporation or bylaws of
Cohesion as in effect on the date hereof. "INDEMNIFIED PARTIES" shall include
each person who is or was a director or officer of Cohesion at any time before
the Effective Time, and each person who serves or has in the past served at the
request of Cohesion as a director, officer, trustee, partner, fiduciary,
employee or agent of another corporation, partnership, joint venture, trust,
pension or other employee benefit plan or enterprise at any time before the
Effective Time.
(b) Without limiting any of the obligations of Angiotech or the
Surviving Corporation set forth elsewhere in this Section 5.8, for a period of
six years after the Effective Time, Angiotech shall cause the Surviving
Corporation to maintain in effect, to the extent available, directors' and
officers' liability insurance covering those persons who are currently covered
by Cohesion's directors' and officers' liability insurance policy on terms no
less favorable to such persons as those applicable under the policy of
directors' and officers' liability insurance currently maintained by Cohesion;
provided, however, that in no event shall Angiotech or the Surviving Corporation
be required to expend for coverage for any one year in excess of 200% of the
annual premium currently paid by Cohesion for such coverage, and that if the
annual premiums of such insurance coverage exceed such amount, the Surviving
Corporation shall be obligated instead to obtain a policy with the greatest
coverage available for a cost not exceeding such amount.
43
(c) Angiotech shall cause the Surviving Corporation to perform its
obligations under this Section 5.8 and shall, in addition, guarantee, as
co-obligor with the Surviving Corporation, the performance of such obligations
by the Surviving Corporation.
(d) Each Indemnified Party shall comply with the reasonable requests
of the Surviving Corporation or Angiotech in defending or settling any action
hereunder; provided, however, that no proposed settlement of any such action
need be considered by any Indemnified Party if (A) such settlement involves no
finding or admission of any liability by any Indemnified Party and (B) the sole
relief provided in connection with such settlement is monetary damages that are
paid in full by the Surviving Corporation or Angiotech.
(e) This Section 5.8 shall survive the consummation of the Merger,
is intended to benefit Cohesion, the Surviving Corporation and each Indemnified
Party, shall be binding on all successors and assigns of the Surviving
Corporation and Angiotech, and shall be enforceable by the Indemnified Parties.
5.9 AFFILIATE AGREEMENTS
Concurrently with the execution and delivery hereof, Cohesion shall
deliver to Angiotech a list (reasonably satisfactory to counsel for Angiotech),
setting forth the names of all Persons who are expected to be, at the Effective
Time, in Cohesion's reasonable judgment, Affiliates of Cohesion. Cohesion shall
furnish such information and documents as Angiotech may reasonably request for
the purpose of reviewing such list. Cohesion shall deliver a written agreement
in substantially the form of Exhibit C attached hereto (an "COHESION AFFILIATE
AGREEMENT") executed by each Person identified as an Affiliate in the list
furnished pursuant to this Section 5.9 within ten (10) days after the execution
of this Agreement.
5.10 STOCK EXCHANGE LISTING
Prior to the Effective Time, Angiotech agrees to cause the shares of
Angiotech Common Stock issuable, and those required to be reserved for issuance
in connection with the Merger to be authorized for listing on the Nasdaq and the
Toronto Stock Exchange, subject to official notice of issuance.
5.11 RESIGNATION OF DIRECTORS AND OFFICERS
Prior to the Effective Time, Cohesion shall deliver to Angiotech the
resignations of such directors and officers of Cohesion as Angiotech shall
specify at least ten Business Days prior to the Closing, effective at the
Effective Time.
5.12 CONSENTS OF ANGIOTECH'S AND COHESION'S ACCOUNTANTS
Each of Angiotech and Cohesion shall use commercially reasonable efforts
to cause its independent accountants to deliver to Angiotech a consent, dated
the date on which the Registration Statement shall become effective, in form
reasonably satisfactory to Angiotech and customary in scope and substance for
consents delivered by independent public accountants in connection with
registration statements on Form F-4 under the Securities Act.
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5.13 COHESION VOTING AGREEMENTS
Concurrently with the execution hereof, Cohesion shall deliver to
Angiotech the Cohesion Voting Agreements executed by each director of Cohesion.
