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EXHIBIT 2.1
EXCHANGE AGREEMENT
Exchange Agreement, dated as of April 17, 2000 (the "Agreement"),
by and among American Medical Systems Holdings, Inc., a corporation organized
under the laws of the State of Delaware (the "Corporation"), and the entities
and individuals whose names and addresses appear from time to time on Schedule 1
hereto ("the Investors") and American Medical Systems, Inc., a corporation
organized under the laws of the State of Delaware ("AMS").
W I T N E S S E T H:
WHEREAS, the Corporation was incorporated under the laws of the
State of Delaware on March 17, 2000, with the two initial stockholders being
Warburg, Xxxxxx Equity Partners, LP ("WPEP") and Xxxxxxx X. Xxxxx ("Xxxxx"), who
each hold one share of Series D Convertible Voting Stock, $0.01 par value, of
the Corporation and with the Certificate of Incorporation in the form of Exhibit
1 hereto adopted as the Certificate of Incorporation of the Corporation (the
"Certificate of Incorporation").
WHEREAS, the Investors desire, upon the terms and subject to the
conditions hereinafter set forth, to subscribe for and acquire shares of Series
A Non-Voting Preferred Stock, par value $0.01 per share, shares of Series B
Convertible Voting Preferred Stock, par value $0.01 per share, shares of Series
C Convertible Non-Voting Preferred Stock, $0.01 par value per share, shares of
Series D Convertible Voting Preferred Stock, $0.01 par value per share and
shares of Series E Convertible Non-Voting Preferred Stock, $0.01 par value per
share, all of the Corporation ("the Corporation Preferred Stock"), in exchange
for their respective shares of Series A Non-Voting Preferred Stock, par value
$0.01 per share, shares of Series B Convertible Voting Preferred Stock, par
value $0.01 per share, shares of Series C Convertible Non-Voting Preferred
Stock, $0.01 par value per share, shares of Series D Convertible Voting
Preferred Stock, $0.01 par value per share and shares of Series E Convertible
Non-Voting Preferred Stock, $0.01 par value per share, all of AMS ("the AMS
Preferred Stock"), and the Corporation, upon such terms and subject to such
conditions, desires to issue such shares of the Corporation Preferred Stock to
the Investors;
WHEREAS, it is intended that, following the exchange described in
Section 1.1 below, the Investors should each hold the same proportions and same
classes of stock in the Corporation as they each held in AMS; and
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WHEREAS, the parties intend that the exchange described in Section
1.1 below constitute a tax-free exchange under Section 351 of the Internal
Revenue Code of 1986, as amended.
NOW, THEREFORE, in consideration of the foregoing and for other
good and valuable consideration the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
I. Exchange of the AMS Preferred Stock for the Corporation Preferred
Stock
1.1. Exchange. Upon the terms and subject to the conditions of
this Agreement, each Investor hereby severally subscribes for and agrees to
acquire, and the Corporation hereby accepts such subscription and agrees to
issue to such Investor, the number of shares of the Corporation Preferred Stock
set forth on Schedule 1 hereto (the "New Shares"). In consideration of the
issuance of the New Shares, each Investor hereby assigns and transfers to, and
contributes to the capital of, the Corporation, and the Corporation hereby
accepts, in full consideration for the New Shares, such Investor's AMS Preferred
Stock set forth on Schedule 2 attached hereto (with respect to each Investor, an
"AMS Share" and with respect to all Investors, the "AMS Shares").
1.2. Tender of AMS Shares and Issuance of New Shares. The exchange
of the New Shares for the AMS Shares described in Section 1.1 shall take place
on April 17, 2000 at 10:00 A.M., New York City time, or on such other date as
the Investors and the Corporation agree in writing (the "Closing Date"), at such
location as the Investors and the Corporation shall mutually select.
1.3. Accrued Divided Rights. For the purposes of determining the
dividend rights that attach to the New Shares as set out in the Certificate of
Incorporation, each New Share shall be deemed to have been issued to the
relevant Investor at the time the AMS Share for which the New Share was
exchanged was issued to that particular Investor and all accrued but unpaid
dividends which attached to a particular AMS Share at the Closing Date shall at
the Closing Date be deemed transferred to and will attach to the particular New
Share for which it was exchanged under the terms of this Agreement.
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II. Shareholders' Agreement and Termination of Stockholders' Agreement
2.1. Shareholders' Agreement. The Investors and the Corporation
shall have executed and delivered at the Closing Date a shareholders' agreement
relating to the Corporation in the form of Exhibit 2 hereto.
