\nARTICLE V<\/p>\n ADDITIONAL AGREEMENTS………………………………………………………..35
\n SECTION 5.1 HSR Act………………………………………………………..35
\n SECTION 5.2 Joint Proxy Statement Prospectus; Registration Statement…………….35
\n SECTION 5.3 Stockholders Meetings……………………………………………36
\n SECTION 5.4 Access to Information; Confidentiality…………………………….36
\n SECTION 5.5 Consents; Approvals……………………………………………..36
\n SECTION 5.6 Agreements with Respect to Affiliates……………………………..37
\n SECTION 5.7 Indemnification and Insurance…………………………………….37
\n SECTION 5.8 Notification of Certain Matters…………………………………..38
\n SECTION 5.9 Further Action\/Tax Treatment……………………………………..38
\n SECTION 5.10 Public Announcements……………………………………………39
\n SECTION 5.11 Accountants’ Letters……………………………………………39
\n SECTION 5.12 Board Representation……………………………………………39
\n SECTION 5.13 Nasdaq Listing…………………………………………………40
\n SECTION 5.14 Listing of Parent Shares………………………………………..40
\n SECTION 5.15 Joint Shareholder Communications Efforts………………………….40
\n SECTION 5.16 Dismissal of Civil Actions………………………………………40
\n SECTION 5.17 Issuance of CIBA Shares…………………………………………40<\/p>\n
ARTICLE VI<\/p>\n
CONDITIONS TO THE MERGER……………………………………………………..40
\n SECTION 6.1 Conditions to Obligation of Each Party to Effect the Merger………….40
\n SECTION 6.2 Additional Conditions to Obligations of Parent and Merger Sub………..41
\n SECTION 6.3 Additional Conditions to Obligation of the Company………………….42<\/p>\n
ARTICLE VII<\/p>\n
TERMINATION…………………………………………………………………43
\n SECTION 7.1 Termination…………………………………………………….43
\n SECTION 7.2 Effect of Termination……………………………………………45
\n SECTION 7.3 Fees and Expenses……………………………………………….45<\/p>\n
ARTICLE VIII<\/p>\n
GENERAL PROVISIONS…………………………………………………………..46
\n SECTION 8.1 Effectiveness of Representations, Warranties and Agreements;
\n Knowledge, Etc…………………………………………………………….46
\n SECTION 8.2 Notices………………………………………………………..46
\n SECTION 8.3 Certain Definitions……………………………………………..47
\n<\/c><\/s><\/caption>\n<\/table>\n
iii-<\/p>\n
SECTION 8.4 Amendment……………………………………………..48
\n SECTION 8.5 Waiver………………………………………………..48
\n SECTION 8.6 Headings………………………………………………48
\n SECTION 8.7 Severability…………………………………………..48
\n SECTION 8.8 Entire Agreement……………………………………….49
\n SECTION 8.9 Assignment; Guarantee of Merger Sub………………………49
\n SECTION 8.10 Parties in Interest…………………………………….49
\n SECTION 8.11 Failure or Indulgence Not Waiver; Remedies Cumulative………49
\n SECTION 8.12 Governing Law………………………………………….49
\n SECTION 8.13 Counterparts…………………………………………..49<\/p>\n
iv-<\/p>\n
LOCATION OF DEFINED TERMS IN AGREEMENT AND PLAN OF MERGER
\n ———————————————————<\/p>\n
DEFINED TERMS SECTION OF MERGER AGREEMENT
\n————- —————————<\/p>\n
1998 Company Balance Sheet 2.9
\n1998 Parent Balance Sheet 3.9
\nAcquisition Proposal 4.2(a)
\nAffiliates 8.3
\nAffiliate Agreement 5.6
\nAffiliate Letter 5.6
\nAgreement Preamble
\nAlternative Transaction 7.1
\nApprovals 2.1
\nAverage Closing Price 1.6(a)
\nBeneficial Owner 8.3
\nBlue Sky Laws 2.5(d)
\nBusiness Day 8.3
\nCash Consideration 1.6(a)
\nCertificates 1.6(f)
\nCertificates of Merger 1.2
\nClosing 1.1(b)
\nCode Preamble
\nCompany Preamble
\nCompany Common Stock Preamble
\nCompany Disclosure Schedule Article II Preamble
\nCompany Employee Plans 2.11(a)
\nCompany ERISA Affiliate 2.11(a)
\nCompany Fee 7.3(b)
\nCompany Intellectual Property Rights 2.17(a)
\nCompany Liens 2.3
\nCompany Permits 2.6(b)
\nCompany Products 2.18(a)
\nCompany SEC Reports 2.7(a)
\nCompany Stockholders Meeting 2.13
\nCompany Stock Option Plan 1.6(c)(i)
\nCompany Stock Purchase Plan 1.6(c)(v)
\nConfidentiality Letter 5.4
\nControl 8.3
\nDGCL Preamble
\nDiluted Company Common Stock 1.6(a)
\nEffective Time 1.2
\nEnvironmental Laws 2.16<\/p>\n
v-<\/p>\n
ERISA 2.11(a)
\nExchange Act 2.5(a)
\nExchange Agent 1.7(a)
\nFBCA Preamble
\nFDA 2.18(a)
\nGenerally accepted accounting principles 8.3
\nHSR Act 2.5(d)
\nIndemnified Parties 5.7(b)
\nIRS 2.11(b)
\nISO 2.11(c)
\nJoint Proxy Statement\/Prospectus 2.13
\nLaws 2.5(c)
\nLicenses 2.18(b)
\nLiens 2.3
\nMaterial Adverse Effect 1.13
\nMerger Preamble
\nMerger Consideration 1.7(b)
\nMerger Sub Preamble
\nParent Preamble
\nParent Common Stock 1.6(a)
\nParent Disclosure Schedule Article III Preamble
\nParent Employee Plans 3.11(a)
\nParent ERISA Affiliate 3.11(a)
\nParent Fee 7.3(c)
\nParent Intellectual Property Rights 3.17(a)
\nParent Liens 3.3
\nParent Material Adverse Effect 1.13
\nParent Permits 3.6(b)
\nParent Products 3.18(a)
\nParent SEC Reports 3.7(a)
\nParent Shares 1.6(a)
\nParent Stockholders Meeting 2.13
\nPBGC 2.11(b)
\nPer Share Cash Consideration 1.6(a)
\nPer Share Stock Consideration 1.6(a)
\nOutstanding Company Common Stock 1.6(a)
\nRule 145 5.6
\nSEC 2.5(a)
\nSecurities Act 1.6(c)(iv)
\nSeries I Preferred Stock 1.6(a)
\nShare Preamble
\nStock Consideration 1.6(a)
\nStock Options 1.6(c)(i) <\/p>\n
vi-<\/p>\n
Stockholders Agreements 2.26
\nStockholders Meeting 2.13
\nSubsidiary Documents 2.2
\nTax\/Taxes 2.15
\nTax Returns 2.15
\nTerminating Breach 7.1(f)
\nThird Party 7.1(h)<\/p>\n
vii-<\/p>\n
AGREEMENT AND PLAN OF MERGER<\/p>\n
AGREEMENT AND PLAN OF MERGER, dated as of October 1, 1998 (this “AGREEMENT”),
\namong Summit Technology, Inc., a Massachusetts corporation (“PARENT”), Alpine
\nAcquisition Corp., a Delaware corporation and a wholly-owned subsidiary of
\nParent (“MERGER SUB”), and Autonomous Technologies Corporation, a Florida
\ncorporation (the “COMPANY”).<\/p>\n
WITNESSETH:<\/p>\n
WHEREAS, the Boards of Directors of Parent, Merger Sub and the Company have
\neach determined that it is advisable and in the best interests of their
\nrespective stockholders for Parent to enter into a business combination with the
\nCompany upon the terms and subject to the conditions set forth herein;<\/p>\n
WHEREAS, in furtherance of such combination, the Boards of Directors of
\nParent, Merger Sub and the Company have each approved the merger (the “MERGER”)
\nof the Company with and into Merger Sub or, if the Merger is restructured as
\nprovided herein, of Merger Sub with an into the Company, in accordance with the
\napplicable provisions of the Florida Business Corporation Act (the “FBCA”) and
\nthe Delaware General Corporation Law (the “DGCL”), and upon the terms and
\nsubject to the conditions set forth herein;<\/p>\n
WHEREAS, Parent, Merger Sub and the Company intend, unless the Merger shall
\nhave been restructured as provided herein, by approving resolutions authorizing
\nthis Agreement, to adopt this Agreement as a plan of reorganization within the
\nmeaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the
\n“CODE”), and the regulations promulgated thereunder; and<\/p>\n
WHEREAS, pursuant to the Merger, each outstanding share (a “SHARE”) of the
\nCompany’s common stock, $.01 par value per share (the “COMPANY COMMON STOCK”),
\nshall be converted into the right to receive the Merger Consideration (as
\ndefined in Section 1.7(b)), upon the terms and subject to the conditions set
\nforth herein;<\/p>\n
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
\nand agreements herein contained, and intending to be legally bound hereby,
\nParent, Merger Sub and the Company hereby agree as follows:<\/p>\n
ARTICLE I<\/p>\n
THE MERGER<\/p>\n
SECTION 1.1 The Merger.<\/p>\n
(a) Effective Time. At the Effective Time (as defined in Section 1.2), and
\nsubject to and upon the terms and conditions of this Agreement, the FBCA and the
\nDGCL, the Company shall be merged with and into Merger Sub, the separate
\ncorporate existence of the Company shall cease, and Merger <\/p>\n
Sub shall continue as the surviving corporation. Merger Sub as the surviving
\ncorporation after the Merger is hereinafter sometimes referred to as the
\n“SURVIVING CORPORATION.”<\/p>\n
(b) Closing. Unless this Agreement shall have been terminated pursuant to
\nSection 7.1 and subject to the satisfaction or waiver of the conditions set
\nforth in Article VI, the consummation of the Merger (the “CLOSING”) will take
\nplace as promptly as practicable (and in any event within two business days)
\nafter satisfaction or waiver of the conditions set forth in Article VI, at the
\noffices of Ropes & Gray, One International Place, Boston, Massachusetts, unless
\nanother date, time or place is agreed to in writing by the parties hereto.<\/p>\n
SECTION 1.2 Effective Time. As promptly as practicable after the
\nsatisfaction or waiver of the conditions set forth in Article VI, the parties
\nhereto shall cause the Merger to be consummated by filing certificates of merger
\nas contemplated by the FBCA and the DGCL (the “CERTIFICATES OF MERGER”),
\ntogether with any required related certificates, with the Secretary of State of
\nthe State of Florida and the Secretary of State of the State of Delaware, in
\nsuch form as required by, and executed in accordance with the relevant
\nprovisions of, the FBCA and the DGCL (the time of the later of such filings
\nbeing the “EFFECTIVE TIME”).<\/p>\n
SECTION 1.3 Effect of the Merger. At the Effective Time, the effect of the
\nMerger shall be as provided in this Agreement, the Certificates of Merger and
\nthe applicable provisions of the FBCA and the DGCL. Without limiting the
\ngenerality of the foregoing, and subject thereto, at the Effective Time all the
\nproperty, rights, privileges, powers and franchises of the Company and Merger
\nSub shall vest in the Surviving Corporation, and all debts, liabilities and
\nduties of the Company and Merger Sub shall become the debts, liabilities and
\nduties of the Surviving Corporation.<\/p>\n
SECTION 1.4 Certificate of Incorporation, By-Laws.<\/p>\n
(a) Certificate of Incorporation. Unless otherwise determined by Parent
\nprior to the Effective Time, at the Effective Time the Certificate of
\nIncorporation of Merger Sub, as in effect immediately prior to the Effective
\nTime, shall be the Certificate of Incorporation of the Surviving Corporation
\nuntil thereafter amended in accordance with the DGCL and such Certificate of
\nIncorporation.<\/p>\n
(b) By-Laws. Unless otherwise determined by Parent prior to the Effective
\nTime, at the Effective Time the By-Laws of Merger Sub, as in effect immediately
\nprior to the Effective Time, shall be the By-Laws of the Surviving Corporation
\nuntil thereafter amended in accordance with the DGCL, the Certificate of
\nIncorporation of the Surviving Corporation and such By-Laws.<\/p>\n
SECTION 1.5 Directors and Officers. The directors of Merger Sub immediately
\nprior to the Effective Time shall be the initial directors of the Surviving
\nCorporation, each to hold office in accordance with the Certificate of
\nIncorporation and By-Laws of the Surviving Corporation, and the officers of
\nMerger Sub immediately prior to the Effective Time shall be the initial officers
\nof the Surviving Corporation, in each case until their respective successors are
\nduly elected or appointed and qualified.<\/p>\n
2-<\/p>\n
SECTION 1.6 Effect on Capital Stock. At the Effective Time, by virtue of
\nthe Merger and without any action on the part of the Parent, Merger Sub, the
\nCompany or any of their respective stockholders:<\/p>\n
(a) Conversion of Securities. Each Share issued and outstanding immediately
\nprior to the Effective Time (excluding any Shares to be canceled pursuant to
\nSection 1.6(b)) shall be converted, subject to Section 1.6(f), into the right to
\nreceive (i) the quotient of 11,650,400 shares (the “STOCK CONSIDERATION”) of
\nvalidly issued, fully paid and nonassessable shares (“PARENT SHARES”) of the
\nCommon Stock, $0.01 par value per share, of Parent (“PARENT COMMON STOCK”)
\ndivided by the Diluted Company Common Stock (the “PER SHARE STOCK
\nCONSIDERATION”) and (ii) the quotient of $50,000,000 in cash less (A) one-half
\nof any amounts advanced to the Company by Parent after the date hereof and (B)
\nunless the holders of the Series I Preferred Stock shall have converted such
\nSeries I Preferred Stock prior to the Effective Time, any amounts that would be
\npayable upon redemption of all shares of the Company’s Convertible Preferred
\nStock, Series I, $.01 par value per share (the “SERIES I PREFERRED STOCK”), that
\nare issued or issuable as of the date hereof, assuming redemption is made on the
\ndate on which the Effective Time occurs in accordance with the provisions of the
\nCompany’s Articles of Incorporation or pursuant to any agreement with the
\nholders of Series I Preferred Stock prior to the Effective Time (the “CASH
\nCONSIDERATION”) divided by the Diluted Company Common Stock (the “PER SHARE CASH
\nCONSIDERATION”). If the average closing price of Parent Common Stock on The
\nNasdaq National Market for the five trading days ending on the day before the
\ndate on which the Effective Time occurs (the “AVERAGE CLOSING PRICE”) is less
\nthan $4.2917, then the $50,000,000 in the previous sentence shall be reduced to
\n11,650,400 multiplied by the Average Closing Price.<\/p>\n
“Diluted Company Common Stock” means the number of shares of Company Common
\nStock outstanding at the Effective Time (the “Outstanding Company Common
\nStock”), plus all shares of Company Common Stock issuable upon the exercise or
\nconversion of all options, warrants, convertible securities or other rights,
\nagreements, arrangements or other commitments of any character pursuant to which
\nthe Company is obligated, contingently or otherwise, to issue or sell shares of
\nCompany Common Stock (excluding the Series I Preferred Stock and all rights to
\nacquire the Series I Preferred Stock) calculated by applying the treasury stock
\nmethod to options, warrants and convertible securities.<\/p>\n
(b) Cancellation. Each Share held in the treasury of the Company and each
\nShare owned by Parent, Merger Sub or any direct or indirect wholly owned
\nsubsidiary of the Company or Parent immediately prior to the Effective Time
\nshall, by virtue of the Merger and without any action on the part of the holder
\nthereof, cease to be outstanding, be canceled and retired without payment of any
\nconsideration therefor and cease to exist.<\/p>\n
3-<\/p>\n
(c) Stock Options and Stock Purchase Plan.<\/p>\n
(i) At the Effective Time, Parent will assume each then outstanding
\n option to purchase Shares (the “STOCK OPTIONS”) under the Company’s 1995
\n Stock Option Plan (the “COMPANY STOCK OPTION PLAN”) as to which the holder
\n has waived the acceleration of vesting under Section 14 of the Company Stock
\n Option Plan, and each such Stock Option shall thereafter constitute an option
\n to acquire, on substantially the same terms and subject to substantially the
\n same conditions as were applicable under such Stock Option, including without
\n limitation term, vesting, exercisability, status as an “incentive stock
\n option” under Section 422 of the Code and termination provisions, the number
\n of shares of Parent Common Stock, rounded down to the nearest whole share,
\n equal to the sum of (i) the product of the number of Shares subject to such
\n Stock Option immediately prior to the Effective Time multiplied by the Per
\n Share Stock Consideration plus (ii) the product of the number of Shares
\n subject to such Stock Option immediately prior to the Effective Time
\n multiplied by a fraction the numerator of which is the Per Share Cash
\n Consideration and the denominator of which is the Average Closing Price. The
\n exercise price per share of Parent Common Stock (increased to the nearest
\n whole cent) shall be equal to the aggregate exercise price of the Stock
\n Option divided by the number of Shares of Parent Common Stock into which such
\n Stock Option will become exercisable at the Effective Time; provided,
\n however, that in the case of any Stock Option to which Section 421 of the
\n Code applies by reason of its qualification as an incentive stock option
\n under Section 422 of the Code, the conversion formula shall be adjusted if
\n necessary to comply with Section 424(a) of the Code.<\/p>\n
(ii) The Company shall use its best efforts to obtain all necessary
\n waivers, consents or releases from holders of Stock Options under the Company
\n Stock Option Plan and take any such other action as may be reasonably
\n necessary to give effect to the transactions contemplated by this Section
\n 1.6(c).<\/p>\n
(iii) Parent shall take all corporate action necessary to reserve for
\n issuance a sufficient number of Parent Shares for delivery pursuant to the
\n terms set forth in this Section 1.6(c).<\/p>\n
(iv) Subject to any applicable limitations under the Securities Act of
\n 1933, as amended, and the rules and regulations thereunder (the “SECURITIES
\n ACT”), Parent shall either (A) file a Registration Statement on Form S-8 (or
\n any successor form), effective as of the Effective Time, with respect to the
\n shares of Parent Common Stock issuable upon exercise of the Stock Options, or
\n (B) file any necessary amendments to the Company’s previously-filed
\n Registration Statement(s) on Form S-8 in order that the Parent will be deemed
\n a “successor registrant” thereunder, and, in either event the Parent shall
\n use all reasonable efforts to maintain the effectiveness of such registration
\n statement(s) (and maintain the current status of the prospectus or
\n prospectuses relating thereto) for so long as such Stock Options shall remain
\n outstanding.<\/p>\n
4-<\/p>\n
(v) The Company will promptly cause written notice of the execution of
\n this Agreement to be given to persons holding options or other rights to
\n purchase Company Common Stock under the Company’s 1996 Employee Stock
\n Purchase Plan (the “COMPANY STOCK PURCHASE PLAN”). The Company will
\n terminate the Company Stock Purchase Plan at the end of the current purchase
\n period.<\/p>\n
(d) Capital Stock of Merger Sub. Each share of common stock, $.01 par value,
\nof Merger Sub issued and outstanding immediately prior to the Effective Time
\nshall remain outstanding.<\/p>\n
(e) Adjustments to Stock Consideration. The Stock Consideration shall be
\nadjusted to fully reflect the effect of any stock split, reverse split, stock
\ndividend (including any dividend or distribution of securities convertible into
\nParent Common Stock), reorganization, recapitalization or other like change with
\nrespect to Parent Common Stock occurring after the date hereof and prior to the
\nEffective Time.<\/p>\n
(f) Fractional Shares. Unless Parent otherwise elects, no certificates or
\nscrip representing less than one Parent Share shall be issued upon the surrender
\nfor exchange of a certificate or certificates which immediately prior to the
\nEffective Time represented outstanding Shares (the “CERTIFICATES”). If Parent so
\nelects, in lieu of any such fractional share, each holder of Shares who would
\notherwise have been entitled to a fraction of a Parent Share upon surrender of
\nCertificates for exchange shall be paid upon such surrender cash equal to the
\nproduct of (i) such fraction, multiplied by (ii) the Average Closing Price.<\/p>\n
SECTION 1.7 Exchange of Certificates.<\/p>\n
(a) Exchange Agent. Parent shall supply, or shall cause to be supplied, to or
\nfor the account of BankBoston, N.A., or such other bank or trust company as
\nshall be designated by Parent (the “EXCHANGE AGENT”), in trust for the benefit
\nof the holders of Company Common Stock, for exchange in accordance with this
\nSection 1.7, through the Exchange Agent, certificates evidencing the Parent
\nShares issuable pursuant to Section 1.6 in exchange for outstanding Shares.<\/p>\n
(b) Exchange Procedures. As soon as reasonably practicable after the
\nEffective Time, Parent will instruct the Exchange Agent to mail to each holder
\nof record of Certificates (i) a letter of transmittal (which shall specify that
\ndelivery shall be effected, and risk of loss and title to the Certificates shall
\npass, only upon proper delivery of the Certificates to the Exchange Agent and
\nshall be in such form and have such other provisions as Parent may reasonably
\nspecify), and (ii) instructions to effect the surrender of the Certificates in
\nexchange for the certificates evidencing Parent Shares. Upon surrender of a
\nCertificate for cancellation to the Exchange Agent together with such letter of
\ntransmittal, duly executed, and such other customary documents as may be
\nrequired pursuant to such instructions, the holder of such Certificate shall be
\nentitled to receive in exchange therefor (A) certificates evidencing that number
\nof whole Parent Shares which such holder has the right to receive pursuant to
\nSection 1.6(a) in respect of the Shares formerly evidenced by such Certificate,
