EXHIBIT 10.1
AGREEMENT AND PLAN OF MERGER
by and between
Technology Visions Group, Inc.,
a Delaware corporation
and
Sutura, Inc.,
a Delaware corporation
Dated as of November 22, 2004
TABLE OF CONTENTS
Page
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ARTICLE 1 DEFINITIONS.........................................................1
ARTICLE 2 THE MERGER..........................................................1
2.1 THE MERGER..................................................1
2.2 THE CLOSING.................................................1
2.3 ACTIONS AT CLOSING..........................................2
2.4 EFFECT OF MERGER............................................2
2.5 CERTIFICATE OF INCORPORATION................................2
2.6 BYLAWS......................................................2
2.7 DIRECTORS AND OFFICERS......................................2
ARTICLE 3 MERGER CONSIDERATION AND MANNER OF CONVERSION.......................2
3.1 MERGER CONSIDERATION........................................2
3.2 DISSENTERS' RIGHTS..........................................3
3.3 CONVERSION OF RIGHTS........................................3
3.4 RIGHTS AS STOCKHOLDERS; STOCK TRANSFERS.....................3
3.5 FRACTIONAL SHARES...........................................3
3.6 PAYMENT FOR SHARES..........................................4
ARTICLE 4 REPRESENTATION AND WARRANTIES OF THE COMPANY........................4
4.1 ORGANIZATION................................................4
4.2 AUTHORITY...................................................4
4.3 NO CONSENTS.................................................5
4.4 NO CONFLICTS................................................5
4.5 CAPITAL STRUCTURE...........................................5
4.6 OBLIGATIONS WITH RESPECT TO CAPITAL STOCK...................5
4.7 SUBSIDIARIES................................................5
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4.8 FINANCIAL STATEMENTS........................................6
4.9 NO UNDISCLOSED LIABILITIES..................................6
4.10 BUSINESS CHANGES............................................6
4.11 PROPERTIES..................................................6
4.12 TAXES.......................................................7
4.13 COMPLIANCE WITH LAWS........................................7
4.14 LITIGATION..................................................7
4.15 CONTRACTS...................................................7
4.16 INTELLECTUAL PROPRIETARY RIGHTS.............................7
4.17 INSURANCE...................................................7
4.18 ENVIRONMENTAL COMPLIANCE....................................8
4.19 EMPLOYMENT MATTERS..........................................8
4.20 BROKERS OR FINDERS..........................................8
4.21 BOOKS AND RECORDS...........................................8
4.22 REGULATORY COMPLIANCE.......................................8
ARTICLE 5 REPRESENTATION AND WARRANTIES OF THE PURCHASER......................9
5.1 ORGANIZATION................................................9
5.2 AUTHORITY...................................................9
5.3 NO CONSENTS.................................................9
5.4 NO CONFLICTS...............................................10
5.5 CAPITAL STRUCTURE..........................................10
5.6 OBLIGATIONS WITH RESPECT TO CAPITAL STOCK..................10
5.7 SUBSIDIARIES...............................................10
5.8 FINANCIAL STATEMENTS.......................................11
5.9 NO UNDISCLOSED LIABILITIES.................................11
5.10 BUSINESS CHANGES...........................................11
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5.11 PROPERTIES.................................................11
5.12 TAXES......................................................12
5.13 COMPLIANCE WITH LAWS.......................................12
5.14 LITIGATION.................................................12
5.15 CONTRACTS..................................................12
5.16 INTELLECTUAL PROPRIETARY RIGHTS............................12
5.17 INSURANCE..................................................12
5.18 ENVIRONMENTAL COMPLIANCE...................................13
5.19 EMPLOYMENT MATTERS.........................................13
5.20 BROKERS OR FINDERS.........................................13
5.21 BOOKS AND RECORDS..........................................13
5.22 FINANCIAL REPORTS AND REGULATORY DOCUMENTS.................13
ARTICLE 6 CONDUCT PENDING THE CLOSING........................................14
ARTICLE 7 CONDITIONS TO CLOSING..............................................16
7.1 CONDITIONS TO EACH PARTY'S OBLIGATIONS.....................16
7.2 CONDITIONS TO OBLIGATIONS OF THE PURCHASER.................16
7.3 CONDITIONS TO OBLIGATIONS OF THE COMPANY...................17
ARTICLE 8 TERMINATION........................................................18
8.1 TERMINATION................................................18
8.2 EFFECT OF TERMINATION AND ABANDONMENT......................19
ARTICLE 9 GENERAL PROVISIONS.................................................19
9.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.................19
9.2 FURTHER ASSURANCES.........................................19
9.3 WAIVER.....................................................19
9.4 BROKERS....................................................19
9.5 NOTICES....................................................19
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9.6 GOVERNING LAW..............................................20
9.7 ASSIGNMENT.................................................20
9.8 COUNTERPARTS...............................................20
9.9 CLOSING DATE...............................................20
9.10 REVIEW OF THE AGREEMENT....................................20
9.11 SCHEDULES..................................................21
9.12 EFFECTIVE DATE.............................................21
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AGREEMENT AND PLAN OF MERGER
This agreement and plan of MERGER (this "AGREEMENT") is made and entered into as
of this 22nd day of November, 2004, by and among Technology Visions Group, Inc.,
a Delaware corporation (the "PURCHASER"), and Sutura, Inc., a Delaware
corporation (the "COMPANY") hereinafter referred to as the "PARTIES."
RECITALS
WHEREAS, the Purchaser and the Company intend to effect a merger (the "MERGER")
of the Company with and into Purchaser in accordance with this Agreement and as
provided for under Title 8 of the Delaware General Corporation Law ("DELAWARE
LAW").
WHEREAS, the respective Boards of Directors of both the Company and the
Purchaser have approved the terms of this Agreement and of the transactions
contemplated hereby; and
WHEREAS, the Company and the Purchaser desire to set forth the terms of the
Agreement in connection with the transactions provided for herein; and
AGREEMENT
NOW, THEREFORE, in consideration of the covenants, promises and representations
set forth herein, and for other good and valuable consideration, intending to be
legally bound hereby the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
For purposes of this Agreement, the applicable definitions of terms used in this
Agreement shall be set forth in EXHIBIT A.
ARTICLE 2
THE MERGER
2.1 THE MERGER. At the Effective Time (as defined in SECTION 2.4), and subject
to and upon the terms and conditions of this Agreement and Delaware Law, (i) the
Company shall be merged with and into the Purchaser, (ii) the separate corporate
existence of the Company shall cease and (iii) the Purchaser shall continue as
the surviving corporation. The Purchaser as the surviving corporation after the
Merger is hereinafter sometimes referred to as the "SURVIVING CORPORATION."
2.2 THE CLOSING. The closing of the transactions contemplated by this Agreement
(the "CLOSING") shall take place as soon as practicable after the satisfaction
or waiver (subject to applicable law) of the conditions (excluding conditions
that, by their terms, cannot be satisfied until the Closing Date) set forth in
ARTICLE VII hereof (the "CLOSING DATE") at the offices of the Company,
commencing at 10:00 a.m., local time or at such other time and place as the
parties may mutually agree. All proceedings to be taken and all documents to be
executed at the Closing shall be deemed to have been taken, delivered and
executed simultaneously, and no proceeding shall be deemed taken nor documents
deemed executed or delivered until all have been taken, delivered and executed.
The date of Closing may be accelerated or extended by agreement of the Parties.
2.3 ACTIONS AT CLOSING. At the Closing the parties shall file a Certificate of
Merger with the Secretary of State of the State of Delaware and make all other
filings required under any applicable State laws (including, without limitation,
Delaware Law) to cause the consummation of the Merger and the transaction
contemplated hereby.
2.4 EFFECT OF MERGER. The Merger shall become effective at the time (the
"EFFECTIVE TIME") the Company and the Purchaser file the Certificate of Merger
with the Secretary of State of the State of Delaware and as provided under
Delaware Law, or such later time as the Purchaser and the Company may agree upon
and as may be set forth in the Certificate of Merger. The Merger shall have the
effects set forth in this Agreement, the Certificate of Merger and the
applicable provisions of Delaware Law. Without limiting the foregoing, at the
Effective Time all the property, rights, privileges, powers and franchises of
the Company and the Purchaser shall vest in the Surviving Corporation, and all
debts, liabilities and duties of the Company and the Purchaser shall become the
debts, liabilities and duties of the Surviving Corporation. The Surviving
Corporation may, at any time after the Effective Time, take any action
(including executing and delivering any document) in the name and on behalf of
the Company or the Purchaser in order to carry out and effectuate the
transactions contemplated hereby.
2.5 CERTIFICATE OF INCORPORATION. The Certificate of Incorporation of the
Surviving Corporation shall be amended and restated at and as of the Effective
Time to, provide that the name of the Surviving Corporation shall be Sutura,
Inc.
2.6 BYLAWS. The Bylaws of the Surviving Corporation shall be amended and
restated at and as of the Effective Time to read as did the Bylaws of the
Company immediately prior to the Effective Time.
2.7 DIRECTORS AND OFFICERS. The directors and officers of the Surviving Company
shall be:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ - Chairman/ President/ CEO and a Director
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ - Director
▇▇▇▇ Crew, M.D. - Director
▇▇▇▇▇▇ ▇▇▇▇ - V.P. Operations
▇▇▇ ▇▇▇▇▇▇ - V.P. R&D/ Engineering
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇-Director
ARTICLE 3
MERGER CONSIDERATION AND MANNER OF CONVERSION
3.1 MERGER CONSIDERATION. At the Effective Time, the shares of Company Stock
issued and outstanding immediately prior to the Effective Time, other than any
Company Dissenting Shares, shall by virtue of the Merger and without any action
on the part of the Purchaser, the Company or any holder thereof, be canceled or
terminated and shall be converted into and exchanged for the right to receive
the Merger Consideration. No shares of Company Stock shall be deemed to be
outstanding or have any rights other than those set forth in this ARTICLE III
after the Effective Time. Pursuant to the Merger (i) the stockholders of
Purchaser immediately prior to the Effective Time (on a fully diluted as
converted basis, AS APPLICABLE, assuming conversion, exercise and/or exchange of
all securities or other rights to acquire Purchaser Common Stock) shall hold in
the aggregate five percent (5%) of the Common Stock of the Surviving Corporation
immediately following the Effective Time and (ii) the stockholders of the
Company immediately prior to the Effective Time (on a fully diluted as converted
basis, assuming conversion, exercise and/or exchange of all securities or other
rights to acquire Company Stock, but specifically excluding any assumption of
conversion or exercise of any Whitebox Securities) shall hold in the aggregate
ninety five percent (95%) of the Common Stock of the Surviving Corporation
immediately following the Effective Time.
