Exhibit 99.5
AGREEMENT AND PLAN OF MERGER
by and among:
INVERNESS MEDICAL INNOVATIONS, INC.,
a Delaware corporation;
INCA ACQUISITION, INC.,
a Delaware corporation; and
BIOSITE INCORPORATED,
a Delaware corporation
Dated as of _______, __, 2007
TABLE OF CONTENTS
PAGE
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SECTION 1. THE MERGER; CLOSING; EFFECTIVE TIME........................... 2
1.1. Merger of the Merger Sub into Company........................... 2
1.2. Effect of the Merger............................................ 2
1.3. Effective Time.................................................. 2
1.4. Certificate of Incorporation and Bylaws; Officers and
Directors....................................................... 2
SECTION 2. EFFECT OF THE MERGER ON CAPITAL STOCK; EXCHANGE OF
CERTIFICATES.................................................. 3
2.1. Conversion of Company Shares.................................... 3
2.2. Closing of the Company's Transfer Books......................... 3
2.3. Payment for Company Shares...................................... 4
2.4. Appraisal Rights................................................ 5
2.5. Further Action.................................................. 6
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY................. 6
3.1. Due Organization and Good Standing; Subsidiaries................ 6
3.2. Authority; Binding Nature of Agreement.......................... 7
3.3. Non-Contravention; Consents..................................... 7
3.4. Certificate of Incorporation; Bylaws............................ 8
3.5. Capitalization.................................................. 8
3.6. SEC Filings; Financial Statements............................... 9
3.7. Information Supplied............................................ 11
3.8. Internal Controls; Xxxxxxxx-Xxxxx Act........................... 11
3.9. Absence of Certain Changes...................................... 13
3.10. Title to Assets; Real Property.................................. 13
3.11. Intellectual Property Rights.................................... 15
3.12. Contracts....................................................... 18
3.13. Compliance with Legal Requirements.............................. 20
3.14. Foreign Corrupt Practices and International Trade Sanctions..... 20
3.15. Governmental Authorizations..................................... 21
3.16. Legal Proceedings; Orders. As of the date of this Agreement:.... 21
3.17. Regulatory Matters.............................................. 22
3.18. Product Recalls................................................. 24
3.19. Tax Matters..................................................... 25
3.20. Employee Benefit Plans.......................................... 27
3.21. Labor Matters................................................... 30
3.22. Environmental Matters........................................... 31
3.23. Insurance....................................................... 32
3.24. Transactions with Affiliates.................................... 32
3.25. Company Requisite Vote.......................................... 32
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3.26. Section 203 of the DGCL; Company Rights Agreement............... 33
3.27. Opinion of Financial Advisor.................................... 33
3.28. Brokers......................................................... 33
3.29. Xxxxxxx Merger Agreement........................................ 33
SECTION 4. REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB....... 33
4.1. Due Organization................................................ 34
4.2. Authority; Binding Nature of Agreement.......................... 34
4.3. Non-Contravention; Consents..................................... 34
4.4. Not an Interested Stockholder................................... 35
4.5. Financing....................................................... 35
4.6. Information in Proxy Statement.................................. 35
4.7. Ownership of Company Shares..................................... 36
SECTION 5. COVENANTS..................................................... 36
5.1. Interim Operations of the Company............................... 36
5.2. No Solicitation................................................. 41
5.3. Board Recommendation............................................ 43
5.4. Meeting of the Company's Stockholders........................... 45
5.5. Filings; Other Action........................................... 46
5.6. Access.......................................................... 47
5.7. Interim Operations of Merger Sub................................ 48
5.8. Publicity....................................................... 48
5.9. Stock Options/ESPP.............................................. 48
5.10. Other Employee Benefits......................................... 50
5.11. Indemnification; Directors' and Officers' Insurance............. 52
5.12. Section 16 Matters.............................................. 53
5.13. Termination of Certain Company Plans............................ 53
5.14. Financing....................................................... 53
5.15. Tax Matters..................................................... 54
5.16. Inverness Payment............................................... 55
SECTION 6. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER.... 55
6.2. Conditions to Obligations of Parent and Merger Sub:............. 56
6.3. Conditions and Obligations of the Company....................... 56
SECTION 7. TERMINATION................................................... 57
7.1. Termination..................................................... 57
7.2. Effect of Termination........................................... 59
7.3. Termination Fee................................................. 59
SECTION 8. MISCELLANEOUS PROVISIONS...................................... 60
8.1. Amendment....................................................... 60
8.2. Waiver.......................................................... 60
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8.3. No Survival of Representations and Warranties................... 61
8.4. Entire Agreement; Counterparts.................................. 61
8.5. Applicable Law; Jurisdiction; Waiver of Jury Trial.............. 61
8.6. Payment of Expenses............................................. 62
8.7. Assignability; No Third Party Rights............................ 62
8.8. Notices......................................................... 63
8.9. Severability.................................................... 64
8.10. Obligation of Parent............................................ 64
8.11. Specific Performance............................................ 64
8.12. Cumulative Remedies............................................. 64
8.13. Representation by Counsel....................................... 64
8.14. Construction.................................................... 65
Schedule A Products Under Development
Exhibit A Certain Definitions
Exhibit B Certificate of Incorporation of Surviving Corporation
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER ("Agreement") is made and entered into as
of _______ __, 2007, by and among INVERNESS MEDICAL INNOVATIONS, INC., a
Delaware corporation ("Parent"); INCA ACQUISITION, INC., a Delaware corporation
and a wholly-owned Subsidiary of Parent ("Merger Sub"); and BIOSITE
INCORPORATED, a Delaware corporation (the "Company"). Certain capitalized terms
used in this Agreement are defined in Exhibit A.
RECITALS
WHEREAS, the board of directors of each of Parent, Merger Sub and the
Company has approved the acquisition of the Company by Parent on the terms and
conditions set forth in this Agreement;
WHEREAS, pursuant to the merger of Merger Sub with and into the Company
(the "Merger") each Company Share that is issued and outstanding immediately
prior to the Effective Time (other than Company Shares held in the treasury of
the Company or owned by Parent, Merger Sub or any direct or indirect
wholly-owned Subsidiary of Parent or the Company immediately prior to the
Effective Time, which will be canceled with no consideration issued in exchange
therefor, and other than Appraisal Shares) will be canceled and converted solely
into the right to receive $90 in cash per Company Share (the "Merger
Consideration"), without interest, all upon the terms and conditions set forth
herein;
WHEREAS, contemporaneously with the execution and delivery of this
Agreement, Parent and Merger Sub have entered into Non-competition,
Non-disclosure and Intellectual Property Assignment Agreements, dated as of the
date hereof, with certain employees of the Company;
WHEREAS, the Company Board has, on the terms and subject to the conditions
set forth herein, unanimously and duly adopted resolutions (i) determining that
the transactions contemplated by this Agreement are advisable and fair to, and
in the best interests of, the Company and its stockholders, (ii) adopting and
approving this Agreement and the transactions contemplated hereby, including the
Merger, in accordance with Delaware General Corporation Law (the "DGCL"), (iii)
resolving to recommend adoption of this Agreement to the holders of the Company
Shares (the "Company Recommendation"), and directing that this Agreement be
submitted to the holders of Company Shares for their adoption;
WHEREAS, the board of directors of Parent and Merger Sub have, on the terms
and subject to the conditions set forth herein, unanimously approved and
declared advisable this Agreement and the transactions contemplated hereby,
including the Merger, and Parent, in its capacity as the sole stockholder of
Merger Sub, has agreed to adopt the "agreement of merger" set forth in this
Agreement, in each case, in accordance with the DGCL; and
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby,
Parent, Merger Sub and the Company hereby agree as follows:
SECTION 1. THE MERGER; CLOSING; EFFECTIVE TIME
1.1. MERGER OF THE MERGER SUB INTO COMPANY. Upon the terms and subject to
the conditions set forth in this Agreement and in accordance with the DGCL, at
the Effective Time (as defined in Section 1.3), Merger Sub shall be merged with
and into the Company, and the separate existence of Merger Sub shall cease. The
Company will continue as the surviving corporation in the Merger (the "Surviving
Corporation").
1.2. EFFECT OF THE MERGER. The Merger shall have the effects set forth in
this Agreement and in the applicable provisions of the DGCL. Without limiting
the generality of the foregoing and subject thereto, at the Effective Time, all
the property rights, privileges, immunities, powers and franchises of the
Company and Merger Sub shall vest in the Surviving Corporation and all debts,
liabilities and duties of the Company and Merger Sub shall become the debts,
liabilities and duties of the Surviving Corporation.
1.3. EFFECTIVE TIME. As soon as practicable after the satisfaction or
waiver of the conditions set forth in Section 6, the parties hereto shall cause
a properly executed certificate of merger conforming to the requirements of the
DGCL (the "Certificate of Merger") to be filed with the Secretary of State of
the State of Delaware. The Merger shall become effective at the time the
Certificate of Merger is filed with the Secretary of State of the State of
Delaware, or at such later time as is agreed to by the parties hereto and
specified in the Certificate of Merger (the time at which the Merger becomes
effective being referred to in this Agreement as the "Effective Time"). At 10:00
a.m. (Eastern Daylight Time) on the date on which the Certificate of Merger is
to be so filed (the "Closing Date"), a closing, (the "Closing") shall be held at
the offices of Xxxxxxx Procter LLP, Exchange Place, 00 Xxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000 (or such other place or time as Parent and the Company may
jointly designate).
1.4. CERTIFICATE OF INCORPORATION AND BYLAWS; OFFICERS AND DIRECTORS.
Unless otherwise jointly determined by Parent and the Company prior to the
Effective Time:
(A) the certificate of incorporation of the Surviving Corporation
shall be amended and restated as of the Effective Time to conform to Exhibit B;
(B) subject to Section 5.11(a), the bylaws of the Surviving
Corporation shall be amended and restated as of the Effective Time to conform to
the bylaws of Merger Sub as in effect immediately prior to the Effective Time;
(C) the directors of the Surviving Corporation immediately after the
Effective Time shall be the respective individuals who are directors of Merger
Sub immediately prior to the Effective Time; and
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(D) the officers of the Surviving Corporation immediately after the
Effective Time shall be the respective individuals who are officers of Merger
Sub immediately prior to the Effective Time.
SECTION 2. EFFECT OF THE MERGER ON CAPITAL STOCK; EXCHANGE OF CERTIFICATES
2.1. CONVERSION OF COMPANY SHARES.
(A) Subject to Section 2.4, at the Effective Time, by virtue of the
Merger and without any further action on the part of Parent, Merger Sub, the
Company or any stockholder of the Company:
(i) any Company Shares then held by the Company or any wholly
owned Subsidiary of the Company (or held in the Company's treasury) shall
cease to exist, and no consideration shall be paid in exchange therefor;
(ii) any Company Shares then held by Parent, Merger Sub or any
other wholly owned Subsidiary of Parent shall cease to exist, and no
consideration shall be paid in exchange therefor;
(iii) except as provided in clauses "(i)" and "(ii)" above, each
Company Share then outstanding (including any outstanding Company Shares
subject to any repurchase rights in favor of the Company, but excluding any
Appraisal Shares), shall be converted into the right to receive the Merger
Consideration, without interest; and
(iv) each share of common stock, par value $0.001 per share, of
Merger Sub then outstanding shall be converted into one share of the common
stock of the Surviving Corporation.
(B) The Merger Consideration shall be adjusted to the extent
appropriate to reflect the effect of any stock split, division or subdivision of
shares, stock dividend, reverse stock split, consolidation of shares,
reclassification, recapitalization or other similar transaction with respect to
Company Shares occurring or having a record date on or after the date of this
Agreement and prior to the Effective Time.
2.2. CLOSING OF THE COMPANY'S TRANSFER BOOKS. At the Effective Time: (a)
all Company Shares outstanding immediately prior to the Effective Time shall
cease to exist as provided in Section 2.1 and all holders of certificates
representing Company Shares that were outstanding immediately prior to the
Effective Time shall cease to have any rights as stockholders of the Company;
and (b) the stock transfer books of the Company shall be closed with respect to
all Company Shares outstanding immediately prior to the Effective Time. No
further transfer of any such Company Shares shall be made on such stock transfer
books after the Effective Time. If, after the Effective Time, a valid
certificate previously representing any of such Company Shares (a "Company Stock
Certificate") is presented to the Payment Agent (as defined in Section 2.3(a))
or to
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the Surviving Corporation or Parent, such Company Stock Certificate shall be
canceled and shall be exchanged as provided in Section 2.3.
2.3. PAYMENT FOR COMPANY SHARES.
(A) Prior to the Effective Time (i) Parent shall select a bank or
trust company (reasonably acceptable to the Company) to act as payment agent
with respect to the payment of the Merger Consideration (the "Payment Agent")
and (ii) Parent shall cause to be made available to the Payment Agent cash
amounts sufficient to enable the Payment Agent to make payments pursuant to
Section 2.1 to holders of Company Shares outstanding immediately prior to the
Effective Time.
(B) Promptly after the Effective Time, Parent shall cause the Payment
Agent to mail to each Person who was, immediately prior to the Effective Time, a
holder of record of Company Shares described in Section 2.1 (a)(iii) a form of
letter of transmittal (reasonably acceptable to the Company) and instructions
for use in effecting the surrender of Company Stock Certificates representing
such Company Shares in exchange for payment therefor. Parent shall ensure that,
upon surrender to the Payment Agent of each such Company Stock Certificate,
together with a properly executed letter of transmittal, the holder of such
Company Stock Certificate (or, under the circumstances described in Section
2.3(e), the transferee of the Company Shares represented by such Company Stock
Certificate) shall promptly receive in exchange therefor the consideration to
which such holder (or transferee) is entitled pursuant to Section 2.1 (a)(iii).
(C) On or after the first anniversary of the Effective Time, Parent or
the Surviving Corporation shall be entitled to cause the Payment Agent to
deliver to Parent or the Surviving Corporation any funds made available by
Parent to the Payment Agent which have not been disbursed to holders of Company
Stock Certificates, and thereafter such holders shall be entitled to look only
to Parent and the Surviving Corporation with respect to the consideration
payable and issuable upon surrender of their Company Stock Certificates. Neither
the Payment Agent, Parent nor the Surviving Corporation shall be liable to any
holder of a Company Stock Certificate for any amount properly paid to a public
official pursuant to any applicable abandoned property or escheat law. If any
Company Stock Certificates shall not have been surrendered before the third
anniversary of the Effective Time (or immediately prior to such earlier date on
which any Merger Consideration payable in respect of such Company Stock
Certificates would otherwise escheat to or become the property of any
Governmental Entity), any such Merger Consideration in respect thereof shall, to
the extent permitted by applicable Legal Requirements, become the property of
Parent, free and clear of all claims or interest of any Person previously
entitled thereto.
(D) If any Company Stock Certificate shall have been lost, stolen or
destroyed, then, upon the making of an affidavit of that fact by the Person
claiming such Company Stock Certificate to be lost, stolen or destroyed in a
form reasonably satisfactory to Parent (together with an indemnity in form
reasonably satisfactory to Parent against any claim that may be made against the
Payment Agent or Parent or otherwise with respect to such certificate and, if
required by Parent, the posting by such
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Person of a bond in such reasonable amount as Parent may direct to support such
indemnity), Parent shall cause the Payment Agent to pay in exchange for such
lost, stolen or destroyed Company Stock Certificate the consideration payable
and issuable in respect thereof pursuant to this Agreement.
(E) In the event of a transfer of ownership of Company Shares which is
not registered in the transfer records of the Company, the consideration may be
paid and issued with respect to such Company Shares to a transferee of such
Company Shares if the Company Stock Certificate representing such Company Shares
is presented to the Payment Agent, accompanied by all documents reasonably
required by the Payment Agent to evidence and effect such transfer and to
evidence that any applicable stock transfer taxes relating to such transfer have
been paid.
(F) The Surviving Corporation or Parent shall bear and pay all charges
and expenses, including those of the Payment Agent, incurred in connection with
the exchange of the Company Shares.
(G) Parent, the Surviving Corporation and the Payment Agent shall be
entitled to deduct and withhold from the consideration otherwise payable
pursuant to the Merger or this Agreement to any holder of Company Shares or
Company Options that are to be cancelled and terminated in exchange for a cash
payment pursuant to Section 5.9(b) hereof, such amounts as Parent, the Surviving
Corporation or the Payment Agent are required to deduct and withhold under the
Code, or any Legal Requirement, with respect to the making of such payment. To
the extent that amounts are so withheld by Parent, the Surviving Corporation or
the Payment Agent, such withheld amounts shall be treated for all purposes of
this Agreement as having been paid to the holder of Company Shares or Company
Options in respect of whom such deduction and withholding was made by Parent,
the Surviving Corporation or the Payment Agent.
2.4. APPRAISAL RIGHTS.
(A) Notwithstanding anything to the contrary contained in this
Agreement, any Company Shares that constitute Appraisal Shares shall not be
converted into or represent the right to receive payment in accordance with
Section 2.1, and each holder of Appraisal Shares shall be entitled only to such
rights with respect to such Appraisal Shares as may be granted to such holder
pursuant to Section 262 of the DGCL. From and after the Effective Time, a holder
of Appraisal Shares shall not have and shall not be entitled to exercise any of
the voting rights or other rights of a stockholder of the Surviving Corporation.
(B) The Company: (i) shall give Parent prompt written notice of any
demand by any stockholder of the Company for appraisal of such stockholder's
Company Shares pursuant to Section 262 of the DGCL; and (ii) shall give Parent
the opportunity to participate in all negotiations and proceedings with respect
to any such demand. Except with the prior written consent of Parent (which
consent may be withheld in the sole and absolute discretion of Parent) or as may
otherwise be required by applicable Legal
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Requirements, the Company shall not make any payment with respect to, or settle
or offer to settle, any such demands.
(C) For purposes of this Agreement, "Appraisal Shares" shall refer to
any Company Shares outstanding immediately prior to the Effective Time that are
held by stockholders who have preserved their appraisal rights under Section 262
of the DGCL with respect to such Company Shares. If any holder of Appraisal
Shares shall fail to perfect or shall otherwise lose such holder's right of
appraisal under Section 262 of the DGCL, then: (i) any right of such holder with
respect to such Company Shares as may be granted to such holder pursuant to
Section 262 of the DGCL shall be extinguished; and (ii) such shares shall
automatically be converted into and shall represent only the right to receive
(upon the surrender of the Company Stock Certificate(s) representing such
shares) payment for such shares in accordance with Section 2.1.
2.5. FURTHER ACTION. If, at any time after the Effective Time, any further
action is necessary to carry out the purposes of this Agreement, the officers
and directors of the Surviving Corporation and Parent shall be authorized (in
the name of Merger Sub, in the name of the Company or otherwise) to take such
action.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Merger Sub that, except
as set forth in the disclosure schedule delivered to Parent on the date of this
Agreement (the "Company Disclosure Schedule"):
3.1. DUE ORGANIZATION AND GOOD STANDING; SUBSIDIARIES.
(A) Each of the Company and the Company Subsidiaries is a corporation
duly organized, validly existing and (where such concept is recognized under the
laws of the jurisdiction in which it is incorporated) in good standing under the
laws of the jurisdiction in which it is incorporated, and has all requisite
corporate power and authority necessary to own, lease and operate its properties
and to carry on its business as it is now being conducted. The Company and each
of the Company Subsidiaries is duly qualified or licensed to do business and is
in good standing in each state in which the nature of the business conducted by
it makes such qualification or license necessary, except where the failure to be
so qualified does not have a Company Material Adverse Effect.
(B) Part 3.1 of the Company Disclosure Schedule lists all Company
Subsidiaries in existence as of the date of this Agreement, together with the
jurisdiction of organization of each such Subsidiary and, if the Company,
together with the Company Subsidiaries, does not own all of the outstanding
equity interests of such Company Subsidiary, the percentage of equity interests
of such Company Subsidiary owned by the Company and the Company Subsidiaries.
All the outstanding shares of capital stock and other equity interests of each
Company Subsidiary have been duly authorized and validly issued, are fully paid
and nonassessable are not subject to any purchase option, call option, right of
first refusal, preemptive right, subscription right or any similar right
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entitling the holders thereof to acquire shares of capital stock or other equity
interests from such Company Subsidiary under any provision of the Legal
Requirements pursuant to which such Company Subsidiary is formed, such Company
Subsidiary's organizational documents or any Contract to which such Company
Subsidiary is a party or is otherwise bound, and are owned directly or
indirectly by the Company free and clear of all liens, pledges or Encumbrances,
except for Permitted Encumbrances. Except for the capital stock of, or other
equity interests in, the Company Subsidiaries, and except for marketable
securities held from time to time by the Company in connection with its normal
cash management activities, the Company does not own, directly or indirectly,
any capital stock of, or other equity or voting interests in, any Person.
3.2. AUTHORITY; BINDING NATURE OF AGREEMENT. The Company has the requisite
corporate power and authority to enter into and to perform its obligations under
this Agreement, subject only to the Company Requisite Vote. The Company Board,
at a meeting duly called and held, has unanimously: (a) determined that this
Agreement, the Merger and the other transactions contemplated by this Agreement
are fair to, and in the best interests of, the Company's stockholders; (b) duly
and validly authorized and approved the execution, delivery and performance of
this Agreement by the Company; (c) declared that this Agreement is advisable;
and (d) resolved to make the Company Recommendation, and directed that this
Agreement be submitted to the holders of Company Shares for their adoption. The
execution and delivery of this Agreement by the Company and the consummation by
the Company of the Merger have been duly authorized by all necessary corporate
action on the part of the Company, and no other corporate proceedings on the
part of the Company are necessary to authorize this Agreement other than, with
respect to the adoption of this Agreement and the Merger, the Company Requisite
Vote and the filing of the appropriate merger documents as required by the DGCL.
This Agreement has been duly executed and delivered on behalf of the Company
and, assuming the due authorization, execution and delivery of this Agreement by
Parent and Merger Sub, constitutes the valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, subject
to (i) laws of general application relating to bankruptcy, insolvency and the
relief of debtors, and (ii) rules of law governing specific performance,
injunctive relief and other equitable remedies.
3.3. NON-CONTRAVENTION; CONSENTS. Except as set forth on Part 3.3 of the
Company Disclosure Schedule, the execution and delivery of this Agreement by the
Company and the consummation by the Company of the Merger and the other
transactions contemplated by this Agreement will not: (a) cause a violation of
any of the provisions of the certificate of incorporation or bylaws of the
Company or any of the equivalent organizational documents of the Company
Subsidiaries; (b) cause a violation by the Company or any of the Company
Subsidiaries of any Legal Requirement applicable to the business of the Company
or any of the Company Subsidiaries; or (c) result in a modification, violation
or breach of, or constitute (with or without notice or lapse of time or both) a
default (or give rise to any right, including any right of termination,
amendment, cancellation or acceleration) under, any of the terms, conditions or
provisions of any Contract to which the Company or any Company Subsidiary is a
party or by which its properties or assets are otherwise bound; except in the
case of
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clauses (b) and (c) does not result in a Company Material Adverse Effect. Except
as may be required by the Exchange Act, the DGCL, the HSR Act or the antitrust
or competition laws of foreign jurisdictions, the Company is not required to
make any filing with, or to obtain any consent from, any Person in connection
with the execution and delivery of this Agreement by the Company or the
consummation by the Company of the Merger, except where the failure to make any
such filing or obtain any such consent does not result in a Company Material
Adverse Effect.
3.4. CERTIFICATE OF INCORPORATION; BYLAWS. The Company has delivered or
made available to Parent complete and correct copies of the certificate of
incorporation and bylaws of the Company, including all amendments thereto. The
Company is not in violation of its certificate of incorporation or bylaws.
3.5. CAPITALIZATION.
(A) The authorized capital stock of the Company consists of 60,000,000
Company Shares and 5,000,000 shares of preferred stock, par value $0.01 per
share ("Preferred Shares"), of which 25,000 shares have been designated Series A
Participating Preferred Stock and reserved for issuance in connection with the
Company Rights. As of April 23, 2007: (i) 16,467,125 Company Shares were issued
and outstanding; (ii) no Preferred Shares were outstanding; (iii) no Company
Shares or Preferred Shares were issued and held in the treasury of the Company
or otherwise owned, directly or indirectly, by the Company, (iv) 4,136,673
Company Shares were reserved for future issuance pursuant to the Company Option
Plans, of which 3,815,390 Company Shares were subject to outstanding Company
Options; and (v) 404,853 Company Shares were reserved for future issuance
pursuant to the Company's Amended and Restated Employee Stock Purchase Plan (the
"Company ESPP"). The Company has delivered or made available to Parent complete
and correct copies of: (A) the Company Option Plans, which cover the stock
options granted by the Company that are outstanding as of the date of this
Agreement; and (B) the Company ESPP. The treatment of Company Options set forth
in Section 5.9 does not require the approval or consent of any holder of Company
Options and does not conflict with the terms of the Company Option Plans.
