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EXHIBIT (c)(1)
EXECUTION COPY
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AGREEMENT AND PLAN OF MERGER
among
XXXXXXX & XXXXXXX,
INO ACQUISITION CORP.
and
INNOTECH, INC.
Dated as of February 10, 1997
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TABLE OF CONTENTS
AGREEMENT AND PLAN OF MERGER
ARTICLE I
THE OFFER
Page
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Section 1.01 The Offer..................................................... 2
Section 1.02 Company Actions............................................... 4
ARTICLE II
THE MERGER
Section 2.01 The Merger.................................................... 6
Section 2.02 Closing....................................................... 7
Section 2.03 Effective Time................................................ 7
Section 2.04 Effects of the Merger......................................... 7
Section 2.05 Certificate of Incorporation and By-laws...................... 7
Section 2.06 Directors..................................................... 7
Section 2.07 Officers...................................................... 8
ARTICLE III
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
Section 3.01 Effect on Capital Stock....................................... 8
Section 3.02 Exchange of Certificates...................................... 9
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ARTICLE IV
REPRESENTATIONS & WARRANTIES OF THE COMPANY
Section 4.01 Organization................................................. 11
Section 4.02 Subsidiaries................................................. 12
Section 4.03 Capitalization............................................... 12
Section 4.04 Authority.................................................... 13
Section 4.05 Consent and Approvals; No Violations......................... 13
Section 4.06 SEC Documents; Financial Statements.......................... 14
Section 4.07 Information Supplied......................................... 15
Section 4.08 Absence of Certain Changes or Events......................... 16
Section 4.09 Litigation................................................... 16
Section 4.10 Contracts.................................................... 17
Section 4.11 Compliance with Laws......................................... 17
Section 4.12 Environmental Matters........................................ 18
Section 4.13 Absence of Changes in Benefit Plans; Labor
Relations............................................... 19
Section 4.14 ERISA Compliance............................................. 19
Section 4.15 Taxes........................................................ 21
Section 4.16 No Excess Parachute Payments................................. 22
Section 4.17 Title to Properties.......................................... 22
Section 4.18 Intellectual Property........................................ 23
Section 4.19 Distribution Agreements...................................... 24
Section 4.20 Voting Requirements.......................................... 24
Section 4.21 State Takeover Statutes...................................... 24
Section 4.22 Brokers; Schedule of Fees and Expenses....................... 24
Section 4.23 Opinion of Financial Advisor................................. 25
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF PARENT AND SUB
Section 5.01 Organization................................................. 25
Section 5.02 Authority.................................................... 26
Section 5.03 Consents and Approvals; No Violations........................ 26
Section 5.04 Information Supplied......................................... 27
Section 5.05 Interim Operations of Sub.................................... 27
Section 5.06 Brokers...................................................... 28
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Section 5.07 Financing.................................................... 27
Section 5.08 State Takeover Statutes...................................... 28
ARTICLE VI
COVENANTS
Section 6.01 Conduct of Business.......................................... 28
Section 6.02 No Solicitation.............................................. 31
Section 6.03 Certain Tax Matters.......................................... 33
Section 6.04 Other Actions................................................ 34
Section 6.05 Advice of Changes; Filings................................... 34
ARTICLE VII
ADDITIONAL AGREEMENTS
Section 7.01 Stockholder Approval; Preparation of Proxy
Statement............................................... 34
Section 7.02 Access to Information; Confidentiality....................... 35
Section 7.03 Reasonable Efforts; Notification............................. 36
Section 7.04 Stock Option Plans and Warrants.............................. 37
Section 7.05 Indemnification, Exculpation and Insurance................... 38
Section 7.06 Directors.................................................... 40
Section 7.07 Fees and Expenses............................................ 40
Section 7.08 Public Announcements......................................... 42
Section 7.09 Continuation of Benefits..................................... 42
Section 7.10 Stop Transfer................................................ 42
ARTICLE VIII
CONDITIONS
Section 8.01 Conditions to Each Party's Obligation to Effect
the Merger.............................................. 43
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ARTICLE IX
TERMINATION AND AMENDMENT
Section 9.01 Termination.................................................. 44
Section 9.02 Effect of Termination........................................ 46
Section 9.03 Amendment.................................................... 46
Section 9.04 Extention; Waiver............................................ 47
Section 9.05 Procedure for Termination, Amendment,
Extention or Waiver..................................... 47
ARTICLE X
MISCELLANEOUS
Section 10.01 Nonsurvival of Representations, Warranties
and Agreements.......................................... 48
Section 10.02 Notices...................................................... 48
Section 10.03 Interpertation............................................... 49
Section 10.04 Counterparts................................................. 50
Section 10.05 Entire Agreement; Third Party Beneficiaries.................. 50
Section 10.06 Governing Law................................................ 50
Section 10.07 Publicity.................................................... 50
Section 10.08 Assignment................................................... 50
Section 10.09 Enforcement.................................................. 51
EXHIBIT A Conditions of the Offer......................................
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EXECUTION COPY
AGREEMENT AND PLAN OF MERGER 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 INNOTECH,
INC., a Delaware corporation (the "Company").
WHEREAS the respective Boards of Directors of Parent, Sub and the
Company have approved the acquisition of the Company by Parent on the terms and
subject to the conditions set forth in this Agreement;
WHEREAS, in furtherance of such acquisition, Parent proposes to cause
Sub to make a tender offer to purchase all the outstanding shares of Common
Stock, par value $0.001 per share, of the Company (the "Company Common Stock";
all the outstanding shares of Company Common Stock being hereinafter
collectively referred to as the "Shares") at a purchase price of $13.75 per
Share (the "Offer Price"), net to the seller in cash, without interest thereon,
upon the terms and subject to the conditions set forth in this Agreement (as it
may be amended from time to time as permitted under this Agreement, the
"Offer"); and the Board of Directors of the Company has adopted resolutions
approving the Offer and the Merger (as defined below), recommending that the
Company's stockholders accept the Offer and approving the acquisition of Shares
by Sub pursuant to the Offer and the Stockholder Agreement (as defined below);
WHEREAS the respective Boards of Directors of Parent, Sub and the
Company have each approved the merger of Sub into the Company (the "Merger"),
upon the terms and subject to the conditions set forth in this Agreement,
whereby each Share, other than Shares owned directly or indirectly by Parent or
the Company and Dissenting Shares (as defined in Section 3.01(d)), will be
converted into the right to receive the price per share paid in the Offer;
WHEREAS, concurrently with the execution of this Agreement and as an
inducement to Parent to enter into this Agreement, Parent, Sub and certain
stockholders of the Company are entering into a Stockholder Agreement (the
"Stockholder Agreement") pursuant to which such stockholders have, among other
things, agreed to sell all such stockholders' Shares to Sub at a cash price per
Share equal
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to the Offer Price, or such higher price per Share as may be offered by Sub in
the Offer, upon the terms and subject to the conditions set forth in the
Stockholder Agreement;
WHEREAS, concurrently with the execution of this Agreement and as an
inducement to Parent to enter into this Agreement, Parent and certain
stockholders of the Company who are employed by the Company are entering into
Noncompetition Agreements (the "Noncompetition Agreements") pursuant to which
such stockholders have, among other things, agreed to not have any Relationship
(as defined in the Noncompetition Agreements) with certain third parties during
the Noncompetition Period (as defined in the Noncompetition Agreements); and
WHEREAS Parent, Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Offer and the Merger and also to prescribe various conditions to the Offer and
the Merger.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, Parent, Sub and the Company hereby agree as follows:
ARTICLE I
The Offer
SECTION 1.01. The Offer. (a) Provided that none of the conditions set
forth on Exhibit A hereto shall have occurred and be continuing, as promptly as
practicable but in no event later than five business days after the date of the
public announcement (on the date hereof or the following day) by Parent and the
Company of this Agreement, Sub shall, and Parent shall cause Sub to, commence
(within the meaning of Rule 14d-2 under the Exchange Act (as hereinafter
defined)) the Offer. The obligation of Sub to, and of Parent to cause Sub to,
commence the Offer, conduct and consummate the Offer and accept for payment, and
pay for, any Shares tendered and not withdrawn pursuant to the Offer shall be
subject only to the conditions set forth in Exhibit A (the "Offer Conditions")
(any of which (other than the condition as to HSR Act (as hereinafter defined)
compliance) may be waived in whole or in part by Sub in its
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sole discretion, provided that, without the express written consent of the
Company, Sub may not waive the Minimum Condition (as defined in Exhibit A)). Sub
expressly reserves the right, subject to compliance with the Exchange Act, to
modify the terms of the Offer, except that, without the express written consent
of the Company, Sub shall not (i) reduce the number of Shares subject to the
Offer, (ii) reduce the Offer Price, (iii) add to or modify the Offer Conditions,
(iv) except as provided in the next sentence, extend the Offer, (v) change the
form of consideration payable in the Offer or (vi) amend or alter any other term
of the Offer in any manner adverse to the holders of the Shares. Notwithstanding
the foregoing, Sub may, without the consent of the Company, (A) extend the Offer
for a specified period, if at the scheduled or any extended expiration date of
the Offer any of the Offer Conditions shall not be satisfied or waived, until
such time as such conditions are satisfied or waived, but in no event to a date
more than 90 calendar days from the commencement of the Offer, (B) extend the
Offer for any period required by any rule, regulation, interpretation or
position of the Securities and Exchange Commission (the "SEC") or the staff
thereof applicable to the Offer, (C) extend the Offer pursuant to Section
9.01(d) and (D) extend the Offer for any reason on one or more occasions for an
aggregate period of not more than 5 business days beyond the latest expiration
date that would otherwise be permitted under clause (A), (B) or (C) of this
sentence; provided, however, that the aggregate period of all extensions under
clauses (A), (B), (C) and (D) may not extend the expiration date of the Offer to
a date more than 90 calendar days from the commencement of the Offer. Subject to
the terms and conditions of the Offer and this Section 1.01(a), Sub shall, and
Parent shall cause Sub to, accept for payment, and pay for, all Shares validly
tendered and not withdrawn pursuant to the Offer that Sub becomes obligated to
accept for payment, and pay for, pursuant to the Offer as soon as practicable
after the expiration of the Offer.
(b) On the date of commencement of the Offer, Parent and Sub shall file
with the SEC a Tender Offer Statement on Schedule 14D-1 (the "Schedule 14D-1")
with respect to the Offer, which shall contain an offer to purchase and a
related letter of transmittal and summary advertisement (such Schedule 14D-1 and
the documents included therein pursuant to which the Offer will be made,
together with any supplements or amendments thereto, the "Offer Documents").
Parent and Sub agree that the Offer
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Documents shall comply as to form in all material respects with the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and
regulations promulgated thereunder, and the Offer Documents, on the date first
published, sent or given to the Company's stockholders, shall not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading, except
that no representation or warranty is made by Parent or Sub with respect to
written information supplied by the Company or any of its stockholders
specifically for inclusion or incorporation by reference in the Offer Documents.
Parent, Sub and the Company each agrees promptly to correct any written
information provided by it for use in the Offer Documents if and to the extent
that such information shall have become false or misleading in any material
respect, and Parent and Sub further agree to take all steps necessary to cause
the Schedule 14D-1 as so corrected to be filed with the SEC and the other Offer
Documents as so corrected to be disseminated to holders of Shares, in each case
as and to the extent required by applicable Federal securities laws. The Company
and its counsel shall be given reasonable opportunity to review and comment upon
the Offer Documents prior to their filing with the SEC or dissemination to the
stockholders of the Company. Parent and Sub agree to provide the Company and its
counsel any comments Parent, Sub or their counsel may receive from the SEC or
its staff with respect to the Offer Documents promptly after the receipt of such
comments.
(c) Parent shall provide or cause to be provided to Sub on a timely
basis the funds sufficient to accept for payment, and pay for, any and all
Shares that Sub becomes obligated to accept for payment, and pay for, pursuant
to the Offer.
SECTION 1.02. Company Actions. (a) The Company hereby approves of and
consents to the Offer and represents that the Board of Directors of the Company,
at a meeting duly called and held, duly and unanimously adopted resolutions
approving this Agreement and the Stockholder Agreement, the Offer and the
Merger, determining that the terms of the Offer and the Merger are fair to, and
in the best interests of, the Company's stockholders and recommending that the
Company's stockholders accept the Offer, tender their Shares pursuant to the
Offer and approve and adopt this Agreement (if required). The Company
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represents that its Board of Directors has received the opinion dated February
10, 1997 of Prudential Securities Incorporated ("Prudential Securities") that,
as of such date and based upon and subject to the matters set forth therein, the
cash consideration to be received by the holders of Shares pursuant to the Offer
and the Merger was fair from a financial point of view to such holders, and a
complete and correct signed copy of such opinion has been delivered by the
Company to Parent.
