EXHIBIT 2.1
EXECUTION COPY
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AGREEMENT AND PLAN OF MERGER
Dated as of January 12, 2004
by and among
XXXXXX LABORATORIES,
CORVETTE ACQUISITION CORP.
and
THERASENSE, INC.
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TABLE OF CONTENTS
Page
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ARTICLE I Definitions..........................................................1
Section 1.1 Definitions................................................1
ARTICLE II The Merger..........................................................9
Section 2.1 The Merger.................................................9
Section 2.2 Closing....................................................9
Section 2.3 Effective Time.............................................9
Section 2.4 Effects of the Merger......................................9
Section 2.5 Certificate of Incorporation and By-Laws...................9
Section 2.6 Directors.................................................10
Section 2.7 Officers..................................................10
ARTICLE III Effect of the Merger on the Capital Stock of the Constituent
Corporations; Exchange of Certificates.........................10
Section 3.1 Effect on Capital Stock...................................10
Section 3.2 Exchange of Certificates..................................10
Section 3.3 Dissenting Shares.........................................12
Section 3.4 Adjustment of Merger Consideration..........................
ARTICLE IV Representations and Warranties of the Company......................13
Section 4.1 Organization, Standing and Corporate Power................13
Section 4.2 Subsidiaries..............................................13
Section 4.3 Capital Structure.........................................14
Section 4.4 Authority; Noncontravention...............................14
Section 4.5 SEC Documents; Financial Statements; Undisclosed
Liabilities...............................................16
Section 4.6 Information Supplied......................................17
Section 4.7 Absence of Certain Changes or Events......................17
Section 4.8 Litigation................................................17
Section 4.9 Contracts.................................................17
Section 4.10 Compliance with Laws......................................18
Section 4.11 Employment Matters........................................19
Section 4.12 Employee Benefit Plans; ERISA.............................20
Section 4.13 Taxes.....................................................23
Section 4.14 Environmental.............................................24
Section 4.15 Title to Properties.......................................25
Section 4.16 Intellectual Property.....................................26
Section 4.17 Voting Requirements.......................................27
Section 4.18 State Takeover Statutes...................................27
Section 4.19 Rights Agreement..........................................27
Section 4.20 Tangible Assets...........................................27
Section 4.21 Brokers; Schedule of Fees and Expenses....................28
Section 4.22 Opinion of Financial Advisor..............................28
Section 4.23 Regulatory Compliance.....................................28
Section 4.24 Insurance.................................................29
Section 4.25 Affiliate Transactions....................................30
ARTICLE V Representations and Warranties of Parent and Sub....................30
Section 5.1 Organization, Standing and Corporate Power................30
Section 5.2 Authority; Noncontravention...............................30
Section 5.3 Information Supplied......................................31
Section 5.4 Brokers...................................................31
Section 5.5 Interim Operations of Sub.................................31
Section 5.6 Financing. ..............................................32
ARTICLE VI Covenants Relating to Conduct of Business..........................32
Section 6.1 Conduct of Business.......................................32
Section 6.2 No Solicitation...........................................36
ARTICLE VII Additional Agreements.............................................39
Section 7.1 Preparation of the Proxy Statement; Stockholders Meeting..39
Section 7.2 Access to Information; Confidentiality....................40
Section 7.3 Reasonable Efforts; Notification..........................40
Section 7.4 Public Announcements......................................41
Section 7.5 Indemnification and Insurance.............................42
Section 7.6 Benefits and Employment...................................42
Section 7.7 Stock Options/ESPP........................................43
Section 7.8 Stockholder Litigation....................................44
ARTICLE VIII Conditions Precedent.............................................45
Section 8.1 Conditions to Each Party's Obligation to Effect the
Merger....................................................45
Section 8.2 Conditions to Obligations of Parent and Sub...............45
Section 8.3 Conditions to Obligation of the Company...................46
ARTICLE IX Termination, Amendment and Waiver....................................
Section 9.1 Termination...............................................46
Section 9.2 Effect of Termination.....................................48
Section 9.3 Fees and Expenses.........................................48
Section 9.4 Amendment.................................................48
Section 9.5 Extension; Waiver.........................................49
ARTICLE X General Provisions..................................................49
Section 10.1 Nonsurvival of Representations and Warranties.............49
Section 10.2 Notices...................................................49
Section 10.3 Interpretation............................................50
Section 10.4 Counterparts..............................................50
Section 10.5 Entire Agreement; No Third-Party Beneficiaries............50
Section 10.6 Governing Law.............................................51
ii
Section 10.7 Assignment................................................51
Section 10.8 Enforcement...............................................51
Section 10.9 Severability..............................................51
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AGREEMENT AND PLAN OF MERGER, dated as of January 12, 2004, by and among
Xxxxxx Laboratories, an Illinois corporation ("Parent"), Corvette Acquisition
Corp., a Delaware corporation and a wholly-owned subsidiary of Parent ("Sub"),
and TheraSense, Inc., a Delaware corporation (the "Company").
WHEREAS, the respective Boards of Directors of Parent, Sub and the Company
each have determined that it is advisable and in the best interests of their
respective companies and stockholders to enter into a business combination by
means of the merger of Sub with and into the Company (the "Merger") upon the
terms and subject to the conditions set forth herein;
WHEREAS, simultaneously with the execution and delivery of this Agreement,
and as a condition and inducement to the willingness of Parent and Sub to enter
into this Agreement, Parent, Sub and certain stockholders of the Company are
entering into a stockholder agreement (the "Stockholder Agreement") pursuant to
which, among other things, such stockholders have agreed to vote to approve and
adopt this Agreement and the Merger and to take certain other actions in
furtherance of the Merger, upon the terms and subject to the conditions set
forth therein; and
WHEREAS, Parent, Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe various conditions to the Merger.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements contained in this
Agreement and the Stockholder Agreement, the parties hereto agree as follows:
ARTICLE I
Definitions
Section 1.1 Definitions. As used in this Agreement, the following terms
shall have the following meanings:
"Acquisition Agreement" has the meaning set forth in Section 6.2(b).
"Activities to Date" has the meaning set forth in Section 4.23(a)(i)(A).
"Affiliate" of any Person means another Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by or
is under common control with, such first Person.
"Alternative Acquisition" means any direct or indirect acquisition, in one
transaction or a series of transactions, including any merger, tender offer,
exchange offer, stock acquisition, asset acquisition, statutory share exchange,
business combination, recapitalization, liquidation, dissolution, joint venture
or similar transaction, of (i) assets or businesses that constitute or
represent twenty percent (20%) or more of the total revenue or assets of the
Company and the Company Subsidiaries, taken as a whole, (ii) twenty percent
(20%) or more of the outstanding shares of Company Common Stock or (iii) twenty
percent (20%) or more of the
outstanding shares of capital stock of, or other equity or voting interests in,
any of the Company Subsidiaries directly or indirectly holding, individually or
taken together, the assets or businesses referred to in clause (i) above, in
each case other than the transactions contemplated by this Agreement.
"Alternative Acquisition Proposal" has the meaning set forth in Section
6.2(a).
"Applicable Law" means any statute, law (including common law), ordinance,
rule or regulation applicable to the Company or any Company Subsidiary or
Parent and Sub, as applicable, or their respective properties or assets.
"Approvals" has the meaning set forth in Section 4.23(a)(i)(A).
"Business Day" means any day on which the principal offices of the SEC in
Washington, D.C. are open to accept filings, or, in the case of determining a
date when any payment is due, any day on which banks are not required or
authorized to close in The City of New York.
"Certificate of Merger" means a certificate of merger, or other
appropriate documents, to be filed with the Secretary of State of the State of
Delaware to effect the Merger.
"Certificates" means certificates evidencing shares of Company Common
Stock entitled to receive the Merger Consideration pursuant to Section 3.1(c).
"Closing" means the closing of the Merger.
"Closing Date" means the date of the Closing.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" has the meaning set forth in the Preamble.
"Company Board" means the Board of Directors of the Company.
"Company Common Stock" means common stock, par value $0.001 per share, of
the Company.
"Company Disclosure Schedule" has the meaning set forth in Article IV.
"Company Employees" means the employees of the Company and the Company
Subsidiaries.
"Company Financial Advisor" has the meaning set forth in Section 4.21.
"Company Material Adverse Effect" means any change or effect that is, or
is reasonably likely to be, materially adverse to the business, assets and
liabilities (taken together), financial condition or operations or results of
operations of the Company and the Company Subsidiaries, taken as a whole;
provided, however, that none of the following shall be deemed (either alone or
in combination) to constitute such a change or effect:
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(i) (A) any adverse change attributable to the announcement or
pendency of the transactions contemplated by this Agreement or (B) any
adverse change attributable to or conditions generally affecting (1) the
medical diagnostics products industry as a whole, (2) the United States
economy or financial markets in general or (3) any foreign economy or
financial markets in any location where the Company or any Company
Subsidiary has material operations or sales;
(ii) any act or threat of terrorism or war anywhere in the world, any
armed hostilities or terrorist activities anywhere in the world, any
threat or escalation of armed hostilities or terrorist activities anywhere
in the world or any governmental or other response or reaction to any of
the foregoing; or
(iii) any action by the Company or any Company Subsidiary approved or
consented to in writing by Parent or Sub.
"Company Representatives" has the meaning set forth in Section 6.2(a).
"Company Subsidiary" means each Person which is a Subsidiary of the
Company.
"Confidentiality Agreement" means the Confidentiality Agreement, dated
October 13, 2003, between Parent and the Company (as it may be amended from
time to time).
"Continuing Employees" means Company Employees who continue employment
with Parent or the Surviving Corporation following the Effective Time.
"control" means, as to any Person, the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise. The term "controlled"
shall have a correlative meaning.
"Copyrights" means the copyright registrations set forth in Section 1.1(a)
of the Company Disclosure Schedule.
"D&O Insurance" means directors' and officers' liability insurance.
"DGCL" means the Delaware General Corporation Law, as amended from time to
time.
"Dissenting Shares" means shares of Company Common Stock outstanding
immediately prior to the Effective Time and held by a holder who has not voted
in favor of the Merger or consented thereto in writing and who has properly
demanded appraisal for such shares of Company Common Stock in accordance with
the DGCL.
"DOL" means the United States Department of Labor.
"Domain Names" means the Internet domain names set forth in Section 1.1(b)
of the Company Disclosure Schedule.
"Effective Time" has the meaning set forth in Section 2.3.
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"End Date" has the meaning set forth in Section 9.1(b)(i).
"Environmental Laws" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 and the Resource Conservation and
Recovery Act of 1976, each as amended, together with all other Applicable Laws
(including rules, regulations, codes, common law, injunctions, judgments,
Orders, decrees and rulings thereunder) of any Governmental Entity concerning
pollution or protection of the environment, including laws relating to
emissions, discharges, releases or threatened releases of Hazardous Substances
into ambient air, surface water, ground water or lands or otherwise relating to
the manufacture, generation, processing, distribution, use, treatment, storage,
disposal, clean-up, transport or handling of Hazardous Substances, in each case
as now in effect.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" has the meaning set forth in Section 4.12(a).
"ERISA Plans" has the meaning set forth in Section 4.12(a).
"ESPP" means the Company 2001 Employee Stock Purchase Plan.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Fund" has the meaning set forth in Section 3.2(a).
"FDA" means the United States Food and Drug Administration, or any
successor agency.
"FDCA" means the Federal Food, Drug and Cosmetic Act, as amended.
"Filed SEC Documents" has the meaning set forth in Section 4.5(c).
"Foreign Plan" means any Plan established or maintained outside of the
United States of America primarily for the benefit of employees of the Company
or any Company Subsidiary residing outside the United States of America.
"GAAP" means generally accepted accounting principles.
"Governmental Entity" means any:
(i) federal, state, local, municipal or foreign government;
(ii) governmental authority of any nature (including any governmental
agency, branch, board, department, official, instrumentality or entity and
any court or other tribunal); or
(iii) body exercising, or entitled to exercise, any administrative,
executive, judicial, legislative, police, regulatory or taxing authority
or power of any nature.
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"Hazardous Substance" means (i) any petrochemical or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, transformers or other equipment that contain
dielectric fluid containing polychlorinated biphenyls and radon gas or (ii) any
chemicals, materials or substances defined by any Governmental Entity as or
included in the definition of "hazardous substances," "hazardous wastes,"
"hazardous materials," "restricted hazardous materials," "extremely hazardous
substances," "toxic substances," "contaminants" or "pollutants" or words of
similar meaning and regulatory effect.
"Health and Safety Laws" means the Occupational Safety and Health Act of
1970, as amended, together with all other Applicable Laws (including rules,
regulations, codes, common law, plans, injunctions, judgments, Orders, decrees,
and rulings thereunder) of any Governmental Entity concerning public health and
safety or employee health and safety.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended.
"Incentive Plan" means each incentive or bonus plan or arrangement
maintained by the Company or any Company Subsidiary (other than the Option
Plans and the ESPP).
"Indemnified Party" has the meaning set forth in Section 7.5(a).
"Intellectual Property Rights" means any or all of the following and all
worldwide common law and statutory rights in, arising out of, or associated
with: (i) patents and applications therefor and all reissues, divisions,
renewals, extensions, provisionals, continuations and continuations-in-part
thereof; (ii) trade secrets (including proprietary know-how, technology,
technical data and customer lists, and all documentation relating to any of the
foregoing); (iii) copyrights, copyright registrations and applications
therefor; (iv) Internet domain names; (v) industrial designs and any
registrations and applications therefor; and (vi) trade names, logos, common
law trademarks and service marks, trademark and service xxxx registrations and
applications therefor.
"IRS" means the Internal Revenue Service.
"Knowledge" as it relates to the Company, means the knowledge of any of
the executive officers of the Company or the Company Subsidiaries upon
reasonable inquiry by such persons of those management level employees of the
Company and the Company Subsidiaries whose duties would, in the normal course
of the Company's or any of the Company Subsidiaries' affairs, result in such
management level employees having knowledge concerning such subject, area or
state of affairs.
"Legal Restraints" has the meaning set forth in Section 8.1(c).
"Licenses In" means the license agreements set forth in Section 1.1(c) of
the Company Disclosure Schedule.
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"Licenses Out" means the license agreements set forth in Section 1.1(d) of
the Company Disclosure Schedule.
"Liens" means liens, charges, security interests, options, claims,
mortgages, pledges, or other encumbrances and restrictions of any nature
whatsoever.
"Material Intellectual Property Rights" means all Intellectual Property
Rights that are material to the business, properties (including intangible
properties), assets, liabilities, financial condition or operation or results
of operations of the Company and the Company Subsidiaries, taken as a whole.
Without limiting the generality of the foregoing, any Intellectual Property
Right that is a material element of a material Product is a Material
Intellectual Property Right.
"Merger" has the meaning set forth in the Preamble.
"Merger Consideration" has the meaning set forth in Section 3.1(c).
"Notice of Superior Company Proposal" has the meaning set forth in Section
6.2(b).
"Option" has the meaning set forth in Section 7.7(a).
"Option Plans" means the Company 1997 Stock Plan, as amended, and the
Company 2001 Stock Plan, as amended.
"Order" means, with respect to any Person, any award, decision,
injunction, judgment, order, ruling, writ, decree, consent decree, or verdict
entered, issued, made or rendered by any court, administrative agency,
arbitrator or other Governmental Entity affecting such Person or any of its
properties.
"Parent" has the meaning set forth in the Preamble.
"Patents Licensed" means the patents and patent applications set forth in
Section 1.1(e) of the Company Disclosure Schedule.
"Patents Owned" means the patents and patent applications set forth in
Section 1.1(f) of the Company Disclosure Schedule.
"Paying Agent" means such paying agent selected by Parent and reasonably
satisfactory to the Company.
"Permits" means federal, state, local and foreign governmental approvals,
authorizations, certificates, filings, franchises, licenses, notices, permits
and rights, including all authorizations under Environmental Laws.
"Person" means any individual, firm, corporation (including any non-profit
corporation), general or limited partnership, company, limited liability
company, trust, joint venture, estate, association, organization, labor union
or other entity or Governmental Entity.
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"Plans" has the meaning set forth in Section 4.12(a).
"Post-Signing Returns" has the meaning set forth in Section 6.1(b).
"Proceeding" means any action, arbitration, audit, claim, hearing,
proceeding, investigation, litigation or suit (whether civil, criminal,
administrative or investigative) commenced, brought, conducted or heard by or
before, or otherwise involving, any Governmental Entity or arbitrator.
"Products" means, collectively, each of the Company's and the Company
Subsidiaries' products and products under development.
