EXHIBIT 2
PLAN AND AGREEMENT OF RECAPITALIZATION AND MERGER
This Plan and Agreement of Recapitalization and Merger ("Agreement") is
entered into as of April 17, 1997, by and among M T Financial Group, Inc., a
Nevada corporation ("MTFI"), M T Merging Corp., a Tennessee corporation
("Merging Corp."), Photogen, Inc., a Tennessee corporation ("Newco"), Photogen,
L.L.C., a Tennessee limited liability company ("Photogen"), ▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Ph.D. ("▇▇▇▇▇▇▇"), ▇▇▇▇▇ ▇▇▇▇, Ph.D. ("▇▇▇▇"), ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Ph.D.
("▇▇▇▇▇▇"), ▇▇▇ ▇▇▇▇▇, Ph.D. ("▇▇▇▇▇"), and ▇▇▇▇ ▇▇▇▇▇▇ ("▇▇▇▇▇▇"), and joined
into by ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇▇"), ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, M.D.
("▇▇▇▇▇▇▇▇▇") and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("▇▇▇▇▇▇") as set forth hereinafter.
RECITALS
A. Wachter, Dees, Fisher, Scott, and ▇▇▇▇▇▇ are sometimes individually
referred to herein as a "Seller" and collectively as "Sellers." The Sellers own
all of the outstanding Membership Interests (as hereinafter defined) of
Photogen.
B. Merging Corp. is a wholly-owned subsidiary of MTFI.
C. Immediately following the execution of this Agreement MTFI, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ will recapitalize MTFI's issued and outstanding common
stock as set forth in Exhibit A.
D. Immediately following the execution of this Agreement, Photogen will
liquidate and dissolve and thereby assign, transfer and deliver all of its
Assets (as hereinafter defined) to the Sellers. The Sellers will immediately
transfer all such Assets to Newco in exchange for all of the Common Stock of
Newco in accordance with Section 351 of the Internal Revenue Code of 1986, as
amended (the "Code").
E. At the Effective Time (as hereinafter defined) in an intended tax-free
reorganization pursuant to Section 368(a) of the Code, Merging Corp. will merge
into Newco with Newco being the Surviving Corporation after the merger and with
the stockholders of Newco receiving shares of MTFI common stock, on and subject
to the terms and conditions of this Agreement (the "Merger").
E. In the Merger, MTFI will change its name to Photogen Technologies,
Inc.
F. The Board of Directors of MTFI (i) has determined that the Merger
and other transactions contemplated by this Agreement are in the best
interests of the holders of MTFI Common Stock (as hereinafter defined), and
(ii) has approved and adopted this Agreement and the transactions
contemplated hereby and recommended approval and adoption of this Agreement
by the stockholders of MTFI.
G. The Sellers, as holders of all the Membership Interests of Photogen,
have determined that the transactions contemplated herein are in the best
interest of Photogen and its Members and have approved this Agreement and the
transactions contemplated hereby.
AGREEMENT
NOW, THEREFORE, in consideration of the representations, warranties, and
covenants herein, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, each of the parties hereby agrees as
follows:
1. Principal Definitions. The capitalized terms listed below shall have
the meanings set forth in this Section 1. Certain other capitalized terms are
defined elsewhere in this Agreement.
"Adverse Consequences" means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid
in settlement, Liabilities, Taxes, liens, losses, expenses, and fees, including
court costs and reasonable attorneys' fees and expenses.
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act; and, with respect to Photogen or
Newco, shall include each Seller, each holder of a Membership Interest and/or
each holder of Newco Common Stock.
"Assets" with respect to any entity means the following properties (whether
now owned or hereafter existing or acquired, whether tangible or intangible, and
wherever located) free and clear of any Liabilities or Security Interests: all
right, title and interest to its entire business, operations, properties and
assets, including all goods, inventory, equipment, furniture, fixtures,
accounts, instruments, contract rights, leases or leasehold interests,
Intellectual Property (including the Patents in the case of Photogen and in the
case of Newco, the Patents after the transaction under Section 2(a)(ii)),
general intangibles, cash and cash equivalents, books, records and data and any
other business, property or asset related to or used in connection with the
entities business.
"Basis" means any past or present fact, situation, circumstance, status,
condition, activity, practice, plan, occurrence, event, incident, action,
failure to act, or transaction that forms or could form the basis for any
specified consequence.
"Confirmatory License" means the Confirmatory Licenses dated February 4,
1997 by ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ and ▇▇▇▇ in favor of the United States Government,
attached hereto as Exhibit B.
"Contract" means any written or oral agreement, contract, commitment,
license, sublicense, lease, sublease, indenture, mortgage, instrument of
indebtedness, pledge, guarantee, arrangement, understanding or plan, and all
rights and obligations under the foregoing.
"Employee Benefit Plan" means any (a) qualified or nonqualified Employee
Pension Benefit Plan, (b) Employee Welfare Benefit Plan, or (c) fringe benefit,
deferred compensation, retirement, pension, severance or other similar plan or
program. The capitalized terms used within this definition shall have the
meanings given to them in the Employee Retirement Income Security Act of 1974,
as amended.
"Environmental, Health, and Safety Laws" means the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the Resource
Conservation and Recovery Act of 1976, and Superfund Amendments and
Reauthorization Act of 1986 and the Occupational Safety and Health Act of 1970,
each as amended, together with all other laws (including rules, regulations,
codes, plans, injunctions, judgments, orders, decrees, rulings, and charges
thereunder) of federal, state, local, and foreign governments (and all agencies
thereof) concerning pollution or protection of the environment, public health
and safety, or employee health and safety, including laws relating to emissions,
discharges, releases, or threatened releases of Hazardous Substances into
ambient air, surface water, ground water, or lands or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of Hazardous Substances.
"GAAP" means generally accepted accounting principles applied on a
consistent basis throughout the relevant periods.
"Hazardous Substance" means any pollutants, contaminants, chemical,
medical, infectious, industrial, hazardous, or toxic materials or substances,
including those set forth in Section 302 of the Emergency Planning and Community
Right-to-Know Act of 1986, as amended.
"Intellectual Property" means (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto,
and all patents, patent applications, and patent disclosures, together with the
rights to make foreign applications for the inventions and improvements, all
reissuances, continuations, continuations-in-part, revisions, extensions, and
reexaminations thereof (including with respect to the Sellers, Photogen and
Newco, the Patents, as hereinafter defined) in the United States and all
countries foreign to the United States, (b) all trademarks, service marks, trade
dress, logos, trade names, and company names, together with all translations,
adaptations, derivations, and combinations thereof (whether or not any of the
foregoing are registrable or registered) and including all goodwill associated
therewith, and all applications, registrations, and renewals in connection
therewith, (c) all copyrightable works, all copyrights, and all applications,
registrations, and renewals in connection therewith, (d) all mask works and all
applications, registrations, and renewals in connection therewith, (e) all trade
secrets and confidential business information (including ideas, research and
development, know-how, formulas, compositions, protocols, processes and
techniques, technical data, designs, drawings, specifications, customer and
supplier lists, pricing and cost information, and business and marketing plans
and proposals), (f) all computer software (including data and related
documentation), (g) all other proprietary rights, (h) all licenses, sublicenses,
permissions and agreements, and rights thereunder, including where any Person is
a licensee or licensor, and (o) all copies and tangible embodiments thereof (in
whatever form or medium).
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"Knowledge" means actual knowledge after reasonable investigation.
"Liability" means any liability or obligation (whether known or unknown,
whether asserted or unasserted, whether absolute or contingent, whether accrued
or unaccrued, whether liquidated or unliquidated, and whether due or to become
due).
"Membership Interest" means a membership interest (and all related
membership rights) of Photogen.
"Merging Corp. Common Stock" means a share of the Common Stock, par value
$.01 per share, of Merging Corp.
"MTFI Common Stock" means a share of the Common Stock, par value $.001 per
share, of MTFI.
