SUBSCRIPTION AND STOCKHOLDER AGREEMENT
EXHIBIT
10.5
THIS
SUBSCRIPTION AND STOCKHOLDER AGREEMENT (this “Agreement”)
dated
as of April 21, 2006, is by and between BOSTON SCIENTIFIC CORPORATION, a
Delaware corporation (“Boston
Scientific”)
and
XXXXXX LABORATORIES, an Illinois corporation (“Abbott”).
WHEREAS,
Boston Scientific and Abbott are parties to that certain Transaction Agreement
dated as of January 8, 2006 (as amended to date and as may be further amended,
restated, supplemented or otherwise modified from time to time, the
“Transaction
Agreement”),
pursuant to which Abbott agreed, through itself or one if its affiliates, to
acquire the vascular intervention and endovascular solutions businesses of
Guidant Corporation (“Guidant”)
on the
terms and subject to the conditions set forth in the Transaction Agreement
and
the Purchase Agreement (as hereinafter defined);
WHEREAS,
the Transaction Agreement provides that, at the Closing, Abbott shall purchase
from Boston Scientific, and Boston Scientific shall issue and sell to Abbott,
shares of common stock, par value $0.01 per share (the “Common
Stock”),
of
Boston Scientific;
WHEREAS,
Abbott desires to purchase from Boston Scientific, and Boston Scientific desires
to sell to Abbott, the Shares (as hereinafter defined) upon the terms and
subject to the conditions set forth herein; and
WHEREAS,
the parties hereto desire to restrict the sale or transfer of the Shares and
to
provide for certain rights and obligations in respect of the Shares, all as
hereinafter provided.
NOW,
THEREFORE, in consideration of the promises and the mutual agreements and
covenants set forth herein, and intending to be legally bound, the parties
hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions.
(a)
Capitalized terms used herein and not defined shall have the meanings ascribed
to them in that Purchase Agreement, dated as of the date hereof, between Guidant
and Abbott (the “Purchase
Agreement”),
unless otherwise indicated.
(b) For
purposes of this Agreement, all references to “Abbott” shall refer to Xxxxxx
Laboratories and any of its Affiliates that Xxxxxx Laboratories designates
to
purchase Shares in lieu of Abbott in accordance with Section 7.9.
ARTICLE II
SALE
OF STOCK; SHARE CLOSING; ADDITIONAL ISSUANCES
Section 2.1 Purchase
and Sale.
(a)
On the
basis of the representations, warranties, covenants and agreements herein,
at
the
Share Closing (as defined below), Abbott shall purchase from Boston Scientific,
and Boston Scientific shall issue and sell to Abbott, 56,000,000 shares of
Common Stock (the “Shares”)
at a
purchase price of $25.00 per Share, for an aggregate purchase price of
$1,400,000,000 (the “Aggregate
Stock Purchase Price”);
provided
that if
the average of the per share closing prices of the shares of Common Stock on
the
New York Stock Exchange during the five consecutive trading days ending (and
including) the date that is three trading days prior to the Share Closing Date
(as defined below) is less than $25.00, Abbott shall purchase from Boston
Scientific, and Boston Scientific shall issue and sell to Abbott, the number
of
shares of Common Stock (which shall be deemed to be Shares for purposes of
this
Agreement) that is equal to the quotient obtained by dividing $1,400,000,000
by
such average per share closing price (the per Share purchase price payable
by
Abbott or the applicable Purchaser under this Section 2.1(a) being, the
“Stock
Purchase Price”).
In no
event shall the number of Shares acquired by Abbott pursuant to this Section
2.1(a) equal or exceed 5% of the number of shares of Common Stock outstanding
immediately following the issuance of Shares pursuant to this Section 2.1 and
the consummation of the Merger, and, in such event, the number of Shares to
be
purchased by Abbott hereunder and the Aggregate Stock Purchase Price shall
be
reduced accordingly.
(b)
At the
Share Closing, (i) Abbott shall pay the Aggregate Stock Purchase Price by wire
transfer of immediately available funds to a bank account designated in writing
by Boston Scientific to Abbott not fewer than three Business Days prior to
the
Share Closing Date, and (ii) Boston Scientific shall deliver to Abbott the
Shares in either book entry form or evidenced by stock certificates having
the
legend described in Section 3.3, as determined by Boston Scientific not fewer
than ten business days prior to the Share Closing Date; provided,
however,
that in
the event that Boston Scientific determines to issue the Shares evidenced by
stock certificates, Boston Scientific shall deliver such stock certificates
to
Abbott or an agent of Abbott (which agent shall be designated by Abbott not
fewer than five business days prior to the Share Closing Date), and Boston
Scientific shall bear any risk of loss related to such delivery.
Section 2.2 Time
and Place of Share Closing; Conditions Precedent.
(a)
The
closing with respect to the purchase and sale of the Shares (the “Share
Closing”)
shall
take place simultaneously with, and at the same location as, the Closing
contemplated by the Purchase Agreement, or on such other date and at such other
location as mutually agreed between the parties (the date of the Share Closing,
the “Share
Closing Date”),
provided that the conditions set forth in Section 2.2(b) and 2.2(c) have been
satisfied or waived.
(b) The
obligation of Boston Scientific to consummate the transactions contemplated
by
this Agreement is subject to the satisfaction or written waiver by Boston
Scientific, at or prior to the Share Closing, of the following
conditions:
(i) each
of
the representations and warranties of Abbott contained in this Agreement shall
be true and correct in all material respects as of the Share
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Closing
Date, with the same force and effect as if made as of the Share Closing Date
(other than such representations and warranties as are made as of another date,
which shall be true and correct in all material respects as of such date),
except in either case where any failure of such representations and warranties
to be so true and correct would not materially delay or prevent the consummation
of the transactions contemplated hereby, and the covenants and agreements
contained in this Agreement to be complied with by Abbott on or before the
Share
Closing Date shall have been complied with in all material respects;
(ii) all
of
the respective conditions to Boston Scientific’s, Sub’s and Guidant’s
obligations to consummate the Merger, as set forth in the Merger Agreement,
shall have been satisfied or waived, and each of Boston Scientific and Sub
shall
have notified Guidant, and Guidant shall have notified Boston Scientific and
Sub, in writing (with copies of such notices having been delivered to Abbott)
that it is ready, willing and able to consummate the Merger and that it intends
to consummate the Merger immediately following the consummation of the
transactions contemplated by this Agreement, the Purchase Agreement and the
Transaction Agreement; and
(iii) all
of
the respective conditions to Xxxxxx’x and Guidant’s obligations to consummate
the transactions contemplated by the Purchase Agreement, as set forth in the
Purchase Agreement, shall have been satisfied or waived, and each party thereto
shall have notified the other party in writing (with copies of such notices
having been delivered to Boston Scientific) that it is ready, willing and able
to consummate the transactions contemplated by the Purchase Agreement and that
it shall consummate such transactions simultaneously with the consummation
of
the transactions contemplated by this Agreement.
