EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
BY AND AMONG
UROMED CORPORATION
PROVIDENCE MERGER CORPORATION
SSGI
THE STOCKHOLDERS OF SSGI
AND
XXXXXX FAMILY TRUST-1997
DATED AS OF MARCH 26, 2001
TABLE OF CONTENTS PAGE NO.
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1. CLOSING......................................................... 1
2. EFFECT OF MERGER................................................ 1
2.1. Surviving Corporation........................................... 1
2.2. Articles of Incorporation....................................... 1
2.3. By-Laws......................................................... 2
2.4. Directors and Officers.......................................... 2
2.5. Merger Consideration: Conversion
of Company Stock and Merger..................................... 2
2.6. Cancellation of Treasury Stock, Etc............................. 3
2.7. Dissenters' Rights.............................................. 3
2.8. Conversion of Merger Sub's Shares............................... 3
2.9. Discharge of Indebtedness and Liabilities....................... 3
2.10. Other Transactions at Closing................................... 4
3. PROCEDURES; ESCROWED SHARES..................................... 5
3.1. Certificates.................................................... 5
3.2. Exchange of Certificates........................................ 6
3.3 Escrowed Shares................................................. 6
3.4 Distributions................................................... 6
3.5 No Transfers.................................................... 6
3.6. No Fractional Shares............................................ 6
3.7. Termination of Rights........................................... 6
3.8. Abandoned Property.............................................. 7
3.9. Lost Certificates, Etc.......................................... 7
4. REGISTRATION OF UROMED COMMON STOCK............................. 7
5. REPRESENTATIONS AND WARRANTIES OF THE
COMPANY AND THE STOCKHOLDERS.................................... 7
5.1. Incorporation; Authority........................................ 7
5.2. Authorization and Enforceability................................ 7
5.3. Governmental and Other Third-Party Consents,
Non-Contravention, Etc.......................................... 8
5.4. Capitalization.................................................. 8
5.5. Qualification................................................... 8
5.6. Subsidiaries.................................................... 8
5.7. Financial Statements and Related Matters........................ 9
5.8. Absence of Certain Changes...................................... 9
5.9. Properties and Assets...........................................10
5.10. Intellectual Properties.........................................11
5.11. Indebtedness....................................................12
5.12. Absence of Undisclosed Liabilities..............................12
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5.13. Taxes...........................................................12
5.14. Employee Benefit Plans..........................................15
5.15. Safety and Environmental Matters................................17
5.16. Labor Relations.................................................18
5.17. Litigation......................................................19
5.18. Contracts.......................................................19
5.19. Potential Conflicts of Interest.................................20
5.20. Insurance.......................................................20
5.21. Bank Accounts, Signing Authority,
Powers of Attorney..............................................20
5.22. Suppliers and Customers.........................................21
5.23. Employment of Officers, Employees...............................21
5.24. Minute Books....................................................21
5.25. Brokers.........................................................21
5.26. Compliance with Other Agreements, Laws, Etc.....................21
5.27. Ownership of UroMed Stock.......................................22
5.28. Disclosure......................................................22
5.29. Expiration of Representations and Warranties....................22
6. REPRESENTATIONS AND WARRANTIES OF THE
STOCKHOLDERS AND THE TRUST......................................22
6.1. Authorization and Enforceability................................22
6.2. Governmental and Other Third-Party Consents,
Non-Contravention, Etc..........................................22
6.3. Title to Shares, Etc............................................23
6.4. Investment Representations......................................23
6.5. Disclosure......................................................23
6.6. Expiration of Representations and Warranties....................24
7. REPRESENTATIONS AND WARRANTIES OF
UROMED AND MERGER SUB...........................................25
7.1. Incorporation; Authority........................................25
7.2. Authorization and Enforceability................................25
7.3. Governmental and Other Third-Party Consents,
Non-Contravention, Etc..........................................25
7.4. Merger Sub......................................................25
7.5. Uro-Med's SEC Statements, Reports and
Documents.......................................................25
7.6. Brokers.........................................................25
7.7. Ownership of Company Stock......................................25
7.8. Disclosure......................................................26
7.9. Expiration of Representations and Warranties....................26
8. COVENANTS.......................................................26
8.1. Tax-Free Reorganization Treatment...............................26
8.2. Options.........................................................26
8.3. Further Assurances..............................................26
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9. OTHER COVENANTS.................................................27
9.1. Confidential Information........................................27
9.2. Non-Competition, Etc............................................27
9.3. Non-Solicitation of Employees, Etc..............................27
9.4. Non-Solicitation of Customers, Suppliers, Etc...................27
9.5. Non-Disparagement...............................................27
9.6. UroMed Securities...............................................28
9.7. Equitable Remedies..............................................28
9.8. Modification....................................................28
10. INDEMNIFICATION.................................................28
10.1. Indemnification by UroMed and Merger Sub........................28
10.2. Indemnification by the Stockholders and the
Company.........................................................29
10.3. Indemnification by each Stockholder
and the Trust30.................................................29
10.4. Claims..........................................................29
10.5. Payment of Claims...............................................30
10.6. Limitations of Liability........................................31
11. RELEASES........................................................31
12. DEFINITIONS.....................................................32
12.1. Certain Defined Terms...........................................32
12.2. Terms Defined Elsewhere.........................................33
13. GENERAL.........................................................34
13.1. Cooperation.....................................................34
13.2. Survival of Provisions..........................................34
13.3. Stockholder Representative......................................35
13.4. Expenses........................................................35
13.5. Benefits of Agreement; No Assignments;
No Third-Party Beneficiaries....................................35
13.6. Notices.........................................................35
13.7. Public Statements or Releases...................................36
13.8. Counterparts....................................................36
13.9 Captions........................................................37
13.10. Equitable Relief................................................37
13.11. Construction....................................................37
13.12. Waivers.........................................................37
13.13. Entire Agreement................................................37
13.14. Governing Law...................................................37
13.15. Arbitration.....................................................37
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION. This Agreement and Plan of
Merger and Reorganization, dated as of March 26, 2001, (this "AGREEMENT") is by
and among UroMed Corporation ("UROMED"), a Massachusetts corporation; Providence
Merger Corporation ("MERGER SUB"), a California corporation that is a wholly
owned subsidiary of UroMed; SSGI (the "COMPANY"), a California corporation; and
the "Stockholders" listed on the signature pages hereto (each, a "STOCKHOLDER,"
and collectively, the "STOCKHOLDERS"), who are the stockholders of the Company
and the Xxxxxx Family Trust -1997 (the "Trust").
Whereas, the parties desire that Merger Sub be merged with and into the
Company (the "MERGER"), subject to the terms and conditions set forth in this
Agreement; and
Whereas, for Federal income tax purposes, the parties intend and expect
that the Merger qualify as a reorganization under the provisions of Section
368(a) of the United States Internal Revenue Code of 1986, as amended (the
"CODE").
Certain terms used in this Agreement are defined in Section 12.
1. CLOSING. Subject to the other provisions of this Agreement, a closing
(the "CLOSING") will be held at the offices of Xxxxxxx Xxxx LLP, 000 Xxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, on March 27, 2001 (the "CLOSING DATE"). On
the Closing Date, the Company shall file with the Secretary of State of the
State of California (the "CALIFORNIA SECRETARY OF STATE"), pursuant to Section
1103 of the California General Corporation Law (the "CGCL"), this Agreement
together with the officers' certificates substantially in the form of EXHIBIT
A-1 attached hereto with respect to the Company (the "COMPANY MERGER
CERTIFICATE"), EXHIBIT A-2 attached hereto with respect to Merger Sub (the
"MERGER SUB MERGER CERTIFICATE") and EXHIBIT A-3 attached hereto with respect to
UroMed (the "UROMED MERGER CERTIFICATE", and together with the Company Merger
Certificate and the Merger Sub Merger Certificate, the "CALIFORNIA MERGER
CERTIFICATES"), in order to cause the Merger to become effective under the laws
of the State of California. The Merger shall become effective on the date and at
the time of the filing of the copy of this Agreement and the California Merger
Certificates with the California Secretary of State (the "EFFECTIVE TIME"), in
accordance with the CGCL. For all purposes, all of the document deliveries and
other actions to occur at the Closing will be conclusively presumed to have
occurred at the same time, immediately before the Effective Time.
2. EFFECT OF MERGER. At the Effective Time, automatically and without
further action:
2.1. SURVIVING CORPORATION. Merger Sub will be merged with and into the
Company and the separate existence of Merger Sub will cease. The Company will
continue in existence as the surviving corporation in the Merger (the "SURVIVING
CORPORATION").
2.2. ARTICLES OF INCORPORATION. The Company's Articles of Incorporation, as
in effect immediately before the Effective Time, will be amended and restated to
read
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in their entirety as set forth in EXHIBIT B attached hereto, and as so amended
will be the Articles of Incorporation of the Surviving Corporation.
2.3. BY-LAWS. The Company's by-laws, as in effect immediately before the
Effective Time, will be amended and restated to read in their entirety as set
forth in EXHIBIT C attached hereto, and as so amended and restated will be the
by-laws of the Surviving Corporation.
2.4. DIRECTORS AND OFFICERS. From and after the Effective Time, the
respective officers and members of the Board of Directors of the Surviving
Corporation will consist of those persons set forth on EXHIBIT D attached
hereto, each such person to hold office, subject to the applicable provisions of
the Articles of Incorporation and the by-laws of the Surviving Corporation,
until the next annual meeting of directors or stockholders, as the case may be,
of the Surviving Corporation and until his successor is duly elected or
appointed and qualified.
2.5. MERGER CONSIDERATION: CONVERSION OF COMPANY STOCK & MERGER NOTE. Each
share of common stock, no par value per share, of the Company (the "COMPANY
STOCK") issued and outstanding immediately before the Effective Time (other than
any Dissenting Shares (as defined in Section 2.7) and other than any shares held
directly or indirectly by UroMed or the Company or any of their respective
Subsidiaries) will be converted into and become the right to receive (i) 2,000
shares(the "MERGER SHARES", and such number of Merger Shares, the "EXCHANGE
RATIO") of UroMed Common Stock, subject to the escrow arrangements referred to
in Section 3.3 and to the payment of cash adjustments in lieu of the issuance of
fractional shares as provided in Section 3.6, and (ii) a pro rata portion of the
$500,000 earnout note in the form EXHIBIT E attached hereto issued by UroMed in
favor of the Stockholders (the "MERGER NOTE"). Notwithstanding the foregoing,
the maximum number of Merger Shares issuable pursuant to this Section 2.5 is
2,000,000 shares of Merger Shares.
2.6. CANCELLATION OF TREASURY STOCK, ETC. Each share of Company Stock held
directly or indirectly by UroMed or the Company or any of their respective
Subsidiaries will be canceled and will cease to exist, and no payment will be
made with respect thereto.
2.7. DISSENTERS' RIGHTS. Company Stock held by the Stockholders who have
properly exercised dissenters' right with respect thereto in accordance with
Title 1, Division 1, Chapter 13, Sections 1300 and following of the CGCL
(collectively, "DISSENTING SHARES"), shall not be converted into the right to
receive shares of UroMed Common Stock, but such Stockholders shall be entitled
to receive payment of the appraised value of the Dissenting Shares in accordance
with the provisions of the CGCL, except that any Dissenting Shares held by a
Stockholder who shall thereafter withdraw such demand for appraisal of such
Stockholder's Company Stock or otherwise lose the right to such payments as
provided in the CGCL, shall thereupon be deemed to have been converted into and
represent the right to receive, as of the Effective Time, the right to receive
shares of UroMed Common Stock, without any interest thereon, determined as
hereinabove provided. If any holder of Company Stock shall be entitled to be
paid the "fair value" of such holder's shares, as provided in Title 1, Division
1,
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Chapter 13, Sections 1300 and following of the CGCL, the Company shall give
UroMed notice thereof and UroMed shall have the right to participate in all
negotiations and proceedings with respect to any such demands. The Company shall
not, except with the prior written consent of UroMed, voluntarily make any
payment with respect to, or settle or offer to settle, any such demand for
payment.
2.8. CONVERSION OF MERGER SUB'S SHARES. Each share of the common stock,
$0.01 par value per share, of Merger Sub that was issued and outstanding
immediately before the Effective Time will be converted into and become one
share of the common stock, no par value per share, of the Surviving Corporation.
2.9. DISCHARGE OF INDEBTEDNESS AND LIABILITIES. At the Closing:
(a) UroMed shall pay and discharge one million dollars ($1,000,000) of the
Company's existing Indebtedness to Xxxxxx Xxxxxx ("XXXXXX") by (i) transfer to
Xxxxxx of $500,000 in immediately available funds and (ii) issuance to Xxxxxx of
a $460,000 promissory note in the form of EXHIBIT F attached hereto. The Company
will obtain and deliver at the Closing a pay-off letter, in form and substance
satisfactory to UroMed, from Xxxxxx acknowledging satisfaction in full of this
Indebtedness;
(b) UroMed shall discharge one hundred eighty nine thousand dollars
($189,000) in the existing Indebtedness of the Company to L. Xxx Xxxxx ("XXXXX")
by issuing to Xxxxx 79,578 shares of UroMed Common Stock and by paying Xxxxx the
fractional share payment, if any, payable in connection with such issuance as
determined in accordance with Section 3.6 of this Agreement. The Company will
obtain and deliver at the Closing a pay-off letter from Xxxxx, in form and
substance satisfactory to UroMed, consenting to the issuance of UroMed Common
Stock in accordance with this Section in exchange for the discharge of the
Company's Indebtedness to him and acknowledging satisfaction in full of all
Indebtedness of the Company to him.