"Newco Common Stock" means a share of the Common Stock, par value $.01 per
share, of Newco.
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"Patents" means all patents, patent applications (including any
amendments), and patent disclosures, together with all reissuances,
continuations, continuations-in-part, revisions, extensions, and reexaminations
thereof, and all improvements and inventions related thereto, related to or
arising out of Photogen's method for improved selectivity in photo-activation of
molecular agents and Photogen's method for improved selectivity in
photo-activation and detection of molecular diagnostic agents, including U.S.
Patent Applications filed with respect thereto by Photogen on October 30, 1996
with the U.S. Patent and Trademark Office, copies of which are set forth in
Schedule 3(n) hereto.
"Person" means an individual, partnership, corporation, association, joint
stock company, trust, joint venture, limited liability company, unincorporated
organization, or governmental entity (or any department, agency, or political
subdivision thereof).
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Security Interest" means any mortgage, pledge, lien, claim, demand,
charge, assessment or any other security interest or encumbrance.
"Subsidiary" means any Person with respect to which a specified Person (or
a Subsidiary thereof) owns a majority of the outstanding equity securities (or
similar interests) of any class or has the power to vote or direct the voting of
sufficient securities (or similar interests) to elect a majority of the
directors (or Persons performing a similar function).
"Tax" means any federal, state, local, or foreign income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental (including taxes under Code Section 59A),
customs duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any interest, penalty,
or addition thereto, whether disputed or not.
"Tax Return" means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto and any amendment thereof.
2. Recapitalization and Merger Transactions.
(a) Recapitalization. Promptly after the date of this Agreement:
(i) MTFI shall recapitalize its issued and outstanding Common Stock
as set forth in Exhibit A hereto.
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(ii) Photogen shall liquidate and dissolve and assign, transfer and
deliver all of its Assets to the Sellers free and clear of any Liability or
Security Interest (except the Confirmatory License with respect to the Patents);
and the Sellers shall thereafter immediately assign, transfer and deliver all
such Assets to Newco free and clear of any Liability or Security Interest
(except the Confirmatory License with respect to the Patents), in exchange for
100 shares of Newco Common Stock issued to each Seller (500 shares in the
aggregate).
(b) Merger.
(i) Merging Corp. shall be merged with and into Newco in accordance
with the Tennessee Business Corporation Act (the "Corporation Law") and Newco
shall be the Surviving Corporation after the Merger.
(ii) The Merger shall be effective when properly executed Articles of
Merger, together with any other documents required by law to effectuate the
Merger, shall be filed with the Tennessee Secretary of State, which filing shall
be made as soon as possible after the satisfaction or waiver of the conditions
set forth in Section 7 hereof. When used in this Agreement, the term "Effective
Time" shall mean the time when the Certificate of Merger is so filed and the
term "Effective Date" shall mean the date on which the Certificate of Merger is
so filed. The parties hereto shall take all appropriate actions necessary to
cause the Effective Date to occur as soon as practicable and prior to May 16,
1997, unless delayed by circumstances beyond their reasonable control.
(iii) At the Effective Time, each outstanding share of Newco
Common Stock shall be converted into 48,000 shares of MTFI Common Stock and each
outstanding share of Merging Corp. Common Stock shall be converted into one
share of Newco Common Stock.
(iv) The Charter of Newco in effect immediately prior to the Effective
Time shall be the Charter of Newco as the Surviving Corporation after the
Effective Time until amended; and the By-laws of Newco shall be the By-laws of
Newco as the Surviving Corporation after the Effective Time. Immediately after
the Effective Time, the directors of MTFI and Newco shall be Smolik, Wachter,
Dees, Fisher, and ▇▇▇▇▇▇▇▇▇, and they shall continue after the Effective Time as
directors of MTFI and Newco in accordance with the respective By-laws of such
corporations and until their successors are elected and qualified. Newco shall
continue after the Effective Time to be subject to the Corporation Law.
(v) At the Effective Time, the effect of the Merger shall be as
provided in the applicable provisions of the Corporation Law. Without limiting
the generality of the foregoing, and subject to the Corporation Law, all the
property, rights, privileges, powers and franchises of Newco and Merging Corp.
shall vest in Newco as the Surviving Corporation without reversion or
impairment, and all debts, liabilities and duties of Newco and Merging Corp.
shall become the debts, liabilities and duties of Newco as the Surviving
Corporation.
(c) The Closing. The closing of the Merger and other transactions
contemplated by this Agreement to be effective as of the Effective Time (the
"Closing") shall take place at the offices of ▇▇▇▇▇▇ & ▇▇▇▇▇ in Chicago,
Illinois. At the Closing, each party will deliver the certificates,
instruments, agreements and documents, that such party is required to deliver at
the Closing in accordance with Schedule 2(c) attached hereto (the "Closing
Deliveries").
3. Representations and Warranties of the Sellers, Newco and Photogen.
Each of the Sellers, Newco and Photogen, jointly and severally, represent and
warrant to MTFI and Merging Corp. that the statements contained in this Section
3 are true and complete as of the date of this Agreement and will be true and
complete as of the Closing (as though made at and as of the Closing), except as
set forth in Schedule 3 attached hereto (the "Sellers' Disclosure Schedule").
(a) Investment. Each Seller (i) understands that the shares of MTFI
Common Stock to be issued to such Seller hereunder have not been, and will not
in the foreseeable future be, registered under the Securities Act, or under any
state securities laws, and are being offered and sold to the Sellers in reliance
upon federal and state exemptions for transactions not involving any public
offering, (ii) is acquiring the MTFI Common Stock hereunder solely for such
Seller's own account for investment purposes, and not with a view to the resale
or distribution thereof except in full compliance with all applicable securities
laws, (iii) is a sophisticated investor with knowledge and experience in
business and financial matters, (iv) has received information concerning MTFI
and has had the opportunity to obtain additional information as desired in order
to evaluate the merits and the risks inherent in
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holding the MTFI Common Stock, (v) is able to bear the economic risk and lack
of liquidity inherent in holding the MTFI Common Stock, and (vi) is a bona
fide resident of Tennessee.
(b) Authorization of Transaction. Each Seller, Newco and Photogen has
full power and authority to execute and deliver this Agreement and all other
documents and instruments contemplated hereby to be executed and delivered by
such Seller, Newco or Photogen and to perform their respective obligations
hereunder and thereunder. This Agreement and such other documents and
instruments constitute the valid and legally binding obligation of each of
them, enforceable in accordance with their terms and conditions.
(c) Organization, Qualification, and Corporate Power. Photogen is a
limited liability company and Newco is a corporation and each is duly
organized, validly existing, and in good standing under the laws of the State
of Tennessee. Photogen and Newco each is duly authorized to conduct business
in and is in good standing under the laws of Tennessee. Neither Photogen nor
Newco has or will engage in any business prior to the Closing other than
Photogen filing for and prosecuting the Patents with the U.S. Patent and
Trademark Office and matters directly relating thereto. Schedule 3(c)
contains correct and complete copies of the organizational documents of
Photogen and Newco. The minute books (containing all of the records of
meetings and all actions taken by written consent of the Members or
stockholders and the governing board, and all committees of the governing
board, as applicable) of Photogen and Newco are true and complete. Neither
Photogen nor Newco is in default under or in violation of any provision of
its organizational documents.