(c) The
obligation of Abbott to consummate the transactions contemplated by this
Agreement is subject to the satisfaction or written waiver by Abbott, at or
prior to the Share Closing, of the following conditions:
(i) each
of
the representations and warranties of Boston Scientific contained in this
Agreement shall be true and correct in all material respects as of the Share
Closing Date, with the same force and effect as if made as of the Share Closing
Date (other than such representations and warranties as are made as of another
date, which shall be true and correct in all material respects as of such date),
except in either case where any failure of such representations and warranties
to be so true and correct would not materially delay or prevent the consummation
of the transactions contemplated hereby, and the covenants and agreements
contained in this Agreement to be complied with by Boston Scientific on or
before the Share Closing Date shall have been complied with in all material
respects;
(ii) all
of
the respective conditions to Boston Scientific’s, Sub’s and Guidant’s
obligations to consummate the Merger, as set forth in the Merger Agreement,
shall have been satisfied or waived, and each of Boston Scientific and
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Sub
shall
have notified Guidant, and Guidant shall have notified Boston Scientific and
Sub, in writing (with copies of such notices having been delivered to Abbott)
that it is ready, willing and able to consummate the Merger and that it intends
to consummate the Merger immediately following the consummation of the
transactions contemplated by this Agreement, the Purchase Agreement and the
Transaction Agreement; and
(iii) all
of
the respective conditions to Xxxxxx’x and Guidant’s obligations to consummate
the transactions contemplated by the Purchase Agreement, as set forth in the
Purchase Agreement, shall have been satisfied or waived, and Guidant shall
have
notified Abbott in writing that it is ready, willing and able to consummate
the
transactions contemplated by the Purchase Agreement and that it shall consummate
such transactions simultaneously with the consummation of the transactions
contemplated by this Agreement.
(d) In
the
event that Boston Scientific, Sub and Guidant do not complete the Merger on
the
same day as, or on the first Business Day following, the Share Closing Date,
then on the second Business Day following the Share Closing Date, Boston
Scientific shall repurchase all of the Shares sold to Abbott pursuant to Section
2.1 for an amount equal to the Aggregate Stock Purchase Price plus interest
compounded daily on such amount for the period from and including the Share
Closing Date and ending on the date of repayment at the rate publicly announced
by JPMorgan Chase Bank, N.A. as its prime rate in effect at its principal office
in New York City.
Section 2.3 Additional
Issuance of Common Stock; Interest Reimbursement.
(a)
On the
date (such date, the “Interest
Reimbursement Issuance Date”)
that
is eighteen months following the Share Closing Date, Boston Scientific shall
issue to Abbott a number of shares of Common Stock, as calculated by Abbott
and
set forth in a written notice sent by Abbott to Boston Scientific within three
Business Days prior to the Interest Reimbursement Issuance Date (which notice
shall set forth any relevant calculations), that is equal to the quotient
obtained by dividing the Cost of Borrowing (as defined below) by the average of
the per share closing prices of shares of Common Stock on the New York Stock
Exchange during the twenty consecutive trading days ending (and including)
the
date that is five trading days prior to the Interest Reimbursement Issuance
Date
(and such shares of Common Stock shall be included in the definition of “Shares”
herein (other than with respect to Section 3.5)) (such price, the “Interest
Reimbursement Share Price”).
Any
Shares issued to Abbott pursuant to this Section 2.3 shall, at the time of
issuance to Abbott, be registered under the Securities Act (as defined below).
For purposes of this Section 2.3, the “Cost
of Borrowing”
means
Xxxxxx’x weighted average actual cost of borrowing on a principal amount equal
to the Aggregate Stock Purchase Price during the period commencing on the Share
Closing Date and ending on the Interest Reimbursement Issuance Date, using
for
purposes of determining the weighted average actual cost of borrowing the
interest rates payable by Abbott pursuant to borrowings incurred by it during
the period commencing 30 days prior to the Share Closing Date and ending 30
days
prior to the Interest Reimbursement Issuance Date; provided
that
Boston Scientific will only be required to reimburse Abbott pursuant to this
Section 2.3 with respect to any Cost of Borrowing greater than $10 million
and
less than or equal to $70 million; provided further
that,
for purposes of calculating the Cost of Borrowing, (i) the Net Proceeds (as
defined below) to Abbott or any of its
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Affiliates
from sales of Shares that are retained by Abbott as described in Section 3.5
shall be deemed to have been applied by Abbott (minus any Taxes) to reduce
the
amount of Xxxxxx’x borrowing in respect of the Aggregate Stock Purchase Price,
and (ii) such calculation shall be based solely on the actual cost of borrowing
and shall not be offset by any earnings or other interest income received by
or
due to Abbott in respect of any investments or otherwise. Nothing contained
in
this Section 2.3 shall require Abbott to make any actual payment with respect
to
such borrowing.
(b) Each
fiscal quarter following the Share Closing, Abbott shall notify Boston
Scientific in writing of its Cost of Borrowing during the immediately preceding
fiscal quarter. The calculation of the Cost of Borrowing shall be subject to
a
one-time audit on or after the Interest Reimbursement Issuance Date by a third
party designated by Boston Scientific and reasonably acceptable to Abbott.
The
costs of any such third party audit shall be shared equally by Boston Scientific
and Abbott. In the event the audit discloses that too many or too few Shares
were issued by Boston Scientific pursuant to this Section 2.3 as the result
of a
miscalculation of the Cost of Borrowing, Abbott (in the case of an overissuance
of Shares) or Boston Scientific (in the case of an underissuance of Shares),
as
applicable, shall make a cash payment to the other party, calculated based
on
the Interest Reimbursement Share Price and the number of excess or shortfall
Shares, as applicable, to account for such miscalculation.
ARTICLE III
CERTAIN
RESTRICTIONS ON TRANSFER AND VOTING; USE OF PROCEEDS ON TRANSFER OF
SHARES
Section 3.1 Sale
Restrictions.
(a)
Neither
Abbott nor any of its Affiliates shall sell, transfer, assign or otherwise
dispose of, directly or indirectly (“Transfer”),
any
Shares during the six-month period following the Share Closing; provided
that if
the average of the per share closing prices of shares of Common Stock on the
New
York Stock Exchange during any consecutive twenty trading days during the
six-month period following the Share Closing is greater than $30.00, Abbott
may
sell Shares in accordance with Article IV during such six-month period. Subject
to the second proviso in Section 4.2(b), neither Abbott nor any of its
Affiliates shall Transfer, during any one-month period following the Share
Closing, a number of Shares that is greater than 8.33% of the Shares acquired
by
Abbott at the Share Closing (such number of Shares, the “Monthly
Sale Volume Limitation”);
provided,
however,
that
such restrictions on the ability of Abbott or any of its Affiliates to Transfer
Shares shall terminate on the date that is eighteen months following the Share
Closing Date. The provisions of this Section 3.1(a) may be amended or waived
at
any time in accordance with Section 7.11.
(b) Nothing
in Section 3.1(a) shall prevent Abbott from Transferring any of its Shares
in
any change of control transaction involving Boston Scientific or from tendering
its Shares into any tender offer for the Shares commenced by Boston Scientific
or any other Person.
Section 3.2 Violation
of Transfer Restrictions.
Notwithstanding anything herein to the contrary, Abbott shall not Transfer
any
Shares unless such Transfer is made in accordance with applicable securities
laws. Any attempt to Transfer any Shares in violation of the terms of this
Agreement shall be null and void, and neither Boston Scientific nor any transfer
agent
5
shall
register upon its books any Transfer of Shares by Abbott to any Person except
a
Transfer in accordance with this Agreement.
Section 3.3 Legends.
