AGREEMENT AND PLAN OF MERGER
BY AND AMONG
MEDTRONIC, INC.,
MXS MERGER CORP.,
AND
XOMED SURGICAL PRODUCTS, INC.
August 26, 1999
TABLE OF CONTENTS
ARTICLE 1 THE MERGER; CONVERSION OF SHARES..................................1
1.1 The Merger.......................................................1
1.2 Effective Time...................................................2
1.3 Conversion of Shares.............................................2
1.4 No Appraisal Rights..............................................3
1.5 Exchange of Company Common Stock.................................3
1.6 Exchange of Merger Subsidiary Common Stock.......................5
1.7 Stock Options....................................................6
1.8 Capitalization Changes...........................................7
1.9 Certificate of Incorporation of the Surviving Corporation........7
1.10 Bylaws of the Surviving Corporation..............................7
1.11 Directors of the Surviving Corporation...........................7
ARTICLE 2 CLOSING...........................................................8
2.1 Time and Place...................................................8
2.2 Filings at the Closing...........................................8
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY.....................8
3.1 Organization.....................................................8
3.2 Authorization....................................................9
3.3 Capitalization..................................................10
3.4 Reports and Financial Statements................................10
3.5 Absence of Undisclosed Liabilities..............................11
3.6 Consents and Approvals..........................................11
3.7 Compliance with Laws............................................12
3.8 Litigation......................................................13
3.9 Absence of Material Adverse Changes.............................13
3.10 Officers, Directors and Employees...............................13
3.11 Taxes...........................................................13
3.12 Contracts.......................................................14
3.13 Intellectual Property Rights....................................15
3.14 Benefit Plans...................................................15
3.15 Minute Books....................................................17
3.16 No Finders......................................................17
3.17 Proxy Statement.................................................17
3.18 Fairness Opinion................................................18
3.19 State Takeover Laws.............................................18
3.20 Merger Filings..................................................18
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUBSIDIARY...18
4.1 Organization....................................................19
4.2 Authorization...................................................19
4.3 Capitalization..................................................19
4.4 Consents and Approvals..........................................20
4.5 Reports; Financial Statements; Absence of Changes...............20
4.6 Registration Statement..........................................21
4.7 No Finders......................................................21
4.8 Absence of Undisclosed Liabilities..............................21
4.9 Compliance with Laws............................................21
4.10 Litigation......................................................22
4.11 Absence of Material Adverse Changes.............................22
4.12 Reorganization..................................................22
4.13 Merger Filings..................................................22
ARTICLE 5 COVENANTS........................................................22
5.1 Conduct of Business of the Company..............................23
5.2 Conduct of Business of Parent...................................25
5.3 No Solicitation.................................................26
5.4 Access and Information..........................................27
5.5 Approval of Stockholders; Proxy Statement; Registration
Statement......................................................28
5.6 Consents........................................................30
5.7 Affiliates'Letters..............................................30
5.8 Expenses........................................................31
5.9 Further Actions.................................................31
5.10 Regulatory Approvals............................................31
5.11 Certain Notifications...........................................32
5.12 Voting of Shares................................................32
5.13 Stock Option Agreement..........................................32
5.14 NYSE Listing Application........................................33
5.15 Indemnification.................................................33
5.16 Letters of the Company's and Parent's Accountants...............34
5.17 Subsidiary Shares...............................................34
5.18 Benefit Plans and Employee Matters..............................35
5.19 Obligations of Merger Subsidiary................................35
5.20 Plan of Reorganization..........................................35
5.21 Pooling.........................................................35
ARTICLE 6 CLOSING CONDITIONS...............................................36
6.1 Conditions to Obligations of Parent, Merger Subsidiary,
and the Company................................................36
6.2 Conditions to Obligations of Parent and Merger Subsidiary.......36
6.3 Conditions to Obligations of the Company........................37
ARTICLE 7 TERMINATION AND ABANDONMENT......................................38
7.1 Termination.....................................................38
7.2 Effect of Termination...........................................40
ARTICLE 8 MISCELLANEOUS....................................................42
8.1 Amendment and Modification......................................42
8.2 Waiver of Compliance; Consents..................................43
8.3 Investigation; Survival of Representations and Warranties.......43
8.4 Notices.........................................................43
8.5 Assignment......................................................44
8.6 Governing Law...................................................44
8.7 Counterparts....................................................44
8.8 Knowledge.......................................................44
8.9 Interpretation..................................................44
8.10 Publicity.......................................................45
8.11 Entire Agreement................................................45
8.12 Severability....................................................45
8.13 Specific Performance............................................45
EXHIBITS:
Exhibit A: Form of Certificate of Incorporation
Exhibit B: Form of Bylaws
Exhibit C: Form of Affiliate's Letter
Exhibit D: Form of Agreement to Facilitate Merger
Exhibit E: Form of Stock Option Agreement
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT is dated as of August 26, 1999, by and among Medtronic,
Inc., a Minnesota corporation ("Parent"), MXS Merger Corp., a Delaware
corporation and wholly-owned subsidiary of Parent ("Merger Subsidiary"), and
Xomed Surgical Products, Inc., a Delaware corporation (the "Company").
WHEREAS, the Boards of Directors of Parent, Merger Subsidiary, and the
Company have approved the merger of Merger Subsidiary with and into the Company
(the "Merger") upon the terms and subject to the conditions set forth herein;
and
WHEREAS, for federal income tax purposes, it is intended that the
Merger shall qualify as a reorganization within the meaning of Section 368(a) of
the Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, for accounting purposes, it is intended that the Merger shall
be recorded as a "pooling of interests" within the meaning of Accounting
Principles Board Opinion Xx. 00 ("XXX 00"), and the rules and regulations of the
Securities and Exchange Commission (the "SEC"); and
WHEREAS, as a condition to, and upon or immediately following the
execution of, this Agreement, Parent and the Company are entering into the Stock
Option Agreement described in Section 5.13 hereof; and
WHEREAS, the parties hereto desire to make certain representations,
warranties, and agreements in connection with the Merger and also to prescribe
various conditions to the Merger;
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual representations, warranties, covenants, and agreements contained herein,
the parties hereto agree as follows:
ARTICLE 1
THE MERGER; CONVERSION OF SHARES
1.1 The Merger. Subject to the terms and conditions of this Agreement,
at the Effective Time (as defined in Section 1.2 hereof), Merger Subsidiary
shall be merged with and into the Company in accordance with the provisions of
the Delaware General Corporation Law (the "DGCL"), whereupon the separate
corporate existence of Merger Subsidiary shall cease, and the Company shall
continue as the surviving corporation (the "Surviving Corporation"). From and
after the Effective Time, the Surviving Corporation shall possess all the
rights, privileges, powers, and franchises and be subject to all the
restrictions, disabilities, and duties of the Company and Merger Subsidiary, all
as more fully described in the DGCL.
1.2 Effective Time. As soon as practicable after each of the
conditions set forth in Article 6 has been satisfied or waived on the Closing
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Date (as defined in Section 2.1), the Company will file, or cause to be filed,
with the Secretary of State of the State of Delaware a Certificate of Merger for
the Merger, which Certificate shall be in the form required by and executed in
accordance with the applicable provisions of the DGCL. The Merger shall become
effective at the time such filing is made or, if agreed to by Parent and the
Company, such later time or date set forth in the Certificate of Merger (the
"Effective Time").
1.3 Conversion of Shares. At the Effective Time, by virtue of the
Merger and without any action on the part of the Company, Parent, Merger
Subsidiary or any holder of any share of capital stock of the Company or Merger
Subsidiary:
(a) Each share of common stock of the Company, $.01 par value
per share ("Company Common Stock"), issued and outstanding immediately
prior thereto (except for shares referred to in Section 1.3(b) hereof)
shall be converted, subject to Section 1.5(f), into the right to
receive a number of shares (carried out to five decimal places and
rounded up if the sixth decimal place is 5 or greater) (the "Conversion
Ratio") of common stock of Parent, par value $.10 per share (the
"Parent Common Stock"), based on the average (rounded to the nearest
full cent, with the cents rounded up if the third decimal place is 5 or
more) of the daily closing sale prices of a share of Parent Common
Stock as reported on the New York Stock Exchange ("NYSE") Composite
Tape, as reported in The Wall Street Journal (the "Parent Average Stock
Price"), for the ten (10) consecutive NYSE trading days ending on and
including the NYSE trading day that is three NYSE trading days prior to
the Company Stockholders Meeting (as defined in Section 5.5) (the
"Determination Period"), determined as follows:
(i) if the Parent Average Stock Price for the
Determination Period is greater than $66.60 and less than
$81.40, then the Conversion Ratio shall equal $60 divided by
the Parent Average Stock Price for the Determination Period;
(ii) if the Parent Average Stock Price for the
Determination Period is equal to or less than $66.60, then the
Conversion Ratio shall equal .90090; or
(iii) if the Parent Average Stock Price for the
Determination Period is equal to or greater than $81.40, then
the Conversion Ratio shall equal .73710.
An appropriate adjustment to the Conversion Ratio shall be
made in the event that, prior to the Effective Time, the outstanding
shares of Company Common Stock, without new consideration, are changed
into or exchanged for a different number of shares or a different class
by reason of any reorganization, reclassification, subdivision,
recapitalization, split-up, combination, exchange of shares, stock
dividend or other similar transaction. Notwithstanding the foregoing,
nothing in this section shall be deemed to constitute authorization or
permission for or consent from Parent or Merger Subsidiary to any
reorganization, reclassification, subdivision, recapitalization,
split-up, combination, exchange of shares, or other similar
transaction.
(b) Each share of Company Common Stock issued and outstanding
immediately prior to the Effective Time that is held in the treasury of
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the Company or is then owned beneficially or of record by Parent,
Merger Subsidiary, or any direct or indirect wholly owned subsidiary of
Parent or the Company shall be canceled in accordance with applicable
laws without payment of any consideration therefor and without any
conversion thereof.
(c) Each share of any other class of capital stock of the
Company (other than Company Common Stock) shall be canceled without
payment of any consideration therefor and without any conversion
thereof.
(d) Each share of common stock of Merger Subsidiary, par value
$.01 per share ("Merger Subsidiary Common Stock"), issued and
outstanding immediately prior to the Effective Time shall be converted
into one share of the common stock of the Surviving Corporation, par
value $.01 per share ("Surviving Corporation Common Stock").
1.4 No Appraisal Rights. The parties acknowledge that, pursuant to
Section 262 of the DGCL, no holders of Company Common Stock shall have appraisal
rights in connection with the Merger.
1.5 Exchange of Company Common Stock.
(a) At or prior to the Effective Time, Parent shall cause
Parent's stock transfer agent or such other person as Parent may
appoint and is reasonably satisfactory to the Company to act as
exchange agent (the "Exchange Agent") hereunder. As promptly as
practicable after the Effective Time, with respect to the shares of
Parent Common Stock into which shares of Company Common Stock have been
converted pursuant to Section 1.3(a), (i) if the Exchange Agent is
Parent's stock transfer agent, Parent shall deliver written
instructions to the transfer agent instructing Parent's transfer agent
to issue such shares of Parent Common Stock pursuant to the provisions
of this Section 1.5, or (ii) if the Exchange Agent is not Parent's
stock transfer agent, Parent shall deposit, or cause to be deposited,
with the Exchange Agent for the benefit of holders of shares of Company
Common Stock, certificates representing such shares of Parent Common
Stock. As promptly as practicable after the Effective Time, Parent
shall cause the Exchange Agent to mail to each holder of record (other
than Parent, Merger Subsidiary, the Company, or any wholly owned
subsidiary of Parent or the Company) of a certificate or certificates
that immediately prior to the Effective Time represented outstanding
shares of Company Common Stock ("Company Certificates") a form letter
of transmittal (which shall specify that delivery shall be effective,
and risk of loss and title to the Company Certificate(s) shall pass,
only upon delivery of the Company Certificate(s) to the Exchange Agent)
and instructions for such holder's use in effecting the surrender of
the Company Certificates in exchange for certificates representing
shares of Parent Common Stock and cash in lieu of any fractional
shares.
(b) As soon as practicable after the Effective Time, the
Exchange Agent shall distribute to holders of shares of Company Common
Stock, upon surrender to the Exchange Agent of one or more Company
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Certificates for cancellation, together with a duly-executed letter of
transmittal, (i) one or more certificates representing the number of
whole shares of Parent Common Stock into which the shares represented
by the Company Certificate(s) shall have been converted pursuant to
Section 1.3(a), (ii) a bank check in the amount of cash into which the
shares represented by the Company Certificate(s) shall have been
converted pursuant to Section 1.5(f) (relating to fractional shares),
and (iii) any dividends or other distributions to which such holder is
entitled pursuant to Section 1.5(c), and the Company Certificate(s) so
surrendered shall be canceled. In the event of a transfer of ownership
of Company Common Stock that is not registered in the transfer records
of the Company, it shall be a condition to the issuance of shares of
Parent Common Stock that the Company Certificate(s) so surrendered
shall be properly endorsed or be otherwise in proper form for transfer
and that such transferee shall (i) pay to the Exchange Agent any
transfer or other taxes required or (ii) establish to the satisfaction
of the Exchange Agent that such tax has been paid or is not payable.
(c) Holders of Company Common Stock will be entitled to any
dividends or other distributions pertaining to the Parent Common Stock
received in exchange therefor that become payable to persons who are
holders of record of Parent Common Stock as of a record date that
follows the Effective Time, but only after they have surrendered their
Company Certificates for exchange. Parent shall deposit with the
Exchange Agent any such dividend or other distributions, and subject to
the effect, if any, of applicable law, the Exchange Agent shall
receive, hold, and remit any such dividends or other distributions to
each such record holder entitled thereto, without interest, at the time
that such Company Certificates are surrendered to the Exchange Agent
for exchange. Holders of Company Common Stock will not be entitled,
however, to dividends or other distributions that become payable before
or after the Effective Time to persons who were holders of record of
Parent Common Stock as of a record date that is prior to the Effective
Time.
(d) All certificates evidencing shares of Parent Common Stock
that are issued upon the surrender for exchange of Company Certificates
in accordance with the terms hereof, together with any cash paid for
fractional shares pursuant to Section 1.5(f) hereof, shall be deemed to
have been issued in full satisfaction of all rights pertaining to the
shares of Company Common Stock represented by the surrendered Company
Certificates.
(e) After the Effective Time, 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,
Company Certificates representing such shares are presented to the
Surviving Corporation, they shall be canceled and exchanged as provided
in this Article 1. As of the Effective Time, the holders of Company
Certificates representing shares of Company Common Stock shall cease to
have any rights as stockholders of the Company, except such rights, if
any, as they may have pursuant to the DGCL or this Agreement. Except as
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provided above, until such Company Certificates are surrendered for
exchange, each such Company Certificate shall, after the Effective
Time, represent for all purposes only the right to receive a
certificate or certificates evidencing the number of whole shares of
Parent Common Stock into which the shares of Company Common Stock shall
have been converted pursuant to the Merger as provided in Section
1.3(a) hereof, the right to receive the cash value of any fraction of a
share of Parent Common Stock as provided in Section 1.5(f) hereof and
the right to receive any dividends or distributions as provided in
Section 1.5(c).
