EXHIBIT A
EXECUTION COPY
STOCKHOLDER AGREEMENT dated as of February
10, 1997, among XXXXXXX & XXXXXXX, a New Jersey
corporation ("Parent"), INO ACQUISITION CORP., a
Delaware corporation and a wholly owned subsidiary of
Parent ("Sub") and the individuals and other parties
listed on Schedule A attached hereto (each, a
"Stockholder" and, collectively, the "Stockholders").
WHEREAS Parent, Sub and the Company propose to enter into an
Agreement and Plan of Merger dated as of the date hereof (as the same may be
amended or supplemented, the "Merger Agreement") providing for (i) the making of
a cash tender offer (as such offer may be amended from time to time as permitted
under the Merger Agreement, the "Offer") by Sub for all the outstanding shares
of common stock, par value $0.001 per share, of the Company ("Company Common
Stock") and (ii) for the merger of Sub with and into the Company (the "Merger"),
upon the terms and subject to the conditions set forth in the Merger Agreement;
and
WHEREAS each Stockholder owns the number of shares of Company
Common Stock set forth opposite his or its name on Schedule A attached hereto
(such shares of Company Common Stock, together with any other shares of capital
stock of the Company acquired by such Stockholders after the date hereof and
during the term of this Agreement (including, without limitation, through the
exercise of any stock options, warrants or similar instruments), being
collectively referred to herein as the "Subject Shares"); and
WHEREAS, as a condition to its willingness to enter into the
Merger Agreement, Parent has requested that each Stockholder enter into this
Agreement;
NOW, THEREFORE, to induce Parent to enter into, and in
consideration of its entering into, the Merger Agreement, and in consideration
of the premises and the
representations, warranties and agreements contained herein, the parties agree
as follows:
1. Representations and Warranties of each Stockholder. Each
Stockholder hereby, severally and not jointly, represents and warrants to Parent
as of the date hereof in respect of himself or itself as follows:
(a) Authority. The Stockholder has all requisite power and
authority to enter into this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly
authorized, executed and delivered by the Stockholder and constitutes a
valid and binding obligation of the Stockholder enforceable against
such Stockholder in accordance with its terms (subject, as to
enforcement of remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium or other laws affecting creditors' rights
generally from time to time in effect and to general principles of
equity). Except for the expiration or termination of the waiting
periods under the HSR Act, informational filings with the SEC and the
existence of the pledge agreement described in Exhibit I hereto (the
"Pledge Agreement"), the execution and delivery of this Agreement do
not, and the consummation of the transactions contemplated hereby and
compliance with the terms hereof will not, (i) conflict with, or result
in any violation of, or default (with or without notice or lapse of
time or both) under any provision of, any trust agreement, loan or
credit agreement, note, bond, mortgage, indenture, lease or other
agreement, instrument, permit, concession, franchise, license,
judgment, order, notice, decree, statute, law, ordinance, rule or
regulation applicable to the Stockholder or to the Stockholder's
property or assets, (ii) require any filing with, or permit,
authorization, consent or approval of, any federal, state or local
government or any court, tribunal, administrative agency or commission
or other governmental or regulatory authority or agency, domestic,
foreign or supranational, or (iii) violate any order, writ, injunction,
decree, statute, rule or regulation applicable to the Stockholder or
any of the Stockholder's properties or assets, including the Subject
Shares. If the Stockholder is a natural person and is married, and the
Stockholder's Subject Shares constitute community property or otherwise
need spousal or other approval for this Agreement to be legal, valid
and binding, this Agreement has been duly authorized, executed and
delivered by, and constitutes a valid and binding agreement of, the
Stockholder's spouse, enforceable against such spouse in accordance
with its terms (subject, as to enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, moratorium or other laws
affecting creditors' rights generally from time to time in effect and
to general principles of equity). No trust of which such Stockholder is
a trustee requires the consent of any beneficiary to the execution and
delivery of this Agreement or to the consummation of the transactions
contemplated hereby.