(a)Each
certificate representing Shares shall, except as otherwise provided in this
Section 3.3, be stamped or otherwise imprinted with a legend substantially
in the following form:
“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE RESTRICTIONS
ON
DISPOSITION OF A SUBSCRIPTION AND STOCKHOLDER AGREEMENT DATED AS OF [______]
[__], 2006, AS THE SAME MAY BE AMENDED FROM TIME TO TIME, BETWEEN XXXXXX
LABORATORIES AND BOSTON SCIENTIFIC CORPORATION.”
(b) Each
certificate representing shares of Registrable Stock (as defined below) shall,
except as otherwise provided in this Section 3.3, be stamped or otherwise
imprinted with legends substantially in the following form:
(i) “THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE RESTRICTIONS
ON
DISPOSITION OF A SUBSCRIPTION AND STOCKHOLDER AGREEMENT DATED AS OF [______]
[__], 2006, AS THE SAME MAY BE AMENDED FROM TIME TO TIME, BETWEEN XXXXXX
LABORATORIES AND BOSTON SCIENTIFIC CORPORATION.”;
and
(ii) “THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF
UNLESS THEY HAVE BEEN REGISTERED UNDER THAT ACT OR AN EXEMPTION FROM
REGISTRATION IS AVAILABLE.”
(c) Boston
Scientific shall, at the request of Abbott, (i) remove from each certificate
evidencing Shares or Registrable Stock the legend described in Section 3.3(a)
and 3.3(b)(i), as applicable, on the earlier to occur of (A) such time as Abbott
and its Affiliates own fewer than 8.33% of the Shares acquired by Abbott at
the
Share Closing, and (B) the 18 month anniversary of the Share Closing, and (ii)
remove from each certificate evidencing Registrable Stock the legend described
in Section 3.3(b)(ii) if in the opinion of counsel satisfactory to Boston
Scientific Registrable Stock evidenced thereby may be publicly sold without
registration under the Securities Act or if it is registered. Boston Scientific
shall reasonably cooperate with Abbott to remove the legends described in
Section 3.3(a) and (b) so as to allow Abbott or its Affiliates to Transfer
Shares as permitted by Section 3.1.
Section 3.4 Agreement
to Vote; Proxies.
As of
the Share Closing, Abbott shall grant to Boston Scientific or any of its
designees an irrevocable proxy and shall appoint Boston Scientific or any of
its
designees as attorney-in-fact for Abbott and each of its Affiliates that
beneficially owns Shares received pursuant to Sections 2.1 and 2.3, for so
long
as Abbott and
6
such
Affiliates beneficially own such Shares, with respect to any matter to be voted
on by stockholders of Boston Scientific. All such Shares shall be voted
proportionately with the vote cast by all other stockholders of Boston
Scientific entitled to vote and voting on such matter. Upon the sale, transfer,
assignment or other disposition of such Shares by Abbott or any Affiliate to
an
unaffiliated third party, the proxy granted pursuant to this Section 3.4 with
respect to such Shares so transferred, assigned or disposed shall be
automatically revoked, and the appointment pursuant to this Section 3.4 as
attorney-in-fact with respect to such Shares shall be automatically
terminated.
Section 3.5 Use
of
Proceeds on Sale; Loan Prepayment.
(a)If,
at
any time during the term of the Note, Abbott or any of its Affiliates sells
any
Shares issued pursuant to Section 2.1 to any unaffiliated third party, then
Abbott and Boston Scientific shall share in the proceeds per share (net of
any
underwriting discounts and commissions) (the "Net
Proceeds")
as
follows:
(i) if
the
Net Proceeds to Abbott or such Affiliates from any such sales are less than
or
equal to 110% of the Stock Purchase Price, Abbott shall retain all of such
Net
Proceeds;
(ii) if
the
Net Proceeds to Abbott or such Affiliates from any such sales are greater than
110% but equal to or less than 120% of the Stock Purchase Price, Abbott shall
retain the portion of the Net Proceeds equal to 110% of the Stock Purchase
Price, and the portion of the Net Proceeds in excess of 110% of the Stock
Purchase Price (minus any Taxes imposed on Abbott on or with respect to gain
on
the Net Proceeds in excess of 110% of the Stock Purchase Price) shall be
immediately applied by Abbott to reduce any amounts then outstanding under
the
Note in accordance with Section 3(a) thereof; and
(iii) if
the
Net Proceeds to Abbott or such Affiliates from any such sales are greater than
120% of the Stock Purchase Price, Abbott shall retain the portion of the Net
Proceeds equal to 110% of the Stock Purchase Price, the portion of the Net
Proceeds in excess of 110% but less than or equal to 120% of the Stock Purchase
Price (minus any Taxes imposed on Abbott on or with respect to gain on the
Net
Proceeds in excess of 110% of the Stock Purchase Price but less than or equal
to
120% of the Stock Purchase Price) shall be immediately applied by Abbott to
reduce any amounts then outstanding under the Note in accordance with Section
3(a) thereof, and, with respect to all Net Proceeds in excess of 120% of the
Stock Purchase Price, 50% of such excess amount shall be retained by Abbott,
and
the remaining 50% (minus any Taxes imposed on Abbott on or with respect to
gain
on the remaining 50% of the Net Proceeds in excess of 120% of the Stock Purchase
Price) shall be immediately applied by Abbott to reduce any amounts then
outstanding under the Note in accordance with Section 3(a) thereof.
(b) Abbott
shall determine the amount of such Taxes due any Governmental Authority with
respect to any such sale referred to in Section 3.5(a) above (using for this
purpose the highest marginal tax rate under applicable Law) and shall notify
Boston Scientific in writing
7
within
three Business Days of any sale of Shares by it or any of its Affiliates, and
shall include in such notice the number of Shares sold by it or such Affiliates,
the selling price for such Shares and Net Proceeds for such Shares and the
amount of Taxes payable by Abbott or its Affiliates with respect to such sale
(collectively, the "Sales
Information").
(c) If
a
Governmental Authority ultimately determines that the amount of Taxes imposed
on
a sale of the Shares is greater than the amount computed by Abbott, the
principal amount of the Note shall be increased to reflect the increase in
Taxes
attributable to proceeds applied by Abbott to reduce amounts outstanding under
the Note (including any Taxes attributable to the increase of the Note). If
the
Note is no longer outstanding at the time when Abbott becomes liable for such
increase in Taxes, Boston Scientific shall indemnify Abbott for any such
increase in Taxes, including such Taxes attributable to any such indemnity
payment.
(d) Boston
Scientific may request that Abbott provide access to its books and records
to an
internationally recognized accounting firm reasonably acceptable to Abbott
for
the purpose of verifying the Sales Information. In the event that the results
of
any such verification indicate that the aggregate amount of Net Proceeds applied
by Abbott in accordance with this Section 3.5 and pursuant to Section 3(a)
of
the Note to reduce amounts outstanding under the Note is
(i) less
than
the amount calculated by such third party to be so applied by Abbott,
then
|
(A)
|
the
principal amount of the Note shall be decreased by an amount equal
to such
difference, or
|
|
(B)
|
if
the Note is no longer outstanding at the time such verification is
completed, Abbott shall pay in cash to Boston Scientific an amount
equal
to such difference within three Business Days of the delivery to
each of
Boston Scientific and Abbott of the final determination by such third
party of the results of its verification; or
|
(ii) greater
than the amount calculated by such third party to be so applied by Abbott,
then
|
(A)
|
the
principal amount of the Note shall be increased by an amount equal
to such
difference (taking into account any adjustments previously made due
to the
imposition of increased Tax liability by a Governmental Authority
as
provided above), or
|
|
(B)
|
if
the Note is no longer outstanding at the time such verification is
completed, Boston Scientific shall pay in cash to Abbott an amount
equal
to such difference (taking into account any adjustments or indemnity
payments previously made due to the imposition of increased Tax liability
by a Governmental Authority as provided above) within three Business
Days
of the delivery to each of Boston Scientific and Abbott of the final
determination by such third party of the results of its verification.
