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EXHIBIT 2.1
Agreement and Plan of Reorganization
AMONG
Immune Response, Inc.
(a Colorado corporation)
-----------------------------------
Opticon Medical, Inc.
(an Iowa corporation)
-----------------------------------
AND
Opticon Acquisition Corporation
(a Delaware corporation)
DECEMBER 9, 1999
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TABLE OF CONTENTS
ARTICLE 1 Basic Plan of Reorganization.........................................................................1
1.1 Merger..........................................................................................1
1.2 Continuing Corporate Existence..................................................................1
1.3 Effective Date..................................................................................1
1.4 Corporate Government of the Surviving Corporation...............................................2
1.5 Closing.........................................................................................2
1.6 Tax Consequences................................................................................2
ARTICLE 2 Conversion of Shares.................................................................................3
2.1 Conversion of Shares............................................................................3
2.2 Fractional Shares...............................................................................3
2.3 Options, Warrants and Convertible Securities....................................................3
2.4 Exchange of Opticon Stock.......................................................................4
2.5 Adjustment......................................................................................6
2.6 Status of Parent Securities.....................................................................6
ARTICLE 3 Representations and Warranties of Opticon............................................................6
3.1 Organization and Good Standing of Opticon.......................................................6
3.2 Foreign Qualification...........................................................................6
3.3 Company Power and Authority.....................................................................6
3.4 No Subsidiaries.................................................................................7
3.5 Authorization...................................................................................7
3.6 Absence of Restrictions and Conflicts...........................................................7
3.7 Capitalization of Opticon.......................................................................7
3.8 Opticon Information.............................................................................8
3.9 Financial Statements and Records of Opticon.....................................................8
3.10 Reports.........................................................................................9
3.11 Absence of Certain Changes......................................................................9
3.12 No Material Undisclosed Liabilities............................................................10
3.13 Tax Returns; Taxes.............................................................................11
3.14 Material Contracts.............................................................................11
3.15 Litigation and Government Claims...............................................................11
3.16 Compliance With Laws...........................................................................12
3.17 Licenses and Permits...........................................................................12
3.18 Employee Benefit Plans.........................................................................12
3.19 Employment Agreements; Labor Relations.........................................................12
3.20 Intellectual Property..........................................................................13
3.21 Software.......................................................................................15
3.22 Properties and Related Matters.................................................................15
3.23 Insurance......................................................................................15
3.24 Material Interests of Certain Persons..........................................................15
3.25 Registration Obligations.......................................................................16
3.26 Environmental Matters..........................................................................16
3.27 Referral Sources; Investors....................................................................17
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3.28 Compliance with Year 2000 Requirements.........................................................17
3.29 Brokers and Finders............................................................................18
3.30 Opticon's Representations and Warranties Modified by Knowledge of Parent.......................18
ARTICLE 4 Representations and Warranties of Parent and
the Merger Subsidiary..........................................................................18
4.1 Organization and Good Standing.................................................................18
4.2 Foreign Qualification..........................................................................18
4.3 Corporate Power and Authority..................................................................19
4.4 Authorization..................................................................................19
4.5 Absence of Restrictions and Conflicts..........................................................19
4.6 Capitalization of Parent.......................................................................19
4.7 Capitalization of Merger Subsidiary............................................................20
4.8 Parent SEC Reports.............................................................................20
4.9 Financial Statements and Records of Parent.....................................................21
4.10 Absence of Certain Changes.....................................................................21
4.11 No Material Undisclosed Liabilities............................................................23
4.12 Tax Returns; Taxes.............................................................................23
4.13 Material Contracts.............................................................................23
4.14 Litigation and Government Claims...............................................................24
4.15 Compliance with Laws...........................................................................24
4.16 Employment Agreements; Labor Relations.........................................................24
4.17 Parent Employee Benefit Plans..................................................................25
4.18 Intellectual Property..........................................................................25
4.19 Properties and Related Matters.................................................................25
4.20 Brokers and Finders............................................................................25
4.21 Year 2000 Compliance...........................................................................25
4.22 Interim Operations of Merger Subsidiary........................................................26
4.23 Parent and Merger Subsidiary's Representations and Warranties Modified By Knowledge of Opticon.26
ARTICLE 5 Certain Covenants and Agreements...............................................................26
5.1 Conduct of Business by Opticon.................................................................26
5.2 Conduct of Business by Parent..................................................................28
5.3 Inspection and Access to Information...........................................................30
5.4 Parent Exchange Act Reports....................................................................30
5.5 Reasonable Efforts; Further Assurances; Cooperation............................................31
5.6 Public Announcements...........................................................................31
5.7 No Solicitations...............................................................................32
ARTICLE 6 Conditions Precedent to Obligations of Opticon.................................................32
6.1 Compliance.....................................................................................32
6.2 Representations and Warranties.................................................................32
6.3 Material Adverse Changes.......................................................................32
6.4 Certificates...................................................................................32
6.5 Consents; Litigation...........................................................................33
6.6 Due Diligence..................................................................................33
6.7 Accounting Treatment...........................................................................33
6.8 Tax-free Reorganization........................................................................33
6.9 Financing......................................................................................33
6.10 Stockholder Approval; Dissenting Shares........................................................33
6.11 Legal Opinion..................................................................................33
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ARTICLE 7 Conditions Precedent to Obligations of Parent
and the Merger Subsidiary......................................................................34
7.1 Compliance.....................................................................................34
7.2 Representations and Warranties.................................................................34
7.3 Material Adverse Change........................................................................34
7.4 Certificates...................................................................................34
7.5 Consents; Litigation...........................................................................34
7.6 Due Diligence..................................................................................35
7.7 Accounting Treatment...........................................................................35
7.8 Tax-free Reorganization........................................................................35
7.9 Stockholder Approval; Dissenting Shares........................................................35
7.10 Legal Opinion..................................................................................35
ARTICLE 8 Miscellaneous..................................................................................36
8.1 Termination....................................................................................36
8.2 Expenses.......................................................................................36
8.3 Entire Agreement...............................................................................36
8.4 Survival of Representations and Warranties.....................................................36
8.5 Counterparts...................................................................................36
8.6 Notices........................................................................................37
8.7 Successors; Assignments........................................................................38
8.8 Governing Law..................................................................................38
8.9 Waiver and Other Action........................................................................38
8.10 Severability...................................................................................38
8.11 Mutual Contribution............................................................................38
List of Schedules ...............................................................................................40
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AGREEMENT
AND
PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (the "Agreement") is made as
of the 9th day of December, 1999, among Immune Response, Inc., a Colorado
corporation ("Parent"); Opticon Medical, Inc., an Iowa corporation ("Opticon");
and Opticon Acquisition Corporation, a Delaware corporation (the "Merger
Subsidiary"), which is wholly owned by Parent.
W I T N E S S E T H:
WHEREAS, the respective Boards of Directors of Parent and Opticon each
have determined that it is in the best interests of their respective
stockholders to effect a reorganization whereby Opticon will be merged by
statutory merger with and into the Merger Subsidiary upon the terms and
conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and certain other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereto covenant and
agree as follows:
ARTICLE 1
BASIC PLAN OF REORGANIZATION
1.1 MERGER. In accordance with the provisions of the business
corporation laws of the States of Colorado and Iowa and Delaware at the
Effective Date (as hereinafter defined), Opticon shall be merged with and into
the Merger Subsidiary (the "Merger"), within ten business days following the
satisfaction or waiver, if permissible, of the conditions set forth in Articles
6 and 7 of this Agreement or on such other date as may be agreed to by the
parties (the "Closing Date"). Following the Merger, the Merger Subsidiary shall
continue as the surviving corporation (the "Surviving Corporation") and shall
continue to be governed by the laws of the State of Delaware.
1.2 CONTINUING CORPORATE EXISTENCE. Except as may otherwise be set
forth herein, the corporate existence and identity of Opticon, with all its
purposes, powers, franchises, privileges, rights and immunities, shall merge
with and into the Merger Subsidiary, and the corporate existence and identity of
Merger Subsidiary, with all its purposes, powers, franchises, privileges, rights
and immunities, at the Effective Date shall continue unaffected by the merger,
and the Surviving Corporation shall be vested fully therewith and the separate
corporate existence and identity of Opticon shall thereafter cease except to the
extent continued by statute.
1.3 EFFECTIVE DATE. The Merger shall become effective upon the filing
of the Certificate of Merger with the Secretaries of State of the States of Iowa
and Delaware pursuant to the provisions of the Iowa Business Corporation Act and
the General Corporation Law of Delaware. The date and time when the Merger shall
become effective is hereinafter referred to as the "Effective Date."
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1.4 CORPORATE GOVERNMENT OF THE SURVIVING CORPORATION.
(a) The Certificate of Incorporation of the Merger Subsidiary, as in
effect on the Effective Date, shall continue in full force and effect and shall
be the Certificate of Incorporation of the Surviving Corporation, except that
Article First of the Certificate of Incorporation shall be amended to read:
"FIRST: The name of the Corporation is Opticon Medical, Inc."
(b) The Bylaws of the Merger Subsidiary, as in effect as of the
Effective Date, shall continue in full force and effect and shall be the Bylaws
of the Surviving Corporation.
(c) The members of the Board of Directors of the Surviving Corporation
shall be the persons holding such office in Opticon as of the Effective Date.
(d) The officers of the Surviving Corporation shall be the persons
holding such offices in Opticon as of the Effective Date.
1.5 CLOSING. Consummation of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Friedlob Xxxxxxxxx
Xxxxxx Xxxxxxx & Xxxxxxxxxxx, LLC in Denver, Colorado, commencing at 10:00 a.m.,
Mountain Time, as soon as practicable after the last to be fulfilled or waived
of the conditions set forth in Articles 6 and 7 or at such other place, time and
date as shall be fixed by mutual agreement between Parent and Opticon; provided,
however, the Closing shall occur on or before December 31, 1999, subject to an
automatic 30 day extension if necessary to accommodate a special meeting of the
shareholders of Parent to approve certain corporate actions necessary to
complete the transactions contemplated by this Agreement, unless the date is
extended by mutual agreement of Parent and Opticon. The day on which the Closing
shall occur is referred to herein as the "Closing Date." Each party will cause
to be prepared, executed and delivered the Certificate of Merger to be filed
with the Secretary of State of Iowa and the Secretary of State of Delaware, and
all other appropriate and customary documents as any party or its counsel may
reasonably request for the purpose of consummating the transactions contemplated
by this Agreement. All actions taken at the Closing shall be deemed to have been
taken simultaneously at the time the last of any such actions is taken or
completed. Immediately prior to the Closing, all of the members of the Board of
Directors of Parent, except for one director, shall submit their resignations
from the Board of Directors, which shall be effective upon consummation of the
Closing, and the remaining director shall at the Closing, acting as the Board of
Directors of Parent, adopt a resolution accepting such resignations and
appointing such persons as are designated by Opticon to fill the vacancies
thereby created. The remaining incumbent director shall thereupon submit his
resignation from the Board of Directors of the Parent, to take effect at the
Effective Date.
1.6 TAX CONSEQUENCES. It is intended that the Merger shall constitute a
reorganization within the meaning of Sections 368(a)(1)(A) and 368(a)(2)(E) of
the Internal Revenue Code of 1986, as amended (the "Code"), and that this
Agreement shall constitute a "plan of reorganization" for the purposes of
Section 368 of the Code.
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ARTICLE 2
CONVERSION OF SHARES
2.1 CONVERSION OF SHARES. At the Effective Date, by virtue of the
Merger and without any action on the part of the holder thereof: each and every
outstanding share of Opticon no par value common stock, and each and every
outstanding share of Opticon Series A preferred stock, no par value, and Series
B preferred stock, no par value (collectively, the "Opticon Stock") outstanding,
on a fully diluted basis, taking into account the conversion potential of any
preferred stock, immediately prior to the Effective Date will be converted into
and represent the right to receive that number of shares of Parent Common Stock,
par value $.0001 ( the "Parent Common Stock") so that, in the aggregate, the
holders of Opticon Stock will, on the Effective Date, hold 80% of the
outstanding Parent Common Stock on a fully diluted basis, and the current
shareholders of Parent will hold, in the aggregate, 20% of the outstanding
Parent Common Stock on a fully diluted basis. The shares of Parent Common Stock
issued pursuant to this Section 2.1(a) shall be referred to as the "Merger
Consideration" and each share of Opticon Stock converted pursuant to this
Section 2.1(a) shall be referred to as a "Converted Share."
