Exhibit 2.1
EXECUTION COPY
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AGREEMENT AND PLAN OF MERGER
Dated as of January 25, 2006
Among
BOSTON SCIENTIFIC CORPORATION,
GALAXY MERGER SUB, INC.
And
GUIDANT CORPORATION
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TABLE OF CONTENTS
Page
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ARTICLE I
The Merger
SECTION 1.01. The Merger.....................................................1
SECTION 1.02. Closing........................................................2
SECTION 1.03. Effective Time.................................................2
SECTION 1.04. Effects of the Merger..........................................2
SECTION 1.05. Articles of Incorporation and By-laws..........................2
SECTION 1.06. Directors......................................................2
SECTION 1.07. Officers.......................................................2
ARTICLE II
Effect of the Merger on the Capital Stock of the
Constituent Corporations; Exchange of Certificates
SECTION 2.01. Effect on Capital Stock........................................3
SECTION 2.02. Exchange of Certificates.......................................4
ARTICLE III
Representations and Warranties
SECTION 3.01. Representations and Warranties of the Company..................7
SECTION 3.02. Representations and Warranties of Parent and Sub..............27
ARTICLE IV
Covenants Relating to Conduct of Business; No Solicitation
SECTION 4.01. Conduct of Business...........................................38
SECTION 4.02. No Solicitation...............................................44
ARTICLE V
Additional Agreements
SECTION 5.01. Preparation of the Form S-4 and the Proxy Statement;
Shareholders' Meetings........................................47
SECTION 5.02. Access to Information; Confidentiality........................48
SECTION 5.03. Reasonable Best Efforts.......................................49
SECTION 5.04. Company Stock Options; ESPP...................................51
SECTION 5.05. Indemnification, Exculpation and Insurance....................53
SECTION 5.06. Fees and Expenses.............................................54
SECTION 5.07. Public Announcements..........................................55
SECTION 5.08. Affiliates....................................................56
SECTION 5.09. Stock Exchange Listing........................................56
SECTION 5.10. Shareholder Litigation........................................56
SECTION 5.11. Employee Matters..............................................56
SECTION 5.12. Company Notes.................................................58
SECTION 5.13. Rights Agreement..............................................58
SECTION 5.14. Termination Fee...............................................58
SECTION 5.15. Sale of Certain Assets Prior to Closing.......................58
ARTICLE VI
Conditions Precedent
SECTION 6.01. Conditions to Each Party's Obligation to Effect the Merger....59
SECTION 6.02. Conditions to Obligations of Parent and Sub...................59
SECTION 6.03. Conditions to Obligation of the Company.......................60
SECTION 6.04. Frustration of Closing Conditions.............................61
ARTICLE VII
Termination, Amendment and Waiver
SECTION 7.01. Termination...................................................61
SECTION 7.02. Effect of Termination.........................................62
SECTION 7.03. Amendment.....................................................62
SECTION 7.04. Extension; Waiver.............................................63
SECTION 7.05. Procedure for Termination or Amendment........................63
ARTICLE VIII
General Provisions
SECTION 8.01. Nonsurvival of Representations and Warranties.................63
SECTION 8.02. Notices.......................................................63
SECTION 8.03. Definitions...................................................64
SECTION 8.04. Interpretation................................................66
SECTION 8.05. Consents and Approvals........................................66
SECTION 8.06. Counterparts..................................................66
SECTION 8.07. Entire Agreement; No Third-Party Beneficiaries................66
SECTION 8.08. GOVERNING LAW.................................................66
SECTION 8.09. Assignment....................................................67
SECTION 8.10. Specific Enforcement; Consent to Jurisdiction.................67
SECTION 8.11. Waiver of Jury Trial..........................................67
SECTION 8.12. Severability..................................................67
Annex I Index of Defined Terms
Exhibit A Restated Articles of Incorporation of the Surviving Corporation
Exhibit B Affiliate Letter
Exhibit C Form of Voting Agreement
AGREEMENT AND PLAN OF MERGER (this "Agreement") dated as of January
25, 2006, among BOSTON SCIENTIFIC CORPORATION, a Delaware corporation
("Parent"), GALAXY MERGER SUB, INC., an Indiana corporation and a wholly owned
Subsidiary of Parent ("Sub"), and GUIDANT CORPORATION, an Indiana corporation
(the "Company").
WHEREAS, the Company and Xxxxxxx & Xxxxxxx ("J&J") entered into an
Agreement and Plan of Merger, dated as of December 15, 2004, amended and
restated as of November 14, 2005 and further amended as of January 11, 2006 and
January 13, 2006 (the "J&J Agreement");
WHEREAS, immediately prior to execution of this Agreement, the Company
terminated the J&J Agreement in accordance with its terms;
WHEREAS, the Board of Directors of each of the Company and Sub has
adopted, and the Board of Directors of Parent has approved, this Agreement and
the merger of Sub with and into the Company (the "Merger"), upon the terms and
subject to the conditions set forth in this Agreement, whereby each issued and
outstanding share of common stock, without par value, of the Company ("Company
Common Stock"), other than shares of Company Common Stock directly owned by
Parent, Sub or the Company, will be converted into the right to receive (a) a
number of validly issued, fully paid and nonassessable shares of common stock,
par value $0.01 per share, of Parent ("Parent Common Stock") and (b) $42.00 in
cash, without interest;
WHEREAS, certain stockholders of Parent have entered into Voting
Agreements with the Company, dated as of the date hereof, providing that, among
other things, such stockholders will vote their shares of Parent Common Stock
in favor of (i) an amendment to the Second Restated Certificate of
Incorporation of Parent, as amended (the "Parent Certificate"), to increase the
authorized number of shares of Parent Common Stock from 1,200,000,000 to
2,000,000,000 (the "Amendment") and (ii) the issuance of shares of Parent
Common Stock to the shareholders of the Company pursuant to the terms of the
Merger (the "Share Issuance"); and
WHEREAS, Parent, Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe various conditions to the Merger.
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement, and subject to the
conditions set forth herein, the parties hereto agree as follows:
ARTICLE I
The Merger
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SECTION 1.01. The Merger. Upon the terms and subject to the conditions
set forth in this Agreement, and in accordance with the Business Corporation
Law of the State of Indiana (the "IBCL"), Sub shall be merged with and into the
Company at the Effective Time. Following the Effective Time, the separate
corporate existence of Sub shall cease and the Company shall continue as the
surviving corporation in the Merger (the "Surviving Corporation") and shall
succeed to and assume all the rights and obligations of Sub in accordance with
the IBCL.
SECTION 1.02. Closing. The closing of the Merger (the "Closing") will
take place at 10:00 a.m., local time, on a date to be specified by the parties,
which shall be no later than the second business day after satisfaction or (to
the extent permitted by applicable Law) waiver of the conditions set forth in
Article VI (other than those conditions that by their terms are to be satisfied
at the Closing, but subject to the satisfaction or (to the extent permitted by
applicable Law) waiver of those conditions), at the offices of Shearman &
Sterling LLP, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, unless another
time, date or place is agreed to in writing by Parent and the Company;
provided, however, that if all the conditions set forth in Article VI shall no
longer be satisfied or (to the extent permitted by applicable Law) waived on
such second business day, then the Closing shall take place on the first
business day on which all such conditions shall again have been satisfied or
(to the extent permitted by applicable Law) waived unless another time is
agreed to in writing by Parent and the Company. The date on which the Closing
occurs is referred to in this Agreement as the "Closing Date".
SECTION 1.03. Effective Time. Subject to the provisions of this
Agreement, as soon as practicable on the Closing Date, the parties shall file
with the Secretary of State of the State of Indiana articles of merger (the
"Articles of Merger") executed and acknowledged by the parties in accordance
with the relevant provisions of the IBCL and, as soon as practicable on or
after the Closing Date, shall make all other filings or recordings required
under the IBCL. The Merger shall become effective upon the filing of the
Articles of Merger with the Secretary of State of the State of Indiana, or at
such later time as Parent and the Company shall agree and shall specify in the
Articles of Merger (the time the Merger becomes effective being the "Effective
Time").
SECTION 1.04. Effects of the Merger. The Merger shall have the effects
set forth in Section 23-1-40-6 of the IBCL.
SECTION 1.05. Articles of Incorporation and By-laws. (a) The Articles
of Incorporation of the Company (the "Company Articles") shall be amended at
the Effective Time to be in the form of Exhibit A and, as so amended, such
Company Articles shall be the Restated Articles of Incorporation of the
Surviving Corporation until thereafter changed or amended as provided therein
or by applicable Law.
(b) The By-laws of Sub, as in effect immediately prior to the
Effective Time, shall be the By-laws of the Surviving Corporation until
thereafter changed or amended as provided therein or by applicable Law.
SECTION 1.06. Directors. The directors of Sub immediately prior to the
Effective Time shall be the directors of the Surviving Corporation until the
earlier of their resignation or removal or until their respective successors
are duly elected and qualified, as the case may be.
SECTION 1.07. Officers. The officers of the Company immediately prior
to the Effective Time shall be the officers of the Surviving Corporation until
the earlier of their resignation or removal or until their respective
successors are duly elected and qualified, as the case may be.
ARTICLE II
Effect of the Merger on the Capital Stock of the
Constituent Corporations; Exchange of Certificates
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SECTION 2.01. Effect on Capital Stock. At the Effective Time, by
virtue of the Merger and without any action on the part of the holder of any
shares of Company Common Stock or any shares of capital stock of Parent or Sub:
(a) Capital Stock of Sub. Each issued and outstanding share of capital
stock of Sub shall be converted into and become one validly issued, fully
paid and nonassessable share of common stock, without par value, of the
Surviving Corporation.
(b) Cancelation of Treasury Stock and Parent-Owned Stock. Each share
of Company Common Stock that is directly owned by the Company, Parent or
Sub immediately prior to the Effective Time shall automatically be
canceled and shall cease to exist, and no consideration shall be delivered
in exchange therefor.
(c) Conversion of Company Common Stock. Subject to Section 2.02(e),
each share of Company Common Stock issued and outstanding immediately
prior to the Effective Time (other than shares to be canceled in
accordance with Section 2.01(b)) shall be converted into the right to
receive (i) that number of validly issued, fully paid and nonassessable
shares of Parent Common Stock (the "Stock Portion") equal to the quotient
determined by dividing $38.00 by the Parent Average Closing Stock Price
(as defined below) and rounding the result to the nearest 1/10,000 of a
share (the "Exchange Ratio"), payable upon surrender, in the manner
provided in Section 2.02, of the certificate that formerly evidenced such
share of Company Common Stock; provided, however, that if such quotient is
less than 1.3167, the Exchange Ratio will be 1.3167 and if such quotient
is greater than 1.6799, the Exchange Ratio will be 1.6799, (ii) $42.00 in
cash, without interest (the "Cash Portion") and (iii) if the Closing shall
not have occurred on or prior to March 31, 2006, an amount in cash equal
to $0.0132 per day for each day during the period commencing April 1, 2006
through the date of the Closing (the "Interest Portion"; the Interest
Portion, if any, together with the Stock Portion and Cash Portion, being
the "Merger Consideration"). For the purposes of this Section 2.01, the
term "Parent Average Closing Stock Price" means the average of the per
share closing prices of Parent Common Stock on the NYSE during the 20
consecutive trading days ending on (and including) the date that is three
trading days prior to the date of the Closing. At the Effective Time, all
such shares of Company Common Stock shall no longer be outstanding and
shall automatically be canceled and shall cease to exist, and each holder
of a certificate which immediately prior to the Effective Time represented
any such shares of Company Common Stock (each, a "Certificate") shall
cease to have any rights with respect thereto, except the right to receive
the Merger Consideration, any dividends or other distributions payable
pursuant to Section 2.02(c) and cash in lieu of any fractional shares
payable pursuant to Section 2.02(e), in each case to be issued or paid in
consideration therefor upon surrender of such Certificate in accordance
with Section 2.02(b), without interest. Notwithstanding the foregoing, if
between the date of this Agreement and the Effective Time, (A) the
outstanding shares of Parent Common Stock shall have been changed into a
different number of shares or a different class, by reason of the
occurrence or record date of any stock dividend, subdivision,
reclassification, recapitalization, split, combination, exchange of shares
or similar transaction, (B) Parent declares or pays cash dividends in any
fiscal quarter in excess of 200% of the amount of regularly quarterly
dividends paid by the Parent immediately prior to the date hereof or (C)
Parent engages in any spin-off or split-off, then in any such case the
Exchange Ratio shall be appropriately adjusted to reflect such action. The
right of any holder of a Certificate to receive the Merger Consideration,
any dividends or other distributions payable pursuant to Section 2.02(c)
and cash in lieu of any fractional shares payable pursuant to Section
2.02(e) shall be subject to and reduced by the amount of any withholding
that is required under applicable tax Law.
SECTION 2.02. Exchange of Certificates. (a) Exchange Agent. Prior to
the Effective Time, Parent shall appoint EquiServe Trust Company or another
bank or trust company that is reasonably satisfactory to the Company to act as
exchange agent (the "Exchange Agent") for the payment of the Merger
Consideration. At the Effective Time, Parent shall deposit, or cause the
Surviving Corporation to deposit, with the Exchange Agent, for the benefit of
the holders of Certificates, certificates representing shares of Parent Common
Stock and cash in an amount sufficient to pay the aggregate Merger
Consideration required to be paid pursuant to Section 2.01(c). In addition,
Parent shall deposit with the Exchange Agent, as necessary from time to time
after the Effective Time, any dividends or other distributions payable pursuant
to Section 2.02(c) and cash in lieu of any fractional shares payable pursuant
to Section 2.02(e). All shares of Parent Common Stock, cash, dividends and
distributions deposited with the Exchange Agent pursuant to this Section
2.02(a) shall hereinafter be referred to as the "Exchange Fund".
(b) Exchange Procedures. As soon as reasonably practicable after the
Effective Time, Parent shall cause the Exchange Agent to mail to each holder of
record of a Certificate whose shares of Company Common Stock were converted
into the right to receive the Merger Consideration, any dividends or other
distributions payable pursuant to Section 2.02(c) and cash in lieu of any
fractional shares payable pursuant to Section 2.02(e) (i) a form of letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon proper delivery of the
Certificates to the Exchange Agent and which shall be in customary form and
contain customary provisions) and (ii) instructions for use in effecting the
surrender of the Certificates in exchange for the Merger Consideration, any
dividends or other distributions payable pursuant to Section 2.02(c) and cash
in lieu of any fractional shares payable pursuant to Section 2.02(e). Each
holder of record of one or more Certificates shall, upon surrender to the
Exchange Agent of such Certificate or Certificates, together with such letter
of transmittal, duly executed, and such other documents as may reasonably be
required by the Exchange Agent, be entitled to receive in exchange therefor (i)
the amount of cash to which such holder is entitled pursuant to Section
2.01(c), (ii) a certificate or certificates representing that number of whole
shares of Parent Common Stock (after taking into account all Certificates
surrendered by such holder) to which such holder is entitled pursuant to
Section 2.01(c) (which shall be in uncertificated book entry form unless a
physical certificate is requested), (iii) any dividends or distributions
payable pursuant to Section 2.02(c) and (iv) cash in lieu of any fractional
shares payable pursuant to Section 2.02(e), and the Certificates so surrendered
shall forthwith be canceled. In the event of a transfer of ownership of Company
Common Stock which is not registered in the transfer records of the Company,
payment of the Merger Consideration in accordance with this Section 2.02(b) may
be made to a person other than the person in whose name the Certificate so
surrendered is registered if such Certificate shall be properly endorsed or
otherwise be in proper form for transfer and the person requesting such payment
shall pay any transfer or other taxes required by reason of the payment of the
Merger Consideration, any dividends or other distributions payable pursuant to
Section 2.02(c) and cash in lieu of any fractional shares payable pursuant to
Section 2.02(e) to a person other than the registered holder of such
Certificate or establish to the reasonable satisfaction of Parent that such
taxes have been paid or are not applicable. Until surrendered as contemplated
by this Section 2.02(b), each Certificate shall be deemed at any time after the
Effective Time to represent only the right to receive upon such surrender the
Merger Consideration, any dividends or other distributions payable pursuant to
Section 2.02(c) and cash in lieu of any fractional shares payable pursuant to
Section 2.02(e). No interest shall be paid or will accrue on any payment to
holders of Certificates pursuant to the provisions of this Article II.
(c) Distributions with Respect to Unexchanged Shares. No dividends or
other distributions with respect to Parent Common Stock with a record date
after the Effective Time shall be paid to the holder of any unsurrendered
Certificate with respect to the shares of Parent Common Stock that the holder
thereof has the right to receive upon the surrender thereof, and no cash
payment in lieu of fractional shares of Parent Common Stock shall be paid to
any such holder pursuant to Section 2.02(e), in each case until the holder of
such Certificate shall have surrendered such Certificate in accordance with
this Article II. Following the surrender of any Certificate, there shall be
paid to the record holder of the certificate representing whole shares of
Parent Common Stock issued in exchange therefor, without interest, (i) at the
time of such surrender, the amount of dividends or other distributions with a
record date after the Effective Time theretofore paid with respect to such
whole shares of Parent Common Stock and the amount of any cash payable in lieu
of a fractional share of Parent Common Stock to which such holder is entitled
pursuant to Section 2.02(e) and (ii) at the appropriate payment date, the
amount of dividends or other distributions with a record date after the
Effective Time but prior to such surrender and a payment date subsequent to
such surrender payable with respect to such whole shares of Parent Common
Stock.
(d) No Further Ownership Rights in Company Common Stock. The Merger
Consideration, any dividends or other distributions payable pursuant to Section
2.02(c) and cash in lieu of any fractional shares payable pursuant to Section
2.02(e) paid upon the surrender of Certificates in accordance with the terms of
this Article II shall be deemed to have been paid in full satisfaction of all
rights pertaining to the shares of Company Common Stock formerly represented by
such Certificates. At the close of business on the day on which the Effective
Time occurs, the share transfer books of the Company shall be closed, and there
shall be no further registration of transfers on the share transfer books of
the Surviving Corporation of the shares of Company Common Stock that were
outstanding immediately prior to the Effective Time. If, after the Effective
Time, any Certificate is presented to the Surviving Corporation for transfer,
it shall be canceled against delivery of the Merger Consideration, any
dividends or other distributions payable pursuant to Section 2.02(c) and cash
in lieu of any fractional shares payable pursuant to Section 2.02(e) to the
holder thereof as provided in this Article II.
(e) No Fractional Shares. (i) No certificates or scrip representing
fractional shares of Parent Common Stock shall be issued upon the surrender for
exchange of Certificates, no dividends or other distributions of Parent shall
relate to such fractional share interests and such fractional share interests
will not entitle the owner thereof to vote or to any rights of a stockholder of
Parent.
(ii) In lieu of such fractional share interests, Parent shall
pay to each holder of a Certificate an amount in cash equal to the product
obtained by multiplying (A) the fractional share interest to which such holder
(after taking into account all shares of Company Common Stock formerly
represented by all Certificates surrendered by such holder) would otherwise be
entitled by (B) the per share closing price of Parent Common Stock on the
Closing Date (the "Closing Price"), as such price is reported on the New York
Stock Exchange, Inc.(the "NYSE") Composite Transaction Tape (as reported by
Bloomberg Financial Markets or such other source as the parties shall agree in
writing).
(f) Termination of the Exchange Fund. Any portion of the Exchange Fund
which remains undistributed to the holders of the Certificates for six months
after the Effective Time shall be delivered to Parent, upon demand, and any
holders of the Certificates who have not theretofore complied with this Article
II shall thereafter look only to Parent for, and Parent shall remain liable
for, payment of their claim for the Merger Consideration, any dividends or
other distributions payable pursuant to Section 2.02(c) and cash in lieu of any
fractional shares payable pursuant to Section 2.02(e) in accordance with this
Article II.
(g) No Liability. None of Parent, Sub, the Company, the Surviving
Corporation or the Exchange Agent shall be liable to any person in respect of
any shares of Parent Common Stock, cash, dividends or other distributions from
the Exchange Fund properly delivered to a public official pursuant to any
applicable abandoned property, escheat or similar Law. If any Certificate shall
not have been surrendered prior to four years after the Effective Time (or
immediately prior to such earlier date on which any Merger Consideration (and
any dividends or other distributions payable with respect thereto pursuant to
Section 2.02(c) and cash in lieu of any fractional shares payable with respect
thereto pursuant to Section 2.02(e)) would otherwise escheat to or become the
property of any Governmental Entity), any such Merger Consideration (and any
dividends or other distributions payable with respect thereto pursuant to
Section 2.02(c) and cash in lieu of any fractional shares payable with respect
thereto pursuant to Section 2.02(e)) shall, to the extent permitted by
applicable Law, become the property of Parent, free and clear of all claims or
interest of any person previously entitled thereto.
(h) Investment of Exchange Fund. The Exchange Agent shall invest the
cash included in the Exchange Fund as directed by Parent. Any interest and
other income resulting from such investments shall be paid to and be income of
Parent. If for any reason (including losses) the cash in the Exchange Fund
shall be insufficient to fully satisfy all of the payment obligations to be
made in cash by the Exchange Agent hereunder, Parent shall promptly deposit
cash into the Exchange Fund in an amount which is equal to the deficiency in
the amount of cash required to fully satisfy such cash payment obligations.
(i) Lost Certificates. If any Certificate shall have been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if required by
Parent, the posting by such person of a bond in such reasonable amount as
Parent may direct as indemnity against any claim that may be made against it
with respect to such Certificate, the Exchange Agent shall deliver in exchange
for such lost, stolen or destroyed Certificate the Merger Consideration, any
dividends or other distributions payable pursuant to Section 2.02(c) and cash
in lieu of any fractional shares payable pursuant to Section 2.02(e), in each
case pursuant to this Article II.
(j) Withholding Rights. Parent, the Surviving Corporation or the
Exchange Agent shall be entitled to deduct and withhold from the consideration
otherwise payable pursuant to this Agreement to any holder of Certificates such
amounts as Parent, the Surviving Corporation or the Exchange Agent is required
to deduct and withhold with respect to the making of such payment under the
Internal Revenue Code of 1986, as amended (the "Code"), or any provision of
state, local or foreign tax Law. To the extent that amounts are so withheld and
paid over to the appropriate taxing authority by Parent, the Surviving
Corporation or the Exchange Agent, such withheld amounts shall be treated for
all purposes of this Agreement as having been paid to the holder of
Certificates in respect of which such deduction and withholding was made by
Parent, the Surviving Corporation or the Exchange Agent.
ARTICLE III
Representations and Warranties
------------------------------
SECTION 3.01. Representations and Warranties of the Company. Except as
disclosed in the Company SEC Documents filed by the Company and publicly
available prior to the date of this Agreement ("Filed Company SEC Documents"),
and except as set forth in the disclosure schedule delivered by the Company to
Parent prior to the execution of this Agreement (the "Company Disclosure
Schedule") (with specific reference to the particular Section or subsection of
this Agreement to which the information set forth in such disclosure schedule
relates; provided, however, that any information set forth in one section of
the Company Disclosure Schedule shall be deemed to apply to each other Section
or subsection thereof to which its relevance is readily apparent on its face),
the Company represents and warrants to Parent and Sub as follows:
(a) Organization, Standing and Corporate Power. Each of the Company
and its Subsidiaries has been duly organized, and is validly existing and in
good standing (with respect to jurisdictions that recognize that concept) under
the Laws of the jurisdiction of its incorporation or formation, as the case may
be, and has all requisite power and authority and possesses all governmental
licenses, permits, authorizations and approvals necessary to enable it to use
its corporate or other name and to own, lease or otherwise hold and operate its
properties and other assets and to carry on its business as currently
conducted, except where the failure to have such governmental licenses,
permits, authorizations or approvals individually or in the aggregate has not
had and would not reasonably be expected to have a Material Adverse Effect.
Each of the Company and its Subsidiaries is duly qualified or licensed to do
business and is in good standing (with respect to jurisdictions that recognize
that concept) in each jurisdiction in which the nature of its business or the
ownership, leasing or operation of its properties makes such qualification,
licensing or good standing necessary, other than in such jurisdictions where
the failure to be so qualified, licensed or in good standing individually or in
the aggregate has not had and would not reasonably be expected to have a
Material Adverse Effect. The Company has made available to Parent, prior to the
date of this Agreement, complete and accurate copies of the Company Articles
and the Company's By-laws (the "Company By-laws"), and the comparable
organizational documents of each Significant Subsidiary (as such term is
defined in Rule 12b-2 under the Exchange Act), in each case as amended to the
date hereof.
(b) Subsidiaries. Section 3.01(b) of the Company Disclosure Schedule
lists, as of the date hereof, (i) each Significant Subsidiary of the Company
(including its state of incorporation or formation) and (ii) each other
Subsidiary of the Company. All of the outstanding capital stock of, or other
equity interests in, each Significant Subsidiary of the Company, is directly or
indirectly owned by the Company. All the issued and outstanding shares of
capital stock of, or other equity interests in, each such Subsidiary owned by
the Company have been validly issued and are fully paid and nonassessable and
are owned directly or indirectly by the Company free and clear of all pledges,
liens, charges, encumbrances or security interests of any kind or nature
whatsoever (other than liens, charges and encumbrances for current taxes not
yet due and payable) (collectively, "Liens"), and free of any restriction on
the right to vote, sell or otherwise dispose of such capital stock or other
equity interests. Except with respect to securities of non-Affiliates that, to
the Knowledge of the Company, do not constitute a 20% or greater interest in
such non-Affiliates (or a 5% or greater interest in such non-Affiliates if the
Company's investment therein is greater than $20,000,000), and except for the
capital stock of, or voting securities or equity interests in, its
Subsidiaries, the Company does not own, directly or indirectly, as of the date
hereof, any capital stock of, or other voting securities or equity interests
in, any corporation, partnership, joint venture, association or other entity.
