Exhibit 2.1
AGREEMENT AND PLAN OF
MERGER
AMONG
ST. JUDE MEDICAL,
INC.
DRAGONFLY MERGER
CORP.,
AND
ENDOCARDIAL SOLUTIONS,
INC.
Dated as of September 23,
2004
TABLE OF
CONTENTS
AGREEMENT AND PLAN OF
MERGER
i
ii
iii
LIST OF
EXHIBITS
|
Exhibit A – Certificate of
Merger
|
Section 1.2
|
|
|
|
|
Exhibit B – Certificate of
Incorporation of the Surviving Corporation
|
Section 1.4
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iv
AGREEMENT AND PLAN OF
MERGER
This AGREEMENT AND PLAN OF MERGER,
dated as of September 23, 2004 (this “ Agreement
”), is among St. Jude Medical, Inc., a Minnesota corporation
(“ Buyer ”), Dragon Merger Corp., a Delaware
corporation and a wholly-owned subsidiary of Buyer (“
Sub ”), and Endocardial Solutions, Inc., a Delaware
corporation (the “ Company ”) (Sub and the
Company being hereinafter collectively referred to as the “
Constituent Corporations ”).
A.
The respective Boards of Directors
of Buyer, Sub and the Company have approved and declared advisable
the merger of Sub with and into the Company upon the terms and
subject to the conditions of this Agreement (the “
Merger ”), and the respective Boards of Directors of
Buyer, Sub and the Company have approved and adopted this
Agreement;
B.
The respective Boards of Directors
of Buyer and the Company have determined that the Merger is in the
best interest of their respective stockholders; and
C.
The Company is a corporation
organized under the laws of the state of Delaware and has
authorized 40,000,000 shares of common stock, $0.01 par value per
share (the “ Company Common Stock ”), of which
22,143,300 shares are outstanding and 10,000,000 shares of
preferred stock, $0.01 par value per share (the “ Company
Preferred Stock ”), of which no shares are outstanding
(the Company Common Stock and the Company Preferred Stock are
collectively referred to as the “ Company Capital
Stock ”).
NOW, THEREFORE, in consideration of
the premises, representations, warranties and agreements herein
contained, the parties agree as follows:
Section 1.1
The Merger
. Upon the terms and subject to the
conditions hereof, and in accordance with the Delaware General
Corporation Law (the “ DGCL ”), Sub shall be
merged with and into the Company at the Effective Time (as defined
in Section 1.2). Following the Merger, the separate
corporate existence of Sub shall cease and the Company shall
continue as the surviving corporation (the “ Surviving
Corporation ”) and shall succeed to and assume all the
rights and obligations of Sub in accordance with the
DGCL.
Section 1.2
Effective Time
. Subject to the terms and conditions set
forth in this Agreement, on the Closing Date: (a) the Certificate
of Merger (the “ Certificate of Merger ”)
substantially in the form of Exhibit A shall be duly
executed by the Company and Sub and thereafter filed with the
Secretary of State of the State of Delaware, and (b) the parties
shall make such other filings with the Secretary of State of the
State of Delaware as shall be necessary to effect the Merger.
The Merger shall become effective at such time as a properly
executed Certificate of Merger is duly filed
with the Secretary of State of the
State of Delaware, or such later time as Buyer and the Company may
agree upon and as may be set forth in the Certificate of
Merger. The time the Merger becomes effective is referred to
herein as the “ Effective Time ”.
Section 1.3
Effects of the
Merger . The Merger shall have the effects set
forth in this Agreement and Section 259 of the DGCL.
Without limiting the generality of the foregoing and subject
thereto, at the Effective Time, all properties, rights privileges,
powers and franchises of the Company and Sub shall vest in the
Surviving Corporation, and all debts, liabilities and duties of the
Company and Sub shall become the debts, liabilities and duties of
the Surviving Corporation.
Section 1.4
Certificate of Incorporation
and By-laws; Directors and Officers . (a) The Certificate of Incorporation
of the Surviving Corporation in effect at the Effective Time will
be amended in its entirety at the Effective Time to read as set
forth in Exhibit B hereto and shall be the Certificate
of Incorporation of the Surviving Corporation until thereafter
changed or amended as provided therein or by Applicable Law.
The By-laws of Sub in effect at the Effective Time will be the
By-laws of the Surviving Corporation until thereafter changed or
amended as provided therein or by Applicable Law.
(b)
The directors of Sub at the
Effective Time shall automatically, and without further action, be
the directors of the Surviving Corporation, until the earlier of
their resignation or removal or until their respective successors
are duly elected and qualified, as the case may be. The
officers of the Sub at the Effective Time shall be the officers of
the Surviving Corporation, until the earlier of their resignation
or removal or until their respective successors are duly elected
and qualified, as the case may be.
Section 1.5
Conversion of
Securities . As of the Effective Time, by virtue of the
Merger and without any action on the part of Sub, the Company or
the holders of any capital stock of the Constituent
Corporations:
(a)
Each issued and outstanding share of
common stock, par value $.01 per share, of Sub shall be converted
into one validly issued, fully paid and nonassessable share of
common stock of the Surviving Corporation and shall constitute the
only shares of capital stock of the Surviving Corporation
outstanding immediately after the Effective Time.
(b)
All shares of Company Capital Stock
that are held in the treasury of the Company and any shares of
Company Capital Stock owned by Buyer or Sub or any other Subsidiary
of Buyer, direct or indirect, shall automatically be canceled and
retired and shall cease to exist and no capital stock of Buyer or
other consideration shall be delivered in exchange
therefor.
(c)
At the Effective Time, each then
issued and outstanding share of Company Common Stock (other than
Dissenting Shares and shares described in Section 1.5(b))
shall immediately cease to be outstanding, shall automatically
be
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cancelled and retired, shall cease
to exist, and shall be converted into the right to receive $11.75
(the “ Per Share Price ”) to be distributed in
accordance with this Section 1.5(c), 1.6, and 1.7. At
the Effective Time, each holder of Company Capital Stock shall
cease to have any rights with respect to such issued and
outstanding shares (other than Dissenting Shares) of Company
Capital Stock (including, without limitation, the right to vote),
except for the right to receive the Per Share Price. Unless
the context otherwise requires, each reference in this Agreement to
shares of Company Common Stock shall include the associated Company
Rights. Notwithstanding the foregoing, if, between the date
of this Agreement and the Effective Time, the outstanding shares of
Company Common Stock shall have been changed into a different
number of shares or a different class by reason of any stock
dividend, subdivision, reclassification, recapitalization, split,
combination or exchange of shares, then the Per Share Price shall
be correspondingly adjusted to reflect such stock dividend,
subdivision, reclassification, recapitalization, split, combination
or exchange of shares.
(d)
All outstanding options exercisable
into shares of Company Common Stock, but unexercised immediately
prior to the Effective Time will be treated as set forth in
Section 5.5 hereof.