\n(b) the per Share Cash Consideration, (C) any dividends or other distributions
\nto which
\n 5-<\/p>\n
such holder is entitled pursuant to Section 1.7(c), and (D) cash in respect of
\nfractional shares as provided in Section 1.6(f) (the Stock Consideration, the
\nCash Consideration, dividends, distributions and cash being, collectively, the
\n“MERGER CONSIDERATION”), and the Certificate so surrendered shall forthwith be
\ncanceled. In the event of a transfer of ownership of Shares which is not
\nregistered in the transfer records of the Company as of the Effective Time, the
\nMerger Consideration may be issued and paid in accordance with this Article I to
\na transferee if the Certificate evidencing such Shares is presented to the
\nExchange Agent, accompanied by all documents required to evidence and effect
\nsuch transfer pursuant to this Section 1.7(b) and by evidence that any
\napplicable stock transfer taxes have been paid. Until so surrendered, each
\noutstanding Certificate that, prior to the Effective Time, represented Shares
\nwill be deemed from and after the Effective Time, for all corporate purposes,
\nother than the payment of dividends and subject to Section 1.6(f), to evidence
\nthe ownership of the number of whole Parent Shares that represent the Stock
\nConsideration with respect to such Shares.<\/p>\n
(c) Distributions With Respect to Unexchanged Parent Shares. No dividends or
\nother distributions declared or made after the Effective Time with respect to
\nParent Shares with a record date after the Effective Time shall be paid to the
\nholder of any unsurrendered Certificate with respect to the Parent Shares they
\nare entitled to receive until the holder of such Certificate shall surrender
\nsuch Certificate. Subject to applicable law, following surrender of any such
\nCertificate, there shall be paid to the record holder of the certificates
\nrepresenting whole Parent Shares issued in exchange therefor, without interest,
\nat the time of such surrender, the amount of dividends or other distributions
\nwith a record date after the Effective Time theretofore paid with respect to
\nsuch whole Parent Shares.<\/p>\n
(d) Transfers of Ownership. If any certificate for Parent Shares is to be
\nissued in a name other than that in which the Certificate surrendered in
\nexchange therefor is registered, it will be a condition to the issuance thereof
\nthat the Certificate so surrendered will be properly endorsed and otherwise in
\nproper form for transfer and that the person requesting such exchange will have
\npaid to Parent or any agent designated by it any transfer or other taxes
\nrequired by reason of the issuance of a certificate for Parent Shares in any
\nname other than that of the registered holder of the certificate surrendered, or
\nhave established to the satisfaction of Parent or any agent designated by it
\nthat such tax has been paid or is not payable.<\/p>\n
(e) No Liability. At any time following one year after the Effective Time,
\nParent shall be entitled to require the Exchange Agent to deliver to Parent any
\nMerger Consideration which had been made available to the Exchange Agent by or
\non behalf of Parent and which has not been disbursed to holders of Certificates,
\nand thereafter such holders shall be entitled to look to Parent only as general
\ncreditors thereof with respect to the Merger Consideration payable upon due
\nsurrender of their Certificates. Notwithstanding the foregoing, neither Parent,
\nMerger Sub nor the Company shall be liable to any holder of Company Common Stock
\nfor any Merger Consideration delivered to a public official pursuant to any
\napplicable abandoned property, escheat or similar law.<\/p>\n
6-<\/p>\n
(f) Withholding Rights. Parent or the Exchange Agent shall be entitled to
\ndeduct and withhold from the Merger Consideration otherwise payable pursuant to
\nthis Agreement to any holder of Company Common Stock such amounts as Parent or
\nthe Exchange Agent is required to deduct and withhold with respect to the making
\nof such payment under the Code, or any provision of state, local or foreign tax
\nlaw. To the extent that amounts are so withheld by Parent or the Exchange Agent,
\nsuch withheld amounts shall be treated for all purposes of this Agreement as
\nhaving been paid to the holder of the Shares in respect of which such deduction
\nand withholding was made by Parent or the Exchange Agent.<\/p>\n
SECTION 1.8 Stock Transfer Books. At the Effective Time, the stock transfer
\nbooks of the Company shall be closed, and there shall be no further registration
\nof transfers of Company Common Stock thereafter on the records of the Company.<\/p>\n
SECTION 1.9 No Further Ownership Rights in Company Common Stock. The Merger
\nConsideration delivered upon the surrender of Certificates in exchange for the
\nShares represented thereby, in accordance with the terms hereof, shall be deemed
\nto have been issued in full satisfaction of all rights pertaining to such
\nShares, and there shall be no further registration of transfers on the records
\nof the Surviving Corporation of Shares which were outstanding immediately prior
\nto the Effective Time. If, after the Effective Time, Certificates are presented
\nto the Surviving Corporation for any reason, they shall be canceled and
\nexchanged as provided in this Article I.<\/p>\n
SECTION 1.10 Lost, Stolen or Destroyed Certificates. In the event any
\nCertificates shall have been lost, stolen or destroyed, the Exchange Agent shall
\nissue in exchange for such lost, stolen or destroyed Certificates, upon the
\nmaking of an affidavit of that fact by the holder thereof, such Parent Shares as
\nmay be required pursuant to Section 1.6; provided, however, that Parent may, in
\nits discretion and as a condition precedent to the issuance thereof, require the
\nowner of such lost, stolen or destroyed Certificates to deliver a bond in such
\nsum as it may reasonably direct as indemnity against any claim that may be made
\nagainst Parent or the Exchange Agent with respect to the Certificates alleged to
\nhave been lost, stolen or destroyed.<\/p>\n
SECTION 1.11 Tax Consequences. Unless the Merger is restructured as the
\nAlternative Taxable Merger, it is intended by the parties hereto that the Merger
\nshall constitute a reorganization within the meaning of Section 368 of the Code.
\nThe parties hereto hereby adopt this Agreement as a “plan of reorganization”
\nwithin the meaning of Sections 1.368-2(g) and 1.368-3(a) of the United States
\nTreasury Regulations.<\/p>\n
SECTION 1.12 Taking of Necessary Action; Further Action. Each of Parent,
\nMerger Sub and the Company will take all such reasonable and lawful action as
\nmay be necessary or appropriate in order to effectuate the Merger in accordance
\nwith this Agreement as promptly as possible. If, at any time after the Effective
\nTime, any such further action is necessary or desirable to carry out the
\npurposes of this Agreement and to vest the Surviving Corporation with full
\nright, title and possession to all assets, property, rights, privileges, powers
\nand franchises of the Company and Merger Sub, the officers and directors of the
\nCompany, Parent and Merger Sub immediately prior to the Effective<\/p>\n
7-<\/p>\n
Time are fully authorized in the name of their respective corporations or
\notherwise to take, and will take, all such lawful and necessary action.<\/p>\n
SECTION 1.13 Material Adverse Effect. When used in connection with the
\nCompany or any of its subsidiaries, or Parent or any of its subsidiaries, as the
\ncase may be, the term “MATERIAL ADVERSE EFFECT” means any change, effect or
\ncircumstance that, individually or when taken together with all other such
\nsimilar or related changes, effects or circumstances that have occurred prior to
\nthe date of determination of the occurrence of the Material Adverse Effect, (a)
\nis materially adverse to the business, assets (including intangible assets),
\nfinancial condition or results of operations of the Company and its subsidiaries
\nor Parent and its subsidiaries, as the case may be, in each case taken as a
\nwhole (other than changes that are the effect of economic factors affecting the
\neconomy as a whole), or (b) is reasonably likely to materially delay or prevent
\nthe consummation of the transactions contemplated hereby.<\/p>\n
SECTION 1.14 Restructuring of the Merger.<\/p>\n
(a) Notwithstanding any provision of this Agreement, in the event that
\neither:<\/p>\n
(i) the product of the Average Closing Price and the number of shares of
\nParent Common Stock issuable in the Merger in respect of Outstanding Company
\nCommon Stock shall be less than 82% of the sum of (A) the product of the Per
\nShare Cash Consideration and the Outstanding Company Common Stock plus (B) the
\namounts described in Section 1.6(a)(ii)(B), or<\/p>\n
(ii) the product of the average of the high and low sale prices of the
\nParent Common Stock on the Nasdaq National Market on the last trading date prior
\nto the Closing Date and the number of shares of Parent Common Stock issuable in
\nthe Merger in respect of Outstanding Company Common Stock adjusted to reflect
\nthe effect of any trading restrictions, shall be less than the sum of (A) the
\nproduct of the Per Share Cash Consideration and the Outstanding Company Common
\nStock plus (B) the amounts described in Section 1.6(a)(ii)(B),<\/p>\n
then as promptly as practicable, the Merger shall be restructured as provided
\nin this Section 1.14 (the “Alternative Taxable Merger”).<\/p>\n
(b) The following provisions shall apply to the Alternative Taxable Merger:<\/p>\n
(i) Section 1.1(a) of this Agreement shall be deemed to read, in its
\nentirety, as follows:<\/p>\n
“(a) Effective Time. At the Effective Time (as defined in Section 1.2), and
\nsubject to and upon the terms and conditions of this Agreement, the FBCA and the
\nDGCL, Merger Sub shall be merged with and into the Company, the separate
\ncorporate existence of Merger Sub shall cease, and the Company shall continue as
\nthe surviving corporation. The Company as the surviving corporation after the
\nMerger is hereinafter sometimes referred to as the “SURVIVING CORPORATION.”<\/p>\n
8-<\/p>\n
(ii) Sections 1.4(a) and (b) of this Agreement shall be deemed to read,
\nin their entirety, as follows:<\/p>\n
“(a) Articles of Incorporation. Unless otherwise determined by Parent prior
\nto the Effective Time, at the Effective Time the Articles of Incorporation of
\nthe Company, as in effect immediately prior to the Effective Time, shall be the
\nCertificate of Incorporation of the Surviving Corporation until thereafter
\namended in accordance with the FBCA and such Articles of Incorporation.”<\/p>\n
“(b) By-Laws. Unless otherwise determined by Parent prior to the Effective
\nTime, at the Effective Time the By-Laws of the Company, as in effect immediately
\nprior to the Effective Time, shall be the By-Laws of the Surviving Corporation
\nuntil thereafter amended in accordance with the FBCA, the Articles of
\nIncorporation of the Surviving Corporation and such By-Laws.”<\/p>\n
(iii) Section 1.5(d) of this Agreement shall be deemed to read, in its
\nentirety, as follows:<\/p>\n
“(d) Capital Stock of Merger Sub. Each share of common stock, $.01 par value,
\nof Merger Sub issued and outstanding immediately prior to the Effective Time
\nshall be converted into and exchanged for one validly issued, fully paid and
\nnonassessable share of common stock, $0.01 par value per share, of the Surviving
\nCorporation.”<\/p>\n
(iv) The condition set forth in Section 6.2(d) of this Agreement shall not be
\napplicable to the Alternative Merger.<\/p>\n
(v) All references in this Agreement to the Surviving Corporation shall be
\ndeemed references to the Company as the Surviving Corporation in the Alternative
\nMerger.<\/p>\n
(vi) All references in this Agreement to the Merger shall be deemed
\nreferences to the Alternative Merger, as provided for in this Section 1.14.<\/p>\n
ARTICLE II<\/p>\n
REPRESENTATIONS AND WARRANTIES OF THE COMPANY<\/p>\n
The Company hereby represents and warrants to Parent and Merger Sub that,
\nexcept as set forth in the written disclosure schedule delivered on or prior to
\nthe date hereof by the Company to Parent that is arranged in paragraphs
\ncorresponding to the numbered and lettered paragraphs contained in this Article
\nII (the “COMPANY DISCLOSURE SCHEDULE”):<\/p>\n
SECTION 2.1 Organization and Qualification; Subsidiaries. Each of the Company
\nand each of its subsidiaries is a corporation duly organized, validly existing
\nand in good standing under the laws of the jurisdiction of its incorporation and
\nhas the requisite corporate power and authority and is in possession of all
\nfranchises, grants, authorizations, licenses, permits, easements, consents,
\ncertificates, approvals and orders (“APPROVALS”) necessary to own, lease and
\noperate the properties
\n 9-<\/p>\n
it purports to own, operate or lease and to carry on its business as it is now
\nbeing conducted, except where the failure to be so organized, existing and in
\ngood standing or to have such power, authority and Approvals would not
\nreasonably be expected to have a Company Material Adverse Effect. Each of the
\nCompany and its subsidiaries is duly qualified or licensed as a foreign
\ncorporation to do business, and is in good standing, in each jurisdiction where
\nthe character of its properties owned, leased or operated by it or the nature of
\nits activities makes such qualification or licensing necessary, except for such
\nfailures to be so duly qualified or licensed and in good standing that would not
\nreasonably be expected to have a Company Material Adverse Effect. A true and
\ncomplete list as of the date hereof of all of the Company’s subsidiaries,
\ntogether with the jurisdiction of incorporation of each subsidiary, the
\nauthorized capitalization of each subsidiary, and the percentage of each
\nsubsidiary’s outstanding capital stock owned by the Company or another
\nsubsidiary, is set forth in Section 2.1 of the Company Disclosure Schedule. The
\nCompany does not directly or indirectly own any equity or similar interest in,
\nor any interest convertible into or exchangeable or exercisable for, any equity
\nor similar interest in, any corporation, partnership, joint venture or other
\nbusiness association or entity, with respect to which interest the Company has
\ninvested or is required to invest $200,000 or more, excluding securities in any
\npublicly traded company held for investment by the Company and comprising less
\nthan five percent of the outstanding stock of such company.<\/p>\n
SECTION 2.2 Articles of Incorporation and By-Laws. The Company has heretofore
\nfurnished to Parent a complete and correct copy of its Articles of Incorporation
\nand By-Laws as most recently restated and subsequently amended to the date
\nhereof, and has furnished or made available to Parent the Articles of
\nIncorporation and By-Laws (or equivalent organizational documents) of each of
\nits subsidiaries (the “SUBSIDIARY DOCUMENTS”). Such Articles of Incorporation,
\nBy-Laws and Subsidiary Documents are in full force and effect and neither the
\nCompany nor any of its subsidiaries is in violation of any of the provisions of
\nits Articles of Incorporation or By-Laws or Subsidiary Documents, except where
\nthe failure to be in full force and effect or where such violation would not
\nhave a Company Material Adverse Effect.<\/p>\n
SECTION 2.3 Capitalization. The authorized capital stock of the Company
\nconsists of (i) 25,000,000 shares of Company Common Stock and (ii) 1,000,000
\nshares of preferred stock, $0.01 par value per share. As of October 1, 1998, (i)
\n11,524,467 shares of Company Common Stock were issued and outstanding, all of
\nwhich are validly issued, fully paid and nonassessable, and no shares were held
\nin treasury, (ii) 1,000 shares of preferred stock had been designated as Series
\nI Preferred Stock of which 436 shares are validly issued, fully paid and
\nnonassessable and of which 400 shares are subject to an option for their
\npurchase, (iii) no shares of Company Common Stock were held by subsidiaries of
\nthe Company, (iv) 2,263,197 shares of Company Common Stock were reserved for
\nissuance upon the conversion of the Series I Preferred Stock, of which a maximum
\nof 1,750,000 shares are issuable upon the conversion of the initial 500 shares
\nof Series I Preferred Stock and of which the remaining 513,197 shares become
\nissuable upon the purchase of an additional 400 shares of Series I Preferred
\nStock pursuant to an option for such purchase, such that the total of 2,263,197
\nshares of Company Common Stock are issuable upon the conversion of the total 900
\nshares of Series I Preferred Stock, (v) 922,350 shares of Company Common Stock
\nwere reserved for issuance upon the exercise of outstanding warrants, (vi)
\n1,690,926 shares of Company Common Stock were<\/p>\n
10-<\/p>\n
reserved for future issuance pursuant to outstanding stock options granted under
\nthe Company Stock Option Plan, (vii) 171,713 of Company Common Stock are
\nreserved for future issuance pursuant to the Strategic Alliance Agreement and
\n(viii) 380,000 of Company Common Stock are reserved for issuance pursuant to
\nstock purchase warrants which may become outstanding upon the exercise of an
\noption to purchase Series I Preferred Stock referred to in clause (iv) of this
\nsentence. No material change in such capitalization has occurred between
\nSeptember 30, 1998 and the date hereof other than the issuance of shares of
\nCompany Common Stock under the Company Stock Option Plans and under the Company
\nStock Purchase Plan. All options, warrants or other rights, agreements,
\narrangements or commitments of any character to which the Company or a
\nsubsidiary or, to the Company’s knowledge, any other person is a party relating
\nto the issued or unissued capital stock of the Company or any of its
\nsubsidiaries or obligating the Company or any of its subsidiaries to issue or
\nsell any shares of capital stock of, or other equity interests in, the Company
\nor any of its subsidiaries are described in Section 2.3 of the Company
\nDisclosure Schedule. All shares of Company Common Stock subject to issuance as
\naforesaid, upon issuance on the terms and conditions specified in the
\ninstruments pursuant to which they are issuable, shall be duly authorized,
\nvalidly issued, fully paid and nonassessable. There are no obligations,
\ncontingent or otherwise, of the Company or any of its subsidiaries to
\nrepurchase, redeem or otherwise acquire any shares of Company Common Stock or
\nthe capital stock of any subsidiary or to provide funds to or make any
\ninvestment (in the form of a loan, capital contribution, guaranty or otherwise)
\nin any such subsidiary or any other entity. All of the outstanding shares of
\ncapital stock of each of the Company’s subsidiaries are duly authorized, validly
\nissued, fully paid and nonassessable, and all such shares are owned by the
\nCompany or another subsidiary of the Company, free and clear of all security
\ninterests, liens, claims, pledges, agreements, limitations in the Company’s
\nvoting rights, charges or other encumbrances of any nature whatsoever
\n(collectively, “COMPANY LIENS”).<\/p>\n
SECTION 2.4 Authority Relative to this Agreement. The Company has all
\nnecessary corporate power and authority to execute and deliver this Agreement
\nand to perform its obligations hereunder and to consummate the transactions
\ncontemplated hereby. The execution and delivery of this Agreement by the Company
\nand the consummation by the Company of the transactions contemplated hereby have
\nbeen duly and validly authorized by all necessary corporate action, and no other
\ncorporate proceedings on the part of the Company are necessary to authorize this
\nAgreement or to consummate the transactions so contemplated (other than the
\nadoption of this Agreement by the holders of at least a majority of the
\noutstanding shares of Company Common Stock entitled to vote in accordance with
\nthe FBCA and the Company’s Articles of Incorporation and By-Laws). As of the
\ndate of this Agreement, the Board of Directors of the Company has determined
\nthat it is advisable and in the best interest of the Company’s stockholders for
\nthe Company to enter into a business combination with Parent upon the terms and
\nsubject to the conditions of this Agreement, and has unanimously recommended
\nthat the Company’s stockholders approve and adopt this Agreement and the Merger.
