Exhibit 2.1
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STOCK PURCHASE AGREEMENT
AMONG
ST. JUDE MEDICAL, INC.,
ST. JUDE MEDICAL JAPAN K.K.,
GETZ BROS. & CO. ZUG INC.,
GETZ INTERNATIONAL, INC.
AND
MULLER & PHIPPS (JAPAN) LTD.
DATED AS OF
SEPTEMBER 17, 2002 (USA)
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I. PURCHASE AND SALE OF SHARES AND CLOSING.............................1
1.1 The Tender Offer...........................................1
1.2 Shareholder Meeting and Stock Transfer.....................2
1.3 Purchase and Sale..........................................3
1.4 Purchase Price.............................................3
1.5 Purchase Price Adjustment..................................3
1.6 The Closing................................................4
1.7 Transfer by Getz Zug Following Tender Offer................5
II. REPRESENTATIONS AND WARRANTIES OF SELLERS...........................5
2.1 Title to Shares............................................5
2.2 Incorporation; Power and Authority.........................5
2.3 Valid and Binding Agreement................................6
2.4 No Breach..................................................6
2.5 Getz Intl Balance Sheet....................................6
III. REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY................6
3.1 Incorporation; Power and Authority.........................6
3.2 No Breach..................................................6
3.3 Capitalization.............................................7
3.4 Subsidiaries...............................................7
3.5 Financial Statements.......................................7
3.6 Absence of Certain Developments............................7
3.7 Property...................................................8
3.8 Tax Matters................................................9
3.9 Material Contracts.........................................9
3.10 Litigation................................................10
3.11 Insurance.................................................10
3.12 Compliance with Laws; Governmental Authorizations.........10
3.13 Environmental Matters.....................................11
3.14 Warranties................................................12
3.15 Employees.................................................13
3.16 Employee Benefits.........................................13
3.17 Suppliers.................................................13
3.18 Brokerage.................................................13
3.19 Securities Law Compliance.................................14
IV. REPRESENTATIONS AND WARRANTIES OF BUYER AND ST. JUDE...............14
4.1 Incorporation; Power and Authority........................14
4.2 Valid and Binding Agreement...............................14
4.3 No Breach.................................................14
4.4 Brokerage.................................................14
V. AGREEMENTS OF SELLERS..............................................14
5.1 Conduct of the Business...................................14
5.2 Access; Updating of Disclosure Schedule...................16
5.3 Waivers; Payment of Indebtedness..........................16
5.4 Conditions................................................17
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5.5 Consents and Authorizations...............................17
5.6 Nondisparagement..........................................17
5.7 Non-Hire..................................................17
5.8 Litigation Support........................................17
5.9 Confidentiality...........................................18
5.10 Transfer of Certain Trademark Rights......................18
5.11 No Encumbrance of Shares..................................19
5.12 Getz Intl Net Worth.......................................19
VI. AGREEMENTS OF BUYER AND ST. JUDE...................................19
6.1 Filings and Submissions...................................19
6.2 Buyer Shareholders Meeting................................19
6.3 Inspection................................................19
6.4 Section 338 Election......................................19
VII. CONDITIONS TO CLOSING..............................................20
7.1 Conditions to Buyer's Obligations........................20
7.2 Conditions to Sellers' Obligations.......................20
VIII. TERMINATION........................................................21
8.1 Termination...............................................21
8.2 Contract Extension........................................21
8.3 Effect of Termination.....................................22
IX. INDEMNIFICATION....................................................22
9.1 Indemnification by Sellers................................22
9.2 Third Party Actions.......................................23
9.3 Tax Adjustment............................................24
9.4 Sellers' Representative...................................24
X. ARBITRATION........................................................25
10.1 Disputes..................................................25
10.2 Arbitration...............................................25
10.3 Remedies..................................................26
XI. DEFINITIONS........................................................26
XII. GENERAL............................................................29
12.1 Press Releases and Announcements..........................29
12.2 Expenses..................................................29
12.3 Further Assurances........................................29
12.4 Cooperation...............................................29
12.5 Notices...................................................29
12.6 Assignment................................................31
12.7 No Third Party Beneficiaries..............................31
12.8 Severability..............................................31
12.9 Complete Agreement........................................31
12.10 English Language..........................................31
12.11 Signatures; Counterparts..................................31
12.12 Governing Law.............................................31
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12.13 Amendment and Waiver......................................32
12.14 Construction..............................................32
XIII. GUARANTY BY ST. JUDE...............................................32
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (this "AGREEMENT") is made as of
September 17, 2002, in the United States of America by and among St. Jude
Medical Japan K.K., a company organized under the laws of Japan ("BUYER"), St.
Jude Medical, Inc., a Minnesota corporation ("ST. JUDE"), Getz Bros. & Co. Zug
Inc., a company organized under the laws of Switzerland ("GETZ ZUG"), Getz
International, Inc., a Delaware corporation ("GETZ INTL"), and Muller & Phipps
(Japan) Ltd., a company organized under the laws of Japan ("M&P", and together
with Getz Zug and Getz Intl., "SELLERS"). Certain capitalized terms used but not
defined when first used herein are defined in Article XI.
RECITALS
WHEREAS, Getz Zug, a wholly owned subsidiary of Getz Intl, owns 72.18%
of the outstanding capital stock of Getz Bros. Co., Ltd., a company organized
under the laws of Japan (the "COMPANY").
WHEREAS, the remaining 27.82% of the Company's outstanding capital
stock is publicly held and registered with the Japan Securities Dealers
Association (the "JASDA").
WHEREAS, Sellers desire to sell, and Buyer desires to buy, 100% of the
outstanding capital stock of the Company (the "SHARES") on the terms and subject
to the conditions set forth in this Agreement (the "ACQUISITION").
WHEREAS, as a first step in the Acquisition, M&P, a wholly owned
subsidiary of Getz Intl, will initiate a cash tender offer for the issued and
outstanding Shares not owned by Getz Zug (the "TENDER OFFER").
WHEREAS, to complete the Acquisition, Sellers will cause the Company,
by exercising their voting rights at a general shareholders meeting of the
Company, to create a newly formed holding company of the Company organized under
the laws of Japan ("NEWCO") by means of a stock transfer (KABUSHIKI ITEN) (the
"STOCK TRANSFER"), whereby, subject to shareholder approval and compliance with
applicable legal procedures, all issued and outstanding Shares, including Shares
not tendered to and purchased by M&P pursuant to the Tender Offer, will also be
exchanged for shares of Newco, following which Sellers will use their reasonable
efforts to cause Newco to sell the Shares to Buyer pursuant to the terms and
conditions of this Agreement.
NOW, THEREFORE, the following agreement is made:
I. PURCHASE AND SALE OF SHARES AND CLOSING
1.1 The Tender Offer.
(a) M&P, as promptly as practicable, shall commence the Tender Offer
whereby M&P will offer to purchase for cash all of the Shares not otherwise held
by Sellers. M&P expressly reserves the right to increase the price per share
payable in the Tender Offer and to make any
other change or changes in the terms or conditions of the Tender Offer,
including without limitation extending the expiration date.
(b) M&P shall, on the terms of the Tender Offer, accept for payment
Shares validly tendered as soon as practicable, and pay for accepted Shares as
promptly thereafter as reasonably practicable.
(c) On the date of commencement of the Tender Offer, M&P shall file
with the Kanto Local Financial Bureau a registration statement for the Tender
Offer (KOUKAI KAITSUKE TODOKEDESHO) and all other disclosure documents and
related public notices as are required to be filed by M&P with the Kanto Local
Financial Bureau in connection with the Tender Offer in accordance with
applicable securities Laws (collectively, the "TENDER OFFER Documents"). Sellers
will take all steps necessary to ensure that the Tender Offer Documents comply
in all material respects with the provisions of applicable Japanese Laws from
the date filed with the Kanto Local Financial Bureau until the completion of the
Tender Offer. Buyer shall provide M&P with such information on Buyer and its
parent company to the extent required by applicable Japanese Laws for inclusion
in the Tender Offer Documents and shall take all steps necessary to ensure that
all information provided by Buyer for inclusion in the Tender Offer Documents is
accurate.
(d) Sellers will use all reasonable efforts to cause the Board of
Directors of the Company to issue an opinion supporting the Tender Offer and to
take all steps necessary to file all documents required to be filed with the
Kanto Local Financial Bureau and the JASDA in connection with the Tender Offer
in accordance with applicable securities Laws.
1.2 Shareholder Meeting and Stock Transfer. Sellers shall cause the
Company to, as promptly as practicable following the acceptance for payment and
purchase of Shares by M&P pursuant to the Tender Offer:
(a) use all reasonable efforts to duly call, give notice of, convene
and hold a general shareholders meeting (the "SHAREHOLDERS MEETING"), to be held
as soon as practicable after the completion of the Tender Offer for the purpose
of considering and taking action upon the Stock Transfer;
(b) use all reasonable efforts to cause the Board of Directors of the
Company to recommend to the shareholders of the Company that they vote in favor
of the Stock Transfer; and
(c) use all reasonable efforts to promptly obtain the necessary
approvals by its shareholders of the Stock Transfer.
At such meeting, Sellers will vote all Shares owned by them in favor of approval
of the Stock Transfer. As promptly as practicable following the Shareholders
Meeting, Sellers shall, and shall cause the Company to, take all action
necessary to consummate the Stock Transfer, including without limitation the
filing of an extraordinary report (RINJI HOUKOKUSHO) with the Kanto Local
Financial Bureau, notification with the JASDA and the purchase of any Shares
held by a shareholder who notifies the Company of its objection to the Stock
Transfer prior to the Shareholders Meeting and requests the purchase of such
Shares in accordance with applicable Law. Buyer and St. Jude agree that when the
Stock Transfer takes effect the registration of the
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Shares with the JASDA shall be revoked and the Company will become a private
company. As promptly as practicable after the Stock Transfer takes effect,
Sellers shall use all reasonable efforts to (i) cause the Company to apply for
an exemption from its continuous disclosure obligations to the Prime Minister of
Japan pursuant to applicable securities Laws and (ii) cause the Board of
Directors of Newco to approve and adopt this Agreement, at which time Newco and
the parties hereto will execute an amendment to this Agreement whereby Newco
will become a party to this Agreement and be included within the definition of
"SELLERS".
1.3 Purchase and Sale. Promptly following (i) the Tender Offer; (ii)
the Stock Transfer; (iii) revocation of registration of the Shares with the
JASDA; and (iv) the grant to the Company of an exemption from its continuous
disclosure obligations, Sellers shall use all reasonable efforts to cause Newco
to, and Newco shall, convene a general shareholders meeting to approve the
Acquisition on the terms and subject to the conditions set forth in this
Agreement. At such meeting, Sellers will vote all shares of Newco owned by them
in favor of approval of the Acquisition. Subject to the approval of the
shareholders of Newco, Newco shall sell to Buyer, and Buyer agrees to purchase
from Newco for the Purchase Price, all of the issued and outstanding Shares.
Each Seller waives any co-sale rights, rights of first refusal or similar rights
that such Seller may have relating to Buyer's purchase of the Shares, whether
conferred by the Company's Organizational Documents, by Contract or otherwise.
1.4 Purchase Price.
(a) The aggregate purchase price (the "PURCHASE PRICE") for the Shares
is U.S.$220,000,000 payable on the Closing Date in Japanese yen at an exchange
rate equal to 122.2480 Japanese yen to one (1) U.S. dollar.
