AGREEMENT AND PLAN OF MERGER dated as of January 21, 2008 among VENTANA MEDICAL SYSTEMS, INC., ROCHE HOLDINGS, INC. and ROCKET ACQUISITION CORPORATION
Exhibit
(d)(1)
AGREEMENT
AND PLAN OF MERGER
dated
as
of
January
21, 2008
among
VENTANA
MEDICAL SYSTEMS, INC.,
ROCHE
HOLDINGS, INC.
and
ROCKET
ACQUISITION CORPORATION
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TABLE
OF CONTENTS
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Page
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ARTICLE
1
THE
OFFER
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Section
1.01.
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The
Offer
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1
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Section
1.02.
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Company
Action
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3
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Section
1.03.
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Directors
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4
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Section
1.04.
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Top-Up
Option
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5
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ARTICLE
2
THE
MERGER
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Section
2.01.
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The
Merger
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7
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Section
2.02.
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Conversion
of Shares
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7
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Section
2.03.
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Surrender
and Payment
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8
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Section
2.04.
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Dissenting
Shares
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9
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Section
2.05.
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Stock
Options
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9
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Section
2.06.
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Restricted
Shares
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10
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Section
2.07.
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Performance
Units
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10
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Section
2.08.
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Employee
Stock Purchase Plan
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10
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Section
2.09.
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Compensation
Arrangements
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10
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Section
2.10.
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Adjustments
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11
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Section
2.11.
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Withholding
Rights
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11
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Section
2.12.
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Lost
Certificates
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11
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ARTICLE
3
THE
SURVIVING CORPORATION
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Section
3.01.
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Certificate
of Incorporation
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11
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Section
3.02.
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Bylaws
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11
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Section
3.03.
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Directors
and Officers
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11
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ARTICLE
4
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
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Section
4.01.
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Corporate
Existence and Power
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12
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Section
4.02.
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Corporate
Authorization
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12
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Section
4.03.
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Governmental
Authorization
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13
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Section
4.04.
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Non-contravention
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13
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Section
4.05.
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Capitalization
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13
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Section
4.06.
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Subsidiaries
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14
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Section
4.07.
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SEC
Filings
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15
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Section
4.08.
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Financial
Statements
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16
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Section
4.09.
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Disclosure
Documents
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16
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i
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Section
4.10.
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Absence
of Certain Changes
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17
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Section
4.11.
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No
Undisclosed Material Liabilities
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17
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Section
4.12.
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Compliance
with Laws and Court Orders
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18
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Section
4.13.
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Litigation
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18
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Section
4.14.
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Taxes
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18
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Section
4.15.
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Labor
and Employment
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20
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Section
4.16.
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Employee
Benefit Plans
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20
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Section
4.17.
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Environmental
Matters
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22
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Section
4.18.
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Material
Contracts
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24
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Section
4.19.
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Intellectual
Property
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24
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Section
4.20.
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Finders’
Fees
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26
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Section
4.21.
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Opinion
of Financial Advisors
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26
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Section
4.22.
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Anti-takeover
Statutes and Rights Agreement
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26
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ARTICLE
5
REPRESENTATIONS
AND WARRANTIES OF PARENT
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Section
5.01.
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Corporate
Existence and Power
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27
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Section
5.02.
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Corporate
Authorization
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27
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Section
5.03.
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Governmental
Authorization
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27
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Section
5.04.
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Non-contravention
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28
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Section
5.05.
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Disclosure
Documents
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28
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Section
5.06.
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Finders’
Fees
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29
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Section
5.07.
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Financing
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29
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Section
5.08.
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Operations
of Merger Subsidiary
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29
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ARTICLE
6
COVENANTS
OF THE COMPANY
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Section
6.01.
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Conduct
of the Company
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29
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Section
6.02.
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Stockholder
Meeting; Proxy Material
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32
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Section
6.03.
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Access
to Information
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32
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Section
6.04.
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No
Solicitation; Change of Recommendation
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33
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ARTICLE
7
COVENANTS
OF PARENT
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Section
7.01.
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Obligations
of Merger Subsidiary
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36
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Section
7.02.
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Voting
of Shares
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36
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Section
7.03.
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Director
and Officer Liability
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36
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Section
7.04.
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Employee
Matters
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38
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ARTICLE
8
COVENANTS
OF PARENT AND THE COMPANY
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Section
8.01.
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Reasonable
Best Efforts
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39
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Section
8.02.
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Cooperation
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40
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ii
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Section
8.03.
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Public
Announcements
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40
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Section
8.04.
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Further
Assurances
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40
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Section
8.05.
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Merger
Without Meeting of Stockholders
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41
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Section
8.06.
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Section
16 Matters
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41
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Section
8.07.
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Notices
of Certain Events
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41
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Section
8.08.
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Takeover
Statutes
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41
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Section
8.09.
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Litigation
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42
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Section
8.10.
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Transfer
Taxes
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42
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ARTICLE
9
CONDITIONS
TO THE MERGER
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Section
9.01.
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Conditions
to the Obligations of Each Party
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42
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ARTICLE
10
TERMINATION
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Section
10.01.
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Termination
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43
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Section
10.02.
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Effect
of Termination
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44
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ARTICLE
11
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MISCELLANEOUS
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Section
11.01.
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Notices
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44
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Section
11.02.
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Survival
of Representations and Warranties
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46
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Section
11.03.
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Amendments
and Waivers
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46
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Section
11.04.
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Expenses
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46
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Section
11.05.
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Disclosure
Schedule References and SEC Document References
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47
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Section
11.06.
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Binding
Effect; Benefit; Assignment
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48
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Section
11.07.
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Governing
Law
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48
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Section
11.08.
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Jurisdiction
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48
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Section
11.09.
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WAIVER
OF JURY TRIAL
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49
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Section
11.10.
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Counterparts;
Effectiveness
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49
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Section
11.11.
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Entire
Agreement
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49
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Section
11.12.
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Severability
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49
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Section
11.13.
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Specific
Performance
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49
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ARTICLE
12
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DEFINITIONS
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Section
12.01.
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Definitions
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50
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Section
12.02.
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Other
Definitional and Interpretative Provisions
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53
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iii
AGREEMENT
AND PLAN OF MERGER
AGREEMENT
AND PLAN OF MERGER (this “Agreement”) dated as of January 21,
2008, among VENTANA MEDICAL SYSTEMS, INC., a Delaware corporation (the
“Company”), ROCHE HOLDINGS, INC., a Delaware corporation
(“Parent”), and ROCKET ACQUISITION CORPORATION, a Delaware
corporation and a wholly-owned indirect subsidiary of Parent (“Merger
Subsidiary”).
W
I T N E S S E T H :
WHEREAS,
on June 27, 2007 Merger Subsidiary filed a Tender Offer Statement on Schedule
TO
(together with any amendments or supplements thereto, the “Schedule
TO”) with respect to the tender offer by Merger Subsidiary (as such
offer has been amended from time to time prior to the date hereof, the
“Existing Offer”) to purchase all outstanding shares of common
stock, $0.001 par value, of the Company, together with the associated Company
Rights (as defined below) for so long as such Company Rights are outstanding
(collectively, the “Shares”); and
WHEREAS,
the parties hereto have agreed to the acquisition of the Company on the terms
and subject to the conditions set forth herein, and Parent has agreed to cause
Merger Subsidiary to amend the Existing Offer to reflect such agreement (the
“Amended Offer”, and as it may be amended from time to time in
accordance with this Agreement, the “Offer”);
NOW,
THEREFORE, the parties hereto agree as follows:
ARTICLE
1
THE
OFFER
to
no
other conditions. Merger Subsidiary expressly reserves the right to
waive any of the conditions to the Offer and to make any other changes in the
terms of or conditions to the Offer; provided that without the prior
consent of the Company (which consent may be granted or withheld by the Company
in its sole discretion) (A) the Minimum Condition may not be waived, (B) no
change may be made that changes the form of consideration to be paid, decreases
the price per Share or the number of Shares sought in the Offer, amends or
adds
to the conditions to the Offer set forth in Annex I or amends any other term
of
the Offer in any manner adverse to the stockholders of the Company and (C)
the
expiration date shall not be extended except as otherwise provided
herein. Notwithstanding the foregoing, (x) Merger Subsidiary shall
extend the Offer if at the scheduled or extended expiration date of the Offer
any of the conditions to the Offer shall not be satisfied or waived, from time
to time until such conditions are satisfied or waived; and (y) Merger Subsidiary
shall extend the Offer for any period required by any rule, regulation,
interpretation or position of the U.S. Securities and Exchange Commission (the
“SEC”) or the Nasdaq Global Select Market applicable to the
Offer; provided that in no event shall Merger Subsidiary
be required to extend the Offer beyond the End Date unless Parent or Merger
Subsidiary is not then permitted to terminate this Agreement pursuant to Section
10.01(b)(i), in which case Merger Subsidiary shall be required to extend the
Offer beyond the End Date. Following expiration of the Offer, Merger
Subsidiary shall, if requested by the Company, or may, in its sole discretion,
provide a subsequent offering period (“Subsequent Offering
Period”) in accordance with Rule 14d-11 of the 1934
Act. Subject to the foregoing, including the requirements of Rule
14d-11, and upon the terms and subject to the conditions of the Offer, Merger
Subsidiary shall, and Parent shall cause it to, accept for payment and pay
for,
as promptly as practicable after the expiration of the Offer, all Shares (1)
validly tendered and not withdrawn pursuant to the Offer and (2) validly
tendered in the Subsequent Offering Period (the date on which Shares are first
accepted for payment, the “Acceptance Date”).
(b) As
promptly as practicable after the date hereof, but in no event later than five
Business Days following the public announcement of the execution of this
Agreement, Merger Subsidiary shall, and shall cause its Affiliates to, (i)
file
with the SEC an amendment to the Schedule TO, which shall include a revised
offer to purchase and form of letter of transmittal and summary advertisement
reflecting the terms and conditions set forth in this Agreement (collectively,
together with any amendments or supplements thereto, the “Offer
Documents”), and (ii) to the extent required by applicable U.S. federal
securities laws, cause the Offer Documents to be disseminated to holders of
Shares. Each of Parent, Merger Subsidiary and the Company agrees
promptly to correct any information provided by it or any of its Affiliates
for
use in the Schedule TO and the Offer Documents if and to the extent that such
information shall have become false or misleading in any material
respect. Merger Subsidiary shall, and shall cause its Affiliates to,
use their respective reasonable best efforts to cause the Schedule TO as so
corrected to be filed with the SEC and the Offer Documents as so corrected
to
be
2
disseminated
to holders of Shares, in each case as and to the extent required by applicable
U.S. federal securities laws. The Company and its counsel shall be
given a reasonable opportunity to review and comment (A) on the Schedule TO
and
the Offer Documents each time before any such document is filed with the SEC
and
(B) on any correspondence with the SEC (including comment response letters)
concerning the Offer or the Offer Documents, and Merger Subsidiary shall give
reasonable and good faith consideration to any comments made by the Company
and
its counsel. Parent and Merger Subsidiary shall provide the Company
and its counsel with any written or oral comments Parent, Merger Subsidiary
or
their respective Affiliates or counsel may receive from the SEC with respect
to
the Offer Documents promptly, but in no event later than twelve hours, after
the
receipt of such comments.
Section
1.02. Company
Action. (a) The Company hereby
consents to the Offer and represents that its board of directors (the
“Board of Directors”), at a meeting duly called and held has
(i) determined that this Agreement and the transactions contemplated hereby,
including the Offer and the Merger, are fair to and in the best interests of
the
Company’s stockholders, (ii) approved and adopted this Agreement and the
transactions contemplated hereby, including the Offer and the Merger, and
declared this Agreement advisable, in accordance with the requirements of the
Delaware General Corporation Law (“Delaware Law”) and (iii)
resolved (subject to Section 6.04(b)) to recommend acceptance of the Offer
and
adoption of this Agreement by the stockholders of the Company.
(b) The
Company has been advised that, except as set forth in Section 1.02(b) of the
Company Disclosure Schedule (as defined below), as of the date hereof, all
of
its directors and executive officers who own Shares intend to tender their
Shares pursuant to the Offer. The Company shall promptly furnish
Parent with a list of its stockholders, mailing labels and any available listing
or computer file containing the names and addresses of all record holders of
Shares and lists of securities positions of Shares held in stock depositories,
in each case true and correct as of the most recent practicable date, and shall
provide to Parent such additional information (including updated lists of
stockholders, mailing labels and lists of securities positions) as Parent may
reasonably request in connection with the Offer.
(c) As
promptly as practicable after the amendment to the Schedule TO is filed with
the
SEC pursuant to the first sentence of Section 1.01(b), but in no event later
than five Business Days following the public announcement of the execution
of
this Agreement, the Company shall file with the SEC and, to the extent required
by applicable U.S. securities laws, disseminate to holders of Shares an
amendment to the Solicitation/Recommendation Statement on Schedule 14D-9 filed
by the Company on July 11, 2007 (together with any amendments or supplements
thereto, the “Schedule 14D-9”) that, subject to Section
6.04(b), shall reflect the recommendations of the Board of Directors referred
to
above. Each of the Company, Parent and Merger Subsidiary agrees
promptly to correct any information provided by it or any of its Affiliates
for
use in the Schedule 14D-9 if
3
and
to the
extent that it shall have become false or misleading in any material
respect. The Company shall cause the Schedule 14D-9 as so corrected
to be filed with the SEC and to be disseminated to holders of Shares, in each
case as and to the extent required by applicable U.S. federal securities
laws. Parent, Merger Subsidiary and their counsel shall be given a
reasonable opportunity to review and comment (A) on the Schedule 14D-9 each
time
before it is filed with the SEC and (B) on any correspondence with the SEC
(including comment response letters) concerning the Schedule 14D-9, and the
Company shall give reasonable and good faith consideration to any comments
made
by Parent, Merger Subsidiary and their counsel. The Company shall
provide Parent and Merger Subsidiary and their counsel with any written or
oral
comments the Company or its counsel may receive from the SEC with respect to
the
Schedule 14D-9 promptly, but in no event later than twelve hours, after the
receipt of such comments.
4
Continuing
Director for all purposes of this Agreement, or, if no Continuing Directors
then
remain, the other directors shall designate three persons to fill such vacancies
who are not officers, directors, stockholders or designees of Parent or any
of
its Affiliates, and such persons shall be deemed to be Continuing Directors
for
all purposes of this Agreement.