(c) UroMed shall discharge fifty one thousand one hundred ninety six
dollars and seven cents dollars ($51,196.07) in the existing Indebtedness of the
Company to Xxxxxx Xxx ("AWE") by issuing to Awe 21,556 shares of UroMed Common
Stock and by paying Awe the fractional share payment, if any, payable in
connection such issuance as determined in accordance with Section 3.6 of this
Agreement. The Company will obtain and deliver at the Closing a pay-off letter
from Awe, in form and substance satisfactory to UroMed, consenting to the
issuance of UroMed Common Stock in accordance with this Section and
acknowledging satisfaction in full of all Indebtedness of the Company to him.
(d) UroMed shall discharge twenty thousand three hundred fourteen dollars
and fourteen cents ($20,314.14) in the existing Indebtedness of the Company to
Xxxx Xxxxxx ("X. XXXXXX") by issuing to X. Xxxxxx 8,553 shares of UroMed Common
Stock and by paying X. Xxxxxx the fractional share payment, if any, payable in
connection with such issuance as determined in accordance with Section 3.6 of
this Agreement. The Company will obtain and deliver at the Closing a pay-off
letter from X. Xxxxxx, in form and substance satisfactory to UroMed, consenting
to the issuance of UroMed
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Common Stock in accordance with this Section and acknowledging satisfaction in
full of all Indebtedness of the Company to him.
(e) UroMed shall discharge ten thousand three hundred twenty four and
ninety six cents ($10,324.96) in the existing Indebtedness of the Company to
Xxxx Xxxxxx ("XXXXXX") by issuing to Rollin 4,347 shares of UroMed Common Stock
and by paying Rollin the fractional share payment, if any, payable in connection
with such issuance as determined in accordance with Section 3.6 of this
Agreement. The Company will obtain and deliver at the Closing a pay-off letter
from Rollin, in form and substance satisfactory to UroMed, consenting to the
issuance of UroMed
Common Stock in accordance with this Section and acknowledging satisfaction in
full of all Indebtedness of the Company to him.
(f) The Stockholders shall discharge any liabilities of the Company
reflected on the Closing Date Pro Forma Balance Sheet (as defined in Section
2.10(f) hereof) that are in excess of the liabilities reflected on the Company's
pro forma balance sheet dated as of January 31, 2001 and attached hereto as
EXHIBIT G.
2.10. OTHER TRANSACTIONS AT CLOSING. At the Closing:
(a) The Company shall execute and deliver to UroMed the Company Merger
Certificate.
(b) UroMed and Merger Sub shall execute and deliver to the Company the
UroMed Merger Certificate and the Merger Sub Merger Certificate, respectively.
(c) The Company and the Stockholders will execute and deliver to UroMed a
closing certificate (without qualification as to knowledge or materiality)
substantially in the form set forth in EXHIBIT H attached hereto.
(d) UroMed and Merger Sub will execute and deliver to the Company a closing
certificate (without qualification as to knowledge or materiality) substantially
in the form set forth in EXHIBIT H attached hereto.
(e) The Company will deliver to UroMed Affiliate's Agreements in the form
of EXHIBIT I attached hereto (the "AFFILIATE'S AGREEMENT(S)") executed by each
of Xxxxxx Xxxxxx, Xxxxxxx Xxxxxx and L. Xxx Xxxxx.
(f) The Company shall deliver to UroMed a pro forma balance sheet of the
Company as of the Closing Date (the "CLOSING DATE PRO FORMA BALANCE SHEET"),
determined in accordance with generally accepted accounting principles and
applied on a consistent basis, which accurately reflects all of the assets and
liabilities of the Company as of the Closing Date, and the assets and
liabilities reflected on the Closing Date Pro Forma Balance Sheet shall not be
less than and greater than, respectively, the assets and liabilities reflected
on the Company's pro forma balance sheet dated as of January 31, 2001 (attached
hereto as EXHIBIT G).
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(g) UroMed and each of the Stockholders will execute and deliver the
Registration Rights and Voting Agreement (as defined in Section 4) and the
Registration Rights and Voting Agreement shall be in full force and effect.
(h) UroMed, each of the Stockholders and the Escrow Agent (as defined in
Section 3.3) will execute and deliver the Escrow Agreement (as defined in
Section 3.3) and the Escrow Agreement shall be in full force and effect.
(i) Each of Xxxxxx and Xxxxx shall terminate all prior employment
agreements with the Company and UroMed and each of Xxxxxx and Xxxxx will execute
and deliver employment agreements in the forms of EXHIBITS J-1 and J-2 attached
hereto, respectively, and each such employment agreement shall be in full force
and effect.
(j) The Company shall deliver an executed settlement agreement with
Excelon, in form and substance satisfactory to UroMed.
(k) Xxxxxxx Xxxx LLP, counsel to UroMed and Merger Sub, will deliver to the
Company a written legal opinion addressed to the Company and the Stockholders,
dated on and as of the Closing Date, and substantially in the form of EXHIBIT K
attached hereto.
(l) Xxxxx & Xxxxx, counsel to the Company and the Stockholders, will
deliver to UroMed a written legal opinion addressed to UroMed, dated on and as
of the Closing Date, and substantially in the form of EXHIBIT L attached hereto.
(m) UroMed shall obtain and deliver an agreement executed by Xxxx Xxxxx
pursuant to which Xx. Xxxxxx agrees to vote all UroMed Common Stock held by him,
at the option of UroMed, in accordance with the recommendation of UroMed's Board
of Directors or in the same proportion as UroMed's unaffiliated holders of
common stock.
(n) UroMed shall deliver evidence that Xxxxxx Xxxxxx has been elected to
UroMed's board of directors, effective immediately as of the Closing.
(o) Each of Xxxxxx Xxxxxx, Xxxxxxx Xxxxxx and the Trust hereby (i)
irrevocably instruct UroMed that the Merger Shares being delivered by
UroMedpursuant to Section 2.5 herein be issued in the name of the Xxxxxx Family
Trust - 1997, (ii) each of Xxxxxx Xxxxxx and Xxxxxxx Xxxxxx hereby agree to be
held responsible, jointly and not severally, for any transfer taxes that may be
imposed by such issuance to the Trust and (iii) the Trust acknowledges receipt
of the Merger Shares and in consideration therefore, agrees to become a party to
this Agreement, including without limitation for purposes of Section 10 herein.
3. PROCEDURES; ESCROWED SHARES.
3.1. CERTIFICATES. After the Effective Time, stock certificates (each, a
"Certificate," and collectively, the "CERTIFICATES") representing shares of
Company Stock that have been converted into shares of UroMed Common Stock in the
Merger will be conclusively deemed to represent such shares of UroMed Common
Stock.
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3.2. EXCHANGE OF CERTIFICATES. As promptly as practicable after the
Effective Time, UroMed or its transfer agent for UroMed Common Stock will send
to each Stockholder transmittal materials for use in exchanging their
Certificates for certificates for the shares of UroMed Common Stock into which
such shares of Company Stock have been converted. Upon surrender of a
Certificate to UroMed or its transfer agent, as the case may be, together with a
duly executed letter of transmittal and any other reasonably required documents,
the holder of such Certificate will be entitled to receive, in exchange
therefor, a certificate for the number of shares of UroMed Common Stock to which
such holder is entitled (subject to the escrow arrangements referred to in
Section 3.3), and such Certificate will be canceled.
3.3. ESCROWED SHARES. Notwithstanding any other provision of this
Agreement, at the Closing, UroMed, each of the Stockholders and STATE STREET
BANK & TRUST COMPANY, as Escrow Agent (the "ESCROW AGENT"), will execute and
deliver an Escrow Agreement in the form of EXHIBIT M attached hereto (the
"ESCROW AGREEMENT"), under which the Stockholders will secure their
indemnification obligations hereunder by escrowing 10% of the shares of UroMed
Common Stock into which the shares of Company Stock are converted in the Merger
(the "ESCROWED SHARES").
3.4. DISTRIBUTIONS. No dividend or other distribution payable after the
Effective Time with respect to UroMed Common Stock will be paid to the holder of
any unsurrendered Certificate until the holder thereof surrenders such
Certificate, at which time such holder will receive all dividends and
distributions, without interest thereon, previously payable but withheld from
such holder pursuant hereto.
3.5. NO TRANSFERS. After the Effective Time, no transfers of shares of
Company Stock will be made in the stock transfer books of the Company. If, after
the Effective Time, Certificates are presented (for transfer or otherwise) to
the Surviving Corporation or its transfer agent for Company Stock, they will be
canceled and exchanged for the shares of UroMed Common Stock deliverable in
respect thereof as determined in accordance with this Agreement (or returned to
the presenting person, if such Certificate represents Dissenting Shares).
3.6. NO FRACTIONAL SHARES. In lieu of the issuance of fractional shares of
UroMed Common Stock, cash adjustments will be paid (without interest) to the
Stockholders in respect of any fractional share of UroMed Common Stock that
would otherwise be issuable to them and the amount of such cash adjustments will
be determined by multiplying each relevant holder's fractional interest by
$2.375 (such amount to be proportionately adjusted to reflect stock splits,
stock dividends, reverse stock splits, and other recapitalizations,
reorganizations, and similar events affecting UroMed Common Stock and occurring
after the date of this Agreement). For purposes of determining whether, and in
what amounts, a particular Stockholder would be entitled to receive cash
adjustments under this section, shares held of record by such holder and
represented by two or more Certificates will be aggregated.
3.7. TERMINATION OF RIGHTS. After the Effective Time, holders of Company
Stock will cease to be, and will have no rights as, stockholders of the Company,
other than (i) in the case of shares other than Dissenting Shares, the rights to
receive shares
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of UroMed Common Stock and an interest in the Merger Note into which such shares
have been converted and/or payments in lieu of fractional shares, as provided in
this Agreement, and (ii) in the case of Dissenting Shares, the rights afforded
to the holders thereof in Chapter 13 of the CGCL.
3.8. ABANDONED PROPERTY. Neither UroMed or the Company nor any other person
will be liable to any holder or former holder of shares of Company Stock for any
shares, or any dividends or other distributions with respect thereto, properly
delivered to a public official pursuant to applicable abandoned property,
escheat, or similar laws.
3.9. LOST CERTIFICATES, ETC. In the event that any Certificate has been
lost, stolen, or destroyed, then upon receipt of appropriate evidence as to such
loss, theft, or destruction, and to the ownership of such Certificate by the
person claiming such Certificate to be lost, stolen, or destroyed, and the
receipt by UroMed or its transfer agent for UroMed Common Stock of appropriate
and customary indemnification, UroMed or such transfer agent will issue in
exchange for such lost, stolen, or destroyed Certificate the shares of UroMed
Common Stock and the fractional share payment, if any, deliverable in respect
thereof as determined in accordance with this Agreement.
4. REGISTRATION OF UROMED COMMON STOCK. Pursuant to the terms and
provisions of the Registration Rights and Voting Agreement in the form of
EXHIBIT N attached hereto (the "REGISTRATION RIGHTS AND VOTING AGREEMENT"), to
be executed by UroMed and each of the Stockholders at Closing, UroMed will file
with the SEC a registration statement on Form S-3 or other appropriate form for
the purpose of registering for resale by (i) the Stockholders all of the shares
of UroMed Common Stock (including the Escrowed Shares) into which the shares of
Company Stock are converted in the Merger and (ii) Potts, Awe, X. Xxxxxx and
Rollin all of the shares of UroMed Common Stock they each received in connection
with the discharge of the Company's Indebtedness to them.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE STOCKHOLDERS.
The Company and each of the Stockholders hereby jointly and severally
represent and warrant to UroMed and Merger Sub as follows, subject in each case
to such exceptions as are specifically contemplated by this Agreement or as are
set forth in the applicable section of the Disclosure Schedule prepared by the
Company and delivered to UroMed.
5.1. INCORPORATION; AUTHORITY. The Company is a corporation duly organized,
validly existing, and in good standing under the laws of the State of California
and has all requisite corporate power and authority to own or lease and operate
its properties and to carry on its business as now conducted. The Company has
delivered to UroMed complete and correct copies of its Articles of Incorporation
and by-laws, in each case with all amendments thereto.
5.2. AUTHORIZATION AND ENFORCEABILITY. The Company has all requisite power
and full legal right and authority (including due approval of its Board of
Directors and its stockholders, respectively) to enter into this Agreement, to
perform all
8
of its agreements and obligations hereunder, and to consummate the Merger and
the other transactions contemplated hereby. This Agreement has been duly
executed and delivered by the Company and constitutes a legal, valid, and
binding obligation of the Company, enforceable against the Company in accordance
with its terms. None of the stockholders of the Company will have any appraisal
rights under Chapter 13 of the CGCL by reason of the consummation of the Merger
or the other transactions contemplated hereby.
5.3. GOVERNMENTAL AND OTHER THIRD-PARTY CONSENTS, NON-CONTRAVENTION, ETC.
Except as set forth in Section 5.3 of the Disclosure Schedule and the filing of
this Agreement and the California Merger Certificates with the California
Secretary of State, no consent, approval, or authorization of or registration,
designation, declaration, or filing with any governmental authority, federal or
other, or any other person, is required on the part of the Company in connection
with the execution, delivery, and performance of this Agreement or the
consummation of the Merger and the other transactions contemplated hereby. The
execution, delivery, and performance of this Agreement and the consummation of
such transactions will not violate (i) any provision of the Company's Articles
of Incorporation or by-laws, (ii) any material order, judgment, injunction,
award or decree of any court or state or federal governmental or regulatory body
applicable to the Company, or (iii) any material judgment, decree, order,
statute, rule, regulation, agreement, instrument, or other obligation to which
the Company is a party or by or to which it or any of its assets is bound or
subject.