(f) No fractional shares of Parent Common Stock and no
certificates or scrip therefor, or other evidence of ownership thereof,
shall be issued in connection with the Merger, no dividend or other
distribution of Parent shall relate to any fractional share, and such
fractional share interests shall not entitle the owner thereof to vote
or to any rights of a shareholder of Parent. All fractional shares of
Parent Common Stock to which a holder of Company Common Stock
immediately prior to the Effective Time would otherwise be entitled, at
the Effective Time, shall be aggregated if and to the extent multiple
Company Certificates of such holder are submitted together to the
Exchange Agent. If a fractional share results from such aggregation,
then (in lieu of such fractional share) the Exchange Agent shall pay to
each holder of shares of Company Common Stock who otherwise would be
entitled to receive such fractional share of Parent Common Stock an
amount of cash (without interest) determined by multiplying (i) the
Parent Average Stock Price for the Determination Period, by (ii) the
fractional share of Parent Common Stock to which such holder would
otherwise be entitled. Parent will make available to the Exchange Agent
any cash necessary for this purpose.
(g) In the event any Company Certificates shall have been
lost, stolen, or destroyed, the Exchange Agent shall issue in respect
of such lost, stolen, or destroyed Company Certificates, upon the
making of an affidavit of that fact by the holder thereof, such shares
of Parent Common Stock, cash for fractional shares, if any, and
dividends or other distributions, if any, as may be required pursuant
to this Article 1; provided, however, that Parent may, in its
discretion and as a condition precedent to the issuance thereof,
require the owner of such lost, stolen, or destroyed Company
Certificate to deliver a bond in such sum as Parent may reasonably
direct as indemnity against any claim that may be made against Parent
or the Exchange Agent with respect to such Company Certificate alleged
to have been lost, stolen, or destroyed.
(h) The parties hereto acknowledge that each certificate
representing a share of Parent Common Stock issued pursuant to this
Article 1 will, pursuant to the Rights Agreement dated as of June 27,
1991, between Parent and Norwest Bank Minnesota, N.A. (the "Parent
Rights Plan"), also represent the number of Parent preferred share
purchase rights associated with one share of Parent Common Stock at the
Effective Time.
1.6 Exchange of Merger Subsidiary Common Stock. From and after the
Effective Time, each outstanding certificate previously representing shares of
Merger Subsidiary Common Stock shall be deemed for all purposes to evidence
ownership of and to represent the number of shares of Surviving Corporation
Common Stock into which such shares of Merger Subsidiary Common Stock shall have
5
been converted. Promptly after the Effective Time, the Surviving Corporation
shall issue to Parent a stock certificate or certificates representing such
shares of Surviving Corporation Common Stock in exchange for the certificate or
certificates that formerly represented shares of Merger Subsidiary Common Stock,
which shall be canceled.
1.7 Stock Options.
(a) Each option to purchase shares of Company Common Stock
that is outstanding at the Effective Time, whether or not exercisable
and whether or not vested (a "Company Option"), shall, without any
action on the part of the Company or the holder thereof, be assumed by
Parent in such manner that Parent (i) is a corporation "assuming a
stock option in a transaction to which Section 424(a) applies" within
the meaning of Section 424 of the Code and the regulations thereunder
or (ii) to the extent that Section 424 of the Code does not apply to
any such Company Option, would be such a corporation were Section 424
of the Code applicable to such Company Option. From and after the
Effective Time, all references to the Company in the Company Options
shall be deemed to refer to Parent. The Company Options assumed by
Parent shall be exercisable upon the same terms and conditions as under
the Company Options (including provisions regarding vesting and the
acceleration thereof) except that (i) such Company Options shall
entitle the holder to purchase from Parent the number of shares of
Parent Common Stock (rounded down to the nearest whole number of such
shares) that equals the product of the Conversion Ratio multiplied by
the number of shares of Company Common Stock subject to such Company
Option immediately prior to the Effective Time, (ii) the option
exercise price per share of Parent Common Stock shall be an amount
(rounded up to the nearest full cent) equal to the option exercise
price per share of Company Common Stock in effect immediately prior to
the Effective Time divided by the Conversion Ratio, and (iii) the
Company Options shall vest to the extent required pursuant to the
current terms of such Company Options or other agreements as described
in Section 1.7 of the Company Disclosure Schedule (as defined below);
provided that if such vesting of Company Options or other provisions
with respect to the Company Options would jeopardize the Merger being
accounted for as a "pooling of interests," then the Company shall,
subject to Parent's written consent not to be unreasonably withheld,
use reasonable best efforts to prevent such vesting or effect of other
provisions. Except to the extent required pursuant to the current terms
of such Company Options or other agreements as described in Section 1.7
of the Company Disclosure Schedule, the Company shall not take any
action to accelerate the vesting of any Company Options. Prior to the
Effective Time, the Board of Directors of Parent shall, for purposes of
Rule 16b-3(d)(1) promulgated under Section 16 of the Securities
Exchange Act of 1934, and the rules and regulations thereunder (the
"1934 Act"), specifically approve (i) the assumption by Parent of the
Company Options and (ii) the issuance of Parent Common Stock in the
Merger to directors, officers and stockholders of the Company subject
to Section 16 of the 1934 Act.
(b) As promptly as practicable after the Effective Time,
Parent shall issue to each holder of a Company Option a written
instrument informing such holder of the assumption by Parent of such
Company Option. As soon as reasonably practicable after the Effective
Time (and in any event no later than five business days after the
6
Effective Time, provided current option information required therefor
is delivered to Parent at the Effective Time), Parent shall file a
registration statement on Form S-8 (or any successor form) with respect
to the shares of Parent Common Stock subject to Company Options and
shall use commercially reasonable efforts to maintain such registration
statement (or any successor form), including the current status of any
related prospectus or prospectuses, for so long as the Company Options
remain outstanding. In addition, Parent shall use commercially
reasonable efforts to cause the shares of Parent Common Stock subject
to Company Options to be listed on the NYSE and such other exchanges as
Parent shall determine. Parent shall take all corporate action
necessary to reserve for issuance a sufficient number of shares of
Parent Common Stock for delivery upon exercise of Company Options
pursuant to the terms set forth in this Section 1.7. Parent shall
comply with the terms of the Company Option Plan (as defined in Section
3.3) and use commercially reasonable efforts to cause those Company
Options that qualified as incentive stock options prior to the
Effective Time to continue to qualify as incentive stock options
immediately after the Effective Time.
1.8 Capitalization Changes. If, between the date of this Agreement and
the Effective Time, the outstanding shares of Parent Common Stock shall have
been changed into or exchanged in accordance with the terms of Section 5.2 for a
different number of shares or a different class by reason of any reorganization,
reclassification, subdivision, recapitalization, split-up, combination, exchange
of shares, stock dividend or other similar transaction, the Conversion Ratio and
all per-share price amounts and calculations set forth in this Agreement shall
be appropriately adjusted to reflect such reorganization, reclassification,
subdivision, recapitalization, split-up, combination, exchange of shares, stock
dividend or other similar transaction.
1.9 Certificate of Incorporation of the Surviving Corporation. The
Certificate of Incorporation of the Company, as in effect immediately prior to
the Effective Time, shall be amended as of the Effective Time to read as set
forth on Exhibit A to this Agreement.
1.10 Bylaws of the Surviving Corporation. The Bylaws of the Company, as
in effect immediately prior to the Effective Time, shall be amended as of the
Effective Time to read as set forth on Exhibit B to this Agreement.
1.11 Directors of the Surviving Corporation. The directors of Merger
Subsidiary immediately prior to the Effective Time shall be the directors of the
Surviving Corporation until their respective successors shall be duly elected
and qualified.
ARTICLE 2
CLOSING
2.1 Time and Place. Subject to the satisfaction or waiver of the
provisions of Article 6, the closing of the Merger (the "Closing") shall take
place at 1:00 p.m., local time, on the date that the Required Company
Stockholder Vote (as defined in Section 3.2) is obtained, or as soon thereafter
as, and in any event no later than the second business day after, all conditions
7
to Closing have been satisfied or waived, or on such other date and/or at such
other time as Parent and the Company may mutually agree. The date on which the
Closing actually occurs is herein referred to as the "Closing Date." The Closing
shall take place by telecopy exchange of signature pages with originals to
follow by overnight delivery, or in such other manner or at such place as the
parties hereto may agree.
2.2 Filings at the Closing. At the Closing, subject to the provisions
of Article 6, Parent, Merger Subsidiary, and the Company shall cause the
Certificate of Merger to be filed in accordance with the provisions of Section
251 of the DGCL, and take any and all other lawful actions and do any and all
other lawful things necessary to cause the Merger to become effective.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except (i) as set forth in a document of even date herewith and
concurrently delivered herewith, referring specifically to the representations
and warranties in this Agreement that identifies by section number to which such
disclosure relates (the "Company Disclosure Schedule"), or (ii) as specifically
described through express disclosure of specific facts set forth or incorporated
by reference in the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1998 or in any other filing by the Company with the SEC (as
defined in Section 3.4) filed after the date of filing such Form 10-K and prior
to the date hereof, to the extent the relevancy of such disclosure to such
particular representation and warranty is readily apparent, the Company hereby
makes the following representations and warranties to Parent and Merger
Subsidiary:
3.1 Organization. The Company and each subsidiary of the Company
(referred to herein as a "Subsidiary") is a corporation duly organized, validly
existing, and in good standing under the laws of its respective jurisdiction of
incorporation and has all requisite corporate power and authority to own, lease,
and operate its properties and to carry on its business as now being conducted,
except where the failure to be so organized, existing or in good standing or to
have such corporate power and authority would not, individually or in the
aggregate, have a Company Material Adverse Effect (as defined below). The
Company and each Subsidiary is duly qualified and in good standing to do
business in each jurisdiction in which the property owned, leased, or operated
by it or the nature of the business conducted by it makes such qualification
necessary, except where the failure to be so qualified or in good standing would
not, individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect (as defined below). "Company Material Adverse Effect"
means an effect that is or would reasonably at the time of such effect be
expected to be materially adverse: (i) to the business, results of operation, or
financial condition of the Company and its Subsidiaries, considered as a whole;
or (ii) to the Company's ability to perform any of its material obligations
under this Agreement or to consummate the Merger; or (iii) to the ability of the
Surviving Corporation or Parent to conduct such business, as presently
conducted, following the Effective Time or the ability of Parent to exercise
full rights of ownership of the Company or its assets or business (excluding
effects resulting from agreements previously entered into or actions previously
taken by Parent), except in each case for (i) any such effects directly
resulting from this Agreement or the transactions contemplated by this Agreement
or the announcement hereof, (ii) any occurrence or condition affecting the
8
medical device industry generally, or (iii) any changes in general economic,
regulatory or political conditions. The jurisdictions in which the Company and
each Subsidiary are incorporated are listed in the Company Disclosure Schedule.
The Company has heretofore delivered or made available to Parent or its advisers
complete and accurate copies of the Certificate of Incorporation, Bylaws and
other governing instruments of the Company and each Subsidiary, as currently in
effect, and of the organizational documents and agreements defining the rights
of the Company or any Subsidiary with respect to any material joint ventures,
partnerships or other business in which the Company owns a less-than-100%
interest. Neither the Company nor any Subsidiary, directly or indirectly, owns
or controls or has any equity, partnership, or other ownership interest in any
corporation, partnership, joint venture, or other business association or entity
that is material to the Company and its Subsidiaries, considered as a whole.
3.2 Authorization. The Company has all necessary corporate power and
authority to execute and deliver this Agreement and, subject to obtaining the
necessary approval of its stockholders, to consummate the transactions
contemplated hereby. The execution and delivery by the Company of this Agreement
and the other agreements contemplated hereby to which the Company is a party,
and the consummation by the Company of the transactions contemplated hereby and
thereby, have been duly and validly authorized and approved by the Company's
Board of Directors, no other action of the Company's Board of Directors or
corporate proceeding on the part of the Company or any Subsidiary are necessary
to authorize this Agreement, and, subject to obtaining the approval and adoption
of this Agreement and approval of the Merger by the holders of a majority of the
shares of the Company Common Stock outstanding as of the record date of the
Company's stockholder meeting (the "Required Company Stockholder Vote"), no
other action of the Company's Board of Directors or corporate action on the part
of the Company or any Subsidiary is necessary to consummate the transactions
contemplated hereby. The Merger has been declared advisable by the Board of
Directors of the Company. This Agreement has been duly and validly executed and
delivered by the Company and, assuming due execution and delivery by the other
parties hereto, constitutes the valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject to laws of
general application relating to bankruptcy, insolvency, and the relief of
debtors and rules of law governing specific performance, injunctive relief, or
other equitable remedies.
3.3 Capitalization. As of the date hereof, the authorized capital stock
of the Company consists of (i) 30,000,000 shares of Company Common Stock, par
value $.01 per share, of which 12,273,636 shares are issued and outstanding and
no shares are held in the Company's treasury, and (ii) 1,000,000 shares of
Company Preferred Stock, par value $.01 per share, none of which are issued or
outstanding. All issued and outstanding shares of capital stock of each
Subsidiary are owned, beneficially and of record, by the Company, free and clear
of any mortgage, pledge, security interest, encumbrance, lien or other charge of
any kind ("Lien"), other than Liens granted in connection with the Company's
credit facility. All issued and outstanding shares of Company Common Stock have
been validly issued, are fully paid and nonassessable, and have not been issued
in violation of and are not currently subject to any preemptive rights. Except
9
for options to purchase an aggregate 1,710,764 shares of Company Common Stock
granted pursuant to the Company's Third Amended and Restated 1996 Stock Option
Plan (the "Company Option Plan") listed, together with their respective exercise
prices, in the Company Disclosure Schedule, and for Liens granted in connection
with the Company's credit facility, as of the date of this Agreement, there are
not any outstanding or authorized subscriptions, options, warrants, calls,
rights, convertible securities, commitments, restrictions, arrangements, or any
other agreements of any character to which the Company or any Subsidiary is a
party that, directly or indirectly, (i) obligate the Company or any Subsidiary
to issue any shares of capital stock or any securities convertible into, or
exercisable or exchangeable for, or evidencing the right to subscribe for, any
shares of capital stock, (ii) call for or relate to the sale, pledge, transfer,
or other disposition or encumbrance by the Company or any Subsidiary of any
shares of its capital stock, or (iii) to the knowledge of the Company, relate to
the voting or control of such capital stock. The Company Disclosure Schedule
sets forth a complete and accurate list of all stock options, warrants, and
other rights to acquire Company Common Stock, including the name of the holder,
the date of grant, acquisition price, number of shares, exercisability schedule,
and, in the case of options, the type of option under the Code. No consent of
holders or participants under the Company Option Plan is required to carry out
the provisions of Section 1.7. All actions, if any, required on the part of the
Company under the Company Option Plan to allow for the treatment of Company
Options as is provided in Section 1.7, has been, or prior to the Closing will
be, validly taken by the Company. In no event will the aggregate number of
shares of Company Common Stock outstanding at the Effective Time (including all
shares subject to then outstanding Company Options or other rights to acquire or
commitments to issue shares of Company stock, other than the Stock Option
Agreement referenced in Section 5.13) exceed by more than 1,000 shares the sum
of the outstanding shares of Company Common Stock described in the first
sentence of this Section 3.3, plus any shares of Company Common Stock issued
upon the exercise of outstanding options to purchase Company Common Stock
identified in Section 3.3.
