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EXHIBIT 5
EXECUTION VERSION
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STOCK PURCHASE AGREEMENT
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Among
BOSTON SCIENTIFIC CORPORATION,
MORGAN STANLEY VENTURE PARTNERS III, L.P.,
MORGAN STANLEY VENTURE INVESTORS III, L.P.,
MORGAN STANLEY VENTURE PARTNER ENTREPRENEUR FUND, L.P.,
BANK OF AMERICA VENTURES,
and
BA VENTURE PARTNERS V
Dated as of June 28, 2001
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TABLE OF CONTENTS
Section Page
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions......................................................2
ARTICLE II
PURCHASE AND SALE; TenDER
SECTION 2.01 Purchase and Sale of the Shares and Warrants.....................3
SECTION 2.02 Purchase Price...................................................3
SECTION 2.03 Closing..........................................................3
SECTION 2.04 Closing Deliveries by the Sellers................................3
SECTION 2.05 Closing Deliveries by Purchaser..................................4
SECTION 2.06 Tender of Shares.................................................4
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
SECTION 3.01 Organization, Authority and Qualification of the Seller..........4
SECTION 3.02 No Conflict......................................................5
SECTION 3.03 Ownership of Securities..........................................5
SECTION 3.04 Absence of Litigation............................................6
SECTION 3.05 Brokers..........................................................6
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
SECTION 4.01 Organization and Authority of Purchaser..........................6
SECTION 4.02 No Conflict; Required Filings and Consents.......................6
SECTION 4.03 No Distribution..................................................7
SECTION 4.04 Brokers..........................................................7
SECTION 4.05 Financing........................................................7
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ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.01 Irrevocable Proxy................................................7
SECTION 5.02 No Disposition or Encumbrance of the Seller's
Shares and Warrants..............................................8
SECTION 5.03 No Solicitation of Transactions..................................8
SECTION 5.04 Company Board Representation.....................................9
SECTION 5.05 Liquidation Rights...............................................9
SECTION 5.06 Further Action; Reasonable Best Efforts..........................9
SECTION 5.07 Public Announcements.............................................9
SECTION 5.08 Limitations......................................................9
SECTION 5.09 Notification of Subsequent Acquisition of Securities.............9
SECTION 5.10 Grant of Option.................................................10
SECTION 5.11 Purchaser Obligation............................................10
ARTICLE VI
CONDITIONS TO CLOSING
SECTION 6.01 Conditions to the Closing.......................................10
SECTION 6.02 Conditions to Obligations of Purchaser..........................11
SECTION 6.03 Conditions to Obligations of Sellers............................11
ARTICLE VII
TERMINATION AND WAIVER
SECTION 7.01 Termination.....................................................12
SECTION 7.02 Effect of Termination...........................................12
SECTION 7.03 Waiver..........................................................12
ARTICLE VIII
GENERAL PROVISIONS
SECTION 8.01 Survival of Representations and Warranties......................13
SECTION 8.02 Expenses........................................................13
SECTION 8.03 Notices.........................................................13
SECTION 8.04 Severability....................................................14
SECTION 8.05 Entire Agreement; Assignment....................................14
SECTION 8.06 Parties in Interest.............................................15
SECTION 8.07 Specific Performance............................................15
SECTION 8.08 Governing Law...................................................15
SECTION 8.09 Waiver of Jury Trial............................................15
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SECTION 8.10 Headings........................................................15
SECTION 8.11 Counterparts....................................................15
SCHEDULE A Sellers: Share Ownership and Consideration
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STOCK PURCHASE AGREEMENT, dated as of June 28, 2001 (this "Agreement"),
among BOSTON SCIENTIFIC CORPORATION, a Delaware corporation ("Purchaser"),
MORGAN STANLEY VENTURE PARTNERS III, L.P., MORGAN STANLEY VENTURE INVESTORS III,
L.P., MORGAN STANLEY VENTURE PARTNERS ENTREPRENEUR FUND, L.P., each a Delaware
limited partnership (and collectively "MS"), BANK OF AMERICA VENTURES, a
California corporation and BA VENTURE PARTNERS V, a California limited
partnership (together with MS, a "Seller" and, collectively, the "Sellers"), as
stockholders of CARDIAC PATHWAYS CORPORATION, a Delaware corporation (the
"Company").