2.2. Waiver of Rights Under and Termination of Stockholders'
Agreement Relating to AMS. The Investors hereby agree to waive any rights of
first refusal they may have under the terms of the stockholders' agreement
relating to AMS, dated September 25, 1998, by and among WPEP, Vertical Fund
Associates, LP, Second Century Growth Deferred Compensation Plan, Standby Fund
1998, AMS Investors, Xxx X. Xxxxxxxxx and AMS, and as amended by Amendment
Number 1, dated as of July 27, 1999 (as further amended, modified or
supplemented from time to time) ("the AMS Stockholders' Agreement") arising from
the exchange described in Section 1.1 above and the Investors and AMS agree that
the AMS Stockholders' Agreement shall terminate on the Closing Date and shall
have no force and effect as of the Closing Date.
III. Adoption of AMSH 2000 Equity Incentive Plan
3.1. AMSH 2000 Equity Incentive Plan. The Corporation shall at or
before the Closing Date adopt the AMSH 2000 Equity Incentive Plan in the form of
Exhibit 3 hereto for the benefit of the employees of the Company and its
subsidiaries and it shall execute and deliver at the Closing Date a stock option
agreement between Xxxxxxx Xxxxx and the Corporation in the form of Exhibit 4
hereto. The stock option agreement, dated April __, 1999, between AMS and
Xxxxxxx Xxxxx relating to the AMS 1998 Equity Incentive Plan shall terminate on
the Closing Date and shall have no force and effect as of the Closing Date.
IV. Amendment to Influence Exchange Agreement
4.1. The Corporation shall at or before the Closing Date execute
and deliver an amendment agreement in the form of Exhibit 4 hereto among the
Corporation, AMS and Urotek Ltd., an Israeli company, amending an exchange
agreement made among AMS and Urotek Ltd., and dated December 16, 1999 relating
to the purchase by AMS of certain common stock in Influence, Inc., a Delaware
corporation, in exchange for the issue of stock in AMS.
V. Representations and Warranties of the Corporation
5.1. Representations and Warranties. The Corporation hereby
represents and warrants to each Investor as follows:
(a) Organization. The Corporation is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
with full power to own its
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properties and carry on its business as presently conducted and as contemplated
by this Agreement and to enter into and perform this Agreement in accordance
with its terms.
(b) Authorization. All corporate action necessary to authorize the
Corporation to enter into this Agreement and to perform the covenants and
agreements hereof to be performed by it has been duly and validly taken. Neither
the execution of this Agreement nor the performance by the Corporation of its
covenants and agreements hereunder violates or will violate any provisions of
the Certificate of Incorporation or Bylaws of the Corporation or of any
agreement, document or instrument to which it is a party or by which it is
bound.
(c) Capitalization. All the outstanding capital shares of the
Company have been duly and validly issued and are fully paid and non-assessable.
Upon issuance, sale and delivery as contemplated by this Agreement, the New
Shares will be duly authorized, validly issued, fully paid and non-assessable
shares of the Company, free of all preemptive or similar rights, and entitled to
the rights therein described.
VI. Representations, Warranties, Acknowledgments and Covenants of the
Investors
6.1. Investor's Representations, Warranties and Acknowledgments.
The representations, warranties and acknowledgments made by each Investor in
this Agreement are made with the intent that they be relied upon by the
Corporation. Each Investor, severally and not jointly, hereby represents,
warrants and acknowledges to the Corporation:
(a) Suitability.
(i) Such Investor (x) has the requisite knowledge and experience
in financial and business matters to be capable of evaluating the merits and
risks of an investment in the Corporation, (y) is able to bear the economic
risks of such investment in the Corporation for an indefinite period and (z) at
the present time could afford a complete loss of such investment.
(ii) Such Investor and such Investor's attorneys, accountants and
other representatives and advisors (x) have been given an opportunity to ask,
and have, to the extent that such Investor has considered necessary, asked
questions of, and have received answers from, representatives of the Corporation
concerning the exchange of the New Shares for the AMS Shares and the affairs of
the Corporation, and such questions, if any, have been answered to the full
satisfaction of the Investor and such persons; and (y) have been given or
afforded access to all documents, records, books and additional information
which such Investor and such persons have requested regarding such matters. In
exchanging AMS Shares for New Shares, the Investor is not relying on any oral
information furnished by or oral
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representation made by the Corporation or any one acting on behalf of the
Corporation.
(b) Awareness.
(i) The Investor understands that the exchange of the AMS Shares
for New Shares hereunder has not been registered under the 1933 Act or under any
state securities laws, in reliance upon exemptions therefrom for non-public
offerings, and that the Shares must be held indefinitely unless the sale thereof
is subsequently registered under the 1933 Act and under certain state securities
laws or an exemption from such registration is available. The Investor
understands that the certificate or certificates for the New Shares will bear a
legend to such effect.