"Proxy Statement" means a proxy statement relating to the adoption by the
Company's stockholders of this Agreement (as amended or supplemented from time
to time).
"Rights Agreement" means the Rights Agreement, dated as of March 7, 2003,
between the Company and Computershare Investor Services, as rights agent.
"SEC" means the United States Securities and Exchange Commission.
"SEC Documents" has the meaning set forth in Section 4.5(a).
"Securities Act" means the Securities Act of 1933, as amended.
"Significant Agreements" means (i) any agreement, bond, commitment,
concession, contract, indenture, instrument, franchise, lease, license,
mortgage, note, understanding, undertaking or other arrangement that is filed
or required to be filed as an exhibit to the Company's SEC Documents, (ii) the
agreements set forth in Section 1.1(g) of the Company Disclosure Schedule and
(iii) any loan or credit agreements, notes, bonds, mortgages, indentures and
other agreements and instruments pursuant to which any indebtedness of the
Company or the Company Subsidiaries in an aggregate principal amount in excess
of $500,000 is outstanding or may be incurred (which agreements, including the
respective principal amounts currently outstanding and credit limits
thereunder, are set forth in Section 1.1(g) of the Company Disclosure
Schedule).
"Stockholder Agreement" has the meaning set forth in the Preamble.
"Stockholder Approval" has the meaning set forth in Section 4.17.
"Stockholders Meeting" has the meaning set forth in Section 7.1(b).
"Sub" has the meaning set forth in the Preamble.
"Subsidiary" or "Subsidiaries" means, with respect to any Person, any
corporation, association, general or limited partnership, company, limited
liability company, trust, joint venture, organization or other entity of which
more than fifty percent (50%) of the total voting power of shares of capital
stock or other interests (including partnership interests) entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors,
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managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by (i) such Person, (ii) such Person and one or more Subsidiaries
of such Person or (iii) one or more Subsidiaries of such Person.
"Subsidiary Organizational Documents" means the certificate of
incorporation and by-laws or similar organizational documents of each Company
Subsidiary.
"Superior Company Proposal" means any written bona fide proposal made by a
third party to acquire all the equity securities or assets of the Company and
the Company Subsidiaries through a tender or exchange offer, a merger, a
consolidation or other similar transaction that is (i) not subject to a
financing contingency and (ii) on terms that the Company Board determines in
its good faith judgment (after consultation with a financial advisor of
nationally recognized reputation, with only customary qualifications, and
independent legal counsel) to be superior for the holders of the Company Common
Stock, from a financial point of view, to the Merger, taking into account (A)
all the terms and conditions of such proposal and this Agreement (including any
proposal by Parent to amend the terms of this Agreement and the Merger) and (B)
the likelihood of consummation in light of all financial, regulatory, legal and
other aspects of such proposal (including, without limitation, any antitrust or
competition law approvals or non-objections); provided, that such a proposal
shall no longer be deemed a Superior Company Proposal if, prior to any
termination of this Agreement by the Company pursuant to the terms of Section
9.1(e), Parent proposes adjustments in the terms and conditions of this
Agreement and the Merger as favorable from a financial point of view to the
Company's stockholders as such proposal.
"Surviving Corporation" has the meaning set forth in Section 2.1.
"Surviving Corporation Plans" has the meaning set forth in Section 7.6(b).
"Tax" or "Taxes" means any and all present or future taxes (including
income, gross receipt, minimum or alternative minimum taxable income, sales,
rental, use, turnover, value added taxes that are in the nature of sales and
use taxes, property (tangible and intangible), transfer, capital, excise and
stamp taxes), licenses, levies, imposts, duties, recording charges or fees,
charges, assessments and withholdings of any nature whatsoever, together with
any and all assessments, penalties, fines, additions thereto and interest
thereon, in each case, imposed by any Governmental Entity (each, individually a
"Tax").
"Tax Return" means any return, declaration, form, report, statement,
information statement or other document required to be filed with respect to
Taxes under any applicable federal, state, local or foreign law.
"Termination Fee" has the meaning set forth in Section 9.3(b).
"Trademarks" means the marks set forth in Section 1.1(h) of the Company
Disclosure Schedule.
"Voting Debt" has the meaning set forth in Section 4.3.
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"WARN Act" means the Worker Adjustment Retraining Notification Act of
1988, as amended.
ARTICLE II
The Merger
Section 2.1 The Merger. Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with the DGCL, Sub shall be merged
with and into the Company at the Effective Time. 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.
At the election of Parent, any direct wholly-owned Subsidiary of Parent may be
substituted for Sub as a constituent corporation in the Merger. In such event,
the parties hereto agree to execute an appropriate amendment to this Agreement
in order to reflect such substitution.
Section 2.2 Closing. The Closing shall take place at the offices of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, 000 Xxxx Xxxxxx Xxxxx, Xxxxxxx,
Xxxxxxxx at 10:00 a.m., Chicago time, as soon as practicable, but in any event
within two (2) Business Days after satisfaction or waiver of the conditions set
forth in Article VIII (other than conditions that by their terms are to be
satisfied at the Closing, but subject to the satisfaction or waiver of such
conditions at the Closing), unless another place, time and date are agreed to
in writing by Parent and the Company.
Section 2.3 Effective Time. Subject to the provisions of this Agreement,
as soon as practicable on or after the Closing Date, the parties shall file the
Certificate of Merger with the Secretary of State of the State of Delaware
executed in accordance with the relevant provisions of the DGCL and shall make
all other filings or recordings required under the DGCL in order to effect the
Merger. The Merger shall become effective at such time as the Certificate of
Merger is duly filed with the Secretary of State of the State of Delaware, or
at such other time as Parent and the Company shall agree should be specified in
the Certificate of Merger (the time the Merger becomes effective being, the
"Effective Time").
Section 2.4 Effects of the Merger. The Merger shall have the effects set
forth in Section 259 of the DGCL.
Section 2.5 Certificate of Incorporation and By-Laws.
(a) The certificate of incorporation of Sub, as in effect immediately
prior to the Effective Time, shall be the certificate of incorporation of the
Surviving Corporation until thereafter changed or amended as provided therein
or by Applicable Law, except that the name of the Surviving Corporation in such
Certificate of Incorporation shall be changed to "TheraSense, Inc.".
(b) The by-laws of Sub, as in effect immediately prior to the
Effective Time, shall be the by-laws of the Surviving Corporation until
thereafter changed or amended as provided therein or by Applicable Law.
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Section 2.6 Directors. The directors of Sub immediately prior to the
Effective Time shall be the directors of the Surviving Corporation, until the
earlier of their resignation or removal or until their respective successors
are duly elected and qualified, as the case may be.
Section 2.7 Officers. The officers of the Company immediately prior to the
Effective Time shall be the officers of the Surviving Corporation, until the
earlier of their resignation or removal or until their respective successors
are duly elected and qualified, as the case may be.
ARTICLE III
Effect of the Merger on the Capital Stock of the
Constituent Corporations; Exchange of Certificates
Section 3.1 Effect on Capital Stock. As of the Effective Time, by virtue
of the Merger and without any action on the part of the holder of any shares of
Company Common Stock, or any shares of capital stock of Sub:
(a) Capital Stock of Sub. Each issued and outstanding share of capital
stock of Sub shall be converted into and become one validly issued, fully paid
and nonassessable share of common stock, par value $0.01 per share, of the
Surviving Corporation.
(b) Cancellation of Treasury Stock and Parent-Owned Stock. Each share
of Company Common Stock that is owned by the Company or any Company Subsidiary
and each share of Company Common Stock that is owned by Parent or Sub shall
automatically be canceled and retired and shall cease to exist, and no
consideration shall be delivered in exchange therefor.
(c) Conversion of Company Common Stock. Subject to Section 3.3, each
issued and outstanding share of Company Common Stock (other than shares to be
canceled in accordance with Section 3.1(b)), together with each associated
"Right" (as defined in the Rights Agreement), shall be converted into the right
to receive $27.00 in cash (the "Merger Consideration") payable, without
interest, to the holder of such share of Company Common Stock upon surrender of
the Certificate that formerly evidenced such share of Company Common Stock in
the manner provided in Section 3.2.
Section 3.2 Exchange of Certificates.
(a) Paying Agent. Prior to the Effective Time, Parent shall select the
Paying Agent for the payment of the Merger Consideration upon surrender of
Certificates representing Company Common Stock. When and as needed, Parent or
Sub shall deposit, or cause to be deposited, in trust with the Paying Agent,
the Merger Consideration to which holders of shares of Company Common Stock
shall have the right to receive at the Effective Time pursuant to Section
3.1(c) (such amount being hereinafter referred to as the "Exchange Fund").
(b) Exchange Procedures. As soon as reasonably practicable after the
Effective Time, Parent shall cause the Paying Agent to mail to each Person who
was, at the
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Effective Time, a holder of record of shares of Company Common Stock entitled
to receive the Merger Consideration pursuant to Section 3.1(c), (i) 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 delivery of the
Certificates to the Paying Agent and shall be in such form and have such other
provisions as Parent may reasonably specify) and (ii) instructions for use in
effecting the surrender of the Certificates in exchange for payment of the
Merger Consideration. Upon surrender of a Certificate for cancellation to the
Paying Agent, or to such other agent or agents as may be appointed by Parent,
together with such letter of transmittal, duly completed and validly executed,
and such other documents as may reasonably be required by the Paying Agent, the
holder of such Certificate shall be entitled to receive in exchange therefor
the Merger Consideration for each share of Company Common Stock theretofore
represented by such Certificate, and the Certificate so surrendered shall
forthwith be canceled. If payment of the Merger Consideration is to be made to
a Person other than the Person in whose name the surrendered Certificate is
registered, it shall be a condition precedent of payment that (x) the
Certificate so surrendered shall be properly endorsed or shall be otherwise in
proper form for transfer and (y) the Person requesting such payment shall have
paid any transfer and other Taxes required by reason of the payment of the
Merger Consideration to a Person other than the registered holder of the
Certificate surrendered or shall have established to the satisfaction of the
Surviving Corporation that such Tax either has been paid or is not required to
be paid. Until surrendered as contemplated by this Section 3.2, each
Certificate shall be deemed after the Effective Time to represent only the
right to receive the applicable Merger Consideration, without interest thereon.
(c) No Further Ownership Rights in Company Common Stock. All Merger
Consideration paid in accordance with the terms of this Section 3.2 upon
conversion of any shares of Company Common Stock shall be deemed to have been
paid in full satisfaction of all rights pertaining to such shares of Company
Common Stock. At the close of business on the day on which the Effective Time
occurs, the stock transfer books of the Company shall be closed, and there
shall be no further registration of transfers on the stock transfer books of
the Surviving Corporation of the shares of Company Common Stock that were
outstanding immediately prior to the Effective Time. If, after the Effective
Time, any Certificates are presented to the Surviving Corporation, Parent or
the Paying Agent for any reason, they shall be canceled and exchanged as
provided in this Article III.
(d) Termination of Exchange Fund. Any portion of the Exchange Fund
(including any earnings received with respect thereto) that remains
undistributed to the holders of Certificates six (6) months after the Effective
Time shall be delivered to the Surviving Corporation, and any holder of a
Certificate who has not theretofore complied with this Article III shall
thereafter look only to the Surviving Corporation (subject to abandoned
property, escheat or similar Applicable Law) for payment of its claim for
Merger Consideration.
(e) Investment of Exchange Fund. The Paying Agent shall invest any
cash included in the Exchange Fund, as directed by Parent, on a daily basis. Any
interest and other income resulting from such investments shall be paid to
Parent or the Surviving Corporation.
11
(f) No Liability. None of Parent, the Surviving Corporation nor the
Paying Agent shall be liable to any holder of a Certificate for any Merger
Consideration delivered to a public official pursuant to any applicable
abandoned property, escheat or similar Applicable Law.
(g) Lost Certificates. If any Certificate shall have been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the Person
claiming such Certificate to be lost, stolen or destroyed and, if required by
the Surviving Corporation, the posting by such Person of a bond in such
reasonable amount as the Surviving Corporation may direct as indemnity against
any claim that may be made against it with respect to such Certificate, the
Paying Agent shall issue in exchange for such lost, stolen or destroyed
Certificate the Merger Consideration deliverable in respect thereof as
determined in accordance with Section 3.1(c).
(h) Withholding of Tax. The Paying Agent, the Surviving Corporation or
Parent shall be entitled to deduct and withhold from the consideration
otherwise payable pursuant to this Agreement to any holder of Company Common
Stock such amounts as the Paying Agent, the Surviving Corporation or Parent, as
the case may be, is required to deduct and withhold with respect to such
payment under the Code or any provisions of state, local or foreign Tax law.
Any amounts so withheld shall be treated for all purposes of this Agreement as
having been paid to the holder of the Company Common Stock in respect of which
such deduction and withholding was made.
Section 3.3 Dissenting Shares. Dissenting Shares shall not be converted
into a right to receive the Merger Consideration as set forth herein, but
rather such holder shall be entitled to receive such consideration as shall be
determined pursuant to the DGCL; provided, however, that if, after the
Effective Time, such holder fails to perfect or withdraws or loses his right to
appraisal, such shares of Company Common Stock shall be treated as if they had
converted as of the Effective Time into a right to receive the Merger
Consideration, without interest thereon, and such shares shall no longer be
Dissenting Shares. The Company shall provide Parent (i) prompt notice of any
demands for appraisal of any shares of Company Common Stock, attempted
withdrawals of any such demands and any other instruments served pursuant to
the DGCL and received by the Company relating to rights of appraisal and (ii)
the opportunity to participate in and direct all negotiations and Proceedings
with respect to such demands. The Company shall not, except with the prior
written consent of Parent, make any payment with respect to, or settle or offer
to settle, any such demands, or agree to do any of the foregoing.
Section 3.4 Adjustment of Merger Consideration. Without limiting or in any
way modifying the covenant of the Company set forth in Section 6.1(a)(i), if
prior to 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, reclassification, recapitalization, split,
division, combination, exchange of shares or similar transaction, the Merger
Consideration shall be proportionately adjusted to reflect such change.
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ARTICLE IV
Representations and Warranties of the Company
Except as set forth in a schedule delivered to Parent prior to the
execution of this Agreement (the "Company Disclosure Schedule"), the Company
represents and warrants to Parent and Sub as set forth below. Each exception
set forth in the Company Disclosure Schedule shall be identified by reference
to, or be grouped under a heading referring to, a specific individual section
or subsection of this Agreement and shall relate only to such section or
subsection, except to the extent that (a) one portion of the Company Disclosure
Schedule specifically refers to another portion thereof by specific cross
reference or (b) it is readily apparent from the text of the disclosure in the
Company Disclosure Schedule that an item disclosed in one section or subsection
of the Company Disclosure Schedule is omitted from another section or
subsection where such disclosure would be appropriate, in which case such item
shall be deemed to have been disclosed in the section or subsection of the
Company Disclosure Schedule from which such item is omitted.
Section 4.1 Organization, Standing and Corporate Power. The Company is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all requisite corporate power and
authority to own, lease, possess and operate its properties and assets and to
carry on its business as now being conducted. The Company is duly qualified or
licensed to do business and is in good standing in each jurisdiction where the
nature of its business or the ownership, leasing or operation of its properties
makes such qualification or licensing necessary, other than in such
jurisdictions where the failure to be so qualified or licensed, individually or
in the aggregate, would not have a Company Material Adverse Effect. The Company
has delivered to Parent true and complete copies of its certificate of
incorporation and by-laws, in each case as amended to the date hereof. The
Company is not in violation of any of the provisions of its certificate of
incorporation and by-laws.
Section 4.2 Subsidiaries.
(a) Section 4.2(a)(i) of the Company Disclosure Schedule sets forth
the name, jurisdiction of incorporation or organization and authorized and
outstanding capital of each Company Subsidiary. Except as set forth in Section
4.2(a)(ii) of the Company Disclosure Schedule, other than with respect to the
Company Subsidiaries, the Company does not own, directly or indirectly, any
capital stock or other equity securities of any Person or have any direct or
indirect equity or ownership interest in any business. All of the outstanding
capital stock (or similar equity interests) of each Company Subsidiary is owned
directly or indirectly by the Company free and clear of all Liens, and is
validly issued, fully paid and nonassessable. There are no outstanding options,
rights or agreements of any kind relating to the issuance, sale or transfer of
any capital stock (or similar equity interests) of any such Company Subsidiary
to any Person except the Company or another wholly-owned Company Subsidiary.
