EXHIBIT 2.1
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
ADVANCED MEDICAL OPTICS, INC.
VAULT MERGER CORPORATION
and
VISX, INCORPORATED
DATED AS OF NOVEMBER 9, 2004
EXECUTION COPY
TABLE OF CONTENTS
Page
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ARTICLE I THE MERGER..................................................................................... 1
Section 1.1 The Merger......................................................................... 1
Section 1.2 Effective Time..................................................................... 1
Section 1.3 Effect of the Merger............................................................... 2
Section 1.4 Certificate of Incorporation of the Surviving Corporation.......................... 2
Section 1.5 Bylaws of the Surviving Corporation................................................ 2
Section 1.6 Directors and Officers of the Surviving Corporation................................ 2
Section 1.7 Closing............................................................................ 2
ARTICLE II CONVERSION AND EXCHANGE OF SECURITIES......................................................... 3
Section 2.1 Conversion of Capital Stock........................................................ 3
Section 2.2 Exchange of Certificates........................................................... 4
Section 2.3 Dissenting Stockholders............................................................ 7
Section 2.4 Alternative Merger Consideration................................................... 8
Section 2.5 Material Adverse Effect............................................................ 8
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY................................................ 9
Section 3.1 Organization and Qualification; Subsidiaries....................................... 9
Section 3.2 Certificate of Incorporation and Bylaws............................................ 10
Section 3.3 Capitalization..................................................................... 10
Section 3.4 Authority Relative to this Agreement; Stockholder Approval......................... 12
Section 3.5 No Conflict; Required Filings and Consents......................................... 13
Section 3.6 Compliance; Permits................................................................ 14
Section 3.7 SEC Filings; Financial Statements.................................................. 15
Section 3.8 Disclosure Controls and Procedures................................................. 16
Section 3.9 Absence of Certain Changes or Events............................................... 16
Section 3.10 No Undisclosed Liabilities......................................................... 17
Section 3.11 Absence of Litigation; Investigations.............................................. 17
Section 3.12 Agreements, Contracts and Commitments.............................................. 18
Section 3.13 Employee Benefit Plans, Options and Employment Agreements.......................... 19
Section 3.14 Labor Matters...................................................................... 22
Section 3.15 Properties; Encumbrances........................................................... 24
Section 3.16 Taxes.............................................................................. 25
Section 3.17 Environmental Matters.............................................................. 27
Section 3.18 Intellectual Property.............................................................. 28
Section 3.19 FDA Compliance..................................................................... 30
Section 3.20 Brokers............................................................................ 31
Section 3.21 Anti-Takeover Statute Not Applicable............................................... 31
Section 3.22 Insurance.......................................................................... 31
Section 3.23 Rights Agreement................................................................... 31
Section 3.24 Interested Party Transactions...................................................... 32
Section 3.25 Opinion of Financial Advisor of the Company........................................ 32
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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB....................................... 32
Section 4.1 Organization and Qualification; Merger Sub......................................... 32
Section 4.2 Certificate of Incorporation and Bylaws............................................ 33
Section 4.3 Capitalization..................................................................... 33
Section 4.4 Authority Relative to this Agreement; Stockholder Approval......................... 35
Section 4.5 No Conflict, Required Filings and Consents......................................... 35
Section 4.6 Compliance; Permits................................................................ 36
Section 4.7 SEC Filings; Financial Statements.................................................. 37
Section 4.8 Disclosure Controls and Procedures................................................. 38
Section 4.9 Absence of Certain Changes or Events............................................... 38
Section 4.10 No Undisclosed Liabilities......................................................... 39
Section 4.11 Absence of Litigation; Investigations.............................................. 39
Section 4.12 Agreements, Contracts and Commitments.............................................. 40
Section 4.13 Employee Benefit Plans, Options and Employment Agreements.......................... 40
Section 4.14 Labor Matters...................................................................... 43
Section 4.15 Properties; Encumbrances........................................................... 44
Section 4.16 Taxes.............................................................................. 44
Section 4.17 Environmental Matters.............................................................. 46
Section 4.18 Intellectual Property.............................................................. 46
Section 4.19 FDA Compliance..................................................................... 47
Section 4.20 Brokers............................................................................ 48
Section 4.21 Anti-Takeover Statute Not Applicable............................................... 49
Section 4.22 Insurance.......................................................................... 49
Section 4.23 Parent Rights Agreement............................................................ 49
Section 4.24 Interested Party Transactions...................................................... 49
Section 4.25 Opinion of Financial Advisor of Parent............................................. 49
Section 4.26 Financing.......................................................................... 49
ARTICLE V CONDUCT OF BUSINESS............................................................................ 50
Section 5.1 Conduct of Business by the Company Pending the Merger.............................. 50
Section 5.2 Conduct of Business by Parent Pending the Merger................................... 54
Section 5.3 ESPP............................................................................... 56
Section 5.4 Director Plan...................................................................... 57
ARTICLE VI ADDITIONAL AGREEMENTS......................................................................... 57
Section 6.1 Access to Information; Confidentiality............................................. 57
Section 6.2 No Solicitation.................................................................... 58
Section 6.3 Board Recommendations.............................................................. 60
Section 6.4 Joint Proxy Statement/Prospectus; Registration Statement........................... 62
Section 6.5 Merger Stockholders Meetings....................................................... 63
Section 6.6 Reasonable Best Efforts to Complete................................................ 65
Section 6.7 Rights Agreements.................................................................. 66
Section 6.8 Public Announcements............................................................... 67
Section 6.9 Employee Benefits; 401(k) Plan..................................................... 67
Section 6.10 Stock Plans........................................................................ 68
Section 6.11 Indemnification and Insurance...................................................... 70
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Section 6.12 Tax Matters........................................................................ 71
Section 6.13 Notification of Certain Matters.................................................... 72
Section 6.14 Takeover Statutes.................................................................. 72
Section 6.15 Section 16 Matters................................................................. 73
Section 6.16 Directorships...................................................................... 73
ARTICLE VII CONDITIONS TO THE MERGER..................................................................... 73
Section 7.1 Conditions to Obligation of Each Party to Effect the Merger........................ 73
Section 7.2 Additional Conditions to Obligations of Parent and Merger Sub...................... 74
Section 7.3 Additional Conditions to Obligation of the Company................................. 75
ARTICLE VIII TERMINATION................................................................................. 75
Section 8.1 Termination........................................................................ 75
Section 8.2 Effect of Termination.............................................................. 77
Section 8.3 Fees and Expenses.................................................................. 77
ARTICLE IX GENERAL PROVISIONS............................................................................ 79
Section 9.1 Nonsurvival of Representations; Warranties and Agreements.......................... 79
Section 9.2 Notices............................................................................ 79
Section 9.3 Certain Definitions................................................................ 81
Section 9.4 Amendment.......................................................................... 82
Section 9.5 Extension; Waiver.................................................................. 82
Section 9.6 Headings........................................................................... 82
Section 9.7 Severability....................................................................... 82
Section 9.8 Entire Agreement; No Third Party Beneficiaries..................................... 82
Section 9.9 Assignment......................................................................... 83
Section 9.10 Failure or Indulgence Not Waiver; Remedies Cumulative.............................. 83
Section 9.11 Governing Law...................................................................... 83
Section 9.12 Counterparts....................................................................... 83
Section 9.13 WAIVER OF JURY TRIAL............................................................... 83
Section 9.14 Specific Performance............................................................... 83
Section 9.15 Disclosure Schedules............................................................... 84
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DEFINED TERMS
Page
1987 Plan................................................................... 10
1990 Plan................................................................... 10
1993 Plan................................................................... 10
1995 Director Plan.......................................................... 10
1995 Plan................................................................... 10
1996 Plan................................................................... 10
2000 Plan................................................................... 10
2001 Plan................................................................... 10
3.5% Notes.................................................................. 31
401(k) Plan................................................................. 65
Acquiring Person............................................................ 30
Acquisition Proposal........................................................ 57
affiliate................................................................... 77
Agreement................................................................... .1
Antitrust Law............................................................... 77
Assumed Option.............................................................. 65
Assumed Phantom Unit Account................................................ 66
beneficial owner............................................................ 77
Blue Sky.................................................................... 32
business day................................................................ 77
Cancelled Option............................................................ 65
Cash Merger Consideration................................................... 3
Certificate of Merger....................................................... 1
Certificates................................................................ 4
Change of Recommendation.................................................... 57
Closing..................................................................... 2
Closing Date................................................................ 2
Code........................................................................ 1
Company..................................................................... 1
Company Balance Sheet....................................................... 15
Company Board............................................................... 12
Company Bylaws.............................................................. 9
Company Charter............................................................. 9
Company Common Stock........................................................ 3
Company Disclosure Schedule................................................. 9
Company Employee Plans...................................................... 18
Company Employees........................................................... 64
Company Expense Amount...................................................... 74
Company Material Adverse Effect............................................. 8
Company Material Contracts.................................................. 17
Company Permits............................................................. 14
Company Proprietary Product................................................. 27
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Company Real Property Leases................................................ 23
Company Registered Intellectual Property.................................... 26
Company Rights Agreement.................................................... 3
Company SEC Reports......................................................... 14
Company Stock Options....................................................... 10
Company Stock Plans......................................................... 10
Company Stockholders Meeting................................................ 12
Company Termination Fee..................................................... 74
Company Voting Proposal..................................................... 12
Confidentiality Agreement................................................... 55
control..................................................................... 77
D&O Policy.................................................................. 67
DGCL........................................................................ 1
Dissenting Shares........................................................... 7
Distribution Date........................................................... 30
Effective Time.............................................................. .1
Employee Benefit Plan....................................................... 18
Environmental Claims........................................................ 26
Environmental Laws.......................................................... 25
ERISA....................................................................... 18
ERISA Affiliate............................................................. 18
ESPP........................................................................ 53
Exchange Act................................................................ 12
Exchange Agent.............................................................. 4
Exchange Fund............................................................... 4
Exchange Ratio.............................................................. 3
Expense..................................................................... 73
FDA......................................................................... 28
GAAP........................................................................ 14
Governmental Entity......................................................... 13
HSR Act..................................................................... 13
Identified Contracts........................................................ 17
include..................................................................... 77
Intellectual Property....................................................... 28
Joint Proxy Statement/Prospectus............................................ 59
Knowledge................................................................... 77
Law......................................................................... 77
Liens....................................................................... 12
Materials of Environmental Concern.......................................... 25
Maximum Annual Premium...................................................... 67
Merger...................................................................... 1
Merger Consideration........................................................ 3
Merger Consideration Value.................................................. 65
Merger Sub.................................................................. 1
Merger Sub Bylaws........................................................... 2
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Merger Sub Charter.......................................................... 2
Merger Sub Charter Documents................................................ 31
Merger Sub Common Stock..................................................... 4
NYSE ....................................................................... 5
Outside Date................................................................ 72
Parent...................................................................... 1
Parent Balance Sheet........................................................ 35
Parent Board................................................................ 33
Parent Bylaws............................................................... 31
Parent Charter.............................................................. 31
Parent Closing Price........................................................ 5
Parent Common Stock......................................................... 3
Parent Disclosure Schedule.................................................. 30
Parent Employee Plans....................................................... 38
Parent Expense Amount....................................................... 74
Parent Material Adverse Effect.............................................. 8
Parent Material Contracts................................................... 37
Parent Permits.............................................................. 35
Parent Permitted Acquisition................................................ 52
Parent Preferred Stock...................................................... 31
Parent Proprietary Product.................................................. 45
Parent Real Property Leases................................................. 42
Parent Registered Intellectual Property..................................... 44
Parent Rights Agreement..................................................... 46
Parent SEC Reports.......................................................... 35
Parent Stock Plan........................................................... 31
Parent Stockholders Meeting................................................. 33
Parent Termination Fee...................................................... 74
Parent Voting Proposal...................................................... 33
person...................................................................... 77
Phantom Units............................................................... 66
Qualified Plan.............................................................. 19
Registered Intellectual Property............................................ 26
Registration Statement...................................................... 34
Regulation M-A Filing....................................................... 59
Requisite Company Stock Approval............................................ 12
Requisite Parent Stockholder Approval....................................... 33
Right....................................................................... 3
Sarbanes-Oxley Act.......................................................... 15
SEC......................................................................... 13
Securities Act.............................................................. 32
Stock Acquisition Date...................................................... 30
Stock Merger Consideration.................................................. 3
Subsidiary.................................................................. 3
Subsidiary Documents........................................................ 10
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Superior Proposal........................................................... 58
Surviving Corporation....................................................... 1
Takeover Statute............................................................ 29
Tax......................................................................... 24
Tax Opinions................................................................ 68
Tax Returns................................................................. 24
Taxes....................................................................... 24
WARN Act.................................................................... 22
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of November 9, 2004 (this
"Agreement"), by and among Advanced Medical Optics, Inc., a Delaware corporation
("Parent"), Vault Merger Corporation, a Delaware corporation and a wholly owned
subsidiary of Parent ("Merger Sub"), and VISX, Incorporated, a Delaware
corporation (the "Company").
WHEREAS, the respective Boards of Directors of Parent, Merger Sub and the
Company have each approved, and deems it advisable and in the best interest of
its respective stockholders to consummate the business combination transaction
provided for herein in which Merger Sub will merge with and into the Company
(the "Merger") in accordance with the terms and conditions of this Agreement and
the applicable provisions of the General Corporation Law of the State of
Delaware ("DGCL");
WHEREAS, for United States federal income tax purposes, it is intended
that the Merger shall qualify as a reorganization within the meaning of Section
368(a) of the Internal Revenue Code of 1986, as amended (the "Code"), and that
this Agreement shall be, and is hereby, adopted as a plan of reorganization for
purposes of Section 368(a) of the Code.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth below, the
parties hereto agree as follows:
ARTICLE I
THE MERGER
Section 1.1 The Merger.
Subject to the terms and conditions of this Agreement and in
accordance with the DGCL, at the Effective Time (as defined in Section 1.2),
Merger Sub shall merge with and into the Company, the separate corporate
existence of Merger Sub shall cease and the Company shall continue as the
surviving corporation in the Merger. The Company, in its capacity as the
corporation surviving the Merger, is hereinafter sometimes referred to as the
"Surviving Corporation."
Section 1.2 Effective Time.
On the Closing Date (as defined in Section 1.7), Parent and the
Company shall cause the Merger to be consummated by filing a duly executed and
delivered certificate of merger as required by the DGCL (the "Certificate of
Merger") with the Secretary of State of the State of Delaware, in such form as
required by, and
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executed in accordance with the relevant provisions of, the DGCL (the time of
such filing, or such other time as Parent and the Company shall specify in the
Certificate of Merger, being the "Effective Time").
Section 1.3 Effect of the Merger.
At the Effective Time, the effect of the Merger shall be as provided
in this Agreement and the Certificate of Merger and as specified in the DGCL
(including Section 259 of the DGCL).
Section 1.4 Certificate of Incorporation of the Surviving
Corporation.
At and after the Effective Time, the Certificate of Incorporation of
Merger Sub (the "Merger Sub Charter"), as in effect immediately prior to the
Effective Time, subject to the provisions of Section 6.11, shall be the
Certificate of Incorporation of the Surviving Corporation, until amended in
accordance with the DGCL, except that the name of the Surviving Corporation
shall be "VISX, Incorporated."
Section 1.5 Bylaws of the Surviving Corporation.
At and after the Effective Time, the Bylaws of Merger Sub (the
"Merger Sub Bylaws"), as in effect immediately prior to the Effective Time,
subject to the provisions of Section 6.11, shall be the Bylaws of Merger Sub,
until amended in accordance with the DGCL, except that the name of the Surviving
Corporation shall be "VISX, Incorporated."
Section 1.6 Directors and Officers of the Surviving Corporation.
(a) The directors of Merger Sub immediately prior to the
Effective Time shall be the initial directors of the Surviving Corporation and
shall hold office from the Effective Time until their respective successors are
duly elected or appointed and qualified in the manner provided in the
Certificate of Incorporation or Bylaws of the Surviving Corporation or as
otherwise provided by Law.
(b) The officers of Merger Sub immediately prior to the
Effective Time shall be the initial officers of the Surviving Corporation and
shall hold office from the Effective Time until their respective successors are
duly elected or appointed and qualified in the manner provided in the
Certificate of Incorporation or Bylaws of the Surviving Corporation or as
otherwise provided by Law.
Section 1.7 Closing.
Subject to the provisions of this Agreement, the closing of the
Merger (the "Closing") shall take place at 10:00 a.m. Los Angeles Time, at the
offices of Skadden, Arps, Slate, Meagher & Flom LLP, 300 South Grand Avenue, Los
Angeles,
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California on a date to be specified by Parent and the Company which shall be no
later than the second business day after satisfaction or waiver of each of the
conditions set forth in Article VII (other than the delivery of items to be
delivered at Closing and other than those conditions that by their nature are to
be satisfied at the Closing, it being understood that the occurrence of the
Closing shall remain subject to the delivery of such items and the satisfaction
or waiver of such conditions at the Closing) or on such other date and such
other time and place as Parent and the Company shall agree. The date on which
the Closing shall occur is hereinafter referred to as the "Closing Date."
ARTICLE II
CONVERSION AND EXCHANGE OF SECURITIES
Section 2.1 Conversion of Capital Stock.
At the Effective Time, by virtue of the Merger and without any
action on the part of the Company, Parent, Merger Sub or any holder of any
shares of common stock, par value $0.01 per share, of the Company ("Company
Common Stock") or any capital stock of Merger Sub:
(a) Company Common Stock. Subject to this Article II, each
share of Company Common Stock issued and outstanding immediately prior to the
Effective Time (other than shares to be cancelled in accordance with Section
2.1(b) and Dissenting Shares referred to in Section 2.3), together with each
associated "Right" (as defined in the Rights Agreement, dated as of August 3,
2000, between the Company and Fleet National Bank, as rights agent, as amended
through the date hereof (the "Company Rights Agreement")), shall be converted
into the right to receive (i) 0.552 (the "Exchange Ratio") shares of common
stock, par value $0.01 per share ("Parent Common Stock") of Parent (the "Stock
Merger Consideration") and (ii) $3.50 in cash without interest (the "Cash Merger
Consideration" and, together with the Stock Merger Consideration, the "Merger
Consideration"), payable upon the surrender of the Certificates (as defined in
Section 2.2(b)). From and after the Effective Time, all such shares of Company
Common Stock, shall no longer be outstanding and shall automatically be
cancelled and retired and shall cease to exist, and each holder of a Certificate
representing any such shares shall cease to have any rights with respect
thereto, except the right to receive the Merger Consideration pursuant to this
Section 2.1(a), any cash in lieu of fractional shares payable pursuant to
Section 2.2(d) and any dividends or other distributions to which such holder is
entitled to pursuant to Section 2.2(c). Notwithstanding the foregoing, the
Exchange Ratio shall be appropriately adjusted to reflect fully the effect of
any stock split, reverse split, reclassification, stock dividend (including any
dividend or distribution of securities convertible into Parent Common Stock or
Company Common Stock), reorganization, recapitalization, consolidation, exchange
or other like change with respect to Parent Common Stock or Company Common Stock
occurring (or having a record date) after the date of this Agreement and prior
to the Effective Time.
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(b) Cancellation of Treasury Stock and Parent-Owned Stock. All
shares of Company Common Stock, together with each associated Right, that are
(i) held by the Company as treasury shares or (ii) owned by Parent or any wholly
owned Subsidiary (as defined below) of Parent, in each case immediately prior to
the Effective Time, shall be cancelled and retired and shall cease to exist, and
no securities of Parent or other consideration shall be delivered in exchange
therefor. As used in this Agreement, the word "Subsidiary" means, with respect
to any party, any corporation or other organization, whether incorporated or
unincorporated, of which (A) such party or any other Subsidiary of such party is
a general partner, manager or managing member, (B) such party or any Subsidiary
of such party owns in excess of a majority of the outstanding equity or voting
securities or interests or (C) such party or any Subsidiary of such party has
the right to elect at least a majority of the board of directors or others
performing similar functions with respect to such corporation or other
organization.
(c) Capital Stock of Merger Sub. Each share of common stock,
par value $0.01 per share, of Merger Sub ("Merger Sub Common Stock") issued and
outstanding immediately prior to the Effective Time shall be converted into and
become one fully paid and nonassessable share of common stock, par value $0.01
per share, of the Surviving Corporation.
(d) Stock Options; Deferred Phantom Stock. Outstanding options
to purchase shares of Company Common Stock and outstanding deferral accounts
under the 1995 Director Plan (each, a "Phantom Unit Account") shall be treated
in the manner set forth in Section 6.10.
Section 2.2 Exchange of Certificates.
(a) Exchange Agent. Prior to the Closing Date, Parent shall
designate a bank or trust company to act as Exchange Agent hereunder (the
"Exchange Agent"). As soon as practicable after the Effective Time, Parent shall
deposit with or for the account of the Exchange Agent, for the benefit of the
holders of Company Common Stock, stock certificates representing the shares of
Parent Common Stock and an amount of cash sufficient to deliver to the holders
of Company Common Stock (other than the Dissenting Shares) the aggregate Merger
Consideration pursuant to Section 2.1(a), any cash in lieu of fractional shares
payable pursuant to Section 2.2(d) and any dividends or other distributions to
which such holders are entitled pursuant to Section 2.2(c) (such certificates
for shares of Parent Common Stock and cash, together with cash in lieu of
fractional shares and dividends or other distributions being hereinafter
referred to as the "Exchange Fund") deliverable pursuant to Section 2.1 in
exchange for outstanding shares of Company Common Stock.
(b) Exchange Procedures. As soon as practicable after the
Effective Time, Parent will instruct the Exchange Agent to mail to each holder
of record of a certificate or certificates which immediately prior to the
Effective Time represented outstanding shares
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of Company Common Stock (the "Certificates") that were converted pursuant to
Section 2.1(a) into the right to receive the Merger Consideration (i) a letter
of transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon proper delivery of the
Certificates to the Exchange Agent and shall be in such form and have such other
provisions as Parent may reasonably specify that are not inconsistent with the
terms of this Agreement), and (ii) instructions for use in effecting the
surrender of the Certificates in exchange for the Merger Consideration. Upon
surrender of a Certificate for cancellation to the Exchange Agent together with
such letter of transmittal, duly executed, and such other customary documents as
may be required pursuant to such instructions, the holder of such Certificate
shall be entitled to receive (A) certificates evidencing the Stock Merger
Consideration which such holder has the right to receive pursuant to Section
2.1(a) in respect of the shares of Company Common Stock formerly evidenced by
such Certificate, (B) the Cash Merger Consideration which such holder has the
right to receive pursuant to Section 2.1(a) in respect of the shares of Company
Common Stock formerly evidenced by such Certificate, (C) cash in lieu of any
fractional shares of Parent Common Stock to which such holder is entitled
pursuant to Section 2.2(d), and (D) any dividends or other distributions to
which such holder is entitled pursuant to Section 2.2(c), after giving effect to
any tax withholdings required by applicable Law, and the Certificate so
surrendered shall forthwith be cancelled. In the event of a transfer of
ownership of shares of Company Common Stock which is not registered in the
transfer records of the Company as of the Effective Time, a certificate
representing the proper number of shares of Parent Common Stock may be issued to
a transferee if the Certificate evidencing such Company Common Stock is
presented to the Exchange Agent, accompanied by all documents required to
evidence and effect such transfer pursuant to this Section 2.2(b) and by
evidence that any applicable stock transfer taxes have been paid. Until so
surrendered, each outstanding Certificate that, prior to the Effective Time,
represented shares of Company Common Stock will be deemed, from and after the
Effective Time, for all corporate purposes, to represent only the right to
receive upon surrender the Merger Consideration and any cash in lieu of any
fractional shares of Parent Common Stock payable pursuant to Section 2.2(d), in
accordance with the terms of this Agreement.
(c) Distributions with Respect to Unexchanged Shares of Parent
Common Stock. No dividends or other distributions declared or made after the
Effective Time with respect to Parent Common Stock with a record date after the
Effective Time shall be paid to the holder of any unsurrendered Certificate with
respect to the shares of Parent Common Stock represented thereby, and no cash
payment in lieu of fractional shares shall be paid to any such holder pursuant
to Section 2.2(d), unless and until the holder of such Certificate shall
surrender such Certificate. Subject to the effect of escheat, tax or other
applicable Laws, following surrender of any such Certificate, there shall be
paid to the holder of the certificates representing whole shares of Parent
Common Stock issued in exchange therefor, in addition to the Merger
Consideration deliverable therefore pursuant to Section 2.1, without interest,
(A) the amount of any cash payable with respect to a fractional share of Parent
Common Stock to which such holder is entitled pursuant to Section 2.2(d) and (B)
at the appropriate payment date, the amount of dividends or other distributions,
with
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a record date after the Effective Time but prior to surrender and a payment date
occurring after surrender, payable with respect to such whole shares of Parent
Common Stock.
(d) No Fractional Shares. No certificate or scrip representing
fractional shares of Parent Common Stock shall be issued upon the surrender for
exchange of Certificates, and such fractional share interests shall not entitle
the owner thereof to vote or to any other rights of a stockholder of Parent.
Notwithstanding any other provision of this Agreement, each holder of shares of
Company Common Stock converted pursuant to the Merger who would otherwise have
been entitled to receive a fraction of a share of Parent Common Stock (after
taking into account all Certificates delivered by such holder and the aggregate
number of shares of Company Common Stock represented thereby) shall receive, in
lieu thereof, cash (without interest) in an amount equal to such fractional part
of a share of Parent Common Stock multiplied by the last reported sales price of
Parent Common Stock at the end of regular trading hours on the New York Stock
Exchange (the "NYSE") on the Closing Date (the "Parent Closing Price").
(e) Transfers of Ownership. If any certificate for shares of
Parent Common Stock is to be issued in a name other than that in which the
Certificate surrendered in exchange therefor is registered, it will be a
condition to the issuance thereof that the Certificate so surrendered will be
properly endorsed and otherwise be in proper form for transfer and that the
person requesting such exchange will have paid to Parent or any agent designated
by it any transfer or other taxes required by reason of the issuance of a
certificate for shares of Parent Common Stock in any name other than that of the
registered holder of the Certificate surrendered, or will have established to
the satisfaction of Parent or any agent designated by it that such tax has been
paid or is not payable.
(f) Termination of Exchange Fund; No Liability. At any time
following the first anniversary of the Effective Time, Parent shall be entitled
to require the Exchange Agent to deliver to Parent any portion of the Exchange
Fund not disbursed to holders of Certificates, and thereafter such holders shall
be entitled to look only to Parent (subject to abandoned property, escheat or
other similar Law) with respect to the Merger Consideration to which such
holders are entitled pursuant to Section 2.1(a), any cash in lieu of fractional
shares payable to such holders pursuant to Section 2.2(d) and any dividends or
other distributions to which such holders are entitled pursuant to Section
2.2(c), upon due surrender of their Certificates, without any interest thereon.
Neither Parent, Merger Sub nor the Company shall be liable to any holder of
Company Common Stock or Parent Common Stock, as the case may be, for such shares
(or dividends or distributions with respect thereto) delivered to a public
official pursuant to any applicable abandoned property, escheat or other similar
Law following the passage of time specified therein.