(b) The
Company’s obligations to appoint Parent’s designees to the Board of Directors
shall be subject to Section 14(f) of the 1934 Act and Rule 14f-1 promulgated
thereunder. Subject to applicable Laws, the Company shall promptly
take all actions required pursuant to Section 14(f) and Rule 14f-1 in order
to
fulfill its obligations under this Section 1.03, including mailing to
stockholders of the Company the information required by Section 14(f) and Rule
14f-1 as is necessary to enable Parent’s designees to be elected or designated
to the Board of Directors (provided that Parent or Merger Subsidiary
shall have provided to the Company on a timely basis all information with
respect to itself and its nominees, officers, directors and Affiliates required
by Section 14(f) and Rule 14f-1). Parent shall supply to the Company
in writing and be solely responsible for any information with respect to itself
and its nominees, officers, directors and Affiliates required by Section 14(f)
and Rule 14f-1.
(c) Following
the election or appointment of Parent’s designees pursuant to Section 1.03(a)
and until the Effective Time, the approval of a majority of the Continuing
Directors shall be required to authorize (and such authorization shall
constitute the authorization of the Board of Directors and no other action
on
the part of the Company, including any action by any other director of the
Company, shall be required) (i) any amendment or termination of this Agreement
by the Company, (ii) any agreement between the Company and any of its
Subsidiaries, on the one hand, and Parent, Merger Subsidiary or any of their
respective Affiliates (other than the Company and its Subsidiaries), on the
other hand, (iii) the taking of any action by the Company or any of its
Subsidiaries that would prevent or would materially delay the consummation
of
the Merger, (iv) any extension of time for performance of any obligation or
action hereunder by Parent or Merger Subsidiary or (v) any waiver of any of
the
Company’s rights or remedies under this Agreement.
Section
1.04. Top-Up
Option. (a) Subject to Sections
1.04(b) and 1.04(c), the Company grants to Merger Subsidiary an option, for
so
long as this Agreement has not been terminated pursuant to the provisions hereof
(the “Top-Up Option”), to purchase from the Company, up to the
number of authorized and unissued Shares, the number of Shares that, when added
to the number of Shares owned by Merger Subsidiary at the time of exercise
of
the Top-Up Option, constitutes one Share more than 90% of the Shares that would
be outstanding immediately after the issuance of all Shares to be issued upon
exercise of the Top-Up Option, calculated on a fully-diluted basis (the Shares
to be issued upon exercise of the Top-Up Option, the “Top-Up
Shares”).
5
(b) The
Top-Up
Option may be exercised by Merger Subsidiary in accordance with Section 1.04(c),
in whole or in part, only once, at any time during the 10 Business Day period
following the Acceptance Date, or if any Subsequent Offering Period is provided,
during the 10 Business Day period following the expiration date of such
Subsequent Offering Period, and only if Merger Subsidiary shall own as of such
time less than 90% of the outstanding Shares; provided that
notwithstanding anything in this Agreement to the contrary, the Top-Up Option
shall not be exercisable to the extent (i) the issuance of the Shares upon
exercise of the Top-Up Option would require approval of the Company’s
stockholders under the rules and regulations of the Nasdaq Global Select Market
or (ii) the number of Shares issuable upon exercise of the Top-Up Option would
exceed the number of authorized but unissued and unreserved
Shares. The aggregate purchase price payable for the Top-Up Shares
being purchased by Merger Subsidiary pursuant to the Top-Up Option shall be
determined by multiplying the number of such Shares by an amount in cash equal
to the price paid for each Share in the Offer, without interest. Such
purchase price shall be payable in cash by Merger Subsidiary.
(c) In
the
event Merger Subsidiary wishes to exercise the Top-Up Option, Merger Subsidiary
shall deliver to the Company a notice (the “Top-Up Notice”)
setting forth (i) the number of Top-Up Shares that Merger Subsidiary intends
to
purchase pursuant to the Top-Up Option and (ii) the place and time at which
the
closing of the purchase of such Top-Up Shares by Merger Subsidiary is to take
place. The Top-Up Notice shall also include an undertaking signed by
Parent and Merger Subsidiary that, as promptly as practicable following such
exercise of the Top-Up Option, Merger Subsidiary intends to (and Merger
Subsidiary shall, and Parent shall cause Merger Subsidiary to, as promptly
as
practicable after such exercise) consummate the Merger in accordance with
Section 253 of Delaware Law as contemplated by Section
8.05. At the closing of the purchase of the Top-Up Shares, Parent and
Merger Subsidiary shall cause to be delivered to the Company the consideration
required to be delivered in exchange for the Top-Up Shares, and the Company
shall cause to be issued to Merger Subsidiary a certificate representing the
Top-Up Shares. The parties hereto agree to use their reasonable best
efforts to cause the closing of the purchase of the Top-Up Shares to occur
on
the same day that the Top-Up Notice is deemed received by the Company pursuant
to Section 11.01, and if not so consummated on such day, as promptly thereafter
as possible. The parties further agree to use their reasonable best efforts
to
cause the Merger to be consummated in accordance with Section 253 of Delaware
Law as contemplated by Section 8.05 as close in time as possible to (including,
to the extent possible, on the same day as) the issuance of the Top-Up
Shares.
(d) Parent
and
Merger Subsidiary understand that the Top-Up Shares will not be registered
under
the 1933 Act and will be issued in reliance upon an exemption thereunder for
transactions not involving a public offering. Each of Parent and
Merger Subsidiary represents, warrants and agrees that the Top-Up
6
Option
is being, and the Top-Up Shares will be,
acquired by Merger Subsidiary for the purpose of investment and not with a
view
to or for resale in connection with any distribution thereof within the meaning
of the 1933 Act. Any certificates evidencing Top-Up Shares may
include any legends required by applicable securities laws.
ARTICLE
2
THE
MERGER
Section
2.01 . The
Merger. (a) At the Effective Time,
Merger Subsidiary shall be merged (the “Merger”) with and into
the Company in accordance with Delaware Law, whereupon the separate existence
of
Merger Subsidiary shall cease, and the Company shall be the surviving
corporation (the “Surviving Corporation”).
(b) As
soon as
practicable (and in no event later than the third Business Day) after
satisfaction or, to the extent permitted hereunder, waiver of all conditions
to
the Merger set forth in Article 9, the Company and Merger Subsidiary shall
file
a certificate of merger (or, if the Merger is consummated pursuant to Section
253 of Delaware Law, a certificate of ownership and merger) with the Delaware
Secretary of State and make all other filings or recordings required by Delaware
Law and this Agreement in connection with the Merger. The Merger
shall become effective at such time (the “Effective Time”) as
the certificate of merger (or, if the Merger is to be consummated pursuant
to
Section 253 of Delaware Law, the certificate of ownership and merger) is duly
filed with the Delaware Secretary of State or at such later time as is permitted
by applicable Law and specified in the certificate of merger.
(c) At
the
Effective Time, the separate existence of Merger Subsidiary shall cease, and
from and after the Effective Time, the Surviving Corporation shall possess
all
the rights, powers, privileges and franchises and be subject to all of the
obligations, liabilities, debts, duties, restrictions and disabilities of the
Company and Merger Subsidiary, all as provided under Delaware Law.
(a) except
as
otherwise provided in Section 2.02(b), Section 2.02(c) or Section 2.04, each
Share outstanding immediately prior to the Effective Time shall be converted
into the right to receive an amount in cash equal to the price paid for each
Share in the Offer, without interest (the “Merger
Consideration”);
7
(b) each
Share
held by the Company as treasury stock or by Parent or any of its Subsidiaries
immediately prior to the Effective Time shall be canceled, and no payment shall
be made with respect thereto;
(c) each
Share
held by a Subsidiary of the Company immediately prior to the Effective Time
shall be converted into such number of shares of stock of the Surviving
Corporation such that each such Subsidiary owns the same percentage of the
outstanding capital stock of Surviving Corporation immediately following the
Effective Time as such Subsidiary owned in the Company immediately prior to
the
Effective Time; and
(d) each
share
of common stock of Merger Subsidiary outstanding immediately prior to the
Effective Time shall be converted into and become one share of common stock
of
the Surviving Corporation with the same rights, powers and privileges as the
shares so converted and shall constitute the only outstanding shares of capital
stock of the Surviving Corporation (except for any such shares resulting from
the conversion of Shares pursuant to Section 2.02(c)).
(b) Each
holder of Shares that have been converted into the right to receive the Merger
Consideration shall be entitled to receive, upon (i) surrender to the Exchange
Agent of a Certificate, together with a properly completed letter of
transmittal, or (ii) receipt of an “agent’s message” by the Exchange Agent (or
such other evidence, if any, of transfer as the Exchange Agent may reasonably
request) in the case of a book-entry transfer of Uncertificated Shares, the
Merger Consideration payable for each Share represented by a Certificate or
for
each Uncertificated Share. Until so surrendered or transferred, as
the case may be, each such Certificate or Uncertificated
Share shall represent after the Effective Time for all purposes only the right
to receive the Merger Consideration.
(c) If
any
portion of the Merger Consideration is to be paid to a Person other than the
Person in whose name the surrendered Certificate or Uncertificated Share is
registered, it shall be a condition to such payment that (i) either such
Certificate shall be properly endorsed or shall otherwise be in proper form
for
8
transfer
or such Uncertificated Share shall be properly transferred and (ii) the Person
requesting such payment shall pay to the Exchange Agent any transfer or other
Taxes required as a result of such payment to a Person other than the registered
holder of such Certificate or Uncertificated Share or establish to the
satisfaction of the Exchange Agent that such Tax has been paid or is not
payable.
(d) After
the
Effective Time, there shall be no further registration of transfers of
Shares. If, after the Effective Time, Certificates or Uncertificated
Shares are presented to the Surviving Corporation, they shall be canceled and
exchanged for the Merger Consideration provided for, and in accordance with
the
procedures set forth, in this Article 2.
(e) Any
portion of the Merger Consideration made available to the Exchange Agent
pursuant to Section 2.03(a) (and any interest or other income earned thereon)
that remains unclaimed by the holders of Shares six months after the Effective
Time shall be returned to the Surviving Corporation or one of its Affiliates
upon demand, and any such holder who has not exchanged such Shares for the
Merger Consideration in accordance with this Section 2.03 prior to that time
shall thereafter look only to the Surviving Corporation for payment of the
Merger Consideration in respect of such Shares without any interest
thereon. Notwithstanding the foregoing, neither the Surviving
Corporation nor any of its Affiliates shall be liable to any holder of Shares
for any amount paid to a public official pursuant to applicable abandoned
property, escheat or similar laws.
(f) Any
portion of the Merger Consideration made available to the Exchange Agent
pursuant to Section 2.03(a) to pay for Shares for which appraisal rights have
been perfected shall be returned to the Surviving Corporation or one of its
Affiliates, upon demand.
Section
2.05.
Stock
Options. At the Effective Time,
each then-outstanding option to purchase Shares granted under any stock option
or
9
compensation
plan or arrangement of the Company (a “Company Stock Option”),
whether or not vested or exercisable, shall vest and be canceled, and, in
exchange therefor, the Surviving Corporation shall pay to each former holder
of
any such Company Stock Option at or promptly after the Effective Time an amount
in cash equal to the product of (a) the excess, if any, of the Merger
Consideration over the applicable exercise price per Share of such Company
Stock
Option and (b) the number of Shares such holder could have purchased (assuming
full vesting of such Company Stock Option) had such holder exercised such
Company Stock Option in full immediately prior to the Effective
Time.
Section
2.06. Restricted
Shares. At the Effective Time, each then-outstanding restricted
Share granted under any equity or compensation plan or arrangement of the
Company (a “Company Restricted Share”) shall vest (and all
restrictions thereon shall immediately lapse) and shall be converted into the
right to receive the Merger Consideration in accordance with Section
2.02(a).
Section
2.07. Performance
Units. At the Effective Time, each then-outstanding performance
unit granted under any equity or compensation plan or arrangement of the Company
(a “Company Performance Unit”), whether or not vested, shall
vest and be canceled, and, in exchange therefor, the Surviving Corporation
shall
pay to each former holder of any such cancelled Company Performance Unit at
or
promptly after the Effective Time an amount in cash equal to the product of
the
Merger Consideration and the number of Shares subject to or related to such
Company Performance Unit.
Section
2.08. Employee
Stock Purchase Plan. The Company shall take all action that is
necessary to (a) suspend all payroll deductions and cause the exercise of each
outstanding purchase right under the Company’s 2005 Employee Stock Purchase Plan
(the “Company ESPP”) not later than the initial scheduled
expiration of the Amended Offer; (b) provide that no further purchase period
or
offering period shall commence under the Company ESPP following that date;
and
(c) immediately prior to and effective as of the Effective Time and subject
to
the consummation of the Merger, terminate the Company ESPP.
Section
2.09. Compensation
Arrangements. Prior to the Acceptance Date, to the extent
necessary, the Company (acting through the Compensation Committee of the Board
of Directors) will take all steps that may be necessary or reasonably advisable
to cause any employee agreement, plan or arrangement pursuant to which
consideration is payable to any officer, director or employee to be approved
by
the Compensation Committee of the Board of Directors (comprised solely of
“independent directors” determined in accordance with the requirements of Rule
14d-10(d)(2) under the 1934 Act and the instructions thereto) as an “employment
compensation, severance or other employee benefit arrangement” within the
meaning of Rule 14d-10(d)(2) and to satisfy the requirements of the
non-exclusive safe harbor set forth in Rule 14d−10(d).
10
Section
2.11. Withholding
Rights. Notwithstanding anything else contained herein to the
contrary, each of the Surviving Corporation and Parent shall be entitled to
deduct and withhold from the consideration otherwise payable to any Person
pursuant to Article 1 and Article 2 such amounts as it is required to deduct
and
withhold with respect to the making of such payment under any provision of
Tax
law. If the Surviving Corporation or Parent, as the case may be, so
withholds amounts, such amounts shall be treated for all purposes of this
Agreement as having been paid to the Person in respect of which the Surviving
Corporation or Parent, as the case may be, made such deduction and
withholding.
Section
2.12. Lost
Certificates. If any
Certificate shall have been mutilated, lost, stolen or destroyed, upon the
making of an affidavit of that fact by the Person claiming such Certificate
to
be mutilated, lost, stolen or destroyed, the completion of the letter of
transmittal by such Person and, if required by the Surviving Corporation, the
posting by such Person of a bond, in such reasonable amount as the Surviving
Corporation may direct, as indemnity against any claim that may be made against
it with respect to such Certificate, the Exchange Agent shall pay, in exchange
for such mutilated, lost, stolen or destroyed Certificate, the Merger
Consideration to be paid in respect of the Shares represented by such
Certificate as contemplated by this Article 2.
ARTICLE
3
THE
SURVIVING CORPORATION
Section
3.01.
Certificate
of
Incorporation. The certificate of incorporation of the Company
in effect at the Effective Time shall, subject to the provisions of Section
7.03
hereof, be the certificate of incorporation of the Surviving Corporation until
amended in accordance with Delaware Law.
Section
3.02. Bylaws. The
bylaws of
Merger Subsidiary in effect at the Effective Time shall, subject to the
provisions of Section 7.03 hereof, be the bylaws of the Surviving Corporation
until amended in accordance with Delaware Law.
