EXHIBIT 1
AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
AMONG
ST. JUDE MEDICAL, INC.
DRAGONFLY MERGER CORP.,
AND
ENDOCARDIAL SOLUTIONS, INC.
Dated as of September 29, 2004
TABLE OF CONTENTS
AGREEMENT AND PLAN OF MERGER
PAGE
RECITALS:................................................................................................1
ARTICLE I THE MERGER.....................................................................................1
Section 1.1 The Merger...........................................................1
Section 1.2 Effective Time.......................................................2
Section 1.3 Effects of the Merger................................................2
Section 1.4 Certificate of Incorporation and By-laws; Directors and Officers.....2
Section 1.5 Conversion of Securities.............................................2
Section 1.6 Payment of Per Share Price...........................................3
Section 1.7 Transfer Taxes; Withholding..........................................4
Section 1.8 No Further Ownership Rights in Company Common Stock..................5
Section 1.9 Closing of Company Transfer Books....................................5
Section 1.10 Lost Certificates....................................................5
Section 1.11 Further Assurances...................................................5
Section 1.12 Dissenters' Rights...................................................5
Section 1.13 Closing..............................................................6
ARTICLE II REPRESENTATIONS AND WARRANTIES OF BUYER AND SUB...............................................6
Section 2.1 Organization, Standing and Power.....................................6
Section 2.2 Authority............................................................6
Section 2.3 Consents and Approvals; No Violation.................................7
Section 2.4 Financing............................................................8
Section 2.5 Litigation...........................................................8
Section 2.6 Ownership of Sub; No Prior Activities................................8
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY................................................8
Section 3.1 Organization, Standing and Power.....................................8
Section 3.2 Capital Structure....................................................9
Section 3.3 Authority...........................................................10
Section 3.4 Consents and Approvals; No Violation................................11
Section 3.5 SEC Reports; Financial Statements...................................11
Section 3.6 No Default..........................................................13
Section 3.7 Absence of Certain Changes or Events................................13
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TABLE OF CONTENTS
(CONTINUED)
Section 3.8 Permits and Compliance..............................................15
Section 3.9 Tax Matters.........................................................16
Section 3.10 Actions and Proceedings.............................................17
Section 3.11 Certain Agreements..................................................18
Section 3.12 ERISA...............................................................20
Section 3.13 Compliance with Worker Safety Laws..................................21
Section 3.14 Products............................................................22
Section 3.15 Labor and Employment Matters........................................22
Section 3.16 Intellectual Property...............................................22
Section 3.17 Required Vote of Company Stockholders...............................24
Section 3.18 Accounts Receivable.................................................25
Section 3.19 Inventories.........................................................25
Section 3.20 Environmental Matters...............................................25
Section 3.21 Suppliers and Distributors..........................................27
Section 3.22 Insurance...........................................................27
Section 3.23 Transactions with Affiliates........................................27
Section 3.24 Accuracy of Information.............................................28
Section 3.25 Title to and Sufficiency of Assets..................................28
Section 3.26 Brokers.............................................................29
Section 3.27 Internal Controls and Procedures....................................29
Section 3.28 Certain Business Practices..........................................30
Section 3.29 Opinion of Financial Advisor........................................30
Section 3.30 Company Rights Agreement............................................30
Section 3.31 Takeover Statutes...................................................30
ARTICLE IV COVENANTS RELATING TO CONDUCT OF BUSINESS....................................................30
Section 4.1 Conduct of Business by the Company Pending the Merger...............31
ARTICLE V ADDITIONAL AGREEMENTS.........................................................................35
Section 5.1 Access to Information...............................................35
Section 5.2 Fees and Expenses...................................................36
Section 5.3 No Solicitation or Negotiation......................................36
Section 5.4 Cooperation.........................................................39
Section 5.5 Company Stock Options...............................................40
Section 5.6 Stockholder Approval................................................41
Section 5.7 Public Announcements................................................42
Section 5.8 Notification of Certain Matters.....................................42
Section 5.9 Takeover Statutes...................................................42
Section 5.9 Company Rights Agreement............................................42
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TABLE OF CONTENTS
(CONTINUED)
Section 5.10 Section 16 Matters..................................................43
Section 5.11 Employee Benefit Matters............................................43
Section 5.12 Indemnification of Directors and Officers...........................44
Section 5.13 Suspension of Incentive Stock Purchase Plan.........................45
ARTICLE VI CONDITIONS PRECEDENT TO THE MERGER...........................................................45
Section 6.1 Conditions to Each Party's Obligation to Effect the Merger..........45
Section 6.2 Conditions to Obligation of the Company to Effect the Merger........46
Section 6.3 Conditions to Obligations of Buyer and Sub to Effect the Merger.....46
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER...........................................................47
Section 7.1 Termination.........................................................47
Section 7.2 Effect of Termination...............................................49
Section 7.3 Amendment...........................................................49
Section 7.4 Waiver..............................................................49
Section 7.5 Termination Fees....................................................50
ARTICLE VIII GENERAL PROVISIONS.........................................................................50
Section 8.1 Notices.............................................................50
Section 8.2 Interpretation......................................................51
Section 8.3 Counterparts; Facsimile Signatures..................................52
Section 8.4 Entire Agreement; No Third-Party Beneficiaries......................52
Section 8.5 Governing Law.......................................................52
Section 8.6 Consent to Jurisdiction; Waiver of Jury Trial.......................52
Section 8.7 Assignment..........................................................53
Section 8.8 Severability........................................................53
Section 8.9 Performance by Sub..................................................53
Section 8.10 Defined Terms.......................................................53
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LIST OF EXHIBITS
Exhibit A - Certificate of Merger..............................................................Section 1.2
Exhibit B - Certificate of Incorporation of the Surviving Corporation..........................Section 1.4
AGREEMENT AND PLAN OF MERGER
This AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER, dated as of
September 29, 2004 (this "Agreement"), is among St. Jude Medical, Inc., a
Minnesota corporation ("Buyer"), Dragonfly Merger Corp., a Delaware corporation
and a wholly-owned subsidiary of Buyer ("Sub"), and Endocardial Solutions, Inc.,
a Delaware corporation (the "Company") (Sub and the Company being hereinafter
collectively referred to as the "Constituent Corporations") to amend and restate
in its entirety the Agreement and Plan of Merger dated September 23, 2004 among
Buyer, Sub and the Company (the "Original Agreement") to correct a scrivener's
error in Section 6.3(e). Upon the execution of this Agreement, the Original
Agreement shall be deemed in full force and effect from the date thereof solely
as amended and restated hereby. All references herein to "the date hereof", "the
date of this Agreement" or any words to that effect shall be deemed to refer to
September 23, 2004.
RECITALS:
A. The respective Boards of Directors of Buyer, Sub and the
Company have approved and declared advisable the merger of Sub with and into the
Company upon the terms and subject to the conditions of this Agreement (the
"Merger"), and the respective Boards of Directors of Buyer, Sub and the Company
have approved and adopted this Agreement;
B. The respective Boards of Directors of Buyer and the Company
have determined that the Merger is in the best interest of their respective
stockholders; and
C. The Company is a corporation organized under the laws of the
state of Delaware and has authorized 40,000,000 shares of common stock, $0.01
par value per share (the "Company Common Stock"), of which 22,143,300 shares are
outstanding and 10,000,000 shares of preferred stock, $0.01 par value per share
(the "Company Preferred Stock"), of which no shares are outstanding (the Company
Common Stock and the Company Preferred Stock are collectively referred to as the
"Company Capital Stock").
NOW, THEREFORE, in consideration of the premises, representations,
warranties and agreements herein contained, the parties agree as follows:
ARTICLE I
THE MERGER
SECTION 1.1 THE MERGER. Upon the terms and subject to the
conditions hereof, and in accordance with the Delaware General Corporation Law
(the "DGCL"), Sub shall be merged with and into the Company at the Effective
Time (as defined in Section 1.2). Following the Merger, the separate corporate
existence of Sub shall cease and the Company shall continue as the surviving
corporation (the "Surviving Corporation") and shall succeed to and assume all
the rights and obligations of Sub in accordance with the DGCL.
SECTION 1.2 EFFECTIVE TIME. Subject to the terms and
conditions set forth in this Agreement, on the Closing Date: (a) the Certificate
of Merger (the "Certificate of Merger") substantially in the form of EXHIBIT A
shall be duly executed by the Company and Sub and thereafter filed with the
Secretary of State of the State of Delaware, and (b) the parties shall make such
other filings with the Secretary of State of the State of Delaware as shall be
necessary to effect the Merger. The Merger shall become effective at such time
as a properly executed Certificate of Merger is duly filed with the Secretary of
State of the State of Delaware, or such later time as Buyer and the Company may
agree upon and as may be set forth in the Certificate of Merger. The time the
Merger becomes effective is referred to herein as the "Effective Time".
SECTION 1.3 EFFECTS OF THE MERGER. The Merger shall have the
effects set forth in this Agreement and Section 259 of the DGCL. Without
limiting the generality of the foregoing and subject thereto, at the Effective
Time, all properties, rights privileges, powers and franchises of the Company
and Sub shall vest in the Surviving Corporation, and all debts, liabilities and
duties of the Company and Sub shall become the debts, liabilities and duties of
the Surviving Corporation.
SECTION 1.4 CERTIFICATE OF INCORPORATION AND BY-LAWS;
DIRECTORS AND OFFICERS. (a) The Certificate of Incorporation of the Surviving
Corporation in effect at the Effective Time will be amended in its entirety at
the Effective Time to read as set forth in EXHIBIT B hereto and shall be the
Certificate of Incorporation of the Surviving Corporation until thereafter
changed or amended as provided therein or by Applicable Law. The By-laws of Sub
in effect at the Effective Time will be the By-laws of the Surviving Corporation
until thereafter changed or amended as provided therein or by Applicable Law.
(b) The directors of Sub at the Effective Time shall
automatically, and without further action, be the directors of the Surviving
Corporation, until the earlier of their resignation or removal or until their
respective successors are duly elected and qualified, as the case may be. The
officers of the Sub at the Effective Time shall be the officers of the Surviving
Corporation, until the earlier of their resignation or removal or until their
respective successors are duly elected and qualified, as the case may be.
SECTION 1.5 CONVERSION OF SECURITIES. As of the Effective
Time, by virtue of the Merger and without any action on the part of Sub, the
Company or the holders of any capital stock of the Constituent Corporations:
(a) Each issued and outstanding share of common
stock, par value $.01 per share, of Sub shall be converted into one validly
issued, fully paid and nonassessable share of common stock of the Surviving
Corporation and shall constitute the only shares of capital stock of the
Surviving Corporation outstanding immediately after the Effective Time.
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(b) All shares of Company Capital Stock that are held
in the treasury of the Company and any shares of Company Capital Stock owned by
Buyer or Sub or any other Subsidiary of Buyer, direct or indirect, shall
automatically be cancelled and retired and shall cease to exist and no capital
stock of Buyer or other consideration shall be delivered in exchange therefor.
(c) At the Effective Time, each then issued and
outstanding share of Company Common Stock (other than Dissenting Shares and
shares described in Section 1.5(b)) shall immediately cease to be outstanding,
shall automatically be cancelled and retired, shall cease to exist, and shall be
converted into the right to receive $11.75 (the "Per Share Price") to be
distributed in accordance with this Section 1.5(c), 1.6, and 1.7. At the
Effective Time, each holder of Company Capital Stock shall cease to have any
rights with respect to such issued and outstanding shares (other than Dissenting
Shares) of Company Capital Stock (including, without limitation, the right to
vote), except for the right to receive the Per Share Price. Unless the context
otherwise requires, each reference in this Agreement to shares of Company Common
Stock shall include the associated Company Rights. Notwithstanding the
foregoing, if, between the date of this Agreement and the Effective Time, the
outstanding shares of Company Common Stock shall have been changed into a
different number of shares or a different class by reason of any stock dividend,
subdivision, reclassification, recapitalization, split, combination or exchange
of shares, then the Per Share Price shall be correspondingly adjusted to reflect
such stock dividend, subdivision, reclassification, recapitalization, split,
combination or exchange of shares.
(d) All outstanding options exercisable into shares
of Company Common Stock, but unexercised immediately prior to the Effective Time
will be treated as set forth in Section 5.5 hereof.
SECTION 1.6 PAYMENT OF PER SHARE PRICE. (a) Buyer shall
appoint Xxxxx Fargo Bank, N.A., or other commercial bank or trust company as a
paying agent (the "Paying Agent") for the benefit of the holders of Company
Common Stock that are not Dissenting Shares and who are entitled to receive the
Per Share Price (collectively, the "Holders"). At or immediately prior to the
Effective Time, Buyer shall make available to the Paying Agent an amount of cash
sufficient to permit payment of the Per Share Price to the Holders (the
"Exchange Fund"). The Paying Agent shall exchange the shares of Company Common
Stock for the Per Share Price in accordance with the terms of this Article I,
through such reasonable procedures as the Paying Agent or Buyer may adopt.
(b) As soon as practicable after the Effective Time,
Buyer or the Paying Agent shall cause to be mailed to each record holder of a
certificate or certificates that immediately prior to the Effective Time
represented Company Common Stock converted in the Merger (the "Certificates") a
letter of transmittal (which shall specify that delivery shall be effected, and
risk of loss and title to the Certificates shall pass, only upon actual delivery
of the Certificates to the Paying Agent, and shall contain instructions for use
in effecting the surrender of the Certificates and payment of the Per
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Share Price). Upon surrender for cancellation to the Paying Agent of a
Certificate held by any Holder, together with such letter of transmittal, duly
executed, the Holder of such Certificate shall be entitled to receive in
exchange therefor that amount of cash equal to the Per Share Price for each
share of Company Common Stock represented by the Certificate. Any Certificate so
surrendered shall forthwith be cancelled.
(c) Notwithstanding the foregoing, no amounts shall
be payable at the Effective Time with respect to any Dissenting Shares or any
shares of Company Capital Stock with respect to which dissenters' rights have
not terminated. In the case of Dissenting Shares, payment shall be made in
accordance with Section 1.12 and the DGCL. In the case of any shares of Company
Capital Stock with respect to which dissenters' rights have not terminated as of
the Effective Time, if such shares of Company Capital Stock become Dissenting
Shares, payment shall be made in accordance with Section 1.12 and the DGCL, and
if, instead, the dissenters' rights with respect to such shares irrevocably
terminate after the Effective Time, such shares of Company Capital Stock shall
be entitled to receive the Per Share Price in accordance with the provisions of
this Section 1.6.
(d) Any portion of the Exchange Fund that remains
undistributed to the former Holders for six months after the Effective Time
shall be delivered to Buyer, upon demand of Buyer, and any former Holders who
have not theretofore complied with this Article I shall thereafter look only to
Buyer for payment of the Per Share Price. Neither Buyer nor the Surviving
Corporation shall be liable to any holder of Shares for cash delivered to a
public official in connection herewith pursuant to any applicable abandoned
property, escheat or similar law.
SECTION 1.7 TRANSFER TAXES; WITHHOLDING. If any cash is to be
paid to or issued in a name other than that in which the Certificate surrendered
in exchange therefor is registered, it shall be a condition of such exchange
that the Certificate so surrendered shall be properly endorsed and otherwise in
proper form for transfer and that the Person requesting such exchange shall pay
to the Buyer or the Paying Agent any transfer or other taxes required by reason
of the payment of cash in a name other than that of the registered holder of the
Certificate surrendered, or shall establish to the satisfaction of the Buyer or
the Paying Agent that such tax has been paid or is not applicable. Buyer or the
Paying Agent shall be entitled to deduct and withhold from the consideration
otherwise payable pursuant to this Agreement to any holder of shares of Company
Capital Stock such amounts as Buyer or the Paying Agent is required to deduct
and withhold with respect to the making of such payment under the Code or under
any provision of state, local or foreign tax law. To the extent that amounts are
so withheld by Buyer or the Paying Agent, such withheld amounts shall be treated
for all purposes of this Agreement as having been paid to the holder of the
shares of Company Capital Stock in respect of which such deduction and
withholding was made by Buyer or the Paying Agent and transmitted by Buyer or
the Paying Agent to the appropriate taxing authority with attribution to each
specific Holder.
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SECTION 1.8 NO FURTHER OWNERSHIP RIGHTS IN COMPANY COMMON
STOCK. All amounts paid to Holders upon the surrender for exchange of
Certificates in accordance with the terms hereof shall be deemed to have been
paid in full satisfaction of all rights pertaining to the shares of Company
Capital Stock represented by such Certificates.
SECTION 1.9 CLOSING OF COMPANY TRANSFER BOOKS. At the
Effective Time, the stock transfer books of the Company shall be closed and no
transfer of shares of Company Capital Stock shall thereafter be made on the
records of the Company. If, after the Effective Time, Certificates are presented
to the Surviving Corporation or the Buyer, such Certificates shall be cancelled
and exchanged as provided in this Article I.
SECTION 1.10 LOST CERTIFICATES. If any Certificate shall have
been lost, stolen or destroyed, upon the making of an affidavit of that fact by
the Person claiming such Certificate to be lost, stolen or destroyed and, if
required by Buyer or the Paying Agent, the posting by such Person of a bond, in
such reasonable amount as Buyer may direct as indemnity against any claim that
may be made against them with respect to such Certificate, Buyer will pay in
exchange for such lost, stolen or destroyed Certificate the amounts to which the
holders thereof are entitled pursuant to Section 1.5.
SECTION 1.11 FURTHER ASSURANCES. If at any time after the
Effective Time the Surviving Corporation shall consider or be advised that any
deeds, bills of sale, assignments or assurances or any other acts or things are
necessary, desirable or proper (a) to vest, perfect or confirm, of record or
otherwise, in the Surviving Corporation its right, title or interest in, to or
under any of the rights, privileges, powers, franchises, properties or assets of
either of the Constituent Corporations, or (b) otherwise to carry out the
purposes of this Agreement, the Surviving Corporation and its proper officers
and directors or their designees shall be authorized to execute and deliver, in
the name and on behalf of either of the Constituent Corporations, all such
deeds, bills of sale, assignments and assurances and to do, in the name and on
behalf of either Constituent Corporation, all such other acts and things as may
be necessary, desirable or proper to vest, perfect or confirm the Surviving
Corporation's right, title or interest in, to or under any of the rights,
privileges, powers, franchises, properties or assets of such Constituent
Corporation and otherwise to carry out the purposes of this Agreement.