(g) Withholding Rights. Parent, the Surviving Corporation or
the Exchange Agent shall be entitled to deduct and withhold from the
consideration otherwise payable pursuant to this Agreement to any person who was
a holder of Company Common Stock immediately prior to the Effective Time such
amounts as Parent or the Exchange Agent is required to deduct and withhold with
respect to the making of such payment under the Code, or any provision of state,
local or foreign tax Law. To the extent that amounts are
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so withheld by Parent, the Surviving Corporation or the Exchange Agent, such
withheld amounts shall be treated for all purposes of this Agreement as having
been paid to the holder of the shares of Parent Common Stock in respect of which
such deduction and withholding was made by Parent, the Surviving Corporation or
the Exchange Agent.
(h) No Further Ownership Rights in Company Stock. At the
Effective Time, the stock transfer books of the Company shall be closed and
thereafter there shall be no further registration of transfers on the stock
transfer books of the Company or the Surviving Corporation of the shares of
Company Common Stock which were outstanding immediately prior to such time. If,
after such time, Certificates are presented to the Surviving Corporation for any
reason, they shall be cancelled and exchanged as provided in this Article II.
(i) Lost, Stolen or Destroyed Certificates. In the event any
Certificates shall have been lost, stolen or destroyed, the Exchange Agent shall
issue in exchange for such lost, stolen or destroyed Certificates, upon the
making of an affidavit of that fact by the holder thereof, such shares of Parent
Common Stock as may be required pursuant to Section 2.1(a) as well as the other
Merger Consideration as provided in this Article II and any dividends or other
distributions to which the holders thereof are entitled pursuant to Section
2.2(c); provided, however, that Parent may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost, stolen or
destroyed Certificates to deliver an agreement of indemnification in form
satisfactory to Parent, or a bond in such sum as Parent may reasonably direct as
indemnity against any claim that may be made against Parent or the Exchange
Agent with respect to the Certificates alleged to have been lost, stolen or
destroyed.
Section 2.3 Dissenting Stockholders.
Notwithstanding anything in this Agreement to the contrary, shares
of Company Common Stock that are outstanding immediately prior to the Effective
Time and held by a holder thereof who properly exercises and perfects appraisal
rights for such shares in accordance with Section 262 of the DGCL (the
"Dissenting Shares") will be paid for by the Surviving Corporation in accordance
with Section 262 of the DGCL; provided, however, that if any such holder shall
fail to perfect or otherwise shall waive, withdraw or lose the right to
appraisal and payment under the DGCL, the right of such holder to such appraisal
of its shares of Company Common Stock shall cease and such shares of Company
Common Stock shall be deemed converted as of the Effective Time into the right
to receive the Merger Consideration to which any such holder is entitled
pursuant to Section 2.1(a), any cash in lieu of fractional shares payable to any
such holder pursuant to Section 2.2(d) and any dividends or other distributions
to which any such holder is entitled pursuant to Section 2.2(c). The Company
shall give Parent (a) prompt notice of any written demands for appraisal
received by the Company, withdrawals of such demands, and any other related
instruments served pursuant to Section 262 of the DGCL and received by the
Company and (b) the opportunity to direct all negotiations and proceedings with
respect to demands for appraisals under the DGCL. The Company shall not, except
with prior written consent of Parent, (i) voluntarily make any payment with
respect to any demands for
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appraisal for Dissenting Shares, (ii) offer to settle, or settle, any such
demands, (iii) waive any failure to timely deliver a written demand for
appraisal in accordance with the DGCL, or (iv) agree to do any of the foregoing.
Section 2.4 Alternative Merger Consideration.
Notwithstanding anything in this Agreement to the contrary, in the
event that the Tax Opinion condition set forth in Section 7.1(g) would not
otherwise be satisfied with respect to the Merger, the amount of the aggregate
Cash Merger Consideration shall be reduced to the minimum extent necessary and,
subject to the following sentence, the aggregate Stock Merger Consideration
shall be increased to the minimum extent necessary, to enable the Tax Opinion or
Tax Opinions, as the case may be, to be rendered. For purposes of determining
the number of additional shares of Parent Common Stock to be issued to
stockholders of the Company pursuant to the preceding sentence, the Exchange
Ratio shall be increased by an amount equal to the quotient obtained by dividing
(A) the amount of the reduction in the Cash Merger Consideration by (B) the
Parent Closing Price, provided, however, absent a change in law, solely for
purposes of determining whether counsel may render the Tax Opinion or Tax
Opinions, the value of the shares of Parent Common Stock shall be determined by
using the average of the high and low trading price of the Parent Common Stock
on the NYSE on the Closing Date.
Section 2.5 Material Adverse Effect.
(a) The term "Company Material Adverse Effect" means any
change, effect or circumstance that (i) is materially adverse to the business,
operation, properties or condition (financial or otherwise), of the Company and
its Subsidiaries, taken as a whole, or (ii) materially adversely affects the
consummation of the transactions contemplated hereby; provided, however, that in
no event shall any of the following, either alone or in combination, be deemed
to constitute, nor shall any of the following be taken into account in
determining whether there has been or will or could be, a Company Material
Adverse Effect: (A) any changes resulting from or arising out of general market,
economic or political conditions (including any changes arising out of acts of
terrorism, or war, weather conditions or other force majeure events), provided
that such changes do not have a substantially disproportionate impact on the
Company and its Subsidiaries, taken as a whole, (B) any changes resulting from
or arising out of general market, economic or political conditions in the
industries in which the Company or any of its Subsidiaries conduct business
(including any changes arising out of acts of terrorism, or war, weather
conditions or other force majeure events), provided that such changes do not
have a substantially disproportionate impact on the Company and its
Subsidiaries, taken as a whole, (C) any changes resulting from or arising out of
actions taken pursuant to (and required by) this Agreement or at the request of
Parent or the failure to take any actions due to restrictions set forth in this
Agreement, (D) any changes in the price or trading volume of the Company's
stock, in and of itself, (E) any failure by the Company to meet published
revenue or earnings projections, in and of itself, (F) any changes or effects
arising out of or resulting
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from any legal claims or other proceedings made by any of the Company's
stockholders arising out of or related to this Agreement, the Merger or any
other transactions contemplated hereby and (G) any changes arising out of or
resulting from any delay with respect to the receipt by the Company or any of
its Subsidiaries of pending regulatory approvals relating to its proposed
product offerings of no longer than three months after the date that the Company
has informed Parent it expects to obtain such pending regulatory approvals
(provided that at all times during such period, such approvals are still pending
and can be reasonably expected to be obtained within such period).
(b) The term "Parent Material Adverse Effect" means any
change, effect or circumstance that (i) is materially adverse to the business,
operation, properties or condition (financial or otherwise), of Parent and its
Subsidiaries, taken as a whole, or (ii) materially adversely affects the
consummation of the transactions contemplated hereby; provided, however, that in
no event shall any of the following, either alone or in combination, be deemed
to constitute, nor shall any of the following be taken into account in
determining whether there has been or will or could be, a Parent Material
Adverse Effect: (A) any changes resulting from or arising out of general market,
economic or political conditions (including any changes arising out of acts of
terrorism, or war, weather conditions or other force majeure events), provided
that such changes do not have a substantially disproportionate impact on Parent
and its Subsidiaries, taken as a whole, (B) any changes resulting from or
arising out of general market, economic or political conditions in the
industries in which Parent or any of its Subsidiaries conduct business
(including any changes arising out of acts of terrorism, or war, weather
conditions or other force majeure events), provided that such changes do not
have a substantially disproportionate impact on Parent and its Subsidiaries,
taken as a whole, (C) any changes resulting from or arising out of actions taken
pursuant to (and required by) this Agreement or at the request of the Company or
the failure to take any actions due to restrictions set forth in this Agreement,
(D) any changes in the price or trading volume of Parent's stock, in and of
itself, (E) any changes or effects arising out of or resulting from any legal
claims or other proceedings made by any of Parent's stockholders arising out of
or related to this Agreement, the Merger or any other transactions contemplated
hereby, and (F) any failure by Parent to meet published revenue or earnings
projections, in and of itself.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
Except as set forth in the written disclosure schedule prepared by the
Company which is dated as of the date of this Agreement and has been delivered
by the Company to Parent in connection herewith (the "Company Disclosure
Schedule"), the Company represents and warrants to Parent and Merger Sub as
follows:
Section 3.1 Organization and Qualification; Subsidiaries.
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The Company and each of its Subsidiaries is an entity duly organized,
validly existing and in good standing under the Laws of the jurisdiction of its
organization and has the requisite corporate or other power and authority
necessary to own, lease and operate the properties it purports to own, lease or
operate and to carry on its business as it is now being conducted. Each of the
Company and each of its Subsidiaries is duly qualified or licensed as a foreign
corporation to do business, and is in good standing, in each jurisdiction where
the character or location of the properties owned, leased or operated by it or
the nature of its activities makes such qualification or licensing necessary,
except for such failures to be so duly qualified or licensed and in good
standing that would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect . A true, complete and correct list
of all of the Company's Subsidiaries, together with the jurisdiction of
incorporation of each Subsidiary, the authorized capitalization of each
Subsidiary, and the percentage of each Subsidiary's outstanding capital stock
owned by the Company or another Subsidiary or affiliate of the Company, is set
forth in Section 3.1 of the Company Disclosure Schedule. The Company does not
directly or indirectly own any equity or similar interest in, or any interest
convertible into or exchangeable or exercisable for any equity or similar
interest in, any corporation, partnership, limited liability company, joint
venture or other business association or entity, excluding securities in any
publicly traded company held for investment by the Company and comprising less
than one percent of the outstanding stock of such company.
Section 3.2 Certificate of Incorporation and Bylaws.
The Company has heretofore made available to Parent a true, complete
and correct copy of its Amended and Restated Certificate of Incorporation, as
amended to date (the "Company Charter"), and Bylaws, as amended to date (the
"Company Bylaws"), and has furnished to Parent true, complete and correct copies
of the charter and bylaws (or equivalent organizational documents), each as
amended to date, of each of its Subsidiaries (the "Subsidiary Documents"). The
Company Charter, Company Bylaws and the Subsidiary Documents are in full force
and effect. The Company is not in violation of any of the provisions of the
Company Charter or Company Bylaws and the Company's Subsidiaries are not in
violation of any of the provisions of their respective Subsidiary Documents.
Section 3.3 Capitalization.
(a) The authorized capital stock of the Company consists of
180,000,000 shares of Company Common Stock. As of November 4, 2004, (i)
49,610,200 shares of Company Common Stock are issued and outstanding, (ii) 500
shares of Company Common Stock are reserved for issuance upon exercise of awards
granted pursuant to the Company's 1987 (Taunton) Stock Option Plan (the "1987
Plan"), (iii) 0 shares of Company Common Stock are reserved for issuance upon
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exercise of awards granted pursuant to the Company's 1990 Stock Option Plan (the
"1990 Plan"), (iv) 8,848 shares of Company Common Stock are reserved for
issuance upon exercise of awards granted pursuant to the Company's 1993 Flexible
Stock Incentive Plan (the "1993 Plan"), (v) 390,655 shares of Company Common
Stock are reserved for issuance upon exercise of awards and distribution
pursuant to awards granted pursuant to the Company's 1995 Director Option and
Stock Deferral Plan (the "1995 Director Plan"), (vi) 2,718,910 shares of the
Company Common Stock are reserved for issuance upon exercise of awards granted
pursuant to the Company's 1995 Stock Plan (the "1995 Plan"), (vii) 25,961 shares
of the Company Common Stock are reserved for issuance upon exercise of awards
granted pursuant to the Company's 1996 Supplemental Stock Plan (the "1996
Plan"), (viii) 3,937,228 shares of Company Common Stock are reserved for
issuance upon exercise of awards granted pursuant to the Company's 2000 Stock
Plan (the "2000 Plan"), (ix) 1,365,419 shares of Company Common Stock are
reserved for issuance upon exercise of awards granted pursuant to the 2001
Nonstatutory Stock Option Plan (the "2001 Plan" and, together with the 1987
Plan, the 1990 Plan, the 1993 Plan, the 1995 Director Plan, the 1995 Plan, the
1996 Plan and the 2000 Plan, the "Company Stock Plans"), (x) 15,379,889 shares
of Company Common Stock are issued and held in the treasury of the Company and
(xi) no shares of Preferred Stock are issued and outstanding. Between November
4, 2004 and the date of this Agreement, the Company has not issued any
securities (including derivative securities) except for shares of Company Common
Stock issued upon exercise of stock options outstanding.
(b) Section 3.3(b) of the Company Disclosure Schedule sets
forth a true, complete and correct list of all persons who, as of November 4,
2004 held outstanding awards to acquire shares of Company Common Stock (the
"Company Stock Options") under the Company Stock Plans or under any other equity
incentive plan of the Company and its Subsidiaries, indicating, with respect to
each Company Stock Option then outstanding, the type of award granted, the
number of shares of Company Common Stock subject to such Company Stock Option,
the name of the plan under which such Company Stock Option was granted and the
exercise price, date of grant, vesting schedule and expiration date thereof,
including to the extent to which any vesting has occurred as of the date of this
Agreement and whether (and to what extent) the vesting of such Company Stock
Option will be accelerated in any way by the consummation of the transactions
contemplated by this Agreement or by the termination of employment or engagement
or change in position of any holder thereof following or in connection with the
consummation of the Merger. The Company has made available to Parent true,
complete and correct copies of all Company Stock Plans and the forms of all
stock option agreements evidencing outstanding Company Stock Options.
(c) Except as described in Section 3.3(a), no capital stock of
the Company or any of its Subsidiaries or any security convertible or
exchangeable into or exercisable for such capital stock, is issued, reserved for
issuance or outstanding as of the date of this Agreement. Except as described in
Section 3.3(a), there are no options, preemptive rights, warrants, calls,
rights, commitments, agreements, arrangements or understandings of any kind to
which the Company or any of its
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Subsidiaries is a party, or by which the Company or any of its Subsidiaries is
bound, obligating the Company or any of its Subsidiaries to issue, deliver or
sell, or cause to be issued, delivered or sold, additional shares of capital
stock of the Company or any of its Subsidiaries or obligating the Company or any
of its Subsidiaries to grant, extend or accelerate the vesting of or enter into
any such option, warrant, call, right, commitment, agreement, arrangement or
understanding. There are no stockholder agreements, voting trusts, proxies or
other similar agreements, arrangements or understandings to which the Company or
any of its Subsidiaries is a party, or by which it or they are bound, obligating
the Company or any of its Subsidiaries with respect to any shares of capital
stock of the Company or any of its Subsidiaries. There are no rights or
obligations, contingent or otherwise (including rights of first refusal in favor
of the Company), of the Company or any of its Subsidiaries, to repurchase,
redeem or otherwise acquire any shares of capital stock of the Company or any of
its Subsidiaries or to provide funds to or make any investment (in the form of a
loan, capital contribution or otherwise) in any such Subsidiary or any other
entity. There are no registration rights or other similar agreements,
arrangements or understandings to which the Company or any of its Subsidiaries
is a party, or by which it or they are bound, obligating the Company or any of
its Subsidiaries with respect to any shares of Company Common Stock or shares of
capital stock of any such Subsidiary.
(d) All outstanding shares of the Company's capital stock are,
and all shares of Company Common Stock reserved for issuance as specified above
will be, upon issuance on the terms and conditions specified in the instruments
pursuant to which they are issuable, duly authorized, validly issued, fully paid
and nonassessable and not subject to or issued in violation of any purchase
option, call option, right of first refusal, preemptive right, subscription
right or any similar right under any provision of the DGCL, the Company Charter
or the Company Bylaws or any agreement to which the Company is a party or
otherwise bound. None of the outstanding shares of Company Common Stock have
been issued in violation of any federal or state securities Laws. All of the
outstanding shares of capital stock of each of the Company's Subsidiaries are
duly authorized, validly issued, fully paid and nonassessable, and all such
shares (other than directors' qualifying shares in the case of foreign
Subsidiaries) are owned by the Company or a Subsidiary of the Company free and
clear of all security interests, liens, claims, pledges, agreements, limitations
in voting rights, charges or other encumbrances of any nature whatsoever
(collectively, "Liens"). There are no accrued and unpaid dividends with respect
to any outstanding shares of capital stock of the Company or any of its
Subsidiaries.
(e) The Company Common Stock constitutes the only class of
securities of the Company or its Subsidiaries registered or required to be
registered under the Securities Exchange Act of 1934, as amended (the "Exchange
Act").
Section 3.4 Authority Relative to this Agreement; Stockholder
Approval.
(a) Subject only to the approval of the stockholders of the
Company as described below, the Company has full corporate power and authority
to execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The
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execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly approved by the
Board of Directors of the Company (the "Company Board"). As of the date of this
Agreement, the Company Board has unanimously determined that this Agreement and
the transactions contemplated hereby are advisable and in the best interests of
the stockholders of the Company and has unanimously recommended that the
stockholders of the Company adopt this Agreement and approve the Merger (the
"Company Voting Proposal"). The action taken by the Company Board constitutes
approval of the Merger and the other transactions contemplated hereby by the
Company Board under the provisions of Section 203 of the DGCL such that Section
203 of the DGCL does not apply to this Agreement or the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by the Company, and (assuming due authorization, execution and
delivery by Parent and Merger Sub) this Agreement constitutes a valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, except as such enforceability may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or other similar
Laws now or hereafter in effect relating to creditors' rights generally and by
general equitable principles (regardless of whether enforceability is considered
in a proceeding in equity or at Law).
(b) Except for the approval of the Company Voting Proposal by
the affirmative vote of the holders of a majority of the outstanding shares of
the Company Common Stock entitled to vote at a meeting (the "Company
Stockholders Meeting") of the stockholders of the Company convened to consider
and vote upon the Company Voting Proposal (the "Requisite Company Stock
Approval"), no other corporate proceedings on the part of the Company are
necessary to approve this Agreement and to consummate the transactions
contemplated hereby.
Section 3.5 No Conflict; Required Filings and Consents.
(a) The execution and delivery by the Company of this
Agreement do not, the execution and delivery by the Company of any instrument
required hereby to be executed and delivered by the Company at the Closing will
not, and the performance by the Company of its agreements and obligations under
this Agreement will not, (i) conflict with or violate the Company Charter or
Company Bylaws or any Subsidiary Documents, (ii) in any material respect,
conflict with or violate any Law applicable to the Company or any of its
Subsidiaries or by which its or any of their respective properties is bound or
affected, (iii) result in any breach of or constitute a default (or an event
that with notice or lapse of time or both would become a default), or impair the
Company's or any of its Subsidiaries' rights or alter the rights or obligations
of any third party or the Company (including monetary rights and obligations)
under, or give to any third party any rights of termination, amendment, payment,
acceleration or cancellation of, or result in the creation of a Lien on any of
the properties or assets (including intangible assets) of the Company or any of
its Subsidiaries pursuant to, (x) any Identified Contract (as defined in Section
3.12) or (y) except would not
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reasonably be expected to have a Company Material Adverse Effect, any note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries or
its or any of their respective properties is bound or affected, or (v) other
than the Company Stock Options, give rise to or result in any person having, or
having the right to exercise, any pre-emptive rights, rights of first refusal,
rights to acquire or similar rights with respect to any capital stock of the
Company or any of its Subsidiaries or any of their respective assets or
properties.
(b) The execution and delivery by the Company of this
Agreement do not, the execution and delivery by the Company of any instrument
required hereby to be executed and delivered by the Company at the Closing will
not, and the performance of its agreements and obligations under this Agreement
by the Company will not, require any consent, approval, order, license,
authorization, registration, declaration or permit of, or filing with or
notification to, any nation or government, any state, province or other
political subdivision thereof or any multinational organization or body or other
entity having or exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government (including any court,
arbitrational tribunal, administrative or regulatory agency or commission or
other governmental authority or instrumentality), whether domestic or foreign,
(a "Governmental Entity"), except (i) as may be required by the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), (ii) as may be required under any foreign antitrust or competition Law,
(iii) the filing of the Joint Proxy Statement/Prospectus (as defined in Section
6.4) with the U.S. Securities and Exchange Commission (the "SEC") under the
Exchange Act, (iv) such consents, approvals, orders, licenses, authorizations,
registrations, declarations, permits, filings, and notifications as may be
required under applicable U.S. federal and state or foreign securities Laws, (v)
the filing of the Certificate of Merger or other documents as required by the
DGCL and (vi) such other clearances, consents, approvals, orders, registrations,
declarations, permits, filings and notifications which, if not obtained or made,
would not reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect.
Section 3.6 Compliance; Permits.
(a) The Company and its Subsidiaries are and have been in
material compliance with and are not in material default or violation of (and
have not received any notice of material non-compliance, default or violation
with respect to) any Law applicable to the Company or any of its Subsidiaries or
by which any of their respective properties is bound or affected (including,
without limitation, federal or state criminal or civil health care Laws and the
regulations promulgated pursuant to such Laws and Laws relating to unlawful
practice of medicine or other professionally licensed activities).
(b) The Company and its Subsidiaries hold all permits,
licenses, easements, variances, exemptions, consents, certificates,
authorizations, registrations, orders
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and other approvals from Governmental Entities that are material to the
operation of the business of the Company and its Subsidiaries taken as a whole
as currently conducted (collectively, the "Company Permits"). The Company
Permits are in full force and effect, have not been violated in any material
respect and, to the Company's Knowledge, no suspension, revocation or
cancellation thereof has been threatened, and there is no action, proceeding or
investigation pending or, to the Company's Knowledge, threatened, seeking the
suspension, revocation or cancellation of any Company Permits. No Company Permit
shall cease to be effective as a result of the consummation of the transactions
contemplated by this Agreement, other than as would not reasonably be expected
to have a Company Material Adverse Effect.
Section 3.7 SEC Filings; Financial Statements.
(a) The Company has filed all forms, reports, schedules,
statements and other documents, including any exhibits thereto, required to be
filed by the Company since January 1, 2002 with the SEC (collectively, the
"Company SEC Reports"). The Company SEC Reports, including all forms, reports
and documents filed by the Company with the SEC after the date hereof and prior
to the Effective Time, (i) were and, in the case of Company SEC Reports filed
after the date hereof, will be, prepared in all material respects in accordance
with the applicable requirements of the Securities Act and the Exchange Act, as
the case may be, and the rules and regulations thereunder, and (ii) did not at
the time they were filed (or if amended or superseded by a filing prior to the
date of this Agreement, then on the date of such filing), and in the case of
such forms, reports and documents filed by the Company with the SEC after the
date of this Agreement, will not as of the time they are filed, contain any
untrue statement of a material fact or omit to state a material fact required to
be stated in such Company SEC Reports or necessary in order to make the
statements in such Company SEC Reports, in light of the circumstances under
which they were and will be made, not misleading. None of the Subsidiaries of
the Company is required to file any forms, reports, schedules, statements or
other documents with the SEC.
(b) Each of the consolidated financial statements (including,
in each case, any related notes and schedules), contained in the Company SEC
Reports, including any Company SEC Reports filed between the date of this
Agreement and the Closing, complied or will comply, as of its respective date,
in all material respects with all applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, was or will be
prepared in accordance with U.S. generally accepted accounting principles
("GAAP") (except as may be indicated in the notes thereto) applied on a
consistent basis throughout the periods involved and fairly presented in all
material respects or will fairly present in all material respects the
consolidated financial position of the Company and its consolidated Subsidiaries
as of the respective dates thereof and the consolidated results of the
operations and cash flows of the Company and its consolidated Subsidiaries for
the periods indicated, except as otherwise explained therein and except that any
unaudited interim financial statements are subject to normal and
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recurring year-end adjustments which have not been made and are not expected to
be material in amount, individually or in the aggregate. The audited balance
sheet of the Company contained in the Company SEC Report on Form 10-K for the
fiscal year ended December 31, 2003 is referred to herein as the "Company
Balance Sheet."
(c) The chief executive officer and chief financial officer of
the Company have made all certifications required by, and would be able to make
such certifications as of the date hereof and as of the Closing Date as if
required to be made as of such dates pursuant to, Sections 302 and 906 of the
Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act") and any related rules and
regulations promulgated by the SEC, and the statements contained in any such
certifications are complete and correct, and the Company is otherwise in
compliance with all applicable effective provisions of the Sarbanes-Oxley Act
and the applicable listing standards and corporate governance rules of the NYSE.
(d) Each of the consolidated financial statements (including,
in each case, any related notes and schedules) contained in the Company SEC
Reports, accurately reflects the revenues and costs relating to the Identified
Contracts.
Section 3.8 Disclosure Controls and Procedures.
Since December 31, 2003 the Company and each of its Subsidiaries has
had in place "disclosure controls and procedures" (as defined in Rules 13a-15(e)
and 15d-15(e) promulgated under the Exchange Act) reasonably designed and
maintained to ensure that all information (both financial and non-financial)
required to be disclosed by the Company in the reports that it files or submits
to the SEC under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the rules and forms of the SEC and
that such information is accumulated and communicated to the Company's
management as appropriate to allow timely decisions regarding required
disclosure and to make the certifications of the chief executive officer and
chief financial officer of the Company required under the Exchange Act with
respect to such reports. The Company maintains internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets, (iii) access to assets is permitted only in
accordance with management's general or specific authorization, and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
Section 3.9 Absence of Certain Changes or Events.
From the date of the Company Balance Sheet and except as disclosed
in the Company SEC Reports through the date hereof, the Company has conducted
its business in the ordinary course of business consistent with past practice
and, since such date and through
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the date hereof, there has not occurred: (i) any Company Material Adverse
Effect; (ii) any amendments to or changes in the Company Charter, Company Bylaws
or Subsidiary Documents; (iii) any material damage to, destruction or loss of
any asset of the Company or any of its Subsidiaries (whether or not covered by
insurance); (iv) any change by the Company in its accounting methods, principles
or practices; (v) any revaluation by the Company of any of its assets, including
writing down the value of inventory or writing off notes or accounts receivable
other than in the ordinary course of business consistent with past practice;
(vi) any sale of a material amount of assets (tangible or intangible) of the
Company or any of its Subsidiaries; (vii) any recalls, field notifications,
field corrections or safety alerts with respect to products manufactured by or
on behalf of the Company or any of its Subsidiaries; or (viii) any other action
or event that would have required the consent of Parent pursuant to Section 5.1
had such action or event occurred after the date of this Agreement.
Section 3.10 No Undisclosed Liabilities.
(a) Except as reflected in the Company Balance Sheet, neither
the Company nor any of its Subsidiaries has any liabilities (absolute, accrued,
contingent or otherwise) which are required by GAAP to be set forth on a
consolidated balance sheet of the Company and its consolidated subsidiaries or
in the notes thereto, other than (i) any liabilities and obligations incurred
since the date of the Company Balance Sheet in the ordinary course of business
consistent with past practice, (ii) any liabilities or obligations incurred in
connection with the transactions contemplated by this Agreement and (iii)
liabilities that, individually or in the aggregate, have not had, and would not
reasonably be expected to have, a Company Material Adverse Effect.
(b) Neither the Company nor any of its Subsidiaries is a party
to, or has any commitment to become a party to, any joint venture, partnership
agreement or any similar contract (including any contract relating to any
transaction, arrangement or relationship between or among the Company or any of
its Subsidiaries, on the one hand, and any unconsolidated affiliate, including
any structured finance, special purpose or limited purpose entity or person, on
the other hand) where the purpose or intended effect of such arrangement is to
avoid disclosure of any material transaction involving the Company or any of its
Subsidiaries in the Company's consolidated financial statements.