(b) The Subject Shares. Except with respect to Shares subject
to the Pledge Agreement, the Stockholder is the record and beneficial
owner of, or is trustee of a trust that is the record holder of, and
whose beneficiaries are the beneficial owners of, and has good and
marketable title to, the Subject Shares set forth opposite his or its
name on Schedule A attached hereto, free and clear of any claims,
liens, encumbrances and security interests whatsoever. The Stockholder
does not own, of record or beneficially, any shares of capital stock of
the Company other than the Subject Shares set forth opposite his or its
name on Schedule A attached hereto. The Stockholder has the sole right
to vote such Subject Shares, and none of such Subject Shares is subject
to any voting trust or other agreement, arrangement or restriction with
respect to the voting of such Subject Shares, except as contemplated by
this Agreement.
2. Purchase and Sale of Shares. Each Stockholder hereby
severally agrees to sell to Sub, and Sub hereby agrees to purchase, all Subject
Shares set forth opposite such Stockholder's name on Schedule A hereto, at a
price per Share equal to $13.75 per Share; provided that such obligation to sell
and such obligation to purchase are subject to Sub having accepted Shares for
payment under the Offer and subject to the Minimum Condition having been
satisfied. Such Stockholder may tender such Subject Shares into the Offer and
Sub may direct that such Stockholder tender such Subject Shares and not withdraw
any Subject Shares so tendered. Any Subject Shares not purchased in the Offer
will be purchased at the same time as payment is made under the Offer.
3. Representation and Warranty of Parent and Sub. Parent and
Sub each hereby represents and warrants to each Stockholder that each of them
has all requisite corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The execution,
delivery and performance of this Agreement by each of Parent and Sub, and the
consummation of the transactions contemplated hereby, have been duly authorized
by all necessary corporate action on the part of each of Parent and Sub. This
Agreement has been duly executed and delivered by Parent and Sub and constitutes
a valid and binding obligation of Parent and Sub enforceable against Parent and
Sub in accordance with its terms. The execution and delivery of this Agreement
do not, and the consummation of the transactions contemplated hereby and
compliance with the terms hereof will not, conflict with, or result in any
violation of, or default (with or without notice or lapse of time or both) under
any provision of, the articles of incorporation or by-laws of Parent and Sub,
note, bond, mortgage, indenture, license, lease, contract, agreement or other
instrument or obligation or any judgment, order, notice, decree, statute, law,
ordinance, rule or regulation applicable to either Parent or Sub or to Parent or
Sub's property or assets.
4. Covenants of Each Stockholder. Until the termination of
this Agreement in accordance with Section 10, each Stockholder, severally and
not jointly, agrees as follows:
(a) At any meeting of stockholders of the Company called to
vote upon the Merger and the Merger Agreement or at any adjournment
thereof or in any other circumstances upon which a vote, consent or
other approval (including by written consent) with respect to the
Merger and the Merger Agreement is sought, the Stockholder shall vote
(or cause to be voted) the Subject Shares in favor of the Merger, the
adoption by the Company of the Merger Agreement and the approval of the
terms thereof and each of the other transactions contemplated by the
Merger Agreement.
(b) At any meeting of stockholders of the Company or at any
adjournment thereof or in any other circumstances upon which the
Stockholder's vote, consent or other approval is sought, the
Stockholder shall vote (or cause to be voted) the Subject Shares (and
each class thereof) against (i) any Takeover
Proposal as such term is defined in Section 6.02(a) of the Merger
Agreement or (ii) any amendment of the Company's certificate of
incorporation or by-laws or other proposal or transaction involving the
Company, which amendment or other proposal or transaction would be
reasonably likely to impede, frustrate, prevent or nullify the Merger,
the Merger Agreement or any of the other transactions contemplated by
the Merger Agreement or change in any manner the voting rights of each
class of Company Common Stock. Subject to Section 12, the Stockholder
further agrees not to enter into any agreement inconsistent with the
foregoing.