(B) All of the outstanding Company Shares are duly authorized, validly
issued, fully paid and nonassessable. No class of capital stock of the Company
or any Company Subsidiary is entitled to any purchase option, call option, right
of first refusal, preemptive right, subscription right or any similar right
entitling the holders thereof to acquire capital stock or other equity interests
from the Company under any provision of the DGCL, the Company's certificate of
incorporation, the Company's bylaws or any Contract to which the Company is a
party or is otherwise bound. All of the Company Shares that may be issued
pursuant to the Company Options or under the Company ESPP will be, when issued,
duly authorized, validly issued, fully paid and nonassessable and not subject to
any purchase option, call option, right of first refusal, preemptive right,
subscription right or any similar right entitling the holders thereof to acquire
capital stock or other equity interests from the Company under any provision of
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the DGCL, the Company's certificate of incorporation, the Company's bylaws or
any Contract to which the Company is a party or is otherwise bound.
(C) Part 3.5 of the Company Disclosure Schedule contains a true and
complete list, as of April 23, 2007, of all outstanding options to purchase
Company Shares, whether or not granted under the Company Option Plans, including
the date of grant, the number of Company Shares subject to each such option, the
exercise price per share, the maximum term of each such option and, where
applicable, the Company Option Plan under which such option was granted. All
outstanding Company Options are evidenced by stock option agreements. From April
23, 2007 until the date of this Agreement, the Company has not issued, or
reserved for issuance, any capital stock or any options, warrants or other
rights to acquire capital stock or other equity interests (or securities
convertible into or exercisable or exchangeable for capital stock or other
equity interests), other than the issuance of Company Shares pursuant to the
exercise of Company Options that were outstanding as of the close of business on
April 23, 2007.
(D) Except as set forth above in this Section 3.5 or in Part 3.5 of
the Company Disclosure Schedule, as of the date of this Agreement, there are not
any options, warrants, rights, convertible or exchangeable securities, "phantom"
stock rights, stock appreciation rights, stock-based performance units,
commitments, Contracts, arrangements or undertakings of any kind to which the
Company or any of the Company Subsidiaries is a party or by which any of them is
bound (i) obligating the Company or any of the Company Subsidiaries to issue,
deliver or sell, or cause to be issued, delivered or sold, equity interests in
the Company or any of the Company Subsidiaries, (ii) obligating the Company or
any of the Company Subsidiaries to issue, grant, extend or enter into any such
option, warrant, right, security, unit commitment, Contract, arrangement or
undertaking or (iii) that give any Person the right to receive any economic
benefit or right similar to or derived from the economic benefits and rights
occurring to holders of Company Shares. There are no outstanding obligations of
the Company or any of the Company Subsidiaries to repurchase, redeem or
otherwise acquire any shares of capital stock or other equity interests of the
Company or any of the Company Subsidiaries. There are no bonds, debentures,
notes or other Indebtedness of the Company or the Company Subsidiaries having
the right to vote (or convertible into, or exchangeable for, securities having
the right to vote) on any matters on which stockholders of the Company may vote.
(E) There are no voting trusts or other agreements or understandings
to which the Company or any Company Subsidiary is a party or of which, as of the
date of this Agreement, the Company has knowledge, with respect to the voting of
Company Shares or any capital stock of, or other equity interest of the Company
or any of the Company Subsidiaries.
3.6. SEC FILINGS; FINANCIAL STATEMENTS.
(A) The Company has filed or furnished (as required or permitted) all
forms, reports, schedules, proxy statements, registration statements and other
documents (including exhibits and other information incorporated therein)
required to be filed by the
9
Company with the SEC since January 1, 2003 (the "Company SEC Documents"). As of
the time it became effective (with respect to filings made under the Securities
Act) and as of the time it was filed with or furnished to the SEC (with respect
to filings made under the Exchange Act and, with respect to proxy statements, at
the time such proxy statement was mailed to stockholders of the Company) (or,
with respect to filings made under the Exchange Act and amended or superseded by
a filing prior to the date of this Agreement, then on the date of the filing or
furnishing of such amendment or, with respect to an amendment to a proxy
statement, on the date such amendment to the proxy statement was mailed to
stockholders of the Company, if applicable): (i) each of the Company SEC
Documents complied in all material respects with the applicable requirements of
the Securities Act or the Exchange Act (as the case may be); and (ii) the
Company SEC Documents did not (and with respect to Company SEC Documents filed
after the date of this Agreement, will not) contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The Company has made
available to Parent copies of all comment letters received by the Company from
the SEC since January 1, 2003, and relating to the Company SEC Documents,
together with all written responses of the Company thereto. As of the date of
this Agreement, to the Company's knowledge, there are no outstanding or
unresolved comments in such comment letters received by the Company from the
SEC. As of the date of this Agreement, to the knowledge of the Company none of
the SEC Documents is the subject of any ongoing review by the SEC. No Company
Subsidiary is, or has ever been, required to file any reports, schedules, proxy
statements, registration statements or other documents with the SEC.
(B) The financial statements (including any related notes) contained
in the Company SEC Documents fairly present, in all material respects, the
consolidated financial position of the Company and the Company Subsidiaries as
of the respective dates thereof and the consolidated results of operations of
the Company and the Company Subsidiaries for the periods covered thereby, have
been prepared in accordance with GAAP applied on a consistent basis throughout
the periods covered (except as may be indicated in the notes to such financial
statements or, in the case of unaudited statements, as permitted by Form 10-Q of
the SEC, and except that unaudited financial statements are subject to normal
year-end audit adjustments) and complied at the time they were filed as to form
in all material respects with the applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto at the time of
filing.
(C) Neither the Company nor any Company Subsidiary is a party to, or
has any commitment to become a party to, any joint venture, off-balance sheet
partnership or any similar Contract (including any Contract relating to any
transaction or relationship between or among the Company and any Company
Subsidiary, on the one hand, and any unconsolidated affiliate, including any
structured finance, special purpose or limited purpose Entity or Person, on the
other hand, or any "off-balance sheet arrangements" (as defined in Item 303(a)
of Regulation S-K of the SEC)), where the result, purpose or intended effect of
such Contract is to avoid disclosure of any material transaction involving, or
material liabilities of, the Company or any Company Subsidiary
10
in the Company's or any Company Subsidiary's published financial statements or
other Company SEC Documents.
(D) The independent registered public accounting firm engaged to
express its opinion with respect to the financial statements included in the
Company SEC Documents is, and has been throughout the periods covered thereby
"independent" within the meaning of Rule 2-01 of Regulation S-X. Ernst & Young,
LLP has not resigned or been dismissed as an independent public accountant of
the Company as a result of or in connection with any disagreement with the
Company on a matter of accounting principles or practices, financial statement
disclosure or auditing scope or procedure.
(E) Neither the Company nor any of the Company Subsidiaries (taken
together as a whole) has any material liabilities of any nature (whether
accrued, absolute, contingent determined or otherwise) required by GAAP to be
recognized or disclosed on a consolidated balance sheet of the Company or any
Company Subsidiary or in the notes thereto, except for: (i) liabilities
disclosed in the financial statements (including any related notes) contained in
the Company SEC Documents filed prior to the date of this Agreement; (ii) for
liabilities and obligations incurred under any Material Contract other than
liabilities or obligations due to breaches thereunder; and (iii) liabilities
incurred in the Ordinary Course of Business since December 31, 2006 that could
not reasonably be expected to, individually or in the aggregate, have a Company
Material Adverse Effect.
3.7. INFORMATION SUPPLIED. None of the information included or incorporated
by reference in the Proxy Statement will, at the date it is first mailed to the
Company's stockholders, at the time of the Special Meeting or at the time of any
amendment or supplement thereof, 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, warranty or
covenant is made by the Company with respect to statements made or incorporated
by reference therein based on written information supplied by Parent or Merger
Sub expressly for inclusion or incorporation by reference in the Proxy
Statement. The Proxy Statement will comply as to form in all material respects
with the requirements of the Exchange Act.
3.8. INTERNAL CONTROLS; XXXXXXXX-XXXXX ACT.
(A) The Company has designed and maintains a system of internal
control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of
the Exchange Act) sufficient to provide reasonable assurance regarding the
reliability of financial reporting. The Company (i) has designed and maintains
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
of the Exchange Act) to ensure that material information required to be
disclosed by the Company in the reports that it files or submits under the
Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the SEC's rules and forms and is accumulated and
communicated to the Company's management as appropriate to allow timely
decisions regarding required disclosure and (ii) has disclosed to the Company's
auditors and the audit committee of the Company Board (and made summaries of
such disclosures
11
available to Parent) (A) any significant deficiencies and material weaknesses in
the design or operation of internal control over financial reporting that are
reasonably likely to adversely affect in any material respect the Company's
ability to record, process, summarize and report financial information and (B)
any fraud, whether or not material, that involves management or other employees
who have a significant role in the Company's internal controls over financial
reporting. The Company is in compliance in all material respects with all
effective provisions of the Xxxxxxxx-Xxxxx Act.
(B) Each of the principal executive officer of the Company and the
principal financial officer of the Company (or each former principal executive
officer of the Company and each former principal financial officer of the
Company, as applicable) has made all certifications required by Rule 13a-14 or
15d-14 under the Exchange Act or Sections 302 and 906 of the Sarbanes Oxley Act
and the rules and regulations of the SEC promulgated thereunder with respect to
the Company SEC Documents, and the statements contained in such certifications
are true and correct. For purposes of this Section 3.8(b), "principal executive
officer" and "principal financial officer" shall have the meanings given to such
terms in the Xxxxxxxx-Xxxxx Act. Neither the Company nor any Company Subsidiary
has outstanding, or has arranged any outstanding, "extensions of credit" to
directors or executive officers within the meaning of Section 402 of the
Sarbanes Oxley-Act.
(C) Neither the Company nor any of the Company Subsidiaries nor, to
the Company's knowledge, any director, officer, auditor, accountant, consultant
or representative of the Company or any of the Company Subsidiaries has received
or otherwise had or obtained knowledge of any substantive and material
complaint, allegation, assertion or claim, whether written or oral, that the
Company or any of the Company Subsidiaries has engaged in questionable
accounting or auditing practices. No current or former attorney representing the
Company or any of the Company Subsidiaries has reported evidence of a material
violation of securities laws, breach of fiduciary duty or similar violation by
the Company or any of its officers, directors, employees or agents to the
current Company Board or any committee thereof or to any current director or
executive officer of the Company.
(D) To the Company's knowledge, no employee of the Company or any of
the Company's Subsidiaries has provided information to any law enforcement
agency regarding the commission or possible commission of any crime or the
violation or possible violation of any applicable Legal Requirements described
in Section 806 of the Xxxxxxxx-Xxxxx Act by the Company or any of the Company
Subsidiaries. Neither the Company nor any of the Company's Subsidiaries nor, to
the knowledge of the Company, any director, officer, employee, contractor,
subcontractor or agent of the Company or any such Subsidiary has discharged,
demoted, suspended, threatened, harassed or in any other manner discriminated
against an employee of the Company or any of the Company's Subsidiaries in the
terms and conditions of employment because of any lawful act of such employee
described in Section 806 of the Xxxxxxxx-Xxxxx Act.
12
3.9. ABSENCE OF CERTAIN CHANGES.
(A) Between December 31, 2006 and the date of this Agreement, neither
the Company nor any Company Subsidiary has: (i) suffered any Company Material
Adverse Effect; (ii) conducted its respective business other than in the
Ordinary Course of Business.
(B) Between December 31, 2006 and the date of this Agreement, neither
the Company nor any Company Subsidiary has, except as disclosed in Part 3.9(b)
of the Company Disclosure Schedule taken any action that, if taken during the
period from the date of this Agreement through the Effective Time, would
constitute a breach of Section 5.1.
3.10. TITLE TO ASSETS; REAL PROPERTY.
(A) The Company or one of the Company Subsidiaries owns, and has good
title to, each of the tangible assets reflected as owned by the Company or the
Company Subsidiaries on the Latest Balance Sheet (except for tangible assets
sold or disposed of since that date in the Ordinary Course of Business) free of
any liens or Encumbrances (other than Permitted Encumbrances). The material
properties and tangible assets owned or leased by the Company and the Company
Subsidiaries are sufficient (subject to normal wear and tear) to operate their
businesses in substantially the same manner as they are currently conducted by
the Company and the Company Subsidiaries.
(B) Part 3.10(b) of the Company Disclosure Schedule lists each real
property that is owned by the Company or any Company Subsidiary as of the date
of this Agreement (such property, together with any real property acquired by
the Company after the date of this Agreement (which will have been so acquired
in compliance with Section 5.1), the "Owned Real Property"). Except as disclosed
in Part 3.10(b) of the Company Disclosure Schedule, each of the Company and or a
Company Subsidiary has good title to the Owned Real Property, free and clear of
all Encumbrances, other than Permitted Encumbrances. Except as set forth on Part
3.10(b) of the Company Disclosure Schedule, (i) there are no outstanding
Contracts for the sale of any of the Owned Real Property, (ii) there are no
leases, subleases, licenses, concessions or any other Contracts granting to any
Person other than the Company or any of the Company Subsidiaries any right to
the possession, use, occupancy or enjoyment of any of the Owned Real Property or
any portion thereof and (iii) there are no easements, covenants, rights-of-way
and other similar restrictions of record, if any, that, individually or in the
aggregate, materially impair, or would reasonably be expected to impair
materially, the continued use and operation of the Owned Real Property to which
they relate in the conduct of the business of the Company and the Company
Subsidiaries as presently conducted. Any reciprocal easements, operating
agreements, option agreements, rights of first refusal or rights of first offer
with respect to any Owned Real Property are set forth in Part 3.10(b) of the
Company Disclosure Schedule. There are no physical conditions or defects at any
of the Owned Real Property which materially impair or would be reasonably
expected to materially impair the continued operation of such facility as
presently conducted. The
13
present use of the land, buildings, structures and improvements on the Owned
Real Property are, in all material respects, in conformity with all Legal
Requirements, including all applicable zoning laws, ordinances and regulations
and with all registered deeds or other restrictions of record, and neither the
Company nor any of the Company Subsidiaries, as the case may be, has received
any written notice of violation thereof, except for such nonconformities or
violations that do not, and would not, individually or in the aggregate,
reasonably be expected to materially interfere with the operations at the Owned
Real Property as presently conducted (or as would be conducted at full
capacity). Neither the Company nor any of the Company Subsidiaries, as the case
may be, has received any written notice of any material conflict or dispute with
any Governmental Entity or other Person relating to any Owned Real Property or
the activities thereon, other than where there is no current or reasonably
likely material interference with the operations at the Owned Real Property as
presently conducted (or as would be conducted at full capacity). As of the date
hereof, there are no existing, or to the knowledge of the Company, any
threatened or pending condemnation or eminent domain proceedings (or proceedings
in lieu thereof) affecting the Owned Real Property or any portion thereof.
(C) Part 3.10(c) of the Company Disclosure Schedule lists each real
property that is leased by the Company or any Company Subsidiary as of the date
of this Agreement, pursuant to which the Company or such Company Subsidiary is
required to pay a monthly rental in excess of $50,000 (such property, together
with any such lease entered into by the Company or a Company Subsidiary after
the date of this Agreement which will have been so acquired in compliance with
Section 5.1, the "Leased Real Property"). Except as disclosed in Part 3.10(c) of
the Company Disclosure Schedule, the Company or a Company Subsidiary holds a
valid leasehold interest in the Leased Real Property free and clear of all
Encumbrances, other than Permitted Encumbrances or Encumbrances encumbering a
lessor's interest in the Leased Real Property incurred by the lessor. Each of
the leases under which the Leased Real Property is held (A) is in full force and
effect, and (B) is enforceable against the Company or the Company Subsidiaries
and the other party or parties thereto, in accordance with its terms, except as
the same may be limited by (i) laws of general application relating to
bankruptcy, insolvency and the relief of debtors, and (ii) rules of law
governing specific performance, injunctive relief and other equitable remedies.
No material default exists under any lease under which the Leased Real Property
is held to which the Company or any of the Company Subsidiaries is a party and
no circumstance exists which, with the giving of notice, the passage of time or
both, is reasonably likely to result in such a default. Except as set forth on
Part 3.10(c) of the Company Disclosure Schedule, there are no material
subleases, licenses, concessions or any other Contracts or agreements to which
the Company or any of the Company Subsidiaries is a party or by which any of
them is otherwise bound granting to any Person or entity other than the Company
or any of the Company Subsidiaries any right to the possession, use, occupancy
or enjoyment of any of the Leased Real Property or any portion thereof. Any
material reciprocal easements, operating agreements, option agreements, rights
of first refusal or rights of first offer to which the Company or any of the
Company Subsidiaries is a party or by which any of them is otherwise bound with
respect to any Leased Real Property are set forth in Part 3.10(c) of the Company
Disclosure Schedule. There are no physical conditions or defects at any of the
Leased Real Property which materially impair or would be
14
reasonably expected to materially impair the continued operation of such
facility as presently conducted. As of the date hereof, there are no existing,
or to the knowledge of the Company, any threatened or pending condemnation or
eminent domain proceedings (or proceedings in lieu thereof) affecting the Leased
Real Property or any portion thereof. The present use of the land, buildings,
structures and improvements on the Leased Real Property are, to the knowledge of
the Company, in conformity with all Legal Requirements, including all applicable
zoning laws, ordinances and regulations and with all registered deeds or other
restrictions of record, and neither the Company nor any of the Company
Subsidiaries, as the case may be, has received any written notice of violation
thereof, except for such nonconformities or violations that would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect. Neither the Company nor any of the Company
Subsidiaries, as the case may be, has received any written notice of any
conflict or dispute with any Governmental Entity or other Person relating to any
Leased Real Property or the activities thereon, other than where there is no
current or reasonably likely material interference with the operations at the
Leased Real Property as presently conducted (or as would be conducted at full
capacity).
3.11. INTELLECTUAL PROPERTY RIGHTS.
(A) Part 3.11(a) of the Company Disclosure Schedule sets forth with
respect to the Intellectual Property Rights owned by the Company or the Company
Subsidiaries: (i) for each patent and patent application, the patent number or
application serial number for each jurisdiction in which the patent or
application has been filed, the date filed or issued, and the present status
thereof, as maintained in records by the Company, a Company Subsidiary, or its
or their outside intellectual property counsel; (ii) for each registered
trademark, trade name or service xxxx, the application serial number or
registration number, for each country, province and state, and the class of
goods covered, as maintained in records by the Company, a Company Subsidiary, or
its or their outside intellectual property counsel; and (iii) for any URL or
domain name, the registration date, any renewal date and name of registry, as
maintained in records by the Company, a Company Subsidiary, or its or their
outside intellectual property counsel. As of the date of this Agreement, to the
knowledge of the Company, all registered trademarks, issued patents and
registered copyrights owned by the Company or a Company Subsidiary are valid and
subsisting. To the knowledge of the Company, neither the Company nor any Company
Subsidiary is engaging in or has engaged at any time in any patent or copyright
misuse or any fraud or inequitable conduct, including with respect to its patent
applications, trademark applications or copyright registration applications.
(B) To the knowledge of the Company, the Intellectual Property Rights
and Technology owned or licensed by the Company and the Company Subsidiaries, or
that the Company or any Company Subsidiary has a right to use pursuant to a
covenant not to xxx, constitute all Intellectual Property Rights and Technology
used in or necessary for the conduct of the Company's or the Company
Subsidiaries' business as presently conducted, including the design,
manufacture, license, sale and support of all (i) Products
15
Under Development or (ii) products currently offered for sale by the Company or
a Company Subsidiary.
(C) Except pursuant to licenses or with respect to the subject matter
listed in Part 3.11(c) of the Company Disclosure Schedule, to the knowledge of
the Company neither the Company nor any Company Subsidiary is compensating or
has any obligation to compensate or account to any Person for the use of any of
the Company's or any Company Subsidiary's Intellectual Property Rights or
Technology used in the design, manufacture, license, sale and support of all (i)
Products Under Development or (ii) products currently offered for sale by the
Company and the Company Subsidiaries.
(D) The Company or each Company Subsidiary (a) owns all right, title
and interest in and to the Intellectual Property Rights and Technology owned or
purported to be owned by the Company, including the Intellectual Property Rights
and Technology listed on Part 3.11(a) of the Company Disclosure Schedule, free
and clear of any mortgage, easement, lien, pledge (including any negative
pledge) or security interest (other than Permitted Encumbrances); and (b) has a
valid and enforceable right or license to use all other Intellectual Property
Rights and Technology used in the design, manufacture, license, sale and support
of all products currently offered for sale or with respect to Products Under
Development by the Company and the Company Subsidiaries, and, except as
disclosed in Part 3.11(d) of the Company Disclosure Schedule, all such licensed
Intellectual Property Rights and rights to use Technology will not cease to be
valid and enforceable rights of the Company or the applicable Company Subsidiary
by reason of the execution, delivery and performance of this Agreement, or by
any ancillary agreements executed in connection with this Agreement, or the
consummation of the transactions contemplated hereby or thereby.
(E) Except as disclosed in Part 3.11(e) of the Company Disclosure
Schedule, no Legal Proceedings are pending against the Company or a Company
Subsidiary, or, to the knowledge of the Company, are threatened, that challenge
the right of Company or the Company Subsidiaries with respect to the use or
ownership of the Intellectual Property Rights or Technology owned or licensed by
the Company and the Company Subsidiaries. Without limiting the foregoing, and
except as disclosed in Part 3.11(e) of the Company Disclosure Schedule, no
interference, opposition, reexamination, or other Legal Proceeding initiated by
a third party is pending against the Company or a Company Subsidiary, or, to the
Company's knowledge, is threatened, or has during the past three years been
threatened but did not develop into a Legal Proceeding in which the scope,
validity, or enforceability of any of Company's or the Company Subsidiaries'
Intellectual Property Rights is being or has been challenged. Except as
disclosed in Part 3.11(e) of the Company Disclosure Schedule, to the knowledge
of the Company, neither the Company's nor any Company Subsidiary's past or
present use of Intellectual Property Rights or Technology owned by the Company
or any Company Subsidiary infringes upon or misappropriates, breaches or
otherwise conflicts with the Intellectual Property Rights of any third party and
neither the Company nor any Company Subsidiary has received any notice alleging
any such infringement or misappropriation. Except as disclosed in Part 3.11(e)
of the Company Disclosure Schedule, the Intellectual Property Rights and
Technology owned by the Company and each Company Subsidiary are not subject to
any
16
outstanding judgment, decree, order, writ, award, injunction or determination of
an arbitrator or court or other governmental authority (other than office
actions and correspondence regarding pending patent applications and trademark
applications) restricting the rights of the Company or any Company Subsidiary
with respect thereto. To the knowledge of the Company, no Person has interfered
with, infringed upon or misappropriated any of the Intellectual Property Rights
owned by the Company or any Company Subsidiary, or is currently doing so.
(F) To the knowledge of the Company, all of the registrations and
pending applications to Governmental Entities with respect to the Intellectual
Property Rights owned by the Company and the Company Subsidiaries are being duly
maintained and prosecuted and all maintenance and related fees due as of the
date hereof have been paid. The Company and each Company Subsidiary has taken
reasonable steps to safeguard and maintain the secrecy and confidentiality of
trade secrets that are material to the Company and the Company Subsidiaries. The
Company has entered into an employee confidentiality and assignment of
inventions agreement in the standard form that has been made available to Parent
with each U.S. based employee of the Company or a Company Subsidiary. Without
limiting the foregoing, except as disclosed in Part 3.11(f) of the Company
Disclosure Schedule, to the knowledge of the Company, (A) there has been no
misappropriation of any trade secrets or other confidential Intellectual
Property Rights or Technology used in connection with the business of the
Company or the Company Subsidiaries by any Person; (B) no employee, independent
contractor or agent of the Company or any Company Subsidiary has misappropriated
any trade secrets of any other Person in the course of performance as an
employee, independent contractor or agent of the business; and (C) no employee,
independent contractor or agent of the Company or any Company Subsidiary is in
default or breach of any term of any employment agreement, nondisclosure
agreement, assignment of invention agreement or similar Contract relating in any
way to the protection, ownership, development, use or transfer of the
Intellectual Property Rights and Technology of the Company or the Company
Subsidiaries. No funding, facilities, or personnel of any Governmental Entity or
educational institution were used, directly or indirectly, to develop or create,
in whole or in part, any Intellectual Property Rights or Technology owned by the
Company or any Company Subsidiary. Neither the Company nor any Company
Subsidiary has made any written submission to, and is not subject to any
Contract with, any standards bodies or other entities that would obligate the
Company or any Company Subsidiary to grant licenses to or otherwise impair its
control of its Intellectual Property Rights.