5.14 FORM S-8
Within five (5) Business Days of the Closing Date, Angiotech shall file
with the SEC a Registration Statement, on Form S-8 or other appropriate form
under the Securities Act, to register Angiotech Common Stock issuable upon
exercise of the Assumed Cohesion Options and shares of Angiotech Common Stock
issuable pursuant to the Cohesion Purchase Plans following the Effective Time.
Angiotech shall use commercially reasonable efforts to cause such Registration
Statement to remain effective until the exercise or expiration of such options.
5.15 NOTIFICATION OF CERTAIN MATTERS
Cohesion shall give prompt notice to Angiotech and Merger Sub, and
Angiotech and Merger Sub shall give prompt notice to Cohesion, of (i) the
occurrence or nonoccurrence of any event the occurrence or nonoccurrence of
which would be likely to cause any representation or warranty contained in this
Agreement to be untrue or inaccurate in any material respect at or prior to the
Effective Time, (ii) any material failure of Cohesion, Angiotech or Merger Sub,
as the case may be, to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder, (iii) any notice or
other communication from any third party alleging that the consent of such third
party is or may be required in connection with the transactions contemplated by
this Agreement, or (iv) any facts or circumstances arise that could reasonably
be expected to result in a Cohesion Material Adverse Effect or an Angiotech
Material Adverse Effect, as the case may be.
5.16 SEC FILINGS
Cohesion will deliver promptly to Angiotech true and complete copies of
each report, registration statement or statement mailed by it to its security
holders generally or filed by it with the SEC, in each case subsequent to the
date hereof and prior to the Effective Time. As of their respective dates, such
reports, including the consolidated financial statements included therein, and
statements (excluding any information therein provided by Angiotech or Merger
Sub, as to which Cohesion makes no representation) will 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 therein, in light of the
circumstances under which they are made, not misleading and will comply in all
material respects with all applicable requirements of law. Each of the
consolidated financial statements (including, in each case, any related notes
thereto) contained in such reports, (x) shall comply as to form in all material
respects with applicable accounting requirements and with the published rules
and regulations of the SEC with respect thereto, (y) shall be prepared in
accordance with GAAP applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes thereto or, in the case of
unaudited interim financial statements, as may be permitted by the SEC on Form
10-Q under the Exchange Act) and (z) shall fairly present the consolidated
financial position of Cohesion as of the respective dates thereof and the
consolidated results of its operations and cash flows for the periods indicated,
except that the
45
unaudited interim financial statements were or are subject to normal and
recurring year-end adjustments which were not, or are not expected to be,
material in amount.
5.17 EMPLOYEE BENEFIT MATTERS
Angiotech agrees to provide employees of Cohesion who continue as
employees of the Surviving Corporation following the Effective Time,
substantially the same welfare and other employee benefits for a period of at
least twelve (12) months after the Effective Time that are provided to Cohesion
employees as of the date hereof; provided, however, that the Surviving
Corporation shall not be required to provide benefits under any retirement plan
until such time as the Surviving Corporation adopts such a plan. Angiotech
shall, or shall cause the Surviving Corporation to, recognize service with
Cohesion by such employees for purposes of eligibility and vesting under any
employee benefit plan (but not for purposes of benefit accrual under any
"employee pension benefit plan" as defined in Section 3(2) of ERISA); provided
that Angiotech shall not recognize service with Cohesion by such employees for
purposes of eligibility and vesting under any plan pursuant to which employees
may have a right to purchase shares of Angiotech Common Stock, although such
employees will be eligible to receive grants of options under such plans using
the same eligibility criteria as applied to other similarly situated employees.
Angiotech shall provide each Cohesion employee with credit for any co-payments
and deductibles paid before the Effective Time in satisfying any applicable
deductible or out of pocket requirements under any Angiotech welfare benefit
plan in which such employees eligible to participate in after the Effective
Time.
Compensation provided to employees of Cohesion who continue as employees
of Angiotech following the Effective Time shall be determined by Angiotech in
its sole discretion; provided, however, that Angiotech shall cause the Surviving
Corporation to maintain, for a period of one (1) year after the Closing Date,
the severance and separation policies of Cohesion in effect as of the date of
this Agreement and further, that the calculation of such severance and
separation benefits shall be based upon the level of compensation and benefits
in effect as of the date of Closing Date.
