EXHIBIT 99.2
XXXXXX XXXXXXX INDUCEMENT AGREEMENT
This AGREEMENT, dated this 14th day of March, 1997, is given by XXXXXX
X. XXXXXXX, XX., a Georgia resident ("Xxxxxxx"), to XXXXX XXXXX, INC., a New
Jersey corporation having its principal place of business at 00 Xxxxxx Xxxx,
Xxxxxx, Xxx Xxxxxx ("VSI"),
WITNESSETH THAT
WHEREAS, Xxxxxxx is the principal shareholder of Xxxxxxx Healthcare,
Inc. ("Xxxxxxx Healthcare");
WHEREAS, Xxxxxxx Healthcare is the principal shareholder of Marquest
Medical Products, Inc. ("Marquest");
WHEREAS, Marquest is in the process of negotiating an agreement with
VSI pursuant to which VSI would acquire Marquest by means of a cash merger (the
"Merger Agreement");
WHEREAS, Xxxxxxx is the owner of a promissory note of Marquest in the
principal amount of $700,000, which promissory note is convertible into a total
of 1,000,000 shares of Marquest Common Stock (the "Promissory Note");
WHEREAS, Xxxxxxx Healthcare has indicated that it will not vote its
shares of Marquest Common Stock in favor of the Merger Agreement, the merger
contemplated thereby (the "Merger") and the other transactions contemplated by
the Merger Agreement unless the shareholders of Xxxxxxx Healthcare authorize
Xxxxxxx Healthcare to take such action and a related action involving the sale
of a product line by Xxxxxxx Healthcare to VSI (such authorization being
hereinafter referred to as the "Xxxxxxx Shareholder Approval");
WHEREAS, VSI has advised Xxxxxxx that VSI will not enter into the
Merger Agreement unless Xxxxxxx executes and delivers this Inducement Agreement;
WHEREAS, Xxxxxxx desires to induce VSI to enter into the Merger
Agreement and acknowledges that VSI will rely upon this Inducement Agreement in
entering into the Merger Agreement; and
WHEREAS, contemporaneous with the execution of this Agreement, it is
contemplated that Xxxxxxx Healthcare, Marquest and VSI will enter into an
agreement, captioned the "Xxxxxxx Healthcare Inducement Agreement" (the "Xxxxxxx
Healthcare Inducement Agreement"), pursuant to which the parties thereto will
make certain representations and covenants relating primarily to the Merger,
other matters contemplated by the Merger Agreement and a sale of assets to VSI,
NOW THEREFORE, to provide VSI with the inducements that it requires,
Xxxxxxx hereby warrants and covenants to VSI as follows:
1. Representations of Xxxxxxx. Xxxxxxx hereby warrants and represents
to VSI as follows:
1.1 Xxxxxxx has (i) the sole power to vote and dispose of
1,688,361.5 shares of the Common Stock, par value $.01 per share, of Xxxxxxx
Healthcare (the "Xxxxxxx Healthcare Common Stock") and (ii) the sole power to
vote and shared power to dispose of 562,594.5 shares of Xxxxxxx Healthcare
Common Stock, which shares are owned by the four adult children of Xxxxxxx and
are subject to a Voting Trust dated as of February 23, 1997 for which Xxxxxxx
acts as the sole trustee (the "Voting Trust"). The shares described in clause
(i) above include 1,244,378.5 shares owned by RPS Investments, Inc., a
corporation wholly-owned by Xxxxxxx.
1.2 Xxxxxxx has not entered into any agreement which would
preclude or otherwise affect in any respect Xxxxxxx'x ability to provide the
representations set forth in this Section 1 or the covenants set forth in
Section 2 hereof. Xxxxxxx has not pledged or otherwise encumbered any of the
shares of Xxxxxxx Healthcare Common Stock, or options or warrants to purchase
Xxxxxxx Healthcare Common Stock, that he owns. Xxxxxxx has the authority to
execute this Agreement with respect to all of the shares referenced in the first
sentence of Section 1.1 hereof.
