Exhibit 10.1
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement, dated as of August 7, 2002, is made and
entered into by and between Aspect Medical Systems, Inc., a Delaware corporation
(the "Company"), and Boston Scientific Corporation, a Delaware corporation (the
"Purchaser"). The Company and the Purchaser are collectively referred to as the
"Parties."
WHEREAS, the Company desires to issue and sell, and the Purchaser
desires to purchase, shares of the Company's common stock, $0.01 par value per
share (the "Common Stock"); and
WHEREAS, in connection with the execution and delivery of this
Agreement, the Company and the Purchaser have entered into (i) an OEM Product
Development Agreement dated as of the date hereof with respect to the
development and potential distribution of the Company's products in certain
fields of use (the "Development Agreement"), (ii) a Registration Rights
Agreement dated as of the date hereof, pursuant to which the Company is granting
certain rights pertaining to the shares of Common Stock to be purchased by the
Purchaser pursuant to this Agreement (the "Registration Rights Agreement"),
(iii) a Loan Agreement dated as of the date hereof, pursuant to which the
Purchaser is agreeing to make loans of up to $5.0 million to the Company, upon
certain conditions (the "Loan Agreement"), and (iv) a Security Agreement dated
as of the date hereof, pursuant to which the Company is granting a security
interest in certain of its assets to the Purchaser (the "Security Agreement");
NOW THEREFORE, in consideration of the representations, warranties and
covenants herein contained, and other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, the Company and the
Purchaser agree as follows:
1. Sale of Shares. Subject to the terms and conditions of this
Agreement, at the Closing (as defined in Section 2 hereof) the Purchaser agrees
to purchase, and the Company agrees to sell and issue to the Purchaser,
1,428,572 shares of Common Stock (the "Shares") at a purchase price per share of
$7.00 (the "Purchase Price").
2. The Closing.
2.1 Closing. The closing (the "Closing") of the sale and
purchase of the Shares under this Agreement will take place at the offices of
Xxxx and Xxxx LLP, 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx at 10:00 a.m. on the
date hereof, or at such other time, date and place as are mutually agreeable to
the Company and the Purchaser. The date of the Closing is hereinafter referred
to as the "Closing Date."
2.2 Delivery of Shares; Payment of Purchase Price. At the
Closing, the Company will deliver to the Purchaser a certificate registered in
the name of the Purchaser representing the Shares against payment therefor by
the Purchaser to the Company by wire transfer of $10,000,004.00.
2.3 Use of Proceeds. The Company agrees to use the proceeds
from the sale of the Shares for working capital and other general corporate
purposes, including (a) developing the AMS Developed Products (as defined in the
Development Agreement) for the Field (as defined in the Development Agreement)
that comply with the Product Specifications (as defined in the Development
Agreement) for such AMS Developed Products, (b) conducting the Clinical/Outcomes
Study and each Specialty Study (as such terms are defined in the Development
Agreement) that the Company agrees pursuant to the Development Agreement to
conduct, and (c) expending commercially reasonable efforts to (i) assist the
Purchaser in timely obtaining reimbursement in the United States for such AMS
Developed Products, and, with the commercially reasonable assistance of the
Purchaser, (ii) timely obtain, to the extent available, the endorsement of the
leading professional organizations related to sedation and applicable leading
professional organizations associated with each Specialty (as defined in the
Development Agreement).
3. Representations of the Company. The Company represents and warrants
to the Purchaser that the statements contained in this Section 3 are true and
correct, except as set forth in the disclosure schedule provided by the Company
to the Purchaser on the date hereof (the "Disclosure Schedule"). The Disclosure
Schedule shall be arranged in paragraphs corresponding to the numbered and
lettered sections contained in this Section 3, and the disclosures in any
section or subsection of the Disclosure Schedule shall qualify the corresponding
section or subsection of this Section 3 and other sections and subsections in
this Section 3 only to the extent it is clear (by cross-reference or otherwise)
from a reading of the disclosure that such disclosure is applicable to such
other sections and subsections. For purposes of this Agreement, the phrase "to
the knowledge of the Company" or any phrase of similar import shall mean and be
limited to the actual knowledge of the officers identified below, such other
information that such officers should have known of in the exercise of
reasonable diligence in the performance of their duties, as well as such other
information that has come to the attention of the officers identified below
sufficient to put such officers on notice of, or cause such officers to make
further inquiry into, the existence or absence of any material information or
fact bearing on the matter: J. Xxxx Xxxxxxxxx, Xxxxxx X. Xxxxxxx and X.
Xxxxxxxxxxxx Eagle and (i) in Section 3.9 such officers shall also include
Xxxxxx Xxxxxx and (ii) in Section 3.10 such officers shall also include Xxxx
Xxxxxxx.
3.1 Organization, Qualification and Corporate Power. The
Company is duly organized, validly existing and in good standing under the laws
of the State of Delaware. The Company is duly qualified to conduct the business
it is currently engaged in and is in corporate and tax good standing under the
laws of each jurisdiction in which the nature of its businesses or the ownership
or leasing of its properties requires such qualification, except where the
failure to be so qualified or in good standing is not reasonably likely to have
a Company Material Adverse Effect (as defined below). The Company has all
requisite corporate power and authority to (i) enter into and to perform its
obligations under this Agreement, the Development Agreement, the Registration
Rights Agreement, the Loan Agreement and the Security Agreement and to issue the
Promissory Note dated as of the date hereof and attached to the Loan Agreement
as an exhibit (collectively, the "Transaction Documents"), in accordance with
their respective terms and (ii) carry on its business as currently conducted and
to own and use the properties owned and used by it. As used in this Agreement,
"Company Material Adverse Effect" means a material adverse effect on or a
material adverse change in, or group of such effects on or changes in, the
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assets, liabilities, business, condition (financial or otherwise), or results of
operations of the Company and its Subsidiaries, taken as a whole.