(b) If the Inspector (as defined in Section 6.3) submits an opinion to
the Buyer shareholders meeting to be held in accordance with Section 6.2 that
the Acquisition is unfair to Buyer but would be fair to Buyer at a purchase
price that is less than the Purchase Price set forth in Section 1.4(a) (the
"REDUCED BUYER PRICE"), or if the Inspector is unable to complete the inspection
and to submit an opinion to the Buyer shareholders meeting prior to the Closing
Date, then at the Closing (i) Buyer shall pay to Newco the Reduced Buyer Price
or, if the Inspector's opinion shall not have been issued to the Buyer
shareholders meeting, 499,999 Japanese yen and (ii) St. Jude and Buyer shall
cause St. Jude Medical Puerto Rico Holding B.V. to pay to Newco the deficiency
amount such that, at the Closing, Newco will receive the full Purchase Price set
forth in Section 1.4(a) and the Acquisition will not be voidable under Japanese
law as a result of the Inspector's opinion or lack of the Inspector's opinion.
All such payments will be made in accordance with Section 1.6(a)(ii)(A).
1.5 Purchase Price Adjustment. Except to the extent caused by or in any
way arising out of any act of Buyer or St. Jude, or any affiliate of either of
them (whether under the Distribution Agreement (as defined in Section 8.2) or
otherwise), if, between the date of this Agreement and the date of Closing
(inclusive), there is a change, effect, event or condition, which is not in the
Ordinary Course of Business and which results or is reasonably likely to result
in either (i) a material loss or decrease in the value of the Company or the
business of the Company or (ii) a material gain or increase in the value of the
Company or the business of the Company, Buyer and Sellers shall negotiate in
good faith an appropriate decrease or increase, as applicable, in the
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Purchase Price for the Shares. If all of the conditions set forth in Article VII
have been fulfilled or waived in accordance with this Agreement but the parties
cannot agree on such appropriate decrease or increase before Closing in
accordance with Section 1.6, the Closing shall proceed and the Purchase Price
shall be paid at the Closing, subject to the appropriate decrease or increase to
be subsequently determined by arbitration conducted pursuant to provisions of
Article X.
1.6 The Closing. If all of the conditions set forth in Article VII have
been fulfilled or waived in accordance with this Agreement, the closing of the
purchase and sale of the Shares from Newco to Buyer contemplated by this
Agreement (the "Closing") will take place at the offices of Mori Sogo on the
later of (i) the first business day following the later of (A) the date on which
the shareholders of Newco agree at a general meeting of Newco shareholders to
sell all of the Shares to Buyer or (B) the date on which the shareholders of
Buyer approve the acquisition of the Shares from Newco, or (ii) March 31, 2003,
or at such other place and on such other date as may be mutually agreed by Buyer
and Sellers' Representative (as defined in Section 9.4(a)). The date on which
the Closing occurs is referred to herein as the "Closing Date." On the Closing
Date:
(a) Subject to the conditions set forth in this Agreement:
(i) Sellers will deliver or cause to be delivered to Buyer:
(A) certificates representing all of the issued and
outstanding Shares, free and clear of all Encumbrances, duly
endorsed, in accordance with applicable Japanese Laws;
(B) a certificate of Sellers dated the Closing Date
stating that the conditions set forth in Section 7.1(a) have
been satisfied;
(C) a copy of the text of the resolutions adopted by
the Board of Directors (or similar body) of each Seller
authorizing the execution, delivery and performance of this
Agreement, certified by an appropriate officer of such Seller;
(D) the minute books, stock or equity records,
corporate seal and other materials related to the corporate
administration of the Company or any Subsidiary;
(E) resignations in writing (effective as of the
Closing Date) from such of the officers and directors of each
of the Company and the Subsidiaries as Buyer may have
requested prior to the Closing Date; and
(F) any instruments and documents necessary to effect
the Trademark Assignment (as defined in Section 5.10).
(ii) Buyer will deliver or cause to be delivered to Sellers or
Newco, as appropriate:
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(A) the Purchase Price by wire transfer of
immediately available funds to accounts that shall be
designated by Sellers to Buyer no later than three (3)
business days prior to the Closing Date;
(B) a certificate of Buyer dated the Closing Date
stating that the conditions set forth in Section 7.2(b) have
been satisfied; and
(C) a copy of the text of the resolutions adopted by
the Board of Directors of Buyer and St. Jude authorizing the
execution, delivery and performance of this Agreement,
certified by an appropriate officer of Buyer or St. Jude, as
appropriate.
(b) All items delivered by the parties at the Closing will be deemed to
have been delivered simultaneously, and no items will be deemed delivered or
waived until all have been delivered.
(c) Notwithstanding any investigation made by or on behalf of any of
the parties to this Agreement or the results of any such investigation, and
notwithstanding the fact of, or the participation of any of the parties to this
Agreement in, the Closing, the representations, warranties and agreements in
this Agreement will survive the Closing.
(d) The Confidentiality Agreement will terminate effective as of the
Closing Date.
(e) All actions to be taken by Buyer or Sellers in connection with
consummation of the transactions contemplated by this Agreement and all
certificates, opinions, instruments and other documents required to effect the
transactions contemplated by this Agreement will be in form and substance
reasonably satisfactory to the other.
1.7 Transfer by Getz Zug Following Tender Offer. Buyer acknowledges
that after completion of the Tender Offer Getz Zug may transfer its Shares or,
after the Stock Transfer, its shares in Newco, to Getz Intl. Such transfer shall
not be deemed a breach of any provision of this Agreement.
II. REPRESENTATIONS AND WARRANTIES OF SELLERS
Each Seller represents and warrants to Buyer as of the date of this
Agreement and as of the Closing Date that, as to such Seller, except as
described in the corresponding section of the Disclosure Schedule:
2.1 Title to Shares. As of the date hereof and subject to Section 1.7,
such Seller owns, of record and beneficially, the number of Shares listed
opposite such Seller's name on SCHEDULE 2.1, free and clear of any Encumbrance.
At the Closing, Buyer will obtain good and valid title to all Shares owned, of
record and beneficially, by such Seller as of the date hereof, free and clear of
any Encumbrance.
2.2 Incorporation; Power and Authority. Such Seller is duly organized,
validly existing and, if applicable, in good standing under the laws of the
jurisdiction of its organization. Such Seller has all necessary power and
authority to execute, deliver and perform this Agreement, and,
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to the extent applicable, to perform the Tender Offer and to perform its
obligations under this Agreement in relation to the Stock Transfer.
2.3 Valid and Binding Agreement. The execution, delivery and
performance of this Agreement, and, to the extent applicable, the performance of
the Tender Offer and the performance of its obligations under this Agreement in
relation to the Stock Transfer, by such Seller has been duly and validly
authorized by all necessary corporate or equivalent action. This Agreement has
been duly executed and delivered by such Seller and constitutes the valid and
binding obligation of such Seller, enforceable against it in accordance with its
terms, subject to the Remedies Exception.
2.4 No Breach. The execution, delivery and performance of this
Agreement and, to the extent applicable, the performance of the Tender Offer and
the performance of its obligations under this Agreement in relation to the Stock
Transfer, by such Seller will not (a) contravene any provision of the
Organizational Documents of such Seller; (b) violate or conflict with any Law,
Governmental Order or Governmental Authorization; (c) result in the creation of
any Encumbrance upon the Shares held by such Seller; or (d) require any
Governmental Authorization other than the filing of the Tender Offer Documents
with the Kanto Local Financial Bureau, except, with respect to clauses (a) and
(b), where such contravention, violation or conflict would not, individually or
in the aggregate, prevent such Seller from performing its obligations under this
Agreement.
2.5 Getz Intl Balance Sheet. Getz Intl has furnished Buyer with a true
and correct copy of its unaudited consolidated balance sheets as of December 31,
2001 and 2000, which balance sheets are accurate in all material respects.
III. REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY
Sellers, jointly and severally, represent and warrant to Buyer as of
the date of this Agreement and as of the Closing Date that, except as described
in the corresponding section of the Disclosure Schedule:
3.1 Incorporation; Power and Authority.
(a) Each of the Company and the Subsidiaries is a legal entity duly
organized, validly existing and, if applicable, in good standing under the laws
of the jurisdiction of its organization, and has all necessary power and
authority necessary to own, lease and operate its assets and to carry on its
business as now conducted and presently proposed to be conducted.
(b) Each of the Company and the Subsidiaries is in material compliance
with all provisions of its Organizational Documents.
3.2 No Breach. The performance of the Stock Transfer will not (a)
contravene any provision of the Organizational Documents of the Company or any
Subsidiary; (b) violate or conflict with any Law, Governmental Order or
Governmental Authorization; (c) result in the creation of any material
Encumbrance upon the Company or any Subsidiary or any of the assets of the
Company or any Subsidiary; or (d) require any Governmental Authorization,
except, with respect to clauses (a) and (b), where such contravention, violation
or conflict would not,
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individually or in the aggregate, prevent Sellers from performing their
obligations under this Agreement.
3.3 Capitalization. The authorized capital stock of the Company
consists solely of 148,962,000 shares of common stock ("Company Common Stock"),
of which, as of June 30, 2002, 38,202,500 shares are issued and outstanding, 560
shares of which are held in treasury. All issued and outstanding shares of
Company Common Stock are duly authorized, validly issued, fully paid and
non-assessable, free of preemptive rights or any other third-party rights and in
certificated form, and have been offered, sold and issued by the Company in
compliance with applicable securities and corporate Laws. There is no option,
warrant, call, subscription, convertible security, right (including preemptive
right) or Contracts of any character to which the Company is a party or by which
it is bound obligating the Company to issue, exchange, transfer, sell,
repurchase, redeem or otherwise acquire any shares of capital stock of the
Company or obligating the Company to grant, extend, accelerate the vesting of or
enter into any such option, warrant, call, subscription, convertible security,
right or Contract.
3.4 Subsidiaries. Except as listed on SCHEDULE 3.4, neither the Company
nor any Subsidiary owns any Subsidiary. For each of the Company's Subsidiaries,
SCHEDULE 3.4 shows the equity interests owned by the Company or any Subsidiary,
the names of the Persons owning such equity interests and the percentage of the
outstanding equity interests so owned. All issued and outstanding equity
interests of each Subsidiary of the Company are duly authorized, validly issued,
fully paid and non-assessable, free of preemptive rights or any other
third-party right except for those statutory preemptive rights arising, granted
or existing pursuant to the Japanese Commercial Code, free and clear of all
Encumbrances, and in certificated form and have been issued by such Subsidiary
in compliance with applicable securities and corporate Laws. There is no option,
warrant, call, subscription, convertible security, right (including preemptive
right except for statutory preemptive rights) or Contracts of any character to
which the Company or any Subsidiary is a party or by which it is bound
obligating any Subsidiary of the Company to issue, exchange, transfer, sell,
repurchase, redeem or otherwise acquire any equity interest of such Subsidiary
or obligating the Company or such Subsidiary to grant, extend, accelerate the
vesting of or enter into any such option, warrant, call, subscription,
convertible security, right or Contract.
3.5 Financial Statements. The Company has furnished Buyer with true and
correct copies of the unaudited balance sheets as of June 30, 2002 of each of
the Company, Medtechnica Co., Ltd., Vital Link Co., Ltd. and TechnoMed Co. Ltd.