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3.2 DISSENTERS' RIGHTS. Company Dissenting Shares will not be converted into the
right to receive the Merger Consideration otherwise payable with respect to such
shares at or after the Effective Time, but will be converted into the right to
receive such consideration as may be determined to be due with respect to such
Company Dissenting Shares pursuant to Delaware Law. Purchaser agrees that,
except with the prior written consent of the Company, or as required under
Delaware Law, it will not voluntarily make any payment with respect to, or
settle or offer or agree to settle, any such demand for appraisal.
3.3 CONVERSION OF RIGHTS.
(a) At the Effective Time, each option or other right to purchase shares of
Company Stock pursuant to stock options or stock appreciation rights granted by
the Company and outstanding at the Effective Time, whether or not exercisable,
and all other warrants or other rights to purchase shares of Company Stock
(collectively "COMPANY RIGHTS") shall be converted into and become rights with
respect to Purchaser Common Stock, and Purchaser shall assume each Company
Right, in accordance with the terms of such stock option plan or such other
agreement or arrangement pertaining to such Company Rights (as applicable),
except that from and after the Effective Time, (i) Purchaser and its
compensation committee shall be substituted for the Company Board of Directors
or the committee of the Company Board of Directors administering the stock
option plan, (ii) each Company Right assumed by Purchaser may be exercised only
for shares of Purchaser Common Stock (or cash, in the case of stock appreciation
rights), (iii) the number of shares of Purchaser Common Stock subject to Company
Rights shall be equal to the number of shares of Company Stock subject to the
Company Right immediately prior to the Effective Time multiplied by the Exchange
Ratio and (iv) the per share exercise price under the Company Right shall be
adjusted by dividing the per share exercise price under the Company Right by the
Exchange Ratio and rounding up to the nearest cent. Notwithstanding the
provisions of clause (iii) of the preceding sentence, Purchaser shall not be
obligated to issue any fraction of a share of Purchaser Common Stock upon
exercise of a Company Right, but in lieu thereof, Purchaser shall round-up
fractional shares to the next highest whole number. The term, exercisability,
vesting schedule, status as an "Incentive Stock Option" under Section 422 of the
Code, if applicable, and all other terms and conditions of the options or
warrants, to the extent permitted by law, and otherwise reasonably practical
shall be unchanged. Each option, which is an Incentive Stock Option, shall be
adjusted in accordance with the requirements of Section 424(a) of the Code so as
not to constitute a modification, renewal or extension of the option within the
meaning of Section 424(h) of the United States Internal Revenue Code.
(b) The Company agrees to take all necessary steps to effectuate the foregoing
provisions of this SECTION 3.3, including using its reasonable efforts to obtain
from each holder of a Company Right any consent or agreement that may be deemed
necessary or advisable in order to effectuate the transactions contemplated by
this Section 3.3. Anything in this Agreement to the contrary notwithstanding,
Purchaser shall have the right, in its sole discretion, not to deliver the
consideration provided in this Section 3.3 to a former holder of a Company Right
who has not delivered such consent or agreement.
3.4 RIGHTS AS STOCKHOLDERS; STOCK TRANSFERS. At the Effective Time, holders of
Company Stock shall cease to be, and shall have no rights as, stockholders of
the Company, other than to receive any dividend or other distribution with
respect to such Company Stock with a record date occurring prior to the
Effective Time and the consideration provided for in this ARTICLE III. After the
Effective Time there shall be no transfers on the stock transfer books of the
Company of Company Stock outstanding prior to the Effective Time.
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3.5 FRACTIONAL SHARES. Notwithstanding any other provision hereof, no fractional
shares of Purchaser Common Stock and no certificates or scrip therefore, or
other evidence of ownership therefore, will be issued as part of the Merger
Consideration. Instead, Purchaser shall round-up fractional shares to the next
whole number (after aggregating all Merger Consideration due such holder).
3.6 PAYMENT FOR SHARES.
(a) Promptly after the Effective Time, the Purchaser shall mail to each Company
Stockholder a form of letter of transmittal (which shall be in such form and
contain such provisions as the Purchaser and the Company may reasonably agree
and specify) and instructions for use in effecting the surrender of all the
certificates or Company Rights that, immediately prior to the Effective Time,
represented any of such shares of Company Stock or Company Rights in exchange
for payment of the Merger Consideration therefore or Convertible Securities of
Purchaser (as the case may be). At and after the Effective Time, as received,
the Surviving Corporation shall promptly deliver to the persons entitled thereto
the pro-rata Merger Consideration or Convertible Securities to which such person
is entitled, delivered in person or by mail to the address specified in the
applicable letter of transmittal.
(b) Notwithstanding the foregoing, no party hereto shall be liable to any holder
of certificates formerly representing shares of Company Stock for any amount
paid to a public official pursuant to any applicable abandoned property, escheat
or similar law. Unless otherwise provided for in this Agreement, the Purchaser
shall pay all charges and expenses in connection with the exchange of public
shares of Purchaser for shares of Surviving Company Stock.
ARTICLE 4
REPRESENTATION AND
WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Purchaser that, as of the date
of this Agreement and as of the date of Closing:
4.1 ORGANIZATION. The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, with full
corporate power and authority to conduct its business as is now being conducted,
and is duly qualified to do business and is in good standing in the State of
California. SCHEDULE 4.1 lists (a) all Subsidiaries and correctly sets forth the
capitalization of each Subsidiary and ownership interest of the Company or any
other Person therein, and (b) the jurisdiction in which each Subsidiary is
organized. Each of the Subsidiaries is duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation or
organization, except where the lack thereof would not have a Material Adverse
Effect. The Company and each of its Subsidiaries has the necessary power to own
its properties and assets and to carry on its business as now conducted and is
duly qualified or licensed to do business in each foreign jurisdiction where it
conducts business or has assets, except where failure to be so qualified,
licensed or in good standing would not have a Material Adverse Effect. The
Company has delivered to the Purchaser correct and complete copies of the
charter and bylaws of each of its Subsidiaries and the names of the directors
and officers of each of the Company and its Subsidiaries.
4.2 AUTHORITY. The Company has all requisite corporate power and authority to
enter into this Agreement, to perform its obligations under this Agreement and
to consummate the transactions contemplated hereby. The execution and delivery
of this Agreement, and the consummation of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on the part of the
Company. This Agreement has been duly executed and delivered by each of the
Company and constitutes valid and binding obligations of the Company,
enforceable against in accordance with its terms.
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4.3 NO CONSENTS. No consents, approvals, orders, waivers or authorizations of,
or registration, declaration or filing with, any third party or Governmental
Body is required by or with respect to the Company or the Subsidiaries in
connection with the execution and delivery of this Agreement or the consummation
of the transactions contemplated hereby, except for: (a) such consents,
approvals, orders, authorizations, registrations, declarations and filings as
may be required under applicable state securities laws or the securities laws of
the United States or of any foreign country; (b) those consents expressly listed
in SCHEDULE 4.3; (c) such filings, if any, required with the United States
Federal Trade Commission (the "FTC") and the Antitrust Division of the
Department of Justice (the "DOJ") pursuant to the HSR Act; and (d) those
consents, approvals, orders, waivers, authorizations, registrations,
declarations or filings which, if not obtained or made, would not have a
Material Adverse Effect.
4.4 NO CONFLICTS. Except as set forth in SCHEDULE 4.4, the execution and
delivery of this Agreement and the performance of its obligations hereunder (a)
shall not be in violation or breach of, and shall not conflict with or
constitute a default under, any of the terms of the Company's Certificate of
Incorporation or Bylaws, of any contract, agreement or commitment binding upon
the Company or its Subsidiaries or any of their respective assets or properties,
except in each case as would not have a Material Adverse Effect, nor enable any
third party to terminate any Company Material Agreement; and (b) shall not
conflict with or violate, in any material respect, any applicable law, rule,
regulation, judgment, order or decree of any Governmental Body having
jurisdiction over the Subsidiaries or any of their assets or properties.
4.5 CAPITAL STRUCTURE. The authorized capital stock of the Company consists of
15,000,000 shares of capital stock, of which 10,000,000 shares are Common Stock,
$0.001 par value (the "COMPANY COMMON STOCK"), and 5,000,000 shares are
Preferred Stock, $0.001 par value (the "COMPANY PREFERRED STOCK"), of which
352,160 shares are designated Series A Preferred Stock. As of November 19, 2004
there were 7,355,593 shares issued and outstanding, of which 7,003,433 shares
were Company Common Stock, and 352,160 shares were Company Preferred Stock. All
shares of Company Stock are or will be at Closing, duly authorized, validly
issued, fully paid and nonassessable and not subject to preemptive rights
created by statute, the Company's charter documents or any agreement to which
the Company is a party or by which it is bound.
4.6 OBLIGATIONS WITH RESPECT TO CAPITAL STOCK. SCHEDULE 4.6 sets forth a true
and complete list as of the date hereof of all holders of outstanding
Convertible Securities of the Company, the exercise price per share, the term of
each such Convertible Security, whether such Convertible Security is a
nonqualified stock option or incentive stock option and any restrictions on
exercise or sale of such Convertible Securities or underlying shares. On the
Closing Date, the Company shall deliver to Purchaser a complete and correct
updated SCHEDULE 4.6 giving effect to any exercise of Convertible Securities on
or prior to Closing. Except as set forth in SCHEDULE 4.6 there will be no
outstanding: (a) securities convertible into or exchangeable for the capital
stock of any class of the Company or its Subsidiaries; (b) options, warrants or
other rights to subscribe for or purchase shares of Equity Securities of any
class of the Company or its Subsidiaries; or (c) agreements of any kind relating
to the issuance of any Equity Securities of any class of the Company or its
Subsidiaries, or any such convertible or exchangeable securities or any such
options, warrants or rights to subscribe for or purchase shares of Equity
Securities of the Company or its Subsidiaries. Except as set forth in SCHEDULE
4.6, and as contemplated by this Agreement, to the Knowledge of the Company
there are no voting trusts or other agreements or understandings with respect to
the Company Stock or any stock of its Subsidiaries.