\nThis Agreement has been duly and validly executed and delivered by the Company
\nand, assuming the due authorization, execution and delivery by Parent and Merger
\nSub, as applicable, constitutes a legal, valid and binding obligation of the
\nCompany enforceable against the Company in accordance with its terms.<\/p>\n
11-<\/p>\n
SECTION 2.5 No Conflict; Required Filings and Consents.<\/p>\n
(a) Section 2.5(a) of the Company Disclosure Schedule includes a list of (i)
\nall contracts, agreements, commitments or other understandings or arrangements
\nto which the Company or any of its subsidiaries is a party or by which any of
\nthem or any of their respective properties or assets are bound or affected, but
\nexcluding (A) contracts, agreements, commitments or other understandings or
\narrangements entered into in the ordinary course of business and involving, in
\neach case, payments by the Company or any of its subsidiaries of less than
\n$100,000 in any single instance, and (B) employment agreements and stock option
\nagreements and (ii) all agreements which, as of the date hereof, the Company is
\nrequired to file as “material contracts” with the Securities and Exchange
\nCommission (“SEC”) pursuant to the requirements of the Securities Exchange Act
\nof 1934, as amended, and the SEC’s rules and regulations thereunder (the
\n“EXCHANGE ACT”).<\/p>\n
(b) (i) Neither the Company nor any of its subsidiaries has breached, is in
\ndefault under, or has received written notice of any breach of or default under,
\nany of the agreements, contracts or other instruments required to be disclosed
\nin Section 2.5(a) of the Company Disclosure Schedule, (ii) to the best knowledge
\nof the Company, no other party to any of the agreements, contracts or other
\ninstrument required to be disclosed in Section 2.5(a) of the Company Disclosure
\nSchedule has breached or is in default of any of its obligations thereunder, and
\n(iii) each of the agreements, contracts and other instruments required to be
\ndisclosed in Section 2.5(a) of the Company Disclosure Schedule is in full force
\nand effect, except in any such case for breaches, defaults or failures to be in
\nfull force and effect that is not currently having or would not reasonably be
\nexpected to have a Company Material Adverse Effect.<\/p>\n
(c) The execution and delivery of this Agreement by the Company does not, and
\nthe performance of this Agreement by the Company and the consummation of the
\ntransactions contemplated hereby will not, (i) conflict with or violate the
\nCertificate of Incorporation or By-Laws of the Company, (ii) conflict with or
\nviolate any federal, foreign, state or provincial law, rule, regulation, order,
\njudgment or decree (collectively, “LAWS”) applicable to the Company or any of
\nits subsidiaries or by which its or any of their respective properties is bound
\nor affected, or (iii) result in any breach of or constitute a default (or an
\nevent that with notice or lapse of time or both would become a default) under,
\nor impair the Company’s or any of its subsidiaries’ rights or alter the rights
\nor obligations of any third party under, or give to others any rights of
\ntermination, amendment, acceleration or cancellation of, or result in the
\ncreation of a Company Lien on any of the properties or assets of the Company or
\nany of its subsidiaries pursuant to, any note, bond, mortgage, indenture,
\ncontract, agreement, lease, license, permit, franchise or other instrument or
\nobligation to which the Company or any of its subsidiaries is a party or by
\nwhich the Company or any of its subsidiaries or its or any of their respective
\nproperties is bound or affected, except in any such case for any such conflicts,
\nviolations, breaches, defaults or other occurrences that would not reasonably be
\nexpected to have a Company Material Adverse Effect.<\/p>\n
12-<\/p>\n
(d) The execution and delivery of this Agreement by the Company does not, and
\nthe performance of this Agreement by the Company will not, require any consent,
\napproval, authorization or permit of, or filing with or notification to, any
\nfederal, foreign, state or provincial governmental or regulatory authority
\nexcept (i) for applicable requirements, if any, of the Securities Act, the
\nExchange Act, state securities laws (“BLUE SKY LAWS”), the pre-merger
\nnotification requirements of the Hart-Scott-Rodino Antitrust Improvements Act of
\n1976, as amended (the “HSR ACT”), and the filing and recordation of appropriate
\nmerger or other documents as required by the DGCL, and (ii) where the failure to
\nobtain such consents, approvals, authorizations or permits, or to make such
\nfilings or notifications, would be reasonably expected to have a Company
\nMaterial Adverse Effect.<\/p>\n
SECTION 2.6 Compliance. Neither the Company nor any of its subsidiaries is in
\nconflict with, or in default or violation of, (i) any Law or Approval applicable
\nto the Company or any of its subsidiaries or by which its or any of their
\nrespective properties is bound or affected or (ii) any note, bond, mortgage,
\nindenture, contract, agreement, lease, license, permit, franchise or other
\ninstrument or obligation to which the Company or any of its subsidiaries is a
\nparty or by which the Company or any of its subsidiaries or its or any of their
\nrespective properties is bound or affected, except for any such conflicts,
\ndefaults or violations which would not reasonably be expected to have a Company
\nMaterial Adverse Effect.<\/p>\n
SECTION 2.7 SEC Filings; Financial Statements.<\/p>\n
(a) The Company has filed all forms, reports and documents required to be
\nfiled by it with the SEC since January 1, 1997 (collectively, the “COMPANY SEC
\nREPORTS”). The Company SEC Reports (i) were prepared in all material respects in
\naccordance with the requirements of the Securities Act or the Exchange Act, as
\nthe case may be, and (ii) did not at the time they were filed (or if amended or
\nsuperseded by a filing prior to the date of this Agreement, then on the date of
\nsuch filing) contain any untrue statement of a material fact or omit to state a
\nmaterial fact required to be stated therein or necessary in order to make the
\nstatements therein, in the light of the circumstances under which they were
\nmade, not misleading. None of the Company’s subsidiaries is required to file any
\nforms, reports or other documents with the SEC.<\/p>\n
(b) Each of the consolidated financial statements (including, in each case,
\nany related notes thereto) contained in the Company SEC Reports was prepared in
\naccordance with generally accepted accounting principles applied on a consistent
\nbasis throughout the periods involved (except as may be indicated in the notes
\nthereto), and each fairly presents in all material respects the consolidated
\nfinancial position of the Company and its subsidiaries as at the respective
\ndates thereof and the consolidated results of its operations and cash flows and
\nstockholders equity for the periods indicated, except that the unaudited interim
\nfinancial statements were or are subject to normal and recurring year-end
\nadjustments which were not or are not expected to be material in amount.<\/p>\n
SECTION 2.8 Absence of Certain Changes or Events. Except as disclosed in the
\nCompany SEC Reports filed prior to the date hereof, since June 30, 1998, the
\nCompany has conducted its<\/p>\n
13-<\/p>\n
business in the ordinary course and there has not occurred: (a) any Company
\nMaterial Adverse Effect; (b) any amendments or changes in the Articles of
\nIncorporation or By-laws of the Company; (c) any damage to, destruction or loss
\nof any asset of the Company (whether or not covered by insurance) that would
\nreasonably be expected to have a Company Material Adverse Effect; (d) any
\nmaterial change by the Company in its accounting methods, principles or
\npractices; (e) any material revaluation by the Company of any of its assets,
\nincluding, without limitation, writing down the value of inventory or writing
\noff notes or accounts receivable other than in the ordinary course of business;
\n(f) any other action or event that would have required the consent of Parent
\npursuant to Section 4.1 had such action or event occurred after the date of this
\nAgreement; or (g) any sale of a material amount of property of the Company or
\nany of its subsidiaries taken as a whole, except in the ordinary course of
\nbusiness.<\/p>\n
SECTION 2.9 No Undisclosed Liabilities. Except as disclosed in the Company
\nSEC Reports filed prior to the date hereof and except for the severance
\nobligation disclosed in Schedule 2.9 of the Company Disclosure Schedule, neither
\nthe Company nor any of its subsidiaries has any liabilities (absolute, accrued,
\ncontingent or otherwise), except liabilities (a) in the aggregate adequately
\nprovided for or disclosed in the Company’s balance sheet (including any related
\nnotes thereto) as of June 30, 1998 (the “1998 COMPANY BALANCE SHEET”), (b)
\nincurred in the ordinary course of business and not required under generally
\naccepted accounting principles to be reflected on the 1998 Company Balance
\nSheet, (c) incurred since June 30, 1998 in the ordinary course of business
\nconsistent with past practice, (d) incurred in connection with this Agreement,
\nor (e) which would not reasonably be expected to have a Company Material Adverse
\nEffect.<\/p>\n
SECTION 2.10 Absence of Litigation. There are no claims, actions, suits,
\nproceedings or investigations pending or, to the knowledge of the Company,
\nthreatened against the Company or any of its subsidiaries, or any properties or
\nrights of the Company or any of its subsidiaries, before any federal, foreign,
\nstate or provincial court, arbitrator or administrative, governmental or
\nregulatory authority or body that would reasonably be expected to have a Company
\nMaterial Adverse Effect.<\/p>\n
SECTION 2.11 Employee Benefit Plans, Employment Agreements.<\/p>\n
(a) Section 2.11 (a) of the Company Disclosure Schedule lists all employee
\npension plans (as defined in Section 3(2) of the Employee Retirement Income
\nSecurity Act of 1974, as amended (“ERISA”)), all material employee welfare plans
\n(as defined in Section 3(1) of ERISA), and all other material bonus, stock
\noption, stock purchase, incentive, deferred compensation, supplemental
\nretirement, severance and other similar fringe or employee benefit plans,
\nprograms or arrangements, written or otherwise, for the benefit of, or relating
\nto, any current or former employees of or consultants to the Company, any trade
\nor business (whether or not incorporated) which is a member of a controlled
\ngroup including the Company or which is under common control with the Company (a
\n“COMPANY ERISA AFFILIATE”) within the meaning of Section 414 of the Code, or any
\nsubsidiary of the Company, as well as each plan with respect to which the
\nCompany or a Company ERISA Affiliate would incur liability under Section 4069
\n(if such plan has been or were terminated) or Section 4212(c) of ERISA (all such
\nplans, practices and programs are referred to as the “COMPANY<\/p>\n
14-<\/p>\n
EMPLOYEE PLANS”). To the extent requested by Parent, there have been made
\navailable to Parent copies of (i) each such written Company Employee Plan (other
\nthan those referred to in Section 4(b)(4) of ERISA), (ii) the most recent annual
\nreport on Form 5500 series, with accompanying schedules and attachments, filed
\nwith respect to each Company Employee Plan required to make such a filing, and
\n(iii) the most recent actuarial valuation for each Company Employee Plan subject
\nto Title IV of ERISA. For purposes of this Section 2.11 (a), the term
\n“material,” used with respect to any Company Employee Plan, shall mean that the
\nCompany or a Company ERISA Affiliate has incurred or may reasonably be expected
\nto incur obligations in an annual amount exceeding $100,000 with respect to such
\nCompany Employee Plan.<\/p>\n
(b) (i) None of the Company Employee Plans promises or provides retiree
\nmedical or other retiree welfare benefits to any person, and none of the Company
\nEmployee Plans is a “multiemployer plan” as such term is defined in Section
\n3(37) of ERISA; (ii) there has been no “prohibited transaction,” as such term is
\ndefined in Section 406 of ERISA and Section 4975 of the Code, with respect to
\nany Company Employee Plan, which could result in any material liability of the
\nCompany or any of its subsidiaries; (iii) all Company Employee Plans are in
\ncompliance in all material respects with the requirements prescribed by any and
\nall Laws (including ERISA and the Code), currently in effect with respect
\nthereto (including all applicable requirements for notification to participants
\nor the Department of Labor, Pension Benefit Guaranty Corporation (the “PBGC”),
\nInternal Revenue Service (the “IRS”) or Secretary of the Treasury), and the
\nCompany and each of its subsidiaries have performed all material obligations
\nrequired to be performed by them under, are not in any material respect in
\ndefault under or violation of, and have no knowledge of any default or violation
\nby any other party to, any of the Company Employee Plans; (iv) each Company
\nEmployee Plan intended to qualify under Section 401(a) of the Code and each
\ntrust intended to qualify under Section 501(a) of the Code is the subject of a
\nfavorable determination letter from the IRS, and nothing has occurred which may
\nreasonably be expected to impair such determination; (v) all contributions
\nrequired to be made to any Company Employee Plan pursuant to Section 412 of the
\nCode, or the terms of the Company Employee Plan or any collective bargaining
\nagreement, have been made on or before their due dates; (vi) with respect to
\neach Company Employee Plan, no “reportable event” within the meaning of Section
\n4043 of ERISA (excluding any such event for which the 30 day notice requirement
\nhas been waived under the regulations to Section 4043 of ERISA) nor any event
\ndescribed in Section 4062, 4063 or 4041 of ERISA has occurred; and (vii) neither
\nthe Company nor any Company ERISA Affiliate has incurred, nor reasonably expects
\nto incur, any liability under Title IV of ERISA (other than liability for
\npremium payments to the PBGC arising in the ordinary course), except where the
\nfailure of any of the foregoing to be true would not have a Company Material
\nAdverse Effect.<\/p>\n
(c) Section 2.11(c) of the Company Disclosure Schedule sets forth a true and
\ncomplete list as of the date hereof of each current or former employee, officer
\nor director of the Company or any of its subsidiaries who holds (i) any option
\nto purchase Company Common Stock as of the date hereof, together with the number
\nof shares of Company Common Stock subject to such option, the option price of
\nsuch option (to the extent determined as of the date hereof), whether such
\noption is intended to qualify as an ISO, and the expiration date of such option;
\n(ii) any other right, directly or<\/p>\n
15-<\/p>\n
indirectly, to acquire Company Common Stock, together with the number of shares
\nof Company Common Stock subject to such right. Section 2.11(c) of the Company
\nDisclosure Schedule also sets forth the total number of such ISOs, such
\nnonqualified options and such other rights outstanding on the date hereof.<\/p>\n
(d) Section 2.11(d) of the Company Disclosure Schedule sets forth a true and
\ncomplete list of: (i) all employment agreements with officers or employees of
\nthe Company or any of its subsidiaries that provide for annual base salaries in
\nexcess of $150,000; (ii) all agreements with consultants who are individuals
\nobligating the Company or any of its subsidiaries to make annual cash payments
\nin an amount exceeding $150,000; (iii) all severance agreements, programs and
\npolicies of the Company or any of its subsidiaries with or relating to its
\nemployees, in each case with outstanding commitments exceeding $150,000,
\nexcluding programs and policies required to be maintained by law; and (iv) all
\nplans, programs, agreements and other arrangements of the Company or any of its
\nsubsidiaries with or relating to its employees which contain change-in-control
\nprovisions.<\/p>\n
SECTION 2.12 Labor Matters. (a) There are no claims or proceedings pending
\nor, to the knowledge of the Company or any of its subsidiaries, threatened,
\nbetween the Company or any of its subsidiaries and any of their respective
\nemployees, asserting that the Company has committed an unfair labor practice
\nwhich claims or proceedings are currently having or would reasonably be expected
\nto have a Company Material Adverse Effect; (b) neither the Company nor any of
\nits subsidiaries is a party to any collective bargaining agreement or other
\nlabor union contract applicable to persons employed by the Company or its
\nsubsidiaries; and (c) neither the Company nor any of its subsidiaries has any
\nknowledge of any strikes, slowdowns, work stoppages, lockouts, or threats
\nthereof, by or with respect to any employees of the Company or any of its
\nsubsidiaries, in each case which would reasonably be expected to have a Company
\nMaterial Adverse Effect.<\/p>\n
SECTION 2.13 Registration Statement, Joint Proxy Statement\/Prospectus. The
\ninformation supplied by the Company for inclusion or incorporation by reference
\nin the Registration Statement (as defined in Section 3.13) shall not at the time
\nthe Registration Statement is declared effective by the SEC contain any untrue
\nstatement of a material fact or omit to state any material fact required to be
\nstated therein or necessary in order to make the statements therein, in light of
\nthe circumstances under which they were made, not misleading. The information
\nsupplied by the Company for inclusion or incorporation by reference in the joint
\nproxy statement\/prospectus to be sent to the stockholders of the Company in
\nconnection with the meeting of the stockholders of the Company to consider the
\nMerger (the “COMPANY STOCKHOLDERS MEETING”) and to be sent to the stockholders
\nof Parent in connection with the meeting of the stockholders of Parent to
\nconsider the Merger (the “PARENT STOCKHOLDERS MEETING,” and together with the
\nCompany Stockholder Meeting, the “STOCKHOLDERS MEETINGS”) (such joint proxy
\nstatement\/prospectus as amended or supplemented is referred to herein as the
\n“JOINT PROXY STATEMENT\/PROSPECTUS”), will not, on the date the Joint Proxy
\nStatement\/Prospectus (or any amendment thereof or supplement thereto) is first
\nmailed to stockholders, at the time of the Stockholders Meetings, or at the
\nEffective Time, contain any statement which, at such time and in light of the
\ncircumstances under which it shall be made, is false<\/p>\n
16-<\/p>\n
or misleading with respect to any material fact, or shall omit to state any
\nmaterial fact necessary in order to make the statements made therein not false
\nor misleading, or omit to state any material fact necessary to correct any
\nstatement in any earlier communication with respect to the solicitation of
\nproxies for the Stockholders Meetings which has become false or misleading. If
\nat any time prior to the Effective Time any event relating to the Company or any
\nof its respective affiliates, officers or directors should be discovered by the
\nCompany which should be set forth in an amendment to the Registration Statement
\nor a supplement to the Joint Proxy Statement\/Prospectus, the Company shall
\npromptly inform Parent and Merger Sub. Notwithstanding the foregoing, the
\nCompany makes no representation or warranty with respect to any information
\nsupplied by Parent or Merger Sub which is contained in or furnished in
\nconnection with the preparation of the Registration Statement or the Joint Proxy
\nStatement\/Prospectus.<\/p>\n
SECTION 2.14 Title to Property. Neither the Company nor any of its
\nsubsidiaries owns any real property.<\/p>\n
SECTION 2.15 Taxes.<\/p>\n
(a) For purposes of this Agreement, “TAX” or “TAXES” shall mean taxes, fees,
\nlevies, duties, tariffs, imposts, and governmental impositions or charges of any
\nkind in the nature of (or similar to) taxes, payable to any federal, state,
\nlocal or foreign taxing authority, including (without limitation) (i) income,
\nfranchise, profits, gross receipts, ad valorem, net worth, value added, sales,
\nuse, service, real or personal property, special assessments, capital stock,
\nlicense, payroll, withholding, employment, social security, workers’
\ncompensation, unemployment compensation, utility, severance, production, excise,
\nstamp, occupation, premiums, windfall profits, transfer and gains taxes, and
\n(ii) interest, penalties, additional taxes and additions to tax imposed with
\nrespect thereto; and “TAX RETURNS” shall mean returns, reports, and information
\nstatements with respect to Taxes required to be filed with the IRS or any other
\nfederal, foreign, state or provincial taxing authority, domestic or foreign,
\nincluding, without limitation, consolidated, combined and unitary tax returns.<\/p>\n
(b) (i) The Company and its subsidiaries have filed all Tax Returns required
\nto be filed by them, (ii) the Company and its subsidiaries have paid and
\ndischarged all Taxes due in connection with or with respect to the periods or
\ntransactions covered by such Tax Returns and have paid all other Taxes as are
\ndue, except such as are being contested in good faith by appropriate proceedings
\n(to the extent that any such proceedings are required) and with respect to which
\nthe Company is maintaining adequate reserves, and (iii) there are no other Taxes
\nthat would be due if asserted by a taxing authority, except with respect to
\nwhich the Company is maintaining reserves to the extent currently required,
\nunless in the case of clauses (i), (ii) and (iii) above the failure to do so
\nwould not reasonably be expected to have a Company Material Adverse Effect.