SECTION 1.12 DISSENTERS' RIGHTS. (a) Shares of Company Capital
Stock that have not been voted for approval of this Agreement or consented
thereto in writing and with respect to which a demand for payment and appraisal
has been properly made in accordance with Section 262 of the DGCL ("Dissenting
Shares") or shares that have not voted in favor of the Merger and with respect
to which dissenters' rights have not terminated will not be converted into the
right to receive from the Surviving corporation the Per Share Price otherwise
payable with respect to such shares at or after the Effective Time. If a holder
of Dissenting Shares (a "Dissenting Stockholder") withdraws his or her demand
for such payment and appraisal or such Dissenting Shares (or such other shares
with respect to which dissenters' rights have not
5
terminated) become ineligible for such payment and appraisal, then, as of the
Effective Time or the occurrence of such event of withdrawal or ineligibility,
whichever last occurs, such holder's Dissenting Shares will cease to be
Dissenting Shares (or, in the case of such other shares, the dissenters' rights
shall have terminated) and each share of Company Common Stock will be converted
into the right to receive, and will be exchangeable for, the Per Share Price
into which such Dissenting Shares would have been converted pursuant to Section
1.5.
(b) The Company shall give Buyer and Sub prompt
notice of any demand received by the Company from a holder of Dissenting Shares
for appraisal of shares of Company Capital Stock, and Buyer shall have the right
to participate in all negotiations and proceedings with respect to such demand.
The Company agrees that, except with the prior written consent of Buyer and Sub,
or as required under the DGCL, it will not voluntarily make any payment with
respect to, or settle or offer or agree to settle, any such demand for
appraisal. Each Dissenting Stockholder who, pursuant to the provisions of
Section 262 of the DGCL, becomes entitled to payment of the value of the
Dissenting Shares will receive payment therefor after the value therefor has
been agreed upon or finally determined pursuant to such provisions, and any Per
Share Price that would have been payable with respect to such Dissenting Shares
will be retained by Buyer.
SECTION 1.13 CLOSING. The closing of the transactions
contemplated by this Agreement (the "Closing") and all actions specified in this
Agreement to occur at the Closing shall take place at the offices of Buyer, One
Lillehei Plaza, St. Xxxx, Minnesota no later than the second business day
following the day on which the last of the conditions set forth in Article VI
shall have been fulfilled or waived (if permissible) (the "Closing Date") or at
such other time and place as Buyer and the Company shall agree.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF BUYER AND SUB
Buyer and Sub represent and warrant to the Company as follows:
SECTION 2.1 ORGANIZATION, STANDING AND POWER. Each of Buyer
and Sub is a corporation duly organized, validly existing and in good standing
under the laws of its place of incorporation and has the requisite corporate
power and authority to carry on its business as now being conducted. Each of
Buyer and Sub is duly qualified to do business, and is in good standing, in each
jurisdiction where the character of its properties owned or held under lease or
the nature of its activities makes such qualification necessary.
SECTION 2.2 AUTHORITY. On or prior to the date of this
Agreement, the respective Boards of Directors of Buyer and Sub have declared the
Merger advisable and have approved and adopted this Agreement in accordance with
the Minnesota Business Corporation Act and the DGCL, respectively. Each of Buyer
and
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Sub has all requisite corporate power and authority to enter into this Agreement
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement by Buyer and Sub and the consummation by Buyer and
Sub of the transactions contemplated hereby have been duly authorized by all
necessary corporate action (including all Board action) on the part of Buyer and
Sub, subject to the filing of an appropriate Certificate of Merger as required
by the DGCL. This Agreement has been duly executed and delivered by Buyer and
Sub, and (assuming the valid authorization, execution and delivery of this
Agreement by the Company) this Agreement constitutes the valid and binding
obligation of Buyer and Sub enforceable against each of them in accordance with
its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles.
SECTION 2.3 CONSENTS AND APPROVALS; NO VIOLATION. Assuming
that all consents, approvals, authorizations and other actions described in this
Section 2.3 have been obtained and all filings and obligations described in this
Section 2.3 have been made, the execution and delivery of this Agreement does
not, and the consummation of the transactions contemplated hereby and compliance
with the provisions hereof will not, result in any violation of, or default
(with or without notice or lapse of time, or both) under, or give to others a
right of termination, cancellation or acceleration of any obligation or result
in the loss of a benefit under, or result in the creation of any Lien upon any
of the properties or assets of Buyer or Sub under, any provision of (a) the
Articles of Incorporation or the By-laws of Buyer, each as amended to date, (b)
the Certificate of Incorporation or the By-laws of Sub, each as amended to date,
(c) any loan or credit agreement, note, bond, mortgage, indenture, lease or
other agreement, instrument, permit, concession, franchise or license applicable
to Buyer or any of its Subsidiaries, or (d) any judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to Buyer or Sub or any of
their respective properties or assets, other than, in the case of clauses (c) or
(d), any such violations, defaults, rights, losses, Liens that, individually or
in the aggregate, would not materially impair the ability of Buyer or Sub to
perform their respective obligations hereunder or prevent the consummation of
any of the transactions contemplated hereby or thereby. No filing or
registration with, or authorization, consent or approval of, any domestic
(federal and state), foreign or supranational court, commission, governmental
body, regulatory agency, authority or tribunal (a "Governmental Entity") is
required by or with respect to Buyer or Sub in connection with the execution and
delivery of this Agreement by Buyer or Sub or is necessary for the consummation
of the Merger and the other transactions contemplated by this Agreement, except
for (i) in connection, or in compliance, with the provisions of the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), (ii) the filing of the Certificate of Merger with the Secretary of State
of the State of Delaware and appropriate documents with the relevant authorities
of other states in which the Company is qualified to do business, (iii) such
filings and consents as may be required under any environmental, health or
safety law or regulation pertaining to any notification, disclosure or required
approval triggered by the Merger or by the transactions contemplated by this
Agreement, (iv) such filings, authorizations, orders and
7
approvals as may be required by state takeover laws (the "State Takeover
Approvals"), (v) any of such items as may be required under foreign laws, and
(vi) such other consents, orders, authorizations, registrations, declarations,
approvals and filings the failure of which to be obtained or made would not,
materially impair the ability of Buyer or Sub to perform its obligations
hereunder or prevent the consummation of any of the transactions contemplated
hereby or thereby.
SECTION 2.4 FINANCING. Buyer and Sub collectively have, and
will have at the Effective Time, sufficient funds to pay the Per Share Price for
all outstanding shares of Company Common Stock pursuant to this Agreement and to
perform Buyer's and Sub's obligations under this Agreement.
SECTION 2.5 LITIGATION. There is no suit, claim, action,
proceeding or investigation pending or, to the knowledge of Buyer, threatened
against Buyer or any of its Subsidiaries that, as of the date hereof, challenges
the validity or propriety, or seeks to prevent the consummation of, the Merger
or any other transaction contemplated by this Agreement.
SECTION 2.6 OWNERSHIP OF SUB; NO PRIOR ACTIVITIES. Sub is a
direct wholly owned subsidiary of Buyer. Sub has not conducted any activities
other than in connection with the organization of Sub, the negotiation and
execution of this Agreement and the consummation of the transactions
contemplated hereby. Sub has no Subsidiaries.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Each representation and warranty set forth below is qualified
by any exception or disclosures set forth in the letter dated the date hereof
and delivered on the date hereof by the Company to Buyer, which relates to this
Agreement and is designated therein as the Company Letter (the "Company
Letter"), which exceptions specifically reference the Sections to be qualified.
In all other respects, each representation and warranty set out in this Article
III is not qualified in any way whatsoever, and is made and given with the
intention of inducing Buyer and Sub to enter into this Agreement. The Company
represents and warrants to Buyer and Sub as follows:
SECTION 3.1 ORGANIZATION, STANDING AND POWER. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has the requisite corporate power and authority to
carry on its business as now being conducted. Each Subsidiary of the Company is
a corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction in which it is organized and has the requisite
corporate power and authority to carry on its business as now being conducted.
The Company and each of its Subsidiaries are duly qualified to do business, and
are in good standing, in each jurisdiction where the character of their
properties owned or held under lease or the nature of their activities makes
such qualification necessary, except for such failures to be so qualified that
would not, individually or in the aggregate, have a Material Adverse Effect. The
Company has
8
previously delivered to Buyer accurate and complete copies of its Certificate of
Incorporation (the "Company Charter") and By-laws as currently in full force and
effect. There have been no predecessor entities of the Company.
SECTION 3.2 CAPITAL STRUCTURE. (a) The authorized capital
stock of the Company consists of forty million shares of Company Common Stock
and ten million shares of Company Preferred Stock. At the close of business on
September 23, 2004, (i) 22,143,300 shares of Company Common Stock were issued
and outstanding, all of which were validly issued, fully paid and nonassessable
and free of preemptive rights, (ii) no shares of Company Preferred Stock were
issued and outstanding, (iii) no shares of Company Common Stock were held in the
treasury of the Company, (iv) 1,242,515 shares of Company Common Stock were
reserved for issuance pursuant to the Company's 2003 Stock Incentive Plan (the
"2003 Plan"); (v) 2,250,959 shares of Company Common Stock were reserved for
issuance under the Company's 1993 Long-Term Incentive and Stock Option Plan (the
"1993 Plan"); and (vi) 205,000 shares of Company Common Stock were reserved for
issuance under the Company's Directors' Stock Option Plan (the "Director Plan")
(collectively with the 2003 Plan, the 1993 Plan and the Director Plan, the
"Company Stock Option Plans"). No shares of Company Capital Stock are held by
any Subsidiary of the Company.
(b) Section 3.2 (b) of the Company Letter contains a
correct and complete list as of the date of this Agreement of each outstanding
option to purchase shares of Company Capital Stock issued under the Company
Stock Option Plans (collectively, the "Company Stock Options"), including the
holder, date of grant, term, acceleration of vesting or exercisability, if any,
whether such option is a nonqualified stock option or incentive stock option,
any restrictions on the exercise or sale of such option or the underlying shares
(other than any restrictions set forth in the Company Stock Option Plans),
exercise price and number of shares of Company Capital Stock subject thereto.
Except for the Company Stock Options and for the stockholder rights (the
"Company Rights") issued pursuant to the Rights Agreement dated as of August 25,
1999 between the Company and Xxxxx Fargo Bank Minnesota, National Association
(formerly Norwest Bank Minnesota), as Rights Agent (the "Company Rights
Agreement"), there are no options, warrants, calls, rights or agreements to
which the Company or any of its Subsidiaries is a party or by which any of them
is bound obligating the Company or any of its Subsidiaries to issue, deliver or
sell, or cause to be issued, delivered or sold, additional shares of Company
Capital Stock or any of its Subsidiaries or obligating the Company or any of its
Subsidiaries to grant, extend or enter into any such option, warrant, call,
right or agreement. All Company Stock Options and all shares of Company Capital
Stock issued pursuant to the exercise of options granted under the Company Stock
Option Plans have been granted or issued, respectively, and all shares of
Company Common Stock to be issued pursuant to the Company Stock Option Plans
prior to the Closing will be issued, in compliance with the Securities Act of
1933, as amended (the "Securities Act"). Except as set forth in Section 3.2(b)
of the Company Letter, none of the terms of the Company Stock Options provide
for accelerated vesting as a result of the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby.
9
(c) A list of all outstanding shares of Company
Common Stock subject to repurchase by the Company or that is otherwise subject
to a risk of forfeiture or other condition under the 2003 Plan (as hereinafter
defined), any applicable restricted stock purchase agreement, or other agreement
with the Company is set forth in Section 3.2(c) of the Company Letter, including
the holder, date of grant, acceleration of vesting or lapse of restrictions, if
any, any restrictions on the sale of such shares (other than any restrictions
set forth in the Company Stock Option Plans), and number of shares.
(d) Except as set forth in Section 3.2(d) of the
Company Letter, there are no outstanding contractual obligations of the Company
or any of its Subsidiaries to repurchase, redeem or otherwise acquire any shares
of Company Capital Stock or any capital stock of or any equity interests in the
Company or any Subsidiary. Each outstanding share of capital stock of each
Subsidiary of the Company is duly authorized, validly issued, fully paid and
nonassessable and each such share is owned by the Company or another subsidiary
of the Company, free and clear of all security interests, liens, claims,
pledges, options, rights of first refusal, agreements, limitations on voting
rights, charges and other encumbrances of any nature whatsoever. The Company
does not have any outstanding bonds, debentures, notes or other obligations the
holders of which have the right to vote (or are convertible into or exercisable
for securities having the right to vote) with the stockholders of the Company on
any matter. Section 3.2(d) of the Company Letter contains a correct and complete
list as of the date of this Agreement of each of the Company's Subsidiaries.
Except as set forth on Section 3.2(d) of the Company Letter, as of the date
hereof, neither the Company nor any of its Subsidiaries is party to or bound by
(x) any agreement or commitment pursuant to which the Company or any Subsidiary
of the Company is or could be required to register any securities under the
Securities Act or (y) any debt agreements or instruments which grant any rights
to vote (contingent or otherwise) on matters on which stockholders of the
Company may vote.
(e) The Company does not own an equity interest in
any other Person (other than a Subsidiary).
(f) There are no stockholder agreements, voting
trusts or other agreements or understandings to which the Company is a party or
by which it is bound relating to the voting or registration of any shares of
Company Capital Stock.
SECTION 3.3 AUTHORITY. (a) The Company has all necessary
corporate power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by the Company and the consummation by the Company of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of the Company, subject, in the case of this Agreement, to the
approval of this agreement by the Company's stockholders and the filing of the
Certificate of Merger as required by the DGCL. This Agreement has been duly and
validly executed and delivered by the Company and (assuming the valid
authorization, execution and delivery of this Agreement by Buyer and Sub and the
validity and binding effect of the Agreement on
10
Buyer and Sub) constitutes the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
(b) Without limiting the generality of the foregoing,
on or prior to the date of this Agreement, the Board of Directors of the Company
(the "Company Board") has unanimously (i) declared the Merger advisable and fair
to and in the best interest of the Company and its stockholders, and approved
and adopted this Agreement in accordance with the DGCL, (ii) resolved to
recommend approval and adoption of this Agreement, the Merger and the other
transactions contemplated hereby by the Company's stockholders, and (iii) has
not withdrawn or modified such approval or resolution to recommend.
SECTION 3.4 CONSENTS AND APPROVALS; NO VIOLATION. Assuming
that all consents, approvals, authorizations and other actions described in this
Section 3.4 have been obtained and all filings and obligations described in this
Section 3.4 have been made and any waiting periods thereunder have terminated or
expired, the execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated hereby and compliance with the
provisions hereof and thereof will not, result in any violation of, or default
(with or without notice or lapse of time, or both) under, or give to others a
right of termination, cancellation or acceleration of any obligation or result
in the loss of a benefit under, or result in the creation of any lien, security
interest, charge or encumbrance upon any of the properties or assets of the
Company under, any provision of (a) the Company Charter or the By-laws of the
Company, (b) any Material Contract, or (c) any judgment, order, decree, statute,
law, ordinance, rule or regulation applicable to the Company or any of its
properties or assets, except, (A) with respect to clauses (b) and (c), for any
such violations, defaults, losses or other occurrences which would not,
individually or in the aggregate, have a Material Adverse Effect and (B) with
respect to clause (b), those consents listed in Section 3.4(b) of the Company
Letter. No filing or registration with, or authorization, consent or approval
of, any Governmental Entity is required by or with respect to the Company in
connection with the execution and delivery of this Agreement by the Company or
is necessary for the consummation of the Merger and the other transactions
contemplated by this Agreement, except (i) in connection, or in compliance, with
the provisions of the HSR Act, (ii) the filing of Certificate of Merger with the
Secretary of State of the State of Delaware and appropriate documents with the
relevant authorities of other states in which the Company is qualified to do
business, (iii) such filings and consents as may be required under any
environmental, health or safety law or regulation pertaining to any
notification, disclosure or required approval triggered by the Merger or by the
transactions contemplated by this Agreement, (iv) State Takeover Approvals, (v)
under the Exchange Act, (vi) any of such items as may be required under foreign
laws.
SECTION 3.5 SEC REPORTS; FINANCIAL STATEMENTS. (a) The Company
has filed all required forms, reports and documents with the SEC since December
31, 1999 (the "Company SEC Reports"), each of which complied at the time
11
of filing in all material respects with all applicable requirements of the
Securities Act and the Securities Exchange Act of 1934 (the "Exchange Act") and
each Applicable Law as in effect on the dates such forms, reports and documents
were filed. None of such Company SEC Reports, including any financial statements
or schedules included or incorporated by reference therein, contained when filed
any untrue statement of a material fact or omitted to state a material fact
required to be stated or incorporated by reference therein or necessary in order
to make the statements therein in light of the circumstances under which they
were made not misleading, except to the extent superseded or amended by a
Company SEC Report filed subsequently and prior to the date hereof. The
consolidated financial statements of the Company included in the Company SEC
Reports (the "Financial Statements") fairly presented in all material respects,
in conformity with United States generally accepted accounting principles
applied on a consistent basis (except (i) as may be indicated in the notes
thereto and (ii) that unaudited statements are subject to normal year-end
adjustments that did not and would not, individually or in the aggregate, have a
Material Adverse Effect, and do not contain footnotes in substance or form
required to the extent permitted by Form 10-Q of the Exchange Act), the
consolidated financial position of the Company and its consolidated Subsidiaries
as of the dates thereof and their consolidated results of operations and cash
flows for the periods then ended.
(b) The Company has heretofore made, and hereafter will make,
available to Buyer a complete and correct copy of any amendments or
modifications that are required to be filed with or submitted to the SEC but
have not yet been filed with or submitted to the SEC to agreements, documents or
other instruments that previously had been filed with or submitted to the SEC by
the Company pursuant to the Exchange Act.
(c) Each Company SEC Report containing financial statements
that has been filed with or submitted to the SEC since July 31, 2002, was
accompanied by the certifications required to be filed or submitted by the
Company's chief executive officer and chief financial officer pursuant to the
Xxxxxxxx-Xxxxx Act of 2002 (the "Xxxxxxxx-Xxxxx Act"), 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 and the rules and regulations
promulgated thereunder.