(the "Latest Balance Sheets") and unaudited statements of earnings of each of
the Company, Medtechnica Co., Ltd., Vital Link Co., Ltd. and TechnoMed Co. Ltd.
for the six-month period then ended and unaudited shareholders' equity and cash
flows of the Company for the six-month period then ended (such statements and
the Latest Balance Sheets, the "Latest Financial Statements") and the
consolidated English-language balance sheets of the Company translated from the
audited consolidated Japanese-language balance sheets of the Company, as of
December 31, 2001 and December 31, 2000 (collectively, the "Annual Balance
Sheets"). The Latest Financial Statements and the Annual Balance Sheets are
accurate in all material respects. TechnoMed Co. Ltd. has no material
liabilities.
3.6 Absence of Certain Developments. Since December 31, 2001:
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(a) neither the Company nor any Subsidiary has sold, leased,
transferred or assigned any of its assets, tangible or intangible, involving
more than (Y)50,000,000 other than for a fair consideration in the Ordinary
Course of Business;
(b) neither the Company nor any Subsidiary has entered into any
Contract (or series of related Contracts) involving more than (Y)50,000,000
other than in the Ordinary Course of Business;
(c) no party (including the Company or any Subsidiary) has accelerated,
suspended, terminated, modified or canceled any Contract (or series of related
Contracts) involving more than (Y)50,000,000, to which the Company or any
Subsidiary is a party or by which any of them is bound other than in the
Ordinary Course of Business;
(d) neither the Company nor any Subsidiary has declared, set aside or
paid any dividend or made any distribution with respect to its capital stock or
equity interests, whether in cash or in kind (other than routine interim or
annual dividends to all shareholders of the Company consistent with past
practices and dividends or distributions from a Subsidiary to the Company or
another Subsidiary) or, except as listed on SCHEDULE 3.6 or as may be required
in connection with the Stock Transfer, redeemed, purchased or otherwise acquired
any of its capital stock or split, combined or reclassified any outstanding
shares of its capital stock;
(e) the Company has not loaned any funds, paid any money or transferred
any assets to any affiliate (other than among the Company and the Subsidiaries),
except for (i) payments of dividends or distributions permitted under Section
3.6(d), (ii) payments to affiliates for goods or services purchased or obtained
in the Ordinary Course of Business in arms' length transactions, and (iii)
payments required under the Contracts listed on SCHEDULE 3.6(E); and
(f) the Company has not made any material change in accounting
principles or practices from those utilized in the preparation of the Annual
Financial Statements.
3.7 Property.
(a) The real properties owned by the Company or any Subsidiary or
demised by the leases listed on SCHEDULE 3.7 constitute all of the real property
owned, leased (whether or not occupied and including any leases assigned or
leased premises sublet for which the Company remains liable), used or occupied
by the Company or any Subsidiary.
(b) The leases of real property listed on SCHEDULE 3.7 as being leased
by the Company or any Subsidiary (the "Leased Real Property") are in full force
and effect, and the Company has used the Leased Real Property undisturbed.
(c) The Company and, to Sellers' Knowledge, each Subsidiary owns good
and marketable title to each parcel of real property identified on SCHEDULE 3.7
as being owned by the Company or a Subsidiary (the "Owned Real Property" and,
together with the Leased Real Property, the "Real Property").
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(d) Neither the Company nor any Subsidiary has received any written
notice of any violation of any applicable zoning ordinance or other Law relating
to the Real Property, which violation has or reasonably could be expected to
have a Material Adverse Effect.
(e) Sellers have no Knowledge of material improvements made or
contemplated to be made by any Governmental Entity, the costs of which are to be
assessed as special Taxes or charges against any of the Real Property, and there
are no present assessments.
(f) Each of the Company and the Subsidiaries has good and marketable
title to, or a valid leasehold interest in, the buildings, machinery, equipment
and other tangible assets and properties shown in the Latest Balance Sheets or
acquired after the date thereof, free and clear of all Encumbrances, except for
Encumbrances listed on SCHEDULE 3.7 or disclosed in the Latest Financial
Statements and properties and assets disposed of in the Ordinary Course of
Business since the date of the Latest Balance Sheets.
3.8 Tax Matters.
(a) Each of the Company and any Tax Affiliate has (i) timely filed all
Returns required to be filed by it in respect of any Taxes, all which were
correct and complete in all material respects; (ii) timely paid all Taxes shown
to be due and payable on such Returns; (iii) established on the Latest Balance
Sheets reserves that are adequate for the payment of any Taxes accrued but not
yet due and payable through the date thereof; and (iv) complied with all Laws
relating to the withholding of Taxes and the payment thereof.
(b) SCHEDULE 3.8 lists all national, prefectural, provincial, state,
local and foreign income Returns filed with respect to the Company or any Tax
Affiliate for taxable periods ended on or after December 31, 2000, indicates
those Returns that have been audited and indicates those Returns that currently
are the subject of audit.
(c) No deficiency for any Taxes has been proposed, asserted or assessed
against the Company or any Tax Affiliate that has not been resolved and paid in
full.
3.9 Material Contracts.
(a) SCHEDULE 3.9 lists the following written Contracts to which the
Company or any Subsidiary is a party or by which it is bound (the "Material
Contracts"):
(i) all employment, agency or consulting Contracts;
(ii) all stock purchase, stock option and stock incentive
plans (other than Plans listed on SCHEDULE 3.16(A));
(iii) all distributor, reseller, dealer, manufacturer's
representative, sales agency or advertising agency and finder's
Contracts;
(iv) all franchise agreements;
9
(v) all leases of real or personal property (excluding any
lease with aggregate annual payments of (Y)50,000,000 or less);
(vi) any Contract for the sale of any capital assets valued in
excess of (Y)50,000,000;
(vii) any Contract for the sale of any minority equity
investments;
(viii) any Contract for capital expenditures in excess of
(Y)50,000,000;
(ix) all Contracts relating to the borrowing of money or to
mortgaging, pledging or otherwise placing an Encumbrance on any of the
assets of the Company or any Subsidiary;
(x) each warranty, guaranty or other similar undertaking with
respect to contractual performance extended by the Company or any
Subsidiary other than in the Ordinary Course of Business;
(xi) all Contracts relating to any surety bond or letter of
credit required to be maintained by the Company or any Subsidiary;
(xii) all license agreements, transfer or joint-use agreements
or other agreements related to Intellectual Property;
(xiii) any Contract for a partnership or joint venture;
(xiv) any and all other Contracts of the Company or any
Subsidiary that both were not entered into in the Ordinary Course of
Business and are material to the business, financial condition, results
of operations or prospects of the Company and the Subsidiaries taken as
a whole; and
(xv) any Contracts not listed above that contain
non-competition or non-solicitation provisions or that would otherwise
prohibit the Company or any Subsidiary from freely engaging in business
anywhere in the world or prohibiting the solicitation of the employees
or contractors of any other entity.
3.10 Litigation. SCHEDULE 3.10 lists all Litigation pending or, to the
Knowledge of any Seller, threatened against the Company or any Subsidiary and
each material Governmental Order to which the Company or any Subsidiary is
presently subject.
3.11 Insurance. SCHEDULE 3.11 lists all policies of insurance carried
by each of the Company and the Subsidiaries.
3.12 Compliance with Laws; Governmental Authorizations.
(a) To Sellers' Knowledge, each of the Company and the Subsidiaries
has:
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(i) complied in all material respects with all material Laws
and Governmental Orders, and
(ii) neither the Company nor any Subsidiary is relying on any
exemption from or deferral of any Law, Governmental Order or
Governmental Authorization that would not be available to it after the
Closing.
(b) To Sellers' Knowledge, each of the Company and the Subsidiaries has
in full force and effect all material Governmental Authorizations necessary to
conduct its business and own and operate its properties (including, but not
limited to, SHONIN issued by the Japan Ministry of Health for each product
distributed by the Company or any Subsidiary). To Sellers' Knowledge, each of
the Company and the Subsidiaries has complied in all material respects with all
Governmental Authorizations applicable to it.
(c) To Sellers' Knowledge, since the date one (1) year prior to the
date of this Agreement, neither the Company nor any Subsidiary has, in violation
of any applicable Law, offered, authorized, promised, made or agreed to make
gifts of money, other property or similar benefits (other than incidental gifts
of articles of nominal value) to any actual or potential customer, supplier,
governmental employee, political party, political party official or candidate,
official of a public international organization or any other Person in a
position to assist or hinder the Company or any Subsidiary in connection with
any actual or proposed transaction.
3.13 Environmental Matters.
(a) As used in this Section 3.13, the following terms have the
following meanings:
(i) "ENVIRONMENTAL COSTS" means any and all reasonable costs
and expenditures, including but not limited to any fees and expenses of
attorneys and of environmental consultants or engineers incurred in
connection with investigating, defending, remediating or otherwise
responding to any Release of Hazardous Materials, any violation or
alleged violation of Environmental Laws, any fees, fines, penalties or
charges associated with any Governmental Authorization, or any actions
necessary to comply with any Environmental Laws.
(ii) "ENVIRONMENTAL LAWS" means any Law, Governmental
Authorization or Governmental Order relating to pollution,
contamination, Hazardous Materials or protection of the environment in
effect at the time of execution of the Agreement.
(iii) "HAZARDOUS MATERIALS" means any dangerous, toxic or
hazardous pollutant, contaminant, chemical, waste, material or
substance as defined in or governed by any Law relating to such
substance or otherwise relating to the environment or human health or
safety, including without limitation any waste, material, substance,
pollutant or contaminant that subjects the owner or operator of the
Property to any Environmental Costs or liability under any
Environmental Law in effect at the time of execution of this Agreement.
(iv) "PROPERTY" means real property now owned, leased,
controlled or occupied by the Company or any Subsidiary.
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(v) "REGULATORY ACTIONS" means any Litigation with respect to
the Company or any Subsidiary brought or instigated by any Governmental
Entity in connection with any Environmental Costs, Release of Hazardous
Materials or any Environmental Law.
(vi) "RELEASE" means the spilling, leaking, disposing,
discharging, emitting, depositing, ejecting, leaching, escaping or any
other release or threatened release, however defined, whether
intentional or unintentional, of any Hazardous Material.
(vii) "THIRD-PARTY ENVIRONMENTAL CLAIMS" means any Litigation
(other than a Regulatory Action) based on negligence, trespass, strict
liability, nuisance, toxic tort or any other cause of action or theory
relating to any Environmental Costs, Release of Hazardous Materials or
any violation of Environmental Law.
(b) No Third-Party Environmental Claims or Regulatory Actions are
pending against the Company or any Subsidiary, and, to the Knowledge of Sellers,
no Third-Party Environmental Claims or Regulatory Actions are threatened against
the Company or any Subsidiary.
(c) Since the date two (2) years prior to the date of this Agreement,
to Sellers' Knowledge, the transfer, transportation or disposal of Hazardous
Materials by the Company or any Subsidiary to properties not owned, leased or
operated by the Company or any Subsidiary has been in compliance with applicable
Environmental Laws at the time of such transfer, transport or disposal.
(d) To Sellers' Knowledge, the Property is used and operated in
material compliance with all material Environmental Laws applicable to it.
(e) Each of the Company and the Subsidiaries has obtained all material
Governmental Authorizations relating to the Environmental Laws, to Sellers'
Knowledge, necessary for operation of the Company, each of which is listed on
SCHEDULE 3.13(E).