Section 1.6
Payment of Per Share
Price . (a) Buyer shall appoint Wells Fargo Bank,
N.A., or other commercial bank or trust company as a paying agent
(the “ Paying Agent ”) for the benefit of the
holders of Company Common Stock that are not Dissenting Shares and
who are entitled to receive the Per Share Price (collectively, the
“ Holders ”). At or immediately prior to
the Effective Time, Buyer shall make available to the Paying Agent
an amount of cash sufficient to permit payment of the Per Share
Price to the Holders (the “ Exchange Fund
”). The Paying Agent shall exchange the shares of
Company Common Stock for the Per Share Price in accordance with the
terms of this Article I, through such reasonable procedures as
the Paying Agent or Buyer may adopt.
(b)
As soon as practicable after the
Effective Time, Buyer or the Paying Agent shall cause to be mailed
to each record holder of a certificate or certificates that
immediately prior to the Effective Time represented Company Common
Stock converted in the Merger (the “ Certificates
”) 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 actual delivery of the Certificates to the
Paying Agent, and shall contain instructions for use in effecting
the surrender of the Certificates and payment of the Per Share
Price). Upon surrender for cancellation to the Paying Agent
of a Certificate held by any Holder, together with such letter of
transmittal, duly executed, the Holder of such Certificate shall be
entitled to receive in exchange therefor that amount of cash equal
to the Per Share Price for each share of Company Common Stock
represented by the Certificate. Any Certificate so
surrendered shall forthwith be canceled.
(c)
Notwithstanding the foregoing, no
amounts shall be payable at the Effective Time with respect to any
Dissenting Shares or any shares of Company Capital Stock with
respect to which dissenters’ rights have not
terminated. In the case of Dissenting Shares, payment shall
be made in accordance with Section 1.12
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and the DGCL. In the case of
any shares of Company Capital Stock with respect to which
dissenters’ rights have not terminated as of the Effective
Time, if such shares of Company Capital Stock become Dissenting
Shares, payment shall be made in accordance with Section 1.12
and the DGCL, and if, instead, the dissenters’ rights with
respect to such shares irrevocably terminate after the Effective
Time, such shares of Company Capital Stock shall be entitled to
receive the Per Share Price in accordance with the provisions of
this Section 1.6.
(d)
Any portion of the Exchange Fund
that remains undistributed to the former Holders for six months
after the Effective Time shall be delivered to Buyer, upon demand
of Buyer, and any former Holders who have not theretofore complied
with this Article I shall thereafter look only to Buyer for
payment of the Per Share Price. Neither Buyer nor the
Surviving Corporation shall be liable to any holder of Shares for
cash delivered to a public official in connection herewith pursuant
to any applicable abandoned property, escheat or similar
law.
Section 1.7
Transfer Taxes;
Withholding . If any cash is to be paid to or issued in a name
other than that in which the Certificate surrendered in exchange
therefor is registered, it shall be a condition of such exchange
that the Certificate so surrendered shall be properly endorsed and
otherwise in proper form for transfer and that the Person
requesting such exchange shall pay to the Buyer or the Paying Agent
any transfer or other taxes required by reason of the payment of
cash in a name other than that of the registered holder of the
Certificate surrendered, or shall establish to the satisfaction of
the Buyer or the Paying Agent that such tax has been paid or is not
applicable. Buyer or the Paying Agent shall be entitled to
deduct and withhold from the consideration otherwise payable
pursuant to this Agreement to any holder of shares of Company
Capital Stock such amounts as Buyer or the Paying Agent is required
to deduct and withhold with respect to the making of such payment
under the Code or under any provision of state, local or foreign
tax law. To the extent that amounts are so withheld by Buyer
or the Paying Agent, such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the holder of the
shares of Company Capital Stock in respect of which such deduction
and withholding was made by Buyer or the Paying Agent and
transmitted by Buyer or the Paying Agent to the appropriate taxing
authority with attribution to each specific Holder.
Section 1.8
No Further Ownership Rights in
Company Common Stock . All amounts paid to Holders upon the surrender
for exchange of Certificates in accordance with the terms hereof
shall be deemed to have been paid in full satisfaction of all
rights pertaining to the shares of Company Capital Stock
represented by such Certificates.
Section 1.9
Closing of Company Transfer Books
. At the Effective Time, the stock transfer books
of the Company shall be closed and no transfer of shares of Company
Capital Stock shall thereafter be made on the records of the
Company. If, after the Effective Time, Certificates are
presented to the Surviving Corporation or the Buyer, such
Certificates shall be canceled and exchanged as provided in this
Article I.
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Section 1.10
Lost
Certificates . If any Certificate shall have been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the
Person claiming such Certificate to be lost, stolen or destroyed
and, if required by Buyer or the Paying Agent, the posting by such
Person of a bond, in such reasonable amount as Buyer may direct as
indemnity against any claim that may be made against them with
respect to such Certificate, Buyer will pay in exchange for such
lost, stolen or destroyed Certificate the amounts to which the
holders thereof are entitled pursuant to
Section 1.5.
Section 1.11
Further
Assurances . If at any time after the Effective Time the
Surviving Corporation shall consider or be advised that any deeds,
bills of sale, assignments or assurances or any other acts or
things are necessary, desirable or proper (a) 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,
privileges, powers, franchises, properties or assets of either of
the Constituent Corporations, or (b) otherwise to carry out the
purposes of this Agreement, the Surviving Corporation and its
proper officers and directors or their designees shall be
authorized to execute and deliver, in the name and on behalf of
either of the Constituent Corporations, all such deeds, bills of
sale, assignments and assurances and to do, in the name and on
behalf of either Constituent Corporation, all such other acts and
things as may be necessary, desirable or proper to vest, perfect or
confirm the Surviving Corporation’s right, title or interest
in, to or under any of the rights, privileges, powers, franchises,
properties or assets of such Constituent Corporation and otherwise
to carry out the purposes of this Agreement.
Section 1.12
Dissenters’
Rights . (a) Shares of Company Capital Stock that
have not been voted for approval of this Agreement or consented
thereto in writing and with respect to which a demand for payment
and appraisal has been properly made in accordance with
Section 262 of the DGCL (“ Dissenting Shares
”) or shares that have not voted in favor of the Merger and
with respect to which dissenters’ rights have not terminated
will not be converted into the right to receive from the Surviving
corporation the Per Share Price otherwise payable with respect to
such shares at or after the Effective Time. If a holder of
Dissenting Shares (a “ Dissenting Stockholder ”)
withdraws his or her demand for such payment and appraisal or such
Dissenting Shares (or such other shares with respect to which
dissenters’ rights have not terminated) become ineligible for
such payment and appraisal, then, as of the Effective Time or the
occurrence of such event of withdrawal or ineligibility, whichever
last occurs, such holder’s Dissenting Shares will cease to be
Dissenting Shares (or, in the case of such other shares, the
dissenters’ rights shall have terminated) and each share of
Company Common Stock will be converted into the right to receive,
and will be exchangeable for, the Per Share Price into which such
Dissenting Shares would have been converted pursuant to
Section 1.5.