4.7 SUBSIDIARIES. Except as described in SCHEDULE 4.7 the Company owns all of
the Equity Securities of each of the Subsidiaries, beneficially and of record.
SCHEDULE 4.7 lists all Equity Securities of Persons other than the Subsidiaries
owned beneficially and of record by the Company. All such Equity Securities of
the Subsidiaries and those listed on SCHEDULE 4.7 are owned free and clear of
any Encumbrance and are fully paid, validly issued and nonassessable.
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4.8 FINANCIAL STATEMENTS. The Company has delivered to the Purchaser true and
complete copies of the Company Financial Statements. The audited portion of
Company Financial Statements have been prepared in accordance with GAAP, applied
on a consistent basis throughout the periods covered thereby, and present fairly
in all material respects the financial position, assets and liabilities of the
Company and its Subsidiaries at the dates indicated and the results of its
operations and changes in financial position for the periods indicated. The
unaudited portion of Company Financial Statements present fairly in all material
respects the results of operations of the Company and its Subsidiaries in
accordance with GAAP, except as otherwise stated therein (or in any related
notes) and except for the lack of footnotes and subject to normal audit
adjustment.
4.9 NO UNDISCLOSED LIABILITIES. Except as set forth in SCHEDULE 4.9, to the
Company's Knowledge, the Company has no undisclosed liabilities or obligations
(whether absolute, accrued, contingent or otherwise and whether due or to become
due, including liabilities for taxes and interest and penalties thereon) of a
material nature required by GAAP to be reflected on a consolidated balance sheet
of the Company or described in the notes thereto that are not reflected in the
Company Financial Statements, except for liabilities and obligations (a)
incurred since December 31, 2003 in the Ordinary Course of Business; or (b)
specifically disclosed in any Schedule to this Agreement.
4.10 BUSINESS CHANGES. Since December 31, 2003, except with respect to
inter-company transactions or as otherwise contemplated by this Agreement or as
set forth in SCHEDULE 4.10, (a) each of the Company and its Subsidiaries has
conducted its business in the Ordinary Course of Business; none of the Company
and its Subsidiaries has issued, declared, set aside or paid any dividend or
other distribution of cash or property on any of its respective Equity
Securities nor has it, directly or indirectly, purchased, redeemed or otherwise
acquired any shares of its respective Equity Securities or entered into any
agreement or commitment to do any of the foregoing; (b) for each of the Company
and its Subsidiaries there has not been any (i) general uniform increase in the
compensation of the employees (including, without limitation, any increase
pursuant to any bonus, pension, profit-sharing, deferred compensation or other
plan or commitment), other than increases in the Ordinary Course of Business,
(ii) increase in any such compensation payable to any individual officer,
director, consultant or agent, other than increases in the Ordinary Course of
Business, (iii) loans made to any officers, directors, shareholders, employees,
consultants or agents; and (c) none of the Company and its Subsidiaries has
incurred additional debt for borrowed money, nor has it incurred any obligation
or liability (fixed, contingent or otherwise), nor made any acquisition of or
contract for acquisition of any assets, nor paid any obligation or liability
(except for current obligations or liabilities), in each case in excess of
$500,000 or $2,000,000 in the aggregate, except in the Ordinary Course of
Business;
4.11 PROPERTIES. SCHEDULE 4.11 lists all real property leased by the Company and
its Subsidiaries. The Company and its Subsidiaries own no real property. Except
as provided on SCHEDULE 4.11 hereto (i) the Company and its Subsidiaries have
good and marketable title to all assets and properties listed on the Company
Financial Statements or thereafter acquired, free and clear of any Encumbrances
other than Permitted Liens, except where the lack of such good and marketable
title would not have a Material Adverse Effect; and (ii) all of the material
fixed assets and material properties listed in the Company Financial Statements
or thereafter acquired are in satisfactory condition and repair in all material
respects for the requirements of the business as presently conducted. All
material agreements pursuant to which the Company and its Subsidiaries lease
real or personal property are listed in SCHEDULE 4.11 hereto, are valid,
effective and enforceable in accordance with their respective terms and there is
not under any such leases any existing default or any event which, with notice
or lapse of time or both, would have a Material Adverse Effect.
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4.12 TAXES. Each of the Company and its Subsidiaries has duly filed with the
appropriate Governmental Body all tax returns and reports required to be filed,
and has paid or accrued in full all Taxes due to, or claimed to be due by, any
taxing authority. To the Knowledge of the Company, such tax filings were correct
and complete when filed.
4.13 COMPLIANCE WITH LAWS. To the Company's Knowledge, the business of each of
the Company and its Subsidiaries has been conducted in compliance with all
applicable laws, regulations, orders and other requirements of any Governmental
Body, except where failure to comply will not have a Material Adverse Effect.
4.14 LITIGATION. Except as set forth in SCHEDULE 4.14, and except for claims,
disputes, actions, proceedings, suits or appeals that would not have a Material
Adverse Effect, there is no claim, dispute, action, proceeding, suit or appeal,
at law or in equity, pending against any of the Company and its Subsidiaries, or
involving any of the Company and its Subsidiaries assets or properties, before
any court, agency, authority, arbitration panel or other tribunal, and, to the
Company's Knowledge, none have been threatened.
4.15 CONTRACTS. SCHEDULE 4.15 lists each contract or agreement to which the
Company is a party (and the Company has provided the Purchaser with a copy of
each such written contract or agreement or a written description of each such
verbal contract or agreement) that: (i) is a power of attorney or similar
authorization granted by the Company and its Subsidiaries to third parties, or
(ii) currently involves payments or receipts of more than $500,000 to vendors
and $200,000 to customers on an annual basis that cannot be terminated by the
Company without penalty on less than 61 days notice (collectively, the "COMPANY
MATERIAL AGREEMENTS"). The Company and its Subsidiaries are not in material
default individually or in the aggregate (or would not by the lapse of time
and/or the giving of notice be in material default) in respect of any Company
Material Agreement to which they are parties. To the Company's Knowledge, no
party to any Company Material Agreement is in material default thereunder or has
materially breached any terms or provisions thereof which are material to the
conduct of any of the respective business. To the Company's Knowledge, none of
the Material Agreements will be terminated as a result of the transaction
contemplated hereby.
4.16 INTELLECTUAL PROPRIETARY RIGHTS. The Company and its Subsidiaries own or
have the right to use all Intellectual Property necessary for the operation of
their businesses as presently conducted. SCHEDULE 4.16 constitutes a full and
complete list of all material Intellectual Property that the Company and its
Subsidiaries own or license (to or from a third party) in connection with their
operations (the "COMPANY INTELLECTUAL PROPERTY ASSETS"), and specifies whether
such Intellectual Property is owned or used under license and whether the
Company and its Subsidiaries act as licensor or licensee. The Company and its
Subsidiaries hold all right, title and interest in and to those Company
Intellectual Property Assets which are specified as owned by them, except where
the failure to hold all such right, title and interest would not have a Material
Adverse Effect. All material license agreements and all other instruments
relating to material licenses are in full force and effect and true and complete
copies thereof have been provided to the Purchaser. None of the Company
Intellectual Property Assets have been held or stipulated to be invalid in any
litigation which has been concluded and the validity of the Company Intellectual
Property Assets has not been questioned in any litigation that is currently
pending or, to the Company's Knowledge, threatened, except where any such
pending or threatened litigation would not have a Material Adverse Effect. To
the Company's Knowledge, none of the Company and its Subsidiaries infringes on
the Intellectual Property of any third party through its actions in the conduct
of its business in any material respect.
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4.17 INSURANCE. SCHEDULE 4.17 constitutes a full and complete list of all
policies of insurance to which any of the Company and its Subsidiaries is a
party or is a beneficiary or named insured. All of the insurance policies and
bonds maintained by the Company and its Subsidiaries are in full force and
effect, except where the failure of such policies or bonds to be in full force
and effect would not have a Material Adverse Effect. None of the Company and its
Subsidiaries has received any notice or other indication from any insurer or
agent of any intent to cancel or not to renew any of such insurance policies,
except where any such cancellation or failure to renew would not have a Material
Adverse Effect.
4.18 ENVIRONMENTAL COMPLIANCE. To the Company's Knowledge, each of the Company
and its Subsidiaries has all permits, licenses and other authorizations, which
are required under existing Environmental Laws and the failure of which would
have a Material Adverse Effect. To the Company's Knowledge, each of the Company
and its Subsidiaries is presently in compliance in all material respects with
all Environmental Laws, and none has generated, manufactured, refined,
transported, transferred, produced or processed any hazardous material or solid
waste, except in compliance with all applicable Environmental Laws. There are no
existing environmental conditions or circumstances with respect to any real
property owned or leased by the Company and its Subsidiaries, whether or not
discovered, which would be probable to result in a liability which would have a
Material Adverse Effect, should any such conditions or circumstances become the
basis for any claim which is asserted in the future by any aggrieved party
(including, without limitation, any Governmental Body). There is no pending or,
to the Company's Knowledge, threatened civil or criminal litigation, notice of
violation or administrative proceeding to which any of the Company and its
Subsidiaries is a party relating to Environmental Laws, except where any such
litigation, violation or proceeding would not have a Material Adverse Effect.
4.19 EMPLOYMENT MATTERS. For any worldwide employee whose annual compensation
exceeds $100,000 or foreign equivalent thereof, SCHEDULE 4.19 comprises a list
of: (i) all employment contracts or agreements to which each of the Company and
its Subsidiaries is a party or is subject as of the date of this Agreement, and
(ii) the names, current salary rates, and accrued vacation and sick leave for
all the employees of the Company and its Subsidiaries. None of the Company and
its Subsidiaries has any shop union contracts or enterprise collective
bargaining agreements; (i) none of the Company and its Subsidiaries is currently
engaged in any labor negotiations or employment dispute or grievance except for
minor grievances with individual employees and not with any employee
organization or group; and (ii) to the Company's knowledge, none of the Company
and its Subsidiaries is the subject of any union organizing. Except as set forth
in SCHEDULE 4.19, none of the Company and its Subsidiaries has sponsored,
maintained or participated in, nor does it currently sponsor, maintain or
participate in, any oral or written employee benefit plan (as such term is
defined in Section 3(3) of Employee Retirement Income Security Act of 1974, as
amended ("ERISA")), or any trust related to any such plan.