(G) To the knowledge of the Company, any software or firmware
incorporated in or provided with the products, and any media used to distribute
it, contain at delivery no computer instructions, circuitry or other
technological means whose purpose or effect is to disrupt, damage or negatively
interfere with any use of any customer's computer and communications facilities
or equipment ("Harmful Code"), and the Company and each Company Subsidiary have
used commercially reasonable efforts to prevent the introduction of such Harmful
Code to all software, firmware and media distributed, licensed or sold by the
Company or any Company Subsidiary. "Harmful Code" includes (a) any
instrumentality that could cause the software or firmware to fail to be
operative upon command of or by design by the Company or any Company
17
Subsidiary, and (b) any code containing viruses, trojan horses, worms, or like
destructive code or code that self-replicates. Except as disclosed in Part 3.11
of the Company Disclosure Schedule, to the knowledge of the Company, none of the
software incorporated in the Company's or any Company Subsidiary's products is,
in whole or in part, subject to the provisions of any open source or quasi-open
source license agreement, or any other Contract obligating the Company to make
source code available to third parties or to publish source code. Except as
disclosed in Part 3.11(g) of the Company Disclosure Schedule, neither the
Company nor any Company Subsidiary have entered into any Contract requiring the
Company or any Company Subsidiary to place the source code or other Technology
incorporated in the Company's or Subsidiaries' products in escrow so that a
licensee might obtain access to it upon the occurrence of any release condition.
(H) The Company and the Subsidiaries have obtained all material
approvals necessary for exporting the Company's and the Subsidiaries' products
outside the United States in accordance with all applicable United States export
control regulations, and importing the products into any country in which the
products are now sold or licensed for use, and all such export and import
Governmental Authorizations or approvals in the United States and throughout the
world are valid, current, outstanding and in full force and effect in all
material respects.
(I) To the actual knowledge of the individuals specified in Part
3.11(i)(1) of the Company Disclosure Schedule, there is no basis in existence as
of the date of this Agreement that would give the Person specified in Part
3.11(i)(2) of the Company Disclosure Schedule the legal right to terminate the
Confidential Agreement pursuant to Section 9.2 of the Confidential Agreement.
3.12. CONTRACTS.
(A) Part 3.12 of the Company Disclosure Schedule contains a list as of
the date of this Agreement of each of the following Contracts to which the
Company or any of the Company Subsidiaries is a party or by which any of them or
their respective assets are otherwise bound:
(i) other than distribution Contracts, each Contract that
provides for exclusivity or restricts in any material respect the ability
of the Company or any of the Company Subsidiaries or any of the Company's
current or future Affiliates to compete in any geographic area or line of
business, in each case for a period extending beyond three months from the
date of this Agreement, or pursuant to which any benefit or right is
required to be given or lost as a result of so competing;
(ii) each indemnification or employment contract with any
director or officer of the Company or the Company Subsidiaries;
(iii) each Contract evidencing Indebtedness in excess of $500,000
in aggregate principal amount;
18
(iv) each (A) distributor Contract or (B) supply Contract
pursuant to which goods, raw materials, or equipment are supplied to the
Company or any Company Subsidiary (excluding purchase orders given or
received in the Ordinary Course of Business), in each case under which the
Company or any Company Subsidiary paid or received in excess of $500,000 in
fiscal 2006 or is expected to pay or receive in excess of $ 500,000 in
fiscal 2007;
(v) each customer Contract (excluding purchase orders given or
received in the Ordinary Course of Business) under which the Company or any
Company Subsidiary received in excess of $1,500,000 in fiscal 2006 or is
expected to receive in excess of $1,500,000 in fiscal 2007;
(vi) each material "single source" supply Contract pursuant to
which goods, raw materials or equipment are supplied to the Company or any
Company Subsidiary from an exclusive source;
(vii) each collective bargaining agreement;
(viii) each lease involving real property pursuant to which the
Company or any of the Company Subsidiaries is required to pay a monthly
rental in excess of $50,000;
(ix) each lease or rental Contract involving personal property
(and not relating primarily to real property) pursuant to which the Company
or any of the Company Subsidiaries is required to make rental payments in
excess of $50,000 per year;
(x) each Contract that involves "take or pay" provisions under
which the Company or any Company Subsidiary paid or received in excess of
$500,000 in fiscal 2006 or is expected to pay or receive in excess of
$500,000 in fiscal 2007 or, based on the Company's present operations, any
fiscal year thereafter;
(xi) each Contract pursuant to which any of the benefits to any
party of which will be materially increased, or the vesting of the benefits
to any party of which will be materially accelerated, by the occurrence of
any of the transactions contemplated by this Agreement or the value of any
of the material benefits to any party of which will be calculated on the
basis of any of the transactions contemplated by this Agreement;
(xii) each Contract for any joint venture (whether in
partnership, limited liability company or other organizational form),
co-promote agreements or co-branding agreements (other than distribution
agreements) or agreements pursuant to which the Company or a Company
Subsidiary permitted distribution of the Company's products under another
party's name or trademarks;
19
(xiii) each Contract providing for future performance by the
Company or a Company Subsidiary in consideration of amounts previously paid
the balance of which exceeds $250,000 as of the date of this Agreement;
(xiv) each Contract where, in settlement of an actual or
threatened Legal Proceeding for patent infringement, trade secret
misappropriation or similar intellectual property action, another Person
agrees in writing not to contest the validity or ownership of Intellectual
Property Rights of the Company; and
(xv) each Contract granting a third party any license to use
Intellectual Property Rights of the Company relating to Products Under
Development in the field of clinical diagnostics.
In this Agreement, "Material Contract" refers to each Contract (x) identified in
this Section 3.12, whether or not listed in Part 3.12 of the Company Disclosure
Schedule, (y) entered into after the date of this Agreement that would be
required to be listed in Part 3.12 of the Company Disclosure Schedule if such
Contract were in effect as of the date of this Agreement, or (z) that would be
required to be filed as an exhibit to a Registration Statement on Form S-1 filed
by the Company under the Securities Act or as an exhibit to an Annual Report on
Form 10-K filed by the Company under the Exchange Act.
(B) Each Material Contract is enforceable against the Company and each
Company Subsidiary that is a party thereto and each other party thereto, except
as the same may be limited by (i) laws of general application relating to
bankruptcy, insolvency and the relief of debtors, and (ii) rules of law
governing specific performance, injunctive relief and other equitable remedies.
There are no material existing breaches or defaults on the part of the Company
or any of the Company Subsidiaries under (or any condition to which with the
passage of time or the giving of notice would cause such a breach of or default
under) any Material Contract and, to the knowledge of the Company, there are no
material existing breaches or defaults on the part of any other Person under (or
any condition to the knowledge of the Company which with the passage of time or
the giving of notice would cause such a breach of or default under) any Material
Contract. The Company has made available to Parent copies of each Material
Contract in effect as of the date of this Agreement, together with all
amendments and supplements thereto in effect as of the date of this Agreement.
3.13. COMPLIANCE WITH LEGAL REQUIREMENTS. Except as set forth in Section
3.17 pertaining to compliance with FDA Laws, the Company and the Company
Subsidiaries are and at all time have been in material compliance with all
material Legal Requirements applicable to their businesses.
3.14. FOREIGN CORRUPT PRACTICES AND INTERNATIONAL TRADE SANCTIONS. Except
as disclosed in Part 3.14 of the Company Disclosure Schedule, neither the
Company, nor any Company Subsidiary, nor any of their respective directors,
officers, agents, employees or any other Persons acting on their behalf has (i)
violated the Foreign Corrupt Practices Act, 15 U.S.C. Section 78dd-1 et seq., or
any other similar applicable foreign, federal,
20
or state Legal Requirement, (ii) made or provided, or caused to be made or
provided, directly or indirectly, any payment or thing of value to a foreign
official, foreign political party, candidate for office or any other person
knowing that the person will pay or offer to pay the foreign official, party or
candidate, for the purpose of influencing a decision, inducing an official to
violate their lawful duty, securing any improper advantage, or inducing a
foreign official to use their influence to affect a governmental decision, (iii)
paid, accepted or received any unlawful contributions, payments, expenditures or
gifts, or (iv) violated or operated in noncompliance with any export
restrictions, money laundering law, anti-terrorism law or regulation,
anti-boycott regulations or embargo regulations.
3.15. GOVERNMENTAL AUTHORIZATIONS. As of the date of this Agreement, the
Company and the Company Subsidiaries hold all Governmental Authorizations
necessary to enable them to conduct their businesses in all material respects in
the manner in which such businesses are currently being conducted and are
proposed to be conducted. The material Governmental Authorizations held by the
Company and the Company Subsidiaries are, in all material respects, valid and in
full force and effect. The Company and the Company Subsidiaries are in
compliance with the terms and requirements of such Governmental Authorizations
in all material respects. The execution and delivery of this Agreement by the
Company does not, and the consummation of the Merger or the other transactions
contemplated hereby and compliance with the terms hereof would not reasonably be
expected to cause the revocation or cancellation of any material Governmental
Authorization. To the knowledge of the Company, there are no facts or
circumstances existing which would lead to any suspension, loss of or material
modification to any material Governmental Authorization or refusal by a
Governmental Entity to renew or accept for filing any material Governmental
Authorizations on terms not substantially less advantageous, in the aggregate,
to the Company and the Company Subsidiaries than the terms of those Governmental
Authorization currently in force. All Governmental Authorizations material to
the operation of the Company's or any Company Subsidiary's business is
transferable to Parent or any of its Subsidiaries as of the Effective Time if
necessary to be so transferred. Since January 1, 2004, neither the Company nor
any of the Company Subsidiaries has been notified by any Governmental Entity:
(a) asserting any material violation of any term or requirement of any
Governmental Authorization or Legal Requirement; or (b) notifying the Company or
one of the Company Subsidiaries of the suspension, revocation of, loss of or
material modification to any Governmental Authorization.
3.16. LEGAL PROCEEDINGS; ORDERS. As of the date of this Agreement:
(A) except as disclosed in Part 3.16 of the Company Disclosure
Schedule, (i) there is no Legal Proceeding pending (or, to the knowledge of the
Company, threatened) against the Company or any of the Company Subsidiaries or
any of their respective properties or rights or any executive officer or
director of the Company or any Company Subsidiary (in their capacity as such),
in which the claim is for more than $200,000 in damages, or for an injunction or
specific performance, and (ii) neither the Company, any Company Subsidiary, nor,
to the knowledge of the Company, any of its or their current or former officers,
directors, employees, or independent contractors,
21
each in their capacity as such, has been identified by any Governmental Entity
as a subject or target of a government investigation, or otherwise been informed
or become aware that their conduct is being investigated by a Governmental
Entity. Except as set forth in Part 3.16 of the Company Disclosure Schedule,
there is no Legal Proceeding brought by the Company against any Person that is
pending as of the date of this Agreement; and
(B) there is no material order, injunction, decree or judgment
specific to the Company or any of the Company Subsidiaries to which the Company
or any of the Company Subsidiaries is subject.
3.17. REGULATORY MATTERS.
(A) The Company and the Company Subsidiaries have established and
administer compliance programs (including written compliance policies)
applicable to the Company and the Company Subsidiaries (i) to assist the
Company, the Company Subsidiaries and their respective directors, officers and
employees in complying with all Legal Requirements and guidelines (including
those administered by the FDA) applicable to the Company, the Company
Subsidiaries or their businesses and (ii) to provide compliance policies
governing activities and requirements applicable to medical device companies
(including pre-clinical and clinical testing, product design and development,
product testing, product manufacturing, product labeling, product storage,
pre-market clearance and approval, marketing, advertising and promotion, product
sales and distribution, medical device recall and reporting regulations, and
record keeping).
(B) Except as set forth in Part 3.17(b) of the Company Disclosure
Schedule, the Company and each Company Subsidiary is in compliance in all
material respects with all Legal Requirements applicable to the Company's
products and activities, including product design, development, testing,
manufacture, marketing, distribution, labeling, storage and transport, in all
jurisdictions in which such acts or any of them occur or are reasonably likely
to occur or such products or any of them are likely to be sold or used
(including any FDA Laws). All applications, submissions, information, claims,
reports and statistics and other data and conclusions derived therefrom,
utilized as the basis for or submitted in connection with any and all requests
for authorizations, approvals, certificates, waivers, certifications,
clearances, exemptions, notifications, consents, orders, registrations, licenses
or permits of the FDA or comparable Governmental Entities relating to the
Company, the Company Subsidiaries, their businesses and their products were,
when submitted to the FDA or other Governmental Entities, true, complete and
correct in all material respects and in conformance with Legal Requirements as
of the date of submission and any updates, changes, corrections or modification
to such applications, submissions, information and data which were or are
necessary or required to be filed, maintained, or furnished to the FDA or other
Governmental Entities have been timely filed, maintained, or furnished and were
true, complete and correct in all material respects and in conformance with
Legal Requirements as of the date of submission. The labeling claims made by the
Company and the Company Subsidiaries for each of their products are consistent
with the scope of regulatory clearance, exemption or approval for each product
in each jurisdiction where it
22
is marketed in all material respects, and supported by proper research design,
testing, analysis and disclosure that conforms with Legal Requirements.
(C) The activities, products and facilities of the Company and the
Company Subsidiaries, as well as, to the Company's knowledge, its suppliers,
distributors, contractors and other intermediaries, are in compliance with all
applicable requirements of CLIA, the FDCA and implementing FDA regulations,
including the registration, listing, labeling and manufacturing requirements of
21 C.F.R. Parts 807, 809 and 820, all to the extent applicable to the Company's
products and services. The Company and each Company Subsidiary is not subject to
any obligation arising under any consent decree, consent agreement, or warning
letter issued by or entered into with the FDA or any other Governmental Entity
or other notice, response or commitment made to the FDA or any other
Governmental Entity. The Company has delivered to Parent true, correct and
complete copies of all customer complaints relating to the Company's and the
Company Subsidiaries' products and all Medical Device Reports, in each case,
filed with the FDA within the last five years. The Company has delivered to
Parent true, complete and correct copies of all warning letters, untitled
letters, notices of inspectional observations (Form FDA 483s), or similar
notices, or other correspondence relating to the Company's and the Company
Subsidiaries' products and its compliance with Legal Requirements from the FDA
and any other Governmental Entity and all of the Company's responses thereto
within the last five years.
(D) Except as set forth in Part 3.17(d) of the Company Disclosure
Schedule, since January 1, 2003, no exemptions, clearances or approvals for the
Company and the Company Subsidiaries' products have been subjected to
reevaluation or suspension of sale by the FDA and no products manufactured,
marketed or sold by the Company or any Company Subsidiary have been recalled or
subject to a field notification, field correction or safety alert (whether
voluntarily or otherwise) and no proceedings have occurred (whether completed or
pending) seeking to recall, reclassify, re-label, suspend, or seize any product
sold or proposed to be sold by the Company or a Company Subsidiary. To the
Company's knowledge, there are no facts which are reasonably likely to cause:
(A) the recall, suspension, field notification, field correction,
reclassification, re-labeling or safety alert of any product sold or intended to
be sold by the Company or any Company Subsidiary; (B) a change in the marketing
classification or a material change in labeling of any such products; or (C) a
termination or suspension of marketing of any such products.
(E) All products being manufactured, distributed, or developed by the
Company and the Company Subsidiaries that are subject to the jurisdiction of the
FDA or comparable Governmental Entity are being manufactured, labeled, stored,
tested, distributed, and marketed in material compliance with all applicable
requirements and implementing regulations thereunder.
(F) Except as set forth in Part 3.17(f) of the Company Disclosure
Schedule, all pre-clinical trials and clinical trials conducted by or on behalf
of the Company and the Company Subsidiaries have been, and are being conducted
in material compliance with experimental protocols, procedures and controls
pursuant to accepted
23
professional scientific standards and all applicable Legal Requirements relating
thereto, including the FDCA and its applicable implementing regulations at 21
C.F.R. Parts 50, 54, 56 and 812.
(G) Neither the Company, the Company Subsidiaries, nor, to the
knowledge of the Company, any of their collective officers, employees or agents
has committed any act, made any statement, or failed to make any statement, that
would be reasonably expected to provide a basis for the FDA to invoke its policy
respecting "Fraud, Untrue Statements of Material Facts, Bribery, and Illegal
Gratuities," set forth in 56 Fed. Reg. 46191 (September 10, 1991) and any
amendments thereto.
(H) Neither the Company, the Company Subsidiaries, nor, to the
knowledge of the Company, any of their collective officers, employees or agents
has been convicted of any crime or engaged in any conduct that could result in a
material debarment or exclusion under 21 U.S.C. Section 335a or under any
similar Legal Requirement. No claims, actions, proceedings or investigations
that could reasonably be expected to result in such a material debarment or
exclusion are pending or threatened against the Company, the Company
Subsidiaries, or, to the knowledge of the Company, any of their collective
officers, employees or agents.
(I) Except as disclosed on Part 3.17(i) of the Company Disclosure
Schedule, there are no investigations, audits, actions or other proceedings
pending with respect to a violation by the Company or any Company Subsidiary of
any Legal Requirement that reasonably would be expected to result in
administrative, civil, or criminal liability, and there are no facts or
circumstances existing that would reasonably be expected to serve as a basis for
such an investigation, audit, action or other proceeding.
(J) The Company and each of the Company Subsidiaries is in material
compliance with all applicable FDA import and export requirements, including
import-for-export requirements, export notifications or authorizations and
record keeping requirements.
3.18. PRODUCT RECALLS. Part 3.18 of the Company Disclosure Schedule sets
forth a list of (i) all recalls, field notifications, field corrections and
safety alerts with respect to products manufactured and/or distributed by the
Company or any Company Subsidiary, or by any Person on behalf of the Company or
any Company Subsidiary, in each case between January 1, 2004 and the date of
this Agreement, and the dates, if any, such recalls, field notifications, field
corrections and safety alerts were resolved or closed, and (ii) to the knowledge
of the Company, any material complaints with respect to products produced by the
Company or any or any Company Subsidiary, or by any Person on behalf of the
Company or any or any Company Subsidiary, that are open as of the date of this
Agreement. There are no outstanding recalls, field notifications, field
corrections, safety alerts or product complaints with respect to the products
manufactured and/or distributed by the Company or any or any Company Subsidiary,
or by any Person on behalf of the Company or any or any Company Subsidiary, and
to the Company's knowledge, there are no facts that would be reasonably likely
to result in a material
24
product recall, field notification, field correction or safety alert with
respect to any such products.
3.19. TAX MATTERS.
(A) Each of the Company and the Company Subsidiaries has timely filed
with the appropriate Governmental Entity all Tax Returns required to be filed.
All such Tax Returns are complete and accurate in all material respects and have
been prepared in compliance with applicable Legal Requirements. All material
Taxes due and owing by the Company and the Company Subsidiaries (whether or not
shown on any Tax Return) have been paid. Neither the Company nor any Company
Subsidiary is the beneficiary of any extension of time within which to file any
material Tax Return. No written claim has ever been received by the Company or
any Company Subsidiary from a Governmental Entity in a jurisdiction where the
Company or any Company Subsidiary does not file Tax Returns that it is or may be
subject to taxation by that jurisdiction.
(B) The unpaid Taxes of the Company and the Company Subsidiaries did
not, as of the date of the Latest Balance Sheet, exceed the reserve for Tax
liability (excluding any reserve for deferred Taxes established to reflect
timing differences between book and Tax income) set forth on the face of such
balance sheets (rather than in any notes thereto). Since the date of the Latest
Balance Sheet, neither the Company nor any Company Subsidiary has incurred any
liability for Taxes outside the ordinary course of business or otherwise
inconsistent with past custom and practice.
(C) There are no examinations, audits or Legal Proceedings with
respect to material Taxes of the Company or any Company Subsidiary currently
pending or underway (and to the knowledge of the Company no such examination,
audit or proceeding is threatened) nor has the Company or any Company Subsidiary
received any notice from a Governmental Entity relating to any issue which could
result in a material Tax liability for the Company or any Company Subsidiary. No
deficiency for material Taxes against the Company or any Company Subsidiary has
been claimed, proposed or assessed by any Governmental Entity that has not been
satisfied by payment or withdrawn. No extension or waiver of the limitation
period applicable to any material Taxes or material Tax Return is in effect. The
Company has delivered or made available to Parent complete and accurate copies
of federal, state and local Tax Returns of the Company and each Company
Subsidiary and their predecessors for all open Tax years, and complete and
accurate copies of all examination reports and statements of deficiencies
assessed against or agreed to by the Company, any Company Subsidiary or any
predecessors since its last open Tax year.
(D) There are no Encumbrances for material Taxes (other than Permitted
Encumbrances) upon any of the assets of the Company or any Company Subsidiary.
(E) Neither the Company nor any Company Subsidiary will be required to
include any material item of income in, or exclude any material item of
deduction from, taxable income for any period (or any portion thereof) ending
after the
25
Effective Time as a result of any installment sale or other transaction on or
prior to the Effective Time, any accounting method change or agreement with any
Governmental Entity, any prepaid amount received on or prior to the Effective
Time or any intercompany transaction or excess loss account described in Code
Section 1502 (or any corresponding provision of state, local or foreign Tax
law).
(F) None of the outstanding indebtedness of the Company or any Company
Subsidiary constitutes indebtedness with respect to which any interest
deductions may be disallowed under Sections 163(i), 163(l) or 279 of the Code or
under any other provision of applicable Legal Requirements.
(G) The Company and each Company Subsidiary has withheld and paid all
Taxes required to have been withheld and paid in connection with amounts paid or
owing to any employee, independent contractor, service provider, creditor,
stockholder or other third party and is not liable for any arrears of wages or
any taxes or any penalty for failure to withhold or pay such amounts.
(H) Neither the Company nor any Company Subsidiary: (i) is a party to
or bound by a Tax sharing, allocation, indemnification or similar agreement;
(ii) has been a member of an affiliated group of corporations within the meaning
of Section 1504 of the Code or any group that has filed a consolidated, combined
or unitary Tax Return other than a consolidated, combined or unitary group of
which the Company is the common parent; or (iii) has any liability for material
Taxes of any Person (other than Taxes of the Company and the Company
Subsidiaries) under Treasury regulation Section 1.1502-6 (or any similar
provision of a Legal Requirement), as a transferee or successor, by Contract, or
otherwise. For the purposes of this Section 3.19(h), commercially reasonable
Contracts providing for the allocation or payment of real property Taxes
attributable to real property leased or occupied by the Company or any Company
Subsidiary shall be disregarded.
(I) Neither the Company nor any Company Subsidiary: (i) has ever been
a United States real property holding corporation within the meaning of Section
897(c)(2) of the Code; (ii) has been a stockholder of a "controlled foreign
corporation" as defined in Section 957 of the Code (or any similar provision of
a Legal Requirement); (iii) has been a "personal holding company" as defined in
Section 542 of the Code (or any similar provision of a Legal Requirement); (iv)
has had a material liability with respect to Taxes as a result of being a
stockholder of a "passive foreign investment company" within the meaning of
Section 1297 of the Code; or (v) has engaged in a trade or business, had a
permanent establishment (within the meaning of an applicable Tax treaty) or has
otherwise become subject to Tax jurisdiction in a country other than the country
of its formation.
(J) None of the Company, any Company Subsidiary or predecessor has
within the past three (3) years been a party to a transaction intended to
qualify under Section 355 of the Code or under so much of Section 356 of the
Code as relates to Section 355 of the Code.
26
(K) None of the Company Subsidiaries organized outside of the United
States is a "surrogate foreign corporation" within the meaning of Section
7874(a)(2)(B) of the Code or is treated as a United States corporation under
Section 7874(b) of the Code.
(L) Neither the Company nor any Company Subsidiary has entered into
any transaction identified as a "reportable transaction" for purposes of
Treasury regulations Sections 1.6011-4(b)(2) or 301.6111-2(b)(2).
3.20. EMPLOYEE BENEFIT PLANS.
(A) For purposes of this Section 3.20(a), "Company Plan" means each
"employee benefit plan" as defined in Section 3(3) of ERISA (whether or not
subject to ERISA) and each other plan, policy, program, practice, agreement,
understanding or arrangement (whether written or oral) providing compensation or
other benefits to any current or former director, officer, employee or
consultant (or to any dependent or beneficiary thereof) of the Company or any
ERISA Affiliate (as defined below), which is now, or was within the past six
years, maintained, sponsored or contributed to by the Company or any ERISA
Affiliate, or under which the Company or any ERISA Affiliate has or may have any
obligation or liability, whether actual or contingent, including all incentive,
bonus, deferred compensation, vacation, holiday, cafeteria, medical, disability,
stock purchase, stock option, stock appreciation, phantom stock, restricted
stock or other stock-based compensation plans, policies, programs, practices or
arrangements. Part 3.20 (a) of the Company Disclosure Schedule sets forth a
complete list of each Company Plan under which the Company or any ERISA
Affiliate has or may have any material obligation or material liability, whether
actual or contingent.
