EXHIBIT 2.1
Merger Agreement and Plan of Reorganization dated August 15, 2000
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MERGER AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT dated as of August 15, 2000, among LIGHTTOUCH VEIN & LASER,
INC., a Nevada corporation ("LIGHTTOUCH"); LIGHTTOUCH ACQUISITION CORP., a
Delaware corporation and a wholly-owned subsidiary of LightTouch ("ACQUISITION
CORP"); VANISHING POINT, INC., a Delaware corporation ("VANISHING POINT").
WHEREAS, the parties intend to effect a merger of Acquisition Corp into
Vanishing Point in accordance with this Agreement and the laws of the State of
Delaware, which merger is intended to qualify as a tax-free reorganization
within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as
amended (the "Code"); and
WHEREAS, upon consummation of such merger, Acquisition Corp will cease
to exist, and Vanishing Point will become a wholly-owned subsidiary of
LightTouch.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, the parties hereto agree that Acquisition Corp shall be
merged into Vanishing Point in accordance with the laws of the State of
Delaware, upon the terms and subject to the conditions set forth in this
Agreement (the "MERGER").
ARTICLE 1
THE MERGER
Section 1.1. CLOSING AND EFFECTIVE DATE OF MERGER. Subject to the
provisions of Articles 6, 7 and 8, at a closing to be held at the offices of
Xxxxxxx Xxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, on such date, on or
prior to the termination referred to in Article 11, as may be agreed to by the
parties (the "CLOSING DATE"), Vanishing Point and Acquisition Corp shall cause
to be definitively executed and delivered to one another a Certificate of Merger
substantially in the form of EXHIBIT A attached hereto (the "CERTIFICATE OF
MERGER") and cause such document to be filed with the Secretary of State of the
State of Delaware (the "DELAWARE SECRETARY OF STATE") in order to cause the
Merger contemplated by this Agreement to become effective under the laws of the
State of Delaware. The Merger shall become effective on the date and at the time
of the filing of the Certificate of Merger with the Delaware Secretary of State
(the "EFFECTIVE TIME"). References herein to the "SURVIVING CORPORATION" shall
mean Vanishing Point at and after the Effective Time.
Section 1.2. TERMS AND CONDITIONS OF MERGER. At the Effective Time,
pursuant to this Agreement and the Certificate of Merger:
(a) Acquisition Corp shall be merged into Vanishing Point and
the separate existence of Acquisition Corp shall cease.
(b) Vanishing Point shall continue as the Surviving Corporation
organized under the laws of the State of Delaware, the authorized capital stock
of which shall be 1,000 shares of common stock, par value $.01 per share.
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(c) The Certificate of Incorporation of Vanishing Point as in
effect immediately prior to the Effective Time shall be amended and restated in
its entirety as provided in the Certificate of Merger, and such Amended and
Restated Certificate of Incorporation shall be the Certificate of Incorporation
of the Surviving Corporation.
(d) The By-Laws of the Acquisition Corp in effect immediately
prior to the Effective Time shall be the By-Laws of the Surviving Corporation
until amended in accordance with applicable law or such By-Laws.
(e) Each share of Vanishing Point Common Stock issued and
outstanding immediately prior to the Effective Time (other than any such shares
held directly or indirectly by LightTouch and any such shares owned by Vanishing
Point) shall become and be converted into the right to receive the Conversion
Number of shares of the Common Stock of LightTouch. As used herein, the
"Conversion Number" has the meaning set forth on Schedule 1.2(e) hereto. As of
the Effective Time, each share of Vanishing Point Common Stock held directly or
indirectly by LightTouch and each share owned by Vanishing Point shall be
cancelled, retired and cease to exist, and no payment shall be made with respect
thereto.
(f) Each issued and outstanding share of the capital stock of
Acquisition Corp shall be converted into and represent the right to receive one
share of common stock, par value $.01 per share, of the Surviving Corporation,
whereupon LightTouch shall own all of the issued and outstanding capital stock
of the Surviving Corporation.
(g) The outstanding Vanishing Point warrants described on
SCHEDULE 1.2(G) (each a "VANISHING POINT WARRANT" and collectively, the
"VANISHING POINT WARRANTS") shall be assumed by LightTouch; accordingly, from
and after the Effective Time, (i) the number of Shares of Common Stock of
LightTouch subject to each such assumed Vanishing Point Warrant shall be equal
to the number of shares of Common Stock or Preferred Stock of Vanishing Point
that was subject to such Vanishing Point Warrant multiplied by the Conversion
Number, rounded up to the nearest whole number of shares of Common Stock of
LightTouch, and (ii) the per share exercise price for each such assumed
Vanishing Point Warrant shall be equal to the exercise price per share of Common
Stock or Preferred Stock of Vanishing Point subject to such Vanishing Point
Warrant divided by the Conversion Number rounded up to the nearest whole cent.
All other terms of each Vanishing Point Warrant shall remain unchanged and be
assumed by LightTouch on the terms set forth therein to the extent reasonably
possible.
(h) All of the estate, properties, rights, privileges, powers
and franchises of Vanishing Point and Acquisition Corp and all of their
property, real, personal and mixed, and all debts due on whatever account to
either of Vanishing Point or Acquisition Corp shall vest in the Surviving
Corporation, without further act or deed, except as contemplated by this
Agreement.
(i) The Surviving Corporation shall be responsible for all of
the liabilities and obligations of each of Vanishing Point and Acquisition Corp
and the liabilities of Vanishing Point and Acquisition Corp shall not be
affected nor shall the rights of creditors thereof or of any Persons dealing
with Vanishing Point or
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Acquisition Corp be impaired. For purposes of this Agreement, "PERSON" shall
mean any corporation, association, partnership, limited liability company,
organization, business, individual, government or political subdivision thereof
or governmental agency.
(j) From and after the Effective Time, the Boards of Directors
of the Surviving Corporation and of LightTouch will consist of the individuals
listed as Directors on Schedule 1.2(j), each such Director to hold office,
subject to the applicable provisions of the Certificate of Incorporation and the
By-Laws of the Surviving Corporation or LightTouch, as applicable, until the
next annual meeting of stockholders of the Surviving Corporation and until his
or her successor shall be duly elected or appointed and shall duly qualify. The
individuals listed as Officers on Schedule 1.2(i) shall be the officers of the
Surviving Corporation and LightTouch and each of their respective subsidiaries
and shall act as such and hold the offices set forth opposite their names until
their respective successors are duly elected or appointed and qualified. If, at
or after the Effective Time, a vacancy shall exist in the Board of Directors or
in any of the offices of the Surviving Corporation or LightTouch by reason of
death or inability to act, or for any other reason, such vacancy may be filled
in the manner provided in the By-Laws of the Surviving Corporation or
LightTouch, as applicable.
(k) LightTouch shall issue to Venture Strategy Partners LP, as
a fee for services rendered to Vanishing Point, that number of shares of the
Common Stock of LightTouch that is equal to the product of (i) the Aggregate
Vanishing Point Allocation (as defined on Schedule 1.2(e)) multiplied by (ii)
eight percent (8%).
Section 1.3. OPTIONS. (a) Each stock option granted by Vanishing Point,
including but not limited to options granted pursuant to Vanishing Point's 1997
Stock Plan (as amended to date, the "VANISHING POINT OPTION PLAN"), in each case
to the extent outstanding and unexercised immediately prior to the Effective
Time, shall be converted into an option to purchase shares of LightTouch Common
Stock with the following terms:
(i) The number of shares of LightTouch Common Stock
subject to such option shall be equal to the product of the number of
shares of Vanishing Point Common Stock previously subject thereto and
the Conversion Number, rounded down to the nearest whole share; and
(ii) The exercise price per share of LightTouch Common
Stock shall be equal to the exercise price per share of Vanishing Point
Common Stock previously subject thereto divided by the Conversion
Number, rounded up to the nearest cent; and
(iii) The option shall have the same vesting schedule as
the Vanishing Point option and such other rights as determined pursuant
to Section 5.4.
Section 1.4. EXCHANGE OF STOCK.
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(a) EXCHANGE OF STOCK. As soon as practicable after the
Effective Time, LightTouch shall mail to each record holder of a certificate or
certificates which, immediately prior to the Effective Time, represent shares of
Vanishing Point Common Stock (the "VANISHING POINT CERTIFICATES"), (i) a notice
and a form letter of transmittal (which shall specify that delivery shall be
effected, and risk of loss and title to the Vanishing Point Certificates shall
pass, only upon proper delivery of the Vanishing Point Certificates to
LightTouch) and (ii) instructions for use in effecting the surrender of such
Vanishing Point Certificates in exchange for certificates representing
LightTouch Common Stock. Upon surrender of a Vanishing Point Certificate to
LightTouch for exchange, together with a duly executed letter of transmittal and
such other documents as may be reasonably required by LightTouch, the holder of
such Vanishing Point Certificate shall be entitled to receive in exchange
therefor certificates representing the number of whole shares of LightTouch
Common Stock that such holder has the right to receive pursuant to the
provisions of this Section 1, and the Vanishing Point Certificate so surrendered
shall be canceled.
(b) GENERAL. Until surrendered as contemplated by this Section
1.4, each Vanishing Point Certificate shall be deemed, from and after the
Effective Time, to represent only the right to receive upon such surrender a
certificate representing shares of LightTouch Common Stock as contemplated by
this Section 1. If any Vanishing Point Certificate shall have been lost, stolen
or destroyed, LightTouch may, in its discretion and as a condition precedent to
the issuance of any certificates representing LightTouch Common Stock, require
the owner of such lost, stolen or destroyed Vanishing Point Stock Certificate to
provide an appropriate affidavit reasonably satisfactory to LightTouch and an
indemnity (which may be the holder's unsecured indemnity) against any claim that
may be made against LightTouch or the Surviving Corporation with respect to such
Vanishing Point Certificate.
Section 1.5. NO FURTHER TRANSFERS. After the Effective Time, there
shall be no further registration of transfer on the stock transfer books of the
Surviving Corporation of the shares of Vanishing Point which were outstanding
immediately prior to the Effective Time. If Vanishing Point Certificates are
presented to the Surviving Corporation after the Effective Time they shall be
cancelled and exchanged for LightTouch Common Stock as provided in this
Agreement.
Section 1.6. DISSENTING SHARES. Notwithstanding anything in this
Agreement to the contrary, shares of Vanishing Point Common Stock that are
issued and outstanding immediately prior to the Effective Time and that are held
by stockholders who have not voted such shares in favor of the Merger and who
have delivered a written demand for appraisal of such shares in the manner
provided in Section 262 of the Delaware Law ("DISSENTING Shares") shall not be
canceled and converted in accordance with Section 1.2(e) unless and until such
holder shall have failed to perfect, or shall have effectively withdrawn or
lost, such holder's right to appraisal and payment under Section 262 of the
Delaware Law. If such holder shall have so failed to perfect, or shall have
effectively withdrawn or lost such right, such holder's shares shall thereupon
be deemed to have been canceled and converted as described in Section 1.2(e) at
the Effective Time, and each such share shall represent solely the right to
receive the Merger Consideration described in Section 1.2(e). Vanishing Point
shall give prompt notice of any demands received by Vanishing Point for
appraisal of its shares, and, prior to the Effective Time, Light Touch shall
have the right to
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participate in all negotiations and proceedings with respect to such demands.
Prior to the Effective Time, Vanishing Point shall not, except with the prior
written consent of Light Touch, make any payment with respect to, or settle or
offer to settle, any such demands. From and after the Effective Time, no
stockholder of Vanishing Point who has demanded appraisal rights as provided in
Section 262(d) of the Delaware Law shall be entitled to vote such holder's
shares of Light Touch Common Stock or shares of Vanishing Point Common Stock for
any purpose or to receive payment of dividends or other distributions with
respect to such holder's shares (except dividends and other distributions
payable to stockholders of record of Vanishing Point at a date which is prior to
the Effective Time).
ARTICLE 2
REPRESENTATIONS AND
WARRANTIES OF VANISHING POINT
Vanishing Point hereby represents and warrants to LightTouch and
Acquisition Corp as set forth below. None of such representations and warranties
shall be deemed waived, and each shall be effective, regardless of any due
diligence or investigation that may have been made at any time by or on behalf
of LightTouch and Acquisition Corp or any prior knowledge by or on the part of
LightTouch and Acquisition Corp or their respective directors, officers,
employees or agents. Any exceptions to such representations and warranties shall
be disclosed on the written disclosure schedule dated the date hereof and
delivered by Vanishing Point to LightTouch (the "VANISHING POINT DISCLOSURE
SCHEDULE") and shall make explicit reference to the particular representation or
warranty as to which exception is taken, which in each case shall constitute the
sole representation and warranty to which such exception shall apply. Except to
the extent that the context clearly indicates otherwise, the representations and
warranties regarding Vanishing Point shall also be deemed to be representations
and warranties regarding each subsidiary of Vanishing Point and the business,
assets, material contracts, and liabilities of each of them.
Section 2.1. INCORPORATION; AUTHORITY. Vanishing Point is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has all requisite corporate power and authority to own or
lease and operate its properties and to carry on its business as now conducted.
Vanishing Point has delivered to LightTouch complete and correct copies of its
Certificate of Incorporation and By-Laws and all amendments thereto.
Section 2.2. CORPORATE POWER; BINDING EFFECT. Vanishing Point has all
requisite corporate power and full legal right to enter into this Agreement and
to perform all of its agreements and obligations under this Agreement in
accordance with its terms. This Agreement has been duly authorized by Vanishing
Point's Board of Directors, has been duly executed and delivered by Vanishing
Point and constitutes the legal, valid and binding obligation of Vanishing
Point, enforceable against it in accordance with its terms, subject only, in
respect of the consummation of the Merger, to approval by its stockholders, and
to the effects of bankruptcy, insolvency and similar laws of general
application. The execution, delivery and performance by Vanishing Point of this
Agreement in accordance with its terms will not result in any violation of or
default or creation of any lien under, or the acceleration or vesting or
modification of
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any right or obligation under, or in any conflict with, Vanishing Point's
Certificate of Incorporation or By-Laws or any judgment, decree, order, statute,
rule or regulation which is applicable to Vanishing Point or any agreement,
contract or instrument to which Vanishing Point is a party or by which it is
bound, except for any agreement, contract or instrument as to which any required
consent has been obtained.
Section 2.3. SUBSIDIARIES. Except as set forth in Section 2.3 of the
Vanishing Point Disclosure Schedule, Vanishing Point does not have any
subsidiaries and does not own or hold of record and/or beneficially any shares
of any class in the capital of any corporation. Vanishing Point does not own any
legal and/or beneficial interests in any partnerships, business trusts or joint
ventures or in any other unincorporated trade or business enterprises.
Section 2.4. QUALIFICATION. Vanishing Point is duly qualified and in
good standing as a foreign corporation in those jurisdictions listed in Section
2.4 of the Vanishing Point Disclosure Schedule, which constitute all the
jurisdictions in which the character of the properties owned or leased or the
nature of the activities conducted by it makes such qualification necessary,
except for any jurisdictions in which the failure to so qualify, individually
and in the aggregate, would not have a Material Adverse Effect. As used herein
with respect to any Person, a "MATERIAL ADVERSE EFFECT" means a material adverse
effect on the operations, assets, business, condition (financial or otherwise)
or prospects of such Person or any material adverse effect on the ability of
such Person to perform its obligations under this Agreement.
Section 2.5. CAPITALIZATION.
(a) The authorized capital of Vanishing Point is as set forth
on Section 2.5 of the Vanishing Point Disclosure Schedule. All outstanding
shares of capital stock of Vanishing Point are owned of record as of August 11,
2000 by the stockholders set forth in Section 2.5 of the Vanishing Point
Disclosure Schedule hereto and are validly issued and outstanding, fully paid
and non-assessable. Vanishing Point has reserved the number of shares of Common
Stock listed on Section 2.5 of the Vanishing Point Disclosure Schedule for
issuance pursuant to the stock options, warrants, convertible notes and
convertible preferred stock issued by Vanishing Point and currently outstanding.