(b)
The Company shall give Buyer and Sub
prompt notice of any demand received by the Company from a holder
of Dissenting Shares for appraisal of shares of Company Capital
Stock, and Buyer shall have the right to participate in all
negotiations and proceedings with respect to such demand. The
Company agrees that, except with the prior written consent of Buyer
and Sub, or as required under the DGCL, it will not voluntarily
make any payment with respect to, or settle or offer or agree to
settle,
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any such demand for appraisal.
Each Dissenting Stockholder who, pursuant to the provisions of
Section 262 of the DGCL, becomes entitled to payment of the
value of the Dissenting Shares will receive payment therefor after
the value therefor has been agreed upon or finally determined
pursuant to such provisions, and any Per Share Price that would
have been payable with respect to such Dissenting Shares will be
retained by Buyer.
Section 1.13
Closing
. The closing of the transactions contemplated by
this Agreement (the “ Closing ”) and all actions
specified in this Agreement to occur at the Closing shall take
place at the offices of Buyer, One Lillehei Plaza, St. Paul,
Minnesota no later than the second business day following the day
on which the last of the conditions set forth in Article VI
shall have been fulfilled or waived (if permissible) (the “
Closing Date ”) or at such other time and place as
Buyer and the Company shall agree.
Buyer and Sub represent and warrant
to the Company as follows:
Section 2.1
Organization, Standing and
Power . Each of Buyer and Sub is a corporation duly
organized, validly existing and in good standing under the laws of
its place of incorporation and has the requisite corporate power
and authority to carry on its business as now being
conducted. Each of Buyer and Sub is duly qualified to do
business, and is in good standing, in each jurisdiction where the
character of its properties owned or held under lease or the nature
of its activities makes such qualification necessary.
Section 2.2
Authority
. On or prior to the date of this Agreement, the
respective Boards of Directors of Buyer and Sub have declared the
Merger advisable and have approved and adopted this Agreement in
accordance with the Minnesota Business Corporation Act and the
DGCL, respectively. Each of Buyer and Sub has all requisite
corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by Buyer and Sub and the
consummation by Buyer and Sub of the transactions contemplated
hereby have been duly authorized by all necessary corporate action
(including all Board action) on the part of Buyer and Sub, subject
to the filing of an appropriate Certificate of Merger as required
by the DGCL. This Agreement has been duly executed and
delivered by Buyer and Sub, and (assuming the valid authorization,
execution and delivery of this Agreement by the Company) this
Agreement constitutes the valid and binding obligation of Buyer and
Sub enforceable against each of them in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors’ rights and
to general equity principles.
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Section
2.3
Consents and Approvals; No Violation .
Assuming that all consents,
approvals, authorizations and other actions described in this
Section 2.3 have been obtained and all filings and obligations
described in this Section 2.3 have been made, the execution and
delivery of this Agreement does not, and the consummation of the
transactions contemplated hereby and compliance with the provisions
hereof will not, result in any violation of, or default (with or
without notice or lapse of time, or both) under, or give to others
a right of termination, cancellation or acceleration of any
obligation or result in the loss of a benefit under, or result in
the creation of any Lien upon any of the properties or assets of
Buyer or Sub under, any provision of (a) the Articles of
Incorporation or the By-laws of Buyer, each as amended to date,
(b) the Certificate of Incorporation or the By-laws of Sub,
each as amended to date, (c) any loan or credit agreement, note,
bond, mortgage, indenture, lease or other agreement, instrument,
permit, concession, franchise or license applicable to Buyer or any
of its Subsidiaries, or (d) any judgment, order, decree, statute,
law, ordinance, rule or regulation applicable to Buyer or Sub or
any of their respective properties or assets, other than, in the
case of clauses (c) or (d), any such violations, defaults, rights,
losses, Liens that, individually or in the aggregate, would not
materially impair the ability of Buyer or Sub to perform their
respective obligations hereunder or prevent the consummation of any
of the transactions contemplated hereby or thereby. No filing
or registration with, or authorization, consent or approval of, any
domestic (federal and state), foreign or supranational court,
commission, governmental body, regulatory agency, authority or
tribunal (a “ Governmental Entity ”) is required
by or with respect to Buyer or Sub in connection with the execution
and delivery of this Agreement by Buyer or Sub or is necessary for
the consummation of the Merger and the other transactions
contemplated by this Agreement, except for (i) in connection, or in
compliance, with the provisions of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the “ HSR Act
”), (ii) the filing of the Certificate of Merger with the
Secretary of State of the State of Delaware and appropriate
documents with the relevant authorities of other states in which
the Company is qualified to do business, (iii) such filings and
consents as may be required under any environmental, health or
safety law or regulation pertaining to any notification, disclosure
or required approval triggered by the Merger or by the transactions
contemplated by this Agreement, (iv) such filings, authorizations,
orders and approvals as may be required by state takeover laws (the
“ State Takeover Approvals ”), (v) any of such
items as may be required under foreign laws, and (vi) such other
consents, orders, authorizations, registrations, declarations,
approvals and filings the failure of which to be obtained or made
would not, materially impair the ability of Buyer or Sub to perform
its obligations hereunder or prevent the consummation of any of the
transactions contemplated hereby or thereby.
Section
2.4
Financing .
Buyer and Sub collectively have, and will have at the Effective
Time, sufficient funds to pay the Per Share Price for all
outstanding shares of Company Common Stock pursuant to this
Agreement and to perform Buyer’s and Sub’s obligations
under this Agreement.
Section
2.5
Litigation . There is no suit, claim, action,
proceeding or investigation pending or, to the knowledge of Buyer,
threatened against Buyer or any of its Subsidiaries that, as of the
date hereof, challenges the validity or
7
propriety, or seeks to prevent the
consummation of, the Merger or any other transaction contemplated
by this Agreement.
Section
2.6
Ownership of Sub; No Prior Activities .
Sub is a direct wholly owned
subsidiary of Buyer. Sub has not conducted any activities
other than in connection with the organization of Sub, the
negotiation and execution of this Agreement and the consummation of
the transactions contemplated hereby. Sub has no
Subsidiaries.
Each representation and warranty set
forth below is qualified by any exception or disclosures set forth
in the letter dated the date hereof and delivered on the date
hereof by the Company to Buyer, which relates to this Agreement and
is designated therein as the Company Letter (the “ Company
Letter ”), which exceptions specifically reference the
Sections to be qualified. In all other respects, each
representation and warranty set out in this Article III is not
qualified in any way whatsoever, and is made and given with the
intention of inducing Buyer and Sub to enter into this
Agreement. The Company represents and warrants to Buyer and
Sub as follows:
Section 3.1
Organization, Standing and Power . The Company
is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has the
requisite corporate power and authority to carry on its business as
now being conducted. Each Subsidiary of the Company is a
corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction in which it is organized and has
the requisite corporate power and authority to carry on its
business as now being conducted. The Company and each of its
Subsidiaries are duly qualified to do business, and are in good
standing, in each jurisdiction where the character of their
properties owned or held under lease or the nature of their
activities makes such qualification necessary, except for such
failures to be so qualified that would not, individually or in the
aggregate, have a Material Adverse Effect. The Company has
previously delivered to Buyer accurate and complete copies of its
Certificate of Incorporation (the “ Company Charter
”) and By-laws as currently in full force and effect.