1.3 Intentionally omitted.
1.4 Xxxxxxx owns the Promissory Note free and clear of any
security interests, consignments, liens, judgments, encumbrances, restrictions,
or claims of any kind.
1.5 Each of the factual representations regarding Xxxxxxx set
forth in the "WHEREAS" clauses of this Agreement are accurate.
1.6 Xxxxxxx has no actual knowledge that any of the warranties
and representations made by Marquest to VSI in the Merger Agreement are
inaccurate in any material respect. It is understood that (i) this Section 1.6
shall not survive the consummation of the Merger, (ii) Xxxxxxx shall not be
liable for monetary damages in the event that this Section 1.6 is inaccurate in
any respect and (ii) VSI's sole right in the event that it determines that this
Section 1.6 is materially inaccurate either at the time that this Agreement is
executed or as of the time of the closing described in the Merger Agreement
shall be for VSI to assert its rights under the Merger Agreement to terminate
the Merger Agreement (in which case the transactions contemplated by the Xxxxxxx
Healthcare Inducement Agreement will not be consummated).
2. Covenants of Xxxxxxx. Xxxxxxx hereby covenants and agrees with VSI
as follows:
2.1 At the meeting of Xxxxxxx Healthcare's shareholders
called to vote upon the Xxxxxxx Shareholder Approval, Xxxxxxx will, subject to
his fiduciary obligations as a director of Xxxxxxx Healthcare, as a majority
shareholder of Xxxxxxx Healthcare and as a trustee of the Voting Trusts and
subject to the receipt by the Board of Directors of Xxxxxxx Healthcare of the
"Xxxxxxx Opinion" (as defined in the Xxxxxxx Healthcare Inducement Agreement) at
the times contemplated by the Xxxxxxx Healthcare Inducement Agreement, vote all
of the shares of Xxxxxxx Healthcare Common Stock referenced in the first
sentence of Section 1.1 hereof and any other shares of Xxxxxxx Healthcare Common
Stock that he may acquire subsequent to the date hereto in favor of granting the
Xxxxxxx Shareholder Approval.
2.2 Prior to the earlier of the Effective Time of the Merger
(as defined in the Merger Agreement) or the date of the termination of the
Merger Agreement, Xxxxxxx will not sell, dispose, pledge, encumber or otherwise
transfer any of the shares of Xxxxxxx Healthcare Common Stock referenced in
Section 1.1 hereof or any other shares of Xxxxxxx Healthcare Common Stock that
he may acquire subsequent to the date hereof or any right to acquire such stock;
provided, however, that this Section 2.2 shall not preclude Xxxxxxx from (a)
disposing of shares of Xxxxxxx Healthcare Common Stock if, after such transfer,
the outstanding shares of Xxxxxxx Healthcare Common Stock that he and his
"Permitted Transferees" (as defined herein) continue to own represent more than
50% of the outstanding Xxxxxxx Healthcare Common Stock calculated on a fully
diluted basis (after taking into account all shares of Xxxxxxx Healthcare Common
Stock issuable pursuant to outstanding stock options, warrants, convertible
securities and other contractual arrangements entitling third-parties to acquire
shares of Xxxxxxx Healthcare Common Stock) and (b) transferring any of his
shares of Xxxxxxx Healthcare Common Stock to a transferee (a "Permitted
Transferee") if, prior to such transfer, such Permitted Transferee executes an
agreement, in form and substance reasonably satisfactory to VSI, to vote such
shares in favor of the Xxxxxxx Shareholder Approval.
2.3 Xxxxxxx will not sell, give, devise, encumber, pledge or
otherwise transfer the Promissory Note or any interest therein unless and until
the Merger Agreement is terminated.
2.4 Xxxxxxx will not demand payment under the Promissory Note
unless and until the Merger Agreement is terminated.
2.5 At the Closing under the Merger but prior to the Effective
Time of the Merger, Xxxxxxx will convert the Promissory Note in the aggregate
principal amount of $700,000 into a total of 1,000,000 shares of Marquest Common
Stock.
