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| IFLO > SEC Filings for IFLO > Form 8-K on 9-Oct-2009 | All Recent SEC Filings |
9-Oct-2009
Entry into a Material Definitive Agreement, Financial Statements and Exhibits
Sub owns at least 90% of the outstanding Shares, then provided that the other
conditions of the Merger have been satisfied or waived, Merger Sub will merge
into I-Flow in a "short-form" merger pursuant to the applicable provisions of
Delaware law, which will not require the approval of I-Flow's stockholders other
than Merger Sub.
In the Merger Agreement, I-Flow has granted to Merger Sub an option (the
"Top-Up Option") to purchase, at a price per share equal to the Offer Price, a
number of newly issued Shares equal to the lowest number of Shares that, when
added to the number of Shares owned by K-C or Merger Sub at the time of exercise
of the Top-Up Option, constitutes one Share more than 90% of the fully diluted
Shares (after giving effect to the issuance of all Shares subject to the Top-Up
Option); provided that the Top-Up Option shall not be exercisable for a number
of Shares in excess of I-Flow's authorized and unissued Shares on a fully
diluted basis. Merger Sub may exercise the Top-Up Option during the 20 business
day period following the consummation of the Offer.
In addition, pursuant to the terms of the Merger Agreement, effective upon
the purchase of Shares pursuant to the Offer, K-C will be entitled to designate
a number of directors, rounded up to the next whole number, on I-Flow's Board of
Directors and committees thereof equal to the product of (i) the total number of
directors on I-Flow's Board of Directors or a committee thereof, as applicable,
and (ii) the percentage that the number of Shares beneficially owned by K-C
and/or Merger Sub bears to the number of Shares then outstanding.
The Merger Agreement contains customary representations and warranties by
K-C, Merger Sub and I-Flow. The Merger Agreement also contains customary
covenants and agreements, including with respect to the operation of the
business of I-Flow and its subsidiaries between signing of the Merger Agreement
and closing of the Merger, solicitation of alternative acquisition proposals by
I-Flow, governmental filings and approvals, and other matters.
The Merger Agreement and the Offer may be terminated under certain customary
circumstances by K-C and/or I-Flow, including if the Offer is not consummated on
or before the Outside Date (as it may be extended as described above). The
Merger Agreement provides for a termination fee and/or expenses of up to
approximately $12.8 million, payable by I-Flow to K-C, if the Merger Agreement
is terminated under certain circumstances.
Within five business days of the date of the Merger Agreement, I-Flow will
effect an amendment to the Rights Agreement, dated as of March 8, 2002, by and
between I-Flow and American Stock Transfer & Trust Company, as rights agent (the
"Rights Agreement"), in order to render the Rights Agreement inapplicable to the
transactions contemplated by the Merger Agreement and to cause the Rights
Agreement to terminate upon consummation of the Merger.
The Merger Agreement is included as an exhibit to this Current Report on Form
8-K to provide additional information regarding the terms of the transactions
described herein and is not intended to provide any other factual information or
disclosure about I-Flow, K-C or Merger Sub. The representations, warranties and
covenants contained in the Merger Agreement were made only for purposes of such
agreement and as of a specific date, were solely for the benefit of the parties
to such agreement (except as to certain indemnification obligations), are
subject to limitations agreed upon by the contracting parties, including being
qualified by disclosure schedules made for the purposes of allocating
contractual risk between and among the parties thereto 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. Moreover, information concerning the subject matter of the
representations and warranties may change after the date of the Merger
Agreement, which subsequent information may or may not be fully reflected in
I-Flow's public disclosures. Investors are not third-party beneficiaries under
the Merger Agreement and, in light of the foregoing reasons, should not rely on
the representations, warranties and covenants or any descriptions thereof as
characterizations of the actual state of facts or condition of I-Flow, K-C or
Merger Sub or any of their respective subsidiaries or affiliates.
