Exhibit 99.1
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT, dated as of November 13, 1997 (the
"Agreement"), among MEDIQ Incorporated, a Delaware corporation ("MEDIQ"), MEDIQ
Investment Services, Inc., a Delaware corporation ("MIS" and together with
MEDIQ, collectively the "Seller"), and InnoServ Technologies, Inc., a California
corporation (the "Company").
WITNESSETH:
WHEREAS, Seller owns 2,026,438 shares (the "Issuer Shares") of the common
stock of the Company (the "Common Stock") and warrants to purchase 325,000
shares of Common Stock (the "Warrants"); and
WHEREAS, the Seller and the Company had previously entered into an
agreement pursuant to which Seller would be required to distribute the Issuer
Shares to its stockholders upon demand by the Company; and
WHEREAS, by letter dated September 26, 1997 (the "Distribution Request"),
the Company has requested that Seller distribute the Issuer Shares to its
stockholders, such distribution to be completed no later than 60 days from the
date of such letter; and
WHEREAS, the Seller requested that the Company consider alternative
arrangements with respect to the Issuer Shares, and the respective Boards of
Directors of the Company and the Seller have considered such alternative
arrangements; and
WHEREAS the Seller and the Company desire that in lieu of distribution that
Seller will sell and transfer such shares to Company in accordance with the
terms and conditions hereof; and
NOW, THEREFORE, in consideration of the mutual premises and agreements set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by the parties, the parties hereto
agree as follows:
1. SALE OF THE SHARES
1.1 Sale. Simultaneously with the execution and delivery hereof, the
Seller shall transfer, assign, sell and deliver to the Company, and the Company
shall purchase from the Seller all of the Issuer Shares and Warrants in
consideration of the agreements and waivers of the parties contained herein (the
"Purchase Price"). The closing (the "Closing") of the sale and purchase and
delivery of all of the Issuer Shares and Warrants shall be held on the date
hereof. At the Closing Seller shall deliver the certificates for the Issuer
Shares and the Warrants duly endorsed or accompanied by stock powers or other
appropriate instruments of transfer duly executed in blank.
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1.2 Change in Control.
(a) Before April 1, 1998, the Company shall not enter into or
consummate a change in control (as defined below) unless the other party or
parties thereto agree, as a condition precedent to such transaction, to pay
Seller the amount (subject to the last sentence of this paragraph) that would
have been received by the Seller in connection with the change of control
transaction if all of the Issuer Shares were outstanding and held by the Seller
at the effective time of such change in control transaction. From and after
April 1, 1998 and through September 30, 1998, the Company shall not enter into
or consummate a change of control unless the other party or parties thereto
agree, as a condition precedent to such transaction, to pay Seller 50% of the
amount (subject to the last sentence of this paragraph) that would have been
received by the Seller in connection with the change of control transaction if
all of the Issuer Shares were outstanding and held by the Seller at the
effective time of such change in control transaction. Any amounts owed to
Seller pursuant to this Section 1.3 shall be paid simultaneously with the
payment to the Company's shareholders in connection with the consummation of any
transaction that constitutes a change in control of the Company. The Company
shall not enter into any change in control transaction or cooperate with any
third party with respect to a possible change in control transaction unless the
other party (or parties) thereto agree to make adequate provision for the
payment to Seller of all amounts provided herein. If the Company's shareholders
are entitled to receive Marketable Consideration (as defined below) and other
consideration in respect of a share of Common Stock, the amount that is due to
Seller shall be determined only with respect to the portion that is Marketable
Consideration.
(b) For purposes of this Agreement, the parties intend that a "change
in control" means a transaction or series of transactions in which the holders
of a majority of the outstanding Common Stock receive (or have the right to
receive) Marketable Consideration, in respect of their shares of Common Stock
(whether by merger, sale, tender, dissolution or otherwise). For the purposes
of this Agreement, Marketable Consideration means cash, debt or publicly traded
equity securities of a company that had been a public company before such
transaction (including preferred stock or any right to acquire such publicly
traded equity security) ("Marketable Consideration"). By way of illustration, a
change in control shall include: (i) the consolidation or merger of the Company
pursuant to which the outstanding shares of Common Stock are converted into the
right to receive Marketable Consideration or (ii) the sale of all or
substantially all of the assets of the Company for Marketable Consideration or
(iii) any other transaction involving an exchange or sale of 50% or more of the
outstanding Common Stock, including a tender offer, for Marketable
Consideration, but excluding all other transactions, including where the holders
of the outstanding Common Stock receive only securities of the Company or of
another entity of which the Company's assets or business constitute a
substantial portion, or reincorporation of the Company in a jurisdiction other
than California.