5.4. CAPITALIZATION. The authorized and outstanding capital stock and other
securities of the Company are as set forth in Section 5.4 of the Disclosure
Schedule. All of such outstanding shares of capital stock of the Company are
duly authorized, validly issued, fully paid, and non-assessable, and all of such
outstanding shares and other securities are owned, both of record and
beneficially, as set forth in Section 5.4 of the Disclosure Schedule, and were
issued in compliance with all applicable laws, including securities laws, and
all applicable preemptive or similar rights of any person. No person has any
valid right to rescind any purchase of any shares of the Company's capital stock
or other securities.
There are no agreements or other obligations on the part of the Company or
any Stockholder to purchase or sell, and other than as set forth in Section 5.4
of the Disclosure Schedule, no convertible or exchangeable securities, options,
warrants, or other rights to acquire from the Company or any Stockholder any
shares of the Company's capital stock or other securities. Section 5.4 of the
Disclosure Schedule sets forth the name of each person who holds any option or
other right to acquire shares of the Company's capital stock, the number and
type of shares subject to such option or right, and the per-share exercise price
payable therefor.
5.5. QUALIFICATION. The Company is duly qualified and in good standing as a
foreign corporation in all jurisdictions in which the character of its owned or
leased properties or the nature of its activities makes such qualification
necessary.
5.6. SUBSIDIARIES. The Company does not have any Subsidiaries or own any
legal and/or beneficial interests in or to any other business enterprise or
other person.
9
5.7. FINANCIAL STATEMENTS AND RELATED MATTERS.
(a) Included in Section 5.7 of the Disclosure Schedule are copies of (i)
the unaudited balance sheets of the Company as of the last day of December in
each of the years 1999 and 2000, inclusive (such balance sheet as of December
31, 2000, the "MOST RECENT BALANCE SHEET"), and the related unaudited statements
of income and retained earnings, respectively, of the Company, for the fiscal
years ended on such dates (the "ANNUAL FINANCIAL STATEMENTS"), and (ii) the
unaudited balance sheet of the Company as of February 28, 2001, and the related
unaudited statements of income and retained earnings, respectively, of the
Company, for the two-month period ended on such date. The Annual Financial
Statements are in the same form as audited financial statements, subject only to
completion of an audit opinion. Each of such financial statements is true and
correct and has been prepared in accordance with generally accepted accounting
principles applied on a basis consistent with prior periods (except that the
financial statements do not contain footnotes and other presentation items that
may be required by generally accepted accounting principles); each of such
balance sheets accurately presents the financial condition of the Company as of
its respective date; and each of such statements of income and retained earnings
and cash flows, respectively, accurately presents the results of operations and
retained earnings, or cash flows, as the case may be, of the Company for the
period covered thereby; in each case, subject, with respect to the unaudited
financial statements referred to in clause (ii) of this section, to the absence
of footnote disclosure and to normal, recurring end-of-period adjustments, the
effect of which, both individually and in the aggregate, will not be material.
(b) All accounts and notes receivable reflected on the Most Recent Balance
Sheet, and all accounts and notes receivable arising subsequent to the date of
the Most Recent Balance Sheet, have arisen in the ordinary course of business,
represent valid obligations owing to the Company and have been collected or are
collectible in the aggregate recorded amounts thereof in accordance with their
terms, net of the reserve for uncollected accounts to be set forth on the
Closing Date Pro Forma Balance Sheet.
(c) The inventory and supplies of the Company are adequate for present
needs and are in usable and saleable condition in the ordinary course of
business, subject only to appropriate reserves for obsolescence to be reflected
on the Closing Date Pro Forma Balance Sheet.
5.8. ABSENCE OF CERTAIN CHANGES. Except as set forth in Schedule 5.8, since
December 31, 2000, there has not been:
(a) any change in the assets, liabilities, sales, income, or business of
the Company or in its relationships with suppliers, customers, or lessors, other
than changes that were both in the ordinary course of business and have not
been, either in any case or in the aggregate, materially adverse;
(b) any acquisition or disposition by the Company of any material asset or
property other than in the ordinary course of business;
10
(c) any damage, destruction or loss, whether or not covered by insurance,
materially and adversely affecting, either in any case or in the aggregate, the
property or business of the Company;
(d) any declaration, setting aside or payment of any dividend or any other
distributions in respect of any shares of capital stock of the Company;
(e) any issuance of any shares of the capital stock of the Company or any
direct or indirect redemption, purchase, or other acquisition by the Company of
any such capital stock;
(f) any loss of the services of any officer or key employee or consultant,
or any increase in the compensation, pension, or other benefits payable or to
become payable by the Company to any of its officers or key employees or
consultants, or any bonus payments or arrangements made to or with any of them;
(g) any forgiveness or cancellation of any debt or claim by the Company or
any waiver of any right of material value, other than compromises of accounts
receivable in the ordinary course of business;
(h) any entry by the Company into any transaction with any of its
Affiliates;
(i) any incurrence by the Company of any obligations or liabilities,
whether absolute, accrued, contingent or otherwise (including without limitation
liabilities as guarantor or otherwise with respect to obligations of others),
other than obligations and liabilities incurred in the ordinary course of
business with persons other than Affiliates of the Company;
(j) any incurrence or imposition of any Lien on any of the assets, tangible
or intangible, of the Company; or
(k) any discharge or satisfaction by the Company of any Lien or payment by
the Company of any obligation or liability (fixed or contingent) other than (i)
current liabilities included in the Most Recent Balance Sheet, (ii) current
liabilities to persons other than Affiliates of the Company incurred since the
date of the Most Recent Balance Sheet in the ordinary course of business, and
(ii) current liabilities incurred in connection with the transactions
contemplated hereby and disclosed in Section 5.8 of the Disclosure Schedule.
5.9. PROPERTIES AND ASSETS. The assets and properties of the Company are
and as of the Closing Date will be adequate and sufficient to conduct the
business of the Company as currently conducted. The Company has good and
marketable title to all of its assets and properties, including without
limitation all those reflected in the unaudited balance sheet referred to in
clause (ii) of Section 5.7 hereof (except for properties or assets sold,
consumed, or otherwise disposed of in the ordinary course of business since the
date of the Most Recent Balance Sheet), all free and clear of Liens. All such
properties and assets are in good condition and repair, reasonable wear-and-tear
excepted, and are adequate and sufficient to carry on the business of the
Company as presently conducted. Section 5.9(a) of the Disclosure Schedule sets
forth a complete
11
and correct list of all capital assets of the Company having a book or fair
market value in excess of $1,000. There are no material defects in any such
capital assets as to title or condition.
The Company does not own any real property. The Company has not received
any notice that either the whole or any portion of any real property leased by
it is to be condemned, requisitioned, or otherwise taken by any public authority
or is to be the subject of any public improvements that may result in special
assessments against or otherwise affect such real property. Section 5.9(b) of
the Disclosure Schedule sets forth a complete and correct description of all
leases of Real Property to which the Company is a party. Complete and correct
copies of all such leases have been delivered to UroMed. Each such lease is
valid and subsisting and no event or condition exists that constitutes, or after
notice or lapse of time or both could constitute, a default thereunder. The
leasehold interests of the Company are subject to no Lien, and the Company is in
quiet possession of the properties covered by such leases.
5.10. INTELLECTUAL PROPERTIES.
(a) Section 5.10 of the Disclosure Schedule lists all patents, patent
applications, trademarks, trade names, service marks, logos, copyrights,
technology, know-how, trade secrets, processes, formulas, techniques, and
licenses used in or necessary to the businesses of the Company as now being
conducted (collectively, the "INTELLECTUAL PROPERTIES"). The Company owns, or is
licensed or otherwise has the full and unrestricted exclusive right to use,
without the payment of royalties or other further consideration except as
indicated in Section 5.10 of the Disclosure Schedule, all Intellectual
Properties, and no other intellectual property rights, privileges, licenses,
contracts, or other agreements, instruments, or evidences of interests are
necessary to or used in the conduct of the businesses of the Company.
(b) In any instance where the Company's rights to Intellectual Properties
arise under a license or similar agreement (other than for off-the-shelf
software programs that have not been customized for its use), this is indicated
in Section 5.10 of the Disclosure Schedule and, to the best of the Company's
knowledge, such rights are licensed exclusively to the Company except as
indicated in Section 5.10 of the Disclosure Schedule. No other person has an
interest in or right or license to use any of the Intellectual Properties. To
the best of the Company's knowledge, none of the Intellectual Properties is
being infringed by others, or is subject to any outstanding order, decree,
judgment, or stipulation. No litigation (or other proceedings in or before any
court or other governmental, adjudicatory, arbitral, or administrative body)
relating to the Intellectual Properties is pending, or to the best of the
Company's knowledge, threatened, nor, to the best of the Company's knowledge, is
there any basis for any such litigation or proceeding. The Company maintains
reasonable security measures for the preservation of the secrecy and proprietary
nature of such of its Intellectual Properties as constitute trade secrets or
other confidential information.
(c) (i) The Company has not infringed or made unlawful use of, and is not
infringing or making unlawful use of, any intellectual property or other
proprietary or confidential information of any other person; and (ii) the
activities of the Company's current and past employees and contractors in
connection with their employment or
12
contractual relationship with the Company did not and do not, to the best of the
Company's knowledge, violate any agreements or arrangements that any such
employees or consultants had or have with any former employer or any other
person. No litigation (or other proceedings in or before any court or other
governmental, adjudicatory, arbitratory, or administrative body) charging the
Company with infringement or unlawful use of any patent, trademark, service
xxxx, trade name, logo, copyright, trade secret, or other proprietary right is
pending, or to the best of the Company's knowledge, threatened; nor is there any
basis for any such litigation or proceeding.
(d) To the best of the Company's knowledge, no officer, director, employee,
or consultant of the Company is obligated under or bound by any agreement or
instrument, or any judgment, decree, or order of any court of administrative
agency, that (i) conflicts or may conflict with his agreements and obligations
to use his best efforts to promote the interests of the Company, (ii) conflicts
or may conflict with the business or operations of the Company, or (iii)
restricts or may restrict the use or disclosure of any information that may be
useful to the Company.
5.11. INDEBTEDNESS. At the date hereof, the Company has no Indebtedness
outstanding except as set forth in Section 5.11 of the Disclosure Schedule. The
Company is not in default with respect to any outstanding Indebtedness or any
agreement, instrument, or other obligation relating thereto and no such
Indebtedness or any agreement, instrument, or other obligation relating thereto
purports to limit the issuance of any securities by the Company or the operation
of its businesses. Complete and correct copies of all agreements, instruments,
and other obligations (including all amendments, supplements, waivers, and
consents) relating to any Indebtedness of the Company have been furnished to
UroMed.
5.12. ABSENCE OF UNDISCLOSED LIABILITIES. Except to the extent (i)
reflected or reserved against in the Most Recent Balance Sheet, or (ii) incurred
with persons other than any Affiliate of the Company in the ordinary course of
business after the date of the Most Recent Balance Sheet, and either to be
discharged before the Closing or described in Section 5.12 of the Disclosure
Schedule, the Company does not have any liabilities or obligations of any
nature, whether accrued, absolute, contingent, or otherwise (including without
limitation liabilities, as guarantor or otherwise, in respect of obligations of
others) other than performance obligations with respect to the contracts that
would not be required to be reflected or reserved against in a balance sheet
prepared in accordance with generally accepted accounting principles or referred
to in the footnotes thereto.
5.13. TAXES.
(A) TAX ATTRIBUTES, ETC. Set forth in Section 5.13(a) of the Disclosure
Schedule are the net operating loss, net capital loss, credit, minimum Tax,
charitable contribution, and other Tax carryforwards (by type of carryforward
and expiration date, if any) of the Company.
(B) ELECTIONS. All material elections with respect to Taxes affecting the
Company are described in Section 5.13(b) of the Disclosure Schedule.
13
(C) FILING OF TAX RETURNS AND PAYMENT OF TAXES. The Company has timely
filed all Tax Returns required to be filed by it, each such Tax Return has been
prepared in compliance with all applicable laws and regulations, and all such
Tax Returns are true, accurate and complete in all respects. All Taxes due and
payable by the Company have been paid, and the Company will not be liable for
any additional Taxes in respect of any taxable period or any portion thereof
ending on or before the Closing Date in an amount that exceeds the corresponding
reserve therefor, if any, reflected in the accounting records of the Company
and, as applicable, the financial statements described in Section 2.10(f) and
Section 5.7. The Company has delivered to UroMed true, correct and complete
copies of all Tax Returns filed by or with respect to it with respect to taxable
periods ended on or after December 31, 1996, and all relevant documents and
information with respect thereto, including without limitation work papers,
records, examination reports, statements of deficiencies assessed against or
agreed to by the Company.
(D) AUDIT HISTORY. Each taxable period of the Company ended on or before
December 31, 1996, has closed and such taxable period is not subject to review
by any relevant taxing authority.
(E) DEFICIENCIES. No deficiency or proposed adjustment in respect of Taxes
that has not been settled or otherwise resolved has been asserted or assessed by
any taxing authority against the Company.
(F) LIENS. There are no Liens for Taxes (other than current Taxes not yet
due and payable) on the assets of the Company.
(G) EXTENSIONS TO STATUTE OF LIMITATIONS FOR ASSESSMENT OF TAXES. The
Company has not consented to extend the time in which any Tax may be assessed or
collected by any taxing authority.
(H) EXTENSIONS OF THE TIME FOR FILING TAX RETURNS. The Company has not
requested or been granted an extension of the time for filing any Tax Return to
a date on or after the date hereof.