2.2 FRACTIONAL SHARES. No scrip or fractional shares of Parent Common
Stock shall be issued in the Merger. All fractional shares of Parent Common
Stock to which a holder of Opticon Stock immediately prior to the Effective Date
would otherwise be entitled at the Effective Date shall be aggregated. If a
fractional share results from such aggregation the share shall be rounded to the
nearest whole share.
2.3 OPTIONS, WARRANTS AND CONVERTIBLE SECURITIES. Except as set forth
on Schedule 2.3, there are no options, warrants, preferred stock or convertible
securities outstanding entitling the holder thereof to purchase shares of
Opticon's no par value Common Stock ("Opticon Common Stock"). On the Effective
Date, the right of any holder of an outstanding option or warrant listed on
Schedule 2.3 to purchase and receive shares of Opticon Common Stock on the
exercise of such option or warrant shall be converted into the right to receive
the number of shares of Parent Common Stock as would have been issued or
delivered to the holder if it had exercised the warrant or option and received
shares of Opticon Common Stock upon such exercise immediately prior to the
effectiveness of the Merger.
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2.4 EXCHANGE OF OPTICON STOCK.
(a) Subject to the terms and conditions of this Agreement and
an Exchange Agent Agreement in the form attached hereto as Exhibit B,
prior to the Closing Date, the parties will appoint Corporate Stock
Transfer as exchange agent (the "Exchange Agent"), and shall
irrevocably authorize the Exchange Agent, in accordance with the terms
of this Agreement and the Exchange Agent Agreement, to effect the
exchange of the Merger Consideration for certificates representing the
Opticon Stock. At the Closing, Parent shall deposit with the Exchange
Agent, in trust for the benefit of the holders of Opticon Stock or
exchange in accordance with this Article 2, certificates representing
the aggregate number of shares of Parent Common Stock issuable pursuant
to Section 2.1(a) in exchange for issued and outstanding shares of
Opticon Stock.
(b) Promptly after the Effective Date, the Exchange Agent
shall mail to each holder of record of a certificate or certificates
which immediately prior to the Effective Date represented shares of
Opticon Stock (the "Certificates") a letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title to
the Certificates shall pass, only upon delivery of the Certificates to
the Exchange Agent and shall be in such form and have such other
provisions as Parent may reasonably specify) and instructions for use
in effecting the surrender of the Certificates in exchange for
certificates representing shares of Parent Common Stock. Upon surrender
of a Certificate to the Exchange Agent, together with such letter of
transmittal, duly executed, the holder of such Certificate shall be
entitled to receive in exchange therefor the certificates representing
the whole number of shares of Parent Common Stock which such holder has
the right to receive pursuant to the provisions of this Agreement, and
the Certificate so surrendered shall forthwith be canceled.
Parent shall pay any transfer or other taxes required by
reason of the issuance of a certificate representing shares of Parent
Common Stock, provided that such certificate is issued in the name of
the person in whose name the Certificate surrendered in exchange
therefor is registered. If any portion of the consideration to be
received pursuant to this Article 2 upon exchange of a Certificate is
to be issued or paid to a person other than the person in whose name
the Certificate surrendered in exchange therefor is registered, it
shall be a condition of such issuance and payment that the Certificate
so surrendered shall be properly endorsed or otherwise in proper form
for transfer and that the person requesting such exchange shall pay in
advance any transfer or other taxes or transfer fee required by reason
of the issuance of a certificate representing shares of Parent Common
Stock to such other person, or establish to the satisfaction of the
Exchange Agent that such tax has been paid or that no such tax is
applicable.
Until surrendered as contemplated by this Section, each
Certificate shall be deemed at any time after the Effective Date to
represent only the right to receive the consideration specified herein;
provided that if any holder of a Certificate exercises his Dissenter's
Rights (as such term is defined in Section 2.4(f) below) and becomes
entitled to receive payment for his shares of Opticon Stock instead of
the shares of into which such shares of Opticon Stock shall have been
converted, Parent shall pay such holder the
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amount to which he is entitled for such shares of Opticon Stock,
together with any other sums which it may owe him as a result of the
Dissenter's Rights proceeding, upon his surrender to the Exchange Agent
of the certificate or certificates which immediately prior to the
Effective Date represented the shares of Opticon Stock as to which his
Dissenter's Rights were asserted, and the Exchange Agent shall not
thereafter be required to deliver to such holder any shares of Parent
Common Stock.
(c) Any certificates for shares of Parent Common Stock which
remain unclaimed by the holders of Certificates for twelve months after
the Effective Date shall be returned by the Exchange Agent to Parent,
and any holders of Certificates who have not theretofore complied with
Section 2.4 (b) shall thereafter receive delivery (subject to abandoned
property, escheat or other similar laws) of the shares of Parent Common
Stock issuable upon the conversion of their Certificates and any
dividends payable on such shares of Parent Common Stock, without any
interest thereon, only after delivering their Certificates and letters
of transmittal to the Parent, and otherwise complying with Section
2.4(b).
(d) In the case of any lost, mislaid, stolen or destroyed
Certificates, the holder thereof may be required, as a condition
precedent to the delivery to such holder of the consideration described
in this Article 2, to deliver to the Exchange Agent a bond, in such
reasonable sum as Parent may direct, or other form of indemnity
satisfactory to Parent, as indemnity against any claim that may be made
against the Exchange Agent, Parent or Opticon with respect to the
Certificate alleged to have been lost, mislaid, stolen or destroyed.
(e) After the Effective Date, there shall be no transfers on
the stock transfer books of Opticon of the shares of Opticon Common
Stock or Opticon Preferred Stock that were outstanding immediately
prior to the Effective Date. If, after the Effective Date, Certificates
are presented to Opticon for transfer, they shall be canceled and
exchanged as provided in this Article 2.
(f) If any holder of shares of Opticon Stock shall be entitled
to exercise dissenter's rights under Section 490.1302 of the Iowa Code
("Dissenter's Rights"), and if such holder exercises that right when
and in the manner required by Sections 490.1320 through 490.1328 of the
Iowa Code, Opticon shall give Parent notice thereof and the Parent
shall have the right to participate in all negotiations and proceedings
with respect to any such Dissenter's Rights. Opticon shall not, except
with the prior written consent of Parent, voluntarily make any payment
with respect to, or settle or offer to settle, any such Dissenter's
Rights.
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2.5 ADJUSTMENT. If, between the date of this Agreement and the Closing
Date or the Effective Date, as the case may be, the outstanding shares of
Opticon Stock or Parent Common Stock shall have been changed into a different
number of shares or a different class by reason of any classification,
recapitalization, split-up, combination, exchange of shares, or readjustment or
a stock dividend thereon shall be declared with a record date within such
period, then the consideration to be received pursuant to Section 2.1 hereof by
the holders of shares of Opticon Stock shall be adjusted to accurately reflect
such change.
2.6 STATUS OF PARENT SECURITIES. The shares of Parent Common Stock
being issued in the Merger are and will be "restricted securities" as defined in
Rule 144 (the "Rule") under the Securities Act of 1933, as amended (the
"Securities Act") and (unless registered for resale or some other exemption from
registration is available) the shares of Parent Common Stock must be held for a
minimum of one year following the Merger, and thereafter may be sold in only
limited amounts in a specified manner in accordance with the terms and
conditions of the Rule, if the Rule is applicable (there being no representation
by Parent that it will be applicable). If the Rule is not applicable, any sales
may be made only pursuant to an effective registration statement or an available
exemption from registration. Parent will cause its stock transfer agent to
reflect such restrictions in Parent's stock transfer books and to place an
appropriate restrictive legend or legend on any certificates evidencing the
Parent Common Stock and any certificates issued in replacement or exchange
therefor.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF OPTICON
Opticon represents and warrants to Parent that the statements contained
in Article 3 are true and correct in all material respects, except as set forth
in the schedules attached hereto. As used in this Article 3 and elsewhere in
this Agreement, the phrases "to Opticon' knowledge" or "to Opticon' actual
knowledge" shall mean to the knowledge of the officer of Opticon who has the
principal responsibility for the matter being stated.
3.1 ORGANIZATION AND GOOD STANDING OF OPTICON. Opticon is a corporation
duly organized, validly existing and in good standing under the laws of Iowa.
3.2 FOREIGN QUALIFICATION. Opticon is duly qualified or licensed to do
business and is in good standing as a foreign corporation in every jurisdiction
where the failure so to qualify would have a material adverse effect on (a) the
business, operation, assets or financial condition of Opticon or (b) the
validity or enforceability of, or the ability of Opticon to perform its
obligations under, this Agreement.
3.3 COMPANY POWER AND AUTHORITY. Opticon has the corporate or company
power and authority to own, lease and operate its properties and assets and to
carry on its business as currently being conducted. Opticon has furnished Parent
with true and correct copies of its Certificate of Incorporation and by-laws, as
amended.
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3.4 NO SUBSIDIARIES. Opticon does not own beneficially, directly or
indirectly, more than 5% of any class of equity securities or similar interests
of any corporation, bank, business trust, association, limited liability company
or similar organization, and is not, directly or indirectly, a partner in any
partnership, or joint venture.
3.5 AUTHORIZATION. Opticon has the corporate power and authority to
execute and deliver this Agreement and, subject to the approval of this
Agreement and the Merger by its stockholders, to perform its obligations under
this Agreement and to consummate the Merger. The execution, delivery and
performance by Opticon of this Agreement has been duly authorized by all
necessary corporate action. Subject to such approval of stockholders and of
government agencies and other government boards having regulatory authority over
Opticon as may be required by statute or regulation, this Agreement is the
legal, valid and binding obligation of Opticon enforceable in accordance with
its terms, subject to limitations which may be placed on enforceability by
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and
other laws of general applicability relating to or affecting creditors' rights
and by general principles of equity (the "Enforceability Exceptions").
3.6 ABSENCE OF RESTRICTIONS AND CONFLICTS. The execution, delivery and
performance of this Agreement and the consummation of the Merger and the
fulfillment of and compliance with the terms and conditions of this Agreement do
not and will not, with the passing of time or the giving of notice or both,
violate or conflict with, constitute a breach of or default under, result in the
loss of any material benefit under, or permit the acceleration of any obligation
under, (i) any term or provision of the Certificate of Incorporation or Bylaws
of Opticon, (ii) any "Material Contract" (as defined in Section 3.13), (iii) any
judgment, decree or order of any court or governmental authority or agency to
which Opticon is a party or by which Opticon or any of its properties is bound,
or (iv) any statute, law, regulation or rule applicable to Opticon. Except for
the filing of the Certificate of Merger with the Secretary of State of the State
of Delaware and the Secretary of State of the State of Iowa, compliance with the
applicable requirements of the Iowa Business Corporation Act, Securities Act,
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and applicable
state securities and banking laws, no consent, approval, order or authorization
of, or registration, declaration or filing with, any governmental agency or
public or regulatory unit, agency, body or authority, with respect to Opticon,
is required in connection with the execution, delivery or performance of this
Agreement by Opticon or the consummation of the transactions contemplated
hereby.
3.7 CAPITALIZATION OF OPTICON.
(a) The authorized capital stock of Opticon consists of (i)
20,000,000 shares of common stock, no par value ("Opticon Common
Stock"); (ii) 20,000,000 shares of preferred stock, no par value, of
which 1,200,000 shares have been designated as Series A Preferred
Stock, and 4,000,000 shares have been designated as Series B Preferred
Stock ("Opticon Preferred Stock.") As of the date hereof, there were
(i) 2,487,495 shares of Opticon Common Stock issued and outstanding and
4,010,928 shares of Opticon Common Stock reserved for issuance upon the
exercise of options, warrants or convertible securities (including
shares issuable upon conversion of the Opticon Preferred Stock); and
(ii) 1,995,411 shares of Opticon Preferred Stock outstanding.
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(b) All of the issued and outstanding shares of Opticon Common
Stock and Opticon Preferred Stock have been duly authorized and validly
issued and are fully paid, nonassessable and free of preemptive rights.
(c) To Opticon's knowledge there are no voting trusts,
stockholder agreements or other voting arrangements between or among
the stockholders of Opticon.