There have been no predecessor entities of the Company.
Section 3.2
Capital Structure . (a) The
authorized capital stock of the Company consists of forty million
shares of Company Common Stock and ten million shares of Company
Preferred Stock. At the close of business on September 23,
2004, (i) 22,143,300 shares of Company Common Stock were issued and
outstanding, all of which were validly issued, fully paid and
nonassessable and free of preemptive rights, (ii) no shares of
Company Preferred Stock were issued and outstanding, (iii) no
shares of Company Common Stock were held in the treasury of the
Company, (iv) 1,242,515 shares of Company Common Stock were
reserved for issuance pursuant to the Company’s 2003 Stock
Incentive Plan (the “ 2003 Plan ”); (v)
2,250,959 shares of Company Common Stock were reserved for issuance
under the Company’s 1993 Long-Term Incentive and Stock Option
Plan (the “ 1993 Plan ”); and (vi) 205,000
shares of
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Company Common Stock were reserved
for issuance under the Company’s Directors’ Stock
Option Plan (the “ Director Plan ”)
(collectively with the 2003 Plan, the 1993 Plan and the Director
Plan, the “ Company Stock Option Plans ”).
No shares of Company Capital Stock are held by any Subsidiary of
the Company.
(b)
Section 3.2 (b) of the Company Letter contains a correct and
complete list as of the date of this Agreement of each outstanding
option to purchase shares of Company Capital Stock issued under the
Company Stock Option Plans (collectively, the “ Company
Stock Options ”), including the holder, date of grant,
term, acceleration of vesting or exercisability, if any, whether
such option is a nonqualified stock option or incentive stock
option, any restrictions on the exercise or sale of such option or
the underlying shares (other than any restrictions set forth in the
Company Stock Option Plans), exercise price and number of shares of
Company Capital Stock subject thereto. Except for the Company
Stock Options and for the stockholder rights (the “
Company Rights ”) issued pursuant to the Rights
Agreement dated as of August 25, 1999 between the Company and Wells
Fargo Bank Minnesota, National Association (formerly Norwest Bank
Minnesota), as Rights Agent (the “ Company Rights
Agreement ”), there are no options, warrants, calls,
rights or agreements to which the Company or any of its
Subsidiaries is a party or by which any of them is bound obligating
the Company or any of its Subsidiaries to issue, deliver or sell,
or cause to be issued, delivered or sold, additional shares of
Company Capital Stock or any of its Subsidiaries or obligating the
Company or any of its Subsidiaries to grant, extend or enter into
any such option, warrant, call, right or agreement. All
Company Stock Options and all shares of Company Capital Stock
issued pursuant to the exercise of options granted under the
Company Stock Option Plans have been granted or issued,
respectively, and all shares of Company Common Stock to be issued
pursuant to the Company Stock Option Plans prior to the Closing
will be issued, in compliance with the Securities Act of 1933, as
amended (the “ Securities Act ”). Except
as set forth in Section 3.2(b) of the Company Letter, none of the
terms of the Company Stock Options provide for accelerated vesting
as a result of the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.
(c)
A list of all outstanding shares of Company Common Stock subject to
repurchase by the Company or that is otherwise subject to a risk of
forfeiture or other condition under the 2003 Plan (as hereinafter
defined), any applicable restricted stock purchase agreement, or
other agreement with the Company is set forth in Section 3.2(c) of
the Company Letter, including the holder, date of grant,
acceleration of vesting or lapse of restrictions, if any, any
restrictions on the sale of such shares (other than any
restrictions set forth in the Company Stock Option Plans), and
number of shares.
(d)
Except as set forth in Section 3.2(d) of the Company Letter, there
are no outstanding contractual obligations of the Company or any of
its Subsidiaries to repurchase, redeem or otherwise acquire any
shares of Company Capital Stock or any capital stock of or any
equity interests in the Company or any Subsidiary. Each
outstanding share of capital stock of each Subsidiary of the
Company is duly authorized, validly issued, fully paid and
nonassessable and each such share is owned by the Company or
another subsidiary of the Company, free and clear of all security
interests,
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liens, claims, pledges, options,
rights of first refusal, agreements, limitations on voting rights,
charges and other encumbrances of any nature whatsoever. The
Company does not have any outstanding bonds, debentures, notes or
other obligations the holders of which have the right to vote (or
are convertible into or exercisable for securities having the right
to vote) with the stockholders of the Company on any matter.
Section 3.2(d) of the Company Letter contains a correct and
complete list as of the date of this Agreement of each of the
Company’s Subsidiaries. Except as set forth on Section
3.2(d) of the Company Letter, as of the date hereof, neither the
Company nor any of its Subsidiaries is party to or bound by (x) any
agreement or commitment pursuant to which the Company or any
Subsidiary of the Company is or could be required to register any
securities under the Securities Act or (y) any debt agreements or
instruments which grant any rights to vote (contingent or
otherwise) on matters on which stockholders of the Company may
vote.
(e)
The Company does not own an equity interest in any other Person
(other than a Subsidiary).
(f)
There are no stockholder agreements, voting trusts or other
agreements or understandings to which the Company is a party or by
which it is bound relating to the voting or registration of any
shares of Company Capital Stock.
Section 3.3
Authority . (a) The Company has all
necessary corporate power and authority to enter into this
Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement by the
Company and the consummation by the Company of the transactions
contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company, subject, in the case
of this Agreement, to the approval of this agreement by the
Company’s stockholders and the filing of the Certificate of
Merger as required by the DGCL. This Agreement has been duly
and validly executed and delivered by the Company and (assuming the
valid authorization, execution and delivery of this Agreement by
Buyer and Sub and the validity and binding effect of the Agreement
on Buyer and Sub) constitutes the valid and binding obligation of
the Company enforceable against the Company in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors’ rights and
to general equity principles.
(b)
Without limiting the generality of the foregoing, on or prior to
the date of this Agreement, the Board of Directors of the Company
(the “ Company Board ”) has unanimously (i)
declared the Merger advisable and fair to and in the best interest
of the Company and its stockholders, and approved and adopted this
Agreement in accordance with the DGCL, (ii) resolved to recommend
approval and adoption of this Agreement, the Merger and the other
transactions contemplated hereby by the Company’s
stockholders, and (iii) has not withdrawn or modified such approval
or resolution to recommend.
Section
3.4
Consents and Approvals; No Violation .