(d) Except as set forth in Section 3.5(d) of the Company
Letter, since December 31, 1999, neither the Company nor any Subsidiary of the
Company nor, to the Company's knowledge, any director, officer, employee,
auditor, accountant or representative of the Company or any Subsidiary of the
Company has received or otherwise had or obtained knowledge of any complaint,
allegation, assertion or claim, whether written or oral, regarding the
accounting or auditing practices, procedures, methodologies or methods of the
Company or any Subsidiary of the Company or their respective internal accounting
controls, including any complaint, allegation, assertion or claim that the
Company or any Subsidiary of the Company has engaged in questionable accounting
or auditing practices. No attorney representing the Company or any Subsidiary of
the Company, whether or not employed by the Company or any Subsidiary of the
Company, has reported evidence of a material violation of securities laws,
breach
12
of fiduciary duty or similar violation by the Company or any of its officers,
directors, employees or agents to the Company Board or any committee thereof or
to any director or officer of the Company.
(e) To the knowledge of the Company, no employee of the
Company or any Subsidiary of the Company has provided or is providing
information to any law enforcement agency regarding the commission or possible
commission of any crime or the violation or possible violation of any Applicable
Law. Neither the Company nor any Subsidiary of the Company nor any officer,
employee, contractor, subcontractor or agent of the Company or any such
Subsidiary has discharged, demoted, suspended, threatened, harassed or in any
other manner discriminated against an employee of the Company or any Subsidiary
of the Company in the terms and conditions of employment because of any act of
such employee described in 18 U.S.C. ss. 1514A(a).
SECTION 3.6 NO DEFAULT. Except as set forth in Section 3.6 of
the Company Letter, the Company is not in breach, default or violation (and no
event has occurred that with notice or the lapse of time or both would
constitute a breach, default or violation) of any term, condition or provision
of (i) its Certificate of Incorporation or By-laws, (ii) any Material Contract
that is listed in Section 3.11(b)(i) of the Company Letter, or (iii) any
material order, writ, injunction, decree, law, statute, rule, or regulation
applicable to the Company or any of its properties or assets.
SECTION 3.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. (a) Except
as and to the extent disclosed in the Company SEC Reports filed on or before the
date hereof, since June 30, 2004 (the "Company Balance Sheet Date"), (i) the
Company and its Subsidiaries have not incurred any liability or obligation
(indirect, direct or contingent), or entered into any oral or written agreement
or other transaction, that is not in the ordinary course of business, (ii) the
Company and its Subsidiaries have not sustained any material loss or material
interference with their business or properties from fire, flood, windstorm,
accident or other calamity (whether or not covered by insurance), (iii) there
has been no change in the capital stock of the Company except for the issuance
of shares of the Company Common Stock pursuant to Company Stock Options, in the
ordinary course of business consistent with past practices; (iv) there has been
no dividend or distribution of any kind declared, paid or made by the Company on
any class of its stock, (v) there has not been (A) any adoption of a new Company
Plan (as hereinafter defined), (B) any amendment to a Company Plan increasing
benefits thereunder, (C) any granting by the Company or any of its Subsidiaries
to any executive officer of the Company or any of its Subsidiaries of any
increase in compensation, except in the ordinary course of business consistent
with prior practice or as was required under employment agreements in effect as
of the date of the Company Balance Sheet Date, (D) any granting by the Company
or any of its Subsidiaries to any such executive officer of any increase in
severance or termination agreements in effect as of the Company Balance Sheet
Date, or (E) any entry by the Company or any of its Subsidiaries into any
employment, severance or termination agreement with any such executive officer,
(vi) there has not been any change in the amount or terms of the indebtedness of
the Company or any of its Subsidiaries from the Balance Sheet Date, and (vii)
other than amendment of
13
the Company Rights Plan pursuant to Sections 3.30 and 5.9 hereof, amendment of
any term of any outstanding security of the Company or any Subsidiary.
(b) Except as and to the extent disclosed in the
Company SEC Reports filed on or before the date hereof, since the Company
Balance Sheet Date there has been no event causing a Material Adverse Effect on
the Company, nor any development that would, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect on the Company.
For purposes of this Agreement, "Material Adverse Change" or "Material Adverse
Effect" mean, when used with respect to the Company, any change or effect that
is or could reasonably be expected (as far as can be foreseen at the time) to be
materially adverse to the business, operations, properties, assets, liabilities,
employee relationships, customer or supplier relationships, earnings or results
of operations, financial projections or forecasts, or the business prospects and
condition (financial or otherwise) of the Company, taken as a whole, other than
such changes, effects or circumstances reasonably attributable to: (i) economic
conditions generally in the United States or foreign economies in any locations
where the Company and its Subsidiaries have material operations or sales; (ii)
conditions generally affecting the industries in which the Company participates,
provided, with respect to clauses (i) and (ii), the changes, effects or
circumstances do not have a materially disproportionate effect (relative to
other industry participants) on the Company, (iii) the payment of any amounts
due to, or the provision of any other benefits to, any officers or employees
under employment contracts, non-competition agreements, employee benefit plans,
severance arrangements or other arrangements in existence on the date of this
Agreement and disclosed in the Company Letter; (iv) any action taken by the
Company with Buyer's express written consent (except that consent to action
taken to respond to a Material Adverse Effect or a Material Adverse Change shall
not be deemed any waiver by Buyer as to the event or circumstance giving rise to
such Material Adverse Effect or Material Adverse Change); (v) the announcement
or pendency of the Merger to the extent the same causes cancellation or delay in
placing customer or potential customer orders, (vi) any change in the trading
price of the Company's common stock in and of itself; or (vii) any failure, in
and of itself, by the Company to meet internal or other estimates, predictions,
projections or forecasts of revenue, net income or any other measure of
financial performance (it being understood that, with respect to clauses (vi)
and (vii), the facts or circumstances giving rise or contributing to such change
in trading price or failure to meet estimates or projections may be deemed to
constitute, or be taken into account in determining whether there has been, a
Material Adverse Effect).
(c) Since the Balance Sheet Date, the Company has not
incurred any liabilities (including Tax liabilities), of any nature, whether
absolute or contingent, of a type required to be recorded on a balance sheet or
disclosed in the notes thereto under GAAP other than liabilities incurred in the
ordinary course, none of which would, in the aggregate, have a Material Adverse
Effect. As of the date hereof, the Company has only the indebtedness for
borrowed money shown in Section 3.7(c) of the Company Letter.
14
SECTION 3.8 PERMITS AND COMPLIANCE. (a) The Company and its
Subsidiaries are and at all times have been in possession of all material
franchises, grants, authorizations, licenses, permits, easements, variances,
exceptions, consents, certificates, approvals and orders of any Governmental
Entity necessary for the Company or any of its Subsidiaries to own, lease and
operate its properties or to carry on its business as it is now being conducted
(the "Company Permits"), and no suspension or cancellation of any of the Company
Permits is pending or, to the knowledge of the Company, threatened. Neither the
Company nor any of its Subsidiaries has been in violation of (i) any Company
Permits, or (ii) any applicable law, ordinance, administrative, or governmental
rule or regulation, including any consumer protection, equal opportunity,
customs, export control, foreign trade, foreign corrupt practices (including the
Foreign Corrupt Practices Act), patient confidentiality, health, health care
industry regulation and third-party reimbursement laws including under any
Federal Health Care Program (as defined in Section 1128B(f) of the U.S. Federal
Social Security Act (together with all regulations promulgated thereunder, the
"SSA")), except in the case of any violations of any law, ordinance,
administrative, or governmental rule or regulation described in (ii) that would
not, individually or in the aggregate, have a Material Adverse Effect.
(b) The Company is not subject to any consent decree
from any Governmental Entity. The Company has not received any warning letter
from the FDA during the last three years. The Company has received no
communication from any regulatory agency or been notified during the last three
years that any product approval is withdrawn or modified or that such an action
is under consideration. Without limiting the foregoing, the Company is in
compliance, in all respects, with all current applicable statutes, rules,
regulations, guidelines, policies or orders administered or issued by the FDA or
comparable foreign Governmental Entity including FDA's Quality System
Regulation, 21 C.F.R. Part 820; the Company does not have knowledge of any facts
which furnish any reasonable basis for any Form FDA-483 observations or
regulatory or warning letters from the FDA, Section 305 notices, or other
similar communications from the FDA or comparable foreign entity; and since
April 30, 1999, there have been no recalls, field notifications, alerts or
seizures requested or threatened relating to the Company's products, except set
forth in Section 3.8 of the Company Letter. The Company's products, where
required, are being marketed under valid pre market notifications under Section
510 (k) of the Federal Food, Drug and Cosmetic Act, 21 U.S.C. ss.360(k), and 21
C.F.R. Part 807, Subpart E ("510(k)'s") or pre-market approval applications
approved by the FDA in accordance with 21 U.S.C.ss.360(e) and 21 C.F.R. Part 814
("PMA's"). All 510(k)'s and PMA's for the Company's products are exclusively
owned by the Company, and there is no reason to believe that FDA is considering
limiting, suspending, or revoking any such 510(k)'s or PMA's or changing the
marketing classification or labeling of any such products. To the knowledge of
the Company, there is no false information or significant omission in any
product application or product-related submission to the FDA or comparable
foreign Governmental Entity. The Company has obtained all necessary regulatory
approvals from any foreign regulatory agencies related to the products
distributed and sold by the Company. Neither the
15
Company nor any Subsidiary, nor the officers, directors, managing employees or
agents (as those terms are defined in 42 C.F.R. ss.1001.1001) of the Company or
any Subsidiary: (i) have engaged in any activities which are prohibited under,
or are cause for civil penalties or mandatory or permissive exclusion from, any
Federal Health Care Program under Sections 1128, 1128A, 1128B, or 1877 of SSA or
related state or local statutes, including knowingly and willfully offering,
paying, soliciting or receiving any remuneration (including any kickback, bribe
or rebate), directly or indirectly, overtly or covertly, in cash or in kind in
return for, or to induce, the purchase, lease, or order, or the arranging for or
recommending of the purchase, lease or order, of any item or service for which
payment may be made in whole or in part under any such program; (ii) have had a
civil monetary penalty assessed against them under Section 1128A of SSA; (iii)
have been excluded from participation under any Federal Health Care Program; or
(iv) have been convicted (as defined in 42 C.F.R. ss. 1001.2) of any of the
categories of offenses described in Sections 1128(a) or 1128(b)(1), (b)(2), or
(b)(3) of SSA.
(c) There are no contracts or agreements of the
Company or its Subsidiaries having terms or conditions which would have a
Material Adverse Effect on the Company or having covenants not to compete that
materially impair the ability of the Company to conduct its business as
currently conducted or would reasonably be expected to impair Buyer's ability to
conduct its businesses in any material respect.
SECTION 3.9 TAX MATTERS. Subject to such exceptions as would
not, individually or in the aggregate, have a Material Adverse Effect, (i) the
Company and its Subsidiaries have timely filed (taking account of extensions to
file that have been properly obtained) all Tax Returns (as hereinafter defined)
required to have been filed by them, and such Tax Returns are correct and
complete in all respects; (ii) the Company and each of its Subsidiaries has
timely paid (taking account of extensions to pay that have been properly
obtained) all Taxes (as hereinafter defined) shown on such Tax Returns as having
been due; (iii) the Company and each of its Subsidiaries has complied in all
respects with all rules and regulations relating to the withholding of Taxes and
the remittance of withheld Taxes; (iv) neither the Company nor any Subsidiary
has waived any statute of limitations in respect of its Taxes, which remains
open; (v) no federal, state, local, or foreign audits or administrative
proceedings, of which the Company or any Subsidiary has notice, are pending with
regard to any Taxes or Tax Returns of the Company or any of its Subsidiaries and
the Company and its Subsidiaries have not received a written notice of any
proposed audit or proceeding from the Internal Revenue Service ("IRS") or any
other taxing authority; (vi) there is currently no limitation on the utilization
of net operating losses, capital losses, built-in losses, tax credits or similar
items of the Company and its Subsidiaries under Sections 269, 382, 383, 384 or
1502 of the Code and the Treasury Regulations thereunder (and comparable
provisions of state, local or foreign law); (vii) the Company and its
Subsidiaries have complied with the requirements of Section 482 of the Internal
Revenue Code of 1986, as amended (the "Code") and similar laws of foreign
jurisdictions with respect to intercompany transactions and have maintained
complete and accurate records to substantiate the pricing of such transactions;
(viii) no claim has been made by any taxing authority in any jurisdiction where
the Company and its subsidiaries do not file Tax
16
Returns that they are or may be subject to Tax by that jurisdiction; (ix)
neither the Company nor any subsidiary has been a member of an affiliated group
of corporations (within the meaning of Section 1504(a)) filing a consolidated
federal income tax return (or a group of corporations filing a consolidated,
combined, or unitary income tax return under comparable provisions of state,
local, or foreign tax law) for any taxable period, other than a group the common
parent of which is Company; (x) the Company does not have any obligation under
any agreement or arrangement with any other Person with respect to Taxes of such
other Person (including pursuant to Treasury Regulations Section 1.1502-6 or
comparable provision of state, local or foreign tax law) including any liability
for Taxes of any predecessor entity; (xiv) the unpaid Taxes of the Company and
its Subsidiaries do not exceed the reserve for Tax liability (excluding any
reserve for deferred Taxes established to reflect temporary differences between
book and Tax income) set forth or included in the Company's most recent balance
sheet as adjusted for the passage of time through the Closing Date, and (xi)
Section 3.9 of the Company Letter sets forth all foreign jurisdictions in which
the Company or any of its subsidiaries are subject to Tax, are engaged in
business or have a permanent establishment. For purposes of this Agreement: (A)
"Taxes" means any federal, state, local, foreign or provincial income, gross
receipts, property, sales, use, license, franchise, employment, payroll,
withholding, alternative or added minimum, ad valorem, value-added, transfer,
excise, capital, or net worth tax, or other tax, custom, duty, governmental fee
or other like assessment or charge of any kind whatsoever, together with any
interest thereon or penalty imposed with respect thereto by any Governmental
Entity, whether computed on a separate, consolidated, unitary, combined, or any
other basis, and shall include any transferee or secondary liability in respect
of any tax (whether imposed by law, contractual agreement, or otherwise), and
(B) "Tax Return" means any return, report or similar statement (including the
attached schedules) required to be filed with respect to any Tax, including any
information return, claim for refund, amended return or declaration of estimated
Tax.
SECTION 3.10 ACTIONS AND PROCEEDINGS. Except as set forth in
Section 3.10 of the Company Letter, there are no outstanding orders, judgments,
injunctions, awards or decrees of any Governmental Entity against or involving
the Company or any of its Subsidiaries, or against or involving any of the
directors, officers, employees, consultants, agents or stockholders of the
Company or any of its Subsidiaries, as such, any of the Company's or its
Subsidiaries properties, assets or business or any Company Plan (as hereinafter
defined). Except for any actions, suits or claims or legal, administrative or
arbitrative proceedings or investigations (including claims for workers'
compensation) for which the Company's reasonably expected uninsured exposure, in
the aggregate, is less than $300,000, there are no actions, suits or claims or
legal, administrative or arbitrative proceedings or investigations (including
claims for workers' compensation) pending or, to the knowledge of the Company,
threatened against or involving the Company or any of its Subsidiaries or any of
its or their respective directors, officers, employees, consultants, agents or
stockholders, as such, or any of the Company's or the Subsidiaries' properties,
assets or business or any Company Plan.
17
SECTION 3.11 CERTAIN AGREEMENTS. (a) Except as set forth in
Section 3.11(a) of the Company Letter, neither the Company or any of its
Subsidiaries is a party to any oral or written agreement, program, plan or other
arrangement relating to the compensation of employees of the Company, including
any employment agreement, severance agreement, stock option plan, stock
appreciation rights plan, restricted stock plan or stock purchase plan, pension
plan (as defined in Section 3(2) of ERISA) or welfare plan (as defined in
Section 3(1) of ERISA) (collectively the "Compensation Agreements"), any of the
benefits of which will be increased, or the vesting of the benefits of which
will be accelerated, by the occurrence of any of the transactions contemplated
by this Agreement or the value of any of the benefits of which will be
calculated on the basis of any of the transactions contemplated by this
Agreement. Section 3.11(a) of the Company Letter sets forth for each officer,
director or employee who is a party to, or will receive benefits under, any
Compensation Agreement as a result of the transactions contemplated herein, the
total amount that each such Person may receive, or is eligible to receive,
assuming that the transactions contemplated by this Agreement are consummated on
the date hereof. There is no current indebtedness owed to the Company or any of
its Subsidiaries from each officer, director or employee of the Company or any
of its Subsidiaries.
(b) Set forth in Section 3.11(b) of the Company
Letter is a list of all Material Contracts to which the Company or any of its
Subsidiaries is a party as of the date hereof or to which any of its assets are
bound. Prior to the date hereof, the Company has made available true and
complete copies of all such Material Contracts to Buyer. "Material Contracts"
means any of the following contracts, agreements or arrangements (other than
purchase or sales orders entered into in the ordinary course), whether written
or oral, currently in effect and binding:
(i) each "material contract" (as such term
is defined in Item 601(b)(10)(ii) of Regulation S-K promulgated by the
Securities Exchange Commission);
(ii) any contract or commitment that
involves a dollar amount in excess of $100,000 or extends for a period of 12
months or more (other than any contract or commitment that is terminable on 90
days notice without penalty);
(iii) any employment contracts with
employees, or other agreement with any agents or consultants involving annual
compensation exceeding $100,000;
(iv) any contract with sales or other
agents, brokers, franchisees, distributors or dealers;
(v) any partnership or joint venture
agreement;
18
(vi) any lease or other occupancy or use
agreements related to Real Estate, or any options, rights of first refusal or
other interests in any Real Estate;
(vii) any agreements giving any party the
right to renegotiate or require a reduction in price or refund of payments
previously made;
(viii) any agreements for the borrowing or
lending of money and any guaranty agreement or other evidence of indebtedness;
(ix) any agreements that contain any
provisions requiring the Company or any of its Subsidiaries to indemnify any
other party thereto other than (A) product warranties of the Company, (B)
indemnities set forth in lease agreements related to Real Estate provided
pursuant to (vi) above;
(x) any agreement for the sale of goods or
services to any Governmental Entity;
(xi) any agreement granting any Person a
Lien on any of the assets of the Company or any of its Subsidiaries;
(xii) any bonus, executive or deferred
compensation, profit sharing, pension or retirement, stock option or stock
purchase, hospitalization, insurance, medical reimbursement or other plan,
agreement or arrangement or practice providing employee or executive benefits to
any officer or employee or former officer or former employee;
(xiii) any non-competition or
confidentiality agreement relating to the business of the Company or any of its
Subsidiaries or any other contract restricting its right to conduct the business
of the Company or any of its Subsidiaries at any time, in any manner or at any
place in the world, or the expansion thereof to other geographical areas,
customers, suppliers or lines of business; or
(xiv) any license agreement granting any
right to use or practice any rights under any Intellectual Property (whether
inbound or outbound).