(f) The Company has delivered to Buyer all environmental reports and
investigations, if any, that any Sellers, the Company or any Subsidiary has
obtained or ordered with respect to the Company or any Subsidiary, or the
Property.
(g) No Encumbrance has been attached or filed against the Company or
any Subsidiary in favor of any Person for (i) any liability under or violation
of any applicable Environmental Law, (ii) any Release of Hazardous Materials or
(iii) any imposition of Environmental Costs.
3.14 Warranties. SCHEDULE 3.14 lists all material claims pending or, to
the Knowledge of any Sellers, threatened for breach of any warranty relating to
any products sold or services performed by the Company or any Subsidiary prior
to the date of this Agreement. Except as listed on SCHEDULE 3.14, none of the
products sold, leased or delivered by the Company or any Subsidiary has been the
subject of any product recall or return (whether voluntary or involuntary)
during the past five (5) years.
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3.15 Employees.
(a) To Sellers' Knowledge, each of the Company and the Subsidiaries has
complied at all times in all material respects with all applicable Laws relating
to employment and employment practices.
(b) Except as set forth in SCHEDULE 3.15(B), none of the employees of
the Company or any Subsidiary is covered by any collective bargaining agreement,
no collective bargaining agreement is currently being negotiated and, to
Sellers' Knowledge, no attempt is currently being made or threatened or during
the past five (5) years has been made to organize any employees of the Company
or any Subsidiary to form or enter into any labor union, employee association or
similar organization. There are no strikes or work stoppages pending or, to the
Knowledge of any Seller, threatened against or otherwise affecting the employees
or facilities of the Company or any Subsidiary. None of the Company or any
Subsidiary has experienced any labor strike or work stoppage involving its
employees within the past two (2) years.
(c) Each of the Company and the Subsidiaries has paid in full to all
employees all wages, salaries, bonuses and commissions due and payable to such
employees and have fully reserved on the Latest Financial Statements all amounts
for wages, salaries, bonuses and commissions due but not yet payable to such
employees as of the date thereof.
3.16 Employee Benefits.
(a) Except as set forth in SCHEDULE 3.16(A), with respect to all
employees and former employees of the Company or its Subsidiaries and all
dependents and beneficiaries of such employees and former employees, neither the
Company nor any Subsidiary maintains or contributes to any plan, fund, contract
program or arrangement (written or verbal) intended to provide: (i) medical,
surgical, health care, hospitalization, dental, vision, workers compensation,
life insurance, death, disability, legal services, severance, sickness or
accident benefits; (ii) pension, profit sharing, retirement, supplemental
retirement or deferred compensation benefits; (iii) bonus, incentive
compensation, stock option, stock appreciation rights, phantom stock or stock
purchase benefits or change in control benefits; or (iv) salary continuation,
unemployment, supplemental unemployment, termination pay, vacation or holiday
benefits (each a "PLAN").
(b) For the last two (2) years, neither the Company nor any Subsidiary
has incurred any liability for any Tax or civil penalty or any disqualification
of any employee benefit plan imposed by the Law of any jurisdiction in which the
Company or any Subsidiary does business.
3.17 Suppliers. SCHEDULE 3.17 lists the eight largest suppliers (other
than St. Jude Medical, Inc. and its affiliates) of the Company and the
Subsidiaries on a consolidated basis for each of the last two (2) fiscal years
and for the interim period ended on the date of the Latest Balance Sheets and
sets forth opposite the name of each such supplier the amount of purchases by
the Company and the Subsidiaries attributable to such supplier for each such
period.
3.18 Brokerage. Except for Goldman, Sachs & Co., the Tender Offer agent
and KPMG Corporate Finance K.K., no Person will be entitled to receive any
brokerage commission, finder's fee, fee for financial advisory services or
similar compensation in connection with the
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transactions contemplated by this Agreement based on any Contract made by or on
behalf of the Company for which Buyer or the Company is or could become liable
or obligated.
3.19 Securities Law Compliance. Since January 1, 2000 and through the
Closing Date, the Company has filed or will file, with the appropriate Japanese
regulatory authorities, including the Financial Services Agency, the Kanto Local
Financial Bureau, the Japan Securities Dealers Association and any other
applicable stock exchange, the forms and documents required to be filed by it
under Japanese securities Laws. These filings, including any financial
statements or schedules included therein, have complied or will comply in all
material respects with the applicable requirements of Japanese securities Laws.
IV. REPRESENTATIONS AND WARRANTIES OF BUYER AND ST. JUDE
Each of Buyer and St. Jude represents and warrants to Sellers as of the
date hereof and as of the Closing Date that:
4.1 Incorporation; Power and Authority. Each of Buyer and St. Jude is a
legal entity duly organized, validly existing and, if applicable, in good
standing under the laws of its jurisdiction of organization, with all necessary
power and authority to execute, deliver and perform this Agreement.
4.2 Valid and Binding Agreement. The execution, delivery and
performance of this Agreement by Buyer and St. Jude have been duly and validly
authorized by all necessary corporate action. This Agreement has been duly
executed and delivered by Buyer and St. Jude and constitutes the valid and
binding obligation of Buyer and St. Jude, enforceable against each in accordance
with its terms, subject to the Remedies Exception.
4.3 No Breach. The execution, delivery and performance of this
Agreement by Buyer and St. Jude will not (a) contravene any provision of the
Organizational Documents of Buyer or St. Jude; (b) violate or conflict with any
Law, Governmental Order or Governmental Authorization; or (c) require any
Governmental Authorization, except, with respect to clauses (a) and (b), where
such contravention, violation or conflict would not, individually or in the
aggregate, prevent Buyer or St. Jude, respectively, from performing its
obligations under this Agreement.
4.4 Brokerage. Except for Goldman, Sachs & Co., no Person will be
entitled to receive any brokerage commission, finder's fee, fee for financial
advisory services or similar compensation in connection with the transactions
contemplated by this Agreement based on any Contract made by or on behalf of
Buyer for which any Sellers is or could become liable or obligated.
V. AGREEMENTS OF SELLERS
Sellers, jointly and severally, agree with Buyer that:
5.1 Conduct of the Business. Unless otherwise consented to by Buyer in
writing, Sellers will cause the Company (which, for purposes of this Section
5.1, shall mean the Company and
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the Subsidiaries taken as a whole) to observe the following provisions from the
date of this Agreement to and including the Closing Date:
(a) The Company will conduct its business in all material
respects in the Ordinary Course of Business and in accordance with
applicable Law;
(b) The Company will (i) use reasonable efforts to preserve
its business organization and goodwill, keep available the services of
its officers, employees and consultants and maintain satisfactory
relationships with vendors, customers and others having business
relationships with it, and (ii) confer on a regular and frequent basis
with representatives of Buyer to report operational matters and the
general status of ongoing operations as requested by Buyer;
(c) The Company will not materially change any of its methods
of accounting in effect on the date of the Latest Balance Sheets, other
than changes required by GAAP;
(d) The Company will provide Buyer with its monthly
controller's reports promptly following the distribution of each such
report to the Company's management;
(e) The Company will not cancel or terminate its current
insurance policies or allow any of the coverage thereunder to lapse,
unless simultaneously with such termination, cancellation or lapse
replacement policies providing coverage equal to or greater than the
coverage under the canceled, terminated or lapsed policies for
substantially similar premiums are in full force and effect;
(f) The Company will file (or cause to be filed) at its own
expense, on or prior to the due date, all Returns for all Tax periods
ending on or before the Closing Date where the due date for such
Returns (taking into account valid extensions of the respective due
dates) falls on or before the Closing Date, prepared on a basis
consistent with the Returns of the Company prepared for prior Tax
periods, and will provide Buyer with copies of each income Tax Return
or election of the Company at least ten (10) days before filing such
Return or election; provided, however, that the Company will not file
any Return, election, claim for refund or information statement or
consent to any adjustment or otherwise compromise or settle any matters
with respect to Taxes to which Buyer reasonably objects;
(g) The Company will not (i) make or rescind any express or
deemed election or take any other discretionary position relating to
Taxes, (ii) amend any Return, (iii) settle or compromise any Litigation
relating to Taxes or (iv) change any of its methods of reporting income
or deductions for income Tax purposes from those employed in the
preparation of the last filed income Tax Returns unless there is a
change in applicable Laws;
(h) The Company will not declare, set aside or pay any
dividend or make any distribution with respect to its capital stock or
equity interests, whether in cash or in kind (other than routine
interim or annual dividends to all shareholders of the Company
consistent with past practices and dividends or distributions from a
Subsidiary to the Company or another Subsidiary); and
15
(i) The Company will not loan any funds, pay any money or
transfer any assets to any affiliate (other than among the Company and
the Subsidiaries), except for (i) payments of dividends or
distributions permitted under Section 5.1(h), (ii) payments to
affiliates for goods or services purchased or obtained in the Ordinary
Course of Business in arms' length transactions, and (iii) payments
required under the Contracts listed on SCHEDULE 5.1(I).
5.2 Access; Updating of Disclosure Schedule.
(a) From the date of this Agreement through the Closing Date, Sellers
will cause the Company (which, for purposes of this Section 5.2, shall mean the
Company and the Subsidiaries taken as a whole) to afford to Buyer and its
authorized representatives coordinated access at all reasonable times and upon
reasonable notice to the facilities, offices, properties, technology, processes,
books, business and financial records, officers, employees, business plans,
budget and projections, customers, suppliers and other information of each of
the Company and the Subsidiaries, and the work papers of Ernst & Young LLP, the
Company's independent accountants, to provide for an orderly transition
following the Closing; provided, however, that prior to the Closing Date Buyer
and its authorized representatives will not have access to information relating
to products distributed or proposed to be distributed by the Company other than
products distributed under the Distribution Agreement. In addition, Sellers will
cause each of the Company and the Subsidiaries, and their officers and
employees, to cooperate as appropriate (including providing introductions where
necessary) with Buyer to enable Buyer to contact third parties, including
suppliers, customers and prospective customers of the Company. The
Confidentiality Agreement, dated May 21, 2002 (the "CONFIDENTIALITY AGREEMENT"),
between an affiliate of the Company and St. Jude will apply with respect to
information obtained by Buyer under this Section 5.2. To implement this
Subsection 5.2(a), Sellers and Buyer will each appoint a due diligence
coordinator (the "COORDINATORS"). The initial Coordinators shall be Joe
McCullough for Buyer and Ray Simkins for Sellers. Each party may change its
Coordinator from time to time at its discretion by providing notice to the other
party. Any access will be arranged through the Coordinators as they may mutually
determine.
(b) After the Closing Date, Sellers will afford to Buyer, its
accountants and counsel, during normal business hours, upon reasonable request,
full access to the books and records of Sellers pertaining to each of the
Company and the Subsidiaries.
(c) No later than three (3) business days before the Closing, Sellers
may deliver to Buyer an updated Disclosure Schedule reflecting items arising or
changes occurring in connection with the operation of the business of the
Company and the Subsidiaries between the date of this Agreement and the Closing
Date (the "UPDATED DISCLOSURE SCHEDULE"). No additional disclosure made in the
Updated Disclosure Schedule shall be deemed to be a breach of any representation
or warranty of Sellers contained in this Agreement unless the item disclosed
results from conduct in violation of Section 5.1; PROVIDED, HOWEVER, that no
disclosure set forth in the Updated Disclosure Schedule will be deemed to cure
any inaccuracy or misrepresentation in the Disclosure Schedule that existed as
of the date of this Agreement.