3.2 Capitalization. The authorized capital stock of the
Company consists of (a) 60,000,000 shares of Common Stock, of which 17,898,018
shares were issued and outstanding as of August 2, 2002, and (b) 5,000,000
shares of Preferred Stock, $0.01 par value per share (the "Preferred Stock"), of
which no shares are issued or outstanding as of the date hereof. All of the
issued and outstanding shares of Common Stock are duly authorized, validly
issued, fully paid, nonassessable and free of all preemptive rights and were
issued in compliance with all applicable state and federal securities laws.
Options to purchase an aggregate of 4,244,601 shares of Common Stock were
outstanding as of August 2, 2002. Warrants to purchase an aggregate of 160,110
shares of Common Stock were outstanding as of August 2, 2002. There are no
outstanding options, warrants, instruments (including convertible debt
instruments), rights (including conversion or preemptive rights and rights of
first refusal), proxy or stockholder agreements, or other agreements or
instruments of any kind to which the Company or any of its Subsidiaries is a
party or by which the Company or any of its Subsidiaries is bound for the
purchase or acquisition from the Company of any of its Securities. Except as
contemplated by this Agreement, the Company is not a party or subject to any
agreement or understanding with any Person (as defined below) which affects or
relates to the voting or giving of written consents with respect to any
Security. As used in this Agreement, the term "Person" means any natural person,
corporation, limited liability company, general or limited partnership, limited
liability partnership, joint venture, joint stock company, trust, unincorporated
organization, association, sole proprietorship, governmental body, or agency or
political subdivision of any government.
3.3 Issuance of Shares.
(a) The offer, issuance, sale and delivery of the
Shares in accordance with this Agreement have been duly authorized by all
necessary corporate action on the part of the Company. The Shares, when issued,
sold and delivered against payment therefor in accordance with the provisions of
this Agreement, will be duly and validly issued, fully paid and nonassessable,
and will be free of any lien or encumbrance; provided, however, that the Shares
may be subject to restrictions on transfer under state or federal securities
laws as set forth herein or as otherwise required by such laws at the time a
transfer is proposed. The sale of the Shares is not, and the issuance of the
Shares will not be, subject to any preemptive right or right of first refusal
that has not been properly waived or complied with.
(b) Assuming the correctness of the representations
and warranties made by the Purchaser in Section 4, no change in applicable law
and no unlawful distribution of the Shares by the Purchaser or any other Person,
the offer, issuance and sale of the Shares will comply with applicable
exemptions from (A) the registration and prospectus delivery requirements of the
Securities Act of 1933, as amended (the "Securities Act"), and (B) the
registration and qualification requirements of all applicable securities laws of
the states of the United States. Neither the Company nor any authorized agent
acting on its behalf will take any action hereafter that would cause the loss of
such exemptions.
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3.4 Validity and Noncontravention. The Transaction Documents
have been duly and validly executed and delivered by the Company and constitute
valid and binding obligations of the Company, enforceable against the Company in
accordance with their respective terms, except as such enforceability may be
limited by bankruptcy, insolvency, moratorium or other similar laws affecting or
relating to creditors' rights generally, and general principles of equity.
Subject to compliance with the applicable filing and other requirements of the
Securities Act and any applicable state securities laws, and the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), neither the execution and
delivery by the Company of the Transaction Documents, nor the consummation by
the Company of the transactions contemplated thereby, will (a) conflict with or
violate any provision of the Restated Certificate of Incorporation or the
Amended and Restated By-Laws of the Company, (b) require on the part of the
Company or any of its Subsidiaries any filing with, or permit, authorization,
consent or approval of, any court, arbitrational tribunal, administrative agency
or commission or other governmental or regulatory authority or agency (a
"Governmental Entity"), (c) conflict with, result in breach of, constitute (with
or without due notice or lapse of time or both) a default under, result in the
forfeiture of any rights under, result in the acceleration of obligations under,
create in any party any right to terminate, modify or cancel, or require any
notice, consent or waiver under, any contract or instrument to which the Company
or any of its Subsidiaries is a party or by which it or any of its Subsidiaries
is bound or to which any of its or their assets are subject, (d) violate any
order, writ, injunction, decree, statute, rule or regulation applicable to the
Company or any of its Subsidiaries or any of its or their properties or assets,
or (e) except as contemplated by the Loan Agreement and the Security Agreement,
result in the creation of any mortgage, pledge, lien, charge or encumbrance upon
any of the properties or assets of the Company or any of its Subsidiaries, or
the suspension, revocation, impairment, forfeiture or non-renewal of any Permits
(as defined in Section 3.11 below).