(b) Except as set forth in Section 2.5 of the Vanishing Point
Disclosure Schedule, Vanishing Point does not have and is not bound by any
outstanding subscriptions, options, warrants, calls, commitments or agreements
of any character calling for Vanishing Point to issue, deliver or sell, or cause
to be issued, delivered or sold any shares of Vanishing Point Common Stock or
Vanishing Point Preferred Stock or any other equity security of Vanishing Point
or any securities convertible into, exchangeable for or representing the right
to subscribe for, purchase or otherwise receive any shares of Vanishing Point
Common Stock or Vanishing Point Preferred Stock or any other equity security of
Vanishing Point or obligating Vanishing Point to grant, extend or enter into any
such subscriptions, options, warrants, calls, commitments or agreements. As of
the date hereof there are no outstanding contractual obligations of Vanishing
Point to repurchase, redeem or otherwise acquire
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any shares of capital stock of Vanishing Point. Section 2.5 of the Vanishing
Point Disclosure Schedule sets forth, among other things, the name of each
person holding an option as of the date hereof under the Vanishing Point Option
Plan, and the exercise price, vesting schedule and exercise period for such
option, the number of shares of Vanishing Point Common Stock subject to such
option and whether the consummation of the Merger will, pursuant to the terms of
such option or any related agreement, cause any option not previously
exercisable to become exercisable.
Section 2.6. LAWFUL ISSUANCE. All of the outstanding shares of
Vanishing Point Common Stock and Vanishing Point Preferred Stock were issued in
conformity with all applicable provisions of the Securities Act of 1933, as
amended (the "SECURITIES ACT"), applicable state securities laws and all rules
and regulations thereunder. There exists no valid right to rescind any purchase
from or issuance thereof by Vanishing Point.
Section 2.7. FINANCIAL STATEMENTS. Vanishing Point has furnished
LightTouch copies of (a) the consolidated balance sheets of Vanishing Point as
of December 31 of each of the years 1998 and 1999 (such consolidated balance
sheet as of December 31, 1999, being herein referred to as the "VANISHING POINT
AUDITED BALANCE SHEET"), and the related statements of operations, stockholders'
equity and cash flows of Vanishing Point for the fiscal years ended on such
dates, each accompanied by a report and opinion thereon of Price Waterhouse
Coopers LLP with respect to the audit of Vanishing Point's 1998 financial
statements and Clark, Schaefer, Xxxxxxx & Co. with respect to the audit of
Vanishing Point's 1999 financial statements, and (b) the unaudited balance sheet
of Vanishing Point as of July 1, 2000, and the related statement of operations
of Vanishing Point for the six-month period ended on such date, certified by the
chief financial officer of Vanishing Point (the "VANISHING POINT UNAUDITED
FINANCIAL STATEMENTS"). Each of such financial statements was prepared in
accordance with United States generally accepted accounting principles applied
on a basis consistent with prior periods, subject, in the case of the Vanishing
Point Unaudited Financial Statements, to a lack of footnotes and normal year-end
adjustments consisting only of routine accruals; each of such balance sheets
fairly presents the financial condition of Vanishing Point as of its date; and
each of such statements of operations, stockholders' equity and cash flows
fairly presents the results of operations, changes in stockholders' equity and
cash flows of Vanishing Point for the period covered thereby.
Section 2.8. ABSENCE OF CERTAIN CHANGES. Except as set forth in Section
2.8 of the Vanishing Point Disclosure Schedule, since the date of the Vanishing
Point Audited Balance Sheet, there has not been:
(a) any change in the assets, liabilities, sales, income or
business of Vanishing Point or in its relationships with suppliers, customers or
lessors, other than changes which were both in the ordinary course of business
and have not had, either in any case or in the aggregate, a Material Adverse
Effect;
(b) any acquisition or disposition by Vanishing Point of any
material asset or property other than in the ordinary course of business;
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(c) any damage, destruction or loss, whether or not covered by
insurance, which has had, either in any case or in the aggregate, a Material
Adverse Effect;
(d) any declaration, setting aside or payment of any dividend
or any other distributions in respect of any class of the capital stock of
Vanishing Point;
(e) any issuance of any shares of any class of the capital
stock of Vanishing Point or any direct or indirect redemption, purchase or other
acquisition of any class of the capital stock of Vanishing Point;
(f) any increase in the compensation, pension or other benefits
payable or to become payable by Vanishing Point to any of its officers or
employees, or any bonus payments or arrangements made to or with any of them,
except for employees whose compensation, including any such bonus, will not
exceed $60,000 in Vanishing Point's 2000 fiscal year;
(g) any change in accounting principles, practices or methods
used by Vanishing Point; or
(h) any forgiveness or cancellation of any material debt or
claim by Vanishing Point or any waiver of any right of material value other than
compromises of accounts receivable in the ordinary course of business;
(i) any entry by Vanishing Point into any material transaction
other than in the ordinary course of business;
(j) any incurrence by Vanishing Point of any material
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;
(k) any mortgage, pledge, lien, lease, security interest or
other charge or encumbrance on any of the assets, tangible or intangible, of
Vanishing Point;
(l) any discharge or satisfaction by Vanishing Point of any
lien or encumbrance or payment by Vanishing Point of any obligation or liability
(fixed or contingent) other than (A) current liabilities included in the
Vanishing Point Audited Balance Sheet (including current maturities of long-term
debt) and (B) current liabilities incurred since the date of the Vanishing Point
Audited Balance Sheet in the ordinary course of business.
Section 2.9. TITLE TO PROPERTY; LEASES, ETC. Except as set forth in
Section 2.9(a) of the Vanishing Point Disclosure Schedule, Vanishing Point has
good and marketable title to all of its properties and assets, including,
without limitation, all those reflected in the Vanishing Point Audited Balance
Sheet (except for properties or assets sold or otherwise disposed of in the
ordinary course of business since the date of the Vanishing Point Audited
Balance Sheet), all free and clear of all liens, pledges, charges, security
interests, mortgages, encumbrances or title retention agreements of any kind or
nature. Vanishing Point owns no real property. Section 2.9(b) of the
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Vanishing Point Disclosure Schedule sets forth a complete and correct
description of all leases of real property under which Vanishing Point is lessor
or lessee and all other leases to which Vanishing Point is a party, whether as
lessor or lessee. Complete and correct copies of all such leases have been
delivered to LightTouch. Except as set forth on Section 2.9(b) of the Vanishing
Point Disclosure Schedule, each such lease is valid and subsisting and no event
or condition exists which constitutes, or after notice or lapse of time or both
would constitute, a default thereunder, except for those defaults which will not
have, either individually or in the aggregate, a Material Adverse Effect. Except
as set forth in Section 2.9(b) of the Vanishing Point Disclosure Schedule, the
leasehold interests of Vanishing Point are subject to no lien or other
encumbrance, and Vanishing Point is in quiet possession of the properties
covered by such leases. Vanishing Point has not received any notice that either
the whole or any material portion of any real property leased by Vanishing Point
is to be condemned, requisitioned or otherwise taken by any public authority.
Vanishing Point has no knowledge of any public improvement that may result in
special assessments against or otherwise affect any of the real property leased
by Vanishing Point.
Section 2.10. INDEBTEDNESS. Except for Indebtedness (as defined below)
reflected or reserved against in the Vanishing Point Audited Balance Sheet and
Indebtedness incurred in the ordinary course of business after the date of the
Vanishing Point Audited Balance Sheet, Vanishing Point has no Indebtedness
outstanding at the date hereof. Vanishing Point is not in default with respect
to any outstanding Indebtedness or any instrument relating thereto and except as
set forth in Section 2.10 of the Vanishing Point Disclosure Schedule no such
Indebtedness or any instrument or agreement relating thereto purports to limit
the issuance of any securities by Vanishing Point or the operation of the
business of Vanishing Point. Complete and correct copies of all instruments
(including all amendments, supplements, waivers and consents) relating to any
Indebtedness of Vanishing Point have been furnished to LightTouch. As used
herein with respect to any Person, "Indebtedness" means (i) all indebtedness of
such Person for borrowed money, whether current or funded, or secured or
unsecured, (ii) all indebtedness of such Person for the deferred purchase price
of property or services represented by a note or other security, (iii) all
indebtedness of such Person created or arising under any conditional sale or
other title retention agreement with respect to property acquired by such Person
(even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property), (iv) 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 lien, (v) all obligations under leases which shall
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, (vi) any liability of such Person in respect of banker's acceptances
or letters of credit, and (vii) all indebtedness referred to in clause (i),
(ii), (iii), (iv), (v) or (vi) above which 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 it has otherwise assured a
creditor against loss.
Section 2.11. ABSENCE OF UNDISCLOSED LIABILITIES. Except to the extent
reflected or reserved against in the Vanishing Point Audited Balance Sheet or
incurred in the ordinary course of business after the date of the Vanishing
Point Audited Balance
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Sheet or described in any Schedule hereto, Vanishing Point has no material
liabilities or obligations of any nature, whether accrued, absolute, contingent
or otherwise (including, without limitation, liabilities as guarantor or
otherwise with respect to obligations of others) and whether due or to become
due, including, without limitation, any liabilities for taxes due or to become
due.
Section 2.12. TAXES. Except as set forth in Section 2.12 of the
Vanishing Point Disclosure Schedule,
(a) Vanishing Point has duly filed with the appropriate
federal, state, foreign or local government agencies all of the income, sales,
use, employment and other tax returns and reports required to be filed by it and
has paid all Taxes (as defined below) shown to be due thereon, and all such
returns and reports were correct and complete in all respects. Vanishing Point
is not currently the beneficiary of any extension of time within which to file
any such return. No claim has ever been made by an authority in a jurisdiction
where Vanishing Point does not file tax returns or reports that it is or may be
subject to imposition of any Taxes by that jurisdiction. There are no liens on
any of the assets of Vanishing Point that arose in connection with the failure
(or alleged failure) to pay an Taxes.
(b) Vanishing Point has withheld and paid all Taxes required to
have been withheld and paid in connection with amounts paid or owing to any
employee, consultant, independent contractor, creditor, stockholder or other
third party.
(c) Vanishing Point does not expect any authority to assess any
additional Taxes for any period for which tax returns or reports have been
filed. Vanishing Point is not aware of any dispute or claim concerning any
liability for Taxes of Vanishing Point. Section 2.12(c) of the Vanishing Point
Disclosure Schedule lists all federal, state, local, and foreign tax returns or
reports filed with respect to Vanishing Point for taxable periods ended on or
after December 31, 1997, indicates those tax returns or reports that have been
audited, and indicates those tax returns and/or reports that are currently
subject to audit.
(d) No waiver of any statute of limitations relating to Taxes
has been executed or given by Vanishing Point.
(e) Vanishing Point has not (i) filed a consent on Section
341(f) of the Code concerning collapsible corporations, (ii) made, and 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 Section 280G of the Code or that are subject to an excise tax
under Section 4999 of the Code, or (iii) been a United States real property
holding corporation within the meaning of Section 897(c)(2) of the Code during
the applicable period specified in Section 897(c)(1)(A)(ii) of the Code.
Vanishing Point is not a party to any tax allocation or sharing agreement.
Vanishing Point (i) has not been a member of an Affiliated Group (as defined in
Section 1504 of the Code) filing a consolidated federal income tax return (other
than the Affiliated Group of which Vanishing Point is the common parent); and
(ii) does not have any liability for Taxes of any Person (other than Vanishing
Point) under Treas. Reg. ss. 1.1502-6 (or any similar provision of state, local
or foreign law), as a transferee or successor by contract or otherwise.
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(f) The unpaid taxes of Vanishing Point (i) did not, as of the
date of the Vanishing Point Audited Balance Sheet, exceed the reserve for tax
liabilities (rather than any reserve for deferred Taxes established to reflect
timing differences between the book and Tax income) set forth on the face of the
Vanishing Point Audited Balance Sheet (rather than in any notes thereto) and
(ii) do not exceed that reserve as adjusted for the passage of time through the
Closing Date in accordance with past custom and practice of Vanishing Point in
filing its tax returns.
For the purposes of this Agreement, "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, social security, unemployment, disability, payroll, license,
employee or other withholding, or other tax, of any kind whatsoever, including
any interest, penalties or additions to tax or additional amounts in respect of
the foregoing; the foregoing shall include any transferee or secondary liability
for a Tax and any liability assumed by agreement.
Section 2.13. LITIGATION, ETC. Except as set forth in Section 2.13 of
the Vanishing Point Disclosure Schedule, no action, suit, proceeding or
investigation (whether conducted by any judicial or regulatory body or other
person) is pending or, to the knowledge of Vanishing Point, threatened against
Vanishing Point (nor is there any basis therefor known to Vanishing Point) which
questions the validity of this Agreement or any action taken or to be taken
pursuant hereto or which might, either in any case or in the aggregate, have a
Material Adverse Effect. Set forth in Section 2.13 of the Vanishing Point
Disclosure Schedule is a description of all claims for indemnification presently
pending with Vanishing Point by any past or present employee, officer or
director of Vanishing Point ("VANISHING POINT INDEMNIFIED PARTIES") or as to
which Vanishing Point has made indemnification payments in the past. In
addition, set forth in Section 2.13 of the Vanishing Point Disclosure Schedule
is a description of all presently pending or threatened matters as to which
Vanishing Point believes it may reasonably be expected that a material claim for
indemnification by Vanishing Point might be made by any Vanishing Point
Indemnified Party and a list of all existing indemnification agreements between
Vanishing Point and any Vanishing Point Indemnified Party.
Section 2.14. SAFETY, ZONING AND ENVIRONMENTAL MATTERS. Neither the
offices or properties in or on which Vanishing Point carries on its business nor
the activities carried on therein are in material violation of any zoning,
health or safety law or regulation, including, without limitation, the
Occupational Safety and Health Act of 1970, as amended.
(a) Except as set forth in Section 2.14 of the Vanishing Point
Disclosure Schedule:
(i) Vanishing Point is not in violation, or alleged
violation, of any judgment, decree, order, law, license, rule or
regulation pertaining to environmental matters, including without
limitation, those arising under the Resource Conservation and Recovery
Act ("RCRA"), the Comprehensive
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Environmental Response, Compensation and Liability Act of 1980 as
amended ("CERCLA"), the Superfund Amendments and Reauthorization Act of
1986 ("XXXX"), the Federal Water Pollution Control Act, the Solid Waste
Disposal Act, as amended, the Federal Clean Water Act, the Federal
Clean Air Act, the Toxic Substances Control Act, or any state or local
statute, regulation, ordinance, order or decree relating to health,
safety or the environment (hereinafter "ENVIRONMENTAL LAWS"), which
violation would have, either individually or in the aggregate, a
Material Adverse Effect;
(ii) Vanishing Point has not received written notice from
any third party, including without limitation any federal, state or
local governmental authority, (A) that Vanishing Point or any
predecessor in interest has been identified by the United States
Environmental Protection Agency ("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); (B) that any
hazardous waste as defined by 42 U.S.C. ss.6903(5), any hazardous
substances as defined by 42 U.S.C. ss.9601(14), any pollutant or
contaminant as defined by 42 U.S.C. ss.9601(33) and any toxic
substance, oil or hazardous materials or other chemicals or substances
regulated by any Environmental Laws ("HAZARDOUS SUBSTANCES") which any
one of them has generated, transported or disposed of has been found at
any site at which a federal, state or local agency or other third party
has conducted or has ordered that Vanishing Point or any predecessor in
interest conduct a remedial investigation, removal or other response
action pursuant to any Environmental Law; or (C) that any of them is or
shall be a named party to any claim, action, cause of action, complaint
(contingent or otherwise) 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; and
(iii) to the best of Vanishing Point's knowledge, none of
the properties of Vanishing Point are or shall be subject to any
applicable environmental cleanup responsibility law or environmental
restrictive transfer law or regulation by virtue of the transactions
set forth herein and contemplated hereby.