(b) On the date the Offer Documents are filed with the SEC, or promptly
thereafter, the Company shall file with the SEC a Solicitation/Recommendation
Statement on Schedule 14D-9 with respect to the Offer (such Schedule 14D-9, as
amended from time to time, the "Schedule 14D-9") containing the recommendation
described in paragraph 1.02(a) and shall mail the Schedule 14D-9 to the
stockholders of the Company. The Schedule 14D-9 shall comply as to form in all
material respects with the requirements of the Exchange Act and the rules and
regulations promulgated thereunder and, on the date filed with the SEC and on
the date first published, sent or given to the Company's stockholders, shall not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except that no representation or warranty is made by the Company
with respect to written information supplied by Parent or Sub specifically for
inclusion in the Schedule 14D-9. Each of the Company, Parent and Sub agrees
promptly to correct any written information provided by it for use in the
Schedule 14D-9 if and to the extent that such information shall have become
false or misleading in any material respect, and the Company further agrees to
take all steps necessary to amend or supplement the Schedule 14D-9 and to cause
the Schedule 14D-9 as so amended or supplemented to be filed with the SEC and
disseminated to the Company's stockholders, in each case as and to the extent
required by applicable Federal securities laws. Parent and its counsel shall be
given reasonable opportunity to review and comment upon the Schedule 14D-9 prior
to its filing with the SEC or dissemination to stockholders of the Company. The
Company agrees to provide Parent and its counsel any comments the Company or its
counsel may receive from the SEC or its staff with respect to the Schedule 14D-9
promptly after the receipt of such comments.
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(c) In connection with the Offer and the Merger, the Company shall
cause its transfer agent to furnish Sub promptly with mailing labels containing
the names and addresses of the record holders of Shares as of a recent date and
of those persons becoming record holders subsequent to such date, together with
copies of all lists of stockholders, security position listings and computer
files and all other information in the Company's possession or control regarding
the beneficial owners of Shares, and shall furnish to Sub such information and
assistance (including updated lists of stockholders, security position listings
and computer files) as Parent may reasonably request in communicating the Offer
to the Company's stockholders. Subject to the requirements of applicable law,
and except for such steps as are necessary to disseminate the Offer Documents
and any other documents necessary to consummate the Merger, Parent and Sub and
their agents shall hold in confidence the information contained in any such
labels, listings and files, will use such information only in connection with
the Offer and the Merger and, if this Agreement shall be terminated, will, upon
request, promptly deliver, and will use their best efforts to cause their agents
promptly to deliver, to the Company all copies of such information then in their
possession or control.
ARTICLE II
The Merger
SECTION 2.01. The Merger. Upon the terms and subject to the conditions
set forth in this Agreement, and in accordance with the Delaware General
Corporation Law (the "DGCL"), Sub shall be merged with and into the Company at
the Effective Time (as defined in Section 2.03). Following the Effective Time,
the separate corporate existence of Sub shall cease and the Company shall
continue as the surviving corporation (the "Surviving Corporation") and shall
succeed to and assume all the rights and obligations of Sub in accordance with
the DGCL. Notwithstanding the foregoing, Parent may elect at any time prior to
the Merger, instead of merging Sub into the Company as provided above, to merge
the Company with and into Sub. In such event, the parties agree to execute an
appropriate amendment to this Agreement in order to reflect the foregoing and,
where appropriate, to provide that the Sub shall be the Surviving Corporation
and will continue under the name "Innotech, Inc." At the election of Parent, any
direct or indirect wholly owned
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subsidiary (as defined in Section 10.03) of Parent may be substituted for Sub as
a constituent corporation in the Merger. In such event, the parties agree to
execute an appropriate amendment to this Agreement in order to reflect the
foregoing.
SECTION 2.02. Closing. The closing of the Merger will take place at
10:00 a.m. (New York City time) on a date to be specified by Parent or Sub,
which shall be no later than the second business day after satisfaction or
waiver of the conditions set forth in Article VIII (the "Closing Date"), at the
offices of Cravath, Swaine & Xxxxx, Worldwide Plaza, 000 Xxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, unless another date, time or place is agreed to in writing
by the parties hereto.
SECTION 2.03. Effective Time. Subject to the provisions of this
Agreement, as soon as practicable on or after the Closing Date, the parties
shall file a certificate of merger or other appropriate documents (in any such
case, the "Certificate of Merger") executed in accordance with the relevant
provisions of the DGCL and shall make all other filings or recordings required
under the DGCL and other applicable law. The Merger shall become effective at
such time as the Certificate of Merger is duly filed with the Delaware Secretary
of State, or at such other time specified in the Certificate of Merger as Sub
and the Company shall agree (the time the Merger becomes effective being
hereinafter referred to as the "Effective Time").
SECTION 2.04. Effects of the Merger. The Merger shall have the effects
set forth in Section 259 of the DGCL.
SECTION 2.05. Certificate of Incorporation and By-laws. (a) The Second
Amended and Restated Certificate of Incorporation of the Company (the
"Certificate of Incorporation"), as in effect immediately prior to the Effective
Time, shall be the certificate of incorporation of the Surviving Corporation
until thereafter changed or amended as provided therein or by applicable law.
(b) The by-laws of the Company (the "By-laws") as in effect immediately
prior to the Effective Time shall be the by-laws of the Surviving Corporation,
until thereafter changed or amended as provided therein or by applicable law.
SECTION 2.06. Directors. The directors of Sub immediately prior to the
Effective Time shall be the
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directors of the Surviving Corporation, until the earlier of their resignation
or removal or until their respective successors are duly elected and qualified,
as the case may be.
SECTION 2.07. Officers. The officers of the Company
immediately prior to the Effective Time shall be the officers of the Surviving
Corporation, until the earlier of their resignation or removal or until their
respective successors are duly elected and qualified, as the case may be.
ARTICLE III
Effect of the Merger on the Capital Stock of the
Constituent Corporations; Exchange of Certificates
SECTION 3.01. Effect on Capital Stock. As of the Effective
Time, by virtue of the Merger and without any action on the part of the holder
of any Shares or any shares of capital stock of Sub:
(a) Capital Stock of Sub. Each issued and outstanding share of
capital stock of Sub shall be converted into and become one fully paid
and nonassessable share of Common Stock, par value $.001 per share, of
the Surviving Corporation.
(b) Cancelation of Treasury Stock and Parent Owned Stock. Each
Share that is owned by the Company and each Share that is owned by
Parent, Sub or any other direct or indirect wholly owned subsidiary of
Parent shall automatically be canceled and retired and shall cease to
exist, and no consideration shall be delivered in exchange therefor.
(c) Conversion of Company Common Stock. Subject to Section
3.01(d), each issued and outstanding Share (other than Shares to be
canceled in accordance with Section 3.01(b)) shall be converted into
the right to receive from the Surviving Corporation in cash, without
interest, the price actually paid in the Offer (the "Merger
Consideration"). As of the Effective Time, all such Shares shall no
longer be outstanding and shall automatically be canceled and retired
and shall cease to exist, and each holder of a certificate representing
any such Shares shall cease to have any rights with
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respect thereto, except the right to receive the Merger
Consideration, without interest.
(d) Shares of Dissenting Stockholders. Notwithstanding
anything in this Agreement to the contrary, any issued and outstanding
Shares held by a person (a "Dissenting Stockholder") who has neither
voted in favor of the Merger nor consented in writing thereto and
otherwise complies with all the applicable provisions of the DGCL
concerning the right of holders of Company Common Stock to dissent from
the Merger and require appraisal of their Shares ("Dissenting Shares")
shall not be converted as described in Section 3.01(c) but shall become
the right to receive such consideration as may be determined to be due
to such Dissenting Stockholder pursuant to the laws of the State of
Delaware. If, after the Effective Time, such Dissenting Stockholder
withdraws his demand for appraisal or fails to perfect or otherwise
loses his right of appraisal, in any case pursuant to the DGCL, his
Shares shall be deemed to be converted as of the Effective Time into
the right to receive the Merger Consideration. The Company shall give
Parent (i) prompt notice of any demands for appraisal of Shares
received by the Company and (ii) if and after Sub shall have accepted
for payment Shares pursuant to and subject to the conditions of the
Offer (including the Minimum Condition) the opportunity to participate
in and direct all negotiations and proceedings with respect to any such
demands. The Company shall not, without the prior written consent of
Parent, make any payment with respect to, or settle, offer to settle or
otherwise negotiate, any such demands.
SECTION 3.02. Exchange of Certificates. (a) Paying Agent.
Prior to the Effective Time, Parent shall designate a substantial bank or trust
company to act as paying agent in the Merger (the "Paying Agent"). Parent shall
cause the Surviving Corporation to deposit with the Paying Agent in separate
trust for holders of the Certificates (as hereinafter defined) immediately
available funds in an amount sufficient for the payment of the aggregate Merger
Consideration for the shares converted pursuant to Section 3.01(c) (it being
understood that any and all interest earned on funds made available to the
Paying Agent pursuant to this Agreement shall be turned over to Parent).
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(b) Exchange Procedure. As soon as reasonably practicable
after the Effective Time, the Paying Agent shall mail to each holder of
record of a certificate or certificates that immediately prior to the
Effective Time represented Shares (the "Certificates"), (i) a letter of
transmittal (which shall specify that delivery shall be effected, and
risk of loss and title to the Certificates shall pass, only upon
delivery of the Certificates to the Paying Agent and shall be in a form
and have such other provisions as Parent may reasonably specify) and
(ii) instructions for use in effecting the surrender of the
Certificates in exchange for the Merger Consideration. Upon surrender
of a Certificate for cancelation to the Paying Agent or to such other
agent or agents as may be appointed by Parent, together with such
letter of transmittal, duly executed, and such other documents as may
reasonably be required by the Paying Agent, the holder of such
Certificate shall be entitled to receive in exchange therefor, and the
Paying Agent shall pay pursuant to irrevocable instructions given by
Sub or Parent, the amount of cash into which the Shares theretofore
represented by such Certificate shall have been converted pursuant to
Section 3.01, and the Certificate so surrendered shall forthwith be
canceled. In the event of a transfer of ownership of Shares that is not
registered in the transfer records of the Company, payment may be made
to a person other than the person in whose name the Certificate so
surrendered is registered, if such Certificate shall be properly
endorsed or otherwise be in proper form for transfer and the person
requesting such payment shall pay any transfer or other taxes required
by reason of the payment to a person other than the registered holder
of such Certificate or establish to the satisfaction of the Surviving
Corporation that such tax has been paid or is not applicable. Until
surrendered as contemplated by this Section 3.02, each Certificate
shall be deemed at any time after the Effective Time to represent only
the right to receive upon such surrender the amount of cash, without
interest, into which the Shares theretofore represented by such
Certificate shall have been converted pursuant to Section 3.01. No
interest will be paid or will accrue on the cash payable upon the
surrender of any Certificate.
(c) No Further Ownership Rights in Company Common Stock. All
cash paid upon the surrender of Certificates in accordance with the
terms of this Article III shall be deemed to have been paid in full
satisfaction of all rights pertaining to the Shares formerly
represented by such Certificates. At the Effective Time, the stock
transfer
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books of the Company shall be closed, and there shall be no further registration
of transfers on the stock transfer books of the Surviving Corporation of the
Shares that were outstanding immediately prior to the Effective Time. If, after
the Effective Time, Certificates are presented to the Surviving Corporation or
the Paying Agent for any reason except notation thereon that a stockholder has
elected to exercise his right to appraisal pursuant to the DGCL they shall be
canceled and exchanged as provided in this Article III.
(d) No Liability. Any funds deposited with the Paying Agent that remain
unclaimed by the former stockholders of the Company for six (6) months after the
Effective Time shall be paid to the Surviving Corporation upon demand, and any
former stockholders of the Company who have not theretofore complied with the
instructions for exchanging their Certificates provided herein shall thereafter
look only to the Surviving Corporation for payment of their claims for the
Merger Consideration set forth in Section 3.01 hereof for each Share held by
such stockholder, without any interest thereon. None of Parent, Sub, the Company
or the Paying Agent shall be liable to any person in respect of any cash
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar law. If any Certificates shall not have been surrendered
prior to seven years after the Effective Time (or immediately prior to such
earlier date on which any payment pursuant to this Article III would otherwise
escheat to or become the property of any Governmental Entity (as defined in
Section 4.05)), the cash payment in respect of such Certificate shall, to the
extent permitted by applicable law, become the property of the Surviving
Corporation, free and clear of all claims or interests of any person previously
entitled thereto.
ARTICLE IV
Representations and Warranties of the Company
The Company represents and warrants to Parent and Sub as follows:
SECTION 4.01. Organization. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite corporate power and authority to carry on its
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business as now being conducted. The Company is duly qualified or licensed to do
business and in good standing in each jurisdiction in which the property owned,
leased or operated by it or the nature of the business conducted by it makes
such qualification or licensing necessary, except in such jurisdictions where
the failure to be so duly qualified or licensed and in good standing could not
reasonably be expected to have a material adverse effect (as defined in Section
10.03) on the Company or prevent or materially delay the consummation of the
Offer and/or the Merger. The Company has made available to Parent complete and
correct copies of its Certificate of Incorporation and By-laws, as amended to
the date of this Agreement.
