Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
BY AND AMONG:
INVERNESS MEDICAL INNOVATIONS, INC.,
A DELAWARE CORPORATION;
INCA ACQUISITION, INC.,
A DELAWARE CORPORATION; AND
BIOSITE INCORPORATED,
A DELAWARE CORPORATION
DATED AS OF MAY 17, 2007
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TABLE OF CONTENTS
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SECTION 1. The Offer...................................................... A-6
1.1. The Offer.......................................................... A-6
1.2. Actions of Parent and Purchaser.................................... A-7
1.3. Actions of the Company............................................. A-7
1.4. Board of Directors................................................. A-8
1.5. Actions by Directors............................................... A-9
1.6. Top-Up Option...................................................... A-9
SECTION 2. The Merger; Effective Time..................................... A-10
2.1. Merger of the Purchaser into Company............................... A-10
2.2. Effect of the Merger............................................... A-10
2.3. Effective Time..................................................... A-10
2.4. Certificate of Incorporation and Bylaws; Officers and Directors.... A-10
2.5. Conversion of Company Shares....................................... A-10
2.6. Closing of the Company's Transfer Books............................ A-11
2.7. Payment for Company Shares......................................... A-11
2.8. Appraisal Rights................................................... A-12
2.9. Further Action..................................................... A-12
SECTION 3. Representations and Warranties of The Company.................. A-13
3.1. Due Organization and Good Standing; Subsidiaries................... A-13
3.2. Authority; Binding Nature of Agreement............................. A-13
3.3. Non-Contravention; Consents........................................ A-13
3.4. Certificate of Incorporation; Bylaws............................... A-14
3.5. Capitalization..................................................... A-14
3.6. SEC Filings; Financial Statements.................................. A-15
3.7. Information Supplied............................................... A-16
3.8. Schedule 14D-9..................................................... A-16
3.9. Internal Controls; Xxxxxxxx-Xxxxx Act.............................. A-17
3.10. Absence of Certain Changes......................................... A-17
3.11. Title to Assets; Real Property..................................... A-18
3.12. Intellectual Property Rights....................................... A-19
3.13. Contracts.......................................................... A-21
3.14. Compliance with Legal Requirements................................. A-23
3.15. Foreign Corrupt Practices and International Trade Sanctions........ A-23
3.16. Governmental Authorizations........................................ A-23
3.17. Legal Proceedings; Orders. As of the date of this Agreement:....... A-23
3.18. Regulatory Matters................................................. A-24
3.19. Product Recalls.................................................... A-25
3.20. Tax Matters........................................................ A-26
3.21. Employee Benefit Plans............................................. A-27
3.22. Labor Matters...................................................... A-30
3.23. Environmental Matters.............................................. A-30
3.24. Insurance.......................................................... X-00
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3.25. Transactions with Affiliates....................................... A-31
3.26. Vote Required...................................................... A-31
3.27. Section 203 of the DGCL; Company Rights Agreement.................. A-32
3.28. Opinion of Financial Advisor....................................... A-32
3.29. Brokers............................................................ A-32
3.30. Xxxxxxx Merger Agreement........................................... A-32
SECTION 4. Representations and Warranties of Parent and Purchaser......... A-32
4.1. Due Organization................................................... A-32
4.2. Authority; Binding Nature of Agreement............................. A-32
4.3. Non-Contravention; Consents........................................ A-33
4.4. Not an Interested Stockholder...................................... A-33
4.5. Financing.......................................................... A-33
4.6. Ownership of Company Shares........................................ A-34
4.7. Offer Documents.................................................... A-34
4.8. Information in Schedule 14D-9 and Proxy Statement.................. A-34
SECTION 5. Covenants...................................................... A-34
5.1. Interim Operations of the Company.................................. A-34
5.2. No Solicitation.................................................... A-38
5.3. Board Recommendation............................................... A-39
5.4. Meeting of the Company's Stockholders.............................. A-40
5.5. Filings; Other Action.............................................. A-41
5.6. Access............................................................. A-42
5.7. Interim Operations of Purchaser.................................... A-43
5.8. Publicity.......................................................... A-43
5.9. Stock Options/ESPP................................................. A-43
5.10. Other Employee Benefits............................................ A-44
5.11. Indemnification; Directors' and Officers' Insurance................ A-46
5.12. Section 16 Matters................................................. A-46
5.13. Rule 14d-10(d)..................................................... A-46
5.14. Cooperation Regarding Transition of Business....................... A-47
5.15. Termination of Certain Company Plans............................... A-47
5.16. Financing.......................................................... A-47
5.17. Tax Matters........................................................ A-48
5.18. Inverness Payment.................................................. A-48
SECTION 6. Conditions to Each Party's Obligation to Effect The Merger..... A-48
6.1. Stockholder Approval............................................... A-48
6.2. No Injunctions; Laws............................................... A-48
6.3. Government Consents................................................ A-48
6.4. Offers Purchased................................................... X-00
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SECTION 7. Termination.................................................... A-49
7.1. Termination........................................................ A-49
7.2. Effect of Termination.............................................. A-50
7.3. Termination Fee.................................................... A-51
SECTION 8. Miscellaneous Provisions....................................... A-51
8.1. Amendment.......................................................... A-51
8.2. Waiver............................................................. A-51
8.3. No Survival of Representations and Warranties...................... A-52
8.4. Entire Agreement; Counterparts..................................... A-52
8.5. Applicable Law; Jurisdiction; Waiver of Jury Trial................. A-52
8.6. Payment of Expenses................................................ A-53
8.7. Assignability; No Third Party Rights............................... A-53
8.8. Notices............................................................ A-53
8.9. Severability....................................................... A-54
8.10. Obligation of Parent............................................... A-54
8.11. Specific Performance............................................... A-54
8.12. Cumulative Remedies................................................ A-54
8.13. Representation by Counsel.......................................... A-54
8.14. Construction....................................................... A-54
Schedule A Products Under Development......................................
Annex I Offer Conditions................................................... A-57
Exhibit A Certain Definitions.............................................. A-58
Exhibit B Certificate of Incorporation of Surviving Corporation............ X-00
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XXXXXXXXX AND PLAN OF MERGER
THIS
AGREEMENT AND PLAN OF MERGER ("Agreement") is made and entered into as
of May 17, 2007, by and among INVERNESS MEDICAL INNOVATIONS, INC., a
Delaware
corporation ("Parent"); INCA ACQUISITION, INC., a
Delaware corporation and a
wholly-owned Subsidiary of Parent ("Purchaser"); and BIOSITE INCORPORATED, a
Delaware corporation (the "Company"). Certain capitalized terms used in this
Agreement are defined in Exhibit A.
RECITALS
WHEREAS, the board of directors of each of Parent, Purchaser and the
Company has approved the acquisition of the Company by Parent on the terms and
conditions set forth in this Agreement;
WHEREAS, on the terms and subject to the conditions set forth herein,
Purchaser has agreed to commence a tender offer (the "Offer") to purchase all
outstanding Company Shares, at a price of $92.50 per Company Share, in cash
without interest, plus if the Acceptance Time shall not have occurred on or
prior to the date that is forty-five days from the date hereof (or the next
succeeding business day) (the "Target Date"), an amount of cash equal to
$0.015205 per Company Share per day for each day during the period commencing on
the day following the Target Date through the Acceptance Time (such price, or
any higher price as may be paid in the Offer in accordance with this Agreement,
the "Offer Price");
WHEREAS, contemporaneously with the execution and delivery of this
Agreement, Parent and Purchaser have entered into Non-competition, Non-
disclosure and Intellectual Property Assignment Agreements, dated as of the date
hereof, with certain employees of the Company;
WHEREAS, following consummation of the Offer, on the terms and subject to
the conditions set forth herein Purchaser shall merge with and into the Company
(the "Merger") and each Company Share that is issued and outstanding immediately
prior to the Effective Time (other than Company Shares held in the treasury of
the Company or owned by Parent, Purchaser or any direct or indirect wholly-owned
Subsidiary of Parent or the Company immediately prior to the Effective Time,
which will be canceled with no consideration issued in exchange therefor, and
other than Appraisal Shares) will be canceled and converted into the right to
receive cash in an amount equal to the Offer Price (the "Merger Consideration"),
all upon the terms and conditions set forth herein;
WHEREAS, the Company Board has, on the terms and subject to the conditions
set forth herein, unanimously and duly adopted resolutions (i) determining that
the transactions contemplated by this Agreement are advisable and fair to, and
in the best interests of, the Company and its stockholders, (ii) adopting and
approving this Agreement and the transactions contemplated hereby, including the
Offer, the Merger and the "agreement of merger" (as such term is used in Section
251 of the
Delaware General Corporation Law (the "DGCL")), in accordance with
the DGCL, (iii) directing that the "agreement of merger" (as such term is used
in Section 251 of the DGCL) contained in this Agreement be submitted to the
stockholders of the Company for adoption (unless the Merger is consummated in
accordance with Section 253 of the DGCL as contemplated herein), and (iv)
recommending that the Company's stockholders accept the Offer, tender their
Company Shares to Purchaser pursuant to the Offer, and adopt the "agreement of
merger" (as such term is used in Section 251 of the DGCL) set forth in this
Agreement;
WHEREAS, the board of directors of Parent and Purchaser have, on the terms
and subject to the conditions set forth herein, unanimously approved and
declared advisable this Agreement and the transactions contemplated hereby,
including the Offer and the Merger, and Parent, in its capacity as the sole
stockholder of Purchaser, has adopted the "agreement of merger" set forth in
this Agreement, in each case, in accordance with the DGCL; and
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NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby,
Parent, Purchaser and the Company hereby agree as follows:
SECTION 1. The Offer
1.1. The Offer
(A) Provided that this Agreement shall not have previously been validly
terminated in accordance with Section 7, as promptly as practicable after the
date hereof, but in any event within nine calendar days (or the next succeeding
business day) after the date of this Agreement, Purchaser shall commence (within
the meaning of Rule 14d-2 under the Exchange Act) the Offer for all of the
outstanding Company Shares (including any Company Shares subject to repurchase
rights in favor of the Company) for consideration per Company Share consisting
of the Offer Price. (The date on which Purchaser commences the Offer, within the
meaning of Rule 14d-2 under the Exchange Act, is referred to in this Agreement
as the "Offer Commencement Date").
(B) As promptly as practicable on the later of: (i) the earliest date as of
which Purchaser is permitted under applicable Legal Requirements to accept for
payment Company Shares tendered pursuant to the Offer; and (ii) the earliest
date as of which each of the conditions set forth in Annex I (the "Offer
Conditions") shall have been satisfied or waived, Purchaser shall (and Parent
shall cause Purchaser to) accept for payment all Company Shares tendered
pursuant to the Offer (and not validly withdrawn). The obligation of Purchaser
to accept for payment Company Shares tendered pursuant to the Offer shall be
subject only to the satisfaction or waiver of each of the Offer Conditions (and
shall not be subject to any other conditions). As promptly as practicable after
the acceptance for payment of any Company Shares tendered pursuant to the Offer,
Purchaser shall pay for such Company Shares.
(C) Notwithstanding anything to the contrary contained in this Agreement,
neither Parent nor Purchaser shall (without the prior written consent of the
Company):
(i) change or waive the Minimum Condition (as defined in Annex I);
(ii) decrease the number of Company Shares sought to be purchased by
Purchaser in the Offer;
(iii) reduce the Offer Price;
(iv) extend or otherwise change the expiration date of the Offer
(except to the extent required pursuant to Section 1.1(d));
(v) change the form of consideration payable in the Offer; or amend,
modify or supplement any of the Offer Conditions or terms of the Offer in a
manner that adversely affects, or would reasonably be expected to adversely
affect, the holders of Company Shares.
(D) Unless extended as provided in this Agreement, the Offer shall expire
on the date (the "Initial Expiration Date") that is 20 business days (calculated
as set forth in Rule 14d-1(g)(3) under the Exchange Act) after the Offer
Commencement Date. Notwithstanding the foregoing, if, on the Initial Expiration
Date or any subsequent date as of which the Offer is scheduled to expire, any
Offer Condition is not satisfied and has not been waived, then Purchaser,
without the consent of the Company, may (and, to the extent requested by the
Company, from time to time, shall) extend (and re-extend) the Offer and its
expiration date for one or more periods ending no later than the Outside Date,
to permit such Offer Condition to be satisfied; provided, however, that no
individual extension shall be for a period of more than 10 business days without
the prior written consent of the Company. The Offer may be terminated prior to
its expiration date (as such expiration date may be extended and re-extended in
accordance with this Agreement), but only if this Agreement is validly
terminated in accordance with Section 7.
(E) Purchaser may, in its discretion, elect to provide for a subsequent
offering period (and one or more extensions thereof) (and, if immediately
following the Acceptance Time (as defined in Section 1.4(a)), Parent, Purchaser
and their respective Subsidiaries and Affiliates own more than 80% of the
Company Shares outstanding at that time (which shares beneficially owned shall
include shares tendered in the Offer and not withdrawn), to the extent requested
by the Company, Purchaser shall provide for a subsequent offering period
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of at least 10 business days) in accordance with Rule 14d-11 under the Exchange
Act following the Acceptance Time.
(F) The Offer Price shall be adjusted to the extent appropriate to reflect
the effect of any stock split, division or subdivision of shares, stock
dividend, reverse stock split, consolidation of shares, reclassification,
recapitalization or other similar transaction with respect to Company Shares
occurring or having a record date on or after the date of this Agreement and
prior to the payment by Purchaser for the Company Shares.
1.2. Actions of Parent and Purchaser.
(A) On the Offer Commencement Date Parent shall: (i) cause to be filed with
the SEC a Tender Offer Statement on Schedule TO with respect to the Offer, which
will contain Purchaser's offer to purchase and related letter of transmittal
(the forms of which shall be reasonably acceptable to the Company) and the
related form of summary advertisement (such Tender Offer Statement on Schedule
TO, all exhibits, amendments and supplements thereto being referred to
collectively in this Agreement as the "Offer Documents") and (ii) cause the
Offer Documents to be disseminated to holders of Company Shares to the extent
required by applicable Legal Requirements. Parent and Purchaser shall cause the
Offer Documents to comply in all material respects with the applicable
requirements of the Exchange Act and the rules and regulations thereunder. The
Company and its counsel shall be given a reasonable opportunity to review and
comment on the Offer Documents (including any amendment or supplement thereto)
prior to the filing thereof with the SEC. Parent and Purchaser shall promptly
provide the Company and its counsel with a copy or a description of any comments
received by Parent or Purchaser (or by counsel to Parent or Purchaser) from the
SEC or its staff with respect to the Offer Documents. Each of Parent and
Purchaser shall respond as promptly as practicable to any comments of the SEC or
its staff with respect to the Offer Documents or the Offer.
(B) To the extent required by the applicable requirements of the Exchange
Act and the rules and regulations thereunder: (i) each of Parent, Purchaser and
the Company shall correct promptly any information provided by it for use in the
Offer Documents if such information shall have become false or misleading in any
material respect; and (ii) each of Parent and Purchaser shall take all steps
necessary to promptly cause the Offer Documents, as supplemented or amended to
correct such information, to be filed with the SEC and to be disseminated to
holders of Company Shares. The Company shall promptly furnish to Parent all
information concerning the Company that may be reasonably requested by Parent in
connection with any action contemplated by Section 1.2(a) or (b). No
representation is made by Parent or Purchaser with respect to information
supplied by the Company for inclusion in the Offer Documents.
(C) Without limiting the generality of Section 8.10, Parent shall cause to
be provided to Purchaser all of the funds necessary to purchase any Company
Shares that Purchaser becomes obligated to purchase pursuant to the Offer, and
shall cause Purchaser to perform, on a timely basis, all of Purchaser's
obligations under this Agreement.
1.3. Actions of The Company.
(A) The Company hereby approves of and consents to the Offer.
(B) On the Offer Commencement Date, the Company shall file with the SEC and
(following or contemporaneously with the initial dissemination of the Offer
Documents to holders of Company Shares to the extent required by applicable
federal securities laws) disseminate to holders of Company Shares a
Solicitation/Recommendation Statement on Schedule 14D-9 (together with any
amendments or supplements thereto, the "Schedule 14D-9") that, subject to
Section 5.3(c), shall contain the Company Recommendation. Except in connection
with a Company Change in Recommendation made in accordance with Section 5.3(c),
Parent and its counsel shall be given a reasonable opportunity to review and
comment on the Schedule 14D-9 (including any amendment or supplement thereto)
prior to the filing thereof with the SEC. The Company shall: (i) promptly
provide Parent and its counsel with a copy of any written comments and a
description of any oral comments received by the Company (or its counsel) from
the SEC or its staff with respect to the Schedule 14D-9; (ii) except with
respect to disclosure made relating to a Company Change in Recommendation in
accordance with Section 5.3(c), give Parent and its counsel a reasonable
opportunity to review and comment on any response formulated in connection with
such comments prior to the filing thereof with the
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SEC; and (iii) respond promptly to any such comments. To the extent required by
the applicable requirements of the Exchange Act and the rules and regulations
thereunder: (A) each of Parent, Purchaser and the Company shall promptly correct
any information provided by it for use in the Schedule 14D-9 if such information
shall have become false or misleading in any material respect; and (B) the
Company shall take all steps necessary to cause the Schedule 14D-9, as
supplemented or amended to correct such information, to be filed with the SEC.
Parent and Purchaser shall promptly furnish to the Company all information
concerning Parent or Purchaser that may be reasonably requested in connection
with any action contemplated by this Section 1.3(b). To the extent requested by
the Company, Parent shall cause the Schedule 14D-9 to be mailed or otherwise
disseminated to the Company's stockholders together with the Offer Documents
disseminated to the Company's stockholders.
(C) In connection with the Offer, the Company shall instruct its transfer
agent to furnish to Purchaser a list, as of the most recent practicable date, of
the record holders of Company Shares and their addresses, as well as mailing
labels containing such names and addresses. The Company will furnish Purchaser
with such additional information (including any security position listings in
the Company's possession or reasonably obtainable by the Company) and assistance
as Purchaser may reasonably request for purposes of communicating the Offer to
the record holders and beneficial holders of Company Shares. All information
furnished in accordance with this Section 1.3(c) shall be held in confidence by
Parent and Purchaser in accordance with the requirements of the letter
agreement, dated April 11, 2007, between Parent and the Company, (the
"Confidentiality Agreement"), and shall be used by Parent and Purchaser only in
connection with the communication of the Offer and the dissemination of any
proxy or information statement relating to the Merger to the holders of Company
Shares.
1.4. Board of Directors.
(A) After the first time that Purchaser accepts for payment any Company
Shares tendered pursuant to the Offer (the "Acceptance Time"), and at all times
thereafter, the Company will, upon Parent's request and subject to compliance
with applicable Legal Requirements, take all actions necessary to cause persons
designated by Parent to become directors of the Company so that the total number
of such persons equals that number of directors, rounded up to the next whole
number, determined by multiplying: (i) the total number of directors on the
Company Board (after giving effect to the directors elected or designated by
Parent in accordance with this Section 1.4(a)); by (ii) the percentage that the
number of Company Shares beneficially owned by Parent, Purchaser or any of their
respective Affiliates bears to the total number of Company Shares outstanding at
the Acceptance Time (determined on a fully-diluted basis but disregarding any
unvested stock options and other unvested rights to acquire Company Shares). The
Company will take all actions necessary to permit Parent's designees to be
elected to the Company Board in accordance with this Section 1.4(a), including
using reasonable efforts to secure the resignation of directors, promptly
filling vacancies or newly created directorships on the Company Board,
increasing the size of the Company Board, and/or amending the bylaws of the
Company; provided, however, that prior to the Effective Time, the Company Board
shall always have at least two Continuing Directors. The Company shall, upon
Parent's request following the Acceptance Time, and at all times thereafter,
also cause Persons designated by Parent to constitute the same percentage
(rounded up to the next whole number) as is on the Company Board of (i) each
committee of the Company Board, (ii) each board of directors (or similar body)
of each Subsidiary of the Company and (iii) each committee (or similar body) of
each such board, in each case to the extent permitted by applicable Legal
Requirements and the Marketplace Rules of the NASDAQ Global Select Market. Upon
the election or appointment of all of Parent's designees to the Company Board in
accordance with this Section 1.4(a), the Company shall take all action necessary
to elect to be treated as a "controlled company" as defined by NASDAQ
Marketplace Rule 4350(c) and make all necessary filings and disclosures
associated with such status. The provisions of this Section 1.4(a) are in
addition to and shall not limit any rights that any of Purchaser, Parent or any
of their respective affiliates may have as a record holder or beneficial owner
of Company Shares as a matter of applicable Legal Requirements with respect to
the election of directors or otherwise.
(B) The Company's obligation to cause Parent's designees to be elected or
appointed to the Company Board shall be subject to Section 14(f) of the Exchange
Act and Rule 14f-1 thereunder. The Company shall promptly take all actions, and
shall include in the Schedule 14D-9 such information with respect to the
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Company and its officers and directors, as Section 14(f) of the Exchange Act and
Rule 14f-1 thereunder require in order to fulfill its obligations under this
Section 1.4, so long as Parent shall have provided to the Company all
information with respect to Parent and its designees, officers, directors and
Affiliates required by Section 14(f) of the Exchange Act and Rule 14f-1
thereunder. Parent shall promptly supply to the Company in writing, and shall be
solely responsible for, all such information.
1.5. Actions By Directors. Following the election or appointment of
Parent's designees to the Company Board pursuant to Section 1.4(a), and until
the Effective Time, the approval of a majority of the Continuing Directors shall
be required to authorize: (i) any amendment to or termination of this Agreement
by the Company; (ii) any amendment to the Company's certificate of
incorporation; (iii) any extension of time for the performance of any of the
obligations or other acts of Parent or Purchaser; (iv) any waiver of compliance
with any covenant of Parent or Purchaser or any condition to any obligation of
the Company or any waiver of any right of the Company under this Agreement; (v)
any Company Change in Recommendation; and (vi) any other consent or action by
the Company Board with respect to this Agreement, the Offer or the Merger. The
authorization of any such matter by a majority of the Continuing Directors shall
constitute the authorization of such matter by the Company Board, and no other
action on the part of the Company or any other director of the Company shall be
required to authorize such matter.
1.6. Top-up Option.
(A) The Company hereby grants to Purchaser an irrevocable option (the "Top-
Up Option"), exercisable only upon the terms and subject to the conditions set
forth herein, to purchase, at a price per share equal to the Offer Price, that
number of Company Shares (the "Top-Up Option Shares") equal to the lesser of (x)
the lowest number of Company Shares that, when added to the number of Company
Shares owned by Parent, Purchaser and their respective Subsidiaries and
Affiliates at the time of such exercise, shall constitute ten thousand (10,000)
shares more than 90% of the Company Shares then outstanding (after giving effect
to the issuance of the Top-Up Option Shares) and (y) an aggregate number of
Company Shares that is equal to 19.9% of the Company Shares issued and
outstanding as of the date hereof; provided, however, that the Top-Up Option
shall not be exercisable unless, (i) immediately prior to such exercise, Parent,
Purchaser and their respective Subsidiaries and Affiliates own more than 80% of
the Company Shares then outstanding and (ii) immediately after such exercise and
the issuance of Company Shares pursuant thereto, Parent, Purchaser and their
respective Subsidiaries and Affiliates own more than 90% of the Company Shares
then outstanding; and provided, further, that in no event shall the Top-Up
Option be exercisable for a number of Company Shares in excess of the Company's
total authorized and unissued Company Shares.
(B) Provided that no applicable Legal Requirement shall prohibit the
exercise of the Top-Up Option or the issuance of the Top-Up Option Shares
pursuant thereto, or otherwise make such exercise or issuance illegal, Purchaser
may exercise and re-exercise the Top-Up Option multiple times, in whole but not
in part, at any time or times after the Acceptance Time and prior to the earlier
to occur of (i) the Effective Time and (ii) the termination of this Agreement
pursuant to Section 7.
(C) Each time that Purchaser wishes to exercise the Top-Up Option,
Purchaser shall send to the Company a written notice (a "Top-Up Exercise
Notice") specifying the denominations of the certificate or certificates
evidencing the Top-Up Option Shares which the Purchaser wishes to receive, and
the place, time and date for the closing of the purchase and sale pursuant to
the Top-Up Option (a "Top-Up Closing"). The Company shall, promptly after
receipt of a Top-Up Exercise Notice, deliver a written notice to the Purchaser
confirming the number of Top-Up Option Shares and the aggregate purchase price
therefore. At each Top-Up Closing, Purchaser shall pay the Company the aggregate
price required to be paid for the Top-Up Option Shares issuable at such Top-Up
Closing, by delivery of, at Purchaser's option, (A) immediately available funds
by wire transfer to an account designated by the Company, (B) a promissory note,
bearing simple interest at 5% per annum, and due six months after the Top-Up
Closing, or (C) any combination thereof. At each Top-Up Closing, the Company
shall cause to be issued to Purchaser a certificate or certificates representing
the Top-Up Option Shares issuable at such Top-Up Closing. Certificates
representing Company Shares in connection with the Top-Up Option may include any
legends that are required by federal or state securities laws.
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SECTION 2. The Merger; Effective Time
2.1. Merger of The Purchaser Into Company. Upon the terms and subject to
the conditions set forth in this Agreement and in accordance with the DGCL, at
the Effective Time (as defined in Section 2.3), Purchaser shall be merged with
and into the Company, and the separate existence of Purchaser shall cease. The
Company will continue as the surviving corporation in the Merger (the "Surviving
Corporation").
2.2. Effect of The Merger. The Merger shall have the effects set forth in
this Agreement and in the applicable provisions of the DGCL. Without limiting
the generality of the foregoing and subject thereto, at the Effective Time, all
the property rights, privileges, immunities, powers and franchises of the
Company and Purchaser shall vest in the Surviving Corporation and all debts,
liabilities and duties of the Company and Purchaser shall become the debts,
liabilities and duties of the Surviving Corporation.
2.3. Effective Time. As soon as practicable after the satisfaction or
waiver of the conditions set forth in Section 6, the parties hereto shall cause
a properly executed certificate of merger conforming to the requirements of the
DGCL (the "Certificate of Merger") to be filed with the Secretary of State of
the State of
Delaware. The Merger shall become effective at the time the
Certificate of Merger is filed with the Secretary of State of the State of
Delaware, or at such later time as is agreed to by the parties hereto and
specified in the Certificate of Merger (the time at which the Merger becomes
effective being referred to in this Agreement as the "Effective Time"). At 10:00
a.m. (Pacific time) on the date on which the Certificate of Merger is to be so
filed, a closing shall be held at the offices of Xxxxxxx Procter LLP, Exchange
Place, 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 (or such other place or time
as Parent and the Company may jointly designate).
2.4. Certificate of Incorporation and Bylaws; Officers and
Directors. Unless otherwise jointly determined by Parent and the Company prior
to the Effective Time:
(A) the certificate of incorporation of the Surviving Corporation
shall be amended and restated as of the Effective Time to conform to
Exhibit B;
(B) subject to Section 5.11(a), the bylaws of the Surviving
Corporation shall be amended and restated as of the Effective Time to
conform to the bylaws of Purchaser as in effect immediately prior to the
Effective Time;
(C) the directors of the Surviving Corporation immediately after the
Effective Time shall be the respective individuals who are directors of
Purchaser immediately prior to the Effective Time; and
(D) the officers of the Surviving Corporation immediately after the
Effective Time shall be the respective individuals who are officers of
Purchaser immediately prior to the Effective Time.