11
Delaware
Law, (a) the directors of Merger Subsidiary at the Effective Time shall be
the
directors of the Surviving Corporation and (b) the officers of the Company
at
the Effective Time shall be the officers of the Surviving
Corporation.
ARTICLE
4
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
Except
as disclosed in (a) the Company
SEC Documents filed with the SEC prior to the date hereof (the “Filed
SEC Documents”) or (b) the disclosure schedule delivered by the Company
to Parent and Merger Subsidiary prior to or simultaneously with the execution
of
this Agreement (the “Company Disclosure Schedule”), the Company
represents and warrants to Parent that:
Section
4.01. Corporate
Existence and Power. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware and has all corporate powers and all governmental licenses,
authorizations, permits, consents and approvals required to carry on its
business in substantially the same manner as now conducted, except for those
licenses, authorizations, permits, consents and approvals (a) set forth in
Section 4.01 of the Company Disclosure Schedule or (b) the absence of which
would not reasonably be expected to have, individually or in the aggregate,
a
Company Material Adverse Effect. The Company is duly qualified to do
business as a foreign corporation and is in good standing in each jurisdiction
where such qualification is necessary, except for those jurisdictions where
failure to be so qualified would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse
Effect. The Company has heretofore made available to Parent true and
complete copies of the certificate of incorporation and bylaws of the Company
as
currently in effect.
Section
4.02. Corporate
Authorization. (a) The execution, delivery and performance by
the Company of this Agreement and the consummation by the Company of the
transactions contemplated hereby are within the Company’s corporate powers and,
except for any required approval of the Company’s stockholders in connection
with the consummation of the Merger, have been duly authorized by all necessary
corporate action on the part of the Company. The affirmative vote of
the holders of a majority of the outstanding Shares (if required by Delaware
Law) is the only vote of the holders of any of the Company’s capital stock
required in connection with the consummation of the Merger (the “Company
Stockholder Approval”) This Agreement constitutes a valid
and binding agreement of the Company.
(b) At
a
meeting duly called and held, the Board of Directors has (i) determined that
this Agreement and the transactions contemplated hereby are fair to and in
the
best interests of the Company’s stockholders, (ii) approved and adopted this
Agreement and the transactions contemplated hereby, including the Offer and
the
Merger, and declared this Agreement advisable, in accordance with
12
the
requirements of Delaware Law and (iii) resolved (subject to Section 6.04(b))
to
recommend acceptance of the Offer and adoption of this Agreement by the
stockholders of the Company (the “Company Board
Recommendation”).
Section
4.03. Governmental
Authorization. The execution, delivery and performance by the
Company of this Agreement and the consummation by the Company of the
transactions contemplated hereby require no action by or in respect of, or
filing with, any Governmental Authority, other than (a) the filing of a
certificate of merger (or certificate of ownership and merger) with respect
to
the Merger with the Delaware Secretary of State, (b) compliance with any
applicable Antitrust Laws, (c) compliance with any applicable requirements
of
the 1934 Act and any other applicable U.S. state or federal securities laws,
(d)
compliance with any applicable rules and regulations of the Nasdaq Global Select
Market and (e) any actions or filings the absence of which would not reasonably
be expected to have, individually or in the aggregate, a Company Material
Adverse Effect.
Section
4.04. Non-contravention. Except
as set forth in Section 4.04 of the Company Disclosure Schedule, the execution,
delivery and performance by the Company of this Agreement and the consummation
by the Company of the transactions contemplated hereby do not and will not
(a)
contravene, conflict with, or result in any violation or breach of any provision
of the certificate of incorporation or bylaws of the Company, (b) assuming
compliance with the matters referred to in Section 4.03, contravene, conflict
with, or result in a violation or breach of any provision of applicable Law
or
any judgment, injunction, order or decree of any Governmental Authority with
competent jurisdiction, (c) require any consent or other action by any Person
under, constitute a default, or an event that, with or without notice or lapse
of time or both, could become a default, under, or cause or permit the
termination, cancellation, acceleration or other change of any right or
obligation or the loss of any benefit to which the Company or any of its
Subsidiaries is entitled under any provision of any agreement or other
instrument binding upon the Company or any of its Subsidiaries or any license,
franchise, permit, certificate, approval or other similar authorization
affecting, or relating in any way to, the assets or business of the Company
and
its Subsidiaries or (d) result in the creation or imposition of any Lien on
any
asset of the Company or any of its Subsidiaries, except, in the case of clauses
(b) through (d), for such matters as would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse
Effect.
13
Company
Performance Units will be, when issued in accordance with the respective terms
thereof, duly authorized and validly issued and fully paid and nonassessable
and
free of preemptive rights. Section 4.05 of the Company Disclosure
Schedule contains a list of (i) each outstanding Company Stock Option, including
the holder, date of grant, exercise price, number of Shares subject thereto
and
the number of such Shares that have vested and (ii) all outstanding Company
Restricted Shares and Company Performance Units, including with respect to
each
such share or unit, the holder, date of grant and number vested, and such list
is complete and accurate in all material respects.
(b) Except
for
the Company’s obligations under the Rights Agreement and the Company Rights
issued pursuant thereto, except as set forth in this Section 4.05 and for
changes since January 20, 2008 resulting from the exercise of Company Stock
Options outstanding on such date and the purchase of Shares pursuant to the
Company ESPP in accordance with its terms as in effect on the date hereof,
there
are no outstanding (i) shares of capital stock of or other voting securities
or
ownership interests in the Company or (ii) options or other rights to acquire
from the Company, or other obligation of the Company to issue, any capital
stock
or other voting securities or ownership interests in, or any securities
convertible into or exchangeable or exercisable for capital stock or other
voting securities or ownership interests in, the Company (the items in clauses
(i) and (ii) being referred to collectively as the “Company
Securities”). There are no outstanding obligations of the
Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire
any of the Company Securities.
(c) Except
as
set forth in Section 4.05 of the Company Disclosure Schedule, none of (i) the
Shares or (ii) Company Securities are owned by any Subsidiary of the
Company.
14
(b) Except
as
set forth in Section 4.06(b) of the Company Disclosure Schedule, all of the
outstanding capital stock of or other voting securities or ownership interests
in each Subsidiary of the Company is owned by the Company, directly or
indirectly, free and clear of any Lien and free of any other limitation or
restriction (including any restriction on the right to vote, sell or otherwise
dispose of such capital stock or other voting securities or ownership
interests). Except as set forth in the preceding sentence, there are
no outstanding (i) shares of capital stock of or other voting securities or
ownership interests in any Subsidiary of the Company or (ii) options or other
rights to acquire from the Company or any of its Subsidiaries, or other
obligation of the Company or any of its Subsidiaries to issue, any capital
stock
of or other voting securities or ownership interests in, or any securities
convertible into or exchangeable or exercisable for any capital stock of or
other voting securities or ownership interests in, any Subsidiary of the Company
(the items in clauses (i) and (ii) being referred to collectively as the
“Company Subsidiary Securities”). There are no
outstanding obligations of the Company or any of its Subsidiaries to repurchase,
redeem or otherwise acquire any of the Company Subsidiary
Securities.
(b) The
Company has established and maintains disclosure controls and procedures (as
defined in Rule 13a-15 under the 1934 Act). Such disclosure controls
and procedures are designed to ensure that information required to be disclosed
in the Company’s periodic reports filed or submitted under the 1934 Act is
recorded, processed, summarized and reported within the required time
periods. Such disclosure controls and procedures are effective in
timely alerting the Company’s principal executive officer and principal
financial officer to material information required to be included in the
Company’s periodic reports required under the 1934 Act.
(c) The
Company has established and maintains a system of internal control over
financial reporting (as defined in Rule 13a-15 under the 1934
Act).
15
Such
internal controls are designed to provide reasonable assurance regarding the
reliability of the Company’s financial reporting and the preparation of Company
financial statements for external purposes in accordance with
GAAP. The Company has disclosed, based on its most recent evaluation
of internal controls prior to the date hereof, to the Company’s auditors and
audit committee (i) any significant deficiencies and material weaknesses in
the
design or operation of internal controls which are reasonably likely to
adversely affect the Company’s ability to record, process, summarize and report
financial information and (ii) any fraud, whether or not material, that involves
management or other employees who have a significant role in internal
controls. The Company has made available to Parent a summary of any
such disclosure made by management to the Company’s auditors and audit committee
since January 1, 2005.
(d) Since
January 1, 2005, each Company SEC Document that was required to be accompanied
by the certifications required to be filed or submitted by the Company’s
principal executive officer and principal financial officer pursuant to the
Xxxxxxxx-Xxxxx Act was accompanied by such certification and, at the time of
filing or submission of each such certification, such certification was true
and
accurate and complied with the Xxxxxxxx-Xxxxx Act.
(e) There
are
no outstanding loans or other extensions of credit made by the Company or any
of
its Subsidiaries to any executive officer (as defined in Rule 3b-7 under the
0000 Xxx) or director of the Company. The Company has complied, since
January 1, 2005, in all material respects with the Xxxxxxxx-Xxxxx Act.
Section
4.08 .
Financial Statements. The consolidated financial statements
of the Company (including all related notes and schedules) included in the
Company SEC Documents fairly present in all material respects the consolidated
financial position of the Company and its consolidated Subsidiaries as of the
dates thereof and the consolidated results of their operations and their cash
flows for the periods then ended (subject, in the case of unaudited interim
financial statements, to normal year-end audit adjustments and the absence
of
notes as permitted by Form 10-Q) in conformity with United States generally
accepted accounting principles (“GAAP”) applied on a consistent
basis (except as may be indicated in the notes thereto). For purposes
of this Agreement, “Company Balance Sheet” means the
consolidated balance sheet of the Company as set forth in the Company’s
Quarterly Report on Form 10-Q for the quarter ended September 30, 2007, and
“Company Balance Sheet Date” means September 30,
2007.
Section
4.09. Disclosure
Documents. (a) Each document required to be filed by the Company
with the SEC or required to be distributed or otherwise disseminated to the
Company’s stockholders in connection with the transactions contemplated by this
Agreement (the “Company Disclosure Documents”), including the
Schedule 14D-9, and any amendments or supplements thereto, when
16
filed,
distributed or disseminated, as applicable, will comply as to form in all
material respects with the applicable requirements of the 0000 Xxx.
(b) The
information with respect to the Company or any of its Subsidiaries that the
Company furnishes to Parent in writing specifically for use in the Schedule
TO
and the Offer Documents, at the time of the filing of the Schedule TO or any
amendment or supplement thereto, at the time of any distribution or
dissemination of the Offer Documents and at the time of the consummation of
the
Offer, will not contain any untrue statement of a material fact or omit to
state
any material fact necessary in order to make the statements made therein, in
the
light of the circumstances under which they were made, not
misleading.
Section
4.10. Absence
of Certain
Changes. Except as set forth in Section 4.10 of the Company
Disclosure Schedule, since the Company Balance Sheet Date, the business of
the
Company and its Subsidiaries has been conducted in the ordinary course
consistent with past practices and there has not been (a) any event, occurrence,
development or state of circumstances or facts that has had or would reasonably
be expected to have, individually or in the aggregate, a Company Material
Adverse Effect; (b) any amendment to the articles of incorporation or bylaws
of
the Company; (c) any split, combination or reclassification of any shares of
the
Company’s capital stock or declaration, setting aside or payment of any dividend
or other distribution (whether in cash, stock or property or any combination
thereof) in respect of the Company’s capital stock, or redemption, repurchase or
other acquisition or offer to redeem, repurchase or otherwise acquire any
Company Securities; (d) any sale, assignment, license or other transfer of
any
Necessary Intellectual Property or Company Intellectual Property (or any rights
therein) or acquisition of any material Intellectual Property other than in
the
ordinary course of business consistent with past practices; (e) except as
required by the terms of an applicable plan or agreement then in effect or
as
required or deemed advisable pursuant to applicable Law and except as would
not
result in an expense greater than $25,000 in the aggregate, (i) any increase
in
compensation, bonuses or other benefits payable to any director or executive
officer or, except in the ordinary course of business consistent with past
practices, other employee of the Company or any of its Subsidiaries or (ii)
any
entering into, adoption or amendment in any material respect of any employment,
change of control, severance, compensation, bonus, profit-sharing, stock option
or other stock related rights or other forms of incentive or deferred
compensation, retirement benefits or other benefit agreement, plan, arrangement
or policy applicable to any director or executive officer or, except in the
ordinary course of business consistent with past practices, any other employee
of the Company or any of its Subsidiaries; or (f) any resolution, commitment
or
agreement to take any of the actions described in clauses (b) through (e) of
this Section 4.10.
Section
4.11. No
Undisclosed Material Liabilities. There are no liabilities or
obligations of the Company or any of its Subsidiaries of any kind whatsoever,
17
whether
accrued, contingent, absolute, determined, determinable or otherwise, other
than:
(a) liabilities
or obligations disclosed or provided for in the Company Balance Sheet or in
the
Filed SEC Documents;
(b) liabilities
or obligations incurred in the ordinary course of business consistent with
past
practices;
(c) liabilities
or obligations that would not reasonably be expected to have, individually
or in
the aggregate, a Company Material Adverse Effect; and
(d) liabilities
or obligations incurred in connection with the transactions contemplated by
this
Agreement.
Section
4.12.Compliance
with Laws and Court
Orders. Except as set forth in Section 4.12 of the Company
Disclosure Schedule, the Company and each of its Subsidiaries is (and since
December 31, 2005 has been) in compliance with, and to the knowledge of the
Company is not under investigation with respect to, and has not been threatened
to be charged with, or given notice of any violation of, any provision of
applicable Law or any judgment, injunction, order or decree of any Governmental
Authority with competent jurisdiction, except for such matters as would not
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect.
This
Section 4.12 excludes the subject matters covered by Sections 4.07, 4.14, 4.17
and 4.19.
Section
4.13 . Litigation. Except
as set forth in Section 4.13 of the Company Disclosure Schedule, there is no
action, suit, investigation or proceeding pending against, or, to the knowledge
of the Company, threatened against or otherwise affecting, the Company, any
of
its Subsidiaries, any of their respective properties or, to the knowledge of
the
Company, any present or former officer, director or employee of the Company
or
any of its Subsidiaries, that would reasonably be expected to have, individually
or in the aggregate, a Company Material Adverse Effect.
Section
4.14. Taxes. (a)
Except as set
forth in Section 4.14(a) of the Company Disclosure Schedule, each Tax Return
required to be filed with any Taxing Authority by, or on behalf of, the Company
or any of its Subsidiaries has been timely filed and each such Tax Return is
true and complete in all respects, except where the failure to timely file
or to
be true and complete would not, individually or in the aggregate, reasonably
be
expected to have a Company Material Adverse Effect.