5.3 Waivers; Payment of Indebtedness. To assure that Buyer obtains the
full benefit of this Agreement, effective as of the Closing Date, each Seller
will waive any claim it might have
16
against the Company or any Subsidiary, whether arising out of this Agreement or
otherwise, and irrevocably offers to terminate any Contract between such Seller
and the Company or any Subsidiary at no cost to the Company or any Subsidiary.
Sellers will cause each Seller and any Person controlled by any Seller to repay,
in full, prior to the Closing, all indebtedness owed to the Company or any
Subsidiary by such Person.
5.4 Conditions. Sellers will use their reasonable efforts to cause the
conditions set forth in Section 7.1 to be satisfied and to consummate the
transactions contemplated by this Agreement, including without limitation the
Tender Offer and Stock Transfer, as soon as reasonably possible and in any event
prior to the Closing Date. Such efforts may include taking action as required to
change the Company's fiscal year end in order to permit the revocation of the
registration of the Shares with the JASDA. Any such action shall not be deemed a
breach of any provision of this Agreement.
5.5 Consents and Authorizations. Sellers will cooperate with Buyer to
enable Buyer to obtain all Consents and Governmental Authorizations required for
the consummation of the transactions contemplated by this Agreement or which
could, if not obtained, adversely affect the conduct of the business of the
Company or any Subsidiary as it is presently conducted. Without limiting the
foregoing, Sellers will make or cause to be made all filings and submissions
required by them or the Company under any Law applicable to Sellers or the
Company required for the consummation of the transactions contemplated by this
Agreement.
5.6 Nondisparagement. No Seller will take any action that is designed
or intended to have the effect of discouraging any lessor, licensor, customer,
supplier or other business associate of the Company or any Subsidiary from
maintaining the same business relationships with each of the Company and the
Subsidiaries after the Closing as it maintained with each of the Company and the
Subsidiaries prior to the Closing. Each Seller will refer all customer inquiries
relating to the businesses of the Company or any Subsidiary to the Buyer from
and after the Closing.
5.7 Non-Hire.
(a) During the period that commences on the Closing Date and ends on
the second anniversary of the Closing Date, no Seller will knowingly employ (or
attempt to employ or interfere with any employment relationship with) any
employee of the Company or any Subsidiary.
(b) Except as otherwise permitted under the Distribution Agreement,
from and after the date of this Agreement until the later of (i) two years from
the Closing Date or (ii) two years from the date this Agreement is terminated,
neither St. Jude nor Buyer or any Subsidiary of either of them will knowingly
employ (or attempt to employ or interfere with any employment relationship with)
any employee of Sellers or any Subsidiary of Sellers (excluding any employee of
the Company or the Subsidiaries after the Closing Date).
5.8 Litigation Support. In the event and for so long as Buyer, the
Company or any Subsidiary is actively contesting or defending against any
Litigation in connection with any fact, situation, circumstance, status,
condition, activity, practice, plan, occurrence, event, incident,
17
action, failure to act or transaction existing or occurring on or prior to the
Closing Date involving the Company or any Subsidiary, each Seller will cooperate
in the contest or defense, make available its personnel and provide such
testimony and access to its books and records as may be necessary in connection
with the contest or defense, all at the sole cost and expense of Buyer (unless
and to the extent Buyer is entitled to indemnification therefor under Article
IX).
5.9 Confidentiality.
(a) From and after the Closing, Sellers will keep confidential and
protect, and will not disclose to any third party, (i) Intellectual Property
Rights, including product specifications, formulae, compositions, processes,
designs, sketches, photographs, graphs, drawings, samples, inventions and ideas,
past, current and planned research and development, current and planned
manufacturing and distribution methods and processes, customer lists, current
and anticipated customer requirements, price lists, market studies, business
plans, software, database technologies, systems, structures, architectures and
data (and related processes, formulae, compositions, improvements, devices,
know-how, inventions, discoveries, concepts, ideas, designs, methods and
information), (ii) any and all information concerning the business and affairs
(including historical financial statements, financial projections and budgets,
historical and projected sales, capital spending budgets and plans, the names
and backgrounds of key personnel, personnel training and techniques and
materials, however documented), and (iii) any and all notes, analyses,
compilations, studies, summaries and other material containing or based, in
whole or in part, on any information included in the foregoing ("Confidential
Information") of the Company or any Subsidiary. Sellers acknowledge that such
Confidential Information constitutes a unique and valuable asset of the Company
or a Subsidiary and represents a substantial investment of time and expense by
the Company or a Subsidiary, and that any disclosure of such Confidential
Information other than for the sole benefit of the Company or a Subsidiary would
be wrongful and could cause irreparable harm to the Company or a Subsidiary. The
foregoing obligations of confidentiality will not apply to any Confidential
Information that (i) is now or subsequently becomes generally publicly known,
other than as a direct or indirect result of the breach of this Agreement by
Sellers; (ii) is or becomes known to Sellers or their affiliates as a result of
contracts or business relationships between Sellers or their affiliates (other
than the Company and the Subsidiaries) and third parties; or (iii) is
independently developed by Sellers or their affiliates (other than the Company
and the Subsidiaries) without using Confidential Information of the Company or
the Subsidiaries.
(b) In the event that any Seller is requested or required (by Law, oral
question or request for information or documents in any legal proceeding,
interrogatory, subpoena, civil investigative demand or similar process) to
disclose any Confidential Information, that Seller will notify Buyer promptly of
the request or requirement so that Buyer may seek an appropriate protective
order or waive compliance with the provisions of this Section 5.9. If, in the
absence of a protective order or the receipt of a waiver hereunder, any Seller
is, on the advice of counsel, compelled to disclose any Confidential Information
to any tribunal or else stand liable for contempt, that Seller may disclose the
Confidential Information to the tribunal.
5.10 Transfer of Certain Trademark Rights. Concurrently with the
Closing, Sellers shall cause to be transferred to the Company or Buyer, as Buyer
shall designate, all of their rights
18
to use the trademarks, trade names and logos identified on SCHEDULE 5.10 solely
in connection with the sale of medical products in Japan (the "TRADEMARK
ASSIGNMENT").
5.11 No Encumbrance of Shares. Sellers shall not take any action to
encumber any Shares acquired by M&P in the Tender Offer or acquired by Newco in
the Stock Transfer.
5.12 Getz Intl Net Worth. Getz Intl agrees not to take any action to
cause its net worth to be less than $50,000,000 for a period of one (1) year
after the Closing Date and, thereafter, such amount as is reasonably necessary
to satisfy any indemnification claims that have been properly asserted by Buyer
under Article IX but remain unresolved at the end of such one year period until
the same are finally resolved.
VI. AGREEMENTS OF BUYER AND ST. JUDE
6.1 Filings and Submissions. Buyer agrees with Sellers that Buyer will
make or cause to be made all filings and submissions required by it under any
Law applicable to Buyer required for the consummation of the transactions
contemplated by this Agreement; PROVIDED, that neither Buyer nor St. Jude will
be required to dispose of, hold separately or make any change in, any portion of
its business or assets (or the business or assets of the Company or any
Subsidiary).
6.2 Buyer Shareholders Meeting. Buyer shall use all reasonable efforts
to convene a general shareholders meeting to approve the Acquisition on the
terms and subject to the conditions set forth in this Agreement on or prior to
the date of the Newco shareholders meeting set forth in Section 1.3 but in any
event no later than April 30, 2003. At such meeting, St. Jude shall cause the
parent entity of Buyer to vote all shares of Buyer owned by it in favor of
approval of the Acquisition.
6.3 Inspection. Promptly following the incorporation of Newco, Buyer
shall apply to the court for appointment of an inspector to undertake an
inspection of the Acquisition pursuant to Article 246 of the Commercial Code of
Japan (the "INSPECTOR"). Buyer shall use all reasonable efforts to cause the
Inspector to submit the final opinion that the Acquisition is not unfair for the
purposes of Article 246 of the Commercial Code of Japan to the Buyer
shareholders meeting set forth in Section 6.2.
6.4 Section 338 Election.
(a) Buyer agrees that no election will be made under Section 338(g) of
the Code or any comparable provision of prefectural, provincial, state, local or
foreign Law (A "SECTION 338 ELECTION"), with respect to Buyer's acquisition of
the Shares unless and until Buyer has first obtained the written consent of
Sellers to such election; PROVIDED, HOWEVER, that Sellers agree to consent to a
Section 338 Election proposed by Buyer if Sellers determine, in their sole
discretion and based upon Buyer's proposed allocation of the Purchase Price and
assumed liabilities among the assets of the Company and the Subsidiaries (the
"ALLOCATION"), that such Section 338 Election will not have any adverse effect
upon Sellers. If Sellers grant their advance written consent with respect to a
request by Buyer to make a Section 338 Election, and Buyer thereafter makes the
Section 338 Election, Buyer (and its affiliates, including St. Jude) and Sellers
(and their affiliates) will file their Tax Returns in a manner consistent with
the Allocation.
19
(b) In the event that the Stock Transfer does not occur on or prior to
December 31, 2002, and no Section 338 (g) Election is made for United States
income tax purposes, then from the Closing Date through and including the last
day of the taxable year of the Company within which the Closing occurs (as
determined for purposes of the Code), the Company shall not, without the prior
written consent of Sellers (which consent will be granted unless Sellers
determine in their sole discretion, that such action will have an adverse effect
on Sellers), (i) distribute as a dividend any cash or other property, or (ii)
undertake any transaction that would cause the Company to be deemed to hold
"United States property" as of the close of any quarter of such taxable year
(within the meaning of Section 956 of the Code).
VII. CONDITIONS TO CLOSING
7.1 Conditions to Buyer's Obligations. The obligation of Buyer to take
the actions required to be taken by it at the Closing is subject to the
satisfaction or waiver, in whole or in part, in Buyer's sole discretion (but no
such waiver will waive any right or remedy otherwise available under this
Agreement), of each of the following conditions at or prior to the Closing:
(a) Newco shall have acquired all of the issued and outstanding Shares,
the register of the Shares with the JASDA shall have been revoked, an exemption
from its continuous disclosure obligations shall have been granted to the
Company by the Prime Minister of Japan, and the sale of the Shares pursuant to
this Agreement shall have been duly approved by the shareholders of Newco in
accordance with applicable Law;
(b) The acquisition of the Shares pursuant to this Agreement shall have
been duly approved by the shareholders of Buyer in accordance with applicable
Law, PROVIDED that Buyer shall not be entitled to invoke this condition if, in
breach of their obligations contained in this Agreement, Buyer or St. Jude shall
have been the cause of the failure of this condition;
(c) No Law or Governmental Order shall have been enacted, entered,
enforced, promulgated, issued or deemed applicable to the transactions
contemplated by this Agreement by any Governmental Entity that prohibits the
Closing; and
(d) There shall have been no substantial impairment of the business of
the Company, except to the extent caused by or in any way arising out of any act
of Buyer or St. Jude, or any affiliate of either of them, whether pursuant to
the Distribution Agreement or otherwise.