2.5. Conversion of Company Shares.
(A) Subject to Section 2.8, at the Effective Time, by virtue of the Merger
and without any further action on the part of Parent, Purchaser, the Company or
any stockholder of the Company:
(i) any Company Shares then held by the Company or any wholly owned
Subsidiary of the Company (or held in the Company's treasury) shall cease
to exist, and no consideration shall be paid in exchange therefor;
(ii) any Company Shares then held by Parent, Purchaser or any other
wholly owned Subsidiary of Parent shall cease to exist, and no
consideration shall be paid in exchange therefor;
(iii) except as provided in clauses "(i)" and "(ii)" above, each
Company Share then outstanding (including any outstanding Company Shares
subject to any repurchase rights in favor of the Company, but excluding any
Appraisal Shares), shall be converted into the right to receive the Merger
Consideration, without interest; and
(iv) each share of common stock, par value $0.001 per share, of
Purchaser then outstanding shall be converted into one share of the common
stock of the Surviving Corporation.
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(B) The Merger Consideration shall be adjusted to the extent appropriate to
reflect the effect of any stock split, division or subdivision of shares, stock
dividend, reverse stock split, consolidation of shares, reclassification,
recapitalization or other similar transaction with respect to Company Shares
occurring or having a record date on or after the date of this Agreement and
prior to the Effective Time.
2.6. Closing of The Company's Transfer Books. At the Effective Time: (a)
all Company Shares outstanding immediately prior to the Effective Time shall
cease to exist as provided in Section 2.5 and all holders of certificates
representing Company Shares that were outstanding immediately prior to the
Effective Time shall cease to have any rights as stockholders of the Company;
and (b) the stock transfer books of the Company shall be closed with respect to
all Company Shares outstanding immediately prior to the Effective Time. No
further transfer of any such Company Shares shall be made on such stock transfer
books after the Effective Time. If, after the Effective Time, a valid
certificate previously representing any of such Company Shares (a "Company Stock
Certificate") is presented to the Payment Agent (as defined in Section 2.7(a))
or to the Surviving Corporation or Parent, such Company Stock Certificate shall
be canceled and shall be exchanged as provided in Section 2.7.
2.7. Payment for Company Shares.
(A) Prior to the Acceptance Time (i) Parent shall select a bank or trust
company (reasonably acceptable to the Company) to act as payment agent with
respect to the payment of the Merger Consideration (the "Payment Agent") and
(ii) Parent shall cause to be made available to the Payment Agent cash amounts
sufficient to enable the Payment Agent to make payments pursuant to Section 2.5
to holders of Company Shares outstanding immediately prior to the Effective
Time.
(B) Promptly after the Effective Time, Parent shall cause the Payment Agent
to mail to each Person who was, immediately prior to the Effective Time, a
holder of record of Company Shares described in Section 2.5(a)(iii) a form of
letter of transmittal (reasonably acceptable to the Company) and instructions
for use in effecting the surrender of Company Stock Certificates representing
such Company Shares in exchange for payment therefor. Parent shall ensure that,
upon surrender to the Payment Agent of each such Company Stock Certificate,
together with a properly executed letter of transmittal, the holder of such
Company Stock Certificate (or, under the circumstances described in Section
2.7(e), the transferee of the Company Shares represented by such Company Stock
Certificate) shall promptly receive in exchange therefor the consideration to
which such holder (or transferee) is entitled pursuant to Section 2.5(a)(iii).
(C) On or after the first anniversary of the Effective Time, Parent or the
Surviving Corporation shall be entitled to cause the Payment Agent to deliver to
Parent or the Surviving Corporation any funds made available by Parent to the
Payment Agent which have not been disbursed to holders of Company Stock
Certificates, and thereafter such holders shall be entitled to look only to
Parent and the Surviving Corporation with respect to the consideration payable
and issuable upon surrender of their Company Stock Certificates. Neither the
Payment Agent, Parent nor the Surviving Corporation shall be liable to any
holder of a Company Stock Certificate for any amount properly paid to a public
official pursuant to any applicable abandoned property or escheat law. If any
Company Stock Certificates shall not have been surrendered before the third
anniversary of the Effective Time (or immediately prior to such earlier date on
which any Merger Consideration payable in respect of such Company Stock
Certificates would otherwise escheat to or become the property of any
Governmental Entity), any such Merger Consideration in respect thereof shall, to
the extent permitted by applicable Legal Requirements, become the property of
Parent, free and clear of all claims or interest of any Person previously
entitled thereto.
(D) If any Company Stock Certificate shall have been lost, stolen or
destroyed, then, upon the making of an affidavit of that fact by the Person
claiming such Company Stock Certificate to be lost, stolen or destroyed in a
form reasonably satisfactory to Parent (together with an indemnity in form
reasonably satisfactory to Parent against any claim that may be made against the
Payment Agent or Parent or otherwise with respect to such certificate and, if
required by Parent, the posting by such Person of a bond in such reasonable
amount as Parent may direct to support such indemnity), Parent shall cause the
Payment Agent to pay in exchange for such lost, stolen or destroyed Company
Stock Certificate the consideration payable and issuable in respect thereof
pursuant to this Agreement.
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(E) In the event of a transfer of ownership of Company Shares which is not
registered in the transfer records of the Company, the consideration may be paid
and issued with respect to such Company Shares to a transferee of such Company
Shares if the Company Stock Certificate representing such Company Shares is
presented to the Payment Agent, accompanied by all documents reasonably required
by the Payment Agent to evidence and effect such transfer and to evidence that
any applicable stock transfer taxes relating to such transfer have been paid.
(F) The Surviving Corporation or Parent shall bear and pay all charges and
expenses, including those of the Payment Agent, incurred in connection with the
exchange of the Company Shares.
(G) Parent, the Surviving Corporation and the Payment Agent shall be
entitled to deduct and withhold from the consideration otherwise payable
pursuant to the Offer, the Merger or this Agreement to any holder of Company
Shares or Company Options that are to be cancelled and terminated in exchange
for a cash payment pursuant to Section 5.9(b) hereof, such amounts as Parent,
the Surviving Corporation or the Payment Agent are required to deduct and
withhold under the Code, or any Legal Requirement, with respect to the making of
such payment. To the extent that amounts are so withheld by Parent, the
Surviving Corporation or the Payment Agent, such withheld amounts shall be
treated for all purposes of this Agreement as having been paid to the holder of
Company Shares or Company Options in respect of whom such deduction and
withholding was made by Parent, the Surviving Corporation or the Payment Agent.
2.8. Appraisal Rights.
(A) Notwithstanding anything to the contrary contained in this Agreement,
any Company Shares that constitute Appraisal Shares shall not be converted into
or represent the right to receive payment in accordance with Section 2.5, and
each holder of Appraisal Shares shall be entitled only to such rights with
respect to such Appraisal Shares as may be granted to such holder pursuant to
Section 262 of the DGCL. From and after the Effective Time, a holder of
Appraisal Shares shall not have and shall not be entitled to exercise any of the
voting rights or other rights of a stockholder of the Surviving Corporation.
(B) The Company: (i) shall give Parent prompt written notice of any demand
by any stockholder of the Company for appraisal of such stockholder's Company
Shares pursuant to Section 262 of the DGCL; and (ii) shall give Parent the
opportunity to participate in all negotiations and proceedings with respect to
any such demand. Except with the prior written consent of Purchaser (which
consent may be withheld in the sole and absolute discretion of Purchaser) or as
may otherwise be required by applicable Legal Requirements, the Company shall
not make any payment with respect to, or settle or offer to settle, any such
demands.
(C) For purposes of this Agreement, "Appraisal Shares" shall refer to any
Company Shares outstanding immediately prior to the Effective Time that are held
by stockholders who have preserved their appraisal rights under Section 262 of
the DGCL with respect to such Company Shares. If any holder of Appraisal Shares
shall fail to perfect or shall otherwise lose such holder's right of appraisal
under Section 262 of the DGCL, then: (i) any right of such holder with respect
to such Company Shares as may be granted to such holder pursuant to Section 262
of the DGCL shall be extinguished; and (ii) such Appraisal Shares shall
automatically be converted into and shall represent only the right to receive
(upon the surrender of the Company Stock Certificate(s) representing such
Appraisal Shares) payment for such Appraisal Shares in accordance with Section
2.5.
2.9. Further Action. If, at any time after the Effective Time, any
further action is necessary to carry out the purposes of this Agreement, the
officers and directors of the Surviving Corporation and Parent shall be
authorized (in the name of Purchaser, in the name of the Company or otherwise)
to take such action.
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SECTION 3. Representations and Warranties of The Company
The Company represents and warrants to Parent and Purchaser that, except as
set forth in the disclosure schedule delivered to Parent on the date of this
Agreement (the "Company Disclosure Schedule"):
3.1. Due Organization and Good Standing; Subsidiaries.
(A) Each of the Company and the Company Subsidiaries is a corporation duly
organized, validly existing and (where such concept is recognized under the laws
of the jurisdiction in which it is incorporated) in good standing under the laws
of the jurisdiction in which it is incorporated, and has all requisite corporate
power and authority necessary to own, lease and operate its properties and to
carry on its business as it is now being conducted. The Company and each of the
Company Subsidiaries is duly qualified or licensed to do business and is in good
standing in each state in which the nature of the business conducted by it makes
such qualification or license necessary, except where the failure to be so
qualified does not have a Company Material Adverse Effect.
(B) Part 3.1 of the Company Disclosure Schedule lists all Company
Subsidiaries in existence as of the date of this Agreement, together with the
jurisdiction of organization of each such Subsidiary and, if the Company,
together with the Company Subsidiaries, does not own all of the outstanding
equity interests of such Company Subsidiary, the percentage of equity interests
of such Company Subsidiary owned by the Company and the Company Subsidiaries.
All the outstanding shares of capital stock and other equity interests of each
Company Subsidiary have been duly authorized and validly issued, are fully paid
and nonassessable are not subject to any purchase option, call option, right of
first refusal, preemptive right, subscription right or any similar right
entitling the holders thereof to acquire shares of capital stock or other equity
interests from such Company Subsidiary under any provision of the Legal
Requirements pursuant to which such Company Subsidiary is formed, such Company
Subsidiary's organizational documents or any Contract to which such Company
Subsidiary is a party or is otherwise bound, and are owned directly or
indirectly by the Company free and clear of all liens, pledges or Encumbrances,
except for Permitted Encumbrances. Except for the capital stock of, or other
equity interests in, the Company Subsidiaries, and except for marketable
securities held from time to time by the Company in connection with its normal
cash management activities, the Company does not own, directly or indirectly,
any capital stock of, or other equity or voting interests in, any Person.
3.2. Authority; Binding Nature of Agreement. The Company has the
requisite corporate power and authority to enter into and to perform its
obligations under this Agreement. The Company Board, at a meeting duly called
and held, has unanimously: (a) determined that this Agreement, the Offer, the
Merger, the Top-Up Option and the other transactions contemplated by this
Agreement are fair to, and in the best interests of, the Company's stockholders;
(b) duly and validly authorized and approved the execution, delivery and
performance of this Agreement by the Company; (c) declared that this Agreement
is advisable; and (d) resolved to make the Company Recommendation. The execution
and delivery of this Agreement by the Company and the consummation by the
Company of the Merger have been duly authorized by all necessary corporate
action on the part of the Company, and no other corporate proceedings on the
part of the Company are necessary to authorize this Agreement other than, with
respect to the Merger, the adoption of this Agreement by the holders of a
majority of the then outstanding Company Shares (if required under the DGCL) and
the filing of the appropriate merger documents as required by the DGCL. This
Agreement has been duly executed and delivered on behalf of the Company and,
assuming the due authorization, execution and delivery of this Agreement by
Parent and Purchaser, constitutes the valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, subject
to (i) laws of general application relating to bankruptcy, insolvency and the
relief of debtors, and (ii) rules of law governing specific performance,
injunctive relief and other equitable remedies.
3.3. Non-Contravention; Consents. Except as set forth on Part 3.3 of the
Company Disclosure Schedule, the execution and delivery of this Agreement by the
Company, the acquisition of Company Shares by Purchaser pursuant to the Offer
and the consummation by the Company of the Merger and the other transactions
contemplated by this Agreement will not: (a) cause a violation of any of the
provisions of the certificate of incorporation or bylaws of the Company or any
of the equivalent organizational documents of
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the Company Subsidiaries; (b) cause a violation by the Company or any of the
Company Subsidiaries of any Legal Requirement applicable to the business of the
Company or any of the Company Subsidiaries; or (c) result in a modification,
violation or breach of, or constitute (with or without notice or lapse of time
or both) a default (or give rise to any right, including any right of
termination, amendment, cancellation or acceleration) under, any of the terms,
conditions or provisions of any Contract to which the Company or any Company
Subsidiary is a party or by which its properties or assets are otherwise bound;
except in the case of clauses (b) and (c) does not result in a Company Material
Adverse Effect. Except as may be required by the Exchange Act, the DGCL, the HSR
Act or the antitrust or competition laws of foreign jurisdictions, the Company
is not required to make any filing with, or to obtain any consent from, any
Person in connection with the execution and delivery of this Agreement by the
Company or the consummation by the Company of the Merger, except where the
failure to make any such filing or obtain any such consent does not result in a
Company Material Adverse Effect.
3.4. Certificate of Incorporation; Bylaws. The Company has delivered or
made available to Parent complete and correct copies of the certificate of
incorporation and bylaws of the Company, including all amendments thereto. The
Company is not in violation of its certificate of incorporation or bylaws.
3.5. Capitalization.
(A) The authorized capital stock of the Company consists of 60,000,000
Company Shares and 5,000,000 shares of preferred stock, par value $0.01 per
share ("Preferred Shares"), of which 25,000 shares have been designated Series A
Participating Preferred Stock and reserved for issuance in connection with the
Company Rights. As of May 11, 2007: (i) 17,142,895 Company Shares were issued
and outstanding; (ii) no Preferred Shares were outstanding; (iii) no Company
Shares or Preferred Shares were issued and held in the treasury of the Company
or otherwise owned, directly or indirectly, by the Company, (iv) 3,460,903
Company Shares were reserved for future issuance pursuant to the Company Option
Plans, of which 3,157,528 Company Shares were subject to outstanding Company
Options; and (v) 404,853 Company Shares were reserved for future issuance
pursuant to the Company's Amended and Restated Employee Stock Purchase Plan (the
"Company ESPP"). The Company has delivered or made available to Parent complete
and correct copies of: (A) the Company Option Plans, which cover the stock
options granted by the Company that are outstanding as of the date of this
Agreement; and (B) the Company ESPP. The treatment of Company Options set forth
in Section 5.9 does not require the approval or consent of any holder of Company
Options and does not conflict with the terms of the Company Option Plans.
(B) All of the outstanding Company Shares are duly authorized, validly
issued, fully paid and nonassessable. No class of capital stock of the Company
or any Company Subsidiary is entitled to any purchase option, call option, right
of first refusal, preemptive right, subscription right or any similar right
entitling the holders thereof to acquire capital stock or other equity interests
from the Company under any provision of the DGCL, the Company's certificate of
incorporation, the Company's bylaws or any Contract to which the Company is a
party or is otherwise bound. All of the Company Shares that may be issued
pursuant to the Company Options or under the Company ESPP will be, when issued,
duly authorized, validly issued, fully paid and nonassessable and not subject to
any purchase option, call option, right of first refusal, preemptive right,
subscription right or any similar right entitling the holders thereof to acquire
capital stock or other equity interests from the Company under any provision of
the DGCL, the Company's certificate of incorporation, the Company's bylaws or
any Contract to which the Company is a party or is otherwise bound.
(C) Part 3.5 of the Company Disclosure Schedule contains a true and
complete list, as of May 11, 2007, of all outstanding options to purchase
Company Shares, whether or not granted under the Company Option Plans, including
the date of grant, the number of Company Shares subject to each such option, the
exercise price per share, the maximum term of each such option and, where
applicable, the Company Option Plan under which such option was granted. All
outstanding Company Options are evidenced by stock option agreements. From May
11, 2007 until the date of this Agreement, the Company has not issued, or
reserved for issuance, any capital stock or any options, warrants or other
rights to acquire capital stock or other equity interests (or securities
convertible into or exercisable or exchangeable for capital stock or other
equity
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interests), other than the issuance of Company Shares pursuant to the exercise
of Company Options that were outstanding as of the close of business on May 11,
2007.
(D) Except as set forth above in this Section 3.5 or in Part 3.5 of the
Company Disclosure Schedule, as of the date of this Agreement, there are not any
options, warrants, rights, convertible or exchangeable securities, "phantom"
stock rights, stock appreciation rights, stock-based performance units,
commitments, Contracts, arrangements or undertakings of any kind to which the
Company or any of the Company Subsidiaries is a party or by which any of them is
bound (i) obligating the Company or any of the Company Subsidiaries to issue,
deliver or sell, or cause to be issued, delivered or sold, equity interests in
the Company or any of the Company Subsidiaries, (ii) obligating the Company or
any of the Company Subsidiaries to issue, grant, extend or enter into any such
option, warrant, right, security, unit commitment, Contract, arrangement or
undertaking or (iii) that give any Person the right to receive any economic
benefit or right similar to or derived from the economic benefits and rights
occurring to holders of Company Shares. There are no outstanding obligations of
the Company or any of the Company Subsidiaries to repurchase, redeem or
otherwise acquire any shares of capital stock or other equity interests of the
Company or any of the Company Subsidiaries. There are no bonds, debentures,
notes or other Indebtedness of the Company or the Company Subsidiaries having
the right to vote (or convertible into, or exchangeable for, securities having
the right to vote) on any matters on which stockholders of the Company may vote.
(E) There are no voting trusts or other agreements or understandings to
which the Company or any Company Subsidiary is a party or of which, as of the
date of this Agreement, the Company has knowledge, with respect to the voting of
Company Shares or any capital stock of, or other equity interest of the Company
or any of the Company Subsidiaries.
3.6. Sec Filings; Financial Statements.
(A) The Company has filed or furnished (as required or permitted) all
forms, reports, schedules, proxy statements, registration statements and other
documents (including exhibits and other information incorporated therein)
required to be filed by the Company with the SEC since January 1, 2003 (the
"Company SEC Documents"). As of the time it became effective (with respect to
filings made under the Securities Act) and as of the time it was filed with or
furnished to the SEC (with respect to filings made under the Exchange Act and,
with respect to proxy statements, at the time such proxy statement was mailed to
stockholders of the Company) (or, with respect to filings made under the
Exchange Act and amended or superseded by a filing prior to the date of this
Agreement, then on the date of the filing or furnishing of suc amendment or,
with respect to an amendment to a proxy statement, on the date such amendment to
the proxy statement was mailed to stockholders of the Company, if applicable):
(i) each of the Company SEC Documents complied in all material respects with the
applicable requirements of the Securities Act or the Exchange Act (as the case
may be); and (ii) the Company SEC Documents did not (and with respect to Company
SEC Documents filed after the date of this Agreement, will not) contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. The
Company has made available to Parent copies of all comment letters received by
the Company from the SEC since January 1, 2003, and relating to the Company SEC
Documents, together with all written responses of the Company thereto. As of the
date of this Agreement, to the Company's knowledge, there are no outstanding or
unresolved comments in such comment letters received by the Company from the
SEC. As of the date of this Agreement, to the knowledge of the Company none of
the SEC Documents is the subject of any ongoing review by the SEC. No Company
Subsidiary is, or has ever been, required to file any reports, schedules, proxy
statements, registration statements or other documents with the SEC.
(B) The financial statements (including any related notes) contained in the
Company SEC Documents fairly present, in all material respects, the consolidated
financial position of the Company and the Company Subsidiaries as of the
respective dates thereof and the consolidated results of operations of the
Company and the Company Subsidiaries for the periods covered thereby, have been
prepared in accordance with GAAP applied on a consistent basis throughout the
periods covered (except as may be indicated in the notes to such financial
statements or, in the case of unaudited statements, as permitted by Form 10-Q of
the SEC, and
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except that unaudited financial statements are subject to normal year-end audit
adjustments) and complied at the time they were filed as to form in all material
respects with the applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto at the time of filing.
(C) Neither the Company nor any Company Subsidiary is a party to, or has
any commitment to become a party to, any joint venture, off-balance sheet
partnership or any similar Contract (including any Contract relating to any
transaction or relationship between or among the Company and any Company
Subsidiary, on the one hand, and any unconsolidated affiliate, including any
structured finance, special purpose or limited purpose Entity or Person, on the
other hand, or any "off-balance sheet arrangements" (as defined in Item 303(a)
of Regulation S-K of the SEC)), where the result, purpose or intended effect of
such Contract is to avoid disclosure of any material transaction involving, or
material liabilities of, the Company or any Company Subsidiary in the Company's
or any Company Subsidiary's published financial statements or other Company SEC
Documents.
(D) The independent registered public accounting firm engaged to express
its opinion with respect to the financial statements included in the Company SEC
Documents is, and has been throughout the periods covered thereby "independent"
within the meaning of Rule 2-01 of Regulation S-X. Ernst & Young, LLP has not
resigned or been dismissed as an independent public accountant of the Company as
a result of or in connection with any disagreement with the Company on a matter
of accounting principles or practices, financial statement disclosure or
auditing scope or procedure.
(E) Neither the Company nor any of the Company Subsidiaries (taken together
as a whole) has any material liabilities of any nature (whether accrued,
absolute, contingent determined or otherwise) required by GAAP to be recognized
or disclosed on a consolidated balance sheet of the Company or any Company
Subsidiary or in the notes thereto, except for: (i) liabilities disclosed in the
financial statements (including any related notes) contained in the Company SEC
Documents filed prior to the date of this Agreement; (ii) for liabilities and
obligations incurred under any Material Contract other than liabilities or
obligations due to breaches thereunder; and (iii) liabilities incurred in the
Ordinary Course of Business since December 31, 2006 that could not reasonably be
expected to, individually or in the aggregate, have a Company Material Adverse
Effect.
3.7. Information Supplied. None of the information included or
incorporated by reference in the Proxy Statement will, at the date it is first
mailed to the Company's stockholders, at the time of the Special Meeting or at
the time of any amendment or supplement thereof, contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading, except that no
representation, warranty or covenant is made by the Company with respect to
statements made or incorporated by reference therein based on written
information supplied by Parent or Purchaser expressly for inclusion or
incorporation by reference in the Proxy Statement. The Proxy Statement will
comply as to form in all material respects with the requirements of the Exchange
Act. The written information provided by or on behalf of the Company expressly
for inclusion or incorporation by reference in the Offer Documents shall not, at
the time the Offer Documents are mailed to the stockholders of the Company, or
at any other time at or prior to the Acceptance Time, contain an untrue
statement of material fact or omit to state a material fact required to be
stated therein, or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading.
3.8. Schedule 14D-9. The Schedule 14D-9 will comply as to form in all
material respects with the requirements of the Exchange Act and, on the date
filed with the SEC and on the date first published, sent or given to the
Company's stockholders, the Schedule 14D-9 will not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, except that no
representation, warranty or covenant is made by the Company with respect to
statements made or incorporated by reference therein based on any written
information supplied by Parent or Purchaser expressly for inclusion or
incorporation by reference in the Schedule 14D-9.
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3.9. Internal Controls; Xxxxxxxx-Xxxxx Act.
(A) The Company has designed and maintains a system of internal control
over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the
Exchange Act) sufficient to provide reasonable assurance regarding the
reliability of financial reporting. The Company (i) has designed and maintains
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
of the Exchange Act) to ensure that material information required to be
disclosed by the Company in the reports that it files or submits under the
Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the SEC's rules and forms and is accumulated and
communicated to the Company's management as appropriate to allow timely
decisions regarding required disclosure and (ii) has disclosed to the Company's
auditors and the audit committee of the Company Board (and made summaries of
such disclosures available to Parent) (A) any significant deficiencies and
material weaknesses in the design or operation of internal control over
financial reporting that are reasonably likely to adversely affect in any
material respect the Company's ability to record, process, summarize and report
financial information and (B) any fraud, whether or not material, that involves
management or other employees who have a significant role in the Company's
internal controls over financial reporting. The Company is in compliance in all
material respects with all effective provisions of the Xxxxxxxx-Xxxxx Act.
(B) Each of the principal executive officer of the Company and the
principal financial officer of the Company (or each former principal executive
officer of the Company and each former principal financial officer of the
Company, as applicable) has made all certifications required by Rule 13a-14 or
15d-14 under the Exchange Act or Sections 302 and 906 of the Sarbanes Oxley Act
and the rules and regulations of the SEC promulgated thereunder with respect to
the Company SEC Documents, and the statements contained in such certifications
are true and correct. For purposes of this Section 3.9(b), "principal executive
officer" and "principal financial officer" shall have the meanings given to such
terms in the Xxxxxxxx-Xxxxx Act. Neither the Company nor any Company Subsidiary
has outstanding, or has arranged any outstanding, "extensions of credit" to
directors or executive officers within the meaning of Section 402 of the
Sarbanes Oxley-Act.
(C) Neither the Company nor any of the Company Subsidiaries nor, to the
Company's knowledge, any director, officer, auditor, accountant, consultant or
representative of the Company or any of the Company Subsidiaries has received or
otherwise had or obtained knowledge of any substantive and material complaint,
allegation, assertion or claim, whether written or oral, that the Company or any
of the Company Subsidiaries has engaged in questionable accounting or auditing
practices. No current or former attorney representing the Company or any of the
Company Subsidiaries has reported evidence of a material violation of securities
laws, breach of fiduciary duty or similar violation by the Company or any of its
officers, directors, employees or agents to the current Company Board or any
committee thereof or to any current director or executive officer of the
Company.
(D) To the Company's knowledge, no employee of the Company or any of the
Company's Subsidiaries has provided information to any law enforcement agency
regarding the commission or possible commission of any crime or the violation or
possible violation of any applicable Legal Requirements described in Section 806
of the Xxxxxxxx-Xxxxx Act by the Company or any of the Company Subsidiaries.
Neither the Company nor any of the Company's Subsidiaries nor, to the knowledge
of the Company, any director, officer, employee, contractor, subcontractor or
agent of the Company or any such Subsidiary has discharged, demoted, suspended,
threatened, harassed or in any other manner discriminated against an employee of
the Company or any of the Company's Subsidiaries in the terms and conditions of
employment because of any lawful act of such employee described in Section 806
of the Xxxxxxxx-Xxxxx Act.
3.10. Absence of Certain Changes.
(A) Between December 31, 2006 and the date of this Agreement, neither the
Company nor any Company Subsidiary has: (i) suffered any Company Material
Adverse Effect; (ii) conducted its respective business other than in the
Ordinary Course of Business.
(B) Between December 31, 2006 and the date of this Agreement, neither the
Company nor any Company Subsidiary has, except as disclosed in Part 3.10(b) of
the Company Disclosure Schedule taken any action that,
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if taken during the period from the date of this Agreement through the Effective
Time, would constitute a breach of Section 5.1.
3.11. Title to Assets; Real Property.
(A) The Company or one of the Company Subsidiaries owns, and has good title
to, each of the tangible assets reflected as owned by the Company or the Company
Subsidiaries on the Latest Balance Sheet (except for tangible assets sold or
disposed of since that date in the Ordinary Course of Business) free of any
liens or Encumbrances (other than Permitted Encumbrances). The material
properties and tangible assets owned or leased by the Company and the Company
Subsidiaries are sufficient (subject to normal wear and tear) to operate their
businesses in substantially the same manner as they are currently conducted by
the Company and the Company Subsidiaries.