(b) Attached as part of Section 2.14 of the Vanishing Point
Disclosure Schedule is a list of all documents, reports, site assessments, data,
communications or other materials in the possession of Vanishing Point, which to
Vanishing Point's knowledge contain any material information with respect to
potential environmental liabilities associated with any real property owned,
leased or operated by Vanishing Point and relating to compliance with
Environmental Laws or the environmental condition of such properties and
adjacent properties. Vanishing Point has furnished to LightTouch complete and
accurate copies of all of the documents, reports, site assessments, data,
communications and other materials listed in Section 2.14 of the Vanishing Point
Disclosure Schedule.
Section 2.15. LABOR RELATIONS. Vanishing Point is in full compliance
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 engaged in any unfair labor practice, except where such
non-compliance or
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practice could not have, either in any case or in the aggregate, a Material
Adverse Effect. Except as set forth in Section 2.15 of the Vanishing Point
Disclosure Schedule, there is no charge pending or, to the knowledge of
Vanishing Point, threatened against Vanishing Point alleging unlawful
discrimination in employment practices before any court or agency and there is
no charge of or proceeding with regard to any unfair labor practice against
Vanishing Point pending before the National Labor Relations Board which, either
in any case or in the aggregate, could have a Material Adverse Effect. There is
no labor strike, dispute, slow-down or work stoppage actually pending or
threatened against or involving Vanishing Point. No one has petitioned within
the last three years, and no one is now petitioning, for union representation of
any of Vanishing Point's employees. No grievance or arbitration proceeding
arising out of or under any collective bargaining agreement is pending against
Vanishing Point and no claim therefor has been asserted. None of the employees
of Vanishing Point is covered by any collective bargaining agreement, and no
collective bargaining agreement is currently being negotiated by Vanishing
Point. Vanishing Point has not experienced any work stoppage or other material
labor difficulty during the last three years.
Section 2.16. MATERIAL AGREEMENTS. Except as set forth in Section 2.16
of the Vanishing Point Disclosure Schedule, and except for this Agreement and
the agreements specifically referred to herein, Vanishing Point is not a party
to or bound by any of the following agreements (with the following agreements,
and the agreements referred to in Section 2.16 of the Vanishing Point Disclosure
Schedule collectively referred to as the "VANISHING POINT MATERIAL AGREEMENTS"):
(a) any agreement, arrangement or commitment that is material
to the financial condition, results of operations, business or prospects of
Vanishing Point;
(b) any agreement under which the consequences of a default or
termination could have a Material Adverse Effect;
(c) any plan or contract regarding or providing for bonuses,
pensions, options, stock purchases, deferred compensation, severance benefits,
retirement payments, profit sharing, stock appreciation, collective bargaining
or the like, or any contract or agreement with any labor union;
(d) any employment or consulting contract or contract for
personal services not terminable at will by Vanishing Point without penalty to
Vanishing Point;
(e) any agreement for the purchase of any commodity, product,
material, supplies, equipment or other personal property, or for the receipt of
any service, other than purchase orders entered into in the ordinary course of
business for less than $25,000 each and which in the aggregate do not exceed
$100,000;
(f) any agreement for the purchase or lease of any fixed asset,
whether or not such purchase or lease is in the ordinary course of business, for
a price in excess of $50,000;
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(g) any agreement for the sale of any commodity, product,
material, equipment, or other personal property, or the furnishing by Vanishing
Point of any service, other than contracts with customers entered into in the
ordinary course of business;
(h) any agreement providing for the purchase of all or
substantially all of its requirements of a particular product from a supplier,
or for periodic minimum purchases of a particular product from a supplier;
(i) any agreement with any sales agent, distributor or OEM of
products of Vanishing Point;
(j) any agreement concerning a partnership or joint venture
with one or more Persons;
(k) any confidentiality agreement or any non-competition
agreement or other contract or agreement containing covenants limiting Vanishing
Point's freedom to compete in any line of business or in any location or with
any Person;
(l) any license agreement (as licensor or licensee);
(m) any agreement with any present or former officer, director,
consultant, agent or stockholder of Vanishing Point or with any Affiliate (as
hereinafter defined) of any of them;
(n) any loan agreement, indenture, note, bond, debenture or any
other document or agreement evidencing a capitalized lease obligation or
Indebtedness to any Person;
(o) any agreement of guaranty, indemnification, or other
similar commitment with respect to the obligations or liabilities of any other
Person (other than lawful indemnification provisions contained in the Charter
and By-Laws of Vanishing Point); or
(p) any other agreement (or group of related agreements or
contracts) the performance of which involves consideration paid or received by
Vanishing Point in excess of $50,000.
Except as set forth on Section 2.16 of the Vanishing Point Disclosure
Schedule, all of the Vanishing Point Material Agreements are in full force and
effect, and Vanishing Point is not in default under any of them, nor to
Vanishing Point's knowledge is any other party to any such Vanishing Point
Material Agreement in default thereunder, nor does any event or condition exist
which after notice or lapse of time or both would constitute a default
thereunder which default would cause, either in any case or in the aggregate, a
Material Adverse Effect. Except as set forth in Section 2.16 of the Vanishing
Point Disclosure Schedule, no approval or consent of any person is needed in
order that the Vanishing Point Material Agreements continue in full force and
effect following the consummation of the transactions contemplated by this
Agreement and no Vanishing Point Material Agreement includes any provision the
effect of which may be to terminate such contract or enlarge or accelerate any
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obligations of Vanishing Point thereunder or give additional rights to any other
party thereto upon consummation of the transactions contemplated by the
Agreement. Vanishing Point has delivered to LightTouch true, correct and
complete copies of all Vanishing Point Material Agreements, together with all
modifications and supplements thereto. For the purposes of this Agreement, the
term "AFFILIATE" means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with such Person.
Section 2.17. EMPLOYEE BENEFIT PLANS.
(a) Except as set forth in Section 2.17 of the Vanishing Point
Disclosure Schedule, neither Vanishing Point nor any trade or business (whether
or not incorporated) that is a member of a group treated as affiliated under
Section 414(b), (c), (m) or (o) of the Code of which Vanishing Point also is a
member (a "VANISHING POINT RELATED ENTITY") maintains or has any obligation to
make contributions to, any employee benefit plan (an "ERISA PLAN") within the
meaning of Section 3(3) of the United States Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), or any other retirement, profit sharing,
stock option, stock bonus or employee benefit plan (a "NON-ERISA PLAN").
Vanishing Point has heretofore delivered to LightTouch true, correct and
complete copies of each ERISA Plan and each Non-ERISA Plan and any associated
funding instruments and, with respect to any ERISA plan, the two most recently
completed annual reports (with any required attachments), if any, the most
recent IRS determination letter, and any other advisory opinions or rulings
applicable to such Plan. All such ERISA Plans and Non-ERISA Plans have been
maintained and operated in all material respects in accordance with all federal,
state and local laws applicable to such plans, and the terms and conditions of
the respective plan documents.
(b) Neither Vanishing Point nor any Vanishing Point Related
Entity has engaged in any transaction in connection with which it could be
subject to either a civil penalty assessed pursuant to Section 502(i) of ERISA,
or a tax imposed by Section 4975 of the Code, or any tax or penalty under any
federal, state or local laws applicable to any Non-ERISA Plan. No liability to
the United States Pension Benefit Guaranty Corporation ("PBGC"), or to any
multi-employer pension plan within the meaning of section 3(35) of ERISA, or to
any other governmental authority, pension or retirement board, or other agency,
under any federal, state or local law, has been or is expected to be incurred by
Vanishing Point or any Vanishing Point Related Entity with respect to any ERISA
Plan or Non-ERISA Plan. Neither Vanishing Point, nor any Vanishing Point Related
Entity, maintains or contributes to an ERISA Plan which is a pension plan (as
defined in Section 3(2) of ERISA) other than Vanishing Point's Employee 401(k)
Investment Plan.
(c) Full payment has been made of all amounts that Vanishing
Point or any Vanishing Point Related Entity is required, under the terms of each
ERISA Plan and Non-ERISA Plan, or pursuant to applicable federal, state or local
law, to have paid as contributions to such ERISA Plan or Non-ERISA Plan as of
the last day of the most recent fiscal year of such ERISA Plan or Non-ERISA Plan
ended prior to the date hereof.
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(d) Except as set forth in Section 2.17 of the Vanishing Point
Disclosure Schedule,
(i) no action, suit, proceeding or investigation is
pending or threatened against Vanishing Point, other than routine
claims for benefits as set forth in Section 2.17 of the Vanishing Point
Disclosure Schedule, concerning any ERISA Plan or Non-ERISA Plan of the
Vanishing Point or, to the knowledge of Vanishing Point, any fiduciary
or service provider thereof and, to the knowledge of Vanishing Point
there is no basis for any such legal action or proceeding;
(ii) no communication, report or disclosure has been made
by or on behalf of Vanishing Point which, at the time made, did not
accurately reflect the terms and operations of any ERISA Plan or
Non-ERISA Plan of Vanishing Point;
(iii) no ERISA Plan or Non-ERISA Plan of Vanishing Point
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 and
Section 4980B of the Code);
(iv) no benefits due under any ERISA Plan or Non-ERISA
Plan of Vanishing Point have been forfeited subject to the possibility
of reinstatement (which possibility would still exist on or after the
Closing Date); and
(v) Vanishing Point has not undertaken to maintain any
ERISA Plan or Non-ERISA Plan for any period of time and each such Plan
is terminable at the sole discretion of the sponsor thereof, subject
only to such constraints as may imposed by applicable law.
(e) EFFECT OF TRANSACTIONS. Except as set forth in Section 2.17
of the Vanishing Point Disclosure Schedule, the execution of this Agreement and
the consummation of the transactions contemplated herein will not result in any
payment (whether of severance pay or otherwise) becoming due from any ERISA Plan
or Non-ERISA Plan of Vanishing Point to any current or former director, officer,
consultant or employee of Vanishing Point 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.
Section 2.18. POTENTIAL CONFLICTS OF INTEREST. Except as set forth in
Section 2.18 of the Vanishing Point Disclosure Schedule, no officer or director
of Vanishing Point (a) owns, directly or indirectly, any interest in (excepting
not more than 1% stock holdings for investment purposes in securities of
publicly held and traded companies) or is an officer, director, employee or
consultant of any Person which is a competitor, lessor, lessee, customer or
supplier of Vanishing Point or LightTouch; (b) owns, directly or indirectly, in
whole or in part, any tangible or intangible property which Vanishing Point is
using or the use of which is necessary for the business of Vanishing Point; or
(c) has any cause of action or other claim whatsoever against, or owes any
amount to, Vanishing Point, except for claims in the ordinary course of
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business, such as for accrued vacation pay, accrued benefits under employee
benefit plans and similar matters and agreements; Indebtedness that is included
in the liabilities on the Vanishing Point Unaudited Balance Sheet; and claims
under agreements that are listed on the Vanishing Point Disclosure Schedule.
Section 2.19. TRADEMARKS, PATENTS, ETC.
(a) Section 2.19(a) of the Vanishing Point Disclosure Schedule
sets forth a complete and accurate list of (i) all patents, registered
trademarks, registered trade names and registered copyrights owned by and
registered in the name of Vanishing Point, all patent applications and trademark
and copyright registration applications owned by Vanishing Point, all material
licenses and other material agreements relating thereto, and (ii) all material
agreements relating to Intellectual Property (as hereinafter defined) which
Vanishing Point has licensed or authorized for use by others or which has been
licensed or authorized for use to Vanishing Point. Each of the agreements
identified in Section 2.19(a) of the Vanishing Point Disclosure Schedule is
binding on Vanishing Point, and to the best of Vanishing Point's knowledge is
binding on each other party to such agreement. True and complete copies of all
such agreements, and any amendments thereto, have been provided to LightTouch.
Except as otherwise provided on Section 2.19(a) of the Vanishing Point
Disclosure Schedule, all of Vanishing Point's patents, patent applications,
trademark registrations, trademark registration applications and registered
copyrights listed in Section 2.19(a) of the Vanishing Point Disclosure Schedule
have been duly registered in, filed in or issued by the United States Patent and
Trademark Office, the United States Copyrights Office, or the relevant offices
of non-US jurisdictions as identified in Section 2.19(a) of the Vanishing Point
Disclosure Schedule, and have been properly maintained and renewed in accordance
with all applicable provisions of law of the United States and each such other
jurisdiction. Except as set forth in Section 2.19(a) of the Vanishing Point
Disclosure Schedule, Vanishing Point has no actual knowledge of any reason that
would prevent any pending applications listed in Section 2.19(a) of the
Vanishing Point Disclosure Schedule to register trademarks, service marks or
copyrights or any pending patent applications from being granted, except for
applications the non-registration or non-grant of which, singly and in the
aggregate, would not have a Material Adverse Effect..
(b) Except as set forth in Section 2.19(b) of the Vanishing
Point Disclosure Schedule, neither Vanishing Point, nor to Vanishing Point's
actual knowledge, the other party or parties thereto, is in breach of any
material license, or other material agreement relating to Intellectual Property
identified in Sections 2.19(a) of the Vanishing Point Disclosure Schedule,
except for any breaches that singly or in the aggregate would not cause any such
Intellectual Property listed in Section 2.19(a) of the Vanishing Point
Disclosure Schedule to no longer be available to Vanishing Point or otherwise to
have a Material Adverse Effect. Vanishing Point has complied in all material
respects with all of its material obligations of confidentiality in respect of
the Intellectual Property of others and knows of no material violation of such
obligations of confidentiality as are owed to Vanishing Point except for any
non-compliance or violations that singly or in the aggregate would not cause any
such Intellectual Property listed in Section 2.19(a) of the Vanishing Point
Disclosure Schedule to no longer be available to Vanishing Point or otherwise
have a Material
-00-
Xxxxxxx Xxxxxx. Vanishing Point has provided to LightTouch copies of all
material written agreements between Vanishing Point and its key salaried
employees. Vanishing Point has not made any material confidential proprietary
information available to any Person other than employees of Vanishing Point
except pursuant to written agreements requiring the recipients to maintain the
confidentiality of such information, other than disclosures which singly and in
the aggregate would not have a Material Adverse Effect. To the best of Vanishing
Point's actual knowledge, no director, officer, or key employee of Vanishing
Point is subject to confidentiality obligations in favor of any third person
(other than confidentiality obligations to which Vanishing Point is also
subject) the material breach of which would subject Vanishing Point to any
Material Adverse Effect or which would cause any material Intellectual Property
listed in Schedule 2.19(a) of the Vanishing Point Disclosure Schedule to no
longer be available to it. No claims have been asserted, and to Vanishing
Point's actual knowledge no claims are pending, by any Person against Vanishing
Point regarding the unauthorized manufacture, use or sale of any such
Intellectual Property, or challenging or questioning the validity or
effectiveness of any material license or other material agreement relating to
Intellectual Property, and to Vanishing Point's actual knowledge there is no
basis for such claim, except in the case of any of the foregoing for any claims
that individually or in the aggregate will not have a Material Adverse Effect.
(c) For purposes of this Section 2.19 and Section 3.20, the
term "INTELLECTUAL PROPERTY" shall mean United States and foreign patents,
proprietary inventions (whether patentable or unpatentable), trade secrets,
customer lists, confidential and proprietary manufacturing and secret processes
and know-how, trademarks and associated goodwill, service marks, trade dress,
logos, trade names, domain names, copyrights, mask works and registrations and
applications and registration applications for the foregoing, and computer
software programs, computer data bases and related documentation and materials.