(c) Except as set forth on Section 3.11(c) of the
Company Letter, and except as would not, individually or in the aggregate, have
a Material Adverse Effect: each Material Contract is a legal, valid and binding
agreement of the Company or its Subsidiaries, neither the Company nor any of its
Subsidiaries (or to the knowledge of the Company, any other party thereto) is in
default under any Material Contract, and none of such Material Contracts has
been canceled by the other party thereto; each Material Contract is in full
force and effect and no event has occurred which, with the passage of time or
the giving of notice or both, would constitute a default, event of default or
other breach by the Company or any Subsidiaries party thereto which would
entitle the other party to such Material Contract to terminate the same or
declare a default or event of default thereunder; to the knowledge of the
officers of the Company and its Subsidiaries,
19
the Company and its Subsidiaries are not in receipt of any claim of default
under any such agreement.
SECTION 3.12 ERISA. (a) Each Company Plan is listed in Section
3.12(a) of the Company Letter. With respect to each Company Plan, the Company
has made available to Buyer a true and correct copy of (i) the three most recent
annual reports (Form 5500) filed with the applicable government agency, (ii)
each such Company Plan that has been reduced to writing and all amendments
thereto, (iii) each trust agreement, insurance contract or administration
agreement relating to each such Company Plan, (iv) a written summary of each
unwritten Company Plan, (v) the most recent summary plan description or other
written explanation of each Company Plan provided to participants, (vi) the most
recent actuarial report or valuation relating to a Company Plan subject to Title
IV of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
(vii) the most recent determination letter or opinion letter and request
therefor, if any, issued by the IRS with respect to any Company Plan intended to
be qualified under section 401(a) of the Code, (viii) any request for a
determination currently pending before the IRS, (ix) all correspondence with the
IRS, the Department of Labor, or Pension Benefit Guaranty Corporation relating
to any outstanding controversy or with respect to any matter that has been
resolved in the previous three years and (x) all forms and certificate samples
used to comply with Sections 4980, 9801 and 9802 of the Code. Each Company Plan
complies in form and has complied in operation in all material respects with
ERISA, the Code and all other applicable statutes and governmental rules and
regulations. Except as set forth in Section 3.12(a) of the Company Letter, no
"reportable event" (within the meaning of Section 4043 of ERISA) has occurred
with respect to any Company Plan for which the 30-day notice requirement has not
been waived. Neither the Company nor any of its ERISA Affiliates (as hereinafter
defined) has had any obligation to contribute to any Company Multiemployer Plan
within the past six (6) years. No action has been taken, or is currently being
considered, to terminate or withdraw from any Company Plan subject to Title IV
of ERISA and there is no reason to believe the Pension Benefit Guaranty
Corporation would initiate the termination of any such Plan. No Company Plan,
nor any trust created thereunder, has incurred any "accumulated funding
deficiency" (as defined in Section 302 of ERISA), whether or not waived.
(b) Except for routine contributions due and owing,
with respect to the Company Plans, no event has occurred and there exists no
condition or set of circumstances in connection with which the Company or any
Subsidiary or ERISA Affiliate or Company Plan fiduciary could be subject to any
material liability under the terms of such Company Plans, ERISA, the Code or any
other applicable law. All Company Plans that are intended to be qualified under
Section 401(a) of the Code have been determined by the IRS to be so qualified,
or a timely application for such determination is now pending and the Company is
not aware of any reason why any such Company Plan is not so qualified in
operation. Except as disclosed in Section 3.12(b) of the Company Letter, neither
the Company nor any of its Subsidiaries or ERISA Affiliates has any material
liability or obligation under any welfare plan to provide benefits after
20
termination of employment to any employee or dependent other than as required by
Section 4980B of the Code.
(c) As used herein, (i) "Company Plan" means a
"pension plan" (as defined in Section 3(2) of ERISA (including a Company
Multiemployer Plan)), a "welfare plan" (as defined in Section 3(1) of ERISA),
and any other written or oral bonus, profit sharing, deferred compensation,
incentive compensation, stock ownership, stock purchase, stock option, phantom
stock, restricted stock, stock appreciation right, holiday pay, vacation,
severance, medical, dental, vision, disability, death benefit, sick leave,
fringe benefit, personnel policy, insurance or other plan, program, agreement,
arrangement or understanding, in each case established or maintained by the
Company or any of its Subsidiaries or ERISA Affiliates or as to which the
Company or any of its Subsidiaries or ERISA Affiliates has contributed or
otherwise may have any liability, (ii) "Company Multiemployer Plan" means a
"multiemployer plan" (as defined in Section 4001(a)(3) of ERISA) to which the
Company or any of its Subsidiaries or ERISA Affiliates is or has been obligated
to contribute or otherwise may have any liability, and (iii) "ERISA Affiliate"
means any trade or business (whether or not incorporated) which would be
considered a single employer with the Company pursuant to Section 414(b), (c),
(m) or (o) of the Code and the regulations promulgated under those sections or
pursuant to Section 4001(b) of ERISA and the regulations promulgated thereunder.
(d) Section 3.12(d) of the Company Letter contains a
list of all (i) severance and employment agreements with employees of the
Company and each Subsidiary and ERISA Affiliate, (ii) severance programs and
policies of the Company and each Subsidiary and ERISA Affiliate with or relating
to its employees and (iii) plans, programs, agreements and other arrangements of
the Company and each Subsidiary and ERISA Affiliate with or relating to its
employees containing change of control or similar provisions.
(e) Except as set forth in Section 3.12(e) of the
Company Letter, neither the Company nor any of its Subsidiaries is a party to
any agreement, contract or arrangement that could result, separately or in the
aggregate, in the payment, acceleration or enhancement of any benefit as a
result of the transactions contemplated hereby including, without limitation,
the payment of any "excess parachute payments" within the meaning of Section
280G of the Code.
(f) There is no Company Plan that is subject to the
laws of a foreign government or jurisdiction.
SECTION 3.13 COMPLIANCE WITH WORKER SAFETY LAWS. The
properties, assets and operations of the Company and its Subsidiaries are in
compliance in all material respects with all applicable federal, state, local
and foreign laws, rules and regulations, orders, decrees, judgments, permits and
licenses relating to public and worker health and safety (collectively, "Worker
Safety Laws"). With respect to such properties, assets and operations, including
any previously owned, leased or operated properties, assets or operations, there
are no past, present or reasonably anticipated future events,
21
conditions, circumstances, activities, practices, incidents, actions or plans of
the Company or any of its Subsidiaries that may interfere with or prevent
compliance or continued compliance in all material respects with applicable
Worker Safety Laws.
SECTION 3.14 PRODUCTS. Since December 31, 1999, other than
service support claims made in the ordinary course of business regarding the
Company's products currently under warranty, neither the Company nor any of its
Subsidiaries has received a claim for or based upon breach of product or service
warranty or guaranty or similar claim, strict liability in tort, negligent
design of product, negligent provision of services or any other allegation of
liability, including or arising from the materials, design, testing,
manufacture, packaging, labeling (including instructions for use), or sale of
its products or from the provision of services; and there is no basis for any
such claim.
SECTION 3.15 LABOR AND EMPLOYMENT MATTERS. (a) Neither the
Company nor any of its Subsidiaries is a party to any collective bargaining
agreement or labor contract. Neither the Company nor any of its Subsidiaries has
engaged in any unfair labor practice with respect to any persons employed by or
otherwise performing services primarily for the Company or any of its
Subsidiaries (the "Company Business Personnel"), and there is no unfair labor
practice complaint or grievance against the Company or any of its Subsidiaries
or by any Person pursuant to the National Labor Relations Act or any comparable
state agency or foreign law pending or threatened in writing with respect to the
Company Business Personnel. There is no labor strike, dispute, slowdown or
stoppage pending or, to the knowledge of the Company, threatened against or
affecting the Company or any of its Subsidiaries that may interfere with the
respective business activities of the Company or any of its Subsidiaries. The
Company and its Subsidiaries have complied in all material respects with all
Applicable Laws relating to the employment of labor.
(b) Except for such incorrect classifications as
would not be expected to result in a liability of more than $300,000 in the
aggregate, (i) all individuals who are performing consulting or other services
for the Company or any Subsidiary of the Company are or were correctly
classified by the Company as either "independent contractors" or "employees" as
the case may be and (ii) all employees of the Company and any Subsidiary of the
Company have been correctly classified as "exempt" or "non-exempt" under the
Fair Labor Standards Act.
(c) Section 3.15(c) of the Company Letter contains a
list of the name of each officer, employee and independent contractor of the
Company and each Subsidiary of the Company, together with such person's position
or function, annual base salary or wages and any incentives or bonus arrangement
with respect to such person. The Company has made available to Buyer all form
1099s filed with the IRS for the past three years.
SECTION 3.16 INTELLECTUAL PROPERTY. (a) As used herein, the
term "Intellectual Property" means all intellectual property rights arising
under the laws of the United States or any other jurisdiction with respect to
the following: (i) trade
22
names, trademarks and service marks (registered and unregistered), domain names,
trade dress and similar rights and applications to register any of the foregoing
(collectively, "Marks"); (ii) patents and patent applications and rights in
respect of utility models or industrial designs (collectively, "Patents"); (iii)
copyrights and registrations and applications therefor (collectively,
"Copyrights"); and (iv) know-how, inventions, discoveries, methods, processes,
technical data, specifications, research and development information,
technology, data bases and other proprietary or confidential information,
including customer lists, in each case that derives economic value (actual or
potential) from not being generally known to other persons who can obtain
economic value from its disclosure, but excluding any Copyrights or Patents that
cover or protect any of the foregoing (collectively, "Trade Secrets").
(b) Section 3.16(b)(1) of the Company Letter sets
forth an accurate and complete list of all registered Marks and applications for
registration of Marks owned by the Company or any of its Subsidiaries
(collectively "Company Registered Marks"), Section 3.16(b)(2) of the Company
Letter sets forth an accurate and complete list of all Patents owned by the
Company or any of its Subsidiaries (collectively the "Company Patents" and,
together with the Company Registered Marks and the Company Patents, the "Company
Registered IP"). Neither the Company nor any Subsidiary owns any registered
Copyrights or pending applications for registration of Copyrights. No Company
Registered IP has been or is now involved in any interference, reissue,
reexamination, opposition or cancellation proceeding and, to the knowledge of
the Company, no such action is or has been threatened with respect to any of the
Company Registered IP. The Company Registered IP relating to the Company's
existing products and products currently under development is valid, subsisting
and, to the knowledge of the Company, enforceable, and no notice or claim
challenging the validity or enforceability or alleging the misuse of any of the
Company Registered IP has been received by the Company or any of its
Subsidiaries. Except as may be set forth in Section 3.16(b) of the Company
Letter, (i) the Company has not taken any action or failed to take any action
that could reasonably be expected to result in the abandonment, cancellation,
forfeiture, relinquishment, invalidation or unenforceability of any of the
Company Registered IP, and (ii) all filing, examination, issuance, post
registration and maintenance fees, annuities and the like associated with or
required with respect to any of the Company Registered IP have been timely paid,
except for any such actions and failures as would not, individually or in the
aggregate, have a Material Adverse Effect.
(c) The Company and its Subsidiaries have taken
reasonable steps to protect their rights in the Intellectual Property owned by
the Company or its Subsidiaries and maintain the confidentiality of all material
Trade Secrets of the Company or its Subsidiaries. All current or former
employees, consultants and contractors who have participated in the creation of
any Intellectual Property that is used by the Company or its Subsidiaries have
entered into proprietary information, confidentiality and assignment agreements
substantially in the Company's standard forms (which have previously been made
available to Buyer).
23
(d) The Company or its Subsidiaries own, or possess
adequate licenses or other valid rights to use, all of the Intellectual Property
that is necessary for the conduct or contemplated conduct of the Company's
businesses. None of the Intellectual Property owned by the Company or its
Subsidiaries is subject to any outstanding order, judgment, or stipulation
restricting the use thereof by the Company or its Subsidiaries.
(e) The rights licensed under each agreement granting
to the Company any material right or license under or with respect to any
Intellectual Property owned by a third party shall be exercisable by the
Surviving Corporation on and after the Closing to the same extent in all
material respects as by the Company or its Subsidiaries prior to the Closing. No
loss or expiration of any such agreement is pending or reasonably foreseeable
or, to the knowledge of the Company, threatened. Any and all license fees,
royalties, or other amounts due with respect to any such licensed Intellectual
Property licensed have been paid in full. Neither the Company nor any of its
Subsidiaries has granted to any third party any exclusive rights under any
Intellectual Property owned by the Company or its Subsidiaries or otherwise
granted any rights under such Intellectual Property outside the ordinary course
of business.
(f) The Intellectual Property owned by or validly
licensed to the Company and its Subsidiaries constitutes all the material
Intellectual Property rights necessary for the conduct of the Company's business
as it is currently conducted and contemplated to be conducted.
(g) None of the products or services distributed,
sold or offered by the Company and its Subsidiaries, nor any technology,
materials or Intellectual Property used, sold, distributed or otherwise
commercially exploited by or for the Company and its Subsidiaries, in any
material respect, infringes upon, misappropriates or violates any Intellectual
Property of any third party or constitutes unfair competition or trade practices
under the laws of any jurisdiction, and neither the Company nor any of its
Subsidiaries has received any notice or claim asserting or suggesting in writing
that any such infringement, misappropriation, violation, or dilution, unfair
competition or trade practices has occurred, nor, to the knowledge of the
Company, is there any reasonable basis therefor. To the knowledge of the
Company, (i) no third party is, in any material respect, misappropriating or
infringing any material Intellectual Property owned by the Company or its
Subsidiaries and (ii) no third party has made any unauthorized disclosure of any
material Trade Secrets of the Company or its Subsidiaries.
SECTION 3.17 REQUIRED VOTE OF COMPANY STOCKHOLDERS. The
affirmative vote of the holders of a majority of the outstanding shares of
Company Common Stock, voting together as a single class (the "Company
Stockholder Approval") is required to approve this Agreement. No other vote of
the security holders of the Company, including without limitation the holders of
Company Preferred Stock, is required by law, the Company Charter or the By-laws
of the Company or otherwise in order for the Company to consummate the Merger
and the transactions contemplated hereby.
24
SECTION 3.18 ACCOUNTS RECEIVABLE. Except as would not result
in a Material Adverse Change in the Company, all of the accounts and notes
receivable of the Company set forth on the books and records of the Company (net
of the applicable reserves reflected on the books and records of the Company and
in the Financial Statements) (i) represent sales actually made or transactions
actually effected in the ordinary course of business for goods or services
delivered or rendered to unaffiliated customers in bona fide arm's length
transactions, (ii) constitute valid claims, and (iii) except as set forth on
Section 3.18(iii) of the Company Letter, are good and collectible at the
aggregate recorded amounts thereof (net of such reserves) without right of
recourse, defense, deduction, return of goods, counterclaim, or offset.
SECTION 3.19 INVENTORIES. Except as would not result in a
Material Adverse Change in the Company, all inventories of the Company consist
of items of merchantable quality and quantity usable or saleable (free of any
material defect or deficiency) in the ordinary course of business, are saleable
at prevailing market prices that are not less than the book value amounts
thereof or the price customarily charged by the Company therefor, conform to the
specifications established therefor, and have been manufactured in accordance
with applicable regulatory requirements. Except as set forth in Section 3.19 of
the Company Letter and except as would not result in a Material Adverse Change
in the Company, the quantities of all inventories, materials, and supplies of
the Company (net of the obsolescence reserves therefor shown in the Financial
Statements and determined in the ordinary course of business consistent with
past practice) are not obsolete, damaged, slow-moving, defective, or excessive,
and are reasonable and balanced in the circumstances of the Company.
SECTION 3.20 ENVIRONMENTAL MATTERS. (a) For purposes of this
Agreement, the following terms shall have the following meanings: (i) "Hazardous
Substances" means (A) petroleum and petroleum products, by-products or breakdown
products, radioactive materials, asbestos-containing materials and
polychlorinated biphenyls, and (B) any other chemicals, materials or substances
regulated as toxic or hazardous or as a pollutant, contaminant or waste under
any applicable Environmental Law; (ii) "Environmental Law" means any law, past,
present or future (up until the Effective Time) and as amended, and any judicial
or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment, or common law, relating to
pollution or protection of the environment, health or safety or natural
resources, including those relating to the use, handling, transportation,
treatment, storage, disposal, release or discharge of Hazardous Substances; and
(iii) "Environmental Permit" means any permit, approval, identification number,
license or other authorization required under any applicable Environmental Law.
(b) The Company and its Subsidiaries are and have
been in compliance in all material respects with all applicable Environmental
Laws, have obtained all Environmental Permits and are in compliance in all
material respects with their requirements, and have resolved all past
non-compliance with Environmental Laws and Environmental Permits without any
pending, on-going or future obligation, cost or liability.