7.2 Conditions to Sellers' Obligations. The obligation of Sellers to
take the actions required to be taken by them at the Closing is subject to the
satisfaction or waiver, in whole or in part, in Sellers' sole discretion (but no
such waiver will waive any rights or remedy otherwise available under this
Agreement), of each of the following conditions at or prior to the Closing:
(a) Newco shall have acquired all of the issued and outstanding Shares,
the register of the Shares with the JASDA shall have been revoked, the exemption
from its continuous disclosure obligations shall have been granted to the
Company by the Prime Minister of Japan, and the sale of the Shares pursuant to
this Agreement shall have been duly approved by the shareholders of Newco in
accordance with applicable Law, PROVIDED that Sellers shall not be entitled to
invoke this condition if, in breach of their obligations contained in this
Agreement, they shall have been the cause of the failure of this condition;
20
(b) The acquisition of the Shares pursuant to this Agreement shall have
been duly approved by the shareholders of Buyer in accordance with applicable
Law; and
(c) No Law or Governmental Order shall have been enacted, entered,
enforced, promulgated, issued or deemed applicable to the transactions
contemplated by this Agreement by any Governmental Entity that prohibits the
Closing.
VIII. TERMINATION
8.1 Termination. This Agreement may be terminated prior to the Closing:
(a) by the mutual written consent of Buyer and Sellers' Representative;
(b) by Sellers' Representative, if
(i) any of the conditions set forth in Section 7.2 have become
impossible to satisfy through no fault of Sellers; or
(ii) the transactions contemplated by this Agreement have not
been consummated on or before June 30, 2003; PROVIDED that Sellers'
Representative will not be entitled to terminate this Agreement
pursuant to this Section 8.1(b)(ii) if Sellers' failure to comply fully
with their obligations under this Agreement has prevented the
consummation of the transactions contemplated by this Agreement.
(c) by Buyer, if
(i) the Tender Offer shall have terminated or expired in
accordance with its terms without M&P having accepted for payment in
accordance with the terms of the Tender Offer any Shares properly
tendered;
(ii) the Stock Transfer shall not have been approved and
adopted at the Shareholders Meeting;
(iii) the Acquisition shall not have been approved and adopted
at the Newco general shareholder meeting;
(iv) the transactions contemplated by this Agreement have not
been consummated on or before June 30, 2003; PROVIDED that Buyer will
not be entitled to terminate this Agreement pursuant to this Section
8.1(c)(iv) if Buyer's failure to comply fully with its obligations
under this Agreement has prevented the consummation of the transactions
contemplated by this Agreement; or
(v) any of the conditions set forth in Section 7.1 have become
impossible to satisfy through no fault of Buyer.
8.2 Contract Extension. On January 7, 2001, the Company and St. Jude
entered into an International Sales Agreement--Japan ("Distribution Agreement")
for the distribution of heart valves and cardiac pacing products by the Company
in Japan. The Distribution Agreement
21
currently expires on December 31, 2009, and St. Jude has the right, at its
option, to terminate the Distribution Agreement, in whole or in part, as early
as June 30, 2004. Given the importance of the distribution of heart valves and
cardiac pacing products to the Company, if not for these negotiations for an
Acquisition of the Shares by Buyer, the Company would be taking steps to seek
potential replacements for the St. Jude lines of products covered by the
Distribution Agreement and to otherwise provide for a transition at the
conclusion of the Distribution Agreement. Because of these negotiations for an
Acquisition, Sellers and the Company have delayed taking steps to seek potential
replacement product lines or provide for a transition at the conclusion of the
Distribution Agreement. If this Agreement is terminated for any reason and the
Acquisition does not occur, St. Jude acknowledges that Sellers and the Company
could suffer a material financial loss because of their forbearance in taking
action to find other product lines or provide for a transition. Therefore, if
this Agreement is terminated for any reason without the completion of the
Acquisition, St. Jude agrees that each of the dates in the definition of "Term"
in Section 1, Sections 19.1 and 21.1, and Schedule B of the Distribution
Agreement will be extended for a period equal to the number of days between June
13, 2002, and the date this Agreement is terminated.
8.3 Effect of Termination. The right of termination under Section 8.1
is in addition to any other rights Buyer or Sellers may have under this
Agreement or otherwise, and the exercise of a right of termination will not be
an election of remedies and will not preclude an action for breach of this
Agreement. If this Agreement is terminated pursuant to Section 8.1, and provided
Buyer is not otherwise in material breach of this Agreement, Buyer, upon written
notice to Sellers given within thirty (30) days after Sellers' Representative,
on the one hand, or Buyer, on the other hand, notifies the other of its
intention to terminate this Agreement, shall have the right to purchase from
Sellers, and Sellers shall be obligated to sell to Buyer, all of the Shares
owned beneficially or of record by Sellers for a prorated Purchase Price
determined by multiplying the Purchase Price by a fraction, the numerator of
which is the number of Shares purchased by Buyer and the denominator of which is
the total number of Shares. The sale and purchase of such Shares shall take
place as soon as practically possible and shall be consummated subject to the
applicable Law. If this Agreement is terminated, all continuing obligations of
the parties under this Agreement will terminate except that Article X, this
Section 8.3 and Sections 12.1 (press releases), 12.2 (expenses), 12.12
(governing law), and the Confidentiality Agreement will survive indefinitely
unless sooner terminated or modified by the parties in writing.
IX. INDEMNIFICATION
9.1 Indemnification by Sellers.
(a) Sellers agree, jointly and severally, to indemnify in full Buyer,
St. Jude, and each of the Company and the Subsidiaries (collectively, for
purposes of this Article IX only, "BUYER") and hold it harmless against any Loss
arising from, relating to or constituting (i) any breach or inaccuracy in any of
the representations and warranties of Sellers contained in this Agreement as the
same may be brought down to the Closing Date, or (ii) any breach of any of the
agreements of any Sellers contained in this Agreement (collectively, "BUYER
LOSSES"). In calculating the dollar amount attributable to any Buyer Loss, any
materiality qualifications included in the representations and warranties in
this Agreement shall be disregarded.
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(b) Sellers will be liable to Buyer for Buyer Losses only if the
aggregate amount of all Buyer Losses exceeds U.S.$2,500,000 (the "BASKET
AMOUNT"), in which case Sellers will be liable for the Buyer Losses that exceed
the Basket Amount; PROVIDED, HOWEVER, that Buyer Losses attributable to any
misrepresentation or inaccuracy in Section 2.1 or any intentional breach of any
of the agreements of any Sellers contained in this Agreement shall not be
subject to the Basket Amount but shall be indemnified in full, subject to
Section 9.1(c).
(c) Sellers will not be required to pay Buyer for aggregate Buyer
Losses in excess of U.S.$50,000,000 (the "CAP"); PROVIDED, HOWEVER, that Buyer
Losses attributable to any misrepresentation or inaccuracy in Section 2.1 or any
intentional breach of any of the agreements of any Sellers contained in this
Agreement shall not be subject to the Cap but shall be indemnified in full.
(d) If Buyer has a claim for indemnification under this Section 9.1,
Buyer will deliver to Sellers' Representative one or more written notices of
Buyer Losses prior to the first anniversary of the Closing Date, except for
Buyer Losses arising from a breach or inaccuracy in the representations and
warranties made in Section 3.8 for which Buyer will deliver written notice of
Buyer Losses prior to three months after the expiration of the applicable
statute of limitations. Sellers will have no liability under this Section 9.1
unless the written notices required by the preceding sentence are given in a
timely manner. Any written notice will state in reasonable detail the basis for
such Buyer Losses to the extent then known by Buyer and the nature of the Buyer
Loss for which indemnification is sought, and it may state the amount of the
Buyer Loss claimed. Sellers' Representative will notify Buyer whether it
disputes a claim within ninety (90) days after receipt of Buyer's written
notice. If Sellers' Representative does not timely dispute the claim, Sellers
will pay the amount of the Buyer Loss specified in Buyer's notice within ten
(10) days thereafter or, if the amount thereof is not specified in Buyer's
notice, within ten (10) days after the amount thereof is determined. If Sellers'
Representative has timely disputed the liability of Sellers with respect to such
claim, Sellers' Representative and Buyer will proceed in good faith to negotiate
a resolution of such dispute. If a written notice does not state the amount of
the Buyer Loss claimed, such omission will not preclude Buyer from recovering
from Sellers the amount of the Buyer Loss with respect to the claim described in
such notice if any such amount is promptly provided after it is determined. In
order to assert its right to indemnification under this Article IX, Buyer will
not be required to provide any notice except as provided in this Section 9.1(d).
(e) Sellers will pay the amount of any Buyer Loss to Buyer within ten
(10) days following the determination of Sellers' liability for and the amount
of a Buyer Loss (whether such determination is made pursuant to the procedures
set forth in this Section 9.1, by agreement between Buyer and Sellers'
Representative or by arbitration award).
9.2 Third Party Actions. Buyer shall promptly notify Sellers'
Representative of the assertion or institution by a third party, including a
Governmental Entity, of any claim, action, arbitration, mediation, hearing,
investigation, proceeding or suit that may give rise to Buyer Losses for which
Buyer could be entitled to indemnification hereunder (a "THIRD PARTY ACTION").
Sellers' Representative shall be entitled to defend such Third Party Action on
behalf of Buyer, at the sole cost and expense of Sellers, by giving notice of
the intention to so defend to Buyer within 20 business days after Buyer notifies
Sellers' Representative of such Third Party Action.
23
Such defense will be conducted by reputable attorneys retained by Sellers'
Representative. Buyer will be entitled at any time, at its own cost and expense,
to participate in such defense and to be represented by attorneys of its own
choosing, provided that if Buyer elects to so participate, Buyer will cooperate
with Sellers in the conduct of such defense. Whether or not Buyer participates
in such defense, Buyer will cooperate with Sellers to the extent reasonably
requested by Sellers in the defense of such Third Party Action, including
providing reasonable access (upon reasonable notice) to the books, records and
employees of the Buyer if relevant to the defense of such Third Party Action;
provided that such cooperation will not unduly disrupt the operations of the
business of Buyer or cause Buyer to waive any statutory or common law
privileges, breach any confidentiality obligations owed to third parties or
otherwise cause any Confidential Information of Buyer to become public. If at
any time Buyer reasonably determines that Sellers' Representative is not
adequately representing or, because of a conflict of interest, may not
adequately represent any interests of Buyer, Buyer will be entitled to conduct
its own defense and to be represented by attorneys of its own choosing. Neither
Buyer nor Sellers may concede, settle or compromise any Third Party Action
without the consent of the other party, which consent will not be unreasonably
withheld. Notwithstanding the foregoing, if (i) the subject matter of a Third
Party Action relates to the ongoing business of Buyer, which Third Party Action,
if decided against Buyer, would materially adversely affect the ongoing business
or reputation of Buyer and (ii) Buyer is unwilling to consent to a settlement of
such Third Party Action negotiated by Sellers that provides for a complete
release of Buyer, then Buyer shall immediately assume the defense of such Third
Party Action and Sellers thereafter will have no responsibility to indemnify
Buyer for any Buyer Losses arising from such Third Party Action.
9.3 Tax Adjustment. Any payment to Buyer under this Article IX will be,
for Tax purposes, to the extent permitted by Law, an adjustment to the Purchase
Price.
9.4 Sellers' Representative.
(a) Sellers appoint Henry J. West (or any person appointed as a
successor Sellers' Representative pursuant to Section 9.4(b)) as their
representative and agent under this Agreement ("SELLERS' REPRESENTATIVE").
