EXECUTION COPY
AGREEMENT
AND PLAN OF MERGER
by
and among
KINETIC
CONCEPTS, INC.
LEOPARD
ACQUISITION SUB, INC.
and
LIFECELL
CORPORATION
Dated
April
7, 2008
TABLE OF CONTENTS
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Page
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Index
of Defined Terms
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Index
- i
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ARTICLE
I
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THE
OFFER AND MERGER
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Section
1.1
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The
Offer
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2
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Section
1.2
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Company
Actions
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3
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Section
1.3
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Directors
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5
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Section
1.4
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Top-Up
Option
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6
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Section
1.5
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The
Merger
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7
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Section
1.6
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Effective
Time
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8
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Section
1.7
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Closing
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8
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Section
1.8
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Directors
and Officers of the Surviving Corporation
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8
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Section
1.9
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Subsequent
Actions
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8
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Section
1.10
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Stockholders’
Meeting
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8
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Section
1.11
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Merger
Without Meeting of Stockholders
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9
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ARTICLE
II
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CONVERSION
OF SECURITIES
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Section
2.1
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Conversion
of Capital Stock
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10
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Section
2.2
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Paying
Agent
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10
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Section
2.3
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Dissenting
Shares
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12
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Section
2.4
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Company
Equity Plans
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12
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ARTICLE
III
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REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
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Section
3.1
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Organization
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14
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Section
3.2
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Subsidiaries
and Affiliates
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15
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Section
3.3
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Capitalization
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16
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Section
3.4
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Authorization;
Validity of Agreement; Company Action
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17
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Section
3.5
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Board
Approvals
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17
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Section
3.6
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Required
Vote
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18
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Section
3.7
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Consents
and Approvals; No Violations
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18
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Section
3.8
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Company
SEC Documents and Financial Statements
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18
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Section
3.9
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Absence
of Certain Changes
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21
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Section
3.10
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No
Undisclosed Liabilities
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21
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Page
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Section
3.11
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Litigation;
Orders
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21
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Section
3.12
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Employee
Benefit Plans; ERISA
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21
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Section
3.13
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Taxes
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24
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Section
3.14
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Material
Contracts
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26
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Section
3.15
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Real
and Personal Property
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28
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Section
3.16
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Intellectual
Property
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28
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Section
3.17
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Labor
Matters
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30
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Section
3.18
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Compliance
with Laws
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31
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Section
3.19
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Condition
of Assets
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31
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Section
3.20
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Customers
and Suppliers
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32
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Section
3.21
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Environmental
Matters
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32
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Section
3.22
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Insurance
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34
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Section
3.23
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Certain
Business Practices
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35
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Section
3.24
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Schedule
14D-9; Information in the Offer Documents
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35
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Section
3.25
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Opinion
of Financial Advisor
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35
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Section
3.26
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Brokers
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35
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Section
3.27
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State
Takeover Statutes
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36
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Section
3.28
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Regulatory
Compliance
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36
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ARTICLE
IV
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REPRESENTATIONS
AND WARRANTIES OF PARENT AND THE PURCHASER
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Section
4.1
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Organization
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37
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Section
4.2
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Authorization;
Validity of Agreement; Necessary Action
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38
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Section
4.3
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Consents
and Approvals; No Violations
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38
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Section
4.4
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Offer
Documents; Information in the Proxy Statement
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39
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Section
4.5
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Brokers
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39
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Section
4.6
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Regarding
Purchaser; Approval of Arrangements
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39
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Section
4.7
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Financing
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40
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Section
4.8
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No
Other Representations or Warranties; Investigation by the
Parent
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40
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ARTICLE
V
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CONDUCT
OF BUSINESS PENDING THE MERGER
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Section
5.1
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Interim
Operations of the Company
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41
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Section
5.2
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No
Solicitation
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43
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Section
5.3
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Interim
Operations of Parent and Purchaser
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46
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ARTICLE
VI
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ADDITIONAL
AGREEMENTS
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Section
6.1
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Notification
of Certain Matters
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47
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Section
6.2
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Access;
Confidentiality
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47
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Page
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Section
6.3
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Publicity
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48
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Section
6.4
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Insurance
and Indemnification
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48
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Section
6.5
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Further
Action; Reasonable Best Efforts
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49
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Section
6.6
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State
Takeover Laws
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50
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Section
6.7
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Stockholder
Litigation
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50
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Section
6.8
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Financial
Information and Cooperation
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51
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Section
6.9
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Company
SEC Documents
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52
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Section
6.10
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Approval
of Compensation Arrangements
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53
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Section
6.11
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Employee
Benefits Matters
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54
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ARTICLE
VII
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CONDITIONS
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Section
7.1
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Conditions
to Each Party’s Obligations to Effect the
Merger
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55
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ARTICLE
VIII
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TERMINATION
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Section
8.1
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Termination
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56
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Section
8.2
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Notice
of Termination; Effect of Termination
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58
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ARTICLE
IX
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MISCELLANEOUS
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Section
9.1
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Amendment
and Modification
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59
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Section
9.2
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Non-survival
of Representations and Warranties
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60
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Section
9.3
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Expenses
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60
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Section
9.4
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Certain
Definitions
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60
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Section
9.5
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Notices
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62
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Section
9.6
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Interpretation
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63
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Section
9.7
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Jurisdiction
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63
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Section
9.8
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Service
of Process
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64
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Section
9.9
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Specific
Performance
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64
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Section
9.10
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Counterparts
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64
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Section
9.11
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Entire
Agreement; Third-Party Beneficiaries
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64
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Section
9.12
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Severability
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65
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Section
9.13
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Governing
Law
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65
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Section
9.14
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Assignment
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65
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Section
9.15
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Obligation
of Parent
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65
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Annex
I
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A-1
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Index of Defined Terms
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Defined
Term
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Page
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Acceptance
Time
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5
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Acquisition
Agreement
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43
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Acquisition
Proposal
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57
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Adverse
Recommendation Change
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42
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Agreement
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1
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Arrangements
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23
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Benefit
Plans
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21
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Business
Day
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57
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CERCLIS
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31
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Certificate
of Merger
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7
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Certificates
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10
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Cleanup
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32
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Closing
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8
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Closing
Date
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8
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COBRA
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22
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Code
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57
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Company
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1
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Company
401(k) Plan
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53
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Company
Board of Directors
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1
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Company
Board Recommendation
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4
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Company
Disclosure Schedule
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14
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Company
Employee
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52
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Company
Financial Advisor
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34
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Company
Material Adverse Change
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14
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Company
Material Adverse Effect
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14
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Company
Permits
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30
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Company
SEC Documents
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18
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Company
Stockholder Approval
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17
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Company
Stockholders
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1
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Company
Stockholders’ Meeting
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8
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Company
Termination Fee
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56
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Confidentiality
Agreement
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42
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Contract
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18
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Covered
Securityholders
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23
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D&O
Insurance
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46
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Debt
Commitment Letter
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38
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Delaware
Court
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60
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DGCL
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1
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Dissenting
Shares
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12
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Effective
Time
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8
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Encumbrances
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58
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Environmental
Claim
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32
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Environmental
Laws
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32
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ERISA
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21
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ERISA
Affiliate
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21
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Exchange
Act
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2
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FDA
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30
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FDCA
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29
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Financial
Statements
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18
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Financing
|
38
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GAAP
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18
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Governmental
Entity
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17
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Hazardous
Substances
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33
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HSR
Act
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17
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Independent
Directors
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5
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Intellectual
Property
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58
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knowledge
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58
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Law
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58
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Leased
Real Property
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27
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Material
Contracts
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26
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Material
Customers
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30
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Material
Licenses
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26
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Material
Suppliers
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30
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MDD
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30
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Merger
|
1
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Merger
Consideration
|
10
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Minimum
Condition
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2
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Multiemployer
Pension Plans
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21
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NASDAQ
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5
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NPL
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31
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Offer
|
1
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Offer
Documents
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3
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Offer
Price
|
1
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Option
|
12
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Option
Consideration
|
12
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Option
Plans
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12
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Order
|
58
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Outside
Date
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54
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Parent
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1
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Parent
401(k) Plan
|
53
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Parent
Plan
|
52
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Parent
Termination Fee
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56
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Paying
Agent
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10
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Pension
Plans
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21
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Performance-Based
Restricted Stock
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13
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Performance-Based
RSU
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13
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Person
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15
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PHSA
|
29
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Proxy
Statement
|
8
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Purchaser
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1
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Purchaser
Common Stock
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9
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Real
Property Lease
|
27
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Representatives
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42
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Restricted
Stock
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13
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Restricted
Stock Unit
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13
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Schedule
14D-9
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4
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SEC
|
3
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Securities
Act
|
58
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Shares
|
1
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Subsidiary
|
15
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Superior
Proposal
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42
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Surviving
Corporation
|
7
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Tail
Policy
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46
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Tax
|
58
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Tax
Return
|
59
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Taxing
Authority
|
59
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Time-Based
Restricted Stock
|
12
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Time-Based
RSU
|
13
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Top-Up
Option
|
6
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Top-Up
Option Shares
|
6
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Transactions
|
16
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Voting
Debt
|
15
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WARN
Act
|
29
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AGREEMENT
AND PLAN OF MERGER
AGREEMENT
AND PLAN OF MERGER (hereinafter referred to as this “
Agreement
”), dated April 7, 2008, by and among KINETIC CONCEPTS,
INC., a Texas corporation (“ Parent
”), LEOPARD ACQUISITION SUB, INC., a Delaware
corporation and a wholly-owned subsidiary of Parent (the
“ Purchaser
”), and LIFECELL CORPORATION, a Delaware corporation
(the “ Company
”).
