Exhibit 2.1
EXECUTION COPY
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AGREEMENT AND PLAN OF MERGER
Dated as of December 16, 2005,
Among
XXXXXXX & XXXXXXX,
EMERALD MERGER SUB, INC.
And
ANIMAS CORPORATION
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TABLE OF CONTENTS
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ARTICLE I
The Merger
SECTION 1.01. The Merger............................................... 1
SECTION 1.02. Closing.................................................. 1
SECTION 1.03. Effective Time........................................... 2
SECTION 1.04. Effects of the Merger.................................... 2
SECTION 1.05. Certificate 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............ 6
SECTION 3.02. Representations and Warranties of Parent and Sub......... 33
ARTICLE IV
Covenants Relating to Conduct of Business; No Solicitation
SECTION 4.01. Conduct of Business...................................... 35
SECTION 4.02. No Solicitation.......................................... 40
ARTICLE V
Additional Agreements
SECTION 5.01. Preparation of the Proxy Statement; Stockholders' Meeting 43
SECTION 5.02. Access to Information; Confidentiality................... 44
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SECTION 5.03. Commercially Reasonable Efforts.......................... 44
SECTION 5.04. Company Stock Options; ESPP; Warrants.................... 45
SECTION 5.05. Indemnification; Advancement of Expenses; Exculpation and
Insurance............................................. 47
SECTION 5.06. Fees and Expenses........................................ 48
SECTION 5.07. Public Announcements..................................... 48
SECTION 5.08. Stockholder Litigation................................... 49
SECTION 5.09. Employee Matters......................................... 49
SECTION 5.10. Stockholder Agreement Legend............................. 50
SECTION 5.11. Certain Other Actions.................................... 50
ARTICLE VI
Conditions Precedent
SECTION 6.01. Conditions to Each Party's Obligation to Effect the
Merger................................................ 50
SECTION 6.02. Conditions to Obligations of Parent and Sub.............. 51
SECTION 6.03. Conditions to Obligation of the Company.................. 52
SECTION 6.04. Frustration of Closing Conditions........................ 52
ARTICLE VII
Termination, Amendment and Waiver
SECTION 7.01. Termination.............................................. 53
SECTION 7.02. Effect of Termination.................................... 54
SECTION 7.03. Amendment................................................ 54
SECTION 7.04. Extension; Waiver........................................ 54
SECTION 7.05. Procedure for Termination or Amendment................... 54
ARTICLE VIII
General Provisions
SECTION 8.01. Nonsurvival of Representations and Warranties............ 54
SECTION 8.02. Notices.................................................. 55
SECTION 8.03. Definitions.............................................. 56
SECTION 8.04. Interpretation........................................... 57
SECTION 8.05. Consents and Approvals................................... 57
SECTION 8.06. Counterparts............................................. 57
SECTION 8.07. Entire Agreement; No Third-Party Beneficiaries........... 57
SECTION 8.08. GOVERNING LAW............................................ 57
SECTION 8.09. Assignment............................................... 58
SECTION 8.10. Specific Enforcement; Consent to Jurisdiction............ 58
SECTION 8.11. Waiver of Jury Trial..................................... 58
SECTION 8.12. Severability............................................. 58
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Annex I Index of Defined Terms
Exhibit A Restated Certificate of Incorporation of the Surviving
Corporation
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AGREEMENT AND PLAN OF MERGER (this "Agreement") dated as of December
16, 2005, among XXXXXXX & XXXXXXX, a New Jersey corporation ("Parent"), EMERALD
MERGER SUB, INC., a Delaware corporation and a wholly owned Subsidiary of Parent
("Sub"), and ANIMAS CORPORATION, a Delaware corporation (the "Company").
WHEREAS the Board of Directors of each of the Company and Sub has
approved and declared advisable, 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, par value
$0.01 per share, of the Company ("Company Common Stock"), other than (i) shares
of Company Common Stock directly owned by Parent, Sub or the Company and (ii)
the Appraisal Shares, will be converted into the right to receive $24.50 in
cash;
WHEREAS simultaneously with the execution and delivery of this
Agreement and as a condition to Parent's willingness to enter into this
Agreement, Parent and certain stockholders of the Company (the "Principal
Stockholders") entered into an agreement (the "Stockholder Agreement") pursuant
to which the Principal Stockholders agreed to vote to, approve and adopt this
Agreement and to take certain other actions in furtherance of the consummation
of the Merger upon the terms and subject to the conditions set forth in the
Stockholder Agreement; 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
SECTION 1.01. The Merger. Upon the terms and subject to the conditions
set forth in this Agreement, and in accordance with the General Corporation Law
of the State of Delaware (the "DGCL"), 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 DGCL.
SECTION 1.02. Closing. The closing of the Merger (the "Closing") will
take place at 10:00 a.m. on a date to be specified by the parties, which shall
be no later
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than the second business day after satisfaction or (to the extent permitted by
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 law) waiver of those
conditions), at the offices of Cravath, Swaine & Xxxxx LLP, Worldwide Plaza, 000
Xxxxxx 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 not have been satisfied or (to the
extent permitted by law) waived on such second business day, then the Closing
shall take place on the first business day on which all such conditions shall
have been satisfied or (to the extent permitted by law) waived. 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 Delaware a certificate of merger
(the "Certificate of Merger") executed and acknowledged by the parties in
accordance with the relevant provisions of the DGCL and, as soon as practicable
on or after the Closing Date, shall make all other filings or recordings
required under the DGCL. The Merger shall become effective upon the filing of
the Certificate of Merger with the Secretary of State of the State of Delaware,
or at such later time as Parent and the Company shall agree and shall specify in
the Certificate 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 259 of the DGCL.
SECTION 1.05. Certificate of Incorporation and By-laws. (a) The
Amended and Restated Certificate of Incorporation of the Company (as amended,
the "Company Certificate") shall be amended at the Effective Time to be in the
form of Exhibit A and, as so amended, such Company Certificate shall be the
Restated Certificate 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 Sub 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.
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ARTICLE II
Effect of the Merger on the Capital Stock of the
Constituent Corporations; Exchange of Certificates
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, par value $0.01 per share, of
the Surviving Corporation.
(b) Cancellation 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. 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) and the
Appraisal Shares) shall be converted into the right to receive $24.50 in
cash, without interest (the "Merger Consideration"). 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. As provided in Section 2.02(h), the right of any
holder of a Certificate to receive the Merger Consideration shall be
subject to and reduced by the amount of any withholding that is required
under applicable tax law.
(d) Appraisal Rights. Notwithstanding anything in this Agreement to
the contrary, shares (the "Appraisal Shares") of Company Common Stock
issued and outstanding immediately prior to the Effective Time that are
held by any holder who is entitled to demand and properly demands appraisal
of such Appraisal Shares pursuant to, and who complies in all respects
with, the provisions of Section 262 of the DGCL ("Section 262") shall not
be converted into the right to receive the Merger Consideration as provided
in Section 2.01(c), but instead such holder shall be entitled to payment of
the fair value of such Appraisal Shares in accordance with the provisions
of Section 262. At the Effective Time, all Appraisal Shares shall no longer
be outstanding, shall automatically be canceled and shall cease to exist,
and each holder of Appraisal Shares shall cease to have any rights with
respect thereto, except the right to
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receive the fair value of such Appraisal Shares in accordance with the
provisions of Section 262. Notwithstanding the foregoing, if any such
holder shall fail to perfect or otherwise shall waive, withdraw or lose the
right to appraisal under Section 262, or a court of competent jurisdiction
shall determine that such holder is not entitled to the relief provided by
Section 262, then the right of such holder to be paid the fair value of
such holder's Appraisal Shares under Section 262 shall cease and such
Appraisal Shares shall be deemed to have been converted at the Effective
Time into, and shall have become, the right to receive the Merger
Consideration as provided in Section 2.01(c). The Company shall serve
prompt notice to Parent of any demands for appraisal of any shares of
Company Common Stock, and Parent shall have the right to participate in and
direct all negotiations and proceedings with respect to such demands. Prior
to the Effective Time, the Company shall not, without the prior written
consent of Parent, voluntarily make any payment with respect to, or settle
or offer to settle, any such demands, or agree to do any of the foregoing.
SECTION 2.02. Exchange of Certificates. (a) Paying Agent. Prior to the
Effective Time, Parent shall appoint JPMorgan Chase or another comparable bank
or trust company to act as paying agent (the "Paying Agent") for the payment of
the Merger Consideration. At the Effective Time, Parent shall deposit, or cause
the Surviving Corporation to deposit, with the Paying Agent, for the benefit of
the holders of Certificates, cash in an amount sufficient to pay the aggregate
Merger Consideration required to be paid pursuant to Section 2.01(c) (such cash
being hereinafter referred to as the "Exchange Fund").
(b) Exchange Procedures. As soon as reasonably practicable after the
Effective Time, Parent shall cause the Paying Agent to mail to each holder of
record of a Certificate (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 Paying Agent
and which shall be in customary form and have such other provisions as Parent
may reasonably specify) and (ii) instructions for use in effecting the surrender
of the Certificates in exchange for the Merger Consideration. Each holder of
record of a Certificate shall, upon surrender to the Paying Agent of such
Certificate, together with such letter of transmittal, duly executed, and such
other documents as may reasonably be required by the Paying Agent, be entitled
to receive in exchange therefor the amount of cash which the number of shares of
Company Common Stock previously represented by such Certificate shall have been
converted into the right to receive pursuant to Section 2.01(c), and the
Certificate 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 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 to a person other than the registered holder of such Certificate
or establish to the
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reasonable satisfaction of Parent that such tax has been paid or is 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 which the
holder thereof has the right to receive in respect of such Certificate pursuant
to this Article II. No interest shall be paid or will accrue on any cash payable
to holders of Certificates pursuant to the provisions of this Article II.
(c) No Further Ownership Rights in Company Common Stock. All cash 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 stock transfer books of the Company shall be closed, and there shall
be no further registration of transfers on the stock 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 cash to the holder thereof as provided in
this Article II.
(d) 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.
(e) No Liability. None of Parent, Sub, the Company, the Surviving
Corporation or the Paying Agent shall be liable to any person in respect of any
cash 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 two years after the Effective Time (or
immediately prior to such earlier date on which any Merger Consideration would
otherwise escheat to or become the property of any Governmental Entity), any
such Merger Consideration 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.
(f) Investment of Exchange Fund. The Paying Agent shall invest the
cash in the Exchange Fund as directed by Parent. Any interest and other income
resulting from such investments shall be paid to Parent.
(g) 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 Paying Agent
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shall deliver in exchange for such lost, stolen or destroyed Certificate the
applicable Merger Consideration with respect thereto.
(h) Withholding Rights. Parent, the Surviving Corporation or the
Paying Agent shall be entitled to deduct and withhold from the consideration
otherwise payable pursuant to this Agreement to any holder of shares of Company
Common Stock such amounts as Parent, the Surviving Corporation or the Paying
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 Paying Agent, such withheld amounts shall be
treated for all purposes of this Agreement as having been paid to the holder of
the shares of Company Common Stock in respect of which such deduction and
withholding was made by Parent, the Surviving Corporation or the Paying Agent.
ARTICLE III
Representations and Warranties
SECTION 3.01. Representations and Warranties of the Company. Except as
set forth in the 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 or hereof to which its relevance is
readily apparent on its face) delivered by the Company to Parent prior to the
execution of this Agreement (the "Company Disclosure Schedule"), 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 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 presently conducted and as currently
proposed by its management to be conducted, except where the failure to
have such government licenses, permits, authorizations or approvals
individually or in the aggregate has not had and would not
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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 in each jurisdiction in which the nature of its
business or the ownership, leasing or operation of its properties makes
such qualification or licensing necessary, other than in such jurisdictions
where the failure to be so qualified or licensed 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 execution of this Agreement, complete and accurate copies of the
Company Certificate and its Amended and Restated By-laws (as amended, the
"Company By-laws"), and the comparable organizational documents of each of
its Subsidiaries, in each case as amended to the date hereof. The Company
has made available to Parent complete and accurate copies of the minutes
(or, in the case of minutes that have not yet been finalized, drafts
thereof) of all meetings of the stockholders of the Company and each of its
Subsidiaries, the Board of Directors of the Company and each of its
Subsidiaries and the committees of each of such Board of Directors, in each
case held since January 1, 2002 and prior to the date hereof.