3.4 Reports and Financial Statements. The Company has filed all forms,
reports, registration statements, and documents required to be filed by it with
the Securities and Exchange Commission ("SEC") since October 11, 1996 (such
forms, reports, registration statements, and documents, together with any
amendments thereto, are referred to as the "Company SEC Filings"). As of their
respective dates, the Company SEC Filings (i) complied as to form in all
material respects with the applicable requirements of the Securities Act of 1933
and the rules and regulations thereunder (the "1933 Act") and the Securities
Exchange Act of 1934 and the rules and regulations thereunder (the "1934 Act"),
as the case may be, and (ii) did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements made therein, in light of the circumstances under which
they were made, not misleading. The audited financial statements and unaudited
interim financial statements included or incorporated by reference in the
Company SEC Filings, including but not limited to the Company's audited
financial statements at and for the year ended December 31, 1998 (the "Company
1998 Financials"), (i) were prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the periods involved
(except as may be indicated therein or in the notes thereto or, in the case of
unaudited statements, as permitted by Form 10-Q of the SEC), (ii) complied as of
their respective dates in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto, and (iii) fairly present in all material respects the consolidated
financial position of the Company as of the dates thereof and the income, cash
flows, and changes in stockholders' equity for the periods involved (subject, in
the case of unaudited statements, to normal and recurring year-end adjustments
that were not and are not, individually or in the aggregate, expected to have a
10
Company Material Adverse Effect). The statements of earnings included in the
audited or unaudited interim financial statements in the Company SEC Filings do
not contain any items of special or nonrecurring income or any other income not
earned in the ordinary course of business required to be disclosed separately in
accordance with GAAP, except as expressly specified in the applicable statement
of operations or notes thereto.
3.5 Absence of Undisclosed Liabilities. To the best of the Company's
knowledge, neither the Company nor any Subsidiary has any liabilities or
obligations of any nature (whether absolute, accrued, contingent, or otherwise)
except (a) liabilities or obligations that are accrued or reserved against in
the audited consolidated balance sheet of the Company as of December 31, 1998
contained in the Company 1998 Financials (the "Company Audited Balance Sheet")
or in the unaudited consolidated balance sheet of the Company as of July 3, 1999
contained in the Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended July 3, 1999 (the "Company Interim Balance Sheet"), or referred to in the
notes thereto, (b) liabilities incurred since July 3, 1999 in the ordinary
course of business and of a type and in an amount consistent with past practice,
and (c) liabilities or obligations that would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect.
3.6 Consents and Approvals. Except for (i) any applicable requirements
of the 1933 Act, the 1934 Act, state securities laws, the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976 and the regulations thereunder (the "HSR
Act"), and the antitrust, competition, foreign investment, or similar laws of
any foreign countries or supranational commissions or boards that require
pre-merger notifications or filings with respect to the Merger (collectively,
"Foreign Merger Laws"), (ii) obtaining the Required Company Stockholder Vote,
and (iii) the filing and recordation of appropriate merger documents as required
by the DGCL, the authorization and approval by the Company's Board of Directors
and the execution and delivery by the Company of this Agreement and the other
agreements contemplated hereby to which the Company is a party and the
consummation by the Company of the transactions contemplated hereby and thereby
will not: (a) violate any provision of the Certificate of Incorporation or
Bylaws of the Company or any Subsidiary; (b) violate any statute, law, rule,
regulation, order, or decree of any federal, state, local, or foreign
governmental or regulatory body or authority (including, but not limited to, the
Food and Drug Administration (the "FDA") (a "Governmental Body") or any
nongovernmental self-regulatory agency) by which the Company or any Subsidiary
or any of their respective properties or assets may be bound; (c) require any
filing with or permit, consent, or approval to be obtained from any Governmental
Body or any nongovernmental self-regulatory agency; or (d) result in any
violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default under, result in the loss of any material benefit under,
or give rise to any right of termination, cancellation, increased payments, or
acceleration under, or result in the creation of any Lien (as defined in Section
3.3) on any of the properties or assets of the Company or any Subsidiary under,
any of the terms, conditions, or provisions of any note, bond, mortgage,
indenture, license, franchise, permit, authorization, agreement, or other
instrument or obligation to which the Company or any Subsidiary is a party, or
by which it or any of its properties or assets may be bound, except, in the case
of clauses (b), (c) and (d), for any such filings, permits, consents or
approvals or violations, breaches, defaults, or other occurrences that would
not, individually or in the aggregate, reasonably be expected to prevent or
delay consummation of any of the transactions contemplated hereby in any
material respect, or otherwise prevent the Company from performing its
obligations under this Agreement in any material respect, and would not,
11
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect. Section 3.6 of the Company Disclosure Schedule lists
each note, bond, mortgage, indenture, license, franchise, permit, authorization,
agreement, or other instrument or obligation to which the Company or any
Subsidiary is a party, or by which it or any of its properties or assets may be
bound, under or with respect to which the transactions contemplated by this
Agreement will result in any violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default under, result in the loss
of any benefit under, or give rise to any right of termination, cancellation,
increased payments, or acceleration under, or result in the creation of any Lien
on any of the properties or assets of the Company or any Subsidiary, except for
violations, defaults, losses, rights and Liens that would not, individually or
in the aggregate, reasonably be expected to have a Company Material Adverse
Effect.
3.7 Compliance with Laws. Neither the Company nor any Subsidiary is in
default or violation of any applicable federal, state, local, or foreign laws,
ordinances, regulations, interpretations, judgments, decrees, injunctions,
permits, licenses, certificates, governmental requirements, orders, or other
similar items of any court or other Governmental Body (and including those of
any nongovernmental self-regulatory agency and including environmental laws or
regulations), except for such defaults or violations that would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect. The Company and each Subsidiary has timely filed or
otherwise provided all registrations, reports, data, and other information and
applications with respect to its medical device, pharmaceutical, consumer,
health care, and other governmentally regulated products (the "Regulated
Products") required to be filed with or otherwise provided to the FDA or any
other Governmental Body with jurisdiction over the manufacture, use, or sale of
the Regulated Products, and all regulatory licenses or approvals in respect
thereof are in full force and effect, except where the failure to file timely
such registrations, reports, data, information, and applications or the failure
to have such licenses and approvals in full force and effect would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect.
3.8 Litigation. There are no claims, actions, suits, proceedings or, to
the knowledge of the Company, investigations or reviews of any kind, pending or,
to the knowledge of the Company, threatened in writing, against the Company or
any Subsidiary or any asset or property of the Company or any Subsidiary, except
for such claims, actions, suits, proceedings, investigations or reviews that
would not, individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect.
3.9 Absence of Material Adverse Changes. Since December 31, 1998 there
has not been any (a) Company Material Adverse Effect; (b) damage, destruction,
or loss, not covered by insurance, that would, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect; or (c)
material change by the Company or any Subsidiary in accounting methods or
principles used for financial reporting purposes, except as required by a change
in applicable law or generally accepted accounting principles and concurred with
by the Company's independent public accountants.
12
3.10 Officers, Directors and Employees. Prior to the date hereof, the
Company has provided to Parent a list that completely and accurately sets forth
the name and current annual salary rate of each executive officer of the Company
or of any Subsidiary whose total remuneration for the last fiscal year was, or
for the current fiscal year is expected to be, in excess of $100,000, together
with a summary of the bonuses, commissions, additional compensation, and other
like cash benefits, if any, paid or payable to such persons for the last fiscal
year and proposed for the current fiscal year. The Company Disclosure Schedule
completely and accurately sets forth (i) the names of all former executive
officers of the Company or of any Subsidiary whose employment with the Company
or any Subsidiary has terminated either voluntarily or involuntarily during the
preceding 12-month period; and (ii) the names of the executive officers (with
all positions and titles indicated) and directors of the Company and of each
Subsidiary. Except as would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect: (i) no unfair labor practice
complaint against the Company or any Subsidiary is pending before the National
Labor Relations Board, and there is no labor strike, slowdown or stoppage
pending or, to the knowledge of the Company, threatened in writing against or
involving the Company or any Subsidiary; (ii) no unionizing efforts have, to the
knowledge of the Company, been made by employees of the Company or any
Subsidiary, neither the Company nor any Subsidiary is a party to or subject to
any collective bargaining agreement, and no collective bargaining agreement is
currently being negotiated by the Company or any Subsidiary; and (iii) there is
no labor dispute pending or, to the knowledge of the Company, threatened in
writing between the Company or any Subsidiary and its employees.
3.11 Taxes. Except for such matters that, individually or in the
aggregate, would not have a Company Material Adverse Effect, (i) the Company and
each Subsidiary have filed, or have obtained extensions to file (which
extensions have not expired without filing), all state, local, United States,
foreign, or other tax reports and returns required to be filed by any of them;
(ii) the Company and each Subsidiary have duly paid, or accrued on their books
of account, all taxes (including estimated taxes) shown as due on such reports
and returns (or such extension requests), or assessed against them, other than
taxes being contested in good faith in proper proceedings and (iii) the
liabilities and reserves for taxes reflected on the Company Audited Balance
Sheet or the Company Interim Balance Sheet are adequate to cover all taxes
payable by the Company and its Subsidiaries for all taxable periods and portions
thereof ending on or before the dates thereof. To the Company's knowledge, no
tax audits are pending against and no claims for taxes have been received in
writing by the Company or any of its Subsidiaries, other than audits and claims
that, individually and in the aggregate, are not reasonably expected to have a
Company Material Adverse Effect. Neither the Company nor any Subsidiary has,
with regard to any assets or property held, acquired or to be acquired by any of
them, filed a consent to the application of Section 341(f)(2) of the Code.
Neither the Company nor, to the knowledge of the Company, any of its
Subsidiaries has taken or agreed to take any action (other than actions
contemplated by this Agreement) that would prevent the Merger from constituting
a reorganization qualifying under Sections 368(a)(2)(E) and 368(a)(1)(B) of the
Code. The Company is not aware of any agreement, plan or other circumstance that
would prevent the Merger from so qualifying under Sections 368(a)(2)(E) and
368(a)(1)(B) of the Code.
13
For the purposes of this Agreement, "tax" shall mean and include taxes,
duties, withholdings, assessments, and charges assessed or imposed by any
governmental authority (together with any interest, penalties and additions to
tax imposed with respect thereto), including but not limited to all federal,
state, county, local, and foreign income, profits, gross receipts, import, ad
valorem, real and personal property, franchise, license, sales, use, value
added, stamp, transfer, withholding, payroll, employment, excise, custom, duty,
and any other taxes, obligations and assessments of any kind whatsoever; "tax"
shall also include any liability for taxes arising as a result of being (or
ceasing to be) a member of any affiliated, consolidated, combined, or unitary
group as well as any liability for taxes under any tax allocation, tax sharing,
tax indemnity, or similar agreement.
3.12 Contracts. The Company Disclosure Schedule lists, and the Company
has heretofore furnished to Parent complete and accurate copies of (or, if oral,
the Company Disclosure Schedule states all material provisions of), (a) every
employment, material consulting, severance or change of control agreement or
arrangement for the benefit of any director, officer, employee, other person or
stockholder of the Company or any Subsidiary or any affiliate thereof in effect
as of the date of this Agreement to which the Company or any Subsidiary is a
party or by which the Company or any Subsidiary or any of their properties or
assets is bound, (b) every contract with physicians, scientific advisory board
members or material consultants in effect as of the date of this Agreement to
which the Company or any Subsidiary is a party or by which the Company or any
Subsidiary or any of their properties or assets is bound, and (c) every
contract, agreement, or understanding to which the Company or any Subsidiary is
a party that would reasonably be expected to involve payments by or to the
Company or any Subsidiary in excess of $100,000 during the Company's current
1999 fiscal year or in excess of $250,000 in the aggregate during the Company's
1999, 2000 and 2001 fiscal years, or would have a Company Material Adverse
Effect, or that is material and was not made in the ordinary course of business.
Neither the Company nor any Subsidiary is in material violation of or in default
under any contract, plan, agreement, understanding, arrangement or obligation
that is material to the Company and its Subsidiaries considered as a whole,
except for such violations or defaults that would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect. As
of the date of this Agreement, neither the Company nor any Subsidiary is a party
to any contract, plan, agreement, understanding, arrangement or obligation (i)
that restricts the Company's, or after the Merger would restrict the Surviving
Corporation's or Parent's, ability to conduct any line of business, (ii) that
imposes on the Company or any Subsidiary material obligations (including,
without limitation, to pay material milestone payments or material license fees)
not reflected in the Company 1998 Financials, or (iii) that would be required to
be filed with the SEC in a filing to which paragraph (b)(10) of Item 601 of
Regulation S-K of the Rules and Regulations of the SEC is applicable, which has
not been so filed.
3.13 Intellectual Property Rights. The Company Disclosure Schedule
contains a complete and accurate list of all material patents, trademarks, trade
names, service marks, copyrights, and all applications for or registrations of
any of the foregoing as to which the Company or any Subsidiary is the owner or a
licensee (the "Company Intellectual Property"). The Company and each Subsidiary
owns, free and clear of any Lien (as defined in Section 3.3), other than Liens
14
granted in connection with the Company's credit facility and Liens that would
not be reasonably expected to have a Company Material Adverse Effect, or is
licensed to use, all patents, trademarks, trade names, service marks,
copyrights, applications for or registrations of any of the foregoing comprising
the Company Intellectual Property. No claim has been asserted or, to the
knowledge of the Company, threatened in writing by any person, with respect to
the use of the Company Intellectual Property or challenging or questioning the
validity or effectiveness of any license or agreement with respect thereto,
except for such claims that, individually or in the aggregate, would not
reasonably be expected to have a Company Material Adverse Effect. To the
knowledge of the Company, neither the use of the Company Intellectual Property
by the Company or any Subsidiary in the present conduct of its business nor any
product or service of the Company or any Subsidiary infringes on the valid
intellectual property rights of any person in a manner that, individually or in
the aggregate, would reasonably be expected to have a Company Material Adverse
Effect. Except as would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect, (i) all Company Intellectual
Property listed in the Company Disclosure Schedule has the status indicated
therein and, unless provided otherwise, all applications are still pending in
good standing and have not been abandoned, and (ii) to the knowledge of the
Company, the Company Intellectual Property is valid and has not been challenged
in any judicial or administrative proceeding. To the knowledge of the Company,
no person or entity nor such person's or entity's business or products has
infringed, or misappropriated any Company Intellectual Property, or currently is
infringing, or misappropriating any Company Intellectual Property, except as
would not, individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect.
3.14 Benefit Plans.
(a) Neither the Company nor any Subsidiary sponsors,
maintains, contributes to, or has, within the past five years,
sponsored, maintained, or contributed to or been required to contribute
to, any "employee pension benefit plan" ("Pension Plan"), as such term
is defined in Section 3(2) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), including, solely for the purpose of
this subsection, a plan excluded from coverage by Section 4(b)(5) of
ERISA. Each such Pension Plan presently maintained by the Company or
any Subsidiary is, in all material respects, in compliance with
applicable provisions of ERISA, the Code, and other applicable law and
the Company or such Subsidiary has performed all of its obligations
under such Pension Plan except for such obligations that would not,
individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect.