(B) Part 3.11(b) of the Company Disclosure Schedule lists each real
property that is owned by the Company or any Company Subsidiary as of the date
of this Agreement (such property, together with any real property acquired by
the Company after the date of this Agreement (which will have been so acquired
in compliance with Section 5.1), the "Owned Real Property"). Except as disclosed
in Part 3.11(b) of the Company Disclosure Schedule, each of the Company and or a
Company Subsidiary has good title to the Owned Real Property, free and clear of
all Encumbrances, other than Permitted Encumbrances. Except as set forth on Part
3.11(b) of the Company Disclosure Schedule, (i) there are no outstanding
Contracts for the sale of any of the Owned Real Property, (ii) there are no
leases, subleases, licenses, concessions or any other Contracts granting to any
Person other than the Company or any of the Company Subsidiaries any right to
the possession, use, occupancy or enjoyment of any of the Owned Real Property or
any portion thereof and (iii) there are no easements, covenants, rights-of-way
and other similar restrictions of record, if any, that, individually or in the
aggregate, materially impair, or would reasonably be expected to impair
materially, the continued use and operation of the Owned Real Property to which
they relate in the conduct of the business of the Company and the Company
Subsidiaries as presently conducted. Any reciprocal easements, operating
agreements, option agreements, rights of first refusal or rights of first offer
with respect to any Owned Real Property are set forth in Part 3.11(b) of the
Company Disclosure Schedule. There are no physical conditions or defects at any
of the Owned Real Property which materially impair or would be reasonably
expected to materially impair the continued operation of such facility as
presently conducted. The present use of the land, buildings, structures and
improvements on the Owned Real Property are, in all material respects, in
conformity with all Legal Requirements, including all applicable zoning laws,
ordinances and regulations and with all registered deeds or other restrictions
of record, and neither the Company nor any of the Company Subsidiaries, as the
case may be, has received any written notice of violation thereof, except for
such nonconformities or violations that do not, and would not, individually or
in the aggregate, reasonably be expected to materially interfere with the
operations at the Owned Real Property as presently conducted (or as would be
conducted at full capacity). Neither the Company nor any of the Company
Subsidiaries, as the case may be, has received any written notice of any
material conflict or dispute with any Governmental Entity or other Person
relating to any Owned Real Property or the activities thereon, other than where
there is no current or reasonably likely material interference with the
operations at the Owned Real Property as presently conducted (or as would be
conducted at full capacity). As of the date hereof, there are no existing, or to
the knowledge of the Company, any threatened or pending condemnation or eminent
domain proceedings (or proceedings in lieu thereof) affecting the Owned Real
Property or any portion thereof.
(C) Part 3.11(c) of the Company Disclosure Schedule lists each real
property that is leased by the Company or any Company Subsidiary as of the date
of this Agreement, pursuant to which the Company or such Company Subsidiary is
required to pay a monthly rental in excess of $50,000 (such property, together
with any such lease entered into by the Company or a Company Subsidiary after
the date of this Agreement which will have been so acquired in compliance with
Section 5.1, the "Leased Real Property"). Except as disclosed in Part 3.11(c) of
the Company Disclosure Schedule, the Company or a Company Subsidiary holds a
valid leasehold interest in the Leased Real Property free and clear of all
Encumbrances, other than Permitted Encumbrances or Encumbrances encumbering a
lessor's interest in the Leased Real Property incurred by the lessor. Each of
the leases under which the Leased Real Property is held (A) is in full force and
effect, and (B) is enforceable against the Company or the Company Subsidiaries
and the other party or parties thereto, in
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accordance with its terms, except as the same may be limited by (i) laws of
general application relating to bankruptcy, insolvency and the relief of
debtors, and (ii) rules of law governing specific performance, injunctive relief
and other equitable remedies. No material default exists under any lease under
which the Leased Real Property is held to which the Company or any of the
Company Subsidiaries is a party and no circumstance exists which, with the
giving of notice, the passage of time or both, is reasonably likely to result in
such a default. Except as set forth on Part 3.11(c) of the Company Disclosure
Schedule, there are no material subleases, licenses, concessions or any other
Contracts or agreements to which the Company or any of the Company Subsidiaries
is a party or by which any of them is otherwise bound granting to any Person or
entity other than the Company or any of the Company Subsidiaries any right to
the possession, use, occupancy or enjoyment of any of the Leased Real Property
or any portion thereof. Any material reciprocal easements, operating agreements,
option agreements, rights of first refusal or rights of first offer to which the
Company or any of the Company Subsidiaries is a party or by which any of them is
otherwise bound with respect to any Leased Real Property are set forth in Part
3.11(c) of the Company Disclosure Schedule. There are no physical conditions or
defects at any of the Leased Real Property which materially impair or would be
reasonably expected to materially impair the continued operation of such
facility as presently conducted. As of the date hereof, there are no existing,
or to the knowledge of the Company, any threatened or pending condemnation or
eminent domain proceedings (or proceedings in lieu thereof) affecting the Leased
Real Property or any portion thereof. The present use of the land, buildings,
structures and improvements on the Leased Real Property are, to the knowledge of
the Company, in conformity with all Legal Requirements, including all applicable
zoning laws, ordinances and regulations and with all registered deeds or other
restrictions of record, and neither the Company nor any of the Company
Subsidiaries, as the case may be, has received any written notice of violation
thereof, except for such nonconformities or violations that would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect. Neither the Company nor any of the Company
Subsidiaries, as the case may be, has received any written notice of any
conflict or dispute with any Governmental Entity or other Person relating to any
Leased Real Property or the activities thereon, other than where there is no
current or reasonably likely material interference with the operations at the
Leased Real Property as presently conducted (or as would be conducted at full
capacity).
3.12. Intellectual Property Rights.
(A) Part 3.12(a) of the Company Disclosure Schedule sets forth with respect
to the Intellectual Property Rights owned by the Company or the Company
Subsidiaries: (i) for each patent and patent application, the patent number or
application serial number for each jurisdiction in which the patent or
application has been filed, the date filed or issued, and the present status
thereof, as maintained in records by the Company, a Company Subsidiary, or its
or their outside intellectual property counsel; (ii) for each registered
trademark, trade name or service xxxx, the application serial number or
registration number, for each country, province and state, and the class of
goods covered, as maintained in records by the Company, a Company Subsidiary, or
its or their outside intellectual property counsel; and (iii) for any URL or
domain name, the registration date, any renewal date and name of registry, as
maintained in records by the Company, a Company Subsidiary, or its or their
outside intellectual property counsel. As of the date of this Agreement, to the
knowledge of the Company, all registered trademarks, issued patents and
registered copyrights owned by the Company or a Company Subsidiary are valid and
subsisting. To the knowledge of the Company, neither the Company nor any Company
Subsidiary is engaging in or has engaged at any time in any patent or copyright
misuse or any fraud or inequitable conduct, including with respect to its patent
applications, trademark applications or copyright registration applications.
(B) To the knowledge of the Company, the Intellectual Property Rights and
Technology owned or licensed by the Company and the Company Subsidiaries, or
that the Company or any Company Subsidiary has a right to use pursuant to a
covenant not to xxx, constitute all Intellectual Property Rights and Technology
used in or necessary for the conduct of the Company's or the Company
Subsidiaries' business as presently conducted, including the design,
manufacture, license, sale and support of all (i) Products Under Development or
(ii) products currently offered for sale by the Company or a Company Subsidiary.
(C) Except pursuant to licenses or with respect to the subject matter
listed in Part 3.12(c) of the Company Disclosure Schedule, to the knowledge of
the Company neither the Company nor any Company Subsidiary is
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compensating or has any obligation to compensate or account to any Person for
the use of any of the Company's or any Company Subsidiary's Intellectual
Property Rights or Technology used in the design, manufacture, license, sale and
support of all (i) Products Under Development or (ii) products currently offered
for sale by the Company and the Company Subsidiaries.
(D) The Company or each Company Subsidiary (i) owns all right, title and
interest in and to the Intellectual Property Rights and Technology owned or
purported to be owned by the Company, including the Intellectual Property Rights
and Technology listed on Part 3.12(a) of the Company Disclosure Schedule, free
and clear of any mortgage, easement, lien, pledge (including any negative
pledge) or security interest (other than Permitted Encumbrances); and (ii) has a
valid and enforceable right or license to use all other Intellectual Property
Rights and Technology used in the design, manufacture, license, sale and support
of all products currently offered for sale or with respect to Products Under
Development by the Company and the Company Subsidiaries, and, except as
disclosed in Part 3.12(d) of the Company Disclosure Schedule, all such licensed
Intellectual Property Rights and rights to use Technology will not cease to be
valid and enforceable rights of the Company or the applicable Company Subsidiary
by reason of the execution, delivery and performance of this Agreement, or by
any ancillary agreements executed in connection with this Agreement, or the
consummation of the transactions contemplated hereby or thereby.
(E) Except as disclosed in Part 3.12(e) of the Company Disclosure Schedule,
no Legal Proceedings are pending against the Company or a Company Subsidiary,
or, to the knowledge of the Company, are threatened, that challenge the right of
Company or the Company Subsidiaries with respect to the use or ownership of the
Intellectual Property Rights or Technology owned or licensed by the Company and
the Company Subsidiaries. Without limiting the foregoing, and except as
disclosed in Part 3.12(e) of the Company Disclosure Schedule, no interference,
opposition, reexamination, or other Legal Proceeding initiated by a third party
is pending against the Company or a Company Subsidiary, or, to the Company's
knowledge, is threatened, or has during the past three years been threatened but
did not develop into a Legal Proceeding in which the scope, validity, or
enforceability of any of Company's or the Company Subsidiaries' Intellectual
Property Rights is being or has been challenged. Except as disclosed in Part
3.12(e) of the Company Disclosure Schedule, to the knowledge of the Company,
neither the Company's nor any Company Subsidiary's past or present use of
Intellectual Property Rights or Technology owned by the Company or any Company
Subsidiary infringes upon or misappropriates, breaches or otherwise conflicts
with the Intellectual Property Rights of any third party and neither the Company
nor any Company Subsidiary has received any notice alleging any such
infringement or misappropriation. Except as disclosed in Part 3.12(e) of the
Company Disclosure Schedule, the Intellectual Property Rights and Technology
owned by the Company and each Company Subsidiary are not subject to any
outstanding judgment, decree, order, writ, award, injunction or determination of
an arbitrator or court or other governmental authority (other than office
actions and correspondence regarding pending patent applications and trademark
applications) restricting the rights of the Company or any Company Subsidiary
with respect thereto. To the knowledge of the Company, no Person has interfered
with, infringed upon or misappropriated any of the Intellectual Property Rights
owned by the Company or any Company Subsidiary, or is currently doing so.
(F) To the knowledge of the Company, all of the registrations and pending
applications to Governmental Entities with respect to the Intellectual Property
Rights owned by the Company and the Company Subsidiaries are being duly
maintained and prosecuted and all maintenance and related fees due as of the
date hereof have been paid. The Company and each Company Subsidiary has taken
reasonable steps to safeguard and maintain the secrecy and confidentiality of
trade secrets that are material to the Company and the Company Subsidiaries. The
Company has entered into an employee confidentiality and assignment of
inventions agreement in the standard form that has been made available to Parent
with each U.S. based employee of the Company or a Company Subsidiary. Without
limiting the foregoing, except as disclosed in Part 3.12(f) of the Company
Disclosure Schedule, to the knowledge of the Company, (i) there has been no
misappropriation of any trade secrets or other confidential Intellectual
Property Rights or Technology used in connection with the business of the
Company or the Company Subsidiaries by any Person; (ii) no employee, independent
contractor or agent of the Company or any Company Subsidiary has misappropriated
any trade secrets of any other Person in the course of performance as an
employee, independent contractor or agent of the business;
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and (iii) no employee, independent contractor or agent of the Company or any
Company Subsidiary is in default or breach of any term of any employment
agreement, nondisclosure agreement, assignment of invention agreement or similar
Contract relating in any way to the protection, ownership, development, use or
transfer of the Intellectual Property Rights and Technology of the Company or
the Company Subsidiaries. No funding, facilities, or personnel of any
Governmental Entity or educational institution were used, directly or
indirectly, to develop or create, in whole or in part, any Intellectual Property
Rights or Technology owned by the Company or any Company Subsidiary. Neither the
Company nor any Company Subsidiary has made any written submission to, and is
not subject to any Contract with, any standards bodies or other entities that
would obligate the Company or any Company Subsidiary to grant licenses to or
otherwise impair its control of its Intellectual Property Rights.
(G) To the knowledge of the Company, any software or firmware incorporated
in or provided with the products, and any media used to distribute it, contain
at delivery no computer instructions, circuitry or other technological means
whose purpose or effect is to disrupt, damage or negatively interfere with any
use of any customer's computer and communications facilities or equipment
("Harmful Code"), and the Company and each Company Subsidiary have used
commercially reasonable efforts to prevent the introduction of such Harmful Code
to all software, firmware and media distributed, licensed or sold by the Company
or any Company Subsidiary. "Harmful Code" includes (i) any instrumentality that
could cause the software or firmware to fail to be operative upon command of or
by design by the Company or any Company Subsidiary, and (ii) any code containing
viruses, trojan horses, worms, or like destructive code or code that self-
replicates. Except as disclosed in Part 3.12(g) of the Company Disclosure
Schedule, to the knowledge of the Company, none of the software incorporated in
the Company's or any Company Subsidiary's products is, in whole or in part,
subject to the provisions of any open source or quasi-open source license
agreement, or any other Contract obligating the Company to make source code
available to third parties or to publish source code. Except as disclosed in
Part 3.12(g) of the Company Disclosure Schedule, neither the Company nor any
Company Subsidiary have entered into any Contract requiring the Company or any
Company Subsidiary to place the source code or other Technology incorporated in
the Company's or Subsidiaries' products in escrow so that a licensee might
obtain access to it upon the occurrence of any release condition.
(H) The Company and the Subsidiaries have obtained all material approvals
necessary for exporting the Company's and the Subsidiaries' products outside the
United States in accordance with all applicable United States export control
regulations, and importing the products into any country in which the products
are now sold or licensed for use, and all such export and import Governmental
Authorizations or approvals in the United States and throughout the world are
valid, current, outstanding and in full force and effect in all material
respects.
(I) To the actual knowledge of the individuals specified in Part 3.12(i)(1)
of the Company Disclosure Schedule, there is no basis in existence as of the
date of this Agreement that would give the Person specified in Part 3.12(i)(2)
of the Company Disclosure Schedule the legal right to terminate the Confidential
Agreement pursuant to Section 9.2 of the Confidential Agreement. The
Confidential Agreement has not been amended or modified in any material respect
since December 31, 2006.
3.13. Contracts.
(A) Part 3.13 of the Company Disclosure Schedule contains a list as of the
date of this Agreement of each of the following Contracts to which the Company
or any of the Company Subsidiaries is a party or by which any of them or their
respective assets are otherwise bound:
(i) other than distribution Contracts, each Contract that provides for
exclusivity or restricts in any material respect the ability of the Company
or any of the Company Subsidiaries or any of the Company's current or
future Affiliates to compete in any geographic area or line of business, in
each case for a period extending beyond three months from the date of this
Agreement, or pursuant to which any benefit or right is required to be
given or lost as a result of so competing;
(ii) each indemnification or employment contract with any director or
officer of the Company or the Company Subsidiaries;
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(iii) each Contract evidencing Indebtedness in excess of $500,000 in
aggregate principal amount;
(iv) each (A) distributor Contract or (B) supply Contract pursuant to
which goods, raw materials, or equipment are supplied to the Company or any
Company Subsidiary (excluding purchase orders given or received in the
Ordinary Course of Business), in each case under which the Company or any
Company Subsidiary paid or received in excess of $500,000 in fiscal 2006 or
is expected to pay or receive in excess of $500,000 in fiscal 2007;
(v) each customer Contract (excluding purchase orders given or
received in the Ordinary Course of Business) under which the Company or any
Company Subsidiary received in excess of $1,500,000 in fiscal 2006 or is
expected to receive in excess of $1,500,000 in fiscal 2007;
(vi) each material "single source" supply Contract pursuant to which
goods, raw materials or equipment are supplied to the Company or any
Company Subsidiary from an exclusive source;
(vii) each collective bargaining agreement;
(viii) each lease involving real property pursuant to which the
Company or any of the Company Subsidiaries is required to pay a monthly
rental in excess of $50,000;
(ix) each lease or rental Contract involving personal property (and
not relating primarily to real property) pursuant to which the Company or
any of the Company Subsidiaries is required to make rental payments in
excess of $50,000 per year;
(x) each Contract that involves "take or pay" provisions under which
the Company or any Company Subsidiary paid or received in excess of
$500,000 in fiscal 2006 or is expected to pay or receive in excess of
$500,000 in fiscal 2007 or, based on the Company's present operations, any
fiscal year thereafter;
(xi) each Contract pursuant to which any of the benefits to any party
of which will be materially increased, or the vesting of the benefits to
any party of which will be materially accelerated, by the occurrence of any
of the transactions contemplated by this Agreement or the value of any of
the material benefits to any party of which will be calculated on the basis
of any of the transactions contemplated by this Agreement;
(xii) each Contract for any joint venture (whether in partnership,
limited liability company or other organizational form), co-promote
agreements or co-branding agreements (other than distribution agreements)
or agreements pursuant to which the Company or a Company Subsidiary
permitted distribution of the Company's products under another party's name
or trademarks;
(xiii) each Contract providing for future performance by the Company
or a Company Subsidiary in consideration of amounts previously paid the
balance of which exceeds $250,000 as of the date of this Agreement;
(xiv) each Contract where, in settlement of an actual or threatened
Legal Proceeding for patent infringement, trade secret misappropriation or
similar intellectual property action, another Person agrees in writing not
to contest the validity or ownership of Intellectual Property Rights of the
Company; and
(xv) each Contract granting a third party any license to use
Intellectual Property Rights of the Company relating to Products Under
Development in the field of clinical diagnostics.
In this Agreement, "Material Contract" refers to each Contract (x)
identified in this Section 3.13, whether or not listed in Part 3.13 of the
Company Disclosure Schedule, (y) entered into after the date of this Agreement
that would be required to be listed in Part 3.13 of the Company Disclosure
Schedule if such Contract were in effect as of the date of this Agreement, or
(z) that would be required to be filed as an exhibit to a Registration Statement
on Form S-1 filed by the Company under the Securities Act or as an exhibit to an
Annual Report on Form 10-K filed by the Company under the Exchange Act.
(B) Each Material Contract is enforceable against the Company and each
Company Subsidiary that is a party thereto and each other party thereto, except
as the same may be limited by (i) laws of general application relating to
bankruptcy, insolvency and the relief of debtors, and (ii) rules of law
governing specific
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performance, injunctive relief and other equitable remedies. There are no
material existing breaches or defaults on the part of the Company or any of the
Company Subsidiaries under (or any condition to which with the passage of time
or the giving of notice would cause such a breach of or default under) any
Material Contract and, to the knowledge of the Company, there are no material
existing breaches or defaults on the part of any other Person under (or any
condition to the knowledge of the Company which with the passage of time or the
giving of notice would cause such a breach of or default under) any Material
Contract. The Company has made available to Parent copies of each Material
Contract in effect as of the date of this Agreement, together with all
amendments and supplements thereto in effect as of the date of this Agreement.
3.14. Compliance with Legal Requirements. Except as set forth in Section
3.18 pertaining to compliance with FDA Laws, the Company and the Company
Subsidiaries are and at all time have been in material compliance with all
material Legal Requirements applicable to their businesses.
3.15. Foreign Corrupt Practices and International Trade Sanctions. Except
as disclosed in Part 3.15 of the Company Disclosure Schedule, neither the
Company, nor any Company Subsidiary, nor any of their respective directors,
officers, agents, employees or any other Persons acting on their behalf has (i)
violated the Foreign Corrupt Practices Act, 15 U.S.C. Section 78dd-1 et seq., or
any other similar applicable foreign, federal, or state Legal Requirement, (ii)
made or provided, or caused to be made or provided, directly or indirectly, any
payment or thing of value to a foreign official, foreign political party,
candidate for office or any other person knowing that the person will pay or
offer to pay the foreign official, party or candidate, for the purpose of
influencing a decision, inducing an official to violate their lawful duty,
securing any improper advantage, or inducing a foreign official to use their
influence to affect a governmental decision, (iii) paid, accepted or received
any unlawful contributions, payments, expenditures or gifts, or (iv) violated or
operated in noncompliance with any export restrictions, money laundering law,
anti-terrorism law or regulation, anti-boycott regulations or embargo
regulations.
3.16. Governmental Authorizations. As of the date of this Agreement, the
Company and the Company Subsidiaries hold all Governmental Authorizations
necessary to enable them to conduct their businesses in all material respects in
the manner in which such businesses are currently being conducted and are
proposed to be conducted. The material Governmental Authorizations held by the
Company and the Company Subsidiaries are, in all material respects, valid and in
full force and effect. The Company and the Company Subsidiaries are in
compliance with the terms and requirements of such Governmental Authorizations
in all material respects. The execution and delivery of this Agreement by the
Company does not, and the consummation of the Offer, the Merger or the other
transactions contemplated hereby and compliance with the terms hereof would not
reasonably be expected to cause the revocation or cancellation of any material
Governmental Authorization. To the knowledge of the Company, there are no facts
or circumstances existing which would lead to any suspension, loss of or
material modification to any material Governmental Authorization or refusal by a
Governmental Entity to renew or accept for filing any material Governmental
Authorizations on terms not substantially less advantageous, in the aggregate,
to the Company and the Company Subsidiaries than the terms of those Governmental
Authorization currently in force. All Governmental Authorizations material to
the operation of the Company's or any Company Subsidiary's business is
transferable to Parent or any of its Subsidiaries at the Effective Time if
necessary to be so transferred following the Acceptance Time. Since January 1,
2004, neither the Company nor any of the Company Subsidiaries has been notified
by any Governmental Entity: (a) asserting any material violation of any term or
requirement of any Governmental Authorization or Legal Requirement; or (b)
notifying the Company or one of the Company Subsidiaries of the suspension,
revocation of, loss of or material modification to any Governmental
Authorization.
3.17. Legal Proceedings; Orders. As of The Date Of This Agreement:
(A) except as disclosed in Part 3.17 of the Company Disclosure
Schedule, (i) there is no Legal Proceeding pending (or, to the knowledge of
the Company, threatened) against the Company or any of the Company
Subsidiaries or any of their respective properties or rights or any
executive officer or director of the Company or any Company Subsidiary (in
their capacity as such), in which the claim is for more than $200,000 in
damages, or for an injunction or specific performance, and (ii) neither the
Company, any Company Subsidiary, nor, to the knowledge of the Company, any
of its or their current or former officers,
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directors, employees, or independent contractors, each in their capacity as
such, has been identified by any Governmental Entity as a subject or target
of a government investigation, or otherwise been informed or become aware
that their conduct is being investigated by a Governmental Entity. Except
as set forth in Part 3.17 of the Company Disclosure Schedule, there is no
Legal Proceeding brought by the Company against any Person that is pending
as of the date of this Agreement; and
(B) there is no material order, injunction, decree or judgment
specific to the Company or any of the Company Subsidiaries to which the
Company or any of the Company Subsidiaries is subject.
3.18. Regulatory Matters.
(A) The Company and the Company Subsidiaries have established and
administer compliance programs (including written compliance policies)
applicable to the Company and the Company Subsidiaries (i) to assist the
Company, the Company Subsidiaries and their respective directors, officers and
employees in complying with all Legal Requirements and guidelines (including
those administered by the FDA) applicable to the Company, the Company
Subsidiaries or their businesses and (ii) to provide compliance policies
governing activities and requirements applicable to medical device companies
(including pre-clinical and clinical testing, product design and development,
product testing, product manufacturing, product labeling, product storage, pre-
market clearance and approval, marketing, advertising and promotion, product
sales and distribution, medical device recall and reporting regulations, and
record keeping).
(B) Except as set forth in Part 3.18(b) of the Company Disclosure Schedule,
the Company and each Company Subsidiary is in compliance in all material
respects with all Legal Requirements applicable to the Company's products and
activities, including product design, development, testing, manufacture,
marketing, distribution, labeling, storage and transport, in all jurisdictions
in which such acts or any of them occur or are reasonably likely to occur or
such products or any of them are likely to be sold or used (including any FDA
Laws). All applications, submissions, information, claims, reports and
statistics and other data and conclusions derived therefrom, utilized as the
basis for or submitted in connection with any and all requests for
authorizations, approvals, certificates, waivers, certifications, clearances,
exemptions, notifications, consents, orders, registrations, licenses or permits
of the FDA or comparable Governmental Entities relating to the Company, the
Company Subsidiaries, their businesses and their products were, when submitted
to the FDA or other Governmental Entities, true, complete and correct in all
material respects and in conformance with Legal Requirements as of the date of
submission and any updates, changes, corrections or modification to such
applications, submissions, information and data which were or are necessary or
required to be filed, maintained, or furnished to the FDA or other Governmental
Entities have been timely filed, maintained, or furnished and were true,
complete and correct in all material respects and in conformance with Legal
Requirements as of the date of submission. The labeling claims made by the
Company and the Company Subsidiaries for each of their products are consistent
with the scope of regulatory clearance, exemption or approval for each product
in each jurisdiction where it is marketed in all material respects, and
supported by proper research design, testing, analysis and disclosure that
conforms with Legal Requirements.
(C) The activities, products and facilities of the Company and the Company
Subsidiaries, as well as, to the Company's knowledge, its suppliers,
distributors, contractors and other intermediaries, are in compliance with all
applicable requirements of CLIA, the FDCA and implementing FDA regulations,
including the registration, listing, labeling and manufacturing requirements of
21 C.F.R. Parts 807, 809 and 820, all to the extent applicable to the Company's
products and services. The Company and each Company Subsidiary is not subject to
any obligation arising under any consent decree, consent agreement, or warning
letter issued by or entered into with the FDA or any other Governmental Entity
or other notice, response or commitment made to the FDA or any other
Governmental Entity. The Company has delivered to Parent true, correct and
complete copies of all customer complaints relating to the Company's and the
Company Subsidiaries' products and all Medical Device Reports, in each case,
filed with the FDA within the last five years. The Company has delivered to
Parent true, complete and correct copies of all warning letters, untitled
letters, notices of inspectional observations (Form FDA 483s), or similar
notices, or other correspondence relating to the Company's and the Company
Subsidiaries' products and its compliance with Legal Requirements from the FDA
and any other Governmental Entity and all of the Company's responses thereto
within the last five years.
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(D) Except as set forth in Part 3.18(d) of the Company Disclosure Schedule,
since January 1, 2003, no exemptions, clearances or approvals for the Company
and the Company Subsidiaries' products have been subjected to reevaluation or
suspension of sale by the FDA and no products manufactured, marketed or sold by
the Company or any Company Subsidiary have been recalled or subject to a field
notification, field correction or safety alert (whether voluntarily or
otherwise) and no proceedings have occurred (whether completed or pending)
seeking to recall, reclassify, re-label, suspend, or seize any product sold or
proposed to be sold by the Company or a Company Subsidiary. To the Company's
knowledge, there are no facts which are reasonably likely to cause: (A) the
recall, suspension, field notification, field correction, reclassification, re-
labeling or safety alert of any product sold or intended to be sold by the
Company or any Company Subsidiary; (B) a change in the marketing classification
or a material change in labeling of any such products; or (C) a termination or
suspension of marketing of any such products.
(E) All products being manufactured, distributed, or developed by the
Company and the Company Subsidiaries that are subject to the jurisdiction of the
FDA or comparable Governmental Entity are being manufactured, labeled, stored,
tested, distributed, and marketed in material compliance with all applicable
requirements and implementing regulations thereunder.
(F) Except as set forth in Part 3.18(f) of the Company Disclosure Schedule,
all pre-clinical trials and clinical trials conducted by or on behalf of the
Company and the Company Subsidiaries have been, and are being conducted in
material compliance with experimental protocols, procedures and controls
pursuant to accepted professional scientific standards and all applicable Legal
Requirements relating thereto, including the FDCA and its applicable
implementing regulations at 21 C.F.R. Parts 50, 54, 56 and 812.
(G) Neither the Company, the Company Subsidiaries, nor, to the knowledge of
the Company, any of their collective officers, employees or agents has committed
any act, made any statement, or failed to make any statement, that would be
reasonably expected to provide a basis for the FDA to invoke its policy
respecting "Fraud, Untrue Statements of Material Facts, Bribery, and Illegal
Gratuities," set forth in 56 Fed. Reg. 46191 (September 10, 1991) and any
amendments thereto.