WHEREAS,
it is proposed that, on the terms and subject to the
conditions set forth in this Agreement, the Purchaser make a
cash tender offer (such tender offer, as it may be amended and
supplemented from time to time as permitted by this Agreement,
the “ Offer
”) to purchase all of the issued and outstanding shares
of common stock, par value $0.001 per share, of the Company
(the “ Shares
”) other than shares of Restricted Stock (which shall be
purchased in accordance with Section
2.4 below) for $51.00 per Share, net to the sellers in
cash (such price, or any such higher price per Share as may be
paid in the Offer, is referred to herein as the “
Offer
Price ”), subject to any required withholding of
Taxes;
WHEREAS,
it is proposed that, on the terms and subject to the
conditions set forth in this Agreement, following the
consummation of the Offer, Purchaser shall merge with and into
the Company (the “ Merger
”), pursuant to which each outstanding Share shall be
converted into the right to receive the Offer Price, without
interest, except for (i) Shares held by holders who comply
with the relevant provisions of the General Corporation Law of
the State of Delaware (the “ DGCL
”) regarding the right of stockholders to require
appraisal of their Shares and (ii) Shares held in the treasury
of the Company or owned by Parent, Purchaser or any wholly
owned Subsidiary of Parent;
WHEREAS,
the Board of Directors of the Company (the “ Company Board of
Directors ”) (i) has approved this Agreement,
(ii) has determined that the Offer, the Merger and the other
Transactions are fair to, advisable and in the best interests
of the Company and its stockholders, and (iii) is recommending
that the holders of the Shares (the “ Company
Stockholders ”) accept the Offer, tender their
Shares into the Offer and adopt this Agreement, in each case,
upon the terms and subject to the conditions set forth in this
Agreement; and
WHEREAS,
each of the Board of Directors of Parent and Purchaser has (i)
approved this Agreement and (ii) has determined that the
Offer, the Merger and Transactions are fair to, advisable and
in the best interests of their respective
corporations.
NOW,
THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements
contained in this Agreement, and subject to the conditions set
forth herein, the parties hereto agree as
follows:
ARTICLE
I
THE
OFFER AND MERGER
Section
1.1 The Offer
.
(a) Provided that this Agreement shall not have
been terminated in accordance with Section
8.1 and none of the events or conditions set forth in
Annex I hereto
shall have occurred and be continuing and not have been waived
by Parent or Purchaser, as promptly as reasonably practicable
and, in any event, within ten (10) Business Days of the date
of this Agreement, the Purchaser shall commence (within the
meaning of Rule 14d-2 under the U.S. Securities Exchange Act
of 1934, as amended (together with the rules and regulations
thereunder, the “ Exchange
Act ”)) the Offer to purchase for cash all Shares
at the Offer Price. The obligations of the
Purchaser to accept for payment and to pay for any Shares
validly tendered on or prior to the expiration of the Offer
and not withdrawn shall be subject to (i) there being validly
tendered and not withdrawn prior to the expiration of the
Offer that number of Shares which represents a majority of the
Shares outstanding on a fully-diluted basis (the “
Minimum
Condition ”) and (ii) the other conditions set
forth in Annex I
hereto. Subject to the prior satisfaction or waiver
by Parent or the Purchaser of the Minimum Condition and the
other conditions of the Offer set forth in Annex I
hereto, the Purchaser shall, in accordance with the terms of
the Offer, consummate the Offer and accept for payment and pay
for all Shares validly tendered and not withdrawn pursuant to
the Offer promptly after expiration of the Offer, which shall
initially be the 20th Business Day following the commencement
of the Offer ;
provided
, however ,
that (x) if on the initial expiration date of the Offer or on
any subsequent scheduled expiration date of the Offer (as
extended in accordance with this Agreement), all conditions to
the Offer shall not have been satisfied or waived, the
Purchaser may, from time to time, in its sole discretion,
extend the Offer for such period as the Purchaser may
determine ;
provide
d , however , that
if on the initial expiration date of the Offer the conditions to
the Offer set forth in paragraphs (c), (d) and (e) of Annex I hereto
shall each be satisfied (or, in the case of paragraphs (d) and (e),
if any such breach or failure to comply that has caused such
non-satisfaction of the condition is objectively curable within ten
(10) Business Days) but any other condition to the Offer shall not
have been satisfied or waived, Purchaser shall be obligated to
extend the Offer for one or more periods of time of up to ten (10)
Business Days each (or such longer period as Purchaser may agree in
writing) until such conditions have been satisfied or waived;
provided ,
that Purchaser shall not be required to extend the Offer beyond the
date that is thirty (30) Business Days following the initial
expiration of the Offer; (y) the Purchaser may, in its sole
discretion, extend the Offer for any period required by any rule,
regulation, interpretation or position of the SEC or the staff
thereof applicable to the Offer; and (z) the Purchaser may, in its
sole discretion, provide a “subsequent offering period”
for three (3) to twenty (20) Business Days to acquire outstanding
untendered Shares in accordance with Rule 14d-11 under the Exchange
Act if the Minimum Condition and all of the other conditions set
forth in Annex I hereto
are satisfied or waived, but the number of Shares that have been
validly tendered and not withdrawn in the Offer and accepted for
payment, together with any Shares then owned by Parent, is less
than 90% of the outstanding Shares. Purchaser shall not
extend the Offer following the termination of this
Agreement. In addition, the Purchaser may increase the
Offer Price and extend the Offer to the extent required by Law in
connection with such increase, in each case in its sole discretion
and without the Company’s consent, but Purchaser and Parent
shall not, without the prior written consent of the Company, (A)
decrease the Offer Price (as it may have been increased hereunder)
or change the form of consideration payable in the Offer, (B)
decrease the number of Shares sought pursuant to the Offer, (C)
amend or waive the Minimum Condition, (D) add to the conditions to
the Offer set forth in Annex I hereto
or modify such conditions in a manner adverse to the holders of
Shares, (E) extend the Offer, except as permitted by this
Section 1.1(a) or
(F) make any other change in the terms or conditions of the Offer
that is adverse to the holders of Shares. The Offer may
not be terminated prior to its expiration date (as such expiration
date may be extended and re-extended in accordance with this
Agreement), unless this Agreement is validly terminated in
accordance with Article VIII
. If Purchaser shall commence a subsequent offering
period in connection with the Offer, Purchaser shall accept for
payment and pay for all Shares validly tendered during such
subsequent offering period.
(b) On
the date the Offer is commenced, Purchaser shall file with the
United States Securities and Exchange Commission (the “
SEC
”) a Tender Offer Statement on Schedule TO with respect
to the Offer, which shall include the offer to purchase, form
of the letter of transmittal and form of notice of guaranteed
delivery (collectively, together with any amendments and
supplements thereto, the “ Offer
Documents ”). Subject to the
Company’s compliance with Section
1.2(b) , Parent and the Purchaser shall cause the Offer
Documents to be disseminated to holders of Shares as required
by applicable U.S. federal securities laws. Each of
Parent and the Purchaser, on the one hand, and the Company, on
the other hand, agree to promptly correct any information
provided by it for use in the Offer Documents if it shall have
become false or misleading in any material respect or as
otherwise required by Law. The Purchaser further
agrees to take all steps necessary to cause the Offer
Documents as so corrected to be filed with the SEC and
disseminated to holders of Shares as required by applicable
U.S. federal securities laws. The Company shall
promptly furnish to Parent and Purchaser all information
concerning the Company that is required or reasonably
requested by Parent or Purchaser in connection with the
obligations relating to the Offer Documents contained in this
Section
1.1(b) . The Company and its counsel shall
be given a reasonable opportunity to review and comment on the
Offer Documents before they are filed with the SEC and Parent
and the Purchaser shall give reasonable and good faith
consideration to any comments made by the Company and its
counsel. In addition, Parent and the Purchaser
agree to provide the Company and its counsel with any comments
or communications that Parent, the Purchaser or their counsel
may receive from time to time from the SEC or its staff with
respect to the Offer Documents promptly after Parent’s
or the Purchaser’s, as the case may be, receipt of such
comments, and any written or oral responses thereto, and shall
provide the Company and its counsel a reasonable opportunity
to participate in the response of Parent and Purchaser to
those comments and to provide comments on that response (to
which reasonable and good faith consideration shall be given),
including by participating with Parent and the Purchaser or
their counsel in any discussions or meetings with the
SEC.
Section
1.2 Company
Actions
(a) The Company hereby approves of and
consents to the Offer, and represents and warrants that the
Company Board of Directors, at a meeting duly called and held,
has unanimously (i) approved this Agreement, and deemed this
Agreement, the Offer, the Merger and the Transactions
advisable, fair to and in the best interests of the
Company Stockholders; (ii) approved and adopted this Agreement
and the Transactions, including the Offer and the Merger, in
all respects, and, subject to the accuracy of the
representation set forth in Section 4.6(b) of this
Agreement, such approval constitutes approval of the Offer,
the Merger, this Agreement and the Transactions for purposes
of Section 203 of the DGCL; and (iii) subject to Section 5.2(e) , resolved
to recommend that the Company Stockholders accept the Offer,
that the Company Stockholders tender their Shares in the Offer
to Purchaser, and that the Company Stockholders adopt this
Agreement to the extent required by applicable Law (the
“ Company Board
Recommendation ”). The Company
consents to the inclusion of the Company Board Recommendation
in the Offer Documents, subject to Section 5.2(e)
. To the knowledge of the Company, as of the date
of this Agreement all of the Company’s directors and
executive officers intend to tender all Shares beneficially
owned by them to Purchaser pursuant to the Offer.
