UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE 14A
PROXY
STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE
ACT OF 1934
Filed by
the Registrant
x
Filed by
a Party other than the Registrant
o
Check the
appropriate box:
x
Preliminary Proxy
Statement
o
Confidential, for
Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
o
Definitive Proxy
Statement
o
Definitive
Additional Materials
o
Soliciting
Material Pursuant to §240.14a-11(c) or §240.14a-2
(Name
of Registrant as Specified In Its Charter)
(Name
of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
o
No fee
required.
x
Fee computed on
table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
Title of
each class of securities to which transaction applies:
Common
stock, par value $0.001 per share, of SenoRx, Inc. (the “SenoRx Common Stock”)
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(2)
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Aggregate
number of securities to which transaction
applies:
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As of May
20, 2010, there were outstanding: (i) 17,641,274 shares of SenoRx Common
Stock, (ii) 2,521,860 shares of SenoRx Common Stock subject to stock options
with an exercise price that is less than $11.00 per share (the “Per Share Merger
Consideration”), (iii) 60 shares of SenoRx Common Stock subject to restricted
stock awards or purchase agreements, (iv) 272,939 shares of SenoRx Common
Stock subject to restricted stock units, (v) 145,714 shares of SenoRx
Common Stock subject to warrants with an exercise price that is less than the
Per Share Merger Consideration, and (vi) and 225,791 shares of SenoRx
Common Stock subject to stock options with an exercise price that is equal to or
greater than the Per Share Merger Consideration, which stock options will be
cancelled in the proposed merger without consideration therefor.
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(3)
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Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was
determined):
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The
maximum aggregate value, solely for purposes of calculating the filing fee, was
determined based upon the sum of (i) 17,641,274 shares of SenoRx Common
Stock multiplied by the Per Share Merger Consideration, (ii) 2,521,860
shares of SenoRx Common Stock subject to stock options with an exercise price
that is less than the Per Share Merger Consideration, multiplied by $6.30 (which
is the difference between the Per Share Merger Consideration and the weighted
average exercise price of $4.70 per share for such stock options), (iii) 60
shares of SenoRx Common Stock subject to restricted stock awards and purchase
agreements, multiplied by the Per Share Merger Consideration, (iv) 272,939
shares of SenoRx Common Stock subject to restricted stock units, multiplied by
the Per Share Merger Consideration, and (v) 145,714 shares of SenoRx
Common Stock subject to outstanding warrants with an exercise price that is less
than the Per Share Merger Consideration, multiplied by $4.14 (which is the
difference between the Per Share Merger Consideration and the weighted average
exercise price of $6.86 per share for such warrants). In accordance
with Section 14(g) of the Securities Exchange Act of 1934, as amended, the
filing fee was determined by multiplying 0.00007130 by the sum calculated in the
preceding sentence.
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(4)
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Proposed
maximum aggregate value of
transaction:
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o
Fee
paid previously with preliminary materials.
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o
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Check
box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its
filing.
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(1)
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Amount
Previously Paid:
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(2)
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Form,
Schedule or Registration Statement
No.:
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SenoRx,
Inc.
3
Morgan
Irvine,
California 92618-1917
[_______
__], 2010
Dear
Stockholder,
You are
cordially invited to attend a special meeting of stockholders of SenoRx, Inc., a
Delaware corporation, or SenoRx, to be held on [__________], 2010, starting at
[_:__ a/p.m.] Pacific Time at SenoRx’s principal executive offices located at 3
Morgan, Irvine, California 92618-1917.
At the
special meeting, you will be asked to consider and vote upon a proposal to adopt
the merger agreement under which SenoRx would be acquired by C. R. Bard,
Inc. We entered into this merger agreement on May 4,
2010. If the merger is completed, you, as a holder of SenoRx common
stock, will be entitled to receive $11.00 in cash, without interest or dividends
thereon, less any applicable withholding of taxes, for each share of SenoRx
common stock that you own at the time of the merger, as more fully described in
the enclosed proxy statement.
After
careful consideration, our board of directors unanimously (1) determined that
the merger agreement and the terms and conditions of the merger and the merger
agreement are fair to and in the best interests of SenoRx, (2) declared it
advisable that SenoRx enter into the merger agreement and consummate the merger
and the other transactions contemplated thereby on the terms and subject to the
conditions set forth in the merger agreement, and (3) recommends that you vote
“FOR” the adoption of the merger agreement and “FOR” the adjournment or
postponement of the special meeting, if necessary or appropriate, to solicit
additional proxies.
Your vote is very important,
regardless of the number of shares of SenoRx common stock you
own
. We cannot consummate the merger unless the merger
agreement is approved by the affirmative vote of the holders of a majority of
the outstanding shares of SenoRx common stock.
Therefore, the failure of any
stockholder to vote will have the same effect as a vote by that stockholder
against the adoption of the merger agreement
.
The
attached proxy statement provides you with detailed information about the
special meeting, the merger agreement and the merger. A copy of the
merger agreement is attached as Annex A to the proxy
statement. We encourage you to read the proxy statement and the
merger agreement carefully and in their entirety. You may also obtain
more information about SenoRx from documents we have filed with the Securities
and Exchange Commission.
Thank you
in advance for your continued support and your consideration of this
matter.
Sincerely,
Chief
Executive Officer, President and Director
Irvine,
California
Neither the Securities and Exchange
Commission nor any state securities regulatory agency has approved or
disapproved the merger, passed upon the merits or fairness of the merger or
passed upon the adequacy or accuracy of the disclosure in this
document. Any representation to the contrary is a criminal
offense
.
This
proxy statement is dated [__________ __], 2010, and is first being mailed to
stockholders on or about [____________ __], 2010.
SenoRx,
Inc.
3
Morgan
Irvine,
California 92618-1917
Dear
Stockholder:
A special
meeting of stockholders of SenoRx, Inc., a Delaware corporation, or SenoRx, will
be held on [__________], 2010, starting at [__] [a/p.m.] Pacific Time at
SenoRx’s principal executive offices located at 3 Morgan, Irvine, California
92618-1917, for the following purposes:
1. To
consider and vote on a proposal to adopt the Agreement and Plan of Merger, dated
as of May 4, 2010, as it may be amended from time to time, among C. R. Bard,
Inc., a New Jersey corporation, or Bard, Raptor Acquisition Corp., a Delaware
corporation and indirect wholly owned subsidiary of Bard, or Merger Sub, and
SenoRx, pursuant to which Bard will acquire SenoRx through the merger of Merger
Sub with and into SenoRx and SenoRx will be an indirect wholly owned subsidiary
of Bard following the merger.
2. To
consider and vote on a proposal to adjourn or postpone the special meeting to a
later date or time, if necessary or appropriate, to solicit additional proxies
in the event there are insufficient votes at the time of such adjournment or
postponement to adopt the merger agreement.
3. To
consider and vote on such other business as may properly come before the special
meeting or any adjournment or postponement of the special meeting.
Our board
of directors has specified the close of business on [________], 2010 as the
record date for the purpose of determining the stockholders who are entitled to
receive notice of, and to vote at, the special meeting. Only
stockholders of record at the close of business on the record date are entitled
to notice of and to vote at the special meeting and at any adjournment or
postponement thereof. Each stockholder is entitled to one vote for
each share of SenoRx common stock held on the record date.
Under
Delaware law, SenoRx stockholders who do not vote in favor of the adoption of
the merger agreement will have the right to seek appraisal of the fair value of
their shares as determined by the Delaware Court of Chancery if the merger is
completed, but only if they submit a written demand for such an appraisal before
the vote on the adoption of the merger agreement and comply with the other
Delaware law procedures explained in the accompanying proxy
statement.
Regardless
of whether you plan to attend the special meeting in person, we request that you
complete, sign, date and return the enclosed proxy card or submit your proxy by
telephone or via the Internet before the special meeting to ensure that your
shares of SenoRx common stock will be present in person or represented by proxy
at the special meeting. If you have Internet access, we encourage you
to record your vote via the Internet. Properly executed proxy cards
with no instructions indicated on the proxy card will be voted “
FOR
” the adoption of the
merger agreement and “
FOR
” the adjournment or
postponement of the special meeting, if necessary or appropriate, to solicit
additional proxies. If you attend the special meeting, you may revoke
your proxy by voting in person if you wish, even if you have previously returned
your proxy card. Your prompt attention is greatly
appreciated.
THE
SENORX BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE
ADOPTION OF THE MERGER AGREEMENT AND “FOR” THE ADJOURNMENT OR POSTPONEMENT OF
THE SPECIAL MEETING, IF NECESSARY OR APPROPRIATE, TO SOLICIT ADDITIONAL
PROXIES.
By Order
of the Board of Directors,
Chief
Executive Officer, President and Director
Irvine,
California
ADDITIONAL
INFORMATION
This
document incorporates important business and financial information about SenoRx
from documents that are not included in or delivered with this
document. See “Where You Can Find More Information” on page
84. You can obtain documents incorporated by reference in this
document, excluding any exhibits to those documents unless the exhibit is
specifically incorporated by reference into those documents, by contacting
Investor Relations by telephone at +1 (949) 362-4800 x132, by mail at SenoRx,
Inc., 3 Morgan, Irvine, California, 92618-1917, Attn: Investor Relations or by
e-mail at lchurney@senorx.com. You will not be charged for any of
these documents that you request. If you wish to request documents,
you should do so by [_______], 2010 in order to receive them before the special
meeting.
For
additional questions about the merger, assistance in submitting proxies or
voting shares of our common stock or additional copies of the proxy statement or
the enclosed proxy card, please contact our proxy solicitor:
Innisfree
M&A Incorporated
501
Madison Avenue, 20th Floor
New York,
New York 10022
Stockholders
May Call Toll-Free: +1 (888) 750-5834
Banks and
Brokers May Call Collect: + 1 (212) 750-5833
TABLE
OF CONTENTS
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Page
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QUESTIONS
AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETING
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1
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SUMMARY
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8
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The
Merger
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8
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The
Special Meeting
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8
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The
Companies
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10
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Reasons
for the Merger
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10
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Recommendation
of the SenoRx Board of Directors
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10
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Voting
and Support Agreement
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11
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Opinion
of SenoRx’s Financial Advisor
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11
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Treatment
of Stock Options and Other Awards
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11
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Material
U.S. Federal Income Tax Consequences of the Merger
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12
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Interests
of SenoRx’s Directors and Executive Officers in the Merger
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12
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Common
Stock Ownership of Directors and Executive Officers
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13
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Appraisal
Rights
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13
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Conditions
to the Merger
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13
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No
Solicitations
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16
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Change
in Recommendation
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18
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Termination
of the Merger Agreement
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19
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Termination
Fees and Expenses
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20
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Regulatory
Approvals
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22
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Consummation
of the Merger
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22
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Current
Market Price of Common Stock
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22
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CAUTIONARY
STATEMENT CONCERNING FORWARD-LOOKING INFORMATION
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23
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THE
SPECIAL MEETING
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24
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Date,
Time, Place and Purpose of the Special Meeting
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24
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Record
Date and Quorum
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24
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Vote
Required for Approval
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24
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Proxies
and Revocation
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25
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Adjournments
and Postponements
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26
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Solicitation
of Proxies
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26
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Questions
and Additional Information
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26
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Availability
of Documents
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26
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THE
COMPANIES
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27
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SenoRx,
Inc.
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27
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C.
R. Bard, Inc.
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27
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Raptor
Acquisition Corp.
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27
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THE
MERGER
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28
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Background
of the Merger
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28
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Reasons
for the Merger; Recommendation of the SenoRx Board of
Directors
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36
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Opinion
of SenoRx's Financial Advisor
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41
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Interests
of SenoRx’s Directors and Executive Officers in the Merger
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50
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Material
U.S. Federal Income Tax Consequences of the Merger
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53
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Regulatory
Approvals
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55
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Voting
and Support Agreement
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56
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Litigation Related to the Merger
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56
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THE
MERGER AGREEMENT
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57
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The
Merger
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57
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The
Merger Consideration and the Conversion of Capital Stock
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57
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Payment
Procedures
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58
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Treatment
of Stock Options, Restricted Stock and Other Equity Awards
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58
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Stockholders’
Meeting
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59
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Representations
and Warranties
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60
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Covenants
Regarding Conduct of Business by SenoRx Pending the
Merger
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63
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No
Solicitations
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66
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Change
in Recommendation
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67
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Employment
Matters
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68
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Other
Covenants and Agreements
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69
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Conditions
to the Merger
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72
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Termination
of the Merger Agreement
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74
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Termination
Fees and Expenses
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75
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Amendment
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77
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No
Third Party Beneficiaries
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77
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Remedies
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77
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SUBMISSION
OF STOCKHOLDER PROPOSALS
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78
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HOUSEHOLDING
OF SPECIAL MEETING MATERIALS
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78
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APPRAISAL
RIGHTS
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79
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CURRENT
MARKET PRICE OF COMMON STOCK
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82
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SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
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83
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WHERE
YOU CAN FIND MORE INFORMATION
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84
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Annex
A: Agreement and Plan of Merger
Annex
B: Voting and Support Agreement
Annex
C: Opinion of Piper Jaffray & Co.
Annex
D: Section 262 of the General Corporation Law of the State of
Delaware
QUESTIONS
AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETING
The
following questions and answers address briefly some questions you may have
regarding the proposed merger and the special meeting. These
questions and answers may not address all questions that may be important to you
as a holder of shares of SenoRx common stock. For important
additional information, please refer to the more detailed discussion contained
elsewhere in this proxy statement, the annexes to this proxy statement and the
documents referred to in this proxy statement. We sometimes make
reference to SenoRx, Inc. in this proxy statement by using the terms “SenoRx,”
“we,” “our” or “us.”
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Q:
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What
is the transaction?
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A:
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SenoRx
and C. R. Bard, Inc., or Bard, have entered into a definitive merger
agreement (which we refer to as the merger agreement) pursuant to which,
subject to the terms and conditions of the merger agreement, Bard will
acquire SenoRx through the merger of an indirect wholly owned
subsidiary of Bard with and into SenoRx (which we refer to as the
merger). SenoRx will be the surviving corporation in the merger
and will continue as an indirect wholly owned subsidiary of
Bard.
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Q:
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What
will a SenoRx stockholder receive when the merger
occurs?
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A:
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For
each share of SenoRx common stock held at the time of the merger, SenoRx
stockholders will be entitled to receive $11.00 in cash, without interest
or dividends thereon, less any applicable withholding of
taxes. This does not apply to shares of SenoRx common stock
held by stockholders who have not voted in favor of the merger and have
properly demanded appraisal of their shares pursuant to Delaware
law.
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Q:
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What
will happen in the merger to SenoRx stock
options?
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A:
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Upon
the consummation of the merger, each stock option (whether vested or
unvested) to purchase shares of SenoRx common stock outstanding
immediately before the effective time of the merger, to the extent not
exercised before such time, will be automatically cancelled and converted
into the right to receive the excess, if any, of the merger consideration
payable in respect of the shares subject to such stock option over the
applicable exercise price of such cancelled stock option, without
interest, less any applicable withholding of
taxes.
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Q:
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What
will happen in the merger to SenoRx restricted
stock?
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A:
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Upon
the consummation of the merger, each then-outstanding share of restricted
stock will be converted into the right to receive $11.00 per share,
without interest, less any applicable withholding of taxes, and when so
converted will be automatically
cancelled.
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Q:
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What
will happen in the merger to SenoRx restricted stock
units?
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A:
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Upon
the consummation of the merger, each then-outstanding restricted stock
unit will be converted into the right to receive an amount in cash equal
to $11.00 per share, which amount represents the amount per each share of
SenoRx common stock underlying each such award each holder of an
outstanding restricted stock unit would have been entitled to receive had
such restricted stock unit vested in full and been settled immediately
prior to the consummation of the merger, without interest, less any
applicable withholding of taxes, and when so converted will be
automatically cancelled.
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Q:
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What
will happen in the merger to warrants to purchase SenoRx common
stock?
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A:
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Upon
the consummation of the merger, each warrant that is outstanding and
unexercised immediately before the effective time of the merger will be
cancelled in accordance with and pursuant to the terms of the related
agreements under which such warrants were granted and converted into the
right to receive the excess, if any, of the merger consideration payable
in respect of the shares subject to such warrant over the applicable
exercise price of such cancelled warrant, without interest, less any
applicable withholding of taxes.
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Q:
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What
will happen in the merger to SenoRx’s Employee Stock Purchase
Plan?
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A:
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SenoRx
suspended all participation, including payroll deductions, in the SenoRx
Employee Stock Purchase Plan (which we refer to as the ESPP) as of May 15,
2010. Each outstanding option under the ESPP was exercised on
May 14, 2010 for the purchase of shares of SenoRx common stock in
accordance with the terms of the ESPP, and SenoRx refunded to each
participant in the ESPP all amounts remaining in such participant’s
account after such purchase. Effective as of the effective time
of the merger, and contingent upon the closing of the merger, SenoRx will
terminate the ESPP.
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Q:
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How
does the merger consideration compare to the market price of SenoRx common
stock?
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A:
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The
merger consideration of $11.00 per share to be paid to SenoRx stockholders
represents a premium of
approximately:
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●
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14%
over the closing price of SenoRx common stock on May 4, 2010, the trading
day immediately preceding the day that the proposed transaction with Bard
was publicly announced;
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●
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13%
over the closing price of SenoRx common stock on April 28, 2010, one week
prior to the day that the proposed transaction with Bard was publicly
announced; and
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●
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32%
over the closing price of SenoRx common stock on April 7, 2010, four weeks
prior to the day that the proposed transaction with Bard was publicly
announced.
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The
closing sale price of a share of SenoRx common stock on the NASDAQ Global Market
on May 20, 2010, the last full trading day before the filing of this proxy
statement, was $10.84. You are encouraged to obtain current market
quotations for SenoRx common stock in connection with voting your
shares.
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Q:
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When
do you expect the merger to be
completed?
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A:
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The
parties currently expect the merger to be completed in the third quarter
of 2010. However, the merger is subject to various closing
conditions, including SenoRx stockholder and regulatory approvals, and it
is possible that the failure to timely meet these closing conditions or
other factors outside of our control could require us to complete the
merger at a later time or not at
all.
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Q:
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Why
am I receiving this proxy
statement?
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A:
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You
are receiving this proxy statement because you were a stockholder of
SenoRx as of [_________], 2010, the record date for the special
meeting. To complete the merger, SenoRx’s stockholders must
vote to approve the adoption of the merger agreement. A copy of
the merger agreement is attached to this proxy statement as
Annex A. SenoRx will submit the merger agreement to its
stockholders for adoption at the special meeting described in this proxy
statement. You should read the section entitled “The Special
Meeting” beginning on page 24.
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Q:
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When
and where will the special meeting of stockholders be
held?
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A:
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The
special meeting of SenoRx stockholders (which we refer to as the special
meeting) will be held on [__________], 2010, starting at [_:__ a/p.m.]
Pacific Time at SenoRx’s principal executive offices located at 3 Morgan,
Irvine, California 92618-1917.
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Q:
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What
are the proposals that will be voted on at the special
meeting?
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A:
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You
will be asked to consider and vote on (1) the adoption of the merger
agreement, (2) the adjournment or postponement of the special meeting
to a later date or time, if necessary or appropriate, to solicit
additional proxies if there are insufficient votes at the time of the
special meeting to adopt the merger agreement, and (3) such other
business as may properly come before the special meeting or any
adjournments or postponements of the special
meeting.
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Q:
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Who
is entitled to attend and vote at the special
meeting?
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A:
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The
record date for the special meeting is [________], 2010. If you
own shares of SenoRx common stock as of the close of business on the
record date, you are entitled to notice of, and to vote at, the special
meeting or any adjournment or postponement of the special
meeting. As of the record date, there were [________] shares of
SenoRx common stock issued and outstanding and entitled to
vote.
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Q:
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How
many votes are required to adopt the merger
agreement?
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A:
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The
adoption of the merger agreement requires the affirmative vote of the
holders of a majority of the outstanding shares of SenoRx common stock
entitled to vote at the special meeting in person or by proxy, in
accordance with Delaware law.
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Q:
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Are
any SenoRx stockholders already committed to vote in favor of the
merger?
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A:
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Yes. In
connection with the transactions contemplated by the merger agreement,
certain executive officers and stockholders of SenoRx, who collectively,
as of the record date, beneficially owned approximately [___]% of the
total outstanding shares of SenoRx common stock, have entered into a
voting and support agreement with Bard to, among other things, vote all
shares of SenoRx common stock held by them in favor of the adoption of the
merger agreement. The executive officers and stockholders who
entered into the voting and support agreement with Bard did not receive
additional consideration for doing so (other than any consideration they
are otherwise entitled to receive under the merger agreement in respect of
their shares of SenoRx common stock). The voting and support
agreement is attached to this proxy statement as
Annex B.
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|
Q:
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How
many votes are required to adopt the proposal to adjourn or postpone the
special meeting to a later date or time, if necessary or appropriate, to
solicit additional proxies?
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A:
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The
adoption of the proposal to adjourn or postpone the special meeting to a
later date or time, if necessary or appropriate, to solicit additional
proxies requires the affirmative vote of a majority of the votes cast by
holders of SenoRx common stock present in person or represented by proxy
at the special meeting and entitled to vote
thereon.
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Q:
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How
does the SenoRx board of directors recommend that I vote on the
proposals?
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A:
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The
SenoRx board of directors has unanimously determined that the merger
agreement and the terms and conditions of the merger and the merger
agreement are fair to and in the best interests of SenoRx, declared it
advisable that SenoRx enter into the merger agreement and consummate the
merger and the other transactions contemplated thereby on the terms and
subject to the conditions set forth in the merger agreement, and
unanimously
recommends that you vote “
FOR
” the adoption of the
merger agreement and “
FOR
” the proposal to
adjourn or postpone the special meeting, if necessary or appropriate, to
solicit additional proxies. You should read the section
entitled “The Merger—Reasons for the Merger; Recommendation of the SenoRx
Board of Directors” beginning on
page 36.
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Q:
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How
are votes counted? Why is my vote
important?
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A:
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Votes
will be counted by the inspector of election appointed for the special
meeting, who will separately count “
FOR
” and “
AGAINST
” votes and
abstentions. If you sign your proxy card, but do not indicate
how you wish to vote, your shares will be voted
“FOR”
the proposal to
adopt the merger agreement and
“FOR”
the proposal to
adjourn the special meeting, if necessary or appropriate, to solicit
additional proxies. The affirmative vote of the holders of a
majority of the outstanding shares of SenoRx common stock entitled to vote
at the special meeting is required under Delaware law to adopt the merger
agreement. As a result, the failure to vote or the abstention
from voting will have the same effect as a vote against the adoption of
the merger agreement.
|
Because
the affirmative vote of a majority of the votes cast by holders of SenoRx common
stock present in person or represented by proxy at the special meeting is
required to adopt the proposal to adjourn or postpone the special meeting, if
necessary or appropriate, to solicit additional proxies, abstentions or the
failure to vote your shares will have no effect on the outcome of the proposal
unless you sign your proxy card, but do not indicate how you wish to vote, in
which case your shares will be voted
“FOR”
the
proposals.
|
Q:
|
What
do I need to do now?
|
|
A:
|
After
carefully reading and considering the information contained in this proxy
statement, including the annexes and the other documents referred to in
this proxy statement, please vote your shares as described
below. You have one vote for each share of SenoRx common stock
you own as of the record date.
|
|
Q:
|
How
do I vote if I am a stockholder of
record?
|
|
·
|
by
using the telephone voting instructions printed on your proxy
card;
|
|
·
|
by
using the Internet voting instructions printed on your proxy
card;
|
|
·
|
by
completing, signing and dating each proxy card you receive and returning
it in the enclosed postage-paid envelope;
or
|
|
·
|
in
person by appearing at the special
meeting.
|
Voting
via the Internet, by telephone or by mailing in your proxy card will not prevent
you from voting in person at the special meeting. You are encouraged
to submit a proxy by mail, via the Internet or by telephone even if you plan to
attend the special meeting in person, to ensure that your shares of SenoRx
common stock are present in person or represented by proxy at the special
meeting.
If you
sign your proxy card, but do not indicate how you wish to vote, your shares will
be voted “
FOR
” the
proposal to adopt the merger agreement and “
FOR
” the adoption of the
proposal to adjourn or postpone the special meeting, if necessary, to solicit
additional proxies. With respect to any other matter that properly
comes before the special meeting, shares represented by all proxies received by
SenoRx will be voted with respect thereto in accordance with the recommendations
of the SenoRx board of directors.
|
Q:
|
How
do I vote if my shares are held by my brokerage firm, bank, trust or other
nominee?
|
|
A:
|
If
your shares are held in a brokerage account or by another nominee, such as
a bank or trust, then the brokerage firm, bank, trust or other nominee is
considered to be the stockholder of record with respect to those
shares. However, you still are considered to be the beneficial
owner of those shares, with your shares being held in “street
name.” “Street name” holders generally cannot vote their shares
directly and must instead instruct the brokerage firm, bank, trust or
other nominee how to vote their shares. Your brokerage firm,
bank, trust or other nominee will only be permitted to vote your shares
for you at the special meeting if you instruct it how to
vote. Therefore, it is important that you promptly follow the
directions provided by your brokerage firm, bank, trust or other nominee
regarding how to instruct them to vote your shares. If you wish
to vote in person at the special meeting, you must bring a proxy from your
brokerage firm, bank, trust or other nominee authorizing you to vote at
the special meeting.
|
In
addition, because any shares you may hold in “street name” will be deemed to be
held by a different stockholder than any shares you hold of record, shares held
in “street name” will not be combined for voting purposes with shares you hold
of record. To be sure your shares are voted, you should instruct your
brokerage firm, bank, trust or other nominee to vote your
shares. Shares held by a corporation or business entity must be voted
by an authorized officer of the entity.
|
Q:
|
What
if I fail to instruct my brokerage firm, bank, trust or other nominee how
to vote?
|
|
A:
|
Your
brokerage firm, bank, trust or other nominee will not be able to vote your
shares unless you have properly instructed your nominee on how to
vote. The adoption of the merger agreement requires an
affirmative vote of the holders of a majority of the outstanding shares of
SenoRx common stock. Because your brokerage firm, bank, trust
or other nominee does not have discretionary authority to vote on the
proposal, the failure to provide your nominee with voting instructions
will have the same effect as a vote against the proposal to adopt the
merger agreement, but it will have no effect on the proposal to adjourn
the special meeting, if necessary or appropriate, to solicit additional
proxies.
|
|
Q:
|
What
constitutes a quorum for the special
meeting?
|
|
A:
|
The
presence, in person or by proxy, of stockholders representing the holders
of a majority of the shares of SenoRx common stock entitled to vote at the
special meeting will constitute a quorum for the special
meeting. If you are a stockholder of record and you submit a
properly executed proxy card, vote by telephone or via the Internet or
vote in person at the special meeting, then your shares will be counted as
part of the quorum. If you are a “street name” holder of shares
and you provide your brokerage firm, bank, trust or other nominee with
instructions as to how to vote your shares or you vote your shares in
person at the special meeting by obtaining a legal proxy from such broker
or nominee, then your shares will be counted as part of the
quorum. All shares of SenoRx common stock held by stockholders
that are present in person or represented by proxy and entitled to vote at
the special meeting, regardless of how such shares are voted or whether
such stockholders abstain from voting, will be counted in determining the
presence of a quorum.
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|
Q:
|
What
does it mean if I receive more than one
proxy?
|
|
A:
|
If
you receive more than one proxy, it means that you hold shares that are
registered in more than one account. For example, if you own
your shares in various registered forms, such as jointly with your spouse,
as trustee of a trust or as custodian for a minor, you will receive a
separate proxy card for those shares because they are held in a different
form of record ownership. Therefore, to ensure that all of your
shares are voted, you will need to sign and return each proxy card you
receive or vote by telephone or via the Internet by using the different
control number(s) on each proxy
card.
|
|
Q:
|
May
I change my vote after I have delivered my
proxy?
|
|
A:
|
Yes. If
you are the stockholder of record of SenoRx common stock, you have the
right to change or revoke your proxy at any time before the vote being
taken at the special meeting:
|
|
·
|
by
delivering to SenoRx’s Secretary a signed written notice of revocation
bearing a date later than the date of the proxy, stating that the proxy is
revoked;
|
|
·
|
by
attending the special meeting and voting in person (your attendance at the
meeting will not, by itself, revoke your proxy; you must vote in person at
the meeting);
|
|
·
|
by
signing and delivering a new proxy, relating to the same shares of SenoRx
common stock and bearing a later date;
or
|
|
·
|
by
submitting another proxy by telephone or via the
Internet.
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Written
notices of revocation and other communications with respect to the revocation of
any proxies should be addressed to:
SenoRx,
Inc.
3
Morgan
Irvine,
California 92618-1917
Attn:
Secretary
If you
are a “street name” holder of SenoRx common stock, you should contact your
brokerage firm, bank, trust or other nominee to obtain instructions as to how to
change or revoke your proxy.
|
Q:
|
Should
I send in my stock certificates
now?
|
|
A:
|
No. After
the merger is completed, you will be sent a letter of transmittal with
detailed written instructions for exchanging your shares of SenoRx common
stock for the merger consideration. If your shares are held in
“street name” by your brokerage firm, bank, trust or other nominee, you
will receive instructions from your brokerage firm, bank, trust or other
nominee as to how to effect the surrender of your “street name” shares in
exchange for the merger consideration.
PLEASE DO NOT SEND IN YOUR
CERTIFICATES NOW
.
|
|
Q:
|
What
happens if I sell my shares of SenoRx common stock before the special
meeting?
|
|
A:
|
The
record date for stockholders entitled to vote at the special meeting is
earlier than the date of the special meeting and the expected closing date
of the merger. If you sell or transfer your shares of SenoRx
common stock after the record date but before the special meeting, you
will, unless special arrangements are made, retain your right to vote at
the special meeting but will transfer the right to receive the merger
consideration to the person to whom you sell or transfer your
shares. In addition, if you sell or transfer your shares before
the special meeting or before the effective time of the merger, you will
not be eligible to exercise your appraisal rights in respect of the
merger. For a more detailed discussion of your appraisal rights
and the requirements for perfecting your appraisal rights, see “Appraisal
Rights” on page [●] and
Annex D.
|
|
Q:
|
Am
I entitled to appraisal rights in connection with the
merger?
|
|
A:
|
Stockholders
are entitled to appraisal rights under Section 262 of the General
Corporation Law of the State of Delaware, or the DGCL, provided they
satisfy the special criteria and conditions set forth in Section 262
of the DGCL. For more information regarding appraisal rights,
see “Appraisal Rights” on page [●]. In addition, a copy of
Section 262 of the DGCL is attached as Annex D to this proxy
statement.
|
|
Q:
|
What
are the material U.S. federal income tax consequences of the merger to
me?
|
|
A:
|
The
receipt of cash for shares of SenoRx common stock pursuant to the merger
will be a taxable transaction for U.S. federal income tax
purposes. In general, for U.S. federal income tax purposes, a
holder of SenoRx common stock will recognize gain or loss in an amount
equal to the difference, if any, between (i) the amount of cash
received in the merger and (ii) the holder’s adjusted tax basis in
the shares. Because your individual circumstances may differ,
we recommend that you consult your own tax advisor to determine the
particular tax effects of the merger to you (including the application and
effect of any state, local or non-U.S. income and other tax
laws). See “The Merger—Material U.S. Federal Income Tax
Consequences of the Merger” beginning on
page 79.
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|
Q:
|
Who
can answer further questions?
|
|
A:
|
For
additional questions about the merger, assistance in submitting proxies or
voting shares of SenoRx common stock, or additional copies of the proxy
statement or the enclosed proxy card, please contact our proxy
solicitor at:
|
Innisfree
M&A Incorporated
501
Madison Avenue, 20th Floor
New York,
New York 10022
Stockholders
May Call Toll-Free: +1 (888) 750-5834
Banks and
Brokers May Call Collect: + 1 (212) 750-5833
If
your brokerage firm, bank, trust or other nominee holds your shares in “street
name,” you should also contact your brokerage firm, bank, trust or other nominee
for additional information.
SUMMARY
The
following summary highlights information in this proxy statement and may not
contain all the information that is important to you. Accordingly, we
encourage you to read carefully this entire proxy statement, its annexes and the
documents referred to or incorporated by reference in this proxy
statement. We sometimes make reference to SenoRx, Inc. in this proxy
statement by using the terms “SenoRx,” “we,” “our” or “us.” Each item
in this summary includes a page reference directing you to a more complete
description of the item in this proxy statement.
The
Merger (Page 28)
The
Agreement and Plan of Merger, dated as of May 4, 2010, which we refer to as the
merger agreement, among C. R. Bard, Inc., or Bard, Raptor Acquisition Corp., an
indirect wholly owned subsidiary of Bard, or Merger Sub, and SenoRx, provides
that Merger Sub will merge with and into SenoRx, which we refer to as the
merger. As a result of the merger, SenoRx will become an indirect
wholly owned subsidiary of Bard. Upon completion of the merger,
shares of SenoRx common stock will no longer be listed on any stock exchange or
quotation system. At the effective time of the merger, each
outstanding share of SenoRx common stock will be automatically converted into
the right to receive $11.00 in cash, without interest or dividends thereon, less
any applicable withholding of taxes (other than shares of SenoRx common stock
held by any holder who has not voted in favor of the merger and has properly
demanded appraisal of his or her shares pursuant to Section 262 of the
General Corporation Law of the State of Delaware, or the DGCL, as described in
this proxy statement). We refer to this amount as the merger
consideration.
At the
effective time of the merger, any shares of SenoRx capital stock owned by SenoRx
as treasury stock or otherwise owned by Merger Sub or Bard will automatically be
canceled and will cease to exist, and no merger consideration will be paid by
Bard with respect to such shares.
The
Special Meeting (Page 24)
Date, Time and
Place
. The special meeting will be held on [__________], 2010,
starting at [_:__ a/p.m.] Pacific Time at SenoRx’s principal executive offices
located at 3 Morgan, Irvine, California 92618-1917.
Purpose
. You
will be asked to consider and vote upon (1) the adoption of the merger
agreement, (2) the adjournment or postponement of the special meeting to a
later date or time, if necessary or appropriate, to solicit additional proxies
if there are insufficient votes at the time of the special meeting to adopt the
merger agreement and (3) such other business as may properly come before
the special meeting or any adjournments or postponements of the special
meeting.
Record Date and
Quorum
. You are entitled to vote at the special meeting if you
owned shares of SenoRx common stock at the close of business on [________],
2010, the record date for the special meeting. You will have one vote
for each share of SenoRx common stock that you owned on the record
date. As of the record date, there were [________] shares of SenoRx
common stock issued and outstanding and entitled to vote. A majority
of SenoRx common stock issued, outstanding and entitled to vote at the special
meeting constitutes a quorum for the purpose of the special
meeting. In the event that a quorum is not present at the special
meeting, the meeting may be adjourned or postponed to solicit additional
proxies.
Vote
Required
. The adoption of the merger agreement requires the
affirmative vote of the holders of a majority of the outstanding shares of
SenoRx common stock entitled to vote at the special meeting. Approval
of any proposal to adjourn or postpone the special meeting, if necessary or
appropriate, for the purpose of soliciting additional proxies requires the
affirmative vote of a majority of the votes cast by holders of SenoRx common
stock present in person or represented by proxy at the special meeting and
entitled to vote on the matter.
Voting and
Proxies
. Any stockholder of record entitled to vote at the
special meeting may submit a proxy by telephone, via the Internet, by returning
the enclosed proxy card by mail or by voting in person at the special
meeting. If you do not return your proxy card, submit your proxy by
telephone or via the Internet or vote in person, your shares of SenoRx common
stock will not be voted, which will have the same effect as a vote against the
adoption of the merger agreement. Even if you plan to attend the
special meeting, if you hold your shares of SenoRx common stock in your own name
as the stockholder of record, please vote your shares by completing, signing,
dating and returning the enclosed proxy card or by using the telephone number
printed on your proxy card or by using the Internet voting instructions printed
on your proxy card.
If you
sign your proxy card, but do not indicate how you wish to vote, your shares will
be voted “
FOR
” the
proposal to adopt the merger agreement and “
FOR
” the proposal to adjourn
or postpone the special meeting, if necessary or appropriate, to solicit
additional proxies, if applicable.
If your
shares of SenoRx common stock are held in “street name,” you should instruct
your brokerage firm, bank, trust or other nominee on how to vote such shares of
common stock using the instructions provided by your broker or
nominee. If your shares of SenoRx common stock are held in “street
name,” you must obtain a legal proxy from such nominee in order to vote in
person at the special meeting. If you fail to provide your nominee
with instructions on how to vote your shares of SenoRx common stock, your
nominee will not be able to vote such shares at the special
meeting. Accordingly, the failure to provide your nominee with voting
instructions will have the same effect as a vote against the proposal to adopt
the merger agreement, but it will have no effect on the proposal to adjourn the
special meeting, if necessary or appropriate, to solicit additional
proxies.
Revocability of
Proxy
. Any holder of record of SenoRx common stock may revoke
his or her proxy at any time, unless noted below, before it is voted at the
special meeting by any of the following actions:
|
·
|
delivering
to SenoRx’s Secretary a signed written notice of revocation bearing a date
later than the date of the proxy, stating that the proxy is
revoked;
|
|
·
|
attending
the special meeting and voting in person (your attendance at the meeting
will not, by itself, revoke your proxy; you must vote in person at the
meeting);
|
|
·
|
signing
and delivering a new proxy, relating to the same shares of SenoRx common
stock and bearing a later date; or
|
|
·
|
by
submitting another proxy by telephone or via the
Internet.
|
Written
notices of revocation and other communications with respect to the revocation of
any proxies should be addressed to:
SenoRx,
Inc.
3
Morgan
Irvine,
California 92618-1917
Attn:
Secretary
If you
are a “street name” holder of SenoRx common stock, you may change your vote by
submitting new voting instructions to your brokerage firm, bank, trust or other
nominee. You must contact your nominee to obtain instructions as to
how to change or revoke your proxy.
The
Companies (Page 27)
SenoRx,
Inc.
SenoRx, Inc., a Delaware corporation, develops,
manufactures and sells minimally invasive medical devices used by breast care
specialists for the diagnosis and treatment of breast cancer, including its
EnCor(R) vacuum-assisted breast biopsy system and Contura(R) MLB catheter for
delivering radiation to the tissue surrounding the lumpectomy cavity following
surgery for breast cancer. SenoRx’s principal executive offices are
located at 3 Morgan, Irvine, California 92618-1917, and its telephone number is
+1 (949) 362-4800. See also “Where You Can Find More
Information.” SenoRx’s common stock is publicly traded on the NASDAQ
Global Market under the symbol “SENO.”
C. R. Bard,
Inc.
C. R. Bard, Inc., a New Jersey corporation, is a
multinational developer, manufacturer and marketer of innovative, life-enhancing
medical technologies in the fields of vascular, urology, oncology and surgical
specialty products. Bard’s principal executive offices are located at
730 Central Avenue, Murray Hill, New Jersey 07974 and its telephone number is +1
(800) 367-2273. Bard’s common stock is publicly traded on the New York Stock
Exchange under the symbol “BCR.”
Raptor
Acquisition Corp.
Raptor Acquisition Corp., a Delaware
corporation and indirect wholly owned subsidiary of Bard, was formed solely for
the purpose of facilitating Bard’s acquisition of SenoRx. Raptor
Acquisition Corp. has not carried on any activities to date, except for
activities incidental to its formation and activities undertaken in connection
with the transactions contemplated by the merger agreement. Upon
consummation of the merger, Raptor Acquisition Corp. will merge with and into
SenoRx and will cease to exist. Raptor Acquisition Corp.’s principal
executive offices are located at 730 Central Avenue, Murray Hill, New Jersey
07974, and its telephone number is +1 (800) 367-2273.
Reasons
for the Merger (Page 36)
In
reaching its decision to adopt and approve, and declare advisable, the merger
agreement, the merger and the other transactions contemplated by the merger
agreement, the SenoRx board of directors consulted with SenoRx’s management, as
well as its financial and legal advisors, and considered a number of factors
that the board members believed supported their decision. In
particular, the SenoRx board of directors reviewed the strategic alternatives
available to the company, including remaining as a stand-alone public company,
and considered the results of the market check conducted at the SenoRx board’s
direction, and concluded that the merger and the merger agreement reflected the
highest value reasonably attainable for SenoRx stockholders.
Recommendation
of the SenoRx Board of Directors (Page 36)
The
SenoRx board of directors unanimously (1) determined that that the merger
agreement and the terms and conditions of the merger and the merger agreement
are fair to and in the best interests of SenoRx, (2) declared it advisable that
SenoRx enter into the merger agreement and consummate the merger and the other
transactions contemplated thereby on the terms and subject to the conditions set
forth in the merger agreement, and (3) recommends that you vote “
FOR
” the adoption of the
merger agreement and “
FOR
” the adjournment or
postponement of the special meeting, if necessary or appropriate, to solicit
additional proxies.
Voting
and Support Agreement (Page 56)
In
connection with the transactions contemplated by the merger agreement, certain
executive officers and stockholders of SenoRx, who collectively, as of the
record date, beneficially owned approximately [___]% of the total outstanding
shares of SenoRx common stock, have entered into a voting and support agreement
with Bard to, among other things, vote all shares of SenoRx common stock held by
them in favor of the adoption of the merger agreement. The executive
officers and stockholders who entered into the voting and support agreement with
Bard did not receive additional consideration for doing so (other than any
consideration they are otherwise entitled to receive under the merger agreement
in respect of their shares of SenoRx common stock). The voting and
support agreement is attached to this proxy statement as
Annex B.
Opinion
of SenoRx’s Financial Advisor (Page 41)
At a
meeting of the SenoRx board of directors, Piper Jaffray & Co., or Piper
Jaffray, delivered an oral opinion, which was subsequently confirmed by delivery
of a written opinion, that as of May 4, 2010 and based upon and subject to the
assumptions, procedures, considerations and limitations set forth in the written
opinion and based upon such other factors as Piper Jaffray considered relevant,
that the merger consideration of $11.00 per share, in cash, to be paid in
connection with the merger is fair, from a financial point of view, to the
holders of SenoRx common stock (other than Bard and its affiliates, if
any).
The full text
of the Piper Jaffray written opinion dated May 4, 2010, confirming its oral
opinion issued to the SenoRx board of directors on May 4, 2010 and setting
forth, among other things, the assumptions made, procedures followed, matters
considered and limitations on the scope of the review undertaken by Piper
Jaffray in rendering its opinion, is attached as Annex C to this proxy statement
and is incorporated in its entirety herein by reference. You are
urged to, and should, carefully read the Piper Jaffray opinion in its entirety,
and this summary is qualified by reference to the written opinion. The Piper
Jaffray opinion addresses only the fairness, from a financial point of view and
as of the date of the opinion, of the purchase price to the holders of SenoRx
common stock, other than Bard and its affiliates, if any. Piper Jaffray’s
opinion was directed solely to the SenoRx board of directors in connection with
its consideration of the merger and was not intended to be, and does not
constitute, a recommendation to any SenoRx stockholder as to how any SenoRx
stockholder should act or vote with respect to the merger or on any other
matter. The Piper Jaffray opinion was approved for issuance by the Piper Jaffray
Opinion Committee.
Treatment
of Stock Options and Other Awards (Page 58)
Stock
Options
. As of the effective time of the merger, each stock
option to purchase shares of SenoRx common stock that is outstanding and
unexercised immediately before the effective time of the merger will, to the
extent then unvested, become fully vested and exercisable and will be
cancelled. In consideration of such cancellation, each holder of an
option that has an exercise price that is less than $11.00 per share will be
entitled to receive a cash payment (less any applicable tax withholdings) equal
to the product of (x) the outstanding number of shares of SenoRx common stock
subject to such option,
multiplied by
(y) the excess
of $11.00 over the per share exercise price of such cancelled stock
option. Any stock option to purchase shares of SenoRx common stock
that has a per share exercise price that is equal to or greater than $11.00 will
be automatically cancelled without any cash payment to the holder of such
option.
Restricted
Stock
. As of the effective time of the merger, each
then-outstanding share of restricted stock will be converted into the right to
receive a cash payment equal to the product of (x) the number of shares of
then-outstanding restricted stock,
multiplied by
(y) $11.00, and
when so converted will be automatically cancelled. Such cash payment
will be paid as promptly as practicable following the effective time of the
merger, less any applicable withholding taxes.
Restricted Stock
Units
. As of the effective time of the merger, each
then-outstanding restricted stock unit will be converted into the right to
receive a cash payment equal to the product of (x) the number of shares subject
to the outstanding restricted stock units which each holder thereof would have
been entitled to receive had such restricted stock unit vested in full and
settled immediately prior to the effective time of the merger,
multiplied by
(y) $11.00, and
when so converted will be automatically cancelled. Such cash payment
will be paid as promptly as practicable following the effective time of the
merger, less any applicable withholding taxes.
Warrants
.
As of the effective time of the merger, each warrant to purchase shares of
SenoRx common stock that is outstanding and unexercised immediately before the
effective time of the merger will become fully vested and exercisable and will
be cancelled. In consideration of such cancellation, each holder of a
warrant that has a per share exercise price that is less than $11.00 per share
will be entitled to receive a cash payment (less any applicable tax
withholdings) equal to the product of (x) the outstanding number of shares of
SenoRx common stock subject to such warrant,
multiplied by
(y) the excess
of $11.00 over the per share exercise price of such cancelled
warrant. Any warrant to purchase shares of SenoRx common stock that
has a per share exercise price that is equal to or greater than $11.00 will be
automatically cancelled without any cash payment to the holder of such
warrant.
Employee Stock
Purchase Plan
. SenoRx suspended all participation, including
payroll deductions, in the SenoRx Employee Stock Purchase Plan (which we refer
to as the ESPP) as of May 15, 2010. Each outstanding option under the
ESPP was exercised on May 14, 2010 for the purchase of shares of SenoRx common
stock in accordance with the terms of the ESPP, and SenoRx refunded to each
participant in the ESPP all amounts remaining in such participant’s account
after such purchase. Effective as of the effective time of the
merger, and contingent upon the closing of the merger, SenoRx will terminate the
ESPP.
Material
U.S. Federal Income Tax Consequences of the Merger (Page 53)
The
receipt of cash for shares of SenoRx common stock pursuant to the merger will be
a taxable transaction for U.S. federal income tax purposes. In
general, for U.S. federal income tax purposes, a holder of SenoRx common stock
will recognize gain or loss in an amount equal to the difference, if any,
between (1) the amount of cash received in the merger and (2) the holder’s
adjusted tax basis in the shares. Stockholders should consult their
tax advisors to determine the particular tax consequences to them (including the
application and effect of any state, local or non-U.S. income and other tax
laws) of the merger.
Interests
of SenoRx’s Directors and Executive Officers in the Merger (Page
50)
SenoRx’s
directors and executive officers have economic interests in the merger that are
different from, or in addition to, their interests as SenoRx
stockholders. The SenoRx board of directors was aware of and
considered these interests, among other matters, in reaching its decision to
adopt and approve, and declare advisable, the merger agreement, the merger and
the other transactions contemplated by the merger agreement. Certain
of SenoRx’s executive officers are parties to change in control agreements with
SenoRx, which provide acceleration of all or a portion of outstanding equity
awards in connection with a change in control of SenoRx and severance and other
benefits in the case of qualifying separations from service in connection with a
change in control of SenoRx, in each case, including consummation of the
merger. The outstanding restricted stock unit awards denominated in
shares of SenoRx common stock held by directors will become fully vested in
accordance with their terms when the holders cease to be members of the SenoRx
board of directors as of the effective time of the merger, as required by the
terms of the merger agreement. In addition, executive officers and
directors of SenoRx have rights to indemnification and directors’ and officers’
liability insurance that will survive consummation of the merger.
Common
Stock Ownership of Directors and Executive Officers (Page 83)
As of
[________], 2010, the record date for the special meeting, the directors and
executive officers of SenoRx beneficially owned in the aggregate approximately
[__] shares of SenoRx common stock entitled to vote at the special meeting,
representing approximately [___]% of SenoRx’s outstanding common stock as of the
record date for the special meeting.
Appraisal
Rights (Page 79)
Under
Section 262 of the DGCL, SenoRx stockholders who do not vote in favor of
adoption of the merger agreement will have the right to seek appraisal of the
fair value of their shares as determined by the Delaware Court of Chancery if
the merger is completed, but only if they submit a written demand for such an
appraisal before the vote on the adoption of the merger agreement and comply
with the other special criteria and conditions explained in this proxy
statement.
Conditions
to the Merger (Page 72)
Conditions to
Each Party’s Obligations
. Each party’s obligation to
consummate the merger is subject to the satisfaction of the following mutual
conditions:
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SenoRx
will have obtained the approval of the majority of the holders of the
outstanding shares of SenoRx common stock to adopt the merger
agreement;
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no
governmental authority in the United States or in certain specified
jurisdictions will have enacted, issued, promulgated, enforced or entered
any law or order that is then in effect and that has the effect of
preventing or prohibiting the consummation of the merger or otherwise
imposing material limitations on the ability of Bard to effectively
acquire, hold or operate the business of SenoRx or Bard, provided that
each of the parties must use its commercially reasonable efforts to appeal
any such order or otherwise have any such order vacated or removed;
and
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any
waiting period (and any extension thereof) under the Hart Scott Rodino
Antitrust Improvements Act of 1976, as amended, which we refer to as the
HSR Act, will have expired or terminated, and any waiting period (and any
extension thereof), and any necessary consents, approvals, permits of,
authorizations from, notifications to and filings with any governmental
authorities, under any antitrust laws of certain specified jurisdictions,
to the extent applicable, will have been made or
obtained.
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Conditions to
Bard’s and Merger Sub’s Obligations
. The obligation of Bard
and Merger Sub to consummate the merger is subject to the satisfaction or waiver
of the following additional conditions:
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the
representations and warranties of SenoRx contained in the merger agreement
(other than as described in the next bullet point) will be true and
correct in all respects as of the closing date as if made on and as of the
closing date (except to the extent such representations and warranties
expressly relate to an earlier date, in which case as of such earlier
date), except that any inaccuracies in such representations and warranties
will be disregarded if the circumstances giving rise to all such
inaccuracies (considered collectively) do not constitute a Company
Material Adverse Effect, as defined below; provided, however, that for
purposes of determining the accuracy of such representations and
warranties, all “Company Material Adverse Effect” qualifications and other
materiality qualifications, and any similar qualifications, contained in
such representations and warranties will be
disregarded;
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the
representations and warranties concerning SenoRx’s charter documents,
capitalization (except for insignificant deviations in certain numerical
amounts set forth in the merger agreement), authority, absence of
subsidiaries, non-applicability of state takeover statutes, the opinion of
SenoRx’s financial advisor and the use of brokers will be true and correct
in all respects, in each case, as of the closing date as if made on and as
of the closing date (except to the extent such representations and
warranties expressly relate to an earlier date, in which case as if made
as of such earlier date));
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SenoRx
will have, in all material respects, performed all obligations and
complied with all agreements and covenants required to be performed by it
or complied with by it under the merger agreement at or before the
effective time of the merger;
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since
the date of the merger agreement, there will not have occurred any Company
Material Adverse Effect which is then
continuing;
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at
the closing, SenoRx will have delivered an officers’ certificate, duly
executed by SenoRx’s Chief Executive Officer or Chief Financial Officer on
behalf of SenoRx and dated as of the closing date, stating that the
conditions to closing described in the four bullet points above have been
satisfied; and
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the
number of shares held by holders who have not voted in favor of the merger
and who have properly demanded appraisal for his or her shares in
accordance with the DGCL will not constitute more than 10% of the
aggregate number of common shares outstanding as of the date of the merger
agreement.
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Conditions to
SenoRx’s Obligations
. The obligation of SenoRx to consummate
the merger is subject to the satisfaction or waiver of the following additional
conditions:
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the
representations and warranties of Bard and Merger Sub contained in the
merger agreement will be true and correct in all respects as of the
closing date as if made on and as of the closing date (except to the
extent such representations and warranties expressly relate to an earlier
date, in which case as of such earlier date), except that any inaccuracies
in such representations and warranties (other than the representations and
warranties concerning authority and financial capability, which shall be
true and correct in all material respects as of the closing date as if
made on and as of the closing date) will be disregarded if the
circumstances giving rise to all such inaccuracies (considered
collectively) do not constitute a Parent Material Adverse Effect, or any
fact, circumstance, effect, event, change or occurrence that would prevent
or have a material adverse effect on the ability of Bard and Merger Sub to
consummate the merger in accordance with the terms of the merger
agreement; provided, however, that for purposes of determining the
accuracy of such representations and warranties, all “Parent Material
Adverse Effect” qualifications and other materiality qualifications, and
any similar qualifications, contained in such representations and
warranties shall be disregarded;
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each
of Merger Sub and Bard shall have, in all material respects, performed all
obligations and complied with all agreements and covenants required to be
performed by them or complied with by them under the merger agreement at
or before the effective time of the merger;
and
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at
the closing, each of Merger Sub and Bard shall deliver an officer’s
certificate, duly executed by their respective Chief Financial Officers on
behalf of Merger Sub and Bard and dated as of the closing date, stating
that the conditions to closing described in the two bullet points above
have been satisfied.
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For
purposes of the merger agreement, “Company Material Adverse Effect,” means any
fact, circumstance, effect, event, change or occurrence, that individually or in
the aggregate, with all other facts, circumstances, effects, events, changes or
occurrences has, or would reasonably be expected to have a material adverse
effect on the business, assets, condition (financial or otherwise) or results of
operations of SenoRx, or would prevent or have a material adverse effect on the
ability of SenoRx to consummate the merger in accordance with the terms of the
merger agreement, in each case, other than resulting or arising out of any of
the following:
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any
fact, circumstance, effect, event, change or occurrence relating to local,
regional, national or foreign political, economic or financial conditions
or resulting from or arising out of developments or conditions in credit,
currency, capital, securities or other financial markets, including caused
by acts of terrorism or war (whether or not declared) or any material
worsening of such conditions existing as of the date of the merger
agreement, but only to the extent such change or effect does not
disproportionately affect SenoRx relative to the other industry
participants;
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any
fact, circumstance, effect, event, change or occurrence generally
affecting the industry in which SenoRx operates, but only to the extent
such change or effect does not disproportionately affect SenoRx relative
to the other industry participants;
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any
fact, circumstance, effect, event, change or occurrence resulting from any
hurricane, earthquake or other natural disasters, weather conditions or
other force majeure events, but only to the extent such change or effect
does not disproportionately affect SenoRx relative to the other industry
participants;
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any
change, in and of itself, in the share price or trading volume of the
shares of SenoRx common stock, without precluding any fact, circumstance,
effect, event, change or occurrence that may have contributed to or caused
such changes from being taken into account in determining whether a
Company Material Adverse Effect has occurred, unless such fact,
circumstance, effect, event, change or occurrence is itself not to be
considered in the determination of whether a Company Material Adverse
Effect has occurred as described in any other bullet point in this list of
excluded matters;
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any
fact, circumstance, effect, event, change or occurrence resulting from a
change after the date of the merger agreement in accounting rules or
procedures announced with respect to United States generally accepted
accounting principles or other accounting standards (or the interpretation
thereof), in each case, as applicable to the financial statements of
SenoRx, or a change after the date of the merger agreement in laws (or the
interpretation thereof), but only to the extent such change or effect does
not disproportionately affect SenoRx relative to the other industry
participants;
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any
failure, in and of itself, to meet any internal budgets, plans,
projections or forecasts of SenoRx’s revenue, earnings or other financial
performance or results of operations, or any published financial forecasts
or analyst estimates of SenoRx’s revenue, earnings or other financial
performance or results of operations or any change in analyst
recommendations, for any period, without precluding any fact,
circumstance, effect, event, change or occurrence that may have
contributed to or caused such changes from being taken into account in
determining whether a Company Material Adverse Effect has occurred, unless
such fact, circumstance, effect, event, change or occurrence is itself not
to be considered in the determination of whether a Company Material
Adverse Effect has occurred as described in any other bullet point in this
list of excluded matters;
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any
fact, circumstance, effect, event, change or occurrence attributable to
the execution, performance or announcement of the merger agreement
including, the identity of Bard, the loss or departure of officers or
other employees of SenoRx, or the loss or diminution in SenoRx’s
relationships, contractual or otherwise, with any of its customers,
suppliers, distributors, landlords, licensors, licensees or other business
partners, without precluding any legal or contractual consequences of the
execution of the merger agreement or the consummation of the transactions
from being taken into account in determining whether a Company Material
Adverse Effect has occurred;
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any
action taken or failed to be taken by SenoRx at the request or with the
consent of Bard, that, if taken without the request or the consent of
Bard, would have been prohibited by the terms of the merger agreement;
or
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any
legal proceedings made or brought by any of the current or former
stockholders of SenoRx, on their own behalf or on behalf of SenoRx,
against SenoRx or any of its officers or directors, including legal
proceedings arising out of the merger or in connection with any of the
other transactions contemplated by the merger
agreement.
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No
Solicitations (Page 66)
Subject
to certain exceptions, SenoRx has agreed that SenoRx and its officers and
directors will not, and SenoRx will cause its representatives not
to:
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solicit,
initiate or encourage (including by way of furnishing information or
assistance), or take any other action to facilitate, any inquiry in
connection with, or the making of any proposal from any person that
constitutes, or would reasonably be expected to lead to, an acquisition
proposal (as defined below);
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maintain
or continue, or enter into or participate in, any discussion or
negotiation with any person (other than Merger Sub, Bard or any Bard
representative, as applicable) regarding an acquisition proposal, or
furnish to any person (other than Merger Sub, Bard or any Bard
representative, as applicable) any information or otherwise cooperate in
any way with any effort or attempt by any other person to make or effect
an acquisition proposal; or
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subject
to the SenoRx board properly effecting a recommendation change (as
described below), withdraw or modify, in a manner adverse to Bard, its
approval or favorable recommendation of the merger agreement and the
merger, or approve an acquisition proposal, or enter into any
contract, arrangement or understanding with respect to acquisition
proposal, other than certain acceptable confidentiality agreements (we
refer to any of the actions described in this bullet point as a
recommendation change).
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However,
the merger agreement does not prohibit the SenoRx board, directly or indirectly
through SenoRx’s representatives, before obtaining the required stockholder
approval, from furnishing non-public information to, or entering into or
participating in discussions or negotiations with, any person that makes an
unsolicited written, bona fide acquisition proposal (which did not result from a
breach of the merger agreement) that provides for consideration per share of
SenoRx common stock that is greater than the merger consideration
if:
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the
SenoRx board determines in good faith after consultation with its outside
legal counsel that failure to take such action would be inconsistent with
its fiduciary duties to SenoRx’s stockholders under applicable
law;
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before
entering into or participating in discussions with such person, the SenoRx
board determines in good faith, after consultation with its outside legal
counsel and financial advisor, that the acquisition proposal constitutes
or would reasonably be expected to lead to a superior proposal (as defined
below); and
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before
furnishing any non-public information to, or entering into or
participating in discussions or negotiations with, such person, SenoRx (1)
receives from such person an executed confidentiality contract (which will
be provided to Bard for informational purposes) with terms no less
favorable to SenoRx than those contained in the confidentiality agreement
with Bard (it being understood and agreed that such confidentiality
contract need not contain a “standstill” or other similar provision that
prohibits such third party from making any proposal to acquire SenoRx,
acquire securities of SenoRx or nominate for election members of the
SenoRx board), and (2) concurrently with its delivery to such person,
SenoRx delivers to Bard and Merger Sub all such information not previously
provided to Bard and Merger Sub.
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For
purposes of the merger agreement, “acquisition proposal” means any offer or
proposal for a merger, acquisition, recapitalization, consolidation, tender
offer, exchange offer or similar transaction involving, or any proposal or offer
to purchase or acquire in any manner (A) assets representing 20% or more of the
assets of SenoRx or (B) an equity interest in 20% or more of the voting
securities of SenoRx, other than the transactions contemplated by the merger
agreement.
For
purposes of the merger agreement, “superior proposal” means any acquisition
proposal (substituting 50% for the 20% thresholds set forth in the definition of
“acquisition proposal”) the SenoRx board has determined in good faith, after
consultation with its outside counsel and financial advisor, and taking into
account all financial, regulatory, legal and other aspects of such acquisition
proposal, (i) is more favorable from a financial point of view to SenoRx’s
stockholders than the merger (including any adjustment to the terms and
conditions thereof proposed in writing by Bard in response to any such
acquisition proposal) and which such acquisition proposal, if it includes
non-cash consideration, would result in the receipt by SenoRx’s stockholders of
consideration economically superior to the consideration such holders are to
receive in the merger; (ii) is reasonably capable of being consummated no later
than nine months from the receipt of such acquisition proposal; and (iii) for
which financing, to the extent required, is then fully committed.
Change
in Recommendation (Page 67)
The
merger agreement provides that, notwithstanding the restrictions described in
the previous section, the SenoRx board may effect a recommendation change if the
SenoRx board determines in good faith, after consultation with its outside legal
counsel and financial advisor, that an acquisition proposal is a superior
proposal.