Section 3.11 Absence of Litigation; Investigations. Except as
disclosed in the Company SEC Reports prior to the date of this Agreement, there
are no material claims, actions, suits, proceedings, governmental
investigations, inquiries or subpoenas (other than challenging or arising from
or relating to the Merger or any of the other transactions contemplated by this
Agreement), (a) pending against the Company or any of its Subsidiaries or any of
their respective properties or assets, (b) to the Company's Knowledge,
threatened against the Company or any of its Subsidiaries, or any of their
respective properties or assets or (c) whether filed or threatened, that have
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been settled or compromised by the Company or any Subsidiary within the three
years prior to the date of this Agreement and at the time of such settlement or
compromise were material which claims, actions, suits, proceedings
investigations, inquiries or subpoenas referred to in clause (a) would
reasonably be expected to have a Company Material Adverse Effect. Neither the
Company nor any Subsidiary of the Company is subject to any outstanding order,
writ, injunction or decree that would reasonably be expected to be material or
would reasonably be expected to prevent or delay the consummation of the
transactions contemplated by this Agreement. There has not been nor are there
currently any internal investigations or inquiries being conducted by the
Company, the Company Board (or any committee thereof) or any third party at the
request of any of the foregoing concerning any financial, accounting, tax,
conflict of interest, self-dealing, fraudulent or deceptive conduct or other
misfeasance or malfeasance issues.
Section 3.12 Agreements, Contracts and Commitments.
(a) All of the Company Material Contracts (as defined below)
that are required to be described in the Company SEC Reports (or to be filed as
exhibits thereto) are so described or filed and are in full force and effect.
Section 3.12(a) of the Company Disclosure Schedule contains a complete and
accurate list of, and true and complete copies have been delivered or made
available to Parent with respect to, all Company Material Contracts in effect as
of the date hereof other than the Company Material Contracts which are listed as
an exhibit to the Company's most recent annual report on Form 10-K or a
subsequent quarterly report on Form 10-Q or as otherwise set forth on Section
3.12(a) of the Company Disclosure Schedule. "Company Material Contracts" shall
mean any note, bond, mortgage, indenture, guarantee, other evidence of
indebtedness, lease, license, contract, agreement or other instrument or
obligation to which the Company or any of its Subsidiaries is a party or by
which any of them or any of their assets are bound, and which either (i) has a
remaining term of more than one year from the date hereof and (A) cannot be
unilaterally terminated by the Company at any time, without material penalty,
within thirty (30) days of providing notice of termination, and (B) involves the
payment or receipt of money in excess of $500,000 per year, (ii) involves the
payment or receipt of money in excess of $1,000,000 per year or (iii) contains
covenants limiting the freedom of the Company or any of its Subsidiaries to sell
any products or services of or to any other person, engage in any line of
business or compete with any person or operate at any location, or (iv) is one
of those agreements of the Company or its Subsidiaries identified on Section
3.12(a) of the Company Disclosure Schedule (the "Identified Contracts");
provided, however, that a Real Property Lease shall not be considered a Company
Material Contract.
(b) As of the date of this Agreement, (i) there is no breach
or violation of or default by the Company or any of its Subsidiaries under any
of the Company Material Contracts, except such breaches, violations and defaults
as have been waived, and (ii) no event has occurred with respect to the Company
or any of its Subsidiaries which, with notice or lapse of time or both, would
constitute a breach, violation or default, or give rise to
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a right of termination, modification, cancellation, foreclosure, imposition of a
Lien, prepayment or acceleration under any of the Company Material Contracts,
which breach, violation or default referred to in clauses (i) or (ii) with
respect to the Company Material Contracts, other than the Identified Contracts,
would reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect.
Section 3.13 Employee Benefit Plans, Options and Employment
Agreements.
(a) Section 3.13(a) of the Company Disclosure Schedule sets
forth a complete and accurate list of all Employee Benefit Plans maintained, or
contributed to by the Company, any of the Company's Subsidiaries or any of their
respective ERISA Affiliates or to which the Company, any of the Company's
Subsidiaries or any of their respective ERISA Affiliates is obligated to
contribute, or under which any of them has or may have any liability for
premiums or benefits (collectively, the "Company Employee Plans"). For purposes
of this Agreement, the following terms shall have the following meanings: (i)
"Employee Benefit Plan" means any "employee pension benefit plan" (as defined in
Section 3(2) of ERISA), any "employee welfare benefit plan" (as defined in
Section 3(1) of ERISA), and any other written or oral plan, agreement or
arrangement involving material compensation, including insurance coverage,
severance benefits, disability benefits, deferred compensation, bonuses, stock
options, stock purchase, phantom stock, stock appreciation or other forms of
fringe benefits, perquisites, incentive compensation or post-retirement
compensation and all employment, change in control, severance or similar
agreements, written or otherwise, for the benefit of, or relating to, any
current or former employee, officer or director of the Company or any of its
Subsidiaries or Parent, as applicable, or any ERISA Affiliate; (ii) "ERISA"
means the Employee Retirement Income Security Act of 1974, as amended; and (iii)
"ERISA Affiliate" means any entity which is, or at any applicable time was, a
member of (A) a controlled group of corporations (as defined in Section 414(b)
of the Code), (B) a group of trades or businesses under common control (as
defined in Section 414(c) of the Code) or (C) an affiliated service group (as
defined under Section 414(m) of the Code or the regulations under Section 414(o)
of the Code), any of which includes or included the Company or Parent, as
applicable, or a Subsidiary.
(b) With respect to each Company Employee Plan, the Company
has made available to Parent complete and accurate copies of (i) such Company
Employee Plan (or a written summary of any unwritten plan) together with all
amendments, (ii) in the case of any plan for which Forms 5500 are required to be
filed, the most recent annual report (Form 5500) with schedules attached, (iii)
in the case of any plan that is intended to be qualified under Section 401(a) of
the Code, the most recent determination letter from the Internal Revenue
Service, (iv) each trust agreement, group annuity contract, administration and
similar material agreements, investment management or investment advisory
agreements, (v) the most recent summary plan descriptions and employee handbook,
or other
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similar material employee communications relating to employee benefits matters,
(vi) all personnel, payroll and employment manuals and policies, and (vii) the
most recent financial statements for each Company Employee Plan that is funded.
(c) Each Company Employee Plan has been administered in all
material respects in accordance with ERISA, the Code and all other applicable
Laws and the regulations thereunder and in accordance with its terms and each of
the Company, the Company's Subsidiaries and their respective ERISA Affiliates
have in all material respects met their obligations with respect to each Company
Employee Plan and have timely made (or timely will make) all required
contributions thereto. All filings and reports as to each Company Employee Plan
required to have been submitted to the Internal Revenue Service or to the United
States Department of Labor have been timely submitted. With respect to the
Company Employee Plans, no event has occurred, and, to the Company's Knowledge,
there exists no condition or set of circumstances in connection with which the
Company, Parent or any of their respective Subsidiaries or any plan participant
could be subject to any material liability (including penalties or taxes) under
ERISA, the Code or any other applicable Law, nor will the negotiation or
consummation of the transactions contemplated by this Agreement give rise to any
such material liability.
(d) With respect to the Company Employee Plans, there are no
material benefit obligations for which contributions have not been made or
properly accrued and there are no benefit obligations which have not been
accounted for by reserves, or otherwise properly footnoted in accordance with
the requirements of GAAP, on the financial statements of the Company. The assets
of each Company Employee Plan which is funded are reported at their fair market
value on the books and records of such Employee Benefit Plan.
(e) No Company Employee Plan (other than the Company Stock
Plans) has assets that include securities issued by the Company, any of the
Company's Subsidiaries or any of their ERISA Affiliates.
(f) All the Company Employee Plans that are intended to be
qualified under Section 401(a) of the Code (each, a "Qualified Plan") have
received determination, opinion or advisory letters from the Internal Revenue
Service to the effect that such Company Employee Plans are qualified and the
plans and trusts related thereto are exempt from federal income taxes under
Sections 401(a) and 501(a), respectively, of the Code, or the Company has
remaining a period of time under applicable U.S. Department of the Treasury
regulations or Internal Revenue Service pronouncements in which to apply for
such a letter and to make any amendments necessary to obtain a favorable
determination as to the qualified status of each such Qualified Plan. To the
Company's Knowledge, no such determination, opinion or advisory letter has been
revoked and revocation has not been threatened, and no such Employee Benefit
Plan has been amended or operated since the date of its most recent
determination letter or application therefor in any respect, and no act or
omission has occurred, that would reasonably be expected to adversely affect its
qualification or materially increase its cost. There has been no termination,
partial termination or discontinuance of contributions to any Qualified Plan
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that will result in material liability to the Company. Each Company Employee
Plan which is required to satisfy Section 401(k)(3) or Section 401(m)(2) of the
Code has been tested for compliance with, and satisfies in all material respects
the requirements of Section 401(k)(3) and Section 401(m)(2) of the Code, as the
case may be, for each plan year ending prior to the Closing Date for which
testing is required to be completed.
(g) Neither the Company, any of the Company's Subsidiaries nor
any of their respective ERISA Affiliates has (i) ever maintained a Company
Employee Plan which was ever subject to Section 412 of the Code or Title IV of
ERISA or (ii) ever been obligated to contribute to a "multiemployer plan" (as
defined in Section 4001(a)(3) of ERISA). No Company Employee Plan is funded by,
associated with or related to a "voluntary employees' beneficiary association"
within the meaning of Section 501(c)(9) of the Code.
(h) To the extent permitted by applicable Law, each Company
Employee Plan (other than the Company Stock Plans or an employment, severance,
change in control or similar agreement with an individual) is amendable and
terminable unilaterally by the Company and any of the Company's Subsidiaries
party thereto or covered thereby at any time without material liability to the
Company or any of its Subsidiaries as a result thereof, other than for benefits
accrued as of the date of such amendment or termination and routine
administrative costs.
(i) Other than as required under Section 601 et seq. of ERISA,
none of the Company Employee Plans promises or provides health or other welfare
benefits (excluding normal claims for benefits under the Company's group life
insurance, accidental death and dismemberment insurance and disability plans and
policies) or coverage to any person following retirement or other termination of
employment. Section 3.13(i) of the Company Disclosure Schedule lists each
Company Employee Plan which provides benefits after termination of employment
(other than medical benefits required to be continued under Section 4980B of the
Code and part 6 of Subtitle B of Title I of ERISA) and normal claims for
benefits under the Company's group life insurance, accidental death and
dismemberment insurance and disability plans and policies) and the present value
of benefits accrued under each such Company Employee Plan are fully funded,
fully covered by insurance or reflected on the Company Balance Sheet in
accordance with GAAP.
(j) There is no action, suit, proceeding, claim, arbitration,
audit or investigation pending or, to the Company's Knowledge, threatened, with
respect to any Company Employee Plan, other than claims for benefits in the
ordinary course. No Company Employee Plan is or within the last three calendar
years has been the subject of, or has received notice that it is the subject of,
examination by a government agency or a participant in a government sponsored
amnesty, voluntary compliance or similar program.
(k) To the Company's Knowledge, each individual who has
received compensation for the performance of services on behalf of the Company,
any of the Company's Subsidiaries or any of their respective ERISA Affiliates
has been properly classified as an employee or independent contractor in
accordance with applicable Law.
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(l) Each Company Employee Plan maintained or covering
employees outside the United States, and the books and records thereof, is in
material compliance with all applicable Laws of each applicable jurisdiction.
Section 3.13(l) of the Company Disclosure Schedule lists each country in which
the Company or any of its Subsidiaries or affiliates has operations and the
number of employees in each such country.
(m) Section 3.13(m) of the Company Disclosure Schedule sets
forth a true, complete and correct list of (i) all employment agreements with
employees of the Company or any of its Subsidiaries; (ii) all employees or
former employees of the Company or any of its Subsidiaries who have executed a
non-competition agreement with the Company or any of its Subsidiaries; (iii) all
severance agreements, programs and policies of the Company or any of its
Subsidiaries with or relating to its employees, excluding programs and policies
required to be maintained by Law; and (iv) all plans, programs, agreements and
other arrangements of the Company or any of its Subsidiaries pursuant to which
payments (or acceleration of benefits or vesting of options or lapse of
repurchase rights) may be required, or may become payable directly or indirectly
as a result of or in connection with, the negotiation or consummation of the
transactions contemplated by, or the execution of, this Agreement. True,
complete and correct copies of each of the foregoing agreements to which any
employee of the Company is a party have been made available to Parent.
(n) All contributions required to be made with respect to any
Company Employee Plan on or prior to the Effective Time have been or will be
timely made or are reflected on the Company Balance Sheet. There are no pending,
threatened or reasonably anticipated claims by or on behalf of any Plan, by any
employee or beneficiary covered under any such Company Employee Plan, or
otherwise involving any such Plan (other than routine claims for benefits).
(o) The negotiation or consummation of the transactions
contemplated by this Agreement will not, either alone or in combination with
another event, (i) entitle any current or former employee or officer of the
Company or any Subsidiary of the Company to severance pay, or any other payment
from the Company or any of its Subsidiaries or (ii) accelerate the time of
payment or vesting, a lapse of repurchase rights or increase the amount of
compensation due any such employee or officer. There is no Company Employee Plan
or other contract, agreement, plan or arrangement that, individually or
collectively, could give rise to the payment of any amount that would not be
deductible pursuant to Sections 280G (determined without regard to Section
280G(b)(4) of the Code) or 162(m) of the Code.
Section 3.14 Labor Matters.
(a) The Company and each of its Subsidiaries are in compliance
in all material respects with all applicable Laws respecting employment and
employment practices, including, without limitation, all Laws respecting terms
and conditions of employment, health and safety, wages and hours, child labor,
immigration, employment
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discrimination, disability rights or benefits, equal opportunity, plant closures
and layoffs, affirmative action, workers' compensation, labor relations,
employee leave issues and unemployment insurance.
(b) There are no personnel manuals, handbooks, policies, rules
or procedures applicable to employees of the Company and/or any of its
Subsidiaries, other than those set forth in Section 3.14(b) of the Company
Disclosure Schedule, true and complete copies or written summaries of which have
heretofore been provided to Parent.
(c) There are no actions, suits, claims, grievances,
investigations, or other proceedings pending or, to the Company's Knowledge,
threatened, between (i) the Company or any of its Subsidiaries (and/or any of
their current or former officers, directors, employees, or representatives, in
their capacities as such) and (ii) any of their respective current or former
employees, consultants or independent contractors, or any applicant for
employment or classes of the foregoing, or any Governmental Entity, which
actions, suits, claims, grievances, investigations, or other proceedings have or
would reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect.
(d) The Company and each of its Subsidiaries has good labor
relations, and the Company, each of its Subsidiaries, and their respective
employees, agents or representatives have not committed any unfair labor
practice as defined in the National Labor Relations Act. Neither the Company nor
any of its Subsidiaries is a party to, bound by or subject to (and none of the
Company's and/or any of its Subsidiaries' properties or assets is bound by or
subject to) any labor agreement, collective bargaining agreement, work rules or
practices, or any other labor-related agreements or arrangements with any labor
union, labor organization, trade union or works council. There are no labor
agreements, collective bargaining agreements, work rules or practices, or any
other labor-related agreements or arrangements that pertain to any of the
employees of the Company and/or any of its Subsidiaries, and no employees of the
Company and/or any of its Subsidiaries are represented by any labor union, labor
organization, trade union or works council with respect to their employment with
the Company and/or any of its Subsidiaries.
(e) To the Company's Knowledge, there are no current labor
union organizing activities with respect to any employees of the Company and/or
any of its Subsidiaries, and no labor union, labor organization, trade union,
works council, or group of employees of the Company and/or any of its
Subsidiaries has made a pending demand for recognition or certification, and
there are no representation or certification proceedings or petitions seeking a
representation proceeding presently pending or threatened in writing to be
brought or filed with the National Labor Relations Board or any other labor
relations tribunal or authority. To the Company's Knowledge there are no labor
disputes, strikes, slowdowns, work stoppages, lockouts, or threats thereof,
against or affecting the Company or any of its Subsidiaries.
(f) No employee of the Company or any of its Subsidiaries (i)
to the Company's Knowledge is in violation of any term of any patent disclosure
agreement, non-competition agreement, or any restrictive covenant to a former
employer relating to the right
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of any such employee to be employed by the Company or any of its Subsidiaries
because of the nature of the business conducted or presently proposed to be
conducted by the Company or any of its Subsidiaries or relating to the use of
trade secrets or proprietary information of others, or (ii) in the case of any
key employee or group of key employees, has given notice as of the date of this
Agreement to the Company or any of its Subsidiaries that such employee or any
employee in a group of key employees intends to terminate his or her employment
with the Company or any of its Subsidiaries.
(g) The Company and each of its Subsidiaries are and have been
in compliance with all notice and other requirements under the Worker Adjustment
and Retraining Notification Act of 1988, as amended (the "WARN Act"), and any
similar foreign, state or local Law relating to plant closings and layoffs.
Neither the Company nor any of its Subsidiaries is currently engaged in any
layoffs or employment terminations sufficient in number to trigger application
of the WARN Act or any similar state, local or foreign Law. Section 3.14(g) of
the Company Disclosure Schedule contains a true and complete list of the names
and the sites of employment or facilities of those individuals who suffered an
"employment loss" (as defined in the WARN Act) at any site of employment or
facility of the Company or any of its Subsidiaries during the 90-day period
prior to the date of this Agreement. Section 3.14(g) of the Company Disclosure
Schedule shall be updated immediately prior to the Closing with respect to the
90-day period prior to the Closing.
(h) The execution of this Agreement and the consummation of
the transactions contemplated by this Agreement will not result in any breach or
other violation of any collective bargaining agreement, employment agreement,
consulting agreement or any other labor-related agreement to which the Company
and/or any of its Subsidiaries is a party.
Section 3.15 Properties; Encumbrances.
Each of the Company and each of its Subsidiaries has good and valid
title to, or a valid leasehold interest in, all the properties and assets which
it purports to own or lease (real, tangible, personal and mixed), including all
the properties and assets reflected in the Company Balance Sheet (except for
personal property sold since the date of the Company Balance Sheet in the
ordinary course of business consistent with past practice). All properties and
assets reflected in the Company Balance Sheet are free and clear of all Liens,
except for Liens reflected on the Company Balance Sheet and Liens for current
taxes not yet due and other Liens that do not materially detract from the value
or impair the use of the property or assets subject thereto. Section 3.15 of the
Company Disclosure Schedule sets forth a true, complete and correct list of all
real property owned, leased, subleased or licensed by the Company and the
location of such premises. All material real property leases, licenses or other
occupancy agreements to which the Company or any of its Subsidiaries is a party
(collectively, the "Company Real Property Leases") are either filed as exhibits
to the Company SEC Reports or complete copies thereof have been delivered to or
made available to Parent. Section 3.15 of the Company Disclosure Schedule lists
all Company Real Property Leases other than the Company Real Property Leases
which are listed as an exhibit to the Company's most recent
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annual report on Form 10-K or a subsequent quarterly report on Form 10-Q. As of
the date of this Agreement, (i) all Company Real Property Leases are in full
force and effect (except as such enforceability may be subject to laws of
general application relating to bankruptcy, insolvency and the relief of debtors
and rules of law governing specific performance, injunctive relief or other
equitable remedies), (ii) there is no existing material breach or violation of
or default by the Company or any of its Subsidiaries under any of the Company
Real Property Leases, except such breaches, violations and defaults as have been
waived in writing, (iii) no event has occurred with respect to the Company or
any of its Subsidiaries which, with notice or lapse of time or both, would
constitute a material breach, violation or default of any of the Company Real
Property Leases, and (iv) to the Company's Knowledge, there are no breaches,
defaults or violations of any material obligations of the landlord under any
Company Real Property Lease.
Section 3.16 Taxes.
(a) For purposes of this Agreement, "Tax" or "Taxes" shall
mean taxes, fees, assessments, liabilities, levies, duties, tariffs, imposts and
governmental impositions or charges of any kind in the nature of (or similar to)
taxes, payable to any federal, state, local or foreign taxing authority, or any
agency or subdivision thereof, including (i) income, franchise, profits, gross
receipts, ad valorem, net worth, value added, sales, use, service, real or
personal property, special assessments, capital stock, license, payroll,
withholding, employment, social security, workers' compensation, unemployment
compensation, utility, severance, production, excise, stamp, occupation,
premiums, windfall profits, transfer and gains taxes, and (ii) interest,
penalties, fines, additional taxes and additions to tax imposed with respect
thereto; and "Tax Returns" shall mean returns, reports and information
statements with respect to Taxes required to be filed with a taxing authority,
domestic or foreign, including, consolidated, combined or unitary tax returns
and any amendments to any of the foregoing.
(b) The Company and each of its Subsidiaries have filed with
the appropriate taxing authorities all material Tax Returns required to be filed
by them, and all such Tax Returns were true, complete and correct in all
material respects. All Taxes required to be paid by the Company and each of its
Subsidiaries have been timely paid. There are no Tax Liens on any assets of the
Company or any Subsidiary thereof other than liens relating to Taxes not yet due
and payable. Neither the Company nor any of its Subsidiaries has granted any
outstanding waiver of any statute of limitations with respect to, or any
outstanding extension of a period for the assessment of, any Tax. The accruals
and reserves for Taxes (exclusive of any accruals for "deferred taxes" or
similar items that reflect timing differences between tax and financial
accounting principles) reflected in the Company Balance Sheet are adequate to
cover all Taxes accruable through the date thereof (including interest and
penalties, if any, thereon and Taxes being contested) in accordance with GAAP
applied on a consistent basis with the Company Balance Sheet. All liabilities
for Taxes attributable to the period commencing on the date following the date
of the
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Company Balance Sheet were incurred in the ordinary course of business and are
consistent in type and amount with Taxes attributable to similar prior periods.
(c) The Company and each of its Subsidiaries have timely
withheld with respect to its employees all federal and state Taxes required to
be withheld. Neither the Company nor any of its Subsidiaries has received any
notice of any Tax deficiency outstanding, proposed or assessed against the
Company or any of its Subsidiaries. Neither the Company nor any of its
Subsidiaries has received any written notice of any audit examination,
deficiency, refund litigation, proposed adjustment or matter in controversy with
respect to any Tax Return of the Company or any of its Subsidiaries. Neither the
Company nor any of its Subsidiaries is a party to or bound by any tax indemnity,
tax sharing or tax allocation agreements with any entity other than the Company
or any Company Subsidiary. Except for the group of which the Company and its
Subsidiaries are now currently members, neither the Company nor any of its
Subsidiaries has ever been a member of an affiliated group of corporations
within the meaning of Section 1504 of the Code. Neither the Company nor any of
its Subsidiaries is liable for the Taxes of any person under Treasury Regulation
1.1502-6 (or any similar provision of state, local or foreign Law) as a
transferee or successor, by contract or otherwise.
(d) To the extent requested by Parent, the Company made
available to Parent complete and correct copies of all income Tax Returns,
examination reports and statements of deficiencies assessed against or agreed to
by the Company or any of its Subsidiaries with respect to all taxable years for
which the statutes of limitation have not expired.
(e) Neither the Company nor any of its Subsidiaries has agreed
nor is it required to make any material adjustment under Section 481 of the Code
by reason of a change in accounting method or otherwise prior to the Effective
Time.
(f) Neither the Company nor any of its Subsidiaries is, or has
been, a United States real property holding corporation (as defined in Section
897(c)(2) of the Code) during the applicable period specified in Section
897(c)(1)(A)(ii) of the Code.
(g) Neither the Company nor any of its Subsidiaries has
constituted either a "distributing corporation" or a "controlled corporation"
(within the meaning of Section 355(a)(1)(A) of the Code) in a distribution of
stock qualifying for tax-free treatment under Section 355 of the Code (A) in the
two years prior to the date of this Agreement or (B) in a distribution which
could otherwise constitute part of a "plan" or "series of related transactions"
(within the meaning of Section 355(e) of the Code) in connection with the
Merger.
(h) Neither the Company nor any of its Subsidiaries is a party
to, or has any commitment to become a party to, any tax shelter arrangement as
described in Internal Revenue Service final regulations (T.D. 9046).
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(i) The Company is not aware of any basis upon which the
Internal Revenue Service could reasonably challenge the tax-free treatment of
the spin-off of Parent by Allergan, Inc.
Section 3.17 Environmental Matters.
Except as disclosed in the Company SEC Reports, (a) the Company and
its Subsidiaries are in compliance in all material respects with federal, state,
local and foreign Laws and regulations relating to pollution, protection or
preservation of human health or the environment, including, without limitation,
Laws and regulations relating to emissions, discharges, releases or threatened
releases of toxic or hazardous substances, materials or wastes, petroleum and
petroleum products, asbestos or asbestos-containing materials, polychlorinated
biphenyls, radon, or lead or lead-based paints or materials ("Materials of
Environmental Concern"), or otherwise relating to the generation, storage,
containment (whether above ground or underground), disposal, transport or
handling of Materials of Environmental Concern, or the preservation of the
environment or mitigation of adverse effects thereon (collectively,
"Environmental Laws"), and including, but not limited to, compliance with any
Company Permits or other governmental authorizations or the terms and conditions
thereof; (b) neither the Company nor any of its Subsidiaries has received any
communication or notice, whether from a governmental authority or otherwise,
alleging any violation of or noncompliance with any Environmental Laws by any of
the Company or its Subsidiaries or for which the any of them is responsible, and
there is no pending or threatened claim, action, investigation or notice by any
person or entity alleging potential liability for investigatory, cleanup or
governmental response costs, or natural resources or property damages, or
personal injuries, attorney's fees or penalties relating to (i) the presence, or
release into the environment, of any Materials of Environmental Concern at any
location owned or operated by the Company or its Subsidiaries, now or in the
past, or (ii) any violation, or alleged violation, of any Environmental Law
(collectively, "Environmental Claims"), except where such Environmental Claims
would not reasonably be expected to have a Company Material Adverse Effect or
otherwise require disclosure in the Company SEC Reports; and (c) there are no
past or present facts or circumstances that could reasonably be expected to form
the basis of any Environmental Claim against the Company or its Subsidiaries or
against any person or entity whose liability for any Environmental Claim the
Company or its Subsidiaries have retained or assumed either contractually or by
operation of Law, except where such Environmental Claim, if made, would not have
a Company Material Adverse Effect or otherwise require disclosure in the Company
SEC Reports. The Company has provided to Parent and Merger Sub all assessments,
reports, data, results of investigations or audits, and other information that
is in the possession of or reasonably available to the Company regarding
environmental matters pertaining to or the environmental condition of the
business of the Company and its Subsidiaries, or the compliance (or
noncompliance) by the Company or its Subsidiaries with any Environmental Laws.
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Section 3.18 Intellectual Property.
(a) Section 3.18(a) of the Company Disclosure Schedule sets
forth as of the date hereof a true, complete and correct list of all Company
Registered Intellectual Property. All of the Company Registered Intellectual
Property is owned solely by the Company or one of its Subsidiaries. "Registered
Intellectual Property" means U.S. and foreign (i) patents and pending patent
applications; (ii) trademark registrations (including Internet domain
registrations) and pending trademark applications; and (iii) copyright
registrations and pending copyright applications. "Company Registered
Intellectual Property" means all Registered Intellectual Property owned by the
Company or any of its Subsidiaries.
(b) The Company or one or more of its Subsidiaries owns, or
has a valid right to use all of the material Intellectual Property (as defined
below) that is used in the business of the Company and its Subsidiaries as
currently conducted.
(c) The Registered Intellectual Property that is used in the
business of the Company or any of its Subsidiaries as currently conducted, is,
to the Company's Knowledge, subsisting (except with respect to applications),
and has not expired or been cancelled, or abandoned.