(b) As
soon as reasonably practicable on the day the Offer is
commenced, the Company shall, in a manner that complies with
Rule 14d-9 under the Exchange Act, file with the SEC a Tender
Offer Solicitation/Recommendation Statement on Schedule 14D-9
(together with all amendments, supplements and exhibits
thereto, the “ Schedule
14D-9 ”) which shall, subject to the provisions
of Section
5.2(e) , contain the Company Board
Recommendation. The Company agrees to cause the
Schedule 14D-9 to be filed with the SEC and, subject to the
Purchaser’s compliance with Section
1.1(a) , disseminated to holders of Shares as required
by and in accordance with applicable U.S. federal securities
laws. The Company, on the one hand, and Parent and
the Purchaser, on the other hand, agree to promptly correct
any information provided by it for use in the Schedule 14D-9
if it shall have become false or misleading in any material
respect or as otherwise required by Law. The
Company agrees to take all steps necessary to cause the
Schedule 14D-9 as so corrected to be filed with the SEC and
disseminated to holders of the Shares as required by and in
accordance with applicable U.S. federal securities
laws. Parent and the Purchaser shall promptly
furnish to the Company all information concerning Parent and
the Purchaser that is required or reasonably requested by the
Company in connection with the obligations relating to
Schedule 14D-9 contained in this Section
1.2(b) . Parent, the Purchaser and their
counsel shall be given the reasonable opportunity to review
and comment on the Schedule 14D-9 before it is filed with the
SEC and the Company shall give reasonable and good faith
consideration to any comments made by Parent, the Purchaser
and their counsel. In addition, the Company agrees
to provide Parent, the Purchaser and their counsel in writing
with any comments or communications that the Company or its
counsel may receive from time to time from the SEC or its
staff with respect to the Schedule 14D-9 promptly after the
Company’s receipt of such comments, and any oral or
written responses thereto and shall provide Parent, the
Purchaser and their counsel a reasonable opportunity to
participate in the response of the Company to those comments
and to provide comments on that response (to which reasonable
and good faith consideration shall be given), including by
participating with the Company or its counsel in any
discussions or meetings with the SEC.
(c) In
connection with the Offer, the Company shall promptly furnish
(or cause its transfer agent to furnish) to the Purchaser
mailing labels, security position listings and any available
listing or computer file containing the names and addresses of
the record holders of the Shares as of a recent date, and
shall promptly furnish the Purchaser with such information and
assistance (including, but not limited to, lists of holders of
the Shares, updated periodically, and their addresses, mailing
labels and lists of security positions) as the Purchaser or
its agents may reasonably request. Except as
required by applicable Law, and except as necessary to
communicate regarding the Offer, the Merger or the
Transactions with the Company Stockholders, Parent and
Purchaser (and their respective Representatives) shall hold in
confidence the information contained in any such labels,
listings and files, shall use such information solely in
connection with the Offer, the Merger and the Transactions,
and, if this Agreement is terminated or the Offer is otherwise
terminated, shall promptly deliver or cause to be delivered to
the Company or destroy all copies of such information, labels,
listings and files then in their possession or in the
possession of their Representatives.
Section
1.3 Directors
Promptly upon the acceptance for payment of
any Shares by Parent or the Purchaser or any of their
affiliates pursuant to the Offer (the “ Acceptance
Time ”) and from time to time thereafter, Parent
shall be entitled, subject to Section
1.3(b) , to elect or designate such number of
directors, rounded up to the next whole number, on the Company
Board of Directors as is equal to the product of (i) the total
number of directors on the Company Board of Directors (giving
effect to the directors elected or designated by Parent
pursuant to this Section
1.3 ) multiplied by (ii) the quotient obtained by
dividing the aggregate number of Shares beneficially owned by
the Purchaser, Parent and any of their affiliates by the total
number of Shares then outstanding (on a fully-diluted
basis). The Company shall, upon Parent’s
request, either use its reasonable best efforts to promptly
increase the size of the Company Board of Directors, or use
its reasonable best efforts to promptly secure the
resignations of such number of its incumbent directors, or
both, as is necessary to enable Parent’s designees to be
so elected or designated to the Company’s Board of
Directors, and shall use its reasonable best efforts to take
all actions necessary to cause Parent’s designees to be
so elected or designated at such time. At such
time, the Company shall, upon Parent’s request, also use
its reasonable best efforts to cause persons elected or
designated by Parent to constitute the same percentage
(rounded up to the next whole number) as is on the Company
Board of Directors of each committee of the Company Board of
Directors, subject to appropriate
qualification. The Company’s obligations
under this Section
1.3 shall be subject to Section 14(f) of the Exchange
Act and Rule 14f-1 thereunder. The Company shall
promptly take all actions required pursuant to such Section
14(f) and Rule 14f-1 in order to fulfill its obligations under
this Section
1.3 , including, but not limited to, mailing to
stockholders (together with the Schedule 14D-9) such
information as is required by such Section 14(f) and Rule
14f-1 to enable Parent’s designees to be elected or
designated to the Company Board of
Directors. Parent or the Purchaser shall supply the
Company with the information and consents with respect to
either of them and their nominees, officers, directors and
affiliates to the extent required by such Section 14(f) and
Rule 14f-1.
(b) In
the event that Parent’s designees are elected or
designated to the Board of Directors of the Company, then,
until the Effective Time, the Company shall cause the Board of
Directors of the Company to have at least three (3) directors
who are (i) directors on the date of this Agreement, (ii)
independent directors for purposes of the continued listing
requirements of the Nasdaq Global Market (“ NASDAQ
”) and (iii) reasonably satisfactory to Parent (such
directors, the “ Independent
Directors
”); provided
, however ,
that, if any Independent Director is unable to serve due to
death or disability or any other reason (including as a result
of removal for cause pursuant to the last sentence of
this Section
1.3(b) ), the remaining Independent Directors (or
Independent Director) shall be entitled to elect or designate
another individual (or individuals) who serve(s) as a director
(or directors) on the date of this Agreement (provided that no
such individual is an employee of the Company) to fill the
vacancy, and such director (or directors) shall be deemed to
be an Independent Director (or Independent Directors) for
purposes of this Agreement. If no Independent
Director remains prior to the Effective Time, a majority of
the members of the Board of Directors of the Company at the
time of the execution of this Agreement shall be entitled to
designate three persons to fill such vacancies; provided
that such individuals shall not be employees or officers of
the Company, Parent or the Purchaser and shall be reasonably
satisfactory to Parent, and such persons shall be deemed
Independent Directors for purposes of this
Agreement. Following the Acceptance Time and prior
to the Effective Time, Parent and Purchaser shall not cause
any amendment or termination of this Agreement, any extension
by the Company of the time for the performance of any of the
obligations or other acts of Purchaser or Parent or waiver of
any of the Company’s rights under this Agreement or
other action adversely affecting the rights of the Company
Stockholders (other than Parent or the Purchaser), to be
effected without the affirmative vote of a majority of the
Independent Directors. Following the Acceptance
Time and prior to the Effective Time, neither Parent nor
Purchaser shall take any action to remove any Independent
Director unless the removal shall be for cause.
Section
1.4
Top-Up Option
(a) Subject
to the requirements of Section
1.4(b) , the Company hereby grants to Parent and the
Purchaser an irrevocable option (the “ Top-Up
Option ”) to purchase from the Company that
number (but not less than that number) of shares of
Company common stock (the “ Top-Up Option
Shares ”) equal to the number of shares of
Company common stock that, when added to the Shares owned by
Parent and Purchaser immediately following consummation of the
Offer, shall constitute one share more than 90% of the
Shares outstanding (after giving effect to the issuance
of the Top-Up Option Shares) for consideration per Top-Up
Option Share equal to the Offer Price.
(b) The
Top-Up Option shall be exercisable only one time and only
after the purchase of and payment for Shares pursuant to the
Offer by Parent or the Purchaser as a result of which Parent
and the Purchaser own beneficially at least 80% of the Shares
outstanding. The Top-Up Option shall not be exercisable
if the number of shares of Company common stock subject
thereto exceeds the number of authorized shares of Company
common stock available for issuance and not otherwise reserved
for issuance by the Company.
(c) In
the event that Parent or Purchaser wishes to exercise the
Top-Up Option, Parent or the Purchaser shall give the Company
written notice specifying the number of shares of Company
common stock that are or will be owned by Parent and the
Purchaser immediately following consummation of the Offer
and specifying a place and a time for the closing of the
purchase (which shall not be more than three (3) Business Days
after delivery of such notice) and certifying that as promptly
as practicable following such exercise the Purchaser and
Parent intend to (and Purchaser and Parent shall as promptly
as practicable after such exercise) consummate the Merger in
accordance with Section 253 of the DGCL as contemplated by
Section
1.11 . The Company shall, as soon as
practicable following receipt of such notice, deliver written
notice to the Purchaser specifying the number of Top-Up
Shares. At the closing of the purchase of the
Top-Up Shares, the purchase price owing upon exercise of the
Top-Up Option that equals the product of (i) the number of
shares of Company common stock purchased pursuant to the
Top-Up Option, multiplied by (ii) the Offer Price, shall be
paid to the Company, at the election of Parent and Purchaser,
in cash (by wire transfer or cashier’s check) or by
delivery of a promissory note having full recourse to
Parent.
(d) The
Top-Up Option may not be exercised if any provision of
applicable Law or any judgment, injunction, order or decree of
any Governmental Entity shall prohibit, or require any action,
consent, approval, authorization or permit of, or action by,
or filing with or notification to, any Governmental Entity or
the Company Stockholders in connection with the exercise of
the Top-Up Option or the delivery of the Top-Up Shares in
respect of such exercise, which action, consent, approval,
authorization or permit, action, filing or notification has
not theretofore been obtained or made, as
applicable.
(e) Each
of Parent and the Purchaser understands that the Shares that
Purchaser may acquire upon exercise of the Top-Up Option will
not be registered under the Securities Act, and will be issued
in reliance upon an exemption thereunder for transactions not
involving a public offering. Parent and the
Purchaser represent and warrant to the Company that the
Purchaser is, and will be upon exercise of the Top-Up Option,
an “accredited investor” (as defined in Rule 501
of Regulation D promulgated under the Securities
Act). The Purchaser agrees that the Top-Up Option
and the Top-Up Shares to be acquired upon exercise thereof are
being and will be acquired for the purpose of investment and
not with a view to or for resale in connection with any
distribution thereof within the meaning of the Securities
Act. Any certificates evidencing Top-Up Shares may
include any legends required by applicable securities
laws.