3.5 Reports and Financial Statements. The Company has
previously furnished or made available to the Purchaser complete and accurate
copies, as amended or supplemented, of all reports and other documents filed by
the Company with the Securities and Exchange Commission (the "SEC") pursuant to
the Exchange Act (collectively, the "Company SEC Filings"). The Company SEC
Filings constitute all of the documents required to be filed by the Company
under the Exchange Act with the SEC through the date of this Agreement. All
contracts and other documents required to be filed by the Company with the SEC
as exhibits to the Company SEC Filings have been filed. The Company SEC Filings
complied as to form in all material respects with the requirements of the
Exchange Act and the rules and regulations thereunder when filed. As of their
respective dates, the Company SEC Filings 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. The audited financial
statements and unaudited interim financial statements of the Company included in
the Company SEC Filings (a) complied as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto when filed, (b) were prepared in accordance with
United States generally accepted accounting principles applied on a consistent
basis throughout the periods covered thereby (except as may be indicated therein
or in the notes thereto, and in the case of quarterly financial statements, as
permitted by Form 10-Q under the Exchange Act), (c) fairly present, in all
material respects, the consolidated financial condition, results of operations
and cash flows of the Company as of the respective dates thereof and for the
periods
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referred to therein, and (d) are consistent with the books and records of the
Company. Except as set forth on Section 3.5 of the Disclosure Schedule and
except for Indebtedness reflected in the financial statements in the Company SEC
Filings and Indebtedness contemplated to be incurred under the Loan Agreement
and the Revolving Credit Facility, dated as of May 16, 2001, as amended, by and
between the Company and Fleet National Bank, the Company has no Indebtedness for
borrowed money outstanding at the date hereof. The Company is not in default
with respect to any outstanding Indebtedness or any instrument or agreement
relating thereto, nor is there any event which, with the passage of time or
giving of notice, or both, would result in a default, and no such Indebtedness
or any instrument or agreement relating thereto purports to limit the issuance
of any Securities by the Company or the operation of the business of the
Company. Complete and correct copies of all instruments (including all
amendments, supplements and consents) relating to the Indebtedness of the
Company for borrowed money have been furnished to the Purchaser.
3.6 Reporting Requirements. The Company has registered its
Common Stock pursuant to Section 12(g) of the Exchange Act and is in full
compliance with all reporting requirements of the Exchange Act. The Common Stock
is currently quoted for trading on The Nasdaq National Market, and there are no
proceedings to revoke or suspend such listing.
3.7 Litigation. Except as disclosed in the Company SEC
Filings, there is no Legal Proceeding (as defined below) which (a) is pending or
has been, to the knowledge of the Company, threatened against the Company or any
Subsidiary of the Company or (b) to the knowledge of the Company, is pending or
has been threatened against any of the officers or directors of the Company or
any Subsidiary of the Company and which, in the case of clauses (a) and (b), (i)
is reasonably likely to have a Company Material Adverse Effect or (ii) in any
manner challenges or seeks to prevent, enjoin, alter or delay the transactions
contemplated by the Transaction Documents. The foregoing representation
includes, without limitation, Legal Proceedings pending or, to the knowledge of
the Company, threatened involving the prior employment of any of the Company's
employees, their use in connection with the Company's business of any
information or techniques allegedly proprietary to any of their former
employers, or their obligations under any agreements with prior employers. There
is no Legal Proceeding filed by the Company currently pending or that the
Company intends as of the date hereof to initiate. As used in this Agreement,
the term "Legal Proceeding" means any action, suit, proceeding, claim,
arbitration or investigation before any Governmental Entity or before any
arbitrator.
3.8 Distribution Agreements. Set forth on Section 3.8 of the
Disclosure Schedule is a list of each distribution, sales agency, sales
representative, reseller and other similar agreement to which the Company is a
party and which relates to distribution or sale of the Company's products.
3.9 Intellectual Property.
(a) To the knowledge of the Company, the operation of
the business of the Company as currently conducted or as currently proposed by
the Company to be conducted does not interfere with, conflict with, infringe
upon, misappropriate or otherwise violate the Intellectual Property rights of
any third party, and no action or claim is pending or, to the
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knowledge of the Company, threatened alleging that the operation of such
business interferes with, conflicts with, infringes upon, misappropriates or
otherwise violates the Intellectual Property rights of any third party. The
Company has no knowledge that the Company Owned Intellectual Property and any
Intellectual Property licensed to the Company under the Company Licensed
Intellectual Property, are invalid or unenforceable, and, to the Company's
knowledge, the same have not been adjudged invalid or unenforceable in whole or
in part.
(b) To the knowledge of the Company, the Company is
the owner of the right, title and interest in and to, or has a valid license or
other legal right under, the Company Owned Intellectual Property and the Company
Licensed Intellectual Property used in or necessary to the operation of its
business as currently conducted or as currently proposed by the Company to be
conducted, subject to the terms of the license agreements governing the Company
Licensed Intellectual Property. No Legal Proceedings have been filed, are
pending or, to the knowledge of the Company, threatened against the Company (i)
based upon or challenging or seeking to deny or restrict the ownership by the
Company of any of the Company Owned Intellectual Property or, to the knowledge
of the Company, the license rights of the Company to any Company Licensed
Intellectual Property, (ii) alleging that any services provided by, processes
used by, or products manufactured or sold by the Company infringe or
misappropriate any Intellectual Property right of any third party, or (iii)
alleging that the Company Licensed Intellectual Property is being licensed or
sublicensed in conflict with the terms of any license or other agreement.