(B) Each Company Plan which is intended to qualify under Section
401(a), Section 401(k), Section 401(m) or Section 4975(e)(7) of the Code has
either (i) received a favorable determination letter from the IRS as to its
qualified status, or (ii) may rely upon a favorable prototype opinion letter
from the IRS, and each trust established in connection with any Company Plan
which is intended to be exempt from federal income taxation under Section 501(a)
of the Code is so exempt, and to Company's knowledge, no fact or event has
occurred that could adversely affect the qualified status of any such Company
Plan or the exempt status of any such trust.
(C) Each Company Plan complies in all material respects in form and
operation, and has been administered in all material respects in accordance
with, its terms and all applicable Legal Requirements, including ERISA and the
Code, and all contributions required to be made under the terms of any of the
Company Plans as of the date of this Agreement have been timely made or, if not
yet due, have been properly reflected on the most recent consolidated balance
sheet filed or incorporated by reference in the Company financial statements
prior to the date of this Agreement. With respect to each Company Plan, all Tax,
annual reporting and other filings with a Governmental Entity required by ERISA
and the Code have been timely filed with the appropriate Governmental Entity and
all notices and disclosures have been timely provided to participants. With
respect to the Company Plans, no event has occurred and, to the
27
knowledge of Company, there exists no condition or set of circumstances in
connection with which the Company or any Company Subsidiary could be subject to
any material liability (other than for routine benefit liabilities) under the
terms of, or with respect to, such Company Plans, ERISA, the Code or any other
applicable Legal Requirement.
(D) To the Company's knowledge, there has been no prohibited
transaction (within the meaning of Section 406 of ERISA or Section 4975 of the
Code and other than a transaction that is exempt under a statutory or
administrative exemption) with respect to any Company Plan that could result in
liability to the Company or any ERISA Affiliate. Each Company Plan can be
amended, terminated or otherwise discontinued after the Effective Time in
accordance with its terms, without liability (other than (A) liability for
ordinary administrative expenses typically incurred in a termination event or
(B) if the Company Plan is a pension benefit plan subject to Part 2 of Title I
of ERISA, liability for the accrued benefits as of the date of such termination
(if and to the extent required by ERISA) to the extent that either there are
sufficient assets set aside in a trust or insurance contract to satisfy such
liability or such liability is reflected on the most recent balance sheet
included in the Company financial statements prior to the date of this
Agreement). Neither the Company, nor to the knowledge of the Company, any other
Person or Entity has any express or implied commitment, whether legally
enforceable or not, to modify, change or terminate any Company Plan, other than
with respect to a modification, change or termination required by ERISA or the
Code. No Legal Proceeding has been brought, or to the knowledge of Company is
threatened, against or with respect to any such Company Plan, including any
audit or inquiry by the IRS or United States Department of Labor. Neither the
Company nor any ERISA Affiliate has any liability under ERISA Section 502. All
contributions and payments to such Company Plan are deductible under Code
Sections 162 or 404. No excise Tax could reasonably be expected to be imposed
upon the Company under Chapter 43 of the Code.
(E) No Company Plan is a "multiemployer plan" (as defined in Section
3(37) of ERISA) (a "Multiemployer Plan") or other pension plan subject to Title
IV or Part 3 of Title I of ERISA or Section 412 of the Code, and neither the
Company nor any ERISA Affiliate has sponsored, maintained, participated in,
contributed to, or has been required to participate in or contribute to a
Multiemployer Plan or other pension plan subject to Title IV or Part 3 of Title
I of ERISA or Section 412 of the Code. None of the assets of Company or any
ERISA Affiliate is, or may reasonably be expected to become, the subject of any
Encumbrance arising under ERISA or Section 412(n) of the Code.
(F) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will result in any payment,
acceleration or creation of any rights of any Person to benefits under any
Company Plan. No amount that could be received (whether in cash, property, the
vesting of property or otherwise) as a result of or in connection with the
consummation of the transactions contemplated by this Agreement (either alone or
in combination with any other event) or by any of the ancillary agreements, by
any employee, officer, director or other service provider of the Company or any
of the Company Subsidiaries who is a "disqualified individual" (as such term is
defined in Treasury Regulation Section 1.280G-1) could be
28
characterized as an "excess parachute payment" (as defined in Section 280G(b)(1)
of the Code).
(G) Except as required by applicable Legal Requirements, no Company
Plan provides any of the following retiree or post-employment benefits to any
Person: medical, disability or life insurance benefits. No Company Plan is a
voluntary employee benefit association under Section 501(a)(9) of the Code. The
Company and each ERISA Affiliate is in compliance in all material respects with
(i) the requirements of the applicable health care continuation and notice
provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended, and the regulations (including proposed regulations) thereunder and any
similar state law and (ii) the applicable requirements of the Health Insurance
Portability and Accountability Act of 1996, as amended, and the regulations
(including the proposed regulations) thereunder.
(H) Except as set forth in Part 3.20(h) of the Company Disclosure
Schedule, no Company Plan or payment or benefit provided pursuant to any Company
Plan between the Company or any of the Company Subsidiaries and any "service
provider" (within the meaning of Section 409A of the Code), including the grant,
vesting or exercise of any stock option or stock appreciation right, will or may
provide for the deferral of compensation subject to Section 409A of the Code,
whether pursuant to the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby (either alone or upon the
occurrence of any additional or subsequent events) or otherwise. Each Company
Plan that is a nonqualified deferred compensation plan subject to Section 409A
of the Code has been operated and administered in good faith compliance with
Section 409A of the Code from the period beginning January 1, 2005 and
continuing through the date hereof. All stock options granted under the Company
Option Plans have been granted in compliance with the terms of applicable Legal
Requirements and the applicable Company Option Plans and have (or with respect
to such options which have been exercised as of the date of this Agreement, had)
a per share exercise price that is (or with respect to such options which have
been exercised as of the date of this Agreement, was) at least equal to the fair
market value of a share of the underlying stock as of the date the option was
granted (determined in accordance with applicable Legal Requirements, including,
to the extent applicable, Section 409A of the Code).
(I) The Company and each of the Company Subsidiaries have properly
classified all individuals providing services to the Company or any of the
Company Subsidiaries as employees or non-employees for all relevant purposes.
(J) With respect to each employee benefit plan, program, or other
arrangement providing compensation or benefits to any employee or former
employee of the Company or any of the Company Subsidiaries (or any dependent
thereof) which is subject to the Legal Requirements of any jurisdiction outside
of the United States (the "Foreign Plans"): (i) such Foreign Plan has been
maintained in all material respects in accordance with all applicable Legal
Requirements, (ii) if intended to qualify for special Tax treatment, such
Foreign Plan meets all Legal Requirements for such treatment, (iii) if intended
or required to be funded and/or book-reserved, such Foreign Plan is fully funded
29
and/or book reserved, as appropriate, based upon reasonable actuarial
assumptions, and (iv) no material liability exists or reasonably could be
imposed upon the assets of the Company or any of the Company Subsidiaries by
reason of such Foreign Plan.
(K) The execution and delivery of this Agreement and the consummation
of the Merger: (i) will not materially increase the benefits payable by the
Company or any of the Company Subsidiaries under any Company Plan; and (ii) will
not result in any acceleration of the time of payment or vesting of any material
benefits payable by the Company or any of the Company Subsidiaries under any
Company Plan.
3.21. LABOR MATTERS.
(A) There are no Legal Proceedings pending against the Company or any
of the Company Subsidiaries asserting that the Company or any of the Company
Subsidiaries has committed an unfair labor practice, nor are have any such Legal
Proceedings been threatened to the knowledge of the Company. There are no
collective bargaining agreements or other labor union agreements to which the
Company or any of the Company Subsidiaries is a party, and, to the knowledge of
the Company, as of the date of this Agreement, neither the Company nor any of
the Company Subsidiaries is the subject of any Legal Proceeding seeking to
compel any of them to bargain with any labor organization as to wages or
conditions. To the Company's knowledge, since January 1, 2004, neither the
Company nor any of the Company Subsidiaries was the subject of any labor union
organizing activity or had any actual or threatened employee strikes, work
stoppages, slowdowns or lockouts.
(B) The Company and each Company Subsidiary has materially complied
and is in material compliance with all applicable Legal Requirements with
respect to employment, immigration, occupational health and safety, and wages
and hours. There are no Legal Proceedings pending, or, to the knowledge of the
Company, threatened, against the Company or any of the Company Subsidiaries with
respect to employment, immigration, occupational health and safety, or wages and
hours and that would reasonably be expected to have a Company Material Adverse
Effect. Except as set forth in Part 3.21(b) of the Company Disclosure Schedule,
neither the Company nor any of the Company Subsidiaries is a party to or bound
by any Contract limiting the right of the Company to terminate the employment of
any of its Executives at will or requiring the payment of severance upon
termination.
(C) To the Company's knowledge, there has not been a representation
question respecting any of the employees of the Company or any of the Company
Subsidiaries, there are no campaigns being conducted to solicit cards from or
otherwise organize employees of the Company or any of the Company Subsidiaries
to authorize representation by any labor organization, there has been no labor
strike, slow-down or other concerted work stoppage with respect to the business
activities of the Company or any of the Company Subsidiaries during the last
three years, and no such labor strike, slow-down, or other concerted work
stoppage is currently threatened.
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(D) To the Company's knowledge, no employee of the Company or any of
the Company Subsidiaries are in any material respect in violation of any term of
any employment agreement, non-disclosure agreement, noncompetition agreement, or
any restrictive covenant to a former employer relating to the right of any such
employee to be employed by the Company or any of the Company Subsidiaries
because of (i) the nature of the business conducted or presently proposed to be
conducted by the Company or any of the Company Subsidiaries or (ii) the use of
trade secrets or proprietary information of others. No Executive of the Company
or any of the Company Subsidiaries has given notice to the Company or any of the
Company Subsidiaries that any such Executive intends to terminate his or her
employment with the Company or any of the Company Subsidiaries. Except as set
forth in Part 3.21(d) of the Company Disclosure Schedule, there are no Legal
Proceedings pending or, to the knowledge of the Company, threatened, between the
Company or any of the Company Subsidiaries and any of their respective current
or former employees, which Legal Proceedings would reasonably be expected to
have a Company Material Adverse Effect, individually or collectively.
3.22. ENVIRONMENTAL MATTERS. The Company and the Company Subsidiaries are
in material compliance with all applicable Environmental Laws. Since January 1,
2003, neither the Company nor any of the Company Subsidiaries received any
written notice from a Governmental Entity or third party that alleged that the
Company or any of the Company Subsidiaries was materially violating any
Environmental Law. To the knowledge of the Company, no current or prior owner of
any property leased or controlled by the Company or any of the Company
Subsidiaries received any written notice from a Governmental Entity or third
party since January 1, 2003 that alleged that such current or prior owner or the
Company or any of the Company Subsidiaries was materially violating any
Environmental Law. The Company has all the Environmental Permits necessary for
the conduct and operation of the business as now being conducted, and all such
permits are in good standing. Neither the Company nor any of the Company
Subsidiaries has entered into or agreed to any material consent decree, order or
agreement under any Environmental Law, and neither the Company nor any of the
Company Subsidiaries is subject to any material judgment, decree or order
relating to compliance with any Environmental Law or to investigation, cleanup,
remediation or removal of Hazardous Substances under any Environmental Law.
There are no underground storage tanks or known or suspected asbestos-containing
materials on, under or about real property owned or leased by the Company or a
Company Subsidiary. To the knowledge of the Company, there are no above-ground
storage tanks on, under or about any property currently or previously owned or
leased by the Company, the presence of which would reasonably be expected to
have a Company Material Adverse Effect. True and correct summaries of all
environmental audits or assessments which have been conducted by or on behalf of
the Company at any Owned Real Property or Leased Real Property, have been
delivered to Parent or Merger Sub.
(For purposes of this Section 3.22, "Environmental Laws" shall mean any and
all applicable international, federal, state, or local laws, statutes,
ordinances, regulations, policies, guidance, rules, judgments, orders, court
decisions or rule of common law, permits, restrictions and licenses, which (i)
regulate or relate to the protection or clean up
31
of the environment; the use, treatment, storage, transportation, handling,
disposal or release of Hazardous Substances, the preservation or protection of
waterways, groundwater, drinking water, air, wildlife, plants or other natural
resources; or the health and safety of persons or property, including protection
of the health and safety of employees; or (ii) impose liability or
responsibility with respect to any of the foregoing, including the Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C. Section 9601
et seq.), or any other Legal Requirement of similar effect. "Environmental
Permits" shall mean any material permit, license, authorization or approval
required under applicable Environmental Laws. "Hazardous Substances" shall mean
any pollutant, chemical, substance and any toxic, infectious, carcinogenic,
reactive, corrosive, ignitable or flammable chemical, or chemical compound, or
hazardous substance, material or waste, whether solid, liquid or gas, that is
subject to regulation, control or remediation under any Environmental Laws,
including any quantity of asbestos in any form, urea formaldehyde, PCBs, radon
gas, crude oil or any fraction thereof, all forms of natural gas, petroleum
products or by-products or derivatives.)
3.23. INSURANCE. The Company maintains insurance coverage with reputable
and financially sound insurers, or maintains self-insurance practices, in such
amounts and covering such risks of the Company and the Company Subsidiaries as
are in accordance with normal industry practice for publicly traded companies
that are engaged in businesses similar to that of the Company and the Company
Subsidiaries (taking into account the cost and availability of such insurance).
All such policies are in full force and effect, all premiums due and payable
have been paid, and since January 1, 2005, the Company has not received any
written communication notifying the Company of any: (a) cancellation or
invalidation of any material insurance policy held by the Company (except with
respect to policies that have been replaced with similar policies); (b) refusal
of any coverage or rejection of any material claim under any material insurance
policy held by the Company; or (c) material adjustment in the amount of the
premiums payable with respect to any insurance policy held by the Company. There
is no pending material claim by the Company under any insurance policy held by
the Company. Neither the Company nor any Company Subsidiary is in material
breach or default, and neither the Company nor any Company Subsidiary has taken
any action or failed to take any action which, with notice or the lapse of time,
would constitute such a breach or default, or permit termination or material
modification of any of the insurance policies. The consummation of the
transactions contemplated by this Agreement will not, in and of itself, cause
the revocation, cancellation or termination of any such insurance policies.
3.24. TRANSACTIONS WITH AFFILIATES. To the knowledge of the Company,
between the date of the Company's last proxy statement filed with the SEC and
the date of this Agreement, no event has occurred that would be required to be
reported by the Company pursuant to Item 404 of Regulation S-K promulgated by
the SEC.
3.25. COMPANY REQUISITE VOTE. The affirmative vote of the holders of a
majority of the Company Shares outstanding on the record date for the Special
Meeting (the "Company Requisite Vote") is the only vote of the holders of any
class or series of the Company's capital stock necessary to adopt this Agreement
or consummate the transaction contemplated by this Agreement, including the
Merger.
32
3.26. SECTION 203 OF THE DGCL; COMPANY RIGHTS AGREEMENT. Assuming the
accuracy of the representations and warranties contained in Sections 4.4 and
4.7, the Company Board has taken all action necessary to render Section 203 of
the DGCL inapplicable to the Merger and all of the transactions contemplated by
this Agreement. The Company has amended the Company Rights Agreement to provide
that neither Parent nor Merger Sub shall be deemed to be an Acquiring Person (as
such term is defined in the Company Rights Agreement), that neither a
Distribution Date nor a Stock Acquisition Date (as such terms are defined in the
Company Rights Agreement) shall be deemed to occur and that the Company Rights
will not separate from the Company Shares, in each case, as a result of the
execution, delivery or performance of this Agreement, and that the Company
Rights shall terminate in accordance with the Company Rights Agreement
immediately prior to the Effective Time.
3.27. OPINION OF FINANCIAL ADVISOR. The Company Board has received the
opinion of Xxxxxxx, Xxxxx & Co. to the effect that, as of the date of such
opinion and subject to various qualifications and assumptions, the Merger
Consideration is fair, from a financial point of view, to the holders of Company
Shares (other than Parent, Merger Sub and any of their affiliates), and such
opinion has not been modified or withdrawn prior to the date of this Agreement.
3.28. BROKERS. No broker, finder or investment banker (other than Xxxxxxx,
Sachs & Co.) is entitled to any brokerage, finder's or other similar fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of the Company. The Company has
delivered to Parent complete and correct copies of all Contracts under which any
such fees or commissions are payable and all indemnification and other Contracts
related to the engagement of the Persons to whom such fees are payable. The
methodology, basis and formula for calculating fees and expenses of any
accountant, broker, financial advisor, consultant, legal counsel, proxy
solicitor or other Person retained by or on behalf of the Company or any Company
Subsidiary in connection with this Agreement or the transactions contemplated
hereby are set forth in Part 3.28 of the Company Disclosure Schedule.
3.29. XXXXXXX MERGER AGREEMENT. The Company has paid to Xxxxxxx the
termination fee payable pursuant to the Xxxxxxx Merger Agreement (the "Company
Termination Fee"). The Xxxxxxx Merger Agreement has been terminated and, except
for Sections 7.2, 7.3 and 8 thereof, the Xxxxxxx Merger Agreement is of no
further force or effect.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub hereby jointly and severally represent and warrant to
the Company that:
33
4.1. DUE ORGANIZATION. Each of Parent and Merger Sub is a corporation duly
organized, validly existing and in good standing under the laws of Delaware and
has all requisite corporate power and authority necessary to carry on its
business as it is now being conducted except where the failure to be so
organized, existing or in good standing, individually or in the aggregate, would
not be reasonably likely to prevent or materially delay the consummation of any
of the transactions contemplated herein. Since its date of incorporation, Merger
Sub has not carried on any business or conducted any operations other than the
execution of this Agreement, the performance of its obligations hereunder and
matters ancillary thereto.
4.2. AUTHORITY; BINDING NATURE OF AGREEMENT. Parent has the requisite
corporate power and authority to enter into and to perform its obligations under
this Agreement. The board of directors of Parent, at a meeting duly called and
held, has authorized and approved the execution, delivery and performance of
this Agreement by Parent. The execution and delivery of this Agreement by Parent
and the consummation by Parent of the transactions contemplated by this
Agreement have been duly authorized by all necessary corporate action on the
part of Parent, and no other corporate proceedings on the part of Parent are
necessary to authorize this Agreement. This Agreement has been duly and validly
executed and delivered by Parent and, assuming the due authorization, execution
and delivery of this Agreement by the Company, constitutes the valid and binding
obligation of Parent, enforceable against Parent in accordance with its terms,
subject to: (i) laws of general application relating to bankruptcy, insolvency
and the relief of debtors; and (ii) rules of law governing specific performance,
injunctive relief and other equitable remedies. Merger Sub is a newly formed,
wholly-owned Subsidiary of Parent and has the requisite corporate power and
authority to enter into and to perform its obligations under this Agreement. The
board of directors of Merger Sub has authorized and approved the execution,
delivery and performance of this Agreement by Merger Sub. The execution and
delivery of this Agreement by Merger Sub and the consummation by Merger Sub of
the transactions contemplated by this Agreement have been duly authorized by all
necessary corporate action on the part of Merger Sub, and no other corporate
proceedings on the part of Merger Sub are necessary to authorize this Agreement
other than, with respect to the Merger, the filing of the appropriate merger
documents as required by the DGCL. Parent, as the sole stockholder of Merger
Sub, will vote to adopt this Agreement immediately after the execution and
delivery of this Agreement. This Agreement has been duly executed and delivered
by Merger Sub and, assuming the due authorization, execution and delivery of
this Agreement by the Company, constitutes the valid and binding obligation of
Merger Sub, enforceable against Merger Sub in accordance with its terms, subject
to: (1) laws of general application relating to bankruptcy, insolvency and the
relief of debtors; and (2) rules of law governing specific performance,
injunctive relief and other equitable remedies.
4.3. NON-CONTRAVENTION; CONSENTS. The execution and delivery of this
Agreement by Parent and Merger Sub, and the consummation by Parent or Merger Sub
of the Merger and the other transactions contemplated by this Agreement, will
not: (a) cause a violation of any of the provisions of the certificate of
incorporation or bylaws of Parent or Merger Sub; or (b) cause a violation by
Parent or Merger Sub of any Legal Requirement applicable to Parent or Merger
Sub; except in the case of clause (b) as
34
would not be reasonably likely to prevent or materially delay the consummation
of any of the transactions contemplated herein. Except (i) as may be required by
the Securities Act, the Exchange Act, the DGCL, the HSR Act or the antitrust or
competition laws of foreign jurisdictions, or (ii) as set forth on Part 4.3 of
the disclosure schedule delivered to the Company on the date of this Agreement
(the "Parent Disclosure Schedule"), Parent is not required to make any filing
with or to obtain any consent from any Person in connection with the execution
and delivery of this Agreement by Parent or Merger Sub or, the consummation by
Parent or Merger Sub of any of the transactions contemplated by this Agreement,
except where the failure to make any such filing or obtain any such consent
would not be reasonably likely to prevent or materially delay the consummation
of any of the transactions contemplated herein. No vote of Parent's stockholders
is necessary to adopt this Agreement or to approve any of the transactions
contemplated by this Agreement.
4.4. NOT AN INTERESTED STOCKHOLDER. Neither Parent nor any of its
Affiliates is an "interested stockholder" (as such term is defined in Section
203 of DGCL) of the Company.
4.5. FINANCING. Parent has available cash resources and financing in an
amount sufficient to enable Merger Sub to consummate the Merger and to enable
Parent to pay the Merger Consideration and otherwise perform its obligations
under this Agreement. Without limiting the foregoing: (a) Merger Sub has
delivered to the Company true and complete copies of executed commitment
letters, dated April 24, 2007 from General Electric Capital Corporation, UBS
Loan Finance LLC and UBS Securities LLC (the "Debt Commitment Letters"),
pursuant to which the lender parties thereto have committed, subject to the
terms and conditions thereof, to lend the amounts set forth therein for the
purpose of funding the consideration payable by Parent and Merger Sub in respect
of the Company Shares and Company Options to be cancelled and terminated in
exchange for a cash payment pursuant to Section 5.9(b) hereof (the "Debt
Financing"). As of the date of this Agreement: (i) the Debt Commitment Letters
have not been amended or modified; and (ii) none of the commitments contained in
the Debt Commitment Letters have been withdrawn or rescinded in any respect.
There are no conditions precedent or other contingencies related to the funding
by such lenders of the full amount of the Debt Financing, other than as set
forth in or contemplated by the Debt Commitment Letters. As of the date of this
Agreement, and assuming the accuracy of the Company's representations set forth
in this Agreement and the Company's compliance with its covenants set forth in
this Agreement, in each case such that the conditions to the Debt Financing
contemplated by the Debt Commitment Letters are satisfied, neither Parent nor
Merger Sub has any reason to believe that it will be unable to satisfy on a
timely basis any term or condition to be satisfied by it contained in the Debt
Commitment Letters. Parent or Merger Sub will fully pay any and all commitment
fees that are incurred and are due and payable in connection with the Debt
Financing as and when they become payable.
4.6. INFORMATION IN PROXY STATEMENT. None of the written information
supplied or to be supplied by or on behalf of Parent expressly for inclusion in
the Proxy Statement will, at the time the Proxy Statement is mailed to the
stockholders of the
35
Company or at the time of the Special Meeting (or any adjournment or
postponement thereof), 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 the light of the circumstances under which
they are made, not misleading.
4.7. OWNERSHIP OF COMPANY SHARES. As of April 24, 2007, Parent and its
Affiliates directly and indirectly own 750,000 Company Shares, beneficially or
otherwise, including any securities, contracts or obligations convertible into
or exercisable or exchangeable for Company Shares.