(I) PENDING PROCEEDINGS. There is no action, suit, taxing authority
proceeding, or audit with respect to any Tax now in progress, pending, or to the
best of the Company's knowledge, threatened, against or with respect to (i) the
Company, (ii) any affiliated group of corporations (as defined in Section
1504(a) of the Code) with respect to a taxable period during which the Company
was a member of such affiliated group or (iii) any group of corporations that
filed a combined, consolidated or unitary Tax Return with respect to a taxable
period during which the Company was a member of such group.
(J) NO FAILURES TO FILE TAX RETURNS. No claim has ever been made by a
taxing authority in a jurisdiction where the Company does not pay Tax or file
Tax Returns that the Company is or may be subject to Taxes assessed by such
jurisdiction.
14
(K) MEMBERSHIP IN AFFILIATED GROUPS, ETC. The Company has never been a
member of any affiliated group of corporations (as defined in Section 1504(a) of
the Code) or filed or been included in a combined, consolidated, or unitary Tax
Return.
(L) ADJUSTMENTS UNDER SECTION 481. The Company will not be required, as a
result of a change in method of accounting for any period ending on or before
the Closing Date, to include any adjustment under Section 481(c) of the Code (or
any similar or corresponding provision or requirement under any Tax law) in
taxable income for any period ending on or after the Closing Date.
(M) TAX SHARING, ALLOCATION, OR INDEMNITY AGREEMENTS. The Company is not a
party to or bound by any Tax sharing or allocation agreement or has any current
or potential contractual obligation to indemnify any other person with respect
to Taxes.
(N) WITHHOLDING TAXES. The Company has withheld and paid all Taxes required
to have been withheld and paid by it in connection with amounts paid or owing to
any employee, creditor, independent contractor, or other person.
(O) FOREIGN PERMANENT ESTABLISHMENTS AND BRANCHES. With the exception of
the European registration agent maintained for purposes of CE Xxxx filings, the
Company does not have a permanent establishment in any foreign country with
which the United States of America has a relevant tax treaty, as defined in such
relevant tax treaty, and does not otherwise operate or conduct business through
any branch in any foreign country.
(P) U.S. REAL PROPERTY HOLDING CORPORATION. The Company is not and has not
been a United States real property holding corporation within the meaning of
Code Section 897(c)(2), during the applicable period specified in Code Section
897(c)(1)(A)(ii).
(Q) SAFE HARBOR LEASE PROPERTY. None of the property owned or used by the
Company is subject to a tax benefit transfer lease executed in accordance with
Section 168(f)(8) of the Internal Revenue Code of 1954, as amended by the
Economic Recovery Tax Act of 1981.
(R) TAX-EXEMPT USE PROPERTY. None of the property owned by the Company is
"tax-exempt use property" within the meaning of Section 168(h) of the Code.
(S) SECURITY FOR TAX-EXEMPT OBLIGATIONS. None of the assets of the Company
directly or indirectly secures any indebtedness, the interest on which is
tax-exempt under Section 103(a) of the Code, and the Company is not directly or
indirectly an obligor or a guarantor with respect to any such indebtedness.
(T) SECTION 341(F) CONSENT. The Company has not filed a consent under Code
Section 341(f) concerning collapsible corporations.
15
(U) PARACHUTE PAYMENTS. The Company has not made any payments, is not
obligated to make any payments, and is not a party to any agreement that under
certain circumstances could obligate it to make any payments, that will not be
deductible under Code Sections 162(m) or 280G.
(V) DIVISIVE TRANSACTIONS. The Company has never been either a
"distributing corporation" or a "controlled corporation" in connection with a
distribution of stock qualifying for tax-free treatment, in whole or in part,
pursuant to Section 355 of the Code.
5.14. EMPLOYEE BENEFIT PLANS.
(a) Except as described in Section 5.14(a) of the Disclosure Schedule, the
Company does not now maintain or contribute to, and has not in the current or
preceding six calendar years maintained or contributed to, any pension,
profit-sharing, deferred compensation, bonus, stock option, share appreciation
right, severance, group or individual health, dental, medical, life insurance,
survivor benefit, or similar plan, policy, or arrangement, whether formal or
informal, for the benefit of any director, officer, consultant or employee,
whether active or terminated, of the Company. Each of the arrangements set forth
in Section 5.14(a) of the Disclosure Schedule is hereinafter referred to as an
"EMPLOYEE BENEFIT PLAN," except that any such arrangement that is a
multi-employer plan will be treated as an Employee Benefit Plan only for
purposes of Sections 5.14(d)(iv), (vi), and (viii) and 5.14(g) below.
(b) The Company has delivered to UroMed true, correct, and complete copies
of each Employee Benefit Plan, and with respect to each such Plan (i) any
associated trust, custodial, insurance, or service agreements, (ii) any annual
report, actuarial report, or disclosure materials (including specifically any
summary plan descriptions) submitted to any governmental agency or distributed
to participants or beneficiaries thereunder in the current or any of the six
preceding calendar years, and (iii) the most recently received Internal Revenue
Service ("IRS") determination letters and any governmental advisory opinions or
rulings.
(c) Each Employee Benefit Plan is and has heretofore been maintained and
operated in compliance with the terms of such Plan and with the requirements
prescribed (whether as a matter of substantive law or as necessary to secure
favorable tax treatment) by any and all statutes, governmental or court orders,
and governmental rules or regulations in effect from time to time, including but
not limited to the Employee Retirement Income Security Act of 1974, as amended
("ERISA") and the Code and applicable to such Plan. Each Employee Benefit Plan
that is intended to qualify under Section 401(a) of the Code and each trust
forming part of an Employee Benefit Plan which is intended to qualify under
Section 501(c)(9) of the Code is specifically so identified in Section 5.14(a)
of the Disclosure Schedule and has been determined by the IRS to be so
qualified, and nothing has occurred since the date of the last such
determination as to each such Plan or trust that has resulted or is likely to
result in the revocation of such determination as to such Plan or trust.
(d) (i) There is no pending, or to the best of the Company's knowledge,
threatened, legal action, proceeding, or investigation, other than routine
claims for
16
benefits, concerning any Employee Benefit Plan, or to the best of the Company's
knowledge, any fiduciary or service provider thereof, and to the best of the
Company's knowledge, there is no basis for any such legal action, proceeding, or
investigation.
(ii) No liability (contingent or otherwise) to the Pension Benefit Guaranty
Corporation ("PBGC") or any multi-employer plan has been incurred by the Company
or any of its ERISA affiliates (other than insurance premiums satisfied in due
course).
(iii) No reportable event, or event or condition that presents a material
risk of termination by the PBGC, has occurred with respect to any Employee
Benefit Plan, or any retirement plan of an ERISA affiliate of the Company, which
is subject to Title IV of ERISA.
(iv) No Employee Benefit Plan nor any party in interest with respect
thereof, has engaged in a prohibited transaction that could subject the Company
directly or indirectly to liability under Section 409 or 502(i) of ERISA or
Section 4975 of the Code.
(v) No communication, report, or disclosure has been made that, at the time
made, did not accurately reflect the terms and operations of any Employee
Benefit Plan.
(vi) No Employee Benefit Plan provides welfare benefits subsequent to
termination of employment to employees or their beneficiaries (except to the
extent required by applicable state insurance laws and Title I, Part 6 of
ERISA).
(vii) No benefits due under any Employee Benefit Plan have been forfeited
subject to the possibility of reinstatement (which possibility would still exist
at or after the Closing).
(viii) The Company has not undertaken to maintain any Employee Benefit Plan
for any period of time and each such Plan is terminable at the sole discretion
of the Company, subject only to such constraints as may be imposed by applicable
law.
(e) With respect to each Employee Benefit Plan for which a separate fund of
assets is or is required to be maintained, full payment has been made of all
amounts that the Company is required, under the terms of each such Plan, to have
paid as contributions to that Plan as of the end of the most recently ended plan
year of that Plan, and no accumulated funding deficiency (as defined in Section
302 of ERISA and Section 412 of the Code), whether or not waived, exists with
respect to any such Plan. The current value of the assets of each such Employee
Benefit Plan, as of the end of the most recently ended plan year of that Plan,
exceeded the current value of all accrued benefits under that Plan.
(f) The execution of this Agreement and the consummation of the
transactions contemplated hereby will not result in any payment (whether of
severance pay or otherwise) becoming due from any Employee Benefit Plan to any
current or
17
former director, officer, consultant, or employee of the Company or result in
the vesting, acceleration of payment, or increases in the amount of any benefit
payable to or in respect of any such current or former director, officer,
consultant, or employee.
(g) No Employee Benefit Plan is a multi-employer plan.
(h) For purposes of this Section 5.14, "multi-employer plan," "party in
interest," "current value," "accrued benefit," "reportable event," and "benefit
liability" have the same meaning assigned such terms under Sections 3, 4043(b)
or 4001(a) of ERISA, and "ERISA affiliate" means any entity that under Section
414 of the Code is treated as a single employer with the Company.
5.15. SAFETY AND ENVIRONMENTAL MATTERS.
(a) None of the plants, offices, or properties in or on which the Company
carries on business nor any of the activities carried on by it are in violation
of any zoning, health, or safety law or regulation, including without limitation
the Occupational Safety and Health Act of 1970, as amended.
(b) Neither the Company nor any operator of any real property presently or
formerly owned, leased, or operated by the Company is in violation or alleged
violation of any judgment, decree, order, law, license, rule or regulation
pertaining to environmental matters, including without limitation the Resource
Conservation and Recovery Act ("RCRA"), the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended ("CERCLA"), the
Superfund Amendments and Reauthorization Act of 1986 ("XXXX"), the Federal Clean
Water Act, the Federal Clean Air Act, the Toxic Substances Control Act, and
applicable federal, state, foreign, and local statutes, regulations, ordinances,
orders, and decrees relating to health, safety, or the environment (all of the
foregoing, collectively, "ENVIRONMENTAL LAWS").
(c) The Company has not received notice from any third party, including
without limitation any federal, state, foreign, or local governmental authority,
that (i) the Company has been identified by the United States Environmental
Protection Agency (the "EPA") as a potentially responsible party under CERCLA
with respect to a site listed on the National Priorities List, 40 C.F.R. Part
000 Xxxxxxxx X (1986); (ii) any hazardous waste as defined by 42 U.S.C.
ss.6903(5), any hazardous substance as defined by 42 U.S.C. ss. 9601(14), any
pollutant or contaminant as defined by 42 U.S.C. ss. 9601(33) or any toxic
substance, oil, or hazardous material or other chemical or substance regulated
by any Environmental Laws (collectively, "HAZARDOUS SUBSTANCES") that the
Company has generated, transported, handled, used, or disposed of has been found
at any site at which a federal, state, foreign, or local agency or other third
party has conducted or has ordered that the Company conduct a remedial
investigation, removal, or other response action pursuant to any Environmental
Law; or (iii) the Company is or will be a named party to any claim, action,
cause of action, complaint (contingent or otherwise), or legal or administrative
proceeding arising out of any third party's incurrence of costs, expenses,
losses, or damages of any kind whatsoever in connection with the release of
Hazardous Substances.
18
(d) (i) No portion of any real property presently or formerly owned,
leased, or operated by the Company has been used by the Company, or to the best
of the Company's knowledge, by any other person, for the handling, usage,
manufacturing, processing, storage, or disposal of Hazardous Substances except
in accordance with applicable Environmental Laws; and no underground tank or
other underground storage receptacle for Hazardous Substances is located on any
real property presently owned, leased, or operated by the Company, or to the
best of the Company's knowledge, any real property formerly owned, leased, or
operated by it; (ii) in the course of the activities conducted by the Company
and to the best of the Company's knowledge, those of any other operators of any
real property presently or formerly owned, leased, or operated by the Company,
no Hazardous Substances have been generated, stored, or used on such properties
except in accordance with applicable Environmental Laws; (iii) to the best of
the Company's knowledge, there have been no releases (I.E. any past or present
releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, disposing, or dumping) or threatened releases of Hazardous
Substances on, upon, into, or from any real property presently or formerly
owned, leased, or operated by the Company; (iv) to the best of the Company's
knowledge, there have been no releases on, upon, from, or into any real property
in the vicinity of any real property presently or formerly owned, leased, or
operated by the Company that, through soil or groundwater contamination, may
have come to be located on, any of the real property presently or formerly
owned, leased, or operated by the Company; and (v) any Hazardous Substances that
have been generated by the Company, or to the best of the Company's knowledge,
any other person, on any real property presently or formerly owned, leased, or
operated by the Company, have been transported offsite only by carriers having
an identification number issued by the EPA and treated or disposed of only by
treatment or disposal facilities maintaining valid permits as required under
applicable Environmental Laws, which transporters and facilities, to the best of
the Company's knowledge, have been and are operating in compliance with such
permits and applicable Environmental Laws.
(e) No real property presently owned, leased, or operated by the Company,
and to the best of the Company's knowledge, no real property formerly owned,
leased, or operated by the Company, is or will be subject to any Environmental
Law requiring the performance of any Hazardous Substances site assessment, the
removal or remediation of any Hazardous Substances, the giving of notice to any
governmental agency or other person, or the recording and/or delivery to any
governmental agency or other person of any environmental disclosure statement or
document, by reason of, or as a condition to the effectiveness of, the Merger
and/or any other transaction contemplated hereby.
5.16. LABOR RELATIONS. The Company is and has been in compliance in all
material respects with all federal and state laws respecting employment and
employment practices, terms and conditions of employment, wages and hours, and
nondiscrimination in employment, and is not and has not been engaged in any
unfair labor practice. There is no charge or proceeding pending, or to the best
of the Company's knowledge, threatened, against the Company alleging unlawful
discrimination in employment practices or unfair labor practice before any court
or agency, including without limitation the National Labor Relations Board.