(d) There is no pending or, to the Company's Knowledge,
threatened, and at no time within the three years prior to the date of this
Agreement has there been pending any, material suit, arbitration or other
adversarial proceeding before any court, government agency or arbitral tribunal
or in any jurisdiction alleging that any activities or conduct of the Company's
or any of its Subsidiaries' business infringes or will infringe upon, violate or
constitute the unauthorized use of the Intellectual Property of any third party
or challenging the ownership, validity, enforceability or registerability of any
Intellectual Property owned by the Company or any of its Subsidiaries. Neither
the Company nor any of its Subsidiaries is a party to any settlements, covenants
not to sue, consents, decrees, stipulations, judgments, or orders resulting from
suits, actions or similar legal proceedings which (i) restrict the Company's or
any of its Subsidiaries' rights to use any Intellectual Property owned by and
material to the business of the Company or any of its Subsidiaries as currently
conducted, (ii) restrict the conduct of the business of the Company or any of
its Subsidiaries as currently conducted in order to accommodate any third
party's Intellectual Property rights, or (iii) permit third parties to use any
Intellectual Property owned by and used in the business of the Company or any of
its Subsidiaries as currently conducted.
(e) To the Company's Knowledge, the conduct of the business of
the Company and its Subsidiaries as currently conducted does not infringe upon,
violate or constitute the unauthorized use of any Intellectual Property rights
owned by any third party. The Company and its Subsidiaries have taken reasonable
measures to protect the proprietary nature of the Intellectual Property owned by
the Company or such Subsidiary that is material to the business of the Company
and its Subsidiaries as currently conducted. To the
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Company's Knowledge, no third party is misappropriating, infringing, diluting or
violating any Intellectual Property owned by the Company or any of its
Subsidiaries that is material to the business of the Company and its
Subsidiaries as currently conducted, and no Intellectual Property
misappropriation, infringement dilution or violation suits, arbitrations or
other adversarial proceedings have been brought before any court, government
agency or arbitral tribunal against any third party by the Company or any of its
Subsidiaries which remain unresolved.
(f) Neither the Company nor any of its Subsidiaries has (i)
delivered (or granted a conditional release of) any of its source code contained
in any material proprietary product currently being marketed, sold, licensed or
developed by the Company or any of its Subsidiaries (each such product, a
"Company Proprietary Product"), or (ii) made its source code contained in any
Company Proprietary Product subject to any open source license or any of its
Subsidiaries is obligated to make the source code for such Proprietary Product
generally available.
(g) The Company does not have any obligation to pay any third
party any royalties or other fees in excess of $1 million in the aggregate in
calendar year 2004 or any annual period thereafter for the use of Intellectual
Property and no obligation to pay such royalties or other fees in excess of $1
million in the aggregate will result from the execution and delivery by the
Company of this Agreement and the consummation of the transactions contemplated
by this Agreement.
(h) Neither the Company nor any of its Subsidiaries is in
violation of any material license, sublicense, agreement or instrument to which
the Company or any of its Subsidiaries is party or otherwise bound under which
the Company or its Subsidiaries derive rights to Intellectual Property that is
material to the Company's or its Subsidiaries' business as currently conducted,
nor will the consummation by the Company of the transactions contemplated hereby
result in any loss or impairment of ownership by the Company or any of its
Subsidiaries of, or the right of any of them to use, any Intellectual Property
that is material to the business of the Company and its Subsidiaries as
currently conducted, nor, to the Company's Knowledge, require the consent of any
Governmental Entity or third party with respect to any such Intellectual
Property. Neither the Company nor any of its Subsidiaries is a party to any
agreement under which a third party would be entitled to receive or expand a
license or any other right to any material Intellectual Property of Parent or
any of Parent's affiliates as a result of the consummation of the transactions
contemplated by this Agreement.
(i) For purposes of this Agreement, "Intellectual Property"
shall mean trademarks, service marks, trade names, and internet domain names,
together with all goodwill, registrations and applications related to the
foregoing; patents and industrial design registrations or applications
(including any continuations, divisionals, continuations-in-part, renewals,
reissues, re-examinations and applications for any of the foregoing); rights in
works of authorship protected by copyright for E.U. design registrations;
copyrights (including any registrations and applications for any of the
foregoing); rights in mask works rights and trade secrets and other confidential
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information, know-how, proprietary processes, formulae, algorithms, models, and
methodologies.
Section 3.19 FDA Compliance.
(a) All products currently being manufactured, tested,
developed, processed, labeled, stored or distributed by or on behalf of the
Company or any of its Subsidiaries, which are subject to the jurisdiction of the
U.S. Food and Drug Administration (the "FDA"), are being manufactured, tested,
developed, processed, labeled, stored, distributed, and marketed in compliance
with all applicable Laws, guidances or orders administered or issued by the FDA
or any other Governmental Entity, including without limitation, the FDA's
current Good Manufacturing Practice regulations, except where any failure to so
comply would not, individually or in the aggregate, have a Company Material
Adverse Effect. All applicable operations of the Company and each of its
Subsidiaries have achieved and maintained ISO 13485 Quality System
certification, and there is no pending or, to the Company's Knowledge
threatened, audit, repeal, failure to renew or challenge to any such
certifications. All products being manufactured by the Company or any of its
Subsidiaries are in compliance with applicable registration, licensing and
notification requirements required by applicable Law for each site at which a
product of the Company or any of its Subsidiaries is manufactured except where
any failure to so comply would not reasonably be expected to have, individually
or in the aggregate, a Company Material Adverse Effect. All pre-clinical and
clinical trials being conducted by or on behalf of the Company or any of its
Subsidiaries are being conducted in compliance with all applicable Laws and
guidances of the FDA or any other Governmental Entity, including without
limitation, the FDA's current Good Clinical Practice regulations and federal and
state Laws, regulations and guidances restricting the use and disclosure of
individually identifiable health information except where any failure to so
comply would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect. Neither the Company nor any of its
Subsidiaries is the subject, officially or otherwise, of any pending or
threatened investigation by the FDA pursuant to its "Fraud, Untrue Statements of
Material Facts, Bribery, and Illegal Gratuities" Final Policy set forth in 56
Fed. Reg. 46191 (September 10, 1991) and any amendments thereto. Neither the
Company nor any of its Subsidiaries has committed any act, made any statement,
or failed to make any statement that would provide a basis for the FDA to invoke
its policy with respect to "Fraud, Untrue Statements of Material Facts, Bribery
and Illegal Gratuities" and any amendments thereto. To the Company's Knowledge,
each product distributed, sold or leased, or service rendered, by the Company or
any of its Subsidiaries complies in all material respects with all applicable
product safety standards of each applicable product safety agency, commission,
board or other Governmental Entity.
(b) The Company and each of its Subsidiaries is in compliance
with all applicable FDA import and export requirements, including, but not
limited to, import-for-export requirements, export notifications or
authorizations and record keeping requirements
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except as would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect.
Section 3.20 Brokers.
No broker, finder or investment banker (other than Goldman, Sachs &
Co., whose brokerage, finder's or other fees will be paid by the Company) is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Company or any of its Subsidiaries. The Company has
furnished to Parent a complete and correct copy of all agreements between the
Company and Goldman, Sachs & Co. pursuant to which such firm would be entitled
to any such payment.
Section 3.21 Anti-Takeover Statute
Not Applicable. Except for Section 203 of the DGCL (which has been
rendered inapplicable), no "business combination," "fair price," "moratorium,"
"control share acquisition" or other similar anti-takeover statute or regulation
under the Laws of the State of Delaware or the State of California or other
applicable Law (each, a "Takeover Statute") is applicable to the Merger or any
of the other transactions contemplated by this Agreement.
Section 3.22 Insurance.
All fire and casualty, general liability, business interruption,
product liability, sprinkler and water damage insurance policies and other forms
of insurance maintained by the Company or any of its Subsidiaries have been made
available to Parent. Each such policy is in full force and effect and all
premiums due thereon have been paid in full. None of such policies shall
terminate or lapse (or be otherwise adversely affect) by reason of the execution
and delivery of this Agreement or the consummation of the transactions
contemplated by this Agreement.
Section 3.23 Rights Agreement.
The Company has taken all action necessary to ensure that so long as
this Agreement shall not have been terminated pursuant to Article VIII, (i)
neither Parent nor Merger Sub shall, by virtue of the execution and delivery of
this Agreement or the consummation of the transactions contemplated hereby, be
deemed an "Acquiring Person" (as that term is defined in the Company Rights
Agreement), (ii) no Rights are issued or required to be issued to the
stockholders of the Company by virtue of the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby and (iii)
neither the execution and delivery of this Agreement nor the consummation of the
Merger and the other transactions contemplated in this Agreement will trigger
any other provisions of the Company Rights Agreement, including giving rise to a
"Distribution Date" or a "Stock
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Acquisition Date" (each as defined in the Company Rights Agreement). As of the
date hereof, the Company has not amended the Company Rights Agreement, redeemed
the Rights thereunder or taken any other action to make the Company Rights
Agreement or the Rights thereunder inapplicable, in each case, with respect to
(a) any person or entity other than Parent or Merger Sub or (b) any Acquisition
Proposal (as defined in Section 6.2(a)).
Section 3.24 Interested Party Transactions.
Since December 31, 2003, no event has occurred that would be
required to be reported as a Certain Relationship or Related Transaction
pursuant to Statement of Financial Accounting Standards No. 57.
Section 3.25 Opinion of Financial Advisor of the Company.
The financial advisor of the Company, Goldman, Sachs & Co., has
delivered to the Company its opinion, dated the date of this Agreement, that as
of such date, the Merger Consideration is fair, from a financial point of view,
to the stockholders of the Company. The Company has provided a true, complete
and correct copy of such opinion to Parent. As of the date hereof, such opinion
has not been withdrawn, revoked or modified.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF PARENT AND MERGER SUB
Except as set forth in the written disclosure schedule prepared by Parent
which is dated as of the date of this Agreement and has been delivered by Parent
to the Company in connection herewith (the "Parent Disclosure Schedule"), Parent
and Merger Sub represent and warrant to the Company as follows:
Section 4.1 Organization and Qualification; Merger Sub.
Parent and each of its Subsidiaries (including Merger Sub) is an
entity duly organized, validly existing and in good standing under the Laws of
the jurisdiction of its organization and has the requisite corporate or other
power and authority necessary to own, lease and operate the properties it
purports to own, lease or operate and to carry on its business as it is now
being conducted. Parent and each of its Subsidiaries (including Merger Sub) is
duly qualified or licensed as a foreign corporation to do business, and is in
good standing, in each jurisdiction where the character or location of the
properties owned, leased or operated by it or the nature of its activities makes
such qualification or licensing necessary, except for such failures to be so
duly qualified or licensed and in good standing that would not reasonably be
expected to have, individually or in the aggregate, a Parent Material Adverse
Effect. Parent owns all of the outstanding shares of capital stock of Merger
Sub. Except for obligations or liabilities incurred in connection with its
incorporation or organization and the transactions contemplated by this
Agreement and
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except for this Agreement and any other agreements or arrangements contemplated
by this Agreement, Merger Sub has not and will not have incurred, directly or
indirectly, any obligations or liabilities or engaged in any business activities
of any type or kind whatsoever or entered into any agreements or arrangements
with any person. Merger Sub does not directly or indirectly own any equity or
similar interest in, or any interest convertible into or exchangeable or
exercisable for any equity or similar interest in, any corporation, partnership,
limited liability company, joint venture or other business association or
entity, excluding securities in any publicly traded company held for investment
by Parent and comprising less than one percent of the outstanding stock of such
company.
Section 4.2 Certificate of Incorporation and Bylaws.
Parent has heretofore made available to the Company a true, complete
and correct copy of its Amended and Restated Certificate of Incorporation, as
amended to date (the "Parent Charter"), and Amended and Restated Bylaws, as
amended to date (the "Parent Bylaws"), and has furnished to the Company true,
complete and correct copies of the Certificate of Incorporation (the "Merger Sub
Charter Documents"). The Parent Charter, Merger Sub Charter Documents and the
charter documents for each of Parent's Subsidiaries (the "Parent Sub Documents")
are in full force and effect. Parent is not in violation of any of the
provisions of the Parent Charter or Parent Bylaws and Merger Sub is not in
violation of any of the provisions of the Merger Sub Charter Documents, and none
of Parent's other Subsidiaries is in violation of its respective Parent Sub
Documents.
Section 4.3 Capitalization.
(a) The authorized capital stock of Parent consists of
120,000,000 shares of Parent Common Stock and 5,000,000 shares of preferred
stock, par value $0.01 per share ("Parent Preferred Stock"). As of November 5,
2004, (i) 36,754,675 shares of Parent Common Stock are issued and outstanding
(ii) no shares of Parent Preferred Stock are issued and outstanding (iii)
8,700,000 shares of Parent Common Stock are reserved for issuance pursuant to
Parent's 2002 Incentive Compensation Plan (the "Parent Stock Plan"); (iv)
2,900,000 shares of Parent Common Stock are reserved for issuance pursuant to
Parent's Employee Stock Purchase Plan and Parent's International Stock Purchase
Plan; (v) 400,000 shares of Parent Common Stock are reserved for issuance
pursuant to Parent's 401(k) Plan; (vi) 150,000 shares of Parent Common Stock are
reserved for issuance pursuant to Parent's Irish Savings Related Share Option
Scheme; (vii) 150,000 shares of Parent Common Stock are reserved for issuance
pursuant to Parent's AMO (Ireland) Share Participation Scheme; (viii) 6,966,575
shares of Parent Common Stock are reserved for issuance upon conversion of
Parent's 2.5 % Convertible Senior Subordinated Notes due 2024; (ix) 6,816,796
shares of Parent Common Stock are reserved for issuance upon conversion of
Parent's 3.5 % Convertible Senior Subordinated Notes due 2023 (the "3.5%
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Notes"); (x) 7,947,482 shares of Parent Common Stock are reserved for issuance
in private exchanges for Parent's 3.5% Notes; and (xi) 1,379 shares of Parent
Common Stock are issued and held in the treasury of Parent. Between November 5,
2004 and the date of this Agreement, Parent has not issued any securities
(including derivative securities) except for shares of Parent Common Stock
issued upon exercise of stock options outstanding..
(b) Except as described in Section 4.3(a) no capital stock of
the Parent or any of its Subsidiaries or any security convertible or
exchangeable into or exercisable for such capital stock is issued, reserved for
issuance or outstanding as of the date of this Agreement. Except as described in
Section 4.3(a), there are no options, preemptive rights, warrants, calls,
rights, commitments, agreements, arrangements or understandings of any kind to
which Parent or any of its Subsidiaries is a party, or by which Parent or any of
its Subsidiaries is bound, obligating Parent or any of its Subsidiaries to
issue, deliver or sell, or cause to be issued, delivered or sold, additional
shares of capital stock of Parent or any of its Subsidiaries or obligating
Parent or any of its Subsidiaries to grant, extend or accelerate the vesting of
or enter into any such option, warrant, call, right, commitment, agreement,
arrangement or understanding. There are no stockholder agreements, voting
trusts, proxies or other similar agreements, arrangements or understandings to
which Parent or any of its Subsidiaries is a party, or by which it or they are
bound, obligating Parent or any of its Subsidiaries with respect to any shares
of capital stock of Parent or any of its Subsidiaries. There are no rights or
obligations, contingent or otherwise (including rights of first refusal in favor
of Parent), of Parent or any of its Subsidiaries, to repurchase, redeem or
otherwise acquire any shares of capital stock of Parent or any of its
Subsidiaries or to provide funds to or make any investment (in the form of a
loan, capital contribution or otherwise) in any such Subsidiary or any other
entity. There are no registration rights or other similar agreements,
arrangements or understandings to which Parent or any of its Subsidiaries is a
party, or by which it or they are bound, obligating Parent or any of its
Subsidiaries with respect to any shares of Parent Common Stock or shares of
capital stock of any such Subsidiary.
(c) All outstanding shares of Parent's capital stock are, all
shares of Parent Common Stock reserved for issuance as specified above will be,
and all shares of Parent Common Stock to be issued in the Merger have been or
will be (when issued in accordance with this Agreement), duly authorized,
validly issued, fully paid and nonassessable and not subject to, or issued in
violation of, any purchase option, call option, right of first refusal,
preemptive right, subscription right or any similar right under any provision of
the DGCL, the Parent Charter, the Parent Bylaws or any agreement, arrangement or
understanding to which Parent is a party or otherwise bound. The Parent Common
Stock to be issued in the Merger, when issued in accordance with this Agreement,
will be registered under the Securities Act of 1933, as amended (the "Securities
Act") and the Exchange Act and registered or exempt from registration under any
applicable state securities or "Blue Sky" Laws.
(d) The authorized capital stock of Merger Sub consists of 100
shares of Merger Sub Common Stock, all of which are issued and outstanding and
fully paid and nonassessable. All of the issued and outstanding capital stock of
Merger Sub is, and at the Effective Time will be, owned by Parent, and there are
(i) no other shares of capital stock
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or voting securities of Merger Sub, (ii) no securities of Merger Sub convertible
into or exchangeable for shares of capital stock or voting securities of Merger
Sub and (iii) no options or other rights to acquire from Merger Sub, and no
obligations of Merger Sub to issue, any capital stock, voting securities or
securities convertible into or exchangeable for capital stock or voting
securities of Merger Sub.
(e) There are no accrued and unpaid dividends with respect to
any outstanding shares of capital stock of Parent.
Section 4.4 Authority Relative to this Agreement; Stockholder
Approval.
(a) Subject only to the approval of the stockholders of Parent
as described below, Parent and Merger Sub have full corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly and
validly approved by the Board of Directors of Parent (the "Parent Board") and
the Board of Directors of Merger Sub. As of the date of this Agreement, the
Parent Board has unanimously determined that this Agreement and the transactions
contemplated hereby are advisable and in the best interests of the stockholders
of Parent and has unanimously recommended that the stockholders of Parent
approve the issuance of shares of Parent Common Stock in the Merger (the "Parent
Voting Proposal"). This Agreement has been duly and validly executed and
delivered by Parent and Merger Sub, and (assuming due authorization, execution
and delivery by the Company) this Agreement constitutes a valid and binding
obligation of Parent and Merger Sub, enforceable against Parent and Merger Sub
in accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
other similar Laws now or hereafter in effect relating to creditors' rights
generally and by general equitable principles (regardless of whether
enforceability is considered in a proceeding in equity or at Law).
(b) Except for the approval of Parent Voting Proposal by the
affirmative vote of the holders of a majority of the shares of Parent Common
Stock present and entitled to vote at a meeting (the "Parent Stockholders
Meeting"), of the stockholders of Parent to consider Parent Voting Proposal (the
"Requisite Parent Stockholder Approval"), no other corporate proceedings on the
part of Parent or Merger Sub are necessary to approve this Agreement and to
consummate the transactions contemplated hereby.
Section 4.5 No Conflict, Required Filings and Consents.
(a) The execution and delivery by Parent and Merger Sub of
this Agreement do not, the execution and delivery by Parent and Merger Sub of
any instrument
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required hereby to be executed and delivered at the Closing will not, and the
performance by Parent and Merger Sub of their respective agreements and
obligations under this Agreement by Parent and Merger Sub will not, (i) conflict
with or violate the Parent Charter, the Parent Bylaws or the Merger Sub Charter
Documents or any Parent Sub Documents, (ii) in any material respect, conflict
with or violate any Law applicable to Parent, Merger Sub or any of its
Subsidiaries by which its or any of their respective properties is bound or
affected, (iii) except as would not reasonably be expected to have a Parent
Material Adverse Effect, result in any breach of or constitute a default (or an
event that with notice or lapse of time or both would become a default) or
impair Parent's or any of its Subsidiaries' rights or alter the rights or
obligations of any third party under, or give to any third party any rights of
termination, amendment, payment, acceleration or cancellation of, or result in
the creation of a Lien on any of the properties or assets (including intangible
assets) of Parent or any of its Subsidiaries pursuant to any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which Parent or any of its Subsidiaries is a
party or by which Parent or any of its Subsidiaries or their properties is bound
or affected, or (iv) other than options under the Parent Stock Plans, give rise
to or result in any person having, or having the right to exercise, any
pre-emptive rights, rights of first refusal, rights to acquire or similar rights
with respect to any capital stock of Parent or Merger Sub or any of its
Subsidiaries or any of their respective assets or properties.
(b) The execution and delivery by Parent and Merger Sub of
this Agreement do not, the execution and delivery by Parent and Merger Sub of
any instrument required hereby to be executed and delivered at the Closing will
not, and the performance of the respective agreements of, and obligations under,
this Agreement by Parent and Merger Sub will not, require any consent, approval,
order, license, authorization, registration, declaration or permit of, or filing
with or notification to, any Governmental Entity, except (i) as may be required
by the HSR Act, (ii) as may be required under any foreign antitrust or
competition Law or regulation, (iii) the filing of the Registration Statement on
Form S-4 (the "Registration Statement") with the SEC in accordance with the
Securities Act, and the filing of the Joint Proxy Statement/Prospectus (as
defined in Section 6.4) with the SEC under the Exchange Act, (iv) such
clearances, consents, approvals, orders, licenses, authorizations,
registrations, declarations, permits, filings and notifications as may be
required under applicable U.S. federal and state or foreign securities Laws, (v)
the filing of the Certificate of Merger or other documents as required by the
DGCL and (vi) such other consents, approvals, orders, registrations,
declarations, permits, filings or notifications which, if not obtained or made,
would not reasonably be expected to have a Parent Material Adverse Effect.
Section 4.6 Compliance; Permits.
(a) Parent and each of its Subsidiaries are and have been in
material compliance with and are not in material default or violation of (and
has not received any notice of material non-compliance, default or violation
with respect to) any Law applicable to them or by which any of their respective
properties are bound or affected (including,
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without limitation, federal or state criminal or civil health care Laws and the
regulations promulgated pursuant to such Laws and Laws relating to unlawful
practice of medicine or other professionally licensed activities).
(b) Parent and each of its Subsidiaries hold all permits,
licenses, easements, variances, exemptions, consents, certificates,
authorizations, registrations, orders and other approvals from Governmental
Entities that are material to the operation of their respective business as
currently conducted (collectively, the "Parent Permits"). The Parent Permits are
in full force and effect, have not been violated in any material respect and no
suspension, revocation or cancellation thereof has been threatened, and there is
no action, proceeding or investigation pending or, to Parent's Knowledge,
threatened, seeking the suspension, revocation or cancellation of any Parent
Permits. No Parent Permit shall cease to be effective as a result of the
consummation of the transactions contemplated by this Agreement, other than as
would not reasonably be expected to have a Parent Material Adverse Effect.
Section 4.7 SEC Filings; Financial Statements.
(a) Parent has filed all forms, reports, schedules, statements
and other documents, including any exhibits thereto, required to be filed by
Parent since its inception with the SEC (collectively, the "Parent SEC
Reports"). The Parent SEC Reports, including all forms, reports and documents
filed by Parent with the SEC after the date hereof and prior to the Effective
Time, (i) were and, in the case of Parent SEC Reports filed after the date
hereof, will be, prepared in all material respects in accordance with the
applicable requirements of the Securities Act and the Exchange Act, as the case
may be, and the rules and regulations thereunder and (ii) did not at the time
they were filed (or if amended or superseded by a filing prior to the date of
this Agreement, then on the date of such filing) and, in the case of such forms,
reports and documents filed by Parent with the SEC after the date of this
Agreement, will not as of the time they are filed, contain any untrue statement
of a material fact or omit to state a material fact required to be stated in
such Parent SEC Reports or necessary in order to make the statements in such
Parent SEC Reports, in light of the circumstances under which they were made,
not misleading. None of the Subsidiaries of Parent is required to file any
forms, report, schedules or other documents with the SEC.
(b) Each of the consolidated financial statements (including,
in each case, any related notes and schedules) contained in the Parent SEC
Reports, including any Parent SEC Reports filed between the date of this
Agreement and the Closing, complied or will comply, as of its respective date,
in all material respects with all applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, was or will be
prepared in accordance with GAAP (except as may be indicated in the notes
thereto) applied on a consistent basis throughout the periods involved and
fairly presented in all material respects or will fairly present in all material
respects the consolidated financial position of Parent and its consolidated
Subsidiaries as of the respective dates thereof and the
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consolidated results of the operations and cash flows of Parent and its
consolidated Subsidiaries for the periods indicated, except as otherwise
explained therein and except that any unaudited interim financial statements are
subject to normal and recurring year-end adjustments which have not been made
and are not expected to be material in amount, individually or in the aggregate.
The audited balance sheet of Parent contained in the Parent SEC Report on Form
10-K for the fiscal year ended December 31, 2003 is referred to herein as the
"Parent Balance Sheet."
(c) The chief executive officer and chief financial officer of
Parent have made all certifications required by, and would be able to make such
certifications as of the date hereof and as of the Closing Date as if required
to be made as of such dates pursuant to, Sections 302 and 906 of the
Sarbanes-Oxley Act and any related rules and regulations promulgated by the SEC
and the statements contained in any such certifications are complete and
correct, and Parent is otherwise in compliance with all applicable effective
provisions of the Sarbanes-Oxley Act and the applicable listing standards and
corporate governance rules of the NYSE.
Section 4.8 Disclosure Controls and Procedures.
Since December 31, 2003, Parent and each of its Subsidiaries has had
in place "disclosure controls and procedures" (as defined in Rules 13a-15(e) and
15d-15(e) promulgated under the Exchange Act) reasonably designed and maintained
to ensure that all information (both financial and non-financial) required to be
disclosed by Parent in the reports that it files or submits to the SEC under the
Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the rules and forms of the SEC and that such information is
accumulated and communicated to Parent's management as appropriate to allow
timely decisions regarding required disclosure and to make the certifications of
the chief executive officer and chief financial officer of Parent required under
the Exchange Act with respect to such reports. Parent maintains internal
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets, (iii) access to
assets is permitted only in accordance with management's general or specific
authorization, and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
Section 4.9 Absence of Certain Changes or Events.
From the date of the Parent Balance Sheet and except as disclosed in
the Parent SEC Reports through the date hereof, Parent has conducted its
business in the ordinary course of business consistent with past practice and,
since such date and through the date hereof, there has not occurred: (i) any
Parent Material Adverse Effect; (ii) any amendments to or changes in the Parent
Charter or Parent Bylaws; (iii) any material damage to, destruction or loss of
any asset of Parent or any of its Subsidiaries (whether or not covered by
insurance); (iv) any change by Parent in its accounting methods, principles or
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practices; (v) any revaluation by Parent of any of its assets, including writing
down the value of inventory or writing off notes or accounts receivable other
than in the ordinary course of business consistent with past practice; (vi) any
sale of a material amount of assets (tangible or intangible) of Parent or any of
its Subsidiaries; or (vii) any recalls, field notifications, field corrections
or safety alerts with respect to products manufactured by or on behalf of Parent
or any of its Subsidiaries or (viii) any other action or event that would have
required the consent of the Company pursuant to Section 5.2 had such action or
event occurred after the date of this Agreement.
Section 4.10 No Undisclosed Liabilities.
(a) Except as reflected in the Parent Balance Sheet, neither
Parent nor any of its Subsidiaries has any liabilities (absolute, accrued,
contingent or otherwise) which are required by GAAP to be set forth on a
consolidated balance sheet of Parent and its consolidated Subsidiaries or in the
notes thereto, other than (i) any liabilities and obligations incurred since the
date of the Parent Balance Sheet in the ordinary course of business consistent
with past practice, (ii) any liabilities or obligations incurred in connection
with the transactions contemplated by this Agreement and (iii) liabilities that,
individually or in the aggregate, have not had, and would not reasonably be
expected to have, a Parent Material Adverse Effect.