\nExcept as does not involve or would not result in liability that would
\nreasonably be expected to have a Company Material Adverse Effect: (i) there are
\nno tax liens on any assets of the Company or any subsidiary thereof; and (ii)
\nneither the Company nor any of its subsidiaries has granted any waiver of any
\nstatute of limitations with respect to, or any extension of a period for the
\nassessment of, any Tax. Neither the Company nor any of its subsidiaries has made
\nany payments, is obligated to make any payments, or is a party<\/p>\n
17-<\/p>\n
to any agreement that under any circumstance could obligate it to make any
\npayments that will not be deductible under Code Section 280G. None of the
\nCompany and its subsidiaries (i) has been a member of an affiliated group filing
\na consolidated federal income Tax Return (other than a group the common parent
\nof which was the Company) or (ii) has any liability for the Taxes of any other
\nperson or entity (other than the Company and its subsidiaries) under Treas. Reg.
\n(S)1.1502-6 (or any similar provision of state, local or foreign law), as
\ntransferee or successor, by contract or otherwise. Neither the Company nor any
\nsubsidiary has consented at any time under Section 341(f)(1) of the Code to have
\nthe provisions of Section 341(f)(2) of the Code apply to any disposition of the
\nassets of the Company or any subsidiary. The accruals and reserves for Taxes
\n(including deferred taxes) reflected in the 1998 Company Balance Sheet are in
\nall material respects adequate to cover all Taxes required to be accrued through
\nthe date thereof (including interest and penalties, if any, thereon and Taxes
\nbeing contested) in accordance with generally accepted accounting principles.<\/p>\n
(c) Neither the Company nor any of its subsidiaries is, or has been, a United
\nStates real property holding corporation (as defined in Section 897(c)(2) of the
\nCode) during the applicable period specified in Section 897(c)(1)(A)(ii) of the
\nCode. To the best knowledge of the Company, neither the Company nor any of its
\nsubsidiaries owns any property of a character, the indirect transfer of which,
\npursuant to this Agreement, would give rise to any material documentary, stamp
\nor other transfer tax.<\/p>\n
SECTION 2.16 Environmental Matters. Except in all cases as, in the aggregate,
\nhave not had and would not reasonably be expected to have a Company Material
\nAdverse Effect, the Company and each of its subsidiaries: (i) have obtained all
\nApprovals which are required to be obtained under all applicable federal, state,
\nforeign or local laws or any regulation, code, plan, order, decree, judgment,
\nnotice or demand letter issued, entered, promulgated or approved thereunder
\nrelating to pollution or protection of the environment, including laws relating
\nto emissions, discharges, releases or threatened releases of pollutants,
\ncontaminants, or hazardous or toxic materials or wastes into ambient air,
\nsurface water, ground water, or land or otherwise relating to the manufacture,
\nprocessing, distribution, use, treatment, storage, disposal, transport, or
\nhandling of pollutants, contaminants or hazardous or toxic materials or wastes
\nby the Company or its subsidiaries or their respective agents (“ENVIRONMENTAL
\nLAWS”); (ii) are in compliance with all terms and conditions of such required
\nApprovals, and also are in compliance with all other limitations, restrictions,
\nconditions, standards, prohibitions, requirements, obligations, schedules and
\ntimetables contained in applicable Environmental Laws; (iii) have not received
\nnotice of any past or present violations of Environmental Laws or any event,
\ncondition, circumstance, activity, practice, incident, action or plan which is
\nreasonably likely to interfere with or prevent continued compliance with or
\nwhich would give rise to any common law or statutory liability, or otherwise
\nform the basis of any claim, action, suit or proceeding, against the Company or
\nany of its subsidiaries based on or resulting from the manufacture, processing,
\ndistribution, use, treatment, storage, disposal, transport or handling, or the
\nemission, discharge or release into the environment, of any pollutant,
\ncontaminant or hazardous or toxic material or waste; and (iv) have taken all
\nactions necessary under applicable Environmental Laws to register any products
\nor materials required to be registered by the Company or its subsidiaries (or
\nany of their respective agents) thereunder.<\/p>\n
18-<\/p>\n
SECTION 2.17 Intellectual Property.<\/p>\n
(a) The Company, directly or indirectly, owns, or is licensed or otherwise
\npossesses legally enforceable rights to use, all patents, trademarks, trade
\nnames, service marks, copyrights, and any applications therefor, know-how,
\ncomputer software programs or applications, and tangible or intangible
\nproprietary information or material that are material to the business of the
\nCompany and its subsidiaries, taken as a whole, as currently conducted or as
\nproposed to be conducted (the “COMPANY INTELLECTUAL PROPERTY RIGHTS”), except
\nwhere the failure to do so would not have a Company Material Adverse Effect.<\/p>\n
(b) The execution and delivery of this Agreement by the Company, and the
\nconsummation of the transactions contemplated hereby, will neither cause the
\nCompany or any of its subsidiaries to be in violation or default in any material
\nrespect under any license, sublicense or agreement with respect to the Company
\nIntellectual Property Rights, nor entitle any other party to any such license,
\nsublicense or agreement to terminate or modify such license, sublicense or
\nagreement, except where such violation, default, termination or modification
\nwould not reasonably be expected to have a Company Material Adverse Effect. No
\nclaims have been asserted or, to the knowledge of the Company, are threatened by
\nany person nor are there any valid grounds, to the knowledge of the Company, for
\nany bona fide claims (i) against the use by the Company or any of its
\nsubsidiaries of the Company Intellectual Property Rights, or (ii) challenging
\nthe ownership by the Company or any of its subsidiaries, or the validity or
\neffectiveness of any of the Company Intellectual Property Rights, except for
\nsuch claims that would not, individually or in the aggregate, reasonably be
\nexpected to have a Company Material Adverse Effect.<\/p>\n
(c) Neither the Company nor any of its subsidiaries has interfered with,
\ninfringed upon, misappropriated, or otherwise come into conflict with any
\nIntellectual Property rights of third parties, and there has never been any
\ncharge, complaint, claim, demand, or notice alleging any such interference,
\ninfringement, misappropriation, or violation (including any claim that the
\nCompany or one of its Subsidiaries must license or refrain from using any
\nIntellectual Property rights of any third party).<\/p>\n
(d) Section 2.17(d) of the Disclosure Schedule identifies each patent or
\nregistration which has been issued to the Company or any of its subsidiaries
\nwith respect to the Company Intellectual Property Rights, identifies each
\npending patent application or application for registration which has been made
\nwith respect to the Company Intellectual Property Rights, and identifies each
\nlicense, agreement, or other permission which the Company or any of its
\nsubsidiaries have granted to any third party with respect to any of the Company
\nIntellectual Property Rights (together with any exceptions). The Company has
\ndelivered to Parent correct and complete copies of all such patents,
\nregistrations, applications, licenses, agreements, and permissions (as amended
\nto date) and has made available to Parent correct and complete copies of all
\nother written documentation evidencing ownership and prosecution (if applicable)
\nof each such item. The Company disclosed all relevant prior art in its patent
\napplications, and it has no reason to believe that any of its patents is invalid
\nor
\n 19-<\/p>\n
unenforceable. With respect to each item of Intellectual Property required to be
\nidentified in (S) 2.17(d) of the Company Disclosure Schedule:<\/p>\n
(i) the Company and its subsidiaries possess all right, title, and
\n interest in and to the item, free and clear of any Lien, license, or other
\n restriction;<\/p>\n
(ii) the item is not subject to any outstanding injunction, judgment,
\n order, decree, ruling, or charge;<\/p>\n
(iii) no action, suit, proceeding, hearing, investigation, charge,
\n complaint, claim, or demand is pending or, to the knowledge of the Company,
\n is threatened, which challenges the legality, validity, enforceability, use,
\n or ownership of the item; and<\/p>\n
(iv) neither the Company nor any of its subsidiaries has agreed to
\n indemnify any Person for or against any interference, infringement,
\n misappropriation, or other conflict with respect to the item.<\/p>\n
SECTION 2.18 Regulatory Matters.<\/p>\n
(a) Since January 1, 1996 through the date hereof (i) there have been no
\nwritten notices, citations or decisions by any governmental or regulatory body
\nthat any product produced, manufactured, marketed or distributed at any time by
\nthe Company or any Company subsidiary (the “COMPANY PRODUCTS”) is defective or
\nfails to meet any applicable standards promulgated by any such governmental or
\nregulatory body, or any other governmental or regulatory body, agency or office
\nof any other jurisdiction to which the Company or any of its subsidiaries is
\nsubject, (ii) there have been no recalls, field notifications or seizures
\nordered or threatened by the United States Food and Drug Administration (the
\n“FDA”) or any other comparable governmental or regulatory body with respect to
\nany of the Company Products and (iii) none of the Company or the Company
\nsubsidiaries have received any warning letter, Section 305 notices from the FDA
\nor so-called Section 483 notices of adverse observations (or comparable notices
\nfrom such other governmental or regulatory bodies).<\/p>\n
(b) Except as would not, individually or in the aggregate, have a Company
\nMaterial Adverse Effect, with respect to each Company Product: (i) the Company
\nand its subsidiaries have obtained all applicable approvals, clearances,
\nauthorizations, licenses (including site licensures) and registrations required
\nby United States or foreign governments or government agencies to permit the
\nmanufacturing, distribution, sale (including reimbursement and pricing),
\nmarketing, export, import or human research (including clinical and non-clinical
\ntrials) of such Product (collectively, “LICENSES”); and (ii) the Company and its
\nsubsidiaries are in full compliance with all terms and conditions of each
\nLicense in each country in which such Company Product is marketed, and with all
\nrequirements pertaining to the manufacturing (including current good
\nmanufacturing practices), marketing, export, import or human research (including
\ngood laboratory practices and clinical and non-clinical trials) of such Company
\nProduct which is not required to be the subject of a License.<\/p>\n
20-<\/p>\n
(c) There are no impediments to issuance of any Company FDA premarket
\napproval application (“PMA”) as to which the Company has received an approvable
\nletter from the FDA other than those set forth in the so-called Section 483
\nNotices described in the Company Disclosure Schedule, and the Company is not
\naware of any reason why it will be unable to address to the FDA’s satisfaction
\nall observations contained in such Notices. The information in such PMAs is true
\nand correct in all material respects and the Company is not aware of any basis
\nupon which the FDA could fail to approve any material aspect of such
\napplications that have not yet received FDA approval.<\/p>\n
SECTION 2.19 Interested Party Transactions. Except for transactions described
\nin the Company SEC Reports filed prior to the date hereof, no event has occurred
\nthat would be required to be reported as a Certain Relationship or Related
\nTransaction, pursuant to Item 404 of Regulation S-K promulgated by the SEC.<\/p>\n
SECTION 2.20 Insurance. All material fire and casualty, general liability,
\nbusiness interruption, product liability, professional liability and sprinkler
\nand water damage insurance policies maintained by the Company or any of its
\nsubsidiaries are with reputable insurance carriers, provide adequate coverage
\nfor all normal risks incident to the business of the Company and its
\nsubsidiaries, taken as a whole, and their properties and assets, and are in
\ncharacter and amount customary for persons engaged in similar businesses and
\nsubject to the same or similar perils or hazards, except for any such failures
\nto maintain insurance policies that, individually or in the aggregate, would not
\nreasonably be expected to have a Company Material Adverse Effect.<\/p>\n
SECTION 2.21 Opinion of Financial Advisor. The Company has been advised by
\nits financial advisor, EVEREN Securities, Inc. that in its opinion, as of the
\ndate hereof, the Merger Consideration to be received by the holders of Shares in
\nthe Merger is fair to the holders of Shares from a financial point of view.<\/p>\n
SECTION 2.22 Brokers. No broker, finder or investment banker (other than
\nEVEREN Securities, Inc., the fees and expenses of whom will be paid by the
\nCompany) is entitled to any brokerage, finder’s or other fee or commission in
\nconnection with the transactions contemplated by this Agreement based upon
\narrangements made by or on behalf of the Company or its subsidiaries or
\naffiliates. The Company has heretofore furnished to Parent a complete and
\ncorrect copy of all agreements between the Company and EVEREN Securities, Inc.
\npursuant to which such firm would be entitled to any payment relating to the
\ntransactions contemplated hereunder.<\/p>\n
SECTION 2.23 Change in Control Payments. Neither the Company nor any of its
\nsubsidiaries have any plans, programs or agreements to which they are parties,
\nor to which they are subject, pursuant to which payments may be required or
\nacceleration of benefits may be required upon a change of control of the
\nCompany.<\/p>\n
21-<\/p>\n
SECTION 2.24 Expenses. The Company has provided to Parent a good faith
\nestimate and description of the expenses of the Company and its subsidiaries
\nwhich the Company expects to incur, or has incurred, in connection with the
\ntransactions contemplated by this Agreement.<\/p>\n
SECTION 2.25 No Existing Discussions. As of the date hereof, the Company is
\nnot engaged, directly or indirectly, in any discussions or negotiations with any
\nother party with respect to an Acquisition Proposal (as defined in Section 4.2).<\/p>\n
SECTION 2.26 Sections 607.0901 and 607.0902 of the FBCA Not Applicable. The
\nBoard of Directors of the Company has taken all actions so that the restrictions
\ncontained in Section 607.0901 of the FBCA applicable to an “affiliated
\ntransaction” (as defined in Section 607.0901) and the restrictions contained in
\nSection 607.0902 will not apply to the execution, delivery or performance of
\nthis Agreement or the respective Stockholder Agreements dated as of the date
\nhereof between Parent and certain stockholders of the Company (collectively, the
\n“STOCKHOLDERS AGREEMENTS”) or the consummation of the Merger or the other
\ntransactions contemplated by this Agreement or by the Stockholders Agreements.<\/p>\n
ARTICLE III<\/p>\n
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB<\/p>\n
Parent and Merger Sub hereby, jointly and severally, represent and warrant to
\nthe Company that, except as set forth in the written disclosure schedule
\ndelivered on or prior to the date hereof by Parent to the Company that is
\narranged in paragraphs corresponding to the numbered and lettered paragraphs
\ncontained in this Article III (the “PARENT DISCLOSURE SCHEDULE”) or disclosed in
\nthe Parent SEC Reports filed prior to the date hereof:<\/p>\n
SECTION 3.1 Organization and Qualification; Subsidiaries. Each of Parent and
\nits subsidiaries is a corporation duly organized, validly existing and in good
\nstanding under the laws of the jurisdiction of its incorporation and has the
\nrequisite corporate power and authority and is in possession of all Approvals
\nnecessary to own, lease and operate the properties it purports to own, operate
\nor lease and to carry on its business as it is now being conducted, except where
\nthe failure to be so organized, existing and in good standing or to have such
\npower, authority and Approvals would not reasonably be expected to have a Parent
\nMaterial Adverse Effect. Each of Parent and its subsidiaries is duly qualified
\nor licensed as a foreign corporation to do business, and is in good standing, in
\neach jurisdiction where the character of its properties owned, leased or
\noperated by it or the nature of its activities makes such qualification or
\nlicensing necessary, except for such failures to be so duly qualified or
\nlicensed and in good standing that would not reasonably be expected to have a
\nParent Material Adverse Effect. A true and complete list as of the date hereof
\nof all of Parent’s subsidiaries, together with the jurisdiction of incorporation
\nof each subsidiary and the percentage of each subsidiary’s outstanding capital
\nstock owned by Parent or another subsidiary, is set forth in Section 3.1 of the
\nParent Disclosure Schedule. Parent does not directly or indirectly own any
\nequity or similar interest in, or any interest convertible into or exchangeable
\nor exercisable for,
\n 22-<\/p>\n
any equity or similar interest in, any corporation, partnership, joint venture
\nor other business association or entity, with respect to which Parent has
\ninvested or is required to invest $200,000 or more, excluding securities in any
\npublicly traded company held for investment by Parent and comprising less than
\nfive percent of the outstanding capital stock of such company.<\/p>\n
SECTION 3.2 Charter and By-Laws. Parent has heretofore furnished to the
\nCompany a complete and correct copy of its Articles of Organization and By-Laws,
\nas most recently restated and subsequently amended to the date hereof. Such
\nArticles of Organization and By-Laws are in full force and effect and neither
\nParent nor Merger Sub is in violation of any of the provisions of its Articles
\nof Incorporation or By-Laws, except where the failure to be in full force and
\neffect or where such violation would not have a Parent Material Adverse Effect.<\/p>\n
SECTION 3.3 Capitalization. As of September 29, 1998, the authorized capital
\nstock of Parent consisted of (i) 60,000,000 shares of Parent Common Stock, of
\nwhich 31,153,765 shares were issued and outstanding, all of which are validly
\nissued, fully paid and non-assessable, 169,115 shares were held in treasury,
\n2,484,097 shares were reserved for future issuance under Parent’s stock option
\nand employee stock purchase plans and (ii) 5,000,000 shares of preferred stock,
\n$.01 par value per share, none of which was issued and outstanding and none of
\nwhich was held in treasury. No material change in such capitalization has
\noccurred between September __, 1998 and the date hereof, except for issuance of
\nParent Common Stock pursuant to Parent stock plans. All options, warrants or
\nother rights, agreements, arrangements or commitments of any character to which
\nParent or a subsidiary or, to Parent’s knowledge, any other person is a party
\nrelating to the issued or unissued capital stock of Parent or any of its
\nsubsidiaries or obligating Parent or any of its subsidiaries to issue or sell
\nany shares of capital stock of, or other equity interests in, Parent or any of
\nits subsidiaries are described in Section 3.3 of the Parent Disclosure Schedule.