(b) Subsidiaries. Section 3.01(b) of the Company Disclosure Schedule
lists each of the Subsidiaries of the Company and, for each such
Subsidiary, the jurisdiction of incorporation or formation and, as of the
date hereof, each jurisdiction in which such Subsidiary is qualified or
licensed to do business. All the issued and outstanding shares of capital
stock of, or other equity interests in, each such Subsidiary 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
(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 for the capital stock of, or voting securities or equity interests
in, its Subsidiaries, the Company does not own, directly or indirectly, 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 100,000,000 shares of Company Common Stock and 10,000,000
shares of preferred stock, par value $0.01 per share ("Company Preferred
Stock"). At the close of business on December 13, 2005, (i) 20,763,330
shares of Company Common Stock were issued and outstanding, (ii) 0 shares
of Company Common Stock were held by the Company in its treasury, (iii)
10,266,667 shares of Company Common Stock were reserved for issuance
pursuant to the 1996 Incentive Stock Plan, the 1998 Equity Compensation
Plan, the 2004 Equity Incentive Plan and the 2004 Employee Stock Purchase
Plan (the "ESPP", and such plans, collectively, the "Company Stock Plans"),
of which 2,118,891 shares of Company Common Stock were subject to
outstanding Company Stock Options, (iv) no shares of Company Preferred
Stock were issued or outstanding or were held by the Company as treasury
shares and (v) warrants to acquire 78,900 shares of Company Common Stock
from the Company pursuant to the warrant agreements set forth on Schedule
3.01(c) of the Company Disclosure Schedule and previously delivered in
complete and correct form to Parent (the "Warrants") were issued and
outstanding. Except as set forth above in this Section 3.01(c), at the
close of business on December 13, 2005, no
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shares of capital stock or other voting securities or equity interests of
the Company were issued, reserved for issuance or outstanding. There are no
outstanding shares of Company Common Stock or Company Preferred Stock
subject to vesting or restrictions on transfer, stock appreciation rights,
"phantom" stock rights, performance units, rights to receive shares of
Company Common Stock on a deferred basis or other rights (other than
Company Stock Options and Warrants) that are linked to the value of Company
Common Stock (collectively, but exclusive of rights under the ESPP,
"Company Stock-Based Awards"). Section 3.01(c) of the Company Disclosure
Schedule sets forth a complete and accurate list, as of December 13, 2005,
of all outstanding options to purchase shares of Company Common Stock
(collectively, but exclusive of rights under the ESPP, "Company Stock
Options") under the Company Stock Plans or otherwise, and all outstanding
Warrants, the number of shares of Company Common Stock (or other stock)
subject thereto, the grant dates, expiration dates, exercise or base prices
(if applicable) and vesting schedules thereof and the names of the holders
thereof. All (i) outstanding shares of Company Common Stock in respect of
which the Company has a right under specified circumstances to repurchase
such shares by the Company at a fixed purchase price and (ii) Company Stock
Options are evidenced by stock option agreements or other award agreements,
in each case in the forms set forth in Section 3.01(c) of the Company
Disclosure Schedule, and no stock option agreement, restricted stock
purchase agreement or other award agreement contains terms that are
inconsistent with such forms. Each Company Stock Option intended to qualify
as an "incentive stock option" under Section 422 of the Code so qualifies
and the exercise price of each other Company Stock Option is no less than
the fair market value of a share of Company Common Stock as determined on
the date of grant of such Company Stock Option. As of the close of business
on December 13, 2005, there were outstanding Company Stock Options to
purchase 2,118,891 shares of Company Common Stock with exercise prices on a
per share basis lower than the Merger Consideration, and the weighted
average exercise price of such Company Stock Options was equal to $11.40.
The maximum number of shares of Company Common Stock that could be
purchased with accumulated payroll deductions under the ESPP at the close
of business on December 31, 2005 (assuming the fair market value of a share
of Company Common Stock on such date is equal to the Merger Consideration
and payroll deductions continue at the current rate) is 10,870. As of the
close of business on December 13, 2005, there were outstanding Warrants to
purchase 78,900 shares of Company Common Stock with exercise prices on a
per share basis lower than the Merger Consideration. Each Company Stock
Option may, by its terms, be canceled in connection with the transactions
contemplated hereby for a lump sum cash payment in accordance with and to
the extent required by Section 5.04(a). All Warrants may, by their terms,
be canceled in exchange for a lump sum cash payment in accordance with and
to the extent required by Section 5.04(c). All outstanding shares of
capital stock of the Company are, and all shares which may be issued
pursuant to the Company Stock Options, the Warrants or rights under the
ESPP will be, when issued in accordance with the
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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 stockholders of the Company may vote.
Except as set forth above in this Section 3.01(c), (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 or (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 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 agreement with respect to the
voting of any such securities. Except as set forth above in this Section
3.01(c), 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 of
any Subsidiary of the Company or to issue, deliver or sell, or cause to be
issued, delivered or sold, any such securities of any Subsidiary of the
Company.
(d) Authority; Noncontravention. The Company has all requisite
corporate power and authority to execute and deliver this Agreement and,
subject to receipt of the Stockholder 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 hereby,
subject, in the case of the consummation of the Merger, to the obtaining of
the Stockholder 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,
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insolvency, moratorium, reorganization or similar laws affecting the rights
of creditors generally and the availability of equitable remedies. The
Board of Directors of the Company, at a meeting duly called and held at
which all directors of the Company were present, duly and unanimously
adopted resolutions (i) approving and declaring advisable this Agreement,
the Merger and the other transactions contemplated by this Agreement, (ii)
declaring that it is in the best interests of the stockholders 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 adoption of this Agreement be submitted as promptly as
practicable to a vote at a meeting of the stockholders of the Company and
(iv) recommending that the stockholders of the Company adopt 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 do not, and the consummation of
the Merger and the other transactions contemplated by this Agreement and
compliance 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, cancellation 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 Certificate 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 or other
contract, agreement, obligation, commitment, arrangement, understanding,
instrument, permit, franchise or license, whether oral or written (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 (i) the Stockholder Approval and
(ii) the governmental filings and the other matters referred to in the
following sentence, any (A) statute, law, ordinance, rule or regulation
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, in each case 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, losses or Liens that individually or in the aggregate
have not had and would not reasonably be expected to have a Material
Adverse Effect. 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
non-governmental self-regulatory agency, commission or authority (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
11
(1) the filing of a premerger notification and report form by the Company
under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended
(including the rules and regulations promulgated thereunder, the "HSR
Act"), and the receipt, termination or expiration, as applicable, of
approvals or waiting periods required under the HSR Act or any other
applicable competition, merger control, antitrust or similar law or
regulation, (2) the filing with the Securities and Exchange Commission (the
"SEC") of (A) a proxy statement relating to the adoption by the
stockholders of the Company of this Agreement (as amended or supplemented
from time to time, the "Proxy Statement") and (B) 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 Certificate of Merger with the Secretary
of State of the State of Delaware 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 required under
the rules and regulations of the Nasdaq National Market 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 have a Material Adverse Effect.
(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 May 11, 2004 (such documents, together with any
documents filed during such period by the Company with 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 the requirements of the provisions
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 corrective filing to any such Company SEC Document. Each of
the financial statements (including any related notes) of the Company
included in the Company SEC Documents
12
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
filing, has 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). Except as disclosed in the Company SEC Documents filed by the
Company on or after January 1, 2005 and publicly available prior to the
date of this Agreement, 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, been subject to the
reporting requirements of Sections 13(a) and 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 applicable
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. None
of the Company or 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 control over
financial reporting" (as defined in Rules 13a-15(f) and 15d-15(f) of the
Exchange Act) sufficient to provide reasonable assurance (A) that
transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP, consistently applied, (B) that
transactions are executed only in accordance with the authorization of
management and (C) regarding prevention or timely detection of the
unauthorized acquisition, use or disposition of the Company's assets.
(iv) The "disclosure controls and procedures" (as defined in Rules
13a-15(e) and 15d-15(e) of the Exchange Act) utilized by the Company 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
13
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 required to be disclosed is accumulated and communicated to the
Company's management as appropriate to allow timely decisions regarding
required disclosure and to enable the chief executive officer and chief
financial officer of the Company to make the certifications required under
the Exchange Act with respect to such reports.
(v) Neither the Company nor any of its Subsidiaries is a party to, or
has any commitment to become a party to, any joint venture, off balance
sheet partnership or any similar Contract (including any Contract or
arrangement relating to any transaction or relationship between or among
the Company and any of its Subsidiaries, on the one hand, and any
unconsolidated Affiliate, including any structured finance, special purpose
or limited purpose entity or person, on the other hand or any "off balance
sheet arrangements" (as defined in Item 303(a) of Regulation S-K under the
Exchange Act)), where the result, purpose or intended effect of such
Contract is to avoid disclosure of any material transaction involving, or
material liabilities of, the Company or any of its Subsidiaries in the
Company's or such Subsidiary's published financial statements or other
Company SEC Documents.
(vi) Since January 1, 2003, the Company has not received any oral or
written notification of any (x) "significant deficiency" or (y) "material
weakness" in the Company's internal controls over financial reporting.
There is no outstanding "significant deficiency" or "material weakness"
which the Company's independent accountants certify has not been
appropriately and adequately remedied by the Company. For purposes of this
Agreement, the terms "significant deficiency" and "material weakness" shall
have the meanings assigned to them in Release 2004-001 of the Public
Company Accounting Oversight Board, as in effect on the date hereof.
(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 the Proxy Statement will, at the date it is
first mailed to the stockholders of the Company and at the time of the
Stockholders' Meeting, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances
under which they are made, not misleading, except that no representation,
warranty or covenant 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 in writing specifically for inclusion or
incorporation by reference in the Proxy Statement. The Proxy Statement will
comply as to form in all material respects with the requirements of the
Exchange Act.
14
(g) Absence of Certain Changes or Events. Except for liabilities
incurred in connection with this Agreement and except as disclosed in the
Company SEC Documents filed by the Company and publicly available prior to
the date of this Agreement (the "Filed Company SEC Documents") or as
expressly permitted pursuant to Section 4.01(a)(i) through (xvi), since the
date of the most recent audited 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, (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, (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 director, officer, employee or
consultant of the Company or its Subsidiaries of any increase in
compensation, bonus or fringe or other benefits or any granting of any type
of compensation or benefits to any current or former director, officer,
employee or consultant not previously receiving or entitled to receive such
type of compensation or benefit, except for normal increases in cash
compensation in the ordinary course of business consistent with past
practice or as was required under any Company Benefit Agreement or Company
Benefit Plan in effect as of the date of the most recent audited financial
statements included in the Filed Company SEC Documents, (B) any granting by
the Company or any of its Subsidiaries to any current or former director,
officer, employee or consultant of the Company or any of its Subsidiaries
of any right to receive any increase in severance or termination pay, or
(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 agreement or
any other agreement, plan or policy with or involving any current or former
director, officer, employee or consultant of the Company or any of its
Subsidiaries or (2) any agreement with any current or former director,
officer, employee or consultant of the Company or any of its Subsidiaries,
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 agreements under this
clause (C), collectively, "Company Benefit Agreements"), (D) any adoption
of, any amendment to or any termination of any Company Benefit Plan, or (E)
any payment of any benefit under, or the grant of any award under, or any
amendment to, or termination of, any bonus, incentive, performance or other
compensation plan or arrangement, Company Benefit
15
Agreement or Company Benefit Plan (including in respect of stock options,
"phantom" stock, stock appreciation rights, restricted stock, "phantom"
stock rights, restricted stock units, deferred stock units, performance
stock units or other stock-based or stock-related awards or the removal or
modification of any restrictions in any Company Benefit Agreement or
Company Benefit Plan or awards made thereunder) except for normal increases
in cash compensation in the ordinary course of business consistent with
past practice or as required to comply with applicable law or any Company
Benefit Agreement or Company Benefit Plan in effect as of the date of the
most recent audited financial statements included in the Filed Company SEC
Documents, (v) any damage, destruction or loss to any asset of the Company
or any of its Subsidiaries, 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 as disclosed in the Filed Company SEC
Documents, 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 judgment, decree, injunction,
rule 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. (i) Except as disclosed in the Filed Company SEC
Documents and except with respect to licenses and other agreements relating
to intellectual property, which are the subject of Section 3.01(p), 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 of a nature required to be filed as an exhibit to a
report or filing under the Securities Act or the Exchange Act and the rules
and regulations promulgated thereunder. 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 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.