(H) Neither the Company, the Company Subsidiaries, nor, to the knowledge of
the Company, any of their collective officers, employees or agents has been
convicted of any crime or engaged in any conduct that could result in a material
debarment or exclusion under 21 U.S.C. Section 335a or under any similar Legal
Requirement. No claims, actions, proceedings or investigations that could
reasonably be expected to result in such a material debarment or exclusion are
pending or threatened against the Company, the Company Subsidiaries, or, to the
knowledge of the Company, any of their collective officers, employees or agents.
(I) Except as disclosed on Part 3.18(i) of the Company Disclosure Schedule,
there are no investigations, audits, actions or other proceedings pending with
respect to a violation by the Company or any Company Subsidiary of any Legal
Requirement that reasonably would be expected to result in administrative,
civil, or criminal liability, and there are no facts or circumstances existing
that would reasonably be expected to serve as a basis for such an investigation,
audit, action or other proceeding.
(J) The Company and each of the Company Subsidiaries is in material
compliance with all applicable FDA import and export requirements, including
import-for-export requirements, export notifications or authorizations and
record keeping requirements.
3.19. Product Recalls. Part 3.19 of the Company Disclosure Schedule sets
forth a list of (i) all recalls, field notifications, field corrections and
safety alerts with respect to products manufactured and/or distributed by the
Company or any Company Subsidiary, or by any Person on behalf of the Company or
any Company Subsidiary, in each case between January 1, 2004 and the date of
this Agreement, and the dates, if any, such recalls, field notifications, field
corrections and safety alerts were resolved or closed, and (ii) to the knowledge
of the Company, any material complaints with respect to products produced by the
Company or any or any Company Subsidiary, or by any Person on behalf of the
Company or any or any Company Subsidiary, that are open as of the date of this
Agreement. There are no outstanding recalls, field notifications, field
corrections, safety alerts or product complaints with respect to the products
manufactured and/or distributed by the Company or any or any Company Subsidiary,
or by any Person on behalf of the Company or any or any
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Company Subsidiary, and to the Company's knowledge, there are no facts that
would be reasonably likely to result in a material product recall, field
notification, field correction or safety alert with respect to any such
products.
3.20. Tax Matters.
(A) Each of the Company and the Company Subsidiaries has timely filed with
the appropriate Governmental Entity all Tax Returns required to be filed. All
such Tax Returns are complete and accurate in all material respects and have
been prepared in compliance with applicable Legal Requirements. All material
Taxes due and owing by the Company and the Company Subsidiaries (whether or not
shown on any Tax Return) have been paid. Neither the Company nor any Company
Subsidiary is the beneficiary of any extension of time within which to file any
material Tax Return. No written claim has ever been received by the Company or
any Company Subsidiary from a Governmental Entity in a jurisdiction where the
Company or any Company Subsidiary does not file Tax Returns that it is or may be
subject to taxation by that jurisdiction.
(B) The unpaid Taxes of the Company and the Company Subsidiaries did not,
as of the date of the Latest Balance Sheet, exceed the reserve for Tax liability
(excluding any reserve for deferred Taxes established to reflect timing
differences between book and Tax income) set forth on the face of such balance
sheets (rather than in any notes thereto). Since the date of the Latest Balance
Sheet, neither the Company nor any Company Subsidiary has incurred any liability
for Taxes outside the ordinary course of business or otherwise inconsistent with
past custom and practice.
(C) There are no examinations, audits or Legal Proceedings with respect to
material Taxes of the Company or any Company Subsidiary currently pending or
underway (and to the knowledge of the Company no such examination, audit or
proceeding is threatened) nor has the Company or any Company Subsidiary received
any notice from a Governmental Entity relating to any issue which could result
in a material Tax liability for the Company or any Company Subsidiary. No
deficiency for material Taxes against the Company or any Company Subsidiary has
been claimed, proposed or assessed by any Governmental Entity that has not been
satisfied by payment or withdrawn. No extension or waiver of the limitation
period applicable to any material Taxes or material Tax Return is in effect. The
Company has delivered or made available to Parent complete and accurate copies
of federal, state and local Tax Returns of the Company and each Company
Subsidiary and their predecessors for all open Tax years, and complete and
accurate copies of all examination reports and statements of deficiencies
assessed against or agreed to by the Company, any Company Subsidiary or any
predecessors since its last open Tax year.
(D) There are no Encumbrances for material Taxes (other than Permitted
Encumbrances) upon any of the assets of the Company or any Company Subsidiary.
(E) Neither the Company nor any Company Subsidiary will be required to
include any material item of income in, or exclude any material item of
deduction from, taxable income for any period (or any portion thereof) ending
after the Acceptance Time as a result of any installment sale or other
transaction on or prior to the Acceptance Time, any accounting method change or
agreement with any Governmental Entity, any prepaid amount received on or prior
to the Acceptance Time or any intercompany transaction or excess loss account
described in Code Section 1502 (or any corresponding provision of state, local
or foreign Tax law).
(F) None of the outstanding indebtedness of the Company or any Company
Subsidiary constitutes indebtedness with respect to which any interest
deductions may be disallowed under Sections 163(i), 163(l) or 279 of the Code or
under any other provision of applicable Legal Requirements.
(G) The Company and each Company Subsidiary has withheld and paid all Taxes
required to have been withheld and paid in connection with amounts paid or owing
to any employee, independent contractor, service provider, creditor, stockholder
or other third party and is not liable for any arrears of wages or any taxes or
any penalty for failure to withhold or pay such amounts.
(H) Neither the Company nor any Company Subsidiary: (i) is a party to or
bound by a Tax sharing, allocation, indemnification or similar agreement; (ii)
has been a member of an affiliated group of corporations within the meaning of
Section 1504 of the Code or any group that has filed a consolidated, combined or
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unitary Tax Return other than a consolidated, combined or unitary group of which
the Company is the common parent; or (iii) has any liability for material Taxes
of any Person (other than Taxes of the Company and the Company Subsidiaries)
under Treasury regulation Section 1.1502-6 (or any similar provision of a Legal
Requirement), as a transferee or successor, by Contract, or otherwise. For the
purposes of this Section 3.20(h), commercially reasonable Contracts providing
for the allocation or payment of real property Taxes attributable to real
property leased or occupied by the Company or any Company Subsidiary shall be
disregarded.
(I) Neither the Company nor any Company Subsidiary: (i) has ever been a
United States real property holding corporation within the meaning of Section
897(c)(2) of the Code; (ii) has been a stockholder of a "controlled foreign
corporation" as defined in Section 957 of the Code (or any similar provision of
a Legal Requirement); (iii) has been a "personal holding company" as defined in
Section 542 of the Code (or any similar provision of a Legal Requirement); (iv)
has had a material liability with respect to Taxes as a result of being a
stockholder of a "passive foreign investment company" within the meaning of
Section 1297 of the Code; or (v) has engaged in a trade or business, had a
permanent establishment (within the meaning of an applicable Tax treaty) or has
otherwise become subject to Tax jurisdiction in a country other than the country
of its formation.
(J) None of the Company, any Company Subsidiary or predecessor has within
the past three (3) years been a party to a transaction intended to qualify under
Section 355 of the Code or under so much of Section 356 of the Code as relates
to Section 355 of the Code.
(K) None of the Company Subsidiaries organized outside of the United States
is a "surrogate foreign corporation" within the meaning of Section 7874(a)(2)(B)
of the Code or is treated as a United States corporation under Section 7874(b)
of the Code.
(L) Neither the Company nor any Company Subsidiary has entered into any
transaction identified as a "reportable transaction" for purposes of Treasury
regulations Sections 1.6011-4(b)(2) or 301.6111-2(b)(2).
3.21. Employee Benefit Plans.
(A) For purposes of this Section 3.21(a), "Company Plan" means each
"employee benefit plan" as defined in Section 3(3) of ERISA (whether or not
subject to ERISA) and each other plan, policy, program, practice, agreement,
understanding or arrangement (whether written or oral) providing compensation or
other benefits to any current or former director, officer, employee or
consultant (or to any dependent or beneficiary thereof) of the Company or any
ERISA Affiliate (as defined below), which is now, or was within the past six
years, maintained, sponsored or contributed to by the Company or any ERISA
Affiliate, or under which the Company or any ERISA Affiliate has or may have any
obligation or liability, whether actual or contingent, including all incentive,
bonus, deferred compensation, vacation, holiday, cafeteria, medical, disability,
stock purchase, stock option, stock appreciation, phantom stock, restricted
stock or other stock-based compensation plans, policies, programs, practices or
arrangements. Part 3.21(a) of the Company Disclosure Schedule sets forth a
complete list of each Company Plan under which the Company or any ERISA
Affiliate has or may have any material obligation or material liability, whether
actual or contingent.
(B) Each Company Plan which is intended to qualify under Section 401(a),
Section 401(k), Section 401(m) or Section 4975(e)(7) of the Code has either (i)
received a favorable determination letter from the IRS as to its qualified
status, or (ii) may rely upon a favorable prototype opinion letter from the IRS,
and each trust established in connection with any Company Plan which is intended
to be exempt from federal income taxation under Section 501(a) of the Code is so
exempt, and to Company's knowledge, no fact or event has occurred that could
adversely affect the qualified status of any such Company Plan or the exempt
status of any such trust.
(C) Each Company Plan complies in all material respects in form and
operation, and has been administered in all material respects in accordance
with, its terms and all applicable Legal Requirements, including ERISA and the
Code, and all contributions required to be made under the terms of any of the
Company Plans as of the date of this Agreement have been timely made or, if not
yet due, have been properly reflected on the most recent consolidated balance
sheet filed or incorporated by reference in the Company
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financial statements prior to the date of this Agreement. With respect to each
Company Plan, all Tax, annual reporting and other filings with a Governmental
Entity required by ERISA and the Code have been timely filed with the
appropriate Governmental Entity and all notices and disclosures have been timely
provided to participants. With respect to the Company Plans, no event has
occurred and, to the knowledge of Company, there exists no condition or set of
circumstances in connection with which the Company or any Company Subsidiary
could be subject to any material liability (other than for routine benefit
liabilities) under the terms of, or with respect to, such Company Plans, ERISA,
the Code or any other applicable Legal Requirement.
(D) To the Company's knowledge, there has been no prohibited transaction
(within the meaning of Section 406 of ERISA or Section 4975 of the Code and
other than a transaction that is exempt under a statutory or administrative
exemption) with respect to any Company Plan that could result in liability to
the Company or any ERISA Affiliate. Each Company Plan can be amended, terminated
or otherwise discontinued after the Effective Time in accordance with its terms,
without liability (other than (A) liability for ordinary administrative expenses
typically incurred in a termination event or (B) if the Company Plan is a
pension benefit plan subject to Part 2 of Title I of ERISA, liability for the
accrued benefits as of the date of such termination (if and to the extent
required by ERISA) to the extent that either there are sufficient assets set
aside in a trust or insurance contract to satisfy such liability or such
liability is reflected on the most recent balance sheet included in the Company
financial statements prior to the date of this Agreement). Neither the Company,
nor to the knowledge of the Company, any other Person or Entity has any express
or implied commitment, whether legally enforceable or not, to modify, change or
terminate any Company Plan, other than with respect to a modification, change or
termination required by ERISA or the Code. No Legal Proceeding has been brought,
or to the knowledge of Company is threatened, against or with respect to any
such Company Plan, including any audit or inquiry by the IRS or United States
Department of Labor. Neither the Company nor any ERISA Affiliate has any
liability under ERISA Section 502. All contributions and payments to such
Company Plan are deductible under Code Sections 162 or 404. No excise Tax could
reasonably be expected to be imposed upon the Company under Chapter 43 of the
Code.
(E) No Company Plan is a "multiemployer plan" (as defined in Section 3(37)
of ERISA) (a "Multiemployer Plan") or other pension plan subject to Title IV or
Part 3 of Title I of ERISA or Section 412 of the Code, and neither the Company
nor any ERISA Affiliate has sponsored, maintained, participated in, contributed
to, or has been required to participate in or contribute to a Multiemployer Plan
or other pension plan subject to Title IV or Part 3 of Title I of ERISA or
Section 412 of the Code. None of the assets of Company or any ERISA Affiliate
is, or may reasonably be expected to become, the subject of any Encumbrance
arising under ERISA or Section 412(n) of the Code.
(F) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will result in any payment,
acceleration or creation of any rights of any Person to benefits under any
Company Plan. No amount that could be received (whether in cash, property, the
vesting of property or otherwise) as a result of or in connection with the
consummation of the transactions contemplated by this Agreement (either alone or
in combination with any other event) or by any of the ancillary agreements, by
any employee, officer, director or other service provider of the Company or any
of the Company Subsidiaries who is a "disqualified individual" (as such term is
defined in Treasury Regulation Section 1.280G-1) could be characterized as an
"excess parachute payment" (as defined in Section 280G(b)(1) of the Code).
(G) Except as required by applicable Legal Requirements, no Company Plan
provides any of the following retiree or post-employment benefits to any Person:
medical, disability or life insurance benefits. No Company Plan is a voluntary
employee benefit association under Section 501(a)(9) of the Code. The Company
and each ERISA Affiliate is in compliance in all material respects with (i) the
requirements of the applicable health care continuation and notice provisions of
the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, and the
regulations (including proposed regulations) thereunder and any similar state
law and (ii) the applicable requirements of the Health Insurance Portability and
Accountability Act of 1996, as amended, and the regulations (including the
proposed regulations) thereunder.
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(H) Except as set forth in Part 3.21(h) of the Company Disclosure Schedule,
no Company Plan or payment or benefit provided pursuant to any Company Plan
between the Company or any of the Company Subsidiaries and any "service
provider" (within the meaning of Section 409A of the Code), including the grant,
vesting or exercise of any stock option or stock appreciation right, will or may
provide for the deferral of compensation subject to Section 409A of the Code,
whether pursuant to the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby (either alone or upon the
occurrence of any additional or subsequent events) or otherwise. Each Company
Plan that is a nonqualified deferred compensation plan subject to Section 409A
of the Code has been operated and administered in good faith compliance with
Section 409A of the Code from the period beginning January 1, 2005 and
continuing through the date hereof. All stock options granted under the Company
Option Plans have been granted in compliance with the terms of applicable Legal
Requirements and the applicable Company Option Plans and have (or with respect
to such options which have been exercised as of the date of this Agreement, had)
a per share exercise price that is (or with respect to such options which have
been exercised as of the date of this Agreement, was) at least equal to the fair
market value of a share of the underlying stock as of the date the option was
granted (determined in accordance with applicable Legal Requirements, including,
to the extent applicable, Section 409A of the Code).
(I) The Company and each of the Company Subsidiaries have properly
classified all individuals providing services to the Company or any of the
Company Subsidiaries as employees or non-employees for all relevant purposes.
(J) With respect to each employee benefit plan, program, or other
arrangement providing compensation or benefits to any employee or former
employee of the Company or any of the Company Subsidiaries (or any dependent
thereof) which is subject to the Legal Requirements of any jurisdiction outside
of the United States (the "Foreign Plans"): (i) such Foreign Plan has been
maintained in all material respects in accordance with all applicable Legal
Requirements, (ii) if intended to qualify for special Tax treatment, such
Foreign Plan meets all Legal Requirements for such treatment, (iii) if intended
or required to be funded and/or book-reserved, such Foreign Plan is fully funded
and/or book reserved, as appropriate, based upon reasonable actuarial
assumptions, and (iv) no material liability exists or reasonably could be
imposed upon the assets of the Company or any of the Company Subsidiaries by
reason of such Foreign Plan.
(K) The execution and delivery of this Agreement and the consummation of
the Offer and the Merger: (i) will not materially increase the benefits payable
by the Company or any of the Company Subsidiaries under any Company Plan; and
(ii) will not result in any acceleration of the time of payment or vesting of
any material benefits payable by the Company or any of the Company Subsidiaries
under any Company Plan.
(L) The Company Board, at a meeting duly called and held or by a duly
executed action by unanimous written consent, has determined that each of the
members of the Compensation Committee of the Company Board (the "Compensation
Committee") are, and the Company represents and warrants that each of the
members of the Compensation Committee are and at the Acceptance Time will be,
"independent directors" as defined in Rule 4200(a)(15) of the Nasdaq Marketplace
Rules and eligible to serve on the Compensation Committee under the Exchange Act
and all applicable Marketplace Rules of the NASDAQ Global Select Market. On or
prior to the date hereof, the Compensation Committee, at a meeting duly called
and held or by a duly executed action by unanimous written consent, approved
each Company Compensation Arrangement as an "employment compensation, severance
or other employee benefit arrangement" within the meaning of Rule 14d-10(d)(1)
under the Exchange Act (an "Employment Compensation Arrangement"), and has taken
all other action necessary to satisfy the requirements of the non-exclusive safe
harbor with respect to such Company Compensation Arrangements in accordance with
Rule 14d-10(d)(2) under the Exchange Act. All amounts payable under each Company
Compensation Arrangement (i) are being paid or granted as compensation for past
services performed, future services to be performed, or future services to be
refrained from performing (and matters incidental thereto) and (ii) are not
calculated based on the number of shares tendered or to be tendered into the
Offer by the applicable holder or holders of Company Shares.
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3.22. Labor Matters.
(A) There are no Legal Proceedings pending against the Company or any of
the Company Subsidiaries asserting that the Company or any of the Company
Subsidiaries has committed an unfair labor practice, nor have any such Legal
Proceedings been threatened to the knowledge of the Company. There are no
collective bargaining agreements or other labor union agreements to which the
Company or any of the Company Subsidiaries is a party, and, to the knowledge of
the Company, as of the date of this Agreement, neither the Company nor any of
the Company Subsidiaries is the subject of any Legal Proceeding seeking to
compel any of them to bargain with any labor organization as to wages or
conditions. To the Company's knowledge, since January 1, 2004, neither the
Company nor any of the Company Subsidiaries was the subject of any labor union
organizing activity or had any actual or threatened employee strikes, work
stoppages, slowdowns or lockouts.
(B) The Company and each Company Subsidiary has materially complied and is
in material compliance with all applicable Legal Requirements with respect to
employment, immigration, occupational health and safety, and wages and hours.
There are no Legal Proceedings pending, or, to the knowledge of the Company,
threatened, against the Company or any of the Company Subsidiaries with respect
to employment, immigration, occupational health and safety, or wages and hours
and that would reasonably be expected to have a Company Material Adverse Effect.
Except as set forth in Part 3.22(b) of the Company Disclosure Schedule, neither
the Company nor any of the Company Subsidiaries is a party to or bound by any
Contract limiting the right of the Company to terminate the employment of any of
its Executives at will or requiring the payment of severance upon termination.
(C) To the Company's knowledge, there has not been a representation
question respecting any of the employees of the Company or any of the Company
Subsidiaries, there are no campaigns being conducted to solicit cards from or
otherwise organize employees of the Company or any of the Company Subsidiaries
to authorize representation by any labor organization, there has been no labor
strike, slow-down or other concerted work stoppage with respect to the business
activities of the Company or any of the Company Subsidiaries during the last
three years, and no such labor strike, slow-down, or other concerted work
stoppage is currently threatened.
(D) To the Company's knowledge, no employee of the Company or any of the
Company Subsidiaries are in any material respect in violation of any term of any
employment agreement, non-disclosure agreement, noncompetition agreement, or any
restrictive covenant to a former employer relating to the right of any such
employee to be employed by the Company or any of the Company Subsidiaries
because of (i) the nature of the business conducted or presently proposed to be
conducted by the Company or any of the Company Subsidiaries or (ii) the use of
trade secrets or proprietary information of others. No Executive of the Company
or any of the Company Subsidiaries has given notice to the Company or any of the
Company Subsidiaries that any such Executive intends to terminate his or her
employment with the Company or any of the Company Subsidiaries. Except as set
forth in Part 3.22(d) of the Company Disclosure Schedule, there are no Legal
Proceedings pending or, to the knowledge of the Company, threatened, between the
Company or any of the Company Subsidiaries and any of their respective current
or former employees, which Legal Proceedings would reasonably be expected to
have a Company Material Adverse Effect, individually or collectively.
3.23. Environmental Matters. The Company and the Company Subsidiaries are
in material compliance with all applicable Environmental Laws. Since January 1,
2003, neither the Company nor any of the Company Subsidiaries received any
written notice from a Governmental Entity or third party that alleged that the
Company or any of the Company Subsidiaries was materially violating any
Environmental Law. To the knowledge of the Company, no current or prior owner of
any property leased or controlled by the Company or any of the Company
Subsidiaries received any written notice from a Governmental Entity or third
party since January 1, 2003 that alleged that such current or prior owner or the
Company or any of the Company Subsidiaries was materially violating any
Environmental Law. The Company has all the Environmental Permits necessary for
the conduct and operation of the business as now being conducted, and all such
permits are in good standing. Neither the Company nor any of the Company
Subsidiaries has entered into or agreed to any material consent decree, order or
agreement under any Environmental Law, and neither the Company nor any of the
Company Subsidiaries is subject to any material judgment, decree or order
relating to compliance with
A-30
any Environmental Law or to investigation, cleanup, remediation or removal of
Hazardous Substances under any Environmental Law. There are no underground
storage tanks or known or suspected asbestos-containing materials on, under or
about real property owned or leased by the Company or a Company Subsidiary. To
the knowledge of the Company, there are no above-ground storage tanks on, under
or about any property currently or previously owned or leased by the Company,
the presence of which would reasonably be expected to have a Company Material
Adverse Effect. True and correct summaries of all environmental audits or
assessments which have been conducted by or on behalf of the Company at any
Owned Real Property or Leased Real Property, have been delivered to Parent or
Purchaser.
(For purposes of this Section 3.23, "Environmental Laws" shall mean any and
all applicable international, federal, state, or local laws, statutes,
ordinances, regulations, policies, guidance, rules, judgments, orders, court
decisions or rule of common law, permits, restrictions and licenses, which (i)
regulate or relate to the protection or clean up of the environment; the use,
treatment, storage, transportation, handling, disposal or release of Hazardous
Substances, the preservation or protection of waterways, groundwater, drinking
water, air, wildlife, plants or other natural resources; or the health and
safety of persons or property, including protection of the health and safety of
employees; or (ii) impose liability or responsibility with respect to any of the
foregoing, including the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. Section 9601 et seq.), or any other Legal Requirement
of similar effect. "Environmental Permits" shall mean any material permit,
license, authorization or approval required under applicable Environmental Laws.
"Hazardous Substances" shall mean any pollutant, chemical, substance and any
toxic, infectious, carcinogenic, reactive, corrosive, ignitable or flammable
chemical, or chemical compound, or hazardous substance, material or waste,
whether solid, liquid or gas, that is subject to regulation, control or
remediation under any Environmental Laws, including any quantity of asbestos in
any form, urea formaldehyde, PCBs, radon gas, crude oil or any fraction thereof,
all forms of natural gas, petroleum products or by-products or derivatives.)
3.24. Insurance. The Company maintains insurance coverage with reputable
and financially sound insurers, or maintains self-insurance practices, in such
amounts and covering such risks of the Company and the Company Subsidiaries as
are in accordance with normal industry practice for publicly traded companies
that are engaged in businesses similar to that of the Company and the Company
Subsidiaries (taking into account the cost and availability of such insurance).
All such policies are in full force and effect, all premiums due and payable
have been paid, and since January 1, 2005, the Company has not received any
written communication notifying the Company of any: (a) cancellation or
invalidation of any material insurance policy held by the Company (except with
respect to policies that have been replaced with similar policies); (b) refusal
of any coverage or rejection of any material claim under any material insurance
policy held by the Company; or (c) material adjustment in the amount of the
premiums payable with respect to any insurance policy held by the Company. There
is no pending material claim by the Company under any insurance policy held by
the Company. Neither the Company nor any Company Subsidiary is in material
breach or default, and neither the Company nor any Company Subsidiary has taken
any action or failed to take any action which, with notice or the lapse of time,
would constitute such a breach or default, or permit termination or material
modification of any of the insurance policies. The consummation of the
transactions contemplated by this Agreement will not, in and of itself, cause
the revocation, cancellation or termination of any such insurance policies.
3.25. Transactions With Affiliates. To the knowledge of the Company,
between the date of the Company's last proxy statement filed with the SEC and
the date of this Agreement, no event has occurred that would be required to be
reported by the Company pursuant to Item 404 of Regulation S-K promulgated by
the SEC.
3.26. Vote Required. If required under applicable Legal Requirements in
order to permit the consummation of the Merger, the affirmative vote of the
holders of a majority of the Company Shares outstanding on the record date for
the Special Meeting is the only vote of the holders of any class or series of
the Company's capital stock necessary to adopt this Agreement or consummate the
transaction contemplated by this Agreement, including the Offer and the Merger.
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3.27. Section 203 of The Dgcl; Company Rights Agreement. Assuming the
accuracy of the representations and warranties contained in Sections 4.4 and
4.6, the Company Board has taken all action necessary to render Section 203 of
the DGCL inapplicable to the Offer, the Top-Up Option, and the Merger and all of
the transactions contemplated by this Agreement. The Company has amended the
Company Rights Agreement to provide that neither Parent nor Purchaser shall be
deemed to be an Acquiring Person (as such term is defined in the Company Rights
Agreement), that neither a Distribution Date nor a Stock Acquisition Date (as
such terms are defined in the Company Rights Agreement) shall be deemed to occur
and that the Company Rights will not separate from the Company Shares as a
result of the execution, delivery or performance of this Agreement, and that the
Company Rights shall terminate in accordance with the Company Rights Agreement
immediately prior to the Effective Time.
3.28. Opinion of Financial Advisor. The Company Board has received the
opinion of Xxxxxxx, Xxxxx & Co. to the effect that, as of the date of such
opinion, subject to various qualifications and assumptions, the Offer Price (as
such term is defined in this Agreement) is fair, from a financial point of view,
to the holders of Company Shares (other than Parent, Purchaser and any of their
affiliates), and such opinion has not been modified or withdrawn prior to the
date of this Agreement.
3.29. Brokers. No broker, finder or investment banker (other than
Xxxxxxx, Sachs & Co.) is entitled to any brokerage, finder's or other similar
fee or commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of the Company. The
Company has delivered to Parent complete and correct copies of all Contracts
under which any such fees or commissions are payable and all indemnification and
other Contracts related to the engagement of the Persons to whom such fees are
payable. The methodology, basis and formula for calculating fees and expenses of
any accountant, broker, financial advisor, consultant, legal counsel, proxy
solicitor or other Person retained by or on behalf of the Company or any Company
Subsidiary in connection with this Agreement or the transactions contemplated
hereby are set forth in Part 3.29 of the Company Disclosure Schedule.
3.30. Xxxxxxx Merger Agreement. The Company has paid to Xxxxxxx the
termination fee payable pursuant to the Xxxxxxx Merger Agreement (the "Company
Termination Fee"). The Xxxxxxx Merger Agreement has been validly terminated and,
except for Sections 7.2, 7.3 and 8 thereof, the Xxxxxxx Merger Agreement is of
no further force or effect.
SECTION 4. Representations and Warranties of Parent and Purchaser
Parent and Purchaser hereby jointly and severally represent and warrant to
the Company that:
4.1. Due Organization. Each of Parent and Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of
Delaware and
has all requisite corporate power and authority necessary to carry on its
business as it is now being conducted except where the failure to be so
organized, existing or in good standing, individually or in the aggregate, would
not be reasonably likely to prevent or materially delay the consummation of any
of the transactions contemplated herein. Since its date of incorporation,
Purchaser has not carried on any business or conducted any operations other than
the execution of this Agreement, the performance of its obligations hereunder
and matters ancillary thereto.