However,
before determining that an acquisition proposal is a superior proposal, the
following conditions must be met:
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the
SenoRx board must determine in good faith, after consultation with legal
counsel, that the failure to effect a recommendation change relating to a
superior proposal would be inconsistent with its fiduciary duties to
SenoRx’s stockholders under applicable
law;
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SenoRx
must notify Bard in writing that it intends to effect a recommendation
change relating to the superior proposal, attaching the current version of
the definitive agreement relating to the superior proposal (which we refer
to as a superior proposal notice);
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if
requested by Bard, SenoRx must make its representatives available to
discuss with Bard’s representatives, and to negotiate in good faith with
Bard’s representatives, any proposed modifications to the terms and
conditions of the merger agreement during the three business days after
delivery by SenoRx of the superior proposal notice to Bard;
and
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if
Bard delivers to SenoRx during that three business day period (as may be
extended as set forth in the merger agreement) a written, binding and
irrevocable offer meeting certain requirements, the SenoRx board must
determine in good faith, after considering the terms of the offer by Bard,
that the acquisition proposal giving rise to the superior proposal notice
continues to constitute a superior
proposal.
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The
merger agreement does not prohibit the SenoRx board from taking, and disclosing
to SenoRx’s stockholders, a position contemplated by Rule 14d-9 or Rule 14e-2
promulgated under the Securities Exchange Act of 1934, as amended, or the
Exchange Act, about any tender offer or exchange offer that is an acquisition
proposal, or making any disclosure to SenoRx’s stockholders that the SenoRx
board determines in good faith, after consultation with its outside legal
counsel, that the failure to make such disclosure would be inconsistent with its
fiduciary duties to SenoRx’s stockholders, subject to certain requirements to
notify Bard of the disclosure in advance and to reaffirm the SenoRx board’s
recommendation under certain circumstances.
Termination
of the Merger Agreement (Page 74)
SenoRx
and Bard may terminate the merger agreement and the merger and any other
transactions contemplated by the merger agreement may be abandoned at any time
before the effective time of the merger by mutual written consent.
Termination by
Bard or SenoRx
. In addition, either Bard or SenoRx may terminate the
merger agreement before the effective time of the merger if:
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any
governmental authority has (i) voted to challenge the merger in a judicial
or administrative proceeding; provided, however, that the right to
terminate the merger agreement pursuant to this provision will not be
available to any party that has failed to perform in all material respects
its obligations regarding filings and consents and requirements to use
commercially reasonable efforts to, among other things, effectuate the
consummation of the merger, or (ii) issued any order that has the effect
of preventing the consummation of the
merger;
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the
merger has not been consummated on or before November 4, 2010, subject to
extension of up to three months, at the election of either Bard or SenoRx,
under certain circumstances relating to obtaining antitrust approval, such
date, as may be so extended being the expiration date; except that Bard
and SenoRx must use commercially reasonable efforts to consummate any
necessary, non-material divestitures, in accordance with the terms of the
merger agreement, before the expiration date; and provided, further, that
the right to terminate will not be available to any party whose failure to
perform any covenant or obligation under the merger agreement was the
principal cause of or principally resulted in the failure of the merger to
have been consummated on or before the expiration date;
or
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if
stockholder approval is not obtained upon a vote at a duly held
stockholders meeting (including any adjournment or postponement thereof)
to adopt the merger agreement.
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Termination by
Bard
. Bard may also terminate the merger agreement before the effective
time of the merger if:
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SenoRx
has breached any of its representations, warranties, covenants or other
agreements in the merger agreement or any representation or warranty has
become untrue and such breach or inaccuracy (i) would give rise to the
failure of a condition described in the first three bullet points under
the heading “Conditions to the Merger—Conditions to Bard’s and Merger
Sub’s Obligations” above and (ii) has not been cured within thirty days
after written notice thereof is received by SenoRx; provided that Bard
will have no right to terminate the merger agreement in connection with
such breach or inaccuracy if there is an uncured breach or inaccuracy by
Bard or Merger Sub of the type described in the first bullet point under
the heading “Termination of the Merger Agreement—Termination by SenoRx”
below at the time of such breach or inaccuracy by SenoRx or at the time of
the purported termination in connection with such breach or
inaccuracy;
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a
recommendation change by the SenoRx board has occurred;
or
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SenoRx
(i) receives any warning letter, or similar written notice, or
correspondence from the FDA or any other governmental authority regulating
medical devices, relating to quality issues, that in the opinion of Bard,
would reasonably be expected to materially impair, or lead to actions that
materially impair, the business of SenoRx; provided that concurrently with
and as a condition to such termination of the merger agreement, Bard pays
the reverse termination fee, as described below, and/or (ii) receives
notice of, or is subject to, any consent decree relating to FDA regulatory
or quality issues.
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Termination by
SenoRx
. SenoRx may also terminate the merger agreement if:
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before
the effective time of the merger, Merger Sub or Bard has breached any of
their respective representations, warranties, covenants or other
agreements in the merger agreement or any such representation or warranty
shall have become untrue and the breach or inaccuracy (i) would give rise
to the failure of a condition described in the first two bullet points
under the heading “Conditions to the Merger—Conditions to SenoRx’s
Obligations” above and (ii) is not cured within thirty days after written
notice thereof is received by Merger Sub and Bard; provided that SenoRx
will have no right to terminate the merger agreement in connection with
such breach or inaccuracy if there is an uncured breach or inaccuracy by
SenoRx of the type described in the first bullet point under the heading
“Termination of the Merger Agreement—Termination by Bard” above at the
time of such breach or inaccuracy by Merger Sub or Bard or at the time of
the purported termination in connection with such breach or inaccuracy;
or
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at
any time before obtaining the approval of the majority of the holders of
the outstanding shares of SenoRx common stock to adopt the merger
agreement, (i) a valid recommendation change by the SenoRx board has
occurred after SenoRx has complied with the procedures set forth in the
merger agreement and (ii) concurrently with and as a condition to such
termination of the merger agreement, SenoRx enters into a definitive
contract relating to an acquisition proposal not solicited in violation of
the merger agreement that constitutes a superior proposal and pays Bard
the termination fee, as described
below.
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Any
proper and valid termination of the merger agreement will be effective
immediately upon the delivery of written notice of the terminating party to the
other party or parties hereto, as applicable.
Termination
Fees and Expenses (Page 75)
If the
merger agreement is terminated, it will become void without any liability on the
part of any party (except for any fee or expenses described below and except
that certain customary provisions, including those relating to confidentiality,
will survive the termination of the merger agreement). However, no such
termination will relieve any party from liability for fraud or any intentional
or willful breach of any of its representations, warranties, covenants or
agreements set forth in the merger agreement.
Under the
merger agreement, SenoRx is required to pay Bard a termination fee of $9 million
in the following circumstances:
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if
the merger agreement is terminated by SenoRx or Bard pursuant to the
provisions described in the second or third bullet points under the
heading “Termination of the Merger Agreement—Termination by Bard or
SenoRx” above and before the stockholders meeting, an acquisition proposal
has been made directly to the holders of SenoRx common shares or has
otherwise been publicly known and had not been withdrawn at the time of
the stockholders meeting, and at any time within twelve months after such
termination, SenoRx has entered into a definitive contract relating to any
acquisition proposal or a transaction contemplated by an acquisition
proposal has been consummated;
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if
the merger agreement is terminated by Bard pursuant to the provision
described in the second bullet point under the heading “Termination of the
Merger Agreement—Termination by Bard”
above;
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if
the merger agreement is terminated by SenoRx pursuant to the provision
described in the second bullet point under the heading “Termination of the
Merger Agreement—Termination by SenoRx” above;
or
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if
the merger agreement is terminated by Bard pursuant to the provision
described in the first bullet point under the heading “Termination of the
Merger Agreement—Termination by Bard” above based on a breach of any
covenant or agreement of SenoRx set forth in the merger agreement and
before such termination an acquisition proposal has been made directly to
the holders of SenoRx common shares or has otherwise been publicly known
and such acquisition proposal had not been withdrawn at the time of such
termination, and at any time within twelve months after such termination,
either SenoRx has entered into a definitive contract relating to any
acquisition proposal or a transaction contemplated by an acquisition
proposal has been consummated.
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Under the
merger agreement, Bard is required to pay SenoRx a termination fee of $9 million
if the merger agreement is terminated by Bard pursuant to the provision
described in clause (i) of the third bullet point under the heading “Termination
of the Merger Agreement—Termination by Bard” above.
In
addition, if the merger agreement is terminated by Bard pursuant to the
provision described in the first bullet point under the heading “Termination of
the Merger Agreement—Termination by Bard” above based on a breach of any
covenant or agreement of SenoRx set forth in the merger agreement, SenoRx will
reimburse Bard for the transaction expenses of Bard and Merger Sub. Such payment
will be credited against any termination fee that becomes payable by SenoRx
under the merger agreement. Likewise, if the merger agreement is terminated by
SenoRx pursuant to the provision described in the first bullet point under the
heading “Termination of the Merger Agreement—Termination by SenoRx” above based
on a breach of any covenant or agreement of Bard or Merger Sub set forth in the
merger agreement, Bard will reimburse SenoRx for the transaction expenses of
SenoRx.
Except as
expressly set forth in the merger agreement and described above, all fees, costs
and expenses incurred in connection with the merger agreement and the merger
will be paid by the party incurring such fees, costs and expenses, whether or
not the merger is consummated.
Regulatory
Approvals (Page 55)
Under the
provisions of the HSR Act, the merger may not be completed until notification
and report forms have been filed with the Antitrust Division of the United
States Department of Justice (which we refer to as the Antitrust Division) and
the Federal Trade Commission (which we refer to as the FTC) by SenoRx and Bard
and all applicable waiting periods have expired or been terminated. SenoRx and
Bard will file their respective notification and report forms with the Antitrust
Division and the FTC under the HSR Act.
Currently,
SenoRx and Bard do not believe there are any necessary antitrust notifications
to be filed in jurisdictions outside of the United States, but are in the
process of reviewing where merger control filings or approvals may be required
or desirable in other foreign jurisdictions.
Consummation
of the Merger (Page 72)
SenoRx
currently expects the merger to be completed in the third quarter of
2010. However, we cannot predict the exact timing of the consummation
of the merger and whether the merger will be consummated. In order to
consummate the merger, SenoRx’s stockholders must adopt the merger agreement and
the other closing conditions under the merger agreement, including receipt of
certain regulatory approvals, must be satisfied or, to the extent legally
permitted, waived.
Current
Market Price of Common Stock (Page 82)
The
closing sale price of SenoRx common stock on the NASDAQ Global Market (symbol:
SENO) on May 20, 2010, the last full trading day before the filing of this
proxy, was $10.84. You are encouraged to obtain current market
quotations for SenoRx common stock in connection with voting your
shares.
CAUTIONARY
STATEMENT CONCERNING FORWARD-LOOKING INFORMATION
This
proxy statement, and the documents to which we refer you in this proxy
statement, include forward-looking statements based on estimates and
assumptions. There are forward-looking statements throughout this
proxy statement, including, without limitation, under the headings “Summary,”
“The Special Meeting,” “The Merger,” “Opinion of SenoRx’s Financial Advisor,”
“Regulatory Approvals,” and in statements containing words such as “believes,”
“estimates,” “anticipates,” “continues,” “predict,” “potential,” “contemplates,”
“expects,” “may,” “will,” “likely,” “could,” “should” or “would” or other
similar words or phrases. These statements are subject to risks,
uncertainties, and other factors, including, among others:
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the
effect of the announcement of the merger on SenoRx’s business
relationships, operating results and business
generally;
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the
retention of certain key employees at
SenoRx;
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·
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the
occurrence of any event, change or other circumstances that could give
rise to the termination of the merger
agreement;
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·
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the
adoption of the merger agreement by SenoRx’s stockholders or other
conditions to the completion of the transaction may not be satisfied, or
the regulatory approvals required for the transaction may not be obtained
on the terms expected or on the anticipated schedule, if at
all;
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the
outcome of any legal proceedings that have or may have been instituted
against SenoRx or others relating to the
merger;
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the
amount of the costs, fees, expenses and charges related to the merger;
and
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SenoRx’s
and Bard’s ability to meet expectations regarding the timing and
completion of the merger.
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In
addition, we are subject to risks and uncertainties and other factors detailed
in SenoRx’s annual report on Form 10-K for the fiscal year ended December
31, 2009, filed with the Securities and Exchange Commission, which we refer to
herein as the SEC, on March 16, 2010 and SenoRx’s quarterly report on
Form 10-Q for the fiscal quarter ended March 31, 2010, filed with the SEC
on May 11, 2010, which should be read in conjunction with this proxy
statement. See “Where You Can Find More Information” on page
84. Many of the factors that will determine SenoRx’s future results
are beyond SenoRx’s ability to control or predict. In light of the
significant uncertainties inherent in the forward-looking statements contained
herein, readers should not place undue reliance on forward-looking statements,
which reflect management’s views only as of the date hereof. We
cannot guarantee any future results, levels of activity, performance or
achievements. The statements made in this proxy statement represent
SenoRx’s views as of the date of this proxy statement, and it should not be
assumed that the statements made herein remain accurate as of any future
date. Moreover, we assume no obligation to update forward-looking
statements or update the reasons that actual results could differ materially
from those anticipated in forward-looking statements, except as required by
law.
THE
SPECIAL MEETING
Date,
Time, Place and Purpose of the Special Meeting
This
proxy statement is being furnished to SenoRx’s stockholders as part of the
solicitation of proxies by the SenoRx board of directors for use at the special
meeting to be held on [__________], 2010, starting at [_:__ a/p.m.] Pacific
Time, at SenoRx’s principal executive offices located at 3 Morgan, Irvine,
California 92618-1917, or at any postponement or adjournment
thereof. The purpose of the special meeting is for SenoRx’s
stockholders to consider and vote on (1) a proposal to adopt the merger
agreement, (2) a proposal to adjourn or postpone the special meeting to a later
date or time, if necessary or appropriate, to solicit additional proxies if
there are insufficient votes at the time of the special meeting to adopt the
merger agreement and (3) such other business as may properly come before the
special meeting or any adjournments or postponements of the special
meeting. SenoRx’s stockholders must adopt the merger agreement in
order for the merger to occur. If SenoRx’s stockholders fail to adopt
the merger agreement, the merger will not occur. A copy of the merger
agreement is attached to this proxy statement as Annex A. You
are urged to read the merger agreement in its entirety.
Record
Date and Quorum
We have
fixed the close of business on [________], 2010 as the record date for the
special meeting, and only holders of record of SenoRx common stock on the record
date are entitled to vote at the special meeting. As of the record
date, 2010, there were [________] shares of SenoRx common stock issued and
outstanding and entitled to vote. Each share of SenoRx common stock
entitles its holder to one vote on all matters properly coming before the
special meeting.
A
majority of the shares of SenoRx common stock issued and outstanding and
entitled to vote at the special meeting constitutes a quorum for the purpose of
considering the proposals. Shares of SenoRx common stock held by
stockholders present in person or represented at the special meeting but not
voted, including shares of SenoRx common stock for which proxies have been
received but for which stockholders have abstained, will be treated as present
at the special meeting for purposes of determining the presence or absence of a
quorum for the transaction of all business. In the event that a
quorum is not present at the special meeting, the special meeting may be
adjourned or postponed to solicit additional proxies.
Vote
Required for Approval
You may
vote FOR or AGAINST, or you may ABSTAIN from voting on, the proposal to adopt
the merger agreement. Consummation of the merger requires the
adoption of the merger agreement by the affirmative vote of the holders of a
majority of the outstanding shares of SenoRx common stock entitled to vote at
the special meeting.
Therefore, if you abstain or fail to
vote, it will have the same effect as a vote against the adoption of the merger
agreement
.
The
adoption of the proposal to adjourn or postpone the special meeting to a later
time, if necessary or appropriate, to solicit additional proxies requires the
affirmative vote of a majority of the votes cast by holders of SenoRx common
stock present in person or represented by proxy at the special meeting and
entitled to vote thereon.
Therefore, if you abstain or fail to
vote, it will have no effect on the outcome of the
adjournment proposal
.
In
connection with the transactions contemplated by the merger agreement, certain
executive officers and stockholders of SenoRx, who collectively, as of the
record date, beneficially owned approximately [___]% of the total outstanding
shares of SenoRx common stock, have entered into a voting and support agreement
with Bard to, among other things, vote all shares of SenoRx common stock held by
them in favor of the adoption of the merger agreement. The executive
officers and stockholders who entered into the voting and support agreement with
Bard did not receive additional consideration for doing so (other than any
consideration they are otherwise entitled to receive under the merger agreement
in respect of their shares of SenoRx common stock). The voting and
support agreement is attached to this proxy statement as
Annex B.
As of the
record date, SenoRx’s directors and executive officers held and are entitled to
vote, in the aggregate, approximately [__] shares of SenoRx common stock,
representing approximately [___]% of SenoRx’s outstanding common
stock.
Proxies
and Revocation
If you
are a stockholder of record of your shares of SenoRx common stock and you submit
a proxy by telephone or via the Internet or by returning a signed and dated
proxy card by mail that is received by SenoRx before the date of or at the
special meeting, your shares will be voted at the special meeting as you
indicate. If you sign your proxy card without indicating your vote,
your shares will be voted “
FOR
” the adoption of the
merger agreement and “
FOR
” the adjournment or
postponement of the special meeting, if necessary or appropriate, to solicit
additional proxies, and in accordance with the recommendations of the SenoRx
board of directors on any other matters properly brought before the special
meeting, or at any adjournment or postponement thereof, for a vote.
If your
shares of SenoRx common stock are held in “street name,” you will receive
instructions from your brokerage firm, bank, trust or other nominee that you
must follow in order to have your shares voted. If you have not
received such voting instructions or require further information regarding such
voting instructions, contact your brokerage firm, bank, trust or other nominee,
as the case may be. If you fail to provide your brokerage firm, bank,
trust or other nominee with instructions on how to vote your shares of SenoRx
common stock, your nominee will not be able to vote such shares at the special
meeting. Please follow the simple directions on the voting
instruction form sent to you by your broker or nominee with this proxy
statement.
Proxies
received by SenoRx at any time before the vote being taken at the special
meeting, which have not been revoked or superseded before being voted, will be
voted at the special meeting. If you are a stockholder of record of
shares of SenoRx common stock, you have the right to change or revoke your proxy
at any time, unless noted below, before the vote is taken at the special
meeting:
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by
delivering to SenoRx’s Secretary, a signed written notice of revocation
bearing a date later than the date of the proxy, stating that the proxy is
revoked;
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by
attending the special meeting and voting in person (your attendance at the
meeting will not, by itself, revoke your proxy; you must vote in person at
the meeting);
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by
submitting a later-dated proxy card relating to the same shares of SenoRx
common stock; or
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by
submitting another proxy by telephone or via the
Internet.
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If you
are a “street name” holder of SenoRx common stock, you may change your vote by
submitting new voting instructions to your brokerage firm, bank, trust or other
nominee. You must contact your nominee to obtain instructions as to
how to change or revoke your proxy.
Written
notices of revocation and other communications with respect to the revocation of
any proxies should be addressed to:
SenoRx,
Inc.,
3 Morgan,
Irvine,
California 92618-1917,
Attn:
Secretary.
Adjournments
and Postponements
Although
it is not currently expected, the special meeting may be adjourned or postponed
for the purpose of soliciting additional proxies. SenoRx’s amended
and restated bylaws provide that any adjournment may be made without notice if
announced at the meeting at which the adjournment is taken and if the
adjournment is to a date that is not greater than thirty days after the original
date fixed for the special meeting and no new record date is fixed for the
adjourned meeting. Any signed proxies received by SenoRx before the
special meeting in which no voting instructions are provided on such matter will
be voted “
FOR
” an
adjournment or postponement of the special meeting, if necessary or appropriate,
to solicit additional proxies. Whether or not a quorum exists,
holders of a majority of SenoRx shares of common stock present in person or
represented by proxy and entitled to vote at the special meeting may adjourn the
special meeting.
The
proposal to adjourn or postpone the special meeting to a later date or time, if
necessary or appropriate, to solicit additional proxies requires the affirmative
vote of the majority of the votes cast by holders of SenoRx common stock present
in person or represented at the meeting. Therefore, if you abstain or fail to
vote, it will have no effect on the outcome of the proposal.
Any
adjournment or postponement of the special meeting for the purpose of soliciting
additional proxies will allow SenoRx’s stockholders who have already sent in
their proxies to revoke them at any time before their use at the special meeting
as adjourned or postponed.
Solicitation
of Proxies
This
proxy solicitation is being made and paid for by SenoRx on behalf of our board
of directors.
We have retained Innisfree M&A Incorporated to
assist in the solicitation of proxies for the special meeting for a fee not to
exceed $15,000, plus reimbursement of reasonable out-of-pocket
expenses. Our directors, officers and employees may also solicit
proxies by personal interview, mail, e-mail, telephone, facsimile or other means
of communication. These persons will not be paid additional
remuneration for their efforts. We will also request brokers and
other fiduciaries to forward proxy solicitation material to the beneficial
owners of shares of SenoRx common stock that the brokers and fiduciaries hold of
record. Upon request, we will reimburse them for their reasonable
out-of-pocket expenses.
Questions
and Additional Information
If you
have questions about the merger or how to submit your proxy, or if you need
additional copies of this proxy statement or the enclosed proxy card or voting
instructions, please contact our proxy solicitor, Innisfree M&A
Incorporated, by calling toll-free at +1 (888) 750-5834 (banks and brokers may
call collect at + 1 (212) 750-5833), or by mail at 501 Madison Avenue, 20th
Floor, New York, New York 10022.
Availability
of Documents
Documents
incorporated by reference (excluding exhibits to those documents unless the
exhibit is specifically incorporated by reference into those documents) will be
provided by first class mail without charge to each person to whom this proxy
statement is delivered upon written or oral request of such
person. In addition, our list of stockholders entitled to vote at the
special meeting will be available for inspection at our principal executive
offices at least ten days before the date of the special meeting and continuing
through the special meeting for any purpose germane to the meeting; the list
will also be available at the meeting for inspection by any stockholder present
at the meeting. See “Where You Can Find More Information” on
page 84 for more information regarding where you may request any of the
documents incorporated by reference in this proxy statement or other information
concerning SenoRx.
THE
COMPANIES
SenoRx,
Inc.
SenoRx,
Inc., a Delaware corporation, markets the EnCor(R) stereotactic-guided and
MRI-guided breast biopsy systems, the Gel Mark(R) line of breast tissue markers
and the Contura(R) balloon catheter for the treatment of breast
cancer. SenoRx’s principal executive offices are located at 3 Morgan,
Irvine, California 92618-1917, and its telephone number is +1 (949)
362-4800. See also “Where You Can Find More
Information.” SenoRx’s common stock is publicly traded on the NASDAQ
Global Market under the symbol “SENO.”
C.
R. Bard, Inc.
C. R.
Bard, Inc., a New Jersey corporation, is a multinational developer, manufacturer
and marketer of innovative, life-enhancing medical technologies in the fields of
vascular, urology, oncology and surgical specialty products. Bard’s
principal executive offices are located at 730 Central Avenue, Murray Hill, New
Jersey 07974, and its telephone number is +1 (800) 367-2273. Bard’s
common stock is publicly traded on the New York Stock Exchange under the symbol
“BCR.”
Raptor
Acquisition Corp.
Raptor
Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of Bard,
was formed solely for the purpose of facilitating Bard’s acquisition of
SenoRx. Raptor Acquisition Corp. has not carried on any activities to
date, except for activities incidental to its formation and activities
undertaken in connection with the transactions contemplated by the merger
agreement. Upon consummation of the merger, Raptor Acquisition Corp.
will merge with and into SenoRx and will cease to exist. Raptor
Acquisition Corp.’s principal executive offices are located at 730 Central
Avenue, Murray Hill, New Jersey 07974, and its telephone number is +1 (800)
367-2273.
THE
MERGER
This discussion of the merger is
qualified in its entirety by reference to the merger agreement, which is
attached to this proxy statement as Annex A and which is incorporated by
reference into this proxy statement. You should read the entire
merger agreement carefully as it is the legal document that governs the
merger
.
Background
of the Merger
From time
to time, SenoRx engaged in discussions with senior management of other medical
device companies, investment bankers and other potential strategic partners in
order to explore relationships that would accelerate its growth.
On June
29, 2009, Lloyd H. Malchow, who was then our Chairman, President and Chief
Executive Officer, met with Jim C. Beasley, Group Vice President of C. R. Bard,
Inc. During this meeting, Mr. Beasley expressed Bard’s potential interest in
exploring a possible business combination transaction between Bard and
SenoRx.
On June
30, 2009, Mr. Malchow received a letter from Mr. Beasley, which contained Bard’s
preliminary non-binding expression of interest to purchase all of SenoRx’s
issued and outstanding capital stock for cash consideration in the range of
$6.00 to $6.75 per share out of available cash without any financing
contingencies. The letter stated that the transaction value was subject to,
among other things, satisfactory completion of due diligence. On July 1, 2009 a
copy of the letter was distributed to the SenoRx board of directors for review
and a detailed review by the board and management followed.
Between
July 1, 2009 and July 17, 2009, representatives of SenoRx had discussions with
representatives of Bard on several occasions to explore a possible business
combination transaction between Bard and SenoRx.
On July
17, 2009, the SenoRx board of directors convened for a special meeting to
discuss the June 30th expression of interest from Bard. Representatives of
Wilson Sonsini Goodrich & Rosati, Professional Corporation (“Wilson
Sonsini”), SenoRx’s outside legal counsel, reviewed the board’s fiduciary duties
in this context. Our senior management then reviewed certain information and
analyses related to SenoRx’s financial performance and prospects, including,
among other things, an updated strategic plan for SenoRx (the annual strategic
plan having been previously presented to the SenoRx board at its regular meeting
in December 2008) and a review of strategic alternatives available to SenoRx.
Following discussion, the SenoRx board of directors instructed Mr. Malchow to
decline the offer and a letter was sent to Bard on July 17, 2009 informing Bard
that the SenoRx board of directors, after careful deliberation, had determined
to reject Bard’s offer.
On
September 3, 2009, Mr. Beasley expressed to Mr. Malchow Bard’s renewed interest
in acquiring SenoRx. On September 8, 2009, Mr. Malchow received a letter from
Mr. Beasley, outlining Bard’s revised preliminary non-binding expression of
interest to purchase all of SenoRx’s issued and outstanding capital stock for
cash consideration of $7.75 per share out of available cash without any
financing contingencies. The letter stated that the transaction value was
subject to, among other things, satisfactory completion of due diligence. The
letter set a deadline for SenoRx to respond of Friday, September 11, 2009 at
5:00pm Pacific time.
The
letter was forwarded to the SenoRx board of directors on the same day it was
received from Bard and was discussed at a previously scheduled meeting of the
board of directors held on September 9, 2009. Representatives of Wilson Sonsini
again reviewed the board’s fiduciary duties in this context. Our senior
management team then reviewed certain updated information and analyses related
to SenoRx’s financial performance and prospects, including, among other things,
an updated strategic plan for SenoRx and a review of strategic alternatives
available to SenoRx. Following discussion, the SenoRx board of directors
instructed Mr. Malchow to decline the offer and a letter was sent to Bard on
September 11, 2009 informing Bard that the SenoRx board of directors, after
deliberation, had determined to reject Bard’s offer.
In
addition, at the September 9 board meeting, our management was instructed to
interview and engage investment bankers to begin assisting it with strategic
planning and analysis on a going-forward basis. Following the board meeting, our
management contacted Piper Jaffray and certain other financial advisors to
discuss engaging one of them as SenoRx’s financial advisor in connection with a
potential sale of the company.
In late
September, Mr. Beasley and Mr. Malchow continued to explore a potential business
combination transaction between Bard and SenoRx.
In early
October 2009, Mr. Malchow met with representatives of Company A to discuss a
potential business combination transaction. During this meeting, the Company A
representatives expressed Company A’s potential interest in acquiring SenoRx,
and the parties discussed the potential “fit” between the two
companies.
On
October 6, 2009, Mr. Malchow received a letter from Company A, which contained
Company A’s non-binding proposal to purchase all of SenoRx’s issued and
outstanding capital stock for cash consideration in the range of $6.50 to $7.00
per share out of available cash without any financing contingencies. The letter
stated that the proposal was subject to completion of due diligence and
negotiation and execution of mutually acceptable definitive documentation
regarding the transaction. On October 8, 2009 a copy of the letter was
distributed to the SenoRx board of directors and it was discussed at a
previously scheduled board meeting held on October 8, 2009. Representatives of
Wilson Sonsini were also present at this meeting. Following discussion, the
SenoRx board of directors instructed Mr. Malchow to decline the offer and a
letter was sent to Company A on October 12, 2009 stating that the SenoRx board
of directors, after careful deliberation, had determined to reject Company A’s
proposal.
In
addition, at the October 8
th
board meeting, representatives of Piper Jaffray attended the meeting and made a
presentation to the SenoRx board of directors. The Piper Jaffray
presentation covered a number of topics, including an overview of SenoRx’s
position in the medical technology industry, a preliminary financial analysis of
SenoRx, and a review of strategic alternatives available to SenoRx.
Shortly
following the October 8
th
board meeting, SenoRx began to explore various strategic alternatives with Piper
Jaffray. In this regard, SenoRx, with the help of Piper Jaffray, began to
investigate undertaking a registered direct offering to fund and provide growth
capital for the business on a stand-alone basis. In addition, SenoRx also began
to contemplate other strategic alternatives, including commencing a process to
solicit proposals from third parties to acquire the company.
On
October 12, 2009, Mr. Malchow and Mr. Beasley discussed a potential business
combination transaction between Bard and SenoRx. Mr. Malchow informed
Mr. Beasley that the SenoRx board was exploring its strategic alternatives, and
had not determined to initiate a sales process.
On
October 27, 2009, we announced the appointment of John T. Buhler to the newly
created position of President and Chief Operating Officer of
SenoRx.
On
October 30, 2009, the SenoRx board of directors held a meeting, during which the
board considered in further detail the strategic alternatives available to
SenoRx. Representatives of Piper Jaffray and Wilson Sonsini were also present at
this meeting. After discussion, the SenoRx board determined preliminarily to
begin an active process to solicit proposals from third parties to acquire the
company and to retain Piper Jaffray to act as SenoRx’s financial advisor in
connection with the SenoRx board’s evaluation of a potential sale of the
company.
Acting
under the SenoRx board’s authorization given at a meeting held on November 10,
2009, SenoRx entered into a letter agreement with Piper Jaffray on November 11,
2009, pursuant to which Piper Jaffray was formally engaged to act as SenoRx’s
financial advisor in connection with a possible sale of the
company.
On
November 18, 2009, our management team met with representatives of Piper Jaffray
and Wilson Sonsini and outlined a process to solicit proposals from third
parties to acquire the company. Thereafter, our management team, with the
assistance of representatives of Piper Jaffray and Wilson Sonsini, prepared
preliminary materials concerning SenoRx for distribution to potentially
interested parties.
On
November 24, 2009 Piper Jaffray contacted three parties – Bard, Company A and
Company B – to determine their interest in potentially acquiring SenoRx. These
three parties were contacted first because they had recently expressed written
or verbal interest in acquiring SenoRx. The preliminary materials
concerning SenoRx which had previously been prepared, including a form of
confidentiality agreement, were then circulated to these three
parties.
On
December 18, 2009, we announced that a jury delivered a verdict in favor of
SenoRx in a lawsuit brought by Hologic, Inc., Cytyc Corp., and Hologic L.P.
(Hologic) in the U.S. District Court for the Northern District of
California.
By
January 12, 2010, Bard, Company A and Company B had negotiated and entered into
confidentiality agreements with SenoRx. During this time frame, a detailed
confidential informational memorandum was prepared by SenoRx, with the
assistance of representatives of Piper Jaffray and Wilson Sonsini. On or about
January 12, 2010, following execution of confidentiality agreements with each of
these three parties, respectively, the detailed confidential informational
memorandum was sent to each of them. Shortly thereafter, we provided each of
these three parties with access to limited confidential information related to
SenoRx in order to enable each of them to conduct a preliminary due diligence
review of SenoRx.
On
December 10, 2009, representatives of Piper Jaffray contacted a fourth party,
Company C, which had previously expressed interest in SenoRx, but not as
recently as Bard, Company A or Company B, to determine their interest in
potentially acquiring SenoRx. Company C did not receive preliminary materials.
On January 5, 2010, a representative from Company C contacted a representative
of Piper Jaffray to inform them that they did not have an interest in pursuing
an acquisition of SenoRx.
Between
January 5, 2010 and January 11, 2010, representatives of Piper Jaffray contacted
23 additional parties to determine their interest in potentially acquiring
SenoRx. Out of the 23 parties contacted between January 5, 2010 and January 11,
2010, 18 received preliminary materials. Out of the 18 parties that received
preliminary materials, one party entered into a confidentiality agreement with
SenoRx so that they could receive the detailed confidential informational
memorandum. Shortly thereafter, this party elected to withdraw from the
process.
On
January 20, 2010, a representative from Company C contacted Piper Jaffray to
express a renewed interest in acquiring SenoRx and subsequently Company C
received the preliminary materials. Company C and SenoRx could not
come to agreement regarding certain terms in the form confidentiality agreement
and therefore Company C did not receive any confidential materials.
For the
remainder of January 2010, each of the original three parties that had executed
confidentiality agreements with us, through their financial advisors and
directly, engaged in discussions with our management in connection with their
due diligence review of SenoRx. On January 18, 2010, our management delivered an
in-person presentation regarding SenoRx to Company A. On January 26, 2010, our
management delivered an in-person presentation to representatives of
Bard. On January 27, 2010, our management delivered an in-person
presentation to Company B. Representatives of Piper Jaffray requested each of
these three parties to submit their proposals to acquire SenoRx by February 16,
2010.
On
February 8, 2010, we announced that Mr. Malchow, our Chairman and Chief
Executive Officer, would be taking an indefinite medical leave of absence due to
illness, and that Mr. Buhler, our President and Chief Operating Officer, would
serve as our acting Chief Executive Officer.
On
February 10, 2010, the SenoRx board of directors held a meeting, during which
representatives of Piper Jaffray provided the board with an update regarding the
process of soliciting proposals from potential acquirors. Representatives of
Wilson Sonsini were also present at this meeting.
On
February 16, 2010, Mr. Malchow received a letter from Mr. Beasley, outlining
Bard’s preliminary non-binding expression of interest to purchase all of
SenoRx’s issued and outstanding capital stock for cash consideration in the
range of $10.50 to $11.50 per share out of available cash without any financing
contingencies. The letter stated that the transaction value was subject to,
among other things, satisfactory completion of due diligence and the execution
of a mutually satisfactory definitive agreement.
Company A
did not submit an updated proposal to acquire SenoRx, but rather through
its financial advisor indicated verbally to representatives of Piper Jaffray
that Company A would be interested in pursuing an acquisition of SenoRx on terms
consistent with their October 6
th
proposal.
Company
B did not submit a written proposal to acquire SenoRx, but rather through
its financial advisor indicated verbally to representatives of Piper Jaffray
that Company B would be interested in pursuing an acquisition of SenoRx at a per
share price equal to a premium of approximately 25% to the then current
market price of SenoRx common stock.
On
February 18, 2010, a special meeting of the SenoRx board of directors was held
to evaluate and consider the expressions of interest from Bard, Company A and
Company B. Representatives of Piper Jaffray presented its analysis of the
expressions of interest as well as a summary of the financial prospects of
SenoRx; conditions and trends in the medical technology industry; and the
strategic alternatives available to the company, including remaining as a
stand-alone public company. The SenoRx management team reviewed an updated
strategic plan for SenoRx and their views of current economic conditions and the
near- and long-term prospects for SenoRx. Representatives of Wilson Sonsini
reviewed the board’s fiduciary duties in this context. The SenoRx board of
directors focused on several considerations, including acceptable valuation
ranges; the scope of information that would be appropriate to provide to Bard in
connection with its due diligence; the importance of speed, if SenoRx were to
undertake discussions regarding a possible business combination, in order to
avoid any unnecessary distractions to SenoRx’s business and operations and to
reduce the risk that the existence of discussions with a potential acquirer
regarding a possible business combination would become widely known; and
establishing a high level of “deal certainty” (i.e., certainty that any proposed
transaction would be consummated), including the likelihood that a business
combination with Bard would receive all required antitrust approvals. After
discussion, the SenoRx board of directors elected to temporarily forego
negotiations with Company A and Company B because their valuation indications
were perceived to be too low and authorized Piper Jaffray to engage in
discussions with representatives of Bard regarding a possible transaction,
provided that the consideration payable in such a transaction is within a range
of at least $13.00 to $15.00 per share or more.
On
February 23, 2010, representatives of Goldman Sachs & Co., Bard’s financial
advisor, conveyed their client’s willingness to proceed with discussions
regarding a potential business combination transaction for a price of $11.50 per
share of SenoRx common stock, provided that SenoRx enter into an exclusive
negotiation period with Bard for a period of 45 days.
On
February 26, 2010, a special meeting of the SenoRx board of directors was held
to evaluate Bard’s revised proposal. After discussion, the SenoRx board of
directors authorized representatives of Piper Jaffray to further engage in
discussions with representatives of Goldman Sachs regarding a possible
transaction, provided that the consideration payable in such a transaction was
$12.50 per share or more, and SenoRx would enter into an exclusive negotiation
period with Bard for 30 days.
On March
3, 2010, representatives of Goldman Sachs communicated their client’s
willingness to proceed with discussions at a price of $12.00 per share of SenoRx
common stock, provided that SenoRx enter into an exclusive negotiation period
with Bard for a period of 45 days.
On March
5, 2010, a special meeting of the SenoRx board of directors was held to evaluate
and consider Bard’s revised proposal. Representatives of Piper Jaffray
summarized Bard’s most recent proposal for the SenoRx board, and presented its
financial analysis of Bard’s most recent proposal as well as a summary of the
financial prospects of SenoRx, and the other matters as covered in the February
18, 2010 board meeting. After discussion, the SenoRx board of directors
authorized SenoRx to enter into an exclusive negotiation period of no longer
than 30 days in duration based on Bard’s willingness to pay $12.00 for each
share of SenoRx common stock.
On March
12, 2010, Mr. Buhler received a letter from Mr. Beasley containing a revised,
preliminary non-binding expression of interest to purchase all of SenoRx’s
issued and outstanding capital stock for cash consideration of $12.00 per share
out of available cash without any financing contingencies. The letter stated
that the $12.00 per share consideration was subject to, among other things,
satisfactory completion of due diligence. On March 12, 2010, SenoRx entered into
an exclusive negotiation period with Bard until April 15, 2010.
Between
February 24, 2010 and March 12, 2010, representatives from Company B’s financial
advisor contacted Piper Jaffray on various occasions and expressed continued
interest in acquiring SenoRx at amounts approximating those communicated on
February 16, 2010. Representatives from Piper Jaffray informed representatives
from Company B’s financial advisor that the communicated amounts were not
sufficient, and if Company B was interested in acquiring SenoRx they should
submit a written proposal quickly while SenoRx was still in a position to have
discussions with Company B and its advisors regarding a possible transaction.
Company B never submitted a written proposal to acquire SenoRx.
On March
14, 2010, Mr. Malchow, our Chairman and Chief Executive Officer, passed away
while on a previously announced medical leave of absence. At a meeting held on
March 15, 2010, the SenoRx board of directors appointed Mr. Buhler, our acting
Chief Executive Officer, as our Chief Executive Officer, President and Chief
Operating Officer and as a member of the SenoRx board of directors, filling the
vacancy created by Mr. Malchow’s death.
Commencing
on March 14, 2010, Bard and its representatives and outside advisors, including
Weil Gotshal & Manges LLP (“Weil Gotshal”), Bard’s outside legal counsel,
were granted access to an online data room. Commencing on March 16,
2010, Bard also sent representatives on site to Irvine, California to
conduct a detailed due diligence investigation of SenoRx. During the balance of
the exclusivity period that ran through April 15, 2010, Bard continued to
conduct detailed due diligence activities.
On March
22, 2010, Mr. Buhler informed Mr. Beasley that SenoRx would likely miss its
financial projections for the quarter ended March 31, 2010.
On April
1, 2010, representatives of Weil Gotshal delivered a draft definitive merger
agreement for the transaction. Thereafter, representatives of Wilson Sonsini
reviewed the draft merger agreement, discussed the terms proposed in the draft
merger agreement with our senior management team, and prepared a revised draft
of the merger agreement.
On April
2, 2010, Mr. Buhler informed Mr. Beasley that SenoRx had in fact missed its
financial projections for the quarter ended March 31, 2010.
On April
8, 2010, representatives of Wilson Sonsini delivered a revised draft of the
merger agreement to representatives of Weil Gotshal. On April 12, 2010,
representatives of Wilson Sonsini discussed with representatives of Weil Gotshal
and Bard’s internal legal counsel the terms proposed in the revised merger
agreement. The negotiations with respect to the merger agreement focused
primarily on terms affecting closing certainty (such as defining the events that
would constitute a “Company Material Adverse Effect,” including Bard’s position
that the occurrence of certain events would be deemed to constitute a “Company
Material Adverse Effect”); commitments to obtain antitrust approvals; deal
protection terms (including the amount of the termination fee payable by SenoRx
and the conditions that must be satisfied before SenoRx would be permitted to
furnish non-public information to, or enter into discussions with, other
potential acquirors); and the ability of SenoRx to compel Bard to complete the
transaction if Bard were to breach its obligation to do so.
On April
9, 2010, a representative from Company B’s financial advisor left a voice mail
message for a representative of Piper Jaffray inquiring about SenoRx. The
representative from Piper Jaffray did not respond to Company B’s financial
advisor in accordance with the exclusivity terms negotiated with Bard. Bard was
made aware of this inquiry through written correspondence to Mr.
Beasley.
On April
15, 2010, the exclusive negotiation period with Bard ended and representatives
of Goldman Sachs contacted representatives of Piper Jaffray to present a revised
proposal from Bard to acquire SenoRx. In the revised proposal, Bard would lower
the price per share payable in the transaction from $12.00 per share to $11.00
per share. In addition, Bard reiterated its position that the occurrence of
certain events would be deemed to constitute a “Company Material Adverse Effect”
and that SenoRx would not be permitted to compel Bard to complete the
transaction if Bard were to breach its obligation to do so.
On April
16, 2010, a special meeting of the SenoRx board of directors was held to
evaluate and consider Bard’s revised April 15
th
proposal. Representatives of Piper Jaffray and Wilson Sonsini summarized Bard’s
most recent proposal for the SenoRx board. Our senior management team also
apprised the SenoRx board of directors of the status of Bard’s due diligence and
the expiration of the exclusive negotiation period. After discussion, the SenoRx
board authorized representatives of Piper Jaffray to contact representatives of
Company B’s financial advisor to determine whether Company B would be interested
in exploring a possible business combination transaction with SenoRx at this
time.
Later
that day on April 16, 2010, representatives of Piper Jaffray contacted
representatives of Company B’s financial advisor to discuss Company B’s level of
interest in exploring a possible business combination transaction with SenoRx at
this time. The Piper Jaffray representatives were informed that Company B was
not prepared to make a proposal to acquire SenoRx at such time.
On April
19, 2010, a special meeting of the SenoRx board of directors was held to
evaluate and consider Bard’s revised April 15
th
proposal. Representatives of Piper Jaffray summarized their discussions with
representatives of Company B’s financial advisor. Representatives of Piper
Jaffray and Wilson Sonsini again summarized Bard’s most recent proposal for the
SenoRx board, and representatives of Piper Jaffray presented its financial
analysis of Bard’s most recent proposal. Our senior management team also
presented a detailed overview of SenoRx’s business and strategic plan on a
stand-alone basis. Representatives of Wilson Sonsini reviewed the board’s
fiduciary duties in this context. After a detailed discussion, the SenoRx board
determined that SenoRx should continue discussions with Bard regarding the
proposed transaction at a price less than $12.00 per share, provided that Bard
revise its position that the occurrence of certain events would be deemed to
constitute a “Company Material Adverse Effect”, and that SenoRx would not be
permitted to compel Bard to complete the transaction if Bard were to breach its
obligation to do so.
On April
19, 2010, representatives of Piper Jaffray contacted representatives of Goldman
Sachs to communicate the SenoRx board’s position with respect to the price per
share payable in the proposed transaction as well as the key unresolved issues
in the definitive merger agreement. Representatives of Piper Jaffray
communicated to representatives of Goldman Sachs that the SenoRx board was
willing to continue discussions regarding the proposed transaction at a price
less than $12.00 per share, but it had not accepted $11.00 per share.
Additionally, representatives of Piper Jaffray communicated to representatives
of Goldman Sachs that the SenoRx board requested Bard to revise its position
regarding certain aspects of the definitive agreement. Representatives of
Goldman Sachs conveyed Bard’s willingness to consider in good faith the SenoRx
board’s positions on the key unresolved issues.
On April
22, 2010, representatives of Wilson Sonsini discussed with representatives of
Weil Gotshal and Bard’s internal legal counsel the terms proposed in the revised
merger agreement. The negotiations with respect to the merger agreement
continued to focus primarily on terms affecting closing certainty (such as
defining the events that would constitute a “Company Material Adverse Effect,”
including Bard’s position that the occurrence of certain events would be deemed
to constitute a “Company Material Adverse Effect”); commitments to obtain
antitrust approvals; deal protection terms (including the amount of the
termination fee payable by SenoRx and the conditions that must be satisfied
before SenoRx would be permitted to furnish non-public information to, or enter
into discussions with, other potential acquirors); and the ability of SenoRx to
compel Bard to complete the transaction if Bard were to breach its obligation to
do so.
On April
23, 2010, a special meeting of the SenoRx board of directors was held during
which our senior management team and representatives of Wilson Sonsini provided
the SenoRx board with an update on the transaction, including the status of the
negotiations of the definitive merger agreement. The SenoRx board provided
guidance to our senior management and representatives of Wilson Sonsini on
appropriate and acceptable definitive terms for the transaction.
On April
25, 2010, representatives of Goldman Sachs and Weil Gotshal contacted
representatives of Piper Jaffray and Wilson Sonsini, respectively, to
communicate Bard’s position with respect to the price per share payable in the
proposed transaction as well as the key unresolved issues in the definitive
merger agreement. Specifically, Bard would be willing to pay a price of $11.00
per share in the proposed transaction, to give SenoRx the right to compel Bard
to complete the transaction if Bard were to breach its obligation to do so, and
to remove all of the events that would be deemed to constitute a “Company
Material Adverse Effect” other than specified regulatory actions pertaining to
FDA quality issues.
On April
26, 2010, representatives of SenoRx and Wilson Sonsini held a series of
discussions with representatives of Bard and Weil Gotshal with respect to the
term proposed by Bard that would give Bard the right to abandon the proposed
transaction without any recourse available to SenoRx if SenoRx were to become
subject to specified regulatory actions pertaining to FDA quality issues. The
representatives of SenoRx and Wilson Sonsini indicated that SenoRx was not
prepared to proceed on such terms.
On April
28, 2010, discussions continued regarding this term of the definitive merger
agreement. By the end of the day, Mr. Beasley communicated to Mr. Buhler that
Bard was not willing to accept the revisions proposed by SenoRx that would have
addressed its concerns with respect to closing certainty. The representatives of
SenoRx and Wilson Sonsini indicated that SenoRx was not prepared to proceed on
such terms.
On April
29, 2010, SenoRx held a board meeting where an update on the transaction,
including the status of the negotiations of the definitive merger agreement, was
presented by management and representatives of Wilson Sonsini. Details of the
discussions that had occurred on and since April 26
th
were
reviewed, including Bard’s unwillingness to modify the provision from the
definitive merger agreement giving Bard the right to abandon the proposed
transaction without any recourse available to SenoRx if SenoRx were to become
subject to specified regulatory actions pertaining to FDA quality issues. The
SenoRx board provided guidance to management on appropriate and acceptable
definitive terms for the transaction.
Following
the April 29
th
board meeting, Mr. Buhler communicated to Mr. Beasley SenoRx’s proposal that
Bard would be required to pay SenoRx a termination fee in an amount equal to 8%
to 10% of SenoRx’s equity value based on the price per share payable in the
proposed transaction if Bard elected not to complete the acquisition if SenoRx
were to become subject to specified regulatory actions pertaining to FDA quality
issues. After a series of discussions, Mr. Beasley informed Mr. Buhler that
Bard’s best and final offer with respect to the amount of the termination fee
payable in this circumstance would be $9.0 million.
On April
30, 2009, SenoRx held a board meeting where the principal terms of the
transaction, including the specified terms with respect to the FDA quality
issues and the $9.0 million termination fee, were discussed. The Board
authorized management to proceed to negotiate a definitive merger agreement on
the terms as outlined above.
Between
April 30, 2010 and May 4, 2010, representatives of SenoRx and Wilson Sonsini
discussed with representatives of Bard and Weil Gotshal on numerous occasions
the remaining unresolved issues in the definitive merger agreement. In addition,
during this period, representatives of Bard and Bard’s outside advisors,
including Weil Gotshal, completed their due diligence investigation of
SenoRx.
On May 4,
2010, the SenoRx board of directors met to review and discuss the proposed
transaction and the status of the negotiations on the definitive merger
agreement. Representatives of Wilson Sonsini provided a summary of the board’s
fiduciary obligations in this context. Representatives of Piper Jaffray then
presented various financial analyses related to SenoRx. After discussion,
representatives of Piper Jaffray delivered an oral opinion, which was
subsequently confirmed by delivery of a written opinion, that as of May 4, 2010
and based upon and subject to assumptions, procedures, considerations and
limitations set forth in the written opinion and based upon such other factors
as Piper Jaffray considered relevant, that the merger consideration of $11.00
per share, in cash, to be paid in connection with the merger is fair, from a
financial point of view, to the holders of SenoRx common stock (other than Bard
and its affiliates, if any). The full text of the written opinion of Piper
Jaffray, which sets forth the assumptions made, procedures followed, matters
considered and limitations on the review undertaken by Piper Jaffray in
rendering its opinion, is attached to this proxy statement as Annex C.
Representatives of Wilson Sonsini next summarized the principal terms and
conditions of the proposed merger agreement with Bard. After deliberations and
consideration, the SenoRx board of directors unanimously determined that the
merger agreement and the terms and conditions of the contemplated merger and the
merger agreement are fair to, advisable and in the best interests of SenoRx and
its stockholders, approved and adopted the merger agreement and the contemplated
merger, and directed that the adoption of the merger agreement be submitted to
SenoRx’s stockholders for consideration and recommended that all of the SenoRx
stockholders adopt the merger agreement. On the night of May 4, 2010, SenoRx and
Bard executed the Merger Agreement.
On May 5,
2010, Bard and SenoRx announced the execution of the Merger
Agreement.
Reasons
for the Merger; Recommendation of the SenoRx Board of Directors
The
SenoRx board of directors unanimously (i) determined that the merger
agreement and the terms and conditions of the merger and the merger agreement
are fair to and in the best interests of SenoRx and its stockholders,
(ii) declared it advisable that the SenoRx enter into the merger agreement
and consummate the merger and the other transactions contemplated thereby on the
terms and subject to the conditions set forth in the merger agreement, and
(iii) recommends that the stockholders of SenoRx adopt the merger
agreement.
In
reaching its determination, the SenoRx board of directors consulted with
SenoRx’s management, as well as SenoRx’s legal and financial advisors, and
reviewed: (i) information concerning SenoRx’s business, financial performance
and condition, operations, technology and competitive position; (ii) the
financial condition, results of operations, businesses and strategic objectives
of SenoRx; (iii) current financial market conditions and historical market
prices, volatility and trading information with respect to SenoRx’s common
stock; (iv) the consideration to be received by SenoRx’s stockholders in
the merger; (v) the terms of the merger agreement, including the parties’
representations, warranties and covenants, and the conditions to their
respective obligations; (vi) the potentially interested parties contacted by or
on behalf of SenoRx and the acquisition proposals submitted by interested
parties, possible alternative strategies as well as the prospects of SenoRx as
an independent company; (vii) detailed financial analyses presented by Piper
Jaffray to the SenoRx board of directors; and (viii) Piper Jaffray’s opinion, to
the effect that, based upon and subject to the assumptions, procedures,
considerations and limitations set forth in the written opinion and based upon
such other factors as Piper Jaffray considered relevant, that the merger
consideration of $11.00 per share, in cash, to be paid in connection with the
merger is fair, from a financial point of view, to the holders of SenoRx common
stock (other than Bard and its affiliates, if any) as of the date of the
opinion.
In
addition, our board considered the following material factors:
Factors Relating
to Challenges SenoRx Faces as an Independent Company
:
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reduced
procedure volumes associated with changes in mammography guidelines and
fewer people with health insurance that we believe is the experience of
the entire market;
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changes
in ASTRO guidelines that have limited use of Contura MLB and its market
opportunity;
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we
will need to hire additional members of the management team, including a
new VP of Sales, following the appointment of Mr. Buhler as Chief
Executive Officer;
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the
FDA 483 notice we received in 2009 and the associated corrective actions
are occupying significant resources and we could be sanctioned by the FDA,
which could interrupt our ability to sell
products;
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Hologic
has filed an appeal of the decision in our patent infringement lawsuit and
responding to such appeal will occupy significant resources (both time of
management and cash);
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as
a standalone public company, SenoRx could fail to continue to deliver
consistently high revenue growth, which could adversely affect our stock
price for an extended period due to the low trading volume in our stock
and limited analyst coverage of our
company;
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for
us to continue to grow revenues, we will need to complete development and
launch of new products that are in our R&D pipeline, and there is
inherent risk (FDA approval, clinical efficacy, market adoption, etc.)
involved in such R&D activities;
and
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our
margins have been increasing over time, but at a reduced absolute rate,
and it will be difficult to continue to increase margins without larger
scale.
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Factors Relating
to the Specific Terms of our Negotiations and Merger Agreement with
Bard
:
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The
merger consideration of $11.00 per share to be received by SenoRx
stockholders represents a premium of
approximately:
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14%
over the closing price of SenoRx common stock on May 4, 2010, the trading
day immediately preceding the day that the proposed transaction with Bard
was publicly announced;
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13%
over the closing price of SenoRx common stock on April 28, 2010, one week
prior to the day that the proposed transaction with Bard was publicly
announced; and
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32%
over the closing price of SenoRx common stock on April 7, 2010, four weeks
prior to the day that the proposed transaction with Bard was publicly
announced.
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The
merger consideration consists solely of cash, which provides certainty of
value to SenoRx stockholders;
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Bard
has, and has represented in the merger agreement that it will have at the
effective time of the merger, adequate capital resources to pay the
aggregate merger consideration, and the closing of the merger is not
subject to any financing condition;
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The
business reputation of Bard and its management and the substantial
financial resources of Bard, which the SenoRx board of directors believed
supported the conclusion that a transaction with Bard could be completed
in an orderly manner;
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The
strategic alternatives to a sale of the company available to SenoRx
(including continuing to operate SenoRx as a standalone public company),
the range of potential benefits to SenoRx stockholders of these
alternatives and the timing and the likelihood of accomplishing the goals
of such alternatives, as well as the SenoRx board’s assessment that none
of these alternatives was reasonably likely to present superior
opportunities for SenoRx to create greater value for SenoRx stockholders,
taking into account risks of execution as well as business, competitive,
industry and market risks;
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The
results of the market check that the SenoRx board of directors had
conducted, with the assistance of SenoRx’s senior management, Piper
Jaffray and Wilson Sonsini, to evaluate alternative transaction proposals,
including that:
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Representatives
of Piper Jaffray contacted 27 parties to determine their interest in
potentially acquiring SenoRx;
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Of
the 27 parties that were contacted, only four parties (including Bard)
entered into confidentiality agreements with SenoRx, and only three
parties (including Bard) elected to participate in in-person presentations
with the SenoRx management team, and only one (Bard) submitted a written
proposal to acquire SenoRx at the appointed
deadline;
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Representatives
of SenoRx, Piper Jaffray and Wilson Sonsini engaged in numerous
discussions with representatives of Bard, Goldman Sachs and Weil Gotshal
to obtain the highest price and other terms reasonably available with
respect to a possible acquisition of SenoRx;
and
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Based
on the foregoing, the SenoRx board of directors determined that the merger
contemplated by the merger agreement reflected the highest value
reasonably attainable for SenoRx
stockholders.
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Under
the merger agreement, although it is prohibited from soliciting any
acquisition proposal, participating in any discussion or negotiation with
any person other than Merger Sub, Bard, or its representatives regarding
an acquisition proposal, and furnishing any information to or cooperating
with any person other than Merger Sub, Bard, or its representatives in
making an acquisition proposal, SenoRx has the right to furnish non-public
information to, or enter into or participate in discussions or
negotiations with, any person that makes an unsolicited written, bona fide
acquisition proposal (which did not result from a breach of the merger
agreement) that provides for consideration per share of common stock that
is greater than the merger consideration if (1) the SenoRx board of
directors determines in good faith after consultation with its outside
legal counsel that failure to take such action would be inconsistent with
its fiduciary duties to SenoRx’s stockholders under applicable law,
(2)
before entering into or participating in discussions with such person, the
SenoRx board determines in good faith, after consultation with its outside
legal counsel and financial advisor, that the acquisition proposal
constitutes or would reasonably be expected to lead to a superior proposal
and (3) before furnishing any non-public information to, or entering into
or participating in discussions or negotiations with, such person, SenoRx
(x) receives from such person an executed confidentiality contract (which
will be provided to Bard for informational purposes) with terms no less
favorable to SenoRx than those contained in the confidentiality agreement
with Bard (it being understood and agreed that such confidentiality
contract need not contain a “standstill” or other similar provision that
prohibits such third party from making any proposal to acquire SenoRx,
acquire securities of SenoRx or nominate for election members of the
SenoRx board), and (y) concurrently with its delivery to such person,
SenoRx delivers to Bard and Merger Sub all such information not previously
provided to Bard and Merger
Sub.
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SenoRx
has the right to terminate the merger agreement in order to accept a
superior proposal, subject to the terms and conditions contained in the
merger agreement, including the payment to Bard of a termination fee of $9
million;
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The
$9 million termination fee payable by SenoRx to Bard, if the merger
agreement is terminated for the reasons described in the merger agreement,
was reasonable and comparable to termination fees in transactions of a
similar size, and would not likely be required to be paid unless SenoRx
wished to accept a superior
proposal;
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The
limited number and nature of the conditions to Bard’s obligation to
consummate the merger and the obligations of Bard with respect to efforts
to meet all of the conditions of the merger, including obtaining
regulatory approval, which were the product of extensive arms-length
negotiations among the parties;
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The
efforts made by the SenoRx board of directors and its advisors to
negotiate and execute a merger agreement favorable to
SenoRx.
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The
merger agreement must be adopted by a vote of a majority of the
outstanding shares of SenoRx common stock;
and
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The
SenoRx board of directors considered the other terms and conditions of the
merger agreement, including: the proposed transaction structure; the
treatment of outstanding equity awards in the merger; the parties’
representations, warranties, covenants and agreements; the conditions to
their respective obligations to, as well as the likelihood of the
consummation of, the merger; the termination provisions of the merger
agreement; and the SenoRx board’s evaluation of the likely time period
necessary to close the merger.
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Potential
Negative Factors Relating to the Transaction
:
In the
course of its deliberations, the SenoRx board of directors also considered a
variety of risks and other potentially negative factors, including the
following:
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The
merger consideration consists solely of cash and will be taxable to SenoRx
stockholders for U.S. federal income tax purposes. In addition,
because SenoRx stockholders are receiving cash for their stock, they will
not participate after the consummation of the merger in any future growth
or the benefits of synergies resulting from the
merger;
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The
merger agreement provides that Bard may terminate the merger agreement and
the merger and any other transactions contemplated by the merger agreement
may be abandoned at any time before the effective time of the merger if
SenoRx (i) receives any warning letter, or similar written notice, or
correspondence from the FDA or any other governmental authority regulating
medical devices, relating to quality issues, that in the opinion of Bard,
would reasonably be expected to materially impair, or lead to actions that
materially impair, the business of SenoRx; provided that concurrently with
and as a condition to such termination of the Merger Agreement, Bard pays
a reverse termination fee, as described below, and/or (ii) receives notice
of, or is subject to, any consent decree relating to FDA regulatory or
quality issues. In weighing the risks of this factor, the SenoRx board of
directors considered the $9 million reverse termination fee that Bard
would be required to pay SenoRx in connection with exercising the
termination right in the circumstances described in clause (i)
above;
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The
merger will be subject to antitrust review in the United States, which
could delay or prevent the consummation of the merger. The
SenoRx board of directors noted that, although the terms and conditions of
the merger agreement increase the likelihood that all required antitrust
approvals will be obtained, they did not ensure that all of the required
approvals would be obtained. Therefore, there is a risk that
the consummation of the merger might be delayed or
prevented;
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The
merger agreement prohibits SenoRx from soliciting any acquisition
proposal, participating in any discussion or negotiation with any person
other than Merger Sub, Bard, or its representatives regarding an
acquisition proposal, and furnishing any information to or cooperating
with any person other than Merger Sub, Bard, or its representatives in
making an acquisition proposal. The SenoRx board of directors concluded,
however, that this limitation was reasonable because it is customary for
transactions of this type; SenoRx had conducted a market check prior to
entering into the merger agreement with Bard; and subject to the terms and
conditions of the merger agreement, SenoRx has the right to furnish
non-public information to, or enter into or participate in discussions or
negotiations with, any person that makes an unsolicited written, bona fide
acquisition proposal (which did not result from a breach of the merger
agreement) that provides for consideration per share of common stock that
is greater than the merger consideration if (1) the SenoRx board of
directors determines in good faith after consultation with its outside
legal counsel that failure to take such action would be inconsistent with
its fiduciary duties to SenoRx’s stockholders under applicable law,
(2)
before entering into or participating in discussions with such person, the
SenoRx board determines in good faith, after consultation with its outside
legal counsel and financial advisor, that the acquisition proposal
constitutes or would reasonably be expected to lead to a superior proposal
and (3) before furnishing any non-public information to, or entering into
or participating in discussions or negotiations with, such person, SenoRx
(x) receives from such person an executed confidentiality contract (which
will be provided to Bard for informational purposes) with terms no less
favorable to SenoRx than those contained in the confidentiality agreement
with Bard (it being understood and agreed that such confidentiality
contract need not contain a “standstill” or other similar provision that
prohibits such third party from making any proposal to acquire SenoRx,
acquire securities of SenoRx or nominate for election members of the
SenoRx board), and (y) concurrently with its delivery to such person,
SenoRx delivers to Bard and Merger Sub all such information not previously
provided to Bard and Merger
Sub;
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SenoRx
is obligated to pay to Bard a termination fee of $9 million if the merger
agreement is terminated under certain circumstances. Although
the SenoRx board of directors felt that these payment terms were
reasonable when viewed in context with all other aspects of the merger
agreement, it is possible that these provisions could discourage an
alternative transaction proposal or reduce the price in an alternative
transaction;
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Certain
of the SenoRx directors and officers may receive certain benefits that are
different from, and in addition to, those of other SenoRx stockholders,
including under change in control arrangements that certain executive
officers are a party to, the cash-out of previously unvested stock-based
awards at the effective time of the merger, and rights to continued
insurance and indemnification for six years following the effective time
of the merger. See “The Merger—Interests of SenoRx’s Directors
and Executive Officers in the Merger”;
and
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SenoRx
may incur significant risks and costs if the merger does not close,
including the diversion of management and employee attention during the
period after the signing of the merger agreement, potential employee
attrition and the potential effect on our business and customer
relations. In that regard, under the merger agreement, SenoRx
must conduct its business in the ordinary course and is subject to a
variety of other restrictions on the conduct of its business prior to
completion of the merger or termination of the merger agreement, which may
delay or prevent SenoRx from undertaking business opportunities that may
arise.