\nThere are no obligations, contingent or otherwise, of Parent or any of its
\nsubsidiaries to repurchase, redeem or otherwise acquire any shares of Parent
\nCommon Stock or the capital stock of any subsidiary or to provide funds to or
\nmake any investment (in the form of a loan, capital contribution or otherwise)
\nin any such subsidiary other than guarantees of bank obligations of subsidiaries
\nentered into in the ordinary course of business. All of the outstanding shares
\nof capital stock of each of Parent’s subsidiaries is duly authorized, validly
\nissued, fully paid and nonassessable and all such shares are owned by Parent or
\nanother subsidiary of Parent, free and clear of all security interests, liens,
\nclaims, pledges, agreements, limitations in Parent’s voting rights, charges or
\nother encumbrances of any nature whatsoever (collectively, “PARENT LIENS”).<\/p>\n
SECTION 3.4 Authority Relative to this Agreement. Each of Parent and Merger
\nSub has all necessary corporate power and authority to execute and deliver this
\nAgreement and to perform its obligations hereunder and to consummate the
\ntransactions contemplated hereby. The execution and delivery of this Agreement
\nby Parent and Merger Sub and the consummation by Parent and Merger Sub of the
\ntransactions contemplated hereby have been duly and validly authorized by all
\nnecessary corporate action on the part of Parent and Merger Sub, and no other
\ncorporate proceedings on the part of Parent or Merger Sub are necessary to
\nauthorize this Agreement or to consummate the transactions contemplated thereby
\n(other than the approval of the issuance of the Parent Common<\/p>\n
23-<\/p>\n
Stock by holders of a majority of the outstanding Parent Common Stock present or
\nrepresented by proxy and entitled to vote at the Parent Stockholders Meeting).
\nAs of the date hereof, the Board of Directors of Parent has determined that it
\nis advisable and in the best interest of Parent’s stockholders for Parent to
\nenter into a business combination with the Company upon the terms and subject to
\nthe conditions of this Agreement and has unanimously recommended that the
\nstockholders of Parent approve the issuance of Parent Common Stock in the Merger
\npursuant to this Agreement. This Agreement has been duly and validly executed
\nand delivered by Parent and Merger Sub and, assuming the due authorization,
\nexecution and delivery by the Company, constitutes a legal, valid and binding
\nobligation of Parent and Merger Sub enforceable against each of them in
\naccordance with its terms.<\/p>\n
SECTION 3.5 No Conflict, Required Filings and Consents.<\/p>\n
(a) Section 3.5(a) of the Parent Disclosure Schedule includes a list as of
\nthe date hereof of: (i) all contracts, agreements, commitments or other
\nunderstandings or arrangements to which Parent or any of its subsidiaries is a
\nparty or by which any of them or any of their respective property or assets are
\nbound or affected, but excluding (A) contracts, agreements, commitments or other
\nunderstandings or arrangements entered into in the ordinary course of business
\nand involving, in each case, payments by Parent or any of its subsidiaries of
\nless than $500,000, and sales contracts entered into in the ordinary course of
\nbusiness, and (B) employment agreements and stock option agreements; and (ii)
\nall agreements which, as of the date hereof, Parent is required to file with the
\nSEC pursuant to the requirements of the Exchange Act as “material contracts.”<\/p>\n
(b) (i) neither the Parent nor any of its subsidiaries has breached, is in
\ndefault under, or has received written notice of any breach of or default under,
\nany of the agreements, contracts or other instruments required to be disclosed
\nin Section 3.5(a) of the Parent Disclosure Schedule (ii) to the best knowledge
\nof Parent, no other party to any of the agreements, contracts or other
\ninstrument required to be disclosed in Section 3.5(a) of the Parent Disclosure
\nSchedule has breached or is in default of any of its obligations thereunder, and
\n(iii) to the best knowledge of Parent, each of the agreements, contracts and
\nother instruments required to be disclosed in Section 3.5(a) of the Parent
\nDisclosure Schedule is in full force and effect, except in any such case for
\nbreaches, defaults or failures to be in full force and effect that would not
\nreasonably be expected to have a Parent Material Adverse Effect.<\/p>\n
(c) The execution and delivery of this Agreement by Parent and Merger Sub
\ndoes not, and the performance of this Agreement by Parent and Merger Sub will
\nnot, and the consummation of the transactions contemplated hereby will not, (i)
\nconflict with or violate the Articles of Organization (or Certificate of
\nIncorporation) or By-Laws of Parent or Merger Sub, (ii) conflict with or violate
\nany Laws applicable to Parent or any of its subsidiaries or by which its or
\ntheir respective properties are bound or affected, or (iii) result in any breach
\nof or constitute a default (or an event which with notice or lapse of time or
\nboth would become a default) under, or impair Parent’s or any of its
\nsubsidiaries’ rights or alter the rights or obligations of any third party
\nunder, or give to others any rights of termination, amendment, acceleration or
\ncancellation of, or result in the creation of a Parent<\/p>\n
24-<\/p>\n
Lien on any of the properties or assets of Parent or any of its subsidiaries
\npursuant to, any note, bond, mortgage, indenture, contract, agreement, lease,
\nlicense, permit, franchise or other instrument or obligation to which Parent or
\nany of its subsidiaries is a party or by which Parent or any of its subsidiaries
\nor its or any of their respective properties are bound or affected, except in
\nany such case for any such conflicts, violations, breaches, defaults or other
\noccurrences that would not reasonably be expected to have a Parent Material
\nAdverse Effect.<\/p>\n
(d) The execution and delivery of this Agreement by Parent and Merger Sub
\ndoes not, and the performance of this Agreement by Parent and Merger Sub will
\nnot, require any consent, approval, authorization or permit of, or filing with
\nor notification to, any federal, foreign, state or provincial governmental or
\nregulatory authority, except (i) for applicable requirements, if any, of the
\nSecurities Act, the Exchange Act, the Blue Sky Laws, the pre-merger notification
\nrequirements of the HSR Act, and the filing and recordation of appropriate
\nmerger or other documents as required by the FBCA and the DGCL, and (ii) where
\nthe failure to obtain such consents, approvals, authorizations or permits, or to
\nmake such filings or notifications, would not reasonably be expected to have a
\nParent Material Adverse Effect.<\/p>\n
SECTION 3.6 Compliance. Neither Parent nor any of its subsidiaries is in
\nconflict with, or in default or violation of, (i) any Law or Approval applicable
\nto Parent or any of its subsidiaries or by which its or any of their respective
\nproperties is bound or affected or (ii) any note, bond, mortgage, indenture,
\ncontract, agreement, lease, license, permit, franchise or other instrument or
\nobligation to which Parent or any of its subsidiaries is a party or by which
\nParent or any of its subsidiaries or its or any of their respective properties
\nis bound or affected, except for any such conflicts, defaults or violations
\nwhich would not reasonably be expected to have a Parent Material Adverse Effect.<\/p>\n
SECTION 3.7 SEC Filings; Financial Statements.<\/p>\n
(a) Parent has filed all forms, reports and documents required to be filed
\nwith the SEC since January 1, 1997 (collectively, the “PARENT SEC REPORTS”). The
\nParent SEC Reports (i) were prepared in all material respects in accordance with
\nthe requirements of the Securities Act or the Exchange Act, as the case may be,
\nand (ii) did not at the time they were filed (or if amended or superseded by a
\nfiling prior to the date of this Agreement, then on the date of such filing)
\ncontain any untrue statement of a material fact or omit to state a material fact
\nrequired to be stated therein or necessary in order to make the statements
\ntherein, in the light of the circumstances under which they were made, not
\nmisleading. None of Parent’s subsidiaries is required to file any forms, reports
\nor other documents with the SEC. The redacted sections of Parent’s June 1998
\nSettlement Agreement with VISX, Inc. (which, as redacted, is filed with the
\nParent SEC Reports) contain no provisions that purport to limit, as between
\nParent and the Company, the operation of any non-redacted sections addressing
\nthe applicability of cross-licenses to third parties which acquire or are
\nacquired by Parent.<\/p>\n
(b) Each of the consolidated financial statements (including, in each case,
\nany related notes thereto) contained in the Parent SEC Reports has been prepared
\nin accordance with generally<\/p>\n
25-<\/p>\n
accepted accounting principles applied on a consistent basis throughout the
\nperiods involved (except as may be indicated in the notes thereto) and each
\nfairly presents in all material respects the consolidated financial position of
\nParent and its subsidiaries as at the respective dates thereof and the
\nconsolidated results of its operations and cash flows and stockholders’ equity
\nfor the periods indicated, except that the unaudited interim financial
\nstatements were or are subject to normal and recurring year-end adjustments
\nwhich were not or are not expected to be material in amount.<\/p>\n
SECTION 3.8 Absence of Certain Changes or Events. Except as disclosed in the
\nParent SEC Reports filed prior to the date hereof, since June 30, 1998, Parent
\nhas conducted its business in the ordinary course and other than as disclosed in
\nthe Parent SEC Reports filed prior to the date hereof there has not occurred:
\n(i) any Parent Material Adverse Effect; (ii) any amendments or changes in the
\nArticles of Organization or By-Laws of Parent; (iii) any damage to, destruction
\nor loss of any assets of the Parent (whether or not covered by insurance) that
\nwould reasonably be expected to have a Parent Material Adverse Effect; (iv) any
\nmaterial change by Parent in its accounting methods, principles or practices;
\n(v) any material revaluation by Parent of any of its assets, including without
\nlimitation, writing down the value of inventory or writing off notes or accounts
\nreceivable other than in the ordinary course of business; (vi) any other action
\nor event that would have required the consent of the Company pursuant to Section
\n4.3 had such action or event occurred after the date of this Agreement; or (vii)
\nany sale of a material amount of assets of Parent or any of its subsidiaries
\nexcept in the ordinary course of business.<\/p>\n
SECTION 3.9 No Undisclosed Liabilities. Except as disclosed in the Parent SEC
\nReports filed prior to the date hereof, neither Parent nor any of its
\nsubsidiaries has any liabilities (absolute, accrued, contingent or otherwise),
\nexcept liabilities (a) in the aggregate adequately provided for or disclosed in
\nParent’s balance sheet (including any related notes thereto) as of June 30, 1998
\nincluded in the Parent’s Quarterly Report on 10-Q for the period ended June 30,
\n1998 (the “1998 PARENT BALANCE SHEET”), (b) incurred in the ordinary course of
\nbusiness and not required under generally accepted accounting principles to be
\nreflected on the 1997 Parent Balance Sheet, (c) incurred since June 30, 1998 in
\nthe ordinary course of business and consistent with past practice, (d) incurred
\nin connection with this Agreement, or (e) which would not reasonably be expected
\nto have a Parent Material Adverse Effect.<\/p>\n
SECTION 3.10 Absence of Litigation. Except as disclosed in the Parent SEC
\nReports filed prior to the date hereof, there are no claims, actions, suits,
\nproceedings or investigations pending or, to the knowledge of the Parent,
\nthreatened against the Parent or any of its subsidiaries, or any properties or
\nrights of the Parent or any of its subsidiaries, before any federal, foreign,
\nstate or provincial court, arbitrator or administrative, governmental or
\nregulatory authority or body that would reasonably be expected to have a Parent
\nMaterial Adverse Effect.<\/p>\n
26-<\/p>\n
SECTION 3.11 Employee Benefit Plans; Employment Agreements.<\/p>\n
(a) Section 3.11(a) of the Parent Disclosure Schedule lists as of the date
\nhereof all employee pension plans (as defined in Section 3(2) of ERISA), all
\nmaterial employee welfare plans, (as defined in Section 3(1) of ERISA) and all
\nother material bonus, stock option, stock purchase, incentive, deferred
\ncompensation, supplemental retirement, severance and other similar fringe or
\nemployee benefit plans, programs or arrangements, written or otherwise, for the
\nbenefit of, or relating to, any current or former employees of or consultants to
\nParent, any trade or business (whether or not incorporated) which is a member of
\na controlled group including Parent or which is under common control with Parent
\n(a “PARENT ERISA AFFILIATE”) within the meaning of Section 414 of the Code, or
\nany subsidiary of Parent, as well as each plan with respect to which Parent or a
\nParent ERISA Affiliate would incur liability under Section 4069 (if such plan
\nhas been or were terminated) or Section 4212(c) of ERISA (all such plans,
\npractices, and programs are referred to herein as the “PARENT EMPLOYEE PLANS”).
\nTo the extent requested by the Company, there have been made available to the
\nCompany copies of (i) each such written Parent Employee Plan (other than those
\nreferred to in Section 4(b)(4) of ERISA), (ii) the most recent annual report on
\nform 5500 series, with accompanying schedules and attachments, filed with
\nrespect to each Parent Employee Plan required to make such a filing, and (iii)
\nthe most recent actuarial valuation for each Parent Employee Plan subject to
\nTitle IV of ERISA. For purposes of this Section 3.11 (a) the term material,
\nused with respect to any Parent Employee Plan, shall mean that Parent or a
\nParent ERISA Affiliate has incurred or may reasonably be expected to incur
\nobligations in an annual amount exceeding $400,000 with respect to such Parent
\nEmployee Plan.<\/p>\n
(b) (i) None of the Parent Employee Plans promises or provides retiree
\nmedical or other welfare benefits to any person, and none of the Parent Employee
\nPlans is a “multiemployer plan” as such term is defined in Section 3(37) of
\nERISA; (ii) there has been no “prohibited transaction,” as such term is defined
\nin Section 406 of ERISA and Section 4975 of the Code, with respect to any Parent
\nEmployee Plan, which would result in any material liability of Parent or any of
\nits subsidiaries; (iii) all Parent Employee Plans are in compliance in all
\nmaterial respects with the requirements prescribed by any and all Laws
\n(including ERISA and the Code), currently in effect with respect thereto
\n(including all applicable requirements for notification to participants or the
\nDepartment of Labor, IRS, PBGC or Secretary of the Treasury), and Parent and
\neach of its subsidiaries have performed all material obligations required to be
\nperformed by them under, are not in any material respect in default under or
\nviolation of, and have no knowledge of any default or violation by any other
\nparty to, any of the Parent Employee Plans; (iv) each Parent Employee Plan
\nintended to qualify under Section 401(a) of the Code and each trust intended to
\nqualify under Section 501(a) of the Code is the subject of a favorable
\ndetermination letter from the IRS, and nothing has occurred which may reasonably
\nbe expected to impair such determination; (v) all contributions required to be
\nmade to any Parent Employee Plan pursuant to Section 412 of the Code, or the
\nterms of the Parent Employee Plan or any collective bargaining agreement, have
\nbeen made on or before their due dates; (vi) with respect to each Parent
\nEmployee Plan, no “reportable event” within the meaning of Section 4043 of ERISA
\n(excluding any such event for which the 30 day notice requirement has been
\nwaived under the regulations to Section 4043 of ERISA) nor any event <\/p>\n
27-<\/p>\n
described in Section 4062, 4063 or 4041 of ERISA has occurred; and (vii) neither
\nParent nor any Parent ERISA Affiliate has incurred, nor reasonably expects to
\nincur, any liability under Title IV of ERISA (other than liability for premium
\npayments to the PBGC arising in the ordinary course), except where the failure
\nof any of the foregoing to be true would not have a Parent Material Adverse
\nEffect.<\/p>\n
(c) Section 3.11(c) of the Parent Disclosure Schedule sets forth a true and
\ncomplete list of: (i) all employment agreements with officers or employees of
\nParent or any of its subsidiaries that provide for annual base salaries in
\nexcess of $250,000; (ii) all severance agreements, programs and policies of
\nParent with or relating to its employees in each case with outstanding
\ncommitments exceeding $250,000, excluding programs and policies required to be
\nmaintained by law; and (iii) all plans, programs, agreements and other
\narrangements of Parent with or relating to its employees which contain change-
\nin-control provisions.<\/p>\n
SECTION 3.12 Labor Matters. There are no claims or proceedings pending or,
\nto the knowledge of Parent or any of its subsidiaries, threatened, between
\nParent or any of its subsidiaries and any of their respective employees,
\nasserting that the Company has committed an unfair labor practice which claims
\nor proceedings have or would reasonably be expected to have a Parent Material
\nAdverse Effect; (ii) neither Parent nor any of its subsidiaries is a party to
\nany collective bargaining agreement or other labor union contract applicable to
\npersons employed by Parent or its subsidiaries; and (iii) neither Parent nor any
\nof its subsidiaries has any knowledge of any strikes, slowdowns, work stoppages,
\nlockouts, or threats thereof, by or with respect to any employees of Parent or
\nany of its subsidiaries, in each case which would reasonably be expected to have
\na Parent Material Adverse Effect.<\/p>\n
SECTION 3.13 Registration Statement; Joint Proxy Statement\/Prospectus.