(d) Capitalization. The authorized, issued and outstanding Photogen
Membership Interests and Newco Common Stock are set forth in Schedule 3(d)
hereto and there are no other Membership Interests of Photogen or shares of
capital stock of Newco authorized, issued or outstanding. All of the issued and
outstanding Photogen Membership Interests and Newco Common Stock have been duly
authorized, are validly issued, fully paid, and nonassessable, and are held of
record and beneficially by the Sellers as set forth Schedule 3(d). There are no
authorized or outstanding options, warrants, purchase rights, subscription
rights, conversion rights, exchange rights, or other contracts or commitments
that could require Photogen or Newco to issue, sell, or otherwise cause to
become outstanding any of the Membership Interests or capital stock of Photogen
or Newco, as applicable. There are no authorized or outstanding stock
appreciation, phantom stock, profit participation, or similar rights or voting
trusts, proxies, or other agreements or understandings with respect to Photogen
or Newco, as applicable, other than as set forth in the Photogen Operating
Agreement or this Agreement. The Membership Interests are held by each Seller
free and clear of any restrictions on transfer (other than restrictions under
the Securities Act, state securities laws, this Agreement and the Photogen
Operating Agreement), Taxes, Security Interests, options, warrants, purchase
rights, Contracts, commitments, equities, claims, and demands. No Seller is a
party to any option, warrant, purchase right, or other Contract or commitment
that could require a Seller to sell, transfer, or otherwise dispose of any
Membership Interests (other than this Agreement and the Photogen Operating
Agreement). No Seller is a party to any voting trust, proxy, or other agreement
or understanding with respect to the voting of any Membership Interests or Newco
Common Stock. Each of the Sellers and Photogen hereby waive all such
restrictions on the Membership Interests and hereby waive all dissenters' rights
under the Corporation Law, subject to the consummation of the transactions
contemplated hereby.
(e) Noncontravention. Neither the execution and delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any license, permit or
authorization of any government, governmental agency, court or other entity to
which Photogen, Newco or any Seller is subject or any provision of the articles
of organization, operating agreement, charter or bylaws of Photogen or Newco, as
applicable, or (ii) conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any Person the right to
accelerate, terminate, modify, or cancel, or require any notice to or consent by
any person under any Contract to which Photogen, Newco or any Seller is a party
or by which Photogen, Newco or any Seller is bound or to which any of their
Assets, including Intellectual Property, is subject (or result in the imposition
of any Security Interest upon any of such Assets). Photogen, Newco and each
Seller is not required to give any notice to, make any filing with, or obtain
any authorization, consent, or approval of any Person (except for customary
corporate and/or securities laws filings) in order for the parties to consummate
the transactions contemplated by this Agreement, including the assignment,
transfer and delivery of Photogen's Intellectual Property (including the
Patents) to Newco as contemplated in this Agreement.
(f) Brokers' Fees. Each of the Sellers and Photogen has no Liability to
pay any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement which is or could become
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a Liability of Newco or MTFI, except for the fees and commissions of ▇▇▇▇▇▇
▇▇▇▇▇ and Aurora Capital Corporation as set forth in Schedule 3(f).
(g) Title to Assets. Photogen has (and upon the Closing, Newco shall
have) good and marketable title to the Assets used by Photogen, located on its
premises or on facilities used by Photogen, or shown on it Financial Statements
or acquired after the date thereof (including its Intellectual Property), free
and clear of any Security Interest or Liabilities, other than the Confirmatory
License regarding the Patents.
(h) Financial Statements. Schedule 3(h) hereto contains the following
financial statements of Photogen and Newco, as applicable (collectively the
"Financial Statements"): (i) their balance sheet, statement of operations and
retained earnings, as of and for the fiscal year ended December 31, 1996; and
(ii) their balance sheet and statement of operations and retained earnings as of
and for the three months ended March 31, 1997 (the balance sheet of which is
sometimes referred to as "March 31, 1997 Balance Sheet"). The Financial
Statements (including the notes thereto) have been prepared in accordance with
GAAP, present fairly the financial condition of Photogen and Newco as of such
dates and the results of their operations for such periods, are correct and
complete, and are consistent with their books and records (which books and
records may be correct and complete); provided, however, that the Financial
Statements for the three months ended March 31, 1997 are subject to normal
year-end adjustments (which will not be material individually or in the
aggregate).
(i) Events Subsequent to March 31, 1997. Since March 31, 1997, there has
not been any material adverse change in the Assets, business, financial
condition, operations, results of operations, or future prospects of Photogen or
Newco and there is no Basis for such a change. Without limiting the generality
of the foregoing, since that date neither Photogen nor Newco has: (i) sold,
leased, transferred, or assigned any of the Assets (except as provided in
Section 2(a)(ii) above); (ii) entered into any Contract (or series of related
Contracts) involving individually or in the aggregate more than $1,000, or which
has (or have) a term longer than three months; (iii) been subject to any
acceleration, termination, modification or cancellation of any Contract (or
series of related Contracts) to which either is a party or by which either is
bound; (iv) imposed any Security Interest upon any of its Assets; (v) made any
capital expenditures, capital investment in, any loan to, or any acquisition of
the securities or assets of, any other Person (or series of related capital
expenditures, capital investments, loans, and acquisitions) involving more than
$1,000 in the aggregate; (vi) issued any note, bond, or other debt security or
created, incurred, assumed, or guaranteed any indebtedness for borrowed money or
capitalized lease obligation; (vii) delayed or postponed the payment of accounts
payable or other Liabilities; (ix) granted any license or sublicense of any
rights under or with respect to any Intellectual Property or otherwise; (x)
issued, sold, or otherwise disposed of any Membership Interests in the case of
Photogen or any Common Stock in the case of Newco or granted any options,
warrants, or other rights to purchase or obtain (including upon conversion,
exchange, or exercise) any such Membership Interests or Common Stock, as
applicable; (ix) declared, set aside, or paid any dividend or made any
distribution with respect to its Membership Interests or Common Stock (whether
in cash or in kind) or redeemed, purchased, or otherwise acquired any of
Membership Interests or Common Stock; (xi) experienced any damage, destruction,
or loss (whether or not covered by insurance) to its Assets; (xii) made any loan
to, or entered into any other transaction with, any of its Affiliates or their
respective managers, directors, officers, or employees; (xiii) entered into or
modified any Contract for employment; granted any increase in the base
compensation of any of its managers, directors, officers, or employees; adopted,
amended, modified, or terminated any bonus, profit-sharing, incentive,
severance, or other plan or Contract for the benefit of any of its directors,
officers, or employees (or taken any such action with respect to any other
Employee Benefit Plan); or made any other change in employment terms for any of
its directors, officers, or employees; (xiv) experienced or engaged in any other
material occurrence, event, incident, action, failure to act, or transaction; or
(xv) committed to any of the foregoing.
(j) Undisclosed Liabilities. Neither Photogen nor Newco has any Liability
(and there is no Basis for any present or future Liability), except for (i)
Liabilities set forth on the face of the March 31, 1997 Balance Sheet (rather
than in any notes thereto) and (ii) Liabilities which have arisen after March
31, 1997, and then only in the Ordinary Course of Business (none of which
results from, arises out of, relates to, is in the nature of, or was caused by
any breach of contract, breach of warranty, tort, infringement, or violation of
law) and which have been disclosed on Sellers' Disclosure Schedule.
(k) Legal Compliance. Photogen and Newco have each complied with all
applicable laws (including rules, regulations, codes, plans, injunctions,
judgments, orders, decrees, rulings, and charges thereunder) of federal, state,
local, and foreign governments (and all agencies thereof), and there is no Basis
for any action, suit,
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proceeding, hearing, investigation, charge, complaint, claim, demand, or
notice against it alleging any failure so to comply. Photogen and Newco have
each filed in a timely manner all reports, documents and other materials it
was required to file (and the information contained therein was correct and
complete) under all applicable laws.