SECTION 5. COVENANTS
5.1. INTERIM OPERATIONS OF THE COMPANY. Except: (i) to the extent Parent
shall otherwise consent in writing (which consent may be withheld or delayed in
Parent's sole discretion, except in the case of Section 5.1(f), 5.1(m), 5.1(n),
5.1(o), or 5.1(u), for which Parent may not unreasonably withhold or delay its
consent); (ii) as set forth in Part 5.1 of the Company Disclosure Schedule; or
(iii) as expressly required by this Agreement, the Company agrees that, during
the period from the date of this Agreement through the earlier of the Effective
Time or the date of the valid termination of this Agreement in accordance with
Section 7.1, the Company shall and shall cause each Company Subsidiary to: (A)
use commercially reasonable efforts to: (i) conduct their businesses in the
Ordinary Course of Business, (ii) preserve intact their present business
organizations, (iii) maintain satisfactory relations with and keep available the
services of their current officers and other key employees, (iv) preserve
existing relationships with material customers, lenders, suppliers, distributors
and others having material business relationships with the Company and or any
Company Subsidiary and (B) not:
(A) amend its certificate of incorporation or bylaws (except as
required to effectuate the Merger) or equivalent organizational documents;
(B) split, combine, subdivide or reclassify any shares of its capital
stock;
(C) declare, set aside or pay any dividend (whether payable in cash,
stock or property) with respect to any shares of its capital stock (except with
respect to shares of the capital stock of a Company Subsidiary that is directly
or indirectly wholly-owned by the Company);
(D) form any Subsidiary;
(E) issue, sell, pledge, transfer, deliver, dispose of or encumber any
shares of, or securities convertible or exchangeable for, or options or rights
to acquire, any shares of its capital stock, voting securities, phantom stock,
phantom stock rights, stock based performance units or other securities that
derive their value by reference to such capital stock or voting securities,
other than: (i) the issuance of Company Shares upon the exercise of Company
Options outstanding as of the date of this Agreement and listed in Part 3.5 of
the Company Disclosure Schedule in accordance with their present
36
terms; (ii) the issuance of Company Shares upon the exercise of Company Rights;
(iii) the grant of Company Options, with a per share exercise price equal to the
closing price of a Company Share on the date of grant, to employees in the
Ordinary Course of Business, not to exceed options to purchase more than 75,000
Company Shares in the aggregate; and (iv) the issuance of Company Shares under
the Company ESPP;
(F) transfer, lease, or license to any third party, or Encumber
(except for Permitted Encumbrances), any material assets of the Company or any
Company Subsidiary other than: (i) sales in the Ordinary Course of Business;
(ii) leases or rentals of equipment in the Ordinary Course of Business; (iii)
dispositions of obsolete equipment; or (iv) Encumbrances permitted by Section
5.1(j)(iv) below;
(G) repurchase, redeem or otherwise acquire or offer to repurchase,
redeem or otherwise acquire any shares of its capital stock, except shares
repurchased from employees or former employees of the Company or any Company
Subsidiary upon the exercise of repurchase rights pursuant to and in accordance
with the terms of a Contract in effect on the date of this Agreement (a true and
complete copy of which has been made available to Parent);
(H) acquire (whether pursuant to merger, stock or asset purchase or
otherwise) or lease (i) any asset or assets in one transaction or any series of
related transactions involving payments (whether to be made at or after the time
of such transaction or transactions) in excess of $1,000,000 individually or
$10,000,000 in the aggregate or that would adversely affect the ability of
Parent or the Company to obtain approval of the Merger under the HSR Act or the
antitrust or anti-competition Legal Requirements of foreign countries, except
for (A) purchases of raw materials, equipment and supplies in the Ordinary
Course of Business or (B) capital expenditures (which are subject to subsection
(u) below), or (ii) any equity interests in any Person or any business or
division of any Person (except for marketable securities acquired by the Company
from time to time in connection with its normal cash management activities) or
all or substantially all of the assets of any Person (or business or division
thereof);
(I) merge or consolidate with any Person (other than a merger among
wholly-owned Company Subsidiaries), or enter into any agreement with respect to
the voting of its capital stock or other securities held by the Company or any
Company Subsidiary;
(J) incur, issue, repurchase, modify or assume any Indebtedness or
guarantee any such Indebtedness, except for: (i) short-term borrowings incurred
in the Ordinary Course of Business made or incurred in connection with the
purchase of raw materials, equipment and supplies and on terms consistent with
past practices; and (ii) borrowings pursuant to existing credit facilities, or
pursuant to any modification, renewals or replacements of any such credit
facilities that do not exceed $500,000 in the aggregate; (iii) borrowings under
any new credit facility that do not exceed $500,000 in the aggregate; and (iv)
entry into capital leases in the Ordinary Course of Business (and the grant of
security interests in the Ordinary Course of Business in connection therewith).
37
(K) assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, contingently or otherwise) for the obligations of
any other Person; or make any loans, advances or capital contributions to, or
investments in, any other Person other than (A) loans, advances or capital
contributions to, or investments in, a Company Subsidiary that is directly or
indirectly wholly-owned by the Company in the Ordinary Course of Business, (B)
advances to employees in respect of travel and other expenses in the Ordinary
Course of Business, and (C) investments made by the Company in marketable
securities in connection with its normal cash management activities;
(L) (A) increase benefits under any Company Plan, (B) increase or
otherwise change the method for funding or insuring benefits under any Company
Plan, except as required by applicable Legal Requirements, (C) (i) establish,
adopt, enter into, amend or terminate any Company Plan that is an "employee
benefit plan" as defined in Section 3(3) of ERISA or other any other arrangement
that would be an employee benefit plan under ERISA if it were in existence as of
the date of this Agreement, except as required by applicable Legal Requirements,
or (ii) establish, adopt, enter into, amend or terminate any collective
bargaining agreement, Company Plan that is not an employee benefit plan under
ERISA or any plan, agreement, program, policy, trust, fund or other arrangement
that would be a Company Plan that is not an employee benefit plan under ERISA if
it were in existence as of the date of this Agreement, except in the Ordinary
Course of Business or as required by applicable Legal Requirements, (D) grant
any increase in the rates of salaries, compensation or fringe or other benefits
payable to any Executive (other than as required by applicable Legal
Requirements or pursuant to non-discretionary provisions of Contracts in effect
as of the date hereof that have been disclosed to Parent, (E) grant any increase
in the rates of salaries, compensation or fringe or other benefits payable to
any employee other than an Executive, except (i) regular cost of living
increases in the Ordinary Course of Business, (ii) merit based increases in the
Ordinary Course of Business or (iii) equity adjustments (i.e. market based
increases) in an amount that does not exceed the lesser of (A) 10% of the
employee's base salary before the increase or (B) $10,000 and, in any event, to
no more than 20% of the Company's or any Company Subsidiary's employees as of
the date of this Agreement) and except, with respect to all of the foregoing,
for increases that are required by Legal Requirements or pursuant to
non-discretionary provisions of Contracts in effect as of the date hereof that
have been disclosed to Parent, (F) grant or pay any bonus of any kind or amount
whatsoever to any current or former director or officer or any employee of the
Company or any Company Subsidiary (other than commissions payable to sales
personnel in accordance with plans in effect as of the date of this Agreement
and consistent with past practice and, with respect to employees that are not
officers, pursuant to the non-discretionary provisions of Contracts in effect as
of the date of this Agreement), (G) grant or pay any severance or termination
pay or increase in any manner the severance or termination pay of any current or
former director, officer, employee or consultant of the Company or any Company
Subsidiary outside the Ordinary Course of Business and other than as required by
applicable Legal Requirements or pursuant to non-discretionary provisions of
Contracts in effect as of the date hereof that have been disclosed to Parent,
(H) waive any material restrictions in any Company Plan or agreements or awards
made thereunder, (I) amend or modify any Company Option, except as required
pursuant to this Agreement or by applicable Legal Requirements, (J)
38
take any action to secure, accelerate or accelerate the vesting of the payment
after the Effective Time of compensation or benefits under any employee plan,
Contract or Company Plan, other than as required by applicable Legal
Requirements or pursuant to non-discretionary provisions of Contracts in effect
as of the date hereof that have been disclosed to Parent, (K) fail to take such
action as would be reasonable under the circumstances to enforce any rights of
the Company or any Company Subsidiary under any employment agreement, severance
agreement, noncompete agreement, nonsolicitation agreement, covenant not to
disclose, confidential information or other similar agreement with respect to
any current or former employee or independent contractor of the Company or any
Company Subsidiary in effect as of the date of this Agreement, or (L) materially
change any actuarial or other assumption used to calculate funding obligations
with respect to any Company Plan or change the manner in which contributions to
any Company Plan are made or the basis on which such contributions are
determined;
(M) plan, announce, implement or effect any material reduction in
labor force, lay-off, early retirement program, or severance program involving
the termination of employment of employees of the Company or any Company
Subsidiary other than routine employee performance-related terminations;
(N) settle or compromise any Legal Proceeding (whether or not
commenced prior to the date of this Agreement), other than settlements or
compromises of Legal Proceedings where the amount paid (after giving effect to
insurance proceeds actually received) in settlement or compromise does not
exceed the Company's reserves on its books therefor by more than $500,000, or
for any Legal Proceeding for which the Company has not yet reserved, in an
amount therefor that does not exceed $500,000;
(O) except as expressly permitted under Section 5.1(k), enter into any
new, or materially amend or prematurely terminate any current, Material Contract
or waive, release or assign any material rights or claims under any Material
Contract (except in the Ordinary Course of Business or where the failure to
amend or terminate a Material Contract would, in the reasonable judgment of the
Company Board, have a material adverse impact on the Company);
(P) enter into any new or renew or amend any existing Contract
relating to the distribution of the Company's or any of the Company
Subsidiaries' products under which the Company or a Company Subsidiary is
obligated or could be expected to pay or receive more than $250,000 in any
fiscal year and that is not terminable or cancelable by the Company on less than
91 days notice after the Effective Time.
(Q) fail to maintain any material Intellectual Property Rights of the
Company or fail to take such actions as are reasonable to enforce or prosecute
the Intellectual Property Rights of the Company in any material respect;
(R) change any of its methods of accounting or accounting practices in
any material respect, other than changes required under GAAP;
39
(S) revalue in any material respect any of its assets, including
writing down the value of inventory or writing down notes or accounts
receivable, other than in the Ordinary Course of Business or as required under
GAAP or any Legal Requirement;
(T) except as provided in Part 5.1(t) of the Company Disclosure
Schedule, (i) make or amend any material Tax election, (ii) settle any material
Tax liability, (iii) change any annual Tax accounting period, (iv) change any
method of Tax accounting, (v) file any material amendment to a Tax Return, enter
into any closing agreement relating to any material Tax, (vii) surrender any
right to claim a material Tax refund, or (viii) consent to any extension or
waiver of the statute of limitations period applicable to any material Tax claim
or assessment;
(U) make any capital expenditure (including pursuant to leases) that
is not contemplated by the capital expenditure budget set forth in Part 5.1(u)
of the Company Disclosure Schedule (a "Non-Budgeted Capital Expenditure"),
except that the Company or any Subsidiary of the Company: (i) may make any
Non-Budgeted Capital Expenditure that does not individually exceed $100,000 in
amount; and (ii) may make any Non-Budgeted Capital Expenditure that, when added
to all other Non-Budgeted Capital Expenditures made by the Company and the
Company Subsidiaries since the date of this Agreement, would not exceed $500,000
in the aggregate;
(V) waive, release or assign any claims or rights of material value;
(W) take any action to exempt any Person from, or make any Person not
subject to, any state takeover law or state law that purports to limit or
restrict business combinations or the ability to acquire or vote shares (other
than Parent, Merger Sub or any Subsidiary of Parent or Merger Sub);
(X) adopt a plan of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization or other reorganization
of the Company or any Company Subsidiary (other than the Merger);
(Y) take any action which would, directly or indirectly, restrict or
impair the ability of Parent to vote, or otherwise to exercise the rights and
receive the benefits of a stockholder with respect to, securities of the Company
acquired or controlled or to be acquired or controlled by Parent;
(Z) change (including by way of amendment, modification, or failure to
renew) any insurance coverage in any material respect, including providing for
self insurance by the Company or any Company Subsidiary for risks and
liabilities for which the Company or any Company Subsidiary formerly held third
party insurance;
(AA) take, or agree in writing or otherwise to take, any action that
would or is reasonably likely to result in any of the conditions to the Merger
set forth in Section 6 hereto or any of the conditions or requirements to the
Merger set forth in Annex I not being satisfied, or would make any
representation or warranty of the Company contained herein inaccurate in any
material respect at, or as of any time prior to, the Effective Time,
40
or that would materially impair the ability of the Company to consummate the
Merger in accordance with the terms hereof or materially delay such
consummation;
(BB) pay any success fee to its advisors or agents in connection with
the execution and delivery of this Agreement or the completion of the
transactions contemplated hereby, except pursuant to non-discretionary
provisions of Contracts in effect as of the date of this Agreement; or
(CC) except as permitted in Section 7.1(f), authorize or enter into a
Contract or arrangement to take any of the actions described in clauses "(a)"
through "(bb)" of this sentence.
5.2. NO SOLICITATION.
(A) At all times during the period commencing with the execution and
delivery of this Agreement and continuing until the earlier to occur of the
termination of this Agreement pursuant to Section 7.1 hereof and the Effective
Time, the Company shall not, and shall cause all of the Company Subsidiaries and
the Company's and such Company Subsidiaries' directors, officers, employees,
Affiliates, investment bankers, attorneys or other agents or representatives
(collectively, "Representatives") not to (and in any event the Company shall not
authorize any of such Persons to), directly or indirectly (i) solicit, initiate,
knowingly encourage, knowingly induce or knowingly facilitate the making,
submission or announcement of an Acquisition Proposal or Acquisition Inquiry;
(ii) furnish to any Person any non-public information relating to the Company in
response to or in connection with an Acquisition Proposal or Acquisition Inquiry
(for avoidance of doubt, it being understood that the foregoing shall not
prohibit the Company from furnishing, in the Ordinary Course of Business, any
non-public information to (A) any actual or potential customer, supplier,
distributor, licensor, licensee, partner or other Person to the extent necessary
to facilitate any business dealings between the Company and such actual or
potential customer, supplier, distributor, licensor, licensee, partner or other
Person that are unrelated to any Acquisition Proposal or any Acquisition Inquiry
and are not prohibited by the terms of Section 5.1, or (B) a Governmental
Entity); (iii) participate or engage in discussions or negotiations with any
Person with respect to an Acquisition Proposal or Acquisition Inquiry (for
avoidance of doubt, it being understood that the foregoing shall not prohibit
the Company or any of its advisors or representatives from making such Person
aware of the restrictions of this Section 5.2 in response to the receipt of an
Acquisition Proposal, nor shall it prohibit the Company from engaging in
discussions with its advisors or representatives to the extent reasonably
necessary to assist the Company in determining how to properly respond to such
Acquisition Proposal or Acquisition Inquiry); or (iv) except as permitted
pursuant to Section 5.3, approve, endorse or recommend to the Company's
stockholders any Acquisition Proposal; provided, however, that notwithstanding
anything to the contrary contained in this Agreement, at any time prior to the
adoption of this Agreement at the Special Meeting, the Company may, directly or
indirectly through its Representatives, (A) engage or participate in discussions
or negotiations with any Person (and may engage or participate in discussions or
negotiations with such Person's Representatives and potential financing sources)
that has (1) made a bona fide Acquisition Proposal in writing
41
that the Company Board determines in good faith After Consultation constitutes
or is reasonably likely to lead to a Superior Proposal and (2) to the extent the
Company is prohibited from disclosing such discussions or negotiations or the
information exchanged in connection therewith, provided the Company with written
acknowledgement that such discussions or negotiations and the information
exchanged in connection therewith will be disclosed to Parent and its
Representatives, and (B) furnish to any such Person described in clause (A)
above (including to such Person's Representatives and potential financing
sources) any non-public information relating to the Company and its Subsidiaries
pursuant to a confidentiality agreement (whether executed before or after the
date of this Agreement), the terms of which are no less favorable in any
material respect to the Company than those contained in the Confidentiality
Agreement (provided that, for the avoidance of doubt such Confidentiality
Agreement is not required to contain standstill provisions) (it being understood
that none of the actions described in this proviso, shall, to the extent taken
in accordance with this proviso, be prohibited by the preceding terms of this
Section 5.2(a)); and provided further, that in the case of any action taken
pursuant to clause (A) or clause (B) above, (1) the Company Board received such
Acquisition Proposal other than as a result of a breach or violation of the
terms of this Section 5.2, (2) the Company Board shall first have determined in
good faith, After Consultation, that the failure to take such action does or
would reasonably be likely to constitute a breach of its fiduciary obligations
to the Company's stockholders under applicable Legal Requirements; (3) at least
48 hours prior to initially engaging or participating in any such discussions or
negotiations with, or initially furnishing any non-public information to, such
Person, the Company gives Parent written notice of the identity of such Person
and all of the material terms and conditions of such Acquisition Proposal and of
the Company's intention to engage or participate in discussions or negotiations
with, or furnish non-public information to, such Person, and (4)
contemporaneously with furnishing any non-public information to such Person, the
Company furnishes such non-public information to Parent (to the extent such
information has not been previously furnished by the Company to Parent). Without
limiting the generality of the foregoing, the Company acknowledges and agrees
that if any Company Subsidiary or Representative of the Company or Company
Subsidiary (whether or not such Person is purporting to act on behalf of the
Company) takes any action that, if taken by the Company, would constitute a
breach of this Section 5.2(a) by the Company, then such action shall be deemed
to constitute a breach of this Section 5.2(a) by the Company.
(B) In addition to the obligations of the Company set forth in Section
5.2(a) hereof, the Company shall promptly, and in all cases within one business
day of its receipt, advise Parent orally (to be confirmed in writing as soon as
practicable thereafter) of the receipt by the Company of any Acquisition
Proposal or Acquisition Inquiry, including the material terms and conditions of
such Acquisition Proposal or Acquisition Inquiry and the identity of the Person
or group making any such Acquisition Proposal or Acquisition Inquiry. The
Company shall keep Parent informed as promptly as practicable (and in any event
within 24 hours) of any material change in the status of or material change in
the proposed terms and conditions of (including all material amendments or
proposed material amendments to), any such Acquisition Proposal or Acquisition
Inquiry. In fulfilling its obligations under this Section 5.2(b), the Company
shall provide or make available promptly (and in any event within 24 hours) to
Parent copies of all written
42
correspondence or other written material, including material in electronic form,
between the Company, any Company Subsidiary or their respective Representatives
and such third party or its Representatives delivered in connection with any
Acquisition Proposal or Acquisition Inquiry.
(C) Upon the execution and delivery of this Agreement, the Company
shall immediately cease and cause to be terminated any existing discussions with
any Person that relate to any Acquisition Proposal or Acquisition Inquiry.
(D) Unless the Company Board shall first have determined in good
faith, After Consultation, that the failure to take the following actions does
or would reasonably be likely to constitute a breach of its fiduciary
obligations to the Company's stockholders under applicable Legal Requirements,
the Company (i) agrees not to release or permit the release of any Person from,
or to waive or permit the waiver of any provision of, any confidentiality,
standstill or similar agreement to which the Company is a party or under which
the Company has any rights and (ii) will use its best efforts to enforce or
cause to be enforced each such agreement at the request of Parent; provided,
however, that the expiration or termination of such agreement or provision of
such agreement by its own terms shall not be considered to be a violation of the
foregoing clause "(i)" or "(ii)" by the Company. The Company also shall promptly
(but in no event later than five business days after the execution of this
Agreement) request each Person that since January 1, 2005 has executed a
confidentiality agreement in connection with its consideration of a possible
Acquisition Transaction or equity investment in the Company to return (or
destroy, to the extent permitted by the terms of the applicable confidentiality
agreement) all confidential information heretofore furnished to such Person by
or on behalf of Company, subject to the terms of the applicable confidentiality
agreement; provided however, that the Company need not take the actions
described in this sentence with respect to any Person if, prior to the date of
this Agreement, the Company has made a request to such Person of the type
described in this sentence and on or after the date of such request the Company
has not furnished any additional Confidential Information.
5.3. BOARD RECOMMENDATION.
(A) Subject to the terms of Section 5.3(c) hereof, the Company Board
shall (i) make the Company Recommendation, (ii) direct that this Agreement be
submitted to the holders of the Company Shares for their adoption at the Special
Meeting, and (iii) include the Company Recommendation in the Proxy Statement.
(B) Subject to Section 5.3(c), neither the Company Board nor any
committee thereof shall (i) withdraw, qualify, modify, change or amend in any
manner adverse to the transactions contemplated by this Agreement, Parent or
Merger Sub (including pursuant to the Proxy Statement), the Company
Recommendation, the approval by the Company Board of this Agreement and the
transactions contemplated hereby, including the Merger, (ii) fail to reconfirm
the Company Recommendation or its approval of this Agreement, the Merger or any
other transaction contemplated by this Agreement promptly, and in any event
within two business days, following Parent's request to do so (A) if Parent
makes such request following the time at which an
43
Acquisition Proposal made by a third party shall have been publicly announced or
shall otherwise have become public (provided that Parent may not make such a
request on more than one occasion with respect to any particular Acquisition
Proposal unless, since any prior such request by Parent, the price or other
material terms of such Acquisition Proposal have changed) or (B) if one or more
members of the Company Board shall have taken any action publicly or that shall
have become public that indicates that such member or members of the Company
Board do not unanimously support the Merger), (iii) approve or recommend (or
propose publicly to approve or recommend) any Acquisition Proposal, (iv) if a
tender offer or exchange offer that, if successful, would result in any Person
or "group" (as defined under Section 13(d) of the Exchange Act) becoming a
beneficial owner of ten percent (10%) or more of the outstanding Company Shares
is commenced (other than by Parent or Merger Sub), fail to recommend that the
Company's stockholders not tender their Shares in such tender or exchange offer
within five business days following such commencement, (v) except in connection
with a termination of this Agreement pursuant to Section 7.1(f), permit the
Company or any Company Subsidiary to enter into any Contract (other than a
confidentiality agreement as contemplated by Section 5.2(d)), including any
letter of intent or understanding, with respect to any Acquisition Proposal, or
(vi) except in connection with a termination of this Agreement pursuant to
Section 7.1(f), resolve or propose to take any action described in clauses (i)
through (v) (each of the foregoing actions described in clauses (i) through (vi)
being referred to as a "Company Change in Recommendation").
(C) Notwithstanding anything to the contrary contained in this
Agreement, the Company Board may effect a Company Change in Recommendation at
any time (but in the case of a Company Change in Recommendation specified in
clauses "(ii)," "(iii)," or "(v)" of such definition, only prior to the time,
but not after, this Agreement is adopted by the Company Requisite Vote, if and
only if (i) the Company Board has determined in good faith (After Consultation
and after considering in good faith any counter-offer or proposal made by Parent
pursuant to Section 7.1(c)), that the Company Board is required to effect a
Company Change in Recommendation in order to comply with its fiduciary duties to
the Company's stockholders in accordance with applicable Legal Requirements,
(ii) prior to effecting such Company Change in Recommendation, the Company
provides to Parent a written notice (a "Notice of Recommendation Change") at
least three business days (or, if the Special Meeting is scheduled to occur on a
shorter period after the date the Notice of Recommendation Change is provided,
then such shorter period) prior to making such Company Change in Recommendation
of its intention to make a Company Change in Recommendation. Notwithstanding the
foregoing, the Company shall not enter into any Contract (other than a
confidentiality agreement as contemplated by Section 5.2(d)), with respect to a
Superior Proposal unless this Agreement has been or concurrently is validly
terminated by its terms pursuant to Section 7.1 and Parent has received, by wire
transfer of immediately available funds, any amounts due to Parent pursuant to
Section 7.3.
(D) Without limiting any rights or remedies of Parent or Merger Sub
set forth in this Agreement that might exist as a consequence of any such
action, nothing in this Agreement shall prohibit the Company Board from (i)
taking and disclosing to the Company's stockholders a position contemplated by
Rule 14e-2(a) promulgated under
44
the Exchange Act or complying with the provisions of Rule 14d-9 promulgated
under the Exchange Act or (ii) making any disclosures to the Company's
stockholders that the Company Board determines in good faith After Consultation
that the Company Board is required to make in order to comply with its fiduciary
duties to the Company's stockholders under Delaware Law.