SECTION 4.02. Subsidiaries. The Company has no subsidiaries.
SECTION 4.03. Capitalization. The authorized capital stock of
the Company consists of 70,000,000 Shares and 5,000,000 shares of preferred
stock, par value $0.001 per share ("Company Preferred Stock"). At the close of
business on December 31, 1996, (i) 8,955,603 Shares were issued and outstanding,
(ii) 0 Shares were held by the Company in its treasury, (iii) 1,597,250 Shares
were reserved for issuance upon exercise of outstanding Company Stock Options
(as defined in Section 7.04), (iv) 102,482 Shares were issuable upon the
exercise of outstanding warrants and (v) no shares of Company Preferred Stock
were issued and outstanding. Except as set forth above, since December 31, 1996
no shares of capital stock or other voting securities of the Company were
issued, reserved for issuance, issuable or outstanding. All outstanding Shares
are, and all Shares which may be issued will be, when issued, duly authorized,
validly issued, fully paid and nonassessable and not subject to preemptive
rights. There are no bonds, debentures, notes or other indebtedness of the
Company having the right to vote (or convertible into, or exchangeable for,
securities having the right to vote) on any matters on which stockholders of the
Company may vote. Except as set forth above, as of the date of this Agreement,
there are not any securities, options, warrants, calls, rights, commitments,
agreements, arrangements or undertakings of any kind to which the Company is a
party or by which any of them is bound obligating the Company to issue, deliver
or sell, or cause to be issued, delivered or sold, additional shares of capital
stock or other voting securities of the Company or obligating the Company to
issue, grant, extend or enter into any such security,
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option, warrant, call, right, commitment, agreement, arrangement or undertaking.
As of the date of this Agreement, there are not any outstanding contractual
obligations of the Company to repurchase, redeem or otherwise acquire any shares
of capital stock of the Company.
SECTION 4.04. Authority. The Company has the requisite
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby (other than, with respect to the
Merger, the approval and adoption of this Agreement by the holders of a majority
of the Shares (the "Company Stockholder Approval")). The execution, delivery and
performance of this Agreement and the consummation by the Company of the Merger
and of the other transactions contemplated hereby have been duly authorized by
all necessary corporate action on the part of the Company and no other corporate
proceedings on the part of the Company are necessary to authorize this Agreement
or to consummate the transactions so contemplated (in each case, other than,
with respect to the Merger, the Company Stockholder Approval). This Agreement
has been duly executed and delivered by the Company and, assuming this Agreement
constitutes a valid and binding obligation of Parent and Sub, constitutes a
valid and binding obligation of the Company enforceable against the Company in
accordance with its terms.
SECTION 4.05. Consents and Approvals; No Violations. Except
for filings, permits, authorizations, consents and approvals as may be required
under, and other applicable requirements of, the Exchange Act (including the
filing with the SEC of the Schedule 14D-9 and a proxy or information statement
relating to any required approval by or meeting of the Company's stockholders of
this Agreement (the "Proxy Statement")), the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), the DGCL, the laws of
other states in which the Company is qualified to do or is doing business, state
takeover laws and foreign laws, neither the execution, delivery or performance
of this Agreement by the Company nor the consummation by the Company of the
transactions contemplated hereby will (i) conflict with or result in any breach
of any provision of the Certificate of Incorporation or By-laws of the Company,
(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 other
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regulatory authority or agency, domestic, foreign or supranational (a
"Governmental Entity") (except where the failure to obtain such permits,
authorizations, consents or approvals or to make such filings would not have a
material adverse effect on the Company or prevent or materially delay the
consummation of the Offer and/or the Merger), (iii) except as set forth on
Schedule 4.05, result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, amendment, cancelation or acceleration) under, any of the
terms, conditions or provisions of any note, bond, mortgage, indenture, lease,
license, contract, agreement or other instrument or obligation to which the
Company is a party or by which it or any of its properties or assets may be
bound or (iv) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to the Company or any of its properties or assets, except
in the case of clauses (iii) or (iv) for violations, breaches or defaults that
could not reasonably be expected to have a material adverse effect on the
Company or prevent or materially delay the consummation of the Offer and/or the
Merger.
SECTION 4.06. SEC Documents; Financial Statements. The Company
has filed with the SEC all reports, forms, schedules and statements and other
documents required to be filed by it since March 14, 1996 (the "SEC Documents").
As of their respective filing dates, (i) the SEC Documents complied in all
material respects with the requirements of the Securities Act of 1933 (the
"Securities Act"), or the Exchange Act, as the case may be, and the rules and
regulations of the SEC promulgated thereunder applicable to such SEC Documents,
and (ii) none of the SEC Documents contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. The financial statements of the
Company included in the SEC Documents comply as to form in all material respects
with applicable accounting requirements and the published rules and regulations
of the SEC with respect thereto, have been prepared in accordance with generally
accepted accounting principles (except, in the case of unaudited statements, as
permitted by Form 10-Q of the SEC) applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto) and fairly
present, in all material respects, the consolidated financial position of the
Company as of the
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dates thereof and the results of its operations and cash flows for the periods
then ended (subject, in the case of unaudited statements, to normal year-end
audit adjustments). Except as set forth in the SEC Documents filed and publicly
available prior to the date of this Agreement, and except for liabilities and
obligations incurred in the ordinary course of business consistent with past
practice since the date of the most recent consolidated balance sheet included
in the SEC Documents filed and publicly available prior to the date of this
Agreement and liabilities and obligations that would not, individually or in the
aggregate, have a material adverse effect on the Company, the Company does not
have any liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) required by generally accepted accounting principles to
be set forth on a balance sheet of the Company or in the notes thereto.
SECTION 4.07. Information Supplied. None of the information
supplied or to be supplied by the Company in writing for inclusion or
incorporation by reference in (i) the Offer Documents, (ii) the Schedule 14D-9,
(iii) the information to be filed by the Company in connection with the Offer
pursuant to Rule 14f-1 promulgated under the Exchange Act (the "Information
Statement") or (iv) the Proxy Statement, will, in the case of the Offer
Documents, the Schedule 14D-9 and the Information Statement at the respective
times the Offer Documents, the Schedule 14D-9 and the Information Statement are
filed with the SEC or first published, sent or given to the Company's
stockholders, or in the case of the Proxy Statement, at the time the Proxy
Statement is first mailed to the Company's stockholders or at the time of the
Stockholders Meeting (as defined in Section 7.01), as such Proxy Statement may
be amended or supplemented, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading. The Schedule 14D-9, the Information Statement and
the Proxy Statement will comply as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations thereunder,
except that no representation or warranty is made by the Company with respect to
statements made or incorporated by reference therein based on information
supplied by Parent or Sub specifically for inclusion or incorporation by
reference therein.
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SECTION 4.08. Absence of Certain Changes or Events. Except as
disclosed in the SEC Documents (including exhibits thereto) filed and publicly
available prior to the date of this Agreement (the "Filed SEC Documents"), and
except as set forth on Schedule 4.08 hereto, since the date of the most recent
audited financial statements included in the Filed SEC Documents, the Company
has conducted its business only in the ordinary course, and there has not been
(i) any material adverse change in the Company, (ii) any declaration, setting
aside or payment of any dividend or other distribution (whether in cash, stock
or property) with respect to any of the Company's capital stock, (iii) any
split, combination or reclassification of any of its capital stock or any
issuance or the authorization of any issuance of any other securities in respect
of, in lieu of or in substitution for shares of its capital stock, (iv) (x) any
granting by the Company to any officer of the Company of any increase in
compensation, except in the ordinary course of business consistent with prior
practice or as was required under employment agreements in effect as of the date
of the most recent audited financial statements included in the Filed SEC
Documents, (y) any granting by the Company to any officer of any increase in
severance or termination pay, except as was required under any employment,
severance or termination agreements in effect as of the date of the most recent
audited financial statements included in the Filed SEC Documents or (z) any
entry by the Company into any employment, severance or termination agreement
with any officer, (v) any damage, destruction or loss to property, whether or
not covered by insurance, that has or could reasonably be expected to have a
material adverse effect on the Company, or (vi) any change in accounting
methods, principles or practices by the Company materially affecting its assets,
liabilities or business, except insofar as may have been required by a change in
generally accepted accounting principles.
SECTION 4.09. Litigation. Except as disclosed in the Filed SEC
Documents and except as disclosed on Schedule 4.09 hereto, there is no suit,
action or proceeding pending or, to the knowledge of the Company, threatened
against or affecting the Company that, individually or in the aggregate, could
reasonably be expected to have a material adverse effect on the Company, or
prevent or materially delay the consummation of the Offer and/or the Merger, nor
is there any judgment, decree, injunction, rule or order of any Governmental
Entity or arbitrator
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outstanding against the Company having, or which could reasonably be expected to
have, any such effect.
SECTION 4.10. Contracts. Except as disclosed in the Filed SEC
Documents or set forth on Schedule 4.10 and delivered or made available to
Parent, there are no contracts or agreements that are material to the business,
financial condition or results of operations of the Company. The Company is not
in violation of or in default under (nor does there exist any condition which
upon the passage of time or the giving of notice or both would cause such a
violation of or default under) any lease, permit, concession, franchise, license
or any other contract, agreement, arrangement or understanding, to which it is a
party or by which it or any of its properties or assets is bound, except for
violations or defaults that could not, individually or in the aggregate,
reasonably be expected to result in a material adverse affect on the Company.
SECTION 4.11. Compliance with Laws. Except as disclosed in the
Filed SEC Documents, the Company is in compliance with all applicable statutes,
laws, ordinances, regulations, rules, judgments, decrees and orders of any
Governmental Entity applicable to its business or operations, except for
instances of actual or possible noncompliance that, individually or in the
aggregate, could not reasonably be expected to have a material adverse effect on
the Company or prevent or materially delay the consummation of the Offer and/or
the Merger. The Company has in effect all Federal, state, local and foreign
governmental approvals, authorizations, certificates, filings, franchises,
licenses, notices, permits and rights, including all authorizations under
Environmental Laws (as defined below) ("Permits"), necessary for it to own,
lease or operate its properties and assets and to carry on its business as now
conducted, except for the failure to have such Permits that, individually or in
the aggregate, could not reasonably be expected to have a material adverse
effect on the Company. There has occurred no default under any Permit, except
for defaults under Permits that, individually or in the aggregate, could not
reasonably be expected to have a material adverse effect on the Company. As of
the date of this Agreement, no investigation or review by any Governmental
Entity with respect to the Company is pending or, to the best knowledge of the
Company, threatened, nor has any Governmental Entity indicated an intention to
conduct any investigation or review, other than, in each case, those the outcome
of which could not be reasonably
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expected to have a material adverse effect on the Company or prevent or
materially delay the consummation of the Offer and/or the Merger.
SECTION 4.12. Environmental Matters. Except as set forth in
Schedule 4.12:
(i) the Company is, and has been, in compliance with all
applicable Environmental Laws (as defined below), except for actual or possible
noncompliance which individually or in the aggregate could not reasonably be
expected to have a material adverse effect on the Company. The term
"Environmental Laws" means any Federal, state, provincial, regional, municipal,
local or foreign judgment, order, decree, statute, law, ordinance, rule,
regulation, code, permit, consent, approval, license, writ, decree, directive,
injunction or other enforceable requirement, including any registration
requirement, relating to: (A) Releases (as defined below) or threatened Releases
of Hazardous Materials (as defined below) into the environment; (B) the
generation, treatment, storage, disposal, use, handling, manufacturing,
transportation or shipment of Hazardous Materials; or (C) otherwise relating to
pollution or protection of health or safety or the environment;
(ii) there has been no Release or threatened Release of
Hazardous Materials, in, on, under or affecting any property now or previously
owned, leased or operated by the Company or, to the knowledge of the Company,
any adjacent site, except in each case for those Releases which individually or
in the aggregate could not be reasonably expected to have a material adverse
effect on the Company. The term "Release" has the meaning set forth in 42 U.S.C.