(b) Each Company Subsidiary (i) is duly organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation or
organization, (ii) has all requisite corporate power and authority to own,
lease, possess and operate its properties and assets and to carry on its
business as now being conducted and (iii) is duly qualified or licensed
13
to do business and is in good standing in each jurisdiction where the nature of
such Company Subsidiary's business or the ownership, leasing or operation of
its properties makes such qualification or license necessary, other than in
such jurisdictions where the failure to be so licensed or qualified,
individually or in the aggregate, would not have a Company Material Adverse
Effect.
(c) The Company has delivered to Parent true and complete copies of
the Subsidiary Organizational Documents, in each case as amended to the date
hereof. No Company Subsidiary is in violation of any provision of the
applicable Subsidiary Organizational Documents.
Section 4.3 Capital Structure. The authorized capital stock of the Company
consists of 205,000,000 shares of Company Common Stock and 5,000,000 shares of
preferred stock, par value $0.001 per share. As of the date hereof, (a)
41,887,260 shares of Company Common Stock are issued and outstanding, none of
which are subject to stock repurchase rights pursuant to the Option Plans, (b)
no shares of Company Common Stock are held by the Company in its treasury, (c)
8,995,583 shares of Company Common Stock are subject to outstanding Options,
(d) 858,420 shares of Company Common Stock are reserved for issuance pursuant
to the ESPP, (e) 13,045,592 shares of Company Common Stock are reserved for
issuance pursuant to the Option Plans and (f) 200,000 shares of the Company's
Series A Cumulative Participating Preferred Stock are reserved for issuance in
connection with the Rights Agreement. Except as set forth above, as of the date
hereof, no shares of capital stock or other voting securities of the Company
are issued, reserved for issuance or outstanding. All outstanding shares of
capital stock of the Company are, and all shares which may be issued pursuant
to the Option Plans and the ESPP shall be when issued in accordance with the
terms thereof, duly authorized, validly issued, fully paid and nonassessable
and not subject to preemptive rights. There are no bonds, debentures, notes or
other indebtedness of the Company or any Company Subsidiaries having the right
to vote (or convertible into securities having the right to vote) on any
matters on which stockholders of the Company may vote ("Voting Debt"). Except
as set forth above or as set forth in Section 4.3 of the Company Disclosure
Schedule, there are no securities, options, warrants, calls, conversion rights,
stock appreciation rights, redemption rights, repurchase rights, preemptive
rights, subscriptions or other rights, commitments, agreements, arrangements or
undertakings of any kind to which the Company or any Company Subsidiary is a
party, or by which either is bound, obligating the Company or any Company
Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold,
additional shares of capital stock or other securities or assets of the Company
or any Company Subsidiary or obligating the Company or any Company Subsidiary
to issue, grant, extend or enter into any such security, option, warrant, call,
conversion right, stock appreciation right, redemption right, repurchase right,
preemptive right, subscription or other right, commitment, agreement,
arrangement or undertaking. There are no outstanding contractual obligations of
the Company to repurchase, redeem or otherwise acquire any shares of capital
stock of the Company.
Section 4.4 Authority; Noncontravention.
(a) The Company has all necessary corporate power and authority to
execute and deliver this Agreement and, subject to obtaining Stockholder
Approval in the case of the Merger, to consummate the transactions contemplated
by this Agreement. The execution,
14
delivery and performance of this Agreement by the Company and the consummation
by the Company of the transactions contemplated by this Agreement have been
duly authorized by all necessary corporate action on the part of the Company,
subject to obtaining Stockholder Approval in the case of the Merger. This
Agreement has been duly executed and delivered by the Company and constitutes
(assuming due authorization, execution and delivery by Parent and Sub) a valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except to the extent that enforceability may be
limited by applicable bankruptcy, insolvency, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and subject to general
principles of equity.
(b) The Company Board, at a meeting duly called and held prior to
execution of this Agreement, duly and unanimously adopted resolutions (i)
approving and declaring advisable this Agreement, the Stockholder Agreement and
the transactions contemplated hereby and thereby (such approvals having been
made in accordance with the DGCL, including for purposes of Section 203
thereof), (ii) determining that the terms of the Merger are fair to and in the
best interests of the Company and its stockholders, (iii) recommending that the
Company's stockholders approve and adopt this Agreement and the Merger, (iv)
adopting this Agreement and (v) amending the Rights Agreement (as provided in
Section 4.19), which resolutions have not been modified, supplemented or
rescinded and remain in full force and effect.
(c) Except as otherwise provided in Section 4.4(c) of the Company
Disclosure Schedule, the execution and delivery of this Agreement do not, and
the consummation of the transactions contemplated by this Agreement and
compliance with the provisions of this Agreement shall not, (i) conflict with,
or result in any violation of, the certificate of incorporation or by-laws of
the Company or any of the Subsidiary Organizational Documents, (ii) conflict
with, or result in any violation of, any Applicable Law or (iii) result in any
breach of, or constitute a default (with or without notice or lapse of time, or
both) under, or give rise to a right of termination, amendment, cancellation or
acceleration of any obligation or to a loss of a material benefit under, or
result in the creation of any Liens in or upon any of the properties or assets
of the Company or any Company Subsidiary, pursuant to any loan or credit
agreement, note, bond, mortgage, indenture, lease, license, sublease, easement,
covenant, condition, restriction, contract, instrument, permit, concession,
franchise license or other instrument or obligation other than, in the case of
clauses (ii) and (iii), any such conflicts, violations, breaches, defaults,
rights or Liens that, individually or in the aggregate, would not (x) be
material to the Company and the Company Subsidiaries, taken as a whole, (y)
impair in any material respect the ability of the Company to perform its
obligations under this Agreement or (z) prevent or materially delay the
consummation of any of the transactions contemplated by this Agreement.
(d) No consent, approval, Order or authorization of, or
registration, declaration or filing with, or notification to, any Governmental
Entity is required by or with respect to the Company or any Company
Subsidiaries in connection with the execution and delivery of this Agreement by
the Company or the consummation by the Company of the transactions contemplated
by this Agreement, except (i) the filing of a pre-merger notification and
report form by the Company under the HSR Act, and compliance with the
pre-merger notification requirements in Austria, Germany, Ireland, Italy and
the Czech Republic, (ii) the
15
filing with the SEC of the Proxy Statement and such reports under the Exchange
Act as may be required in connection with this Agreement, the Stockholder
Agreement and the transactions contemplated hereby and thereby, (iii) the
filing of the Certificate of Merger with the Secretary of State of the State of
Delaware and appropriate documents with the relevant authorities of other
states in which the Company or any of the Company Subsidiaries is qualified to
do business and (iv) such other consents, approvals, Orders, authorizations,
registrations, declarations, filings and notifications, the failure of which to
be obtained or made would not, individually or in the aggregate, (x) be
material to the Company and the Company Subsidiaries, taken as a whole, (y)
impair in any material respect the ability of the Company to perform its
obligations under this Agreement or (z) prevent or materially delay the
consummation of any of the transactions contemplated by this Agreement.
Section 4.5 SEC Documents; Financial Statements; Undisclosed Liabilities.
(a) The Company has filed all reports, schedules, forms, statements
and other documents (including exhibits and other information incorporated
therein) required to be filed by the Company with the SEC since October 17,
2001 (the "SEC Documents") in a timely manner. As of their respective dates
(or, if amended or superceded by a subsequent filing made prior to the date
hereof, on the date of such subsequent filing), each of the SEC Documents
complied in all material respects with the requirements of the Securities Act
or the Exchange Act, as the case may be, and the rules and regulations of the
SEC promulgated thereunder applicable to such SEC Documents, and none of the
SEC Documents at the time they were filed contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(b) The financial statements (including, in each case, any related
notes thereto) of the Company included in the SEC Documents comply as to form
in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with GAAP applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto and except,
in the case of the unaudited interim statements, as may be permitted under Form
10-Q of the Exchange Act) and fairly present in all material respects the
consolidated financial position of the Company and its consolidated
Subsidiaries as of the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments).
(c) The Company and the Company Subsidiaries have no liabilities of
any nature, whether accrued, absolute, contingent or otherwise, and whether or
not required to be disclosed on a balance sheet prepared in accordance with
GAAP, except liabilities (i) disclosed in the SEC Documents filed prior to the
date of this Agreement (the "Filed SEC Documents"), including liabilities
stated or reserved against in the financial statements of the Company or in the
notes thereto included in the Filed SEC Documents, (ii) relating to any
obligations remaining to be performed by the Company or any Company Subsidiary
in accordance with the terms of any agreement to which the Company or any
Company Subsidiary is a party (other than liabilities for Product warranty
obligations thereunder), (iii) incurred in the ordinary and usual course of
business consistent with past practice since September 30, 2003 or (iv) that
would not,
16
individually or in the aggregate, be material to the Company and the Company
Subsidiaries, taken as a whole.
Section 4.6 Information Supplied. None of the information supplied or to
be supplied by or on behalf of the Company for inclusion or incorporation by
reference in the Proxy Statement will, at the date the Proxy Statement is first
mailed to the stockholders of the Company or at the time of the Stockholders
Meeting, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made,
not misleading, except that no representation or warranty is made by the
Company with respect to statements made or incorporated by reference therein
based on information supplied in writing by or on behalf of Parent or Sub
specifically for inclusion or incorporation by reference therein. The Proxy
Statement will comply as to form in all material respects with the requirements
of the Exchange Act and the rules and regulations promulgated thereunder.
Section 4.7 Absence of Certain Changes or Events. Except as set forth in
Section 4.7(a) of the Company Disclosure Schedule, since September 30, 2003,
(a) the Company and the Company Subsidiaries have conducted their business only
in the ordinary and usual course of business consistent with past practice, (b)
there has not been any Company Material Adverse Effect, (c) none of the Company
or any Company Subsidiary has taken any action that, if taken after the date of
this Agreement, would constitute a breach of any of the covenants set forth in
Section 6.1(a)(iv), 6.1(a)(v), 6.1(a)(vi), 6.1(a)(xiii) or 6.1(a)(xx) of this
Agreement and (d) the Company and the Company Subsidiaries have not made any
capital expenditure or expenditures in excess of the amounts set forth in
Section 4.7(b) of the Company Disclosure Schedule.
Section 4.8 Litigation.
(a) Except as set forth in Section 4.8(a) of the Company Disclosure
Schedule, as of the date hereof, there is no Proceeding pending in which the
Company or any Company Subsidiary is a named party or, to the Knowledge of the
Company, any material Proceeding threatened against or affecting the Company or
any Company Subsidiary.
(b) There are no outstanding Orders against the Company or any
Company Subsidiary, any of their properties, assets or businesses, or, to the
Knowledge of the Company, any Person whom the Company has agreed to indemnify
that, individually or in the aggregate, are material to the Company and the
Company Subsidiaries, taken as a whole.
Section 4.9 Contracts.
(a) The Company has made available to Parent prior to the date of
this Agreement complete and correct copies of each of the Significant
Agreements, each as amended or modified to the date hereof (including any
waivers currently in effect with respect thereto). Each of the Significant
Agreements is valid and binding on the Company or a Company Subsidiary, as
applicable, and, to the Knowledge of the Company, on each other party thereto,
and is in full force and effect, except in each case as may be limited by
applicable bankruptcy, insolvency, moratorium or other similar laws affecting
the enforcement of creditors' rights
17
generally, and subject in each case to general principles of equity. Except as
set forth in Section 4.9(a)(i) of the Company Disclosure Schedule, neither the
Company nor any Company Subsidiary has received any notice (written or oral) of
cancellation or termination of, or expressed desire to cancel or terminate, any
of the Significant Agreements. Except as set forth in Section 4.9(a)(ii) of the
Company Disclosure Schedule, since January 1, 2003, no party to a Significant
Agreement has requested any material amendment to such agreement.
(b) No condition exists or event has occurred that (whether with or
without notice or lapse of time or both) would constitute a material violation
or default by the Company or any Company Subsidiary or, to the Knowledge of the
Company, any other party thereto under any Significant Agreement or result in a
right of termination of any Significant Agreement.
(c) Except as set forth in Section 4.9(c)(i) of the Company
Disclosure Schedule or with respect to restrictions imposed by Licenses In and
Licenses Out, the Company is not subject to the terms of any right of first
refusal, option or exclusivity agreement (including any area restrictions) that
may restrict in any way the conduct or operations or future conduct or
operations of the business of the Company or any Company Subsidiary or the use
of any Intellectual Property Rights. Except as set forth in Section 4.9(c)(ii)
of the Company Disclosure Schedule, the Company is not subject to the terms of
any non-competition agreement.
(d) Set forth in Section 4.9(d) of the Company Disclosure Schedule
is a list of all written agreements between the Company or any Company
Subsidiary and any distributor or reseller currently in effect, complete and
correct copies of which have been delivered or made available to Parent prior
to the date of this Agreement (including any waivers currently in effect with
respect thereto).
Section 4.10 Compliance with Laws.
(a) The business and operations of the Company and each of the
Company Subsidiaries has been and is being conducted in compliance in all
material respects with all Applicable Laws and Orders, including, without
limitation, ERISA, Environmental Laws, Health and Safety Laws, and all
Applicable Laws and Orders relating to antitrust or trade regulation, and
employment practices and procedures. None of the Company or any of the Company
Subsidiaries has, since December 31, 1998, been subject to any Order with
respect to any of the foregoing or received any written notice, demand letter,
federal or state administrative inquiry, or formal complaint or claim with
respect to any of the foregoing or the enforcement of any of the foregoing, nor
has the Company or any Company Subsidiary been the subject of any criminal
Proceedings or convicted of any felony or misdemeanor. In particular, and
without limiting the foregoing, none of the Company, the Company Subsidiaries,
or any director, officer or, to the Knowledge of the Company, agent or employee
of the Company or the Company Subsidiaries acting in such capacity has,
directly or indirectly, (i) violated or been under investigation for violating
any Applicable Law or regulation relating to Medicare or Medicaid anti-kickback
fraud and abuse or been debarred from participating in the Medicare or any
state Medicaid program, (ii) used any corporate funds of the Company or any of
the Company Subsidiaries for unlawful contributions, gifts, entertainment, or
other unlawful expenses relating to political activity, (iii) made any unlawful
payment to foreign or domestic government officials
18
or employees or to foreign or domestic political parties or campaigns from
corporate funds, (iv) violated any provision of the Foreign Corrupt Practices
Act of 1977, as amended, (v) established or maintained any unlawful or
unrecorded fund of corporate moneys or other assets or properties of the
Company or any of the Company Subsidiaries, (vi) made any false or fictitious
entry on the books or records of the Company or any of the Company
Subsidiaries, (vii) made any bribe, rebate, payoff, influence payment,
kickback, or other unlawful payment, or made any other payment of a similar or
comparable nature, whether lawful or not, to any Person, regardless of form,
whether in money, property, or services, to obtain favorable treatment in
securing business or to obtain special concessions, or to pay for favorable
treatment for business secured or for special concessions already obtained,
which as to the preceding clauses (i) through (vii) would be reasonably likely,
individually or in the aggregate, to be material to the Company and the Company
Subsidiaries, taken as a whole. Each of the Company and the Company
Subsidiaries has adequate financial controls that would reasonably be expected
to prevent such improper or unlawful contributions, payments, gifts,
entertainment or expenditures.
(b) The Company and each of the Company Subsidiaries have in effect
all Permits necessary for them to own, lease, sublease, license or operate
their properties and assets and to carry on their businesses as now conducted,
and there has occurred no default under, or violation of, any such Permit,
except for defaults under, or violations of, Permits which default or violation
individually or in the aggregate would not be material to the Company and the
Company Subsidiaries, taken as a whole.
Section 4.11 Employment Matters. Except as set forth in Section 4.11 of
the Company Disclosure Schedule:
(a) In the last three (3) years, neither the Company nor any Company
Subsidiary has experienced, nor were there threatened or pending, any labor
strikes, slowdowns, lockouts, grievances or other disputes arising out of any
collective bargaining agreement. There are no unfair labor practice charges or
complaints against the Company or any Company Subsidiary pending before the
National Labor Relations Board or any foreign equivalent. To the Knowledge of
the Company, there has been no organizational effort made or threatened by or
on behalf of any labor union with respect to employees of the Company or any
Company Subsidiary.
(b) There are no collective bargaining or other labor union
agreements to which the Company or any Company Subsidiary is a party or by
which it is bound.
(c) The Company has heretofore delivered or made available copies to
Parent of each material personnel policy, rule or procedure applicable to
employees of the Company and the Company Subsidiaries.