(b) Neither Parent nor any of its Subsidiaries is a party to,
or has any commitment to become a party to, any joint venture, partnership
agreement or any similar contract (including any contract relating to any
transaction, arrangement or relationship between or among Parent or any of its
Subsidiaries, on the one hand, and any unconsolidated affiliate, including any
structured finance, special purpose or limited purpose entity or person, on the
other hand) where the purpose or intended effect of such arrangement is to avoid
disclosure of any material transaction involving Parent or any of its
Subsidiaries in the Parent's consolidated financial statements.
Section 4.11 Absence of Litigation; Investigations.
Except as disclosed in the Parent SEC Reports prior to the date of
this Agreement, there are no claims, actions, suits, proceedings, governmental
investigations, inquiries or subpoenas (other than challenging or otherwise
arising from or relating to the Merger or any of the other transactions
contemplated by this Agreement), (a) pending against Parent or any of its
Subsidiaries, or any of their respective properties or assets, (b) to Parent's
Knowledge, threatened against Parent or any of its Subsidiaries, or any of their
respective properties or assets or (c) whether filed or threatened, that have
been settled or compromised by Parent or any of its Subsidiaries since June 29,
2002 and at the time of such settlement or compromise were material, which
claims, actions, suits, proceedings investigations, inquiries or subpoenas
referred to in clause (a) would reasonably be expected to have a Parent Material
Adverse Effect. Neither Parent nor any Subsidiaries of Parent is subject to any
outstanding order, writ, injunction or decree that would reasonably be
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expected to be material or would reasonably be expected to prevent or delay the
consummation of the transactions contemplated by this Agreement. There has not
been nor are there currently any internal investigations or inquiries being
conducted by Parent, the Parent Board (or any committee thereof) or any third
party at the request of any of the foregoing concerning any financial,
accounting, tax, conflict of interest, self-dealing, fraudulent or deceptive
conduct or other misfeasance or malfeasance issues.
Section 4.12 Agreements, Contracts and Commitments
(a) All of the Parent Material Contracts (as defined below)
that are required to be described in the Parent SEC Reports (or to be filed as
exhibits thereto) are so described or filed and are in full force and effect.
"Parent Material Contracts" shall mean any note, bond, mortgage, indenture,
guarantee, other evidence of indebtedness, lease, license, contract, agreement
or other instrument or obligation to which Parent or any of its Subsidiaries is
a party or by which any of them or any of their Assets are bound, and which
either (i) has a remaining term of more than one year from the date hereof and
(A) cannot be unilaterally terminated by Parent at any time, without material
penalty, within thirty (30) days of providing notice of termination, and (B)
involves the payment or receipt of money in excess of $7.5 million in any year,
(ii) involves the payment or receipt of money in excess of $10 million in any
year, or (iii) contains covenants limiting the freedom of Parent or any of its
Subsidiaries to sell any products or services of or to any other person, engage
in any line of business or compete with any person or operate at any location;
provided, however, that a Real Property Lease shall not be considered a Parent
Material Contract.
(b) As of the date of this Agreement, (i) there is no breach
or violation of or default by Parent or any of its Subsidiaries under any of the
Parent Material Contracts, except such breaches, violations and defaults as have
been waived, and (ii) no event has occurred with respect to Parent or any of its
Subsidiaries which, with notice or lapse of time or both, would constitute a
breach, violation or default, or give rise to a right of termination,
modification, cancellation, foreclosure, imposition of a Lien, prepayment or
acceleration under any of the Parent Material Contracts, which breach, violation
or default referred to in clauses (i) or (ii), would reasonably be expected to
have, individually or in the aggregate, a Parent Material Adverse Effect.
Section 4.13 Employee Benefit Plans, Options and Employment
Agreements.
(a) Section 4.13(a) of the Parent Disclosure Schedule sets
forth a complete and accurate list of all Employee Benefit Plans maintained, or
contributed to by Parent, any of its Subsidiaries or any of their respective
ERISA Affiliates or to which Parent, any of its Subsidiaries or any of their
respective ERISA Affiliates is obligated to contribute, or under which any of
them has or may have any liability for premiums or benefits for the
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benefit of employees located in the United States (collectively, the "Parent
Employee Plans").
(b) With respect to each Parent Employee Plan, Parent has made
available to the Company complete and accurate copies of (i) such Parent
Employee Plan (or a written summary of any unwritten plan) together with all
amendments, (ii) in the case of any plan for which Forms 5500 are required to be
filed, the most recent annual report (Form 5500) with schedules attached, (iii)
in the case of any plan that is intended to be qualified under Section 401(a) of
the Code, the most recent determination letter from the Internal Revenue
Service, (iv) each trust agreement, group annuity contract, administration and
similar material agreements, investment management or investment advisory
agreements, (v) the most recent summary plan descriptions and employee handbook,
or other similar material employee communications relating to employee benefits
matters, (vi) all personnel, payroll and employment manuals and policies, and
(vii) the most recent financial statements for each Parent Employee Plan that is
funded.
(c) Each Parent Employee Plan has been administered in all
material respects in accordance with ERISA, the Code and all other applicable
Laws and the regulations thereunder and materially in accordance with its terms
and each of Parent, its Subsidiaries and their respective ERISA Affiliates have
in all material respects met their obligations with respect to each Parent
Employee Plan and have timely made (or timely will make) all required
contributions thereto. All filings and reports as to each Parent Employee Plan
required to have been submitted to the Internal Revenue Service or to the United
States Department of Labor have been timely submitted. With respect to the
Parent Employee Plans, no event has occurred, and, to Parent's Knowledge, there
exists no condition or set of circumstances in connection with which Parent, its
Subsidiaries or any plan participant could be subject to any material liability
(including penalties or taxes) under ERISA, the Code or any other applicable
Law, nor will the negotiation or consummation of the transactions contemplated
by this Agreement give rise to any such material liability.
(d) With respect to the Parent Employee Plans, there are no
material benefit obligations for which contributions have not been made or
properly accrued and there are no benefit obligations which have not been
accounted for by reserves, or otherwise properly footnoted in accordance with
the requirements of GAAP, on the financial statements of Parent. The assets of
each Parent Employee Plan which is funded are reported at their fair market
value on the books and records of such Parent Employee Plan.
(e) No Parent Employee Plan has assets that include securities
issued by Parent, any of its Subsidiaries or any of their respective ERISA
Affiliates.
(f) All the Parent Employee Plans that are Qualified Plans
have received determination, opinion or advisory letters from the Internal
Revenue Service to the effect that such Parent Employee Plans are qualified and
the plans and trusts related thereto are exempt from federal income taxes under
Sections 401(a) and 501(a), respectively, of the Code, or Parent has remaining a
period of time under applicable U.S. Department of the Treasury regulations or
Internal Revenue Service pronouncements in which to apply for such
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a letter and to make any amendments necessary to obtain a favorable
determination as to the qualified status of each such Qualified Plan. To
Parent's Knowledge, no such determination, opinion or advisory letter has been
revoked and revocation has not been threatened, and no such Parent Employee Plan
has been amended or operated since the date of its most recent determination
letter or application therefor in any respect, and no act or omission has
occurred, that would reasonably be expected to adversely affect its
qualification or materially increase its cost. There has been no termination,
partial termination or discontinuance of contributions to any Qualified Plan
that will result in material liability to Parent. Each Parent Employee Plan
which is required to satisfy Section 401(k)(3) or Section 401(m)(2) of the Code
has been tested for compliance with, and satisfies in all material respects the
requirements of Section 401(k)(3) and Section 401(m)(2) of the Code, as the case
may be, for each plan year ending prior to the Closing Date for which testing is
required to be completed.
(g) Neither Parent, any of its Subsidiaries nor any of their
respective ERISA Affiliates has (i) ever maintained a Parent Employee Plan which
was ever subject to Section 412 of the Code or Title IV of ERISA or (ii) ever
been obligated to contribute to a "multiemployer plan" (as defined in Section
4001(a)(3) of ERISA) that is subject to ERISA. No Parent Employee Plan is funded
by, associated with or related to a "voluntary employees' beneficiary
association" within the meaning of Section 501(c)(9) of the Code.
(h) To the extent permitted by applicable Law, each Parent
Employee Plan (other than the Parent Stock Plans or an employment, severance,
change in control or similar agreement with an individual) is amendable and
terminable unilaterally by Parent or one or more of its Subsidiaries party
thereto or covered thereby at any time without material liability to Parent or
any of its Subsidiaries as a result thereof, other than for benefits accrued as
of the date of such amendment or termination and routine administrative costs.
(i) Other than as required under Section 601 et seq. of ERISA,
none of the Parent Employee Plans promises or provides health or other welfare
benefits (excluding normal claims for benefits under the Parent's group life
insurance, accidental death and dismemberment insurance and disability plans and
policies) or coverage to any person following retirement or other termination of
employment.
(j) There is no action, suit, proceeding, claim, arbitration,
audit or investigation pending or, to Parent's Knowledge, threatened, with
respect to any Parent Employee Plan, other than claims for benefits in the
ordinary course. No Parent Employee Plan is or within the last two calendar
years has been the subject of, or has received notice that it is the subject of,
examination by a government agency or a participant in a government sponsored
amnesty, voluntary compliance or similar program.
(k) To Parent's Knowledge, each individual who has received
compensation for the performance of services on behalf of Parent, any of its
Subsidiaries or their respective ERISA Affiliates has been properly classified
as an employee or independent contractor in accordance with applicable Law.
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(l) Except as would not reasonably be expected to have,
individually or in the aggregate, a Parent Material Adverse Effect, with respect
to each Employee Benefit Plan maintained by Parent, any of its Subsidiaries or
any of their ERISA Affiliates that covers employees outside the United States,
and the books and records thereof, (i) such plan is in compliance with all
applicable Laws of each applicable jurisdiction; (ii) there is no action, suit,
proceeding, claim, arbitration, audit or investigation pending or, to Parent's
Knowledge, threatened, with respect to such plan, other than claims for benefits
in the ordinary course; (iii) all liabilities with respect to such plan are set
forth on a consolidated balance sheet of Parent and its Subsidiaries or in the
notes thereto in accordance with GAAP; and (iv) no such plan is or within the
last two calendar years has been the subject of, or has received notice that it
is the subject of, an examination by a government agency or a participant in a
government sponsored amnesty, voluntary compliance or similar program that has
given rise to or is reasonably expected to give rise to any liability.
(m) True, complete and correct copies of each of the following
agreements to which any employee of Parent is a party have been made available
to the Company: (i) all employment agreements with employees of Parent; (ii) all
employees or former employees of Parent who have executed a non-competition
agreement with Parent; (iii) all severance agreements, programs and policies of
Parent or any of its Subsidiaries with or relating to its employees, excluding
programs and policies required to be maintained by Law; and (iv) all plans,
programs, agreements and other arrangements of Parent or any of its Subsidiaries
pursuant to which payments (or acceleration of benefits or vesting of options or
lapse of repurchase rights) may be required upon, or may become payable directly
or indirectly as a result of or in connection with, the negotiation or
consummation of the transactions contemplated by, or the execution of, this
Agreement.
(n) All contributions required to be made with respect to any
Parent Employee Plan on or prior to the Effective Time have been or will be
timely made or are reflected on the Parent's Balance Sheet. There are no
pending, threatened or reasonably anticipated claims by or on behalf of any
Plan, by any employee or beneficiary covered under any such Parent Employee
Plan, or otherwise involving any such Plan (other than routine claims for
benefits).
(o) The negotiation or consummation of the transactions
contemplated by this Agreement will not, either alone or in combination with
another event, (i) entitle any current or former employee or officer of Parent
or any of its Subsidiaries to severance pay, or any other payment from Parent or
any of its Subsidiaries or (ii) accelerate the time of payment or vesting, cause
a lapse of repurchase rights or increase the amount of compensation due any such
employee or officer. There is no Parent Employee Plan or other contract,
agreement, plan or arrangement that, individually or collectively, could give
rise to the payment of any amount that would not be deductible pursuant to
Sections 280G (determined without regard to Section 280G(b)(4) of the Code) or
162(m) of the Code.
Section 4.14 Labor Matters.
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(a) Parent and each of its Subsidiaries is in compliance in all
material respects with all applicable Laws respecting employment, employment
practices and occupational safety and health, terms and conditions of employment
and wages and hours, and is not engaged in any unfair labor practices; (b) to
Parent's Knowledge, there are no actions, suits, claims or grievances pending or
threatened, between Parent or any of its Subsidiaries and any of its employees,
consultants or independent contractors, which actions, suits, claims or
grievances have or would reasonably be expected to have a Parent Material
Adverse Effect; (c) neither Parent nor any of its Subsidiaries is a party to any
collective bargaining agreement or other labor union contract applicable to
persons employed by Parent in the United States, nor does Parent nor any of its
Subsidiaries know of any current activities or proceedings of any labor union to
organize any such employees; and (d) to Parent's Knowledge, there are no labor
disputes, strikes, slowdowns, work stoppages, lockouts, or threats thereof, by
or with respect to any employees of, or consultants or independent contractors
to, Parent or any of its Subsidiaries in the United States.
Section 4.15 Properties; Encumbrances.
Parent and each of its Subsidiaries has good and valid title to, or
a valid leasehold interest in, all the properties and assets which it purports
to own or lease (real, tangible, personal and mixed), including all the
properties and assets reflected in the Parent Balance Sheet (except for personal
property sold since the date of the Parent Balance Sheet in the ordinary course
of business consistent with past practice). All properties and assets reflected
in the Parent Balance Sheet are free and clear of all Liens, except for Liens
reflected on the Parent Balance Sheet and Liens for current taxes not yet due
and other Liens that do not materially detract from the value or impair the use
of the property or assets subject thereto. All material real property leases,
licenses or other occupancy agreements to which Parent or any of its
Subsidiaries is a party (collectively, the "Parent Real Property Leases") are
either filed as exhibits to the Parent SEC Reports or complete copies thereof
have been delivered to or made available to the Company. As of the date of this
Agreement, (i) all Parent Real Property Leases are in full force and effect
(except as such enforceability may be subject to laws of general application
relating to bankruptcy, insolvency and the relief of debtors and rules of law
governing specific performance, injunctive relief or other equitable remedies);
(ii) there is no existing material breach or violation of or default by Parent
under any of the Parent Real Property Leases; (iii) no event has occurred with
respect to Parent which, with notice or lapse of time or both, would constitute
a material breach, violation or default of any of the Parent Real Property
Leases; and (iv) to Parent's Knowledge, there are no material breaches, defaults
or violations of any obligations of the landlord under any Parent Real Property
Lease.
Section 4.16 Taxes.
(a) Parent and each of its Subsidiaries have filed with the
appropriate taxing authorities all material Tax Returns required to be filed by
them and all such Tax Returns were true, complete and correct in all material
respects. All Taxes
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required to be paid by Parent and each of its Subsidiaries have been timely
paid. There are no Tax Liens on any assets of Parent or any of its Subsidiaries
other than Liens relating to Taxes not yet due and payable. Neither Parent nor
any of its Subsidiaries has granted any outstanding waiver of any statute of
limitations with respect to, or any outstanding extension of a period for the
assessment of, any Tax. The accruals and reserves for Taxes (exclusive of any
accruals for "deferred taxes" or similar items that reflect timing differences
between tax and financial accounting principles) reflected in the Parent Balance
Sheet are adequate to cover all Taxes accruable through the date thereof
(including interest and penalties, if any, thereon and Taxes being contested) in
accordance with GAAP applied on a consistent basis with the Parent Balance
Sheet. All liabilities for Taxes attributable to the period commencing on the
date following the date of the Parent Balance Sheet were incurred in the
ordinary course of business and are consistent in type and amount with Taxes
attributable to similar prior periods.
(b) Parent and each of its Subsidiaries have timely withheld
with respect to its employees all federal and state Taxes required to be
withheld. Neither parent nor any of its Subsidiaries has received any notice of
any Tax deficiency outstanding, proposed or assessed against Parent or any of
its Subsidiaries. Neither Parent nor any of its Subsidiaries has received any
written notice of any audit examination, deficiency, refund litigation, proposed
adjustment or matter in controversy with respect to any Tax Return of Parent or
any of its Subsidiaries. Neither Parent nor any of its Subsidiaries is a party
to or bound by any tax indemnity, tax sharing or tax allocation agreements with
any entity other than Parent or any Parent Subsidiary. Except for the group of
which Parent and its Subsidiaries are now currently members, neither Parent nor
any of its Subsidiaries has ever been a member of an affiliated group of
corporations within the meaning of Section 1504 of the Code. Neither Parent nor
any of its Subsidiaries is liable for the Taxes of any person under Treasury
Regulation 1.1502-6 (or any similar provision of state, local or foreign Law) as
a transferee or successor, by contract or otherwise.
(c) To the extent requested by the Company, Parent made
available to the Company complete and correct copies of all income Tax Returns,
examination reports and statements of deficiencies assessed against or agreed to
by Parent or any of its Subsidiaries with respect to all taxable years for which
the statutes of limitation have not expired.
(d) Neither Parent nor any of its Subsidiaries has constituted
either a "distributing corporation" or a "controlled corporation" (within the
meaning of Section 355(a)(1)(A) of the Code) in a distribution of stock
qualifying for tax-free treatment under Section 355 of the Code (A) in the two
years prior to the date of this Agreement or (B) in a distribution which could
otherwise constitute part of a "plan" or "series of related transactions"
(within the meaning of Section 355(e) of the Code) in connection with the
Merger.
(e) Neither Parent nor any of its Subsidiaries is a party to,
or has any commitment to become a party to, any tax shelter arrangement as
described in Internal Revenue Service final regulations (T.D. 9046.).
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(f) Parent is not aware of any basis upon which the Internal
Revenue Service could reasonably challenge the tax-free treatment of the
spin-off of Parent by Allergan, Inc.
Section 4.17 Environmental Matters.
Except as disclosed in the Parent SEC Reports, (a) Parent and its
Subsidiaries are in compliance in all material respects with federal, state,
local and foreign Laws and regulations relating to Materials of Environmental
Concern, or otherwise relating to Environmental Laws, and including, but not
limited to, compliance with any Parent Permits or other governmental
authorizations or the terms and conditions thereof; (b) neither Parent nor any
of its Subsidiaries has received any communication or notice, whether from a
governmental authority or otherwise, alleging any violation of or noncompliance
with any Environmental Laws by Parent or any of its Subsidiaries for which it is
responsible, and there is no pending or threatened claim, action, investigation
or notice by any person or entity alleging potential liability for
investigatory, cleanup or governmental response costs, or natural resources or
property damages, or personal injuries, attorney's fees or penalties relating to
Environmental Claims, except where such Environmental Claims would not have a
Parent Material Adverse Effect or otherwise require disclosure in the Parent SEC
Reports; and (c) there are no past or present facts or circumstances that could
reasonably be expected to form the basis of any Environmental Claim against
Parent or any of its Subsidiaries or against any person or entity whose
liability for any Environmental Claim Parent has retained or assumed either
contractually or by operation of Law, except where such Environmental Claim, if
made, would not have a Parent Material Adverse Effect or otherwise require
disclosure in the Parent SEC Reports. Parent has provided to the Company all
third party, non-privileged assessments, reports, data, results of
investigations or audits in the possession of Parent regarding environmental
matters pertaining to the environmental condition of the business of Parent and
its Subsidiaries, or the compliance (or noncompliance) by Parent or its
Subsidiaries with any Environmental Laws.
Section 4.18 Intellectual Property.
(a) All of the Parent Registered Intellectual Property is
owned solely by Parent or one of its Subsidiaries. "Parent Registered
Intellectual Property" means all Registered Intellectual Property owned by the
Company or any of its Subsidiaries.
(b) Parent or one or more of its Subsidiaries owns, or has a
valid right to use all of the material Intellectual Property that is used in the
business of Parent and its Subsidiaries as currently conducted.
(c) The material Intellectual Property that is used in the
business of Parent or any of its Subsidiaries as currently conducted, is to
Parent's Knowledge subsisting (except with respect to applications), and has not
expired or been cancelled, or abandoned.
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(d) There is no pending or, to Parent's Knowledge, threatened,
and at no time since June 29, 2002 through to the date of this Agreement has
there been pending any, material suit, arbitration or other adversarial
proceeding before any court, government agency or arbitral tribunal or in any
jurisdiction alleging that any activities or conduct of Parent's or any of its
Subsidiaries' business infringes or will infringe upon, violate or constitute
the unauthorized use of the Intellectual Property of any third party or
challenging the ownership, validity, enforceability or registerability of any
Intellectual Property owned by Parent or any of its Subsidiaries. Neither Parent
nor any of its Subsidiaries is a party to any settlements, covenants not to sue,
consents, decrees, stipulations, judgments, or orders resulting from suits,
actions or similar legal proceedings which (i) materially restrict Parent's or
any of its Subsidiaries' rights to use any Intellectual Property owned by and
material to the business of Parent or any of its Subsidiaries as currently
conducted, (ii) materially restrict the conduct of the business of Parent or any
of its Subsidiaries as currently conducted in order to accommodate any third
party's Intellectual Property rights, or (iii) permit third parties to use any
Intellectual Property owned by and material to the business of Parent or any of
its Subsidiaries as currently conducted.
(e) To Parent's Knowledge, the conduct of the business of
Parent and its Subsidiaries as currently conducted does not infringe upon,
violate or constitute the unauthorized use of any Intellectual Property rights
owned by any third party. Parent and its Subsidiaries have taken reasonable
measures to protect the proprietary nature of the Intellectual Property owned by
Parent and such Subsidiary that is material to the business of Parent and its
Subsidiaries as currently conducted. To Parent's Knowledge, no third party is
misappropriating, infringing, diluting or violating any Intellectual Property
owned by Parent or any of its Subsidiaries that is material to the business of
Parent and its Subsidiaries as currently conducted, and no material Intellectual
Property misappropriation, infringement dilution or violation suits,
arbitrations or other adversarial proceedings have been brought before any
court, government agency or arbitral tribunal against any third party by Parent
or any of its Subsidiaries which remain unresolved.
(f) Neither the Parent nor any of its Subsidiaries has
delivered (or granted a conditional release of) any of its source code contained
in any material proprietary product currently being marketed, sold, licensed or
developed by Parent or any of its Subsidiaries (each such product, a "Parent
Proprietary Product").
(g) Neither the Parent nor any of its Subsidiaries is in
violation of any material license, sublicense, agreement or instrument to which
the Parent or any of its Subsidiaries is party or otherwise bound under which
the Parent or its Subsidiaries derive rights to Intellectual Property that is
material to the Parent's or its Subsidiaries' business as currently conducted.
Section 4.19 FDA Compliance.
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(a) All products currently being manufactured, tested,
developed, processed, labeled, stored or distributed by or on behalf of Parent
or any of its Subsidiaries, which are subject to the jurisdiction of the FDA,
are being manufactured, tested, developed, processed, labeled, stored,
distributed, and marketed in compliance with all applicable Laws, guidances or
orders administered or issued by the FDA or any other Governmental Entity,
including without limitation, the FDA's current Good Manufacturing Practice
regulations, except where any failure to so comply would not reasonably be
expected to have, individually or in the aggregate, a Parent Material Adverse
Effect. All applicable operations of Parent and each of its Subsidiaries have
achieved and maintained ISO 13485 Quality System certification, and there is no
pending or, to Parent's Knowledge threatened, audit, repeal, failure to renew or
challenge to any such certifications. All products being manufactured by Parent
or any of its Subsidiaries are in compliance with applicable registration,
licensing and notification requirements required by applicable Law for each site
at which a product of Parent or any of its Subsidiaries is manufactured except
where any failure to so comply would not reasonably be expected to have,
individually or in the aggregate, a Parent Material Adverse Effect. All
pre-clinical and clinical trials being conducted by or on behalf of Parent or
any of its Subsidiaries are being conducted in compliance with all applicable
Laws and guidances of the FDA or any other Governmental Entity, including
without limitation, the FDA's current Good Clinical Practice regulations and
federal and state Laws, regulations and guidances restricting the use and
disclosure of individually identifiable health information except where any
failure to so comply would not reasonably be expected to have, individually or
in the aggregate, a Parent Material Adverse Effect. Neither Parent nor any of
its Subsidiaries is not the subject, officially or otherwise, of any pending or
threatened investigation by the FDA pursuant to its "Fraud, Untrue Statements of
Material Facts, Bribery, and Illegal Gratuities" Final Policy set forth in 56
Fed. Reg. 46191 (September 10, 1991) and any amendments thereto. Neither Parent
nor any of its Subsidiaries has committed any act, made any statement, or failed
to make any statement that would provide a basis for the FDA to invoke its
policy with respect to "Fraud, Untrue Statements of Material Facts, Bribery and
Illegal Gratuities" and any amendments thereto. To Parent's Knowledge, each
product distributed, sold or leased, or service rendered, by Parent or any of
its Subsidiaries complies in all material respects with all applicable product
safety standards of each applicable product safety agency, commission, board or
other Governmental Entity.
(b) The Parent and each of its Subsidiaries is in compliance
with all applicable FDA import and export requirements, including, but not
limited to, import-for-export requirements, export notifications or
authorizations and record keeping requirements except as would not reasonably be
expected to have, individually or in the aggregate, a Parent Material Adverse
Effect.
Section 4.20 Brokers.
No broker, finder or investment banker (other than Morgan Stanley &
Co. Incorporated whose brokerage, finder's or other fee will be paid by Parent)
is entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of Parent or
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any of its Subsidiaries. Parent has furnished to the Company a complete and
correct copy of all agreements between Parent and Morgan Stanley & Co.
Incorporated pursuant to which such firm would be entitled to any such payment.
Section 4.21 Anti-Takeover Statute Not Applicable.
Except for Section 203 of the DGCL (which has been rendered
inapplicable), no Takeover Statute is applicable to the Merger or any of the
other transactions contemplated by this Agreement.
Section 4.22 Insurance.
All fire and casualty, general liability, business interruption,
product liability, sprinkler and water damage insurance policies and other forms
of insurance maintained by Parent have been made available to the Company. Each
such policy is in full force and effect and all premiums due thereon have been
paid in full. None of such policies shall terminate or lapse (or be otherwise
adversely affect) by reason of the execution and delivery of this Agreement or
the consummation of the transactions contemplated by this Agreement.
Section 4.23 Parent Rights Agreement.
As of the date hereof, Parent has not amended the Rights Agreement,
dated as of June 24, 2002, between Parent and Mellon Investor Services LLC, as
Rights Agent (the "Parent Rights Agreement"), redeemed the Rights thereunder or
taken any other action to make the Parent Rights Agreement or the Rights
thereunder inapplicable, in each case, with respect to (a) any person or entity
or (b) any Acquisition Proposal (as defined in Section 6.2(f)).
Section 4.24 Interested Party Transactions.
Since December 31, 2003, no event has occurred that would be
required to be reported as a Certain Relationship or Related Transaction
pursuant to Statement of Financial Accounting Standards No. 57.
Section 4.25 Opinion of Financial Advisor of Parent.
The financial advisor of Parent, Morgan Stanley & Co. Incorporated,
has delivered to Parent an opinion dated on the date of this Agreement to the
effect that as of such date, the Merger Consideration is fair, from a financial
point of view, to Parent. Parent has provided a true, complete and correct copy
of such opinion to the Company. As of the date hereof, such opinion has not been
withdrawn, revoked or modified.
Section 4.26 Financing.
