\nARTICLE 1<\/p>\nTHE MERGER………………………………………………………………….. 1
\n SECTION 1.2. Effective Time…………………………………………. 1
\n SECTION 1.3. Closing of the Merger…………………………………… 1
\n SECTION 1.4. Effects of the Merger…………………………………… 1
\n SECTION 1.5. Certificate of Incorporation and Bylaws…………………… 2
\n SECTION 1.6. Directors……………………………………………… 2
\n SECTION 1.7. Officers………………………………………………. 2
\n SECTION 1.8. Conversion of Shares……………………………………. 2
\n SECTION 1.9. Exchange of Certificates………………………………… 2
\n SECTION 1.10. Stock Options………………………………………….. 4<\/p>\n
ARTICLE 2<\/p>\n
REPRESENTATIONS AND WARRANTIES OF THE COMPANY…………………………………… 5
\n SECTION 2.1. Organization and Qualification; Subsidiaries………………. 5
\n SECTION 2.2. Capitalization of the Company and its Subsidiaries…………. 6
\n SECTION 2.3. Authority Relative to this Agreement……………………… 6
\n SECTION 2.4. SEC Reports; Financial Statements………………………… 7
\n SECTION 2.5. Information Supplied……………………………………. 7
\n SECTION 2.6. Consents and Approvals; No Violations…………………….. 8
\n SECTION 2.7. No Default…………………………………………….. 8
\n SECTION 2.8. No Undisclosed Liabilities; Absence of Changes…………….. 8
\n SECTION 2.9. Litigation…………………………………………….. 9
\n SECTION 2.10. Compliance with Applicable Law…………………………… 9
\n SECTION 2.11. Employee Plans…………………………………………. 9
\n SECTION 2.12. Environmental Laws and Regulations……………………….. 10
\n SECTION 2.13. Tax Matters……………………………………………. 11
\n SECTION 2.14. Intangible Property…………………………………….. 12
\n SECTION 2.15. Opinion of Financial Advisor…………………………….. 12
\n SECTION 2.16. Brokers……………………………………………….. 12
\n SECTION 2.17. Accounting Matters……………………………………… 13
\n SECTION 2.18. Material Contracts……………………………………… 13
\n SECTION 2.19. Products………………………………………………. 13
\n SECTION 2.20. Amendment to Rights Agreement……………………………. 14<\/p>\n
ARTICLE 3<\/p>\n
REPRESENTATIONS AND WARRANTIES
\nOF PARENT AND ACQUISITION…………………………………………………….. 14
\n SECTION 3.1. Organization…………………………………………… 14
\n SECTION 3.2. Capitalization of Parent and its Subsidiaries……………… 15
\n SECTION 3.3. Authority Relative to this Agreement……………………… 15
\n SECTION 3.4. SEC Reports; Financial Statements………………………… 15
\n SECTION 3.5. Information Supplied……………………………………. 16
\n SECTION 3.6. Consents and Approvals; No Violations…………………….. 16
\n SECTION 3.7. No Default…………………………………………….. 17
\n SECTION 3.8. No Undisclosed Liabilities; Absence of Changes…………….. 17
\n SECTION 3.9. Litigation…………………………………………….. 17
\n SECTION 3.10. Compliance with Applicable Law…………………………… 18
\n SECTION 3.11. Tax Matters……………………………………………. 18
\n SECTION 3.12. Products………………………………………………. 18
\n SECTION 3.13. Intangible Property…………………………………….. 18
\n SECTION 3.14. Brokers……………………………………………….. 19
\n SECTION 3.15. Accounting Matters……………………………………… 19
\n SECTION 3.16. Telectronics Agreements…………………………………. 19
\n SECTION 3.17. Medtronic Agreement…………………………………….. 19<\/p>\n
ARTICLE 4<\/p>\n
COVENANTS…………………………………………………………………… 19
\n SECTION 4.1. Conduct of Business of the Company and Parent……………… 19
\n SECTION 4.2. Preparation of S-4 and the Proxy Statement………………… 22
\n SECTION 4.3. No Solicitation………………………………………… 22
\n SECTION 4.4. Intentionally omitted…………………………………… 23
\n SECTION 4.5. Stockholder Meeting…………………………………….. 23
\n SECTION 4.6. Access to Information…………………………………… 23
\n SECTION 4.7. Additional Agreements; Best Efforts………………………. 24
\n SECTION 4.9. Public Announcements……………………………………. 25
\n SECTION 4.10. Indemnification; Directors’ and Officers’ Insurance………… 25
\n SECTION 4.11. Notification of Certain Matters………………………….. 26
\n SECTION 4.12. Pooling……………………………………………….. 26
\n SECTION 4.13. Tax-Free Reorganization Treatment………………………… 27
\n SECTION 4.14. Employee Matters……………………………………….. 27
\n SECTION 4.15. Company Affiliates……………………………………… 27
\n SECTION 4.16. SEC Filings……………………………………………. 27
\n SECTION 4.17. Guarantee of Performance………………………………… 28<\/p>\n
ARTICLE 5<\/p>\n
CONDITIONS TO CONSUMMATION OF THE MERGER……………………………………….. 28
\n SECTION 5.1. Conditions to Each Party’s Obligations to Effect the Merger…. 28
\n SECTION 5.2. Conditions to the Obligations of the Company………………. 28
\n SECTION 5.3. Conditions to the Obligations of Parent and Acquisition…….. 30<\/p>\n
ARTICLE 6<\/p>\n
TERMINATION; AMENDMENT; WAIVER………………………………………………… 30
\n SECTION 6.1. Termination……………………………………………. 30
\n SECTION 6.2. Effect of Termination…………………………………… 31
\n SECTION 6.3. Fees and Expenses………………………………………. 31
\n SECTION 6.4. Amendment……………………………………………… 32
\n SECTION 6.5. Extension; Waiver………………………………………. 32<\/p>\n
ARTICLE 7<\/p>\n
MISCELLANEOUS……………………………………………………………….. 32
\n SECTION 7.1. Nonsurvival of Representations and Warranties……………… 32
\n SECTION 7.2. Entire Agreement; Assignment…………………………….. 32
\n SECTION 7.3. Validity………………………………………………. 33
\n SECTION 7.4. Notices……………………………………………….. 33
\n SECTION 7.5. Governing Law………………………………………….. 33
\n SECTION 7.6. Descriptive Headings……………………………………. 33
\n SECTION 7.7. Parties in Interest…………………………………….. 33
\n SECTION 7.8. Severability…………………………………………… 34
\n SECTION 7.9. Specific Performance……………………………………. 34
\n SECTION 7.10. Subsidiaries…………………………………………… 34
\n SECTION 7.11. Counterparts…………………………………………… 34
\n<\/c><\/s><\/caption>\n<\/table>\n
AGREEMENT AND PLAN OF MERGER<\/p>\n
THIS AGREEMENT AND PLAN OF MERGER, dated as of October 23,
\n1996, is among VENTRITEX, INC.,a Delaware corporation (the “Company”), ST. JUDE
\nMEDICAL, INC., a Minnesota corporation (“Parent”), and PACESETTER, INC., a
\nDelaware corporation and a direct wholly-owned subsidiary of Parent
\n(“Acquisition”).<\/p>\n
WHEREAS, the Boards of Directors of the Company, Parent and
\nAcquisition each have, in light of and subject to the terms and conditions set
\nforth herein, (i) determined that the Merger (as defined in Section 1.1) is fair
\nto their respective stockholders and in the best interests of such stockholders
\nand (ii) approved the Merger in accordance with this Agreement;<\/p>\n
WHEREAS, for federal income tax purposes, it is intended that
\nthe Merger shall qualify as a reorganization within the meaning of Section
\n368(a) of the Internal Revenue Code of 1986, as amended (the “Code”); and<\/p>\n
WHEREAS, it is intended that the Merger shall be recorded for
\naccounting purposes as a “pooling-of-interests”.<\/p>\n
NOW, THEREFORE, in consideration of the premises and the
\nrepresentations, warranties, covenants and agreements herein contained, and
\nintending to be legally bound hereby, the Company, Parent and Acquisition hereby
\nagree as follows:<\/p>\n
ARTICLE 1<\/p>\n
THE MERGER<\/p>\n
SECTION 1.1. The Merger. At the Effective Time and upon the
\nterms and subject to the conditions of this Agreement and in accordance with the
\nDelaware General Corporation Law (the “DGCL”), the Company shall be merged with
\nand into Acquisition (the “Merger”). Following the Merger, Acquisition shall
\ncontinue as the surviving corporation (the “Surviving Corporation”) and the
\nseparate corporate existence of the Company shall cease.<\/p>\n
SECTION 1.2. Effective Time. Subject to the provisions of this
\nAgreement, Parent, Acquisition and the Company shall cause the Merger to be
\nconsummated by filing an appropriate Certificate of Merger or other appropriate
\ndocuments (the”Certificate of Merger”) with the Secretary of State of the State
\nof Delaware in such form as required by, and executed in accordance with, the
\nrelevant provisions of the DGCL, as soon as practicable on or after the Closing
\nDate (as defined in Section 1.3). The Merger shall become effective upon such
\nfiling or at such time thereafter as is provided in the Certificate of Merger
\n(the “Effective Time”).<\/p>\n
SECTION 1.3. Closing of the Merger. The closing of the Merger
\n(the “Closing”) will take place at a time and on a date to be specified by the
\nparties, which shall be no later than the second business day after satisfaction
\nor waiver of the conditions set forth in Article 5, other than those conditions
\nthat by their nature are to be satisfied at the Closing, but subject to the
\nfulfillment or waiver of those conditions (the “Closing Date”), at the offices
\nof Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New York, New York 10153,
\nunless another time, date or place is agreed to in writing by the parties
\nhereto.<\/p>\n
SECTION 1.4. Effects of the Merger. The Merger shall have the
\neffects set forth in the DGCL. Without limiting the generality of the foregoing,
\nand subject thereto, at the Effective Time, all the properties, rights,
\nprivileges, powers and franchises of the Company and Acquisition shall vest in
\nthe Surviving Corporation, and all debts, liabilities and duties of the Company
\nand Acquisition shall become the debts, liabilities and duties of the Surviving
\nCorporation.<\/p>\n
SECTION 1.5. Certificate of Incorporation and Bylaws. The
\ncertificate of incorporation of Acquisition in effect at the Effective Time
\nshall be the certificate of incorporation of the Surviving Corporation until
\namended in accordance with applicable law. The bylaws of Acquisition in effect
\nat the Effective Time shall be the bylaws of the Surviving Corporation until
\namended in accordance with applicable law.<\/p>\n
SECTION 1.6. Directors. The directors of Acquisition at the
\nEffective Time shall be the initial directors of the Surviving Corporation, each
\nto hold office in accordance with the certificate of incorporation and bylaws of
\nthe Surviving Corporation until such director’s successor is duly elected or
\nappointed and qualified.<\/p>\n
SECTION 1.7. Officers. The officers of Acquisition at the
\nEffective Time shall be the initial officers of the Surviving Corporation, each
\nto hold office in accordance with the certificate of incorporation and bylaws of
\nthe Surviving Corporation until such officer’s successor is duly elected or
\nappointed and qualified. The officers of the Company at the Effective Time shall
\nbe the initial officers of the Ventritex division of the Surviving Corporation,
\neach to hold such position in accordance with the certificate of incorporation
\nand bylaws of the Surviving Corporation until such person’s successor is duly
\nappointed and qualified.<\/p>\n
SECTION 1.8. Conversion of Shares.<\/p>\n
(a) At the Effective Time, each share of common stock, par
\nvalue $0.001 per share, of the Company (“Company Common Stock”) issued and
\noutstanding immediately prior to the Effective Time (individually a “Share” and
\ncollectively, the Shares”) (other than Shares held by Parent, Acquisition or any
\nother subsidiary of Parent) shall, by virtue of the Merger and without any
\naction on the part of Acquisition, the Company or the holder thereof, be
\nconverted into and shall become exchangeable for 0.6 of a fully paid and
\nnonassessable share of common stock, par value $0.10 per share, of Parent
\n(“Parent Common Stock”) (the “Exchange Ratio”). If between the date of this
\nAgreement and the Effective Time the outstanding shares of Parent Common Stock
\nshall have been changed into a different number of shares or a different class
\nby reason of any stock dividend, subdivision, reclassification,
\nrecapitalization, split, combination or exchange of shares, the amount of shares
\nof Parent Common Stock constituting the Exchange Ratio shall be correspondingly
\nadjusted to reflect such stock dividend, subdivision, reclassification,
\nrecapitalization, split, combination, exchange of shares or other similar
\ntransaction.<\/p>\n
(b) At the Effective Time, each outstanding share of the
\ncommon stock, par value $1.00 per share, of Acquisition shall remain outstanding
\nas one share of common stock, par value $1.00 per share, of the Surviving
\nCorporation.<\/p>\n
(c) At the Effective Time, each Share held by Parent,
\nAcquisition or any subsidiary of Parent or Acquisition immediately prior to the
\nEffective Time shall, by virtue of the Merger and without any action on the part
\nof Acquisition, the Company or the holder thereof, be canceled, retired and
\ncease to exist and no payment shall be made with respect thereto.<\/p>\n
(d) In accordance with Section 262 of the DGCL, no appraisal
\nrights shall be available to holders of Shares in connection with the Merger.<\/p>\n
SECTION 1.9. Exchange of Certificates.<\/p>\n
(a) As of the Effective Time, Parent shall make available to
\nAmerican Stock Transfer & Trust Company (the “Exchange Agent”), for the benefit
\nof the holders of Shares, for exchange in accordance with this Article 1,
\nthrough the Exchange Agent: (i) certificates representing the appropriate number
\nof shares of Parent Common Stock issuable pursuant to Section 1.8 in exchange
\nfor outstanding Shares and (ii) cash to be paid in lieu of fractional shares of
\nParent Common Stock pursuant to Section 1.9(f) (such shares of Parent Common
\nStock and such cash are hereinafter referred to as the “Exchange Fund”).<\/p>\n
(b) As soon as reasonably practicable after the Effective
\nTime, the Exchange Agent shall mail to each holder of record of a certificate or
\ncertificates which immediately prior to the Effective Time represented
\noutstanding Shares (the “Certificates”) whose Shares were converted into the
\nright to receive shares of Parent Common Stock pursuant to Section 1.8: (i) a
\nletter of transmittal (which shall specify that delivery shall be effected, and
\nrisk of loss and title to the Certificates shall pass, only upon delivery of the
\nCertificates to the Exchange Agent and shall be in such form and have such other
\nprovisions as Parent and the Company may reasonably specify) and (ii)
\ninstructions for use in effecting the surrender of the Certificates in exchange
\nfor certificates representing shares of Parent Common Stock. Upon surrender of a
\nCertificate for cancellation to the Exchange Agent or to such other agent or
\nagents as may be appointed by Parent and Acquisition, together with such letter
\nof transmittal, duly executed, the holder of such Certificate shall be entitled
\nto receive in exchange therefor a certificate representing that number of whole
\nshares of Parent Common Stock and, if applicable, a check representing the cash
\nconsideration to which such holder may be entitled pursuant to Section 1.9(f) on
\naccount of a fractional share of Parent Common Stock, which such holder has the
\nright to receive pursuant to the provisions of this Article 1, and the
\nCertificate so surrendered shall forthwith be canceled. In the event of a
\ntransfer of ownership of Shares which is not registered in the transfer records
\nof the Company, a certificate representing the proper number of shares of Parent
\nCommon Stock may be issued to a transferee if the Certificate representing such
\nShares is presented to the Exchange Agent, accompanied by all documents required
\nto evidence and effect such transfer and by evidence that any applicable stock
\ntransfer taxes have been paid. Until surrendered as contemplated by this Section
\n1.9, each Certificate shall be deemed at any time after the Effective Time to
\nrepresent only the right to receive upon such surrender the certificate
\nrepresenting shares of Parent Common Stock and cash in lieu of any fractional
\nshares of Parent Common Stock as contemplated by this Section 1.9. Holders of
\nunsurrendered Certificates shall be entitled to vote after the Effective Time at
\nany meeting of Parent stockholders the number of whole shares of Parent Common
\nStock represented by such Certificates, regardless of whether such holders have
\nexchanged their Certificates.<\/p>\n
(c) No dividends or other distributions declared or made after
\nthe Effective Time with respect to Parent Common Stock with a record date after
\nthe Effective Time shall be paid to the holder of any unsurrendered Certificate
\nwith respect to the shares of Parent Common Stock represented thereby and no
\ncash payment in lieu of fractional shares shall be paid to any such holder
\npursuant to Section 1.9(f) until the holder of record of such Certificate shall
\nsurrender such Certificate. Subject to the effect of applicable laws, following
\nsurrender of any such Certificate, there shall be paid to the record holder of
\nthe certificates representing whole shares of Parent Common Stock issued in
\nexchange therefor, without interest, (i) at the time of such surrender, the
\namount of any cash payable in lieu of a fractional share of Parent Common Stock
\nto which such holder is entitled pursuant to Section 1.9(f) and the amount of
\ndividends or other distributions with a record date after the Effective Time
\ntheretofore paid with respect to such whole shares of Parent Common Stock, and
\n(ii) at the appropriate payment date, the amount of dividends or other
\ndistributions with a record date after the Effective Time but prior to surrender
\nand a payment date subsequent to surrender payable with respect to such whole
\nshares of Parent Common Stock.<\/p>\n
(d) In the event that any Certificate for Shares shall have
\nbeen lost, stolen or destroyed, the Exchange Agent shall issue in exchange
\ntherefor, upon the making of an affidavit of that fact by the holder thereof,
\nsuch shares of Parent Common Stock and cash in lieu of fractional shares, if
\nany, as may be required pursuant to this Agreement; PROVIDED, HOWEVER, that
\nParent may, in its discretion, require the delivery of a suitable bond or
\nindemnity.<\/p>\n
(e) All shares of Parent Common Stock issued upon the
\nsurrender for exchange of Shares in accordance with the terms hereof (including
\nany cash paid pursuant to Section 1.9(c) or 1.9(f)) shall be deemed to have been
\nissued in full satisfaction of all rights pertaining to such Shares, and there
\nshall be no further registration of transfers on the stock transfer books of the
\nSurviving Corporation of the Shares which were outstanding immediately prior to
\nthe Effective Time. If, after the Effective Time, Certificates are presented to
\nthe Surviving Corporation for any reason, they shall be canceled and exchanged
\nas provided in this Article I.<\/p>\n
(f) No fractions of a share of Parent Common Stock shall be
\nissued in the Merger, but in lieu thereof each holder of Shares otherwise
\nentitled to a fraction of a share of Parent Common Stock shall, upon surrender
\nof his or her Certificate or Certificates, be entitled to receive an amount of
\ncash (without interest) determined by multiplying the average closing price for
\nParent Common Stock as reported on the Nasdaq Stock Market (or any subsequent
\nnational securities exchange on which shares of Parent Common Stock are listed
\nfor trading) for the five trading days immediately preceding the date of the
\nmeeting of the Company’s stockholders held in connection with the Merger by the
\nfractional share interest to which such holder would otherwise be entitled. The
\nparties acknowledge that payment of the cash consideration in lieu of issuing
\nfractional shares was not separately bargained for consideration but merely
\nrepresents a mechanical rounding off for purposes of simplifying the corporate
\nand accounting problems which would otherwise be caused by the issuance of
\nfractional shares.<\/p>\n
(g) Any portion of the Exchange Fund which remains
\nundistributed to the stockholders of the Company for six months after the
\nEffective Time shall be delivered to Parent, upon demand, and any stockholders
\nof the Company who have not theretofore complied with this Article I shall
\nthereafter look only to Parent for payment of their claim for Parent Common
\nStock for any cash in lieu of fractional shares of Parent Common Stock and any
\ndividends or distributions with respect to Parent Common Stock, as the case may
\nbe.<\/p>\n
(h) Neither Parent nor the Company shall be liable to any
\nholder of Shares, or Parent Common Stock, as the case may be, for such shares
\n(or dividends or distributions with respect thereto) or cash from the Exchange
\nFund delivered to a public official pursuant to any applicable abandoned
\nproperty, escheat or similar law.<\/p>\n
SECTION 1.10. Stock Options.<\/p>\n
(a) At the Effective Time, each outstanding option to purchase
\nshares of Company Common Stock (a “Company Stock Option” or, collectively,
\n“Company Stock Options”) issued pursuant to the Company’s stock option plans
\nlisted on Schedule 1.10 hereto (the “Company Plans”), whether vested or