(b) Except
as
set forth in Section 4.14(b) of the Company Disclosure Schedule and except
for
such matters as would not, individually or in the
18
aggregate,
reasonably be expected to have a Company Material Adverse Effect, the Company
and each of its Subsidiaries has paid (or has had paid on its behalf) or has
withheld and remitted to the appropriate Taxing Authority all Taxes shown as
due
and payable on all Tax Returns that have been filed.
(c) The
consolidated federal income Tax Returns for the affiliated group of which
the
Company is the common parent through the Tax year ended December 31, 2004
have
been examined and the examinations have been closed or are Tax Returns with
respect to which the applicable period for assessment under Law, after giving
effect to extensions or waivers, has expired.
(d) Except
as
set forth in Section 4.14(d) of the Company Disclosure Schedule, there is no
audit, examination, or proceeding by any Taxing Authority now pending or, to
the
Company’s knowledge, threatened against or with respect to the Company or its
Subsidiaries in respect of any Tax that would reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse
Effect.
(e) During
the
two-year period ending on the date hereof, neither the Company nor any of its
Subsidiaries has constituted either a “distributing corporation” or a
“controlled corporation” (within the meaning of Section 355(a)(1)(A) of the
Code).
(f) Neither
the Company nor any of its Subsidiaries has been required to disclose to the
Internal Revenue Service that it has participated in a “listed transaction”
within the meaning of Treasury Regulation Section 1.6011-4(b).
(g) For
purposes of this Agreement:
“Tax”
(and, with correlative meaning, “Taxes”) means (i) all taxes,
charges, fees, duties, levies, penalties or other assessments, including income,
gross receipts, excise, real and personal property, sales, use, transfer,
license, payroll, social security, medicare, franchise, gains, built-in gains,
unemployment insurance, escheat, workers’ compensation, employer health tax or
other taxes, imposed by any Governmental Authority (including withholding on
amounts paid to or by any Person), together with any interest, penalty, addition
to tax or additional amount imposed by any Governmental Authority (a
“Taxing Authority”) responsible for the imposition of any such
tax (domestic or foreign), and any liability for any of the foregoing as
transferee, (ii) liability for the payment of any amount of the type described
in clause (i) as a result of being or having been before the Effective Time
a
member of an affiliated, consolidated, combined or unitary group or similar
arrangement required or permitted under applicable Law.
“Tax
Return” means any report, return, document, declaration or other
information or filing required to be supplied to any Taxing Authority with
respect to Taxes, including information returns, any documents with respect
to
or
19
accompanying
payments of estimated Taxes, or with respect to or accompanying requests for
the
extension of time in which to file any such report, return, document,
declaration or other information.
Section
4.15. Labor
and
Employment. (a) The Company and its Subsidiaries have
complied with all Laws relating to labor and employment, including those
relating to wages, hours, collective bargaining, unemployment compensation,
worker’s compensation, equal employment opportunity, age and disability
discrimination, immigration control, employee classification, information
privacy and security, payment and withholding of taxes, and continuation
coverage with respect to group health plans, except for such matters as would
not reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect.
(b) Except
as set forth in Section 4.15(b) of the Company Disclosure Schedule, neither
the
Company nor any of its Subsidiaries is a party to or subject to, or is currently
negotiating in connection with entering into, any collective bargaining
agreement or other labor agreement with any union or labor organization, and
to
the knowledge of the Company there has not been any activity or proceeding
of
any labor organization or employee group to organize any such
employees. Furthermore, (i) there are no unfair labor practice
charges or complaints against the Company or any of its Subsidiaries pending
before the National Labor Relations Board; (ii) there are no labor strikes,
slowdowns or stoppages actually pending or to the knowledge of the Company
threatened against or affecting the Company or any of its Subsidiaries; (iii)
there are no representation claims or petitions pending before the National
Labor Relations Board or any foreign equivalent; and (iv) there are no grievance
or pending arbitration proceedings against the Company or any of its
Subsidiaries that arose out of or under any collection bargaining agreement,
in
each case, except for such matters as would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse
Effect.
20
related
trust or funding agreements or insurance policies) and all amendments thereto
have been made available to Parent together with the most recent annual report
(Form 5500 including, if applicable, Schedule B thereto) and tax return (Form
990) prepared in connection with any such plan or trust. Such plans
are referred to collectively herein as the “Employee Plans.”
Employee Plans that primarily cover any employee or former
employee outside of
the United States are referred to herein collectively as “International
Plans” and are specifically identified in Section 4.16(a) of the
Company Disclosure Schedule by an asterisk.
(b) Neither
the Company nor any ERISA Affiliate nor any predecessor thereof sponsors,
maintains or contributes to, or has in the six-year period preceding the date
hereof sponsored, maintained or contributed to, any employee plan subject to
Title IV of ERISA. The Company does not maintain or contribute to, or
have liability in connection with, any Employee Plan that is a “defined-benefit”
type or similar actuarial arrangement that primarily covers employees or former
employees outside of the United States, other than any such arrangements that
are mandated by local law.
(c) Neither
the Company nor any ERISA Affiliate nor any predecessor thereof contributes
to,
or has in the six-year period preceding the date hereof contributed to, any
multiemployer plan, as defined in Section 3(37) of ERISA (a
“Multiemployer Plan”).
(d) Except
for
matters that would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect, each Employee Plan has been
maintained in compliance with its terms and with the requirements prescribed
by
any and all statutes, orders, rules and regulations, including ERISA and the
Code, which are applicable to such Employee Plan. Each Employee Plan
that is intended to be qualified under Section 401(a) of the Code has received
a
favorable determination letter, or has pending or has time remaining in which
to
file, an application for such determination from the Internal Revenue Service,
and the Company is not aware of any reason why any such determination letter
should be revoked or not be issued. The Company has made available to
Parent copies of the most recent Internal Revenue Service determination letters
with respect to each such Employee Plan. Except for matters that
would not reasonably be expected to have, individually or in the aggregate,
a
Company Material Adverse Effect, no events have occurred with respect to any
Employee Plan that could result in payment or assessment by or against the
Company of any excise taxes under Sections 4972, 4975, 4976, 4977, 4979, 4980B,
4980D, 4980E or 5000 of the Code.
(e) Except
as
set forth in Section 4.16(e) of the Company Disclosure Schedule, the
consummation by the Company of the transactions contemplated by this Agreement
will not (either alone or together with any other event) entitle any employee
or
independent contractor of the Company or any of its Subsidiaries to any
severance, bonus, retirement, job security or similar benefit or enhance such
benefit or accelerate the time of payment or vesting or trigger any payment
or
21
funding
(through a grantor trust or otherwise) of compensation or benefits under, or
increase the amount payable or trigger any other material obligation pursuant
to, any Employee Plan. There is no contract, plan or arrangement
(written or otherwise) covering any employee or former employee of the Company
or any of its Subsidiaries that, individually or collectively, would entitle
any
employee or former employee to any severance or other payment solely as a result
of the transactions contemplated hereby, or could give rise to the payment
of
any amount that would not be deductible pursuant to the terms of
Section 280G of the Code.
(f) Neither
the Company nor any of its Subsidiaries has any liability in respect of
post-retirement health, medical or life insurance benefits for retired, former
or current employees of the Company or its Subsidiaries except (i) as required
to avoid excise tax under Section 4980B of the Code or (ii) for benefits
provided during any severance period pursuant to a written employment or
separation plan or agreement and that in the aggregate do not constitute a
material liability of the Company.
(g) Except
as
set forth in Section 4.16(g) of the Company Disclosure Schedule or as required
or deemed advisable by applicable Law, there has been no amendment to, written
interpretation or announcement (whether or not written) by the Company or any
of
its Affiliates relating to, or change in employee participation or coverage
under, an Employee Plan which would increase the expense of maintaining such
Employee Plan above the level of the expense incurred in respect thereof for
the
fiscal year ended December 31, 2006 by an amount that would reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse
Effect.
(h) For
purposes of this Agreement:
“ERISA”
means the Employee Retirement Income Security Act of 1974.
“ERISA
Affiliate” of any entity means any other entity that, together with
such entity, would be treated as a single employer under Section 414 of the
Code.
(i) no
notice,
notification, demand, request for information, citation, summons or order has
been received, no complaint has been filed, no penalty has been assessed, and
no
investigation, action, claim, suit, proceeding or review is pending or, to
the
knowledge of the Company, is threatened by any Governmental Authority or other
Person relating to the Company or any of its Subsidiaries and relating to or
arising out of any alleged violation of or liability under any Environmental
Law
or
22
Environmental
Permit, or seeking costs, damages, fines, penalties or injunctive relief
relating to any Hazardous Substance;
(ii) the
Company and its Subsidiaries have all required Environmental Permits and are
and
have been in compliance with all Environmental Laws and Environmental Permits;
and
(iii) there
are
no liabilities or obligations of the Company or any of its Subsidiaries of
any
kind whatsoever, whether accrued, contingent, absolute, determined, determinable
or otherwise, arising under or relating to any Environmental Law, Environmental
Permit or any Hazardous Substance.
(b) There
has
been no material environmental site investigation, environmental report or
other
written environmental analysis that is in the possession or control of the
Company or any of its Subsidiaries in relation to the current or former business
of, or any property or facility now or previously owned, leased or operated
by,
the Company or any of its Subsidiaries that has not been provided to Parent
at
least five Business Days prior to the date hereof.
(c) Neither
the Company nor any of its Subsidiaries owns, leases or operates or has owned,
leased or operated any real property, or conducts or has conducted any
operations, in New Jersey or Connecticut. The consummation of the
transactions contemplated hereby require no filings to be made or actions to
be
taken pursuant to any Environmental Law or Environmental Permit.
(d) For
purposes of this Section 4.17, the terms “Company” and
“Subsidiaries” shall include any entity that is, in whole
or in
part, a predecessor of the Company or any of its Subsidiaries, and for purposes
of this Agreement
“Environmental
Laws” means any Law, permit requirement, judgment, injunction, order or
decree of, or agreement with, any Governmental Authority or other third party
relating to the protection of the environment, employee health and safety or
pollutants, contaminants or otherwise hazardous substances, wastes or materials,
including exposure thereto.
“Environmental
Permits” means all permits, licenses, franchises, certificates,
approvals and other similar authorizations of or from Governmental Authorities
relating to or required by Environmental Laws and affecting, or relating to,
the
business of the Company or any of its Subsidiaries as currently
conducted.
“Hazardous
Substance” means any pollutant, contaminant or chemical or any toxic,
radioactive, ignitable, corrosive, reactive or otherwise hazardous substance,
waste (including infectious and medical waste) or material, or any substance,
waste or material having any constituent elements displaying any of
23
the
foregoing characteristics, listed, defined or regulated under any Environmental
Law.
Section
4.18 . Material
Contracts. Except as set forth in the Filed SEC Documents,
neither the Company nor any of its Subsidiaries is a party to or bound by any
“material contract” (as such term is defined in item 601(b)(10) of Regulation
S-K of the SEC) (all such contracts, the “Material
Contracts”).
True
and
complete copies of all such Material Contracts and all amendments to or waivers
thereunder have been made available by the Company to Parent. Except
for breaches, violations or defaults which would not reasonably be expected
to
have, individually or in the aggregate, a Company Material Adverse Effect,
(a)
each of the Material Contracts is valid and in full force and effect and (b)
neither the Company nor any of its Subsidiaries, nor to the Company’s knowledge
any other party to a Material Contract, has violated any provision of, or taken
or failed to take any act which, with or without notice or lapse of time or
both, would constitute a default under the provisions of such Material Contract,
and neither the Company nor any of its Subsidiaries has received notice that
it
has breached, violated or defaulted under any Material
Contract. Other than exclusive distributor arrangements entered into
in the ordinary course of business consistent with past practice, and except
as
would not, individually or in the aggregate, reasonably be expected to have
a
Company Material Adverse Effect or a material adverse effect on the operations
of Parent and its Subsidiaries, neither the Company nor any of its Subsidiaries
is party to any agreement or arrangement that limits or otherwise restricts
the
ability of the Company or any of its Subsidiaries (or, after the consummation
of
the Offer or the Merger, Parent, the Company or any of their respective
Subsidiaries or any successor thereto) to engage or compete in any line of
business, in any location or with any Person.
Section
4.19. Intellectual
Property. (a) For purposes of this Agreement,
“Intellectual
Property” means all U.S. and foreign (i) patents and all proprietary
rights associated therewith, (ii) trademarks, service marks, trade names, trade
dress, domain names, brand names, certification marks, corporate names and
other
indications of origin, together with all goodwill related to the foregoing,
(iii) copyrights and designs and all rights associated therewith and the
underlying works of authorship, (iv) all inventions, trade secrets, processes,
formulae, methods, schematics, drawings, blue prints, technology, know-how,
software, discoveries, ideas and improvements, (v) all registrations of any
of
the foregoing and all applications therefor and (vi) other proprietary or
confidential information and materials.
“Company
Intellectual Property” means all Intellectual Property that is owned or
exclusively licensed by the Company or any of its Subsidiaries, and includes
without limitation all of the Company Registered Intellectual Property as
defined below.
24
(b) Except
as
set forth in Section 4.19(b) of the Company Disclosure Schedule or as would
not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect: (i) the Company and its Subsidiaries own, or otherwise
possess legally enforceable rights to use all Intellectual Property necessary
to
conduct the business of the Company and its Subsidiaries as currently conducted
(the “Necessary Intellectual Property”), (ii) the execution and
delivery of this Agreement by the Company and the consummation of the
transactions contemplated by this Agreement will not alter, encumber, impair
or
extinguish any Necessary Intellectual Property or any of the Company and its
Subsidiaries’ material rights therein, other than with respect to off the shelf
software that is commercially available on nondiscriminatory pricing terms
(“Off-the-Shelf Software”), (iii) there is no claim, action,
suit, investigation or proceeding pending or, to the knowledge of the Company,
threatened against the Company or any of its Subsidiaries (A) challenging or
seeking to deny or restrict the rights of the Company or any of its Subsidiaries
in any Necessary Intellectual Property, or (B) alleging that any services
provided, processes used or products manufactured or sold by or on behalf of
the
Company or any of its Subsidiaries infringe, violate or otherwise misappropriate
any Intellectual Property right of any third party, or that the Company or
any
of its Subsidiaries have done so within the past two years, (iv) there are
no
restrictions on the disclosure, use, license or transfer by the Company of
the
Company Intellectual Property or the Necessary Intellectual Property and (v)
no
third party has been granted any current or contingent license or immunity
to
sell, license or otherwise distribute products or services utilizing the Company
Intellectual Property.
