Exhibit 2.1
AMENDED AND
RESTATED
AGREEMENT AND PLAN OF
MERGER
AMONG
ST. JUDE MEDICAL,
INC.
DRAGONFLY MERGER
CORP.,
AND
ENDOCARDIAL SOLUTIONS,
INC.
Dated as of September 29,
2004
TABLE OF
CONTENTS
AGREEMENT AND PLAN OF
MERGER
i
ii
iii
LIST OF
EXHIBITS
iv
AGREEMENT AND PLAN OF
MERGER
This AMENDED AND RESTATED AGREEMENT
AND PLAN OF MERGER, dated as of September 29, 2004 (this
“ Agreement ”), is among St. Jude Medical, Inc.,
a Minnesota corporation (“ Buyer ”), Dragonfly
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 ”) to amend and
restate in its entirety the Agreement and Plan of Merger dated
September 23, 2004 among Buyer, Sub and the Company (the
“ Original Agreement ”) to correct a
scrivener’s error in Section 6.3(e). Upon the
execution of this Agreement, the Original Agreement shall be deemed
in full force and effect from the date thereof solely as amended
and restated hereby. All references herein to “the date
hereof”, “the date of this Agreement” or any
words to that effect shall be deemed to refer to September 23,
2004.
RECITALS:
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
2
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
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
3
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 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.
4
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.
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.
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, 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
6
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.
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
7
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 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
8
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 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.
9
(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, 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
10
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 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
11
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 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
12
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-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,
13
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
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
14
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 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.
15
(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 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
16
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
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.
17
(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 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,
18
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;
(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
19
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 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,
seve