3.10 FDA and Regulatory Matters.
(a) (i) With respect to the products of the Company
that are currently marketed or sold by the Company (collectively, the "Company
Products"), (A) the Company has obtained all necessary approvals, clearances,
authorizations, licenses and registrations required by the United States Federal
government or its agencies and all material approvals, clearances,
authorizations, licenses and registrations required by foreign governments or
government agencies, to permit the design, development, pre-clinical and
clinical testing, manufacture, labeling, sale, distribution and promotion of the
Company Products in jurisdictions where the Company currently conducts such
activities or contemplates conducting such activities (the "Activities to Date")
with respect to each Company Product (collectively, the "Company Licenses"); (B)
the Company is in material compliance with all terms and conditions of each
Company License and with all applicable laws pertaining to the Activities to
Date with respect to each Company Product which is not required to be the
subject of a Company License; (C) the Company is in material compliance with all
applicable laws regarding registration, license, certification for each site at
which a Company Product is manufactured, labeled, sold or distributed; and (D)
to the extent any Company Product has been exported from the United States, the
Company has exported such Company Product in compliance in all material respects
with applicable laws; (ii) all manufacturing operations performed by the Company
have been and are being conducted in all material respects in compliance with
the Quality Systems regulations of the U.S. Food and Drug Administration (the
"FDA") (21 CFR Part 820) and, to the extent applicable to the Company,
counterpart regulations in the European Union and all other countries where
compliance is required; (iii) all non-clinical laboratory studies of Company
Products under development, sponsored by the Company and intended to be used to
support regulatory clearance or approval, have been and are being conducted in
material compliance with the FDA's good
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Laboratory Practice for Non-Clinical Studies regulations (21 CFR Part 58) in the
United States and, to the extent applicable to the Company, counterpart
regulations in the European Union and all other countries; and (iv) the Company
is in material compliance with all applicable reporting requirements for all
Company Licenses or plant registrations described in clause (i) above,
including, but not limited to, applicable adverse event reporting requirements
in the United States and outside of the United States under applicable laws. The
Company has not received any written notice or other written communication from
the FDA or any other Governmental Entity (x) contesting the pre-market clearance
or approval of, the uses of or the labeling and promotion of any of the Company
Products or (y) otherwise alleging any violation of any laws by the Company.
There have been no recalls, field notifications or seizures ordered or adverse
regulatory actions taken (or to the knowledge of the Company threatened) by the
FDA or any other Governmental Entity with respect to any of the Company
Products.
(b) All of the Company's filings with and submissions
to the FDA and any corollary entity in any other jurisdiction with regard to the
Company Products were true, accurate and complete, in all material respects, as
of the date made, and did not materially misstate any of the statements or
information included therein, or omit to state a material fact necessary to make
the statements therein not misleading. To the extent required by applicable law,
the Company has updated all filings and submissions to the FDA and any corollary
entity in any other jurisdiction with regard to the Company Products.
3.11 Compliance with Laws; Permits. The Company is not in
violation of any applicable statute, rule, regulation, order, judgment, decree,
writ or restriction of any Governmental Entity in respect of the conduct of its
business or the ownership of its properties (including without limitation
environmental and occupational health and safety laws), which violation has had
or could reasonably be expected to have a Company Material Adverse Effect. The
Company has all material franchises, permits, licenses and any similar authority
necessary for the conduct of its business as now being conducted by it (the
"Permits"), the lack of which has had or could reasonably be expected to have a
Company Material Adverse Effect. As of the date hereof, no suspension or
cancellation of any of the Permits is pending or, to the knowledge of the
Company, threatened.
3.12 Registration or First Offer Rights. Except as provided in
or contemplated by the Registration Rights Agreement and the Fourth Amended and
Restated Registration Rights Agreement dated as of December 17, 1998 by and
among the Company and the parties named on the signature pages thereto, the
Company has not granted or agreed to grant any registration rights, including
piggyback rights, or any right of first offer or other pre-emptive rights to any
Person.
3.13 Contracts. Except for the Transaction Documents, since
March 30, 2002, neither the Company nor any Subsidiary of the Company has
entered into any contract or other agreement which would be required to be filed
by the Company with the SEC pursuant to Item 601(b)(10) of Regulation S-K of the
SEC.
3.14 Material Adverse Changes. Since March 30, 2002, there has
been no material adverse effect on or material adverse change in, or group of
such effects on or changes
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in, the assets, liabilities, business, condition (financial or otherwise) or
results of operations of the Company and its Subsidiaries, taken as a whole.
3.15 Certain Relationships and Related Transactions. Since
April 11, 2002 (the date on which the Company filed with the SEC the proxy
statement for its 2002 Annual Meeting of Stockholders), neither the Company nor
any of its Subsidiaries has entered into any relationship or transaction with
any director, director nominee or executive officer of the Company (or any
member of the immediate family of any of the foregoing) or, to the knowledge of
the Company, any security holder of the Company who is known to the Company to
own of record or beneficially more than 5% of the Common Stock (or any member of
the immediate family of such Person), which relationship or transaction would be
required to be disclosed by the Company pursuant to Item 404 of Regulation S-K
of the SEC.
3.16 Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by the Transaction Documents. The Company
will indemnify and hold the Purchaser harmless from and against any and all
claims, liabilities or obligations with respect to brokerage or finders' fees or
commissions, or consulting fees in connection with the transactions contemplated
by the Transaction Documents asserted by any Person on the basis of any
agreement, arrangement, statement or representation alleged to have been made by
the Company.