(d) Except as set forth on Schedule 2.3 and pursuant to the
terms of the Opticon Preferred Stock, no equity security of Opticon is
or may be required to be issued by reason of any option, warrant,
scrip, preemptive right, right to subscribe to, call or commitment of
any character whatsoever relating to, or security or right convertible
into, any shares of capital stock of Opticon, and there are no
contracts, commitments, understandings or arrangements by which Opticon
is bound to issue additional shares of its capital stock, or any option
warrant or right to purchase or acquire any additional shares of its
capital stock.
(e) Since December 31, 1998, no shares of capital stock have
been purchased, redeemed or otherwise acquired, directly or indirectly,
by Opticon and no dividends or other distributions have been declared,
set aside, made or paid to the stockholders of Opticon.
3.8 OPTICON INFORMATION. Opticon has made or will make available to
Parent and the Merger Subsidiary all information that Opticon has available
(including all tax returns, financial statements given to any other person,
contracts, payroll schedules, financial books and records), and all other
information concerning Opticon, its business, its customers, its management, and
its financial condition which Parent may have requested (all such information
being referred to herein as the "Opticon Information"). As of their respective
dates, the Opticon Information did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
3.9 FINANCIAL STATEMENTS AND RECORDS OF OPTICON. Opticon has made
available and will provide to Parent and the Merger Subsidiary true, correct and
complete copies of the following financial statements (the "Opticon Financial
Statements") (i) audited balance sheets of Opticon as of December 31, 1998 and
1997 and related audited statements of income, stockholder's equity and cash
flows for the two years ended December 31, 1998, together with the notes thereto
(the "Opticon Year-End Statements"); (ii) unaudited balance sheets of Opticon
and related statements of income, equity and cash flows as of and for the
quarter ended March 31, 1999 and as soon as they are available, the quarter
ending September 30, 1999, and for each quarter ended prior to Closing (the
"Opticon Quarterly Statements"):
The Opticon Year-End Statements and Opticon Quarterly Statements have
been and will be prepared from, and are in accordance with, the books
and records of Opticon and present or will present fairly, in all
material respects, the financial position of Opticon as of the dates
thereof and the results of operations and cash flows thereof for the
periods
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then ended, in each case in conformity generally accepted accounting
principles, consistently applied, except as noted therein and, except
in the case of the Opticon Quarterly Statements, for the absence of
notes, and subject to normal year-end adjustments. Since January 1,
1999, there has been no change in accounting principles applied to, or
methods of accounting utilized by, Opticon, except as noted in the
Opticon Financial Statements. The books and records of Opticon are
complete and correct in all material respects and present fairly in all
material respects the basis for the financial position and results of
operations of Opticon as set forth on the Opticon Year-End Statements
and Opticon Quarterly Statements.
3.10 REPORTS. Since December 31, 1994, Opticon has filed all
registrations and statements, together with any required amendments thereto,
that it was required to file with the Food and Drug Administration ("FDA"). All
such registrations and statements filed with the FDA and any similar regulatory
body or authority are collectively referred to herein as the "Opticon Reports."
As of their respective dates, the Opticon Reports complied in all material
respects with the rules and regulations promulgated by the FDA and applicable
state authorities, as the case may be, and did not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. True, correct and
complete copies of all the Opticon Reports have been made available to Parent by
Opticon.
3.11 ABSENCE OF CERTAIN CHANGES. Since January 1, 1999, Opticon has
not, except as otherwise set forth in the Opticon Information, the Opticon
Financial Statements, or Schedule 3.11:
(a) suffered any adverse change in its business, operation,
assets, or financial condition, except for such changes that would not
result in a material adverse effect on the business, operation, assets,
or financial condition;
(b) suffered any material damage, destruction, loss or
forfeiture of its assets, whether or not covered by insurance, which
property or assets are material to its operations or business;
(c) settled, forgiven, compromised, canceled, released, waived
or permitted to lapse any material rights or claims other than in the
ordinary course of business;
(d) entered into or terminated any Material Contract or agreed
or made any changes in any Material Contract, other than renewals or
extensions thereof and leases, agreements, transactions and commitments
entered into or terminated in the ordinary course of business;
(e) entered into any transaction, other than at arms-length in
the ordinary course of business, between Opticon and any , director,
officer, or any affiliate of any such officer, director or ;
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(f) made any material change in the accounting policy,
procedure or practice employed with respect to Opticon;
(g) sold any of the assets of Opticon (tangible or
intangible);
(h) paid or incurred any capital expenditures, other than
capital expenditures incurred in the ordinary course of business which
does not exceed $10,000 (any single item or group of related items);
(i) written up, written down or written off the book value of
any material amount of assets other than in the ordinary course of
business;
(j) declared, paid or set aside for payment any dividend or
distribution with respect to its capital stock;
(k) redeemed, purchased or otherwise acquired, or sold,
granted or otherwise disposed of, directly or indirectly, any of its
capital stock or securities or any rights to acquire such capital stock
or securities, or agreed to changes in the terms and conditions of any
such rights outstanding as of the date of this Agreement;
(l) increased the compensation of or paid any bonuses to any
employees or contributed to any employee benefit plan, other than in
accordance with established policies, practices or requirements and as
provided in Section 6.1 hereof;
(m) entered into any employment, consulting or compensation
agreement with any person or group;
(n) entered into any collective bargaining agreement with any
person or group;
(o) entered into, adopted or amended any employee benefit
plan; or
(p) entered into any agreement to do any of the foregoing.
3.12 NO MATERIAL UNDISCLOSED LIABILITIES. There are no liabilities or
obligations of Opticon of any nature, whether absolute, accrued, contingent, or
otherwise, other than:
(a) the liabilities and obligations that are reflected,
accrued or reserved against on the Opticon Financial Statements, or
referred to in the footnotes thereto, or incurred in the ordinary
course of business and consistent with past practices since December
31, 1998; or
(b) liabilities and obligations which in the aggregate would
not have a material adverse effect on the business, operation, assets
or financial condition of Opticon (a "Opticon Material Adverse
Effect").
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3.13 TAX RETURNS; TAXES. Opticon has filed all federal, state, county,
local, and foreign tax returns, including information returns, required to be
filed by it, and paid all taxes owed by it, including those with respect to
income, withholding, social security, unemployment, workers' compensation,
franchise, ad valorem, premium, excise and sales taxes, and no taxes shown on
such returns to be owed by it or assessments received by it are delinquent.
Federal income tax returns of Opticon for the fiscal year ended December 31,
1995, and for all fiscal years prior thereto, are for the purposes of routine
audit by the Internal Revenue Service closed because of the statute of
limitations, and no claims for additional taxes for such fiscal years are
pending. No tax return of Opticon is being audited. Opticon is not a party to
any pending action or proceeding, nor, to Opticon's knowledge, is any such
action or proceeding threatened by any governmental authority, for the
assessment or collection of taxes, interest, penalties, assessments or
deficiencies and no issue has been raised by any federal, state, local or
foreign taxing authority in connection with any audit or examination of the tax
returns, business or properties of Opticon which has not been settled, resolved
and fully satisfied. Except for amounts not yet due and payable, Opticon has
paid all taxes owed or which it is required to withhold from amounts owing to
employees, creditors or other third parties. The balance sheet as of December
31, 1998, referred to in Section 3.9, includes adequate provision for all
accrued but unpaid federal, state, county, local and foreign taxes, interests,
penalties, assessments or deficiencies of Opticon with respect to all periods
through the date thereof.
3.14 MATERIAL CONTRACTS. Opticon has furnished or made available to
Parent accurate and complete copies of the Material Contracts (as defined
herein) applicable to Opticon. Except as set forth on Schedule 3.14, there is
not under any of the Material Contracts any existing breach, default or event of
default by Opticon nor any event that with notice or lapse of time or both would
constitute a, breach, default or event of default by Opticon other than
breaches, defaults or events of default which would not have an Opticon Material
Adverse Effect nor does Opticon know of, and Opticon has not received notice of,
or made a claim with respect to, any breach or default by any other party
thereto which would, severally or in the aggregate, have an Opticon Material
Adverse Effect. As used herein, the term "Material Contracts" shall mean (i) all
strategic alliance contracts and agreements; (ii) all agreements to pay
percentages or profits, revenue or volume of loans originated, brokered or
assigned; and (iii) all other contracts and agreements providing for
expenditures or commitments by Opticon in excess of $10,000 over more than a
12-month period all as set forth on Schedule 3.14 (which Schedule contains true
and accurate information regarding the nature and status of such contracts and
agreements).
3.15 LITIGATION AND GOVERNMENT CLAIMS. There is no pending suit, claim,
action or litigation, or administrative, arbitration or other proceeding or
governmental investigation or inquiry against Opticon to which its business or
assets are subject which would, severally or in the aggregate, reasonably be
expected to result in an Opticon Material Adverse Effect nor to the knowledge of
Opticon have any such proceedings been threatened or contemplated. Opticon is
not subject to any judgment, decree, injunction, rule or order of any court, or,
to the knowledge of Opticon, any governmental restriction applicable to Opticon
which is reasonably likely (i) to have an Opticon Material Adverse Effect or
(ii) to cause a material limitation on Parent's ability to operate the business
of Opticon (as it is currently operated) after the Closing.
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3.16 COMPLIANCE WITH LAWS. Opticon has all material authorizations,
approvals, licenses and orders to carry on its business as it is now being
conducted, to own or hold under lease the properties or assets it owns or holds
under lease and to perform all of its obligations under the agreements to which
it is a party, except for instances which would not have an Opticon Material
Adverse Effect. Opticon has been and is, to the knowledge of Opticon, in
compliance with all applicable laws (including those referenced in the Opticon
Reports), regulations and administrative orders of any country, state or
municipality or any subdivision of any thereof to which its businesses and its
employment of labor or its use or occupancy of properties or any part hereof are
subject, the violation of which would have an Opticon Material Adverse Effect.
3.17 LICENSES AND PERMITS. Opticon has obtained all licenses, permits,
qualifications, franchises and other governmental authorizations and approvals,
including, without limitation, all state licenses and, as applicable, approvals
by the FDA, required in order for it to conduct its business as presently
conducted, all of which are listed on Schedule 3.17 hereto. All of such
licenses, permits, qualifications, franchises and other authorizations are in
full force and effect and will remain in full force and effect immediately after
the Closing and shall not be violated by or effected, impaired or acquire any
further action to remain effective as a result of the Closing. No material
violation exists in respect of any such license, permit, qualification,
franchise, authorization or approval. No proceeding is pending, or to the
knowledge of Opticon, threatened to revoke or limit any such license, permit,
qualification, franchise, authorization or approval.
3.18 EMPLOYEE BENEFIT PLANS.
Opticon has no employee benefit plans subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").
3.19 EMPLOYMENT AGREEMENTS; LABOR RELATIONS.
(a) Schedule 3.19 sets forth a complete and accurate list of
all material employee benefit or compensation plans, agreements and
arrangements to which Opticon is a party and which are not disclosed in
the Opticon Information, including without limitation (i) all
severance, employment, consulting or similar contracts, (ii) all
material agreements and contracts with "change of control" provisions
or similar provisions and (iii) all indemnification agreements or
arrangements with directors or officers.
(b) Opticon is in compliance in all material respects with all
laws (including Federal and state laws) respecting employment and
employment practices, terms and conditions of employment, wages and
hours, and is not engaged in any unfair labor or unlawful employment
practice.
(c) No work stoppage involving Opticon is pending or, to
Opticon's knowledge, threatened. Opticon is not involved in, affected
by or, to Opticon's knowledge, threatened with, any labor dispute,
arbitration, lawsuit or administrative proceeding which could have a
Opticon Material Adverse Effect. No employees of
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Opticon are represented by any labor union or any collective bargaining
agreement otherwise in effect with respect to such employees.
3.20 INTELLECTUAL PROPERTY.
(a) Opticon owns or has the right to use pursuant to license,
sublicense, agreement, or permission all Intellectual Property
necessary for the operation if its business as presently conducted and
as presently proposed to be conducted. Each item of Intellectual
Property owned or used by Opticon immediately prior to the Closing will
be owned or available for use by the Merger Subsidiary on no less
favorable terms and conditions immediately subsequent to the Closing
except the extent the Merger Subsidiary has agreed to modify such terms
and conditions. Opticon has taken all necessary action, consistent with
industry standards, to maintain and protect each item of Intellectual
Property that it owns or uses.
(b) To the knowledge of Opticon, Opticon has not interfered
with, infringed upon, misappropriated or otherwise come into conflict
with any Intellectual Property rights of third parties. None of the
directors and officers of Opticon (including employees with
responsibility for Intellectual Property matters) has ever received any
charge, complaint, claim, demand or notice alleging any such
interference, infringement, misappropriation or violation (including
any claim that Opticon must license or refrain from using any
Intellectual property rights of any third party except as listed in
Schedule 3.20(b)). To the Knowledge of Opticon and its employees with
responsibility for Intellectual Property matters, no third party has
interfered with, infringed upon, misappropriated, or otherwise come
into conflict with any Intellectual Property rights of Opticon.
(c) Schedule 3.20(c) identifies each patent or registration
which has been issued to Opticon, or invention disclosures prepared by
Opticon, if any, with respect to any of its Intellectual Property,
identifies each pending patent application or application for
registration which Opticon has made with respect to any of its
Intellectual Property, and identifies each license, agreement, or other
permission which Opticon has granted to any third party with respect to
any of the Intellectual Property (together with any exceptions) of
Opticon. Opticon has delivered to Parent correct and complete copies of
all such patents, registrations, applications, licenses, agreements and
permission (as amended to date) and has made available to Parent
correct and complete copies of all other written documentation
evidencing ownership and prosecution (if applicable) of each such item.
Schedule 3.20(c) also identifies each trade name or unregistered
trademark used by Opticon. With respect to each item of Intellectual
Property required to be identified on Schedule 3.20(c):
(i) Opticon possesses all right, title and
interest in and to the item, free and clear
of any Lien, license or restriction;
(ii) The item is not subject to any outstanding
injunction, judgment, order, decree, ruling,
or charge;
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(iii) No action, suit, proceeding, hearing,
investigation, charge, complaint, claim or
demand is pending or to the knowledge of
Opticon and any employees with
responsibility for Intellectual Property
matters, is threatened which challenges the
legality, validity, enforceability, use or
ownership of the item; and
(iv) Except as identified on Schedule 3.20(c),
Opticon has never agreed to indemnify any
person for or against any interference,
infringement, misappropriation or other
conflict with respect to the item.
(d) Schedule 3.20(d) identifies each item of Intellectual
Property that any third party owns and that Opticon uses pursuant to
license, sublicense, agreement or permission and which is material to
the Business of Opticon as currently conducted (excluding packaged
commercially available software available to the public through retail
dealers which have been licensed to Opticon pursuant to end-user
licenses). Opticon has delivered to Parent complete and correct copies
of all such licenses, sublicense, agreements, and permission (as
amended to date). With respect to each of the foregoing items of
Intellectual Property required to be identified on Schedule 3.20(d):
(i) The license, sublicense, agreement or
permission covering the item is legal,
valid, binding, enforceable, and in full
force and effect;
(ii) The license, sublicense, agreement or
permission 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;
(iii) No party to the license, sublicense,
agreement or permission is in breach or
default, and no event has occurred which
with notice or lapse of time would
constitute a breach of default or permit
termination, modification or acceleration
thereunder;
(iv) To the knowledge of Opticon, no party to the
license, sublicense, agreement or permission
has repudiated any provision thereof;
(v) With respect to each sublicense, the
representations and warranties set for in
subparagraphs (i) through (iv) above are
true and correct with respect to the
underlying license;
(vi) The underlying item of Intellectual Property
is not subject to any outstanding
injunction, judgment, order, decree, ruling
or charge;
(vii) No action, suit, proceeding, hearing,
investigation, charge, complaint, claim or
demand is pending or to the knowledge of
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Opticon and any employees with
responsibility for Intellectual Property
matters is threatened which challenges the
legality, validity or enforceability of the
underlying item of Intellectual Property;
and
(viii) Opticon has not granted any sublicense or
similar right with respect to the license,
sublicense, agreement or permission.
(e) To the knowledge of Opticon and any Opticon employees with
responsibility for Intellectual Property matters, the business of
Opticon will not interfere with, infringe upon, misappropriate, or
otherwise come into conflict with, any Intellectual Property rights of
third parties as a result of the continued operation of its business as
presently conducted and as presently proposed to be conducted.
3.21 SOFTWARE. All of the computer software used by or for Opticon in
the conduct of its business (the "Software") is either (i) owned by Opticon free
and clear of any and all liens, claims, equities, security interests, and
encumbrances whatsoever, or (ii) used by Opticon pursuant to a fully-paid
license granted to Opticon for the third party pursuant to the terms of such
license. No such computer software license shall terminate or become terminable
as a result of the transactions contemplated hereby. There are no infringement
suits pending or, to Opticon's knowledge, threatened against Opticon with
respect to any of the Software, and, to the knowledge of Opticon, no fact or
condition exists which could give rise to any such infringement suit.
3.22 PROPERTIES AND RELATED MATTERS. Except as may be reflected in the
Opticon Financial Statements and except for any lien for current taxes not yet
delinquent, Opticon has good title free and clear of any material liens, claims,
charges, options, encumbrances, or similar restrictions to all the personal
property reflected in Opticon's balance sheet as of December 31, 1998, and all
personal property acquired since that date, except such personal property as has
been disposed of in the ordinary course of business. All leases of real property
and all other leases material to Opticon pursuant to which Opticon, as lessee,
leases real or personal property, which leases are described on Schedule 3.22,
are, to the knowledge of Opticon, valid and effective in accordance with their
respective terms, and there is not, under any such lease, any material existing
default by Opticon or any event which, with notice or lapse of time or both,
constitute such a material default.
3.23 INSURANCE. Opticon maintains and has maintained insurance, for
reasonable amounts with financially sound and reputable insurance companies
against such risks as companies engaged in a similar business would, in
accordance with good business practice, customarily be insured and has
maintained all insurance acquired by applicable law and regulation.
3.24 MATERIAL INTERESTS OF CERTAIN PERSONS. Except as set forth on
Schedule 3.24, to Opticon's knowledge no officer or director of Opticon, or any
"associate" (as such term is defined in Rule 14a-1 under the Exchange Act) of
any such officer or director, has any interest in
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any material contract or property (real or personal), tangible or intangible,
used in or pertaining to the business of Opticon. Schedule 3.24 sets forth a
correct and complete list of any loan from Opticon to any present officer,
director, employee or associate or related interest of any such person.
3.25 REGISTRATION OBLIGATIONS. Except as described on Schedule 3.25,
Opticon is not under any obligation, contingent or otherwise, which will survive
the Merger by reason of any agreement to register any of its securities under
the Securities Act.
3.26 ENVIRONMENTAL MATTERS. To the knowledge of Opticon:
(a) No Hazardous Material (as defined below) has been disposed
of on, released to or from, threatened to be released to or from or is
presently at, on, beneath, in or upon any partial of real property
owned or leased by Opticon or upon any adjacent parcels of real estate
in amounts or concentration which constitute or constituted a violation
of, or which could reasonably be expected to give rise to liability
under, any Environmental Law (as defined below).
(b) There has been no generation, production, refining,
processing, manufacturing, use, storage, disposal, treatment, shipment
or receipt of a Hazardous Material at or from any parcel of real
property owned or leased by Opticon relating to the operations of
Opticon in violation of or in a manner that could give rise to
liability under Environmental Laws.
(c) The operations of Opticon are in compliance and have been
in compliance with all applicable Environmental Laws, and there is no
violation of any Environmental Law with respect to any parcels of real
property owned or leased by Opticon which could interfere with the
continued operation of the business of Opticon or impair its fair
salable value.
(d) Opticon has not received any notice of violation, alleged
violation, non-compliance, liability or potential liability regarding
environmental matters or compliance with environmental laws with regard
to any parcels of real property owned or leased by Opticon from any
person, nor does Opticon have knowledge or reason to believe that any
such notice will be received from or is being threatened by any person.
(e) No judicial proceedings, governmental administrative
actions, investigations or internal or non-public agency proceedings
are pending or threatened, under any environmental law, to which
Opticon is or will be named as a party, nor are the any consent
decrees, or other decrees, consent orders, agreements, administrative
orders, other orders, judicial or administrative requirements
outstanding under any environmental law with respect to Opticon .
(f) "Hazardous Materials" means any substance (a) the presence
of which at, on, over, beneath, in or upon any real or personal
property, building, structure, container of any nature or description,
subsurface strata, ambient air or ambient water (including
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surface and groundwater) requires investigation, removal or remediation
under any Environmental Law or common law, (b) which is or becomes
defined as a "hazardous substance," "hazardous material," "hazardous
waste," "pollutant" or "contaminant" under any Environmental Law,
and/or (c) which is toxic, explosive, corrosive, flammable, infectious,
radioactive, carcinogenic, mutagenic, or otherwise hazardous and is or
becomes regulated by any governmental authority under any Environmental
Law, (d) the presence of which causes or threatens to cause a nuisance
or trespass upon real property or to adjacent properties or poses or
threatens to pose a hazard to the environment, and/or to the health or
safety of persons on or about any real property, and/or (e) which
contains urea-formaldehyde, polychlorinated biphenyls, asbestos or
asbestos containing materials, radon, petroleum or petroleum products.
(g) "Environmental Law or Laws" means any and all federal,
state, local or municipal laws, rules, orders, regulations, statutes,
treaties, ordinances, codes, decrees, or requirements of any
governmental authority regulating, relating to or imposing liability or
standards of conduct concerning environmental protection, health or
safety matters, including all requirements pertaining to reporting,
licensing, permitting, investigation, removal or remediation of
emissions, discharges, releases, or threatened releases of Hazardous
Materials, chemical substances, pollutants or contaminants or relating
to the manufacture, generation, processing, distribution, use,
treatment, storage, disposal, transport, or handling of Hazardous
Materials, chemical substances, pollutants or contaminants, including,
without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ("CERCLA"), the Toxic Substance
Control Act ("TSCA"), the Resource Conservation and Recovery Act
("RCRA"), the Clean Air Act ("CAA"), the Clean Water Act ("CWA") and
the Occupational Safety and Health Act of 1970 ("OSHA"), all as may
have been amended.
3.27 REFERRAL SOURCES; INVESTORS. Opticon has not been advised that any
of its officers, referral sources or investors intend to cease doing business
with Opticon which cessation in the aggregate or otherwise could have a Opticon
Material Adverse Effect.
3.28 COMPLIANCE WITH YEAR 2000 REQUIREMENTS. All of Opticon's
Information Systems and Equipment (as defined below) is either Year 2000
Compliant (as defined below), or any reprogramming, remediation, or other
corrective action, including the internal testing of all such Information
Systems and Equipment, will be completed by December 31, 1999, except for any
failure to be Year 2000 Compliant that cannot reasonably be expected to have a
Opticon Material Adverse Effect. "Year 2000 Compliant" means that all
Information Systems and Equipment accurately process date data (including, but
not limited to, calculating, comparing, and sequencing), before, during and
after the year 2000, as well as same and multi-century dates, or between the
years 1999 and 2000, taking into account all leap years, including the fact that
the year 2000 is a leap year and shall in all material respects continue to
function in the same manner as it performs today and shall not otherwise impair
in any material respect the accuracy or functionality of Information Systems and
Equipment. "Information Systems and Equipment" means all computer hardware,
firmware and software, as well as other information processing systems, other
than any equipment containing imbedded microchips, whether directly owned,
licensed, leased, operated or otherwise controlled by Opticon, in which, in
whole or in part, are
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used, operated, relied upon, or integral to, the conduct of the business of
Opticon ; provided that Information Systems and Equipment does not include any
of the foregoing of any third-party customer or vendor which is not owned,
licensed, leased, operated or otherwise controlled by Opticon .
3.29 BROKERS AND FINDERS. Neither Opticon, nor to Opticon's knowledge
any of its officers, directors, employees, or stockholders has employed any
broker, finder or investment bank or incurred any liability for any investment
banking fees, financial advisory fees, brokerage fees or finders' fees in
connection with the transactions contemplated hereby. Opticon is not aware of
any claim for payment of any finder's fees, brokerage or agent's commissions or
other like payments in connection with the negotiations leading to this
Agreement or the consummation of the transactions contemplated hereby other than
the consulting agreement between Parent and World Capital Funding, LLC.
3.30 OPTICON'S REPRESENTATIONS AND WARRANTIES MODIFIED BY KNOWLEDGE OF
PARENT. To the extent that any representation or warranty of Opticon is, to the
actual knowledge of Parent, acquired prior to the date thereof, untrue or
incorrect, then (a) neither of Parent nor Merger Subsidiary shall have any
rights by reason of such untruth or inaccuracy, and (b) any such representation
or warranty by Opticon shall be deemed to be amended to the extent necessary to
render it consistent with such actual knowledge of Parent. Furthermore, if the
Closing occurs, then to the extent that any representation or warranty of
Opticon made herein, or in any other document or instrument, to the actual
knowledge of Parent, acquired at any time on or after the date hereof and prior
to the Closing, is untrue or incorrect, then (x) neither Parent nor Merger
Subsidiary shall have any rights thereunder by reason of such untruth or
inaccuracy, and (y) such representation or warranty by Opticon shall be deemed
to be amended to the extent necessary to render it consistent with such actual
knowledge of Parent.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PARENT
AND THE MERGER SUBSIDIARY
Parent and the Merger Subsidiary represent and warrant to Opticon that
the statements contained in Article 4 are true and correct in all material
respects. As used in this Article 4 and elsewhere in this Agreement, the phrase
"to Parent's or the Merger Subsidiary's knowledge" or "to Parent's or the Merger
Subsidiary's actual knowledge" shall mean to the knowledge of the officer of
Parent or the Merger Subsidiary who has the principal responsibility for the
matter being stated.
4.1 ORGANIZATION AND GOOD STANDING. Each of Parent and the Merger
Subsidiary is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or organization.
4.2 FOREIGN QUALIFICATION. Parent and the Merger Subsidiary are duly
qualified or licensed to do business and are in good standing as a foreign
corporation in every jurisdiction
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where the failure so to qualify would have a material adverse effect (a "Parent
Material Adverse Effect") on (a) the business, operation, assets or financial
condition of Parent and the Merger Subsidiary or (b) the validity or
enforceability of, or the ability of Parent to perform its obligations under,
this Agreement.
4.3 CORPORATE POWER AND AUTHORITY. Parent and the Merger Subsidiary
have the corporate power and authority and all material licenses and permits to
own, lease and operate their respective properties and assets and to carry on
their respective businesses as currently being conducted. Parent has furnished
Opticon with true and correct copies of the Certificate of Incorporation and
Bylaws of each of Parent and Merger Subsidiary.
4.4 AUTHORIZATION. Parent and the Merger Subsidiary have the corporate
power and authority to execute and deliver this Agreement and to perform their
obligations under this Agreement and to consummate the Merger. The execution,
delivery and performance by Parent and the Merger Subsidiary of this Agreement
has been duly authorized by all necessary corporate action. Subject to such
approval of government agencies and other government boards having regulatory
authority over Parent and the Merger Subsidiary as may be required by statute or
regulation, this Agreement is the legal, valid and binding obligation of Parent
and the Merger Subsidiary enforceable in accordance with its terms, subject to
the Enforceability Exceptions.
4.5 ABSENCE OF RESTRICTIONS AND CONFLICTS. The execution, delivery and
performance of this Agreement and the consummation of the Merger and the
fulfillment of and compliance with the terms and conditions of this Agreement do
not and will not, with the passing of time or the giving of notice or both,
violate or conflict with, constitute a breach of or default under, result in the
loss of any material benefit under, or permit the acceleration of any obligation
under, (i) any term or provision of the Certificate of Incorporation or Bylaws
of Parent or the Merger Subsidiary, (ii) any "Parent Material Contract" (as
defined in Section 4.12), (iii) any judgment, decree or order of any court or
governmental authority or agency to which Parent or the Merger Subsidiary is a
party or by which Parent or any of the Merger Subsidiary or any of their
respective properties is bound, or (iv) any statute, law, regulation or rule
applicable to Parent or the Merger Subsidiary other than such violations,
conflicts, breaches or defaults as would not have a Parent Material Adverse
Effect. Except for the filing of the Certificate of Merger with the Secretary of
State of Delaware and the Secretary of State of Iowa, compliance with the
Securities Act, the Exchange Act and applicable state securities laws, no
consent, approval, order or authorization of, or registration, declaration or
filing with, any governmental agency or public or regulatory unit, agency, body
or authority with respect to Parent or the Merger Subsidiary is required in
connection with the execution, delivery or performance of this Agreement by
Parent or the Merger Subsidiary or the consummation of the transactions
contemplated hereby.
4.6 CAPITALIZATION OF PARENT.
(a) The authorized capital stock of Parent consists of
25,000,000 shares of Parent Common Stock, $.0001 par value. Schedule
4.6 lists the number of shares of Parent Common Stock outstanding,
which, in any event, will be no more than 6,000,000 shares prior to
Closing.
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(b) All of the issued and outstanding shares of Parent Common
Stock have been duly authorized and validly issued and are fully paid,
nonassessable and free of preemptive rights.
(c) The shares of Parent Common Stock to be issued in the
Merger will be duly authorized and validly issued and will be fully
paid, nonassessable shares of Parent Common Stock free of preemptive
rights.
(d) To Parent's knowledge, there are no voting trusts,
stockholder agreements or other voting arrangements between or among
the stockholders of Parent.
(e) Except as set forth in subsection (a) above, there is no
outstanding subscription, contract, convertible or exchangeable
security, option, warrant, call or other right obligating Parent or its
subsidiaries to issue, sell, exchange, or otherwise dispose of, or to
purchase, redeem or otherwise acquire, shares of, or securities
convertible into or exchangeable for, capital stock of Parent.
4.7 CAPITALIZATION OF MERGER SUBSIDIARY.
(a) The authorized capital stock of Merger Subsidiary consists
of 1,000,000 shares of Merger Subsidiary Preferred Stock, $.0001 par
value, none of which are issued and outstanding, and 25,000,000 shares
of Merger Subsidiary Common Stock, $.0001 par value, 100 shares of
which are issued and outstanding and legally and beneficially owned by
Parent, free and clear of any lien, claim, charge, option, encumbrance
or agreement (other than this Agreement) with respect thereto.
(b) The shares of Merger Subsidiary Common Stock are duly
authorized and validly issued and will be fully paid, nonassessable
shares of Merger Subsidiary Common Stock free of preemptive rights.
(c) Except as set forth in this Agreement, there is no
outstanding subscription, contract, convertible or exchangeable
security, option, warrant, call or other right obligating Merger
Subsidiary to issue, sell, exchange, or otherwise dispose of, or to
purchase, redeem or otherwise acquire, shares of, or securities
convertible into or exchangeable for, capital stock of Merger
Subsidiary.
4.8 PARENT SEC REPORTS. Parent has made available to Opticon (i)
Parent's Annual Reports on Form 10-KSB, including all exhibits filed thereto and
items incorporated therein by reference, (ii) Parent's Quarterly Reports on Form
10-QSB, including all exhibits thereto and items incorporated therein by
reference, (iii) proxy statements relating to Parent's meetings of stockholders
and (iv) all other reports or registration statements (as amended or
supplemented prior to the date hereof), filed by Parent with the Securities and
Exchange Commission ("SEC") since January 1, 1996, including all exhibits
thereto and items incorporated therein by reference (items (i) through (iv)
being referred to as the "Parent SEC Reports"). As of their respective dates,
Parent SEC Reports did not contain any untrue statement of a material fact or
omit to state
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a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. Since January 1, 1996, Parent has filed all material forms (and
necessary amendments), reports and documents with the SEC required to be filed
by it pursuant to the federal securities laws and the SEC rules and regulations
thereunder, each of which complied as to form, at the time such form, report or
document was filed, in all material respects with the applicable requirements of
the Securities Act and the Exchange Act and the applicable rules and regulations
thereunder.
4.9 FINANCIAL STATEMENTS AND RECORDS OF PARENT. Parent has made or will
make available to Opticon true, correct and complete copies of the following
financial statements (the "Parent Financial Statements"):
(a) the balance sheets of Parent as of December 31, 1997 and
1998, and the statements of income, stockholders' equity and cash flows
for the fiscal years then ended, including the notes thereto, in each
case examined by and accompanied by the report of Xxxxx & Co., CPAs,
P.C.; and
(b) the unaudited consolidated balance sheet of Parent as of
June 30, 1999 (the "Parent Balance Sheet"), with any notes thereto, and
the related unaudited statement of income for the fiscal quarter ending
June, 1999 (collectively, the "Parent Quarterly Statements").
The Parent Financial Statements present fairly, in all material
respects, the financial position of Parent as of the dates thereof and
the results of operations and changes in financial position thereof for
the periods then ended, in each case in conformity with generally
accepted accounting principles, consistently applied, except as noted
therein. Since June 30, 1999, there has been no change in accounting
principles applicable to, or methods of accounting utilized by, Parent,
except as noted in the Parent Financial Statements. The books and
records of Parent have been and are being maintained in accordance with
good business practice, reflect only valid transactions, are complete
and correct in all material respects, and present fairly in all
material respects the basis for the financial position and results of
operations of Parent set forth in the Parent Financial Statements.
4.10 ABSENCE OF CERTAIN CHANGES. Since June 30, 1999, neither Parent
nor the Merger Subsidiary has, except as otherwise set forth in the Parent SEC
Reports or on Schedule 4.10:
(a) suffered any adverse change in the business, operation,
assets, or financial condition except for such changes that would not
have a Parent Material Adverse Effect;
(b) suffered any material damage or destruction to or loss of
the assets of Parent or any of the Merger Subsidiary, whether or not
covered by insurance, which property or assets are material to the
operations or business of Parent and its subsidiaries taken as a whole;
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(c) settled, forgiven, compromised, canceled, released, waived
or permitted to lapse any material rights or claims other than in the
ordinary course of business;
(d) entered into or terminated any Material Contract or agreed
or made any changes in any Material Contract, other than renewals or
extensions thereof and leases, agreements, transactions and commitments
entered into or terminated in the ordinary course of business;
(e) entered into any transaction, other than at arms-length in
the ordinary course of business, between Parent or Merger Subsidiary
and any, director, officer, or any affiliate of any such officer,
director or ;
(f) made any material change in the accounting policy,
procedure or practice employed with respect to Parent;
(g) sold any of the assets of Parent or Merger Subsidiary
(tangible or intangible);
(h) paid or incurred any capital expenditures, other than
capital expenditures incurred in the ordinary course of business which
does not exceed $10,000 (any single item or group of related items);
(i) written up, written down or written off the book value of
any material amount of assets other than in the ordinary course of
business;
(j) declared, paid or set aside for payment any dividend or
distribution with respect to Parent's capital stock;
(k) redeemed, purchased or otherwise acquired, or sold,
granted or otherwise disposed of, directly or indirectly, any of
Parent's or the Merger subsidiary's capital stock or securities or any
rights to acquire such capital stock or securities, or agreed to
changes in the terms and conditions of any such rights outstanding as
of the date of this Agreement;
(l) increased the compensation of or paid any bonuses to any
employees or contributed to any employee benefit plan, other than in
accordance with established policies, practices or requirements and as
provided in Section 6.2 hereof;
(m) entered into any employment, consulting or compensation
agreement with any person or group, except for agreements in connection
with the other transactions contemplated by this Agreement including
The World Capital Funding consulting agreement;
(n) entered into any collective bargaining agreement with any
person or group;
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(o) entered into, adopted or amended any employee benefit
plan; or
(p) entered into any agreement to do any of the foregoing.
4.11 NO MATERIAL UNDISCLOSED LIABILITIES. There are no liabilities or
obligations of Parent and its consolidated subsidiaries of any nature, whether
absolute, accrued, contingent, or otherwise, other than:
(a) liabilities and obligations that are reflected, accrued or
reserved against on the Parent Balance Sheet or referred to in the
footnotes to the Parent Balance Sheet, or incurred in the ordinary
course of business and consistent with past practices since March 31,
1999; or
(b) liabilities and obligations which in the aggregate would
not result in a Parent Material Adverse Effect.
4.12 TAX RETURNS; TAXES. Each of Parent and the Merger Subsidiary has
filed all federal, state, county, local, and foreign tax returns, including
information returns, required to be filed by it, and paid all taxes owed by it,
including those with respect to income, withholding, social security,
unemployment, workers' compensation, franchise, ad valorem, premium, excise and
sales taxes, and no taxes shown on such returns to be owed by it or assessments
received by it are delinquent. Federal income tax returns of Parent for the
fiscal year ended December 31, 1995, and for all fiscal years prior thereto, are
for the purposes of routine audit by the Internal Revenue Service closed because
of the statute of limitations, and no claims for additional taxes for such
fiscal years are pending. Neither Parent nor the Merger Subsidiary is a party to
any pending action or proceeding, nor, to Parent's knowledge, is any such action
or proceeding threatened by any governmental authority, for the assessment or
collection of taxes, interest, penalties, assessments or deficiencies and no
issue has been raised by any federal, state, local or foreign taxing authority
in connection with any audit or examination of the tax returns, business or
properties of Parent and the Merger Subsidiary which has not been settled,
resolved and fully satisfied. Except for amounts not yet due and payable, each
of Parent and the Merger Subsidiary has paid all taxes owed or which it is
required to withhold from amounts owing to employees, creditors or other third
parties. The balance sheet as of December 31, 1998, referred to in Section 4.8,
includes adequate provision for all accrued but unpaid federal, state, county,
local and foreign taxes, interests, penalties, assessments or deficiencies of
Parent with respect to all periods through the date thereof.
4.13 MATERIAL CONTRACTS. Parent has furnished or made available to
Opticon accurate and complete copies of the Parent Material Contracts (as
defined herein) applicable to Parent or the Merger Subsidiary. There is not
under the Parent Material Contracts any existing breach, default or event of
default by Parent or the Merger Subsidiary nor event that with notice or lapse
of time or both would constitute a breach, default or event of default by Parent
or the Merger Subsidiary other than breaches, defaults or events of default
which would not have a Parent Material Adverse Effect nor does Parent know of,
and Parent has not received notice of, or made a claim with respect to, any
breach or default by any other party thereto which would, severally or in the
aggregate, have a Parent Material Adverse Effect. As used herein, the term
"Parent
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Material Contracts" shall mean all contracts and agreements filed, or required
to be filed, as exhibits to Parent's Annual Report on Form 10-KSB for the year
ended or incorporated by reference therein as an exhibit to Parent's Annual
Report on Form 10-KSB for the year ending December 31, 1998.
4.14 LITIGATION AND GOVERNMENT CLAIMS. Except as disclosed in the
Parent SEC Reports, there is no pending suit, claim, action or litigation, or
administrative, arbitration or other proceeding or governmental investigation or
inquiry against Parent or the Merger Subsidiary to which their businesses or
assets are subject which would, severally or in the aggregate, reasonably be
expected to result in a Parent Material Adverse Effect nor have any such
proceedings been threatened or contemplated. Neither Parent nor the Parent
Subsidiary is subject to any judgment, decree, injunction, rule or order of any
court, or, to the knowledge of Parent, any governmental restriction applicable
to Parent or the Parent Subsidiary which is reasonably likely to have a Parent
Material Adverse Effect.
4.15 COMPLIANCE WITH LAWS. Parent and the Merger Subsidiary each have
all material authorizations, approvals, licenses and orders to carry on their
respective businesses as they are now being conducted, to own or hold under
lease the properties or assets they own or hold under lease and to perform all
of their obligations under the agreements to which they are a party, except for
instances which would not have a Parent Material Adverse Effect. Parent and the
Merger Subsidiary have been and are, to the knowledge of Parent, in compliance
with all applicable laws (including those referenced in the Parent SEC Reports),
regulations and administrative orders of any country, state or municipality or
any subdivision of any thereof to which their respective businesses and their
employment of labor or their use or occupancy of properties or any part hereof
are subject, the violation of which would have a Parent Material Adverse Effect.
4.16 EMPLOYMENT AGREEMENTS; LABOR RELATIONS.
(a) Schedule 4.16 sets forth a complete and accurate list of
all material employee benefit or compensation plans, agreements and
arrangements to which Parent is a party and which are not disclosed in
the Parent Information, including without limitation (i) all severance,
employment, consulting or similar contracts, (ii) all material
agreements and contracts with "change of control" provisions or similar
provisions and (iii) all indemnification agreements or arrangements
with directors or officers.
(b) Parent is in compliance in all material respects with all
laws (including Federal and state laws) respecting employment and
employment practices, terms and conditions of employment, wages and
hours, and is not engaged in any unfair labor or unlawful employment
practice.
(c) No work stoppage involving Parent is pending or, to
Parent's knowledge, threatened. Parent is not involved in, affected by
or, to Parent's knowledge, threatened with, any labor dispute,
arbitration, lawsuit or administrative proceeding which could have a
Parent Material Adverse Effect. No employees of Parent are represented
by any labor union or any collective bargaining agreement otherwise in
effect with respect to
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such employees.
4.17 PARENT EMPLOYEE BENEFIT PLANS. Parent has no employee benefit
plans subject to ERISA.
4.18 INTELLECTUAL PROPERTY. Parent and the Merger Subsidiary own or
have valid, binding and enforceable rights to use all material patents,
trademarks, trade names, service marks, service names, copyrights, applications
therefor and licenses or other rights in respect thereof ("Parent Intellectual
Property") used or held for use in connection with the business of Parent or the
Merger Subsidiary, without any known conflict with the rights of others, except
for such conflicts as do not have a Parent Material Adverse Effect. Neither
Parent nor the Merger Subsidiary has received any notice from any other person
pertaining to or challenging the right of Parent or the Merger Subsidiary to use
any Parent Intellectual Property or any trade secrets, proprietary information,
inventions, know-how, processes and procedures owned or used or licensed to
Parent or the Merger Subsidiary, except with respect to rights the loss of
which, individually or in the aggregate, would not have a Parent Material
Adverse Effect.
4.19 PROPERTIES AND RELATED MATTERS. Neither Parent nor the Merger
Subsidiary owns or leases any real property.
4.20 BROKERS AND FINDERS. With the exception of the consulting
agreement between Parent and World Capital Funding, LLC., neither Parent, nor to
Parent's knowledge any of its officers, directors and employees has employed any
broker, finder or investment bank or incurred any liability for any investment
banking fees, financial advisory fees, brokerage fees or finders' fees in
connection with the transactions contemplated hereby. Parent is not aware of any
claim for payment of any finder's fees, brokerage or agent's commissions or
other like payments in connection with the negotiations leading to this
Agreement or the consummation of the transactions contemplated hereby.
4.21 YEAR 2000 COMPLIANCE. To Parent's knowledge, all of its
Information Systems and Equipment (as defined below) is either Year 2000
Compliant (as defined below), or any reprogramming, remediation, or other
corrective action, including the internal testing of all such Information
Systems and Equipment, will be completed by December 31, 1999, except for any
failure to be Year 2000 Compliant that cannot reasonably be expected to have an
Parent Material Adverse Effect. "Year 2000 Compliant" means that all Information
Systems and Equipment accurately process date data (including, but not limited
to, calculating, comparing, and sequencing), before, during and after the year
2000, as well as same and multi-century dates, or between the years 1999 and
2000, taking into account all leap years, including the fact that the year 2000
is a leap year and shall in all material respects continue to function in the
same manner as it performs today and shall not otherwise impair in any material
respect the accuracy or functionality of Information Systems and Equipment.
"Information Systems and Equipment" means all computer hardware, firmware and
software, as well as other information processing systems, other than any
equipment containing imbedded microchips, whether directly owned, licensed,
leased, operated or otherwise controlled by Parent, in which, in whole or in
part, are used, operated, relied upon, or integral to, the conduct of the
business of Parent; provided that Information Systems and Equipment does not
include any of the foregoing of any third-party
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customer or vendor which is not owned, licensed, leased, operated or otherwise
controlled by Parent.
4.22 INTERIM OPERATIONS OF MERGER SUBSIDIARY. Merger Subsidiary was
formed solely for the purpose of engaging in the transactions contemplated
hereby, has engaged in no other business activities and has conducted its
operations only as contemplated hereby.
4.23 PARENT AND MERGER SUBSIDIARY'S REPRESENTATIONS AND WARRANTIES
MODIFIED BY KNOWLEDGE OF Opticon. To the extent that any representation or
warranty of Parent or Merger Subsidiary is, to the actual knowledge of Opticon,
acquired prior to the date thereof, untrue or incorrect, then (a) Opticon shall
not have any rights by reason of such untruth or inaccuracy, and (b) any such
representation or warranty by Parent or Merger Subsidiary shall be deemed to be
amended to the extent necessary to render it consistent with such actual
knowledge of Opticon. Furthermore, if the Closing occurs, then to the extent
that any representation or warranty of Parent or Merger Subsidiary made herein,
or in any other document or instrument, to the actual knowledge of Opticon,
acquired at any time on or after the date hereof and prior to the Closing, is
untrue or incorrect, then (x) Opticon shall not have any rights thereunder by
reason of such untruth or inaccuracy, and (y) such representation or warranty by
Parent or Merger Subsidiary shall be deemed to be amended to the extent
necessary to render it consistent with such actual knowledge of Opticon.
ARTICLE 5
CERTAIN COVENANTS AND AGREEMENTS
5.1 CONDUCT OF BUSINESS BY OPTICON. From the date hereof to the
Effective Date, Opticon will, except as required in connection with the Merger
and the other transactions contemplated by this Agreement and except as
otherwise disclosed in the Opticon Information or consented to in writing by
Parent:
(a) not engage in any new line of business or enter into any
Material Contract, transaction or activity or make any material
commitment except those in the ordinary and regular course of business
and not otherwise prohibited under this Section 5.1;
(b) maintain its corporate existence in good standing and
neither change nor amend its Certificate of Incorporation or Bylaws;
(c) maintain proper business and accounting records in
accordance with generally accepted principles;
(d) maintain its property in good repair and condition,
ordinary wear and tear accepted;
(e) maintain in all material respects presently existing
insurance coverage;
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(f) use its best efforts to preserve its business organization
intact, to keep the services of its present principal employees and to
preserve its good will and the good will of its suppliers, customers
and others having business relationships with it;
(g) use its best efforts to obtain any approvals or consents
required to maintain existing leases and other contracts in effect
following the Merger;
(h) comply in all material respects with all laws,
regulations, ordinances, codes, orders, licenses and permits applicable
to the properties and the operations of Opticon and correct or remedy
any material violation of any law, regulation upon identification
thereof at Parent's request;
(i) create, incur, assume or guarantee any indebtedness for
borrowed money other than indebtedness incurred in the ordinary course
of business;
(j) make any loan to or investment in, or acquire any
securities or assets of any other person or entity;
(k) sell any of its assets;
(l) increase the compensation of any officers, directors or
executive employees, except pursuant to existing compensation plans or
practices;
(m) not issue or sell shares of capital stock of Opticon or
issue, sell or grant options, warrants or rights to purchase or
subscribe to, or enter into any arrangement or contract with respect to
the issuance or sale of any of the capital stock of Opticon or rights
or obligations convertible into or exchangeable for any shares of the
capital stock of Opticon and not make any changes (by split-up,
combination, reorganization or otherwise) in the capital structure of
Opticon;
(n) not declare, pay or set aside for payment any dividend or
other distribution in respect of the capital stock or other equity
securities of Opticon and not redeem, purchase or otherwise acquire any
shares of the capital stock or other securities of Opticon or rights or
obligations convertible into or exchangeable for any shares of the
capital stock or other securities of Opticon or obligations convertible
into such, or any options, warrants or other rights to purchase or
subscribe to any of the foregoing;
(o) not acquire or enter into any agreement to acquire, by
merger, consolidation or purchase of stock or assets, any business or
entity;
(p) perform all of its obligations under all Material
Contracts (except those being contested in good faith) and not enter
into, assume or amend any contract or commitment that would be a
Material Contract; and
(q) prepare and file all federal, state, local and foreign
returns for taxes and
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other tax reports, filings and amendments thereto required to be filed
by it, and allow Parent, at its request, to review all such returns,
reports, filings and amendments at Opticon's offices prior to the
filing thereof, which review shall not interfere with the timely filing
of such returns.
In connection with the continued operation of the business of Opticon
between the date of this Agreement and the Effective Date, Opticon shall confer
in good faith and on a regular and frequent basis with one or more
representatives of Parent designated in writing to report operational matters of
materiality and the general status of ongoing operations. Opticon acknowledges
that Parent does not and will not waive any rights it may have under this
Agreement as a result of such consultations nor shall Parent be responsible for
any decisions made by Opticon's officers and directors with respect to matters
which are the subject of such consultation.
5.2 CONDUCT OF BUSINESS BY PARENT. From the date hereof to the
Effective Date, Parent will, and will cause the Merger Subsidiary to, except as
required in connection with the Merger and the other transactions contemplated
by this Agreement and except as otherwise disclosed in the Parent Information
hereto or consented to in writing by Opticon:
(a not engage in any new line of business or enter into any
Material Contract, transaction or activity or make any material
commitment except those in the ordinary and regular course of business
and not otherwise prohibited under this Section 5.2;
(b maintain its corporate existence in good standing and
neither change nor amend its Certificate of Incorporation or Bylaws;
(c maintain proper business and accounting records in
accordance with generally accepted principles;
(d maintain its property in good repair and condition,
ordinary wear and tear accepted;
(e maintain in all material respects presently existing
insurance coverage;
(f use its best efforts to preserve its business organization
in tact, to keep the services of its present principal employees and to
preserve its good will and the good will of its suppliers, customers
and others having business relationships with it;
(g use its best efforts to obtain any approvals or consents
required to maintain existing leases and other contracts in effect
following the Merger;
(h comply in all material respects with all laws, regulations,
ordinances, codes, orders, licenses and permits applicable to the
properties and the operations of Parent and each Merger Subsidiary and
correct remedy any material violation of any law, regulation upon
identification thereof at Opticon' request;
(i except as set forth in Schedule 5.2(i), not authorize or
incur any
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indebtedness for borrowed money;
(j make any loan to or investment in, or acquire any
securities or assets of any other person or entity;
(k sell any of its assets;
(l increase the compensation of any officers, directors or
executive employees, except pursuant to existing compensation plans or
practices that have been disclosed to Opticon;
(m not make any changes (by split-up, combination,
reorganization or otherwise) in the capital structure of Parent, or the
Merger Subsidiary;
(n except as set forth on Schedule 5.2(n), not issue or sell
shares of capital stock of Parent or issue, sell or grant options,
warrants or rights to purchase or subscribe to, or enter into any
arrangement or contract with respect to the issuance or sale of any of
the capital stock of Parent or Merger Subsidiary or rights or
obligations convertible into or exchangeable for any shares of the
capital stock of Parent or Merger Subsidiary;
(o not declare, pay or set aside for payment any dividend or
other distribution in respect of the capital stock or other equity
securities of Parent and not redeem, purchase or otherwise acquire any
shares of the capital stock or other securities of Parent or the Merger
Subsidiary, or rights or obligations convertible into or exchangeable
for any shares of the capital stock or other securities of Parent, the
Merger Subsidiary or obligations convertible into such, or any options,
warrants or other rights to purchase or subscribe to any of the
foregoing;
(p not acquire or enter into any agreement to acquire, by
merger, consolidation or purchase of stock or assets, any business or
entity;
(q not make or incur (other than in the ordinary course of
business) any capital expenditures;
(r perform all of its obligations under all Material Contracts
(except those being contested in good faith) and not enter into, assume
or amend any contract or commitment that would be a Material Contract;
and
(s prepare and file all federal, state, local and foreign
returns for taxes and other tax reports, filings and amendments thereto
required to be filed by it, and allow Opticon, at its request, to
review all such returns, reports, filings and amendments at Parent's
office prior to the filing thereof, which review shall not interfere
with the timely filing of such returns.
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5.3 INSPECTION AND ACCESS TO INFORMATION.
(a Between the date of this Agreement and the Effective Date,
Opticon will provide to the Merger Subsidiary and Parent and their
accountants, counsel and other authorized representatives reasonable
access, during normal business hours to its premises, and will cause
its officers to furnish to Parent and the Merger Subsidiary and their
authorized representatives such financial, technical and operating data
and other information pertaining to its business, as the Merger
Subsidiary and Parent shall from time to time reasonably request. No
such examination by Parent or its representatives either before or
after the date of this Agreement shall in any way effect, diminish or
terminate any of the representations, warranties or covenants of
Opticon herein expressed.
(b Between the date of this Agreement and the Effective Date,
Parent will, and will cause the Merger Subsidiary to, provide to
Opticon and its accountants, counsel and other authorized
representatives reasonable access, during normal business hours to its
premises, and will cause its officers to furnish to Opticon and its
authorized representatives such financial, technical and operating data
and other information pertaining to its business, as Opticon shall from
time to time reasonably request. No such examination by Opticon or its
representatives either before or after the date of this Agreement shall
in any way effect, diminish or terminate any of the representations,
warranties or covenants of Parent and the Merger Subsidiary herein
expressed.
(c Each of the parties hereto and their respective
representatives shall maintain the confidentiality of all information
(other than information which is generally available to the public)
concerning the other parties hereto acquired pursuant to the
transactions contemplated hereby in the event that the Merger is not
consummated. Each of the parties hereto and their representatives shall
not use such information so obtained to the detriment or competitive
disadvantage of the other party hereto. All files, records, documents,
information, data and similar items relating to the confidential
information of Opticon, whether prepared by Parent or otherwise coming
into Parent's possession, shall remain the exclusive property of
Opticon and shall be promptly delivered to Opticon upon termination of
this Agreement. All files, records, documents, information, data and
similar items relating to the confidential information of Parent,
whether prepared by Opticon or otherwise coming into Opticon's
possession, shall remain the exclusive property of Parent and shall be
promptly delivered to Parent upon termination of this Agreement.
5.4 PARENT EXCHANGE ACT REPORTS. Opticon acknowledges that Parent will
be required to report its acquisition of Opticon promptly following the
Effective Date and include information regarding Opticon in any Proxy Statement
for a Parent special meeting of shareholders which may be required to approve
certain corporate actions required to complete the transactions contemplated by
this Agreement. Opticon agrees to provide as promptly as practicable to Parent
such information concerning its business and financial statements and affairs
as, in the reasonable judgment of Parent, may be required or appropriate for
inclusion in the required report, or in any amendments or supplements thereto,
and to cause its counsel and
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auditors to cooperate with Parent's counsel and auditors in the preparation of
such report. Opticon represents and warrants to Parent that the foregoing
information will (i) not contain any untrue statement of material fact, or omit
to state any material fact required to be stated therein as necessary, in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading and (ii) comply in all material respects with the
provisions of the Securities Act and Exchange Act, as applicable, and the rules
and regulations thereunder.
5.5 REASONABLE EFFORTS; FURTHER ASSURANCES; COOPERATION. Subject to the
other provisions of this Agreement, the parties hereby shall each use their
reasonable efforts to perform their obligations herein and to take, or cause to
be taken or do, or cause to be done, all things reasonably necessary, proper or
advisable under applicable law to obtain all regulatory approvals and satisfy
all conditions to the obligations of the parties under this Agreement and to
cause the Merger and the other transactions contemplated herein to be carried
out promptly in accordance with the terms hereof. The parties agree to use their
reasonable best efforts to consummate the transactions contemplated hereby by
December 31, 1999. The parties shall cooperate fully with each other and their
respective officers, directors, employees, agents, counsel, accountants and
other designees in connection with any steps required to be taken as a part of
their respective obligations under this Agreement, including without limitation:
(a If any claim, action, suit, investigation or other
proceeding by any governmental body or other person is commenced which
questions the validity or legality of the Merger or any of the other
transactions contemplated hereby or seeks damages in connection
therewith, the parties agree to cooperate and use all reasonable
efforts to defend against such claim, action, suit, investigation or
other proceeding and, if an injunction or other order is issued in any
such action, suit or other proceeding, to use all reasonable efforts to
have such injunction or other order lifted, and to cooperate reasonably
regarding any other impediment to the consummation of the transactions
contemplated by this Agreement.
(b Each party shall give prompt written notice to the other of
(i) the occurrence, or failure to occur, of any event which occurrence
or failure would be likely to cause any representation or warranty of
Opticon, Parent or the Merger Subsidiary as the case may be, contained
in this Agreement to be untrue or inaccurate in any material respect at
any time from the date hereof to the Effective Date or that will or may
result in the failure to satisfy the conditions specified in Article 6
or 7 or would constitute either an Opticon Material Adverse Effect or
Parent Material Adverse Effect, and (ii) any failure of Opticon or
Parent, as the case may be, to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it
hereunder.
5.6 PUBLIC ANNOUNCEMENTS. The timing and content of all announcements
regarding any aspect of this Agreement or the Merger to the financial community,
government agencies, employees or the general public shall be mutually agreed
upon in advance (unless Parent or Opticon is advised by counsel that any such
announcement or other disclosure not mutually agreed upon in advance is required
to be made by law and then only after making a reasonable attempt to comply with
the provisions of this Section).
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5.7 NO SOLICITATIONS. (a) From the date hereof until the Effective Date
or until this Agreement is terminated or abandoned as provided in this
Agreement, Opticon shall not directly or indirectly (i) solicit or initiate
discussion with or (ii) enter into negotiations or agreements with, or furnish
any information to, any corporation, partnership, person or other entity or
group (other than an affiliate of Parent or its authorized representatives
pursuant to this Agreement) concerning any proposal for a merger, sale of
substantial assets, sale of shares of stock or securities or other takeover or
business combination transaction (the "Acquisition Proposal") involving Opticon,
and Opticon will instruct its officers, directors, advisors and its financial
and legal representatives and consultants not to take any action contrary to the
foregoing provisions of this sentence; provided, however, that Opticon, its
officers, directors, advisors and its financial and legal representatives and
consultants will not be prohibited from taking any action described in (ii)
above to the extent such action is taken by, or upon the authority of, the Board
of Directors of Opticon in the exercise of good faith judgment as to its
fiduciary duties to the shareholders of Opticon, which judgment is based upon
the advice of independent, outside legal counsel that a failure of the Board of
Directors of Opticon to take such action would be likely to constitute a breach
of its fiduciary duties to such shareholders. Opticon will notify Parent
promptly if Opticon becomes aware that any inquiries or proposals are received
by, any information is requested from or any negotiations or discussions are
sought to be initiated with, Opticon with respect to an Acquisition Proposal,
and Opticon shall promptly deliver to Parent any written inquiries or proposals
received by Opticon relating to an Acquisition Proposal.
ARTICLE 6
CONDITIONS PRECEDENT TO OBLIGATIONS OF OPTICON
Except as may be waived by Opticon, the obligations of Opticon to
consummate the transactions contemplated by this Agreement shall be subject to
the satisfaction on or before the Closing Date of each of the following
conditions:
6.1 COMPLIANCE. Parent and the Merger Subsidiary shall have, or shall
have caused to be, satisfied or complied with and performed in all material
respects all terms, covenants and conditions of this Agreement to be complied
with or performed by them on or before the Closing Date.
6.2 REPRESENTATIONS AND WARRANTIES. All of the representations and
warranties made by Parent and the Merger Subsidiary in this Agreement shall be
true and correct in all material respects at and as of the Closing Date with the
same force and effect as if such representations and warranties had been made at
and as of the Closing Date, except for changes permitted or contemplated by this
Agreement.
6.3 MATERIAL ADVERSE CHANGES. Subsequent to March 31, 1999, there shall
have occurred no Parent Material Adverse Effect other than any such change that
affects both Parent and Opticon in a substantially similar manner.
6.4 CERTIFICATES. Opticon shall have received a certificate or
certificates, executed
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on behalf of Parent by an executive officer of Parent, to the effect that the
conditions contained in Sections 6.1, 6.2 and 6.3 hereof have been satisfied.
6.5 CONSENTS; LITIGATION. Other than the filing of the Certificates of
Merger as described in Article 1, all authorizations, consents, orders or
approvals of, or declarations or filings with, or expirations or terminations of
waiting periods imposed by any governmental entities, and all required
third-party consents, the failure to obtain which would have a Opticon Material
Adverse Effect or an Parent Material Adverse Effect, shall have been obtained.
In addition, no preliminary or permanent injunction or other order shall have
been issued by any court or by any governmental or regulatory agency, body or
authority which prohibits the consummation of the Merger and the transactions
contemplated by this Agreement and which is in effect at the Effective Date.
6.6 DUE DILIGENCE. Opticon shall have completed to its satisfaction a
due diligence investigation, including, but not limited to, a review of the
Parent Financial Statements.
6.7 ACCOUNTING TREATMENT. The transactions contemplated by this
Agreement shall qualify for purchase accounting treatment under generally
accepted accounting principles, and each shall take all necessary action to
ensure such treatment.
6.8 TAX-FREE REORGANIZATION. The shares of Parent Common Stock to be
received by the Opticon stockholders shall be received in connection with a
tax-free reorganization under the Code, and each party shall take all necessary
action to ensure such treatment.
6.9 FINANCING. Parent will have a positive cash balance and will have
no significant liabilities other than those associated with the normal operation
of its business, and Parent will have a positive net worth on a consolidated
basis. In addition, Parent shall have executed an agreement for financing with
one or more investors, in a form and on terms mutually agreeable to the parties,
as described in the Consulting Agreement dated September 21, 1999 between Parent
and World Capital Funding, LLC, and in the Confidential Memorandum dated
September 21, 1999, attached hereto as Schedule 6.9. Such agreement shall be
subject to no material contingency or condition except for the Closing of the
Merger. The financing arranged by Parent will close and be received immediately
following the Closing and shall equal at least $2.25 million, prior to
deductions for fees and expenses involved in the financing.
6.10 STOCKHOLDER APPROVAL; DISSENTING SHARES. This Agreement and the
Merger shall have received the requisite approval of Opticon's stockholders in
accordance with the Iowa Business Corporation Act and the number of shares of
Opticon Stock as to which Dissenter's Rights have been exercised shall not
exceed 5% of the number of outstanding shares of Opticon Stock.
6.11 LEGAL OPINION. At the Closing, Parent shall have furnished Opticon
with an opinion, dated the Closing Date, of counsel to Parent, to the effect
that:
(a) Parent and Merger Subsidiary are each corporations duly
incorporated, validly existing and in good standing under the laws of
the jurisdiction of its incorporation;
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(b) Parent and Merger Subsidiary each has the corporate power
to carry on its businesses as they are being conducted on the Closing
Date; and
(c) Parent and Merger Subsidiary each has taken all required
corporate action to approve and adopt this Agreement and this Agreement
is a valid and binding obligation of Parent and Merger Subsidiary,
enforceable in accordance with its terms, subject to the Enforceability
Exceptions.
In rendering the foregoing opinion, such counsel may rely on certificates of
officers and other agents of Parent and Merger Subsidiary and public officials
as to matters of fact provided such reliance is expressly noted in the opinion
and the certificates of such officers, agents and public officials relied on are
attached to the opinion.
ARTICLE 7
CONDITIONS PRECEDENT TO OBLIGATIONS OF PARENT
AND THE MERGER SUBSIDIARY
Except as may be waived by Parent and the Merger Subsidiary, the
obligations of Parent and the Merger Subsidiary to consummate the transactions
contemplated by this Agreement shall be subject to the satisfaction, on or
before the Closing Date, of each of the following conditions:
7.1 COMPLIANCE. Opticon shall have, or shall have caused to be,
satisfied or complied with and performed in all material respects all terms,
covenants, and conditions of this Agreement to be complied with or performed by
it on or before the Closing Date.
7.2 REPRESENTATIONS AND WARRANTIES. All of the representations and
warranties made by Opticon in this Agreement shall be true and correct in all
material respects at and as of the Closing Date with the same force and effect
as if such representations and warranties had been made at and as of the Closing
Date, except for changes permitted or contemplated by this Agreement.
7.3 MATERIAL ADVERSE CHANGE. Since June 30, 1999, except as set forth
in this Agreement or on the schedules hereto, there shall have occurred no
Opticon Material Adverse Effect other than any such change that affects both
Parent and Opticon in a substantially similar manner.
7.4 CERTIFICATES. Parent shall have received a certificate or
certificates, executed by the and on behalf of Opticon by an executive officer
of Opticon, to the effect that the conditions in Sections 7.1, 7.2 and 7.3
hereof have been satisfied.
7.5 CONSENTS; LITIGATION. Other than the filing of the Certificate of
Merger as described in Article 1, all authorizations, consents, orders or
approvals of, or declarations or filings with, or expirations or terminations of
waiting periods imposed by, any governmental entity, and all required
third-party consents, the failure to obtain which would have an Opticon
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Material Adverse Effect or a Parent Material Adverse Effect, shall have been
obtained. In addition, no preliminary or permanent injunction or other order
shall have been issued by any court or by any governmental or regulatory agency,
body or authority which prohibits the consummation of the Merger and the
transactions contemplated by this Agreement and which is in effect at the
Effective Date.
7.6 DUE DILIGENCE. Parent shall have completed to its satisfaction a
due diligence investigation, including, but not limited to, a review of the
Opticon Financial Statements.
7.7 ACCOUNTING TREATMENT. The transactions contemplated by this
Agreement shall qualify for purchase accounting treatment under generally
accepted accounting principles, and each shall take all necessary action to
ensure such treatment.
7.8 TAX-FREE REORGANIZATION. The shares of Parent Common Stock to be
delivered to the Opticon stockholders shall be delivered in connection with a
tax-free reorganization under the Code, and each party shall take all necessary
action to ensure such treatment.
7.9 STOCKHOLDER APPROVAL; DISSENTING SHARES. This Agreement and the
Merger shall have received the requisite approval of Opticon's stockholders, in
accordance with the Iowa Business Corporation Act, and the number of shares of
Opticon Stock as to which Dissenters Rights have been properly exercised shall
not exceed 5% of the number of outstanding shares of Opticon Stock.
7.10 LEGAL OPINION. At the Closing, Opticon shall have furnished Parent
and Merger Subsidiary with an opinion, dated the Closing Date, of counsel to
Opticon, to the effect that:
(a) Opticon is a corporation duly incorporated, validly
existing and in good standing under the laws of Iowa;
(b) Opticon has the corporate power to carry on its businesses
as they are being conducted on the Closing Date; and
(c) Opticon has taken all required corporate action to approve
and adopt this Agreement and this Agreement is a valid and binding
obligation of Opticon, enforceable in accordance with its terms,
subject to the Enforceability Exceptions.
In rendering the foregoing opinion, such counsel may rely on
certificates of officers and other agents of Opticon and public officials as to
matters of fact provided such reliance is expressly noted in the opinion and the
certificates of such officers, agents and public officials relied on are
attached to the opinion.
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ARTICLE 8
MISCELLANEOUS
8.1 TERMINATION. In addition to the provisions regarding termination
set forth elsewhere herein, this Agreement and the transactions contemplated
hereby may be terminated at any time on or before the Closing Date:
(a by mutual consent of Opticon and Parent;
(b by either Parent or Opticon if the transactions
contemplated by this Agreement have not been consummated by December
31, 1999, subject to an automatic 30 day extension if necessary to
accommodate a special meeting of the shareholders of Parent to approve
certain corporate actions necessary to complete the transactions
contemplated by this Agreement, unless such failure of consummation is
due to the failure of the terminating party to perform or observe the
covenants, agreements, and conditions hereof to be performed or
observed by it at or before the Closing Date; or
(c by either Opticon or Parent if the transactions
contemplated hereby violate any nonappealable final order, decree, or
judgment of any court or governmental body or agency having competent
jurisdiction.
8.2 EXPENSES. If the transactions contemplated by this Agreement are
not consummated and termination is sought under the termination provisions
hereof, each party hereto shall pay its own expenses incurred in connection with
this Agreement and the transactions contemplated hereby. If the transactions
contemplated by this Agreement are not consummated because the representations
and warranties of one party are materially false or misleading, then that party
shall be liable for the expenses, including attorneys fees, of the other party.
8.3 ENTIRE AGREEMENT. This Agreement and the exhibits hereto contain
the complete agreement among the parties with respect to the transactions
contemplated hereby and supersede all prior agreements and understandings among
the parties with respect to such transactions. Section and other headings are
for reference purposes only and shall not affect the interpretation or
construction of this Agreement. The parties hereto have not made any
representation or warranty except as expressly set forth in this Agreement or in
any certificate or schedule delivered pursuant hereto. The obligations of any
party under any agreement executed pursuant to this Agreement shall not be
affected by this section.
8.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of each party contained herein or in any exhibit, certificate,
document or instrument delivered pursuant to this Agreement shall not survive
the Closing, with the express exception of the indemnity agreements between
Parent and the Officers and Directors of Parent which shall continue in full
force and effect indefinitely.
8.5 COUNTERPARTS. This Agreement may be executed in any number of
counterparts,
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each of which when so executed and delivered shall be deemed an original, and
such counterparts together shall constitute only one original.
8.6 NOTICES. All notices, demands, requests, or other communications
that may be or are required to be given, served, or sent by any party to any
other party pursuant to this Agreement shall be in writing and shall be sent by
facsimile transmission, next-day courier or mailed by first-class, registered or
certified mail, return receipt requested, postage prepaid, or transmitted by
hand delivery, addressed as follows:
(a If to Opticon:
Xxxxxxx X. Post, President and Chief Executive Officer
Opticon Medical, Inc.
0000 Xxxx Xxxx Xxxxx 000
Xxxxxx, Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxxxx X. Xxxxx Xx., Esq.
Xxxxxx Xxxxxx Xxxxxx & Xxxxxx, LLP
00 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(b If to Parent or the Merger Subsidiary:
Xxxxxx X. Xxxxxxx
Immune Response, Inc.
0000 Xxxx Xxxxxxxx Xxx.
Xxxxxxxxx, Xxxxxxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
with a copy (which shall not constitute notice) to:
Xxxxxx Xxxxxx, Esq.
Friedlob Xxxxxxxxx Xxxxxx Xxxxxxx & Xxxxxxxxxxx, LLC
0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Each party may designate by notice in writing a new address to which
any notice,
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demand, request, or communication may thereafter be so given, served,
or sent. Each notice, demand, request, or communication that is mailed,
delivered, or transmitted in the manner described above shall be deemed
sufficiently given, served, sent, and received for all purposes at such
time as it is delivered to the addressee (with the return receipt, the
delivery receipt or the affidavit of messenger being deemed conclusive
evidence of such delivery) or at such time as delivery is refused by
the addressee upon presentation.
8.7 SUCCESSORS; ASSIGNMENTS. This Agreement and the rights, interests,
and obligations hereunder shall be binding upon and shall inure to the benefit
of the parties hereto and their respective successors and assigns. Neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned, by operation of law or otherwise, by any of the parties hereto without
the prior written consent of the other.
8.8 GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with the internal laws of the State of Colorado.
8.9 WAIVER AND OTHER ACTION. This Agreement may be amended, modified,
or supplemented only by a written instrument executed by the parties against
which enforcement of the amendment, modification or supplement is sought.
8.10 SEVERABILITY. If any provision of this Agreement is held to be
illegal, invalid, or unenforceable, such provision shall be fully severable, and
this Agreement shall be construed and enforced as if such illegal, invalid, or
unenforceable provision were never a part hereof; the remaining provisions
hereof shall remain in full force and effect and shall not be affected by the
illegal, invalid, or unenforceable provision or by its severance; and in lieu of
such illegal, invalid, or unenforceable provision, there shall be added
automatically as part of this Agreement, a provision as similar in its terms to
such illegal, invalid, or unenforceable provision as may be possible and be
legal, valid, and enforceable.
8.11 MUTUAL CONTRIBUTION. The parties to this Agreement and their
counsel have mutually contributed to its drafting. Consequently, no provision of
this Agreement shall be construed against any party on the ground that such
party drafted the provision or caused it to be drafted or the provision contains
a covenant of such party.
[THE BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK]
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SIGNATURES
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
Opticon Medical, Inc.
By: /s/ XXXXXXX X. POST
-------------------
Name: Xxxxxxx X. Post
Title: President and Chief Executive Officer
Immune Response, Inc.
By: /s/ XXXXXX X. XXXXXXX
---------------------
Name: Xxxxxx X. Xxxxxxx
Title: President and Chief Executive Officer
Opticon Acquisition Corporation
By: /s/ XXXXXX X. XXXXXXX
---------------------
Name: Xxxxxx X. Xxxxxxx
Title: President and Chief Executive Officer
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LIST OF SCHEDULES
Schedule 2.3 Opticon Convertible Securities
Schedule 3.11 Absence of Certain Changes
Schedule 3.14 Material Contracts
Schedule 3.17 Licenses and Permits
Schedule 3.19 Employment Agreements
Schedule 3.20(b) Intellectual Property Transgressions
Schedule 3.20(c) Patents
Schedule 3.20(d) Intellectual Property Licenses
Schedule 3.22 Property and Related Matters
Schedule 3.24 Material Interests
Schedule 3.25 Opticon Registration Obligations
Schedule 4.10 Absence of Certain Changes
Schedule 4.16 Employment Agreements; Labor Relations
Schedule 5.2(i) Parent Indebtedness
Schedule 5.2(n) Parent Transactions
Schedule 6.9 Consulting Agreement
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