(l) Tax Matters. Photogen and Newco have each timely and properly filed
all Tax Returns that it was required to file. All such Tax Returns were correct
and complete in all respects. All Taxes owed by Photogen or Newco (whether or
not shown on any Tax Return) have been paid. Neither Photogen nor Newco is
currently the beneficiary of any extension of time within which to file any Tax
Return. No claim has ever been made by an authority in a jurisdiction where
Photogen or Newco does not file Tax Returns that it is or may be subject to
taxation by that jurisdiction. Photogen and Newco have each properly withheld
and paid all Taxes required to have been withheld and paid in connection with
amounts paid or owing to any employee, independent contractor, creditor,
stockholder, or other third party. The unpaid Taxes of Photogen or Newco (i)
did not, as of March 31, 1997, exceed the reserve for Tax Liability (rather than
any reserve for deferred Taxes established to reflect timing differences between
book and Tax income) set forth on the face of its March 31, 1997 Balance Sheet
(rather than in any notes thereto) and (ii) will not exceed that reserve as
adjusted for the passage of time through the Closing Date. All transfer,
documentary, sales, use, stamp, registration and other such Taxes and fees
(including any penalties and interest), if any, incurred in connection with the
transactions contemplated under this Agreement shall be paid by Sellers when
due, and Sellers will, at their own expense, file all necessary Tax Returns and
other documentation with respect to all such transfer, documentary, sales, use,
stamp, registration and other Taxes and fees and any final returns of Photogen
after its Liquidation and dissolution as contemplated hereunder.
(m) Leased Property. Neither Photogen nor Newco owns any real property.
Schedule 3(m) lists, describes briefly and contains complete and correct copies
of all leases of real property leased to or used by Photogen or Newco. With
respect to each such property: (i) the lease is legal, valid, binding,
enforceable, and in full force and effect and no party to the lease is in breach
or default, and no event has occurred which, with notice or lapse of time, would
constitute a breach or default or permit termination, modification, or
acceleration thereunder; (ii) the lease will continue to be legal, valid,
binding, enforceable, and in full force and effect on identical terms after the
Closing; (iii) there are no disputes, oral agreements, or forbearance programs
in effect as to the lease or use and no party to the lease has repudiated any
provision thereof; (iv) neither Photogen nor Newco has assigned, transferred,
conveyed, mortgaged, deeded in trust, or encumbered any interest in the
leasehold; (v) all such facilities and their uses have received all approvals of
governmental authorities (including licenses and permits) required in connection
with the proper operation thereof and have been operated and maintained in
accordance with applicable laws, rules, and regulations; and (vi) all such
facilities are supplied with utilities and other services necessary for the
proper operation of said facilities.
(n) Intellectual Property.
(i) Schedule 3(n) hereto: identifies each and every item of
Intellectual Property Photogen or Newco owns or claims to own; identifies each
license, sublicense, assignment, covenants not to ▇▇▇, releases, agreement, or
other permission which Photogen or Newco has granted to any third party with
respect to any of its Intellectual Property (together with any exceptions); and
contains true and complete copies of documents (including all correspondence,
filings and Contracts) evidencing ownership and prosecution, if applicable, of
each such item. With respect to each item of Intellectual Property so
identified:
(1) Except as otherwise specifically disclosed in Schedule 3(n),
Photogen possesses on the date of this Agreement and Newco will possess prior to
and at the Closing the entire right, title, and interest in and to the item,
free and clear of any Security Interest, license, sublicense, assignment (except
for the Confirmatory License with respect to the Patents), claims or rights of
any other Person with respect to the use or ownership thereof or any other
restriction claimed by any other Person;
(2) The Sellers, Photogen and Newco have each taken all
necessary and desirable actions to obtain, maintain, prosecute and protect such
ownership of each item of Intellectual Property;
(3) The item is not subject to any outstanding injunction,
judgment, order, decree, ruling, or charge;
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(4) No action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand is pending or threatened which challenges the
legality, validity, enforceability or ownership of any such item or otherwise;
and
(5) Neither the Sellers, Photogen nor Newco has agreed to
indemnify any Person for or against any interference, infringement,
misappropriation, or other conflict with respect to the item.
(ii) Schedule 3(n) identifies each item of Intellectual Property that
any third party owns and that Photogen or Newco uses pursuant to license,
sublicense, agreement, or permission, and contains complete and correct copies
of the foregoing. With respect to each item of Intellectual Property so
identified:
(1) The license, sublicense, agreement, or permission covering
the item is legal, valid, binding, enforceable, and in full force and effect;
and no party to the license, sublicense, agreement, or permission has repudiated
any provision thereof;
(2) The license, sublicense, agreement, or permission will
continue to be legal, valid, binding, enforceable, and in full force and effect
on identical terms after the Closing;
(3) No party to the license, sublicense, agreement, or
permission is in breach or default thereof, and no event has occurred which with
notice or lapse of time would constitute a breach or default or permit
termination, modification, or acceleration thereunder, nor has any party
repudiated any provision thereof;
(4) With respect to each sublicense, the representations and
warranties set forth in subsections (1) through (3) above are true and correct
with respect to the underlying license;
(5) The underlying item of Intellectual Property is not subject
to any outstanding injunction, judgment, order, decree, ruling, or charge;
(6) No action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand is pending or threatened which challenges the
legality, validity, or enforceability of the underlying item of Intellectual
Property; and
(7) Neither Photogen, Newco nor any Seller has granted any
sublicense or similar right with respect to the license, sublicense, agreement,
or permission.
(iii) Neither the Sellers, Photogen nor Newco has interfered with,
infringed upon, misappropriated, or otherwise come into conflict with any
Intellectual Property rights of any Person, and neither the Sellers, Photogen
nor Newco has ever received any charge, complaint, claim, demand, or notice
alleging any such interference, infringement, misappropriation, or violation
(including any claim that any of them must license, refrain from using or
restrict use of any Intellectual Property), and there is no Basis for the
foregoing. No Person has interfered with, infringed upon, misappropriated, or
otherwise come into conflict with any Intellectual Property rights of Photogen
or Newco.
(iv) None of the Sellers, Newco or Photogen has any Knowledge of any
new products, services, inventions, procedures, or methods that third parties
have developed which reasonably could be expected to supersede or make obsolete
the Intellectual Property of Photogen or Newco.
(v) All filings, applications and other materials submitted to any of
the following persons by or on behalf of the Sellers, Photogen, Newco or their
agents with respect to the Patents and the inventions covered thereby do not
contain any untrue statement of fact or omit to state a fact necessary in order
to make the statements and information contained therein, at the time submitted,
not misleading, false or deceptive: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Lockheed ▇▇▇▇▇▇, the
Department of Energy, Oak Ridge National Laboratory, Oak Ridge Associated
Universities, MTFI, the U.S. Patent and Trademark Office or any other Person.
(vi) Sellers, Photogen and Newco have complied with, and will continue
to comply with, the duty of good faith and fair dealing with the U.S. Patent and
Trademark Office, including the duty to disclose and submit to the U.S. Patent
and Trademark Office information which is material to the patentability of the
patent applications in accordance with Title 37, Code of Federal Regulations,
Section 1.56.
-8-
(o) Contracts. Schedule 3(o) contains complete and correct copies of all
Contracts (or group of related Contracts) to which Photogen or Newco is a party
regarding or concerning: (i) the purchase, sale or lease of materials,
commodities, supplies, products, or other personal property, or for the
furnishing or receipt of services; (ii) a partnership or joint venture; (iii)
creating, incurring, assuming, or guaranteeing any indebtedness for borrowed
money, or any capitalized lease obligation, in excess of $1,000 or under which
it has imposed a Security Interest on any of its assets, tangible or intangible;
(iv) confidentiality or noncompetition; (v) any transaction between Photogen,
Newco and any of the Sellers or their Affiliates; (vi) profit sharing, option,
purchase, appreciation, deferred compensation, severance, or any other plan or
arrangement for the benefit of its current or former directors, officers,
employees or Members; (vii) the employment or engagement of any Person on a
full-time, part-time, consulting, or other basis providing annual compensation
in excess of $1,000 or providing severance or other benefits; (viii) the
advancing or lending of any amount of money to anyone; (ix) any matter for which
the consequences of a default or termination could have an adverse effect on the
assets, business, financial condition, operations, results of operations, or
future prospects of Photogen or Newco; (x) in any way relating to Photogen's or
Newco's Intellectual Property; or (xi) any matter, the performance of which
involves consideration in excess of $1,000 or has a term of more than three
months. With respect to each such Contract: (A) the Contract is legal, valid,
binding, enforceable, and in full force and effect; (B) the Contract will
continue to be legal, valid, binding, enforceable, and in full force and effect
on identical terms after the Closing; (C) no party is in breach or default, and
no event has occurred which with notice or lapse of time would constitute a
breach or default, or permit termination, modification, or acceleration, under
the Contract; and (D) no party has repudiated any provision of the Contract.