None of the Company or any of its Subsidiaries has entered into any
Contract with any Affiliate of the Company that is currently in effect
other than agreements that are
16
disclosed in the Filed Company SEC Documents. None of the Company or any of
its Subsidiaries is a party to or otherwise bound by any agreement or
covenant (A) restricting the Company's or any of its Affiliates' ability to
compete or by any agreement or covenant restricting in any respect the
research, development, distribution, sale, supply, license, marketing or
manufacturing of products or services of the Company or any of its
Affiliates, (B) containing a right of first refusal, right of first
negotiation or right of first offer or (C) containing any material
indemnity obligations to third parties.
(ii) Each employee, contractor or consultant of the Company and its
Subsidiaries who has proprietary knowledge of or information relating to
the manufacturing processes, or the formulation of the products, of the
Company or any of its Subsidiaries has executed and delivered to the
Company or the applicable Subsidiary of the Company an agreement or
agreements, substantially in the form(s) set forth in Section 3.01(i)(ii)
of the Company Disclosure Schedule, restricting such person's right to (A)
use and disclose confidential information of the Company or any of its
Subsidiaries and (B) enter into certain employment, consulting or similar
contractual relationships with companies that are competitors of the
Company and its Subsidiaries for a specified period of time.
(j) Compliance with Laws; Environmental Matters. (i) Except with
respect to Environmental Laws, the Employee Retirement Income Security Act
of 1974, as amended ("ERISA") and taxes, which are the subjects of Sections
3.01(j)(ii), 3.01(l) and 3.01(n), respectively, and except as set forth in
the Filed Company SEC Documents, each of the Company and its Subsidiaries
is in compliance with all statutes, laws, ordinances, rules, regulations,
judgments, orders and decrees of any Governmental Entity applicable to it,
its properties or other assets or its business or operations (collectively,
"Legal Provisions"), 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"),
and the regulations of the Federal Food and Drug Administration (the "FDA")
promulgated thereunder, necessary for it to own, lease or operate its
properties and other assets and to carry on its business and operations as
presently conducted and as currently proposed by its management to be
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. 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 cancellation of any
such Permit that
17
individually or in the aggregate would reasonably be expected to have a
Material Adverse Effect. To the Knowledge of the Company, no material
action, demand, requirement or investigation by any Governmental Entity and
no material suit, action or proceeding by any other person, in each case
with respect to the Company or any of its Subsidiaries or any of their
respective properties or other assets under any Legal Provision, is pending
or threatened.
(ii) Except for those matters disclosed in the Filed Company SEC
Documents: (A) each of the Company and its Subsidiaries is, and has been,
in compliance in all material respects with all Environmental Laws and has
obtained and complied with all material Permits required under any
Environmental Laws to own, lease or operate its properties or other assets
and to carry on its business and operations as presently conducted and as
currently proposed by its management to be conducted; (B) to the Knowledge
of the Company, there have been no Releases or threatened Releases of
Hazardous Materials in, on, under or affecting any properties currently or
formerly owned, leased or operated by the Company or any of its
Subsidiaries that would require investigation or clean-up under
Environmental Laws; (C) there is no material investigation, suit, claim,
action or proceeding pending, or to the Knowledge of the Company,
threatened against or affecting the Company or any of its Subsidiaries
relating to or arising under Environmental Laws, and neither the Company
nor any of its Subsidiaries has received any notice of any such
investigation, suit, claim, action or proceeding; (D) neither the Company
nor any of its Subsidiaries is subject to material restrictions on the sale
or distribution of its products as a result of any existing, pending or
proposed requirement of Environmental Law and such products are not subject
to material restrictions regarding post-consumer use handling or recycling;
(E) neither the Company nor any of its Subsidiaries has entered into or
assumed by contract or operation of law or otherwise, any material
obligation, liability, order, settlement, judgment, injunction or decree
relating to or arising under Environmental Laws; and (F) there are no
facts, circumstances or conditions that would reasonably be expected to
form the basis for any material 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 common law), statutes, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices, Permits,
treaties or binding agreements issued, promulgated or entered into by any
Governmental Entity, relating in any way to the environment, preservation
or reclamation of natural resources or endangered species, the presence,
management, Release or threat of Release of, or exposure to, Hazardous
Materials (including any requirements related to the sale, labelling or
recycling of electronic equipment), or to human health and safety. The term
"Hazardous Materials" means (1) metals (including lead, mercury or
cadmium), petroleum products and by-products, asbestos and
asbestos-containing materials, urea formaldehyde foam insulation, medical
or infectious wastes, polychlorinated biphenyls, radon gas, radioactive
18
substances, chlorofluorocarbons and all other ozone-depleting substances or
(2) any 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) Absence of Changes in Company Benefit Plans; Labor Relations.
Except as disclosed in the Filed Company SEC Documents or as expressly
permitted pursuant to Section 4.01(a)(i) through (xvi), since the date of
the most recent audited financial statements included in the Filed Company
SEC Documents, there has not been any adoption or amendment by the Company
or any of its Subsidiaries of any collective bargaining agreement or any
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, arrangement,
agreement or understanding (whether or not legally binding) 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"),
in each case providing benefits to any current or former director, officer,
employee or consultant of the Company or any of its Subsidiaries
(collectively, the "Company Benefit Plans"), or any material change in any
actuarial or other assumption used to calculate funding obligations with
respect to any Company Pension Plans, or any change in the manner in which
contributions to any Company Pension Plans are made or the basis on which
such contributions are determined, other than amendments or other changes
as required to ensure that such Company Benefit Plan is not then out of
compliance with applicable law, or reasonably determined by the Company to
be necessary or appropriate to preserve the qualified status of a Company
Pension Plan under Section 401(a) of the Code. Any shares of capital stock,
options, rights, warrants or other securities issued, granted or purchased
under any Company Benefit Plan have been issued, granted or purchased in
compliance with applicable Legal Provisions. Except as disclosed in the
Filed Company SEC Documents, there exist no currently binding Company
Benefit Agreements. There are no collective bargaining or other labor union
agreements 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
hereof, 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. As of the date hereof, since January 1, 2002, neither the
Company nor any of its Subsidiaries has experienced any labor disputes,
union organization attempts or work stoppages, slowdowns or lockouts due to
labor disagreements.
19
(l) ERISA Compliance. (i) Section 3.01(l)(i) of the Company Disclosure
Schedule contains a complete and accurate list of each Company Benefit Plan
that is an "employee pension benefit plan" (as defined in Section 3(2) of
ERISA) (sometimes referred to herein as a "Company Pension Plan"), each
Company Benefit Plan that is an "employee welfare benefit plan" (as defined
in Section 3(1) of ERISA) and all other Company Benefit Plans. The Company
has provided to Parent complete and accurate copies of (A) each Company
Benefit Plan (or, in the case of any unwritten Company Benefit Plans,
descriptions thereof), (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
agreement and insurance or group annuity contract relating to any Company
Benefit Plan. 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 agreements.
(ii) 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 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
Notice 2001-42) and the Economic Growth and Tax Relief Reconciliation Act
of 2001, 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
(or, to the Knowledge of the Company, has revocation been threatened) and
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. All Company Pension Plans
required to have been approved by any foreign Governmental Entity have been
so approved, no such approval has been revoked (or, to the Knowledge of the
Company, has revocation been threatened) and no event has occurred since
the date of the most recent approval or application therefor relating to
any such Company Pension Plan that would reasonably be expected to
materially affect any such approval relating thereto or materially increase
the costs relating thereto. The Company has delivered 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
20
amendments to any Company Pension Plan as to which a favorable
determination letter has not yet been received.
(iii) Neither the Company nor any Commonly Controlled Entity has (A)
maintained, contributed to or been required to contribute to any Company
Benefit Plan that is subject to Title IV of ERISA or (B) has any
unsatisfied liability under Title IV of ERISA.
(iv) 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 in all material respects. 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 would give rise to any material liability, and, to the Knowledge of
the Company, there are not any facts that could give rise to any material
liability in the event of any such investigation, claim, suit or
proceeding.
(v) 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. Neither any Company Pension Plan nor any
single-employer plan of any Commonly Controlled Entity 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.
(vi) With respect to each Company Benefit Plan, (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 would
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, a
trustee, administrator or other fiduciary of any trust created under any
Company Benefit Plan, 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 nor any of its Subsidiaries 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 would
21
reasonably be expected to subject the Company or any of its Subsidiaries
or, to the Knowledge of the Company, any trustee, administrator or other
fiduciary, to any liability for breach of fiduciary duty under ERISA or any
other applicable law. No Company Benefit Plan or related trust has been
terminated during the last five years, nor has there been any "reportable
event" (as that term is defined in Section 4043 of ERISA) for which the
30-day reporting requirement has not been waived with respect to any
Company Benefit Plan during the last five years, and no notice of a
reportable event will be required to be filed in connection with the
transactions contemplated by this Agreement.
(vii) Section 3.01(l)(vii) of the Company Disclosure Schedule
discloses whether each Company Benefit Plan that is an employee welfare
benefit plan is (A) unfunded or self-insured, (B) funded through a "welfare
benefit fund", as such term is defined in Section 419(e) of the Code, or
other funding mechanism or (C) insured. Each such employee welfare benefit
plan may be amended or terminated (including with respect to benefits
provided to retirees and other former employees) without material liability
(other than benefits then payable under such plan without regard to such
amendment or termination) 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 statute. Neither the Company nor any of its Subsidiaries
has any material obligations for retiree health or life insurance benefits
under any Company Benefit Plan (other than for continuation coverage
required under Section 4980B(f) of the Code).
(viii) None of the execution and delivery of this Agreement, the
Stockholder Agreement, the obtaining of the Stockholder Approval or the
consummation of the Merger or any other transaction expressly contemplated
by this Agreement or the Stockholder Agreement (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. The total amount of all cash
compensation and benefit payments and the fair market value of all non-cash
benefits (other than Company Stock Options) that may become payable or
provided to any director, officer, employee or consultant of the Company or
any of its Subsidiaries under the Company Benefit Agreements (assuming for
such purpose that such individuals' employment were terminated
22
immediately following the Effective Time as if the Effective Time were the
date hereof) will not exceed the amount set forth in Section 3.01(l)(viii)
of the Company Disclosure Schedule.
(ix) 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.
(x) No 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.
(m) No Excess Parachute Payments. Other than payments or benefits that
may be made to the persons listed in Section 3.01(m) of the Company
Disclosure Schedule ("Primary Company Executives"), no amount or other
entitlement or economic benefit that could be received (whether in cash or
property or the vesting of property) as a result of the execution and
delivery of this Agreement, the Stockholder Agreement, the obtaining of the
Stockholder Approval, the consummation of the Merger or any other
transaction contemplated by this Agreement or the Stockholder Agreement
(including as a result of termination of employment on or following the
Effective Time) by or for the benefit of any director, officer, employee or
consultant of the Company or any of its Affiliates who is a "disqualified
individual" (as such term is defined in Treasury Regulation Section
1.280G-1) under any Company Benefit Plan, Company Benefit Agreement or
otherwise would be characterized as an "excess parachute payment" (as such
term is defined in Section 280G(b)(1) of the Code), and no disqualified
individual is entitled to receive any additional payment from the Company
or any of its Subsidiaries, the Surviving Corporation or any other person
in the event that the excise tax required by Section 4999(a) of the Code is
imposed on such disqualified individual (a "Parachute Gross Up Payment").