(c) For purposes of determining the amount which Seller would have
received with respect to the Issuer Shares following a change in control, (1) in
any transaction involving a sale or exchange of any shares of Common Stock, it
shall be presumed that all of the Issuer Shares were sold at the highest average
price paid to any affiliate of the Issuer for any shares in such transaction,
(2) in any transaction involving a merger or consolidation of the Company, it
shall be presumed that the Seller (as a shareholder) voted in favor of such
transaction, (3) in any transaction involving the sale
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of all or substantially all of the assets of the Company, it shall be presumed
that the Company was dissolved and its net assets distributed to its
shareholders immediately after such transaction and (4) in any other change
in control transaction in which a majority of the Company's shareholders
which are not affiliates of the Company receive any consideration in respect
of their shares of Common Stock, the Seller shall be presumed to have the
right to receive an equivalent amount. Furthermore, in the event of a tender
or exchange offer for less than all of the outstanding Common Stock, the
Seller shall be treated as if it had tendered (which tender had been
accepted) a percentage of the Issuer Shares equal to the highest percentage
of shares of Common Stock owned by any shareholder of the Company which are
accepted by the party making such offer; and in addition the Seller shall be
entitled to receive an equivalent amount of any securities of the Company
retained by such shareholder.
(d) The Seller acknowledges that neither the Company nor any of its
affiliates (i) has any fiduciary duty to Seller, any of Seller's affiliates or
any of Seller's stockholders (the "Seller Group") by reason of this Agreement,
(ii) is under any duty or obligation to the Seller Group to initiate,
investigate, consider, respond or otherwise take any action with respect to a
proposal that may result in a change of control by reason of this Agreement, any
such potential transaction as with respect to the Seller Group being within the
sole discretion of the Company, and (iii) any such potential transaction will be
considered by the Company in light of the duties owed to the holders of the
Common Stock outstanding at such time. Notwithstanding the above, if any third
party approaches the Company or any of its affiliates or representatives
regarding a possible change in control, the Company shall in good faith not
delay or defer such consideration, evaluation or negotiation with the intent to
reduce any amounts payable to Seller hereunder.
(e) Subject to the last sentence of Section 1.2(a), any payment due
to Seller under this Section 1.2 shall, unless Seller otherwise agrees, be paid
in cash or in property of the kind and in the same proportion received by the
shareholders of the Company in connection with the change in control
transaction.
2. CERTAIN REPRESENTATIONS AND WARRANTIES
2.1 Certain Representations and Warranties by the Seller. The Seller
represents and warrants to the Company that:
(a) Organization and Good Standing. Each Seller is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has all necessary corporate power and authority to
carry on its business and to own and lease the assets which it owns and
leases.
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(b) Power and Authorization. Each Seller has full legal right, power
and authority to enter into and perform its obligations under this
Agreement and the other agreements and documents required to be delivered
by it hereunder. The execution, delivery and performance by each Seller of
this Agreement and such other agreements and documents have been duly
authorized by all necessary corporate action on the part of Seller. This
Agreement has been duly and validly executed and delivered by each Seller
and constitutes its legal, valid and binding obligation, enforceable
against it in accordance with its terms. When executed and delivered by
such Seller as contemplated herein, each of such other agreements and
documents shall constitute the legal, valid and binding obligation of each
Seller, enforceable against it in accordance with its terms.
(c) No Conflicts. (i) Neither the execution of this Agreement nor
the consummation by each Seller of the transactions contemplated hereby
will constitute a violation of or default under, or conflict with, any
statute or regulation, contract, commitment, agreement, understanding,
arrangement or restriction of any kind to which such Seller is a party or
by which it or any of its properties are bound (which, in relation to a
contract, commitment, agreement, understanding, arrangement or restriction
would have a material adverse effect on the Seller or prohibit or delay the
transactions contemplated herein) and (ii) no consent, approval, order or
authorization of any court, administrative agency, other governmental
entity or any other person is required (as opposed to voluntary) by or with
respect to such Seller in connection with the execution and delivery of
this Agreement by such Seller.
(d) Ownership of Shares. (i) Upon transfer and delivery of the
Issuer Shares and Warrants by the Seller hereunder to the Company, as
provided herein, Company shall acquire good and marketable title to such
shares and Warrants, free and clear of all claims, liens, charges, proxies,
encumbrances and security interests (other than as are imposed by
applicable securities laws) and (ii) the Seller does not own beneficially
(as hereinafter defined) or of record any shares of Common Stock or any
right to acquire Common Stock of the Company other than the Issuer Shares
and Warrants.