Schedule 3(o) also lists, contains a summary and a complete copy of all
proposals to or from Photogen or Newco and all proposed contracts.
(p) Insurance. Neither Newco nor Photogen carries any insurance at this
time. After Closing, Newco will obtain appropriate insurance coverage for
property, casualty, liability, directors and officers, errors and omissions and
workers' compensation.
(q) Litigation. Neither any Seller, Newco nor Photogen is (i) subject to
any outstanding injunction, judgment, order, decree, ruling, or charge, or (ii)
a party, or threatened to be made a party to any action, suit, proceeding,
hearing, or investigation of, in, or before any court or quasi-judicial or
administrative agency of any federal, state, local, or foreign jurisdiction or
before any arbitrator and there is no Basis for any of the foregoing. To the
extent the Sellers' Disclosure Schedule identifies any litigation or similar
matters, none of the actions, suits, proceedings, hearings, and investigations
set forth in the Sellers' Disclosure Schedule could result in any material
adverse change to the Assets, business, financial condition, operations, results
of operations, or future prospects of Photogen or Newco.
(r) Products and Services. Neither Newco nor Photogen has preformed any
services for or sold or leased products to any third party. Neither Newco nor
Photogen holds any inventory or other goods for resale to third parties.
Neither Newco nor Photogen has any Liability (and there is no Basis for any
Liability) arising out of any injury to individuals or property as a result of
any action or omission of Newco or Photogen.
(s) Employee Benefits. Neither Newco nor Photogen maintains any Employee
Benefit Plan.
(t) Environment, Health, and Safety. Newco and Photogen and their
predecessors and Affiliates have each complied with all Environmental, Health,
and Safety Laws, and no action, suit, proceeding, hearing, investigation,
charge, complaint, claim, demand, or notice has been filed or commenced against
any of them alleging any failure so to comply. There is no Basis for any
Liability arising out of or relating to any Environmental, Health and Safety
Laws.
(u) Certain Business Relationships. None of the Sellers or their
Affiliates has been involved in any business arrangement or relationship with
Photogen or Newco and none of the Sellers or their Affiliates owns any asset,
tangible or intangible, which is used in the business of Photogen or Newco.
(v) Disclosure Materials. The written materials provided to MTFI by
Sellers or their agents or representatives set forth in Schedule 3(v), the
representations and warranties in this Section 3 and the Photogen Disclosure
Schedule do not contain any untrue statement of fact or omit to state any fact
necessary in order to make the statements and information contained therein, or
in this Agreement, not misleading. The Sellers' Disclosure Schedule contains
all material information regarding the Assets, including the Intellectual
Property of Photogen and Newco.
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4. Representations and Warranties of MTFI and Merging Corp. Each of MTFI
and Merging Corp. represents and warrants to each Seller that the statements
contained in this Section 4 are true and complete as of the date of this
Agreement and will be true and complete as of the Closing (as though made at and
as of the Closing) except as set forth in Schedule 4 attached hereto (the "MTFI
Disclosure Schedule").
(a) Authorization of Transaction. MTFI and Merging Corp. each has full
power and authority to execute and deliver this Agreement and all other
documents and instruments contemplated hereby to be executed and delivered by it
and to perform its respective obligations hereunder and thereunder. This
Agreement and such other documents and instruments constitute the valid and
legally binding obligation of each of them, enforceable in accordance with their
terms and conditions.
(b) Organization, Qualification, and Corporate Power. MTFI and Merging
Corp. are each a corporation and each is duly organized, validly existing, and
in good standing under the laws of the State of Nevada and the State of
Tennessee, respectively. MTFI and Merging Corp. each is duly authorized to
conduct business in and is in good standing under the laws of Nevada and
Tennessee, respectively. Schedule 4(b) contains correct and complete copies of
the organizational documents of MTFI and Merging Corp. The minute books
(containing all of the records of meetings and all actions taken by written
consent of the directors or stockholders, and all committees of the board, as
applicable) of MTFI and Merging Corp. are true and complete. Neither Photogen
nor Newco is in default under or in violation of any provision of its
organizational documents.
(c) Capitalization. The authorized, issued and outstanding shares of MTFI
Common Stock and Merging Corp. Common Stock are set forth in Schedule 4(c)
hereto and there are no other shares of MTFI or Merging Corp. capital stock
authorized, issued or outstanding. All of the issued and outstanding shares of
MTFI Common Stock have been duly authorized, are validly issued, fully paid, and
nonassessable, and the MTFI Common Stock to be issued to the Sellers after the
Closing will be duly authorized, validly issued, fully paid and non-assessable.
There are no authorized or outstanding options, warrants, purchase rights,
subscription rights, conversion rights, exchange rights, or other contracts or
commitments that could require MTFI or Merging Corp. to issue, sell, or
otherwise cause to become outstanding any of the capital stock of MTFI or
Merging Corp., as applicable. There are no authorized or outstanding stock
appreciation, phantom stock, profit participation, or similar rights; or to its
knowledge, voting trusts, or proxies, or other agreements or understandings with
respect to MTFI or Merging Corp., as applicable other than as set forth in this
Agreement.
(d) Noncontravention. Neither the execution and delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any license, permit or
authorization of any government, governmental agency, or court to which MTFI or
Merging Corp. is subject or any provision of the charter or bylaws of MTFI or
Merging Corp., as applicable, or (ii) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any Person
the right to accelerate, terminate, modify, or cancel, or require any notice to
or consent by any person under any Contract to which MTFI or Merging Corp. is a
party or by which MTFI or Merging Corp. is bound or to which any of their assets
is subject. MTFI and Merging Corp. are not required to give any notice to, make
any filing with, or obtain any authorization, consent, or approval of any Person
(except for customary corporate and/or securities laws filings, including MTFI's
Form 8-K regarding the transactions contemplated by this Agreement) in order for
the parties to consummate the transactions contemplated by this Agreement.
(e) Brokers' Fees. Neither MTFI nor Merging Corp. has any Liability to
pay any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement which is or could become a Liability
of MTFI or Newco other than as set forth in Section 10(m).
(f) Financial Statements. Schedule 4(f) hereto contains the following
financial statements of MTFI: (i) its balance sheet, statement of operations
and retained earnings, as of and for the fiscal year ended December 31, 1996 the
balance sheet of which is sometimes referred to as "MTFI's December 31, 1996
Balance Sheet"). MTFI's financial statements (including the notes thereto) have
been prepared in accordance with GAAP, present fairly the financial condition of
MTFI as of such dates and the results of their operations for such periods, are
correct and complete, and are consistent with its books and records (which books
and records may be correct and complete); provided, however, that MTFI's
financial statements for the three months ended March 31, 1997 are subject to
normal year-end adjustments (which will not be material individually or in the
aggregate).