\nunvested, shall be cancelled and, in lieu thereof, Parent shall issue to each
\nholder of a Company Stock Option an option (each, a “Parent Option”), to
\nacquire, on substantially the same terms and subject to substantially the same
\nconditions as were applicable under such Company Stock Option, including,
\nwithout limitation, term, exercisability, vesting schedule, status as an
\n“incentive stock option” under Section 422 of the Code, acceleration and
\ntermination provisions, the same number of shares of Parent Common Stock as the
\nholder of such Company Stock Option would have been entitled to receive pursuant
\nto the Merger had such holder exercised such option in full immediately prior to
\nthe Effective Time, at a price per share equal to (y) the aggregate exercise
\nprice for the shares of Company Common Stock otherwise purchasable pursuant to
\nsuch Company Stock Option divided by (z) the number of full shares of Parent
\nCommon Stock deemed purchasable pursuant to such Company Stock Option; provided,
\nhowever, that in the case of any option to which Section 421 of the Code applies
\nby reason of its qualification under any of Sections 422 through 424 of the
\nCode, the exercise price, the number of shares purchasable pursuant to such
\noption and the terms and conditions of exercise of such option shall be
\nadjusted, if necessary, in order to comply with Section 424 of the Code and
\nprovided, further, however, that the number of shares of Parent Common Stock
\nthat may be purchased upon exercise of any such Parent Option shall not include
\nany fractional share and, upon exercise of the Parent Option, a cash payment
\nshall be made for any fractional share based upon the average closing price for
\nParent Common Stock as reported on the Nasdaq Stock Market (or any subsequent
\nnational securities exchange on which shares of Parent Common Stock are listed
\nfor trading) for the five trading days immediately preceding the
\ndate of exercise. Employment with the Company shall be credited to the optionees
\nfor purposes of determining the number of vested shares of Parent Common Stock
\nsubject to exercise under converted Company Options after the Effective Time.
\nNone of the Company Stock Options that are unvested at the Effective Time shall
\nbecome vested as a result of the execution and delivery of this Agreement or the
\nconsummation of the Merger.<\/p>\n
(b) As soon as practicable after the Effective Time, but no
\nlater than 30 days thereafter, Parent shall deliver to the holders of Company
\nStock Options appropriate notices setting forth such holders’ rights pursuant to
\nthe respective Company Plans and stating that the holders will receive Parent
\nOptions exercisable for shares of Parent Common Stock on substantially the same
\nterms and conditions as their Company Stock Options (subject to the adjustments
\nrequired by this Section 1.10 after giving effect to the Merger). At or prior to
\nthe Effective Time, Parent shall take all corporate action necessary to reserve
\nfor issuance a sufficient number of shares of Parent Common Stock for delivery
\nupon exercise of Parent Options issued by it in accordance with this Section
\n1.10. As soon as practicable after the Effective Time, to the extent the Parent
\nCommon Stock issuable upon exercise of the Parent Options issued in accordance
\nwith this Section 1.10 has not previously been registered under the Securities
\nAct of 1933, as amended (the “Securities Act”), then Parent shall file a
\nregistration statement on Form S-3 or Form S-8, as the case may be (or any
\nsuccessor or other appropriate forms), or another appropriate form with respect
\nto the Parent Common Stock subject to such Parent Options, and shall use its
\nbest efforts to maintain the effectiveness of such registration statements (and
\nmaintain the current status of the prospectus or prospectuses contained therein)
\nfor so long as the Parent Options remain outstanding.<\/p>\n
ARTICLE 2<\/p>\n
REPRESENTATIONS AND WARRANTIES OF THE COMPANY<\/p>\n
The Company hereby represents and warrants to each of Parent
\nand Acquisition as follows:<\/p>\n
SECTION 2.1. Organization and Qualification; Subsidiaries.<\/p>\n
(a) The Company and each of its subsidiaries (as defined in
\nSection 7.10), is a corporation duly organized, validly existing and in good
\nstanding under the laws of the jurisdiction of its incorporation and has all
\nrequisite corporate power and authority to own, lease and operate its properties
\nand to carry on its businesses as now being conducted, except where the failure
\nto be so organized, existing and in good standing or to have such power and
\nauthority would not have a Company Material Adverse Effect (as defined below).
\nWhen used in connection with the Company or its subsidiaries, the term “Company
\nMaterial Adverse Effect” means any change or effect (i) that is materially
\nadverse to the properties, business, results of operations or financial
\ncondition of the Company and its subsidiaries, taken as whole, other than any
\nchange or effect arising out of general economic conditions or conditions
\ngenerally affecting the cardiovascular medical device market or (ii) that would
\nimpair the ability of the Company to consummate the transactions contemplated
\nhereby.<\/p>\n
(b) Except as set forth in Section 2.1(b) of the Disclosure
\nSchedule previously delivered by the Company to Parent (the “Company Disclosure
\nSchedule”), the Company has no subsidiaries and does not own, directly or
\nindirectly, beneficially or of record, any shares of capital stock or other
\nsecurity of any other entity or any other investment in any other entity.<\/p>\n
(c) Each of the Company and its subsidiaries is duly qualified
\nor licensed and in good standing to do business in each jurisdiction in which
\nthe property owned, leased or operated by it or the nature of the business
\nconducted by it makes such qualification or licensing necessary, except in such
\njurisdictions where the failure to be so duly qualified or licensed and in good
\nstanding would not have a Company Material Adverse Effect.<\/p>\n
(d) The Company has heretofore delivered to Parent accurate
\nand complete copies of the certificate of incorporation and by-laws, as
\ncurrently in effect, of each of the Company and each of its subsidiaries.<\/p>\n
SECTION 2.2. Capitalization of the Company and its
\nSubsidiaries.<\/p>\n
(a) The authorized capital stock of the Company consists of:
\n35,000,000 Shares, of which, as of October 15, 1996, 20,959,260 Shares were
\nissued and outstanding, and 5,000,000 shares of preferred stock, par value
\n$0.001 per share (the “Company Preferred Stock”), of which, as of the date
\nhereof, none are issued and outstanding. All of the issued and outstanding
\nShares have been validly issued, and are fully paid, nonassessable and free of
\npreemptive rights. As of October 15, 1996, 2,782,116 Shares were reserved for
\nissuance and issuable upon or otherwise deliverable in connection with the
\nexercise of outstanding Company Stock Options issued pursuant to the Company
\nPlans, 78,813 Shares were reserved for issuance under the Company’s 1991
\nEmployee Stock Purchase Plan (the “ESPP”) and 3,345,455 Shares were reserved for
\nissuance pursuant to the conversion of the Company’s 5-3\/4% Convertible
\nSubordinated Notes due August 15, 2001 (the “Convertible Notes”). The final
\npurchase by participants under the ESPP will occur no later than the business
\nday immediately preceding the Effective Time. The ESPP will terminate at the
\nEffective Time. A total of 35,000 shares of Preferred Stock have been designated
\nas Series A Participating Preferred Stock and reserved for issuance in
\nconnection with the exercise of the Rights (as defined in Section 2.20). Except
\nas set forth in Section 2.2(a) of the Company Disclosure Schedule, since October
\n15, 1996, no shares of the Company’s capital stock have been issued other than
\npursuant to stock options already in existence on October 15, 1996, and no stock
\noptions have been granted. Except as set forth above or as set forth in Section
\n2.2(a) of the Company Disclosure Schedule, as of the date hereof, there are
\noutstanding (i) no shares of capital stock or other voting securities of the
\nCompany, (ii) no securities of the Company or its subsidiaries convertible into
\nor exchangeable for shares of capital stock or voting securities of the Company,
\n(iii) no options or other rights to acquire from the Company or its
\nsubsidiaries, and no obligations of the Company or its subsidiaries to issue,
\nany capital stock, voting securities or securities convertible into or
\nexchangeable for capital stock or voting securities of the Company, and (iv) no
\nequity equivalents, interests in the ownership or earnings of the Company or its
\nsubsidiaries or other similar rights (including stock appreciation rights)
\n(collectively, “Company Securities”). There are no outstanding obligations of
\nthe Company or its subsidiaries to repurchase, redeem or otherwise acquire any
\nCompany Securities. Except as set forth in Section 2.2(a) of the Company
\nDisclosure Schedule, there are no stockholder agreements, voting trusts or other
\nagreements or understandings to which the Company is a party or to which it is
\nbound relating to the voting of any shares of capital stock of the Company.<\/p>\n
(b) All of the outstanding capital stock of the Company’s
\nsubsidiaries is owned by the Company, directly or indirectly, free and clear of
\nany Lien (as defined below) or any other limitation or restriction (including
\nany restriction on the right to vote or sell the same, except as may be provided
\nas a matter of law). There are no securities of the Company or its subsidiaries
\nconvertible into or exchangeable for, no options or other rights to acquire from
\nthe Company or its subsidiaries, and no other contract, understanding,
\narrangement or obligation (whether or not contingent) providing for the issuance
\nor sale, directly or indirectly, of any capital stock or other ownership
\ninterests in, or any other securities of, any subsidiary of the Company. There
\nare no outstanding contractual obligations of the Company or its subsidiaries to
\nrepurchase, redeem or otherwise acquire any outstanding shares of capital stock
\nor other ownership interests in any subsidiary of the Company. For purposes of
\nthis Agreement, “Lien” means, with respect to any asset (including, without
\nlimitation, any security) any mortgage, lien, pledge, charge, security interest
\nor encumbrance of any kind in respect of such asset.<\/p>\n
SECTION 2.3. Authority Relative to this Agreement.<\/p>\n
(a) The Company has all necessary corporate power and
\nauthority to execute and deliver this Agreement and to consummate the
\ntransactions contemplated hereby. The execution and delivery of this Agreement
\nand the consummation of the transactions contemplated hereby have been duly and
\nvalidly authorized by the Board of Directors of the Company (the “Company
\nBoard”) and no other corporate proceedings on the part of the Company are
\nnecessary to authorize this Agreement or to consummate the transactions
\ncontemplated hereby (other than, with respect to the Merger, the approval and
\nadoption of this Agreement by the holders of a majority of the then outstanding
\nshares of Company Common Stock). This Agreement has been duly and validly
\nexecuted and delivered by the Company and constitutes a valid, legal and binding
\nagreement of the Company, enforceable against the Company in accordance with its
\nterms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
\nmoratorium and similar laws of general applicability relating to or affecting
\ncreditors’ rights and to general equity principles (the “Bankruptcy and Equity
\nException”).<\/p>\n
(b) The Company Board has, by unanimous vote of those present,
\nduly and validly approved, and taken all corporate actions required to be taken
\nby the Company Board for the consummation of, the transactions, including the
\nMerger, contemplated hereby and resolved to recommend that the stockholders of
\nthe Company approve and adopt this Agreement.<\/p>\n
SECTION 2.4. SEC Reports; Financial Statements.<\/p>\n
(a) The Company has filed all required forms, reports and
\ndocuments with the Securities and Exchange Commission (the “SEC”) since January
\n1, 1995, each of which has complied in all material respects with all applicable
\nrequirements of the Securities Act and the Securities Exchange Act of 1934, as
\namended (the “Exchange Act”), each as in effect on the dates such forms, reports
\nand documents were filed. The Company has heretofore delivered to Parent, in the
\nform filed with the SEC (including any amendments thereto), (i) its Annual
\nReport on Form 10-K for the fiscal year ended June 30, 1996, (ii) all definitive
\nproxy statements relating to the Company’s meetings of stockholders (whether
\nannual or special) held since July 1, 1995 and (iii) all other reports or
\nregistration statements filed by the Company with the SEC since January 1, 1995
\n(the “Company SEC Reports”). As of their respective dates, none of such Company
\nSEC Reports contained any untrue statement of a material fact or omitted to
\nstate a material fact required to be stated or incorporated by reference therein
\nor necessary in order to make the statements therein, in light of the
\ncircumstances under which they were made, not misleading. The consolidated
\nfinancial statements of the Company included in the Company SEC Reports complied
\nas to form in all material respects with applicable accounting requirements and
\nthe published rules and regulations of the SEC with respect thereto and fairly
\npresent, in conformity with generally accepted accounting principles (“GAAP”)
\napplied on a consistent basis (except as may be indicated in the notes thereto),
\nthe consolidated financial position of the Company and its consolidated
\nsubsidiaries as of the dates thereof and their consolidated results of
\noperations and changes in financial position for the periods then ended
\n(subject, in the case of the unaudited interim financial statements, to normal
\nyear-end adjustments). Since June 30, 1996, except as set forth in the Company
\nSEC Reports, there has not been any change, or any application or request for
\nany change, by the Company or any of its subsidiaries in accounting principles,
\nmethods or policies for financial accounting or tax purposes (subject, in the
\ncase of the unaudited interim financial statements, to normal year-end
\nadjustments).<\/p>\n
(b) The Company has heretofore made available to Parent a
\ncomplete and correct copy of any material amendments or modifications, which
\nhave not yet been filed with the SEC, to agreements, documents or other
\ninstruments which previously had been filed by the Company with the SEC pursuant
\nto the Exchange Act.<\/p>\n
SECTION 2.5. Information Supplied. None of the information
\nsupplied or to be supplied by the Company for inclusion or incorporation by
\nreference in (i) the registration statement on Form S-4 to be filed with the SEC
\nby Parent in connection with the issuance of shares of Parent Common Stock in
\nthe Merger (the “S-4”) will, at the time the S-4 is filed with the SEC and at
\nthe time it becomes effective under the Securities Act, contain any untrue
\nstatement of a material fact or omit to state any material fact required to be
\nstated therein or necessary to make the statements therein not misleading, and
\n(ii) the proxy statement relating to the meeting of the Company’s stockholders
\nto be held in connection with the Merger (the “Proxy Statement”), will, at the
\ndate mailed to stockholders and at the time of the meeting of stockholders of
\nthe Company to be held in connection with the Merger, contain any untrue
\nstatement of a material fact or omit to state any material fact required to be
\nstated therein or necessary in order to make the statements therein, in light of
\nthe circumstances under which they are made, not misleading. If at any time
\nprior to the Effective Time any event with respect to the Company, its officers
\nand directors or any of its subsidiaries should occur which is required to be
\ndescribed in an amendment of, or a supplement to, the S-4 or the Proxy
\nStatement, the Company shall promptly so advise Parent and such event shall be
\nso described, and such amendment or supplement (which Parent shall have a
\nreasonable opportunity to review) shall be promptly filed with the SEC and, as
\nrequired by law, disseminated to the stockholders of the Company. The Proxy
\nStatement, insofar as it relates to the meeting of the Company’s stockholders to
\nvote on the Merger, will comply as to form in all material respects with the
\nprovisions of the Exchange Act and the rules and regulations thereunder.<\/p>\n
SECTION 2.6. Consents and Approvals; No Violations. Except for
\nfilings, permits, authorizations, consents and approvals as may be required
\nunder, and other applicable requirements of, the Securities Act, the Exchange
\nAct, state securities or blue sky laws, the Hart-Scott-Rodino Antitrust
\nImprovements Act of 1976, as amended (the “HSR Act”), the filing and recordation
\nof the Certificate of Merger as required by the DGCL and as otherwise set forth
\nin Section 2.6 to the Company Disclosure Schedule, no filing or registration
\nwith or notice to, and no permit, authorization, consent or approval of, any
\ncourt or tribunal or administrative, governmental or regulatory body, agency,
\ncommission or authority (a “Governmental Entity”) is necessary for the execution
\nand delivery by the Company of this Agreement or the consummation by the Company
\nof the transactions contemplated hereby, except where the failure to obtain such
\npermits, authorizations, consents or approvals or to make such filings or give
\nsuch notice would not have a Company Material Adverse Effect. Except as set
\nforth in Section 2.6 to the Company Disclosure Schedule, neither the execution,
\ndelivery and performance of this Agreement by the Company nor the consummation
\nby the Company of the transactions contemplated hereby will (i) conflict with or
\nresult in any breach of any provision of the respective certificate or articles
\nof incorporation or bylaws (or similar governing documents) of the Company or
\nany of its subsidiaries, (ii) result in a violation or breach of, or constitute
\n(with or without due notice or lapse of time or both) a default (or give rise to
\nany right of termination, amendment, cancellation or acceleration or Lien)
\nunder, any of the terms, conditions or provisions of any note, bond, mortgage,
\nindenture, lease, license, contract, agreement or other instrument or obligation
\nto which the Company or any of its subsidiaries is a party or by which any of
\nthem or any of their respective properties or assets may be bound, or (iii)
\nviolate any order, writ, injunction, decree, law, statute, rule or regulation
\napplicable to the Company or any of its subsidiaries or any of their respective
\nproperties or assets, except in the case of (ii) or (iii) for violations,
\nbreaches or defaults which would not have a Company Material Adverse Effect.<\/p>\n
SECTION 2.7. No Default. None of the Company or its
\nsubsidiaries is in default or violation (and no event has occurred which with
\nnotice or the lapse of time or both would constitute a default or violation) of
\nany term, condition or provision of (i) its certificate or articles of
\nincorporation or bylaws (or similar governing documents), (ii) any note, bond,
\nmortgage, indenture, lease, license, contract, agreement or other instrument or
\nobligation to which the Company or any of its subsidiaries is now a party or by
\nwhich any of them or any of their respective properties or assets may be bound
\nor (iii) any order, writ, injunction, decree, law, statute, rule or regulation
\napplicable to the Company, its subsidiaries or any of their respective
\nproperties or assets, except in the case of (ii) or (iii) for violations,
\nbreaches or defaults that would not have a Company Material Adverse Effect.<\/p>\n
SECTION 2.8. No Undisclosed Liabilities; Absence of Changes.