(c) The Stockholder shall not, prior to the earliest of (A)
the Effective Time and (B) the termination of the Merger Agreement in
accordance with its terms, (i) sell, transfer, give, pledge, assign or
otherwise dispose of (including by gift) (collectively, "Transfer"),
consent to any transfer of, any or all of such Subject Shares or any
interest therein or enter into any contract, option or other
arrangement (including any profit sharing arrangement) with respect to
the Transfer of, the Subject Shares to any person other than pursuant
to the terms of the Offer or the Merger or (ii) enter into any voting
arrangement, whether by proxy, voting agreement or otherwise, in
connection with, directly or indirectly, any Takeover Proposal and
agrees not to commit or agree to take any of the foregoing actions.
(d) Subject to the terms of Section 12, during the term of
this Agreement, the Stockholder shall not, nor shall it permit any
investment banker or attorney retained by, or any other adviser or
representative of, such Stockholder to, (i) directly or indirectly
solicit, initiate or encourage the submission of, any Takeover Proposal
or (ii) directly or indirectly participate in any discussions or
negotiations regarding, or furnish to any person any information with
respect to, or take any other action to facilitate any inquiries or the
making of any proposal that constitutes, or may reasonably be expected
to lead to, any Takeover Proposal; provided, that it is understood that
this clause (ii) will not be deemed to have been violated if in
response to an unsolicited inquiry, the Stockholder states that it or
he is subject to the provisions of this Agreement. Without limiting the
foregoing, it is understood that any violation of the
restrictions set forth in the preceding sentence by an investment
banker or attorney retained by, or other adviser or representative of,
such Stockholder, whether or not such person is purporting to act on
behalf of such Stockholder, shall be deemed to be a violation of this
Section 4(d) by such Stockholder.
(e) Until after the Merger is consummated or the Merger
Agreement is terminated, the Stockholder shall, at the expense of
Parent, use all reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, and to assist and cooperate
with the other parties in doing, all things necessary, proper or
advisable to consummate and make effective, in the most expeditious
manner practicable, the Merger and the other transactions contemplated
by the Merger Agreement.
(f) Such Stockholder, and any beneficiary of a revocable trust
for which such Stockholder serves as trustee, shall not take any action
to revoke or terminate such trust or take any other action which would
restrict, limit or frustrate in any way the transactions contemplated
by this Agreement. Each such beneficiary hereby acknowledges and agrees
to be bound by the terms of this Agreement applicable to it.
(g) (i) In the event that the Merger Agreement shall have been
terminated under circumstances where Parent is or may become entitled
to receive the Termination Fee, each Stockholder shall pay to Parent on
demand an amount equal to all profit determined in accordance with
Section 4(g)(ii) of such Stockholder from the consummation of any
transaction which gives rise to the Company's obligation to pay the
Termination Fee pursuant to the Merger Agreement.
(ii) For purposes of this Section 4(g), the profit of any
Stockholder from any Takeover Proposal shall equal (A) the aggregate
consideration that would have been received by such Stockholder pursuant to such
Takeover Proposal if such Stockholder held the same number of Subject Shares at
the consummation of such Takeover Proposal as he held at the time the Merger
Agreement was terminated (including any consideration that would have been
received in respect of any unexercised stock options or warrants or similar
instruments held at the time the Merger Agreement was terminated), valuing any
noncash consideration
(including any residual interest in the Company) at its fair market value on the
date of such consummation less (B) the fair market value of the aggregate
consideration that would have been issuable or payable to such Stockholder
(assuming all stock options, warrants or similar instruments held by such
Stockholder were exercised) if he had received the Merger Consideration pursuant
to the Merger Agreement as originally executed (without giving effect to any
increase in such Merger Consideration).