Section 3.01(m) of the Company Disclosure Schedule sets forth, calculated
as of the date of this Agreement, (i) the "base amount" (as such term is
defined in Section 280G(b)(3) of the Code) for each Primary Company
Executive and each other disqualified individual (defined as set forth
above) whose Company Stock Options will vest pursuant to their terms in
connection with the execution and delivery of this Agreement, the
Stockholder Agreement, the obtaining of the Stockholder Approval, the
consummation of the Merger or any other transaction contemplated by this
Agreement or the Stockholder Agreement (including as a result of any
termination of employment on or following the Effective Time) and (ii) the
estimated maximum amount of "parachute payments" as defined in Section 280G
of the Code that could be paid or provided to each Primary Company
Executive as a result of the execution and delivery of this Agreement,
23
the Stockholder Agreement, the obtaining of the Stockholder Approval, the
consummation of the Merger or any other transaction contemplated by this
Agreement or the Stockholder Agreement (including as a result of any
termination of employment on or following the Effective Time).
(n) Taxes. (i) Each of the Company, its Subsidiaries and each Company
Consolidated Group has filed or has caused to be filed in a timely manner
(within any applicable extension period) all tax returns required to be
filed with any taxing authority pursuant to the Code (and any applicable
U.S. Treasury regulations) or applicable state, local or foreign tax laws.
All such tax returns are complete and accurate in all material respects and
have been prepared in substantial compliance with all applicable laws and
regulations. Each of the Company, its Subsidiaries and each Company
Consolidated Group has timely paid or caused to be paid (or the Company has
paid on its behalf) all taxes due and owing, and the most recent financial
statements contained in the Filed Company SEC Documents reflect an adequate
reserve (determined in accordance with GAAP) (excluding any reserves for
deferred taxes established to reflect timing differences between book and
tax income) for all taxes payable by the Company and its Subsidiaries for
all taxable periods and portions thereof accrued through the date of such
financial statements.
(ii) No tax return of the Company or any of its Subsidiaries or any
Company Consolidated Group is or has ever been under audit or examination
by any taxing authority, and no notice of such an audit or examination has
been received by the Company or any of its Subsidiaries or any Company
Consolidated Group. There is no deficiency, refund litigation, proposed
adjustment or matter in controversy with respect to any material amount of
taxes due and owing by the Company or any of its Subsidiaries or any
Company Consolidated Group. Each deficiency resulting from any completed
audit or examination relating to taxes by any taxing authority has been
timely paid or is being contested in good faith and has been reserved for
on the books of the Company. The relevant statute of limitation is closed
with respect to Federal, state, local and foreign income tax returns of the
Company, its Subsidiaries and any Company Consolidated Group for all years
through December 31, 2001. There is no currently effective agreement or
other document extending, or having the effect of extending, the period of
assessment or collection of any taxes of the Company or its Subsidiaries or
any Company Consolidated Group, nor has any request been made for any such
extension, and no power of attorney (other than powers of attorney
authorizing employees of the Company to act on behalf of the Company) with
respect to any taxes has been executed or filed with any taxing authority.
(iii) None of the Company or 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 (for purposes of the financial
statements of the Company included in the Filed Company SEC Documents) in a
prior taxable
24
period (or portion of a taxable period) but was not recognized for tax
purposes in any prior taxable period as a result of (A) the installment
method of accounting, (B) the completed contract method of accounting, (C)
the long-term contract method of accounting, (D) the cash method of
accounting or Section 481 of the Code or (E) 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 financial statements of the Company included in the Filed Company SEC
Documents.
(iv) The Company and its Subsidiaries have complied with all
applicable statutes, laws, ordinances, rules and regulations relating to
the payment and withholding of any material amount of taxes (including
withholding of taxes pursuant to Sections 1441, 1442, 3121 and 3402 of the
Code and similar provisions under any Federal, state, local or foreign tax
laws) and have, within the time and the manner prescribed by law, withheld
from and paid over to the proper governmental authorities all material
amounts required to be so withheld and paid over under applicable laws.
(v) Within the two-year period ending on the Closing Date, none of the
Company or any of its Subsidiaries has constituted either a "distributing
corporation" or a "controlled corporation" as such terms are defined in
Section 355 of the Code in a distribution of stock outside of the
affiliated group of which the Company is the common parent qualifying or
intended to qualify for tax-free treatment (in whole or in part) under
Section 355(a) or 361 of the Code.
(vi) Neither the Company nor any of its Subsidiaries joins or has
joined, for any taxable period in the filing of any affiliated, aggregate,
consolidated, combined or unitary tax return, other than tax returns for
the affiliated, aggregate, consolidated, combined or unitary group of which
the Company is the common parent.
(vii) No claim has ever been made by any authority in a jurisdiction
where any of the Company or its Subsidiaries does not file a tax return
that it is, or may be, subject to a material amount of tax by that
jurisdiction.
(viii) Neither the Company nor any of its Subsidiaries is a party to
or bound by any tax sharing agreement, tax indemnity obligation or similar
agreement, arrangement or practice with respect to taxes (including any
advance pricing agreement, closing agreement or other agreement relating to
taxes with any taxing authority).
(ix) To the Knowledge of the Company, the net operating losses of the
Company through December 31, 2004, are subject to limitations on their use
as set forth in the June 7, 2005, letter addressed to the Company by Smart
and Associates, LLP, a copy of which was provided to Parent. The Company
has
25
reviewed the representations and assumptions in the letter and they are
complete and accurate in all material respects.
(x) Neither the Company nor any of its Subsidiaries has entered into
any "listed transaction" and, to the Knowledge of the Company, neither the
Company nor any of its Subsidiaries has entered into any "reportable
transaction" (each as defined in Treasury Regulation Section 1.6011-4(b))
during the five years prior to the date of this Agreement.
(xi) No taxing authority has asserted any material liens for taxes
with respect to any assets or properties of the Company or its
Subsidiaries, except for statutory liens for taxes not yet due and payable.
(xii) Neither the Company nor any of its Subsidiaries has been a
United States real property holding corporation within the meaning of
Section 897(c)(2) of the Code during the applicable period specified in
Section 897(c)(1)(A)(ii) of the Code.
(xiii) As used in this Agreement (A) "tax" or "taxes" shall include
(whether disputed or not) all (x) Federal, state, local and foreign income,
property, sales, use, excise, withholding, payroll, employment, social
security, capital gain, alternative minimum, transfer and other taxes and
similar governmental charges, including any interest, penalties and
additions with respect thereto, (y) liability for the payment of any
amounts of the type described in clause (x) as a result of being a member
of an affiliated, consolidated, combined, unitary or aggregate group and
(z) liability for the payment of any amounts as a result of being party to
any tax sharing agreement or as a result of any express or implied
obligation to indemnify any other person with respect to the payment of any
amounts of the type described in clause (x) or (y); (B) "Company
Consolidated Group" means any affiliated group within the meaning of
Section 1504(a) of the Code, or any other similar state, local or foreign
law, in which the Company (or any Subsidiary of the Company) is or has ever
been a member or any group of corporations with which the Company files,
has filed or is or was required to file an affiliated, consolidated,
combined, unitary or aggregate tax return; (C) "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 (D) "tax return" or "tax returns" means all
returns, declarations of estimated tax payments, reports, estimates,
information returns and statements, including any related or supporting
information with respect to any of foregoing, filed or to be filed with any
taxing authority in connection with the determination, assessment,
collection or administration of any taxes.
(o) Title to Properties. (i) Neither the Company nor any of its
Subsidiaries owns any real property. Each of the Company and its
Subsidiaries has good and 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
26
tangible assets necessary for the conduct of its business as currently
conducted and as currently proposed by its management to be 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 materially
interfered with, and would not reasonably be expected to materially
interfere with, its ability to conduct its business as presently conducted
and as currently proposed by its management to be conducted. All such
properties and other assets, other than properties and other assets in
which the Company or any of its Subsidiaries has a leasehold or sublease
interest or other comparable contract right, are free and clear of all
Liens, except for Liens that individually or in the aggregate have not
materially interfered with, and would not reasonably be expected to
materially interfere with, the ability of the Company or any of its
Subsidiaries to conduct their respective businesses as presently conducted
and as currently proposed by its management to be conducted.
(ii) 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
noncompliance or failure to 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. Each of the Company and its Subsidiaries is
in possession of the properties or assets purported to be leased under all
its material leases. None of the Company or 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 material lease or sublease to which
it is a party.
(p) Intellectual Property. (i) Subject to Sections 3.01(p)(ii) and
3.01(p)(v), each of the Company and its Subsidiaries owns, or is validly
licensed or otherwise has the right to use (without any obligation to make
any fixed or contingent payments, including royalty payments), all patents,
patent applications, trademarks, trade dress, trademark rights, trade
names, trade name rights, domain names, service marks, service xxxx rights,
copyrights, software, technical know-how and other proprietary intellectual
property rights and computer programs other than commercial off the shelf
software (collectively, "Intellectual Property Rights") which are material
to the conduct of the business of the Company and its Subsidiaries, taken
as a whole, in each case free and clear of all Liens. The Company has the
legal power to convey the rights granted to it under any license for any
Intellectual Property Right taken by the Company and its Subsidiaries. The
Company is not subject to any contractual, legal or other restriction on
the use of any Intellectual Property Rights which are owned by or licensed
to the Company.
27
(ii) To the Knowledge of the Company, the Company has not nor has any
of its Subsidiaries infringed or is infringing (including with respect to
the development, clinical testing, manufacture, use or sale by the Company
or any of its Subsidiaries of their respective commercial products or of
their respective Intellectual Property Rights) the valid rights of any
person with regard to any Intellectual Property Right which individually or
in the aggregate have had or would reasonably be expected to have a
Material Adverse Effect. To the Knowledge of the Company, no person or
persons has infringed or are infringing the rights of the Company or any of
its Subsidiaries with respect to any Intellectual Property Right in a
manner which individually or in the aggregate has had or would reasonably
be expected to have a Material Adverse Effect.
(iii) No material claims are pending or, to the Knowledge of the
Company, threatened with regard to the ownership or licensing by the
Company or any of its Subsidiaries of any of their respective Intellectual
Property Rights.
(iv) Section 3.01(p)(iv) of the Company Disclosure Schedule sets
forth, as of the date hereof, a complete and accurate list of all patents
and applications therefor, registered trademarks and applications therefor,
domain name registrations (if any) and copyright registrations (if any),
that, in each case, are owned by or licensed to the Company or any of its
Subsidiaries. All patents and patent applications required to be listed in
Section 3.01(p)(iv) of the Company Disclosure Schedule are either (a) owned
by, or are subject to an obligation of assignment to, the Company or a
Subsidiary of the Company free and clear of all Liens or (b) licensed to
the Company or a Subsidiary of the Company free and clear (to the Knowledge
of the Company) of all Liens. The patent applications listed in Section
3.01(p)(iv) of the Company Disclosure Schedule that are owned by the
Company or any of its Subsidiaries are (and such applications that are
licensed to the Company or any of its Subsidiaries are to the Company's
Knowledge) pending and have not been abandoned, and have been and continue
to be timely prosecuted. All patents, registered trademarks and
applications therefor owned by the Company or any of its Subsidiaries have
been (and all such patents, registered trademarks and applications licensed
to the Company or any of its Subsidiaries have been to the Company's
Knowledge) duly registered and/or filed with or issued by each appropriate
Governmental Entity in the jurisdiction indicated in Section 3.01(p)(iv) of
the Company Disclosure Schedule, all necessary affidavits of continuing use
have been (or, with respect to licenses, to the Company's Knowledge have
been) timely filed, and all necessary maintenance fees have been (or, with
respect to licenses, to the Company's Knowledge have been) timely paid to
continue all such rights in effect. None of the patents listed in Section
3.01(p)(iv) of the Company Disclosure Schedule that are owned by the
Company or any of its Subsidiaries has (and no such patents that are
licensed to the Company or any of its Subsidiaries has to the Company's
Knowledge) expired or been declared invalid, in whole or in part, by any
Governmental Entity. There are no material ongoing oppositions or
cancellations
28
or other proceedings involving any of the trademarks or trademark
applications listed in Section 3.01(p)(iv) of the Company Disclosure
Schedule and owned by the Company or any of its Subsidiaries (or to the
Knowledge of the Company, licensed to the Company or any of its
Subsidiaries). There are no material ongoing interferences, oppositions,
reissues, reexaminations or other proceedings involving any of the patents
or patent applications listed in Section 3.01(p)(iv) of the Company
Disclosure Schedule and owned by the Company or any of its Subsidiaries (or
to the Company's Knowledge, 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. To the Knowledge of the Company, there are
no published patents, patent applications, articles or other prior art
references that could adversely affect the validity of any patent listed in
Section 3.01(p)(iv) of the Company Disclosure Schedule in a material way.