\nExcept as and to the extent publicly disclosed by the Company in the Company SEC
\nReports, as of June 30, 1996, none of the Company or its subsidiaries had any
\nliabilities or obligations of any nature, whether or not accrued, contingent or
\notherwise, and whether due or to become due or asserted or unasserted, which
\nwould be required by GAAP to be reflected in, reserved against or otherwise
\ndescribed in the consolidated balance sheet of the Company (including the notes
\nthereto) as of such date. Except as publicly disclosed by the Company in the
\nCompany SEC Reports, since the date of the end of the period covered by the
\nlatest Company SEC Report, (i) the business of the Company and its subsidiaries
\nhas been carried on only in the ordinary and usual course, and (ii) to the
\nknowledge of the Company, none of the Company or its subsidiaries has incurred
\nany liabilities of any nature, whether or not accrued, contingent or otherwise,
\nand there have been no events, changes or effects with respect to the Company or
\nits subsidiaries, which would have a Company Material Adverse Effect. For
\npurposes of this Agreement, “knowledge of the Company” means the actual
\nknowledge of any executive officer or member of the Company Board as listed in
\nSection 2.8 of the Company Disclosure Schedule.<\/p>\n
SECTION 2.9. Litigation. Except as publicly disclosed by the
\nCompany in the Company SEC Reports or disclosed in Section 2.9 of the Company
\nDisclosure Schedule, there is no suit, claim, action, proceeding or
\ninvestigation pending or, to the knowledge of the Company, threatened against
\nthe Company or any of its subsidiaries or any of their respective properties or
\nassets which (i) would have, individually or in the aggregate, a Company
\nMaterial Adverse Effect or (ii) as of the date hereof, questions the validity of
\nthis Agreement or any action to be taken by the Company in connection with the
\nconsummation of the transactions contemplated hereby or could otherwise prevent
\nor delay the consummation of the transactions contemplated by this Agreement.
\nExcept as publicly disclosed by the Company, none of the Company or its
\nsubsidiaries is subject to any outstanding order, writ, injunction or decree
\nwhich would have a Company Material Adverse Effect or would prevent or delay the
\nconsummation of the transactions contemplated hereby.<\/p>\n
SECTION 2.10. Compliance with Applicable Law. Except as
\npublicly disclosed by the Company in the Company SEC Reports, the Company and
\nits subsidiaries hold all permits, licenses, variances, exemptions, orders and
\napprovals of all Governmental Entities necessary for the conduct of their
\nrespective businesses as presently conducted (the “Company Permits”), except for
\nfailures to hold such permits, licenses, variances, exemptions, orders and
\napprovals which would not have a Company Material Adverse Effect. Except as
\npublicly disclosed by the Company in the Company SEC Reports, the Company and
\nits subsidiaries are in compliance with the terms of the Company Permits, except
\nwhere the failure so to comply would have a Company Material Adverse Effect.
\nExcept as publicly disclosed by the Company in the Company SEC Reports, the
\nbusinesses of the Company and its subsidiaries are not being conducted in
\nviolation of any law, ordinance or regulation of any Governmental Entity except
\nthat no representation or warranty is made in this Section 2.10 with respect to
\nEnvironmental Laws (as defined in Section 2.12(a)) and except for violations or
\npossible violations which would not have a Company Material Adverse Effect.
\nExcept as publicly disclosed by the Company in the Company SEC Reports or as
\ndisclosed in Section 2.10 of the Company Disclosure Schedule, to the knowledge
\nof the Company, no investigation or review by any Governmental Entity with
\nrespect to the Company or its subsidiaries is pending or threatened, nor, to the
\nknowledge of the Company, has any Governmental Entity indicated an intention to
\nconduct the same, other than, in each case, those which would not have a Company
\nMaterial Adverse Effect.<\/p>\n
SECTION 2.11. Employee Plans.<\/p>\n
(a) Section 2.11(a) of the Company Disclosure Schedule lists
\nall “employee benefit plans,” as defined in Section 3(3) of ERISA, and all other
\nemployee benefit plans or other benefit arrangements, including executive
\ncompensation, directors’ benefit, bonus or other incentive compensation,
\nseverance and deferred compensation plans and practices which the Company or any
\nof its subsidiaries maintains, contributes to or has any obligation to or
\nliability for (each an “Employee Benefit Plan” and collectively, the “Employee
\nBenefit Plans”).<\/p>\n
(b) True, correct and complete copies or descriptions of each
\nEmployee Benefit Plan (and, where applicable, the most recent summary plan
\ndescription, actuarial report, determination letter, most recent Form 5500 and
\ntrust agreement) have been delivered or made available to Parent for review
\nprior to the date hereof.<\/p>\n
(c) As of the date hereof, except as disclosed on Section
\n2.11(c) of the Company Disclosure Schedule, (i) all material payments required
\nto be made by or under any Employee Benefit Plan or any related trusts have been
\nmade; (ii) the Company and its subsidiaries have performed all material
\nobligations required to be performed by them under any Employee Benefit Plan;
\n(iii) the Employee Benefit Plans, have been administered in material compliance
\nwith their terms and the requirements of ERISA, the Code and other applicable
\nlaws; (iv) there are no material actions, suits, arbitrations or claims (other
\nthan routine claims for benefit) pending or threatened with respect to any
\nEmployee Benefit Plan; and (v) the Company and its subsidiaries have no material
\nliability as a result of any “prohibited transaction” (as defined in Section 406
\nof ERISA and Section 4975 of the Code) for any excise tax or civil penalty.<\/p>\n
(d) Except as disclosed on Section 2.11(d) of the Company
\nDisclosure, none of the Employee Benefit Plans is subject to Title IV of ERISA.<\/p>\n
(e) Except as set forth on Section 2.11(e) of the Company
\nDisclosure Schedule, the Company and its subsidiaries have not incurred any
\nunsatisfied withdrawal liability with respect to any Multiemployer Plan.<\/p>\n
(f) Except as set forth on Section 2.11(f) of the Company
\nDisclosure Schedule, each of the Employee Benefit Plans which is intended to be
\n“qualified” within the meaning of Section 401(a) of the Code has been determined
\nby the Internal Revenue Service to be so “qualified” and the Company knows of no
\nfact which would adversely affect the qualified status of any such Employee
\nBenefit Plan.<\/p>\n
(g) Except as set forth on Section 2.11(g) of the Company
\nDisclosure Schedule, neither the execution and delivery of this Agreement nor
\nthe consummation of the transactions contemplated hereby will (i) result in any
\nmaterial payment becoming due, or materially increase the amount of compensation
\ndue, to any current or former employee of the Company or any of its
\nsubsidiaries; (ii) materially increase any benefits otherwise payable under any
\nEmployee Benefit Plan; or (iii) result in the acceleration of the time of
\npayment or vesting of any such material benefits.<\/p>\n
SECTION 2.12. Environmental Laws and Regulations.<\/p>\n
(a) Except as publicly disclosed by the Company in the Company
\nSEC Reports, (i) each of the Company and its subsidiaries is in compliance with
\nall applicable federal, state and local laws and regulations relating to
\npollution, the protection of human health from the effects of pollution or the
\nenvironment (including, without limitation, ambient air, surface water, ground
\nwater, land surface or subsurface strata) (collectively, “Environmental Laws”),
\nexcept for non-compliance that would not have a Company Material Adverse Effect,
\nwhich compliance includes, but is not limited to, the possession by the Company
\nand its subsidiaries of all material permits and other governmental
\nauthorizations required under applicable Environmental Laws necessary for the
\noperation of its business as presently conducted, and compliance with the terms
\nand conditions thereof; (ii) none of the Company or its subsidiaries has
\nreceived written notice of, or, to the knowledge of the Company, is the subject
\nof, any action, cause of action, claim, investigation, demand or notice by any
\nperson or entity alleging liability under or non-compliance with any
\nEnvironmental Law (an “Environmental Claim”) that would have a Company Material
\nAdverse Effect; and (iii) to the knowledge of the Company, there are no
\ncircumstances that are reasonably likely to prevent or interfere with such
\nmaterial compliance in the future.<\/p>\n
(b) Except as publicly disclosed by the Company in the Company
\nSEC Reports, there are no Environmental Claims which would have a Company
\nMaterial Adverse Effect that are pending or, to the knowledge of the Company,
\nthreatened against the Company or its subsidiaries or, to the knowledge of the
\nCompany, against any person or entity whose liability for any Environmental
\nClaim the Company or any of its subsidiaries has or may have retained or assumed
\neither contractually or by operation of law.<\/p>\n
SECTION 2.13. Tax Matters.<\/p>\n
(a) The Company and each of its subsidiaries has timely filed
\nall Federal income tax returns and all other material tax returns and reports
\nrequired to be filed by it. All such tax returns are complete and correct in all
\nmaterial respects. The Company and each of its subsidiaries has paid (or the
\nCompany has paid on its subsidiaries’ behalf) all taxes shown due on such tax
\nreturns. The most recent consolidated financial statements contained in the
\nCompany SEC Reports reflect an adequate reserve for all taxes payable by the
\nCompany and its subsidiaries for all taxable periods and portions thereof
\nthrough the date of such financial statements. The Company has previously
\ndelivered to Parent copies of the Federal and California income tax returns
\nfiled by the Company for its taxable years ended in 1993, 1994 and 1995. For
\npurposes of this Agreement, “tax” or “taxes” shall mean all taxes, charges,
\nfees, imposts, levies, gaming or other assessments, including, without
\nlimitation, all net income, gross receipts, capital, sales, use, ad valorem,
\nvalue added, transfer, franchise, profits, inventory, capital stock, license,
\nwithholding, payroll, employment, social security, unemployment, excise,
\nseverance, stamp, occupation, property and estimated taxes, customs duties,
\nfees, assessments and charges of any kind whatsoever, together with any interest
\nand any penalties, fines, additions to tax or additional amounts imposed by any
\ntaxing authority (domestic or foreign). “Tax returns” shall mean any report,
\nreturn, document, declaration or any other information or filing required to be
\nsupplied to any taxing authority or jurisdiction (foreign or domestic) with
\nrespect to taxes, including without limitation, information returns, any
\ndocument with respect to or accompanying payments or estimated taxes, or with
\nrespect to or accompanying requests for the extension of time in which to file
\nany such report, return document, declaration or other information.<\/p>\n
(b) Except as disclosed on Section 2.13 of the Company
\nDisclosure Schedule, no material deficiencies for any taxes have been proposed,
\nasserted or assessed against the Company or any of its subsidiaries that have
\nnot been fully paid or adequately provided for in the appropriate financial
\nstatements of the Company and its subsidiaries, no requests for waivers of the
\ntime to assess any taxes are pending, and no power of attorney with respect to
\nany taxes has been executed or filed with any taxing authority. No material
\nissues relating to taxes have been raised in writing by the relevant taxing
\nauthority during any presently pending audit or examination. None of the Federal
\nincome tax returns of the Company or any of its subsidiaries consolidated in
\nsuch tax returns has been examined by the Internal Revenue Service.<\/p>\n
(c) No material liens for taxes exist with respect to any
\nassets or properties of the Company or any of its subsidiaries, except for
\nstatutory liens for taxes not yet due.<\/p>\n
(d) Except as disclosed on Section 2.13 of the Company
\nDisclosure Schedule and other than with respect to contractual tax indemnity
\nobligations of the Company and its subsidiaries involving claims for state and
\nlocal taxes which are not material in amount, none of the Company or any of its
\nsubsidiaries is a party to or is bound by any tax sharing agreement, tax
\nindemnity obligation or similar agreement, arrangement or practice with respect
\nto taxes (including any advance pricing agreement, closing agreement or other
\nagreement relating to taxes with any taxing authority).<\/p>\n
(e) None of the Company or any of its subsidiaries has taken
\nor agreed to take any action that would prevent the Merger from constituting a
\nreorganization qualifying under the provisions of Section 368(a) of the Code.<\/p>\n
(f) Except as disclosed in Section 2.13 of the Company
\nDisclosure Schedule, there are no employment, severance or termination
\nagreements, other compensation arrangements or Employee Benefit Plans currently
\nin effect which provide for the payment of any amount (whether in cash or
\nproperty or the vesting of property) as a result of any of the transactions
\ncontemplated by this Agreement to any employee, officer or director of the
\nCompany or any of its affiliates who is a “disqualified individual” (as such
\nterm is defined in Section 280G(c) of the Code), that would be characterized as
\nan “excess parachute payment” (as such term is defined in Section 280G(b)(1) of
\nthe Code).<\/p>\n
(g) Except as disclosed in Section 2.13 of the Company
\nDisclosure Schedule, no Federal, state, local or foreign audits or other
\nadministrative proceedings or court proceedings are presently pending with
\nregard to any Federal income or material state, local or foreign taxes or tax
\nreturns of the Company or any of its subsidiaries and neither the Company nor
\nany of its subsidiaries has received a written notice of any pending audit or
\nproceeding with regard to any federal income or material state, local or foreign
\ntaxes or tax returns of the Company or any of its subsidiaries.<\/p>\n
(h) Neither the Company nor any of its subsidiaries has agreed
\nto or is required to make any adjustment under Section 481(a) of the Code.<\/p>\n
(i) Neither the Company nor any of its subsidiaries has (i)
\nwith regard to any assets or property held or acquired by any of them, filed a
\nconsent to the application of Section 341(f) of the Code or agreed to have
\nSection 341(f)(2) of the Code apply to any disposition of a subsection (f) asset
\n(as such term is defined in Section 341(f)(4) of the Code) owned by the Company
\nor any of its subsidiaries or (ii) received, or filed any requests for, rulings
\nor determinations in respect of any taxes within the last five years.<\/p>\n
(j) No property owned by the Company or any of its
\nsubsidiaries (i) is property required to be treated as being owned by another
\nPerson pursuant to the provisions of Section 168(f)(8) of the Internal Revenue
\nCode of 1954, as amended and in effect immediately prior to the enactment of the
\nTax Reform Act of 1986; (ii) constitutes “tax exempt use property” within the
\nmeaning of Section 168(h)(1) of the Code; or (iii) is “tax exempt bond financed
\nproperty” within the meaning of Section 168(g) of the Code.<\/p>\n
(k) The Company and each of its subsidiaries are not
\ncurrently, have not been within the last five years, and do not anticipate
\nbecoming a “United States real property holding company” within the meaning of
\nSection 897(c) of the Code.<\/p>\n
(l) No subsidiary of the Company owns any Shares.<\/p>\n
SECTION 2.14. Intangible Property. To the Company’s knowledge,
\nthe Company and its subsidiaries own or possess adequate licenses or other valid
\nrights to use all patents, patent rights, trademarks, trademark rights, trade
\nnames, trade name rights, copyrights, service marks, trade secrets, applications
\nfor trademarks and for service marks, know-how and other proprietary rights and
\ninformation used or held for use in connection with the business of the Company
\nand its subsidiaries as currently conducted, except for failures to own or
\npossess adequate licenses or other valid rights to use any of the foregoing
\nwhich would not have a Company Material Adverse Effect, and, except as set forth
\nin the Company SEC Reports or Section 2.14 of the Company Disclosure Schedule,
\nto the knowledge of the Company there are no pending assertions or claims
\nchallenging the validity of any of the foregoing which would have a Company
\nMaterial Adverse Effect. Except as disclosed in Section 2.14 of the Company
\nDisclosure Schedule, to the Company’s knowledge, there are no current claims or
\nnotices that the manufacture and sale of the Company’s products infringes the
\npatents of any third party.<\/p>\n
SECTION 2.15. Opinion of Financial Advisor. Goldman, Sachs & Co. (the “Financial Advisor”) has delivered to the Company Board its opinion to
\nthe effect that, as of the date of such opinion, the Exchange Ratio is fair to
\nthe holders of Shares, and such opinion has not been withdrawn.<\/p>\n
SECTION 2.16. Brokers. No broker, finder or investment banker
\n(other than the Financial Advisor, a true and correct copy of whose engagement
\nagreement has been provided to Parent) is entitled to any brokerage, finder’s or
\nother fee or commission or expense reimbursement in connection with the
\ntransactions contemplated by this Agreement based upon arrangements made by and
\non behalf of the Company or any of its affiliates.<\/p>\n
SECTION 2.17. Accounting Matters. Neither the Company nor, to
\nthe best of its knowledge, any of its affiliates or stockholders (including the
\nCompany Affiliates), has taken or agreed to take any action that would prevent
\nParent from accounting for the business combination to be effected by the Merger
\nas a “pooling-of-interests.” The Company has not failed to bring to the
\nattention of Parent any actions, or agreements or understandings, whether
\nwritten or oral, to act that would be reasonably likely to prevent Parent from
\naccounting for the Merger as a “pooling-of-interests.”<\/p>\n
SECTION 2.18. Material Contracts.<\/p>\n
(a) The Company has filed as an exhibit to an Annual Report on
\nForm 10-K or another document filed pursuant to the Securities Act or the
\nExchange Act, or has delivered or otherwise made available to Parent true,
\ncorrect and complete copies of all contracts and agreements to which the Company