5.18 RIGHTS AGREEMENT
Except (a) as expressly required by this Agreement or (b) in the event
that Cohesion's board of directors determines in good faith after consultation
with legal counsel that the failure to do so would be inconsistent with its
fiduciary duties under applicable law, Cohesion shall not, without the prior
written consent of Angiotech, amend the Rights Agreement or take any other
action with respect to, or make any determination under the Rights Agreement,
including a redemption of the rights granted under the Rights Agreement or any
action to facilitate an Acquisition Proposal.
5.19 TAX MATTERS
(a) Prior to the Effective Time, Cohesion shall make all required
tax filings in a timely fashion, and shall submit all federal and state income
tax returns and filings to Angiotech for review and comment at least three
Business Days prior to their filing.
46
(b) Each of Cohesion and Angiotech shall report the Merger as a
reorganization within the meaning of Section 368 of the Code, unless otherwise
required pursuant to a "determination" within the meaning of Section 1313(a) of
the Code.
(c) Each of Cohesion and Angiotech shall use best efforts and cause
their Subsidiaries to use best efforts so as to cause any statements given in
their respective Tax Representation Letters to be true and correct so as to
cause the Merger to constitute a "reorganization" under Section 368 of the Code
and Angiotech to be treated as a "corporation" under Section 367 of the Code.
ARTICLE VI
CONDITIONS TO THE OBLIGATIONS OF EACH PARTY
The respective obligations of each party to this Agreement to effect the
Merger shall be subject to the fulfillment on or before the Effective Time of
each of the following conditions, any one or more of which may be waived in
writing by all the parties hereto, subject to the limitations set forth below:
6.1 REGISTRATION STATEMENT
The Registration Statement shall have become effective in accordance with
the provisions of the Securities Act. No stop order suspending the effectiveness
of the Registration Statement shall have been issued by the SEC and remain in
effect and no proceedings for such purpose shall be pending before or threatened
by the SEC.
6.2 COHESION STOCKHOLDER APPROVAL
A majority of the outstanding shares of Cohesion Common Stock shall have
voted for the adoption of the Merger Agreement at the Cohesion Stockholder
Meeting or any adjournment or postponement thereof.
6.3 LISTING OF ADDITIONAL SHARES
The Angiotech Common Stock issuable in connection with the Merger shall
have been authorized for listing on the Nasdaq and the Toronto Stock Exchange,
subject to official notice of issuance.
6.4 GOVERNMENTAL CLEARANCES
The waiting period applicable to consummation of the Merger under the HSR
Act shall have expired or been terminated. Other than the filing of the
Certificate of Merger which shall be accomplished as provided in Section 1.2,
all authorizations, consents, orders or approvals of, or declarations or filings
with, or expirations of waiting periods imposed by, any Government Entity the
failure of which to obtain or comply with would be reasonably likely to have a
Cohesion Material Adverse Effect or an Angiotech Material Adverse Effect shall
have been obtained or filed.
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6.5 TAX MATTERS
Each of Angiotech and Merger Sub shall have received an opinion of Xxxxxx
Xxxxxx White & XxXxxxxxx LLP, counsel to Angiotech and Merger Sub, and Cohesion
shall have received an opinion of Xxxxxx & Xxxxxxx, counsel to Cohesion, each
such opinion dated as of the Effective Time, substantially to the effect that on
the basis of the facts, representations and assumptions set forth in such
opinions, the Merger will be treated as a reorganization within the meaning of
Section 368(a) of the Code. In rendering such opinions, each of Xxxxxx Xxxxxx
White & XxXxxxxxx LLP and Xxxxxx & Xxxxxxx shall receive and rely upon
representations contained in letters of Angiotech, Merger Sub and Cohesion to be
delivered as of the Effective Time substantially in the forms attached hereto as
Exhibits 6.5(a) and 6.5(b), respectively (the "TAX REPRESENTATION LETTERS"). The
opinions referred to in this Section 6.5 shall not be waivable after receipt of
Cohesion Stockholder Approval referred to in Section 6.2, unless further
stockholder approval is obtained with appropriate disclosure.