Any
costs associated with
verification of the Sales Information by the accounting firm shall
be
borne equally by Boston Scientific and
Abbott.
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Section 3.6 Full
Sale and Divestiture of Shares.
Subject
to Section 3.1(a), Abbott agrees to Transfer all Shares received pursuant to
Sections 2.1 and 2.3 hereof to an unaffiliated third party no later than 30
months following the Share Closing.
Section 3.7 Consistent
Reporting for Tax Purposes.
Consistent with the provisions of Section 3.5 regarding the use of the Net
Proceeds from the sale of the Shares, Boston Scientific and Abbott agree that
for Tax purposes, Boston Scientific is selling a partial interest in the Shares
to Abbott, and Boston Scientific is retaining the residual interest in the
Shares. Accordingly, upon a sale of the Shares, Abbott and Boston Scientific
agree that each party will report a sale of the Shares on its Tax returns in
the
following manner: (a) Abbott will treat as its amount realized from the sale
of
the Shares the amount that corresponds to the Net Proceeds it is entitled to
retain under Section 3.5 (not including the amounts that are required under
Section 3.5 to be applied to reduce the outstanding amounts under the Note),
(b)
Boston Scientific will treat as its amount realized from the sale of Shares
the
amount that corresponds to the Net Proceeds it is entitled to receive under
Section 3.5 and that is applied to reduce the outstanding amounts under the
Note, and (c) both Abbott and Boston Scientific agree to treat the portion
of
the Net Proceeds that are applied to reduce the amounts outstanding under the
Note pursuant to Section 3.5 as having been received by Boston Scientific in
exchange for its residual interest in the Shares and then transferred to Abbott
as payment of the amounts outstanding under the Note. The parties further agree
not to take any Tax position that is inconsistent with the foregoing, provided,
however, that Boston Scientific shall bear all costs of defending such Tax
position on audit and in litigation.
ARTICLE IV
REGISTRATION
RIGHTS
Section 4.1 Definition
of Registrable Stock.
For
purposes of this Agreement, “Registrable
Stock”
means
the Shares acquired by Abbott pursuant to Section 2.1 or 2.3 as to which the
Registration Statement (as defined in Section 4.2) has not become effective
prior to the Share Closing Date, and any securities issued or issuable with
respect to such Shares by way of conversion, exchange, replacement, stock
dividend, stock split or other distribution or in connection with a combination
of shares, recapitalization, merger, consolidation or other reorganization
or
otherwise. Any Registrable Stock shall cease to be Registrable Stock when
(i) a registration statement covering such Registrable Stock has been
declared or automatically becomes effective and such Registrable Stock has
been
disposed of pursuant to such effective registration statement, (ii) such
Registrable Stock is sold by a Person in a transaction in which the rights
of
Abbott under this Article IV are not assigned, or (iii) such Registrable
Stock is sold pursuant to Rule 144(k) (or any similar provision then in
force, but not Rule 144A) under the Securities Act of 1933, as amended (the
“Securities
Act”)
without registration under the Securities Act.
Section 4.2 Registration
Rights; Registration Procedures.
(a)Boston
Scientific shall (i) file with the Securities and Exchange Commission (the
“SEC”)
on or
prior to
9
the
Share
Closing Date an automatic shelf registration statement (as defined in Rule
405
of the Securities Act) on Form S-3 under the Securities Act (the “Registration
Statement”)
which
in addition to other securities of Boston Scientific, shall include shares
of
Common Stock for the issuance of the Shares issuable by Boston Scientific to
Abbott pursuant to this Agreement and (ii) prior to each of the Share Closing
Date and the Interest Reimbursement Issuance Date, shall pay the required SEC
filing fees relating the Shares issuable by Boston Scientific to Abbott pursuant
to this Agreement on such dates, respectively, within the time required by
Rule
456(b)(1) under the Securities Act in accordance with Rules 456(b) and 457(r)
under the Securities Act. To the extent such issuance of the Shares has not
been
registered pursuant to an effective Registration Statement on or prior to the
Share Closing Date, Boston Scientific shall, as promptly as practicable on
or
following the Share Closing Date, file with the SEC a “shelf” registration
statement on Form S-3 pursuant to Rule 415 under the Securities Act (including
the Registration Statement, to the extent it is used as a resale shelf
registration statement for the Shares, the “Shelf
Registration”)
with
respect to the Shares issuable by Boston Scientific to Abbott pursuant to this
Agreement, and thereafter shall (x) use its reasonable best efforts to (A)
have
the Shelf Registration declared effective (or take such steps to make it
automatically effective) as soon as reasonably practicable thereafter, and
(B)
keep the Shelf Registration continuously effective from the date such Shelf
Registration is declared effective until at least the second anniversary of
such
effective date (the “Effectiveness
Period”)
in
order to permit the prospectus forming a part thereof to be usable by Abbott
and
its Affiliates during such period and (y) pay the required SEC filing fees
relating to the Shares issuable by Boston Scientific to Abbott pursuant to
this
Agreement within the time required by Rule 456(b)(1) under the Securities Act
in
accordance with Rules 456(b) and 457(r) under the Securities Act. Boston
Scientific shall use its reasonable best efforts to list the Shares issuable
by
Boston Scientific to Abbott pursuant to this Agreement on the New York Stock
Exchange.
(b) Notwithstanding
anything to the contrary contained herein, Boston Scientific shall have the
right to defer or delay filing the Shelf Registration for a period of not more
than 60 days, or suspend sales under the Shelf Registration filed hereunder
or
defer the updating of such filed Shelf Registration during no more than two
periods aggregating not more than 60 days, in the event that Boston Scientific
furnishes to Abbott a certificate signed by an authorized officer of Boston
Scientific stating that, in the good faith opinion of the Board of Directors
of
Boston Scientific, such filing, sale or update would interfere with any material
transaction then being pursued by Boston Scientific or would otherwise require
disclosure of any material event that Boston Scientific would not otherwise
be
required to disclose; provided,
however,
that
Boston Scientific shall extend the Effectiveness Period by the number of days,
if any, during with the registration rights contemplated hereunder are subject
to a deferral or suspension as set forth in this Section 4.2(b); and
provided further
that in
the event of any such deferral or suspension set forth in this Section 4.2(b),
the Monthly Sale Volume Limitation for each month during the period commencing
on the end of such deferral or suspension and ending on the date on which the
Monthly Sale Volume Limitation is terminated pursuant to Section 3.1 (such
period, the “Post-Suspension
Period”)
(treating any partial month period and the next full month following the end
of
such deferral or suspension as one month) shall be increased proportionately
so
that the aggregate number of Shares which Abbott may sell during the
Post-Suspension Period is equal to the number of Shares which Abbott otherwise
would have been able to sell pursuant to Section 3.1 during the Post-Suspension
Period and the period of such deferral or suspension had such deferral or
suspension not occurred.