\nor any of its subsidiaries is a party that are required to be filed in an
\nexhibit to an Annual Report on Form 10-K filed by the Company with the SEC as of
\nthe date of this Agreement (the “Contracts”). The Contracts include any
\nseverance or other agreement with any employee or consultant pursuant to which
\nsuch person would be entitled to receive any additional compensation or an
\naccelerated payment of compensation as a result of the consummation of the
\ntransactions contemplated hereby.<\/p>\n
(b) Each of the Contracts is valid and enforceable in
\naccordance with its terms, and there is no default under any Contract so listed
\neither by the Company or, to the knowledge of the Company, by any other party
\nthereto, and no event has occurred that with the lapse of time or the giving of
\nnotice or both would constitute a default thereunder by the Company or, to the
\nknowledge of the Company, any other party, in any such case in which such
\ndefault or event would have a Company Material Adverse Effect.<\/p>\n
(c) No party to any such Contract has given notice to the
\nCompany of or made a claim against the Company with respect to any breach or
\ndefault thereunder, in any such case in which such breach or default would have
\na Company Material Adverse Effect.<\/p>\n
SECTION 2.19. Products. Except as disclosed in the Company SEC
\nReports:<\/p>\n
(a) Each of the products currently being produced or sold by
\nthe Company and its subsidiaries (i) is in compliance in all material respects
\nwith all applicable U.S. federal, state and local laws and regulations and (ii)
\nconforms in all material respects to any promises or affirmations of fact made
\non the container or label for such product or in connection with its sale;<\/p>\n
(b) To the knowledge of the Company, no facts exist which
\nwould reasonably be expected to furnish a substantial basis for the recall,
\nwithdrawal or suspension by the Company or any of its subsidiaries of any such
\nproduct as a result of, or in order to comply with, any U.S. federal, state or
\nlocal law, regulation or rule or order of any Governmental Entity, except for
\nsuch recalls, withdrawals or suspensions as would not have a Company Material
\nAdverse Effect;<\/p>\n
(c) Section 2.19 of the Company Disclosure Schedule sets forth
\na list of all licenses and approvals granted by or pending with any Governmental
\nEntity in any country to market any product of the Company and its subsidiaries
\n(the “Company Product Registrations”). All products sold under the Company
\nProduct Registrations are manufactured and marketed in all material respects in
\naccordance with the specifications and standards contained in the Company
\nProduct Registrations. The Company and its subsidiaries have the sole rights
\nunder the Company Product Registrations and such registrations are in full force
\nand effect; and<\/p>\n
(d) Except as disclosed in Section 2.19 of the Company
\nDisclosure Schedule, since January 1, 1993, there have been no statements,
\ncitations, warning letters, FDA Forms 483, or decisions by any Governmental
\nEntity that any product produced, manufactured, marketed or distributed at any
\ntime by the Company or any of its subsidiaries is defective or fails to meet any
\napplicable standards promulgated by any such Governmental Entity. Except as
\ndisclosed in Section 2.19 of the Company Disclosure Schedule, there is no
\nproceeding by the FDA or any other Governmental Entity, including, but not
\nlimited to, a grand jury investigation, a 405 hearing or a civil penalty
\nproceeding, pending, or to the Company’s knowledge threatened, against the
\nCompany or any of its subsidiaries, and no such proceedings have been brought at
\nany time in the past relating to the safety or efficacy of the products of the
\nCompany and its subsidiaries and, to the Company’s knowledge, there is no basis
\nfor such a proceeding.<\/p>\n
SECTION 2.20. Amendment to Rights Agreement. The Company Board
\nhas taken all necessary action to amend the Rights Agreement, dated as of August
\n16, 1994, as amended, between the Company and Chemical Trust Company of
\nCalifornia, as Rights Agent (the “Rights Agreement”) so that none of the
\nexecution or delivery of this Agreement, the exchange of Parent Common Stock for
\nthe Shares in accordance with Article I, or any other transaction contemplated
\nhereby will cause (i) the rights (the “Rights”) issued pursuant to the Rights
\nAgreement to become exercisable under the Rights Agreement, (ii) Parent or
\nAcquisition to be deemed an “Acquiring Person” (as defined in the Rights
\nAgreement), or (iii) the “Shares Acquisition Date” (as defined in the Rights
\nAgreement) to occur upon any such event. The “Expiration Date” (as defined in
\nthe Rights Agreement) of the Rights shall occur immediately prior to the
\nEffective Time.<\/p>\n
ARTICLE 3<\/p>\n
REPRESENTATIONS AND WARRANTIES
\n OF PARENT AND ACQUISITION<\/p>\n
Parent and Acquisition hereby represent and warrant to the
\nCompany as follows:<\/p>\n
SECTION 3.1. Organization.<\/p>\n
(a) Each of Parent and its subsidiaries is a corporation duly
\norganized, validly existing and in good standing under the laws of the
\njurisdiction of its incorporation and has all requisite corporate power and
\nauthority to own, lease and operate its properties and to carry on its
\nbusinesses as now being conducted, except where the failure to be so organized,
\nexisting and in good standing or to have such power and authority would not have
\na Parent Material Adverse Effect (as defined below). When used in connection
\nwith Parent or Acquisition, the term “Parent Material Adverse Effect” means any
\nchange or effect that is (i) materially adverse to the properties, business,
\nresults of operations or financial condition of Parent and its subsidiaries,
\ntaken as a whole, other than any change or effect arising out of general
\neconomic conditions unrelated to any businesses in which Parent and its
\nsubsidiaries are engaged or (ii) that would impair the ability of Parent and\/or
\nAcquisition to consummate the transactions contemplated hereby. The parties
\nacknowledge and agree that a decrease in the market value of the Parent Common
\nStock will not, in and of itself, constitute a Parent Material Adverse Effect.<\/p>\n
(b) Except as set forth in Section 3.1(b) of the Disclosure
\nSchedule previously delivered by Parent to the Company (the “Parent Disclosure
\nSchedule”), Parent has no subsidiaries and does not own, directly or indirectly,
\nbeneficially or of record, any shares of capital stock or other security of any
\nother entity or any other investment in any other entity.<\/p>\n
(c) Each of Parent and its subsidiaries is duly qualified or
\nlicensed and in good standing to do business in each jurisdiction in which the
\nproperty owned, leased or operated by it or the nature of the business conducted
\nby it makes such qualification or licensing necessary, except in such
\njurisdictions where the failure to be so duly qualified or licensed and in good
\nstanding would not have a Parent Material Adverse Effect.<\/p>\n
(d) Parent has heretofore delivered to the Company accurate
\nand complete copies of the articles of incorporation and by-laws, as currently
\nin effect, of Parent.<\/p>\n
SECTION 3.2. Capitalization of Parent and its Subsidiaries.<\/p>\n
(a) The authorized capital stock of Parent consists of (i)
\n250,000,000 shares of Parent Common Stock, of which, as of September 30, 1996,
\n80,976,337 shares of Parent Common Stock were issued and outstanding, and (ii)
\n25,000,000 shares of preferred stock, $.01 par value per share, of which, as of
\nthe date hereof, none are issued and outstanding. All of the shares of Parent
\nCommon Stock have been validly issued, and are fully paid, nonassessable and
\nfree of preemptive rights. As of September 30, 1996, 5,155,986 shares of Parent
\nCommon Stock were reserved for issuance and issuable upon or otherwise
\ndeliverable in connection with the exercise of outstanding options and 494,442
\nshares of Parent Common Stock were reserved for issuance in connection with
\nParent’s employee stock purchase savings plan. Except as set forth in Section
\n3.2 of the Parent Disclosure Schedule since September 30, 1996, no shares of
\nParent’s capital stock have been issued other than pursuant to stock options
\nalready in existence on September 30, 1996, and no stock options have been
\ngranted. Except as set forth above or as described in Section 3.2 of the Parent
\nDisclosure Schedule, as of the date hereof, there are outstanding (i) no shares
\nof capital stock or other voting securities of Parent, (ii) no securities of
\nParent or its subsidiaries convertible into or exchangeable for shares of
\ncapital stock or voting securities of Parent, (iii) no options or other rights
\nto acquire from Parent or its subsidiaries, and no obligations of Parent or its
\nsubsidiaries to issue, any capital stock, voting securities or securities
\nconvertible into or exchangeable for capital stock or voting securities of
\nParent, and (iv) no equity equivalents, interests in the ownership or earnings
\nof Parent or its subsidiaries or other similar rights (including stock
\nappreciation rights) (collectively, “Parent Securities”). There are no
\noutstanding obligations of Parent or any of its subsidiaries to repurchase,
\nredeem or otherwise acquire any Parent Securities. Except as set forth in
\nSection 3.2 of the Parent Disclosure Schedule, there are no stockholder
\nagreements, voting trusts or other agreements or understandings to which Parent
\nis a party or to which it is bound relating to the voting of any shares of
\ncapital stock of Parent.<\/p>\n
(b) All of the outstanding capital stock of Parent’s
\nsubsidiaries (including Acquisition) is owned by Parent, directly or indirectly,
\nfree and clear of any Lien or any other limitation or restriction (including any
\nrestriction on the right to vote or sell the same, except as may be provided as
\na matter of law). There are no securities of Parent or its subsidiaries
\nconvertible into or exchangeable for, no options or other rights to acquire from
\nParent or its subsidiaries, and no other contract, understanding, arrangement or
\nobligation (whether or not contingent) providing for the issuance or sale,
\ndirectly or indirectly, of any capital stock or other ownership interests in, or
\nany other securities of, any subsidiary of Parent. There are no outstanding
\ncontractual obligations of Parent or its subsidiaries to repurchase, redeem or
\notherwise acquire any outstanding shares of capital stock or other ownership
\ninterests in any subsidiary of Parent.<\/p>\n
SECTION 3.3. Authority Relative to this Agreement. Each of
\nParent and Acquisition has all necessary corporate power and authority to
\nexecute and deliver this Agreement and to consummate the transactions
\ncontemplated hereby. The execution and delivery of this Agreement and the
\nconsummation of the transactions contemplated hereby have been duly and validly
\nauthorized by the boards of directors of Parent and Acquisition and by Parent as
\nthe sole stockholder of Acquisition, and no other corporate proceedings on the
\npart of Parent or Acquisition are necessary to authorize this Agreement or to
\nconsummate the transactions contemplated hereby. This Agreement has been duly
\nand validly executed and delivered by each of Parent and Acquisition and
\nconstitutes a valid, legal and binding agreement of each of Parent and
\nAcquisition, enforceable against each of Parent and Acquisition in accordance
\nwith its terms, subject to the Bankruptcy and Equity Exception.<\/p>\n
SECTION 3.4. SEC Reports; Financial Statements.<\/p>\n
(a) Parent has filed all required forms, reports and documents
\nwith the SEC since January 1, 1995, each of which has complied in all material
\nrespects with all applicable requirements of the Securities Act and the Exchange
\nAct, each as in effect on the dates such forms, reports and documents were
\nfiled. Parent has heretofore delivered to the Company, in the form filed with
\nthe SEC (including any amendments thereto), (i) its Annual Reports on Form 10-K
\nfor the fiscal year ended December 31, 1995, (ii) all definitive proxy
\nstatements relating to Parent’s meetings of stockholders (whether annual or
\nspecial) held since January 1, 1996 and (iii) all other reports or registration
\nstatements filed by Parent with the SEC since January 1, 1995 (the “Parent SEC
\nReports”). As of their respective dates, none of such Parent SEC Reports
\ncontained any untrue statement of a material fact or omitted to state a material
\nfact required to be stated or incorporated by reference therein or necessary in
\norder to make the statements therein, in light of the circumstances under which
\nthey were made, not misleading. The consolidated financial statements of Parent
\nincluded in the Parent SEC Reports complied as to form in all material respects
\nwith applicable accounting requirements and the published rules and regulations
\nof the SEC with respect thereto and fairly present, in conformity with GAAP
\napplied on a consistent basis (except as may be indicated in the notes thereto),
\nthe consolidated financial position of Parent and its consolidated subsidiaries
\nas of the dates thereof and their consolidated results of operations and changes
\nin financial position for the periods then ended (subject, in the case of the
\nunaudited interim financial statements, to normal year-end adjustments). Since
\nDecember 31, 1995, except as set forth in the Parent SEC Reports, there has not
\nbeen any change, or any application or request for any change, by Parent or any
\nof its subsidiaries in accounting principles, methods or policies for financial
\naccounting or tax purposes.<\/p>\n
(b) Parent has heretofore made available to the Company a
\ncomplete and correct copy of any material amendments or modifications, which
\nhave not yet been filed with the SEC, to agreements, documents or other
\ninstruments which previously had been filed by Parent with the SEC pursuant to
\nthe Exchange Act.<\/p>\n
SECTION 3.5. Information Supplied. None of the information
\nsupplied or to be supplied by Parent or Acquisition for inclusion or
\nincorporation by reference in (i) the S-4 will, at the time the S-4 is filed
\nwith the SEC and at the time it becomes effective under the Securities Act,
\ncontain any untrue statement of a material fact or omit to state any material
\nfact required to be stated therein or necessary to make the statements therein
\nnot misleading and (ii) the Proxy Statement will, at the date mailed to
\nstockholders and at the time of the meeting of stockholders of the Company to be
\nheld in connection with the Merger, contain any untrue statement of a material
\nfact or omit to state any material fact required to be stated therein or
\nnecessary in order to make the statements therein, in light of the circumstances
\nunder which they are made, not misleading. If at any time prior to the Effective
\nTime any event with respect to Parent, its officers and directors or any of its
\nsubsidiaries should occur which is required to be described in an amendment of,
\nor a supplement to, the S-4 or the Proxy Statement, Parent shall promptly so
\nadvise the Company and such event shall be so described, and such amendment or
\nsupplement (which the Company shall have a reasonable opportunity to review)
\nshall be promptly filed with the SEC. The S-4 will comply as to form in all
\nmaterial respects with the provisions of the Securities Act and the rules and
\nregulations thereunder.<\/p>\n
SECTION 3.6. Consents and Approvals; No Violations. Except for
\nfilings, permits, authorizations, consents and approvals as may be required
\nunder, and other applicable requirements of, the Securities Act, the Exchange
\nAct, state securities or blue sky laws, the HSR Act, the filing and recordation
\nof the Certificate of Merger as required by the DGCL and as otherwise set forth
\nin Section 3.6 to the Parent Disclosure Schedule, no filing or registration with
\nor notice to, and no permit, authorization, consent or approval of, any
\nGovernmental Entity is necessary for the execution and delivery by Parent or
\nAcquisition of this Agreement or the consummation by Parent or Acquisition of
\nthe transactions contemplated hereby, except where the failure to obtain such
\npermits, authorizations, consents or approvals or to make such filings or give
\nsuch notice would not have a Parent Material Adverse Effect. Except as set forth
\nin Section 3.6 of the Parent Disclosure Schedule, neither the execution,
\ndelivery and performance of this Agreement by Parent or Acquisition nor the
\nconsummation by Parent or Acquisition of the transactions contemplated hereby
\nwill (i) conflict with or result in any breach of any provision of the
\nrespective articles of incorporation or bylaws (or similar governing documents)
\nof Parent or Acquisition or any of Parent’s subsidiaries, (ii) result in a
\nviolation or breach of, or constitute (with or without due notice or lapse of
\ntime or both) a default (or give rise to any right of termination, amendment,
\ncancellation or acceleration or Lien) under, any of the terms, conditions or
\nprovisions of any note, bond, mortgage, indenture, lease, license, contract,
\nagreement or other instrument or obligation to which Parent or Acquisition or
\nany of Parent’s subsidiaries is a party or by which any of them or any of their
\nrespective properties or assets may be bound or (iii) violate any order, writ,
\ninjunction, decree, law, statute, rule or regulation applicable to Parent or
\nAcquisition or any of Parent’s subsidiaries or any of their respective
\nproperties or assets, except in the case of (ii) or (iii) for violations,
\nbreaches or defaults which would not have a Parent Material Adverse Effect.<\/p>\n
SECTION 3.7. No Default. None of the Parent or its
\nsubsidiaries is in default or violation (and no event has occurred which with
\nnotice or the lapse of time or both would constitute a default or violation) of
\nany term, condition or provision of (i) its certificate or articles of
\nincorporation or bylaws (or similar governing documents), (ii) any note, bond,
\nmortgage, indenture, lease, license, contract, agreement or other instrument or
\nobligation to which Parent or any of its subsidiaries is now a party or by which
\nany of them or any of their respective properties or assets may be bound or
\n(iii) any order, writ, injunction, decree, law, statute, rule or regulation
\napplicable to Parent, its subsidiaries or any of their respective properties or
\nassets, except in the case of (ii) or (iii) for violations, breaches or defaults
\nthat would not have a Parent Material Adverse Effect.<\/p>\n
SECTION 3.8. No Undisclosed Liabilities; Absence of Changes.