WHEREAS, each Seller is the record and beneficial owner of (i) the
number of shares of preferred stock, series B, par value $0.001 per share, of
the Company (together with any shares of preferred stock, series B, acquired
after the date hereof, the "Shares"), (ii) warrants to purchase the number of
Shares (together with any warrants to purchase Shares acquired after the date
hereof, the "Warrants") and (iii) the number of shares of common stock, par
value $0.001 per share, of the Company (the "Common Stock") (such shares of
Common Stock together with any shares of Common Stock acquired after the date
hereof, the "Common Shares") set forth next to such Seller's name on Schedule A
hereto;
WHEREAS, Purchaser and Adam Acquisition 2001 Inc., a Delaware
corporation and a wholly owned subsidiary of Purchaser ("Merger Sub"), are
separately entering into an Agreement and Plan of Merger dated as of the date
hereof (as amended from time to time, the "Merger Agreement") with the Company,
pursuant to which (i) Merger Sub agrees to commence a cash tender offer (as such
tender offer may hereafter be amended from time to time in accordance with the
Merger Agreement, the "Offer") to acquire all the issued and outstanding shares
of Common Stock for $5.267 per share of Common Stock (or any greater amount per
share of Common Stock paid pursuant to the Offer), and (ii) following the
consummation of the Offer and the transactions contemplated by this Agreement,
Merger Sub will merge with and into the Company (the "Merger"); and
WHEREAS, as contemplated by the Merger Agreement, and as a condition to
the Merger, (i) each Seller wishes to sell to Purchaser, and Purchaser wishes to
purchase from each Seller, such Seller's Shares and Warrants and (ii) each
Seller has agreed to tender its Common Shares in the Offer, upon the terms and
subject to the conditions set forth herein (such Shares, Warrants and Common
Shares being, collectively, "Securities") of such Seller;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements and covenants hereinafter set forth, Purchaser and the Sellers hereby
agree as follows:
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ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions. (a) Capitalized terms used but not otherwise
defined herein shall have the meanings described thereto in the Merger
Agreement. In addition, for purposes of this Agreement:
"affiliate" of a specified person means a person who, directly or
indirectly through one or more intermediaries, controls, is controlled by, or is
under common control with, such specified person.
"knowledge" of a specified person means the actual knowledge of any
executive officer of such person.
"Lien" means any lien, mortgage, deed or trust, pledge, hypothecation,
security interest, encumbrance, claim or charge of any kind, or any conditional
sale agreement or other agreement to create any of the foregoing.
"person" means an individual, corporation, partnership, limited
partnership, limited liability company, syndicate, person (including, without
limitation, a "person" as defined in Section 13(d)(3) of the Exchange Act),
trust, association or entity or government, political subdivision, agency or
instrumentality of a government.
"Purchase Price Bank Account" means, with respect to each Seller, a
bank account to be designated by such Seller in a written notice to Purchaser at
least five Business Days before the Closing.
"subsidiary" or "subsidiaries" of any person means an affiliate
controlled by such person, directly or indirectly, through one or more
intermediaries.
"1999 Agreement" means the Series B Purchase Agreement, dated as of May
20, 1999, among the Company and the several purchasers listed on the signature
pages thereof.
(b) the following terms have the following meaning set forth in the
Section set forth below:
Defined Term Location of Definition
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Action ss.3.04
Agreement Preamble
Cash Purchase Price ss.2.02
Closing ss.2.03
Closing Date ss.2.03
Common Shares Recitals
Company Preamble
Exercise Notice ss.5.10(b)
Governmental Authority ss.3.02(b)
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Irrevocable Proxy ss.5.01(a)
Law ss.3.02(a)
Merger Recitals
Merger Agreement Recitals
Merger Sub Recitals
MS Recitals
Offer Recitals
Option(s) ss.5.10(a)
Purchaser Preamble
Securities Recitals
Seller(s) Preamble
Shares Recitals
ARTICLE II
PURCHASE AND SALE; TenDER
SECTION 2.01 Purchase and Sale of the Shares and Warrants. Upon the
terms and subject to the conditions contained in this Agreement, at the Closing,
each Seller agrees to sell to Purchaser, and Purchaser agrees to purchase from
each Seller, the number of Shares and Warrants set forth next to such Seller's
name on Schedule A hereto.
SECTION 2.02 Purchase Price. The purchase price for each Seller's
Shares and Warrants shall consist of the amount of immediately available United
States dollars (such Seller's "Cash Purchase Price") set forth next to such
Seller's name on Schedule A hereto. In the event that the price per share of
Common Stock paid pursuant to the Offer is increased, the Cash Purchase Price
payable to each Seller hereunder shall be increased by an amount equal to the
per share amount of such increase multiplied by the aggregate number of Common
Shares issuable upon conversion of each Seller's Shares (including any Shares
issuable upon exercise of such Seller's Warrants).
SECTION 2.03 Closing. Subject to the terms and conditions of this
Agreement, the sale and purchase of the Sellers' Shares and Warrants
contemplated by this Agreement shall take place at a closing (the "Closing") to
be held at the offices of Shearman & Sterling, 599 Lexington Avenue, New York,
New York, 10022 at 9:00 A.M. New York City time on the Business Day following
the later to occur of (i) expiration or termination of all applicable waiting
periods under the HSR Act, and (ii) satisfaction or waiver of all other
conditions to the obligations of the parties set forth in Article VI or at such
other place or at such other time or on such other date as the Sellers and
Purchaser may mutually agree upon in writing (the date on which the Closing
takes place being the "Closing Date").