Section 2.20. INSURANCE. Section 2.20 of the Vanishing Point Disclosure
Schedule sets forth a summary of all insurance policies (including without
limitation policies providing theft, fire, liability (including products
liability) workers' compensation, life, property and casualty, directors' and
officers', benefits or coverage for any Plan described in Section 2.17, and bond
and surety arrangements) to which Vanishing Point has been a party, a named
insured, or otherwise the beneficiary of coverage at any time within the past
three (3) years and specifies the insurer, the amount of coverage, type of
insurance, expiration date, and any retroactive premium adjustments or other
loss sharing arrangements. With respect to each such insurance policy: (a) the
policy is legal, valid, binding, enforceable, and in full force and effect; (b)
the policy will continue to be legal, valid, binding, enforceable, and in full
force and effect on identical terms following the consummation of the
transactions contemplated hereby; (c) neither Vanishing Point nor any other
party to the policy is in breach or default (including with respect to the
payment of premiums or the giving of notices), and no event has occurred which,
with notice or the lapse of time, would constitute such a breach or default, or
permit termination, modification, or acceleration under the policy; and (d) no
party to the policy has repudiated any provision thereof. Vanishing Point has
been covered during the past three (3) years by insurance in scope and amount
customary and reasonable for the businesses in which it has engaged during the
aforementioned period. Section 2.20
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of the Vanishing Point Disclosure Schedule describes any self-insurance
arrangements affecting Vanishing Point.
Section 2.21. BANK ACCOUNTS, SIGNING AUTHORITY, POWERS OF ATTORNEY.
Except as set forth in Section 2.21 of the Vanishing Point Disclosure Schedule,
Vanishing Point has no 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 Vanishing
Point, to withdraw any money or other property from any bank, brokerage or other
account of Vanishing Point or to act under any power of attorney granted by
Vanishing Point at any time for any purpose. Section 2.21 of the Vanishing Point
Disclosure Schedule also sets forth the names of all persons authorized to
borrow money or sign notes on behalf of Vanishing Point.
Section 2.22. GOVERNMENTAL CONSENT, ETC. No consent, approval or
authorization of or registration, designation, declaration or filing with any
governmental authority, federal or other, on the part of Vanishing Point, is
required in connection with the Merger or the consummation of any other
transactions contemplated hereby, except for the filing of the Certificate of
Merger with the Delaware Secretary of State.
Section 2.23. MINUTE BOOKS. The minute books of Vanishing Point made
available to LightTouch for inspection accurately record therein, in all
material respects, all actions taken by Vanishing Point's Board of Directors and
stockholders.
Section 2.24. BROKERS. No finder, broker, agent or other intermediary
has acted for or on behalf of Vanishing Point in connection with the negotiation
or consummation of the transactions contemplated hereby, except that Vanishing
Point has engaged, and subject to Section 12.1 will pay a fee or commission to,
Venture Strategy Partners LP in accordance with the terms of the letter
agreement between Vanishing Point and such firm, a copy of which has been
previously delivered by Vanishing Point to LightTouch.
Section 2.25. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS. Vanishing Point
has complied in all material respects with, and is in compliance in all material
respects with, (a) all laws, statutes, governmental regulations and all judicial
or administrative tribunal orders, judgments, writs, injunctions, decrees or
similar commands applicable to its business and (b) its Certificate of
Incorporation and By-Laws, each as amended to date. Except as set forth in
Section 2.25 of the Vanishing Point Disclosure Schedule, Vanishing Point has not
committed, been charged with, or been under investigation with respect to, nor
does there exist, any violation by Vanishing Point of any provision of any
federal, state or local law or administrative regulation, except for such
violations which would not have, either in any case or in the aggregate, a
Material Adverse Effect. Vanishing Point has and maintains, and Section 2.25 of
the Vanishing Point Disclosure Schedule sets forth, a complete and correct list
of, all such licenses, permits and other authorizations from all such
governmental authorities as are necessary for the conduct of its business or in
connection with the ownership or use of its properties, all of which except as
expressly designated on Section 2.25 of the Vanishing Point Disclosure Schedule
are in full force and effect, and true and complete copies of all of which have
previously been delivered to LightTouch. None of such licenses, permits or other
authorizations are subject to
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revocation, termination or modification as a result of the consummation of the
transactions contemplated by this Agreement.
Section 2.26. ABSENCE OF REGISTRATION OBLIGATIONS. Except as set forth
in Section 2.26 of the Vanishing Point Disclosure Schedule, Vanishing Point has
no obligation, contingent or otherwise, by reason of any agreement to register
any of its securities under the Securities Act.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF LIGHTTOUCH
AND ACQUISITION CORP
LightTouch and Acquisition Corp represent and warrant to Vanishing
Point as set forth below. None of such representations and warranties shall be
deemed waived, and each shall be effective, regardless of any due diligence or
investigation that may have been made at any time by or on behalf of Vanishing
Point or any prior knowledge by or on the part of Vanishing Point or its
directors, officers, employees or agents. Any exceptions to such representations
and warranties shall be disclosed on the written disclosure schedule dated the
date hereof and delivered by LightTouch to Vanishing Point (the "LIGHTTOUCH
DISCLOSURE SCHEDULE") and shall make explicit reference to the particular
representation or warranty as to which exception is taken, which in each case
shall constitute the sole representation and warranty to which such exception
shall apply. Except to the extent that the context clearly indicates otherwise,
the representations and warranties regarding LightTouch shall also be deemed to
be representations and warranties regarding each subsidiary of LightTouch and
the business, assets, material contracts, and liabilities of each of them.
Section 3.1. ORGANIZATION AND STANDING OF LIGHTTOUCH AND ACQUISITION
CORP LightTouch is a corporation and Acquisition Corp is a corporation, each
duly organized, validly existing and in good standing under the laws of its
respective jurisdiction of organization and each has all requisite corporate or
other power and authority to own or lease and operate its properties and to
carry on its business as now conducted. Each of LightTouch and Acquisition Corp
has delivered to Vanishing Point complete and correct copies of its Articles of
Incorporation and By-Laws and all amendments thereto. The Articles of
Incorporation and By-Laws, and all amendments thereto, of LightTouch have been
duly authorized and are in full force and effect.
Section 3.2. APPROVAL; BINDING EFFECT. (a) Each of LightTouch and
Acquisition Corp has all requisite corporate or other power and full legal right
to enter into this Agreement and to perform all of its agreements and
obligations hereunder and thereunder in accordance with its respective terms.
This Agreement has been duly authorized, executed and delivered by each of
LightTouch and Acquisition Corp and constitutes the legal, valid and binding
obligation of LightTouch and Acquisition Corp, enforceable against each of
LightTouch and Acquisition Corp in accordance with its terms subject only to the
effects of bankruptcy, insolvency and similar laws of general application. The
approval of this Agreement by the sole member of the Board of Directors of
LightTouch prior to the date hereof is sufficient corporate approval by
LightTouch under applicable law, and no approval of the stockholders of
LightTouch is required in order for LightTouch to perform its obligations
hereunder and issue its
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stock to the stockholders of Vanishing Point pursuant to the terms hereof. The
execution, delivery and performance by LightTouch and Acquisition Corp of this
Agreement in accordance with its terms will not result in any violation of or
default or creation of any lien under, or the acceleration or vesting or
modification of any right or obligation under, or in any conflict with,
LightTouch's or Acquisition Corp's Certificate of Incorporation or By-Laws or
any judgment, decree, order, statute, rule or regulation which is applicable to
LightTouch or Acquisition Corp or any agreement, contract or instrument to which
LightTouch or Acquisition Corp is a party or by which either of them is bound,
except for any agreement, contract or instrument as to which any required
consent has been obtained.
(b) Each of LightTouch and LightTouch Vein & Laser of South
Carolina, Inc. ("LTVL-SC") had, as of the closing of that certain Asset Purchase
Agreement, dated March 29, 2000, by and between Xxxxxx X. Xxxxxxxxxx, M.D. and
LTVL-SC (the "LTVL-SC AGREEMENT"), all requisite corporate or other power and
full legal right to enter into such LTVL-SC Agreement and to perform all of its
agreements and obligations thereunder, and continues to have as of the date
hereof all requisite corporate or other power and full legal right to perform
all of its agreements and obligations thereunder, all in accordance with the
respective terms of the LTVL-SC Agreement. The LTVL-SC Agreement was duly
authorized, executed and delivered by each of LightTouch and LTVL-SC and
constitutes the legal, valid and binding obligation of LightTouch and LTVL-SC,
enforceable against each of LightTouch and LTVL-SC in accordance with its terms
subject only to the effects of bankruptcy, insolvency and similar laws of
general application.
(c) Each of LightTouch and LightTouch Vein & Laser of
Lexington, Inc. ("LTVL-LEX") had, as of the closing of that certain Agreement of
Merger, dated June 8, 2000, by and among Bluegrass Dermatology and Skin Surgery
Center, P.S.C., Center for Weight Control, PSC, LTVL-Lex and LightTouch (the
"LTVL-LEX AGREEMENT"), all requisite corporate or other power and full legal
right to enter into such LTVL-Lex Agreement and to perform all of its agreements
and obligations thereunder, and continues to have as of the date hereof all
requisite corporate or other power and full legal right to perform all of its
agreements and obligations thereunder, all in accordance with the respective
terms of the LTVL-Lex Agreement. The LTVL-Lex Agreement was duly authorized,
executed and delivered by each of LightTouch and LTVL-Lex and constitutes the
legal, valid and binding obligation of LightTouch and LTVL-Lex, enforceable
against each of LightTouch and LTVL-Lex in accordance with its terms subject
only to the effects of bankruptcy, insolvency and similar laws of general
application.
Section 3.3. SUBSIDIARIES. Except as set forth in Section 3.3 of the
LightTouch Disclosure Schedule, LightTouch does not have any subsidiaries and
does not own or hold of record and/or beneficially any shares of any class in
the capital of any corporation. LightTouch does not own any legal and/or
beneficial interests in any partnerships, business trusts or joint ventures or
in any other unincorporated trade or business enterprises.
Section 3.4. QUALIFICATION. LightTouch is duly qualified and in good
standing as a foreign corporation in those jurisdictions listed in Section 3.4
of the LightTouch Disclosure Schedule, which constitute all the jurisdictions in
which the character of
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the properties owned or leased or the nature of the activities conducted by it
makes such qualification necessary, except for any jurisdictions in which the
failure to so qualify, individually and in the aggregate, would not have a
Material Adverse Effect.
Section 3.5. CAPITALIZATION.
(a) The authorized capital of LightTouch is as set forth on
Section 3.5 of the LightTouch Disclosure Schedule. All outstanding shares of
capital stock of LightTouch are owned of record as of August 11, 2000 by the
stockholders set forth in Section 3.5 of the LightTouch Disclosure Schedule
hereto (except for shares that are owned by stockholders who do not own 5% or
more of the issued and outstanding stock of any class of capital stock of
LightTouch) and all outstanding shares of capital stock of LightTouch are
validly issued and outstanding, fully paid and non-assessable. LightTouch has
reserved the number of shares of Common Stock listed on Section 3.5 of the
LightTouch Disclosure Schedule for issuance pursuant to the stock options,
warrants, convertible notes and convertible preferred stock issued by LightTouch
and currently outstanding.
(b) Except as set forth in Section 3.5 of the LightTouch
Disclosure Schedule, LightTouch does not have and is not bound by any
outstanding subscriptions, options, warrants, calls, commitments or agreements
of any character calling for LightTouch to issue, deliver or sell, or cause to
be issued, delivered or sold any shares of LightTouch Common Stock or LightTouch
Preferred Stock or any other equity security of LightTouch or any securities
convertible into, exchangeable for or representing the right to subscribe for,
purchase or otherwise receive any shares of LightTouch Common Stock or
LightTouch Preferred Stock or any other equity security of LightTouch or
obligating LightTouch to grant, extend or enter into any such subscriptions,
options, warrants, calls, commitments or agreements. As of the date hereof there
are no outstanding contractual obligations of LightTouch to repurchase, redeem
or otherwise acquire any shares of capital stock of LightTouch. Section 3.5 of
the LightTouch Disclosure Schedule sets forth, among other things, the name of
each person holding an option as of the date hereof under the LightTouch Option
Plan, and the exercise price, vesting schedule and exercise period for such
option, the number of shares of LightTouch Common Stock subject to such option
and whether the consummation of the Merger will, pursuant to the terms of such
option or any related agreement, cause any option not previously exercisable to
become exercisable.
Section 3.6. LAWFUL ISSUANCE. All of the outstanding shares of
LightTouch Common Stock and LightTouch Preferred Stock were issued in conformity
with all applicable provisions of the Securities Act of 1933, as amended (the
"SECURITIES ACT"), applicable state securities laws and all rules and
regulations thereunder. There exists no valid right to rescind any purchase
thereof from or issuance thereof by LightTouch.
Section 3.7. SEC FILINGS.
(a) LightTouch has filed all forms, reports and documents
required to be filed by it with the U.S. Securities and Exchange Commission (the
"SEC") since April 2, 2000, and has heretofore delivered to Vanishing Point, in
the form filed with the SEC, (i) its initial Registration Statement on Form
10-SB and all Amended Registration Statements on Form 10-SB/A, (ii) its
Quarterly Report on Form 10-QSB
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for the period ended Xxxxx 00, 0000, (xxx) all proxy statements relating to the
Company's meetings of stockholders (whether annual or special) held since April
2, 2000 and (iv) all other forms, reports and other registration statements
(other than the Quarterly Report on Form 10-QSB not referred to in clause (ii)
above) filed by the Company with the SEC since April 2, 2000 (the forms, reports
and other documents referred to in clauses (i), (ii), (iii) and (iv) above being
referred to herein, collectively, as the "SEC REPORTS"). The SEC Reports (i)
were prepared in accordance with the requirements of the Securities Act, and the
Securities Exchange Act of 1934 (the "EXCHANGE ACT"), as the case may be, and
the rules and regulations thereunder and (ii) did not at the time they were
filed contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading. No subsidiary of LightTouch is required to file any form,
report or other document with the SEC.
(b) Each of the consolidated financial statements (including,
in each case, any notes thereto) contained in the SEC Reports was prepared in
accordance with generally accepted accounting principles applied on a consistent
basis throughout the periods indicated (except as may be indicated in the notes
thereto) and each fairly presented the consolidated financial position, results
of operations and changes in financial position of LightTouch and the
consolidated subsidiaries of LightTouch as at the respective dates thereof and
for the respective periods indicated therein except as otherwise noted therein
(subject, in the case of unaudited statements, to normal and recurring year-end
adjustments which were not and are not expected, individually or in the
aggregate, to be material).
(c) LightTouch has heretofore furnished to Vanishing Point
complete and correct copies of all amendments and modifications that have not
been filed by LightTouch with the SEC to all agreements, documents and other
instruments that previously had been filed by LightTouch with the SEC and are
currently in effect.
Section 3.8. FINANCIAL STATEMENTS. LightTouch has furnished to
Vanishing Point copies of (a) the consolidated balance sheets of LightTouch as
of December 31 of each of the years 1998 and 1999 (such consolidated balance
sheet as of December 31, 1999, being herein referred to as the "LIGHTTOUCH
AUDITED BALANCE SHEET"), and the related statements of operations, stockholders'
equity and cash flows of LightTouch for the fiscal years ended on such dates,
accompanied by a report and opinion thereon of Clark, Schaefer, Xxxxxxx & Co.,
and (b) the unaudited balance sheet of LightTouch as of June 30, 2000, and the
related statement of operations of LightTouch for the six-month period ended on
such date, certified by the chief financial officer of LightTouch (the
"LIGHTTOUCH UNAUDITED FINANCIAL STATEMENTS"). Each of such financial statements
was prepared in accordance with United States generally accepted accounting
principles applied on a basis consistent with prior periods, subject, in the
case of the Unaudited Financial Statements, to a lack of footnotes and normal
year-end adjustments consisting only of routine accruals; each of such balance
sheets fairly presents the financial condition of LightTouch as of its date; and
each of such statements of operations, stockholders' equity and cash flows
fairly presents the results of operations, changes in stockholders' equity and
cash flows of LightTouch for the period covered thereby.