\nExcept as and to the extent publicly disclosed by Parent in the Parent SEC
\nReports, as of June 30, 1996, none of Parent or its subsidiaries had any
\nliabilities or obligations of any nature, whether or not accrued, contingent or
\notherwise, and whether due or to become due or asserted or unasserted, which
\nwould be required by GAAP to be reflected in, reserved against or otherwise
\ndescribed in the consolidated balance sheet of Parent (including the notes
\nthereto) as of such date. Except as publicly disclosed by Parent in the Parent
\nSEC Reports and except for the execution by Parent, Acquisition and certain
\naffiliates of Parent of that certain Asset Purchase Agreement (United States),
\ndated as of September 24, 1996, among Acquisition, Telectronics Pacing Systems,
\nInc. and TPLC, Inc., the International Purchase Agreements referred to in such
\nAsset Purchase Agreement (United States) and the other agreements to be executed
\npursuant to such Asset Purchase Agreement (United States) and International
\nPurchase Agreements (collectively, the “Telectronics Agreements”), since the
\ndate of the end of the period covered by the latest Parent SEC Report, (i) the
\nbusiness of Parent and its subsidiaries has been carried on only in the ordinary
\nand usual course, and (ii) to the knowledge of Parent, none of Parent or its
\nsubsidiaries has incurred any liabilities of any nature, whether or not accrued,
\ncontingent or otherwise, which would have, and there have been no events,
\nchanges or effects with respect to Parent or its subsidiaries which would have,
\na Parent Material Adverse Effect. For purposes of this Agreement, “knowledge of
\nthe Parent” means the actual knowledge of any executive officer or member of the
\nBoard of Directors of the Parent as listed in Section 3.8 of the Parent
\nDisclosure Schedule.<\/p>\n
SECTION 3.9. Litigation. Except as publicly disclosed by
\nParent in the Company SEC Reports or disclosed in Section 3.9 of the Parent
\nDisclosure Schedule, there is no suit, claim, action, proceeding or
\ninvestigation pending or, to the knowledge of Parent, threatened against Parent
\nor any of its subsidiaries or any of their respective properties or assets which
\n(i) would have, individually or in the aggregate, a Parent Material Adverse
\nEffect or (ii) as of the date hereof, questions the validity of this Agreement
\nor any action to be taken by Parent in connection with the consummation of the
\ntransactions contemplated hereby or could otherwise prevent or delay the
\nconsummation of the transactions contemplated by this Agreement. Except as
\npublicly disclosed by Parent, none of Parent or its subsidiaries is subject to
\nany outstanding order, writ, injunction or decree which would have a Parent
\nMaterial Adverse Effect or would prevent or delay the consummation of the
\ntransactions contemplated hereby.<\/p>\n
SECTION 3.10. Compliance with Applicable Law. Except as
\npublicly disclosed by Parent in the Parent SEC Reports, Parent and its
\nsubsidiaries hold all permits, licenses, variances, exemptions, orders and
\napprovals of all Governmental Entities necessary for the conduct of their
\nrespective businesses as presently conducted (the “Parent Permits”), except for
\nfailures to hold such permits, licenses, variances, exemptions, orders and
\napprovals which would have a Parent Material Adverse Effect. Except as publicly
\ndisclosed by Parent in the Parent SEC Reports, Parent and its subsidiaries are
\nin compliance with the terms of the Parent Permits, except where the failure so
\nto comply would not have a Parent Material Adverse Effect. Except as publicly
\ndisclosed by Parent in the Parent SEC Reports, the businesses of Parent and its
\nsubsidiaries are not being conducted in violation of any law, ordinance or
\nregulation of any Governmental Entity, except for violations or possible
\nviolations which would not have a Parent Material Adverse Effect. Except as
\npublicly disclosed by Parent in the Parent SEC Reports, to the knowledge of
\nParent, no investigation or review by any Governmental Entity with respect to
\nParent or its subsidiaries is pending or threatened, nor, to the knowledge of
\nParent, has any Governmental Entity indicated an intention to conduct the same,
\nother than, in each case, those which would not have a Parent Material Adverse
\nEffect.<\/p>\n
SECTION 3.11. Tax Matters. Neither Parent nor any of its
\naffiliates has taken or agreed to take any action that would prevent the Merger
\nfrom constituting a reorganization qualifying under the provisions of Section
\n368(a) of the Code.<\/p>\n
SECTION 3.12. Products. Except as disclosed in the Parent SEC
\nReports and except for the products to be acquired pursuant to the Telectronics
\nAgreements, as to which no representation or warranty is being made hereunder:<\/p>\n
(a) Each of the products currently being produced or sold by
\nParent and its subsidiaries (i) is in compliance in all material respects with
\nall applicable U.S. federal, state and local laws and regulations and (ii)
\nconforms in all material respects to any promises or affirmations of fact made
\non the container or label for such product or in connection with its sale;<\/p>\n
(b) To the knowledge of Parent, no facts exist which would
\nreasonably be expected to furnish a substantial basis for the recall, withdrawal
\nor suspension by Parent or any of its subsidiaries of any such product as a
\nresult of, or in order to comply with, any U.S. federal, state or local law,
\nregulation or rule or order of any Governmental Entity, except for such recalls,
\nwithdrawals or suspensions as would not have a Parent Material Adverse Effect;<\/p>\n
(c) All products sold under all licenses and approvals granted
\nby or pending with any Governmental Entity in any country to market any product
\nof Parent and it subsidiaries (the “Parent Product Registrations”) are
\nmanufactured and marketed in all material respects in accordance with the
\nspecifications and standards contained in the Parent Product Registrations.
\nParent and its subsidiaries have the sole rights under the Parent Product
\nRegistrations in the United States and such registrations are in full force and
\neffect; and<\/p>\n
(d) As of the date hereof, there are no pending and
\nunsatisfied statements, citations, warning letters, FDA Forms 483, or decisions
\nby any United States Governmental Entity that any product produced,
\nmanufactured, marketed or distributed by Parent or any of its subsidiaries is
\ndefective or fails to meet any applicable standards promulgated by any such
\nUnited States Governmental Entity. There is no proceeding by the FDA or any
\nother United States Governmental Agency, including, but not limited to, a grand
\njury investigation, a 405 hearing or a civil penalty proceeding, pending, or to
\nParent’s knowledge threatened, against Parent or any of its subsidiaries,
\nrelating to the safety or efficacy of the products of Parent and its
\nsubsidiaries and, to Parent’s knowledge, there is no basis for such a
\nproceeding.<\/p>\n
SECTION 3.13. Intangible Property. To Parent’s knowledge,
\nParent and its subsidiaries own or possess adequate licenses or other valid
\nrights to use all patents, patent rights, trademarks, trademark rights, trade
\nnames, trade name rights, copyrights, service marks, trade secrets, applications
\nfor trademarks and for service marks, know-how and other proprietary rights and
\ninformation used or held for use in connection with the business of Parent and
\nits subsidiaries as currently conducted, except for failures to own or possess
\nadequate licenses or other valid rights to use any of the foregoing which would
\nnot have a Parent Material Adverse Effect, and, except as set forth in the
\nParent SEC Reports or Section 3.13 of the Parent Disclosure Schedule, to the
\nknowledge of Parent there are no pending assertions or claims challenging the
\nvalidity of any of the foregoing which would have a Parent Material Adverse
\nEffect. Except as disclosed in Section 3.13 of the Parent Disclosure Schedule,
\nto Parent’s knowledge, there are no pending claims or notices that the
\nmanufacture and sale of Parent’s products infringes the patents of any third
\nparty.<\/p>\n
SECTION 3.14. Brokers. No broker, finder or investment banker
\n(other than CS First Boston) is entitled to any brokerage, finder’s or other fee
\nor commission or expense reimbursement in connection with the transactions
\ncontemplated by this Agreement based upon arrangements made by and on behalf of
\nParent or Acquisition or any of their affiliates.<\/p>\n
SECTION 3.15. Accounting Matters. Neither Parent nor, to the
\nbest of its knowledge, any of its affiliates, has taken or agreed to take any
\naction that would prevent Parent from accounting for the business combination to
\nbe effected by the Merger as a “pooling-of-interests.” Parent has not failed to
\nbring to the attention of the Company any actions, or agreements or
\nunderstandings, whether written or oral, to act that would be reasonably likely
\nto prevent Parent from accounting for the Merger as a “pooling-of-interests.”<\/p>\n
SECTION 3.16. Telectronics Agreements. Parent has furnished to
\ncounsel to the Company true, complete and correct copies of all Telectronics
\nAgreements in effect as of the date of this Agreement and any written documents,
\ninstruments or other arrangements executed by the parties thereto in connection
\ntherewith.<\/p>\n
SECTION 3.17. Medtronic Agreement. The License Agreement,
\ndated August 26, 1992, between Medtronic Inc. and Siemens AG as assigned to
\nParent on August 23, 1994 is in full force and effect and will not by its terms
\nterminate by reason of the Merger.<\/p>\n
ARTICLE 4<\/p>\n
COVENANTS<\/p>\n
SECTION 4.1. Conduct of Business of the Company and Parent.<\/p>\n
(a) Except as contemplated by this Agreement or Section 4.1 of
\nthe Company Disclosure Schedule, during the period from the date hereof to the
\nEffective Time, the Company will, and will cause each of its subsidiaries to,
\nconduct its operations in the ordinary course of business consistent with past
\npractice and, to the extent consistent therewith, with no less diligence and
\neffort than would be applied in the absence of this Agreement, seek to preserve
\nintact its current business organizations, seek to keep available the service of
\nits current officers and employees and seek to preserve its relationships with
\ncustomers, suppliers and others having business dealings with it. Without
\nlimiting the generality of the foregoing, and except as otherwise expressly
\nprovided in this Agreement, prior to the Effective Time, neither the Company nor
\nany of its subsidiaries will, without the prior written consent of Parent, which
\nconsent shall not be unreasonably withheld:<\/p>\n
(i) amend its certificate of incorporation or bylaws (or other
\n similar governing instrument);<\/p>\n
(ii) authorize for issuance, issue, sell, deliver or agree or
\n commit to issue, sell or deliver (whether through the issuance or
\n granting of options, warrants, commitments, subscriptions, rights to
\n purchase or otherwise) any stock of any class or any other securities
\n or equity equivalents (including, without limitation, any stock options
\n or stock appreciation rights), except for the sale of up to 78,813
\n shares of Company Common Stock to employees under the ESPP, the
\n issuance of shares of Company Common Stock pursuant to the conversion
\n of the Convertible Notes in accordance with the terms thereof and the
\n issuance or sale of shares of Company Common Stock pursuant to
\n outstanding options granted prior to the date hereof under the Company
\n Plans (in each case, in the ordinary course of business and consistent
\n with past practice);<\/p>\n
(iii) split, combine or reclassify any shares of its capital
\n stock, declare, set aside or pay any dividend or other distribution
\n (whether in cash, stock or property or any combination thereof) in
\n respect of its capital stock, make any other actual, constructive or
\n deemed distribution in respect of any shares of its capital stock or
\n otherwise make any payments to stockholders in their capacity as such,
\n or, except as set forth in Section 4.1(c) below, redeem or otherwise
\n acquire any of its securities or any securities of any of its
\n subsidiaries;<\/p>\n
(iv) adopt a plan of complete or partial liquidation,
\n dissolution, merger, consolidation, restructuring, recapitalization or
\n other reorganization of the Company or any of its subsidiaries (other
\n than the Merger);<\/p>\n
(v) alter through merger, liquidation, reorganization,
\n restructuring or in any other fashion the corporate structure or
\n ownership of any subsidiary in a manner that would have a Company
\n Material Adverse Effect;<\/p>\n
(vi) (A) incur or assume any long-term or short-term debt or
\n issue any debt securities except for borrowings under existing lines of
\n credit in the ordinary course of business and in amounts not material
\n to the Company and its subsidiaries taken as a whole; (B) assume,
\n guarantee, endorse or otherwise become liable or responsible (whether
\n directly, contingently or otherwise) for the obligations of any other
\n person except in the ordinary course of business consistent with past
\n practice and in amounts not material to the Company and its
\n subsidiaries, taken as a whole, and except for obligations of the
\n wholly owned subsidiaries of the Company; (C) make any loans, advances
\n or capital contributions to, or investments in, any other person (other
\n than to the wholly owned subsidiaries of the Company or customary loans
\n or advances to employees in the ordinary course of business consistent
\n with past practice and in amounts not material to the maker of such
\n loan or advance); (D) pledge or otherwise encumber shares of capital
\n stock of the Company or its subsidiaries; or (E) mortgage or pledge any
\n of its material assets, tangible or intangible, or create, grant or
\n incur any material Lien thereupon;<\/p>\n
(vii) except as may be required by law or as contemplated by
\n this Agreement, enter into, adopt or amend or terminate any bonus,
\n profit sharing, compensation, severance, termination, stock option
\n (except for normal grants to newly hired or current employees,
\n consistent with past practice), stock appreciation right, restricted
\n stock, performance unit, stock equivalent, stock purchase agreement,
\n pension, retirement, deferred compensation, employment, severance or
\n other employee benefit agreement, trust, plan, fund, award or other
\n arrangement for the benefit or welfare of any director, officer or
\n employee in any manner, or (except for normal increases in the ordinary
\n course of business consistent with past practice that, in the
\n aggregate, do not result in a material increase in benefits or
\n compensation expense to the Company, and as required under existing
\n agreements or in the ordinary course of business generally consistent
\n with past practice) increase in any manner the compensation or fringe
\n benefits of any director, officer or employee or pay any benefit not
\n required by any plan and arrangement as in effect as of the date hereof
\n (including, without limitation, the granting of stock appreciation
\n rights or performance units);<\/p>\n
(viii) acquire, sell, lease or dispose of any assets outside
\n the ordinary course of business or any assets which in the aggregate
\n are material to the Company and its subsidiaries taken as a whole,
\n enter into any commitment or transaction outside the ordinary course of
\n business or grant any exclusive distribution rights;<\/p>\n
(ix) except as may be required as a result of a change in law
\n or in generally accepted accounting principles, change any of the
\n accounting principles or practices used by it;<\/p>\n
(x) revalue in any material respect any of its assets,
\n including, without limitation, writing down the value of inventory or
\n writing-off notes or accounts receivable other than in the ordinary
\n course of business or as required by generally accepted accounting
\n principles;<\/p>\n
(xi) (A) acquire (by merger, consolidation, or acquisition of
\n stock or assets) any corporation, partnership or other business
\n organization or division thereof or any equity interest therein; (B)
\n enter into any contract or agreement, other than in the ordinary course
\n of business or amend in any material respect any of the Contracts or
\n the agreements referred to in Section 2.18; (C) authorize any new
\n capital expenditure or expenditures which, individually, is in excess