(c) Section
4.19(c) of the Company
Disclosure Schedule lists all material (i) patents and patent applications,
(ii)
trademark, trade name and service xxxx registrations (including Internet domain
name registrations) and applications therefor and (iii) copyright registrations
and applications included in the Company Intellectual Property (collectively,
“Company Registered Intellectual Property”). All
applications for Company Registered Intellectual Property are without challenge,
all registrations of Company Registered Intellectual Property are in force,
and
all annuity, maintenance, renewal and other fees that have become due relating
to any Company Registered Intellectual Property have been properly paid in
accordance with all applicable requirements. Except as would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect, the Company and its Subsidiaries are the sole and
exclusive owners of the Company Intellectual Property (excluding Intellectual
Property that is licensed exclusively by the Company or any of its
Subsidiaries), free and clean of any Liens.
(d) Except
as
set forth in Section 4.19(d) of the Company Disclosure Schedule or as would not, individually or
in the
aggregate, reasonably be expected to have a Company Material Adverse Effect,
none of the Company Intellectual Property has been adjudged (by consent
or otherwise) invalid, unenforceable, not owned solely by the Company, or not
infringed; and no claims with respect to
25
Company
Intellectual Property are pending, or to the knowledge of the Company,
threatened by any Person challenging the ownership, validity, enforceability
or
effectiveness of any of the Company Intellectual Property.
(e) The
Company and its Subsidiaries have used reasonable commercial efforts to maintain
the confidentiality of all material Company Intellectual Property the value
of
which is contingent upon maintaining the confidentiality
thereof. Except as set forth in Section 4.19(e) of the Company
Disclosure Schedule, to the knowledge of the Company, no such Intellectual
Property has been disclosed other than to employees, representatives and agents
all of whom are bound by written confidentiality agreements. Except
as would not, individually or in the aggregate, reasonably be expected to have
a
Company Material Adverse Effect, the Company and its Subsidiaries have
appropriate procedures in place designed to provide that all Intellectual
Property conceived by their employees as a result of performing their duties
for
the Company and its Subsidiaries and third parties performing research and
development for them have been assigned or are required to be assigned to the
Company or any of its Subsidiaries. To the knowledge of the Company,
the Company and its Subsidiaries are in material compliance with all
confidentiality agreements and other protective agreements to which they are
a
party that protect the Intellectual Property of third parties.
(e) To
the
knowledge of the Company, no party
other than the Company or its Subsidiaries possesses any current or contingent
rights to any material source code that is part of the Company Intellectual
Property.
(f) To
the
knowledge of the Company, no third party is infringing any Company Intellectual
Property in a manner that materially impairs the enforceability of such Company
Intellectual Property.
Section
4.20. Finders’
Fees. Except
for (a) Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated and Xxxxxxx, Sachs & Co. (the
“Company Financial Advisors”) and (b) P&M Corporate
Finance, LLC, there is no investment banker, broker, finder or other
intermediary that has been retained by or is authorized to act on behalf of
the
Company or any of its Subsidiaries who is entitled to any fee or commission
from
the Company or any of its Affiliates in connection with the transactions
contemplated by this Agreement. The aggregate amount of all such fees
or commissions does not exceed the amount set forth in Section 4.20 of the
Company Disclosure Schedule.
Section
4.21. Opinion
of Financial Advisors. The Board of Directors has received
opinions of the Company Financial Advisors to the effect that, as of the date
of
such opinions, the consideration to be paid in the Offer and the Merger is
fair,
from a financial point of view, to the holders of the Shares.
Section
4.22. Anti-takeover
Statutes and Rights Agreement. (a) Assuming that neither Parent
nor any of its Affiliates is an “interested stockholder” (as
26
defined
in
Section 203 of Delaware Law) as of immediately prior to the execution and
delivery of this Agreement, the Company has taken all action necessary to exempt
the Offer, the Merger, this Agreement and the transactions contemplated hereby
from the restrictions on business combinations of Section 203 of Delaware Law
and, to the extent permissible under applicable Law, all provisions of Sections
10-2721 to 10-2727 and Sections 10-2741 to 10-2743 of the Arizona Revised
Statutes that apply or purport to apply to the Offer, the Merger, this Agreement
and the transactions contemplated hereby. To the knowledge of the
Company, except for Section 203 of Delaware Law and such provisions of the
Arizona Revised Statutes, no other “control share acquisition,” “fair price,”
“moratorium” or other anti-takeover laws enacted under U.S. state or federal
laws apply to this Agreement or any of the transactions contemplated
hereby.
(a) The
Company has taken all action necessary to render the rights (the
“Company Rights”) issued pursuant to the Rights Agreement dated
as of May 6, 1998, between the Company and Xxxxx Fargo Bank, N.A. (as successor
to Norwest Bank Minnesota, N.A.) (the “Rights Agreement”)
inapplicable to the Offer, the Merger, this Agreement and the transactions
contemplated hereby.
ARTICLE
5
REPRESENTATIONS
AND WARRANTIES OF PARENT
Parent
represents and warrants to the Company that:
27
Authority,
other than (a) the filing of a certificate of merger (or certificate of
ownership and merger) with respect to the Merger with the Delaware Secretary
of
State, (b) compliance with any applicable Antitrust Laws, (c) compliance with
any applicable requirements of the 1934 Act or any other U.S. state or federal
securities laws and (d) any actions or filings the absence of which would not
reasonably be expected to have, individually or in the aggregate, a Parent
Material Adverse Effect.
28
(b) The
Schedule TO, when amended and filed in accordance with this Agreement, and
the
Offer Documents, when distributed or disseminated in accordance with this
Agreement, will comply as to form in all material respects with the applicable
requirements of the 1934 Act and, at the time of such filing, at the time of
such distribution or dissemination and at the time of consummation of the Offer,
will not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading;
provided that this representation and warranty will not apply to
statements or omissions in the Schedule TO and the Offer Documents based upon
information furnished to Parent or Merger Subsidiary in writing by the Company
specifically for inclusion or incorporation by reference therein.
Section
5.08. Operations
of Merger Subsidiary. Merger Subsidiary is an indirect, wholly
owned Subsidiary of Parent that was formed solely for the purpose of engaging
in
the Offer, the Merger and the transactions contemplated by this Agreement,
and
Merger Subsidiary has engaged in no business activity, has conducted no
operations and has incurred no liability, other than in connection with the
Offer, the Merger and the transactions contemplated by this
Agreement.
ARTICLE
6
COVENANTS
OF THE COMPANY
The
Company agrees that:
Section
6.01. Conduct
of the Company. From the date hereof until the earlier of the
Acceptance Date or termination of this Agreement in accordance with its terms,
except as (i) required by applicable Laws, (ii) contemplated by this Agreement,
or (iii) set forth in Section 6.01 of the Company Disclosure Schedule, the
Company shall, and shall cause each of its Subsidiaries to, use their respective
reasonable best efforts to conduct their businesses in all material respects
in
the
29
ordinary
course consistent with past practices and use their respective reasonable best
efforts to (A) preserve intact their present business organizations, (B) keep
available the services of their officers, employees and consultants, and (C)
maintain relationships with their customers, suppliers and others having
significant business relationships with them. Without limiting the
generality of the foregoing, except as (x) required by applicable Law, (y)
contemplated by this Agreement, or (z) set forth in Section 6.01 of the Company
Disclosure Schedule, without Parent’s prior written consent (which consent shall
not be unreasonably withheld or delayed), the Company shall not, nor shall
it
permit any of its Subsidiaries to:
(a) amend
its
articles of incorporation, bylaws or other similar organizational documents
(whether by merger, consolidation or otherwise);
(b) split,
combine or reclassify any shares of its capital stock or 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 except for dividends
payable by any wholly-owned Subsidiaries of the Company, or redeem, repurchase
or otherwise acquire or offer to redeem, repurchase or otherwise acquire any
Company Securities or any Company Subsidiary Securities;
(c) (i)
issue,
sell or otherwise deliver, or authorize the issuance, sale or other delivery
of,
any Company Securities or Company Subsidiary Securities, other than (A) the
issuance of Shares upon the exercise of Company Stock Options that were
outstanding on January 20, 2008 in accordance with the terms of those options
on
such date and (B) the issuance by any direct or indirect wholly-owned Subsidiary
of the Company of Company Subsidiary Securities to the Company or to another
direct or indirect wholly owned Subsidiary of the Company, or the purchase
of
Shares pursuant to the Company ESPP in accordance with its terms as in effect
on
the date hereof or (ii) amend any term of any Company Security or any Company
Subsidiary Security (whether by merger, consolidation or
otherwise);
(d) incur
any
capital expenditures or any obligations or liabilities in respect thereof,
except for (i) those contemplated by the capital expenditure budget attached
to
Section 6.01 of the Company Disclosure Schedule, (ii) any unbudgeted capital
expenditures in an amount not to exceed $2 million individually or $10 million
in the aggregate incurred in the ordinary course of business consistent with
past practices or in connection with the Company’s current build out at its
Tucson, Arizona campus and (iii) capital expenditures incurred in the ordinary
course of business consistent with past practices in connection with placement
of field assets at customer sites;
(e) make
any
loans, advances or capital contributions to, or investments in, any other Person
except for loans, advances and capital contributions in the ordinary course
of
business consistent with past practices;
30
(f) acquire
any material assets or property other than capital expenditures permitted
pursuant to Section 6.01(d) and purchases of inventory and supplies in the
ordinary course of business consistent with past practices;
(g) except
as
permitted pursuant to Section 6.01(h), sell, lease, license or otherwise
transfer any material assets or property other than sales of products of the
Company and its Subsidiaries or third parties for whom the Company and its
Subsidiaries act as resellers in the ordinary course of business consistent
with
past practices;
(h) sell,
assign, license or otherwise transfer any Necessary Intellectual Property or
Company Intellectual Property (or any rights therein) or acquire any material
Intellectual Property other than in the ordinary course of business consistent
with past practices;
(i) incur,
guaranty or otherwise become liable for any indebtedness for borrowed money
other than in the ordinary course of business consistent with past practices,
other than indebtedness existing solely between the Company and its wholly
owned
Subsidiaries or between such wholly owned Subsidiaries;
(j) except
as
permitted pursuant to Sections 6.01(g) or 6.01(h), create or incur any material
Lien on any material assets or property;
(k) enter
into
any agreement or arrangement that limits or otherwise restricts in any material
respect the Company or any of its Subsidiaries or any successor thereto or
that
could, after the consummation of the Offer or the Merger, limit or otherwise
restrict in any material respect Parent, the Company or any of their respective
Affiliates or any successor thereto, from engaging or competing in any line
of
business, in any location or with any Person;
(l) amend,
modify or waive in any material respect or terminate any Material Contract
or
enter into any agreement that would constitute a Material Contract if entered
into as of the date hereof except in the ordinary course of business consistent
with past practices;
(m) except
as
required by the terms of an applicable plan or agreement in effect on the date
hereof or as required or deemed advisable pursuant to applicable Law, (i)
increase compensation, bonuses or other benefits payable to any director or
executive officer or, except in the ordinary course of business consistent
with
past practices, any other employee of the Company or any of its Subsidiaries
or
(ii) enter into, adopt or amend in any material respect any employment, change
of control, severance, compensation, bonus, profit-sharing, stock option or
other stock related rights or other forms of incentive or deferred compensation,
retirement benefits or other benefit agreement, plan, arrangement or policy
applicable to any director or executive officer or, except in the ordinary
course of business consistent with past practices, any other employee of the
Company or any of its Subsidiaries;
31
(n) (i)
settle, or propose to settle, any litigation, investigation, arbitration,
proceeding or claim that is material to the Company and its Subsidiaries taken
as a whole or that relates to the transactions contemplated hereby, or (ii)
waive, release or assign any material rights or claims;
(o) materially
change the Company’s methods of accounting, except as required by concurrent
changes in GAAP or by applicable Law, as agreed to by its independent public
accountants;
(p) except
as
may be required by Law, make or change any material Tax election, change any
annual Tax accounting period, adopt or change any method of Tax accounting,
materially amend any Tax Returns or file claims for material Tax refunds, enter
into any material closing agreement, settle any material Tax claim, audit or
assessment, or surrender any right to claim a material Tax refund, offset or
other reduction in Tax liability; or
(q) resolve,
commit or agree to do any of the foregoing.
Section
6.02. Stockholder
Meeting;
Proxy Material. If required by Delaware Law to consummate the
Merger, the Company shall cause a meeting of its stockholders (the
“Company Stockholder Meeting”) to be duly called and held as
soon as reasonably practicable after the Acceptance Date for the purpose of
voting on the adoption of this Agreement; provided that the Company
shall not be required to mail the Company Proxy Statement or any other proxy
materials relating to the vote of the Company’s stockholders with respect to the
adoption of this Agreement prior to the Acceptance Date. Subject to
Section 6.04(b), the Company Board Recommendation shall be included in the
Company Proxy Statement. In connection with such meeting, the Company
shall, following the Acceptance Date, (a) promptly prepare and file with the
SEC, use its reasonable best efforts to have cleared by the SEC and thereafter
mail to its stockholders as promptly as practicable the Company Proxy Statement
and all other proxy materials required by Law for such meeting, (b) use its
reasonable best efforts to obtain the Company Stockholder Approval and (c)
otherwise comply with all legal requirements applicable to such
meeting.
Section
6.03. Access
to
Information. From the date hereof until the Effective Time, the
Company shall (a) provide Parent, its counsel, financial advisors, auditors
and
other authorized representatives reasonable access to the properties, offices
and books and records of the Company and its Subsidiaries and such financial
and
operating data and other information as such Persons may reasonably request
and
(b) instruct the employees, counsel, financial advisors, auditors and other
authorized representatives of the Company and its Subsidiaries to cooperate
with
Parent in its investigation of the Company and its Subsidiaries. Any
investigation pursuant to this Section 6.03 shall comply with applicable Law
and
be conducted during business hours and in such manner so as not to interfere
unreasonably with the conduct of the business of the Company and its
Subsidiaries. No information or knowledge obtained by Parent in any
32
investigation
pursuant to this Section 6.03 shall affect or be deemed to modify any
representation or warranty made by the Company hereunder. Nothing in
this Section 6.03 shall require the Company (i) to permit any inspection, or
to
disclose any information, that in the reasonable judgment of the Company would
result in the disclosure of any trade secrets of third Persons or violate any
of
the Company’s obligations with respect to confidentiality, (ii) to disclose any
privileged information of the Company or any of its Subsidiaries, (iii) to
disclose any information the disclosure of which could, in the reasonable
judgment of the Company, cause significant competitive harm to the Company
if
the transactions contemplated hereby are not consummated or (iv) to permit
invasive testing of any of the Company’s or its Subsidiaries’ real
property. In no event shall the Company be required to supply
pursuant to this Section 6.03 to Parent, or Parent’s representatives, any
information relating to indications of interest from, or discussions with,
any
other potential acquirers of the Company, with respect to which Section 6.04
shall apply. All requests for access to the offices or books and
records of the Company or its Subsidiaries shall be made to such representatives
of the Company as the Company shall designate, who shall be solely responsible
for coordinating all such requests and all access permitted
hereunder. All information disclosed by the Company to Parent and its
representatives pursuant hereto shall be subject to the terms of the
Confidentiality Agreement (the “Confidentiality Agreement”)
dated November 13, 2007 between the Company and Roche Holding Ltd, a joint
stock
company organized under the laws of Switzerland
(“Holding”).