Section 9601(22). The term "Hazardous Materials" means any pollutant,
contaminant, hazardous, radioactive or toxic substance, material, constituent or
waste, or any other waste, substance, chemical or material regulated under any
Environmental Law, including (1) petroleum, crude oil and any fractions thereof,
(2) natural gas, synthetic gas and any mixtures thereof, (3) asbestos and/or
asbestos-containing material, (4) radon and (5) polychlorinated biphenyls
("PCBs"), or materials or fluids containing PCBs;
(iii) the Company has not received any written or, to the
knowledge of any of the Company's senior executive officers, oral, notice of a
pending or threatened action, demand, investigation or inquiry by any
Governmental Entity or other person relating to any actual or potential
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violations of Environmental Law or any actual or potential obligation to
investigate or remediate a Release or threatened Release of any Hazardous
Materials; and
(iv) the Company has not assumed, whether by contract or, to
the Company's knowledge, operation of law, any liabilities or obligations
arising under Environmental Laws in connection with formerly owned, leased or
operated properties or facilities or in connection with any formerly owned
divisions, subsidiaries, companies or other entities, except in each case for
those which individually or in the aggregate could not reasonably be expected to
have a material adverse effect on the Company.
SECTION 4.13. Absence of Changes in Benefit Plans; Labor
Relations. Except as disclosed in the Filed SEC Documents and except as
disclosed on Schedule 4.13 hereto, since the date of the most recent audited
financial statements included in the Filed SEC Documents, there has not been any
adoption or amendment in any material respect by the Company of any collective
bargaining agreement or any bonus, pension, profit sharing, deferred
compensation, incentive compensation, stock ownership, stock purchase, stock
option, phantom stock, retirement, vacation, severance, disability, death
benefit, hospitalization, medical or other plan or arrangement providing
benefits to any current or former employee, officer or director of the Company.
Except as set forth in Schedule 4.13 or as disclosed in the Filed SEC Documents,
there exist no employment, consulting, severance, termination or indemnification
agreements or arrangements between the Company and any current or former
employee, officer or director of the Company. There are no collective bargaining
or other labor union agreements to which the Company is a party or by which it
is bound. To the best knowledge of the Company, since January 1, 1994, the
Company has not encountered any labor union organizing activity, or had any
actual or threatened employee strikes, work stoppages, slowdowns or lockouts.
SECTION 4.14. ERISA Compliance. (i) Schedule 4.14(i) contains
a list and brief description of all "employee pension benefit plans" (as defined
in Section 3(2) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")) (sometimes referred to herein as "Pension Plans"), "employee
welfare benefit plans" (as defined in Section 3(1) of ERISA) and all other
benefit plans maintained or contributed to by the Company or any
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other person or entity that, together with the Company, is treated as a single
employer under Section 414(b), (c), (m) or (o) of the Code (the Company and each
such other person or entity, a "Commonly Controlled Entity") for the benefit of
any current or former employees, officers or directors of the Company
(collectively, "Benefit Plans"). The Company has delivered or made available to
Parent true, complete and correct copies of (1) each Benefit Plan (or, in the
case of any unwritten Benefit Plans, descriptions thereof), (2) the most recent
annual report on Form 5500 filed with the Internal Revenue Service with respect
to each Benefit Plan (if any such report was required), (3) the most recent
summary plan description for each Benefit Plan for which such summary plan
description is required and (4) each trust agreement and group annuity contract
relating to any Benefit Plan. Each Benefit Plan has been administered in all
material respects in accordance with its terms. The Company and all the Benefit
Plans are all in compliance in all material respects with applicable provisions
of ERISA and the Code (as defined below).
(ii) Except as disclosed in Schedule 4.14(ii), all Pension
Plans intended to qualify under Section 401(a) of the Code have been the subject
of determination letters from the Internal Revenue Service to the effect that
such Pension Plans are qualified and exempt from Federal income taxes under
Section 401(a) and 501(a), respectively, of the Code, and no such determination
letter has been revoked nor has any such Pension Plan been amended since the
date of its most recent determination letter or application therefor in any
respect that would adversely affect its qualification or materially increase its
costs. All amendments to Pension Plans required under ERISA and the Code to be
adopted by the Company by December 31, 1994, have been adopted.
(iii) No Commonly Controlled Entity has within the five year
period immediately preceding the date of this Agreement maintained, contributed
to or been obligated to contribute to any Benefit Plan that is subject to Title
IV of ERISA. No Commonly Controlled Entity is required to contribute to any
"multiemployer plan" (as defined in Section 4001(a)(3) of ERISA) or has
withdrawn from any multiemployer plan where such withdrawal has resulted or
would result in any "withdrawal liability" (within the meaning of Section 4201
of ERISA) that has not been fully paid.
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(iv) With respect to any Benefit Plan that is an employee
welfare benefit plan, except as disclosed in Schedule 4.14(iv), (1) no such
Benefit Plan (excluding severance plans) is unfunded or funded through a
"welfare benefits fund", as such term is defined in Section 419(e) of the
Code, (2) each such Benefit Plan that is a "group health plan", as such term is
defined in Section 5000(b)(1) of the Code, complies substantially with the
applicable requirements of Section 4980B(f) of the Code and (3) except as
provided in writing in such plan, there are no understandings, agreements or
undertakings, written or oral, that would prevent any such plan (including any
such plan covering retirees or other former employees) from being amended or
terminated without material liability to the Company on or at any time after the
Effective Time.
(v) Schedule 4.14(v) lists all outstanding Stock Options as
of December 31, 1996, showing for each such Option: (1) the number of Shares
issuable, (2) the number of vested Shares, (3) the date of grant and (4) the
exercise price.
(vi) Except as set forth on Schedule 4.14(vi) and except with
respect to the Stock Options, no employee of the Company will be entitled to any
additional compensation or benefits or any acceleration of the time of payment
or vesting of any compensation or benefits under any Benefit Plan as a result of
the transactions contemplated by this Agreement. It shall be assumed for
purposes of the preceding sentence that no payments will be received by, or
accelerated to, any such employee as a result of the termination of such
individual's employment by the Surviving Corporation after the Effective Time.
SECTION 4.15. Taxes. The Company has filed all tax returns and
reports required to be filed by it and, except with respect to state sales
taxes, has paid all material taxes due and required to be paid by it and, except
with respect to state sales taxes, the most recent financial statements
contained in the Filed SEC Documents reflect an adequate reserve for all taxes
payable by the Company for all taxable periods and portions thereof through the
date of such financial statements. No deficiencies for any taxes which remain
outstanding have been proposed, asserted or assessed against the Company, and no
requests for waivers of the time to assess any such taxes are pending. None of
the Federal income tax returns of the Company have been examined by the United
States Internal Revenue Service. As of
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December 31, 1995, the Company had Federal net operating loss carryforwards (the
"NOL Carryforwards") totalling $21,670,941. The Company had an additional loss
for book purposes of $10,822,452 for 1996. Schedule 4.15 sets forth the periods
during which the NOL Carryforwards arose and the expiration dates of the NOL
Carryforwards, identifies which amounts are currently limited under Section 382
of the Code or the "separate return limitation year" ("SRLY") rules of the
consolidated return regulations, and, in the case of NOL Carryforwards currently
limited under Section 382 of the Code, the relevant Section 382 limitation
(within the meaning of Section 382(b)(1) of the Code). As used in this
Agreement, "taxes" shall mean all Federal, state, local and foreign income,
property, sales, excise and other taxes, tariffs or other governmental charges
in the nature of a tax as well as any interest, penalties and additions to tax.
SECTION 4.16. No Excess Parachute Payments. Except as set
forth on Schedule 4.16 and as contained in documents delivered to Parent or its
representatives, no amount that could be received pursuant to the Benefit Plans
or any executed and delivered agreements between the Company and any officer
thereof in effect as of the date of this Agreement (whether in cash or property
or the vesting of property) as a result of any of the transactions contemplated
by this Agreement by any employee, officer or director of the Company who is a
"disqualified individual" (as such term is defined in proposed Treasury
Regulation Section 1.280G-1) under any employment, severance or termination
agreement, other compensation arrangement or Benefit Plan currently in effect
would be an "excess parachute payment" (as such term is defined in Section
280G(b)(1) of the Code). It shall be assumed for purposes of the preceding
sentence that no payments will be received by, or accelerated to, any such
disqualified individual as a result of the termination of such individual's
employment by the Surviving Corporation after the Effective Time. To the best
knowledge of the Company, no disqualified individual is entitled to receive any
additional payment from the Company, the Surviving Corporation, or any other
person referred to in Q&A 10 under proposed Treasury Regulation Section 1.280G-1
(a "Parachute Gross-Up Payment") in the event that the 20 per cent parachute
excise tax of Section 4999(a) of the Code is imposed on such person. The Board
of Directors of the Company has not during the six months prior to the date of
this Agreement granted to any officer, director or employee
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of the Company any right to receive any Parachute Gross-Up Payment.
SECTION 4.17. Title to Properties. (i) Except as set forth in
Schedule 4.17, the Company has good and marketable title to, or valid leasehold
interests in or valid rights to, all its material properties and assets except
for such as are no longer used or useful in the conduct of its businesses or as
have been disposed of in the ordinary course of business and except for defects
in title, easements, restrictive covenants and similar encumbrances that, in the
aggregate, do not materially interfere with its ability to conduct its business
as currently conducted. All such material assets and properties, other than
assets and properties in which the Company has a leasehold interest, are free
and clear of all Liens other than those set forth in Schedule 4.17 and except
for Liens that, in the aggregate, do not materially interfere with the ability
of the Company to conduct its business as currently conducted.
(ii) Except as set forth in Schedule 4.17, the Company has
complied in all material respects with the terms of all material leases to which
it is a party and under which it is in occupancy, and all such leases are in
full force and effect. The Company enjoys peaceful and undisturbed possession
under all such material leases, except for failures to do so that could not in
the aggregate be reasonably expected to have a material adverse effect on the
Company.
SECTION 4.18. Intellectual Property. The Company owns, or is
validly licensed or otherwise has the right to use, without any obligation to
make any fixed or contingent payments, including any royalty payments, all
patents, patent rights, trademarks, trademark rights, trade names, trade name
rights, service marks, service xxxx rights, copyrights and other proprietary
intellectual property rights and computer programs (certain of which computer
programs may require royalty payments) that are material to the conduct of the
business of the Company as now operated (collectively, "Intellectual Property
Rights"). Schedule 4.18 sets forth a description of all patents, trademarks and
copyrights and applications therefor owned by or licensed to the Company that
are material to the conduct of the business of the Company as now operated.
Except as set forth in Schedule 4.18, no claims are pending or, to the knowledge
of the Company, threatened that the Company is infringing or otherwise adversely
affecting the rights of
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any person with regard to any Intellectual Property Right. To the knowledge of
the Company, except as set forth in Schedule 4.18, no person is infringing the
rights of the Company with respect to any Intellectual Property Right. The
Company has not licensed, or otherwise granted, to any third party, any rights
in or to any Intellectual Property Rights.
SECTION 4.19. Distribution Agreements. Schedule 4.19 is a
complete list of all contracts or agreements and such Schedule contains a true
and complete description of any oral arrangements or understandings, to which
the Company is a party relating to the distribution, sale or marketing by third
parties of the Company's products or products licensed by the Company. The
Company has made available to Parent and its representatives true and correct
copies of all contracts and agreements to which the Company is a party relating
to the distribution, sale or marketing by third parties of the Company's
products or products licensed by the Company.
SECTION 4.20. Voting Requirements. The affirmative vote of the
holders of a majority of the outstanding Shares is the only vote of the holders
of any class or series of the Company's capital stock necessary to approve this
Agreement and the transactions contemplated by this Agreement.
SECTION 4.21. State Takeover Statutes. The Board of Directors
of the Company has approved the Merger, this Agreement and the Stockholder
Agreement, and such approval is sufficient to render inapplicable to the Merger,
this Agreement, the Stockholder Agreement, and the transactions contemplated by
this Agreement and the Stockholder Agreement, the provisions of Section 203 of
the DGCL to the extent, if any, such Section is applicable to the Merger, this
Agreement, the Stockholder Agreement and the transactions contemplated by this
Agreement and the Stockholder Agreement. To the best of the Company's knowledge,
no other state takeover statute or similar statute or regulation applies or
purports to apply to the Merger, this Agreement, the Stockholder Agreement or
the transactions contemplated by this Agreement or the Stockholder Agreement.
SECTION 4.22. Brokers; Schedule of Fees and Expenses. No
broker, investment banker, financial advisor or other person, other than
Prudential, the fees and
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expenses of which will be paid by the Company, is entitled to any broker's,
finder's, financial advisor's or other similar fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Company. The fees and expenses incurred and to be
incurred in connection with this Agreement and the transactions contemplated by
this Agreement (other than printing and mailing costs and expenses), including,
without limitation, the fees and expenses of Prudential Securities and the fees
and expenses of the Company's legal counsel (including any counsel retained by
the independent committee of the Board of Directors of the Company or any other
counsel retained to represent the interests of the Company or its shareholders),
shall be as set forth on Schedule 4.22.
SECTION 4.23. Opinion of Financial Advisor. The Board of
Directors of the Company has received the opinion dated February 10, 1997 of
Prudential, that, as of such date and based upon and subject to the matters set
forth therein, the cash consideration to be received by holders of Shares
pursuant to the Offer and the Merger was fair from a financial point of view to
such holders, a signed copy of which opinion has been delivered to Parent.