(b) Neither the Company nor any Subsidiary sponsors,
maintains, contributes to, or has, within the past five years,
sponsored, maintained, or contributed to or been required to contribute
to, any Pension Plan that is subject to Title IV of ERISA.
(c) Neither the Company nor any Subsidiary sponsors,
maintains, or contributes to any "employee welfare benefit plan"
("Welfare Plan"), as such term is defined in Section 3(1) of ERISA,
whether insured or otherwise, and any such Welfare Plan presently
maintained by the Company or any Subsidiary is, in all material
respects, in compliance with the provisions of ERISA, the Code, and all
other applicable laws, including, but not limited to, Section 4980B of
15
the Code and the regulations thereunder, and Part 6 of Title I of
ERISA. Neither the Company nor any Subsidiary has established or
contributed to any "voluntary employees' beneficiary association"
within the meaning of Section 501(c)(9) of the Code.
(d) Neither the Company nor any Subsidiary currently maintains
or contributes to any oral or written bonus, profit-sharing,
compensation (incentive or otherwise), commission, stock option, or
other stock-based compensation, retirement, severance, change of
control, vacation, sick or parental leave, dependent care, deferred
compensation, cafeteria, disability, hospitalization, medical, death,
retiree, insurance, or other benefit or welfare or other similar plan,
policy, agreement, trust, fund, or arrangement providing for the
remuneration or benefit of all or any employees, directors or any other
person, that is neither a Pension Plan nor a Welfare Plan
(collectively, the "Compensation Plans").
(e) With respect to the Pension Plans, Welfare Plans or
Compensation Plans, no event has occurred and, to the knowledge of the
Company, there exists no condition or set of circumstances, in
connection with which the Company or any of its Subsidiaries would be
subject to any liability under the terms of such Plans (other than the
payment of benefits thereunder), ERISA, the Code or any other
applicable law that would, individually or in the aggregate, reasonably
be expected to have a Company Material Adverse Effect.
(f) The IRS has issued favorable determination letters with
respect to all Company and Subsidiary Pension Plans that are intended
to be qualified under Section 401(a) of the Code. The Company has
provided or made available to Parent summaries of all Pension Plans,
Welfare Plans, Compensation Plans, and related agreements, and complete
and accurate copies of all annual reports (Form 5500), favorable
determination letters, current summary plan descriptions, and all
employee handbooks or manuals. The Company has provided or made
available to Parent (i) copies of all employment agreements with
officers of any of the Company or its Subsidiaries (or copies of forms
of agreements setting forth representative employment terms and
conditions); (ii) copies of all severance, bonus or incentive
agreements, programs and policies of any of the Company or any
Subsidiary with or relating to any of its employees; and (iii) copies
of all plans, programs, agreements and other arrangements of any of the
Company or any Subsidiary with or relating to any of its employees that
contain change in control provisions.
(g) The execution of, and performance of the transactions
contemplated in, this Agreement will not (either alone or upon the
occurrence of any additional or subsequent events) constitute an event
under any Pension Plan, Welfare Plan, Compensation Plan, or other
arrangement that will or may result in any payment (whether of
severance pay or otherwise), acceleration, forgiveness of indebtedness,
vesting, distribution, increase in benefits, or obligation to fund
benefits. The aggregate amount that (i) would be received (whether in
cash or property or the vesting of property) as a result of any of the
transactions contemplated by this Agreement by all employees, officers,
or directors of the Company or any of its affiliates who are a
16
"disqualified individuals" (as such term is defined in proposed
Treasury Regulation Section 1.280G-1) under any Pension Plan, Welfare
Plan, or Compensation Plan currently in effect, and (ii) would
constitute an "excess parachute payment" (as such term is defined in
Section 280G(b)(1) of the Code), shall not exceed $4,500,000.
3.15 Minute Books. The Company has previously made available to Parent
or its representatives all of its minutes of meetings of and corporate actions
or written consents by the stockholders, Boards of Directors, and committees of
the Boards of Directors of the Company.
3.16 No Finders. No act of the Company or any Subsidiary has given or
will give rise to any claim against any of the parties hereto for a brokerage
commission, finder's fee, or other like payment in connection with the
transactions contemplated herein, except payments in the amounts specified in
the Company Disclosure Schedule to those parties identified thereon who have
acted as a finder for the Company or have been retained by the Company as
financial advisors pursuant to the agreements or other documents described in
the Company Disclosure Schedule, copies of which have been provided or made
available to Parent or its advisors prior to the date of this Agreement.
3.17 Proxy Statement. The Proxy Statement/Prospectus (as defined in
Section 5.5 hereof) and any amendments or supplements thereto will comply as to
form in all material respects with all applicable laws, and none of the
information supplied by the Company specifically for inclusion or incorporation
therein or in any amendments or supplements thereto, or any schedules required
to be filed with the SEC in connection therewith, will, at the date the Proxy
Statement/Prospectus (or any amendment or supplement thereto) is first mailed to
stockholders, at the time of the Company Stockholders Meeting, or at the
Effective Time contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading; provided, however, that no representation or warranty is
made by the Company with respect to information relating to Parent or any
affiliate of Parent supplied by Parent specifically for inclusion in the Proxy
Statement/Prospectus.
3.18 Fairness Opinion. The Board of Directors of the Company has
received an opinion from Deutsche Bank Securities Inc. to the effect that, as of
the date of this Agreement, the Conversion Ratio is fair, from a financial point
of view, to the holders of Company Common Stock, and the Company will promptly
deliver a copy of such opinion to Parent.
3.19 State Takeover Laws. The Board of Directors of the Company has
approved the transactions contemplated by this Agreement, such that the
provisions of Section 203 (entitled "Business Combinations with Interested
Shareholders") of the DGCL will not apply to this Agreement or the Agreements to
Facilitate Merger or the Stock Option Agreement or any of the transactions
contemplated hereby or thereby.
3.20 Merger Filings. The information as to the Company or any of its
affiliates or stockholders included in the Company's filing, or submitted to
Parent and Merger Subsidiary for inclusion in their filing, if any, required to
17
be submitted under the HSR Act or under any Foreign Merger Laws shall be true,
correct, and complete in all material respects and shall comply in all material
respects with the applicable requirements of the HSR Act, the rules and
regulations issued by the Federal Trade Commission pursuant thereto, and Foreign
Merger Laws.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
OF PARENT AND MERGER SUBSIDIARY
Except (i) as set forth in a document of even date herewith, referring
specifically to the representations and warranties in this Agreement that
identifies by section number to which such disclosure relates (the "Parent
Disclosure Schedule"), or (ii) as specifically described through express
disclosure of specific facts set forth or incorporated by reference in Parent's
Annual Report on Form 10-K for the fiscal year ended April 30, 1999 or in any
other filing by Parent with the SEC filed after the date of filing such Form
10-K and prior to the date hereof, to the extent the relevancy of such
disclosure to such particular representation and warranty is readily apparent,
Parent and Merger Subsidiary hereby jointly and severally make the following
representations and warranties to the Company:
4.1 Organization. Parent is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Minnesota. Merger
Subsidiary is a corporation duly organized and validly existing under the laws
of the State of Delaware. Each of Parent and Merger Subsidiary has all requisite
corporate power and authority to own, lease, and operate its properties and to
carry on its business as now being conducted, except where the failure to be so
organized, existing or in good standing or to have such corporate power and
authority would not, individually or in the aggregate, have a Parent Material
Adverse Effect (as defined below). Each of Parent and Merger Subsidiary is duly
qualified and in good standing to do business in each jurisdiction in which the
property owned, leased, or operated by it or the nature of the business
conducted by it makes such qualification necessary, except where the failure to
be so qualified or in good standing would not, individually or in the aggregate,
reasonably be expected to have a Parent Material Adverse Effect (as defined
below). "Parent Material Adverse Effect" means an effect that is or would
reasonably at the time of such effect be expected to be materially adverse: (i)
to the business, results of operation, or financial condition of Parent and its
subsidiaries, considered as a whole, or (ii) to Parent's ability to perform any
of its material obligations under this Agreement or to consummate the Merger,
except in each case for any such effects resulting from or arising out of (i)
this Agreement or the transactions contemplated by this Agreement or the
announcement hereof, (ii) any occurrence or condition affecting the medical
device industry generally, or (iii) any changes in general economic, regulatory
or political conditions. Parent has heretofore delivered or made available to
the Company or its advisors complete and accurate copies of the Articles of
Incorporation and Bylaws of Parent, as currently in effect.
4.2 Authorization. Each of Parent and Merger Subsidiary has all
necessary corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. The execution and
delivery by Parent and Merger Subsidiary of this Agreement and the other
agreements contemplated hereby to which Parent or Merger Subsidiary is a party,
18
and the consummation of the transactions contemplated hereby and thereby, have
been duly and validly authorized and approved by the Boards of Directors of
Parent and Merger Subsidiary and by Parent as the sole stockholder of Merger
Subsidiary, and no other action of Parent's or Merger Subsidiary's Boards of
Directors or corporate proceeding on the part of Parent and Merger Subsidiary,
and no vote, consent, or approval of Parent's shareholders, are necessary to
authorize this Agreement or to consummate the transactions contemplated hereby.
The Merger has been declared advisable by the Board of Directors of Merger
Subsidiary. This Agreement has been duly and validly executed and delivered by
each of Parent and Merger Subsidiary and, assuming due execution and delivery by
the Company, constitutes the valid and binding obligation of Parent and Merger
Subsidiary, enforceable against each of them in accordance with its terms,
subject to laws of general application relating to bankruptcy, insolvency, and
the relief of debtors and rules of law governing specific performance,
injunctive relief, or other equitable remedies.
4.3 Capitalization. As of August 25, 1999, the authorized capital stock
of Parent consisted of (a) 1,600,000,000 shares of Common Stock with a par value
of $.10 per share, of which there were 586,744,542 shares issued and outstanding
and no shares held in Parent's treasury, and (b) 2,500,000 shares of Preferred
Stock with a par value of $1.00 per share, of which there were no shares issued
and outstanding. The authorized capital stock of Merger Subsidiary consists of
2,500 shares of Merger Subsidiary Common Stock, 100 of which are issued and
outstanding and owned by Parent. All issued and outstanding shares of Parent
Common Stock and Merger Subsidiary Common Stock are, and the shares of Parent
Common Stock to be issued and delivered in the Merger pursuant to Article 1
hereof shall be, at the time of issuance and delivery, validly issued, fully
paid, nonassessable, and free of preemptive rights. The shares of Parent Common
Stock to be issued and delivered in the Merger pursuant to Article 1 hereof
shall be registered under the 1933 Act and duly listed for trading on the NYSE,
subject to official notice of issuance.
4.4 Consents and Approvals. Except for (i) any applicable requirements
of the 1933 Act, the 1934 Act, state securities laws, the NYSE, the HSR Act, and
Foreign Merger Laws, and (ii) the filing and recordation of appropriate merger
documents as required by the DGCL, the authorization and approval by parent's
and Merger Subsidiary's Boards of Directors and the execution and delivery by
Parent and Merger Subsidiary of this Agreement and the other agreements
contemplated hereby to which Parent and Merger Subsidiary are parties, and the
consummation of the transactions contemplated hereby and thereby will not: (a)
violate any provision of the Articles or Certificate of Incorporation or Bylaws
of Parent or Merger Subsidiary; (b) violate any statute, law, rule, regulation,
order, or decree of any Governmental Body or any nongovernmental self-regulatory
agency by which Parent or any of its subsidiaries or any of their respective
properties or assets may be bound; (c) require any filing with or permit,
consent, or approval to be obtained from any Governmental Body or any
nongovernmental self-regulatory agency; or (d) result in any violation or breach
of, or constitute (with or without due notice or lapse of time or both) a
default under, result in the loss of any material benefit under, or give rise to
any right of termination, cancellation, increased payments, or acceleration
under, or result in the creation of any Lien on any of the properties or assets
of Parent or its subsidiaries under, any of the terms, conditions, or provisions
of any note, bond, mortgage, indenture, license, franchise, permit, agreement,
or other instrument or obligation to which Parent or any of its subsidiaries is
a party, or by which any of them or any of their respective properties or assets
may be bound, except, in the case of clauses (b), (c) and (d), for any such
19
filings, permits, consents or approvals or violations, breaches, defaults, or
other occurrences that would not, individually or in the aggregate, reasonably
be expected to prevent or delay consummation of any of the transaction
contemplated hereby in any material respect, or otherwise prevent Parent from
performing its obligations under this Agreement in any material respect, and
would not, individually or in the aggregate, reasonably be expected to have a
Parent Material Adverse Effect.
4.5 Reports; Financial Statements; Absence of Changes. Parent has filed
all forms, reports, registration statements, and documents required to be filed
by it with the SEC since May 1, 1996 (such forms, reports, registration
statements and documents, together with any amendments thereto, are referred to
as the "Parent SEC Filings"). As of their respective dates, the Parent SEC
Filings (i) complied as to form in all material respects with the applicable
requirements of the 1933 Act and the 1934 Act, as the case may be, and (ii) did
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements made
therein, in light of the circumstances under which they were made, not
misleading. The audited financial statements and unaudited interim financial
statements included or incorporated by reference in the Parent SEC Filings (i)
were prepared in accordance with generally accepted accounting principles
applied on a consistent basis during the periods involved (except as may be
indicated therein or in the notes thereto or, in the case of unaudited
statements, as permitted by Form 10-Q of the SEC), subject, in the case of
unaudited interim financial statements, to the absence of notes and to year-end
adjustments, (ii) complied as of their respective dates in all material respects
with applicable accounting requirements and the published rules and regulations
of the SEC with respect thereto, and (iii) fairly present in all material
respects the consolidated financial position of Parent as of the dates thereof
and the income, cash flows, and changes in shareholders' equity for the periods
involved, except as otherwise noted therein (subject, in the case of unaudited
statements, to normal and recurring year-end adjustments that were not and are
not expected to have a Parent Material Adverse Effect).
4.6 Registration Statement. The Registration Statement (as defined in
Section 5.5 hereof) and any amendments or supplements thereto will comply as to
form in all material respects with the 1933 Act, and none of the information
supplied by Parent specifically for inclusion or incorporation therein or in any
amendments or supplements thereto, or any schedules required to be filed with
the SEC in connection therewith, will, at the time the Registration Statement
becomes effective, at the date the Proxy Statement/Prospectus (or any amendment
or supplement thereto) is first mailed to stockholders, at the time of the
Company Stockholders Meeting, or at the Effective Time, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading; provided, however,
that no representation or warranty is made by Parent with respect to information
supplied by the Company or any affiliate of the Company specifically for
inclusion in the Registration Statement.
4.7 No Finders. No act of Parent or Merger Subsidiary has given or will
give rise to any claim against any of the parties hereto for a brokerage
20
commission, finder's fee, or other like payment in connection with the
transactions contemplated herein, except for payments to US Bancorp Xxxxx
Xxxxxxx for financial advisory services to Parent in connection herewith.