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Section 3.9. ABSENCE OF CERTAIN CHANGES. Except as set forth in Section
3.9 of the LightTouch Disclosure Schedule, since the date of the LightTouch
Audited Balance Sheet, there has not been:
(a) any change in the assets, liabilities, sales, income or
business of LightTouch or in its relationships with suppliers, customers or
lessors, other than changes which were both in the ordinary course of business
and have not had, either in any case or in the aggregate, a Material Adverse
Effect;
(b) any acquisition or disposition by LightTouch of any
material asset or property other than in the ordinary course of business;
(c) any damage, destruction or loss, whether or not covered by
insurance, which has had, either in any case or in the aggregate, a Material
Adverse Effect;
(d) any declaration, setting aside or payment of any dividend
or any other distributions in respect of any class of the capital stock of
LightTouch;
(e) any issuance of any shares of any class of the capital
stock of LightTouch or any direct or indirect redemption, purchase or other
acquisition of any class of the capital stock of LightTouch;
(f) any increase in the compensation, pension or other benefits
payable or to become payable by LightTouch to any of its officers or employees,
or any bonus payments or arrangements made to or with any of them, except for
employees whose compensation, including any such bonus, will not exceed $60,000
in LightTouch's 2000 fiscal year;
(g) any termination of employees of, or consultants to,
LightTouch;
(h) any forgiveness or cancellation of any material debt or
claim by LightTouch or any waiver of any right of material value other than
compromises of accounts receivable in the ordinary course of business;
(i) any entry by LightTouch into any material transaction other
than in the ordinary course of business;
(j) any incurrence by LightTouch of any material 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;
(k) any mortgage, pledge, lien, lease, security interest or
other charge or encumbrance on any of the assets, tangible or intangible, of
LightTouch;
(l) any change in accounting principles, practices or methods
used by LightTouch; or
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(m) any discharge or satisfaction by LightTouch of any lien or
encumbrance or payment by LightTouch of any obligation or liability (fixed or
contingent) other than (A) current liabilities included in the LightTouch
Audited Balance Sheet (including current maturities of long-term debt) and (B)
current liabilities incurred since the date of the LightTouch Audited Balance
Sheet in the ordinary course of business.
Section 3.10. TITLE TO PROPERTY: LEASES, ETC. Except as set forth in
Section 3.10(a) of the LightTouch Disclosure Schedule, LightTouch has good and
marketable title to all of its properties and assets, including, without
limitation, all those reflected in the LightTouch Audited Balance Sheet (except
for properties or assets sold or otherwise disposed of in the ordinary course of
business since the date of the LightTouch Audited Balance Sheet), all free and
clear of all liens, pledges, charges, security interests, mortgages,
encumbrances or title retention agreements of any kind or nature. LightTouch
owns no real property. Section 3.10(c) of the LightTouch Disclosure Schedule
sets forth a complete and correct description of all leases of real property
under which LightTouch is lessor or lessee and all other leases to which
LightTouch is a party, whether as lessor or lessee. Complete and correct copies
of all such leases have been delivered to Vanishing Point. Each such lease is
valid and subsisting and no event or condition exists which constitutes, or
after notice or lapse of time or both would constitute, a default thereunder,
except for those defaults which will not have, either individually or in the
aggregate, a Material Adverse Effect. Except as set forth in Section 3.10(c) of
the LightTouch Disclosure Schedule, the leasehold interests of LightTouch are
subject to no lien or other encumbrance, and LightTouch is in quiet possession
of the properties covered by such leases. LightTouch has not received any notice
that either the whole or any material portion of any real property leased by
LightTouch is to be condemned, requisitioned or otherwise taken by any public
authority. LightTouch has no knowledge of any public improvement that may result
in special assessments against or otherwise affect any of the real property
leased by LightTouch.
Section 3.11. INDEBTEDNESS. Except for Indebtedness (as defined below)
reflected or reserved against in the LightTouch Audited Balance Sheet and
Indebtedness incurred in the ordinary course of business after the date of the
LightTouch Audited Balance Sheet, LightTouch has no Indebtedness outstanding at
the date hereof. LightTouch is not in default with respect to any outstanding
Indebtedness or any instrument relating thereto and except as set forth in
Section 3.11 of the LightTouch Disclosure Schedule no such Indebtedness or any
instrument or agreement relating thereto purports to limit the issuance of any
securities by LightTouch or the operation of the business of LightTouch.
Complete and correct copies of all instruments (including all amendments,
supplements, waivers and consents) relating to any Indebtedness of LightTouch
have been furnished to Vanishing Point.
Section 3.12. ABSENCE OF UNDISCLOSED LIABILITIES. Except to the extent
reflected or reserved against in the LightTouch Audited Balance Sheet or
incurred in the ordinary course of business after the date of the LightTouch
Audited Balance Sheet or described in any Schedule hereto, LightTouch has no
material liabilities or obligations of any nature, whether accrued, absolute,
contingent or otherwise (including, without limitation, liabilities as guarantor
or otherwise with respect to obligations of others) and
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whether due or to become due, including, without limitation, any liabilities for
taxes due or to become due.
Section 3.13. TAXES. Except as set forth in Section 3.13 of the
LightTouch Disclosure Schedule,
(a) LightTouch has duly filed with the appropriate federal,
state, foreign or local government agencies all of the income, sales, use,
employment and other tax returns and reports required to be filed by it and has
paid all Taxes shown to be due thereon, and all such returns and reports were
correct and complete in all respects. LightTouch is not currently the
beneficiary of any extension of time within which to file any such return. No
claim has ever been made by an authority in a jurisdiction where LightTouch does
not file tax returns or reports that it is or may be subject to imposition of
any Taxes by that jurisdiction. There are no liens on any of the assets of
LightTouch that arose in connection with the failure (or alleged failure) to pay
Taxes.
(b) LightTouch has withheld and paid all Taxes required to have
been withheld and paid in connection with amounts paid or owing to any employee,
consultant, independent contractor, creditor, stockholder or other third party.
(c) LightTouch does not expect any authority to assess any
additional Taxes for any period for which tax returns or reports have been
filed. LightTouch is not aware of any dispute or claim concerning any liability
for Taxes of LightTouch. Schedule 3.13(c) attached hereto lists all federal,
state, local, and foreign tax returns or reports filed with respect to
LightTouch for taxable periods ended on or after December 31, 1997, indicates
those tax returns or reports that have been audited, and indicates those tax
returns and/or reports that are currently subject to audit.
(d) No waiver of any statute of limitations relating to Taxes
has been executed or given by LightTouch.
(e) LightTouch has not (i) filed a consent on Section 341(f) of
the Code concerning collapsible corporations, (ii) made, and 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 Section 280G of the Code or that are subject to an excise tax
under Section 4999 of the Code, or (iii) been a United States real property
holding corporation within the meaning of Section 897(c)(2) of the Code during
the applicable period specified in Section 897(c)(1)(A)(ii) of the Code.
LightTouch is not a party to any tax allocation or sharing agreement. LightTouch
(i) has not been a member of an Affiliated Group (as defined in Section 1504 of
the Code) filing a consolidated federal income tax return; and (ii) does not
have any liability for Taxes of any Person (other than LightTouch) under Treas.
Reg. ss. 1.1502-6 (or any similar provision of state, local or foreign law), as
a transferee or successor by contract or otherwise.
(f) The unpaid taxes of LightTouch (i) did not, as of the date
of the LightTouch Audited Balance Sheet, exceed the reserve for tax liabilities
(rather than any reserve for deferred Taxes established to reflect timing
differences between the book and Tax income) set forth on the face of the
LightTouch Audited Balance Sheet
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(rather than in any notes thereto) and (ii) do not exceed that reserve as
adjusted for the passage of time through the Closing Date in accordance with
past custom and practice of LightTouch in filing its tax returns.
Section 3.14. LITIGATION, ETC. Except as set forth in Section 3.14 of
the LightTouch Disclosure Schedule, no action, suit, proceeding or investigation
(whether conducted by any judicial or regulatory body or other person) is
pending or, to the knowledge of LightTouch, threatened against LightTouch (nor
is there any basis therefor known to LightTouch) which questions the validity of
this Agreement or any action taken or to be taken pursuant hereto or which
might, either in any case or in the aggregate, have a Material Adverse Effect.
Set forth in Section 3.14 of the LightTouch Disclosure Schedule is a description
of all claims for indemnification presently pending with LightTouch by any past
or present employee, officer or director of LightTouch ("LIGHTTOUCH INDEMNIFIED
PARTIES") or as to which LightTouch has made indemnification payments in the
past. In addition, set forth in Section 3.14 of the LightTouch Disclosure
Schedule is a description of all presently pending or threatened matters as to
which LightTouch believes it may reasonably be expected that a material claim
for indemnification by LightTouch might be made by any LightTouch Indemnified
Party and a list of all existing indemnification agreements between LightTouch
and any LightTouch Indemnified Party together with the form or forms of such
agreements.
Section 3.15. SAFETY, ZONING AND ENVIRONMENTAL MATTERS. Neither the
offices or properties in or on which LightTouch carries on its business nor the
activities carried on therein are in material violation of any zoning, health or
safety law or regulation, including, without limitation, the Occupational Safety
and Health Act of 1970, as amended.
(a) Except as set forth in Section 3.15 of the LightTouch
Disclosure Schedule:
(i) LightTouch is not in violation, or alleged violation,
of any judgment, decree, order, law, license, rule or regulation
pertaining to environmental matters, including without limitation,
those arising under the Environmental Laws, which violation would have,
either individually or in the aggregate, a Material Adverse Effect;
(ii) LightTouch has not received written notice from any
third party, including without limitation any federal, state or local
governmental authority, (A) that LightTouch or any predecessor in
interest has been identified by 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); (B) that any
Hazardous Substances which any one of them has generated, transported
or disposed of has been found at any site at which a federal, state or
local agency or other third party has conducted or has ordered that
LightTouch or any predecessor in interest conduct a remedial
investigation, removal or other response action pursuant to any
Environmental Law; or (C) that any of them is or shall be a named party
to any claim, action, cause of action, complaint (contingent or
otherwise) legal or administrative proceeding arising out of any third
party's incurrence of costs, expenses, losses
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or damages of any kind whatsoever in connection with the release of
Hazardous Substances; and
(iii) to the best of LightTouch's knowledge, none of the
properties of LightTouch are or shall be subject to any applicable
environmental cleanup responsibility law or environmental restrictive
transfer law or regulation by virtue of the transactions set forth
herein and contemplated hereby.
(b) Attached as part of Section 3.15 of the LightTouch
Disclosure Schedule is a list of all documents, reports, site assessments, data,
communications or other materials in the possession of LightTouch, which to
LightTouch's knowledge contain any material information with respect to
potential environmental liabilities associated with any real property owned,
leased or operated by LightTouch and relating to compliance with Environmental
Laws or the environmental condition of such properties and adjacent properties.
LightTouch has furnished to Vanishing Point complete and accurate copies of all
of the documents, reports, site assessments, data, communications and other
materials listed in Section 3.15 of the LightTouch Disclosure Schedule.
Section 3.16. LABOR RELATIONS. LightTouch is in full compliance 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 engaged in any unfair labor practice, except where such
non-compliance or practice could not have, either in any case or in the
aggregate, a Material Adverse Effect. There is no charge pending or, to the
knowledge of LightTouch, threatened against LightTouch alleging unlawful
discrimination in employment practices before any court or agency and there is
no charge of or proceeding with regard to any unfair labor practice against
LightTouch pending before the National Labor Relations Board which, either in
any case or in the aggregate, could have a Material Adverse Effect. There is no
labor strike, dispute, slow-down or work stoppage actually pending or threatened
against or involving LightTouch. No one has petitioned within the last three
years, and no one is now petitioning, for union representation of any of
LightTouch's employees. No grievance or arbitration proceeding arising out of or
under any collective bargaining agreement is pending against LightTouch and no
claim therefor has been asserted. None of the employees of LightTouch is covered
by any collective bargaining agreement, and no collective bargaining agreement
is currently being negotiated by LightTouch. LightTouch has not experienced any
work stoppage or other material labor difficulty during the last three years.
Section 3.17. MATERIAL AGREEMENTS. Except as set forth in Section 3.17
of the LightTouch Disclosure Schedule, and except for this Agreement and the
agreements specifically referred to herein, LightTouch is not a party to or
bound by any of the following agreements (with the following agreements, and the
agreements referred to in Section 3.17 of the LightTouch Disclosure Schedule
collectively referred to as the "LIGHTTOUCH MATERIAL AGREEMENTS"):
(a) any agreement, arrangement or commitment that is material
to the financial condition, results of operations, business or prospects of
LightTouch;
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(b) any agreement under which the consequences of a default or
termination could have a Material Adverse Effect;
(c) any plan or contract regarding or providing for bonuses,
pensions, options, stock purchases, deferred compensation, severance benefits,
retirement payments, profit sharing, stock appreciation, collective bargaining
or the like, or any contract or agreement with any labor union;
(d) any employment or consulting contract or contract for
personal services not terminable at will by LightTouch without penalty to
LightTouch;
(e) any agreement for the purchase of any commodity, product,
material, supplies, equipment or other personal property, or for the receipt of
any service, other than purchase orders entered into in the ordinary course of
business for less than $25,000 each and which in the aggregate do not exceed
$100,000;
(f) any agreement for the purchase or lease of any fixed asset,
whether or not such purchase or lease is in the ordinary course of business, for
a price in excess of $50,000;
(g) any agreement for the sale of any commodity, product,
material, equipment, or other personal property, or the furnishing by LightTouch
of any service, other than contracts with customers entered into in the ordinary
course of business;
(h) any agreement providing for the purchase of all or
substantially all of its requirements of a particular product from a supplier,
or for periodic minimum purchases of a particular product from a supplier;
(i) any agreement with any sales agent, distributor or OEM of
products of LightTouch;
(j) any agreement concerning a partnership or joint venture
with one or more Persons;
(k) any confidentiality agreement or any non-competition
agreement or other contract or agreement containing covenants limiting
LightTouch's freedom to compete in any line of business or in any location or
with any Person;
(l) any license agreement (as licensor or licensee);
(m) any agreement with any present or former officer, director,
consultant, agent or stockholder of LightTouch or with any Affiliate of any of
them;
(n) any loan agreement, indenture, note, bond, debenture or any
other document or agreement evidencing a capitalized lease obligation or
Indebtedness to any Person;
(o) any agreement of guaranty, indemnification, or other
similar commitment with respect to the obligations or liabilities of any other
Person
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(other than lawful indemnification provisions contained in the Charter and
By-Laws of LightTouch); or
(p) any other agreement (or group of related agreements or
contracts) the performance of which involves consideration paid or received by
LightTouch in excess of $50,000.
All of the LightTouch Material Agreements have been duly authorized by
appropriate corporate action, are valid and are in full force and effect, and
LightTouch is not in default under any of them, nor to LightTouch's knowledge is
any other party to any such LightTouch Material Agreement in default thereunder,
nor does any event or condition exist which after notice or lapse of time or
both would constitute a default thereunder which default would cause, either in
any case or in the aggregate, a Material Adverse Effect. Except as set forth in
Section 3.17 of the LightTouch Disclosure Schedule, no approval or consent of
any person is needed in order that the LightTouch Material Agreements continue
in full force and effect following the consummation of the transactions
contemplated by this Agreement and no Material Agreement includes any provision
the effect of which may be to terminate such contract or enlarge or accelerate
any obligations of LightTouch thereunder or give additional rights to any other
party thereto upon consummation of the transactions contemplated by the
Agreement. LightTouch has delivered to Vanishing Point true, correct and
complete copies of all :LightTouch Material Agreements, together with all
modifications and supplements thereto.
Section 3.18. EMPLOYEE BENEFIT PLANS.