Each of the patents and patent applications listed in Section 3.01(p)(iv)
of the Company Disclosure Schedule that are owned by the Company or any of
its Subsidiaries properly identifies (and to the Knowledge of the Company
such patents and applications licensed to the Company or any of its
Subsidiaries properly identify) each and every inventor of the claims
thereof as determined in accordance with the laws of the jurisdiction in
which such patent is issued or such patent application is pending. Each
inventor named on the patents and patent applications listed in Section
3.01(p)(iv) of the Company Disclosure Schedule that are owned by the
Company or any of its Subsidiaries has executed (and such inventors named
on such patents and applications licensed to the Company or any of its
Subsidiaries to the Company's Knowledge have executed) an agreement
assigning his, her or its entire right, title and interest in and to such
patent or patent application, and the inventions embodied and claimed
therein, to the Company or a Subsidiary of the Company, or in the case of
licensed Patents, to the appropriate owners. To the Knowledge of the
Company, no such inventor has any contractual or other obligation that
would preclude any such assignment or otherwise conflict with the
obligations of such inventor to the Company or such Subsidiary under such
agreement with the Company or such Subsidiary.
(v) Section 3.01(p)(v) of the Company Disclosure Schedule sets forth a
complete and accurate list of all options, rights, licenses or interests of
any kind relating to Intellectual Property Rights granted (i) to the
Company or any of its Subsidiaries (other than software licenses for
generally available software and except pursuant to employee proprietary
inventions agreements (or similar employee agreements), non-disclosure
agreements and consulting agreements entered into by the Company or any of
its Subsidiaries in the ordinary course of business), or (ii) by the
Company or any of its Subsidiaries to any other person (including any
obligations of such other person to make any fixed or contingent payments,
including royalty payments). All obligations for payment of monies by the
Company or any of its Subsidiaries in connection with such options, rights,
licenses or interests have been satisfied in a timely manner.
29
(vi) The Company and its Affiliates have used reasonable efforts and
taken all commercially necessary steps to maintain their trade secrets in
confidence, including the development of a policy for the protection of
intellectual property and periodic training for all employees of the
Company and its Subsidiaries on the implementation of such policy;
requiring all employees of the Company and its Subsidiaries to execute
confidentiality agreements with respect to intellectual property developed
for or obtained from the Company or any of its Subsidiaries; making
reasonable efforts to advise employees of the Company and its Subsidiaries
that were voluntarily or involuntarily severed from the Company or any of
its Subsidiaries of their continuing obligation to maintain such trade
secrets in confidence; and entering into licenses and Contracts that
generally require licensees, contractors and other third persons with
access to such trade secrets to keep such trade secrets confidential (which
licenses and Contracts will be enforceable to the extent sufficient to
fully exploit all such trade secrets).
(vii) 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, cancellation 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. Section 3.01(p)(vii) 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.
(q) Voting Requirements. The affirmative vote of holders of a majority
of the outstanding shares of Company Common Stock at the Stockholders'
Meeting or any adjournment or postponement thereof to adopt this Agreement
(the "Stockholder Approval") is the only vote of the holders of any class
or series of capital stock of the Company necessary to adopt this Agreement
and approve the transactions contemplated hereby.
(r) State Takeover Statutes. The Board of Directors of the Company has
unanimously approved the terms of this Agreement and the Stockholder
Agreement and the consummation of the Merger and the other transactions
contemplated by this Agreement and the Stockholder Agreement, and such
approval represents all the actions necessary to render inapplicable to
this Agreement, the Stockholder Agreement, the Merger and the other
transactions contemplated by this Agreement and the Stockholder Agreement,
the restrictions on "business combinations" set forth in Section 203 of the
DGCL, to the extent
30
such restrictions would otherwise be applicable to this Agreement, the
Stockholder Agreement, the Merger and the other transactions contemplated
by this Agreement and the Stockholder Agreement. No other state takeover
statute or similar statute or regulation applies to this Agreement, the
Stockholder Agreement, the Merger or the other transactions contemplated by
this Agreement or the Stockholder Agreement.
(s) Brokers and Other Advisors. No broker, investment banker,
financial advisor or other person (other than Xxxxx Xxxxxxx & Co.
("Piper")), 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 agreements related to the engagement of the
persons to whom such fees are payable. The fees and expenses of all
accountants, brokers, financial advisors (including Piper), legal counsel
(including Xxxxxx Xxxxxxxx LLP), financial printers and other persons
retained by the Company incurred or to be incurred by the Company in
connection with this Agreement or the Stockholder Agreement or the
transactions contemplated hereby or thereby will not exceed the amount set
forth in Section 3.01(s) of the Company Disclosure Schedule.
(t) Opinion of Financial Advisor. The Board of Directors of the
Company has received the written opinion of Piper, dated the date hereof,
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 the written opinion of Piper has been or promptly
will be delivered to Parent.
(u) Research, Development, Distribution, Marketing, Supply and
Manufacturing Agreements. (i) Section 3.01(u) of the Company Disclosure
Schedule sets forth, as of the date hereof, a complete and accurate list of
all Contracts to which the Company or any of its Subsidiaries is a party
relating to research, clinical trial, development, distribution, sale,
supply, license, marketing, co-promotion or manufacturing by third parties
of (x) products (including products under development) of the Company or
any Subsidiary of the Company, (y) products (including products under
development) licensed by the Company or any Subsidiary of the Company, or
(z) the Intellectual Property Rights of the Company or any Subsidiary of
the Company (collectively, all such Contracts, the "Specified Contracts").
The Company has made available to Parent a complete and accurate copy of
each Specified Contract.
(ii) None of the Specified Contracts (A) grants, or obligates the
Company or any Subsidiary of the Company to grant, an exclusive right (or,
in the case of any product that has not been approved for commercial sale
in the United States, any right) to such third party for the research,
clinical trial, development,
31
distribution, sale, supply, license, marketing, co-promotion or
manufacturing of any such product, patent or other Intellectual Property
Right, (B) provides for the payment by the Company or any Subsidiary of the
Company of any early termination fees or (C) requires or obligates the
Company or any Subsidiary of the Company to purchase specified minimum
amounts of any product or to perform or conduct research, clinical trials
or development for any person other than the Company or any Subsidiary of
the Company.
(v) Regulatory Compliance. (i) As to each product or product candidate
subject to the FDCA or similar Legal Provisions in any foreign jurisdiction
that is or has been developed, manufactured, tested, distributed or
marketed by or on behalf of the Company or any of its Subsidiaries (each
such product or product candidate, a "Medical Device"), each such Medical
Device is being or has been 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, good clinical practices, good
laboratory practices, labeling, advertising, record keeping, filing of
reports and security, 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 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
material violation applicable to any Medical Device by the Company or any
of its Subsidiaries of any Legal Provision.
(ii) Except as disclosed in the Filed Company SEC Documents, no
Medical Device is under consideration by senior management of the Company
or any of its Subsidiaries for, or has been recalled, withdrawn, suspended
or discontinued by the Company or any of its Subsidiaries in the United
States or outside the United States (whether voluntarily or otherwise). 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 nor have
any such proceedings been pending at any prior time.
(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 cleared or approved, the Company and its
Subsidiaries are in compliance with 21 U.S.C. Sections 360 and 360e and 21
C.F.R. Parts 812 or 814, respectively, and similar Legal Provisions and all
terms and conditions of such applications, except
32
for any such failure or failures to be in compliance which individually or
in the aggregate has 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. Section 360 and 21 C.F.R. Part 807 and
all similar Legal Provisions.
(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. Section 351 (or similar Legal Provisions), (B)
misbranded within the meaning of 21 U.S.C. Section 352 (or similar Legal
Provisions) or (C) a product that is in violation of 21 U.S.C. Sections 360
or 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, would
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. Section 335a(a) or any similar
Legal Provision or authorized by 21 U.S.C. Section 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) None of the Company or 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 material action to withdraw its
approval or request the recall of any Medical Device, (b) commenced, or
threatened to initiate, any material action to enjoin production of any
Medical Device or (c) commenced, or threatened to initiate, any material
action to enjoin the production of any Medical Device produced at any
facility where any Medical Device is manufactured, tested or packaged.
33
(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.
(w) Insurance. Section 3.01(w) of the Company Disclosure Schedule
contains a complete and accurate list of all policies of fire, liability,
workers' compensation, title and other forms of insurance owned, held by or
applicable to the Company (or its assets or business) as of the date
hereof, and the Company has heretofore made available to Parent a complete
and accurate copy of all such policies, including all occurrence-based
policies applicable to the Company (or its assets or business) for all
periods prior to the Closing Date. All such policies (or substitute
policies with substantially similar terms and underwritten by insurance
carriers with substantially similar or higher ratings) are in full force
and effect, all premiums with respect thereto covering all periods up to
and including the Closing Date have been paid, and no notice of
cancellation or termination has been received with respect to any such
policy except for such policies, premiums, cancellations or terminations
that individually or in the aggregate have not had and would not reasonably
be expected to have a Material Adverse Effect. Such policies are
sufficient, in the reasonable opinion of the Company, for compliance by the
Company with (i) all requirements of applicable laws and (ii) all Contracts
to which the Company is a party, and each of the Company and its
Subsidiaries has complied in all material respects with the provisions of
each such policy under which it is an insured party. The Company has not
been refused any insurance with respect to its assets or operations by any
insurance carrier to which it has applied for any such insurance or with
which it has carried insurance, during the last five years. There are no
pending or, to the Knowledge of the Company, threatened material claims
under any insurance policy.
SECTION 3.02. Representations and Warranties of Parent and Sub. 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 to carry on its business as now
being conducted. Each of Parent and Sub is duly qualified or licensed to do
business and is in good standing in each material jurisdiction in which the
nature of its business or the ownership, leasing or operation of its
properties makes such qualification or licensing necessary.
(b) Authority; Noncontravention. Each of Parent and Sub has all
requisite corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated by this
Agreement. The execution
34
and delivery of this Agreement and the consummation 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 hereby. This
Agreement and the transactions contemplated hereby do not require approval
of the holders of any shares of capital stock of Parent. 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, moratorium, reorganization or
similar laws affecting the rights of creditors generally and the
availability of equitable remedies. The execution and delivery of this
Agreement do not, and the consummation of the Merger and the other
transactions contemplated by this Agreement and compliance 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, cancellation 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 Restated
Certificate of Incorporation or By-laws of Parent or the Certificate of
Incorporation or 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,
in any way that would prevent, materially impede or materially delay the
consummation by Parent of the Merger (including the payments required to be
made pursuant to Article II) or the other transactions contemplated hereby
or (z) subject to the governmental filings and other matters referred to in
the following sentence, any (A) statute, law, ordinance, rule or regulation
applicable to Parent or Sub or their respective properties or other assets
or (B) order, writ, injunction, decree, judgment or stipulation, in each
case applicable to Parent or Sub or their respective properties or other
assets, and in each case, in any way that would prevent, materially impede
or materially delay the consummation by Parent of the Merger (including the
payments required to be made pursuant to Article II) or the other
transactions contemplated hereby. No material 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) the filing of a premerger notification and report form by Parent under
the HSR Act and the receipt, termination or expiration, as applicable, of
approvals or waiting periods required under the HSR Act or any other
applicable competition, merger control, antitrust or similar law or
regulation and (2) the filing of the Certificate of Merger with the
Secretary of State of the State of Delaware.