-10-
(g) Events Subsequent to December 31, 1996. Since December 31, 1996,
there has not been any material adverse change in the assets, business,
financial condition, operations, results of operations, or future prospects of
MTFI and there is no Basis for such a change. Without limiting the generality
of the foregoing, since that date MTFI has not: (i) sold, leased, transferred,
or assigned any of its assets; (ii) entered into any Contract (or series of
related Contracts) involving individually or in the aggregate more than $1,000,
or which has (or have) a term longer than three months; (iii) been subject to
any acceleration, termination, modification or cancellation of any Contract (or
series of related Contracts) to which it is a party or by which it is bound;
(iv) imposed any Security Interest upon any of its assets; (v) made any capital
expenditures, capital investment in, any loan to, or any acquisition of the
securities or assets of, any other Person (or series of related capital
expenditures, capital investments, loans, and acquisitions) involving more than
$1,000 in the aggregate; (vi) issued any note, bond, or other debt security or
created, incurred, assumed, or guaranteed any indebtedness for borrowed money or
capitalized lease obligation; (vii) delayed or postponed the payment of accounts
payable or other Liabilities; (ix) granted any license or sublicense of any
rights under or with respect to any Intellectual Property; (x) issued, sold, or
otherwise disposed of any MTFI Common Stock granted any options, warrants, or
other rights to purchase or obtain (including upon conversion, exchange, or
exercise) any such Common Stock; (ix) declared, set aside, or paid any dividend
or made any distribution with respect to its Common Stock (whether in cash or in
kind) or redeemed, purchased, or otherwise acquired any Common Stock; (xi)
experienced any damage, destruction, or loss (whether or not covered by
insurance) to its assets; (xii) made any loan to, or entered into any other
transaction with, any of its Affiliates or their respective managers, directors,
officers, or employees; (xiii) entered into or modified any Contract for
employment; granted any increase in the base compensation of any of its
managers, directors, officers, or employees; adopted, amended, modified, or
terminated any bonus, profit-sharing, incentive, severance, or other plan or
Contract for the benefit of any of its directors, officers, or employees (or
taken any such action with respect to any other Employee Benefit Plan); or made
any other change in employment terms for any of its directors, officers, or
employees; (xiv) experienced or engaged in any other material occurrence, event,
incident, action, failure to act, or transaction; or (xv) committed to any of
the foregoing. The foregoing representation and warranty will be true and
complete regarding Merging Corp. from the date of its incorporation until the
Closing, except for the transactions contemplated hereunder.
(h) Undisclosed Liabilities. Neither MTFI nor Merging Corp. has any
Liability (and there is no Basis for any present or future Liability), except
for (i) Liabilities set forth on the face of the MTFI December 31, 1996 Balance
Sheet (rather than in any notes thereto) and (ii) Liabilities which have arisen
after December 31, 1996, and then only in the Ordinary Course of Business (none
of which results from, arises out of, relates to, is in the nature of, or was
caused by any breach of contract, breach of warranty, tort, infringement, or
violation of law) and which have been disclosed in writing to Sellers.
(i) Legal Compliance. MTFI and Merging Corp. have each complied with all
applicable laws (including rules, regulations, codes, plans, injunctions,
judgments, orders, decrees, rulings, and charges thereunder) of federal, state,
local, and foreign governments (and all agencies thereof), and there is no Basis
for any action, suit, proceeding, hearing, investigation, charge, complaint,
claim, demand, or notice against it alleging any failure so to comply. MTFI and
Merging Corp. have each filed in a timely manner all reports, documents and
other materials it was required to file (and the information contained therein
was correct and complete) under all applicable laws.
(j) Tax Matters. MTFI has timely and properly filed all Tax Returns that
it was required to file. All such Tax Returns were correct and complete in all
respects. All Taxes owed by MTFI (whether or not shown on any Tax Return) have
been paid. MTFI is not currently the beneficiary of any extension of time
within which to file any Tax Return. No claim has ever been made by an
authority in a jurisdiction where MTFI does not file Tax Returns that it is or
may be subject to taxation by that jurisdiction. MTFI has properly withheld and
paid all Taxes required to have been withheld and paid in connection with
amounts paid or owing to any employee, independent contractor, creditor,
stockholder, or other third party. The unpaid Taxes of MTFI (i) did not, as of
December 31, 1996, exceed the reserve for Tax Liability (rather than any reserve
for deferred Taxes established to reflect timing differences between book and
Tax income) set forth on the face of MTFI's December 31, 1996 Balance Sheet
(rather than in any notes thereto) and (ii) will not exceed that reserve as
adjusted for the passage of time through the Closing date.
(k) Disclosure Materials. The written materials provided to Sellers by
MTFI or its agents or representatives set forth or referred to in Schedule 4(k)
which consists of a notebook containing SEC filings on Forms 8-K, 10-QSB and
10-KSB made by MTFI (or its predecessor) since March 31, 1993, the
representations and warranties
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in this Section 4 and the MTFI Disclosure Schedule do not contain any untrue
statement of fact or omit to state any fact necessary in order to make the
statements and information contained therein, or in this Agreement, not
misleading.
5. Disclosures and Exceptions to Representations and Warranties. The
Sellers' Disclosure Schedule and the MTFI Disclosure Schedule are collectively
referred to as the "Disclosure Schedules." Nothing in any Disclosure Schedule
shall be deemed adequate to disclose an exception to a representation or
warranty unless such Disclosure Schedule identifies the exception with
reasonable particularity and describes the relevant facts in reasonable detail.
Without limiting the generality of the foregoing, the mere listing (or inclusion
of a copy) of a document or other item shall not be deemed adequate to disclose
an exception to a representation or warranty made herein (unless the
representation or warranty has to do with the existence of the document or other
item itself). Each Disclosure Schedule will be arranged in paragraphs
corresponding to the lettered and numbered paragraphs contained in the section
of this Agreement to which such Disclosure Schedule relates.
6. Pre-Closing Covenants.
(a) General. From the execution of this Agreement until the Closing each
of the parties hereto will use its or his respective best efforts to take all
actions and to do all things necessary in order to consummate and make effective
the transactions contemplated by this Agreement (including satisfaction, but not
waiver, of the closing conditions set forth in Section 7 below).
(b) Notices and Consents. From the execution of this Agreement until the
Closing the Sellers (and if appropriate Photogen and Newco) will give any
notices to third parties and obtain any third party consents in connection with
the matters referred to in Section 3(e), as applicable above, and the related
paragraph of the Sellers' Disclosure Schedule. Each of the parties will give
reasonable cooperation to the other parties in connection with such notices and
consents.
(c) Operation of Business. From the execution of this Agreement until the
Closing, neither Photogen, MTFI, Newco nor Merging Corp. will engage in any
practice, take any action, or enter into any transaction outside the Ordinary
Course of Business (other than the transactions contemplated hereunder).
Without limiting the generality of the foregoing, during that period:
(i) None of the parties will engage in any action or practice, or
enter into any transaction that would cause any of its or his respective
representations and warranties to not be true and complete at the Closing;
(ii) Photogen and Newco will keep its organization substantially
intact, including its present operations, physical facilities, working
conditions, and relationships with lessors, licensees, licensors, suppliers, and
employees;
(iii) Photogen, Newco, MTFI and Merging Corp. will permit
representatives of the parties to have full access at all reasonable times, and
in a manner so as not to interfere with its normal business operations, to all
of their premises, Assets, personnel, books, records (including Tax and
financial records), Contracts, and documents.
(d) Notice of Developments. From the execution of this Agreement until
the Closing each party hereto will give prompt written notice to the other
parties of any development causing a breach of any of the representations and
warranties of such party, such notice to be given in the manner specified in
Section 10(i) below. No disclosure by any party pursuant to this Section 6(d),
however, shall be deemed to amend or supplement any of the Disclosure Schedules
or to prevent or cure any misrepresentation, breach of warranty, or breach of
covenant.
(e) Exclusivity. After the date of this Agreement through the Closing,
Photogen, Newco and each of the Sellers agrees not to directly or indirectly (i)
solicit any inquiries or proposals for the acquisition by any third party of the
Photogen Membership Interests or Newco Common Stock, any of the Assets of
Photogen or Newco, any merger or business combination involving Photogen or
Newco, or any interest in, or license to own or right to commercialize any of
their Intellectual Property (including the Patents) (collectively, a "Third
Party Transaction"), or (ii) furnish information to, or engage in negotiations
or discussions relating to a possible Third Party Transaction. Photogen, Newco
(and the Sellers) shall promptly advise MTFI in writing of any inquiry or
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proposal for a possible Third Party Transaction. Any existing or pending
discussions or negotiations for or related to a possible Third Party Transaction
shall be terminated immediately.