4.2. Authority; Binding Nature of Agreement. Parent has the requisite
corporate power and authority to enter into and to perform its obligations under
this Agreement. The board of directors of Parent, at a meeting duly called and
held, has authorized and approved the execution, delivery and performance of
this Agreement by Parent. The execution and delivery of this Agreement by Parent
and the consummation by Parent of the transactions contemplated by this
Agreement have been duly authorized by all necessary corporate action on the
part of Parent, and no other corporate proceedings on the part of Parent are
necessary to authorize this Agreement. This Agreement has been duly and validly
executed and delivered by Parent and, assuming the due authorization, execution
and delivery of this Agreement by the Company, constitutes the valid and binding
obligation of Parent, enforceable against Parent in accordance with its terms,
subject to: (i) laws of general application relating to bankruptcy, insolvency
and the relief of debtors; and (ii) rules of law governing specific performance,
injunctive relief and other equitable remedies. Purchaser is a newly formed,
wholly-owned Subsidiary of Parent and has the requisite corporate power and
authority to enter into and to perform its
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obligations under this Agreement. The board of directors of Purchaser has
authorized and approved the execution, delivery and performance of this
Agreement by Purchaser. The execution and delivery of this Agreement by
Purchaser and the consummation by Purchaser of the transactions contemplated by
this Agreement have been duly authorized by all necessary corporate action on
the part of Purchaser, and no other corporate proceedings on the part of
Purchaser are necessary to authorize this Agreement other than, with respect to
the Merger, the filing of the appropriate merger documents as required by the
DGCL. Parent, as the sole stockholder of Purchaser, will vote to adopt this
Agreement immediately after the execution and delivery of this Agreement. This
Agreement has been duly executed and delivered by Purchaser and, assuming the
due authorization, execution and delivery of this Agreement by the Company,
constitutes the valid and binding obligation of Purchaser, enforceable against
Purchaser in accordance with its terms, subject to: (1) laws of general
application relating to bankruptcy, insolvency and the relief of debtors; and
(2) rules of law governing specific performance, injunctive relief and other
equitable remedies.
4.3. Non-Contravention; Consents; Certain Contract Matters. The execution
and delivery of this Agreement by Parent and Purchaser, and the consummation by
Parent or Purchaser of the Offer, the Merger and the other transactions
contemplated by this Agreement, will not: (a) cause a violation of any of the
provisions of the certificate of incorporation or bylaws of Parent or Purchaser;
or (b) cause a violation by Parent or Purchaser of any Legal Requirement
applicable to Parent or Purchaser; except in the case of clause (b) as would not
be reasonably likely to prevent or materially delay the consummation of any of
the transactions contemplated herein. Except (i) as may be required by the
Securities Act, the Exchange Act, the DGCL, the HSR Act or the antitrust or
competition laws of foreign jurisdictions, or (ii) as set forth on Part 4.3 of
the disclosure schedule delivered to the Company on the date of this Agreement
(the "Parent Disclosure Schedule"), Parent is not required to make any filing
with or to obtain any consent from any Person in connection with the execution
and delivery of this Agreement by Parent or Purchaser or, the consummation by
Parent or Purchaser of any of the transactions contemplated by this Agreement,
except where the failure to make any such filing or obtain any such consent
would not be reasonably likely to prevent or materially delay the consummation
of any of the transactions contemplated herein. No vote of Parent's stockholders
is necessary to adopt this Agreement or to approve any of the transactions
contemplated by this Agreement. Part 4.3 of the Parent Disclosure Schedule sets
forth the name of any Person who, to the Parent's knowledge, is offering
products of the type set forth in such Part 4.3 thereon to whom Parent or any
Subsidiary of Parent has licensed its Intellectual Property Rights for use in
such products.
4.4. Not an Interested Stockholder. Neither Parent nor any of its
Affiliates is an "interested stockholder" (as such term is defined in Section
203 of DGCL) of the Company.
4.5. Financing. Parent has available cash resources and financing in an
amount sufficient to enable Purchaser to purchase Company Shares pursuant to the
Offer, to consummate the Merger and to otherwise perform its obligations under
this Agreement. Without limiting the foregoing, Purchaser has delivered to the
Company true and complete copies of executed commitment letters, dated May 14,
2007 from General Electric Capital Corporation, UBS Loan Finance LLC and UBS
Securities LLC (the "Debt Commitment Letters"), pursuant to which the lender
parties thereto have committed, subject to the terms and conditions thereof, to
lend the amounts set forth therein for the purpose of funding the consideration
payable by Parent and the Purchaser in respect of the Company Shares and Company
Options (the "Debt Financing"). As of the date of this Agreement: (i) the Debt
Commitment Letters have not been amended or modified; and (ii) none of the
commitments contained in the Debt Commitment Letters have been withdrawn or
rescinded in any respect. There are no conditions precedent or other
contingencies related to the funding by such lenders of the full amount of the
Debt Financing, other than as set forth in or contemplated by the Debt
Commitment Letters. As of the date of this Agreement, and assuming the accuracy
of the Company's representations set forth in this Agreement and the Company's
compliance with its covenants set forth in this Agreement, in each case such
that the conditions to the Debt Financing contemplated by the Debt Commitment
Letters are satisfied, neither Parent nor Purchaser has any reason to believe
that it will be unable to satisfy on a timely basis any term or condition to be
satisfied by it contained in the Debt Commitment Letters. Parent or Purchaser
will fully pay any and all commitment fees that are incurred and are due and
payable in connection with the Debt Financing as and when they become payable.
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4.6. Ownership of Company Shares. As of the date hereof, Parent and its
Affiliates directly and indirectly own 750,000 Company Shares, beneficially or
otherwise, including any securities, contracts or obligations convertible into
or exercisable or exchangeable for Company Shares.
4.7. Offer Documents. The Offer Documents will comply as to form in all
material respects with the requirements of the Exchange Act. On the date filed
with the SEC, on the date first published, sent or given to holders of Company
Shares or at any other time at or prior to the Acceptance Time, the Offer
Documents will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, except that no representation, warranty or covenant
is made by Parent or Purchaser with respect to statements made or incorporated
therein based on any written information supplied by the Company expressly for
inclusion or incorporation by reference in the Offer Documents.
4.8. Information in Schedule 14D-9 and Proxy Statement. None of the
written information supplied or to be supplied by or on behalf of Parent
expressly for inclusion in the Schedule 14D-9 will, at the time the Schedule
14D-9 is mailed to the stockholders of the Company, or at any other time at or
prior to the Acceptance Time, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they are made, not misleading. If the Special Meeting is to be held
pursuant to Section 5.4, none of the written information supplied or to be
supplied by or on behalf of Parent expressly for inclusion in the Proxy
Statement will, at the time the Proxy Statement is mailed to the stockholders of
the Company or at the time of the Special Meeting (or any adjournment or
postponement thereof), contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances under which
they are made, not misleading.
SECTION 5. Covenants
5.1. Interim Operations of The Company. Except: (i) to the extent Parent
shall otherwise consent in writing (which consent may be withheld or delayed in
Parent's sole discretion, except in the case of Section 5.1(f), 5.1(m), 5.1(n),
5.1(o), or 5.1(u), for which Parent may not unreasonably withhold or delay its
consent); (ii) as set forth in Part 5.1 of the Company Disclosure Schedule; or
(iii) as expressly required by this Agreement, the Company agrees that, during
the period from the date of this Agreement through the earlier of the time the
designees of Parent have been elected to, and shall constitute a majority of,
the Company Board pursuant to Section 1.4 or the date of the valid termination
of this Agreement in accordance with Section 7.1, the Company shall and shall
cause each Company Subsidiary to use commercially reasonable efforts to: (A)
conduct their businesses in the Ordinary Course of Business, (B) preserve intact
their present business organizations, (C) maintain satisfactory relations with
and keep available the services of their current officers and other key
employees, (D) preserve existing relationships with material customers, lenders,
suppliers, distributors and others having material business relationships with
the Company and or any Company Subsidiary and (E) not:
(A) amend its certificate of incorporation or bylaws (except as
required under Section 1.4) or equivalent organizational documents;
(B) split, combine, subdivide or reclassify any shares of its capital
stock;
(C) declare, set aside or pay any dividend (whether payable in cash,
stock or property) with respect to any shares of its capital stock (except
with respect to shares of the capital stock of a Company Subsidiary that is
directly or indirectly wholly-owned by the Company);
(D) form any Subsidiary;
(E) issue, sell, pledge, transfer, deliver, dispose of or encumber any
shares of, or securities convertible or exchangeable for, or options or
rights to acquire, any shares of its capital stock, voting securities,
phantom stock, phantom stock rights, stock based performance units or other
securities that derive their value by reference to such capital stock or
voting securities, other than: (i) the issuance of Company Shares upon the
exercise of Company Options outstanding as of the date of this Agreement
and
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listed in Part 3.5 of the Company Disclosure Schedule in accordance with
their present terms; (ii) the issuance of Company Shares upon the exercise
of Company Rights; (iii) the grant of Company Options, with a per share
exercise price equal to the closing price of a Company Share on the date of
grant, to employees in the Ordinary Course of Business, not to exceed
options to purchase more than 75,000 Company Shares in the aggregate; and
(iv) the issuance of Company Shares under the Company ESPP;
(F) transfer, lease, or license to any third party, or Encumber
(except for Permitted Encumbrances), any material assets of the Company or
any Company Subsidiary other than: (i) sales in the Ordinary Course of
Business; (ii) leases or rentals of equipment in the Ordinary Course of
Business; (iii) dispositions of obsolete equipment; or (iv) Encumbrances
permitted by Section 5.1(j)(iv) below;
(G) repurchase, redeem or otherwise acquire or offer to repurchase,
redeem or otherwise acquire any shares of its capital stock, except shares
repurchased from employees or former employees of the Company or any
Company Subsidiary upon the exercise of repurchase rights pursuant to and
in accordance with the terms of a Contract in effect on the date of this
Agreement (a true and complete copy of which has been made available to
Parent);
(H) acquire (whether pursuant to merger, stock or asset purchase or
otherwise) or lease (i) any asset or assets in one transaction or any
series of related transactions involving payments (whether to be made at or
after the time of such transaction or transactions) in excess of $1,000,000
individually or $10,000,000 in the aggregate or that would adversely affect
the ability of Parent or the Company to obtain approval of the Merger under
the HSR Act or the antitrust or anti-competition Legal Requirements of
foreign countries, except for (A) purchases of raw materials, equipment and
supplies in the Ordinary Course of Business or (B) capital expenditures
(which are subject to subsection (u) below), or (ii) any equity interests
in any Person or any business or division of any Person (except for
marketable securities acquired by the Company from time to time in
connection with its normal cash management activities) or all or
substantially all of the assets of any Person (or business or division
thereof);
(I) merge or consolidate with any Person (other than a merger among
wholly-owned Company Subsidiaries), or enter into any agreement with
respect to the voting of its capital stock or other securities held by the
Company or any Company Subsidiary;
(J) incur, issue, repurchase, modify or assume any Indebtedness or
guarantee any such Indebtedness, except for: (i) short-term borrowings
incurred in the Ordinary Course of Business made or incurred in connection
with the purchase of raw materials, equipment and supplies and on terms
consistent with past practices; and (ii) borrowings pursuant to existing
credit facilities, or pursuant to any modification, renewals or
replacements of any such credit facilities that do not exceed $500,000 in
the aggregate; (iii) borrowings under any new credit facility that do not
exceed $500,000 in the aggregate; and (iv) entry into capital leases in the
Ordinary Course of Business (and the grant of security interests in the
Ordinary Course of Business in connection therewith).
(K) assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, contingently or otherwise) for the
obligations of any other Person; or make any loans, advances or capital
contributions to, or investments in, any other Person other than (A) loans,
advances or capital contributions to, or investments in, a Company
Subsidiary that is directly or indirectly wholly-owned by the Company in
the Ordinary Course of Business, (B) advances to employees in respect of
travel and other expenses in the Ordinary Course of Business, and (C)
investments made by the Company in marketable securities in connection with
its normal cash management activities;
(L) (A) increase benefits under any Company Plan, (B) increase or
otherwise change the method for funding or insuring benefits under any
Company Plan, except as required by applicable Legal Requirements, (C) (i)
establish, adopt, enter into, amend or terminate any Company Plan that is
an "employee benefit plan" as defined in Section 3(3) of ERISA or other any
other arrangement that would be an employee benefit plan under ERISA if it
were in existence as of the date of this Agreement, except as required by
applicable Legal Requirements, or (ii) establish, adopt, enter into, amend
or terminate any collective bargaining agreement, Company Plan that is not
an employee benefit plan under ERISA or any
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plan, agreement, program, policy, trust, fund or other arrangement that
would be a Company Plan that is not an employee benefit plan under ERISA if
it were in existence as of the date of this Agreement, except in the
Ordinary Course of Business or as required by applicable Legal
Requirements, (D) grant any increase in the rates of salaries, compensation
or fringe or other benefits payable to any Executive (other than as
required by applicable Legal Requirements or pursuant to non-discretionary
provisions of Contracts in effect as of the date hereof that have been
disclosed to Parent and, even in the event of Parent's consent to any such
increase, only to the extent that the Compensation Committee has duly
approved such action as an Employment Compensation Arrangement), (E) grant
any increase in the rates of salaries, compensation or fringe or other
benefits payable to any employee other than an Executive, except (i)
regular cost of living increases in the Ordinary Course of Business, (ii)
merit based increases in the Ordinary Course of Business or (iii) equity
adjustments (i.e. market based increases) in an amount that does not exceed
the lesser of (x) 10% of the employee's base salary before the increase or
(y) $10,000 and, in any event, to no more than 20% of the Company's or any
Company Subsidiary's employees as of the date of this Agreement) and
except, with respect to all of the foregoing, for increases that are
required by Legal Requirements or pursuant to non-discretionary provisions
of Contracts in effect as of the date hereof that have been disclosed to
Parent, (F) grant or pay any bonus of any kind or amount whatsoever to any
current or former director or officer or any employee of the Company or any
Company Subsidiary (other than commissions payable to sales personnel in
accordance with plans in effect as of the date of this Agreement and
consistent with past practice and, with respect to employees that are not
officers, pursuant to the non-discretionary provisions of Contracts in
effect as of the date of this Agreement), (G) grant or pay any severance or
termination pay or increase in any manner the severance or termination pay
of any current or former director, officer, employee or consultant of the
Company or any Company Subsidiary outside the Ordinary Course of Business
and other than as required by applicable Legal Requirements or pursuant to
non-discretionary provisions of Contracts in effect as of the date hereof
that have been disclosed to Parent, (H) waive any material restrictions in
any Company Plan or agreements or awards made thereunder, (I) amend or
modify any Company Option, except as required pursuant to this Agreement or
by applicable Legal Requirements, (J) take any action to secure, accelerate
or accelerate the vesting of the payment after the Effective Time of
compensation or benefits under any employee plan, Contract or Company Plan,
other than as required by applicable Legal Requirements or pursuant to non-
discretionary provisions of Contracts in effect as of the date hereof that
have been disclosed to Parent, (K) fail to take such action as would be
reasonable under the circumstances to enforce any rights of the Company or
any Company Subsidiary under any employment agreement, severance agreement,
noncompete agreement, nonsolicitation agreement, covenant not to disclose,
confidential information or other similar agreement with respect to any
current or former employee or independent contractor of the Company or any
Company Subsidiary in effect as of the date of this Agreement, or (L)
materially change any actuarial or other assumption used to calculate
funding obligations with respect to any Company Plan or change the manner
in which contributions to any Company Plan are made or the basis on which
such contributions are determined;
(M) plan, announce, implement or effect any material reduction in
labor force, lay-off, early retirement program, or severance program
involving the termination of employment of employees of the Company or any
Company Subsidiary other than routine employee performance-related
terminations;
(N) settle or compromise any Legal Proceeding (whether or not
commenced prior to the date of this Agreement), other than settlements or
compromises of Legal Proceedings where the amount paid (after giving effect
to insurance proceeds actually received) in settlement or compromise does
not exceed the Company's reserves on its books therefor by more than
$500,000, or for any Legal Proceeding for which the Company has not yet
reserved, in an amount therefor that does not exceed $500,000;
(O) except as expressly permitted under Section 5.1(l), enter into any
new, or materially amend or prematurely terminate any current, Material
Contract or waive, release or assign any material rights or claims under
any Material Contract (except in the Ordinary Course of Business or where
the failure to amend or terminate a Material Contract would, in the
reasonable judgment of the Company Board, have a material adverse impact on
the Company);
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(P) enter into any new or renew or amend any existing Contract
relating to the distribution of the Company's or any of the Company
Subsidiaries' products under which the Company or a Company Subsidiary is
obligated or could be expected to pay or receive more than $250,000 in any
fiscal year and that is not terminable or cancelable by the Company on less
than 91 days notice after the Acceptance Time.
(Q) fail to maintain any material Intellectual Property Rights of the
Company or fail to take such actions as are reasonable to enforce or
prosecute the Intellectual Property Rights of the Company in any material
respect;
(R) change any of its methods of accounting or accounting practices in
any material respect, other than changes required under GAAP;
(S) revalue in any material respect any of its assets, including
writing down the value of inventory or writing down notes or accounts
receivable, other than in the Ordinary Course of Business or as required
under GAAP or any Legal Requirement;
(T) except as provided in Part 5.1(t) of the Company Disclosure
Schedule, (i) make or amend any material Tax election, (ii) settle any
material Tax liability, (iii) change any annual Tax accounting period, (iv)
change any method of Tax accounting, (v) file any material amendment to a
Tax Return, enter into any closing agreement relating to any material Tax,
(vi) surrender any right to claim a material Tax refund, or (vii) consent
to any extension or waiver of the statute of limitations period applicable
to any material Tax claim or assessment;
(U) make any capital expenditure (including pursuant to leases) that
is not contemplated by the capital expenditure budget set forth in Part
5.1(u) of the Company Disclosure Schedule (a "Non-Budgeted Capital
Expenditure"), except that the Company or any Subsidiary of the Company:
(i) may make any Non-Budgeted Capital Expenditure that does not
individually exceed $100,000 in amount; and (ii) may make any Non-Budgeted
Capital Expenditure that, when added to all other Non-Budgeted Capital
Expenditures made by the Company and the Company Subsidiaries since the
date of this Agreement, would not exceed $500,000 in the aggregate;
(V) waive, release or assign any claims or rights of material value;
(W) take any action to exempt any Person from, or make any Person not
subject to, any state takeover law or state law that purports to limit or
restrict business combinations or the ability to acquire or vote shares
(other than Parent, Purchaser or any Subsidiary of Parent or Purchaser);
(X) adopt a plan of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization or other
reorganization of the Company or any Company Subsidiary (other than the
Merger);
(Y) take any action which would, directly or indirectly, restrict or
impair the ability of Parent or Purchaser to vote, or otherwise to exercise
the rights and receive the benefits of a stockholder with respect to,
securities of the Company acquired or controlled or to be acquired or
controlled by Parent or Purchaser;
(Z) change (including by way of amendment, modification, or failure to
renew) any insurance coverage in any material respect, including providing
for self insurance by the Company or any Company Subsidiary for risks and
liabilities for which the Company or any Company Subsidiary formerly held
third party insurance;
(AA) take, or agree in writing or otherwise to take, any action that
would or is reasonably likely to result in any of the conditions to the
Merger set forth in Section 6 hereof or any of the conditions or
requirements to the Offer set forth in Annex I not being satisfied, or
would make any representation or warranty of the Company contained herein
inaccurate in any material respect at, or as of any time prior to, the
Effective Time, or that would materially impair the ability of the Company
to consummate the Merger in accordance with the terms hereof or materially
delay such consummation;
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(BB) pay any success fee to its advisors or agents in connection with
the execution and delivery of this Agreement or the completion of the
transactions contemplated hereby, except pursuant to non-discretionary
provisions of Contracts in effect as of the date of this Agreement; or
(CC) except as permitted in Section 7.1(f), authorize or enter into a
Contract or arrangement to take any of the actions described in clauses
"(a)" through "(bb)" of this sentence.
5.2. No Solicitation.
(A) At all times during the period commencing with the execution and
delivery of this Agreement and continuing until the earlier to occur of the
termination of this Agreement pursuant to Section 7.1 hereof and the Acceptance
Time, the Company shall not, and shall cause all of the Company Subsidiaries and
the Company's and such Company Subsidiaries' directors, officers, employees,
Affiliates, investment bankers, attorneys or other agents or representatives
(collectively, "Representatives") not to (and in any event the Company shall not
authorize any of such Persons to), directly or indirectly (i) solicit, initiate,
knowingly encourage, knowingly induce or knowingly facilitate the making,
submission or announcement of an Acquisition Proposal or Acquisition Inquiry;
(ii) furnish to any Person any non-public information relating to the Company in
response to or in connection with an Acquisition Proposal or Acquisition Inquiry
(for avoidance of doubt, it being understood that the foregoing shall not
prohibit the Company from furnishing, in the Ordinary Course of Business, any
non-public information to (A) any actual or potential customer, supplier,
distributor, licensor, licensee, partner or other Person to the extent necessary
to facilitate any business dealings between the Company and such actual or
potential customer, supplier, distributor, licensor, licensee, partner or other
Person that are unrelated to any Acquisition Proposal or any Acquisition Inquiry
and are not prohibited by the terms of Section 5.1, or (B) a Governmental
Entity); (iii) participate or engage in discussions or negotiations with any
Person with respect to an Acquisition Proposal or Acquisition Inquiry (for
avoidance of doubt, it being understood that the foregoing shall not prohibit
the Company or any of its advisors or representatives from making such Person
aware of the restrictions of this Section 5.2 in response to the receipt of an
Acquisition Proposal, nor shall it prohibit the Company from engaging in
discussions with its advisors or representatives to the extent reasonably
necessary to assist the Company in determining how to properly respond to such
Acquisition Proposal or Acquisition Inquiry); or (iv) except as permitted
pursuant to Section 5.3, approve, endorse or recommend to the Company's
stockholders any Acquisition Proposal; provided, however, that notwithstanding
anything to the contrary contained in this Agreement, at any time prior to the
Acceptance Time, the Company may, directly or indirectly through its
Representatives, (A) engage or participate in discussions or negotiations with
any Person (and may engage or participate in discussions or negotiations with
such Person's Representatives and potential financing sources) that has (1) made
a bona fide Acquisition Proposal in writing that the Company Board determines in
good faith After Consultation constitutes or is reasonably likely to lead to a
Superior Proposal and (2) to the extent the Company is prohibited from
disclosing such discussions or negotiations or the information exchanged in
connection therewith, provided the Company with written acknowledgement that
such discussions or negotiations and the information exchanged in connection
therewith will be disclosed to Parent and its Representatives, and (B) furnish
to any such Person described in clause (A) above (including to such Person's
Representatives and potential financing sources) any non-public information
relating to the Company and its Subsidiaries pursuant to a confidentiality
agreement (whether executed before or after the date of this Agreement), the
terms of which are no less favorable in any material respect to the Company than
those contained in the Confidentiality Agreement (provided that, for the
avoidance of doubt such Confidentiality Agreement is not required to contain
standstill provisions) (it being understood that none of the actions described
in this proviso, shall, to the extent taken in accordance with this proviso, be
prohibited by the preceding terms of this Section 5.2(a)); and provided further,
that in the case of any action taken pursuant to clause (A) or clause (B) above,
(1) the Company Board received such Acquisition Proposal other than as a result
of a breach or violation of the terms of this Section 5.2, (2) the Company Board
shall first have determined in good faith, After Consultation, that the failure
to take such action does or would reasonably be likely to constitute a breach of
its fiduciary obligations to the Company's stockholders under applicable Legal
Requirements; (3) at least 48 hours prior to initially engaging or participating
in any such discussions or negotiations with, or initially furnishing any non-
public information to, such Person, the Company gives Parent written notice of
the identity of such Person and
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all of the material terms and conditions of such Acquisition Proposal and of the
Company's intention to engage or participate in discussions or negotiations
with, or furnish non-public information to, such Person, and (4)
contemporaneously with furnishing any non-public information to such Person, the
Company furnishes such non-public information to Parent (to the extent such
information has not been previously furnished by the Company to Parent). Without
limiting the generality of the foregoing, the Company acknowledges and agrees
that if any Company Subsidiary or Representative of the Company or Company
Subsidiary (whether or not such Person is purporting to act on behalf of the
Company) takes any action that, if taken by the Company, would constitute a
breach of this Section 5.2(a) by the Company, then such action shall be deemed
to constitute a breach of this Section 5.2(a) by the Company.
(B) In addition to the obligations of the Company set forth in Section
5.2(a) hereof, the Company shall promptly, and in all cases within one business
day of its receipt, advise Parent orally (to be confirmed in writing as soon as
practicable thereafter) of the receipt by the Company of any Acquisition
Proposal or Acquisition Inquiry, including the material terms and conditions of
such Acquisition Proposal or Acquisition Inquiry and the identity of the Person
or group making any such Acquisition Proposal or Acquisition Inquiry. The
Company shall keep Parent informed as promptly as practicable (and in any event
within 24 hours) of any material change in the status of or material change in
the proposed terms and conditions of (including all material amendments or
proposed material amendments to), any such Acquisition Proposal or Acquisition
Inquiry. In fulfilling its obligations under this Section 5.2(b), the Company
shall provide or make available promptly (and in any event within 24 hours) to
Parent copies of all written correspondence or other written material, including
material in electronic form, between the Company, any Company Subsidiary or
their respective Representatives and such third party or its Representatives
delivered in connection with any Acquisition Proposal or Acquisition Inquiry.
(C) Upon the execution and delivery of this Agreement, the Company shall
immediately cease and cause to be terminated any existing discussions with any
Person that relate to any Acquisition Proposal or Acquisition Inquiry.
(D) Unless the Company Board shall first have determined in good faith,
After Consultation, that the failure to take the following actions does or would
reasonably be likely to constitute a breach of its fiduciary obligations to the
Company's stockholders under applicable Legal Requirements, the Company (i)
agrees not to release or permit the release of any Person from, or to waive or
permit the waiver of any provision of, any confidentiality, standstill or
similar agreement to which the Company is a party or under which the Company has
any rights and (ii) will use its best efforts to enforce or cause to be enforced
each such agreement at the request of Parent; provided, however, that the
expiration or termination of such agreement or provision of such agreement by
its own terms shall not be considered to be a violation of the foregoing clause
"(i)" or "(ii)" by the Company. The Company also shall promptly (but in no event
later than five business days after the execution of this Agreement) request
each Person that since January 1, 2005 has executed a confidentiality agreement
in connection with its consideration of a possible Acquisition Transaction or
equity investment in the Company to return (or destroy, to the extent permitted
by the terms of the applicable confidentiality agreement) all confidential
information heretofore furnished to such Person by or on behalf of Company,
subject to the terms of the applicable confidentiality agreement; provided
however, that the Company need not take the actions described in this sentence
with respect to any Person if, prior to the date of this Agreement, the Company
has made a request to such Person of the type described in this sentence and on
or after the date of such request the Company has not furnished any additional
Confidential Information to such Person.
5.3. Board Recommendation.
(A) Subject to the terms of Section 5.3(c) hereof, the Company Board shall
(i) recommend that the holders of the Company Shares accept the Offer, tender
their Shares to Purchaser pursuant to the Offer and, if required to consummate
the Merger, adopt this Agreement and the Merger in accordance with the
applicable provisions of DGCL (the "Company Recommendation"), and (ii) include
the Company Recommendation in the Schedule 14D-9 and permit Parent to include
the Company Recommendation in the Offer Documents.