35
(c) 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 the Proxy Statement will, at the date it is
first mailed to the stockholders of the Company and at the time of the
Stockholders' Meeting, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances
under which they are made, not misleading.
(d) Interim Operations of Sub. Sub was formed solely for the purpose
of engaging in the transactions contemplated hereby, has engaged in no
other business activities and has conducted its operations only as
contemplated hereby.
(e) Capital Resources. Parent has sufficient cash to pay the aggregate
Merger Consideration.
(f) Ownership. Parent and its Affiliates, directly or indirectly,
beneficially own or control only the number and class of shares of the
Company set forth in the Company's definitive proxy statement for the
Company's 2005 annual meeting.
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
pursuant to Section 4.01(a)(i) through (xvi) of 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 and as currently proposed by the
Company to be conducted prior to the Closing (including in respect of research,
development and clinical trial activities and programs) and in compliance in all
material respects with all applicable laws, rules, regulations and treaties 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 with the intention that its goodwill and
ongoing business shall be unimpaired at the Effective Time. 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 by
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
36
stock, (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 required under 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 such plans, arrangements or Contracts 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 the issuance of
shares of Company Common Stock upon the exercise of Company Stock Options
or Warrants, in each case outstanding on the date hereof in accordance with
their terms on the date hereof);
(iii) amend the Company Certificate or the Company By-laws or other
comparable charter or organizational documents of any of the Company's
Subsidiaries, except as may be required by law or the rules and regulations
of the SEC or The Nasdaq Stock Market, Inc.;
(iv) directly or indirectly acquire (x) by merging or consolidating
with, or by purchasing assets of, or by any other manner, any person or
division, business or equity interest of any person or (y) any asset or
assets that, individually, has a purchase price in excess of $50,000 or, in
the aggregate, have a purchase price in excess of $250,000, except for new
capital expenditures, which shall be subject to the limitations of clause
(vii) below, and except for purchases of components, raw materials or
supplies in the ordinary course of business consistent with past practice;
(v) (x) sell, lease, license, mortgage, sell and leaseback or
otherwise encumber or subject to any Lien or otherwise dispose of any of
its properties or other assets or any interests therein (including
securitizations), except for sales of inventory and used equipment in the
ordinary course of business consistent with past practice or (y) enter
into, modify or amend any lease of 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,
37
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 or (y) make
any loans, advances or capital contributions to, or investments in, any
other person, other than to employees in respect of travel expenses in the
ordinary course of business consistent with past practice;
(vii) make any new capital expenditure or expenditures which, in the
aggregate, are in excess of $250,000;
(viii) except as required by law or any judgment, (v) pay, discharge,
settle or satisfy any 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 financial statements (or, if applicable, 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 indebtedness, (x) waive or assign any claims or
rights of substantial value or (y) waive any benefits of, or agree to
modify in any respect, or, subject to the terms hereof, 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, 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) (x) enter into or negotiate any Contracts relating to research,
clinical trial, development, distribution, sale, supply, license,
marketing, co-promotion or manufacturing by third parties of products
(including products under development) of the Company or any Subsidiary of
the Company or products (including products under development) licensed by
the Company or any Subsidiary of the Company, or the Intellectual Property
Rights of the Company or any Subsidiary of the Company or (y) initiate,
launch or commence any sale, marketing, distribution, co-promotion or any
similar activity with respect to any new product (including products under
development) in or outside the United States;
(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) adversely affect in any material
respect the Company, (B) impair in any material respect the ability of the
Company to
38
perform its obligations under this Agreement or (C) prevent or materially
delay the consummation of the transactions contemplated by this Agreement;
(xi) enter into any Contract to the extent consummation of the
transactions contemplated by this Agreement or compliance by the Company
with the provisions of this Agreement would 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, cancellation 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) enter into any Contract containing any restriction on the
ability of the Company or any of its Affiliates to assign its rights,
interests or obligations thereunder, unless such restriction expressly
excludes any assignment to Parent or any of its Affiliates in connection
with or following the consummation of the Merger and the other transactions
contemplated by this Agreement;
(xiii) sell, transfer or license to any person or otherwise extend,
amend or modify any rights to the Intellectual Property Rights of the
Company or any of its Subsidiaries;
(xiv) except as otherwise contemplated by this Agreement or 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 Contract or Company Benefit Agreement 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 agreement or Company Benefit Plan or (II) any
Company Benefit Agreement or other agreement, plan or policy involving the
Company or any of its Subsidiaries and one or more of their respective
current or former directors, officers, employees or consultants, (B)
increase in any manner the compensation, bonus or fringe or other benefits
of, or pay any bonus of any kind or amount whatsoever to, any current or
former director, officer, employee or consultant, (C) pay any benefit or
amount not required under any Company Benefit Plan or Company Benefit
Agreement or any other benefit plan or arrangement of the Company or any of
its Subsidiaries as in effect on the date of this Agreement, (D) grant or
pay any severance or termination pay or increase in any manner the
severance or termination pay of any current or former director, officer,
employee or consultant of the Company or any of its Subsidiaries, (E) grant
any awards under any bonus, incentive, performance or other compensation
plan or arrangement, Company Benefit Agreement or Company Benefit Plan
(including the grant of Company
39
Stock Options, "phantom" stock, stock appreciation rights, "phantom" stock
rights, stock based or stock related awards, performance units or
restricted stock or the removal of existing restrictions in any Company
Benefit Agreements, Company Benefit Plans or agreements or awards made
thereunder), (F) amend or modify any Stock Option or Warrant, (G) take any
action to fund or in any other way secure the payment of compensation or
benefits under any employee plan, agreement, contract or arrangement or
Company Benefit Plan or Company Benefit Agreement, (H) take any action to
accelerate the vesting or payment of any compensation or benefit under any
Company Benefit Plan or Company Benefit Agreement or (I) 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;
(xv) 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
(xvi) authorize any of, or commit, resolve, propose or agree to take
any of, the foregoing actions.
(b) Other Actions. The Company, Parent and Sub shall not, and shall
not permit any of their respective Subsidiaries to, take any action that would,
or that would reasonably be expected to, result in any of the conditions to the
Merger set forth in Article VI not being satisfied.
(c) Advice of Changes; Filings. The Company and Parent shall promptly
advise the other party orally and in writing of (i) any representation or
warranty made by it (and, in the case of Parent, made by Sub) contained in this
Agreement that is qualified as to materiality becoming untrue or inaccurate in
any respect or any such representation or warranty that is not so qualified
becoming untrue or inaccurate in any material respect or (ii) the failure of it
(and, in the case of Parent, of Sub) 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, of 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 hereby, other
than the portions of such filings that include confidential information not
directly related to the transactions contemplated by this Agreement.
(d) Certain Tax Matters. (i) 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 tax returns ("Post-Signing Returns")
required to be
40
filed by or on behalf of each such entity; (B) timely pay all 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 suit, claim, action,
investigation, proceeding or audit (collectively, "Actions") that is or becomes
pending against or with respect to the Company or any of its Subsidiaries in
respect of any material amount of tax and not settle or compromise any such
Action without Parent's consent; (E) not make any material tax election or
settle or compromise any material tax liability, other than with Parent's
consent or other than in the ordinary course of business; and (F) cause all
existing tax sharing agreements, tax indemnity obligations and similar
agreements, arrangements or practices with respect to taxes 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
(e.g., by deferring income or accelerating deductions); provided that no
Post-Signing Returns shall be filed with any taxing authority without Parent's
prior written consent.
(ii) The Company shall deliver to Parent at or prior to the Closing a
certificate, in form and substance satisfactory to Parent, duly executed
and acknowledged, certifying that the payment of the Merger Consideration
and any payments made in respect of the Appraisal Shares pursuant to the
terms of this Agreement are exempt from withholding pursuant to the Foreign
Investment in Real Property Tax Act.
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 Affiliates to, directly or
indirectly through another person, (i) solicit, initiate or knowingly encourage,
or take any other action designed to, or which would 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 Stockholder Approval, in response to a bona fide written Takeover
Proposal that the Board of Directors of the Company determines in good faith
(after consultation with outside counsel and a financial advisor of nationally
recognized reputation) constitutes or would reasonably be expected 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, if its Board of Directors
determines in good faith (after consultation with
41
outside counsel and a financial advisor of nationally recognized reputation)
constitutes or would reasonably be expected 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, if its Board of Directors determines in good faith
(after consultation with outside counsel) that it is required to do so in order
to comply with its fiduciary duties to the stockholders of the Company under
applicable law, and 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 (which need not restrict such person from making an
unsolicited Takeover Proposal) not less restrictive of such person than 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 would reasonably be expected to lead to, any
direct or indirect acquisition or purchase, in one transaction or a series of
transactions, of assets or businesses that constitute 15% or more of the
revenues, net income or the assets of the Company and its Subsidiaries, taken as
a whole, or 15% or more of any class of equity securities of the Company or any
of its Subsidiaries, 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 of its Subsidiaries, 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
stockholders of any person would own 15% or more of any class of equity
securities of the Company or any of its Subsidiaries or of any resulting parent
company of the Company, other than the transactions contemplated by this
Agreement and the Stockholder 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 stockholders)
owning, directly or indirectly, all or substantially all of the shares of
Company Common Stock then outstanding (or 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 determines in good faith (after consultation with outside counsel and a
financial advisor of nationally recognized reputation) to be (i) more favorable
to the stockholders 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.
42
(b) Except as set forth below, 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 approval, recommendation or declaration of advisability
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)
recommend, adopt or approve, or propose publicly to recommend, adopt or approve,
any Takeover Proposal (any action described in this clause (i) being referred to
as a "Company Adverse Recommendation Change") or (ii) approve or recommend, or
propose to approve or recommend, or allow the Company or any of its Affiliates
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
agreement constituting or related to, or that is intended to or would 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 Stockholder
Approval, the Board of Directors of the Company may 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 it is required to do so in order to
comply with its fiduciary duties to the stockholders of the Company under
applicable law; provided, however, that no Company Adverse Recommendation Change
may be made until after the fourth business day following Parent's receipt of
written notice (a "Notice of Adverse Recommendation") 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 Adverse Recommendation and a new four business day period). In
determining whether to make a Company Adverse Recommendation Change, 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 Adverse
Recommendation 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 of any Takeover Proposal, the material terms and
conditions of any such Takeover Proposal or inquiry (including any changes
thereto) and the identity of the person making any such Takeover Proposal or
inquiry. The Company shall (i) keep Parent fully informed of the status and
details (including any change to the terms thereof) of any such Takeover
Proposal or inquiry and (ii) provide to Parent as soon as practicable after
receipt or delivery thereof with 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.
43
(d) Nothing contained in this Section 4.02 shall prohibit the Company
from (x) taking and disclosing to its stockholders a position contemplated by
Rule 14e-2(a) promulgated under the Exchange Act or (y) making any disclosure to
the stockholders of the Company if, in the good faith judgment of the Board of
Directors of the Company (after consultation with outside counsel) failure to so
disclose would be inconsistent with its obligations under applicable law,
including the Board of Directors' duty of candor to the stockholders of the
Company; 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).
ARTICLE V
Additional Agreements
SECTION 5.01. Preparation of the Proxy Statement; Stockholders'
Meeting. (a) As promptly as practicable following the date of this Agreement,
the Company and Parent shall prepare and the Company shall file with the SEC the
Proxy Statement and the Company shall use its commercially reasonable efforts to
respond as promptly as practicable to any comments of the SEC with respect
thereto and to cause the Proxy Statement to be mailed to the stockholders of the
Company as promptly as practicable following the date of this Agreement. The
Company shall promptly notify Parent upon the receipt of any comments from the
SEC or the staff of the SEC or any request from the SEC or the staff of the SEC
for amendments or supplements to the Proxy Statement and shall provide Parent
with copies of all correspondence between the Company and its Representatives,
on the one hand, and the SEC and the staff of the SEC, on the other hand.