(i)
solicit, initiate or knowingly take any action to encourage or
facilitate the making of an Acquisition Proposal,
(ii)
participate in any discussions or negotiations with or furnish any information
with respect to the Company or any of its Subsidiaries to any third party in
connection with an Acquisition Proposal,
(iii)
take any action to render the Company Rights or Section 203 of Delaware Law
inapplicable to any transaction included in the definition of Acquisition
Proposal or grant any waiver or release under any standstill or similar
agreement with respect to any class of equity securities of the Company or
any
of its Subsidiaries, or
33
(iv)
approve or enter into any agreement (including an agreement in principle,
letter of intent, term sheet or other similar instrument) with respect to an
Acquisition Proposal.
Notwithstanding
the foregoing, if at any time prior to the Acceptance Date, the Company receives
a bona fide written Acquisition Proposal that was not solicited on or
after the date of this Agreement, (1) the Company and Company Representatives
may contact the third party or parties making such Acquisition Proposal solely
for the purpose of clarifying the terms and conditions thereof and (2) if the
Board of Directors determines in good faith (after considering the advice of
its
outside legal and financial advisors) that such Acquisition Proposal is or
could
be reasonably expected to result in a Superior Proposal, the Company
may:
(x)
subject to entering into a confidentiality agreement with terms no less
favorable in the aggregate in any material respect to the Company than those
contained in the Confidentiality Agreement, furnish information (including
non-public information) with respect to the Company or any of its Subsidiaries
to the third party or parties that made such Acquisition Proposal and
participate in discussions or negotiations with respect to such Acquisition
Proposal; provided that (i) the Company shall notify Parent promptly
(but in no event later than 24 hours) after receipt of any Acquisition Proposal
or any request for information with respect to the Company or any of its
Subsidiaries by a third party or parties that has made or is considering making
an Acquisition Proposal or any indication that a third party is considering
making an Acquisition Proposal (such notice to identify the third party and
contain the material terms and conditions of any such proposal, request or
indication); (ii) the Company shall keep Parent informed, on a prompt basis,
of
the status of, and any material changes in any such proposal, request or
indication; and (iii) the Company shall promptly provide to Parent any material
information furnished to the third party that has not previously been provided
by Parent; and
(y)
approve and enter into a definitive agreement with respect to a Superior
Proposal and take any actions listed in Section 6.04(a)(iii) or 6.04(a)(iv),
as
applicable; provided that (i) the Company shall have complied in all
material respects with the provisions of this Section 6.04; (ii) the Company
shall have notified Parent in writing that the Board of Directors has determined
that the Acquisition Proposal is a Superior Proposal and intends, subject to
clause (iii) below, to enter into such a definitive agreement with respect
to
the Superior Proposal and to terminate this Agreement and attaching the most
current version of such agreement (or a summary containing all the material
terms and conditions thereof and identifying the third party that has made
such
proposal); (iii) Parent does not make, within three Business Days after receipt
of such written notice, an offer that the Board of Directors shall have
concluded in good faith (after considering the advice of its outside legal
and
financial advisors) causes such Acquisition Proposal to cease to be a Superior
Proposal (it being understood that the Company shall not enter into an agreement
with respect to the Superior Proposal during such three Business Day period)
and
(iv) the Company shall,
34
concurrently
with entering into such definitive agreement, terminate this Agreement and
pay
the Termination Fee contemplated by Section 11.04(b).
(b) The
Board
of Directors shall not fail to make, withdraw or modify in a manner adverse
to
Parent the Company Board Recommendation or publicly recommend or announce its
intention to enter into an agreement (including an agreement in principle,
letter of intent, term sheet or other similar instrument) with respect to any
Acquisition Proposal or otherwise take any action or make any statement
inconsistent with the Company Board Recommendation (collectively, an
“Adverse Recommendation Change”). Notwithstanding
the foregoing, at any time prior to the Company Stockholder Approval the Board
of Directors may make an Adverse Recommendation Change if the Board of Directors
determines in good faith (after considering the advice of its outside legal
and
financial advisors) that the failure to take such action would be inconsistent
with its fiduciary duties under Delaware Law.
(c) It
is
understood and agreed that any “stop, look and listen” communication pursuant to
Rule 14d-9(f) under the 1934 Act or other factually accurate public statement
by
the Company that, in each case, merely describes the Company’s receipt of an
Acquisition Proposal and the operation of this Agreement with respect thereto
and reaffirms the Company Board Recommendation shall not be deemed to be an
Adverse Recommendation Change. Nothing in this Section 6.04 or
elsewhere in this Agreement shall prevent the Board of Directors from disclosing
any information required to be disclosed under applicable Law or from complying
with Rule 14d−9 or Rule 14e−2(a) promulgated under the 1934 Act with respect to
an Acquisition Proposal (or any similar communication to holders of Shares
in
connection with the making or amendment of a tender offer or exchange
offer). In addition, nothing in this Section 6.04 or this Agreement
shall prohibit the Company from taking any action that any court of competent
jurisdiction orders the Company to take.
(d) The
Company and its Subsidiaries shall, and shall cause their officers, directors
and employees (and the Company and its Subsidiaries shall use their respective
reasonable best efforts to cause their respective counsel, financial advisors,
auditors, consultants and other agents and representatives) to cease immediately
and cause to be terminated any and all existing activities, discussions or
negotiations, if any, with any third party conducted prior to the date hereof
with respect to any Acquisition Proposal. The Company shall promptly
request that each third party, if any, that has executed a confidentiality
agreement in connection with a possible Acquisition Proposal return or destroy
all confidential information heretofore furnished to such Person by or on behalf
of the Company or any of its Subsidiaries (and all analyses and other materials
prepared by or on behalf of such Person that contains, reflects or analyzes
that
information).
(e) For
purposes of this Agreement:
35
“Acquisition
Proposal” means any inquiry, proposal or offer from any Person or
Persons (other than Parent and its Affiliates) relating to any (i) acquisition
of assets of the Company and its Subsidiaries (including securities of
Subsidiaries) representing 20% or more of the Company’s consolidated assets or
revenues, (ii) acquisition of 20% or more of the outstanding Shares, (iii)
tender offer or exchange offer that if consummated would result in any Person
beneficially owning 20% or more of the outstanding Shares or (iv) merger,
consolidation, share exchange, business combination, recapitalization,
reorganization, liquidation, dissolution or similar transaction involving the
Company, in each case, other than the transactions contemplated by this
Agreement.
“Superior
Proposal” means any Acquisition Proposal (with all percentages in the
definition of “Acquisition Proposal” changed to 50%) on terms that the Board of
Directors determines in good faith (after considering the advice of its outside
legal and financial advisors and taking into account all the terms and
conditions of the Acquisition Proposal) is reasonably likely to be capable
of
consummation and is more favorable to the Company’s stockholders than the Offer
and the Merger (after giving effect to any subsequent offer made by Parent
in
response to such Superior Proposal).
ARTICLE
7
COVENANTS
OF PARENT
Parent
agrees that:
(i) for
six
years after the Effective Time, indemnify and hold harmless the current and
former officers, directors, employees and employee benefit plan fiduciaries
of
the Company or any of its Subsidiaries (each, an “Indemnified
Person”) in respect of acts, omissions or events occurring at or prior
to the Effective Time to the
36
fullest
extent (A) provided in the certificate of incorporation or bylaws of the Company
or the organizational documents of any Subsidiary of the Company, as applicable,
or (B) permitted by applicable Law, in each case as in effect on the date of
this Agreement;
(ii) for
six
years after the Effective Time, unless otherwise required by applicable Law,
cause the Surviving Corporation’s and each of its Subsidiaries’ certificate of
incorporation and bylaws or equivalent organizational documents (or any such
documents of any successor to the business of the Surviving Corporation or
any
of its Subsidiaries) to contain provisions regarding limitations on personal
liability of directors and indemnification of, and advancement of expenses
to,
Indemnified Persons in respect of acts, omissions or events occurring at or
prior to the Effective Time that are no less advantageous to the intended
beneficiaries than the corresponding provisions in the Company’s and its
Subsidiaries’ certificate of incorporation and bylaws or equivalent
organizational documents, in each case, as in effect on the date of this
Agreement; provided that if any claim is asserted against any
individual entitled to the protections of such provisions within such six-year
period, such provisions shall not be modified until the final disposition of
any
such claims;
(iii) honor
all
obligations of the Company to each Indemnified Person (including rights relating
to advancement of expenses and indemnification rights to which such Indemnified
Persons are entitled because they are serving as a director, officer, agent
or
employee of another Person at the request of the Company or any of its
Subsidiaries) in respect of acts, omissions or events occurring at or prior
to
the Effective Time to the fullest extent provided in any indemnification
agreements to which the Company or any Subsidiary of the Company is a party
as
of the date hereof, in each case, as in effect on the date of this
Agreement;
(iv) either
(A)
continue to maintain in effect for six years after the Effective Time the
Company’s directors’ and officers’ insurance policies and fiduciary liability
insurance policies (collectively, the “D&O Insurance”) in
place as of the date hereof with terms, conditions, retentions and limits of
liability that are at least as favorable as those contained in the Company’s
D&O Insurance policies in effect as of the date hereof or (B) purchase
comparable D&O Insurance for such six-year period with terms, conditions,
retentions and limits of liability that are at least as favorable as those
contained in the Company’s D&O Insurance policies in effect as of the date
hereof; provided that if the aggregate cost for such insurance coverage
exceeds 300% of the current annual premium paid by the Company (which current
annual premium amount is set forth in Section 7.03(a)(iv) of the Company
Disclosure Schedule), the Surviving Corporation shall be obligated to obtain
D&O Insurance with the best available coverage with respect to matters
occurring at or prior to the
37
Effective
Time for an aggregate cost of 300% of the current annual premium;
and
(v) if
Parent
or the Surviving Corporation or any of their respective successors or assigns
(A) consolidates with or merges into any other Person and is not the continuing
or surviving entity, (B) ceases to continue to exist for any reason, or (C)
transfers or conveys all or substantially all of its properties and assets
to
any Person, then, and in each such case, to the extent necessary, ensure 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
7.03.
(b) Any
determination required to be made with respect to whether the conduct of an
Indemnified Person who is or was an officer or director of the Company complies
with the standards set forth under applicable Law, the certificate of
incorporation or bylaws of the Surviving Corporation or any indemnification
agreement to which the Company is a party as of the date hereof, as the case
may
be, shall be made by independent legal counsel jointly selected by such
Indemnified Person and Parent.
(c) Nothing
in
this Section 7.03 shall impair any rights of any Indemnified Person, and without
limiting the generality of the foregoing, if any Indemnified Person who is
or
was an officer or director of the Company becomes involved in any actual or
threatened action, suit, claim, proceeding or investigation covered by this
Section 7.03 after the Effective Time, Parent shall, or shall cause the
Surviving Corporation to, to the fullest extent permitted by applicable Law,
promptly advance to such Indemnified Person such Indemnified Person’s legal or
other expenses (including the cost of any investigation and preparation incurred
in connection therewith), subject to the providing by such Indemnified Person
of
an undertaking to reimburse all amounts so advanced in the event of a
non-appealable determination of a court of competent jurisdiction that such
Indemnified Person is not entitled thereto.
(d) The
rights
of each Indemnified Person under this Section 7.03 shall be in addition to
(and
not in substitution for) any other rights such Indemnified Person may have
under
the certificate of incorporation or bylaws of the Company or equivalent
organizational documents of any of its Subsidiaries, Delaware Law, any agreement
with the Company or any of its Subsidiaries or otherwise and are intended for
the benefit of and shall be enforceable by such Indemnified Person and such
Indemnified Person’s heirs, executors or similar representatives. The
rights under this Section 7.03 shall survive consummation of the Merger and
shall not be amended in a manner that is adverse to the Indemnified Persons
without the consent of the Indemnified Persons affected thereby.
Section
7.04. Employee
Matters. (a) For a period of one year following the Effective
Time, Parent shall provide to all employees of the Company or any of its
Subsidiaries as of the Effective Time who continue employment with the
38
Surviving
Corporation or any of its Affiliates (“Continuing Employees”)
with compensation and benefits that are in the aggregate substantially
equivalent to compensation and benefits provided by the Company and its
Subsidiaries as in effect immediately prior to the Acceptance Date.
(b) Parent
shall ensure that, as of the Effective Time, each Continuing Employee receives
full credit for all purposes (other than the accrual of benefits under a defined
benefit pension plan) for service with the Company or any of its Subsidiaries
(or predecessor employers to the extent the Company provides such past service
credit) under the comparable employee benefit plans, programs and policies
of
Parent, the Surviving Corporation or any Affiliate of the Surviving Corporation,
as applicable, in which such employee becomes a participant. With
respect to each health or other welfare benefit plan maintained by Parent or
the
Surviving Corporation or any Affiliate of the Surviving Corporation, as
applicable, for the benefit of any Continuing Employees, Parent shall (i) cause
to be waived any waiting period requirements, insurability requirements and
the
application of any pre-existing condition limitations under such plan and (ii)
cause each Continuing Employee to be given credit under such plan for all
amounts paid by such Continuing Employee under any similar Company benefit
plan
for the plan year in which such participation commences for purposes of applying
deductibles, co-payments and out-of-pocket maximums as though such amounts
had
been paid in accordance with the terms and conditions of the plans maintained
by
Parent, the Surviving Corporation or such Affiliate, as applicable, for such
plan year. In addition, Parent shall implement, or cause its
appropriate Affiliates to implement, the additional arrangements agreed upon
by
Parent and the Company.
(c) Parent
shall cause the Surviving Corporation to assume and honor in accordance with
their terms all written employment, change of control, severance, retention
or
termination agreements applicable to any employee of the Company or any of
its
Subsidiaries.
ARTICLE
8
COVENANTS
OF PARENT AND THE COMPANY
The
parties hereto agree that:
39
authorization
or approval of any private third Person required to be obtained by Parent,
Merger Subsidiary or the Company or any of their respective Subsidiaries in
connection with the transactions contemplated by this Agreement, (iv) using
reasonable best efforts to prevent the entry of any judgment, injunction, order
or decree that would prohibit the consummation of the Offer or the Merger and
(v) taking any other actions by or with respect to any Governmental Authority
or
other third party that are necessary, proper or advisable to consummate the
transactions contemplated by this Agreement.