(B) Subject to Section 5.3(c), neither the Company Board nor any committee
thereof shall (i) withdraw, qualify, modify, change or amend in any manner
adverse to the transactions contemplated by this Agreement,
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Parent or Purchaser (including pursuant to the Schedule 14D-9 or any amendment
thereto), the Company Recommendation, the approval by the Company Board of this
Agreement and the transactions contemplated hereby, including the Offer and the
Merger, or the approval by the Compensation Committee of the Company
Compensation Arrangements for purposes of satisfying the requirements of the
non-exclusive safe-harbor in accordance with Rule 14d-10(d)(2) under the
Exchange Act, (ii) fail to reconfirm the Company Recommendation or its approval
of this Agreement, the Offer, the Merger or any other transaction contemplated
by this Agreement promptly, and in any event within two business days, following
Parent's request to do so (A) if Parent makes such request following the time at
which an Acquisition Proposal made by a third party shall have been publicly
announced or shall otherwise have become public (provided that Parent may not
make such a request on more than one occasion with respect to any particular
Acquisition Proposal unless, since any prior such request by Parent, the price
or other material terms of such Acquisition Proposal have changed) or (B) if one
or more members of the Company Board shall have taken any action publicly or
that shall have become public that indicates that such member or members of the
Company Board do not unanimously support the Offer or the Merger), (iii) approve
or recommend (or propose publicly to approve or recommend) any Acquisition
Proposal, (iv) if a tender offer or exchange offer that, if successful, would
result in any Person or "group" (as defined under Section 13(d) of the Exchange
Act) becoming a beneficial owner of ten percent (10%) or more of the outstanding
Company Shares is commenced (other than by Parent or Purchaser), fail to
recommend that the Company's stockholders not tender their Shares in such tender
or exchange offer within five business days following such commencement, (v)
except in connection with a termination of this Agreement pursuant to Section
7.1(f), permit the Company or any Company Subsidiary to enter into any Contract
(other than a confidentiality agreement as contemplated by Section 5.2(d)),
including any letter of intent or understanding, with respect to any Acquisition
Proposal, or (vi) except in connection with a termination of this Agreement
pursuant to Section 7.1(f), resolve or propose to take any action described in
clauses (i) through (v) (each of the foregoing actions described in clauses (i)
through (vi) being referred to as a "Company Change in Recommendation").
(C) Notwithstanding anything to the contrary contained in this Agreement,
the Company Board may effect a Company Change in Recommendation at any time (but
in the case of a Company Change in Recommendation specified in clauses "(ii),"
"(iii)," or "(v)" of such definition, only prior to the Acceptance Time), if and
only if (i) the Company Board has determined in good faith (After Consultation
and after considering in good faith any counter-offer or proposal made by Parent
pursuant to this Section 7.1(f)), that the Company Board is required to effect a
Company Change in Recommendation in order to comply with its fiduciary duties to
the Company's stockholders in accordance with applicable Legal Requirements,
(ii) prior to effecting such Company Change in Recommendation, the Company
provides to Parent a written notice (a "Notice of Recommendation Change") at
least three business days (or, if the Offer is scheduled to expire in a shorter
period after the date the Notice of Recommendation Change is provided, then such
shorter period) prior to making such Company Change in Recommendation of its
intention to make a Company Change in Recommendation. Notwithstanding the
foregoing, the Company shall not enter into any Contract (other than a
confidentiality agreement as contemplated by Section 5.2(d)), with respect to a
Superior Proposal unless this Agreement has been or concurrently is validly
terminated by its terms pursuant to Section 7.1 and Parent has received, by wire
transfer of immediately available funds, any amounts due to Parent pursuant to
Section 7.3.
(D) Without limiting any rights or remedies of Parent or Purchaser set
forth in this Agreement that might exist as a consequence of any such action,
nothing in this Agreement shall prohibit the Company Board from (i) taking and
disclosing to the Company's stockholders a position contemplated by Rule 14e-
2(a) promulgated under the Exchange Act or complying with the provisions of Rule
14d-9 promulgated under the Exchange Act or (ii) making any disclosures to the
Company's stockholders that the Company Board determines in good faith After
Consultation that the Company Board is required to make in order to comply with
its fiduciary duties to the Company's stockholders under Delaware Law.
5.4. Meeting of The Company's Stockholders.
(A) If, following the Acceptance Time, the expiration of any subsequent
offering period provided in accordance with Rule 14d-11 under the Exchange Act,
and any exercise of the Top-Up Option, the approval of the Company's
stockholders is required to effect the Merger, the Company will prepare a Proxy
Statement
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relating to the adoption of this Agreement and approval of the Merger and shall
file the Proxy Statement with the SEC as promptly as practicable; provided that
Parent, Purchaser and their counsel shall be given a reasonable opportunity to
review the Proxy Statement before it is filed with the SEC and the Company shall
give due consideration to all reasonable additions, deletions or changes
suggested thereto by Parent, Purchaser and their counsel with the intention that
the Proxy Statement be in a form ready to print and mail to the stockholders of
the Company as soon as reasonably practicable following the Acceptance Time.
Unless the Company shall have effected a Company Change in Recommendation in
accordance with Section 5.3(c), the Company shall include in the Proxy Statement
the recommendation of the Company Board that stockholders of the Company vote in
favor of the adoption of this Agreement and the approval of the Merger. The
Company shall use its best efforts to obtain and furnish the information
required to be included by the SEC in the Proxy Statement and, after
consultation with Parent and Purchaser, respond promptly to any comments made by
the SEC with respect to the Proxy Statement. The Company shall provide Parent,
Purchaser and their counsel with copies of any written comments, and shall
inform them of any oral comments, that the Company or its counsel may receive
from time to time from the SEC or its staff with respect to the Proxy Statement
promptly after the Company's receipt of such comments, and any written or oral
responses thereto. Parent, Purchaser and their counsel shall be given a
reasonable opportunity to review any such written responses and the Company
shall give due consideration to all reasonable additions, deletions or changes
suggested thereto by Parent, Purchaser and their counsel. The Company, on the
one hand, and Parent and Purchaser, on the other hand, agree to promptly correct
any information provided by it for use in the Proxy Statement if and to the
extent that it shall have become false or misleading in any material respect or
as otherwise required by law and, the Company further agrees to take all steps
necessary to cause the Proxy Statement, as so corrected (if applicable), to be
filed with the SEC and, if any such correction is made following the mailing of
the Proxy Statement as provided in Section 5.4(b)(ii), mailed to holders of
Company Shares, in each case as and to the extent required by the Exchange Act.
(B) The Company, acting through the Company Board, shall, promptly
following the Acceptance Time and in accordance with applicable Legal
Requirements:
(i) (A) duly set a record date for, call and establish a date for, and
give notice of, the Special Meeting (with the record date and meeting date
each set for a date as soon as reasonably practicable after the Acceptance
Time and in consultation with Purchaser), and (B) convene and hold the
Special Meeting;
(ii) if required by applicable Legal Requirements, cause the
definitive Proxy Statement to be mailed to its stockholders; and
(iii) unless the Company has effected a Company Change in
Recommendation in accordance with Section 5.3(c), use its best efforts to
solicit from its stockholders proxies in favor of the adoption of this
Agreement and the approval of the Merger and take all other action
reasonably necessary or advisable to secure the approval of stockholders
required by the DGCL and any other applicable Legal Requirements to effect
the Merger.
At the Special Meeting, Parent shall ensure that all Company Shares owned
beneficially or of record by Parent, Purchaser or any of Parent's other
Affiliates will be voted in favor of the adoption of this Agreement and approval
of the Merger.
(C) Notwithstanding anything to the contrary contained in this Agreement,
if, at any time after the Acceptance Time, the Company Shares beneficially owned
by Purchaser, together with any Company Shares beneficially owned by Parent and
Parent's other Affiliates, shall collectively represent at least 90% of the
outstanding Company Shares, then Parent shall take all actions necessary and
appropriate to cause the Merger to become effective as soon as practicable
without a meeting of the Company's stockholders in accordance with Section 253
of the DGCL.
5.5. Filings; Other Action.
(A) Each of the Company, Parent and Purchaser shall: (i) promptly make and
effect all registrations, filings and submissions required to be made or
effected by it pursuant to the HSR Act, the Exchange Act and other applicable
Legal Requirements with respect to the Offer and the Merger, and in any event,
filings under
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the HSR Act, shall be made within five (5) calendar days of the date hereof (or,
in each case, the next succeeding business day); and (ii) use their commercially
reasonable efforts to cause to be taken, on a timely basis, all other actions
necessary or appropriate for the purpose of consummating and effectuating the
transactions contemplated by this Agreement. Without limiting the generality of
the foregoing, each of Parent and Purchaser: (A) shall promptly provide all
information requested by any Governmental Entity in connection with the Offer,
the Merger or any of the other transactions contemplated by this Agreement; (B)
shall use its commercially reasonable efforts to promptly take, and cause its
Affiliates to take, all actions and steps necessary to obtain any clearance or
approval required to be obtained from the U.S. Federal Trade Commission, the
U.S. Department of Justice, the U.S. Department of State, the U.S. Department of
Defense, any state attorney general, any foreign competition authority or any
other Governmental Entity in connection with the transactions contemplated by
this Agreement; and (C) shall, if requested by the Company at any time prior to
the expiration of the initial waiting period under the HSR Act, withdraw its HSR
filing with respect to the Offer and the Merger and resubmit an updated version
of such filing to the U.S. Department of Justice and the U.S. Federal Trade
Commission within two business days. Notwithstanding anything set forth in this
Agreement, in connection with the receipt of any necessary approvals or
clearances of a Governmental Entity (including under the HSR Act), neither
Parent nor the Company shall be required to sell, hold separate or otherwise
dispose of or conduct their business in a specified manner, or agree to sell,
hold separate or otherwise dispose of or conduct into or agree to enter into a
voting trust arrangement, proxy arrangement, "hold separate" agreement or
arrangement or similar agreement or arrangement with respect to the assets,
operations or conduct of their business in a specified manner, or permit the
sale, holding separate or other disposition of, any assets of Parent, the
Company or their respective Subsidiaries.
(B) Without limiting the generality of anything contained in Section 5.5(a)
or 5.5(c), each party hereto shall: (i) give the other parties prompt notice of
the making or commencement of any request, inquiry, investigation, action or
Legal Proceeding by or before any Governmental Entity with respect to the Offer
or the Merger or any of the other transactions contemplated by this Agreement;
(ii) keep the other parties informed as to the status of any such request,
inquiry, investigation, action or Legal Proceeding; and (iii) promptly inform
the other parties of any communication to or from the Federal Trade Commission,
the Department of Justice or any other Governmental Entity regarding the Offer
or the Merger. Each party hereto will consult and cooperate with the other
parties and will consider in good faith the views of the other parties in
connection with any analysis, appearance, presentation, memorandum, brief,
argument, opinion or proposal made or submitted in connection with any such
request, inquiry, investigation, action or Legal Proceeding. In addition, except
as may be prohibited by any Governmental Entity or by any Legal Requirement, in
connection with any such request, inquiry, investigation, action or Legal
Proceeding, each party hereto will permit authorized representatives of the
other parties to be present at each meeting or conference relating to such
request, inquiry, investigation, action or Legal Proceeding and to have access
to and be consulted in connection with any document, opinion or proposal made or
submitted to any Governmental Entity in connection with such request, inquiry,
investigation, action or Legal Proceeding.
(C) Without limiting the generality of anything contained in Section 5.5(a)
or 5.4(b), but subject thereto, Parent and Purchaser shall use their
commercially reasonable efforts to cause all Offer Conditions to be satisfied on
a timely basis (to the extent the satisfaction of such Offer Conditions is
within Parent's or Purchaser's direct or indirect control) and to cause
Purchaser to purchase Company Shares pursuant to the Offer on the earliest
possible date.
5.6. Access. Upon reasonable notice, the Company shall, and shall cause
its Subsidiaries to, afford Parent and Parent's Representatives reasonable
access, during normal business hours throughout the period prior to the
Effective Time, to its books and records and, during such period, the Company
shall, and shall cause its Subsidiaries to, furnish promptly to Parent all
readily available information concerning its business as Parent may reasonably
request; provided, however, that none of the Company or any of its Subsidiaries
shall be required to permit any inspection or other access, or to disclose any
information, that in its reasonable judgment would: (a) constitute, or result in
any, disclosure (whether or not to a third party) of any trade secrets
concerning its technical processes, including formulas, compositions of
reagents, methods for production and use of reagents, computer processes
(including source code) used for research purposes, methods for
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production of polypeptides or nucleic acids (including antibodies), and
sequences of specific polypeptides or nucleic acids (including antibodies); (b)
result in the disclosure of any trade secrets of third parties; (c) violate any
of its obligations with respect to confidentiality; (d) jeopardize protections
afforded it under the attorney-client privilege or the attorney work product
doctrine; (e) violate any Legal Requirement; or (f) materially interfere with
the conduct of its business; provided, however, that in each of the forgoing
cases, the Company shall use commercially reasonable efforts to provide Parent
with any such inspection, access or disclosure (except for inspection, access
and disclosure with respect to the Confidential Agreement), provided to (i) any
third party as set forth in Item 4(b) of the Company's Schedule 14D-9 filed with
the SEC on April 2, 2007, as amended from time to time, and/or (ii) any third
party in compliance with the terms of this Agreement, including Section 5.2
hereof. All information obtained by Parent or and its Representatives pursuant
to this Section 5.6 shall be treated as "Confidential Information" for purposes
of the Confidentiality Agreement and shall not affect or be deemed to modify any
representation or warranty made by the Company in this Agreement. The Company
shall furnish promptly to Parent a copy of each report, schedule, registration
statement and other document filed by it or its Subsidiaries during such period
pursuant to the requirements of federal or state securities Legal Requirements
to the extent that such report, schedule, registration statement or other
document is not publicly available on XXXXX.
5.7. Interim Operations of Purchaser. During the period of time between
the date of this Agreement and the Effective Time, Purchaser shall not engage in
any activities of any nature except as provided in or contemplated by this
Agreement.
5.8. Publicity. Except as otherwise required by Legal Requirements, the
initial press release relating to this Agreement shall be a joint press release
issued by the Company and Parent, and thereafter the parties hereto shall
consult with each other and give due consideration to any reasonable additions,
deletions or changes suggested by the other party and its counsel prior to
issuing any press releases or otherwise making public statements with respect to
the transactions contemplated by this Agreement and prior to making any filings
with any Governmental Entity with respect to the transactions contemplated by
this Agreement; provided, however, that the Company need not consult with Parent
in connection with any press release or public statement to be issued or made
with respect to any Acquisition Proposal or with respect to any Company Change
in Recommendation. The Company and its counsel shall be given a reasonable
opportunity to review and comment on any materials that are to be presented
during any road shows conducted in connection with the financing of the
transactions contemplated herein, and Parent shall give due consideration to all
reasonable additions, deletions or changes suggested thereto by the Company and
its counsel. Notwithstanding anything to the contrary contained in this Section
5.8, Parent and Purchaser may utilize such materials in substantially the form
presented (after consideration of any comments received from the Company or its
counsel) and make public statements consistent with such materials during the
road show, without any further consultation, approval, review or commentary from
the Company or its counsel.
5.9. Stock Options/ESPP.
(A) Pursuant to this Agreement, each Company Option (other than any options
granted under the Company ESPP) outstanding immediately prior to the Effective
Time shall become fully vested and exercisable at the Effective Time; provided,
however, that, to the extent consistent with applicable Legal Requirements, any
Company Option held by a person who, immediately prior to the Effective Time,
does not have a status that entitles such person to accrue service towards
increased vesting in such Company Option (such as a person on a leave of absence
or a part-time employee) shall not become fully vested and exercisable unless
and until such person returns to a status that would entitle such person to
accrue service towards increased vesting in such Company Option. Except as
provided in Section 5.9(b) below, each Company Option outstanding as of the
Effective Time shall be assumed by Parent and converted into a fully vested and
exercisable option to acquire Parent Shares (any Company Options that are
assumed pursuant to this Section 5.9(a) are referred to as the "Assumed
Options"). Each Assumed Option shall continue to be subject to the terms and
conditions (other than vesting and exercisability terms as modified by this
Section 5.9(a)) set forth in the applicable Company Option Plan and the option
agreement evidencing such Company Option, except that the exercise price and
number of Parent Shares subject to each Assumed Option shall be determined as
follows: (i) the number of Parent Shares subject to such Assumed Option shall be
equal to the
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product of (x) the number of Company Shares subject to the original Company
Option and (y) the Option Conversion Ratio, with fractional shares rounded down
to the nearest whole share and (ii) the per-share exercise price of such Assumed
Option shall be equal to (x) the per-share exercise price of the original
Company Option immediately prior to the Effective Time divided by (y) the Option
Conversion Ratio, rounded up to the nearest whole cent. The Company shall, prior
to the Acceptance Time, take all action and give any notices necessary to effect
the treatment of the Assumed Options contemplated by this Section 5.9(a),
including ensuring that the Compensation Committee has duly approved the
accelerated vesting and assumption of the Assumed Options as an Employment
Compensation Arrangement. It is the intention of the parties that, to the extent
possible under the circumstances, each Assumed Option shall qualify following
the Effective Time as an incentive stock option as defined in Section 422 of the
Code to the extent such Assumed Option qualified as an incentive stock option
prior to the Effective Time.
(B) Notwithstanding anything to the contrary in Section 5.9(a) above, in
the event that the conversion of a Company Option as set forth in Section 5.9(a)
above would result in a per-share exercise price of the corresponding Assumed
Option of less than three percent (3%) of the Parent Share Price at the
Effective Time, then such Company Option shall be cancelled and terminated in
exchange for a cash payment (without interest) equal to the aggregate excess, if
any, of the Offer Price over the exercise price of such Company Option
immediately prior to the Effective Time. The Company shall, prior to the
Acceptance Time, take all action and give any notices necessary to effect the
treatment of the Company Options contemplated by this Section 5.9(b), including
ensuring that the Compensation Committee has duly approved the accelerated
vesting and cash settlement of such Company Options as an Employment
Compensation Arrangement.
(C) The Company shall amend the Company ESPP, as necessary, (i) to provide
that prior to the Effective Time, outstanding purchase rights under the Company
ESPP shall be exercised in accordance with the terms of the Company ESPP and
each Company Share purchased pursuant to such exercise shall by virtue of the
Merger, and without any action on the part of the holder thereof, be converted
into the right to receive the Merger Consideration, and (ii) to provide that, as
and after the date hereof, no further offering periods or purchase periods shall
commence.
(D) Parent shall file with the SEC, as soon as practicable, but in no event
later than 10 business days, following the Effective Time, a registration
statement on Form S-8 with respect to Parent Shares issuable under any Assumed
Options issued under this Section 5.9 and shall use commercially reasonable
efforts to maintain the effectiveness of such registration statement for as long
as there are any Parent Shares issuable thereunder.
5.10. Other Employee Benefits.
(A) Following the Effective Time, any employee who as of the Effective Time
is employed by the Company and the Company Subsidiaries (referred to herein
individually as a "Continuing Employee" and collectively as the "Continuing
Employees") shall continue in the employment of the Parent, the Surviving
Corporation or any Subsidiary of the Parent or Surviving Corporation after the
Effective Time, provided, that to the extent such employment was "at-will"
immediately prior to the Effective Time, such employment shall continue to be
at-will and subject to termination at any time for any or no reason. Nothing in
this Agreement shall be construed to create a right in any Continuing Employee
to employment with Parent, the Surviving Corporation, or any of their respective
Subsidiaries. For the period beginning on the Effective Time through the end of
the calendar year in which the Effective Time occurs, Parent shall provide, or
cause to be provided, to each Continuing Employee compensation and employee
benefits under either the Company Plans or under employee benefit plans and
programs of Parent, the Surviving Corporation or any Subsidiary of Parent or the
Surviving Corporation (the "Parent Plans"), or under any combination of the
Company Plans and the Parent Plans.
(B) With respect to any Parent Plans that provide group medical, dental,
disability or prescription drug coverage in which any Continuing Employees
become eligible to participate after the Effective Time, Parent shall, or shall
cause the Surviving Corporation or their respective Subsidiaries to: (i) waive
(to the extent such Parent Plan is self-insured), or use commercially reasonable
efforts to waive (to the extent such Parent Plan is insured), any exclusions for
pre-existing conditions under such Parent Plans that would result in a lack of
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coverage for any condition for which the applicable Continuing Employee would
have been entitled to coverage under the corresponding Company Plan in which
such Continuing Employee was an active participant immediately before his or her
transfer to the Parent Plan; (ii) waive any coverage waiting periods under any
such Parent Plans to the extent that such periods exceed the corresponding
waiting period under the corresponding Company Plan in which any applicable
Continuing Employee was an active participant immediately before his or her
transfer to any such Parent Plans (after taking into account any prior service
with the Company or its Subsidiaries credited under such Company Plan for
purposes of satisfying such waiting period); (iii) provide each applicable
Continuing Employee with credit for any co-payments deductibles and premiums for
voluntary coverage paid by such Continuing Employee before his or her transfer
to any such Parent Plans (to the same extent such credit was given under the
analogous Company Plans before such transfer) in satisfying any applicable
deductible, out-of-pocket requirements or coverage levels under any such Parent
Plans for the plan year that includes such transfer; provided that, such
Continuing Employee shall be responsible for any applicable co-payments or
premiums for voluntary coverage required to be made under such Parent Plans, and
(iv) provide each applicable Continuing Employee with credit for any unused
account balance in each Company Plan that includes a flexible spending account
before his or her transfer to any analogous Parent Plan for the plan year that
includes such transfer.
(C) Following the Effective Time, Continuing Employees shall be eligible to
participate in a qualified cash or deferred arrangement or arrangements under
Section 401(k) of the Code sponsored by Parent or a Subsidiary of Parent for the
benefit of their eligible employees, provided that Continuing Employees shall
not be entitled to receive credit for past service with the Company or its
Subsidiaries for purposes of determining the amount of company contributions or
vesting under any qualified defined contribution or defined benefit retirement
plans sponsored or maintained by Parent, the Surviving Corporation, or their
respective Subsidiaries. Without limiting the generality of the foregoing,
Continuing Employees shall not be eligible to participate in any Parent Plans
under which new Parent employees are not currently eligible to participate.
(D) Following the Effective Time, Continuing Employees shall receive credit
for past service (calculated under the method applicable to Parent's similarly-
situated employees) with the Company and its Subsidiaries for purposes of
eligibility to participate in the generally applicable severance plan currently
maintained by Parent for its and its Subsidiaries' employees, provided that
Continuing Employees shall be required to enter into Parent's standard release
as a condition to the receipt of any benefits under Parent's severance plan and
shall not be entitled to receive the additional severance benefits under such
plan otherwise provided in consideration for entering into a release. Continuing
Employees covered by a Company Plan providing severance benefits following a
change of control shall be covered by such Company Plan according to its terms,
and following the period of coverage in such Company Plan, shall participate in
the generally applicable severance plan currently maintained by Parent for its
and its Subsidiaries' employees according to the preceding sentence.
(E) Following the Effective Time, Continuing Employees shall be entitled to
carryover or otherwise receive credit under any applicable Parent Plans they may
participate in for any vacation days, sick days, or other paid time off that is
accrued but unused at the Effective Time under the Company Plans. Vacation days,
sick days, or other paid time off that is accrued but unused at the Effective
Time under the Company Plans shall not be reduced as of the Effective Time, but
accruals of Continuing Employees following the Effective Time may be limited to
comply with the applicable policies and programs of Parent and its Subsidiaries.
(F) Except as specifically provided in this Section 5.10, Continuing
Employees shall not receive credit for past service with the Company or its
Subsidiaries for purposes of eligibility to participate in or receive benefits
under any Parent Plans.
(G) Nothing contained in this Section 5.10: (i) shall be construed to
establish, amend or modify any benefit plan, program, agreement or arrangement,
(ii) shall alter or limit Parent's ability to amend, modify or terminate any
benefit plan, program, agreement or arrangement at any time assumed,
established, sponsored or maintained by Parent, (iii) is intended to confer upon
any current or former employee any right to employment or continued employment
for any period of time by reason of this Agreement, or any right to a particular
term or condition of employment, or (iv) is intended to confer upon any
individual (including employees, retirees,
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or dependents or beneficiaries of employees or retirees) any right as a third-
party beneficiary of this Agreement.
5.11. Indemnification; Directors' and Officers' Insurance.
(A) From and after the Acceptance Time, Parent will cause the Surviving
Corporation to honor in all respects the obligations of the Company and the
Company Subsidiaries pursuant to (i) each indemnification agreement in effect on
the date of this Agreement between the Company or any of the Company
Subsidiaries and any Indemnified Party; and (ii) any indemnification provision
and any exculpation provision in favor of an Indemnified Party that is set forth
in the certificate of incorporation or bylaws of the Company and the equivalent
organizational documents of any Company Subsidiary in effect as of the date of
this Agreement.
(B) Through the sixth anniversary of the Effective Time, Parent will cause
Surviving Corporation to be maintain in effect, for the benefit of the Company's
directors and officers that are insured under the Company's current directors'
and officers' liability insurance policy in effect as of the date of this
Agreement (the "D&O Insurance Policy"), the current level and scope of
directors' and officers' liability insurance coverage as set forth in the D&O
Insurance Policy; provided, however, that in no event shall the Surviving
Corporation be required pursuant to this Section 5.11(b) to expend an aggregate
amount in excess of 200% of the annual premium currently payable by the Company
with respect to such current D&O Insurance Policy, it being understood that if
the annual premiums payable for such insurance coverage exceed such amount, the
Surviving Corporation shall be obligated to obtain a policy with the greatest
coverage available for a cost equal to such amount. At any time prior to the
Effective Time, notwithstanding anything to the contrary set forth in this
Agreement, the Company may purchase, and shall purchase at the request of
Parent, a "tail" prepaid policy on the D&O Insurance Policy covering a period of
six years from the Effective Time; provided that the aggregate amount of such
"tail" policy is less than 200% of the annual premium currently payable by the
Company with respect to its current D&O Insurance Policy. In the event that the
Company shall purchase such a "tail" policy prior to the Effective Time, Parent
will cause the Surviving Corporation to maintain such "tail" policy in full
force and effect and continue to honor its respective obligations thereunder, in
lieu of all other obligations of Parent under the first sentence of this Section
5.11(b) for so long as such "tail" policy shall be maintained in full force and
effect.
(C) This Section 5.11 shall survive the Acceptance Time and shall also
survive consummation of the Merger and the Effective Time. This Section 5.11 is
intended to benefit, and may be enforced by, the Indemnified Parties and their
respective heirs, representatives, successors and assigns, and shall be binding
on all successors and assigns of the Surviving Corporation. In the event of any
merger, consolidation or other similar transaction involving the Surviving
Corporation, or in the event of any sale by the Surviving Corporation of all or
substantially all of its assets, the Surviving Corporation shall ensure that an
Entity no less financially viable than the Surviving Corporation remains
responsible for the obligations of the Surviving Corporation under this Section
5.11.
(D) For purposes of this Agreement, each individual who is an officer or
director of the Company at the date of this Agreement or was an officer or
director of the Company within the six years prior to the date of this Agreement
shall be deemed to be an "Indemnified Party."
5.12. Section 16 Matters. Prior to the Effective Time, Parent and the
Company shall take all such steps as may be required to cause any dispositions
of Company Shares (including derivative securities with respect to Company
Shares) resulting from the Merger by each individual who is subject to the
reporting requirements of Section 16(a) of the Exchange Act with respect to the
Company or will become subject to such reporting requirements with respect to
Parent, to be exempt under Rule 16b-3 promulgated under the Exchange Act.
5.13. Rule 14D-10(D). Prior to the Acceptance Time, the Company (acting
through its Compensation Committee) will take all such steps as may be required
to cause each Company Compensation Arrangement entered into by the Company or
the Company Subsidiaries on or after the date hereof with any holder of Company
Shares, including any of the Company's officers, directors or employees,
pursuant to which consideration is paid to such holder, officer, director or
employee to be approved as an Employment
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Compensation Arrangement and to satisfy the requirements of the non-exclusive
safe harbor set forth in Rule 14d-10(d) of the Exchange Act.
5.14. Cooperation Regarding Transition of Business. After the Acceptance
Time, if requested by Parent, the Company will take commercially reasonable
action to cooperate with Parent in the planning and preparation of the
integration of the Company's and Parent's business, including with respect to
the matters identified in Part 5.14 of the Company Disclosure Schedule following
the Acceptance Time. Nothing in this Section 5.14 will require the Company to
take any action in violation of Legal Requirements.