A true and correct copy of the credit facility commitment letter,
dated November 8, 2004, from Morgan Stanley & Co. Incorporated to Parent has
been delivered to
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the Company. At Closing, Parent will have sufficient funds to consummate the
transactions contemplated by this Agreement and an amount of additional funds on
hand, or available pursuant to binding financing arrangements, such that after
completing such transactions Parent and its Subsidiaries will have an amount of
working capital and other liquidity reasonable for the business, taken as a
whole (after giving effect to the Merger), and Parent will have obtained all
consents and amendments to agreements related to any material amount of
indebtedness for borrowed money required to ensure that consummation of the
transactions contemplated by this Agreement does not and will not result in a
conflict, breach or event of default thereunder or shall have repaid all
obligations thereunder and terminated such agreements.
ARTICLE V
CONDUCT OF BUSINESS
Section 5.1 Conduct of Business by the Company Pending the Merger.
(a) Except as described in Section 5.1(a) of the Company
Disclosure Schedule or to the extent Parent shall otherwise consent in writing
(which consent shall not be delayed or withheld without a reason), during the
period from the date of this Agreement and continuing until the earlier of the
termination of this Agreement or the Effective Time, the Company shall (i)
conduct its business and that of its Subsidiaries, taken as a whole, only in,
and the Company shall not take any action except in, and shall cause its
Subsidiaries not to take any action except in, the ordinary course and in a
manner that consistent with past practices and in compliance in all material
respects with all applicable Laws and regulations; and (ii) use commercially
reasonable efforts to preserve intact the business organization of the Company
and its Subsidiaries, taken as a whole, to keep available the services of the
current officers, employees and consultants of the Company and its Subsidiaries,
and to preserve the present relationships of the Company and its Subsidiaries
with customers, suppliers, distributors and other persons with which the Company
or any of its Subsidiaries has significant business relations.
(b) Except as described in Section 5.1(b) of the Company
Disclosure Schedule or to the extent Parent shall otherwise consent in writing
(which consent shall not be delayed or withheld without a reason), during the
period from the date of this Agreement and continuing until the earlier of the
termination of this Agreement or the Effective Time, the Company shall not and
shall not permit its Subsidiaries to:
(i) amend or otherwise change the Company Charter or
Company Bylaws or the Subsidiary Documents;
(ii) issue, sell, transfer, pledge, redeem, accelerate
rights under, dispose of or encumber, or authorize the issuance, sale,
transfer, pledge, redemption, acceleration of rights under, disposition or
encumbrance
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of, any shares of capital stock of any class, or any options, warrants,
convertible securities or other rights of any kind to acquire any shares
of capital stock, or any other ownership interest (including any phantom
interest) in the Company, any of its Subsidiaries or affiliates, except
for the issuance of shares of Company Common Stock pursuant to the
exercise of currently outstanding Company Stock Options or pursuant to
currently outstanding phantom units of Company Common Stock;
(iii) sell, pledge, mortgage, dispose, lease, license or
encumber any assets, tangible or intangible, of the Company or any of its
Subsidiaries or suffer to exist any Lien thereupon other than (A) sales of
assets not to exceed $1 million; in the aggregate and (B) sales, leases or
licenses of the Company Proprietary Products in the ordinary course of
business consistent with past practice;
(iv) (A) declare, set aside, make or pay any dividend or
other distribution (whether in cash, stock or property or any combination
thereof) in respect of any of its capital stock, except that a direct or
indirect wholly owned Subsidiary of the Company may declare and pay a
dividend to its parent, (B) split, combine or reclassify any of its
capital stock or issue or authorize or propose the issuance of any other
securities in respect of, in lieu of or in substitution for shares of its
capital stock, or (C) purchase, repurchase, redeem or otherwise acquire,
directly or indirectly, or permit any Subsidiary to purchase, repurchase,
redeem or otherwise acquire, any of its securities or any securities of
its Subsidiaries, or any option, warrant or right, to acquire any such
securities, or propose to do any of the foregoing, other than pursuant to
the exercise of the Company's repurchase rights with respect to unvested
shares held by individuals terminating employment or service with the
Company or any Subsidiary;
(v) (A) acquire (by merger, consolidation or acquisition
of stock or assets or otherwise) any corporation, partnership or other
business organization or division thereof or any equity interest therein;
(B) incur any indebtedness for borrowed money or issue any debt securities
or assume, guarantee or endorse or otherwise as an accommodation become
responsible for (whether directly, contingently or otherwise), the
obligations of any person for borrowed money, or make any loans or
advances or capital contributions to or investments in any other person,
except in the ordinary course of business and consistent with past
practice; (C) amend any Company Material Contract in any material respect
or enter into any agreement that would be deemed a Company Material
Contract; (D) terminate, cancel or waive any right under any Company
Material Contract other than in the ordinary course of business consistent
with past practices, or enter into, amend or terminate any lease relating
to real property, (E) adopt or implement any new stockholder rights plan;
(F) authorize any capital expenditures or purchase of fixed assets which
are in excess of $500,000 for any individual
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expenditure or purchase or in excess of $1.5 million in the aggregate for
all such expenditures and purchases, for the Company and its Subsidiaries
taken as a whole; (G) modify its standard warranty terms for its products
or amend or modify any product warranties in effect as of the date of this
Agreement in any manner that is materially adverse to the Company or any
Subsidiary, other than extensions of warranties in the ordinary course of
business; or (H) enter into or amend any contract, agreement, commitment
or arrangement to effect any of the matters prohibited by this Section
5.1(b)(v);
(vi) (A) increase the compensation payable or to become
payable to its directors, officers or employees, (B) hire or promote any
officer or director-level employee or appoint any director of the Company
or any of its Subsidiaries, (C) make any loan, advance or capital
contribution (other than loans or advances of reasonable relocation
expenses), or grant any severance or termination pay to, or enter into or
amend any Company Employee Plan or other plan, contract, agreement or
arrangement that would be a Company Employee Plan, (D) establish, adopt,
enter into or amend any collective bargaining agreement or other plan,
agreement, trust, fund, policy or arrangement for the benefit of any
current or former directors, officers or employees of the Company or any
of its Subsidiaries, (E) pay any discretionary bonuses to any officer of
the Company, (F) make any awards of equity or any rights to receive
equity, or (G) materially change any actuarial assumption or other
assumption used to calculate funding obligations with respect to any
pension or retirement plan, or change the manner in which contributions to
any such plan are made or the basis on which such contributions are
determined, except, in each case, as may be required by Law or contractual
commitments which are existing as of the date of this Agreement and listed
in Section 3.13 of the Company Disclosure Schedule;
(vii) take any action to change accounting policies or
procedures (including procedures with respect to revenue recognition,
payments of accounts payable and collection of accounts receivable),
change any assumption underlying, or method of calculating, any bad debt
contingency or other reserve, except in each case as required under GAAP
or applicable Law;
(viii) make any Tax election inconsistent with past
practice, change any Tax election already made, settle or compromise any
federal, state, local or foreign Tax liability or agree to an extension of
a statute of limitations, fail to file any Tax Return when due (or,
alternatively, fail to file for available extensions) or fail to cause
such Tax Returns when filed to be complete and accurate; or fail to pay
any Taxes when due;
(ix) pay, discharge or satisfy any claims, liabilities
or obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction in the
ordinary
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course of business and consistent with past practices of liabilities
reflected or reserved against in the financial statements contained in the
Company SEC Reports or incurred in the ordinary course of business and
consistent with past practice;
(x) fail to pay accounts payable and other obligations
in the ordinary course of business;
(xi) accelerate the collection of receivables or modify
the payment terms of any receivables other than in the ordinary course of
business consistent with past practices;
(xii) sell, securitize, factor or otherwise transfer any
accounts receivable;
(xiii) adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or
other reorganization of the Company or any Subsidiary (other than the
Merger or as expressly provided in this Agreement);
(xiv) at any time within the 90-day period before the
Effective Time, without complying fully with the notice and other
requirements of the WARN Act, effectuate (1) a "plant closing" (as defined
in the WARN Act) affecting any single site of employment or one or more
facilities or operating units within any single site of employment of the
Company or any of its Subsidiaries; or (2) a "mass layoff" (as defined in
the WARN Act) at any single site of employment or one or more facilities
or operating units within any single site of employment of the Company or
any of its Subsidiaries. Nor shall the Company or any of its Subsidiaries
otherwise terminate or lay off employees in such numbers as to give rise
to liability under any applicable Laws respecting the payment of severance
pay, separation pay, termination pay, pay in lieu of notice of
termination, redundancy pay, or the payment of any other compensation,
premium or penalty upon termination of employment, reduction of hours, or
temporary or permanent layoffs. For purposes of the WARN Act and this
Agreement, the Effective Time is and shall be the same as the "effective
date" within the meaning of the WARN Act; or
(xv) authorize or enter into any agreement, contract or
commitment of any type referred to in Section 3.12, or authorize, take, or
agree in writing or otherwise to take, any of the actions described in
Sections 5.1(b)(i) through (xiv) above, or any action which would make any
of the representations or warranties of the Company contained in this
Agreement untrue or incorrect or prevent the Company from performing or
cause the Company not to perform its covenants hereunder, in each case,
such
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that the conditions set forth in Sections 7.2(a) or 7.2(b), as the case
may be, would not be satisfied.
Section 5.2 Conduct of Business by Parent Pending the Merger.
(a) Except as described in Section 5.2(a) of the Parent
Disclosure Schedule, or to the extent the Company shall otherwise consent in
writing (which consent shall not be delayed or withheld without a reason),
during the period from the date of this Agreement and continuing until the
earlier of the termination of this Agreement or the Effective Time, Parent shall
(i) conduct its business and that of its Subsidiaries, taken as a whole, only
in, and Parent shall not take any action except in, and shall cause its
Subsidiaries not to take any action except in, the ordinary course and in a
manner that is consistent with past practices and in compliance in all material
respects with all applicable Laws and regulations; and (ii) use commercially
reasonable efforts to preserve intact the business organization of Parent and
its Subsidiaries, taken as a whole, to keep available the services of the
current officers, employees and consultants of Parent and its Subsidiaries, and
to preserve the present relationships of Parent and its Subsidiaries with
customers, suppliers, distributors and other persons with which Parent or any of
its Subsidiaries has significant business relations.
(b) Except as described in Section 5.2(b) of the Parent
Disclosure Schedule or to the extent the Company shall otherwise consent in
writing (which consent shall not be delayed or withheld without a reason),
during the period from the date of this Agreement and continuing until the
earlier of the termination of this Agreement or the Effective Time, Parent shall
not and shall not permit its Subsidiaries to:
(i) amend or otherwise change the Parent Charter or
Parent Bylaws or the charter or bylaws of any of the Subsidiaries;
(ii) issue, sell, transfer, pledge, redeem, accelerate
rights under, dispose of or encumber, or authorize the issuance, sale,
transfer, pledge, redemption, acceleration of rights under, disposition or
encumbrance of, any shares of capital stock of any class, or any options,
warrants, convertible securities or other rights of any kind to acquire
any shares of capital stock, or any other ownership interest (including
any phantom interest) in Parent;
(iii) (A) except in connection with the financing of the
transactions contemplated by this Agreement, pledge, mortgage or encumber
any assets, tangible or intangible, of Parent or any of its Subsidiaries
or suffer to exist any Lien thereupon, or (B) sell, dispose, lease or
license any assets, tangible or intangible, of Parent or any of its
Subsidiaries, other than (A) sales of assets not to exceed $20 million, in
the aggregate, other than inventory in the ordinary course of business and
(B)
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sales, leases or licenses of Parent Proprietary Products in the ordinary
course of business consistent with past practice;
(iv) (A) declare, set aside, make or pay any dividend or
other distribution (whether in cash, stock or property or any combination
thereof) in respect of any of its capital stock, except that a direct or
indirect wholly owned Subsidiary of Parent may declare and pay a dividend
to its parent, (B) split, combine or reclassify any of its capital stock
or issue or authorize or propose the issuance of any other securities in
respect of, in lieu of or in substitution for shares of its capital stock,
or (C) purchase, repurchase, redeem or otherwise acquire, directly or
indirectly, or permit any Subsidiary to purchase, repurchase, redeem or
otherwise acquire, any of its securities or any securities of its
Subsidiaries, or any option, warrant or right, to acquire any such
securities, or propose to do any of the foregoing, other than pursuant to
the exercise of Parent's repurchase rights with respect to unvested shares
held by individuals terminating employment or service with Parent or any
Subsidiary;
(v) (A) acquire (by merger, consolidation or acquisition
of stock or assets or otherwise) any corporation, partnership or other
business organization or division thereof or any equity interest therein,
other than Parent Permitted Acquisitions (as defined below) (it being
understood and hereby agreed that prior to entering into any binding
agreement, agreement in principle, letter of intent, memorandum of
understanding or other similar agreement or document with respect thereto,
Parent shall first consult with the Company and its advisors in good faith
regarding the timing, terms and conditions of such Parent Permitted
Acquisition); or (B) except to finance the transactions contemplated by
this Agreement, incur any indebtedness for borrowed money or issue any
debt securities or assume, guarantee or endorse or otherwise as an
accommodation become responsible for (whether directly, contingently or
otherwise), the obligations of any person for borrowed money, or make any
loans or advances or capital contributions to or investments in any other
person other than in an amount not to exceed $200 million in the aggregate
and as would not have a material adverse impact on the credit rating of
Parent as of the date hereof, or (C) adopt or implement any new
stockholder rights plan. For purposes of this Agreement, the term "Parent
Permitted Acquisition" shall mean any acquisition (by merger,
consolidation or acquisition of stock or assets or otherwise) of any
corporation, partnership or other business organization or division
thereof or any equity interest therein that (w) involves or contemplates
the issuance or payment of consideration, and/or the assumption of
indebtedness, with an aggregate fair market value (taken together with the
fair market value of the total consideration issued or paid, and the
indebtedness assumed, in connection with all other acquisitions
theretofore effected by Parent after the date hereof and prior to the
Effective Time) which does not exceed $200
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million in the aggregate, (x) would not have a material adverse impact on
the credit rating of Parent as of the date hereof, (y) would not
reasonably be expected to delay the consummation of the transactions
contemplated hereby in any material respect, and (z) does not require or
contemplate the solicitation of consent or other approval of Parent's
stockholders;
(vi) take any action to change accounting policies or
procedures (including procedures with respect to revenue recognition,
payments of accounts payable and collection of accounts receivable),
change any assumption underlying, or method of calculating, any bad debt
contingency or other reserve, except in each case as required under GAAP
or applicable Law;
(vii) make any Tax election inconsistent with past
practice, change any Tax election already made, settle or compromise any
federal, state, local or foreign Tax liability or agree to an extension of
a statute of limitations, fail to file any Tax Return when due (or,
alternatively, fail to file for available extensions) or fail to cause
such Tax Returns when filed to be complete and accurate; or fail to pay
any Taxes when due;
(viii) adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or
other reorganization of Parent or any Subsidiary (other than the Merger, a
Parent Permitted Acquisition or as expressly provided in this Agreement);
or
(ix) authorize, take, or agree in writing or otherwise
to take, any of the actions described in Sections 5.2(b)(i) through (viii)
above, or any action which would make any of the representations or
warranties of Parent contained in this Agreement untrue or incorrect or
prevent Parent from performing or cause Parent not to perform its
covenants hereunder, in each case, such that the conditions set forth in
Sections 7.3(a) or 7.3(b), as the case may be, would not be satisfied.
Section 5.3 ESPP.
Prior to the Effective Time, the Company shall take all necessary
and appropriate actions so that all outstanding purchase rights under the 1993
Employee Stock Purchase Plan (the "ESPP") shall automatically be exercised, in
accordance with the terms of the ESPP, prior to the Effective Time, and the
shares of Company Common Stock purchased under those exercised rights shall at
the Effective Time be cancelled and converted into the right to receive shares
of Parent Common Stock pursuant to Section 2.1(a) of this Agreement. Prior to
the Effective Time, the Company shall take all necessary and appropriate actions
so that the ESPP shall terminate immediately prior to the Effective Time, and no
further purchase rights shall be granted under the ESPP. Employees of the
Company and its Subsidiaries who continue in the employ of the Surviving
Corporation or Parent or any Subsidiary of Parent after the Effective Time shall
be eligible
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for participation in Parents' Employee Stock Purchase Plan within 30 days
following the Effective Time.
Section 5.4 Director Plan.
Prior to the Effective Time, the Company shall take all necessary
and appropriate actions to terminate the 1995 Director Plan so that, no awards
may be granted under such plan on or after the Effective Time. Except as
otherwise provided under the 1995 Director Plan with respect to phantom units,
any outstanding awards granted under such plan prior to the Effective Time shall
be assumed and converted into the right to receive shares of Parent Common Stock
pursuant to Section 6.10.
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.1 Access to Information; Confidentiality.
(a) Subject to the terms of this Section 6.1, each party
hereto shall (and shall cause its Subsidiaries and its and their respective
directors, officers, employees, auditors, agents and other representatives to)
afford to the other party hereto and its officers, employees, financial
advisors, legal counsel, accountants, consultants, banks or other financing
sources contemplating providing customary financing in connection with the
transactions contemplated by this Agreement, and other representatives
reasonable access during normal business hours to all of its books and records,
properties, plants and personnel; provided, however, that any such access shall
be conducted under the supervision of personnel of the party providing such
access and in a manner that does not interfere with the normal operations of the
party providing such access.
(b) Notwithstanding anything to the contrary set forth herein,
nothing in this Section 6.1 shall require the Company or Parent to disclose any
information that, in its sole and absolute discretion, (i) it is not legally
permitted to disclose or the disclosure of which would contravene any applicable
law or binding order (including any Antitrust Law) or (ii) the disclosure of
which would jeopardize any attorney-client or other legal privilege.
(c) The Company shall use its reasonable best efforts to
cooperate with Parent in its efforts to consummate the financing of the
transactions contemplated by this Agreement. Such efforts shall include (i)
providing direct contact between prospective lenders and the officers and
directors of the Company and its Subsidiaries, (ii) providing assistance in
preparation of confidential information memoranda and other materials to be used
in connection with obtaining such financing, (iii) cooperation with respect to
matters relating to pledges of collateral to take effect at the Effective Time
in connection with such financing, and (iv) providing the financial and other
information necessary for the
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satisfaction of the obligations and conditions set forth in the commitment
letter relating to such financing, in each case within the time periods required
thereby. Parent shall use its reasonable best efforts to obtain all financing
required for the transactions contemplated by this Agreement (such that after
the transactions Parent and its Subsidiaries shall have an amount of working
capital and other liquidity reasonable for the business, taken as a whole (after
giving effect to the Merger)). Such efforts shall include, prior to Closing, (i)
obtaining additional financing as required, and (ii) obtaining all consents and
amendments to agreements related to any material amount of indebtedness for
borrowed money required to ensure that consummation of the transactions
contemplated by this Agreement does not and will not result in a conflict,
breach or event of default thereunder (or repaying any such indebtedness and
terminating the related agreement if such consent or amendment is not obtained).
(d) No information received pursuant to an investigation made
under this Section 6.1 shall be deemed to (i) qualify, modify, amend or
otherwise affect any representations, warranties, covenants or other agreements
of the parties set forth in this Agreement or any certificate or other
instrument delivered to other party in connection with the transactions
contemplated hereby, (ii) amend or otherwise supplement the information set
forth in the Company Disclosure Schedule or the Parent Disclosure Schedule, as
applicable, (iii) limit or restrict the remedies available to the parties under
applicable law arising out of a breach of this Agreement, or (iv) limit or
restrict the ability of either party to invoke or rely on the conditions to the
obligations of the parties to consummate the transactions contemplated hereby
set forth in Article VII hereof.
(e) Each party shall (and shall cause its directors, officers,
employees, auditors, agents and other representatives to) hold in confidence all
non-public information acquired from the other party or the other party's
representatives as a result of any investigation made under this Section 6.1 in
accordance with the terms of the Non-Disclosure Agreement effective September
10, 2004 between Parent and the Company (the "Confidentiality Agreement").
Section 6.2 No Solicitation.
(a) Each of the Company and Parent shall and shall cause each
of their respective Subsidiaries, affiliates, directors, officers, employees,
agents and representatives (including any investment banker, financial advisor,
attorney, accountant or other representative retained by them) to (i)
immediately cease any discussions or negotiations with any other parties that
may be ongoing with respect to the possibility or consideration of any
Acquisition Proposal and (ii) not release any third party from, or waive any
provisions of, any confidentiality or standstill agreement to which it or any of
its Subsidiaries is a party with respect to any Acquisition Proposal. Subject to
the terms of this Section 6.2, neither the Company nor Parent shall, nor shall
either of them authorize or permit any of their respective Subsidiaries,
directors, officers, employees, agents or representatives (including any
investment banker, financial advisor, attorney, accountant or
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other representative retained by it) to, directly or indirectly through another
person, (i) solicit, initiate, facilitate or encourage (including by way of
furnishing information or assistance), or take any other action designed to
solicit, initiate, facilitate or encourage any inquiries with respect to or the
making of any proposal that constitutes, or is reasonably likely to lead to, an
Acquisition Proposal (as defined below) (except to disclose the existence of
this provision), (ii) participate in any discussions or negotiations regarding
an Acquisition Proposal (except to disclose the existence of this provision), or
(iii) enter into or execute any letter of intent, memorandum of understanding,
agreement in principle, merger agreement or similar agreement constituting or
relating to an Acquisition Proposal (other than a confidentiality agreement
entered into in the circumstances referred to and consistent with the provisions
of Section 6.2(c)). Any violation of the foregoing restrictions by any
representative of a party, whether or not such representative is so authorized
and whether or not such representative is purporting to act on behalf of such
party or otherwise, shall be deemed to be a breach of this Agreement by such
party.
(b) Notwithstanding anything to the contrary set forth herein,
in the event that the Company or Parent shall receive an unsolicited bona fide
written Acquisition Proposal after the date of this Agreement and prior to its
respective Merger Stockholders Meeting, the party receiving such Acquisition
Proposal shall be permitted to engage in discussions and negotiations with, and
provide nonpublic information or data to, the person making such Acquisition
Proposal, provided that (i) the party receiving such Acquisition Proposal has
entered into a confidentiality agreement with the person making such Acquisition
Proposal having provisions that are no less favorable to such party than those
contained in the Confidentiality Agreement, and (ii) the Board of Directors of
the party receiving such Acquisition Proposal has determined in good faith
(after consultation with its outside legal counsel) that the failure to take
such action would be reasonably likely to be a breach of its fiduciary duties
under applicable Law.
(c) Each party hereto shall notify the other party hereto
promptly (and in any event within 24 hours) after receipt of any Acquisition
Proposal, or any request for nonpublic information relating to such party by any
person that informs such party that it is considering making, or has made, an
Acquisition Proposal, or any inquiry from any person seeking to have discussions
or negotiations with such party relating to a possible Acquisition Proposal.
Such notice shall be made orally and confirmed in writing, and shall indicate
the identity of the person making the Acquisition Proposal, inquiry or request
and the material terms and conditions of any inquiries, proposals or offers
(including a copy thereof if in writing and any related documentation or
correspondence). Each party hereto shall also promptly (and in any event within
24 hours) notify the other party hereto, orally and in writing, if it enters
into discussions or negotiations concerning any Acquisition Proposal or provides
nonpublic information or data to any person in accordance with this Section 6.2
and shall keep the other party hereto reasonably informed of the status and
terms of any such proposals, offers, discussions or negotiations on a current
basis, including by providing a copy of all material documentation or
correspondence relating thereto that is exchanged between such party and the
person making such Acquisition Proposal.
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(d) Nothing set forth in this Section 6.2 shall prohibit
either party hereto from taking and disclosing to its stockholders a position
contemplated by Rule 14e-2(a) or Rule 14d-9 promulgated under the Exchange Act,
or from making any other disclosure if the Company Board or the Parent Board, as
the case may be, determines in good faith (after consultation with its outside
legal counsel) that the failure to make such disclosure would be reasonably
likely to be a breach of its fiduciary duties under applicable law; provided,
however, that any action taken or disclosure made pursuant to such rules shall
not in any way limit or modify the effect that any action taken or disclosure
made pursuant to such rules has under any other provision of this Agreement.
(e) Nothing set forth in this Section 6.2 shall (i) permit
either party hereto to terminate this Agreement (ii) affect any other obligation
of the parties under this Agreement, (iii) limit either party's obligation to
duly call, give notice of, convene and hold its respective Merger Stockholders
Meeting, (iv) relieve either party hereto of its obligation to submit to a vote
of its stockholders the Company Stockholder Proposal and the Parent Stockholder
Proposal at its respective Merger Stockholders Meeting, or (v) permit either
party hereto to submit for a vote of its respective stockholders at or prior to
its respective Merger Stockholders Meeting any Acquisition Proposal other than
the Parent Voting Proposal and the Company Voting Proposal, as applicable.
(f) For purposes of this Agreement, the term "Acquisition
Proposal" means any inquiry, proposal or offer, filing of any regulatory
application or notice (whether in draft or final form) or disclosure of an
intention to do any of the foregoing from any person relating to any (i) direct
or indirect acquisition or purchase of a business that constitutes a substantial
portion of the net revenues, net income or assets of the Company or any of its
"significant subsidiaries" (as defined under Regulation S-X of the Securities
Act), or Parent or any of its significant subsidiaries, as the case may be, (ii)
direct or indirect acquisition or purchase of any class of equity securities
representing 25% or more of the voting power of the Company or any of its
significant subsidiaries, or Parent or any of its significant subsidiaries, as
the case may be, (iii) tender offer or exchange offer that if consummated would
result in any person beneficially owning 25% or more of the voting power of the
Company or Parent, as the case may be, or (iv) merger, consolidation, business
combination, recapitalization, liquidation, dissolution or similar transaction
involving the Company or Parent or any of their respective Subsidiaries, as the
case may be, in each case other than the transactions contemplated by this
Agreement and any transaction by the Company or Parent that are permitted by
Sections 5.1 and 5.2, as applicable.
Section 6.3 Board Recommendations.
(a) Subject to the terms of this Section 6.3, neither the
Company Board (or any committee thereof) nor the Parent Board (nor any committee
thereof) shall:
(i) withdraw or modify, or propose publicly to withdraw
or modify, in a manner adverse to the other party, the approval or
recommendation by such Board of Directors or any such committee of this
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Agreement or the transactions contemplated hereby (any such withdrawal,
amendment, modification or proposal, a "Change of Recommendation"); or
(ii) adopt, approve or recommend to its stockholders
that they accept, or propose publicly to adopt, approve or recommend, any
Acquisition Proposal or Superior Proposal.
(b) Notwithstanding anything to the contrary set forth herein,
each of the Company Board and the Parent Board may effect a Change of
Recommendation or approve or recommend to its stockholders that they accept, or
propose publicly to adopt, approve or recommend, any Superior Proposal, provided
that (i) the Company or Parent, respectively, has received a Superior Proposal
and such Superior Proposal has not been withdrawn at the time such action is
taken, (ii) the Company Stockholders Meeting or the Parent Stockholders Meeting,
respectively, has not occurred, and (iii) the Board of Directors of the party
receiving such Superior Proposal determines in good faith (after consultation
with its outside legal counsel) that the failure to take such action would be
reasonably likely to be a breach of its fiduciary duties under applicable Law,
and (iv) the party hereto receiving such Superior Proposal has provided the
other party hereto five business days prior written notice that its Board of
Directors intends to take such action, specifying the material terms and
conditions of such Superior Proposal and identifying the person or persons
making such Superior Proposal.