(iii) In the event that (x) prior to the Effective Time, a
Takeover Proposal shall have been made and (y) the Effective Time of the Merger
shall have occurred and Parent for any reason shall have increased the amount of
Merger Consideration payable over that set forth in the Merger Agreement in
effect on the date hereof (the "Original Merger Consideration"), each
Stockholder shall pay to Parent on demand an amount in cash equal to the product
of (i) the number of Subject Shares of such Stockholder and (ii) 100% of the
excess, if any, of (A) the per share cash consideration or the per share fair
market value of any noncash consideration, as the case may be, received by the
Stockholder as a result of the Merger, as amended, determined as of the
Effective Time of the Merger, over (B) the amount of the Original Merger
Consideration determined as of the time of the first increase in the amount of
the Original Merger Consideration.
(iv) For purposes of this Section 4(g), the fair market value
of any noncash consideration consisting of:
(A) securities listed on a national securities exchange
or traded on the NASDAQ/NMS shall be equal to the
average closing price per share of such security as
reported on such exchange or NASDAQ/NMS for the
twenty trading days prior to the date of
determination; and
(B) consideration which is other than cash or
securities of the form specified in clause
(A) of this Section 4(g)(iv) shall be
determined by a nationally recognized
independent investment banking firm mutually
agreed upon by the parties within 10 business
days of the event requiring selection of such
banking firm; provided, however, that if the
parties are unable to agree within two
business days after the date of such event as
to the investment banking firm, then the parties
shall each select one firm, and those firms shall
select a third investment banking firm, which third
firm shall make such determination; provided further,
that the fees and expenses of such investment banking
firm shall be borne by Parent. The determination of
the investment banking firm shall be binding upon the
parties.
(v) Any payment of profit under this Section 4(g) shall (x) if
paid in cash, be paid by wire transfer of same day funds to an account
designated by Parent and (y) if paid through a transfer of securities (with the
method and timing of such transfer to be mutually agreed), be paid as soon as
practicable through delivery of such securities, suitably endorsed for transfer;
provided that the Stockholder shall be required to pay cash under this Section
4(g) only to the extent the fair market value of the securities transferred
pursuant to clause (y) is less than such Stockholders' profit.
5. Covenant of Xxxxxx Xxxx. Xxxxxx Xxxx shall have his Shares
released from the pledge pursuant to the Pledge Agreement as soon as practicable
after the date hereof but in any event within ten business days after the date
hereof.
6. Grant of Irrevocable Proxy; Appointment of Proxy. (a) Each
Stockholder hereby irrevocably grants to, and appoints, Parent and Xxxxx X.
Xxxxxx and Xxxxx X. Xxxxxx, in their respective capacities as officers of
Parent, and any individual who shall hereafter succeed to any such office of
Parent, and each of them individually, such Stockholder's proxy and
attorney-in-fact (with full power of substitution), for and in the name, place
and stead of such Stockholder, to vote such Stockholder's Subject Shares, or
grant a consent or approval in respect of such Subject Shares against (i) any
Takeover Proposal or (ii) any amendment of the Company's Articles of
Incorporation or By-laws, or other proposal or transaction (including any
consent solicitation to remove or elect any directors of the Company) involving
the Company which amendment or other proposal or transaction would be reasonably
likely to impede, frustrate, prevent or nullify, or result in a breach of any
covenant, representation or warranty or any other obligation or agreement of the
Company under or with respect to, the Offer, the Merger, the Merger Agreement or
any of
the other transactions contemplated by the Merger Agreement.
(b) Such Stockholder represents that any proxies heretofore
given in respect of such Stockholder's Shares are not irrevocable, and that any
such proxies are hereby revoked.
