Item
1.01 – Entry Into a Definitive Agreement.
Agreement
and Plan of Merger
On
August 7, 2019, Corindus Vascular Robotics, Inc., a Delaware corporation (“
Corindus
” or
the “
Company
”), entered into an agreement and plan of merger (the “
Merger Agreement
”)
with Siemens Medical Solutions USA, Inc., a Delaware corporation (“
SMS USA
”), Corpus Merger, Inc., a
Delaware corporation and a wholly owned subsidiary of SMS USA (“
Merger Sub
”), pursuant to which, on the
terms and subject to the conditions set forth in the Merger Agreement, and in accordance with the General Corporation Law of
the State of Delaware, at the effective time of the Merger (as defined in the Merger Agreement) (the “
Effective
Time
”), Merger Sub shall be merged with and into Corindus with Corindus continuing as the surviving corporation and
a wholly owned subsidiary of SMS USA. The boards of directors of each of Corindus, Merger Sub and SMS USA have approved the
Merger Agreement. The Merger is expected to close in the fourth quarter of 2019, subject to approval by Corindus
stockholders, the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the “
HSR Act
”) and the satisfaction of other customary closing
conditions, as described below.
On
the terms and subject to the conditions set forth in the Merger Agreement, at the Effective Time, each share of common stock,
par value $0.0001 of Corindus (the “
Company Common Stock
”) issued and outstanding immediately prior to the
Effective Time (other than (i) Canceled Shares (as such term is defined in the Merger Agreement) and (ii) Dissenting Shares (as
such term is defined in the Merger Agreement) shall be converted into the right to receive an amount in cash equal to $4.28 (the
“
Common Stock Consideration
”).
On
the terms and subject to the conditions set forth in the Merger Agreement, at the Effective Time, each share of series A preferred
stock, par value $0.0001 and series A-1 preferred stock par value $0.0001 of Corindus (collectively, the “
Company Preferred
Stock
”) issued and outstanding immediately prior to the Effective Time (other than (i) Canceled Shares and (ii) Dissenting
Shares) shall be converted into the right to receive an amount in cash equal to $85.60 and each outstanding warrant to purchase
a share of Company Common Stock will be executed on a cashless basis for the Common Stock Consideration less the strike price
of the applicable warrant.
In
addition, on the terms and subject to the conditions set forth in the Merger Agreement, at the Effective Time: (i) each option
to purchase a share of Company Common Stock that is outstanding and unexercised immediately prior to the Effective Time, whether
vested or unvested, shall be canceled and converted into the right to receive an amount in cash (without interest and less any
applicable withholding taxes) equal to the product of (x) the excess, if any, of the Common Stock Consideration over the per share
exercise price of such option, and (y) the number of shares of Company Common Stock subject to such option, and (ii) each Company
restricted stock unit award that is outstanding immediately prior to the Effective Time, whether vested or unvested, shall be
canceled and converted into the right to receive an amount in cash (without interest and less any applicable withholding taxes)
equal to the product of (x) the Common Stock Consideration and (y) the number of shares of Company Common Stock subject to such
restricted stock unit award.
Prior
to adoption of the Merger Agreement by Corindus’ stockholders, if Corindus receives an unsolicited bona fide
written offer that constitutes or could reasonably be expected to lead to or result in a Company Superior Proposal (as
defined in the Merger Agreement), Corindus may negotiate and, if the board of directors of
Corindus (the “
Board
”) ultimately determines that such written offer is a Company Superior Proposal,
subject to the notice obligations below, the Board may terminate the Merger Agreement in order to enter into a definitive
agreement with respect to such Company Superior Proposal, provided that Corindus pays to SMS USA a termination fee of
$32,515,000 (the “
Termination Fee
”) prior to or concurrently with such termination. Prior to entering into
a definitive agreement with respect to a Company Superior Proposal, Corindus must (A) notify SMS USA in writing (the date of
such notice, the “
Notice Date
”) that Corindus intends to enter into a definitive agreement with respect to
such Company Superior Proposal, (B) provide to SMS USA a copy of the proposed definitive agreements (and any related
agreements) and (C) consider any written proposal delivered by SMS USA prior to 11:59 p.m. on the 2nd business day after the
Notice Date and the Board has concluded that such definitive agreement still constitutes a Company Superior
Proposal.