(e) No Broker. Neither Seller nor any director, officer, employee of
Seller has incurred or will incur on behalf of the Company any brokerage,
finder's or similar fee in connection with the transactions contemplated by
this Agreement.
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(f) Board Members. Xxxxxx Xxxxxxx and Xxxxxxx Xxxxxxx or other
designees of the Seller have served on the Board of Directors of the
Company by designation of the Seller at all times since the consummation of
the transactions contemplated by the Merger Agreement (as defined in
Section 6.3). All documents, records, plans and books pertaining to the
Company have been made available to such designees. The Seller has made
such examinations relating to the terms, merits and risks of the
transactions contemplated hereby as it deems necessary, including the
opportunity to ask questions of and receive answers from the officers of
the Company and the Company's auditors and consultants and all such
questions have been answered to the full satisfaction of the Seller. In
making the decision to enter into the transactions contemplated hereby, the
Seller is relying solely on the investigations made by the Seller and the
Company's representations and warranties made herein.
2.2 Certain Representations and Warranties by the Company. The Company
represents and warrants to the Seller that:
(a) Organization and Good Standing. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of California and has all necessary corporate power and authority to
carry on its business and to own and lease the assets which it owns and
leases.
(b) Power and Authorization. The Company has full legal right, power
and authority to enter into and perform its obligations under this
Agreement and the other agreements and documents required to be delivered
by it hereunder. The execution, delivery and performance by the Company of
this Agreement and such other agreements and documents have been duly
authorized by all necessary corporate action on the part of the Company.
The transactions contemplated by this Agreement have been approved by a
special committee of the board of directors composed entirely of directors
who are not present or former directors, officers, employees, or
consultants of Seller. This Agreement has been duly and validly executed
and delivered by the Company and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms. When
executed and delivered as contemplated herein, each of such other
agreements and documents shall constitute the legal, valid and binding
obligation of the Company enforceable against it in accordance with its
terms.
(c) No Conflicts. (i) Neither the execution of this Agreement nor
the consummation by the Company of the transactions contemplated hereby
will constitute a violation of or default under, or conflict with, any
statute or regulation, contract, commitment, agreement, understanding,
arrangement, or restriction of any kind to which the Company is a party or
by which it or any of its properties is bound (which in relation to a
contract, commitment, agreement, understanding, arrangement or restriction
would have a material adverse effect on the Company or prohibit or delay
the transactions considered herein) and (ii) no consent, approval, order or
authorization of or by the stockholders of the Company or of any court,
administrative agency, other governmental entity or any other person (other
than that which has already been obtained) is required (as opposed to
voluntary) by or with respect to the Company in connection with the
execution and delivery of this Agreement by it.
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(d) Change in Control. Except as previously disclosed to Seller or
its designees serving as the Company's board of directors, there are no
offers, options, rights, agreements or commitments of any kind (contingent
or otherwise) relating to any possible change in control of the Company.
(e) No Brokers. Neither the Company nor any director, officer or
employee of the Company has incurred or will incur on behalf of the
Company, any brokerage, finder's or similar fee in connection with the
transactions contemplated by this Agreement.
3. CLOSING DELIVERIES
3.1 Seller's Deliveries. At the Closing, Seller shall deliver, or shall
cause to be delivered to the Company the following:
(a) certificates for all of the Issuer Shares and Warrants, duly
endorsed or accompanied by stock powers and other appropriate instruments
of transfer duly executed in blank;
(b) copies of the resolutions of the Board of Directors of each
Seller authorizing the execution, delivery and performance of this
Agreement and the other agreements and instruments referred to herein,
certified as of the Closing by the Secretary or an Assistant Secretary of
Seller; and
(c) The resignation of Xxxxxx X. Xxxxxxx from the Company's Board of
Directors; and
(d) such other documents and instruments as the Company may
reasonably request to effectuate or evidence the transactions contemplated
by this Agreement.
3.2 The Company's Deliveries. At the Closing, the Company shall deliver,
or shall cause to be delivered to Seller a copy of the resolutions of the Board
of Directors of the Company (and each committee thereof, if any) authorizing the
execution, delivery and performance by the Company of this Agreement and the
other agreements and instruments referred to herein, certified as of the Closing
by the Secretary or an Assistant Secretary of the Company.