5.15. Termination of Certain Company Plans. At the request of Parent and
prior to the Acceptance Time, the Company will take all necessary corporate
actions to approve and effect the termination of any and all Company Plans
intended to qualify as a qualified cash or deferred arrangement under Section
401(k) of the Code effective immediately preceding the Acceptance Time (provided
that such termination shall not cause the Continuing Employees to fail to be
covered by a qualified cash or deferred arrangement under Section 401(k) of the
Code). Following the Effective Time, Parent shall use commercially reasonable
efforts to cause the Company to continue in effect the Company's Nonqualified
Deferred Compensation Plan, 409A Nonqualified Deferred Compensation Plan,
Director Fee Deferral Program under the Amended and Restated 1996 Stock
Incentive Plan, provided that, Parent may elect to cause the Company to
terminate participant's ability to make future contributions under such plans.
At the request of Parent and prior to the Acceptance Time, the Company shall
take all necessary corporate action to approve and effect the termination of any
substantially similar deferred compensation arrangements within the meaning of
Section 409A of the Code effective immediately preceding the Acceptance Time,
and the payment of all amounts deferred under such plans (including payment in
respect of any stock units granted under the Amended and Restated 1996 Stock
Incentive Plan) as soon as practicable following the Effective Time and in any
event within 12 months of the Acceptance Time. The Company will provide Parent
with evidence that any such plans terminated pursuant to this Section 5.15 have
been so terminated pursuant to resolutions duly adopted by the Company Board or
other duly-designated authority.
5.16. Financing.
(A) Parent and the Purchaser shall use their commercially reasonable
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary, proper or advisable to arrange and obtain the Debt
Financing on the terms and conditions described in the Debt Commitment Letters,
including using commercially reasonable efforts to (i) maintain in effect the
Debt Commitment Letters and negotiate and enter into definitive agreements with
respect to the Debt Financing on the terms and conditions reflected in the Debt
Commitment Letters or on other terms reasonably acceptable to Parent and the
Purchaser, (ii) satisfy on a timely basis all material conditions applicable to
Parent and the Purchaser in such definitive agreements that are within their
control, (iii) consummate the Debt Financing at such time or from time to time
as is necessary for Purchaser to satisfy its obligations under this Agreement,
and (iv) enforce its rights under the Debt Commitment Letters; provided,
however, that Parent or Purchaser shall have the right to substitute alternative
financing for the Debt Commitment Letters with a different letter or a letter
from alternative lenders so long as such substitute letter is subject to
financing conditions that are at least as favorable to Parent and Purchaser as
the financing conditions set forth in the Debt Commitment Letters. In the event
any portion of the Debt Financing becomes unavailable on the terms and
conditions contemplated in the Debt Commitment Letters for any reason, Parent
and the Purchaser shall use their commercially reasonable efforts to obtain
alternative financing on terms no less favorable to Parent and Purchaser than
the Debt Financing from alternative sources ("Alternative Financing") as
promptly as practicable following the occurrence of such event. Parent shall
promptly notify the Company in writing of: (A) the occurrence or existence of
any event, condition, fact or circumstance that could adversely impact the
availability to Parent or Purchaser of the cash resources and/or financing
sufficient to enable Purchaser to acquire the Company Shares pursuant to the
Offer, and otherwise perform its obligations under this Agreement; (B) any
amendment, withdrawal, rescission, breach, violation or non-satisfaction of any
of the covenants, conditions or other terms contained in the Debt Commitment
Letters or any documents incorporated by reference therein; or (C) any
allegation with respect to any of the matters described in clause "(B)" of this
sentence. No notification given to the Company pursuant to this Section 5.16(a)
shall limit or otherwise affect the covenants or obligations of Parent or
Purchaser contained in
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this Section 5.16(a). For the avoidance of doubt, Parent's and the Purchaser's
obligation to consummate the Offer, the Merger and the other transactions
contemplated by this Agreement are not (and shall not be) subject to any
financing condition.
(B) In the period between the date of this Agreement and the Effective
Time, upon request of Parent, the Company shall, and shall use commercially
reasonable efforts to cause its Subsidiaries, and its and their Affiliates and
Representatives to, reasonably cooperate with Parent in connection with its
financing of the transactions contemplated in this Agreement, including using
commercially reasonable efforts to (i) participate in meetings and road shows,
if any; (ii) provide information reasonably requested by Parent relating to such
financing; (iii) assist in the preparation of offering memoranda, private
placement memoranda, prospectuses and similar documents of Parent; and (iv)
obtain the consent of, and customary comfort letters from, Ernst & Young, LLP
(including by providing customary management letters and requesting legal
letters to obtain such consent) if necessary or desirable for Parent's use of
the Company's financial statements. Parent shall promptly, upon request by the
Company, reimburse the Company for all documented out-of-pocket expenses
incurred by the Company or its Affiliates or Representatives in connection with
such cooperation.
5.17. Tax Matters. Upon Parent's request, the Company shall promptly
deliver or make available to Parent complete and accurate copies of all Tax
Returns of the Company and each Company Subsidiary and complete and accurate
copies of all examination reports and statements of deficiencies assessed
against or agreed to by the Company, any Company Subsidiary or any of their
predecessors since its last open Tax year.
5.18. Inverness Payment.
(A) Immediately following the execution of this Agreement, Parent shall pay
to the Company, as reimbursement for its payment of the Company Termination Fee,
without deduction or setoff of any nature, by wire transfer of immediately
available funds to an account designated by the Company, an amount in cash equal
to $54,000,000 (the "Inverness Payment").
(B) If this Agreement is validly terminated by Parent pursuant to Section
7.1(g) or if this Agreement is validly terminated in circumstances requiring
payment of the Termination Fee to Parent pursuant to Section 7.3(a), 7.3(b) or
7.3(c), then the Company shall reimburse Parent for, and in an amount in cash
equal to, the Inverness Payment. Any such reimbursement by the Company shall be
made by wire transfer of same day funds (i) as promptly as possible, following,
and in any event within one business day of, termination pursuant to Section
7.1(g), and (ii) at the time that the Termination Fee is paid to Parent in the
case of a termination of this Agreement in circumstances requiring payment of
the Termination Fee.
(C) The Company shall provide Parent with a copy of the written termination
notice delivered to Xxxxxxx Xxxxxxx in accordance with the terms of the Xxxxxxx
Merger Agreement within 24 hours of the Company's delivery of such notice to
Xxxxxxx Xxxxxxx.
SECTION 6. Conditions to Each Party's Obligation to Effect The Merger
The obligation of each party to effect the Merger shall be subject to the
satisfaction or waiver of the following conditions prior to the Effective Time:
6.1. Stockholder Approval. If adoption of this Agreement by the holders
of Company Shares is required by applicable Legal Requirements, the Merger
Agreement shall have been adopted by the requisite vote of such holders.
6.2. No Injunctions; Laws. (a) No lawsuit shall have been commenced by a
Governmental Entity against the Company or Parent that remains pending and seeks
to prohibit the consummation of the Merger; (b) no injunction shall have been
issued by a court of competent jurisdiction and shall be continuing that
prohibits the consummation of the Merger (an "Order"); and (c) no Legal
Prohibition shall have been enacted since the date of this Agreement and shall
remain in effect.
6.3. Government Consents. Any applicable waiting period under the HSR Act
relating to the Merger shall have expired or been terminated, any antitrust or
competition Legal Requirements applicable to the Merger of any other applicable
jurisdiction shall have expired or been terminated and all other foreign
antitrust
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and competition approvals required to consummate the Merger shall have been
obtained (in the case of foreign Legal Requirements or approvals, only if such
Legal Requirements or approvals: (a) would have suspensory effect, (b) if not
obtained would reasonably be expected to result in material limitations on the
ownership or operation by Parent of the assets of Parent, its Subsidiaries or
the Surviving Corporation or (c) if not obtained, would subject Parent or
Purchaser to the payment of a material fine or penalty.
6.4. Offers Purchased. Purchaser shall have purchased the Company Shares
pursuant to the Offer (provided that this shall not be a condition to Parent's
and Purchaser's obligations if Purchaser shall have failed to purchase or
exchange such Company Shares in violation of this Agreement, notwithstanding the
satisfaction or waiver by Purchaser of all of the conditions to the Offer set
forth in Annex I attached).
SECTION 7. Termination
7.1. Termination. This Agreement may be terminated and the Merger may be
abandoned (before or after the adoption of the Merger Agreement by the
stockholders of the Company):
(A) by mutual consent of the Company (subject to Section 1.5) and
Parent at any time prior to the Acceptance Time;
(B) by Parent or the Company at any time after September 30, 2007 (the
"Outside Date") if the Acceptance Time shall not have occurred on or before
the Outside Date; provided that if the Acceptance Time has not occurred by
September 30, 2007, solely by reason of non-satisfaction of the conditions
set forth in clause (2) of the introductory paragraph of Annex I, then the
Company may extend the Outside Date one or more times up to and including
December 31, 2007; (provided that the right to terminate this Agreement
pursuant to this Section 7.1(b) shall not be available to any party where
the failure of such party (or any Affiliate of such party) to fulfill any
obligation under this Agreement has resulted in the failure of the
Acceptance Time to have occurred on or before the Outside Date);
(C) by Parent or the Company if there shall be any Legal Prohibition
in effect against, prior to the Acceptance Time, the acceptance for payment
of Company Shares tendered pursuant to the Offer or against, prior to the
Effective Time, the consummation of the Merger; provided, however, that a
party shall not be permitted to terminate this Agreement pursuant to this
Section 7.1(c) if the existence of the Legal Prohibition is attributable to
the failure of such party (or any Affiliate of such party) to perform in
any material respect any covenant in this Agreement required to be
performed by such party (or any Affiliate of such party) at or prior to the
Acceptance Time or the Effective Time, as applicable and provided, further,
that the party seeking to terminate this Agreement pursuant to this Section
7.1(c) shall have used its commercially reasonable efforts to prevent such
Legal Prohibition and to cause any such Legal Prohibition to be vacated or
otherwise rendered of no effect;
(D) by Parent or the Company if the Offer (as it may have been
extended pursuant to Section 1.1) expires as a result of the non-
satisfaction of any Offer Condition, or is terminated or withdrawn prior to
the Acceptance Time, without Purchaser having accepted for payment any
Company Shares tendered pursuant to the Offer; provided, however, that a
party shall not be permitted to terminate this Agreement pursuant to this
Section 7.1(d) if the non-satisfaction of any Offer Condition or the
termination or withdrawal of the Offer is attributable to the failure of
such party (or any Affiliate of such party) to fulfill its obligations
under this Agreement;
(E) by Parent at any time prior to the Acceptance Time if: (i) the
Company Board or any committee thereof shall have made a Company Change in
Recommendation; (ii) the Company shall have violated or breached (or be
deemed pursuant to the terms thereof, to have violated or breached) any
provisions of Section 5.2(a) or Section 5.2(d) and such breach has led to
or resulted in an Acquisition Proposal being made, or (iii) the Company
shall have failed to include the Company Recommendation in the Schedule
14D-9 or to permit Parent to include the Company Recommendation in the
Offer Documents;
(F) by the Company at any time prior to the Acceptance Time if the
Company Board authorizes the Company, subject to complying with the terms
of this Agreement, to accept (or to enter into a written agreement for a
transaction constituting) a Superior Proposal; provided that: (i) the
Company received
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such Superior Proposal other than as a result of a breach of or violation
of the terms of Section 5.2, (ii) the Company has not breached or violated
in any material respect the terms of Section 5.2 or Section 5.3 in
connection with such Superior Proposal (or any Acquisition Proposal that
was a precursor thereto), (iii) the Company has provided Parent at least
three business days (the "Matching Period") prior written notice indicating
that the Company intends to accept such Superior Proposal, (iv) prior to
the expiration of such Matching Period, Parent does not make a binding
offer that the Company Board determines in good faith, After Consultation,
is at least as favorable to the Company's stockholders as such Superior
Proposal, (v) immediately prior to (or contemporaneous with) the
termination of this Agreement, the Company pays to Parent the Termination
Fee payable pursuant to Section 7.3(c), and (vi) immediately following the
termination of this Agreement, the Company enters into a definitive
agreement to effect such Superior Proposal;
(G) by Parent at any time prior to the Acceptance Time if: (i) there
shall be an Uncured Inaccuracy in any representation or warranty of the
Company contained in this Agreement or breach of any covenant of the
Company or any of its Affiliates contained in this Agreement, in any case,
such that any Offer Condition contained in paragraph (a) or (b) of Annex I
is not or would reasonably be likely to not be satisfied, (ii) Parent shall
have delivered to the Company written notice of such Uncured Inaccuracy or
breach, and (iii) at least 30 days shall have elapsed since the date of
delivery of such written notice to the Company and such Uncured Inaccuracy
or breach shall not have been cured in all material respects;
(H) by Parent at any time prior to the Acceptance Time if: (i) there
shall have occurred any adverse event or development which, individually or
in the aggregate, has had, and continues to have, a Company Material
Adverse Effect, (ii) Parent shall have delivered to the Company written
notice of such Company Material Adverse Effect, and (iii) either (A) such
Company Material Adverse Effect is not reasonably likely to be cured prior
to the Outside Date or (B) the Company is not using its reasonable best
efforts to cure such Material Adverse Effect prior to the Outside Date;
(I) by the Company at any time prior to the Acceptance Time if: (i)(A)
there shall be an Uncured Inaccuracy in any representation or warranty of
Parent or Purchaser contained in this Agreement or breach of any covenant
of Parent, Purchaser or any of their Affiliates contained in this Agreement
that shall have had or is reasonably like to have, individually or in the
aggregate, a material adverse effect upon Parent's or Purchaser's ability
to consummate the Offer or Merger, or (B) since the date of this Agreement,
there shall have occurred any adverse event or development which,
individually or in the aggregate, has had, and continues to have, a
material adverse effect upon Parent's or Purchaser's ability to consummate
the Offer, (ii) the Company shall have delivered to Parent written notice
of such Uncured Inaccuracy, breach or material adverse effect; and (iii) at
least 30 days shall have elapsed since the date of delivery of such written
notice to Parent and such Uncured Inaccuracy, breach or material adverse
effect shall not have been cured in all material respects;
(J) by the Company at any time prior to the Acceptance Time, if Parent
shall have failed to fully comply with Section 5.18(a) of this Agreement
within 24 hours or, if later, one full business day following the execution
and delivery of this Agreement;
provided, however, that notwithstanding anything to the contrary contained in
this Section 7.1: (1) Parent shall not be permitted to terminate this Agreement
pursuant to Section 7.1(g) if: (A) any material covenant of Parent or Purchaser
contained in this Agreement shall have been breached in any material respect,
and such breach shall not have been cured in all material respects; or (B) there
shall be an Uncured Inaccuracy in any representation or warranty of Parent or
Purchaser contained in this Agreement; and (2) the Company shall not be
permitted to terminate this Agreement pursuant to Section 7.1(i) if: (A) any
material covenant of the Company contained in this Agreement shall have been
breached in any material respect, and such breach shall not have been cured in
all material respects; or (B) there shall be an Uncured Inaccuracy in any
representation or warranty of the Company contained in this Agreement.
7.2. Effect of Termination. In the event of the termination of this
Agreement as provided in Section 7.1, written notice thereof shall forthwith be
given to the other party or parties specifying the provision hereof pursuant to
which such termination is made and this Agreement shall be of no further force
or effect;
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provided, however, that: (a) Section 5.18, this Section 7.2, Section 7.3 and
Section 8 shall survive the termination of this Agreement and shall remain in
full force and effect; and (b) the termination of this Agreement shall not
relieve any party from any liability for any breach of any covenant (including,
for the avoidance of doubt, Parent's obligations pursuant to Section 5.18(a) of
this Agreement and the Company's obligations pursuant to Section 5.18(b) of this
Agreement) or willful breach of any representation or warranty contained in this
Agreement.
7.3. Termination Fee.
(A) If: (i) this Agreement is validly terminated by Parent or the Company
pursuant to Section 7.1(d); (ii) at or prior to the time of the termination of
this Agreement an Acquisition Proposal shall have been publicly announced or
shall have become publicly known; (iii) the number of Company Shares tendered
(and not validly withdrawn) pursuant to the Offer shall not have satisfied the
Minimum Condition; and (iv) within 12 months after the date of termination of
this Agreement, the Company or any Company Subsidiary consummates an Acquisition
Transaction or enters into a Contract to consummate an Acquisition Transaction
that is subsequently consummated, then, within two business days after such
Acquisition Transaction is consummated, the Company shall cause a termination
fee in the amount of $54,000,000 (the "Termination Fee") to be paid to Parent;
provided, however, that solely for purposes of this Section 7.3(a), the term
"Acquisition Transaction" shall have the meaning set forth in the definition of
Acquisition Transaction contained in Exhibit A except that all references to
"15%" shall be deemed to be references to "40%" and all references to "85%"
shall be deemed to be references to "60%".
(B) If this Agreement is validly terminated by Parent pursuant to Section
7.1(e) then, within two business days after such termination, the Company shall
cause the Termination Fee to be paid to Parent.
(C) If this Agreement is terminated by the Company pursuant to Section
7.1(f), prior to (or contemporaneously with) and as a condition to the
effectiveness of such termination, the Company shall pay the Termination Fee to
Parent.
(D) Any payments made under this Section 7.3 shall be made by wire transfer
of immediately available funds to an account designated by the party entitled
thereto. The Company acknowledges and agrees that the agreements contained in
this Section 7.3 are an integral part of the transactions contemplated by this
Agreement, and that, without these agreements, Parent would not enter into this
Agreement. Accordingly, if the Company fails promptly to pay any amount due to
the Parent, pursuant to this Section 7.3, and, in order to obtain such payment,
Parent commences a suit that results in a judgment against the Company for the
Termination Fee, the Company shall pay to Parent its costs and expenses
(including attorneys' fees and expenses) in connection with such suit, together
with interest on the amount due pursuant to this Section 7.3 from the date such
payment was required to be made until the date of payment at a rate of 10% per
annum, or, if lower, the maximum rate permitted to be charged by applicable
Legal Requirements. Except to the extent required by applicable Legal
Requirements, the Company shall not withhold any withholding taxes on any
payment made to Parent under this Section 7.3.
SECTION 8. Miscellaneous Provisions
8.1. Amendment. Subject to Section 1.5, this Agreement may be amended
with the written approval of the respective parties at any time prior to the
Effective Time; provided, however, that after any adoption of this Agreement by
the Company's stockholders, no amendment shall be made which by applicable Legal
Requirements or any rule of any relevant stock exchange requires further
approval of the stockholders of the Company, without such further approval.
8.2. Waiver.
(A) No failure on the part of any party to exercise any power, right,
privilege or remedy under this Agreement, and no delay on the part of any party
in exercising any power, right, privilege or remedy under this Agreement, shall
operate as a waiver of such power, right, privilege or remedy; and no single or
partial exercise of any such power, right, privilege or remedy shall preclude
any other or further exercise thereof or of any other power, right, privilege or
remedy.
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(B) No party shall be deemed to have waived any claim arising out of this
Agreement, or any power, right, privilege or remedy under this Agreement, unless
the waiver of such claim, power, right, privilege or remedy is expressly set
forth in a written instrument duly executed and delivered on behalf of such
party; and any such waiver shall not be applicable or have any effect except in
the specific instance in which it is given.
8.3. No Survival of Representations and Warranties. None of the
representations, warranties, covenants and other agreements of the parties
contained in this Agreement, or contained in any certificate delivered pursuant
to this Agreement or in connection with any of the transactions contemplated by
this Agreement, or any claim with respect thereto, shall survive the Acceptance
Time, except for those covenants, agreements and other provisions contained
herein that by their terms apply or are to be performed in whole or in part
after the Acceptance Time.
8.4. Entire Agreement; Counterparts. This Agreement, the other agreements
referred to herein and the Confidentiality Agreement constitute the entire
agreement of the parties hereto and supersede all prior agreements and
understandings, both written and oral, among or between any of the parties
hereto with respect to the subject matter hereof and thereof. Without limiting
the generality of the foregoing: (a) Parent and Purchaser acknowledge that the
Company has not made and is not making any representations or warranties
whatsoever regarding the subject matter of this Agreement, express or implied,
except as provided in this Agreement or the Company Disclosure Schedule and that
they are not relying and have not relied on any representations or warranties
whatsoever regarding the subject matter of this Agreement, express or implied,
except as provided in this Agreement and the Company Disclosure Schedule; and
(b) the Company acknowledges that Parent and Purchaser have not made and are not
making any representations or warranties whatsoever regarding the subject matter
of this Agreement, express or implied, except as provided in this Agreement, and
that it is not relying and has not relied on any representations or warranties
whatsoever regarding the subject matter of this Agreement, express or implied,
except as provided in this Agreement. This Agreement may be executed in several
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same instrument.
8.5. Applicable Law; Jurisdiction; Waiver of Jury Trial.
(A) This Agreement is made under, and shall be construed and enforced in
accordance with, the Legal Requirements of the State of Delaware applicable to
agreements made and to be performed solely therein, without giving effect to
principles of conflicts of law. The parties hereto agree that any suit, action
or proceeding seeking to enforce any provision of, or based on any matter
arising out of or in connection with, this Agreement or the transactions
contemplated hereby shall be brought in the Court of Chancery of the State of
Delaware, and each of the parties hereby irrevocably consents to the
jurisdiction of such court (and of the appropriate appellate courts therefrom)
in any such suit, action or proceeding and irrevocably waives, to the fullest
extent permitted by Legal Requirements, any objection that it may now or
hereafter have to the laying of the venue of such suit, action or proceeding in
any such court or that any such suit, action or proceeding brought in any such
court has been brought in an inconvenient forum. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by Legal Requirements. Each party to this Agreement
irrevocably consents to service of process in the manner provided for notices in
Section 8.8. Nothing in this Agreement will affect the right of any party to
this Agreement to serve process in any other manner permitted by Legal
Requirements. Each party hereto agrees not to commence any legal proceedings
relating to or arising out of this Agreement or the transactions contemplated
hereby in any jurisdiction or courts other than as provided herein.
(B) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN
CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH
PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO
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REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE EITHER OF SUCH WAIVERS, (B) IT UNDERSTANDS AND HAS CONSIDERED THE
IMPLICATIONS OF SUCH WAIVERS, (C) IT MAKES SUCH WAIVERS VOLUNTARILY, AND (D) IT
HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.5(b).
8.6. Payment of Expenses. Except as set forth in Section 7.3, whether or
not Company Shares are exchanged pursuant to the Offer and whether or not the
Merger is consummated, each party hereto shall pay its own expenses incident to
preparing for, entering into and carrying out this Agreement and the
transactions contemplated hereby. Nothing contained in this Agreement shall be
deemed to limit the right or ability of any party to this Agreement to pay such
expenses, as and when due and payable.
8.7. Assignability; no Third Party Rights. This Agreement shall be
binding upon, and shall be enforceable by and inure to the benefit of, the
parties hereto and their respective successors and assigns. Except as set forth
in Section 5.11 with respect to the Indemnified Parties, nothing in this
Agreement, express or implied, is intended to or shall confer upon any Person,
other than the parties hereto, any right, benefit or remedy of any nature.
8.8. Notices. All notices, requests, demands and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given or made as follows: (a) if sent by registered or certified mail in the
United States return receipt requested, upon receipt; (b) if sent designated for
overnight delivery by nationally recognized overnight air courier (such as DHL
or Federal Express), upon receipt of proof of delivery; (c) if sent by facsimile
transmission before 5:00 p.m. in California, when transmitted and receipt is
confirmed; (d) if sent by facsimile transmission after 5:00 p.m. in California
and receipt is confirmed, on the following business day; and (e) if otherwise
actually personally delivered, when delivered, provided that such notices,
requests, demands and other communications are delivered to the address set
forth below, or to such other address as any party shall provide by like notice
to the other parties to this Agreement:
IF TO PARENT OR PURCHASER:
Inverness Medical Innovations, Inc.
00 Xxxxxx Xxxx
Xxxxx 000
Xxxxxxx, XX 00000
Attention: General Counsel
Facsimile: (000) 000-0000
WITH A COPY (WHICH SHALL NOT CONSTITUTE NOTICE) TO:
Xxxxxxx Procter LLP
Exchange Place
Boston, MA
Attention: Xxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
IF TO THE COMPANY:
Biosite Incorporated
0000 Xxxxxxx Xxxxx Xxxx
Xxx Xxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, Vice President, Legal Affairs
Facsimile: (000) 000-0000
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WITH A COPY TO:
Cooley Godward Kronish LLP
0000 Xxxxxxxx Xxxx
Xxx Xxxxx, XX 00000-0000
Attention: Xxxx Xxxx, Esq.
Facsimile: (000) 000-0000
8.9. Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction. If the final judgment of a court of
competent jurisdiction declares that any term or provision hereof is invalid or
unenforceable, the parties hereto agree that the court making such determination
shall have the power to limit the term or provision, to delete specific words or
phrases or to replace any invalid or unenforceable term or provision with a term
or provision that is valid and enforceable and that comes closest to expressing
the intention of the invalid or unenforceable term or provision, and this
Agreement shall be enforceable as so modified. In the event such court does not
exercise the power granted to it in the prior sentence, the parties hereto agree
to replace such invalid or unenforceable term or provision with a valid and
enforceable term or provision that will achieve, to the extent possible, the
economic, business and other purposes of such invalid or unenforceable term.
8.10. Obligation of Parent. Parent shall ensure that each of Purchaser
and the Surviving Corporation duly performs, satisfies and discharges on a
timely basis each of the covenants, obligations and liabilities of Purchaser and
the Surviving Corporation under this Agreement, and Parent shall be jointly and
severally liable with Purchaser and the Surviving Corporation for the due and
timely performance and satisfaction of each of said covenants, obligations and
liabilities.
8.11. Specific Performance. The parties hereto agree that irreparable
damage would occur in the event any of the provisions of this Agreement were not
to be performed in accordance with the terms hereof and that the parties shall
be entitled to specific performance of the terms hereof in addition to any other
remedies at law or in equity. Each party agrees to waive any requirement for the
posting of, or securing of, a bond in connection with any such remedy.
8.12. Cumulative Remedies. All rights and remedies of either party hereto
are cumulative of each other and of every other right or remedy such party may
otherwise have at law or in equity, and the exercise of one or more rights or
remedies shall not prejudice or impair the concurrent or subsequent exercise of
other rights or remedies.
8.13. Representation by Counsel. Each party hereto represents and agrees
with each other that it has been represented by or had the opportunity to be
represented by, independent counsel of its own choosing, and that it has had the
full right and opportunity to consult with its respective attorney(s), that to
the extent, if any, that it desired, it availed itself of this right and
opportunity, that it or its authorized officers (as the case may be) have
carefully read and fully understand this Agreement in its entirety and have had
it fully explained to them by such party's respective counsel, that each is
fully aware of the contents thereof and its meaning, intent and legal effect,
and that it or its authorized officer (as the case may be) is competent to
execute this Agreement and has executed this Agreement free from coercion,
duress or undue influence.
8.14. Construction.
(A) For purposes of this Agreement, whenever the context requires: the
singular number shall include the plural, and vice versa; the masculine gender
shall include the feminine and neuter genders; the feminine gender shall include
the masculine and neuter genders; and the neuter gender shall include masculine
and feminine genders.
(B) The parties hereto agree that any rule of construction to the effect
that ambiguities are to be resolved against the drafting party shall not be
applied in the construction or interpretation of this Agreement.
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(C) As used in this Agreement, the words "include" and "including," and
variations thereof, shall not be deemed to be terms of limitation, but rather
shall be deemed to be followed by the words "without limitation."
(D) Except as otherwise indicated, all references in this Agreement to
"Sections," "Exhibits," "Annexes" and "Schedules" are intended to refer to
Sections of this Agreement and Exhibits, Annexes and Schedules to this
Agreement.
(E) All references to a document or instrument having been made available
to Parent shall be deemed to include the making available of such document or
instrument to Parent's counsel, to Parent's financial advisor or to any other
representative of Parent.