There is no labor strike, dispute, work slow-down, or work stoppage pending or
threatened against
19
or involving the Company. No one has petitioned within the last five years or is
now petitioning for union representation of any of the employees of the Company.
No grievance or arbitration proceeding arising out of or under any collective
bargaining agreement is pending against the Company and no claim therefor has
been asserted. Except for employees covered by the collective bargaining
agreements listed in Section 5.16 of the Disclosure Schedule, none of the
employees of the Company is covered by any collective bargaining agreement, and
no collective bargaining agreement is currently being negotiated by the Company.
The Company has not experienced any work stoppage or other material labor
difficulty during the last five years.
5.17. LITIGATION. Except as described in Section 5.17 of the Disclosure
Schedule, no litigation, arbitration, action, suit, proceeding, or investigation
(whether conducted by any judicial or regulatory body, arbitrator, or other
person) is pending or, to the best of the Company's knowledge, threatened,
against the Company, nor is there any basis therefor known to the Company.
5.18. CONTRACTS. Section 5.18 of the Disclosure Schedule sets forth a
complete and accurate list of all material contracts to which the Company is a
party or by or to which it or any of its assets or properties is bound or
subject. As used in this Agreement, the word "CONTRACT" includes every agreement
or understanding of any kind, written or oral, that is legally enforceable by or
against or otherwise binding on the Company, and specifically includes without
limitation:
(a) agreements with any current or former officer, director, employee,
consultant, or stockholder, or any partnership, corporation, joint venture, or
any other entity in which any such person has an interest;
(b) agreements with any labor union or association representing any
employee;
(c) agreements for the provision of services by or to the Company;
(d) bonds or other security agreements provided by any party in connection
with the business of the Company;
(e) agreements for the purchase or other acquisition or the sale or other
disposition of assets or properties, in each case other than in the ordinary
course of business, or for the grant to any person of any preferential rights to
purchase any of such assets or properties;
(f) joint venture agreements relating to the assets, properties, or
business of the Company or by or to which it or any of its assets or properties
is bound or subject;
(g) agreements under which the Company agrees to indemnify any party, to
share tax liability of any party, or to refrain from competing with any party;
(h) agreements with regard to Indebtedness; or
(i) any other contract or other agreement, whether or not made in the
ordinary course of business.
20
All of the contracts listed in Section 5.18 of the Disclosure Schedule are in
full force and effect, and neither the Company, nor to the best of the Company's
knowledge, any other party thereto, is in default under or breach of any of
them, nor does any event or condition exist that after notice or lapse of time
or both could constitute a default thereunder or breach thereof on the part of
the Company, or to the best of the Company's knowledge, any other party thereto.
No approval or consent of any person that has not already been obtained and
listed in Section 5.18 of the Disclosure Schedule is needed in order that the
contracts listed in Section 5.18 of the Disclosure Schedule continue in full
force and effect following the consummation of the Merger and the other
transactions contemplated hereby, and no such contract includes any provision,
the effect of which may be to terminate (or give rise to a right of termination
under) such contract, to enlarge or accelerate any obligations of the Company
thereunder, or to give additional rights to any other person, upon consummation
of the Merger or the other transactions contemplated hereby. The Company has
delivered to UroMed true, correct, and complete copies of all such contracts,
including all amendments, modifications, and supplements thereto.
5.19. POTENTIAL CONFLICTS OF INTEREST. No officer, director, or stockholder
of the Company (i) owns, directly or indirectly, any interest (excepting not
more than 1% stock holdings for investment purposes in securities of publicly
held and traded companies) in, or is an officer, director, employee, or
consultant of, any person that is a competitor, lessor, lessee, customer, or
supplier of the Company; (i) owns, directly or indirectly, in whole or in part,
any tangible or intangible property that the Company is using or the use of
which is necessary for the business of the Company; or (iii) has any cause of
action or other claim whatsoever against, or owes any amount to, the Company,
except for claims in the ordinary course of business, such as for accrued
vacation pay, accrued benefits under Employee Benefit Plans, and similar matters
and agreements.
5.20. INSURANCE. Section 5.20 of the Disclosure Schedule lists the policies
of theft, fire, liability, workmen's compensation, life, property and casualty,
and other insurance owned or held by the Company. Such policies of insurance are
maintained with financially sound and reputable insurance companies, funds, or
underwriters, and are of the kinds, cover such risks, and are in such amounts
and with such deductibles and exclusions, as are consistent with prudent
business practice. All such policies are in full force and effect; are
sufficient for compliance by the Company with all requirements of law and of all
agreements to which the Company is a party; are valid, outstanding, and
enforceable policies and provide that they will remain in full force and effect
through the respective dates set forth in the Disclosure Schedule; and will not
in any way be affected by, or terminate or lapse by reason of, the transactions
contemplated by this Agreement.
5.21. BANK ACCOUNTS, SIGNING AUTHORITY, POWERS OF ATTORNEY. Section 5.21 of
the Disclosure Schedule sets forth a complete and accurate list of all bank,
brokerage, and other accounts, and all safe-deposit boxes, of the Company and
the persons with signing or other authority to act with respect thereto. Except
as so listed, the Company does not have any account or safe deposit box in any
bank, and no person has any power, whether singly or jointly, to sign any checks
on behalf of the Company,
21
to withdraw any money or other property from any bank, brokerage, or other
account of the Company, or to act under any agency or power of attorney granted
by the Company at any time for any purpose. Section 5.21 of the Disclosure
Schedule also sets forth the names of all persons authorized to borrow money or
sign notes on behalf of the Company.
5.22. SUPPLIERS AND CUSTOMERS. Section 5.22 of the Disclosure Schedule
lists the ten largest suppliers and ten largest customers of the Company during
the preceding twelve-month period. The relationships of the Company with its
suppliers and customers are good commercial working relationships, and no
supplier or customer of material importance to the Company has canceled or
otherwise terminated, or threatened in writing to cancel or terminate, its
relationship with the Company or has during the last twelve months decreased
materially, or threatened to decrease or limit materially, its services,
supplies, or materials to the Company or its usage or purchase of the services
or products of the Company, except for normal cyclical changes related to
customers' businesses. The Company has no knowledge or reason to know that any
such supplier or customer intends to cancel or otherwise substantially modify
its relationship with the Company or to decrease materially or limit its
services, supplies, or materials to the Company, or its usage or purchase of the
Company's services or products, and the consummation of the transactions
contemplated hereby will not, to the best of the Company's knowledge, adversely
affect the relationship of the Company with any such supplier or customer.
5.23. EMPLOYMENT OF OFFICERS, EMPLOYEES. Section 5.23 of the Disclosure
Schedule lists the name and current annual salary and other compensation payable
by the Company to each exempt non-hourly employee whose current total annual
compensation or estimated compensation from the Company (including but not
limited to wages, salary, commissions, normal bonus, profit sharing, deferred
compensation, and other extra compensation).
5.24. MINUTE BOOKS. The minute books of the Company made available to
UroMed for inspection accurately record therein all material actions taken by
its Board of Directors, all committees thereof, and its stockholders.
5.25. BROKERS. No finder, broker, agent, or other intermediary has acted
for or on behalf of the Company in connection with the negotiation, preparation,
execution, or delivery of this Agreement or the consummation of the Merger or
the other transactions contemplated hereby.
5.26. COMPLIANCE WITH OTHER AGREEMENTS, LAWS, ETC. The Company has complied
with, and is in compliance with, (i) all laws, statutes, governmental
regulations and all judicial or administrative tribunal orders, judgments,
writs, injunctions, decrees or similar commands applicable to its business, (ii)
all unwaived terms and provisions of all contracts, agreements and indentures to
which the Company is a party, or by which the Company or any of its properties
is subject, and (iii) its Articles of Incorporation and by-laws, respectively,
each as amended to date; in the case of the preceding clauses (i) and (ii),
excepting only any such noncompliances that, both individually and in the
aggregate, have not resulted and will not result in any material adverse effect
with respect to the Company. The Company has not been
22
charged with, or to the best of its knowledge, been under investigation with
respect to, any violation of any provision of any federal, state, or local law
or administrative regulation. The Company has and maintains and Section 5.26 of
the Disclosure Schedule sets forth a complete and correct list of, all such
licenses, permits, and other authorizations of governmental authorities as are
necessary or desirable for the conduct of its businesses or in connection with
the ownership or use of its properties, all of which are in full force and
effect, true and complete copies of all of which have previously been delivered
to UroMed, and none of which will be affected by the consummation of the Merger
and the other transactions contemplated hereby.
5.27. OWNERSHIP OF UROMED STOCK. Neither the Company or any Stockholder,
nor to the best of the Company's knowledge, any of its affiliates or associates
(as such terms are defined under the Exchange Act) beneficially owns, directly
or indirectly, or is a party to any agreement, arrangement, or understanding
with respect to the acquisition, holding, voting, or disposition of any shares
of the capital stock or other securities of UroMed.
5.28. DISCLOSURE. No representation or warranty of the Company in this
Agreement (including the exhibits and schedules hereto) or in any other
agreement, instrument, certificate, or other document delivered by the Company
in connection with this Agreement, the Merger, or any of the other transactions
contemplated hereby contains or will contain any untrue statement of a material
fact or omits or will omit to state a material fact required to be stated
therein or necessary to make the statements contained therein not false or
misleading.
5.29. EXPIRATION OF REPRESENTATIONS AND WARRANTIES. The warranties and
representations contained in this Article 5 shall fully expire and terminate
eighteen months after the Closing Date except Section 5.13 which shall survive
until thirty days after the expiration of the applicable tax statute of
limitations.
6. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS AND THE TRUST.
Each of the Stockholders and the Trust hereby represent to UroMed and
Merger Sub, with respect to himself, herself or itself only, as follows:
6.1. AUTHORIZATION AND ENFORCEABILITY. Such Stockholder and the Trust has
all requisite power and full legal right and authority (including, in the case
of a Stockholder who is not a natural person, and the Trust due approval of its
Board of Directors stockholders, managers, and/or other persons exercising
similar powers) to enter into this Agreement, to perform all of such
Stockholder's and the Trust's agreements and obligations hereunder, and to
consummate the Merger and the other transactions contemplated hereby. This
Agreement has been duly executed and delivered by such Stockholder and the Trust
and constitutes a legal, valid, and binding obligation of such Stockholder and
the Trust, enforceable against such Stockholder and the Trust in accordance with
its terms.
6.2. GOVERNMENTAL AND OTHER THIRD-PARTY CONSENTS, NON-CONTRAVENTION, ETC.
No consent, approval, or authorization of or registration,
23
designation, declaration, or filing with any governmental authority, federal or
other, or any other person is required on the part of such Stockholder and the
Trust in connection with this Agreement, the Merger, or any of the other
transactions contemplated hereby. The execution, delivery, and performance of
this Agreement and the consummation of such transactions will not violate (i) in
the case of any Stockholder who is not a natural person or the Trust, any
provision of its Articles of Incorporation, by-laws, partnership or operating
agreement, and/or other constituting documents, (ii) any order, judgment,
injunction, award or decree of any court or state or federal governmental or
regulatory body applicable to such Stockholder and the Trust or (iii) any
judgment, decree, order, statute, rule, regulation, agreement, instrument, or
other obligation to which such Stockholder and the Trust is a party or by or to
which it or any of such Stockholder's or the Trust's assets is bound or subject.
6.3. TITLE TO SHARES, ETC. Such Stockholder owns, as of the date hereof,
and will own, as of the Closing, in each case both of record and beneficially,
the shares of the Company's capital stock and other securities of the Company,
including but not limited to any options, warrants or other rights to subscribe
for or purchase any Company securities, if any, indicated with respect to such
Stockholder in Section 5.4 of the Disclosure Schedule, all free and clear of
Liens. Such Stockholder does not own, either legally or beneficially, any other
shares of capital stock or other securities of the Company.
6.4. INVESTMENT REPRESENTATIONS. Such Stockholder and the Trust is an
"accredited investor" as defined in Rule 501(a) under the Securities Act. Such
Stockholder and the Trust have such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of the
investment in UroMed Common Stock that such Stockholder and the Trust is making
by reason of the Merger and the other transactions contemplated by this
Agreement. Such Stockholder's and the Trust's financial condition is such that
it is able to bear all economic risks of investment in UroMed Common Stock,
including a complete loss of such Stockholder's and the Trust's investment.
UroMed has provided such Stockholder and the Trust with adequate access to
financial and other information concerning UroMed (including without limitation,
UroMed's SEC Reports) and such Stockholder and the Trust has had the opportunity
to ask questions of and receive answers from UroMed concerning the Merger and
the other transactions contemplated by this Agreement and to obtain from the
UroMed additional information regarding an investment in UroMed. Such
Stockholder and the Trust will acquire shares of UroMed Common Stock in the
Merger solely for investment purposes, with no present intention of distributing
or reselling any of such shares or any interest therein. Such Stockholder and
the Trust is aware that except as set forth in this Agreement, such shares of
UroMed Common Stock will not be registered under the Securities Act, and that
neither such shares nor any interest therein may be sold, pledged, or otherwise
transferred unless such shares are registered under the Securities Act or
qualify for an exemption form such registration.
6.5. DISCLOSURE. No representation or warranty of such Stockholder and the
Trust in this Agreement (including the exhibits and schedules hereto) or in any
other agreement, instrument, certificate, or other document delivered by such
Stockholder and the Trust in connection with this Agreement, the Merger, or any
of the other
24
transactions contemplated hereby contains or will contain any untrue statement
of a material fact or omits or will omit to state a material fact required to be
stated therein or necessary to make the statements contained therein not false
or misleading. There is no fact that such Stockholder or the Trust has not
disclosed to UroMed in writing that materially adversely affects, or (so far as
such Stockholder or the Trust can now foresee) is reasonably likely to affect
materially and adversely the ability of such Stockholder to perform his or its
obligations under this Agreement or to consummate the Merger or any of the other
transactions contemplated hereby.