3.17 Taxes. Each of the Company and its Subsidiaries has duly
and timely filed all tax returns required to have been filed by it on or prior
to the date hereof and has duly paid or made provisions for the payment of all
taxes which have been incurred or are due or claimed to be due from it by any
taxing authority on or prior to the date of this Agreement other than (a) taxes
which are not yet delinquent or are being contested in good faith and have not
been finally determined, or (b) tax returns or taxes as to which the failure to
file, pay or make provision for will not, individually or in the aggregate, have
a Company Material Adverse Effect. There is no material liability outstanding
for or relating to any taxes, and there are no material liens for taxes (other
than current taxes not yet due and payable) on any of the Company Owned
Intellectual Property or Company Licensed Intellectual Property.
3.18 Environmental. To the knowledge of the Company, the
Company does not have any material liability relating to or arising out of any
judgment, decree or order relating to the environment or occupational health and
safety.
4. Representations of the Purchaser. The Purchaser represents and
warrants to the Company as follows:
4.1 Investment. The Purchaser is acquiring the Shares for its
own account for investment and not with a view to, or for sale in connection
with, any distribution thereof, nor with any present intention of distributing
or selling the same. The Purchaser is an "accredited investor" as defined in
Rule 501(a) under the Securities Act. The Purchaser has no present agreement,
undertaking, arrangement, obligation or commitment providing for the disposition
of the Shares, and has not been organized, reorganized or recapitalized
specifically for the purpose of investing in the Shares. The Purchaser
understands that the Shares may not be assigned, sold, pledged, transferred or
otherwise disposed of unless registered under the Securities Act and
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applicable state securities laws, or an opinion is given by counsel reasonably
satisfactory to the Company that such registration is not required; provided
that no such opinion shall be required for any transfer of Shares that is exempt
from such registration under Rule 144(k) under the Securities Act. The Purchaser
understands that the Company may affix a legend to any certificates representing
the Shares to the foregoing effect. As of the date hereof, the Purchaser
"beneficially owns" (as defined under the Exchange Act) 870,000 shares of the
Common Stock.
4.2 Incorporation, Authority, Validity and Noncontravention.
The Purchaser is duly organized, validly existing and in good standing under the
laws of the State of Delaware. The Purchaser has all requisite corporate power
and authority to enter into and to perform its obligations under the Transaction
Documents in accordance with their respective terms. The Transaction Documents
have been duly and validly executed and delivered by the Purchaser and
constitute valid and binding obligations of the Purchaser, enforceable against
the Purchaser in accordance with their respective terms, except as such
enforceability may be limited by bankruptcy, insolvency, moratorium or other
similar laws affecting or relating to creditors' rights generally, and general
principles of equity. Subject to compliance with the applicable filing and other
requirements of the Securities Act, the Exchange Act and any applicable state
securities laws, neither the execution and delivery by the Purchaser of the
Transaction Documents, nor the consummation by the Purchaser of the transactions
contemplated thereby, will (a) conflict with or violate any provision of the
Second Restated Certificate of Incorporation, as amended, or the Restated
By-laws of the Purchaser, (b) require on the part of the Purchaser any filing
with, or permit, authorization, consent or approval of, any Governmental Entity
(other than filings required under the Exchange Act), (c) conflict with, result
in breach of, constitute (with or without due notice or lapse of time or both) a
default under, result in the acceleration of obligations under, create in any
party any right to terminate, modify or cancel, or require any notice, consent
or waiver under, any contract or instrument to which the Purchaser is a party or
by which it is bound or to which any of its assets are subject, or (d) violate
any order, writ, injunction, decree, statute, rule or regulation applicable to
the Purchaser or any of its Subsidiaries or any of its or their properties or
assets.
4.3 Experience. The Purchaser has carefully reviewed the
representations concerning the Company contained in this Agreement, and has made
detailed inquiry concerning the Company, its business and its personnel; the
officers of the Company have made available to the Purchaser any and all written
information which it has requested and have answered to such Purchaser's
satisfaction all inquiries made by the Purchaser; and the Purchaser has
sufficient knowledge and experience in finance and business that it is capable
of evaluating the risks and merits of its investment in the Company and the
Purchaser is able financially to bear the risks thereof. Nothing in this Section
4.3 shall be deemed to limit or modify the Purchaser's right to rely on the
representations and warranties made herein.
4.4 Shares Not Registered. The Purchaser understands that the
Shares have not been registered under the Securities Act, by reason of their
issuance by the Company in a transaction exempt from the registration
requirements of the Securities Act, and that the Shares must continue to be held
by the Purchaser unless a subsequent disposition thereof is registered under the
Securities Act or is exempt from such registration. The Purchaser understands
that the exemptions from registration afforded by Rule 144 (the provisions of
which are known to it)
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promulgated under the Securities Act depend on the satisfaction of various
conditions, and that, if applicable, Rule 144 may afford the basis for sales
only in limited amounts.
4.5 Brokers. The Purchaser (a) has not retained a finder or
broker in connection with the transactions contemplated by the Transaction
Documents, and (b) will indemnify and hold the Company harmless from and against
any and all claims, liabilities or obligations with respect to brokerage or
finders' fees or commissions, or consulting fees in connection with the
transactions contemplated by the Transaction Documents asserted by any Person on
the basis of any agreement, arrangement, statement or representation alleged to
have been made by the Purchaser.