10
(c) Subject
to Section 4.2(b), if Boston Scientific files a Shelf Registration pursuant
to
Section 4.2(a), Boston Scientific shall, as promptly as
practicable:
(i) supplement
or amend the Shelf Registration and the prospectus used in connection therewith
(A) as required by the registration form utilized by Boston Scientific or by
the
instructions applicable to such registration form or by the Securities Act,
(B)
as required for any given offering or to correct any untrue statement of a
material fact or to remedy any omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading in light
of
the circumstances under which they were made and (C) to include in such Shelf
Registration any additional securities that become Registrable Stock by
operation of the definition thereof;
(ii) notify
Abbott (A) when the Shelf Registration or any amendment thereto has been
filed or becomes effective, the prospectus or any amendment or supplement to
the
prospectus has been filed, (B) of any request by the SEC for amendments or
supplements to the Shelf Registration or the prospectus or for additional
information, (C) of the issuance by the SEC of any stop order or cease
trade order suspending the effectiveness of the Shelf Registration or any order
preventing or suspending the use of any preliminary prospectus or prospectus,
including the receipt of any notice of objection by the SEC to the use of the
Shelf Registration or any post-effective amendment thereto pursuant to Rule
401(g)(2) under the Securities Act or the initiation or, to the extent known
by
Boston Scientific, threatening, of any proceedings for such purposes, and
(D) of the receipt by Boston Scientific of any written notification with
respect to the suspension of the qualification of the Registrable Stock for
offering or sale in any jurisdiction or the initiation or threatening of any
proceedings for such purposes;
(iii) use
its
reasonable best efforts to obtain the withdrawal of any stop order, cease trade
order or other order suspending the use of any preliminary prospectus or
prospectus or suspending any qualification of the Registrable Stock covered
by
the Shelf Registration or the resolution of any objection of the SEC pursuant
to
Rule 401(g)(2) and provide prompt notice to Abbott of such withdrawal or
resolution;
(iv) furnish
to Abbott such numbers of copies of the Shelf Registration and the prospectus
included therein, including each preliminary prospectus and any amendments
or
supplements thereto in conformity with the requirements of the Securities Act,
any exhibits filed therewith and such other documents and information as Abbott
may reasonably request;
(v) use
all
reasonable best efforts to register or qualify the Registrable Stock covered
by
the Shelf Registration under such other securities or blue sky Laws of such
jurisdiction within the United States as shall be reasonably appropriate for
the
distribution of the Registrable Stock covered by the Shelf Registration;
provided,
however,
that
Boston Scientific shall not be required in connection therewith or as a
condition thereto to qualify to do business in or to
11
file
a
general consent to service of process in any jurisdiction wherein it would
not
but for the requirements of this paragraph 4.2(c)(v) be obligated to do so;
and provided further,
that
Boston Scientific shall not be required to qualify such Registrable Stock in
any
jurisdiction in which the securities regulatory authority requires that Abbott
or any of its Affiliates submit any Registrable Stock to the terms, provisions
and restrictions of any escrow, lockup or similar agreement(s) for consent
to
sell Registrable Stock in such jurisdiction unless Abbott or such Affiliate
agrees to do so;
(vi) promptly
notify Abbott upon becoming aware of the happening of any event as a result
of
which the prospectus included in such Shelf Registration, as then in effect,
includes an untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances under which they were made, and,
at
the request of Abbott, promptly prepare and furnish to Abbott (and file such
supplement or amendment with the SEC if required) a reasonable number of copies
of a supplement to or an amendment of such prospectus as may be necessary so
that, as thereafter delivered to the purchasers of such securities, such
prospectus shall not include an untrue statement of a material fact or omit
to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances under which
they
were made. In the event Boston Scientific shall give such notice, Boston
Scientific shall extend the Effectiveness Period by the number of days during
the period from and including the date of the giving of such notice to the
date
when Boston Scientific shall make available to Abbott such supplemented or
amended prospectus; and
(vii) enter
into customary agreements and take such other actions as are reasonably required
in order to expedite or facilitate the disposition of the Registrable Stock
to
be so included in the Shelf Registration. Boston Scientific shall take any
such
other actions as are necessary to otherwise comply with all applicable rules
and
regulations of the SEC.
(d) It
shall
be a condition precedent to the obligations of Boston Scientific to take any
action pursuant to this Section 4.2 that Abbott and its Affiliates shall furnish
to Boston Scientific such information regarding themselves, the Registrable
Stock held by them, and the intended method of disposition of such securities
as
Boston Scientific shall reasonably request and as shall be required in
connection with the action to be taken by Boston Scientific
hereunder.
(e) All
expenses incurred in connection with the Registration Statement and Shelf
Registration, if any, excluding underwriters’ discounts and commissions, but
including all registration, filing and qualification fees (including SEC and
New
York Stock Exchange fees and expenses), word processing, duplicating, printers’
and accounting fees, listing fees, messenger and delivery expenses, all fees
and
expenses of complying with state securities or blue sky Laws and the fees and
disbursements of counsel for Boston Scientific, shall be paid by Boston
Scientific. Abbott shall bear and pay the underwriting commissions and discounts
applicable to Registrable Stock offered for its account and the fees and
disbursements of its counsel in connection with any registrations, filings
and
qualifications made pursuant to this Agreement.
12
(f) Boston
Scientific shall indemnify and hold harmless Abbott and its Affiliates, officers
and directors against any losses, claims, damages or liabilities, joint or
several, to which they may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or proceedings in
respect thereof) arise out of or are based on any untrue or alleged untrue
statement of any material fact contained in the Registration Statement or the
Shelf Registration, as applicable, including any prospectus filed under
Rule 424 under the Securities Act, any preliminary prospectus, any free
writing prospectus (as defined in Rule 405 under the Securities Act) or any
“issuer information” filed or required to be filed pursuant to Rule 433(d) under
the Securities Act or any amendments or supplements thereto or arise out of
or
are based upon the omission or alleged omission to state therein a material
fact
required to be stated therein or necessary to make the statements therein not
misleading, and shall reimburse Abbott and its Affiliates, officers and
directors for any legal or other expenses reasonably incurred by them (but
not
in excess of expenses incurred in respect of one counsel for all of them (in
addition to local counsel)) in connection with investigating or defending any
such loss, claim, damage, liability or action; provided,
however,
that
the indemnity agreement contained in this Section 4.2(f) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of Boston Scientific (which
consent shall not be unreasonably withheld); provided,
further,
that
Boston Scientific shall not be liable to Abbott or its Affiliates, officers
or
directors in any such case for any such loss, claim, damage, liability or action
to the extent that it arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in connection
with
such Registration Statement, Shelf Registration, preliminary prospectus, final
prospectus or amendments or supplements thereto, in reliance upon and in
conformity with written information furnished to Boston Scientific or its
representatives expressly for use in connection with such registration by Abbott
or any of its Affiliates or representatives.