\n of $500,000 or, in the aggregate, are in excess of $5 million;
\n PROVIDED, that none of the foregoing shall limit any capital
\n expenditure already included in the Company’s fiscal 1996 or fiscal
\n 1997 capital expenditure budget provided to Parent prior to the date
\n hereof; or (D) enter into or amend any contract, agreement, commitment
\n or arrangement providing for the taking of any action that would be
\n prohibited hereunder;<\/p>\n
(xii) make or revoke any tax election or settle or compromise
\n any tax liability in a manner that involves the payment of a sum of
\n money in excess of $100,000 or change (or make a request to any taxing
\n authority to change) any material aspect of its method of accounting
\n for tax purposes;<\/p>\n
(xiii) pay, discharge or satisfy any material claims,
\n liabilities or obligations (absolute, accrued, asserted or unasserted,
\n contingent or otherwise), other than the payment, discharge or
\n satisfaction in the ordinary course of business of liabilities
\n reflected or reserved against in, or contemplated by, the consolidated
\n financial statements (or the notes thereto) of the Company and its
\n subsidiaries or incurred in the ordinary course of business consistent
\n with past practice;<\/p>\n
(xiv) settle or compromise any pending or threatened suit,
\n action or claim relating to the transactions contemplated hereby in a
\n manner that involves the payment of a sum of money in excess of
\n $100,000 or that imposes material non-monetary obligations on the
\n Company; or<\/p>\n
(xv) take, propose to take, or agree in writing or otherwise
\n to take, any of the actions described above or any action which would
\n make any of the representations or warranties of the Company contained
\n in this Agreement untrue or incorrect in any material respect.<\/p>\n
(b) Except as otherwise expressly provided in this Agreement,
\nprior to the Effective Time, neither Parent nor any of its subsidiaries will,
\nwithout the prior written consent of the Company, which consent shall not be
\nunreasonably withheld:<\/p>\n
(i) amend its certificate of incorporation or bylaws (or other
\n similar governing instrument);<\/p>\n
(ii) authorize for issuance, issue, sell, deliver or agree or
\n commit to issue, sell or deliver (whether through the issuance or
\n granting of warrants, commitments, subscriptions, rights to purchase or
\n otherwise) any stock of any class or any other securities or equity
\n equivalents, except for the sale of shares of Parent Common Stock to
\n employees under the Parent’s employee stock purchase savings plan, the
\n issuance of shares of Parent Common Stock pursuant to outstanding
\n options granted prior to the date hereof under the Parent’s employee
\n stock option plans and the grant of options after the date hereof (and
\n the issuance of shares pursuant thereto) pursuant to such plans (in
\n each case, in the ordinary course of business and consistent with past
\n practice);<\/p>\n
(iii) split, combine or reclassify any shares of its capital
\n stock, declare, set aside or pay any dividend or other distribution
\n (whether in cash, stock or property or any combination thereof) in
\n respect of its capital stock (other than in respect of periodic regular
\n cash dividends), make any other actual, constructive or deemed
\n distribution in respect of any shares of its capital stock or otherwise
\n make any payments to stockholders in their capacity as such, or redeem
\n or otherwise acquire any of its securities or any securities of any of
\n its subsidiaries;<\/p>\n
(iv) adopt a plan of complete or partial liquidation,
\n dissolution, merger, consolidation, restructuring, recapitalization or
\n other reorganization of Parent or any of its subsidiaries (other than
\n the Merger);<\/p>\n
(v) alter through merger, liquidation, reorganization,
\n restructuring or in any other fashion the corporate structure or
\n ownership of any subsidiary in a manner that would have a Parent
\n Material Adverse Effect;<\/p>\n
(vi) except as may be required as a result of a change in law
\n or in generally accepted accounting principles, change any of the
\n accounting principles or practices used by it; or<\/p>\n
(vii) take, propose to take, or agree in writing or otherwise
\n to take, any of the actions described above or any actions which would
\n make any of the representations or warranties of the Company contained
\n in this Agreement untrue or incorrect in any material respect.<\/p>\n
(c) Notwithstanding the provisions of Section 4.1(a) hereof,
\n following the public announcement of the execution of this Agreement
\n and prior to the Effective Time, the Company shall repurchase in open
\n market transactions 200,000 shares of Company Common Stock outstanding
\n on the date hereof.<\/p>\n
SECTION 4.2. Preparation of S-4 and the Proxy Statement. The
\nCompany will, as promptly as practicable, prepare and file with the SEC the
\nProxy Statement in connection with the vote of the stockholders of the Company
\nwith respect to the Merger. Parent will, as promptly as practicable, prepare,
\nfollowing receipt of notification from the SEC that it has no further comments
\non the Proxy Statement, and file with the SEC the S-4, containing a proxy
\nstatement\/prospectus and form of proxy, in connection with the registration
\nunder the Securities Act of the shares of Parent Common Stock issuable upon
\nconversion of the Shares and the other transactions contemplated hereby. Parent
\nand the Company will, and will cause their accountants and lawyers to, use all
\nreasonable best efforts to have or cause the S-4 declared effective as promptly
\nas practicable, including, without limitation, causing their accountants to
\ndeliver necessary or required instruments such as opinions, consents and
\ncertificates, and will take any other action required or necessary to be taken
\nunder federal or state securities laws or otherwise in connection with the
\nregistration process. The Company will use its reasonable best efforts to cause
\nthe Proxy Statement to be mailed to its stockholders at the earliest practicable
\ndate.<\/p>\n
SECTION 4.3. No Solicitation.<\/p>\n
(a) Until the earlier of the Effective Time or the termination
\nof this Agreement, the Company agrees that neither it nor any of its
\nsubsidiaries, nor any of the officers, directors or employees of it or its
\nsubsidiaries shall, and it shall direct and use its best efforts to cause its
\nand its subsidiaries’ representatives and agents (including, without limitation,
\nany investment banker, attorney or accountant retained by the Company or any of
\nits subsidiaries), not to, directly or indirectly, initiate, solicit or
\nknowingly encourage (including by way of furnishing non-public information or
\nassistance), or take any other action knowingly to facilitate, any inquiries or
\nthe making of any proposal that constitutes, or may reasonably be expected to
\nlead to, an Acquisition Proposal (as defined below), or enter into or maintain
\nor continue discussions or negotiate with any person or entity in furtherance of
\nsuch inquiries or to obtain an Acquisition Proposal or agree to or endorse any
\nAcquisition Proposal; provided, however, that nothing in this Agreement shall
\nprohibit the Company Board from (i) complying with Rule 14e-2 promulgated under
\nthe Exchange Act with regard to an Acquisition Proposal or (ii) furnishing
\ninformation to, or entering into discussions or negotiations with, any person or
\nentity that makes an unsolicited Acquisition Proposal after the date of this
\nAgreement, if, in the case referred to in clause (ii) above, the Company Board,
\nafter consultation with and based upon the advice of independent legal counsel,
\ndetermines in good faith that such action is likely to be required for the
\nCompany Board to comply with its fiduciary duties to stockholders under
\napplicable law and, prior to taking such action, the Company receives from such
\nperson or entity an executed confidentiality agreement in reasonably customary
\nform. For purposes of this Agreement, “Acquisition Proposal” means an inquiry,
\noffer or proposal regarding any of the following (other than the transactions
\ncontemplated by this Agreement) involving the Company or any of its
\nsubsidiaries: (w) any merger, consolidation, share exchange, recapitalization,
\nbusiness combination or other similar transaction; (x) any sale, lease,
\nexchange, mortgage, pledge, transfer or other disposition of all or
\nsubstantially all the assets of the Company and its subsidiaries, taken as a
\nwhole, in a single transaction or series of related transactions; (y) any tender
\noffer or exchange offer for 20 percent or more of the outstanding shares of
\nCompany Common Stock or the filing of a registration statement under the
\nSecurities Act in connection therewith; or (z) any public announcement of a
\nproposal, plan or intention to do any of the foregoing or any agreement to
\nengage in any of the foregoing.<\/p>\n
(b) Except as set forth in this Section 4.3(b), the Company
\nBoard shall not (i) withdraw or modify, or propose to withdraw or modify, in a
\nmanner adverse to Parent, the approval or recommendation by the Company Board,
\n(ii) approve or recommend, or propose to approve or recommend, any Acquisition
\nProposal or (iii) cause the Company to enter into any agreement with respect to
\nany Acquisition Proposal. Notwithstanding the foregoing, if the Board of
\nDirectors of the Company, after consultation with and based upon the advice of
\nindependent legal counsel, determines in good faith that it is necessary to do
\nso in order to comply with its fiduciary duties to stockholders under applicable
\nlaw, the Company Board may approve or recommend a Superior Proposal (as defined
\nbelow) or cause the Company to enter into an agreement with respect to a
\nSuperior Proposal, but in each case only (i) after providing reasonable written
\nnotice to Parent (a “Notice of Superior Proposal”) advising Parent that the
\nCompany Board has received a Superior Proposal, specifying the material terms
\nand conditions of such Superior Proposal and identifying the person making such
\nSuperior Proposal and (ii) if Parent does not make within 48 hours of Parent’s
\nreceipt of the Notice of Superior Proposal, an offer which the Company Board,
\nafter consultation with its financial advisors, determines is superior to such
\nSuperior Proposal. For purposes of this Agreement, a “Superior Proposal” means
\nany bona fide Acquisition Proposal that the Company Board determines in its good
\nfaith judgment (based on the advice of a financial advisor of nationally
\nrecognized reputation) to be more favorable to the Company’s stockholders than
\nthe Merger.<\/p>\n
SECTION 4.4. Intentionally omitted.<\/p>\n
SECTION 4.5. Stockholder Meeting. The Company shall call a
\nmeeting of its stockholders to be held as promptly as practicable for the
\npurpose of voting upon this Agreement and related matters. The Company will,
\nthrough the Company Board recommend to its stockholders approval of such
\nmatters; PROVIDED, HOWEVER, that the Company Board may withdraw its
\nrecommendation if the Company Board by a majority vote determines in its good
\nfaith judgment, after consultation with and based upon the advice of independent
\nlegal counsel, that it is necessary to do so to comply with its fiduciary duties
\nto stockholders under applicable law.<\/p>\n
SECTION 4.6. Access to Information.<\/p>\n
(a) Between the date hereof and the Effective Time, upon
\nreasonable notice and except as may be otherwise required by applicable law,
\neach party (for these purposes, Parent and Acquisition shall be deemed to be one
\nparty) will give to the other party and the other party’s authorized
\nrepresentatives reasonable access during normal business hours to its employees,
\nplants, offices, warehouses and other facilities and to all of its books and
\nrecords, will permit the other party to make such inspections as the other party
\nmay reasonably require and will cause its officers and those of its subsidiaries
\nto furnish the other party with such financial and operating data and other
\ninformation with respect to its business, properties and personnel as the other
\nparty may from time to time reasonably request, provided that no investigation
\npursuant to this Section 4.6(a) shall affect or be deemed to modify any of the
\nrepresentations or warranties made herein and provided, further, that the
\nforegoing shall not require either party to permit any inspection, or to
\ndisclose any information, that in its reasonable judgment would result in the
\nviolation of any of its obligations to a third party with respect to
\nconfidentiality if it shall have used best efforts to obtain the consent of such
\nthird party to such inspection or disclosure.<\/p>\n
(b) Between the date hereof and the Effective Time, the
\nCompany shall furnish to Parent and Acquisition within five business days after
\nthe delivery thereof to management, such monthly financial statements and data
\nas are regularly prepared for distribution to Company management. At the
\nearliest time they are available, each party shall furnish to the other party
\nsuch quarterly and annual financial statements as are prepared for its SEC
\nfilings, which shall be in accordance with its books and records.<\/p>\n
(c) Parent will furnish to counsel to the Company true,
\ncomplete and correct copies of all Telectronics Agreements (and any written
\ndocuments, instruments or other arrangements executed by the parties thereto in
\nconnection therewith) executed following the date hereof and on or prior to the
\nEffective Time.<\/p>\n
(d) Each party will hold and will cause its consultants and
\nadvisors to hold in confidence all documents and information concerning the
\nother party furnished to it in connection with the transactions contemplated by
\nthis Agreement pursuant to the terms of the Confidentiality Agreements entered
\ninto between the Company and Parent dated August 30, 1996.<\/p>\n
SECTION 4.7. Additional Agreements; Best Efforts. Subject to
\nthe terms and conditions herein provided, each of the parties hereto agrees to
\nuse its best efforts to take, or cause to be taken, all action, and to do, or
\ncause to be done, all things necessary, proper or advisable under applicable
\nlaws and regulations to consummate and make effective the transactions
\ncontemplated by this Agreement and the Telectronics Agreements as soon as
\npracticable, including, without limitation, (i) cooperation in the preparation
\nand filing of the Proxy Statement and the S-4 and any amendments to any thereof;
\n(ii) the taking of all action necessary, proper or advisable to secure any
\nnecessary consents of all third parties and Governmental Entities; (iii)
\ncontesting and resisting any legal proceeding relating to the Merger or the
\nTelectronics Agreements and having vacated, lifted, reversed or overturned any
\ndecree, judgment or other order that restricts, prevents or prohibits the Merger
\nor any other transaction contemplated hereby or by the Telectronics Agreements;
\nand (iv) the execution of any additional instruments, including the Certificate
\nof Merger, necessary to consummate the transactions contemplated hereby. In case
\nat any time after the Effective Time any further action is necessary to carry
\nout the purposes of this Agreement, the proper officers and directors of each
\nparty hereto shall take all such necessary action. Notwithstanding the
\nprovisions of this Section 4.7, except for contractual arrangements in effect on
\nthe date hereof, neither party shall be required to pay any amounts of money to
\nthird parties to secure any consent or approval or to agree to any request or
\nrequirement of any Governmental Entity that would materially impair or diminish
\nthe benefits or ownership rights expected to be derived by Parent or the Company
\nfrom the transactions contemplated by this Agreement and the Telectronics
\nAgreements.<\/p>\n
SECTION 4.8. Antitrust Reviews. Each party hereto will use its
\nbest efforts (a) to file with the US Department of Justice and US Federal Trade
\nCommission, as soon as practicable after the date hereof, the Notification and
\nReport Form under the HSR Act and any supplemental information or material
\nrequested pursuant to the HSR Act, and (b) to comply as soon as practicable
\nafter the date hereof with any other laws of any country and the European Union
\nunder which any consent, authorization, registration, declaration or other
\naction with respect to the transactions contemplated herein may be required.