6.6 STATUTE OR DECREE
No writ, order, temporary restraining order, preliminary injunction or
injunction shall have been enacted, entered, promulgated or enforced by any
court or other tribunal or governmental body or authority, which remains in
effect, and prohibits the consummation of the Merger or otherwise makes it
illegal, nor shall any governmental agency have instituted any action, suit or
proceeding which remains pending and which seeks, and which is reasonably
likely, to enjoin, restrain or prohibit the consummation of the Merger in
accordance with the terms of this Agreement.
ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF COHESION AND ANGIOTECH
7.1 ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF COHESION
The obligations of Cohesion to effect the Merger shall be subject to the
fulfillment of each of the following additional conditions, any one or more of
which may be waived in writing by Cohesion:
(a) The representations and warranties of Angiotech and Merger Sub
contained in this Agreement shall be true and correct, in all material respects,
as of the Effective Time, with the same force and effect as if made at the
Effective Time, except (i) for changes specifically permitted by the terms of
this Agreement, (ii) that the accuracy of the representations and warranties
that by their terms speak as of the date of this Agreement or some other date
will be determined as of such date and (iii) where the failure of such
representations and warranties to be so true and correct does not have an
Angiotech Material Adverse Effect provided that such representations and
warranties of Angiotech are not already qualified with any "materiality" or
"Angiotech Material Adverse Effect."
(b) Angiotech and Merger Sub shall have performed and complied in
all material respects with all agreements and obligations required by this
Agreement to be performed or complied with by them on or prior to the Closing
Date.
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(c) Angiotech and Merger Sub shall have furnished a certificate or
certificates of Angiotech and Merger Sub executed on behalf of one or more of
their respective officers to evidence compliance with the conditions set forth
in Sections 7.1(a) and (b) of this Agreement.
7.2 ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF ANGIOTECH AND MERGER SUB
The obligations of Angiotech and Merger Sub to effect the Merger shall be
subject to the fulfillment of each of the following additional conditions, any
one or more of which may be waived in writing by Angiotech:
(a) The representations and warranties of Cohesion, contained in
this Agreement shall be true and correct, in all material respects, as of the
Effective Time, with the same force and effect as if made at the Effective Time,
except (i) for changes specifically permitted by the terms of this Agreement,
(ii) that the accuracy of the representations and warranties that by their terms
speak as of the date of this Agreement or some other date will be determined as
of such date and (iii) where the failure of such representations and warranties
to be so true and correct does not have a Cohesion Material Adverse Effect
provided that such representations and warranties of Cohesion are not already
qualified with any "materiality" or "Cohesion Material Adverse Effect."
(b) Cohesion shall have performed and complied in all material
respects with all agreements and obligations required by this Agreement to be
performed or complied with by it on or prior to the Closing Date.
(c) Cohesion shall have furnished a certificate of Cohesion executed
by one of its officers to evidence compliance with the conditions set forth in
Sections 7.2(a) and (b) of this Agreement.
(d) Any consents, waivers, approvals, notifications, disclosures,
and filings and registrations listed on Schedule 3.3 of the Cohesion Disclosure
Statement shall have been obtained or made.
ARTICLE VIII
TERMINATION
8.1 TERMINATION
This Agreement may be terminated at any time prior to the Effective Time,
whether before or after the requisite approval of Cohesion's stockholders:
(a) by mutual written consent duly authorized by the boards of
directors of Angiotech and Cohesion;
(b) by either Cohesion or Angiotech if the Merger shall not have
been consummated by March 31, 2003 (the "END DATE"), which date may be extended
by mutual consent of the parties hereto, for any reason; provided, however, that
the right to terminate this Agreement under this Section 8.1(b) shall not be
available to any party whose action or failure to
49
act has been a principal cause of or resulted in the failure of the Merger to
occur on or before such date and such action or failure to act constitutes a
material breach of this Agreement;
(c) by either Cohesion or Angiotech if (i) a statute, rule,
regulation or executive order shall have been enacted, entered or promulgated
prohibiting the consummation of the Merger substantially on the terms
contemplated hereby or (ii) a court of competent jurisdiction or other
Government Entity shall have issued an order, decree or ruling or taken any
other action, in any case having the effect of permanently restraining,