Section
1.5 The
Merger . (a) Upon the terms and subject to
the conditions set forth in this Agreement, at the Effective
Time, the Company and the Purchaser shall consummate the
Merger, pursuant to which (i) the Purchaser shall be merged
with and into the Company and the separate corporate existence
of the Purchaser shall thereupon cease, (ii) the Company shall
be the successor or surviving corporation in the Merger and
shall continue to be governed by the Laws of the State of
Delaware, and (iii) the separate corporate existence of the
Company with all its rights, privileges, immunities, powers
and franchises shall continue unaffected by the
Merger. The corporation surviving the Merger is
sometimes hereinafter referred to as the “ Surviving
Corporation. ” The Merger shall have
the effects set forth herein and in the applicable provisions
of the DGCL.
(b) The
Certificate of Incorporation of the Company, as in effect
immediately prior to the Effective Time, shall be amended in
its entirety as set forth in Exhibit A hereto and, as so
amended shall be the Certificate of Incorporation of the
Surviving Corporation, until thereafter amended as provided by
Law and such Certificate of Incorporation (and subject to
Secti
on
6.4( a
)
).
(c) The
Bylaws of Company, as in effect immediately prior to the
Effective Time, shall be amended in their entirety as set
forth on Exhibit B hereto and, as so amended, shall be the
Bylaws of the Surviving Corporation, until thereafter amended
as provided by Law, the Certificate of Incorporation of the
Surviving Corporation and such Bylaws (and subject to
Section
6.4( a
)
).
Section
1.6 Effective
Time Parent, the Purchaser and the Company shall
cause the appropriate certificate of merger or certificate of
ownership, as the case may be (the “ Certificate of
Merger ”) to be executed and filed on the Closing
Date with the Secretary of State of the State of Delaware as
provided in the DGCL. The Merger shall become
effective on the date and time on which the Certificate of
Merger has been duly filed with the Secretary of State of the
State of Delaware, or such later time as agreed upon by the
parties, such time hereinafter referred to as the “
Effective
Time .”
Section
1.7 Closing
The closing of the Merger (the “Closing”)
will take place at 10:00 a.m., Chicago time, on a date to be
specified by the parties, such date to be no later than the
second Business Day after satisfaction or waiver of all of the
conditions set forth in Article VII (the “ Closing
Date
”), at the offices of Skadden, Arps, Slate, Meagher
& Flom LLP, 333 West Wacker Drive, Chicago, Illinois
60606, unless another date or place is agreed to in writing by
the parties hereto.
Section
1.8 Directors and
Officers of the Surviving Corporation
. The directors of the Purchaser immediately prior
to the Effective Time shall, from and after the Effective
Time, be the directors of the Surviving Corporation, and the
officers of the Company immediately prior to the Effective
Time shall, from and after the Effective Time, be the officers
of the Surviving Corporation, in each case until their
respective successors shall have been duly elected, designated
or qualified, or until their earlier death, resignation or
removal in accordance with the
Surviving Corporation’s Certificate of
Incorporation and Bylaws.
Section
1.9 Subsequent
Actions
. If at any time after the Effective Time the
Surviving Corporation shall determine, in its sole discretion,
that any actions are necessary or desirable to vest, perfect
or confirm of record or otherwise in the Surviving Corporation
its right, title or interest in, to or under any of the
rights, properties or assets of either of the Company or the
Purchaser acquired or to be acquired by the Surviving
Corporation as a result of, or in connection with, the Merger
or otherwise to carry out this Agreement, then the officers
and directors of the Surviving Corporation shall be authorized
to take all such actions as may be necessary or desirable to
vest all right, title or interest in, to and under such
rights, properties or assets in the Surviving Corporation or
otherwise to carry out this Agreement.
Section
1.10 Stockholders
’
Meeting
.
(a) If required by Law to consummate
the Merger, the Company shall in accordance with applicable
Law:
(i)
duly call, give notice of, convene and hold a special meeting
of its stockholders as soon as reasonably practicable
following the acceptance for payment of Shares by the
Purchaser pursuant to the Offer (or, if later, following the
termination of the subsequent offering period, if any) for the
purpose of considering and taking action upon this Agreement
(the “ Company
Stockholders ’
Meeting
”);
(ii)
prepare and file with the SEC a preliminary proxy or
information statement relating to the Merger and this
Agreement and use its commercially reasonable efforts (A) to
obtain and furnish the information required to be included by
the SEC in the Proxy Statement and, after consultation with
Parent, respond promptly to any comments made by the SEC with
respect to the preliminary proxy or information statement and
cause a definitive proxy or information statement (together
with any amendments and supplements thereto, the “
Proxy
Statement ”) to be mailed to its stockholders as
soon as reasonably practicable, which Proxy Statement shall
include all information required under applicable Law to be
furnished to the Company Stockholders in connection with the
Merger and the Transactions, and, subject to Section
5.2(e ) , shall
include the Company Board Recommendation and the full text of
the written opinion described in Section
3.25 , and (B) to obtain the necessary approvals of
this Agreement, the Merger and Transactions by the Company
Stockholders;
(iii)
subject to Section
5.2( e
) , use
its reasonable best efforts to solicit from holders of Shares
proxies in favor of the adoption of this Agreement and take
all actions reasonably necessary or advisable to secure the
approval of stockholders required by the DGCL, the
Company’s Certificate of Incorporation and any other
applicable Law to effect the Merger; and
(iv)
Parent and Purchaser shall supply all information reasonably
requested by the Company in connection with the preparation of
the Proxy Statement as promptly as practicable.
(b) Subject
to Section
5.2( e
) , the
Company shall, through the Company Board of Directors,
recommend to the Company Stockholders adoption of this
Agreement, and, except as expressly permitted by this
Agreement, shall not withdraw, amend or modify in a manner
adverse to Parent the Company Board
Recommendation. Parent agrees that it will vote, or
cause to be voted, all of the shares of Company common stock
then owned by it, the Purchaser or any of Parent’s other
Subsidiaries in favor of the adoption and approval of this
Agreement, the Merger and the Transactions.
Section
1.11 Merger Without
Meeting of Stockholders
. Notwithstanding Section
1.10 , in the event that Parent, the Purchaser or any
other Subsidiary of Parent shall acquire at least 90% of the
outstanding Shares, Parent and the Purchaser agree to take all
necessary and appropriate actions to cause the Merger to
become effective as soon as practicable after such
acquisition, without a meeting of stockholders of the Company,
in accordance with Section 253 of the DGCL.
ARTICLE
II
CONVERSION
OF SECURITIES
Section
2.1 Conversion of
Capital Stock .
As of the Effective Time, by virtue of the
Merger and without any action on the part of the holders of
any Shares or the holders of the common stock, par value
$0.001 per share, of the Purchaser (the “ Purchaser Common
Stock ”):
(a) Each
outstanding share of Purchaser Common Stock shall be converted
into and become one fully paid and nonassessable share of
common stock of the Surviving Corporation.
(b) All
Shares that are owned by the Company as treasury stock and any
Shares owned by Parent, the Purchaser or any other
wholly-owned Subsidiary of Parent shall be cancelled, and no
consideration shall be delivered in exchange
therefor.
(c) Each
outstanding Share (other than Shares to be cancelled in
accordance with Section
2.1(b) and other than Dissenting Shares) shall be
converted into the right to receive the Offer Price, payable
to the holder thereof in cash, without interest (the “
Me
rger
Consideration ”), subject to any required
withholding of Taxes. From and after the Effective
Time, all such Shares shall no longer be outstanding and shall
automatically be cancelled, and each holder of a certificate
representing any such Shares immediately prior to the
Effective Time shall cease to have any rights with respect
thereto, except the right to receive the Merger Consideration
therefor upon the surrender of such certificate in accordance
with Section
2.2 , without interest thereon.
Section
2.2 Paying
Agent.
(a) Prior
to the Effective Time, Parent shall designate an agent
reasonably acceptable to the Company (the “ Paying
Agent ”) for the holders of Shares in connection
with the Merger and to receive the funds to which holders of
Shares shall become entitled pursuant to Section
2.1(c) . At the Effective Time, Parent shall
deposit, or shall cause the Surviving Corporation to deposit,
with the Paying Agent cash in an amount sufficient to pay the
aggregate Merger Consideration and Option Consideration
required to be paid pursuant to Section
2.1(c) . Such funds shall be invested by the
Paying Agent as directed by Parent or the Surviving
Corporation, in its sole discretion, pending payment thereof
by the Paying Agent to the holders of the Shares; provided
that such investments shall be in obligations of or guaranteed
by the United States of America, in commercial paper
obligations rated A-1 or P-1 or better by Moody’s
Investor Services, Inc. or Standard & Poor’s
Corporation, respectively, or in certificates of deposit, bank
repurchase agreements or banker’s acceptances of
commercial banks with capital exceeding $1 billion and no such
investment or loss thereon shall effect the amounts payable to
the Company’s stockholders pursuant to this Article
II . Earnings from such investments shall be
the sole and exclusive property of Parent and the Surviving
Corporation, and no part of such earnings shall accrue to the
benefit of holders of Shares.