In
addition, prior to adoption of the Merger Agreement by Corindus’ stockholders, the Board may, in certain circumstances,
including in response to a Company Intervening Event (as defined in the Merger Agreement), effect a Company Adverse Recommendation
Change (as defined in the Merger Agreement), in which case SMS USA may terminate the Merger Agreement and Corindus is obligated
to pay to SMS USA the Termination Fee.
The
Merger Agreement also contains certain other termination rights for both Corindus and SMS USA, including (i) in the event that
the holders of a majority of the outstanding shares of the Company Common Stock and Company Preferred Stock, voting together as
a single class, do not approve the Merger at a duly convened meeting of Corindus (the “
Stockholder Approval
”),
(ii) that the Merger is not consummated on or before August 7, 2020, or (iii) if any governmental authority shall
have issued or entered an order or a law shall have been enacted after the date of the Merger Agreement that has the effect of
permanently enjoining or otherwise prohibiting the Merger. In the event (A) the Merger Agreement is terminated by either party
as a result of clauses (i) or (ii) above, or by SMS USA if Corindus has breached or failed to perform a representation,
warranty, covenant or other agreement in the Merger Agreement and such breach or failure results in a failure of a closing condition,
and (B) prior to termination there existed a Company Acquisition Proposal (as defined in the Merger Agreement) from a third party,
then in certain circumstances if Corindus consummates a Company Acquisition Proposal with the same third party within 12 months
of such termination, Corindus is obligated to pay to SMS USA the Termination Fee.
In
connection with any termination event that obligates Corindus to pay the Termination Fee in no circumstance will Corindus
be obligated to pay the Termination Fee on more than one occasion.
Corindus
and SMS USA have made customary representations, warranties and covenants in the Merger Agreement, including, among other, covenants
that: (i) Corindus will conduct its and its subsidiaries’ businesses in all material respects in the ordinary course of
business consistent with past practice during the period between the execution of the Merger Agreement and the Effective Time;
(ii) Corindus will not engage in certain types of transactions or take certain actions during such period without the prior consent
of SMS USA (which such consent cannot be unreasonably withheld); (iii) Corindus will convene a meeting of Corindus’ stockholders
to consider the adoption of the Merger Agreement; (iv) Corindus will not, directly or indirectly, initiate, seek, solicit, facilitate
or knowingly encourage or knowingly induce the making, submission or announcement of any acquisition proposal from a third party;
and (v) the Board will recommend adoption of the Merger Agreement by the stockholders of Corindus and, subject to certain customary
exceptions such as the receipt of an unsolicited, bona fide acquisition proposal from a third party or other intervening event
(as further described below), will not change such recommendation.
Corindus
and SMS USA have agreed to use reasonable best efforts to consummate the transactions and cause the conditions to the Merger to
be satisfied, including obtaining all necessary actions or non-actions, consents and approvals from governmental authorities or
other persons necessary in connection with the Merger and making all necessary registrations and filings, including under the
HSR Act,
provided
,
however
, that neither party shall be required to make concessions in connection with seeking
or obtaining consent to the Merger, including any obligation to divest, hold separate or otherwise take action that limits such
party’s freedom of action.