\nSubject to the accuracy of the representations of the Company in Section 2.13,
\nthe registration statement (the “REGISTRATION STATEMENT”) pursuant to which the
\nParent Common Stock to be issued in the Merger will be registered with the SEC
\nshall not, at the time the Registration Statement (including any amendments or
\nsupplements thereto) is declared effective by the SEC, contain any untrue
\nstatement of a material fact or omit to state any material fact necessary in
\norder to make the statements included therein, in light of the circumstances
\nunder which they were made, not misleading. The information supplied by Parent
\nfor inclusion or incorporation in the Joint Proxy Statement\/Prospectus will not,
\non the date the Joint Proxy Statement\/Prospectus is first mailed to
\nstockholders, at the time of the Stockholders Meetings and at the Effective
\nTime, contain any statement which, at such time and in light of the
\ncircumstances under which it shall be made, is false or misleading with respect
\nto any material fact, or will omit to state any material fact necessary in order
\nto make the statements therein not false or misleading; or omit to state any
\nmaterial fact necessary to correct any statement in any earlier communication
\nwith respect to the solicitation of proxies for the Stockholders Meetings which
\nhas become false or misleading. If at any time prior to the Effective Time any
\nevent relating to Parent, Merger Sub or any of their respective affiliates,
\nofficers or directors should be discovered by Parent or Merger Sub which should
\nbe set forth in an amendment to the Registration Statement or a supplement to
\nthe Joint Proxy Statement\/Prospectus, Parent or Merger Sub will promptly inform<\/p>\n
28-<\/p>\n
the Company. Notwithstanding the foregoing, Parent and Merger Sub make no
\nrepresentation or warranty with respect to any information supplied by the
\nCompany which is contained in any of the foregoing documents. Notwithstanding
\nthe foregoing, Parent makes no representation or warranty with respect to any
\ninformation supplied by the Company which is contained in, or furnished in
\nconnection with the preparation of, the Registration Statement or the Joint
\nProxy Statement\/Prospectus.<\/p>\n
SECTION 3.14 Title to Property. Neither the Parent nor any of its
\nsubsidiaries owns any real property.<\/p>\n
SECTION 3.15 Taxes. Parent and its subsidiaries have filed all United States
\nfederal income Tax Returns and all other material Tax Returns required to be
\nfiled by them, and Parent and its subsidiaries have paid and discharged all
\nTaxes due in connection with or with respect to the periods or transactions
\ncovered by such Tax Returns and have paid all other Taxes as are due, except
\nsuch as are being contested in good faith by appropriate proceedings (to the
\nextent that any such proceedings are required) and there are no other Taxes that
\nwould be due if asserted by a taxing authority, except with respect to which
\nParent is maintaining reserves to the extent currently required unless the
\nfailure to do so would not reasonably be expected to have a Parent Material
\nAdverse Effect. Except as does not involve or would not result in liability to
\nParent that would reasonably be expected to have a Parent Material Adverse
\nEffect: (i) there are no tax liens on any assets of Parent or any subsidiary
\nthereof; and (ii) neither Parent nor any of its subsidiaries has granted any
\nwaiver of any statute of limitations with respect to, or any extension of a
\nperiod for the assessment of, any Tax. The accruals and reserves for Taxes
\n(including deferred taxes) reflected in the 1998 Parent Balance Sheet are in all
\nmaterial respects adequate to cover all Taxes required to be accrued through the
\ndate thereof (including interest and penalties, if any, thereon and Taxes being
\ncontested) in accordance with generally accepted accounting principles.<\/p>\n
SECTION 3.16 Environmental Matters. Except in all cases as, in the
\naggregate, have not had and would not reasonably be expected to have a Parent
\nMaterial Adverse Effect, Parent and each of its subsidiaries to the best of
\nParent’s knowledge: (i) have obtained all Approvals which are required to be
\nobtained under all applicable Environmental Laws by Parent or its subsidiaries
\n(or their respective agents); (ii) are in compliance with all terms and
\nconditions of such required Approvals, and also are in compliance with all other
\nlimitations, restrictions, conditions, standards, prohibitions, requirements,
\nobligations, schedules and timetables contained in applicable Environmental
\nLaws; (iii) have not received notice of any past or present violations of
\nEnvironmental Laws, or any event, condition, circumstance, activity, practice,
\nincident, action or plan which is reasonably likely to interfere with or prevent
\ncontinued compliance with or which would give rise to any common law or
\nstatutory liability, or otherwise form the basis of any claim, action, suit or
\nproceeding, against Parent or any of its subsidiaries based on or resulting from
\nthe manufacture, processing, distribution, use, treatment, storage, disposal,
\ntransport, or handling, or the emission, discharge or release into the
\nenvironment, of any pollutant, contaminant or hazardous or toxic material or
\nwaste; and (iv) have taken all actions necessary under applicable Environmental
\nLaws to register any products or <\/p>\n
29-<\/p>\n
materials required to be registered by Parent or its subsidiaries (or any of
\ntheir respective agents) thereunder.<\/p>\n
SECTION 3.17 Intellectual Property.<\/p>\n
(a) Parent, directly or indirectly, owns, or is licensed or otherwise
\npossesses legally enforceable rights to use, all trademarks, trade names,
\nservice marks, copyrights, and any applications therefor, know-how, computer
\nsoftware programs or applications, and tangible or intangible proprietary
\ninformation or material that are material to the business of the Company and its
\nsubsidiaries, taken as a whole, as currently conducted or as proposed to be
\nconducted (the “PARENT INTELLECTUAL PROPERTY RIGHTS”), except where the failure
\nto do so would not have a Parent Material Adverse Effect.<\/p>\n
(b) The execution and delivery of this Agreement by Parent, and the
\nconsummation of the transactions contemplated hereby, will neither cause Parent
\nor any of its subsidiaries to be in violation or default in any material respect
\nunder any license, sublicense or agreement with respect to the Parent
\nIntellectual Property Rights, nor entitle any other party to any such license,
\nsublicense or agreement to terminate or modify such license, sublicense or
\nagreement, except where such violation, default, termination or modification
\nwould not reasonably be expected to have a Parent Material Adverse Effect. No
\nclaims have been asserted or, to the knowledge of Parent, are threatened by any
\nperson nor are there any valid grounds, to the knowledge of Parent, for any bona
\nfide claims (i) against the use by Parent or any of its subsidiaries of Parent
\nIntellectual Property Rights, or (ii) challenging the ownership by Parent or any
\nof its subsidiaries, or the validity or effectiveness of any of Parent
\nIntellectual Property Rights, except for such claims that would not,
\nindividually or in the aggregate, reasonably be expected to have a Parent
\nMaterial Adverse Effect.<\/p>\n
(c) Except as disclosed in the Parent SEC Reports filed prior to the date
\nhereof, neither the Parent nor any of its subsidiaries has interfered with,
\ninfringed upon, misappropriated, or otherwise come into conflict with any
\nIntellectual Property rights of third parties, and there has never been any
\ncharge, complaint, claim, demand, or notice alleging any such interference,
\ninfringement, misappropriation, or violation (including any claim that Parent or
\none of its Subsidiaries must license or refrain from using any Intellectual
\nProperty rights of any third party).<\/p>\n
SECTION 3.18 Regulatory Matters.<\/p>\n
(a) Since January 1, 1996 through the date hereof (i) there have been no
\nwritten notices, citations or decisions by any governmental or regulatory body
\nthat any product produced, manufactured, marketed or distributed at any time by
\nthe Company or any Company subsidiary (the “PARENT PRODUCTS”) is defective or
\nfails to meet any applicable standards promulgated by any such governmental or
\nregulatory body, or any other governmental or regulatory body, agency or office
\nof any other jurisdiction to which the Company or any of its subsidiaries is
\nsubject, (ii) there have been no recalls, field notifications or seizures
\nordered or threatened by the FDA or any other comparable governmental or
\nregulatory body with respect to any of the Parent Production and (iii) none of
\nthe <\/p>\n
30-<\/p>\n
Parent or the Parent subsidiaries have received any warning letter, Section
\n305 notices from the FDA or so-called Section 483 notices of adverse
\nobservations (or comparable notices from such other governmental or regulatory
\nbodies).<\/p>\n
(b) Except as would not, individually or in the aggregate, have a Parent
\nMaterial Adverse Effect, with respect to each Parent Product: (i) the Parent and
\nits subsidiaries have obtained all applicable Licenses to permit the
\nmanufacturing, distribution, sale (including reimbursement and pricing),
\nmarketing, export, import or human research (including clinical and non-clinical
\ntrials) of such Product and (ii) Parent and its subsidiaries are in full
\ncompliance with all terms and conditions of each License in each country in
\nwhich such Parent Product is marketed, and with all requirements pertaining to
\nthe manufacturing (including current good manufacturing practices), marketing,
\nexport, import or human research (including good laboratory practices and
\nclinical and non-clinical trials) of such Parent Product which is not required
\nto be the subject of a License.<\/p>\n
(c) There are no impediments to issuance of any Parent FDA premarket
\napproval application (“PMA”) as to which Parent has received an approvable
\nletter from the FDA other than those set forth in any so-called Section 483
\nNotices described in the Parent Disclosure Schedule, and Parent is not aware of
\nany reason why it will be unable to address to the FDA’s satisfaction all
\nobservations contained in such Notices.<\/p>\n
SECTION 3.19 Interested Party Transactions. Since the date of Parent’s 1998
\nproxy statement, other than as described therein, no event has occurred that
\nwould be required to be reported as a Certain Relationship or Related
\nTransaction, pursuant to Item 404 of Regulation S-K promulgated by the SEC.<\/p>\n
SECTION 3.20 Financial Capacity. Parent has available sufficient funds to
\nsatisfy its obligations to pay the Cash Consideration for all the Shares.<\/p>\n
SECTION 3.21 Opinion of Financial Advisor. Parent has received the opinion
\nof its financial advisor, Hambrecht & Quist, LLC, that, as of the date hereof,
\nthe Merger Consideration is fair to Parent from a financial point of view.<\/p>\n
SECTION 3.22 Brokers. No broker, finder or investment banker (other than
\nHambrecht & Quist, LLC, the fees and expenses of which will be paid by Parent)
\nis entitled to any brokerage, finder’s or other fee or commission in connection
\nwith the transactions contemplated by this Agreement based upon arrangements
\nmade by or on behalf of Parent or Merger Sub.<\/p>\n
SECTION 3.23 Ownership of Merger Sub; No Prior Activities.<\/p>\n
(a) Merger Sub was formed solely for the purpose of engaging in the
\ntransactions contemplated by this Agreement.<\/p>\n
31-<\/p>\n
(b) As of the date hereof and the Effective Time, except for obligations or
\nliabilities incurred in connection with its incorporation or organization and
\nthe transactions contemplated by this Agreement and except for this Agreement
\nand any other agreements or arrangements contemplated by this Agreement, Merger
\nSub has not and will not have incurred, directly or indirectly, through any
\nsubsidiary or affiliate, any obligations or liabilities or engaged in any
\nbusiness activities of any type or kind whatsoever or entered into any
\nagreements or arrangements with any person.<\/p>\n
ARTICLE IV<\/p>\n
CONDUCT OF BUSINESS PENDING THE MERGER<\/p>\n
SECTION 4.1 Conduct of Business by the Company Pending the Merger. The
\nCompany covenants and agrees that, during the period from the date of this
\nAgreement and continuing until the earlier of the termination of this Agreement
\nor the Effective Time, unless Parent shall otherwise agree in writing and except
\nas otherwise contemplated by this Agreement, the Company shall conduct its
\nbusiness and shall cause the businesses of its subsidiaries to be conducted in
\nthe ordinary course of business; and the Company shall use all reasonable
\ncommercial efforts to preserve substantially intact the business organization of
\nthe Company and its subsidiaries taken as a whole, to keep available the
\nservices of the present officers, employees and consultants of the Company and
\nits subsidiaries taken as a whole and to preserve the present relationships of
\nthe Company and its subsidiaries with customers, suppliers and other persons
\nwith which the Company or any of its subsidiaries has significant business
\nrelations. By way of amplification and not limitation, except as contemplated
\nby this Agreement, neither the Company nor any of its subsidiaries shall, during
\nthe period from the date of this Agreement and continuing until the earlier of
\nthe termination of this Agreement or the Effective Time, directly or indirectly
\ndo, or propose to do, any of the following without the prior written consent of
\nParent:<\/p>\n
(a) amend or otherwise change the Articles of Incorporation or By-Laws of
\nthe Company or any of its subsidiaries;<\/p>\n
(b) issue, sell, pledge, dispose of or encumber, or authorize the issuance,
\nsale, pledge, disposition or encumbrance of, any shares of capital stock of any
\nclass, or any options, warrants, convertible securities or other rights of any
\nkind to acquire any shares of capital stock, or any other ownership interest
\n(including, without limitation, any phantom interest) in the Company or any of
\nits subsidiaries, except that the Company may grant options for Company Common
\nStock under the Company Stock Plan to newly hired employees in the ordinary
\ncourse of business in an amount not in excess of 100,000 shares in the aggregate
\nand the Company may issue shares of Company Common Stock upon the exercise of
\noptions, warrants and other rights listed in Section 2.3 of the Company
\nDisclosure Schedule.<\/p>\n
(c) sell, pledge, dispose of or encumber any assets of the Company or any
\nof its subsidiaries (except for (i) sales of assets in the ordinary course of
\nbusiness and in a manner consistent with past <\/p>\n
32-<\/p>\n
practice, (ii) dispositions of obsolete or worthless assets, and (iii) sales of
\nother assets not in excess of $100,000 in the aggregate);<\/p>\n
(d) (i) declare, set aside, make or pay any dividend or other distribution
\n(whether in cash, stock or property or any combination thereof) in respect of
\nany of its capital stock, except that a wholly owned subsidiary of the Company
\nmay declare and pay a dividend to its parent, (ii) split, combine or reclassify
\nany of its capital stock or issue or authorize or propose the issuance of any
\nother securities in respect of, in lieu of or in substitution for shares of its
\ncapital stock, or (iii) amend the terms or change the period of exercisability
\nof, purchase, repurchase, redeem or otherwise acquire, or permit any subsidiary
\nto purchase, repurchase, redeem or otherwise acquire, any of its securities or
\nany securities of its subsidiaries, including, without limitation, shares of
\nCompany Common Stock or any option, warrant or right, directly or indirectly, to
\nacquire shares of Company Common Stock, or propose to do any of the foregoing;
\nprovided, however, that the Company may enter into agreements with holders of
\nStock Options in which they waive any right to accelerated vesting of the Stock
\nOptions in exchange for a promise by the Company that any substitute stock
\noption for Parent Common Stock will become immediately exercisable in the event
\nthe Company terminates the holder’s employment following the Merger without
\ncause;<\/p>\n
(e) (i) acquire (by merger, consolidation, or acquisition of stock or
\nassets) any corporation, partnership or other business organization or division
\nthereof; (ii) incur any indebtedness for borrowed money or issue any debt
\nsecurities or assume, guarantee or endorse or otherwise as an accommodation
\nbecome responsible for, the obligations of any person or, except in each case in
\nthe ordinary course of business consistent with past practice, make any loans or
\nadvances; (iii) enter into or amend any contract or agreement that would be
\nmaterial to the Company and its subsidiaries taken as a whole; (iv) authorize
\nany capital expenditures or purchase of fixed assets which are, in the
\naggregate, in excess of $100,000 for the Company and its subsidiaries taken as a
\nwhole; or (v) enter into or amend any contract, agreement, commitment or
\narrangement to effect any of the matters prohibited by this Section 4.1(e);<\/p>\n
(f) (i) increase the compensation payable or to become payable to its
\nexecutive officers, directors or employees except in the ordinary course of
\nbusiness consistent with past practice; (ii) grant any additional severance or
\ntermination pay to, or enter into any new employment or severance agreements
\nwith, any director, executive officer or current employee of the Company or its
\nsubsidiaries; (iii) enter into any employment or severance agreement with any
\nnew employees of the Company or its subsidiaries except in the ordinary course
\nof business consistent with past practice; or (iv) establish, adopt, enter into
\nor amend any collective bargaining, profit sharing, thrift, restricted stock,
\npension, retirement, deferred compensation or severance plan, trust, fund or
\npolicy for the benefit of current or former directors, officers or employees of
\nthe Company or any of its subsidiaries, except, in each case, as may be required
\nby law;<\/p>\n
(g) except as required under generally accepted accounting principles, take
\nany action to change in any material respect the accounting policies or
\nprocedures (including, without limitation, procedures with respect to revenue
\nrecognition, payments of accounts payable and collection of <\/p>\n
33-<\/p>\n
accounts receivable) of the Company or any subsidiary (except in the case of
\nsubsidiaries to conform to the Company’s policies and procedures);<\/p>\n
(h) make any material tax election inconsistent with past practice or
\nsettle or compromise any material federal, state, local or foreign tax liability
\nor agree to an extension of a statute of limitations;<\/p>\n
(i) pay, discharge or satisfy any claims, liabilities or obligations
\n(absolute, accrued, asserted or unasserted, contingent or otherwise) material to
\nthe Company and its subsidiaries taken as a whole, other than the payment,
\ndischarge or satisfaction in the ordinary course of business and consistent with
\npast practice of liabilities reflected or reserved against in the financial
\nstatements contained in the Company SEC Reports filed prior to the date of this
\nAgreement or incurred in the ordinary course of business and consistent with
\npast practice; or<\/p>\n
(j) take, or agree in writing or otherwise to take, any of the actions
\ndescribed in Sections 4.1 (a) through (i) above.<\/p>\n
SECTION 4.2 No Solicitation.<\/p>\n
(a) The Company shall not, directly or indirectly, through any officer,
\ndirector, employee, representative or agent of the Company or any of its
\nsubsidiaries, (i) solicit, initiate or encourage the initiation of any inquiries
\nor proposals regarding any merger, sale of substantial assets, sale of shares of
\ncapital stock (including without limitation by way of a tender offer) or similar
\ntransactions involving the Company or any subsidiaries of the Company other than
\nthe Merger (any of the foregoing inquiries or proposals being referred to herein
\nas an “ACQUISITION PROPOSAL”), (ii) engage in negotiations or discussions
\nconcerning, or provide any nonpublic information to any person relating to, any
\nAcquisition Proposal or (iii) agree to, approve or recommend any Acquisition
\nProposal. Nothing contained in this Section 4.2(a) shall prevent the Board of
\nDirectors of the Company from considering, negotiating, approving and
\nrecommending to the stockholders of the Company a bona fide Acquisition Proposal
\nnot solicited in violation of this Agreement, provided the Board of Directors of
\nthe Company concludes in good faith that the Acquisition Proposal would
\nconstitute a Superior Proposal (as defined below) and determines in good faith
\n(upon advice of outside counsel) that it is required to do so in order to
\ndischarge properly its fiduciary duties.<\/p>\n
(b) The Company shall immediately notify Parent after receipt of any
\nAcquisition Proposal, or any modification of or amendment to any Acquisition
\nProposal, or any request for nonpublic information relating to the Company or
\nany of its subsidiaries in connection with an Acquisition Proposal or for access
\nto the properties, books or records of the Company or any subsidiary by any
\nperson or entity that informs the Board of Directors of the Company or such
\nsubsidiary that it is considering making, or has made, an Acquisition Proposal.