ARTICLE V
Representations and Warranties
of Parent and Sub
Parent and Sub represent and warrant to the Company as
follows:
SECTION 5.01. Organization. Each of Parent and Sub is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and has all requisite corporate power
and authority to carry on its business as now being conducted. Each of Parent
and Sub is duly qualified or licensed to do business and is in good standing in
each jurisdiction in which the nature of its business or the ownership or
leasing of its properties makes such qualifications or licensing necessary,
other than in such jurisdictions where the failure to be so qualified or
licensed (individually or in the aggregate) could not be reasonably expected to
prevent or materially delay the consummation of the Offer and/or the Merger.
Parent has delivered to the Company complete and
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correct copies of its certificate of incorporation and by-laws and the
certificate of incorporation and by-laws of Sub, in each case as amended to the
date of this Agreement.
SECTION 5.02. Authority. Parent and Sub have requisite
corporate power and authority to execute and deliver this Agreement and the
Stockholder Agreement, and to consummate the transactions contemplated by this
Agreement and the Stockholder Agreement. The execution, delivery and performance
of this Agreement and the Stockholder Agreement, and the consummation of the
transactions contemplated by this Agreement and the Stockholder Agreement, have
been duly authorized by all necessary corporate action on the part of Parent and
Sub and no other corporate proceedings on the part of Parent and Sub are
necessary to authorize this Agreement or the Stockholder Agreement or to
consummate the transactions contemplated hereby or thereby. No vote of Parent
shareholders is required to approve this Agreement or the Stockholder Agreement
or the transactions contemplated hereby or thereby. Each of this Agreement and
the Stockholder Agreement has been duly executed and delivered by Parent and
Sub, and, assuming such Agreement constitutes a valid and binding obligation of
the other parties thereto, constitutes a valid and binding obligation of Parent
and Sub enforceable against Parent and Sub in accordance with its terms.
SECTION 5.03. Consents and Approvals; No Violations. Except
for filings, permits, authorizations, consents and approvals as may be required
under, and other applicable requirements of, the Exchange Act (including the
filing with the SEC of the Offer Documents), the HSR Act, the DGCL, the laws of
other states in which Parent is qualified to do or is doing business, state
takeover laws and foreign laws, neither the execution, delivery or performance
of this Agreement or the Stockholder Agreement by Parent and Sub, nor the
consummation by Parent and Sub of the transactions contemplated hereby or
thereby will (i) conflict with or result in any breach of any provision of the
respective certificate of incorporation or by-laws of Parent and Sub, (ii)
require any filing with, or permit, authorization, consent or approval of, any
Governmental Entity (except where the failure to obtain such permits,
authorizations, consents or approvals or to make such filings would not
reasonably be expected to prevent or materially delay the consummation of the
Offer and/or the Merger), (iii) result in a violation or breach of, or
constitute (with or without due notice or lapse of time or
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both) a default (or give rise to any right of termination, amendment,
cancelation or acceleration) under, any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, license, lease, contract, agreement or
other instrument or obligation to which Parent or any of its subsidiaries is a
party or by which any of them or any of their properties or assets may be bound
or (iv) violate any order, writ, injunction, decree, statute, rule or regulation
applicable to Parent, any of its subsidiaries or any of their properties or
assets, except in the case of clauses (iii) and (iv) for violations, breaches or
defaults which could not, individually or in the aggregate, be reasonably
expected to prevent or materially delay the consummation of the Offer and/or the
Merger.
SECTION 5.04. Information Supplied. None of the information
supplied or to be supplied by Parent or Sub specifically for inclusion or
incorporation by reference in (i) the Offer Documents, (ii) the Schedule 14D-9,
(iii) the Information Statement or (iv) the Proxy Statement will, in the case of
the Offer Documents, the Schedule 14D-9 and the Information Statement, at the
respective times the Offer Documents, the Schedule 14D-9 and the Information
Statement are filed with the SEC or first published, sent or given to the
Company's stockholders, or, in the case of the Proxy Statement, at the time the
Proxy Statement is first mailed to the Company's stockholders or at the time of
the Stockholders Meeting, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading. The Offer Documents will comply as to form in all
material respects with the requirements of the Exchange Act and the rules and
regulations thereunder, except that no representation or warranty is made by
Parent or Sub with respect to statements made or incorporated by reference
therein based on information supplied by the Company specifically for inclusion
or incorporation by reference therein.
SECTION 5.05. Interim Operations of Sub. Sub (and any other
wholly owned subsidiary of Parent which may be used to effect the Offer and the
Merger pursuant to Section 2.01) was formed solely for the purpose of engaging
in the transactions contemplated hereby, has engaged in no other business
activities and has conducted its operations only as contemplated hereby.
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SECTION 5.06. Brokers. No broker, investment banker, financial
advisor or other person is entitled to any broker's, finder's, financial
advisor's or other similar fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
Parent or Sub.
SECTION 5.07. Financing. Parent has sufficient funds readily
available to purchase, or to cause Sub to purchase, all the Shares pursuant to
the Offer and the Merger and to pay all fees and expenses payable by Parent or
Sub related to the transactions contemplated by this Agreement.
SECTION 5.08. State Takeover Statutes. To the best of Parent's
knowledge, no state takeover statute (other than Section 203 of the DGCL) or
similar statute or regulation applies or purports to apply to the Merger, this
Agreement, the Stockholder Agreement or the transactions contemplated by this
Agreement or the Stockholder Agreement.
ARTICLE VI
Covenants
SECTION 6.01. Conduct of Business. During the period from the
date of this Agreement to the Effective Time or termination of this Agreement
pursuant to Section 9.01 hereof, except as otherwise contemplated hereby or to
the extent that Parent shall otherwise consent in writing, the Company shall
carry on its business in the ordinary course consistent with the manner as
heretofore conducted and, to the extent consistent therewith, use reasonable
efforts to preserve intact its current business organization, keep available the
services of its current officers and employees and preserve its relationships
with customers, suppliers, licensors, licensees, distributors and others having
significant business dealings with it. Without limiting the generality of the
foregoing, during the period from the date of this Agreement to the Effective
Time, the Company shall not (except as expressly contemplated or permitted by
this Agreement, or to the extent that Parent shall otherwise consent in
writing):
(i) (x) declare, set aside or pay any dividends on, or make
any other distributions in respect of, any of its capital stock, (y)
split, combine or reclassify
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any of its capital stock or issue or authorize the issuance of any
other securities in respect of, in lieu of or in substitution for
Shares of its capital stock, or (z) purchase, redeem or otherwise
acquire any Shares of capital stock of the Company or any other
securities thereof or any rights, warrants or options to acquire any
such shares or other securities;
(ii) issue, deliver, sell, pledge or otherwise encumber any
shares of its capital stock, any other voting securities or any
securities convertible into, or any rights, warrants or options to
acquire, any such shares, voting securities or convertible securities
(other than the issuance of Shares upon the exercise of Company Stock
Options or warrants to purchase Shares outstanding on the date of this
Agreement in accordance with their present terms) or as provided for
herein;
(iii) amend its Certificate of Incorporation or By-laws or
other comparable charter or organizational documents;
(iv) (x) acquire or agree to acquire (A) by merging or
consolidating with, or by purchasing a substantial portion of the
assets of, or by any other manner, any business or any corporation,
partnership, joint venture, association or other business organization
or division therefor or (B) except as set forth on Schedule 6.01(iv),
any assets that are material, individually or in the aggregate, to the
Company, except purchases of inventory in the ordinary course of
business consistent with past practice; or (y) exercise its options to
acquire units of Prism Ophthalmics, L.L.C. ("Prism"), or materially
amend, modify or otherwise alter the terms of such option, or increase
its ownership or control of Prism, through the purchase of equity
securities, any contract or other agreement or otherwise;
(v) sell, lease, license, mortgage or otherwise encumber or
subject to any Lien or otherwise dispose of any of its properties or
assets, except sales of inventory or sales or licenses of immaterial
assets, in each case in the ordinary course of business consistent with
past practice;
(vi) (y) incur any indebtedness for borrowed money or
guarantee any such indebtedness of another person,
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issue or sell any debt securities or warrants or other rights to
acquire any debt securities of the Company, guarantee any debt
securities of another person, enter into any "keep well" or other
agreement to maintain any financial statement condition of another
person or enter into any arrangement having the economic effect of any
of the foregoing, except for short-term borrowings incurred in the
ordinary course of business consistent with past practice, or (z) make
any loans, advances (other than to employees of the Company in the
ordinary course of business) or capital contributions to, or
investments in, any other person;
(vii) except for the items listed on Schedule 6.01(vii), make
or agree to make any new capital expenditure or expenditures with
respect to property, plant or equipment which, individually, is in
excess of $50,000 or, in the aggregate, are in excess of $200,000;
(viii) make any material tax election or settle or compromise
any material income tax liability;
(ix) pay, discharge, settle or satisfy any claims,
liabilities or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than the payment, discharge or
satisfaction, in the ordinary course of business consistent with past
practice or in accordance with their terms, of liabilities reflected or
reserved against in, or contemplated by, the most recent consolidated
financial statements (or the notes thereto) of the Company included in
the Filed SEC Documents or incurred thereafter in the ordinary course
of business consistent with past practice, or waive any material
benefits of, or agree to modify in any material respect, any
confidentiality, standstill or similar agreements to which the Company
is a party;
(x) except in the ordinary course of business, modify,
amend or terminate any material contract or agreement to which the
Company is a party, or waive, release or assign any material rights or
claims;
(xi) enter into any contracts, agreements, arrangements or
understandings relating to the distribution, sale or marketing by third
parties of the Company's products or products licensed by the Company;
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(xii) except as required to comply with applicable law, (A)
adopt, enter into, terminate or amend any Benefit Plan or other
arrangement for the benefit or welfare of any director, officer or
current or former employee, (B) except as set forth on Schedule
6.01(xii), increase in any manner the compensation or fringe benefits
of, or pay any bonus to, any director, officer or employee (except for
normal increases or bonuses, including under the Management Incentive
Compensation Plan, in the ordinary course of business consistent with
past practice), (C) pay any benefit not provided for under any Benefit
Plan, (D) except as permitted in clause (B), grant any awards under any
bonus, incentive, performance or other compensation plan or arrangement
or Benefit Plan (including the grant of stock options, stock
appreciation rights, stock based or stock related awards, performance
units or restricted stock, or the removal of existing restrictions in
any Benefit Plans or agreement or awards made thereunder) or (E) take
any action other than in the ordinary course of business to fund or in
any other way secure the payment of compensation or benefits under any
employee plan, agreement, contract or arrangement or Benefit Plan; or
(xiii) authorize any of, or commit or agree to take any of,
the foregoing actions.
SECTION 6.02. No Solicitation. (a) The Company shall, and
shall direct and use reasonable efforts to cause its officers, directors,
employees, representatives and agents to, immediately cease any discussions or
negotiations with any parties other than Parent and Sub that may be ongoing with
respect to a Takeover Proposal (as hereinafter defined). The Company shall not,
and shall not authorize or permit any of its officers, directors or employees or
any investment banker, financial advisor, attorney, accountant or other
representative retained by it to, directly or indirectly, (i) solicit, initiate
or encourage (including by way of furnishing information), 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 or
(ii) participate in any discussions or negotiations regarding any Takeover
Proposal; provided, however, that if, at any time prior to the acceptance for
payment of Shares pursuant to and subject to the conditions (including the
Minimum Condition) of the Offer, the Board of Directors of the Company (or its
Special Committee)
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determines in good faith, after consultation with outside counsel, that failure
to do so would create a substantial risk of liability for breach of its
fiduciary duties to the Company's stockholders under applicable law, the Company
may, in response to a Takeover Proposal that was unsolicited or that did not
otherwise result from a breach of this Section 6.02(a), and subject to
compliance with Section 6.02(c), (x) furnish information with respect to the
Company to any person pursuant to a customary and reasonable confidentiality
agreement and (y) participate in negotiations regarding such Takeover Proposal.
Without limiting the foregoing, it is understood that any violation of the
restrictions set forth in the preceding sentence by any director or officer of
the Company or any investment banker, financial advisor, attorney, accountant or
other representative of the Company's, acting on behalf of the Company, shall be
deemed to be a breach of this Section 6.02(a) by the Company. For purposes of
this Agreement, "Takeover Proposal" means any proposal or offer from any person
relating to any direct or indirect acquisition or purchase of 20% or more of the
assets of the Company or 20% or more of any class of outstanding equity
securities of the Company, any tender offer or exchange offer that if
consummated would result in any person beneficially owning 20% or more of any
class of equity securities of the Company or any merger, consolidation, business
combination, sale of substantially all the assets, recapitalization,
liquidation, dissolution or similar transaction involving the Company, other
than the transactions contemplated by this Agreement.