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The above
discussion is not intended to be exhaustive, but SenoRx believes it addresses
the material information and factors considered by the SenoRx board of directors
in its consideration of the merger, including factors that support the merger as
well as those that may weigh against it. In view of the number and
variety of factors and the amount of information considered, the SenoRx board of
directors did not find it practicable to make specific assessments of, quantify
or otherwise assign relative weights to the specific factors considered in
reaching its determination. In addition, the SenoRx board of
directors did not undertake to make any specific determination as to whether any
particular factor, or any aspect of any particular factor, was favorable or
unfavorable to its ultimate determination, and individual members of the SenoRx
board of directors may have given different weights to different
factors.
THE BOARD OF DIRECTORS OF SENORX HAS
UNANIMOUSLY APPROVED THE MERGER AGREEMENT AND UNANIMOUSLY RECOMMENDS THAT
STOCKHOLDERS OF SENORX VOTE IN FAVOR OF ADOPTION OF THE MERGER AGREEMENT AND
APPROVAL OF THE MERGER
.
Opinion
of SenoRx’s Financial Advisor
Pursuant
to an engagement letter dated November 11, 2009,
SenoRx retained Piper
Jaffray to act as its financial advisor. At a meeting of the SenoRx board of
directors on May 4, 2010, Piper Jaffray issued its oral opinion to the SenoRx
board of directors, later confirmed in a written opinion of the same date, that
based upon and subject to the assumptions, procedures, considerations and
limitations set forth in the written opinion and based upon such other factors
as Piper Jaffray considered relevant, that the merger consideration of $11.00
per share, in cash, to be paid in connection with the merger is fair, from a
financial point of view, to the holders of SenoRx common stock (other than Bard
and its affiliates, if any) as of the date of the opinion.
The
full text of the Piper Jaffray written opinion dated May 4, 2010, confirming its
oral opinion issued to the SenoRx board of directors on May 4, 2010, sets forth,
among other things, the assumptions made, procedures followed, matters
considered and limitations on the scope of the review undertaken by Piper
Jaffray in rendering its opinion, is attached as Annex C to this proxy statement
and is incorporated in its entirety herein by reference. You are urged to, and
should, carefully read the Piper Jaffray opinion in its entirety, and this
summary is qualified by reference to the written opinion. The Piper Jaffray
opinion addresses only the fairness, from a financial point of view and as of
the date of the opinion, of the purchase price to the holders of SenoRx common
stock, other than Bard and its affiliates, if any. Piper Jaffray’s opinion was
directed solely to the SenoRx board of directors in connection with its
consideration of the merger and was not intended to be, and does not constitute,
a recommendation to any SenoRx stockholder as to how any SenoRx stockholder
should act or vote with respect to the merger or on any other matter. The Piper
Jaffray opinion was approved for issuance by the Piper Jaffray Opinion
Committee.
In
connection with rendering the opinion described above and performing its
financial analyses, Piper Jaffray, among other things:
|
·
|
reviewed
and analyzed the financial terms of a draft of the merger agreement dated
May 4, 2010;
|
|
·
|
reviewed
and analyzed certain financial and other data with respect to SenoRx which
was publicly available;
|
|
·
|
reviewed
and analyzed certain information, including financial forecasts, relating
to the business, earnings, cash flow, assets, liabilities and prospects of
SenoRx that were publicly available, as well as those that were furnished
to Piper Jaffray by SenoRx;
|
|
·
|
conducted
discussions with members of senior management and representatives of
SenoRx concerning the two immediately preceding matters described above,
as well as SenoRx’s business and prospects before and after giving effect
to the merger;
|
|
·
|
reviewed
the current and historical reported prices and trading activity of SenoRx
common stock and similar information for certain other companies deemed by
Piper Jaffray to be comparable to
SenoRx;
|
|
·
|
compared
the financial performance of SenoRx with that of certain other publicly
traded companies that Piper Jaffray deemed relevant;
and
|
|
·
|
reviewed
the financial terms, to the extent publicly available, of certain business
combination transactions that Piper Jaffray deemed
relevant.
|
In
addition, Piper Jaffray conducted such other inquiries, examinations and
analyses, including a selected publicly traded companies analysis, a selected
M&A transaction analysis, a premiums paid analysis and a discounted cash
flow analysis, and considered such other financial, economic and market criteria
as Piper Jaffray deemed necessary in arriving at its opinion.
The
following is a summary of the material financial analyses performed by Piper
Jaffray in connection with the preparation of its fairness opinion, which was
reviewed with, and formally delivered to, the SenoRx board of directors at a
meeting held on May 4, 2010. The preparation of analyses and a fairness opinion
is a complex analytic process involving various determinations as to the most
appropriate and relevant methods of financial analysis and the application of
those methods to the particular circumstances. Therefore, this summary does not
purport to be a complete description of the analyses performed by Piper Jaffray
or of its presentation to the SenoRx board of directors on May 4,
2010.
This
summary includes information presented in tabular format, which tables must be
read together with the text of each analysis summary and considered as a whole
in order to fully understand the financial analyses presented by Piper Jaffray.
The tables alone do not constitute a complete summary of the financial analyses.
The order in which these analyses are presented below, and the results of those
analyses, should not be taken as any indication of the relative importance or
weight given to these analyses by Piper Jaffray or the SenoRx board of
directors. Except as otherwise noted, the following quantitative information, to
the extent that it is based on market data, is based on market data as it
existed on or before May 3, 2010, and is not necessarily indicative of current
market conditions.
For
purposes of its analyses, Piper Jaffray calculated (i) SenoRx’s equity value
implied by the merger to be $213 million, based on approximately 19.33 million
shares of SenoRx common stock outstanding as of May 3, 2010, calculated using
the treasury stock method and the merger consideration, and (ii) SenoRx’s
enterprise value (for the purposes of this analysis, implied enterprise value
equates to implied equity value, plus debt, less cash) to be $198
million.
Financial
Analyses
Selected
Publicly Traded Companies Analysis
. Piper Jaffray reviewed selected
historical financial data of SenoRx, as well as estimated financial data of
SenoRx that were prepared by SenoRx’s management as its internal forecasts, for
calendar years 2009 and 2010 and compared them to corresponding financial data,
where applicable, for publicly traded companies in the medical technology
industry which Piper Jaffray believed were comparable to SenoRx’s financial
profile. Piper Jaffray selected companies based on information obtained by
searching SEC filings, public company disclosures, press releases, industry and
popular press reports, databases and other sources and by applying the following
criteria:
|
·
|
companies
with revenue growth greater than 10% for 2009 and projected revenue growth
greater than 10% in 2010;
|
|
·
|
companies
with last twelve months (LTM) revenue or forward twelve months (FTM)
revenue between $50 million and $200
million;
|
|
·
|
companies
with enterprise values between $100 million and $500 million;
and
|
|
·
|
companies
with LTM gross margin greater than
50%.
|
Based on
these criteria, Piper Jaffray identified and analyzed the following seven
selected companies:
|
·
|
Micrus
Endovascular Corporation
|
|
·
|
Synovis
Life Technologies, Inc.
|
|
·
|
Vascular
Solutions, Inc.
|
For the
selected publicly traded companies analysis, Piper Jaffray compared 2009 and
2010 valuation multiples for SenoRx derived from the merger consideration and
SenoRx’s corresponding revenue, EBITDA and earnings, on the one hand, to
valuation multiples for the selected publicly traded companies derived from
their closing prices per share on May 3, 2010 and corresponding revenue, EBITDA
and earnings, on the other hand.
|
Selected
Public Companies
|
|
|
SENO (1)
|
High
|
Mean
|
Median
|
Low
|
|
Enterprise
value (EV) to 2009 revenue
|
3.6x
|
4.7x
|
3.5x
|
3.9x
|
2.0x
|
|
EV
to projected 2010 revenue (2)
|
2.7x
|
3.8x
|
3.0x
|
3.4x
|
1.6x
|
|
EV
to 2009 EBITDA (3)
|
33.9x
|
19.1x
|
16.0x
|
14.7x
|
14.0x
|
|
EV
to projected 2010 EBITDA (2)(3)(4)
|
19.6x
|
12.2x
|
11.6x
|
11.6x
|
11.0x
|
|
Price
as a multiple of 2009 earnings per share (5)
|
90.7x
|
56.0x
|
40.4x
|
32.7x
|
32.6x
|
|
Price
as a multiple of projected 2010 earnings per share (2)(5)
|
46.5x
|
32.4x
|
27.2x
|
30.3x
|
18.8x
|
___________________
|
1.
|
Based
on the merger consideration.
|
|
2.
|
Projected
calendar year 2010 revenue, EBITDA and earnings for SenoRx were based on
the estimates of SenoRx’s management. Projected calendar year 2010
revenue, EBITDA and earnings for the selected public companies were based
on Wall Street consensus estimates or Wall Street
research.
|
|
3.
|
Piper
Jaffray determined that ratios were not meaningful, and therefore omitted
them, if they were negative or if they were greater than 40.0x.
Accordingly, the results of four selected public companies were
omitted.
|
|
4.
|
Piper
Jaffray determined that transactions were not applicable where there was
insufficient information available to Piper Jaffray to calculate the
ratio. Accordingly, the results of one selected public company were
omitted.
|
|
5.
|
Piper
Jaffray determined that ratios were not meaningful, and were therefore
omitted, if they were negative or if they were greater than 80.0x.
Accordingly, the results of four selected public companies were
omitted.
|
The
selected public companies analysis showed that, based on the estimates and
assumptions used in the analysis, the implied valuation multiples of SenoRx
based on the merger consideration were within or above the range of valuation
multiples of the selected public companies when comparing (i) the ratio of
enterprise value to 2009 revenue and projected 2010 revenue, (ii) the ratio of
enterprise value to 2009 EBITDA and projected 2010 EBITDA, and (iii) the
price-to-earnings ratio based on 2009 earnings and the price-to-earnings ratio
based on projected 2010 earnings.
No
company utilized in the selected publicly traded companies analysis is identical
to SenoRx. In evaluating the selected publicly traded companies, Piper Jaffray
made judgments and assumptions with regard to industry performance, general
business, economic, market and financial conditions and other
matters.
Selected
M&A Transaction Analysis
. Piper Jaffray reviewed merger
and acquisition transactions involving target companies classified as medical
technology companies and which Piper Jaffray believed were comparable to
SenoRx’s financial profile. Piper Jaffray selected these transactions based on
information obtained by searching SEC filings, public company disclosures, press
releases, industry and popular press reports, databases and other sources and by
applying the following criteria:
|
·
|
transactions
that were announced after January 1,
2005;
|
|
·
|
targets
with LTM or FTM revenue between $50 million and $200
million;
|
|
·
|
targets
with FTM revenue growth of greater than 10%;
and
|
|
·
|
targets
with enterprise values between $100 million and $500
million.
|
Based on
these criteria, the following transactions had target companies that were
medical device companies that were deemed comparable to SenoRx:
|
Target
|
Acquiror
|
|
Medegen,
Inc.
|
CareFusion
Corporation
|
|
Home
Diagnostics, Inc.
|
Nipro
Corporation
|
|
Invatec
S.p.a.
|
Medtronic,
Inc.
|
|
Advanced
Bionics Corporation
|
Sonova
Holding AG
|
|
Aspect
Medical Systems, Inc.
|
Covidien
PLC
|
|
VNUS
Medical Technologies, Inc.
|
Covidien
PLC
|
|
Radi
Medical Systems
|
St.
Jude Medical, Inc.
|
|
Possis
Medical, Inc.
|
MEDRAD,
Inc. (Bayer AG)
|
|
Lifecore
Biomedical, Inc.
|
Warburg
Pincus Private Equity IX, L.P.
|
|
Microtek
Medical Holdings
|
Ecolab
Inc.
|
|
Adeza
Biomedical Corporation
|
Cytyc
Corporation
|
|
RITA
Medical Systems, Inc.
|
AngioDynamics,
Inc.
|
|
Blackstone
Medical, Inc.
|
Orthofix
International N.V.
|
|
FEI
Women’s Health
|
Duramed
Pharmaceuticals, Inc.
|
|
Royce
Medical Holdings, Inc.
|
Ossur
hf
|
Piper
Jaffray calculated the ratio of enterprise value to historical revenue for the
LTM preceding each transaction and the ratio of enterprise value to projected
revenue for the FTM following each transaction. Piper Jaffray also calculated
the ratio of enterprise value to historical EBITDA for the LTM preceding each
transaction and the ratio of enterprise value to projected EBITDA for the FTM
following each transaction. Piper Jaffray then compared the results of these
calculations with similar calculations for SenoRx based on the merger
consideration. The analysis indicated the following multiples:
|
Selected
M&A Transactions
|
|
|
SENO(1)
|
High
|
Mean
|
Median
|
Low
|
|
Enterprise
value (EV) to LTM revenue (2)
|
3.5x
|
7.1x
|
3.7x
|
3.8x
|
1.6x
|
|
EV
to FTM revenue (3)
|
2.4x
|
5.7x
|
3.1x
|
2.9x
|
1.3x
|
|
EV
to LTM EBITDA (2)(4)(5)
|
34.5x
|
25.0x
|
15.7x
|
13.8x
|
12.1x
|
|
EV
to FTM EBITDA (3)(4)(5)
|
14.1x
|
23.8x
|
13.6x
|
11.9x
|
8.7x
|
____________________
|
1.
|
Based
on the merger consideration.
|
|
2.
|
Revenues
and EBITDA for the LTM for SenoRx were for the twelve months ended March
31, 2010.
|
|
3.
|
Projected
revenue and EBITDA for SenoRx with respect to the FTM were for the twelve
months beginning March 31, 2010 and were based on estimates of SenoRx’s
management.
|
|
4.
|
Piper
Jaffray determined that ratios were not meaningful, and therefore omitted
them, if they were negative or greater than 40.0x. Accordingly, the
results of four selected transactions were omitted for LTM and three
selected transactions were omitted for
FTM.
|
|
5.
|
Piper
Jaffray determined that transactions were not applicable where there was
insufficient information available to Piper Jaffray to calculate the
ratio. Accordingly, the results of four selected transactions were omitted
for LTM and five selected transactions were omitted for
FTM.
|
The
selected M&A transactions analysis showed that, based on the estimates and
assumptions used in the analysis, the implied valuation multiples of SenoRx
based on the merger consideration were within or above the range of valuation
multiples of the selected M&A transactions when comparing the ratio of
enterprise value to (i) historical revenue for the LTM, (ii) projected revenue
for the FTM, (iii) historical EBITDA for the LTM, and (iv) projected EBITDA for
the FTM.
A
selected M&A transaction analysis generates an implied value of a company
based on publicly available financial terms of selected change of control
transactions involving companies that share certain characteristics with the
company being valued. However, no company or transaction utilized in the
selected M&A transaction analysis is identical to SenoRx or the merger,
respectively.
Premiums
Paid Analysis
.
Piper Jaffray reviewed
publicly available information for selected completed or pending M&A
transactions to determine the premiums paid in the transactions over recent
trading prices of the target companies prior to announcement of the transaction.
Piper Jaffray selected these transactions from the Securities Data Corporation
database where the target was a publicly traded medical device company and
applied, among others, the following criteria:
|
·
|
merger
and acquisition transactions between a public company target and an
acquirer seeking to purchase more than 85% of
shares;
|
|
·
|
transactions
announced since January 1, 2005;
|
|
·
|
enterprise
value greater than $50 million;
|
|
·
|
for
transactions involving multiple bids, the premium was calculated using the
final bid as compared to the target’s 1-day, 1-week and 4-week stock price
at the time of the initial offer;
and
|
Piper
Jaffray performed its analysis on 56 transactions that satisfied the criteria,
and the table below shows a comparison of premiums paid in these transactions to
the premium that would be paid to SenoRx’s stockholders based on the merger
consideration.
|
Selected
Premiums Paid
|
|
|
SENO(1)
|
High
|
Mean
|
Median
|
Low
|
|
Premium
1 day prior (2)
|
12%
|
259%
|
44%
|
32%
|
4%
|
|
Premium
1 week prior (3)
|
10%
|
277%
|
47%
|
31%
|
5%
|
|
Premium
4 weeks prior (4)
|
42%
|
308%
|
55%
|
34%
|
11%
|
____________________
|
1.
|
Based
on the merger consideration.
|
|
2.
|
SenoRx
premium based on closing price per share of $9.84 on April 30,
2010.
|
|
3.
|
SenoRx
premium based on closing price per share of $10.00 on April 26,
2010.
|
|
4.
|
SenoRx
premium based on closing price per share of $7.73 on April 5,
2010.
|
This
premiums paid analysis showed that, based on the estimates and assumptions used
in the analysis, the premiums over the market prices at the selected dates for
the shares implied by the merger consideration were within the range of premiums
paid in the selected M&A transactions.
Discounted
Cash Flow Analysis
.
Using a discounted cash
flow analysis, Piper Jaffray calculated an estimated range of theoretical values
for SenoRx based on the net present value of (1) projected free cash flows from
March 31, 2010 to December 31, 2010 and projected calendar year free cash flows
from 2011 to 2014, discounted back to March 31, 2010, based on management
projections, and (2) a terminal value at calendar year end 2014 based upon
revenue exit multiples, discounted back to March 31, 2010. Piper Jaffray
calculated the range of net present values based on discount rates ranging from
20.0% to 30.0% based on a weighted average cost of capital analysis plus a size
premium, an assumed tax rate of 38% and terminal revenue multiples ranging from
2.0x to 3.0x applied to the projected calendar year 2014 revenue. This analysis
resulted in implied per share values of SenoRx’s common stock ranging from a low
of $8.65 per share to a high of $15.28 per share. Piper Jaffray observed that
the merger consideration was within the range of values derived from this
analysis.
General
The
summary set forth above does not contain a complete description of the analyses
performed by Piper Jaffray, but does summarize the material analyses performed
by Piper Jaffray in rendering its opinion. The preparation of a fairness opinion
is a complex process and is not necessarily susceptible to partial analysis or
summary description. Piper Jaffray believes that its analyses and the summary
set forth above must be considered as a whole and that selecting portions of its
analyses or of the summary, without considering the analyses as a whole or all
of the factors included in its analyses, would create an incomplete view of the
processes underlying the analyses set forth in the Piper Jaffray opinion. In
arriving at its opinion, Piper Jaffray considered the results of all of its
analyses and did not attribute any particular weight to any factor or analysis.
Instead, Piper Jaffray made its determination as to fairness on the basis of its
experience and financial judgment after considering the results of all of its
analyses. The fact that any specific analysis has been referred to in the
summary above is not meant to indicate that this analysis was given greater
weight than any other analysis. In addition, the ranges of valuations resulting
from any particular analysis described above should not be taken to be Piper
Jaffray’s view of the actual value of SenoRx.
No
company or transaction used in the above analyses as a comparison is directly
comparable to SenoRx or the merger and the other transactions contemplated by
the merger agreement. Accordingly, an analysis of the results of the comparisons
is not mathematical; rather, it involves complex considerations and judgments
about differences in the companies and transactions to which SenoRx and the
merger were compared and other factors that could affect the public trading
value or transaction value of the companies involved.
Piper
Jaffray performed its analyses solely for purposes of providing its opinion to
the SenoRx board of directors. In performing its analyses, Piper Jaffray made
numerous assumptions with respect to industry performance, general business and
economic conditions and other matters. Certain of the analyses performed by
Piper Jaffray are based upon forecasts of future results furnished to Piper
Jaffray by SenoRx’s management, which are not necessarily indicative of actual
future results and may be significantly more or less favorable than actual
future results. These forecasts are inherently subject to uncertainty because,
among other things, they are based upon numerous factors or events beyond the
control of the parties or their respective advisors. Piper Jaffray does not
assume responsibility if future results are materially different from forecasted
results.
Piper
Jaffray’s opinion was one of many factors taken into consideration by the SenoRx
board of directors in making the determination to approve the merger agreement.
While Piper Jaffray provided advice to the SenoRx board of directors during
SenoRx’s negotiations with Bard, Piper Jaffray did not recommend any specific
consideration.
Piper
Jaffray relied upon and assumed, without assuming liability or responsibility
for independent verification, the accuracy and completeness of all information
that was publicly available or was furnished, or otherwise made available, to
Piper Jaffray or discussed with or reviewed by Piper Jaffray. Piper Jaffray
further relied upon the assurances of the management of SenoRx that the
financial information provided to Piper Jaffray was prepared on a reasonable
basis in accordance with industry practice, and that SenoRx’s management was not
aware of any information or facts that would make any information provided to
Piper Jaffray incomplete or misleading. Without limiting the generality of the
foregoing, for the purpose of Piper Jaffray’s opinion, Piper Jaffray assumed
that with respect to financial forecasts, estimates and other forward-looking
information reviewed by Piper Jaffray, that such information was reasonably
prepared based on assumptions reflecting the best currently available estimates
and judgments of the management of SenoRx as to the expected future results of
operations and financial condition of SenoRx. Piper Jaffray expressed no opinion
as to any such financial forecasts, estimates or forward-looking information or
the assumptions on which they were based. Piper Jaffray relied, with SenoRx’s
consent, on advice of the outside counsel and the independent registered public
accounting firm to SenoRx, and on the assumptions of the management of SenoRx,
as to all accounting, legal, tax and financial reporting matters with respect to
SenoRx and the merger agreement.
In
arriving at its opinion, Piper Jaffray assumed that the executed merger
agreement was in all material respects identical to the last draft reviewed by
Piper Jaffray. Piper Jaffray relied upon and assumed, without independent
verification, that (i) the representations and warranties of all parties to the
merger agreement and all other related documents and instruments that are
referred to therein were true and correct, (ii) each party to such agreements
would fully and timely perform all of the covenants and agreements required to
be performed by such party, (iii) the merger would be consummated pursuant to
the terms of the merger agreement without amendments thereto and (iv) all
conditions to the consummation of the merger would be satisfied without waiver
by any party of any conditions or obligations thereunder. Additionally, Piper
Jaffray assumed that all the necessary regulatory approvals and consents
required for the merger would be obtained in a manner that would not adversely
affect SenoRx or the contemplated benefits of the merger.
In
arriving at its opinion, Piper Jaffray did not perform any appraisals or
valuations of any specific assets or liabilities (fixed, contingent or other) of
SenoRx, and was not furnished or provided with any such appraisals or
valuations, nor did Piper Jaffray evaluate the solvency of SenoRx under any
state or federal law relating to bankruptcy, insolvency or similar matters. The
analyses performed by Piper Jaffray in connection with its opinion were going
concern analyses. Piper Jaffray expressed no opinion regarding the
liquidation value of SenoRx or any other entity. Without limiting the generality
of the foregoing, Piper Jaffray undertook no independent analysis of any pending
or threatened litigation, regulatory action, possible unasserted claims or other
contingent liabilities, to which SenoRx or any of its affiliates was a party or
may be subject, and at the direction of SenoRx and with its consent, Piper
Jaffray’s opinion made no assumption concerning, and therefore did not consider,
the possible assertion of claims, outcomes or damages arising out of any such
matters. Piper Jaffray also assumed that neither SenoRx nor Bard is party to any
material pending transaction, including without limitation any financing,
recapitalization, acquisition or merger, divestiture or spin-off, other than the
merger.
Piper
Jaffray’s opinion was necessarily based upon the information available to it and
facts and circumstances as they existed and were subject to evaluation on the
date of its opinion. Events occurring after the date of its opinion could
materially affect the assumptions used in preparing its opinion. Piper Jaffray
did not express any opinion as to the price at which shares of SenoRx common
stock may trade following announcement of the merger or at any future time.
Piper Jaffray did not undertake to reaffirm or revise its opinion or otherwise
comment upon any events occurring after the date of its opinion and does not
have any obligation to update, revise or reaffirm its opinion.
Piper
Jaffray’s opinion addressed solely the fairness, from a financial point of view,
to holders of SenoRx common stock of the merger consideration to be paid to such
holders in the merger, as set forth in the merger agreement, and did not address
any other terms or agreement relating to the merger or any other terms of the
merger agreement. Piper Jaffray was not requested to opine as to, and its
opinion does not address, the basic business decision to proceed with or effect
the merger, the merits of the merger relative to any alternative transaction or
business strategy that may be available to SenoRx, Bard’s ability to fund the
aggregate merger consideration payable pursuant to the merger agreement or any
other terms contemplated by the merger agreement or the fairness of the merger
to any other class of securities, creditor or other constituency of SenoRx.
Furthermore, Piper Jaffray expressed no opinion with respect to the amount or
nature of the compensation to any of officer, director or employee, or any class
of such persons, relative to the compensation to be received by holders of
SenoRx common stock in the merger or with respect to the fairness of any such
compensation. Except with respect to the use of its opinion in connection with
this proxy statement in accordance with Piper Jaffray’s engagement letter with
SenoRx, Piper Jaffray’s opinion may not be disclosed, referred to, published or
otherwise used (in whole or in part), nor may any public references to Piper
Jaffray be made, without the prior written approval of Piper
Jaffray.
Piper
Jaffray is a nationally recognized investment banking firm and is regularly
engaged as a financial advisor in connection with mergers and acquisitions,
underwritings and secondary distributions of securities and private placements.
SenoRx’s board selected Piper Jaffray to render its fairness opinion in
connection with the transactions contemplated by the merger agreement on the
basis of its experience and reputation in acting as a financial advisor in
connection with mergers and acquisitions.
Piper
Jaffray acted as SenoRx’s financial advisor in connection with the merger and
will receive an estimated fee of approximately $2,200,000 from SenoRx, all of
which, except for the amount discussed in the following sentence, is contingent
upon the consummation of the merger. Piper Jaffray also received a fee of
$750,000 for providing its opinion, which will be credited against the fee for
financial advisory services described in the preceding sentence. The opinion fee
was not contingent upon the consummation of the merger or the conclusions
reached in Piper Jaffray’s opinion. SenoRx has also agreed to indemnify Piper
Jaffray against certain liabilities and reimburse Piper Jaffray for certain
expenses in connection with its services. In the ordinary course of its
business, Piper Jaffray and its affiliates may actively trade securities of
SenoRx and Bard for its own account or the account of its customers and,
accordingly, may at any time hold a long or short position in such securities.
Piper Jaffray may also, in the future, provide investment banking and financial
advisory services to SenoRx, Bard or entities that are affiliated with SenoRx or
Bard, for which Piper Jaffray would expect to receive compensation.
Consistent
with applicable legal and regulatory requirements, Piper Jaffray has adopted
policies and procedures to establish and maintain the independence of Piper
Jaffray’s research department and personnel. As a result, Piper Jaffray’s
research analysts may hold opinions, make statements or investment
recommendations and/or publish research reports with respect to the merger and
other participants in the merger that differ from the opinions of Piper
Jaffray’s investment banking personnel.
Interests
of SenoRx’s Directors and Executive Officers in the Merger
In
considering the recommendation of the SenoRx board of directors that you vote to
adopt the merger agreement, you should be aware that SenoRx’s executive officers
and directors have economic interests in the merger that are different from, or
in addition to, those of SenoRx’s stockholders generally. The SenoRx
board of directors was aware of and considered these interests, among other
matters, in reaching its decisions to adopt and approve, and declare advisable,
the merger agreement, the merger and the transactions contemplated by the merger
agreement.
Change in Control
Agreements
. Each of John T. Buhler, Kevin J. Cousins, Paul
Lubock and William F. Gearhart have entered into change in control agreements
with SenoRx that provide for the payment of specified compensation and benefits
upon certain terminations of their employment within a specified period
following the merger. Under the merger agreement, Bard is required to
honor these change of control agreements in accordance with their terms as is in
effect immediately prior to the effective time of the merger; provided that Bard
is not prohibited from amending or terminating, or from causing SenoRx to amend
or terminate, any such change in control agreement in accordance with its terms
or if otherwise required by applicable law (with the consent of the employee
covered by any such change in control agreement if required).
Acceleration of
Vesting Upon a Change in Control
.
Pursuant to the terms
and conditions of the merger agreement, each and every outstanding and unvested
equity awards held by any person, including specifically, John T. Buhler,
Kevin J. Cousins, Paul Lubock and William F. Gearhart, will become
fully vested and exercisable as of the immediately before the effective time of
the merger and thereafter cancelled and converted into the right to receive the
merger consideration upon the consummation of the merger (as discussed below on
page 58). However, absent this term of the merger agreement, the
change in control agreements entered into with these executives would have
provided for the following treatment:
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For Mr. Lubock
only
: Upon a change in control, 100% of Mr. Lubock’s
then outstanding and unvested equity awards will fully vest and will
otherwise remain subject to the terms and conditions of the applicable
equity award agreement.
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·
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For
Messrs. Buhler, Cousins and Gearhart only
: Upon a
change in control, 50% of the executive officer’s then outstanding and
unvested equity awards will fully vest and will otherwise remain subject
to the terms and conditions of the applicable equity award
agreement.
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Severance
Benefits
. If within twelve months following a change in
control, an executive officer terminates his employment for good reason (as such
term is defined in the change in control agreement) or is terminated without
cause (as such term is defined in the change in control agreement), the
executive officer will receive the following severance benefits:
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Continuing
payments of severance pay (less applicable withholding taxes) for a period
of twelve months (eighteen months in the case of Mr. Lubock) from the
date of termination at a rate equal to the executive officer’s base salary
rate as in effect immediately before the change in control or the
executive’s termination date, whichever is
greater.
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·
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A
lump sum cash payment (less applicable tax withholding taxes) in an amount
equal to the current year’s target annual incentive, pro-rated to the date
of termination.
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·
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100%
of the executive officer’s then outstanding and unvested equity awards
will fully vest and will otherwise remain subject to the terms and
conditions of the applicable equity award
agreement.
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·
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If
the executive officer elects continuation coverage pursuant to COBRA, and
provided that the executive officer constitutes a qualified beneficiary
under the Internal Revenue Code of 1986, as amended, SenoRx will reimburse
the executive officer for the same level of health coverage and benefits
as in effect for the executive officer on the day immediately preceding
the date of termination for the duration of the severance
period.
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Conditions to
Receipt of Severance
. The receipt of any severance benefits
discussed above will be subject to the following conditions: (i) the
executive officer signing and not revoking a release of claims in favor of
SenoRx; (ii) the executive officer not soliciting any SenoRx employees for
employment during the severance period; (iii) the executive officer’s continued
compliance with the terms of any applicable confidential information agreement
with SenoRx; and (iv) the executive officer agreeing not to disparage SenoRx
during the severance period.
Excise
Tax
.
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For
Messrs. Lubock and Buhler only
: In the event that
the severance payments and other benefits payable to the executive officer
constitute “parachute payments” under Section 280G of the U.S. tax
code and would be subject to the applicable excise tax, then the executive
officer will receive: (i) a payment from SenoRx sufficient to pay
such excise tax, and (ii) an additional payment from SenoRx
sufficient to pay the federal and state income and employment taxes and
additional excise taxes arising from the payments made to the executive
officer by us; provided, however, that in no event will the foregoing
payments exceed $300,000 in the
aggregate.
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For
Messrs. Cousins and Gearhart only
: In the event
that the severance payments and other benefits payable to the executive
officer constitute “parachute payments” under Section 280G of the U.S. tax
code and would be subject to the applicable excise tax, then the executive
officer’s severance benefits will be either: (i) delivered in full or
(ii) reduced by the minimum amount necessary which would result in no
portion of such benefits being subject to the excise tax, whichever
results in the receipt by the executive officer on an after-tax basis of
the greatest amount of benefits.
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Assuming
that the merger was completed and the executive officers were terminated on May
31, 2010, and that the executive officers were entitled to full benefits
available under their respective change in control agreements, the executive
officers would receive approximately the amounts set forth in the table
below. Please note that the amounts indicated below are estimates
based on multiple assumptions that may or may not actually occur, including
assumptions described in this proxy statement. As a result, the
actual amounts, if any, to be received by an executive officer may differ in
material respects from the amounts set forth below.
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John T.
Buhler
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$
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332,815
|
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$
|
68,843
|
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$
|
1,388,310
|
|
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$
|
18,333
|
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$
|
0
|
|
|
$
|
1,808,301
|
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Kevin J.
Cousins
|
|
$
|
249,712
|
|
|
$
|
41,322
|
|
|
$
|
737,601
|
|
|
$
|
21,168
|
|
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N/A
|
|
|
$
|
1,049,803
|
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Paul
Lubock
|
|
$
|
391,802
|
|
|
$
|
43,224
|
|
|
$
|
789,035
|
|
|
$
|
19,137
|
|
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$
|
0
|
|
|
$
|
1,243,198
|
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William F.
Gearhart
|
|
$
|
252,847
|
|
|
$
|
41,841
|
|
|
$
|
441,093
|
|
|
$
|
14,733
|
|
|
|
N/A
|
|
|
$
|
750,514
|
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_____________________
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1.
|
Consists
of the executive officer’s current year target annual incentive pro-rated
to the date of termination (assumed to be May 31,
2010).
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2.
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Consists
of the executive officer’s in-the-money value of unvested stock options,
restricted stock and restricted stock units, in each case as determined on
May 31, 2010, and based on per share merger consideration of
$11.00. The value of an accelerated stock option is calculated
by multiplying the number of unvested shares subject to vesting
acceleration by the amount by which the per share merger consideration
exceeds the applicable exercise price per share for such option; the value
of accelerated restricted stock is calculated by multiplying the number of
unvested shares subject to vesting acceleration by the per share merger
consideration; and the value of accelerated restricted stock units is
calculated by multiplying the number of unvested restricted stock units
subject to vesting acceleration by the per share merger
consideration.
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3.
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The
value for each executive officer represents the aggregate amount that
SenoRx will reimburse each executive officer for the same level of health
coverage and benefits as in effect for the executive officer on the day
immediately preceding the date of termination (assumed to be May 31,
2010).
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4.
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SenoRx
does not anticipate that it will have to provide Messrs. Buhler or Lubock
with a tax gross-up payment.
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Director
Awards
. Outstanding equity awards held by our directors will
become fully vested and thereafter cancelled and converted into the right to
receive the merger consideration as of the effective time of the merger in
accordance with the provisions of the merger agreement. However,
absent this term of the merger agreement, the outstanding restricted stock unit
awards denominated in shares of SenoRx common stock held by directors would
become fully vested in accordance with their terms when the holders cease to be
members of the SenoRx board of directors as of the effective time of the merger
as required by the terms of the merger agreement. At the effective
time of the merger, each outstanding stock option, share of restricted stock and
restricted stock unit held by our directors will be treated as described below
in “The Merger Agreement – Treatment of Stock Options, Restricted Stock and
Other Equity Awards.”
Insurance and
Indemnification of SenoRx’s Directors and Officers
. Under the
merger agreement, the surviving corporation will (and Bard will cause the
surviving corporation to) cause the certificate of incorporation and the bylaws
of the surviving corporation to contain provisions with respect to
indemnification, advancement of expenses and director exculpation substantially
similar to those set forth in SenoRx’s certificate of incorporation and bylaws
as in effect at the date of the merger agreement (to the extent consistent with
applicable law), which provisions may not be amended, repealed or otherwise
modified in any manner that would adversely affect the rights thereunder of the
persons who at any time before the effective time of the merger were entitled to
indemnification, advancement of expenses or exculpation under SenoRx’s
certificate of incorporation or bylaws in respect of actions or omissions
occurring at or before the effective time of the merger (including the merger
and any other transactions contemplated by the merger agreement), unless
otherwise required by applicable law. In addition, the surviving
corporation will (and Bard will cause the surviving corporation to) honor and
fulfill in all respects the obligations of SenoRx under certain indemnification
agreements.
From and
after the effective time of the merger and until the expiration of any
applicable statutes of limitation, to the fullest extent permitted by applicable
law (subject to certain conditions), the surviving corporation will (and Bard
will cause the surviving corporation to) indemnify, defend and hold harmless
each person who is or has been before the date of the merger agreement or who
becomes before the effective time of the merger an officer, director, employee
or agent of SenoRx against all losses, claims, damages, judgments, fines, fees
and expenses (including reasonable attorneys’ fees and investigation expenses),
liabilities or amounts that are paid in settlement of, or otherwise incurred
(but only to the extent such losses are not otherwise covered by insurance and
paid), in connection with any claim, whether civil, criminal, administrative or
investigative, to which any such indemnified party is or may become a party to
by virtue of his or her service as a present or former director, officer,
employee or agent of SenoRx and arising out of actual or alleged events, actions
or omissions occurring or alleged to have occurred at or before the effective
time of the merger (including the merger and any other transactions contemplated
by the merger agreement), in each case, to the fullest extent permitted under
the DGCL and provided in SenoRx’s certificate of incorporation and bylaws as in
effect at the date of the merger agreement (and will pay expenses in advance of
the final disposition of the claim(s) that are reasonably incurred in defending
any such claim to each such indemnified party to the fullest extent permitted
under the DGCL as provided in SenoRx’s certificate of incorporation and bylaws
as in effect at the date of the merger agreement, upon receipt from such
indemnified party to whom expenses are advanced of the undertaking to repay such
advances contemplated by the DGCL).
Effective
upon the effective time of the merger, Bard will cause to be purchased and
maintained a six year “tail” prepaid liability insurance policy in respect of
acts or omissions occurring at or before the effective time of the Merger,
covering each person currently covered by SenoRx’s directors’ and officers’
liability insurance policy on terms, including with respect to coverage and
amount, no less favorable to such directors and officers than those of such
policy in effect on the date of the merger agreement, provided that in no event
will Bard or the surviving corporation be required to expend for such policies
pursuant to this sentence an annual premium amount in excess of 200% of the
annual premiums currently paid by SenoRx for such insurance. If the annual
premiums of such insurance coverage exceed such amount, the surviving
corporation will obtain a policy with the greatest coverage available for a cost
not exceeding such amount.
Material
U.S. Federal Income Tax Consequences of the Merger
The
following discussion is a summary of the material U.S. federal income tax
consequences of the merger to “U.S. holders” (as defined below) of SenoRx common
stock whose shares are exchanged for cash in the merger. This summary
is based on the provisions of the Internal Revenue Code of 1986, as amended,
which we refer to as the Code, U.S. Treasury regulations promulgated thereunder,
judicial authorities and administrative rulings, all as in effect as of the date
of the proxy statement and all of which are subject to change, possibly with
retroactive effect. Any such change could affect the accuracy of the
statements and conclusions set forth in this proxy statement.
For
purposes of this discussion, the term “U.S. holder” means a beneficial owner of
shares of SenoRx common stock that is, for U.S. federal income tax
purposes:
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an
individual who is a citizen or resident of the United
States;
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·
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a
corporation (including any entity treated as a corporation for U.S.
federal income tax purposes) created or organized under the laws of the
United States, any state thereof, or the District of
Columbia;
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a
trust if (i) a U.S. court is able to exercise primary supervision
over the trust’s administration and one or more U.S. persons are
authorized to control all substantial decisions of the trust or
(ii) it has a valid election in effect under applicable U.S. Treasury
regulations to be treated as a U.S. person;
or
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an
estate, the income of which is subject to U.S. federal income tax
regardless of its source.
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If a
partnership (or other entity treated as a partnership for U.S. federal income
tax purposes) holds shares of SenoRx common stock, the tax treatment of a
partner in such entity will generally depend on the status of the partner and
the activities of the partnership. If you are a partner of a
partnership holding shares of SenoRx common stock, you should consult your tax
advisor.
This
discussion assumes that a U.S. holder holds SenoRx common stock as a capital
asset within the meaning of Section 1221 of the Code (generally, property
held for investment). The following discussion does not address all
aspects of U.S. federal income tax that might be relevant to U.S. holders in
light of their particular circumstances, or U.S. holders that may be subject to
special rules (including, for example, dealers in securities or currencies,
traders in securities that are required to use or elect mark-to-market
treatment, financial institutions, insurance companies, mutual funds, personal
holding companies, real estate investment trusts, regulated investment
companies, tax-exempt organizations, retirement plans, individual retirement
accounts or other tax-deferred accounts, holders liable for the alternative
minimum tax, partnerships or other flow-through entities and their partners or
members, certain former U.S. citizens or residents, holders whose functional
currency is not the U.S. dollar, holders who hold SenoRx common stock as part of
a hedge, straddle, constructive sale or conversion transaction or other
integrated investment, holders who acquired SenoRx common stock pursuant to the
exercise of employee stock options or otherwise as compensation, or holders who
exercise statutory appraisal rights). In addition, the discussion
does not address any aspect of non-U.S., state, local, estate, gift or other tax
law that may be applicable to a U.S. holder or the tax consequences of any
transactions effected before, after or at the same time as the merger (whether
or not in connection with the merger), including any exercise or disposition of
any stock option, warrant or other right to acquire SenoRx common
stock.
Holders should consult their tax
advisors to determine the particular tax consequences to them (including the
application and effect of any state, local or non-U.S. income and other tax
laws) of the receipt of cash in exchange for SenoRx common stock pursuant to the
merger
.
The
receipt of cash in exchange for shares of SenoRx common stock in the merger will
be a taxable transaction for U.S. federal income tax purposes. In
general, a U.S. holder who receives cash in exchange for shares of SenoRx common
stock pursuant to the merger will recognize capital gain or loss for U.S.
federal income tax purposes in an amount equal to the difference, if any,
between (1) the amount of cash received and (2) the holder’s adjusted tax basis
in such shares. Such gain or loss will be long-term capital gain or
loss if the holder’s holding period for such shares exceeds one year as of the
date of the merger. Long-term capital gains of non-corporate U.S.
holders, including individuals, are generally eligible for reduced rates of
federal income taxation under current law. The deductibility of
capital losses is subject to limitations. If a U.S. holder acquired
different blocks of SenoRx common stock at different times or different prices,
such U.S. holder must determine its tax basis and holding period separately with
respect to each block of SenoRx common stock.
Holders who own separate blocks of
SenoRx common stock should consult their own tax advisors with respect to these
rules
.
Payments
of cash made to a U.S. holder may, under certain circumstances, be subject to
information reporting and backup withholding at the applicable rate (currently
28 percent), unless such holder properly establishes an exemption or provides a
correct taxpayer identification number on Internal Revenue Service Form W-9
(or other appropriate withholding form) and otherwise complies with the backup
withholding rules. Backup withholding is not an additional
tax. Any amounts withheld under the backup withholding rules may be
refunded or credited against a holder’s U.S. federal income tax liability,
provided the required information is timely furnished to the Internal Revenue
Service.
Regulatory
Approvals
Under the
provisions of the HSR Act, the merger may not be completed until (1) the
expiration or termination of a 30-day waiting period following the filing of
notification and report forms with the Antitrust Division of the United States
Department of Justice, or the Antitrust Division, and the Federal Trade
Commission, or the FTC, by SenoRx and Bard, or (2) if, during the initial 30-day
waiting period following the filing of notification and report forms, the
Antitrust Division and FTC issue a request for additional information and
documentary material (which we refer to as a second request), the expiration or
termination of a 30-day waiting period following the certification of
substantial compliance of the second request by the parties. SenoRx and Bard
will file their respective notification and report forms with the Antitrust
Division and the FTC under the HSR Act.
The
parties do not believe any other merger control filings or approvals are
necessary in connection with the consummation of the merger. However, the
parties are currently in the process of reviewing where merger control filings
or approvals may be necessary or desirable in other foreign
jurisdictions.
The
Antitrust Division and the FTC scrutinize the legality under the antitrust laws
of transactions such as the merger. At any time before or after the merger, the
Antitrust Division, the FTC, a state attorney general, or a foreign competition
authority could take action under the antitrust laws as it deems necessary or
desirable in the public interest, including seeking to enjoin the merger or
seeking divestiture of substantial businesses or assets of SenoRx or Bard or
their subsidiaries. Private parties may also bring legal actions under antitrust
laws under certain circumstances.
While we
believe that we will receive the requisite approvals and clearances for the
merger, there can be no assurance that a challenge to the merger on antitrust
grounds will not be made, or, if a challenge is made, of the result of such
challenge. Similarly, there can be no assurance that SenoRx and Bard will obtain
the regulatory approvals necessary to consummate the merger or that the granting
of these approvals will not involve the imposition of conditions to the
consummation of the merger or require changes to the terms of the merger. These
conditions or changes could result in the conditions to the merger not being
satisfied prior to the expiration date (which is described in the section of
this proxy statement entitled “The Merger Agreement—Termination of the Merger
Agreement”) or at all. Under the terms of the merger agreement, except for any
divestiture that is not material to SenoRx’s business, Bard is not obligated to
consent to any sale, divestiture, license or other disposition or holding
separate of any assets of SenoRx or Bard, or to any limitation or regulation on
Bard’s ability to conduct its business or own such assets, or to the holding
separate of shares of SenoRx common stock or any limitation or regulation on the
ability of Bard to exercise full rights of ownership thereof.
Voting
and Support Agreement
In
connection with the transactions contemplated by the merger agreement, certain
executive officers and stockholders of SenoRx, who collectively, as of the
record date, beneficially owned approximately [___]% of the total outstanding
shares of SenoRx common stock, have entered into a voting and support agreement
with Bard to, among other things, vote all shares of SenoRx common stock held by
them in favor of the adoption of the merger agreement. The executive
officers and stockholders who entered into the voting and support agreement with
Bard did not receive additional consideration for doing so (other than any
consideration they are otherwise entitled to receive under the merger agreement
in respect of their shares of SenoRx common stock). The following description of
the voting and support agreement describes the material terms of the voting and
support agreement. This description of the voting and support
agreement is qualified in its entirety by reference to the voting and support
agreement which is attached to this proxy statement as Annex B and is
incorporated herein by reference. We encourage you to read the voting
and support agreement in its entirety. The shares of SenoRx common
stock covered by the voting and support agreement are referred to as “subject
SenoRx shares.”
The
voting and support agreement provides that the stockholders subject to the
voting agreement will vote their subject SenoRx shares:
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·
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in
favor of (i) the adoption of the merger agreement and (ii) any proposal to
adjourn any meeting of the stockholders of SenoRx that Bard
supports;
|
|
·
|
against
(i) any merger agreement or merger (other than the merger agreement and
the merger with Bard), share exchange, consolidation, combination, dual
listed structure, sale of substantial assets issuance of securities,
reorganization, recapitalization, dissolution, liquidation, winding up or
other extraordinary transaction of or by SenoRx, (ii) any acquisition
proposal or superior proposal and (iii) any amendment of the SenoRx
certificate of incorporation or by-laws or other proposal or transaction
involving SenoRx or any subsidiary of SenoRx, which would in any manner
impede, frustrate, prevent or nullify any provision of the merger
agreement or any other agreement contemplated by the merger agreement, the
merger or any other transaction contemplated by the merger agreement or
change in any manner the voting rights of any class of capital stock of
SenoRx.
|
The
executive officers and stockholders subject to the voting and support agreement
have agreed, among other limitations, not to sell, transfer, pledge, assign or
otherwise dispose of (including by gift) any of their subject SenoRx shares to
any person. In addition, such executive officers and stockholders have waived,
and agreed not to exercise or assert, any appraisal rights under Section 262 of
the DGCL in connection with the merger.
The
voting and support agreement will terminate on the earliest to occur of (i)
written notice of termination by Bard to the subject stockholders, (ii) the
effective time of the merger and (iii) the termination of the merger agreement
in accordance with its terms.
Litigation
Related to the Merger
As of the
date of this proxy statement, no litigation related to the merger has been
commenced.
THE
MERGER AGREEMENT
The summary of the material
provisions of the merger agreement below and elsewhere in this proxy statement
is qualified in its entirety by reference to the merger agreement, a copy of
which is attached to this proxy statement as Annex A and which we
incorporate by reference into this document. This summary does not
purport to be complete and may not contain all of the information about the
merger agreement that is important to you. We encourage you to read
carefully the merger agreement in its entirety
.
The
Merger
The
merger agreement provides that, subject to the terms and conditions of the
merger agreement and in accordance with the relevant provisions of the DGCL, at
the effective time of the merger, Merger Sub will be merged with and into
SenoRx, the separate corporate existence of Merger Sub will thereupon cease and
SenoRx will continue as the surviving corporation in the merger and an indirect
wholly owned subsidiary of Bard.
The
merger will become effective upon the filing of the certificate of merger with
the Secretary of State of the State of Delaware or at such later time as the
parties agree and is specified in the certificate of merger. The
parties currently expect the merger to be completed in the third quarter of
2010. However, the parties cannot predict the exact timing of the
completion of the merger or whether the merger will be completed at a later time
as agreed by the parties or at all.
The
Merger Consideration and the Conversion of Capital Stock
Upon the
terms and subject to the conditions set forth in the merger agreement, at the
effective time of the merger, by virtue of the merger and without any action on
the part of any holder of shares of SenoRx common stock, Bard, Merger Sub or
SenoRx, the following will occur:
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·
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each
share of SenoRx common stock that is issued and outstanding immediately
before the effective time of the merger (other than shares held by a
holder that has not voted in favor of the merger and has properly demanded
appraisal for his or her shares in accordance with the DGCL or as provided
in the bullet point immediately below) will be automatically converted
into and represent the right to receive $11.00 in cash, without interest
or dividends thereon, less any applicable withholding of taxes;
and
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·
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each
share of SenoRx capital stock owned by SenoRx as treasury stock or
otherwise owned by Merger Sub or Bard will automatically be cancelled and
no cash or other consideration will be delivered or deliverable in
exchange for such shares.
|
Each
share of common stock of Merger Sub that is outstanding immediately before the
effective time of the merger will be converted into one validly issued, fully
paid and nonassessable share of common stock of the surviving
corporation.
Payment
Procedures
Promptly
following the effective time of the merger, but in no event more than one
business day after the effective time of the merger, Bard will deposit with
Wells Fargo Bank, National Association, the paying agent, an amount of cash
equal to the aggregate consideration to which the holders of SenoRx common stock
outstanding before the effective time of the merger become entitled under the
merger agreement.
In
addition, as promptly as reasonably practicable after the effective time of the
merger, the surviving corporation will instruct the paying agent to mail to each
person who was, immediately prior to the effective time of the merger, a holder
of record of shares of SenoRx common stock, a letter of transmittal and
instructions for use in effecting the surrender of certificated shares for
cancellation or the transfer of uncertificated shares and receiving the merger
consideration. Until so surrendered or transferred, each such
certificate or uncertificated share will represent, for all purposes, only the
right to receive the merger consideration.
Treatment
of Stock Options, Restricted Stock and Other Equity Awards
Stock
Options
. As of the effective time of the merger, each stock
option to purchase shares of SenoRx common stock that is outstanding and
unexercised immediately prior to the effective time of the merger, to the extent
unvested, will become fully vested and exercisable and will be
cancelled. In consideration of such cancellation, each holder of an
option that has an exercise price that is less than $11.00 per share will be
entitled to receive a cash payment (less any applicable tax withholdings) equal
to the product of (x) the outstanding number of shares of SenoRx common stock
subject to such option,
multiplied by
(y) the excess
of $11.00 over the per share exercise price of such cancelled stock
option. Any stock option to purchase shares of SenoRx common stock
that has a per share exercise price that is equal to or greater than $11.00 will
be automatically cancelled without any cash payment to the holder of such
option.
Restricted
Stock
. As of the effective time of the merger, each
then-outstanding share of restricted stock will be converted into the right to
receive a cash payment equal to the product of (x) the number of shares of
then-outstanding restricted stock,
multiplied by
(y) $11.00, and
when so converted will be automatically cancelled. Such cash payment
will be paid as promptly as practicable following the effective time of the
merger, less any applicable withholding taxes.
Restricted Stock
Units
. As of the effective time of the merger, each
then-outstanding restricted stock unit will be converted into the right to
receive a cash payment equal to the product of (x) the number of shares subject
to the outstanding restricted stock units which each holder thereof would have
been entitled to receive had such restricted stock unit vested in full and
settled immediately prior to the effective time of the merger,
multiplied by
(y) $11.00, and
when so converted will be automatically cancelled. Such cash payment
will be paid as promptly as practicable following the effective time of the
merger, less any applicable withholding taxes.
Warrants
.
As of the effective time of the merger, each warrant to purchase shares of
SenoRx common stock that is outstanding and unexercised immediately before the
effective time of the merger will become fully vested and exercisable and will
be cancelled. In consideration of such cancellation, each holder of a
warrant that has a per share exercise price that is less than $11.00 per share
will be entitled to receive a cash payment (less any applicable tax
withholdings) equal to the product of (x) the outstanding number of shares of
SenoRx common stock subject to such warrant,
multiplied by
(y) the excess
of $11.00 over the per share exercise price of such cancelled
warrant. Any warrant to purchase shares of SenoRx common stock that
has a per share exercise price that is equal to or greater than $11.00 will be
automatically cancelled without any cash payment to the holder of such
warrant.
Employee Stock
Purchase Plan
. SenoRx suspended all participation, including
payroll deductions, in the ESPP as of May 15, 2010. Each outstanding
option under the ESPP was exercised on May 14, 2010 for the purchase of shares
of SenoRx common stock in accordance with the terms of the ESPP, and SenoRx
refunded to each participant in the ESPP all amounts remaining in such
participant’s account after such purchase. Effective as of the
effective time of the merger, and contingent upon the closing of the merger,
SenoRx will terminate the ESPP.
Stockholders
Meeting
Pursuant
to the terms of the merger agreement, SenoRx has agreed to hold a special
meeting of its stockholders (which we refer to as the stockholders meeting) as
promptly as reasonably practicable following the clearance by the SEC of this
proxy statement for the purpose of considering and voting upon the approval and
adoption of the merger agreement and such other matters as may be necessary to
effectuate the merger and related transactions.
Unless
the merger agreement is terminated, as described below under “The Merger
Agreement—Termination of the Merger Agreement,” SenoRx has agreed to submit the
merger agreement to a vote of SenoRx’s stockholders. As promptly as
reasonably practicable following the date of the merger agreement, and in
connection with the stockholders meeting, SenoRx has agreed to use commercially
reasonable efforts to obtain the necessary approvals by its stockholders of the
merger agreement and the merger and otherwise use its commercially reasonable
efforts to comply with all legal requirements applicable to the stockholders
meeting.
If at any
time prior to the effective time of the merger any information is discovered by
any party which should be set forth in a supplement or amendment to this proxy
statement in order to ensure that this proxy statement would not include any
misstatement of a material fact or omit to state any material fact required to
be stated herein or necessary to make the statements made herein, in light of
the circumstances under which they were made, not misleading, the party that
discovers such information will promptly notify the other parties and, to the
extent required by applicable law, an appropriate amendment or supplement
describing such information will be promptly filed by SenoRx with the SEC and
disseminated by SenoRx to its stockholders.
SenoRx
may adjourn or postpone the stockholders meeting if, on the basis of advice of
outside counsel, it is necessary to ensure that any information requested
specifically by the SEC or that should be set forth in a supplement or amendment
to this proxy statement so that this proxy statement would not include any
misstatement of a material fact or omit to state any material fact required to
be stated herein or necessary to make the statements made herein, in the light
of the circumstances under which they were made, not misleading is provided to
SenoRx stockholders. In addition, SenoRx may adjourn or postpone the
stockholders meeting if, on the originally scheduled date of the stockholders
meeting, there are insufficient shares of SenoRx common stock represented
(either in person or by proxy) to constitute a quorum necessary to conduct the
business to be conducted at the stockholders meeting.
Representations
and Warranties
The
merger agreement contains representations and warranties made by SenoRx to Bard
and Merger Sub and representations and warranties made by Bard and Merger Sub to
SenoRx. The assertions embodied in those representations and
warranties were made solely for the purposes of the merger agreement and may be
subject to important qualifications and limitations agreed to by the parties in
connection with negotiating the terms of the merger
agreement. Moreover, these representations and warranties have been
qualified by certain disclosures that SenoRx made to Bard in connection with the
negotiation of the merger agreement, which disclosures were set forth in
confidential schedules to the merger agreement and are not made in this proxy
statement or reflected in the merger agreement. Furthermore, some of
the representations and warranties may not be accurate or complete as of any
particular date because they are subject to a contractual standard of
materiality or a material adverse effect qualification different from that
generally applicable to public disclosures to stockholders. For the
foregoing reasons, you should not rely on the representations and warranties
contained in the merger agreement as statements of factual
information. The representations and warranties in the merger
agreement and the description of them in this proxy statement should be read in
conjunction with the other information contained in the reports, statements and
filings SenoRx publicly files with the SEC. This description of the
representations and warranties is included to provide SenoRx’s stockholders with
information regarding the terms of the merger agreement.
In the
merger agreement, SenoRx has made representations and warranties to Bard and
Merger Sub with respect to, among other things:
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the
due organization, valid existence and good standing of
SenoRx;
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the
full force and effectiveness of, and SenoRx’s compliance with, SenoRx’s
charter documents;
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SenoRx’s
capitalization, including the number of outstanding shares of SenoRx
common stock and the number of shares of common stock issuable upon the
exercise or vesting, as applicable, of stock options, restricted stock
awards, restricted stock units and
warrants;
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the
power and authority of SenoRx to enter into the merger agreement and to
complete the transactions contemplated by the merger agreement and the
enforceability of the merger agreement against
SenoRx;
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SenoRx’s
ownership of capital stock or other ownership interests in other entities,
if any;
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the
existence, if any, of conflicts with, creation of liens, violations or
defaults under SenoRx’s governing documents, applicable laws, or certain
agreements as a result of entering into the merger agreement and the
consummation of the merger;
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the
consents and approvals required from governmental entities with respect to
the merger, merger agreement or the other transactions contemplated
thereby;
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its
SEC filings since March 29,
2007;
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its
financial statements and internal
controls;
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legal
compliance matters;
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the
existence, if any, of certain changes or events since December 31,
2009;
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pending
or threatened litigation;
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the
accuracy and compliance with applicable securities laws of the information
supplied by SenoRx contained in this proxy
statement;
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matters
related to SenoRx’s employee benefit
plans;
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intellectual
property matters;
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matters
with respect to the possession of necessary licenses and permits to
operate SenoRx’s business;
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matters
with respect to SenoRx’s material
contracts;
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the
existence, if any, of defaults or restrictions under SenoRx’s material
contracts;
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the
inapplicability of state takeover laws to the
merger;
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the
fairness opinion of SenoRx’s financial
advisor;
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matters
with respect to fees payable to advisors in connection with the
merger;
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related
party transaction matters;
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matters
with respect to SenoRx’s personal property and assets and absence of
liens;
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labor
and employment matters;
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compliance
with the Foreign Corrupt Practices Act of 1977, as
amended;
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compliance
with of U.S. export and import laws;
and
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SenoRx’s
request for sales tracing from its international
distributors.