(c) Capital Structure. The authorized capital stock of the Company
consists of 1,000,000,000 shares of Company Common Stock and 50,000,000 shares
of preferred stock, without par value ("Company Preferred Stock"). 1,000,000
shares of Company Preferred Stock have been designated as Series A
Participating Preferred Stock, without par value (the "Company Series A
Preferred Stock"). At the close of business on December 31, 2005, (i)
335,456,814 shares of Company Common Stock were issued and outstanding (which
number includes (A) 1,620,416 shares of Company Common Stock held by the
Company in its treasury, (B) 1,276,225 shares of Company Common Stock held by
the trust established under The Guidant Employee Savings and Stock Ownership
Plan and (C) 1,024,479 shares of Company Common Stock subject to vesting and
restrictions on transfer ("Company Restricted Stock")), (ii) 27,018,113 shares
of Company Common Stock were reserved and available for issuance pursuant to
the Company's 1994 Stock Plan, as amended, 1996 Nonemployee Director Stock
Plan, as amended, 1998 Stock Plan, as amended, and 2001 Employee Stock Purchase
Plan (the "ESPP") (such plans, collectively, the "Company Stock Plans"), of
which 23,845,935 shares of Company Common Stock were subject to outstanding
Company Stock Options or agreements to issue Company Stock Options, and (iii)
no shares of Company Preferred Stock (including Company Series A Preferred
Stock) were issued or outstanding or were held by the Company as treasury
shares. Except as set forth above in this Section 3.01(c), at the close of
business on December 31, 2005, no shares of capital stock or other voting
securities or equity interests of the Company were issued, reserved for
issuance or outstanding. At the close of business on December 31, 2005, there
were no outstanding stock appreciation rights, "phantom" stock rights,
restricted stock units, performance units, rights to receive shares of Company
Common Stock on a deferred basis or other rights (other than Company Stock
Options) that are linked to the value of Company Common Stock (collectively,
"Company Stock-Based Awards"). All outstanding options to purchase shares of
Company Common Stock exclusive of rights under the ESPP (collectively, "Company
Stock Options") and shares of Company Restricted Stock are evidenced by stock
option agreements, restricted stock purchase agreements or other award
agreements. All outstanding shares of capital stock of the Company are, and all
shares which may be issued pursuant to the Company Stock Options or Company
Stock-Based Awards will be, when issued in accordance with the terms thereof,
duly authorized, validly issued, fully paid and nonassessable and not subject
to preemptive rights. There are no bonds, debentures, notes or other
indebtedness of the Company having the right to vote (or convertible into, or
exchangeable for, securities having the right to vote) on any matters on which
shareholders of the Company may vote. Except as set forth above in this Section
3.01(c) and for issuances of shares of Company Common Stock pursuant to the
Company Stock Options set forth above in this Section 3.01(c) and subject to
Section 4.01(a), (x) there are not issued, reserved for issuance or outstanding
(A) any shares of capital stock or other voting securities or equity interests
of the Company, (B) any securities of the Company convertible into or
exchangeable or exercisable for shares of capital stock or other voting
securities or equity interests of the Company, (C) any warrants, calls, options
or other rights to acquire from the Company or any of its Subsidiaries, and no
obligation of the Company or any of its Subsidiaries to issue, any capital
stock, voting securities, equity interests or securities convertible into or
exchangeable or exercisable for capital stock or voting securities of the
Company or (D) any Company Stock-Based Awards and (y) there are not any
outstanding obligations of the Company or any of its Subsidiaries to
repurchase, redeem or otherwise acquire any such securities or to issue,
deliver or sell, or cause to be issued, delivered or sold, any such securities.
Neither the Company nor any of its Subsidiaries is a party to any voting
Contract with respect to the voting of any such securities. Except as set forth
above in this Section 3.01(c) and subject to Section 4.01(a), there are no
outstanding (1) securities of the Company or any of its Subsidiaries
convertible into or exchangeable or exercisable for shares of capital stock or
voting securities or equity interests of any Subsidiary of the Company, (2)
warrants, calls, options or other rights to acquire from the Company or any of
its Subsidiaries, and no obligation of the Company or any of its Subsidiaries
to issue, any capital stock, voting securities, equity interests or securities
convertible into or exchangeable or exercisable for capital stock or voting
securities of any Subsidiary of the Company or (3) obligations of the Company
or any of its Subsidiaries to repurchase, redeem or otherwise acquire any such
outstanding securities or to issue, deliver or sell, or cause to be issued,
delivered or sold, any such securities.
(d) Authority; Noncontravention. The Company has all requisite
corporate power and authority to execute and deliver this Agreement and,
subject to receipt of the Company Shareholder Approval, to consummate the
transactions contemplated by this Agreement. The execution and delivery of this
Agreement by the Company and the consummation by the Company of the
transactions contemplated by this Agreement have been duly authorized by all
necessary corporate action on the part of the Company and no other corporate
proceedings on the part of the Company are necessary to authorize this
Agreement or to consummate the transactions contemplated by this Agreement
(other than the obtaining of the Company Shareholder Approval). This Agreement
has been duly executed and delivered by the Company and, assuming the due
authorization, execution and delivery by each of the other parties hereto,
constitutes a legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, moratorium, reorganization or similar Laws
affecting the rights of creditors generally and the availability of equitable
remedies (regardless of whether such enforceability is considered in a
proceeding in equity or at law). The Board of Directors of the Company, at a
meeting duly called and held, duly and unanimously adopted by all directors
present, resolutions (i) adopting this Agreement, the Merger and the other
transactions contemplated by this Agreement, (ii) declaring that it is in the
best interests of the Company and the shareholders of the Company that the
Company enter into this Agreement and consummate the Merger and the other
transactions contemplated by this Agreement on the terms and subject to the
conditions set forth in this Agreement, (iii) directing that the Company use
its reasonable best efforts to submit the approval of this Agreement to a vote
at a meeting of the shareholders of the Company as promptly as practicable, and
(iv) recommending that the shareholders of the Company approve this Agreement,
which resolutions, as of the date of this Agreement, have not been subsequently
rescinded, modified or withdrawn in any way. The execution and delivery of this
Agreement by the Company do not, and the consummation by the Company of the
Merger and the other transactions contemplated by this Agreement and compliance
by the Company with the provisions of this Agreement will not, conflict with,
or result in any violation or breach of, or default (with or without notice or
lapse of time, or both) under, or give rise to a right of, or result in,
termination, cancelation or acceleration of any obligation or to the loss of a
benefit under, or result in the creation of any Lien in or upon any of the
properties or other assets of the Company or any of its Subsidiaries under, (x)
the Company Articles or the Company By-laws or the comparable organizational
documents of any of its Subsidiaries, (y) any loan or credit agreement, bond,
debenture, note, mortgage, indenture, lease, supply agreement, license
agreement, development agreement or other contract, agreement, obligation,
commitment or instrument that is intended by the Company, Parent or any of
their respective Subsidiaries, as applicable, to be legally binding, (each,
including all amendments thereto, a "Contract"), to which the Company or any of
its Subsidiaries is a party or any of their respective properties or other
assets is subject or (z) subject to the obtaining of the Company Shareholder
Approval and the governmental filings and other matters referred to in the
following sentence, any (A) statute, law, ordinance, rule or regulation (each,
a "Law") applicable to the Company or any of its Subsidiaries or their
respective properties or other assets or (B) order, writ, injunction, decree,
judgment or stipulation (each, an "Order") applicable to the Company or any of
its Subsidiaries or their respective properties or other assets, other than, in
the case of clauses (y) and (z), any such conflicts, violations, breaches,
defaults, rights of termination, cancelation or acceleration, losses or Liens
that individually or in the aggregate have not had and would not reasonably be
expected to (x) have a Material Adverse Effect, (y) impair in any material
respect the ability of the Company to perform its obligations under this
Agreement or (z) prevent or materially impede, interfere with, hinder or delay
the consummation of the transactions contemplated by this Agreement. No
consent, approval, order or authorization of, action by or in respect of, or
registration, declaration or filing with, any Federal, state, local or foreign
government, any court, administrative, regulatory or other governmental agency,
commission or authority or any organized securities exchange (each, a
"Governmental Entity") is required by or with respect to the Company or any of
its Subsidiaries in connection with the execution and delivery of this
Agreement by the Company or the consummation of the Merger or the other
transactions contemplated by this Agreement, except for (1) (A) the filing of a
premerger notification and report form by the Company under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended, and the rules
and regulations thereunder (the "HSR Act") and the termination of the waiting
period required thereunder, (B) all required notifications and filings by the
Company under Article 4 of Council Regulation 139/2004 of the European
Community, as amended (the "EC Merger Regulation"), and the receipt of a
decision under Article 6(1)(b), 8(1) or 8(2) thereunder declaring the Merger
compatible with the EC Common Market and (C) the receipt, termination or
expiration, as applicable, of approvals or waiting periods required under any
other applicable competition, merger control, antitrust or similar Law, (2) the
filing with the Securities and Exchange Commission (the "SEC") of (X) the Proxy
Statement and (Y) such reports under the Securities Exchange Act of 1934, as
amended (including the rules and regulations promulgated thereunder, the
"Exchange Act"), as may be required in connection with this Agreement and the
transactions contemplated by this Agreement, (3) the filing of the Articles of
Merger with the Secretary of State of the State of Indiana and appropriate
documents with the relevant authorities of other states in which the Company or
any of its Subsidiaries is qualified to do business, (4) any filings with and
approvals of the NYSE and (5) such other consents, approvals, orders,
authorizations, actions, registrations, declarations and filings the failure of
which to be obtained or made individually or in the aggregate has not had and
would not reasonably be expected to (x) have a Material Adverse Effect, (y)
impair in any material respect the ability of the Company to perform its
obligations under this Agreement or (z) prevent or materially impede, interfere
with, hinder or delay the consummation of the transactions contemplated by this
Agreement.
(e) Company SEC Documents. (i) The Company has filed all reports,
schedules, forms, statements and other documents (including exhibits and other
information incorporated therein) with the SEC required to be filed by the
Company since January 1, 2003 (such documents, together with any documents
filed during such period by the Company to the SEC on a voluntary basis on
Current Reports on Form 8-K, the "Company SEC Documents"). As of their
respective filing dates, the Company SEC Documents complied in all material
respects with, to the extent in effect at the time of filing, the requirements
of the Securities Act of 1933, as amended (including the rules and regulations
promulgated thereunder, the "Securities Act"), the Exchange Act and the
Xxxxxxxx-Xxxxx Act of 2002 (including the rules and regulations promulgated
thereunder, "SOX") applicable to such Company SEC Documents, and none of the
Company SEC Documents contained any untrue statement of a material fact or
omitted to state a 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. Except to the extent that information contained
in any Company SEC Document has been revised, amended, supplemented or
superseded by a later-filed Company SEC Document, none of the Company SEC
Documents contains any untrue statement of a material fact or omits 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, which individually or in the aggregate would require an
amendment, supplement or correction to such Company SEC Documents. Each of the
financial statements (including the related notes) of the Company included in
the Company SEC Documents complied at the time it was filed as to form in all
material respects with the applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto in effect at the time of
such filing, had been prepared in accordance with generally accepted accounting
principles in the United States ("GAAP") (except, in the case of unaudited
statements, as permitted by the rules and regulations of the SEC) applied on a
consistent basis during the periods involved (except as may be indicated in the
notes thereto) and fairly presented in all material respects the consolidated
financial position of the Company and its consolidated Subsidiaries as of the
dates thereof and the consolidated results of their operations and cash flows
for the periods then ended (subject, in the case of unaudited statements, to
normal year-end audit adjustments). Neither the Company nor any of its
Subsidiaries has any liabilities or obligations of any nature (whether accrued,
absolute, contingent or otherwise) which individually or in the aggregate have
had or would reasonably be expected to have a Material Adverse Effect. None of
the Subsidiaries of the Company are, or have at any time since January 1, 2003
been, subject to the reporting requirements of Section 13(a) or 15(d) of the
Exchange Act.
(ii) Each of the principal executive officer of the Company
and the principal financial officer of the Company (or each former principal
executive officer of the Company and each former principal financial officer of
the Company, as applicable) has made all certifications required by Rule 13a-14
or 15d-14 under the Exchange Act and Sections 302 and 906 of SOX with respect
to the Company SEC Documents, and the statements contained in such
certifications are true and accurate. For purposes of this Agreement,
"principal executive officer" and "principal financial officer" shall have the
meanings given to such terms in SOX. Neither the Company nor any of its
Subsidiaries has outstanding, or has arranged any outstanding, "extensions of
credit" to directors or executive officers within the meaning of Section 402 of
SOX.
(iii) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (A) transactions are
executed in accordance with management's general or specific authorizations;
(B) access to assets is permitted only in accordance with management's general
or specific authorization; and (C) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(iv) The Company's "disclosure controls and procedures" (as
defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) are reasonably
designed to ensure that all information (both financial and non-financial)
required to be disclosed by the Company in the reports that it files or submits
under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in the rules and forms of the SEC, and that all such
information is accumulated and communicated to the Company's management as
appropriate to allow timely decisions regarding required disclosure and to make
the certifications of the chief executive officer and chief financial officer
of the Company required under the Exchange Act with respect to such reports.
(f) Information Supplied. None of the information supplied or to be
supplied by or on behalf of the Company specifically for inclusion or
incorporation by reference in (i) the Form S-4 will, at the time the Form S-4
is filed with the SEC and at the time it becomes effective under the Securities
Act, contain any untrue statement of a material fact or omit to state any
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 or (ii) the Proxy Statement will, at the date it is first mailed to
the shareholders of the Company and the stockholders of Parent and at the time
of each of the Shareholders' Meetings, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading, except that no
representation or warranty is made by the Company with respect to statements
made or incorporated by reference therein based on information supplied by or
on behalf of Parent or Sub specifically for inclusion or incorporation by
reference in the Form S-4 or the Proxy Statement. The Proxy Statement will
comply as to form in all material respects with the requirements of the
Exchange Act.
(g) Absence of Certain Changes or Events. Except for liabilities
incurred in connection with this Agreement or as expressly permitted pursuant
to Section 4.01(a)(i) through (xiv), since the date of the most recent
financial statements included in the Filed Company SEC Documents, the Company
and its Subsidiaries have conducted their respective businesses only in the
ordinary course consistent with past practice, and there has not been any
Material Adverse Change, and from such date until the date hereof there has not
been (i) any declaration, setting aside or payment of any dividend or other
distribution (whether in cash, stock or property) with respect to any capital
stock of the Company or any of its Subsidiaries, other than (x) cash dividends
payable by the Company in respect of shares of Company Common Stock consistent
with past practice and not exceeding $0.10 per share of Company Common Stock
per fiscal quarter or (y) dividends or distributions by a direct or indirect
wholly owned Subsidiary of the Company to its shareholders, (ii) any purchase,
redemption or other acquisition by the Company or any of its Subsidiaries of
any shares of capital stock or any other securities of the Company or any of
its Subsidiaries or any options, warrants, calls or rights to acquire such
shares or other securities, other than in connection with net share withholding
in connection with the vesting of Company Restricted Stock, (iii) any split,
combination or reclassification of any capital stock of the Company or any of
its Subsidiaries or any issuance or the authorization of any issuance of any
other securities in respect of, in lieu of or in substitution for shares of
their respective capital stock, (iv) (A) any granting by the Company or any of
its Subsidiaries to any current or former (1) director of the Company or any of
its Subsidiaries or (2) employee of the Company or any of its Subsidiaries who
is treated as a Tier I Employee (a "Tier I Employee") or Tier II Employee (a
"Tier II Employee") for purposes of the Company's Change in Control Severance
Pay Plan for Select Employees (all individuals described in the foregoing
clauses (1) and (2) of this clause (A), collectively, the "Key Personnel") of
any increase in compensation, bonus or fringe or other benefits, except for
normal increases in cash compensation (including cash bonuses) in the ordinary
course of business consistent with past practice or as was required under any
Company Benefit Agreement or Company Benefit Plan, (B) any granting by the
Company or any of its Subsidiaries to any Key Personnel of (1) any increase in
severance or termination pay or (2) any right to receive any severance or
termination pay except for severance or termination pay received in the
ordinary course of business consistent with past practice or as was required
under any Company Benefit Agreement or Company Benefit Plan, (C) any entry by
the Company or any of its Subsidiaries into, or any amendments of, (1) any
employment, deferred compensation, consulting, severance, change of control,
termination or indemnification Contract with any Key Personnel or (2) any
Contract with any Key Personnel the benefits of which are contingent, or the
terms of which are materially altered, upon the occurrence of a transaction
involving the Company of a nature contemplated by this Agreement (all such
Contracts under this clause (C), collectively, "Company Benefit Agreements"),
(D) the removal or modification of any restrictions in any Company Benefit
Agreement or Company Benefit Plan or awards made thereunder, except as required
to comply with applicable Law or any Company Benefit Agreement or Company
Benefit Plan in effect as of the date hereof or (E) the adoption, amendment or
termination of any Company Benefit Plan, other than, in the cases of clauses
(A), (B), (C) and (D), such increases, amendments, new agreements, removals,
modifications or terminations with respect to Tier II Employees that (1) do not
provide for any increase in compensation or benefits for any individual Tier II
Employee that is material in relation to such Tier II Employee's compensation
or benefits prior to such increase and (2) in the aggregate do not result in
any material increase in compensation, benefits or other similar expenses of
the Company and its Subsidiaries, (v) any damage, destruction or loss, whether
or not covered by insurance, that individually or in the aggregate has had or
would reasonably be expected to have a Material Adverse Effect, (vi) any change
in accounting methods, principles or practices by the Company materially
affecting its assets, liabilities or businesses, except insofar as may have
been required by a change in GAAP or (vii) any material tax election or any
settlement or compromise of any material income tax liability.
(h) Litigation. Except with respect to taxes, which are the subject of
Section 3.01(n), there is no suit, action or proceeding pending or, to the
Knowledge of the Company, threatened against or affecting the Company or any of
its Subsidiaries or any of their respective assets that individually or in the
aggregate has had or would reasonably be expected to have a Material Adverse
Effect, nor is there any demand, letter or Order of any Governmental Entity or
arbitrator outstanding against, or, to the Knowledge of the Company,
investigation by any Governmental Entity involving, the Company or any of its
Subsidiaries or any of their respective assets that individually or in the
aggregate has had or would reasonably be expected to have a Material Adverse
Effect.
(i) Contracts. (1) As of the date hereof, neither the Company nor any
of its Subsidiaries is a party to, and none of their respective properties or
other assets is subject to, any Contract that is a "material contract" (as such
term is defined in Item 601(b)(10) of Regulation S-K of the SEC) (a "Material
Contract"). None of the Company, any of its Subsidiaries or, to the Knowledge
of the Company, any other party thereto is in violation of or in default under
(nor does there exist any condition which upon the passage of time or the
giving of notice or both would cause such a violation of or default by the
Company or any of its Subsidiaries or, to the Knowledge of the Company, any
other party thereto under) any Contract to which it is a party or by which it
or any of its properties or other assets is bound, except for violations or
defaults that individually or in the aggregate have not had and would not
reasonably be expected to have a Material Adverse Effect. Neither the Company
nor any of its Subsidiaries has entered into any Contract that is currently in
effect that is required to be disclosed pursuant to Item 404 of Regulation S-K
of the SEC.
(2) Section 3.01(i)(2) of the Company Disclosure Schedule
contains a complete and accurate list, as of the date hereof, of (A) each
material Contract restricting or purporting to restrict any of the Company's
Affiliates' ability to compete (other than each such Contract that only
restricts the Company's Subsidiaries' ability to compete) in any line of
business, geographic area or customer segment, (B) each material Contract
restricting the Company's or any of its Subsidiaries' ability to compete in any
line of business, geographic area or customer segment and (C) each material
Contract relating to distribution, sale, supply, licensing, co-promotion or
manufacturing of any products or services of the Company or any of its
Subsidiaries or any products licensed by the Company or any of its
Subsidiaries.
(j) Compliance with Laws; Environmental Matters. (i) Except with
respect to Environmental Laws, the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), taxes and regulatory compliance, which are the
subjects of Sections 3.01(j)(ii), 3.01(l), 3.01(n) and 3.01(u), respectively,
each of the Company and its Subsidiaries is in compliance with all Laws and
Orders (collectively, "Legal Provisions") applicable to it, its properties or
other assets or its business or operations, except for failures to be in
compliance that individually or in the aggregate have not had and would not
reasonably be expected to have a Material Adverse Effect. Each of the Company
and its Subsidiaries has in effect all approvals, authorizations, certificates,
filings, franchises, licenses, notices and permits of or with all Governmental
Entities (collectively, "Permits"), including all Permits under the Federal
Food, Drug and Cosmetic Act of 1938, as amended (including the rules and
regulations promulgated thereunder, the "FDCA"), necessary for it to own, lease
or operate its properties and other assets and to carry on its business and
operations as currently conducted, except where the failure to have such
Permits individually or in the aggregate has not had and would not reasonably
be expected to have a Material Adverse Effect. Since January 1, 2000, there has
occurred no default under, or violation of, any such Permit, except for any
such default or violation that individually or in the aggregate has not had and
would not reasonably be expected to have a Material Adverse Effect. The
consummation of the Merger, in and of itself, would not cause the revocation or
cancelation of any such Permit that individually or in the aggregate would
reasonably be expected to have a Material Adverse Effect.
(ii) Except for those matters that individually or in the
aggregate have not had and would not reasonably be expected to have a Material
Adverse Effect: (A) during the period of ownership or operation by the Company
or any of its Subsidiaries of any of its currently or formerly owned, leased or
operated properties, there have been no Releases of Hazardous Materials in, on,
under or affecting any properties which would subject the Company or any of its
Subsidiaries to any liability under any Environmental Law or require any
expenditure by the Company or any of its Subsidiaries for remediation to meet
applicable standards thereunder; (B) prior to and after, as applicable, the
period of ownership or operation by the Company or any of its Subsidiaries of
any of its currently or formerly owned, leased or operated properties, to the
Knowledge of the Company, there were no Releases of Hazardous Materials in, on,
under or affecting any properties which would subject the Company or any of its
Subsidiaries to any liability under any Environmental Law or require any
expenditure by the Company or any of its Subsidiaries for remediation to meet
applicable standards thereunder; (C) neither the Company nor any of its
Subsidiaries is subject to any indemnity obligation or other Contract with any
person relating to obligations or liabilities under Environmental Laws; and (D)
to the Knowledge of the Company, there are no facts, circumstances or
conditions that would reasonably be expected to form the basis for any
investigation, suit, claim, action, proceeding or liability against or
affecting the Company or any of its Subsidiaries relating to or arising under
Environmental Laws. The term "Environmental Laws" means all applicable Federal,
state, local and foreign Laws (including the common law), Orders, notices,
Permits or binding Contracts issued, promulgated or entered into by any
Governmental Entity, relating in any way to the environment, preservation or
reclamation of natural resources or the presence, management, Release of, or
exposure to, Hazardous Materials, or to human health and safety. The term
"Hazardous Materials" means (1) petroleum products and by-products, asbestos
and asbestos-containing materials, urea formaldehyde foam insulation, medical
or infectious wastes, polychlorinated biphenyls, radon gas, radioactive
substances, chlorofluorocarbons and all other ozone-depleting substances and
(2) any other chemical, material, substance, waste, pollutant or contaminant
that is prohibited, limited or regulated by or pursuant to any Environmental
Law. The term "Release" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping,
disposing or migrating into or through the environment or any natural or
man-made structure.
(k) Labor Relations. From the date of the most recent financial
statements included in the Filed Company SEC Documents through the date hereof,
there has not been any adoption, material amendment or termination by the
Company or any of its Subsidiaries of any collective bargaining or other labor
union Contract to which the Company or any of its Subsidiaries is a party or by
which the Company or any of its Subsidiaries is bound. There are no collective
bargaining or other labor union Contracts to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound. As of the date of this Agreement, none of the employees of the Company
or any of its Subsidiaries are represented by any union with respect to their
employment by the Company or such Subsidiary. Since January 1, 2003, neither
the Company nor any of its Subsidiaries has experienced any material labor
disputes, union organization attempts or work stoppages, slowdowns or lockouts
due to labor disagreements.
(l) ERISA Compliance. (i) Section 3.01(l)(i) of the Company Disclosure
Schedule contains a complete and accurate list, as of the date hereof, of each
employment, bonus, pension, profit sharing, deferred compensation, incentive
compensation, stock ownership, stock purchase, stock appreciation, restricted
stock, stock option, "phantom" stock, performance, retirement, thrift, savings,
stock bonus, paid time off, perquisite, fringe benefit, vacation, severance,
disability, death benefit, hospitalization, medical, welfare benefit or other
plan, program, policy or Contract maintained, contributed to or required to be
maintained or contributed to by the Company or any of its Subsidiaries or any
other person or entity that, together with the Company, is treated as a single
employer under Section 414(b), (c), (m) or (o) of the Code (each, a "Commonly
Controlled Entity") (exclusive of any such plan, program, policy or Contract
mandated by and maintained solely pursuant to applicable law), in each case
providing benefits to any current or former director, officer or employee of
the Company or any of its Subsidiaries (collectively, but exclusive of
individual option and restricted award agreements issued under the Company
Stock Plans, the "Company Benefit Plans") and each Company Benefit Agreement
(exclusive of local offer letters mandated under applicable non-U.S. law that
do not impose any severance obligations other than any mandatory statutory
severance). Each Company Benefit Plan that is an "employee pension benefit
plan" (as defined in Section 3(2) of ERISA) is sometimes referred to herein as
a "Company Pension Plan" and each Company Benefit Plan that is an "employee
welfare benefit plan" (as defined in Section 3(1) of ERISA) is sometimes
referred to herein as a "Company Welfare Plan".
(ii) The Company has provided to Parent complete and accurate
copies of (A) each Company Benefit Plan or, at the Company's option, in the
case of Company Benefit Plans maintained primarily for the benefit of
individuals regularly employed outside the United States, a summary thereof
(or, in either case, with respect to any unwritten Company Benefit Plans,
descriptions thereof) and Company Benefit Agreements (exclusive of local offer
letters mandated under applicable non-U.S. law that do not impose any severance
obligations other than any mandatory statutory severance), (B) the two most
recent annual reports on Form 5500 required to be filed with the Internal
Revenue Service (the "IRS") with respect to each Company Benefit Plan (if any
such report was required), (C) the most recent summary plan description for
each Company Benefit Plan for which such summary plan description is required
and (D) each trust Contract and insurance or group annuity Contract relating to
any Company Benefit Plan.
(iii) Each Company Benefit Plan has been administered in all
material respects in accordance with its terms. The Company, its Subsidiaries
and all the Company Benefit Plans are all in compliance in all material
respects with the applicable provisions of ERISA, the Code and all other
applicable Laws, including Laws of foreign jurisdictions, and the terms of all
collective bargaining Contracts.
(iv) All Company Pension Plans intended to be tax-qualified
have received favorable determination letters from the IRS with respect to
"TRA" (as defined in Section 1 of IRS Rev. Proc. 93-39), and have timely filed
with the IRS determination letter applications (or have received such a
determination letter) with respect to "GUST" (as defined in Section 1 of IRS
Notice 2001-42), to the effect that such Company Pension Plans are qualified
and exempt from Federal income taxes under Sections 401(a) and 501(a),
respectively, of the Code, no such determination letter has been revoked (nor,
to the Knowledge of the Company, has revocation been threatened) and to the
Knowledge of the Company, no event has occurred since the date of the most
recent determination letter or application therefor relating to any such
Company Pension Plan that would reasonably be expected to adversely affect the
qualification of such Company Pension Plan or materially increase the costs
relating thereto or require security under Section 307 of ERISA. The Company
has provided to Parent a complete and accurate copy of the most recent
determination letter received prior to the date hereof with respect to each
Company Pension Plan, as well as a complete and accurate copy of each pending
application for a determination letter, if any. The Company has also provided
to Parent a complete and accurate list of all amendments to any Company Pension
Plan as to which a favorable determination letter has not yet been received.