Notwithstanding the foregoing, prior to filing or mailing the Proxy Statement
(or any amendment or supplement thereto) or responding to any comments of the
SEC or the staff of the SEC with respect thereto, the Company (i) shall provide
Parent an opportunity to review and comment on such document or response and
(ii) shall include in such document or response all comments reasonably proposed
by Parent; provided that Parent shall use commercially reasonable efforts to
provide or cause to be provided its comments to the Company as promptly as
reasonably practicable after such document or response is transmitted to Parent
for its review.
(b) The Company shall, as soon as practicable following the date of
this Agreement, establish a record date for, duly call, give notice of, convene
and hold a meeting of its stockholders (the "Stockholders' Meeting") for the
initial purpose of obtaining the Stockholder Approval. Subject to Sections
4.02(b) and 4.02(d), the Company shall, through its Board of Directors,
recommend to its stockholders adoption of this Agreement and shall include such
recommendation in the Proxy Statement. Without limiting the generality of the
foregoing, the Company's obligations pursuant to the first sentence of this
Section 5.01(b) shall not be affected by (i) the commencement, public proposal,
public disclosure or communication to the Company of any Takeover Proposal or
(ii) the withdrawal or modification by the Board of Directors of the Company or
any committee thereof of such Board of Directors' or such committee's approval
or
44
recommendation of this Agreement, the Merger or the other transactions
contemplated by this Agreement; provided that no breach of this Section 5.01(b)
shall be deemed to have occurred if the Company adjourns or postpones the
Stockholders' Meeting for a reasonable period of time, each such period of time
not to exceed 10 business days, if (x) at the time of such adjournment or
postponement the Board of Directors of the Company shall be prohibited by the
terms of this Agreement from making a Company Adverse Recommendation Change, and
the Stockholders' Meeting is then scheduled to occur within five business days
of the time of such adjournment or postponement or (y) at the time the Board of
Directors announces a Company Adverse Recommendation Change, the Stockholders'
Meeting is then scheduled to occur no later than 10 business days from the date
of such Company Adverse Recommendation Change; provided further that the Company
may not adjourn or postpone the Stockholders' Meeting pursuant to this clause
(ii) more than two times or for more than 15 business days in the aggregate.
SECTION 5.02. Access to Information; Confidentiality. 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, personnel and records 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, (b) a copy of each correspondence or written communication with any United
States Federal or state governmental agency and (c) all other information
concerning its and its Subsidiaries' business, properties and personnel as
Parent may reasonably request. Except for disclosures expressly permitted by the
terms of the Secrecy Agreement dated as of July 12, 2005, as amended from time
to time, between LifeScan, Inc., a wholly owned Subsidiary of 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. 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.
SECTION 5.03. Commercially Reasonable Efforts. Upon the terms and
subject to the conditions set forth in this Agreement, each of the parties
agrees to use its commercially reasonable 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, proper or advisable to
consummate and make effective, in the most expeditious manner practicable, the
Merger and the other transactions contemplated by this Agreement and the
Stockholder Agreement, including using commercially
45
reasonable 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
and (iii) the obtaining of all necessary consents, approvals or waivers from
third parties; provided that none of the Company, Parent or Sub shall be
required to make any payment to any such third parties or concede anything of
value to obtain such consents. In connection with and without limiting the
foregoing, the Company and Parent shall 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 with
respect to the transactions contemplated by this Agreement as promptly as
practicable. The HSR Filing shall be in substantial compliance with the
requirements of the HSR Act. Each party shall cooperate with the other party to
the extent necessary to assist the other party in the preparation of its HSR
Filing, to request early termination of the waiting period required by the HSR
Act and, if requested, to promptly amend or furnish additional information
thereunder. The Company and its Board of Directors shall (1) take all action
necessary to ensure that no state takeover statute or similar statute or
regulation is or becomes applicable to this Agreement, the Stockholder
Agreement, the Merger or any of the other transactions contemplated by this
Agreement or the Stockholder Agreement and (2) if any state takeover statute or
similar statute becomes applicable to this Agreement, the Stockholder Agreement,
the Merger or any of the other transactions contemplated by this Agreement or
the Stockholder Agreement, take all action necessary to ensure that the Merger
and the other transactions contemplated by this Agreement and the Stockholder
Agreement may be consummated as promptly as practicable on the terms
contemplated by this Agreement and the Stockholder Agreement and otherwise to
minimize the effect of such statute or regulation on this Agreement, the
Stockholder Agreement, the Merger and the other transactions contemplated by
this Agreement and the Stockholder Agreement. Nothing in this Agreement shall be
deemed to require Parent to agree to, or proffer to, divest or hold separate any
assets or any portion of any business of Parent, the Company or any of their
respective Subsidiaries.
SECTION 5.04. Company Stock Options; ESPP; Warrants. (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) adjust the terms of all outstanding Company Stock Options, whether
vested or unvested, as necessary to provide that the Company Stock Options
will become fully exercisable and may be exercised before the Effective
Time at such applicable time or times as specified in the Company Stock
Plans, and, at the Effective Time, each Company Stock Option outstanding
immediately prior to the
46
Effective Time shall be canceled and the holder thereof shall then become
entitled to receive, as soon as practicable following the Effective Time, a
single lump sum cash payment equal to the product of (1) the number of
shares of Company Common Stock for which such Company Stock Option shall
not theretofore have been exercised and (2) the excess, if any, of the
Merger Consideration over the exercise price per share of such Company
Stock Option; and
(ii) make such other changes to the Company Stock Plans as the Company
and Parent 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)
no offering period shall be commenced after the date of this Agreement, (iii)
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 (iv) the ESPP shall terminate immediately following such purchases
of Company Common Stock.
(c) As soon as practicable following the date of this Agreement,
except as set forth below, the Board of Directors of the Company shall adopt
such resolutions or take such other actions (if any) as may be required to
provide that each Warrant outstanding immediately prior to the Effective Time
shall be canceled in exchange for a lump sum cash payment equal to (i) the
product of (A) the number of shares of Company Common Stock subject to such
Warrant and (B) the Merger Consideration, minus (ii) the product of (A) the
number of shares of Company Common Stock subject to such Warrant and (B) the per
share exercise price of such Warrant (provided that if such calculation results
in a negative number, the lump sum cash payment shall be deemed to be $0). Such
payment shall be made promptly following the Effective Time. Notwithstanding the
foregoing, with respect to the Warrants listed on Section 5.04(c) of the Company
Disclosure Schedule, the Company shall only be required to use its reasonable
efforts to obtain an acknowledgment from the holders of such Warrants that each
such Warrant entitles the holder of such Warrant to receive the amount
calculated as set forth above with respect to such Warrants. All amounts payable
pursuant to this Section 5.04(c) shall be subject to any required withholding of
taxes and shall be paid without interest. The Company has obtained all consents
of the holders of the Warrants necessary to effectuate the foregoing except as
identified on Section 5.04(c) of the Company Disclosure Schedule.
47
(d) All amounts payable to holders of the Company Stock Options
pursuant to Section 5.04(a) shall be subject to any required withholding of
Taxes and shall be paid without interest as soon as practicable following the
Effective Time.
(e) 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).
SECTION 5.05. Indemnification; Advancement of Expenses; Exculpation
and Insurance. (a) Parent shall cause the Surviving Corporation to assume the
obligations with respect to all rights to indemnification, advancement of
expenses and exculpation from liabilities 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 Certificate, 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.
(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, however, that in satisfying its obligation
under this Section 5.05(c), neither the Company nor Parent shall be obligated to
pay more than $2,000,000 in the aggregate to obtain such coverage. It is
understood and agreed that in the event such coverage cannot be obtained
48
for $2,000,000 or less in the aggregate, Parent shall be obligated to provide
such coverage as may be obtained for such $2,000,000 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 paragraph
(b) 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.
(b) In the event that (i) this Agreement is terminated by Parent
pursuant to Section 7.01(e) or (ii) (A) prior to the obtaining of the
Stockholder Approval, a Takeover Proposal shall have been made to the Company or
shall have been made directly to the stockholders 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 Stockholder
Approval or the Stockholders' 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
$19,700,000 (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)
above, the date of termination of this Agreement and (y) in the case of a
payment required by clause (ii) above, the date of the first to occur of the
events referred to in clause (ii)(C).
(c) The Company and Parent acknowledge and agree that the agreements
contained in Section 5.06(b) are an integral part of the transactions
contemplated by this Agreement, and that, without these agreements, Parent would
not enter into this Agreement; accordingly, 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.
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
49
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 all
formal Company employee communication programs or announcements with respect to
the transactions contemplated by this Agreement shall be in the forms mutually
agreed to by the parties (such agreement not to be unreasonably withheld or
delayed). 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. Stockholder Litigation. The Company shall give Parent
the opportunity to participate in the defense or settlement of any stockholder
litigation against the Company and/or its directors relating to the transactions
contemplated by this Agreement or the Stockholder Agreement, and no such
settlement shall be agreed to without Parent's prior written consent.
SECTION 5.09. Employee Matters. (a) For a period of not less than six
months following the Effective Time, the employees of the Company who remain in
the employment of the Surviving Corporation and its Subsidiaries (the
"Continuing Employees") shall receive employee benefits that are substantially
comparable in the aggregate to the employee benefits provided to the employees
of the Company 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) 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) and (iv) 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) and (iv), solely to the extent that Parent makes such plan or
program available to employees of the Surviving Corporation), but not for
purposes of any other employee benefit plan of Parent.
50
(c) Nothing contained herein shall be construed as requiring Parent or
the Surviving Corporation to continue any specific plans or to continue the
employment of any specific person.
(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 of the Company and its Subsidiaries 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.
SECTION 5.10. Stockholder Agreement Legend. The Company will inscribe
upon any Certificate representing Subject Shares that may be tendered by a
Stockholder (as such terms are defined in the Stockholder Agreement) to the
Company for such purpose the following legend: "THE SHARES OF COMMON STOCK, PAR
VALUE $0.01 PER SHARE, OF ANIMAS CORPORATION REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO A STOCKHOLDER AGREEMENT DATED AS OF DECEMBER 16, 2005, AND ARE
SUBJECT TO THE TERMS THEREOF. COPIES OF SUCH AGREEMENT MAY BE OBTAINED AT THE
PRINCIPAL EXECUTIVE OFFICES OF ANIMAS CORPORATION".
SECTION 5.11. Certain Other Actions. The Company shall take, or cause
to be taken, all actions and to do, or cause to be done, all things necessary,
proper or advisable to accomplish the items set forth in Section 5.11 of the
Company Disclosure Schedule.
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 on or prior to
the Closing Date of the following conditions:
(a) Stockholder Approval. The Stockholder Approval shall have been
obtained.
(b) HSR Act. The waiting period (and any extension thereof) applicable
to the Merger under the HSR Act shall have been terminated or shall have
expired.
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(c) No Injunctions or Restraints. No temporary restraining order,
preliminary or permanent injunction or other judgment or order issued by
any court of competent jurisdiction or other statute, law, rule, legal
restraint or prohibition (collectively, "Restraints") shall be in effect
(i) preventing the consummation of the Merger or (ii) which otherwise has
had or would reasonably be expected to have a Material Adverse Effect.
(d) Foreign Regulatory Approval. All applicable antitrust and
regulatory clearances shall have been obtained from the relevant
Governmental Entities in Germany and Austria.
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. The representations and warranties
of the Company contained in this Agreement that are qualified as to
materiality shall be true and correct, and the representations and
warranties of the Company contained in this Agreement 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. 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.
