FORM OF AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER among BOSTON SCIENTIFIC CORPORATION, BOSTON SCIENTIFIC SCIMED, INC., ADVANCED BIONICS CORPORATION, THE BIONICS TRUST and JEFFREY D. GOLDBERG AND CARLA WOODS (COLLECTIVELY IN THEIR CAPACITY AS THE STOCKHOLDERSREPRESENTATIVE) Dated as of August 9, 2007 TABLE OF CONTENTS

 

 

 

 

 

 

 

 

 

among

 

BOSTON SCIENTIFIC CORPORATION,

 

BOSTON SCIENTIFIC SCIMED, INC.,

 

ADVANCED BIONICS CORPORATION,

 

THE BIONICS TRUST

 

and

 

JEFFREY D. GOLDBERG AND CARLA WOODS (COLLECTIVELY IN THEIR CAPACITY AS THE STOCKHOLDERS’ REPRESENTATIVE)

 

Dated as of August 9, 2007

 

 

 

 

 

 

 

 

This AMENDMENT NO. 1 TO THE AGREEMENT AND PLAN OF MERGER (this “Amendment 1”), dated as of August 9, 2007 and effective as of the Amendment 1 Effective Time, is entered into by and among BOSTON SCIENTIFIC CORPORATION, a Delaware corporation (“Parent”), BOSTON SCIENTIFIC SCIMED, INC., (formerly known as Scimed Life Systems, Inc.) a Minnesota corporation and a wholly owned subsidiary of Parent (“Scimed”), ADVANCED BIONICS CORPORATION, a Delaware corporation and a wholly owned subsidiary of Scimed (“Advanced Bionics”), the BIONICS TRUST (the “Trust”) and CARLA WOODS and JEFFREY D. GOLDBERG (such persons acting together by majority vote, and any predecessor or successor persons acting together by majority vote, solely in their capacity as Stockholders’ Representative under the Merger Agreement being the “Stockholders’ Representative”).

 

WHEREAS, Parent, Scimed, Claude Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of Scimed, Advanced Bionics, the Trust and the Stockholders’ Representative entered into that certain Agreement and Plan of Merger dated as of May 28, 2004 (the “Merger Agreement”).  Capitalized terms used herein but not defined herein have the meaning ascribed to such terms in the Merger Agreement.  References herein to a specific Article, Section, Schedule or Exhibit will refer, respectively, to Articles, Sections, Schedules or Exhibits of the Merger Agreement unless otherwise specified.

 

WHEREAS, this Amendment 1 is being executed and delivered pursuant to Section 2.01(a) of that certain Amendment Agreement dated as of the date hereof (the “Amendment Agreement”) among Parent, Scimed, Advanced Bionics, the Trust and the Stockholders’ Representative to amend the Merger Agreement.

 

WHEREAS, if the Amendment Agreement terminates, and therefore the Closing  (as defined in the Amendment Agreement) does not occur, this Amendment 1 will terminate and be of no further force or effect as of the date the Amendment Agreement terminates, any amendment to the Merger Agreement effected by this Amendment 1 will be null and void other than in respect of the period during which Amendment 1 was effective, if any, and the Merger Agreement will not be deemed amended by this Amendment 1 in any respect whatsoever.

 

NOW, THEREFORE, in consideration of the premises and the mutual agreements and covenants hereinafter set forth, and intending to be legally bound, the parties hereto hereby agree as follows:

 

 

 

 

SECTION 1.01  Amendment to Article I.  Article I will be amended to add the following definitions, which will be placed in Article I in alphabetical order:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SECTION 1.02  Amendment to Section 2.11(e).  Section 2.11(e) will be amended to add the following sentence:

 

 

SECTION 1.03  Amendment to Section 2.11(f).  Section 2.11(f) will be amended to add the following sentence:

 

 

SECTION 1.04  Amendment to Section 5.03.  Section 5.03 will be amended as follows:

 

(a)  Section 5.03.  Section 5.03 will be amended to read in its entirety as follows:

 

Section 5.03.          Public Announcements.