(a) Except as set forth in Section 3.18 of the LightTouch
Disclosure Schedule, neither LightTouch nor any trade or business (whether or
not incorporated) that is a member of a group treated as affiliated under
Section 414(b), (c), (m) or (o) of the Code of which LightTouch also is a member
(a "LIGHTTOUCH RELATED ENTITY") maintains or has any obligation to make
contributions to, any ERISA Plan within the meaning of Section 3(3) of ERISA, or
any Non-ERISA Plan. LightTouch has heretofore delivered to Vanishing Point true,
correct and complete copies of each ERISA Plan and each Non-ERISA Plan and any
associated funding instruments and, with respect to any ERISA plan, the two most
recently completed annual reports (with any required attachments), if any, the
most recent IRS determination letter, and any other advisory opinions or rulings
applicable to such Plan. All such ERISA Plans and Non-ERISA Plans have been
maintained and operated in all material respects in accordance with all federal,
state and local laws applicable to such plans, and the terms and conditions of
the respective plan documents.
(b) Neither LightTouch nor any LightTouch Related Entity has
engaged in any transaction in connection with which it could be subject to
either a civil penalty assessed pursuant to Section 502(i) of ERISA, or a tax
imposed by Section 4975 of the Code, or any tax or penalty under any federal,
state or local laws applicable to any Non-ERISA Plan. No liability to the PBGC,
or to any multi-employer pension plan within the meaning of section 3(35) of
ERISA, or to any other governmental authority, pension or retirement board, or
other agency, under any federal, state or local law, has been or is expected to
be incurred by LightTouch or any LightTouch Related Entity with respect to any
ERISA Plan or Non-ERISA Plan.
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Neither LightTouch, nor any LightTouch Related Entity, maintains or contributes
to an ERISA Plan which is a pension plan (as defined in Section 3(2) of ERISA)
other than LightTouch's Employee 401(k) Investment Plan.
(c) Full payment has been made of all amounts that LightTouch
or any LightTouch Related Entity is required, under the terms of each ERISA Plan
and Non-ERISA Plan, or pursuant to applicable federal, state or local law, to
have paid as contributions to such ERISA Plan or Non-ERISA Plan as of the last
day of the most recent fiscal year of such ERISA Plan or Non-ERISA Plan ended
prior to the date hereof.
(d) Except as set forth in Section 3.18 of the LightTouch
Disclosure Schedule,
(i) no action, suit, proceeding or investigation is
pending or threatened against LightTouch, other than routine claims for
benefits as set forth in Section 3.18 of the LightTouch Disclosure
Schedule, concerning any ERISA Plan or Non-ERISA Plan of the LightTouch
or, to the knowledge of LightTouch, any fiduciary or service provider
thereof and, to the knowledge of LightTouch there is no basis for any
such legal action or proceeding;
(ii) no communication, report or disclosure has been made
by or on behalf of LightTouch which, at the time made, did not
accurately reflect the terms and operations of any ERISA Plan or
Non-ERISA Plan of LightTouch;
(iii) no ERISA Plan or Non-ERISA Plan of LightTouch
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 and
Section 4980B of the Code);
(iv) no benefits due under any ERISA Plan or Non-ERISA
Plan of LightTouch have been forfeited subject to the possibility of
reinstatement (which possibility would still exist on or after the
Closing Date); and
(v) LightTouch has not undertaken to maintain any ERISA
Plan or Non-ERISA Plan for any period of time and each such Plan is
terminable at the sole discretion of the sponsor thereof, subject only
to such constraints as may imposed by applicable law.
(e) EFFECT OF TRANSACTIONS. Except as set forth in Section 3.18
of the LightTouch Disclosure Schedule, the execution of this Agreement and the
consummation of the transactions contemplated herein will not result in any
payment (whether of severance pay or otherwise) becoming due from any ERISA Plan
or Non-ERISA Plan of LightTouch to any current or former director, officer,
consultant or employee of LightTouch 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.
Section 3.19. POTENTIAL CONFLICTS OF INTEREST. Except as set forth in
Section 3.19 of the LightTouch Disclosure Schedule, no officer or director of
LightTouch
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(a) owns, directly or indirectly, any interest in (excepting not more than 1%
stock holdings for investment purposes in securities of publicly held and traded
companies) or is an officer, director, employee or consultant of any Person
which is a competitor, lessor, lessee, customer or supplier of Vanishing Point
or LightTouch; (b) owns, directly or indirectly, in whole or in part, any
tangible or intangible property which LightTouch is using or the use of which is
necessary for the business of LightTouch; or (c) has any cause of action or
other claim whatsoever against, or owes any amount to, LightTouch, 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; Indebtedness that is included in the liabilities on the LightTouch
Unaudited Balance Sheet; and claims under agreements that are listed on the
LightTouch Disclosure Schedule.
Section 3.20. TRADEMARKS, PATENTS, ETC.
(a) Section 3.20(a) of the LightTouch Disclosure Schedule sets
forth a complete and accurate list of (i) all patents, registered trademarks,
registered trade names and registered copyrights owned by and registered in the
name of LightTouch, all patent applications and trademarks and copyright
registration applications owned by LightTouch, all material licenses and other
material agreements relating thereto, and (ii) all material agreements relating
to Intellectual Property which LightTouch has licensed or authorized for use by
others or which has been licensed or authorized for use to LightTouch. Each of
the agreements identified in Section 3.20(a) of the LightTouch Disclosure
Schedule is binding on LightTouch, and to the best of LightTouch's knowledge is
binding on each other party to such agreement. True and complete copies of all
such agreements, and any amendments thereto, have been provided to Vanishing
Point. Except as otherwise provided on Section 3.20 of the LightTouch Disclosure
Schedule, all of LightTouch's patents, patent applications, trademark
registrations, trademark registration applications and registered copyrights
listed in Section 3.20(a) of the LightTouch Disclosure Schedule have been duly
registered in, filed in or issued by the United States Patent and Trademark
Office, the United States Copyrights Office, or the relevant offices of non-US
jurisdictions as identified in Section 3.20(a) of the LightTouch Disclosure
Schedule, and have been properly maintained and renewed in accordance with all
applicable provisions of law of the United States and each such other
jurisdiction. Except as set forth in Section 3.20(a) of the LightTouch
Disclosure Schedule, LightTouch has no actual knowledge of any reason that would
prevent any pending applications listed in Section 3.20(a) of the LightTouch
Disclosure Schedule to register trademarks, service marks or copyrights or any
pending patent applications from being granted, except for applications the
non-registration or non-grant of which, singly and in the aggregate, would not
have a Material Adverse Effect.
(b) Except as set forth in Section 3.20(b) of the LightTouch
Disclosure Schedule, neither LightTouch, nor to LightTouch's actual knowledge,
the other party or parties thereto, is in breach of any material license, or
other material agreement relating to Intellectual Property identified in Section
3.20(a) of LightTouch Disclosure Schedule, except for any breaches that singly
and in the aggregate would not cause any such Intellectual Property listed in
Section 3.20(a) of the LightTouch Disclosure Schedule to no longer be available
to LightTouch or otherwise to have a Material Adverse Effect. LightTouch has
complied in all material respects with all of its
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material obligations of confidentiality in respect of the Intellectual Property
of others and knows of no material violation of such obligations of
confidentiality as are owed to LightTouch except for any non-compliance or
violations that singly or in the aggregate would not cause any such Intellectual
Property listed in Section 3.20(a) of the LightTouch Disclosure Schedule to no
longer be available to LightTouch or otherwise have a Material Adverse Effect.
LightTouch provided to Vanishing Point copies of all material written agreements
between LightTouch and its key salaried employees. LightTouch has not made any
material confidential proprietary information available to any Person other than
employees of LightTouch except pursuant to written agreements requiring the
recipients to maintain the confidentiality of such information, other than
disclosures which singly or in the aggregate would not have a Material Adverse
Effect. To the best of LightTouch's actual knowledge, no director, officer, or
key employee of LightTouch is subject to confidentiality obligations in favor of
any third person (other than confidentiality obligations to which LightTouch is
also subject) the material breach of which would subject LightTouch to any
Material Adverse Effect or which would cause any material Intellectual Property
listed in Schedule 3.20(a) of the Light Touch Disclosure Schedule to no longer
be available to it. No claims have been asserted, and to LightTouch's actual
knowledge no claims are pending, by any Person against LightTouch regarding the
unauthorized manufacture, use or sale of any such Intellectual Property, or
challenging or questioning the validity or effectiveness of any material license
or other material agreement relating to Intellectual Property, and to
LightTouch's actual knowledge there is no basis for such claim, except in the
case of any of the foregoing for any claims that individually and in the
aggregate will not have a Material Adverse Effect.
Section 3.21. INSURANCE. Section 3.21 of the LightTouch Disclosure
Schedule sets forth a summary of all insurance policies (including without
limitation policies providing theft, fire, liability (including products
liability) workers' compensation, life, property and casualty, directors' and
officers', benefits or coverage for any Plan described in Section 3.18, and bond
and surety arrangements) to which LightTouch has been a party, a named insured,
or otherwise the beneficiary of coverage at any time within the past three (3)
years and specifies the insurer, the amount of coverage, type of insurance,
expiration date, and any retroactive premium adjustments or other loss sharing
arrangements. With respect to each such insurance policy: (a) the policy is
legal, valid, binding, enforceable, and in full force and effect; (b) the policy
will continue to be legal, valid, binding, enforceable, and in full force and
effect on identical terms following the consummation of the transactions
contemplated hereby; (c) neither LightTouch nor any other party to the policy is
in breach or default (including with respect to the payment of premiums or the
giving of notices), and no event has occurred which, with notice or the lapse of
time, would constitute such a breach or default, or permit termination,
modification, or acceleration under the policy; and (d) no party to the policy
has repudiated any provision thereof. LightTouch has been covered during the
past three (3) years by insurance in scope and amount customary and reasonable
for the businesses in which it has engaged during the aforementioned period.
Section 3.21 of the LightTouch Disclosure Schedule describes any self-insurance
arrangements affecting LightTouch.
Section 3.22. BANK ACCOUNTS, SIGNING AUTHORITY, POWERS OF ATTORNEY.
Except as set forth in Section 3.22 of the LightTouch Disclosure Schedule,
LightTouch has no account or safe deposit box in any bank and no person has any
power, whether singly
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or jointly, to sign any checks on behalf of LightTouch, to withdraw any money or
other property from any bank, brokerage or other account of LightTouch or to act
under any power of attorney granted by LightTouch at any time for any purpose.
Section 3.22 of the LightTouch Disclosure Schedule also sets forth the names of
all persons authorized to borrow money or sign notes on behalf of LightTouch.
Section 3.23. GOVERNMENTAL CONSENT, ETC. No consent, approval or
authorization of or registration, designation, declaration or filing with any
governmental authority, federal or other, on the part of LightTouch or
Acquisition Corp, is required in connection with the Merger or the consummation
of any other transactions contemplated hereby, except for the filing of the
Certificate of Merger with the Delaware Secretary of State.
Section 3.24. MINUTE BOOKS. The minute books of LightTouch and
Acquisition Corp made available to Vanishing Point for inspection accurately
record therein, in all material respects, all actions taken by LightTouch's and
Acquisition Corp's Boards of Directors and stockholders.
Section 3.25. BROKERS. Neither LightTouch nor Acquisition Corp has
retained, utilized or been represented by, or is obligated to pay a fee to, any
broker or finder in connection with the negotiation or consummation of this
Agreement or the transactions contemplated hereby.
Section 3.26. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC. LightTouch
has complied in all material respects with, and is in compliance in all material
respects with, (a) all laws, statutes, governmental regulations and all judicial
or administrative tribunal orders, judgments, writs, injunctions, decrees or
similar commands applicable to its business and (b) its Certificate of
Incorporation and By-Laws, each as amended to date. Except as set forth in
Section 3.26 of the LightTouch Disclosure Schedule, LightTouch has not
committed, been charged with, or been under investigation with respect to, nor
does there exist, any violation by LightTouch of any provision of any federal,
state or local law or administrative regulation, except for such violations
which would not have, either in any case or in the aggregate, a Material Adverse
Effect. LightTouch has and maintains, and Section 3.26 of the LightTouch
Disclosure Schedule sets forth, a complete and correct list of, all such
licenses, permits and other authorizations from all such governmental
authorities as are necessary for the conduct of its business or in connection
with the ownership or use of its properties, all of which except as expressly
designated on Section 3.26 of the LightTouch Disclosure Schedule are in full
force and effect, and true and complete copies of all of which have previously
been delivered to Vanishing Point. None of such licenses, permits or other
authorizations are subject to revocation, termination or modification as a
result of the consummation of the transactions contemplated by this Agreement.
Section 3.27. ABSENCE OF REGISTRATION OBLIGATIONS. Except as set forth
in Section 3.27 of the LightTouch Disclosure Schedule, LightTouch has no
obligation, contingent or otherwise, by reason of any agreement to register any
of its securities including the shares of Light Touch Common Stock to be issued
to the Vanishing Point Stock holders pursuant to this Agreement under the
Securities Act.
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Section 3.28. NEWLY ORGANIZED ENTITY. Acquisition Corp was organized in
Delaware on August 2, 2000 for the purpose of entering into and performing this
Agreement. Acquisition Corp has not engaged in any business, is not a party to
any LightTouch Material Agreement except for this Agreement, and has no
liabilities or obligations of any kind other than its obligations under this
Agreement and its obligations for Taxes that are payable by virtue of its
existence as a corporation.
ARTICLE 4
CONDUCT OF BUSINESS PRIOR TO EFFECTIVE TIME
Vanishing Point covenants and agrees that, from and after the date of
this Agreement and until the Effective Time, except as otherwise specifically
consented to or approved by LightTouch in writing, Vanishing Point shall comply,
and shall cause each of its subsidiaries to comply, with the following covenants
insofar as they relate to Vanishing Point, and LightTouch covenants and agrees
that, from and after the date of this Agreement and until the Effective Time,
except as otherwise specifically consented to or approved by Vanishing Point in
writing, LightTouch shall comply, and shall cause each of its subsidiaries to
comply, with the following covenants insofar as they relate to LightTouch:
Section 4.1. FULL ACCESS. Vanishing Point shall afford to Acquisition
Corp and LightTouch and their authorized representatives full access during
normal business hours to all properties, books, records, contracts and documents
of Vanishing Point and a full opportunity to make such investigations as they
shall desire to make of Vanishing Point, and Vanishing Point shall furnish or
cause to be furnished to LightTouch and Acquisition Corp and their authorized
representatives all such information with respect to the affairs and businesses
of Vanishing Point as LightTouch may reasonably request. LightTouch shall afford
to Vanishing Point and its authorized representatives full access during normal
business hours to all properties, books, records, contracts and documents of
LightTouch and a full opportunity to make such investigations as it shall desire
to make of LightTouch, and LightTouch shall furnish or cause to be furnished to
Vanishing Point and its authorized representatives all such information with
respect to the affairs and businesses of LightTouch as Vanishing Point may
reasonably request.
Section 4.2. CARRY ON IN REGULAR COURSE. Except as set forth in Section
4.2 of the Vanishing Point Disclosure Schedule or LightTouch Disclosure
Schedule, Vanishing Point and LightTouch shall each maintain their owned and
leased properties in good operating condition and repair, shall make all
necessary renewals, additions and replacements thereto, and shall carry on their
business diligently and substantially in the same manner as heretofore and shall
not make or institute any unusual or novel methods of manufacture, purchase,
sale, lease, management, accounting or operation.
Section 4.3. NO DIVIDENDS, ISSUANCES, REPURCHASES, ETC. Neither
Vanishing Point nor LightTouch shall declare or pay any dividends (whether in
cash, shares of stock or otherwise) on, or make any other distribution in
respect of, any shares of its capital stock, or issue, purchase, redeem or
acquire for value any shares of its capital
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stock, except that Vanishing Point or LightTouch may issue shares of their
Common Stock pursuant to the exercise of outstanding options or warrants or
pursuant to the exercise of outstanding convertible notes or preferred stock,
PROVIDED HOWEVER, that if pursuant to the terms of any such option Vanishing
Point or LightTouch is permitted to elect to receive either cash or a promissory
note for the exercise price of such option or warrant, Vanishing Point or
LightTouch, as applicable, shall, unless the other of them consents otherwise in
writing, elect in each such instance to receive cash.