5. Conditions to the Obligations of the Purchaser. The obligation of
the Purchaser to purchase the Shares at the Closing is subject to the
fulfillment, or the waiver by the Purchaser, of each of the following conditions
on or before the Closing:
5.1 Accuracy of Representations and Warranties. Each
representation and warranty contained in Section 3 shall be true and correct on
and as of the Closing Date with the same effect as though such representation
and warranty had been made on and as of that date.
5.2 Performance. The Company shall have performed and complied
in all material respects with all agreements and conditions contained in this
Agreement required to be performed or complied with by the Company prior to or
at the Closing.
5.3 No Governmental Proceedings. No proceeding challenging the
Transaction Documents or the transactions contemplated thereby, or seeking to
prohibit, alter, prevent or materially delay the Closing, shall have been
instituted before any Governmental Entity and shall be pending.
5.4 Transaction Documents. Each of the Transaction Documents
shall have been executed and delivered by the Company.
5.5 Legal Opinions. The Purchaser shall have received from
Xxxx and Xxxx LLP, counsel to the Company, opinions reasonably satisfactory to
the Purchaser.
5.6 Qualifications. All authorizations, approvals or permits,
if any, of any Governmental Entity that are required as of the Closing Date in
connection with the issuance and sale of the Shares to the Purchaser pursuant to
this Agreement shall be duly obtained and effective as of the Closing Date.
5.7 Other Matters. All corporate and other proceedings in
connection with the transactions contemplated by the Transaction Documents and
all documents and instruments incident to such transactions shall be reasonably
satisfactory in substance and form to the Purchaser, and the Purchaser shall
have received all such counterpart originals or certified or other copies of
such documents as it may reasonably request.
6. Condition to the Obligations of the Company. The obligations of the
Company under Section 1 of this Agreement are subject to fulfillment of the
following condition on or before the Closing:
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6.1 Accuracy of Representations and Warranties. The
representations and warranties of the Purchaser contained in Section 4 shall be
true and correct on and as of the Closing Date with the same effect as though
such representations and warranties had been made on and as of that date.
6.2 Performance. The Purchaser shall have performed and
complied in all material respects with all agreements and conditions contained
in this Agreement required to be performed or complied with by the Purchaser
prior to or at the Closing.
6.3 No Governmental Proceedings. No proceeding challenging the
Transaction Documents or the transactions contemplated thereby, or seeking to
prohibit, alter, prevent or materially delay the Closing, shall have been
instituted before any Governmental Entity and shall be pending.
6.4 Transaction Documents. Each of the Transaction Documents
shall have been executed and delivered by the Purchaser.
7. Standstill Agreement.
(a) The Purchaser agrees that, during the period
commencing on the date hereof and terminating on December 31, 2004, unless as
shall have been specifically invited in writing by the Company, neither the
Purchaser nor any affiliates (as such term is defined under the Exchange Act) of
the Purchaser will in any manner, except as set forth below, directly or
indirectly:
(i) effect or seek, offer or propose (whether
publicly or otherwise) to effect, or cause or participate in or in any way
assist or encourage any other Person to effect or seek, offer or propose
(whether publicly or otherwise) to effect or participate in, (A) any acquisition
of any Securities (or "beneficial ownership" (as defined under the Exchange Act)
thereof) of the Company; (B) any tender or exchange offer (each, an "Offer"),
merger, asset acquisition or other business combination involving the Company
(each, a "Business Transaction"); (C) any recapitalization, restructuring,
liquidation, dissolution or other extraordinary transaction with respect to the
Company; or (D) any "solicitation" of "proxies" (as such terms are used in the
proxy rules of the SEC) or consents to vote any voting Securities of the
Company;
(ii) form, join or in any way participate in a
"group" (as defined under the Exchange Act) with respect to any Securities of
the Company (other than any group including only the Purchaser and its
affiliates);
(iii) otherwise act, alone or in concert with
others, to seek to control the Board of Directors of the Company;
(iv) knowingly take any action which might force
the Company to make a public announcement regarding any of the types of matters
set forth in (i) above; or
(v) enter into any arrangements with any third
party with respect to any of the foregoing;
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provided, however, that nothing in this Section 7 shall limit the ability of the
Purchaser (A) to acquire shares of the Company's voting Securities in the open
market from time to time provided that the total amount of voting Securities of
the Company "beneficially owned" (as defined under the Exchange Act) by the
Purchaser immediately after any such acquisition does not exceed 25.0% of the
Company's outstanding voting Securities (such percentage calculated assuming
conversion of all the Company's outstanding voting Securities into Common
Stock); (B) to tender shares into an Offer commenced by a third party that is
unaffiliated with the Company or the Purchaser; (C) to submit in good faith to
the Company a proposal relating to a Business Transaction involving the Company
and the Purchaser, provided, however, that any other Person (a "Third Party")
has commenced a bona fide Offer to purchase at least a majority of the
outstanding voting Securities of the Company, which Offer is not pursuant to an
acquisition agreement to which the Company is a party; (D) to submit in good
faith to the Company a proposal relating to a Business Transaction involving the
Company and the Purchaser at any time after the delivery of a Proposal Notice
(as defined in Section 7(b) below) to the Purchaser, provided, however, that the
Business Transaction proposed by the Purchaser requires either (1) the approval
of the Company's Board of Directors or (2) that the Company be a party to an
acquisition agreement with the Purchaser relating to such Business Transaction;
or (E) to vote in any annual or special meeting of the stockholders of the
Company.