(g) Abbott
shall indemnify and hold harmless Boston Scientific, its Affiliates, officers
and directors and each agent and any underwriter for Boston Scientific (within
the meaning of the Securities Act) against any losses, claims, damages or
liabilities, joint or several, to which Boston Scientific or any such Affiliate,
officer, director, agent or underwriter may become subject, under the Securities
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
proceedings in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement or Shelf Registration, as applicable, including any
prospectus filed under Rule 424 under the Securities Act, any preliminary
prospectus, any free writing prospectus (as defined in Rule 405 under the
Securities Act) or any “issuer information” filed or required to be filed
pursuant to Rule 433(d) under the Securities Act or any amendments or
supplements thereto or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent that such untrue statement or alleged untrue statement or omission or
alleged omission was made in such Registration Statement, Shelf Registration,
preliminary or final prospectus, or amendments or supplements thereto, in
reliance upon and in conformity with written information furnished to Boston
Scientific or its representatives by or on behalf of Abbott or any of its
Affiliates expressly for use in connection with such registration; and Abbott
shall reimburse any legal or other expenses reasonably incurred by Boston
Scientific or any such Affiliate, officer, director, agent or underwriter in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided,
however,
that
the indemnity agreement contained in this
13
Section 4.2(g)
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of Abbott
(which consent shall not be unreasonably withheld).
(h) Promptly
after receipt by an indemnified party under Section 4.2(f) or (g), as
applicable, of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against any indemnifying
party under Section 4.2(f) or (g), as applicable, notify the indemnifying party
in writing of the commencement thereof, and the indemnifying party shall have
the right to participate in and assume the defense thereof with counsel selected
by the indemnifying party and reasonably satisfactory to the indemnified party
(unless (i) such indemnified party reasonably objects to such assumption on
the grounds that there may be defenses available to it which are different
from
or in addition to those available to such indemnifying party, (ii) the
indemnifying party and such indemnified party shall have mutually agreed to
the
retention of such counsel or (iii) in the reasonable opinion of such
indemnified party, representation of such indemnified party by the counsel
retained by the indemnifying party would be inappropriate due to actual or
potential differing interests between such indemnified party and any other
party
represented by such counsel in such proceeding, in which case the indemnified
party shall be reimbursed by the indemnifying party for the reasonable expenses
incurred in connection with retaining separate legal counsel); provided,
however,
that an
indemnified party shall have the right to retain its own counsel, with all
fees
and expenses thereof to be paid by such indemnified party, and to be apprised
of
all progress in any proceeding the defense of which has been assumed by the
indemnifying party, it being understood that the indemnifying party will control
such defense. The failure to notify an indemnifying party promptly of the
commencement of any such action shall not relieve the indemnifying party from
any liability in respect of such action which it may have to such indemnified
party on account of the indemnity contained in Section 4.2(f) or (g), as
applicable, unless (and only to the extent) the indemnifying party was
prejudiced by such failure, and in no event shall such failure relieve the
indemnifying party from any other liability which it may have to such
indemnified party. No indemnifying party shall, without the prior written
consent of the indemnified party (which consent will not be unreasonably
withheld), effect any settlement, compromise or discharge of any claim or
pending or threatened proceeding in respect of which the indemnified party
is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement, compromise or discharge includes
an
unconditional release of such indemnified party from all liability arising
out
of such claim or proceeding.
(i) To
the
extent any indemnification by an indemnifying party is prohibited or limited
by
Law, the indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as
a
result of such losses, claims, damages or liabilities in such proportion as
is
appropriate to reflect the relative fault of the indemnifying party and
indemnified party in connection with the actions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of such indemnifying party and indemnified
party shall be determined by reference to, among other things, whether any
action in question, including any untrue or alleged untrue statement of material
fact or omission or alleged omission to state a material fact, has been made
by,
or relates to information supplied by, such indemnifying party or indemnified
party, and the parties’ relative intent, knowledge, access to information and
opportunity to
14
correct
or prevent such action. The amount paid or payable by a party as a result of
the
losses, claims, damages or liabilities referred to above shall be deemed to
include any legal or other fees or expenses reasonably incurred by such party
in
connection with any investigation or proceeding. In no event shall the liability
of any indemnifying party be greater in amount than the amount for which such
indemnifying party would have been obligated to pay by way of indemnification
if
the indemnification provided for under Section 4.2(f) or (g) hereof had been
available under the circumstances. The parties hereto agree that it would not
be
just and equitable if contribution pursuant to this Section 4.2(i) were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in this
Section 4.2(i). No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(j) The
indemnification provided in this Agreement will remain in full force and effect
regardless of any investigation made by or on behalf of the indemnified party
or
any officer, director or Affiliate of such indemnified party and will survive
the Transfer of the securities.
(k) The
obligations in Sections 4.2(f) through (i) shall be in addition to any liability
that any party may otherwise have to any party.
Section 4.3 Rule
144 Sales.
If the
issuance of the Shares has not been registered pursuant to an effective
Registration Statement on or prior to the Share Closing, then, following the
expiration of the Effectiveness Period of the Shelf Registration, Boston
Scientific shall (a) timely file with the SEC all reports and other filings
required under the Exchange Act for Abbott or its Affiliates to sell Shares
pursuant to Rule 144 or any similar rule or regulation hereafter adopted by
the
SEC, and (b) take such further action and shall offer all reasonable and
necessary assistance including, without limitation, the delivery of a legal
opinion letter and instructions to Boston Scientific’s stock transfer agent to
enable the sale by Abbott or its Affiliates of Registrable Stock pursuant to
said Rule 144 or any similar rule or regulation.
ARTICLE V
REPRESENTATIONS,
WARRANTIES AND AGREEMENTS OF BOSTON
SCIENTIFIC
Boston
Scientific hereby represents and warrants to Abbott as follows:
(a) Boston
Scientific is a corporation duly incorporated, validly existing and in good
standing under the Laws of the State of Delaware.
(b) Boston
Scientific has all requisite corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery
by
Boston Scientific of this Agreement, the performance by Boston Scientific of
its
obligations hereunder and the consummation by Boston Scientific of the
transactions contemplated hereby have been duly and validly authorized by all
necessary corporate proceedings on the part of Boston Scientific and no other
corporate action on the part of Boston Scientific is necessary for the
execution, delivery
15
and
performance by Boston Scientific of this Agreement and the consummation by
Boston Scientific of the transactions contemplated hereby. This Agreement has
been duly executed and delivered by Boston Scientific, and assuming the due
authorization, execution and delivery hereof by Abbott, constitutes a legal,
valid and binding obligation of Boston Scientific, enforceable against it in
accordance with its terms except to the extent that its enforceability may
be
limited by bankruptcy, insolvency, reorganization, moratorium or other laws
relating to or affecting creditors’ rights generally and by general equity
principles.
(c) (i)
At
the time of filing the Registration Statement (or the Shelf Registration, to
the
extent an automatic shelf registration statement (as defined in Rule 405 of
the
Securities Act)), (ii) at the time of the most recent amendment thereto for
the
purposes of complying with Section 10(a)(3) of the Securities Act (whether
such
amendment was by post-effective amendment, incorporated report filed pursuant
to
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the
“Exchange
Act”)
or
form of prospectus), and (iii) at the time Boston Scientific or any person
acting on its behalf (within the meaning, for this clause only, of Rule 163(c)
under the Securities Act) made any offer relating to the Shares in reliance
on
the exemption of Rule 163 under the Securities Act, Boston Scientific was,
or is
(as the case may be), a “well-known seasoned issuer” as defined in Rule 405
under the Securities Act; and (B) at the earliest time after the filing of
the
Registration Statement (or the Shelf Registration, to the extent an automatic
shelf registration statement (as defined in Rule 405 of the Securities Act))
that Boston Scientific or another offering participant made a bona fide offer
(within the meaning of Rule 164(h)(2) under the Securities Act) of the Shares,
Boston Scientific was not an “ineligible issuer” as defined in Rule 405 under
the Securities Act.