SECTION 2.04 Closing Deliveries by the Sellers. At the Closing, each
Seller shall deliver or cause to be delivered to Purchaser:
(a) stock certificates evidencing the Seller's Shares and
certificates or other instruments representing such Seller's Warrants,
in each case duly endorsed in blank, or accompanied by stock or
transfer powers duly executed in blank, in
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form reasonably satisfactory to Purchaser and with all required
transfer tax stamps affixed, provided, however, that in the event any
such certificates shall have been lost, stolen or destroyed, the
Company shall issue in exchange for such lost, stolen or destroyed
certificates, upon the making of an affidavit of that fact by Seller,
the Cash Purchase Price payable with respect thereto pursuant to
Section 2.02;
(b) a receipt for an amount equal the Cash Purchase Price
received by such Seller; and
(c) the certificates and other documents required to be
delivered pursuant to Section 6.02.
SECTION 2.05 Closing Deliveries by Purchaser. At the Closing, Purchaser
shall deliver to each Seller:
(a) an amount equal to such Seller's Cash Purchase Price to be
paid in cash by wire transfer in immediately available funds to such
Seller's Purchase Price Bank Account; and
(b) a receipt for the Seller's Shares and Warrants received by
Purchaser.
SECTION 2.06 Tender of Shares. Each Seller agrees to tender, pursuant
to and in accordance with the terms of the Offer, and not withdraw (except
following termination of the Offer in accordance with its terms), all of the
Common Shares held by such Seller as set forth on Schedule A, together with any
Common Shares subsequently acquired by such Seller after the date hereof and
prior to the consummation of the Offer. Such Seller acknowledges and agrees that
Purchaser's obligation to accept for payment Common Shares in the Offer,
including any Common Shares tendered by the Sellers, is subject to the terms and
conditions of the Merger Agreement and the Offer.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
As an inducement to Purchaser to enter into this Agreement, each Seller
hereby represents and warrants individually, and not jointly or severally, to
Purchaser as follows:
SECTION 3.01 Organization, Authority and Qualification of the Seller.
(a) Such Seller is a corporation or a limited partnership duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation or formation and has all necessary power and authority to enter
into this Agreement, to carry out its obligations hereunder and to consummate
the transactions contemplated hereby. Such Seller is duly licensed or qualified
to do business and is in good standing in each jurisdiction in which the
properties owned or leased by it or the operation of its business makes such
licensing or qualification necessary, except to the extent that the failure to
be so licensed or qualified would not adversely affect or materially delay the
ability of such Seller to carry out its obligations under, and to consummate the
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transactions contemplated by, this Agreement. The execution and delivery of this
Agreement by such Seller, the performance by such Seller of its obligations
hereunder and the consummation by such Seller of the transactions contemplated
hereby have been duly authorized by all requisite action on the part of such
Seller. This Agreement has been duly and validly executed and delivered by such
Seller and (assuming due authorization, execution and delivery by Purchaser)
this Agreement constitutes a legal, valid and binding obligation of such Seller
enforceable against such Seller in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditor rights
and for general equitable and public policy principles.
(b) In accordance with the terms and conditions of the Certificate of
Designation, such Seller approves the Transactions and such approval, together
with the approval of the other Sellers, is the only approval required under the
Certificate of Designation to consummate the Transactions.
SECTION 3.02 No Conflict. (a) The execution and delivery of this
Agreement by such Seller do not, and the performance of this Agreement by such
Seller shall not, (i) conflict with or violate the certificate of incorporation,
by-laws or equivalent organizational documents of such Seller, (ii) assuming
satisfaction of the requirements set forth in Section 3.02(b) below, conflict
with or violate any federal or state statute, law, ordinance, regulation, rule,
code, executive order, injunction, judgment, decree or other order ("Law")
applicable to such Seller or by which any property or asset of such Seller is
bound or affected or (iii) result in any breach of, or constitute a default (or
an event that with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a Lien on any property or asset of
such Seller pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation,
except for any such conflicts, violations, breaches, defaults or other
occurrences that would not adversely affect or materially delay the ability of
such Seller to carry out its obligations under, and to consummate the
transactions contemplated by, this Agreement.
(b) The execution and delivery of this Agreement by such Seller do not,
and the performance of this Agreement by such Seller shall not, require any
consent, approval, authorization or permit of, or filing with or notification
to, any Governmental Authority, except (i) for applicable requirements, if any,
of the Exchange Act, state takeover laws and the pre-merger notification
requirements of the HSR Act and (ii) where the failure to obtain such consents,
approvals, authorizations or permits, or to make such filings or notifications
would not adversely affect or materially delay the ability of such Seller to
carry out its obligations under, and to consummate the transactions contemplated
by, this Agreement.
SECTION 3.03 Ownership of Securities. Such Seller is the record and
beneficial owner of, and has valid title to, the number of Securities set forth
next to such Seller's name on Schedule A hereto. Such Securities are all the
equity securities of the Company owned, either of record or beneficially, by
such Seller as of the date hereof and such Seller does not have any option or
other right to acquire any other securities of the Company. The Securities owned
by such Seller are owned free and clear of all Liens, other than any Liens
created by this Agreement and the 1999 Agreement. Except as provided in this
Agreement, such Seller has not
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appointed or granted any proxy, which appointment or grant is still effective,
with respect to the Securities owned by such Seller. At the Closing, such Seller
shall deliver, and upon such delivery and payment of the Purchase Price
therefor, Purchaser shall receive valid title to such Seller's Shares and
Warrants free and clear of any Liens, other than pursuant to this Agreement and
any Liens created by Purchaser of Merger Sub.