(d) Neither the Company nor any Company Subsidiary is a party to, or
otherwise bound by, any consent decree or settlement agreement with, or
citation by, any Governmental Entity relating to employees or employment
practices.
(e) In the past three (3) years, the Company has complied in all
material respects with the notification provisions (or paid severance in lieu
thereof) of the WARN Act and similar state or foreign laws.
19
(f) Neither the Company nor any Company Subsidiary has caused any of
its employees to suffer an "employment loss" (as defined in the WARN Act)
during the ninety (90) day period prior to the date hereof.
(g) Except as set forth in Section 4.11(g) of the Company Disclosure
Schedule, there is no material employment law or labor relations suit, claim,
charge, action, investigation, hearing or Proceeding pending or, to the
Knowledge of the Company, threatened against the Company or any Company
Subsidiary.
Section 4.12 Employee Benefit Plans; ERISA.
(a) Section 4.12(a) of the Company Disclosure Schedule contains a true
and complete list of each employment (other than at-will offer letters with no
severance or compensation term guarantee), bonus, deferred compensation,
incentive compensation, stock purchase, stock option, stock appreciation right
or other stock-based incentive, severance, change-in-control, or termination
pay, hospitalization or other medical, disability, life or other insurance,
supplemental unemployment benefits, profit-sharing, pension, or retirement
plan, program, agreement or arrangement and each other employee benefit plan,
program, agreement or arrangement, sponsored, maintained or contributed to or
required to be contributed to by the Company or any Company Subsidiary, or by
any trade or business, whether or not incorporated (an "ERISA Affiliate"), that
together with the Company or any Company Subsidiary would be deemed a "single
employer" under Section 414(b), (c), (m) or (o) of the Code, for the benefit of
any current or former employee or director of the Company, or any Company
Subsidiary or any ERISA Affiliate (the "Plans"). Section 4.12(a) of the Company
Disclosure Schedule identifies each Plan that is an "employee welfare benefit
plan" or "employee pension benefit plan" as such terms are defined in Sections
3(1) and 3(2) of ERISA (such plans being hereinafter referred to collectively
as the "ERISA Plans").
(b) With respect to each of the Plans, the Company has heretofore
delivered or made available to Parent true and complete copies of each of the
following documents, as applicable:
(i) a copy of the Plan (including all amendments thereto) for each
written material Plan or a written description of any material Plan that
is not otherwise in writing;
(ii) a copy of the annual report or IRS Form 5500 Series, if required
under ERISA, with respect to each ERISA Plan for the last two (2) Plan
years ending prior to the date of this Agreement for which such a report
was filed;
(iii) a copy of the actuarial report, if required under ERISA, with
respect to each ERISA Plan for the last two (2) Plan years ending prior to
the date of this Agreement;
(iv) a copy of the most recent Summary Plan Description, together
with all Summary of Material Modifications issued with respect to such
Summary Plan Description, if required under ERISA, with respect to each
ERISA
20
Plan, and all other material employee communications relating to each ERISA
Plan;
(v) if the Plan is funded through a trust or any other funding
vehicle (or if a rabbi trust or a similar arrangement has been established
in connection with a Plan), a copy of the trust, other funding vehicle, or
arrangement (including all amendments thereto) and the latest financial
statements thereof, if any;
(vi) all contracts relating to the Plans with respect to which the
Company, any Company Subsidiary or any ERISA Affiliate may have any
material liability; and
(vii) the most recent determination letter received from the IRS with
respect to each Plan that is intended to be qualified under Section 401(a)
of the Code.
(c) None of the Company, any Company Subsidiary nor any ERISA
Affiliate has any formal plan or binding commitment to create any additional
Plan or modify or change any existing Plan that would affect any current or
former employee or director of the Company, any Company Subsidiary or any ERISA
Affiliate, except as required by Applicable Law or to conform such Plan to the
requirements of any Applicable Law. There are no understandings, agreements or
undertakings, written or oral, or omissions that would prevent or impair any
Plan (including any Plan covering retirees or other former employees) from
being amended or terminated by the Company or the applicable Company Subsidiary
(or any successor thereto) on or at any time after the Effective Time.
(d) None of the Company, any Company Subsidiary nor any ERISA
Affiliate has ever maintained, contributed to or been obligated to contribute
to any employee pension benefit plan that is, or ever was, subject to Title IV
of ERISA. No Plan is a "multi-employer pension plan," as such term is defined
in Section 3(37) of ERISA.
(e) None of the Company, any Company Subsidiary, any ERISA Affiliate,
any of the ERISA Plans, any trust created thereunder, nor to the Company's
Knowledge, any trustee or administrator thereof has engaged in a transaction or
has taken or failed to take any action in connection with which the Company,
any Company Subsidiary or any ERISA Affiliate could be subject to any material
liability for either a civil penalty assessed pursuant to Section 409 or 502(i)
of ERISA or a Tax imposed pursuant to Section 4975, 4976 or 4980B of the Code.
(f) Each of the Plans has been operated and administered in all
material respects in accordance with Applicable Laws, including but not limited
to ERISA and the Code.
(g) Other than routine claims for benefits, there are no suits,
claims, actions, audits, investigations, IRS or DOL voluntary compliance
programs or other Proceedings pending or, to the Knowledge of the Company,
threatened against or otherwise involving any Plan.
21
(h) The Company has received a determination letter from the IRS
stating that each of the ERISA Plans that is intended to be "qualified" within
the meaning of Section 401(a) of the Code is so qualified, and the Company is
aware of no event that has occurred that would affect such qualified status.
Any fund established under an ERISA Plan that is intended to satisfy the
requirements of Section 501(c)(9) of the Code has satisfied such requirements.
(i) Except as set forth in Section 4.12(i) of the Company Disclosure
Schedule, the consummation of the transactions contemplated by this Agreement
will not, either alone or in combination with any other event, (i) entitle any
current or former employee, officer, director or consultant of the Company, any
Company Subsidiary or any ERISA Affiliate to severance pay, unemployment
compensation or any other similar termination payment or (ii) accelerate the
time of payment or vesting, or increase the amount of, or otherwise enhance,
any benefit due to any such employee, officer, director or consultant.
(j) Except as set forth in Section 4.12(j) of the Company Disclosure
Schedule, no amounts payable under any of the Plans or any other contract,
agreement or arrangement with respect to which the Company or any Company
Subsidiary may have any liability could fail to be deductible for federal
income tax purposes by virtue of Section 162(m) or Section 280G of the Code.
(k) No Plan provides benefits, including without limitation death or
medical benefits (whether or not insured), with respect to current or former
employees of the Company, any Company Subsidiary or any ERISA Affiliate after
retirement or other termination of service (other than (i) coverage mandated by
Applicable Laws, (ii) death benefits or retirement benefits under any employee
pension benefit plan or (iii) benefits, the full direct cost of which are borne
by the current or former employee (or beneficiary thereof)).
(l) Section 4.12(l) of the Company Disclosure Schedule lists all
outstanding Options as of the date hereof, showing for each Option: (i) the
total number of shares subject to such Option, (ii) the number of vested shares
subject to such Option at December 31, 2003, in the case of Options granted on
or prior to December 31, 2003, and at the date hereof, in the case of Options
granted after December 31, 2003, in each case not giving effect to any
acceleration of Options pursuant to Section 7.7 hereof, (iii) the date of
expiration of such Option, (iv) the exercise price per share of such Option and
(v) the Option Plan under which the Option was granted.
(m) With respect to each Foreign Plan: (i) all employer and employee
contributions to each Foreign Plan required by Applicable Law or by the terms
of such Foreign Plan have been made, or, if applicable, accrued, in accordance
with normal accounting practices; (ii) the fair market value of the assets of
each funded Foreign Plan, the liability of each insurer for any Foreign Plan
funded through insurance or the book reserve established for any Foreign Plan,
together with any accrued contributions, is sufficient to procure or provide
for the accrued benefit obligations with respect to all current and former
participants in such plan according to the actuarial assumptions and valuations
most recently used to determine employer contributions to such Foreign Plan,
and no transaction contemplated by this Agreement shall cause such assets or
insurance obligations to be less than such benefit obligations; and (iii) each
Foreign Plan
22
required to be registered has been registered and has been maintained in good
standing with applicable regulatory authorities.
(n) As of the date hereof, to the Knowledge of the Company, other
than as provided under the terms of the Plans, none of the Company or any
Company Subsidiary has made any representation or commitment to, or entered
into any formal or informal understanding with, any employee of the Company or
any Company Subsidiary with respect to compensation, benefits, or terms of
employment to be provided by Parent, the Surviving Corporation or any of the
Surviving Corporation's Subsidiaries at or subsequent to the Effective Time.
(o) None of assets of any Plan that are plan assets for purposes of
Title I of ERISA are employer securities or employer real property.
(p) Section 4.12(p) of the Company Disclosure Schedule sets forth (i)
the aggregate amount of payroll deductions as of the date of this Agreement
that have been allocated for purchases of common stock of the Company with
respect to each offering period underway on the date of this Agreement and (ii)
the fair market value of a share of common stock of the Company on the Offering
Date (as defined in the ESPP) with respect to each offering period underway on
the date of this Agreement.
Section 4.13 Taxes.
(a) Except as set forth in Section 4.13(a) of the Company Disclosure
Schedule, all material Tax Returns required to be filed by or with respect to
the Company or any Company Subsidiary have been filed and all material Taxes
required to be paid by or with respect to the Company or any Company
Subsidiary, whether disputed or not and whether or not shown on any Tax Return,
have been paid, except Taxes that are being contested in good faith by
appropriate proceedings and for which adequate provision in accordance with
GAAP has been made in the pertinent financial statements referred to in Section
4.5 hereof. All such material Tax Returns were true, correct and complete in
all material respects when filed. The provisions for Taxes on the financial
statements are sufficient as of their respective dates for the payment of all
accrued and unpaid Taxes of any nature of the Company and the Company
Subsidiaries, whether or not assessed or disputed, to the extent required by
GAAP.
(b) All material Taxes and other assessments and levies which the
Company or any Company Subsidiary is required to withhold or collect have been
withheld and collected and have been paid over to the proper Governmental
Entities in connection with amounts paid or owing to any employee, independent
contractor, creditor, stockholder or other third party in accordance with
Applicable Law.
(c) There is no pending or proposed dispute or Proceeding concerning
any Tax liability of the Company or any Company Subsidiary either (i) claimed
or raised by any Governmental Entity in writing and delivered to the Company or
(ii) as to which the Company has Knowledge based upon personal contact with any
agent of or other Person acting on behalf of or for such Governmental Entity.
Neither the Company nor any of the Company Subsidiaries has received notice of
any claim made by any Governmental Entity in a jurisdiction where the
23
Company or such Company Subsidiary does not file Tax Returns that the Company
or such Company Subsidiary is or may be subject to taxation by that
jurisdiction.
(d) There is no outstanding agreement, waiver or consent providing
for an extension of the statutory period of limitations with respect to any
Taxes or Tax Returns of the Company or a Company Subsidiary.
(e) There are no Liens for Taxes with respect to the Company or any
of the Company Subsidiaries, other than (i) Liens for Taxes not yet due and
payable and (ii) Liens in respect of Taxes being contested in good faith and
for which appropriate reserves have been established.
(f) Neither the Company nor any of the Company Subsidiaries is a
party to or is otherwise bound by any agreement or understanding providing for
the allocation or sharing of Taxes or has any obligation or liability under any
such agreement or understanding to which it was once a party or otherwise
bound.
(g) Neither the Company nor any of the Company Subsidiaries is a
party to a "tax shelter" or a "listed transaction" as defined in Section 6111
of the Code or the regulations thereunder.
(h) Neither the Company nor any Company Subsidiary has (i) been a
member of an affiliated group as defined under Section 1504 of the Code (other
than an affiliated group of which the common parent was the Company) and (ii)
liability for Taxes of any Person (other than the Company or a Company
Subsidiary) under Treas. Reg. 1.1502-6 (or any similar provision of state,
local or foreign law), as a transferee or successor, by contract or otherwise.
Section 4.14 Environmental.
(a) Except as would not, individually or in the aggregate, be
material to the Company and the Company Subsidiaries, taken as a whole, each of
the Company and the Company Subsidiaries has complied with all applicable
Environmental Laws, and no Proceeding, charge, demand, or notice has been
filed, commenced or, to the Knowledge of the Company, threatened against any of
the Company or the Company Subsidiaries alleging any failure to so comply.
Without limiting the generality of the preceding sentence, each of the Company
and the Company Subsidiaries has obtained all Permits that are required under,
and has complied with all other limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules, and timetables
that are contained in, all Environmental Laws, except in each foregoing case
where the failure to obtain any such Permit or any non-compliance, individually
or in the aggregate, would not be material to the Company and the Company
Subsidiaries, taken as a whole.
(b) Except as would not, individually or in the aggregate, be
material to the Company and the Company Subsidiaries, taken as a whole:
(i) none of the Company or any of the Company Subsidiaries has any
liability for damage to any site, location or body of water (surface or
subsurface), for any illness of or personal injury to any employee or
24
other individual, or for any other reason, in each case under applicable
Environmental Laws; and
(ii) none of the Company or any of the Company Subsidiaries has
handled or disposed of any Hazardous Substance, arranged for the disposal
of any Hazardous Substance, exposed any employee or other individual to
any Hazardous Substance or condition or owned or operated any property or
facility in any manner that could reasonably be expected to form the basis
for any present or future Proceeding, charge, or demand against the
Company or any Company Subsidiary.
(c) All properties and equipment used in the business of the Company
and the Company Subsidiaries are now and have been free from any Hazardous
Substance that would be material to the Company and the Company Subsidiaries,
taken as a whole, except for reasonable quantities of substances typically used
and reasonably necessary for the ordinary operation of the business of the
Company and the Company Subsidiaries or the maintenance of any real property
set forth on Section 4.15(a) of the Company Disclosure Schedule, so long as
such substances are used, transported, stored and handled in accordance with
applicable Environmental Laws.
Section 4.15 Title to Properties.
(a) Set forth in Section 4.15(a) of the Company Disclosure Schedule
is a list of all of the real property leased, subleased or otherwise occupied
by the Company or any Company Subsidiary. Neither the Company nor any Company
Subsidiary owns either directly or as a beneficiary any real property. Other
than with respect to Intellectual Property Rights, which are addressed in
Section 4.16, each of the Company and the Company Subsidiaries has good and
marketable title to, or valid leasehold interests in, all its properties and
assets, free and clear of all Liens and other encumbrances, except as would
not, individually or in the aggregate, be material to the Company and the
Company Subsidiaries, taken as a whole. Each of the Company and the Company
Subsidiaries enjoys peaceful and undisturbed possession of the properties under
all real property leases, except as would not, individually or in the
aggregate, be material to the Company and the Company Subsidiaries, taken as a
whole.
(b) Neither the Company nor any Company Subsidiary has received or
given notice of default under any real property leases and, to the Knowledge of
the Company, there is no event that, with notice or the passage of time or
both, would constitute a material default under such leases. The Company has
not received notice of any pending or threatened taking by eminent domain or
condemnation of any of the real property identified in Section 4.15(a) of the
Company Disclosure Schedule.
(c) All premises constituting a part of the real property identified
in Section 4.15(a) of the Company Disclosure Schedule are in good operating
condition and repair, and there are no material defects in the physical
condition of any land, buildings or improvements constituting part of such real
property.
25
(d) The execution and delivery of this Agreement do not, and the
consummation of the transactions contemplated by this Agreement shall not,
impair in any material respect, or give rise to a right of termination,
amendment, cancellation or acceleration of any obligation or to a loss of a
material benefit under, any material lease, license, sublease, easement,
covenant, condition, restriction, contract, instrument, permit or other
instrument or obligation relating to the real property identified in Section
4.15(a) of the Company Disclosure Schedule.