(f) Other Agreements. At or before the Closing Date:
(i) MTFI and Newco, as applicable, will amend its Articles of
Incorporation, and By-laws, as necessary to (A) expand the number of its
directors to five; (B) appoint an Executive Committee of three Board members
consisting of ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇; (C) provide for directors' and
Executive Committee unanimous voting requirements regarding extraordinary
transactions and matters as set forth in Schedule 6(f)(i); and (D) effect the
recapitalization set forth on Exhibit A.
(ii) MTFI will cause its Amended and Restated Certificate of
Incorporation, substantially in the form of Exhibit C to be duly filed with the
Nevada Secretary of State.
(iii) MTFI's Board of Directors (the "Board") shall: (A) duly
call and give proper notice of a special meeting of MTFI's stockholders (the
"Special Meeting") which shall be held as soon as practicable following the
execution of this Agreement for the purpose of considering and taking action
upon this Agreement and the transactions hereunder; (B) prepare and disseminate
to its stockholders an information statement relating to the Recapitalization
and the Merger and this Agreement (the "Information Statement"); and (C) subject
to the fiduciary obligations of the Board under applicable law as advised by
counsel, include in the Information Statement the recommendation of the Board
that holders of MTFI Common Stock vote in favor of the approval of the Merger
and the transactions contemplated hereby and the adoption of this Agreement.
(iv) Each of the Sellers will execute and deliver warrants to ▇▇.
▇▇▇▇▇▇ ▇▇▇▇▇ and Aurora Capital Corporation, substantially in the form of
Exhibit D.
(v) Each of the Sellers will execute and deliver the Non-Competition
and Non-Disclosure Agreements substantially in the form of Exhibit E and the
Employment Agreements substantially in the form of Exhibit F hereto.
(vi) Each of the Sellers and the principal shareholders of MTFI named
in Exhibit G will execute and deliver the Voting Agreement substantially in the
form of Exhibit G hereto.
(vii) Each of the Sellers will, subject to the Closing, execute
and deliver their Releases substantially in the form of Exhibit H hereto.
(viii) Upon execution of this Agreement, each of the Sellers and
Photogen shall execute and deliver his and its consent and agreement to
terminate Photogen's Operating Agreement in the form set forth in Exhibit I
hereto.
7. Closing Conditions.
(a) Conditions to MTFI's and Merging Corp.'s Obligation to Close. The
obligations of MTFI and Merging Corp. to consummate the transactions to be
performed by each of them in connection with the Closing is subject to
satisfaction of the following conditions (any of which may be waived by MTFI in
writing except Section 7(a)(viii) which can only be waived by ▇▇▇▇▇▇▇▇▇):
(i) The representations and warranties of each of the Sellers,
Photogen and Newco set forth in Section 3 above shall be true and correct in all
material respects at and as of the Closing Date;
(ii) Each of the Sellers, Newco and Photogen shall have performed and
complied with all of their respective covenants and agreements hereunder to be
performed at or prior to the Closing;
(iii) Each of the Sellers, Newco and Photogen shall have procured
all of the third party consents and authorizations, and consents and approvals
of governments or governmental entities specified in Section 3(e) above and the
related paragraph of the Sellers' Disclosure Schedule and MTFI shall not have
received any notice of an adverse position by any Person regarding Newco's
ownership of the Patents as contemplated in this Agreement in response to MTFI's
inquiry letters in the form of Exhibit J to be sent after execution of this
Agreement;
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(iv) The stockholders of MTFI shall have approved the execution and
delivery of this Agreement, the Recapitalization and Merger and all transactions
contemplated under this Agreement;
(v) No action, suit, or proceeding shall be pending or threatened
before any court or quasi-judicial or administrative agency of any federal,
state, local, or foreign jurisdiction or before any arbitrator wherein an
unfavorable injunction, judgment, order, decree, ruling, or charge would (A)
prevent consummation of any of the transactions contemplated by this Agreement,
(B) cause any of the transactions contemplated by this Agreement to be rescinded
following consummation, (C) affect adversely the right of MTFI to own Newco
after the Effective Time, or (D) affect adversely the right of Newco to own its
Assets, including the Patents, and to operate its businesses as contemplated in
this Agreement (and no such injunction, judgment, order, decree, ruling, or
charge shall be in effect);
(vi) Each of the Sellers, Photogen and Newco shall have delivered to
MTFI a certificate to the effect that each of the conditions specified above in
Sections 7(a)(i) through 7(a)(v) is satisfied in all respects;
(vii) The relevant parties (other than MTFI, its principal
shareholders and Merging Corp.) shall have entered into the agreements and
performed the actions as set forth in Section 6(f) above;
(viii) MTFI shall have obtained Officers' and Directors' insurance
in amount and coverage and by an insurer to the reasonable satisfaction of
▇▇▇▇▇▇▇▇▇; and
(ix) All actions to be taken by the Sellers, Photogen and Newco
hereunder in connection with consummation of the transactions contemplated
hereby and thereby and all certificates, opinions, instruments, and other
documents required to effect the transactions contemplated hereby and thereby
shall have been satisfactory in form and substance to MTFI and its counsel.
(b) Conditions to Sellers' Obligation to Close. The obligation of the
Sellers, Photogen and Newco to consummate the transactions to be performed by
them in connection with the Closing is subject to satisfaction of the following
conditions (any of which may be waived by ▇▇▇▇▇▇ acting on behalf of the Sellers
in writing):
(i) The representations and warranties of MTFI and Merging Corp. set
forth in Section 4 above shall be true and correct in all material respects at
and as of the Closing Date;
(ii) MTFI, Merging Corp., ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ shall have
performed and complied with their respective covenants and agreements hereunder
to be performed by them at or prior to the Closing;
(iii) MTFI and Merging Corp. shall have procured all of the third
party consents and authorizations, and consents and approvals of governments or
governmental entities specified in Section 4(d) and the related paragraph of the
MTFI Disclosure Schedule.
(iv) No action, suit, or proceeding shall be pending or threatened
before any court or quasi-judicial or administrative agency of any federal,
state, local, or foreign jurisdiction or before any arbitrator wherein an
unfavorable injunction, judgment, order, decree, ruling, or charge would (A)
prevent consummation of any of the transactions contemplated by this Agreement,
(B) cause any of the transactions contemplated by this Agreement to be rescinded
following consummation, or (C) affect adversely the right of the Sellers to own
the MTFI Common Stock contemplated under this Agreement (and no such injunction,
judgment, order, decree, ruling, or charge shall be in effect);
(v) MTFI shall have delivered to the Sellers a certificate to the
effect that each of the conditions specified above in Sections 7(b)(i) through
7(b)(iv) is satisfied in all respects;
(vi) The relevant parties (other than the Sellers, Photogen and Newco)
shall have entered into the agreements and performed the actions as set forth in
Section 6(f) above;
(vii) MTFI shall deliver its Form 10-QSB to the Sellers which
shall contain its March 31, 1997 financial statements as required by such Form.
The financial statements of MTFI at and for the period ended March 31, 1997
shall not be materially different than MTFI's Financial Statements of
December 31, 1996 in
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Schedule 4(f), except for changes in the ordinary course of its activities
and changes and accrued liabilities resulting from the transactions and
activities contemplated under this Agreement; and
(viii) All actions to be taken by MTFI and Subsidiary in connection
with consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the transactions
contemplated hereby shall have been reasonably satisfactory in form and
substance to Sellers and their counsel.
8. Remedies for Breaches of This Agreement.
(a) Survival of Representations, Warranties and Covenants. All of the
representations and warranties of the parties contained in this Agreement
shall survive any investigation and the Closing hereunder and shall continue
in full force and effect thereafter (subject to any applicable statutes of
limitations). The respective covenants and agreements of the parties to be
performed after the Closing shall survive in accordance with their terms and
until performed.