(c) In the event that, during the foregoing five day period,
the party hereto that has received the foregoing notice shall make a
counterproposal to the party hereto that is proposing to effect a Change of
Recommendation or approve or recommend to its stockholders that they accept, or
propose publicly to adopt, approve or recommend, any Superior Proposal, the
party that is proposing to take such action shall consider and cause its
financial and legal advisors to negotiate on its behalf in good faith with
respect to the terms of such counterproposal.
(d) Nothing set forth in this Section 6.3 shall prohibit
either party hereto from taking and disclosing to its stockholders a position
contemplated by Rule 14e-2(a) or Rule 14d-9 promulgated under the Exchange Act,
or from making any other disclosure if the Company Board or the Parent Board, as
the case may be, determines in good faith (after consultation with its outside
legal counsel) that the failure to make such disclosure would be reasonably
likely to be a breach of its fiduciary duties under applicable Law; provided,
however, that any action taken or disclosure made pursuant to such rules shall
not in any way limit or modify the effect that any action taken or disclosure
made pursuant to such rules has under any other provision of this Agreement.
(e) Nothing set forth in this Section 6.3 shall (i) permit
either party hereto to terminate this Agreement (ii) affect any other obligation
of the parties under this Agreement, (iii) limit either party's obligation to
duly call, give notice of, convene and hold its respective Merger Stockholders
Meeting, (iv) relieve either party hereto of its obligation to submit to a vote
of its stockholders the Company Stockholder Proposal and the Parent
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Stockholder Proposal at its respective Merger Stockholders Meeting, or (v)
permit either party hereto to submit for a vote of its respective stockholders
at or prior to its respective Merger Stockholders Meeting any Acquisition
Proposal other than the Parent Voting Proposal and the Company Voting Proposal,
as applicable.
(f) For purposes of this Agreement, a "Superior Proposal"
means any Acquisition Proposal that the Board of Directors of the party
receiving it determines in good faith (after (i) consultation with its
independent financial advisor of nationally recognized reputation and (ii)
taking into account all of the terms and conditions of such proposal and this
Agreement, including (A) any counterproposal by the other party to this
Agreement, (B) the likelihood that the transactions contemplated by such
Acquisition Proposal will close in a timely manner, and (C) the extent to which
the financing for the transactions contemplated by such Acquisition Proposal, to
the extent required, is committed or is capable of being obtained on the terms
proposed) is more favorable to such party's stockholders than the Merger or the
counter proposal.
Section 6.4 Joint Proxy Statement/Prospectus; Registration
Statement.
(a) As promptly as practicable after execution of this
Agreement, Parent and the Company shall cooperate with each other regarding, and
shall prepare and file with the SEC, the Joint Proxy Statement/Prospectus (as
amended or supplemented, the "Joint Proxy Statement/Prospectus") to be sent to
the stockholders of the Company in connection with the Company Stockholders
Meeting and to the stockholders of Parent in connection with the Parent
Stockholders Meeting, and Parent shall prepare and file with the SEC the
Registration Statement (in which the Joint Proxy Statement/Prospectus will be
included). The Company and Parent shall use reasonable best efforts to cause the
Registration Statement to become effective as soon as practicable thereafter.
(b) Without limiting the generality of the foregoing, each of
the Company and Parent shall cause its respective Representatives to fully
cooperate with the other Party and its respective Representatives in the
preparation of the Joint Proxy Statement/Prospectus and the Registration
Statement, and shall, upon request, furnish the other Party with all information
concerning it and its Affiliates as the other may deem reasonably necessary or
advisable in connection with the preparation of the Joint Proxy
Statement/Prospectus and the Registration Statement. Parent shall use reasonable
best efforts to take all actions required under any applicable federal or state
securities or Blue Sky Laws in connection with the issuance of shares of Parent
Common Stock pursuant to the Merger. As promptly as practicable after the
Registration Statement becomes effective, Parent and the Company shall cause the
Joint Proxy Statement/Prospectus to be mailed to their respective stockholders.
(c) The information supplied or to be supplied by either party
for inclusion in the Registration Statement shall not at the time the
Registration Statement is
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filed with the SEC or declared effective by the SEC 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. The information
supplied or to be supplied by either party for inclusion or incorporation by
reference in the Joint Proxy Statement/Prospectus to be sent to the stockholders
of such party in connection with the respective Merger Stockholders Meeting, or
to be included or supplied by or on behalf of either party for inclusion in any
filing pursuant to Rule 165 and Rule 425 under the Securities Act or Rule 14a-12
under the Exchange Act (each, a "Regulation M-A Filing") shall not, on the date
the Joint Proxy Statement/Prospectus (or any amendment thereof or supplement
thereto) is first mailed to stockholders or at the time of the Company
Stockholders Meeting or at the time any Regulation M-A Filing is filed with the
SEC or as of the Effective Time, contain any statement which, at such time and
in light of the circumstances under which it shall be made, is false or
misleading with respect to any material fact, or omit to state any material fact
necessary in order to make the statements made therein not false or misleading;
or omit to state any material fact necessary to correct any statement in any
earlier communication with respect to the solicitation of proxies for the Merger
Stockholders Meeting which has become false or misleading. The Proxy
Statement/Prospectus shall comply in all material respects as to form and
substance with the requirements of the Securities Act, the Exchange Act and the
rules and regulations thereunder.
(d) Without limiting the generality of the foregoing, prior to
the Effective Time (i) the Company and Parent shall notify each other as
promptly as practicable upon becoming aware of any event or circumstance which
should be described in an amendment of, or supplement to, the Joint Proxy
Statement/Prospectus or the Registration Statement, and (ii) the Company and
Parent shall each notify the other as promptly as practicable after the receipt
by it of any written or oral comments of the SEC on, or of any written or oral
request by the SEC for amendments or supplements to, the Joint Proxy
Statement/Prospectus or the Registration Statement, and shall promptly supply
the other with copies of all correspondence between it or any of its
Representatives and the SEC with respect to any of the foregoing filings.
(e) The Company and Parent shall make any necessary filing
with respect to the Merger under the Securities Act and the Exchange Act and the
rules and regulations thereunder.
Section 6.5 Merger Stockholders Meetings.
(a) Each party acting through its respective Board of
Directors, shall take all actions in accordance with applicable Law, the rules
of NYSE, in the case of the Company, the Company Charter and the Company Bylaws
and, in the case of Parent, the Parent Charter and the Parent Bylaws, to
promptly and duly call, give notice of, convene and hold as promptly as
practicable, and in any event within forty-five (45) days after the declaration
of effectiveness of the Registration Statement, its respective Merger
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Stockholders Meeting for the purpose of considering and voting upon, in the case
of the Company, the approval of the Company Voting Proposal and, in the case of
Parent, the approval of the Parent Voting Proposal. Each of the Company and
Parent shall use their respective reasonable best efforts to hold the Company
Stockholders Meeting and the Parent Stockholders Meeting on the same day and at
the same time as the other Merger Stockholders Meeting.
(b) Subject to Section 6.3, to the fullest extent permitted by
applicable Law, (i) in the case of the Company, the Company Board shall
recommend approval of the Company Voting Proposal by the stockholders of the
Company at the Company Stockholders Meeting and include such recommendation in
the Joint Proxy Statement/Prospectus, and (ii) in the case of Parent, the Parent
Board shall recommend approval of the Parent Voting Proposal by the stockholders
of Parent at the Parent Stockholders Meeting and include such recommendation in
the Joint Proxy Statement/Prospectus. Unless the Board of Directors of either
party, or any committee thereof, shall effect a Change of Recommendation or
approve or recommend to its stockholders that they accept, or propose publicly
to adopt, approve or recommend, any Superior Proposal in accordance with Section
6.3, each of the Company and Parent shall use its reasonable best efforts to
solicit from its stockholders proxies in favor of the Company Voting Proposal or
the Parent Voting Proposal, respectively, and to secure the Requisite Company
Stockholder Approval and the Requisite Parent Stockholder Approval,
respectively.
(c) The Company shall submit the Company Voting Proposal to
its stockholders at the Company Stockholders Meeting for the purpose of acting
upon such proposal whether or not (i) the Company Board at any time subsequent
to the date of this Agreement effects a Change of Recommendation or approves or
recommends to its stockholders that they accept, or proposes publicly to adopt,
approve or recommend, any Superior Proposal, or (ii) any actual, potential or
purported Acquisition Proposal or Superior Proposal has been commenced,
disclosed, announced or submitted to the Company. Parent shall submit the Parent
Voting Proposal to its stockholders at the Parent Stockholders Meeting for the
purpose of acting upon such proposal whether or not (i) the Parent Board at any
time subsequent to the date of this Agreement effects a Change of Recommendation
or approves or recommends to its stockholders that they accept, or propose
publicly to adopt, approve or recommend, any Superior Proposal, or (ii) any
actual, potential or purported Acquisition Proposal or Superior Proposal has
been commenced, disclosed, announced or submitted to Parent. Each of the Company
and Parent shall use reasonable best efforts to ensure that all proxies
solicited in connection with its Merger Stockholders Meetings are solicited, in
compliance with the DGCL, the NYSE, in the case of the Company, the Company
Charter and the Company Bylaws and, in the case of Parent, the Parent Charter
and the Parent Bylaws, and all other applicable legal requirements.
Notwithstanding anything to the contrary contained in this Agreement, each of
the Company or Parent, after consultation with the other, may adjourn or
postpone its respective Merger Stockholders Meeting to the extent necessary to
ensure that any required supplement or amendment to the Joint Proxy
Statement/Prospectus is provided to its respective stockholders or, if as of the
time for which the applicable Merger Stockholders Meeting is originally
scheduled (as set
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forth in the Joint Proxy Statement/Prospectus), there are insufficient shares
of, in the case of the Company, Company Common Stock and, in the case of Parent,
Parent Common Stock, represented (either in person or by proxy) to constitute a
quorum necessary to conduct the business of the respective Merger Stockholders
Meeting.
(d) Following the Merger Stockholders Meetings and at or prior
to the Closing, each of the Company and Parent shall deliver to the Corporate
Secretary of the other party a certificate setting forth the voting results from
the respective Merger Stockholders Meeting.
Section 6.6 Reasonable Best Efforts to Complete.
(a) Subject to the terms and conditions of this Agreement,
each of Parent and the Company shall cooperate fully with the other and use its
reasonable best 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 consummate and
make effective, in the most expeditious manner possible, the Merger and the
other transactions contemplated hereby, including by (i) obtaining (and
cooperating with the other in obtaining) any clearance, consent, authorization,
order or approval of, or any exemption by, any Governmental Entity required to
be obtained or made by Parent or the Company in connection with the Merger, and
making any and all registrations and filings that may be necessary or advisable
to obtain the approval or waiver from, or to avoid an action or proceeding by,
any Governmental Entity, including all filings required by the HSR Act and any
other applicable Antitrust Laws, (ii) obtaining all necessary consents, waivers
and approvals under any of the Parent Material Contracts, Company's Material
Contracts and Company Real Property Leases in connection with the Merger, (iii)
authorizing for listing on the NYSE, upon official notice of issuance, the
shares of Parent Common Stock to be issued in the Merger, (iv) reserving for
issuance the shares of Parent Common Stock issuable upon the exercise of all
Assumed Options, (v) defending any lawsuit or other proceeding, whether brought
by a Governmental Entity or other third party, seeking to challenge this
Agreement or the transactions contemplated hereby, including by seeking to have
lifted or rescinded any injunction or restraining order or other order adversely
affecting the ability of the parties to consummate the transactions contemplated
hereby, and (vi) executing any certificates, instruments or other documents that
are necessary to consummate and make effective the transactions contemplated
hereby and to fully carry out the purposes and intent of this Agreement.
(b) Each of the Company and Parent shall keep the other
reasonably informed of the status of their respective efforts to consummate the
transactions contemplated hereby, including by (i) promptly notifying the other
of, and if in writing, furnishing the other with copies of (or, in the case of
material oral communications, advising the other orally of) any communications
from or with any Governmental Entity (whether domestic, foreign or
supranational) with respect to the transactions contemplated hereby, (ii)
permitting the other to review and discuss in advance, and consider in good
faith the views of the other in connection with, any proposed written (or any
material proposed oral)
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communication with any such Governmental Entity, (iii) not participating in any
meeting with any such Governmental Entity unless it consults with the other in
advance and to the extent permitted by such Governmental Entity gives the other
the opportunity to attend and participate thereat, (iv) furnishing the other
with copies of all correspondence, filings and communications between it and any
such Governmental Entity with respect to this Agreement and the transactions
contemplated hereby, and (v) furnishing the other with such necessary
information and reasonable assistance as each of them may reasonably request in
connection with its preparation of necessary filings or submissions of
information to any such Governmental Entity. Each of the Company and Parent may,
as each deems advisable and necessary, reasonably designate any competitively
sensitive material provided to the other under this Section 6.6 as "counsel
only" and, in such event, such material and the information contained therein
shall be given only to the legal counsel of the recipient and shall not be
disclosed by such counsel to non-legal directors, officers, employees or other
advisors or representatives of the recipient unless express permission is
obtained in advance from the source of the materials or its legal counsel.
(c) Notwithstanding anything to the contrary set forth in this
Section 6.6 or elsewhere in this Agreement, neither Parent nor any of its
affiliates shall be required to (i) sell or dispose of or hold separately
(through a trust or otherwise) any assets or businesses or interests in any
assets or businesses of Parent, the Company or their respective affiliates or
make any other change in any portion of the businesses of the Company or Parent
or incur any other limitation on the conduct of the businesses of the Company or
Parent to obtain such clearances, consents, authorizations, orders, approvals
and exemptions or agree to do, or submit to orders providing for, any of the
foregoing, in each case whether before or after the Effective Time, or (ii) if
any governmental body that has the authority to enforce any Antitrust Law seeks,
or authorizes its staff to seek, a preliminary injunction or restraining order
to enjoin consummation of the Merger, take or agree to take any action which
Parent reasonably believes would be prohibited or restricted under such
preliminary injunction or restraining order.
(d) In case at any time after the Effective Time any further
action is necessary to carry out the purposes of this Agreement or to vest the
Surviving Corporation with full title to all properties, assets, rights,
approvals, immunities and franchises of any of the parties to the Merger, the
proper officers and directors of each party hereto shall take all such necessary
action as may be reasonably requested by Parent to achieve such intent.
Section 6.7 Rights Agreements.
(a) Prior to the Effective Time and for so long as this
Agreement shall not have been terminated pursuant to Article VIII, the Company
shall not, directly or indirectly, in connection with the execution, delivery or
performance of this Agreement and the transactions contemplated hereby (i) take
any action to deem Parent or Merger Sub to be an Acquiring Person, (ii) issue or
cause to be issued any Rights to stockholders of the Company as a result of any
actions taken by Parent, (iii) trigger any other provisions of the
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Company Rights Agreement, including giving rise to a Distribution Date or a
Stock Acquisition Date, as a result of any actions taken by Parent, or (iv)
amend, modify (other than to delay any Distribution Date therein or to render
the Rights inapplicable to the Merger or any action permitted under this
Agreement) or terminate the Company Rights Agreement unless (A) required to do
so by order of a court of competent jurisdiction, or (B) the Company Board has
determined in good faith (after consultation with its outside legal counsel)
that the failure to take such action would be reasonably likely to be a breach
of its fiduciary duties under applicable Law.
(b) Prior to the Effective Time and for so long as this
Agreement shall not have been terminated pursuant to Article VIII, Parent shall
not, directly or indirectly, in connection with the execution, delivery or
performance of this Agreement and the transactions contemplated hereby (i) take
any action to deem the Company to be an Acquiring Person, (ii) issue or cause to
be issued any Rights to stockholders of Parent as a result of any actions taken
by the Company, (iii) trigger any other provisions of the Parent Rights
Agreement, including giving rise to a Distribution Date or a Stock Acquisition
Date, as a result of any actions taken by the Company or (iv) amend, modify
(other than to delay any Distribution Date therein or to render the Rights
inapplicable to the Merger or any action permitted under this Agreement) or
terminate the Company Rights Agreement unless (A) required to do so by order of
a court of competent jurisdiction, or (B) the Parent Board has determined in
good faith (after consultation with its outside legal counsel) that the failure
to take such action would be reasonably likely to be a breach of its fiduciary
duties under applicable Law.
Section 6.8 Public Announcements.
Parent and the Company shall consult with each other before issuing
any press release or making any public statement with respect to this Agreement
and the transactions contemplated hereby and shall not issue any such press
release or make any such public statement without the prior written consent of
the other party, which shall not be unreasonably withheld, delayed or
conditioned; provided, however, that a party may, without the prior consent of
the other party, issue such press release or make such public statement as may
upon consultation with outside counsel be required by applicable Law or the
rules and regulations of the NYSE if it has used all reasonable best efforts to
consult with the other party prior thereto regarding the timing, scope and
content of any such press release or public statement, and provided, further, no
such consultation shall be required to make any disclosure or otherwise take any
action expressly permitted by Section 6.3.
Section 6.9 Employee Benefits; 401(k) Plan.
(a) From and after the Effective Time, Parent will, or will
cause the Surviving Corporation to, recognize the prior service with the Company
or its Subsidiaries of each employee of the Company or its Subsidiaries as of
the Effective Time (the "Company Employees") in connection with all employee
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benefit plans, programs or policies (including vacation) of Parent or its
affiliates in which Company Employees are eligible to participate following the
Effective Time, for purposes of eligibility, vesting and levels of benefits (but
not for purposes of benefit accruals or benefit amounts under any defined
benefit pension plan or to the extent that such recognition would result in
duplication of benefits). From and after the Effective Time, Parent or the
Surviving Corporation shall provide Company Employees for so long as such
Company Employees remain so employed, health and welfare benefits pursuant to
employee benefit plans, programs, policies or arrangements maintained by Parent
or any Subsidiary of Parent providing coverage and benefits which are no less
favorable than those provided to employees of Parent in positions comparable to
positions held by Company Employees with Parent or its Subsidiaries from time to
time after the Effective Time. From and after the Effective Time, Parent will,
or will cause the Surviving Corporation to cause any pre-existing conditions or
limitations and eligibility waiting periods (to the extent that such waiting
periods would be inapplicable, taking into account service with the Company)
under any group health plans of Parent or its affiliates to be waived with
respect to Company Employees and their eligible dependents. Parent shall, or
shall cause the Surviving Corporation to, give each Company Employee credit for
any deductibles and annual out-of-pocket limits for medical expenses paid during
the applicable period under any welfare plans maintained or contributed to by
the Company prior to the Closing in satisfying any deductibles and annual
out-of-pocket limits for medical expenses for the corresponding period under any
welfare plans maintained or contributed to by Parent or its affiliates.
(b) Prior to the Effective Time, the Company shall take such
actions as Parent may reasonably request so as to enable the Surviving
Corporation to effect such actions relating to the Company 401(k) Plan (the
"401(k) Plan") as Parent may deem necessary or appropriate (after reasonable
consultation with the Company), including terminating the 401(k) Plan prior to
the Effective Time, subject to the terms of the 401(k) Plan and applicable Law
and provided that such action does not preclude the immediate participation of
the Company Employees in any successor plan.
Section 6.10 Stock Plans.
(a) At the Effective Time, Parent shall assume the rights and
obligations of the Company with respect to the 2000 Plan as well as the duties
of the Company with respect to the administration of such plan.
(b) At the Effective Time, each Company Stock Option (other
than phantom units of Company Common Stock) that has an exercise price equal to
or less than $26.93 (the "Merger Consideration Value"), and is outstanding
immediately prior to the Effective Time, whether or not then vested or
exercisable (each, an "Assumed Option"), shall be fully vested and immediately
exercisable and assumed by Parent. In accordance with its terms, each Assumed
Option shall be converted into an option to acquire that number of shares of
Parent Common Stock equal to the sum of (x) the product of the number of shares
of Company
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Common Stock subject to such Assumed Option immediately prior to the Effective
Time and the Exchange Ratio and (y) the quotient of the Cash Merger
Consideration divided by the Parent Closing Price (which sum shall be rounded
down to the nearest whole share), at a price per share equal to the aggregate
exercise price of Company Common Stock subject to such Assumed Option divided by
the number of shares determined under (x) and (y) above (which price per share
shall be rounded up to the nearest whole cent). The Assumed Option shall
otherwise be subject to the same terms and conditions as were applicable under
the respective Company Stock Option immediately prior to the Effective Time. It
is the intention of the parties that each Assumed Option that qualified as an
incentive stock option (as defined in Section 422 of the Code) shall continue to
so qualify, to the maximum extent permissible, following the Effective Time.
(c) Prior to the Closing Date, (i) each Company Stock Option
that has an exercise price in excess of the Merger Consideration Value and is
outstanding on the date hereof, whether or not then vested or exercisable (each,
a "Cancelled Option"), shall be fully vested and immediately exercisable; (ii)
the Company shall notify the holders of each such Cancelled Option that if such
options are not exercised within the period ending fifteen (15) days (thirty
(30) days in the case of Company Stock Options granted under the 1995 Director
Plan) from the date of such notice, such Cancelled Option shall expire as of the
last day of such period and be of no further force or effect.
(d) At the Effective Time, each Phantom Unit Account that
contains phantom units of Company Common Stock ("Phantom Units") immediately
prior to the Effective Time, whether or not then vested (each, an "Assumed
Phantom Unit Account"), shall be fully vested and assumed by Parent. Each
Assumed Phantom Unit Account shall be converted into a deferral account under
the 1995 Director Plan with respect to the phantom units of Parent Common Stock
equal to the sum of (i) the product of the number of Phantom Units in such
Assumed Phantom Unit Account immediately prior to the Effective Time and the
Exchange Ratio and (ii) the quotient of the Cash Merger Consideration divided by
the Parent Closing Price (which sum shall be rounded down to the nearest whole
share). The Assumed Phantom Unit Account and phantom units of Parent Common
Stock held therein shall otherwise be subject to the same terms and conditions
as were applicable to such Phantom Unit Account immediately prior to the
Effective Time.
(e) If and to the extent necessary or required by the terms of
any Company Stock Plan or any Company Stock Option, the Company shall, prior to
the Effective Time, amend the terms of its equity incentive plans or
arrangements, to give effect to the provisions of Sections 6.10(b) and 6.10(c).
(f) As soon as practicable following the Effective Time, but
in any event within five (5) business days thereafter (to the extent Parent has
received the most recent copies of the relevant Company Stock Plans), Parent
shall prepare and file with the SEC a registration statement on Form S-8
covering the shares of Parent Common Stock issuable pursuant to the outstanding
Assumed Options and Assumed Phantom Unit Accounts, Parent shall cause the same
to become effective, and Parent shall take such further
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actions as may be reasonably necessary to cover under such registration
statement shares of Parent Common Stock held by those persons eligible
immediately prior to the Closing Date pursuant to the 1995 Director Plan.
Section 6.11 Indemnification and Insurance.
(a) For six years after the Effective Time, Parent shall, and
shall cause the Surviving Corporation and its Subsidiaries to, honor and fulfill
in all respects the obligations of the Company and its Subsidiaries under any
and all indemnification agreements in effect immediately prior to the Effective
Time between the Company or any of its Subsidiaries and any of its current or
former directors and officers and any person who becomes a director or officer
of the Company or any of its Subsidiaries prior to the Effective Time (the
"Indemnified Parties"). In addition, for a period of six years following the
Effective Time, Parent shall (and shall cause the Surviving Corporation and its
Subsidiaries to) cause the certificate or articles of incorporation and bylaws
(and other similar organizational documents) of the Surviving Corporation and
its Subsidiaries to contain provisions with respect to indemnification and
exculpation that are at least as favorable as the indemnification and
exculpation provisions contained in the certificate or articles of incorporation
and bylaws (or other similar organizational documents) of the Company and its
Subsidiaries immediately prior to the Effective Time, and during such six year
period, such provisions shall not be amended, repealed or otherwise modified in
any respect, except as required by Law.
(b) For a period of six years after the Effective Time, Parent
and the Surviving Corporation shall cause to be maintained in effect the
existing policy of the Company's directors' and officers' and fiduciary
liability insurance (the "D&O Policy") covering claims arising from facts or
events that occurred at or prior to the Effective Time (including for acts or
omissions occurring in connection with this Agreement and the consummation of
the transactions contemplated hereby, to the extent that such acts or omissions
are covered by the D&O Policy) and covering each Indemnified Party who is
covered as of the Effective Time by the D&O Policy on terms with respect to
coverage and amounts that are no less favorable than those terms in effect on
the date hereof; provided, however, that in no event shall Parent or the
Surviving Corporation be required to expend in any one year an amount in excess
of 200% of the current annual premium paid by the Company (which annual premium
is set forth on Schedule 6.11(b) of the Company Disclosure Schedule) for such
insurance (such 200% amount, the "Maximum Annual Premium"); and provided,
further, that if the annual premiums of such insurance coverage exceed such
amount, Parent and the Surviving Corporation shall be obligated to obtain a
policy with the greatest coverage available for a cost not exceeding the Maximum
Annual Premium. Prior to the Effective Time, notwithstanding anything to the
contrary in this Agreement, the Company may purchase a six-year "tail" prepaid
policy on the D&O Policy on terms and conditions no less advantageous than the
D&O Policy, provided that the amount paid by the Company for such "tail" policy
shall not exceed six times the Maximum Annual Premium. In the event that the
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Company purchases such a "tail" policy prior to the Effective Time, Parent and
the Surviving Corporation shall maintain such "tail" policy in full force and
effect and continue to honor their respective obligations thereunder, in lieu of
all other obligations of Parent and the Surviving Corporation under the first
sentence of this Section 6.11(b) for so long as such "tail" policy shall be
maintained in full force and effect.
(c) The obligations and liability of Parent, the Surviving
Corporation and its Subsidiaries under this Section 6.11 shall be joint and
several.
(d) The obligations under this Section 6.11 shall not be
terminated, amended or otherwise modified in such a manner as to adversely
affect any Indemnified Party (or any other person who is a beneficiary under the
D&O Policy or the "tail" policy referred to in paragraph (b) above (and their
heirs and representatives)) without the prior written consent of such affected
Indemnified Party or other person who is a beneficiary under the D&O Policy or
the "tail" policy referred to in paragraph (b) above (and their heirs and
representatives). Each of the Indemnified Parties or other persons who are
beneficiaries under the D&O Policy or the "tail" policy referred to in paragraph
(b) above (and their heirs and representatives) are intended to be third party
beneficiaries of this Section 6.11, with full rights of enforcement as if a
party thereto. The rights of the Indemnified Parties (and other persons who are
beneficiaries under the D&O Policy or the "tail" policy referred to in paragraph
(b) above (and their heirs and representatives)) under this Section 6.11 shall
be in addition to, and not in substitution for, any other rights that such
persons may have under the certificate or articles of incorporation, bylaws or
other equivalent organizational documents, any and all indemnification
agreements of or entered into by the Company or any of its Subsidiaries, or
applicable Law (whether at law or in equity).
(e) In the event that Parent, Surviving Corporation or any of
their Subsidiaries (or any of their respective successors or assigns) shall
consolidate or merge with any other person and shall not be the continuing or
surviving corporation or entity in such consolidation or merger, or transfers at
least 50% of its properties and assets to any other person, then in each case
proper provision shall be made so that the continuing or surviving corporation
or entity (or its successors or assigns, if applicable), or transferee of such
assets, as the case may be, shall assume the obligations set forth in this
Section 6.11.
Section 6.12 Tax Matters.