\nEach party hereto shall furnish to the other such information and assistance as
\nthe other may reasonably request in connection with any filing or other act
\nundertaken in compliance with the HSR Act or other such laws, and shall keep
\neach other timely apprised of the status of any communications with, and any
\ninquiries or requests for additional information from, any Governmental Entity
\nunder the HSR Act or other such laws.<\/p>\n
SECTION 4.9. Public Announcements. Each of Parent, Acquisition
\nand the Company will consult with one another before issuing any press release
\nor otherwise making any public statements with respect to the transactions
\ncontemplated by this Agreement, including, without limitation, the Merger, and
\nshall not issue any such press release or make any such public statement or any
\nfiling with any third party or Governmental Entity prior to such consultation.<\/p>\n
SECTION 4.10. Indemnification; Directors’ and Officers’
\nInsurance.<\/p>\n
(a) Indemnification. From and after the Effective Time, Parent
\nshall, to the fullest extent permitted by applicable law, indemnify, defend and
\nhold harmless each person who is now, or has been at any time prior to the date
\nhereof, or who becomes prior to the Effective Time, a director, officer or
\nemployee of the Company or any subsidiary thereof (each an “Indemnified Party”
\nand, collectively, the “Indemnified Parties”) against all losses, expenses and
\ncosts (including reasonable attorneys’ fees and expenses), claims, damages or
\nliabilities or, subject to the proviso of the next succeeding sentence, amounts
\npaid in settlement, arising out of actions or omissions occurring at or prior to
\nthe Effective Time and whether asserted or claimed prior to, at or after the
\nEffective Time that are in whole or in part (i) based on, or arising out of the
\nfact that such person is or was a director, officer or employee of the Company
\nor one or more of its subsidiaries or (ii) based on, arising out of or
\npertaining to the transactions contemplated by this Agreement. Parent hereby
\nagrees that any loss, expense, cost (including reasonable attorneys’ fees and
\nexpenses), claims, damages or liability suffered by any director, officer or
\nemployee of the Company arising out of any claim initiated by Intermedics, Inc.,
\nPeter Dorflinger or any other officer or employee of Intermedics, Inc. shall be
\ndeemed to be a loss, expense, cost, claim, damage or liability arising out of
\nthe fact that such person is or was a director, officer or employee of the
\nCompany or one or more of its subsidiaries. In the event of any loss, expense,
\nclaim, damage or liability (whether or not arising before the Effective Time)
\ndescribed in the first sentence of this Section 4.10(a), (i) Parent shall pay
\nthe reasonable fees and expenses of counsel selected by the Indemnified Parties,
\nwhich counsel shall be reasonably satisfactory to Parent, promptly after
\nstatements therefor are received and otherwise advance to such Indemnified Party
\nupon request reimbursement of documented expenses reasonably incurred, in either
\ncase to the extent not prohibited by the DGCL and upon receipt of any
\naffirmation and undertaking required by the DGCL, (ii) Parent will cooperate in
\nthe defense of any such matter and (iii) any determination required to be made
\nwith respect to whether an Indemnified Party’s conduct complies with the
\nstandards set forth under the DGCL and Parent’s articles of incorporation or
\nbylaws shall be made by independent counsel mutually acceptable to Parent and
\nthe Indemnified Party; PROVIDED, HOWEVER, that Parent shall not be liable for
\nany settlement effected without its written consent (which consent shall not be
\nreasonably withheld). The Indemnified Parties as a group may retain only one law
\nfirm with respect to each related matter except to the extent there is, in the
\nopinion of counsel to an Indemnified Party, under applicable standards of
\nprofessional conduct, a conflict on any significant issue between positions of
\nany two or more Indemnified Parties.<\/p>\n
(b) Insurance. For a period of three years after the Effective
\nTime, Parent shall cause to be maintained in effect the policies of directors’
\nand officers’ liability insurance maintained by the Company for the benefit of
\nthose persons who are covered by such policies at the Effective Time (or Parent
\nmay substitute therefor policies of at least the same coverage with respect to
\nmatters occurring prior to the Effective Time), to the extent that such
\nliability insurance can be maintained annually at a cost to Parent not greater
\nthan 150 percent of the premium for the current Company directors’ and officers’
\nliability insurance; provided that if such insurance cannot be so maintained or
\nobtained at such costs, Parent shall maintain or obtain as much of such
\ninsurance as can be so maintained or obtained at a cost equal to 150 percent of
\nthe current annual premiums of the Company for such insurance.<\/p>\n
(c) Successors. In the event Parent or any of its successors
\nor assigns (i) consolidates with or merges into any other person and shall not
\nbe the continuing or surviving corporation or entity or such consolidation or
\nmerger or (ii) transfers all or substantially all of its properties and assets
\nto any person, then and in either such case, proper provision shall be made so
\nthat the successors and assigns of Parent shall assume the obligations set for
\nin this Section 4.10.<\/p>\n
(d) Survival of Indemnification. To the fullest extent
\npermitted by law, from and after the Effective Time, all rights to
\nindemnification now existing in favor of the employees, agents, directors or
\nofficers of the Company and its subsidiaries with respect to their activities as
\nsuch prior to the Effective Time, as provided in the Company’s certificate of
\nincorporation or bylaws, in effect on the date thereof or otherwise in effect on
\nthe date hereof, shall survive the Merger and shall continue in full force and
\neffect for a period of not less than six years from the Effective Time.<\/p>\n
(e) Benefit. The provisions of this Section 4.10 are intended
\nto be for the benefit of, and shall be enforceable by, each Indemnified Party,
\nhis or her heirs and his or her representatives.<\/p>\n
SECTION 4.11. Notification of Certain Matters. The Company
\nshall give prompt notice to Parent and Acquisition, and Parent and Acquisition
\nshall give prompt notice to the Company, of the status of matters relating to
\ncompletion of the transactions contemplated hereby, including (i) the occurrence
\nor nonoccurrence of any event the occurrence or nonoccurrence of which would be
\nlikely to cause any representation or warranty contained in this Agreement to be
\nuntrue or inaccurate in any material respect at or prior to the Effective Time,
\n(ii) any material failure of the Company, Parent or Acquisition, as the case may
\nbe, to comply with or satisfy any covenant, condition or agreement to be
\ncomplied with or satisfied by it hereunder, (iii) any notice of, or other
\ncommunication relating to, a default or event which, with notice or lapse of
\ntime or both, would become a default, received by it or any of its subsidiaries
\nsubsequent to the date of this Agreement and prior to the Effective Time, under
\nany contract or agreement material to the financial condition, properties,
\nbusinesses or results of operations of it and its subsidiaries taken as a whole
\nto which it or any of its subsidiaries is a party or is subject, (iv) any notice
\nor other communication from any third party or Governmental Entity with respect
\nto the Merger or the other transactions contemplated hereby or alleging that the
\nconsent of such third party or Governmental Entity is or may be required in
\nconnection with the Merger or the other transactions contemplated by this
\nAgreement, or (v) any material adverse change in their respective financial
\ncondition, properties, businesses or results of operations, taken as a whole,
\nother than changes resulting from general economic conditions; PROVIDED,
\nHOWEVER, that the delivery of any notice pursuant to this Section 4.11 shall not
\ncure such breach or non-compliance or limit or otherwise affect the remedies
\navailable hereunder to the party receiving such notice.<\/p>\n
SECTION 4.12. Pooling. The Company and Parent each agrees that
\nit will not take any action which could prevent the Merger from being accounted
\nfor as a “pooling-of-interests” for accounting purposes, and the Company will
\nbring to the attention of Parent, and Parent will bring to the attention of the
\nCompany, any actions, or agreements or understandings, whether written or oral,
\nthat could be reasonably likely to prevent Parent from accounting for the Merger
\nas a “pooling-of-interests.” The Company and Parent shall use their best efforts
\nto cause Ernst & Young LLP (“E&Y”) to deliver to Parent and the Company a
\nletter, addressed to the Company and Parent, stating that after appropriate
\nreview of this Agreement and based upon its familiarity with the Company and
\nParent, following the Merger the Company and Parent are entities that qualify as
\nparties to a pooling of interests transaction under Opinion 16 of the Accounting
\nPrinciples Board and applicable SEC rules and regulations. Each party will
\ninform all Company Affiliates (as hereinafter defined in Section 4.15) and other
\nrelevant affiliates and employees of the parties as to those actions that should
\nor should not be taken by such persons so that the Merger will be accounted for
\nas a “pooling-of-interests” and will use its best efforts to cause such
\naffiliates and persons employed by it to take or not take such actions as either
\nparty may be informed by any Governmental Entity are necessary to be taken or
\nnot to be taken so that the Merger will be accounted for as a
\n“pooling-of-interests.”<\/p>\n
SECTION 4.13. Tax-Free Reorganization Treatment. The Company,
\nParent and Acquisition shall execute and deliver to Sullivan & Cromwell, counsel
\nto the Company, and Weil, Gotshal & Manges LLP, counsel to Parent, certificates
\ncontaining customary representations, at such time or times as reasonably
\nrequested by such law firms in connection with their respective deliveries of
\nopinions with respect to the transactions contemplated hereby.<\/p>\n
SECTION 4.14. Employee Matters.<\/p>\n
(a) For the period commencing with the Effective Time and
\nending on June 30, 1998, Parent shall and shall cause its subsidiaries to
\nmaintain with respect to their employees who had been employed by the Company or
\nany of its subsidiaries (i) base salary or regular hourly wage rates for each
\nsuch employee at not less than the rate applicable immediately prior to the
\nMerger to such employee, and (ii) benefits under employee benefit plans (as
\ndefined for purposes of Section 3(3) of ERISA), other than employee benefits as
\nto which the employees’ interests are based upon the Shares, which are
\nsubstantially comparable in the aggregate to such benefits provided by the
\nCompany and its subsidiaries immediately prior to the Merger. Thereafter, in
\nParent’s discretion, either (i) the provisions of the preceding sentence shall
\nbe complied with by Parent or (ii) employees of the Company and its subsidiaries
\nshall be treated no less favorably under the compensation and benefits programs
\nof Parent than other similarly situated employees of Parent and its
\nsubsidiaries.<\/p>\n
(b) Parent and its subsidiaries shall credit employees of the
\nCompany and its subsidiaries with their service prior to the Merger with the
\nCompany and its subsidiaries to the same extent such service was counted under
\nthe Company ERISA Plans for all purposes other than benefit accruals under the
\ndefined benefit pension plans of Parent and its subsidiaries.<\/p>\n
(c) Parent will, and will cause the Surviving Corporation to,
\nhonor the employment and severance agreements and all other obligations of the
\nSurviving Corporation listed on Section 4.14(c) of the Company Disclosure
\nSchedule. Nothing contained herein shall be construed as requiring Parent or the
\nSurviving Corporation to continue any specific plans or to continue the
\nemployment of any specific person.<\/p>\n
SECTION 4.15. Company Affiliates. Prior to the Effective Time,
\neach of the Company and Parent will deliver to the other a letter identifying
\nall persons who, at the time of the meeting of the Company’s stockholders
\nreferred to in Section 4.5, it believes are its “affiliates” for purposes of
\nRule 145 under the Securities Act and for the purposes of applicable
\ninterpretations regarding the pooling-of-interests method of accounting (the
\npersons identified in the Company’s letter are each hereinafter referred to as a
\n“Company Affiliate” and the persons identified in Parent’s letter are each
\nhereinafter referred to as a “Parent Affiliate”). The Company shall use its best
\nefforts to obtain a written agreement on or prior to the Effective Time from
\neach person who is identified as a Company Affiliate providing that (i) such
\nCompany Affiliate will not sell, pledge, transfer or otherwise dispose of any
\nshares of Parent Common Stock issued to such Company Affiliate pursuant to the
\nMerger, except in compliance with Rule 145 promulgated under the Securities Act
\nor an exemption from the registration requirements of the Securities Act. Each
\nof the Company and Parent shall use its best efforts to obtain a written
\nagreement on or prior to the Effective Time from each Company Affiliate and
\nParent Affiliate, respectively, providing that (ii) on or prior to the earlier
\nof (x) the mailing of the Proxy Statement or (y) the thirtieth day prior to the
\nEffective Time such person will not thereafter sell or in any other way reduce
\nsuch person’s risk relative to any shares of Parent Common Stock (within the
\nmeaning of the SEC’s Financial Reporting Release No. 1, “Codification of
\nFinancing Reporting Policies,” ss. 201.01 47 F.R. 21028 (April 15, 1982)), until
\nsuch time as financial results (including combined sales and net income)
\ncovering at least 30 days of post-merger operations have been published, except
\nas permitted by Staff Accounting Bulletin No. 76 issued by the SEC.<\/p>\n
SECTION 4.16. SEC Filings. Each of Parent and the Company
\nshall promptly provide the other party (or its counsel) with copies of all
\nfilings made by the other party or any of its subsidiaries with the SEC or any
\nother state or federal Governmental Entity in connection with this Agreement and
\nthe transactions contemplated hereby.<\/p>\n
SECTION 4.17. Guarantee of Performance. Parent hereby
\nguarantees the performance by Acquisition of its obligations under this
\nAgreement.<\/p>\n
ARTICLE 5<\/p>\n
CONDITIONS TO CONSUMMATION OF THE MERGER<\/p>\n
SECTION 5.1. Conditions to Each Party’s Obligations to Effect
\nthe Merger. The respective obligations of each party hereto to effect the Merger
\nare subject to the satisfaction at or prior to the Effective Time of the
\nfollowing conditions:<\/p>\n
(a) this Agreement shall have been approved and adopted by the
\nrequisite vote of the stockholders of the Company;<\/p>\n
(b) no statute, rule, regulation, executive order, decree,
\nruling or injunction shall have been enacted, entered, promulgated or enforced
\nby any court or other Governmental Entity and continued in effect which
\nprohibits, restrains, enjoins or restricts the consummation of the Merger;<\/p>\n
(c) any waiting period applicable to the Merger under the HSR
\nAct shall have terminated or expired, and any other governmental or regulatory
\nnotices or approvals required with respect to the transactions contemplated
\nhereby shall have been either filed or received;<\/p>\n
(d) the S-4 shall have become effective under the Securities
\nAct and shall not be the subject of any stop order or proceedings seeking a stop
\norder, and Parent shall have received all state securities laws or “blue sky”
\npermits and authorizations necessary to issue shares of Parent Common Stock in
\nexchange for the Shares in the Merger;<\/p>\n
(e) the Company and Parent each shall have received from E&Y a
\nletter stating that after appropriate review of this Agreement and based upon
\nits familiarity with the Company and Parent, following the Merger the Company
\nand Parent are entities that qualify as parties to a pooling of interests
\ntransaction under Opinion 16 of the Accounting Principles Board and applicable
\nSEC rules and regulations and such letter shall not have been withdrawn or
\nmodified in any material respect;<\/p>\n
(f) [intentionally omitted]; and<\/p>\n
(g) the closing contemplated by the Asset Purchase Agreement
\n(United States), dated as of September 24, 1996, by and among Acquisition,
\nTelectronics Pacing Systems, Inc. and TPLC, Inc. shall have occurred.<\/p>\n
SECTION 5.2. Conditions to the Obligations of the Company. The
\nobligation of the Company to effect the Merger is subject to the satisfaction at
\nor prior to the Effective Time of the following conditions:<\/p>\n
(a) the representations and warranties of Parent and
\nAcquisition contained in this Agreement or in any other document delivered
\npursuant hereto shall be true and correct in all material respects at and as of
\nthe Effective Time with the same effect as if made at and as of the Effective
\nTime (except for the representation and warranty made in the first sentence of
\nSection 3.12(d), which is being made only as of the date of this Agreement), and
\nat the Closing Parent and Acquisition shall have delivered to the Company a
\ncertificate to that effect;<\/p>\n
(b) each of the obligations of Parent and Acquisition to be
\nperformed at or before the Effective Time pursuant to the terms of this
\nAgreement shall have been duly performed in all material respects at or before
\nthe Effective Time, and at the Closing Parent and Acquisition shall have
\ndelivered to the Company a certificate to that effect;<\/p>\n
(c) each Parent Affiliate shall have delivered and performed
\nhis or her obligations under the letter referenced in Section 4.15;<\/p>\n
(d) the shares of Parent Common Stock issuable to the Company
\nstockholders pursuant to this Agreement and such other shares required to be
\nreserved for issuance in connection with the Merger shall have been authorized
\nfor listing on the Nasdaq Stock Market (or any subsequent national securities
\nexchange on which shares of Parent Common Stock are then listed for trading)
\nupon official notice of issuance;<\/p>\n
(e) the opinion of Sullivan & Cromwell, counsel to the
\nCompany, addressed to the Company substantially to the effect that (i) the
\nMerger will be treated for federal income tax purposes as a reorganization
\nwithin the meaning of Section 368(a) of the Code; (ii) each of Parent,