\nSuch notice to Parent shall be made orally and in writing, and shall identify
\nthe person or entity making the Acquisition Proposal and set forth the material
\nterms and condition of the Acquisition Payment. The notice shall also indicate
\nwhether the Company is providing or intends to provide the person making the
\nAcquisition Proposal with access to information concerning the Company as
\nprovided in Section 4.2(c).<\/p>\n
34-<\/p>\n
(c) If the Board of Directors of the Company receives a request for material
\nnonpublic information by a person who makes, or indicates that it is considering
\nmaking, a bona fide Acquisition Proposal, and the Board of Directors determines
\nin good faith and upon the advice of independent counsel that it is required to
\ncause the Company to act as provided in this Section 4.2(c) in order to
\ndischarge properly the directors’ fiduciary duties, then, provided the person
\nmaking the Acquisition Proposal has executed a confidentiality agreement
\nsubstantially similar to the one then in effect between the Company and Parent,
\nthe Company may provide such person with access to information regarding the
\nCompany.<\/p>\n
(d) The Company shall ensure that the officers and directors of the Company
\nand its subsidiaries and any investment banker or other advisor or
\nrepresentative retained by the Company are aware of the restrictions described
\nin this Section 4.2.<\/p>\n
(e) For purposes of this Agreement, “Superior Proposal” means a bona fide
\nAcquisition Proposal that the Board of Directors of the Company determines in
\nits good faith judgment to be more favorable to the Company’s stockholders than
\nthe Merger (based on the written opinion, with only customary qualifications, of
\nthe Company’s independent financial advisor that the value of the consideration
\nof the Company’s stockholders provided for in such proposal exceeds the value of
\nthe consideration to the Company’s stockholders provided for in the Merger) and
\nfor which financing, to the extent required, is then committed or which, in the
\ngood faith judgment of the Board of Directors of the Company (based on the
\nwritten advice of the Company’s independent financial advisor), is reasonably
\ncapable of being obtained by the person making the proposal.<\/p>\n
ARTICLE V<\/p>\n
ADDITIONAL AGREEMENTS<\/p>\n
SECTION 5.1 HSR Act. As promptly as practicable after the date of the
\nexecution of this Agreement, if required, the Company and Parent shall file
\nnotifications under and in accordance with the HSR Act in connection with the
\nMerger and the transactions contemplated hereby and respond as promptly as
\npracticable to any inquiries received from the Federal Trade Commission and the
\nAntitrust Division of the Department of Justice for additional information or
\ndocumentation and respond as promptly as practicable to all inquiries and
\nrequests received from any State Attorney General or other governmental
\nauthority in connection with antitrust matters.<\/p>\n
SECTION 5.2 Joint Proxy Statement Prospectus; Registration Statement. As
\npromptly as practicable after the execution of this Agreement, the Company and
\nParent shall prepare and file with the SEC preliminary proxy materials which
\nshall constitute the Joint Proxy Statement\/Prospectus and the Registration
\nStatement of the Parent with respect to the Parent Common Stock to be issued in
\nconnection with the Merger. As promptly as practicable after comments are
\nreceived from the SEC thereon and after the furnishing by the Company and<\/p>\n
35-<\/p>\n
Parent of all information required to be contained therein, the Company and
\nParent shall file with the SEC a combined proxy and Registration Statement on
\nForm S-4 (or on such other form as shall be appropriate) relating to the
\nadoption of this Agreement and approval of the transactions contemplated hereby
\nby the stockholders of the Company and the approval by the stockholders of
\nParent to increase the number of authorized shares of Parent Company Stock and
\nthe issuance of Parent Common Stock in the Merger pursuant to this Agreement,
\nand shall use all reasonable efforts to cause the Registration Statement to
\nbecome effective, and to mail the Joint Proxy Statement\/Prospectus to their
\nrespective shareholders, as soon thereafter as practicable. The Joint Proxy
\nStatement\/Prospectus shall include the recommendation of the Boards of Directors
\nof the Company and Parent in favor of the Merger, subject to the last sentence
\nof Section 5.3.<\/p>\n
SECTION 5.3 Stockholders Meetings. The Company and Parent shall call and
\nhold their respective Stockholders Meetings as promptly as practicable and in
\naccordance with applicable laws for the purpose of voting upon the approval of
\nthe Merger and the issuance of the Parent Common Stock, and Parent and the
\nCompany shall use their reasonable best efforts to hold the Stockholders
\nMeetings on the same day (and at the same time of such day) and as soon as
\npracticable after the date on which the Registration Statement becomes
\neffective. Unless otherwise required under the applicable fiduciary duties of
\nthe respective directors of the Company or Parent, as determined by such
\nrespective directors in good faith after consultation with and based upon the
\nadvice of their respective outside legal counsel, the Company and Parent shall
\nuse all reasonable efforts to solicit from their respective stockholders proxies
\nin favor of adoption of this Agreement and approval of the transactions
\ncontemplated hereby or the issuance of Parent Company Stock in the Merger
\npursuant to this Agreement, as the case may be, and shall take all other action
\nreasonably necessary or advisable to secure the vote or consent of stockholders
\nto obtain such approvals.<\/p>\n
SECTION 5.4 Access to Information; Confidentiality. Upon reasonable notice
\nand subject to restrictions contained in confidentiality agreements to which
\nsuch party is subject (from which such party shall use reasonable efforts to be
\nreleased), the Company and Parent shall each (and shall cause each of their
\nsubsidiaries to) afford to the officers, employees, accountants, counsel and
\nother representatives of the other, reasonable access, during the period to the
\nEffective Time, to all of its properties, books, contracts, commitments and
\nrecords and, during such prior period, the Company and Parent each shall (and
\nshall cause each of their subsidiaries to) furnish promptly to the other all
\ninformation concerning its business, properties and personnel as such other
\nparty may reasonably request, and each shall make available to the other the
\nappropriate individuals (including attorneys, accountants and other
\nprofessionals) for discussion of the other’s business, properties and personnel
\nas either Parent or the Company may reasonably request. Each party shall keep
\nsuch information confidential in accordance with the terms of the mutual non-
\ndisclosure letter, dated August, 1998 (the “CONFIDENTIALITY LETTER”), between
\nParent and the Company.<\/p>\n
SECTION 5.5 Consents; Approvals. The Company and Parent shall each use all
\nreasonable efforts to obtain all consents, waivers, approvals, authorizations or
\norders (including, <\/p>\n
36-<\/p>\n
without limitation, all United States and foreign governmental and regulatory
\nrulings and approvals), and the Company and Parent shall make all filings
\n(including, without limitation, all filings with United States and foreign
\ngovernmental or regulatory agencies) required in connection with the
\nauthorization, execution and delivery of this Agreement by the Company and
\nParent and the consummation by them of the transactions contemplated hereby, in
\neach case as promptly as practicable. The Company and Parent shall furnish
\npromptly all information required to be included in the Joint Proxy
\nStatement\/Prospectus and the Registration Statement, or for any application or
\nother filing to be made pursuant to the rules and regulations of any United
\nStates or foreign governmental body in connection with the transactions
\ncontemplated by this Agreement.<\/p>\n
SECTION 5.6 Agreements with Respect to Affiliates. The Company shall
\ndeliver to Parent, prior to the date the Registration Statement becomes
\neffective under the Securities Act, a letter (the “AFFILIATE LETTER”)
\nidentifying all persons who are, and at the time of the Company Stockholders
\nMeeting are expected to be, “affiliates” of the Company, for purposes of Rule
\n145 under the Securities Act (“RULE 145”). The Company shall use its best
\nefforts to cause each person who is identified as an “affiliate” in the
\nAffiliate Letter to deliver, prior to the Effective Time, a written agreement
\n(an “AFFILIATE AGREEMENT”) in substantially the form of Exhibit 5.6(a).<\/p>\n
SECTION 5.7 Indemnification and Insurance.<\/p>\n
(a) The Certificate of Incorporation and By-Laws of the Surviving
\nCorporation shall contain the provisions with respect to indemnification set
\nforth in the Articles of Incorporation and By-Laws of the Company, which
\nprovisions shall not be amended, repealed or otherwise modified for a period of
\nsix years from the Effective Time in any manner that would adversely affect the
\nrights thereunder of individuals who at or before the Effective Time were
\ndirectors, officers, employees or agents of the Company, unless such
\nmodification is required by law.<\/p>\n
(b) The Company shall, to the fullest extent permitted under applicable law
\nor under the Company’s Articles of Incorporation or By-Laws and regardless of
\nwhether the Merger becomes effective, indemnify and hold harmless and, after the
\nEffective Time, Parent and the Surviving Corporation shall, to the fullest
\nextent permitted under applicable law or under the Surviving Corporation’s
\nCertificate of Incorporation or By-Laws, indemnify and hold harmless, each
\npresent and former director, officer or employee of the Company or any of its
\nsubsidiaries (collectively, the “INDEMNIFIED PARTIES”) against any costs or
\nexpenses (including attorneys’ fees), judgments, fines, losses, claims, damages,
\nliabilities and amounts paid in settlement in connection with any claim, action,
\nsuit, proceeding or investigation, whether civil, criminal, administrative or
\ninvestigative, (x) arising out of or pertaining to the transactions contemplated
\nby this Agreement or (y) otherwise with respect to any acts or omissions
\noccurring at or prior to the Effective Time, to the same extent as provided in
\nthe Company’s Articles of Incorporation or By-Laws or any applicable contract or
\nagreement as in effect on the date hereof, in each case for a period of six
\nyears after the date hereof. In the event of any such claim, action, suit,
\nproceeding or investigation (whether arising before or after the Effective
\nTime), (i) any counsel retained by <\/p>\n
37-<\/p>\n
the Indemnified Parties for any period after the Effective Time shall be
\nreasonably satisfactory to the Surviving Corporation, (ii) after the Effective
\nTime, Parent or the Surviving Corporation shall pay the reasonable fees and
\nexpenses of such counsel, promptly after statements therefor are received, and
\n(iii) Parent and the Surviving Corporation will cooperate in the defense of any
\nsuch matter; provided, however, that neither Parent nor the Surviving
\nCorporation shall be liable for any settlement effected without its written
\nconsent (which consent shall not be unreasonably withheld); and provided,
\nfurther, that, in the event that any claim or claims for indemnification are
\nasserted or made within such six-year period, all rights to indemnification in
\nrespect of any such claim or claims shall continue until the disposition of any
\nand all such claims. The Indemnified Parties as a group may retain only one law
\nfirm to represent them with respect to any single action unless there is, under
\napplicable standards of professional conduct, a conflict on any significant
\nissue between the positions of any two or more Indemnified Parties.<\/p>\n
(c) Parent and the Surviving Corporation shall honor and fulfill in all
\nrespects the obligations of the Company pursuant to indemnification agreements
\nwith the Company’s directors and officers existing at or before the Effective
\nTime.<\/p>\n
(d) For a period of three years after the Effective Time, Parent shall
\nmaintain or cause the Surviving Corporation to maintain in effect, if available,
\ndirectors’ and officers’ liability insurance covering those persons who are
\ncurrently covered by the Company’s directors’ and officers’ liability insurance
\npolicy (a copy of which has been made available to Parent) on terms comparable
\nto those now applicable to directors and officers of the Company; provided,
\nhowever, that in no event shall Parent or the Surviving Corporation be required
\nto expend in excess of 150% of the annual premium currently paid by the Company
\nfor such coverage; and provided further, that if the premium for such coverage
\nexceeds such amount, Parent or the Surviving Corporation shall purchase a policy
\nwith the greatest coverage available for such 150% of the annual premium.<\/p>\n
(e) This Section 5.7 shall survive the consummation of the Merger at the
\nEffective Time, is intended to benefit the Company, the Surviving Corporation
\nand the Indemnified Parties, shall be binding on all successors and assigns of
\nParent and the Surviving Corporation and shall be enforceable by the Indemnified
\nParties, their heirs and their representatives.<\/p>\n
SECTION 5.8 Notification of Certain Matters. The Company shall give prompt
\nnotice to Parent, and Parent shall give prompt notice to the Company, of (i) the
\noccurrence or nonoccurrence of any event known to such party the occurrence or
\nnonoccurrence of which would be likely to cause any representation or warranty
\ncontained in this Agreement to become materially untrue or inaccurate, or (ii)
\nany failure of the Company, Parent or Merger Sub, as the case may be, materially
\nto comply with or satisfy any covenant, condition or agreement to be complied
\nwith or satisfied by it hereunder; provided, however, that the delivery of any
\nnotice pursuant to this Section shall not limit or otherwise affect the remedies
\navailable hereunder to the party receiving such notice; and provided further
\nthat failure to give such notice shall not be <\/p>\n
38-<\/p>\n
treated as a breach of covenant for the purposes of Sections 6.2(a) or 6.3(a)
\nunless the failure to give such notice results in material prejudice to the
\nother party.<\/p>\n
SECTION 5.9 Further Action\/Tax Treatment. Upon the terms and subject to the
\nconditions hereof each of the parties hereto shall use all reasonable efforts to
\ntake, or cause to be taken, all actions and to do, or cause to be done, all
\nother things necessary, proper or advisable to consummate and make effective as
\npromptly as practicable the transactions contemplated by this Agreement, to
\nobtain in a timely manner all necessary waivers, consents and approvals and to
\neffect all necessary registrations and filings, and otherwise to satisfy or
\ncause to be satisfied all conditions precedent to its obligations under this
\nAgreement. The foregoing covenant shall not include any obligation by Parent to
\nagree to divest, abandon, license or take similar action with respect to any
\nassets (tangible or intangible) of Parent or the Company. Each of Parent,
\nMerger Sub and the Company shall use its reasonable best efforts (which shall
\nnot include increasing the Merger Consideration or the Stock Consideration or
\nthe Per Share Stock Consideration) to cause the Merger to qualify, and will not
\n(both before and after consummation of the Merger) take any actions which to its
\nknowledge would reasonably be expected to prevent the Merger from qualifying as
\na reorganization under the provisions of Section 368 of the Code. Following the
\nMerger, Parent will cause the Surviving Corporation to continue the Company’s
\nhistoric business or use a significant portion of the Company’s historic
\nbusiness assets in a business.<\/p>\n
SECTION 5.10 Public Announcements. Parent and the Company shall consult with
\neach other before issuing any press release with respect to the Merger or this
\nAgreement and shall not issue any such press release or make any such public
\nstatement without the prior consent of the other party, which shall not be
\nunreasonably withheld; provided, however, that a party may, without the prior
\nconsent of the other party, issue such press release or make such public
\nstatement as may upon the advice of counsel be required by law or the rules and
\nregulations of the Nasdaq National Market System, if it has used all reasonable
\nefforts to consult with the other party prior thereto.<\/p>\n
SECTION 5.11 Accountants’ Letters. Upon reasonable notice from the other,
\nParent and the Company shall use their respective best efforts to cause Deloitte
\n& Touche LLP and Arthur Andersen LLP, respectively, to deliver to Parent or the
\nCompany, as the case may be, a letter, dated within 2 business days of the
\nEffective Date of the S-4 Registration Statement covering such matters as are
\nrequested by Parent or the Company and as are customarily addressed in
\naccountant’s “comfort” letters.<\/p>\n
SECTION 5.12 Board Representation. As of the Effective Time or as soon as
\npracticable thereafter, the Board of Directors of Parent will take such action
\nas is necessary to cause Glenn Bradley to be elected to serve as a director of
\nParent for the vacant term expiring at Parent’s annual meeting in 2000 (the
\n“Outside Director”), and Randy W. Frey to be elected as a director of Parent
\nfor the vacant term expiring at Parent’s annual meeting in 2001. The Board of
\nDirectors of Parent will nominate the Outside Director for re-election at
\nParent’s annual meeting in 2000, provided that such Outside Director (x) is
\n“independent” as such term is applied under <\/p>\n
39-<\/p>\n
the listing requirements for the Nasdaq National Market and (y) shall have
\nattended at least 75% of all meetings of the Board of Directors, by telephone or
\nin person, during the previous fiscal year. In addition, one person designated
\nby the Company prior to the mailing of the Joint Proxy Statement\/Prospectus,
\nsubject to the reasonable approval of Parent, shall be entitled to attend
\nmeetings of the Board of Directors until the third anniversary of the Effective
\nTime, subject to the Board’s right to have portions of any such meeting open
\nonly to members of the Board. If the observer named in the Joint Proxy
\nStatement\/Prospectus is unable to continue as an observer until the end of the
\nterm, Parent agrees that the directors named by the Company may designate a
\nreplacement. Parent agrees to pay the observer’s reasonable travel expenses in
\nconnection with the observer’s attendance at Board meetings.<\/p>\n
SECTION 5.13 Nasdaq Listing. Each of the Company and Parent shall use its
\nreasonable best efforts to continue the quotation of the Company Common Stock
\nand Parent Common Stock, respectively, on The Nasdaq National Market during the
\nterm of this Agreement.<\/p>\n
SECTION 5.14 Listing of Parent Shares. Parent shall use its reasonable best
\nefforts to cause the Parent Shares to be issued in the Merger to be approved for
\nquotation, upon official notice of issuance, on The Nasdaq National Market.<\/p>\n
SECTION 5.15 Joint Shareholder Communications Efforts. The Company and
\nParent agree to use their reasonable best efforts to conduct a joint
\ncommunications program, including presentations and meetings, with institutional
\nstockholders of both the Company and Parent, for the purpose of communicating
\nthe synergy, strategy and prospects for the combined companies after the Merger.
\nSuch presentations and meetings shall take place in those cities of the United
\nStates where such institutional stockholders are located and shall be conducted
\nfor 7 to 10 business days during the three-week period preceding the Stockholder
\nMeetings.<\/p>\n
SECTION 5.16 Dismissal of Civil Actions. As soon as practicable after the
\ndate hereof, the Company shall stipulate to the dismissal, without prejudice, of
\nall claims it has alleged against Parent and Pillar Point Partners in Autonomous
\n ———-
\nTechnologies Corporation v. Pillar Point Partners (Civil Action No. 96-515 JJF).
\n———————— ——————— <\/p>\n
SECTION 5.17 Issuance of CIBA Shares. Prior to the Effective Time, the
\nCompany shall issue 171,713 shares (subject to any required anti-dilution
\nadjustments) of Company Common Stock to CIBA Vision Group Management, Inc.
\n(“CIBA”) in full satisfaction of its obligation to deliver shares of capital
\nstock under the Strategic Alliance Agreement dated May 15, 1995 between the
\nCompany and CIBA.<\/p>\n
40-<\/p>\n
ARTICLE VI<\/p>\n
CONDITIONS TO THE MERGER<\/p>\n
SECTION 6.1 Conditions to Obligation of Each Party to Effect the Merger.
\nThe respective obligations of each party to effect the Merger shall be subject
\nto the satisfaction at or prior to the Effective Time of the following
\nconditions:<\/p>\n
(a) Effectiveness of the Registration Statement. The Registration
\nStatement shall have been declared effective by the SEC under the Securities
\nAct. No stop order suspending the effectiveness of the Registration Statement
\nshall have been issued by the SEC and no proceedings for that purpose and no
\nsimilar proceeding in respect of the Joint Proxy Statement\/Prospectus shall have
\nbeen initiated or threatened by the SEC;<\/p>\n
(b) Stockholder Approval. This Agreement and the Merger shall have been
\napproved and adopted by the requisite vote of the stockholders of the Company
\nand the issuance of Parent Common Stock in the Merger pursuant to this Agreement
\nshall have been approved by the requisite vote of the stockholders of Parent;<\/p>\n
(c) HSR Act. The waiting period, if any, applicable to the consummation of
\nthe Merger under the HSR Act shall have expired or been terminated;<\/p>\n
(d) No Injunctions or Restraints. No temporary restraining order,
\npreliminary or permanent injunction or other order issued by any court of
\ncompetent jurisdiction or other legal restraint or prohibition preventing the
\nconsummation of the Merger shall be in effect, nor shall any proceeding brought
\nby any administrative agency or commission or other governmental authority or
\ninstrumentality, domestic or foreign, seeking any of the foregoing be pending;
\nand<\/p>\n
(e) Nasdaq. The Parent Shares to be issued in the Merger shall have been
\napproved, upon official notice of issuance, for quotation on The Nasdaq National
\nMarket.<\/p>\n
SECTION 6.2 Additional Conditions to Obligations of Parent and Merger Sub.