SECTION 3.04 Absence of Litigation. As of the date hereof, there is no
litigation, suit, claim, action, proceeding or investigation (an "Action")
pending or, to the knowledge of the Sellers, threatened against such Seller, or
any property or asset of such Seller, before any Governmental Authority that
seeks to delay or prevent the consummation of the transactions contemplated by
this Agreement.
SECTION 3.05 Brokers. Other than Dain Rauscher Wessels (in accordance
with the arrangement set forth on Section 6.01(f) of the Disclosure Schedule),
no broker, finder or investment banker is entitled to any brokerage, finder's or
other fee or commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of such Seller.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
As an inducement to each Seller to enter into this Agreement, Purchaser
hereby represents and warrants to each Seller as follows:
SECTION 4.01 Organization and Authority of Purchaser. Purchaser is a
corporation, duly incorporated and validly existing under the laws of the State
of Delaware and has all necessary corporate power and authority to enter into
this Agreement, to carry out its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by Purchaser, the performance by Purchaser of its obligations hereunder and the
consummation by Purchaser of the transactions contemplated hereby have been duly
authorized by all requisite action on the part of Purchaser. This Agreement has
been duly executed and delivered by Purchaser, and (assuming due authorization,
execution and delivery by the Sellers) this Agreement constitutes a legal, valid
and binding obligation of Purchaser enforceable against Purchaser in accordance
with its terms.
SECTION 4.02 No Conflict; Required Filings and Consents. (a) The
execution and delivery of this Agreement by Purchaser do not, and the
performance of this Agreement by Purchaser shall not, (i) conflict with or
violate the certificate of incorporation or by-laws of Purchaser, (ii) assuming
satisfaction of the requirements set forth in 4.02(b) below, conflict with or
violate any Law applicable to Purchaser or by which any property or asset of
Purchaser is bound or affected or (iii) result in any breach of, or constitute a
default (or event that with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of a Lien on any
property or asset of Purchaser pursuant to, any note, bond, mortgage, indenture,
contract
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agreement, lease, license, permit, franchise or other instrument or obligation,
except for any such conflicts, violations, breaches, defaults or other
occurrences that would not adversely affect or materially delay the ability of
Purchaser to carry out its obligations under, and to consummate the transactions
contemplated by, this Agreement.
(b) The execution and delivery of this Agreement by Purchaser do not,
and the performance of this Agreement by Purchaser shall not, require any
consent, approval, authorization or permit of, or filing with, or notification
to, any Governmental Authority, except (i) for applicable requirements, if any,
of state takeover laws and the premerger notifications of the HSR Act, (ii) for
those required to be made with self-regulatory organizations and Governmental
Authorities regulating brokers, dealers, investment advisors, investment
companies, banks, trust companies and insurance companies and (iii) where the
failure to obtain such consents, approvals, authorizations or permits, or to
make such filings or notifications, would not adversely affect or materially
delay the ability of Purchaser to carry out its obligations under, and to
consummate the transactions contemplated by, this Agreement.
SECTION 4.03 No Distribution. Purchaser is not acquiring the Sellers'
Shares and Warrants with a view to, or for offer or sale in connection with, any
distribution thereof.
SECTION 4.04 Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the Transactions based upon arrangements made by or on behalf of Purchaser
or Merger Sub.
SECTION 4.05 Financing. Purchaser has and will have at the closing of
the Offer and the Merger, as applicable, sufficient funds or available has and
borrowing capacity to permit Purchaser and Merger Sub to consummate all of the
Transactions.
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.01 Irrevocable Proxy. (a) Each Seller hereby irrevocably
constitutes and appoints Purchaser and each of its officers, from and after the
date hereof and until the earlier to occur of the Closing and the termination of
this Agreement (at which point such constitution and appointment shall
automatically be revoked), as such Seller's attorney, agent and proxy (such
constitution and appointment, the "Irrevocable Proxy"), with full power of
substitution, to vote such Seller's Shares and Common Shares, together with any
Shares issued upon exercise of Warrants and any Securities acquired after the
date of this Agreement, at any meeting of the stockholders of the Company,
however called, and in any action by consent of the stockholders of the Company
(i) against any action, proposal, agreement or transaction that would result in
a breach of any covenant, obligation, agreement, representation or warranty of
the Company under the Merger Agreement or of the Sellers contained in this
Agreement, (ii) against any action, agreement, transaction (other than the
Merger Agreement or the transactions contemplated thereby) or proposal
(including any Acquisition Proposal) that could reasonably be
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expected to result in any of the conditions to the Company's obligations under
the Merger Agreement not being fulfilled or that is intended, or could
reasonably be expected, to impede, interfere, delay, discourage or adversely
affect the Merger Agreement, the Offer, the Merger or this Agreement, and (iii)
in favor of the Transactions (as defined the Merger Agreement) as may be
required pursuant to the protective provisions of the Company's Certificate of
Designations.