enjoining or otherwise prohibiting the Merger, which order, decree, ruling or
other action is final and nonappealable;
(d) by Cohesion or Angiotech if the required approval of Cohesion's
stockholders contemplated by this Agreement shall not have been obtained by
reason of the failure to hold a meeting or the failure to obtain the required
vote at a meeting of Cohesion stockholders duly convened therefore or at any
adjournment thereof; provided, however, that the right to terminate this
Agreement under this Section 8.1(d) shall not be available to Cohesion where the
failure to hold a meeting or the failure to obtain Cohesion stockholder approval
shall have been caused by the action or failure to act of Cohesion (other than
in compliance with Section 5.4(c)) and such action or failure to act constitutes
a material breach by Cohesion of this Agreement;
(e) by Angiotech or Cohesion if a Cohesion Triggering Event (as
hereinafter defined) shall have occurred;
(f) by Cohesion if an Angiotech Triggering Event (as hereinafter
defined) shall have occurred;
(g) by Cohesion, upon a breach of any representation, warranty,
covenant or agreement on the part of Angiotech set forth in this Agreement, or
if any representation or warranty of Angiotech shall have become untrue, in
either case such that the conditions set forth in Section 7.1(a) or Section
7.1(b) would not be satisfied as of the time of such breach or as of the time
such representation or warranty shall have become untrue, provided that such
inaccuracy in Angiotech's representations and warranties or breach by Angiotech
remains uncured on the date which is twenty (20) Business Days following written
notice of such breach or inaccuracy from Cohesion to Angiotech (it being
understood that Cohesion may not terminate this Agreement pursuant to this
paragraph (g) if it shall have materially breached this Agreement and remains in
breach of this agreement as of the date of such termination); or
(h) by Angiotech, upon a breach of any representation, warranty,
covenant or agreement on the part of Cohesion set forth in this Agreement, or if
any representation or warranty of Cohesion shall have become untrue, in either
case such that the conditions set forth in Section 7.2(a) or Section 7.2(b)
would not be satisfied as of the time of such breach or as of the time such
representation or warranty shall have become untrue, provided that such
inaccuracy in Cohesion's representations and warranties or breach by Cohesion
remains uncured on the date which is twenty (20) Business Days following written
notice of such breach or inaccuracy from Angiotech to Cohesion (it being
understood that Angiotech may not terminate this Agreement pursuant to this
paragraph (h) if it shall have materially breached this Agreement and remains in
breach of this agreement as of the date of such termination).
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For the purposes of this Agreement, a "COHESION TRIGGERING EVENT" shall be
deemed to have occurred if: (i) Cohesion's board of directors or any committee
thereof shall for any reason have withdrawn or shall have amended or modified in
a manner adverse to Angiotech its recommendation in favor of, the adoption of
this Agreement; (ii) Cohesion shall have failed to include in the Proxy
Statement/Prospectus the recommendation of Cohesion's board of directors in
favor of the adoption of this Agreement; (iii) Cohesion's board of directors
fails to reaffirm its recommendation in favor of the adoption of the Agreement
within ten (10) Business Days after Angiotech requests in writing that such
recommendation be reaffirmed at any time following the public announcement of an
Acquisition Proposal; (iv) Cohesion's board of directors or any committee
thereof shall have approved or recommended any Acquisition Proposal; (v) a
tender or exchange offer relating to securities of Cohesion shall have been
commenced by a Person unaffiliated with Angiotech and Cohesion shall not have
sent to its security holders pursuant to Rule 14e-2 promulgated under the
Securities Act, within ten (10) Business Days after such tender or exchange
offer is first published, sent or given, a statement disclosing that Cohesion
recommends rejection of such tender or exchange offer; or (vi) Cohesion breaches
in any material respect its obligations under Section 5.2 of this Agreement,
except for any inadvertent breach of any notice provision contained in Section
5.2 which breach has been cured within forty-eight (48) hours of its occurrence.
For the purposes of this Agreement, an "ANGIOTECH TRIGGERING EVENT" shall
be deemed to have occurred if the board of directors of Angiotech shall for any
reason have withdrawn or shall have amended or modified in a manner adverse to
Cohesion its adoption and approval of this Agreement or its approval of the
Merger or the issuance of Angiotech Common Stock in the Merger; or the board of
directors of Angiotech fails to reaffirm its adoption and approval of this
Agreement and its approval of the Merger and the issuance of Angiotech Common
Stock in the Merger within (10) ten days after Cohesion requests in writing that
such recommendation be reaffirmed.