4. INDEMNIFICATION
4.1 Indemnification by Seller. Seller shall indemnify and hold the
Company and its officers, directors and shareholders harmless from and against
and in respect of any and all losses, costs, expenses, claims, damages,
obligations and liabilities, including interest, costs of investigation,
penalties and reasonable attorneys' fees and disbursements ("Damages") which the
Company or any such person may suffer, incur or become subject to arising out
of, based upon or otherwise in respect of any inaccuracy in or breach of (i) any
representation or warranty of Seller made in or pursuant to this Agreement or
any agreement or document required to be delivered pursuant to this Agreement,
(ii) or any breach or nonfulfillment of any covenant or obligation of Seller
contained in this Agreement or such other agreements and documents, or (iii) any
action, suit, proceeding or claim by a stockholder of the Seller (in such
capacity) challenging the transactions contemplated by this Agreement.
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4.2 Indemnification by the Company. The Company shall indemnify and hold
Seller and its officers, directors and shareholders harmless from and against
and in respect of any and all Damages which Seller or any such person may
suffer, incur or become subject to arising out of, based upon or otherwise in
respect of (i) any inaccuracy in or breach of any representation or warranty of
the Company made in or pursuant to this Agreement or any agreement or document
required to be delivered pursuant to this Agreement, (ii) any breach or
nonfulfillment of any covenant or obligation of the Company contained in this
Agreement or such other agreements and documents or (iii) any action, suit,
proceeding or claim by a stockholder of the Company (in such capacity)
challenging the transactions contemplated by this Agreement.
4.3 Third Party Claims.
(a) Each party shall promptly notify the other of the assertion by
any third party of any claim with respect to which the indemnification set
forth in this Section relates. The indemnifying party shall have the
right, upon notice to the indemnified party within ten (10) business days
after the receipt of any such notice, to undertake the defense of or, with
the consent of the indemnified party (which consent shall not unreasonably
be withheld) to settle or compromise such claim. The failure of the
indemnifying party to give such notice and to undertake the defense of or
to settle or compromise such a claim shall constitute a waiver of the
indemnifying party's rights under this Section 5.3(a) and in the absence of
gross negligence or willful misconduct on the part of the indemnified party
shall preclude the indemnifying party from disputing the manner in which
the indemnified party may conduct the defense of such claim or the
reasonableness of any amount paid by the indemnified party in satisfaction
of such claim.
(b) The election by the indemnifying party, pursuant to Section
4.3(a), to undertake the defense of a third party claim shall not preclude
the party against which such claim has been made also from participating or
continuing to participate in such defense, so long as such party bears its
own legal fees and expenses for so doing.
5. MISCELLANEOUS
5.1 Best Efforts. Each of the parties shall use its best reasonable
efforts to take all action and do all things necessary, proper or advisable to
consummate the transaction contemplated by this Agreement.
5.2 Amendment; Assignment. This Agreement may be amended only by written
instrument duly executed by the parties hereto. No party may waive any term,
provision, covenant or restriction of this Agreement except by duly signed
writing referring to the specific provision to be waived. Neither of the
parties to this Agreement may assign any of its rights or obligations under this
Agreement without the prior written consent of the other party hereto. Subject
to the foregoing, this Agreement shall be binding upon, inure to the benefit of
and be enforceable by the parties hereto and their respective successors and
permitted assigns. The parties expressly intend and agree that no provision of
this Agreement shall create any third party beneficiary rights in any person.
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5.3 Termination of Prior Obligations. This Agreement sets forth the
entire understanding between the Seller and the Company and supersedes all prior
agreements, arrangements and understandings by and among the parties with
respect to the transactions contemplated hereby. All unperformed agreements,
arrangements and understandings under or entered into pursuant or relating to
the Agreement of Merger and Plan of Reorganization among MMI Medical, Inc. (now
the Company), MMI Acquisition Subsidiary, Inc., MEDIQ Incorporated and MEDIQ
Equipment and Maintenance Services, Inc. dated May 18, 1994, as amended (the
"Merger Agreement"), (including without limitation such Merger Agreement),
except as further provided herein, are hereby terminated without further
liability or obligation on the part of any party. Notwithstanding the
foregoing, the agreements set forth in Article X of the Merger Agreement
shall continue in full force and effect to the extent provided therein.
Seller and the Company each acknowledge that they have no claims against each
other and hereby irrevocably releases each other from and against, and
irrevocably waives, any and all claims, liabilities, obligations, covenants,
agreements, damages and causes of action, which each may have against the
other arising out of events occurring prior to the date hereof, provided that
the foregoing shall not include (i) Article X of the Merger Agreement, and
(ii) shall not include, and the parties shall use their best reasonable
efforts to resolve within the next 180 days, all issues relating to the
receipt of receivables, which are estimated to be less than $50,000.