(b) Neither the Board of Directors of the Company nor any
committee thereof shall (i) withdraw or modify, or propose to withdraw or
modify, in a manner adverse to Parent, the approval or recommendation by such
Board of Directors or such committee of the Offer, this Agreement or the Merger,
(ii) approve or recommend, or propose to approve or recommend, any Takeover
Proposal or (iii) cause the Company to enter into any letter of intent,
agreement in principle, acquisition agreement or other agreement (an
"Acquisition Agreement") with respect to any Takeover Proposal unless the Board
of Directors of the Company shall have terminated this Agreement pursuant to
Section 9.01(d).
(c) In addition to the obligations of the Company set forth in
paragraphs (a) and (b) of this Section 6.02, the Company shall immediately
advise Parent orally and in writing of any request for information or of any
Takeover Proposal or any inquiry regarding the making of a Takeover
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Proposal, the material terms and conditions of such request, Takeover Proposal
or inquiry and the identity of the person making such request, Takeover Proposal
or inquiry. The Company will, to the extent reasonably practicable, keep Parent
fully informed of the status and details (including amendments or proposed
amendments) of any such request, Takeover Proposal or inquiry.
(d) Nothing contained in this Section 6.02 shall prohibit the
Company from at any time taking and disclosing to its stockholders a position
contemplated by Rule 14e-2(a) promulgated under the Exchange Act or from making
any disclosure to the Company's stockholders if, in the good faith judgment of
the Board of Directors of the Company (or its Special Committee), after
consultation with outside counsel, failure so to disclose would create a
substantial risk of liability for breach of its fiduciary duties to the
Company's stockholders under applicable law; provided, however, neither the
Company nor its Board of Directors nor any committee thereof shall, except as
permitted by Section 6.02(b), withdraw or modify, or propose to withdraw or
modify, its position with respect to the Offer, the Merger or this Agreement or
approve or recommend, or propose to approve or recommend, a Takeover Proposal;
provided, further, that the taking of a position by the Company pursuant to Rule
14e-2(a)(2) or (3) of the Exchange Act in respect of a Takeover Proposal shall
not be deemed a withdrawal, a modification or a proposal to do either, of its
position with respect to the Offer or the Merger for purposes hereof.
SECTION 6.03. Certain Tax Matters. From the date hereof until
the Effective Time, (i) the Company will file all tax returns and reports
("Post-Signing Returns") required to be filed; (ii) the Company will timely pay
all taxes shown as due and payable on the Company's Post-Signing Returns that
are so filed; (iii) the Company will make provision for all taxes payable by the
Company for which no Post-Signing Return is due prior to the Effective Time; and
(iv) the Company will promptly notify Parent of any action, suit, proceeding,
claim or audit pending against or with respect to the Company in respect of any
tax where there is a reasonable possibility of a determination or decision which
would reasonably be expected to have a significant adverse effect on the
Company's tax liabilities or tax attributes.
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SECTION 6.04. Other Actions. The Company shall not take any
action that could reasonably be expected to result in (i) any of the
representations and warranties of the Company set forth in this Agreement that
are qualified as to materiality becoming untrue, (ii) any of such
representations and warranties that are not so qualified becoming untrue in any
material respect or (iii) any of the Offer Conditions not being satisfied
(subject to the Company's right to take actions specifically permitted by
Section 6.02 or 9.01).
SECTION 6.05. Advice of Changes; Filings. The Company shall
confer with Parent on a regular and frequent basis as reasonably requested by
Parent, report on operational matters and promptly advise Parent orally and, if
requested by Parent, in writing of any material adverse change with respect to
the Company. The Company shall promptly provide to Parent (or its counsel)
copies of all filings made by the Company with any Governmental Entity in
connection with this Agreement and the transactions contemplated hereby.
ARTICLE VII
Additional Agreements
SECTION 7.01. Stockholder Approval; Preparation of Proxy
Statement. (a) If the Company Stockholder Approval is required by law, the
Company will, as soon as practicable following the acceptance for payment of,
and payment for, Shares by Sub pursuant to and subject to the conditions
(including the Minimum Condition) of the Offer, duly call, give notice of,
convene and hold a meeting of its stockholders (the "Stockholders Meeting") for
the purpose of obtaining the Company Stockholder Approval. The Company will,
through its Board of Directors, recommend to its stockholders that the Company
Stockholder Approval be given. Notwithstanding the foregoing, if Sub or any
other subsidiary of Parent shall acquire at least 90% of the outstanding Shares,
the parties shall, at the request of Parent, take all necessary and appropriate
action to cause the Merger to become effective as soon as practicable after the
expiration of the Offer without a Stockholders Meeting in accordance with
Section 253 of the DGCL.
(b) If the Company Stockholder Approval is required by law,
the Company will, at Parent's request, as
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soon as practicable following the expiration of the Offer, prepare and file a
preliminary Proxy Statement with the SEC and will use its best efforts to
respond to any comments of the SEC or its staff and to cause the Proxy Statement
to be mailed to the Company's stockholders as promptly as practicable after
responding to all such comments to the satisfaction of the staff. The Company
will notify Parent promptly of the receipt of any comments from the SEC or its
staff and of any request by the SEC or its staff for amendments or supplements
to the Proxy Statement or for additional information and will supply Parent with
copies of all correspondence between the Company or any of its representatives,
on the one hand, and the SEC or its staff, on the other hand, with respect to
the Proxy Statement or the Merger. If at any time prior to the Stockholders
Meeting there shall occur any event that should be set forth in an amendment or
supplement to the Proxy Statement, the Company will promptly prepare and mail to
its stockholders such an amendment or supplement. The Company will not mail any
Proxy Statement, or any amendment or supplement thereto, to which Parent
reasonably objects; provided, that Parent shall identify its objections and
fully cooperate with the Company to create a mutually satisfactory Proxy
Statement.
(c) Parent agrees to cause all Shares purchased pursuant to
the Offer and all other Shares owned by Parent or any subsidiary of Parent to be
voted in favor of the Company Stockholder Approval.
SECTION 7.02. Access to Information; Confidentiality. The
Company shall afford to Parent, and to Parent's officers, employees,
accountants, counsel, financial advisers and other representatives, reasonable
access during normal business hours during the period prior to the Effective
Time or termination of this Agreement pursuant to Section 9.01 hereof to all
their respective properties, books, contracts, commitments, personnel and
records and, during such period, the Company shall furnish promptly to Parent
(a) a copy of each report, schedule, registration statement and other document
filed by it during such period pursuant to the requirements of Federal or state
securities laws and (b) all other information concerning its business,
properties and personnel as Parent may reasonably request. Except as required by
law, Parent will hold, and will cause its officers, employees, accountants,
counsel, financial advisers and other representatives and affiliates to hold,
any and all information received from the Company, directly or indirectly, in
confidence, according to the
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terms of the confidentiality agreement dated as of November 27, 1995, among the
Company, Parent and Xxxxxxx & Xxxxxxx Vision Products, as amended on August 1,
1996 and January 31, 1997 (as amended, the "Confidentiality Agreement").
SECTION 7.03. Reasonable Efforts; Notification. (a) Upon the
terms and subject to the conditions set forth in this Agreement, each of the
parties agrees to 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 Offer and
the Merger, and the other transactions contemplated by this Agreement, including
(i) the obtaining of all necessary actions or nonactions, waivers, consents and
approvals from Governmental Entities and the making of all necessary
registrations and filings (including filings with Governmental Entities, if any)
and the taking of all reasonable steps as may be necessary to obtain an approval
or waiver from, or to avoid an action or proceeding by, any Governmental Entity,
(ii) the obtaining of all necessary consents, approvals or waivers from this
parties, (iii) the defending of any lawsuits or other legal proceedings, whether
judicial or administrative, challenging this Agreement or the consummation of
any of the transactions contemplated by this Agreement, including seeking to
have any stay or temporary restraining order entered by any court or other
Governmental Entity vacated or reversed and (iv) the execution and delivery of
any additional instruments necessary to consummate the transactions contemplated
by, and to fully carry out the purposes of, this Agreement. In connection with
and without limiting the foregoing, the Company and its Board of Directors shall
(i) take all action necessary to ensure that no state takeover statute or
similar statute or regulation is or becomes applicable to the Offer, the Merger,
this Agreement, the Stockholder Agreement or any of the other transactions
contemplated by this Agreement or the Stockholder Agreement and (ii) if any
state takeover statute or similar statute or regulation becomes applicable to
the Offer, the Merger, this Agreement, the Stockholder Agreement or any other
transaction contemplated by this Agreement or the Stockholder Agreement, at
Parent's sole cost take all action reasonably necessary to ensure that the
Offer, the Merger and the other transactions contemplated by this Agreement may
be consummated as promptly as practicable on the terms
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contemplated by this Agreement and otherwise to minimize the effect of such
statute or regulation on the Offer, the Merger, this Agreement, the Stockholder
Agreement and the other transactions contemplated by this Agreement or the
Stockholder Agreement. Nothing in this Agreement shall be deemed to require
Parent to dispose of any significant asset or collection of assets.
(b) The Company shall give prompt notice to Parent of (i) any
representation or warranty made by it contained in this Agreement that it
qualified as to materiality becoming untrue or inaccurate in any respect or any
such representation or warranty that is not so qualified becoming untrue or
inaccurate in any material respect or (ii) the failure by it to comply with or
satisfy in any material respect any covenant, condition or agreement to be
compiled with or satisfied by it under this Agreement; provided, however, that
no such notification shall affect the representations, warranties, covenants or
agreement of the parties or the conditions to the obligations of the parties
under this Agreement.
SECTION 7.04. Stock Option Plans and Warrants. (a) As soon as
practicable following the date of this Agreement but in no event later than the
consummation of the Offer, the Company (or, if appropriate, the Board of
Directors of the Company or any committee administering the Stock Option Plans
(as defined below)) shall (including by adopting resolutions or taking any other
actions) ensure that, except as set forth on Schedule 7.04(a), each outstanding
option to purchase Shares (a "Company Stock Option") heretofore granted under
any stock option, stock appreciation rights or stock purchase plan, program or
arrangement of the Company (collectively, the "Stock Option Plans") and each
outstanding warrant to purchase Shares (a "Warrant") in each case outstanding
immediately prior to the consummation of the Offer, whether or not then
exercisable, shall either (x) be cancelled immediately prior to the Effective
Time in exchange for an amount in cash, payable at the time of such
cancellation, equal to the product of (y) the number of Shares subject to such
Company Stock Option or Warrant immediately prior to the Effective Time and (z)
the excess of the price per Share to be paid in the Offer over the per Share
exercise price of such Company Stock Option or Warrant (the "Net Amount") or (y)
be converted immediately prior to the Effective Time into the right solely to
receive the Net Amount; provided, however, that no such cash payment has been
made. The Company (or,
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if appropriate, the Board of Directors of the Company or any committee
administering the Stock Option Plans) shall use its reasonable best efforts to
ensure that immediately prior to the Effective Time the Company Stock Options
and Warrants set forth on Schedule 7.04(a) are cancelled or converted as set
forth above. The Company shall not make, or agree to make, any payment of any
kind to any holder of a Company Stock Option or a Warrant (except for the
payment described above) without the consent of Parent (which consent will not
be unreasonably withheld).
(b) Subject to Section 7.04(a), all Stock Option Plans shall
terminate as of the Effective Time and the provisions in any other Benefit Plan
providing for the issuance, transfer or grant of any capital stock of the
Company or any interest in respect of any capital stock of the Company shall be
deleted as of the Effective Time. The Company shall ensure that following the
consummation of the Offer, other than with respect to the Company Stock Options
and Warrants set forth on Schedule 7.04(a), no holder of a Company Stock Option
or Warrant or any participant in any Stock Option Plan shall have any right
thereunder to acquire any capital stock of the Company, Parent or the Surviving
Corporation, and the Company shall use its reasonable best efforts to ensure
that following the Effective Time, no holder of a Company Stock Option or
Warrant set forth on Schedule 7.04(a) or any participant in any Stock Option
Plan shall have any right thereunder to acquire any capital stock of the
Company, Parent or the Surviving Corporation.
(c) The Surviving Corporation shall continue to be obligated
to pay the Net Amount to holders of any Company Stock Options or Warrants
converted in accordance with clause (y) of Section 7.04(a).
SECTION 7.05. Indemnification, Exculpation and Insurance. (a)
Parent agrees that all rights to indemnification and exculpation (including the
advancement of expenses) from liabilities for acts or omissions occurring at or
prior to the Effective Time (including with respect to the transactions
contemplated by this Agreement) existing now or at the Effective Time in favor
of the current or former directors or officers of the Company as provided in its
Certificate of Incorporation, its By-laws (each as in effect on the date hereof)
and reasonable indemnification agreements shall be assumed by the Surviving
Corporation in the Merger, without further action, as of the Effective Time and
shall survive the Merger and shall
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continue in full force and effect without amendment, modification or repeal in
accordance with their terms for a period of not less than six years after the
Effective Time; provided however, that if any claims are asserted or made within
such six year period, all rights to indemnification (and to advancement of
expenses) hereunder in respect of any such claims shall continue, without
diminution, until disposition of any and all such claims.