25
(c) Neither the Company nor any of its Subsidiaries
has (i) placed, held, located, released, transported or disposed of any
Hazardous Substances on, under, from or at any of their respective properties or
any other properties other than in compliance with Applicable Law, (ii) any
knowledge or reason to know of the presence of any Hazardous Substances on,
under, emanating from, or at any of their respective properties or any other
property but arising from the Company's or any of its Subsidiaries' current or
former properties or operations, or (iii) any knowledge or reason to know, nor
has it received any written notice (A) of any violation of or liability under
any Environmental Laws, (B) of the institution or pendency of any suit, action,
claim, proceeding or investigation by any Governmental Entity or any third party
in connection with any such violation or liability, (C) requiring the
investigation of, response to or remediation of Hazardous Substances at or
arising from any of the Company's or any of its Subsidiaries' current or former
properties or operations or any other properties, (D) alleging noncompliance by
the Company or any of its Subsidiaries with the terms of any Environmental
Permit in any manner reasonably likely to require significant expenditures or to
result in liability, or (E) demanding payment for response to or remediation of
Hazardous Substances at or arising from any of the Company's or any of its
Subsidiaries' current or former properties or operations or any other
properties, except in each case for the notices set forth in Section 3.20 of the
Company Letter.
(d) No Environmental Law imposes any material
obligation upon the Company or any of its Subsidiaries arising out of or as a
condition to any transaction contemplated by this Agreement, including any
requirement to modify or to transfer any permit or license, any requirement to
file any notice or other submission with any Governmental Entity, the placement
of any notice, acknowledgment or covenant in any land records, or the
modification of or provision of notice under any agreement, consent order or
consent decree.
(e) There are no environmental assessments or audit
reports or other similar studies or analyses in the possession or control of the
Company or any of its Subsidiaries relating to any real property currently or
formerly owned, leased or occupied by the Company or any of its Subsidiaries.
(f) Neither the Company nor any of its Subsidiaries
has exposed any employee or third party to any Hazardous Substances or condition
that has subjected or may subject the Company to material liability under any
Environmental Law.
(g) No underground storage tanks, asbestos-containing
material, or polychlorinated biphenyls have ever been located on property or
properties presently or formerly owned or operated by the Company or any of its
Subsidiaries.
(h) Neither the Company nor any of its Subsidiaries
has agreed to assume, undertake or provide indemnification for any liability of
any other person under any Environmental Law, including any obligation for
corrective or remedial action.
26
(i) Neither the Company nor any of its Subsidiaries
is required to make any material capital or other expenditures to comply with
any Environmental Law nor is there any reasonable basis on which any
Governmental Entity could take action that would require such material capital
or other expenditures.
SECTION 3.21 SUPPLIERS AND DISTRIBUTORS. (a) Neither the
Company nor any of its Subsidiaries has received any notice, oral or written, or
has any reason to believe that any significant supplier, including without
limitation any sole source supplier, will not sell raw materials, supplies,
merchandise and other goods to the Company of any of its Subsidiaries at any
time after the Effective Time on terms and conditions substantially similar to
those used in its current sales to the Company and its Subsidiaries, subject
only to general and customary price increases, except for supplies as to which
comparable raw materials, supplies, merchandise, or other goods are readily
available from other sources on comparable terms and conditions.
(b) Neither the Company nor any of its Subsidiaries
has received any notice, oral or written, or has any reason to believe that any
distributors, sales representatives, sales agents, or other third party sellers,
will not sell or market the products or services of the Company or its
Subsidiaries at any time after the Effective Time on terms and conditions
substantially similar to those used in the current sales and distribution
contracts of the Company and its Subsidiaries, except as would not, individually
or in the aggregate, have a Material Adverse Effect.
SECTION 3.22 INSURANCE. Section 3.22 of the Company Letter
contains a list of all policies of title, property, fire, casualty, liability,
life, business interruption, product liability, sprinkler and water damage,
workmen's compensation, libel and slander, and other forms of insurance of any
kind relating to the business and operations of the Company or any of its
Subsidiaries in each case which are in force as of the date hereof (the
"Insurance Policies"). All of the Insurance Policies are maintained with
reputable insurance carriers, and provide full and adequate coverage for all
normal risks incident to the business of the Company and its Subsidiaries and
their respective properties and assets. The Company or a Subsidiary of the
Company has made any and all payments required to maintain the Insurance
Policies in full force and effect. Neither the Company nor any of its
Subsidiaries has received written notice of default under any Insurance Policy,
and has not received written notice or, to the knowledge of the Company, oral
notice of any pending or threatened termination or cancellation, coverage
limitation or reduction or premium increase with respect to any Insurance
Policy.
SECTION 3.23 TRANSACTIONS WITH AFFILIATES. (a) For purposes of
this Section 3.23, the term "Affiliated Person" means (i) any holder of more
than 5% of the Company Capital Stock, (ii) any director or officer of the
Company, (iii) any member of the immediate family of any of such persons, or
(iv) any Person that is controlled by any of the foregoing.
(b) Since the Company Balance Sheet Date, the Company
and its Subsidiaries have not, in the ordinary course of business or otherwise,
(i) purchased,
27
leased or otherwise acquired any property or assets or obtained any services
from, (ii) sold, leased or otherwise disposed of any property or assets or
provided any services to (except with respect to remuneration for services
rendered in the ordinary course of business as director, officer or employee of
the Company or any Subsidiary), (iii) entered into or modified in any manner any
contract with, or (iv) borrowed any money from, or made or forgiven any loan or
other advance (other than expenses or similar advances made in the ordinary
course of business) to, any Affiliated Person.
(c) (i) the contracts of the Company and its
Subsidiaries do not include any obligation or commitment between the Company or
any Subsidiary and any Affiliated Person, (ii) the assets of the Company or any
Subsidiary do not include any receivable or other obligation or commitment from
an Affiliated Person to the Company or any Subsidiary, and (iii) the liabilities
of the Company and its Subsidiaries do not include any payable or other
obligation or commitment from the Company or any Subsidiary to any Affiliated
Person.
(d) No Affiliated Person of any of the Company or any
Subsidiary is a party to any contract with any customer or supplier of the
Company or any Subsidiary that affects in any manner the business, financial
condition or results of operation of the Company or any Subsidiary.
SECTION 3.24 ACCURACY OF INFORMATION. (a) This Agreement,
together with the Company Letter, does not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements contained therein, in light of the circumstances under which they are
made, not misleading. The documents described or listed in the Company Letter
that have been previously made available to Buyer are accurate and complete
copies thereof.
(b) None of the information supplied by the Company
for inclusion or incorporation by reference in the proxy statement relating to
the matters to be submitted to the Company's stockholders at the Company
Stockholder Meeting (the "Proxy Statement") will, at the date mailed to
stockholders of the Company at the time of the Company Stockholder Meeting,
contain any untrue statement of material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein in light of the circumstances under whey they are made not misleading.
The Proxy Statement will comply, as of its mailing date, as to form in all
material respects with the provisions of the Exchange Act and the rules and
regulations promulgated thereunder. The representations and warranties contained
in this Section 3.22 do not apply to statements or omissions included in the
Proxy Statement based upon information furnished to the Company by Buyer
specifically for use therein.
SECTION 3.25 TITLE TO AND SUFFICIENCY OF ASSETS. (a) As of the
date hereof, the Company and its Subsidiaries own, and as of the Effective Time
the Company and its Subsidiaries will own, good and marketable title to all of
their assets constituting personal property (excluding, for purposes of this
sentence, assets held under leases), free and clear of any and all mortgages,
liens, encumbrances, charges, claims,
28
restrictions, pledges, security interests or impositions (collectively,
"Liens"), except as set forth in Section 3.25(a) of the Company Letter and
except for Permitted Liens. Such assets, together with all assets held by the
Company and its Subsidiaries under leases and licenses of Intellectual Property,
include all tangible and intangible personal property, contracts and rights
necessary for the operation of the business of the Company as presently
conducted.
(b) As of the date hereof, the Company does not own
any Real Estate. All Real Estate leases held by the Company and its
Subsidiaries, are adequate for the operation of the businesses of the Company as
presently conducted. The leases to all Real Estate occupied by the Company and
its Subsidiaries are listed in Section 3.25(b) of the Company Letter in full
force and effect and no event has occurred which with the passage of time, the
giving of notice, or both, would constitute a default or event of default by the
Company or any Subsidiary or, to the knowledge of the Company, any other Person
who is a party signatory thereto. For purposes of this Agreement, "Real Estate"
means, with respect to the Company or any Subsidiary, as applicable, all of the
fee, if any, or leasehold ownership right, title and interest of such Person, in
and to all real estate and improvement owned or leased by any such Person and
which is used by any such Person in connection with the operation of its
business.
(c) As used herein, "Permitted Liens" shall mean (a)
Liens for Taxes or governmental assessments, charges or claims the payment of
which is not yet due, and (b) statutory Liens of landlords and Liens of
carriers, warehousemen, mechanics, materialmen and other similar Persons and
other Liens imposed by Applicable Law incurred in the ordinary course of
business which are either for sums not yet delinquent or are immaterial in
amount and being contested in good faith.
SECTION 3.26 BROKERS. Except as disclosed in Section 3.26 of
the Company Letter, no broker, investment banker or other Person is entitled to
any broker's, finder's or other similar fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Company, and Section 3.26 of the Company Letter sets forth the
maximum amount payable to any broker, investment banker or other Person in
connection herewith.
SECTION 3.27 INTERNAL CONTROLS AND PROCEDURES. The Company has
designed and maintains "disclosure controls and procedures" as defined in Rules
13(a)-15(e) and 15(d)-15(e) of the Exchange Act) required to ensure that
material information relating to the Company and its Subsidiaries is made known
to the executive officers of the Company by others within those entities. The
executive officers of the Company have, within 90 days of the date hereof,
evaluated the effectiveness of the Company's internal controls and have
determined that there are no significant deficiencies in the design or operation
of internal controls which could adversely affect the Company's ability to
record, process, summarize, and report financial data. The officers of the
Company have identified for the Company's auditors any material weaknesses in
internal controls and any fraud, whether or not material, that involves
management or other employees who have a significant role in the Company's
internal controls.
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SECTION 3.28 CERTAIN BUSINESS PRACTICES. None of the Company,
any of its Subsidiaries or, to the Company's knowledge, any directors or
officers, agents or employees of the Company or any of its Subsidiaries, has (i)
used any funds for unlawful contributions, gifts, entertainment or other
unlawful expenses related to political activity; (ii) made any unlawful payment
to foreign or domestic government officials or employees or to foreign or
domestic political parties or campaigns or violated any provision of the Foreign
Corrupt Practices Act of 1977, as amended; or (iii) made any payment in the
nature of criminal bribery.
SECTION 3.29 OPINION OF FINANCIAL ADVISOR. Xxxxx Xxxxxxx & Co.
(the "Company Financial Advisor") has delivered to the Company Board its opinion
to the effect that as of the date such opinion was delivered, the consideration
to be received in the Merger is fair, from a financial point of view, to the
holders of shares of Company Common Stock (the "Company Fairness Opinion"). The
Company has been authorized by the Company Financial Advisor to permit, subject
to the prior review and consent by the Company Financial Advisor (such consent
not to be unreasonably withheld), the inclusion of the Company Fairness Opinion
(or a reference thereto) in the Proxy Statement. As of the date hereof, such
opinion has not been withdrawn, revoked or modified. A true and complete copy of
the Company Fairness Opinion will be delivered to Buyer promptly after receipt
by the Company of written confirmation thereof.
SECTION 3.30 COMPANY RIGHTS AGREEMENT. The Company has amended
the Company Rights Agreement (a copy of which amendment has been provided to
Buyer on or prior to the date hereof) so that the entering into of this
Agreement, and the consummation of the transactions contemplated hereby and
thereby, do not and will not on the date hereof or as the result of the passage
of time (i) result in any person being deemed to be an "Acquiring Person" (as
defined in the Company Rights Agreement); (ii) result in the ability of any
person to exercise any Company Rights under the Company Rights Agreement; (iii)
enable or require the Company Rights to separate from the shares of Company
Common Stock to which they are attached or to be triggered or become
exercisable; or (iv) enable the Company to exchange any Company Rights for
shares of Company Common Stock, pursuant to Section 24 of the Company Rights
Agreement or otherwise. No "Distribution Date" (as such term is defined in the
Company Rights Agreement) has occurred or will occur as a result of the entering
into of this Agreement. Copies of the Company Rights Agreement, and all
amendments thereto, have previously been made available to Buyer.
SECTION 3.31 TAKEOVER STATUTES. The Company Board has taken
all actions so that the restrictions contained in Section 203 of the DGCL
applicable to a "business combination" (as defined in such Section 203), and any
other similar Applicable Law, will not apply to Buyer or Sub with respect to the
execution, delivery or performance of this Agreement and the consummation of the
Merger and the other transactions contemplated hereby.
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
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SECTION 4.1 CONDUCT OF BUSINESS BY THE COMPANY PENDING THE
MERGER. Except as expressly permitted by clauses (a)(i) through (xxviii) of this
Section 4.1, during the period from the date of this Agreement through the
Effective Time, the Company shall, and shall cause its Subsidiaries to, carry on
its business in the ordinary course of its business as currently conducted and,
to the extent consistent therewith, use its commercially reasonable efforts to
preserve intact its current business organizations, keep available the services
of its current officers and employees and preserve its relationships with
customers, suppliers and others having business dealings with it to the end that
its goodwill and ongoing business shall be unimpaired in all material respects
at the Effective Time. Without limiting the generality of the foregoing, and
except as otherwise expressly contemplated by this Agreement or as set forth in
the Company Letter (with specific reference to the applicable subsection below),
prior to the Effective Time:
(a) The Company shall not, and shall cause its
Subsidiaries not to, without the prior written consent of Buyer:
(i) (A) declare, set aside or pay any
dividends on, or make any other actual, constructive or deemed distributions in
respect of, any of its capital stock, or otherwise make any payments to its
stockholders in their capacity as such, (B) split, combine or reclassify any of
its capital stock or issue or authorize the issuance of any other securities in
respect of, in lieu of or in substitution for shares of its capital stock, or
(C) purchase, redeem or otherwise acquire any shares of capital stock of the
Company or any other securities thereof or any rights, warrants or options to
acquire any such shares or other securities (other than the redemption or
repurchase at cost of shares repurchased from employees upon termination of
employment);
(ii) issue, deliver, sell, pledge, dispose
of or otherwise encumber any shares of its capital stock, any other voting
securities or equity equivalent or any securities convertible into, or any
rights, warrants or options (including options under the Company Stock Option
Plans) to acquire any such shares, voting securities, equity equivalent or
convertible securities, other than the issuance of shares of Company Common
Stock upon the exercise of Company Stock Options outstanding on the date of this
Agreement in accordance with their current terms;
(iii) amend the Company Charter or by-laws;
(iv) acquire or agree to acquire by merging
or consolidating with, or by purchasing a substantial portion of the assets of
or equity in, or by any other manner, any business or any corporation, limited
liability company, partnership, association or other business organization or
division thereof or otherwise acquire or agree to acquire any assets not in the
ordinary course of business;
(v) alter through merger, liquidation,
reorganization, restructuring or any other fashion the corporate structure of
any Subsidiary of the Company (other than any wholly owned Subsidiary or foreign
Subsidiary that would be
31
wholly owned but for a nominal number of director or similar shares being owned
by a foreign national as required by the law of the jurisdiction of such foreign
Subsidiary's organization);
(vi) sell, lease or otherwise dispose of, or
agree to sell, lease or otherwise dispose of, any of its assets, other than
sales of inventory that are in the ordinary course of business consistent with
past practice;
(vii) incur any indebtedness for borrowed
money, guarantee any such indebtedness or make any loans, advances or capital
contributions to, or other investments in, any other Person, except pursuant to
existing lines of credit and other outstanding debt instruments as of the date
of this Agreement;
(viii) adopt a plan of complete or partial
liquidation, dissolution, merger, consolidation, restructuring, recapitalization
or other reorganization (other than the Merger) or otherwise permit its
corporate existence, or any of the rights or franchises or any license, permit
or authorization under which the business operates to be suspended, lapsed or
revoked;
(ix) enter into or adopt any, or amend any
existing, severance plan, agreement or arrangement or enter into or amend any
Company Plan, employment, or any consulting agreement;
(x) hire additional employees, consultants
or other independent contractors or increase the compensation payable or to
become payable to its directors, officers or employees (except for the hiring of
new employees in the ordinary course of business consistent with past practice
each of whose compensation does not exceed $80,000 per year, and increases in
the ordinary course of business consistent with past practice in salaries or
wages of employees of the Company who are not officers of the Company) or grant
any severance or termination pay to, or enter into any employment or severance
agreement with, any director or officer of the Company, or establish, adopt,
enter into, or, except as may be required to comply with Applicable Law, amend
in any material respect or take action to enhance in any material respect or
accelerate any rights or benefits under, any labor, collective bargaining,
bonus, profit sharing, thrift, compensation, stock option, restricted stock,
pension, retirement, deferred compensation, employment, termination, severance
or other plan, agreement, trust, fund, policy or arrangement for the benefit of
any director, officer or employee;
(xi) knowingly violate or knowingly fail to
perform any obligation or duty imposed upon it by any applicable material
federal, state or local law, rule, regulation, guideline or ordinance;
(xii) make any change to accounting policies
or procedures (other than actions required to be taken by generally accepted
accounting principles);
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(xiii) prepare or file any Tax Return
inconsistent with its past practice in preparing or filing similar Tax Returns
in prior periods or, on any such Tax Return, take any position, make any
election, or adopt any method that is inconsistent with positions taken,
elections made or methods used in preparing or filing similar Tax Returns in
prior periods;
(xiv) fail to file in a timely manner any
Tax Returns (except as to filings for which a proper extension has been
obtained) that become due or fail to pay any Taxes that become due;
(xv) make or rescind any express or deemed
election relating to Taxes or change any of its methods of reporting income or
deductions for Tax purposes;
(xvi) commence any litigation or proceeding
with respect to any material Tax liability or settle or compromise any material
Tax liability or commence any other litigation or proceedings or settle or
compromise any other material claims or litigation;
(xvii) except for sales of inventory in the
ordinary course of business and
the hiring of employees in the ordinary course of business as permitted in
subsection (x), enter into, renew, terminate or amend any Material Contract; or
purchase or lease any real property;
(xviii) pay, discharge or satisfy any
material claims, liabilities or obligations (absolute, accrued, asserted or
unasserted, contingent or otherwise), other than the payment, discharge or
satisfaction, in the ordinary course of business consistent with past practice
or in accordance with their terms, of liabilities reflected or reserved against
in, or contemplated by, the most recent financial statements (or the notes
thereto) of the Company included in the Financial Statements or incurred in the
ordinary course of business consistent with past practice;
(xix) create or form any Subsidiary or make
any other investment in another Person (other than short term investments for
the purpose of cash management only);
(xx) modify the standard warranty terms for
products sold by the Company or amend or modify any product warranties in effect
as of the date hereof in any manner that is adverse to the Company;
(xxi) make or authorize any new capital
expenditure or expenditures that individually is in excess of $80,000 or in the
aggregate are in excess of $160,000;
(xxii) allow any of the Company's
Intellectual Property rights relating to the Company's existing products or
products currently under development to be disclosed, other than under
appropriate non-disclosure agreements,
33
abandoned, or otherwise become unavailable to the Company on the same terms and
conditions as such rights were available to the Company as of the date of this
Agreement;
(xxiii) (A) enter into any exclusive
license, distribution, marketing or sales agreements; (B) enter into any
commitment to any person to (1) develop software without charge, (2) incorporate
any software into any of the Company's products other than pursuant to valid
license agreements executed in the ordinary course of business, or (3) enter
into any license, distributorship, or sales agreement that by its terms would
purport to relate to any of the products of Buyer or its affiliates; (C) sell,
transfer or otherwise dispose of any Intellectual Property other than sales of
its products and other non-exclusive licenses that are in the ordinary course of
business and consistent with past practices, or (D) grant "most favored nation"
pricing to any Person;
(xxiv) allow any insurance policy relating
to the Company's business to be amended or terminated without replacing such
policy without a policy providing at least equal coverage, insuring comparable
risks and issued by an insurance company financially comparable to the prior
insurance company;
(xxv) enter into or amend any contract,
agreement, commitment or arrangement with any Affiliated Person;
(xxvi) fail to make in a timely manner any
filings with the SEC required under the Securities Act or the Exchange Act or
the rules and regulations promulgated thereunder;
(xxvii) knowingly take any action that would
result in a failure to maintain trading of the Company Common Stock on the
Nasdaq National Market; or
(xxviii)authorize, propose (other than in a
request to Buyer for consent pursuant to this Section 4.1(a)) or announce an
intention to do any of the foregoing, or enter into any contract, agreement,
commitment or arrangement to do any of the foregoing.