(v) Neither the Company nor any Commonly Controlled Entity
has, during the six-year period ending on the date hereof, maintained,
contributed to or been required to contribute to any Company Pension Plan that
is subject to Title IV of ERISA or Section 412 of the Code, or any
"multiemployer plan" as defined in Section 3(37) or 4001(a)(3) of ERISA. Except
as has not had and would not reasonably be expected to have a Material Adverse
Effect, neither the Company nor any Commonly Controlled Entity has any
unsatisfied liability under Title IV of ERISA. To the Knowledge of the Company,
no condition exists that presents a material risk to the Company or any
Commonly Controlled Entity of incurring a material liability under Title IV of
ERISA. The Pension Benefit Guaranty Corporation has not instituted proceedings
under Section 4042 of ERISA to terminate any Company Benefit Plan and, to the
Knowledge of the Company, no condition exists that presents a material risk
that such proceedings will be instituted.
(vi) Except as has not had and would not reasonably be
expected to have a Material Adverse Effect, (A) all reports, returns and
similar documents with respect to all Company Benefit Plans required to be
filed with any Governmental Entity or distributed to any Company Benefit Plan
participant have been duly and timely filed or distributed, (B) none of the
Company or any of its Subsidiaries has received notice of, and to the Knowledge
of the Company, there are no investigations by any Governmental Entity with
respect to, termination proceedings or other claims (except claims for benefits
payable in the normal operation of the Company Benefit Plans), suits or
proceedings against or involving any Company Benefit Plan or asserting any
rights or claims to benefits under any Company Benefit Plan that could
reasonably be expected to give rise to any material liability and (C) to the
Knowledge of the Company, there are not any facts that could give rise to any
liability in the event of any such investigation, claim, suit or proceeding.
(vii) Except as has not had and would not reasonably be
expected to have a Material Adverse Effect, (A) all contributions, premiums and
benefit payments under or in connection with the Company Benefit Plans that are
required to have been made as of the date hereof in accordance with the terms
of the Company Benefit Plans have been timely made or have been reflected on
the most recent consolidated balance sheet filed or incorporated by reference
into the Filed Company SEC Documents and (B) no Company Pension Plan has an
"accumulated funding deficiency" (as such term is defined in Section 302 of
ERISA or Section 412 of the Code), whether or not waived.
(viii) With respect to each Company Benefit Plan, except as
has not had and would not reasonably be expected to have a Material Adverse
Effect, (A) there has not occurred any prohibited transaction (within the
meaning of Section 406 of ERISA or Section 4975 of the Code) in which the
Company or any of its Subsidiaries or any of their respective employees, or, to
the Knowledge of the Company, any trustee, administrator or other fiduciary of
such Company Benefit Plan, or any agent of the foregoing, has engaged that
could reasonably be expected to subject the Company or any of its Subsidiaries
or any of their respective employees, or any such trustee, administrator or
other fiduciary, to the tax or penalty on prohibited transactions imposed by
Section 4975 of the Code or the sanctions imposed under Title I of ERISA and
(B) neither the Company, any of its Subsidiaries or any of their respective
employees nor, to the Knowledge of the Company, any trustee, administrator or
other fiduciary of any Company Benefit Plan nor any agent of any of the
foregoing, has engaged in any transaction or acted in a manner, or failed to
act in a manner, that could reasonably be expected to subject the Company or
any of its Subsidiaries or any of their respective employees or, to the
Knowledge of the Company, any such trustee, administrator or other fiduciary,
to any liability for breach of fiduciary duty under ERISA or any other
applicable Law.
(ix) Each Company Welfare Plan may be amended or terminated
(including with respect to benefits provided to retirees and other former
employees) without material liability to the Company or any of its Subsidiaries
at any time after the Effective Time. Each of the Company and its Subsidiaries
complies in all material respects with the applicable requirements of Section
4980B(f) of the Code, Sections 601-609 of ERISA or any similar state or local
Law with respect to each Company Benefit Plan that is a group health plan, as
such term is defined in Section 5000(b)(1) of the Code or such state Law.
Neither the Company nor any of its Subsidiaries has any material obligations
for health or life insurance benefits following termination of employment under
any Company Benefit Plan (other than for continuation coverage required under
Section 4980(B)(f) of the Code).
(x) None of the execution and delivery of this Agreement, the
obtaining of the Company Shareholder Approval or the consummation of the Merger
or any other transaction contemplated by this Agreement (alone or in
conjunction with any other event, including as a result of any termination of
employment on or following the Effective Time) will (A) entitle any current or
former director, officer, employee or consultant of the Company or any of its
Subsidiaries to severance or termination pay, (B) accelerate the time of
payment or vesting, or trigger any payment or funding (through a grantor trust
or otherwise) of, compensation or benefits under, increase the amount payable
or trigger any other material obligation pursuant to, any Company Benefit Plan
or Company Benefit Agreement or (C) result in any breach or violation of, or a
default under, any Company Benefit Plan or Company Benefit Agreement.
(xi) Neither the Company nor any of its Subsidiaries has any
material liability or obligations, including under or on account of a Company
Benefit Plan, arising out of the hiring of persons to provide services to the
Company or any of its Subsidiaries and treating such persons as consultants or
independent contractors and not as employees of the Company or any of its
Subsidiaries. No current or former independent contractor that provides or
provided personal services to the Company or its Subsidiaries (other than a
current or former director) is entitled to any material fringe or other
benefits (other than cash consulting fees) pursuant to any plan, program,
policy or Contract to which the Company or any of its Subsidiaries is a party
or which is maintained, sponsored or contributed to by the Company or any of
its Subsidiaries.
(xii) No material deduction by the Company or any of its
Subsidiaries in respect of any "applicable employee remuneration" (within the
meaning of Section 162(m) of the Code) has been disallowed or is subject to
disallowance by reason of Section 162(m) of the Code. For each of the Key
Personnel, the Company has previously provided to Parent (A) accurate Form W-2
information for the 1999, 2000, 2001, 2002 and 2003 calendar years, (B) annual
base salary as of the date hereof, actual bonus earned for the 2003 calendar
year and target annual bonus for the 2004 calendar year and (C) a list, as of
the date hereof, of all outstanding Company Stock Options, Company Restricted
Stock and Company Stock-Based Awards granted under the Company Stock Plans or
otherwise (other than rights under the ESPP), together with (as applicable) the
number of shares of Company Common Stock subject thereto, and the grant dates,
expiration dates, exercise or base prices and vesting schedules thereof, (D)
estimated current annual cost of welfare benefits and (E) estimated cost of the
pension benefit enhancement under Section 8 of the Company's Change in Control
Severance Plan for Select Employees.
(m) No Parachute Gross Up. Except as provided in accordance with the
Company's Change in Control Severance Pay Plan for Select Employees, no current
or former employee or director of the Company or any of its Subsidiaries is
entitled to receive any additional payment from the Company or any of its
Subsidiaries or the Surviving Corporation by reason of the excise tax required
by Section 4999(a) of the Code being imposed on such person by reason of the
transactions contemplated by this Agreement.
(n) Taxes. Except as has not had and would not reasonably be expected
to have a Material Adverse Effect:
(i) All tax returns required by applicable Law to have been
filed with any taxing authority by, or on behalf of, the Company or any of its
Subsidiaries have been filed in a timely manner (taking into account any valid
extension) in accordance with all applicable Laws, and all such tax returns are
true and complete in all material respects.
(ii) The Company and each of its Subsidiaries has paid (or
has had paid on its behalf) all taxes due and owing, and the Company's most
recent financial statements included in the Filed Company SEC Documents reflect
an adequate accrual for all taxes payable by Company and its Subsidiaries for
all taxable periods and portions thereof accrued through the date of such
financial statements.
(iii) There are no Liens or encumbrances for taxes on any of
the assets of the Company or any of its Subsidiaries other than for taxes not
yet due and payable.
(iv) The Company and its Subsidiaries have complied with all
applicable Laws relating to the payment and withholding of taxes.
(v) No written notification has been received by the Company
or any of its Subsidiaries that any federal, state, local or foreign audit,
examination or similar proceeding is pending, proposed or asserted with regard
to any taxes or tax returns of the Company or its Subsidiaries.
(vi) There is no currently effective Contract extending, or
having the effect of extending, the period of assessment or collection of any
federal, state and, to the Knowledge of the Company, foreign taxes with respect
to the Company or any of its Subsidiaries nor has any request been made for any
such extension.
(vii) No written notice of a claim of pending investigation
has been received from any state, local or other jurisdiction with which the
Company or any of its Subsidiaries currently does not file tax returns,
alleging that the Company or any of its Subsidiaries has a duty to file tax
returns and pay taxes or is otherwise subject to the taxing authority of such
jurisdiction.
(viii) Neither the Company nor any of its Subsidiaries joins
or has joined, for any taxable period during the eight years prior to the date
of this Agreement, in the filing of any affiliated, aggregate, consolidated,
combined or unitary federal, state, local and, to the Knowledge of the Company,
foreign tax return other than consolidated tax returns for the consolidated
group of which the Company is the common parent.
(ix) Neither the Company nor any of its Subsidiaries is a
party to or bound by any tax sharing agreement or tax indemnity agreement,
arrangement or practice (including any advance pricing agreement, closing
agreement or other agreement relating to taxes with any taxing authority).
(x) Neither the Company nor any of its Subsidiaries has
constituted either a "distributing corporation" or a "controlled corporation"
in a distribution of stock qualifying for tax-free treatment under Section 355
of the Code in the two years prior to the date of this Agreement.
(xi) Neither the Company nor any of its Subsidiaries will be
required to include in a taxable period ending after the Effective Time taxable
income attributable to income that accrued in a prior taxable period (or
portion of a taxable period) but was not recognized for tax purposes in any
prior taxable period as a result of (A) an open transaction disposition made on
or before the Effective Time, (B) a prepaid amount received on or prior to the
Effective Time, (C) the installment method of accounting, (D) the long-term
contract method of accounting, (E) the cash method of accounting or Section 481
of the Code or (F) any comparable provisions of state or local tax Law,
domestic or foreign, or for any other reason, other than any amounts that are
specifically reflected in a reserve for taxes on the most recent financial
statements of the Company included in the Filed Company SEC Documents.
(xii) Neither the Company nor any of its Subsidiaries has
entered into a "listed transaction" within the meaning of Treasury Regulation
ss. 1.6011-4(b)(2).
(xiii) As used in this Agreement (A) "tax" means (i) any tax,
duty, governmental fee or other like assessment or charge of any kind
whatsoever (including withholding on amounts paid to or by any person and
liabilities with respect to unclaimed funds), together with any related
interest, penalty, addition to tax or additional amount, and any liability for
any of the foregoing as transferee, (ii) in the case of the Company or any of
its Subsidiaries, liability for the payment of any amount of the type described
in clause (i) as a result of being or having been before the Effective Time a
member of an affiliated, consolidated, combined or unitary group, or a party to
any Contract as a result of which liability of the Company or any of its
Subsidiaries is determined or taken into account with reference to the
activities of any other person, (iii) in the case of the Company or any of its
Subsidiaries, liability of the Company or any of its Subsidiaries for the
payment of any amount as a result of being party to any tax sharing Contract or
with respect to the payment of any amount imposed on any person of the type
described in (i) or (ii) as a result of any existing Contract (including an
indemnification Contract), (iv) in the case of Parent or any of its
Subsidiaries, liability for the payment of any amount of the type described in
clause (i) as a result of being or having been before the Effective Time a
member of an affiliated, consolidated, combined or unitary group, or a party to
any Contract as a result of which liability of Parent or any of its
Subsidiaries is determined or taken into account with reference to the
activities of any other person and (v) in the case of Parent or any of its
Subsidiaries, liability of Parent or any of its Subsidiaries for the payment of
any amount as a result of being party to any tax sharing Contract or with
respect to the payment of any amount imposed on any person of the type
described in (i) or (iv) as a result of any existing Contract (including an
indemnification Contract); (B) "taxing authority" means any Federal, state,
local or foreign government, any subdivision, agency, commission or authority
thereof, or any quasi-governmental body exercising tax regulatory authority;
and (C) "tax return" means any report, return, document, declaration or other
information or filing required to be filed with respect to taxes (whether or
not a payment is required to be made with respect to such filing), including
information returns, any documents with respect to or accompanying payments of
estimated taxes, or with respect to or accompanying requests for the extension
of time in which to file any such report, return, document, declaration or
other information.
(o) Title to Properties. Each of the Company and its Subsidiaries has
valid title to, or valid leasehold or sublease interests or other comparable
contract rights in or relating to all of its real properties and other tangible
assets necessary for the conduct of its business as currently conducted, except
as have been disposed of in the ordinary course of business and except for
defects in title, easements, restrictive covenants and similar encumbrances
that individually or in the aggregate have not had and would not reasonably be
expected to have a Material Adverse Effect. Each of the Company and its
Subsidiaries has complied with the terms of all leases or subleases to which it
is a party and under which it is in occupancy, and all leases to which the
Company is a party and under which it is in occupancy are in full force and
effect, except for such failure to comply or be in full force and effect that
individually or in the aggregate has not had and would not reasonably be
expected to have a Material Adverse Effect. Neither the Company nor any of its
Subsidiaries has received any written notice of any event or occurrence that
has resulted or could result (with or without the giving of notice, the lapse
of time or both) in a default with respect to any lease or sublease to which it
is a party, which defaults individually or in the aggregate have had or would
reasonably be expected to have a Material Adverse Effect.
(p) Intellectual Property. (i) Section 3.01(p)(i) of the Company
Disclosure Schedule sets forth, as of the date hereof, a complete and accurate
list (in all material respects) of all patents and applications therefor,
registered trademarks and applications therefor, domain name registrations and
copyright registrations (if any) that, in each case, are owned by or licensed
to the Company or any of its Subsidiaries and are material to the conduct of
the business of the Company and its Subsidiaries, taken as a whole, as
currently conducted. Such intellectual property rights required to be listed in
Section 3.01(p)(i) of the Company Disclosure Schedule, together with any
tradename rights, trade secret or know how rights, service xxxx rights,
trademark rights, patent rights, intellectual property rights in computer
programs or software or other type of intellectual property rights, in each
case, that are owned or licensed by the Company or any of its Subsidiaries and
are material to the conduct of the business of the Company and its
Subsidiaries, taken as a whole, as currently conducted, are collectively
referred to herein as "Intellectual Property Rights". All Intellectual Property
Rights are either (x) owned by the Company or a Subsidiary of the Company free
and clear of all Liens or (y) licensed to the Company or a Subsidiary of the
Company free and clear (to the Knowledge of the Company) of all Liens, except
where the failure to so own or license such Intellectual Property Rights
individually or in the aggregate has not had and would not reasonably be
expected to have a Material Adverse Effect. There are no claims pending or, to
the Knowledge of the Company, threatened with regard to the ownership or, to
the Knowledge of the Company, licensing by the Company or any of its
Subsidiaries of any Intellectual Property Rights which individually or in the
aggregate has had or would reasonably be expected to have a Material Adverse
Effect. Each of the Company and its Subsidiaries owns, is validly licensed or
otherwise has the right to use all Intellectual Property Rights, except where
the failure to own, have a valid license or otherwise have rights to use
individually or in the aggregate has not had and would not reasonably be
expected to have a Material Adverse Effect. The execution and delivery of this
Agreement by the Company do not, and the consummation by the Company of the
Merger and the other transactions contemplated by this Agreement and compliance
by the Company with the provisions of this Agreement will not, conflict with,
or result in any violation or breach of, or default (with or without notice or
lapse of time, or both) under, or give rise to a right of, or result in,
termination, cancelation or acceleration of any obligation or to the loss of a
benefit under, or result in the creation of any Lien in or upon, any
Intellectual Property Right, in each case that individually or in the aggregate
has had or would reasonably be expected to have a Material Adverse Effect.
Section 3.01(p)(i) of the Company Disclosure Schedule sets forth, as of the
date hereof, all Contracts under which the Company or any of its Subsidiaries
is obligated to make payments to third parties for use of any Intellectual
Property Rights with respect to the commercialization of any products that are,
as of the date hereof, being sold, manufactured by or under development by the
Company or any of its Subsidiaries and for which such payments are in excess of
$2,000,000 per year for any single product. The aggregate amount of all such
payments that the Company and its Subsidiaries are obligated to make under any
Contract of the type described in the immediately preceding sentence that are
not required to be disclosed pursuant to such sentence does not exceed
$10,000,000 per year.
(ii) There are no pending or, to the Knowledge of the
Company, threatened claims that the Company or any of its Subsidiaries has
infringed or is infringing (including with respect to the manufacture, use or
sale by the Company or any of its Subsidiaries of any products or to the
operations of the Company and its Subsidiaries) any intellectual property
rights of any person which individually or in the aggregate has had or would
reasonably be expected to have a Material Adverse Effect. To the Knowledge of
the Company, as of the date of this Agreement, there are no facts,
circumstances or conditions that would reasonably be expected to form the basis
for any claim by a person to exclude or prevent the Company or any of its
Subsidiaries from freely using its Intellectual Property Rights and that
individually or in the aggregate would reasonably be expected to have a
Material Adverse Effect.
(iii) All patents required to be listed in Section 3.01(p)(i)
of the Company Disclosure Schedule that are owned by the Company or any of its
Subsidiaries have been duly registered and/or filed with or issued by each
appropriate Governmental Entity, all necessary affidavits of continuing use
have been timely filed, and all necessary maintenance fees have been timely
paid to continue all such rights in effect, other than failures to be duly
registered, filed, issued or paid which individually or in the aggregate have
not had and would not reasonably be expected to have a Material Adverse Effect.
None of the patents required to be listed in Section 3.01(p)(i) of the Company
Disclosure Schedule that are owned by the Company or any of its Subsidiaries
has expired or been declared invalid, in whole or in part, by any Governmental
Entity, other than such expirations or declarations of invalidity which
individually or in the aggregate have not had and would not reasonably be
expected to have a Material Adverse Effect. There are no ongoing interferences,
oppositions, reissues, reexaminations or other proceedings challenging any of
the patents or patent applications required to be listed in Section 3.01(p)(i)
of the Company Disclosure Schedule and owned by the Company or any of its
Subsidiaries (or, to the Company's Knowledge, challenging any such patents or
patent applications licensed to the Company or any of its Subsidiaries),
including ex parte and post-grant proceedings, in the United States Patent and
Trademark Office or in any foreign patent office or similar administrative
agency, other than such interferences, oppositions, reissues, reexaminations or
proceedings that individually or in the aggregate have not had and would not
reasonably be expected to have a Material Adverse Effect.
(iv) Except as has not had and would not reasonably be
expected to have a Material Adverse Effect, the Company and its Subsidiaries
have used commercially reasonable efforts to maintain their material trade
secrets in confidence.
(q) Voting Requirements. The affirmative vote of holders of a majority
of the outstanding shares of Company Common Stock at the Company Shareholders'
Meeting or any adjournment or postponement thereof to approve this Agreement
(the "Company Shareholder Approval") is the only vote of the holders of any
class or series of capital stock of the Company necessary to approve this
Agreement and the transactions contemplated by this Agreement.
(r) State Takeover Laws; Company Articles Provisions. The Board of
Directors of the Company has unanimously adopted, by all directors present,
this Agreement, the terms of this Agreement and the consummation of the Merger
and the other transactions contemplated by this Agreement, and such adoption
represents all the actions necessary to render inapplicable to this Agreement,
the Merger and the other transactions contemplated by this Agreement, the
restrictions (i) on "business combinations" (as defined in Section 23-1-43-5 of
the IBCL) set forth in Section 23-1-43-18 of the IBCL and (ii) on the actions
or transactions set forth in Paragraph 6 of the Company Articles ("Paragraph
6"), in each case to the extent, if any, such restrictions would otherwise be
applicable to this Agreement, the Merger and the other transactions
contemplated by this Agreement. For purposes of Paragraph 6, the approval of
the Board of Directors of the Company referred to in the immediately preceding
sentence constitutes the approval of the Merger and the other transactions
contemplated by this Agreement by the "Continuing Directors" (as defined in
Paragraph 6) pursuant to clause (c) of Paragraph 6. No other similar provision
of the Company Articles or the Company By-laws or, to the Knowledge of the
Company, other state takeover Law or similar Law applies or purports to apply
to this Agreement, the Merger or the other transactions contemplated by this
Agreement.
(s) Brokers and Other Advisors. No broker, investment banker,
financial advisor or other person (other than X.X. Xxxxxx Securities Inc. and
Xxxxxx Xxxxxxx & Co. Incorporated), the fees and expenses of which will be paid
by the Company, is entitled to any broker's, finder's, financial advisor's or
other similar fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
the Company. The Company has delivered to Parent complete and accurate copies
of all Contracts under which any such fees or expenses are payable and all
indemnification and other Contracts related to the engagement of the persons to
whom such fees are payable.
(t) Opinion of Financial Advisors. The Company has received the
opinions of each of X.X. Xxxxxx Securities Inc. and Xxxxxx Xxxxxxx & Co.
Incorporated, in each case dated as of the date of this Agreement, to the
effect that, as of such date, the Merger Consideration is fair, from a
financial point of view, to the holders of shares of Company Common Stock, a
signed copy of which opinion has been, or will promptly be, delivered to
Parent.
(u) Regulatory Compliance. (i) As to each product subject to the FDCA
or similar Legal Provisions in any foreign jurisdiction that are developed,
manufactured, tested, distributed and/or marketed by the Company or any of its
Subsidiaries (a "Medical Device"), each such Medical Device is being developed,
manufactured, tested, distributed and/or marketed in compliance with all
applicable requirements under the FDCA and similar Legal Provisions, including
those relating to investigational use, premarket clearance or marketing
approval to market a Medical Device, good manufacturing practices, labeling,
advertising, record keeping, filing of reports and security, and in compliance
with the Advanced Medical Technology Association Code of Ethics on Interactions
with Healthcare Professionals and the American Medical Association's guidelines
on gifts to physicians, except for failures in compliance that individually or
in the aggregate have not had and would not reasonably be expected to have a
Material Adverse Effect. Neither the Company nor any of its Subsidiaries has
received any notice or other communication from the Federal Food and Drug
Administration (the "FDA") or any other Governmental Entity (A) contesting the
premarket clearance or approval of, the uses of or the labeling and promotion
of any products of the Company or any of its Subsidiaries or (B) otherwise
alleging any violation applicable to any Medical Device of any Legal Provision,
in the case of (A) and (B), that individually or in the aggregate have had or
would reasonably be expected to have a Material Adverse Effect.
(ii) No Medical Device is under consideration by senior
management of the Company or any of its Subsidiaries for recall, withdrawal,
suspension, seizure or discontinuance, or has been recalled, withdrawn,
suspended, seized or discontinued (other than for commercial or other business
reasons) by, the Company or any of its Subsidiaries in the United States or
outside the United States (whether voluntarily or otherwise), in each case
since January 1, 2002. No proceedings in the United States or outside of the
United States of which the Company has Knowledge (whether completed or pending)
seeking the recall, withdrawal, suspension, seizure or discontinuance of any
Medical Device are pending against the Company or any of its Subsidiaries or
any licensee of any Medical Device which individually or in the aggregate have
had or would reasonably be expected to have a Material Adverse Effect.
(iii) As to each Medical Device of the Company or any of its
Subsidiaries for which a premarket approval application, premarket
notification, investigational device exemption or similar state or foreign
regulatory application has been approved, the Company and its Subsidiaries are
in compliance with 21 U.S.C. xx.xx. 360 and 360e or 21 C.F.R. Parts 812 or 814,
respectively, and all similar Legal Provisions and all terms and conditions of
such licenses or applications, except for any such failure or failures to be in
compliance which individually or in the aggregate have not had and would not
reasonably be expected to have a Material Adverse Effect. In addition, the
Company and its Subsidiaries are in substantial compliance with all applicable
registration and listing requirements set forth in 21 U.S.C. ss. 360 and 21
C.F.R. Part 807 and all similar Legal Provisions, except for any such failures
to be in compliance which individually or in the aggregate have not had and
would not reasonably be expected to have a Material Adverse Effect.
(iv) No article of any Medical Device manufactured and/or
distributed by the Company or any of its Subsidiaries is (A) adulterated within
the meaning of 21 U.S.C. ss. 351 (or similar Legal Provisions), (B) misbranded
within the meaning of 21 U.S.C. ss. 352 (or similar Legal Provisions) or (C) a
product that is in violation of 21 U.S.C. ss. 360 or ss. 360e (or similar Legal
Provisions), except for failures to be in compliance with the foregoing that
individually or in the aggregate have not had and would not reasonably be
expected to have a Material Adverse Effect.
(v) Neither the Company nor any of its Subsidiaries, nor, to
the Knowledge of the Company, any officer, employee or agent of the Company or
any of its Subsidiaries, has made an untrue statement of a material fact or
fraudulent statement to the FDA or any other Governmental Entity, failed to
disclose a material fact required to be disclosed to the FDA or any other
Governmental Entity, or committed an act, made a statement, or failed to make a
statement that, at the time such disclosure was made, could reasonably be
expected to provide a basis for the FDA or any other Governmental Entity to
invoke its policy respecting "Fraud, Untrue Statements of Material Facts,
Bribery, and Illegal Gratuities", set forth in 56 Fed. Reg. 46191 (September
10, 1991) or any similar policy.
Neither the Company nor any of its Subsidiaries, nor, to the Knowledge of the
Company, any officer, employee or agent of the Company or any of its
Subsidiaries, has been convicted of any crime or engaged in any conduct for
which debarment is mandated by 21 U.S.C. ss. 335a(a) or any similar Legal
Provision or authorized by 21 U.S.C. ss. 335a(b) or any similar Legal
Provision. Neither the Company nor any of its Subsidiaries, nor, to the
Knowledge of the Company, any officer, employee or agent of the Company or any
of its Subsidiaries, has been convicted of any crime or engaged in any conduct
for which such person or entity could be excluded from participating in the
federal health care programs under Section 1128 of the Social Security Act of
1935, as amended (the "Social Security Act") or any similar Legal Provision.