6.6. EXPIRATION OF REPRESENTATIONS AND WARRANTIES. The warranties and
representations contained in this Article 6 shall fully expire and terminate
eighteen months after the Closing Date.
7. REPRESENTATIONS AND WARRANTIES OF UROMED AND MERGER SUB.
UroMed and Merger Sub hereby represent and warrant as follows, subject in
each case to such exceptions as are specifically contemplated by this Agreement
or as are set forth in the applicable section of the Disclosure Schedule
prepared by UroMed and delivered to the Company:
7.1. INCORPORATION; AUTHORITY. UroMed is a corporation duly organized,
validly existing, and in good standing under the laws of the Commonwealth of
Massachusetts. Merger Sub is a corporation duly organized, validly existing, and
in good standing under the laws of the State of California. Each of UroMed and
Merger Sub has all requisite corporate power and authority to own or lease and
operate its properties and to carry on its business as now conducted. UroMed has
delivered to the Company complete and correct copies of the Articles of
Incorporation and by-laws of Merger Sub, in each case with all amendments
thereto.
7.2. AUTHORIZATION AND ENFORCEABILITY. Each of UroMed and Merger Sub has
all requisite power and full legal right and authority (including due approval
of its Board of Directors and (if necessary) its stockholder(s), respectively)
to enter into this Agreement, to perform all of its agreements and obligations
hereunder, and to consummate the Merger and the other transactions contemplated
hereby. This Agreement has been duly executed and delivered by each of UroMed
and Merger Sub and constitutes a legal, valid, and binding obligation of each of
them, enforceable against each of them in accordance with its terms.
7.3. GOVERNMENTAL AND OTHER THIRD-PARTY CONSENTS, NON-CONTRAVENTION, ETC.
Except as set forth in Section 7.3 of the Disclosure Schedule and the filing of
this Agreement and the California Merger Certificates with the California
Secretary of State, no consent, approval, or authorization of or registration,
designation, declaration, or filing with any governmental authority, federal or
other, or any other person, is required on the part of UroMed or Merger Sub in
connection with this Agreement, the Merger, or any of the other transactions
contemplated hereby. The execution, delivery, and performance of this Agreement
and the consummation of such transactions will not violate (i) any provision of
UroMed's Restated Articles of Organization or by-laws or Merger Sub's Articles
of Incorporation or by-laws, (ii) any order, judgment, injunction, award or
decree of any court or state or federal
25
governmental or regulatory body applicable to UroMed or Merger Sub, or (iii) any
judgment, decree, order, statute, rule, regulation, agreement, instrument, or
other obligation to which UroMed or Merger Sub is a party or by or to which
either of them or any of their respective assets is bound or subject.
7.4. MERGER SUB. Merger Sub has been organized for the specific purpose of
engaging in the Merger and the other transactions contemplated hereby and has
not incurred any material liabilities, conducted any material business, or
entered into any material contracts or commitments, in each case except such as
are in furtherance of or incidental to such transactions. At all times prior to
the Merger, UroMed has been, and will continue to be, in Control (as defined in
the next sentence) of Merger Sub. As used in this Section 7.4, "Control" means
control within the meaning of Section 368(c) of the Code.
7.5. UROMED'S SEC STATEMENTS, REPORTS AND DOCUMENTS. Since January 1, 1999,
UroMed has timely filed with the SEC all forms, reports, registration
statements, and documents required to be filed by it. UroMed has delivered to
the Company true and complete copies of (i) its Annual Reports on Form 10-K for
its fiscal year ended December 31, 1999 and its Quarterly Reports on Form 10-Q
for the quarters ended March 31, June 30 and September 30, 2000, respectively,
(ii) its proxy statement relating to all meetings of its stockholders (whether
annual or special) held in 2000, and (iii) all Current Reports on Form 8K filed
since January 1, 2000 (collectively, all of the foregoing documents, "UROMED'S
SEC REPORTS"). As of their respective dates, UroMed's SEC Reports complied in
all material respects with all applicable requirements of the Securities Act and
the Exchange Act and the rules and regulations promulgated thereunder, and did
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading. None
of UroMed's SEC Reports is required to be amended or supplemented as of the date
hereof. The financial statements (including any related notes) of UroMed
included in UroMed's SEC Reports were prepared in conformity with generally
accepted accounting principles applied on a consistent basis (except as
otherwise stated in the financial statements or, in the case of audited
statements, the related report of UroMed's independent certified public
accountants) and present fairly the consolidated financial position, results of
operations, changes in stockholders' equity, and cash flows, as applicable, of
UroMed and its consolidated Subsidiaries as of the dates and for the periods
indicated; subject, in the case of unaudited interim consolidated financial
statements, to condensation, the absence of footnote disclosure, and normal,
recurring end-of-period adjustments, the effect of which was not and will not be
material.
7.6. BROKERS. Except for Boston Healthcare Associates, Inc., no finder,
broker, agent, or other intermediary has acted for or on behalf of UroMed or
Merger Sub in connection with the negotiation, preparation, execution, or
delivery of this Agreement or the consummation of the transactions contemplated
hereby.
7.7. OWNERSHIP OF COMPANY STOCK. Neither UroMed nor Merger Sub, nor to the
best of UroMed's knowledge, any of its affiliates or associates (as such terms
are defined under the Exchange Act) beneficially owns, directly or indirectly,
or is a party to any agreement, arrangement, or understanding with respect to
the acquisition,
26
holding, voting, or disposition of any shares of the capital stock or other
securities of the Company.
7.8. DISCLOSURE. No representation or warranty of UroMed or Merger Sub in
this Agreement (including the exhibits and schedules hereto) or in any other
agreement, instrument, certificate, or other document delivered by UroMed and/or
Merger Sub in connection with this Agreement, the Merger, or any of the other
transactions contemplated hereby contains or will contain any untrue statement
of a material fact or omits or will omit to state a material fact required to be
stated therein or necessary to make the statements contained therein not false
or misleading.
7.9. EXPIRATION OF REPRESENTATIONS AND WARRANTIES. The warranties and
representations contained in this Article 7 shall fully expire and terminate
eighteen months after the Closing Date.
8. COVENANTS.
8.1. TAX-FREE REORGANIZATION TREATMENT. Each of UroMed, Merger Sub, the
Company and the Stockholders shall (i) make all reasonable efforts to cause the
Merger to be treated as a reorganization described in Section 368(a) of the
Code, (ii) not file any return or take any position inconsistent with the
treatment of the Merger as a reorganization described in Section 368(a) of the
Code, and (iii) comply with the record-keeping and information reporting
requirements set forth in Treas. Reg. ss. 1.368-3. The parties understand and
agree that none of them is making any representation or warranty with respect to
the tax consequences of the Merger or the other transactions contemplated by
this Agreement.
8.2. OPTIONS. Within a reasonable period of time after the Closing, UroMed
will issue at least 71,800 options (the "OPTIONS") to purchase UroMed Common
Stock to certain employees of the Company. The compensation committee of the
Board of Directors of UroMed shall have the sole discretion to determine which
employees of the Company will receive such Options, the amount of Options
awarded to each such employee and the vesting terms of such Options. The Options
will have an exercise price equal to the closing price of UroMed Common Stock on
the Closing Date.
8.3. Settlement Agreement. The Stockholders hereby agree to reimburse
UroMed and Merger Sub for the $50,000 payment to be made by UroMed on or before
August 15, 2001 pursuant to the Settlement Agreement by and among the
Stockholders, the Company, Excelon Corporation and any other party thereto dated
as of March 23, 2001 (the "SETTLEMENT AGREEMENT"). Such reimbursement shall be
due promptly from the Stockholders upon receipt of evidence from UroMed of
payment of such amount pursuant to the Settlement Agreement.
8.4. FURTHER ASSURANCES. Subject to the terms and conditions set forth in
this Agreement, from time to time after the Effective Time, each of the parties
will use his or its best reasonable efforts, as promptly as is practicable to
take or cause to be taken all actions, and to do or cause to be done all other
things, as are necessary, proper, or advisable to consummate and make effective
the Merger and the other transactions contemplated hereby.
27
9. OTHER COVENANTS. In order to induce UroMed and Merger Sub to enter into
this Agreement and to consummate the Merger and the other transactions
contemplated hereby, each of the Stockholders hereby severally agrees and
covenants as follows, which covenants will be in addition and without prejudice
to any other confidentiality, inventions, noncompetition, nonsolicitation,
and/or other agreements and covenants to which any of the Stockholders may be
subject from time to time, including without limitation under the employment
agreements referred to in Section 2.10(i).
9.1. CONFIDENTIAL INFORMATION. If the Merger is consummated, such
Stockholder will maintain the confidentiality of all confidential, sensitive, or
proprietary information of the Surviving Corporation, including without
limitation with respect to its businesses, finances, affairs, and technology,
which will be and remain the exclusive property of the Surviving Corporation;
and unless previously authorized in writing by UroMed, and except with respect
to information that has otherwise become public through no action or omission on
the part of such Stockholder, will not disclose any such information to any
third party, or use it for any purpose other than (if applicable) in the
discharge of such Stockholder's employment responsibilities in the ordinary
course of the Surviving Corporation's business.
9.2. NON-COMPETITION, ETC. Xxxxxxx Xxxxxx for a period of two years after
the Closing Date (which period will automatically be extended by a period of
time equal to any period in which such Stockholder is in breach of any
obligations under this Section 9.2; including any such extension, the
"RESTRICTED PERIOD"), and Xxxxxx the period set forth in his employment
agreement (attached hereto as Exhibits J-1 ), will not engage, directly or
indirectly (except as a stockholder, director, officer, and/or employee of
UroMed and/or the Surviving Corporation), as a proprietor, equityholder,
investor (except as a passive investor holding not more than 1% of the
outstanding capital stock of a publicly held company), lender, partner,
director, officer, employee, consultant, or representative, or in any other
capacity, anywhere in the world (such Stockholder hereby acknowledging that the
Company currently is doing business worldwide) in the business of radiation
treatment planning.
9.3. NON-SOLICITATION OF EMPLOYEES, ETC. During the Restricted Period, such
Stockholder will not directly or indirectly recruit, solicit, induce, or attempt
to induce any of the employees or independent contractors of the Surviving
Corporation to terminate their employment or contractual relationship with the
Surviving Corporation; and will not assist any other person to do so, or be a
proprietor, equityholder, investor (except as a passive investor holding not
more than 1% of the capital stock of a publicly held company), lender, partner,
director, officer, employee, consultant, or representative of any person who
does or attempts to do so.
9.4. NON-SOLICITATION OF CUSTOMERS, SUPPLIERS, ETC. During the Restricted
Period, such Stockholder will not directly or indirectly solicit, divert, take
away, or attempt to divert or take away, from the Surviving Corporation any of
the business or patronage of any of its customers, clients, accounts, vendors,
or suppliers, or induce or attempt to induce any such person to reduce the
amount of business it does with the Surviving Corporation, and will not assist
any other person to do so, or be a
28
proprietor, equityholder, investor (except as a passive investor holding not
more than 1% of the capital stock of a publicly held company), lender, partner,
director, officer, employee, consultant, or representative of any person who
does or attempts to do so.
9.5. NON-DISPARAGEMENT. Such Stockholder will not disparage, deprecate, or
make any negative comment with respect to the Surviving Corporation or its
businesses, operations, properties, or prospects.
9.6. UROMED SECURITIES. Prior to the Effective Time, neither the Company
nor any Stockholder will directly or indirectly purchase or sell any securities
of UroMed or any options, warrants or other rights with respect to securities of
UroMed.
9.7. EQUITABLE REMEDIES. Such Stockholder hereby acknowledges that any
breach by him or her of his obligations under this Section 9 would cause
substantial and irreparable damage to UroMed and the Surviving Corporation, and
that money damages would be an inadequate remedy therefor, and accordingly,
acknowledges and agrees that each of UroMed and the Surviving Corporation will
be entitled to an injunction, specific performance, and/or other equitable
relief to prevent the breach of such obligations (in addition to all other
rights and remedies to which they may be entitled in respect of any such
breach).
9.8. MODIFICATION. In the event that a court of competent jurisdiction
determines that any of the provisions of this Section 9 would be unenforceable
as written because they cover too extensive a geographic area, too broad a range
of activities, or too long a period of time, or otherwise, then such provisions
will automatically be modified to cover the maximum geographic area, range of
activities, and period of time as may be enforceable, and in addition, such
court is hereby expressly authorized so to modify this Agreement and to enforce
it as so modified. No invalidity or unenforceability of any section of this
Agreement or any portion thereof will affect the validity or enforceability of
any other section or of the remainder of such section.
10. INDEMNIFICATION.
10.1. INDEMNIFICATION BY UROMED AND MERGER SUB. Subject to the limitations
set forth in Section 10.6 hereof, UroMed and Merger Sub, jointly and severally,
will indemnify, defend, and hold harmless each of the Stockholders and the
Trust, and if the Merger is not consummated, also the Company, and each of their
respective directors, officers, employees, representatives, and other
Affiliates, from and against any and all Damages related to or arising, directly
or indirectly, out of or in connection with any breach by UroMed and/or Merger
Sub of any representation, warranty, covenant, agreement, obligation, or
undertaking made by UroMed and/or Merger Sub in this Agreement (including any
schedule or exhibit hereto), or any other agreement, instrument, certificate, or
other document delivered by or on behalf of UroMed and/or Merger Sub in
connection with this Agreement, the Merger, or any of the other transactions
contemplated hereby.
