Uncertainties associated with the Transactions may cause a loss of employees and may
otherwise materially adversely affect the future business and operations of the combined company.
The combined companys
success after the Transactions will depend in part upon the ability of the combined company to retain executive officers and key employees of HeartWare and Valtech. In some of the fields in which HeartWare and Valtech operate, the competition for
qualified personnel is particularly intense and there are only a limited number of people in the job market who possess the requisite skills and it may be difficult for the combined company to hire personnel over time. The combined company will
operate in several geographic locations, including parts of Israel and Massachusetts, where the labor markets are particularly competitive. The combined company may experience difficulty in hiring and retaining sufficient numbers of qualified
management, manufacturing, technical, application engineering, marketing, sales and support personnel for parts or all of its business.
Current and prospective employees of HeartWare and Valtech may experience uncertainty about their roles with the combined company following
the Transactions. In addition, key employees may depart because of issues relating to the uncertainty and difficulty of integration or a desire not to remain with the combined company following the Transactions. The loss of services of any key
personnel or the inability to hire new personnel with the requisite skills could restrict the ability of the combined company to develop new products or enhance existing products in a timely matter, to sell products to customers or to manage the
business of the combined company effectively. Also, the business, financial condition and results of operations of the combined company could be materially adversely affected by the loss of any of its key employees, by the failure of any key
employee to perform in his or her current position, or by the combined companys inability to attract and retain skilled employees, particularly engineers.
Third parties may claim that Holdco is infringing their intellectual property, and the combined company could suffer significant
litigation or licensing expenses or be prevented from selling its products or services.
The medical device industry is
characterized by uncertain and conflicting intellectual property claims and vigorous protection and pursuit of these rights. Each of HeartWare and Valtech may be involved in disputes regarding patent and other intellectual property rights. Each of
HeartWare and Valtech may receive communications from third parties asserting that certain of its products, processes or technologies infringe upon third party patent rights, copyrights, trademark rights or other intellectual property rights. Third
parties may claim that Holdco is infringing their intellectual property rights, and the combined company may be unaware of intellectual property rights of others that may cover some of its technology, products and services. Defending these claims
may be costly and time consuming, and may divert the attention of management and key personnel from other business issues. The complexity of the technology involved and the uncertainty of intellectual property litigation increase these risks. Claims
of intellectual property infringement also might require the combined company to enter into costly royalty or license agreements. Holdco may be unable to obtain royalty or license agreements on acceptable terms, or at all. Similarly, changing its
products or processes to avoid infringing the rights of others may be costly or impractical and may be subject to regulatory approvals. The combined company may also be subject to significant damages or injunctions against development and sale of
certain of its products and services. Resolution of whether any of the products or intellectual property of the combined company has infringed on valid rights held by others could have a material adverse effect on results of operations or financial
condition and may require material changes in production processes and products.
The combined company will be subject to risks
associated with doing business internationally.
The conduct of the combined business internationally is subject to certain risks
inherent in international business, many of which are beyond the combined companys control. These risks include, among other things:
||adverse changes in tariff and trade protection measures; |
||changes in foreign regulatory requirements; |