(b) Promptly
after the Effective Time (and in any event within three (3)
Business Days thereafter), the Paying Agent shall mail to each
holder of record of Shares (the “ Certificates
”), whose Shares were converted pursuant to Section
2.1 into the right to receive the Merger Consideration
(i) a letter of transmittal (which shall specify that delivery
shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the
Certificates to the Paying Agent, and which shall be in
customary form and shall include customary provisions with
respect to delivery of an “agent’s message”
with respect to shares held in book-entry form) and (ii)
instructions for effecting the surrender of the Certificates
in exchange for payment of the Merger
Consideration. Upon surrender of a Certificate for
cancellation to the Paying Agent or to such other agent or
agents as may be appointed by Parent, together with such
letter of transmittal, duly executed, the holder of such
Certificate shall be entitled to receive in exchange therefor
the Merger Consideration for each Share formerly represented
by such Certificate and the Certificate so surrendered shall
forthwith be cancelled. If payment of the Merger
Consideration is to be made to a Person other than the Person
in whose name the surrendered Certificate is registered, it
shall be a condition precedent of payment that (x) the
Certificate so surrendered shall be properly endorsed or shall
be otherwise in proper form for transfer, and (y) the Person
requesting such payment shall have paid any transfer and other
taxes required by reason of the payment of the Merger
Consideration to a Person other than the registered holder of
the Certificate surrendered or shall have established to the
satisfaction of the Surviving Corporation that such tax
either has been paid or is not required to be
paid. Until surrendered as contemplated by this
Section
2.2 , each Certificate shall be deemed after the
Effective Time to represent only the right to receive the
Merger Consideration, without interest thereon.
(c) At
the Effective Time, the stock transfer books of the Company
shall be closed and thereafter there shall be no further
registration of transfers of Shares on the records of the
Company. From and after the Effective Time, the
holders of Certificates evidencing ownership of Shares
outstanding immediately prior to the Effective Time shall
cease to have any rights with respect to such Shares, except
as otherwise provided for herein or by applicable
Law. If, after the Effective Time, Certificates are
presented to the Surviving Corporation for any reason, they
shall be cancelled and exchanged as provided in this
Article
II .
(d) At
any time following six months after the Effective Time, the
Surviving Corporation shall be entitled to require the Paying
Agent to deliver to it any funds (including any interest
received with respect thereto) made available to the Paying
Agent and not disbursed to holders of Certificates, and
thereafter such holders shall be entitled to look only to the
Surviving Corporation (subject to abandoned property, escheat
or other similar Laws) only as general creditors thereof with
respect to the Merger Consideration payable upon due surrender
of their Certificates, without any interest
thereon. Notwithstanding the foregoing, neither
Parent, the Surviving Corporation nor the Paying Agent shall
be liable to any holder of a Certificate for Merger
Consideration that was required to be delivered to a public
official pursuant to any applicable abandoned property,
escheat or similar Law and was so delivered.
(e) If
any Certificate shall have been lost, stolen or destroyed,
upon the making of an affidavit of that fact by the Person
claiming such Certificate to be lost, stolen or destroyed and,
if required by Parent, the posting by such Person of a bond in
such reasonable amount as Parent may direct as indemnity
against any claim that may be made against it with respect to
such Certificate, the Paying Agent shall issue in exchange for
such lost, stolen or destroyed Certificate the applicable
Merger Consideration with respect thereto pursuant to this
Agreement.
(f) Parent,
the Surviving Corporation or the Paying Agent shall be
entitled to deduct and withhold from the consideration
otherwise payable pursuant to this Agreement such amounts as
Parent, the Surviving Corporation or the Paying Agent are
required to deduct and withhold with respect to the making of
such payment under the Code, or any provision of state, local
or foreign Tax Law. To the extent that amounts
are so withheld and paid over to the appropriate Taxing
Authority by Parent, the Surviving Corporation or the Paying
Agent, such withheld amounts shall be treated for all purposes
of this Agreement as having been paid to the holder of
Certificates in respect of which such deduction and
withholding was made by Parent, the Surviving Corporation or
the Paying Agent.
Section
2.3 Dissenting
Shares .
(a) Notwithstanding anything in this
Agreement to the contrary, Shares outstanding immediately
prior to the Effective Time and held by a holder who has not
voted in favor of the adoption of this Agreement or consented
thereto in writing and who has complied with Section 262 of
the DGCL (“ Dissenting
Shares ”) shall not be converted into the right
to receive the Merger Consideration, unless such holder fails
to perfect or such holder waives, withdraws or otherwise loses
his or her right to appraisal. A holder of
Dissenting Shares shall be entitled to receive payment of the
appraised value of such Shares held by such holder in
accordance with Section 262 of the DGCL, unless, after the
Effective Time, such holder fails to perfect or such holder
waives, withdraws or otherwise loses such holder’s right
to appraisal, in which case such Shares shall be converted
into and represent only the right to receive the Merger
Consideration, without interest thereon, upon surrender of the
Certificate or Certificates representing such Shares pursuant
to Section
2.2 .
(b) The
Company shall give Parent (i) prompt notice of any written
demands for appraisal of any Shares, attempted withdrawals of
such demands and any other instruments served pursuant to the
DGCL and received by the Company relating to rights of
appraisal and (ii) the opportunity to direct all negotiations
and proceedings with respect to demands for appraisal under
the DGCL. Except with the prior written consent of
Parent, the Company shall not make any payment with respect to
any demands for appraisal or settle or offer to settle any
such demands for appraisal.
Section
2.4 Company Equity
Plans.
(a) Effective
not later than immediately prior to the Effective Time,
the Company shall terminate the Leopard Corporation Equity
Compensation Plan and any predecessor plans thereto and each
other equity compensation plan pursuant to which awards were
granted to employees or directors of or other service
providers to the Company or its Subsidiaries (collectively,
the “ Option
Plans ”). At the Effective Time, each
option to purchase shares of common stock of the Company
granted under the Option Plans or otherwise (each, an “
Option
”) that is outstanding and unexercised immediately prior
thereto shall become fully vested as of the Effective Time and
shall by virtue of the Merger and without any action on the
part of any holder of any Option be cancelled and converted
into the right to receive from the Surviving Corporation
immediately after the Effective Time a cash payment (without
interest) equal to the product of (i) the excess, if any, of
(x) the Offer Price over (y) the per share exercise price of
such Option, and (ii) the number of shares subject to such
Option as of the Effective Time (the, “ Option
Consideration
”). As of the Effective Time, all Options,
whether or not vested or exercisable, shall no longer be
outstanding and shall automatically cease to exist, and each
holder of an Option shall cease to have any rights with
respect thereto, except the right to receive the Option
Consideration.
(b) At
the Effective Time, each (i) share of common stock that is
then the subject of a restricted stock award granted under the
Option Plans or otherwise (other than awards of
Performance-Based Restricted Stock) that vests based solely on
the passage of time (each, a “ Time-Based
Restricted
Stock ”), and (ii) restricted stock unit that is
then the subject of a restricted stock unit award evidencing
the right to receive shares of common stock granted under the
Option Plans or otherwise (other than awards of
Performance-Based RSUs) that vests based solely on the passage
of time (each, a “ Time-Based
RSU ”) that is outstanding immediately prior
thereto shall become fully vested as of the Effective Time and
shall by virtue of the Merger and without any action on the
part of any holder of any Time-Based Restricted Stock or
Time-Based RSU be cancelled and converted into the right to
receive from the Surviving Corporation immediately after the
Effective Time the Merger Consideration in respect of each
underlying share.
(c) At
the Effective Time, each (i) restricted common stock award
granted under the Option Plans or otherwise that vests based
on attainment of performance goals (each, a “
Performance
-Based
Restricted
Stock ” and together with the Time-Based
Restricted Stock, a “ Restricted
Stock ”), and (ii) restricted stock unit award
evidencing the right to receive shares of common stock of the
Company granted under the Option Plans or otherwise that vests
based on the attainment of performance goals (each,
a “ Performance
-Based
RSU ” and together with the Time-Based RSU, a
“ Restricted Stock
Unit ”) that is outstanding immediately prior
thereto shall become fully vested as to only the target number
of shares of common stock of the Company that are the subject
thereof as of the Effective Time and shall by virtue of the
Merger and without any action on the part of any holder of any
Performance-Based Restricted Stock or Performance-Based RSU be
cancelled and converted into the right to receive from the
Surviving Corporation immediately after the Effective Time the
Merger Consideration in respect of such target number of
shares only. Any shares of common stock subject to
any Performance-Based Restricted Stock or Performance-Based
RSU in excess of the target number shall be cancelled at the
Effective Time and each holder of such Performance-Based
Restricted Stock or Performance-Based RSU shall cease to have
any rights with respect to such shares in excess of the target
number.
(d) Purchaser
shall be entitled to deduct and withhold from the amounts
otherwise payable pursuant to Section
2.4(a) -(c) to
any holder of Options, Restricted Stock, or Restricted Stock
Units such amounts as the Company is required to deduct and
withhold with respect to the making of such payment under the
Code or any provision of state, local or foreign Tax
Law. To the extent that amounts are so deducted and
withheld by Purchaser, such withheld amounts shall be treated
for all purposes of this Agreement as having been paid to the
holder of the Options, Restricted Stock and/or Restricted
Stock Units in respect of which such deduction and withholding
was required to be made by Purchaser. At
Purchaser’s election, amounts payable pursuant to
Section
2.4(a) -(c) may
be paid to the Surviving Corporation, which shall pay such
amounts net of such withholding and pay such withholding over
to the appropriate Taxing Authority.
(e) Prior
to the Effective Time, the Company shall take all necessary
action (i) in accordance with that certain SEC no-action
letter, dated January 12, 1999, to Skadden, Arps, Slate,
Meagher & Flom LLP) to provide that the treatment of
Options, Restricted Stock and/or Restricted Stock Units
pursuant to Section
2.4(a) -(c) will
qualify for exemption under Rule 16b-3(d) or (e), as
applicable, under the Exchange Act, and (ii) to effect the
treatment of the Option Plans and Options, Restricted Stock
and Restricted Stock Units set forth in this Section
2.4 , including obtaining any and all necessary
consents.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
Except
(i) as set forth on the disclosure schedule delivered by the
Company to Parent prior to the execution of this Agreement
(the “ Company
Disclosure Schedule ”) or (ii) as disclosed in
the Company SEC Documents filed prior to the date of this
Agreement (excluding any risk factor disclosure and disclosure
of risks included in any “forward-looking
statements” disclaimer or other statements included in
such Company SEC Documents to the extent that they are
predictive or forward-looking in nature), the Company
represents and warrants to Parent and the Purchaser as set
forth below. Each exception set forth in the
Company Disclosure Schedule is identified by reference to, or
has been grouped under a heading referring to, a specific
individual Section or subsection of this Agreement and shall
also be deemed to be disclosed with respect to any other
section of this Agreement to which the relevance of such item
is readily apparent.