(vi) Since January 1, 2002, neither the Company nor any of
its Subsidiaries has received any written notice that the FDA or any other
Governmental Entity has (a) commenced, or threatened to initiate, any action to
withdraw its approval or request the recall of any Medical Device, (b)
commenced, or threatened to initiate, any action to enjoin production of any
Medical Device or (c) commenced, or threatened to initiate, any action to
enjoin the production of any medical device produced at any facility where any
Medical Device is manufactured, tested or packaged, except for any such action
that individually or in the aggregate has not had and would not reasonably be
expected to have a Material Adverse Effect.
(vii) To the Knowledge of the Company, there are no facts,
circumstances or conditions that would reasonably be expected to form the basis
for any investigation, suit, claim, action or proceeding against or affecting
the Company or any of its Subsidiaries relating to or arising under (a) the
FDCA or (b) the Social Security Act or regulations of the Office of the
Inspector General of the Department of Health and Human Services, in each case
individually or in the aggregate that has had or would reasonably be expected
to have a Material Adverse Effect.
(v) Rights Agreement. The Company has taken all actions necessary to
cause the Rights Agreement dated as of December 15, 2004, between the Company
and EquiServe Trust Company, as rights agent (the "Rights Agreement"), to (i)
render the Rights Agreement inapplicable to this Agreement, the Merger and the
other transactions contemplated by this Agreement, (ii) ensure that (x) none of
Parent, Sub or any other Subsidiary of Parent is an Acquiring Person (as
defined in the Rights Agreement) pursuant to the Rights Agreement, (y) a
Distribution Date or a Stock Acquisition Date (as such terms are defined in the
Rights Agreement) does not occur and (z) the rights (the "Company Rights") to
purchase Company Series A Preferred Stock issued under the Rights Agreement do
not become exercisable, in the case of clauses (x), (y) and (z), solely by
reason of the execution of this Agreement or the consummation of the Merger or
the other transactions contemplated by this Agreement and (iii) provide that
the Expiration Date (as defined in the Rights Agreement) shall occur
immediately prior to the Effective Time.
(w) Termination of J&J Agreement. Immediately prior to execution of
this Agreement, the Company validly terminated the J&J Agreement in accordance
with Section 7.01(f) of the J&J Agreement.
SECTION 3.02. Representations and Warranties of Parent and Sub. Except
as disclosed in the Parent SEC Documents filed by Parent and publicly available
prior to the date of this Agreement ("Filed Parent SEC Documents"), and except
as set forth in the disclosure schedule delivered by Parent to the Company
prior to the execution of this Agreement (the "Parent Disclosure Schedule")
(with specific reference to the particular Section or subsection of this
Agreement to which the information set forth in such disclosure schedule
relates; provided, however, that any information set forth in one section of
the Parent Disclosure Schedule shall be deemed to apply to each other Section
or subsection thereof to which its relevance is readily apparent on its face),
Parent and Sub represent and warrant to the Company as follows:
(a) Organization, Standing and Corporate Power. Each of Parent and Sub
is a corporation duly organized, validly existing and in good standing under
the Laws of the jurisdiction in which it is incorporated and has all requisite
corporate power and authority and possesses all governmental licenses, permits,
authorizations and approvals necessary to enable it to use its corporate or
other name and to own, lease or otherwise hold and operate its properties and
other assets and to carry on its business as now being conducted, except where
the failure to have such governmental licenses, permits, authorizations and
approvals individually or in the aggregate has not had and would not reasonably
be expected to have a Parent Material Adverse Effect. Each of Parent and Sub is
duly qualified or licensed to do business and is in good standing (with respect
to jurisdictions that recognize that concept) in each jurisdiction in which the
nature of its business or the ownership, leasing or operation of its properties
makes such qualification, licensing or good standing necessary, other than in
such jurisdictions where the failure to be so qualified, licensed or in good
standing individually or in the aggregate has not had and would not reasonably
be expected to have a Parent Material Adverse Effect. Parent has made available
to the Company complete and accurate copies of the Parent Certificate and the
Restated By-laws of Parent (the "Parent By-laws"), the Articles of
Incorporation of Sub (the "Sub Articles") and the By-laws of Sub, in each case
as amended to the date hereof.
(b) Authority; Noncontravention. Each of Parent and Sub has all
requisite corporate power and authority to execute and deliver this Agreement
and, subject to receipt of the Parent Stockholder Approval, to consummate the
transactions contemplated by this Agreement. The execution and delivery of this
Agreement by Parent and Sub and the consummation by Parent and Sub of the
transactions contemplated by this Agreement have been duly authorized by all
necessary corporate action on the part of Parent and Sub and no other corporate
proceedings on the part of Parent or Sub are necessary to authorize this
Agreement or to consummate the transactions contemplated by this Agreement
(other than the obtaining of Parent Stockholder Approval and the filing of the
Articles of Merger with the Secretary of State of the State of Indiana). This
Agreement has been duly executed and delivered by each of Parent and Sub and,
assuming the due authorization, execution and delivery by the Company,
constitutes a legal, valid and binding obligation of Parent and Sub, as
applicable, enforceable against Parent and Sub, as applicable, in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent transfer,
moratorium, reorganization or similar Laws affecting the rights of creditors
generally and the availability of equitable remedies (regardless of whether
such enforceability is considered in a proceeding at equity or at law). The
execution and delivery of this Agreement by Parent and Sub do not, and the
consummation by Parent and Sub of the Merger and the other transactions
contemplated by this Agreement and compliance by Parent and Sub with the
provisions of this Agreement will not, conflict with, or result in any
violation or breach of, or default (with or without notice or lapse of time, or
both) under, or give rise to a right of, or result in, termination, cancelation
or acceleration of any obligation or to the loss of a benefit under, or result
in the creation of any Lien in or upon any of the properties or other assets of
Parent or Sub under (x) the Parent Certificate or By-laws, the Sub Articles or
the By-laws of Sub, (y) any Contract to which Parent or Sub is a party or any
of their respective properties or other assets is subject or (z) subject to
obtaining the Parent Stockholder Approval, the governmental filings and other
matters referred to in the following sentence, any Legal Provision applicable
to Parent or Sub or their respective properties or other assets, other than, in
the case of clauses (y) and (z), any such conflicts, violations, breaches,
defaults, rights of termination, cancelation or acceleration, losses or Liens
that individually or in the aggregate have not had and would not reasonably be
expected to (1) have a Parent Material Adverse Effect, (2) impair in any
material respect the ability of Parent or Sub to perform its respective
obligations under this Agreement or (3) prevent or materially impede, interfere
with, hinder or delay the consummation of the transactions contemplated by this
Agreement. No consent, approval, order or authorization of, action by or in
respect of, or registration, declaration or filing with, any Governmental
Entity is required by or with respect to Parent or Sub in connection with the
execution and delivery of this Agreement by Parent and Sub or the consummation
by Parent and Sub of the Merger or the other transactions contemplated by this
Agreement, except for (1) (A) the filing of a premerger notification and report
form by Parent under the HSR Act and the termination of the waiting period
required thereunder, (B) all required notifications and filings by Parent under
Article 4 of the EC Merger Regulation and the receipt of a decision under
Article 6(1)(b), 8(1) or 8(2) thereunder declaring the Merger compatible with
the EC Common Market and (C) the receipt, termination or expiration, as
applicable, of approvals or waiting periods required under any other applicable
competition, merger control, antitrust or similar Law, (2) the filing with the
SEC of (X) the Form S-4, (Y) the Proxy Statement and (Z) such reports under the
Exchange Act as may be required in connection with this Agreement and the
transactions contemplated by this Agreement, (3) the filing of the Articles of
Merger with the Secretary of State of the State of Indiana, (4) the filing of
an amended Parent Certificate with the Secretary of State of the State of
Delaware to reflect the Amendment, (5) any filings with and approvals of the
NYSE and (6) such other consents, approvals, orders, authorizations, actions,
registrations, declarations and filings the failure of which to be obtained or
made individually or in the aggregate has not had and would not reasonably be
expected to (x) have a Parent Material Adverse Effect, (y) impair in any
material respect the ability of Parent or Sub to perform its respective
obligations under this Agreement or (z) prevent or materially impede, interfere
with, hinder or delay the consummation of the transactions contemplated by this
Agreement.
(c) Parent SEC Documents. Parent has filed all reports, schedules,
forms, statements and other documents (including exhibits and other information
incorporated therein) with the SEC required to be filed by Parent since January
1, 2003 (such documents, together with any documents filed during such period
by Parent with the SEC on a voluntary basis on Current Reports on Form 8-K, the
"Parent SEC Documents"). As of their respective filing dates, the Parent SEC
Documents complied in all material respects with, to the extent in effect at
the time of filing, the requirements of the Securities Act, the Exchange Act
and SOX applicable to such Parent SEC Documents, and none of the Parent SEC
Documents contained any untrue statement of a material fact or omitted to state
a 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. Except to the extent that information contained in any Parent
SEC Document has been revised, amended, supplemented or superseded by a
later-filed Parent SEC Document, none of the Parent SEC Documents contains any
untrue statement of a material fact or omits 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, which individually or in the aggregate would require an amendment,
supplement or correction to such Parent SEC Documents. Each of the financial
statements (including the related notes) of Parent included in the Parent SEC
Documents complied at the time it was filed as to form in all material respects
with the applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto in effect at the time of such
filing, had been prepared in accordance with GAAP (except, in the case of
unaudited statements, as permitted by the rules and regulations of the SEC)
applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto) and fairly presented in all material respects
the consolidated financial position of Parent and its consolidated Subsidiaries
as of the dates thereof and the consolidated results of their operations and
cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments). Neither Parent nor any of
its Subsidiaries has any liabilities or obligations of any nature (whether
accrued, absolute, contingent or otherwise) which individually or in the
aggregate have had or would reasonably be expected to have a Parent Material
Adverse Effect.
(i) Each of the principal executive officer of Parent and the
principal financial officer of Parent (or each former principal executive
officer of Parent and each former principal financial officer of Parent, as
applicable) has made all certifications required by Rule 13a-14 or 15d-14 under
the Exchange Act and Sections 302 and 906 of SOX with respect to the Parent SEC
Documents, and the statements contained in such certifications are true and
accurate. Neither Parent nor any of its Subsidiaries has outstanding, or has
arranged any outstanding, "extensions of credit" to directors or executive
officers within the meaning of Section 402 of SOX.
(ii) Parent maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (A) transactions are
executed in accordance with management's general or specific authorizations;
(B) access to assets is permitted only in accordance with management's general
or specific authorization; and (C) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(iii) Parent's "disclosure controls and procedures" (as
defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) are reasonably
designed to ensure that all information (both financial and non-financial)
required to be disclosed by Parent in the reports that it files or submits
under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in the rules and forms of the SEC, and that all such
information is accumulated and communicated to Parent's management as
appropriate to allow timely decisions regarding required disclosure and to make
the certifications of the chief executive officer and chief financial officer
of Parent required under the Exchange Act with respect to such reports.
(d) Information Supplied. None of the information supplied or to be
supplied by or on behalf of Parent or Sub specifically for inclusion or
incorporation by reference in (i) the Form S-4 will, at the time the Form S-4
is filed with the SEC and at the time it becomes effective under the Securities
Act, contain any untrue statement of a material fact or omit to state any
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, or (ii) the Proxy Statement will, at the date it is first mailed to
the shareholders of the Company and the stockholders of Parent and at the time
of each of the Shareholders' Meetings, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading, except that no
representation or warranty is made by Parent or Sub with respect to statements
made or incorporated by reference therein based on information supplied by or
on behalf of the Company specifically for inclusion or incorporation by
reference in the Form S-4 or the Proxy Statement. The Form S-4 will comply as
to form in all material respects with the requirements of the Securities Act
and the rules and regulations thereunder.
(e) Interim Operations of Sub. Sub was formed solely for the purpose
of engaging in the transactions contemplated by this Agreement, has engaged in
no other business activities and has conducted its operations only as
contemplated hereby.
(f) Capital Resources. As of the Closing, Parent will have funds that
are sufficient to effect the Closing on the terms contemplated hereby.
(g) Brokers. No broker, investment banker, financial advisor or other
person (other xxxx Xxxxxxx Xxxxx & Co., Bear, Xxxxxxx & Co. Inc. and Banc of
America Securities LLC), the fees and expenses of which will be paid by Parent,
is entitled to any broker's, finder's, financial advisor's or other similar fee
or commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of Parent or Sub.
(h) Capital Structure. As of the date hereof, the authorized capital
stock of Parent consists of 1,200,000,000 shares of Parent Common Stock and
50,000,000 shares of preferred stock, par value $0.01 per share, of Parent
("Parent Preferred Stock"). At the close of business on January 6, 2006, (i)
820,349,733 shares of Parent Common Stock were issued and outstanding, (ii)
24,215,559 shares of Parent Common Stock were held by Parent in its treasury,
(iii) no shares of Parent Preferred Stock had been designated or issued and
(iv) 54,207,720 shares of Parent Common Stock were subject to outstanding
options to purchase or Parent's obligation to issue shares of Parent Common
Stock granted under Parent's stock incentive plans. Except as set forth above
in this Section 3.02(h), at the close of business on January 6, 2006, there
were not issued, reserved for issuance or outstanding (A) any shares of capital
stock or other voting securities of Parent, (B) any securities of Parent
convertible into or exchangeable or exercisable for shares of capital stock or
voting securities of Parent or (C) any warrants, calls, options or other rights
to acquire from Parent, or any obligation of Parent to issue, any shares of
capital stock, voting securities or securities convertible into or exchangeable
or exercisable for capital stock or voting securities of Parent. Except as set
forth above in this Section 3.02(h), at the close of business on January 6,
2006, no bonds, debentures, notes or other indebtedness of Parent having the
right to vote (or convertible into, or exchangeable for, securities having the
right to vote) on any matters on which the stockholders of Parent may vote are
issued or outstanding. The authorized capital stock of Sub consists of 200
shares of common stock, no par value, of which 200 shares are issued and
outstanding, all of which shares are beneficially owned by Parent.
(i) Absence of Changes. Except for liabilities incurred in connection
with this Agreement or as expressly permitted pursuant to Section 4.01(b)(i)
through (ix), since the date of the most recent financial statements included
in the Filed Parent SEC Documents, Parent and its Subsidiaries have conducted
their respective businesses only in the ordinary course consistent with past
practice, and there has not been any Parent Material Adverse Change, and from
such date until the date hereof there has not been: (i) any declaration,
setting aside or payment of any dividend or other distribution (whether in
cash, stock or property) with respect to any capital stock of Parent or any of
its Subsidiaries, other than dividends or distributions by a direct or indirect
wholly owned Subsidiary of Parent to its stockholders, (ii) any purchase,
redemption or other acquisition by Parent or any of its Subsidiaries of any
shares of capital stock or any other securities of Parent or any of its
Subsidiaries or any options, warrants, calls or rights to acquire such shares
or other securities, (iii) any split, combination or reclassification of any
capital stock of Parent or any of its Subsidiaries or any issuance or the
authorization of any issuance of any other securities in respect of, in lieu of
or in substitution for shares of their respective capital stock, (iv) any
damage, destruction or loss, whether or not covered by insurance, that
individually or in the aggregate has had or would reasonably be expected to
have a Parent Material Adverse Effect, (v) any change in accounting methods,
principles or practices by Parent materially affecting its assets, liabilities
or businesses, except insofar as may have been required by a change in GAAP or
(vi) any material tax election or any settlement or compromise of any material
income tax liability.
(j) Litigation. There is no suit, action or proceeding pending or, to
the Knowledge of Parent, threatened against or affecting Parent or any of its
Subsidiaries or any of their respective assets that individually or in the
aggregate has had or would reasonably be expected to have a Parent Material
Adverse Effect, nor is there any Order of any Governmental Entity or arbitrator
outstanding against, or, to the Knowledge of Parent, investigation by any
Governmental Entity involving, Parent or any of its Subsidiaries or any of
their respective assets that individually or in the aggregate has had or would
reasonably be expected to have a Parent Material Adverse Effect.
(k) Intellectual Property. (i) Section 3.02(k)(i) of the Parent
Disclosure Schedule sets forth, as of the date hereof, a complete and accurate
list (in all material respects) of all patents and applications therefor,
registered trademarks and applications therefor, domain name registrations and
copyright registrations (if any) that, in each case, are owned by or licensed
to Parent or any of its Subsidiaries and are material to the conduct of the
business of Parent and its Subsidiaries, taken as a whole, as currently
conducted. Such intellectual property rights required to be listed in Section
3.02(k)(i) of the Parent Disclosure Schedule, together with any tradename
rights, trade secret or know how rights, service xxxx rights, trademark rights,
patent rights, intellectual property rights in computer programs or software or
other type of intellectual property rights, in each case, that are owned or
licensed by Parent or any of its Subsidiaries and are material to the conduct
of the business of Parent and its Subsidiaries, taken as a whole, as currently
conducted, are collectively referred to herein as "Parent Intellectual Property
Rights". All Parent Intellectual Property Rights are either (x) owned by Parent
or a Subsidiary of Parent free and clear of all Liens or (y) licensed to Parent
or a Subsidiary of Parent free and clear (to the Knowledge of Parent) of all
Liens, except where the failure to so own or license such Parent Intellectual
Property Rights individually or in the aggregate has not had and would not
reasonably be expected to have a Parent Material Adverse Effect. There are no
claims pending or, to the Knowledge of Parent, threatened with regard to the
ownership or, to the Knowledge of Parent, licensing by Parent or any of its
Subsidiaries of any Parent Intellectual Property Rights which individually or
in the aggregate has had or would reasonably be expected to have a Parent
Material Adverse Effect. Each of Parent and its Subsidiaries owns, is validly
licensed or otherwise has the right to use all Parent Intellectual Property
Rights, except where the failure to own, have a valid license or otherwise have
rights to use individually or in the aggregate has not had and would not
reasonably be expected to have a Parent Material Adverse Effect. The execution
and delivery of this Agreement by Parent do not, and the consummation by Sub of
the Merger and the other transactions contemplated by this Agreement and
compliance by Parent and Sub with the provisions of this Agreement will not,
conflict with, or result in any violation or breach of, or default (with or
without notice or lapse of time, or both) under, or give rise to a right of, or
result in, termination, cancelation or acceleration of any obligation or to the
loss of a benefit under, or result in the creation of any Lien in or upon, any
Parent Intellectual Property Right, in each case that individually or in the
aggregate has had or would reasonably be expected to have a Parent Material
Adverse Effect. Section 3.02(k)(i) of the Parent Disclosure Schedule sets
forth, as of the date hereof, all Contracts under which Parent or any of its
Subsidiaries is obligated to make payments to third parties for use of any
Parent Intellectual Property Rights with respect to the commercialization of
any products that are, as of the date hereof, being sold, manufactured by or
under development by Parent or any of its Subsidiaries and for which such
payments are in excess of $2,000,000 per year for any single product. The
aggregate amount of all such payments that Parent and its Subsidiaries are
obligated to make under any Contract of the type described in the immediately
preceding sentence that are not required to be disclosed pursuant to such
sentence does not exceed $10,000,000 per year. There are no pending or, to the
Knowledge of Parent, threatened claims that Parent or any of its Subsidiaries
has infringed or is infringing (including with respect to the manufacture, use
or sale by Parent or any of its Subsidiaries of any products or to the
operations of Parent and its Subsidiaries) any intellectual property rights of
any person which individually or in the aggregate has had or would reasonably
be expected to have a Parent Material Adverse Effect. To the Knowledge of
Parent, as of the date of this Agreement, there are no facts, circumstances or
conditions that would reasonably be expected to form the basis for any claim by
a person to exclude or prevent Parent or any of its Subsidiaries from freely
using its Parent Intellectual Property Rights and that individually or in the
aggregate would reasonably be expected to have a Parent Material Adverse
Effect.
(ii) All patents required to be listed in Section 3.02(k)(i)
of Parent Disclosure Schedule that are owned by Parent or any of its
Subsidiaries have been duly registered and/or filed with or issued by each
appropriate Governmental Entity, all necessary affidavits of continuing use
have been timely filed, and all necessary maintenance fees have been timely
paid to continue all such rights in effect, other than failures to be duly
registered, filed, issued or paid which individually or in the aggregate have
not had and would not reasonably be expected to have a Parent Material Adverse
Effect. None of the patents required to be listed in Section 3.02(k)(i) of
Parent Disclosure Schedule that are owned by Parent or any of its Subsidiaries
has expired or been declared invalid, in whole or in part, by any Governmental
Entity, other than such expirations or declarations of invalidity which
individually or in the aggregate have not had and would not reasonably be
expected to have a Parent Material Adverse Effect. There are no ongoing
interferences, oppositions, reissues, reexaminations or other proceedings
challenging any of the patents or patent applications required to be listed in
Section 3.02(k)(i) of the Parent Disclosure Schedule and owned by Parent or any
of its Subsidiaries (or, to Parent's Knowledge, challenging any such patents or
patent applications licensed to Parent or any of its Subsidiaries), including
ex parte and post-grant proceedings, in the United States Patent and Trademark
Office or in any foreign patent office or similar administrative agency, other
than such interferences, oppositions, reissues, reexaminations or proceedings
that individually or in the aggregate have not had and would not reasonably be
expected to have a Parent Material Adverse Effect. Except as has not had and
would not reasonably be expected to have a Parent Material Adverse Effect,
Parent and its Subsidiaries have used commercially reasonable efforts to
maintain their material trade secrets in confidence.
(l) Voting Requirements. At the Parent Stockholders' Meeting or any
adjournment or postponement thereof, the affirmative vote of: (i) a majority of
the outstanding shares of Parent Common Stock is the only vote of any class or
series of capital stock of Parent necessary to adopt the Amendment; and (ii) a
majority of the shares of Parent Common Stock cast in respect of the Shares
Issuance is the only vote of any class or series of capital stock of Parent
necessary to approve the Share Issuance, provided that the total number of
shares voted in person or by proxy in respect of the Share Issuance exceeds 50%
of the total number of shares entitled to vote on the matter (collectively, the
"Parent Stockholder Approval" and, together with the Company Shareholder
Approval, the "Shareholder Approvals").
(m) Regulatory Compliance. As to each product subject to the FDCA or
similar Legal Provisions in any foreign jurisdiction that are developed,
manufactured, tested, distributed and/or marketed by Parent or any of its
Subsidiaries (a "Parent Medical Device"), each such Parent Medical Device is
being developed, manufactured, tested, distributed and/or marketed in
compliance with all applicable requirements under the FDCA and similar Legal
Provisions, including those relating to investigational use, premarket
clearance or marketing approval to market a Parent Medical Device, good
manufacturing practices, labeling, advertising, record keeping, filing of
reports and security, and in compliance with the Advanced Medical Technology
Association Code of Ethics on Interactions with Healthcare Professionals and
the American Medical Association's guidelines on gifts to physicians, except
for failures in compliance that individually or in the aggregate have not had
and would not reasonably be expected to have a Parent Material Adverse Effect.
Neither Parent nor any of its Subsidiaries has received any notice or other
communication from the FDA or any other Governmental Entity (A) contesting the
premarket clearance or approval of, the uses of or the labeling and promotion
of any products of Parent or any of its Subsidiaries or (B) otherwise alleging
any violation applicable to any Parent Medical Device of any Legal Provision,
in the case of (A) and (B), that individually or in the aggregate have had or
would reasonably be expected to have a Parent Material Adverse Effect.
(i) No Parent Medical Device is under consideration by senior
management of Parent or any of its Subsidiaries for recall, withdrawal,
suspension, seizure or discontinuance, or has been recalled, withdrawn,
suspended, seized or discontinued (other than for commercial or other business
reasons) by, Parent or any of its Subsidiaries in the United States or outside
the United States (whether voluntarily or otherwise), in each case since
January 1, 2002. No proceedings in the United States or outside of the United
States of which Parent has Knowledge (whether completed or pending) seeking the
recall, withdrawal, suspension, seizure or discontinuance of any Parent Medical
Device are pending against Parent or any of its Subsidiaries or any licensee of
any Parent Medical Device which individually or in the aggregate have had or
would reasonably be expected to have a Parent Material Adverse Effect.
(ii) As to each Parent Medical Device of Parent or any of its
Subsidiaries for which a premarket approval application, premarket
notification, investigational device exemption or similar state or foreign
regulatory application has been approved, Parent and its Subsidiaries are in
compliance with 21 U.S.C. xx.xx. 360 and 360e or 21 C.F.R. Parts 812 or 814,
respectively, and all similar Legal Provisions and all terms and conditions of
such licenses or applications, except for any such failure or failures to be in
compliance which individually or in the aggregate have not had and would not
reasonably be expected to have a Parent Material Adverse Effect. In addition,
Parent and its Subsidiaries are in substantial compliance with all applicable
registration and listing requirements set forth in 21 U.S.C. ss. 360 and 21
C.F.R. Part 807 and all similar Legal Provisions, except for any such failures
to be in compliance which individually or in the aggregate have not had and
would not reasonably be expected to have a Parent Material Adverse Effect.
(iii) No article of any Parent Medical Device manufactured
and/or distributed by Parent or any of its Subsidiaries is (A) adulterated
within the meaning of 21 U.S.C. ss. 351 (or similar Legal Provisions), (B)
misbranded within the meaning of 21 U.S.C. ss. 352 (or similar Legal
Provisions) or (C) a product that is in violation of 21 U.S.C. ss. 360 or ss.
360e (or similar Legal Provisions), except for failures to be in compliance
with the foregoing that individually or in the aggregate have not had and would
not reasonably be expected to have a Parent Material Adverse Effect.
(iv) Neither Parent nor any of its Subsidiaries, nor, to the
Knowledge of Parent, any officer, employee or agent of Parent or any of its
Subsidiaries, has made an untrue statement of a material fact or fraudulent
statement to the FDA or any other Governmental Entity, failed to disclose a
material fact required to be disclosed to the FDA or any other Governmental
Entity, or committed an act, made a statement, or failed to make a statement
that, at the time such disclosure was made, could reasonably be expected to
provide a basis for the FDA or any other Governmental Entity to invoke its
policy respecting "Fraud, Untrue Statements of Material Facts, Bribery, and
Illegal Gratuities", set forth in 56 Fed. Reg. 46191 (September 10, 1991) or
any similar policy. Neither Parent nor any of its Subsidiaries, nor, to the
Knowledge of Parent, any officer, employee or agent of Parent or any of its
Subsidiaries, has been convicted of any crime or engaged in any conduct for
which debarment is mandated by 21 U.S.C. ss. 335a(a) or any similar Legal
Provision or authorized by 21 U.S.C. ss. 335a(b) or any similar Legal
Provision. Neither Parent nor any of its Subsidiaries, nor, to the Knowledge of
Parent, any officer, employee or agent of Parent or any of its Subsidiaries,
has been convicted of any crime or engaged in any conduct for which such person
or entity could be excluded from participating in the federal health care
programs under Section 1128 of the Social Security Act or any similar Legal
Provision.