5.4. MEETING OF THE COMPANY'S STOCKHOLDERS.
(A) The Company will prepare a Proxy Statement relating to the
adoption of this Agreement and approval of the Merger and shall file the Proxy
Statement with the SEC as promptly as practicable following the execution of
this Agreement; provided that Parent, Merger Sub and their counsel shall be
given a reasonable opportunity to review the Proxy Statement before it is filed
with the SEC and the Company shall give due consideration to all reasonable
additions, deletions or changes suggested thereto by Parent, Merger Sub and
their counsel with the intention that the Proxy Statement be in a form ready to
print and mail to the stockholders of the Company as soon as reasonably
practicable following the execution of this Agreement. Unless the Company shall
have effected a Company Change in Recommendation in accordance with Section
5.3(c), the Company shall include in the Proxy Statement the recommendation of
the Company Board that stockholders of the Company vote in favor of the adoption
of this Agreement and the approval of the Merger. The Company shall use its best
efforts to obtain and furnish the information required to be included by the SEC
in the Proxy Statement and, after consultation with Parent and Merger Sub,
respond promptly to any comments made by the SEC with respect to the Proxy
Statement. The Company shall provide Parent, Merger Sub and their counsel with
copies of any written comments, and shall inform them of any oral comments, that
the Company or its counsel may receive from time to time from the SEC or its
staff with respect to the Proxy Statement promptly after the Company's receipt
of such comments, and any written or oral responses thereto. Parent, Merger Sub
and their counsel shall be given a reasonable opportunity to review any such
written responses and the Company shall give due consideration to all reasonable
additions, deletions or changes suggested thereto by Parent, Merger Sub and
their counsel. The Company, on the one hand, and Parent and Merger Sub, on the
other hand, agree to promptly correct any information provided by it for use in
the Proxy Statement if and to the extent that it shall have become false or
misleading in any material respect or as otherwise required by law and, the
Company further agrees to take all steps necessary to cause the Proxy Statement,
as so corrected (if applicable), to be filed with the SEC and, if any such
correction is made following the mailing of the Proxy Statement as provided in
Section 5.4(b)(ii), mailed to holders of Company Shares, in each case as and to
the extent required by the Exchange Act.
(B) The Company, acting through the Company Board, shall as promptly
as practicable following the execution of this Agreement and in accordance with
applicable Legal Requirements:
(i) (A) duly set a record date for, call and establish a date
for, and give notice of, the Special Meeting (with the record date and
meeting date each set for a date as soon as reasonably practicable after
the execution of this
45
Agreement and in consultation with Parent and Merger Sub), and (B) convene
and hold the Special Meeting;
(ii) cause the definitive Proxy Statement to be mailed to its
stockholders; and
(iii) unless the Company has effected a Company Change in
Recommendation in accordance with Section 5.3(c), use its best efforts to
solicit from its stockholders proxies in favor of the adoption of this
Agreement and the approval of the Merger and take all other action
reasonably necessary or advisable to secure the approval of stockholders
required by the DGCL and any other applicable Legal Requirements to effect
the Merger.
At the Special Meeting, Parent shall ensure that all Company Shares owned
beneficially or of record by Parent, Merger Sub or any of Parent's other
Affiliates will be voted in favor of the adoption of this Agreement and approval
of the Merger.
5.5. FILINGS; OTHER ACTION.
(A) Each of the Company, Parent and Merger Sub shall: (i) promptly
make and effect all registrations, filings and submissions required to be made
or effected by it pursuant to the HSR Act, the Exchange Act and other applicable
Legal Requirements with respect to the Merger; and (ii) use their commercially
reasonable efforts to cause to be taken, on a timely basis, all other actions
necessary or appropriate for the purpose of consummating and effectuating the
transactions contemplated by this Agreement. Without limiting the generality of
the foregoing, each of Parent and Merger Sub: (A) shall promptly provide all
information requested by any Governmental Entity in connection with the Merger
or any of the other transactions contemplated by this Agreement; (B) shall use
its commercially reasonable efforts to promptly take, and cause its Affiliates
to take, all actions and steps necessary to obtain any clearance or approval
required to be obtained from the U.S. Federal Trade Commission, the U.S.
Department of Justice, the U.S. Department of State, the U.S. Department of
Defense, any state attorney general, any foreign competition authority or any
other Governmental Entity in connection with the transactions contemplated by
this Agreement. Notwithstanding anything set forth in this Agreement, in
connection with the receipt of any necessary approvals or clearances of a
Governmental Entity (including under the HSR Act), neither Parent nor the
Company shall be required to sell, hold separate or otherwise dispose of or
conduct their business in a specified manner, or agree to sell, hold separate or
otherwise dispose of or conduct into or agree to enter into a voting trust
arrangement, proxy arrangement, "hold separate" agreement or arrangement or
similar agreement or arrangement with respect to the assets, operations or
conduct of their business in a specified manner, or permit the sale, holding
separate or other disposition of, any assets of Parent, the Company or their
respective Subsidiaries.
(B) Without limiting the generality of anything contained in Section
5.5(a), each party hereto shall: (i) give the other parties prompt notice of the
making or commencement of any request, inquiry, investigation, action or Legal
Proceeding by or
46
before any Governmental Entity with respect to the Merger or any of the other
transactions contemplated by this Agreement; (ii) keep the other parties
informed as to the status of any such request, inquiry, investigation, action or
Legal Proceeding; and (iii) promptly inform the other parties of any
communication to or from the Federal Trade Commission, the Department of Justice
or any other Governmental Entity regarding the Merger. Each party hereto will
consult and cooperate with the other parties and will consider in good faith the
views of the other parties in connection with any analysis, appearance,
presentation, memorandum, brief, argument, opinion or proposal made or submitted
in connection with any such request, inquiry, investigation, action or Legal
Proceeding. In addition, except as may be prohibited by any Governmental Entity
or by any Legal Requirement, in connection with any such request, inquiry,
investigation, action or Legal Proceeding, each party hereto will permit
authorized representatives of the other parties to be present at each meeting or
conference relating to such request, inquiry, investigation, action or Legal
Proceeding and to have access to and be consulted in connection with any
document, opinion or proposal made or submitted to any Governmental Entity in
connection with such request, inquiry, investigation, action or Legal
Proceeding.
(C) Without limiting the generality of anything contained in Section
5.5(a) or 5.4(b), but subject thereto, Parent and Merger Sub shall use their
commercially reasonable efforts to cause all conditions set forth in Sections
6.1 and 6.3 to be satisfied on a timely basis (to the extent the satisfaction of
such conditions set forth in Sections 6.1 and 6.3 is within Parent's or Merger
Sub's direct or indirect control) and to cause Merger Sub to consummate the
Merger on the earliest possible date.
5.6. ACCESS. Upon reasonable notice, the Company shall, and shall cause its
Subsidiaries to, afford Parent and Parent's Representatives reasonable access,
during normal business hours throughout the period prior to the Effective Time,
to its books and records and, during such period, the Company shall, and shall
cause its Subsidiaries to, furnish promptly to Parent all readily available
information concerning its business as Parent may reasonably request; provided,
however, that none of the Company or any of its Subsidiaries shall be required
to permit any inspection or other access, or to disclose any information, that
in its reasonable judgment would: (a) constitute, or result in any, disclosure
(whether or not to a third party) of any trade secrets concerning its technical
processes, including formulas, compositions of reagents, methods for production
and use of reagents, computer processes (including source code) used for
research purposes, methods for production of polypeptides or nucleic acids
(including antibodies), and sequences of specific polypeptides or nucleic acids
(including antibodies); (b) result in the disclosure of any trade secrets of
third parties; (c) violate any of its obligations with respect to
confidentiality; (d) jeopardize protections afforded it under the
attorney-client privilege or the attorney work product doctrine; (e) violate any
Legal Requirement; or (f) materially interfere with the conduct of its business;
provided, however, that in each of the forgoing cases, the Company shall use
commercially reasonable efforts to provide Parent with any such inspection,
access or disclosure (except for inspection, access and disclosure with respect
to the Confidential Agreement), provided to (i) any third party as set forth in
Item 4(b) of the Company's Schedule 14D-9 filed with the SEC on April 2, 2007,
as amended from time to time, and/or (ii) any third party in compliance with the
47
terms of this Agreement, including Section 5.2 hereof. All information obtained
by Parent or and its Representatives pursuant to this Section 5.6 shall be
treated as "Confidential Information" for purposes of the Confidentiality
Agreement and shall not affect or be deemed to modify any representation or
warranty made by the Company in this Agreement. The Company shall furnish
promptly to Parent a copy of each report, schedule, registration statement and
other document filed by it or its Subsidiaries during such period pursuant to
the requirements of federal or state securities Legal Requirements to the extent
that such report, schedule, registration statement or other document is not
publicly available on XXXXX.
5.7. INTERIM OPERATIONS OF MERGER SUB. During the period of time between
the date of this Agreement and the Effective Time, Merger Sub shall not engage
in any activities of any nature except as provided in or contemplated by this
Agreement.
5.8. PUBLICITY. Except as otherwise required by Legal Requirements, the
initial press release relating to this Agreement shall be a joint press release
issued by the Company and Parent, and thereafter the parties hereto shall
consult with each other and give due consideration to any reasonable additions,
deletions or changes suggested by the other party and its counsel prior to
issuing any press releases or otherwise making public statements with respect to
the transactions contemplated by this Agreement and prior to making any filings
with any Governmental Entity with respect to the transactions contemplated by
this Agreement; provided, however, that the Company need not consult with Parent
in connection with any press release or public statement to be issued or made
with respect to any Acquisition Proposal or with respect to any Company Change
in Recommendation. The Company and its counsel shall be given a reasonable
opportunity to review and comment on any materials that are to be presented
during any road shows conducted in connection with the financing of the
transactions contemplated herein, and Parent shall give due consideration to all
reasonable additions, deletions or changes suggested thereto by the Company and
its counsel. Notwithstanding anything to the contrary contained in this Section
5.8, Parent and Merger Sub may utilize such materials in substantially the form
presented (after consideration of any comments received from the Company or its
counsel) and make public statements consistent with such materials during the
road show, without any further consultation, approval, review or commentary from
the Company or its counsel.
5.9. STOCK OPTIONS/ESPP.
(A) Pursuant to this Agreement, each Company Option (other than any
options granted under the Company ESPP) outstanding immediately prior to the
Effective Time shall become fully vested and exercisable at the Effective Time;
provided, however, that, to the extent consistent with applicable Legal
Requirements, any Company Option held by a person who, immediately prior to the
Effective Time, does not have a status that entitles such person to accrue
service towards increased vesting in such Company Option (such as a person on a
leave of absence or a part-time employee) shall not become fully vested and
exercisable unless and until such person returns to a status that would entitle
such person to accrue service towards increased vesting in such Company Option.
Except as provided in Section 5.9(b) below, each Company Option outstanding as
of the
48
Effective Time shall be assumed by Parent and converted into a fully vested and
exercisable option to acquire Parent Shares (any Company Options that are
assumed pursuant to this Section 5.9(a) are referred to as the "Assumed
Options"). Each Assumed Option shall continue to be subject to the terms and
conditions (other than vesting and exercisability terms as modified by this
Section 5.9(a)) set forth in the applicable Company Option Plan and the option
agreement evidencing such Company Option, except that the exercise price and
number of Parent Shares subject to each Assumed Option shall be determined as
follows: (i) the number of Parent Shares subject to such Assumed Option shall be
equal to the product of (x) the number of Company Shares subject to the original
Company Option and (y) the Option Conversion Ratio, with fractional shares
rounded down to the nearest whole share and (ii) the per-share exercise price of
such Assumed Option shall be equal to (x) the per-share exercise price of the
original Company Option immediately prior to the Effective Time divided by (y)
the Option Conversion Ratio, rounded up to the nearest whole cent. The Company
shall, prior to the Effective Time, take all action and give any notices
necessary to effect the treatment of the Assumed Options contemplated by this
Section 5.9(a). It is the intention of the parties that, to the extent possible
under the circumstances, each Assumed Option shall qualify following the
Effective Time as an incentive stock option as defined in Section 422 of the
Code to the extent such Assumed Option qualified as an incentive stock option
prior to the Effective Time.
(B) Notwithstanding anything to the contrary in Section 5.9(a) above,
in the event that the conversion of a Company Option as set forth in Section
5.9(a) above would result in a per-share exercise price of the corresponding
Assumed Option of less than three percent (3%) of the Parent Share Price at the
Effective Time, then such Company Option shall be cancelled and terminated in
exchange for a cash payment (without interest) equal to the aggregate excess, if
any, of the Merger Consideration over the exercise price of such Company Option
immediately prior to the Effective Time. The Company shall, prior to the
Effective Time, take all action and give any notices necessary to effect the
treatment of the Company Options contemplated by this Section 5.9(b).
(C) The Company shall amend the Company ESPP, as necessary, (i) to
provide that prior to the Effective Time, outstanding purchase rights under the
Company ESPP shall be exercised in accordance with the terms of the Company ESPP
and each Company Share purchased pursuant to such exercise shall by virtue of
the Merger, and without any action on the part of the holder thereof, be
converted into the right to receive the Merger Consideration, and (ii) to
provide that, as and after the date hereof, no further offering periods or
purchase periods shall commence.
(D) Parent shall file with the Securities and Exchange Commission, as
soon as practicable, but in no event later than 10 business days, following the
Effective Time, a registration statement on Form S-8 with respect to Parent
Shares issuable under any Assumed Options issued under this Section 5.9 and
shall use commercially reasonable efforts to maintain the effectiveness of such
registration statement for as long as there are any Parent Shares issuable
thereunder.
49
5.10. OTHER EMPLOYEE BENEFITS.
(A) Following the Effective Time, any employee who as of the Effective
Time is employed by the Company and the Company Subsidiaries (referred to herein
individually as a "Continuing Employee" and collectively as the "Continuing
Employees") shall continue in the employment of the Parent, the Surviving
Corporation or any Subsidiary of the Parent or Surviving Corporation after the
Effective Time, provided, that to the extent such employment was "at-will"
immediately prior to the Effective Time, such employment shall continue to be
at-will and subject to termination at any time for any or no reason. Nothing in
this Agreement shall be construed to create a right in any Continuing Employee
to employment with Parent, the Surviving Corporation, or any of their respective
Subsidiaries. For the period beginning on the Effective Time through the end of
the calendar year in which the Effective Time occurs, Parent shall provide, or
cause to be provided, to each Continuing Employee compensation and employee
benefits under either the Company Plans or under employee benefit plans and
programs of Parent, the Surviving Corporation or any Subsidiary of Parent or the
Surviving Corporation (the "Parent Plans"), or under any combination of the
Company Plans and the Parent Plans.
(B) With respect to any Parent Plans that provide group medical,
dental, disability or prescription drug coverage in which any Continuing
Employees become eligible to participate after the Effective Time, Parent shall,
or shall cause the Surviving Corporation or their respective Subsidiaries to:
(i) waive (to the extent such Parent Plan is self-insured), or use commercially
reasonable efforts to waive (to the extent such Parent Plan is insured), any
exclusions for pre-existing conditions under such Parent Plans that would result
in a lack of coverage for any condition for which the applicable Continuing
Employee would have been entitled to coverage under the corresponding Company
Plan in which such Continuing Employee was an active participant immediately
before his or her transfer to the Parent Plan; (ii) waive any coverage waiting
periods under any such Parent Plans to the extent that such periods exceed the
corresponding waiting period under the corresponding Company Plan in which any
applicable Continuing Employee was an active participant immediately before his
or her transfer to any such Parent Plans (after taking into account any prior
service with the Company or its Subsidiaries credited under such Company Plan
for purposes of satisfying such waiting period); (iii) provide each applicable
Continuing Employee with credit for any co-payments deductibles and premiums for
voluntary coverage paid by such Continuing Employee before his or her transfer
to any such Parent Plans (to the same extent such credit was given under the
analogous Company Plans before such transfer) in satisfying any applicable
deductible, out-of-pocket requirements or coverage levels under any such Parent
Plans for the plan year that includes such transfer; provided that, such
Continuing Employee shall be responsible for any applicable co-payments or
premiums for voluntary coverage required to be made under such Parent Plans, and
(iv) provide each applicable Continuing Employee with credit for any unused
account balance in each Company Plan that includes a flexible spending account
before his or her transfer to any analogous Parent Plan for the plan year that
includes such transfer.
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(C) Following the Effective Time, Continuing Employees shall be
eligible to participate in a qualified cash or deferred arrangement or
arrangements under Section 401(k) of the Code sponsored by Parent or a
Subsidiary of Parent for the benefit of their eligible employees, provided that
Continuing Employees shall not be entitled to receive credit for past service
with the Company or its Subsidiaries for purposes of determining the amount of
company contributions or vesting under any qualified defined contribution or
defined benefit retirement plans sponsored or maintained by Parent, the
Surviving Corporation, or their respective Subsidiaries. Without limiting the
generality of the foregoing, Continuing Employees shall not be eligible to
participate in any Parent Plans under which new Parent employees are not
currently eligible to participate.
(D) Following the Effective Time, Continuing Employees shall receive
credit for past service (calculated under the method applicable to Parent's
similarly-situated employees) with the Company and its Subsidiaries for purposes
of eligibility to participate in the generally applicable severance plan
currently maintained by Parent for its and its Subsidiaries' employees, provided
that Continuing Employees shall be required to enter into Parent's standard
release as a condition to the receipt of any benefits under Parent's severance
plan and shall not be entitled to receive the additional severance benefits
under such plan otherwise provided in consideration for entering into a release.
Continuing Employees covered by a Company Plan providing severance benefits
following a change of control shall be covered by such Company Plan according to
its terms, and following the period of coverage in such Company Plan, shall
participate in the generally applicable severance plan currently maintained by
Parent for its and its Subsidiaries' employees according to the preceding
sentence.
(E) Following the Effective Time, Continuing Employees shall be
entitled to carryover or otherwise receive credit under any applicable Parent
Plans they may participate in for any vacation days, sick days, or other paid
time off that is accrued but unused at the Effective Time under the Company
Plans. Vacation days, sick days, or other paid time off that is accrued but
unused at the Effective Time under the Company Plans shall not be reduced as of
the Effective Time, but accruals of Continuing Employees following the Effective
Time may be limited to comply with the applicable policies and programs of
Parent and its Subsidiaries.
(F) Except as specifically provided in this Section 5.10, Continuing
Employees shall not receive credit for past service with the Company or its
Subsidiaries for purposes of eligibility to participate in or receive benefits
under any Parent Plans.
(G) Nothing contained in this Section 5.10: (i) shall be construed to
establish, amend or modify any benefit plan, program, agreement or arrangement,
(ii) shall alter or limit Parent's ability to amend, modify or terminate any
benefit plan, program, agreement or arrangement at any time assumed,
established, sponsored or maintained by Parent, (iii) is intended to confer upon
any current or former employee any right to employment or continued employment
for any period of time by reason of this Agreement, or any right to a particular
term or condition of employment, or (iv) is intended to confer upon any
individual (including employees, retirees, or dependents or
51
beneficiaries of employees or retirees) any right as a third-party beneficiary
of this Agreement.
5.11. INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE.
(A) From and after the Effective Time, Parent will cause the Surviving
Corporation to honor in all respects the obligations of the Company and the
Company Subsidiaries pursuant to (i) each indemnification agreement in effect on
the date of this Agreement between the Company or any of the Company
Subsidiaries and any Indemnified Party; and (ii) any indemnification provision
and any exculpation provision in favor of an Indemnified Party that is set forth
in the certificate of incorporation or bylaws of the Company and the equivalent
organizational documents of any Company Subsidiary in effect as of the date of
this Agreement.
(B) Through the sixth anniversary of the Effective Time, Parent will
cause Surviving Corporation to maintain in effect, for the benefit of the
Company's directors and officers that are insured under the Company's current
directors' and officers' liability insurance policy in effect as of the date of
this Agreement (the "D&O Insurance Policy"), the current level and scope of
directors' and officers' liability insurance coverage as set forth in the D&O
Insurance Policy; provided, however, that in no event shall the Surviving
Corporation be required pursuant to this Section 5.11(b) to expend an aggregate
amount in excess of 200% of the annual premium currently payable by the Company
with respect to such current D&O Insurance Policy, it being understood that if
the annual premiums payable for such insurance coverage exceed such amount, the
Surviving Corporation shall be obligated to obtain a policy with the greatest
coverage available for a cost equal to such amount. At any time prior to the
Effective Time, notwithstanding anything to the contrary set forth in this
Agreement, the Company may purchase, and shall purchase at the request of
Parent, a "tail" prepaid policy on the D&O Insurance Policy covering a period of
six years from the Effective Time; provided that the aggregate amount of such
"tail" policy is less than 200% of the annual premium currently payable by the
Company with respect to its current D&O Insurance Policy. In the event that the
Company shall purchase such a "tail" policy prior to the Effective Time, Parent
will cause the Surviving Corporation to maintain such "tail" policy in full
force and effect and continue to honor its respective obligations thereunder, in
lieu of all other obligations of Parent under the first sentence of this Section
5.11(b) for so long as such "tail" policy shall be maintained in full force and
effect.
(C) This Section 5.11 shall survive consummation of the Merger and the
Effective Time. This Section 5.11 is intended to benefit, and may be enforced
by, the Indemnified Parties and their respective heirs, representatives,
successors and assigns, and shall be binding on all successors and assigns of
the Surviving Corporation. In the event of any merger, consolidation or other
similar transaction involving the Surviving Corporation, or in the event of any
sale by the Surviving Corporation of all or substantially all of its assets, the
Surviving Corporation shall ensure that an Entity no less financially viable
than the Surviving Corporation remains responsible for the obligations of the
Surviving Corporation under this Section 5.11.
52
(D) For purposes of this Agreement, each individual who is an officer
or director of the Company at the date of this Agreement or was an officer or
director of the Company within the six years prior to the date of this Agreement
shall be deemed to be an "Indemnified Party."
5.12. SECTION 16 MATTERS. Prior to the Effective Time, Parent and the
Company shall take all such steps as may be required to cause any dispositions
of Company Shares (including derivative securities with respect to Company
Shares) resulting from the Merger by each individual who is subject to the
reporting requirements of Section 16(a) of the Exchange Act with respect to the
Company or will become subject to such reporting requirements with respect to
Parent, to be exempt under Rule 16b-3 promulgated under the Exchange Act.
5.13. TERMINATION OF CERTAIN COMPANY PLANS. At the request of Parent and
prior to the Effective Time, the Company will take all necessary corporate
actions to approve and effect the termination of any and all Company Plans
intended to qualify as a qualified cash or deferred arrangement under Section
401(k) of the Code effective immediately preceding the Effective Time (provided
that such termination shall not cause the Continuing Employees to fail to be
covered by a qualified cash or deferred arrangement under Section 401(k) of the
Code). Following the Effective Time, Parent shall use commercially reasonable
efforts to cause the Company to continue in effect the Company's Nonqualified
Deferred Compensation Plan, 409A Nonqualified Deferred Compensation Plan,
Director Fee Deferral Program under the Amended and Restated 1996 Stock
Incentive Plan, provided that, Parent may elect to cause the Company to
terminate participant's ability to make future contributions under such plans.
At the request of Parent and prior to the Effective Time, the Company shall take
all necessary corporate action to approve and effect the termination of any
substantially similar deferred compensation arrangements within the meaning of
Section 409A of the Code effective immediately preceding the Effective Time, and
the payment of all amounts deferred under such plans (including payment in
respect of any stock units granted under the Amended and Restated 1996 Stock
Incentive Plan) as soon as practicable following the Effective Time and in any
event within 12 months of the Effective Time. The Company will provide Parent
with evidence that any such plans terminated pursuant to this Section 5.13 have
been so terminated pursuant to resolutions duly adopted by the Company Board or
other duly-designated authority.
5.14. FINANCING.
(A) Parent and the Merger Sub shall use their commercially reasonable
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary, proper or advisable to arrange and obtain the Debt
Financing on the terms and conditions described in the Debt Commitment Letters,
including using commercially reasonable efforts to (i) maintain in effect the
Debt Commitment Letters and negotiate and enter into definitive agreements with
respect to the Debt Financing on the terms and conditions reflected in the Debt
Commitment Letters or on other terms reasonably acceptable to Parent and the
Merger Sub, (ii) satisfy on a timely basis all material conditions applicable to
Parent and the Merger Sub in such definitive agreements that are
53
within their control, (iii) consummate the Debt Financing at such time or from
time to time as is necessary for Merger Sub to satisfy its obligations under
this Agreement (iv) enforce its rights under the Debt Commitment Letters;
provided, however, that Parent or Merger Sub shall have the right to substitute
alternative financing for the Debt Commitment Letters with a different letter or
a letter from alternative lenders so long as such substitute letter is subject
to financing conditions that are at least as favorable to Parent and Merger Sub
as the financing conditions set forth in the Debt Commitment Letters. In the
event any portion of the Debt Financing becomes unavailable on the terms and
conditions contemplated in the Debt Commitment Letters for any reason, Parent
and the Merger Sub shall use their commercially reasonable efforts to obtain
alternative financing on terms no less favorable to Parent and Merger Sub than
the Debt Financing from alternative sources ("Alternative Financing") as
promptly as practicable following the occurrence of such event. Parent shall
promptly notify the Company in writing of: (i) the occurrence or existence of
any event, condition, fact or circumstance that could adversely impact the
availability to Parent or Merger Sub of the cash resources and/or financing
sufficient to enable Merger Sub to consummate the Merger and to enable Parent to
pay the Merger Consideration and otherwise perform its obligations under this
Agreement; (ii) any amendment, withdrawal, rescission, breach, violation or
non-satisfaction of any of the covenants, conditions or other terms contained in
the Debt Commitment Letters or any documents incorporated by reference therein;
or (iii) any allegation with respect to any of the matters described in clause
"(ii)" of this sentence. No notification given to the Company pursuant to this
Section 5.14(a) shall limit or otherwise affect the covenants or obligations of
Parent or Merger Sub contained in this Section 5.14(a). For the avoidance of
doubt, Parent's and the Merger Sub's obligation to consummate the Merger and the
other transactions contemplated by this Agreement are not (and shall not be)
subject to any financing condition.