Section 4.16 Intellectual Property. The Company and the Company
Subsidiaries own or possess adequate licenses or other valid rights to use the
Material Intellectual Property Rights, which Material Intellectual Property
Rights are included in Sections 1.1(a), 1.1(b), 1.1(c), 1.1(e), 1.1(f) and
1.1(h) of the Company Disclosure Schedule. Except as set forth in Section
1.1(d) of the Company Disclosure Schedule, neither the Company nor any of the
Company Subsidiaries has granted to any other Person any license to use any of
the foregoing, other than "label or product use licenses" granted to customers
and distributors of the Company or the Company Subsidiaries in the ordinary
course of business consistent with past practice. Except as set forth in
Section 4.16 of the Company Disclosure Schedule, to the Knowledge of the
Company, there is no infringement by any Person of any Material Intellectual
Property Rights. Except as set forth in Section 4.16 of the Company Disclosure
Schedule, the Company or a Company Subsidiary holds all right, title and
interest in, has maintained in good standing, and has no Liens, oppositions,
actions for cancellation, nullity, invalidation or the like pending against
Patents Owned, Copyrights, Trademarks and Domain Names. To the Knowledge of the
Company, all Patents Licensed have been maintained in good standing, and have
no Liens, oppositions, actions for cancellation, nullity, invalidation or the
like pending against them. All Licenses In and Licenses Out are in full force
and effect, have not terminated or expired, and there are no material disputes
or actions threatened or pending regarding the same. Except as set forth in
Section 4.16 of the Company Disclosure Schedule, there are no third party
Intellectual Property Rights (other than patents and trademarks) and, to the
Knowledge of the Company, no third party patents or trademarks, that are
infringed by any Products (including Products under development if they were
currently being sold) or existing activities of the Company or a Company
Subsidiary. To the Knowledge of the Company, all employees of the Company have
entered into written agreements with the Company obligating the employee (a) to
assign to the Company the employee's rights in any invention, whether
patentable or patented, software, trade secret or technical information
conceived, generated, made or reduced to practice by the employee under his/her
employment with the Company, and (b) to maintain the confidentiality of Company
information. The sections of the Company Disclosure Schedule referenced under
the definitions for Copyrights, Domain Names, Licenses In, Licenses Out,
Patents Owned, Patents Licensed and Trademarks list (i) all patents and patent
applications, copyright registrations, trademarks, service marks and Internet
domain names owned by the Company or any of the Company Subsidiaries that are
material to the business of the Company and its Subsidiaries, taken as a whole,
(ii) all licenses, sublicenses and other agreements pursuant to which the
Company or any Company Subsidiary is authorized to use any third party patents,
copyrights, trademarks or service marks and that are material to the business
of the Company and its Subsidiaries, taken as a whole and (iii) all licenses,
sublicenses and other agreements pursuant to which the Company or any Company
Subsidiary authorizes any third party to use any patents, copyrights,
trademarks or service marks owned or licensed by the Company or any Company
26
Subsidiary and that are material to the business of the Company and its
Subsidiaries, taken as a whole.
Section 4.17 Voting Requirements. The affirmative vote of the holders of a
majority of the outstanding shares of Company Common Stock in favor of the
approval and adoption of this Agreement and the Merger (the "Stockholder
Approval") is the only vote of the holders of any class or series of the
Company's capital stock necessary to approve this Agreement and the
transactions contemplated hereby.
Section 4.18 State Takeover Statutes. The Company Board has unanimously
approved the terms of this Agreement and the consummation of the Merger and the
other transactions contemplated by this Agreement and the Stockholder
Agreement, and such approval is sufficient to render inapplicable to the
Merger, this Agreement, the Stockholder Agreement, and the other transactions
contemplated by this Agreement and the Stockholder Agreement the provisions of
Section 203 of the DGCL to the extent, if any, such Section is applicable to
the Merger, this Agreement, the Stockholder Agreement, and the other
transactions contemplated by this Agreement and the Stockholder Agreement. To
the Company's Knowledge after consultation with the Company's outside legal
counsel, no other state takeover statute or similar statute or regulation
applies to or purports to apply to the Merger, this Agreement, the Stockholder
Agreement or the transactions contemplated by this Agreement or the Stockholder
Agreement.
Section 4.19 Rights Agreement. The Rights Agreement has been amended to
(a) render the Rights Agreement inapplicable to this Agreement, the Stockholder
Agreement, the Merger and the other transactions contemplated by this Agreement
and the Stockholder Agreement, (b) ensure that (i) none of Parent, Sub, or
their respective Affiliates is or will be an Acquiring Person (as defined in
the Rights Agreement) pursuant to the Rights Agreement solely by virtue of the
execution of this Agreement or the Stockholder Agreement or the consummation of
the Merger or the other transactions contemplated by this Agreement or the
Stockholder Agreement and (ii) a Distribution Date, a Section 8(a)(ii) Event, a
Section 10 Event or a Stock Acquisition Date (as such terms are defined in the
Rights Agreement) does not occur solely by reason of the execution of this
Agreement or the Stockholder Agreement, the consummation of the Merger or the
consummation of the other transactions contemplated by this Agreement or the
Stockholder Agreement and (c) provide that the Final Expiration Date (as
defined in the Rights Agreement) shall occur immediately prior to the Effective
Time.
Section 4.20 Tangible Assets. Except as set forth in Section 4.20 of the
Company Disclosure Schedule, the Company and each Company Subsidiary owns,
leases or has the legal right to use all the tangible properties and assets
necessary for the conduct of its business and, with respect to contract rights,
is a party to all, and enjoys the right to the benefits of all, contracts or
other agreements necessary for the conduct of its business, except as would
not, individually or in the aggregate, be material to the Company and Company
Subsidiaries, taken as a whole. All of the property, plant and equipment of the
Company and each Company Subsidiary has been maintained in good operating
condition and repair, ordinary wear and tear excepted, and is sufficient to
permit the Company and each Company Subsidiary to conduct its operations in the
ordinary course of business consistent with their past practices.
27
Section 4.21 Brokers; Schedule of Fees and Expenses. Except for U.S.
Bancorp Xxxxx Xxxxxxx Inc. (the "Company Financial Advisor"), a complete and
correct copy of whose engagement agreement (which engagement agreement includes
all fee arrangements between the Company and the Company Financial Advisor) has
been provided to Parent and whose fees and expenses will be paid by the
Company, no broker, finder, investment banker, financial advisor or other
Person is entitled to any broker's, finder's, financial advisor's or other
similar fee or commission in connection with the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of the Company.
Section 4.22 Opinion of Financial Advisor. The Company Board has received
the opinion of the Company Financial Advisor dated the date hereof, to the
effect that, as of such date, the consideration to be received in the Merger by
the Company's stockholders is fair to the Company's stockholders from a
financial point of view, and a signed copy of such opinion has been, or
promptly shall be, provided to Parent.
Section 4.23 Regulatory Compliance.
(a) (i) With respect to each of the Products (including, to the
extent applicable, Products under development): (A) the Company and the Company
Subsidiaries, and to the Knowledge of the Company, the suppliers and
distributors material to the Company and the Company Subsidiaries, taken as a
whole, have obtained all applicable approvals, clearances and registrations
required by any governmental or supranational regulatory authority or private
accreditation body, including but not limited to the FDA, European Union
Competent Authorities and Notified Bodies, and public and private Institutional
Review Boards (IRBs) and Independent Ethics Committees (IECs), to permit any
manufacturing, distribution, sales, customer service, marketing or human
research and development activities of the Company and the Company Subsidiaries
to date (the "Activities to Date") with respect to each Product (collectively,
"Approvals"); (B) the Company and the Company Subsidiaries, and to the
Knowledge of the Company, the suppliers and distributors material to the
Company and the Company Subsidiaries, taken as a whole, are in compliance in
all material respects with the terms and conditions of each Approval and with
all requirements pertaining to the Activities to Date with respect to each
Product which is not required to be the subject of an Approval; and (C) the
Company and the Company Subsidiaries, and to the Knowledge of the Company, the
suppliers material to the Company and the Company Subsidiaries, taken as a
whole, are in compliance in all material respects with all applicable
requirements (as set forth in relevant statutes and regulations) regarding
registration or notification for each site (in any country) at which each
Product is manufactured, packed, held for distribution or from which and into
which it is distributed; (ii) all manufacturing operations performed by or on
behalf of the Company and the Company Subsidiaries have been and are being
conducted in all material respects in compliance with relevant current good
manufacturing practices, including, but not limited to, the quality system
regulations issued by the FDA, and to the extent applicable, counterpart
regulations in the European Union and all other countries where compliance is
required; (iii) all nonclinical laboratory studies of Products under
development sponsored by the Company and the Company Subsidiaries and intended
to be used to support regulatory clearance or approval have been and are being
conducted in all material respects in compliance with the good laboratory
practices as set forth in 21 C.F.R. Part 58 and applicable counterpart
regulations in the European Union and other countries; (iv) all clinical
studies of marketed or investigational Products
28
sponsored by the Company and the Company Subsidiaries and intended to support a
regulatory clearance or approval have been and are being conducted in all
material respects in compliance with relevant good clinical practices including
as reflected in the FDA's regulations and the International Conference on
Harmonisation (ICH) GCP consolidated Guideline (E6), as applicable; and (v) the
Company and the Company Subsidiaries are in all material respects in compliance
with all reporting requirements for all Approvals or plant registrations
described in clause (a)(i) above; except, in the case of the preceding clauses
(a)(i) through (a)(v), for any such failure to obtain or noncompliance that,
individually or in the aggregate, would not be material to the Company and the
Company Subsidiaries, taken as a whole. Other than in Japan, all Approvals are
held in the name of the Company or a Company Subsidiary. The Company's Japanese
distributor is the holder of the Japanese Approvals and is contractually
obligated to assign them to the Company upon termination of its distribution
agreement with the Company. Neither the Company nor any Company Subsidiary is
engaged in the servicing of any Product. Without limiting the generality of the
foregoing definition of "Approvals," such definition shall specifically
include, as applicable, premarket approval applications under Section 515 of
the FDCA, premarket notifications under Section 510(k) of the FDCA,
investigational device exemptions under Section 520(g) of the FDCA, product
export permits issued under Sections 801(e) and 802 of the FDCA and European
Union Conformity Markings (XX xxxxx) issued by a European Union Notified Body.
(b) To the Knowledge of the Company, there are no pending voluntary
or involuntary market withdrawals, field corrective actions (including
recalls), destruction orders, seizures, corrections or other major regulatory
enforcement actions related to any Product that would be, individually or in
the aggregate, material to the Company and the Company Subsidiaries, taken as a
whole.
(c) To the Knowledge of the Company, neither the Company, the
Company Subsidiaries nor any of their respective officers, employees or agents
has made any untrue statement of a material fact or fraudulent statement to any
governmental or supranational regulatory authority or private accreditation
body in any jurisdiction, failed to disclose a fact required to be disclosed to
such an authority in any jurisdiction, or committed any act, made any statement
or failed to make any statement that would reasonably be expected to provide a
basis for (i) the FDA to invoke its policy respecting "Fraud, Untrue Statements
of Material Facts, Bribery and Illegal Gratuities" set forth in 56 Fed. Reg.
46,191 (September 10, 1991) or (ii) any foreign Person to invoke an equivalent
policy or to effect a similar result.
(d) The Company has, prior to execution of this Agreement, made
available to Parent copies of or made available for Parent's review any and all
documents in its or any of the Company Subsidiaries' possession that the
Company believes are material to assessing the Company's or any of the Company
Subsidiaries' compliance with the FDCA or the International Standards
Organization (and their respective implementing regulations) or any other
similar regulations in any applicable jurisdiction.
Section 4.24 Insurance. Section 4.24 of the Company Disclosure Schedule
sets forth a complete and correct list of all material insurance policies owned
or held by the Company and each Company Subsidiary, true and complete copies of
which have been made available to Parent. All such policies are in full force
and effect, all premiums with respect
29
thereto covering all periods up to and including the date hereof have been paid
and no notice of cancellation, termination or reservation of rights has been
received with respect to any such policy. Neither the Company nor any Company
Subsidiary has been refused any insurance with respect to its assets or
operations, nor has coverage been materially limited, by any insurance carrier
to which it has applied for any such insurance or with which it has carried
insurance during the last three (3) years. No material claims have been
asserted during the three-year period prior to the date of this Agreement by
the Company or any Company Subsidiary under any of the insurance policies of
the Company or the Company Subsidiaries or relating to their properties, assets
or operations.
Section 4.25 Affiliate Transactions. Except as set forth in Section 4.25
of the Company Disclosure Schedule, as of the date hereof there are, and except
as permitted under Section 6.1(a)(xiii)(F) of this Agreement, as of the Closing
there will be, no loans, leases or other continuing transactions between the
Company or any Company Subsidiary and any present or former director or officer
thereof or any member of such director's or officer's family, or any Person
controlled by such officer or director or his or her family, including, without
limitation, any transaction that would be required to be disclosed pursuant to
Item 404 of SEC Regulation S-K. Except as set forth in Section 4.25 of the
Company Disclosure Schedule, no director or officer of the Company or any
Company Subsidiary nor, to the Knowledge of the Company, any of their
respective spouses or family members, owns directly or indirectly on an
individual or joint basis any material interest in, or serves as an officer or
director or in another similar capacity of, any entity that is a party to a
Significant Agreement (other than the Company and the Company Subsidiaries).
ARTICLE V
Representations and Warranties of Parent and Sub
Parent and Sub hereby represent and warrant to the Company as follows:
Section 5.1 Organization, Standing and Corporate Power. Each of Parent and
Sub is a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction in which it is incorporated and has all
requisite corporate power and authority to own, lease, possess and operate its
properties and assets and to carry on its business as now being conducted.
Section 5.2 Authority; Noncontravention.
(a) Parent and Sub each have all necessary corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated by this Agreement. The execution, delivery and
performance of this Agreement by Parent and Sub and the consummation by Parent
and Sub of the transactions contemplated by this Agreement have been duly
authorized by all necessary corporate action on the part of each of Parent and
Sub. This Agreement has been duly executed and delivered by Parent and Sub and
constitutes (assuming due authorization, execution and delivery by the Company)
a valid and binding obligation of each of Parent and Sub, enforceable against
each of Parent and Sub in accordance with its terms.
30
(b) The execution and delivery of this Agreement do not, and the
consummation of the transactions contemplated by this Agreement and compliance
with the provisions of this Agreement shall not, (i) conflict with, or result
in any violation of, the certificate of incorporation or by-laws of either of
Parent or Sub, (ii) conflict with, or result in any violation of, any
Applicable Law, or (iii) result in any breach of, or constitute a default (with
or without notice or lapse of time, or both) under any loan or credit
agreement, note, bond, mortgage, indenture, lease, contract, instrument,
permit, concession, franchise license or other instrument or obligation other
than, in the case of clauses (ii) and (iii), any such conflicts, violations,
breaches or defaults that, individually or in the aggregate, would not (x)
impair in any material respect the ability of either Parent or Sub to perform
its obligations under this Agreement, or (y) prevent or materially delay the
consummation of any of the transactions contemplated by this Agreement.
(c) No consent, approval, Order or authorization of, or
registration, declaration or filing with, or notification to, any Governmental
Entity is required by or with respect to Parent or Sub in connection with the
execution and delivery of this Agreement by the Parent and Sub or the
consummation by Parent or Sub of the transactions contemplated by this
Agreement, except (i) the filing of a pre-merger notification and report form
by Parent and Sub under the HSR Act, and compliance with the pre-merger
notification requirements in Austria, Germany, Ireland, Italy and the Czech
Republic, (ii) the filing with the SEC of such reports under the Exchange Act
as may be required in connection with this Agreement, the Stockholder Agreement
and the transactions contemplated hereby and thereby, (iii) the filing of the
Certificate of Merger with the Secretary of State of the State of Delaware, and
(iv) such other consents, approvals, Orders, authorizations, registrations,
declarations, filings and notifications, the failure of which to be obtained or
made would not, individually or in the aggregate, (x) impair in any material
respect the ability of either Parent or Sub to perform its obligations under
this Agreement, or (y) prevent or materially delay the consummation of any of
the transactions contemplated by this Agreement.
Section 5.3 Information Supplied. None of the information supplied or to
be supplied by or on behalf of Parent or Sub in writing expressly for inclusion
in the Proxy Statement will, at the date mailed to the Company's stockholders
and at the time of any meeting of the Company's stockholders to be held in
connection with the Merger, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements made therein, in light of the circumstances under
which they are made, not misleading.
Section 5.4 Brokers. No broker, finder, investment banker, financial
advisor or other Person, other than Xxxxxx Xxxxxxx & Co. Incorporated (whose
fees and expenses will be paid by Parent), is entitled to any broker's,
finder's, financial advisor's or other similar fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of Parent or Sub.
Section 5.5 Interim Operations of Sub. Sub was formed solely for the
purpose of engaging in the transactions contemplated hereby, has engaged in no
other business activities and has conducted its operations only as contemplated
hereby.
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Section 5.6 Financing. Parent will make available to Sub prior to the
Closing sufficient cash, available lines of credit or other sources of
immediately available funds to enable it to consummate the transactions
contemplated by this Agreement and to pay the related fees and expenses of
Parent and Sub.