(b) THIS PROXY AND POWER OF ATTORNEY ARE IRREVOCABLE AND COUPLED WITH
AN INTEREST AND, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, SHALL BE VALID
AND BINDING ON ANY PERSON TO WHOM A SELLER MAY TRANSFER ANY OF ITS SHARES,
WARRANTS OR COMMON SHARES IN BREACH OF THIS AGREEMENT. Each Seller hereby
revokes all other proxies and powers of attorney with respect to such Seller's
Securities that may have heretofore been appointed or granted, and no subsequent
proxy or power of attorney shall be given or written consent executed (and if
given or executed, shall not be effective) by any Seller with respect thereto.
The termination of such other proxies or powers of attorney, and the granting of
the Irrevocable Proxy, shall be binding upon the heirs, personal
representatives, successors and assigns of such Seller.
SECTION 5.02 No Disposition or Encumbrance of the Seller's Shares and
Warrants. Each Seller agrees that, except as contemplated by this Agreement,
such Seller shall not (i) sell, transfer, tender (including, without limitation,
into the Offer), pledge, assign, contribute to the capital of any entity,
hypothecate, give or otherwise dispose of, grant a proxy or power of attorney
with respect to, deposit into any voting trust, enter into any voting agreement,
or create or permit to exist any Liens of any nature whatsoever with respect to
(other than the Irrevocable Proxy), any of such Seller's Shares or Warrants (or
agree or consent to, or offer to do, any of the foregoing) or (ii) take any
action that would make any representation or warranty of the Sellers herein
untrue or incorrect in any material respect or have the effect of preventing or
disabling such Seller from performing such Seller's obligations hereunder.
SECTION 5.03 No Solicitation of Transactions. Except as permitted by
the Merger Agreement, each Seller agrees that between the date of this Agreement
and the date of termination of the Merger Agreement, such Seller shall not,
directly or indirectly, through any director, officer, employee, representative,
agent or otherwise, (i) solicit, initiate, endorse, accept or encourage the
submission of any Acquisition Proposal, or (ii) participate in any discussions
or negotiations regarding, or furnish to any person any information with respect
to, or otherwise participate in, assist, facilitate, endorse or encourage any
proposal that constitutes, or may reasonably be expected to lead to, an
Acquisition Proposal. Such Seller shall, and shall direct or cause its
directors, officers, employees, representatives and agents to, immediately cease
and cause to be terminated any discussions or negotiations with any parties that
may be ongoing with respect to any Acquisition Proposal. Such Seller shall
promptly advise Purchaser orally and in writing of any Acquisition Proposal or
any request for information with respect to any Acquisition Proposal, the
material terms and conditions of such Acquisition Proposal or request and the
identity of the person making such Acquisition Proposal or request, in each case
received by such Seller and not the Company; provided, however, that such duties
to advise Purchaser shall not apply to employees or agents of such Seller who
are directors of the Company, whose obligations to advise with respect to any
Acquisition Proposal shall be to the Company.
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SECTION 5.04 Company Board Representation. Promptly upon the Closing,
the Sellers shall cause the directors nominated by the Sellers or who are
otherwise affiliated with the Sellers after the Closing to resign from the Board
of Directors of the Company and any boards of directors of the Company's
subsidiaries if so requested by Purchaser or Merger Sub, and shall cause their
employees or agents who are directors of the Company to cause the individuals
nominated by Purchaser to be elected to the Board in accordance with Section
7.03 of the Merger Agreement.
SECTION 5.05 Liquidation Rights. Each of the Sellers acknowledges and
agrees that (i) the execution of this Agreement is not a liquidation event under
section 6(a) of the Company's Certificate of Designation and (ii) following the
Closing and upon payment to such Seller of all amounts due to Seller pursuant to
Section 2.05 hereof, such Seller's rights as a holder of Shares shall terminate
and be extinguished, and any amounts due and payable under the Certificate of
Designation to a holder of Shares shall be due and payable to Purchaser.
SECTION 5.06 Further Action; Reasonable Best Efforts. Upon the terms
and subject to the conditions hereof, each of the parties hereto shall use its
reasonable best efforts to take, or cause to be taken, all appropriate action,
and to do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective this Agreement.
SECTION 5.07 Public Announcements. The parties hereto agree that no
public release or announcement concerning the transactions contemplated by this
Agreement or the Merger Agreement shall be issued by any party without the prior
consent (which consent shall not be unreasonably withheld) of Purchaser, in the
case of a release or announcement by any Seller or any of its affiliates (other
than the Company and the Company's subsidiaries), or each of the Sellers, in the
case of a release or announcement by, Purchaser or any of its affiliates, except
as such release or announcement may be required by Law or the rules or
regulations of any United States securities exchange, in which case the party
required to make the release or announcement shall use its reasonable best
efforts to allow the other party reasonable time to comment on such release or
announcement in advance of such issuance. Notwithstanding the foregoing, each
party agrees to permit the other parties hereto to publish and disclose any
documents filed with the Securities and Exchange Commission pursuant to the
Exchange Act, and related filings under the United States securities laws, such
party's identity and ownership of Seller's Securities and the nature of the
commitments, arrangements and understandings under this Agreement.