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Many of
the representations and warranties in the merger agreement made by SenoRx are
qualified by a “materiality” or “Company Material Adverse Effect” standard or
qualification (that is, they are not deemed to be untrue or incorrect unless
their failure to be true or correct, individually or in the aggregate, would, as
the case may be, be material or have a material adverse effect on
SenoRx). For purposes of the merger agreement, “Company Material
Adverse Effect,” means any fact, circumstance, effect, event, change or
occurrence, that individually or in the aggregate, with all other facts,
circumstances, effects, events, changes or occurrences has, or would reasonably
be expected to have a material adverse effect on the business, assets, condition
(financial or otherwise) or results of operations of SenoRx, or would prevent or
have a material adverse effect on the ability of SenoRx to consummate the merger
in accordance with the terms of the merger agreement, in each case, other than
resulting or arising out of any of the following:
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any
fact, circumstance, effect, event, change or occurrence relating to local,
regional, national or foreign political, economic or financial conditions
or resulting from or arising out of developments or conditions in credit,
currency, capital, securities or other financial markets, including caused
by acts of terrorism or war (whether or not declared) or any material
worsening of such conditions existing as of the date of the merger
agreement, but only to the extent such change or effect does not
disproportionately affect SenoRx relative to the other industry
participants;
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any
fact, circumstance, effect, event, change or occurrence generally
affecting the industry in which SenoRx operates, but only to the extent
such change or effect does not disproportionately affect SenoRx relative
to the other industry participants;
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any
fact, circumstance, effect, event, change or occurrence resulting from any
hurricane, earthquake or other natural disasters, weather conditions or
other force majeure events, but only to the extent such change or effect
does not disproportionately affect SenoRx relative to the other industry
participants;
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any
change, in and of itself, in the share price or trading volume of the
shares of SenoRx common stock, without precluding any fact, circumstance,
effect, event, change or occurrence that may have contributed to or caused
such changes from being taken into account in determining whether a
Company Material Adverse Effect has occurred, unless such fact,
circumstance, effect, event, change or occurrence is itself not to be
considered in the determination of whether a Company Material Adverse
Effect has occurred as described in any other bullet point in this list of
excluded matters;
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any
fact, circumstance, effect, event, change or occurrence resulting from a
change after the date of the merger agreement in accounting rules or
procedures announced with respect to United States generally accepted
accounting principles or other accounting standards (or the interpretation
thereof), in each case, as applicable to the financial statements of
SenoRx, or a change after the date of the merger agreement in laws (or the
interpretation thereof), but only to the extent such change or effect does
not disproportionately affect SenoRx relative to the other industry
participants;
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any
failure, in and of itself, to meet any internal budgets, plans,
projections or forecasts of SenoRx’s revenue, earnings or other financial
performance or results of operations, or any published financial forecasts
or analyst estimates of SenoRx’s revenue, earnings or other financial
performance or results of operations or any change in analyst
recommendations, for any period, without precluding any fact,
circumstance, effect, event, change or occurrence that may have
contributed to or caused such changes from being taken into account in
determining whether a Company Material Adverse Effect has occurred, unless
such fact, circumstance, effect, event, change or occurrence is itself not
to be considered in the determination of whether a Company Material
Adverse Effect has occurred as described in any other bullet point in this
list of excluded matters;
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any
fact, circumstance, effect, event, change or occurrence attributable to
the execution, performance or announcement of the merger agreement
including, the identity of Bard, the loss or departure of officers or
other employees of SenoRx, or the loss or diminution in SenoRx’s
relationships, contractual or otherwise, with any of its customers,
suppliers, distributors, landlords, licensors, licensees or other business
partners, without precluding any legal or contractual consequences of the
execution of the merger agreement or the consummation of the transactions
from being taken into account in determining whether a Company Material
Adverse Effect has occurred;
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any
action taken or failed to be taken by SenoRx at the request or with the
consent of Bard, that, if taken without the request or the consent of
Bard, would have been prohibited by the terms of the merger agreement;
or
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any
legal proceedings made or brought by any of the current or former
stockholders of SenoRx, on their own behalf or on behalf of SenoRx,
against SenoRx or any of its officers or directors, including legal
proceedings arising out of the merger or in connection with any of the
other transactions contemplated by the merger
agreement.
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In the
merger agreement, Bard and Merger Sub made customary representations and
warranties to SenoRx with respect to, among other things:
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the
due incorporation, valid existence and good standing of Bard and Merger
Sub;
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the
full force and effectiveness of, and Bard’s and Merger Sub’s compliance
with, their respective charter
documents;
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the
authority of each of Bard and Merger Sub to enter into the merger
agreement and to complete the transactions contemplated by the merger
agreement and the enforceability of the merger agreement against each of
Merger Sub;
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the
existence, if any, of conflicts with, violations or defaults under Bard’s
or Merger Sub’s governing documents, applicable laws or certain agreements
as a result of entering into the merger agreement and the consummation of
the merger;
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the
required consents and approvals of governmental entities in connection
with the transactions contemplated by the merger
agreement;
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the
availability of financial resources to consummate the merger and lack of a
financing condition;
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matters
with respect to fees payable to advisors in connection with the
merger;
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the
existence, if any, of certain
litigation;
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the
accuracy and compliance with applicable securities laws of the information
supplied by Bard contained in this proxy statement;
and
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their
lack of ownership of SenoRx common stock as of the date of the merger
agreement.
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The
representations, warranties, covenants and agreements contained in the merger
agreement and in any instrument delivered pursuant to the merger agreement will
not survive the effective time of the merger. This limit does not
apply to certain covenants and agreements set forth in the merger agreement
which by their terms contemplate performance after the effective time of the
merger.
Covenants
Regarding Conduct of Business by SenoRx Pending the Merger
Except as
required by applicable law, as otherwise expressly contemplated or permitted by
the merger agreement, or consented to in writing by Bard (which consent may not
be unreasonably withheld, conditioned or delayed) and subject to certain other
exceptions, from the date of the merger agreement until the earlier of the
consummation of the merger or the termination of the merger agreement, SenoRx
has agreed to conduct its business in the ordinary course, consistent with past
practice, and use its commercially reasonable efforts to:
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preserve
intact its current business organization and material assets consistent
with its past practices in the ordinary course of
business;
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keep
available the services of its directors, officers and key
employees;
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preserve
its relationships with its material customers, suppliers, licensors,
licensees and distributors; and
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maintain
its inventory of supplies and components necessary for the manufacture of
SenoRx’s products at adequate levels as required to operate the
business.
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In
addition, except as required by applicable law or as otherwise expressly
contemplated or permitted by the merger agreement, and subject to certain other
exceptions, SenoRx may not take any of the following actions without Bard’s
prior written consent (which consent may not be unreasonably withheld,
conditioned or delayed):
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authorize
for issuance, issue, sell, deliver, sell or agree to commit to issue, sell
or deliver, pledge or otherwise encumber any shares of its capital stock,
any other securities or any securities convertible into, or any rights,
warrants or options to acquire, any such shares, securities or convertible
securities or any other securities or equity equivalents (including stock
appreciation rights or phantom interests), except for certain permitted
issuances set forth in the merger
agreement;
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repurchase,
redeem or otherwise acquire any shares of capital stock or other equity
interests of SenoRx (including securities exchangeable for, or options,
warrants, calls, commitments or rights of any kind to acquire, capital
stock or other equity interests of SenoRx) except for forfeitures of
common stock issued pursuant to restricted stock awards or purchase
agreements outstanding on the date of the merger agreement or for tax
withholdings and exercise price settlements upon exercise of options or
warrants or with respect to restricted stock or restricted stock units, in
each case, outstanding on the date of the merger
agreement;
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amend
or otherwise change its certificate of incorporation or
bylaws;
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split,
combine or reclassify any shares of its capital
stock;
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amend
or otherwise change the terms of any options, warrants, restricted stock
units or restricted stock;
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declare,
set aside or pay any dividends on (whether in cash, stock or other
property), or make any other distributions in respect of, any of its
capital stock or acquire or agree to acquire any asset (except raw
materials, inventory or supplies in the ordinary course of business
consistent with past practices and certain permitted capital
expenditures), business line, division, capital stock or other equity
interest of any person;
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grant
or agree to any increase, in any manner, in the compensation, severance
benefits or fringe benefits of, or pay any severance or bonus to, any
current or former director, officer or employee, subject to certain
exceptions for compensation increases to certain employees other than
officers of SenoRx;
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enter
into any new or amend, modify or supplement any contract (including any
existing employment, consulting, severance, termination, change of control
or indemnification contract), transaction, commitment or arrangement with
any current or former director, officer, employee or other affiliate of
SenoRx, provided that SenoRx may enter into offer letters with new
employees (other than officers) providing for customary new hire packages
consistent with the employee benefit plans outstanding on the date of the
merger agreement and may pay severance and provide other termination
benefits to employees (other than officers) of SenoRx as may be required
by the employee benefit plans outstanding on the date of the merger
agreement, in each case, in the ordinary course of business consistent
with past practices and current market
practices;
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become
obligated under any employee benefit plan that was not outstanding on the
date of the merger agreement or amend, modify or terminate any employee
benefit plan or any contract, arrangement, plan or policy for the benefit
of any current or former director, officer or employee outstanding on the
date of the merger agreement;
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pay
any benefit not required by any plan or arrangement employee benefit plan
outstanding on the date of the merger agreement (including the granting
of, acceleration of exercisability of or vesting of stock options, stock
appreciation rights, restricted stock or restricted stock units; subject
to certain exceptions for new
hires);
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sell,
lease, license, mortgage or otherwise encumber or subject to
any lien, other than certain permitted liens, or otherwise dispose of any
of its properties or assets that are material, individually or in the
aggregate, to SenoRx other than sales of inventory and other assets in the
ordinary course of business consistent with past
practices;
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incur,
assume, pre-pay, discharge or satisfy any indebtedness or enter into any
contract to incur, assume, pre-pay, discharge or satisfy any indebtedness,
other than in the ordinary course of business consistent with past
practices pursuant to certain letters of credit, lines of credit or other
credit facilities or arrangements, or guarantee, or agree to guarantee,
any such indebtedness or obligation of another person, or issue or sell,
or agree to issue or sell, any debt securities or options, warrants or
calls or rights to acquire any debt securities of SenoRx, guarantee any
debt securities of others, enter into any “
keep well
” or other
contract to maintain any financial statement condition of another person
or enter into any contract or arrangement having the economic effect of
any of the foregoing;
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make
or forgive any loans, advances or capital contributions to, guarantees for
the benefit of, or investments in, any person, other than cash advances to
SenoRx’s employees for reimbursable travel and other business expenses
incurred in the ordinary course of business consistent with past
practices;
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adopt
or put into effect a plan of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization or other
reorganization of SenoRx;
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enter
into, or amend, modify, elect not to renew or terminate or waive, release
or assign any rights under, any material contract, except that SenoRx may
amend, modify, elect not to renew or terminate or waive, release or assign
any rights under certain material contracts in a manner that is not
adverse to SenoRx, and may enter into certain material contracts, in each
case in the ordinary course of business consistent with past
practices;
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renew
any of its distribution agreements for a period of more than one year from
the date of expiration of the then current term of any such distribution
agreement;
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except
for customer (including distribution) contracts entered into in the
ordinary course of business consistent with past practices, renegotiate or
enter into any new material contract or arrangements relating to any
proprietary rights;
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make
any capital expenditure or commitments not consistent with expenditures
SenoRx’s capital budget for 2010 or
2011;
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make
any material changes in its standardized sales terms and conditions other
than in the ordinary course of business consistent with past
practices;
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enter
into any settlement, conciliation or similar contract with any
governmental authority;
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settle
or compromise any pending or threatened claim, except with respect to the
settlement or compromise of any such claim (i) where the full amount paid
or to be paid is covered by insurance coverage maintained by SenoRx
(subject to any applicable deductibles or retention amounts) or (ii) that
is not covered by insurance and where the full amount paid or to be paid
does not exceed $25,000
individually;
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change
any of the accounting policies, practices or procedures (including
material tax accounting methods, periods, policies, practices or
procedures) or any of its methods of reporting income, deductions or other
items for financial accounting purposes, except as may be required as a
result of a change in GAAP enacted after the date of the merger
agreement;
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make,
change or rescind any material tax election, enter into any material
closing agreement relating to taxes, settle or compromise any material tax
liability, audit, claim, proceeding or assessment, file any material
amended tax return, surrender any right to claim a refund of material
taxes, or consent to any extension or waiver of the limitation period
applicable to any material tax liability or assessment, except in the
ordinary course of business consistent with past
practices;
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allow
any material proprietary rights to become abandoned or expired for failure
to make required filings or pay required fees;
or
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agree
to take any of the actions described
above.
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No
Solicitations
Subject
to certain exceptions, SenoRx has agreed that SenoRx and its officers and
directors will not, and SenoRx will cause its representatives not
to:
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solicit,
initiate or encourage (including by way of furnishing information or
assistance), or take any other action to facilitate, any inquiry in
connection with, or the making of any proposal from any person that
constitutes, or would reasonably be expected to lead to, an acquisition
proposal (as defined below);
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maintain
or continue, or enter into or participate in, any discussion or
negotiation with any person (other than Merger Sub, Bard or any Bard
representative, as applicable) regarding an acquisition proposal, or
furnish to any person (other than Merger Sub, Bard or any Bard
representative, as applicable) any information or otherwise cooperate in
any way with any effort or attempt by any other person to make or effect
an acquisition proposal; or
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subject
to the SenoRx board properly effecting a recommendation change (as
described below), withdraw or modify, in a manner adverse to Bard, its
approval or favorable recommendation of the merger agreement and the
merger, or approve an acquisition proposal, or enter into any
contract, arrangement or understanding with respect to acquisition
proposal, other than certain acceptable confidentiality agreements (we
refer to any of the actions described in this bullet point as a
recommendation change).
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However,
the merger agreement does not prohibit the SenoRx board, directly or indirectly
through SenoRx’s representatives, before obtaining the required stockholder
approval, from furnishing non-public information to, or entering into or
participating in discussions or negotiations with, any person that makes an
unsolicited written, bona fide acquisition proposal (which did not result from a
breach of the merger agreement) that provides for consideration per share of
SenoRx common stock that is greater than the merger consideration
if:
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the
SenoRx board determines in good faith after consultation with its outside
legal counsel that failure to take such action would be inconsistent with
its fiduciary duties to SenoRx’s stockholders under applicable
law;
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before
entering into or participating in discussions with such person, the SenoRx
board determines in good faith, after consultation with its outside legal
counsel and financial advisor, that the acquisition proposal constitutes
or would reasonably be expected to lead to a superior proposal (as defined
below); and
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before
furnishing any non-public information to, or entering into or
participating in discussions or negotiations with, such person, SenoRx (1)
receives from such person an executed confidentiality contract (which will
be provided to Bard for informational purposes) with terms no less
favorable to SenoRx than those contained in the confidentiality agreement
with Bard (it being understood and agreed that such confidentiality
contract need not contain a “standstill” or other similar provision that
prohibits such third party from making any proposal to acquire SenoRx,
acquire securities of SenoRx or nominate for election members of the
SenoRx board), and (2) concurrently with its delivery to such person,
SenoRx delivers to Bard and Merger Sub all such information not previously
provided to Bard and Merger Sub.
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Under the
merger agreement, SenoRx is required to promptly (and in no event later than
within 24 hours) notify Bard orally and in writing of the receipt by SenoRx of
any acquisition proposal or any inquiry or request for discussion regarding an
acquisition proposal including any request for information, the terms and
conditions of such request, acquisition or inquiry and the identity of the
person making such request, acquisition proposal or inquiry (including copies of
any document or correspondence evidencing such acquisition proposal or inquiry).
SenoRx is also required keep Bard informed of any material changes (including
any changes to price, merger consideration, financing terms, if any, and closing
conditions) to any such acquisition proposal, inquiry or request. The
merger agreement prohibits SenoRx from, and requires SenoRx to cause its
representatives not to, enter into any contract with any person after the date
of the merger agreement that would restrict SenoRx’s ability to provide such
information relating to SenoRx to Bard. SenoRx is not currently a party to any
contract that prohibits SenoRx from providing such information relating to
SenoRx to Bard.
SenoRx
agreed to immediately cease, and cause each of its representatives to
immediately cease, all existing activities, discussions or negotiations with any
parties (other than Merger Sub, Bard or any Bard representative, as applicable)
conducted before the date of the merger agreement with respect to any
acquisition proposal. SenoRx is required to promptly request any such
parties in possession of confidential information about SenoRx that was
furnished by or on behalf of SenoRx in connection with such acquisition proposal
to return or destroy all such information in the possession of any such party or
its representatives.
For
purposes of the merger agreement, “acquisition proposal” means any offer or
proposal for a merger, acquisition, recapitalization, consolidation, tender
offer, exchange offer or similar transaction involving, or any proposal or offer
to purchase or acquire in any manner (A) assets representing 20% or more of the
assets of SenoRx or (B) an equity interest in 20% or more of the voting
securities of SenoRx, other than the transactions contemplated by the merger
agreement.
For
purposes of the merger agreement, “superior proposal” means any acquisition
proposal (substituting 50% for the 20% thresholds set forth in the definition of
“acquisition proposal”) the SenoRx board has determined in good faith, after
consultation with its outside counsel and financial advisor, and taking into
account all financial, regulatory, legal and other aspects of such acquisition
proposal, (i) is more favorable from a financial point of view to SenoRx’s
stockholders than the merger (including any adjustment to the terms and
conditions thereof proposed in writing by Bard in response to any such
acquisition proposal) and which such acquisition proposal, if it includes
non-cash consideration, would result in the receipt by SenoRx’s stockholders of
consideration economically superior to the consideration such holders are to
receive in the merger; (ii) is reasonably capable of being consummated no later
than nine months from the receipt of such acquisition proposal; and (iii) for
which financing, to the extent required, is then fully committed.
Change
in Recommendation
The
merger agreement provides that, notwithstanding the restrictions described in
the previous section, the SenoRx board may effect a recommendation change if the
SenoRx board determines in good faith, after consultation with its outside legal
counsel and financial advisor, that an acquisition proposal is a superior
proposal.
However,
before determining that an acquisition proposal is a superior proposal, the
following conditions must be met:
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the
SenoRx board must determine in good faith, after consultation with legal
counsel, that the failure to effect a recommendation change relating to a
superior proposal would be inconsistent with its fiduciary duties to
SenoRx’s stockholders under applicable
law;
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SenoRx
must notify Bard in writing that it intends to effect a recommendation
change relating to the superior proposal, attaching the current version of
the definitive agreement relating to the superior proposal (which we refer
to as a superior proposal notice);
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if
requested by Bard, SenoRx must make its representatives available to
discuss with Bard’s representatives, and to negotiate in good faith with
Bard’s representatives, any proposed modifications to the terms and
conditions of the merger agreement during the three business days after
delivery by SenoRx of the superior proposal notice to Bard;
and
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if
Bard delivers to SenoRx during that three business day period (as may be
extended as set forth in the merger agreement) a written, binding and
irrevocable offer meeting certain requirements, the SenoRx board must
determine in good faith, after considering the terms of the offer by Bard,
that the acquisition proposal giving rise to the superior proposal notice
continues to constitute a superior
proposal.
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The
merger agreement does not prohibit the SenoRx board from taking, and disclosing
to SenoRx’s stockholders, a position contemplated by Rule 14d-9 or Rule 14e-2
promulgated under the Exchange Act about any tender offer or exchange offer that
is an acquisition proposal, or making any disclosure to SenoRx’s stockholders
that the SenoRx board determines in good faith, after consultation with its
outside legal counsel, that the failure to make such disclosure would be
inconsistent with its fiduciary duties to SenoRx’s stockholders, subject to
certain requirements to notify Bard of the disclosure in advance and to reaffirm
the SenoRx board’s recommendation under certain circumstances.
Employment
Matters
Employee Benefits
and Service Credit
. Under the merger agreement, Bard is
required to honor certain change in control agreements in accordance with their
terms as is in effect immediately prior to the effective time of the merger;
provided, that Bard is not prohibited from amending or terminating, or from
causing SenoRx to amend or terminate, any such change in control agreement in
accordance with its terms or if otherwise required by applicable law (with the
consent of the employee covered by any such change in control agreement if
required). For a period of three months following the completion of
the merger, employees of SenoRx who continue employment with the surviving
corporation throughout that time (who we refer to as continuing employees) will
receive: (i) at least the same level of base salary and regular wages and
(ii) employee benefits that are no less favorable in the aggregate, than
those provided to the continuing employees by SenoRx generally immediately
before the effective time of the merger pursuant to certain benefit plans and
excluding any change in control and equity benefits. Following the
effective time of the merger, Bard has agreed to recognize the service of each
continuing employee (to the extent such service was recognized by SenoRx) with
SenoRx before the effective time of the merger for purposes of eligibility to
participate and vesting in any Bard benefits plans covering such continuing
employees. Additionally, for the calendar year that includes the
effective time of the merger continuing employees will, subject to certain
conditions, (i) have certain rights to participate in benefit plans of the
surviving corporation established after the effective time of the merger on
certain terms, (ii) receive credit for certain payments made in connection with
SenoRx health and welfare benefit plans and (iii) receive waivers for waiting
periods and certain other conditions or exclusions applicable to any health and
welfare benefit plans in place following the effective time of the
merger. Any vacation or paid time off accrued but unused by a
continuing employee as of immediately before the effective time of the merger
will be credited to the continuing employee following the effective
time.
Other
Covenants and Agreements
Consents and
Filings
. Each of the parties has agreed to make merger
notification filings, at such times as are consistent with its legal counsel’s
judgment (but in no event, in the case of filings with the FTC and the Antitrust
Division, later than twenty business days following the execution and delivery
of the merger agreement) with (1) the FTC and the Antitrust Division relating to
the merger agreement and the transactions contemplated thereby as required by
the HSR Act, and (2) any foreign governmental authority that the parties
reasonably determine are necessary to be made under any other antitrust laws.
Each of SenoRx and Bard will (i) cooperate and coordinate with the other in the
making of any filings or submissions that are required to be made under any
applicable laws or orders or requested to be made by any governmental authority
in connection with the merger and any other transactions contemplated by the
merger agreement, (ii) supply the other or its outside counsel with any
information that may be required or requested by any governmental authority in
connection with such filings or submissions, and (iii) use all reasonable
efforts to cause the expiration or termination of the applicable waiting periods
under any applicable laws or orders as soon as reasonably
practicable.
If and to
the extent necessary to consummate and make effective the merger and any other
transactions contemplated by the merger agreement, to resolve objections, if
any, as the FTC, the DOJ, or any other governmental authority may assert under
any applicable laws or orders with respect to the merger and any other
transactions contemplated by the merger agreement, and/or to avoid or eliminate
each and every impediment under any law or order that may be asserted by the
FTC, the DOJ or any other governmental authority with respect to the merger and
any other transactions contemplated by the merger agreement so as to enable
consummation of the merger and any other transactions contemplated by the merger
agreement in the most expeditious manner practicable, Bard and SenoRx will
promptly (and in any event on or before six months from the date of the merger
agreement) agree to any sale, divestiture, license or other disposition of any
business, product line or asset of SenoRx that is not, taken as a whole or
individually, in Bard’s reasonable judgment, material to SenoRx’s business
(including any hold separate order related to such sale, divestiture, license or
disposition), and the imposition of any restriction or limitation on the ability
of any of them to own or exercise control of such non-material business, product
line or asset of SenoRx, and will consummate any such transaction in the most
expeditious manner practicable (and in any event on or before the expiration
date, as defined below). Notwithstanding anything to the contrary contained in
the merger agreement, nothing in the merger agreement requires (i) Bard to sell,
divest, license, dispose of, hold separate, restrict or otherwise limit any of
it own businesses, product lines or assets or (ii) Bard or SenoRx to sell,
divest, license, dispose of, hold separate, restrict or otherwise limit any
business, product line or asset of SenoRx which is, taken as a whole or
individually, in Bard’s reasonable judgment, material to SenoRx’s
business.
In
addition, each of the parties have agreed to promptly inform the other parties
of any communication from any governmental authority regarding the merger or any
related transaction in connection with any filings or investigations with, by or
before any governmental authority relating to the merger agreement or the merger
or any other transactions contemplated by the merger agreement, including any
proceedings initiated by a private party. If any party to the merger
agreement receives a request for additional information or documentary material
from any governmental authority with respect to the merger or any other
transactions contemplated by the merger agreement pursuant to the HSR Act or any
other antitrust laws with respect to which any such filings have been made, then
such party will use its commercially reasonable efforts to make, or cause to be
made, as soon as reasonably practicable and after consultation with the other
party, an appropriate response to such request. The parties have
agreed, unless prohibited by applicable law or by the applicable governmental
authority, to give each other reasonable advance notice of all meetings with any
governmental authority relating to the merger agreement or the merger or any
other transactions contemplated by the merger agreement, keep the other party
reasonably apprised with respect to any communications with any governmental
authority regarding the merger agreement or the merger or any other transactions
contemplated by the merger agreement, cooperate in the filing of any analyses,
presentations, memoranda, briefs, arguments, opinions or other written
communications explaining or defending the merger agreement or the merger or any
other transactions contemplated by the merger agreement, articulating any
regulatory or competitive argument and/or responding to requests or objections
made by any governmental authority, and provide each other (or counsel of each
party, as appropriate) with copies of all written communications to or from any
governmental authority relating to the merger agreement or the merger or any
other transactions contemplated by the merger agreement.
Access to
Information
. Subject to applicable law and the existing
confidentiality agreement between SenoRx and Bard, SenoRx and its affiliates and
representatives will give Bard and its representatives reasonable access upon
reasonable notice and during SenoRx’s normal business hours, to the offices and
other facilities, to the officers and other SenoRx representatives, to the books
and records of SenoRx, and to such financial and operating data and such other
information with respect to the business and operations of SenoRx as Bard and
its representatives may from time-to-time reasonably
request, provided that any such investigation and information
provided, made available or delivered to Bard or its representatives is
conducted in a manner that does not unreasonably interfere with the conduct of
the business of SenoRx or create a risk of damage or destruction to any property
or assets of SenoRx.
Public
Announcements
. Under the merger agreement, each party must
consult promptly with the other parties before issuing any press release or
otherwise making any public statement with respect to the merger and any other
transactions contemplated by the merger agreement, must provide to the other
party for review a copy of any such press release or statement, and may not
issue any such press release or make any such public statement before such
consultation and review by the other party, unless required by applicable law or
rules and regulations of any securities exchange, in which case the party must
use its commercially reasonable efforts to allow the other party reasonable time
to comment on such release or announcement in advance of such
issuance. The restrictions just described do not apply to any release
or announcement made or proposed to be made by SenoRx following a recommendation
change by the SenoRx board.
Commercially
Reasonable Efforts
. Except as otherwise provided in the merger
agreement, Bard and SenoRx have agreed to cooperate with each other and to use
commercially reasonable efforts to take, or cause to be taken, all such actions,
and to do, or cause to be done, all such things as may be necessary or
appropriate in order to effectuate, as expeditiously as practicable, the merger
and any other transactions contemplated by the merger agreement, including
causing the conditions to the merger described below to be
satisfied. However, SenoRx is not required before the effective time
of the merger to pay any consent fee, “profit sharing” payment or other
consideration (including increased rent or other payments), or to provide any
additional security (including a guaranty), to obtain the consent of any third
party under any contract.
Third Party
Standstill Agreements
. SenoRx has agreed not to terminate,
amend, modify or waive any provision of any confidentiality or standstill
contract to which SenoRx is a party (other than involving Bard or its
affiliates), and SenoRx will use commercially reasonable efforts to enforce the
provisions of any such contracts, including seeking injunctions to prevent any
breaches of such agreements or to enforce specifically the terms and provisions
thereof in a court in the United States or any state thereof having
jurisdiction.
Stockholder
Litigation
. Under the merger agreement, SenoRx and Bard will
give each other the reasonable opportunity to participate in the defense of any
stockholder claim against SenoRx or Bard, as applicable, and their respective
directors (in their capacity as such) relating to the merger agreement or the
transactions contemplated thereby. SenoRx may not settle any claim pending as of
the date of the merger agreement, or commenced after the date of the merger
agreement, against SenoRx or any of its directors (in their capacity as such) by
any stockholder of SenoRx or holder of any options, warrants, restricted stock
or restricted stock units relating to the merger agreement or the transactions
contemplated thereby, in each case, without the prior written consent of Bard
(which consent shall not be unreasonably withheld, conditioned or
delayed).
State Takeover
Statutes
. The parties have agreed to use commercially
reasonable efforts to take such actions as are reasonably necessary so that the
merger and any other transactions contemplated by the merger agreement may be
consummated as promptly as practicable on the terms contemplated by the merger
agreement, which efforts shall include the SenoRx board taking all actions
permitted under applicable law to render any “
fair price
,” “
moratorium
,” “
control share acquisition
,”
“
business combination
”
or other similar anti-takeover laws in the United States (including Section 203
of the DGCL), inapplicable to the merger and any other transactions contemplated
by the merger agreement.
Notification
of Certain Matters
. Under the
merger agreement, the parties must provide each other with prompt notice of any
written notice or other communication received from any person alleging that the
consent of such person is required in connection with the merger or any other
transactions contemplated by the merger agreement, any notice from any
governmental authority in con
nection with the merger or any other
transactions contemplated by the merger agreement, any actions, suits, claims,
investigations or proceedings commenced or, to such party’s knowledge,
threatened against, relating to or involving or otherwise affecting such party
or any of its subsidiaries which relate to the merger or any other transactions
contemplated by the merger agreement, the discovery of any fact or
circumstance, or the occurrence or non-occurrence of any event, that would
reasonably be expected to cause certain failures of the conditions to the
closing of the merger to be satisfied, and any material failure of such party to
comply with or satisfy any covenant or agreement to be complied with or
satisfied by it under the merger agreement.
Retention
Agreements
. The merger agreement contemplates that Bard will
prepare and provide individual retention agreements for certain SenoRx
employees, none of which may require SenoRx to make any payments to any
employees before the effective time of the merger, and that SenoRx will assist
Bard, as and to the extent reasonably requested by Bard, in the creation of such
retention agreements, provide Bard with such information regarding its employees
as may be reasonably requested by Bard for such purposes, which information may
include employee names, addresses, titles, compensation and current equity
holdings, provide Bard access to SenoRx’s employees, and cause a duly authorized
officer of SenoRx to execute such retention agreements on behalf of
SenoRx. SenoRx may not terminate, amend, withdraw, revoke, modify or waive
any provision of any such retention agreements without Bard’s prior written
approval.
Indemnification
of SenoRx Directors and Officers
. Under the merger agreement,
the surviving corporation will (and Bard will cause the surviving corporation
to) cause the certificate of incorporation and the bylaws of the surviving
corporation to contain provisions with respect to indemnification, advancement
of expenses and director exculpation substantially similar to those set forth in
SenoRx’s certificate of incorporation and bylaws as in effect at the date of the
merger agreement (to the extent consistent with applicable law), which
provisions may not be amended, repealed or otherwise modified in any manner that
would adversely affect the rights thereunder of the persons who at any time
before the effective time of the merger were entitled to indemnification,
advancement of expenses or exculpation under SenoRx’s certificate of
incorporation or bylaws in respect of actions or omissions occurring at or
before the effective time of the merger (including the merger and any other
transactions contemplated by the merger agreement), unless otherwise required by
applicable law. In addition, the surviving corporation will (and Bard
will cause the surviving corporation to) honor and fulfill in all respects the
obligations of SenoRx under certain indemnification agreements.
From and
after the effective time of the merger and until the expiration of any
applicable statutes of limitation, to the fullest extent permitted by applicable
law (subject to certain conditions), the surviving corporation will (and Bard
will cause the surviving corporation to) indemnify, defend and hold harmless
each person who is or has been before the date of the merger agreement or who
becomes before the effective time of the merger an officer, director, employee
or agent of SenoRx against all losses, claims, damages, judgments, fines, fees
and expenses (including reasonable attorneys’ fees and investigation expenses),
liabilities or amounts that are paid in settlement of, or otherwise incurred
(but only to the extent such losses are not otherwise covered by insurance and
paid), in connection with any claim, whether civil, criminal, administrative or
investigative, to which any such indemnified party is or may become a party to
by virtue of his or her service as a present or former director, officer,
employee or agent of SenoRx and arising out of actual or alleged events, actions
or omissions occurring or alleged to have occurred at or before the effective
time of the merger (including the merger and any other transactions contemplated
by the merger agreement), in each case, to the fullest extent permitted under
the DGCL and provided in SenoRx’s certificate of incorporation and bylaws as in
effect at the date of the merger agreement (and will pay expenses in advance of
the final disposition of the claim(s) that are reasonably incurred in defending
any such claim to each such indemnified party to the fullest extent permitted
under the DGCL as provided in SenoRx’s certificate of incorporation and bylaws
as in effect at the date of the merger agreement, upon receipt from such
indemnified party to whom expenses are advanced of the undertaking to repay such
advances contemplated by the DGCL).
Effective
upon the effective time of the merger, Bard will cause to be purchased and
maintained a six year “tail” prepaid liability insurance policy in respect of
acts or omissions occurring at or before the effective time of the merger,
covering each person currently covered by SenoRx’s directors’ and officers’
liability insurance policy on terms, including with respect to coverage and
amount, no less favorable to such directors and officers than those of such
policy in effect on the date of the merger agreement, provided that in no event
will Bard or the surviving corporation be required to expend for such policies
pursuant to this sentence an annual premium amount in excess of 200% of the
annual premiums currently paid by SenoRx for such insurance. If the annual
premiums of such insurance coverage exceed such amount, the surviving
corporation will obtain a policy with the greatest coverage available for a cost
not exceeding such amount.
Conditions
to the Merger
Conditions to
Each Party’s Obligations
. Each party’s obligation to
consummate the merger is subject to the satisfaction of the following mutual
conditions:
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SenoRx
will have obtained the approval of the majority of the holders of the
outstanding shares of SenoRx common stock to adopt the merger
agreement;
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no
governmental authority in the United States or in any of certain other
jurisdictions will have enacted, issued, promulgated, enforced or entered
any law or order that is then in effect and that has the effect of
preventing or prohibiting the consummation of the merger or otherwise
imposing material limitations on the ability of Bard to effectively
acquire, hold or operate the business of SenoRx or Bard, provided that
each of the parties must use its commercially reasonable efforts to appeal
any such order or otherwise have any such order vacated or removed;
and
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any
waiting period (and any extension thereof) under the HSR Act will have
expired or terminated, and any waiting period (and any extension thereof),
and any necessary consents, approvals, permits of, authorizations from,
notifications to and filings with any governmental authorities, under any
antitrust laws of certain jurisdictions, to the extent applicable, will
have been made or obtained.
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Conditions to
Bard’s and Merger Sub’s Obligations
. The obligation of Bard
and Merger Sub to consummate the merger is subject to the satisfaction or waiver
of the following additional conditions:
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the
representations and warranties of SenoRx contained in the merger agreement
will be true and correct in all respects as of the closing date as if made
on and as of the closing date (except to the extent such representations
and warranties expressly relate to an earlier date, in which case as of
such earlier date), except that any inaccuracies in such representations
and warranties will be disregarded if the circumstances giving rise to all
such inaccuracies (considered collectively) do not constitute a Company
Material Adverse Effect, as defined below (other than as described in the
next bullet point); provided, however, that for purposes of determining
the accuracy of such representations and warranties, all “Company Material
Adverse Effect” qualifications and other materiality qualifications, and
any similar qualifications, contained in such representations and
warranties will be disregarded;
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the
representations and warranties concerning SenoRx’s charter documents,
capitalization (except for insignificant deviations in certain numerical
amounts set forth in the merger agreement), authority, absence of
subsidiaries, non-applicability of state takeover statutes, the opinion of
SenoRx’s financial advisor, and the use of brokers will be true and
correct in all respects, in each case, as of the closing date as if made
on and as of the closing date (except to the extent such representations
and warranties expressly relate to an earlier date, in which case as if
made as of such earlier date));
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SenoRx
will have, in all material respects, performed all obligations and
complied with all agreements and covenants required to be performed by it
or complied with by it under the merger agreement at or before the
effective time of the merger;
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since
the date of the merger agreement, there will not have occurred any Company
Material Adverse Effect which is then
continuing;
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at
the closing, SenoRx will have delivered an officers’ certificate, duly
executed by SenoRx’s Chief Executive Officer or Chief Financial Officer on
behalf of SenoRx and dated as of the closing date, stating that the
conditions to closing described in the four bullet points above have been
satisfied; and
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the
number of shares held by holders who have not voted in favor of the merger
and who have properly demanded appraisal for his or her shares in
accordance with the DGCL will not constitute more than 10% of the
aggregate number of common shares outstanding as of the date of the merger
agreement.
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Conditions to
SenoRx’s Obligations
. The obligation of SenoRx to consummate
the merger is subject to the satisfaction or waiver of the following additional
conditions:
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the
representations and warranties of Bard and Merger Sub contained in the
merger agreement will be true and correct in all respects as of the
closing date as if made on and as of the closing date (except to the
extent such representations and warranties expressly relate to an earlier
date, in which case as of such earlier date), except that any inaccuracies
in such representations and warranties (other than the representations and
warranties concerning authority and financial capability, which shall be
true and correct in all material respects as of the closing date as if
made on and as of the closing date) will be disregarded if the
circumstances giving rise to all such inaccuracies (considered
collectively) do not constitute a Parent Material Adverse Effect, meaning
any fact, circumstance, effect, event, change or occurrence that would
prevent or have a material adverse effect on the ability of Bard and
Merger Sub to consummate the merger in accordance with the terms of the
merger agreement; provided, however, that for purposes of determining the
accuracy of such representations and warranties, all “Parent Material
Adverse Effect” qualifications and other materiality qualifications, and
any similar qualifications, contained in such representations and
warranties shall be disregarded;
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each
of Merger Sub and Bard shall have, in all material respects, performed all
obligations and complied with all agreements and covenants required to be
performed by them or complied with by them under the merger agreement at
or before the effective time of the merger;
and
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at
the closing, each of Merger Sub and Bard shall deliver an officer’s
certificate, duly executed by their respective Chief Financial Officers on
behalf of Merger Sub and Bard and dated as of the closing date, stating
that the conditions to closing described in the two bullet points above
have been satisfied.
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The above
conditions may be amended or waived before the effective time of the merger if
such amendment or waiver is in writing and is signed, in the case of an
amendment, by each party to the merger agreement or, in the case of a waiver, by
each party against whom the waiver is to be effective. However, after
the adoption of the merger agreement by SenoRx stockholders, no amendment or
waiver that changes the amount or the form of consideration to be delivered to
SenoRx stockholders or which by applicable law otherwise requires the further
approval of SenoRx’s stockholders may be made unless the required further
approval is obtained.
Termination
of the Merger Agreement
SenoRx
and Bard may terminate the merger agreement and the merger and any other
transactions contemplated by the merger agreement may be abandoned at any time
before the effective time of the merger by mutual written consent.
Termination by
Bard or SenoRx
. In addition, either Bard or SenoRx may terminate the
merger agreement and the merger and any other transactions contemplated by the
merger agreement may be abandoned at any time before the effective time of the
merger if:
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any
governmental authority has (i) notified Bard or SenoRx, or has announced,
that it has voted to challenge the consummation or legality of the merger
in a judicial or administrative proceeding, provided, however, that the
right to terminate the merger agreement pursuant to this provision will
not be available to any party that has failed to perform in all material
respects its obligations regarding filings and consents and requirements
to use commercially reasonable efforts to, among other things, effectuate
the consummation of the merger or (ii) issued or entered any order that is
in effect and has the effect of preventing or prohibiting the consummation
of the merger;
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the
merger has not been consummated on or before November 4, 2010, subject to
extension of up to three months, at the election of either Bard or SenoRx,
under certain circumstances set forth in the merger agreement relating to
obtaining antitrust approval, such date, as may be so extended being the
expiration date; provided, however, that Bard and SenoRx must use
commercially reasonable efforts to consummate any necessary, non-material
divestitures, in accordance with the terms of the merger agreement, before
the expiration date; and provided, further, that the right to terminate
the merger agreement under this provision will not be available to any
party whose failure to perform any covenant or obligation under the merger
agreement was the principal cause of or principally resulted in the
failure of the merger to have been consummated on or before the expiration
date; or
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upon
a vote at a duly held stockholders meeting (including any adjournment or
postponement thereof) to obtain the approval of the majority of the
holders of the outstanding shares of SenoRx common stock to adopt the
merger agreement in accordance with the merger agreement, such approval is
not obtained.
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Termination by
Bard
. Bard may also terminate the merger agreement and the merger and any
other transactions contemplated by the merger agreement may be abandoned at any
time before the effective time of the merger if:
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SenoRx
has breached any of its representations, warranties, covenants or other
agreements set forth in the merger agreement or any such representation or
warranty has become untrue after the date of the Agreement and such breach
or inaccuracy (i) would give rise to the failure of a condition described
in the first three bullet points under the heading “Conditions to the
Merger—Conditions to Bard’s and Merger Sub’s Obligations” above and (ii)
has not been cured within thirty days after written notice thereof is
received by SenoRx; provided that Bard will have no right to terminate the
merger agreement in connection with such breach or inaccuracy if there is
an uncured breach or inaccuracy by Bard or Merger Sub of the type
described in the first bullet point under the heading “Termination of the
Merger Agreement—Termination by SenoRx” below at the time of such breach
or inaccuracy by SenoRx or at the time of the purported termination in
connection with such breach or
inaccuracy;
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·
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a
recommendation change by the SenoRx board has occurred;
or
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·
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SenoRx
(i) receives any warning letter, or similar written notice, or
correspondence from the FDA or any other governmental authority regulating
medical devices, relating to quality issues, that in the opinion of Bard,
would reasonably be expected to materially impair, or lead to actions that
materially impair, the business of SenoRx; provided that concurrently with
and as a condition to such termination of the merger agreement, Bard pays
the reverse termination fee, as described below, and/or (ii) receives
notice of, or is subject to, any consent decree relating to FDA regulatory
or quality issues.
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Termination by
SenoRx
. SenoRx may also terminate the merger agreement and the merger and
any other transactions contemplated by the merger agreement may be abandoned
if:
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·
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at
any time before the effective time of the merger, Merger Sub or Bard has
breached any of their respective representations, warranties, covenants or
other agreements set forth in the merger agreement or any such
representation or warranty shall have become untrue after the date of the
merger agreement breach or inaccuracy (i) would give rise to the failure
of a condition described in the first two bullet points under the heading
“Conditions to the Merger—Conditions to SenoRx’s Obligations” above and
(ii) is not cured within thirty days after written notice thereof is
received by Merger Sub and Bard; provided that SenoRx will have no right
to terminate the merger agreement in connection with such breach or
inaccuracy if there is an uncured breach or inaccuracy by SenoRx of the
type described in the first bullet point under the heading “Termination of
the Merger Agreement—Termination by Bard” above at the time of such breach
or inaccuracy by Merger Sub or Bard or at the time of the purported
termination in connection with such breach or inaccuracy;
or
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·
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at
any time before obtaining the approval of the majority of the holders of
the outstanding shares of SenoRx common stock to adopt the merger
agreement, (i) a valid recommendation change by the SenoRx board has
occurred after SenoRx has complied with the procedures set forth in the
merger agreement and (ii) concurrently with and as a condition to such
termination of the merger agreement, SenoRx enters into a definitive
contract relating to an acquisition proposal not solicited in violation of
the merger agreement that constitutes a superior proposal and pays Bard
the termination fee, as described
below.
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Any
proper and valid termination of the merger agreement will be effective
immediately upon the delivery of written notice of the terminating party to the
other party or parties hereto, as applicable.
Termination
Fees and Expenses
If the
merger agreement is terminated, it will become null and void and have no effect,
without any liability on the part of any party or its representatives (except
for any fee or expenses that may be payable by SenoRx or Bard as described below
and except that certain customary provisions, including those relating to
confidentiality, will survive the termination of the merger agreement). However,
no such termination will relieve any party from liability for fraud
or any intentional or willful breach of any of its representations, warranties,
covenants or agreements set forth in the merger agreement.
Under the
merger agreement, SenoRx is required to pay Bard a termination fee of $9 million
in the following circumstances:
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·
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if
the merger agreement is terminated by SenoRx or Bard pursuant to the
provisions described in the second or third bullet points under the
heading “Termination of the Merger Agreement—Termination by Bard or
SenoRx” above and before the stockholders meeting, an acquisition proposal
has been made (other than by Bard, Merger Sub or their respective
affiliates) directly to the holders of SenoRx common shares or has
otherwise been publicly known and such acquisition proposal had not been
withdrawn at the time of the stockholders meeting, and at any time within
twelve months after such termination, either SenoRx has entered into a
definitive contract relating to any acquisition proposal or a transaction
contemplated by an acquisition proposal has been consummated (for purposes
of this provision, the definition of acquisition proposal will be read
such that all references to “20% or more” will be deemed references to
“more than 50%”);
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·
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if
the merger agreement is terminated by Bard pursuant to the provision
described in the second bullet point under the heading “Termination of the
Merger Agreement—Termination by Bard”
above;
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·
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if
the merger agreement is terminated by SenoRx pursuant to the provision
described in the second bullet point under the heading “Termination of the
Merger Agreement—Termination by SenoRx” above;
or
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·
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if
the merger agreement is terminated by Bard pursuant to the provision
described in the first bullet point under the heading “Termination of the
Merger Agreement—Termination by Bard” above based on a breach of any
covenant or agreement of SenoRx set forth in the merger agreement (but
excluding any breach of representations or warranties) and before such
termination an acquisition proposal has been made (other than by Bard,
Merger Sub or their respective affiliates) directly to the holders of
SenoRx common shares or has otherwise been publicly known and such
acquisition proposal had not been withdrawn at the time of such
termination, and at any time within twelve months after such termination,
either SenoRx has entered into a definitive contract relating to any
acquisition proposal or a transaction contemplated by an acquisition
proposal has been consummated (for purposes of this provision, the
definition of acquisition proposal will be read such that all references
to “20% or more” will be deemed references to “more than
50%”).
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Under the
merger agreement, Bard is required to pay SenoRx a termination fee of $9 million
if the merger agreement is terminated by Bard pursuant to the provision
described in clause (i) of the third bullet point under the heading “Termination
of the Merger Agreement—Termination by Bard” above. SenoRx has
expressly waived the right to contest Bard’s opinion that the quality issues
referenced in the applicable warning letter, or similar written notice, or
correspondence from the FDA or any other governmental authority regulating
medical devices that SenoRx receives would reasonably be expected to materially
impair, or lead to actions that materially impair, the business of
SenoRx.
In
addition, if the merger agreement is terminated by Bard pursuant to the
provision described in the first bullet point under the heading “Termination of
the Merger Agreement—Termination by Bard” above based on a breach of any
covenant or agreement of SenoRx set forth in the merger agreement (but excluding
any breach of representations or warranties), SenoRx will reimburse Bard for the
transaction expenses of Bard and Merger Sub. Such payment will be credited
against any termination fee that becomes payable by SenoRx under the merger
agreement. Likewise, if the merger agreement is terminated by SenoRx pursuant to
the provision described in the first bullet point under the heading “Termination
of the Merger Agreement—Termination by SenoRx” above based on a breach of any
covenant or agreement of Bard or Merger Sub set forth in the merger agreement
(but excluding any breach of representations or warranties), Bard will reimburse
SenoRx for the transaction expenses of SenoRx.
The
parties acknowledged in the merger agreement that the agreements concerning
termination fees and expenses are an integral part of the merger and any other
transactions contemplated by the merger agreement and constitute liquidated
damages and not a penalty. Notwithstanding any other provision in the
merger agreement to the contrary, the parties agreed that (i) if Bard receives
the termination fee from SenoRx as contemplated by the merger agreement (subject
to certain rights set forth in the merger agreement, including Bard’s right to
specifically enforce the merger agreement as set forth in the merger agreement),
such termination fee represents the exclusive remedy of Bard and Merger Sub in
the circumstances described therein and that, except for the payment expressly
set forth in the circumstances described therein, none of SenoRx or any of its
respective affiliates will have any liability or obligation of any kind
whatsoever arising out of such termination of the merger agreement, any breach
by SenoRx giving rise to such termination, or the failure of the merger or any
other transactions contemplated by the merger agreement to be consummated as a
result of such termination, whether arising in contract, tort, equity or
otherwise, and (ii) if SenoRx receives the reverse termination fee from Bard,
such reverse termination fee represents the exclusive remedy of SenoRx for a
valid termination by Bard pursuant to the provision described in clause (i) of
the third bullet point under the heading “Termination of the Merger
Agreement—Termination by Bard” above and that, except for the payment of the
termination fee, none of Bard or any of its respective affiliates will have any
liability or obligation of any kind whatsoever arising out of such termination
of the merger agreement, any breach by Bard giving rise to such termination, or
the failure of the merger or any other transactions contemplated by the merger
agreement to be consummated as a result of such termination, whether arising in
contract, equity, tort or otherwise.
Except as
expressly set forth in the merger agreement and described above, all fees, costs
and expenses incurred in connection with the merger agreement and the merger
will be paid by the party incurring such fees, costs and expenses, whether or
not the merger is consummated.
Amendment
Subject
to compliance with applicable law, the merger agreement may be amended by the
parties at any time before or after obtaining the approval of the majority of
the holders of the outstanding shares of SenoRx common stock to adopt the merger
agreement. However, after such approval, there may not be, without
further approval of the SenoRx stockholders, any amendment of the merger
agreement that changes the amount or the form of the consideration to be
delivered to SenoRx stockholders pursuant to the merger agreement, or which by
applicable law otherwise requires the further approval of SenoRx’s stockholders.
In addition, the provisions of the merger agreement concerning director and
officer indemnification may not be amended after the closing without the prior
written agreement of each party entitled to indemnification thereunder. The
merger agreement may not be amended except by an instrument in writing signed on
behalf of each of the parties to the merger agreement.
No
Third Party Beneficiaries
The
merger agreement does not confer upon any person other than the parties thereto
any rights or remedies, except for the provisions concerning director and
officer indemnification.
Remedies
The
parties acknowledge in the merger agreement that if for any reason any of the
provisions of the merger agreement are not performed in accordance with their
specific terms or are otherwise breached, immediate and irreparable harm or
injury would be caused for which money damages would not be an adequate
remedy. Accordingly, the parties agreed that in addition to other remedies
available to them, the parties will be entitled to seek specific performance of
the terms of the merger agreement. In the event that any action is brought
in equity to enforce the provisions of the merger agreement no party may allege,
and each party has waived the defense, that there is an adequate remedy at
law. Except as otherwise provided in the merger agreement, any and all
remedies expressly conferred upon a party will be deemed cumulative with and not
exclusive of any other remedy conferred by the merger agreement, or by law or
equity upon such party, and the exercise by a party of any one remedy will not
preclude the exercise of any other remedy. The provision just described is
limited by the parties’ agreement that if the merger agreement is validly
terminated by Bard pursuant to the provision described in clause (i) of the
third bullet point under the heading “Termination of the Merger
Agreement—Termination by Bard” above, SenoRx will not be entitled to seek
specific performance of the merger agreement.
SUBMISSION
OF STOCKHOLDER PROPOSALS
If the
merger is consummated, we will not have public stockholders and there will be no
public participation in any future meetings of stockholders. However,
if the merger is not consummated, we expect to hold the 2011 annual meeting of
stockholders.
For a
stockholder proposal to be considered for inclusion in SenoRx’s proxy statement
for our 2011 annual meeting of stockholders, the written proposal must be
received by the Secretary of SenoRx no earlier than February 1, 2011
and not later than March 15, 2011. The proposal will need to
comply with Rule 14a-8 of Exchange Act, which lists the requirements for
the inclusion of stockholder proposals in company-sponsored proxy materials. If
the date of next year’s annual meeting is moved more than 30 days before or
after the anniversary date of this year’s annual meeting, the deadline for
inclusion of proposals in our proxy statement will instead be a reasonable time
before we begin to print and mail next year’s proxy materials.
Unless we
indicate otherwise at a later date, in order for a stockholder proposal to be
raised from the floor during the 2011 annual meeting of stockholders, the
stockholder’s written notice must be received by our Secretary at our principal
executive offices no later than the close of business on February 6, 2011 and no
earlier than the close of business on January 7, 2011, and must contain certain
information as required under our bylaws. You may contact our Investor Relations
department at our headquarters for a copy of the relevant provisions of our
bylaws regarding the requirements for making stockholder proposals. Please note
that these requirements relate only to matters a stockholder wishes to bring
before next year’s annual meeting and that are not to be included in the proxy
statement for next year’s annual meeting.
You may
nominate an individual to serve as a director by following the procedures set
forth in our bylaws, which include sending a written notice setting forth all
the information that is required to be disclosed in solicitations of proxies for
election of directors or is otherwise required pursuant to Regulation 14A
under the Exchange Act to SenoRx, Inc., 3 Morgan, Irvine, California,
92618-1917, Attn: Secretary. In addition, the notice must contain certain other
information as required under our bylaws. In order to be considered for the 2011
annual meeting, your nomination must be received no later than the close of
business on February 6, 2011 and no earlier than the close of business on
January 7, 2011.
HOUSEHOLDING OF SPECIAL MEETING
MATERIALS
Some
brokers, banks, trusts and other nominees may be participating in the practice
of “householding” proxy statements and annual reports. This means that only one
copy of this notice and proxy statement may have been sent to multiple
stockholders in your household. If you would prefer to receive separate copies
of a proxy statement or annual report either now or in the future, please
(1) mail your request to SenoRx, Inc., 3 Morgan, Irvine, California,
92618-1917, Attn: Investor Relations, or (2) call our Investor Relations
department at +1 (949) 362-4800 x132. Upon written or oral request, we will
provide a separate copy of the annual reports and proxy statements. In addition,
security holders sharing an address can request delivery of a single copy of
annual reports or proxy statements if you are receiving multiple copies upon
written or oral request at the address and telephone number stated
above.
APPRAISAL
RIGHTS
Under the
DGCL, you have the right to dissent from the merger and to receive payment in
cash for the fair value of your shares of SenoRx common stock as determined by
the Delaware Court of Chancery, together with interest, if any, as determined by
the court, in lieu of the consideration you would otherwise be entitled to
pursuant to the merger agreement. These rights are known as appraisal
rights. Stockholders electing to exercise appraisal rights must
comply with the provisions of Section 262 of the DGCL in order to perfect
their rights. We will require strict compliance with the statutory
procedures.
The
following is intended as a brief summary of the material provisions of the
Delaware statutory procedures required to be followed by a stockholder in order
to dissent from the merger and perfect appraisal rights.
This
summary, however, is not a complete statement of all applicable requirements and
is qualified in its entirety by reference to Section 262 of the DGCL, the
full text of which appears in Annex D to this proxy
statement. Failure to precisely follow any of the statutory
procedures set forth in Section 262 the DGCL may result in a termination or
waiver of your appraisal rights. All references in this summary to a
“stockholder” are to the record holder of shares of SenoRx common stock unless
otherwise indicated.
Section 262
requires that stockholders for whom appraisal rights are available be notified
not less than 20 days before the stockholders’ meeting to vote on the merger
that appraisal rights will be available. A copy of Section 262
must be included with such notice. This proxy statement constitutes
our notice to SenoRx’s stockholders of the availability of appraisal rights in
connection with the merger in compliance with the requirements of
Section 262. If you wish to consider exercising your appraisal
rights, you should carefully review the text of Section 262 contained in
Annex D to this proxy statement since failure to timely and properly comply
with the requirements of Section 262 will result in the loss of your
appraisal rights under Delaware law.
If you
elect to demand appraisal of your shares, you must satisfy each of the following
conditions:
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You
must deliver to us a written demand for appraisal of your shares before
the vote with respect to the merger is taken. This written
demand for appraisal must be in addition to and separate from any proxy or
vote abstaining from or voting against the adoption and approval of the
merger agreement and the merger. Voting against or failing to
vote for the adoption and approval of the merger agreement and the merger
by itself does not constitute a demand for appraisal within the meaning of
Section 262;
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You
must not vote in favor of, or consent in writing to, the adoption and
approval of the merger agreement and the merger. A vote in
favor of the adoption and approval of the merger agreement and merger, by
proxy, via the Internet, by telephone or in person, will constitute a
waiver of your appraisal rights in respect of the shares so voted and will
nullify any previously filed written demands for appraisal. A
proxy which does not contain voting instructions will, unless revoked, be
voted in favor of the adoption and approval of the merger agreement and
the merger. Therefore, a stockholder who votes by proxy and who
wishes to exercise appraisal rights must vote against the merger agreement
and the merger or abstain from voting on the merger agreement and the
merger; and
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·
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You
must continue to hold your shares of SenoRx common stock through the
effective date of the merger. Therefore, a stockholder who is
the record holder of shares of SenoRx common stock on the date the written
demand for appraisal is made but who thereafter transfers the shares
before the effective date of the merger will lose any right to appraisal
with respect to such shares.
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If you
fail to comply with any of these conditions and the merger is completed, you
will be entitled to receive the merger consideration, but you will have no
appraisal rights with respect to your shares of SenoRx common
stock.
All
demands for appraisal should be addressed to SenoRx, Inc., 3 Morgan, Irvine,
California 92618-1917, Attn: Secretary, and must be delivered before the vote on
the merger agreement is taken at the special meeting and should be executed by,
or on behalf of, the record holder of the shares of common stock. The
demand must reasonably inform us of the identity of the stockholder and the
intention of the stockholder to demand appraisal of his, her or its
shares.
To be
effective, a demand for appraisal by a holder of common stock must be made by,
or in the name of, such registered stockholder, fully and correctly, as the
stockholder’s name appears on his or her stock
certificate(s). Beneficial owners who do not also hold the shares of
record may not directly make appraisal demands to us. The beneficial
holder must, in such cases, have the registered owner, such as a brokerage firm,
bank, trust or other nominee, submit the required demand in respect of those
shares. If shares are owned of record in a fiduciary capacity, such
as by a trustee, guardian or custodian, execution of a demand for appraisal
should be made by or for the fiduciary; and if the shares are owned of record by
more than one person, as in a joint tenancy or tenancy in common, the demand
should be executed by or for all joint owners. An authorized agent,
including an authorized agent for two or more joint owners, may execute the
demand for appraisal for a stockholder of record; however, the agent must
identify the record owner or owners and expressly disclose the fact that, in
executing the demand, he or she is acting as agent for the record
owner. A record owner, such as a broker, who holds shares as a
nominee for others, may exercise his or her right of appraisal with respect to
the shares held for one or more beneficial owners, while not exercising this
right for other beneficial owners. In that case, the written demand
should state the number of shares as to which appraisal is
sought. Where no number of shares is expressly mentioned, the demand
will be presumed to cover all shares held in the name of the record
owner.
If you
hold your shares of common stock in a brokerage account or in other nominee form
and you wish to exercise appraisal rights, you should consult with your broker
or the other nominee to determine the appropriate procedures for the making of a
demand for appraisal by the nominee.
Within 10
days after the effective time of the merger, the surviving corporation must give
written notice that the merger has become effective to each stockholder who has
properly filed a written demand for appraisal and who did not vote in favor of
the merger agreement and the merger. At any time within 60 days after
the effective time, any stockholder who has demanded an appraisal, and who has
not commenced an appraisal proceeding or joined that proceeding as a named
party, has the right to withdraw the demand and to accept the cash payment
specified by the merger agreement for his or her shares of common stock; after
this period, the stockholder may withdraw such demand for appraisal only with
the consent of the surviving corporation. Within 120 days after the
effective date of the merger, any stockholder who has complied with
Section 262 will, upon written request to the surviving corporation, be
entitled to receive a written statement setting forth the aggregate number of
shares not voted in favor of the merger agreement and the merger and with
respect to which demands for appraisal rights have been received and the
aggregate number of holders of such shares. A person who is the
beneficial owner of shares of common stock held in a voting trust or by a
nominee on behalf of such person may, in such person’s own name, request from
the corporation the statement described in the previous
sentence. Such written statement will be mailed to the requesting
stockholder within 10 days after such written request is received by the
surviving corporation or within 10 days after expiration of the period for
delivery of demands for appraisal, whichever is later. Within 120
days after the effective time, either the surviving corporation or any
stockholder who has complied with the requirements of Section 262 and who
is otherwise entitled to appraisal rights may file a petition in the Delaware
Court of Chancery demanding a determination of the fair value of the shares held
by all stockholders entitled to appraisal. A person who is the
beneficial owner of shares of SenoRx common stock held in a voting trust or by a
nominee on behalf of such person may, in such person’s own name, file the
petition described in the previous sentence. Upon the filing of the
petition by a stockholder, service of a copy of such petition shall be made upon
SenoRx, as the surviving corporation. The surviving corporation has
no obligation to file such a petition in the event there are dissenting
stockholders. Accordingly, the failure of a stockholder to file such
a petition within the period specified could nullify the stockholder’s
previously written demand for appraisal. There is no present intent
on the part of SenoRx to file an appraisal petition, and stockholders seeking to
exercise appraisal rights should not assume that SenoRx will file such a
petition or that SenoRx will initiate any negotiations with respect to the fair
value of such shares. Accordingly, stockholders who desire to have
their shares appraised should initiate any petitions necessary for the
perfection of their appraisal rights within the time periods and in the manner
prescribed in Section 262.
If a
petition for appraisal is duly filed by a stockholder and a copy of the petition
is delivered to the surviving corporation, the surviving corporation will then
be obligated, within 20 days after receiving service of a copy of the petition,
to provide the Delaware Court of Chancery with a duly verified list containing
the names and addresses of all stockholders who have demanded an appraisal of
their shares and with whom agreements as to the value of their shares have not
been reached by the surviving corporation. After notice to dissenting
stockholders who demanded appraisal of their shares, the Delaware Court of
Chancery is empowered to conduct a hearing upon the petition, and to determine
those stockholders who have complied with Section 262 and who have become
entitled to the appraisal rights provided thereby. The Delaware Court
of Chancery may require the stockholders who have demanded appraisal for their
shares to submit their stock certificates to the Register in Chancery for
notation thereon of the pendency of the appraisal proceedings; and if any
stockholder fails to comply with that direction, the Delaware Court of Chancery
may dismiss the proceedings as to that stockholder.