Section
3.1 Organization
.
(a) The Company is a corporation duly
organized, validly existing and in good standing under the
Laws of the State of Delaware. The Company has full
corporate power and authority to own, lease and operate its
properties and to carry on its business as it is now being
conducted, except as would not, individually or in the
aggregate, reasonably be expected to have a Company Material
Adverse Effect.
(b) The
Company is duly qualified or licensed to do business as a
foreign corporation and in good standing in each jurisdiction
where such qualification or licensing is necessary, except
where the failure to be so qualified or licensed or in good
standing would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse
Effect. As used in this Agreement, “
Company Material
Adverse Change ” or “ C
ompany Material
Adverse Effect ” means any effect, change,
development, event or circumstance that, considered together
with all other effects, changes, developments, events or
circumstances, is or would reasonably be expected to be or to
become materially adverse to, or has or would reasonably be
expected to have a material adverse effect on, (i) the
business, results of operation, financial condition
or prospects of the Company, or (ii) the ability of the
Company to consummate the Transactions or to perform any of
its obligations under this Agreement; provided, however, that,
in the case of clause (i) only, none of the following shall be
deemed to be, and shall not be taken into account in
determining whether there has been, a Company Material Adverse
Effect or Company Material Adverse Change: facts,
circumstances, events, changes, effects or occurrences (1)
generally affecting the economy or the financial, debt, credit
or securities markets in the United States, including as
a result of changes in geopolitical conditions,
(2) generally affecting the medical device industry, (3)
resulting from any actions required under this Agreement to
obtain any approval or authorization under applicable
antitrust or competition laws for the consummation of the
Offer or the Merger, (4) resulting from changes in GAAP or
authoritative interpretations thereof, (5) resulting from any
outbreak or escalation of hostilities or war or any act of
terrorism, (6) resulting from any decrease in the market price
of the Shares (it being understood that the exception in this
clause (6) is strictly limited to any such decrease in and of
itself and shall not prevent or otherwise affect a
determination that any effect, event, development or change
underlying such decrease has resulted in or contributed to a
Company Material Adverse Effect or Company Material Adverse
Change) or (7) resulting from any failure by the Company to
meet any published analyst estimates or expectations of the
Company’s revenue, earnings or other financial
performance or results of operations for any period, ending on
or after the date of this Agreement (it being understood that
the exception in this clause (7) is strictly limited to any
such failure in and of itself and shall not prevent or
otherwise affect a determination that any effect, event,
development or change underlying such failure has resulted in
or contributed to a Company Material Adverse Effect or Company
Material Adverse Change), except, in the case of clauses (1),
(2), (4) and (5), to the extent such change, effect, event or
occurrence has a materially disproportionate effect on the
Company compared with other companies operating in the
industries in which the Company operates. The
Company has heretofore delivered to Parent complete and
correct copies of the Certificate of Incorporation and Bylaws
of the Company as presently in effect.
Section
3.2 Subsidiaries and
Affiliates . The Company does not (i)
have any Subsidiaries or (ii) own, directly or indirectly, any
capital stock or other equity securities of any Person or have
any direct or indirect equity or ownership interest in any
business. As used in this Agreement: the term
“ Subsidiary
” means with respect to any party, any corporation,
partnership, limited liability company or other organization
or entity, whether incorporated or unincorporated, of which
(i) at least a majority of the securities or other interests
having by their terms ordinary voting power to elect a
majority of the board of directors or others performing
similar functions with respect to such organization is
directly or indirectly owned or controlled by such party or by
any one or more of its Subsidiaries, or by such party and one
or more of its Subsidiaries or (ii) such party or any other
Subsidiary of such party is a general partner (excluding any
such partnership where such party or any Subsidiary of such
party does not have a majority of the voting interest in such
partnership); and the term “ Person
” means a natural person, partnership, corporation,
limited liability company, business trust, joint stock
company, trust, unincorporated association, joint venture,
Governmental Entity or other entity or
organization.
Section
3.3 Capitaliz
ation
.
(a) The authorized capital stock of the
Company consists of (i) 48,000,000 shares of common
stock, par value $0.001 per share, and (ii) 1,817,795 shares
of undesignated preferred stock. As of the date of
this Agreement, (i) 34,203,446 Shares are issued and
outstanding, (ii) no shares of preferred stock are issued an
outstanding, (iii) no Shares are issued and held in the
treasury of the Company, (iv) a total of 2,101,510 Shares are
reserved for issuance upon the exercise of outstanding Options
at a weighted average exercise price of $23.13 per Share, (v)
a total of 803,512 Shares subject to Options are vested and
exercisable as of the date of this Agreement at a weighted
average exercise price of $11.76 per Share, (vi) a total of
691,139 Shares are available for future grant under the Option
Plans, (vii) 1,297,998 unvested Shares are issued and
outstanding and (viii) a total of 341,454 Shares are subject
to Restricted Stock Unit awards. All of the
outstanding shares of the Company’s common stock are,
and all shares that may be issued pursuant to the exercise of
outstanding Options will be, duly authorized, validly issued,
fully paid and non-assessable. There is no
outstanding indebtedness for borrowed money of the
Company. There is no indebtedness having general
voting rights (or convertible into securities having such
rights) (“ Voting
Debt ”) of the Company issued and
outstanding. Except as disclosed in this
Section
3.3 , (i) there are no existing options, warrants,
calls, pre-emptive rights, subscriptions or other rights,
restricted stock awards, restricted stock unit awards,
agreements, arrangements, understandings or commitments of any
kind relating to the issued or unissued capital stock of, or
other equity interests in, the Company obligating the Company
to issue, transfer, register or sell or cause to be issued,
transferred, registered or sold any shares of capital stock or
Voting Debt of, or other equity interest in, the Company or
securities convertible into or exchangeable for such shares or
equity interests or other securities, or obligating the
Company to grant, extend or enter into any such option,
warrant, call, subscription or other right, restricted stock
award, restricted stock unit award,
agreement, arrangement, understanding or commitment and
(ii) there are no outstanding agreements, arrangements,
understandings or commitments of the Company to repurchase,
redeem or otherwise acquire any Shares or the capital stock of
the Company or any capital stock or other equity interests in
any Person or to provide funds to make any investment (in the
form of a loan, capital contribution or otherwise) in any
Person. There are no outstanding or authorized
stock appreciation, phantom stock, profit participation or
other similar rights with respect to the
Company. Since March 31, 2008, the Company has not
granted or issued any Options, Restricted Stock or Restricted
Stock Unit awards or any other awards under any of the Option
Plans.
(b) All
of the Options have been granted solely to individuals who, as
of the date of grant, were employees, consultants (who are
individuals) or directors of the Company. All
Options granted under the Option Plans have been granted
pursuant to option award agreements substantially in the form
attached as an exhibit to Section
3.3(b) (i) of
the Company Disclosure Schedule. The per Share
exercise price of each Option is not (and is not deemed to be)
less than the fair market value of a Share as of the date of
grant of such Option. All grants of Options were
validly issued and properly approved by the Company Board of
Directors (or a duly authorized committee or subcommittee
thereof) in compliance with all applicable Laws and recorded
on the Financial Statements in accordance with GAAP. All
Restricted Stock awards granted under the Option Plans have
been granted pursuant to restricted stock award agreement(s)
substantially in the form attached as an exhibit to
Section
3.3(b) (ii) of
the Company Disclosure Schedule. All Restricted
Stock Unit awards granted under the Option Plans have been
granted pursuant to restricted stock unit award agreement(s)
substantially in the form attached as an exhibit to
Section
3.3(b) (iii) of
the Company Disclosure Schedule.
(c) There
are no stockholder agreements, voting trusts or other
agreements or understandings to which the Company is a party
relating to the voting or disposition of any shares of the
capital stock of the Company, or granting to any person or
group of persons the right to elect, or to designate or
nominate for election, a director to the board of directors of
the Company.
(d) All
dividends or distributions on securities of the Company that
have been declared or authorized have been paid in
full.
Section
3.4 Authorization;
Validity of Agreement; Company Action
. The Company has all necessary corporate
power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the
transactions provided for or contemplated by this Agreement,
including, but not limited to, the Offer and the Merger
(collectively, the “ Transactions
”). The execution, delivery and performance
by the Company of this Agreement, and the consummation by it
of the Transactions, have been duly and validly authorized by
the Company Board of Directors, and no other corporate
proceeding on the part of the Company is necessary to
authorize the execution, delivery and performance by the
Company of this Agreement and the consummation by it of the
Transactions other than, with respect to the Merger, the
adoption of this Agreement by holders of a majority of the
outstanding Shares if required by applicable
Law. This Agreement has been duly and validly
executed and delivered by the Company and, assuming due and
valid authorization, execution and delivery of this Agreement
by Parent and the Purchaser, is a valid and binding obligation
of the Company enforceable against the Company in accordance
with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar Laws relating to
creditors’ rights generally and to general principles of
equity.
Section
3.5 Board
Approvals .