SECTION 5.08 Limitations. Nothing in this Agreement shall limit or
restrict any representative of the Sellers who is a director of the Company from
acting in his or her capacity as a director or officer of the Company (it being
understood that this Agreement shall apply to Seller solely in Seller's capacity
as a security holder of the Company) or voting in Seller's sole discretion on
any matter other than those matters referred to in this Agreement.
SECTION 5.09 Notification of Subsequent Acquisition of Securities. Each
Seller shall notify Purchaser in the event such Seller acquires any Securities
after the date of this Agreement in addition to those set forth on Schedule A.
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SECTION 5.10 Grant of Option. (a) Each Seller hereby grants to
Purchaser an irrevocable option (each, the "Option" and, collectively, the
"Options") to purchase any or all of such Seller's Common Shares at the Per
Share Amount, net to such Seller in cash. The Options shall expire if not
exercised prior to the termination of the Merger Agreement.
(b) Exercise of Option. (i) Each Option may be exercised by Purchaser,
in whole but not in part, at any time following termination of the Offer until
the expiration or termination of the Option; provided that no Option may be
exercised unless a number of Options are concurrently exercised, a number of
Series B Shares and Warrants are concurrently purchased and a number of Options
are exercised pursuant to the terms of the other Stockholder Agreements such
that, after giving effect to such exercise or purchase and the exercise
hereunder, the Purchaser or an affiliate thereof would own Series B Shares,
Warrants and Shares constituting a majority of the outstanding Shares on a fully
diluted basis.
(ii) If Purchaser wishes to exercise an Option, Purchaser shall send a
written notice (the "Exercise Notice") to the applicable Seller of its intention
to exercise the Option. The purchase of any such Common Shares pursuant to an
Option shall occur concurrently with the Closing.
(iii) At the Closing, (A) such Seller, with respect to those Common
Shares that are being purchased pursuant to the Option, shall deliver to
Purchaser (or its designee) such Seller's Common Shares by delivery of a
certificate or certificates evidencing such Common Shares, duly endorsed to
Purchaser or accompanied by stock powers duly executed in favor of Purchaser,
with all necessary stock transfer stamps affixed, and (B) Purchaser shall pay to
such Seller the aggregate Per Share Amount for such Seller's Common Shares.
(c) Closing of Option Purchase. The purchase of Common Shares pursuant
to the Options shall be subject to the satisfaction of each of the conditions
set forth in Article VI.
SECTION 5.11 Purchaser Obligation. Notwithstanding anything to the
contrary contained in this Agreement, Purchaser and its affiliates shall acquire
all Common Shares, Series B Shares and Warrants subject to any of the
Stockholder Agreements, unless the failure to acquire such Shares, Series B
Shares or Warrants is due to the breach or default of any other party hereunder
or thereunder.
ARTICLE VI
CONDITIONS TO CLOSING
SECTION 6.01 Conditions to the Closing. The obligations of each party
to consummate the transactions contemplated by this Agreement shall be subject
to the satisfaction, at or prior to the Closing, of the following conditions:
(a) No Order; Compliance with Law. (i) No Governmental
Authority in the United States shall have enacted, issued, promulgated,
enforced or entered any Law (whether temporary, preliminary or
permanent) which is then in effect and has the effect of making the
acquisition of Shares or Warrants by Purchaser or any affiliate of
Purchaser illegal or otherwise restricting or prohibiting consummation
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of the transactions contemplated by this Agreement or the Merger
Agreement and (ii) consummation of the transactions contemplated by
this Agreement shall not conflict with or violate any provision of
United States Law; and
(b) Stockholder Agreements. Purchaser or its affiliate shall
have purchased, or shall purchase concurrently with the consummation of
this Agreement, a number of Common Shares under the other Stockholder
Agreements such that, together with the Series B Shares, Warrants and
Shares to be purchased hereunder, the Purchaser or an affiliate thereof
would own a majority of the outstanding Shares on a fully diluted
basis.
SECTION 6.02 Conditions to Obligations of Purchaser. The obligations of
Purchaser with respect to each Seller to consummate the transactions
contemplated by this Agreement shall be subject to the fulfillment, at or prior
to the Closing, of each of the following conditions:
(a) Representations and Warranties. The representations and
warranties of such Seller contained in this Agreement shall be true and
correct in all material respects on and as of the Closing Date with the
same force and effect as if made on and as of the Closing Date except
for those representations and warranties which address matters only as
of a particular date (which representations shall have been true and
correct in all material respects as of such particular date, and
Purchaser shall have received a certificate to such effect signed by a
duly authorized officer of such Seller; and
(b) Covenants. The covenants and agreements contained in this
Agreement to be complied with by such Seller on or before the Closing
shall have been complied with in all material respects, and Purchaser
shall have received a certificate to such effect signed by a duly
authorized officer of such Seller; and
(c) Offer. Purchaser or its affiliate shall have purchased all
Common Shares validly tendered and not withdrawn pursuant to the Offer,
or the conditions to the Offer shall have been satisfied or waived.