Section 4.4. NO GENERAL INCREASES. Neither Vanishing Point nor
LightTouch shall grant any general or uniform increase in the rates of pay of
employees or grant any general or uniform increase in the benefits under any
bonus or pension plan or other contract or commitment or increase the
compensation payable or to become payable to officers, key salaried employees or
agents, or increase any insurance, pension or other benefit plan, payment or
arrangement made to, for or with any such officers, key salaried employees or
agents or make any bonus payments to directors, officers, employees or
consultants.
Section 4.5. CONTRACTS AND COMMITMENTS. Except as set forth in Section
4.2 of the Vanishing Point Disclosure Schedule, Vanishing Point shall not enter
into any contract or commitment or engage in any transaction not in the usual
and ordinary course of business and consistent with its normal business
practices. Except as set forth in Section 4.2 of the LightTouch Disclosure
Schedule, LightTouch shall not enter into any contract or commitment or engage
in any transaction not in the usual and ordinary course of business and
consistent with its normal business practices.
Section 4.6. CAPITAL ASSETS. Neither Vanishing Point nor LightTouch
shall acquire or sell any capital asset other than in the ordinary course of
business.
Section 4.7. EXCLUSIVE LICENSES. Neither Vanishing Point nor LightTouch
shall enter into any exclusive license agreements as licensor or otherwise
transfer or grant any rights with respect to Intellectual Property, except in
the ordinary course of business consistent with past practice.
Section 4.8. INSURANCE. Vanishing Point and LightTouch shall each
maintain with financially sound and reputable insurance companies, funds or
underwriters adequate insurance (including, without limitation, the insurance
described in Section 2.20 of the Vanishing Point Disclosure Schedule with
respect to Vanishing Point and the insurance described in Section 3.21 of the
LightTouch Disclosure Schedule with respect to LightTouch) of the kinds,
covering such risks and in such amounts and with such deductibles and exclusions
as are consistent with prudent business practice.
Section 4.9. PRESERVATION OF ORGANIZATION. Vanishing Point and
LightTouch shall each use their reasonable efforts to preserve their respective
business organizations intact, and to preserve their present relationships with
suppliers and customers and others having business relations with them. Neither
Vanishing Point nor LightTouch shall terminate, and each shall use its
reasonable efforts to keep available to them, the officers and employees of
Vanishing Point and LightTouch. Neither Vanishing Point nor LightTouch shall
amend its Certificate of Incorporation or by-laws, and LightTouch shall not
permit to be amended the Certificate of Incorporation or
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by-laws of Acquisition Corp Neither Vanishing Point nor LightTouch shall merge
or consolidate with any other corporation, or acquire any stock of, or, except
in the ordinary course of business, acquire any assets or property of, any other
business entity whatsoever.
Section 4.10. NO DEFAULT. Neither Vanishing Point nor LightTouch shall
do any act or omit to do any act, or permit any act or omission to act, which
will cause a material breach of any material contract, commitment or obligation
of Vanishing Point or LightTouch.
Section 4.11. COMPLIANCE WITH LAWS. Vanishing Point and LightTouch
shall each duly comply in all material respects with all laws, regulations and
orders applicable with respect to its business.
Section 4.12. ADVICE OF CHANGE. Vanishing Point and LightTouch shall
each promptly advise the other in writing of any material adverse change in its
business, condition, operations, prospects or assets.
Section 4.13. CONSENTS OF THIRD PARTIES. Vanishing Point and LightTouch
shall each employ their reasonable efforts to secure, before the Closing Date,
the consent, in form and substance satisfactory to the other, to the
consummation of the transactions contemplated by this Agreement by each party to
any contract, commitment or obligation to which it is a party, under which such
transactions would constitute a default, would accelerate, modify or vest its
obligations, or would permit cancellation of any such contract.
Section 4.14. SATISFACTION OF CONDITIONS PRECEDENT. Vanishing Point
shall use its reasonable efforts to cause the satisfaction of the conditions
precedent contained in Articles 6 and 7 hereof, and LightTouch shall use its
reasonable efforts to cause the satisfaction of the conditions precedent
contained in Articles 6 and 8 hereof.
Section 4.15. OPTIONS. Except pursuant to that certain Amendments to
Convertible Note and Warrant by and between Vanishing Point and certain of the
holders of its convertible notes and warrants dated as of July 21, 2000 and as
contemplated in Sections by Sections 5.5(c), 7.13 and 8.11 hereof, neither
Vanishing Point nor LightTouch shall (a) issue any capital stock or grant any
stock options, warrants or other rights to buy its capital stock, (b) issue any
note or other security that is convertible into capital stock, or (c) except for
consummating the transactions contemplated by this agreement take any action to
accelerate the exercise date of any outstanding option or warrant.
ARTICLE 5
CERTAIN OTHER COVENANTS OF THE PARTIES
Section 5.1. REGULATORY MATTERS; CONSENTS. Each of Vanishing Point and
LightTouch will cooperate with the other and use all reasonable efforts to
prepare all necessary documentation, to effect all necessary filings and to
obtain all necessary permits, consents, approvals and authorizations of all
third parties and governmental
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bodies necessary to consummate the transactions contemplated by this Agreement.
Each party hereto shall have the right to review and approve in advance all
descriptions of it and its Affiliates which appear in any filing made in
connection with the transactions contemplated by this Agreement with any
governmental body. In exercising the foregoing right, the parties hereto shall
act reasonably and as promptly as practicable.
Section 5.2. MERGER-RELATED INFORMATION FOR VANISHING POINT
STOCKHOLDERS; APPROVAL OF Stockholders. Vanishing Point and LightTouch shall
cooperate to prepare and provide to the Vanishing Point Stockholders sufficient
information to satisfy the information disclosure requirements under applicable
provisions of the Securities Act, including information summarizing the business
of LightTouch, and explaining the rights of the former shareholders of Vanishing
Point following the consummation of the Merger (the "MERGER INFORMATION"). Such
Merger Information shall be delivered to each Vanishing Point Stockholder in
connection with their consideration and approval of the Merger and related
transactions. Vanishing Point will (a) as promptly as practicable, take all
steps necessary to duly call, give notice of, convene and hold a meeting of its
Stockholders, or obtain written consent therefrom, for the purpose of approving
this Agreement, the Merger and the other transactions contemplated hereby and
for such other purposes as may be necessary or desirable in connection
therewith, and (b) subject to any contrary fiduciary obligations of its Board of
Directors (as advised in writing by outside counsel), recommend to its
Stockholders the approval of such foregoing matters to be submitted by it to its
Stockholders.
Section 5.3. FURTHER ASSURANCES. Subject to the terms and conditions
herein provided, each of the parties hereto agrees to use all reasonable efforts
to, as promptly as practicable, take, or cause to be taken, all action and to
do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement. In case at any time after the
Effective Time any further action is necessary or desirable to carry out the
purposes of this Agreement, the proper officers and directors of each party to
this Agreement shall take all such necessary action.
Section 5.4. CONVERSION OF VANISHING POINT OPTIONS.
(a) As provided in Section 1.3, all rights under any stock
option granted by Vanishing Point pursuant to the Vanishing Point Option Plan
outstanding at the Effective Time (the "OUTSTANDING OPTIONS") shall be converted
into corresponding rights to purchase shares of LightTouch Common Stock in
accordance with Section 1.3; PROVIDED, HOWEVER, that in the case of any option
to which Section 421 of the Code applies by reason of its qualification under
Section 422 of the Code ("QUALIFIED STOCK OPTIONS"), the option price, number of
shares purchasable pursuant to such option and terms and conditions of exercise
of such option shall be determined in order to comply with Section 424(a) of the
Code.
(b) As soon as practicable after the Effective Time, LightTouch
shall deliver to all holders of Outstanding Options appropriate notices setting
forth LightTouch's acknowledgment that it has assumed such Outstanding Options
and setting forth such holders' rights pursuant to the terms of such options and
the Vanishing Point Option Plan, and the agreements evidencing the grants of
such
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options shall continue in effect on the same terms and conditions (subject to
any adjustments to such agreements required by Section 1.3 or this Section 5.4
or otherwise as a result of the Merger).
(c) LightTouch shall take all action necessary to reserve for
issuance a sufficient number of shares of LightTouch Common Stock upon the
exercise of the Outstanding Options assumed by it in accordance with this
Section 5.4. Within sixty (60) days after the Effective Time, subject to (to the
extent required by LightTouch) all LightTouch employees having executed
agreements containing "lock-up" provisions satisfactory to LightTouch in its
sole discretion, LightTouch shall file a registration statement on Form S-8 (or
any successor form) with respect to the shares of LightTouch Common Stock
subject to Outstanding Options and shall use its reasonable efforts to maintain
the effectiveness of such registration statement, and shall deliver to holders
of Outstanding Options documents containing the information specified in Part I
of Form S-8.
Section 5.5. COVENANTS TO BE PERFORMED AFTER EFFECTIVE TIME. LightTouch
and Vanishing Point covenant and agree that the following shall occur after the
Effective Time, and LightTouch covenants and agrees to cause the following to
occur after the Effective Time:
(a) The chief executive offices of LightTouch shall be moved to
the facilities of Vanishing Point in Raleigh, North Carolina as of the Effective
Time, and the chief executive offices of Vanishing Point shall remain at such
facilities in Raleigh, North Carolina, until the Board of the Directors of
LightTouch or Vanishing Point, as applicable, determines otherwise after the
Effective Time.
(b) Vanishing Point and/or LightTouch shall negotiate in good
faith with Xxxxxxx Xxxxxx, Xxxx Xxxxxxx and Xxxxxxx Xxxxxxx the terms and
conditions of employment agreements for each of them, to be entered into within
90 days after the Closing Date, with such terms and conditions acceptable to the
Board of Directors of Vanishing Point and/or LightTouch, as applicable, and
Xxxxxxx Xxxxxx, Xxxx Xxxxxxx or Xxxxxxx Xxxxxxx, as applicable. Notwithstanding
the provisions of paragraph (a) of this Section 5.5, it is understood that
Xxxxxxx Xxxxxxx'x and certain other LightTouch officers' offices will continue
to be located until further notice in their present respective locations rather
than in Raleigh, North Carolina.
(c) Simultaneously with the execution of such employment
agreement with Xxxxxxx Xxxxxxx, one or more Persons who are (i) stockholders (or
their Affiliates) of LightTouch on the date hereof or (ii) Persons who have been
solicited by Xxxxxxx Xxxxxxx to invest new capital in LightTouch and who are not
stockholders (or their Affiliates) of Vanishing Point on the date hereof, shall
purchase for not less than $100,000 a number of shares of the Common Stock of
LightTouch, for the same price per share as is paid by the LightTouch
stockholders who purchase Common Stock of LightTouch on the Closing Date as
contemplated by Section 8.11 hereof (it being understood that, pursuant to the
definition of Conversion Number in Schedule 1.2(e) hereof, the number of shares
received by such stockholders, when added to the shares of LightTouch Common
Stock retained by LightTouch stockholders on the Closing Date, will not increase
the aggregate percentage of
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Common Stock of LightTouch contemplated by Schedule 1.2(e) hereof to be retained
by the stockholders of LightTouch after giving effect to the Merger hereunder).
ARTICLE 6
MUTUAL CONDITIONS PRECEDENT TO PARTIES' OBLIGATIONS
The respective obligations of each party under this Agreement shall be
subject to the fulfillment at or prior to the Effective Time of the following
condition which may not be waived.
Section 6.1. NO INJUNCTIONS OR RESTRAINTS. No temporary restraining
order, preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the Merger shall be in effect.
Section 6.2. NO VIOLATION OF LAWS, ETC. Neither the consummation nor
the performance of any of the transactions provided for herein shall contravene
or conflict with or result in a violation of, any applicable law or regulation.
Section 6.3. APPROVAL BY STOCKHOLDERS. The Vanishing Point Stockholders
shall have approved this Agreement and the Merger.
ARTICLE 7
CONDITIONS PRECEDENT TO LIGHTTOUCH'S AND
ACQUISITION CORP'S OBLIGATIONS
Notwithstanding the provisions of Article 1, LightTouch and Acquisition
Corp shall be obligated to perform the acts contemplated for performance by them
under Article 1 only if each of the following conditions is satisfied at or
prior to the Closing Date, unless any such condition is waived in writing by
LightTouch:
Section 7.1. ACCURACY OF REPRESENTATIONS AND WARRANTIES BY VANISHING
POINT. The representations and warranties of Vanishing Point set forth in
Article 2 shall be true and correct in all material respects (without giving
duplicative effect to any materiality qualification contained in the applicable
representation or warranty) as of the Closing Date with the same force and
effect as though made again at and as of the Closing Date, except for changes
permitted or required by this Agreement.
Section 7.2. COMPLIANCE BY VANISHING POINT. Vanishing Point and each of
its subsidiaries shall have performed and complied in all material respects
(without giving duplicative effect to any materiality qualification contained in
the applicable obligation) with all covenants and agreements contained in this
Agreement required to be performed or complied with by them on or before the
Closing Date.
Section 7.3. DELIVERY OF CERTIFICATE OF MERGER. Vanishing Point shall
have duly executed and delivered the Certificate of Merger.
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Section 7.4. NO MATERIAL CHANGE. Since July 1, 2000, there shall not
have been any material adverse change (other than operating losses consistent
with previous operating losses) in the condition (financial or otherwise),
operations, business, prospects or assets of Vanishing Point and its
subsidiaries taken as a whole or imposition of any laws, rules or regulations
which would materially adversely affect the condition (financial or otherwise),
operations, business, prospects or assets of Vanishing Point and its
subsidiaries taken as a whole.
Section 7.5. OFFICERS' CLOSING CERTIFICATE. Vanishing Point shall have
executed and delivered to Acquisition Corp and LightTouch at and as of the
Closing a certificate, duly executed by Vanishing Point's President or Chief
Financial Officer, in form and substance satisfactory to LightTouch, certifying
that the conditions specified in each of Section 7.1, 7.2 and 7.4 have been
satisfied.
Section 7.6. RESIGNATIONS OF DIRECTORS AND OFFICERS. Except for those
directors and officers listed on Schedule 1.2(i) as being directors and officers
of the Surviving Corporation and LightTouch after the Effective Time, all of the
directors and officers of Vanishing Point shall have resigned their positions
with Vanishing Point, on or prior to the Closing Date and prior thereto shall
have executed such appropriate documents with respect to the transfer or
establishment of bank accounts, signing authority, etc., as LightTouch shall
have reasonably requested.
Section 7.7. CONVERSION OF PREFERRED STOCK. The issued and outstanding
shares of Vanishing Point Preferred Stock shall have been converted into
Vanishing Point Common Stock pursuant to Section B3(b) of Article III of
Vanishing Point's Certificate of Incorporation.
Section 7.8. CONVERSION OF CONVERTIBLE NOTES. Each convertible note
issued by Vanishing Point other than (a) that certain Convertible Note in the
original principal amount of $100,000, dated July 28, 2000, made by Vanishing
Point, Inc. to the order of LightTouch Vein & Laser, Inc. and (b) that certain
Convertible Note in the original principal amount of $100,000, dated July 31,
2000, made by Vanishing Point, Inc. to the order of Xxxxx Ventures, LLC, shall
have been converted into Vanishing Point Common Stock (it being understood that
any such note may be amended to provide for such conversion at the rate of one
share of Vanishing Point Common Stock for each $1.00 of principal and interest
of such notes).
Section 7.9. OPINION OF VANISHING POINT'S COUNSEL. Vanishing Point
shall have delivered to LightTouch and Acquisition Corp an opinion of Xxxxxxx
Xxxx LLP, counsel to Vanishing Point, dated the Closing Date and substantially
in the form of EXHIBIT B hereto.
Section 7.10. [Reserved]
Section 7.11. CONSENTS. Vanishing Point shall have obtained the
consents of third parties listed in Section 7.11 of the Vanishing Point
Disclosure Schedule and LightTouch shall have obtained the consents of third
parties listed on Section 8.9 of the LightTouch Disclosure Schedule.