\nAcquisition and the Company will be a party to the reorganization within the
\nmeaning of Section 368(b) of the Code; and (iii) no gain or loss will be
\nrecognized by a stockholder of the Company as a result of the Merger with
\nrespect to Shares converted into shares of Parent Common Stock (other than with
\nrespect to cash received in lieu of fractional shares of Parent Common Stock),
\ndated the Closing Date, shall have been delivered and such opinion shall not
\nhave been withdrawn or modified in any material respect;<\/p>\n
(f) there shall have been no events, changes or effects with
\nrespect to Parent or its subsidiaries (other than such events, changes or
\neffects that arise out of or result from the execution of this Agreement or the
\nproposed consummation of the Merger and the other transactions contemplated
\nhereby) having or which would have a Parent Material Adverse Effect;<\/p>\n
(g) Parent and Acquisition shall have executed with State
\nStreet Bank and Trust Company a supplemental indenture with respect to the
\nConvertible Notes, which supplemental indenture shall provide that upon
\nconsummation of the Merger, (i) Acquisition shall assume the due and punctual
\npayment of the principal of and interest on all the Convertible Notes and the
\nperformance and observance of every covenant to be performed or observed by the
\nCompany under the Indenture under which such Convertible Notes were issued, (ii)
\nthe holder of each Convertible Note outstanding immediately following the Merger
\nthereafter shall have the right to convert such Convertible Note into Parent
\nCommon Stock at the rate of 34.90908 shares of Parent Common Stock for each
\n$1,000 principal amount of the Convertible Notes and (iii) Parent shall assume
\nas a joint obligor Acquisition’s obligations to pay the principal of and
\npremium, if any, and interest on the Convertible Notes;<\/p>\n
(h) the Agreement, dated the date hereof, between Intermedics,
\nInc. and Acquisition (the “Intermedics Consent”) shall be in full force and
\neffect without any modification or amendment that would materially and adversely
\naffect the ability of the Surviving Corporation following the Effective Time to
\nconduct the operations of the Company as such operations are conducted by the
\nCompany on the date of this Agreement;<\/p>\n
(i) Acquisition shall have offered to enter into an employment
\nagreement in the form annexed hereto as Exhibit A with each of the persons
\nlisted in Section 5.2(i) of the Company Disclosure Schedule; and<\/p>\n
(j) Intermedics, Inc. and Acquisition shall have entered into
\nthe 1996 License Agreement referred to in the Intermedics Consent, such 1996
\nLicense Agreement to be in substance as described in the Intermedics Consent as
\ndetermined in the reasonable judgment of the Company.<\/p>\n
SECTION 5.3. Conditions to the Obligations of Parent and
\nAcquisition. The respective obligations of Parent and Acquisition to effect the
\nMerger are subject to the satisfaction at or prior to the Effective Time of the
\nfollowing conditions:<\/p>\n
(a) the representations and warranties of the Company
\ncontained in this Agreement or in any other document delivered pursuant hereto
\nshall be true and correct in all material respects at and as of the Effective
\nTime with the same effect as if made at and as of the Effective Time, and at the
\nClosing the Company shall have delivered to Parent and Acquisition a certificate
\nto that effect;<\/p>\n
(b) each of the obligations of the Company to be performed at
\nor before the Effective Time pursuant to the terms of this Agreement shall have
\nbeen duly performed in all material respects at or before the Effective Time,
\nand at the Closing the Company shall have delivered to Parent and Acquisition a
\ncertificate to that effect;<\/p>\n
(c) each Company Affiliate shall have delivered and performed
\nhis or her obligations under the letter referenced in Section 4.15;<\/p>\n
(d) there shall have been no events, changes or effects with
\nrespect to the Company or its subsidiaries (other than such events, changes or
\neffects that arise out of or result from the execution of this Agreement or the
\nproposed consummation of the Merger and the other transactions contemplated
\nhereby) having or which would have a Company Material Adverse Effect;<\/p>\n
(e) the opinion of Weil, Gotshal & Manges LLP, addressed to
\nParent, substantially to the effect that (i) the Merger will be treated for
\nfederal income tax purposes as a reorganization within the meaning of Section
\n368(a) of the Code; (ii) each of Parent, Acquisition and the Company will be a
\nparty to the reorganization within the meaning of Section 368(b) of the Code;
\nand (iii) no gain or loss will be recognized by Parent, Acquisition or the
\nCompany as a result of the Merger, dated the Closing Date, shall have been
\ndelivered and such opinion shall not have been withdrawn or modified in any
\nmaterial respect; and<\/p>\n
(f) the Surviving Corporation shall have entered into an
\nemployment agreement with each of the persons listed in Section 5.3(f) of the
\nParent Disclosure Schedule.<\/p>\n
ARTICLE 6<\/p>\n
TERMINATION; AMENDMENT; WAIVER<\/p>\n
SECTION 6.1. Termination. This Agreement may be terminated and
\nthe Merger may be abandoned at any time, but prior to the Effective Time:<\/p>\n
(a) by mutual written consent of Parent, Acquisition and the
\nCompany;<\/p>\n
(b) by Parent and Acquisition or the Company if (i) the Merger
\nhas not been consummated by May 1, 1997, PROVIDED that no party may terminate
\nthis Agreement pursuant to this clause (i) if such party’s failure to fulfill
\nany of its obligations under this Agreement shall have been the reason that the
\nEffective Time shall not have occurred on or before said date, or (ii) the
\nCompany or Parent shall have convened a meeting of its respective stockholders
\nand failed to obtain the requisite vote of its respective stockholders; or<\/p>\n
(c) by the Company if (i) there shall have been a breach of
\nany representation or warranty on the part of Parent or Acquisition set forth in
\nthis Agreement, or if any representation or warranty of Parent or Acquisition
\nshall have become untrue, in either case such that the conditions set forth in
\nSection 5.2(a) would be incapable of being satisfied by May 1, 1997 (or as
\notherwise extended), (ii) there shall have been a breach by Parent or
\nAcquisition of any of their respective covenants or agreements hereunder having
\na Parent Material Adverse Effect or materially adversely affecting the
\nconsummation of the Merger, and Parent or Acquisition, as the case may be, has
\nnot cured such breach within 20 business days after notice by the Company
\nthereof, or (iii) the Company enters into a definitive agreement relating to a
\nSuperior Proposal in accordance with Section 4.3(b) (provided that such
\ntermination shall not be effective until payment of the amount required under
\nSection 6.3(a)).<\/p>\n
(d) by Parent and Acquisition if (i) there shall have been a
\nbreach of any representation or warranty on the part of the Company set forth in
\nthis Agreement, or if any representation or warranty of the Company shall have
\nbecome untrue, in either case such that the conditions set forth in Section
\n5.3(a) would be incapable of being satisfied by May 1, 1997 (or as otherwise
\nextended), (ii) there shall have been a breach by the Company of its covenants
\nor agreements hereunder having a Company Material Adverse Effect or materially
\nadversely affecting the consummation of the Merger, and the Company has not
\ncured such breach within 20 business days after notice by Parent or Acquisition
\nthereof, or (iii) the Company Board shall have withdrawn, modified or changed
\nits approval or recommendation of this Agreement or the Merger, shall have
\nrecommended to the Company’s stockholders any Acquisition Proposal (other than
\nthe Merger), shall have failed to call, give notice of, convene or hold a
\nstockholders’ meeting to vote upon the Merger, or shall have adopted any
\nresolution to effect any of the foregoing, or the Company shall have entered
\ninto a definitive agreement relating to a Superior Proposal.<\/p>\n
SECTION 6.2. Effect of Termination. In the event of the
\ntermination and abandonment of this Agreement pursuant to Section 6.1, this
\nAgreement shall forthwith become void and have no effect, without any liability
\non the part of any party hereto or its affiliates, directors, officers or
\nshareholders, other than the provisions of this Section 6.2 and Sections 4.6(c)
\nand 6.3. Nothing contained in this Section 6.2 shall relieve any party from
\nliability for any wilful breach of this Agreement.<\/p>\n
SECTION 6.3. Fees and Expenses.<\/p>\n
(a) In the event that this Agreement shall be terminated
\npursuant to:<\/p>\n
(i) Sections 6.1(d)(i) or 6.1(d)(ii) as a result of a wilful
\nbreach by the Company and, within twelve months thereafter, the Company enters
\ninto an agreement with respect to any Acquisition Proposal (other than the
\nMerger)), or<\/p>\n
(ii) Sections 6.1(c)(iii) or 6.1(d)(iii), then Parent and
\nAcquisition would suffer direct and substantial damages, which damages cannot be
\ndetermined with reasonable certainty. To compensate Parent and Acquisition for
\nsuch damages, and in full satisfaction and settlement of any claims that Parent
\notherwise might have against the Company in respect of any such termination of
\nthis Agreement, the Company shall pay to Parent the amount of Fourteen Million
\nFive Hundred Thousand Dollars ($14,500,000) (and not as a penalty) as follows:
\n(i) in the case of a termination under Section 6.1(d)(i) or 6.1(d)(ii), such
\namount shall be paid on the date the Company consummates an Acquisition Proposal
\nand (ii) in the case of a termination under Section 6.1(c)(iii) or 6.1(d)(iii),
\nsuch amount shall be paid on the date of such termination. Notwithstanding the
\nimmediately preceding sentence, any payment as a result of a termination of this
\nAgreement pursuant to Section 6.1(d)(i) or 6.1(d)(ii) shall be reduced by the
\namount of any damages actually recovered by Parent or Acquisition in respect
\nthereof.<\/p>\n
(b) If the Company Board withdraws its recommendation to
\nCompany stockholders that they vote to approve this Agreement and related
\nmatters by reason of changes to the market prices of Parent Common Stock (in the
\nabsence of any occurrences that had or would have a Parent Material Adverse
\nEffect) following the date hereof and the Merger is not consummated by reason of
\nsuch withdrawal, then the Company shall pay to Parent the amount of Fourteen
\nMillion Five Hundred Thousand Dollars ($14,500,000). Such payment shall not be
\ndeemed to be the exclusive remedy or remedies for any breach of this Agreement
\nby the Company, but shall be in addition to all other remedies available to
\nParent at law or equity. Nothing contained in this Section 6.3(b) shall be an
\nadmission by Parent that a change in the market prices of Parent Common Stock
\n(in the absence of any occurrences that had or would have a Parent Material
\nAdverse Effect) following the date hereof is an appropriate basis for the
\nCompany Board to withdraw its recommendation to Company stockholders pursuant to
\nSection 4.5 hereof.<\/p>\n
(c) Each party shall bear its own expenses in connection with
\nthis Agreement and the transactions contemplated hereby. The cost of printing
\nthe S-4 and the Proxy Statement shall be borne equally by the Company and
\nParent.<\/p>\n
SECTION 6.4. Amendment. This Agreement may be amended by
\naction taken by the Company, Parent and Acquisition at any time before or after
\napproval of this Agreement by the stockholders of the Company but, after any
\nsuch approval, no amendment shall be made which requires the approval of such
\nstockholders under applicable law without such approval. This Agreement may not
\nbe amended except by an instrument in writing signed on behalf of the parties
\nhereto.<\/p>\n
SECTION 6.5. Extension; Waiver. At any time prior to the
\nEffective Time, each party hereto (for these purposes, Parent and Acquisition
\nshall together be deemed one party and the Company shall be deemed the other
\nparty) may (i) extend the time for the performance of any of the obligations or
\nother acts of the other party, (ii) waive any inaccuracies in the
\nrepresentations and warranties of the other party contained herein or in any
\ndocument, certificate or writing delivered pursuant hereto or (iii) waive
\ncompliance by the other party with any of the agreements or conditions contained
\nherein. Any agreement on the part of either party hereto to any such extension
\nor waiver shall be valid only if set forth in an instrument in writing signed on
\nbehalf of such party. The failure of either party hereto to assert any of its
\nrights hereunder shall not constitute a waiver of such rights.<\/p>\n
ARTICLE 7<\/p>\n
MISCELLANEOUS<\/p>\n
SECTION 7.1. Nonsurvival of Representations and Warranties.
\nThe representations and warranties made herein shall not survive beyond the
\nEffective Time or a termination of this Agreement.<\/p>\n
SECTION 7.2. Entire Agreement; Assignment. This Agreement<\/p>\n
(a) constitutes the entire agreement between the parties
\nhereto with respect to the subject matter hereof and supersedes all other prior
\nagreements and understandings, both written and oral, between the parties with
\nrespect to the subject matter hereof; and<\/p>\n
(b) shall not be assigned by operation of law or otherwise;
\nPROVIDED, HOWEVER, that Acquisition may assign any or all of its rights and
\nobligations under this Agreement to any direct wholly-owned subsidiary of
\nParent, but no such assignment shall relieve Acquisition of its obligations
\nhereunder if such assignee does not perform such obligations.<\/p>\n
SECTION 7.3. Validity. If any provision of this Agreement, or
\nthe application thereof to any person or circumstance, is held invalid or
\nunenforceable, the remainder of this Agreement, and the application of such
\nprovision to other persons or circumstances, shall not be affected thereby, and
\nto such end, the provisions of this Agreement are agreed to be severable.<\/p>\n
SECTION 7.4. Notices. All notices, requests, claims, demands
\nand other communications hereunder shall be in writing and shall be given (and
\nshall be deemed to have been duly given upon receipt) by delivery in person, by
\ncable, telegram, facsimile or telex, or by registered or certified mail (postage
\nprepaid, return receipt requested), to the other party as follows:<\/p>\n
if to Parent or
\n to Acquisition to: St. Jude Medical, Inc.
\n One Lillehei Plaza
\n St. Paul, MN 55117
\n Attention: General Counsel
\n Facsimile: (612) 490-4333<\/p>\n
with a copy to: Weil, Gotshal & Manges LLP
\n 767 Fifth Avenue
\n New York, NY 10153
\n Attention: Dennis J. Block, Esq.
\n Facsimile: (212) 310-8007<\/p>\n
if to the Company to: Ventritex, Inc.
\n 701 East Evelyn Avenue
\n Sunnyvale, CA 94086
\n Attention: Mr. Frank M. Fischer
\n Facsimile: (408) 738-0285<\/p>\n
with a copy to: Sullivan & Cromwell
\n 125 Broad Street
\n New York, NY 10004
\n Attention: Benjamin F. Stapleton, Esq.
\n Facsimile: (212) 558-3588<\/p>\n
or to such other address as the person to whom notice is given may have
\npreviously furnished to the other in writing in the manner set forth above.<\/p>\n
SECTION 7.5. Governing Law. This Agreement shall be governed
\nby and construed in accordance with the laws of the State of Delaware, without
\nregard to the principles of conflicts of law thereof.<\/p>\n
SECTION 7.6. Descriptive Headings. The descriptive headings
\nherein are inserted for convenience of reference only and are not intended to be
\npart of or to affect the meaning or interpretation of this Agreement.<\/p>\n
SECTION 7.7. Parties in Interest. This Agreement shall be
\nbinding upon and inure solely to the benefit of each party hereto and its
\nsuccessors and permitted assigns, and except as provided in Sections 4.10 and
\n7.2 nothing in this Agreement, express or implied, is intended to or shall
\nconfer upon any other person any rights, benefits or remedies of any nature
\nwhatsoever under or by reason of this Agreement.<\/p>\n
SECTION 7.8. Severability. If any term or other provision of
\nthis Agreement is invalid, illegal or unenforceable, all other provisions of
\nthis Agreement shall remain in full force and effect so long as the economic or
\nlegal substance of the transactions contemplated hereby is not affected in any
\nmanner materially adverse to any party.<\/p>\n
SECTION 7.9. Specific Performance. The parties hereto
\nacknowledge that irreparable damage would result if this Agreement were not
\nspecifically enforced, and they therefore consent that the rights and
\nobligations of the parties under this Agreement may be enforced by a decree of
\nspecific performance issued by a court of competent jurisdiction. Such remedy
\nshall, however, not be exclusive and, shall be in addition to any other remedies
\nwhich any party may have under this Agreement or otherwise.<\/p>\n
SECTION 7.10. Subsidiaries. The term “subsidiary” shall mean,
\nwhen used with reference to any entity, any entity more than fifty percent (50%)
\nof the outstanding voting securities or interests (including membership
\ninterests) of which are owned directly or indirectly by such former entity.<\/p>\n
SECTION 7.11. Counterparts. This Agreement may be executed in
\none or more counterparts, each of which shall be deemed to be an original, but
\nall of which shall constitute one and the same agreement.<\/p>\n
IN WITNESS WHEREOF, each of the parties has caused this Agreement to
\nbe duly executed on its behalf as of the day and year first above written.<\/p>\n
ST. JUDE MEDICAL, INC.<\/p>\n
By: \/s\/ Ronald A. Matricaria
\n ———————————–
\n Name: Ronald A. Matricaria
\n Title: President and Chief Executive
\n Officer<\/p>\n
PACESETTER, INC.<\/p>\n
By: \/s\/ Patrick Forteau
\n ———————————–
\n Name: Patrick Forteau
\n Title: President<\/p>\n
VENTRITEX, INC.<\/p>\n
By: \/s\/ Frank M. Fischer
\n ———————————–
\n Name: Frank M. Fischer
\n Title: President and Chief Executive
\n Officer<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[8909],"corporate_contracts_industries":[9436],"corporate_contracts_types":[9622,9626],"class_list":["post-43143","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-st-jude-medical-inc","corporate_contracts_industries-health__instruments","corporate_contracts_types-planning","corporate_contracts_types-planning__merger"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43143","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43143"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43143"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43143"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43143"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}