ARTICLE VI
Covenants Relating to Conduct of Business
Section 6.1 Conduct of Business.
(a) Conduct of Business by the Company. During the period from the
date of this Agreement to the Effective Time, the Company shall, and shall
cause each Company Subsidiary to, in all material respects, conduct its
businesses in the ordinary course consistent with past practice and use all
commercially reasonable efforts to preserve intact its current business
organization, keep available the services of its current officers and employees
and maintain its existing relationships with customers, suppliers, licensors,
licensees, distributors, regulators, creditors, business partners and others
having business dealings with it. In addition, and without limiting the
generality of the foregoing, except as otherwise permitted by this Agreement,
from the date of this Agreement to the Effective Time, the Company shall not,
and shall cause each Company Subsidiary not to, without Parent's prior written
consent:
(i) (A) declare, set aside or pay any dividends on, or make any other
distributions (whether in cash, stock or property) in respect of, any of
its capital stock, other than dividends and distributions by a direct or
indirect wholly-owned Subsidiary to its parent, (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, (C) purchase, redeem or otherwise acquire any
shares of capital stock of the Company or any Company Subsidiary or any
other securities thereof or any rights, warrants or options to acquire any
such shares or other securities, or (D) adopt a plan of complete or
partial liquidation (or resolutions providing for or authorizing such
liquidation), dissolution, merger, consolidation, restructuring,
recapitalization or reorganization of the Company or any of the Company
Subsidiaries (other than the Merger);
(ii) issue, deliver, sell, grant or encumber or authorize the
issuance, delivery, sale, grant or encumbrance of, (A) any shares of its
capital stock, (B) any Voting Debt or other voting securities, (C) any
securities convertible into or exchangeable for, or any options, warrants
or rights to acquire, any such shares, voting securities or convertible or
exchangeable securities or (D) any "phantom" stock, "phantom" stock
rights, stock appreciation rights or stock-based performance units; in the
case of each of clauses (A) through (D), other than (x) upon the exercise
of Options in accordance with their terms, (y) the issuance of shares of
Company Common Stock (and associated Rights) pursuant to the ESPP in
accordance with its present terms or (z) the issuance of Options with an
exercise price of 100% of the then-current market price to promoted or
32
newly hired employees pursuant to Option Plans in the ordinary course of
business consistent with past practice (including with respect to the
number of Options for the grade of employee);
(iii) amend its certificate of incorporation, by-laws or other
comparable charter or organizational documents;
(iv) acquire or agree to acquire (A) by merging or consolidating
with, or by purchasing a substantial portion of the assets of, or by any
other manner, any business or any Person, or division thereof or (B) any
assets, except purchases of inventory, materials, supplies or equipment in
the ordinary course of business consistent with past practice and except
for capital expenditures permitted under Section 6.1(a)(vii);
(v) sell, lease, sublease, license, mortgage, sell and leaseback or
otherwise encumber or permit to be subject to any Lien or otherwise
dispose of any of its properties or assets, except sales of inventory,
Products, surplus equipment or obsolete equipment in the ordinary course
of business consistent with past practice;
(vi) (A) incur any long-term indebtedness for borrowed money, incur
any short-term indebtedness for borrowed money or guarantee any such
long-term or short-term indebtedness of another Person, issue or sell any
debt securities or warrants or other rights to acquire any debt securities
of the Company or any Company Subsidiaries, guarantee any debt securities
of another Person, enter into any "keep well" or other agreement to
maintain any financial statement condition of another Person or enter into
any arrangement having the economic effect of any of the foregoing or (B)
make any loans, advances or capital contributions to, or investments in,
any other Person; in the case of each of clauses (A) and (B), other than
(x) in or to the Company or the Company Subsidiaries, (y) borrowings from
the Company's credit facilities existing as of the date hereof or (z)
extensions of credit to customers, distributors or suppliers of the
Company or the Company Subsidiaries; in the case of each of clauses (x),
(y) and (z), in the ordinary course of business consistent with past
practice (including with respect to any amounts borrowed);
(vii) make or agree to make any new capital expenditure or
expenditures in excess of the amounts set forth in Section 6.1(a)(vii) of
the Company Disclosure Schedule;
(viii) (A) discharge, settle, assign or satisfy any claims, whether
or not pending before a Governmental Entity, in excess of $200,000
individually or $1,000,000 in the aggregate, or (B) cancel any material
indebtedness;
(ix) except in the ordinary course of business consistent with past
practice, modify, amend or terminate any Significant Agreement or
33
agreement relating to Material Intellectual Property Rights to which the
Company or any Company Subsidiary is a party or waive, release or assign
any material rights or claims thereunder;
(x) (A) enter into or extend any Significant Agreement or (B) enter
into or extend any contracts, agreements, arrangements or understandings
relating to the distribution, right to sell, license or co-promotion by or
with third parties of the Products (including Products under development),
other than contracts, agreements, arrangements or understandings that (x)
would not be binding on the Parent, Surviving Corporation or any of their
Affiliates following the Effective Time or (y) are terminable by the
Company and any Company Subsidiary without payment or penalty upon thirty
(30) days' notice;
(xi) except in the ordinary course of business consistent with past
practice, transfer, assign, terminate, cancel, abandon or modify any
Approvals or fail to maintain any such Approvals as currently in effect;
(xii) fail to use all commercially reasonable efforts to maintain all
insurance policies as currently in effect or to prevent the lapse of any
such policies;
(xiii) except as required to comply with Applicable Law, (A) grant to
any officer, director or employee of the Company or any Company Subsidiary
any increase in compensation, fringe benefits or other terms or conditions
of employment, other than in connection with periodic increases to
employee compensation and promotions conducted in the ordinary course of
business and consistent with past practice, (B) grant to any present or
former employee, officer, director, agent or consultant of the Company or
any Company Subsidiary any increase in severance or termination pay, (C)
enter into or amend any employment, consulting, indemnification,
change-in-control, severance or existing termination agreement with any
present or former employee, officer, director, agent or consultant, (D)
establish, adopt, enter into or amend any Plan or other benefit or
compensation plan, program, arrangement or agreement, except as may be
necessary to maintain appropriate qualification under the Code or other
Applicable Law, (E) except as permitted or required under Section 7.7,
take any action to accelerate any rights or benefits, or make any material
determinations not in the ordinary and usual course of business, under any
Plan, (F) loan or advance money or other property in violation of the
Xxxxxxxx-Xxxxx Act of 2002 or in excess of $10,000 to any present or
former employees, officers or directors of the Company or any Company
Subsidiary or make any change in any existing borrowing or lending
arrangements on or on behalf of any such persons, (G) grant any new, or
amend any existing, Option or enter into any agreement under which any
Option would be required to be issued, including, but not limited to, a
grant, or agreement to grant, any Option in connection with the settlement
or payment of any award granted pursuant to an incentive or bonus plan or
arrangement maintained by the Company or any Company Subsidiary, except
(x) as permitted or required under Section 7.7 or (y) in the case of the
issuance of Options with an
34
exercise price of 100% of the then-current market price to promoted or
newly hired employees pursuant to Option Plans in the ordinary course of
business consistent with past practice (including with respect to the
number of Options for the grade of employee) or (H) except as set forth in
Section 7.6 or as set forth in writing by Parent for the express purpose
of communications with employees of the Company and the Company
Subsidiaries, make any representation or commitment to, or enter into any
formal or informal understanding with, any employee of the Company or any
Company Subsidiary with respect to compensation, benefits, or terms of
employment to be provided by Parent, the Surviving Corporation or any of
the Surviving Corporation's Subsidiaries at or subsequent to the Effective
Time;
(xiv) (A) terminate any employee who is a party to a Change of
Control Severance Agreement with the Company or any Company Subsidiary,
(B) terminate any related group of employees (in one or a series of
related terminations), (C) hire any employee at the director level or
above or (D) hire more than eight (8) sales force employees (other than an
employee hired to replace an active sales force employee whose employment
is terminated voluntarily or in accordance with the terms of this
Agreement);
(xv) except as contemplated by Section 4.19, waive, amend or
otherwise alter the Rights Agreement or redeem the Rights or take any
action to render Section 203 of the DGCL inapplicable to any transaction
other than the transactions contemplated by this Agreement and the
Stockholder Agreement;
(xvi) transfer or license to any Person or allow to lapse or go
abandoned any Material Intellectual Property Rights of the Company;
(xvii) enter into any license agreement with any Person to obtain any
material Intellectual Property Rights;
(xviii) commence, discharge or settle any Proceeding relating to
Material Intellectual Property Rights;
(xix) accept any returns of Products outside the ordinary course of
business consistent with past practice;
(xx) except as required by GAAP, make any change in accounting
methods, principles or practices;
(xxi) waive any provision of any confidentiality agreement not
entered into in the ordinary course of business consistent with past
practice (or otherwise entered into with a third party in contemplation of
an Alternative Acquisition) or standstill agreement to which the Company
or any Company Subsidiary is a party; or
(xxii) commit or agree to take any of the foregoing actions.
35
(b) Certain Tax Matters. From the date hereof until the Effective
Time, the Company and the Company Subsidiaries will (i) timely file or cause to
be timely filed all material Tax Returns, which shall be true, correct and
complete in all material respects ("Post-Signing Returns"), required to be
filed by it (after taking into account any applicable extensions); (ii) timely
pay all material Taxes due and payable with respect to such Post-Signing
Returns that are so filed; (iii) accrue a liability in its books and records
and financial statements in accordance with past practice and GAAP for Taxes
payable by the Company for which no Post-Signing Return is due prior to the
Effective Time; (iv) promptly notify Parent of any Proceeding pending against
or with respect to the Company or a Company Subsidiary in respect of any Tax
where there is a reasonable possibility of a determination or decision that
would have a material adverse effect on the Company's Tax liabilities or Tax
attributes and will not settle or compromise any such Proceeding without
Parent's prior written consent; (v) not make any material Tax election, consent
to any claim or assessment relating to any material Taxes or any waiver of the
statute of limitations for such claim or assessment, settle or compromise any
Tax liability or refund, change or adopt a Tax accounting method or file any
amended Tax Return without Parent's prior written consent; and (vi) not engage
in any "tax shelter" or "listed transaction" as defined in Section 6111 of the
Code or the regulations thereunder.
(c) Advice of Changes; Filings. The Company and Parent shall
promptly advise the other party in writing of (i) any representation or
warranty made by it (and, in the case of Parent, made by Sub) contained in this
Agreement that becomes untrue or inaccurate in any respect or (ii) the failure
by it (and, in the case of Parent, by Sub) to comply with or satisfy in any
material respect any covenant, condition or agreement to be complied with or
satisfied by it under this Agreement. Without limiting the generality of the
foregoing, the Company shall promptly advise Parent orally and in writing of
(i) any changes or events that, to the Knowledge of the Company, individually
or in the aggregate, would have, or be reasonably likely to have, a Company
Material Adverse Effect or (ii) the cancellation or termination of any material
insurance policy; provided, however, that no such notification pursuant to this
sentence or the preceding sentence shall affect the representations,
warranties, covenants or agreements of the parties (or remedies with respect
thereto) or the conditions to the obligations of the parties under this
Agreement. The Company and Parent shall use all commercially reasonable efforts
to promptly provide the other with copies of all filings made by such party
with any Governmental Entity in connection with this Agreement and the
transactions contemplated hereby, other than the portions of such filings that
include confidential information not directly related to the transactions
contemplated by this Agreement.
Section 6.2 No Solicitation.
(a) From the date of this Agreement until the earlier of the
Effective Time or the termination of this Agreement, the Company and the
Company Subsidiaries shall not (and the Company will not permit any of its or
any of the Company Subsidiaries' officers, directors or employees or any
investment banker, financial advisor, attorney, accountant or other
representative retained by it or any of the Company Subsidiaries (collectively,
"Company Representatives") to) directly or indirectly (i) solicit, initiate,
facilitate, encourage, engage in discussions or negotiate with any Person or
take any other action intended or designed to facilitate any inquiry or effort
of any Person relating to any possible Alternative Acquisition, (ii) provide
information with respect to the Company or any Company Subsidiary to any Person
36
relating to any possible Alternative Acquisition or (iii) enter into any
agreement with respect to any proposal for any possible Alternative
Acquisition. Notwithstanding the foregoing, at any time prior to obtaining
Stockholder Approval, the Company Board may, to the extent necessary to inform
itself with respect to an unsolicited written bona fide proposal for an
Alternative Acquisition (an "Alternative Acquisition Proposal") that did not
result from a breach of this Section 6.2 and that the Company Board determines
in good faith (after consultation with outside legal counsel) is a Superior
Company Proposal, subject to providing prior written notice of its decision to
take such action to Parent, (x) furnish information with respect to the Company
and the Company Subsidiaries to the Person making such Alternative Acquisition
Proposal and its representatives pursuant to a confidentiality agreement with
terms no more favorable to the Person making the Alternative Acquisition
Proposal than those applicable to Parent under the Confidentiality Agreement
and (y) participate in discussions with such Person and its representatives
regarding such Alternative Acquisition Proposal. The Company shall, and shall
cause the Company Subsidiaries and Company Representatives to, cease and cause
to be terminated immediately all existing discussions or negotiations conducted
heretofore with respect to any proposal that constitutes, or may reasonably be
expected to lead to, an Alternative Acquisition Proposal and obtain the return
of all information provided to any third party pursuant to a confidentiality
agreement (subject to any rights existing as of the date hereof of such third
party to destroy such information in lieu of returning such information to the
Company and to retain a copy solely for archival purposes, in either case
pursuant to any such confidentiality agreement) or otherwise in connection with
such discussions or negotiations. For purposes of this Section 6.2, the term
"Person" shall include any group as defined in the Exchange Act.
(b) Except as expressly permitted by this Section 6.2, neither the
Company Board nor any committee thereof shall (i) withdraw or modify, or
propose to withdraw or modify, in a manner adverse to Parent or Sub, the
approval or recommendation by the Company Board or any such committee of this
Agreement or the Merger, (ii) approve or cause or permit the Company or any
Company Subsidiary to enter into any letter of intent, agreement in principle,
definitive agreement or similar agreement constituting or relating to, or which
is intended to or is reasonably likely to lead to, an Alternative Acquisition
(an "Acquisition Agreement"), (iii) approve or recommend, or propose to approve
or recommend, any Acquisition Agreement or Alternative Acquisition Proposal or
(iv) agree or resolve to take actions set forth in clauses (i), (ii) or (iii)
of this sentence. Notwithstanding the foregoing, if, at any time prior to
obtaining Stockholder Approval, the Company Board receives a Superior Company
Proposal that did not result from a breach of this Section 6.2, the Company
Board may, during such period, in response to such Superior Company Proposal,
withdraw or modify its recommendation of this Agreement and the Merger at any
time after the fourth Business Day following Parent's receipt of written notice
(a "Notice of Superior Company Proposal") advising Parent that the Company
Board has received a Superior Company Proposal and intends to withdraw or
modify its recommendation, identifying the Person making such Superior Company
Proposal and specifying the financial and other material terms and conditions
of such Superior Company Proposal (it being understood that any amendment to
the price or material terms of a Superior Company Proposal shall require an
additional Notice of Superior Company Proposal and an additional two (2)
Business Day period thereafter to the extent permitted under Applicable Law).
In addition, at any time prior to obtaining Stockholder Approval, the Company
Board, to the extent required by the fiduciary obligations of the Company Board
under Delaware Law, as determined in good faith by the Company Board (after
consultation with outside legal counsel),
37
may cause the Company to terminate this Agreement in accordance with Section
9.1(e) (and concurrently with or after such termination, cause the Company to
enter into an Acquisition Agreement with respect to a Superior Company
Proposal); provided, however, that the Company shall not terminate this
Agreement pursuant to Section 9.1(e), and any purported termination pursuant to
Section 9.1(e) shall be void and of no force or effect, unless the Company
shall have complied with the provisions of this Section 6.2 and the Company
shall have paid to Parent the Termination Fee prior to or concurrently with
such termination; and provided further, however, that the Company shall not be
entitled to exercise its right to terminate this Agreement pursuant to Section
9.1(e), (A) until after the fourth Business Day following Parent's receipt of a
Notice of Superior Company Proposal (it being understood that any amendment to
the price or any other material term of a Superior Company Proposal shall
require a new Notice of Superior Company Proposal and an additional two (2)
Business Day period) and (B) unless within the four (4) Business Day period
following the delivery of the Notice of Superior Company Proposal (or the two
(2) Business Day period following the delivery of a new Notice of Superior
Company Proposal due to an amendment of a Superior Company Proposal), Parent
has not proposed adjustments in the terms and conditions of this Agreement as
favorable from a financial point of view to the Company's stockholders as such
Superior Company Proposal.