The Company Board of Directors, at a meeting
duly called and held, has unanimously (i) determined that each
of the Agreement, the Offer and the Merger are advisable and
fair to and in the best interests of the stockholders of the
Company, (ii) duly and validly approved, adopted and declared
advisable this Agreement and the Transactions and taken all
other corporate action required to be taken by the Company
Board of Directors to authorize the consummation of the
Transactions, and (iii) resolved, subject to Section
5.2(e) , to recommend that the Company Stockholders
accept the Offer, tender their Shares to the Purchaser
pursuant to the Offer, and adopt this Agreement, and none of
the aforesaid actions by the Company Board of Directors has
been amended, rescinded or modified. Subject to the accuracy
of the representation set forth in Section
4.6(b) of this Agreement, the action taken by the
Company Board of Directors constitutes approval of the
Transactions (including each of the Offer and the Merger) by
the Company Board of Directors under Section 203 of the DGCL,
and no other state takeover statute or similar statute or
regulation in any jurisdiction in which the Company does
business is applicable to the Transactions (including each of
the Offer and the Merger).
Section
3.6 Required
Vote . Subject to the accuracy of the
representation set forth in Section
4.6(b) of this Agreement and subject also to
Section
1.11 of this Agreement, the affirmative vote of the
holders of a majority of the outstanding Shares (the “
Company
Stockholder Approval ”) is the only vote of the
holders of any class or series of the Company’s capital
stock necessary to adopt this Agreement.
Section
3.7 Consents and
Approvals; No Violations .
None of the execution, delivery or performance of
this Agreement by the Company, the consummation by the Company
of the Transactions or compliance by the Company with any of
the provisions of this Agreement will (i) conflict with or
result in any breach of any provision of the Certificate of
Incorporation or Bylaws of the Company, (ii) require any
filing by the Company with, or permit, authorization,
consent or approval of, any court, arbitral tribunal,
administrative agency or commission or other governmental or
other regulatory authority or agency, whether local, state,
federal or foreign (a “ Governmental
Entity ”), except for (A) compliance with any
applicable requirements of the Exchange Act, (B) any filings
as may be required under the DGCL in connection with the
Merger, (C) the filing with the SEC and NASDAQ of (1) the
Schedule 14D-9 and (2) a Proxy Statement if the Company
Stockholder Approval is required by Law and (D) any filings in
connection with the applicable requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the “ HSR Act
”), (iii) result in a violation or breach of or the loss
of any benefit under, or constitute (with or without due
notice or lapse of time or both) a default (or give rise to
any right of termination, amendment, cancellation or
acceleration) under, or result in the creation of any
Encumbrance on the assets and properties of the Company under,
any of the terms, conditions or provisions of any note, bond,
mortgage, lien, indenture, lease, license, contract,
agreement, arrangement or understanding or other instrument or
obligation (each, a “ Contract
”) to which the Company is a party or by which the
Company or any of its properties or assets may be bound or
(iv) assuming that all consents, approvals, authorizations and
other actions described in subsection (ii) have been obtained
and all filings and obligations in subsection (ii) have been
made or complied with, conflict with or violate any Law
applicable to the Company or any of its properties or assets,
except in the case of clauses (ii) through (iv) where (x) any
failure to obtain such permits, authorizations, consents or
approvals, (y) any failure to make such filings, or (z) any
such violations, breaches, defaults or Encumbrances would not,
individually or in the aggregate, reasonably be expected to
have a Company Material Adverse Effect.
Section
3.8 Company SEC
Documents and Financial Statements.
(a) Since
January 1, 2005, the Company has timely filed with the SEC all
forms, reports, schedules, statements, exhibits and other
documents (including all exhibits and other information
incorporated therein and amendments and supplements thereto)
required by it to be filed under the Exchange Act or the
Securities Act (collectively, the “ Company SEC
Documents ”). As of its filing date
or, if amended prior to the date of this Agreement, as of the
date of the last such amendment, each Company SEC Document
complied in all material respects with the applicable
requirements of the Exchange Act and the Securities Act, as
the case may be. As of its filing date or, if
amended prior to the date of this Agreement, as of the date of
the last such amendment, each Company SEC Document filed
pursuant to the Exchange Act did not contain any untrue
statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to
make the statements made therein, in light of the
circumstances under which they were made, not
misleading. Each Company SEC Document that is a
registration statement, as amended or supplemented, if
applicable, filed pursuant to the Securities Act, as of the
date such registration statement or amendment became effective
prior to the date of this Agreement, did not contain any
untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in
order to make the statements made in light of the
circumstances under which they were made, not
misleading. As of the dates on which they were
filed or amended in the Company SEC Documents filed prior to
the date of this Agreement, the audited financial
statements and unaudited interim financial statements of the
Company included in such Company SEC Documents (collectively,
the “ Financial
Statements ”) (i) complied in all material
respects with the applicable accounting requirements and with
the published rules and regulations of the SEC with respect
thereto, (ii) were prepared in accordance with United States
generally accepted accounting principles (“ GAAP
”) applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto and
except, in the case of the unaudited interim statements, as
may be permitted under Form 10-Q of the Exchange Act) and
(iii) fairly presented in all material respects the financial
position and the results of operations and cash flows
(subject, in the case of unaudited interim financial
statements, to normal and recurring year-end adjustments) of
the Company as of the times and for the periods referred to
therein.
(b) The
Company has heretofore furnished to Parent complete and
correct copies of all comment letters from the SEC since
January 1, 2005 through the date of this Agreement with
respect to any of the Company SEC Documents. As of
the date of this Agreement, there are no outstanding or
unresolved comments in comment letters received from the SEC
staff with respect to any of the Company SEC
Documents.
(c) The
Company is in compliance in all material respects with the
applicable provisions of the Sarbanes-Oxley Act and the
applicable listing and governance rules and regulations of
NASDAQ.
(d) The
Company maintains a system of internal control over financial
reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the
Exchange Act) that is reasonably designed to ensure (i) that
the Company maintains records that in reasonable detail
accurately and fairly reflect its transactions and
dispositions of assets, (ii) that transactions are recorded as
necessary to permit preparation of financial statements in
conformity with GAAP, (iii) that receipts and expenditures are
executed only in accordance with authorizations of management
and the Board of Directors and (iv) the prevention or timely
detection of the unauthorized acquisition, use or disposition
of the Company’s assets that would have a material
effect on the Company’s consolidated financial
statements. The Company has evaluated the effectiveness of the
Company’s internal control over financial reporting and,
to the extent required by applicable Law, presented in any
applicable Company SEC Document that is a report on Form 10-K
or Form 10-Q or any amendment thereto its conclusions about
the effectiveness of the internal control over financial
reporting as of the end of the period covered by such report
or amendment based on such evaluation. The Company has
disclosed, based on the most recent evaluation of internal
control over financial reporting, to the Company’s
auditors and the audit committee of the Board of Directors
(and made available to Parent a summary of the significant
aspects of such disclosure) (A) all significant deficiencies
and material weaknesses in the design or operation of internal
control over financial reporting that are reasonably likely to
adversely affect 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 control over financial
reporting. The Company has not identified any
material weaknesses in the design or operation of the
Company’s internal control over financial
reporting.
(e) The
Company’s “disclosure controls and
procedures” (as defined in Rules 13a-15(e) and 15d-15(e)
of the Exchange Act) are reasonably designed to ensure that
all information (both financial and non-financial) 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 rules and forms of the SEC, and that all such information
is accumulated and communicated to the Company’s
management as appropriate to allow timely decisions regarding
required disclosure and to make the certifications of the
chief executive officer and chief financial officer of the
Company required under the Exchange Act with respect to such
reports.
(f) As
of the date of this Agreement, the Company has not received
written notice of any SEC inquiries or investigations or
other governmental inquiries or investigations (pending or
threatened) in each case regarding any accounting practices of
the Company or any malfeasance by any director or executive
officer of the Company. Since January 1, 2005 the
Company has not conducted any internal investigations
regarding accounting or revenue recognition discussed with,
reviewed by or initiated at the direction of the chief
executive officer, chief financial officer, general counsel or
similar legal officer, the Board or any committee
thereof.
(g) 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 and Sections 302 and 906 of the
Sarbanes-Oxley Act with respect to the Company SEC Documents,
and the statements contained in such certifications are true
and accurate. For purposes of this Agreement,
“principal executive officer” and “principal
financial officer” shall have the meanings given to such
terms in the Sarbanes-Oxley Act.
(h) The
Company is not a party to, nor does it have any commitment to
become a party to, any joint venture, off-balance sheet
partnership or any similar contract (including any contract or
arrangement relating to any transaction or relationship
between or among the Company, 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 effect of such
contract is to avoid disclosure of any material transaction
involving, or material liabilities of, the Company in the
Company’s published financial statements or other
Company SEC Documents.
Section
3.9 Absence of
Certain Changes . Except as specifically
contemplated by this Agreement, from December 31, 2007 through
the date of this Agreement, (a) the Company has conducted its
business only in the ordinary course of business consistent
with past practice, (b) the Company has not (i) suffered any
Company Material Adverse Change or (ii) become aware of any
facts or circumstances that would, individually or in the
aggregate, reasonably be expected to cause the Company to
suffer any Company Material Adverse Change, and (c) the
Company has not taken any action that, if taken after the date
of this Agreement, would constitute a breach of any of the
covenants set forth in Section
5.1 .
Section
3.10 No Undisclosed
Liabilities .
Except for liabilities and obligations (i)
incurred in the ordinary course of business consistent with
past practice since December 31, 2007, (ii) that have been
discharged or paid in full in the ordinary course of business
consistent with past practice since December 31, 2007, (iii)
reflected in or reserved against on the most recent balance
sheet of the Company prepared in accordance with GAAP and
included in the Company SEC Documents filed with the SEC prior
to the date of this Agreement, (iv) that arise under this
Agreement or (v) that have not had and would not, individually
or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect, the Company has not incurred any
liabilities or obligations of any nature, whether or not
accrued, contingent, absolute or otherwise and whether or not
required to be reflected in the Financial Statements in
accordance with GAAP.
Section
3.11 Litigation;
Orders .