After
determination of the stockholders entitled to appraisal of their shares of
common stock, the Delaware Court of Chancery will appraise the shares,
determining their fair value exclusive of any element of value arising from the
accomplishment or expectation of the merger, together with interest, if
any. Unless the Delaware Court of Chancery in its discretion
determines otherwise for good cause shown, interest from the effective date of
the merger through the date of payment of the judgment shall be compounded
quarterly and shall accrue at 5% over the Federal Reserve discount rate
(including any surcharge) as established from time to time during the period
between the effective date of the merger and the date of payment of the
judgment. When the value is determined, the Delaware Court of
Chancery will direct the payment of such value, with interest thereon accrued
during the pendency of the proceeding, if the Delaware Court of Chancery so
determines, to the stockholders entitled to receive the same, upon surrender by
such holders of the certificates representing those shares.
In
determining fair value and, if applicable, interest, the Delaware Court of
Chancery is required to take into account all relevant factors. In
Weinberger v. UOP, Inc., the Delaware Supreme Court discussed the factors
that could be considered in determining fair value in an appraisal proceeding,
stating that “proof of value by any techniques or methods which are generally
considered acceptable in the financial community and otherwise admissible in
court” should be considered, and that “fair price obviously requires
consideration of all relevant factors involving the value of a
company.”
Section 262
provides that fair value is to be “exclusive of any element of value arising
from the accomplishment or expectation of the merger.” In
Cede & Co. v. Technicolor, Inc., the Delaware Supreme Court stated
that such exclusion is a “narrow exclusion [that] does not encompass known
elements of value,” but which rather applies only to the speculative elements of
value arising from such accomplishment or expectation. In Weinberger,
the Delaware Supreme Court construed Section 262 to mean that “elements of
future value, including the nature of the enterprise, which are known or
susceptible of proof as of the date of the merger and not the product of
speculation, may be considered.”
You
should be aware that the fair value of your shares as determined under
Section 262 could be more than, the same as, or less than the value that
you are entitled to receive under the terms of the merger
agreement.
Costs of
the appraisal proceeding may be imposed upon the surviving corporation and the
stockholders participating in the appraisal proceeding by the Delaware Court of
Chancery as the Court deems equitable in the circumstances. Upon the
application of a stockholder, the Delaware Court of Chancery may order all or a
portion of the expenses incurred by any stockholder in connection with the
appraisal proceeding, including, without limitation, reasonable attorneys’ fees
and the fees and expenses of experts, to be charged pro rata against the value
of all shares entitled to appraisal. Any stockholder who had demanded
appraisal rights will not, after the effective time of the merger, be entitled
to vote shares subject to that demand for any purpose or to receive payments of
dividends or any other distribution with respect to those shares, other than
with respect to payment as of a record date before the effective time; however,
if no petition for appraisal is filed within 120 days after the effective time
of the merger, or if the stockholder delivers a written withdrawal of his or her
demand for appraisal and an acceptance of the terms of the merger within 60 days
after the effective time of the merger, then the right of that stockholder to
appraisal will cease and that stockholder will be entitled to receive the cash
payment for shares of his, her or its shares of SenoRx common stock pursuant to
the merger agreement. No appraisal proceeding in the Delaware Court of Chancery
will be dismissed as to any stockholder without the prior approval of the Court,
and such approval may be conditioned upon such terms as the Delaware Court of
Chancery deems just; provided, however, that any stockholder who has not
commenced an appraisal proceeding or joined that proceeding as a named party
will maintain the right to withdraw its demand for appraisal and to accept the
cash that such holder would have received pursuant to the merger agreement
within 60 days after the effective date of the merger.
In view
of the complexity of Section 262, stockholders who may wish to dissent from
the merger and pursue appraisal rights should consult their legal
advisors.
CURRENT
MARKET PRICE OF COMMON STOCK
We did
not pay or declare cash dividends in fiscal year 2008, fiscal year 2009 or
fiscal year 2010 to date, and we do not currently anticipate paying any cash
dividends in the foreseeable future.
SenoRx
common stock is traded on The NASDAQ Global Market under the symbol
“SENO.” The following table sets forth the high and low sales prices
of SenoRx common stock for the periods indicated as reported by The NASDAQ
Global Market:
|
|
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Common
Stock Price
|
|
|
|
|
|
|
|
|
|
|
Fiscal
Year 2007
|
|
|
|
|
|
|
|
First
Quarter: January 1 – March 31
|
|
$
|
8.47
|
|
|
$
|
8.03
|
|
|
Second
Quarter: April 1 – June 30
|
|
$
|
10.85
|
|
|
$
|
7.95
|
|
|
Third
Quarter: July 1 – September 30
|
|
$
|
10.55
|
|
|
$
|
7.94
|
|
|
Fourth
Quarter: October 1 – December 31
|
|
$
|
9.67
|
|
|
$
|
8.00
|
|
|
Fiscal
Year 2008
|
|
|
|
|
|
|
|
|
|
First
Quarter: January 1 – March 31
|
|
$
|
9.06
|
|
|
$
|
6.08
|
|
|
Second
Quarter: April 1 – June 30
|
|
$
|
7.75
|
|
|
$
|
5.45
|
|
|
Third
Quarter: July 1 – September 30
|
|
$
|
7.80
|
|
|
$
|
4.66
|
|
|
Fourth
Quarter: October 1 – December 31
|
|
$
|
5.00
|
|
|
$
|
2.14
|
|
|
Fiscal
Year 2009
|
|
|
|
|
|
|
|
|
|
First
Quarter: January 1 – March 31
|
|
$
|
3.50
|
|
|
$
|
2.40
|
|
|
Second
Quarter: April 1 – June 30
|
|
$
|
3.71
|
|
|
$
|
2.90
|
|
|
Third
Quarter: July 1 – September 30
|
|
$
|
5.40
|
|
|
$
|
3.28
|
|
|
Fourth
Quarter: October 1 – December 31
|
|
$
|
8.10
|
|
|
$
|
3.85
|
|
|
Fiscal
Year 2010
|
|
|
|
|
|
|
|
|
|
First
Quarter: January 1 – March 31
|
|
$
|
8.24
|
|
|
$
|
6.57
|
|
|
Second
Quarter: April 1 – June 30 (through May 20, 2010)
|
|
$
|
11.03
|
|
|
$
|
7.28
|
|
The
following table sets forth the closing price of our common stock, as reported on
The NASDAQ Global Market on May 4, 2010, the last full trading day before we
publicly announced the signed merger agreement with Bard, and on May 20, 2010,
the last full trading day before the filing of this proxy
statement:
|
|
|
|
|
|
May
4, 2010
|
|
$
|
9.68
|
|
|
May
20, 2010
|
|
$
|
10.84
|
|
You are
encouraged to obtain current market quotations for SenoRx common stock in
connection with voting your shares. Following the merger, there will
be no further market for our common stock.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table provides information relating to the beneficial ownership of
SenoRx common stock as of May 20, 2010, except where otherwise noted,
by:
|
·
|
each
stockholder known by us to own beneficially more than 5% of our common
stock;
|
|
·
|
each
of our named executive officers (as defined in Item 402 of Regulation S-K
promulgated by the SEC);
|
|
·
|
each
of our directors; and
|
|
·
|
all
of our directors and executive officers as a
group.
|
The
number of shares beneficially owned by each entity, person, director or
executive officer is determined in accordance with the rules of the SEC, and the
information is not necessarily indicative of beneficial ownership for any other
purpose. Under such rules, beneficial ownership includes any shares over which
the individual has the sole voting power, shared voting power, or investment
power and includes any shares that the individual has the right to acquire
within 60 days of May 20, 2010 through the exercise of any stock
option or other right. The number and percentage of shares “beneficially owned”
is computed on the basis of 17,641,274 shares of SenoRx common stock
outstanding as of May 20, 2010. Shares of our common stock that a person has the
right to acquire within 60 days of May 20, 2010 are deemed outstanding for
purposes of computing the percentage ownership of the person holding such
rights, but are not deemed outstanding for purposes of computing the percentage
ownership of any other person, except with respect to the percentage ownership
of all directors and executive officers as a group. To our knowledge, except as
set forth in the footnotes to this table and subject to applicable community
property laws, each person or entity named in the table has sole voting and
dispositive power with respect to the shares set forth opposite such person’s or
entity’s name. The address for those persons for whom an address is not
otherwise provided is c/o SenoRx, Inc., 3 Morgan, Irvine, California
92618-1917.
|
|
|
|
|
Percentage
of Shares Outstanding
|
Name
and Address of Beneficial Owner
|
|
|
|
Options
and Warrants Exercisable Within 60 Days
|
|
Approximate
Percentage Owned (1)
|
|
Funds
affiliated with MPM Capital
The
John Hancock Tower
200
Clarendon Street, 54th Floor
Boston,
MA 02116
|
|
2,242,379
|
(2)
|
|
––
|
|
|
12.7%
|
|
Funds
affiliated with Wells Fargo & Company
420
Montgomery Street
San
Francisco, CA 94163
|
|
1,491,225
|
|
|
—
|
|
|
8.5%
|
|
C.
R. Bard, Inc.
730
Central Avenue
Murray
Hill, New Jersey 07974
|
|
963,475
|
(3)
|
|
—
|
|
|
5.5%
|
|
Funds
affiliated with Royce & Associates, LLC
745
Fifth Avenue
New
York, NY 10151
|
|
934,900
|
|
|
—
|
|
|
5.3%
|
|
Funds
affiliated with Vertical Fund I, L.P.
530
Lytton Avenue, Suite 304
Palo
Alto, CA 94301
|
|
1,087,200
|
(4)
|
|
—
|
|
|
6.2%
|
|
John
T. Buhler
|
|
7,130
|
|
|
137,506
|
|
|
*
|
|
Kevin
J. Cousins
|
|
53,582
|
|
|
118,818
|
|
|
1.0%
|
|
Paul
Lubock
|
|
195,397
|
|
|
103,407
|
|
|
1.7%
|
|
William
F. Gearhart
|
|
34,516
|
|
|
138,947
|
|
|
1.0%
|
|
A.
Thomas Bender
|
|
36,000
|
|
|
20,110
|
|
|
*
|
|
Kim
D. Blickenstaff
|
|
—
|
|
|
57,289
|
|
|
*
|
|
Vickie
L. Capps
|
|
15,000
|
|
|
30,540
|
|
|
*
|
|
Frederick
J. Dotzler
|
|
739,515
|
(5)
|
|
37,290
|
|
|
4.4%
|
|
John
L. Erb
|
|
10,000
|
|
|
57,289
|
|
|
*
|
|
Gregory
D. Waller
|
|
—
|
|
|
48,718
|
|
|
*
|
|
All
directors and named executive officers as a group (10
persons)
|
|
1,091,140
|
|
|
749,914
|
|
|
9.6%
|
_______________________________
|
*
|
Represents
beneficial ownership of less than one percent (1%) of the outstanding
shares of our common stock.
|
|
(1)
|
Based
upon 17,641,274 shares of common stock outstanding as of May 20,
2010.
|
|
(2)
|
Includes
1,511,814 shares held by MPM BioVentures II-QP, L.P. (“BV II QP”), 166,833
shares held by MPM BioVentures II, L.P. (“BV II”), 31,392 shares held by
MPM Asset Management Investors 2001 LLC (“AM 2001”) and 532,340 shares
held by MPM BioVentures GmbH & Co. Parallel-Beteiligungs KG (“BV
KG”). MPM Asset Management II, L.P. and MPM Asset Management II LLC (“AM
II LLC”) are the direct and indirect general partners of BV II QP, BV II
and BV KG. Ansbert Gadicke, Luke Evnin, Nicholas Galakatos, Michael
Steinmetz and Kurt Wheeler are members of AM II LLC and AM 2001. Each
individual disclaims beneficial ownership of all such shares, except to
the extent of his proportionate pecuniary interest
therein.
|
|
(3)
|
By
virtue of the voting and support agreement entered into between Bard,
SenoRx and certain stockholders (including executive officers and
directors of SenoRx), Bard may be deemed to have acquired beneficial
ownership of 963,475 shares of common stock currently owned in the
aggregate by those stockholders. Bard expressly disclaims beneficial
ownership of such shares.
|
|
(4)
|
Includes
723,900 shares held by Vertical Fund I, L.P. (“VF I”), 182,100 shares held
by Vertical Fund II, L.P. (“VF II”), and 181,000 shares held by Stephen D.
Baksa. The sole general partner of VFI and VFII is The Vertical Group,
L.P., a Delaware limited partnership (“Vertical”), and Mr. Baksa is a
managing member of the limited liability company that controls Vertical,
and VFI, VFII and Mr. Baksa may be deemed to constitute a “group” as
such term is used in Section 13(d)(3) of the Exchange
Act. Mr. Baksa disclaims beneficial ownership of the
shares owned by VFI and VFII, except to the extent of his indirect
pecuniary interest therein.
|
|
(5)
|
Includes
570,423 shares held by De Novo (Q) Ventures I, L.P. and 112,872 shares
held by De Novo Ventures I, L.P. De Novo Management, L.L.C. is the general
partner of De Novo (Q) Ventures I, L.P. and De Novo Ventures I, L.P.
Frederick Dotzler, David Mauney, Richard Ferrari and Jay Watkins are
managing directors of De Novo Management, L.L.C. and share voting and
investment power with respect to shares held by De Novo (Q) Ventures I,
L.P. and De Novo Ventures I, L.P. Each managing director disclaims
beneficial ownership of these shares, except to the extent of his
pecuniary interest therein.
|
WHERE
YOU CAN FIND MORE INFORMATION
We file
annual, quarterly and current reports, proxy statements and other information
with the SEC. You may read and copy any document we file at the SEC’s
public reference room located at 100 F Street, N.E., Room 1580, Washington, D.C.
20549. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference room. Our SEC filings are also available to
the public at the SEC’s website at http://www.sec.gov. You also may
obtain free copies of the documents we file with the SEC by going to our
Investor Relations page on our corporate web site at www.SenoRxinc.com (click on
“Investors”, then on “SEC Filings”). Our website address is provided
as an inactive textual reference only. The information provided on
our website is not part of this proxy statement, and therefore is not
incorporated herein by reference.
Statements
contained in this proxy statement, or in any document incorporated by reference
in this proxy statement regarding the contents of any contract or other
document, are not necessarily complete and each such statement is qualified in
its entirety by reference to that contract or other document filed as an exhibit
with the SEC. The SEC allows us to “incorporate by reference” into
this proxy statement documents we file with the SEC. This means that
we can disclose important information to you by referring you to those
documents. The information incorporated by reference is considered to
be a part of this proxy statement, and later information that we file with the
SEC will update and supersede that information. We incorporate by
reference the documents listed below and any documents filed by us pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of
this proxy statement and before the date of the special meeting:
|
·
|
Annual
Report on Form 10-K for the fiscal year ended December 31, 2009
(filed on March 16, 2010).
|
|
·
|
Quarterly
Report filed on Form 10-Q for the fiscal quarter ended March 31,
2010 (filed on May 11, 2010).
|
Any
person, including any beneficial owner, to whom this proxy statement is
delivered may request copies of proxy statements and any of the documents
incorporated by reference in this document or other information concerning us,
without charge, by contacting Investor Relations by telephone at +1 (949)
362-4800 x132, by mail at SenoRx, Inc., 3 Morgan, Irvine, California,
92618-1917, Attn: Investor Relations, by e-mail at
lchurney@senorx.com Documents incorporated by reference are available
without charge, excluding any exhibits to those documents unless the exhibit is
specifically incorporated by reference into those documents.
THIS
PROXY STATEMENT DOES NOT CONSTITUTE THE SOLICITATION OF A PROXY IN ANY
JURISDICTION TO OR FROM ANY PERSON TO WHOM OR FROM WHOM IT IS UNLAWFUL TO MAKE
SUCH PROXY SOLICITATION IN THAT JURISDICTION. YOU SHOULD RELY ONLY ON
THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROXY STATEMENT
TO VOTE YOUR SHARES AT THE SPECIAL MEETING. WE HAVE NOT AUTHORIZED
ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT FROM WHAT IS CONTAINED
IN THIS PROXY STATEMENT. THIS PROXY STATEMENT IS DATED
[_________ __], 2010. YOU SHOULD NOT ASSUME THAT THE INFORMATION
CONTAINED IN THIS PROXY STATEMENT IS ACCURATE AS OF ANY DATE OTHER THAN THAT
DATE, AND THE MAILING OF THIS PROXY STATEMENT TO STOCKHOLDERS DOES NOT CREATE
ANY IMPLICATION TO THE CONTRARY.
Annex
A
AGREEMENT
AND PLAN OF MERGER
dated
as of May 4, 2010
by
and among
SENORX,
INC.,
C.
R. BARD, INC.
and
RAPTOR
ACQUISITION CORP.
|
ARTICLE
1
|
THE
MERGER
|
A-2
|
|
|
1.01
|
The
Merger
|
|
|
|
1.02
|
Effective
Time
|
|
|
|
1.03
|
Effects
of the Merger
|
|
|
|
1.04
|
Certificate
of Incorporation and Bylaws of the Surviving Corporation
|
A-3
|
|
|
1.05
|
Directors
and Officers
|
A-3
|
|
|
1.06
|
Closing
|
A-3
|
|
|
|
|
|
|
ARTICLE
2
|
EFFECT
OF THE MERGER ON THE CAPITAL STOCK OF THE COMPANY AND MERGER
SUB
|
A-3
|
|
|
2.01
|
Effect
on Shares of Capital Stock
|
A-3
|
|
|
2.02
|
Equity
Awards
|
A-5
|
|
|
2.03
|
Payment
for Common Shares in the Merger
|
A-8
|
|
|
|
|
|
|
ARTICLE
3
|
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
|
A-10
|
|
|
3.01
|
Organization
and Qualification
|
A-11
|
|
|
3.02
|
Charter
Documents and Bylaws
|
A-12
|
|
|
3.03
|
Capitalization
|
A-12
|
|
|
3.04
|
Authority
Relative to this Agreement
|
A-13
|
|
|
3.05
|
Company
Subsidiaries
|
A-13
|
|
|
3.06
|
No
Violation; Required Filings and Consents
|
A-14
|
|
|
3.07
|
SEC
Reports; Financial Statements; Internal Controls
|
A-15
|
|
|
3.08
|
Compliance
with Applicable Laws
|
A-17
|
|
|
3.09
|
Absence
of Certain Changes or Events
|
A-17
|
|
|
3.10
|
Litigation
|
A-17
|
|
|
3.11
|
Information
in Proxy Statement and Other Disclosure Documents
|
A-18
|
|
|
3.12
|
Benefit
Plans
|
A-18
|
|
|
3.13
|
Taxes
|
A-21
|
|
|
3.14
|
Intellectual
Property
|
A-22
|
|
|
3.15
|
Licenses
and Permits
|
A-25
|
|
|
3.16
|
Material
Contracts
|
A-25
|
|
|
3.17
|
Environmental
Laws
|
A-28
|
|
|
3.18
|
State
Takeover Statutes
|
A-29
|
|
|
3.19
|
Opinion
of Financial Advisor
|
A-29
|
|
|
3.20
|
Brokers
|
A-29
|
|
|
3.21
|
Related
Party Transactions
|
A-29
|
|
|
3.22
|
Properties
and Assets
|
A-29
|
|
|
3.23
|
Labor
Matters
|
A-30
|
|
|
3.24
|
Regulatory
Matters
|
A-31
|
|
|
3.25
|
Insurance
|
A-34
|
|
|
3.26
|
Foreign
Corrupt Practices
|
A-34
|
|
|
3.27
|
Export
Controls
|
A-34
|
|
|
3.28
|
Sales
Tracings
|
A-35
|
TABLE
OF CONTENTS
(continued)
Page
|
ARTICLE
4
|
REPRESENTATIONS
AND WARRANTIES OF MERGER SUB AND PARENT
|
A-35
|
|
|
4.01
|
Organization
and Qualification
|
A-35
|
|
|
4.02
|
Charter
Documents and Bylaws
|
A-35
|
|
|
4.03
|
Authority
Relative to this Agreement
|
A-36
|
|
|
4.04
|
No
Violation; Required Filings and Consents
|
A-36
|
|
|
4.05
|
Financial
Capability
|
A-37
|
|
|
4.06
|
Brokers
|
A-37
|
|
|
4.07
|
Litigation
|
A-37
|
|
|
4.08
|
Information
in Proxy Statement
|
A-37
|
|
|
4.09
|
Ownership
of Common Shares
|
A-38
|
|
|
|
|
|
|
ARTICLE
5
|
COVENANTS
|
A-38
|
|
|
5.01
|
Interim
Operations.
|
A-38
|
|
|
5.02
|
Stockholders
Meeting; Preparation of Proxy Statement
|
A-42
|
|
|
5.03
|
Filings
and Consents
|
A-44
|
|
|
5.04
|
Access
to Information
|
A-45
|
|
|
5.05
|
Public
Announcements
|
A-46
|
|
|
5.06
|
Indemnification;
Directors’ and Officers’ Insurance
|
A-46
|
|
|
5.07
|
Further
Assurances; Commercially Reasonable Efforts
|
A-49
|
|
|
5.08
|
Third
Party Standstill Agreements
|
A-49
|
|
|
5.09
|
No
Solicitation
|
A-49
|
|
|
5.10
|
Termination
of Registration
|
A-52
|
|
|
5.11
|
Employment
Matters
|
A-53
|
|
|
5.12
|
Merger
Sub
|
A-54
|
|
|
5.13
|
Stockholder
Litigation
|
A-54
|
|
|
5.14
|
Section
16 Matters
|
A-54
|
|
|
5.15
|
State
Takeover Statutes
|
A-54
|
|
|
5.16
|
Notification
of Certain Matters
|
A-55
|
|
|
5.17
|
Retention
Agreements
|
A-55
|
|
|
5.18
|
Corrective
Action Plan
|
A-56
|
|
|
|
|
|
|
ARTICLE
6
|
CONDITIONS
TO CONSUMMATION OF THE MERGER
|
A-56
|
|
|
6.01
|
Conditions
to the Obligations of Each Party
|
A-56
|
|
|
6.02
|
Conditions
to Obligations of Merger Sub and Parent
|
A-56
|
|
|
6.03
|
Conditions
to Obligation of the Company
|
A-57
|
TABLE
OF CONTENTS
(continued)
Page
|
ARTICLE
7
|
TERMINATION
|
A-58
|
|
|
7.01
|
Termination
by Mutual Consent
|
A-58
|
|
|
7.02
|
Termination
by Parent or the Company
|
A-58
|
|
|
7.03
|
Termination
by Parent
|
A-59
|
|
|
7.04
|
Termination
by the Company
|
A-60
|
|
|
7.05
|
Effect
of Termination
|
A-60
|
|
|
|
|
|
|
ARTICLE
8
|
MISCELLANEOUS
|
A-60
|
|
|
8.01
|
Payment
of Fees and Expenses
|
A-60
|
|
|
8.02
|
No
Survival
|
A-63
|
|
|
8.03
|
Modification
or Amendment
|
A-63
|
|
|
8.04
|
Entire
Agreement; Assignment
|
A-63
|
|
|
8.05
|
Severability
|
A-64
|
|
|
8.06
|
Notices
|
A-64
|
|
|
8.07
|
Governing
Law
|
A-65
|
|
|
8.08
|
Interpretation
|
A-65
|
|
|
8.09
|
Counterparts
|
A-66
|
|
|
8.10
|
Certain
Definitions
|
A-66
|
|
|
8.11
|
Specific
Performance
|
A-68
|
|
|
8.12
|
Extension;
Waiver
|
A-68
|
|
|
8.13
|
Third
Party Beneficiaries
|
A-68
|
|
|
8.14
|
Submission
to Jurisdiction
|
A-69
|
TABLE
OF CONTENTS
(continued)
Page
EXHIBIT A
– VOTING AND SUPPORT AGREEMENT
AGREEMENT
AND PLAN OF MERGER
THIS
AGREEMENT AND PLAN OF MERGER (this “
Agreement
”),
dated as of May 4, 2010, is entered into by and among SENORX, INC., a Delaware
corporation (the “
Company
”),
C. R. BARD, INC., a New Jersey corporation (“
Parent
”)
and RAPTOR ACQUISITION CORP., a Delaware corporation indirectly wholly-owned by
Parent (“
Merger
Sub
”).
RECITALS
WHEREAS,
the board of directors of the Company (the “
Company
Board
”) has unanimously (i) determined that this Agreement and the
transactions contemplated by this Agreement (the “
Transactions
”)
are advisable, fair to and in the best interests of the Company and its
stockholders, (ii) adopted resolutions approving and declaring the advisability
of this Agreement and the Transactions, (iii) subject to the terms and
conditions set forth herein, resolved to recommend approval and adoption of this
Agreement by the stockholders of the Company and (iv) received a written opinion
of the Financial Advisor (as defined in
Section
3.19
) as set forth in
Section
3.19
herein;
WHEREAS,
the board of directors of each of Parent and Merger Sub has unanimously
(i) declared the advisability of this Agreement and (ii) approved this
Agreement and the Transactions;
WHEREAS,
a wholly-owned subsidiary of Parent has adopted this Agreement in its capacity
as the sole stockholder of Merger Sub;
WHEREAS,
the Company Board and the board of directors of Merger Sub have approved the
merger of Merger Sub with and into the Company, with the Company as the
surviving corporation, upon the terms and subject to the conditions set forth in
this Agreement and the Delaware General Corporation Law (the “
DGCL
”),
whereby (i) each issued and outstanding share of the common stock, par value
$0.001 per share of the Company (other than Common Shares to be canceled
pursuant to
Section
2.01(b)
and
Dissenting Shares (as defined in
Section
2.01(d)
)) (the “
Common
Shares
”), shall be converted into the right to receive the Merger
Consideration (as defined in
Section
2.01(a)
), (ii) each
Option (as defined in
Section
2.02(a)(i)
) shall be
converted into the right to receive the Option Consideration (as defined in
Section
2.02(a)(ii)
), (iii)
each share of Restricted Stock (as defined in
Section
2.02(b)
) shall be
converted into the right to receive the Restricted Stock Consideration (as
defined in
Section
2.02(b)
)
; (iv) each
Restricted Stock Unit (as defined in
Section
2.02(c)
) shall be
converted into the right to receive the RSU Consideration (as defined in
Section
2.02(c)
) and (v) each
Warrant (as defined in
Section
2.02(d)(i)
) shall be
converted into the right to receive the Warrant Consideration (as defined in
Section
2.02(d)(ii)
);
WHEREAS,
as a condition and inducement to Parent’s and Merger Sub’s willingness to enter
into this Agreement, simultaneously with the execution of this Agreement,
certain officers and stockholders of the Company listed on
Schedule I
hereto and
their respective affiliates are entering into a voting and support agreement
with Parent substantially in the form of
Exhibit A
attached
hereto (the “
Support
Agreement
”); and
WHEREAS,
the Company, Merger Sub, and Parent desire to make certain representations,
warranties, covenants and agreements in connection with the Merger, and also to
prescribe various conditions to the Merger.
NOW,
THEREFORE, in consideration of the foregoing and the respective representations,
warranties, covenants and agreements set forth herein, the parties hereto agree
as follows:
ARTICLE
1
THE
MERGER
1.01
The
Merger
.
At the Effective
Time (as defined in
Section
1.02
), subject to the
terms and conditions of this Agreement and in accordance with the relevant
provisions of the DGCL, Merger Sub shall be merged with and into the Company
(the “
Merger
”). Following
the Merger, the separate corporate existence of Merger Sub shall cease, and the
Company shall continue as the surviving corporation (sometimes hereinafter
referred to as the “
Surviving
Corporation
”) and shall continue to be governed by the Laws (as defined
in Section 3.06) of the State of Delaware.
1.02
Effective
Time
.
Subject to the
provisions of this Agreement, on the Closing Date, the Company shall file with
the Secretary of State of the State of Delaware a certificate of merger (the
“
Certificate of
Merger
”) executed in accordance with the relevant provisions of the
DGCL. The Merger shall become effective upon the filing of the
Certificate of Merger or at such later time as is agreed to by the parties
hereto and specified in the Certificate of Merger (the time at which the Merger
becomes effective is herein referred to as the “
Effective
Time
”).
1.03
Effects
of the Merger
.
The Merger shall
have the effects set forth herein, in the Certificate of Merger and in the
DGCL. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time, all the properties, rights, privileges, powers
and franchises of the Company and Merger Sub shall vest in the Surviving
Corporation, and all debts, liabilities and duties of the Company and Merger Sub
shall become the debts, liabilities and duties of the Surviving Corporation. At
and after the Effective Time, the officers and directors of the Surviving
Corporation shall be authorized to execute and deliver, in the name and on
behalf of the Company or Merger Sub, any deeds, bills of sale, assignments or
assurances and to take and do, in the name and on behalf of the Company or
Merger Sub, any other actions and things to vest, perfect or confirm of record
or otherwise in the Surviving Corporation any and all right, title and interest
in, to and under any of the rights, properties or assets of the Company and
Merger Sub.
1.04
Certificate
of Incorporation and Bylaws of the Surviving Corporation
.
(a) Subject
to the requirements of
Section
5.06
, at the
Effective Time, the certificate of incorporation of the Surviving Corporation
shall be amended and restated in its entirety to read as the certificate of
incorporation of Merger Sub, except that the name of the Surviving Corporation
shall not be amended and, as so amended and restated, shall be the certificate
of incorporation of the Surviving Corporation until thereafter further amended
as provided therein or by applicable Law.
(b) Subject
to the requirements of
Section
5.06
, at the
Effective Time, the bylaws of the Surviving Corporation shall be amended and
restated in its entirety to read as the bylaws of Merger Sub, except that the
name of the Surviving Corporation shall not be amended and, as so amended and
restated, shall be the bylaws of the Surviving Corporation until thereafter
further amended as provided therein or by applicable Law.
1.05
Directors
and Officers
.
The directors and
officers of Merger Sub immediately prior to the Effective Time shall be the
initial directors and officers of the Surviving Corporation and shall hold
office until their respective successors are duly elected and qualified, or
their earlier death, resignation or removal, in accordance with applicable Law
and the Surviving Corporation’s certificate of incorporation and
bylaws.
1.06
Closing
.
Subject to the
conditions contained in this Agreement and unless this Agreement shall have been
terminated in accordance with Article VII, the closing of the Merger (the “
Closing
”)
shall take place (a) at the offices of Weil, Gotshal & Manges LLP, 767 Fifth
Avenue, New York, New York at 10:00 a.m., on the Business Day that is most
promptly practicable following the date of the satisfaction (or waiver if
permissible) of all of the conditions set forth in
Article 6
(other than
those conditions that by their nature are to be satisfied at the Closing, but
subject to the satisfaction or waiver of such conditions), but in no event later
than the second (2nd) Business Day following such date or (b) at such other
place and time and/or on such other date as the Company and Parent may agree in
writing. The date on which the Closing occurs is hereinafter referred
to as the “
Closing
Date
.
”
ARTICLE
2
EFFECT
OF THE MERGER ON THE CAPITAL STOCK
OF
THE COMPANY AND MERGER SUB
2.01
Effect on
Shares of Capital Stock
.
(a)
Common Shares of the
Company
. As of the Effective Time, by virtue of the Merger and
without any action on the part of the holder of any Common Shares, the Company,
Parent or Merger Sub, each Common Share that is issued and outstanding
immediately prior to the Effective Time (other than (i) Dissenting Shares, and
(ii) Common Shares to be canceled pursuant to
Section
2.01(b)
) shall be
automatically canceled and extinguished and converted into the right to receive
$11.00 per share in cash (the “
Merger
Consideration
”), payable to the holder thereof, without interest or
dividends thereon, less any applicable withholding of Taxes (as defined in
Section 3.13(g)), in the manner provided in
Section
2.03
. All
such Common Shares, when so converted, shall no longer be outstanding and each
holder of such Common Shares shall cease to have any rights with respect
thereto, except the right to receive the Merger Consideration. Prior
to the Effective Time, the Company shall take all actions, if any that are
necessary to give effect to the transactions contemplated by this
Section
2.01(a)
.
(b)
Cancellation of Certain
Common Shares
. As of the Effective Time, by virtue of the
Merger and without any action on the part of the holder of any Common Shares,
the Company, Parent or Merger Sub, each Common Share that is owned by the
Company as treasury stock or otherwise owned by Merger Sub or Parent shall
automatically be canceled and shall cease to exist, and no cash or other
consideration shall be delivered or deliverable in exchange
therefor.
(c)
Capital Stock of Merger
Sub
. As of the Effective Time, by virtue of the Merger and
without any action on the part of the holders of Merger Sub common stock, the
Company, Parent or Merger Sub, each share of common stock, par value $0.001 per
share, of Merger Sub (“
Merger Sub Common
Shares
”) issued and outstanding immediately prior to the Effective Time
shall be converted into one validly issued, fully paid and non assessable share
of common stock, par value $0.001 per share, of the Surviving Corporation
(“
Surviving
Corporation Common Shares
”), with the same rights, powers and privileges
as the shares so converted and shall constitute the only outstanding shares of
capital stock of the Surviving Corporation. Each certificate that,
immediately prior to the Effective Time, represented issued and outstanding
Merger Sub Common Shares shall, from and after the Effective Time, automatically
and without the necessity of presenting the same for exchange, represent the
shares of the Surviving Corporation capital stock into which such shares have
been converted pursuant to the terms hereof;
provided
,
however
, that the
record holder thereof shall receive, upon surrender of any such certificate, a
certificate representing the Surviving Corporation Common Shares into which the
Merger Sub Common Shares formerly represented thereby shall have been converted
pursuant to the terms hereof.
(d)
Dissenting
Shares
. Notwithstanding anything in this Agreement to the
contrary, any Common Shares issued and outstanding immediately prior to the
Effective Time and held by a holder who has not voted in favor of the Merger (a
“
Dissenting
Stockholder
”) and who has properly demanded appraisal for such Common
Shares in accordance with the DGCL (each, a “
Dissenting
Shares
”) shall not be converted into a right to receive the Merger
Consideration at the Effective Time in accordance with
Section
2.01(a)
hereof, but
shall represent and become the right to receive such consideration as may be
determined to be due to such Dissenting Stockholder pursuant to the Laws of the
State of Delaware, unless and until such holder fails to perfect or withdraws or
otherwise loses such holder’s right to appraisal and payment under the
DGCL. If a Dissenting Stockholder fails to perfect appraisal rights
in accordance with the DGCL, or if such holder withdraws or otherwise loses such
holder’s right to appraisal, such former Dissenting Shares held by such holder
shall be treated as if they had been converted as of the Effective Time into the
right to receive, upon surrender as provided above, the Merger Consideration,
without any interest or dividends thereon, in accordance with
Section
2.01(a)
. The
Company shall give Parent prompt notice of any demands received by the Company
for appraisal of Common Shares, withdrawals of such demands and any other
instruments served pursuant to the DGCL and received by the Company, and Parent
shall have the right to participate in and, after the Effective Time, to direct,
all negotiations and proceedings with respect to such demands. The
Company shall not, except with the prior written consent of Parent or as
required under the DGCL, make any payment with respect to any demands for
appraisal or offer to settle or settle any such demands.
2.02
Equity
Awards
.
(a)
Options
.
(i) For
purposes of this Agreement, the term “Option” means any option to purchase or
acquire Common Shares (other than the Warrants), including any option granted
under the Company’s 1998 Stock Option Plan and 2006 Equity Incentive Plan
(as amended and restated February 26, 2009) (collectively, the “
Stock
Plans
”).
(ii) As
of the Effective Time, by virtue of the Merger and without any action on the
part of any holder thereof, each Option that is outstanding and unexercised
immediately prior to the Effective Time shall, to the extent then unvested,
become fully vested and exercisable and shall be canceled, in each case, in
accordance with and pursuant to the terms of the Stock Plans and related award
agreements under which such Options were granted. In consideration of
such cancellation, each holder of an Option that has a per-share exercise price
less than the Merger Consideration, if any, will be entitled to receive in
settlement of such Option as promptly as practicable following the Effective
Time, a cash payment from the Surviving Corporation, subject to any required
withholding of Taxes, equal to the product of (i) the total number of
Common Shares otherwise issuable upon exercise of such Option and (ii) the
Merger Consideration less the applicable exercise price per Common Share of such
Option (the “
Option
Consideration
”). Any Option with a per-share exercise price
that equals or exceeds the Merger Consideration shall be canceled and no payment
shall be made in respect thereof.
(b)
Restricted
Stock
. As of the Effective Time, each then-outstanding share
of restricted stock (“
Restricted
Stock
”), including any Restricted Stock previously issued by the Company
pursuant to the terms of any of the Stock Plans and/or any applicable restricted
stock award or restricted stock purchase agreement, shall be converted into the
right to receive from the Surviving Corporation, as promptly as practicable
following the Effective Time, an amount in cash equal to the Merger
Consideration (the “
Restricted Stock
Consideration
”), less any applicable withholding Taxes, and when so
converted will be automatically canceled and will cease to exist.
(c)
Restricted Stock
Units
. As of the Effective Time, each then-outstanding
restricted stock unit (each, a “
Restricted Stock
Unit
”), including any Restricted Stock Unit previously issued by the
Company pursuant to the terms of any of the Stock Plans and/or any applicable
restricted stock unit award, shall be converted into the right to receive from
the Surviving Corporation, as promptly as practicable following the Effective
Time, an amount in cash equal to the Merger Consideration that the holder would
have been entitled to receive had such Restricted Stock Unit vested in full and
settled immediately prior to the Effective Time (the “
RSU
Consideration
”), less any applicable withholding Taxes, and when so
converted will be automatically canceled and will cease to exist.
(d)
Warrants
.
(i) For
purposes of this Agreement, the term “
Warrant
”
means any warrant to purchase or acquire Common Shares issued pursuant to the:
(A) Venture Lending & Leasing IV, Inc. warrant agreement, dated December 27,
2004, (B) Steve M. Parker warrant agreement, dated December 14, 2004 and (C)
Lloyd Malchow warrant agreement approved by the Company Board on October 6, 2004
(each, a “
Warrant
Agreement
”).
(ii) As
of the Effective Time, by virtue of the Merger and without any action on the
part of any holder thereof, each Warrant that is outstanding and unexercised
immediately prior to the Effective Time shall, to the extent then unvested,
become fully vested and exercisable and shall be canceled, in each case, in
accordance with and pursuant to the terms of any Warrant Agreement and related
award agreements under which such Warrants were granted. In
consideration of such cancellation, each holder of a Warrant that has a
per-share exercise price less than the Merger Consideration, if any, will be
entitled to receive in settlement of such Warrant, as promptly as practicable
following the Effective Time, a cash payment from the Surviving Corporation,
subject to any required withholding of Taxes, equal to the product of (i)
the total number of Common Shares otherwise issuable upon exercise of such
Warrant and (ii) the Merger Consideration less the applicable exercise
price per Common Share of such Warrant (the “
Warrant
Consideration
”). Any Warrant with a per-share exercise price
that equals or exceeds the Merger Consideration shall be canceled and no payment
shall be made in respect thereof.
(e)
Employee Stock Purchase
Plan
.
(i) The
Company has taken all actions necessary and sufficient, including, in accordance
with Section 20(a) and Section 4 of the SenoRx, Inc. Employee Stock Purchase
Plan (the “
Company
ESPP
”), to provide that no new Offering Period (as defined in the Company
ESPP) under the Company ESPP will commence on and after May 15, 2010 (the date
upon which the Offering Period underway as of the date of this Agreement will
end pursuant to the terms and conditions of the Company ESPP), unless this
Agreement is terminated pursuant to Article 7.
(ii) Each
Common Share purchased under the Company ESPP and outstanding prior to the
Effective Time will be treated as a Common Share in accordance with
Section
2.01
.
(iii) No
offering period under the Company ESPP shall commence on or after the date of
this Agreement. The Company shall take all actions necessary and
sufficient in accordance with applicable Law and the Company ESPP (including
delivering all required notices and passing necessary resolutions of the Company
Board and any applicable committee thereof) to effect the foregoing, so that the
Company ESPP shall terminate immediately prior to the Effective
Time. All amounts withheld by the Company on behalf of the
participants in the Company ESPP that have not been used to purchase Common
Shares prior to the Effective Time will be returned to the participants without
interest pursuant to the terms of the Company ESPP.
(f)
Payment
. Promptly
following the Effective Time, but in no event more than one (1) Business Day
following the Effective Time, Parent shall deposit, or Parent shall otherwise
take all steps necessary to cause to be deposited, by wire transfer of
immediately available funds, with the Surviving Corporation, cash in an
aggregate amount equal to (A) the aggregate Option Consideration payable to all
holders of Options pursuant to Section
2.02(a)(ii)
(the
“
Option
Fund
”), (B) the aggregate Restricted Stock Consideration payable to all
holders of Restricted Stock pursuant to
Section
2.02(b)
(the “
Restricted Stock
Fund
”), (C) the aggregate RSU Consideration payable to all holders of
Restricted Stock Units pursuant to
Section
2.02(c)
(the “
RSU Fund
”)
and (D) the aggregate Warrant Consideration payable to all holders of Warrants
pursuant to
Section
2.02(d)(ii)
(the
“
Warrant
Fund
”). The Option Fund, the Restricted Stock Fund, the RSU
Fund and the Warrant Fund shall not be used for any other purpose except as
provided in this Agreement.
(g)
Company
Action.
Prior to the Effective Time, the Company shall take
all actions necessary and sufficient in accordance with applicable Law, the
Company ESPP, the Stock Plans and, as applicable, the terms of each Option award
agreement, Warrant Agreement, Restricted Stock award or purchase agreement and
Restricted Stock Unit award agreement (including delivering all required notices
and passing necessary resolutions of the Company Board and any applicable
committee thereof), in each case, to give effect to the transactions
contemplated by this Agreement (including this
Section
2.02
). Without
limiting the foregoing, the Company shall take all actions necessary to ensure
that the Company will not, at the Effective Time, be bound by any options, stock
appreciation rights, restricted stock rights, restricted stock units, phantom
equity awards, warrants or other rights or agreements which would entitle any
Person, other than Parent and its subsidiaries, to own any equity interest in
the Surviving Corporation or to receive any payment in respect
thereof. The Company shall take all actions necessary and sufficient
to terminate the Company ESPP and all of its Stock Plans, such termination to be
effective at the Effective Time.
2.03
Payment
for Common Shares in the Merger
.
(a) Prior
to the Effective Time, Merger Sub shall appoint a commercial bank or trust
company reasonably acceptable to the Company to act as exchange and paying
agent, registrar and transfer agent (the “
Agent
”) to
facilitate the receipt by the Company’s stockholders of the Merger
Consideration. Promptly following the Effective Time, but in no event
more than one (1) Business Day following the Effective Time, Parent shall
deposit, or Parent shall otherwise take all steps necessary to cause to be
deposited, by wire transfer of immediately available funds, in trust with the
Agent for the benefit of the holders of Common Shares, cash in an aggregate
amount equal to the product of (i) the number of Common Shares issued and
outstanding immediately prior to the Effective Time and entitled to receive the
Merger Consideration in accordance with
Section
2.01(a)
and (ii) the
Merger Consideration (the “
Payment
Fund
”). The Agent shall, pursuant to instructions provided by
Parent, make the payments provided for in
Section
2.01
of this
Agreement out of the Payment Fund (it being understood that any and all interest
earned on funds made available to the Agent pursuant to this Agreement shall be
turned over to the Surviving Corporation). The Payment Fund shall not
be used for any other purpose except as provided in this Agreement.
(b) As
promptly as reasonably practicable after the Effective Time, the Surviving
Corporation shall cause the Agent to mail to each Person who was, as of
immediately prior to the Effective Time, a holder of record of Common Shares (i)
a letter of transmittal (which shall be in customary form) which shall specify
that delivery shall be effected, and risk of loss and title to the certificates
representing the Common Shares (the “
Certificates
”)
or uncertificated Common Shares represented by book entry (“
Uncertificated
Shares
”) shall pass, only upon proper delivery of the Certificates or
transfer of the Uncertificated Shares to the Agent and (ii) instructions for use
in surrendering such Certificates or transfer of the Uncertificated Shares and
receiving the Merger Consideration in respect thereof.
(c) Upon
(i) surrender of a Certificate for cancellation to the Agent, together with such
letter of transmittal validly executed and duly completed in accordance with the
instructions thereto or (ii) compliance with the reasonable procedures
established by the Agent for delivery of Uncertificated Shares, the holder of
such Certificate or Uncertificated Share shall be entitled to receive, in
exchange therefor, in the case of Common Shares (other than Dissenting Shares or
Common Shares to be canceled pursuant to
Section
2.01(b)
), cash in an
amount equal to the product of (i) the number of Common Shares formerly
represented by such Certificate or Uncertificated Shares, as applicable, and
(ii) the Merger Consideration, which amount shall be paid by the Agent by check
in accordance with the instructions provided by such holder. No
interest or dividends will be paid or accrued on the consideration payable upon
the surrender of any Certificate or transfer of any Uncertificated
Share. In the event of a transfer of ownership of Common Shares that
is not registered in the transfer records of the Company, payment of the Merger
Consideration in respect of the applicable Common Shares may be made to a Person
(other than the Person in whose name the Certificate surrendered or the
Uncertificated Shares so transferred is registered) if such Certificate shall be
properly endorsed or otherwise in proper form for transfer or such
Uncertificated Shares shall be properly transferred. The Person requesting such
payment shall pay any transfer or other Taxes required by reason of the payment
of the Merger Consideration in respect thereof or such Person shall establish to
the satisfaction of the Surviving Corporation that such Tax has been paid or is
not applicable. Until surrendered or transferred, as the case may be,
in accordance with the provisions of this
Section
2.03
, each
Certificate or Uncertificated Share (other than those representing Dissenting
Shares or Common Shares to be canceled pursuant to
Section
2.01(b)
) shall
represent, for all purposes, only the right to receive cash in an amount equal
to the product of (i) the number of Common Shares formerly represented by such
Certificate or Uncertificated Shares, as applicable and (ii) the Merger
Consideration, without any interest or dividends thereon.
(d) The
consideration issued upon the surrender of Certificates or transfer of
Uncertificated Shares in accordance with this Agreement shall be deemed to have
been issued in full satisfaction of all rights pertaining to such Common Shares
formerly represented thereby. After the Effective Time, there shall
be no transfers on the stock transfer books of the Surviving Corporation of any
Common Shares that were outstanding immediately prior to the Effective
Time. If, after the Effective Time, Certificates or Uncertificated
Shares are presented to the Surviving Corporation, they shall be canceled and
exchanged as provided in this
Article
2
.
(e) Any
portion of the Payment Fund (including any amounts that may be payable to the
former stockholders of the Company in accordance with the terms of this
Agreement) that remains unclaimed by the former stockholders of the Company upon
the nine (9) month anniversary of the Closing Date shall be returned to the
Surviving Corporation upon demand and any former stockholders of the Company who
have not theretofore complied with this
Article 2
shall
thereafter look, subject to
Section
2.03(f)
, to the
Surviving Corporation only as general unsecured creditors thereof for payment of
any Merger Consideration, without any interest or dividends thereon, that may be
payable in respect of each Common Share held by such
stockholder. Following the Closing, the Agent shall retain the right
to invest and reinvest the Payment Fund, on behalf of the Surviving Corporation,
in securities listed or guaranteed by the United States government or as
otherwise directed by the Surviving Corporation, and the Surviving Corporation
shall receive the interest earned thereon. Nothing contained in this
Agreement and no investment losses resulting from the investment of the Payment
Fund shall diminish the rights of any holder of Common Shares to receive the
Merger Consideration as provided in this Agreement.
(f) None
of Parent, Merger Sub, the Company or the Agent shall be liable to a holder of
Certificates, Uncertificated Shares or any other Person in respect of any cash
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar Law. If any Certificates shall not have been
surrendered or any Uncertificated Shares shall not have been transferred by the
sixth (6th) anniversary of the Closing Date (or immediately prior to such
earlier date on which any Merger Consideration, dividends (whether in cash,
stock or property) or other distributions with respect to Common Shares in
respect of such Certificate or Uncertificated Share would otherwise escheat to
or become the property of any Governmental Authority (as defined in
Section
3.06(b)
), any such
shares, cash, dividends or distributions in respect of such Certificate or
Uncertificated Share shall become, to the extent permitted by applicable Law,
the property of the Surviving Corporation, free and clear of all Claims (as
defined in
Section
3.10
) or interests of
any Person previously entitled thereto.
(g) In
the event any Certificate shall have been lost, stolen or destroyed, upon the
making of an affidavit (in form and substance acceptable to the Surviving
Corporation) of that fact by the Person (who shall be the record owner of such
Certificate) claiming such Certificate to be lost, stolen or destroyed and, if
required by the Agent, the posting by such Person of a bond in such amount as
the Agent may direct as indemnity against any Claim that may be made against it
with respect to such Certificate, the Agent will issue in exchange for such
lost, stolen or destroyed Certificate the Merger Consideration deliverable in
respect of the Common Shares formerly represented by such Certificate as
contemplated by this
Article
2
.
(h) Each
of the Agent, the Surviving Corporation and Parent shall be entitled to deduct
and withhold from the consideration otherwise payable to any holder of Common
Shares, Options, Restricted Stock, Restricted Stock Units or Warrants pursuant
to this Agreement such amounts as may be required to be deducted or withheld
with respect to the making of such payment under the Internal Revenue Code of
1986, as amended (the “
Code
”), or
any applicable provision of state, local or non-U.S. Law. To the
extent that amounts are so deducted or withheld and paid over to the appropriate
taxing authority by the Agent, the Surviving Corporation or Parent, such amounts
shall be treated for all purposes of this Agreement as having been paid to such
former holder of Common Shares, Options, Restricted Stock, Restricted Stock
Units or Warrants,
provided
that the
withheld amounts are actually remitted to the appropriate taxing
authority.
ARTICLE
3
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
Except
(i) as set forth in the Company Disclosure Schedule (the “
Company
Disclosure Schedule
”) delivered to Parent on the date of this Agreement
or (ii) as set forth in the SEC Reports filed by the Company with the SEC
between December 31, 2008 and the date of this Agreement (other than any “risk
factor” disclosure or any other forward looking statements set forth therein),
the Company represents and warrants to each of Parent and Merger Sub as
follows:
3.01
Organization
and Qualification
.
The Company is a
corporation duly organized, validly existing and in good standing under the Laws
of the State of Delaware and has all requisite corporate power and authority to
carry on its business as currently being conducted. The Company is
duly qualified or licensed as a foreign corporation to do business, and is in
good standing (to the extent applicable), in each jurisdiction where the nature
of its business makes such qualification or licensing necessary, except where
the failure to be so qualified or licensed and in good standing (to the extent
applicable) would not have a Company Material Adverse Effect. As used
in this Agreement, the term “
Company Material
Adverse Effect
” means any fact, circumstance, effect, event, change or
occurrence that, individually or in the aggregate with all other facts,
circumstances, effects, events, changes or occurrences (i) has, or would
reasonably be expected to have, a material adverse effect on the business,
assets, condition (financial or otherwise) or results of operations of the
Company, or (ii) would prevent or have a material adverse effect on the ability
of the Company to consummate the Merger in accordance with the terms of this
Agreement, other than with respect to the foregoing clauses (i) and (ii),
resulting from or arising out of any Excluded Matter. As used in this
Agreement, “
Excluded
Matter
” means any one or more of the following: (A) any fact,
circumstance, effect, event, change or occurrence relating to local, regional,
national or foreign political, economic or financial conditions or resulting
from or arising out of developments or conditions in credit, currency, capital,
securities or other financial markets, including caused by acts of terrorism or
war (whether or not declared) or any material worsening of such conditions
existing as of the date of this Agreement; (B) any fact, circumstance, effect,
event, change or occurrence generally affecting the industries in which the
Company operates; (C) any fact, circumstance, effect, event, change or
occurrence resulting from any hurricane, earthquake or other natural disasters,
weather conditions or other force majeure events; (D) any change, in and of
itself, in the share price or trading volume of the Common Shares,
provided
that this
clause (D) shall not preclude any fact, circumstance, effect, event, change or
occurrence that may have contributed to or caused such changes from being taken
into account in determining whether a Company Material Adverse Effect has
occurred, unless such fact, circumstance, effect, event, change or occurrence is
itself not to be considered in the determination of whether a Company Material
Adverse Effect has occurred as described in any other clause in this definition
of “Excluded Matter”; (E) any fact, circumstance, effect, event, change or
occurrence resulting from a change after the date of this Agreement in
accounting rules or procedures announced with respect to United States generally
accepted accounting principles (“
GAAP
”) or
other accounting standards (or the interpretation thereof), in each case, as
applicable to the financial statements of the Company, or a change after the
date of this Agreement in Laws (or the interpretation thereof); (F) any failure,
in and of itself, to meet any internal budgets, plans, projections or forecasts
of the Company’s revenue, earnings or other financial performance or results of
operations, or any published financial forecasts or analyst estimates of the
Company’s revenue, earnings or other financial performance or results of
operations or any change in analyst recommendations, for any period,
provided
that this
clause (F) shall not preclude any fact, circumstance, effect, event, change or
occurrence that may have contributed to or caused such failures from being taken
into account in determining whether a Company Material Adverse Effect has
occurred, unless such fact, circumstance, effect, event, change or occurrence is
itself not to be considered in the determination of whether a Company Material
Adverse Effect has occurred as described in any other clause in this definition
of “Excluded Matter”; (G) any fact, circumstance, effect, event, change or
occurrence attributable to the execution, performance or announcement of this
Agreement including (I) the identity of Parent, (II) the loss or departure of
officers or other employees of the Company, or (III) the loss or diminution in
the Company’s relationships, contractual or otherwise, with any of its
customers, suppliers, distributors, landlords, licensors, licensees or other
business partners,
provided
that this
clause (G) shall not preclude any legal or contractual consequences of the
execution of this Agreement or the consummation of the Transactions from being
taken into account in determining whether a Company Material Adverse Effect has
occurred; (H) any action taken or failed to be taken by the Company at the
request or with the consent of Parent, that, if taken without the request or the
consent of Parent, would have been prohibited by the terms of this Agreement or
(I) any legal proceedings made or brought by any of the current or former
stockholders of the Company (on their own behalf or on behalf of the Company)
against the Company or any of its directors or officers, including legal
proceedings arising out of the Merger or in connection with any of the other
Transactions; but only in the case of the foregoing clauses (A), (B), (C) or
(E), to the extent such change or effect does not disproportionately adversely
affect the Company relative to the other industry participants.
3.02
Charter
Documents and Bylaws
.
The Company has
heretofore made available to Parent and Merger Sub a complete and correct copy,
including all amendments as in effect on the date hereof, of each of the
certificate of incorporation and the bylaws of the Company, which are in full
force and effect as of the date of this Agreement. The Company is not
in violation of any of the provisions of its certificate of incorporation or
bylaws.
3.03
Capitalization
.
(a) The
authorized capital stock of the Company consists of 100,000,000 Common Shares
and 10,000,000 shares of preferred stock, par value $0.001 per share (the “
Preferred
Stock
”). As of May 4, 2010, (i) 17,552,560 Common Shares were
issued and outstanding, (ii) no shares of Preferred Stock were issued and
outstanding, (iii) 1,793,804 Common Shares were reserved for future issuance
pursuant to the Stock Plans, (iv) 2,750,824 Common Shares are subject to
outstanding Options, (v) 272,939 Common Shares are subject to Restricted Stock
Unit awards, (vi) 313,390 Common Shares are eligible for issuance under the
Company ESPP, (vii) 120 Common Shares are eligible for issuance under any
Restricted Stock award or purchase agreement and (viii) 218,600 Common Shares
are subject to outstanding Warrants. Except as set forth in this
Section
3.03
, or as issued in
compliance with the terms of
Section
5.01
, there are no
options, warrants, calls, subscriptions, or other rights, or other agreements or
commitments of any character relating to the issued or unissued capital stock of
the Company or obligating the Company to issue, transfer or sell any shares of
capital stock of, or other equity interests in, the Company.
Section
3.03(a)
of the
Company Disclosure Schedule sets forth, as of the date of this Agreement, the
name of each holder of an Option, Warrant, Restricted Stock or Restricted Stock
Unit, and to the extent applicable, the Stock Plan pursuant to which it was
granted, the vesting schedule of each such Option, Warrant, Restricted Stock or
Restricted Stock Unit, together with the grant date, exercise price and number
of Common Shares issuable upon exercise of each such Option or Warrant and
settlement of each such Restricted Stock or Restricted Stock
Unit. All issued and outstanding Common Shares are duly authorized,
validly issued, fully paid, nonassessable and free of preemptive
rights. All Common Shares reserved for issuance as noted
in clause (iii) above, when issued in accordance with the respective terms
thereof, are or will be duly authorized, validly issued, fully paid and
non-assessable and free of preemptive rights and any lien, Claim, security
interest or other charge, title imperfection or encumbrance (each, a “
Lien
” and,
collectively, “
Liens
”)
(other than Liens created by the holder thereof) and will be issued in
compliance in all material respects with all applicable securities
Laws. There are no outstanding obligations of the Company to
repurchase, redeem or otherwise acquire any shares of capital stock of, or other
equity interests in, the Company, except to the extent Parent consents to such
repurchase, redemption or acquisition in accordance with
Section
5.01
.
(b) Other
than the Support Agreements, there are no stockholders agreements, voting trusts
or other agreements or understandings entered into with the Company or, to the
Company’s Knowledge, with any other Person, relating to voting or disposition of
any shares of capital stock of the Company or granting to any Person or group of
Persons the right to elect, or to designate or nominate for election, a director
to the Company Board.
3.04
Authority
Relative to this Agreement
.
The Company has
all requisite corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and, subject to the adoption of
this Agreement by the holders of a majority of the outstanding Common Shares
entitled to vote thereon (the “
Stockholder
Approval
”), to consummate the Transactions. The execution and
delivery of this Agreement and the consummation of the Merger and the other
Transactions have been duly and validly authorized by all necessary corporate
action and no other corporate proceedings on the part of the Company are
necessary to authorize the Company’s execution and delivery of this Agreement or
to consummate the Transactions (other than Stockholder Approval and the filing
or recordation of the Certificate of Merger as required by the
DGCL). This Agreement has been duly and validly executed and
delivered by the Company, and (assuming this Agreement constitutes a valid and
binding obligation of Merger Sub and Parent) constitutes the legal, valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, subject to applicable bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium or other similar Laws relating to
creditors’ rights generally and to general principles of equity.
3.05
Company
Subsidiaries
.
The Company does
not own, directly or indirectly, any capital stock or other ownership interest
in any Person.
3.06
No
Violation; Required Filings and Consents
.
(a) The
execution and delivery by the Company of this Agreement does not, and the
performance of this Agreement by the Company and the consummation by the Company
of the Transactions will not: (i) conflict with or violate any provision of the
Company’s certificate of incorporation or bylaws; (ii) assuming that all
consents, approvals, authorizations and other actions described in
Section
3.06(b)
have been
obtained or performed and all filings and obligations described in
Section
3.06(b)
have been
made or complied with, conflict with or violate any material foreign or domestic
(federal, state or local) law, statute, treaty, ordinance, rule, regulation,
Permit (as defined in
Section
3.15
), license,
injunction, writ, judgment, decree, directive or Order (as defined in
Section
3.08
) (each, a “
Law
” and,
collectively, “
Laws
”) or
rule of the NASDAQ Global Market (“
Nasdaq
”)
applicable to the Company or by which any asset of the Company is bound or
affected; (iii) conflict with, result in any breach of or constitute a default
(or an event that with or without notice or lapse of time or both would become a
default) under, or give to others any right of termination, amendment,
acceleration or cancellation of, or require any payment under, or give rise to a
loss of any benefit to which the Company is entitled under, any provision of any
contract, instrument, Permit, concession, franchise, license, loan or credit
agreement, note, bond, mortgage, indenture, lease or other property agreement,
partnership or joint venture agreement or other legally binding agreement,
whether oral or written (each, a “
Contract
”
and, collectively, “
Contracts
”),
to which the Company is a party or otherwise applicable to the Company or its
properties or assets; or (iv) result in the creation or imposition of a Lien
(other than Permitted Liens) on any of the properties or assets of the Company,
except in the case of clauses (iii) and (iv) of this
Section
3.06(a)
, to the
extent that any such conflict, violation, breach, default, right, loss or Lien
would not, individually or in the aggregate, have a Company Material Adverse
Effect.