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Section 7.12. VOTING AGREEMENT. Stockholders of Vanishing Point who,
after giving effect to the Merger, own not less than 50% (on a fully diluted
basis) of the shares that have the right (or that will upon exercise of options
or warrants have the right) to vote to elect the directors of Vanishing Point
shall have entered into a Voting Agreement in the form of EXHIBIT D hereto.
Section 7.13. CAPITAL CONTRIBUTIONS. One or more Persons who are (i)
stockholders (or their Affiliates) of Vanishing Point on the date hereof, or
(ii) Persons who have been solicited to invest new capital in Vanishing Point or
LightTouch by the officers or directors or stockholders (or their Affiliates) of
Vanishing Point, and who are not stockholders (or their Affiliates) of
LightTouch on the date hereof, shall have purchased for not less than
$1,000,000, as of the Effective Time, a number of shares of the Common Stock of
Vanishing Point or LightTouch agreed upon by such stockholders and Vanishing
Point or LightTouch, as applicable (it being understood that, pursuant to the
definition of Conversion Number in Schedule 1.2(e) hereof, the number of shares
received by such stockholders for such $1,000,000 will not increase the
aggregate percentage of Common Stock of LightTouch received by the stockholders
of Vanishing Point hereunder).
Section 7.14. PROCEEDINGS AND DOCUMENTS SATISFACTORY. All proceedings
in connection with the Merger and the other transactions contemplated by this
Agreement and all certificates and documents delivered to LightTouch or
Acquisition Corp pursuant to this Article 7 shall be reasonably satisfactory to
LightTouch.
ARTICLE 8
CONDITIONS PRECEDENT TO VANISHING POINT'S OBLIGATIONS
Notwithstanding the provisions of Article 1, Vanishing Point shall be
obligated to perform the acts contemplated for performance by it under Article 1
only if each of the following conditions is satisfied at or prior to the Closing
Date, unless any such condition is waived in writing by Vanishing Point:
Section 8.1. ACCURACY OF REPRESENTATIONS AND WARRANTIES BY LIGHTTOUCH
AND ACQUISITION CORP. The representations and warranties of LightTouch and
Acquisition Corp set forth in Article 3 shall be true and correct in all
material respects (without giving duplicative effect to any materiality
qualification contained in the applicable representation or warranty) as of the
Closing Date with the same force and effect as though made again at and as of
the Closing Date, except for changes permitted or required by this Agreement.
Section 8.2. COMPLIANCE BY LIGHTTOUCH AND ACQUISITION CORP. Acquisition
Corp and LightTouch and each of its subsidiaries shall have performed and
complied in all material respects (without giving duplicative effect to any
materiality qualification contained in the applicable obligation) with all of
the covenants and agreements required to be performed or complied with by them
by the Closing Date.
Section 8.3. CERTIFICATE OF MERGER. Acquisition Corp shall have duly
executed and delivered the Certificate of Merger.
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Section 8.4. NO MATERIAL CHANGE. Since March 31, 2000, there shall not
have been any material adverse change in the condition (financial or otherwise),
operations, business, prospects or assets of LightTouch and its subsidiaries
taken as a whole or imposition of any laws, rules or regulations which would
materially adversely affect the condition (financial or otherwise), operations,
business, prospects or assets of LightTouch and its subsidiaries taken as a
whole.
Section 8.5. OFFICERS' CLOSING CERTIFICATE. LightTouch shall have
executed and delivered to Vanishing Point at and as of the Closing a
certificate, duly executed by LightTouch's President or Chief Financial Officer,
in form and substance satisfactory to Vanishing Point, certifying that the
conditions specified in each of Section 8.1, 8.2 and 8.4 have been satisfied.
Section 8.6. RESIGNATIONS OF DIRECTORS AND OFFICERS. Except for those
directors and officers listed on Schedule 1.2(i) as being directors and officers
of the Surviving Corporation and LightTouch after the Effective Time, all of the
directors and officers of LightTouch shall have resigned their positions with
LightTouch, on or prior to the Closing Date and prior thereto shall have
executed such appropriate documents with respect to the transfer or
establishment of bank accounts, signing authority, etc., as Vanishing Point
shall have reasonably requested.
Section 8.7. OPINIONS OF LIGHTTOUCH'S COUNSEL. LightTouch shall have
delivered to Vanishing Point the opinion of Xxxx, Dill, Carr, Xxxxxxxxxx &
Xxxxxxxxx, P.C. counsel for LightTouch and Acquisition Corp, dated the Closing
Date and substantially in the form of EXHIBIT C hereto.
Section 8.8. [Reserved]
Section 8.9. CONSENTS. Vanishing Point shall have obtained the consents
of third parties listed in Section 7.11 of the Vanishing Point Disclosure
Schedule and LightTouch shall have obtained the consents of third parties listed
on Section 8.9 of the LightTouch Disclosure Schedule.
Section 8.10. VOTING AGREEMENT. Stockholders of LightTouch who, after
giving effect to the Merger, own not less than 50% (on a fully diluted basis) of
the shares that have the right (or that will upon exercise of options or
warrants have the right) to vote to elect the directors of LightTouch shall have
entered into a Voting Agreement in the form of Exhibit D hereto.
Section 8.11. CAPITAL CONTRIBUTIONS. One or more Persons who are (i)
stockholders (or their Affiliates) of LightTouch on the date hereof, or (ii)
Persons who have been solicited to invest new capital in LightTouch by the
officers or directors or stockholders (or their Affiliates) of LightTouch, and
who are not stockholders (or their Affiliates) of Vanishing Point on the date
hereof, shall have purchased for not less than $150,000, as of the Effective
Time, a number of shares of the Common Stock of LightTouch agreed upon by such
stockholders and LightTouch, as applicable (it being understood that, pursuant
to the definition of Conversion Number in Schedule 1.2(e) hereof, the number of
shares received by such stockholders for such $150,000 will not increase the
aggregate percentage of Common Stock of LightTouch retained by the stockholders
of LightTouch after giving effect to the Merger hereunder).
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Section 8.12. CONTRIBUTION OF LIGHTTOUCH INTELLECTUAL PROPERTY. Each
stockholder of LightTouch and Affiliate of a stockholder of LightTouch who owns
any Intellectual Property that is used by LightTouch or any subsidiary of
LightTouch in its business shall have been contributed to LightTouch without
consideration (other than consideration in the form of Common Stock of
LightTouch that does not increase the percentage of Common Stock that is
retained by the stockholders of LightTouch after giving effect to the Merger).
Section 8.13. PROCEEDINGS AND DOCUMENTS SATISFACTORY. All proceedings
in connection with the Merger and the other transactions contemplated by this
Agreement and all certificates and documents delivered to Vanishing Point
pursuant to this Article 8 shall be reasonably satisfactory to Vanishing Point
and its counsel.
Section 8.14. RATIFICATION AGREEMENT. A letter agreement in form and
substance satisfactory to Vanishing Point, by and among LightTouch and the
Persons (the "PRINCIPAL STOCKHOLDERS") set forth in Section 8.11 of the
LightTouch Disclosure Schedule, providing, among other things for the
ratification of actions taken to date by the directors and stockholders of
LightTouch, and for certain changes to be made to the Articles of Incorporation
and By-Laws of LightTouch (the "RATIFICATION AGREEMENT"), shall have been
executed and delivered to Vanishing Point and LightTouch.
ARTICLE 9
CONFIDENTIAL INFORMATION
9.1. CONFIDENTIAL INFORMATION. Any and all "Confidential Information",
as defined in Section 6 of the letter agreement dated July 12, 2000, between
LightTouch and Vanishing Point with respect to the transactions provided from
herein (the "LETTER AGREEMENT"), including without limitation Confidential
Information provided by any party to another party pursuant to Section 4.1
hereof, shall remain subject to the terms of Section 6 of the Letter Agreement.
ARTICLE 10
SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS
10.1. NO SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
The representations and warranties made by Vanishing Point and/or
LightTouch in or pursuant to this Agreement shall not survive the Merger and
shall expire at the Effective Time.
10.2. SURVIVAL OF COVENANTS.
Any covenants and agreements of the parties which by their terms are to
be performed subsequent to the Closing shall survive the Merger.
ARTICLE 11
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TERMINATION; LIABILITIES CONSEQUENT THEREON
This Agreement may be terminated and the Merger abandoned at any time
prior to the Effective Time (whether before or after approval of the Merger by
the Vanishing Point stockholders) only as follows:
(a) by LightTouch or Acquisition Corp, upon notice to Vanishing
Point if the conditions set forth in Articles 6 and 7 shall not have been
satisfied on or prior to August 31, 2000, unless the failure to meet such
conditions arises from the intentional breach by LightTouch or Acquisition Corp
of any provisions of this Agreement for the purpose of evading or avoiding their
obligation to consummate the Merger or from a material misrepresentation or
breach of warranty by LightTouch or Acquisition Corp.; provided, however, that
this Agreement may not be terminated pursuant to this paragraph prior to the
expiration of the cure period described in Section 11(d) if the cure is being
diligently pursued; or
(b) by Vanishing Point, upon notice to LightTouch and
Acquisition Corp, if the conditions set forth in Articles 6 and 8 shall not have
been satisfied on or prior to August 31, 2000, unless the failure to meet such
conditions arises from the intentional breach by Vanishing Point of any
provisions of this Agreement for the purpose of evading or avoiding its
obligation to consummate the Merger or from a material misrepresentation or
breach of warranty by LightTouch or Acquisition Corp.; provided, however, that
this Agreement may not be terminated pursuant to this paragraph prior to the
expiration of the cure period described in Section 11(d) if the cure is being
diligently pursued; or
(c) at any time by mutual agreement of the Boards of Directors
of LightTouch, Acquisition Corp and Vanishing Point; or
(d) by LightTouch or Acquisition Corp if there has been any
material misrepresentation by Vanishing Point contained herein or material
breach of any warranty or covenant of Vanishing Point contained herein and the
same has not been cured within fifteen (15) days after notice from LightTouch to
Vanishing Point thereof; or
(e) by Vanishing Point if there has been any material
misrepresentation by LightTouch or Acquisition Corp contained herein or material
breach of any warranty or covenant of LightTouch or Acquisition Corp contained
herein and the same has not been cured within 15 days after notice from
Vanishing Point to LightTouch thereof.
Any termination pursuant to this Article 11 shall be without liability
on the part of any party, unless such termination is the result of a deliberate
breach of warranty or other breach of this Agreement by a party to this
Agreement. The Confidentiality Agreement and the provisions of Article 12 of
this Agreement shall survive any termination of this Agreement.
ARTICLE 12
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EXPENSES
Section 12.1. EXPENSES. All expenses incurred by any party hereto or by
any holder of Vanishing Point Common Stock or Vanishing Point Preferred Stock,
in their capacity as such shall be borne by the party or stockholder incurring
the same. LightTouch acknowledges that Vanishing Point will bear and pay such
investment banking fees, legal and other fees and expenses as Vanishing Point
may incur in connection with the Merger.
ARTICLE 13
MISCELLANEOUS PROVISIONS
Section 13.1. AMENDMENTS. This Agreement may be amended in any manner
and at any time prior to the submission of this Agreement to the Vanishing Point
Stockholders, and, after such submission, may be amended to extend the Closing
Date and the termination date referred to in Article 11 or to make other
amendments which, in the opinion of the respective counsel for LightTouch,
Acquisition Corp and Vanishing Point, do not require an additional vote of the
Vanishing Point Stockholders pursuant to Section 251 of the DGCL or
substantially alter the terms hereof, by written instrument stating that it is
an amendment of this Agreement executed by LightTouch, Acquisition Corp and
Vanishing Point and approved by the Boards of Directors of LightTouch,
Acquisition Corp and Vanishing Point.
Section 13.2. NOTICES. Any notice expressly provided for under this
Agreement shall be in writing, shall be given either manually or by written
telecommunication, mail or recognized overnight delivery service, and shall be
deemed sufficiently given (a) one business day after notice is delivered to a
recognized delivery service, addressed to such party at such address, (b) on the
day that notice is given by confirmed written telecommunication (or, if the
telecommunication is given on a day that is not a business day or after 3:00
p.m. on a business day, on the next business day), and (c) four business days
after notice is mailed by registered mail, postage prepaid, addressed to such
party at such address. Any party may, by notice to the others, change its
address for receiving such notices.
Address for notices to LightTouch and Acquisition Corp:
LightTouch Vein & Laser, Inc.
00 Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, CEO
Facsimile: (000) 000-0000
Address for notices to Vanishing Point:
Vanishing Point, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxx 000
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Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx, President
Facsimile: 000-000-0000
Section 13.3. ASSIGNMENT AND BENEFITS OF AGREEMENT. This Agreement
shall be binding upon and shall inure to the benefit of the parties and their
respective successors, but may not be assigned by any of the foregoing without
the written consent of the others. Except as aforesaid or as specifically
provided for elsewhere in this Agreement, nothing in this Agreement, express or
implied, is intended to confer upon any person other than the parties hereto and
their said successors and assigns, any rights under or by reason of this
Agreement.
Section 13.4. ENTIRE AGREEMENT. This Agreement, including all Exhibits
and Schedules hereto, contains the entire understanding of the parties,
supersedes all prior agreements and understandings relating to the subject
matter hereof and can not be amended except by a written instrument hereafter
signed by all of the parties hereto. TIME IS OF THE ESSENCE as to all provisions
of this Agreement.
Section 13.5. GOVERNING LAW. This Agreement shall be governed by and
interpreted in accordance with the internal laws (not including the
choice-of-law rules) of the State of New York, except to the extent that the
Delaware General Corporation Law applies.
Section 13.6. COUNTERPARTS. This Agreement may be executed by the
parties in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute but
one and the same instrument. A facsimile of an executed counterpart shall have
the same effect as the original executed counterpart.
Section 13.7. SECTION HEADINGS. All enumerated subdivisions of this
Agreement are herein referred to as "section" or "subsection." The headings of
sections or subsections are for reference only and shall not limit or control
the meaning thereof.
Section 13.8. SEVERABILITY. In the event that any covenant, condition,
or other provision herein contained is held to be invalid, void, or illegal by
any court of competent jurisdiction, the same shall be deemed to be severable
from the remainder of this Agreement and shall in no way affect, impair, or
invalidate any other covenant, condition, or other provision contained herein.
Section 13.9. FURTHER ASSURANCES. The parties agree to take such
reasonable steps and execute such other and further documents as may be
necessary or appropriate to cause the terms and conditions contained herein to
be carried into effect.
Section 13.10. PUBLIC STATEMENTS OR RELEASES. The parties hereto each
agree that, except to the extent required by law, no party to this Agreement
shall make, issue or release any announcement, statement or acknowledgment of
the existence of, or reveal the status of, the transactions provided for herein,
whether to the public generally, or to employees, suppliers or customers,
without first obtaining the consent
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of the other parties hereto. Nothing in the preceding sentence shall be
construed to relieve Vanishing Point from its obligations under Section 5.2
hereof.
Section 13.11. CONSTRUCTION. The language used in this Agreement will
be deemed to be the language chosen by the parties to express their mutual
intent, and no rule of strict construction will be applied against any party.
Section 13.12. WAIVER OF JURY TRIAL. EACH PARTY HERETO WAIVES ITS
RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY
DISPUTE IN CONNECTION WITH THIS AGREEMENT, ANY AGREEMENT, CONTRACT OR OTHER
DOCUMENT OR INSTRUMENT EXECUTED IN CONNECTION HEREWITH, OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY.
[Signatures Follow on Next Page]
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date and year first above written.
LIGHTTOUCH VEIN & LASER, INC.
By /S/ XXXXXXX X. XXXXXXX
--------------------------------------
Name:
Title:
LIGHTTOUCH ACQUISITION CORP.
By /S/ XXXXXXX X. XXXXXXX
--------------------------------------
Name:
Title:
VANISHING POINT, INC.
By /S/ XXXXXXX XXXXXX
--------------------------------------
Name: Xxxxxxx Xxxxxx
Title: President CEO