Assuming that all consents,
approvals, authorizations and other actions described in
this
10
Section 3.4 have been obtained and
all filings and obligations described in this Section 3.4 have been
made and any waiting periods thereunder have terminated or expired,
the execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated hereby and compliance
with the provisions hereof and thereof will not, result in any
violation of, or default (with or without notice or lapse of time,
or both) under, or give to others a right of termination,
cancellation or acceleration of any obligation or result in the
loss of a benefit under, or result in the creation of any lien,
security interest, charge or encumbrance upon any of the properties
or assets of the Company under, any provision of (a) the Company
Charter or the By-laws of the Company, (b) any Material
Contract, or (c) any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to the Company or any of
its properties or assets, except, (A) with respect to clauses (b)
and (c), for any such violations, defaults, losses or other
occurrences which would not, individually or in the aggregate, have
a Material Adverse Effect and (B) with respect to clause (b), those
consents listed in Section 3.4(b) of the Company Letter. No
filing or registration with, or authorization, consent or approval
of, any Governmental Entity is required by or with respect to the
Company in connection with the execution and delivery of this
Agreement by the Company or is necessary for the consummation of
the Merger and the other transactions contemplated by this
Agreement, except (i) in connection, or in compliance, with the
provisions of the HSR Act, (ii) the filing of Certificate of Merger
with the Secretary of State of the State of Delaware and
appropriate documents with the relevant authorities of other states
in which the Company is qualified to do business, (iii) such
filings and consents as may be required under any environmental,
health or safety law or regulation pertaining to any notification,
disclosure or required approval triggered by the Merger or by the
transactions contemplated by this Agreement, (iv) State Takeover
Approvals, (v) under the Exchange Act, (vi) any of such items as
may be required under foreign laws.
Section 3.5
SEC Reports; Financial Statements .
(a) The Company has
filed all required forms, reports and documents with the SEC since
December 31, 1999 (the “ Company SEC Reports ”),
each of which complied at the time of filing in all material
respects with all applicable requirements of the Securities Act and
the Securities Exchange Act of 1934 (the “ Exchange
Act ”) and each Applicable Law as in effect on the dates
such forms, reports and documents were filed. None of such
Company SEC Reports, including any financial statements or
schedules included or incorporated by reference therein, contained
when filed any untrue statement of a material fact or omitted to
state a material fact required to be stated or incorporated by
reference therein or necessary in order to make the statements
therein in light of the circumstances under which they were made
not misleading, except to the extent superseded or amended by a
Company SEC Report filed subsequently and prior to the date
hereof. The consolidated financial statements of the Company
included in the Company SEC Reports (the “ Financial
Statements ”) fairly presented in all material respects,
in conformity with United States generally accepted accounting
principles applied on a consistent basis (except (i) as may be
indicated in the notes thereto and (ii) that unaudited statements
are subject to normal year-end adjustments that did not and would
not, individually or in the aggregate, have a Material Adverse
Effect, and do not contain footnotes in substance or form required
to the extent permitted by Form 10-Q of the Exchange Act), the
consolidated financial position of the Company and its
11
consolidated Subsidiaries as of the
dates thereof and their consolidated results of operations and cash
flows for the periods then ended.
(b)
The Company has heretofore made, and hereafter will make, available
to Buyer a complete and correct copy of any amendments or
modifications that are required to be filed with or submitted to
the SEC but have not yet been filed with or submitted to the SEC to
agreements, documents or other instruments that previously had been
filed with or submitted to the SEC by the Company pursuant to the
Exchange Act.
(c)
Each Company SEC Report containing financial statements that has
been filed with or submitted to the SEC since July 31, 2002, was
accompanied by the certifications required to be filed or submitted
by the Company’s chief executive officer and chief financial
officer pursuant to the Sarbanes-Oxley Act of 2002 (the “
Sarbanes-Oxley Act ”), and at the time of filing or
submission of each such certification, such certification was true
and accurate and complied with the Sarbanes-Oxley Act and the rules
and regulations promulgated thereunder.
(d)
Except as set forth in Section 3.5(d) of the Company Letter, since
December 31, 1999, neither the Company nor any Subsidiary of the
Company nor, to the Company’s knowledge, any director,
officer, employee, auditor, accountant or representative of the
Company or any Subsidiary of the Company has received or otherwise
had or obtained knowledge of any complaint, allegation, assertion
or claim, whether written or oral, regarding the accounting or
auditing practices, procedures, methodologies or methods of the
Company or any Subsidiary of the Company or their respective
internal accounting controls, including any complaint, allegation,
assertion or claim that the Company or any Subsidiary of the
Company has engaged in questionable accounting or auditing
practices. No attorney representing the Company or any
Subsidiary of the Company, whether or not employed by the Company
or any Subsidiary of the Company, has reported evidence of a
material violation of securities laws, breach of fiduciary duty or
similar violation by the Company or any of its officers, directors,
employees or agents to the Company Board or any committee thereof
or to any director or officer of the Company.
(e)
To the knowledge of the Company, no employee of the Company or any
Subsidiary of the Company has provided or is providing information
to any law enforcement agency regarding the commission or possible
commission of any crime or the violation or possible violation of
any Applicable Law. Neither the Company nor any Subsidiary of
the Company nor any officer, employee, contractor, subcontractor or
agent of the Company or any such Subsidiary has discharged,
demoted, suspended, threatened, harassed or in any other manner
discriminated against an employee of the Company or any Subsidiary
of the Company in the terms and conditions of employment because of
any act of such employee described in 18 U.S.C. §
1514A(a).
Section 3.6
No Default . Except as set forth in Section 3.6 of the
Company Letter, the Company is not in breach, default or violation
(and no event has occurred that with notice or the lapse of time or
both would constitute a breach, default or violation) of any term,
condition or provision of (i) its Certificate of Incorporation or
By-
12
laws, (ii) any Material Contract
that is listed in Section 3.11(b)(i) of the Company Letter, or
(iii) any material order, writ, injunction, decree, law, statute,
rule, or regulation applicable to the Company or any of its
properties or assets.
Section
3.7
Absence of Certain Changes or Events .
(a) Except as and to
the extent disclosed in the Company SEC Reports filed on or before
the date hereof, since June 30, 2004 (the “ Company
Balance Sheet Date ”), (i) the Company and its
Subsidiaries have not incurred any liability or obligation
(indirect, direct or contingent), or entered into any oral or
written agreement or other transaction, that is not in the ordinary
course of business, (ii) the Company and its Subsidiaries have not
sustained any material loss or material interference with their
business or properties from fire, flood, windstorm, accident or
other calamity (whether or not covered by insurance), (iii) there
has been no change in the capital stock of the Company except for
the issuance of shares of the Company Common Stock pursuant to
Company Stock Options, in the ordinary course of business
consistent with past practices; (iv) there has been no dividend or
distribution of any kind declared, paid or made by the Company on
any class of its stock, (v) there has not been (A) any adoption of
a new Company Plan (as hereinafter defined), (B) any amendment to a
Company Plan increasing benefits thereunder, (C) any granting by
the Company or any of its Subsidiaries to any executive officer of
the Company or any of its Subsidiaries of any increase in
compensation, except in the ordinary course of business consistent
with prior practice or as was required under employment agreements
in effect as of the date of the Company Balance Sheet Date,
(D) any granting by the Company or any of its Subsidiaries to
any such executive officer of any increase in severance or
termination agreements in effect as of the Company Balance Sheet
Date, or (E) any entry by the Company or any of its Subsidiaries
into any employment, severance or termination agreement with any
such executive officer, (vi) there has not been any change in the
amount or terms of the indebtedness of the Company or any of its
Subsidiaries from the Balance Sheet Date, and (vii) other than
amendment of the Company Rights Plan pursuant to Sections 3.30
and 5.9 hereof, amendment of any term of any outstanding security
of the Company or any Subsidiary.