(d) All
Shares issued pursuant to Sections 2.1 and 2.3 shall, when issued, be validly
issued, fully paid and nonassessable, and shall be free and clear of any liens,
claims, charges and encumbrances other than those imposed as a result of any
action by Abbott or any of its Affiliates.
ARTICLE VI
REPRESENTATIONS,
WARRANTIES AND AGREEMENTS OF ABBOTT
Abbott
hereby represents and warrants to Boston Scientific as follows:
(a) Abbott
is
a corporation duly incorporated, validly existing and in good standing under
the
Laws of the State of Illinois.
(b) Abbott
has all requisite corporate power and authority to execute and deliver this
Agreement and to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery by Abbott of this
Agreement, the performance by Abbott of its obligations hereunder and the
consummation by Abbott of the transactions contemplated hereby have been duly
and validly authorized by all necessary corporate proceedings on the part of
Abbott and no other corporate action on the part of Abbott is necessary for
the
execution, delivery and performance by Abbott of this Agreement and the
consummation by Abbott of the transactions contemplated hereby. This Agreement
has been duly executed and delivered by Abbott, and assuming the due
authorization, execution and
16
delivery
hereof by Boston Scientific, constitutes a legal, valid and binding obligation
of Abbott, enforceable against it in accordance with its terms except to the
extent that its enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting creditors’
rights generally and by general equity principles.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Acknowledgement.
The
parties hereby acknowledge that this Agreement is being entered into by the
parties pursuant to Article VI of the Transaction Agreement. The parties further
acknowledge and agree that the entry of the parties hereto into this Agreement
shall in no way affect the effectiveness of the Transaction Agreement and the
Transaction Agreement shall remain in full force and effect pursuant to the
terms thereof; provided,
however,
that to
the extent that any of the provisions of this Agreement conflict with any
provisions of the Transaction Agreement, the provisions herein shall
control.
Section 7.2 No
Inconsistent Agreements.
Boston
Scientific will not hereafter enter into any agreement with respect to its
securities that would materially impede the rights granted to Abbott in this
Agreement.
Section 7.3 Recapitalization,
Exchanges, etc.
In the
event that any capital stock or other securities issued in respect of, in
exchange for, or in substitution of, any Shares by reason of any reorganization,
recapitalization, reclassification, merger, consolidation, spin-off, partial
or
complete liquidation, stock dividend, split-up, sale of assets, distribution
to
stockholders or combination of the Shares or any other change in capital
structure of Boston Scientific, appropriate adjustments shall be made with
respect to the relevant provisions of this Agreement so as to fairly and
equitably preserve, as far as practicable, the original rights and obligations
of the parties hereto under this Agreement, and the term “Shares,” as used
herein, shall be deemed to include shares of such capital stock or other
securities, as appropriate.
Section 7.4 Expenses.
Except
as otherwise specified in this Agreement, all costs and expenses, including
fees
and disbursements of counsel, incurred in connection with this Agreement and
the
transactions contemplated hereby shall be borne by the party incurring such
costs and expenses, whether or not the Share Closing shall have
occurred.
Section 7.5 Notices.
All
notices, requests, claims, demands and other communications hereunder shall
be
in writing and shall be given or made (and shall be deemed to have been duly
given or made upon receipt) by delivery in person, by an internationally
recognized overnight courier service, by facsimile, by e-mail or by registered
or certified mail (postage prepaid, return receipt requested) to the respective
parties hereto at the following addresses (or at such other address for a party
as shall be specified in a notice given in accordance with this
Section 7.5):
17
(i) if
to
Abbott:
Xxxxxx
Xxxxxxxxxxxx
Xxxx.
0000, Xxxx. XX0X
000
Xxxxxx Xxxx Xxxx
Xxxxxx
Xxxx, Xxxxxxxx 00000-0000
Fax:
(000)
000-0000
Attention:
Chief Operating Officer, Medical Products Group
with
a
copy to:
Xxxxxx
Laboratories
Xxxx.
000, Xxxx. XX0X
000
Xxxxxx Xxxx Xxxx
Xxxxxx
Xxxx, Xxxxxxxx 00000-0000 XXX
Fax:
(000) 000-0000
Attention:
General Counsel
and
Xxxxxx
Laboratories
Xxxx.
000, Xxxx. XX0X
000
Xxxxxx Xxxx Xxxx
Xxxxxx
Xxxx, Xxxxxxxx 00000-0000 XXX
Fax:
(000) 000-0000
Attention:
Treasurer
and
a
copy to:
Xxxxxxx
Xxxxxxx & Xxxxxxxx LLP
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx,
XX 00000-0000
Fax:
(000)
000-0000
Attention:
Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxxx
(ii) if
to
Boston Scientific:
Boston
Scientific Corporation
Xxx
Xxxxxx Xxxxxxxxxx Xxxxx
Xxxxxx,
Xxxxxxxxxxxxx 00000
Fax:
(000)
000-0000
Attention:
General Counsel
18
with
a
copy to:
Shearman
& Sterling LLP
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx,
XX 00000-0000
Fax:
(000)
000-0000
Attention:
Xxxxx X. Xxxxx
Xxxxx X’Xxxxx
Section 7.6 Public
Announcements.
Each
party to this Agreement shall consult with the other party before issuing,
and
shall provide the other party the opportunity to review and comment upon, any
press release or other public announcement in respect of this Agreement or
the
transactions contemplated hereby and shall not issue any press release or other
public statements or otherwise communicate with any news media regarding this
Agreement and/or the transactions contemplated hereby without the consultation
and prior written consent of the other party unless otherwise required by Law
or
applicable stock exchange regulation and then only with such advance notice
to
and consultation with the other party as is practical. The parties to this
Agreement shall cooperate as to the timing and contents of any such press
release, public announcement or communication. Notwithstanding
the foregoing, neither party shall have any obligation to consult with the
other
party or provide the other party with an opportunity to review and comment
upon
any press release or other public announcement announcing a termination of
this
Agreement, and such party may issue such press release or public announcement
or
otherwise communicate with any news media regarding such termination without
the
consent of the other party; provided, however, that the non-terminating party
shall have received advance written notice of the other party’s intention to
terminate this Agreement.
Section 7.7 Term;
Termination.
This
Agreement shall terminate in full on the earlier of (i) the fifth anniversary
of
the date hereof; or (ii) that time when Abbott ceases to beneficially own any
Shares purchased pursuant to this Agreement (or other securities issued in
substitution or exchange therefor pursuant to Section 7.3). This Agreement
will
also terminate at any time prior to the Share Closing:
(a) by
mutual
written consent of Boston Scientific and Abbott;
(b) by
either
Boston Scientific or Abbott, if the Share Closing shall not have occurred by
September 30, 2006; provided,
however,
that
the right to terminate this Agreement under this Section 7.7(b) shall not be
available to any party whose failure to fulfill any obligation under this
Agreement shall have been the cause of, or shall have resulted in the failure
of
the Share Closing to occurring prior to such date;
(c) by
either
Boston Scientific or Abbott in the event that any Governmental Order
restraining, enjoining or otherwise prohibiting the transactions contemplated
by
this Agreement and/or the Purchase Agreement shall have become final and
non-appealable; or
(d) immediately,
without any action by either Boston Scientific or Abbott, upon any termination
of the Merger Agreement.
