EXECUTION COPY
SUPPORT AGREEMENT
SUPPORT AGREEMENT, dated as of August 30, 1999, between Guidant
Corporation, an Indiana corporation ("Parent"), and the undersigned stockholders
of the Company, a Delaware corporation (the "Company") (the "Stockholders," each
a "Stockholder").
WHEREAS, as of the date hereof, each of the Stockholders owns (either
beneficially or of record) that amount of shares of common stock, par value
$0.001 per share, of the Company, including all associated preferred share
purchase rights ("Company Common Stock"), as set forth opposite such
Stockholder's name on Schedule A attached hereto (all such shares and any shares
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of Common Stock hereafter acquired by the Stockholder prior to the termination
of this Agreement being referred to herein as the "Shares");
WHEREAS, concurrently herewith, Parent, Clydesdale Acquisition Corp.,
a Delaware corporation ("Merger Sub") and the Company are entering into an
Agreement and Plan of Merger (as such Agreement may hereafter be amended from
time to time, the "Merger Agreement"), pursuant to which, upon the terms and
subject to the conditions thereof, Merger Sub will be merged with and into the
Company (the "Merger"), and the Surviving Corporation (as defined in the Merger
Agreement) will be a wholly owned subsidiary of Parent; and
WHEREAS, as a condition to the willingness of Parent to enter into the
Merger Agreement, Parent has requested that the Stockholders agree, and, in
order to induce Parent to enter into the Merger Agreement, the Stockholders have
agreed, to the terms and provisions hereof;
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties, covenants and agreements set forth herein and in
the Merger Agreement, the parties hereto, intending to be legally bound, hereby
agree as follows:
ARTICLE I
1.1 Voting of Shares. Subject to Section 1.1(c) hereof, and until the
termination of this Agreement in accordance with Section 4.12 hereof, each
Stockholder hereby agrees as follows:
(a) The Stockholder shall vote (or cause to be voted) the Shares
in favor of the Merger and the approval and adoption of the Merger Agreement at
any meeting of stockholders of the Company called to vote upon the Merger and
the Merger Agreement or at any adjournment thereof or in any other circumstances
upon which a vote, consent or other approval with respect to the Merger and the
Merger Agreement is sought (the "Special Meeting").
(b) The Stockholder, and any beneficiary of any trust for which
the Stockholder serves as trustee, shall not take any action to revoke or
terminate such trust or take any other action which would restrict, limit or
frustrate the Stockholder's right to vote the Shares, including on behalf of
such trust, in accordance with this Agreement. Each such beneficiary hereby
acknowledges and agrees to be bound by the terms of this Agreement applicable to
it.
(c) Notwithstanding anything to the contrary contained herein,
the obligations of the Stockholders pursuant to Section 1(a) hereof with respect
to such matters to be considered at the Special Meeting are subject to the
following conditions:
(i) Parent and Merger Sub shall have performed in all
material respects all obligations under the Merger Agreement required to be
performed by them on or prior to the date of such Special Meeting; and
(ii) the Form S-4 (as defined in the Merger Agreement) to be
filed with the Securities and Exchange Commission (the "Commission") by Parent
under the Securities Act of 1933, as amended (the "Act"), to register the common
shares, no par value, of Parent to be issued in the Merger shall have become
effective and shall be effective at the time of the Special Meeting, and no stop
order suspending effectiveness of the Form S-4 shall have been issued, no
action, suit, proceeding, or investigation by the Commission to suspend the
effectiveness thereof shall have been initiated and be continuing.
1.2 Grant of Irrevocable Proxy; Appointment of Proxy
(a) The Stockholder hereby irrevocably grants to, and appoints,
Parent and Xxxxx X. Xxxxxxxxx, Xxxxxx X. Xxxxxxx and X. X. Xxxx, in their
respective capacities as officers of Parent, and any individual who shall
hereafter succeed to any such office of Parent, and each of them individually,
the Stockholder's proxy and attorney-in-fact (with full power of substitution),
for and in the name, place and stead of the Stockholder, to vote the Shares, or
grant a consent or approval in respect of the Shares, in favor of adoption of
the Merger Agreement.
(b) The Stockholder represents that any proxies heretofore given
in respect of the Shares are not irrevocable, and that all such proxies are
hereby revoked. The Stockholder hereby affirms that the irrevocable proxy set
forth in this Section 1.2 is given in connection with the execution of the
Merger Agreement, and that such irrevocable proxy is given to secure the
performance of the duties of the Stockholder under this Agreement. The
Stockholder hereby further affirms that the irrevocable proxy is coupled with an
interest and may under no circumstances be revoked. The Stockholder hereby
ratifies and confirms all that such irrevocable proxy may lawfully do or cause
to be done by virtue hereof. Such irrevocable proxy is executed and intended to
be irrevocable in accordance with the provisions of Section 212(e) of the
Delaware General Corporation Law.