(b)
Except as and to the extent disclosed in the Company SEC Reports
filed on or before the date hereof, since the Company Balance Sheet
Date there has been no event causing a Material Adverse Effect on
the Company, nor any development that would, individually or in the
aggregate, reasonably be expected to result in a Material Adverse
Effect on the Company. For purposes of this Agreement,
“ Material Adverse Change ” or “
Material Adverse Effect ” mean, when used with respect
to the Company, any change or effect that is or could reasonably be
expected (as far as can be foreseen at the time) to be materially
adverse to the business, operations, properties, assets,
liabilities, employee relationships, customer or supplier
relationships, earnings or results of operations, financial
projections or forecasts, or the business prospects and condition
(financial or otherwise) of the Company, taken as a whole, other
than such changes, effects or circumstances reasonably attributable
to: (i) economic conditions generally in the United States or
foreign economies in any locations where the Company and its
Subsidiaries have material operations or sales; (ii) conditions
generally affecting the industries in which the Company
participates, provided, with respect to clauses (i) and (ii), the
changes, effects or circumstances do not have a
materially
13
disproportionate effect (relative to
other industry participants) on the Company, (iii) the payment of
any amounts due to, or the provision of any other benefits to, any
officers or employees under employment contracts, non-competition
agreements, employee benefit plans, severance arrangements or other
arrangements in existence on the date of this Agreement and
disclosed in the Company Letter; (iv) any action taken by the
Company with Buyer’s express written consent (except that
consent to action taken to respond to a Material Adverse Effect or
a Material Adverse Change shall not be deemed any waiver by Buyer
as to the event or circumstance giving rise to such Material
Adverse Effect or Material Adverse Change); (v) the announcement or
pendency of the Merger to the extent the same causes cancellation
or delay in placing customer or potential customer orders, (vi) any
change in the trading price of the Company’s common stock in
and of itself; or (vii) any failure, in and of itself, by the
Company to meet internal or other estimates, predictions,
projections or forecasts of revenue, net income or any other
measure of financial performance (it being understood that, with
respect to clauses (vi) and (vii), the facts or circumstances
giving rise or contributing to such change in trading price or
failure to meet estimates or projections may be deemed to
constitute, or be taken into account in determining whether there
has been, a Material Adverse Effect).
(c)
Since the Balance Sheet Date, the Company has not incurred any
liabilities (including Tax liabilities), of any nature, whether
absolute or contingent, of a type required to be recorded on a
balance sheet or disclosed in the notes thereto under GAAP other
than liabilities incurred in the ordinary course, none of which
would, in the aggregate, have a Material Adverse Effect. As
of the date hereof, the Company has only the indebtedness for
borrowed money shown in Section 3.7(c) of the Company
Letter.
Section
3.8
Permits and Compliance . (a) The Company and its Subsidiaries are
and at all times have been in possession of all material
franchises, grants, authorizations, licenses, permits, easements,
variances, exceptions, consents, certificates, approvals and orders
of any Governmental Entity necessary for the Company or any of its
Subsidiaries to own, lease and operate its properties or to carry
on its business as it is now being conducted (the “
Company Permits ”), and no suspension or cancellation
of any of the Company Permits is pending or, to the knowledge of
the Company, threatened. Neither the Company nor any of its
Subsidiaries has been in violation of (i) any Company Permits, or
(ii) any applicable law, ordinance, administrative, or governmental
rule or regulation, including any consumer protection, equal
opportunity, customs, export control, foreign trade, foreign
corrupt practices (including the Foreign Corrupt Practices Act),
patient confidentiality, health, health care industry regulation
and third-party reimbursement laws including under any Federal
Health Care Program (as defined in Section 1128B(f) of the U.S.
Federal Social Security Act (together with all regulations
promulgated thereunder, the “ SSA ”)), except in
the case of any violations of any law, ordinance, administrative,
or governmental rule or regulation described in (ii) that would
not, individually or in the aggregate, have a Material Adverse
Effect.
(b)
The Company is not subject to any consent decree from any
Governmental Entity. The Company has not received any warning
letter from the FDA
14
during the last three years.
The Company has received no communication from any regulatory
agency or been notified during the last three years that any
product approval is withdrawn or modified or that such an action is
under consideration. Without limiting the foregoing, the
Company is in compliance, in all respects, with all current
applicable statutes, rules, regulations, guidelines, policies or
orders administered or issued by the FDA or comparable foreign
Governmental Entity including FDA’s Quality System
Regulation, 21 C.F.R. Part 820; the Company does not have knowledge
of any facts which furnish any reasonable basis for any Form
FDA-483 observations or regulatory or warning letters from the FDA,
Section 305 notices, or other similar communications from the FDA
or comparable foreign entity; and since April 30, 1999, there have
been no recalls, field notifications, alerts or seizures requested
or threatened relating to the Company’s products, except set
forth in Section 3.8 of the Company Letter. The
Company’s products, where required, are being marketed under
valid pre market notifications under Section 510 (k) of the Federal
Food, Drug and Cosmetic Act, 21 U.S.C. §360(k), and 21 C.F.R.
Part 807, Subpart E (“ 510(k)’s ”) or
pre-market approval applications approved by the FDA in accordance
with 21 U.S.C.§360(e) and 21 C.F.R. Part 814 (“
PMA’s ”). All 510(k)’s and
PMA’s for the Company’s products are exclusively owned
by the Company, and there is no reason to believe that FDA is
considering limiting, suspending, or revoking any such
510(k)’s or PMA’s or changing the marketing
classification or labeling of any such products. To the
knowledge of the Company, there is no false information or
significant omission in any product application or product-related
submission to the FDA or comparable foreign Governmental
Entity. The Company has obtained all necessary regulatory
approvals from any foreign regulatory agencies related to the
products distributed and sold by the Company. Neither the
Company nor any Subsidiary, nor the officers, directors, managing
employees or agents (as those terms are defined in 42 C.F.R.
§1001.1001) of the Company or any Subsidiary: (i) have
engaged in any activities which are prohibited under, or are cause
for civil penalties or mandatory or permissive exclusion from, any
Federal Health Care Program under Sections 1128, 1128A, 1128B, or
1877 of SSA or related state or local statutes, including knowingly
and willfully offering, paying, soliciting or receiving any
remuneration (including any kickback, bribe or rebate), directly or
indirectly, overtly or covertly, in cash or in kind in return for,
or to induce, the purchase, lease, or order, or the arranging for
or recommending of the purchase, lease or order, of any item or
service for which payment may be made in whole or in part under any
such program; (ii) have had a civil monetary penalty assessed
against them under Section 1128A of SSA; (iii) have been excluded
from participation under any Federal Health Care Program; or (iv)
have been convicted (as defined in 42 C.F.R. § 1001.2) of any
of the categories of offenses described in Sections 1128(a) or
1128(b)(1), (b)(2), or (b)(3) of SSA.