(F) All references in this Agreement to "$" are intended to refer to U.S.
dollars.
(G) Each reference in this Agreement to a "Contract," "plan," "offer" or
"commitment" shall be deemed to refer only to a Contract, plan, offer or
commitment that is legally binding.
(H) Unless otherwise specifically provided for herein, the term "or" shall
not be deemed to be exclusive.
(I) The titles, captions or headings of the sections and subsections herein
are inserted for convenience of reference only and are not intended to be a part
of or to affect the meaning or interpretation of this Agreement.
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Parent, Purchaser and the Company have caused this Agreement to be executed
as of the date first written above.
INVERNESS MEDICAL INNOVATIONS, INC.
By: /s/ Xxx Xxxxxxxxx
------------------------------------
Name: Xxx Xxxxxxxxx
Title: Chief Executive Officer
INCA ACQUISITION, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------------
Name: Xxxx X. Xxxxxx
Title: Secretary
BIOSITE INCORPORATED
By: /s/ Xxx X. Xxxxxxxxxxxx
------------------------------------
Name: Xxx X. Xxxxxxxxxxxx
Title: Chief Executive Officer
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ANNEX I
CONDITIONS OF THE OFFER
Purchaser shall not be obligated to accept for payment, and (subject to the
rules and regulations of the SEC) shall not be obligated to pay for, any Company
Shares tendered pursuant to the Offer (and not theretofore accepted for payment
or paid for) unless, prior to the expiration of the Offer (as it may have been
extended pursuant to Section 1.1(d) of the Agreement):
(1) there shall have been tendered and not validly withdrawn Company
Shares that, considered together with all other Company Shares (if any)
beneficially owned by Parent and its Affiliates, represent a majority of
the total number of Company Shares outstanding at the time of the
expiration of the Offer (determined on a fully diluted basis);
(2) any applicable waiting period under the HSR Act relating to the
Offer shall have expired or been terminated, any antitrust or competition
Legal Requirements of any other applicable jurisdiction shall have expired
or been terminated and all other foreign antitrust and competition
approvals required to consummate the Offer shall have been obtained (in the
case of foreign Legal Requirements or approvals, only if such Legal
Requirements or approvals: (a) would have suspensory effect, (b) if not
obtained would reasonably be expected to result in material limitations on
the ownership or operation by Parent of the assets of Parent, its
Subsidiaries or the Surviving Corporation or (c) if not obtained, would
subject Parent or Purchaser to the payment of a material fine or penalty).
The condition set forth in clause "(1)" above is referred to as the
"Minimum Condition."
Furthermore, Purchaser shall not be required to accept for payment, and
(subject to the rules and regulations of the SEC) shall not be obligated to pay
for, any Company Shares tendered pursuant to the Offer (and not theretofore
accepted for payment or paid for) if, upon the expiration of the Offer (as it
may have been extended pursuant to Section 1.1 of the Agreement) and before
acceptance of such Company Shares for payment, any of the following conditions
exists and is continuing, regardless of the circumstances giving rise to such
condition:
(a) any one or more representations and warranties of the Company set
forth in the Agreement shall be inaccurate in any respect and such
inaccuracies, individually or in the aggregate, shall have had, and shall
continue to have, a Company Material Adverse Effect; provided, however,
that the existence of such inaccuracy shall be determined without giving
effect to any "Company Material Adverse Effect" or other materiality
qualifications contained in such representations and warranties;
(b) the covenants of the Company contained in the Agreement that are
required to have been performed by the Company prior to the Acceptance Time
shall not have been performed in all material respects; or
(c) since the date of this Agreement, there shall have occurred any
adverse event or development which, individually or in the aggregate, has
had, or is reasonably likely to have, a Company Material Adverse Effect.
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EXHIBIT A
CERTAIN DEFINITIONS
For purposes of the Agreement (including Annex I and this Exhibit A):
ACQUISITION INQUIRY. "Acquisition Inquiry" shall mean an inquiry,
indication of interest or request for information (other than an inquiry,
indication of interest or request for information made or submitted by Parent or
Purchaser) that would reasonably be expected to lead to an Acquisition Proposal.
ACQUISITION PROPOSAL. "Acquisition Proposal" shall mean any offer or
proposal (other than an offer or proposal made or submitted by Parent or
Purchaser) relating to a possible Acquisition Transaction.
ACQUISITION TRANSACTION. "Acquisition Transaction" shall mean any
transaction or series of related transactions (other than the transactions
contemplated by this Agreement) involving or resulting in: (i) any acquisition
or purchase from the Company by any Person or "group" (as defined in or under
Section 13(d) of the Exchange Act), directly or indirectly, of more than 15% of
the total outstanding voting securities of the Company, or any tender offer or
exchange offer that, if consummated, would result in the Person or "group" (as
defined in or under Section 13(d) of the Exchange Act) making such offer
beneficially owning 15% or more of the total outstanding voting securities of
the Company; (ii) any merger, consolidation, share exchange, business
combination, acquisition of securities, recapitalization, tender offer, exchange
offer or other similar transaction involving the Company pursuant to which the
stockholders of the Company immediately prior to the consummation of such
transaction would hold less than 85% of the equity interests in the surviving or
resulting entity of such transaction immediately after consummation thereof;
(iii) any sale, lease, exchange, transfer, license, acquisition or disposition
of more than 15% of the assets of the Company (including the interest of the
Company in the Company Subsidiaries) (measured by either book or fair market
value thereof) or the net revenues or net income of the Company; or (iv) any
liquidation, dissolution, recapitalization or other significant corporate
reorganization of the Company.
AFFILIATE. A Person shall be deemed to be an "Affiliate" of another Person
if such Person directly or indirectly controls, is directly or indirectly
controlled by or is directly or indirectly under common control with such other
Person.
AFTER CONSULTATION. "After Consultation" by a Person shall mean after
consultation with a financial advisor of nationally recognized reputation and
such Person's outside legal counsel.
AGREEMENT. "Agreement" shall mean the
Agreement and Plan of Merger to
which this Exhibit A is attached, together with Annex I and this Exhibit A, as
such
Agreement and Plan of Merger (including Annex I and this Exhibit A) may be
amended from time to time.
XXXXXXX. "Xxxxxxx" shall mean Xxxxxxx Xxxxxxx, Inc., a Delaware
Corporation.
XXXXXXX MERGER AGREEMENT. "Xxxxxxx Merger Agreement" shall mean that
certain
Agreement and Plan of Merger dated as of March 24, 2007, as amended on
May 1, 2007, by and between the Company, Xxxxxxx and Xxxxxxx Subsidiary, as may
have been amended from time to time thereafter.
XXXXXXX SUBSIDIARY. "Xxxxxxx Subsidiary" shall mean Louisiana Acquisition
Sub, Inc., a Delaware corporation.
CLIA. "CLIA" shall mean the Clinical Laboratory Improvement Amendments of
1988 or any successor statutes.
CODE. "Code" shall mean the Internal Revenue Code of 1986, as amended.
COMPANY BOARD. "Company Board" shall mean the board of directors of the
Company in office at any given time.
COMPANY COMPENSATION ARRANGEMENT. "Company Compensation Arrangement" shall
mean (i) any employment agreement, severance agreement or change of control
agreement between the Company or a Company Subsidiary and any holder of Company
Shares and any amendments thereto entered into during
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the 12 months immediately prior to, on, or after, the date of this Agreement,
(ii) any Company Options or other equity awards awarded, or any acceleration of
vesting of any Company Options or other unvested equity awards during the 12
months immediately prior to the date of this Agreement; (iii) the treatment of
Company Options under Section 5.9 hereof; (iv) the Non-competition, Non-
disclosure and Intellectual Property Assignment Agreements, dated as of the date
hereof, among Parent, Purchaser and certain employees of the Company; (v) the
provision of employee benefits as specified in Section 5.10 hereof; (vi) the
provision of the D&O Insurance Policy for the benefit of the Company's directors
and officers as specified in Section 5.11(b) hereof; and (vii) any other plan,
program, agreement or arrangement between the Company and a holder of Company
Shares that is an Employment Compensation Arrangement.
COMPANY MATERIAL ADVERSE EFFECT. "Company Material Adverse Effect" shall
mean any change, effect, development, circumstance, condition or worsening
thereof ("Effect") that, individually or when taken together with all other
Effects that exist at the date of determination, (i) has had or would reasonably
be likely to have a material adverse effect on the business, operations, results
of operations or condition (financial or otherwise) of the Company and the
Company Subsidiaries, taken as a whole; or (ii) would reasonably be expected to
directly or indirectly materially impair the validity or enforceability of this
Agreement, prevent or materially delay the consummation of the transactions
contemplated by this Agreement or subject Parent or Purchaser to criminal or
material civil liability in connection with the transactions contemplated by
this Agreement; provided, however, that none of the following shall be deemed
either alone or in combination to constitute, and none of the following shall be
taken into account in determining whether there has been or would be, a Company
Material Adverse Effect:
(A) any Effect that results from general economic, business, financial
or market conditions in the United States or global economy as a whole; (B)
any Effect arising from or otherwise relating to any of the industries or
industry sectors in which the Company or any of the Company Subsidiaries
operates to the extent that it does not disproportionately affect the
Company and the Company Subsidiaries (taken as a whole) relative to other
participants in the medical device industry; (C) any Effect arising from or
otherwise relating to any act of terrorism, war, national or international
calamity or any other similar event; (D) any Effect (including any loss of
employees, any cancellation of or delay in customer orders or any
litigation) arising from or otherwise relating to the announcement or
pendency of this Agreement, the Offer, the Merger or any offer, proposal or
possible transaction with, by or involving Parent, Purchaser, Xxxxxxx or
any affiliate thereof; (E) the failure of the Company to meet internal or
analysts' expectations or projections, in and of itself (for the avoidance
of doubt, this clause (E) shall not preclude the underlying cause of any
such failure to meet internal or analysts' expectations or projections
being taken into account in determining whether there has been a Material
Adverse Effect); (F) any Effect arising from or otherwise relating to any
action required by this Agreement to be taken by the Company or any Company
Subsidiary; or (G) a decline in the Company's stock price, in and of itself
(for the avoidance of doubt, this clause (G) shall not preclude Parent from
asserting that the underlying cause of any such decline in the Company's
stock price being taken into account in determining whether there has been
a Material Adverse Effect).
COMPANY OPTION PLANS. "Company Option Plans" shall mean the following
stock option plans of the Company: (a) the Amended and Restated 1989 Stock Plan,
(b) the Amended and Restated 1996 Stock Incentive Plan and (c) the 2002
Nonqualified Stock Incentive Plan.
COMPANY OPTIONS. "Company Options" shall mean options to purchase Company
Shares from the Company, whether granted by the Company pursuant to the Company
Option Plans or otherwise.
COMPANY RIGHTS. "Company Rights" shall mean the rights issued pursuant to
the Company Rights Agreement.
COMPANY RIGHTS AGREEMENT. "Company Rights Agreement" shall mean the Rights
Agreement dated as of October 22, 1997, between the Company and BankBoston,
N.A., as Rights Agent, as amended by Amendment No. 1 dated as of December 9,
1999 between the Company and Fleet National Bank (f/k/a BankBoston, N.A.) by
Amendment No. 2 dated as of July 18, 2001, among the Company, Fleet National
Bank and American Stock Transfer & Trust Company, as successor Rights Agent, by
Amendment No. 3 dated as of
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March 24, 2007 and Amendment No. 4 dated as of the date hereof, between the
Company and American Stock Transfer & Trust Company, a New York banking
corporation, as successor Rights Agent.
COMPANY SHARES. "Company Shares" shall mean shares of common stock, $0.01
par value per share, of the Company. Except where the context otherwise
requires, all references in the Agreement to Company Shares shall include the
associated Company Rights.
CONFIDENTIAL AGREEMENT. "Confidential Agreement" shall mean the agreement
specified in Part 5.6(C) of the Company Disclosure Schedule.
CONTINUING DIRECTOR. "Continuing Director" shall mean any member of the
Company Board, while such person is a member of the Company Board, who is not an
Affiliate, representative or designee of Parent or Purchaser and was a member of
the Company Board prior to the date of the Agreement, and any successor of a
Continuing Director while such successor is a member of the Company Board, who
is not an Affiliate, representative or designee of Parent or Purchaser and was
recommended or elected to succeed such Continuing Director by a majority of
Continuing Directors.
CONTRACT. "Contract" shall mean any loan or credit agreement, bond,
debenture, note, mortgage, indenture, guarantee, lease or other contract,
commitment, agreement, instrument, arrangement, understanding, obligation,
undertaking or license, whether oral or written (each, including all amendments
thereto).
CONTROLLED SUBSTANCES ACT. "Controlled Substances Act" refers to 21 U.S.C.
Sections 801 et seq.
ENCUMBRANCE. "Encumbrance" shall mean, with respect to any property or
asset, any mortgage, easement, lien, pledge (including any negative pledge),
security interest or other encumbrance of any nature whatsoever in respect of
such property or asset.
ENTITY. "Entity" shall mean any corporation (including any non-profit
corporation), general partnership, limited partnership, limited liability
partnership, joint venture, estate, trust, company (including any company
limited by shares, limited liability company or joint stock company), firm,
society or other enterprise, association, organization or entity (including any
Governmental Entity).
ERISA. "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
ERISA AFFILIATE. "ERISA Affiliate" shall mean any Company Subsidiary or
any entity (whether or not incorporated) other than the Company or any Company
Subsidiary that, together with the Company, is required to be treated as a
single employer under Section 414(b), (c), (m) or (o) of the Code.
EXECUTIVE. "Executive" shall mean any employee of the Company that is
eligible to participate in the Company's Change in Control Severance Benefit
Plan.
EXCHANGE ACT. "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
FDA. "FDA" shall mean the United States Food and Drug Administration.
FDCA. "FDCA" shall mean the Federal Food, Drug and Cosmetic Act of 1938,
as amended.
FDA LAWS. "FDA Laws" shall mean the FDCA, the Public Health Service Act,
CLIA, Controlled Substances Act and, for each of the foregoing, all comparable
state Legal Requirements and the rules and regulations promulgated thereunder by
FDA and any other comparable Governmental Entities.
GAAP. "GAAP" shall mean United States generally accepted accounting
principles.
GOVERNMENTAL AUTHORIZATION. "Governmental Authorization" shall mean any
permit, license, registration, qualification, certificate, clearance, variance,
waiver, exemption, certificate of occupancy, exception, franchise, entitlement,
consent, confirmation, order, approval or authorization granted by any
Governmental Entity (including all authorizations under the FDCA and the Public
Health Services Act, and the regulations of the FDA promulgated thereunder).
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GOVERNMENTAL ENTITY. "Governmental Entity" shall mean any federal, state,
local or foreign government or multi-national organization or body or any
agency, authority, subdivision or instrumentality of any of the foregoing,
including any court, tribunal, department, bureau, administrative agency,
commission or board, or any quasi-governmental or private body duly exercising
any regulatory, taxing, inspecting or other governmental authority.
HSR ACT. "HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended.
INDEBTEDNESS. "Indebtedness" shall mean (i) indebtedness for borrowed
money, including indebtedness evidenced by a note, bond, debenture or similar
instrument, and any guarantees, endorsements or keep-well obligations or other
contingent obligations in respect thereof, or (ii) obligations in respect of
outstanding letters of credit, acceptances and similar obligations created for
the account of such Person.
INTELLECTUAL PROPERTY RIGHTS. "Intellectual Property Rights" shall mean
all (a) United States and foreign patents and patent applications (and any
patents that issue as a result of those patent applications), and any renewals,
reissues, reexaminations, extensions, continuations, continuations-in-part,
divisions and substitutions relating to any of the patents and patent
applications, as well as all related foreign patents and patent applications
that are counterparts to such patents and patent applications, (b) United States
and foreign trademarks, service marks, trade dress, logos, trade names and
corporate names, whether registered or unregistered, and the goodwill associated
therewith, together withy any registrations and applications for registration
thereof, (c) United States and foreign copyrights and rights under copyrights,
whether registered or unregistered, including moral rights, and any
registrations and applications for registration thereof, (d) United States, and
foreign mask work rights and registrations and applications for registration
thereof, (e) rights in databases and data collections (including knowledge
databases, customer lists and customer databases) under the laws of the United
States or any other jurisdiction, whether registered or unregistered, and any
applications for registration therefor; (f) trade secrets and other rights in
know-how and confidential or proprietary information (including any business
plans, designs, technical data, customer data, financial information, pricing
and cost information, bills of material, or other similar information), (g) URL
and domain name registrations, (h) inventions (whether or not patentable) and
improvements thereto, and (i) all other proprietary or intellectual property
rights now known or hereafter recognized in any jurisdiction.
LATEST BALANCE SHEET. "Latest Balance Sheet" shall mean the audited
consolidated balance sheet of the Company and the Company Subsidiaries as of
December 31, 2006, which is included in the Company's Report on Form 10-K filed
with the SEC for the fiscal year ended December 31, 2006.
LEASED REAL PROPERTY. "Leased Real Property" shall mean real property that
is leased by the Company or any Company Subsidiary.
LEGAL PROCEEDING. "Legal Proceeding" shall mean any claim, lawsuit, court
action, suit, arbitration, investigation by a Governmental Entity or other
judicial or administrative proceeding.
LEGAL PROHIBITION. "Legal Prohibition" shall mean any final, permanent
Legal Requirement that is in effect and that prevents or prohibits consummation
of the Offer, the Merger or any of the other material transactions contemplated
in this Agreement or limits or would limit Parent's activity in connection with
its ownership, operation or control of the Surviving Corporation (including any
hold separate order).
LEGAL REQUIREMENT. "Legal Requirement" shall mean any federal, state,
local or non-U.S. law, statute, code, ordinance, regulation, code, order,
judgment, writ, injunction, decision, ruling or decree promulgated by any
Governmental Entity.
OPTION CONVERSION RATIO. "Option Conversion Ratio" shall mean the
quotient, calculated to five decimal places, obtained by dividing (x) the Offer
Price by (y) the Parent Share Price at the Effective Time.
ORDINARY COURSE OF BUSINESS. "Ordinary Course of Business" shall mean
ordinary course of business, consistent with past practices, including with
respect to frequency and amount.
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OWNED REAL PROPERTY. "Owned Real Property" shall mean real property owned
by the Company or a Company Subsidiary.
PARENT SHARE PRICE. "Parent Share Price" shall mean the closing per-share
price of a Parent Share as listed on the AMEX.
PARENT SHARES. "Parent Shares" shall mean shares of common stock, $0.01
par value per share, of Parent.
PERMITTED ENCUMBRANCES. "Permitted Encumbrances" shall mean: (a)
Encumbrances for Taxes not yet due and payable; (b) liens, Encumbrances or
imperfections of title that have arisen in the Ordinary Course of Business; (c)
liens, Encumbrances or imperfections of title resulting from or otherwise
relating to any of the contracts referred to in the Company Disclosure Schedule;
(d) liens, Encumbrances or imperfections of title relating to liabilities
reflected in the financial statements (including any related notes) contained in
the Company SEC Documents; (e) liens, pledges or Encumbrances arising from or
otherwise relating to transfer restrictions under the Securities Act and the
securities laws of the various states of the United States or foreign
jurisdictions; and (f) liens, Encumbrances or imperfections of title which would
not have a Company Material Adverse Effect.
PERSON. "Person" shall mean any individual or Entity.
PRODUCTS UNDER DEVELOPMENT. "Products Under Development" shall mean the
products currently under development and subject to current clinical trials set
forth on Schedule A attached hereto.
PROXY STATEMENT. "Proxy Statement" shall mean a proxy statement relating
to the Special Meeting (together with any amendments thereof or supplements
thereto and any other required proxy materials in connection therewith).
SEC. "SEC" shall mean the United States Securities and Exchange
Commission.
SECURITIES ACT. "Securities Act" shall mean the Securities Act of 1933, as
amended.
SUBSIDIARY. An Entity shall be deemed to be a "Subsidiary" of another
Person if such Person directly or indirectly owns, beneficially or of record:
(a) an amount of voting securities or other interests in such Entity that is
sufficient to enable such Person to elect at least a majority of the members of
such Entity's board of directors or comparable governing body; or (b) at least
50% of the outstanding equity interests issued by such Entity.
SPECIAL MEETING. "Special Meeting" shall mean a special meeting of the
Company's stockholders held solely for the purpose of considering and taking
action upon this Agreement and the Merger.
SUPERIOR PROPOSAL. "Superior Proposal" shall mean any unsolicited, bona
fide written offer made by a third party unaffiliated with the Company to
purchase (by way of merger, tender or exchange offer or otherwise) greater than
85% of the Company's assets or greater than 85% of the outstanding Company
Shares (other than Company Shares already held by such third party) that the
Company Board shall have determined in good faith (After Consultation, and after
taking into account, among other things, the financial, legal and regulatory
aspects of such offer (including any financing required and the availability
thereof), as well as any revisions to the terms hereof proposed by Parent
pursuant to Section 7.1(f) hereof) is: (a) more favorable to the Company's
stockholders (in their capacities as such) than the terms of the Offer and the
Merger (taking into account any revisions to the terms hereof proposed by Parent
pursuant to Section 7.1(f) hereof), and (b) reasonably certain of being
consummated on the terms proposed.
TAX or TAXES. "Tax" or "Taxes" shall mean all taxes of whatever kind or
nature, including those on or measured by or referred to as income, gross
receipts, sales, use, ad valorem, franchise, profits, license, estimated,
withholding, payroll, employment, excise, severance, stamp, occupation, premium,
value added, property or windfall profits taxes, customs, duties or other
similar fees, assessments or charges of any kind whatsoever (together with any
interest and any penalties, additions to tax or additional amounts), whether
disputed or not, imposed by any Governmental Entity or Tax authority (domestic
or foreign).
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TAX RETURNS. "Tax Return" shall mean any report, return (including
information return), claim for refund, or statement relating to Taxes or
required to be filed with any Tax authority (domestic or foreign), including any
schedule or attachment thereto, and including any amendments thereof.
TECHNOLOGY. "Technology" shall mean tangible embodiments of Intellectual
Property Rights, including in electronic, written or other media, technical
documentation, specifications, designs, bills of material, build instructions,
test reports, schematics, algorithms, application programming interfaces, user
interfaces, routines, formulae, databases, materials, compounds, reagents, lab
notebooks, processes, prototypes, samples, works in progress, inventories,
studies, or other know-how and other works of authorship.
UNCURED INACCURACY. There shall be deemed to be an "Uncured Inaccuracy" in
a representation or warranty of a party to the Agreement as of a particular date
only if such representation or warranty shall be inaccurate as of such date as
if such representation or warranty were made as of such date, and the inaccuracy
in such representation or warranty shall not have been cured in all material
respects since such date; provided, however, that if such representation or
warranty by its terms speaks as of the date of the Agreement or as of another
particular date, then there shall not be deemed to be an Uncured Inaccuracy in
such representation or warranty unless such representation or warranty shall
have been inaccurate as of the date of the Agreement or such other particular
date, respectively, and the inaccuracy in such representation or warranty shall
not have been cured in all material respects since such date.
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OTHER DEFINED TERMS
The following terms shall have the meanings defined for such terms in the
Sections set forth below:
TERM SECTION
---- --------
Acceptance Time..................................................... 1.4(a)
Alternative Financing............................................... 5.16
Appraisal Shares.................................................... 2.8(c)
Assumed Option...................................................... 5.9(a)
Xxxxxxx Termination Fee............................................. 5.18(a)
Certificate of Merger............................................... 2.3
Company............................................................. Preamble
Company Change in Recommendation.................................... 5.3(b)
Company Disclosure Schedule......................................... 3
Company ESPP........................................................ 3.5(a)
Company Plan........................................................ 3.21(a)
Company Recommendation.............................................. 5.3(a)
Company SEC Documents............................................... 3.6(a)
Company Stock Certificate........................................... 2.6
Company Termination Fee............................................. 3.30
Compensation Committee.............................................. 3.21(l)
Confidentiality Agreement........................................... 1.3(c)
Continuing Employee................................................. 5.10(a)
D&O Insurance Policy................................................ 5.11(b)
Debt Commitment Letter.............................................. 4.5
Debt Financing...................................................... 4.5
DGCL................................................................ Recitals
Effective Time...................................................... 2.3
Employment Compensation Arrangement................................. 3.21(l)
Environmental Laws.................................................. 3.23
Environmental Permits............................................... 3.23
Foreign Plans....................................................... 3.21(j)
Harmful Code........................................................ 3.12(g)
Hazardous Substances................................................ 3.23
Indemnified Party................................................... 5.11(d)
Initial Expiration Date............................................. 1.1(d)
Matching Period..................................................... 7.1(f)
Material Contract................................................... 3.13(a)
Merger.............................................................. Recitals
Merger Consideration................................................ Recitals
Minimum Condition................................................... Annex I
Multiemployer Plan.................................................. 3.21(e)
Non-Budgeted Capital Expenditure.................................... 5.1(u)
Notice of Recommendation Change..................................... 5.3(c)
Offer............................................................... Recitals
Offer Commencement Date............................................. 1.1(a)
Offer Conditions.................................................... 1.1(b)
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TERM SECTION
---- --------
Offer Documents..................................................... 1.2(a)
Offer Price......................................................... Recitals
Outside Date........................................................ 7.1(b)
Parent.............................................................. Preamble
Parent Plans........................................................ 5.10(a)
Payment Agent....................................................... 2.7(a)
Preferred Shares.................................................... 3.5(a)
Purchaser........................................................... Preamble
Representatives..................................................... 5.2(a)
Schedule 14D-9...................................................... 1.3(b)
Significant Required Governmental Approval.......................... Annex I
Surviving Corporation............................................... 2.1
Termination Fee..................................................... 7.3(a)
Top-Up Closing...................................................... 1.6(c)
Top-Up Exercise Notice.............................................. 1.6(c)
Top-Up Option....................................................... 1.6(a)
Top-Up Option Shares................................................ 1.6(a)
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EXHIBIT B
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
BIOSITE INCORPORATED
FIRST: The name of the corporation (hereinafter the "Corporation") is:
BIOSITE INCORPORATED.
SECOND: The name and address, including street, number, city and county,
of the registered agent of the Corporation in the State of Delaware are:
The Corporation Trust Company
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxx Xxxxxx, Xxxxxxxx 00000
THIRD: The nature of the business and the purposes to be conducted and
promoted by the Corporation shall be to engage in any lawful act or activity for
which corporations may be organized under the General Corporation Law of the
State of Delaware.
FOURTH: The total number of shares of stock which the Corporation shall
have authority to issue is One Thousand (1,000) shares. The par value of each
such share is $0.001. All such shares are of one class and are shares of Common
Stock.
FIFTH: The Corporation is to have perpetual existence.
SIXTH: The personal liability of the directors of the Corporation is
hereby eliminated to the fullest extent permitted by paragraph (7) of subsection
(b) of Section 102 of the General Corporation Law of the State of Delaware, as
the same may be amended and supplemented.
SEVENTH: The Corporation shall, to the fullest extent permitted by Section
145 of the General Corporation Law of the State of Delaware, as the same may be
amended and supplemented, indemnify any and all persons whom it shall have power
to indemnify under said section from and against any and all of the expenses,
liabilities or other matters referred to in or covered by said section, and the
indemnification provided for herein shall not be deemed exclusive of any other
rights to which those indemnified may be entitled under any Bylaw, agreement,
vote of stockholders or disinterested directors or otherwise, both as to action
in his official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such person.
EIGHTH: From time to time any of the provisions of this certificate of
incorporation may be amended, altered or repealed, and other provisions
authorized by the laws of the State of Delaware at the time in force may be
added or inserted in the manner and at the time prescribed by said laws, and all
rights at any time conferred upon the stockholders of the Corporation by this
certificate of incorporation are granted subject to the provisions of this
Article EIGHTH. In addition to the other powers expressly granted by statute,
the Board of Directors shall have the power to adopt, repeal, alter, amend and
rescind the Bylaws of the Corporation.
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