(b) During the Notice Period (as defined below), the
Company agrees to provide the Purchaser with prompt written notice (a "Proposal
Notice") of the existence of bona fide discussions (as reasonably determined by
the Company in good faith) between the Company and a Third Party involving a
Business Transaction or a proposed Offer relating to the sale of the Company to
such Third Party (unless such discussions relate to an unsolicited offer from
such Third Party which is promptly rejected by the Company) (the "Third Party
Business Transaction"). The Parties acknowledge and agree that a Proposal Notice
(i) will not identify the name of the Third Party or any of the terms and
conditions of the proposed Third Party Business Transaction and (ii) must be
delivered to the Purchaser no later than two (2) calendar days following the
commencement of bona fide discussions (as reasonably determined by the Company
in good faith) with the Third Party relating to the Third Party Business
Transaction and in any event at least five (5) calendar days prior to the
execution of any definitive acquisition agreement between the Company and the
Third Party relating to the Third Party Business Transaction. For purposes of
this Section 7(b), the "Notice Period" shall mean the period commencing on the
date hereof and terminating on the earlier of (y) December 31, 2004 or (z) such
time as the aggregate number of voting Securities of the Company "beneficially
owned" (as defined under the Exchange Act) by the Purchaser is less than 950,000
shares (as adjusted for stock splits, stock dividends and similar adjustments).
The Purchaser agrees to notify the Company as promptly as reasonably practicable
after the occurrence, if any, of the event referred to in clause (z) of the
immediately preceding sentence.
8. Transfer of Shares.
8.1 Restricted Shares. "Restricted Shares" means (a) the
Shares and (b) any other shares of capital stock of the Company issued in
respect of such shares (as a result of stock splits, stock dividends,
reclassifications, recapitalizations or similar events); provided, however, that
shares of Common Stock which are Restricted Shares shall cease to be Restricted
Shares (x) upon any sale pursuant to an effective registration statement under
the Securities Act or Rule
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144 under the Securities Act or (y) at such time as they become eligible for
sale under Rule 144(k) under the Securities Act.
8.2 Requirements for Transfer. The Purchaser acknowledges and
agrees that the Restricted Shares shall not be sold or transferred unless either
(a) they first shall have been registered under the Securities Act or (b) the
Company first shall have been furnished with an opinion of legal counsel,
reasonably satisfactory to the Company, to the effect that such sale or transfer
is exempt from the registration requirements of the Securities Act.
8.3 Legend. Each certificate representing Restricted Shares
shall bear a legend substantially in the following form:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and
may not be offered, sold or otherwise transferred, pledged or
hypothecated unless and until such shares are registered under
such Securities Act or an opinion of counsel satisfactory to
the Company is obtained to the effect that such registration
is not required."
The Purchaser acknowledges and agrees that the Company, in its discretion, may
cause stop transfer orders to be placed with its transfer agent with respect to
the certificates representing any Restricted Shares in order to facilitate the
transfer restrictions referred to in Section 8.2. The Company shall remove the
legend from the certificates representing any Restricted Shares, at the request
of the holder thereof, at such time as they become eligible for resale pursuant
to Rule 144(k) under the Securities Act or sold pursuant to an effective
registration statement under the Securities Act.
9. Miscellaneous.
9.1 Definitions. The following terms shall have the follow
means when used herein:
(a) "Company Licensed Intellectual Property" means
all (i) licenses of Intellectual Property to the Company or any of its
Subsidiaries by any third party, and (ii) licenses of Intellectual Property by
the Company or any of its Subsidiaries to any third party.
(b) "Company Owned Intellectual Property" means all
Intellectual Property owned by the Company or any of its Subsidiaries.
(c) "Indebtedness" means as applied to any Person,
(i) all indebtedness for borrowed money, whether current or funded, or secured
or unsecured, (ii) all indebtedness for the deferred purchase price of property
or services represented by a note or other security, (iii) all indebtedness
created or arising under any conditional sale or other title retention agreement
with respect to property acquired (even though the rights and remedies of the
seller or lender under such agreement in the event of default are limited to
repossession or sale of such property), (iv) all indebtedness secured by a
purchase money mortgage or other lien to secure all or part of the purchase
price of property subject to such mortgage or lien, (v) all obligations under
leases which shall have been or must be, in accordance with United States
generally accepted
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accounting principles, recorded as capital leases in respect of which such
Person is liable as lessee, (vi) any liability in respect of banker's
acceptances or letters of credit, and (vii) all indebtedness referred to in
clause (i), (ii), (iii), (iv), (v) or (vi) above which is directly or indirectly
guaranteed by or which such Person has agreed (contingently or otherwise) to
purchase or otherwise acquire or in respect of which it has otherwise assured a
creditor against loss.
(d) "Intellectual Property" means intellectual
property or proprietary rights of any description, including (i) rights in any
patent, patent application (including any continuation, continuation-in-part and
divisional filings), copyright, industrial design, URL, domain name, trademark,
service xxxx, logo, trade dress or trade name, (ii) related registrations and
applications for registration, (iii) trade secrets, moral rights or publicity
rights, (iv) inventions, discoveries or improvements, modification, know-how,
technique, methodology, writing, work of authorship, design or data, whether or
not patented, patentable, copyrightable or reduced to practice, including any
inventions, discoveries, improvements, modification, know-how, technique,
methodology, writing, work of authorship, design or data embodied or disclosed
in any: (1) computer source codes (human readable format) and object codes
(machine readable format); (2) specifications; (3) manufacturing, assembly,
test, installation, service and inspection instructions and procedures; (4)
engineering, programming, service and maintenance notes and logs; (5) technical,
operating and service and maintenance manuals and data; (6) hardware reference
manuals; and (7) user documentation, help files or training materials, and (v)
good will related to any of the foregoing.
(e) "Securities" means all shares of Common Stock and
Preferred Stock, all outstanding options, warrants, convertible notes, rights of
conversion and other rights to acquire capital stock of the Company, and all
shares issuable upon exercise or conversion of the Preferred Stock, options,
warrants, convertible notes, rights of conversion and other rights to acquire
capital stock of the Company, outstanding from time to time, whether or not then
currently vested, exercisable or convertible.
(f) "Subsidiary" or "Subsidiaries" of any Person
means any corporation, partnership, limited liability company, joint venture or
other legal entity of which such Person (either above or through or together
with any other subsidiary) owns, directly or indirectly, more than 50% of the
stock or other equity interests the holders of which are generally entitled to
vote for the election of the board of directors or other governing body of such
corporation or other legal entity.
9.2 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the Company and the Purchaser and their
respective successors and permitted assigns.
9.3 Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.
9.4 Specific Performance. In addition to any and all other
remedies that may be available at law in the event of any breach of this
Agreement, each Party shall be entitled to
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specific performance of the agreements and obligations of the other Party
hereunder and to such other injunctive or other equitable relief as may be
granted by a court of competent jurisdiction.
9.5 Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Delaware (without
reference to the conflicts of law provisions thereof).
9.6 Notices. All notices, requests, consents and other
communications under this Agreement shall be in writing and shall be deemed
delivered (a) two business days after being sent by registered or certified
mail, return receipt requested, postage prepaid or (b) one business day after
being sent via a reputable nationwide overnight courier service guaranteeing
next business day delivery, in each case to the intended recipient as set forth
below:
If to the Company, at 000 Xxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000-0000, Attention: President, or at such other address or
addresses as may have been furnished in writing by the Company to the Purchaser,
with a copy to Xxxxx X. Xxxxxx, Esq., Xxxx and Xxxx LLP, 00 Xxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000-0000; and
If to the Purchaser, at Xxx Xxxxxx Xxxxxxxxxx Xxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000-0000, Attention: Chief Financial Officer, or at such other
address or addresses as may have been furnished in writing by the Purchaser to
the Company, with a copy to Boston Scientific Corporation, Xxx Xxxxxx Xxxxxxxxxx
Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000-0000, Attention: General Counsel.
Either Party may give any notice, request, consent or other
communication under this Agreement using any other means (including, without
limitation, personal delivery, messenger service, telecopy, first class mail or
electronic mail), but no such notice, request, consent or other communication
shall be deemed to have been duly given unless and until it is actually received
by the other Party. Either Party may change the address to which notices,
requests, consents or other communications hereunder are to be delivered by
giving the other Party notice in the manner set forth in this Section 9.6.
9.7 Complete Agreement. This Agreement constitutes the entire
agreement and understanding of the Parties with respect to the subject matter
hereof and supersedes all prior agreements and understandings relating to such
subject matter.
9.8 Amendments and Waivers. Except as otherwise expressly set
forth in this Agreement, any term of this Agreement may be amended or terminated
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively), with the
written consent of the Company and the Purchaser.
9.9 Counterparts; Facsimile Signatures. This Agreement may be
executed in any number of counterparts, each of which shall be deemed to be an
original, and all of which shall constitute one and the same document. The
delivery of a signature page of this Agreement by one Party to the other Party
via facsimile transmission shall constitute the execution and delivery of this
Agreement by the transmitting Party.
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9.10 Section Headings. The section headings are for the
convenience of the Parties and in no way alter, modify, amend, limit or restrict
the contractual obligations of the Parties.
9.11 Legal Fees and Expenses. Each of the Parties to this
Agreement will bear its own legal fees and other expenses with respect to the
transaction contemplated by this Agreement.
9.12 Publicity. The Parties agree that no public release or
announcement concerning this Agreement shall be issued by either Party without
the prior consent of the other Party (which consent shall not be unreasonably
withheld), except as such release or announcement may be required by law or the
rules or regulations of any securities exchange or the National Association of
Securities Dealers, in which case the Party required to make the release or
announcement shall use its reasonable best efforts to allow the other Party
reasonable time to comment on such release or announcement, in advance of such
issuance.
[Remainder of page intentionally left blank]
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Executed as of the date first written above.
THE COMPANY:
ASPECT MEDICAL SYSTEMS, INC.
By: /s/ J. Xxxx Xxxxxxxxx
----------------------------------------
Name: J. Xxxx Xxxxxxxxx
---------------------------------
Title: Vice President and
---------------------------------
Chief Financial Officer
---------------------------------
THE PURCHASER:
BOSTON SCIENTIFIC CORPORATION
By: /s/ Xxxxxxxx Best
----------------------------------------
Name: Xxxxxxxx Best
---------------------------------
Title: CFO
---------------------------------