19
Notwithstanding
the foregoing, any termination pursuant to this Section 7.6 will not relieve
any
party for any liability arising from a breach of representation, warranty,
covenant or agreement in this Agreement occurring prior to such
termination.
Section 7.8 Severability.
If any
term or other provision of this Agreement is invalid, illegal or incapable
of
being enforced by any Law or public policy, all other terms and provisions
of
this Agreement shall nevertheless remain in full force and effect for so long
as
the economic or legal substance of the transactions contemplated by this
Agreement is not affected in any manner materially adverse to either party
hereto. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate
in
good faith to modify this Agreement so as to effect the original intent of
the
parties as closely as possible in an acceptable manner in order that the
transactions contemplated by this Agreement are consummated as originally
contemplated to the greatest extent possible.
Section 7.9 Entire
Agreement.
This
Agreement, the Transaction Agreement and the Purchase Agreement constitute
the
entire agreement of the parties hereto with respect to the subject matter hereof
and thereof and supersede all prior agreements and undertakings, both written
and oral, between Boston Scientific and Abbott with respect to the subject
matter hereof and thereof.
Section 7.10 Assignment.
This
Agreement may not be assigned without the express written consent of Boston
Scientific and Abbott (which consent may be granted or withheld in the sole
discretion of Boston Scientific or Abbott), as the case may be; provided,
however,
that
Abbott may, without the consent of Boston Scientific, assign its rights and
obligations, in whole or in part, under this Agreement to one or more of its
controlled Affiliates, except that no such assignment shall relieve Abbott
from
the performance of its obligations hereunder. Any purported assignment in
contravention of this provision shall be null and void.
Section 7.11 Amendment.
This
Agreement may not be amended or modified except (a) by an instrument in
writing signed by, or on behalf of, Boston Scientific and Abbott or (b) by
a waiver in accordance with Section 7.12.
Section 7.12 Waiver.
Each
party to this Agreement may (a) extend the time for the performance of any
of the obligations or other acts of the other party, (b) waive any
inaccuracies in the representations and warranties of the other party contained
herein or (c) to the extent permitted by applicable Law, waive compliance
with any of the agreements of the other party or conditions to such party’s
obligations contained herein. Any such extension or waiver shall be valid only
if set forth in an instrument in writing signed by the party to be bound
thereby. Any waiver of any term or condition shall not be construed as a waiver
of any subsequent breach or a subsequent waiver of the same term or condition,
or a waiver of any other term or condition of this Agreement. The failure of
either party hereto to assert any of its rights hereunder shall not constitute
a
waiver of any of such rights.
Section 7.13 No
Third Party Beneficiaries.
This
Agreement shall be binding upon and inure solely to the benefit of the parties
hereto and their respective successors and permitted assigns and nothing herein
is intended to or shall confer upon any other Person any legal
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or
equitable right, benefit or remedy of any nature whatsoever, including any
rights of employment for any specified period, under or by reason of this
Agreement.
Section 7.14 Other
Remedies; Specific Performance.
Except
as otherwise provided herein, any and all remedies herein expressly conferred
upon a party will be deemed cumulative with and not exclusive of any other
remedy conferred hereby, or by Law or equity upon such party, and the exercise
by a party of any one remedy will not preclude the exercise of any other remedy.
The parties hereto agree that irreparable damage would occur in the event that
any provision of this Agreement is not performed in accordance with its specific
terms or is otherwise breached. It is accordingly agreed that the parties shall
be entitled to seek an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof in any
court of the United States or any state having jurisdiction, this being in
addition to any other remedy to which they are entitled at Law or in
equity.
Section 7.15 Interpretive
Rules.
The
words “hereof,” “herein” and “hereunder” and words of similar import when used
in this Agreement refer to this Agreement as a whole and not to any particular
provision of this Agreement, and all Article and Section references are to
this
Agreement unless otherwise specified. The words “include,” “includes” and
“including” will be deemed to be followed by the phrase “without limitation.”
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. No provision of this Agreement shall be construed to require
either party or their respective officers, directors, subsidiaries or Affiliates
to take any action which would violate or conflict with any applicable Law.
The
word “if” means “if and only if.” The word “or” shall not be exclusive. The
meanings given to terms defined herein will be equally applicable to both the
singular and plural forms of such terms. Whenever the context may require,
any
pronoun includes the corresponding masculine, feminine and neuter forms. Except
as otherwise expressly provided herein, all references to “$” will be deemed
references to the lawful money of the United States of America.
Section 7.16 Governing
Law.
This
Agreement shall be governed by, and construed in accordance with, the laws
of
the State of New York. All Actions arising out of or relating to this Agreement
shall be heard and determined exclusively in any New York federal court sitting
in the Borough of Manhattan of The City of New York; provided, however, that
if
such federal court does not have jurisdiction over such Action, such Action
shall be heard and determined exclusively in any New York state court sitting
in
the Borough of Manhattan of The City of New York. Consistent with the preceding
sentence, the parties hereto hereby (a) submit to the exclusive jurisdiction
of
any federal or state court sitting in the Borough of Manhattan of The City
of
New York for the purpose of any Action arising out of or relating to this
Agreement brought by either party hereto and (b) irrevocably waive, and
agree not to assert by way of motion, defense, or otherwise, in any such Action,
any claim that it is not subject personally to the jurisdiction of the
above-named courts, that its property is exempt or immune from attachment or
execution, that the Action is brought in an inconvenient forum, that the venue
of the Action is improper, or that this Agreement or the transactions
contemplated by this Agreement may not be enforced in or by any of the
above-named courts. Each party further irrevocably consents to the service
of
process out of any of the aforementioned courts in any such Action by the
mailing of copies thereof by mail to such party at its address set forth in
this
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Agreement,
such service of process to be effective upon acknowledgment of receipt by
registered mail; provided, however, that nothing in this Section 7.16 shall
affect the right of any party to serve legal process in any other manner
permitted by law. The consent to jurisdiction set forth in this Section 7.16
shall not constitute a general consent to service of process in the State of
New
York and shall have no effect for any purpose except as provided in this Section
7.16.
Section 7.17 Waiver
of Jury Trial.
EACH OF
THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH OF THE
PARTIES HERETO HEREBY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY
OF
THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER,
AND
(B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND
THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, AS APPLICABLE, BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7.17.
Section 7.18 Counterparts.
This
Agreement may be executed and delivered (including by facsimile transmission)
in
one or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original,
but
all of which taken together shall constitute one and the same
agreement.
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IN
WITNESS WHEREOF, this Agreement has been signed by or on behalf of each of
the
parties as of the day first above written.
| BOSTON SCIENTIFIC CORPORATION | ||
| |
|
|
| By: | /s/ Xxxxxxxx X. Best | |
|
Name: Xxxxxxxx X. Best |
||
| Title: Executive Vice President and Chief Financial Officer | ||
| XXXXXX LABORATORIES | ||
| |
|
|
| By: | /s/ Xxxxxx X. Xxxxxxx | |
|
Name:
Xxxxxx
X. Xxxxxxx
|
||
| Title: Executive Vice President, Finance and Chief Financial Officer | ||
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