(b) In the event that Parent, the Surviving Corporation or any
of their successors or assigns (i) consolidates with or merges into any other
person and is not the continuing or surviving corporation or entity of such
consolidation or merger or (ii) transfers or conveys all or substantially all of
its properties and assets to any person, then, and in each such case, proper
provision will be made so that the successors and assigns of Parent or the
Surviving Corporation, as the case may be, shall assume the obligations set
forth in this Section 7.05. In the event the Surviving Corporation transfers any
material portion of its assets, in a single transaction or in a series of
transactions, Parent will either guarantee the indemnification obligations
referred to in Section 7.05(a) or take such other action to insure that the
ability of the Surviving Corporation, legal and financial, to satisfy such
indemnification obligations will not be diminished in any material respect.
(c) For six years after the Effective Time, Parent shall,
unless Parent agrees in writing to guarantee the indemnification obligations set
forth in Section 7.05(a), provide officers' and directors' liability insurance
in respect of acts or omissions occurring at or prior to the Effective Time,
including but not limited to the transactions contemplated by this Agreement,
covering each person currently covered by the Company's officers' and directors'
liability insurance policy, or who becomes covered by such policy prior to the
Effective Time, on terms with respect to coverage and amount no less favorable
than those of such policy in effect on the date hereof, provided that in
satisfying its obligation under this Section Parent shall not be obligated to
pay premiums in excess of 200% of the amount per annum the Company paid in its
last full fiscal year (which the Company represents to be $129,000), and
provided further that Parent shall nevertheless be obligated to provide such
coverage as may be obtained for such 200% amount.
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(d) The provisions of this Section 7.05 (i) are intended to be
for the benefit of, and will be enforceable by, each indemnified party, his or
her heirs and his or her representatives and (ii) are in addition to, and not in
substitution for, any other rights to indemnification or contribution that any
such person may have by contract or otherwise.
SECTION 7.06. Directors. Promptly upon the acceptance for
payment of, and payment for, any Shares by Sub pursuant to and subject to the
conditions (including the Minimum Condition) of the Offer, Sub shall be entitled
to designate such number of directors on the Board of Directors of the Company
as will give Sub, subject to compliance with Section 14(f) of the Exchange Act,
a majority of such directors, and the Company shall, at such time, cause Sub's
designees to be so elected by its existing Board of Directors. Subject to
applicable law, the Company shall take all action requested by Parent necessary
to effect any such election, including mailing to its stockholders the
Information Statement containing the information required by Section 14(f) of
the Exchange Act and Rule 14f-1 promulgated thereunder, and the Company agrees
to make such mailing with the mailing of the Schedule 14D-9 (provided that Sub
shall have provided to the Company on a timely basis in writing all information
required to be included in the Information Statement with respect to Sub's
designees). In connection with the foregoing, the Company will promptly, at the
option of Parent, either increase the size of the Company's Board of Directors
and/or obtain the resignation of such number of its current directors as is
necessary to enable Sub's designees to be elected or appointed to, and to
constitute a majority of, the Company's Board of Directors as provided above.
SECTION 7.07. Fees and Expenses. (a) Except as otherwise
provided herein and as provided below in this Section 7.07, all fees and
expenses incurred in connection with the Offer, the Merger, this Agreement and
the transactions contemplated by this Agreement shall be paid by the party
incurring such fees or expenses, whether or not the Offer or the Merger is
consummated, except that printing and mailing costs and expenses shall be shared
equally by Parent and the Company.
(b) In the event that this Agreement is terminated by any
party hereto pursuant to Section 9.01(d), the Company shall promptly, but in no
event later than two days after
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the date of such termination, pay Parent a fee equal to $6.25 million in
immediately available funds (the "Termination Fee") and all Expenses (as defined
below). If, at the time of any other termination of this Agreement (other than
pursuant to Section 9.01(a) or Section 9.01(b)(ii) or by the Company pursuant to
Section 9.01(e)), a Takeover Proposal shall have been made (other than a
Takeover Proposal made solely to a Stockholder (as defined in the Stockholder
Agreement) unless and until such Takeover Proposal becomes known to the Company
(other than knowledge imputed to the Company by virtue of a direct relationship
of such Stockholder with an officer or director of the Company) or becomes
publicly known) and prior to December 31, 1997 the Company shall either (x)
consummate a Trigger Takeover Proposal or (y) enter into an Acquisition
Agreement providing for a Trigger Takeover Proposal, then the Company shall pay
the Termination Fee and all Expenses in the case of clause (x) concurrently with
the consummation of such Trigger Takeover Proposal or in the case of clause (y)
concurrently with the consummation of the transaction subject to such
Acquisition Agreement (whether or not such transaction is consummated prior to
December 31, 1997); provided, however, that no Termination Fee and no Expenses
will be payable pursuant to this sentence if the Offer is terminated prior to
its scheduled expiration date (without giving effect to any voluntary or
required extensions thereof) or if at the time this Agreement is terminated, the
Minimum Condition shall have been satisfied but any of the other conditions to
the Offer shall not have been satisfied. The Company acknowledges that the
agreements contained in this Section 7.07(b) are an integral part of the
transactions contemplated by this Agreement, and that, without these agreements,
Parent would not enter into this Agreement; accordingly, if the Company fails
promptly to pay the amount due pursuant to this Section 7.07(b), and, in order
to obtain such payment, Parent commences a suit which results in a judgment
against the Company for the fee set forth in this Section 7.07(b), the Company
shall pay to Parent its reasonable costs and expenses (including attorneys' fees
and expenses) in connection with such suit, together with interest on the amount
of the fee at the prime rate of Chase Manhattan Bank, N.A. in effect on the date
such payment was required to be made. A "Trigger Takeover Proposal" shall have
the meaning assigned to the term "Takeover Proposal" in Section 6.02(a) except
that references to "20%" in such definition shall be deemed to be references to
"40%" and a Trigger Takeover Proposal may only be in the form of a single
transaction or a series of
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related transactions. "Expenses" shall mean all out-of-pocket expenses incurred
by Parent and Sub in connection with this Agreement, the Stockholder Agreement
and the transactions contemplated hereby and thereby in an amount not to exceed
$500,000, payable in immediately available funds.
SECTION 7.08. Public Announcements. Parent and Sub, on the one
hand, and the Company, on the other hand, will consult with each other before
issuing, and provide each other the opportunity to review and comment upon, any
press release or other public statements with respect to the transactions
contemplated by this Agreement, including the Offer and the Merger, 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 or national securities quotation system. The parties agree that the
initial press release to be issued with respect to the transactions contemplated
by this Agreement shall be in the form heretofore agreed to by the parties.
SECTION 7.09. Continuation of Benefits. Parent shall cause the
Surviving Corporation to take such actions as are necessary so that, for a
period of not less than one year after the Effective Time, employees of the
Company who continue their employment after the Effective Time will be provided
employee benefits which in the aggregate are at least generally comparable in
the aggregate to those provided to such employees as of the date hereof. It is
Parent's current intention that, following the first anniversary of the
Effective Time, Parent will provide employee benefit plans, programs,
arrangements and policies for the benefit of such employees of the Company which
are generally comparable in the aggregate to the employee benefit plans,
programs, arrangements and policies for the benefit of other similarly situated
employees of Parent and its subsidiaries.
SECTION 7.10. Stop Transfer. The Company shall not register
the transfer of any certificate representing any Subject Shares (as defined in
the Stockholder Agreement), unless such transfer is made to Parent or Sub or
otherwise in compliance with the Stockholder Agreement. The Company will
inscribe upon any certificates representing Subject Shares tendered by a
Stockholder (as defined in the Stockholder Agreement) for such purpose the
following
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legend: "The shares of Common Stock, $.001 par value of Innotech, Inc.
represented by this certificate are subject to a Stockholders Agreement dated as
of February 10, 1997, and may not be sold or otherwise transferred, except in
accordance therewith. Copies of such Agreement may be obtained at the principal
executive offices of Innotech, Inc."
ARTICLE VIII
Conditions
SECTION 8.01. Conditions to Each Party's Obligation To Effect
the Merger. The respective obligation of each party to effect the Merger shall
be subject to the satisfaction prior to the Closing Date of the following
conditions:
(a) Company Stockholder Approval. If required by applicable
law, the Company Stockholder Approval shall have been obtained;
provided that Parent and Sub shall vote all their Shares in favor of
the Merger.
(b) No Injunctions or Restraints. No statute, rule,
regulation, executive order, decree, temporary restraining order,
preliminary or permanent injunction or other order issued by any court
of competent jurisdiction or other Governmental Entity or other legal
restraint or prohibition preventing the consummation of the Merger
shall be in effect; provided, however, that each of the parties shall
have used reasonable efforts to prevent the entry of any such
injunction or other order and to appeal as promptly as possible any
injunction or other order that may be entered.
(c) Purchase of Shares. Sub shall have previously accepted for
payment and paid for Shares pursuant to and subject to the conditions
(including the Minimum Condition) of the Offer.
(d) HSR Act. Any waiting period (and any extension thereof)
applicable to the consummation of the Merger under the HSR Act shall
have expired or been terminated.
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ARTICLE IX
Termination and Amendment
SECTION 9.01. Termination. This Agreement may be terminated at
any time prior to the Effective Time, whether before or after approval of the
terms of this Agreement by the stockholders of the Company:
(a) by mutual written consent of Parent and the Company;
(b) by either Parent or the Company:
(i) if (x) as a result of the failure of any of the
Offer Conditions the Offer shall have terminated or expired in
accordance with its terms without Sub having accepted for
payment Shares pursuant to and subject to the conditions
(including the Minimum Condition) of the Offer or (y) Sub
shall not have accepted for payment Shares pursuant to the
Offer prior to May 31, 1997; provided, however, that the right
to terminate this Agreement pursuant to this Section
9.01(b)(i) shall not be available to any party whose failure
to perform any of its obligations under this Agreement results
in the failure of any such condition or if the failure of such
condition results from facts or circumstances that constitute
a material breach of representation or warranty under this
Agreement by such party unless such breach was not willful or
intentional; or
(ii) if any Governmental Entity shall have issued an
order, decree or ruling or taken any other action permanently
enjoining, restraining or otherwise prohibiting the acceptance
for payment of, or payment for, Shares pursuant to the Offer
or the Merger and such order, decree or ruling or other action
shall have become final and nonappealable;
(c) by Parent or Sub prior to Sub's obligation to accept
Shares for payment pursuant to the Offer in the event of a breach by
the Company of any representation, warranty, covenant or other
agreement contained in this Agreement which (i) would give rise to the
failure of a condition set forth in paragraph (d) or (e) of
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Exhibit A and (ii) cannot be or has not been cured within 20 days after
the giving of written notice to the Company;
(d) by either Parent or the Company if, prior to the
obligation of Sub to accept Shares for payment pursuant to the Offer,
the Board of Directors of the Company determines that a Takeover
Proposal constitutes a Superior Proposal (as defined below); provided,
however, that the Company may not terminate this Agreement pursuant to
this Section 9.01(d) unless and until five business days have elapsed
following delivery to Parent of a written notice of such determination
by the Board of Directors of the Company and during such five business
day period the Company (i) informs Parent of the terms and conditions
of the Takeover Proposal and the identity of the person making the
Takeover Proposal and (ii) otherwise cooperates with Parent with
respect thereto (subject, in the case of this clause (ii), to the
condition that the Board of Directors of the Company shall not be
required to take any action that it believes, after consultation with
outside legal counsel, would present a substantial risk of liability
for violating its obligations to the Company or the Company's
stockholders under applicable law) with the intent of enabling Parent
to agree to a modification of the terms and conditions of this
Agreement so that the transactions contemplated hereby may be effected;
provided, further, that the Company may not terminate this Agreement
pursuant to this Section 9.01(d) unless at the end of such five
business day period the Board of Directors of the Company continues to
believe that the Takeover Proposal constitutes a Superior Proposal and
no later than two days thereafter the Company pays to Parent the amount
specified under Section 7.07(b) pursuant to the terms of such Section
7.07(b); and provided, further, that in the event the determination of
the Board of Directors of the Company that a Takeover Proposal
constitutes a Superior Proposal is made less than ten business days
prior to the scheduled expiration of the Offer, Parent and Sub will
either (x) reduce the period described in the first proviso of this
Section 9.01(d) or (y) extend the Offer, in either case such that the
period described in the first proviso of this Section 9.01(d) will end
no later than five business days prior to the expiration of the Offer.