8.2 NOTICE OF TERMINATION; EFFECT OF TERMINATION
Any termination of this Agreement under Section 8.1 will be effective
immediately upon the delivery of a valid written notice of the terminating party
to the other parties hereto. In the event of the termination of this Agreement
as provided in Section 8.1, this Agreement shall be of no further force or
effect, except (i) as set forth in Section 5.3, this Section 8.2, Section 8.3
and Article IX, each of which shall survive the termination of this Agreement,
and (ii) nothing herein shall relieve any party from liability for any willful
breach of this Agreement. No termination of this Agreement shall affect the
obligations of the parties contained in the Confidentiality Agreement, all of
which obligations shall survive termination of this Agreement in accordance with
their terms.
8.3 FEES AND EXPENSES
(a) General. Except as set forth in this Section 8.3, all fees and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses whether
or not the Merger is consummated; provided, however, that Angiotech and Cohesion
shall share equally all fees and expenses, other than attorneys' and accountants
fees and expenses, incurred in relation to the printing and filing (with
51
the SEC) of the Proxy Statement/Prospectus (including any preliminary materials
related thereto) and the Registration Statement (including financial statements
and exhibits) and any amendments or supplements thereto and shall share equally
all fees and expenses relating to any filings under the HSR Act.
(b) Cohesion Payments.
(i) Subject to Section 8.3(b)(ii) and Section 8.3(b)(iii)
below, in the event that this Agreement is terminated by Angiotech or Cohesion
pursuant to Section 8.1(b), (d) or (e), Cohesion shall pay Angiotech a fee equal
to US $1.7 million plus the Angiotech Expenses in immediately available funds
(collectively, the "COHESION TERMINATION FEE"). For purposes of this Agreement,
"ANGIOTECH EXPENSES" means all documented expenses reasonably incurred by
Angiotech in connection with this Agreement and the transactions contemplated
hereby not to exceed an aggregate of US $250,000.
(ii) In the event that this Agreement is terminated by
Angiotech or Cohesion, as applicable, pursuant to Section 8.1(b) or (d), (A)
Cohesion shall pay Angiotech the Termination Fee only if following the date
hereof and prior to the termination of this Agreement, a third party has
publicly announced an Acquisition Proposal and within twelve (12) months
following the termination of this Agreement, a Cohesion Acquisition (as
hereinafter defined) involving such third party is consummated or Cohesion
enters into an agreement providing for a Cohesion Acquisition, and (B) such
payment shall be made promptly, but in no event later than two Business Days
after the consummation of such Cohesion Acquisition (regardless of when such
consummation occurs if Cohesion has entered into such an agreement within such
twelve (12) month period) in immediately available funds.
(iii) In the event that this Agreement is terminated by
Angiotech or Cohesion pursuant to Section 8.1(d) and Cohesion is not required to
pay Angiotech the Termination Fee, Cohesion shall reimburse Angiotech for the
Angiotech Expenses in immediately available funds not later than ten (10)
Business Days after termination of this Agreement.
(iv) In the event that this Agreement is terminated by
Angiotech pursuant to Section 8.1(h) because the condition set forth in Section
7.2(b) is not satisfied, Cohesion shall not later than ten (10) Business Days
after the date of such termination, reimburse Angiotech for the Angiotech
Expenses in immediately available funds.
(v) Cohesion acknowledges that the agreements contained in
this Section 8.3(b) are an integral part of the transactions contemplated by
this Agreement, and that, without these agreements, Angiotech would not enter
into this Agreement; accordingly, if Cohesion fails to pay in a timely manner
the amounts due pursuant to this Section 8.3(b), and, in order to obtain such
payment, Angiotech makes a claim that results in a judgment against Cohesion for
any or all of the amounts set forth in this Section 8.3(b), Cohesion shall pay
to Angiotech its reasonable costs and expenses (including reasonable attorneys'
fees and expenses) incurred in connection with such suit, together with interest
on the amounts set forth in this Section 8.3(b) at the prime rate of Bank of
America in effect on the date such payment was required to be made.