(b) Until all obligations under this Agreement have been discharged
(including all indemnification obligations under this Article IX), Getz Intl
may, from time to time upon written notice to Sellers' Representative and Buyer,
remove Sellers' Representative or appoint a new Sellers' Representative upon the
death, incapacity, resignation or removal of Sellers' Representative. If, after
the death, incapacity, resignation or removal of Sellers' Representative, a
successor Sellers' Representative has not been appointed by Sellers within
fifteen (15) business days after a request by Buyer, Buyer will have the right
to appoint a Sellers' Representative to fill any vacancy so created by written
notice of such appointment to Sellers.
(c) Sellers authorize Sellers' Representative to take any action and to
make and deliver any certificate, notice, consent or instrument required or
permitted to be made or delivered under this Agreement or under the documents
referred to in this Agreement, to waive any requirements of this Agreement or to
enter into one or more amendments or supplements to this Agreement that Sellers'
Representative determines in Sellers' Representative's sole and absolute
discretion to be necessary, appropriate or advisable, which authority includes
the authority to collect and
24
pay funds and dispute, settle, compromise and make all claims. The authority of
Sellers' Representative includes the right to hire or retain, at the sole
expense of Sellers, such counsel, investment bankers, accountants,
representatives and other professional advisors as Sellers' Representative
determines in Sellers' Representative's sole and absolute discretion to be
necessary, appropriate or advisable in order to perform this Agreement. Any
party will have the right to rely upon any action taken by Sellers'
Representative, and to act in accordance with such action without independent
investigation.
(d) Buyer will have no liability to any Seller or otherwise arising out
of the acts or omissions of Sellers' Representative or any disputes among
Sellers or with Sellers' Representative. Buyer may rely entirely on its dealings
with, and notices to and from, Sellers' Representative to satisfy any
obligations it might have under this Agreement or any other agreement referred
to in this Agreement or otherwise to Sellers.
X. ARBITRATION
10.1 Disputes. The parties agree to use their reasonable efforts to
resolve any controversy, claim or dispute of whatever nature arising between the
parties under this Agreement or in connection with the transactions contemplated
hereunder, including those arising out of or relating to the breach,
termination, enforceability, scope or validity hereof, whether such claim
existed prior to or arises on or after the Closing Date (a "DISPUTE"), through
negotiation or, upon failure of such negotiations, through such alternative
dispute resolution ("ADR") techniques as they may deem appropriate; PROVIDED,
HOWEVER, that any claim or request for interim, temporary or injunctive relief
may be immediately submitted to arbitration in accordance with Section 10.2. Any
Dispute that is not resolved by negotiation or through ADR within ninety (90)
days from the day the Dispute Notice (as hereafter defined) is given shall be
finally resolved by binding arbitration in accordance with Section 10.2. The
agreement to arbitrate contained in this Article X shall continue in full force
and effect despite the expiration, rescission or termination of this Agreement.
No party shall commence an arbitration proceeding pursuant to the provisions set
forth below unless such party shall first give a written notice (a "DISPUTE
NOTICE") to the other parties setting forth the nature of the Dispute and,
except as provided above, attempted to resolve the Dispute by negotiation and
ADR as provided herein.
10.2 Arbitration.
(a) Binding arbitration shall be conducted in accordance with such
rules as may be agreed upon by the parties, or failing agreement within thirty
(30) days after arbitration is demanded (the "ARBITRATION DEMAND"), in
accordance with the CPR Rules for Non-Administered Arbitration of the CPR
Institute for Dispute Resolution ("CPR") in effect on the date on which the
Arbitration Demand is sent, subject to any modifications contained in this
Agreement. The site of arbitration shall be (i) Chicago, Illinois if the
Arbitration Demand was given by Buyer, or (ii) Minneapolis, Minnesota, if the
Arbitration Demand was given by any Seller. The Dispute shall be resolved by one
arbitrator, who will be selected by the parties from the CPR Panels of
Distinguished Neutrals and who shall have experience in international
transactions. The arbitrator shall base the award on the applicable Law and
judicial precedent that would apply in accordance with Section 12.12 if the
Dispute were decided by a United States District Judge, and the arbitrator shall
have no authority to render an award that is inconsistent therewith; PROVIDED,
25
HOWEVER, that the foregoing shall not expand the statutory grounds to vacate the
award. The arbitrator shall have the right to appoint an independent expert
(including an independent accounting firm) and the costs and expenses of such
expert, together with the costs and expenses of the arbitrator, shall be borne
one-half by Sellers and one-half by Buyer. The award shall be in writing and
include the findings of fact and conclusions of Law upon which it is based.
Unless the parties agree otherwise, discovery will be limited to an exchange of
relevant documents. Depositions will not be taken except as needed in lieu of a
live appearance or upon mutual agreement of the parties. The arbitrator shall
resolve any discovery disputes. The arbitrator and counsel of record will have
the power of subpoena process as provided by the Federal Arbitration Act.
(b) Except as otherwise required by Law, the parties and the arbitrator
agree to keep confidential and not disclose to third parties any information or
documents obtained in connection with the arbitration process, including the
resolution of the Dispute. If a party fails to proceed with arbitration as
provided in this Agreement, or unsuccessfully seeks to stay the arbitration, or
fails to comply with the arbitration award, or is unsuccessful in vacating or
modifying the award pursuant to a petition or application for judicial review,
the other party or parties, as applicable, shall be entitled to be awarded
costs, including reasonable attorneys' fees, paid or incurred in successfully
compelling such arbitration or defending against the attempt to stay, vacate or
modify such arbitration award and/or successfully defending or enforcing the
award.
(c) Sellers submit to the exclusive jurisdiction of any state or
federal court sitting in Minneapolis, Minnesota, and Buyer submits to the
exclusive jurisdiction of any state or federal court sitting in Chicago,
Illinois, to compel arbitration or enforce or vacate any award entered in the
arbitration which such party(ies) respectively initiated, and all such claims
shall be heard and determined in such respective courts. Each of the parties
waives any defense of inconvenient forum to the maintenance of any such action
or proceeding.
10.3 Remedies. Each party hereby waives any and all rights it may have
to receive exemplary or punitive damages under this Agreement in the arbitration
proceedings with respect to any claim it may have against the other party, it
being agreed that no party shall be entitled to receive money damages in excess
of its actual compensatory damages, notwithstanding any contrary provision
contained in this Agreement or otherwise. The parties knowingly and voluntarily
waive their rights to have any Dispute tried and adjudicated by a judge or a
jury. Any claim or request for interim, temporary or injunctive relief shall be
exclusively submitted to arbitration.
XI. DEFINITIONS
"CODE" means the United States Internal Revenue Code of 1986, as
amended.
"CONSENT" means any authorization, consent, approval, filing, waiver,
exemption or other action by or notice to any Person.
"CONTRACT" means a contract, agreement, commitment or binding
understanding that is in effect as of the date of this Agreement or any time
after the date of this Agreement.
26
"DISCLOSURE SCHEDULE" means the schedule delivered by Sellers to Buyer
on or prior to the date of this Agreement that contains exceptions and
disclosures to the representations and warranties set forth in Article III of
this Agreement.
"ENCUMBRANCE" means any charge, claim, community property interest,
condition, equitable interest, lien, option, pledge, security interest, right of
first refusal or restriction of any kind, including any restriction on use,
voting, transfer, receipt of income or exercise of any other attribute of
ownership.
"GAAP" means Japanese generally accepted accounting principles, as in
effect from time to time.
"GOVERNMENTAL AUTHORIZATION" means any approval, consent, license,
permit, waiver, registration or other authorization issued, granted, given, made
available or otherwise required by any Governmental Entity or pursuant to Law.
"GOVERNMENTAL ENTITY" means any national, prefectural, provincial,
state, local, foreign, international or multinational entity or authority
exercising executive, legislative, judicial, regulatory, administrative or
taxing functions of or pertaining to government.
"GOVERNMENTAL ORDER" means any judgment, injunction, writ, order,
ruling, award or decree by any Governmental Entity or arbitrator.
"INTELLECTUAL PROPERTY" means all rights in patents, patent
applications, trademarks, service marks, trade names, corporate names,
copyrights, software, mask works, trade secrets, know-how and other intellectual
property rights.
"INTELLECTUAL PROPERTY RIGHTS" means (i) rights in patents, patent
applications and patentable subject matter, whether or not the subject of an
application, (ii) rights in trademarks, service marks, trade names, trade dress
and other designators of origin, registered or unregistered, (iii) rights in
copyrightable subject matter or protectable designs, registered or unregistered,
(iv) trade secrets, (v) rights in Internet domain names, uniform resource
locators and e-mail addresses, (vi) rights in semiconductor topographies (mask
works), registered or unregistered, (vii) know-how and (viii) all other
intellectual and industrial property rights of every kind and nature and however
designated, whether arising by operation of Law, Contract, license or otherwise.
"KNOWLEDGE," when used with respect to Sellers, means the actual
knowledge of any director or executive officer of Sellers, the Company or the
Subsidiaries.
"LAW" means any constitution, law, ordinance, principle of common law,
regulation, statute or treaty of any Governmental Entity.
"LITIGATION" means any claim, action, arbitration, mediation, audit,
hearing, investigation, proceeding, litigation or suit (whether civil, criminal,
administrative, investigative or informal) commenced, brought, conducted or
heard by or before, or otherwise involving, any Governmental Entity or
arbitrator or mediator.
27
"LOSS" means any Litigation, damage, deficiency, penalty, fine, cost,
amount paid in settlement, liability, obligation, Tax, Encumbrance, loss,
expense or fee, including court costs and reasonable attorney's fees and
expenses.
"MATERIAL ADVERSE EFFECT" means any change, effect, event or condition,
individually or in the aggregate, that has had, or, with the passage of time,
would have, a material adverse effect on the business, assets, properties,
condition (financial or otherwise), results of operations, prospects or
customer, supplier or employee relationships of the Company and its
Subsidiaries, taken as a whole.
"ORDINARY COURSE OF BUSINESS" means the ordinary course of business of
the Company and the Subsidiaries consistent with past custom and practice
(including with respect to quantity and frequency).
"ORGANIZATIONAL DOCUMENTS" means (i) the articles or certificate of
incorporation and the bylaws of a corporation, (ii) the partnership agreement
and any statement of partnership of a general partnership, (iii) the limited
partnership agreement and the certificate of limited partnership of a limited
partnership, (iv) the limited liability company agreement and articles or
certificate of formation of a limited liability company, (v) any charter,
regulations or similar document adopted or filed in connection with the
creation, formation or organization of a Person and (vi) any amendment to any of
the foregoing.
"PERSON" means any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union, Governmental
Entity or other entity.
"REMEDIES EXCEPTION," when used with respect to any Person, means
performance of such Person's obligations except to the extent enforceability may
be limited by applicable bankruptcy, insolvency, corporate reorganization, civil
rehabilitation, moratorium or other laws affecting the enforcement of creditors'
rights generally and by general equitable principles.
"RETURNS" means all returns, declarations, reports, estimates,
information returns and statements pertaining to any Taxes.
"SUBSIDIARY" means any Person in which 50% or more of the ownership
interests is owned, directly or indirectly, by another Person. When used without
reference to a particular entity, "Subsidiary" means a Subsidiary of the
Company.
"TAX AFFILIATE" means each of the Company and the Subsidiaries.