(b) The
execution and delivery by the Company of this Agreement does not, and the
performance of this Agreement and the consummation by the Company of the
Transactions will not, require any consent, approval, authorization or Permit
of, or filing with or notification to, any domestic (federal, state or local) or
foreign or multi-national government or governmental, regulatory or
administrative authority, agency, commission, board, bureau, quasi-governmental
organization, body (including notified bodies), court or instrumentality or
arbitrator of any kind (“
Governmental
Authority
”), or any other Person except (i) for applicable requirements,
if any, of the Securities Exchange Act of 1934, as amended (the “
Exchange
Act
”), the Securities Act of 1933, as amended (the “
Securities
Act
”), the Hart Scott Rodino Antitrust Improvements Act of 1976, as
amended (the “
HSR Act
”),
and the rules and regulations thereunder, any required consent, approval,
authorization, Permit, filing or notification pursuant to applicable foreign
Antitrust Laws and regulations, the applicable rules of Nasdaq and filing and
recordation of appropriate documents for the Merger as required by the DGCL,
(ii) for any applicable notification requirement with respect to the various
transactions contemplated under
Section
2.02
and
Section
2.03
with respect to
the Stock Plans and/or Benefit Plans and (iii) where the failure to obtain such
consents, approvals, authorizations or Permits, or to make such filings or
notifications, could not, individually or in the aggregate, reasonably be
expected to impair in any material respect the ability of the Company to perform
its obligations hereunder, or prevent or materially impede, interfere with,
hinder or delay the consummation of the Transaction.
3.07
SEC
Reports; Financial Statements; Internal Controls
.
(a) Since
March 29, 2007, the Company has timely filed and furnished all forms, reports,
statements, schedules, exhibits and other documents (including forms, reports,
statements, schedules, exhibits and other documents required to be filed after
the date of this Agreement, the “
SEC
Reports
”) with the Securities and Exchange Commission (the “
SEC
”)
required to be filed by it pursuant to the federal securities Laws and the SEC
rules and regulations thereunder. The SEC Reports (i) were prepared
in all material respects in accordance with the requirements of the Securities
Act, the Exchange Act and the Sarbanes-Oxley Act of 2002 (the “
Sarbanes-Oxley
Act
”) and the published rules and regulations of the SEC thereunder, each
as applicable to such SEC Reports and (ii) did not contain as of the time they
were filed or furnished any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. As of the date of this Agreement, there are no
outstanding or unresolved comments issued by the staff of the SEC with respect
to any of the SEC Reports. To the Knowledge of the Company, none of
the Company’s SEC Reports filed on or prior to the date hereof is the subject of
ongoing SEC review or investigation.
(b) Each
of the financial statements (including, in each case, any notes and schedules
thereto) of the Company included in the SEC Reports has been prepared in all
material respects in accordance with the published rules and regulations of the
SEC as at the date of the filing of such reports, has been prepared in
accordance with GAAP applied on a consistent basis throughout the periods
indicated (except as otherwise stated in such financial statements, including
the related notes) and fairly presents, in all material respects, the financial
position, results of operations and cash flows of the Company as at the
respective dates thereof and for the respective periods indicated therein
(subject, in the case of unaudited statements, to the absence of complete
footnote disclosure and to normal and recurring year end adjustments described
therein, none of which, individually or in the aggregate, has had, is or would
reasonably be expected to be material to the Company). The Company
does not have any Indebtedness, except as may be incurred in compliance with
Section
5.01
.
(c) The
Company does not have any material liabilities or obligations of any kind or
nature required to be reflected or reserved against on a balance sheet prepared
in accordance with GAAP, except liabilities or obligations (i) fully reflected
on or reserved against in the Company’s balance sheet as of December 31, 2009
(the “
Balance Sheet
Date
”) included in the Company’s SEC Reports filed prior to the date of
this Agreement, (ii) incurred after the Balance Sheet Date in the ordinary
course of business consistent with past practices or (iii) incurred in
connection with the Transactions or as required by the terms of this
Agreement.
(d) The
Company is not a party to, and does not have any commitment to become a party
to, any joint venture, off-balance sheet partnership or any similar Contract or
arrangement (including any Contract or arrangement relating to any transaction
or relationship between the Company, on the one hand, and any unconsolidated
affiliate on the other hand), including any “off-balance sheet arrangement” (as
defined in Item 303(a) of Regulation S-K promulgated by the
SEC)).
(e) The
Company is not indebted to any director or officer of the Company (except for
amounts due as normal salaries and bonuses or in reimbursement of ordinary
business expenses and directors’ fees, in each case, in the ordinary course of
business consistent with past practices) and no such Person is indebted to the
Company and, except as set forth in the SEC Reports filed prior to the date of
this Agreement, between the date of the Company’s last proxy statement filed
with the SEC and the date of this Agreement, there have been no other
transactions of the type required to be disclosed pursuant to Item 402 of
Regulation S-K promulgated by the SEC.
(f) The
Company has established and maintains “disclosure controls and procedures” (as
such term is defined in Rule 13a-15(e) or 15d-15(e) promulgated by the SEC under
the Exchange Act) reasonably designed to ensure that all information (both
financial and non-financial) relating to the Company required to be disclosed by
the Company in the SEC Reports (i) is accumulated and communicated to the
Company’s principal executive officer and its principal financial officer to
allow timely decisions regarding required disclosure and (ii) are effective to
ensure that information is recorded, processed, summarized and reported within
the time periods specified in the rules and forms of the SEC. The
Company’s principal executive officer and its principal financial officer have
disclosed, based on their most recent evaluation, to the Company’s auditors and
the audit committee of the Company Board (i) all significant deficiencies that
have been identified in the design or operation of internal controls which could
adversely affect the Company’s ability to record, process, summarize and report
financial data and have identified for the Company’s auditors any material
weaknesses in internal controls and (ii) any fraud, whether or not material,
that involves management or other employees who have a significant role in the
Company’s internal controls.
(g) The
management of the Company has completed its assessment of the effectiveness of
the Company’s internal control over financial reporting in compliance with the
requirements of Section 404 of the Sarbanes-Oxley Act for the year ended
December 31, 2009, and such assessment concluded that such controls were
effective. To the Knowledge of the Company, there are no facts or
circumstances that would prevent the Company’s principal executive officer and
principal financial officer from giving the certifications and attestations
required pursuant to the rules and regulations adopted pursuant to Section 404
of the Sarbanes-Oxley Act, without qualification, when next due.
(h) There
are no amendments or modifications, which are or, to the Knowledge of the
Company, will be required to be filed with the SEC, but have not yet been filed,
to (i) agreements, documents or other instruments which previously have been
filed by the Company with the SEC pursuant to the Exchange Act or (ii) the
Company’s SEC Reports. The Company has delivered or made available to
Parent true, correct and complete copies of all correspondence with the SEC
occurring since January 1, 2007 and prior to the date of this
Agreement.
(i) The
audit committee of the Company Board has established “
whistleblower
” procedures
that meet the requirements of Exchange Act Rule 10A-3, and the Company has made
available to Parent true, complete and correct copies of such
procedures. No complaint seeking relief under Section 806 of the
Sarbanes-Oxley Act has been filed with the United States Secretary of Labor and,
to the Knowledge of the Company, no employee has threatened to file any such
complaint.
3.08
Compliance
with Applicable Laws
.
The Company is in
compliance with, and is not in default or violation of, any Law, or any consent
decree, executive order or other order, whether temporary, preliminary or
permanent (collectively, “
Order
”)
applicable to it, or by which any of its properties or assets are bound and the
business operations of the Company have been conducted in compliance with all
Laws of each Governmental Authority; except, in each case, for any such non
compliance, defaults or violations that would not, individually or in the
aggregate, have a Company Material Adverse Effect. Since January 1,
2007, the Company has not received written notice to the effect that a
Governmental Authority claimed or alleged that the Company was not in compliance
with all Laws and Orders applicable to the Company, any of the Company’s
properties or assets or any of the Company’s business operations.
3.09
Absence
of Certain Changes or Events
.
Except as
otherwise contemplated by this Agreement, since the Balance Sheet Date and prior
to the date hereof, (i) the Company has conducted its business in all material
respects in the ordinary course of business consistent with past practices, (ii)
there has not been a Company Material Adverse Effect and (iii) the Company has
not taken or permitted to occur any action that, were it to be taken from and
after the date of this Agreement without the approval of Parent, would
constitute a breach of
Section
5.01(a)
.
3.10
Litigation
.
Section
3.10
of the Company
Disclosure Schedule sets forth as of the date of this Agreement (a) each claim,
action, suit, demand, proceeding or litigation (collectively, a “
Claim
”)
pending, (b) each investigation or inquiry by a Governmental Authority in
respect of which the Company has received notice, whether written or oral, and
(c) to the Company’s Knowledge, each Claim, investigation or inquiry threatened
in writing, in each case, against the Company or any of the Company’s properties
or assets, at law or in equity. There is no Claim pending, no
investigation or inquiry by a Governmental Authority in respect of which the
Company has received notice, whether written or oral, and to the Company’s
Knowledge, no Claim, investigation or inquiry threatened in writing, in each
case, against the Company, at law or in equity, that individually or in the
aggregate, would reasonably be expected to have a Company Material Adverse
Effect. The Company is not, as of the date of this Agreement, subject
to any Order by or before any Governmental Authority that is material to the
Company. Since January 1, 2007, the Company has not been a defendant
in any Claim or inquiry involving product liability or warranty claims, in each
case, with respect to the Company’s products, and since such date, to the
Company’s Knowledge, no such Claim or inquiry has been
threatened. There are no settlement or similar agreements that
contain an ongoing obligation of the Company. There is no Claim
pending or threatened by the Company against any third party.
3.11
Information
in Proxy Statement and Other Disclosure Documents
.
(a) Each
document required to be filed by the Company with the SEC in connection with the
Transactions (the “
Company
Disclosure Documents
”), including the proxy or information statement of
the Company containing information required by Regulation 14A under the Exchange
Act (collectively with all amendments and supplements thereto, the “
Proxy
Statement
”), to be filed with the SEC in connection with the Merger,
will, when filed, comply as to form in all material respects with the applicable
requirements of the Exchange Act. The representations and warranties contained
in this
Section
3.11(a)
will not
apply to statements included in or omissions from the Company Disclosure
Documents based upon information furnished to the Company in writing by Merger
Sub or Parent or any of their representatives specifically for use
therein.
(b) At
the time the Proxy Statement or any amendment or supplement thereto is first
mailed to the stockholders of the Company, and at the time such stockholders
vote on adoption of this Agreement, the Proxy Statement, as supplemented or
amended, if applicable, will not contain any untrue statement of a material fact
or omit to state any material fact necessary to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading. At the time of the filing of any Company Disclosure
Document other than the Proxy Statement and at the time of any distribution
thereof, such Company Disclosure Document will not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading. The representations and warranties contained in
this
Section
3.11(b)
will not
apply to statements included in or omissions from the Company Disclosure
Documents based upon information furnished to the Company in writing by Merger
Sub or Parent or any of their representatives specifically for use
therein.
3.12
Benefit
Plans
.
(a)
Section
3.12(a)
of the
Company Disclosure Schedule contains a correct and complete list of (i) all
“employee benefit plans” (as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended (“
ERISA
”))
and (ii) all other employee benefit plans, programs, agreements, policies,
arrangements or payroll practices, including bonus plans, employment, individual
consulting or other compensation agreements, collective bargaining agreements,
equity or equity-based compensation, employee stock ownership, employee loan, or
deferred compensation arrangements, change in control, termination, retention or
severance plans or arrangements, pension plans, supplemental retirement plans,
individual account-based savings plans, profit-sharing, retirement
plans, severance pay, stock purchase, stock option, welfare benefits, incentive
compensation, retiree health insurance, retiree life insurance, Section 125
flexible benefit, vacation pay, sick pay, salary continuation for disability,
hospitalization, medical insurance, life insurance, educational and employee
assistance plans and programs or other fringe benefit plans, arrangements or
practices, whether or not subject to ERISA, oral or written, in each case of (i)
and (ii), sponsored, maintained, or contributed to by, or required to be
contributed to by, the Company for the benefit of any current or former
director, officer, employee or independent contractor of the Company, or to
which the Company has or could have any liability, contingent or otherwise,
including as a result of its or their ERISA Affiliates (the foregoing
clauses (i) and (ii), collectively, the “
Benefit
Plans
”).
(b) The
Company has made available to Parent true, correct and complete copies of the
following documents (or a description thereof to the extent no writing exists),
to the extent applicable, (i) all Benefit Plans, including any plan
documents and related trust documents, insurance contracts or other funding
arrangements, and all amendments thereto, (ii) the most recent Forms 5500
and all schedules thereto, (iii) the most recent actuarial reports, (iv)
the most recent Internal Revenue Service determination letters and (v) the most
recent summary plan descriptions and any other material communications to
current or former directors, employees, officers or independent contractors
regarding the extent or level of benefits thereunder.
(c) All
Benefit Plans intended to be qualified plans may either rely on opinion letters
issued for the form of plan or have been the subject of favorable determination
letters from the Internal Revenue Service to the effect that such Benefit Plans
are qualified and exempt from federal income Taxes under Section 401(a)
and 501(a), respectively, of the Code. No such determination
letter has been revoked and nothing has occurred with respect to the operation
of the Benefit Plans that could reasonably be expected to cause the loss of such
qualification or exemption, or the imposition of any material liability, penalty
or Tax under ERISA or the Code.
(d) None
of the Benefit Plans is, and neither the Company nor any of its ERISA Affiliates
has in the last six (6) years maintained, contributed to, had an obligation to
contribute to, or had any liability in respect of, a Title IV
Plan. Each Benefit Plan and all related trusts, insurance Contracts
and funds has been maintained, funded and administered in all material respects
in accordance with the terms of such Benefit Plan and in compliance in all
material respects with the applicable provisions of ERISA, the Code and
other applicable Laws, and each Benefit Plan which is a “nonqualified deferred
compensation plan” subject to Section 409A of the Code has been established and
maintained in compliance, in all material respects, with Section 409A of the
Code. All payments (including payments to any participant (or their
beneficiaries) and premium payments) and contributions (including all employer
contributions and employee salary reduction contributions) required to have been
made under the terms of such Benefit Plan, under any funds or trusts established
under such Benefit Plan, any related insurance Contract or any applicable Law,
have been made by the due date thereof (including any valid extension), and all
payments and contributions for any period ending on or before the Effective Time
which are not yet due will have been paid or accrued on the Company’s balance
sheet on or prior to the Effective Time.
(e) With
respect to each Benefit Plan, (i) no Claims or inquires (other than routine
Claims or inquiries for benefits in the ordinary course of business consistent
with past practices) are pending, or to the Company’s Knowledge, threatened
against the Benefit Plans, the assets of any of the trusts under such plans or
the plan sponsor or administrator, or against any fiduciary of the Benefit
Plans, in each case, with respect to the operation of the Benefit Plans and (ii)
to the Company’s Knowledge, no facts or circumstances exist that could give rise
to any such Claims or inquiries.
(f) The
Company has no obligation to provide, nor do any of the Benefit Plans provide,
for post-employment health or life insurance, benefits or coverage for any
Person, except as specifically required under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“
COBRA
”),
or similar state Law and at the sole expense of such Person.
(g) Each
Option granted by the Company (i) was granted with a per share exercise price
equal to or greater than the per share fair market value of the Company’s
underlying Common Shares on the date of grant thereof and no such Option has a
feature for the deferral of compensation, in each case, within the meaning of
Section 409A of the Code and the regulations and other guidance issued
thereunder (“
Section
409A
”) or satisfies the “
grandfather
” rules
for stock options under Section 409A and (ii) which was intended to be an
incentive stock option (within the meaning of Section 422 of the Code) was
granted pursuant to a Benefit Plan which meets the requirements of Section 422
of the Code.
(h) Neither
the execution and delivery of this Agreement nor the consummation of the
Transactions will, either alone or in connection with any other event(s), (i)
result in any payment becoming due to any current or former director, officer,
employee or independent contractor of the Company, (ii) increase any amount of
compensation or benefits otherwise payable under any Benefit Plan, (iii) result
in the acceleration of the time of payment, funding or vesting of any benefits
under any Benefit Plan, (iv) require any contributions or payments to fund any
obligations under any Benefit Plan, (v) limit the right to merge, amend or
terminate any Benefit Plan (except any limitations imposed by Law, if any) or
(vi) give rise to any amount that would not be deductible under Section 280G of
the Code. No Benefit Plan or other agreement with any employee
provides for a “gross-up” or similar payment in respect of any Taxes that may
become payable under Section 409A or Section 4999 of the Code.
(i) There
is no Contract or other arrangement or plan (including any Benefit Plan) by or
with the Company covering any Person that, individually or collectively, could
give rise to the payment of any amount by the Company that would not be
deductible by the Company or the Surviving Corporation by reason of Section
162(m) of the Code.
(j) Each
current or former director, officer, employee or independent contractor of the
Company has been, and is, properly classified as an employee, independent
contractor or consultant under applicable Law, except for any failure to be so
classified that would not give rise to a material liability to the
Company. The Company has no direct or indirect liability with respect
to any misclassification of any current or former director, officer, employee or
independent contractor of the Company as an independent contractor rather than
as an employee, as a part-time employee rather than a full-time employee, or
with respect to any employee leased from another employer, except for any such
liability that would not give rise to a material liability to the
Company.
(k) No
Benefit Plan is maintained outside the jurisdiction of the United States, or
covers any employee residing or working outside the United States.
3.13
Taxes
.
(a) The
Company has (i) timely filed or caused to be filed all material Tax Returns
required to be filed by it, and each such Tax Return has been prepared in
substantial compliance with all applicable Laws and is true and correct in all
material respects; (ii) timely paid all material Taxes (as defined in
Section
3.13(g)
) required to
be paid and has accrued all Taxes that are not yet due and payable on the
Company’s financial statements in accordance with GAAP; and (iii) not incurred
any material liability for Taxes subsequent to the date of the most recent
financial statements contained in the SEC Reports other than in the ordinary
course of business consistent with past practices.
(b) (i)
No material Tax Return of the Company is under audit or examination by any
taxing authority, and no written (or, to the Knowledge of the Company, oral)
notice of such an audit or examination or any other audit or examination with
respect to material Taxes has been received by the Company; (ii) each material
deficiency resulting from any audit or examination relating to Taxes by any
taxing authority has been paid, and no other deficiency for any material amount
of Tax has been assessed in writing, or to the Company’s Knowledge has been
threatened, by any taxing authority against the Company that is still
outstanding, except in each case for deficiencies currently being diligently
contested in good faith by appropriate proceedings and for which adequate
reserves, as applicable, have been established in the Company’s financial
statements in accordance with GAAP; (iii) there are no material Liens for Taxes
upon the assets of the Company, except Liens relating to current Taxes not yet
due and payable or otherwise being diligently contested in good faith by
appropriate proceedings and for which adequate reserves, as applicable, have
been established in the Company’s financial statements in accordance with GAAP;
(iv) the Company has not consented to extend the time in which any Tax may be
assessed or collected by any taxing authority; and (v) no written (or, to the
Knowledge of the Company, oral) claim has been made by any taxing authority in a
jurisdiction where the Company does not file Tax Returns that the Company is or
may be subject to taxation in that jurisdiction, other than such claims which
would not reasonably be expected to be material.
(c) The
Company (i) has not been a member of an affiliated group filing a consolidated,
combined or unitary income Tax Return, (ii) is not party to or bound by any
material Tax allocation or Tax sharing agreement with any Persons and (iii) has
no liability for the Taxes of any Person under Treas. Reg. § 1.1502-6 (or
any similar provision of state, local or foreign Law), as a transferee or
successor, by Contract, or otherwise.
(d) The
Company will not be required to include any material item of income in, or
exclude any material item of deduction from, taxable income for any taxable
period (or portion thereof) ending after the Closing Date as a result of any
change in method of accounting for a taxable period ending on or prior to the
Closing Date under Section 481(a) of the Code (or any corresponding or similar
provision of state, local or foreign income Tax Law).
(e) The
Company has not been a United States real property holding corporation within
the meaning of Section 897(c)(2) of the Code during the applicable period
specified in Section 897(c)(1)(A)(ii) of the Code.
(f) The
Company has not been a “
controlled corporation
” or a
“
distributing
corporation
” in any distribution occurring during the two (2) year period
ending on the date hereof that was purported or intended to be governed by
Section 355 of the Code (or any similar provision of state, local or foreign
Law). All material amounts of Tax required to be withheld by the
Company have been timely withheld and paid over to the appropriate taxing
authority. The Company has not engaged in any “
reportable transaction
”
within the meaning of Treas. Reg. § 1.6011-4(b). The Company
possesses all Tax Returns and work papers necessary to support any
carry-forwards of the Company’s net operating losses, net capital losses, Tax
credits and other applicable Tax benefits.
(g) As
used in this Agreement, the terms: (i) “
Tax
” (and,
with correlative meaning, “
Taxes
”)
means: (A) any federal, state, local or non U.S. net income, gross income, gross
receipts, windfall profit, severance, property, production, sales, use, license,
excise, franchise, employment, payroll, withholding, alternative or add on
minimum, ad valorem, value added, transfer, stamp or environmental tax, or any
other tax of any kind whatsoever, together with any interest or penalty or
addition to tax imposed by any Governmental Authority; and (B) any liability in
respect of any items described above as a transferee or successor, pursuant to
Treas. Reg. § 1.1502-6 (or any similar provision of Law), or as an
indemnitor, guarantor, surety or in a similar capacity or otherwise; and (ii)
“
Tax
Return
” means any report, return, estimate, claim for refund or other
information or document supplied, filed or required to be supplied to or filed
with a federal, state, local or foreign taxing authority in connection with
Taxes (including any amendments thereof or attachments thereto).
3.14
Intellectual
Property
.
(a)
Section
3.14(a)
of the
Company Disclosure Schedule sets forth a complete and correct list as of the
date of this Agreement of: (i) all patented or registered Proprietary
Rights owned by the Company, including Internet domain name registrations; (ii)
all pending patent applications or other applications for registration of
Proprietary Rights owned by the Company; and (iii) all trade names and corporate
names used by the Company.
Section
3.14(a)
of the
Company Disclosure Schedule further lists the jurisdictions in which each such
item giving rise to Proprietary Rights has been issued, registered, or in which
any such application for such issuance and registration has been filed, the
current status of each such item, including a listing of all necessary actions
or required payments that the Company must take within ninety (90) days
following the Closing Date to obtain, maintain, perfect or renew said listed
item and the registration or application date, as applicable.
(b)
Section
3.14(b)
of the
Company Disclosure Schedule sets forth a complete and correct list as of the
date of this Agreement of: (i) information technology products used
in the operations of the Company (“
IT
Software
”) for which the Company paid more than $3,000 in the aggregate
in license fees or pays more than $1,000 in annual support fees; and (ii) all
other licenses or similar Contracts or arrangements, in effect as of the date of
this Agreement, in which the Company is a licensee of Proprietary Rights, or
pursuant to which Proprietary Rights are or have been sold, assigned or
otherwise conveyed or provided to the Company (other than for IT Software for
which the Company paid $3,000 or less in the aggregate in license fees or pays
$1,000 or less in annual support fees), and a correct and complete list of all
patents and pending patent applications subject to such licenses.
(c)
Section
3.14(c)
of the
Company Disclosure Schedule sets forth a complete and correct list as of the
date of this Agreement of all licenses or similar Contracts or arrangements in
which the Company is a licensor of Proprietary Rights, including reseller
agreements, other than customer Contracts entered into in the ordinary course of
business consistent with past practices.
(d) The
Company owns and possesses all right, title and interest in and to the
Proprietary Rights set forth in
Section
3.14(a)
of
the Company Disclosure Schedule, and has a valid and enforceable right to use
Proprietary Rights licensed from third parties pursuant to the Contracts set
forth in
Section
3.14(b)
of the
Company Disclosure Schedule. To the Company’s Knowledge, the Company
owns and possesses all right, title and interest in and to, or otherwise has
rights to, all Proprietary Rights (including those set forth in
Section
3.14(a)
and
Section
3.14(b)
of the
Company Disclosure Schedule) necessary and material for the operation of the
Company’s business as currently conducted or as currently proposed to be
conducted, free and clear of all Liens (collectively, the “
Company
Proprietary Rights
”).
(e) The
Company: (i) to the Company’s Knowledge, has not infringed, misappropriated,
diluted or otherwise conflicted with, and the operation of the Company’s
business as currently conducted does not infringe, misappropriate, dilute or
otherwise conflict with, any Proprietary Rights of any third party; (ii) is not
aware, to the Company’s Knowledge, of any facts that indicate a likelihood of
any of the foregoing; and (iii) has not received any notices regarding any of
the foregoing (including any cease and desist demands or offers to license any
Proprietary Rights from any third party, or any requests for indemnification
from customers or distributors).
(f) (i)
No loss or expiration of any of the Company Proprietary Rights is threatened,
pending or reasonably foreseeable, except for pending patent or trademark
applications that may not result in issuance or patents expiring at the end of
their statutory terms (and not as a result of any act or omission by the
Company); (ii) to the Company’s Knowledge, all of the Company Proprietary Rights
are valid and enforceable and none of the Company Proprietary Rights has been
misused by the Company; (iii) no Claim by any third party contesting the
validity, enforceability, use or ownership of any of the Company Proprietary
Rights has been made, is currently outstanding or is, to the Company’s
Knowledge, threatened, and there are, to the Company’s Knowledge, no grounds for
the same; (iv) the Company has taken all commercially reasonable action to
maintain and protect all of the Company Proprietary Rights and will continue to
use commercially reasonable efforts to maintain and protect all of the Company
Proprietary Rights prior to the Closing so as not to adversely affect the
validity or enforceability thereof, except where the failure to maintain or
protect any of the Company Proprietary Rights would not have a Company Material
Adverse Effect; (v) the Company has not disclosed or allowed to be disclosed any
of its trade secrets or material confidential information to any third party
without first entering into a confidentiality agreement with such third party
containing at least industry-standard terms and conditions governing the
non-disclosure and use of the Company’s trade secrets or material confidential
information by such third party; (vi) the Company has a practice requiring all
Persons who create, invent or contribute to Company Proprietary Rights to
execute an assignment agreement and no material violation of such practice has
occurred; and (vii) to the Company’s Knowledge, no third party has infringed,
misappropriated, diluted or otherwise conflicted with any of the Company
Proprietary Rights and the Company is not aware of any facts that indicate a
likelihood of any of the foregoing.
(g) No
software embedded or integrated into any of the Company’s products contains any
software governed, in whole or in part, by the terms of the GNU General Public
License or any other license requiring (as a license condition or otherwise) the
Company to disclose publicly source code to any software embedded or integrated
into any of the Company’s products or requiring the Company to grant or to
surrender any rights in or to the software (including intellectual property
rights). The computer software, computer firmware, computer hardware
(whether general purpose or special purpose), and other similar or related items
of automated, computerized and/or software system(s) that are used or relied on
by the Company in the conduct of its business is sufficient in all material
respects for the current needs of such business; provided, however, that nothing
herein shall require the Company, during the period prior to the Closing Date,
to abstain from updating, upgrading and expanding its information technology
systems, as may be determined necessary or prudent by the Company’s
management. The Company’s right, title and interest in and to any of
the Company Proprietary Rights under any Contract set forth in
Section
3.14(b)
of the
Company Disclosure Schedule is not subject to termination or any other material
adverse effect on the account of the consummation of the Transactions
contemplated by this Agreement.
(h) As
used in this Agreement, the term “
Proprietary
Rights
” means all of the following in any jurisdiction throughout the
world: (i) patents and patent applications, including all reissues,
division, renewals, reexaminations, extension, divisionals, continuations, and
continuations in part thereof and patents issuing thereon; (ii) trademarks,
service marks, trade dress, trade names, corporate names, logos and slogans (and
all translations, adaptations, derivations and combinations of the foregoing),
other source or business identifiers, and Internet domain names, together with
all goodwill associated with each of the foregoing; (iii) copyrights and all
mask work, database and design rights, whether or not registered or published;
(iv) registrations, renewals, extensions, reversions, recordations, and
applications for any of the foregoing; (v) rights in trade secrets and
confidential information (including those pertaining to inventions, ideas,
formulae, compositions, know how, manufacturing and production processes and
techniques (including laboratory notebooks), research and development
information, drawings, specifications, designs, plans, proposals, technical
data, financial, business and marketing plans, and customer and supplier lists
and related information); and (vi) all other intellectual property rights
protectable under applicable Laws.
3.15
Licenses
and Permits
.
The Company is in
possession of and has obtained all franchises, grants, authorizations, licenses,
permits, easements, variances, exceptions, consents, certificates, exemptions,
510(k) clearances, approvals, declarations, registrations, filings and Orders of
or required by any Governmental Authority (“
Permits
”)
necessary for the Company to (a) manufacture, market, sell, or distribute its
products, (b) own, lease and operate its properties and (c) carry on its
business as it is currently being conducted (collectively, the “
Company
Permits
”), except for any Company Permit where the failure to so possess
or obtain would not be material to the Company. No suspension,
withdrawal, revocation or cancellation of any of the Company Permits is pending
or, to the Company’s Knowledge, threatened, and the Company is, and has since
January 1, 2007 been, in compliance in all material respects with the terms of
all Company Permits. All of the Company Permits are in full force and
effect, except where the failure to be in full force and effect would not have a
Company Material Adverse Effect. None of the Company Permits will be
terminated or impaired or become terminable, in whole or in part, as a result of
the Transactions.
3.16
Material
Contracts
.
(a)
Section
3.16(a)
of the
Company Disclosure Schedule lists as of the date of this Agreement (1) all
material Contracts (within the meaning of Item 601(b)(10) of Regulation S-K),
including all amendments thereto, of the Company that have not been filed as
exhibits to the SEC Reports and (2) each of the following Contracts to which the
Company is a party:
(i)
Contract that purports to limit, curtail or restrict the ability of
the Company or any of its future subsidiaries or existing or future affiliates
to compete in any geographic area or line of business or to solicit or hire any
person or restrict the Persons to whom the Company or any of its future
subsidiaries or existing or future affiliates may sell products or deliver
services;
(ii)
Contract relating to research and development and clinical trials
conducted or to be conducted for or on behalf of the Company;
(iii) customer
Contract providing for or otherwise involving (x) the payment of credits or
rebates or (y) discounts or other similar allowances for customers who purchased
more than $25,000 of consumable products in the first quarter of 2010 other than
pursuant to the Company’s published standard volume discount
schedule;
(iv) partnership
or joint venture agreement or sharing of revenues, profits, losses or
liabilities or any other similar Contract;
(v)
Contract for the acquisition, sale or lease of material properties or assets (by
merger, purchase or sale of stock or assets or otherwise) entered into since
January 1, 2007;
(vi) Contract
with any (x) Governmental Authority or (y) director or officer of the Company or
any affiliate of the Company;
(vii)
Medicare, Medicaid or other third-party payor reimbursement
Contracts;
(viii)
loan or credit agreement, mortgage, indenture, note or other
Contract or instrument evidencing Indebtedness by the Company or any Contract or
instrument pursuant to which Indebtedness may be incurred or is guaranteed by
the Company;
(ix) financial
derivatives master agreement or confirmation, or futures account opening
agreements and/or brokerage statements, evidencing financial hedging or similar
trading activities;
(x)
voting agreement, registration rights agreement or
stockholders agreement;
(xi) mortgage,
pledge, security agreement, deed of trust or other Contract granting a Lien
(other than Permitted Liens) on any property or assets of the
Company;
(xii) group
purchasing organization, customer, client or supply (including sole-source and
single-source) Contract that is reasonably likely to involve consideration in
fiscal year 2010 or fiscal year 2011 in excess of $100,000;
(xiii) Contract
(other than customer, client or supply Contracts) that is reasonably likely to
involve consideration (whether or not measured in cash) in fiscal year 2010 or
fiscal year 2011 in excess of $100,000;
(xiv) collective
bargaining Contract or other Contract with any labor union;
(xv) any
Contract imposing any “standstill” obligation upon the Company or upon any other
party, other than in connection with a confidentiality agreement entered into
prior to the date of this Agreement with a party considering a business
combination transaction with the Company;
(xvi) consulting
Contract;
(xvii) guarantees,
suretyships, performance bonds to suppliers, Governmental Authorities, banks or
other Person;
(xviii) Contract
that restricts or otherwise limits the payment of dividends or other
distributions on equity securities;
(xix) Contract
that grants any Person other than the Company any (A) exclusive license, supply,
distribution or other rights, (B) “
most favored nation
” rights
or (C) exclusive rights to purchase any Company products;
(xx) to
the extent material to the business or financial condition of the Company (1)
lease or rental Contract, (2) product design or development Contract, (3)
indemnification or contribution Contract, (4) merchandising, sales
representative or distribution Contract, (5) Contract granting a right of first
refusal or first negotiation or (6) manufacturing and production
Contract;
(xxi) Contract
under which the consequences of a default or breach or the early termination of
which would reasonably be expected to have a Company Material Adverse Effect;
or
(xxii) commitment
or agreement to enter into any of the foregoing.
The
Contracts listed in (i) through (xxi) of
Section
3.16(a)
of the
Company Disclosure Schedule, together with the contracts filed as exhibits to
the SEC Reports and additional contracts of the type described in subparagraphs
2(i) through 2(xxi) of this
Section
3.16(a)
entered into
after the date of this Agreement, are referred to collectively as the “
Material
Contracts
”.
(b) (i)
The Company is not and, to the Company’s Knowledge, no other party is, in breach
of or in default under any Material Contract in any material respect and (ii)
there has not occurred any event that, with or without the lapse of time or
giving of notice or both, would constitute such a breach of or default under,
any Material Contract in any material respect by the Company or, to the
Company’s Knowledge, by any other party thereto. All Material
Contracts are valid and binding, in full force and effect in accordance with
their respective terms and enforceable against the Company and, to the Company’s
Knowledge, the other parties thereto, in accordance with their respective terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other similar Laws relating to creditors’ rights generally and to the general
principles of equity. Since January 1, 2007 the Company has not
received any Claim or threat that it has breached any of the terms and
conditions of any Material Contract in such a manner as would permit any other
party to cancel or terminate the same or would permit any other party to seek
damages from the Company under any Material Contract.
(c) All
Material Contracts, including all amendments thereto (within the meaning of Item
601(b)(10) of Regulation S-K) of the Company that have been filed as exhibits to
the SEC Reports contain a correct and complete copy of each exhibit and schedule
attached thereto.
3.17
Environmental
Laws
.
Except as would
not have a Company Material Adverse Effect:
(a) The
Company is and since five (5) years prior to the date of this Agreement, has
been in compliance with all Environmental Laws, which compliance includes
obtaining, maintaining and complying with all licenses, permits, authorizations
of consents required by Environmental Laws for its operations (“
Environmental
Permits
”) and no proceeding is pending or, to the Company’s Knowledge,
threatened to revoke, materially modify or terminate any such Environmental
Permits;
(b) No
Claim or investigation is pending or, to the Company’s Knowledge, threatened
against the Company or any real property currently or formerly owned, operated
or leased by the Company alleging or otherwise concerning non-compliance with,
or potential or actual liability under, any Environmental Laws;
(c) To
the Company’s Knowledge, no current facts or conditions exist with regard to the
Company or any real property currently or formerly owned, operated or leased by
or for the Company that would reasonably be expected to result in the Company
incurring material liability under any Environmental Laws;
(d) The
Company has provided to Parent and Merger Sub copies of all material written
environmental assessments, audits, investigations or other material
environmental reports and all material environmental correspondence or materials
relating to (i) the Company’s operations, (ii) any real property currently or
formerly owned, operated or leased by or for the Company, in each case, to the
extent material and (iii) any material environmental, occupational health or
safety issues or liabilities of the Company, to the extent such materials are in
the possession, custody or control of the Company.
For
purposes of this Agreement,
“
Environmental
Laws
”
shall
mean any and all applicable federal, national, state, provincial, local or
foreign Laws and Orders of any Governmental Authority pertaining to the
environmental pollution, the protection of the environment, natural resources or
occupational health and safety as it relates to exposure to hazardous or toxic
substances, materials or wastes.
3.18
State
Takeover Statutes
.
Assuming that the
representations and warranties of Parent and Merger Sub set forth in Section
4.09 are accurate, the Company Board has taken all actions so that no “
fair price
”, “
moratorium
”, “
control share acquisition
”,
“
business combination
”
or other similar anti-takeover Laws in the United States (including Section 203
of the DGCL) applicable to the Company shall be applicable to the Merger or the
other Transactions.
3.19
Opinion
of Financial Advisor
.
The Company Board
has received the written opinion (the “
Fairness
Opinion
”) of Piper Jaffray & Co. (the “
Financial
Advisor
”), dated as of the date of this Agreement, to the effect that, as
of the date of this Agreement and based upon and subject to the factors and
assumptions set forth therein, the Merger Consideration to be received by the
holders of Common Shares (other than Parent or any of its affiliates) pursuant
to the Merger is fair to such holders from a financial point of
view. A correct and complete copy of the Fairness Opinion has been
delivered to Parent. The Company has been authorized by the Financial
Advisor to permit the inclusion of the Fairness Opinion and references thereto
in the Proxy Statement.
3.20
Brokers
.
Except for the
engagement of the Financial Advisor, no broker, finder, investment banker,
financial advisor or other Person is entitled to any broker’s, finder’s,
financial advisor’s or other similar fee or commission, or the reimbursement of
expenses, in connection with Transactions. Prior to the execution
hereof, the Company has furnished to Parent a complete and correct copy of all
Contracts between the Company and the Financial Advisor pursuant to which the
Financial Advisor would be entitled to any fees or expenses or indemnification
related to the Transactions.
3.21
Related
Party Transactions
.
Except as set
forth in the SEC Reports filed prior to the date of this Agreement and the
Support Agreement, between the date of the Company’s last proxy statement filed
with the SEC and the date of this Agreement, no event has occurred that would be
required to be reported by the Company pursuant to Item 404 of Regulation S-K
promulgated by the SEC.
3.22
Properties
and Assets
.
The Company has
good and valid title to, or, in the case of leased properties and assets, valid
leasehold interests in, all of its material tangible properties and assets, real
and personal, used or held for use in its business, free and clear of any Liens
except for Permitted Liens. For purposes of this Agreement,
“Permitted Liens” shall mean (i) Liens for Taxes not yet due and payable or
which are otherwise being diligently contested in good faith by appropriate
proceedings and for which adequate reserves, as applicable, have been
established in the Company’s financial statements in accordance with GAAP; (ii)
mechanics, carriers’, workmen’s, warehouseman’s, repairmen’s, materialmen’s or
other Liens that are not yet due or that are being contested in good faith and
by appropriate proceedings; (iii) leases, subleases and licenses (other than
capital leases and leases underlying sale and leaseback transactions); (iv)
Liens imposed by applicable Law (other than Tax Law); (v) pledges or deposits to
secure obligations under workers’ compensation Laws or similar legislation or to
secure public or statutory obligations; (vi) pledges and deposits to secure the
performance of bids, trade contracts, leases, surety and appeal bonds,
performance bonds and other obligations of a similar nature, in each case, in
the ordinary course of business consistent with past practices; (vii) defects,
imperfections or irregularities in title, easements, covenants and rights of way
(unrecorded and of record) and other similar restrictions, and zoning, building
and other similar codes or restrictions, in each case, that do not adversely
affect in any material respect the current use of the applicable property owned,
leased, used or held for use by the Company; (viii) Liens the existence of which
are disclosed in the notes to the financial statements of the Company included
in the Company’s
Annual
Report on Form 10-K for the fiscal year ended December 31, 2009 or described in
Section
3.22
of the Company
Disclosure Schedule; (x) statutory, common law or contractual liens of
landlords; and (xi) Liens which do not, individually or in the aggregate,
materially interfere with or materially impair the conduct of the business of
the Company. The Company does not own any real property. The real property
listed in
Section
3.22
of the Company
Disclosure Schedule constitutes all of the real property used or occupied by the
Company as of the date of this Agreement. The Company’s buildings,
equipment and other tangible assets are in good operating condition (normal wear
and tear excepted) to carry on the Company’s business in all material respects
as currently conducted. All material leases to which the Company is a
party are in good standing, valid and effective in accordance with their
respective terms, and there is not under any of such leases, any existing
default or event of default (or event which with or without notice or lapse of
time or both would constitute a default), except where the lack of such good
standing, validity and effectiveness or the existence of such default or event
of default could not reasonably be expected to, individually or in the
aggregate, materially interfere with or impair the operation of the business of
the Company.
3.23
Labor
Matters
.
Except, in the
case of clauses (g), (i), (j) and (k) below, as would not result in material
liability to the Company, (a) there is no labor strike, dispute, slowdown,
stoppage or lockout actually pending, or, to the Company’s Knowledge, threatened
against the Company, and during the past three (3) years there has not been any
such action, (b) no union claims to represent the employees of the Company, (c)
the Company is not a party to or bound by any collective bargaining or similar
Contract with any labor organization, or work rules or practices agreed to with
any labor organization or employee association applicable to employees of the
Company, (d) none of the employees of the Company is represented by any labor
organization and the Company does not have any Knowledge of any current union
organizing activities among the employees of the Company, (e) the Company is and
has at all times been in material compliance, and has no outstanding material
liability with respect to any non-compliance, with all applicable Laws
respecting employment and employment practices, terms and conditions of
employment, wages, hours of work and occupational safety and health, including
all such Laws, regulations and Orders relating to the Fair Labor Standards Act,
WARN, collective bargaining, discrimination, civil rights, workers’ compensation
and the collection and payment of withholding and/or social security Taxes and
any similar Tax; (f) there has been no “
mass layoff
” or “
plant closing
” as defined by
WARN with respect to the Company within the six (6) months prior to Closing, (g)
the Company is not engaged in any unfair labor practices as defined in the
National Labor Relations Act or other applicable Law and there is no pending, or
to the Company’s Knowledge, threatened unfair labor practice charge or complaint
against the Company before the National Labor Relations Board or any similar
state or foreign agency, (h) there is no grievance arising out of any collective
bargaining agreement, (i) no charges with respect to or relating to the Company
are pending before the Equal Employment Opportunity Commission or any other
agency responsible for the prevention of unlawful employment practices, (j)
since January 1, 2007, the Company has not received written notice of the intent
of any Governmental Authority responsible for the enforcement of labor or
employment Laws to conduct an investigation with respect to or relating to the
Company and to the Company’s Knowledge no such investigation is in progress and
(k) there are no Claims pending or, to the Company’s Knowledge, threatened, in
any forum by or on behalf of any present or former employee of the Company
alleging breach of any express or implied Contract of employment, any Law
governing employment or the termination thereof or other discriminatory,
wrongful or tortious conduct in connection with the employment
relationship. To the Company’s Knowledge, as of the date of this
Agreement, no officer or other key employee of the Company is subject to any
noncompete, nonsolicitation, employment, consulting or similar Contract relating
to, affecting or in conflict with the present or proposed business activities of
the Company, except agreements between the Company and its present and former
officers and employees.
3.24
Regulatory
Matters
.
(a) The
Company is and, since January 1, 2007, has been in compliance, in all material
respects, with all applicable Laws administered or issued by the United States
Food and Drug Administration (“
FDA
”) or
any other Governmental Authority having regulatory authority over the Company’s
products or operations, including the following: (i) the Federal Food, Drug and
Cosmetic Act, as amended, and the regulations promulgated thereunder; (ii) any
applicable FDA investigational device exemption, premarket approval or 510(k)
premarket notification; (iii) European Union Directive 93/42/EEC, as amended,
and any other applicable European Union legislation or national legislation of
the European Union Member States; and (iv) any applicable Canadian legislation
or Laws; except, in each case, for any such violations that would not have a
Company Material Adverse Effect.
(b) Since
January 1, 2007, the Company has not received written notice of, nor has the
Company been subject to, any adverse inspectional finding, data integrity
review, investigation, penalty, fine, sanction, assessment, request for
corrective or remedial action, warning letter, regulatory letter, untitled
letter, FDA Form 483, or other written notice, communication, or correspondence
from the FDA or any other Governmental Authority alleging that the Company is or
was in violation of any Law, clearance, approval, permission, authorization,
consent, or exemption applicable to the research, development, testing,
manufacturing, packaging, labeling, marketing, distribution, and/or sales
activities conducted by the Company, or alleging that the Company was or is the
subject of any pending, threatened or anticipated investigation, proceeding,
review, or inquiry.
(c) None
of the products developed, tested, manufactured, packaged, labeled, marketed, or
distributed by the Company have been recalled, whether voluntary or otherwise,
or are or have been subject to device removal or correction reporting
requirements, and the Company has not received written notice, either completed
or pending, of any proceeding seeking a recall, removal, or corrective action of
any products. No products are currently being considered for recall
or other field action by the Company, or to the Company's Knowledge, by any
Governmental Authority. Since January 1, 2007, the Company has not,
as a result of a failure to meet the applicable specifications, applicable Laws
or other regulatory requirements, experienced a manufacturing hold, materials or
product shortage, or any other event that materially impacted the Company’s
ability to manufacture, process, distribute, supply, import, market or sell any
of its products. Each of the Company’s products have been and are
being developed, manufactured, tested, packaged, labeled, distributed, marketed,
commercialized and sold in compliance in all material respects with applicable
Laws.
(d) Neither
the Company nor, to the Company’s Knowledge, any employee or agent of the
Company has made an untrue statement of material fact or fraudulent statement to
FDA or any other Governmental Authority, or in any records and documentation
prepared or maintained to comply with the applicable Laws, with respect to any
product tested, manufactured, distributed, or sold by the Company or the
business of the Company, or failed to disclose a material fact required to be
disclosed to any Governmental Authority, or, to the Company’s Knowledge, has
ever been investigated by the FDA, National Institutes of Health, Office of the
Inspector General for the Department of Health and Human Services, Department of
Justice or other comparable Governmental Authority for data or healthcare
program fraud.
(e) Neither
the Company nor, to the Company’s Knowledge, any employee or agent of the
Company have violated in any material respect or caused a material violation of
any federal or state health care fraud and abuse or false claims statute or
regulation, including the anti-kickback provisions of the Social Security Act,
42 U.S.C. § 1320a-7b(b), or have been excluded or threatened with exclusion
under Law, including under 42 U.S.C. § 1320a-7 or relevant regulations in
42 C.F.R. Part 1001, or assessed or threatened with assessment of civil money
penalties pursuant to 42 U.S.C. Part 1003. Neither the Company nor,
to the Company’s Knowledge, any of its officers, directors and employees have
made or offered any payment, gratuity or other thing of value that is prohibited
by any Law to personnel of the FDA or any other Governmental
Authority
(f) There
are not presently pending, nor, to Company’s Knowledge, threatened in writing,
any civil, criminal or administrative Claims, hearings, notices of violation,
demand letters, or other written communications relating to any alleged hazard
or alleged defect in design, manufacture, materials or workmanship, including
any failure to warn or alleged breach of express or implied warranty or
representation, relating to any Company product, or alleging that any Company
product is otherwise unsafe or ineffective for its intended
use. Since January 1, 2007, the Company has not made any
modifications to any product specifically because of product liability,
regulatory, or other claims or communications concerning alleged hazards or
defects in such products.
(g) To
the Company’s Knowledge, there is no pending, proposed or final Medicare
national or local coverage determination that, if finalized, would materially
restrict coverage for any Company product.
(h) To
the extent applicable to the Company’s business and to the Company’s
Knowledge:
(i) The
Company pays only reasonable and actual expenses for health care professionals
receiving training by the Company, and each such health care professional has a
bona fide need for such training;
(ii)
The Company provides educational grants to
third-parties educational sponsors only if such sponsors have a genuine
educational purpose or function and only when (x) the educational gathering is
primarily dedicated to promoting objective scientific and educational activities
and discourse; (y) the Company does not select the attending health care
professionals who are attending the event; and (z) any meals sponsored or
furnished by the Company at the educational event are of modest
value;
(iii) The
Company pays health care professionals fair market value for their services,
plus reasonable and actual expenses, and only purchases such services for which
there is a commercially reasonable need for the services;
(iv) Any
gift furnished by the Company has not exceeded $100 in value.
(v)
All decisions on grants to health care professionals are made
by Company employees other than sales and marketing departments;
and
(vi) All
price concessions furnished by the Company are accurately reflected in the
invoice sent to the customer.
(i) Without
limiting the generality of the foregoing, the Company is conducting its business
in compliance in all material respects with the Anti-Kickback Statute (42 U.S.C.
§ 1320a-7b), Civil Monetary Penalty Statute (42 U.S.C. § 1320a-7a), the Stark
Law (42 U.S.C. § 1395nn), the False Claims Act (31 U.S.C. § 3729 et seq.) and
all of the regulations promulgated under all such statutes.
3.25
Insurance
.
Section
3.25
of the Company
Disclosure Schedule sets forth a correct and complete list of all insurance
policies maintained by the Company and a description of the type of insurance
covered by such policies, the dollar limit of the policies and the annual
premiums for such policies. All premiums due and payable under all
such policies have been paid and the Company is otherwise in compliance in all
material respects with the terms of such policies. All such policies
(i) have been issued by insurers which are reputable and financially sound and
(ii) are in full force and effect. The Company is not in material
breach or default, and the Company has not taken any action or failed to take
any action which, with or without the lapse of time or giving of notice or both,
would constitute such a breach or default, or permit termination or
modification, of any of such policies. The Company has reported to
its insurers all events that may give rise to a Claim under all insurance
policies. The Company does not maintain any material self-insurance
or co-insurance programs. As of the date of this Agreement, the
Company does not have any disputed Claim or Claims with any insurance provider
relating to any Claim for insurance coverage under any policy or insurance
maintained by the Company. No notice of cancellation or termination
has been received by the Company with respect to any of such
policies. The consummation of the Transactions will not, in and of
itself, cause the revocation, cancellation or termination of any such
policy.
3.26
Foreign
Corrupt Practices
.
The Company has
conducted and is conducting its business in material compliance with the Foreign
Corrupt Practices Act of 1977, as amended, and the rules and regulations
thereunder (the “
FCPA
”) and
has instituted and maintained policies and procedures designed to ensure, and
which are reasonably expected to continue to ensure, continued compliance
therewith. Neither the Company nor, to the Company’s Knowledge, any
of its directors, officers, agents, employees or any other Persons acting on its
behalf has, in connection with the operation of its business, (a) used any
corporate or other funds for unlawful contributions, payments, gifts or
entertainment, or made any unlawful expenditures relating to political activity
to government officials, candidates or members of political parties or
organizations, or established or maintained any unlawful or unrecorded funds in
violation of Section 104 of the FCPA, or any other similar applicable Law or (b)
paid, accepted or received any unlawful contributions, payments, expenditures or
gifts.
3.27
Export
Controls
.
The Company has
not, since January 1, 2007, violated, in any material respect, any applicable
U.S. Export and Import Laws, or made a voluntary disclosure with respect to any
violation of such Laws. The Company (a) has been and is in
compliance, in all material respects, with all applicable Foreign Export and
Import Laws since January 1, 2007, (b) to the extent applicable, has prepared
and applied for all import and export licenses required in accordance with U.S.
Export and Import Laws and Foreign Export and Import Laws for the conduct of its
business and (c) has at all times been in compliance, in all material respects,
with all applicable Laws relating to trade embargoes and
sanctions. No product, service or financing provided by the Company
has been, directly or indirectly, sold to, provided to, or performed for or on
behalf of Cuba, Iran, Libya, North Korea, Sudan, Syria or any other country or
Person against whom the United States maintains economic sanctions or an arms
embargo unless authorized by license or by Law. “
Foreign Export
and Import Laws
” means the Laws of a foreign government regulating
exports, imports or re-exports to or from the foreign country, including the
export or re-export of any goods, services or technical data. “
U.S. Export and
Import Laws
” means the Arms Export Control Act (22 U.S.C. 2778), the
International Traffic in Arms Regulations (ITAR) (22 CFR 120-130), the Export
Administration Act of 1979, as amended (50 U.S.C. 2401-2420), the Export
Administration Regulations (EAR) (15 CFR 730-774), the Foreign Assets Control
Regulations (31 CFR Parts 500-598), the Laws administered by Customs and Border
Protection (19 CFR Parts 1-199) and all other Laws of the United States
regulating exports, imports or re-exports to or from the United States,
including the export or re-export of goods, services or technical data from the
United States.
3.28
Sales
Tracings
.
The Company has
requested sales tracing from its international distributors.
ARTICLE
4
REPRESENTATIONS
AND WARRANTIES OF MERGER SUB AND PARENT
Each of
Merger Sub and Parent represents and warrants to the Company as
follows:
4.01
Organization
and Qualification
.
Each of Merger
Sub and Parent is a corporation duly organized, validly existing and in good
standing (to the extent such concept is relevant in such jurisdiction) under the
Laws of its jurisdiction of incorporation and has all requisite corporate or
other power and authority to carry on its business as currently being
conducted. Each of Merger Sub and Parent is duly qualified or
licensed as a foreign corporation to do business, and is in good standing, in
each jurisdiction where the nature of its business makes such qualification or
licensing necessary, except where the failure to be so qualified or licensed and
in good standing would not, individually or in the aggregate, have a Parent
Material Adverse Effect. As used in this Agreement, the term “
Parent Material
Adverse Effect
” means any fact, circumstance, effect, event, change or
occurrence that would prevent or have a material adverse effect on the ability
of Parent and Merger Sub to consummate the Merger in accordance with the terms
hereof.
4.02
Charter
Documents and Bylaws
.
Parent has
heretofore made available to the Company a complete and correct copy, including
all amendments as in effect on the date hereof, of each of the certificate of
incorporation and the bylaws of Parent, which are in full force and effect as of
the date of this Agreement. Parent is not in violation of any of the
provisions of its certificate of incorporation or bylaws. Parent has
heretofore made available to the Company a complete and correct copy, including
all amendments as in effect on the date hereof, of each of the certificate of
incorporation and the bylaws of Merger Sub, which are in full force and effect
as of the date of this Agreement. Merger Sub is not in violation of
any of the provisions of its certificate of incorporation or
bylaws.
4.03
Authority
Relative to this Agreement
.
Each of Merger
Sub and Parent has all requisite corporate power and authority to execute and
deliver this Agreement, to perform its respective obligations hereunder and to
consummate the Transactions. The execution and delivery of this
Agreement and the consummation of the Merger and the other Transactions have
been duly and validly authorized by all necessary corporate action and no other
corporate proceedings on the part of Merger Sub or Parent are necessary to
authorize their execution and delivery of this Agreement or to consummate the
Transactions (other than the filing and recordation of the Certificate of Merger
as required by the DGCL). This Agreement has been duly and validly
executed and delivered by each of Merger Sub and Parent, and (assuming this
Agreement constitutes a valid and binding obligation of the Company) constitutes
the legal, valid and binding obligations of each of Merger Sub and Parent,
enforceable against them in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other
similar Laws relating to creditors’ rights generally and to general principles
of equity.
4.04
No
Violation; Required Filings and Consents
.
(a) The
execution and delivery by each of Merger Sub and Parent of this Agreement does
not, and the performance of this Agreement and the consummation by each of
Merger Sub and Parent of the Transactions will not: (i) conflict with or violate
any provision of Parent’s certificate of incorporation or bylaws or conflict
with or violate any provision of the certificate of incorporation or bylaws or
similar organizational documents of any subsidiary of Parent (including Merger
Sub), (ii) assuming that all consents, approvals, authorizations and other
actions described in
Section
4.04(b)
have been
obtained or performed and all filings and obligations described in
Section
4.04(b)
have been
made or complied with, conflict with or violate any material Law or rule of the
New York Stock Exchange applicable to Parent or any of its subsidiaries or by
which any asset of Parent or any of its subsidiaries is bound or affected, (iii)
conflict with, result in any breach of or constitute a default (or an event that
with or without notice or lapse of time or both would become a default) under,
or give to others any right of termination, amendment, acceleration or
cancellation of, or require any payment under, or give rise to a loss of any
benefit to which Parent or any subsidiary of Parent is entitled under, any
provision of any Contract applicable to any of them or their respective
properties or assets which is material to Parent and its subsidiaries, taken as
a whole, or (iv) result in the creation or imposition of a Lien (other than
Permitted Liens) on any asset of Parent or any of its subsidiaries, except in
the case of clauses (iii) and (iv) of this
Section
4.04(a)
, to the
extent that any such conflict, violation, breach, default, right, loss or Lien
would not, individually or in the aggregate, have a Parent Material Adverse
Effect.
(b) The
execution and delivery of this Agreement by each of Merger Sub and Parent does
not, and the performance of this Agreement and the consummation by each of
Merger Sub and Parent of the Transactions will not, require any consent,
approval, authorization or Permit of, or filing with or notification to, any
Governmental Authority or any other Person, except (i) for applicable
requirements, if any, of the Exchange Act, the Securities Act, the HSR Act and
the rules and regulations thereunder, any required consent, approval,
authorization, Permit, filing or notification pursuant to applicable foreign
Antitrust Laws and regulations, the applicable rules of the New York Stock
Exchange and filing and recordation of appropriate documents for the Merger as
required by the DGCL and (ii) where the failure to obtain such consents,
approvals, authorizations or Permits, or to make such filings or notifications,
could not, individually or in the aggregate, reasonably be expected to impair in
any material respect the ability of Parent or Merger Sub to perform its
obligations hereunder, or prevent or materially impede, interfere with, hinder
or delay the consummation of the Transaction.
4.05
Financial
Capability
.
Parent has, and
will have at the Effective Time, sufficient resources available to consummate
the Merger on the terms and conditions contained in this
Agreement. Parent’s and Merger Sub’s obligations hereunder are not
subject to a condition regarding Parent’s or Merger Sub’s obtaining funds to
consummate the Transactions.
4.06
Brokers
.
The Company will
not be responsible for any broker, finder, financial adviser or other fee or
commission in connection with the Transactions based upon arrangements made by,
or on behalf of, Parent or any of its subsidiaries.
4.07
Litigation
.
There is no Claim
or inquiry pending or, to Parent’s Knowledge, threatened against or affecting
Parent that would have a Parent Material Adverse Effect. There is no
Order imposed upon Parent by or before any Governmental Authority that would
have a Parent Material Adverse Effect.
4.08
Information
in Proxy Statement
.
(a) Each
document required to be filed by Parent with the SEC in connection with the
Transactions (the “
Parent Disclosure
Documents
”) will, when filed, comply as to form in all material respects
with the applicable requirements of the Exchange Act.
(b) At
the time the Proxy Statement or any amendment or supplement thereto is first
mailed to the stockholders of the Company, and at the time such stockholders
vote on adoption of this Agreement, the information furnished by Merger Sub or
Parent or any of their representatives specifically for use in the Proxy
Statement, as supplemented or amended, if applicable, will not contain any
untrue statement of a material fact or omit to state any material fact necessary
to make the statements made therein, in the light of the circumstances under
which they were made, not misleading. At the time of the filing of
any Parent Disclosure Document and at the time of any distribution thereof, such
Parent Disclosure Document will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading.
(c) The
representations and warranties contained in
Section
4.08(a)
and
Section
4.08(b)
will not
apply to statements included in or omissions from the Parent Disclosure
Documents based upon information furnished to Parent in writing by the Company
or any of its representatives specifically for use therein.
4.09
Ownership
of Common Shares
.
As of the date of
this Agreement, neither Parent nor any of its subsidiaries beneficially owns any
Common Shares, other than as set forth on
Section
4.09
of the Parent
Disclosure Schedule.
ARTICLE
5
COVENANTS
5.01
Interim
Operations.