(b) In
furtherance and not in limitation of the foregoing, each of Parent and the
Company shall make an appropriate filing pursuant to any applicable Antitrust
Laws with respect to the transactions contemplated hereby as promptly as
practicable, and supply as promptly as practicable any additional information
or
documents that may be requested and use reasonable best efforts to cause the
expiration or termination of any applicable waiting periods or the taking of
any
other actions by or with respect to such Antitrust Laws as soon as
practicable.
40
and
deliver, in the name and on behalf of the Company or Merger Subsidiary, any
deeds, bills of sale, assignments or assurances and to take and do, in the
name
and on behalf of the Company or Merger Subsidiary, any other actions and things
to vest, perfect or confirm of record or otherwise in the Surviving Corporation
any and all right, title and interest in, to and under any of the rights,
properties or assets of the Company acquired or to be acquired by the Surviving
Corporation as a result of, or in connection with, the Merger.
Section
8.06. Section
16 Matters. Prior to the Effective Time, the Company shall take
all such steps as may be required to cause any disposition of Shares in the
Merger (including derivative securities with respect to such Shares) by each
individual who is subject to the reporting requirements of Section 16(a) of
the
1934 Act with respect to the Company to be exempt under Rule 16b-3 promulgated
under the 1934 Act.
Section
8.07. Notices
of Certain Events. Subject to applicable Law, each of the
Company and Parent shall promptly notify the other of:
(a) any
notice
or other communication received by the Company or any of its Subsidiaries or
Parent or any of its Affiliates from any Person alleging that the consent of
such Person is or may be required in connection with the transactions
contemplated by this Agreement;
(b) any
notice
or other communication received by the Company or any of its Subsidiaries or
Parent or any of its Affiliates from any Governmental Authority that relate
to
the transactions contemplated by this Agreement; and
(c) any
actions, suits, investigations or proceedings commenced or, to its knowledge,
threatened against the Company or any of its Subsidiaries or Parent or any
of
its Affiliates that relate to the consummation of the transactions contemplated
by this Agreement.
Section
8.08. Takeover
Statutes. If any “fair price,” “moratorium,” “control share
acquisition” or other similar anti-takeover statute or regulation shall become
applicable to the transactions contemplated hereby, each of the Company, Parent
and Merger Subsidiary and the respective members of their boards of directors
shall, to the extent permitted by applicable Law, use reasonable best efforts
to
grant such approvals and take such actions as are necessary so that the
transactions contemplated by this Agreement may be consummated as promptly
as
practicable on the terms contemplated herein and
41
otherwise
act to eliminate or minimize the effects of such statute or regulation on the
transactions contemplated hereby.
Section
8.09. Litigation. (a)
Each of the parties shall promptly enter into stipulations staying all
litigation currently pending between them or their respective Affiliates and
representatives, or commenced by or on behalf of any of them in connection
with
the Offer, and the parties shall cause such stipulations to be filed promptly
after the date of this Agreement. Each of the parties shall also,
promptly following the Acceptance Date, enter into and file stipulations
dismissing with prejudice all such litigation and releasing all claims against
the other parties hereto (and their Affiliates and representatives) based on
any
action or omission that occurred prior to the date of such stipulations as
of
the date such stipulations are filed. Notwithstanding the foregoing,
if this Agreement is terminated in accordance with Section 10.01, after such
termination, nothing herein shall prevent either party (or its Affiliates or
representatives) from pursuing any such litigation or any other litigation
against any other party hereto (or its Affiliates or
representatives).
(b) The
Company shall give Parent the opportunity to participate in the defense or
settlement of any stockholder litigation that currently exists or arises after
the date of this Agreement against the Company or its directors or officers
relating to any of the transactions contemplated hereby.
Section
8.10. Transfer
Taxes. Subject to Section 2.03(c), all stock transfer, real
estate transfer, documentary, stamp, recording and other similar Taxes
(including interest, penalties and additions to any such Taxes)
(“Transfer Taxes”) incurred in connection with the transactions
contemplated hereby shall be paid by either Merger Subsidiary or the Surviving
Corporation, and the Company shall cooperate with Merger Subsidiary and Parent
in preparing, executing and filing any Tax Returns with respect to such Transfer
Taxes.
ARTICLE
9
CONDITIONS
TO THE MERGER
(a) if
required by Delaware Law, the Company Stockholder Approval shall have been
obtained;
(b) there
is
no Law or judgment, injunction, order or decree of any Governmental Authority
with, in any such case, competent jurisdiction restraining, prohibiting or
otherwise making illegal the consummation of the Merger; and
42
(c) Merger
Subsidiary shall have purchased Shares pursuant to the Offer.
Section
10.01. Termination. This
Agreement may be terminated and the Offer and/or the Merger may be abandoned
at
any time prior to the Effective Time (notwithstanding receipt of the Company
Stockholder Approval):
(a) by
mutual
written agreement of the Company and Parent;
(b) by
either
the Company or Parent, if:
(i) the
Acceptance Date has not occurred on or before May 31, 2008 (the “End
Date”); provided that the End Date shall be extended to June
30, 2008 if on May 31, 2008, none of the conditions set forth in Annex I exists
other than as a result of restrictions under applicable Antitrust Laws;
provided, further that the right to terminate this Agreement pursuant
to this Section 10.01(b)(i) shall not be available to any party whose breach
of
any provision of this Agreement results in the failure of the Acceptance Date
to
occur on or before such time; or
(ii) if
there
is a Law or final, non-appealable judgment, injunction, order or decree of
any
Governmental Authority with competent jurisdiction restraining, prohibiting
or
otherwise making illegal the consummation of the Offer or the
Merger;
(c) by
Parent,
if prior to the first acceptance for payment of Shares pursuant to the
Offer:
(i) an
Adverse
Recommendation Change shall have occurred;
(ii) the
Company shall have intentionally and materially breached its obligations under
Section 6.04 (it being understood that actions taken by officers, directors
or
employees of the Company or its Subsidiaries or Company Representatives shall
not give rise to a right to terminate the Agreement pursuant to this Section
10.01(c)(ii) so long as neither the Company nor any of its Subsidiaries has
authorized or permitted any such actions by its officers, directors or employees
and the Company and its Subsidiaries have used their respective reasonable
best
efforts to cause such Company Representatives not to take any such actions);
or
(iii) a
breach
of any representation or warranty or failure to perform any covenant or
agreement on the part of the Company set forth
43
in
this
Agreement shall have occurred that would cause the condition set forth in
clauses (b)(ii) or (b)(iii) of Annex I to exist, and such breach or failure
is
incapable of being cured by the End Date;
(d) by
the
Company, if Parent, Merger Subsidiary or any of their Affiliates shall have
breached in any material respect any of their respective representations or
warranties or failed to perform in any material respect any of their respective
covenants or agreements set forth in this Agreement or the Guarantee dated
as of
the date hereof between Holding and the Company, which breach or failure to
perform is incapable of being cured by the End Date; or
(e) by
the
Company pursuant to Section 6.04(a)(y).
The
party
desiring to terminate this Agreement pursuant to this Section 10.01 (other
than
pursuant to Section
10.01(a)) shall give notice of such termination to the other
party.
Section
10.02. Effect
of
Termination. If this Agreement is terminated pursuant
to Section 10.01, this Agreement shall become void and of no effect with no
liability on the part of any party (or any stockholder, director, officer,
employee, agent or advisor of such party) to the other party hereto;
provided that, if such termination shall result from the (a)
intentional failure of either party to fulfill a condition to the performance
of
the obligations of the other party or (b) material breach of either party to
perform a covenant hereof, such party shall be fully liable for any and all
liabilities and damages incurred or suffered by the other party as a result
of
such failure or breach. The provisions of Article 11 shall survive
any termination hereof pursuant to Section 10.01.
ARTICLE
11
MISCELLANEOUS
Section
11.01.
Notices. All
notices,
requests and other communications to any party hereunder shall be in writing
(including facsimile transmission) and shall be given,
if
to
Parent, to:
Roche
Holdings, Inc.
0000
X.
Xxxxxx Xx., Xxxxx #000
Xxxxxxxxxx,
Xxxxxxxx 00000-0000
Attention: Xxxxx
Xxxxxxxxxx
Facsimile
No.: (000) 000-0000
44
with
a
copy to:
Xxxxx
Xxxx
& Xxxxxxxx
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention: Xxxxxxxxxxx
Xxxxx
Xxxx
X.
Xxxxxxxx
Facsimile
No.: (000) 000-0000
if
to
Merger Subsidiary, to:
Rocket
Acquisition Corporation
0000
Xxxxx
Xxxx
Xxxxxxxxxxxx,
Xxxxxxx 00000
Attention: Xxxxx
X. Xxxxxx
Facsimile
No.: (000) 000-0000
with
a
copy to:
Xxxxx
Xxxx
& Xxxxxxxx
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention: Xxxxxxxxxxx
Xxxxx
Xxxx
X.
Xxxxxxxx
Facsimile
No.: (000) 000-0000
if
to the
Company, to:
Ventana
Medical Systems, Inc.
0000
X.
Xxxxxxxxxx Xxxx Xxxxx
Xxxxxx,
Xxxxxxx 00000
Attention:
Chief Executive Officer
General
Counsel
Facsimile
No.: (000) 000-0000
with
a
copy to:
Sidley
Austin LLP
0
Xxxxx
Xxxxxxxx Xxxxxx
Xxxxxxx,
Xxxxxxxx 00000
Attention: Xxxxxx
X. Xxxx
Xxxxxxxxx
X. Xxxxxxxx
Xxxxxxx
X.
Xxxxxx
Xxxxxx
X.
Xxxxxxx
Facsimile
No.: (000) 000-0000
45
and
to:
Xxxxx
& Xxxxxx LLP
One
Arizona Center
000
Xxxx
Xxx Xxxxx
Xxxxxxx,
Xxxxxxx 00000
Attention: Xxxxxx
X. Xxxxxxx
Facsimile
No.: (000) 000-0000
or
to such
other address or facsimile number as such party may hereafter specify for the
purpose by notice to the other parties hereto. All such notices,
requests and other communications shall be deemed received on the date of
receipt by the recipient thereof if received prior to 5 p.m. on a business
day
in the place of receipt. Otherwise, any such notice, request or
communication shall be deemed to have been received on the next succeeding
business day in the place of receipt.
Section
11.02. Survival
of Representations and Warranties. The representations and
warranties contained herein and in any certificate or other writing delivered
pursuant hereto shall not survive the Acceptance Date.
Section
11.03.
Amendments
and
Waivers. (a) Any provision of this Agreement may
be amended or waived prior to the Effective Time if, but only if, such amendment
or waiver is in writing and is signed, in the case of an amendment, by each
party to this Agreement or, in the case of a waiver, by each party against
whom
the waiver is to be effective; provided that, after the Company
Shareholder Approval has been obtained (if applicable), there shall be no
amendment or waiver that, under Delaware law, would require the further approval
of the stockholders of the Company without such approval.
(b) No
failure
or delay by any party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein provided shall
be cumulative and not exclusive of any rights or remedies provided by
Law.
Section
11.04. Expenses. (a) General. All
costs and expenses incurred in connection with this Agreement shall be paid
by
the party incurring such cost or expense.
(b) Termination
Fee.
(i) If
this
Agreement is terminated by Parent pursuant to Section 10.01(c)(i) or by the
Company pursuant to Section 10.01(e), then the Company shall pay to Parent
in
immediately available funds $110,000,000 (the “Termination
Fee”), in the case of a termination by
46
Parent,
within two Business Days after such termination and, in the case of a
termination by the Company, immediately before and as a condition to such
termination.
(ii) If
(A)
this Agreement is terminated by Parent or the Company pursuant to Section
10.01(b)(i), (B) after the date of this Agreement and prior to such termination,
an Acquisition Proposal shall have been publicly announced or otherwise been
communicated to the Board of Directors of the Company or its stockholders and
not withdrawn and (C) within nine months following the date of such termination,
the Company shall have entered into a definitive agreement with respect to
or
recommended to its stockholders an Acquisition Proposal or an Acquisition
Proposal shall have been consummated (provided that for purposes of
this clause (C), each reference to “20%” in the definition of Acquisition
Proposal shall be deemed to be a reference to “50%”), then the Company shall pay
to Parent in immediately available funds, concurrently with the occurrence
of
the applicable event described in clause (C), the Termination Fee.
The
Company acknowledges that the agreements contained in this Section 11.04(b)
are
an integral part of the transactions contemplated by this Agreement and that,
without these agreements, Parent and Merger Subsidiary would not enter into
this
Agreement.
(b) Each
of
Parent, Merger Subsidiary and the Company acknowledges and agrees that in the
event Parent is entitled to receive payment of the Termination Fee, the right
of
Parent to receive such amounts shall constitute Parent’s and its Affiliates’
sole and exclusive remedy for, and such amounts shall constitute liquidated
damages in respect of, any termination of this Agreement regardless of the
circumstances giving rise to such termination.
Section
11.05. Disclosure
Schedule
References and SEC Document References. (a) The parties hereto
agree that any reference in a particular Section of the Company Disclosure
Schedule shall only be deemed to be an exception to (or, as applicable, a
disclosure for purposes of) (i) the representations and warranties (or
covenants, as applicable) of the Company that are contained in the corresponding
Section of this Agreement and (ii) any other representations and warranties
of
the Company that are contained in this Agreement, but only if the relevance
of
that reference as an exception to (or a disclosure for purposes of) such
representations and warranties would be reasonably apparent to a person who
has
read that reference and such representations and warranties, without any
independent knowledge on the part of the reader regarding the matter(s) so
disclosed.
(b) The
parties hereto agree that any information contained in any part of any Filed
SEC
Document shall only be deemed to be an exception to (or a disclosure for
purposes of) the Company’s representations and warranties if the
47
relevance
of that information as an exception to (or a disclosure for purposes of) such
representations and warranties would be reasonably apparent to a person who
has
read that information concurrently with such representations and warranties,
without any independent knowledge on the part of the reader regarding the
matter(s) so disclosed; provided that in no event shall any information
contained in any part of any Filed SEC Document entitled “Risk Factors” or
containing a description or explanation of “Forward-Looking Statements” be
deemed to be an exception to (or a disclosure for purposes of) any
representations and warranties of the Company contained in this
Agreement.
Section
11.06. Binding
Effect; Benefit; Assignment. (a) The provisions of this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns. Except as
provided in Section 7.03, no provision of this Agreement is intended to confer
any rights, benefits, remedies, obligations or liabilities hereunder upon any
Person other than the parties hereto and their respective successors and
assigns.