(v) Since January 1, 2002, neither Parent nor any of its
Subsidiaries has received any written notice that the FDA or any other
Governmental Entity has (a) commenced, or threatened to initiate, any action to
withdraw its approval or request the recall of any Medical Device, (b)
commenced, or threatened to initiate, any action to enjoin production of any
Medical Device or (c) commenced, or threatened to initiate, any action to
enjoin the production of any medical device produced at any facility where any
Parent Medical Device is manufactured, tested or packaged, except for any such
action that individually or in the aggregate has not had and would not
reasonably be expected to have a Parent Material Adverse Effect.
(vi) To the Knowledge of Parent, there are no facts,
circumstances or conditions that would reasonably be expected to form the basis
for any investigation, suit, claim, action or proceeding against or affecting
Parent or any of its Subsidiaries relating to or arising under (a) the FDCA or
(b) the Social Security Act or regulations of the Office of the Inspector
General of the Department of Health and Human Services, in each case
individually or in the aggregate that has had or would reasonably be expected
to have a Parent Material Adverse Effect.
(n) Compliance With Law; Environmental. (i) Except with respect to
Environmental Laws, regulatory compliance and taxes, which are the subjects of
this Section 3.02(n), 3.02(m) and 3.02(r), respectively, each of Parent and its
Subsidiaries is in compliance with all Legal Provisions applicable to it, its
properties or other assets or its business or operations, except for failures
to be in compliance that individually or in the aggregate have not had and
would not reasonably be expected to have a Parent Material Adverse Effect. Each
of Parent and its Subsidiaries has in effect all Permits, including all Permits
under the FDCA, necessary for it to own, lease or operate its properties and
other assets and to carry on its business and operations as currently
conducted, except where the failure to have such Permits individually or in the
aggregate has not had and would not reasonably be expected to have a Parent
Material Adverse Effect. Since January 1, 2000, there has occurred no default
under, or violation of, any such Permit, except for any such default or
violation that individually or in the aggregate has not had and would not
reasonably be expected to have a Parent Material Adverse Effect. The
consummation of the Merger, in and of itself, would not cause the revocation or
cancelation of any such Permit that individually or in the aggregate would
reasonably be expected to have a Parent Material Adverse Effect.
(ii) Except for those matters that individually or in the
aggregate have not had and would not reasonably be expected to have a Parent
Material Adverse Effect: (A) during the period of ownership or operation by
Parent or any of its Subsidiaries of any of its currently or formerly owned,
leased or operated properties, there have been no Releases of Hazardous
Materials in, on, under or affecting any properties which would subject Parent
or any of its Subsidiaries to any liability under any Environmental Law or
require any expenditure by Parent or any of its Subsidiaries for remediation to
meet applicable standards thereunder; (B) prior to and after, as applicable,
the period of ownership or operation by Parent or any of its Subsidiaries of
any of its currently or formerly owned, leased or operated properties, to the
Knowledge of Parent, there were no Releases of Hazardous Materials in, on,
under or affecting any properties which would subject Parent or any of its
Subsidiaries to any liability under any Environmental Law or require any
expenditure by Parent or any of its Subsidiaries for remediation to meet
applicable standards thereunder; (C) neither Parent nor any of its Subsidiaries
is subject to any indemnity obligation or other Contract with any person
relating to obligations or liabilities under Environmental Laws; and (D) to the
Knowledge of Parent, there are no facts, circumstances or conditions that would
reasonably be expected to form the basis for any investigation, suit, claim,
action, proceeding or liability against or affecting Parent or any of its
Subsidiaries relating to or arising under Environmental Laws.
(o) Financing. Parent has provided to the Company a complete and
accurate copy of the amended and restated commitment letter (the "Commitment
Letter") of Xxxxxxx Xxxxx Capital Corporation, Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated, Banc of America Securities LLC and Bank of America, N.A.
(the "Lenders") addressed to Parent and dated as of January 16, 2006 pursuant
to which the Lenders have committed to provide, in connection with the Cash
Portion of the Merger Consideration, senior credit facilities of up to $7
billion and an interim loan of up to $7 billion, subject to the terms and
conditions contained in the Commitment Letter (such credit facilities and term
loan are collectively referred to as the "Financing"). The funds provided by
the Financing, together with Parent's cash on hand (as of the Effective Time),
will be sufficient to fully fund the Cash Portion of the Merger Consideration.
The Commitment Letter is not subject to any conditions other than as set forth
therein, has been duly executed by Parent and by all other parties thereto and
is in full force and effect on the date hereof. All commitment and other fees
required to be paid under the Commitment Letter prior to the date hereof have
been paid and, as of the date hereof, to the knowledge of Parent, there is no
fact or occurrence existing that would make any of the statements (including
any assumptions) set forth in the Commitment Letter inaccurate. Assuming no
breach or default by the Company under this Agreement, to the knowledge of
Parent, there is no fact or occurrence known to Parent as of the date of this
Agreement that would cause the conditions to funding of the Financing not to be
satisfied on or before the Effective Time.
(p) Subsidiaries. Section 3.02(p) of the Parent Disclosure Schedule
lists, as of the date hereof, (i) each Significant Subsidiary of Parent
(including its state of incorporation or formation) and (ii) each other
Subsidiary of Parent. All of the outstanding capital stock of, or other equity
interests in, each Significant Subsidiary of Parent, is directly or indirectly
owned by Parent. All the issued and outstanding shares of capital stock of, or
other equity interests in, each such Subsidiary owned by Parent have been
validly issued and are fully paid and nonassessable and are owned directly or
indirectly by Parent free and clear of all Liens and free of any restriction on
the right to vote, sell or otherwise dispose of such capital stock or other
equity interests.
(q) Contracts. None of Parent, any of its Subsidiaries or, to the
Knowledge of Parent, any other party thereto is in violation of or in default
under (nor does there exist any condition which upon the passage of time or the
giving of notice or both would cause such a violation of or default by Parent
or any of its Subsidiaries or, to the Knowledge of Parent, any other party
thereto under) any Contract to which it is a party or by which it or any of its
properties or other assets is bound, except for violations or defaults that
individually or in the aggregate have not had and would not reasonably be
expected to have a Parent Material Adverse Effect.
(r) Taxes. Except as has not had and would not reasonably be expected
to have a Parent Material Adverse Effect:
(i) All tax returns required by applicable Law to have been
filed with any taxing authority by, or on behalf of, Parent or any of
its Subsidiaries have been filed in a timely manner (taking into
account any valid extension) in accordance with all applicable Laws,
and all such tax returns are true and complete in all material
respects.
(ii) Parent and each of its Subsidiaries has paid (or has had
paid on its behalf) all taxes due and owing, and Parent's most recent
financial statements included in the Filed Parent SEC Documents
reflect an adequate accrual for all taxes payable by Parent and its
Subsidiaries for all taxable periods and portions thereof accrued
through the date of such financial statements.
(iii) There are no Liens or encumbrances for taxes on any of
the assets of Parent or any of its Subsidiaries other than for taxes
not yet due and payable.
(iv) Parent and its Subsidiaries have complied with all
applicable Laws relating to the payment and withholding of taxes.
(v) No written notification has been received by Parent or
any of its Subsidiaries that any federal, state, local or foreign
audit, examination or similar proceeding is pending, proposed or
asserted with regard to any taxes or tax returns of Parent or its
Subsidiaries.
(vi) There is no currently effective Contract extending, or
having the effect of extending, the period of assessment or collection
of any federal, state and, to the Knowledge of Parent, foreign taxes
with respect to Parent or any of its Subsidiaries nor has any request
been made for any such extension.
(vii) No written notice of a claim of pending investigation
has been received from any state, local or other jurisdiction with
which Parent or any of its Subsidiaries currently does not file tax
returns, alleging that Parent or any of its Subsidiaries has a duty to
file tax returns and pay taxes or is otherwise subject to the taxing
authority of such jurisdiction.
(viii) Neither Parent nor any of its Subsidiaries joins or
has joined, for any taxable period during the eight years prior to the
date of this Agreement, in the filing of any affiliated, aggregate,
consolidated, combined or unitary federal, state, local and, to the
Knowledge of Parent, foreign tax return other than consolidated tax
returns for the consolidated group of which Parent is the common
parent.
(ix) Neither Parent nor any of its Subsidiaries is a party to
or bound by any tax sharing agreement or tax indemnity agreement,
arrangement or practice (including any advance pricing agreement,
closing agreement or other agreement relating to taxes with any taxing
authority).
(x) Neither Parent nor any of its Subsidiaries has
constituted either a "distributing corporation" or a "controlled
corporation" in a distribution of stock qualifying for tax-free
treatment under Section 355 of the Code in the two years prior to the
date of this Agreement.
(xi) Neither Parent nor any of its Subsidiaries has entered
into a "listed transaction" within the meaning of Treasury Regulation
ss. 1.6011-4(b)(2)
(s) Title to Properties. Except as has not had and would not
reasonably be expected to have a Parent Material Adverse Effect, each of Parent
and its Subsidiaries has valid title to, or valid leasehold or sublease
interests or other comparable contract rights in or relating to all of its real
properties and other tangible assets necessary for the conduct of its business
as currently conducted, except as have been disposed of in the ordinary course
of business. Each of Parent and its Subsidiaries has complied with the terms of
all leases or subleases to which it is a party and under which it is in
occupancy, and all leases to which Parent is a party and under which it is in
occupancy are in full force and effect, except for such failure to comply or be
in full force and effect that individually or in the aggregate has not had and
would not reasonably be expected to have a Parent Material Adverse Effect.
Neither Parent nor any of its Subsidiaries has received any written notice of
any event or occurrence that has resulted or could result (with or without the
giving of notice, the lapse of time or both) in a default with respect to any
lease or sublease to which it is a party, which defaults individually or in the
aggregate have had or would reasonably be expected to have a Parent Material
Adverse Effect.
ARTICLE IV
Covenants Relating to Conduct of Business; No Solicitation
----------------------------------------------------------
SECTION 4.01. Conduct of Business. (a) Conduct of Business by the
Company. During the period from the date of this Agreement to the Effective
Time, except as set forth in Section 4.01(a) of the Company Disclosure Schedule
or as consented to in writing in advance by Parent or as otherwise permitted or
required by this Agreement, the Company shall, and shall cause each of its
Subsidiaries to, carry on its business in the ordinary course consistent with
past practice prior to the Closing and, to the extent consistent therewith, use
all commercially reasonable efforts to preserve intact its current business
organizations, keep available the services of its current officers, employees
and consultants and preserve its relationships with customers, suppliers,
licensors, licensees, distributors and others having business dealings with it.
In addition to and without limiting the generality of the foregoing, during the
period from the date of this Agreement to the Effective Time, except as
otherwise set forth in Section 4.01(a) of the Company Disclosure Schedule or as
otherwise permitted or required pursuant to this Agreement, the Company shall
not, and shall not permit any of its Subsidiaries to, without Parent's prior
written consent:
(i) (x) declare, set aside or pay any dividends on, or make
any other distributions (whether in cash, stock or property) in
respect of, any of its capital stock, other than (1) cash dividends
payable by the Company in respect of shares of Company Common Stock
consistent with past practice and not exceeding $0.10 per share of
Company Common Stock per fiscal quarter, (2) dividends and
distributions in connection with the Rights Agreement and (3)
dividends or distributions by a direct or indirect wholly owned
Subsidiary of the Company to its shareholders, (y) split, combine or
reclassify any of its capital stock or issue or authorize the issuance
of any other securities in respect of, in lieu of or in substitution
for shares of its capital stock or (z) purchase, redeem or otherwise
acquire any shares of its capital stock or any other securities
thereof or any rights, warrants or options to acquire any such shares
or other securities, except for purchases, redemptions or other
acquisitions of capital stock or other securities (1) required by the
terms of the Company Stock Plans or the ESPP or (2) required by the
terms of any plans, arrangements or Contracts existing on the date
hereof between the Company or any of its Subsidiaries and any director
or employee of the Company or any of its Subsidiaries (to the extent
complete and accurate copies of which have been heretofore delivered
to Parent);
(ii) issue, deliver, sell, grant, pledge or otherwise
encumber or subject to any Lien any shares of its capital stock, any
other voting securities or any securities convertible into, or any
rights, warrants or options to acquire, any such shares, voting
securities or convertible securities, or any "phantom" stock,
"phantom" stock rights, stock appreciation rights or stock based
performance units, including pursuant to Contracts as in effect on the
date hereof (other than (x) the issuance of shares of Company Common
Stock upon the exercise of Company Stock Options or in connection with
Company Stock Based Awards, in each case in accordance with their
terms on the date hereof, and (y)the issuance of Company Rights and
shares of the Company's capital stock pursuant to the Company Rights
or the Rights Agreement);
(iii) amend (x) the Company Articles or the Company By-laws
or other comparable charter or organizational documents of any of the
Company's Subsidiaries or (y) the Indenture dated as of January 18,
1996 between the Company and Citibank, N.A., with respect to the 6.15%
Senior Unsecured Notes due February 15, 2006 of the Company (the
"Company Notes"), in each case except as may be required by applicable
Law or the rules and regulations of the SEC or the NYSE;
(iv) directly or indirectly acquire (x) by merging or
consolidating with, by purchasing a substantial portion of the assets
of, by making an investment in or capital contribution to, or by any
other manner, any person or division, business or equity interest of
any person or (y) any asset or assets, except for (1) capital
expenditures, which shall be subject to the limitations of clause
(vii) below, (2) purchases of components, raw materials or supplies in
the ordinary course of business consistent with past practice and (3)
acquisitions of material intellectual property rights in respect of
cross-licenses permitted in connection with the discharge, settlement
or satisfaction of claims and litigation under clause (viii) below;
(v) (x) sell, lease, license, mortgage, sell and leaseback or
otherwise encumber or subject to any Lien or otherwise dispose of any
of its material properties or other material assets or any interests
therein (including securitizations), except for (1) sales of inventory
and used equipment in the ordinary course of business consistent with
past practice and (2) licenses of Intellectual Property Rights
permitted in connection with the discharge, settlement or satisfaction
of claims and litigation under clause (viii) below, or (y) enter into,
modify or amend any lease of material property, except for
modifications or amendments that are not materially adverse to the
Company and its Subsidiaries, taken as a whole;
(vi) (x) incur any indebtedness for borrowed money or
guarantee any such indebtedness of another person, issue or sell any
debt securities or calls, options, warrants or other rights to acquire
any debt securities of the Company or any of its Subsidiaries,
guarantee any debt securities of another person, enter into any "keep
well" or other Contract to maintain any financial statement condition
of another person or enter into any arrangement having the economic
effect of any of the foregoing (other than short-term borrowings in
the ordinary course of business consistent with past practice under
the Company's commercial paper program, in an aggregate amount not to
exceed $800,000,000 at any time outstanding) or (y) make any loans or
advances to any other person, other than to employees in respect of
travel expenses in the ordinary course of business consistent with
past practice, which would result in the aggregate principal amount of
all of the outstanding foregoing loans and advances of the Company and
its Subsidiaries exceeding $25,000,000;
(vii) make any new capital expenditure or expenditures
exceeding the amounts set forth in Section 4.01(a)(vii) of the Company
Disclosure Schedule;
(viii) except as required by Law or any judgment by a court
of competent jurisdiction, (v) pay, discharge, settle or satisfy any
material claims, liabilities, obligations or litigation (absolute,
accrued, asserted or unasserted, contingent or otherwise), other than
the payment, discharge, settlement or satisfaction in the ordinary
course of business consistent with past practice or in accordance with
their terms, of liabilities disclosed, reflected or reserved against
in the most recent audited financial statements (or the notes thereto)
of the Company included in the Filed Company SEC Documents (for
amounts not in excess of such reserves) or incurred since the date of
such financial statements in the ordinary course of business
consistent with past practice, (w) cancel any material indebtedness,
(x) waive or assign any claims or rights of material value, (y) waive
any benefits of, or agree to modify in any respect, or, subject to the
terms hereof, knowingly fail to enforce, or consent to any matter with
respect to which consent is required under, any standstill or similar
Contract to which the Company or any of its Subsidiaries is a party or
(z) waive any material benefits of, or agree to modify in any material
respect, or, subject to the terms hereof, knowingly fail to enforce in
any material respect, or consent to any matter with respect to which
consent is required under, any material confidentiality or similar
Contract to which the Company or any of its Subsidiaries is a party;
(ix) enter into (1) any material Contract that would be of a
type referred to in Section 3.01(i)(2)(A) or (2) any other material
Contract that would be of a type referred to in Section 3.01(i)(2)(B)
or (C) and, in the case of this clause (2), that (A) would reasonably
be expected to impair in any material respect the ability of the
Company and its Subsidiaries to conduct their business as currently
conducted or (B) would reasonably be expected to have a material
adverse effect on the reasonably expected benefits of the Merger to
Parent;
(x) enter into, modify, amend or terminate any Contract or
waive, release or assign any material rights or claims thereunder,
which if so entered into, modified, amended, terminated, waived,
released or assigned would reasonably be expected to (A) have a
Material Adverse Effect, (B) impair in any material respect the
ability of the Company to perform its obligations under this Agreement
or (C) prevent or materially impede, interfere with, hinder or delay
the consummation of the transactions contemplated by this Agreement;
(xi) enter into any material Contract to the extent
consummation of the transactions contemplated by this Agreement or
compliance by the Company with the provisions of this Agreement could
reasonably be expected to conflict with, or result in a violation or
breach of, or default (with or without notice or lapse of time, or
both) under, or give rise to a right of, or result in, termination,
cancelation or acceleration of any obligation or to the loss of a
benefit under, or result in the creation of any Lien in or upon any of
the properties or other assets of the Company or any of its
Subsidiaries under, or require Parent to license or transfer any of
its Intellectual Property Rights or other material assets under, or
give rise to any increased, additional, accelerated, or guaranteed
right or entitlements of any third party under, or result in any
material alteration of, any provision of such Contract;
(xii) except as required to ensure that any Company Benefit
Plan or Company Benefit Agreement is not then out of compliance with
applicable Law or to comply with any Company Benefit Plan, Company
Benefit Agreement or other Contract entered into prior to the date
hereof (to the extent complete and accurate copies of which have been
heretofore delivered to Parent), (A) adopt, enter into, terminate or
amend (I) any collective bargaining Contract or Company Benefit Plan
or (II) any Company Benefit Agreement or other Contract, plan or
policy involving the Company or any of its Subsidiaries and Key
Personnel, (B) increase in any manner the compensation, bonus or
fringe or other benefits of, or pay any discretionary bonus of any
kind or amount whatsoever to, any current or former director, officer,
employee or consultant, except in the ordinary course of business
consistent with past practice to employees of the Company or its
Subsidiaries other than Key Personnel, (C) grant or pay any severance
or termination pay, except for severance or termination pay granted or
paid in the ordinary course of business consistent with past practice,
to, or increase in any material manner the severance or termination
pay of, any current or former director, officer, employee or
consultant of the Company or any of its Subsidiaries other than Key
Personnel, (D) remove any existing restrictions in any Company Benefit
Agreements, Company Benefit Plans or awards made thereunder, (E) take
any action to fund or in any other way secure the payment of
compensation or benefits under any Company Benefit Plan or Company
Benefit Agreement, (F) take any action to accelerate the vesting or
payment of any compensation or benefit under any Company Benefit Plan
or Company Benefit Agreement or awards made thereunder or (G)
materially change any actuarial or other assumption used to calculate
funding obligations with respect to any Company Pension Plan or change
the manner in which contributions to any Company Pension Plan are made
or the basis on which such contributions are determined;
(xiii) except as required by GAAP, revalue any material
assets of the Company or any of its Subsidiaries or make any change in
accounting methods, principles or practices; or
(xiv) authorize any of, or commit, resolve, propose or agree
to take any of, the foregoing actions.
(b) Conduct of Business by Parent. During the period from the date of
this Agreement to the Effective Time, except as set forth in Section 4.01(b) of
the Parent Disclosure Schedule or as consented to in writing in advance by the
Company or as otherwise permitted or required by this Agreement, Parent shall,
and shall cause each of its Subsidiaries to, carry on its business in the
ordinary course consistent with past practice prior to the Closing and, to the
extent consistent therewith, use all commercially reasonable efforts to
preserve intact its current business organizations, keep available the services
of its current officers, employees and consultants and preserve its
relationships with customers, suppliers, licensors, licensees, distributors and
others having business dealings with it. In addition to and without limiting
the generality of the foregoing, during the period from the date of this
Agreement to the Effective Time, except as otherwise set forth in Section
4.01(b) of the Parent Disclosure Schedule or as otherwise permitted or required
pursuant to this Agreement, Parent shall not, and shall not permit any of its
Subsidiaries to, without the Company's prior written consent:
(i) amend, or propose or agree to amend, the Parent
Certificate or the Restated By-laws of Parent in any manner that would
adversely affect the consummation of the Merger;
(ii) take any other action that could reasonably be expected
to cause the Financing not to be available on a timely basis in
connection with Parent's obligation to pay the Merger Consideration
upon consummation of the Merger;
(iii) (x) declare, set aside or pay any dividends on, or make
any other distributions (whether in cash, stock or property) in
respect of, any of its capital stock, other than dividends or
distributions by a direct or indirect wholly owned Subsidiary of
Parents to its shareholders, (y) split, combine or reclassify any of
its capital stock or issue or authorize the issuance of any other
securities in respect of, in lieu of or in substitution for shares of
its capital stock or (z) purchase, redeem or otherwise acquire any
shares of its capital stock or any other securities thereof or any
rights, warrants or options to acquire any such shares or other
securities, except for purchases, redemptions or other acquisitions of
capital stock or other securities (1) required by the terms of any
Parent stock incentive plans in effect on the date hereof (such plans,
collectively, the "Parent Stock Plans") or (2) required by the terms
of any plans, arrangements or Contracts existing on the date hereof
between Parent or any of its Subsidiaries and any director or employee
of Parent or any of its Subsidiaries (to the extent complete and
accurate copies of which have been heretofore delivered to the
Company);
(iv) issue, deliver, sell or grant any shares of its capital
stock, any other voting securities or any securities convertible into,
or any rights, warrants or options to acquire, any such shares, voting
securities or convertible securities, or any "phantom" stock,
"phantom" stock rights, stock appreciation rights or stock based
performance units, including pursuant to Contracts as in effect on the
date hereof (other than the issuance of shares of Parent Common Stock
upon the exercise of all outstanding options to purchase shares of
Parent Common Stock or in connection with Parent stock based awards,
in each case in accordance with their terms on the date hereof), other
than (x) pursuant to any acquisition or similar agreements entered
into prior to the date of this Agreement (which in the aggregate
provide for the issuance of not more than 2,250,000 shares of Parent
Common Stock) or (y) in connection with any acquisitions permitted
under clause (v) of this Section 4.01(b);
(v) directly or indirectly acquire (x) by merging or
consolidating with, by purchasing a substantial portion of the assets
of, by making an investment in or capital contribution to, or by any
other manner, any person or division, business or equity interest of
any person that is material to Parent or (y) any asset or assets
material to Parent, except for (1) capital expenditures involving
consideration up to an aggregate amount not to exceed $250,000,000 and
(2) purchases of components, raw materials or supplies in the ordinary
course of business consistent with past practice;
(vi) (x) sell, lease, license, mortgage, sell and leaseback
or otherwise encumber or subject to any Lien or otherwise dispose of
any of its material properties or other material assets or any
interests therein (including securitizations), except for sales of
accounts receivable, inventory and used equipment in the ordinary
course of business consistent with past practice or (y) enter into,
modify or amend any lease of material property, except for
modifications or amendments that are not materially adverse to Parent
and its Subsidiaries, taken as a whole;
(vii) enter into, modify, amend or terminate any Contract or
waive, release or assign any material rights or claims thereunder,
which if so entered into, modified, amended, terminated, waived,
released or assigned would reasonably be expected to (A) have a Parent
Material Adverse Effect, (B) impair in any material respect the
ability of Parent to perform its obligations under this Agreement or
(C) prevent or materially impede, interfere with, hinder or delay the
consummation of the transactions contemplated by this Agreement;
(viii) except as required by GAAP, revalue any material
assets of Parent or any of its Subsidiaries or make any change in
accounting methods, principles or practices; or
(ix) authorize any of, or commit, resolve, propose or agree
to take any of, the foregoing actions.
(c) Other Actions. The Company, Parent and Sub shall not, and shall
not permit any of their respective Subsidiaries to, take any action that could
reasonably be expected to result in any of the conditions to the Merger set
forth in Article VI not being satisfied.
(d) Advice of Changes; Filings. The Company and Parent shall promptly
advise the other party orally and in writing if (i) any representation or
warranty made by it (and, in the case of Parent, made by Sub) contained in this
Agreement becomes untrue or inaccurate in a manner that would result in the
failure of the condition set forth in Section 6.02(a) or Section 6.03(a) or
(ii) it (and, in the case of Parent, Sub) fails to comply with or satisfy in
any material respect any covenant, condition or agreement to be complied with
or satisfied by it (and, in the case of Parent, Sub) under this Agreement;
provided, however, that no such notification shall affect the representations,
warranties, covenants or agreements of the parties (or remedies with respect
thereto) or the conditions to the obligations of the parties under this
Agreement. The Company and Parent shall, to the extent permitted by Law,
promptly provide the other with copies of all filings made by such party with
any Governmental Entity in connection with this Agreement and the transactions
contemplated by this Agreement, other than the portions of such filings that
include confidential or proprietary information not directly related to the
transactions contemplated by this Agreement.
(e) Certain Tax Matters. During the period from the date of this
Agreement to the Effective Time, the Company shall, and shall cause each of its
Subsidiaries to (A) timely file all material tax returns (taking into account
any applicable extensions) required to be filed by or on behalf of each such
entity; (B) timely pay all material taxes due and payable; (C) accrue a reserve
in the books and records and financial statements of any such entity in
accordance with past practice for all taxes payable but not yet due; (D)
promptly notify Parent of any material suit, claim, action, investigation,
audit or similar proceeding (collectively, "Actions") pending against or with
respect to the Company or any of its Subsidiaries in respect of any amount of
tax and not settle or compromise any tax liability in excess of $10 million for
individual claims, or $50 million in the aggregate, without Parent's prior
written consent, which shall not be unreasonably withheld; (E) not make any
material tax election, other than with Parent's prior written consent or other
than in the ordinary course of business consistent with past practice; and (F)
cause all existing tax sharing agreements, tax indemnity agreements and similar
agreements, arrangements or practices to which the Company or any of its
Subsidiaries is or may be a party or by which the Company or any of its
Subsidiaries is or may otherwise be bound to be terminated as of the Closing
Date so that after such date neither the Company nor any of its Subsidiaries
shall have any further rights or liabilities thereunder. Any tax returns
described in this Section 4.01(d) shall be complete and correct in all material
respects and shall be prepared on a basis consistent with the past practice of
the Company and in a manner that does not distort taxable income, including by
deferring income or accelerating deductions. The Company shall notify Parent
upon the filing of any such material tax return and shall make such tax returns
available to Parent.