(b) The Company shall:
(i) maintain its assets and properties in
the ordinary course of business in the manner historically maintained,
reasonable wear and tear, damage by fire and other casualty excepted;
(ii) promptly repair, restore or replace all
assets and properties in the ordinary course of business consistent with past
practice;
(iii) upon any damage, destruction or loss
to any of its assets or properties, apply any and all insurance proceeds, if
any, received with respect thereto to the prompt repair, replacement and
restoration thereof;
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(iv) comply with all Applicable Laws;
(v) take all actions necessary to be in
compliance with all Material Contracts and to maintain the effectiveness of all
Company Permits;
(vi) notify Buyer in writing of the
commencement of any action, suit, claim, investigation or other like proceeding
by or against the Company; and
(vii) pay accounts payable and pursue
collection of its accounts receivable in the ordinary course of business,
consistent with past practices.
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.1 ACCESS TO INFORMATION. (a) During the period from
the date of this Agreement through the Effective Time (the "Pre-Closing
Period"), the Company and each of its Subsidiaries shall afford to the Buyer and
its Subsidiaries and each of their accountants, counsel, financial advisors and
other representatives of Buyer, reasonable access, and permit them to make such
inspections as they may reasonably require of all of their respective
properties, books, contracts, commitments and records (including engineering
records and Tax Returns and the work papers of independent accountants, if
available and subject to the consent of such independent accountants) and,
during such period, the Company shall, and shall cause its Subsidiaries to
promptly make available to Buyer all personnel of the Company or its
Subsidiaries knowledgeable about matters relevant to such inspections as
reasonably requested by Buyer. No investigation pursuant to this Section 5.1
shall affect any representation or warranty in this Agreement of any party
hereto or any condition to the obligations of the parties hereto. All
information obtained by Buyer and its representatives pursuant to this Section
5.1 shall be kept confidential in accordance with the Confidentiality Agreement
dated July 12, 2004 between Buyer and the Company (the "Confidentiality
Agreement").
(b) The Company agrees to provide Buyer and its
agents and representatives with reasonable access to its employees during normal
working hours following the date of this Agreement, and after consultation with
the Company to, among other things, deliver offers of continued employment
contingent upon Closing and to provide information to such employees about
Buyer; PROVIDED, HOWEVER, that the Company and its agents and representatives
shall be permitted to participate in such activities.
(c) During the Pre Closing Period, the Company shall,
and shall cause its Subsidiaries to, permit Buyer's senior officers to meet
during normal working hours with the controller and other officers of the
Company responsible for the Company's financial statements and the internal
controls of the Company and its Subsidiaries to discuss such matters as Buyer
may deem necessary or appropriate for Buyer to satisfy its obligations under the
Sarbanes Oxley Act.
35
SECTION 5.2 FEES AND EXPENSES. Whether or not the Merger is
consummated, all costs and expenses incurred in connection with this Agreement
in accordance with its terms and the transactions contemplated hereby, including
the fees and disbursements of counsel, financial advisors and accountants, shall
be paid by the party incurring such costs and expenses.
SECTION 5.3 NO SOLICITATION OR NEGOTIATION. (a) Between the
date hereof and the earlier of the termination of this Agreement and the Closing
Date, the Company will not, and will cause its Subsidiaries, and each of their
respective officers, directors, employees, agents, representatives or affiliates
not to, directly or indirectly, take any of the following actions with any
Person other than Buyer and Sub: (i) solicit, initiate, entertain, encourage or
facilitate any proposals or offers from, or conduct discussions with or engage
in negotiations with any Person relating to an Alternative Transaction; (ii)
provide information with respect to it to any Person, other than Buyer and Sub,
relating to, or otherwise cooperate with, facilitate or encourage any effort or
attempt by any such Person with regard to, an Alternative Transaction; or (iii)
enter into any agreement with any Person providing for an Alternative
Transaction. Notwithstanding the foregoing, the Company Board will be permitted,
prior to obtaining Company Stockholder Approval, and subject to compliance with
the other terms of this Section 5.3 and to first entering into a confidentiality
agreement with the Person proposing an Alternative Transaction (an "Acquisition
Proposal") on terms substantially similar to, and no less favorable to the
Company than, those contained in the Confidentiality Agreement, in response to a
bona fide written Acquisition Proposal that is, or could reasonably be believed
to constitute, a Superior Proposal to consider and participate in discussions
and negotiations with respect to such proposal and provide information in
connection therewith.
(b) As used in this Agreement:
(i) "Alternative Transaction" means any of
(i) a transaction pursuant to which any Person (or group of Persons) other than
Buyer or Sub, directly or indirectly, acquires or would acquire more than 10% of
the outstanding shares of Company Common Stock or outstanding voting power or of
any new series or new class of preferred stock that would be entitled to a class
or series vote with respect to the Merger, whether from the Company or pursuant
to a tender offer or exchange offer or otherwise, (ii) a merger, reorganization,
share exchange, consolidation or other business combination involving the
Company (other than the Merger), (iii) any transaction pursuant to which any
Person (or group of Persons) other than Buyer or Sub acquires or would acquire
control of assets (including for this purpose the outstanding equity securities
of any Subsidiary) of the Company representing more than 10% of the fair market
value of all the assets, net revenues or net income of the Company on a
consolidated basis immediately prior to such transaction, (iv) any other
consolidation, business combination, recapitalization or similar transaction
involving the Company or any of its Subsidiaries, other than the transactions
contemplated by this Agreement, as a result of which the holders of shares of
Company Capital Stock immediately prior to such transaction do not, in the
aggregate, own at least 90% of the outstanding shares of capital
36
stock and outstanding voting power of the surviving or resulting entity in such
transaction immediately after the consummation thereof, or (v) any other
transaction that is conditioned or predicated on the Merger not being completed
in accordance with the terms of this Agreement or is intended or could
reasonably be expected to result in the Merger not being so completed; and
(ii) "Superior Proposal" means a bona fide
written proposal (not solicited by or on behalf of the Company or any of its
Subsidiaries or any of their respective officers, directors, employees, agents
or representatives after the date hereof or otherwise resulting from a breach of
Section 5.3(a)) made by a third party after the date of this Agreement that if
consummated would result in such third party (or the holders of its equity)
owning, directly or indirectly, more than 50% of the shares of Company Capital
Stock then outstanding (or of the surviving entity in a merger or the direct or
indirect parent of the surviving entity in a merger) or all or substantially all
the assets of the Company and its Subsidiaries, taken as a whole, which the
Company Board determines in good faith (after consultation with a financial
advisor of nationally recognized reputation and outside legal counsel) to be (A)
more favorable to the stockholders of the Company from a financial point of view
than the Merger and the transactions contemplated by this Agreement (taking into
account all the terms and conditions of such proposal and this Agreement
including any changes to the financial terms of this Agreement proposed by Buyer
in response to such offer or otherwise), and (B) reasonably capable of being
completed, taking into account all financial, legal, regulatory and other
aspects of such proposal.
(c) The Company will notify Buyer as promptly as
practicable (but in no event later than 48 hours) orally, to be promptly
followed up in writing, after receipt of any Acquisition Proposal, or any
material modification of or material amendment to any Acquisition Proposal, or
any request for non-public information relating to the Company or any of its
Subsidiaries or for access to the properties, books or records of the Company or
of its Subsidiaries by any Person that informs the Company Board that it is
considering making or has made an Acquisition Proposal. Such notice to Buyer
will be made orally and in writing, and will indicate the identity of the Person
making the Acquisition Proposal or intending to make or considering making an
Acquisition Proposal or requesting non-public information or access to the books
and records of the Company or any of its Subsidiaries and the material terms
(including the amount) of any such Acquisition Proposal or modification or
amendment to an Acquisition Proposal. The Company will keep Buyer informed, on a
reasonably current basis, of any material changes in the status and any material
changes or modifications in the terms of any such Acquisition Proposal,
indication or request. The Company will also as promptly as practicable, and in
any event within 48 hours, notify Buyer, orally and promptly followed up in
writing, if it enters into discussions or negotiations concerning any
Acquisition Proposal in accordance with Section 5.3(a).
(d) Neither the Company Board nor any committee
thereof will (i) (A) withdraw (or modify in a manner adverse to Buyer) the
recommendation by the Company Board or any such committee in favor of this
Agreement and the Merger, (B)
37
determine that this Agreement or the Merger is no longer advisable, (C)
recommend that the stockholders of the Company reject this Agreement or the
Merger, (D) resolve, agree or propose publicly to take any such actions, or (E)
recommend the approval or adoption of any Acquisition Proposal, unless in each
case, a bona fide written Acquisition Proposal that constitutes a Superior
Proposal has been made and the Company Board or a committee thereof determines
in good faith (after consultation with outside legal counsel) that failure to
take any such action would be inconsistent with its fiduciary duties under
Applicable Law, (ii) adopt or approve any Acquisition Proposal or withdraw its
approval of this Agreement or the Merger (except as permitted under Section
5.3(d)(i), or resolve or agree to take any such actions except as specifically
permitted by this Section 5.3(d), (iii) without limiting Section 5.3(d)(i),
propose publicly to adopt or approve any Acquisition Proposal or propose
publicly to withdraw its approval of this Agreement or the Merger or resolve or
agree to take any such actions, or (iv) cause or permit the Company or any of
its Subsidiaries to enter into any letter of intent, memorandum or
understanding, agreement in principle, acquisition agreement, merger agreement,
option agreement, joint venture agreement, partnership agreement, or another
agreement (each, an "Alternative Acquisition Agreement") constituting or related
to, or which is intended or reasonably likely to lead to any Alternative
Transaction or Acquisition Proposal (other than a confidentiality agreement
referred to in Section 5.3(a)) or resolve or agree to take any such actions
(each board action set forth in clauses (i)-(iv) of this Section 5.3(d) being
referred to herein as a "Company Adverse Recommendation Change").
Notwithstanding the foregoing, prior to obtaining Company Stockholder Approval,
the Company Board may in response to a bona fide written Acquisition Proposal
that constitutes a Superior Proposal, terminate this Agreement pursuant to
Section 7.1(g) and concurrently approve, recommend and authorize the Company to
enter into a binding Alternative Acquisition Agreement containing the terms of a
Superior Proposal; PROVIDED, HOWEVER, that (1) the Company Board may not
terminate this agreement pursuant to Section 7.1(g), and any purported
termination pursuant to Section 7.1(g) will be void and of no force or effect,
unless the Company has complied with all provisions of this Section 5.3,
including the notification provisions in this Section 5.3, and with all
applicable requirements of Section 7.5 (including the payment of the Termination
Fee prior to or simultaneously with such termination) and (2) the Company may
not exercise its right to terminate this Agreement pursuant to Section 7.1(g),
(x) until after the second business day following Buyer's receipt of written
notice from the Company advising Buyer that the Company Board has received a
Superior Proposal and that the Company Board will, subject to any action taken
by Buyer pursuant to this sentence, cause the Company to accept such Superior
Proposal, which notice will specify the terms and conditions of the Superior
Proposal and identify the Person making such a Superior Proposal (a "Notice of
Superior Proposal") (it being understood and agreed that any amendment to the
price or any other material term of a Superior Proposal will require a new
Notice of Superior Proposal and a new two business day period), and (y) unless
after such second business day such Superior Proposal remains a Superior
Proposal and the Company Board so determines in accordance with the definition
of "Superior Proposal". Notwithstanding the foregoing, unless and until this
Agreement is terminated in accordance with Section 7.1(g), nothing in this
Section 5.3 will affect the obligations of the Company or the rights of Buyer or
38
Sub under any other provision of this Agreement, including the obligation of the
Company to seek the Company Stockholder Approval pursuant to Section 5.6.
(e) The Company will, and will cause its Subsidiaries
and their respective officers, directors, agents and representatives to,
immediately cease and cause to be terminated any existing discussions or
negotiations with any persons (other than Buyer and its representatives)
conducted heretofore with respect to any of the foregoing and will use its best
efforts to cause all persons other than Buyer who have been furnished with
confidential information regarding the Company in connection with the
solicitation of or discussions regarding an Acquisition Proposal within the 10
months prior to the date hereof promptly to return or destroy such information.
The Company agrees not to, and to cause its Subsidiaries not to, release any
third party from the confidentiality and stand still provisions of any agreement
to which the Company or its Subsidiaries is a party or becomes a party, and will
immediately take all steps necessary to terminate any approval that may have
heretofore been given under any such provisions authorizing any Person to make
an Acquisition Proposal, unless the Company Board determines in good faith that
such Acquisition Proposal is a Superior Proposal.
(f) The Company will ensure that the officers,
directors and all employees agents and representatives of the Company or its
Subsidiaries are aware of the restrictions in this Section 5.3 as reasonably
necessary to avoid violations thereof. Any violation of the restrictions set
forth in this Section 5.3 by any officer, director, employee, agent or
representative (including any investment banker, financial advisor, attorney,
accountant, or other retained representative) of the Company or its
Subsidiaries, at the direction or with the consent of the Company or its
Subsidiaries, will be deemed to be a breach of this Section 5.3 by the Company.
SECTION 5.4 COOPERATION. (a) Subject to the terms and
conditions herein provided, each of the parties hereto agrees to use all
reasonable efforts to take or cause to be taken all actions and to do or cause
to be done all things reasonably necessary, proper or advisable under Applicable
Law to consummate and make effective the transactions contemplated by this
Agreement and each of the other Transaction Documents, including using all
reasonable efforts to do the following: (i) cooperate in the preparation and
filing of any filings or notifications that must be made under the HSR Act or
otherwise to any Governmental Entities; (ii) cooperate in the preparation and
filing of the Proxy Statement; (iii) obtain consents of all third parties and
Governmental Entities necessary, proper, advisable or reasonably requested by
Buyer or the Company, for the consummation of the transactions contemplated by
this Agreement; (iv) contest any legal proceeding relating to the Merger; and
(v) execute any additional instruments reasonably necessary to consummate the
transactions contemplated hereby. The Company agrees to use all reasonable
efforts to encourage its employees to accept any reasonable offers of employment
extended by Buyer. If at any time after the Effective Time any further action is
necessary to carry out the purposes of this Agreement, the proper officers and
directors of each party hereto shall take all such necessary action.
39
(b) Buyer and the Company will consult and cooperate
with one another, and consider in good faith the views of one another, in
connection with any analyses, appearances, presentations, letters, white papers,
memoranda, briefs, arguments, opinions or proposals made or submitted by or on
behalf of any party hereto in connection with proceedings under or relating to
any foreign, federal, or state antitrust, competition, or fair trade law. In
this regard but without limitation, each party hereto shall promptly inform the
other of any material communication between such party and the Federal Trade
Commission, the Antitrust Division of the United States Department of Justice,
or any other federal, foreign or state antitrust or competition Governmental
Entity regarding the transactions contemplated herein.
(c) Notwithstanding any provision of this Agreement
or otherwise, in connection with the compliance by the parties hereto with any
Applicable Law (including the HSR Act and similar merger notification laws or
regulations of any foreign Governmental Entity) and obtaining the consent or
approval of any Governmental Entity whose consent or approval may be required to
consummate the transactions contemplated by this Agreement, Buyer shall not be
required, or be construed to be required, to proffer to, or agree to: (i) sell
or hold separate, or agree to sell or hold separate, before or after the
Effective Time, any assets, businesses or any interests in any assets or
businesses, of Buyer, the Company or any of their respective affiliates (or to
consent to any sale, or agreement to sell, by Buyer or the Company of any assets
or businesses, or any interests in any assets or businesses), or any change in
or restriction on the operation by Buyer or the Company of any assets or
businesses, (ii) enter into any agreement or be bound by any obligation that, in
Buyer's good faith judgment, would likely have an adverse effect on the benefits
to Buyer of the transactions contemplated by this Agreement, or (iii) take any
other action that, in Buyer's good faith judgment, would be adverse to Buyer.