(B) In the period between the date of this Agreement and the Effective
Time, upon request of Parent, the Company shall, and shall use commercially
reasonable efforts to cause its Subsidiaries, and its and their Affiliates and
Representatives to, reasonably cooperate with Parent in connection with its
financing of the transactions contemplated in this Agreement, including using
commercially reasonable efforts to (i) participate in meetings and road shows,
if any; (ii) provide information reasonably requested by Parent relating to such
financing; (iii) assist in the preparation of offering memoranda, private
placement memoranda, prospectuses and similar documents of Parent; and (iv)
obtain the consent of, and customary comfort letters from, Ernst & Young, LLP
(including by providing customary management letters and requesting legal
letters to obtain such consent) if necessary or desirable for Parent's use of
the Company's financial statements. Parent shall promptly, upon request by the
Company, reimburse the Company for all documented out-of-pocket expenses
incurred by the Company or its Affiliates or Representatives in connection with
such cooperation.
5.15. TAX MATTERS(a). Upon Parent's request, the Company shall promptly
deliver or make available to Parent complete and accurate copies of all Tax
Returns of the Company and each Company Subsidiary and complete and accurate
copies of all examination reports and statements of deficiencies assessed
against or agreed to by the
54
Company, any Company Subsidiary or any of their predecessors since its last open
Tax year.
5.16. INVERNESS PAYMENT.
(A) Immediately following the execution of this Agreement, Parent
shall pay to the Company, as reimbursement for its payment of the Company
Termination Fee, without deduction or setoff of any nature, by wire transfer of
immediately available funds to an account designated by the Company, an amount
in cash equal to $50,000,000 (the "Inverness Payment").
(B) If this Agreement is validly terminated by Parent pursuant to
Section 7.1(g) or if this Agreement is validly terminated in circumstances
requiring payment of the Termination Fee to Parent pursuant to Section 7.3(a),
7.3(b) or 7.3(c), then the Company shall reimburse Parent for, and in an amount
in cash equal to, the Inverness Payment. Any such reimbursement by the Company
shall be made by wire transfer of same day funds (i) as promptly as possible,
following, and in any event within one business day of, termination pursuant to
Section 7.1(g), and (ii) at the time that the Termination Fee is paid to Parent
in the case of a termination of this Agreement in circumstances requiring
payment of the Termination Fee.
(C) The Company shall provide Parent with a copy of the written
termination notice delivered to Xxxxxxx Xxxxxxx in accordance with the terms of
the Xxxxxxx Merger Agreement within 24 hours of the Company's delivery of such
notice to Xxxxxxx Xxxxxxx.
SECTION 6. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER
6.1 CONDITIONS AND OBLIGATIONS. The respective obligation of each party to
effect the Merger is subject to the satisfaction or waiver at or prior to the
Effective Time of each of the following conditions:
(A) STOCKHOLDER APPROVAL. This Agreement shall have been duly adopted
by holders of the Company Shares constituting the Company Requisite Vote in
accordance with applicable Legal Requirements and the Company's certificate of
incorporation and bylaws.
(B) NO INJUNCTIONS; LAWS. (A) No lawsuit shall have been commenced by
a Governmental Entity against the Company or Parent that remains pending and
seeks to prohibit the consummation of the Merger; (B) no injunction shall have
been issued by a court of competent jurisdiction and shall be continuing that
prohibits the consummation of the Merger (an "Order"); and (C) no Legal
Prohibition shall have been enacted since the date of this Agreement and shall
remain in effect.
(C) GOVERNMENT CONSENTS. Any applicable waiting period under the HSR
Act relating to the Merger shall have expired or been terminated, any antitrust
or
55
competition Legal Requirements applicable to the Merger of any other
jurisdiction shall have expired or been terminated and all other foreign
antitrust and competition approvals required to consummate the Merger shall have
been obtained (in the case of foreign Legal Requirements or approvals, only if
such Legal Requirements or approvals: (a) would have suspensory effect, (b) if
not obtained would reasonably be expected to result in material limitations on
the ownership or operation by Parent of the assets of Parent, its Subsidiaries
or the Surviving Corporation or (c) if not obtained, would subject Parent or
Merger Sub to the payment of a material fine or penalty).
6.2. CONDITIONS TO OBLIGATIONS OF PARENT AND MERGER SUB. The obligations of
Parent and Merger Sub to effect the Merger are also subject to the satisfaction
or waiver by Parent at or prior to the Effective Time of the following
conditions:
(a) Representations and Warranties. (A) The representations and
warranties of the Company set forth in this Agreement shall be true and accurate
in all respects except for such inaccuracies that, individually or in the
aggregate, have not had, a Company Material Adverse Effect; provided, however,
that the existence of such inaccuracy shall be determined without giving effect
to any "Company Material Adverse Effect" or other materiality qualifications
contained in such representations and warranties (other than Section 3.29 which
must be true and correct) and (B) Parent shall have received at the Closing a
certificate signed on behalf of the Company by the Chief Executive Officer of
the Company to the effect that such Chief Executive Officer has read this
Section 6.2(a) and the condition set forth in this Section 6.2(a) has been
satisfied;
(b) Performance of Obligations of the Company. The covenants of the
Company contained in this Agreement that are required to have been performed by
the Company prior to the Closing Date shall have been performed in all material
respects and Parent shall have received a certificate signed on behalf of the
Company by the Chief Executive Officer of the Company to such effect; and
(c) No Material Adverse Effect. Since the date of this Agreement,
there shall not have occurred any event or development which, individually or in
the aggregate, has had, or is reasonably likely to have, a Company Material
Adverse Effect.
6.3. CONDITIONS AND OBLIGATIONS OF THE COMPANY. The obligations of the
Company to effect the Merger are also subject to the satisfaction or waiver by
the Company at or prior to the Effective Time of the following conditions:
(a) Representations and Warranties. (A) The representations and
warranties of the Parent and Merger Sub set forth in this Agreement shall be
true and accurate in all respects except for such inaccuracies that,
individually or in the aggregate, have not had a material adverse effect on the
ability of Parent and Merger Sub to consummate the transactions contemplated by
this Agreement; provided, however, that the existence of such inaccuracy shall
be determined without giving effect to any materiality qualifications contained
in such representations and warranties and (B) the Company shall have received
at the Closing a certificate signed on behalf of Parent and
56
Merger Sub by the Chief Executive Officer of the Parent to the effect that such
Chief Executive Officer has read this Section 6.3(a) and the condition set forth
in this Section 6.3(a) has been satisfied; and
(b) Performance of Obligations of the Parent and Merger Sub. The
covenants of Parent and Merger Sub contained in this Agreement that are required
to have been performed by Parent and Merger Sub prior to the Closing Date shall
have been performed in all material respects and the Company shall have received
a certificate signed on behalf of Parent and Merger Sub by the Chief Executive
Officer of Parent to such effect.
SECTION 7. TERMINATION
7.1. TERMINATION. This Agreement may be terminated and the Merger may be
abandoned (before or after the adoption of the Merger Agreement by the
stockholders of the Company):
(A) by mutual consent of the Company and Parent at any time prior to
the Effective Time;
(B) by Parent or the Company at any time after September 30, 2007 (the
"Outside Date") if the Effective Time shall not have occurred on or before the
Outside Date (provided that the right to terminate this Agreement pursuant to
this Section 7.1(b) shall not be available to any party where the failure of
such party (or any Affiliate of such party) to fulfill any obligation under this
Agreement has resulted in the failure of the Effective Time to have occurred on
or before the Outside Date);
(C) by Parent or the Company if there shall be any Legal Prohibition
in effect against, prior to the Effective Time, the consummation of the Merger;
provided, however, that a party shall not be permitted to terminate this
Agreement pursuant to this Section 7.1(c) if the existence of the Legal
Prohibition is attributable to the failure of such party (or any Affiliate of
such party) to perform in any material respect any covenant in this Agreement
required to be performed by such party (or any Affiliate of such party) at or
prior to the Effective Time, and provided, further, that the party seeking to
terminate this Agreement pursuant to this Section 7.1(c) shall have used its
commercially reasonable efforts to prevent such Legal Prohibition and to cause
any such Legal Prohibition to be vacated or otherwise rendered of no effect;
(D) by Parent or the Company if the Requisite Company Vote shall not
have been obtained at the Special Meeting or any adjournment or postponement
thereof upon a vote taken to adopt this Agreement by the stockholders of the
Company at such meeting; provided, however, that a party shall not be permitted
to terminate this Agreement under this Section 7.1(d) if the failure to obtain
the Requisite Company Vote is attributable to the failure of such party (or any
Affiliate of such party) to fulfill its obligations under this Agreement.
57
(E) by Parent at any time prior to the Effective Time if: (i) the
Company Board or any committee thereof shall have made a Company Change in
Recommendation; (ii) the Company shall have violated or breached (or be deemed
pursuant to the terms thereof, to have violated or breached) any provisions of
Section 5.2(a) or Section 5.2(d) and such breach has led to or resulted in an
Acquisition Proposal being made, or (iii) the Company shall have failed to
include the Company Recommendation in the Proxy Statement;
(F) by the Company at any time prior to the Effective Time if the
Company Board authorizes the Company, subject to complying with the terms of
this Agreement, to accept (or to enter into a written agreement for a
transaction constituting) a Superior Proposal; provided that: (i) the Company
received such Superior Proposal other than as a result of a breach of or
violation of the terms of Section 5.2, (ii) the Company has not breached or
violated in any material respect the terms of Section 5.2 or Section 5.3 in
connection with such Superior Proposal (or any Acquisition Proposal that was a
precursor thereto), (iii) the Company has provided Parent at least three
business days (the "Matching Period") prior written notice indicating that the
Company intends to accept such Superior Proposal; (iv) prior to the expiration
of such Matching Period, Parent does not make a binding offer that the Company
Board determines in good faith, After Consultation, is at least as favorable to
the Company's stockholders as such Superior Proposal, (v) immediately prior to
(or contemporaneous with) the termination of this Agreement, the Company pays to
Parent the Termination Fee payable pursuant to Section 7.3, and (vi) immediately
following the termination of this Agreement, the Company enters into a
definitive agreement to effect such Superior Proposal;
(G) by Parent at any time prior to the Effective Time if: (i): there
shall be an Uncured Inaccuracy in any representation or warranty of the Company
contained in this Agreement or breach of any covenant of the Company or any of
its Affiliates contained in this Agreement, in any case, such that the
conditions set forth in Sections 6.2(a) or 6.2(b) are not or would reasonably be
likely to not be satisfied, (ii) Parent shall have delivered to the Company
written notice of such Uncured Inaccuracy or breach, and (iii) at least 30 days
shall have elapsed since the date of delivery of such written notice to the
Company and such Uncured Inaccuracy or breach shall not have been cured in all
material respects;
(H) by Parent at any time prior to the Effective Time if: (i): there
shall have occurred any adverse event or development which, individually or in
the aggregate, has had, and continues to have, a Company Material Adverse
Effect, (ii) Parent shall have delivered to the Company written notice of such
Company Material Adverse Effect, and (iii) either (A) such Company Material
Adverse Effect is not reasonably likely to be cured prior to the Outside Date or
(B) the Company is not using its reasonable best efforts to cure such Material
Adverse Effect prior to the Outside Date;
(I) by the Company at any time prior to the Effective Time if: (i):
(A) there shall be an Uncured Inaccuracy in any representation or warranty of
Parent or Merger Sub contained in this Agreement or breach of any covenant of
Parent, Merger Sub or any of their Affiliates contained in this Agreement, in
any case, such that the
58
conditions set forth in Sections 6.3(a) or 6.3(b) are not or would reasonably be
likely to not be satisfied or (B) since the date of this Agreement, there shall
have occurred any adverse event or development which, individually or in the
aggregate, has had, and continues to have, a material adverse effect upon
Parent's or Merger Sub's ability to consummate the Merger,, (ii) the Company
shall have delivered to Parent written notice of such Uncured Inaccuracy, breach
or material adverse effect; and (iii) at least 30 days shall have elapsed since
the date of delivery of such written notice to Parent and such Uncured
Inaccuracy, breach or material adverse effect shall not have been cured in all
material respects;
(J) by the Company at any time prior to the Effective Time, if Parent
shall have failed to fully comply with Section 5.16(a) of this Agreement within
24 hours or, if later, one full business day following the execution and
delivery of this Agreement;
provided, however, that notwithstanding anything to the contrary contained in
this Section 7.1: (1) Parent shall not be permitted to terminate this Agreement
pursuant to Section 7.1(g) if: (A) any material covenant of Parent or Merger Sub
contained in this Agreement shall have been breached in any material respect,
and such breach shall not have been cured in all material respects; or (B) there
shall be an Uncured Inaccuracy in any representation or warranty of Parent or
Merger Sub contained in this Agreement; and (2) the Company shall not be
permitted to terminate this Agreement pursuant to Section 7.1(i) if: (A) any
material covenant of the Company contained in this Agreement shall have been
breached in any material respect, and such breach shall not have been cured in
all material respects; or (B) there shall be an Uncured Inaccuracy in any
representation or warranty of the Company contained in this Agreement.
7.2. EFFECT OF TERMINATION. In the event of the termination of this
Agreement as provided in Section 7.1, written notice thereof shall forthwith be
given to the other party or parties specifying the provision hereof pursuant to
which such termination is made and this Agreement shall be of no further force
or effect; provided, however, that: (a) Section 5.16(b), this Section 7.2,
Section 7.3 and Section 8 shall survive the termination of this Agreement and
shall remain in full force and effect; and (b) the termination of this Agreement
shall not relieve any party from any liability for any breach of any covenant
(including, for the avoidance of doubt, Parent's obligations pursuant to Section
5.16(a) of this Agreement), or willful breach of any representation or warranty
contained in this Agreement.
7.3. TERMINATION FEE.
(A) If: (i) this Agreement is validly terminated by Parent or the
Company pursuant to Section 7.1(b) or 7.1(d); (ii) at or prior to the time of
the termination of this Agreement an Acquisition Proposal shall have been
publicly announced or shall have become publicly known; (iii) the Company
Requisite Vote shall not have been obtained, and (iv) within 12 months after the
date of termination of this Agreement, the Company or any Company Subsidiary
consummates an Acquisition Transaction or enters into a Contract to consummate
an Acquisition Transaction that is subsequently consummated, then, within two
business days after such Acquisition
59
Transaction is consummated, the Company shall cause a termination fee in the
amount of $50,000,000 (the "Termination Fee") to be paid to Parent; provided,
however, that solely for purposes of this Section 7.3(a), the term "Acquisition
Transaction" shall have the meaning set forth in the definition of Acquisition
Transaction contained in Exhibit A except that all references to "15%" shall be
deemed to be references to "40%" and all references to "85%" shall be deemed to
be references to "60%".
(B) If this Agreement is validly terminated by Parent pursuant to
Section 7.1(e) then, within two business days after such termination, the
Company shall cause the Termination Fee to be paid to Parent.
(C) If this Agreement is terminated by the Company pursuant to Section
7.1(f), prior to (or contemporaneously with) and as a condition to the
effectiveness of such termination, the Company shall pay the Termination Fee to
Parent.
(D) Any payments made under this Section 7.3 shall be made by wire
transfer of immediately available funds to an account designated by the party
entitled thereto. The Company acknowledges and agrees that the agreements
contained in this Section 7.3 are an integral part of the transactions
contemplated by this Agreement, and that, without these agreements, Parent would
not enter into this Agreement. Accordingly, if the Company fails promptly to pay
any amount due to the Parent, pursuant to this Section 7.3, and, in order to
obtain such payment, Parent commences a suit that results in a judgment against
the Company for the Termination Fee, the Company shall pay to Parent its costs
and expenses (including attorneys' fees and expenses) in connection with such
suit, together with interest on the amount due pursuant to this Section 7.3 from
the date such payment was required to be made until the date of payment at a
rate of 10% per annum, or, if lower, the maximum rate permitted to be charged by
applicable Legal Requirements. Except to the extent required by applicable Legal
Requirements, the Company shall not withhold any withholding taxes on any
payment made to Parent under this Section 7.3.
SECTION 8. MISCELLANEOUS PROVISIONS
8.1. AMENDMENT. This Agreement may be amended with the written approval of
the respective parties at any time prior to the Effective Time; provided,
however, that after any adoption of this Agreement by the Company's
stockholders, no amendment shall be made which by applicable Legal Requirements
or any rule of any relevant stock exchange requires further approval of the
stockholders of the Company, without such further approval.
8.2. WAIVER.
(A) No failure on the part of any party to exercise any power, right,
privilege or remedy under this Agreement, and no delay on the part of any party
in exercising any power, right, privilege or remedy under this Agreement, shall
operate as a waiver of such power, right, privilege or remedy; and no single or
partial exercise of any
60
such power, right, privilege or remedy shall preclude any other or further
exercise thereof or of any other power, right, privilege or remedy.
(B) No party shall be deemed to have waived any claim arising out of
this Agreement, or any power, right, privilege or remedy under this Agreement,
unless the waiver of such claim, power, right, privilege or remedy is expressly
set forth in a written instrument duly executed and delivered on behalf of such
party; and any such waiver shall not be applicable or have any effect except in
the specific instance in which it is given.
8.3. NO SURVIVAL OF REPRESENTATIONS AND WARRANTIES. None of the
representations, warranties, covenants and other agreements of the parties
contained in this Agreement, or contained in any certificate delivered pursuant
to this Agreement or in connection with any of the transactions contemplated by
this Agreement, or any claim with respect thereto, shall survive the Effective
Time, except for those covenants, agreements and other provisions contained
herein that by their terms apply or are to be performed in whole or in part
after the Effective Time.
8.4. ENTIRE AGREEMENT; COUNTERPARTS. This Agreement, the other agreements
referred to herein and the Confidentiality Agreement constitute the entire
agreement of the parties hereto and supersede all prior agreements and
understandings, both written and oral, among or between any of the parties
hereto with respect to the subject matter hereof and thereof. Without limiting
the generality of the foregoing: (a) Parent and Merger Sub acknowledge that the
Company has not made and is not making any representations or warranties
whatsoever regarding the subject matter of this Agreement, express or implied,
except as provided in this Agreement or the Company Disclosure Schedule and that
they are not relying and have not relied on any representations or warranties
whatsoever regarding the subject matter of this Agreement, express or implied,
except as provided in this Agreement and the Company Disclosure Schedule; and
(b) the Company acknowledges that Parent and Merger Sub have not made and are
not making any representations or warranties whatsoever regarding the subject
matter of this Agreement, express or implied, except as provided in this
Agreement, and that it is not relying and has not relied on any representations
or warranties whatsoever regarding the subject matter of this Agreement, express
or implied, except as provided in this Agreement. This Agreement may be executed
in several counterparts, each of which shall be deemed an original and all of
which shall constitute one and the same instrument.
8.5. APPLICABLE LAW; JURISDICTION; WAIVER OF JURY TRIAL.
(A) This Agreement is made under, and shall be construed and enforced
in accordance with, the Legal Requirements of the State of Delaware applicable
to agreements made and to be performed solely therein, without giving effect to
principles of conflicts of law. The parties hereto agree that any suit, action
or proceeding seeking to enforce any provision of, or based on any matter
arising out of or in connection with, this Agreement or the transactions
contemplated hereby shall be brought in the Court of Chancery of the State of
Delaware, and each of the parties hereby irrevocably consents to the
jurisdiction of such court (and of the appropriate appellate
61
courts therefrom) in any such suit, action or proceeding and irrevocably waives,
to the fullest extent permitted by Legal Requirements, any objection that it may
now or hereafter have to the laying of the venue of such suit, action or
proceeding in any such court or that any such suit, action or proceeding brought
in any such court has been brought in an inconvenient forum. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by Legal Requirements. Each party to this Agreement
irrevocably consents to service of process in the manner provided for notices in
Section 8.8. Nothing in this Agreement will affect the right of any party to
this Agreement to serve process in any other manner permitted by Legal
Requirements. Each party hereto agrees not to commence any legal proceedings
relating to or arising out of this Agreement or the transactions contemplated
hereby in any jurisdiction or courts other than as provided herein.
(B) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY
ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE
AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE EITHER OF SUCH WAIVERS, (B) IT UNDERSTANDS AND HAS CONSIDERED THE
IMPLICATIONS OF SUCH WAIVERS, (C) IT MAKES SUCH WAIVERS VOLUNTARILY, AND (D) IT
HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.5(b).
8.6. PAYMENT OF EXPENSES. Except as set forth in Section 7.3, whether or
not the Merger is consummated, each party hereto shall pay its own expenses
incident to preparing for, entering into and carrying out this Agreement and the
transactions contemplated hereby. Nothing contained in this Agreement shall be
deemed to limit the right or ability of any party to this Agreement to pay such
expenses, as and when due and payable.
8.7. ASSIGNABILITY; NO THIRD PARTY RIGHTS. This Agreement shall be binding
upon, and shall be enforceable by and inure to the benefit of, the parties
hereto and their respective successors and assigns. Except as set forth in
Section 5.11 with respect to the Indemnified Parties, nothing in this Agreement,
express or implied, is intended to or shall confer upon any Person, other than
the parties hereto, any right, benefit or remedy of any nature.
62
8.8. NOTICES. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given
or made as follows: (a) if sent by registered or certified mail in the United
States return receipt requested, upon receipt; (b) if sent designated for
overnight delivery by nationally recognized overnight air courier (such as DHL
or Federal Express), upon receipt of proof of delivery; (c) if sent by facsimile
transmission before 5:00 p.m. in California, when transmitted and receipt is
confirmed; (d) if sent by facsimile transmission after 5:00 p.m. in California,
and receipt is confirmed, on the following business day; and (e) if otherwise
actually personally delivered, when delivered, provided that such notices,
requests, demands and other communications are delivered to the address set
forth below, or to such other address as any party shall provide by like notice
to the other parties to this Agreement:
IF TO PARENT OR MERGER SUB:
Inverness Medical Innovations, Inc.
00 Xxxxxx Xxxx
Xxxxx 000
Xxxxxxx, XX 00000
Attention: General Counsel
Facsimile: (000) 000-0000
WITH A COPY (WHICH SHALL NOT CONSTITUTE NOTICE) TO:
Xxxxxxx Procter LLP
Exchange Place
Boston, MA
Attention: Xxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
IF TO THE COMPANY:
Biosite Incorporated
0000 Xxxxxxx Xxxxx Xxxx
Xxx Xxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, Vice President, Legal Affairs
Facsimile: (000) 000-0000
WITH A COPY TO:
Xxxxxx Godward Kronish LLP
0000 Xxxxxxxx Xxxx
Xxx Xxxxx, XX 00000-0000
Attention: Xxxx Xxxx, Esq.
Facsimile: (000) 000-0000
63
8.9. SEVERABILITY. Any term or provision of this Agreement that is invalid
or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction. If the final judgment of a court of
competent jurisdiction declares that any term or provision hereof is invalid or
unenforceable, the parties hereto agree that the court making such determination
shall have the power to limit the term or provision, to delete specific words or
phrases or to replace any invalid or unenforceable term or provision with a term
or provision that is valid and enforceable and that comes closest to expressing
the intention of the invalid or unenforceable term or provision, and this
Agreement shall be enforceable as so modified. In the event such court does not
exercise the power granted to it in the prior sentence, the parties hereto agree
to replace such invalid or unenforceable term or provision with a valid and
enforceable term or provision that will achieve, to the extent possible, the
economic, business and other purposes of such invalid or unenforceable term.
8.10. OBLIGATION OF PARENT. Parent shall ensure that each of Merger Sub and
the Surviving Corporation duly performs, satisfies and discharges on a timely
basis each of the covenants, obligations and liabilities of Merger Sub and the
Surviving Corporation under this Agreement, and Parent shall be jointly and
severally liable with Merger Sub and the Surviving Corporation for the due and
timely performance and satisfaction of each of said covenants, obligations and
liabilities.
8.11. SPECIFIC PERFORMANCE. The parties hereto agree that irreparable
damage would occur in the event any of the provisions of this Agreement were not
to be performed in accordance with the terms hereof and that the parties shall
be entitled to specific performance of the terms hereof in addition to any other
remedies at law or in equity. Each party agrees to waive any requirement for the
posting of, or securing of, a bond in connection with any such remedy.