(ii) The Investor shall not sell or otherwise transfer the New
Shares unless they are registered under the 1933 Act and under any applicable
securities laws, or an exemption from such registration is available. The
Investor understands that neither the Corporation nor any other person is
required to register any New Shares under the 1933 Act, or take any steps to
perfect any exemption therefrom for any resale of the New Shares pursuant to
Rule 144 under the 1933 Act, or otherwise. The Investor understands that there
may not be any public market for the New Shares.
(iii) The New Shares being acquired by the Investor are being
acquired solely for the Investor's own account for investment, and not with a
view to, or for resale in connection with, any distribution of the New Shares.
(iv) The Investor understands that no offering memorandum or sales
literature in connection with the issuance of New Shares hereunder has been
filed with or reviewed by the Securities and Exchange Commission or the state
securities administrators. No federal or state agency has passed upon the New
Shares or made any finding or determination as to the merits thereof.
(c) Authorization, Binding Obligation and Title to AMS Shares.
(i) The Investor has duly taken any and all action necessary to
authorize such Investor's execution, delivery and performance of this Agreement
in accordance with its terms;
(ii) The Investor has validly executed and delivered this
Agreement;
(iii) This Agreement constitutes the valid and binding obligation
of the Investor, enforceable in accordance with its terms;
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(iv) Neither the execution nor the performance of this Agreement
violates or will violate the terms of any agreement, document or instrument to
which the Investor is a party or by which the Investor may be bound; and
(v) The Investor has valid and marketable title to such Investor's
AMS Shares, free and clear of all liens, claims, charges, security interests, or
other legal or equitable encumbrances or restrictions.
VII. Miscellaneous
7.1. Binding Agreement. This Agreement shall bind and inure to the
benefit of the respective parties hereto, their successors and assigns.
7.2. Headings. The headings and descriptive titles contained in
this Agreement are for convenience of reference only and do not modify, limit or
in any way define the interpretation or construction of the provisions of this
Agreement.
7.3. Survival of Representations and Warranties. The
representations and warranties made in this Agreement by the parties hereto
shall survive the execution and effectiveness hereof and any investigation or
observation made by any party.
7.4. Entire Agreement. This Agreement embodies the entire
agreement and understanding between the parties hereto and supersedes all prior
agreements or understandings relating to the subject matter hereof.
7.5. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of New York without
reference to any principles of conflicts of laws.
7.6. Amendments. This Agreement may not be altered or amended
except by a writing duly executed by any party against whom such alteration or
amendment is sought to be enforced.
7.7. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
7.8. Severability. Should any one or more of the provisions of
this Agreement be determined to be illegal, invalid or unenforceable, all of the
other provisions of this Agreement shall be given effect separately from such
provision or provisions and shall not be affected by any such determination.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
AMERICAN MEDICAL SYSTEMS HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
Title: President
WARBURG, XXXXXX EQUITY PARTNERS, L.P.
By: Warburg, Xxxxxx & Co.,
General Partner
By: /s/ Xxxxxxxxx Xxxxxxxxxx
-----------------------------------
Name: Xxxxxxxxx Xxxxxxxxxx
Title:
STANDBY FUND 1998
By: /s/ Buzz Xxxxxx
-----------------------------------
Name: Buzz Xxxxxx
Title: Managing Director
AMS INVESTORS
By: /s/ Buzz Xxxxxx
-----------------------------------
Name: Buzz Xxxxxx
Title: Managing Director
AMS INVESTORS II
By: /s/ Buzz Xxxxxx
-----------------------------------
Name: Buzz Xxxxxx
Title: Managing Director
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SECOND CENTURY GROWTH DEFERRED
COMPENSATION PLAN
By: XXXXX XXXXXXX INC.
By: /s/ Buzz Xxxxxx
-----------------------------------
Name: Buzz Xxxxxx
Title: Managing Director
VERTICAL FUND ASSOCIATES, L.P.
By: Vertical Group, L.P.,
General Partner
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: General Partner
UPPER LAKE GROWTH CAPITAL LLC
By:
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Managing Director
CRANE ISLAND VENTURES LLC
By:
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Managing Director
XXX X. XXXXXXXXX
/s/ Xxx X. Xxxxxxxxx
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XXXXXXX XXXXX
/s/ Xxxxxxx Xxxxx
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SCHEDULE 1
NEW SHARES IN THE CORPORATION TO BE ISSUED TO THE INVESTORS
American Medical Systems Holdings, Inc. will file a copy of Schedule 1
supplementally with the Securities and Exchange Commission upon their request.
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SCHEDULE 2
AMS SHARES TRANSFERRED TO THE CORPORATION
American Medical Systems Holdings, Inc. will file a copy of Schedule 2
supplementally with the Securities and Exchange Commission upon their request.