4.20 BROKERS OR FINDERS. Except as set forth in SCHEDULE 4.20, the Company has
not incurred nor will incur, directly or indirectly, any liability for any
brokerage or finders' fees or agent's commissions or any similar charges in
connection with this Agreement or any transaction contemplated hereby.
4.21 BOOKS AND RECORDS. The minute books, stock record books and other records
of the Company and its Subsidiaries, all of which have been made available to
the Purchaser, are correct in all material respects. The minute books of the
Company and its Subsidiaries are accurate in material respects records of all
meetings and other corporate actions of their respective shareholders and board
of directors and committees thereof.
4.22 REGULATORY COMPLIANCE. (i) (A) With respect to each of the Company's
products and, to the extent applicable, products under development
(collectively, "COMPANY PRODUCTS"), (1) SCHEDULE 4.22 sets forth a list of all
approvals, clearances, authorizations, licenses and registrations required by
United States or foreign governments or government agencies obtained by the
Company and its Subsidiaries to permit the manufacturing, distribution, sales,
marketing or human research activities of the Company (the "COMPANY ACTIVITIES
TO DATE") with respect to each Product (collectively, "COMPANY LICENSES"); and
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(2) the Company and its Subsidiaries are in compliance in all material respects
with all terms and conditions of each Company License and with all requirements
pertaining to the Activities to Date with respect to each Product which is not
required to be the subject of a Company License; (B) all manufacturing
operations performed by or on behalf of the Company have been and are being
conducted in all material respects in compliance with current good manufacturing
practices, and quality system regulations issued by the United States Food and
Drug Administration ("FDA") and, to the extent applicable, counterpart
regulations in the European Union; (C) the Company and its Subsidiaries are in
compliance in all material respects with all applicable reporting requirements
for all licenses or plant registrations described in clause (A) above; except,
in the case of the preceding clauses (A) through (C), for any such failures to
obtain or noncompliance which, individually or in the aggregate, would not have
a Material Adverse Effect. (ii) To the Company's Knowledge, no filing or
submission to the FDA or any other Governmental Body with regard to the Products
that is the basis for any approval or clearance contains any material omission
or material false information.
ARTICLE 5
REPRESENTATION AND
WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to the Company that, as of the date
of this Agreement and as of the date of Closing:
5.1 ORGANIZATION. The Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, with full
corporate power and authority to conduct its business as is now being conducted,
and is duly qualified to do business and is in good standing in the State of
Delaware. SCHEDULE 5.1 lists (a) all Subsidiaries and correctly sets forth the
capitalization of each Subsidiary and ownership interest of the Purchaser or any
other Person therein, and (b) the jurisdiction in which each Subsidiary is
organized. Each of the Subsidiaries is duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation or
organization, except where the lack thereof would not have a Material Adverse
Effect. The Purchaser and each of its Subsidiaries has the necessary power to
own its properties and assets and to carry on its business as now conducted and
is duly qualified or licensed to do business in each foreign jurisdiction where
it conducts business or has assets, except where failure to be so qualified,
licensed or in good standing would not have a Material Adverse Effect. The
Purchaser has delivered to the Company correct and complete copies of the
charter and bylaws of each of its Subsidiaries and the names of the directors
and officers of each of the Purchaser and its Subsidiaries.
5.2 AUTHORITY. The Purchaser has all requisite corporate power and authority to
enter into this Agreement, to perform its obligations under this Agreement and
to consummate the transactions contemplated hereby. The execution and delivery
of this Agreement, and the consummation of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on the part of the
Purchaser. This Agreement has been duly executed and delivered by the Purchaser
and constitutes valid and binding obligations of the Purchaser, enforceable
against the Purchaser in accordance with its terms.
5.3 NO CONSENTS. No consents, approvals, orders, waivers or authorizations of,
or registration, declaration or filing with, any third party or Governmental
Body is required by or with respect to the Purchaser or the Subsidiaries in
connection with the execution and delivery of this Agreement or the consummation
of the transactions contemplated hereby, except for: (a) such consents,
approvals, orders, authorizations, registrations, declarations and filings as
may be required under applicable state securities laws or the securities laws of
the United States or of any foreign country; (b) those consents expressly listed
in SCHEDULE 5.3; (c) such filings, if any, required with the FTC and DOJ
pursuant to the HSR Act; and (d) those consents, approvals, orders, waivers,
authorizations, registrations, declarations or filings which, if not obtained or
made, would not have a Material Adverse Effect.
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5.4 NO CONFLICTS. Except as set forth in SCHEDULE 5.4 the execution and delivery
of this Agreement and the performance of its obligations hereunder (a) shall not
be in violation or breach of, and shall not conflict with or constitute a
default under, any of the terms of the Purchaser's Certificate of Incorporation
or Bylaws, of any contract, agreement or commitment binding upon the Purchaser
or its Subsidiaries or any of their respective assets or properties, except in
each case as would not have a Material Adverse Effect, nor enable any third
party to terminate any Material Agreement; and (b) shall not conflict with or
violate, in any material respect, any applicable law, rule, regulation,
judgment, order or decree of any Governmental Body having jurisdiction over the
Purchaser or its Subsidiaries or any of their assets or properties.
5.5 CAPITAL STRUCTURE. The authorized capital stock of the Purchaser consists of
102,000,000 shares of capital stock, of which 100,000,000 shares are Common
Stock, $0.001 par value (the "PURCHASER COMMON STOCK"), and 2,000,000 shares are
Preferred Stock, $0.001 par value (the "PURCHASER PREFERRED STOCK"), of which
1,000,000 shares are designated as Series A Convertible Preferred Stock. As of
November 19, 2004 there were 79,200,000 shares of Purchaser Common Stock issued
and outstanding, and 510,000 shares of Purchaser Series A Convertible Preferred
Stock issued and outstanding. All of the shares of Purchaser Common Stock are or
will be at Closing, duly authorized, validly issued, fully paid and
non-assessable and not subject to preemptive rights created by statute, the
Purchase's charter documents or any agreement to which the Purchaser is a party
or by which it is bound. The authorized capital of the Purchaser will consist
immediately prior to the Closing of 300,000,000 shares of Purchaser Common
Stock, of which 12,000,000 shares are issued and outstanding.
5.6 OBLIGATIONS WITH RESPECT TO CAPITAL STOCK. SCHEDULE 5.6 sets forth a true
and complete list as of the date hereof of all holders of outstanding
Convertible Securities of the Purchaser, the exercise price per share, the term
of each such Convertible Security, whether such Convertible Security is a
nonqualified stock option or incentive stock option and any restrictions on
exercise or sale of such Convertible Securities or underlying shares. On the
Closing Date, the Purchaser shall deliver to Company a complete and correct
updated SCHEDULE 5.6 giving effect to any exercise of Convertible Securities on
or prior to Closing. Except as set forth in SCHEDULE 5.6, there are no
outstanding: (a) securities convertible into or exchangeable for the capital
stock of any class of the Purchaser or its Subsidiaries; (b) options, warrants
or other rights to subscribe for or purchase shares of capital stock of any
class of the Purchaser or its Subsidiaries; or (c) agreements of any kind
relating to the issuance of any Equity Securities of any class of the Purchaser
or its Subsidiaries, or any such convertible or exchangeable securities or any
such options, warrants or rights to subscribe for or purchase shares of Equity
Securities of the Purchaser or its Subsidiaries. Except as set forth in SCHEDULE
5.6, and as contemplated by this Agreement, to the Knowledge of the Purchaser
there are no voting trusts or other agreements or understandings with respect to
the Purchaser Common Stock or any stock of its Subsidiaries including, without
limitation, any agreement granting any form of registration rights to any person
or entity. Immediately prior to the Closing, except as consented to in writing
by the Company, (i) Purchaser shall have no outstanding Convertible Securities
or any rights, agreements or understandings entitling any person to acquire any
capital stock or Convertible Securities of the Purchaser and (ii) Purchaser
shall not be a party to any agreement granting any form of registration rights
to any person or entity.
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5.7 SUBSIDIARIES. Except as described in SCHEDULE 5.7, the Purchaser owns all of
the Equity Securities of each of the Subsidiaries, beneficially and of record.
SCHEDULE 5.7 lists all Equity Securities of Persons other than the Subsidiaries
owned beneficially and of record by the Purchaser. All such Equity Securities of
the Subsidiaries and those listed on SCHEDULE 5.7 are owned free and clear of
any encumbrance and are fully paid, validly issued and non-assessable.
5.8 FINANCIAL STATEMENTS. The audited financial statements of Purchaser as filed
pursuant to the Exchange Act have been prepared in accordance with GAAP, applied
on a consistent basis throughout the periods covered thereby, and present fairly
in all material respects the financial position, assets and liabilities of the
Purchaser at the dates indicated and the results of its operations and changes
in financial position for the periods indicated. The unaudited quarterly
financial statements of Purchaser as filed pursuant to the Exchange Act present
fairly in all material respects the results of operations of the Purchaser
except as otherwise stated therein (or in any related notes) and except for the
lack of footnotes and subject to normal audit adjustment.
5.9 NO UNDISCLOSED LIABILITIES. Except as set forth in SCHEDULE 5.9, to the
Purchaser's Knowledge, Purchaser has no undisclosed liabilities or obligations
(whether absolute, accrued, contingent or otherwise and whether due or to become
due, including liabilities for taxes and interest and penalties thereon) of a
material nature required by GAAP to be reflected on a consolidated balance sheet
of the Purchaser or described in the notes thereto that are not reflected in the
Financial Statements, except for liabilities and obligations (a) incurred since
December 31, 2003 in the Ordinary Course of Business; or (b) specifically
disclosed in any Schedule to this Agreement.