8.12. CUMULATIVE REMEDIES. All rights and remedies of either party hereto
are cumulative of each other and of every other right or remedy such party may
otherwise have at law or in equity, and the exercise of one or more rights or
remedies shall not prejudice or impair the concurrent or subsequent exercise of
other rights or remedies.
8.13. REPRESENTATION BY COUNSEL. Each party hereto represents and agrees
with each other that it has been represented by or had the opportunity to be
represented by, independent counsel of its own choosing, and that it has had the
full right and opportunity to consult with its respective attorney(s), that to
the extent, if any, that it desired, it availed itself of this right and
opportunity, that it or its authorized officers (as the case may be) have
carefully read and fully understand this Agreement in its entirety and have had
it fully explained to them by such party's respective counsel, that each is
fully aware of the contents thereof and its meaning, intent and legal effect,
and that it or its authorized officer (as the case may be) is competent to
execute this Agreement and has executed this Agreement free from coercion,
duress or undue influence.
64
8.14. CONSTRUCTION.
(A) For purposes of this Agreement, whenever the context requires: the
singular number shall include the plural, and vice versa; the masculine gender
shall include the feminine and neuter genders; the feminine gender shall include
the masculine and neuter genders; and the neuter gender shall include masculine
and feminine genders.
(B) The parties hereto agree that any rule of construction to the
effect that ambiguities are to be resolved against the drafting party shall not
be applied in the construction or interpretation of this Agreement.
(C) As used in this Agreement, the words "include" and "including,"
and variations thereof, shall not be deemed to be terms of limitation, but
rather shall be deemed to be followed by the words "without limitation."
(D) Except as otherwise indicated, all references in this Agreement to
"Sections," "Exhibits," "Annexes" and "Schedules" are intended to refer to
Sections of this Agreement and Exhibits, Annexes and Schedules to this
Agreement.
(E) All references to a document or instrument having been made
available to Parent shall be deemed to include the making available of such
document or instrument to Parent's counsel, to Parent's financial advisor or to
any other representative of Parent.
(F) All references in this Agreement to "$" are intended to refer to
U.S. dollars.
(G) Each reference in this Agreement to a "Contract," "plan," "offer"
or "commitment" shall be deemed to refer only to a Contract, plan, offer or
commitment that is legally binding.
(H) Unless otherwise specifically provided for herein, the term "or"
shall not be deemed to be exclusive.
(I) The titles, captions or headings of the sections and subsections
herein are inserted for convenience of reference only and are not intended to be
a part of or to affect the meaning or interpretation of this Agreement.
Parent, Merger Sub and the Company have caused this Agreement to be
executed as of the date first written above.
65
INVERNESS MEDICAL INNOVATIONS, INC.
By: /s/ Xxx Xxxxxxxxx
------------------------------------
Name: Xxx Xxxxxxxxx
Title: Chief Executive Officer
INCA ACQUISITION, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------------
Name: Xxxx X. Xxxxxx
Title: Secretary
BIOSITE INCORPORATED
By:
------------------------------------
Name: Xxx X. Xxxxxxxxxxxx
Title: Chief Executive Officer
66
EXHIBIT A
CERTAIN DEFINITIONS
For purposes of the Agreement (including this Exhibit A):
ACQUISITION INQUIRY. "Acquisition Inquiry" shall mean an inquiry,
indication of interest or request for information (other than an inquiry,
indication of interest or request for information made or submitted by Parent or
Merger Sub) that would reasonably be expected to lead to an Acquisition
Proposal.
ACQUISITION PROPOSAL. "Acquisition Proposal" shall mean any offer or
proposal (other than an offer or proposal made or submitted by Parent or Merger
Sub) relating to a possible Acquisition Transaction.
ACQUISITION TRANSACTION. "Acquisition Transaction" shall mean any
transaction or series of related transactions (other than the transactions
contemplated by this Agreement) involving or resulting in: (i) any acquisition
or purchase from the Company by any Person or "group" (as defined in or under
Section 13(d) of the Exchange Act), directly or indirectly, of more than 15% of
the total outstanding voting securities of the Company, or any tender offer or
exchange offer that, if consummated, would result in the Person or "group" (as
defined in or under Section 13(d) of the Exchange Act) making such offer
beneficially owning 15% or more of the total outstanding voting securities of
the Company; (ii) any merger, consolidation, share exchange, business
combination, acquisition of securities, recapitalization, tender offer, exchange
offer or other similar transaction involving the Company pursuant to which the
stockholders of the Company immediately prior to the consummation of such
transaction would hold less than 85% of the equity interests in the surviving or
resulting entity of such transaction immediately after consummation thereof;
(iii) any sale, lease, exchange, transfer, license, acquisition or disposition
of more than 15% of the assets of the Company (including the interest of the
Company in the Company Subsidiaries) (measured by either book or fair market
value thereof) or the net revenues or net income of the Company; or (iv) any
liquidation, dissolution, recapitalization or other significant corporate
reorganization of the Company.
AFFILIATE. A Person shall be deemed to be an "Affiliate" of another Person
if such Person directly or indirectly controls, is directly or indirectly
controlled by or is directly or indirectly under common control with such other
Person.
AFTER CONSULTATION. "After Consultation" by a Person shall mean after
consultation with a financial advisor of nationally recognized reputation and
such Person's outside legal counsel.
AGREEMENT. "Agreement" shall mean the Agreement and Plan of Merger to which
this Exhibit A is attached, together with Annex I and this Exhibit A, as such
Agreement and Plan of Merger (including and this Exhibit A) may be amended from
time to time.
XXXXXXX. "Xxxxxxx" shall mean Xxxxxxx Xxxxxxx, Inc., a Delaware
Corporation.
67
XXXXXXX MERGER AGREEMENT. "Xxxxxxx Merger Agreement" shall mean that
certain Agreement and Plan of Merger dated as of March 24, 2007 by and among the
Company, Xxxxxxx and Xxxxxxx Subsidiary, as may have been amended from time to
time thereafter.
XXXXXXX SUBSIDIARY. "Xxxxxxx Subsidiary" shall mean Louisiana Acquisition
Sub, Inc., a Delaware corporation.
CLIA. "CLIA" shall mean the Clinical Laboratory Improvement Amendments of
1988 or any successor statutes.
CODE. "Code" shall mean the Internal Revenue Code of 1986, as amended.
COMPANY BOARD. "Company Board" shall mean the board of directors of the
Company in office at any given time.
COMPANY MATERIAL ADVERSE EFFECT. "Company Material Adverse Effect" shall
mean any change, effect, development, circumstance, condition or worsening
thereof ("Effect") that, individually or when taken together with all other
Effects that exist at the date of determination, (i) has had or would reasonably
be likely to have a material adverse effect on the business, operations, results
of operations or condition (financial or otherwise) of the Company and the
Company Subsidiaries, taken as a whole; or (ii) would reasonably be expected to
directly or indirectly materially impair the validity or enforceability of this
Agreement, prevent or materially delay the consummation of the transactions
contemplated by this Agreement or subject Parent or Merger Sub to criminal or
material civil liability in connection with the transactions contemplated by
this Agreement; provided, however, that none of the following shall be deemed
either alone or in combination to constitute, and none of the following shall be
taken into account in determining whether there has been or would be, a Company
Material Adverse Effect: (A) any Effect that results from general economic,
business, financial or market conditions in the United States or global economy
as a whole; (B) any Effect arising from or otherwise relating to any of the
industries or industry sectors in which the Company or any of the Company
Subsidiaries operates to the extent that it does not disproportionately affect
the Company and the Company Subsidiaries (taken as a whole) relative to other
participants in the medical device industry; (C) any Effect arising from or
otherwise relating to any act of terrorism, war, national or international
calamity or any other similar event; (D) any Effect (including any loss of
employees, any cancellation of or delay in customer orders or any litigation)
arising from or otherwise relating to the announcement or pendency of this
Agreement or the Merger; (E) the failure of the Company to meet internal or
analysts' expectations or projections, in and of itself (for the avoidance of
doubt, this clause (E) shall not preclude the underlying cause of any such
failure to meet internal or analysts' expectations or projections being taken
into account in determining whether there has been a Material Adverse Effect);
(F) any Effect arising from or otherwise relating to any action required by this
Agreement to be taken by the Company or any Company Subsidiary; or (G) a decline
in the Company's stock price, in and of itself (for the avoidance of doubt, this
clause (G) shall not preclude Parent from asserting that the underlying cause of
any such decline in the Company's stock price being taken into account in
determining whether there has been a Material Adverse
68
Effect).
COMPANY OPTION PLANS. "Company Option Plans" shall mean the following stock
option plans of the Company: (a) the Amended and Restated 1989 Stock Plan, (b)
the Amended and Restated 1996 Stock Incentive Plan and (c) the 2002 Nonqualified
Stock Incentive Plan.
COMPANY OPTIONS. "Company Options" shall mean options to purchase Company
Shares from the Company, whether granted by the Company pursuant to the Company
Option Plans or otherwise.
COMPANY RIGHTS. "Company Rights" shall mean the rights issued pursuant to
the Company Rights Agreement.
COMPANY RIGHTS AGREEMENT. "Company Rights Agreement" shall mean the Rights
Agreement dated as of October 22, 1997, between the Company and BankBoston,
N.A., as Rights Agent, as amended by Amendment No. 1 dated as of December 9,
1999 between the Company and Fleet National Bank (f/k/a BankBoston, N.A.) by
Amendment No. 2 dated as of July 18, 2001, among the Company, Fleet National
Bank and American Stock Transfer and Trust, as successor Rights Agent, by
Amendment No. 3 dated as of March 24, 2007 and Amendment No. 4 dated as the date
hereof, between the Company and American Stock Transfer & Trust Company, a New
York banking corporation, as successor Rights Agent.
COMPANY SHARES. "Company Shares" shall mean shares of common stock, $0.001
par value per share, of the Company. Except where the context otherwise
requires, all references in the Agreement to Company Shares shall include the
associated Company Rights.
CONFIDENTIAL AGREEMENT. "Confidential Agreement" shall mean the agreement
specified in Part 5.6 of the Company Disclosure Schedule.
CONFIDENTIALITY AGREEMENT. "Confidentiality Agreement" shall mean the
letter agreement, dated April 11, 2007.
CONTRACT. "Contract" shall mean any loan or credit agreement, bond,
debenture, note, mortgage, indenture, guarantee, lease or other contract,
commitment, agreement, instrument, arrangement, understanding, obligation,
undertaking or license, whether oral or written (each, including all amendments
thereto).
CONTROLLED SUBSTANCES ACT. "Controlled Substances Act" refers to 21 U.S.C.
Sections 801 et seq.
ENCUMBRANCE. "Encumbrance" shall mean, with respect to any property or
asset, any mortgage, easement, lien, pledge (including any negative pledge),
security interest or other encumbrance of any nature whatsoever in respect of
such property or asset.
ENTITY. "Entity" shall mean any corporation (including any non-profit
corporation), general partnership, limited partnership, limited liability
partnership, joint
69
venture, estate, trust, company (including any company limited by shares,
limited liability company or joint stock company), firm, society or other
enterprise, association, organization or entity (including any Governmental
Entity).
ERISA. "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
ERISA AFFILIATE. "ERISA Affiliate" shall mean any Company Subsidiary or any
entity (whether or not incorporated) other than the Company or any Company
Subsidiary that, together with the Company, is required to be treated as a
single employer under Section 414(b), (c), (m) or (o) of the Code.
EXECUTIVE. "Executive" shall mean any employee of the Company that is
eligible to participate in the Company's Change in Control Severance Benefit
Plan.
EXCHANGE ACT. "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
FDA. "FDA" shall mean the United States Food and Drug Administration.
FDCA. "FDCA" shall mean the Federal Food, Drug and Cosmetic Act of 1938, as
amended.
FDA LAWS. "FDA Laws" shall mean the FDCA, the Public Health Service Act,
CLIA, Controlled Substances Act and, for each of the foregoing, all comparable
state Legal Requirements and the rules and regulations promulgated thereunder by
FDA and any other comparable Governmental Entities.
GAAP. "GAAP" shall mean United States generally accepted accounting
principles.
GOVERNMENTAL AUTHORIZATION. "Governmental Authorization" shall mean any
permit, license, registration, qualification, certificate, clearance, variance,
waiver, exemption, certificate of occupancy, exception, franchise, entitlement,
consent, confirmation, order, approval or authorization granted by any
Governmental Entity (including all authorizations under the FDCA and the Public
Health Services Act, and the regulations of the FDA promulgated thereunder).
GOVERNMENTAL ENTITY. "Governmental Entity" shall mean any federal, state,
local or foreign government or multi-national organization or body or any
agency, authority, subdivision or instrumentality of any of the foregoing,
including any court, tribunal, department, bureau, administrative agency,
commission or board, or any quasi-governmental or private body duly exercising
any regulatory, taxing, inspecting or other governmental authority.
HSR ACT. "HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended.
INTELLECTUAL PROPERTY RIGHTS. "Intellectual Property Rights" shall mean all
(a) United States and foreign patents and patent applications (and any patents
that issue as a
70
result of those patent applications), and any renewals, reissues,
reexaminations, extensions, continuations, continuations-in-part, divisions and
substitutions relating to any of the patents and patent applications, as well as
all related foreign patents and patent applications that are counterparts to
such patents and patent applications, (b) United States and foreign trademarks,
service marks, trade dress, logos, trade names and corporate names, whether
registered or unregistered, and the goodwill associated therewith, together
withy any registrations and applications for registration thereof, (c) United
States and foreign copyrights and rights under copyrights, whether registered or
unregistered, including moral rights, and any registrations and applications for
registration thereof, (d) United States, and foreign mask work rights and
registrations and applications for registration thereof, (e) rights in databases
and data collections (including knowledge databases, customer lists and customer
databases) under the laws of the United States or any other jurisdiction,
whether registered or unregistered, and any applications for registration
therefor; (f) trade secrets and other rights in know-how and confidential or
proprietary information (including any business plans, designs, technical data,
customer data, financial information, pricing and cost information, bills of
material, or other similar information), (g) URL and domain name registrations,
(h) inventions (whether or not patentable) and improvements thereto, and (i) all
other proprietary or intellectual property rights now known or hereafter
recognized in any jurisdiction.
INDEBTEDNESS. "Indebtedness" shall mean (i) indebtedness for borrowed
money, including indebtedness evidenced by a note, bond, debenture or similar
instrument, and any guarantees, endorsements or keep-well obligations or other
contingent obligations in respect thereof, or (ii) obligations in respect of
outstanding letters of credit, acceptances and similar obligations created for
the account of such Person.
LATEST BALANCE SHEET. "Latest Balance Sheet" shall mean the audited
consolidated balance sheet of the Company and the Company Subsidiaries as of
December 31, 2006, which is included in the Company's Report on Form 10-K filed
with the SEC for the fiscal year ended December 31, 2006.
LEASED REAL PROPERTY. "Leased Real Property" shall mean real property that
is leased by the Company or any Company Subsidiary.
LEGAL PROCEEDING. "Legal Proceeding" shall mean any claim, lawsuit, court
action, suit, arbitration, investigation by a Governmental Entity or other
judicial or administrative proceeding.
LEGAL PROHIBITION. "Legal Prohibition" shall mean any final, permanent
Legal Requirement that is in effect and that prevents or prohibits consummation
of the Merger or any of the other material transactions contemplated in this
Agreement or limits or would limit Parent's activity in connection with its
ownership, operation or control of the Surviving Corporation (including any hold
separate order).
LEGAL REQUIREMENT. "Legal Requirement" shall mean any federal, state, local
or non-U.S. law, statute, code, ordinance, regulation, code, order, judgment,
writ, injunction, decision, ruling or decree promulgated by any Governmental
Entity.
71
ORDINARY COURSE OF BUSINESS. "Ordinary Course of Business" shall mean
ordinary course of business, consistent with past practices, including with
respect to frequency and amount.
OWNED REAL PROPERTY. "Owned Real Property" shall mean real property owned
by the Company or a Company Subsidiary.
PARENT SHARE PRICE. "Parent Share Price" shall mean the closing per-share
price of a Parent Share as listed on the AMEX.
PARENT SHARES. "Parent Shares" shall mean shares of common stock, $0.01 par
value per share, of Parent.
PERMITTED ENCUMBRANCES. "Permitted Encumbrances" shall mean: (a)
Encumbrances for Taxes not yet due and payable; (b) liens, Encumbrances or
imperfections of title that have arisen in the Ordinary Course of Business; (c)
liens, Encumbrances or imperfections of title resulting from or otherwise
relating to any of the contracts referred to in the Company Disclosure Schedule;
(d) liens, Encumbrances or imperfections of title relating to liabilities
reflected in the financial statements (including any related notes) contained in
the Company SEC Documents; (e) liens, pledges or Encumbrances arising from or
otherwise relating to transfer restrictions under the Securities Act and the
securities laws of the various states of the United States or foreign
jurisdictions; and (f) liens, Encumbrances or imperfections of title which would
not have a Company Material Adverse Effect.
PERSON. "Person" shall mean any individual or Entity.
PRODUCTS UNDER DEVELOPMENT. "Products Under Development" shall mean the
products currently under development and subject to current clinical trials set
forth on Schedule A attached hereto.
PROXY STATEMENT. "Proxy Statement" shall mean a proxy statement relating to
the Special Meeting (together with any amendments thereof or supplements thereto
and any other required proxy materials in connection therewith).
SEC. "SEC" shall mean the United States Securities and Exchange Commission.
SECURITIES ACT. "Securities Act" shall mean the Securities Act of 1933, as
amended.
OPTION CONVERSION RATIO. "Option Conversion Ratio" shall mean the quotient,
calculated to five decimal places, obtained by dividing (x) the Merger
Consideration by (y) the Parent Share Price at the Effective Time.
SUBSIDIARY. An Entity shall be deemed to be a "Subsidiary" of another
Person if such Person directly or indirectly owns, beneficially or of record:
(a) an amount of voting securities or other interests in such Entity that is
sufficient to enable such Person to elect at least a majority of the members of
such Entity's board of directors or comparable governing body; or (b) at least
50% of the outstanding equity interests issued by such Entity.
72
SPECIAL MEETING. "Special Meeting" shall mean a special meeting of the
Company's stockholders held solely for the purpose of considering and taking
action upon this Agreement and the Merger.
SUPERIOR PROPOSAL. "Superior Proposal" shall mean any unsolicited, bona
fide written offer made by a third party unaffiliated with the Company to
purchase (by way of merger, tender or exchange offer or otherwise) greater than
85% of the Company's assets or greater than 85% of the outstanding Company
Shares (other than Company Shares already held by such third party) that the
Company Board shall have determined in good faith (After Consultation, and after
taking into account, among other things, the financial, legal and regulatory
aspects of such offer (including any financing required and the availability
thereof), as well as any revisions to the terms hereof proposed by Parent
pursuant to Section 7.1(f) hereof) is: (a) more favorable to the Company's
stockholders (in their capacities as such) than the terms of the Merger (taking
into account any revisions to the terms hereof proposed by Parent pursuant to
Section 7.1(f) hereof), and (b) reasonably certain of being consummated on the
terms proposed.
TAX OR TAXES. "Tax" or "Taxes" shall mean all taxes of whatever kind or
nature, including those on or measured by or referred to as income, gross
receipts, sales, use, ad valorem, franchise, profits, license, estimated,
withholding, payroll, employment, excise, severance, stamp, occupation, premium,
value added, property or windfall profits taxes, customs, duties or other
similar fees, assessments or charges of any kind whatsoever (together with any
interest and any penalties, additions to tax or additional amounts), whether
disputed or not, imposed by any Governmental Entity or Tax authority (domestic
or foreign).
TAX RETURNS. "Tax Return" shall mean any report, return (including
information return), claim for refund, or statement relating to Taxes or
required to be filed with any Tax authority (domestic or foreign), including any
schedule or attachment thereto, and including any amendments thereof.
TECHNOLOGY. "Technology" shall mean tangible embodiments of Intellectual
Property Rights, including in electronic, written or other media, technical
documentation, specifications, designs, bills of material, build instructions,
test reports, schematics, algorithms, application programming interfaces, user
interfaces, routines, formulae, databases, materials, compounds, reagents, lab
notebooks, processes, prototypes, samples, works in progress, inventories,
studies, or other know-how and other works of authorship.
UNCURED INACCURACY. There shall be deemed to be an "Uncured Inaccuracy" in
a representation or warranty of a party to the Agreement as of a particular date
only if such representation or warranty shall be inaccurate as of such date as
if such representation or warranty were made as of such date, and the inaccuracy
in such representation or warranty shall not have been cured in all material
respects since such date; provided, however, that if such representation or
warranty by its terms speaks as of the date of the Agreement or as of another
particular date, then there shall not be deemed to be an Uncured Inaccuracy in
such representation or warranty unless such representation or warranty shall
have been inaccurate as of the date of the Agreement or such other
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particular date, respectively, and the inaccuracy in such representation or
warranty shall not have been cured in all material respects since such date.
OTHER DEFINED TERMS
The following terms shall have the meanings defined for such terms in the
Sections set forth below:
TERM SECTION
---- ---------
Alternative Financing 5.14(a)
Appraisal Shares 2.4(c)
Assumed Option 5.9(a)
Certificate of Merger 1.3
Closing 1.3
Closing Date 1.3
Company Preamble
Company Change in Recommendation 5.3(b)
Company Disclosure Schedule 3
Company ESPP 3.5(a)
Company Plan 3.20(a)
Company Recommendation Recitals
Company Requisite Vote 3.25
Company SEC Documents 3.6(a)
Company Stock Certificate 2.2
Company Termination Fee 3.29
Continuing Employee 5.10(a)
D&O Insurance Policy 5.11(b)
Debt Commitment Letters 4.5
Debt Financing 4.5
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TERM SECTION
---- ---------
DGCL Recitals
Effect Exhibit A
Effective Time 1.3
Environmental Laws 3.22
Environmental Permits 3.22
Foreign Plans 3.20(j)
Harmful Code 3.11(g)
Hazardous Substances 3.22
Indemnified Party 5.11(d)
Inverness Payment 5.16
Matching Period 7.1(d)
Material Contract 3.12
Merger 1.1
Merger Consideration Recitals
Merger Sub Preamble
Multiemployer Plan 3.20(e)
Non-Budgeted Capital Expenditure 5.1(u)
Notice of Recommendation Change 5.3(c)
Order 6.1
Outside Date 7.1(b)
Parent Preamble
Parent Disclosure Schedule 4.3
Parent Plans 5.10(a)
Payment Agent 2.3(a)
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TERM SECTION
---- ---------
Preferred Shares 3.5(a)
Representatives 5.2(a)
Surviving Corporation 1.1
Termination Fee 7.3(a)
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EXHIBIT B
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
BIOSITE INCORPORATED
FIRST: The name of the corporation (hereinafter the "Corporation") is:
BIOSITE INCORPORATED.
SECOND: The name and address, including street, number, city and county, of
the registered agent of the Corporation in the State of Delaware are:
The Corporation Trust Company
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxx Xxxxxx, Xxxxxxxx 00000
THIRD: The nature of the business and the purposes to be conducted and
promoted by the Corporation shall be to engage in any lawful act or activity for
which corporations may be organized under the General Corporation Law of the
State of Delaware.
FOURTH: The total number of shares of stock which the Corporation shall
have authority to issue is One Thousand (1,000) shares. The par value of each
such share is $0.001. All such shares are of one class and are shares of Common
Stock.
FIFTH: The Corporation is to have perpetual existence.
SIXTH: The personal liability of the directors of the Corporation is hereby
eliminated to the fullest extent permitted by paragraph (7) of subsection (b) of
Section 102 of the General Corporation Law of the State of Delaware, as the same
may be amended and supplemented.
SEVENTH: The Corporation shall, to the fullest extent permitted by Section
145 of the General Corporation Law of the State of Delaware, as the same may be
amended and supplemented, indemnify any and all persons whom it shall have power
to indemnify under said section from and against any and all of the expenses,
liabilities or other matters referred to in or covered by said section, and the
indemnification provided for herein shall not be deemed exclusive of any other
rights to which those indemnified may be entitled under any Bylaw, agreement,
vote of stockholders or disinterested directors or otherwise, both as to action
in his official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such person.
EIGHTH: From time to time any of the provisions of this certificate of
incorporation may be amended, altered or repealed, and other provisions
authorized by the laws of the State of Delaware at the time in force may be
added or inserted in the manner and at the time prescribed by said laws, and all
rights at any time conferred upon
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the stockholders of the Corporation by this certificate of incorporation are
granted subject to the provisions of this Article
EIGHTH. In addition to the other powers expressly granted by statute, the
Board of Directors shall have the power to adopt, repeal, alter, amend and
rescind the Bylaws of the Corporation.
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