4.8 Absence of Undisclosed Liabilities. To the best of Parent's
knowledge, neither Parent nor any of its subsidiaries has any liabilities or
obligations of any nature (whether absolute, accrued, contingent or otherwise)
except (a) liabilities or obligations that are accrued or reserved against in
the audited consolidated balance of Parent as of April 30, 1999 contained in the
Parent SEC Filings or referred to in the notes thereto, (b) liabilities incurred
since April 30, 1999 in the ordinary course of business and of a type and in an
amount consistent with past practice, and (c) liabilities or obligations that
would not, individually or in the aggregate, reasonably be expected to have a
Parent Material Adverse Effect.
4.9 Compliance with Laws. Neither Parent nor any of its subsidiaries is
in default or violation of any applicable federal, state, local or foreign laws,
ordinances, regulations, interpretations, judgments, decrees, injunctions,
permits, licenses, certificates, governmental requirements, orders or other
similar items of any court or other Governmental Body (and including those of
any nongovernmental self-regulatory agency and including environmental laws or
regulations), except for such defaults or violations that would not,
individually or in the aggregate, reasonably be expected to have a Parent
Material Adverse Effect. Parent and each of its subsidiaries has timely filed or
otherwise provided all registrations, reports, data and other information and
applications with respect to its Regulated Products required to be filed with or
otherwise provided to the FDA or any other Governmental Body with jurisdiction
over the manufacture, use of sale of the Regulated Products, and all regulatory
licenses or approvals in respect thereof are in full force and effect, except
where the failure to file timely such registrations, reports, data, information
and applications or the failure to have such licenses and approvals in full
force and effect would not, individually or in the aggregate, reasonably be
expected to have a Parent Material Adverse Effect.
4.10 Litigation. There are no claims, actions, suits, proceedings, or,
to the knowledge of Parent, investigations or reviews of any kind, pending or,
to the knowledge of Parent, threatened in writing, against Parent or any of its
subsidiaries or any asset or property of Parent or any of its subsidiaries,
except for such claims, actions, suits, proceedings, investigations or reviews
that would not, individually or in the aggregate, reasonably be expected to have
a Parent Material Adverse Effect.
4.11 Absence of Material Adverse Changes. Since April 30, 1999, there
has not been any (a) Parent Material Adverse Effect, (b) damage, destruction or
loss, not covered by insurance, that would, individually or in the aggregate,
reasonably be expected to have a Parent Material Adverse Effect, or (c) material
change by Parent or any of its subsidiaries in accounting methods or principles
used for financial reporting purposes, except as required by a change in
applicable law or generally accepted accounting principles and concurred with by
Parent's independent public accountants.
4.12 Reorganization. Neither Parent nor, to the knowledge of Parent,
any of its subsidiaries has taken or agreed to take any action (other than
actions contemplated by this Agreement) that would prevent the Merger from
21
constituting a reorganization qualifying under Sections 368(a)(2)(E) and
368(a)(1)(B) of the Code. Parent is not aware of any agreement, plan or other
circumstances that would prevent the Merger from so qualifying under Sections
368(a)(2)(E) and 368(a)(1)(B) of the Code.
4.13 Merger Filings. The information as to Parent and Merger Subsidiary
or any of their affiliates or shareholders included in Parent's filing, or
submitted to the Company for inclusion in its filing, if any, required to be
submitted under the HSR Act or under any Foreign Merger Laws shall be true,
correct, and complete in all material respects and shall comply in all material
respects with the applicable requirements of the HSR Act, the rules and
regulations issued by the Federal Trade Commission pursuant thereto, and Foreign
Merger Laws.
ARTICLE 5
COVENANTS
5.1 Conduct of Business of the Company. Except as contemplated by this
Agreement or as set forth in Section 5.1 of the Company Disclosure Schedule,
unless Parent shall otherwise consent in writing (such consent not to be
unreasonably withheld or delayed), during the period from the date of this
Agreement to the Effective Time, the Company and each Subsidiary will conduct
its respective operations, to the extent commercially reasonable, according to
its ordinary and usual course of business and consistent with past practice, and
the Company and each Subsidiary will use its commercially reasonable efforts to
preserve substantially intact its respective business organizations, to keep
available the services of its respective officers and employees and to maintain
satisfactory relationships with licensors, licensees, suppliers, contractors,
distributors, physicians, consultants, customers, and others having material
business relationships with it. The Company will promptly advise Parent of any
material change in the management, present or planned business, properties,
liabilities, results of operations, or financial condition of the Company or any
material Subsidiary. The Company will, prior to distributing or otherwise
circulating any notices, directives, or other communications directed to all or
groups of customers, vendors, employees, distributors, or others associated with
its business relating to the transactions contemplated hereby or to the
operation of business after consummation of such transactions, consult with
Parent and give Parent reasonable opportunity to comment thereon. Without
limiting the generality of the foregoing, and except as otherwise expressly
provided in or contemplated by this Agreement or as set forth in Section 5.1 of
the Company Disclosure Schedule, from the date of the Agreement until the
Effective Time, neither the Company nor any Subsidiary will, without the prior
written consent of Parent (such consent not to be unreasonably withheld or
delayed):
(a) amend its Certificate of Incorporation or Bylaws;
(b) authorize for issuance, issue, sell, pledge, or deliver
(whether through the issuance or granting of additional options,
warrants, commitments, subscriptions, rights to purchase, or otherwise)
any stock of any class or any securities convertible into shares of
stock of any class (other than the issuance of shares of Company Common
Stock pursuant to the exercise of stock options outstanding on the date
of this Agreement);
22
(c) split, combine, or reclassify any shares of its capital
stock, declare, set aside, or pay any dividend or other distribution
(whether in cash, stock, or property or any combination thereof) in
respect of its capital stock; or redeem or otherwise acquire any shares
of its capital stock or its other securities; or amend or alter any
material term of any of its outstanding securities;
(d) other than indebtedness incurred in the ordinary course of
business and consistent with past practice and other than intercompany
indebtedness, create, incur or assume any indebtedness for borrowed
money, or assume, guarantee, endorse, or otherwise agree to become
liable or responsible for the obligations of any other person, or make
any loans, advances or capital contributions to, or investments in, any
other person; or create, incur or assume any material Lien on any
material asset;
(e) (i) increase in any manner the compensation of any of its
directors, officers, employees, or consultants, or accelerate the
payment of any such compensation, except in each case in the ordinary
course of business and consistent with past practice (including,
without limitation, annual year end increases and accelerated payments
customarily made upon termination of employment) or consistent with
existing contractual commitments or as required by applicable law; (ii)
pay or accelerate or otherwise modify in any material respect the
payment, vesting, exercisability, or other feature or requirement of
any pension, retirement allowance, severance, change of control, stock
option, or other employee benefit not required by any existing plan,
agreement, or arrangement to any such director, officer, employee or
consultant; or (iii) except for normal increases in the ordinary course
of business in accordance with its customary past practices or
consistent with existing contractual commitments or as required by
applicable laws, commit itself to any additional or increased pension,
profit-sharing, bonus, incentive, deferred compensation, group
insurance, severance, change of control, retirement or other benefit,
plan, agreement, or arrangement, or to any employment or consulting
agreement, with or for the benefit of any person, or amend any of such
plans or any of such agreements in existence on the date hereof (except
any amendment required by law or that would not materially increase
benefits under the relevant plan);
(f) except in the ordinary course of business and consistent
with past practice or pursuant to contractual obligations existing on
the date hereof, sell, transfer, mortgage, or otherwise dispose of or
encumber any assets or properties material to the Company and its
Subsidiaries, considered as a whole;
(g) acquire or agree to acquire (i) by merging or
consolidating with, or by purchasing a substantial portion of the
assets of, or by any other manner, any business of any corporation,
partnership, joint venture, association, or other business organization
or division thereof or (ii) any assets that are material, individually
or in the aggregate, to the Company and its Subsidiaries, considered as
a whole, except as provided in subsection (h) below and except
purchases of inventory, materials and supplies in the ordinary course
of business consistent with past practice;
23
(h) make or agree to make any new capital expenditure or
expenditures, except for capital expenditures not in excess of an
aggregate $7,500,000;
(i) enter into, amend in any material respect, or terminate
any joint ventures or any other agreements, commitments, or contracts
that are material to the Company and its Subsidiaries, considered as a
whole (except agreements, commitments, or contracts expressly provided
for or contemplated by this Agreement or for the purchase, sale, or
lease of goods, services, or properties in the ordinary course of
business, consistent with past practice);
(j) enter into or terminate, or amend, extend, renew, or
otherwise modify in any material respect (including, but not limited
to, by default or by failure to act) any material distribution, OEM,
independent sales representative, noncompetition, licensing, franchise,
research and development, supply, or similar contract, agreement, or
understanding (except agreements, commitments, or contracts expressly
provided for or contemplated by this Agreement or for the purchase,
sale, or lease of goods, services, or properties in the ordinary course
of business, consistent with past practice), or enter into any
contract, plan, agreement, understanding, arrangement or obligation
that restricts the Company's, or after the Merger would restrict the
Surviving Corporation's or Parent's, ability to conduct any line of
business;
(k) change in any material respect its general credit policy
as to sales of inventories or collection of receivables or its
inventory consignment practices;
(l) remove or permit to be removed from any building,
facility, or real property any material machinery, equipment, fixture,
vehicle, or other personal property or parts thereof, except in the
ordinary course of business;
(m) alter or revise its accounting principles, procedures,
methods, or practices in any material respect, except as required by
applicable law or by a change in generally accepted accounting
principles and concurred with by the Company's independent public
accountants;
(n) institute, settle, or compromise any claim, action, suit,
or proceeding pending or threatened by or against it involving amounts
in excess of $1,000,000, at law or in equity or before any Governmental
Body (including, but not limited to, the FDA) or any nongovernmental
self-regulatory agency;
(o) knowingly take any action that would render any
representation, warranty, covenant, or agreement of the Company in this
Agreement inaccurate or breached such that the conditions in Section
6.2 will not be satisfied as of the Closing Date; or
(p) agree, whether in writing or otherwise, to do any of the
foregoing.
5.2 Conduct of Business of Parent. Except as contemplated by this
Agreement, from the date of this Agreement until the Effective Time, Parent will
24
not do, and will not permit any of its subsidiaries to do, any of the following
without the prior written consent of the Company (such consent not to be
unreasonably withheld or delayed):
(a) combine or reclassify any shares of Parent's capital stock
(whether by merger, consolidation, reorganization or otherwise),
declare, set aside or pay any dividend or other distribution (whether
in cash, stock or property or any combination thereof, but excluding a
stock split effected in the form of a stock dividend and excluding
Parent's regular quarterly cash dividends) in respect of Parent's
capital stock, or redeem or otherwise acquire (other than as would not
violate Section 5.21) any shares of Parent's capital stock or amend or
alter any material term of any of Parent's outstanding securities;
(b) alter or revise its accounting principles, procedures,
methods or practices in any material respect, except as required by
applicable law or regulation or by a change in generally accepted
accounting principles and concurred with by Parent's independent public
accountants;
(c) knowingly take any action that would result in a failure
to maintain the trading of Parent Common Stock on the NYSE;
(d) knowingly take any action, or knowingly fail to take any
action, that would render any representation, warranty, covenant or
agreement of Parent in this Agreement inaccurate or breached such that
the conditions in Section 6.3 will not be satisfied; or
(e) agree, whether in writing or otherwise, to do any of the
foregoing.
5.3 No Solicitation. The Company and its Subsidiaries shall not, and
shall cause their respective officers, directors, employees, representatives,
agents, or affiliates (including, but not limited to any investment banker,
attorney, or accountant retained by the Company or any Subsidiary), not to,
directly or indirectly, solicit, knowingly encourage, initiate, or participate
in any way in discussions or negotiations with, or knowingly provide any
nonpublic information to, any corporation, partnership, person, or other entity
or group (other than Parent or any affiliate or agent of Parent) concerning any
proposed Alternative Transaction, or otherwise knowingly facilitate any effort
or attempt to make or implement an Alternative Transaction. For purposes of this
Agreement, "Alternative Transaction" shall mean any of the following involving
the Company or any Subsidiary: (i) any tender offer, exchange offer, merger,
consolidation, share exchange, business combination or similar transaction
involving capital stock of the Company or any material Subsidiary; (ii) any
transaction or series of related transactions pursuant to which any person or
entity (or its shareholders), other than Parent, or Merger Subsidiary or any of
their affiliates (a "Third Party") acquires shares (or securities exercisable
for or convertible into shares) representing more than 20% of the outstanding
shares of any class of capital stock of the Company or any material Subsidiary;
25
or (iii) any sale, lease, exchange, licensing, transfer or other disposition
pursuant to which a Third Party acquires control of more than 20% of the assets
(including, but not limited to, intellectual property assets) of the Company and
its Subsidiaries taken as a whole (determined by reference to the fair market
value of such assets), in a single transaction or series of related
transactions. The Company will immediately terminate all discussions with Third
Parties concerning any proposed Alternative Transaction, and will request that
such Third Parties promptly return any confidential information furnished by the
Company in connection with any proposed Alternative Transaction. The Company
will not waive any provision of any confidentiality, standstill or similar
agreement entered into with any third party regarding any proposed Alternative
Transaction, and prior to the Closing shall enforce all such agreements in
accordance with their terms. The Company will promptly communicate to Parent the
name of the person or entity submitting, and the terms and conditions of, any
proposal or written inquiry that it receives after the date hereof in respect of
any proposed Alternative Transaction or a reasonably detailed description of any
such information requested from it after the date hereof or of any such
negotiations or discussions being sought to be initiated or continued with the
Company after the date hereof in respect of a proposed Alternative Transaction;
provided, however, that this Agreement shall not prohibit the Board of Directors
of the Company from (i) prior to the Required Company Stockholder Vote,
furnishing nonpublic information to or entering into discussions or negotiations
with, any person or entity that makes an unsolicited Superior Proposal (as
defined below), if, and only to the extent that, (a) such action is so required
under applicable law in order for the Board of Directors to comply with its
applicable fiduciary duties to its stockholders imposed by law, (b) prior to
first furnishing nonpublic information to, or first entering into substantive
discussions and negotiations with, such person or entity after the date hereof,
the Company (I) (x) releases Parent from the 18-month standstill provisions of
the Confidentiality Agreement (as defined in Section 5.4(b)) with respect to any
proposal submitted by Parent to the Company's Board of Directors for a
transaction that, by the proposal's terms, would only be consummated with the
cooperation and approval of the Company's Board of Directors (which proposal
shall be submitted by Parent on a confidential basis unless the Company or such
person or entity proposing the Superior Proposal publicly discloses the Superior
Proposal), and (y) provides at least 24 hours' prior written notice to Parent to
the effect that it intends to furnish information to, or enter into discussions
or negotiations with, such person or entity, and naming and identifying the
person or entity making the Superior Proposal, and (II) receives from such
person or entity an executed confidentiality and standstill agreement with terms
no less favorable to the Company than the Confidentiality Agreement (as defined
in Section 5.4(b)) entered into with Parent as modified by clause (I)(x) of this
sentence, and (c) the Company concurrently provides Parent with all non-public
information to be provided to such person or entity that Parent has not
previously received from the Company, and the Company keeps Parent informed, on
a regular basis as frequently as reasonably requested by Parent, of the status,
terms and conditions and all other material information with respect to any such
discussions or negotiations; and (ii) to the extent applicable, complying with
Rule 14e-2 or 14d-9 promulgated under the 1934 Act with regard to a proposed
Alternative Transaction. Nothing in this section shall (x) permit the Company to
terminate this Agreement (except as specifically provided in Article 7 hereof),
or (y) permit the Company to enter into any agreement providing for an
Alternative Transaction (other than the confidentiality and standstill agreement
as provided, and in the circumstances and under the conditions set forth, above)
for as long as this Agreement remains in effect. For purposes of this Agreement,
a "Superior Proposal" shall mean a proposal for an Alternative Transaction that
the Board of Directors of the Company has reasonably and in good faith
determined (with the advice of its financial advisors and taking into account
all legal, financial and regulatory aspects of the likelihood of the
consummation of such Alternative Transaction, including, but not limited to, the
conditions to consummation and the consequences under such Alternative
26
Transaction proposal of any material adverse effects or changes in the Company)
to be more favorable to the Company's stockholders than the transactions
contemplated by this Agreement.