"TAXES" means all taxes, charges, fees, levies or other assessments,
including all net income, gross income, gross receipts, sales, use, consumption,
value-added, ad valorem, transfer, franchise, profits, license, withholding,
payroll, employment, social security, unemployment, excise, estimated,
severance, stamp, occupation, property or other taxes, customs duties, fees,
assessments or charges of any kind whatsoever, including all interest and
penalties thereon, and additions to tax or additional amounts imposed by any
Governmental Entity upon the Company or any Tax Affiliate.
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XII. GENERAL
12.1 Press Releases and Announcements. Any public announcement,
including any announcement to employees, customers or suppliers and others
having dealings with the Company, or similar publicity with respect to this
Agreement or the transactions contemplated by this Agreement, will be issued at
such time and in such manner as the parties may mutually determine and approve,
unless such announcement is required to carry out the transactions contemplated
under this Agreement; provided that in the event such announcement is necessary,
either party will notify the other in advance of such announcement.
Notwithstanding the foregoing, nothing contained herein will prevent Buyer, St.
Jude, Sellers, Company or its Subsidiaries from making disclosures to their
attorneys, accountants, bankers, investment bankers or advisors, or other
persons that are necessary or appropriate to carry out the transactions
contemplated in this Agreement.
12.2 Expenses. Except as agreed by the parties with respect to the fees
identified in a letter agreement, dated September 17, 2002, between St. Jude and
Getz Intl (the "FEE LETTER"), Sellers, on the one hand, and Buyer, on the other
hand, will each pay all expenses incurred by each of them (and, in the case of
Sellers, the expenses incurred by the Company and Sellers' Representative) in
connection with the Tender Offer, the Stock Transfer and the other transactions
contemplated by this Agreement, including legal, accounting, investment banking
and consulting fees and expenses incurred in negotiating, executing and
delivering this Agreement and the other agreements, exhibits, documents and
instruments contemplated by this Agreement. Sellers agree that neither the
Company nor any Subsidiary has or will bear any of Sellers' expenses in
connection with the Tender Offer, the Stock Transfer and the other transactions
contemplated by this Agreement if the contemplated transactions are concluded.
12.3 Further Assurances. On and after the Closing Date, Sellers and
Buyer will take all appropriate action and execute any documents, instruments or
conveyances of any kind that may be reasonably requested by the other party to
carry out any of the provisions of this Agreement.
12.4 Cooperation. After the Closing Date, Buyer and Sellers will make
available to the other, as reasonably requested, all information, records or
documents relating to Tax liabilities or potential Tax liabilities of the
Company with respect to (i) Tax periods ending on or prior to the Closing Date
and (ii) Tax periods beginning before the Closing Date and ending after the
Closing Date, but only with respect to the portion of such period up to and
including the Closing Date. Buyer and Sellers will preserve all such
information, records and documents until the expiration of any applicable
statute of limitations thereof. Buyer will prepare and provide to Sellers any
information or documents reasonably requested by Sellers for Sellers' use in
preparing or reviewing the Returns. Notwithstanding any other provision hereof,
each party will bear its own expenses in complying with the foregoing
provisions.
12.5 Notices. All notices, demands and other communications to be given
or delivered under or by reason of the provisions of this Agreement will be in
writing and will be deemed to have been given (i) when delivered if personally
delivered by hand (with written confirmation of receipt), (ii) when received if
sent by an internationally recognized overnight courier service (receipt
requested), (iii) ten business days after being mailed, if sent by first class
mail, return
29
receipt requested, or (iv) when receipt is acknowledged by an affirmative act of
the party receiving notice, if sent by facsimile, telecopy or other electronic
transmission device (provided that such an acknowledgement does not include an
acknowledgment generated automatically by a facsimile or telecopy machine or
other electronic transmission device). Notices, demands and communications to
Buyer and Sellers' Representative will, unless another address is specified in
writing, be sent to the address indicated below:
If to Buyer or St. Jude:
St. Jude Medical, Inc.
One Lillehei Plaza
St. Paul, MN 55117 USA
Attn: Kevin T. O'Malley, Esq.
Facsimile No. +1 (651) 481-7690
With a copy to:
Dorsey & Whitney LLP
Shiroyama MT Building, 9F
4-1-17 Toranomon, Minato-ku
Tokyo 105-0001, Japan
Attn: Christopher E. O'Brien
Facsimile No. +81 (3) 5473 5199
and an additional copy to:
Dorsey & Whitney LLP
50 South Sixth Street
Minneapolis, MN 55401 USA
Attn: Robert A. Kuhns, Esq.
Facsimile No. +1 (612) 340-8738
If to Sellers or Sellers' Representative:
Getz International, Inc.
c/o The Marmon Group, Inc.
225 W. Washington Street, 19th Floor
Chicago, Illinois 60606
Attn: Robert W. Webb, Esq.
Facsimile No. +1 (312) 845-8769
With a copy to:
Neal, Gerber & Eisenberg
Two North LaSalle St., Suite 2200
Chicago, Illinois 60602
Attn: Miranda K. Mandel, Esq.
Facsimile No. +1 (312) 269-1747
30
and an additional copy to:
Mori Sogo
NKK Building
1-1-2 Marunouchi, Chiyoda-ku
Tokyo 100-0005, Japan
Attn: Kanako Muraoka, Esq.
Facsimile No. +81 (3) 5223 7665
12.6 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder may be assigned by any party to this
Agreement without the prior written consent of the other parties to this
Agreement, except that Buyer may assign any of its rights under this Agreement
to an affiliate of Buyer, so long as Buyer remains responsible for the
performance of all of its obligations under this Agreement. Subject to the
foregoing, this Agreement and all of the provisions of this Agreement will be
binding upon and inure to the benefit of the parties to this Agreement and their
respective successors and permitted assigns.
12.7 No Third Party Beneficiaries. Nothing expressed or referred to in
this Agreement confers any rights or remedies upon any Person that is not a
party or permitted assign of a party to this Agreement.
12.8 Severability. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
Law, but if any provision of this Agreement is held to be prohibited by or
invalid under applicable Law, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
12.9 Complete Agreement. This Agreement (including the Disclosure
Schedule and any Updated Disclosure Schedule), the Confidentiality Agreement and
the Fee Letter contain the complete agreement between the parties and supersede
any prior understandings, agreements or representations by or between the
parties, written or oral.
12.10 English Language. This Agreement has been drafted, negotiated,
and executed in the English language. If Sellers have this Agreement translated
into Japanese, such translation shall be at the Sellers' own expense and with
the understanding that the original English version of this Agreement shall
govern. All notices, including Dispute Notices, shall be in English and all
arbitration proceedings shall be conducted in English.
12.11 Signatures; Counterparts. This Agreement may be executed in one
or more counterparts, any one of which need not contain the signatures of more
than one party, but all such counterparts taken together will constitute one and
the same instrument. A facsimile signature will be considered an original
signature.
12.12 Governing Law. THE DOMESTIC LAW, WITHOUT REGARD TO CONFLICTS OF
LAWS PRINCIPLES, OF THE STATE OF MINNESOTA WILL GOVERN
31
ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY AND INTERPRETATION OF THIS
AGREEMENT AND THE PERFORMANCE OF THE OBLIGATIONS IMPOSED BY THIS AGREEMENT,
EXCEPT TO THE EXTENT THAT PROCEDURAL MATTERS RELATING TO THE TENDER OFFER, THE
STOCK TRANSFER, THE ACQUISITION OR THE ORGANIZATION OF, OR ACTIONS TO BE TAKEN
BY, A JAPANESE ENTITY ARE GOVERNED BY OR REQUIRED TO BE TAKEN IN ACCORDANCE WITH
JAPANESE LAW.
12.13 Amendment and Waiver. This Agreement may not be amended, nor may
any provision of this Agreement or any default, misrepresentation, or breach of
warranty or agreement under this Agreement be waived, except in writing executed
by all of the parties hereto. Notwithstanding the foregoing, any amendment or
waiver executed by Sellers' Representative shall be deemed to have been executed
by each of the Sellers except as otherwise provided in Section 9.4.
12.14 Construction. The parties and their respective counsel have
participated jointly in the negotiation and drafting of this Agreement. In
addition, each of the parties acknowledges that it is sophisticated and has been
advised by experienced counsel and, to the extent it deemed necessary, other
advisors in connection with the negotiation and drafting of this Agreement. In
the event an ambiguity or question of intent or interpretation arises, this
Agreement will be construed as if drafted jointly by the parties and no
presumption or burden of proof will arise favoring or disfavoring any party by
virtue of the authorship of any of the provisions of this Agreement. The
headings preceding the text of articles and sections included in this Agreement
and the headings to the schedules and exhibits are for convenience only and are
not be deemed part of this Agreement or given effect in interpreting this
Agreement. The word "including" means "including without limitation." The use of
the masculine, feminine or neuter gender or the singular or plural form of words
will not limit any provisions of this Agreement. A statement in this Agreement
that a copy of an item has been delivered means a true and correct copy of the
writing has been delivered.
XIII. GUARANTY BY ST. JUDE
As an inducement to and in consideration of Sellers entering into this
Agreement, St. Jude, being the ultimate parent of Buyer, hereby expressly,
unconditionally, and irrevocably guarantees Buyer's performance of all of its
duties, obligations, and agreements under the Agreement, including (without
limitation) payment of all of Buyer's obligations under the Agreement. St. Jude
agrees that Sellers shall not be required to take any action whatsoever against
Buyer before St. Jude's liability attaches hereunder and that the liability of
St. Jude hereunder shall immediately attach and accrue upon default or breach of
Buyer with respect to any of its duties, obligations, and agreements under the
Agreement.
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IN WITNESS WHEREOF, Buyer, St. Jude and Sellers have executed this
Stock Purchase Agreement as of the date first above written.
BUYER: SELLERS:
ST. JUDE MEDICAL JAPAN K.K. GETZ BROS. AND CO. ZUG INC.
By: /s/ Kevin T. O'Malley By: /s/ R. C. Gluth
----------------------------- --------------------------------
Name: Kevin T. O'Malley Name: R. C. Gluth
----------------------------- --------------------------------
Title: Director Title: Director, Vice President and
----------------------------- Treasurer
--------------------------------
ST. JUDE MEDICAL, INC. GETZ INTERNATIONAL, INC.
By: /s/ Daniel J. Starks By: /s/ Robert K. Lorch
-------------------- -------------------------------
Title: President and COO Name: Robert K. Lorch
----------------------------- -------------------------------
Title: Vice President, Chief Financial
Officer
-------------------------------
MULLER & PHIPPS (JAPAN) LTD.
By: /s/ Raymond Sipkins
-------------------------------
Name: Raymond Sipkins
-------------------------------
Title: Director
-------------------------------
33
DISCLOSURE SCHEDULE TO THE STOCK PURCHASE AGREEMENT
Schedule 2.1 Good Title to Shares
Schedule 3.1 Incorporation
Schedule 3.4 Subsidiaries
Schedule 3.5 Statements
Schedule 3.6 Absence of Certain Developments
Schedule 3.7 Real Property
Schedule 3.8 Taxes
Schedule 3.9 Material Contracts
Schedule 3.10 Litigation
Schedule 3.11 Insurance
Schedule 3.14 Warranties
Schedule 3.16 Employee Benefits
Schedule 3.17 Suppliers
Schedule 5.1 Conduct of the Business
Schedule 5.10 Trademarks
St. Jude Medical, Inc. agrees to furnish supplementally copies of these
schedules to the Securities and Exchange Commission upon request.