(c) Such Stockholder hereby affirms that the irrevocable proxy
set forth in this Section 6 is given in connection with the execution of the
Merger Agreement, and that such irrevocable proxy is given to secure the
performance of the duties of the Stockholder under this Agreement. Such
Stockholder hereby further affirms that the irrevocable proxy is coupled with an
interest and may under no circumstances be revoked. Such Stockholder hereby
ratifies and confirms all that such irrevocable proxy may lawfully do or cause
to be done by virtue hereof. Such irrevocable proxy is executed and intended to
be irrevocable in accordance with the provisions of Section 212(e) of the
Delaware General Corporation Law (the "DGCL").
7. Further Assurances. Each Stockholder will, at Parent's
expense, from time to time, execute and deliver, or cause to be executed and
delivered, such additional or further consents, documents and other instruments
as Parent may reasonably request for the purpose of effectively carrying out the
transactions contemplated by this Agreement.
8. Certain Events. (a) Each Stockholder agrees that this
Agreement and the obligations hereunder shall attach to such Stockholder's
Subject Shares and shall be binding upon any person or entity to which legal or
beneficial ownership of such Subject Shares shall pass, whether by operation of
law or otherwise, including without limitation such Stockholder's heirs,
guardians, administrators or successors. In the event of any stock split, stock
dividend, merger, reorganization, recapitalization or other change in the
capital structure of the Company affecting the Company Common Stock, or the
acquisition of additional shares of Company Common Stock or other voting
securities of the Company by any Stockholder, the number of Subject Shares
listed in Schedule A beside the name of such Stockholder shall be adjusted
appropriately and this Agreement and the obligations hereunder shall attach to
any additional shares of Company Common Stock or other
voting securities of the Company issued to or acquired by such Stockholder.
(b) Each Stockholder agrees that such Stockholder will tender
to the Company, within 10 business days after the date hereof (or, in the event
Subject Shares are acquired subsequent to the date hereof within 10 business
days after the date of such acquisition), any and all certificates representing
such Stockholder's Subject Shares in order that the Company may inscribe upon
such certificates the legend in accordance with Section 7.10 of the Merger
Agreement.
9. Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
without the prior written consent of the other parties, except that (i) Sub may
assign, in its sole discretion, any or all of its rights, interests and
obligations hereunder to any subsidiary of Parent that may be substituted for
Sub as contemplated by Section 2.01 of the Merger Agreement, and (ii) Parent may
assign, in its sole discretion, any and all of its rights, interests and
obligations hereunder to any direct or indirect wholly owned subsidiary of
Parent, provided that Parent will remain liable for its obligations hereunder in
the event of any assignment pursuant to this clause (ii). Subject to the
preceding sentence, this Agreement will be binding upon, inure to the benefit of
and be enforceable by the parties and their respective successors and assigns.
10. Termination. This Agreement, and all rights and
obligations of the parties hereunder, shall terminate upon the date upon which
the Merger Agreement is terminated in accordance with its terms, provided that a
Termination Fee has not become, and could not at any time in the future become,
payable under the Merger Agreement, in which case Sections 4(g), 7 (as it
relates to the other sections of this Agreement that survive such termination),
8, 9, 10, 11, 13 and 14 shall survive until such Termination Fee is paid.
11. General Provisions.
(a) Amendments. This Agreement may not be amended except by an
instrument in writing signed by each of the parties hereto.
(b) Notice. All notices and other communications hereunder
shall be in writing and shall be deemed given
if delivered personally or sent by overnight courier (providing proof
of delivery) to Parent in accordance with Section 10.02 of the Merger
Agreement and to the Stockholders at their respective addresses set
forth on Schedule A attached hereto (or at such other address for a
party as shall be specified by like notice).
(c) Interpretation. When a reference is made in this Agreement
to Sections, such reference shall be to a Section to this Agreement
unless otherwise indicated. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Wherever the words
"include", "includes" or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation".
Capitalized terms used and not otherwise defined in this Agreement
shall have the respective meanings assigned to them in the Merger
Agreement.