Consummation
of the Merger is subject to certain customary closing conditions, including (i) the Stockholder Approval of the Merger Agreement,
(ii) the absence of any law or order restraining, enjoining or otherwise prohibiting the consummation of the Merger, (iii) the
expiration or termination of any applicable waiting period under the HSR Act, (iv) the absence of a material adverse effect with
respect to Corindus, (v) compliance in all material respects on the part of each of Corindus and SMS USA with such party’s
agreements and covenants under the Merger Agreement and (vi) acknowledgment by the Company Preferred Stock of the payment terms
set forth in the Merger Agreement. The obligation of each party to consummate the Merger is also conditioned upon the other party’s
representations and warranties being true and correct (subject to certain de minimis, materiality and material adverse effect
exceptions). The consummation of the Merger is not subject to a financing condition.
The
foregoing descriptions of the Merger, the Merger Agreement and the transactions contemplated thereby do not purport to be complete
and are subject to, and qualified in their entirety by reference to, the full text of the Merger Agreement, which is attached
hereto as
Exhibit 2.1
and incorporated herein by reference.
The
Merger Agreement has been included to provide investors with information regarding its terms. It is not intended to provide any
other factual information about Corindus. The representations, warranties and covenants contained in the Merger Agreement were
made only for purposes of the Merger Agreement as of the specific dates therein, were solely for the benefit of the parties to
the Merger Agreement, may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential
disclosures made for the purposes of allocating contractual risk among the parties to the Merger Agreement instead of establishing
these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from
those applicable to investors or those generally applicable under the securities laws. Investors are not third-party beneficiaries
under the Merger Agreement and should not rely on the representations, warranties and covenants or any descriptions thereof as
characterizations of the actual state of facts or condition of the parties thereto or any of their respective subsidiaries or
affiliates. Moreover, information concerning the subject matter of representations and warranties may change after the date of
the Merger Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures.
Voting
and Support Agreement
In
connection with the execution of the Merger Agreement, on August 7, 2019, SMS USA entered into a voting and support agreement
(the “
Voting Agreement
”) with HealthCor Partners Management, L.P. and affiliated entities (collectively, “
HealthCor
”),
pursuant to which, HealthCor has agreed, among other things, to vote (or cause to be voted) all voting securities of Corindus
held by HealthCor in favor of adoption of the Merger Agreement and approval of the Transaction and against any Company Acquisition
Proposal,
provided
, that the Voting Agreement does not limit or restrict any designee of HealthCor who is a director of
Corindus from acting in such capacity or fulfilling the obligation of such office, including by acting or voting in his capacity
as a director of Corindus.
The
Voting Agreement shall terminate upon the date on which the Board makes a Company Adverse Recommendation Change subject to the
applicable terms and conditions of the Merger Agreement.
The
foregoing description of the Voting Agreement does not purport to be complete and is subject to, and qualified in its entirety
by reference to, the full text of the Voting Agreement, which is attached hereto as
Exhibit 10.1
and incorporated herein
by reference.
Letter
of Support
In
connection with the execution of the Merger Agreement, on August 7, 2019, Siemens Healthineers AG (“
Siemens Healthineers
”),
the direct parent of SMS USA, delivered a letter of support (the “
Letter of Support
”) which was accepted by
Corindus, pursuant to which, Siemens Healthineers has agreed, guaranteed and committed to the complete payment and discharge of
all monetary obligations and liabilities of SMS USA to Corindus in accordance with, and arising from, the Merger Agreement (other
than the indemnification obligations of SMS USA owed to directors and officers of Corindus pursuant to the Merger Agreement).
If SMS USA defaults in the due and punctual payment of such obligations under the Merger Agreement, Corindus shall be entitled
to seek satisfaction and payment of such obligations directly against Siemens Heatlhineers up to the Aggregate Merger Consideration
(as defined in the Merger Agreement) after Corindus has first made written demand for satisfaction and payment of the relevant
obligations to SMS USA and the expiry of a grace period of 30 days.
The
foregoing description of the Letter of Support does not purport to be complete and is subject to, and qualified in its entirety
by reference to, the full text of the Letter of Support, which is attached hereto as
Exhibit 10.2
and incorporated herein
by reference.