5.10 BUSINESS CHANGES. Since December 31, 2003, except with respect to
inter-Purchaser transactions or as otherwise contemplated by this Agreement or
as set forth in SCHEDULE 5.10, (a) the Purchaser and its Subsidiaries have
conducted its business in the Ordinary Course of Business; the Purchaser and its
Subsidiaries have not issued, declared, set aside or paid any dividend or other
distribution of cash or property on any of its respective Equity Securities nor
has it, directly or indirectly, purchased, redeemed or otherwise acquired any
shares of its respective, Equity Securities or entered into any agreement or
commitment to do any of the foregoing (b) for the Purchaser and its Subsidiaries
there has not been any (i) general uniform increase in the compensation of the
employees (including, without limitation, any increase pursuant to any bonus,
pension, profit-sharing, deferred compensation or other plan or commitment),
other than increases in the Ordinary Course of Business, (ii) increase in any
such compensation payable to any individual officer, director, consultant or
agent, other than increases in the Ordinary Course of Business, (iii) loans made
to any officers, directors, shareholders, employees, consultants or agents, and
(c) the Purchaser and its Subsidiaries have not incurred additional debt for
borrowed money, nor has it incurred any obligation or liability (fixed,
contingent or otherwise), nor made any acquisition of or contract for
acquisition of any assets, nor paid any obligation or liability (except for
current obligations or liabilities), in each case in excess of $50,000 or
$200,000 in the aggregate, except in the Ordinary Course of Business;
5.11 PROPERTIES. SCHEDULE 5.11 lists all real property leased by the Purchaser
and its Subsidiaries, which is true in all material respects as of the date
hereof. The Purchaser and its Subsidiaries own no real property except as
provided on SCHEDULE 5.11 hereto: (i) the Purchaser and its Subsidiaries have
good and marketable title to all assets and properties listed on the Financial
Statements or thereafter acquired, free and clear of any Encumbrances other than
Permitted Liens, except where the lack of such good and marketable title would
not have a Material Adverse Effect; and (ii) all of the material fixed assets
and material properties listed in the Financial Statements or thereafter
acquired are in satisfactory condition and repair in all material respects for
the requirements of the business as presently conducted. All material agreements
pursuant to which the Purchaser and its Subsidiaries lease real or personal
property are listed in SCHEDULE 5.11 hereto, are valid, effective and
enforceable in accordance with their respective terms and there is not under any
such leases any existing material default or any event which, with notice or
lapse of time or both, would have a Material Adverse Effect.
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5.12 TAXES. Except as set forth in SCHEDULE 5.12, the Purchaser and each of its
Subsidiaries has duly filed with the appropriate Governmental Body all tax
returns and reports required to be filed, and has paid or accrued in full all
Taxes due to, or claimed to be due by, any taxing authority. To the Knowledge of
the Purchaser, such tax filings were correct and complete when filed.
5.13 COMPLIANCE WITH LAWS. To the Purchaser's Knowledge, the business of the
Purchaser and its Subsidiaries has been conducted in compliance with all
applicable laws, regulations, orders and other requirements of any Governmental
Body, except where failure to comply will not have a Material Adverse Effect.
5.14 LITIGATION. Except as set forth in SCHEDULE 5.14 and, except for claims,
disputes, actions, proceedings, suits or appeals that would not have a Material
Adverse Effect, there is no claim, dispute, action, proceeding, suit or appeal,
at law or in equity, pending against the Purchaser and its Subsidiaries, or
involving the Purchaser and its Subsidiaries assets or properties, before any
court, agency, authority, arbitration panel or other tribunal, and, to the
Purchaser's Knowledge, none have been threatened.
5.15 CONTRACTS. SCHEDULE 5.15 lists each contract or agreement to which the
Purchaser is a party (and the Purchaser has provided the Company with a copy of
each such written contract or agreement or a written description of each such
verbal contract or agreement), (i) is a power of attorney or similar
authorization granted by the Purchaser and its Subsidiaries to third parties, or
(ii) currently involves payments or receipts of more than $50,000 to vendors or
$20,000 to customers on an annual basis that cannot be terminated by the
Purchaser without penalty on less than 61 days notice (collectively, the
"PURCHASER MATERIAL AGREEMENTS"). The Purchaser and its Subsidiaries are not in
material default individually or in the aggregate (or would not by the lapse of
time and/or the giving of notice be in material default) in respect of any
Purchaser Material Agreement to which they are parties. To the Purchaser's
Knowledge, no party to any Purchaser Material Agreement is in material default
thereunder or has materially breached any terms or provisions thereof which are
material to the conduct of any of the respective business. To the Purchaser's
Knowledge, none of the Purchaser Material Agreements will be terminated as a
result of the transaction contemplated hereby.
5.16 INTELLECTUAL PROPRIETARY RIGHTS. The Purchaser and its Subsidiaries own or
have the right to use all Intellectual Property necessary for the operation of
their businesses as presently conducted. SCHEDULE 5.16 constitutes a full and
complete list of all material Intellectual Property that the Purchaser and its
Subsidiaries own or license (to or from a third party) in connection with their
operations (the "PURCHASER INTELLECTUAL PROPERTY ASSETS"), and specifies whether
such Intellectual Property is owned or used under license and whether the
Purchaser and its Subsidiaries act as licensor or licensee. The Purchaser and
its Subsidiaries hold all right, title and interest in and to those Purchaser
Intellectual Property Assets which are specified as owned by them, except where
the failure to hold all such right, title and interest would not have a Material
Adverse Effect. All material license agreements and all other instruments
relating to material licenses are in full force and effect and true and complete
copies thereof have been provided to the Company. None of the Purchaser
Intellectual Property Assets have been held or stipulated to be invalid in any
litigation which has been concluded and the validity of the Purchaser
Intellectual Property Assets has not been questioned in any litigation that is
currently pending or, to the Purchaser's Knowledge, threatened, except where any
such pending or threatened litigation would not have a Material Adverse Effect.
To the Purchaser's Knowledge, the Purchaser and its Subsidiaries do not infringe
on the Intellectual Property of any third party through its actions in the
conduct of its business in any material respect.
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5.17 INSURANCE. SCHEDULE 5.17 constitutes a full and complete list of all
policies of insurance to which the Purchaser and its Subsidiaries is a party or
is a beneficiary or named insured. All of the insurance policies and bonds
maintained by the Purchaser and its Subsidiaries are in full force and effect,
except where the failure of such policies or bonds to be in full force and
effect would not have a Material Adverse Effect. None of the Purchaser and its
Subsidiaries has received any notice or other indication from any insurer or
agent of any intent to cancel or not to renew any of such insurance policies,
except where any such cancellation or failure to renew would not have a Material
Adverse Effect.
5.18 ENVIRONMENTAL COMPLIANCE. To the Purchaser's Knowledge, the Purchaser and
its Subsidiaries have all permits, licenses and other authorizations, which are
required under existing Environmental Laws and the failure of which would have a
Material Adverse Effect. To the Purchaser's Knowledge, the Purchaser and its
Subsidiaries is presently in compliance in all material respects with all
Environmental Laws, and has not generated, manufactured, refined, transported,
transferred, produced or processed any hazardous material or solid waste, except
in compliance with all applicable Environmental Laws. There are no existing
environmental conditions or circumstances with respect to any real property
owned or leased by the Purchaser and its Subsidiaries, whether or not
discovered, which would be probable to result in a liability which would have a
Material Adverse Effect, should any such conditions or circumstances become the
basis for any claim which is asserted in the future by any aggrieved party
(including, without limitation, any Governmental Body). There is no pending or,
to the Purchaser's Knowledge, threatened civil or criminal litigation, notice of
violation or administrative proceeding to which the Purchaser and its
Subsidiaries is a party relating to Environmental Laws, except where any such
litigation, violation or proceeding would not have a Material Adverse Effect.
5.19 EMPLOYMENT MATTERS. For any worldwide employee whose annual compensation
exceeds $100,000 or foreign equivalent thereof, SCHEDULE 5.19 comprises a list
of: (i) all employment contracts or agreements to which each of the Purchaser
and its Subsidiaries is a party or is subject as of the date of this Agreement,
and (ii) the names, current salary rates, and accrued vacation and sick leave
for all the employees of the Purchaser and its Subsidiaries. (i) the Purchaser
and its Subsidiaries does not have any shop union contracts or enterprise
collective bargaining agreements; (ii) the Purchaser and its Subsidiaries are
not currently engaged in any labor negotiations or employment dispute or
grievance except for minor grievances with individual employees and not with any
employee organization or group; and (iii) to the Purchaser's Knowledge, the
Purchaser and its Subsidiaries is the subject of any union organizing. Except as
set forth in SCHEDULE 5.19, the Purchaser and its Subsidiaries has not
sponsored, maintained or participated in, nor does it currently sponsor,
maintain or participate in, any oral or written employee benefit plan (as such
term is defined in Section 3(3) of ERISA), or any trust related to any such
plan.
5.20 BROKERS OR FINDERS. Except as set forth in SCHEDULE 5.20, the Purchaser has
not incurred nor will incur, directly or indirectly, any liability for any
brokerage or finders' fees or agent's commissions or any similar charges in
connection with this Agreement or any transaction contemplated hereby.
5.21 BOOKS AND RECORDS. The minute books, stock record books and other records
of the Purchaser and its Subsidiaries, all of which have been made available to
the Company, are correct in all material respects. The minute books of the
Purchaser and its Subsidiaries are accurate in material respects records of all
meetings and other corporate actions of their respective shareholders and board
of directors and committees thereof.
5.22 FINANCIAL REPORTS AND REGULATORY DOCUMENTS. Except as set forth on SCHEDULE
5.22, Purchaser has timely filed all reports, registrations and statements,
together with any amendments required to be made with respect thereto, that it
was required to file since January 1, 2000, with the SEC, and all other material
reports and statement required to be filed by it with any Governmental Body
since January 1, 2000, including, without limitation, any report or statement
required to be filed pursuant to the laws of the United States or the State of
Delaware, and has paid all fees and assessments due and payable in connection
therewith. As of their respective dates, such reports, registrations and
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statements complied in all material respects with all the laws, rules and
regulations of the applicable Governmental Body with which they are filed. The
Purchaser SEC Reports (i) at the time filed, complied in all material respects
with the applicable requirements of the Securities Act and Exchange Act, as the
case may be, (ii) did not at the time they were filed (or if amended or
superseded b a filing prior to the date of this Agreement, then on the date of
such filing prior to the date of this Agreement, then on the date of such
filing) contain any untrue statement of a material fact or omit to state a
material fact required to be stated in such Purchaser SEC Reports or necessary
in order to make the statements in such Purchaser SEC reports, in light of the
circumstances under which they were made, not misleading. None of Purchaser's
Subsidiaries is required to file any forms, reports or other documents with the
SEC. Except as set forth in this Agreement or the Schedules or Exhibits attached
hereto, or as disclosed in the Purchaser SEC Reports, there is no fact that the
Purchaser has not disclosed to the Company in writing and of which any of its
officers, directors or executive employees is aware and that has had or would
reasonably be expected to have a Material Adverse Effect.