5.4 Access and Information.
(a) Except as required pursuant to any confidentiality
agreement or similar agreement or arrangement to which the Company or
any of its Subsidiaries is a party (in which case the Company shall use
all commercially reasonable efforts to provide acceptable alternative
arrangements, not in violation of such agreement or arrangement, for
disclosure to Parent or its advisors) or pursuant to applicable law,
the Company shall afford to Parent, and to Parent's accountants,
officers, directors, employees, counsel, and other representatives,
reasonable access during normal business hours upon reasonable prior
notice, from the date hereof through the Effective Time, to all of its
properties, books, contracts, commitments, and records, and, during
such period, the Company shall furnish promptly to Parent all
information concerning the Company's and its Subsidiaries' businesses,
prospects, properties, liabilities, results of operations, financial
condition, testing, clinicals, officers, employees, investigators,
distributors, customers, suppliers, and others having material dealings
with the Company as Parent may reasonably request and reasonable
opportunity to contact and obtain information from such officers,
employees, investigators, distributors, customers, suppliers, and
others having dealings with the Company as Parent may reasonably
request. During the period from the date hereof to the Effective Time,
the parties shall in good faith meet and correspond on a regular basis
for mutual consultation concerning the conduct of the Company's and the
Subsidiaries' businesses and, in connection therewith, Parent shall be
entitled, during normal business hours upon reasonable prior notice and
in a manner that does not unreasonably interfere with the Company's
business, to have employees or other representatives present at the
offices of the Company and its Subsidiaries to observe, and be kept
informed concerning, the Company's and the Subsidiaries' operations and
business planning.
(b) Parent shall hold in confidence all such nonpublic
information as required and in accordance with the confidentiality
agreement dated December 12, 1997, between Parent and the Company, as
supplemented by an agreement dated August 6, 1999 (as so supplemented,
the "Confidentiality Agreement").
5.5 Approval of Stockholders; Proxy Statement; Registration
Statement.
(a) The Company shall promptly take all action necessary in
accordance with the DGCL and the Company's Certificate of Incorporation
and Bylaws to cause a special meeting of the Company's stockholders
(the "Company Stockholders Meeting") to be duly called and held as soon
as reasonably practicable following the date upon which the
Registration Statement (as defined below) becomes effective for the
purpose of voting upon the Merger and the adoption and approval of this
Agreement and at such Meeting to submit this Agreement and the Merger
27
to a vote of the stockholders. The stockholder vote or consent required
for adoption and approval of this Agreement and the approval of the
Merger shall be no greater than that set forth in the DGCL and the
Company's Certificate of Incorporation as previously provided to
Parent. Accordingly, the Company represents and warrants that the
affirmative vote of the holders of record of a majority of the shares
of Company Common Stock outstanding on the record date for the Company
Stockholders Meeting is all that is necessary to obtain stockholder
adoption and approval of this Agreement and approval of the Merger. The
Company shall use reasonable best efforts to obtain the adoption and
approval by the Company's stockholders of this Agreement and the
approval by the Company's stockholders of the Merger, unless otherwise
required under applicable law in order for the Board of Directors to
comply with its applicable fiduciary duties to its stockholders imposed
by law. In accordance therewith, the Company shall, with the
cooperation of Parent, prepare and file, as soon as reasonably
practicable, a proxy statement/prospectus included as part of the
Registration Statement (such proxy statement/prospectus, together with
notice of meeting, form of proxy, and any letter or other materials to
the Company's stockholders included therein are referred to in this
Agreement as the "Proxy Statement/Prospectus"). Parent shall furnish to
the Company all information concerning Parent and its subsidiaries,
officers, directors and shareholders, and shall take such other action
and otherwise cooperate, as the Company may reasonably request in
connection with any such action. The Company shall use reasonable best
efforts to cause the definitive Proxy Statement/Prospectus to be mailed
to the stockholders of the Company, as soon as reasonably practicable
after the Registration Statement shall have become effective, with the
date of mailing as mutually determined by the Company and Parent. The
Proxy Statement/Prospectus shall include the recommendation of the
Company's Board of Directors in favor of the Merger, unless otherwise
required under applicable law in order for the Board of Directors to
comply with its applicable fiduciary duties to its stockholders imposed
by law. Unless and until this Agreement is validly terminated pursuant
to Article 7, nothing herein shall limit or eliminate in any way the
Company's obligation to call, give notice of, convene and hold the
Company Stockholders Meeting and at such meeting submit this Agreement
and the Merger to a vote of the Company's stockholders (and not
postpone or adjourn such meeting or the vote by the Company's
stockholders upon this Agreement and the Merger to another date without
Parent's approval, not to be unreasonably withheld if and only to the
extent such postponement or adjournment is required by law or by SEC or
Nasdaq regulation).
(b) Parent shall, with the cooperation of the Company, prepare
and file, as soon as reasonably practicable, a registration statement
under the 1933 Act registering the shares of Parent Common Stock to be
issued in the Merger (the "Registration Statement"), which Registration
Statement shall include the Proxy Statement/Prospectus. Parent will use
commercially reasonable efforts to have the Registration Statement
declared effective by the SEC as promptly thereafter as practicable.
Parent shall also take any action required to be taken under state blue
sky or securities laws in connection with the issuance of Parent Common
Stock pursuant to the Merger. The Company shall furnish to Parent all
information concerning the Company and its Subsidiaries and the holders
of its capital stock, and shall take such other action and otherwise
cooperate, as Parent may reasonably request in connection with any such
action.
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(c) Parent shall notify the Company promptly (i) of the
receipt of the comments of the SEC, (ii) of any request by the SEC for
amendments or supplements to the Registration Statement, (iii) of the
time when the Registration Statement has become effective or any
supplement or amendment has been filed, or the issuance of any stop
order and (iv) of the suspension of the qualification of the Parent
Common Stock issuable in connection with the Merger for offering or
sale in any jurisdiction and shall supply the Company with copies of
all correspondence with the SEC with respect to the Registration
Statement.
(d) If at any time prior to the Effective Time, any event or
circumstance relating to the Company, any Subsidiary, or the Company's
officers or directors should occur and be discovered by the Company
that is required to be described in an amendment or supplement to the
definitive Proxy Statement/Prospectus or the Registration Statement,
the Company shall promptly inform Parent. If at any time prior to the
Effective Time, any event or circumstance relating to Parent or any of
its subsidiaries or their respective officers or directors should occur
and be discovered by Parent that is required to be described in an
amendment or supplement to the definitive Proxy Statement/Prospectus or
the Registration Statement, Parent shall promptly inform the Company.
Whenever any event occurs that should be described in an amendment of,
or supplement to, the definitive Proxy Statement/Prospectus or the
Registration Statement, the Company or Parent, as the case may be,
shall, upon learning of such event, promptly notify the other and
consult and cooperate with the other in connection with the preparation
of a mutually acceptable amendment or supplement. The parties shall
promptly file such amendment or supplement with the SEC and mail such
amendment or supplement as soon as practicable after it is cleared by
the SEC. No amendment or supplement to the Proxy Statement/Prospectus
or the Registration Statement will be made by Parent or the Company
without the approval of the other party (such approval not to be
unreasonably withheld or delayed).
5.6 Consents. The Company will, at its cost and expense, use all
reasonable efforts to obtain all approvals and consents of all third parties
necessary on the part of the Company or its Subsidiaries to consummate the
transactions contemplated hereby. Parent agrees to cooperate with the Company in
connection with obtaining such approvals and consents. Parent will, at its cost
and expense, use all reasonable efforts to obtain all approvals and consents of
all third parties necessary on the part of Parent to consummate the transactions
contemplated hereby. The Company agrees to cooperate with Parent in connection
with obtaining such approvals and consents.
5.7 Affiliates' Letters.
(a) The Company has delivered to Parent a list of names and
addresses of those persons, in the Company's reasonable judgment after
consultation with outside legal counsel, who, as of the date hereof,
are affiliates within the meaning of Rule 145 of the rules and
regulations promulgated under the 1933 Act or otherwise applicable SEC
accounting releases with respect to pooling-of-interests accounting
29
treatment (each such person, an "Affiliate") of the Company. The
Company shall provide Parent such information and documents as Parent
shall reasonably request for purposes of reviewing such list and shall
promptly update such list to reflect any changes thereto. The Company
has delivered or caused to be delivered, or will, promptly after the
execution hereof, deliver or cause to be delivered, to Parent an
affiliate's letter in the form attached hereto as Exhibit C, executed
by each of the Affiliates of the Company identified in the foregoing
list, who were available, and shall use reasonable best efforts to
deliver or cause to be delivered to Parent as soon as practicable after
the date hereof such an affiliate's letter executed by any Affiliate
who was not available to sign and deliver such letter on or prior to
the date hereof and by any additional persons who, to the knowledge of
the Company, become Affiliates after the date hereof. Parent shall be
entitled to place legends as specified in such affiliates' letters on
the certificates evidencing any of the Parent Common Stock received by
such Affiliates pursuant to the terms of this Agreement, and to issue
appropriate stop transfer instructions to the transfer agent for the
Parent Common Stock, consistent with the terms of such letters.
(b) For so long as resales of shares of Parent Common Stock
issued pursuant to the Merger are subject to the resale restrictions
set forth in Rule 145 under the 1933 Act, Parent will use commercially
reasonable efforts to comply with Rule 144(c)(1) under the 0000 Xxx.
5.8 Expenses. Whether or not the Merger is consummated, all costs and
expenses incurred in connection with this Agreement, the transactions
contemplated hereby, the Proxy Statement/Prospectus, and the Registration
Statement will be paid by the party incurring such costs and expenses, except
that the Company and Parent will share equally the cost of printing and filing
with the SEC the Proxy Statement/Prospectus and the Registration Statement (the
"Shared Expenses").
5.9 Further Actions. Subject to the terms and conditions herein
provided and without being required to waive any conditions herein (whether
absolute, discretionary, or otherwise), each of the parties hereto agrees to use
its reasonable best efforts to take, or cause to be taken, all action, and to
do, or cause to be done, all things necessary, proper, or advisable to
consummate and make effective the transactions contemplated by this Agreement.
In case at any time after the Effective Time any further action is necessary or
desirable to carry out the purposes of this Agreement, the proper officers and
directors of each party to this Agreement shall take all such necessary action.
5.10 Regulatory Approvals.
(a) The Company and Parent each agree to use commercially
reasonable efforts to take, or cause to be taken, all appropriate
action, and do, or cause to be done, all things as may be necessary
under federal or state securities laws or the HSR Act or Foreign Merger
Laws applicable to or necessary for, and will file as soon as
reasonably practicable and, if appropriate, use commercially reasonable
efforts to have declared effective or approved all documents and
notifications with the SEC and other governmental or regulatory bodies
(including, without limitation, the FDA and equivalent foreign
regulatory bodies, and other foreign regulatory bodies that administer
Foreign Merger Laws, and any foreign labor councils or bodies as may be
required) that they deem necessary or appropriate for, the consummation
30
of the Merger or any of the other transactions contemplated hereby, and
each party shall give the other information reasonably requested by
such other party pertaining to it and its subsidiaries and affiliates
to enable such other party to take such actions.
(b) Although the parties do not anticipate any legislative,
administrative or judicial objection to the consummation of the Merger
or any of the transactions contemplated by this Agreement, each of the
Company, Parent and Merger Subsidiary agrees to use commercially
reasonable efforts vigorously to contest and resist any action,
including legislative, administrative or judicial action, and to have
vacated, lifted, reversed or overturned any decree, judgment,
injunction or other order (whether temporary, preliminary or permanent)
(an "Order") that is in effect and that restricts, prevents or
prohibits the consummation of the Merger or any of the other
transactions contemplated by this Agreement, including, without
limitation, by vigorously pursuing available avenues of administrative
and judicial appeal. Each of the Company, Parent and Merger Subsidiary
also agrees to use commercially reasonable efforts to take any and all
actions necessary to avoid or eliminate each and every impediment under
any antitrust law that may be asserted by any governmental antitrust
authority or any other party so as to enable the parties to close by
the date specified in Section 7.1(b) the transactions contemplated
hereby. Notwithstanding the foregoing provisions of this Section 5.10
or anything in this Agreement to the contrary, nothing shall require
Parent or Merger Subsidiary to make or agree to make, or to cause or
permit the Company or any Subsidiary to make or agree to make, any
divestiture of any portion of any business or assets of Parent, Merger
Subsidiary, the Company, or any of their affiliates in order to obtain
any waiver, consent or approval, and neither Parent nor Merger
Subsidiary shall be required to hold separate or otherwise take or
commit to take any action that limits its freedom of action with
respect to, or its ability to retain, as of and after the Closing any
businesses or assets of the Company, Parent or any of their respective
affiliates.
5.11 Certain Notifications. The Company shall promptly notify Parent in
writing of the occurrence of any event that will or could reasonably be expected
to result in the failure by the Company or its affiliates to satisfy any of the
conditions specified in Section 6.1 or 6.2. Parent shall promptly notify the
Company in writing of the occurrence of any event that will or could reasonably
be expected to result in the failure by Parent or its affiliates to satisfy any
of the conditions specified in Section 6.1 or 6.3.
5.12 Voting of Shares. To induce Parent to execute this Agreement,
certain executive officers and directors of the Company included in the list of
"Affiliates" referenced in Section 5.7 have executed and delivered as of the
date hereof Agreements to Facilitate Merger in the form attached hereto as
Exhibit D (the "Agreement to Facilitate Merger"), pursuant to which each such
person has agreed to vote his or her shares of Company Common Stock in favor of
the Merger at the Company Stockholders Meeting. The Company will use reasonable
best efforts to have all other such Affiliates execute and deliver to Parent
Agreements to Facilitate Merger as soon as practicable after the date hereof.
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5.13 Stock Option Agreement. To induce Parent to execute this
Agreement, the Company has executed and delivered to Parent as of the date
hereof a Stock Option Agreement in the form attached hereto as Exhibit E (the
"Stock Option Agreement"), pursuant to which the Company has granted to Parent
an option to acquire from the Company such number of shares of Company Common
Stock as equals 19.9% of the aggregate number of outstanding shares of Company
Common Stock at an exercise price equal to $60.00 per share. Such option shall
become exercisable only in the events described in the Stock Option Agreement.