(c) In addition to the obligations of the Company set forth in
paragraphs (a) and (b) of this Section 6.2, the Company promptly, and in any
event within twenty-four (24) hours, shall (i) advise Parent in writing of
receipt by it (or any Company Representatives) of any Alternative Acquisition
Proposal or any inquiry indicating that any Person is considering making or
wishes to make an Alternative Acquisition Proposal, identifying such Person and
the financial and other material terms and conditions of any Alternative
Acquisition Proposal or potential Alternative Acquisition Proposal and (ii)
notify Parent after receipt of any request for nonpublic information relating
to the Company or any of the Company Subsidiaries or for access to the
Company's or any of the Company Subsidiaries' properties, books or records by
any Person that may be considering making, or has made, an Alternative
Acquisition Proposal, identifying such Person and the information requested by
such Person, and provide Parent with any nonpublic information that is given to
such Person pursuant to this Section 6.2(c). The Company shall (i) keep Parent
reasonably informed as to the status and the financial and other material terms
and conditions of any such Alternative Acquisition Proposal, indication or
request and (ii) provide to Parent as promptly as practicable any applicable
written agreement that describes any of the terms or conditions of any
Alternative Acquisition Proposal.
(d) Nothing contained within this Section 6.2 shall prevent the
Company Board from complying with Rule 14e-2(a) under the Exchange Act with
regard to any Alternative Acquisition Proposal; provided, however, that except
as set forth in Section 6.2(b), in no event shall the Company Board or any
committee thereof withdraw or modify, or propose to withdraw or modify, its
position with respect to this Agreement or the Merger or adopt, approve or
recommend, or propose to adopt, approve or recommend, any Alternative
Acquisition Proposal.
(e) The parties agree that if any Company Representative takes any
action which may not be taken by the Company or any Company Subsidiary under
this Section 6.2, such action shall be deemed a material breach of this
Agreement by the Company.
38
ARTICLE VII
Additional Agreements
Section 7.1 Preparation of the Proxy Statement; Stockholders Meeting.
(a) As promptly as practicable following the date of this Agreement,
but in no event later than ten (10) Business Days thereafter, the Company shall
prepare and file with the SEC the preliminary Proxy Statement. Each of the
parties shall furnish all information concerning itself and its Affiliates that
is required to be included in the Proxy Statement or that is customarily
included in proxy statements prepared in connection with transactions of the
type contemplated by this Agreement. The Company shall use all commercially
reasonable efforts to respond as promptly as practicable to any comments of the
SEC with respect to the Proxy Statement and to cause the definitive Proxy
Statement to be mailed to the Company's stockholders as promptly as reasonably
practicable after the date of this Agreement. The Company shall promptly notify
Parent upon the receipt of any comments from the SEC or its staff or any
request from the SEC or its staff for amendments or supplements to the Proxy
Statement or for additional information and shall provide Parent with copies of
all correspondence between the Company and its representatives, on the one
hand, and the SEC and its staff, on the other hand. If at any time prior to the
Effective Time any information relating to the Company or Parent, or any of
their respective directors, officers or Affiliates, should be discovered by the
Company or Parent which should be set forth in an amendment or supplement to
the Proxy Statement, so that the Proxy Statement would not include any
misstatement of a material fact or omit to state any material fact necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading, the party which discovers such information shall
promptly notify the other parties, and an appropriate amendment or supplement
describing such information shall be promptly filed with the SEC and, to the
extent required by Applicable Law, disseminated to the stockholders of the
Company. Notwithstanding anything to the contrary stated above, 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, the Company shall
(i) provide Parent an opportunity to review and comment on such document or
response, (ii) include in such document or response all comments reasonably
proposed by Parent and (iii) not file or mail such document or respond to the
SEC prior to receiving Parent's approval, which approval shall not be
unreasonably withheld or delayed.
(b) The Company shall, as soon as reasonably practicable following
the date of this Agreement, establish a record date (which will be as soon as
reasonably practicable following the date of this Agreement) for, duly call,
give notice of, convene and hold a meeting of its stockholders (the
"Stockholders Meeting") for the purpose of obtaining the Stockholder Approval.
The Company shall cause the Stockholders Meeting to be held as promptly as
reasonably practicable after the date of this Agreement. The Company shall,
through the Company Board, recommend to its stockholders that they approve and
adopt this Agreement and the Merger and include such recommendation in the
Proxy Statement, except to the extent that the Company Board shall have
withdrawn its recommendation of this Agreement or the Merger as permitted by
Section 6.2. Unless the Company Board has withdrawn its recommendation in
compliance with this Agreement, the Company shall use its reasonable best
efforts to solicit from
39
its stockholders proxies in favor of the approval and adoption of this
Agreement and the Merger and to secure the Stockholder Approval.
Section 7.2 Access to Information; Confidentiality. The Company shall, and
shall cause each of the Company's Subsidiaries to, afford to Parent, and to
Parent's officers, employees, accountants, legal counsel, financial advisors
and other representatives, full and complete access upon reasonable notice
during normal business hours during the period prior to the Effective Time or
the termination of this Agreement to all their respective properties, books,
contracts, commitments, personnel and records and, during such period, the
Company shall furnish promptly to Parent (i) a copy of each report, schedule,
registration statement and other document filed by it during such period
pursuant to the requirements of federal or state securities laws and (ii) all
other information concerning its business, properties and personnel as Parent
may reasonably request. Except as required by Applicable Law, Parent shall
hold, and shall cause its officers, employees, accountants, legal counsel,
financial advisors and other representatives and Affiliates to hold, any and
all information received from the Company, directly or indirectly, in
confidence, in accordance with the Confidentiality Agreement. No investigation
pursuant to this Section 7.2 shall affect any representation or warranty in
this Agreement of any party hereto or any condition to the obligations of the
parties hereto.
Section 7.3 Reasonable Efforts; Notification.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, each of the parties agrees to use all commercially reasonable
efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, and to assist and cooperate with the other parties in doing, all things
necessary, proper or advisable to consummate and make effective, in the most
expeditious manner practicable, the Merger and the other transactions
contemplated by this Agreement and the Stockholder Agreement, including, but
not limited to, (i) the obtaining of all necessary actions or nonactions,
waivers, consents and approvals from Governmental Entities and the making of
all necessary registrations and filings (including filings with Governmental
Entities pursuant to the HSR Act and any pre-merger notification requirements
in Austria, Germany, Ireland, Italy and the Czech Republic) and the taking of
all reasonable steps as may be necessary to obtain any necessary approval or
waiver from, or to avoid an action or Proceeding by, any Governmental Entity,
(ii) the obtaining of all necessary consents, approvals or waivers from third
parties, (iii) the defending of any lawsuits or other legal proceedings,
whether judicial or administrative, challenging this Agreement, the Stockholder
Agreement or the consummation of the transactions contemplated hereby and
thereby, including seeking to have any stay or temporary restraining order
entered by any court or other Governmental Entity vacated or reversed and (iv)
the execution and delivery of any additional instruments necessary to
consummate the transactions contemplated by, and to fully carry out the
purposes of, this Agreement. The Company and the Company Board shall, if any
state takeover statute or similar statute or regulation is or becomes
applicable to this Agreement, the Stockholder Agreement, the Merger or any
other transactions contemplated by this Agreement or the Stockholder Agreement,
use all their commercially reasonable efforts to ensure that the Merger and the
other transactions contemplated by this Agreement or the Stockholder Agreement
may be consummated as promptly as practicable on the terms contemplated by this
Agreement or the Stockholder Agreement, as applicable, and otherwise to
minimize the effect of such statute or regulation on
40
the Merger, this Agreement, the Stockholder Agreement and the other
transactions contemplated hereby and thereby.
(b) The Company and Parent shall make appropriate filings under each
of the HSR Act and the pre-merger notification requirements in Austria,
Germany, Ireland, Italy and the Czech Republic with respect to the transactions
contemplated hereby within ten (10) Business Days of the date hereof and
respond as promptly as practicable to any inquiries received from the Federal
Trade Commission and the Antitrust Division of the Department of Justice for
additional information or documentation and respond as promptly as practicable
to all inquiries and requests received from any other Governmental Entity in
connection with antitrust matters. Concurrently with the filing of
notifications under the HSR Act or as soon thereafter as practicable, the
Company and Parent shall each request early termination of the HSR Act waiting
period.
(c) In furtherance of the agreements of the parties contained in
this Section 7.3 and not in limitation thereof, if any objections are asserted
with respect to the Merger under the HSR Act, or if any suit is instituted (or
threatened to be instituted) by the Federal Trade Commission, the Antitrust
Division of the Department of Justice or any other Governmental Entity or any
third party challenging any of the transactions contemplated by this Agreement,
or which would otherwise prohibit or materially impair or materially delay the
consummation of the Merger, each of Parent and the Company shall use all
commercially reasonable efforts to resolve any such objections or suits so as
to permit consummation of the Merger; provided, however, that notwithstanding
anything to the contrary in this Agreement, (i) the Company shall not, without
Parent's prior written consent, commit to any divestitures, licenses, hold
separate arrangements or similar matters, including covenants affecting
business operating practices (or allow any of the Company Subsidiaries to
commit to any divestitures, licenses, hold separate arrangements or similar
matters), and the Company shall commit to, and shall use all commercially
reasonable efforts to effect (and shall cause each of the Company Subsidiaries
to commit to and use all their commercially reasonable efforts to effect), any
such divestitures, licenses, hold separate arrangements or similar matters as
Parent shall request, but solely if such divestitures, licenses, hold separate
arrangements or similar matters are contingent on consummation of the Merger
and (ii) neither Parent nor any of its Subsidiaries shall be required to agree
(with respect to (A) Parent or its Subsidiaries or (B) the Company or the
Company Subsidiaries) to any divestitures, licenses, hold separate arrangements
or similar matters, including covenants affecting business operating practices.
(d) The Company and Parent each shall use all commercially
reasonable efforts to keep the other apprised of the status of matters relating
to completion of the transactions contemplated hereby, including promptly
furnishing the other with copies of notices or other communications received by
Parent, Sub or the Company, as the case may be, or any of their respective
Subsidiaries, from any third party and/or any Governmental Entity with respect
to the transactions contemplated by this Agreement.
Section 7.4 Public Announcements. Parent and Sub, on the one hand, and the
Company, on the other hand, shall consult with each other and shall mutually
agree upon any press release or other public statements with respect to the
transactions contemplated by this Agreement, except as may be required by
Applicable Law, court process or by obligations
41
pursuant to any listing agreement with any national securities exchange or
national securities quotation system, in which case the party proposing to
issue such press release shall use all reasonable efforts to give as much
advance notice to the other party as possible and to consult in good faith with
the other party before issuing such press release or making any such public
announcement. The parties agree that the initial press release to be issued
with respect to the transactions contemplated by this Agreement shall be in the
form heretofore agreed to by the parties.
Section 7.5 Indemnification and Insurance.
(a) Parent and Sub agree that all rights to indemnification for acts
or omissions occurring prior to the Effective Time now existing in favor of the
directors or officers of the Company (each an "Indemnified Party") as provided
in its certificate of incorporation or bylaws shall survive the Merger and
shall continue in full force and effect in accordance with their terms for a
period of six (6) years following the Effective Time, and accordingly, during
such period, the Surviving Corporation shall indemnify the Indemnified Parties
to the same extent as such Indemnified Parties currently are entitled to
indemnification.
(b) Parent shall, or shall cause the Surviving Corporation to,
maintain the Company's existing D&O Insurance for a period of not less than six
(6) years after the Effective Time; provided, however, that Parent or the
Surviving Corporation may substitute therefor policies of substantially similar
coverage and amounts; provided further, that if the existing D&O Insurance
expires or is cancelled during such period, Parent or the Surviving Corporation
shall use all commercially reasonable efforts to obtain substantially similar
D&O Insurance; and provided further, that neither Parent nor the Surviving
Corporation shall be required to expend, in order to maintain or procure an
annual D&O Insurance policy, an amount for annual premiums in excess of two
hundred fifty percent (250%) of the last annual premium paid prior to the date
hereof, but in such case shall purchase as much coverage as possible for such
amount.
(c) The provisions of this Section 7.5 are intended to be for the
benefit of, and shall be enforceable by, each Indemnified Party and his or her
heirs and representatives.
Section 7.6 Benefits and Employment.
(a) As of the Effective Time, Parent agrees to assume the Change in
Control Severance Agreements listed in Section 7.6 of the Company Disclosure
Schedule and to perform the Company's obligations thereunder in the same manner
and to the same extent as the Company would be required thereunder to perform
such obligations in the absence of such assumption.
(b) As soon as commercially practicable after the Effective Time,
the Continuing Employees shall receive compensation and benefits substantially
comparable in the aggregate to those of similarly situated employees of Parent
based on Parent's evaluation of the nature and scope of the employee's duties;
principal location where those duties are performed; grade level; and
performance. Benefits provided to Continuing Employees following the Effective
Time may be provided through continuation of the Plans or through employee
benefit
42
plans of the Surviving Corporation (or of Parent or the Surviving Corporation's
Subsidiaries, as the case may be), including, but not limited to, retiree
health plans, maintained, established or contributed to by Parent, the
Surviving Corporation or any of the Surviving Corporation's Subsidiaries at or
subsequent to the Effective Time (collectively, the "Surviving Corporation
Plans"). The Continuing Employees shall receive full credit for periods of
service with the Company or any Company Subsidiary prior to the Effective Time
for purposes of determining eligibility and vesting under the Surviving
Corporation Plans; provided, that credit will not be given for purposes of
benefit accruals (other than vacation policies), and provided further, that as
to any retiree health plan, Continuing Employees will not receive credit for
purposes of eligibility, vesting and benefit accrual with respect to service
for Parent, the Surviving Corporation or the Surviving Corporation's
Subsidiaries before the Effective Time. Any amounts previously expended by
Continuing Employees for purposes of satisfying deductibles under any Plan for
the applicable current plan year shall be credited for purposes of satisfying
any corresponding deductibles under the Surviving Corporation Plans. No
pre-existing condition limitations not applicable under the Plans shall be
imposed on Continuing Employees upon admittance into any Surviving Corporation
Plan. Nothing contained in this Section 7.6 shall require Parent, the Surviving
Corporation, or any of their Affiliates to continue to employ or to continue
any level of compensation and benefits of any Company Employee for any period
following the Effective Time or create any third party rights.
(c) Except as set forth in Section 7.6(a) and Section 7.6(b), none of
Parent, the Surviving Corporation or any of the Surviving Corporation's
Subsidiaries shall have any obligation to continue any Plan as of or subsequent
to the Effective Time; and each of Parent and the Surviving Corporation shall
have the right to amend, modify, or terminate any Plan at or subsequent to the
Effective Time.
Section 7.7 Stock Options/ESPP.
(a) Prior to the Effective Time, the Company shall take all action,
including obtaining consents from holders of Options (as defined below),
necessary to cause each unexpired and unexercised stock option under the Option
Plans or otherwise granted by the Company outside the Option Plans (each an
"Option"), whether vested or unvested, to be canceled immediately prior to the
Effective Time. In consideration for such cancellation, the holder of each such
Option shall receive, as soon as reasonably practicable at or after the
Effective Time, a cash payment from the Parent or the Surviving Corporation
equal to the product of (i) the total number of shares that were subject to
such Option immediately prior to the Effective Time, whether such Option was
vested or unvested, and (ii) the excess (if any) of (A) the Merger
Consideration over (B) the exercise price per share subject to such Option,
such cash payment to be reduced by any required withholding of Taxes.
(b) The Company shall take all such steps as may be required to
cause any dispositions of Company Common Stock (including derivative securities
with respect to the Company Common Stock) resulting from the transactions
contemplated by this Agreement by each officer or director of the Company who
is subject to the reporting requirements of Section 16(a) of the Exchange Act
with respect to the Company to be exempt under Rule 16b-3 promulgated under the
Exchange Act, such steps to be taken in accordance with the No-Action
43
Letter, dated January 12, 1999, issued by the SEC to Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP.
(c) As of or prior to the Effective Time, the ESPP shall be
terminated. The rights of participants in the ESPP with respect to any offering
period then underway under the ESPP shall be determined in accordance with
Section 19(c) of the ESPP by the Company Board setting a new exercise date
under the ESPP to occur immediately following the final payroll date prior to
the Effective Time, on which date all purchase periods and offering periods
shall terminate. Immediately following the date of this Agreement, the Company
shall cause the administrator of the ESPP to prohibit any participant in the
ESPP from increasing his or her payroll deduction rate prior to the Effective
Time. The Company shall not commence any new purchase periods or offering
periods pursuant to the ESPP following the date of this Agreement. Prior to the
Effective Time, the Company shall take all actions that are necessary to give
effect to the transactions contemplated by this Section 7.7(c).