 

 

 

SECTION 1.05  Amendment to Section 5.04.  Section 5.04 will be amended as follows:

 

(a)  Section 5.04(a).  Section 5.04(a) will be amended to read in its entirety as follows:

 

 

 

(b)  Section 5.04(c).  Section 5.04(c) will be amended to read in its entirety as follows:

 

 

 

(c)  Section 5.04(d). will be amended to read in its entirety as follows:

 

 

(d)  Section 5.04(e).Section 5.04(e) will be amended as follows:

 

(i)  The preamble to Section 5.04(e) will be amended as follows: “(e) The parties hereto agree that, without the approval of Pete Nicholas and Alfred E. Mann, neither Parent, including any of its Affiliates in respect of the Retained Businesses, nor the Trust nor the EOR Designee with respect to the Transferred Businesses, shall during the period between the Amendment 1 Effective Time and the earlier of the (i) Amendment 2 Effective Time and (ii) the termination of the Amendment Agreement:”

 

(ii)  The following will be added to the end of Section 5.04(e)(iv): “; provided, that the parties hereto acknowledge and agree that from and after the Amendment 1 Effective Time, (A) if Michael Onuscheck is terminated, voluntarily resigns as the Parent Designee, dies, or becomes disabled so that he cannot fulfill his obligations as the Parent Designee, Parent will appoint a successor Parent Designee to conduct the Retained Businesses that is (x) an employee of the Company as of the date of the Amendment Agreement or (y) not an employee of the Company at such time, but is reasonably acceptable to the Stockholders’ Representative, and (B) if Jeffrey H. Greiner is terminated, voluntarily resigns as the EOR Designee, dies, or becomes disabled so that he cannot fulfill his obligations as the EOR Designee, the Stockholders’ Representative will be permitted to appoint a successor EOR Designee to conduct the Transferred Businesses that is (x) an employee of the Company as of the date of the Amendment Agreement or (y) not an employee of the Company at such time, but is reasonably acceptable to Parent.”

 

(iii)  The following will be added to the end of Section 5.04(e)(v):  “(provided that Parent will have the right to terminate the employment of Michael Onuscheck and the Stockholders’ Representative will have the right to terminate the employment of Jeffrey H. Greiner, in each case without the approval of Messrs. Nicholas and Mann.)”

 

(iv)  Section 5.04(e)(ix) will be deleted in its entirety.

 

(e)  Section 5.04(f).  Section 5.04(f)(ii) will be amended to read in its entirety as follows:

 

 

(f)  Section 5.04(g).  Section 5.04(g) will be amended to read in its entirety as follows:

 

 

SECTION 1.06  Amendment to Section 8.04.  Section 8.04 will be amended as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SECTION 2.01  Termination of Amendment Agreement.  The parties hereto acknowledge and agree that in event the Amendment Agreement is terminated, this Amendment 1 will also terminate and be of no force or effect, any amendment to the Merger Agreement effected by this Amendment 1 will be null and void and the Merger Agreement will not be deemed amended by this Amendment 1 in any respect whatsoever; and

 

(a)  Notwithstanding Section 2.01(a) of this Amendment 1, any action or failure to act effected by any party hereto (including the Parent Designee and the EOR Designee), after the date hereof but prior to the termination of the Amendment Agreement, to the extent such action or failure to act is expressly permitted by the Merger Agreement as amended by this Amendment 1, will not be deemed a breach or failure to comply with the Merger Agreement.

 

(b)  Scimed will reduce the next Earn Out Payment to be paid to the Trust  by (i) the amount by which the expenses of the Transferred Business during the period between the Amendment 1 Effective Time and the termination of the Amendment Agreement in respect of the line items relating to selling, marketing, distribution, development, clinical and regulatory matters have exceeded the Auditory Budget for such

 

items (calculated on a pro rata basis for such period) , and (ii) the amount of the Separation Costs (as defined in the Separation Agreement (as defined in the Auditory Purchase Agreement)) paid to third parties between the Amendment 1 Effective Time and the termination of this Amendment 1 in respect of services to the Transferred Business and allocated to the Auditory Products LLC pursuant to the Separation Agreement.  Any disagreement with respect to the amount of such reduction shall be resolved in accordance with the procedures set forth in Sections 3.02(c) and 12.11 of the Auditory Purchase Agreement.