52
For the purposes of this Agreement, "COHESION ACQUISITION" shall mean any
of the following transactions (other than the transactions contemplated by this
Agreement); (i) a merger, consolidation, business combination, recapitalization,
liquidation, dissolution or similar transaction involving Cohesion pursuant to
which Cohesion's stockholders immediately preceding such transaction hold less
than 50% of the aggregate equity interests in the surviving or resulting entity
of such transaction, (ii) a sale or other disposition by Cohesion of assets
representing in excess of 35% of the aggregate fair market value of Cohesion's
business immediately prior to such sale or (iii) the acquisition by any Person
(including by way of a tender offer or an exchange offer or issuance by
Cohesion), directly or indirectly, of beneficial ownership or a right to acquire
beneficial ownership of shares representing in excess of 35% of the voting power
of the then outstanding shares of capital stock of Cohesion.
(c) Angiotech Payments.
(i) In the event that this Agreement is terminated by Cohesion
pursuant to Section 8.1(f), Angiotech shall pay Cohesion a fee equal to US $1.7
million plus the Cohesion Expenses in immediately available funds (collectively,
the "ANGIOTECH TERMINATION FEE") not later than ten (10) Business Days after
termination of this Agreement. For the purposes of this Agreement, the "COHESION
EXPENSES" means all documented expenses reasonably incurred by Cohesion in
connection with this Agreement and the transactions contemplated hereby not to
exceed an aggregate of US $250,000.
(ii) In the event that this Agreement is terminated by
Cohesion pursuant to Section 8.1(g) because the condition set forth in Section
7.1(b) is not satisfied, Angiotech shall not later than ten (10) Business Days
after the date of such termination, reimburse Cohesion for the Cohesion Expenses
in immediately available funds.
(iii) Angiotech acknowledges that the agreements contained in
this Section 8.3(c) are an integral part of the transactions contemplated by
this Agreement, and that, without these agreements, Cohesion would not enter
into this Agreement; accordingly, if Angiotech fails to pay in a timely manner
the amounts due pursuant to this Section 8.3(c), and, in order to obtain such
payment, Cohesion makes a claim that results in a judgment against Angiotech for
any or all of the amounts set forth in this Section 8.3(c), Angiotech shall pay
to Cohesion its reasonable costs and expenses (including reasonable attorneys'
fees and expenses) incurred in connection with such suit, together with interest
on the amounts set forth in this Section 8.3(c) at the prime rate of Bank of
America in effect on the date such payment was required to be made.
ARTICLE IX
MISCELLANEOUS
9.1 AMENDMENT AND MODIFICATION
Subject to applicable law, this Agreement may be amended, modified or
supplemented only by written agreement of Angiotech, Merger Sub and Cohesion at
any time prior to the Effective Time; provided, however, that after approval of
this Agreement by Cohesion's
53
stockholders, no such amendment or modification shall change the amount or form
of the consideration to be received by Cohesion's stockholders in the Merger.
9.2 WAIVER OF COMPLIANCE; CONSENTS
Any failure of Angiotech or Merger Sub, on the one hand, or Cohesion, on
the other hand, to comply with any obligation, covenant, agreement or condition
herein may be waived by Cohesion (with respect to any failure by Angiotech or
Merger Sub) or Angiotech or Merger Sub (with respect to any failure by
Cohesion), respectively, only by a written instrument signed by the party
granting such waiver, but such waiver or failure to insist upon strict
compliance with such obligation, covenant, agreement or condition shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure. Whenever this Agreement requires or permits consent by or on behalf of
any party hereto, such consent shall be given in writing in a manner consistent
with the requirements for a waiver of compliance as set forth in this Section
9.2.
9.3 SURVIVAL; INVESTIGATIONS
The respective representations and warranties of Angiotech, Merger Sub and
Cohesion contained herein or in any certificates or other documents delivered
prior to or at the Closing shall not be deemed waived or otherwise affected by
any investigation made by any party hereto and shall not survive the Effective
Time.
9.4 NOTICES
All notices and other communications hereunder shall be in writing and
shall be delivered personally by overnight courier or similar means or sent by
facsimile with written confirmation of receipt, to the parties at the addresses
specified below (or at such other address for a party as shall be specified by
like notice. Any such notice shall be effective upon receipt, if personally
delivered or on the next Business Day following transmittal if sent by confirmed
facsimile. Notices, including oral notices, shall be delivered as follows:
if to Cohesion, to: Cohesion Technologies, Inc.