SECTION 6.03 Conditions to Obligations of Sellers. The obligations of
each Seller with respect to Purchaser to consummate the transactions
contemplated by this Agreement shall be subject to the fulfillment, at or prior
to the Closing, of each of the following conditions:
(a) Representations and Warranties. The representations and
warranties of Purchaser contained in this Agreement shall be true and
correct in all material respects on and as of the Closing Date with the
same force and effect as if made on and as of the Closing Date except
for those representations and warranties which address matters only as
of a particular date (which representations shall have been true and
correct in all material respects as of such particular date, and the
Sellers shall have received a certificate to such effect signed by a
duly authorized officer of Purchaser; and
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(b) Covenants. The covenants and agreements contained in this
Agreement to be complied with Purchaser on or before the Closing shall
have been complied with in all material respects, and the Sellers shall
have received a certificate to such effect signed by a duly authorized
officer of Purchaser.
ARTICLE VII
TERMINATION AND WAIVER
SECTION 7.01 Termination. This Agreement may be terminated at any time
prior to the Closing:
(a) by Sellers holding a majority of the outstanding Shares,
on the one hand, or Purchaser, on the other hand, if any Governmental
Authority shall have enacted, issued, promulgated, enforced or entered
any injunction, order, decree or ruling which has become final and
nonappealable and has the effect of making the transactions
contemplated by this Agreement illegal or otherwise preventing or
prohibiting consummation of the transactions contemplated by this
Agreement; or
(b) automatically, without any action on behalf of any party,
if the Merger Agreement shall have been terminated in accordance with
its terms; or
(c) by Purchaser if there shall have been a material breach of
any of the covenants or agreements or any of the representations or
warranties set forth in this Agreement on the part of any of the
Sellers, such that the conditions in Article VI would not be satisfied,
which breach is not cured within 15 days following written notice to
the breaching party, or which breach, by its nature or timing, cannot
be cured prior to the Closing.
SECTION 7.02 Effect of Termination. In the event of termination of this
Agreement as provided in Section 7.01, this Agreement shall forthwith become
void and there shall be no liability on the part of any party hereto except (a)
as set forth in Section 8.02 and (b) that nothing herein shall relieve any party
from liability for any breach of a covenant of this Agreement.
SECTION 7.03 Waiver. At any time prior to the Closing, any of the
parties hereto may (a) extend the time for the performance of any obligation or
other act of any other party hereto, (b) waive any inaccuracies in the
representations and warranties of any other party contained herein or in any
document delivered pursuant hereto and (c) waive compliance with any agreement
of any other party or any condition to its own obligations contained herein. Any
such extension or waiver shall be valid if set forth in an instrument in writing
signed by the party or parties to be bound thereby.
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ARTICLE VIII
GENERAL PROVISIONS
SECTION 8.01 Survival of Representations and Warranties. The
representations and warranties of the Sellers contained in Section 3.03 of this
Agreement shall survive the Closing. All other representations and warranties of
the Sellers and the representations and warranties of Purchaser contained in
Article IV shall terminate as of the Closing. The liability of the Sellers and
Purchaser with respect to their respective representations and warranties shall
not be reduced by any investigation made at any time by or on behalf of the
other parties.
SECTION 8.02 Expenses. Except as otherwise specified in this Agreement,
all costs and expenses, including, without limitation, any fees and
disbursements of counsel, financial advisors and accountants, incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such costs and expenses, whether or not the Closing
shall have occurred. Notwithstanding the foregoing, at the Closing, Purchaser
shall cause the Company to reimburse the Sellers for their reasonable
out-of-pocket fees and expenses, including the reasonable fees and expenses of
Davis Polk & Wardwell, incurred in connection with this Agreement and the
transactions contemplated hereby and by the Merger Agreement; provided that any
such fees and expenses shall payable only to the extent the Company has not
otherwise incurred fees and expenses in excess of $2.5 million, as set forth in
section 6.01(f) of the Merger Agreement.
SECTION 8.03 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by telecopy,
or by registered or certified mail (postage prepaid, return receipt requested)
to the respective parties at the following addresses (or at such other address
for a party as shall be specified in a notice given in accordance with this
Section 8.03):
(a) if to the Sellers:
Morgan Stanley Venture Partners
1221 Avenue of the Americas
NY, NY 10020
Telecopy: (212)762-8282
Attention: Fazle Husain
and
BA Venture Partners
950 Tower Lane, Suite 700
Foster City, CA 94404
Telecopy: (650) 378-6040
Attention: Mark Brooks
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Davis Polk & Wardwell
450 Lexington Avenue
New York, NY 10017
Telecopy: (212) 450-3350
Attention: John A. Bick
with a further copy to:
Wilson Sonsini Goodrich & Rosati
Professional Corporation
650 Page Mill Road
Palo Alto, CA 94304-1050
Telecopy: (650) 493-6811
Attention: Chris F. Fennell
Michael S. Dorf
if to Purchaser:
Boston Scientific Corporation
One Boston Scientific Place
Natick, MA 01760-1537
Telecopier No: (508) 650-8960
Attention: Assistant General Counsel
with a copy to:
Shearman & Sterling
599 Lexington Avenue
New York, NY 10022
Telecopy: (212) 848-7179
Attention: Clare O'Brien
SECTION 8.04 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in a mutually acceptable
manner in order that the transactions contemplated hereby are consummated as
originally contemplated to the fullest extent possible.