(a) Except
as otherwise expressly contemplated or permitted by this Agreement, as set forth
in
Section
5.01
of the Company
Disclosure Schedule, as required by applicable Law, or as otherwise consented to
in writing by Parent (which consent shall not be unreasonably withheld,
conditioned or delayed), the Company covenants and agrees that during the period
from the date of this Agreement to the earlier of the Effective Time and the
termination of this Agreement in accordance with
Article 7
hereof:
(i)
the business and operations of the Company shall
be conducted in the ordinary course of business consistent with past practices
(including the timely filing with the SEC of all SEC Reports required to be
filed by the Company under the Exchange Act or the Securities Act from the date
of this Agreement to the Effective Time, and the compliance in all material
respects with the applicable requirements of the Exchange Act and Securities
Act, as the case may be, with respect to such SEC Reports) and the Company shall
use commercially reasonable efforts to preserve intact its current business
organization, keep available the services of its current officers and key
employees and preserve its relationships with its material customers, suppliers,
licensors, licensees and distributors;
(ii)
the Company shall not (A) authorize for
issuance, issue, deliver, sell or agree or commit to issue, sell or deliver
(whether through the issuance or granting of options, commitments,
subscriptions, rights to purchase or otherwise), pledge or otherwise encumber
any shares of its capital stock, any other securities or any securities
convertible into, or any rights, warrants or options to acquire, any such
shares, securities or convertible securities or any other securities or equity
equivalents (including stock appreciation rights or phantom interests), except
(x) for issuances of up to 33,750 Restricted Stock Units in the aggregate to (1)
employees (other than officers) hired after the date of this Agreement by the
Company pursuant to customary new hire packages entered into in the ordinary
course of business consistent with past practices and current market practices;
provided
, that
the Company shall not issue more than 5,000 Restricted Stock Units to any
individual employee, and (2) current employees (other than officers) of the
Company;
provided
, that the
Company shall not issue more than 2,500 Restricted Stock Units to any individual
employee and such issuances shall be made in lieu of ordinary course periodic
issuances, (y) for issuances of Common Shares upon the exercise of Options or
Warrants, or settlement of Restricted Stock or Restricted Stock Units, in each
case, outstanding as of the date of this Agreement or with respect to Restricted
Stock Units, issued in compliance with
Section
5.01
and solely in
accordance with the provisions of the Stock Plans and/or Option agreements,
Warrant Agreements or Restricted Stock award or purchase agreements, as
applicable, in each case, in effect on the date of this Agreement or entered
into in compliance with
Section
5.01
or (z) for
issuances of Common Shares to participants in the Company ESPP pursuant to the
terms thereof and issued in compliance with the terms of this Agreement,
including
Section
2.02(e)
, (B)
repurchase, redeem or otherwise acquire any shares of capital stock or other
equity interests of the Company (including securities exchangeable for, or
options, warrants, calls, commitments or rights of any kind to acquire, capital
stock or other equity interests of the Company) except for forfeitures of Common
Shares issued pursuant to Restricted Stock award or purchase agreements in
effect on the date of this Agreement or for Tax withholdings and exercise price
settlements upon exercise of Options or Warrants or with respect to Restricted
Stock or Restricted Stock Units, in each case, outstanding as of the date of
this Agreement, (C) amend or otherwise change its certificate of incorporation
or bylaws, (D) split, combine or reclassify any shares of its capital stock or
(E) amend or otherwise change the terms of any Options, Warrants, Restricted
Stock Units or Restricted Stock;
(iii) the
Company shall not (A) declare, set aside or pay any dividends on (whether in
cash, stock or other property), or make any other distributions in respect of,
any of its capital stock or (B) acquire or agree to acquire any asset (except
raw materials, inventory or supplies in the ordinary course of business
consistent with past practices and capital expenditures permitted by
Section
5.01(a)(xi)
),
business line, division, capital stock or other equity interest of any
Person;
(iv) except
as otherwise permitted by
Section
5.01(a)(ii)
, the
Company shall not (A) grant or agree to any increase, in any manner, in the
compensation, severance benefits or fringe benefits of, or pay any severance or
bonus to, any current or former director, officer or employee;
provided
that
compensation increases may be made only to employees (other than officers of the
Company) in the ordinary course of business consistent with past practices and
consistent with current market practices pursuant to the terms of any Benefit
Plan in effect on the date of this Agreement or entered into as required by this
Agreement, (B) enter into any new or amend, modify or supplement any Contract
(including any existing employment, consulting, severance, termination, change
of control or indemnification Contract), transaction, commitment or arrangement
with any current or former director, officer, employee or other affiliate of the
Company,
provided
that the
Company may enter into offer letters with new employees (other than officers)
providing for customary new hire packages consistent with the Benefit Plans in
effect on the date of this Agreement and may pay severance and provide other
termination benefits to employees (other than officers) of the Company as may be
required by the Benefit Plans in effect on the date of this Agreement, in each
case, in the ordinary course of business consistent with past practices and
current market practices, (C) except as may be required to comply with
applicable Law and except as provided or otherwise required by this Agreement
(including
Section
2.02
and
Section
5.17
), become
obligated under any Benefit Plan that was not in existence on the date of this
Agreement or amend, modify or terminate any Benefit Plan or other employee
benefit plan or any Contract, arrangement, plan or policy for the benefit of any
current or former director, officer or employee in existence on the date of this
Agreement or (D) except as may be required to comply with applicable Law and
except as provided or otherwise required by this Agreement (including
Section
2.02
and
Section
5.17
), pay any
benefit not required by any plan or arrangement (including any Benefit Plan) as
in effect as of the date of this Agreement (including the granting of,
acceleration of exercisability of or vesting of stock options, stock
appreciation rights, restricted stock or restricted stock units;
provided
,
however
, that the
foregoing restriction shall not exclude the grant of any stock options,
restricted stock or restricted stock units granted (in accordance with the terms
of
Section
5.01(a)(ii)
) to any
employee (other than any officer) newly hired by the Company after the date of
this Agreement);
(v) the
Company shall not sell, lease, license, mortgage or otherwise encumber or
subject to any Lien (other than Permitted Liens) or otherwise dispose of any of
its properties or assets that are material, individually or in the aggregate, to
the Company other than sales of inventory and other assets in the ordinary
course of business consistent with past practices;
(vi) the
Company shall not (A) incur, assume, pre-pay, discharge or satisfy any
Indebtedness or enter into any Contract to incur, assume, pre-pay, discharge or
satisfy any Indebtedness, other than in the ordinary course of business
consistent with past practices pursuant to letters of credit, lines of credit or
other credit facilities or arrangements disclosed on
Section
5.01(a)(vi)
of the
Company Disclosure Schedule, or guarantee, or agree to guarantee, any such
Indebtedness or obligation of another Person, or issue or sell, or agree to
issue or sell, any debt securities or options, warrants or calls or rights to
acquire any debt securities of the Company, guarantee any debt securities of
others, enter into any “
keep
well
” or other Contract to maintain any financial statement condition of
another Person or enter into any Contract or arrangement having the economic
effect of any of the foregoing or (B) make or forgive any loans, advances or
capital contributions to, guarantees for the benefit of, or investments in, any
Person, other than cash advances to the Company’s employees for reimbursable
travel and other business expenses incurred in the ordinary course of business
consistent with past practices;
(vii) the
Company shall not adopt or put into effect a plan of complete or partial
liquidation, dissolution, merger, consolidation, restructuring, recapitalization
or other reorganization of the Company;
(viii) the
Company shall not enter into, or amend, modify, elect not to renew or terminate
or waive, release or assign any rights under, any Material Contract,
provided
,
however
, that the
Company may (A) amend, modify, elect not to renew or terminate or waive, release
or assign any rights under, any Material Contract described in subparagraphs
(ii), (iii), (vii), (xii), (xiii), (xvi), (xix) and (xx) of
Section
3.16(a)
) in a manner
that is not adverse to the Company and which is in the ordinary course of
business consistent with past practices and (B) enter into any new Material
Contract of the type described in subparagraphs (ii), (iii), (vii), (xii),
(xiii), (xvi), (xix) and (xx) of
Section
3.16(a)
in the
ordinary course of business consistent with past practices.
(ix) the
Company shall not renew any of its distribution agreements for a period of more
than one (1) year from the date of expiration of the then current term of any
such distribution agreement;
(x)
except for customer (including
distribution) Contracts entered into in the ordinary course of business
consistent with past practices, the Company shall not renegotiate or enter into
any new Material Contract or arrangements relating to any Proprietary
Rights;
(xi) the
Company shall not make any capital expenditure or commitments not consistent
with expenditures in the Company’s capital budget for 2010 or 2011 provided to
Parent prior to the date hereof and summarized in
Section
5.01(a)(xi)
of the
Company Disclosure Schedule;
(xii) the
Company shall not make any material changes in its standardized sales terms and
conditions other than in the ordinary course of business consistent with past
practices;
(xiii) the
Company shall not enter into any settlement, conciliation or similar Contract
with any Governmental Authority;
(xiv) the
Company shall not (A) settle or compromise any pending or threatened Claim,
except with respect to the settlement or compromise of any such Claim (x) where
the full amount paid or to be paid is covered by insurance coverage maintained
by the Company (subject to any applicable deductibles or retention amounts) or
(y) that is not covered by insurance and where the full amount paid or to be
paid does not exceed $25,000 individually, (B) change any of the accounting
policies, practices or procedures (including material Tax accounting methods,
periods, policies, practices or procedures) or any of its methods of reporting
income, deductions or other items for financial accounting purposes, except as
may be required as a result of a change in GAAP enacted after the date of this
Agreement or (C) except in the ordinary course of business consistent with past
practices, make, change or rescind any material Tax election, enter into any
material closing agreement relating to Taxes, settle or compromise any material
Tax liability, audit, Claim, proceeding or assessment, file any material amended
Tax Return, surrender any right to claim a refund of material Taxes, or consent
to any extension or waiver of the limitation period applicable to any material
Tax liability or assessment;
(xv) the
Company shall not allow any material Company Proprietary Rights to become
abandoned or expired for failure to make required filings or pay required
fees;
(xvi) the
Company shall not agree or commit to do any of the foregoing (other than as
permitted by clause (i) above); and
(xvii) the
Company shall use commercially reasonable efforts to maintain its inventory of
supplies and components necessary for the manufacture of the Company's products
at adequate levels as required to operate the business.
(b) If
the Company shall desire to take an action which would be prohibited pursuant to
Section
5.01(a)
without the
written consent of Parent, prior to taking such action the Company shall request
such written consent by sending an email or facsimile to each of the following
individuals, and may not take such action until such consent (which consent
shall not be unreasonably withheld, conditioned or delayed) in writing has been
received from any of the following individuals:
Carl
Rickenbaugh
Director,
New Business Development
Email:
carl.rickenbaugh@crbard.com
Fax: (480)
449-2569
John D.
Kondrosky
Vice
President and General Manager (Bard Canada, Inc.)
Email:
john.kondrosky@crbard.com
In each
case, with a copy (which shall not constitute notice) to:
Jim
Beasley
Group
Vice President
Email:
jim.beasley@crbard.com
Fax: (480)
303-2725
5.02
Stockholders
Meeting; Preparation of Proxy Statement
.
(a) The
Company, acting through the Company Board, shall, in accordance with applicable
Law and its certificate of incorporation and bylaws, duly call, give notice of,
convene and hold a special meeting of its stockholders (the “
Stockholders
Meeting
”) as promptly as reasonably practicable following the clearance
by the SEC of the Proxy Statement for the purpose of considering and voting upon
the approval and adoption of this Agreement and such other matters as may be
necessary to effectuate the Transactions. The Company Board shall (i)
recommend to the stockholders of the Company the approval and adoption of this
Agreement, (ii) include in the Proxy Statement such recommendation of the
Company Board that the stockholders of the Company vote in favor of the approval
and adoption of this Agreement, (iii) use all reasonable efforts to solicit such
approval from the stockholders of the Company and (iv) not withdraw or modify
such favorable recommendation,
provided
however
, if the
Company Board shall have effected a Recommendation Change in accordance with
Section
5.09(b)
, then the
Company Board shall not be required to comply with subparagraphs (i), (ii) and
(iv) above. The Proxy Statement shall include a copy of the Fairness
Opinion and (subject to
Section
5.09(b)
hereof) the
recommendation by the Company Board of this Agreement and the
Merger.
(b) As
promptly as reasonably practicable following the execution of this Agreement,
and in connection with the Stockholders Meeting, the Company shall (i) prepare
and, after prior review and approval by Parent and Merger Sub, file with the
SEC, use its commercially reasonable efforts to have cleared by the SEC and
thereafter mail to its stockholders as promptly as reasonably practicable the
Proxy Statement and all other proxy materials required in connection with such
meeting, (ii) notify Merger Sub and Parent of the receipt of any comments from
the SEC with respect to the Proxy Statement and of any requests by the SEC for
any amendment or supplement thereto or for additional information and shall
promptly provide to Merger Sub and Parent copies of all correspondence between
the Company or any representative of the Company and the SEC, (iii) give Merger
Sub and Parent and their counsel the opportunity to review and comment on all
amendments and supplements to the Proxy Statement and all responses to requests
for additional information and replies to comments prior to their being filed
with, or sent to, the SEC, (iv) use commercially reasonable efforts to obtain
the necessary approvals by its stockholders of this Agreement and the Merger and
(v) otherwise use its commercially reasonable efforts to comply with all legal
requirements applicable to the Stockholders Meeting. If at any time
prior to the Effective Time any information should be discovered by any party
hereto which should be set forth in a supplement or amendment to the Proxy
Statement in order to ensure that the Proxy Statement would not include any
misstatement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements made therein, in light of
the circumstances under which they were made, not misleading, the party that
discovers such information shall promptly notify the other parties hereto and,
to the extent required by applicable Law, an appropriate amendment or supplement
describing such information shall be promptly filed by the Company with the SEC
and disseminated by the Company to the stockholders of the Company.
(c) Notwithstanding
anything to the contrary contained in this Agreement, the Company may adjourn or
postpone the Stockholders Meeting (i) if, on the basis of advice of outside
counsel, it is necessary to do so in order to ensure that any information
requested specifically by the SEC or discovered by any party hereto that should
be set forth in a supplement or amendment to the Proxy Statement so that the
Proxy Statement would not include any misstatement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading, is provided to the Company’s stockholders or (ii) if as of
the time for which the Stockholders Meeting is originally scheduled there are
insufficient Common Shares represented (either in person or by proxy) to
constitute a quorum necessary to conduct the business to be conducted at the
Stockholders Meeting.
5.03
Filings and
Consents
.
(a) Each
of Parent and Merger Sub (and their respective affiliates, if applicable), on
the one hand, and the Company, on the other hand, shall make merger notification
filings, at such times as are consistent with its legal counsel’s judgment (but
in no event, in the case of clause (x) hereof, later than twenty (20) Business
Days following the execution and delivery of this Agreement) with (x) the United
States Federal Trade Commission (the “
FTC
”) and
the Antitrust Division of the United States Department of Justice (the “
DOJ
”)
relating to this Agreement and the transactions contemplated hereby as required
by the HSR Act, and (y) any foreign Governmental Authority that the parties
reasonably determine are necessary to be made under any other Antitrust
Laws. Each of Parent and the Company shall (i) cooperate and
coordinate with the other in the making of any filings or submissions that are
required to be made under any applicable Laws or Orders or requested to be made
by any Governmental Authority in connection with the Transactions, (ii) supply
the other or its outside counsel with any information that may be required or
requested by any Governmental Authority in connection with such filings or
submissions, and (iii) use all reasonable efforts to cause the expiration or
termination of the applicable waiting periods under any applicable Laws or
Orders as soon as reasonably practicable. If and to the extent
necessary to consummate and make effective the Transactions, to resolve
objections, if any, as the FTC, the DOJ, or any other Governmental Authority may
assert under any applicable Laws or Orders with respect to the Transactions,
and/or to avoid or eliminate each and every impediment under any Law or Order
that may be asserted by the FTC, the DOJ or any other Governmental Authority
with respect to the Transactions so as to enable consummation of the
Transactions in the most expeditious manner practicable, Parent, the Company and
their respective Subsidiaries shall promptly (and in any event on or before six
(6) months from the date of this Agreement) agree to any sale, divestiture,
license or other disposition of any business, product line or asset of the
Company that is not, taken as a whole or individually, in the Parent’s
reasonable judgment, material to the Company’s business (including any hold
separate order related to such sale, divestiture, license or disposition), and
the imposition of any restriction or limitation on the ability of any of them to
own or exercise control of such non-material business, product line or asset of
the Company (any such sale, divestiture, license, disposition, hold separate,
restriction or limitation, a “
Non-Material
Divestiture
”), and shall consummate any such Non-Material Divestiture in
the most expeditious manner practicable (and in any event on or before the
Expiration Date, consistent with
Section
7.02(b)
). Notwithstanding
anything to the contrary contained herein, nothing in this Agreement shall
require (i) Parent and/or Merger Sub (or their affiliates, if applicable) to
sell, divest, license, dispose of, hold separate, restrict or otherwise limit
any of their own businesses, product lines or assets or (ii) Parent, Merger Sub
or the Company to sell, divest, license, dispose of, hold separate, restrict or
otherwise limit any business, product line or asset of the Company which is,
taken as a whole or individually, in the Parent’s reasonable judgment, material
to the Company’s business.
(b) Each
of Parent and Merger Sub (and their respective affiliates, if applicable), on
the one hand, and the Company, on the other hand, shall promptly inform the
other of any communication from any Governmental Authority regarding any of the
Transactions in connection with any filings or investigations with, by or before
any Governmental Authority relating to this Agreement or the Transactions,
including any proceedings initiated by a private party. If any party
hereto or affiliate thereof shall receive a request for additional information
or documentary material from any Governmental Authority with respect to the
Transactions pursuant to the HSR Act or any other Antitrust Laws with respect to
which any such filings have been made, then such party shall use its
commercially reasonable efforts to make, or cause to be made, as soon as
reasonably practicable and after consultation with the other party, an
appropriate response to such request. In connection with and without
limiting the foregoing, to the extent reasonably practicable and unless
prohibited by applicable Law or by the applicable Governmental Authority, the
parties hereto agree to (i) give each other reasonable advance notice of all
meetings with any Governmental Authority relating to this Agreement or the
Transactions, (ii) keep the other party reasonably apprised with respect to any
communications with any Governmental Authority regarding this Agreement or the
Transactions, (iii) cooperate in the filing of any analyses, presentations,
memoranda, briefs, arguments, opinions or other written communications
explaining or defending this Agreement or the Transactions, articulating any
regulatory or competitive argument and/or responding to requests or objections
made by any Governmental Authority, and (iv) provide each other (or counsel of
each party, as appropriate) with copies of all written communications to or from
any Governmental Authority relating to this Agreement or the
Transactions. Any such disclosures or provisions of information by
one party to the other may be made on a counsel-only basis to the extent
required under applicable Law or as appropriate to protect confidential business
information.
5.04
Access to
Information
.
From the date of
this Agreement until the earlier of the Effective Time or the date this
Agreement is validly terminated in accordance with
Article 7
, and
subject to the requirements of any Law, including (a) any Antitrust Law, (b) any
applicable Law protecting the privacy of employees and personnel files, (c)
applicable undertakings given by the Company to others requiring confidential
treatment of documents and (d) appropriate limitations on the disclosure of
information to maintain attorney-client privilege, the Company will, and will
cause each of its affiliates, and each of their respective officers, directors,
employees, agents, counsel, accountants, investment bankers, financial advisors
and representatives (collectively, the “
Company
Representatives
”) to, give Merger Sub and Parent and their respective
officers, directors, employees, agents, counsel, accountants, investment
bankers, financial advisors, representatives, consultants and financing sources
(collectively, the “
Parent
Representatives
”) reasonable access, upon reasonable notice and during
the Company’s normal business hours, to the offices and other facilities, to the
officers and other Company Representatives, and to the books and records of the
Company and will cause the Company Representatives to furnish or make available
to Parent, Merger Sub and the Parent Representatives such financial and
operating data and such other information with respect to the business and
operations of the Company as Parent, Merger Sub or the Parent Representatives
may from time-to-time reasonably request. Any investigation pursuant
to this
Section
5.04
and information
provided, made available or delivered to Parent, Merger Sub or any Parent
Representative pursuant to this
Section
5.04
shall be
conducted in a manner that does not unreasonably interfere with the conduct of
the business of the Company or create a risk of damage or destruction to any
property or assets of the Company. Each of Parent and Merger Sub
will, and will cause the Parent Representatives to, hold any such information in
confidence in accordance with the terms of the Confidentiality Agreement (as
defined below). Except as otherwise agreed to by the Company, and
notwithstanding termination of this Agreement, the terms and provisions of the
Confidentiality Agreement, dated as of January 5, 2010 (the “
Confidentiality
Agreement
”), between Parent and the Company shall apply to all
information furnished to any Parent Representative by any Company Representative
hereunder or thereunder. No investigation pursuant to this
Section
5.04
or information
provided, made available or delivered to Parent, Merger Sub or any Parent
Representative pursuant to this
Section
5.04
shall affect any
representations, warranties, covenants, conditions, remedies or rights of the
parties hereto contained in this Agreement.
5.05
Public
Announcements
.
Promptly
following the execution of this Agreement, each of Parent and the Company may
issue a press release, in each case, in a form mutually agreed to by Parent and
the Company announcing the execution of this Agreement and the
Transactions. Thereafter, each of Parent and Merger Sub, on the one
hand, and the Company, on the other hand, hereby agrees to (a) consult promptly
with the other party prior to issuing any press release or otherwise making any
public statement with respect to the Merger and the Transactions and (b) provide
to the other party for review a copy of any such press release or statement, and
shall not issue any such press release or make any such public statement prior
to such consultation and review by the other party, unless required by
applicable Law or rules and regulations of any securities exchange, in which
case the party shall use its commercially reasonable efforts to allow the other
party reasonable time to comment on such release or announcement in advance of
such issuance. Notwithstanding the foregoing, the restrictions set
forth in this
Section
5.05
shall not apply
to any release or announcement made or proposed to be made by the Company
following a Recommendation Change.
5.06
Indemnification;
Directors’ and Officers’ Insurance
.
(a) The
Surviving Corporation shall (and Parent shall cause the Surviving Corporation
to) cause the certificate of incorporation and the bylaws of the Surviving
Corporation to contain provisions with respect to indemnification, advancement
of expenses and director exculpation substantially similar to those set forth in
the Company’s certificate of incorporation and bylaws as in effect at the date
of this Agreement (to the extent consistent with applicable Law), which
provisions shall not be amended, repealed or otherwise modified in any manner
that would adversely affect the rights thereunder of the Persons who at any time
prior to the Effective Time were entitled to indemnification, advancement of
expenses or exculpation under the Company’s certificate of incorporation or
bylaws in respect of actions or omissions occurring at or prior to the Effective
Time (including the Transactions), unless otherwise required by applicable
Law. In addition, the Surviving Corporation shall (and Parent shall
cause the Surviving Corporation to) honor and fulfill in all respects the
obligations of the Company under those indemnification agreements set forth on
Section
5.06(a)
of the
Company Disclosure Schedule.
(b) From
and after the Effective Time and until the expiration of any applicable statutes
of limitation, to the fullest extent permitted by applicable Law (but subject to
Section
5.06(c)
)
, the Surviving
Corporation shall (and Parent shall cause the Surviving Corporation to)
indemnify, defend and hold harmless each Person who is or has been prior to the
date of this Agreement or who becomes prior to the Effective Time an officer,
director, employee or agent of the Company (collectively, the “
Indemnified
Parties
”) against all losses, Claims, damages, judgments, fines, fees and
expenses (including reasonable attorneys’ fees and investigation expenses),
liabilities or amounts that are paid in settlement of, or otherwise incurred
(“
Losses
”)
(but only to the extent such Losses are not otherwise covered by insurance and
paid), in connection with any Claim, whether civil, criminal, administrative or
investigative, to which any Indemnified Party is or may become a party to by
virtue of his or her service as a present or former director, officer, employee
or agent of the Company and arising out of actual or alleged events, actions or
omissions occurring or alleged to have occurred at or prior to the Effective
Time (including the Transactions), in each case, to the fullest extent permitted
under the DGCL and provided in the Company’s certificate of incorporation and
bylaws as in effect at the date of this Agreement (and shall pay expenses in
advance of the final disposition of the Claim(s) that are reasonably incurred in
defending any such Claim to each Indemnified Party to the fullest extent
permitted under the DGCL as provided in the Company’s certificate of
incorporation and bylaws as in effect at the date of this Agreement, upon
receipt from the Indemnified Party to whom expenses are advanced of the
undertaking to repay such advances contemplated by the DGCL).
(c) Any
Indemnified Party wishing to claim indemnification under this
Section
5.06
after the
Effective Time, upon learning of any such Claim, shall notify the Surviving
Corporation thereof;
provided
,
however
, the failure
to so notify the Surviving Corporation shall not relieve the Surviving
Corporation from any liability that the Surviving Corporation may have under
this
Section
5.06
, except to the
extent such failure materially prejudices the Surviving
Corporation. In the event of any such Claim, the Surviving
Corporation shall have the right to assume the defense thereof and the Surviving
Corporation shall not be liable to such Indemnified Party for any legal expenses
of other counsel or any other expenses subsequently incurred by such Indemnified
Party in connection with the defense thereof, except that if the Surviving
Corporation elects not to assume such defense or if there is an actual or
potential conflict of interest between, or different defenses exist for the
Surviving Corporation and the Indemnified Party, the Indemnified Party may
retain counsel reasonably satisfactory to the Surviving Corporation and the
Surviving Corporation shall pay all reasonable fees and expenses of such counsel
for the Indemnified Party promptly as statements therefor are received by the
Surviving Corporation;
provided
,
however
, that (i) the
Surviving Corporation shall not, in connection with any such Claim or separate
but substantially similar Claims arising out of the same general allegations, be
liable for the fees and expenses of more than one separate firm of attorneys at
any time for all Indemnified Parties, (ii) the Surviving Corporation and the
Indemnified Parties will cooperate in the defense of any such matter, (iii) the
Surviving Corporation shall not be liable for any settlement effected without
its prior written consent and (iv) neither the Surviving Corporation nor any of
its affiliates (including Parent) shall settle or otherwise compromise or
consent to the entry of any judgment or otherwise seek termination with respect
to any Claim, investigation or inquiry for which indemnification may be sought
by an Indemnified Party under this Agreement, without such Indemnified Party’s
prior written consent, unless such settlement, compromise, consent or
termination includes an unconditional release of all Indemnified Persons from
all liability arising out of such claim, proceeding, investigation or inquiry;
and
provided
,
further
, that
the Surviving Corporation shall not have any obligation hereunder to any
Indemnified Party if and when a court of competent jurisdiction shall ultimately
determine that the indemnification of such Indemnified Party in the manner
contemplated hereby is prohibited by applicable Law.
(d) Effective
upon the Effective Time, Parent shall cause to be purchased and maintained a six
(6) year “
tail
” prepaid
liability insurance policy in respect of acts or omissions occurring at or prior
to the Effective Time, covering each Person currently covered by the Company’s
directors’ and officers’ liability insurance policy on terms, including with
respect to coverage and amount, no less favorable to such directors and officers
than those of such policy in effect on the date of this Agreement;
provided
,
however
, that in no
event shall Parent or the Surviving Corporation be required to expend for such
policies pursuant to this sentence an annual premium amount in excess of 200% of
the annual premiums currently paid by the Company for such insurance; and
provided
,
further
, that if the
annual premiums of such insurance coverage exceed such amount, the Surviving
Corporation shall obtain a policy with the greatest coverage available for a
cost not exceeding such amount.
(e) This
Section
5.06
shall survive
the consummation of the Merger and is intended to be for the benefit of, and
shall be enforceable by, the Indemnified Parties referred to herein, their
heirs, legal representatives, successors, assigns and personal representatives
and shall be binding on the Surviving Corporation and its successors and
assigns. The provisions of this
Section
5.06
are in addition
to, and not in substitution for, any other rights to indemnification that the
Indemnified Parties, their heirs and personal representatives may have by
contract or otherwise.
(f) If
the Surviving Corporation or any of its successors or assigns (i) consolidates
with or merges into any other Person and shall not be the continuing or
surviving corporation or entity of such consolidation or merger or (ii)
transfers or conveys all or substantially all of its properties and assets to
any Person, then, and in each case, as a condition to such consolidation,
merger, transfer or conveyance, proper provision shall be made so that the
successors and assigns of the Surviving Corporation shall assume and agree to
perform the obligations set forth in this
Section
5.06
.
5.07
Further
Assurances; Commercially Reasonable Efforts
.
Except as
otherwise provided in this Agreement, from the date of this Agreement until the
earlier of the termination of this Agreement pursuant to Article 7 or the
Effective Time, each of the parties hereto shall cooperate with the other
parties and use (and shall cause its subsidiaries and affiliates to use)
commercially reasonable efforts to take, or cause to be taken, all such actions,
and to do, or cause to be done, all such things as may be necessary or
appropriate in order to effectuate, as expeditiously as practicable, the Merger
and the Transactions, including causing the conditions to the Merger set forth
in Article 6 to be satisfied. Notwithstanding anything to the
contrary herein, the Company shall not be required prior to the Effective Time
to pay any consent fee, “profit sharing” payment or other consideration
(including increased rent or other payments), or to provide any additional
security (including a guaranty), to obtain the consent of any third party under
any Contract.
5.08
Third
Party Standstill Agreements
.
From the date of
this Agreement until the earlier of the termination of this Agreement pursuant
to
Article 7
or the
Effective Time, (a) the Company shall not terminate, amend, modify or waive any
provision of any confidentiality or standstill Contract to which the Company is
a party (other than involving Parent or its affiliates) and (b) the Company
agrees to use commercially reasonable efforts to enforce the provisions of any
such Contracts, including seeking injunctions to prevent any breaches of such
agreements or to enforce specifically the terms and provisions thereof in a
court in the United States or any state thereof having
jurisdiction.
5.09
No
Solicitation
.
(a) From
and after the date of this Agreement until the earlier of the Effective Time or
the termination of this Agreement pursuant to
Article 7
, the
Company and its officers and directors shall not, and the Company shall cause
the Company Representatives not to, (i) solicit, initiate or encourage
(including by way of furnishing information or assistance), or take any other
action to facilitate, any inquiry in connection with, or the making of any
proposal from any Person that constitutes, or would reasonably be expected to
lead to, an Acquisition Proposal (as defined in
Section
5.09(f)
), (ii)
maintain or continue, or enter into or participate in, any discussion or
negotiation with any Person (other than Merger Sub, Parent or any of the Parent
Representatives, as applicable) regarding an Acquisition Proposal, or furnish to
any Person (other than Merger Sub, Parent or any of the Parent Representatives,
as applicable) any information or otherwise cooperate in any way with, or assist
or participate in, any effort or attempt by any other Person (other than Merger
Sub, Parent or any of the Parent Representatives, as applicable) to make or
effect an Acquisition Proposal, or (iii) (A) except as set forth in
Section
5.09(b)
, withdraw or
modify (in a manner adverse to Parent) its approval or favorable recommendation
of this Agreement and the Merger, or approve, endorse or recommend an
Acquisition Proposal or (B) enter into any Contract, arrangement or
understanding with respect to any Acquisition Proposal (other than an Acceptable
Confidentiality Agreement);
provided
,
however
, that nothing
contained in this
Section
5.09
or any other
provision of this Agreement shall prohibit the Company Board, directly or
indirectly through the Company Representatives, prior to obtaining the
Stockholder Approval, from furnishing non-public information to, or entering
into or participating in discussions or negotiations with, any Person that makes
an unsolicited written, bona fide Acquisition Proposal (which did not result
from a breach of this
Section
5.09
) that provides
for per Common Share consideration that is greater than the Merger Consideration
if (A) the Company Board determines in good faith after consultation with its
outside legal counsel that failure to take such action would be inconsistent
with its fiduciary duties to the Company’s stockholders under applicable Law,
(B) prior to entering into or participating in discussions with such Person, the
Company Board determines in good
faith,
after consultation with its outside legal counsel and the Financial Advisor or
other independent financial advisor of nationally recognized reputation, that
the Acquisition Proposal constitutes or would reasonably be expected to lead to
a Superior Proposal (as defined in
Section
5.09(g)
) and (C)
prior to furnishing any non-public information to, or entering into or
participating in discussions or negotiations with, such Person, (x) the Company
receives from such Person an executed confidentiality Contract (which Contract
shall be provided to Parent for informational purposes) with terms no less
favorable to the Company than those contained in the Confidentiality Agreement,
it being understood and agreed that such confidentiality Contract need not
contain a “standstill” or other similar provision that prohibits such third
party from making any proposal to acquire the Company, acquire securities of the
Company or nominate for election members of the Company Board (such
confidentiality Contract, an “
Acceptable
Confidentiality Agreement
”) and (y) concurrently with its delivery to
such Person, the Company delivers to Parent and Merger Sub all such information
not previously provided to Parent and Merger Sub.
(b) Notwithstanding
anything to the contrary contained in
Section
5.02(a)
, the Company
Board may, prior to Stockholder Approval at the Stockholders Meeting, (x)
withdraw or modify (in a manner adverse to Parent) its approval or
recommendation of this Agreement and the Merger, (y) approve or recommend any
Acquisition Proposal or (z) recommend that the stockholders of the Company
reject this Agreement or the Merger (each Company Board action set forth in
clauses (x) through (z) of this Section is referred to herein as a “
Recommendation
Change
”) if the Company Board determines in good faith, after
consultation with its outside legal counsel and the Financial Advisor or other
independent financial advisor of nationally recognized reputation, that such
Acquisition Proposal constitutes a Superior Proposal;
provided
, that prior
to reaching such conclusions (A) the Company Board shall have determined in good
faith, after consultation with its outside legal counsel, that the failure to
effect such Recommendation Change relating to such Superior Proposal would be
inconsistent with its fiduciary duties to the Company’s stockholders under
applicable Law; (B) the Company shall have notified Parent in writing that it
intends to effect such Recommendation Change relating to such Superior Proposal,
attaching the current version of the definitive agreement relating to such
Superior Proposal (a “
Superior Proposal
Notice
”) (it being understood that the Superior Proposal Notice shall not
constitute a Recommendation Change for purposes of this Agreement); (C) if
requested by Parent, the Company shall have made the Company Representatives
available to discuss with the Parent Representatives, and to negotiate in good
faith with the Parent Representatives, any proposed modifications to the terms
and conditions of this Agreement during the three (3) Business Day period
following delivery by the Company to Parent of such Superior Proposal Notice;
and (D) if Parent shall have delivered to the Company during such three (3)
Business Day period a written, binding and irrevocable (through the expiration
of such three (3) Business Day period) offer which is set forth in a definitive
written amendment to this Agreement delivered to the Company and executed on
behalf of Parent and Merger Sub, the Company Board shall have determined in good
faith, after considering the terms of such offer by Parent, that the Acquisition
Proposal giving rise to such Superior Proposal Notice continues to constitute a
Superior Proposal. If the Company Board shall have determined that such
Acquisition Proposal no longer constitutes a Superior Proposal or if the terms
of any Acquisition Proposal are modified in any material respect, then, in each
case, any such modified Acquisition Proposal from the party that submitted such
Acquisition Proposal shall require a new Superior Proposal Notice and a new
three (3) Business Day period as set forth above.
(c) The
Company (i) will promptly (and in no event later than within 24 hours) notify
Parent orally and in writing of the receipt by the Company of any Acquisition
Proposal or any inquiry or request for discussion regarding an Acquisition
Proposal including any request for information, the terms and conditions of such
request, Acquisition Proposal or inquiry and the identity of the Person making
such request, Acquisition Proposal or inquiry (including copies of any document
or correspondence evidencing such Acquisition Proposal or inquiry) and (ii) will
keep Parent informed of any material changes (including any changes to price,
merger consideration, financing terms, if any, and closing conditions) to any
such Acquisition Proposal, inquiry or request. The Company shall not,
and shall cause the Company Representatives not to, enter into any Contract with
any Person subsequent to the date of this Agreement that would restrict the
Company’s ability to provide such information relating to the Company to Parent,
and the Company is not currently a party to any Contract that prohibits the
Company from providing the information relating to the Company described in this
Section
5.09(c)
to
Parent.
(d) Nothing
contained in this Agreement shall prevent the Company Board from (i) taking, and
disclosing to the Company’s stockholders, a position contemplated by Rule 14d-9
or Rule 14e-2 promulgated under the Exchange Act with regard to any tender offer
or exchange offer that is an Acquisition Proposal or (ii) making any disclosure
to the Company’s stockholders that the Company Board determines in good faith,
after consultation with its outside legal counsel, that the failure to make such
disclosure would be inconsistent with its fiduciary duties to the Company’s
stockholders under applicable Law, so long as the Company at least one (1)
Business Day prior to making such disclosure notifies Parent (or as soon as
possible if notifying Parent at least one (1) Business Day prior to making such
disclosure is impractical) and, if requested in writing by Parent, such
disclosure shall contain a reaffirmation of the Company Board’s recommendation
to the stockholders of the Company to approve and adopt this Agreement;
provided
,
however
, if Parent
requests reaffirmation in writing and the Company fails to make such
reaffirmation in such disclosure, then such failure shall be deemed to be a
Recommendation Change;
provided
further
, that none of
the Company, the Company Board or any Company Representative, except as
permitted by
Section
5.09(b)
, shall
propose to approve or recommend any Acquisition Proposal or make a
Recommendation Change. For the avoidance of doubt, a “stop, look or
listen” communication by the Company Board to the Company’s stockholders
pursuant to Rule 14d-9(f) of the Exchange Act, or any substantially similar
communication, shall not be deemed to be a Recommendation Change.
(e) The
Company shall immediately cease, and cause each Company Representative to
immediately cease, any and all existing activities, discussions or negotiations
with any parties (other than Merger Sub, Parent or any of the Parent
Representatives, as applicable) conducted heretofore with respect to any
Acquisition Proposal, and shall promptly request any such parties in possession
of confidential information about the Company that was furnished by or on behalf
of the Company in connection with such Acquisition Proposal to return or destroy
all such information in the possession of any such party or its
representatives.
(f) For
purposes of this Agreement, “
Acquisition
Proposal
” shall mean any offer or proposal for a merger, acquisition,
recapitalization, consolidation, tender offer, exchange offer or similar
transaction involving, or any proposal or offer to purchase or acquire in any
manner (A) assets representing 20% or more of the assets of the Company or (B)
an equity interest in 20% or more of the voting securities of the Company, other
than the Transactions contemplated by this Agreement.
(g) For
purposes of this Agreement, “
Superior
Proposal
” shall mean any Acquisition Proposal by a Person other than
Parent, Merger Sub or any of their respective affiliates (substituting 50% for
the 20% thresholds set forth in the definition of “
Acquisition
Proposal
”) that the Company Board has determined in good faith, after
consultation with its outside counsel and the Financial Advisor or other
independent financial advisor of nationally recognized reputation, and taking
into account all financial, regulatory, legal and other aspects of such
Acquisition Proposal, (i) is more favorable from a financial point of view to
the Company’s stockholders than the Merger (including any adjustment to the
terms and conditions thereof proposed in writing by Parent in response to any
such Acquisition Proposal) and which such Acquisition Proposal, if it includes
non-cash consideration, would result in the receipt by the Company’s
stockholders of consideration economically superior to the consideration such
holders are to receive in the Merger; (ii) is reasonably capable of being
consummated no later than nine (9) months from the receipt of such Acquisition
Proposal; and (iii) for which financing, to the extent required, is then fully
committed.
5.10
Termination
of Registration
.
Each of the
parties hereto agrees to cooperate with the other party in taking, or causing to
be taken, all actions reasonably necessary to terminate the registration of the
Common Shares under the Exchange Act;
provided
that such
termination shall not be effective until or after the Effective
Time.
5.11
Employment
Matters.
(a) From
and after the Effective Time, the Surviving Corporation shall (and Parent
shall cause the Surviving Corporation to) honor the change in control agreements
set forth on
Section
5.11(a)
of the
Company Disclosure Schedule in accordance with their terms as in effect
immediately prior to the Effective Time; provided, that nothing in this sentence
shall prohibit Parent from amending or terminating, or from causing the
Surviving Corporation to amend or terminate, any such change in control
agreement in accordance with its terms or if otherwise required by applicable
Law (with the consent of the employee covered by any such change in control
agreement if required).
(b) Until
the date which is three (3) months after the Effective Time, Parent shall or
shall cause the Surviving Corporation to provide, to each individual who is
actively employed by the Company immediately prior to the Effective Time and who
remains an employee of the Surviving Corporation during such period (each, a
“
Continuing
Employee
”), (i) at least the same level of base salary or regular wages
and (ii) employee benefits that are no less favorable in the aggregate, than
those provided by the Company to Continuing Employees generally immediately
prior to the Effective Time pursuant to the Benefit Plans (excluding any change
in control and equity benefits). Following the Effective Time, Parent
agrees that the Surviving Corporation shall cause the Surviving Corporation’s
employee benefit plans established following the Effective Time (if any) and any
other employee benefit plans covering Continuing Employees following the
Effective Time (collectively, the “
Post-Closing
Plans
”) to recognize the service of each Continuing Employee (to the
extent such service was recognized by the Company) with the Company prior to the
Effective Time for purposes of eligibility to participate and vesting only;
provided
,
however
, that such
service need not and shall not be credited for new Parent equity-based awards or
for benefit accrual purposes under any Post-Closing Plan. In
addition, and without limiting the generality of the foregoing, for the calendar
year including the Effective Time: (i) each Continuing Employee shall be
immediately eligible to participate, without any waiting time, in any and all
Post-Closing Plans (other than the Benefit Plans) to the extent coverage under
any such Post-Closing Plan replaces coverage under a comparable Benefit Plan in
which such Continuing Employee participates immediately before the Effective
Time; (ii) the Continuing Employees and his or her covered dependents shall not
be required to satisfy any deductible, co-payment, out-of-pocket maximum or
similar requirements under the Post-Closing Plans that provide medical, dental,
pharmaceutical, vision and/or disability benefits (collectively, the “
Post-Closing
Welfare Plans
”) to the extent of amounts previously credited for such
purposes under comparable Benefit Plans that provide medical, dental,
pharmaceutical, vision and/or disability benefits (the “
Company Welfare
Plans
”); and (iii) any waiting periods, pre-existing condition
exclusions, and evidence of insurability requirements contained in such
Post-Closing Welfare Plans shall be waived for such Continuing Employee and his
or her covered dependents (except to the extent any such waiting period,
pre-existing condition exclusion, or evidence of insurability requirement was in
effect with respect to such individual and had not been satisfied under the
applicable Company Welfare Plan in which the individual then participates or
participated as of immediately prior to the Effective Time). Any
vacation or paid time off accrued but unused by a Continuing Employee as of
immediately prior to the Effective Time (the “
Current PTO
Liability
”) shall be credited to such Continuing Employee following the
Effective Time.
(c) Notwithstanding
anything to the contrary set forth in this Agreement, no provision of this
Agreement shall be deemed to (i) guarantee employment for any period of time
for, or preclude the ability of Parent or the Surviving Corporation to
terminate, any Continuing Employee for any reason, (ii) be construed as an
amendment of any employee benefit plan or policy of Parent or the Surviving
Corporation or their affiliates, or (iii) create any third-party beneficiary
rights in any employee or former employee (including any beneficiary or
dependent of such employee or former employee) of the Company in respect of
their employment or any other matter.
5.12
Merger
Sub
.
Parent will take
all action necessary (a) to cause Merger Sub to perform its obligations under
this Agreement to consummate the Merger on the terms and conditions set forth in
this Agreement and (b) to ensure that, prior to the Effective Time, Merger Sub
shall not conduct any business or make any investments other than as
specifically contemplated by this Agreement.
5.13
Stockholder
Litigation
.
The Company shall
promptly advise Parent in writing of any Claim brought by any stockholder of the
Company against the Company and/or its directors (in their capacity as such)
relating to this Agreement or the Transactions. Each of the parties
hereto shall give the others the reasonable opportunity to participate in the
defense of any stockholder Claim against the Company, Parent or Merger Sub, as
applicable, and their respective directors (in their capacity as such) relating
to this Agreement or the Transactions. The Company shall not settle
any Claim currently pending, or commenced after the date of this Agreement,
against the Company or any of its directors (in their capacity as such) by any
stockholder of the Company or holder of any Options, Warrants, Restricted Stock
or Restricted Stock Units relating to this Agreement or the Transactions, in
each case, without the prior written consent of Parent (which consent shall not
be unreasonably withheld, conditioned or delayed).
5.14
Section
16 Matters
.
Prior to the
Effective Time, the Company shall take all such steps as may be reasonably
necessary and permitted to cause the Transactions, including any dispositions of
Company Shares (including derivative securities with respect to such Common
Shares and including the deemed disposition and cancellation of the Options in
the Merger) by each individual who is or will be subject to the reporting
requirements of Section 16(a) of the Exchange Act with respect to the Company,
to be exempt under Rule 16b-3 promulgated under the Exchange Act.
5.15
State
Takeover Statutes
.
If any “
fair price
,” “
moratorium
,” “
control share acquisition
,”
“
business combination
”
or other similar anti-takeover Laws in the United States (including Section 203
of the DGCL) is or may become applicable to the Transactions, the parties shall
use commercially reasonable efforts to take such actions as are reasonably
necessary so that the Transactions may be consummated as promptly as practicable
on the terms contemplated hereby, which efforts shall include the Company Board
taking all actions permitted under Applicable Law to render such statutes
inapplicable to the Transactions.
5.16
Notification
of Certain Matters
.
The Company
shall give prompt notice to Parent and Merger Sub, and Parent and Merger Sub
shall give prompt notice to the Company of (a) any written notice or other
communication received from any Person alleging that the con
sent of such
Person is required in connection with the Transactions, (b) any notice from any
Governmental Authority in connection with the Transactions, (c) any actions,
suits, Claims, investigations or proceedings commenced or, to such party’s
Knowledge, threatened against, relating to or involving or otherwise affecting
such party or any of its subsidiaries which relate to the Transactions, (d) the
discovery of any fact or circumstance, or the occurrence or non-occurrence of
any event, that would reasonably be expected to cause (i) any representation or
warranty made by such party contained in this Agreement that is qualified as to
materiality or “Company Material Adverse Effect” or “Parent Material Adverse
Effect,” as applicable, to be untrue or inac
curate (ii) any
representation or warranty made by such party contained in this Agreement that
is not qualified as to materiality or “Company Material Adverse Effect” or
“Parent Material Adverse Effect,” as applicable, to be untrue or inaccurate in
any manner that would cause the condition set forth in
Section
6.02(a)
or
Section
6.03(a)
, as
the case may be, to not be satisfied or (iii) any other condition to the Merger
set forth in
Article 6
to be incapable of
be
ing satisfied prior to the Expiration Date, and (e) any material
failure of such party to comply with or satisfy any covenant or agreement to be
complied with or satisfied by it hereunder;
provided
,
however
, that the delivery of any
notice pursuant to this
Section
5.16
shall not (i) cure any breach of, or non-compliance with, any other provision
of this Agreement or (ii) limit the remedies available to the party receiving
such notice.
5.17
Retention
Agreements
.
Parent shall
provide certain employees individual retention agreements prepared by Parent
(the “
Retention
Agreements
”); provided that no Retention Agreement shall require the
Company to make any payments to any employees prior to the Effective Time.
The Company shall (i) assist Parent, as and to the extent reasonably requested
by Parent, in the creation of the Retention Agreements, (ii) provide Parent with
such information regarding its employees as may be reasonably requested by
Parent for such purposes, which information may include employee names,
addresses, titles, compensation and current equity holdings, (iii) provide
Parent access to the Company’s employees and (iv) cause a duly authorized
officer of the Company to execute the Retention Agreements on behalf of the
Company. In the event any employees shall enter into Retention Agreements,
from the date of entering into the Retention Agreements until the earlier of the
termination of this Agreement pursuant to Article 7 or the Effective Time, the
Company shall not terminate, amend, withdraw, revoke, modify or waive any
provision of any Retention Agreement without Parent's prior written
approval
5.18
Corrective
Action Plan
.
The Company shall
in all material respects comply with and implement the corrective action plans
set forth on
Section
5.18
of the Company
Disclosure Schedule; provided, however, that this
Section
5.18
shall have no
effect following the occurrence of a Warning Letter Event, in which case
Parent’s sole and exclusive recourse shall be a termination of this Agreement
pursuant to
Section
7.03(c)
(i)
with concurrent
payment of the Reverse Break Up Fee pursuant to
Section
8.01(d)
.
ARTICLE
6
CONDITIONS
TO CONSUMMATION OF THE MERGER
6.01
Conditions
to the Obligations of Each Party
.
The respective
obligations of the Company, Parent and Merger Sub to consummate the Merger are
subject to the satisfaction or waiver (where permissible under applicable Law),
at or before the Effective Time, of each of the following
conditions:
(a)
Company Stockholder
Approval
. The Company shall have obtained Stockholder Approval
in accordance with the DGCL, and the Company’s certificate of incorporation and
bylaws;
(b)
No Orders and
Injunctions
. No Governmental Authority in the United States or
in any of the jurisdictions set forth in
Section
6.01(b)
of the Parent
Disclosure Schedule (the “
Identified
Jurisdictions
”), shall have enacted, issued, promulgated, enforced or
entered any Law or Order that is then in effect and that has the effect of
preventing or prohibiting the consummation of the Merger or otherwise imposing
material limitations on the ability of Merger Sub and Parent to effectively
acquire, hold or operate the business of the Company or Parent;
provided
,
however
, that each of
the parties hereto shall use its commercially reasonable efforts to appeal any
such Order or otherwise have any such Order vacated or removed; and
(c)
Antitrust
Approvals
. (i) Any waiting period (and any extension thereof)
under the HSR Act shall have expired or terminated and (ii) any waiting period
(and any extension thereof), and any necessary consents, approvals, Permits of,
authorizations from, notifications to and filings with any Governmental
Authorities, under any Antitrust Laws of the Identified Jurisdictions, to the
extent applicable, shall have been made or obtained.
6.02
Conditions
to Obligations of Merger Sub and Parent
.
The obligations
of each of Merger Sub and Parent to consummate the Merger are subject to the
satisfaction, at or before the Effective Time, of each of the following
additional conditions, unless waived by Parent in writing prior to the Effective
Time:
(a)
Representations and
Warranties
. The representations and warranties of the Company
contained in this Agreement shall be true and correct in all respects as of the
Closing Date as if made on and as of the Closing Date (except to the extent such
representations and warranties expressly relate to an earlier date, in which
case as of such earlier date), except that any inaccuracies in such
representations and warranties will be disregarded if the circumstances giving
rise to all such inaccuracies (considered collectively) do not constitute a
Company Material Adverse Effect (other than (i) the representations and
warranties set forth in
Sections
3.02
,
3.03
(except as set
forth in clause (ii) below),
3.04
,
3.05
,
3.18
,
3.19
and
3.20
which shall be
true and correct in all respects and (ii) the representations and warranties set
forth in
Section
3.03
which shall be
true and correct in all respects, except for insignificant deviations in
numerical amounts set forth in the second, third and fourth sentence of
Section
3.03
, in each case,
as of the Closing Date as if made on and as of the Closing Date (except to the
extent such representations and warranties expressly relate to an earlier date,
in which case as if made as of such earlier date));
provided
,
however
, that for
purposes of determining the accuracy of such representations and warranties, all
“
Company Material Adverse
Effect
” qualifications and other materiality qualifications, and any
similar qualifications, contained in such representations and warranties shall
be disregarded;
(b)
Covenants and
Agreements
. The Company shall have, in all material respects,
performed all obligations and complied with all agreements and covenants
required to be performed by it or complied with by it under this Agreement at or
prior to the Effective Time;
(c)
Company Material Adverse
Effect
. Since the date of this Agreement, there shall not have
occurred any Company Material Adverse Effect which is then
continuing. For the avoidance of doubt, Parent may not assert that
the condition in this
Section
6.02(c)
has not been
satisfied if the fact, circumstance, effect, event, change or occurrence giving
rise to such Company Material Adverse Effect was disclosed in the Company
Disclosure Schedule;
(d)
Officers’
Certificate
. At the Closing, the Company shall deliver an
Officers’ Certificate, duly executed by the Company’s Chief Executive Officer or
Chief Financial Officer on behalf of the Company and dated as of the Closing
Date, stating that the conditions to Closing set forth in
Sections
6.02(a)
,
(b)
and
(c)
above have been
satisfied; and
(e)
Dissenting
Shares
. The Dissenting Shares shall not constitute more than
10% of the aggregate number of Common Shares outstanding as of the date of this
Agreement.
6.03
Conditions
to Obligation of the Company
.
The obligations
of the Company to consummate the Merger are subject to the satisfaction, at or
before the Effective Time, of each of the following additional conditions,
unless waived by the Company in writing prior to the Effective
Time:
(a)
Representations and
Warranties
. The representations and warranties of Parent and
Merger Sub contained in this Agreement shall be true and correct in all respects
as of the Closing Date as if made on and as of the Closing Date (except to the
extent such representations and warranties expressly relate to an earlier date,
in which case as of such earlier date), except that any inaccuracies in such
representations and warranties will be disregarded if the circumstances giving
rise to all such inaccuracies (considered collectively) do not constitute a
Parent Material Adverse Effect (other than the representations and warranties
set forth in
Section
4.03
and
Section
4.05
, which shall be
true and correct in all material respects as of the Closing Date as if made on
and as of the Closing Date);
provided
,
however
, that for
purposes of determining the accuracy of such representations and warranties, all
“
Parent Material Adverse
Effect
” qualifications and other materiality qualifications, and any
similar qualifications, contained in such representations and warranties shall
be disregarded;
(b)
Covenants and
Agreements
. Each of Merger Sub and Parent shall have, in all
material respects, performed all obligations and complied with all agreements
and covenants required to be performed by them or complied with by them under
this Agreement at or prior to the Effective Time; and
(c)
Officers’
Certificate
. At the Closing, each of Merger Sub and Parent
shall deliver an Officers’ Certificate, duly executed by their respective Chief
Financial Officers on behalf of Merger Sub and Parent and dated as of the
Closing Date, stating that the conditions to Closing set forth in
Sections
6.03(a)
and
(b)
above have been
satisfied.
ARTICLE
7
TERMINATION
7.01
Termination
by Mutual Consent
.
This Agreement
may be terminated and the Merger and other Transactions may be abandoned at any
time prior to the Effective Time, before or after Stockholder Approval, by the
mutual written consent of the Company (acting under the direction of the Company
Board) and Parent.
7.02
Termination
by Parent or the Company
.
This Agreement
may be terminated and the Merger and other Transactions may be abandoned at any
time prior to the Effective Time, before or after Stockholder Approval, by
Parent, on the one hand, or the Company, acting under the direction of the
Company Board, on the other hand, if:
(a) any
Governmental Authority shall have (i) notified Parent or Company, or shall have
announced, that it has voted to challenge the consummation or legality of the
Merger in a judicial or administrative proceeding;
provided
,
however
, that the
right to terminate this Agreement pursuant to this
Section
7.02(a)
shall not be
available to any party that has failed to perform in all material respects its
obligations under
Section
5.03
,
Section
5.07
or the proviso
contained in
Section
6.01(b)
;
or (ii) issued or
entered any Order that is in effect and has the effect of preventing or
prohibiting the consummation of the Merger;
(b) the
Merger shall not have been consummated on or before six (6) months from the date
of this Agreement;
provided
,
however
, that if on
such date, all of the conditions to the Merger set forth in Article 6, other
than (x) any of the conditions that by their nature are only to be satisfied at
the Effective Time and (y) any of the conditions set forth in or
Section
6.01(b)
and
Section
6.01(c)
(but solely,
in the case of
Section
6.01(b)
, to the extent the matter giving rise to the failure of such
condition is related to Antitrust Laws), have been satisfied or waived in
writing, then at the election of either the Company or Parent, such date shall
be extended for up to three (3) months (such date, as may be so extended, the
“
Expiration
Date
”);
provided
,
however
, that Parent
and the Company shall use commercially reasonable efforts to consummate any
necessary Non-Material Divestiture prior to the Expiration Date; and
provided
,
further
, that the
right to terminate this Agreement under this
Section
7.02(b)
shall not be
available to any party whose failure to perform any covenant or obligation under
this Agreement has been the principal cause of or principally resulted in the
failure of the Merger to have been consummated on or before the Expiration Date;
or
(c) upon
a vote at a duly held Stockholders Meeting (including any adjournment or
postponement thereof) to obtain Stockholder Approval in accordance with this
Agreement, Stockholder Approval shall not have been obtained.
7.03
Termination
by Parent
.
This Agreement
may be terminated and the Merger and other Transactions may be abandoned at any
time prior to the Effective Time, before or after Stockholder Approval, by
Parent, if:
(a) the
Company shall have breached any of its representations, warranties, covenants or
other agreements set forth in this Agreement or any such representation or
warranty shall have become untrue after the date of this Agreement (in either
case, a “
Terminating
Company Breach
”) and such Terminating Company Breach (i) would give rise
to the failure of a condition set forth in
Section
6.02(a)
or
Section
6.02(b)
and (ii) has
not been cured within thirty (30) days after written notice thereof is received
by the Company;
provided
that Parent
shall have no right to terminate this Agreement in connection with a Terminating
Company Breach if there is an uncured Terminating Merger Sub Breach at the time
of the Terminating Company Breach or at the time of the purported termination in
connection with a Terminating Company Breach;
(b) a
Recommendation Change shall have occurred; or
(c) the
Company (i) receives any warning letter, or similar written notice, or
correspondence from the FDA or any other Governmental Authority regulating
medical devices, relating to quality issues, that in the opinion of Parent,
would reasonably be expected to materially impair, or lead to actions that
materially impair, the business of the Company (a “
Warning Letter
Event
”); provided that concurrently with and as a condition to the
termination of this Agreement, Parent pays the Reverse Break Fee, and/or (ii)
receives notice of, or is subject to, any consent decree relating to FDA
regulatory or quality issues.
7.04
Termination
by the Company
.
This Agreement
may be terminated by the Company, acting under the direction of the Company
Board, and the Merger and other Transactions may be abandoned if:
(a) at
any time prior to the Effective Time, before or after Stockholder Approval,
Merger Sub or Parent shall have breached any of their respective
representations, warranties, covenants or other agreements set forth in this
Agreement or any such representation or warranty shall have become untrue after
the date of this Agreement (in either case, a “
Terminating
Merger Sub Breach
”) and such Terminating Merger Sub Breach (i) would give
rise to the failure of a condition set forth in
Section
6.03(a)
or
Section
6.03(b)
and (ii) is
not cured within thirty (30) days after written notice thereof is received by
Merger Sub and Parent;
provided
that the
Company shall have no right to terminate this Agreement in connection with a
Terminating Merger Sub Breach if there is an uncured Terminating Company Breach
at the time of the Terminating Merger Sub Breach or at the time of the purported
termination in connection with a Terminating Merger Sub Breach; or
(b) at
any time prior to Stockholder Approval, (i) a valid Recommendation Change shall
have occurred after the Company shall have complied with the procedures set
forth in
Section
5.09(b)
and (ii)
concurrently with and as a condition to the termination of this Agreement
pursuant to this
Section
7.04(b)
, the Company
enters into a definitive Contract relating to an Acquisition Proposal not
solicited in violation of
Section
5.09
that constitutes
a Superior Proposal and pays Parent the Break Up Fee (as defined in
Section
8.01(b)
).
7.05
Effect of
Termination
.
Any proper and
valid termination of this Agreement pursuant to this
Article 7
shall be
effective immediately upon the delivery of written notice of the terminating
party to the other party or parties hereto, as applicable. In the event of the
termination of this Agreement and abandonment of the Merger and other
Transactions pursuant to this
Article 7
, this
Agreement shall forthwith become null and void and have no effect, without any
liability on the part of any party or its officers, directors, stockholders,
affiliates and agents, other than the provisions of the third to last and
penultimate sentences of
Section
5.04
and the
provisions of
Sections
5.05
,
7.05
, and
Article 8
;
provided
,
however
, that nothing
herein shall relieve any party hereto from liability for fraud or any
intentional or willful breach of any of its representations, warranties,
covenants or agreements set forth in this Agreement.
ARTICLE
8
MISCELLANEOUS
8.01
Payment
of Fees and Expenses
.
(a) Except
as set forth in
Section
8.01(b)
or as
otherwise specified in this Agreement, each of the parties hereto shall bear its
own Expenses incurred by or on behalf of such party in preparing for, entering
into and carrying out this Agreement and the consummation of the Merger and the
Transactions. “
Expenses
”
as used in this Agreement shall include all out of pocket expenses (including
all fees and expenses of outside counsel, investment bankers, banks, other
financial institutions, accountants, financial printers, experts and consultants
to a party hereto) incurred by a party or on its behalf in connection with or
related to the investigation, due diligence examination, authorization,
preparation, negotiation, execution and performance of this Agreement and the
Transactions and all other matters contemplated by this Agreement, together with
any out of pocket costs and expenses incurred by any party in enforcing any of
its rights set forth in this Agreement, whether pursuant to litigation or
otherwise.
(b) If
this Agreement is terminated (i) by the Company or by Parent pursuant to
Section
7.02(b)
or
Section
7.02(c)
and prior to
the Stockholders Meeting, an Acquisition Proposal (which, for purposes of this
Section
8.01(b)
(i)
, shall have the
meaning set forth in the definition of Acquisition Proposal contained in
Section
5.09(f)
, except that
all references to “20% or more” shall be deemed references to “more than 50%”)
shall have been made (other than by Parent, Merger Sub or their respective
affiliates) directly to the holders of Common Shares or shall otherwise have
been publicly known and such Acquisition Proposal had not been withdrawn at the
time of the Stockholders Meeting, and at any time within twelve (12) months
after such termination, either the Company has entered into a definitive
Contract relating to any Acquisition Proposal or a transaction contemplated by
an Acquisition Proposal has been consummated, (ii) by Parent pursuant to
Section
7.03(b)
or (iii) by
the Company pursuant to
Section
7.04(b)
, then the
Company shall (A) in the case of subparagraph (i), pay to Parent the Break Up
Fee (as defined below) within two (2) Business Days after the event that
triggers the obligation to pay the Break Up Fee, (B) in the case of subparagraph
(ii), pay to Parent the Break Up Fee within two (2) Business Days following such
termination of this Agreement and (C) in the case of subparagraph (iii), pay to
Parent the Break Up Fee concurrently with such termination of this
Agreement. “
Break Up
Fee
” means cash in immediately available funds in an amount equal to
$9,000,000.
(c) If
this Agreement is terminated by Parent pursuant to
Section
7.03(a)
based on a
breach of any covenant or agreement of the Company set forth in this Agreement
(but for the avoidance of doubt, excluding any breach of representations or
warranties), then the Company shall promptly, and in any event within two (2)
Business Days following receipt of documentation therefor, pay to Parent all of
the Expenses of Parent and Merger Sub. If this Agreement is
terminated by Parent pursuant to Section
7.03(a)
based on a
breach of any covenant or agreement of the Company set forth in this Agreement
(but for the avoidance of doubt, excluding any breach of representations or
warranties) and prior to such termination, an Acquisition Proposal (which, for
purposes of this
Section
8.01(c)
, shall have
the meaning set forth in the definition of Acquisition Proposal contained in
Section
5.09(f)
, except that
all references to “20% or more” shall be deemed references to “more than 50%”)
shall have been made (other than by Parent, Merger Sub or their respective
affiliates) directly to the holders of Common Shares or shall otherwise have
been publicly known and such Acquisition Proposal had not been withdrawn at the
time of such termination, and at any time within twelve (12) months after such
termination, either the Company has entered into a definitive Contract relating
to any Acquisition Proposal or a transaction contemplated by any Acquisition
Proposal has been consummated, then the Company shall pay to Parent the Break Up
Fee within two (2) Business Days after the event that triggers the obligation to
pay the Break Up Fee,
provided
that the
Expenses payable by the Company to Parent pursuant to this
Section
8.01(c)
shall be
credited against such Break Up Fee payable by the Company to
Parent. If this Agreement is terminated by the Company pursuant to
Section
7.04(a)
based on a
breach of any covenant or agreement of Parent or Merger Sub set forth in this
Agreement (but for the avoidance of doubt, excluding any breach of
representations or warranties), then Parent shall promptly, and in any event
within two (2) Business Days following receipt of documentation therefor, pay to
the Company all of the Expenses of the Company.