None of Parent, Merger Sub or the Company shall, and they shall not
permit any of their respective Subsidiaries to, take any action prior to or
following the Closing that would reasonably be expected to cause the Merger to
fail to qualify as a reorganization within the meaning of Section 368(a) of the
Code. Parent and the Company shall use their respective reasonable best efforts
to obtain the Tax opinions set forth in Section 7.1(g) hereof (collectively, the
"Tax Opinions"). Officers of Parent and the Company shall execute and deliver to
Wilson Sonsini Goodrich & Rosati, Professional Corporation, counsel to the
Company, and Skadden, Arps, Slate, Meagher & Flom LLP, counsel to Parent,
certificates containing appropriate representations at such time or times as may
be reasonably requested by such law firms, including the effective date of
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the Registration and the Effective Time, in connection with their respective
deliveries of opinions with respect to the Tax treatment of the Merger.
Section 6.13 Notification of Certain Matters.
(a) Parent shall give prompt notice to the Company, and the
Company shall give prompt notice to Parent, upon any director or officer of
Parent or the Company (as applicable) becoming aware of (i) any governmental
complaints, investigations or hearings (or communications indicating that the
same may be contemplated), or the institution or the threat of significant
litigation involving such party or any of its Subsidiaries, and will keep the
other party fully informed of such events and (ii) otherwise, the occurrence, or
failure to occur, of any event, which occurrence or failure to occur would be
reasonably likely to cause any of the conditions set forth in Article VII not to
be satisfied.
(b) No notice given or received pursuant to this Section 6.13
shall be deemed to (i) qualify, modify, amend or otherwise affect any
representations, warranties, covenants or other agreements of the parties set
forth in this Agreement or any certificate or other instrument delivered to
other party in connection with the transactions contemplated hereby, (ii) amend
or otherwise supplement the information set forth in the Company Disclosure
Schedule or the Parent Disclosure Schedule, as applicable, (iii) limit or
restrict the remedies available to the parties under applicable law arising out
of a breach of this Agreement, or (iv) limit or restrict the ability of either
party to invoke or rely on the conditions to the obligations of the parties to
consummate the transactions contemplated hereby set forth in Article VII hereof.
(c) Each party shall (and shall cause its directors, officers,
employees, auditors, agents and other representatives) to hold in confidence all
non-public information acquired from the other party or the other party's
representatives as a result of any notice given or received pursuant to this
Section 6.13 in accordance with the terms of the Confidentiality Agreement.
(d) The Company shall not send any written communications to
its employees regarding the Merger or this Agreement without receiving the prior
written consent of Parent with respect to such written communications (which
consent shall not be unreasonably withheld or delayed).
Section 6.14 Takeover Statutes.
Notwithstanding any other provision in this Agreement, in no event
shall the approval of the Merger and this Agreement by the Company Board under
Section 203 of the DGCL be withdrawn, revoked or modified by the Company Board.
If any Takeover Statute is or may become applicable to the Merger or any of the
other transactions contemplated by this Agreement, the Company and the Company
Board, or Parent and the Parent Board, as applicable, shall promptly grant such
approvals and take such lawful
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actions as are necessary so that such transactions may be consummated as
promptly as practicable on the terms contemplated by this Agreement or the
Merger, as the case may be, and otherwise take such lawful actions to eliminate
or minimize the effects of such statute, and any regulations promulgated
thereunder, on such transactions.
Section 6.15 Section 16 Matters.
Prior to the Effective Time, each of the Company and Parent shall
take all such steps as may be required (to the extent permitted under applicable
Law) to cause any dispositions of Company Common Stock or acquisitions of Parent
Common Stock (including, in each case, derivative securities) resulting from the
transactions contemplated hereby by each individual who is subject to the
reporting requirements of Section 16(a) of the Exchange Act with respect to the
Company to be exempt under Rule 16b-3 promulgated under the Exchange Act.
Section 6.16 Directorships.
Effective as of the Effective Time, Parent shall cause the Parent
Board to be expanded by one member and shall appoint one member of the existing
Company Board who is reasonably agreed to by Parent and the Company to fill such
vacancy as a Class 2 director to serve a two-year term.
ARTICLE VII
CONDITIONS TO THE MERGER
Section 7.1 Conditions to Obligation of Each Party to Effect the
Merger.
The respective obligations of each party to effect the Merger shall
be subject to the satisfaction at or prior to the Effective Time of the
following conditions:
(a) Effectiveness of the Registration Statement. The
Registration Statement shall have been declared effective by the SEC under the
Securities Act. No stop order suspending the effectiveness of the Registration
Statement shall have been issued by the SEC and no proceedings for that purpose
and no similar proceeding in respect of the Joint Proxy Statement/Prospectus
shall have been initiated or threatened in writing by the SEC.
(b) Stockholder Approval. The Requisite Company Stockholder
Approval and the Requisite Parent Stockholder Approval shall have been obtained.
(c) Antitrust Approvals. All necessary waiting periods (and
all extensions thereof) applicable to the Merger under the Antitrust Laws shall
have terminated or expired, and all clearances, consents, approvals, orders and
authorizations necessary for the consummation of the Merger under the Antitrust
Laws shall have been received and become final and non-appealable.
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(d) No Injunctions or Restraints. No temporary restraining
order, preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the Merger shall be in effect.
(e) No Illegality. No statute, rule, regulation or order shall
be enacted, entered, enforced or deemed applicable to the Merger by a
governmental authority of competent jurisdiction that makes the consummation of
the Merger illegal.
(f) NYSE Listing. The shares of Parent Common Stock issuable
in the Merger shall have been authorized for listing on the NYSE upon official
notice of issuance.
(g) Tax Opinions. Parent and the Company shall have received
an opinion of Skadden, Arps, Slate, Meagher & Flom LLP and Wilson Sonsini
Goodrich & Rosati, Professional Corporation, respectively, dated as of the
Effective Time, to the effect that the Merger will qualify as a reorganization
within the meaning of Section 368(a) of the Code; provided, however, that if (i)
Skadden, Arps, Slate, Meagher & Flom LLP fails to render such opinion, this
conditions shall nonetheless be deemed to be satisfied with respect to Parent if
Wilson Sonsini Goodrich & Rosati, Professional Corporation renders such opinion
to Parent and (ii) if Wilson Sonsini Goodrich & Rosati, Professional Corporation
fails to render such opinion, this condition shall nonetheless be deemed to be
satisfied with respect to the Company if Skadden, Arps, Slate, Meagher & Flom
LLP renders such opinion to the Company. The issuance of such opinions shall be
conditioned upon the receipt by such counsel of customary representation letters
from each of Parent, Merger Sub and the Company, in each case, in form and
substance reasonably satisfactory to such counsel. Each such representation
letter shall be dated on or before the date of such opinion and shall not have
been withdrawn or modified in any material respect.
Section 7.2 Additional Conditions to Obligations of Parent and
Merger Sub.
The obligations of Parent and Merger Sub to effect the Merger are
also subject to the fulfillment on or prior to the Closing Date of the following
additional conditions:
(a) Representations and Warranties. Each of the
representations and warranties of the Company contained in this Agreement shall
be true and correct (without giving effect to any qualification as to
materiality or Company Material Adverse Effect contained in any specific
representation or warranty), as of the date of this Agreement and as of the
Closing Date, except (i) for changes contemplated or permitted by this
Agreement, (ii) that the accuracy of representations and warranties that by
their terms speak as of another date will be determined as of such date and
(iii) where any failures of any such representations and warranties to be true
and correct would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect; and Parent shall
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have received a certificate of the Company signed on behalf of the Company by
the chief executive officer and chief financial officer of the Company to such
effect.
(b) Agreements and Covenants. The Company shall have performed
or complied in all material respects with all agreements and covenants required
by this Agreement to be performed or complied with by it at or prior to the
Closing Date; and Parent and Merger Sub shall have received a certificate of the
Company signed on behalf of the Company by the chief executive officer and the
chief financial officer of the Company to such effect.
(c) No Company Material Adverse Effect. No Company Material
Adverse Effect shall have occurred since the date hereof and be continuing.
Section 7.3 Additional Conditions to Obligation of the Company.
The obligation of the Company to effect the Merger is also subject
to the fulfillment at or prior to the Closing Date of the following additional
conditions:
(a) Representations and Warranties. Each of the
representations and warranties of Parent and Merger Sub contained in this
Agreement shall be true and correct (without giving effect to any qualification
as to materiality or Parent Material Adverse Effect contained in any specific
representation or warranty), as of the date of this Agreement and as of the
Closing Date, except (i) for changes contemplated or permitted by this
Agreement, (ii) that the accuracy of representations and warranties that by
their terms speak as of another date will be determined as of such date and
(iii) where any failures of any such representations and warranties to be true
and correct would not reasonably be expected to have, individually or in the
aggregate, a Parent Material Adverse Effect; and the Company shall have received
a certificate of Parent signed on behalf of Parent by the chief executive
officer and chief financial officer of Parent to such effect.
(b) Agreements and Covenants. Parent and Merger Sub shall have
performed or complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by them at or prior
to the Closing Date; and the Company shall have received a certificate of Parent
signed on behalf of Parent by the chief executive officer and the chief
financial officer of Parent to such effect.
(c) No Parent Material Adverse Effect. No Parent Material
Adverse Effect shall have occurred since the date hereof and be continuing.
ARTICLE VIII
TERMINATION
Section 8.1 Termination.
This Agreement may be terminated at any time prior to the Effective
Time, notwithstanding approval thereof by the stockholders of the Company and
Parent:
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(a) by mutual written consent duly authorized by the Company
Board and the Parent Board;
(b) by either Parent or the Company, if the Merger shall not
have been consummated by June 30, 2005 (the "Outside Date"); provided, however,
that the right to terminate this Agreement under this Section 8.1(b) shall not
be available to any party that has breached its obligations under this
Agreement, provided such breach has been the principal cause of, or resulted in,
the failure of the Merger to be consummated on or before the Outside Date;
provided, further, that no termination by a party pursuant this Section 8.1(b)
shall be effective unless concurrently therewith such party fulfills its
obligation under Section 8.3.
(c) by either Parent or the Company, if a court of competent
jurisdiction or governmental, regulatory or administrative agency or commission
shall have issued a nonappealable final order, decree or ruling or taken any
other action having the effect of permanently restraining, enjoining or
otherwise prohibiting the Merger (provided that the party seeking to terminate
this Agreement pursuant to this Section 8.1(c) shall have complied with its
obligations under Section 6.6 by using its reasonable best efforts to have any
such order, decree, ruling or other action vacated or lifted);
(d) by either Parent or the Company, if the Requisite Company
Stockholder Approval shall not have been obtained at the Company Stockholder
Meeting; provided, however, that the right to terminate this Agreement under
this Section 8.1(d) shall not be available to the Company if the Company shall
have breached the provisions of Section 6.2, 6.3 or 6.4, in any material
respect; provided, further, that no termination by a party pursuant this Section
8.1(d) shall be effective unless concurrently therewith such party fulfills its
obligation under Section 8.3.
(e) by either Parent or the Company, if the Requisite Parent
Stockholder Approval shall not have been obtained at the Parent Stockholder
Meeting; provided, however, that the right to terminate this Agreement under
this Section 8.1(e) shall not be available to Parent if Parent shall have
breached the provisions of Section 6.2, 6.3 or 6.4, in any material respect;
provided, further, that no termination by a party pursuant this Section 8.1(e)
shall be effective unless concurrently therewith such party fulfills its
obligation under Section 8.3.
(f) by Parent, if (i) the Company shall have breached the
provisions of Sections 6.2 or 6.3, or (ii) the Company shall have breached or
failed to perform any of its representations, warranties, or other covenants or
agreements contained in this Agreement, which breach or failure to perform would
reasonably be expected to cause the conditions set forth in Section 7.2(a) or
Section 7.2(b) to not be satisfied at the Closing and which breach or failure,
if capable of being cured, shall not have been cured within 20 days following
receipt by the Company of written notice of such breach or failure from Parent
(it being understood and hereby agreed that Parent may not terminate this
Agreement pursuant to this Section 8.1(f) if such breach or failure is cured
within such 20 day period);
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(g) by the Company, if (i) Parent shall have breached the
provisions of Sections 6.2 or 6.3, or (ii) Parent shall have breached or failed
to perform any of its representations, warranties, or other covenants or
agreements contained in this Agreement, which breach or failure to perform would
reasonably be expected to cause the conditions set forth in Sections 7.3(a) or
7.3(b) to not be satisfied at the Closing and which breach or failure, if
capable of being cured, shall not have been cured within 20 days following
receipt by Parent of written notice of such breach from the Company (it being
understood and hereby agreed that the Company may not terminate this Agreement
pursuant to this Section 8.1(g) if such breach or failure is cured within such
20 day period); or
(h) by either Parent or the Company, if the increase in
aggregate Stock Merger Consideration pursuant to Section 2.4 would result in the
aggregate Stock Merger Consideration that would be issued to the holders of
Company Common Stock, Assumed Options and Assumed Phantom Accounts pursuant to
Section 2.1(a) and 2.1(d) would constitute more than 44.9% of the number of
outstanding shares of Parent Common Stock immediately following the Effective
Time.
Section 8.2 Effect of Termination.
In the event of the termination of this Agreement pursuant to
Section 8.1, this Agreement shall forthwith become void and there shall be no
liability on the part of any party hereto or any of its affiliates, directors,
officers or stockholders except (i) that the provisions of this Section 8.2,
Section 8.3 and Article IX hereof shall survive termination and (ii) nothing
herein shall relieve any party from liability for any willful or intentional
breach of this Agreement. The Confidentiality Agreement shall survive the
termination of this Agreement as provided therein.
Section 8.3 Fees and Expenses.
(a) Except as set forth in this Section 8.3, all Expenses (as
defined below) incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such Expenses, whether
or not the Merger is consummated; provided, however, that Parent and the Company
shall share equally all Expenses (but not including attorneys' fees and
expenses) incurred in connection with the printing and filing of the Joint Proxy
Statement/Prospectus (including any preliminary materials related thereto), the
Registration Statement (including financial statements and exhibits) and any
amendments or supplements thereto and filings by Parent and the Company under
the HSR Act or any similar filing requirement of any Governmental Entity
applicable to the Merger or this Agreement. For purposes of this Agreement,
"Expenses" includes all reasonable out-of-pocket expenses (including all
reasonable fees and expenses of counsel, accountants, investment bakers, experts
and consultants to a party hereto and its Affiliates) incurred by a party or on
its behalf in connection with or related to the authorization, preparation,
negotiation, execution and performance of this Agreement and the transactions
contemplated hereby, including the preparation, printing,
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filing and mailing of the Joint Proxy Statement/Prospectus and Registration
Statement and the solicitation of stockholder approvals and all other matters
related to the transactions contemplated hereby.
(b) The Company shall pay to Parent a termination fee $45
million (the "Company Termination Fee") as follows: if (i) either party shall
terminate this Agreement pursuant to Section 8.1(b) or 8.1(d), and (ii) prior to
such termination an Acquisition Proposal with respect to the Company shall have
been publicly announced or otherwise become publicly known and not withdrawn
prior to the Company Stockholders Meeting or such termination, or any person
shall have publicly announced an intention (whether or not conditional) to make
an Acquisition Proposal with respect to the Company and not retracted such
intention prior to the Company Stockholders Meeting or such termination, then
(A) if, following receipt of an Acquisition Proposal with respect to the
Company, the Company effected a Change of Recommendation pursuant to Section
6.3, then on the first day following such termination the Company shall
reimburse Parent in the amount of $8 million for Expenses of Parent (the "Parent
Expense Amount") and (B) if, within one year following the date of such
termination the Company or any of its Subsidiaries enters into a definitive
agreement with respect to any Acquisition Proposal, then on the date of
execution of such definitive agreement, the Company shall pay to Parent an
amount equal to the Company Termination Fee minus the Parent Expense Amount, if
any, previously paid by the Company to Parent.
(c) Parent shall pay to the Company a termination fee of $45
million (the "Parent Termination Fee") as follows: if (i) either party shall
terminate this Agreement pursuant to Section 8.1(b) or 8.1(e), and (ii) prior to
such termination an Acquisition Proposal with respect to Parent shall have been
publicly announced or otherwise become publicly known and not withdrawn prior to
the Parent Stockholders Meeting or such termination, or any person shall have
publicly announced an intention (whether or not conditional) to make an
Acquisition Proposal with respect to Parent, and not retracted such intention
prior to the Parent Stockholders Meeting or such termination, then (A) if,
following receipt of an Acquisition Proposal with respect to Parent, Parent
effected a Change of Recommendation pursuant to Section 6.3, then on the first
day following such termination Parent shall reimburse the Company in the amount
$8 million for Expenses of the Company (the "Company Expense Amount") and (B)
if, within one year following the date of such termination Parent or any of its
Subsidiaries enters into a definitive agreement with respect to any Acquisition
Proposal, then on the date of execution of such definitive agreement, Parent
shall pay to the Company an amount equal to the Parent Termination Fee minus the
Company Expense Amount, if any, previously paid by Parent to the Company.
(d) All payments to be made pursuant to this Section 8.3 shall
be made by wire transfer of immediately available funds. If either party fails
to timely pay the Expenses of the other party or the Parent Termination Fee or
Company Termination Fee, as applicable, then such party shall pay all costs and
expenses (including legal fees and expenses) incurred by the other party in
connection with any action or proceeding (including the filing of any lawsuit)
taken by it to collect such unpaid amounts, together with interest on
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such unpaid amounts at the prime lending rate prevailing at such time, as
published in the Wall Street Journal, from the date such amounts were required
to be paid until the date actually received by the such other party.
(e) The parties acknowledge that the agreements contained in
this Section 8.3 are an integral part of the transactions contemplated by this
Agreement and constitute liquidated damages and not a penalty, and that, without
these agreements, the parties would not have entered into this Agreement.
ARTICLE IX
GENERAL PROVISIONS
Section 9.1 Nonsurvival of Representations; Warranties and
Agreements.
None of the representations, warranties, covenants or other
agreements in this Agreement or in any certificate or other instrument delivered
pursuant to this Agreement shall survive the Effective Time, except for the
covenants and other agreements contained in: Articles I and II; Sections 5.3
(ESPP), 5.4 (Director Plan), 6.6. (Reasonable Best Efforts to Complete), 6.8
(Public Announcements), 6.9 (Employee Benefits; 401(k) Plan); 6.10 (Stock
Plans), 6.11 (Indemnification and Insurance), 6.12 (Tax Matters), 8.2 (Effect of
Termination) and 8.3 (Fees and Expenses); and this Article IX. The
Confidentiality Agreement shall survive the execution and delivery of this
Agreement or the termination of this Agreement in accordance with the provisions
of this Agreement, as the case may be, pursuant to its terms and conditions.
Section 9.2 Notices.
All notices and other communications given or made pursuant hereto
shall be in writing and shall be deemed to have been duly given or made if and
when delivered personally or by overnight courier to the parties at the
following addresses or sent by electronic transmission, with confirmation
received, to the telecopy numbers specified below (or at such other address or
telecopy number for a party as shall be specified by like notice):If to Parent
or Merger Sub:
Advanced Medical Optics, Inc.
1700 E. St. Andrew Place
Santa Ana, CA 92705
Attention: General Counsel
Facsimile No.: 714-247-8679
Telephone No.: 714-247-8200
With a copy to (which shall not constitute notice):
Skadden, Arps, Slate, Meagher & Flom LLP
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300 South Grand Avenue, Suite 3400
Los Angeles, California 90071
Attention: Brian J. McCarthy
Facsimile No.: 213-687-5600
Telephone No.: 213-687-5000
(a) If to the Company:
VISX, Incorporated
3400 Central Expressway
Santa Clara, CA 95051
Attention: General Counsel
Facsimile No.: 925-600-6850
Telephone No.: 925-600-6800
With a copy to (which shall not constitute notice):
Wilson Sonsini Goodrich & Rosati, Professional
Corporation
650 Page Mill Road
Palo Alto, California 94304-1050
Attention: John Roos, Esq.
Page Mailliard, Esq.
Michael Ringler, Esq.
Facsimile No.: 650-493-6811
Telephone No.: 650-493-9300
And:
Morrison & Foerster LLP
425 Market Street
San Francisco, California 94105-2482
Attention: Gavin Grover, Esq.
Facsimile No.: 415-268-7522
Telephone No.: 415-268-7000
Any such notice or communication shall be deemed to have been delivered
and received (i) in the case of personal delivery, on the date of such delivery,
(ii) in the case of facsimile, on the date sent if confirmation of receipt is
received and such notice is also promptly mailed by registered or certified mail
(return receipt requested), (iii) in the case of a nationally-recognized
overnight courier in circumstances under which such courier guarantees next
business day delivery, on the next business day after the date when sent and
(iv) in the case of mailing, on the third business day following that on which
the piece of mail containing such communication is posted.
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Section 9.3 Certain Definitions.
For purposes of this Agreement, the term:
(a) "affiliate" means a person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, the first mentioned person;
(b) "Antitrust Law" means the Sherman Act, as amended, the
Clayton Act, as amended, the HSR Act, the Federal Trade Commission Act, as
amended, the EC Merger Regulations and all other federal, state and foreign
statutes, rules, regulations, orders, decrees, administrative and judicial
doctrines, and other Laws that are designed or intended to prohibit, restrict or
regulate actions having the purpose or effect of monopolization or restraint of
trade;
(c) "beneficial owner" with respect to any shares of Company
Common Stock means a person who shall be deemed to be the beneficial owner of
such shares pursuant to Rule 13d-3 under the Exchange Act;
(d) "business day" means any day other than a Saturday or
Sunday or any day on which banks in the State of New York are required or
authorized to be closed;
(e) "control" including the terms "controlled by" and "under
common control with") means the possession, directly or indirectly or as trustee
or executor, of the power to direct or cause the direction of the management or
policies of a person, whether through the ownership of stock, as trustee or
executor, by contract or credit arrangement or otherwise;
(f) "include" or "including" means "include, without
limitation" or "including, without limitation," as the case may be, and the
language following "include" or "including" shall not be deemed to set forth an
exhaustive list;
(g) "Knowledge" means the actual knowledge, after reasonable
investigation, of (i) with respect to the Company and its Subsidiaries, any of
the individuals identified in Section 9.3(g) of the Company Disclosure Schedule,
and (ii) with respect to Parent and its Subsidiaries, any of the individuals
identified in Section 9.3(g) of the Parent Disclosure Schedule;
(h) "Law" with respect to any person means any applicable
foreign or domestic federal, state, provincial, local, municipal or other law,
statute, code, treaty, ordinance, rule, regulation, administrative, executive or
other order (whether temporary, preliminary or permanent) of any Governmental
Entity, judgment, writ, stipulation, award, injunction, decree or arbitration
award or finding entered or imposed by any Governmental Entity, in any case that
are in force as of the date hereof or which come into force during the term of
this Agreement; and
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(i) "person" means an individual, corporation, partnership,
association, trust, unincorporated organization, other entity or group (as
defined in Section 13(d)(3) of the Exchange Act).
Section 9.4 Amendment.
This Agreement may be amended by the parties hereto by action taken
by or on behalf of their respective Boards of Directors at any time prior to the
Effective Time; provided, however, that, after approval of the Merger by the
stockholders of the Company, no amendment may be made which by Law requires
further approval by such stockholders without such further approval. This
Agreement may not be amended except by an instrument in writing signed by the
parties hereto.
Section 9.5 Extension; Waiver.
At any time prior to the Effective Time, the parties hereto, by
action taken or authorized by their respective Boards of Directors, may to the
extent legally allowed, (a) extend the time for the performance of any of the
obligations or other acts of any other party hereto, (b) waive any inaccuracies
in the representations and warranties of any other party hereto contained herein
or in any document delivered pursuant hereto or (c) waive compliance with any of
the agreements or conditions of any other party hereto contained herein. Any
agreement on the part of a party hereto to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of such
party.
Section 9.6 Headings.
The table of contents and the headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 9.7 Severability.
If any term or other provision of this Agreement is invalid, illegal
or incapable of being enforced by any rule of Law, or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner adverse to any party. Upon
such determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner to the end that the transactions
contemplated hereby are fulfilled to the fullest extent possible.
Section 9.8 Entire Agreement; No Third Party Beneficiaries.
This Agreement (including the documents and instruments referred to
herein, including the Confidentiality Agreement) (a) constitutes the entire
agreement and supersedes all prior agreements and understandings, both written
and oral, among the
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parties, or any of them, with respect to the subject matter hereof, and (b) is
not intended to confer upon any person other than the parties hereto any rights
or remedies hereunder, other than the persons intended to benefit from the
provisions of Section 6.11 (Indemnification and Insurance), who shall have the
right to enforce such provisions directly.
Section 9.9 Assignment.
This Agreement shall not be assigned by operation of Law or
otherwise, except that Parent and Merger Sub may assign all or any of their
rights hereunder to any wholly owned subsidiary thereof; provided, however, that
no such assignment pursuant to this Section 9.9 shall relieve Parent or Merger
Sub of their respective obligations hereunder.
Section 9.10 Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of any party hereto in the exercise
of any right hereunder shall impair such right or be construed to be a waiver
of, or acquiescence in, any breach of any representation, warranty or agreement
herein, nor shall any single or partial exercise of any such right preclude any
other or further exercise thereof or of any other right. All rights and remedies
existing under this Agreement are cumulative to, and not exclusive of, any
rights or remedies otherwise available.
Section 9.11 Governing Law.
This Agreement shall be governed by, and construed in accordance
with, the internal Laws of the State of Delaware, without regard to the conflict
of Law provisions thereof.
Section 9.12 Counterparts.
This Agreement may be executed in two or more counterparts, and by
the different parties hereto in separate counterparts, each of which when
executed shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement.
Section 9.13 WAIVER OF JURY TRIAL.
EACH OF PARENT, MERGER SUB AND THE COMPANY HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER
BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HERBY OR THE ACTIONS OF PARENT,
MERGER SUB OR THE COMPANY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND
ENFORCEMENT OF THIS AGREEMENT.
Section 9.14 Specific Performance.
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The parties agree that irreparable damage would occur and that the
parties would not have any adequate remedy at Law in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions of this
Agreement, this being in addition to any other remedy to which they are entitled
at Law or in equity.
Section 9.15 Disclosure Schedules.
(a) The information set forth in each section or subsection of
the Company Disclosure Schedules shall be deemed to provide the information
contemplated by, or otherwise qualify, the representations and warranties of the
Company set forth in the corresponding section or subsection of this Agreement
and any other section or subsection of Article III if and to the extent that it
is reasonably apparent on the face of the disclosure that it applies to such
other section or subsection of Article III.
(b) The information set forth in each section or subsection of
the Parent Disclosure Schedules shall be deemed to provide the information
contemplated by, or otherwise qualify, the representations and warranties of
Parent and Merger Sub set forth in the corresponding section or subsection of
this Agreement and any other section or subsection of Article IV if and to the
extent that it is reasonably apparent on the face of the disclosure that it
applies to such other section or subsection of Article IV.
[Signature Page Follows]
84
IN WITNESS WHEREOF, Parent, Merger Sub and the Company have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
ADVANCED MEDICAL OPTICS, INC.
By: /s/ James V. Mazzo
------------------------------------
Name: James V. Mazzo
Title: President and Chief Executive
Officer
VAULT MERGER CORPORATION
By: /s/ Richard A. Meier
------------------------------------
Name: Richard A. Meier
Title: Vice President and Treasurer
VISX, INCORPORATED
By: /s/ Elizabeth H. Davila
------------------------------------
Name: Elizabeth H. Davila
Title: Chief Executive Officer