10.2. INDEMNIFICATION BY THE STOCKHOLDERS AND THE COMPANY. Subject to the
limitations set forth in Section 10.6 hereof, each of the Stockholders and the
Trust,
29
jointly and severally, will indemnify, defend, and hold harmless UroMed and
Merger Sub, and if the Merger is consummated, also the Surviving Corporation,
and each of their respective directors, officers, employees, representatives,
and other Affiliates, from and against any and all Damages related to or
arising, directly or indirectly, out of or in connection with:
(a) any breach by the Company of any representation, warranty, covenant,
agreement, obligation, or undertaking made by the Company in this Agreement
(including any schedule or exhibit hereto), or any other agreement, instrument,
certificate, or other document delivered by or on behalf of the Company in
connection with this Agreement, the Merger, or any of the other transactions
contemplated hereby;
(b) any inaccuracies in the Closing Date Pro Forma Balance Sheet, including
without limitation any liabilities of any nature of the Company relating to or
arising out of the period prior to the Closing to the extent not reflected on
the Closing Date Pro Forma Balance Sheet, including without limitation any claim
for sales tax or other taxes relating to any period prior to the Closing;
(c) any matters disclosed in Section 5.17 of the Disclosure Schedule (other
than the Excelon litigation, which will be settled prior to Closing pursuant to
a settlement agreement in form and substance satisfactory to UroMed) to the
extent the aggregate amount of Damages incurred in connection with such matters
exceeds $150,000;
(d) any actual or alleged claims for brokerage fees owed to any broker
employed by the Company in connection with the transactions contemplated by this
Agreement; or
(e) if the Merger is consummated, any expenses of the Company or the
Stockholders and the Trust in excess of $25,000 which are directly attributable
to the transactions contemplated by this Agreement.
10.3. INDEMNIFICATION BY EACH STOCKHOLDER AND THE TRUST. Subject to the
limitations set forth in Section 10.6 hereof, each of the Stockholders and the
Trust, severally and not jointly, will indemnify, defend, and hold harmless
UroMed and Merger Sub, and if the Merger is consummated, also the Surviving
Corporation, and each of their respective directors, officers, employees,
representatives, and other Affiliates, from and against any and all Damages
related to or arising, directly or indirectly, out of or in connection with any
breach by such Stockholder or the Trust of any representation, warranty,
covenant, agreement, obligation, or undertaking made by such Stockholder or the
Trust in this Agreement (including any schedule or exhibit hereto), or any other
agreement, instrument, certificate, or other document delivered by or on behalf
of such Stockholder or the Trust in connection with this Agreement, the Merger,
or any of the other transactions contemplated hereby. The foregoing
indemnification includes without limitation any failure of the Stockholders to
reimburse UroMed pursuant to Section 8.3 herein.
10.4. CLAIMS. In the event that any party hereto (the "INDEMNIFIED PARTY")
desires to make a claim against another party hereto (the "INDEMNIFYING PARTY,"
which
30
term includes all indemnifying parties if more than one) in connection with any
third-party litigation, arbitration, action, suit, proceeding, claim, or demand
at any time instituted against or made upon it for which it may seek
indemnification hereunder (a "THIRD-PARTY Claim"), the Indemnified Party will
notify the Indemnifying Party of such Third-Party Claim and of its claims of
indemnification with respect thereto, PROVIDED, that failure to give such notice
will not relieve the Indemnifying Party of its indemnification obligations under
this section except to the extent, if any, that the Indemnifying Party has
actually been prejudiced thereby. Upon receipt of such notice from the
Indemnified Party, the Indemnifying Party will be entitled to participate in the
defense of such Third-Party Claim. If each of the following conditions is
satisfied, the Indemnifying Party may assume the defense of such Third-Party
Claim, and in the case of such an assumption the Indemnifying Party will have
the authority to negotiate, compromise, and settle such Third-Party Claim,
PROVIDED, that the Indemnifying Party will not agree to any settlement of such
Third-Party Claim that does not include an unconditional release of all
liability of each Indemnified Party with respect to such Third-Party Claim:
(i) The Indemnifying Party confirms in writing that it is obligated
hereunder to indemnify the Indemnified Party in full with respect to such
Third-Party Claim; and
(ii) The Indemnified Party does not give the Indemnifying Party
written notice that the Indemnified Party's counsel has determined, in its
reasonable opinion, that an irreconcilable conflict of interest make
separate representation by the Indemnified Party's counsel advisable.
The Indemnified Party will retain the right to employ its own counsel and
to participate in the defense of any Third-Party Claim, the defense of which has
been assumed by an Indemnifying Party pursuant hereto, but such Indemnified
Party will bear and will be solely responsible for its own costs and expenses in
connection with such participation.
10.5. PAYMENT OF CLAIMS. In the event of any claims for indemnification
hereunder, the claimant will advise the party or parties who are required to
provide indemnification therefor in writing of the amount and circumstances
surrounding such claim. With respect to liquidated claims, if within thirty days
the other party has not contested such claim in writing, such other party will
pay the full amount thereof within ten days after the expiration of such period.
Any amount payable by an Indemnifying Party in respect of indemnification
pursuant to this Agreement may be set off and deducted by the Indemnified Party
from and against any amounts that may otherwise be or become payable by such
Indemnified Party to such Indemnifying Party. In the case of a Claim made by
UroMed, UroMed shall (A) proceed, in any order and in whole or in part, by claim
against the (i) Escrowed Shares, (ii) amounts payable by it in accordance with
the Merger Note, (iii) amounts payable by it in accordance with the promissory
note dated as of the date herewith issued by UroMed in favor of Xxxxxx Xxxxxx or
(B) take any other remedies available to it. The parties agree that, to the
greatest extent permitted by applicable law, the payment of any indemnity
hereunder shall be treated as an adjustment to the merger consideration paid by
UroMed hereunder.
31
10.6. LIMITATIONS OF LIABILITY.
(A) THRESHOLD. No Indemnifying Party will be required to indemnify an
Indemnified Party hereunder until such time as the aggregate amount of Damages
for which (i) UroMed and the Surviving Corporation, and their respective
directors, officers, employees, representatives, and other Affiliates, on the
one hand, or (ii) the Stockholders and their respective directors, officers,
employees, representatives, and other Affiliates, as the case may be, on the
other, are otherwise entitled to indemnification pursuant to this Agreement
exceeds $25,000, whereupon such Indemnified Parties will be entitled to
indemnification for the full amount of all such Damages, without regard to such
threshold amount. Notwithstanding anything to the contrary in this Section 10.6,
the limits imposed by Section 10.6(a) shall not apply to any Damages arising out
of or in connection with any breach by the Company or the Stockholders of any of
their respective representations, warranties, covenants, agreements or
obligations under Section 5.13 of this Agreement (collectively, the "UNLIMITED
CLAIMS").
(B) MAXIMUM LIABILITY. If the Merger is consummated, the maximum liability
of any Stockholder for indemnification hereunder (other than with respect to
Unlimited Claims) will not exceed the value at the Closing Date of the shares of
UroMed Common Stock (including Escrowed Shares) as determined by the closing
price of the UroMed Common Stock on that date, into which such Stockholder's
shares of Company Stock are converted in the Merger, PLUS the original principal
amount of the Merger Note issued to such Stockholder, PLUS, in the case of
Xxxxxx, the total amount in cash paid to him by UroMed pursuant to Section
2.9(a) plus the total principal amount of the promissory note issued to him
pursuant to Section 2.9(a).
(C) TIME LIMIT. No Indemnifying Party will be liable for any Damages
hereunder unless a written claim for indemnification is given by the Indemnified
Party to the Indemnifying Party with respect thereto prior to the eighteen (18)
month anniversary of the Closing Date, except that (i) any claim under Section
5.13 or under Section 10.2(b) through (e) relating to sales taxes may be made at
any time prior to the expiration of five (5) years from the Closing and (ii) any
other claim under Section 5.13 or under 10.2(b) through (e) may be made at any
time prior to the expiration of the applicable statute of limitations.
11. RELEASES. If the Merger is consummated, then effective as of the
Effective Time, each of the Stockholders and the Trust, for himself, herself or
itself and his, her or its heirs, legatees, successors, and assigns, hereby
fully and irrevocably releases, remises, and discharges the Surviving
Corporation and its officers, directors, employees, agents, representatives,
successors, and assigns from any and all Damages, regardless of whether known,
unknown, or unknowable, and regardless of whether absolute, contingent, or
otherwise, and regardless of whether at law, in equity, or otherwise, without
limitation, whether now existing or arising in the future, in each case to the
extent based on actions, omissions, and/or events occurring at or before the
Effective Time, including without limitation all rights to indemnification
and/or contribution, but excluding Damages arising expressly under this
Agreement. Furthermore, each of such releasing persons hereby irrevocably agrees
not to xxx, or to
32
commence, maintain, or aid in the prosecution of any litigation, arbitration, or
other action or proceeding against or adverse to any of such released persons,
or otherwise to seek any recourse against any of such released persons, in
respect of any matter hereby released or purported or attempted to be released.
12. DEFINITIONS.
12.1. CERTAIN DEFINED TERMS. As used in this Agreement, the following terms
have the following respective meanings:
"Affiliate" means, with respect to any person, any other person (i) that
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with such person, (ii) that directly
or indirectly holds a material interest in such person, or in which such person
directly or indirectly holds a material interest, or (iii) who is a family
member or relative of any person described in the preceding clauses (i) or (ii).
When used with reference to the Company, the term "Affiliate" includes the
Stockholders.
"Damages" means all damages, losses, claims, demands, actions, causes of
action, suits, litigations, arbitrations, liabilities, costs, and expenses,
including court costs and the reasonable fees and expenses of legal counsel.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC thereunder, as in effect as of the relevant
time of reference.
"Indebtedness," as applied to any person, means (a) all indebtedness of
such person for borrowed money, whether current or funded, or secured or
unsecured, (b) all indebtedness of such person for the deferred purchase price
of property or services represented by a note or other security, (c) all
indebtedness of such person created or arising under any conditional sale or
other title retention agreement (even if the rights and remedies of the seller
or lender under such agreement in the event of default are limited to
repossession or sale of specific property), (d) all indebtedness of such person
secured by a purchase money mortgage or other Lien to secure all or part of the
purchase price of property subject to such mortgage or other Lien, (e) all
obligations of such person under leases that have been or must be, in accordance
with generally accepted accounting principles, recorded as capital leases in
respect of which such person is liable as lessee, (f) any liability of such
person in respect of banker's acceptances or letters of credit, and (g) all
indebtedness referred to in clauses (a), (b), (c), (d), (e), or (f) above that
is directly or indirectly guaranteed by such person or which such person has
agreed (contingently or otherwise) to purchase or otherwise acquire or in
respect of which such person has otherwise assured a creditor against loss.
"knowledge," when used to qualify a representation or warranty of the
Company, has the following meaning: Where a representation or warranty is made
to the best of the Company's knowledge, or with a similar qualification, the
Company will be deemed to have knowledge of any matter with respect to which
Xxxxxx Xxxxxx, Xxxxxxx Xxxxxx or Xxx Xxxxx has actual knowledge or would have
knowledge after conducting a reasonable investigation.
33
"Liens" means any and all liens, claims, mortgages, security interests,
charges, encumbrances, and restrictions on transfer of any kind, except, in the
case of references to securities, those arising under applicable securities laws
solely by reason of the fact that such securities were issued pursuant to
exemptions from registration under such securities laws.
"person" (regardless of whether capitalized) means any natural person,
entity, or association, including without limitation any corporation,
partnership, limited liability company, government (or agency or subdivision
thereof), trust, joint venture, or proprietorship.
"SEC" means the United States Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC thereunder, as in effect as of the relevant
time of reference.
"Subsidiary" or "Subsidiaries" means, with respect to any person, any
corporation a majority (by number of votes) of the outstanding shares of any
class or classes of which will at the time be owned by such person or by a
Subsidiary of such person, if the holders of the shares of such class or classes
(a) are ordinarily, in the absence of contingencies, entitled to vote for the
election of a majority of the directors (or persons performing similar
functions) of the issuer thereof, even though the right so to vote has been
suspended by the happening of such a contingency, or (b) are at the time
entitled, as such holders, to vote for the election of a majority of the
directors (or persons performing similar functions) of the issuer thereof,
whether or not the right so to vote exists by reason of the happening of a
contingency.
"Tax" or "Taxes" means any federal, state, local, or foreign income, gross
receipts, franchise, estimated, alternative minimum, add-on minimum, sales, use,
transfer, registration, value added, excise, natural resources, severance,
stamp, occupation, premium, windfall profit, environmental, customs, duties,
real property, personal property, capital stock, intangibles, social security,
unemployment, disability, payroll, license, employee, or other tax or levy, of
any kind whatsoever, including any interest, penalties, or additions to tax in
respect of the foregoing.
"Tax Return" means any return, declaration, report, claim for refund,
information return, or other document (including any related or supporting
estimates, elections, schedules, statements, or information) filed or required
to be filed in connection with the determination, assessment, or collection of
any Tax or the administration of any laws, regulations, or administrative
requirements relating to any Tax.
"UroMed Common Stock" means the common stock, no par value per share,
of UroMed.