2.6 Upon consummation of the "Scheduled Asset Closing" (as
such term is defined in an agreement of even date herewith (captioned as the
Xxxxxxx Healthcare Inducement Agreement) executed by Xxxxxxx Healthcare,
Marquest and VSI and referred to herein as the "Xxxxxxx Healthcare Inducement
Agreement"), Xxxxxxx agrees to execute and deliver to VSI a covenant against
competition in the form of the covenant against competition annexed hereto as
Exhibit A in exchange for a payment of one hundred and forty thousand dollars
($140,000).
3. Notices. Any notices, requests, demands and other communications to
VSI required or permitted hereunder shall be in writing and shall be deemed to
have been duly given when delivered by hand or when mailed by registered or
certified mail, postage prepaid, or when given by telex or facsimile
transmission (promptly confirmed in writing), as follows:
Xxxxx Xxxxx, Inc.
00 Xxxxxx Xxxx
Xxxxxx, Xxx Xxxxxx 00000
Attn: Xx. Xxxxxxx X. Xxxxx
Telephone: 000-000-0000, ext. 371
Telecopy: 000-000-0000
with a copy to:
Xxx Xxxxx, Esq.
General Counsel
Xxxxx Xxxxx, Inc.
00 Xxxxxx Xxxx
Xxxxxx, Xxx Xxxxxx 00000
Telephone: 000-000-0000, ext 372
Telecopy: 000-000-0000
and with a copy to:
Xxxxx X. Xxxxxxxxx, Esq.
Xxxxxxxxxx, Sandler, Kohl,
Xxxxxx & Xxxxxx, P.C.
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Telephone: 000-000-0000
Telecopy: 000-000-0000
or to such other persons as VSI shall designate to Xxxxxxx in writing.
4. Assignment. This Agreement and all of the provisions hereof shall be
binding upon Xxxxxxx and shall inure to the benefit of VSI and its successors
and permitted assigns, but neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by VSI without the prior
written consent of Xxxxxxx.
5. Governing Law. This Agreement and the legal relations between the
parties hereto shall be governed by and construed in accordance with the laws of
the State of Delaware.
6. Headings and References. The headings of the Sections of this
Agreement are inserted for convenience of reference only and shall not
constitute a part hereof. All references herein to Sections are to sections of
this Agreement, unless otherwise indicated.
7. Interpretation; Definitions. Xxxxxxx does not intend for this
Agreement to be construed against VSI merely by virtue of the fact that VSI's
representatives drafted this Agreement. Capitalized terms not defined herein
shall have the definitions given to such terms in the Merger Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of
the date first set forth above.
/s/ Xxxxxx X. Xxxxxxx, Xx.
___________________________
Xxxxxx X. Xxxxxxx, Xx.
By execution of this Agreement, Xxxxx Xxxxx, Inc. agrees only that (i)
upon consummation of the Scheduled Asset Closing and delivery by Xxxxxx X.
Xxxxxxx, Xx. of the covenant against competition provided for in Section 2.6 of
this Agreement, Xxxxx Xxxxx, Inc. shall deliver to Xxxxxx X. Xxxxxxx, Xx. a
certified or bank cashier's check in an amount equal to one hundred and forty
thousand dollars ($140,000) and (ii) the limitations on VSI's rights described
in Section 1.6 of this Agreement are accepted by Xxxxx Xxxxx, Inc.
XXXXX XXXXX, INC.
By:/s/Xxxxxxx X. Xxxxx
__________________
Xxxxxxx X. Xxxxx,
Executive Vice President
The undersigned agrees that its shares of Xxxxxxx Healthcare Common
Stock shall be voted in the manner, and subject to the conditions, described in
Section 2.1 of this Agreement.
RPS INVESTMENTS, INC.
By:/s/Xxxxxx X. Xxxxxxx, Xx.
__________________________
Xxxxxx X. Xxxxxxx, Xx.