0000 Xxxxx Xxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx
with a copy to: Xxxxxx & Xxxxxxx
000 Xxxxxxxxxxxx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxx, Esq.
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if to Angiotech or
Merger Sub, to: Angiotech Pharmaceuticals, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0
XXXXXX
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx XxXxxxxxx
with a copy to: Xxxxxx Xxxxxx White & XxXxxxxxx LLP
000 Xxxxxxxxxxx Xxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Peers, Esq.
Xxxx X. Xxxx, Esq.
9.5 ASSIGNMENT; THIRD PARTY BENEFICIARIES
Neither this Agreement nor any right, interest or obligation hereunder
shall be assigned by any of the parties hereto without the prior written consent
of the other parties. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns. This Agreement is not intended to confer any rights or remedies upon
any Person other than the parties hereto and, with respect only to (a) Section
5.8, the Indemnified Parties and (b) Section 5.17, the employees of Cohesion.
9.6 GOVERNING LAW; JURISDICTION
This Agreement shall be governed by the laws of the State of California
without reference to principles of conflicts of laws. Courts within the State of
California will have exclusive jurisdiction over any and all disputes between
the parties hereto, whether in law or equity, arising out of or relating to this
Agreement and the transactions, agreements, instruments and documents
contemplated hereby. The parties consent to and agree to submit to the
jurisdiction of such courts. Each of the parties hereby waives, and agrees not
to assert in any such dispute, to the fullest extent permitted by applicable
law, any claim that (a) such party is not personally subject to the jurisdiction
of such courts, (b) such party and such party's property is immune from any
legal process issued by such courts or (c) any litigation commenced in such
courts is brought in an inconvenient forum.
9.7 WAIVER OF JURY TRIAL
EACH OF ANGIOTECH, MERGER SUB AND COHESION HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER
BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE ACTIONS OF ANGIOTECH, MERGER SUB OR COHESION IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.
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9.8 COUNTERPARTS
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
9.9 SEVERABILITY
In case any one or more of the provisions contained in this Agreement
should be finally determined to be invalid, illegal or unenforceable in any
respect against a party hereto, it shall be adjusted if possible to effect the
intent of the parties. In any event, the validity, legality and enforceability
of the remaining provisions contained herein shall not in any way be affected or
impaired thereby, and such invalidity, illegality or unenforceability shall only
apply as to such party in the specific jurisdiction where such final
determination shall have been made.
9.10 INTERPRETATION
The Article and Section headings contained in this Agreement are solely
for the purpose of reference and shall not in any way affect the meaning or
interpretation of this Agreement. The word "including" shall be deemed to mean
"including without limitation."
9.11 ENTIRE AGREEMENT
This Agreement, the Cohesion Voting Agreements and the Confidentiality
Agreement including the exhibits hereto and the documents and instruments
referred to herein (including the Cohesion Disclosure Statement and the
Angiotech Disclosure Statement), embody the entire agreement and understanding
of the parties hereto in respect of the subject matter contained herein. There
are no representations, promises, warranties, covenants, or undertakings, other
than those expressly set forth or referred to herein and therein.
9.12 DEFINITION OF "LAW"
When used in this Agreement "law" refers to any applicable law (whether
civil, criminal or administrative) including, without limitation, common law,
statute, statutory instrument, treaty, regulation, directive, decision, code,
order, decree, injunction, resolution or judgment of any government,
quasi-government, supranational, federal, state or local government, statutory
or regulatory body, court, or agency.
9.13 RULES OF CONSTRUCTION
Each party to this Agreement has been represented by counsel during the
preparation and execution of this Agreement, and therefore waives any rule of
construction that would construe ambiguities against the party drafting the
agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, Angiotech, Merger Sub and Cohesion have caused this
Agreement to be signed by their respective duly authorized officers as of the
date first above written.
ANGIOTECH PHARMACEUTICALS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
-------------------------------------
Title: Chairman and CEO
-------------------------------------
CHARDONNAY ACQUISITION CORP.
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxxx
-------------------------------------
Title: Secretary
-------------------------------------
COHESION TECHNOLOGIES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
-------------------------------------
Title: President and Chief Executive Officer
-------------------------------------
[SIGNATURE PAGE TO AGREEMENT AND PLAN OF REORGANIZATION]