(d) By adopting or approving this Agreement, the Company Board shall
be deemed to have approved and authorized, and the stockholders of the Company
shall be deemed to have approved and ratified, each and every amendment to (and
such other actions in respect of) the Option Plans and the ESPP (and any other
plan) and the agreements evidencing awards under the Option Plans and the ESPP
(and any other plan) as the officers of the Company may deem necessary or
appropriate to give effect to the provisions of this Section 7.7.
(e) The Company shall deliver to Parent no later than three (3) days
prior to the new exercise date under Section 7.7(c) a list of amounts allocated
to the ESPP accounts of each participant in the ESPP on such date with respect
to each offering period then underway.
(f) Prior to the Effective Time, the Company and each Company
Subsidiary, as applicable, shall take any and all actions necessary to ensure
that each Incentive Plan is amended and/or interpreted to provide that such
plan shall not permit the payment or settlement of awards thereunder in Company
Common Stock or Options (or any other stock or derivative security of the
Company or any Company Subsidiary). No amendment or interpretation adopted in
accordance with the preceding sentence shall increase the aggregate payments
made with respect to any award granted pursuant to an Incentive Plan.
Section 7.8 Stockholder Litigation. The Company shall give Parent the
opportunity to participate in the defense or settlement of any stockholder
litigation against the Company and/or its directors relating to the
transactions contemplated by this Agreement or the Stockholder Agreement, and
no such settlement shall be agreed to without Parent's prior written consent,
which consent shall not be unreasonably withheld.
44
ARTICLE VIII
Conditions Precedent
Section 8.1 Conditions to Each Party's Obligation to Effect the Merger.
The respective obligation of each party to effect the Merger is subject to the
satisfaction or waiver on or prior to the Closing Date of each of the following
conditions:
(a) Stockholder Approval. This Agreement shall have been approved
and adopted by the stockholders of the Company in accordance with Delaware Law.
(b) Antitrust Filings. The waiting period (and any extension
thereof) applicable to the Merger under the HSR Act shall have been terminated
or shall have expired, and all applicable waiting periods (and any extensions
thereof) under the pre-merger notification requirements in Germany and Ireland
shall have been terminated or shall have expired (or, to the extent applicable,
all approvals under such requirements shall have been obtained).
(c) No Injunctions or Restraints. No Applicable Law shall have been
enacted or promulgated by any Governmental Entity that prohibits the
consummation of the Merger, and there shall be no Order or injunction of a
court of competent jurisdiction in effect that prohibits the consummation of
the Merger (collectively, "Legal Restraints").
Section 8.2 Conditions to Obligations of Parent and Sub. The obligations
of Parent and Sub to effect the Merger are subject to satisfaction or waiver
(to the extent permitted by Applicable Law) of each of the following
conditions:
(a) Representations and Warranties. The representations and
warranties of the Company set forth in this Agreement (disregarding all
qualifications and exceptions contained therein relating to "materiality" or
"Company Material Adverse Effect") shall be true and correct in all respects as
of the date of this Agreement and as of the Closing Date as though made on and
as of the Closing Date (except to the extent any such representations and
warranties expressly relate to an earlier date, in which case as of such
earlier date), with only such exceptions as would not, individually or in the
aggregate, have a Company Material Adverse Effect.
(b) Performance of Obligations of the Company. The Company shall
have performed in all material respects all obligations required to be
performed by it under this Agreement at or prior to the Closing Date.
(c) Company Certificate. Parent shall have received a certificate,
dated as of the Closing Date, signed by the chief executive officer of the
Company, to the effect that the conditions set forth in Section 8.2(a) and
Section 8.2(b) have been satisfied.
(d) No Governmental Litigation. There shall not be pending any
Proceeding by any Governmental Entity (i) seeking to restrain or prohibit the
consummation of the Merger or seeking to obtain from the Company, Parent or Sub
any damages that are material in relation to the Company and the Company
Subsidiaries, taken as a whole, (ii) seeking to prohibit or impose any
limitations on Parent's or Sub's ownership or operation (or that of any of
45
their respective Subsidiaries or Affiliates) of any portion of their or the
Company's businesses or assets, or to compel any such Person to dispose of or
hold separate any portion of the business or assets of the Company or Parent
and their respective Subsidiaries, (iii) seeking to impose limitations on the
ability of Parent or any of its Affiliates to acquire or hold, or exercise full
rights of ownership of, any shares of Company Common Stock, (iv) seeking to
prohibit Parent or any of its Affiliates from effectively controlling the
business or operations of the Company and the Company Subsidiaries or (v) which
otherwise is reasonably likely to have a Company Material Adverse Effect; and
no court, arbitrator or Governmental Entity shall have issued any Order, and
there shall not be any Applicable Law, that is likely, directly or indirectly,
to result in any of the consequences referred to in the preceding clauses (i)
through (v).
(e) No Company Material Adverse Effect. At any time on or after the
date of this Agreement, there shall not have occurred any Company Material
Adverse Effect (or, if one shall have occurred, it shall have been cured to the
reasonable satisfaction of Parent).
Section 8.3 Conditions to Obligation of the Company. The obligation of the
Company to effect the Merger is subject to the satisfaction or waiver (to the
extent permitted by Applicable Law) of each of the following conditions:
(a) Representations and Warranties. The representations and
warranties of Parent and Sub set forth in this Agreement (disregarding all
qualifications and exceptions contained therein relating to "materiality")
shall be true and correct in all respects as of the date of this Agreement and
as of the Closing Date as though made on and as of the Closing Date (except to
the extent any such representations and warranties expressly relate to an
earlier date, in which case as of such earlier date), with only such exceptions
as would (x) impair in any material respect the ability of either Parent or Sub
to perform its obligations under this Agreement, or (y) prevent or materially
delay the consummation of any of the transactions contemplated by this
Agreement.
(b) Performance of Obligations of Parent and Sub. Parent and Sub
shall have performed in all material respects all obligations required to be
performed by them under this Agreement at or prior to the Effective Time.
(c) Parent Certificate. Company shall have received a certificate,
dated as of the Effective Time, signed by the chief executive officer or chief
financial officer of Parent, to the effect that the conditions set forth in
Section 8.3(a) and Section 8.3(b) have been satisfied.
ARTICLE IX
Termination, Amendment and Waiver
Section 9.1 Termination. This Agreement may be terminated, and the Merger
contemplated hereby may be abandoned, at any time prior to the Effective Time,
whether before or after the Stockholder Approval has been obtained:
(a) by mutual written consent of Parent and the Company;
(b) by either Parent or the Company if:
46
(i) the Merger shall not have been consummated by September 30, 2004
(the "End Date"); provided, however, that the right to terminate this
Agreement under this Section 9.1(b)(i) shall not be available to any party
whose failure to fulfill in any material respect any obligation under this
Agreement has caused or resulted in the failure of the Merger to occur on
or before the End Date;
(ii) any Legal Restraint having the effect set forth in Section
8.1(c) shall be in effect and be final and not subject to further appeal;
(iii) the Stockholder Approval shall not have been obtained by reason
of the failure to obtain the required vote at the Stockholders Meeting
duly convened therefor or at any adjournment or postponement thereof; or
(iv) there shall have been a breach by the other of any of its
respective representations, warranties, covenants or obligations contained
in this Agreement, which breach would result in the failure to satisfy one
or more of the conditions set forth in Section 8.2(a) or (b) (in the case
of the Company) or Section 8.3(a) or (b) (in the case of Parent), and in
any such case, such breach shall be incapable of being cured or, if
capable of being cured, shall not have been cured within thirty (30) days
after written notice thereof shall have been received by the party alleged
to be in breach.
(c) by Parent if:
(i) the Company Board or any committee thereof withdraws or modifies
in a manner adverse to Parent or Sub its recommendation of this Agreement
or the Merger, or fails to reconfirm such recommendation if so requested
by Parent within ten (10) Business Days following such request, or if the
Company Board or any committee thereof resolves to take any of the
foregoing actions;
(ii) the Company Board or any committee thereof approves or
recommends any Alternative Acquisition Proposal, or fails to recommend
against, or takes a neutral position with respect to, a tender or exchange
offer related to an Alternative Acquisition Proposal, or the Company Board
or any committee thereof resolves to take any of the foregoing actions; or
(iii) the Company shall have violated or breached any of its
obligations under Section 6.2;
(d) by Parent in the event that changes or developments occur which,
individually or in the aggregate, have resulted in a Company Material Adverse
Effect, and in any such case, such Company Material Adverse Effect shall be
incapable of being cured; and
(e) by the Company in accordance with the terms and subject to the
conditions of Section 6.2(b).
47
Section 9.2 Effect of Termination. In the event of termination of this
Agreement by either the Company or Parent as provided in Section 9.1, this
Agreement shall forthwith become void and have no effect, and, except to the
extent that such termination results from fraud or the willful and material
breach by a party of any of its representations, warranties, covenants or
agreements set forth in this Agreement, there shall be no liability or
obligation on the part of Parent, Sub or the Company, other than with respect
to Section 4.21, Section 5.4, this Section 9.2, Section 9.3 and Article X,
which provisions shall survive such termination.
Section 9.3 Fees and Expenses.
(a) All fees and expenses incurred in connection with the Merger,
this Agreement and the transactions contemplated by this Agreement shall be
paid by the party incurring such fees or expenses, whether or not the Merger is
consummated.
(b) If this Agreement is terminated: (i) by Parent pursuant to
Section 9.1(c) or (ii) by the Company pursuant to Section 9.1(e), then the
Company shall immediately prior to any such termination by the Company or, in
the event of a termination by Parent, promptly, but in no event later than two
(2) days after the date of such termination, pay Parent a fee equal to
$44,500,000 (the "Termination Fee"). If this Agreement is terminated by any
party hereto: (x) pursuant to Section 9.1(b)(i) following a failure by the
Company to hold the Stockholders Meeting in breach of its obligations under
Section 7.1(b) or (y) pursuant to Section 9.1(b)(iii) and at or prior to the
time of the Stockholders Meeting an Alternative Acquisition Proposal shall have
been publicly announced and, prior to the date twelve (12) months following the
date of the termination of this Agreement, the Company shall either (A)
consummate an Alternative Acquisition or (B) enter into an Acquisition
Agreement providing for an Alternative Acquisition, which Alternative
Acquisition is subsequently consummated, then the Company shall pay the
Termination Fee in the case of clause (A) concurrently with the consummation of
such Alternative Acquisition or in the case of clause (B) concurrently with the
consummation of the transaction subject to such Acquisition Agreement (whether
or not such transaction is consummated prior to the date twelve (12) months
following the date of the termination of this Agreement). All payments made
pursuant to this Section 9.3(b) shall be made by wire transfer of immediately
available funds to an account designated by Parent.
(c) The Company acknowledges that the agreements contained in
Section 9.3(b) are an integral part of the transactions contemplated by this
Agreement, and that, without these agreements, Parent would not enter into this
Agreement. If the Company shall fail to pay the Termination Fee when due, the
Termination Fee shall be deemed to include the costs and expenses incurred by
Parent (including, without limitation, fees and expenses of counsel) in
connection with the collection under and enforcement of this Section 9.3,
together with interest on such unpaid Termination Fee, commencing on the date
that the Termination Fee became due, at a rate equal to the rate of interest
publicly announced by Citibank, N.A., from time to time, in the City of New
York, as such bank's Base Rate plus one percent (1%).
Section 9.4 Amendment. This Agreement may be amended by the parties hereto
at any time, whether before or after the Stockholder Approval is obtained. This
Agreement may not be amended except by an instrument in writing signed on behalf
of each of the parties.
48
Section 9.5 Extension; Waiver. At any time prior to the Effective Time,
the parties may (a) extend the time for the performance of any of the
obligations or other acts of the other parties, (b) waive any inaccuracies in
the representations and warranties contained herein or in any document
delivered pursuant hereto or (c) waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of a party to any such
extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party. The failure of any party to this
Agreement to assert any of its rights under this Agreement or otherwise shall
not constitute a waiver of such rights.
ARTICLE X
General Provisions
Section 10.1 Nonsurvival of Representations and Warranties. None of the
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive the Effective Time. This Section 10.1
shall not limit any covenant or agreement of the parties which by its terms
contemplates performance after the Effective Time.
Section 10.2 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed given if
delivered personally, telecopied (which is confirmed) or sent by nationally
recognized overnight courier (providing proof of delivery) to the parties at
the following addresses (or at such other address for a party as shall be
specified by like notice):
if to Parent or Sub, to:
Xxxxxx Laboratories
000 Xxxxxx Xxxx Xxxx
Xxxxxxxx XX0X, Xxxxxxxxxx 0000
Xxxxxx Xxxx, Xxxxxxxx 00000-0000
Attention: President and Chief Operations Officer,
Medical Products Group
Telecopier: (000) 000-0000
with a copy to:
Xxxxxx Laboratories
000 Xxxxxx Xxxx Xxxx
Xxxxxxxx XX0X, Department 322
Xxxxxx Xxxx, Xxxxxxxx 00000-0000
Attention: Divisional Vice President,
Domestic Legal Operations
Telecopier: (000) 000-0000
49
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Xx.
Telecopier: (000) 000-0000
if to the Company, to:
TheraSense, Inc.
0000 Xxxxx Xxxx Xxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxx Xxxxxxxx
Vice President, General Counsel
Telecopier: (000) 000-0000
with a copy to:
Xxxxx Xxxx & Xxxxxxxx
0000 Xx Xxxxxx Xxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Telecopier: (000) 000-0000
Section 10.3 Interpretation. When a reference is made in this Agreement to
a Section, Annex or Schedule, such reference shall be to a Section of, or an
Annex or Schedule to, this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation." The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement. The definitions contained in
this Agreement are applicable to the singular as well as the plural forms of
such terms.
Section 10.4 Counterparts. This Agreement may be executed (including by
facsimile transmission) in one or more 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.
Section 10.5 Entire Agreement; No Third-Party Beneficiaries. This
Agreement, the Company Disclosure Schedules, the Stockholder Agreement and the
Confidentiality Agreement constitute the entire agreement and supersede all
prior agreements and understandings, both written and oral, among the parties
with respect transactions
50
contemplated by this Agreement. Other than Section 7.5 of this Agreement, no
provision of this Agreement is intended to confer upon any Person other than
the parties hereto any rights or remedies.
Section 10.6 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, regardless of
the applicable principles of conflict of laws thereof.
Section 10.7 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned, in whole or in part, by
operation of law or otherwise by any of the parties without the prior written
consent of the other parties, except that Sub may assign, in its sole
discretion, any or all of its rights, interests and obligations under this
Agreement to Parent or to any direct wholly-owned Subsidiary of Parent, but no
such assignment shall relieve Sub of any of its obligations hereunder. Any
purported assignment without such consent shall be void. Subject to the
preceding sentences, this Agreement shall be binding upon, inure to the benefit
of and be enforceable by, the parties and their respective successors and
assigns.
Section 10.8 Enforcement. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached.
It is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any federal court located in the
State of Delaware or in any Delaware state court, this being in addition to any
other remedy to which they are entitled at law or in equity. In addition, each
of the parties hereto (a) consents to submit itself to the personal
jurisdiction of any federal court located in the State of Delaware or of any
Delaware state court in the event any dispute arises out of this Agreement or
the transactions contemplated by this Agreement, (b) agrees that it will not
attempt to deny or defeat such personal jurisdiction by motion or other request
for leave from any such court, (c) agrees that it will not bring any action or
counterclaim relating to this Agreement or the transactions contemplated by
this Agreement in any court other than a court of the United States located in
the State of Delaware or a Delaware state court and (d) waives any right to
trial by jury with respect to any action related to arising out of this
Agreement or any of the transactions contemplated hereby.
Section 10.9 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible to the fullest
extent permitted by Applicable Law in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.
51
IN WITNESS WHEREOF, Parent, 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.
XXXXXX LABORATORIES
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President & Chief
Operating Officer, Medical
Products Group
CORVETTE ACQUISITION CORP.
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
THERASENSE, INC.
By: /s/ W. Xxxx Xxxxx
-------------------------------------
Name: W. Xxxx Xxxxx
Title: Chairman, President and
Chief Executive Officer