(d) If
this Agreement is terminated by Parent as a result of a Warning Letter Event
pursuant to
Section
7.03(c)
(i)
, then Parent
shall concurrently with and as a condition to such termination, pay to the
Company the Reverse Break Up Fee and, in such case, the Company hereby expressly
waives the right to contest Parent’s opinion that the quality issues referenced
in the applicable warning letter, or similar written notice, or correspondence
from the FDA or any other Governmental Authority regulating medical devices that
the Company receives would reasonably be expected to materially impair, or lead
to actions that materially impair, the business of the
Company. “
Reverse Break Up
Fee
” means cash in immediately available funds in an amount equal to
$9,000,000.
(e) The
parties agree that the agreements contained in this
Section
8.01
are an integral
part of the Transactions and constitute liquidated damages and not a
penalty. Notwithstanding any other provision in this Agreement to the
contrary, (i) if Parent receives the Break Up Fee (and subject to Parent’s and
Merger Sub’s rights to specifically enforce this Agreement as set forth in
Section
8.11
if Parent
challenges the right of the Company to terminate the Agreement) the parties
hereto agree that the payment contemplated by
Section
8.01(b)
and
Section
8.01(c)
represents the exclusive remedy of Parent and Merger Sub in the circumstances
described therein and that, except for the payment expressly set forth in the
circumstances described therein, none of the Company or any of its respective
affiliates shall have any liability or obligation of any kind whatsoever arising
out of such termination of this Agreement, any breach by the Company giving rise
to such termination, or the failure of the Transactions to be consummated as a
result of such termination, whether arising in contract, tort, equity or
otherwise and (ii) if the Company receives the Reverse Break Up Fee, the parties
hereto agree that the Reverse Break Up Fee represents the exclusive remedy of
the Company for a valid termination by Parent pursuant to
Section
7.03(c)
(i)
and that, except
for the payment of the Reverse Break Up Fee, none of Parent or any of its
respective affiliates shall have any liability or obligation of any kind
whatsoever arising out of such termination of this Agreement, any breach by
Parent giving rise to such termination, or the failure of the Transactions to be
consummated as a result of such termination, whether arising in contract,
equity, tort or otherwise.
(f) All
amounts payable by a party under this
Section
8.01
shall be paid in
cash and in immediately available funds to such account as the other party may
designate in writing. In the event that (A) the Company shall fail to
pay the Break Up Fee or Parent’s and Merger Sub’s Expenses required pursuant to
this
Section
8.01
when due or (B)
Parent shall fail to pay the Company’s Expenses required pursuant to this
Section
8.01
when due, then,
in each case, such Break Up Fee or Expenses, as the case may be, shall accrue
interest for the period commencing on the date such Break Up Fee or Expenses, as
the case may be, became past due, at the prime rate, as published in the next
edition of
The Wall Street
Journal
, Eastern Edition, to be published after such delivery, as the
“prime rate” at large U.S. money center banks (which rate shall be adjusted on
the effective date of each change in such rate). If the Company shall
fail to pay the Break Up Fee or Expenses, as the case may be, when due, the
Company shall also pay to the Parent all of the Parent’s costs and expenses
(including attorneys’ fees) in connection with efforts to collect such Break Up
Fee or Expenses, as the case may be. If the Parent shall fail to pay
the Expenses when due, Parent shall also pay to the Company all of the Company’s
costs and expenses (including attorneys’ fees) in connection with efforts to
collect such Expenses.
8.02
No
Survival
.
The
representations, warranties and agreements made in this Agreement and in any
certificate delivered pursuant hereto shall not survive beyond the earlier of
the Effective Time or the termination of this Agreement in accordance with
Article 7
hereof. Notwithstanding the foregoing, the agreements set forth in
Article 1
,
Article 2
,
Article 8
and
Section
5.06
shall survive
the Effective Time and the agreements set forth in
Article 8
and those
sections set forth in
Section
7.05
shall survive
termination.
8.03
Modification
or Amendment
.
This Agreement
may be amended by the parties hereto at any time before or after Stockholder
Approval;
provided
,
however
, that after
Stockholder Approval there shall not be made any amendment that by Law requires
the further approval by such stockholders without such further approval by such
stockholders; and
provided
,
further
, that the
provisions of
Section
5.06
may not be
amended or modified after the Closing without the prior written agreement of
each of the Indemnified Parties. Without limiting the foregoing, this
Agreement may not be amended or modified except by an instrument in writing
signed by the parties.
8.04
Entire
Agreement; Assignment
.
This Agreement
(including the Company Disclosure Schedules and the instruments referred to
herein that are executed pursuant to the terms of this Agreement) and the
Confidentiality Agreement constitute the entire agreement and supersede all
prior agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof and thereof. EACH PARTY
HERETO AGREES THAT, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED IN
THIS AGREEMENT, NEITHER PARENT AND MERGER SUB, ON THE ONE HAND, NOR THE COMPANY,
ON THE OTHER HAND, MAKES ANY REPRESENTATIONS OR WARRANTIES TO THE OTHER, AND
EACH PARTY HEREBY DISCLAIMS ANY OTHER REPRESENTATIONS OR WARRANTIES, EXPRESS OR
IMPLIED. Neither this Agreement nor any of the rights, interests or
obligations hereunder may be assigned by any of the parties hereto (whether by
operation of law or otherwise) without the prior written consent of the other
party (except that each of Parent and Merger Sub may assign its rights,
interests and obligations to any of their respective controlled affiliates or
direct or indirect wholly-owned subsidiaries without the consent of the Company,
so long as they remain primarily obligated with respect to any such assigned
obligation). Subject to the preceding sentence, this Agreement will
be binding upon, inure to the benefit of and be enforceable by the parties and
their respective successors and permitted assigns.
8.05
Severability
.
If any term or
other provision of this Agreement is invalid, illegal or incapable of being
enforced by any rule of Law or public policy, all conditions and provisions of
this Agreement shall nevertheless remain in full force and
effect. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible to the fullest extent permitted by
applicable Law in an acceptable manner to the end that the Transactions are
fulfilled to the extent possible.
8.06
Notices
.
Except with
respect to delivery of notices contemplated by
Section
5.01
,
all notices,
requests, Claims, demands and other communications hereunder shall be in writing
and shall be deemed to have been duly given (i) one Business Day after being
sent for next business day delivery, fees prepaid, via a reputable nationwide
overnight courier service, or (ii) immediately upon written or electronic
confirmation of delivery via facsimile or email, to the respective parties as
follows:
If to Parent or Merger
Sub
:
C. R.
Bard, Inc.
730
Central Avenue
Murray
Hill, New Jersey 07974
Attention: Office
of General Counsel
Facsimile
No.: (908) 277-8025
with copies
to
:
Jim
Beasley
C. R.
Bard, Inc.
1415 West
Third Street
Tempe,
Arizona 85281
Email:
jim.beasley@crbard.com
Fax: (480)
303-2725
Weil
Gotshal & Manges LLP
767 Fifth
Avenue
New York,
New York 10153
Attention: Michael
E. Lubowitz, Esq.
Facsimile
No.: (212) 310-8007
Email:
michael.lubowitz@weil.com
If to the
Company
:
SenoRx,
Inc.
3
Morgan
Irvine,
California 92618
Attention: John
T. Buhler
Facsimile
No.: (949) 362-0300
Email:
jbuhler@senorx.com
with a copy
to
:
Wilson
Sonsini Goodrich & Rosati
Professional
Corporation
650
Page Mill Road
Palo
Alto, California 94304
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Attention:
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Robert
T. Ishii
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Martin
J. Waters
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Elton
Satusky
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Facsimile
No.: (650) 493-6811
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Email:
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rishii@wsgr.com
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mwaters@wsgr.com
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esatusky@wsgr.com
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or to
such other address as the Person to whom notice is given may have previously
furnished to the other in writing in the manner set forth above;
provided
that notice
of any change of address shall be effective only upon receipt
thereof.
8.07
Governing
Law
.
This Agreement
shall be governed by and construed in accordance with the Laws of the State of
Delaware, regardless of the Laws that might otherwise govern under applicable
principles of conflicts of laws thereof.
8.08
Interpretation
.
Unless otherwise
indicated, all references herein to Articles, Sections, Annexes, Exhibits or
Schedules, shall be deemed to refer to Articles, Sections, Annexes, Exhibits or
Schedules of or to this Agreement, as applicable. The descriptive
headings herein are inserted for convenience of reference only and are not
intended to be part of or to affect the meaning or interpretation of this
Agreement. Whenever the words “include,” “includes” or “including”
are used in this Agreement, they shall be deemed to be followed by the words
“without limitation.” The words “hereof,” “herein” and “hereunder”
and words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement. Whenever the context may require, any pronouns used in
this Agreement shall include the corresponding masculine, feminine or neuter
forms, and the singular form of nouns and pronouns shall include the plural, and
vice versa. The parties hereto agree that the disclosure set forth in
any particular section or subsection of the Company Disclosure Schedules shall
be deemed to be an exception to (or, as applicable, a disclosure for purposes
of) (i) the representations and warranties (or covenants, as applicable) of the
Company that are set forth in the corresponding section or subsection of this
Agreement, and (ii) any other representations and warranties (or covenants, as
applicable) of the Company that are set forth in this Agreement, but in the case
of this clause (ii) only if the relevance of that disclosure as an exception to
(or a disclosure for purposes of) such other representations and warranties (or
covenants, as applicable) is reasonably apparent on the face of such
disclosure.
8.09
Counterparts
.
This Agreement
may be executed in two or more counterparts, each of which shall be deemed to be
an original, but all of which shall constitute one and the same agreement, and
any one of which may be delivered by facsimile or other electronic
transmission.
8.10
Certain
Definitions
.
As used in this
Agreement:
(a) “
affiliate
,
” as applied to any Person,
means any other Person directly or indirectly controlling, controlled by, or
under common control with, that Person. For the purposes of this
definition, “control” (including, with correlative meanings, the terms
“controlling,” “controlled by” and “under common control with”), as applied to
any Person, means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of that Person, whether
through the ownership of voting securities, by contract or
otherwise.
(b) “
Antitrust
Law
” shall mean the Sherman Act, as amended, the Clayton Act, as amended,
the HSR Act, the Federal Trade Commission Act, as amended, and all other Laws
that are designed or intended to prohibit, restrict or regulate actions having
the purpose or effect of monopolization or restraint of trade or significant
impediments to or lessening of competition or the creation or strengthening of a
dominant position through merger or acquisition, in any case that are applicable
to the transactions contemplated by this Agreement.
(c) “
Business
Day
” shall mean any day other than a Saturday, Sunday or a day on which
the banks in the State of New York are authorized by Law to be
closed.
(d)
“
ERISA
Affiliate
” means any trade or business, whether or not incorporated, that
together with the Company is, or has within the past six (6) years been, deemed
a “single employer” within the meaning of Section 414 of the Code or Section
4001(b) of ERISA.
(e) “
Indebtedness
”
means, with respect to the Company, (i) indebtedness for borrowed money or
issued in substitution for or exchange of indebtedness for borrowed money, (ii)
obligations evidenced by notes, bonds, debentures, mortgages or other similar
instruments or securities, (iii) obligations under leases (contingent or
otherwise, as obligor, guarantor or otherwise) required to be accounted for as
capitalized leases pursuant to GAAP, (iv) obligations for amounts drawn under
acceptances, letters of credit, contingent reimbursement liabilities with
respect to letters of credit or similar facilities, (v) any liability for the
deferred purchase price of property or services, contingent or otherwise, as
obligor or otherwise, (vi) any liability which is deemed a long term liability
under GAAP, (vii) guarantees and similar commitments relating to any of the
foregoing items, (viii) any accrued and unpaid interest on, and any prepayment
premiums, penalties or similar contractual charges in respect of, any of the
foregoing and (ix) all obligations of the kind referred to in clauses (i)
through (viii) above secured by (or for which the holder of such obligation has
an existing right, contingent or otherwise, to be secured by) any Lien on
property (including accounts and contract rights) owned by the Company, whether
or not such entity has assumed or become liable for the payment of such
obligation.
(f) “
Knowledge
”
of any Person that is not an individual shall mean, with respect to any matter
in question, the actual knowledge, after due inquiry, of such Person’s officers
and, in the case of officers who are managers, after due inquiry of their direct
reports.
(g) “
Person
”
means any individual, corporation, business, business organization or division
thereof, partnership, limited liability company, trust, joint venture or any
other entity or group (which term shall include a “
group
” as
such term is defined in Section 13(d)(3) of the Exchange Act).
(h) “
subsidiary
”
or “
subsidiaries
”
means, with respect to any Person, any corporation, partnership, limited
liability company, joint venture or other entity of which such Person (either
alone or through or together with any other subsidiary), owns, directly or
indirectly, more than 50% of the stock or other equity or beneficial interests,
the holders of which are generally entitled to vote for the election of the
board of directors or other governing body of such corporation, partnership,
limited liability company, joint venture or other entity.
(i) “
Title IV
Plan
” means any “employee pension benefit plan,” as defined in Section
3(2) of ERISA, subject to Title IV of ERISA or Section 412 of the Code
(including any “Multiemployer Plan” as defined in Section 3(37) of ERISA or
Section 4001(a)(3) of ERISA).
(j) “
WARN
”
means the federal Worker Adjustment and Retraining Notification Act of 1988, 29
U.S.C. § 2101 et seq. (1988) and any similar state or local “mass layoff”
or “plant closing” laws.
8.11
Specific
Performance
.
(a) Except
as described in
Section
8.11(b)
, the parties
hereto recognize and agree that if for any reason any of the provisions of this
Agreement are not performed in accordance with their specific terms or are
otherwise breached, immediate and irreparable harm or injury would be caused for
which money damages would not be an adequate remedy. Accordingly, the
parties hereto agree that, except as described in
Section
8.11(b)
, in addition
to other remedies available to them, the parties shall be entitled to seek
specific performance of the terms hereof. In the event that any action
shall be brought in equity to enforce the provisions of this Agreement no party
shall allege, and each party hereby waives the defense, that there is an
adequate remedy at law. Except as otherwise provided herein, any and all
remedies herein expressly conferred upon a party will be deemed cumulative with
and not exclusive of any other remedy conferred hereby, or by law or equity upon
such party, and the exercise by a party of any one remedy will not preclude the
exercise of any other remedy.
(b) If
this Agreement is validly terminated by Parent as a result of a Warning Letter
Event pursuant to
Section
7.03(c)
(i)
, the parties
hereto agree that the Company shall not be entitled to seek specific performance
of this Agreement.
8.12
Extension;
Waiver
.
At any time prior
to the Effective Time, a party may (a) extend the time for the performance of
any of the obligations or other acts of the other party, (b) waive any
inaccuracies in the representations and warranties of the other party contained
in this Agreement or in any document delivered pursuant to this Agreement or (c)
subject to the proviso in
Section
8.03
, waive
compliance by the other party with any of the agreements or conditions contained
in this Agreement;
provided
,
however
, in each
case, any extension or waiver pursuant to this
Section
8.12
shall not be
deemed, or operate as, a continuing extension or waiver. Any
agreement on the part of a party to any such extension or waiver shall be valid
only if set forth in an instrument in writing signed on behalf of such
party. The failure of any party to this Agreement to assert any of
its rights under this Agreement or otherwise shall not constitute a waiver of
such rights.
8.13
Third
Party Beneficiaries
.
This Agreement
does not confer upon any Person other than the parties hereto any rights or
remedies, except for the provisions of
Section
5.06
.
8.14
Submission
to Jurisdiction
.
Each of the
parties hereto irrevocably and unconditionally submits, for itself and its
property, to the exclusive jurisdiction of the Court of Chancery of the State of
Delaware, or, in the event (but only in the event) that such court does not have
subject matter jurisdiction over any action or proceeding arising out of or
relating to this Agreement, in the federal courts of the United States located
in the State of Delaware (“
Delaware
Courts
”), in any action or proceeding arising out of or relating to this
Agreement. Each of the parties hereto agrees that, subject to rights
with respect to post trial motions and rights of appeal or other avenues of
review, a final judgment in any such action or proceeding shall be conclusive
and may be enforced in other jurisdictions by suit on the judgment or in any
other manner provided by Law. Each of the parties hereto irrevocably
and unconditionally waives, to the fullest extent it may legally and effectively
do so, any objection that it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement in
the Delaware Courts. Each of the parties hereto irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
[
THE REMAINDER OF THIS PAGE IS
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IN
WITNESS WHEREOF, each of the parties has caused this Agreement and Plan of
Merger to be executed on its behalf by its respective officer thereunto duly
authorized, all as of the day and year first above written.
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SENORX,
INC.
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By:
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/s/ John
T. Buhler
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Name:
John T. Buhler
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Title:
President and Chief Executive Officer
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C.
R. BARD, INC.
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By:
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/s/ Todd
C. Schermerhorn
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Name: Todd
C. Schermerhorn
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Title:
Senior Vice President and Chief Financial Officer
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RAPTOR
ACQUISITION CORP.
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By:
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/s/ Todd
C. Schermerhorn
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Name:
Todd C. Schermerhorn
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Title:
Vice President
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Signature
Page to Agreement and Plan of Merger
Schedule
I
Parties
to the Support Agreement
De Novo
(Q) Ventures I, L.P.
De Novo
Ventures I, L.P.
John T.
Buhler
Paul
Lubock
Kevin J.
Cousins
William
F. Gearhart
Annex B
APPENDIX B
VOTING
AND SUPPORT AGREEMENT
This
VOTING AND SUPPORT
AGREEMENT
(this “
Agreement
”)
dated as of
May 4
, 2010,
is entered into among C. R. Bard, Inc., a New Jersey corporation (“
Parent
”),
and the stockholders of SenoRx, Inc., a Delaware corporation (the “
Company
”),
identified on Schedule A hereto (each, a “
Stockholder
,”
and, collectively, the “
Stockholders
”).
WHEREAS
, concurrently with the
execution of this Agreement, Parent, Raptor Acquisition Corp., a Delaware
corporation (“
Merger
Sub
”), and the Company have entered into an Agreement and Plan of Merger
dated as of the date hereof (as the same may be amended or supplemented, the
“
Merger
Agreement
”);
WHEREAS
, each Stockholder owns
the number of Common Shares set forth opposite its name on
Schedule A
hereto as
of the date of this Agreement (such Common Shares held by each Stockholder as
set forth on
Schedule
A
, together with any other shares of capital stock of the Company
acquired by each Stockholder after the date hereof and during the term of this
Agreement, whether by purchase or upon exercise of options, warrants, conversion
of other convertible securities or otherwise, being collectively referred to
herein as the “
Subject
Shares
”); and
WHEREAS
, as a condition to its
willingness to enter into the Merger Agreement, Parent has requested that the
Stockholders enter into this Agreement.
NOW
,
THEREFORE
, in consideration of
the premises and the mutual covenants and agreements contained herein, the
parties hereto agree as follows:
SECTION 1.
Defined
Terms
. Capitalized terms used herein but not otherwise defined
herein have the meanings assigned to such terms in the Merger
Agreement.
SECTION 2.
Representations
and Warranties of Each Stockholder
. Each Stockholder hereby
severally and not jointly represents and warrants to Parent as of the date
hereof as follows:
(a)
Authority; Execution and
Delivery; Enforceability
. Such Stockholder (if not an
individual) is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its formation. Such Stockholder (if not
an individual) has all requisite corporate or other organizational power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery by such
Stockholder of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary action on the
part of such Stockholder. Such Stockholder has duly executed and
delivered this Agreement, and this Agreement constitutes the legal, valid and
binding obligation of such Stockholder, enforceable against such Stockholder in
accordance with its terms. The execution and delivery by such
Stockholder of this Agreement do not, and the consummation of the transactions
contemplated hereby and compliance with the terms hereof will not, conflict
with, or result in any violation of, require the consent of, or default (with or
without notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation or to loss of a
material benefit under, or result in the creation of any Lien upon any of the
properties or assets of such Stockholder under, any provision of any contract or
agreement to which such Stockholder is a party or by which any properties or
assets of such Stockholder are bound or, subject to the filings and other
matters referred to in the last sentence of this
Section 2(a)
, any
provision of any Order or Law applicable to such Stockholder or the properties
or assets of such Stockholder. The execution and delivery by such
Stockholder (if not an individual) of this Agreement does not, and the
consummation of the transactions contemplated hereby and compliance with the
terms hereof will not, conflict with any provision of the certificate of
incorporation or bylaws or other similar organizational documents of such
Stockholder. No consent or approval of, or registration, declaration
or filing with, any Person or Governmental Authority is required to be obtained
or made by or with respect to such Stockholder in connection with the execution,
delivery and performance of this Agreement or the consummation of the
transactions contemplated hereby, other than such reports, if any, under
Sections 13(d) and 16 of the Exchange Act as may be required in connection with
this Agreement and the transactions contemplated hereby.
(b)
Subject
Shares
. As of the date of this Agreement, such Stockholder is
the record and beneficial owner of and has good and marketable title to such
Stockholder’s Subject Shares, free and clear of any Liens and any other material
limitation or restriction (including any restriction on the right to vote or
otherwise dispose of such Stockholder’s Subject Shares) other than pursuant to
this Agreement and the Merger Agreement. Such Stockholder does not
own, of record or beneficially, any shares of capital stock of the Company, or
other rights to acquire shares of capital stock of the Company, in each case
other than such Stockholder’s Subject Shares. Such Stockholder has
the sole right to vote such Stockholder’s Subject Shares, and none of such
Stockholder’s Subject Shares is subject to any voting trust or other agreement,
arrangement or restriction with respect to the voting of such Stockholder’s
Subject Shares, except as contemplated by this Agreement. Such
Stockholder further represents that any proxies given in respect of such
Stockholder’s Subject Shares, if any, have been revoked.
SECTION 3.
Representations
and Warranties of Parent
. Parent hereby represents and
warrants to the Stockholders as follows: Parent is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
formation. Parent has all requisite corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery by Parent of this
Agreement and the consummation of the transactions contemplated hereby have been
duly authorized by all necessary action on the part of Parent. Parent
has duly executed and delivered this Agreement, and this Agreement constitutes
the legal, valid and binding obligation of Parent, enforceable against Parent in
accordance with its terms. The execution and delivery by Parent of
this Agreement do not, and the consummation of the transactions contemplated
hereby and compliance with the terms hereof will not, conflict with, or result
in any violation of, or default (with or without notice or lapse of time, or
both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or to loss of a material benefit under, or result
in the creation of any Lien upon any of the properties or assets of Parent
under, any provision of any contract or agreement to which Parent is a party or
by which any properties or assets of Parent are bound or, subject to the filings
and other matters referred to in the last sentence of this
Section 3
, any
provision of any Order or Law applicable to Parent or the properties or assets
of Parent. The execution and delivery by Parent of this Agreement
does not, and the consummation of the transactions contemplated hereby and
compliance with the terms hereof will not, conflict with any provision of the
certificate of incorporation or bylaws or other similar organizational documents
of Parent. No consent or approval of, or registration, declaration or
filing with, any Governmental Authority is required to be obtained or made by or
with respect to Parent in connection with the execution, delivery and
performance of this Agreement or the consummation of the transactions
contemplated hereby, other than such reports, if any, under Sections 13(d) and
16 of the Exchange Act as may be required in connection with this Agreement and
the transactions contemplated hereby.
SECTION 4.
Covenants
of the Stockholders
. Each Stockholder hereby acknowledges,
covenants and agrees, severally and not jointly, as follows:
(a) Prior
to the Expiration Date as defined in
Section 5
below, at
any meeting of the stockholders of the Company, and at any adjournment or
postponement thereof, called to seek the Stockholder Approval or in any other
circumstances upon which a vote, consent or other approval (including by written
consent) with respect to the Merger Agreement, the Merger or any other
transaction contemplated by the Merger Agreement is sought, such Stockholder
shall, including by executing a written consent solicitation if requested by
Parent, vote (or cause to be voted), in person or by proxy, such Stockholder’s
Subject Shares in favor of (i) granting the Stockholder Approval and (ii) any
proposal to adjourn any meeting of the stockholders of the Company which Parent
supports.
(b) Prior
to the Expiration Date, at any meeting of stockholders of the Company or at any
adjournment thereof or in any other circumstances upon which such Stockholder’s
vote, consent or other approval is sought, such Stockholder shall vote (or cause
to be voted) such Stockholder’s Subject Shares against (i) any merger
agreement or merger (other than the Merger Agreement and the Merger), share
exchange, consolidation, combination, dual listed structure, sale of substantial
assets, issuance of securities, reorganization, recapitalization, dissolution,
liquidation, winding up or other extraordinary transaction of or by the Company,
(ii) any Acquisition Proposal or Superior Proposal and (iii) any amendment of
the Company’s certificate of incorporation or the Company’s by-laws or other
proposal or transaction involving the Company or any subsidiary of the Company,
which amendment or other proposal or transaction would in any manner impede,
frustrate, prevent or nullify any provision of the Merger Agreement or any other
agreement contemplated by the Merger Agreement, the Merger or any other
transaction contemplated by the Merger Agreement or change in any manner the
voting rights of any class of capital stock of the Company. Such
Stockholder shall not commit or agree to take any action inconsistent with the
foregoing.
(c) Such
Stockholder hereby irrevocably grants to, and appoints, Parent, and any
individual designated in writing by Parent, and each of them individually, as
such Stockholder’s proxy and attorney-in-fact (with full power of substitution),
for and in the name, place and stead of such Stockholder, to vote such
Stockholder’s Subject Shares, or grant a consent or approval in respect of such
Stockholder’s Subject Shares in a manner consistent with this
Section
4
. Such Stockholder understands, acknowledges and agrees that
Parent is entering into the Merger Agreement in reliance upon such Stockholder’s
execution and delivery of this Agreement. Such Stockholder hereby
affirms that the irrevocable proxy set forth in this
Section 4(c)
is
given in consideration of the execution of the Merger Agreement by Parent and
Merger Sub, and that such irrevocable proxy is given to secure the performance
of the duties of such Stockholder under this Agreement. Such
Stockholder hereby further affirms that the irrevocable proxy is coupled with an
interest and may under no circumstances be revoked. Each Stockholder
hereby ratifies and confirms all that such irrevocable proxy may lawfully do or
cause to be done by virtue hereof. Such irrevocable proxy is executed
and intended to be irrevocable in accordance with the provisions of
Section 212(e) of the DGCL. The irrevocable proxy granted
hereunder shall automatically terminate upon the termination of this
Agreement. With respect to the proxy granted hereunder by each
Stockholder, Parent agrees not to exercise the proxy of such Stockholder if such
Stockholder complies with his, her or its obligations in this
Agreement.
(d) Between
the date hereof and the date immediately following the date of the Stockholders
Meeting (the “
Termination
Date
”), such Stockholder shall not (i) sell, transfer, pledge,
assign or otherwise dispose of (including by gift) (collectively, “
Transfer
”),
or enter into any contract, option, agreement, understanding or other
arrangement (including any profit sharing arrangement) with respect to the
Transfer of, any of such Stockholder’s Subject Shares to any person, (ii) grant
any proxies or powers of attorney, deposit such Stockholder’s Subject Shares
into a voting trust, enter into a voting agreement or arrangement with respect
to such Stockholder’s Subject Shares or participate, directly or indirectly, in
the “solicitation” of “proxies” (as such terms are used in the rules of the
SEC), (iii) take any action what would reasonably be expected to make any
representation or warranty of such Stockholder contained herein untrue or
incorrect or have the effect of preventing or disabling such Stockholder from
performing its obligations under this Agreement, or (iv) commit or agree to take
any of the foregoing actions.
(e) Such
Stockholder shall not issue any press release or make any other public statement
with respect to the Merger or any other transaction contemplated by the Merger
Agreement without the prior written consent of Parent, except as may be required
by Law or (if such Stockholder is an officer of the Company) as an agent of the
Company.
(f) Such
Stockholder hereby waives, and agrees not to exercise or assert, any appraisal
rights under Section 262 of the DGCL in connection with the
Merger.
(g) Notwithstanding
anything in this Agreement to the contrary, each Stockholder which is an
individual shall not be limited or restricted in any way from acting in
such Stockholder’s fiduciary capacity as a director or officer of the Company,
to the extent applicable, in order for such Stockholder to comply with such
Stockholder’s fiduciary duties as a director or officer of the
Company. In addition, notwithstanding anything in this Agreement to
the contrary, each Stockholder shall not be limited or restricted in any way
from voting in such Stockholder’s sole discretion on any matter other than the
matters referred to in
Sections 4(a)
and
(b)
hereof. The parties acknowledge that this Agreement shall apply to
each such Stockholder solely in such Stockholder’s capacity as a stockholder of
the Company and that each such Stockholder makes no agreement or understanding
herein in his capacity as a director or officer of the Company.
(i) Notwithstanding
anything in this Agreement to the contrary, nothing in this Agreement shall
require any Stockholder to exercise any option and/or other rights to purchase
any Common Shares or shares of any other class or series of capital stock of the
Company (including any Options, Restricted Stock, Restricted Stock Units,
Warrants or rights under the Company ESPP).
SECTION 5.
Termination
. This
Agreement shall terminate upon the earliest to occur of (i) written
notice of termination of this Agreement by Parent to Stockholders, (ii) the
Effective Time, and (iii) the termination of the Merger Agreement in
accordance with its terms (the “
Expiration
Date
”);
provided
,
however
, that if the
Termination Date occurs prior to the Expiration Date, the obligations of each
Stockholder under
Section 4(d)
shall terminate immediately following the Termination Date.
SECTION 6.
Additional
Matters
.
(a) Each
Stockholder shall, from time to time, at Parent’s reasonable request, execute
and deliver, or cause to be executed and delivered, such additional or further
consents, documents and other instruments that are necessary to carry out the
transactions contemplated by this Agreement.
(b) All
rights, ownership and economic benefits of and relating to the Subject Shares
shall remain vested in and belong to each Stockholder, and Parent shall have no
authority to manage, direct, superintend, restrict, regulate, govern or
administer any of the policies or operations of the Company or exercise any
power or authority to direct any Stockholder in the voting of any of the Subject
Shares, except as otherwise expressly provided herein.
SECTION 7.
General
Provisions
.
(a)
Amendments
. This
Agreement may not be amended except by an instrument in writing signed by Parent
and by Stockholders representing a majority in interest of the Subject
Shares.
(b)
Notice
. All
notices and other communications hereunder shall be in writing and shall be
deemed given if delivered personally or sent by overnight courier (providing
proof of delivery) to Parent in accordance with Section 8.06 of the Merger
Agreement and to each Stockholder at its address set forth on such Stockholder’s
signature page hereto (or at such other address for a party as shall be
specified by like notice).
(c)
Interpretation
. When
a reference is made in this Agreement to Sections, such reference shall be to a
Section of this Agreement unless otherwise indicated. The headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. Each
party hereto has participated in the drafting of this Agreement, which each
party acknowledges and agrees is the result of extensive negotiations among the
parties. Wherever the words “include”, “includes” or “including” are
used in this Agreement, they shall be deemed to be followed by the words
“without limitation”.
(d)
Severability
. Any
term or provision of this Agreement which is invalid or unenforceable in any
jurisdiction shall, as to that jurisdiction, be ineffective to the sole extent
of such invalidity or unenforceability without rendering invalid or
unenforceable the remainder of such term or provision or the remaining terms and
provisions of this Agreement in any jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as is enforceable.
(e)
Counterparts
. This
Agreement may be executed in one or more counterparts, all of which shall be
considered one and the same agreement. This Agreement shall become
effective against Parent when one or more counterparts have been signed by
Parent and delivered to the Stockholders. This Agreement shall become
effective against each Stockholder when one or more counterparts have been
executed by such Stockholder and delivered to Parent. Each party need
not sign the same counterpart.
(f)
Entire Agreement; No
Third-Party Beneficiaries
. This Agreement (together with the
Merger Agreement to the extent referred to herein), (i) constitutes
the entire agreement and supersedes all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter
hereof and (ii) is not intended to confer upon any person other than the
parties hereto any rights or remedies hereunder.
(g)
Governing
Law
. This Agreement shall be governed by and construed in
accordance with the Laws of the State of Delaware, without giving effect to any
choice or conflict of law provision or rule (whether of the State of Delaware or
any other jurisdiction) that would cause the application of the Laws of any
jurisdiction other than the State of Delaware.
(h)
Assignment; Binding
Effect
. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement may be assigned, in whole or in
part, by operation of law or otherwise, by Parent without the prior written
consent of Stockholders representing a majority in interest of the Subject
Shares or by any Stockholder without the prior written consent of Parent, and
any purported assignment without such consent shall be void. Subject
to the preceding sentences, this Agreement will be binding upon, inure to the
benefit of, and be enforceable by, the parties and their respective successors,
assigns and heirs.
(i)
Enforcement
. The
parties recognize and agree that if for any reason any of the provisions of this
Agreement are not performed in accordance with their specific terms or are
otherwise breached, immediate and irreparable harm or injury would be caused for
which money damages would not be an adequate remedy. Accordingly,
each party agrees that, in addition to other remedies, prior to any termination
of this Agreement, the parties shall be entitled to specific performance of the
terms hereof. In addition, each of the parties hereto irrevocably and
unconditionally submits, for itself and its property, to the exclusive
jurisdiction of the Court of Chancery of the State of Delaware, or, in the event
(but only in the event) that such court does not have subject matter
jurisdiction over any action or proceeding arising out of or relating to this
Agreement, in the federal courts of the United States located in the State of
Delaware (“
Delaware
Courts
”), in any action or proceeding arising out of or relating to this
Agreement. Each of the parties hereto agrees that, subject to rights
with respect to post trial motions and rights of appeal or other avenues of
review, a final judgment in any such action or proceeding shall be conclusive
and may be enforced in other jurisdictions by suit on the judgment or in any
other manner provided by Law. Each of the parties hereto irrevocably
and unconditionally waives, to the fullest extent it may legally and effectively
do so, any objection that it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement in
the Delaware Courts. Each of the parties hereto irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
[
Signature Page
Follows
]
IN
WITNESS WHEREOF, each party has duly executed this Agreement as of the date
first written above.
|
|
C.
R. BARD, INC.
By:
/s/ Todd
C. Schermerhorn
Name:
Todd C. Schermerhorn
Title:
Senior Vice President and Chief Financial Officer
/s/
John T. Buhler
John
T. Buhler
/s/
Kevin J. Cousins
Kevin
J. Cousins
/s/
William F. Gearhart
William
F. Gearhart
/s/ Paul
Lubock
Paul
Lubock
DE
NOVO VENTURES I, L.P.
By:
/s/ Frederick J.
Dotzler
Name:
Frederick J. Dotzler
Title:
Managing Director
DE
NOVO (Q) VENTURES I, L.P.
By:
/s/ Frederick J.
Dotzler
Name:
Frederick J. Dotzler
Title:
Managing Director
|
SCHEDULE
A
|
Name
of
Stockholders
|
Number
of
Common
Shares Owned
|
|
John
T. Buhler
|
4,200
|
|
Kevin
J. Cousins
|
50,928
|
|
William
F. Gearhart
|
32,428
|
|
Paul
Lubock
|
192,624
|
|
De
Novo (Q) Ventures I, L.P.
|
570,423
|
|
De
Novo Ventures I, L.P.
|
112,872
|
Annex C
May 4,
2010
Board of
Directors
SenoRx,
Inc.
3
Morgan
Irvine,
California 92618
Members
of the Board:
You have
requested our opinion as to the fairness, from a financial point of view, to the
holders of common stock, par value $0.001 per share (the “Company Common
Stock”), of SenoRx, Inc. (the “Company”), of the Merger Consideration (as
defined below), pursuant to a proposed Agreement and Plan of Merger (the
“Agreement”), to be entered into among the Company, C.R. Bard, Inc. (the
“Acquiror”) and Raptor Acquisition Corp. (“Merger Sub”), a newly formed
wholly-owned subsidiary of the Acquiror. The Agreement provides for, among other
things, the merger (the “Merger”) of the Merger Sub with and into the Company,
pursuant to which each outstanding share of Company Common Stock, other than
Dissenting Shares and shares of Company Common Stock held in treasury or owned
by the Acquiror or Merger Sub, will be converted into the right to receive
$11.00 in cash (the “Merger Consideration”). The terms and conditions of the
Merger are more fully set forth in the Agreement.
In
connection with our review of the Merger, and in arriving at our opinion, we
have:
(i)
reviewed
and analyzed the financial terms of a draft of the Agreement dated May 4, 2010;
(ii)
reviewed
and analyzed certain financial and other data with respect to the Company which
was publicly available, (iii) reviewed and analyzed certain information,
including financial forecasts, relating to the business, earnings, cash flow,
assets, liabilities and prospects of the Company that were publicly available,
as well as those that were furnished to us by the Company; (iv) conducted
discussions with members of senior management and representatives of the Company
concerning the matters described in clauses (ii) and (iii) above, as well as its
business and prospects before and after giving effect to the Merger; (v)
reviewed the current and historical reported prices and trading activity of
Company Common Stock and similar information for certain other companies deemed
by us to be comparable to the Company; (vi) compared the financial performance
of the Company with that of certain other publicly-traded companies that we
deemed relevant; and (vii) reviewed the financial terms, to the extent publicly
available, of certain business combination transactions that we deemed relevant.
In addition, we have conducted such other analyses, examinations and inquiries
and considered such other financial, economic and market criteria as we have
deemed necessary in arriving at our opinion.
SenoRx,
Inc.
May 4,
2010
Page
2
We have
relied upon and assumed, without assuming liability or responsibility for
independent verification, the accuracy and completeness of all information that
was publicly available or was furnished, or otherwise made available, to us or
discussed with or reviewed by us. We have further relied upon the assurances of
the management of the Company that the financial information provided has been
prepared on a reasonable basis in accordance with industry practice, and that
they are not aware of any information or facts that would make any information
provided to us incomplete or misleading. Without limiting the generality of the
foregoing, for the purpose of this opinion, we have assumed that with respect to
financial forecasts, estimates and other forward-looking information reviewed by
us, that such information has been reasonably prepared based on assumptions
reflecting the best currently available estimates and judgments of the
management of the Company as to the expected future results of operations and
financial condition of the Company. We express no opinion as to any such
financial forecasts, estimates or forward-looking information or the assumptions
on which they were based. We have relied, with your consent, on advice of the
outside counsel and the independent registered public accounting firm to the
Company, and on the assumptions of the management of the Company, as to all
accounting, legal, tax and financial reporting matters with respect to the
Company and the Agreement.
In
arriving at our opinion, we have assumed that the executed Agreement will be in
all material respects identical to the last draft reviewed by us. We have relied
upon and assumed, without independent verification, that (i) the representations
and warranties of all parties to the Agreement and all other related documents
and instruments that are referred to therein are true and correct, (ii) each
party to such agreements will fully and timely perform all of the covenants and
agreements required to be performed by such party, (iii) the Merger will be
consummated pursuant to the terms of the Agreement without amendments thereto
and (iv) all conditions to the consummation of the Merger will be satisfied
without waiver by any party of any conditions or obligations thereunder.
Additionally, we have assumed that all the necessary regulatory approvals and
consents required for the Merger will be obtained in a manner that will not
adversely affect the Company or the contemplated benefits of the
Merger.
In
arriving at our opinion, we have not performed any appraisals or valuations of
any specific assets or liabilities (fixed, contingent or other) of the Company,
and have not been furnished or provided with any such appraisals or valuations,
nor have we evaluated the solvency of the Company under any state or federal law
relating to bankruptcy, insolvency or similar matters. The analyses performed by
us in connection with this opinion were going concern analyses. We express no
opinion regarding the liquidation value of the Company or any other entity.
Without limiting the generality of the foregoing, we have undertaken no
independent analysis of any pending or threatened litigation, regulatory action,
possible unasserted claims or other contingent liabilities, to which the Company
or any of its affiliates is a party or may be subject, and at the direction of
the Company and with its consent, our opinion makes no assumption concerning,
and therefore does not consider, the possible assertion of claims, outcomes or
damages arising out of any such matters. We have also assumed that neither the
Company nor the Acquiror is party to any material pending transaction, including
without limitation any financing, recapitalization, acquisition or merger,
divestiture or spin-off, other than the Merger.
This
opinion is necessarily based upon the information available to us and facts and
circumstances as they exist and are subject to evaluation on the date hereof;
events occurring after the date hereof could materially affect the assumptions
used in preparing this opinion. We are not expressing any opinion herein as to
the price at which shares of Company Common
Stock may
trade following announcement of the Merger or at any future time. We have not
undertaken to reaffirm or revise this opinion or otherwise comment upon any
events occurring after the date hereof and do not have any obligation to update,
revise or reaffirm this opinion.
SenoRx,
Inc.
May 4,
2010
Page
3
We have
been engaged by the Company to act as its financial advisor and we will receive
a fee from the Company for providing our services, a portion of which is
contingent upon the consummation of the Merger. We will also receive a fee for
rendering this opinion. The opinion fee is not contingent upon the consummation
of the Merger or the conclusions reached in our opinion. The Company has also
agreed to indemnify us against certain liabilities and reimburse us for certain
expenses in connection with our services. In the ordinary course of our
business, we and our affiliates may actively trade securities of the Company and
the Acquiror for our own account or the account of our customers and,
accordingly, may at any time hold a long or short position in such securities.
We may also, in the future, provide investment banking and financial advisory
services to the Company, the Acquiror or entities that are affiliated with the
Company or the Acquiror, for which we would expect to receive
compensation.
Consistent
with applicable legal and regulatory requirements, Piper Jaffray & Co.
(“Piper Jaffray”) has adopted policies and procedures to establish and maintain
the independence of Piper Jaffray’s Research Department and personnel. As a
result, Piper Jaffray’s research analysts may hold opinions, make statements or
investment recommendations and/or publish research reports with respect to the
Merger and other participants in the Merger that differ from the opinions of
Piper Jaffray’s investment banking personnel.
This
opinion is provided to the Board of Directors of the Company in connection with
its consideration of the Merger and is not intended to be and does not
constitute a recommendation to any stockholder of the Company as to how such
stockholder should act or vote with respect to the Merger or any other matter.
Except with respect to the use of this opinion in connection with the proxy
statement relating to the Merger in accordance with our engagement letter with
the Company, this opinion shall not be disclosed, referred to, published or
otherwise used (in whole or in part), nor shall any public references to us be
made, without our prior written approval. This opinion has been approved for
issuance by the Piper Jaffray Opinion Committee.
This
opinion addresses solely the fairness, from a financial point of view, to
holders of Company Common Stock of the proposed Merger Consideration set forth
in the Agreement and does not address any other terms or agreement relating to
the Merger or any other terms of the Agreement. We were not requested to opine
as to, and this opinion does not address, the basic business decision to proceed
with or effect the Merger, the merits of the Merger relative to any alternative
transaction or business strategy that may be available to the Company,
Acquiror’s ability to fund the Merger Consideration or any other terms
contemplated by the Agreement or the fairness of the Merger to any other class
of securities, creditor or other constituency of the Company. Furthermore, we
express no opinion with respect to the amount or nature of compensation to any
officer, director or employee of any party to the Merger, or
any class
of such persons, relative to the compensation to be received by holders of
Company Common Stock in the Merger or with respect to the fairness of any such
compensation.
SenoRx,
Inc.
May 4,
2010
Page
4
Based
upon and subject to the foregoing and based upon such other factors as we
consider relevant, it is our opinion that the Merger Consideration is fair, from
a financial point of view, to the holders of Company Common Stock (other than
the Acquiror and its affiliates, if any) as of the date hereof.
Sincerely,
PIPER
JAFFRAY & CO.
Annex D
SECTION
262 OF THE GENERAL CORPORATION LAW OF THE STATE OF DELAWARE
(a)
Any
stockholder of a corporation of this State who holds shares of stock on the date
of the making of a demand pursuant to subsection (d) of this section with
respect to such shares, who continuously holds such shares through the effective
date of the merger or consolidation, who has otherwise complied with subsection
(d) of this section and who has neither voted in favor of the merger or
consolidation nor consented thereto in writing pursuant to § 228 of this
title shall be entitled to an appraisal by the Court of Chancery of the fair
value of the stockholder’s shares of stock under the circumstances described in
subsections (b) and (c) of this section. As used in this section, the word
“stockholder” means a holder of record of stock in a stock corporation and also
a member of record of a nonstock corporation; the words “stock” and “share” mean
and include what is ordinarily meant by those words and also membership or
membership interest of a member of a nonstock corporation; and the words
“depository receipt” mean a receipt or other instrument issued by a depository
representing an interest in one or more shares, or fractions thereof, solely of
stock of a corporation, which stock is deposited with the
depository.
(b)
Appraisal
rights shall be available for the shares of any class or series of stock of a
constituent corporation in a merger or consolidation to be effected pursuant to
§ 251 (other than a merger effected pursuant to § 251(g) of this
title), § 252, § 254, § 257, § 258, § 263 or § 264
of this title:
(1)
Provided,
however, that no appraisal rights under this section shall be available for the
shares of any class or series of stock, which stock, or depository receipts in
respect thereof, at the record date fixed to determine the stockholders entitled
to receive notice of the meeting of stockholders to act upon the agreement of
merger or consolidation, were either (i) listed on a national securities
exchange or (ii) held of record by more than 2,000 holders; and further
provided that no appraisal rights shall be available for any shares of stock of
the constituent corporation surviving a merger if the merger did not require for
its approval the vote of the stockholders of the surviving corporation as
provided in § 251(f) of this title.
(2)
Notwithstanding
paragraph (1) of this subsection, appraisal rights under this section shall
be available for the shares of any class or series of stock of a constituent
corporation if the holders thereof are required by the terms of an agreement of
merger or consolidation pursuant to §§ 251, 252, 254, 257, 258, 263 and 264
of this title to accept for such stock anything except:
a.
Shares of
stock of the corporation surviving or resulting from such merger or
consolidation, or depository receipts in respect thereof;
b.
Shares of
stock of any other corporation, or depository receipts in respect thereof, which
shares of stock (or depository receipts in respect thereof) or depository
receipts at the effective date of the merger or consolidation will be either
listed on a national securities exchange or held of record by more than 2,000
holders;
c.
Cash in
lieu of fractional shares or fractional depository receipts described in the
foregoing subparagraphs a. and b. of this paragraph; or
d.
Any
combination of the shares of stock, depository receipts and cash in lieu of
fractional shares or fractional depository receipts described in the foregoing
subparagraphs a., b. and c. of this paragraph.
(3)
In the
event all of the stock of a subsidiary Delaware corporation party to a merger
effected under § 253 of this title is not owned by the parent corporation
immediately before the merger, appraisal rights shall be available for the
shares of the subsidiary Delaware corporation.
(c)
Any
corporation may provide in its certificate of incorporation that appraisal
rights under this section shall be available for the shares of any class or
series of its stock as a result of an amendment to its certificate of
incorporation, any merger or consolidation in which the corporation is a
constituent corporation or the sale of all or substantially all of the assets of
the corporation. If the certificate of incorporation contains such a
provision, the procedures of this section, including those set forth in
subsections (d) and (e) of this section, shall apply as nearly as is
practicable.
(d)
Appraisal
rights shall be perfected as follows:
(1)
If a
proposed merger or consolidation for which appraisal rights are provided under
this section is to be submitted for approval at a meeting of stockholders, the
corporation, not less than 20 days before the meeting, shall notify each of its
stockholders who was such on the record date for notice of such meeting with
respect to shares for which appraisal rights are available pursuant to
subsection (b) or (c) hereof that appraisal rights are available for
any or all of the shares of the constituent corporations, and shall include in
such notice a copy of this section. Each stockholder electing to demand the
appraisal of such stockholder’s shares shall deliver to the corporation, before
the taking of the vote on the merger or consolidation, a written demand for
appraisal of such stockholder’s shares. Such demand will be
sufficient if it reasonably informs the corporation of the identity of the
stockholder and that the stockholder intends thereby to demand the appraisal of
such stockholder’s shares. A proxy or vote against the merger or
consolidation shall not constitute such a demand. A stockholder
electing to take such action must do so by a separate written demand as herein
provided. Within 10 days after the effective date of such merger or
consolidation, the surviving or resulting corporation shall notify each
stockholder of each constituent corporation who has complied with this
subsection and has not voted in favor of or consented to the merger or
consolidation of the date that the merger or consolidation has become effective;
or
(2)
If the
merger or consolidation was approved pursuant to § 228 or § 253 of
this title, then either a constituent corporation before the effective date of
the merger or consolidation or the surviving or resulting corporation within 10
days thereafter shall notify each of the holders of any class or series of stock
of such constituent corporation who are entitled to appraisal rights of the
approval of the merger or consolidation and that appraisal rights are available
for any or all shares of such class or series of stock of such constituent
corporation, and shall include in such notice a copy of this section. Such
notice may, and, if given on or after the effective date of the merger or
consolidation, shall, also notify such stockholders of the effective date of the
merger or consolidation. Any stockholder entitled to appraisal rights
may, within 20 days after the date of mailing of such notice, demand in writing
from the surviving or resulting corporation the appraisal of such holder’s
shares. Such demand will be sufficient if it reasonably informs the
corporation of the identity of the stockholder and that the stockholder intends
thereby to demand the appraisal of such holder’s shares. If such
notice did not notify stockholders of the effective date of the merger or
consolidation, either (i) each such constituent corporation shall send a
second notice before the effective date of the merger or consolidation notifying
each of the holders of any class or series of stock of such constituent
corporation that are entitled to appraisal rights of the effective date of the
merger or consolidation or (ii) the surviving or resulting corporation
shall send such a second notice to all such holders on or within 10 days after
such effective date;
provided
,
however
, that if such
second notice is sent more than 20 days following the sending of the first
notice, such second notice need only be sent to each stockholder who is entitled
to appraisal rights and who has demanded appraisal of such holder’s shares in
accordance with this subsection. An affidavit of the secretary or assistant
secretary or of the transfer agent of the corporation that is required to give
either notice that such notice has been given shall, in the absence of fraud, be
prima facie evidence of the facts stated therein. For purposes of
determining the stockholders entitled to receive either notice, each constituent
corporation may fix, in advance, a record date that shall be not more than 10
days before the date the notice is given,
provided
, that if the
notice is given on or after the effective date of the merger or consolidation,
the record date shall be such effective date. If no record date is
fixed and the notice is given before the effective date, the record date shall
be the close of business on the day next preceding the day on which the notice
is given.
(e)
Within
120 days after the effective date of the merger or consolidation, the surviving
or resulting corporation or any stockholder who has complied with
subsections (a) and (d) of this section hereof and who is otherwise
entitled to appraisal rights, may commence an appraisal proceeding by filing a
petition in the Court of Chancery demanding a determination of the value of the
stock of all such stockholders. Notwithstanding the foregoing, at any
time within 60 days after the effective date of the merger or consolidation, any
stockholder who has not commenced an appraisal proceeding or joined that
proceeding as a named party shall have the right to withdraw such stockholder’s
demand for appraisal and to accept the terms offered upon the merger or
consolidation. Within 120 days after the effective date of the merger
or consolidation, any stockholder who has complied with the requirements of
subsections (a) and (d) of this section hereof, upon written request, shall be
entitled to receive from the corporation surviving the merger or resulting from
the consolidation a statement setting forth the aggregate number of shares not
voted in favor of the merger or consolidation and with respect to which demands
for appraisal have been received and the aggregate number of holders of such
shares. Such written statement shall be mailed to the stockholder within 10 days
after such stockholder’s written request for such a statement is received by the
surviving or resulting corporation or within 10 days after expiration of the
period for delivery of demands for appraisal under subsection (d) of this
section hereof, whichever is later. Notwithstanding subsection (a) of
this section, a person who is the beneficial owner of shares of such stock held
either in a voting trust or by a nominee on behalf of such person may, in such
person’s own name, file a petition or request from the corporation the statement
described in this subsection.
(f)
Upon the
filing of any such petition by a stockholder, service of a copy thereof shall be
made upon the surviving or resulting corporation, which shall within 20 days
after such service file in the office of the Register in Chancery in which the
petition was filed a duly verified list containing the names and addresses of
all stockholders who have demanded payment for their shares and with whom
agreements as to the value of their shares have not been reached by the
surviving or resulting corporation. If the petition shall be filed by the
surviving or resulting corporation, the petition shall be accompanied by such a
duly verified list. The Register in Chancery, if so ordered by the
Court, shall give notice of the time and place fixed for the hearing of such
petition by registered or certified mail to the surviving or resulting
corporation and to the stockholders shown on the list at the addresses therein
stated. Such notice shall also be given by 1 or more publications at
least 1 week before the day of the hearing, in a newspaper of general
circulation published in the City of Wilmington, Delaware or such publication as
the Court deems advisable. The forms of the notices by mail and by
publication shall be approved by the Court, and the costs thereof shall be borne
by the surviving or resulting corporation.
(g)
At the
hearing on such petition, the Court shall determine the stockholders who have
complied with this section and who have become entitled to appraisal
rights. The Court may require the stockholders who have demanded an
appraisal for their shares and who hold stock represented by certificates to
submit their certificates of stock to the Register in Chancery for notation
thereon of the pendency of the appraisal proceedings; and if any stockholder
fails to comply with such direction, the Court may dismiss the proceedings as to
such stockholder.
(h)
After the
Court determines the stockholders entitled to an appraisal, the appraisal
proceeding shall be conducted in accordance with the rules of the Court of
Chancery, including any rules specifically governing appraisal
proceedings. Through such proceeding the Court shall determine the
fair value of the shares exclusive of any element of value arising from the
accomplishment or expectation of the merger or consolidation, together with
interest, if any, to be paid upon the amount determined to be the fair
value. In determining such fair value, the Court shall take into
account all relevant factors. Unless the Court in its discretion
determines otherwise for good cause shown, interest from the effective date of
the merger through the date of payment of the judgment shall be compounded
quarterly and shall accrue at 5% over the Federal Reserve discount rate
(including any surcharge) as established from time to time during the period
between the effective date of the merger and the date of payment of the
judgment. Upon application by the surviving or resulting corporation
or by any stockholder entitled to participate in the appraisal proceeding, the
Court may, in its discretion, proceed to trial upon the appraisal before the
final determination of the stockholders entitled to an appraisal. Any
stockholder whose name appears on the list filed by the surviving or resulting
corporation pursuant to subsection (f) of this section and who has
submitted such stockholder’s certificates of stock to the Register in Chancery,
if such is required, may participate fully in all proceedings until it is
finally determined that such stockholder is not entitled to appraisal rights
under this section.
(i)
The Court
shall direct the payment of the fair value of the shares, together with
interest, if any, by the surviving or resulting corporation to the stockholders
entitled thereto. Payment shall be so made to each such stockholder,
in the case of holders of uncertificated stock forthwith, and the case of
holders of shares represented by certificates upon the surrender to the
corporation of the certificates representing such stock. The Court’s
decree may be enforced as other decrees in the Court of Chancery may be
enforced, whether such surviving or resulting corporation be a corporation of
this State or of any state.
(j)
The costs
of the proceeding may be determined by the Court and taxed upon the parties as
the Court deems equitable in the circumstances. Upon application of a
stockholder, the Court may order all or a portion of the expenses incurred by
any stockholder in connection with the appraisal proceeding, including, without
limitation, reasonable attorney’s fees and the fees and expenses of experts, to
be charged pro rata against the value of all the shares entitled to an
appraisal.
(k)
From and
after the effective date of the merger or consolidation, no stockholder who has
demanded appraisal rights as provided in subsection (d) of this section
shall be entitled to vote such stock for any purpose or to receive payment of
dividends or other distributions on the stock (except dividends or other
distributions payable to stockholders of record at a date which is before the
effective date of the merger or consolidation);
provided
,
however
, that if no
petition for an appraisal shall be filed within the time provided in
subsection (e) of this section, or if such stockholder shall deliver to the
surviving or resulting corporation a written withdrawal of such stockholder’s
demand for an appraisal and an acceptance of the merger or consolidation, either
within 60 days after the effective date of the merger or consolidation as
provided in subsection (e) of this section or thereafter with the written
approval of the corporation, then the right of such stockholder to an appraisal
shall cease. Notwithstanding the foregoing, no appraisal proceeding in the Court
of Chancery shall be dismissed as to any stockholder without the approval of the
Court, and such approval may be conditioned upon such terms as the Court deems
just;
provided
,
however
that
this provision shall not affect the right of any stockholder who has not
commenced an appraisal proceeding or joined that proceeding as a named party to
withdraw such stockholder’s demand for appraisal and to accept the terms offered
upon the merger or consolidation within 60 days after the effective date of
the merger or consolidation, as set forth in subsection (e) of this
section.
(l)
The
shares of the surviving or resulting corporation to which the shares of such
objecting stockholders would have been converted had they assented to the merger
or consolidation shall have the status of authorized and unissued shares of the
surviving or resulting corporation.
THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
SPECIAL
MEETING OF STOCKHOLDERS
The
stockholder(s) hereby appoint(s) John T. Buhler and Kevin J. Cousins, or either
of them, as proxies, each with the power to appoint their substitute, and hereby
authorizes them to represent and to vote, as designated on the reverse side of
this proxy card, all of the shares of SenoRx, Inc. common stock that the
stockholder(s) is/are entitled to vote at the special meeting to be held on
[__________], 2010, starting at [__] [a/p.m.] Pacific Time at SenoRx, Inc.’s
principal executive offices located at 3 Morgan, Irvine, California, and any
adjournment or postponement thereof.
THIS
PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE
STOCKHOLDER(S). IF NO SUCH DIRECTIONS ARE MADE, THIS PROXY WILL BE
VOTED FOR THE PROPOSAL TO ADOPT THE MERGER AGREEMENT, AND FOR THE PROPOSAL TO
ADJOURN OR POSTPONE THE MEETING, IF NECESSARY OR APPROPRIATE, TO SOLICIT
ADDITIONAL PROXIES.
PLEASE
MARK, SIGN, DATE AND RETURN THIS PROXY CARD USING THE ENCLOSED REPLY
ENVELOPE OR PROMPTLY SUBMIT YOUR VOTE BY TELEPHONE OR INTERNET BY FOLLOWING THE
INSTRUCTIONS ON THE REVERSE.
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VOTE
BY INTERNET — [WEBSITE]
Use
the Internet to transmit your voting instructions and for electronic
delivery of information up until [_:__ a/p.m.] Pacific Time the day before
the cut-off date or special meeting date. Have your proxy card
in hand when you access the web site and follow the instructions to obtain
your records and to create an electronic voting instruction
form.
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ELECTRONIC
DELIVERY OF FUTURE SHAREHOLDER COMMUNICATIONS
If
you would like to reduce the costs incurred by SenoRx, Inc. in mailing
proxy materials, you can consent to receiving all future proxy statements,
proxy cards and annual reports electronically via e-mail or the
Internet. To sign up for electronic delivery, please follow the
instructions above to vote using the Internet and, when prompted, indicate
that you agree to receive or access shareholder communications
electronically in future years.
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VOTE
BY TELEPHONE — [PHONE]
Use
any touch-tone telephone to transmit your voting instructions up until
[_:__ a/p.m.] Pacific Time the day before the cut-off date or special
meeting date. Have your proxy card in hand when you call and
then follow the instructions.
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VOTE
BY MAIL
Mark,
sign and date your proxy card and return it in the postage-paid envelope
we have provided or return it to SenoRx, Inc.,
c/o [ADDRESS].
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TO
VOTE, MARK BLOCKS BELOW IN BLUE
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OR
BLACK INK AS FOLLOWS:
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KEEP
THIS PORTION FOR YOUR RECORDS
|
DETACH
AND RETURN THIS PORTION ONLY
THIS
PROXY CARD IS VALID ONLY WHEN SIGNED
SENORX,
INC.
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Vote
on Proposals
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For
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Against
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Abstain
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1.
A proposal to adopt the Agreement and Plan of Merger, dated as of May 4,
2010, as it may be amended from time to time, among C. R. Bard, Inc., a
New Jersey corporation (“Bard”), Raptor Acquisition Corp., a Delaware
corporation and indirect wholly owned subsidiary of Bard, and SenoRx,
Inc., a Delaware corporation (“SenoRx”), pursuant to which SenoRx will be
acquired by Bard.
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o
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o
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o
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2.
A proposal to adjourn the special meeting to a later date or time, if
necessary or appropriate, to solicit additional proxies in the event there
are insufficient votes at the time of such adjournment to adopt the
Agreement and Plan of Merger.
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o
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o
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o
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Signature
[PLEASE SIGN WITHIN BOX]
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Date
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Signature
(Joint Owners)
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Date
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Senorx (MM) (NASDAQ:SENO)
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De May 2024 a Jun 2024
Senorx (MM) (NASDAQ:SENO)
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