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1.3 Restrictions on Transfer and Conversion
(a) Until the close of business on the date of the Special
Meeting, the Stockholder will not (i) sell, assign, transfer, pledge or
otherwise dispose of any of its Shares, (ii) deposit its Shares into a voting
trust or enter into a voting agreement or arrangement with respect to such
Shares or grant any proxy with respect thereto, or (iii) enter into any
contract, option or other arrangement or undertaking with respect to the direct
or indirect acquisition or sale, assignment, transfer or other disposition of
any Shares.
(b) If, at the time the Merger Agreement is submitted for
approval to the stockholders of the Company, the Stockholder is an Affiliate (as
defined in the Merger Agreement), the Stockholder shall deliver to Parent, prior
to the Closing Date (as defined in the Merger Agreement) an Affiliate Letter in
the form attached as Exhibit A to the Merger Agreement.
(c) The Stockholder agrees to tender to the Company, within 10
business days after the date hereof (or, in the event the Shares are acquired
subsequent to the date hereof within 10 business days after the date of such
acquisition), any and all certificates representing the Shares in order that
Merger Sub may inscribe upon such certificates the following legend: THE SHARES
OF COMMON STOCK, PAR VALUE $0.001 PER SHARE, OF THE COMPANY REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO A SUPPORT AGREEMENT DATED AS OF AUGUST 30, 1999, AND
ARE SUBJECT TO THE TERMS THEREOF. COPIES OF SUCH AGREEMENT MAY BE OBTAINED AT
THE PRINCIPAL EXECUTIVE OFFICES OF THE COMPANY.
ARTICLE II
Each Stockholder represents and warrants to Parent as follows:
2.1 Authority. The Stockholder has all requisite power and authority
to enter into this Agreement and to consummate the transactions contemplated
hereby. This Agreement has been duly authorized, executed and delivered by the
Stockholder and constitutes a valid and binding obligation of the Stockholder
enforceable against the Stockholder in accordance with its terms. If the
Stockholder is a natural person and is married, and the Shares constitute
community property or otherwise require spousal or other approval for this
Agreement to be legal, valid and binding, this Agreement has been duly
authorized, executed and delivered by, and constitutes a valid and binding
agreement of, the Stockholder's spouse, enforceable against such spouse in
accordance with its terms. No trust of which the Stockholder is a trustee
requires the consent of any beneficiary to the execution and delivery of this
Agreement or to the consummation of the transactions contemplated hereby.
2.2 The Shares. The Stockholder is the record and beneficial owner of
or is trustee of a trust that is the record holder of, and whose beneficiaries
are the beneficial owners of, and has good and marketable title to, the Shares,
free and clear of
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any liens, claims, encumbrances or security interests whatsoever. The
Stockholder does not own, of record or beneficially, any shares of capital stock
of the Company other than as set forth on Schedule A. The Stockholder has the
sole right to vote the Shares, and none of such Shares is subject to any voting
trust or other agreement, arrangement or restriction with respect to the voting
of such Shares, except as contemplated by this Agreement.
2.3 No Violation. Neither the execution and delivery by the
Stockholder of this Agreement nor the consummation by the Stockholder of the
transactions contemplated hereby in accordance with the terms hereof, will: (i)
conflict with, or result in a breach of any provision of the Certificate of
Incorporation or Bylaws (or other comparable organizational documents, if any)
of the Stockholder, if applicable; (ii) violate, conflict with, result in a
breach of any provision of, constitute a default (or an event which, with notice
or lapse of time or both, would constitute a default) under, any trust
agreement, loan or credit agreement, bond, note, mortgage, indenture, lease or
other contract, agreement, obligation, commitment, arrangement, understanding,
instrument, permit, concession, franchise, license, statute, law, ordinance,
rule, regulation, judgment, order, notice or decree, applicable to the
Stockholder or to the Stockholder's property or assets, including the Shares;
(iii) other than the expiration or termination of the waiting periods under the
HSR Act (as defined in the Merger Agreement) and informational filings with the
SEC, require any filing with, or permit, authorization, consent or approval of,
any Federal, state or local government or any court, tribunal, administrative
agency or commission or other governmental and regulatory authority or agency,
domestic or foreign, or (iv) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to the Stockholder or any of the
Stockholder's properties or assets, including the Shares.
ARTICLE III
3.1 No Solicitation. Prior to the Effective Time (as defined in the
Merger Agreement), (a) no Stockholder in its capacity as a stockholder of the
Company shall, or shall permit any of its agents and representatives (including,
without limitation, any investment banker, attorney or accountant retained by
it) to, initiate, solicit or encourage directly or indirectly, any inquiries or
the making or implementation of any proposal or offer (including, without
limitation, any proposal or offer to the Company's stockholders) with respect to
an Alternative Proposal (as defined in the Merger Agreement) or with respect to
any tender offer for or solicitation of proxies with respect to any shares of
Company Common Stock, or engage in any negotiations concerning, or provide any
confidential information or data to, or have any discussions with, any person
relating to an Alternative Proposal or relating to any tender offer for or
solicitation of proxies with respect to any shares of Company Common Stock, or
otherwise facilitate any effort or attempt to make or implement an Alternative
Proposal or any tender offer for or solicitation of proxies with respect to any
shares of Company Common Stock and (b) each Stockholder will notify Parent
immediately in writing if any such inquiries or proposals are received by, any
such information is requested from, or any such negotiations or discussions are
sought to be initiated or continued with, it in its capacity as a stockholder of
the Company.