ARTICLE 6
CONDUCT PENDING THE CLOSING
During the period from the date of this Agreement and continuing until the
Closing Date or the termination of this Agreement, the Parties hereto agree as
follows:
(a) ACCESS TO INFORMATION. The Parties shall afford to the each other and to
each others attorneys, accountants, and other authorized representatives, access
to, and upon request, copies of, all information available to the parties and
their respective Subsidiaries with respect to the operations of the parties and
their respective Subsidiaries including, all of the respective properties,
books, contracts, commitments, records and personnel. Such investigation shall
be conducted in such a manner so as not to interfere unreasonably with the
operations of the Company and its Subsidiaries. Further, each party agrees that
it will not, and will cause its representative not to, use any Confidential
Information obtained pursuant to this Article 6 (as well as any other
Confidential Information obtained prior to the date hereof in connection with
the entering into of this Agreement) for any purpose unrelated to the
consummation of the transactions contemplated by this Agreement. Subject to the
Requirements of Law, each party will keep confidential, and will cause its
representative to keep confidential, all Confidential Information and documents
obtained pursuant to this Article 6 (as well as any other information obtained
prior to the date hereof in connection with the entering into of this
Agreement). In the event that this Agreement is terminated or the transaction
contemplated by this Agreement shall otherwise fail to be consummated, each
party shall promptly cause all copies of documents or extracts thereof
containing Confidential Information and data as to the other party to be
returned to the other party. No investigation by either party of the business
and affairs of the other party shall affect or be deemed to modify or waive any
representation, warranty, covenant or agreement in this Agreement, or the
conditions to either party's obligation to consummate the transactions
contemplated by this Agreement.
(b) DIRECTOR AND STOCKHOLDER APPROVAL. Each of the Parties shall take all action
necessary (i) to obtain the written consent of its directors or to convene a
meeting of its directors to approve the Merger, this Agreement and the
transactions contemplated hereby and thereby, (ii) to obtain the written consent
of the holders of the Company Stock or Purchaser Common Stock (as applicable) or
to convene a meeting of their respective stockholders as soon as reasonably
practicable and (iii) to solicit the approval of their respective stockholders
of the Merger, this Agreement and the transactions contemplated hereby and
thereby. Each of the Parties shall ensure that its director and stockholder
approval is solicited in compliance with the procedural requirements of Delaware
Law, the Certificate of Incorporation and the Bylaws of the Company or the
Purchaser (as applicable), provided, however, that no director or officer shall
be required to violate any fiduciary duty or other requirement imposed by law in
connection therewith.
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(c) UPDATE TO DISCLOSURE SCHEDULES. Without limiting any party's right to rely
on the respective representations or warranties of the other parties contained
in ARTICLES IV OR V, each party shall provide the other parties with updates to
their respective Disclosure Schedules provided or made available pursuant hereto
as to material facts which arise or are first discovered between the date of
this Agreement and the Closing Date and which, if they had occurred and been
known prior to the date of this Agreement, would have been required to be
disclosed in order to make such party's respective representations and
warranties true and correct in all material respects as of the date of this
Agreement. Each party shall take all reasonable action within their respective
capability necessary to render accurate as of the Closing Date its respective
representations and warranties contained in this Agreement and shall refrain
from taking any action which would render inaccurate as of the Closing Date any
such representations or warranties. Each party shall notify the other of any
material adverse development causing a breach of any of its own representations
and warranties. Each party shall notify the other of any action, suit or
proceeding that shall be instituted or threatened against such party to
restrain, prohibit, or otherwise challenge the legality of any transaction
contemplated by this Agreement.
(d) COMMUNICATIONS. Neither of the Parties shall furnish any communication to
the public if the subject matter thereof relates to the other party or to the
transactions contemplated by this Agreement without the prior approval of the
other party as to the content thereof, which approval shall not be unreasonably
withheld. Nothing contained herein shall prevent any party at any time from
furnishing any information to any Governmental Body or from issuing any release
where it reasonably believes it is legally required to do so.
(e) ORDINARY COURSE OF BUSINESS. Each of the Parties shall use, and cause each
of its Subsidiaries to use, best efforts to: (i) preserve the services of its
present officers and employees, its net asset value and its business, including
its relationship with its customers and suppliers; (ii) operate and carry on its
business operations only in the Ordinary Course of Business and substantially as
presently operated; (iii) not sell, dispose of or encumber or enter into any
agreement for the sale of any of its material assets other than in the Ordinary
Course of Business; (iv) not change the method by which bonuses or other
payments are made to its officers, directors and employees and (v) not enter
into any material contract, arrangement or agreement.
(f) DIVIDENDS; CHANGES IN STOCK. Except in completing the transactions
contemplated by this Agreement, none of the Purchaser and/or its Subsidiaries
shall or shall propose to: (i) declare or pay any dividends on or make any other
distributions in respect of any of its capital stock; (ii) split, combine or
reclassify any of its capital stock or issue or authorize the issuance of any
other securities in respect of, in lieu of or in substitution for shares of its
capital stock; or (iii) repurchase or otherwise acquire any shares of its
capital stock.
(g) LEGAL CONDITIONS. Each party shall take all reasonable actions necessary to
comply promptly with any legal requirements which may be imposed on the
consummation of the transaction contemplated herein and shall promptly cooperate
with and furnish information to the other party in connection with any such
requirements imposed upon such other party in connection herewith. Each party
shall take all reasonable actions to obtain (and to cooperate with the other
party in obtaining) any consent, authorization, order or approval of, or any
exemption by, any Governmental Body, or other third party, required to be
obtained or made by such party (or by the other party) in connection with the
taking of any action contemplated thereby or by this Agreement. Each of the
parties shall file any Notification and Report Forms and related materials that
it may be required to file with the FTC and the DOJ under the HSR Act and shall
use its reasonable best efforts to obtain an early termination of the applicable
waiting period and make any further filings pursuant thereto that may be
necessary, proper or advisable.
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(h) ISSUANCE OF SECURITIES. Neither the Company nor the Purchaser shall issue,
deliver or sell, or authorize or propose or enter into any agreement for the
issuance, delivery or sale of, or purchase or propose the purchase of, any
Convertible Securities or Equity Securities, except (i) pursuant to the
provision of Convertible Securities issued and outstanding as of the date hereof
or (ii) pursuant to the agreements contemplated by ARTICLE 7.
(i) GOVERNING DOCUMENTS. None of the Purchaser and/or its Subsidiaries shall
amend its charter documents except as contemplated by ARTICLE 7.
(j) SALARIES, BENEFIT PLANS, ETC. Except as disclosed on Schedule 6(j), none of
the Purchaser and/or its Subsidiaries shall incur any salaries or other
compensation payable to officers, directors, employees or consultants, and shall
not hire any employees or consultants, nor adopt or amend in any material
respect any collective bargaining agreement or benefit plan or any other
agreement with employees.
(k) NOTICE OF CERTAIN DEFAULTS OR CLAIMS. The Purchaser shall give prompt notice
to the Company of (i) any notice of default received by it under any material
instrument or material agreement to which any of the Purchaser and/or its
Subsidiaries is a party or by which it is bound; (ii) any transaction that is
reasonably likely to have a Material Adverse Effect.
ARTICLE 7
CONDITIONS TO CLOSING
7.1 CONDITIONS TO EACH PARTY'S OBLIGATIONS. The obligations of each party to
effect the Merger are subject to the satisfaction on or prior to the Closing
Date of the following conditions unless waived (to the extent such conditions
can be waived) by all such parties affected thereby, as applicable:
(a) GOVERNMENT CONSENTS; AUTHORIZATIONS. All material consents, authorizations,
orders or approvals of, and filings or registrations with or imposed by, any
Governmental Body which are required for or in connection with the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby shall have been obtained or made, including, without limitation,
expiration or early termination of the waiting period under the HSR Act.
(b) LEGAL ACTION. No temporary restraining order, preliminary injunction or
permanent injunction or other order preventing the consummation of the
transactions contemplated herein shall have been issued by any Government Body
of competent jurisdiction and remain in effect. Each party agrees to use its
reasonable best efforts to have any such injunction or order lifted.
(c) LEGISLATION. No Requirement of Law shall have been enacted and remain in
effect which prohibits or makes illegal the consummation of this Agreement or
any of the conditions to the consummation of this Agreement.
7.2 CONDITIONS TO OBLIGATIONS OF THE PURCHASER. The obligations of the Purchaser
to perform this Agreement at the Closing are subject to the satisfaction on or
prior to the Closing Date of the following conditions, unless waived by the
Purchaser:
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(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties of the
Company contained in this Agreement shall be true and correct in all material
respects as of the date of this Agreement and as of the Closing Date as though
made on and as of the Closing Date, and the Purchaser shall have received a
certificate signed by an officer of the Company to such effect.
(b) DIRECTOR AND STOCKHOLDER APPROVAL. The Company shall have obtained all
requisite approval of its directors and stockholders for this Agreement, the
Merger and the transactions contemplated hereby.
(c) PERFORMANCE OF OBLIGATIONS BY THE COMPANY. The Company shall have performed
in all material respects all obligations required to be performed by it under
this Agreement on or before the Closing Date, and the Purchaser shall have
received a certificate signed by an officer of the Company to such effect.
7.3 CONDITIONS TO OBLIGATIONS OF THE COMPANY. The obligations of the Company to
perform this Agreement at the Closing are subject to the satisfaction on or
prior to the Closing Date of the following conditions, unless waived by the
Company:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties of the
Purchaser contained in this Agreement shall be true and correct in all material
respects as of the date of this Agreement and as of the Closing Date as though
made on and as of the Closing Date, and the Company shall have received a
certificate signed by an officer of the Purchaser to such effect.