\nThe obligations of Parent and Merger Sub to effect the Merger are also subject
\nto the following conditions:<\/p>\n
(a) Representations and Warranties. The representations and warranties of
\nthe Company contained in this Agreement shall be true and correct in all
\nrespects at and as of the Effective Time as if made at and as of such time,
\nexcept for (i) changes contemplated by this Agreement and (ii) those
\nrepresentations and warranties which address matters only as of a particular
\ndate (which shall have been true and correct as of such date with the same force
\nand effect as if made at and as of the Effective Time), and Parent and Merger
\nSub shall have received a certificate to such effect signed on behalf of the
\nCompany by the President and the Chief Financial Officer of the Company;<\/p>\n
41-<\/p>\n
(b) Agreements and Covenants. The Company shall have performed or complied
\nin all material respects with all agreements and covenants required by this
\nAgreement to be performed or complied with by it at or prior to the Effective
\nTime, and Parent and Merger Sub shall have received a certificate to such effect
\nsigned on behalf of the Company by the President and the Chief Financial Officer
\nof the Company;<\/p>\n
(c) Consents Obtained. All consents, waivers, approvals, authorizations or
\norders required to be obtained, and all filings required to be made, by the
\nCompany for the due authorization, execution and delivery of this Agreement and
\nthe consummation by it of the transactions contemplated hereby shall have been
\nobtained and made by the Company;<\/p>\n
(d) Tax Opinion. Unless the Merger shall be restructured as the Alternative
\nTaxable Merger, Parent shall have received a written opinion from Ropes & Gray,
\nin form and substance reasonably satisfactory to Parent, to the effect that the
\nMerger will constitute a reorganization within the meaning of Section 368 of the
\nCode;<\/p>\n
(e) Affiliate Agreements. Parent shall have received from each person who
\nis identified in the Affiliate Letter as an “affiliate” of the Company, an
\nAffiliate Agreement, and such Affiliate Agreement shall be in full force and
\neffect;<\/p>\n
(f) No Litigation. There shall not be pending or threatened any suit,
\naction, proceeding or investigation: (i) challenging or seeking to restrain or
\nprohibit the consummation of the Merger or any of the other transactions
\ncontemplated by this Agreement; (ii) relating to the Merger and seeking to
\nobtain from Parent or any of its subsidiaries any damages that may be material
\nto Parent: (iii) seeking to prohibit or limit in any material respect Parent’s
\nability to vote, receive dividends with respect to or otherwise exercise
\nownership rights with respect to the stock of the Surviving Corporation; (iv)
\nthat would materially and adversely affect the right of the Surviving
\nCorporation to own the assets or operate the business of the Company (v) which,
\nif adversely determined, could have a Material Adverse Effect on the Company or
\nParent.<\/p>\n
(g) Stockholders Agreement. The Stockholders Agreements shall be in full
\nforce and effect as of the Effective Time.<\/p>\n
SECTION 6.3 Additional Conditions to Obligation of the Company. The
\nobligation of the Company to effect the Merger is also subject to the following
\nconditions:<\/p>\n
(a) Representations and Warranties. The representations and warranties of
\nParent and Merger Sub contained in this Agreement shall be true and correct in
\nall respects on and as of the Effective Time, except for (i) changes
\ncontemplated by this Agreement and (ii) those representations and warranties
\nwhich address matters only as of a particular date (which shall have been true
\nand correct as of such date) with the same force and effect as if made on and as
\nof <\/p>\n
42-<\/p>\n
the Effective Time, and the Company shall have received a certificate to such
\neffect signed on behalf of Parent by the President and the Chief Financial
\nOfficer of Parent;<\/p>\n
(b) Agreements and Covenants. Parent and Merger Sub shall have performed
\nor complied in all material respects with all agreements and covenants required
\nby this Agreement to be performed or complied with by them on or prior to the
\nEffective Time, and the Company shall have received a certificate to such effect
\nsigned on behalf of Parent by the President and the Chief Financial Officer of
\nParent;<\/p>\n
(c) Consents Obtained. All consents, waivers, approvals, authorizations or
\norders required to be obtained, and all filings required to be made, by Parent
\nand Merger Sub for the authorization, execution and delivery of this Agreement
\nand the consummation by them of the transactions contemplated hereby shall have
\nbeen obtained and made by Parent and Merger Sub;<\/p>\n
ARTICLE VII<\/p>\n
TERMINATION<\/p>\n
SECTION 7.1 Termination. This Agreement may be terminated at any time prior
\nto the Effective Time, notwithstanding approval thereof by the stockholders of
\nthe Company or Parent:<\/p>\n
(a) by mutual written consent duly authorized by the Boards of Directors of
\nParent and the Company; or<\/p>\n
(b) by either Parent or the Company, if the Merger shall not have been
\nconsummated by February 28, 1999 (provided that the right to terminate this
\nAgreement under this Section 7.1(b) shall not be available to any party whose
\nfailure to fulfill any obligation under this Agreement has been the cause of or
\nresulted in the failure of the Merger to occur on or before such date); or<\/p>\n
(c) by either Parent or the Company, if a court of competent jurisdiction or
\ngovernmental, regulatory or administrative agency or commission shall have
\nissued a nonappealable final order, decree or ruling or taken any other action
\nhaving the effect of permanently restraining, enjoining or otherwise prohibiting
\nthe Merger (provided that the right to terminate this Agreement under this
\nSection 7.1(c) shall not be available to any party who has not complied with its
\nobligations under Section 5.9 and such noncompliance materially contributed to
\nthe issuance of any such order, decree or ruling or the taking of such action);
\nor<\/p>\n
(d) by Parent, if the requisite vote of the stockholders of the Company
\nshall not have been obtained by February 28, 1999, or by the Company, if the
\nrequisite vote of the stockholders of Parent shall not have been obtained by
\nFebruary 28, 1999 (provided that this right shall not be available to any party
\nwho has not complied with its obligation under Section 5.3); or<\/p>\n
43-<\/p>\n
(e) by Parent, if: (i) the Board of Directors of the Company shall
\nwithdraw, modify or change its approval or recommendation of this Agreement or
\nthe Merger in a manner adverse to Parent or shall have resolved to do so; (ii)
\nthe Board of Directors of the Company shall have recommended to the stockholders
\nof the Company an Alternative Transaction (as defined below); or (iii) a tender
\noffer or exchange offer for 25% or more of the outstanding shares of Company
\nCommon Stock is commenced (other than by Parent or an affiliate of Parent) and
\nthe Board of Directors of the Company either fails to recommend that the
\nstockholders of the Company not tender their shares in such tender or exchange
\noffer or takes no position on the acceptance of the tender or exchange offer; or<\/p>\n
(f) by the Company, if the Board of Directors of the Company shall have
\ndetermined to recommend an Acquisition Proposal to its stockholders after
\ndetermining, pursuant to Section 4.2 that such Acquisition Proposal constitutes
\na Superior Proposal, and the Company gives Parent at least three Business Days
\nprior notice of its intention to effect such termination pursuant to this
\nsubsection, and the Company makes the payment required pursuant to Section
\n7.3(b) of this Agreement;<\/p>\n
(g) by Parent, (i) if any representation or warranty of the Company set
\nforth in this Agreement that is qualified by materiality was not true when made
\nor if any such representation or warranty not qualified by materiality was not
\ntrue in all material respects when made, or (ii) upon the Company’s material
\nbreach of any covenant or agreement set forth in this Agreement, such that the
\nconditions set forth in Section 6.2(a) or 6.2(b) would not be satisfied, or by
\nthe Company, (x) if any representation or warranty of Parent set forth in this
\nAgreement that is qualified by materiality was not true when made or if any such
\nrepresentation or warranty not qualified by materiality was not true in all
\nmaterial respects when made, or (y) upon Parent’s material breach of any
\ncovenant or agreement set forth in this Agreement, such that the conditions set
\nforth in Section 6.3(a) or 6.3(b) would not be satisfied (any of such events
\nbeing referred to as a “TERMINATING BREACH”), provided, that, the non-breaching
\nparty shall have given the breaching party at least 10 business days’ prior
\nnotice and provided, further, that if such Terminating Breach is curable prior
\nto February 28, 1999 by the breaching party through the exercise of its
\nreasonable best efforts and for so long as the breaching party continues to
\nexercise such reasonable best efforts, the non-breaching party may not terminate
\nthis Agreement under this Section 7.1(g); or<\/p>\n
(h) by Parent, if any representation or warranty of the Company shall have
\nbecome untrue such that the condition set forth in Section 6.2(a) would not be
\nsatisfied, or by the Company, if any representation or warranty of Parent shall
\nhave become untrue such that the condition set forth in Section 6.3(a) would not
\nbe satisfied, in either case other than by reason of a Terminating Breach and
\nafter 10 business days’ prior written notice.<\/p>\n
As used herein, “Alternative Transaction” means any of (i) a transaction
\npursuant to which any person (or group of persons) other than Parent or its
\naffiliates (a “THIRD PARTY”) acquires or would acquire more than 25% of the
\noutstanding Shares, whether from the Company or pursuant <\/p>\n
44-<\/p>\n
to a tender offer or exchange offer or otherwise, (ii) a merger or other
\nbusiness combination involving the Company pursuant to which any Third Party
\nacquires more than 25% of the outstanding equity securities of the Company or
\nthe entity surviving such merger or business combination, or (iii) any other
\ntransaction pursuant to which any Third Party acquires or would acquire control
\nof assets (including for this purpose the outstanding equity securities of
\nsubsidiaries of the Company, and the entity surviving any merger or business
\ncombination including any of them) of the Company or any of its subsidiaries
\nhaving a fair market value (as determined by the Board of Directors of the
\nCompany in good faith) equal to more than 25% of the fair market value of all
\nthe assets of the Company and its subsidiaries, taken as a whole, immediately
\nprior to such transaction.<\/p>\n
Notwithstanding the foregoing, if the staff of the SEC reviews the Joint
\nProxy Statement\/Prospectus or if any administrative agency or commission or
\nother governmental authority or instrumentality shall have instituted an
\ninquiry, either formal or informal, into the Merger, Parent may by written
\nnotice to the Company extend the February 28, 1999 date in this Section 7.1 for
\nup to 30 additional days provided that (i) Parent is not in breach in any
\nmaterial respect of its obligations under this Agreement and (ii) Parent agrees
\nto extend credit to the Company under its revolving credit line with Parent in
\nadditional amounts not to exceed $1,500,000 during the period of any extension.<\/p>\n
SECTION 7.2 Effect of Termination. In the event of the termination of this
\nAgreement pursuant to Section 7.1, this Agreement shall forthwith become void
\nand there shall be no liability on the part of any party hereto or any of its
\naffiliates, directors, officers or stockholders except (i) as set forth in
\nSection 7.3 and Section 8.1 hereof, and (ii) nothing herein shall relieve any
\nparty from liability for any willful breach hereof prior to such termination.<\/p>\n
SECTION 7.3 Fees and Expenses.<\/p>\n
(a) Except as set forth in this Section 7.3, all fees and expenses incurred
\nin connection with this Agreement and the transactions contemplated hereby shall
\nbe paid by the party incurring such expenses, whether or not the Merger is
\nconsummated; provided, however, that Parent and the Company shall share equally
\nall fees and expenses, other than accountants’ and attorneys’ fees, incurred in
\nconnection with the printing and filing of the Joint Proxy Statement\/Prospectus
\n(including any preliminary materials related thereto) and the Registration
\nStatement (including financial statements and exhibits) and any amendments or
\nsupplements thereto.<\/p>\n
(b) The Company shall pay Parent a fee of $2,600,000 (the “COMPANY FEE”)
\nupon the first to occur of the following events:<\/p>\n
(i) the termination of this Agreement by Parent pursuant to Section
\n 7.1(d) if the stockholders of the Company shall not have approved and adopted
\n the Merger Agreement by February 28, 1999 and a proposal for an Alternative
\n Transaction shall have been made prior to the Company Stockholders Meeting;
\n or<\/p>\n
45-<\/p>\n
(ii) the termination of this Agreement by Parent pursuant to Section
\n 7.1(e) or the Company pursuant to Section 7.1(f); or<\/p>\n
(iii) the termination of this Agreement by Parent pursuant to Section
\n 7.1(g) on account of a Terminating Breach by the Company.<\/p>\n
ARTICLE VIII<\/p>\n
GENERAL PROVISIONS<\/p>\n
SECTION 8.1 Effectiveness of Representations, Warranties and Agreements;
\nKnowledge, Etc.<\/p>\n
(a) Except as otherwise provided in this Section 8.1, the representations,
\nwarranties and agreements of each party hereto shall remain operative and in
\nfull force and effect regardless of any investigation made by or on behalf of
\nany other party hereto, any person controlling any such party or any of their
\nofficers or directors, whether prior to or after the execution of this
\nAgreement. The representations, warranties and agreements in this Agreement
\nshall terminate at the Effective Time or upon the termination of this Agreement
\npursuant to Section 7.1, as the case may be, except that the agreements set
\nforth in Article I and Section 5.7 shall survive the Effective Time indefinitely
\nand those set forth in Section 7.3 shall survive such termination indefinitely.
\nThe Confidentiality Letter shall survive termination of this Agreement as
\nprovided therein.<\/p>\n
(b) Reference to a party’s “knowledge” in this Agreement refers to the
\nactual knowledge of the directors and officers of that party who are required to
\nfile reports under Section 16(a) of the Exchange Act.<\/p>\n
SECTION 8.2 Notices. All notices and other communications given or made
\npursuant hereto shall be in writing and shall be deemed to have been duly given
\nor made if and when delivered personally or by overnight courier to the parties
\nat the following addresses or sent by facsimile transmission, with confirmation
\nreceived and a copy placed in the United States mail to the following addresses,
\nto the telecopy numbers specified below (or at such other address or telecopy
\nnumber for a party as shall be specified by like notice):<\/p>\n
46-<\/p>\n
(a) If to Parent or Merger Sub:<\/p>\n
Attention: General Counsel<\/p>\n
Telephone No.: (781) 890-1234
\n Telecopier No.: (781) 890-6739<\/p>\n
With a copy to:<\/p>\n
Keith F. Higgins, Esq.
\n Ropes & Gray
\n One International Place
\n Boston, MA 02110<\/p>\n
Telephone No.: (617) 951-7000
\n Telecopier No.: (617) 951-7050<\/p>\n
(b) If to the Company:<\/p>\n
Attention: President<\/p>\n
Telephone No.: (407) 384-1600
\n Telecopier No.: (407) 277-0047<\/p>\n
With a copy to:<\/p>\n
William A. Grimm, Esq.
\n Gray, Harrison & Robinson, P.A.
\n 201 East Pine Street, Suite 1200
\n Orlando, FL 37801<\/p>\n
Telephone No.: (407) 843-8880
\n Telecopier No.: (407) 244-5690<\/p>\n
SECTION 8.3 Certain Definitions. For purposes of this Agreement, the term:<\/p>\n
(a) “affiliates” means a person that directly or indirectly, through one or
\nmore intermediaries, controls, is controlled by, or is under common control
\nwith, the first mentioned person; including, without limitation, any partnership
\nor joint venture in which the first mentioned person (either alone, or through
\nor together with any other subsidiary) has, directly or indirectly, an interest
\nof 5% or more;<\/p>\n
47-<\/p>\n
(b) “beneficial owner” with respect to any shares of Company Common Stock
\nmeans a person who shall be deemed to be the beneficial owner of such shares (as
\nsuch term is defined in Rule 13d-3 of the Exchange Act);<\/p>\n
(c) “business day” means any day other than a day on which banks in The
\nCommonwealth of Massachusetts are required or authorized to be closed;<\/p>\n
(d) “control” (including the terms “controlled by” and “under common
\ncontrol with”) means the possession, directly or indirectly or as trustee or
\nexecutor, of the power to direct or cause the direction of the management or
\npolicies of a person, whether through the ownership of stock, as trustee or
\nexecutor, by contract or credit arrangement or otherwise;<\/p>\n
(e) “generally accepted accounting principles” shall mean United States
\ngenerally accepted accounting principles.<\/p>\n
(f) “person” means an individual, corporation, partnership, association,
\ntrust, unincorporated organization, other entity or group (as defined in Section
\n13(d)(3) of the Exchange Act); and<\/p>\n
(g) “subsidiary” or “subsidiaries” of the Company, Parent or any other
\nperson means any corporation, partnership, joint venture or other legal entity
\nof which the Company, the Surviving Corporation, Parent or such other person, as
\nthe case may be (either alone or through or together with any other subsidiary),
\nowns, directly or indirectly, more than 50% of the stock or other equity
\ninterests the holders of which are generally entitled to vote for the election
\nof the board of directors or other governing body of such corporation or other
\nlegal entity.<\/p>\n
SECTION 8.4 Amendment. This Agreement may be amended by the parties hereto
\nby action taken by or on behalf of their respective Boards of Directors at any
\ntime prior to the Effective Time; provided, however, that, after approval of the
\nMerger by the stockholders of the Company, no amendment may be made which by law
\nrequires further approval by such stockholders without such further approval.
\nThis Agreement may not be amended except by an instrument in writing signed by
\nthe parties hereto.<\/p>\n
SECTION 8.5 Waiver. At any time prior to the Effective Time, any party
\nhereto may with respect to any other party hereto (a) extend the time for the
\nperformance of any of the obligations or other acts, (b) waive any inaccuracies
\nin the representations and warranties contained herein or in any document
\ndelivered pursuant hereto, or (c) waive compliance with any of the agreements or
\nconditions contained herein. Any such extension or waiver shall be valid only
\nif set forth in an instrument in writing signed by the party or parties to be
\nbound thereby.<\/p>\n
SECTION 8.6 Headings. The headings contained in this Agreement are for
\nreference purposes only and shall not affect in any way the meaning or
\ninterpretation of this Agreement.<\/p>\n
48-<\/p>\n
SECTION 8.7 Severability. If any term or other provision of this Agreement
\nis invalid, illegal or incapable of being enforced by any rule of law, or public
\npolicy, all other conditions and provisions of this Agreement shall nevertheless
\nremain in full force and effect so long as the economic or legal substance of
\nthe transactions contemplated hereby is not affected in any manner materially
\nadverse to any party. Upon such determination that any term or other provision
\nis invalid, illegal or incapable of being enforced, the parties hereto shall
\nnegotiate in good faith to modify this Agreement so as to effect the original
\nintent of the parties as closely as possible in an acceptable manner to the end
\nthat the transactions contemplated hereby are fulfilled to the fullest extent
\npossible.<\/p>\n
SECTION 8.8 Entire Agreement. This Agreement constitutes the entire
\nagreement and supersedes all prior agreements and undertakings (other than the
\nConfidentiality Letters), both written and oral, among the parties, or any of
\nthem, with respect to the subject matter hereof.<\/p>\n
SECTION 8.9 Assignment; Guarantee of Merger Sub Obligations. This Agreement
\nshall not be assigned by operation of law or otherwise, except that Merger Sub
\nmay assign all or any of its rights hereunder to any wholly owned subsidiary of
\nthe Parent provided that no such assignment shall relieve the assigning party of
\nits obligations hereunder. Parent guarantees the full and punctual performance
\nby Merger Sub of all the obligations hereunder of Merger Sub or any such
\nassignees.<\/p>\n
SECTION 8.10 Parties in Interest. This Agreement shall be binding upon and
\ninure solely to the benefit of each party hereto, and nothing in this Agreement,
\nexpress or implied, is intended to or shall confer upon any other person any
\nright, benefit or remedy of any nature whatsoever under or by reason of this
\nAgreement, including, without limitation, by way of subrogation, other than
\nSection 5.7 (which is intended to be for the benefit of the Indemnified Parties
\nand may be enforced by such Indemnified Parties).<\/p>\n
SECTION 8.11 Failure or Indulgence Not Waiver; Remedies Cumulative. No
\nfailure or delay on the part of any party hereto in the exercise of any right
\nhereunder shall impair such right or be construed to be a waiver of, or
\nacquiescence in, any breach of any representation, warranty or agreement herein,
\nnor shall any single or partial exercise of any such right preclude any other or
\nfurther exercise thereof or of any other right. All rights and remedies
\nexisting under this Agreement are cumulative to, and not exclusive of, any
\nrights or remedies otherwise available.<\/p>\n
SECTION 8.12 Governing Law. This Agreement shall be governed by, and
\nconstrued in accordance with, the internal laws of the State of Delaware
\napplicable to contracts executed and fully performed within the State of
\nDelaware.<\/p>\n
SECTION 8.13 Counterparts. This Agreement may be executed in one or more
\ncounterparts, and by the different parties hereto in separate counterparts, each
\nof which when executed shall be deemed to be an original but all of which taken
\ntogether shall constitute one and the same agreement.<\/p>\n
49-<\/p>\n
IN WITNESS WHEREOF, Parent, Merger Sub and the Company have caused this
\nAgreement to be executed as of the date first written above by their respective
\nofficers thereunto duly authorized.<\/p>\n
SUMMIT TECHNOLOGY, INC.<\/p>\n
By: \/s\/ Robert J. Palmisano
\n ————————————–
\n Name: Robert J. Palmisano
\n Title: Chief Executive Officer<\/p>\n
ALPINE ACQUISITION CORP.<\/p>\n
By: \/s\/ Robert J. Palmisano
\n ————————————–
\n Name: Robert J. Palmisano
\n Title: Chief Executive Officer<\/p>\n
AUTONOMOUS TECHNOLOGIES
\n CORPORATION<\/p>\n
By: \/s\/ Randy W. Frey
\n ——————————–
\n Name: Randy W. Frey
\n Title: Chief Executive Officer<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[6805,8967],"corporate_contracts_industries":[9436],"corporate_contracts_types":[9622,9626],"class_list":["post-43122","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-autonomous-technologies-corp","corporate_contracts_companies-summit-autonomous-inc","corporate_contracts_industries-health__instruments","corporate_contracts_types-planning","corporate_contracts_types-planning__merger"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43122","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43122"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43122"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43122"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43122"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}