12.2. TERMS DEFINED ELSEWHERE. The following terms are defined herein in
the sections identified below:
34
TERM SECTION TERM SECTION
---- ------- ---- -------
Affiliate's Agreement(s) 2.10 Exchange Ratio 2.5(a)
Agreement Preamble Hazardous Substances 5.15(c)
Awe 2.9(c) Xxxxxx 2.9(a)
X. Xxxxxx 2.9(d) Indemnified Party 10.4
California Merger Indemnifying Party 10.4
Certificates 1 Intellectual Properties 5.10
CERCLA 5.15(b) IRS 5.14(b)
Certificate 3.1 UroMed Preamble
Closing 1 UroMed's SEC Reports 7.5
Closing Date 1 Merger Recitals
Code Recitals Merger Sub Preamble
Company Preamble Merger Sub Merger Certificate 1
Company Merger Most Recent Balance Sheet 5.7
Certificate 1 Options 8.3
Company Option 4 PBGC 5.14(d)(ii)
Company Stock 2.5(a) Xxxxx 2.9(b)
contract 5.18 RCRA 5.15(b)
CGCL 1 Restricted Period 9.2
Dissenting Shares 2.7 Registration Rights Agreement 4
Effective Time 1 Rollin 2.9(e)
Employee Benefit Plan 5.14(a) XXXX 5.15(b)
Environmental Laws 5.15(b) Stockholder(s) Preamble
EPA 5.15(c) Stockholder Representative 13.3
ERISA 5.14(c) Third-Party Claim 10.4
Escrow Agent 3.3 Trust Preamble
Escrow Agreement 3.3 UroMed Merger Certificate 1
Escrowed Shares 3.3
13. GENERAL.
13.1. COOPERATION. Each of the parties will cooperate with the others and
use its best reasonable efforts to prepare all necessary documentation, to
effect all necessary filings, and to obtain all necessary permits, consents,
approvals, and authorizations of all governmental bodies and other third parties
necessary to consummate the transactions contemplated by this Agreement.
13.2. SURVIVAL OF PROVISIONS. The provisions of this Agreement, including
without limitation the representations, warranties, and covenants of the
parties, and the provisions of the other documents executed and delivered in
connection with this Agreement, the Merger, and the other transactions
contemplated hereby will be deemed material, and, notwithstanding any
investigation by or on behalf of any other party, will be deemed to have been
relied on by each other party, and subject to the provisions of Section 10.6(c)
hereof, will survive the Closing and the consummation of the Merger and the
other transactions contemplated hereby.
35
13.3. STOCKHOLDER REPRESENTATIVE. Each of the Stockholders and the Trust
hereby appoints Xxxxxx Xxxxxx (the "STOCKHOLDER REPRESENTATIVE"), as such
Stockholder's and Trust's agent to receive on such Stockholder's and the Trust's
behalf notices and other correspondence and service of copies of any summons,
complaint, and/or other process that may be served in any litigation, action, or
other proceeding. Such service of process may be made by delivery of a copy of
such process to the Stockholder Representative in accordance with Section 13.6,
and each of the Stockholders and the Trust hereby irrevocably authorizes and
directs the Stockholder Representative to accept such service on such
Stockholder's and the Trust's behalf. Each of the Stockholders and the Trust
hereby irrevocably agrees that a final judgment in any action or proceeding will
be conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law. Nothing in this section will affect the
right of any person to serve legal process in any other manner permitted by law.
13.4. EXPENSES. UroMed, on the one hand, and the Company and the
Stockholders and the Trust, on the other, will be responsible for and will pay
all of their own respective expenses in connection with the negotiation and
preparation of this Agreement and the consummation of the Merger and the other
transactions contemplated hereby; provided, however, if the Merger is
consummated UroMed will assume up to $25,000 of the expenses of the Company and
the Stockholders which are directly attributable to the transactions
contemplated by this Agreement.
13.5. BENEFITS OF AGREEMENT; NO ASSIGNMENTS; NO THIRD-PARTY BENEFICIARIES.
(a) This Agreement will bind and inure to the benefit of the parties hereto
and their respective heirs, successors, and permitted assigns.
(b) No party will assign any rights or delegate any obligations hereunder
without the consent of the other parties, and any attempt to do so will be void.
(c) Nothing in this Agreement is intended to or will confer any rights or
remedies on any person other than the parties hereto and their respective heirs,
successors, and permitted assigns.
13.6. NOTICES. All notices, requests, payments, instructions, or other
documents to be given hereunder will be in writing or by written
telecommunication, and will be deemed to have been duly given if (i) delivered
personally (effective upon delivery), (ii) mailed by registered or certified
mail, return receipt requested, postage prepaid (effective five business days
after dispatch), (iii) sent by a reputable, established courier service that
guarantees next business day delivery (effective the next business day), or (iv)
sent by telecopier followed within 24 hours by confirmation by one of the
foregoing methods (effective upon receipt of the telecopy in complete, readable
form), addressed as follows (or to such other address as the recipient party may
have furnished to the sending party for the purpose pursuant to this section):
(a) If to UroMed, Merger Sub, and/or (after the Effective Time), the
Surviving Corporation to:
36
UroMed Corporation
0000 Xxxxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxxxxx
President and CEO
Telecopier No. (000) 000-0000
with a copy sent at the same time and by the same means to:
Xxxx X. Xxxxxxxxxxxx, Esq.
Xxxxxxx Xxxx LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telecopier No. (000) 000-0000
(b) If to any of the Stockholders and/or (before the Effective Time)
the Company, to the Stockholder Representative in care of:
SSGI
0000 Xxxxxxxxx Xxxxx, Xxxxx 00
Xxxxx, Xxxxxxxxxx 00000
Telecopier No. (000) 000-0000
with a copy sent at the same time and by the same means to:
W. Xxxxxxx Xxxxxx, Esq.
Xxxxx & Xxxxx, P.C.
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Telecopier No.(000) 000-0000
13.7. PUBLIC STATEMENTS OR RELEASES. Each of the parties hereto agrees that
prior to the consummation of the Merger no party to this Agreement will make,
issue or release any public announcement, statement or acknowledgment of the
existence of, or reveal the status of, this Agreement or the transactions
provided for herein, without first obtaining the prior written consent of the
other party hereto. Nothing contained in this Section 13.7 shall prevent either
party from making such disclosures as such party may consider necessary to
satisfy such party's legal or contractual obligations.
13.8. COUNTERPARTS. This Agreement may be executed by the parties in
separate counterparts, each of which when so executed and delivered will be an
original, but all of which together will constitute one and the same agreement.
In pleading or proving this Agreement, it will not be necessary to produce or
account for more than one such counterpart.
37
13.9. CAPTIONS. The captions of sections or subsections of this Agreement
are for reference only and will not affect the interpretation or construction of
this Agreement.
13.10.EQUITABLE RELIEF. Each of the parties hereby acknowledges that any
breach by him or it of his or its obligations under this Agreement would cause
substantial and irreparable damage to the parties, and that money damages would
be an inadequate remedy therefor, and accordingly, acknowledges and agrees that
each other party will be entitled to an injunction, specific performance, and/or
other equitable relief to prevent the breach of such obligations.
13.11. CONSTRUCTION. The language used in this Agreement is the language
chosen by the parties to express their mutual intent, and no rule of strict
construction will be applied against any party.
13.12. WAIVERS. No waiver of any breach or default hereunder will be valid
unless in a writing signed by the waiving party. No failure or other delay by
any party exercising any right, power, or privilege hereunder will be or operate
as a waiver thereof, nor will any single or partial exercise thereof preclude
any other or further exercise thereof or the exercise of any other right, power,
or privilege.
13.13. ENTIRE AGREEMENT. This Agreement, together with the exhibits and
schedules hereto and the other agreements, instruments, certificates, and other
documents referred to herein as having been or to be executed and delivered in
connection with the transactions contemplated hereby, contains the entire
understanding and agreement among the parties, and supersedes any prior
understandings or agreements among them, or between or among any of them, with
respect to the subject matter hereof. Notwithstanding the foregoing, the
provisions of the Confidentiality Agreement dated as of November 20, 2000 by and
between the Company and UroMed, will survive the execution and delivery of this
Agreement and the consummation of the Merger.
13.14. GOVERNING LAW. This Agreement will be governed by and interpreted
and construed in accordance with the internal laws of the Commonwealth of
Massachusetts, as applied to contracts under seal made, and entirely to be
performed, within the Commonwealth of Massachusetts, and without reference to
principles of conflicts or choice of laws.
13.15. ARBITRATION.
(a) All disputes or claims arising under or in any way relating to this
Agreement or to the acquisition of SSGI by UroMed shall be settled by
arbitration before a panel of three arbitrators (with one designated by UroMed
and one designated by the Stockholders, and the third arbitrator designated by
the first two) pursuant to the rules of the American Arbitration Association.
Any arbitrator designated by UroMed or the Stockholders must be an "INDEPENDENT
PERSON." For the purposes of this Section 13.15, an "Independent Person" shall
be an individual who is not and has not been (i) a director, officer, employee,
agent or shareholder of any party
38
hereto, (ii) a consultant to any party hereto, (iii) a person with a direct or
indirect financial interest in any contract with any party hereto, (iv) a
director, officer or key employee of a company at a time when such company was
party to a contract with any party hereto, or (v) a relative of any person
referred to in clauses (i), (ii), (iii) or (iv) above. As used in the
immediately preceding sentence, the term "any party hereto" shall be deemed to
include any Affiliates of the parties hereto. Any such arbitration shall take
place in Boston, Massachusetts. Arbitration may be commenced at any time by
UroMed or the Stockholders giving written notice to the other that such dispute
has been referred to arbitration under this Section 13.15. The third arbitrator
shall be selected as prescribed above, but if the first two arbitrators do not
so agree within 30 days after the date of the notice referred to above, the
selection shall be made pursuant to the rules of the American Arbitration
Association from the Commercial Arbitration Panel maintained by such
Association. Any award rendered by the arbitrators shall be conclusive and
binding upon the parties hereto; PROVIDED, HOWEVER, that any such award shall be
accompanied by a written opinion of the arbitrators giving the reasons for the
award. In making such award, the arbitrators shall be authorized to award
interest on any amount awarded. This provision for arbitration shall be
specifically enforceable by the Stockholders and UroMed and the decision of the
arbitrators in accordance herewith shall be final and binding and there shall be
no right of appeal therefrom. Each of the Stockholders and UroMed shall pay its
own expenses of arbitration and the expenses of the arbitrators shall be equally
shared; PROVIDED, HOWEVER, that if in the opinion of the arbitrators any claim
for indemnification or any defense or objection thereto was frivolous or in bad
faith, the arbitrators may assess, as part of the award, all or any part of the
arbitration expenses of the other party (including reasonable attorneys' fees)
and of the arbitrators against the party raising such unreasonable claim,
defense or objection.
(b) To the extent that arbitration may not be legally permitted hereunder
and the Stockholders and UroMed do not at the time of such dispute or claim
mutually agree to submit such dispute or claim to arbitration either the
Stockholders or UroMed may commence a civil action in a court of appropriate
jurisdiction to resolve disputes or claims hereunder. Nothing contained in this
Section 13.15 shall prevent the Stockholders and UroMed from settling any
dispute or claim by mutual agreement at any time.
(c) Neither the Stockholders nor UroMed shall be precluded hereby from
seeking, from the courts of any jurisdiction, provisional or equitable remedies
of a type not available in arbitration, including without limitation, temporary
restraining orders and preliminary or permanent injunctions, nor shall the
pursuit of such provisional or equitable relief constitute a waiver or
modification of such party's right and obligation to arbitrate any related or
unrelated dispute which is otherwise subject to arbitration under this
Agreement, unless such waiver is expressed in writing and signed by such party.
In the event any person not a party to this Agreement shall commence any
interpleader or similar action which either directly or indirectly raises issues
which are subject to arbitration hereunder, the Stockholders and UroMed shall
seek a stay of such proceedings pending arbitration in accordance with this
Agreement.
(d) In the event of any Third-Party Claim where the Indemnifying Party does
not assume the defense of such Third Party Claim, nothing in this Section 13.15
39
shall prevent the Indemnified Party from impleading the Indemnifying Party or
otherwise joining the Indemnifying Party to any litigation relating to such
Third-Party Claim.
Executed and delivered under seal as of the date first above written.
UROMED: UROMED CORPORATION
By /s/ Xxxxxx Xxxxxxxxxx
------------------------------------------
Name: Xxxxxx Xxxxxxxxxx
Title: President
MERGER SUB: PROVIDENCE MERGER CORPORATION
By /s/ Xxxxxx Xxxxxxxxxx
------------------------------------------
Name: Xxxxxx Xxxxxxxxxx
Title: President
COMPANY: SSGI
By /s/ Xxxxxx Xxxxxx
------------------------------------------
Name: Xxxxxx Xxxxxx
Title: President
STOCKHOLDERS: /s/ Xxxxxx Xxxxxx
--------------------------------------------
Xxxxxx Xxxxxx
/s/ Xxxxxxx Xxxxxx
--------------------------------------------
Xxxxxxx Xxxxxx
TRUST:
XXXXXX FAMILY TRUST
By: /s/ Xxxxxx Xxxxxx
----------------------------------------
Xxxxxx Xxxxxx, Trustee
By: /s/ Xxxxxxx Xxxxxx
----------------------------------------
Xxxxxxx Xxxxxx, Trustee
2
EXHIBITS AND SCHEDULES
EXHIBITS
A Company Merger Certificate
A-2 Merger Sub Merger Certificate
A-3 UroMed Merger Certificate
B Articles of Incorporation of the Surviving Corporation
C By-laws of the Surviving Corporation
D Officers and Directors of the Surviving Corporation
E Merger Note
F Promissory Note
G Company Pro Forma Balance Sheet as of January 31, 2001
H Form of Closing Certificate
I Affiliate's Agreements
J-1, J-2 Employment Agreements
K Legal Opinion of Xxxxxxx Xxxx LLP
L Legal Opinion of Xxxxx & Xxxxx
M Escrow Agreement
N Registration Rights and Voting Agreement
SCHEDULES
Disclosure Schedule