(b) DIRECTOR AND STOCKHOLDER APPROVAL. The Purchaser shall have obtained all
requisite approval of its directors and shareholders for this Agreement, the
Merger and the transactions contemplated hereby.
(c) PERFORMANCE OF OBLIGATIONS OF THE PURCHASER. The Purchaser shall have
performed in all material respects all obligations required to be performed by
it under this Agreement on or before the Closing Date, and the Company shall
have received a certificate signed by an officer of the Purchaser to such
effect.
(d) GOVERNMENTAL FILINGS; NO VIOLATIONS. Purchaser shall have made all filings
required of it pursuant to the Exchange Act, including the filing of a Form 8-K
upon execution of this Agreement describing the transaction, subject to the
Company's prior review and reasonable approval.
(e) LIMIT ON DISSENTERS. Not more than five percent (5%) of the outstanding
shares of either Purchaser Stock or Company Stock shall have exercised dissenter
rights in connection with the proposed Merger.
(f) LIMITATION ON OUTSTANDING OBLIGATIONS. Except for trade payables incurred in
the Ordinary Course of Business and not past due, the Purchaser shall have no
more than $50,000 of outstanding debt or liabilities (including, without
limitation, any and all outstanding amounts owed or payable to employees or
independent contractors of Purchaser).
(g) TERMINATION OF CERTAIN AGREEMENTS. The employment agreements of ▇▇.
▇▇▇▇▇▇▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇ with the Purchaser shall be terminated by mutual
consent and the accrued salary, options and other benefits owed to ▇▇.
▇▇▇▇▇▇▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇ shall be satisfied on or before the Closing Date.
-17-
(h) FINANCING TRANSACTION. Purchaser shall have entered into, and be a party to,
definitive agreements contemplating the purchase by, and sale to, a third party
or parties of at least $15.0 million of equity securities of the Purchaser, such
purchase and sale to occur subsequent to the closing of the Merger and be in
form and substance satisfactory to the Company in its sole and absolute
discretion.
(i) WHITEBOX CONSENT. Whitebox Advisors and each of the Whitebox Parties shall
have consented to this Agreement and the transactions contemplated hereby, and
the Purchase Agreement dated September 17th, 2004 by and between the Company and
the Whitebox Parties (the "Whitebox Agreement") and each of the Notes and
Warrants (as such terms are defined in Whitebox Agreement) shall be revised and
amended to appropriately reflect the transactions contemplated by this Agreement
in form and substance satisfactory to the Company in its sole and absolute
discretion.
(j) REVERSE STOCK SPLIT. The Purchaser shall have consummated a reverse split of
all of Purchaser's presently authorized common stock in such amount as approved
in writing by the Company.
ARTICLE 8
TERMINATION
8.1 TERMINATION. Notwithstanding any other provisions of this Agreement, this
Agreement may be terminated, and the Merger may be abandoned as follows:
(a) MUTUAL CONSENT. At any time prior to the Effective Time, by the mutual
consent of Purchaser and Company, if the Board of Directors of each so
determines by vote of a majority of the members of its entire Board.
(b) BREACH. At any time prior to the Effective Time, by Purchaser or Company if
its Board of Directors so determines by vote of a majority of the members of its
Board, in the event of either: (i) a breach by the other party of any
representation or warranty contained herein (subject to the standard set forth
herein), which breach cannot be or has not been cured within 10 days after the
giving of written notice to the breaching party of such breach; or (ii) a breach
by the other party of any of the covenants or agreements contained herein, which
breach cannot be or has not been cured within 10 days after the giving of
written notice to the breaching party of such breach.
(c) DELAY. At any time prior to the Effective Time, by either Purchaser or
Company if its Board of Directors so determines by vote of a majority of the
members of its entire Board, in the event that the Merger is not consummated by
December 31, 2004, except not by such Party to the extent that the failure of
the Merger then to be consummated arises out of or results from knowing action
or inaction of such party to the detriment of the other Party, except as
permitted hereunder.
(d) NO APPROVAL. By Company or by the Purchaser, if its Board of Directors so
determines by a vote of a majority of the members of its entire Board, in the
event the approval of any Governmental Body required for consummation of the
Merger and the other transactions contemplated by this Agreement shall have been
denied by final nonappealable action of such Governmental Body or any
Governmental Body issues a final nonappealable order blocking the Merger.
(e) ACQUISITIONS PROPOSAL. This Agreement may be terminated by Purchaser or
Company by written notice to the other if such party (i) received an Acquisition
Proposal, (ii) receives the advice of its outside counsel that to proceed with
the Merger will violate the fiduciary duties of its Board of Directors to its
stockholders in light of such Acquisition Proposal, and (iii) after receiving
such advice, determines to accept such proposal; provided, however, that such
party shall not be entitled to terminate this Agreement pursuant to this SECTION
8.1(e) unless it shall have provided the Company with written notice of such a
possible determination (which written notice will inform the other of the
material terms and conditions of the proposal, including the identity of the
proponent) not less than two business days prior to such determination.
-18-
(f) DISCLOSURE SCHEDULES AMENDMENT OR SUPPLEMENT. At any time prior to the
Effective Time by either Company or Purchaser, if its Board of Directors so
determines by vote of a majority of the members of its entire Board that the
other party has amended its Disclosure Schedules provided pursuant to ARTICLES
IV OR V hereof (as applicable) and such amendment discloses events that would be
reasonably likely to result in a Material Adverse Effect on the Surviving
Company following the Closing.
(g) FAILURE TO APPROVE. This Agreement shall automatically terminate if the
stockholders of either Purchaser or the Company fail to approve this Agreement
and the transactions contemplated hereby pursuant to any vote taken (at any
meeting or by written consent) seeking shareholder approval thereof.
8.2 EFFECT OF TERMINATION AND ABANDONMENT. In the event of termination of this
Agreement and the abandonment of the Merger pursuant to SECTIONS 8(a)-(e), no
party to this Agreement shall have any liability or further obligation to any
other party hereunder except that termination under SECTION 8.1(b) will not
relieve a breaching party from liability for any breach of this Agreement giving
rise to such termination; provided, however, in no event shall the breaching
party pay to the non-breaching party for such a breach an amount greater than
the actual out-of-pocket costs and expenses incurred by the non-breaching party
in connection with this Agreement and the enforcement of its rights hereunder.
ARTICLE 9
GENERAL PROVISIONS
9.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representation and
warranties of the Company and Purchaser set out herein shall survive the
Closing.
9.2 FURTHER ASSURANCES. From time to time, each party will execute such
additional instruments and take such actions as may be reasonably required to
carry out the intent and purposes of this agreement.
9.3 WAIVER. Any failure on the part of either party hereto to comply with any of
its obligation, agreements, or conditions hereunder may be waived in writing by
the party to whom such compliance is owed.
9.4 BROKERS. Each party agrees to indemnify and hold harmless the other party
against any fee, loss, or expense arising out of claims by brokers or finders
employed or alleged to have been employed by the indemnifying party.
9.5 NOTICES. All notices and other communications hereunder shall be in writing
and shall be deemed to have been given if delivered in person or sent by prepaid
first-class certified mail, return receipt requested or recognized commercial
courier service or when sent by facsimile to the number set forth below if sent
between 8:00 a.m. and 5:00 p.m. recipient's local time ("Local Time") of a
business day, or on the next business day if sent other than between the hours
of 8:00 a.m. and 5:00 p.m. Local Time or on a business day, as follows:
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If to the Company:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Sutura, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to::
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Hampton LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇. ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Purchaser:
▇▇▇▇▇ ▇. ▇▇▇▇▇
Technology Visions Group, Inc.
▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile:
With a copy to:
------------------
------------------
------------------
------------------
9.6 GOVERNING LAW. This agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware.
9.7 ASSIGNMENT. This agreement shall inure to the benefit of, and be binding
upon, the parties hereto and their successors and assigns provided however, that
any assignment by either party of its rights under this agreement without the
written consent of the other party shall be void.
9.8 COUNTERPARTS. This agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Signatures sent by
facsimile transmission shall be deemed to be evidence of the original execution
thereof.
9.9 CLOSING DATE. The Closing shall take place upon the fulfillment by each
party of all the conditions of Closing required herein, but not later than 45
days following execution of this agreement unless extended by mutual consent of
the parties.
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9.10 REVIEW OF THE AGREEMENT. Each party acknowledges that it has had time to
review this agreement and, as desired, consult with counsel. In the
interpretation of this agreement, no adverse presumption shall be made against
any party on the basis that it has prepared, or participated in the preparation
of, this agreement.
9.11 SCHEDULES. All schedules attached hereto, if any, shall be acknowledged by
each party by signature or initials thereon and shall be dated.
9.12 EFFECTIVE DATE. The effective date of this agreement shall be upon its
execution.
[Signatures on following page]
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SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER BETWEEN SUTURA, INC.
AND TECHNOLOGY VISIONS GROUP, INC.
IN WITNESS WHEREOF, the parties have executed this agreement this 22nd day of
November 2004.
TECHNOLOGY VISIONS GROUP, INC. SUTURA, INC.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------- ---------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, President ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
-22-
EXHIBIT A
DEFINITIONS
"ACQUISITION PROPOSAL" means any tender or exchange offer, proposal for a
merger, consolidation or other business combination involving Purchaser or any
proposal or offer to acquire in any manner a substantial equity interest in, or
a substantial portion of the assets or deposits of, Purchaser, other than the
transactions contemplated by this Agreement.
"AGREEMENT" shall have the meaning set forth in the introductory paragraph.
"CLOSING" and "CLOSING DATE" have the meanings set forth in Section 2.2 hereof.
"COMPANY" shall have the meaning set forth in the introductory paragraph.
"COMPANY ACTIVITIES TO DATE" shall have the meaning set forth in Section 4.22
"COMPANY COMMON STOCK" shall have the meaning set forth in Section 4.5.
"COMPANY DISSENTING SHARE" means any share of Company Stock, which is owned by a
stockholder who or which has exercised his, her or its appraisal rights under
Delaware Law.