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ARTICLE IV
4.1 Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made as of the date delivered, mailed or transmitted, and shall be effective
upon receipt, if delivered personally, mailed by registered or certified mail
(postage prepaid, return receipt requested) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
changes of address) or sent by electronic transmission to the telecopier number
specified below:
If to Parent:
Guidant Corporation
000 Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000-0000
Attention: General Counsel
Telecopy: (000) 000-0000
with a copy to:
Xxxxx Xxxxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxx X. Xxxx, Esq.
Xxxxxxxx X. Xxxxxxxx, Esq.
Telecopy: (000) 000-0000
If to the Stockholders, to the address indicated on Schedule A
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attached hereto for each respective Stockholder.
with a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Attention: J. Xxxxx XxXxxxx
Xxxxxxxxxxx X. Xxxxxx
Telecopy: (000) 000-0000
4.2 Certain Events. Each Stockholder agrees that this Agreement and
the obligations hereunder shall attach to the Shares and shall be binding upon
any person or entity to which legal or beneficial ownership of such Shares shall
pass, whether by operation of law or otherwise, including such Stockholder's
heirs, guardians, administrators or successors. In the event of any stock split,
stock dividend, merger, reorganization, recapitalization or other change in the
capital structure of the Company affecting the Company Common Stock, or the
acquisition of additional shares of Company Common Stock or other voting
securities of the Company by any Stockholder, the number of Shares listed herein
shall be adjusted appropriately and this Agreement and
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the obligations hereunder shall attach to any additional shares of Company
Common Stock or other voting securities of the Company issued to or acquired by
such Stockholder.
4.3 Assignment; Binding Effect. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties, except that Parent may assign its rights
hereunder to any of its direct or indirect wholly-owned subsidiaries, including
Merger Sub. Subject to the preceding sentence, this Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns. Nothing in this Agreement, expressed or implied, is
intended to confer on any person other than the parties hereto or their
respective heirs, successors, executors, administrators and assigns any rights,
remedies, obligations or liabilities under or by reason of this Agreement.
4.4 Entire Agreement. This Agreement constitutes the entire agreement
of the parties and supersedes all prior agreements and undertakings, both
written and oral, between the parties, or any of them, with respect to the
subject matter hereof.
4.5 Amendments. This Agreement may not be amended except by an
instrument in writing signed by each of the parties hereto.
4.6 Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Delaware, without giving effect to
principles of conflicts of laws.
4.7 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 court of the United States
having jurisdiction, 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 waives
to the fullest extent permitted by applicable law any right to trial by jury
with respect to any claim or proceeding related to or arising out of this
Agreement or any of the transactions contemplated hereby. If Parent should
institute an action or proceeding seeking specific enforcement of the provisions
hereof, then each Stockholder hereby waives the claim or defense that Parent has
an adequate remedy at law and hereby agrees not to assert in any such action or
proceeding the claim or defense that such a remedy at law exists. Each
Stockholder further agrees to waive any requirements for the securing or posting
of any bond in connection with obtaining any such equitable relief.
4.8 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated
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hereby is not affected in any manner materially adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible 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.
4.9 Public Announcements. Except as required by law, no Stockholder
shall issue any press release or other public statement with respect to the
transactions contemplated by this Agreement and the Merger Agreement without the
prior written consent of Parent.
4.10 Headings. The headings contained in this Agreement are for
reference only and shall not affect in any way the meaning or interpretation of
this Agreement.
4.11 Counterparts. This Agreement may be executed 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.
4.12 Termination. This Agreement shall terminate automatically
immediately following the earlier of (i) termination of the Merger Agreement and
(ii) the closing of the Merger.
4.13 Stockholder Capacity. As of the date of this Agreement, certain
of the Stockholders are directors of the Company. None of the Stockholders makes
any agreement or understanding herein in his or her capacity as a director or
officer of the Company. Each Stockholder signs solely in his or her capacity as
the record holder and beneficial owner of, or the trustee of a trust whose
beneficiaries are the beneficial owners of, such Stockholder's securities and
nothing herein shall limit or affect any actions taken by a Stockholder in his
or her capacity as an officer or director of the Company to the extent
specifically permitted by the Merger Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
GUIDANT CORPORATION
/s/ Xxxxxx X. Xxxxxxx
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By: Xxxxxx X. Xxxxxxx
Title: President and Chief Executive officer
/s/ Xxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
[SIGNATURE PAGE TO SUPPORT AGREEMENT]
Schedule A
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Stockholder Shares Owned
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Xxxxxxx X. Xxxxxxx 965,041
Xxxxxxx X. Xxxxxx 954,818