SECTION 8.05 Entire Agreement; Assignment. This Agreement constitutes
the entire agreement among the parties with respect to the subject matter hereof
and supersedes all prior agreements and undertakings, both written and oral,
among the parties, or any of them, with respect to the subject matter hereof.
This Agreement shall not be assigned (whether pursuant to a merger, by operation
of law or otherwise), except that Purchaser may
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assign all or any of its rights and obligations hereunder to any affiliate,
provided that no such assignment shall relieve the Purchaser of its obligations
hereunder.
SECTION 8.06 Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person any right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement.
SECTION 8.07 Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement were
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or equity.
SECTION 8.08 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York applicable to
contracts executed in and to be performed in that State. All actions and
proceedings arising out of or relating to this Agreement shall be heard and
determined exclusively in any New York state or federal court sitting in the
Borough of Manhattan of The City of New York. The parties hereto hereby (a)
submit to the exclusive jurisdiction of any state or federal court sitting in
the Borough of Manhattan of The City of New York for the purpose of any action
arising out of or relating to this Agreement brought by any party hereto, and
(b) irrevocably waive, and agree not to assert by way of motion, defense, or
otherwise, in any such action, any claim that it is not subject personally to
the jurisdiction of the above-named courts, that its property is exempt or
immune from attachment or execution, that the action is brought in an
inconvenient forum, that the venue of the action is improper, or that this
Agreement may not be enforced in or by any of the above-named courts.
SECTION 8.09 Waiver of Jury Trial. Each of the parties hereto hereby
waives to the fullest extent permitted by applicable law any right it may have
to a trial by jury with respect to any litigation directly or indirectly arising
out of, under or in connection with this Agreement. Each of the parties hereto
(a) certifies that no representative, agent or attorney of any other party has
represented, expressly or otherwise, that such other party would not, in the
event of litigation, seek to enforce that foregoing waiver and (b) acknowledges
that it and the other parties hereto have been induced to enter into this
Agreement by, among other things, the mutual waivers and certifications in this
Section 8.09.
SECTION 8.10 Headings. The descriptive headings contained in this
Agreement are for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement.
SECTION 8.11 Counterparts. This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which when executed
shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first written above by their respective officers
thereunto duly authorized.
BOSTON SCIENTIFIC CORPORATION
By: /s/ Lawrence C. Best
--------------------------------------
Name: Lawrence C. Best
Title: CFO
MORGAN STANLEY VENTURE PARTNERS III, L.P.
MORGAN STANLEY VENTURE INVESTORS III, L.P.
THE MORGAN STANLEY VENTURE PARTNERS
ENTREPRENEUR FUND, L.P.
By: Morgan Stanley Venture Partners III,
L.L.C., as General Partner of each of
the limited partnerships named above
By: Morgan Stanley Venture Capital III,
Inc. as Member
By: /s/ M. Fazle Husain
-------------------------------------
Name: M. Fazle Husain
Title: General Partner
BANK OF AMERICA VENTURES
By: /s/ Mark J. Brooks
-------------------------------------
Name: Mark J. Brooks
Title: Principal
BA VENTURE PARTNERS V
By: /s/ Mark J. Brooks
-------------------------------------
Name: Mark J. Brooks
Title: General Partner
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SCHEDULE A
Seller's Shares of Seller's Cash
Name Series B Stock Purchase Price
- ---- -------------- --------------
Morgan Stanley Venture Partners III, L.P. 8,685 $20,453,175
Morgan Stanley Venture Investors III, L.P. 834 1,964,070
Morgan Stanley Venture Partners 381 897,255
Entrepreneur Fund, L.P.
Bank of America Ventures 8,500 20,017,500
BA Venture Partners V 1,500 3,532,500
Total 19,900 $46,864,500
====== ===========
Seller's Warrants
to Purchase Shares of Seller's Cash
Name Series B Stock Purchase Price
- ---- -------------- --------------
Morgan Stanley Venture Partners III, L.P. 87.7305 $97,751
Morgan Stanley Venture Investors III, L.P. 8.4237 9,386
Morgan Stanley Venture Partners 3.8458 4,285
Entrepreneur Fund, L.P.
Bank of America Ventures 119 132,592
BA Venture Partners V 21 23,399
Total 240 $267,413
=== ========
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Seller's Shares of
Name Common Stock
- ---- ------------
Morgan Stanley Venture Partners III, L.P. 516,062
Morgan Stanley Venture Investors III, L.P. 49,551
Morgan Stanley Venture Partners 22,622
Entrepreneur Fund, L.P.
Bank of America Ventures 500,000
BA Venture Partners V 88,235
Total 1,176,470
=========