5.14 NYSE Listing Application. Parent shall promptly prepare and submit
to the NYSE a listing application for the Parent Common Stock to be issued in
the Merger pursuant to Article 1 of this Agreement and pursuant to the Company
Options assumed by Parent, and shall use its reasonable best efforts to obtain,
prior to the Effective Time, approval for the listing of such Parent Common
Stock, subject to official notice to the NYSE of issuance. The Company shall
cooperate with Parent in such listing application.
5.15 Indemnification.
(a) The Certificate of Incorporation and the bylaws of the
Surviving Corporation shall contain the provisions with respect to
indemnification, payment of fees and expenses and exculpation from
liability set forth in the Company's Certificate of Incorporation and
bylaws on the date of this Agreement, which provisions shall not be
amended, repealed or otherwise modified for a period of six years from
the Effective Time in any manner that would adversely affect the rights
thereunder of individuals who on or at any time prior to the Effective
Time were directors, officers, employees or agents of the Company,
unless such modification is required by law. Parent shall guarantee the
obligations of the Surviving Corporation with respect to the
indemnification and payment of fees and expenses provisions contained
in the Surviving Corporation's Certificate of Incorporation and bylaws
with respect to acts occurring at or before the Effective Time
(including the transactions contemplated by this Agreement).
(b) For a period of six years after the Effective Time, Parent
shall cause to be maintained in effect the Company's current directors'
and officers' liability insurance policy with respect to claims arising
from facts or events that occurred at or prior to the Effective Time;
provided, however, that (i) Parent may substitute therefor coverage
under Parent's directors' and officers' liability insurance or coverage
under other policies providing coverage on terms and conditions that
are no less advantageous to such persons than the Company's current
insurance, and (ii) Parent may satisfy its obligations hereunder by
extending the discovery or reporting period under such policy for six
years from the Effective Time to maintain in effect directors' and
officers' liability insurance covering pre-acquisition acts (including
acts in connection with this Agreement and the transactions
contemplated hereby) for those persons who are currently covered by the
Company's directors' and officers' liability insurance policy (a copy
of which has been heretofore delivered or made available to Parent or
its advisors ) (the "Indemnified Parties") on terms no less favorable
than the terms of such current insurance coverage; provided, however,
that in no event shall Parent be required to expend for any such
coverage an amount per year in excess of 200% of the annual premium
currently paid by the Company for such insurance; and provided further
32
that if the cost per year of such coverage exceeds such 200% amount,
Parent shall be obligated to obtain such coverage as is available for a
cost per year not exceeding such amount. The Company represents that
Section 5.15(b) of the Company Disclosure Schedule sets forth the
annual premium currently paid by the Company for such insurance.
(c) In the event Parent, the Surviving Corporation or any of
their successors or assigns (i) consolidates with or merges into any
other person and shall not be the continuing or surviving corporation
or entity of such consolidation or merger or (ii) transfers all or
substantially all of its properties and assets to any person, then and
in each such case, proper provisions shall be made so that the
successors and assigns of Parent or the Surviving Corporation, as the
case may be, shall assume the obligations set forth in this Section
5.15.
(d) This Section 5.15 shall survive the consummation of the
Merger at the Effective Time, is intended to benefit the Company,
Parent, the Surviving Corporation and the Indemnified Parties, and all
other individuals who on or at any time prior to the Effective Time
were directors, officers, employees or agents of the Company or any
Subsidiary, and shall be binding on all successors and assigns of
Parent and the Surviving Corporation.
5.16 Letters of the Company's and Parent's Accountants.
(a) The Company shall cooperate with Parent and use its
reasonable efforts to cause to be delivered to Parent and the Company
the following letters from Ernst & Young LLP addressed to the Company:
(i) a letter dated the date of this Agreement, stating that they concur
with the Company's management's conclusions as to the appropriateness
of pooling of interest accounting for the Merger under APB 16 and
applicable SEC rules and regulations if closed and consummated in
accordance with this Agreement; and (ii) a letter dated as of the
Closing Date stating that they concur with the Company's management's
conclusions as to the appropriateness of pooling of interest accounting
for the Merger under APB 16 and applicable SEC rules and regulations if
closed and consummated in accordance with this Agreement.
(b) The Company shall cooperate with Parent and Parent shall
use its reasonable efforts to cause to be delivered to the Company and
Parent the following letters from Pricewaterhouse Coopers LLP addressed
to Parent: (i) a letter dated the date of this Agreement, stating that
they concur with Parent's management's conclusions as to the
appropriateness of pooling of interest accounting for the Merger under
APB 16 and applicable SEC rules and regulations if closed and
consummated in accordance with this Agreement; and (ii) a letter dated
as of the Closing Date stating that they concur with Parent's
management's conclusions as to the appropriateness of pooling of
interest accounting for the Merger under APB 16 and applicable SEC
rules and regulations if closed and consummated in accordance with this
Agreement.
33
5.17 Subsidiary Shares. At or prior to the Closing, the Company shall
use its reasonable efforts to cause all issued and outstanding Subsidiary shares
(other than any interests in joint ventures or similar arrangements) owned by
any person other than the Company or any of its Subsidiaries to be transferred
for no or nominal consideration to such person or persons designated by Parent.
5.18 Benefit Plans and Employee Matters.
(a) From and after the Effective Time, Parent shall to the
extent practicable cause the Surviving Corporation to provide employee
benefits and programs to the Company's employees that, in the
aggregate, are substantially comparable or more favorable, as a whole,
than those in existence as of the date hereof and disclosed in writing
to Parent prior to the date hereof; provided that stock-based
compensation shall be comparable to that offered by Parent and its
subsidiaries generally. To the extent Parent satisfies its obligations
under this Section by maintaining Company benefit plans, Parent shall
not be required to include employees of the Company in Parent's benefit
plans. From and after the Effective Time, Parent shall honor or cause
the Surviving Corporation to honor, in accordance with their terms, all
employment and severance agreements and all severance, incentive and
bonus plans as in effect immediately prior to the Closing Date that are
applicable to any current or former employees or directors of the
Company or any of its Subsidiaries and that were disclosed to Parent
prior to the date hereof.
(b) To the extent that service is relevant for purposes of
eligibility, level of participation, or vesting under any employee
benefit plan, program or arrangement established or maintained by
Parent, the Company or any of their respective subsidiaries, employees
of the Company and its Subsidiaries shall be credited for service
accrued or deemed accrued prior to the Effective Time with the Company
or such Subsidiary, as the case may be. Except as required by law or
the applicable plan with respect to foreign pension benefit plans,
under no circumstances shall employees receive credit for service
accrued or deemed accrued prior to the Effective Time with the Company
or such Subsidiary, as the case may be, for benefit accruals under any
employee pension benefit plan (as defined by Section 3(2) of ERISA) or
any retiree health plan.
5.19 Obligations of Merger Subsidiary. Parent shall take all action
necessary to cause Merger Subsidiary to perform its obligations under this
Agreement and to consummate the Merger on the terms and subject to the
conditions set forth in this Agreement.
5.20 Plan of Reorganization. This Agreement is intended to constitute a
"plan of reorganization" within the meaning of Section 1.368-2(g) of the income
tax regulations promulgated under the Code. From and after the date of this
Agreement, each party hereto shall use all reasonable efforts to cause the
Merger to qualify, and shall not, without the prior written consent of the other
parties hereto, knowingly take any actions or cause any actions to be taken that
could prevent the Merger from qualifying as a reorganization under the
provisions of Sections 368(a)(2)(E) and 368(a)(1)(B) of the Code.
34
5.21 Pooling. From and after the date of this Agreement and until the
Effective Time, neither Parent nor the Company, nor any of their respective
subsidiaries or other affiliates, shall knowingly take any action, or knowingly
fail to take any action, that is reasonably likely to jeopardize the treatment
of the Merger as a "pooling of interests" for accounting purposes. Between the
date of this Agreement and the Effective Time, Parent and the Company each shall
take all reasonable actions necessary to cause the characterization of the
Merger as a pooling of interests for accounting purposes if such a
characterization were jeopardized by action taken by Parent or the Company,
respectively, prior to the Effective Time. Following the Effective Time, Parent
shall not knowingly take any action, or fail to take any action, that would
jeopardize the characterization of the Merger as a "pooling of interests" for
accounting purposes.
ARTICLE 6
CLOSING CONDITIONS
6.1 Conditions to Obligations of Parent, Merger Subsidiary, and the
Company. The respective obligations of each party to consummate the Merger shall
be subject to the fulfillment at or prior to the Closing of the following
conditions, any or all of which may be waived, in whole or in part, to the
extent permitted by applicable law:
(a) No Injunction. None of Parent, Merger Subsidiary, or the
Company shall be subject to any final order, decree, or injunction of a
court of competent jurisdiction within the United States that is then
in effect and (i) has the effect of making the Merger illegal or
otherwise prohibiting the consummation of the Merger, or (ii) would
impose any material limitation on the ability of Parent to effectively
exercise full rights of ownership of the Company or the assets or
business of the Company.
(b) Stockholder Approval. The approval of the stockholders of
the Company referred to in Section 5.5 hereof shall have been obtained,
in accordance with the DGCL and the Company's Certificate of
Incorporation and Bylaws.
(c) Registration Statement. The Registration Statement (as
amended or supplemented) shall have become effective under the 1933 Act
and shall not be subject to any "stop order," and no action, suit,
proceeding, or investigation by the SEC to suspend the effectiveness or
qualification thereof shall have been initiated and be continuing.
(d) NYSE Listing. The shares of Parent Common Stock to be
delivered pursuant to the Merger shall have been duly authorized for
listing on the NYSE, subject to official notice of issuance.
(e) Waiting Periods. The waiting periods (and any extension
thereof) applicable to the consummation of the Merger under the HSR Act
and any Foreign Merger Laws shall have expired or been terminated.
6.2 Conditions to Obligations of Parent and Merger Subsidiary. The
respective obligations of Parent and Merger Subsidiary to consummate the Merger
35
shall be subject to the fulfillment at or prior to the Closing of the following
additional conditions, any or all of which may be waived by Parent, in whole or
in part, to the extent permitted by applicable law:
(a) Representations and Warranties True. The representations
and warranties of the Company contained in this Agreement, without
regard to any qualification or reference to "Company Material Adverse
Effect," shall be true and correct on the Closing Date as though such
representations and warranties were made on such date, except that
those representations and warranties that address matters only as of
the date hereof or another particular date shall remain true and
correct as of such date, and except in any case for any inaccuracies of
representations and warranties that, individually or in the aggregate,
have not had, or would not reasonably be expected to have, a Company
Material Adverse Effect; provided, however, notwithstanding the
foregoing, this Section 6.2(a) shall not be considered fulfilled or
satisfied if the representation and warranty set forth in the last
sentence of Section 3.3 is incorrect by more than 1,000 shares as of
the Closing Date. Parent shall have received a certificate to the
foregoing effect signed by the Chief Executive Officer of the Company
or other authorized Officer of the Company.
(b) Performance. The Company shall have performed and complied
in all material respects with all material covenants required by this
Agreement to be performed or complied with by it on or prior to the
Closing, and Parent shall have received a certificate to such effect
signed by the Chief Executive Officer of the Company.
(c) Affiliates' Letters. Parent shall have received a letter
from each of the Affiliates pursuant to Section 5.7 hereof.
(d) Pooling Opinion. Parent shall have received each of the
letters described in Section 5.16.
(e) Continued Employment of Key Executives. Neither the chief
executive officer nor the chief operating officer of the Company shall
have advised Parent or the Company that he intends to terminate his
employment with the Company following the Merger for any reason other
than death or disability.
6.3 Conditions to Obligations of the Company. The obligation of the
Company to consummate the Merger shall be subject to the fulfillment at or prior
to the Closing of the following additional conditions, any or all of which may
be waived by the Company, in whole or in part, to the extent permitted by
applicable law:
(a) Representations and Warranties True. The representations
and warranties of Parent contained in this Agreement, without regard to
any qualification or reference to "Parent Material Adverse Effect,"
shall be true and correct on the Closing Date as though such
representations and warranties were made on such date, except that
those representations and warranties that address matters only as of a
particular date shall remain true and correct as of such date, and
except in any case for any inaccuracies of representations and
warranties that, individually or in the aggregate, have not had, or
would not reasonably be expected to have, a Parent Material Adverse
36
Effect. The Company shall have received a certificate to the foregoing
effect signed by the Chief Executive Officer or other authorized
officer of Parent.
(b) Performance. Parent and Merger Subsidiary shall have
performed and complied in all material respects with all material
covenants required by this Agreement to be performed or complied with
by them on or prior to the Closing, and the Company shall have received
a certificate to such effect signed by the Chief Executive Officer or
other authorized officer of Parent.
(c) Tax Opinion. The Company shall have received an opinion of
Xxxxxxx Xxxx & Xxxxxxxxx, counsel to the Company, addressed to the
Company's stockholders, based upon representations of Parent, Merger
Subsidiary and the Company and normal assumptions, and dated on or
about the date that is two business days prior to the date the Proxy
Statement/Prospectus is first mailed to the Company's stockholders,
which opinion shall not have been withdrawn or modified in any material
respect prior to the Effective Time, to the effect that, subject to
customary conditions and representations, the Merger will be treated
for federal income tax purposes as a reorganization within the meaning
of Section 368(a) of the Code, and that each of Parent, Merger
Subsidiary, and the Company will be considered a party to such
reorganization. Parent, Merger Subsidiary, and the Company hereby agree
to provide to such counsel certificates acceptable to such counsel
setting forth the customary representations which may be relied upon by
such counsel in rendering such opinion.
(d) Pooling Opinion. The Company shall have received each of
the letters described in Section 5.16.