 

(c)  Notwithstanding Section 1.03 of this Amendment 1, if the Amendment Agreement is terminated after the Amendment 1 Effective Time, and after the date on which the Earn Out Payment would have been payable upon the Company's achieving Aggregate Net Sales for the immediately preceding twelve-month period of more than $300,000,000 in accordance with clause (i)(B) of the definition of Additional Earn Out Payment in the Merger Agreement, then, subject to Section 2.01(b) of this Amendment 1, Scimed will promptly, and in no event later than two Business Days after such termination, deliver to the Trust such previously foregone Earn Out Payment in cash, in immediately available funds by wire transfer to an account designated by the Trust.

 

 

 

 

SECTION 3.01  No Further Amendment . Except as expressly amended hereby, all other provisions of the Merger Agreement will be and remain in full force and effect.

 

SECTION 3.02  Counterparts.  This Amendment 1 may be executed and delivered (including by facsimile transmission) in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed will be deemed to be an original but all of which taken together will constitute one and the same agreement.

 

[SIGNATURE PAGE FOLLOWS]

 

IN WITNESS WHEREOF, each of the parties hereto has executed or caused this Amendment 1 to be duly executed as of the date first written above by such party or by any officer of such party thereunto duly authorized, as applicable.

 

 

	BOSTON SCIENTIFIC CORPORATION
	By: Name:
	Title:

	BOSTON SCIENTIFIC SCIMED, INC.
	By: Name:
	Title:

 

 

[AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER]

 

 

[AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER]

 

 

 

Unless otherwise approved by Parent's Chief Operating Officer and the EOR Designee:

 

1.	Assert Intellectual Property against any person.

 

2.	Respond to or settle any Third Party Claim of infringement or misappropriation of Intellectual Property, it being agreed that the parties will cooperate in good faith in determining how to respond to such Third Party Claim.

 

3.	Disclose to any person any confidential or proprietary information of Parent or any of its Affiliates, including with respect to the drug eluting electrode project.

 

4.	Enter into, or amend the terms of, any transaction or arrangement in respect of the Transferred Business with any Affiliate of the Purchaser, including any person controlled by Alfred E. Mann.

 

5.	Enter into any consent order or decree that either (i) affects the Retained Business or Parent or any of its Affiliates other than the Seller solely in respect of the Transferred Business or (ii) involves the payment of any money.

 

6.	Settle any product liability claim in a manner that is inconsistent in any material respect with past practice, including the settlement of any single claim in respect of HiRes 90K cochlear implants that contain the feedthrus made by Astro Seal for more than $45,000.

 

 

 

 

 

 

 

1.

Unless otherwise approved by the EOR Designee and the Parent Designee, Parent will not terminate the employment of any employee with the Surviving Corporation with the title of Director or higher (including a Regional Director in the Sales Department) who works for the Retained Businesses in the Research & Development Department or the Sales Department, or give such employee Good Reason to leave the Surviving Corporation, in each case other than for Cause.

 

2.

Unless otherwise approved by the EOR Designee and the Parent Designee, Parent will not terminate the employment of more than three employees of the Surviving Corporation with a title below Director who work for the Retained Businesses in the Research & Development Department, or give such employees Good Reason to leave the Surviving Corporation, in each case other than for Cause.

 

3.

Unless otherwise approved by the EOR Designee and the Parent Designee, Parent will not terminate the employment of more than 15 employees with the Surviving Corporation with a title below Director who work for the Retained Businesses in the Sales Department, or give such employees Good Reason to leave the Surviving Corporation, in each case other than for Cause.

 

4.	Unless otherwise approved by the EOR Designee and the Parent Designee, Parent will not terminate any research and development program for which funding is provided in the Retained Business Budget.