(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 Governmental Entity or by any other person having a
reasonable likelihood of prevailing in a manner contemplated in clauses
(i), (ii) or (iii) below, (i) challenging the acquisition by Parent or Sub
of any shares of Company Common Stock, seeking to restrain or prohibit the
consummation of the Merger or any other transaction contemplated by this
Agreement, or seeking to place limitations on the ownership of shares of
Company Common Stock (or shares of common stock of the Surviving
Corporation) by Parent, Sub or any other Affiliate of Parent 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
prohibit or materially limit the ownership or operation by the Company,
Parent or any of their respective Subsidiaries of any portion of any
business or of any assets of the Company, Parent or any of their respective
52
Subsidiaries, or to compel the Company, Parent or any of their respective
Subsidiaries to divest or hold separate any portion of any business or of
any assets of the Company, Parent or any of their respective Subsidiaries,
in each case, as a result of the Merger, (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
Subsidiaries or (iv) otherwise having, or being reasonably expected to
have, a 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 (iv) 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. The representations and warranties
of Parent and Sub contained in this Agreement that are qualified as to
materiality shall be true and correct, and the representations and
warranties of Parent and Sub contained in this Agreement 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. 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 commercially
reasonable efforts to consummate the Merger and the other transactions
contemplated by this Agreement, as required by and subject to Section 5.03.
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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
Stockholder Approval:
(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 June
15, 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
breach of a representation or warranty in this Agreement or whose 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(c) shall be in effect and shall have become final and nonappealable;
or
(iii) if the Stockholder Approval shall not have been obtained at the
Stockholders' Meeting 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 incapable of being cured, or is not 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 (iv) 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 incapable of being cured, or is not cured, by Parent within 30
calendar days following receipt of written notice of such breach or failure
to perform from the Company; or
(e) by Parent, in the event that prior to the obtaining of the
Stockholder Approval (i) a Company Adverse Recommendation Change shall have
occurred or (ii) the Board of Directors of the Company fails publicly to
reaffirm its recommendation of this Agreement, the Merger or the other
54
transactions contemplated by this Agreement within 10 business days of
receipt of a written request by Parent to provide such reaffirmation
following a Takeover Proposal.
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), the penultimate sentence of
Section 5.02, Section 5.06, this Section 7.02 and Article VIII, which provisions
shall survive such termination, and except to the extent that such termination
results 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 Stockholder Approval;
provided, however, that after such approval has been obtained, there shall be
made no amendment that by law requires further approval by the stockholders of
the Company 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
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
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.
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 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 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
55
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:
Xxxxxxx & Xxxxxxx
Xxx Xxxxxxx & Xxxxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Telecopy No.: (000) 000-0000
Attention: Office of General Counsel
with a copy to:
Cravath, Swaine & Xxxxx LLP
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx, III, Esq.
if to the Company, to:
Animas Corporation
000 Xxxxxxxx Xxxxx
Xxxx Xxxxxxx, XX 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxxxx X. Xxxxxxxx
with a copy to:
Xxxxxx Xxxxxxxx LLP
3000 Two Xxxxx Square
00xx xxx Xxxx Xxxxxxx
Xxxxxxxxxxxx, XX 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx, Esq.
56
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" of any person that is not an individual means, with
respect to any matter in question, the actual knowledge of such person's
executive officers after making due inquiry of the other executives and
managers 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 (i) is materially adverse to the business,
financial condition, properties, assets, liabilities (contingent or
otherwise), results of operations or prospects of the Company and its
Subsidiaries, taken as a whole, or (ii) would reasonably be expected to
prevent or materially impede, interfere with, hinder or delay the
consummation by the Company of the Merger or the other transactions
contemplated by this Agreement; 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 Effect or a Material Adverse Change: (A) any
change relating to the United States economy or securities markets in
general, (B) any adverse change, effect, event, occurrence, state of facts
or development reasonably attributable to conditions affecting the industry
in which the Company participates (other than as may arise or result from
regulatory action by a Governmental Entity), so long as the effects do not
disproportionately impact the Company and (C) any failure, in and of
itself, by the Company to meet any internal or published projections,
forecasts or revenue or earnings predictions for any period ending on or
after the date of this Agreement (it being understood that the facts or
occurrences giving rise to or contributing to such failure may be deemed to
constitute, or be taken into account in determining whether there has been
or will be, a Material Adverse Effect or Material Adverse Change);
(d) "person" means an individual, corporation, partnership, limited
liability company, joint venture, association, trust, unincorporated
organization or other entity; and
(e) 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.
57
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 or statute defined or referred to herein or in any Contract that is
referred to herein means such Contract or statute as from time to time amended,
modified or supplemented, including (in the case of Contracts) by waiver or
consent and (in the case of statutes) by succession of comparable successor
statutes 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, the Stockholder Agreement and the Confidentiality Agreement (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, the Stockholder 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 DELAWARE, REGARDLESS OF
THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICTS OF
LAWS THEREOF.
58
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 Parent or 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 (a) in the case of Parent, to any
direct or indirect wholly owned Subsidiary of Parent and (b) in the case of Sub,
to Parent or to any direct or indirect wholly owned Subsidiary of Parent, but no
such assignment shall relieve Parent or Sub, as applicable, of any of its
obligations hereunder; provided that any such assignee of Parent or Sub, as
applicable, shall be primarily liable with respect to the obligations hereunder
and the liability of Parent or Sub, as applicable, shall be secondary. 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 any Federal
court located in the State of Delaware or in any state court in the State of
Delaware, 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 any Federal court located in the
State of Delaware or of any state court located in the State of Delaware 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 a
Federal court located in the State of Delaware or a state court located in the
State of Delaware.
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
59
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 hereby are fulfilled to the extent possible.
60
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.
XXXXXXX & XXXXXXX,
by /s/ Xxxx X. Xxxx
-------------------------------------
Name: Xxxx X. Xxxx
Title: Treasurer
EMERALD MERGER SUB, INC.,
by /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
ANIMAS CORPORATION,
by /s/ Xxxxxxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxxxxxx X. Xxxxxxxx
Title: Chief Executive Officer
ANNEX I
TO THE MERGER AGREEMENT
Index of Defined Terms
Term
----
Acquisition Agreement................................... Section 4.02(b)
Actions................................................. Section 4.01(d)
Affiliate............................................... Section 8.03(a)
Agreement............................................... Preamble
Appraisal Shares........................................ Section 2.01(d)
Certificate............................................. Section 2.01(c)
Certificate of Merger................................... Section 1.03
Closing................................................. Section 1.02
Closing Date............................................ Section 1.02
Code.................................................... Section 2.02(h)
Commonly Controlled Entity.............................. Section 3.01(k)
Company................................................. Preamble
Company Adverse Recommendation Change................... Section 4.02(b)
Company Benefit Agreements.............................. Section 3.01(g)
Company Benefit Plans................................... Section 3.01(k)
Company By-laws......................................... Section 3.01(a)
Company Certificate..................................... Section 1.05(a)
Company Common Stock.................................... Preamble
Company Consolidated Group.............................. Section 3.01(n)(xiii)
Company Disclosure Schedule............................. Section 3.01
Company Pension Plan.................................... Section 3.01(l)
Company Preferred Stock................................. Section 3.01(c)
Company SEC Documents................................... Section 3.01(e)
Company Stock-Based Awards.............................. Section 3.01(c)
Company Stock Options................................... Section 3.01(c)
Company Stock Plans..................................... Section 3.01(c)
Confidentiality Agreement............................... Section 5.02
Continuing Employees.................................... Section 5.09(a)
Contract................................................ Section 3.01(d)
DGCL.................................................... Section 1.01
Effective Time.......................................... Section 1.03
Environmental Laws...................................... Section 3.01(j)(ii)
ERISA................................................... Section 3.01(j)(i)
ESPP.................................................... Section 3.01(c)
Exchange Act............................................ Section 3.01(d)
Exchange Fund........................................... Section 2.02(a)
FDA..................................................... Section 3.01(j)
FDCA.................................................... Section 3.01(j)
Filed Company SEC Documents............................. Section 3.01(g)
GAAP.................................................... Section 3.01(e)
Governmental Entity..................................... Section 3.01(d)
Hazardous Materials..................................... Section 3.01(j)(ii)
HSR Act................................................. Section 3.01(d)
HSR Filing.............................................. Section 5.03
Intellectual Property Rights............................ Section 3.01(p)
IRS..................................................... Section 3.01(l)
Knowledge............................................... Section 8.03(b)
A-1
Legal Provisions........................................ Section 3.01(j)
Liens................................................... Section 3.01(b)
Material Adverse Change................................. Section 8.03(c)
Material Adverse Effect................................. Section 8.03(c)
Medical Device.......................................... Section 3.01(v)
Merger.................................................. Preamble
Merger Consideration.................................... Section 2.01(c)
Notice of Adverse Recommendation........................ Section 4.02(b)
Parachute Gross Up Payment.............................. Section 3.01(m)
Parent.................................................. Preamble
Paying Agent............................................ Section 2.02(a)
Permits................................................. Section 3.01(j)
person.................................................. Section 8.03(d)
Piper................................................... Section 3.01(s)
Post-Signing Returns.................................... Section 4.01(d)
Primary Company Executives.............................. Section 3.01(m)
Principal Stockholders.................................. Preamble
Proxy Statement......................................... Section 3.01(d)
Representatives......................................... Section 4.02(a)
Release................................................. Section 3.01(j)(ii)
Restraints.............................................. Section 6.01(c)
SEC..................................................... Section 3.01(d)
Section 262............................................. Section 2.01(d)
Securities Act.......................................... Section 3.01(e)
Social Security Act..................................... Section 3.01(v)(v)
SOX..................................................... Section 3.01(e)
Specified Contracts..................................... Section 3.01(u)
Stockholder Agreement................................... Preamble
Stockholder Approval.................................... Section 3.01(q)
Stockholders' Meeting................................... Section 5.01(b)
Sub..................................................... Preamble
Subsidiary.............................................. Section 8.03(e)
Superior Proposal....................................... Section 4.02(a)
Surviving Corporation................................... Section 1.01
Takeover Proposal....................................... Section 4.02(a)
taxes................................................... Section 3.01(n)(xiii)
taxing authority........................................ Section 3.01(n)(xiii)
tax returns............................................. Section 3.01(n)(xiii)
Termination Fee......................................... Section 5.06(b)(ii)
Warrants................................................ Section 3.01(c)
A-2
EXHIBIT A
TO THE MERGER AGREEMENT
Restated Certificate of Incorporation
of the Surviving Corporation
FIRST: The name of the corporation (hereinafter called the
"Corporation") is ANIMAS CORPORATION.
SECOND: The address, including street, number, city, and county, of
the registered office of the Corporation in the State of Delaware is Corporate
Trust Center, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, County of New
Castle; and the name of the registered agent of the Corporation in the State of
Delaware at such address is The Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act
or activity for which corporations may be organized under the General
Corporation Law of the State of Delaware.
FOURTH: The aggregate number of shares which the Corporation shall
have authority to issue is 1,000 shares of Common Stock, par value $0.01 per
share.
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 General Corporation Law
of the State of Delaware 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 stockholders for monetary damages for breach of
fiduciary duty as a director or officer; provided, however, that nothing
contained in this Article SIXTH shall eliminate or limit the liability of a
director or officer (i) for any breach of the director's or officer's duty of
loyalty to the Corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) pursuant to Section 174 of the General Corporation Law of the State
of Delaware or (iv) for any transaction from which the director or officer
derived an improper personal benefit. No amendment to or repeal of this Article
SIXTH shall apply to or have any effect on the liability or alleged liability of
any director or officer of the Corporation for or with respect to any acts or
omissions of such director or officer occurring prior to such amendment or
repeal.
SEVENTH: The Corporation shall, to the fullest extent permitted by
Section 145 of the General Corporation Law of the State of Delaware, 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
2
deemed exclusive of any other rights to which those indemnified may be entitled
under any by-law, agreement, vote of stockholders 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 General
Corporation Law of the State of Delaware 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 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 General
Corporation Law of the State of Delaware. 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.