SECTION 4.02. No Solicitation. (a) The Company shall not, nor shall it
authorize or permit any of its Subsidiaries or any of their respective
directors, officers or employees or any investment banker, financial advisor,
attorney, accountant or other advisor, agent or representative (collectively,
"Representatives") retained by it or any of its Subsidiaries to, directly or
indirectly through another person, (i) solicit, initiate or knowingly
encourage, or take any other action designed to, or which could reasonably be
expected to, facilitate, any Takeover Proposal or (ii) enter into, continue or
otherwise participate in any discussions or negotiations regarding, or furnish
to any person any information, or otherwise cooperate in any way with, any
Takeover Proposal. Without limiting the foregoing, it is agreed that any
violation of the restrictions set forth in the preceding sentence by any
Representative of the Company or any of its Subsidiaries shall be a breach of
this Section 4.02(a) by the Company. The Company shall, and shall cause its
Subsidiaries to, immediately cease and cause to be terminated all existing
discussions or negotiations with any person conducted heretofore with respect
to any Takeover Proposal and request the prompt return or destruction of all
confidential information previously furnished. Notwithstanding the foregoing,
at any time prior to obtaining the Company Shareholder Approval, in response to
a bona fide written Takeover Proposal that the Board of Directors of the
Company reasonably determines (after consultation with outside counsel and a
financial advisor of nationally recognized reputation) constitutes or is
reasonably likely to lead to a Superior Proposal, and which Takeover Proposal
was not solicited after the date hereof and was made after the date hereof and
did not otherwise result from a breach of this Section 4.02(a), the Company
may, subject to compliance with Section 4.02(c), (x) furnish information with
respect to the Company and its Subsidiaries to the person making such Takeover
Proposal (and its Representatives) pursuant to a customary confidentiality
agreement not less restrictive to such person than the confidentiality
provisions of the Confidentiality Agreement, provided that all such information
has previously been provided to Parent or is provided to Parent prior to or
substantially concurrent with the time it is provided to such person, and (y)
participate in discussions or negotiations with the person making such Takeover
Proposal (and its Representatives) regarding such Takeover Proposal.
The term "Takeover Proposal" means any inquiry, proposal or offer from
any person relating to, or that could reasonably be expected to lead to, any
direct or indirect acquisition or purchase, in one transaction or a series of
transactions, of assets (including equity securities of any Subsidiary of the
Company) or businesses that constitute 15% or more of the revenues, net income
or assets of the Company and its Subsidiaries, taken as a whole, or 15% or more
of any class of equity securities of the Company, any tender offer or exchange
offer that if consummated would result in any person beneficially owning 15% or
more of any class of equity securities of the Company, or any merger,
consolidation, business combination, recapitalization, liquidation,
dissolution, joint venture, binding share exchange or similar transaction
involving the Company or any of its Subsidiaries pursuant to which any person
or the shareholders of any person would own 15% or more of any class of equity
securities of the Company or of any resulting parent company of the Company, in
each case other than the transactions contemplated by this Agreement.
The term "Superior Proposal" means any bona fide offer made by a third
party that if consummated would result in such person (or its shareholders)
owning, directly or indirectly, more than 80% of the shares of Company Common
Stock then outstanding (or of the shares of the surviving entity in a merger or
the direct or indirect parent of the surviving entity in a merger) or all or
substantially all the assets of the Company, which the Board of Directors of
the Company reasonably determines (after consultation with a financial advisor
of nationally recognized reputation) to be (i) more favorable to the
shareholders of the Company from a financial point of view than the Merger
(taking into account all the terms and conditions of such proposal and this
Agreement (including any changes to the financial terms of this Agreement
proposed by Parent in response to such offer or otherwise)) and (ii) reasonably
capable of being completed, taking into account all financial, legal,
regulatory and other aspects of such proposal.
(b) Neither the Board of Directors of the Company nor any committee
thereof shall (i) (A) withdraw (or modify in a manner adverse to Parent), or
publicly propose to withdraw (or modify in a manner adverse to Parent), the
adoption or recommendation by such Board of Directors or any such committee
thereof of this Agreement, the Merger or the other transactions contemplated by
this Agreement or (B) adopt or recommend, or propose publicly to adopt or
recommend, any Takeover Proposal (any action described in this clause (i) being
referred to as a "Company Adverse Recommendation Change") or (ii) adopt or
recommend, or publicly propose to adopt or recommend, or allow the Company or
any of its Subsidiaries to execute or enter into, any letter of intent,
memorandum of understanding, agreement in principle, merger agreement,
acquisition agreement, option agreement, joint venture agreement, partnership
agreement or other similar Contract constituting or related to, or that is
intended to or could reasonably be expected to lead to, any Takeover Proposal
(other than a confidentiality agreement referred to in Section 4.02(a)) (an
"Acquisition Agreement"). Notwithstanding the foregoing, at any time prior to
obtaining the Company Shareholder Approval and subject to Section 4.02(c), the
Board of Directors of the Company may (x) make a Company Adverse Recommendation
Change if the Board of Directors of the Company determines in good faith (after
consultation with outside counsel and a financial advisor of nationally
recognized reputation) that (A) a Parent Material Adverse Effect has occurred
and (B) as a result thereof such action is consistent with their fiduciary
duties under applicable Laws or (y) in response to a Takeover Proposal that the
Board reasonably determines (after consultation with outside counsel and a
financial advisor of nationally recognized reputation) constitutes a Superior
Proposal and that was unsolicited and made after the date hereof and that did
not otherwise result from a breach of this Section 4.02, (1) make a Company
Adverse Recommendation Change or (2) cause the Company to terminate this
Agreement and concurrently with or after such termination enter into an
Acquisition Agreement; provided, however, that the Company shall not be
entitled to exercise its right to make a Company Adverse Recommendation Change
or terminate this Agreement pursuant to clause (y) until after the fifth
business day following Parent's receipt of written notice (a "Notice of
Superior Proposal") from the Company advising Parent that the Board of
Directors of the Company intends to take such action and specifying the reasons
therefor, including the terms and conditions of any Superior Proposal that is
the basis of the proposed action by the Board of Directors (it being understood
and agreed that any amendment to the financial terms or any other material term
of such Superior Proposal shall require a new Notice of Superior Proposal and a
new five business day period). In determining whether to make a Company Adverse
Recommendation Change or to cause the Company to so terminate this Agreement,
the Board of Directors of the Company shall take into account any changes to
the financial terms of this Agreement proposed by Parent in response to a
Notice of Superior Proposal or otherwise.
(c) In addition to the obligations of the Company set forth in
paragraphs (a) and (b) of this Section 4.02, the Company shall promptly advise
Parent orally and in writing (i) of any Takeover Proposal, the material terms
and conditions of any such Takeover Proposal (including any changes thereto)
and the identity of the person making any such Takeover Proposal and (ii) if
the Board of Directors of the Company is considering, or has decided to
consider, whether any change, effect, event, occurrence, state of facts or
development constitutes a Parent Material Adverse Effect. The Company shall (x)
keep Parent fully informed in all material respects of the status and details
(including any change to the terms thereof) of any Takeover Proposal, (y)
provide to Parent as soon as practicable after receipt or delivery thereof
copies of all correspondence and other written material sent or provided to the
Company or any of its Subsidiaries from any person that describes any of the
terms or conditions of any Takeover Proposal and (z) keep Parent fully informed
in all material respects of the status and details of any determination by the
Company's Board of Directors with respect to a potential Parent Material
Adverse Effect.
(d) Nothing contained in this Section 4.02 shall prohibit the Company
from (x) taking and disclosing to its shareholders a position contemplated by
Rule 14e-2(a) under the Exchange Act or making a statement required under Rule
14a-9 under the Exchange Act or (y) making any disclosure to the shareholders
of the Company that is required by applicable Law; provided, however, that in
no event shall the Company or its Board of Directors or any committee thereof
take, or agree or resolve to take, any action prohibited by Section 4.02(b) (it
being understood that any accurate disclosure of factual information to the
shareholders of the Company that is required to be made to such shareholders
under applicable federal securities Laws shall not be considered a modification
prohibited by clause (i)(A) of Section 4.02(b)).
ARTICLE V
Additional Agreements
---------------------
SECTION 5.01. Preparation of the Form S-4 and the Proxy Statement;
Shareholders' Meetings. (a) As promptly as practicable after the execution of
this Agreement, (i) Parent and the Company shall prepare and file with the SEC
the proxy statement (as amended or supplemented from time to time, the "Proxy
Statement") to be sent to the shareholders of the Company relating to the
meeting of the Company's shareholders (the "Company Shareholders' Meeting") to
be held to consider approval of this Agreement and to be sent to the
stockholders of Parent relating to the meeting of Parent's stockholders to be
held to vote on the Amendment and Share Issuance (the "Parent Stockholders'
Meeting" and, together with the Company Shareholders' Meeting, the
"Shareholders' Meetings") and (ii) Parent shall prepare and file with the SEC a
registration statement on Form S 4 (as amended or supplemented from time to
time, the "Form S-4"), in which the Proxy Statement will be included as a
prospectus, in connection with the registration under the Securities Act of the
shares of Parent Common Stock to be issued in the Share Issuance. Each of
Parent and the Company shall use its reasonable best efforts to have the Form
S-4 declared effective under the Securities Act as promptly as practicable
after such filing, and, prior to the effective date of the Form S-4, Parent
shall take any action (other than qualifying to do business in any jurisdiction
in which it is not now so qualified or filing a general consent to service of
process) required to be taken under any applicable state securities Laws in
connection with the issuance of shares of Parent Common Stock in the Merger.
Each of Parent and the Company shall furnish all information as may be
reasonably requested by the other in connection with any such action and the
preparation, filing and distribution of the Form S-4 and the Proxy Statement.
As promptly as practicable after the Form S-4 shall have become effective, each
of Parent and the Company shall use its reasonable best efforts to cause the
Proxy Statement to be mailed to its respective shareholders and stockholders.
No filing of, or amendment or supplement to, the Form S-4 will be made by
Parent, and no filing of, or amendment or supplement to, the Proxy Statement
will made by the Company, in each case without providing the other party a
reasonable opportunity to review and comment thereon. If at any time prior to
the Effective Time any information relating to the Company or Parent, or any of
their respective Affiliates, directors or officers, should be discovered by the
Company or Parent which should be set forth in an amendment or supplement to
either the Form S-4 or the Proxy Statement, so that either such document would
not include any misstatement of a material fact or omit to state any material
fact necessary to make the statements therein, in light of the circumstances
under which they are made, not misleading, the party which discovers such
information shall promptly notify the other parties hereto and an appropriate
amendment or supplement describing such information shall be promptly filed
with the SEC and, to the extent required by Law, disseminated to the
shareholders of the Company. The parties shall notify each other promptly of
the time when the Form S-4 has become effective, of the issuance of any stop
order or suspension of the qualification of the Parent Common Stock issuable in
connection with the Merger for offering or sale in any jurisdiction, or of the
receipt of any comments from the SEC or the staff of the SEC and of any request
by the SEC or the staff of the SEC for amendments or supplements to the Proxy
Statement or the Form S-4 or for additional information and shall supply each
other with copies of (i) all correspondence between it or any of its
Representatives, on the one hand, and the SEC or the staff of the SEC, on the
other hand, with respect to the Proxy Statement, the Form S-4 or the Merger and
(ii) all orders of the SEC relating to the Form S-4.
(b) The Company shall use its reasonable best efforts to, as promptly
as practicable, establish a record date for, duly call, give notice of, convene
and hold the Company Shareholders' Meeting solely for the purpose of obtaining
the Company Shareholder Approval. Subject to Section 4.02, the Company shall,
through its Board of Directors, recommend to its shareholders approval of this
Agreement and shall include such recommendation in the Proxy Statement. Without
limiting the generality of the foregoing, but subject to the terms of this
Agreement, the Company's obligations pursuant to the first sentence of this
Section 5.01(b) shall not be affected by the commencement, public proposal,
public disclosure or communication to the Company of any Takeover Proposal.
(c) Parent shall use its reasonable best efforts to, as promptly as
practicable, establish a record date for, duly call, give notice of, convene
and hold the Parent Stockholders' Meeting solely for the purpose of obtaining
the Parent Stockholder Approval. Parent shall, through its Board of Directors,
recommend to its stockholders that they vote in favor of the Amendment and
Share Issuance and shall include such recommendation in the Proxy Statement
(the "Parent Recommendation"). The Board of Directors of Parent shall not
withdraw (or modify in a manner adverse to the Company), or publicly propose to
withdraw (or modify in a manner adverse to the Company), the Parent
Recommendation; provided, however, that none of the following shall constitute
a breach of this Section 5.01(c): (1) the disclosure by the Board of Directors
of Parent or Parent of any factual information to the stockholders of Parent
that is required to be made to such stockholders under applicable Law or (ii)
the disclosure to such stockholders of any conclusions that would have been
made by the Board of Directors of Parent based on such information had such
information existed on or prior to the date of this Agreement.
SECTION 5.02. Access to Information; Confidentiality.
(a) To the extent permitted by applicable Law, the Company shall
afford to Parent, and to Parent's officers, employees, accountants, counsel,
financial advisors and other Representatives, reasonable access (including for
the purpose of coordinating integration activities and transition planning with
the employees of the Company and its Subsidiaries) during normal business hours
and upon reasonable prior notice to the Company during the period prior to the
Effective Time or the termination of this Agreement to all its and its
Subsidiaries' properties, books, Contracts, commitments, personnel and records,
but only to the extent that such access does not unreasonably interfere with
the business or operations of the Company and its Subsidiaries, and, during
such period, the Company shall furnish promptly to Parent (a) a copy of each
report, schedule, registration statement and other document filed by it during
such period pursuant to the requirements of Federal or state securities Laws
and (b) all other information concerning its and its Subsidiaries' business,
properties and personnel as Parent may reasonably request; provided, however,
that the Company shall not be required to (or to cause any of its Subsidiaries
to) so confer, afford such access or furnish such copies or other information
to the extent that doing so would result in the loss of attorney-client
privilege (provided that the Company shall use its reasonable best efforts to
allow for such access or disclosure in a manner that does not result in a loss
of attorney-client privilege). Except for disclosures expressly permitted by
the terms of the Confidentiality Agreement dated as of December 7, 2005 between
Parent and the Company (as it may be amended from time to time, the
"Confidentiality Agreement"), Parent shall hold, and shall cause its officers,
employees, accountants, counsel, financial advisors and other Representatives
to hold, all information received from the Company, directly or indirectly, in
confidence in accordance with the Confidentiality Agreement. The
Confidentiality Agreement shall survive any termination of this Agreement.
Notwithstanding the terms of the Confidentiality Agreement, Parent and the
Company agree that until the earlier of the consummation of this Agreement or
the six month anniversary of the date of the termination of this Agreement, as
applicable, each party and its respective Subsidiaries shall not, without the
other party's prior written consent, directly or indirectly solicit for
employment (other than through advertising in newspapers or periodicals of
general circulation or recruiters' searches, in each case not specifically
directed at the other party's employees) any executive officer of the other
party or any other person currently employed by the other party or any of its
Subsidiaries with whom it has contact or who is identified to such party in
connection with discussions between the parties in connection with entering
into this Agreement. No investigation pursuant to this Section 5.02 or
information provided or received by any party hereto pursuant to this Agreement
will affect any of the representations or warranties of the parties hereto
contained in this Agreement or the conditions hereunder to the obligations of
the parties hereto.
(b) To the extent permitted by applicable Law, Parent shall afford to
the Company and its Representatives reasonable access to Parent's personnel and
records (i) on a basis consistent with the Company's access to such personnel
and records prior to the date hereof in connection with the Company's due
diligence review of Parent and its Subsidiaries in connection with the
transactions contemplated hereby and (ii) to the extent reasonably necessary
for the Company to determine whether the conditions set forth in Section 6.03
are satisfied.
SECTION 5.03. Reasonable Best Efforts. Upon the terms and subject to
the conditions set forth in this Agreement, each of the parties agrees to use
its reasonable best efforts to take, or cause to be taken, all actions, and to
do, or cause to be done, and to assist and cooperate with the other parties in
doing, all things necessary to consummate and make effective, in the most
expeditious manner practicable, the Merger and the other transactions
contemplated by this Agreement, including using reasonable best efforts to
accomplish the following: (i) the taking of all acts necessary to cause the
conditions to Closing to be satisfied as promptly as practicable, (ii) the
obtaining of all necessary actions or nonactions, waivers, consents and
approvals from Governmental Entities and the making of all necessary
registrations and filings (including filings with Governmental Entities) and
the taking of all steps as may be necessary to obtain an approval or waiver
from, or to avoid an action or proceeding by, any Governmental Entity, (iii)
the avoidance of each and every impediment under any antitrust, merger control,
competition or trade regulation Law that may be asserted by any Governmental
Entity with respect to the Merger so as to enable the Closing to occur as soon
as reasonably possible and (iv) the obtaining of all necessary consents,
approvals or waivers from third parties, including any such consents, approvals
or waivers required in connection with any Divestiture. In connection with and
without limiting the foregoing, the Company and Parent shall (A) duly file with
the U.S. Federal Trade Commission and the Antitrust Division of the Department
of Justice the notification and report form (the "HSR Filing") required under
the HSR Act and (B) duly make all notifications and other filings required (i)
under the EC Merger Regulation (together with the HSR Filings, the "Antitrust
Filings") or (ii) under any other applicable competition, merger control,
antitrust or similar Law that the Company and Parent deem advisable or
appropriate, in each case with respect to the transactions contemplated by this
Agreement and as promptly as practicable. The Antitrust Filings shall be in
substantial compliance with the requirements of the HSR Act, the EC Merger
Regulation or other Laws, as applicable. Each party shall cooperate with the
other party to the extent necessary to assist the other party in the
preparation of its Antitrust Filings and, if requested, to promptly amend or
furnish additional information thereunder. Each party shall use its reasonable
best efforts to furnish to each other all information required for any filing,
form, declaration, notification, registration and notice, other than
confidential or proprietary information not directly related to the
transactions contemplated by this Agreement, and to keep the other party
reasonably informed with respect to the status of each clearance, approval or
waiver sought from a Governmental Entity in connection with the transactions
contemplated by this Agreement and the material communications between such
party and such Governmental Entity. Each party shall without limitation: (1)
promptly notify the other of, and if in writing, furnish the other with copies
of (or, in the case of oral communications, advise the other of) any
communications from or with any Governmental Entity with respect to the
transactions contemplated by this Agreement, (2) permit the other to review and
discuss in advance, and consider in good faith the views of the other in
connection with, any proposed written or any oral communication with any such
Governmental Entity, (3) not participate in any meeting or have any
communication with any such Governmental Entity unless it has given the other
an opportunity to consult with it in advance and to the extent permitted by
such Governmental Entity gives the other the opportunity to attend and
participate therein, (4) furnish the other with copies of all filings and
communications between it and any such Governmental Entity with respect to the
transactions contemplated by this Agreement, and (5) furnish the other with
such necessary information and reasonable assistance as the other may
reasonably request in connection with its preparation of necessary filings or
submissions of information to any such Governmental Entity. Such materials and
the information contained therein shall be given only to the outside legal
counsel of the other and will not be disclosed by such outside counsel to
employees, officers, or directors of their client unless express permission is
obtained in advance from the disclosing party or its legal counsel. Neither
party shall, nor shall it permit any of its Subsidiaries to, acquire or agree
to acquire any business, person or division thereof, or otherwise acquire or
agree to acquire any assets if the entering into of a definitive agreement
relating to or the consummation of such acquisition, could reasonably be
expected to materially increase the risk of not obtaining the applicable
clearance, approval or waiver from an Antitrust Authority with respect to the
transactions contemplated by this Agreement. The Company and its Board of
Directors shall (1) use reasonable best efforts to ensure that no state
takeover Law or similar Law is or becomes applicable to this Agreement, the
Merger or any of the other transactions contemplated by this Agreement and (2)
if any state takeover Law or similar Law becomes applicable to this Agreement,
the Merger or any of the other transactions contemplated by this Agreement, use
reasonable best efforts to ensure that the Merger and the other transactions
contemplated by this Agreement may be consummated as promptly as practicable on
the terms contemplated by this Agreement and otherwise to minimize the effect
of such Law on this Agreement, the Merger and the other transactions
contemplated by this Agreement. Notwithstanding the foregoing or any other
provision of this Agreement, Parent and its Affiliates shall be required to
agree to Divestitures to one or more purchasers approved by the Federal Trade
Commission and the European Commission and in a manner approved by such
entities of such assets, including technologies, that currently constitute: (a)
the vascular intervention and endovascular businesses of the Company; (b) all
assets of Parent that relate to cardiac ablation and beating heart surgery
products, including, but not limited to, Parent's equity and equity option
interests in Endoscopic Technologies Inc., as well as the Company's cardiac
ablation and beating heart surgery assets collaterally impacted by the
Divestitures referred to in section (a) above; and (c) all of Parent's equity
interests in Cameron Health, Inc. (it being agreed that Parent will not
exercise its option to acquire any additional equity interests in Cameron
Health, Inc. without obtaining the prior consent of the Federal Trade
Commission). For purposes of this Agreement, a "Divestiture" of any asset shall
mean (i) any sale, transfer, license, separate holding, divestiture or other
disposition, or any prohibition of, or any limitation on, the acquisition,
ownership, operation, effective control or exercise of full rights of
ownership, of such asset or (ii) the termination or amendment of any existing
relationships and contractual rights. It is agreed and understood that, for
purposes of this Agreement, a Divestiture of a business unit, product line or
development program may include (x) the transfer of any and all assets
primarily relating to that business unit or to the research, development,
manufacture, marketing or sale of that product line or development program and
(y) licensing or otherwise making available assets that are related, but not
primarily, to that business unit, product line or development program; provided
that Parent, the Company or their Affiliates will be entitled to a license back
of, or otherwise have made available to them, transferred assets to the extent
that such assets otherwise relate to other retained businesses, product lines
or development programs of Parent, the Company or any of their respective
Affiliates. It is understood and agreed by the parties that, for purposes of
this Agreement, the effect of any Divestiture required to be made pursuant to
this Section 5.03 shall not, directly, or indirectly, be deemed to result in a
breach of the representations and warranties set forth herein. In implementing
Section 5.03 of this Agreement, Parent shall use reasonable best efforts to
obtain any required consents, approvals and waivers from third parties in
connection with any Divestitures.
SECTION 5.04. Company Stock Options; ESPP. (a) As soon as practicable
following the date of this Agreement, the Board of Directors of the Company
(or, if appropriate, any committee thereof administering the Company Stock
Plans) shall adopt such resolutions or take such other actions as may be
required to effect the following:
(i) each Company Stock Option outstanding immediately prior
to the Effective Time shall be amended and converted into an option to acquire,
on the same terms and conditions as were applicable under such Company Stock
Option, the number of shares of Parent Common Stock (rounded down to the
nearest whole share) equal to the sum of (x) the product of (A) the number of
shares of Company Common Stock subject to such Company Stock Option and (B) the
Exchange Ratio and (y) the product of (A) the number of shares of Company
Common Stock subject to such Company Stock Option and (B) the Cash Portion
Option Exchange Multiple, at an exercise price per share of Parent Common Stock
(rounded up to the nearest whole cent) equal to the quotient obtained by
dividing (1) the aggregate exercise price for the shares of Company Common
Stock subject to such Company Stock Option by (2) the aggregate number of
shares of Parent Common Stock to be subject to such Company Stock Option after
giving effect to the adjustments in this clause (i) (each, as so adjusted, an
"Adjusted Option"); and
(ii) make such other changes to the Company Stock Plans as
Parent and the Company may agree are appropriate to give effect to the Merger.
(b) As soon as practicable following the date of this Agreement, the
Board of Directors of the Company (or, if appropriate, any committee of the
Board of Directors of the Company administering the ESPP), shall adopt such
resolutions or take such other actions as may be required to provide that with
respect to the ESPP (i) participants may not increase their payroll deductions
or purchase elections from those in effect on the date of this Agreement, (ii)
each participant's outstanding right to purchase shares of Company Common Stock
under the ESPP shall terminate on the day immediately prior to the day on which
the Effective Time occurs, provided that all amounts allocated to each
participant's account under the ESPP as of such date shall thereupon be used to
purchase from the Company whole shares of Company Common Stock at the
applicable price determined under the terms of the ESPP for the then
outstanding offering periods using such date as the final purchase date for
each such offering period, and (iii) the ESPP shall terminate immediately
following such purchases of Company Common Stock.
(c) The Company shall ensure that following the Effective Time, no
holder of a Company Stock Option (or former holder of a Company Stock Option)
or any participant in any Company Stock Plan, Company Benefit Plan or Company
Benefit Agreement shall have any right thereunder to acquire any capital stock
of the Company or the Surviving Corporation or any other equity interest
therein (including "phantom" stock or stock appreciation rights).
(d) The adjustments provided in Section 5.04(a) with respect to any
Company Stock Option to which Section 421(a) of the Code applies shall be and
are intended to be effected in a manner which is consistent with Section 424(a)
of the Code. As soon as practicable following the Effective Time, Parent shall
deliver to the holders of Adjusted Options appropriate notices setting forth
such holders' rights pursuant to the respective Company Stock Plans and the
Contracts evidencing the grants of such Adjusted Options, which shall provide,
among other things, that such Adjusted Options and Contracts have been assumed
by Parent and shall continue in effect on the same terms and conditions
(subject to the adjustments required by this Section 5.04 after giving effect
to the Merger).
(e) Except as otherwise contemplated by this Section 5.04 and except
to the extent required under the respective terms of the Adjusted Options, all
restrictions or limitations on transfer and vesting with respect to Adjusted
Options, to the extent that such restrictions or limitations shall not have
already lapsed, and all other terms thereof, shall remain in full force and
effect with respect to such Adjusted Options after giving effect to the Merger
and the assumption by Parent as set forth above.
(f) As soon as practicable following the Effective Time, Parent shall
prepare and file with the SEC a registration statement on Form S-8 (or another
appropriate form) registering shares of Parent Common Stock subject to issuance
upon the exercise of the Adjusted Options. The Company shall cooperate with,
and assist Parent in the preparation of, such registration statement. Parent
shall keep such registration statement effective (and to maintain the current
status of the prospectus required thereby) for so long as any Adjusted Options
remain outstanding.
(g) For purposes of this Agreement, "Cash Portion Option Exchange
Multiple" means the quotient obtained by dividing (x) the Cash Portion by (y)
the Average Parent Stock Price.