(b) No
party
may assign, delegate or otherwise transfer any of its rights or obligations
under this Agreement without the prior written consent of each other party
hereto, except that Parent or Merger Subsidiary may transfer or assign its
rights and obligations under this Agreement, in whole or from time to time
in
part, to one or more of its Affiliates at any time; provided that such
transfer or assignment shall not relieve Parent or Merger Subsidiary of its
obligations under this Agreement or prejudice the rights of stockholders to
receive payment for Shares validly tendered and accepted for payment pursuant
to
the Offer or Shares converted into cash pursuant to the Merger.
Section
11.07. Governing
Law. This
Agreement shall be governed by and construed in accordance with the law of
the
State of Delaware, without regard to the conflicts of law rules of such
state.
Section
11.08. Jurisdiction. The
parties hereto
agree that any suit, action or proceeding seeking to enforce any provision
of,
or based on any matter arising out of or in connection with, this Agreement
or
the transactions contemplated hereby shall be brought in the Court of Chancery
of the State of Delaware in and for New Castle County, Delaware or, if such
court shall not have jurisdiction, in any federal court located in the State
of
Delaware or other Delaware state court, and each of the parties hereby
irrevocably consents to the jurisdiction of such courts (and of the appropriate
appellate courts therefrom) in any such suit, action or proceeding and
irrevocably waives, to the fullest extent permitted by law, any objection that
it may now or hereafter have to the laying of the venue of any such suit, action
or proceeding in any such court or that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient
forum. Process in any such suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court. Without limiting the foregoing, each party agrees
that service of process on
48
such
party
as provided in Section 11.01 shall be deemed effective service of process on
such party.
Section
11.09. WAIVER
OF JURY TRIAL. EACH OF THE PARTIES
HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL
PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
Section
11.10.
Counterparts;
Effectiveness. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if
the
signatures thereto and hereto were upon the same instrument. This Agreement
shall become effective when each party hereto shall have received a counterpart
hereof signed by all of the other parties hereto. Until and unless
each party has received a counterpart hereof signed by the other party hereto,
this Agreement shall have no effect and no party shall have any right or
obligation hereunder (whether by virtue of any other oral or written agreement
or other communication).
Section
11.13. Specific
Performance. The parties hereto agree that irreparable
damage would occur if any provision of this Agreement were not performed in
accordance with the terms hereof and that, except as provided in Section
11.04(c), the parties shall be entitled to an injunction or injunctions to
prevent breaches of this Agreement or to enforce specifically the performance
of
the terms and provisions hereof, in addition to any other remedy to which they
are entitled at law or in equity.
49
ARTICLE
12
DEFINITIONS
Section
12.01. Definitions. (a)
As used herein, the following terms have the following
meanings:
“Affiliate”
means, with respect to any Person, any other Person directly or indirectly
controlling, controlled by or under common control with such Person;
provided that neither Genentech, Inc., a Delaware corporation, nor
Chugai Pharmaceutical Co., Ltd., a Japanese company, shall be deemed an
Affiliate of Holding or any of its Subsidiaries for purposes of this Agreement,
it being understood that Holding, Parent and Merger Subsidiary shall be deemed
to be Affiliates of one another for purposes of this Agreement.
“Antitrust
Laws” means applicable Laws that are designed to prohibit, restrict or
regulate actions having the purpose or effect of monopolization or restraint
of
trade.
“Business
Day” means a day other than Saturday, Sunday or other day on which
commercial banks in New York, New York are authorized or required by Law to
close.
“Code”
means the Internal Revenue Code of 1986.
“Company
Material Adverse Effect” means a material adverse effect
on
(i)
the
business, operations, results of operations, assets, liabilities or financial
condition of the Company and its Subsidiaries, taken as a whole, excluding
any
effect resulting from (A) changes in the financial or securities markets or
general economic or political conditions in the United States, (B) changes
(including changes of Law or regulation) or conditions generally affecting
the
industry in which the Company and its Subsidiaries operate and not specifically
relating to or having a materially disproportionate effect on the Company and
its Subsidiaries, (C) acts of war, sabotage or terrorism or natural disasters
involving the United States not having a materially disproportionate effect
on
the Company and its Subsidiaries, (D) the announcement or consummation of the
Offer or the transactions contemplated by this Agreement, or (E) any failure
by
the Company to meet any internal or published budgets, projections, forecasts
or
predictions of financial performance for any period (it being understood that
this clause (E) shall not prevent a party from asserting that any fact, change,
event, occurrence or effect that may have contributed to such failure
independently constitutes or contributes to a Company Material Adverse Effect);
or
(ii)
the
Company’s ability to consummate the transactions contemplated by this
Agreement.
50
“Governmental
Authority” shall mean any government, court, regulatory or
administrative agency, commission or authority or other governmental
instrumentality, whether domestic or foreign, federal, state or local,
multinational or supranational.
“knowledge”
means, with respect to the Company, the actual knowledge after reasonable
inquiry of any of the persons listed in Section 12.01(a) of the Company
Disclosure Schedule.
“Law”
means all laws (including common law), statutes, ordinances, codes, rules and
regulations of any Governmental Authorities.
“Lien”
means, with respect to any property or asset, any mortgage, lien, pledge,
charge, security interest, encumbrance, restriction, easement, right of way,
title defect or other adverse claim of any kind in respect of such property
or
asset. For purposes of this Agreement, a Person shall be deemed to
own subject to a Lien, any property or asset that it has acquired or holds
subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement relating to such
property or asset.
“1933
Act” means the Securities Act of 1933.
“1934
Act” means the Securities Exchange Act of 1934.
“Parent
Material Adverse Effect” means a material adverse effect on Parent’s
ability to consummate the transactions contemplated by this Agreement or to
perform its obligations under this Agreement.
“Person”
means an individual, corporation, partnership, limited liability company,
association, trust or other entity or organization, including a Governmental
Authority.
“Subsidiary”
means, with respect to any Person, any entity of which securities or other
ownership interests having ordinary voting power to elect a majority of the
board of directors or other persons performing similar functions are at any
time
directly or indirectly owned by such Person.
(b) Each
of
the following terms is defined in the Section set forth opposite such
term:
|
Term
|
Section
|
|
|
Acceptance
Date
|
1.01
|
|
|
Acquisition
Proposal
|
6.04
|
|
|
Adverse
Recommendation Change
|
6.04
|
|
|
Amended
Offer
|
Recitals
|
|
|
Agreement
|
Preamble
|
51
|
Term
|
Section
|
|
|
Board
of Directors
|
1.02
|
|
|
Certificates
|
2.03
|
|
|
Company
|
Preamble
|
|
|
Company
Balance Sheet
|
4.08
|
|
|
Company
Balance Sheet Date
|
4.08
|
|
|
Company
Board Recommendation
|
4.02
|
|
|
Company
Disclosure Documents
|
4.09
|
|
|
Company
Disclosure Schedule
|
4.01
|
|
|
Company
ESPP
|
2.08
|
|
|
Company
Financial Advisors
|
4.20
|
|
|
Company
Intellectual Property
|
4.19
|
|
|
Company
Performance Unit
|
2.07
|
|
|
Company
Proxy Statement
|
5.05
|
|
|
Company
Registered Intellectual Property
|
4.19
|
|
|
Company
Representatives
|
6.04
|
|
|
Company
Restricted Share
|
2.06
|
|
|
Company
Rights
|
4.22
|
|
|
Company
SEC Documents
|
4.07
|
|
|
Company
Securities
|
4.05
|
|
|
Company
Stock Option
|
2.05
|
|
|
Company
Stockholder Approval
|
4.02
|
|
|
Company
Stockholder Meeting
|
6.02
|
|
|
Company
Subsidiary Securities
|
4.06
|
|
|
Company
10-K
|
4.07
|
|
|
Confidentiality
Agreement
|
6.03
|
|
|
Continuing
Director
|
1.03
|
|
|
Continuing
Employees
|
7.04
|
|
|
D&O
Insurance
|
7.03
|
|
|
Delaware
Law
|
1.02
|
|
|
Effective
Time
|
2.01
|
|
|
Employee
Plans
|
4.16
|
|
|
End
Date
|
10.01
|
|
|
Environmental
Laws
|
4.17
|
|
|
Environmental
Permits
|
4.17
|
|
|
ERISA
|
4.16
|
|
|
ERISA
Affiliate
|
4.16
|
|
|
Exchange
Agent
|
2.03
|
|
|
Existing
Offer
|
Recitals
|
|
|
Filed
SEC Documents
|
4.01
|
|
|
GAAP
|
4.08
|
|
|
Hazardous
Substance
|
4.17
|
|
|
Holding
|
6.03
|
|
|
Indemnified
Person
|
7.03
|
|
|
Intellectual
Property
|
4.19
|
|
|
International
Plans
|
4.16
|
52
|
Term
|
Section
|
|
|
Material
Contracts
|
4.18
|
|
|
Merger
|
2.01
|
|
|
Merger
Consideration
|
2.02
|
|
|
Merger
Subsidiary
|
Preamble
|
|
|
Minimum
Condition
|
1.01
|
|
|
Multiemployer
Plan
|
4.16
|
|
|
Necessary
Intellectual Property
|
4.19
|
|
|
Off-the-Shelf
Software
|
4.19
|
|
|
Offer
|
Recitals
|
|
|
Offer
Documents
|
1.01
|
|
|
Parent
|
Preamble
|
|
|
Rights
Agreement
|
4.22
|
|
|
Schedule
TO
|
Recitals
|
|
|
Schedule
14D-9
|
1.02
|
|
|
SEC
|
1.01
|
|
|
Shares
|
Recitals
|
|
|
Subsequent
Offering Period
|
1.01
|
|
|
Superior
Proposal
|
6.04
|
|
|
Surviving
Corporation
|
2.01
|
|
|
Tax
|
4.14
|
|
|
Taxing
Authority
|
4.14
|
|
|
Tax
Return
|
4.14
|
|
|
Termination
Fee
|
11.04
|
|
|
Top-Up
Notice
|
1.04
|
|
|
Top-Up
Option
|
1.04
|
|
|
Top-Up
Shares
|
1.04
|
|
|
Transfer
Taxes
|
8.10
|
|
|
Uncertificated
Shares
|
2.03
|
Section
12.02. Other
Definitional and Interpretative Provisions. The words “hereof”,
“herein” and “hereunder” and words of like import used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement. The captions herein are included for reference purposes
only and shall be ignored in the construction or interpretation
hereof. References to Articles, Sections, Exhibit, Annexes and
Schedules are to Articles, Sections, Exhibit, Annexes and Schedules of this
Agreement unless otherwise specified. All Exhibit, Annexes and
Schedules annexed hereto or referred to herein are hereby incorporated in and
made a part of this Agreement as if set forth in full herein. All
terms defined in this Agreement and used but not otherwise defined in any
Exhibit, Annex or Schedule or any other document made or delivered pursuant
hereto shall have the meaning as defined in this Agreement. The
definitions contained in this Agreement are applicable to the singular as well
as the plural forms of such terms. Whenever the words “include”,
“includes” or “including” are used in this Agreement, they shall be deemed to be
followed by the words “without limitation”. “Writing”, “written” and
comparable terms refer
53
to
printing, typing and other means of reproducing words (including electronic
media) in a visible form. References to any statute shall be deemed
to refer to such statute as amended from time to time and to any rules or
regulations promulgated thereunder. References to any agreement or
contract shall be deemed to refer to such agreement or contract as amended,
modified or supplemented from time to time in accordance with the terms thereof;
provided that with respect to any agreement or contract listed on any
schedules hereto, all such amendments, modifications or supplements must also
be
listed in the appropriate schedule. References to any Person include
the successors and permitted assigns of that Person.
[The
remainder of this page has been intentionally left blank; the next page is
the
signature page.]
54
IN
WITNESS
WHEREOF, the parties hereto have caused this Agreement to be duly executed
by
their respective authorized officers as of the day and year first above
written.
|
VENTANA
MEDICAL SYSTEMS, INC.
|
||||
|
By:
|
/s/
Xxxxxxxxxxx X. Xxxxxxx
|
|||
|
Name:
|
Xxxxxxxxxxx
X. Xxxxxxx
|
|||
|
Title:
|
President
and
Chief
Executive Officer
|
|||
|
ROCHE
HOLDINGS, INC.
|
||||
|
By:
|
/s/ Xxxxx Xxxxxxxxxx | |||
|
Name:
|
Xxxxx
Xxxxxxxxxx
|
|||
|
Title:
|
Vice
President and Corporate Secretary
|
|||
|
ROCKET
ACQUISITION CORPORATION
|
||||
|
By:
|
/s/
Xxxxx Xxxxx
|
|||
|
Name:
|
Xxxxx
Xxxxx
|
|||
|
Title:
|
President
|
|||
|
By:
|
/s/
Beat Kraehenmann
|
|||
|
Name:
|
Beat
Kraehenmann
|
|||
|
Title:
|
Secretary
|
|||
ANNEX
I
Notwithstanding
any other provision of this Agreement, Merger Subsidiary shall not be required
to accept for payment, or pay for, any Shares, and may, subject to Article
1 and
Article 10 of this Agreement, terminate the Offer, if:
(a) prior
to
the expiration of the Offer, (i) the Minimum Condition (as defined in the Merger
Agreement) shall not have been satisfied or (ii) there are any restrictions
or
prohibitions under any applicable Antitrust Law (including suspensory filing
requirements, waiting periods and required actions, consents or clearances
by
any Governmental Authority) that would make illegal the consummation of the
Offer or the Merger; or
(b) at
any
time on or after the date of this Agreement and prior to the expiration of
the
Offer, any of the following conditions exists:
(i) there
is a
Law or judgment, injunction, order or decree of any Governmental Authority
with
competent jurisdiction restraining, prohibiting or otherwise making illegal
the
consummation of the Offer or the Merger;
(ii) (A)
the
representations and warranties of the Company contained in the second sentence
of Section 4.05 shall not be true and correct in all material respects at and
as
of immediately prior to the expiration of the Offer as if made at and as of
such
time (other than such representations and warranties that by their terms address
matters only as of another specified time, which shall be true and correct
in
all material respects only as of such time) or (B) the other representations
and
warranties of the Company contained in this Agreement (disregarding all
materiality and Company Material Adverse Effect qualifications contained
therein) shall not be true and correct at and as of immediately prior to the
expiration of the Offer as if made at and as of such time (other than
representations and warranties that by their terms address matters only as
of
another specified time, which shall be true and correct only as of such time),
except, in the case of clause (B) only, for such matters as have not had and
would not reasonably be expected to have, individually or in the aggregate,
a
Company Material Adverse Effect;
(iii) the
Company shall have failed to perform in all material respects all of its
obligations to be performed or complied with by it under this Agreement prior
to
such time;
(iv) the
Company shall have failed to deliver to Parent a certificate signed by an
executive officer of the Company dated as of the date on which the Offer expires
certifying that the conditions specified in clauses (ii) and (iii) of this
paragraph (b) do not exist; or
I-1
(v) this
Agreement shall have been terminated in accordance with its terms.
I-2