ARTICLE 7
TERMINATION AND ABANDONMENT
7.1 Termination. This Agreement may be terminated at any time prior to
the Effective Time, whether before or after approval by the stockholders of the
Company, only:
(a) by mutual written consent duly authorized by the Board of
Directors of Parent and the Board of Directors of the Company;
(b) by either Parent or the Company if the Merger shall not
have been consummated on or before February 26, 2000; provided,
however, that the terminating party shall not have breached in any
material respect its obligations under this Agreement in any manner
that shall have been the proximate cause of, or resulted in, the
failure to consummate the Merger by such date; and provided further,
however, that, if a request for additional information is received from
the U.S. Federal Trade Commission ("FTC") or Department of Justice
("DOJ") pursuant to the HSR Act or additional information is requested
by a governmental authority (a "Foreign Authority") pursuant to Foreign
Merger Laws, such date shall be extended for an additional 45 days;
37
(c) by either Parent or the Company if a court of competent
jurisdiction or an administrative, governmental, or regulatory
authority has issued a final nonappealable order, decree, or ruling, or
taken any other action, having the effect of permanently restraining,
enjoining, or otherwise prohibiting the Merger;
(d) by either Parent or the Company if, at the Company
Stockholders Meeting, the requisite vote of the stockholders of the
Company for approval and adoption of this Agreement and the Merger is
not obtained, except that the right to terminate this Agreement under
this Section 7.1(d) will not be available to any party whose failure to
perform any material obligation under this Agreement has been the
proximate cause of, or resulted in, the failure to obtain the requisite
vote of the stockholders of the Company;
(e) by Parent if either (i) the Company has breached its
obligations under Section 5.3 in any material respect, (ii) the Board
of Directors of the Company has recommended, approved, or authorized
the Company's acceptance or execution of a definitive agreement
providing for, an Alternative Transaction, as defined in Section 5.3,
(iii) the Board of Directors of the Company has modified in a manner
materially adverse to Parent or withdrawn its recommendation of this
Agreement, or (iv) a tender offer or exchange offer for any outstanding
shares of Company Common Stock is commenced, and the Board of Directors
of the Company either (A) recommends in favor of acceptance of such
tender offer or exchange offer by its stockholders, or (B) takes no
position with respect to the acceptance of such tender offer or
exchange offer by its stockholders;
(f) by the Company prior to the Required Company Stockholder
Vote if (i) it is not in material breach of its obligations under this
Agreement and has complied with, and continues to comply with, all
requirements and procedures of Section 5.3 in all material respects,
(ii) the Board of Directors of the Company has complied with, and
continues to comply with, all requirements and procedures of Section
5.3 in all material respects and has authorized, subject to complying
with the terms of this Agreement, the Company to enter into a binding
written agreement concerning a transaction that constitutes a Superior
Proposal and the Company notifies Parent in writing that it intends to
enter into such agreement, attaching the most current version of such
agreement to such notice, (iii) Parent does not make, within five
business days after receipt of the Company's written notice of its
intention to enter into a binding agreement for a Superior Proposal,
any offer that the Board of Directors of the Company reasonably and in
good faith determines, after consultation with its financial and legal
advisors, is at least as favorable to the stockholders of the Company
as the Superior Proposal and during such five business-day period the
Company reasonably considers and discusses in good faith all proposals
submitted by Parent and, without limiting the foregoing, meets with,
and causes its financial advisors and legal advisors to meet with,
Parent and its advisors from time to time as requested by Parent to
reasonably consider and discuss in good faith Parent's proposals, and
(iv) promptly (in no event more than two business days) after the
Company's termination pursuant to this Section 7.1(f), the Company pays
to Parent the fee required by Section 7.2 to be paid to Parent in the
manner therein provided. The Company agrees (x) that it will not enter
into a binding agreement referred to in clause (ii) above until at
least the sixth business day after Parent has received the notice to
38
Parent required by clause (ii) above, and (y) to notify Parent promptly
if its intention to enter into a binding agreement referred to in its
notice to Parent shall change at any time after giving such notice;
(g) by Parent if (i) Parent is not in material breach of its
obligations under this Agreement and (ii) there has been a material
breach by the Company of any of its representations, warranties, or
obligations under this Agreement such that the conditions in Section
6.2 will not be satisfied ("Terminating Company Breach"); provided,
however, that, if such Terminating Company Breach is curable by the
Company through the exercise of reasonable best efforts and such cure
is reasonably likely to be completed prior to the applicable date
specified in Section 7.1(b), then for so long as the Company continues
to exercise reasonable best efforts, Parent may not terminate this
Agreement under this Section 7.1(g); or
(h) by the Company if (i) the Company is not in material
breach of its obligations under this Agreement and (ii) there has been
a material breach by Parent of any of its representations, warranties,
or obligations under this Agreement such that the conditions in Section
6.3 will not be satisfied ("Terminating Parent Breach"); provided,
however, that, if such Terminating Parent Breach is curable by Parent
through the exercise of reasonable best efforts and such cure is
reasonably likely to be completed prior to the applicable date
specified in Section 7.1(b), then for so long as Parent continues to
exercise reasonable best efforts, the Company may not terminate this
Agreement under this Section 7.1(h).
7.2 Effect of Termination.
(a) In recognition of the time, efforts, and expenses expended
and incurred by Parent with respect to the Company and the opportunity
that the acquisition of the Company presents to Parent, if:
(i) this Agreement is terminated by Parent
pursuant to Section 7.1(e)(ii), (e)(iii) or (e)(iv)(A); or
(ii) this Agreement is terminated by the Company
pursuant to Section 7.1(f); or
(iii) (A) this Agreement is terminated by Parent
or the Company pursuant to Section 7.1(d) due to the failure
of the Company's stockholders to approve the Merger or
pursuant to Section 7.1(b) due to the expiration of the date
specified therein (provided that prior to such termination
pursuant to Section 7.1(b) the Company's stockholders have not
approved the Merger), (B) at any time prior to such
termination a proposal for an "Alternative Control
Transaction" (as defined below) shall have been publicly
announced, and (C) within 12 months of the date of such
termination, the Company shall have entered
39
into an agreement providing for an Alternative Control
Transaction. For purposes of this Agreement, "Alternative
Control Transaction" shall mean any of the following involving
the Company or any material Subsidiary: (i) any tender offer,
exchange offer, merger, consolidation, share exchange,
business combination or similar transaction involving a
majority of the outstanding capital stock of the Company or
any material Subsidiary; (ii) any transaction or series of
related transactions pursuant to which any person or entity
(or its shareholders), other than Parent, or Merger Subsidiary
or any of their affiliates (a "Third Party") acquires shares
(or securities exercisable for or convertible into shares)
representing more than 50% of the outstanding shares of any
class of capital stock of the Company or any material
Subsidiary; or (iii) any sale, lease, exchange, licensing,
transfer or other disposition pursuant to which a Third Party
acquires control of more than 50% of the assets (including,
but not limited to, intellectual property assets) of the
Company and its Subsidiaries taken as a whole (determined by
reference to the fair market value of such assets), in a
single transaction or series of related transactions; or
(iv) this Agreement is terminated by Parent
pursuant to Section 7.1(e)(iv)(B) and, within 12 months of
the date of such termination, an Alternative Control
Transaction shall have occurred or the Company shall have
entered into an agreement providing for an Alternative
Control Transaction; or
(v) this Agreement is terminated by Parent
pursuant to Section 7.1(e)(i) due to a material breach by
the Company of the first sentence of Section 5.3;
then, in any such event, the Company will pay to Parent, (1) promptly
(in no event more than two business days) after the termination date in
the event of termination pursuant to Section 7.1(f), and (2) within
five business days after demand by Parent in the case of termination
pursuant to Section 7.1(e)(i), (e)(ii), (e)(iii), or (e)(iv)(A), and
(3) within two business days after consummation of an Alternative
Control Transaction, in the case of the events specified in clause
(iii) or (iv) above (in each case by wire transfer of immediately
available funds to an account designated by Parent for such purpose), a
fee equal to $24,100,000; provided in the event the fee is payable
pursuant to one or more of clauses (i), (ii), (iii), (iv) or (v) above,
the fee shall be due and payable pursuant to the clause calling for
payment at the earliest time.
(b) The Company acknowledges that the agreements contained in
this Section 7.2 are an integral part of the transactions contemplated
by this Agreement and are not a penalty, and that, without these
agreements, Parent would not enter into this Agreement. If the Company
fails to pay promptly the fee due pursuant to this Section 7.2, the
Company shall also pay to Parent Parent's costs and expenses (including
legal fees and expenses) in connection with any action, including the
filing of any lawsuit or other legal action, taken to collect payment,
together with interest on the amount of the unpaid fee under this
section, accruing from its due date, at an interest rate per annum
equal to two percentage points in excess of the prime commercial
lending rate quoted by Norwest Bank Minnesota, N.A.; provided, however,
that Parent shall pay to the Company the Company's costs and expenses
(including legal fees and expenses) incurred in connection with any
40
such legal action if Parent's claims against the Company in such legal
action do not prevail. Any change in the interest rate hereunder
resulting from a change in such prime rate shall be effective at the
beginning of the date of such change in such prime rate.
(c) Parent agrees that the payments provided for in Section
7.2(a) shall be the sole and exclusive remedies of Parent upon
termination of this Agreement pursuant to Section 7.1(d), (e) and (f),
as the case may be, and such remedies shall be limited to the sum
stipulated in such Section 7.2(a), regardless of the circumstances
giving rise to such termination; provided, however, that nothing herein
shall relieve any party from liability for the willful breach of any of
its representations, warranties, covenants or agreements set forth in
this Agreement. In no event shall the Company be required to pay to
Parent more than one fee pursuant to Section 7.2(a). In no event shall
the sum of (i) the termination fee paid pursuant to Section 7.2(a),
(ii) the Cancellation Amount (as defined in the Stock Option Agreement)
paid pursuant to the Stock Option Agreement, and (iii) the aggregate
Option Share Profit (as defined in the Stock Option Agreement) not
remitted to the Company pursuant to Section 2(c) of the Stock Option
Agreement exceed $30,100,000. In addition, the fee payable by the
Company pursuant to Section 7.2(a) shall be reduced (but not below
zero) by any Cancellation Amount paid pursuant to the Stock Option
Agreement and any Option Share Profit not remitted to the Company
pursuant to Section 2(c) of the Stock Option Agreement.
(d) Except as provided in the next sentence of this paragraph,
in the event of the termination of this Agreement pursuant to any
paragraph of Section 7.1, the obligations of the parties to consummate
the Merger will expire, and none of the parties will have any further
obligations under this Agreement except pursuant to Sections 5.4(b),
5.8, 7.2(a), 7.2(b) and 7.2(c) and Article 8. Nothing herein shall
relieve any party from liability for the willful breach of any of its
representations, warranties, covenants or agreements set forth in this
Agreement.
ARTICLE 8
MISCELLANEOUS
8.1 Amendment and Modification. Subject to applicable law, this
Agreement may be amended, modified, or supplemented only by written agreement of
Parent, Merger Subsidiary, and the Company at any time prior to the Effective
Time with respect to any of the terms contained herein; provided, however, that,
after the approval of this Agreement by the stockholders of the Company, no
amendment may be made that would reduce the amount or change the type of
consideration into which each share of Company Common Stock shall be converted
upon consummation of the Merger or which would otherwise require stockholder
approval under applicable law unless such stockholder approval shall have been
obtained. This Agreement may not be amended except by an instrument in writing
signed on behalf of each of the parties hereto.
41
8.2 Waiver of Compliance; Consents. Any failure of Parent or Merger
Subsidiary on the one hand, or the Company on the other hand, to comply with any
obligation, covenant, agreement, or condition herein may be waived by the
Company or Parent, respectively, only by a written instrument signed by an
officer of the party granting such waiver, but such waiver or failure to insist
upon strict compliance with such obligation, covenant, agreement, or condition
shall not operate as a waiver of, or estoppel with respect to, any subsequent or
other failure. Whenever this Agreement requires or permits consent by or on
behalf of any party hereto, such consent shall be given in writing. Merger
Subsidiary agrees that any consent or waiver of compliance given by Parent
hereunder shall be conclusively binding upon Merger Subsidiary, whether or not
given expressly on its behalf.
8.3 Investigation; Survival of Representations and Warranties. The
respective representations and warranties of Parent and the Company contained
herein or in any certificates or other documents delivered prior to or at the
Closing shall not be deemed waived or otherwise affected by any investigation
made by any party hereto. The representations, warranties and agreements in this
Agreement and in any certificate delivered pursuant hereto shall terminate at
the Effective Time, except that the agreements set forth in Articles I and II
and Sections 5.7(b), 5.8, 5.9, 5.15, 5.18, 5.19, 5.20, 5.21 and this Article
VIII shall survive the Effective Time.
8.4 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given when delivered personally by commercial
courier service or otherwise, or by telecopier, or three days after such notice
is mailed by registered or certified mail (return receipt requested) to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
(a) if to Parent or Merger Subsidiary, to it at:
Medtronic, Inc.
0000 Xxxxxxx Xxxxxx, X.X.
Xxxxxxxxxxx, Xxxxxxxxx 00000
with separate copies thereof addressed to
Attention: General Counsel
FAX: (000) 000-0000
and
Attention: Vice President and Chief Development Officer
FAX: (000) 000-0000
42
(b) If to the Company, to it at:
Xomed Surgical Products, Inc.
0000 Xxxxxxxxxx Xxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
FAX: (000) 000-0000
Attention: Xxxxx X. Xxxxx, Esq.
with a copy to:
Xxxxxxx Xxxx & Xxxxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
FAX: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
8.5 Assignment. This Agreement and all of the provisions hereof shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests, or obligations hereunder shall be assigned by any of
the parties hereto without the prior written consent of the other parties.
Except for the provisions of Article II and Section 5.15 (the "Third Party
Provisions"), this Agreement is not intended to confer upon any other person,
except the parties hereto, any rights or remedies hereunder, and no third person
shall be a third party beneficiary of this Agreement. The Third Party Provisions
may be enforced by the beneficiaries thereof.
8.6 Governing Law. This Agreement shall be governed by the laws of the
State of Delaware (regardless of the laws that might otherwise govern under
applicable Delaware principles of conflicts of law).
8.7 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
8.8 Knowledge. As used in this Agreement or the instruments,
certificates or other documents required hereunder, the term "knowledge" of a
party hereto shall mean actual knowledge of the directors or executive officers
of such party.
8.9 Interpretation. The Table of Contents, article and section headings
contained in this Agreement are inserted for reference purposes only and shall
not affect the meaning or interpretation of this Agreement. This Agreement shall
be construed without regard to any presumption or other rule requiring the
resolution of any ambiguity regarding the interpretation or construction hereof
against the party causing this Agreement to be drafted.
8.10 Publicity. Upon execution of this Agreement by Parent, Merger
Subsidiary, and the Company, the parties shall jointly issue a press release, as
agreed upon by them. The parties intend that all future statements or
43
communications to the public or press regarding this Agreement or the Merger
will be mutually agreed upon by them, except as provided in the following
sentence. Neither party shall, without such mutual agreement or the prior
consent of the other, file any documents or issue any statement or communication
to the public or to the press regarding this Agreement, or any of the terms,
conditions, or other matters with respect to this Agreement, except as required
by law or the rules of the NYSE or Nasdaq and then only (a) upon the advice of
such party's legal counsel; (b) to the extent required by law or the rules of
the NYSE or Nasdaq; and (c) following prior notice to, and consultation with,
the other party (which notice shall include a copy of the proposed statement or
communication to be issued to the press or public). The foregoing shall not
restrict Parent's or the Company's communications with their employees or
customers in the ordinary course of business.
8.11 Entire Agreement. This Agreement, including the exhibits and
schedules hereto and the Confidentiality Agreement referred to herein, embodies
the entire agreement and understanding of the parties hereto in respect of the
subject matter contained herein. This Agreement and the Confidentiality
Agreement supersede all prior agreements and the understandings between the
parties with respect to such subject matter.
8.12 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of Law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated by this Agreement is not affected in any manner
materially adverse to any party. 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 in a mutually acceptable
manner in order that the transactions contemplated by this Agreement be
consummated as originally contemplated to the fullest extent possible.
8.13 Specific Performance. The parties hereto agree that irreparable
damage would occur in the event any provision of this Agreement was not
performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or in equity.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement and
Plan of Merger as of the date first above written.
MEDTRONIC, INC.
By:_________________________________________
Xxxxxxx X. Xxxxxxx, Vice President and
Chief Development Officer
MXS MERGER CORP.
By:__________________________________________
Xxxxxxx X. Xxxxxxx, Vice President
XOMED SURGICAL PRODUCTS, INC.
By:__________________________________________
Its:______________________________________
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