(c)
There are no contracts or agreements of the Company or its
Subsidiaries having terms or conditions which would have a Material
Adverse Effect on the Company or having covenants not to compete
that materially impair the ability of the Company to conduct its
business as currently conducted or would reasonably be expected to
impair Buyer’s ability to conduct its businesses in any
material respect.
Section
3.9
Tax Matters . Subject to such exceptions as would not,
individually or in the aggregate, have a Material Adverse Effect,
(i) the
15
Company and its Subsidiaries have
timely filed (taking account of extensions to file that have been
properly obtained) all Tax Returns (as hereinafter defined)
required to have been filed by them, and such Tax Returns are
correct and complete in all respects; (ii) the Company and each of
its Subsidiaries has timely paid (taking account of extensions to
pay that have been properly obtained) all Taxes (as hereinafter
defined) shown on such Tax Returns as having been due; (iii) the
Company and each of its Subsidiaries has complied in all respects
with all rules and regulations relating to the withholding of Taxes
and the remittance of withheld Taxes; (iv) neither the Company nor
any Subsidiary has waived any statute of limitations in respect of
its Taxes, which remains open; (v) no federal, state, local, or
foreign audits or administrative proceedings, of which the Company
or any Subsidiary has notice, are pending with regard to any Taxes
or Tax Returns of the Company or any of its Subsidiaries and the
Company and its Subsidiaries have not received a written notice of
any proposed audit or proceeding from the Internal Revenue Service
(“ IRS ”) or any other taxing authority; (vi)
there is currently no limitation on the utilization of net
operating losses, capital losses, built-in losses, tax credits or
similar items of the Company and its Subsidiaries under
Sections 269, 382, 383, 384 or 1502 of the Code and the
Treasury Regulations thereunder (and comparable provisions of
state, local or foreign law); (vii) the Company and its
Subsidiaries have complied with the requirements of Section 482 of
the Internal Revenue Code of 1986, as amended (the “
Code ”) and similar laws of foreign jurisdictions with
respect to intercompany transactions and have maintained complete
and accurate records to substantiate the pricing of such
transactions; (viii) no claim has been made by any taxing authority
in any jurisdiction where the Company and its subsidiaries do not
file Tax Returns that they are or may be subject to Tax by that
jurisdiction; (ix) neither the Company nor any subsidiary has been
a member of an affiliated group of corporations (within the meaning
of Section 1504(a)) filing a consolidated federal income tax return
(or a group of corporations filing a consolidated, combined, or
unitary income tax return under comparable provisions of state,
local, or foreign tax law) for any taxable period, other than a
group the common parent of which is Company; (x) the Company does
not have any obligation under any agreement or arrangement with any
other Person with respect to Taxes of such other Person (including
pursuant to Treasury Regulations Section 1.1502-6 or comparable
provision of state, local or foreign tax law) including any
liability for Taxes of any predecessor entity; (xiv) the unpaid
Taxes of the Company and its Subsidiaries do not exceed the reserve
for Tax liability (excluding any reserve for deferred Taxes
established to reflect temporary differences between book and Tax
income) set forth or included in the Company’s most recent
balance sheet as adjusted for the passage of time through the
Closing Date, and (xi) Section 3.9 of the Company Letter sets forth
all foreign jurisdictions in which the Company or any of its
subsidiaries are subject to Tax, are engaged in business or have a
permanent establishment. For purposes of this
Agreement: (A) “ Taxes ” means any
federal, state, local, foreign or provincial income, gross
receipts, property, sales, use, license, franchise, employment,
payroll, withholding, alternative or added minimum, ad valorem,
value-added, transfer, excise, capital, or net worth tax, or other
tax, custom, duty, governmental fee or other like assessment or
charge of any kind whatsoever, together with any interest thereon
or penalty imposed with respect thereto by any Governmental Entity,
whether computed on a separate, consolidated, unitary, combined, or
any other basis, and shall include any
16
transferee or secondary liability in
respect of any tax (whether imposed by law, contractual agreement,
or otherwise), and (B) “ Tax Return ” means any
return, report or similar statement (including the attached
schedules) required to be filed with respect to any Tax, including
any information return, claim for refund, amended return or
declaration of estimated Tax.
Section
3.10
Actions and Proceedings . Except as set forth in Section 3.10 of
the Company Letter, there are no outstanding orders, judgments,
injunctions, awards or decrees of any Governmental Entity against
or involving the Company or any of its Subsidiaries, or against or
involving any of the directors, officers, employees, consultants,
agents or stockholders of the Company or any of its Subsidiaries,
as such, any of the Company’s or its Subsidiaries properties,
assets or business or any Company Plan (as hereinafter
defined). Except for any actions, suits or claims or legal,
administrative or arbitrative proceedings or investigations
(including claims for workers’ compensation) for which the
Company’s reasonably expected uninsured exposure, in the
aggregate, is less than $300,000, there are no actions, suits or
claims or legal, administrative or arbitrative proceedings or
investigations (including claims for workers’ compensation)
pending or, to the knowledge of the Company, threatened against or
involving the Company or any of its Subsidiaries or any of its or
their respective directors, officers, employees, consultants,
agents or stockholders, as such, or any of the Company’s or
the Subsidiaries’ properties, assets or business or any
Company Plan.
Section
3.11
Certain Agreements . (a) Except as set forth in Section
3.11(a) of the Company Letter, neither the Company or any of its
Subsidiaries is a party to any oral or written agreement, program,
plan or other arrangement relating to the compensation of employees
of the Company, including any employment agreement, severance
agreement, stock option plan, stock appreciation rights plan,
restricted stock plan or stock purchase plan, pension plan (as
defined in Section 3(2) of ERISA) or welfare plan (as defined in
Section 3(1) of ERISA) (collectively the “ Compensation
Agreements ”), any of the benefits of which will be
increased, or the vesting of the benefits of which will be
accelerated, by the occurrence of any of the transactions
contemplated by this Agreement or the value of any of the benefits
of which will be calculated on the basis of any of the transactions
contemplated by this Agreement. Section 3.11(a) of the
Company Letter sets forth for each officer, director or employee
who is a party to, or will receive benefits under, any Compensation
Agreement as a result of the transactions contemplated herein, the
total amount that each such Person may receive, or is eligible to
receive, assuming that the transactions contemplated by this
Agreement are consummated on the date hereof. There is no
current indebtedness owed to the Company or any of its Subsidiaries
from each officer, director or employee of the Company or any of
its Subsidiaries.