5.4 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be delivered personally
or transmitted by telex, fax or telegram, to the respective parties as follows:
(a) If to the Seller, to it at:
MEDIQ Incorporated
Xxx XXXXX Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx, President
Telecopier: (000) 000-0000
with a copy to:
Drinker Xxxxxx & Xxxxx LLP
Philadelphia National Bank Building
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: F. Xxxxxxx Xxxxxxx, III, Esquire
Telecopier: (000) 000-0000
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(b) If to the Company, to it at:
InnoServ Technologies, Inc.
000 Xxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxx
Telecopier: (000) 000-0000
with a copy to:
Xxxxxx, Xxxx & Xxxxxxxx LLP
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxx
Telecopier: (000) 000-0000
or to such other address as any party may have furnished to the others
in writing.
5.5 Governing Law. This Agreement will be governed by and construed in
accordance with the internal laws of the State of California.
5.6 Survival. All representations, warranties, covenants and agreements
of the parties hereto shall survive indefinitely the Closing.
5.7 Counterparts; Headings. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same document. The article and section
headings contained herein are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.
5.8 Expenses. Each of the parties hereto shall pay the fees and expenses
it incurs in connection with this Agreement, other than as a result of the
breach hereof by the other party hereto.
5.9 Certain Definitions. For purposes of the Agreement:
(a) "beneficially owned" shall have the meaning set forth in Rule
13d-3 promulgated under the Exchange Act, as such Rule is in effect on the
date hereof.
(b) "business day" means any day which is neither a Saturday or
Sunday nor a legal holiday on which banks are authorized or required to be
closed in New York, New York..
5.10 Stock Splits, etc. The amount of any payments under Section 1.2 shall
be appropriately adjusted for any stock split, reverse stock split, stock
dividend or any similar event occurring after the date hereof and prior to the
consummation of a change in control.
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5.11 Public Announcements. Seller and the Company shall consult with each
other before issuing any press release or public statement with respect to the
transactions contemplated by this Agreement, and shall not issue any such press
release or make any such public statement with respect to the transactions
contemplated by this Agreement without the prior consent of the other party,
which shall not be unreasonably withheld or delayed; provided, however, that a
party may, without the prior consent of the other party, issue such press
release or make such public statement as may upon the advice of counsel be
required by law or the rules and regulations of the AMEX or NASD.
5.12 Specific Performance. Each of the parties acknowledges and agrees
that the other party would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, each of the parties agrees that
the other party shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Agreement and to enforce specifically this
Agreement and the terms and provisions hereof (including without limitation the
Seller's rights under Section 1.2) in any action instituted in any court of the
United States or any state thereof having jurisdiction over the parties and the
matter, in addition to any other remedy to which they may be entitled, at law or
in equity, subject to Section 5.13.
5.13 Arbitration. Any controversy involving a claim as to the existence of
a "change in control" or the amount due in respect thereof shall be finally
settled by arbitration in Los Angeles, California, in accordance with the then-
current Commercial Arbitration Rules of the American Arbitration Association,
and judgment upon the award rendered by the arbitrator may be entered in any
court having jurisdiction thereof. Such arbitration shall be conducted by an
arbitrator chosen by mutual agreement of Seller and Company. Failing such
agreement, the arbitration shall be conducted by three independent arbitrators,
none of whom shall have any competitive interest with Seller or Company; Seller
shall choose one such arbitrator, Company shall choose one such arbitrator, and
such two arbitrators shall mutually select a third arbitrator. Any decision of
two such arbitrators shall be binding on Seller and Company. There shall be
limited discovery prior to the arbitration hearing, subject to the discretion of
the arbitrators, as follows: (a) exchange of witness lists and copies of
documentary evidence and documents related to or arising out of the issues to be
arbitrated, (b) depositions of all party witnesses, and (c) such other
depositions as may be allowed by the arbitrator upon a showing of good cause.
Depositions shall be conducted in accordance with the California Code of Civil
Procedure. Each party shall pay its own costs and expenses (including counsel
fees) of any such arbitration except that the arbitrator can compel one party to
pay all or a portion of the other party's costs and expenses. The parties
recognize that time is of the essence, and agree to submit to arbitration any
such claim within 20 business days of a controversy having arisen.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written.
MEDIQ INCORPORATED
By: /s/ Xxxxxx X. Xxxxxxx
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MEDIQ INVESTMENT SERVICES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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INNOSERV TECHNOLOGIES, INC.
By: /s/ Xxxxxxx X. Xxxx
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