SECTION 5.5 COMPANY STOCK OPTIONS. (a) The Company shall take
all requisite action so that, as of the Effective Time, each Company Stock
Option that is outstanding immediately prior to the Effective Time, whether or
not then exercisable or vested, by virtue of the Merger and without further
action on the part of Buyer, Sub, the Company or the holder of that Company
Stock Option, shall be cancelled and converted into the right to receive, on the
date that is five days after the Closing Date, an amount in cash, without
interest, equal to (i) the Option Share Amount multiplied by (ii) the aggregate
number of shares of Company Common Stock into which the applicable Company Stock
Option was exercisable immediately prior to the Effective Time (whether or not
then vested or exercisable by its terms). The payment of the Option Share Amount
to the holder of a Company Stock Option shall be reduced by any income or
employment Tax withholding required under (A) the Code, or (ii) any applicable
state, local or foreign Tax Laws. To the extent that any amounts are withheld,
such amounts shall be treated for all purposes as having been paid to the holder
of that Company Stock Option.
(b) The "Option Share Amount" means (i) the Per Share
Amount less (ii) the exercise or purchase price per share of Company Common
Stock subject or related to the applicable Company Stock Option.
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(c) The Company shall take all action necessary in
implementing the provisions of this Section 5.5, including amendment of the
Company Stock Option Plans or the related option agreements pursuant to a
resolution of the Board of Directors in form and substance satisfactory to
Buyer, and to ensure that, after giving effect to the foregoing, no Company
Stock Option shall be exercisable for Company Common Stock following the
Effective Time. At the Effective Time, all Company Stock Options shall be
cancelled and all Company Stock Option Plans shall terminate, and the Company
shall take all actions to ensure that such cancellations and terminations occur.
All administrative and other rights and authorities granted under any Company
Stock Option Plan to the Company, the board of directors of the Company or any
committee or designee thereof, shall, following the Effective Time, reside with
the Surviving Corporation.
(d) The parties agree that the Buyer, the Company and
its Subsidiaries will treat all payments to holders of options pursuant to this
Section 5.5 of this Agreement as occurring after the Closing Date and
accordingly will treat such payments as governed for federal income tax purposes
by the "Next Day Rule" under Treasury Regulations Section
1.1502-76(b)(1)(ii)(B). Accordingly, the parties shall, and shall cause all
parties related to the Company pursuant to Section 267(b) of the Code to, treat
such payments as occurring no earlier than the beginning of the day following
the Closing Date and all Tax Returns shall be filed consistently therewith.
SECTION 5.6 STOCKHOLDER APPROVAL. (a) The Company shall call a
meeting of its stockholders to be held as soon as reasonably practical for the
purpose of obtaining the Company Stockholder Approval. The Company Board will
use its best efforts to obtain the Company Stockholder Approval. The Company
Board will recommend that the stockholders of the Company vote in favor of the
approval and adoption of this Agreement and the Merger, subject to its fiduciary
duties in respect of a Superior Proposal and in compliance by the Company with
Section 5.3.
(b) As promptly as practicable after the execution of
this Agreement, the Company shall prepare the Proxy Statement and other proxy
materials relating to the adoption and approval of this Agreement and the Merger
and the other transactions contemplated hereby by the stockholders of the
Company. The Proxy Statement will comply in form in all material respects with
applicable law and SEC requirements and the Company shall use all commercially
reasonable efforts to cause the Proxy Statement to be cleared for use by the SEC
as soon thereafter as practicable. The Company shall use all commercially
reasonable efforts to respond as promptly as practicable to any comments of the
SEC with respect thereto and to cause the Proxy Statement to be mailed to the
stockholders of the Company as promptly as practicable after the date hereof.
Each of Buyer and the Company shall furnish all information concerning it (and
its respective Subsidiaries) to the other as may be reasonably requested in
connection with any such action and the preparation, filing and distribution of
the Proxy Statement. Notwithstanding the foregoing, prior to filing or mailing
the Proxy Statement (or any amendment or supplement thereto) or responding to
any comments of the SEC with respect thereto, each of Buyer and the Company, as
the case may be, (i)
41
shall provide the other party with a reasonable opportunity to review and
comment on such document or response, (ii) shall include in such document or
response all comments reasonably proposed by such other party, and (iii) shall
not file or mail such document or respond to the SEC prior to receiving such
other party's approval, which approval shall not be unreasonably withheld or
delayed. Subject to the provisions of Section 5.3, the Proxy Statement shall
include the unanimous recommendation of the Company Board in favor of the
Merger.
SECTION 5.7 PUBLIC ANNOUNCEMENTS. The parties have agreed on
the content of the press release to be issued by them upon entry into this
Agreement. Buyer and the Company will not issue any press release with respect
to the transactions contemplated by this Agreement or otherwise issue any
written public statements with respect to such transactions without prior
consultation with the other party, except as may be required by applicable law
or by obligations pursuant to any listing agreement with or rules of any
national securities exchange.
SECTION 5.8 NOTIFICATION OF CERTAIN MATTERS. Buyer shall use
its reasonable best efforts to give prompt notice to the Company, and the
Company shall use its reasonable best efforts to give prompt notice to Buyer,
of: (i) the occurrence, or non-occurrence, of any event the occurrence, or
non-occurrence, of which it is aware and which would be reasonably likely to
cause (x) any representation or warranty contained in this Agreement and made by
it to be untrue or inaccurate in any material respect or (y) any covenant,
condition or agreement contained in this Agreement and made by it not to be
complied with or satisfied in all material respects, (ii) any failure of Buyer
or the Company, as the case may be, to comply in a timely manner with or satisfy
any covenant, condition or agreement to be complied with or satisfied by it
hereunder, or (iii) any change or event which would be reasonably likely to have
a Material Adverse Effect on Buyer or the Company, as the case may be; provided,
however, that the delivery of any notice pursuant to this Section 5.8 shall not
limit or otherwise affect the remedies available hereunder to the party
receiving such notice.
SECTION 5.9 TAKEOVER STATUTES. If any Takeover Statute or any
similar statute, law, rule or regulation in any State of the United States
(including under the DGCL or any other law of the State of Delaware) is or may
become applicable to the Merger or any of the other transactions contemplated by
this Agreement, the Company and the Company Board shall promptly grant such
approvals and take such lawful actions as are necessary so that such
transactions may be consummated as promptly as practicable on the terms
contemplated by this Agreement or by the Merger and otherwise take such lawful
actions to eliminate or minimize the effects of such statute, law, rule or
regulation, on such transactions.
SECTION 5.9 COMPANY RIGHTS AGREEMENT. The Company Board shall
take all further action (in addition to that referenced in Section 3.30) to the
extent necessary (including amending the Company Rights Agreement) in order to
ensure that following or as a result of the execution of this Agreement, or the
consummation of the transactions contemplated hereby, (i) no person shall be
deemed to be an Acquiring
42
Person; (ii) no person shall have the ability to exercise any Company Rights
under the Company Rights Agreement; (iii) no Company Rights shall have separated
from the Company Common Stock to which they are attached or become exercisable;
and (iv) the Company shall not have the right to exchange any Company Rights for
shares of Company Common Stock, pursuant to Section 24 of the Company Rights
Agreement or otherwise. Except in connection with the foregoing sentence, the
Company Board shall not, without the prior written consent of Buyer, (A) amend
the Company Rights Agreement, or (B) take any action with respect to, or make
any determination under, the Company Rights Agreement, including a redemption of
the Company Rights, in each case in order to facilitate any Acquisition Proposal
with respect to the Company; PROVIDED, HOWEVER, that notwithstanding anything to
the contrary in this Agreement, the Company Board may (X) amend the Company
Rights Agreement solely for the purpose of extending the Distribution Date
thereunder to that time immediately prior to the consummation of an unsolicited
exchange or tender offer by a third party and (Y) take any action in connection
with the Company Rights Agreement that is required by order of a court of
competent jurisdiction.
SECTION 5.10 SECTION 16 MATTERS. Buyer, Sub and the Company
agree to cooperate fully in the structuring and timing of any dispositions and
acquisitions of equity securities by directors and officers (as defined in Rule
16a-1 under the Exchange Act) of the Company pursuant to the transactions
contemplated by this Agreement and to take, and cause their respective boards of
directors or compensation committees to take, prior to the Effective Time, any
and all such actions as may be reasonably necessary to afford an exemption from
liability under Section 16(b) of the Exchange Act for such acquisitions and
dispositions.
SECTION 5.11 EMPLOYEE BENEFIT MATTERS. (a) With respect to
each employee benefit plan of Buyer ("Buyer Benefit Plan") in which employees of
the Company and its Subsidiaries ("Company Employees") participate after the
Effective Time, for purposes of determining vesting and entitlement to benefits,
including for severance benefits and vacation entitlement, service with the
Company (or predecessor employers to the extent the Company provides past
service credit) shall be treated as service with Buyer; provided, that such
service shall not be recognized to the extent that such recognition would result
in a duplication of benefits or to the extent that such service was not
recognized under the corresponding Company Plan. To the extent required by
Applicable Law, Buyer shall cause any and all pre-existing condition (or
actively at work or similar) limitations, eligibility waiting periods and
evidence of insurability requirements under Buyer Benefit Plans to be waived
with respect to such Company Employees and their eligible dependents and shall
provide them with credit for any co-payments, deductibles, and offsets (or
similar payments) made during the plan year including the Effective Time for the
purposes of satisfying any applicable deductible, out-of-pocket, or similar
requirements under any Buyer Benefit Plans in which they are eligible to
participate after the Effective Time.
(b) The parties hereto acknowledge and agree that all
provisions contained in this Section 5.11 with respect to employees are included
for the
43
sole benefit of the respective parties hereto and shall not create any
right (i) in any other person, including, without limitation, any employees,
former employees, any participant in any Company Plan or any beneficiary thereof
or (ii) to continued employment with the Company or Buyer. After the Effective
Time, nothing contained in this Section 5.11 shall interfere with Buyer's right
to amend, modify or terminate any Company Plan or Buyer Benefit Plan or to
terminate the employment of any employee of the Company for any reason.
Notwithstanding anything herein to the contrary, Buyer shall take no action to
amend, modify or terminate, and Buyer shall take all action necessary to assume
the Company's obligations under the employment agreements set forth in Section
3.11(b)(iii) of the Company Letter.
SECTION 5.12 INDEMNIFICATION OF DIRECTORS AND OFFICERS. (a)
After the Effective Time, the Surviving Corporation shall indemnify and hold
harmless (and shall also advance expenses as incurred to the fullest extent
permitted under applicable Law to), each person who is now or has been prior to
the date hereof or who becomes prior to the Effective Time an officer or
director of the Company or any Subsidiary (the "Indemnified Persons") against
(i) all losses, claims, damages, costs, expenses (including counsel fees and
expenses), settlement, payments or liabilities arising out of or in connection
with any claim, demand, action, suit, proceeding or investigation based in whole
or in part on or arising in whole or in part out of the fact that such person is
or was an officer or director of the Company or any Subsidiary, whether or not
pertaining to any matter existing or occurring at or prior to the Effective Time
and whether or not asserted or claimed prior to or at or after the Effective
Time, and for which indemnification has been provided by the Company in
accordance with Applicable Law ("Indemnified Liabilities"); and (ii) all
Indemnified Liabilities based in whole or in part on or arising in whole or in
part out of or pertaining to this Agreement or the transactions contemplated
hereby, in each case to the fullest extent a corporation is permitted under the
DGCL to indemnify its own directors and officers. Nothing contained herein shall
make Buyer, Sub, the Company or the Surviving Corporation, an insurer, a
co-insurer or an excess insurer in respect of any insurance policies which may
provide coverage for Indemnified Liabilities, nor shall this Section 5.12
relieve the obligations of any insurer in respect thereto. Each Indemnified
Person is intended to be a third party beneficiary of this Section 5.12. This
Section 5.12 shall survive the consummation of the Merger at the Effective Time,
is intended to benefit each Indemnified Person and his or her heirs and
representatives, each of whom may specifically enforce its terms against Buyer
or the Surviving Corporation, and shall be binding on all successors and assigns
of Buyer and the Surviving Corporation. This Section 5.12 shall not limit or
otherwise adversely affect any rights any Indemnified Person may have under any
agreement with the Company or under the Company's Certificate of Incorporation
or By-laws as presently in effect.
(b) From and after the Effective Time, the Surviving
Corporation shall fulfill and honor in all respects the obligations of the
Company pursuant to any indemnification agreements between the Company and its
directors and officers as of or prior to the date hereof and any indemnification
provisions under the Company's Certificate of Incorporation or By-laws as in
effect immediately prior to the Effective Time.
44
(c) At Buyer's option, Buyer will either: (i) cause
the Surviving Corporation to purchase tail liability insurance covering those
persons who, as of immediately prior to the Effective Time, are covered by the
Company's directors' and officers' liability insurance policy for a period of
six (6) years after the Effective Time on terms no less favorable than those of
the Company's present directors' and officers' liability insurance policy;
PROVIDED, HOWEVER, that in no event will Buyer or the Surviving Corporation be
required to pay in excess of 300% of the annual premium most recently paid by
the Company for such coverage; PROVIDED FURTHER, that notwithstanding the
foregoing, in the event such coverage is not available (or is only available for
an amount in excess of 300% of the annual premium most recently paid by the
Company for such coverage), Buyer shall nevertheless use its commercially
reasonable efforts to provide such coverage as may be obtained for such 300%
amount, or (ii) provide indemnification to those persons who, as of immediately
prior to the Effective Time, are covered by the Company's directors' and
officers' liability insurance policy in an amount equal to the amount of
indemnification to which such persons would have been entitled under the
Company's present directors' and officers' liability insurance policy.
(d) In the event the Surviving Corporation (i)
consolidates with or merges into any other person and shall not be the
continuing or surviving corporation or entity of such consolidation or merger or
(ii) transfers all or substantially all of its properties and assets to any
person, then, and in each such case, proper provisions shall be made so that
such continuing or surviving corporation or entity or transferee of such assets,
as the case may be, shall assume the obligations set forth in this Section 5.12.
(e) The obligations under this Section 5.12 shall not
be terminated or modified in such a manner as to affect adversely any indemnitee
to whom this Section 5.12 applies without the consent of such affected
indemnitee.
SECTION 5.13 SUSPENSION OF INCENTIVE STOCK PURCHASE PLAN. The
Company shall amend, effective as of the date hereof, the 1997 Employee Stock
Purchase Plan to halt purchases under the Plan such that no issuances of any
shares of Company Common Stock shall be made following the date of this
Agreement.
ARTICLE VI
CONDITIONS PRECEDENT TO THE MERGER
SECTION 6.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT
THE MERGER. The respective obligations of each party to effect the Merger shall
be subject to the fulfillment at or prior to the Effective Time of each of the
following conditions:
(a) Stockholder Approval. This Agreement shall have
been duly approved by the requisite vote of stockholders of the Company in
accordance with applicable law, the Company Charter and the Company's By-laws.
45
(b) HSR Approvals. The waiting period (and any
extension thereof) applicable to the consummation of the Merger under the HSR
Act shall have expired or been terminated.
(c) No Order. No court or other Governmental Entity
having jurisdiction over the Company or Buyer, or any of their respective
Subsidiaries, shall have enacted, issued, promulgated, enforced or entered any
law, rule, regulation, executive order, decree, injunction or other order
(whether temporary, preliminary or permanent) which is then in effect and has
the effect of, directly or indirectly, restraining, prohibiting or restricting
the Merger or any of the transactions contemplated hereby; provided, however,
that the provisions of this Section 6.1(c) shall not be available to any party
whose failure to fulfill its obligations pursuant to Section 5.4 shall have been
the cause of, or shall have resulted in, the enforcement or entering into of any
such law, rule, regulation, executive order, decree, injunction or other order.
SECTION 6.2 CONDITIONS TO OBLIGATION OF THE COMPANY TO EFFECT
THE MERGER. The obligation of the Company to effect the Merger shall be subject
to the fulfillment at or prior to the Effective Time of each of the following
additional conditions:
(a) Performance of Obligations; Representations and
Warranties. (i) Each of Buyer and Sub shall have performed in all material
respects each of its agreements and covenants contained in this Agreement
required to be performed on or prior to the Effective Time, (ii) each of the
representations and warranties of Buyer and Sub contained in this Agreement that
is qualified by materiality shall have been true and correct when made, and
shall be true and correct on and as of the Effective Time as if made on and as
of such date (other than representations and warranties which address matters
only as of a certain date other than the date hereof, which shall be true and
correct as of such certain date) and (iii) each of the representations and
warranties that is not so qualified shall have been true and correct in all
material respects when made, and shall be true and correct in all material
respects on and as of the Effective Time as if made on and as of such date
(other than representations and warranties which address matters only as of a
certain date which shall be true and correct in all material respects as of such
certain date). The Company shall have received certificates signed on behalf of
each of Buyer and Sub by one of its officers to such effect.
SECTION 6.3 CONDITIONS TO OBLIGATIONS OF BUYER AND SUB TO
EFFECT THE MERGER. The obligations of Buyer and Sub to effect the Merger shall
be subject to the fulfillment at or prior to the Effective Time of each of the
following additional conditions:
(a) Performance of Obligations; Representations and
Warranties. (i) The Company shall have performed in all material respects each
of its covenants and agreements contained in this Agreement required to be
performed on or prior to the Effective Time, (ii) each of the representations
and warranties of the Company contained in this Agreement that is qualified by
materiality shall have been true
46
and correct when made, and shall be true and correct on and as of the Effective
Time as if made on and as of such date (other than representations and
warranties which address matters only as of a certain date other than the date
hereof, which shall be true and correct as of such certain date) and (iii) each
of the representations and warranties that is not so qualified shall have been
true and correct in all material respects when made, and shall be true and
correct in all material respects on and as of the Effective Time as if made on
and as of such date (other than representations and warranties which address
matters only as of a certain date which shall be true and correct in all
material respects as of such certain date). Buyer shall have received a
certificate signed on behalf of the Company by its Chief Executive Officer or
its Chief Financial Officer to such effect.
(b) Consents. (i) The Company shall have
obtained the consent or approval of any other Person or Governmental Entity
whose consent or approval shall be required in connection with the execution,
delivery and performance of this Agreement and consummation of the Merger under
any loan or credit agreement, note, mortgage, indenture, lease or other
agreement or instrument, unless the failure to obtain such consents and
approvals would not, individually or in the aggregate, have a Material Adverse
Effect on the Company or Buyer or upon the consummation of the transactions
contemplated in this Agreement.