(h) For purposes of this Agreement, "Average Parent Stock Price" means
the average of the volume weighted averages of the trading prices of Parent
Common Stock, as such price is reported on the NYSE Composite Transaction Tape
(as reported by Bloomberg Financial Markets or such other source as the parties
shall agree in writing), for the 15 trading days ending on the third trading
day immediately preceding the Effective Time.
(i) Prior to the Effective Time, each of Parent and the Company shall
use reasonable best efforts to cause any dispositions of Company Common Stock
(including derivative securities with respect to Company Common Stock) or
acquisitions of Parent Common Stock (including derivative securities with
respect to Parent Common Stock) resulting from the transactions contemplated by
this Agreement by each individual who is subject to the reporting requirements
of Section 16(a) of the Exchange Act with respect to the Company to be exempt
under Rule 16b-3 promulgated under the Exchange Act, such efforts to include
all steps required be taken in accordance with the No-Action Letter dated
January 12, 1999, issued by the SEC to Skadden, Arps, Slate, Xxxxxxx & Xxxx
LLP.
SECTION 5.05. Indemnification, Exculpation and Insurance. (a) Parent
shall cause the Surviving Corporation to assume the obligations with respect to
all rights to indemnification and exculpation from liabilities, including
advancement of expenses, for acts or omissions occurring at or prior to the
Effective Time now existing in favor of the current or former directors or
officers of the Company as provided in the Company Articles, the Company
By-laws or any indemnification Contract between such directors or officers and
the Company (in each case, as in effect on the date hereof), without further
action, as of the Effective Time and such obligations shall survive the Merger
and shall continue in full force and effect in accordance with their terms.
(b) In the event that the Surviving Corporation or any of its
successors or assigns (i) consolidates with or merges into any other person and
is not the continuing or surviving corporation or entity of such consolidation
or merger or (ii) transfers or conveys all or substantially all of its
properties and other assets to any person, then, and in each such case, Parent
shall cause proper provision to be made so that the successors and assigns of
the Surviving Corporation shall expressly assume the obligations set forth in
this Section 5.05. In the event (A) the Surviving Corporation transfers any
material portion of its assets, in a single transaction or in a series of
transactions or (B) Parent takes any action to materially impair the financial
ability of the Surviving Corporation to satisfy the obligations referred to in
Section 5.05(a), Parent will either guarantee such obligations or take such
other action to insure that the ability of the Surviving Corporation, legal and
financial, to satisfy such obligations will not be diminished in any material
respect.
(c) For six years after the Effective Time, Parent shall maintain
(directly or indirectly through the Company's existing insurance programs) in
effect the Company's current directors' and officers' liability insurance in
respect of acts or omissions occurring at or prior to the Effective Time,
covering each person currently covered by the Company's directors' and
officers' liability insurance policy (a complete and accurate copy of which has
been heretofore delivered to Parent), on terms with respect to such coverage
and amounts no less favorable than those of such policy in effect on the date
hereof; provided, however, that Parent may (i) substitute therefor policies of
Parent containing terms with respect to coverage (including as coverage relates
to deductibles and exclusions) and amounts no less favorable to such directors
and officers or (ii)request that the Company obtain such extended reporting
period coverage under its existing insurance programs (to be effective as of
the Effective Time); provided, further, that in satisfying its obligation under
this Section 5.05(c), neither the Company nor Parent shall be obligated to pay
more than in the aggregate the amount set forth in Section 5.05(c) of the
Company Disclosure Schedule to obtain such coverage. It is understood and
agreed that in the event such coverage cannot be obtained for such amount or
less in the aggregate, Parent shall only be obligated to provide such coverage
as may be obtained for such aggregate amount.
(d) The provisions of this Section 5.05 (i) are intended to be for the
benefit of, and will be enforceable by, each indemnified party, his or her
heirs and his or her representatives and (ii) are in addition to, and not in
substitution for, any other rights to indemnification or contribution that any
such person may have by Contract or otherwise.
SECTION 5.06. Fees and Expenses. (a) Except as provided in paragraphs
(b), (c) and (d) of this Section 5.06, all fees and expenses incurred in
connection with this Agreement, the Merger and the other transactions
contemplated by this Agreement shall be paid by the party incurring such fees
or expenses, whether or not the Merger is consummated, except that expenses
incurred in connection with the printing and mailing of the Form S-4 and the
Proxy Statement shall be shared equally by Parent and the Company.
(b) In the event that (i) this Agreement is terminated by Parent
pursuant to Section 7.01(e) (other than as a result of a Company Adverse
Recommendation Change following the occurrence of a Parent Material Adverse
Effect), (ii) this Agreement is terminated by the Company pursuant to Section
7.01(f) or (iii) (A) prior to the obtaining of the Company Shareholder
Approval, a Takeover Proposal shall have been made to the Company or shall have
been made directly to the shareholders of the Company generally or shall have
otherwise become publicly known or any person shall have publicly announced an
intention (whether or not conditional) to make a Takeover Proposal, (B)
thereafter this Agreement is terminated by either Parent or the Company
pursuant to Section 7.01(b)(i) (but only if a vote to obtain the Company
Shareholder Approval is not held or the Company Shareholders' Meeting has not
been held) or Section 7.01(b)(iii) and (C) within 12 months after such
termination, the Company enters into a definitive Contract to consummate, or
consummates, the transactions contemplated by any Takeover Proposal, then the
Company shall pay Parent a fee equal to $800,000,000 (the "Termination Fee") by
wire transfer of same-day funds on the first business day following (x) in the
case of a payment required by clause (i) or (ii) above, the date of termination
of this Agreement and (y) in the case of a payment required by clause (iii)
above, the date of the first to occur of the events referred to in clause
(iii)(C). For purposes of clause (iii)(C) of the immediately preceding sentence
only, the term "Takeover Proposal" shall have the meaning assigned to such term
in Section 4.02(a) except that all references to "15%" therein shall be deemed
to be references to "35%".
(c) In the event that (i) the Parent Stockholder Approval shall not
have been obtained and this Agreement is terminated thereafter by either party,
(ii) the Parent Stockholders' Meeting is not held and this Agreement is
terminated pursuant to Section 7.01(b)(i), or (iii)(A) this Agreement is
terminated pursuant to Section 7.01(b)(i), 7.01(b)(ii) or 7.01(c)(ii) and (B)
at the time of any such termination all of the conditions set forth in Article
VI have been satisfied or waived except for any of the conditions set forth in
Section 6.01(b), 6.01(c), 6.01(d), 6.02(c) or 6.02(d) (in the case of Sections
6.01(d), 6.02(c) and 6.02(d), only to the extent that the conditions set forth
therein have not been satisfied due to a suit, action or proceeding by any
national Governmental Entity or the imposition of a Restraint, in either case
relating to competition, merger control, antitrust or similar Laws), then, in
any such event set forth in clauses (i) through (iii) above, Parent shall pay
to the Company a fee equal to $800,000,000 (the "Company Termination Fee") by
wire transfer of same-day funds on the first business day following the date of
such termination of this Agreement.
(d) The Company and Parent acknowledge and agree that the agreements
contained in Sections 5.06(b) and 5.06(c) are an integral part of the
transactions contemplated by this Agreement, and that, without these
agreements, the Company and Parent would not enter into this Agreement;
accordingly, (i) if the Company fails promptly to pay the amount due pursuant
to Section 5.06(b), and, in order to obtain such payment, Parent commences a
suit that results in a judgment against the Company for the Termination Fee,
the Company shall pay to Parent its costs and expenses (including attorneys'
fees and expenses) in connection with such suit, together with interest on the
amount of the Termination Fee from the date such payment was required to be
made until the date of payment at the prime rate of Citibank, N.A., in effect
on the date such payment was required to be made; and (ii) if Parent fails
promptly to pay the amounts due pursuant to Section 5.06(c), and, in order to
obtain such payment, the Company commences a suit that results in a judgment
against Parent for the Company Termination Fee Parent shall pay to the Company
its costs and expenses (including attorneys' fees and expenses) in connection
with such suit, together with interest on the amount of the Company Termination
Fee from the date such payment was required to be made until the date of
payment at the prime rate of Citibank, N.A., in effect on the date such payment
was required to be made.
SECTION 5.07. Public Announcements. Except with respect to any Company
Adverse Recommendation Change made in accordance with the terms of this
Agreement, Parent and the Company shall consult with each other before issuing,
and give each other the opportunity to review and comment upon, any press
release or other public statements with respect to the transactions
contemplated by this Agreement, including the Merger, and shall not issue any
such press release or make any such public statement prior to such
consultation, except as such party may reasonably conclude may be required by
applicable Law, court process or by obligations pursuant to any listing
agreement with any national securities exchange or national securities
quotation system. The parties agree that the initial press release to be issued
with respect to the transactions contemplated by this Agreement shall be in the
form heretofore agreed to by the parties.
SECTION 5.08. Affiliates. As soon as practicable after the date of
this Agreement, the Company shall deliver to Parent a letter identifying all
persons who at the time this Agreement is submitted for adoption by the
shareholders of the Company may be deemed to be "affiliates" of the Company for
purposes of Rule 145 under the Securities Act. The Company shall use its
reasonable best efforts to cause each such person to deliver to Parent at least
30 days prior to the Closing Date a written agreement substantially in the form
attached as Exhibit B hereto.
SECTION 5.09. Stock Exchange Listing. To the extent Parent does not
issue or intend to issue treasury shares in the Merger or to holders of
Adjusted Options that are already listed, Parent shall use its reasonable best
efforts to cause the shares of Parent Common Stock to be issued in the Merger
and to holders of Adjusted Options to be promptly approved for listing on the
NYSE, subject to official notice of issuance, prior to the Closing Date.
SECTION 5.10. Shareholder Litigation. The Company shall give Parent
the opportunity to participate in the defense or settlement of any shareholder
litigation against the Company and/or its directors relating to the
transactions contemplated by this Agreement, and no such settlement shall be
agreed to without Parent's prior written consent.
SECTION 5.11. Employee Matters. (a) (i) For a period of twelve months
following the Effective Time, the employees of the Company and its Subsidiaries
who remain in the employment of the Surviving Corporation and its Subsidiaries
(the "Continuing Employees") shall receive employee benefits that in the
aggregate are substantially comparable to the employee benefits provided to
such employees immediately prior to the Effective Time; (ii) for the six-month
period immediately following the expiration of the twelve-month period
described in the preceding clause (i), the Continuing Employees shall receive
employee benefits that in the aggregate are substantially comparable to either
the employee benefits provided to such employees immediately prior to the
Effective Time or the employee benefits provided to similarly situated
employees of Parent and its Subsidiaries; and (iii) for a period of not less
than eighteen months following the Effective Time, the Continuing Employees
shall receive base salary or wage rates that are not less than those in effect
for such Continuing Employees immediately prior to the Effective Time; provided
that neither Parent nor the Surviving Corporation nor any of their Subsidiaries
shall have any obligation to issue, or adopt any plans or arrangements
providing for the issuance of, shares of capital stock, warrants, options,
stock appreciation rights or other rights in respect of any shares of capital
stock of any entity or any securities convertible or exchangeable into such
shares pursuant to any such plans or arrangements; provided, further, that no
plans or arrangements of the Company or any of its Subsidiaries providing for
such issuance shall be taken into account in determining whether employee
benefits are substantially comparable in the aggregate.
(b) Nothing contained herein shall be construed as requiring, and the
Company shall take no action that would have the effect of requiring, Parent or
the Surviving Corporation to continue any specific employee benefit plans or to
continue the employment of any specific person.
(c) Parent shall cause the Surviving Corporation to recognize the
service of each Continuing Employee as if such service had been performed with
Parent (i) for purposes of vesting (but not benefit accrual) under Parent's
defined benefit pension plan, (ii) for purposes of eligibility for vacation
under Parent's vacation program, (iii) for purposes of eligibility and
participation under any health or welfare plan maintained by Parent (other than
any post-employment health or post-employment welfare plan), (iv) for purposes
of eligibility for the company matching contribution under Parent's 401(k)
savings plan (it being understood that each Continuing Employee who was
participating in the Company's 401(k) savings plan immediately prior to
becoming eligible to participate in Parent's 401(k) savings plan shall be
immediately eligible for the company matching contribution under Parent's
401(k) savings plan) and (v) unless covered under another arrangement with or
of the Company, for benefit accrual purposes under Parent's severance plan (in
the case of each of clauses (i), (ii), (iii), (iv) and (v), solely to the
extent that Parent makes such plan or program available to employees of the
Surviving Corporation, it being Parent's current intention to do so), but not
for purposes of any other employee benefit plan of Parent.
(d) With respect to any welfare plan maintained by Parent in which
Continuing Employees are eligible to participate after the Effective Time,
Parent shall, and shall cause the Surviving Corporation to, (i) waive all
limitations as to preexisting conditions and exclusions with respect to
participation and coverage requirements applicable to such employees to the
extent such conditions and exclusions were satisfied or did not apply to such
employees under the welfare plans maintained by the Company prior to the
Effective Time and (ii) provide each Continuing Employee with credit for any
co-payments and deductibles paid prior to the Effective Time in satisfying any
analogous deductible or out-of-pocket requirements to the extent applicable
under any such plan.
(e) Subject to the provisions of Section 5.11(a) through (d), Parent
shall assume all obligations under and honor in accordance with their terms,
and shall cause the Surviving Corporation to honor in accordance with their
terms, the Company Benefit Plans and Company Benefit Agreements listed on
Section 5.11(e) of the Company Disclosure Schedule (as modified, if applicable,
as agreed between Parent and individual employees of the Company or its
Subsidiaries). Parent acknowledges and agrees that the Merger will constitute a
"change in control" within the meaning of the Company Benefit Plans and Company
Benefit Agreements which include a definition of such (or substantially
similar) concept, except to the extent otherwise agreed between Parent and
individual employees of the Company and its Subsidiaries.
(f) Notwithstanding the foregoing provisions of Section 5.11, the
provisions of Section 5.11(a), (c) and (d) shall apply only with respect to
Continuing Employees who are covered under Company Benefit Plans that are
maintained primarily for the benefit of employees employed in the United States
(including Continuing Employees regularly employed outside the United States to
the extent they participate in such Company Benefit Plans). With respect to
Continuing Employees not described in the preceding sentence, Parent shall, and
shall cause the Surviving Corporation and its Subsidiaries to, comply with all
applicable laws, directives and regulations relating to employees and employee
benefits matters applicable to such employees.
SECTION 5.12. Company Notes. Each of the Company, Parent and Sub shall
take each action required to be taken by such party pursuant to the Indenture
dated as of January 18, 1996, between the Company and Citibank, N.A., with
respect to the Company Notes, as necessary to consummate the Merger and the
other transactions contemplated by this Agreement in compliance therewith.
SECTION 5.13. Rights Agreement. The Board of Directors of the Company
shall take all further actions (in addition to those referred to in Section
3.01(v)) requested by Parent in order to render the Company Rights inapplicable
to the Merger and the other transactions contemplated by this Agreement. Except
as provided above with respect to the Merger and the other transactions
contemplated by this Agreement, the Board of Directors of the Company shall
not, without the prior written consent of Parent, amend, take any action with
respect to, or make any determination under, the Rights Agreement (including a
redemption of the Company Rights) to facilitate a Takeover Proposal.
SECTION 5.14. Termination Fee. The Company shall, within one business
day hereof, pay to J&J the full amount of the Parent Termination Fee (as
defined in the J&J Agreement) in accordance with Section 5.06(b)(ii) of the J&J
Agreement. Upon the payment of such fee by the Company in accordance with the
previous sentence, Parent shall, within one business day of receipt of written
notice of such payment, reimburse the Company for the full amount of such fee.
If this Agreement is terminated by Parent pursuant to Section 7.01(c)(i) or if
this Agreement is terminated in circumstances requiring payment of the
Termination Fee pursuant to Section 5.06(b), then the Company shall reimburse
Parent for the Parent Termination Fee, which reimbursement will be made by wire
transfer of same-day funds. Any such reimbursement by the Company shall be made
at the time of termination in the case of a termination pursuant to Section
7.01(c)(i) and at the time that the Termination Fee is paid to Parent in the
case of a termination of this Agreement in circumstances requiring payment of
the Termination Fee.
SECTION 5.15. Sale of Certain Assets Prior to Closing. (a) If
requested by Parent, the Company shall, immediately prior to the Closing,
assume and agree to perform all of Parent's obligations under the Transaction
Agreement (other than in respect of the equity issuance thereunder), including
that the Company will assume Parent's obligation thereunder to, and shall,
consummate the sale of the Assets to the Purchaser (as such terms are defined
in the Transaction Agreement) immediately prior to the Closing; provided,
however, that the Company shall have no obligation to assume and perform any
such obligations or to consummate the sale of the Assets unless all of the
conditions to the parties' respective obligations to consummate the Closing as
set forth in Article VI of this Agreement shall have been satisfied or (to the
extent permitted by applicable Law) waived, and each of Parent and Sub shall
have notified the Company, and the Company shall have notified Parent and Sub,
in writing that it is ready, willing and able to consummate the Closing.
(b) The Company shall promptly execute, acknowledge and deliver any
other assurances or documents, including any form of assignment and assumption
agreement, reasonably requested by Parent and necessary for the Company to
satisfy its obligations under clause (a) of this Section 5.15.
ARTICLE VI
Conditions Precedent
--------------------
SECTION 6.01. Conditions to Each Party's Obligation to Effect the
Merger. The respective obligation of each party to effect the Merger is subject
to the satisfaction or (to the extent permitted by Law) waiver by Parent and
the Company on or prior to the Closing Date of the following conditions:
(a) Shareholder Approvals. The Shareholder Approvals shall
have been obtained.
(b) NYSE Listing. The shares of Parent Common Stock issuable
to the shareholders of the Company and to holders of Adjusted Options
as contemplated by this Agreement shall have been approved for listing
on the NYSE, subject to official notice of issuance.
(c) Antitrust. (i) The waiting period (and any extension
thereof) applicable to the Merger under the HSR Act shall have been
terminated or shall have expired and (ii) the European Commission
shall have issued a decision under Article 6(1)(b), 8(1) or 8(2) of
the EC Merger Regulation (or shall have been deemed to have done so
under Article 10(6) of the EC Merger Regulation) declaring the Merger
compatible with the EC Common Market (and/or, as may be the case, any
national competition authority in the EC to which all or part of the
case may have been transferred shall have issued a decision with
similar effect or have been deemed to have done so).
(d) No Injunctions or Restraints. No temporary restraining
order, preliminary or permanent injunction or other judgment or order
issued by any court or agency of competent jurisdiction or other Law,
rule, legal restraint or prohibition (collectively, "Restraints")
shall be in effect preventing the consummation of the Merger.
(e) Form S-4. The Form S-4 shall have become effective under
the Securities Act and shall not be the subject of any stop order or
proceedings seeking a stop order.
SECTION 6.02. Conditions to Obligations of Parent and Sub. The
obligations of Parent and Sub to effect the Merger are further subject to the
satisfaction or (to the extent permitted by Law) waiver by Parent on or prior
to the Closing Date of the following conditions:
(a) Representations and Warranties. (i) The representations
and warranties of the Company contained in Sections 3.01(c), 3.01(d),
3.01(g)(iv) (but only with respect to current and former directors and
Tier I Employees), 3.01(i)(2)(A), 3.01(q), 3.01(r) (but not with
respect to the last sentence thereof) and 3.01(v) of this Agreement
that are qualified as to materiality or by reference to Material
Adverse Effect or Material Adverse Change shall be true and correct,
and such representations and warranties of the Company that are not so
qualified shall be true and correct in all material respects, in each
case as of the date of this Agreement and as of the Closing Date as
though made on the Closing Date, except to the extent such
representations and warranties expressly relate to an earlier date, in
which case as of such earlier date, (ii) the representations and
warranties of the Company contained in Sections 3.01(i)(2)(B) and (C)
shall be true and correct as of the date of this Agreement as though
made on the Closing Date, except to the extent that the facts or
matters as to which such representations and warranties are not so
true and correct as of such date, individually or in the aggregate,
would not reasonably be expected to have a material adverse effect on
the reasonably expected benefits of the Merger to Parent and (iii) all
other representations and warranties of the Company contained in this
Agreement shall be true and correct as of the date of this Agreement
and as of the Closing Date as though made on the Closing Date, except
to the extent such representations and warranties expressly relate to
a specified date, in which case as of such specified date, and except
further, in the case of this clause (iii), to the extent that the
facts or matters as to which such representations and warranties are
not so true and correct as of such dates (without giving effect to any
qualifications or limitations as to materiality or Material Adverse
Effect or Material Adverse Change set forth therein), individually or
in the aggregate, have not had and would not reasonably be expected to
have a Material Adverse Effect. Parent shall have received a
certificate signed on behalf of the Company by an executive officer of
the Company to such effect.
(b) Performance of Obligations of the Company. The Company
shall have performed in all material respects all obligations required
to be performed by it under this Agreement at or prior to the Closing
Date, and Parent shall have received a certificate signed on behalf of
the Company by the chief executive officer and the chief financial
officer of the Company to such effect.
(c) No Litigation. There shall not be pending any suit,
action or proceeding by any national Governmental Entity (i) seeking
to restrain or prohibit the consummation of the Merger or any other
transaction contemplated by this Agreement or seeking to obtain from
the Company, Parent, Sub or any other Affiliate of Parent any damages
that are material in relation to the Company, (ii) seeking to impose
limitations on the ability of Parent or any Affiliate of Parent to
hold, or exercise full rights of ownership of, any shares of capital
stock of the Surviving Corporation, including the right to vote such
shares on all matters properly presented to the shareholders of the
Surviving Corporation, (iii) seeking to prohibit Parent or any of its
Affiliates from effectively controlling in any material respect the
business or operations of the Company or any of its Affiliates, (iv)
seeking any Divestiture that is not required to be effected pursuant
to the terms of this Agreement or (v) that has had or would reasonably
be expected to have a Material Adverse Effect or Parent Material
Adverse Effect.
(d) Restraints. No Restraint that would reasonably be
expected to result, directly or indirectly, in any of the effects
referred to in clauses (i) through (v) of paragraph (c) of this
Section 6.02 shall be in effect.
SECTION 6.03. Conditions to Obligation of the Company. The obligation
of the Company to effect the Merger is further subject to the satisfaction or
(to the extent permitted by Law) waiver by the Company on or prior to the
Closing Date of the following conditions:
(a) Representations and Warranties. (i) The representations
and warranties of Parent and Sub contained in Sections 3.02(b) and
3.02(l) of this Agreement that are qualified as to materiality or by
reference to Parent Material Adverse Effect or Parent Material Adverse
Change shall be true and correct, and such representations and
warranties of Parent that are not so qualified shall be true and
correct in all material respects, in each case as of the date of this
Agreement and as of the Closing Date as though made on the Closing
Date, except to the extent such representations and warranties
expressly relate to an earlier date, in which case as of such earlier
date and (ii) all other representations and warranties of Parent
contained in this Agreement shall be true and correct as of the date
of this Agreement and as of the Closing Date as though made on the
Closing Date, except to the extent such representations and warranties
expressly relate to a specified date, in which case as of such
specified date, and except further, in the case of this clause (ii),
to the extent that the facts or matters as to which such
representations and warranties are not so true and correct as of such
dates (without giving effect to any qualifications or limitations as
to materiality or Parent Material Adverse Effect or Parent Material
Adverse Change set forth therein), individually or in the aggregate,
have not had and would not reasonably be expected to have a Parent
Material Adverse Effect. The Company shall have received a certificate
signed on behalf of Parent by an executive officer of Parent to such
effect.
(b) Performance of Obligations of Parent and Sub. Parent and
Sub shall have performed in all material respects all obligations
required to be performed by them under this Agreement at or prior to
the Closing Date, and the Company shall have received a certificate
signed on behalf of Parent by an executive officer of Parent to such
effect.
SECTION 6.04. Frustration of Closing Conditions. None of the Company,
Parent or Sub may rely on the failure of any condition set forth in Section
6.01, 6.02 or 6.03, as the case may be, to be satisfied if such failure was
caused by such party's failure to act in good faith or to use its reasonable
best efforts to consummate the Merger and the other transactions contemplated
by this Agreement, as required by and subject to Section 5.03.
ARTICLE VII
Termination, Amendment and Waiver
---------------------------------
SECTION 7.01. Termination. This Agreement may be terminated at any
time prior to the Effective Time, whether before or after receipt of the
Shareholder Approvals:
(a) by mutual written consent of Parent, Sub and the Company;
(b) by either Parent or the Company:
(i) if the Merger shall not have been consummated on or
before September 30, 2006; provided, however, that the right to
terminate this Agreement under this Section 7.01(b)(i) shall not be
available to any party whose willful breach of a representation or
warranty in this Agreement or whose other action or failure to act has
been a principal cause of or resulted in the failure of the Merger to
be consummated on or before such date;
(ii) if any Restraint having any of the effects set forth in
Section 6.01(d) shall be in effect and shall have become final and
nonappealable; or
(iii) if either of the Shareholder Approvals shall not have
been obtained at the respective Shareholders' Meetings duly convened
therefor or at any adjournment or postponement thereof;
(c) by Parent (i) if the Company shall have breached or
failed to perform any of its representations, warranties, covenants or
agreements set forth in this Agreement, which breach or failure to
perform (A) would give rise to the failure of a condition set forth in
Section 6.02(a) or 6.02(b) and (B) is not cured, or incapable of being
cured, by the Company within 30 calendar days following receipt of
written notice of such breach or failure to perform from Parent or
(ii) if any Restraint having the effects referred to in clauses (i)
through (v) of Section 6.02(c) shall be in effect and shall have
become final and nonappealable;
(d) by the Company, if Parent shall have breached or failed
to perform any of its representations, warranties, covenants or
agreements set forth in this Agreement, which breach or failure to
perform (A) would give rise to the failure of a condition set forth in
Section 6.03(a) or 6.03(b) and (B) is not cured, or is incapable of
being cured, by Parent within 30 calendar days following receipt of
written notice of such breach or failure to perform from the Company;
(e) by Parent, in the event that prior to the obtaining of
the Company Shareholder Approval (i) a Company Adverse Recommendation
Change shall have occurred or (ii) the Board of Directors of the
Company fails publicly to reaffirm its adoption and recommendation of
this Agreement, the Merger or the other transactions contemplated by
this Agreement within ten business days of receipt of a written
request by Parent to provide such reaffirmation following a Takeover
Proposal; or
(f) by the Company, in accordance with the terms and subject
to the conditions of Section 4.02(b).
SECTION 7.02. Effect of Termination. In the event of termination of
this Agreement by either the Company or Parent as provided in Section 7.01,
this Agreement shall forthwith become void and have no effect, without any
liability or obligation on the part of Parent, Sub or the Company under this
Agreement, other than the provisions of Section 3.01(s) and 3.02(g), the
second, third and fourth sentences of Section 5.02(a), Section 5.06, this
Section 7.02 and Article VIII, which provisions shall survive such termination;
provided, however, that no such termination shall relieve any party hereto from
any liability or damages resulting from the willful and material breach by a
party of any of its representations, warranties, covenants or agreements set
forth in this Agreement.
SECTION 7.03. Amendment. This Agreement may be amended by the parties
hereto at any time before or after receipt of the Shareholder Approvals;
provided, however, that after either such approval has been obtained, there
shall be made no amendment that by applicable Law requires further approval by
the shareholders of the Company or the stockholders of Parent, as applicable,
without such approval having been obtained. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties
hereto.
SECTION 7.04. Extension; Waiver. At any time prior to the Effective
Time, the parties may (a) extend the time for the performance of any of the
obligations or other acts of the other parties, (b) to the extent permitted by
applicable Law, waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto or (c) subject to
the proviso to the first sentence of Section 7.03 and to the extent permitted
by applicable Law, waive compliance with any of the agreements or conditions
contained herein. Any agreement on the part of a party to any such extension or
waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party. The failure of any party to this Agreement to assert any
of its rights under this Agreement or otherwise shall not constitute a waiver
of such rights nor shall any single or partial exercise by any party to this
Agreement of any of its rights under this Agreement preclude any other or
further exercise of such rights or any other rights under this Agreement.
SECTION 7.05. Procedure for Termination or Amendment. A termination of
this Agreement pursuant to Section 7.01 or an amendment of this Agreement
pursuant to Section 7.03 shall, in order to be effective, require, in the case
of Parent or the Company, action by its Board of Directors or, with respect to
any amendment of this Agreement pursuant to Section 7.03, the duly authorized
committee of its Board of Directors to the extent permitted by applicable Law.
ARTICLE VIII
General Provisions
------------------
SECTION 8.01. Nonsurvival of Representations and Warranties. None of
the representations and warranties in this Agreement or in any instrument
delivered pursuant to this Agreement shall survive the Effective Time. This
Section 8.01 shall not limit any covenant or agreement of the parties which by
its terms contemplates performance after the Effective Time.
SECTION 8.02. Notices. Except for notices that are specifically
required by the terms of this Agreement to be delivered orally, all notices,
requests, claims, demands and other communications hereunder shall be in
writing and shall be deemed given if delivered personally, telecopied (which is
confirmed) or sent by overnight courier (providing proof of delivery) to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
if to Parent or Sub, to:
Boston Scientific Corporation
Xxx Xxxxxx Xxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telecopy No.: (508) 650-8960
Attention: General Counsel
with a copy to:
Shearman & Sterling LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxx X. Xxxxx
Xxxxx X'Xxxxx
if to the Company, to:
Guidant Corporation
000 Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, XX 00000
Telecopy No.: (000) 000-0000
Attention: General Counsel
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 60606Telecopy No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx, Xx.
Xxxxx X. Xxxx
SECTION 8.03. Definitions. For purposes of this Agreement:
(a) an "Affiliate" of any person means another person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first person.
(b) "Knowledge" means, when used in connection with the Company or any
Subsidiary of the Company with respect to any matter in question, the actual
knowledge of the Company's or any such Subsidiary's executive officers after
making due inquiry of the current Tier I Employees and Tier II Employees having
primary responsibility for such matter; and, when used in connection with
Parent or any Subsidiary of Parent with respect to any matter in question, the
actual knowledge of Parent's executive officers after making due inquiry of the
current employees having primary responsibility for such matter.
(c) "Material Adverse Change" or "Material Adverse Effect" means any
change, effect, event, occurrence, state of facts or development which
individually or in the aggregate would reasonably be expected to result in any
change or effect, that is materially adverse to the business, financial
condition or results of operations of the Company and its Subsidiaries, taken
as a whole; provided that 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 Material Adverse
Change or Material Adverse Effect: (A) any change, effect, event, occurrence,
state of facts or development (1) in the financial or securities markets or the
economy in general, (2) in the industries in which the Company or any of its
Subsidiaries operates in general, to the extent that such change, effect,
event, occurrence, state of facts or development does not disproportionately
impact the Company or any of its Subsidiaries, or (3) resulting from any
Divestiture required to be effected pursuant to the terms of this Agreement,
(B) any failure, in and of itself, by the Company to meet any internal or
published projections, forecasts or revenue or earnings predictions (it being
understood that the facts or occurrences giving rise or contributing to such
failure may be deemed to constitute, or be taken into account in determining
whether there has been or would reasonably be expected to be, a Material
Adverse Effect or a Material Adverse Change), or (C) any effect on the
Company's business relating to or arising from any product recalls announced by
the Company prior to the date of this Agreement, or any related pending or
future litigation, investigations by Governmental Entities or other
developments.
(d) "Parent Material Adverse Change" or "Parent Material Adverse
Effect" means any change, effect, event, occurrence, state of facts or
development which individually or in the aggregate would reasonably be expected
to result in any change or effect, that is materially adverse to the business,
financial condition or results of operations of Parent and its Subsidiaries,
taken as a whole; provided that 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 Parent
Material Adverse Change or Parent Material Adverse Effect: (A) any change,
effect, event, occurrence, state of facts or development (1) in the financial
or securities markets or the economy in general, (2) in the industries in which
Parent or any of its Subsidiaries operates in general, to the extent that such
change, effect, event, occurrence, state of facts or development does not
disproportionately impact Parent or any of its Subsidiaries or (3) resulting
from any Divestiture required to be effected pursuant to the terms of this
Agreement or (B) any failure, in and of itself, by Parent to meet any internal
or published projections, forecasts or revenue or earnings predictions (it
being understood that the facts or occurrences giving rise or contributing to
such failure may be deemed to constitute, or be taken into account in
determining whether there has been or would reasonably be expected to be, a
Parent Material Adverse Effect or a Parent Material Adverse Change).
(e) "person" means an individual, corporation, partnership, limited
liability company, joint venture, association, trust, unincorporated
organization or other entity.
(f) a "Subsidiary" of any person means another person, an amount of
the voting securities, other voting rights or voting partnership interests of
which is sufficient to elect at least a majority of its board of directors or
other governing body (or, if there are no such voting interests, 50% or more of
the equity interests of which) is owned directly or indirectly by such first
person.
(g) "Transaction Agreement" means the Transaction Agreement, dated as
of January 8, 2006, and as amended by Amendment No. 1 and Amendment No. 2, each
dated as of January 16, 2006, between Parent and Xxxxxx Laboratories, pursuant
to which Parent has agreed, among other things, to sell certain assets of the
Company to the purchaser thereunder.
SECTION 8.04. Interpretation. When a reference is made in this
Agreement to an Article, a Section, Exhibit or Schedule, such reference shall
be to an Article of, a Section of, or an Exhibit or Schedule to, this Agreement
unless otherwise indicated. The table of contents and headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement. Whenever the words "include",
"includes" or "including" are used in this Agreement, they shall be deemed to
be followed by the words "without limitation". The words "hereof", "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement. References to "this Agreement" shall include the Company Disclosure
Schedule. All terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant
hereto unless otherwise defined therein. The definitions contained in this
Agreement are applicable to the singular as well as the plural forms of such
terms and to the masculine as well as to the feminine and neuter genders of
such term. Any Contract, instrument or Law defined or referred to herein or in
any Contract or instrument that is referred to herein means such Contract,
instrument or Law as from time to time amended, modified or supplemented,
including (in the case of Contracts or instruments) by waiver or consent and
(in the case of Laws) by succession of comparable successor Laws and references
to all attachments thereto and instruments incorporated therein. References to
a person are also to its permitted successors and assigns.
SECTION 8.05. Consents and Approvals. For any matter under this
Agreement requiring the consent or approval of any party to be valid and
binding on the parties hereto, such consent or approval must be in writing.
SECTION 8.06. Counterparts. This Agreement may be executed in one or
more counterparts (including by facsimile), all of which shall be considered
one and the same agreement and shall become effective when one or more
counterparts have been signed by each of the parties and delivered to the other
parties.
SECTION 8.07. Entire Agreement; No Third-Party Beneficiaries. This
Agreement (including the Exhibits and Schedules) and the Confidentiality
Agreement and any agreements entered into contemporaneously herewith (a)
constitute the entire agreement, and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter of this Agreement and the Confidentiality Agreement and (b)
except for the provisions of Article II and Section 5.05, are not intended to
and do not confer upon any person other than the parties any legal or equitable
rights or remedies.
SECTION 8.08. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF INDIANA, REGARDLESS OF
THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICTS
OF LAWS THEREOF.
SECTION 8.09. Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned, in whole or in
part, by operation of law or otherwise by any of the parties without the prior
written consent of the other parties, and any assignment without such consent
shall be null and void, except that Sub, upon prior written notice to the
Company, may assign, in its sole discretion, any of or all its rights,
interests and obligations under this Agreement to Parent or to any direct or
indirect wholly owned Subsidiary of Parent, but no such assignment shall
relieve Parent or Sub of any of its obligations hereunder. Subject to the
preceding sentence, this Agreement will be binding upon, inure to the benefit
of, and be enforceable by, the parties and their respective successors and
assigns.
SECTION 8.10. Specific Enforcement; Consent to Jurisdiction. The
parties agree that irreparable damage would occur and that the parties would
not have any adequate remedy at law in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions of this Agreement in the
United States District Court for the Southern District of New York, this being
in addition to any other remedy to which they are entitled at law or in equity.
In addition, each of the parties hereto (a) consents to submit itself to the
personal jurisdiction of the United States District Court for the Southern
District of New York in the event any dispute arises out of this Agreement or
the transactions contemplated by this Agreement, (b) agrees that it will not
attempt to deny or defeat such personal jurisdiction by motion or other request
for leave from any such court and (c) agrees that it will not bring any action
relating to this Agreement or the transactions contemplated by this Agreement
in any court other than the United States District Court for the Southern
District of New York.
SECTION 8.11. Waiver of Jury Trial. Each party hereto hereby waives,
to the fullest extent permitted by applicable Law, any right it may have to a
trial by jury in respect of any suit, action or other proceeding arising out of
this Agreement or the transactions contemplated hereby. Each party hereto (a)
certifies that no representative, agent or attorney of any other party has
represented, expressly or otherwise, that such party would not, in the event of
any action, suit or proceeding, seek to enforce the foregoing waiver and (b)
acknowledges that it and the other parties hereto have been induced to enter
into this Agreement, by, among other things, the mutual waiver and
certifications in this Section 8.11.
SECTION 8.12. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible to the fullest
extent permitted by applicable Law in an acceptable manner to the end that the
transactions contemplated by this Agreement are fulfilled to the extent
possible.
IN WITNESS WHEREOF, Parent, Sub and the Company have caused this
Agreement to be signed by their respective officers hereunto duly authorized,
all as of the date first written above.
BOSTON SCIENTIFIC CORPORATION,
by
/s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Title: Chief Executive Officer
GALAXY MERGER SUB, INC.
by
/s/ Xxxxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: President
GUIDANT CORPORATION
by
/s/ Xxxxx X. Xxxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Chairman & CEO
ANNEX I
TO THE AMENDED AND RESTATED MERGER AGREEMENT
Index of Defined Terms
----------------------
Term
----
Acquisition Agreement Section 4.02(b)
Actions Section 4.01(d)
Adjusted Option Section 5.04(a)
Affiliate Section 8.03(a)
Agreement Preamble
Amendment Recitals
Antitrust Filings Section 5.03
Articles of Merger Section 1.03
Average Parent Stock Price Section 5.04(h)
Cash Portion Section 2.01(c)
Cash Portion Option Exchange Multiple Section 5.04(g)
Certificate Section 2.01(c)
Closing Section 1.02
Closing Date Section 1.02
Closing Price Section 2.02(e)
Code Section 2.02(j)
Commitment Letter Section 3.02(o)
Commonly Controlled Entity Section 3.01(l)
Company Preamble
Company Adverse Recommendation Change Section 4.02(b)
Company Articles Section 1.05
Company Benefit Agreements Section 3.01(g)
Company Benefit Plans Section 3.01(l)
Company By-laws Section 3.01(a)
Company Common Stock Recitals
Company Disclosure Schedule Section 3.01
Company Notes Section 4.01(a)
Company Pension Plan Section 3.01(l)
Company Preferred Stock Section 3.01(c)
Company Restricted Stock Section 3.01(c)
Company Rights Section 3.01(v)
Company SEC Documents Section 3.01(e)
Company Series A Preferred Stock Section 3.01(c)
Company Shareholder Approval Section 3.01(q)
Company Shareholders' Meeting Section 5.01(a)
Company Stock-Based Awards Section 3.01(c)
Company Stock Options Section 3.01(c)
Company Stock Plans Section 3.01(c)
Company Termination Fee Section 5.06(c)
Company Welfare Plan Section 3.01(l)
Confidentiality Agreement Section 5.02
Continuing Employees Section 5.11(a)
Contract Section 3.01(d)
Divestiture Section 5.03
EC Merger Regulation Section 3.01(d)
Effective Time Section 1.03
Environmental Laws Section 3.01(j)
ERISA Section 3.01(j)
ESPP Section 3.01(c)
Excess Distribution Section 4.01(d)
Exchange Act Section 3.01(d)
Exchange Agent Section 2.02(a)
Exchange Fund Section 2.02(a)
Exchange Ratio Section 2.01(c)
FDA Section 3.01(u)
FDCA Section 3.01(j)
Filed Company SEC Documents Section 3.01
Filed Parent SEC Documents Section 3.02
Financing Section 3.02(o)
Form S-4 Section 5.01(a)
GAAP Section 3.01(e)
Governmental Entity Section 3.01(d)
Hazardous Materials Section 3.01(j)
HSR Act Section 3.01(d)
HSR Filing Section 5.03
IBCL Section 1.01
Intellectual Property Rights Section 3.01(p)
Interest Portion Section 2.01(c)
IRS Section 3.01(l)
J&J Recitals
J&J Agreement Recitals
Key Personnel Section 3.01(g)
Knowledge Section 8.03(b)
Law Section 3.01(d)
Legal Provisions Section 3.01(j)
Lenders Section 3.02(o)
Liens Section 3.01(b)
Material Adverse Change Section 8.03(c)
Material Adverse Effect Section 8.03(c)
Medical Device Section 3.01(u)
Merger Recitals
Merger Consideration Section 2.01(c)
New Rights Plan Section 5.13
Non-U.S. Subsidiary Section 4.01(d)
Notice of Superior Proposal Section 4.02(b)
NYSE 2.02(e)
Order 3.01(d)
Paragraph 6 3.01(r)
Parent Preamble
Parent Average Closing Stock Price 2.01(a)
Parent By-laws 3.02(a)
Parent Certificate Recitals
Parent Common Stock Recitals
Parent Disclosure Schedule Section 3.02
Parent Intellectual Property Rights Section 3.02(k)
Parent Material Adverse Change Section 8.03(d)
Parent Material Adverse Effect Section 8.03(d)
Parent Medical Device Section 3.02(m)
Parent Preferred Stock Section 3.02(h)
Parent Recommendation Section 5.01(c)
Parent SEC Documents Section 3.02(c)
Parent Stock Plans Section 4.01(b)(iii)
Parent Stockholder Approval Section 3.02(m)
Parent Stockholders' Meeting Section 5.01(a)
Permits Section 3.01(j)
Person Section 8.03(e)
Primary Company Executives Section 3.01(m)
Proxy Statement Section 3.01(d)
Representatives Section 4.02(a)
Release Section 3.01(j)
Restraints Section 6.01(d)
Rights Agreement Section 3.01(v)
SEC Section 3.01(d)
Securities Act Section 3.01(e)
Shareholder Approvals Section 3.02(m)
Shareholders' Meetings Section 5.01(a)
Share Issuance Recitals
Significant Subsidiary Section 3.01(a)
Social Security Act Section 3.01(u)
SOX Section 3.01(e)
Stock Portion Section 2.01(c)
Sub Preamble
Sub Articles Section 3.02(a)
Subsidiary Section 8.03(g)
Superior Proposal Section 4.02(a)
Surviving Corporation Section 1.01
Takeover Proposal Section 4.02(a)
Termination Fee Section 5.06(b)
tax Section 3.01(n)
taxing authority Section 3.01(n)
tax return Section 3.01(n)
Tier I Employee Section 3.01(g)
Tier II Employee Section 3.01(g)
EXHIBIT A
TO THE MERGER AGREEMENT
Restated Articles of Incorporation
of the Surviving Corporation
----------------------------
FIRST: The name of the corporation (hereinafter called the
"Corporation") is Guidant Corporation.
SECOND: The aggregate number of shares which the Corporation shall
have authority to issue is 1,000 shares of Common Stock, without par value.
THIRD: The street address of the Corporation's initial registered
office in Indiana is 000 Xxxx XxXxxxx Xxxxxx, Xxxxxxxxxxxx 00000 and the name
of its initial registered agent at that office is [Name of Agent].
FOURTH: The purpose of the Corporation is to engage in any lawful act
or activity for which corporations may be organized under the Business
Corporation Law of the State of Indiana.
FIFTH: In furtherance and not in limitation of the powers conferred
upon it by law, the Board of Directors of the Corporation is expressly
authorized to adopt, amend or repeal the By-laws of the Corporation.
SIXTH: To the fullest extent permitted by the Business Corporation Law
of the State of Indiana as it now exists and as it may hereafter be amended, no
director or officer of the Corporation shall be personally liable to the
Corporation or any of its shareholders for monetary damages for breach of
fiduciary duty as a director or officer.
SEVENTH: The Corporation shall, to the fullest extent permitted by
Section 23-1-37 of the Business Corporation Law of the State of Indiana, as the
same may be amended and supplemented, indemnify any and all persons whom it
shall have power to indemnify under said Section from and against any and all
of the expenses, liabilities, or other matters referred to in or covered by
said Section. Such indemnification shall be mandatory and not discretionary.
The indemnification provided for herein shall not be deemed exclusive of any
other rights to which those indemnified may be entitled under any by-law,
agreement, vote of shareholders or disinterested directors or otherwise, both
as to action in his or her official capacity and as to action in another
capacity while holding such office, and shall continue as to a person who has
ceased to be a director, officer, employee, or agent and shall inure to the
benefit of the heirs, executors, and administrators of such a person. Any
repeal or modification of this Article SEVENTH shall not adversely affect any
right to indemnification of any persons existing at the time of such repeal or
modification with respect to any matter occurring prior to such repeal or
modification.
The Corporation shall to the fullest extent permitted by the Business
Corporation Law of the State of Indiana advance all costs and expenses
(including, without limitation, attorneys' fees and expenses) incurred by any
director or officer within 15 days of the presentation of same to the
Corporation, with respect to any one or more actions, suits or proceedings,
whether civil, criminal, administrative or investigative, so long as the
Corporation receives from the director or officer a written affirmation
required by the Business Corporation Law of the State of Indiana of his or her
good faith belief that he or she has met the applicable standard of conduct
established by the Business Corporation Law of the State of Indiana, together
with an unsecured undertaking to repay such expenses if it shall ultimately be
determined that such director or officer is not entitled to be indemnified by
the Corporation under the Business Corporation Law of the State of Indiana.
Such obligation to advance costs and expenses shall be mandatory, and not
discretionary, and shall include, without limitation, costs and expenses
incurred in asserting affirmative defenses, counterclaims and cross claims.
Such undertaking to repay may, if first requested in writing by the applicable
director or officer, be on behalf of (rather than by) such director or officer,
provided that in such case the Corporation shall have the right to approve the
party making such undertaking.
EIGHTH: Unless and except to the extent that the By-laws of the
Corporation shall so require, the election of directors of the Corporation need
not be by written ballot.
EXHIBIT B
TO THE MERGER AGREEMENT
Form of Affiliate Letter
------------------------
Dear Sirs:
The undersigned, a holder of shares of common stock, without par value
("Company Common Stock"), of Guidant Corporation, an Indiana corporation (the
"Company"), acknowledges that the undersigned may be deemed an "affiliate" of
the Company within the meaning of Rule 145 ("Rule 145") promulgated under the
Securities Act of 1933, as amended (the "Securities Act"), by the Securities
and Exchange Commission (the "SEC"). Pursuant to the terms of the Agreement and
Plan of Merger dated as of January 25, 2006 (the "Merger Agreement"), among
Boston Scientific Corporation, a Delaware corporation ("Parent"), Galaxy Merger
Sub, Inc., an Indiana corporation and a wholly owned subsidiary of Parent
("Sub"), and the Company, Merger Sub will be merged with and into the Company
(the "Merger"), and in connection with the Merger, the undersigned is entitled
to receive (i) that number of validly issued, fully paid and nonassessable
shares shares of the common stock of Parent ("Parent Common Stock") equal to
the quotient determined by dividing $38.00 by the Parent Average Closing Stock
Price (as defined below) and rounding the result to the nearest 1/10,000 of a
share; provided, however, that if such quotient is less than 13167, the
Exchange Ratio will be 1.3167 and if such quotient is greater than 1.6799, the
Exchange Ratio will be 1.6799, (ii) $42.00 in cash, without interest, and (iii)
if the Closing shall not have occurred on or prior to March 31, 2006, an amount
in cash equal to $0.0132 per day for each day during the period commencing
April 1, 2006 through the date of the closing. For the purposes of this letter,
the term "Parent Average Closing Stock Price" means the average of the per
share closing prices of Parent Common Stock on the NYSE during the 20
consecutive trading days ending on (and including) the date that is three
trading days prior to the Closing.
If in fact the undersigned were an affiliate under the Securities Act,
the undersigned's ability to sell, assign or transfer the shares of Parent
Common Stock received by the undersigned in exchange for any shares of Company
Common Stock in connection with the Merger may be restricted unless such
transaction is registered under the Securities Act or an exemption from such
registration is available. The undersigned understands that such exemptions are
limited and the undersigned has obtained or will obtain advice of counsel as to
the nature and conditions of such exemptions, including information with
respect to the applicability to the sale of such securities of Rules 144 and
145(d) promulgated under the Securities Act. The undersigned understands that
Parent will not be required to maintain the effectiveness of any registration
statement under the Securities Act for the purposes of resale of Parent Common
Stock by the undersigned.
The undersigned hereby represents to and covenants with Parent that
the undersigned will not sell, assign or transfer any of the shares of Parent
Common Stock received by the undersigned in exchange for shares of Company
Common Stock in connection with the Merger except (i) pursuant to an effective
registration statement under the Securities Act, (ii) in conformity with the
volume and other limitations of Rule 145 or (iii) in a transaction which, in
the opinion of counsel to the undersigned, such counsel to be reasonably
satisfactory to Parent and such opinion to be in form and substance reasonably
satisfactory to Parent, or as described in a "no-action" or interpretive letter
from the Staff of the SEC specifically issued with respect to a transaction to
be engaged in by the undersigned, is not required to be registered under the
Securities Act.
In the event of a sale or other disposition by the undersigned of the
shares of Parent Common Stock pursuant to Rule 145, the undersigned will supply
Parent with evidence of compliance with such Rule, in the form of a letter in
the form of Annex I hereto or the opinion of counsel or no-action letter
referred to above. The undersigned understands that Parent may instruct its
transfer agent to withhold the transfer of any shares of Parent Common Stock
disposed of by the undersigned, but that (provided such transfer is not
prohibited by any other provision of this letter agreement) upon receipt of
such evidence of compliance, Parent shall cause the transfer agent to
effectuate the transfer of the shares of Parent Common Stock sold as indicated
in such letter.
Parent covenants that it will take all such actions as may be
reasonably available to it to permit the sale or other disposition of the
shares of Parent Common Stock by the undersigned under Rule 145 in accordance
with the terms thereof.
The undersigned acknowledges and agrees that the legend set forth
below will be placed on certificates representing the shares of Parent Common
Stock received by the undersigned in connection with the Merger or held by a
transferee thereof, which legend will be removed by delivery of substitute
certificates (i) if the undersigned provides evidence of compliance with Rule
145 to Parent, in the form of a letter in the form of Annex I hereto, or (ii)
upon receipt of an opinion in form and substance reasonably satisfactory to
Parent from counsel reasonably satisfactory to Parent to the effect that such
legend is no longer required for purposes of the Securities Act.
There will be placed on the certificates for Parent Common Stock
issued to the undersigned in connection with the Merger, or any substitutions
therefor, a legend stating in substance:
"The shares represented by this certificate were issued
pursuant to a transaction to which Rule 145 promulgated under the
Securities Act of 1933 applies. The shares have not been acquired by
the holder with a view to, or for resale in connection with, any
distribution thereof within the meaning of the Securities Act of 1933.
The shares may not be sold, pledged or otherwise transferred except in
accordance with Rule 145, pursuant to a Registration Statement under
the Securities Act of 1933 or in accordance with an exemption from the
registration requirements of the Securities Act of 1933."
The undersigned acknowledges that (i) the undersigned has carefully
read this letter and understands the requirements hereof and the limitations
imposed upon the distribution, sale, transfer or other disposition of Parent
Common Stock and (ii) the receipt by Parent of this letter is an inducement to
Parent's obligations to consummate the Merger.
Execution of this letter should not be considered an admission on the
part of the undersigned that the undersigned is an "affiliate" of the Company
as described in the first paragraph of this letter, or as a waiver of any
rights the undersigned may have to object to any claim that the undersigned is
such an affiliate on or after the date of this letter.
Very truly yours,
Dated:
ANNEX I
TO EXHIBIT B
[Name]
[Date]
On , the undersigned sold the securities of Boston Scientific
Corporation ("Parent") described below in the space provided for that purpose
(the "Securities"). The Securities were received by the undersigned in
connection with the merger of Galaxy Merger Sub, Inc., an Indiana corporation,
with and into Guidant Corporation, an Indiana corporation.
Based upon the most recent report or statement filed by Parent with
the Securities and Exchange Commission, the Securities sold by the undersigned
were within the prescribed limitations set forth in paragraph (e) of Rule 144
promulgated under the Securities Act of 1933, as amended (the "Securities
Act").
The undersigned hereby represents that the Securities were sold in
"brokers' transactions" within the meaning of Section 4(4) of the Securities
Act or in transactions directly with a "market maker" as that term is defined
in Section 3(a)(38) of the Securities Exchange Act of 1934, as amended. The
undersigned further represents that the undersigned has not solicited or
arranged for the solicitation of orders to buy the Securities, and that the
undersigned has not made any payment in connection with the offer or sale of
the Securities to any person other than to the broker who executed the order in
respect of such sale.
Very truly yours,
Dated:
EXHIBIT C
TO THE MERGER AGREEMENT
Form of Voting Agreement
------------------------