"COMPANY FINANCIAL STATEMENTS" means: (i) the audited consolidated balance
sheets of the Company at December 31, 1997, 1998, 1999 and 2000, and the related
statements of income, cash flows and changes in shareholders' equity for the
fiscal years then ended; and (ii) the unaudited consolidated balance sheets of
the Company at December 31, 2001, 2002, 2003 and the related statements of
income and cash flows for the periods then ended.
"COMPANY INTELLECTUAL PROPERTY ASSETS" shall have the meaning set forth in
Section 4.16.
"COMPANY LICENSES" shall have the meaning set forth in Section 4.22.
"COMPANY MATERIAL AGREEMENT" shall have the meaning set forth in Section 4.15.
"COMPANY PREFERRED STOCK" shall have the meaning set forth in Section 4.5.
"COMPANY PRODUCTS" shall have the meaning set forth in Section 4.22.
"COMPANY RIGHTS" shall have the meaning set forth in Section 3.3.
"COMPANY STOCK" means all of the issued and outstanding shares of Company Common
Stock and Company Preferred Stock issued and outstanding immediately before
Closing.
"COMPANY STOCKHOLDER" means any holder of shares of Company Stock.
"CONFIDENTIAL INFORMATION" means all information relating to the customers or
markets of the party which originally disclosed such information ("DISCLOSING
PARTY"), the composition, manufacture or development of the Disclosing Party's
products, the corporate structure and organization of the Disclosing Party and
other technical data, trade secrets or proprietary information, the Financial
Statements and all earlier and subsequent financial statements, financial
information, budgets, forecasts, marketing plans and strategies, business plans,
business, assets or prospects of the Disclosing Party which such party protects
against unrestricted disclosure to others and such other information as the
-23-
Disclosing Party shall advise the other parties to this Agreement is considered
by the Disclosing Party as confidential. Confidential Information shall not
include information that: (i) was rightfully in the possession of the party
which originally received such information from the Disclosing Party ("RECEIVING
PARTY") or was rightfully known to the Receiving Party prior to receipt from the
Disclosing Party and is not subject to a separate confidentiality obligation;
(ii) is independently developed by the Receiving Party; (iii) is or becomes
publicly known without the fault of the Receiving Party; (iv) is or becomes
rightfully available to the Receiving Party without confidentiality restriction
from a source other than the Disclosing Party; or (v) which a party is required
to disclose pursuant to a directive of a Governmental Body; provided that in
each of the foregoing exceptions the burden of proof that any information does
not constitute Confidential Information shall be on the Receiving Party.
"CONVERTIBLE SECURITIES" means options, warrants or other rights to acquire
securities of the Company or Purchaser (as the context requires).
"DELAWARE LAW" shall have the meaning set forth in the Recitals.
"DISCLOSURE SCHEDULES" shall mean the Schedules of the Company provided pursuant
to Article IV or of the Purchaser provided pursuant to Article V (as the context
requires).
"DOJ" shall have the meaning set forth in Section 4.3.
"EFFECTIVE TIME" shall have the meaning set forth in Section 2.4
"ENCUMBRANCE" means any lien, claim, charge, security interest, mortgage,
pledge, easement, conditional sale or other title retention agreement, defect in
title, covenant or other claim or interest in property.
"ENVIRONMENTAL LAWS" means any laws, rules, regulations, orders, treaties,
statutes and codes of any Governmental Body presently in effect which prohibit,
regulate or control or relate to emissions, discharges, releases or threatened
releases of any pollutants, contaminants, chemicals or industrial, hazardous or
toxic materials or wastes or the transportation, storage, transfer, use,
manufacture, processing, distribution, treatment, disposal, handling or dealing
with such materials or which relate to pollution or to protection of the
environment.
"EQUITY SECURITIES" shall mean any capital stock or other equity interest or any
securities convertible into or exchangeable for capital stock or any other
rights, warrants or options to acquire any of the foregoing securities.
"ERISA" shall have the meaning set forth in Section 4.19.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934 and the rules and
regulations promulgated thereunder, as amended.
"EXCHANGE RATIO" shall have the meaning set forth in the definition of Merger
Consideration.
"FDA" shall have the meaning set forth in Section 4.22.
"FTC" shall have the meaning set forth in Section 4.3.
"GAAP" means generally accepted accounting principles in the United States,
consistently applied.
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"GOVERNMENTAL BODY" means any court or any governmental or regulatory authority
of the United States of America or any other country, or any state, county,
locality, district, or other political subdivision thereof, and includes without
limitation any self-regulatory organizations such as stock exchanges or the
National Association of Securities Dealers, which govern the issuance or trading
in securities.
"HSR ACT" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as
amended, and the rules and regulations thereunder.
"INTELLECTUAL PROPERTY" means all proprietary rights and information, including,
without limitation, all patents (including any registrations, continuations,
continuations in part, renewals and applications for any of the foregoing);
ideas, conceptions and inventions (whether or not patentable, reduced to
practice or made the subject of a pending patent application), copyrights
(whether or not registered), copyrighted or copyrightable works, trademarks,
service marks, trade names, URLs and Internet domain names, databases, designs,
slogans and general intangibles of like nature, together with all goodwill
related to the foregoing, drawings, designs, mask works or registrations
thereof, technology, trade secrets and other confidential information, know-how,
proprietary processes, customer lists, inventions, methodologies and, with
respect to all of the foregoing, related confidential documentation
manufacturing and production processes and techniques, research and development
information and other confidential technical information, as well as all rights
in and to computer programs, data files and other software.
"KNOWLEDGE". Where any representation or warranty contained in this Agreement is
expressly qualified by reference to Knowledge of or relating to the Company,
such Knowledge shall mean the actual knowledge of the following officers and
directors of the Company: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇. Where any
representation or warranty contained in this Agreement is expressly qualified by
reference to Knowledge of or relating to the Purchaser, such Knowledge shall
mean the actual knowledge of the following officers and directors of the
Purchaser: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on the business,
results of operations or financial condition of the Company and its Subsidiaries
or the Purchaser (as the context requires), in each case taken as a whole, other
than any effect relating to the economy or securities markets in general, or the
industries in which the relevant Party operates.
"MERGER" shall have the meaning set forth in the Recitals.
"MERGER CONSIDERATION" shall mean and be determined as follows:
Each share of Company Stock shall be converted into and exchanged for that
number of shares of Purchaser Common Stock pursuant to the following ratio
("EXCHANGE RATIO"):
A = (B/.05)/C
A - means the number of shares of Purchaser Common Stock to be
exchanged for each share of Company Stock.
B - that number of issued and outstanding shares of Purchaser Common
Stock determined immediately prior to the Closing, on a fully diluted
as converted basis, assuming conversion, exercise and/or exchange of
all securities or other rights to acquire Purchaser Common Stock, as
applicable.
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C - means that number of issued and outstanding shares of Company Stock
immediately prior to the Closing, on a fully diluted as converted basis
(but specifically excluding any assumption of conversion or exercise of
any Whitebox Securities), assuming conversion, exercise and/or exchange
of all Convertible Securities or other rights to acquire Company Stock.
"ORDINARY COURSE OF BUSINESS" means the ordinary course of business consistent
with past custom and practice.
"PARTIES" shall have the meaning set forth in the introductory paragraph.
"PERMITTED LIENS" means: (i) liens for Taxes, assessments and governmental
charges not yet due and payable; (ii) zoning laws and ordinances which do not in
any material respect, individually or in the aggregate, impair the value or
merchantability or use of the property as it is currently being used; (iii)
rights reserved to any Governmental Body to regulate the affected property; (iv)
purchase-money liens arising out of the purchase or sale of products or services
made in the Ordinary Course of Business; and (v) any Encumbrances that arise in
the Ordinary Course of Business.
"PERSON" means any individual, corporation (including any non-profit), general
or limited partnership, limited liability company, joint venture, estate, trust,
association, organization, foundation, labor union, or other entity or
Governmental Body.
"PURCHASER" shall have the meaning set forth in the introductory paragraph.
"PURCHASER COMMON STOCK" shall have the meaning set forth in Section 5.5.
"PURCHASER INTELLECTUAL PROPERTY ASSETS" shall have the meaning set forth in
Section 5.16.
"PURCHASER MATERIAL AGREEMENT" shall have the meaning set forth in Section 5.15.
"PURCHASER PREFERRED STOCK" shall have the meaning set forth in Section 5.5.
"PURCHASER SEC REPORTS" shall mean all the form, reports, and documents required
to be filed by Purchaser with the SEC since January 1, 2000.
"RELATED PARTY" means a Person controlling, controlled by or under common
control with a party to this Agreement or any Purchaser, offspring, spouse,
brother or sister of such person or his or her spouse (collectively "FAMILY
MEMBER") and any Person controlling, controlled by or under common control of
such Family Member.
"REQUIREMENT OF LAW" means any U.S. federal, state, local, municipal, foreign,
international, multinational or other administrative order, constitution, law,
ordinance, principle of common law, regulation, statute or treaty.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"STOCK OPTION PLANS" means the Amended and Restated 1999 and 2001 Stock Option
Plans of the Company and those of the Purchaser.
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"SUBSIDIARIES" means any Person in which the Company or the Purchaser (as the
context requires) has a direct or indirect equity ownership interest of 50% or
more.
"SURVIVING CORPORATION" shall have the meaning set forth in Section 2.1.
"TAX" or "TAXES" means any U.S. federal, state, local or foreign tax, including
net income, alternative or add-on minimum, gross income, gross receipts,
property, sales, use, transfer, gains, license, excise, employment, payroll,
withholding or minimum tax, or any other tax, custom, duty, governmental fee or
other like assessment or charge of any kind whatsoever, together with any
interest or any penalty, addition to tax or additional amount imposed by any
Governmental Body.
"WHITEBOX SECURITIES" means those shares of Company Stock issuable upon exercise
of the Warrants or those shares issuable upon conversion of the Convertible
Promissory Notes issued to any of Pandora Select Partners L.P., Whitebox Hedged
High Yield Partners L.P., Whitebox Convertible Arbitrage Partners L.P., Whitebox
Intermarket Partners, L.P. ▇▇▇▇ ▇. ▇▇▇▇▇▇ or ▇▇▇▇ ▇. ▇▇▇▇▇▇ (collectively, the
"Whitebox Parties").
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