(ii) In obtaining any approval or consent
required to consummate any of the transactions contemplated herein, no
Governmental Entity shall have imposed or shall have sought to impose any
condition, penalty or requirement which, in the reasonable opinion of Buyer,
individually or in aggregate would have a Material Adverse Effect on the Company
or Buyer.
(c) Company Stock Option Plans. The Company shall
have taken all action required to be taken by it to implement the provisions of
Section 5.5.
(d) Director and Officer Resignations. All of the
Directors of the Company and any officers thereof designated by Buyer, shall
have tendered their resignations in form and substance satisfactory to Buyer.
(e) Dissenters' Rights. The sum of the number of
Dissenting Shares and the number of shares of Company Capital Stock that may in
the future become Dissenting Shares shall not exceed 10% of the number of shares
of Company Capital Stock outstanding on the record date set by the Company Board
for the meeting of the Company's stockholders to obtain the Company Stockholder
Approval.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
SECTION 7.1 TERMINATION. This Agreement may be terminated at
any time prior to the Effective Time by action taken or authorized by the Board
of Directors of the terminating party, whether before or after any approval of
the matters presented in connection with the Merger by the stockholders of the
Company:
47
(a) by mutual written consent of Buyer and the
Company;
(b) by either Buyer or the Company, upon written
notice to the other party, if any Governmental Entity of competent jurisdiction
shall have issued a final and nonappealable order, decree or ruling permanently
enjoining or otherwise prohibiting the consummation of the transactions
contemplated by this Agreement (which order, decree, ruling or other action the
parties shall have used their reasonable efforts to resist, resolve or lift, as
applicable, subject to the provisions of Section 5.4);
(c) by either Buyer or the Company, upon written
notice to the other party, if Company Stockholder Approval shall not have been
obtained at a meeting of the stockholders of the Company called therefore, or
any adjournment or postponement thereof; PROVIDED, HOWEVER, that the right to
terminate this Agreement under this Section 7.1(c) shall not be available to the
Company where the failure to obtain the Company Stockholder Approval shall have
been caused by the action or failure to act of the Company and such action or
failure to act constitutes a breach by the Company of this Agreement;
(d) by either Buyer or the Company if: (i) the Merger
has not been effected on orprior to the close of business on the later of
February 28, 2005 or the date 75 days after the waiting period applicable to the
consummation of the Merger under the HSR Act has expired or been terminated;
PROVIDED, HOWEVER, that the right to terminate this Agreement pursuant to this
Section 7.1(d)(i) shall not be available to any party whose failure to fulfill
any of its obligations contained in this Agreement has been the cause of, or
resulted in, the failure of the Merger to have occurred on or prior to the
aforesaid date;
(e) by Buyer if there has been a breach of a
representation or warranty of the Company that gives rise to a failure of the
fulfillment of a condition of the Buyer's and Sub's obligations to effect the
Merger pursuant to Section 6.3(a)(ii) and (iii) or by the Company if there has
been a breach of a representation or warranty of the Buyer or Sub that gives
rise to a failure of the fulfillment of a condition of the Company's obligations
to effect the Merger pursuant to Section 6.2(a)(ii) and (iii), in each case
which breach has not been cured within 30 calendar days following written notice
to the party committing such breach, or immediately, if such breach by its
nature or timing cannot be cured within such time period;
(f) by Buyer, upon written notice to the Company, in
the event of a Company Adverse Recommendation Change; or
(g) by the Company, upon written notice to the Buyer,
if the Company Board shallhave exercised its rights set forth in Section 5.3(d);
PROVIDED, that, in order for the termination of this Agreement pursuant to this
Section 7.1(g) to be deemed effective, the Company shall have complied with the
provisions of Section 5.3, including the notice provisions thereof and the
provisions of 7.5.
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The right of any party hereto to terminate this Agreement
pursuant to this Section 7.1 shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any party hereto, any
Person controlling any such party or any of their respective officers or
directors, whether prior to or after the execution of this Agreement.
SECTION 7.2 EFFECT OF TERMINATION. In the event of termination
of this Agreement by either Buyer or the Company, as provided in Section 7.1,
this Agreement shall forthwith become void and there shall be no liability
hereunder on the part of the Company, Buyer, Sub or their respective officers or
directors (except for the last sentence of Section 5.1(a), Section 7.2, Section
7.5 and Article VIII which shall survive the termination); PROVIDED, HOWEVER,
that nothing contained in this Section 7.2 shall relieve any party hereto from
any liability for any breach of a representation, warranty, or covenant
contained in this Agreement.
SECTION 7.3 AMENDMENT. Subject to compliance with Applicable
Law, this Agreement may be amended by the Company and Buyer (on behalf of itself
and Sub), by action taken or authorized by their respective Boards of Directors,
at any time before or after approval of the matters presented in connection with
the Merger by the stockholders of the Company, except that after any approval of
the transactions contemplated by this Agreement by the stockholders of the
Company, there may not be, without further approval of such stockholders, any
amendment of this Agreement that reduces the amount or changes the form of the
consideration to be delivered under this Agreement to the holders of the Company
Common Stock, other than as contemplated by this Agreement. This Agreement may
not be amended except by an instrument in writing signed on behalf of each of
the parties.
SECTION 7.4 WAIVER. At any time prior to the Effective Time,
the parties hereto may (a) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (b) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto and (c) waive compliance with any of the
agreements or conditions contained herein for the benefit of such party which
may legally be waived. Any agreement on the part of a party hereto to any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party. No delay on the part of any party hereto in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any waiver on the part of any party hereto of any right,
power or privilege hereunder operate as a waiver of any other right, power or
privilege hereunder, nor shall any single or partial exercise of any right,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, power or privilege hereunder. Unless otherwise
provided, the rights and remedies herein provided are cumulative and are not
exclusive of any rights or remedies that the parties hereto may otherwise have
at law or in equity. The failure of any party to this Agreement to assert any of
its rights under this Agreement or otherwise shall not constitute a waiver of
those rights.
49
SECTION 7.5 TERMINATION FEES. (a) The Company will pay to
Buyer, by wire transfer of immediately available funds, an amount equal to
$4,500,000 (the "Termination Fee") if this Agreement is terminated as follows:
(i) if Buyer shall terminate this Agreement
pursuant to Section 7.1(f), then the Company will pay the Termination Fee on the
business day following such termination; PROVIDED, HOWEVER, the Company shall
not be required to pay the Termination Fee if the Company was otherwise entitled
to terminate this Agreement pursuant to Sections 7.1(b), (d), or (e); and
(ii) if the Company terminates this
Agreement pursuant to Section 7.1(g), then the Company will pay the Termination
Fee prior to such termination.
(b) The Company acknowledges that the agreements
contained in this Section 7.5 are an integral part of the transactions
contemplated by this Agreement and that, without these agreements, Buyer would
not enter into this Agreement. Accordingly, if the Company fails promptly to pay
the amounts due pursuant to Section 7.5, the Company will also pay to Buyer
interest on such amount from the date this payment was due until the date it was
made equal to 8.5%, compounded monthly, on the date such payment was required to
be made.
ARTICLE VIII
GENERAL PROVISIONS
SECTION 8.1 NOTICES. All notices and other communications
hereunder shall be in writing and shall be deemed given when delivered
personally, one business day after being delivered to an overnight courier or
when sent by facsimile on a business day (and if not sent on a business day,
then on the next succeeding business day) with a confirmatory copy sent by
overnight courier, to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
(a) if to Buyer or Sub, to:
St. Jude Medical, Inc.
Xxx Xxxxxxxxx Xxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Attn: General Counsel
Facsimile: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxxx Xxxx & Xxxxxxxx LLP
0000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Attn: Xxxxxx Xxxxxxx, Esq.
Facsimile: (000) 000-0000
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(b) if to the Company, to:
Endocardial Solutions, Inc.
0000 Xxxxxx Xxxx
Xxxxx 000
Xx. Xxxx, Xxxxxxxxx 00000
Attn: Chief Executive Officer
(000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxxx & Whitney LLP
Suite 1500
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attn: Xxxxxxx Xxxxxx, Esq.
Facsimile: (000) 000-0000
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above. Any
party hereto may give any notice, request, demand, claim or other communication
hereunder using any other means (including ordinary mail or electronic mail),
but no such notice, request, demand, claim or other communication shall be
deemed to have been duly given unless and until it actually is received by the
individual for whom it is intended.
SECTION 8.2 INTERPRETATION. (a) When a reference is made in
this Agreement to a Section, such reference shall be to a Section of this
Agreement unless otherwise indicated. The table of contents and headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. Whenever the words
"include," "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation."
(b) "Subsidiary" means any corporation, partnership,
limited liability company, joint venture or other legal entity of which Buyer or
Company, as the case may be (either alone or through or together with any other
Subsidiary), owns or controls, directly or indirectly, 50% or more of the stock
or other equity interests the holders of which are generally entitled to vote
for the election of the board of directors or other governing body of such
corporation, partnership, limited liability company, joint venture or other
legal entity.
(c) "Person" means any individual, corporation,
partnership, limited partnership, limited liability company, trust, association
or entity or Governmental Entity or authority.
(d) "Applicable Laws" or "Applicable Law" means, with
respect to any Person, any domestic or foreign, federal, state or local statute,
law,
51
ordinance, rule, regulation, order, writ, injunction, judgment, decree or
other requirement of any Governmental Entity existing as of the date hereof or
as of the Effective Time applicable to such Person or any of its properties,
assets, officers, directors, employees, consultants or agents.
SECTION 8.3 COUNTERPARTS; FACSIMILE SIGNATURES. This Agreement
may be executed in counterparts, all of which shall be considered one and the
same agreement, and shall become effective when one or more counterparts have
been signed by each of the parties and delivered to the other parties. A
facsimile signature of this Agreement or any Transaction Document shall be valid
and have the same force and effect as a manually signed original.
SECTION 8.4 ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES.
This Agreement and the Confidentiality Agreement constitute the entire agreement
and supersedes all prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof. Except as
specifically set forth in Section 5.12, this Agreement is not intended to confer
upon any Person other than the parties hereto any rights or remedies hereunder.
SECTION 8.5 GOVERNING LAW. Except to the extent that the laws
of the State of Delaware are mandatorily applicable to the Merger, this
Agreement shall be governed by, and construed in accordance with, the laws of
the State of Minnesota, without regard to the conflicts of laws provisions
thereof that would apply the laws of any other state.
SECTION 8.6 CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL. (a)
Each of the parties hereto (i) consents to submit itself to the personal
jurisdiction of any Federal Court located in the District of the State of
Minnesota in the event any dispute arises out of this Agreement or any of the
transactions contemplated by this Agreement, (ii) agrees that it will not
attempt to deny or defeat such personal jurisdiction by motion or other request
for leave from any such court, and (iii) agrees that it will not bring any
action relating to this Agreement or any of the transactions contemplated by
this Agreement in an court other than a Federal court sitting in the District of
the State of Minnesota. The parties irrevocably and unconditionally waive any
objection to the laying of venue of any action, suit or proceeding arising out
of this Agreement or any of the transactions contemplated by this Agreement in
any Federal Court located in the District of the State of Minnesota.
(b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY
CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH PARTY HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. Each party
certifies
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and acknowledges that (i) no representative, agent or attorney of any other
party has represented, expressly or otherwise, that such other party would not,
in the event of litigation seek to invalidate the foregoing waiver, (ii) each
party understands and has considered the implications of this waiver, (iii) each
party makes this waiver voluntarily, and (iv) each party has been induced to
enter into this Agreement by, among other things, the mutual waivers and
certifications in this Section 8.6(b).
(c) In any dispute, whether resolved by litigation or
other dispute resolution mechanism, arising from or related to this Agreement or
the transactions contemplated herein, the substantially prevailing party shall
be entitled to recover from the other party (as part of the arbitral award or
order) its reasonable attorneys' fees and other costs of the resolution of such
dispute.
SECTION 8.7 ASSIGNMENT. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of and be enforceable by
the parties and their respective successors or assigns.
SECTION 8.8 SEVERABILITY. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule of
law, or public policy, all other terms, conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic and legal substance of the transactions contemplated hereby are not
affected in any manner materially adverse to any party. Upon such determination
that any term or other provision is invalid, illegal or incapable of being
enforced, the parties shall negotiate in good faith to modify this Agreement so
as to effect the original intent of the parties as closely as possible in a
mutually acceptable manner in order that the transactions contemplated by this
Agreement may be consummated as originally contemplated to the fullest extent
possible.
SECTION 8.9 PERFORMANCE BY SUB. Buyer hereby agrees to cause
Sub to comply with its obligations hereunder and to cause Sub to consummate the
Merger as contemplated herein and whenever this Agreement requires Sub to take
any action, such requirement shall be deemed to include an undertaking of Buyer
to cause Sub to take such action.
SECTION 8.10 DEFINED TERMS. Each of the following terms is
defined in the Section identified below:
1993 Plan...................................................................................Section 3.2(a)
2003 Plan...................................................................................Section 3.2(a)
501(k)'s....................................................................................Section 3.8(b)
Acquisition Proposal........................................................................Section 5.3(a)
Affiliated Person.............................................................................Section 3.23
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Agreement.........................................................................................Preamble
Alternative Acquisition Agreement...........................................................Section 5.3(d)
Alternative Transaction..................................................................Section 5.3(b)(i)
Applicable Laws.............................................................................Section 8.2(d)
Buyer.............................................................................................Preamble
Buyer Benefit Plan.........................................................................Section 5.11(a)
Certificate of Merger..........................................................................Section 1.2
Certificates................................................................................Section 1.6(b)
Closing.......................................................................................Section 1.13
Closing Date..................................................................................Section 1.13
Code...........................................................................................Section 3.9
Company...........................................................................................Preamble
Company Adverse Recommendation Change.......................................................Section 5.3(d)
Company Balance Sheet Date.....................................................................Section 3.7
Company Board...............................................................................Section 3.3(b)
Company Business Personnel....................................................................Section 3.15
Company Capital Stock.............................................................................Recitals
Company Charter................................................................................Section 3.1
Company Common Stock..............................................................................Recitals
Company Employees..........................................................................Section 5.11(a)
Company Fairness Opinion......................................................................Section 3.29
Company Financial Advisor.....................................................................Section 3.29
Company Letter.....................................................................Preamble to Article III
Company Multiemployer Plan.................................................................Section 3.12(c)
Company Patents............................................................................Section 3.16(b)
Company Permits.............................................................................Section 3.8(a)
Company Plan...............................................................................Section 3.12(c)
Company Preferred Stock...........................................................................Recitals
Company Registered IP......................................................................Section 3.16(b)
Company Registered Marks...................................................................Section 3.16(b)
Company Rights..............................................................................Section 3.2(b)
Company Rights Agreement....................................................................Section 3.2(b)
Company SEC Reports............................................................................Section 3.5
Company Stock Option Plans..................................................................Section 3.2(a)
Company Stock Options.......................................................................Section 3.2(b)
Company Stockholder Approval..................................................................Section 3.17
Compensation Agreements....................................................................Section 3.11(a)
Confidentiality Agreement......................................................................Section 5.1
Constituent Corporations..........................................................................Preamble
Copyrights.................................................................................Section 3.16(a)
DGCL...........................................................................................Section 1.1
Director Plan...............................................................................Section 3.2(a)
Dissenting Shares..........................................................................Section 1.12(a)
Dissenting Stockholder.....................................................................Section 1.12(a)
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Effective Time.................................................................................Section 1.2
Environmental Law......................................................................Section 3.20(a)(ii)
Environmental Permit..................................................................Section 3.20(a)(iii)
ERISA......................................................................................Section 3.12(a)
ERISA Affiliate............................................................................Section 3.12(c)
Exchange Act...................................................................................Section 3.5
Exchange Fund...............................................................................Section 1.6(a)
Financial Statements........................................................................Section 3.5(a)
Governmental Entity............................................................................Section 2.3
Hazardous Substances....................................................................Section 3.20(a)(i)
Holders.....................................................................................Section 1.6(a)
HSR Act........................................................................................Section 2.3
Indemnified Liabilities....................................................................Section 5.12(a)
Indemnified Persons........................................................................Section 5.12(a)
Insurance Policies............................................................................Section 3.22
Intellectual Property......................................................................Section 3.16(a)
IRS............................................................................................Section 3.9
Liens.........................................................................................Section 3.25
Marks......................................................................................Section 3.16(a)
Material Adverse Change.....................................................................Section 3.7(b)
Material Adverse Effect.....................................................................Section 3.7(b)
Material Contracts.........................................................................Section 3.11(b)
Merger............................................................................................Recitals
Notice of Superior Proposal.................................................................Section 5.3(d)
Option Share Amount.........................................................................Section 5.5(b)
Original Agreement................................................................................Preamble
Patents....................................................................................Section 3.16(a)
Paying Agent................................................................................Section 1.6(a)
Per Share Price.............................................................................Section 1.5(c)
Permitted Liens............................................................................Section 3.25(c)
Person......................................................................................Section 8.2(c)
PMA's.......................................................................................Section 3.8(b)
Pre-Closing Period.............................................................................Section 5.1
Proxy Statement...............................................................................Section 3.24
Real Estate................................................................................Section 3.25(b)
Xxxxxxxx-Xxxxx Act..........................................................................Section 3.5(c)
Securities Act..............................................................................Section 3.2(b)
SSA.........................................................................................Section 3.8(a)
State Takeover Approvals.......................................................................Section 2.3
Sub...............................................................................................Preamble
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Subsidiary..................................................................................Section 8.2(b)
Superior Proposal.......................................................................Section 5.3(b)(ii)
Surviving Corporation..........................................................................Section 1.1
Tax Return.....................................................................................Section 3.9
Taxes..........................................................................................Section 3.9
Termination Fee................................................................................Section 7.5
Trade Secrets..............................................................................Section 3.16(a)
Worker Safety Laws............................................................................Section 3.13
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IN WITNESS WHEREOF, Buyer, Sub and the Company have caused this
Agreement to be signed by their respective officers thereunto duly authorized
all as of the date first written above.
ST. JUDE MEDICAL, INC.
a Minnesota Corporation
By:________________________
Name:
Title:
DRAGONFLY MERGER CORP.
a Delaware Corporation
By:________________________
Name:
Title:
ENDOCARDIAL SOLUTIONS, INC.
a Delaware Corporation
By:________________________
Name:
Title:
