EXHIBIT 10.8
MERGER AGREEMENT AND
PLAN OF REORGANIZATION
BY AND AMONG
CTI, INC.
CTI / PETNET MERGER CORP., AND
X.X.X.XXX PHARMACEUTICAL SERVICES, INC.,
This MERGER AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement"), is
made and entered into this 10th day of October 2000, by and among CTI, INC., a
Tennessee corporation ("CTI"), CTI / PETNET MERGER CORP., a Tennessee
corporation ("Merger Corp"), and X.X.X.XXX PHARMACEUTICAL SERVICES, INC., a
Tennessee corporation ("X.X.X.Xxx").
RECITALS:
A. The parties hereto wish to provide for the merger of X.X.X.Xxx
with and into Merger Corp (the "Merger"), pursuant to which Merger Corp will be
the surviving entity, upon the terms and conditions set forth in the Plan of
Merger attached hereto as EXHIBIT A (the "Plan of Merger") and the terms and
conditions set forth herein.
B. CTI, Merger Corp and X.X.X.Xxx intend that the Merger qualify
and be treated as a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended.
AGREEMENT:
IN CONSIDERATION OF the foregoing recitals and the mutual agreements
contained herein, the parties hereto agree as follows:
1. MERGER.
(a) Subject to, and upon, the terms and conditions set
forth in this Agreement, the parties hereto agree to effect the Merger of
X.X.X.Xxx with and into Merger Corp in accordance with the Tennessee Business
Corporation Act (the "Tennessee Corporation Act").
(b) At the Effective Date (as defined below), X.X.X.Xxx
shall be merged with and into Merger Corp and the separate existence of
X.X.X.Xxx shall thereupon cease. Merger Corp shall be the surviving entity of
the Merger. Merger Corp, with all its purposes, objects, rights, privileges,
powers and franchises, shall continue unaffected and unimpaired by the Merger.
(c) The Merger has been approved by (i) the Board of
Directors of CTI, (ii) the Board of Directors of Merger Corp, and (iii) the
Board of Directors of X.X.X.Xxx. Upon the execution and delivery of this
Agreement, the Merger will be submitted to the shareholders of X.X.X.Xxx for
approval. Upon approval of the Merger by the shareholders of X.X.X.Xxx as
provided in SECTION 6, Merger Corp and X.X.X.Xxx will prepare, execute and file
(i) Articles of Merger under the Tennessee Corporation Act in the form attached
hereto as EXHIBIT B, to be filed with the Secretary of State of the State of
Tennessee; (ii) and the Plan of Mercer to be attached to and filed with the said
Articles of Merger. The Merger shall be effective upon the filing of such
Articles of Merger with the Secretary of State of the State of Tennessee, or at
such time thereafter as may be provided in the said Articles of Merger (the
"Effective Date").
2. EFFECT OF MERGER.
(a) At the Effective Date, X.X.X.Xxx shall be merged with
and into Merger Corp, and the separate existence of X.X.X.Xxx shall thereupon
cease. Merger Corp shall be the surviving entity. The existence of Merger Corp.
with all its purposes, objects, rights, privileges, powers and franchises, shall
continue unaffected and unimpaired by the Merger.
(b) All property, privileges, and powers of X.X.X.Xxx
shall be vested in Merger Corp without reversion or impairment.
(c) All liabilities, debts, obligations and duties of
X.X.X.Xxx shall be vested in Merger Corp, and Merger Corp shall after the
Effective Date be responsible for all such liabilities, debts, obligations and
duties.
(d) Any proceeding pending by or against X.X.X.Xxx may be
continued as if the Merger did not occur, or Merger Corp, as the surviving
entity, may be substituted in the proceeding for X.X.X.Xxx.
(e) Except as provided in SECTION 2(F) below, the charter
and bylaws of Merger Corp as existing and constituted immediately prior to the
Effective Date shall remain, be and constitute the charter and bylaws of Merger
Corp, as the surviving entity.
(f) The name of Merger Corp, as the surviving entity,
shall as a result of the Merger be changed to X.X.X.Xxx Pharmaceuticals, Inc.
(g) If, at any time after the Effective Date-Merger Corp
shall consider or be advised that any deeds, bills of sale, assignments,
assurances or any other actions or things are necessary or desirable to vest,
perfect or confirm of record or otherwise in Mercer Corp its right, title or
interest in, to or under any of the rights, properties or assets of X.X.X.Xxx
acquired or to be acquired by Merger Corp as a result of, or in connection with,
the Merger or to otherwise carry out this Agreement,
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the officers of Merger Corp, or any one of them, shall and will be authorized to
execute and deliver, in the name and on behalf of the parties hereto or
otherwise, all such deeds, bills of sale, assignments and assurances and to take
and do, in the name and on behalf of the parties hereto or otherwise, all such
other actions and things as may be necessary or desirable to vest, perfect or
confirm any and all right, title and interest in, to and under such rights,
properties or assets in Merger Corp or to otherwise carry out this Agreement.
3. CONVERSION OF SHARES. All of the outstanding shares of stock
of X.X.X.Xxx shall be exchanged for and converted into shares of CTI, except as
provided below. The manner and basis of converting all outstanding shares of
stock of X.X.X.Xxx into shares of stock of CTI shall be as set forth in this
SECTION 3. As a result of the Merger, CTI common stock will be issued to the
shareholders of X.X.X.Xxx, as provided below.
(a) As of the Effective Date, by virtue of the Merger,
and without any action on the part of CTI, Merger Corp., X.X.X.Xxx or any
shareholder of X.X.X.Xxx, each then issued and outstanding share of stock of
X.X.X.Xxx will be canceled and retired and converted into common stock of CTI as
follows:
(i) The current shareholders of X.X.X.Xxx and
their X.X.X.Xxx shares are as set forth on SCHEDULE 3(A)(I) attached hereto. The
issued and outstanding shares of stock of X.X.X.Xxx, except for the X.X.X.Xxx
shares held by CTI, CTI Services, Inc. and Dissenting Shareholders (as defined
in SECTION 4), shall be converted into shares of common stock of CTI on the
basis of 3.6875 shares of X.X.X.Xxx common stock for one (1) share of CTI common
stock.
(ii) The current participants under the X.X.X.Xxx
Amended and Restated Long-Term Incentive Plan who have the right to receive
common stock in X.X.X.Xxx in the event of a merger in which X.X.X.Xxx is not the
surviving entity ("Capital Event Stock") are as set forth on SCHEDULE 3(A)(II).
The shares of Capital Event Stock shall be converted into shares of common stock
of CTI on the basis of 3.6875 shares of Capital Event Stock for one (1) share of
CTI common stock.
(iii) All common and preferred shares of X.X.X.Xxx
stock and all warrants held by CTI and CTI Services, Inc. prior to the Merger
shall be canceled and shall cease to exist from and after the Effective Date.
(b) Prior to the date of this Agreement, X.X.X.Xxx made a
commitment to issue stock options in X.X.X.Xxx to certain of its employees,
officers and directors (the "Employee Stock Options") under the X.X.X.Xxx
Amended and Restated Long-Term Incentive Plan as set forth on SCHEDULE 3(B). As
a result of the Merger, the Employee Stock Options will be canceled and
converted into the right to be issued fully vested stock options to acquire CTI
common stock ("CTI Stock Options") based on the same conversion ratio set forth
above in SECTION 3(A)(I) and 3(A)(II). The exercise price for the CTI Stock
Options shall equal $5.63 per share of
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CTI common stock. The CTI Stock Options shall be exercisable into whole shares
of CTI common stock only. No fractional shares of CTI common stock shall be
issued upon the exercise of a CTI Stock Option, and no credit will be given to a
fractional share that may result from the conversion ratio between Employee
Stock Options and CTI Stock Options. Following the Effective Date and completion
of all legal compliance, CTI shall deliver to each holder of Employee Stock
Options as set forth on SCHEDULE 3(B) a CTI Stock Option pursuant to the CTI
Stock Option Plan on terms and conditions consistent with this Agreement.
(c) Following the Effective Date, Merger Corp shall
deliver to each shareholder of X.X.X.Xxx and each holder of Capital Event Stock
entitled thereto one or more certificates representing the shares of common
stock of CTI to which such shareholder and holder of Capital Event Stock is
entitled. The CTI common stock certificates shall be promptly delivered after
the X.X.X.Xxx shareholder or holder of Capital Event Stock has delivered his
certificates of X.X.X.Xxx stock or Grant Agreements to Capital Event Stock to
Merger Corp for cancellation. Pending the delivery of the X.X.X.Xxx stock
certificates by a X.X.X.Xxx shareholder or the Grant Agreement by a holder of
Capital Event Stock after the Effective Date, such X.X.X.Xxx stock and Capital
Event Stock shall represent shares of common stock in CTI, in which it has been
converted as a part of the Merger.
(d) Following the Merger, CTI shall hold all issued and
outstanding shares of stock of Merger Corp.
(e) Fractional shares of CTI common stock will not be
issued. Each holder of X.X.X.Xxx and each holder of Capital Event Stock eligible
to receive a fractional interest in a share of CTI common stock shall receive a
cash distribution in lieu of such fractional share in the amount obtained by
multiplying such fraction by $5.63. No interest shall be payable with respect to
payment of such cash distribution.
(f) The shares of CTI common stock received by the
X.X.X.Xxx shareholders and holders of Capital Event Stock pursuant to the Merger
and the shares of CTI common stock received by holders of Employee Stock Options
upon the exercise of CTI Stock Options after the Merger shall be subject to the
transfer restrictions set forth on EXHIBIT C, and the holders of shares of CTI
common stock received pursuant to the Merger or upon the exercise of CTI Stock
Options after the Merger shall be subject to the non-competition restrictions
set forth on EXHIBIT C. The CTI shares of common stock received by the X.X.X.Xxx
shareholders and holders of Capital Event Stock pursuant to the Merger and the
shares of CTI common stock received by holders of Employee Stock Options upon
the exercise of CTI Stock Options after the Merger shall bear a legend
reflecting the transfer restrictions set forth on EXHIBIT C. Said transfer and
non-competition restrictions shall, at CTI's option, be reflected in either or
both (i) the Bylaws of CTI to be in effect as of the Effective Date and (ii) in
an agreement executed by the X.X.X.Xxx shareholders and holders of Capital Event
Stock as a condition to receiving their shares of CTI common stock pursuant to
the Merger and in an agreement executed by the holder of Employee
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Stock Options as a condition to receiving shares of CTI common stock upon the
exercise of CTI Stock Options after the Merger.
4. DISSENTING SHAREHOLDERS. Notwithstanding anything to the
contrary contained in this Agreement, holders of shares of P.E..X.Xxx stock with
respect to which dissenters' rights, if any, are granted by reason of the Merger
under the Tennessee Corporation Act and who do not vote in favor of the Merger
and otherwise comply with the Tennessee Corporation Act ("Dissenting
Shareholders"), shall not be entitled to shares of CTI stock pursuant to SECTION
3, unless and until the Dissenting Shareholder shall have failed to perfect
or-shall have effectively withdrawn or lost his right to dissent from the Merger
under the Tennessee Corporation Act, and shall be entitled to receive only the
payment provided for pursuant to the Tennessee Corporation Act. If any such
Dissenting Shareholder shall have failed to perfect or shall have effectively
withdrawn or lost his dissenters' rights under the Tennessee Corporation Act,
such Dissenting Shareholder's X.X.X.Xxx stock shall thereupon be deemed to have
been automatically converted into, as of the Effective Date, CTI common stock
pursuant to SECTION 3.
5. THE SURVIVING ENTITY. None of the issued and outstanding
shares of stock of Merger Corp shall be converted as a result of the Merger. All
such shares shall remain issued and outstanding shares of common stock of Merger
Corp, as the surviving entity of the Merger. The board of directors and officers
of X.X.X.Xxx immediately prior to the Effective Date shall become the board of
directors and officers of Merger Corp immediately after the Effective Date.
6. APPROVAL OF SHAREHOLDERS. This Agreement shall be submitted to
the shareholders of X.X.X.Xxx as provided by the Tennessee Corporation Act at a
meeting called for that purpose. There shall be required for the adoption of
this Agreement the affirmative vote of the holders of at least a majority of all
the shares of X.X.X.Xxx stock issued and outstanding and entitled to vote.
Furthermore, unless otherwise agreed to by CTI in writing, X.X.X.Xxx
shareholders holding at least ninety percent (90%) of the number of shares of
X.X.X.Xxx common stock shall not have dissented to the Merger and X.X.X.Xxx
shall not have or be required to transfer ten percent (10%) or more of the fair
market value of its net assets or thirty percent (30%) or more of the fair
market value of its gross assets to third parties, including dissenting
shareholders, prior to or as a result of the Merger.
7. REPRESENTATIONS AND WARRANTIES OF X.X.X.XXX. X.X.X.Xxx
represents and warrants that:
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(a) CORPORATE ORGANIZATION AND GOOD STANDING. X.X.X.Xxx
is a corporation duly organized, validly existing, and in good standing under
the laws of the State of Tennessee, and is qualified to do business as a foreign
corporation in each jurisdiction, if any, in which its property or business
requires such qualification.
(b) CAPITALIZATION. X.X.X.Xxx's authorized capital stock
consists of 25,000,000 shares of common stock and 25,000,000 shares of preferred
stock, of which 14,941,355 shares of common stock and 2,222,222 shares of
preferred stock are issued and outstanding, fully paid and nonassessable. There
are no options, warrants, or rights outstanding to purchase shares of X.X.X.Xxx
capital stock, except for (i) the warrant held by CTI to purchase 2,810,315
shares of common stock, (ii) 1,005,121 shares of Capital Event Stock held by
participants under the X.X.X.Xxx Amended and Restated Long-Term Incentive Plan,
and (iii) employee stock options to acquire up to 1,502,282 shares of X.X.X.Xxx
common stock, which has been agreed to by the X.X.X.Xxx board of directors but
which X.X.X.Xxx has not yet granted to its employees.
(c) SUBSIDIARIES. X.X.X.Xxx has no subsidiaries.
(d) FINANCIAL STATEMENTS. X.X.X.Xxx's audited financial
statements as of September 30, 1999, with related balance sheets and statements
of income and retained earnings for the period then ended, and the unaudited
financial statements, with related balance sheets and statements of income and
retained earnings for the period ended June 30, 2000, copies of which have been
delivered by X.X.X.Xxx to CTI, fairly present the financial condition of
X.X.X.Xxx as of said dates and the results of its operations for the periods
then ended, in conformity with generally accepted accounting principles
consistently applied for the periods covered.
(e) ABSENCE OF UNDISCLOSED LIABILITIES. Except to the
extent reflected or reserved against in X.X.X.Xxx's balance sheet as of June 30,
2000, X.X.X.Xxx did not have at that date any liabilities or obligations
(secured, unsecured, contingent, or otherwise) of a nature customarily reflected
in a corporate balance sheet prepared in accordance with generally accepted
accounting principles.
(f) ABSENCE OF CERTAIN CHANGES. Except as heretofore
disclosed in writing by X.X.X.Xxx to CTI, there has been no material adverse
change in the business, properties, financial condition or net worth of
X.X.X.Xxx since June 30, 2000.
(g) LITIGATION, AND SO FORTH. Except as heretofore
disclosed in writing by X.X.X.Xxx to CTI, there is no litigation, proceeding, or
investigation pending or, to the knowledge of X.X.X.Xxx, threatened against
X.X.X.Xxx that, if successful, might result in a material adverse change in the
business, properties, or financial condition of X.X.X.Xxx.
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(h) CONTRACTS. Except as heretofore disclosed in writing
by X.X.X.Xxx to CTI, X.X.X.Xxx is not a party to any material contract not in
the ordinary course of business that is to be performed in whole or in part at
or after the date of this Agreement.
(i) TITLE. X.X.X.Xxx has good and marketable title to all
the real property and good and valid title to all other property included in the
balance sheet of X.X.X.Xxx as of June 30, 2000, other than property disposed of
in the ordinary course of business after said date. Except as heretofore
disclosed in writing by X.X.X.Xxx to CTI, the properties of X.X.X.Xxx are not
subject to any mortgage, encumbrance, or lien of any kind except minor
encumbrances that do not materially interfere with the use of the property in
the conduct of the business of X.X.X.Xxx.
(j) TAX RETURNS. Except as heretofore disclosed in
writing by X.X.X.Xxx to CTI, the provisions for federal and state taxes
reflected in the financial, statements referred to in SECTION 7(D) hereof are
adequate to cover any such taxes that may be assessed against X.X.X.Xxx in
respect of its business and its operations during the periods covered by said
financial statements and all prior periods.
(k) NO VIOLATION. Consummation of the Merger will not
constitute or result in a breach or default under any provision of any charter,
bylaw, indenture, mortgage, lease, or agreement, or any order, judgment, decree,
law, or regulation to which any property of X.X.X.Xxx is subject or by which
X.X.X.Xxx is bound, except for breaches or defaults that in the aggregate would
not have a materially adverse effect on X.X.X.Xxx's properties, business
operations, or financial condition.
(1) AUTHORIZATION. Execution of this Agreement has been
duly authorized and approved by X.X.X.Xxx's board of directors.
(m) STATEMENTS TRUE AND CORRECT. None of the information
prepared by or provided by X.X.X.Xxx regarding X.X.X.Xxx which is included or to
be included in the Private Offering Memorandum and Proxy Statement to be mailed
to the X.X.X.Xxx shareholders in connection with the shareholders' meeting to
vote on the Merger, and any other documents to be filed with the Securities and
Exchange Commission or any other regulatory authority in connection with the
transaction contemplated herein, will, at the respective times such documents
are filed, and, with respect to the Private Offering Memorandum and Proxy
Statement when first mailed to the X.X.X.Xxx shareholders be false or misleading
with respect to any material fact or omit to state any material fact necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading, or, in the case of the Private Offering Memorandum
and Proxy Statement or any amendment thereof or supplement thereto, at the time
of the shareholders' meeting, be false or misleading with respect to any
material fact, or omit to state any material fact necessary to correct any
statement in any earlier communication with respect to the solicitation of any
proxy for the shareholders' meeting.
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8. REPRESENTATIONS AND WARRANTIES OF CTI. CTI represents and
warrants that:
(a) CORPORATE ORGANIZATION AND GOOD STANDING. CTI is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Tennessee, and is qualified to do business as a foreign
corporation in each jurisdiction, if any, in which its property or business
requires such qualification.
(b) CAPITALIZATION. CTI's authorized capital stock
consists of 30,000,000 shares of common stock and 1,000,000 shares of preferred
stock, of which 17,209,884 shares of common stock, 400,000 shares of Series A
redeemable preferred stock and 200,000 shares of Series B convertible preferred
stock are issued and outstanding, fully paid and nonassessable. There are no
options, warrants, or rights outstanding to purchase shares of CTI capital stock
from CTI, except for (i) warrants and other rights held by First Union Capital
Partners, Inc. and (ii) qualified or non-qualified stock options which were
granted to employees of CTI by CTI's Stock Option Committee.
(c) FINANCIAL STATEMENTS. CTI's audited financial
statements as of September 30, 1999, with related balance sheets and statements
of income and retained earnings for the period then ended, and the unaudited
financial statements, with related balance sheets and statements of income and
retained earnings for the period ended June 30, 2000, copies of which have been
delivered by CTI to X.X.X.Xxx, fairly present the financial condition of CTI as
of said dates and the results of its operations for the periods then ended, in
conformity with generally accepted accounting principles consistently applied
for the periods covered.
(d) ABSENCE OF UNDISCLOSED LIABILITIES. Except to the
extent reflected or reserved against in CTI's balance sheet as of June 30, 2000,
CTI did not have at that date any liabilities or obligations (secured,
unsecured, contingent, or otherwise) of a nature customarily reflected in a
corporate balance sheet prepared in accordance with generally accepted
accounting principles.
(e) ABSENCE OF CERTAIN CHANGES. Except as heretofore
disclosed in writing by CTI to X.X.X.Xxx, there has been no material adverse
change in the business, properties, financial condition or net worth of CTI
since June 30, 2000.
(f) LITIGATION, AND SO FORTH. Except as heretofore
disclosed in writing by CTI to X.X.X.Xxx, there is no litigation, proceeding, or
investigation pending or, to the knowledge of CTI, threatened against CTI that,
if successful, might result in a material adverse change in the business,
properties, or financial condition of CTI.
(g) CONTRACTS. Except as heretofore disclosed in writing
by CTI to X.X.X.Xxx, CTI is not a party to any material contract not in the
ordinary course of business that is to be performed in whole or in part at or
after the date of this Agreement.
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(h) TITLE. CTI has good and marketable title to all the
real property and good and valid title to all other property included in the
balance sheet of CTI as of June 30, 2000, other than property disposed of in the
ordinary course of business after said date. Except as heretofore disclosed in
writing by CTI to X.X.X.Xxx, the properties of CTI are not subject to any
mortgage, encumbrance, or lien of any kind except minor encumbrances that do not
materially interfere with the use of the property in the conduct of the business
of CTI.
(i) TAX RETURNS. Except as heretofore disclosed in
writing by X.X.X.Xxx to CTI, the provisions for federal and state taxes
reflected in the financial statements referred to in SECTION 8(C) hereof are
adequate to cover any such taxes that may be assessed against CTI in respect of
its business and its operations during the periods covered by said financial
statements and all prior periods.
(j) NO VIOLATION. Consummation of the Merger will not
constitute or result in a breach or default under any provision of any charter,
bylaw, indenture, mortgage, lease, or agreement, or any order, judgment, decree,
law, or regulation to which any property of CTI is subject or by which CTI is
bound, except for breaches or defaults that in the aggregate would not have a
materially adverse effect on CTI's properties, business operations, or financial
condition.
(k) AUTHORIZATION. Execution of this Agreement has been
duly authorized and approved by CTI's board of directors.
9. CONDUCT OF X.X.X.XXX PENDING THE EFFECTIVE DATE. X.X.X.Xxx
covenants that between the date of this Agreement and the Effective Date:
(a) CHARTER AND BYLAWS. No change will be made in
X.X.X.Xxx's charter or bylaws.
(b) CAPITALIZATION, AND SO FORTH. X.X.X.Xxx will not make
any change in its authorized or issued capital stock, declare or pay any
dividend or other distribution, or issue, encumber, purchase, or otherwise
acquire any of its capital stock.
(c) SHAREHOLDERS' MEETING. The X.X.X.Xxx board of
directors will submit this Agreement to the shareholders of X.X.X.Xxx at a
meeting as contemplated by SECTION 6.
(d) PRIVATE OFFERING MEMORANDUM AND PROXY STATEMENT. In
connection with the shareholders' meeting contemplated by SECTION 6, X.X.X.Xxx
shall (i) assist CTI in the preparation of a Private Offering Memorandum and
Proxy Statement to be delivered to the X.X.X.Xxx shareholders; (ii) mail or
cause to be mailed such Private Offering Memorandum and Proxy Statement to its
shareholders; and (iii) furnish CTI with all information concerning X.X.X.Xxx
that CTI may reasonably request in connection with the preparation of the
Private Offering Memorandum and Proxy Statement.
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(e) CONDUCT OF BUSINESS. X.X.X.Xxx will use its best
efforts to maintain and preserve its business organization, employee
relationships, and goodwill intact, and will not, without the written consent of
CTI, enter into any material commitment except in the ordinary course of
business or increase, directly or indirectly, the compensation of any officer or
employee whose annual rate of compensation after the increase will exceed
$20,000.
10. CONDUCT OF CTI PENDING THE EFFECTIVE DATE. CTI covenants that
between the date of this Agreement and the Effective Date:
(a) CHARTER AND BYLAWS. No change will be made in CTI's
charter or bylaws except as contemplated herein.
(b) CAPITALIZATION, AND SO FORTH. Without X.X.X.Xxx's
prior consent, CTI will make no change in its authorized or issued capital
stock, declare or pay any dividend or other distribution, or issue, encumber,
purchase, or otherwise acquire any of its capital stock.
(c) CONDUCT OF BUSINESS. CTI will use its best efforts to
maintain and preserve its business organization, employee relationships, and
goodwill intact, and will not, without the written consent of X.X.X.Xxx, enter
into any material commitment except in the ordinary course of business.
11. CONDITIONS PRECEDENT TO OBLIGATION OF X.X.X.XXX. X.X.X.Xxx's
obligation to consummate the Merger shall be subject to fulfillment on or before
the Effective Date of each of the following conditions, unless waived in writing
by X.X.X.Xxx:
(a) CTI'S REPRESENTATIONS AND WARRANTIES. The
representations and warranties of CTI set forth in SECTION 8 hereof shall be
true and correct at the Effective Date as though made at and as of that date,
except as affected by transactions contemplated hereby.
(b) CTI'S COVENANTS. CTI shall have performed all
covenants required by this Agreement to be performed by it on or before the
Effective Date.
(c) SHAREHOLDER APPROVAL. This Agreement shall have been
adopted by the necessary vote of the holders of P:X.X.Xxx stock entitled to vote
as set forth in SECTION 6 hereof.
(d) OPINION OF CTI'S COUNSEL. CTI shall have delivered to
X.X.X.Xxx the opinion of its counsel, prior to the Effective Date, in form and
substance satisfactory to counsel for X.X.X.Xxx, to the effect that:
(i) CTI is a corporation duly organized, validly
existing, and in good standing, and is duly qualified to do business as a
foreign corporation in each
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jurisdiction (if any) in which, to the best knowledge of counsel, its property
or business requires such qualification.
(ii) CTI's authorized capital stock is as set
forth in SECTION 8(B) hereof.
(iii) The execution and consummation of this
Agreement have been duly authorized and approved by CTI's board of directors,
and consummation of this Agreement will not constitute or result in any breach
or default of the character described in SECTION 8(J) hereof of which counsel
has knowledge.
(iv) Counsel has no knowledge of any liabilities
or obligations of the type described in SECTION 8(D) hereof; any litigation,
proceeding, or investigation of the type described in SECTION 8(F) hereof; or
any defects in title or mortgages, encumbrances, or liens of the type described
in SECTION 8(H) hereof.
(v) The shares of CTI common stock into which
X.X.X.Xxx common stock is to be converted pursuant to this Agreement will, upon
such conversion, be duly and validly authorized and issued, and will be fully
paid and nonassessable.
(e) OFFICER'S CERTIFICATE. Prior to execution of the Plan
of Merger, CTI shall deliver to X.X.X.Xxx an Officer's Certificate providing
that (i) each of the representations and warranties contained in SECTION 8 is
true and correct; (ii) all covenants contained in SECTION 10 have been performed
or satisfied; and (iii) there has been no material adverse chance in the
financial condition or net worth of CTI since June 30, 2000.
(f) PROXY INFORMATION. None of the information with
respect to CTI that shall have been furnished by or on behalf of CTI for
inclusion in the proxy solicitation material sent to the shareholders of
X.X.X.Xxx in connection with the meeting of such shareholders to be held in
accordance with SECTION 6 hereof shall be false or, misleading in any material
respect or shall fail to state any fact necessary to make the statements therein
not false or misleading in any material respect.
12. CONDITIONS PRECEDENT TO OBLIGATION OF CTI. CTI's obligation to
consummate the Merger shall be subject to fulfillment on or before the Effective
Date of each of the following conditions, unless waived in writing by CTI:
(a) X.X.X.XXX'S REPRESENTATIONS AND WARRANTIES. The
representations and warranties of X.X.X.Xxx set forth in SECTION 7 hereof shall
be true and correct at the Effective Date as though made at and as of that date,
except as affected by transactions contemplated hereby.
(b) X.X.X.XXX'S COVENANTS. X.X.X.Xxx shall have performed
all covenants required by this Agreement to be performed by it on or before the
Effective Date.
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(c) SHAREHOLDER APPROVAL. This Agreement shall have been
adopted by the necessary vote of the holders of X.X.X.Xxx stock entitled to vote
asset forth in SECTION 6 hereof.
(d) DISSENTING SHAREHOLDERS OF X.X.X.XXX. Unless
otherwise agreed to by CTI in writing, (i) the number of shares of common stock
of X.X.X.Xxx with respect to which objections to the Merger and demands for
payment of the fair value thereof shall have been made in accordance with the
Tennessee Corporation Act,, and with respect to which such demands shall not
have been withdrawn, shall not exceed ten percent (10%) of the number of shares
entitled to object and make such demand; and (ii) X.X.X.Xxx shall not have or be
required to transfer ten percent (10%) or more of the fair market value of, its
net assets or thirty percent (30%) or more of the fair market value of its gross
assets to third parties, including dissenting shareholders, prior to or as a
result of the Merger.
(e) OPINION OF X.X.X.XXX'S COUNSEL. X.X.X.Xxx shall have
delivered to CTI the opinion of its counsel, prior to the Effective Date, in
form and substance satisfactory to counsel for CTI, to the effect that:
(i) X.X.X.Xxx is a corporation duly organized,
validly existing, and in good standing, and is duly qualified to do business as
a foreign corporation in each jurisdiction (if any) in which, to the best
knowledge of counsel, its property or business requires such qualification.
(ii) X.X.X.Xxx's authorized capital stock is as
set forth in SECTION 7(B) hereof.
(iii) The execution and consummation of this
Agreement have been duly authorized and approved by X.X.X.Xxx's board of
directors and shareholders, and consummation; of this Agreement will not
constitute or result in any breach or default of the character described in
SECTION 7(K) hereof of which counsel has knowledge.
(iv) Counsel has no knowledge of any liabilities
or obligations of the type described in SECTION 7(E) hereof; any litigation,
proceeding, or investigation of the type described in SECTION 7(G) hereof; or
any defects in title or mortgages, encumbrances, or liens of the type described
in SECTION 7(I) hereof.
(v) Counsel has no knowledge of any options,
warrants, or rights to acquire shares of X.X.X.Xxx common stock except those
held by CTI, CTI Services, Inc. or participants under the X.X.X.Xxx Amended and
Restated Long-Term Incentive Plan.
(f) OFFICER'S CERTIFICATE. Prior to execution of the Plan
of Merger, X.X.X.Xxx shall deliver to CTI an Officer's Certificate providing
that (i) each of the representations and warranties contained in SECTION 7 is
true and correct; (ii) all
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covenants contained in SECTION 9 have been performed or satisfied; and (iii)
there has been no material adverse change in the financial condition or net
worth of X.X.X.Xxx since June 30, 2000.
(g) EFFECTIVE DATE. Approval of the Merger by the
shareholders of X.X.X.Xxx and the filing of Articles of Merger with the
Secretary of State of Tennessee effectuating the Merger shall have occurred on
or before October 30, 2000.
13. ACCESS. From the date hereof to the Effective Date, CTI, and
X.X.X.Xxx shall provide each other with such information and permit each other's
officers and representatives such access to its properties and books and records
as the other may from time to time reasonably request. If the Merger is not
consummated, all documents received in connection with this Agreement shall be
returned to the party furnishing the same; and all information so received by
X.X.X.Xxx shall be treated as confidential; all information so received by CTI
shall be treated by CTI in accordance with its current rights and duties as
holder of a majority of the outstanding shares of capital stock of X.X.X.Xxx.
14. SECURITIES LAW COMPLIANCE. CTI will take such action required
to be taken under applicable securities laws and CTI will also take such action
to secure all necessary exemptions or clearances under all securities laws
applicable to (i) the Merger and (ii) the issuance of CTI common stock pursuant
thereto. CTI will promptly deliver to X.X.X.Xxx copies of any filings made by
CTI or Merger Corp pursuant to this Section.
15. THIRD PARTY CONSENTS. Each party to this Agreement shall use
its best efforts to obtain, as soon as reasonably practicable; all permits,
authorizations, consents, waivers and approvals from third parties or
governmental authorities necessary to consummate this Agreement and the
transactions contemplated hereby, including,, without limitation, any permits,
authorizations, consents, waivers and approvals required in connection with the
Merger.
16. TERMINATION.
(a) CIRCUMSTANCES OF TERMINATION. This Agreement may be
terminated (notwithstanding approval by the shareholders of X.X.X.Xxx):
(i) By the mutual consent in writing of the
boards of directors of X.X.X.Xxx and CTI.
(ii) By the board of directors of X.X.X.Xxx if
any condition provided in SECTION 11 hereof has not been satisfied or waived on
or before the Effective Date.
(iii) By the board of directors of CTI if any
condition provided in SECTION 12 hereof has not been satisfied or waived on or
before the Effective Date.
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(iv) By the board of directors of CTI if the
Effective Date has not occurred by October 30, 2000.
(b) EFFECT OF TERMINATION. In the event of a termination
of this Agreement pursuant to SECTION 16(A) hereof, each party shall pay the
costs and expenses incurred by it in connection with this Agreement and no party
(or any of its officers, directors, and shareholders) shall be liable to any
other party for any costs, expenses, damage, or loss of anticipated profits
hereunder.
17. GENERAL PROVISIONS.
(a) ENTIRE AGREEMENT. This Agreement (including the
exhibits hereto and any other documents or instruments referred to herein)
constitutes the entire agreement, and supersedes all prior agreements and
undertakings, both oral and written, among the parties with respect to the
subject matter hereof.
(b) NO THIRD-PARTY BENEFICIARIES. This Agreement is not
intended to confer upon any person other than the parties hereto any rights or
remedies hereunder.
(c) AMENDMENTS. This Agreement may not be amended except
by an instrument in writing signed by each of the parties hereto.
(d) GOVERNING LAW. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Tennessee.
(e) RESOLUTION OF DISPUTES. Any dispute, controversy or
claim arising out of or relating to this Agreement shall be resolved by binding
arbitration before a single arbitrator held in Knoxville, Tennessee in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association then in effect. The arbitrator shall resolve the dispute as
expeditiously as practicable. The decision of the arbitrator shall be final,
binding and not appealable. The arbitrator shall have the authority to award
relief under legal or equitable principles, including interim or preliminary
relief, and to allocate responsibility for the costs of the arbitration.
Judgment upon the award rendered by the arbitrator may be entered in any court
having jurisdiction.
(f) WAIVER OF COMPLIANCE. Any failure by any party to
this Agreement to comply with any obligation, covenant, agreement, or condition
contained herein may be expressly waived in writing by the other parties hereto,
but such waiver to failure to insist upon strict compliance shall not operate as
a waiver of, or estoppel with respect to any subsequent or other failure.
(g) ASSIGNMENT. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit to the parties hereto and
their respective successors and permitted assigns, but neither this Agreement
nor any of the rights, interests, or obligations hereunder shall be assigned by
any of the parties hereto without the prior written consent of all the other
parties.
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(h) COUNTERPARTS. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
(i) SEVERABILITY. If any term or provision of this
Agreement is determined to be invalid, illegal or incapable of being enforced,
all other conditions and provisions hereof will nevertheless remain in full
force and effect so long as the economic substance of the transactions
contemplated hereby is not affected in any manner adverse to any party hereto.
(j) FURTHER ASSURANCES. Each of the parties hereto agrees
that after the Effective Date it will from time to time, upon the reasonable
request of another party hereto, take such further action as the other may
reasonably request to carry out the transactions contemplated by this Agreement,
including, without limitation, the execution and delivery of all further
evidences and instruments of transfer and assignment.
(k) EFFECTIVENESS. This Agreement shall have no force or
effect whatsoever unless and until the same shall have been executed and
delivered by each of the parties hereto.
IN WITNESS WHEREOF, the parties thereto have duly executed this
Agreement as of the date first above written.
CTI, INC.
By: /s/Xxxxx X. Xxxxxxxx
--------------------------------------------
Xxxxx X. Xxxxxxxx
President
CTI/X.X.X.XXX MERGER CORP
By: /s/Xxxxx X. Xxxxxxxx
--------------------------------------------
Xxxxx X. Xxxxxxxx
President
X.X.X.XXX PHARMACEUTICAL SERVICES, INC.
By: /s/Xxxx Xxxxxx
--------------------------------------------
Xxxx Xxxxxx
President
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