For purposes of this Agreement, a "Superior Proposal" means any bona
fide
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proposal made by a third party to acquire, directly or indirectly, for
consideration consisting of cash and/or securities, more than 50% of
the voting power of the Shares of or all or substantially all the
assets of the Company and otherwise on terms which the Board of
Directors of the Company determines in its good faith judgment (based
on the written opinion of a financial advisor of nationally recognized
reputation (which opinion shall be provided to Parent)) to be more
favorable to the Company's stockholders than the Offer and the Merger
and for which financing, to the extent required, is then committed or
which, in the good faith judgment of the Board of Directors of the
Company, is capable of being obtained by such third party; or
(e) by the Company, if Sub or Parent shall have (A) failed to
commence the Offer within five business days of the date hereof, (B)
failed to pay for Shares pursuant to the Offer in accordance with
Section 1.01(a) hereof or (C) breached in any material respect any of
their respective representations, warranties, other covenants or other
agreements contained in this Agreement, which breach or failure to
perform in respect of clause (C) is incapable of being cured or has not
been cured within 20 days after the giving of written notice to Parent
or Sub, as applicable, except, in any case under clause (C), such
breaches and failures which are not reasonably likely to affect
adversely Parent's or Sub's ability to complete the Offer or the Merger
subject to the terms and conditions of this Agreement.
SECTION 9.02. Effect of Termination. In the event of a
termination of this Agreement by either the Company or Parent as provided in
Section 9.01, this Agreement shall forthwith become void and there shall be no
liability or obligation on the part of Parent, Sub or the Company or their
respective officers or directors, except with respect to the last sentence of
Section 1.02(c), Section 5.06, the last sentence of Section 7.02, Section 7.07,
Section 9.01, this Section 9.02 and Article X; provided, however, that nothing
herein shall relieve any party for liability for any breach hereof.
SECTION 9.03. Amendment. This Agreement may be amended by the
parties hereto, by action taken or authorized by their respective Boards of
Directors, at any time before or after obtaining the Company Stockholder
Approval (if
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required by law), but, after any such approval, no amendment shall be made which
by law requires further approval by such shareholders without obtaining such
further approval. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto.
SECTION 9.04. Extension; Waiver. At any time prior to the
Effective Time, the parties hereto, by action taken or authorized by their
respective Boards of Directors, may, to the extent legally allowed, (i) extend
the time for the performance of any of the obligations or other acts of the
other parties hereto, (ii) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered pursuant hereto or
(iii) subject to Section 9.03, waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in a written
instrument signed on behalf of such party. The failure of any party to this
Agreement to assert any of its rights under this Agreement or otherwise shall
not constitute a waiver of those rights.
SECTION 9.05. Procedure for Termination, Amendment, Extension
or Waiver. A termination of this Agreement pursuant to Section 9.01, an
amendment of this Agreement pursuant to Section 9.03 or an extension or waiver
pursuant to Section 9.04 shall, in order to be effective, require in the case of
Parent, Sub or the Company, action by its Board of Directors or the duly
authorized designee of its Board of Directors; provided, however, that in the
event that Sub's designees are appointed or elected to the Board of Directors of
the Company as provided in Section 7.06, after the acceptance for payment and
payment of Shares pursuant to and subject to the Conditions (including the
Minimum Condition) of the Offer and prior to the Effective Time, the affirmative
vote of a majority of the directors of the Company that were not designated by
Parent or Sub shall be required by the Company to (i) amend or terminate this
Agreement by the Company, (ii) exercise or waive any of the Company's rights or
remedies under this Agreement, (iii) extend the time for performance of Parent's
and Sub's respective obligations under this Agreement or (iv) take any action to
amend or otherwise modify the Company's Certificate of Incorporation or By-laws.
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ARTICLE X
Miscellaneous
SECTION 10.01. Nonsurvival of Representations, Warranties and
Agreements. None of the representations, warranties or covenants (subject to the
succeeding sentence) in this Agreement or in any instrument delivered pursuant
to this Agreement shall survive the Effective Time or, in the case of the
Company, shall survive the acceptance for payment of, and payment for, Shares by
Sub pursuant to the Offer. This Section 10.01 shall not limit any covenant or
agreement of the parties which by its terms contemplates performance after the
Effective Time of the Merger.
SECTION 10.02. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered personally,
telecopied (which is confirmed), sent by overnight courier (providing proof of
delivery) or mailed by registered or certified mail (return receipt requested)
to the parties at the following addresses (or at such other address for a party
as shall be specified by like notice):
(a) if to Parent or Sub, to
Xxxxxxx & Xxxxxxx
Xxx Xxxxxxx & Xxxxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: General Counsel
Telecopy No.: (000) 000-0000
with a copy to:
Cravath, Swaine & Xxxxx
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telecopy No.: (000) 000-0000
and
(b) if to the Company, to
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Innotech, Inc.
0000 Xxxxxxx Xxxx
Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxx, O.D.
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxxx, Calamari & Xxxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Telecopy No.: (000) 000-0000
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxx, Esq.
Telecopy No.: (000) 000-0000
SECTION 10.03. Interpretation. When a reference is made in
this Agreement to an Article or a Section, such reference shall be to an Article
or a Section of this Agreement unless otherwise indicated. The table of contents
and headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement.
Whenever the words "include", "includes" or "including" are used in this
Agreement, they shall be deemed to be followed by the words "without
limitation". The phrase "made available" in this Agreement shall mean that the
information referred to has been made available if requested by the party to
whom such information is to be made available. As used in this Agreement, the
term "subsidiary" of any person means another person, an amount of the voting
securities, other voting ownership or voting partnership interests of which is
sufficient to elect at least a majority of its Board of Directors or other
governing body (or, if there are no such voting interests, 50% or more of the
equity interests of which) is owned directly or indirectly by such first person.
As used in this Agreement, "material adverse change" or
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50
"material adverse effect" means, when used in connection with the Company, any
change or effect that, individually or in the aggregate with any such other
changes or effects, is materially adverse to the business, financial condition
or results of operations of the Company.
SECTION 10.04. Counterparts. This Agreement may be executed in
two or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when two or more counterparts have been
signed by each of the parties and delivered to the other parties, it being
understood that all parties need not sign the same counterpart.
SECTION 10.05. Entire Agreement; Third Party Beneficiaries.
This Agreement and the Confidentiality Agreement (including the documents and
the instruments referred to herein, but excluding Section 4 of the
Confidentiality Agreement which Section shall not survive the date hereof) (a)
constitute the entire agreement and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof, and (b) except as provided in Section 7.04, Section 7.05,
Section 7.09 and Articles II and III are not intended to confer upon any person
other than the parties hereto any rights or remedies hereunder.
SECTION 10.06. Governing Law. This Agreement shall be governed
and construed in accordance with the laws of the State of Delaware.
SECTION 10.07. Publicity. Except as otherwise required by law
or the rules of the Nasdaq National Market, for so long as this Agreement is in
effect, neither the Company nor Parent shall, or shall permit any of its
subsidiaries to, issue or cause the publication of any press release or other
public announcement with respect to the transactions contemplated by this
Agreement without the consent of the other party, which consent shall not be
unreasonably withheld.
SECTION 10.08. Assignment. Neither this Agreement nor any of
the rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties, except that Sub may assign, in its sole
discretion, any or all of its rights, interests and obligations hereunder to
Parent or to any
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direct or indirect wholly owned subsidiary of Parent. 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.
SECTION 10.09. 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 any of 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.
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IN WITNESS WHEREOF, Parent, Sub and the Company have caused
this Agreement to be signed by their respective officers thereunto duly
authorized as of the date first written above.
XXXXXXX & XXXXXXX,
by
_______________________
Name:
Title:
INO ACQUISITION CORP.,
by
_______________________
Name:
Title:
INNOTECH, INC.,
by
_______________________
Name:
Title:
58
EXHIBIT A
CONDITIONS OF THE OFFER
Notwithstanding any other term of the Offer, Sub shall not be
required to accept for payment or, subject to any applicable rules and
regulations of the SEC, including Rule 14e-1(c) under the Exchange Act (relating
to Sub's obligation to pay for or return tendered Shares after the termination
or withdrawal of the Offer), to pay for any Shares tendered pursuant to the
Offer unless (i) there shall have been validly tendered and not withdrawn prior
to the expiration of the Offer (x) such number of Shares that together with
Shares subject to the Stockholder Agreement that shall not have been tendered
would constitute a majority of the Shares (for purposes of this clause (x) only,
"Shares" shall be deemed to refer only to Shares outstanding on the date hereof)
and (y) such number of Shares that together with Shares subject to the
Stockholder Agreement that shall not have been tendered would constitute a
majority of the fully diluted Shares as of the date of determination (determined
on a fully diluted basis for all outstanding stock options and any other rights
to acquire Shares) (the conditions in (x) and (y) collectively, the "Minimum
Condition") and (ii) any waiting period under the HSR Act applicable to the
purchase of Shares pursuant to the Offer shall have expired or been terminated.
Furthermore, notwithstanding any other term of the Offer, Sub shall not be
required to accept for payment or, subject as aforesaid, to pay for any Shares
not theretofore accepted for payment or paid for, and may terminate the Offer
if, at any time on or after the date of this Agreement and before the acceptance
of such Shares for payment or the payment therefor, any of the following
conditions exists (other than as a result of any action or inaction of Parent or
any of its subsidiaries that constitutes a breach of this Agreement):
(a) there shall be instituted or pending by any person or
Governmental Entity any suit, action or proceeding (i) challenging the
acquisition by Parent or Sub of any Shares under the Offer or pursuant
to the Stockholder Agreement, seeking to restrain or prohibit the
making or consummation of the Offer or the Merger or the performance of
any of the other transactions contemplated by this Agreement or the
Stockholder Agreement (including the voting provision thereunder), or
seeking to obtain from the Company, Parent or Sub any damages in
connection with the aforesaid transactions that are material in
relation to the
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Company, (ii) seeking to prohibit or materially limit the ownership or
operation by the Company, Parent or any of their respective
subsidiaries of a material portion of the business or assets of the
Company or Parent and its subsidiaries, taken as a whole, or to compel
the Company or Parent to dispose of or hold separate any material
portion of the business or assets of the Company, or Parent and its
subsidiaries, taken as a whole, as a result of the Offer or any of the
other transactions contemplated by this Agreement or the Stockholder
Agreement, (iii) seeking to impose material limitations on the ability
of Parent or Sub to acquire or hold, or exercise full rights of
ownership of, any Shares to be accepted for payment pursuant to the
Offer or purchased under the Stockholder Agreement including, without
limitation, the right to vote such Shares on all matters properly
presented to the stockholders of the Company, (iv) seeking to prohibit
Parent or any of its subsidiaries from effectively controlling in any
material respect any material portion of the business or operations of
the Company or (v) which otherwise is reasonably likely to have a
material adverse effect on the Company;
(b) there shall be any statute, rule, regulation, judgment,
order or injunction enacted, entered, enforced, promulgated or deemed
applicable to the Offer or the Merger, or any other action shall be
taken by any Governmental Entity or court, other than the application
to the Offer or the Merger of applicable waiting periods under the HSR
Act, that is reasonably likely to result, directly or indirectly, in
any of the consequences referred to in clauses (i) through (v) of
paragraph (a) above; provided, however, that each of Parent and Sub
shall have used reasonable efforts to prevent the entry of any such
injunction or other court order and to appeal as promptly as possible
any injunction or other court order that may be entered;
(c) there shall have occurred any material adverse change with
respect to the Company;
(d) any of the representations and warranties of the Company
set forth in this Agreement (without giving effect to any materiality
or similar qualifications contained therein) shall not be true and
correct at the date of this Agreement and at the scheduled or extended
expiration of the Offer except (i) for changes
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specifically permitted by the Agreement and (ii) in any case where such
failing to be true and correct could not, in the aggregate, be
reasonably expected to have a material adverse effect on the Company;
(e) the Company shall have failed to perform in any material
respect any material obligation or to comply in any material respect
with any material agreement or covenant of the Company to be performed
or complied with by it under this Agreement; or
(f) this Agreement shall have been terminated in accordance
with its terms;
which, in the judgment of Sub in any such case, and regardless of the
circumstances (including any action or omission by Sub) giving rise to any such
condition, makes it inadvisable to proceed with such acceptance for payment or
payments.
The foregoing conditions in paragraphs (a) through (f) are for
the sole benefit of Sub and Parent and may, subject to the terms of this
Agreement, be waived by Sub and Parent in whole or in part at any time and from
time to time in their sole discretion. The failure by Parent or Sub at any time
to exercise any of the foregoing rights shall not be deemed a waiver of any such
right, the waiver of any such right with respect to particular facts and
circumstances shall not be deemed a waiver with respect to any other facts and
circumstances and each such right shall be deemed an ongoing right that may be
asserted at any time and from time to time.