(b)
Set forth in Section 3.11(b) of the Company Letter is a list of all
Material Contracts to which the Company or any of its Subsidiaries
is a party as of the date hereof or to which any of its assets are
bound. Prior to the date hereof, the Company has made
available true and complete copies of all such Material Contracts
to Buyer. “ Material Contracts ” means any
of the following contracts, agreements or
17
arrangements (other than purchase or
sales orders entered into in the ordinary course), whether written
or oral, currently in effect and binding:
(i)
each “material contract” (as such term is defined in
Item 601(b)(10)(ii) of Regulation S-K promulgated by the Securities
Exchange Commission);
(ii)
any contract or commitment that involves a dollar amount in excess
of $100,000 or extends for a period of 12 months or more (other
than any contract or commitment that is terminable on 90 days
notice without penalty);
(iii)
any employment contracts with employees, or other agreement with
any agents or consultants involving annual compensation exceeding
$100,000;
(iv)
any contract with sales or other agents, brokers, franchisees,
distributors or dealers;
(v)
any partnership or joint venture agreement;
(vi)
any lease or other occupancy or use agreements related to Real
Estate, or any options, rights of first refusal or other interests
in any Real Estate;
(vii)
any agreements giving any party the right to renegotiate or require
a reduction in price or refund of payments previously
made;
(viii)
any agreements for the borrowing or lending of money and any
guaranty agreement or other evidence of indebtedness;
(ix)
any agreements that contain any provisions requiring the Company or
any of its Subsidiaries to indemnify any other party thereto other
than (A) product warranties of the Company, (B) indemnities set
forth in lease agreements related to Real Estate provided pursuant
to (vi) above;
(x)
any agreement for the sale of goods or services to any Governmental
Entity;
(xi)
any agreement granting any Person a Lien on any of the assets of
the Company or any of its Subsidiaries;
(xii)
any bonus, executive or deferred compensation, profit sharing,
pension or retirement, stock option or stock purchase,
hospitalization, insurance, medical reimbursement or other plan,
agreement or arrangement or practice providing employee or
executive benefits to any officer or employee or former officer or
former employee;
18
(xiii)
any non-competition or confidentiality agreement relating to the
business of the Company or any of its Subsidiaries or any other
contract restricting its right to conduct the business of the
Company or any of its Subsidiaries at any time, in any manner or at
any place in the world, or the expansion thereof to other
geographical areas, customers, suppliers or lines of business;
or
(xiv)
any license agreement granting any right to use or practice any
rights under any Intellectual Property (whether inbound or
outbound).
(c)
Except as set forth on Section 3.11(c) of the Company Letter, and
except as would not, individually or in the aggregate, have a
Material Adverse Effect: each Material Contract is a legal,
valid and binding agreement of the Company or its Subsidiaries,
neither the Company nor any of its Subsidiaries (or to the
knowledge of the Company, any other party thereto) is in default
under any Material Contract, and none of such Material Contracts
has been canceled by the other party thereto; each Material
Contract is in full force and effect and no event has occurred
which, with the passage of time or the giving of notice or both,
would constitute a default, event of default or other breach by the
Company or any Subsidiaries party thereto which would entitle the
other party to such Material Contract to terminate the same or
declare a default or event of default thereunder; to the knowledge
of the officers of the Company and its Subsidiaries, the Company
and its Subsidiaries are not in receipt of any claim of default
under any such agreement.
Section
3.12
ERISA . (a) Each Company Plan is listed in Section
3.12(a) of the Company Letter. With respect to each Company
Plan, the Company has made available to Buyer a true and correct
copy of (i) the three most recent annual reports (Form 5500) filed
with the applicable government agency, (ii) each such Company Plan
that has been reduced to writing and all amendments thereto, (iii)
each trust agreement, insurance contract or administration
agreement relating to each such Company Plan, (iv) a written
summary of each unwritten Company Plan, (v) the most recent summary
plan description or other written explanation of each Company Plan
provided to participants, (vi) the most recent actuarial report or
valuation relating to a Company Plan subject to Title IV of the
Employee Retirement Income Security Act of 1974, as amended
(“ ERISA ”), (vii) the most recent determination
letter or opinion letter and request therefor, if any, issued by
the IRS with respect to any Company Plan intended to be qualified
under section 401(a) of the Code, (viii) any request for a
determination currently pending before the IRS, (ix) all
correspondence with the IRS, the Department of Labor, or Pension
Benefit Guaranty Corporation relating to any outstanding
controversy or with respect to any matter that has been resolved in
the previous three years and (x) all forms and certificate samples
used to comply with Sections 4980, 9801 and 9802 of the Code.
Each Company Plan complies in form and has complied in operation in
all material respects with ERISA, the Code and all other applicable
statutes and governmental rules and regulations. Except as
set forth in Section 3.12(a) of the Company Letter, no
“reportable event” (within the meaning of Section 4043
of ERISA) has occurred with respect to any Company Plan for which
the 30-day notice requirement has not been waived. Neither
the Company nor any of its ERISA Affiliates (as hereinafter
defined) has had any obligation to contribute to any
Company
19
Multiemployer Plan within the past
six (6) years. No action has been taken, or is currently
being considered, to terminate or withdraw from any Company Plan
subject to Title IV of ERISA and there is no reason to believe the
Pension Benefit Guaranty Corporation would initiate the termination
of any such Plan. No Company Plan, nor any trust created
thereunder, has incurred any “accumulated funding
deficiency” (as defined in Section 302 of ERISA), whether or
not waived.
(b)
Except for routine contributions due and owing, with respect to the
Company Plans, no event has occurred and there exists no condition
or set of circumstances in connection with which the Company or any
Subsidiary or ERISA Affiliate or Company Plan fiduciary could be
subject to any material liability under the terms of such Company
Plans, ERISA, the Code or any other applicable law. All
Company Plans that are intended to be qualified under Section
401(a) of the Code have been determined by the IRS to be so
qualified, or a timely application for such determination is now
pending and the Company is not aware of any reason why any such
Company Plan is not so qualified in operation. Except as
disclosed in Section 3.12(b) of the Company Letter, neither the
Company nor any of its Subsidiaries or ERISA Affiliates has any
material liability or obligation under any welfare plan to provide
benefits after termination of employment to any employee or
dependent other than as required by Section 4980B of the
Code.
(c)
As used herein, (i) “ Company Plan ” means a
“pension plan” (as defined in Section 3(2) of ERISA
(including a Company Multiemployer Plan)), a “welfare
plan” (as defined in Section 3(1) of ERISA), and any other
written or oral bonus, profit sharing, deferred compensation,
incentive compensation, stock ownership, stock purchase, stock
option, phantom stock, restricted stock, stock appreciation right,
holiday pay, vacation, severance, medical, dental, vision,
disability, death benefit, sick leave, fringe benefit, personnel
policy, insurance or other plan, program, agreement, arrangement or
understanding, in each case established or maintained by the
Company or any of its Subsidiaries or ERISA Affiliates or as to
which the Company or any of its Subsidiaries or ERISA Affiliates
has contr