There is no suit, claim, action, charge,
proceeding, including, without limitation, arbitration
proceeding or alternative dispute resolution proceeding, or
investigation pending or, to the knowledge of the Company,
threatened against the Company or its businesses, assets or
properties, or its officers, directors or employees, in their
capacity as such, that would, individually or in the
aggregate, reasonably be expected to (i) have a Company
Material Adverse Effect or (ii) materially delay the
consummation of the Transactions; and the Company does not
know of any valid basis for any such suit, claim, action,
charge or proceeding. No Order of any Governmental Entity is
outstanding against the Company or any of its properties or
assets that would, individually or in the aggregate,
reasonably be expected to (i) have a Company Material Adverse
Effect or (ii) materially delay the consummation of the
Transactions. Since January 1, 2005, there have not
been any material product liability, manufacturing or design
defect, warranty, field repair or other material
product-related claims by any third party against the Company
(whether based on contract or tort and whether relating to
personal injury, including death, property damage or economic
loss) arising from (A) services rendered by the Company or (B)
the sale, distribution or manufacturing of products, including
medical products and devices, by the Company.
Section
3.12 Employee Benefit
Plans; ERISA .
(a) Except
as expressly contemplated by this Agreement, there exists no
employment, consulting, retention, change in control,
severance or termination agreement, arrangement or
understanding between the Company and any individual current
or former employee, officer or director of the Company with
respect to which the annual cash, noncontingent payments
thereunder exceed $100,000.
(b)
Section
3.12(b) of the Company Disclosure Schedule contains a
correct and complete list of all (i) “employee pension
benefit plans” (as defined in Section 3(2) of the
Employee Retirement Income Security Act of 1974, as amended
(“ ERISA
”)) (sometimes referred to herein as “ Pension
Plans ”), including any such Pension Plans that
are “multiemployer plans” (as such term is defined
in Section 4001(a)(3) of ERISA) (collectively, the “
Multiemployer
Pension Plans ”), (ii) material “employee
welfare benefit plans” (as defined in Section 3(1) of
ERISA), and (iii) all other material benefit plans, policies,
programs, agreements or arrangements, including but not
limited to, any material bonus, deferred compensation,
severance pay, retention, change in control, employment,
consulting, pension, profit-sharing, retirement, insurance,
stock purchase, stock option, incentive or equity compensation
or other fringe benefit plan, program, policy, agreement,
arrangement or practice maintained, contributed to or required
to be contributed to, by the Company or any trade or business,
whether or not incorporated, that, together with the Company
would be deemed a “single employer” within the
meaning of Section 4001(b) of ERISA or Section 414 of the Code
(each, an “ ERISA
Affiliate ”), for the benefit of any current or
former employees, officers, consultants or directors of the
Company, or with respect to which the Company would reasonably
have any material liability (collectively, the “
Benefit
Plans ”). The Company has delivered or made
available to Parent and Purchaser correct and complete copies
of (i) each Benefit Plan (including all amendments thereto) or
written description of each Benefit Plan that is not otherwise
in writing, (ii) the most recent annual report on Form 5500
and all schedules thereto filed with respect to each Benefit
Plan, to the extent applicable, (iii) the most recent summary
plan description, summary of material modifications and plan
prospectus for each Benefit Plan, to the extent applicable,
(iv) each current trust agreement, insurance contract or
policy, group annuity contract and any other funding
arrangement relating to any Benefit Plan, to the extent
applicable, (v) the most recent actuarial report, financial
statement or valuation report, to the extent applicable and
(vi) a current Internal Revenue Service favorable
determination letter (or, for any prototype plan, favorable
opinion letter), to the extent applicable.
(c) Each
Benefit Plan is and has at all times been operated and
administered in all material respects in accordance with its
terms and in compliance with applicable Law, including but not
limited to ERISA and the Code. Each Benefit Plan
has been administered in good faith compliance with Section
409A of the Code to the extent applicable.
(d) Each
Pension Plan intended to be “qualified” within the
meaning of section 401(a) of the Code is the subject of a
favorable determination or opinion letter from the Internal
Revenue Service as to such Pension Plan’s tax-qualified
status under section 401(a) of the Code and as to the
tax-exempt status of such Pension Plan’s related trust
under section 501(a) of the Code, and, to the knowledge of the
Company, no condition exists that would reasonably be expected
to materially adversely affect such
qualification.
(e) None
of the Benefit Plans is, and the Company has never maintained
or had an obligation to contribute to (i) a “single
employer plan” (as such term is defined in Section
4001(a)(15) of ERISA) subject to Section 412 of the Code or
Title IV of ERISA, (ii) a “multiple employer plan”
or “multiple employer welfare arrangement” (as
such terms are defined in ERISA) or (iii) a funded welfare
benefit plan (as such term is defined in Section 419 of the
Code). There are no unpaid contributions due prior to
the date of this Agreement with respect to any Benefit Plan
that are required to have been made under the terms of such
Benefit Plan, any related insurance contract or any applicable
Law and all contributions due have been timely
made.
(f)
Neither the Company nor any ERISA Affiliate has
engaged in a “prohibited transaction” (as such
term is defined in Section 406 of ERISA and Section 4975 of
the Code) or any other breach of fiduciary responsibility with
respect to any Benefit Plan that reasonably would be expected
to subject the Company to any material tax or
penalty.
(g) With
respect to any Benefit Plan: (i) no filing, application or
other matter is pending with the Internal Revenue Service, the
United States Department of Labor or any other Governmental
Entity, and (ii) there is no action, suit, audit,
investigation or claim pending, or to the Company’s
knowledge, threatened or anticipated, other than routine
claims for benefits. There is no contract or
arrangement, plan or agreement by or with the Company covering
any person that, individually or collectively, would give rise
to the payment of any amount by the Company that would not be
deductible by the Company by reason of Section 280G or Section
162(m) of the Code.
(h) The
Company has no obligations to provide any health benefits or
other non-pension benefits (whether or not insured) to retired
or other former employees, directors or consultants, except as
specifically required by Part 6 of Title I of ERISA (“
COBRA
”).
(i) Except
as provided by this Agreement, neither the execution and
delivery of this Agreement nor the consummation of the
transactions contemplated hereby, or any termination of
employment or service (or other event or occurrence) in
connection therewith will (i) entitle any current or former
employee, director or consultant of the Company to any payment
or benefit (or result in the funding of any such payment or
benefit) or result in any forgiveness of indebtedness with
respect to any such persons other than benefits arising under
applicable law, (ii) increase the amount of any compensation,
equity award or other benefits otherwise payable by the
Company or (iii) result in the acceleration of the time of
payment, funding or vesting of any compensation, equity award
or other benefits except as required under Section
411(d)(3) of the Code.
(j)
Neither the Company nor any of its ERISA
Affiliates has used the services of workers provided by third
party contract labor suppliers, temporary employees,
“leased employees” (as that term is defined in
Section 414(n) of the Code), or individuals who have provided
services as independent contractors to an extent that would
reasonably be expected to result in the disqualification of
any of the Benefit Plans or the imposition of penalties or
excise taxes with respect to the Plans by the Internal Revenue
Service, the Department of Labor, or the Pension Benefit
Guaranty Corporation.
(k) The
Company has not made any contributions to any Benefit Plan in
the form of Shares.
(l) The
Company represents and warrants that it intends that certain
payments that have been made or are to be made and certain
benefits that have been granted or are to be granted according
to employment compensation, severance and other employee
benefit plans of the Company, including the Benefit Plans
(collectively, the “ Arrangements
”) to certain holders of Company common stock and other
securities of the Company (the “ Covered
Securityholders ”) and all such amounts payable
under the Arrangements (i) are being paid or granted as
compensation for past services performed, future services to
be performed, or future services to be refrained from
performing, by the Covered Securityholders (and matters
incidental thereto) and (ii) are not calculated based on the
number of Shares tendered or to be tendered into the Offer by
the applicable Covered Securityholder. The Company also
represents and warrants that (i) the adoption, approval,
amendment or modification of each Arrangement since the
discussions relating to the transactions contemplated hereby
between the Company and Parent began has been approved as an
employment compensation, severance or other employee benefit
arrangement solely by independent directors of the Company in
accordance with the requirements of Rule 14d-10(d)(2) under
the Exchange Act and the instructions thereto and (ii) the
“safe harbor” provided pursuant to Rule
14d-10(d)(2) is otherwise applicable thereto as a result of
the taking prior to the execution of this Agreement of all
necessary actions by the Company Board of Directors, the
Compensation Committee of the Company Board of Directors or
its independent directors. A true and complete copy of
any resolutions of any committee of the Company Board of
Directors reflecting any approvals and actions referred to in
the preceding sentence and taken prior to the date of this
Agreement has been provided to Parent prior to the execution
of this Agreement.
Section
3.13 Taxes
.
(a) (i)
the Company has duly and timely filed, or will duly and timely
file, all Tax Returns required to be filed by it that are due
on or before the Closing Date, and each such Tax Return has
been, or will be, prepared in compliance with all applicable
Laws and is true, correct and complete in all material
respects; (ii) the Company has paid or will pay all Taxes
shown as due on such returns and all other Taxes due and
payable prior to the Closing Date (whether or not shown as due
on any Tax Return) except such Taxes as are currently being
contested in good faith and for which adequate reserves, as
applicable, have been established in the Company’s
Financial Statements in accordance with GAAP; (iii) the
Financial Statements reflect an adequate reserve for all Taxes
payable by the Company for all taxable periods and portions
thereof through the date of such Financial Statements; and
(iv) the Company has not incurred any liability for Taxes
subsequent to the date of such most recent Financial
Statements other than in the ordinary course of
business.
(b) (i)
no Tax Return of the Company is or has since January 1, 2003
been under audit or examination by any Taxing Authority, no
notice of such an audit or examination or any other audit or
examination with respect to Taxes has been received by the
Company; (ii) no deficiencies for Taxes have been claimed,
proposed, assessed or threatened against the Company in
writing by any Taxing Authority for which adequate reserves
have not been established in the Company’s Financial
Statements in accordance with GAAP; (iii) there are no
lie