(d) Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same
agreement, and shall become effective when one or more of the
counterparts have been signed by each of the parties and delivered to
the other party, it being understood that each party need not sign the
same counterpart.
(e) Entire Agreement; No Third-Party Beneficiaries. This
Agreement (including the documents and instruments referred to herein)
(i) constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof and (ii) is not intended to
confer upon any person other than the parties hereto any rights or
remedies hereunder.
(f) Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware
regardless of the laws that might otherwise govern under applicable
principles of conflicts of law thereof.
(g) Voidability. If prior to the execution hereof, the Board
of Directors of the Company shall not have duly and validly authorized
and approved by all necessary corporate action, this Agreement, the
Merger
Agreement and the transactions contemplated hereby and thereby, so that
by the execution and delivery hereof Parent or Sub would become, or
could reasonably be expected to become an "interested stockholder" with
whom the Company would be prevented for any period pursuant to Section
203 of the DGCL from engaging in any "business combination" (as such
terms are defined in Section 203 of the DGCL), then this Agreement
shall be void and unenforceable until such time as such authorization
and approval shall have been duly and validly obtained.
12. Stockholder Capacity. No person executing this Agreement
who is or becomes during the term hereof a director or officer of the Company
makes any agreement or understanding herein in his capacity as such director or
officer. Each Stockholder signs solely in his capacity as the record holder and
beneficial owner of, or the trustee of a trust whose beneficiaries are the
beneficial owners of, such Stockholder's Subject Shares and nothing herein
(including, without limitation, the provisions of Section 4(d)) shall limit or
affect any actions taken by a Stockholder in his capacity as an officer or
director of the Company.
13. Enforcement. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of the United States
located in the State of Delaware or in a Delaware state court, this being in
addition to any other remedy to which they are entitled at law or in equity. In
addition, each of the parties hereto (i) consents to submit such party to the
personal jurisdiction of any Federal court located in the State of Delaware or
any Delaware state court in the event any dispute arises out of this Agreement
or any of the transactions contemplated hereby, (ii) agrees that such party will
not attempt to deny or defeat such personal jurisdiction by motion or other
request for leave from any such court, (iii) agrees that such party will not
bring any action relating to this Agreement or the transactions contemplated
hereby in any court other than a Federal court sitting in the state of Delaware
or a Delaware state court and (iv) waives any right to trial by jury with
respect to
any claim or proceeding related to or arising out of this Agreement or any of
the transactions contemplated hereby.
14. Public Announcements. Each Stockholder will consult with
Parent before issuing, and provide Parent with the opportunity to review and
comment upon, any press release or other public statements with respect to the
transactions contemplated by this Agreement and the Merger Agreement, and shall
not issue any such press release or make any such public statement prior to such
consultation, except as may be required by applicable law, court process or by
obligations pursuant to any listing agreement with any national securities
exchange.
IN WITNESS WHEREOF, Parent, the Company and the Stockholders
have caused this Agreement to be duly executed and delivered as of the date
first written above.
XXXXXXX & XXXXXXX
By:___________________________________
Name:
Title:
INO ACQUISITION CORP.
By:___________________________________
Name:
Title:
CHASE VENTURE CAPITAL
ASSOCIATES, L.P.
By Chase Capital Partners,
A General Partner
By:_____________________________
Name:
Title:
CIBC WOOD GUNDY VENTURES, INC.
By:___________________________________
Name:
Title:
XXXXXX X. XXXX, O. D.
______________________________________
SCHEDULE A
Number of
Name and Shares of Company
Address of Common Stock
Stockholder Owned of Record
----------- ---------------
Chase Venture Capital 2,210,323
Associates, L.P.
c/o Chase Capital Partners
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
CIBC Wood Gundy Ventures, Inc. 779,007
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Xx. Xxxxxx X. Xxxx, O.D. 342,278
0000 Xxxxxx Xxx Xxxx
Xxxxxxx, XX 00000