In connection with the transactions contemplated by the Merger Agreement, all
directors and executive officers of I-Flow have entered into a Tender and
Support Agreement with K-C (the "Tender
and Support Agreement") whereby the directors and executive officers have agreed
to tender their Shares in the Offer, subject to certain terms and conditions.
The foregoing description of the Merger Agreement and Tender and Support
Agreement are qualified in their entirety by reference to the full texts
thereof, which are attached hereto as Exhibit 2.1 and Exhibit 99.2,
respectively, and incorporated herein by reference. The press release announcing
the transactions contemplated by the Merger Agreement is attached hereto as
Exhibit 99.1 and incorporated herein by reference.
Additional Information
In connection with the Offer, K-C intends to file a Schedule TO with the SEC,
and I-Flow intends to file a Solicitation/Recommendation Statement on
Schedule 14D-9. Such documents are not currently available. When these documents
become available, I-Flow stockholders are urged to read them carefully before
making any decisions, as they will contain important information about the
transaction. Investors will be able to obtain free copies of the Schedule TO and
Schedule 14D-9, as well as other filings containing information about K-C and
I-Flow, without charge, at the SEC's website (http://www.sec.gov) once such
documents are filed with the SEC. A free copy of the Schedule 14D-9, when it
becomes available, may also be obtained from I-Flow.
Forward-Looking Statements
Statements by the Company in this report and in other reports and statements
released by the Company are and will be forward-looking in nature and express
the Company's current opinions about trends and factors that may impact future
operating results. Statements that use words such as "may," "will," "should,"
"believes," "predicts," "estimates," "projects," "anticipates" or "expects" or
use similar expressions are intended to identify forward-looking statements.
Forward-looking statements are subject to material risks, assumptions and
uncertainties, which could cause actual results to differ materially from those
currently expected, and readers are cautioned not to place undue reliance on
these forward-looking statements. Except as required by law, the Company
undertakes no obligation to publish revised forward-looking statements to
reflect the occurrence of unanticipated or subsequent events. Readers are also
urged to carefully review and consider the various disclosures made by the
Company in this report that seek to advise interested parties of the risks and
other factors that affect the Company's business. Interested parties should also
review the Company's reports on Forms 10-K for the year ended December 31, 2008,
10-Q and 8-K and other reports that are periodically filed with the Securities
and Exchange Commission. The risks affecting the Company's business include,
among others: the risk that the Offer or the Merger will not be consummated; the
risk that the Company's business will be adversely impacted during the pendency
of the Offer and the Merger, whether as a result of announcement of the Offer or
otherwise; physician acceptance of infusion-based therapeutic regimens;
potential inadequacy of insurance to cover existing and future product liability
claims; implementation of the Company's direct sales strategy; successful
integration of the Company's acquisition of AcryMed Incorporated and further
development and commercialization of AcryMed's technologies; dependence on the
Company's suppliers and distributors; the Company's continuing compliance with
applicable laws and regulations, such as the Medicare Supplier Standards and
Food, Drug and Cosmetic Act, and the Medicare's and FDA's concurrence with
management's subjective judgment on compliance issues, including those related
to the recent FDA warning letter; the reimbursement system currently in place
and future changes to that system; product availability, acceptance and safety;
competition in the industry; technological changes; intellectual property
challenges and claims; economic and political conditions in foreign countries;
currency exchange rates; inadequacy of booked reserves (including those related
to the chondrolysis litigation); future impairment write-downs; and reliance on
the success of the home health care industry. All forward-looking statements,
whether made in this report or elsewhere, should be considered in context with
the various disclosures made by the Company about its business.
Exhibit No. Description of Exhibit
2.1 Agreement and Plan of Merger, dated as of October 8, 2009, by and among
Kimberly-Clark Corporation, Boxer Acquisition, Inc. and I-Flow
Corporation
99.1 Press Release, dated as of October 9, 2009
99.2 Support and Tender Agreement, dated as of October 8, 2009, by and between
Kimberly-Clark Corporation, Boxer Acquisition, Inc. and the I-Flow
directors and officers identified therein
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