(b) Indemnification.
(i) Indemnification by Sellers. Sellers, jointly and severally,
shall indemnify, defend and hold MTFI and Merging Corp. and their respective
Affiliates (including the Surviving Corporation after the Merger) and each of
their respective officers, directors, partners, employees and agents, harmless
from and against any Adverse Consequences suffered or incurred by any of them
relating to or arising out of (A) any actual or alleged breach of or inaccuracy
in any representation or warranty of the Sellers or Photogen in this Agreement
or in any Schedule, certificate, instrument or other document delivered by or on
behalf of the Sellers, Photogen or Newco pursuant to this Agreement; or (B) any
actual or alleged breach of any covenant or agreement of the Sellers, Photogen
or Newco in this Agreement or in any Schedule, certificate, instrument or other
document delivered by or on behalf of the Sellers, Photogen or Newco pursuant to
this Agreement. Prior to the Effective Time, Photogen shall be obligated,
jointly and severally with the Sellers, for the Sellers' obligations under this
paragraph.
(ii) Indemnification by MTFI and Merging Corp. MTFI and Merging
Corp., jointly and severally, shall indemnify, defend and hold each of the
Sellers and their respective Affiliates, and each of their respective officers,
directors, members, employees and agents harmless from and against any Adverse
Consequences suffered or incurred by any of them relating to or arising out of
(A) any actual or alleged breach of or inaccuracy in any representation or
warranty of MTFI or Merging Corp. in this Agreement or in any Schedule,
certificate, instrument or other document delivered by or on behalf of MTFI or
Merging Corp. pursuant to this Agreement; or (B) any actual or alleged breach of
any covenant or agreement of MTFI or Merging Corp. in this Agreement or in any
Schedule, certificate, instrument or other document delivered by or on behalf of
MTFI or Merging Corp. pursuant to this Agreement.
(c) Matters Involving Third Parties.
(i) If any Person not a party to this Agreement shall notify any
party hereto (the "Indemnified Party") with respect to any matter (a "Third
Party Claim") which may give rise to a claim for indemnification against any
other party hereto (the "Indemnifying Party") under Section 8(b), then the
Indemnified Party shall promptly notify each Indemnifying Party thereof in
writing; provided, however, that no delay on the part of the Indemnified Party
in notifying any indemnifying party shall relieve the Indemnifying Party from
any obligation hereunder unless (and then solely to the extent) the Indemnifying
Party thereby is prejudiced.
(ii) Any Indemnifying Party will have the right to defend the
Indemnified Party against the Third Party Claim with counsel of the Indemnifying
Party's choice reasonably satisfactory to the Indemnified Party, provided (A)
the Indemnifying Party notifies the Indemnified Party in writing within 15 days
after the Indemnified Party has given notice of the Third Party Claim that the
Indemnifying Party will indemnify the Indemnified Party from and against the
entirety of any Adverse Consequences the Indemnified Party may incur or suffer
resulting from, arising out of, relating to, in the nature of, or caused by the
Third Party Claim, (B) the Indemnifying Party provides the Indemnified Party
with evidence reasonably acceptable to the Indemnified Party that the
Indemnifying Party will have the financial resources to defend against the Third
Party Claim and fulfill its indemnification obligations hereunder, (C) the Third
Party Claim involves only money damages and does not seek an injunction or other
equitable relief, (D) settlement of, or an adverse judgment with respect to, the
Third Party Claim is not,
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in the good faith judgment of the Indemnified Party, likely to establish a
precedential custom or practice materially adverse to the continuing business
interests of the Indemnified Party, and (E) the Indemnifying Party conducts
the defense of the Third Party Claim actively and diligently.
(iii) So long as the Indemnifying Party is conducting the defense
of the Third Party Claim in accordance with Section 8(c)(ii) above, (A) the
Indemnified Party may retain separate co-counsel at its sole cost and expense
and participate in the defense of the Third Party Claim, (B) the Indemnified
Party will not consent to the entry of any judgment or enter into any settlement
with respect to the Third Party Claim without the prior written consent of the
Indemnifying Party (not to be withheld unreasonably), and (C) the Indemnifying
Party will not consent to the entry of any judgment or enter into any settlement
with respect to the Third Party Claim without the prior written consent of the
Indemnified Party (not to be withheld unreasonably).
(iv) In the event any of the conditions in Section 8(c)(ii) above is
or becomes unsatisfied, however, (A) the Indemnified Party may defend against,
and consent to the entry of any judgment or enter into any settlement with
respect to, the Third Party Claim in any manner it reasonably may deem
appropriate (and the Indemnified Party need not consult with, or obtain any
consent from, any Indemnifying Party in connection therewith), (B) the
Indemnifying Party will reimburse the Indemnified Party promptly and
periodically for the costs of defending against the Third Party Claim (including
reasonable attorneys' fees and expenses), and (C) the Indemnifying Party will
remain responsible for any Adverse Consequences the Indemnified Party may suffer
resulting from, arising out of, relating to, in the nature of, or caused by the
Third Party Claim to the fullest extent provided in this Section 8.
(d) Determination of Adverse Consequences. The parties shall take into
account the time cost of money (using the prime rate in The Wall Street Journal
on the date of the indemnification demand as the discount rate) in determining
Adverse Consequences for purposes of this Section 8.
(e) Other Indemnification Provisions. The foregoing indemnification
provisions are in addition to, and not in derogation of, any statutory,
equitable, or common law remedy or claim for damages any party may have for
breach of representation, warranty, covenant or agreement. Each of the Sellers
hereby agrees not to make any claim for indemnification against Newco by reason
of the fact that he was a member, shareholder, director, officer, employee,
manager, or agent of Newco or Photogen or was serving at the request of any such
entity as a partner, trustee, director, officer, employee, or agent of another
entity (whether such claim is for judgments, damages, penalties, fines, costs,
amounts paid in settlement, losses, expenses, or otherwise and whether such
claim is pursuant to any statute, charter document, bylaw, agreement, or
otherwise) with respect to any action, suit, proceeding, complaint, claim, or
demand brought by MTFI or Merging Corp. against such Seller (whether such
action, suit, proceeding, complaint, claim, or demand is pursuant to this
Agreement, applicable law, or otherwise).
9. Termination.
(a) Termination of Agreement. Certain of the parties may terminate this
Agreement as provided below:
(i) MTFI and ▇▇▇▇▇▇ acting on behalf of the Sellers may cause this
Agreement to be terminated by mutual written consent at any time prior to the
Closing;
(ii) MTFI or ▇▇▇▇▇▇ acting on behalf of the Sellers may terminate this
Agreement by giving written notice to the other parties hereto at any time prior
to the Closing (A) in the event any party (other than the party electing to
terminate) has breached any representation, warranty, or covenant contained in
this Agreement, the terminating party has notified the breaching party of the
breach, and the breach has continued without cure for a period of 30 days after
the notice of breach or (B) if the Closing shall not have occurred on or before
May 31, 1997, by reason of the failure of any condition precedent under Section
7 hereof applicable to the terminating party's obligation to Close (unless the
failure results primarily from the terminating party itself breaching any
representation, warranty, or covenant contained in this Agreement).
(b) Effect of Termination. In the event of termination of this Agreement
in accordance with Section 9(a), this Agreement shall forthwith terminate and
have no further effect, except (i) to the extent such termination results from
the breach by any party hereto of any of its representations, warranties,
covenants or agreements in this Agreement (in which case the breaching party
shall be liable for all damages allowable at law and any relief available at
equity), and (ii) the provisions of Sections 8 and 9 shall survive any
termination of this Agreement.
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10. Miscellaneous.
(a) Further Actions. In case at any time after the Closing any further
action is necessary or desirable to carry out the provisions of this Agreement
and vest in Newco all right, title and interest to all Assets, properties,
rights, privileges, immunities, powers and franchises of Photogen and Newco,
including the Patents, each of the parties will take such further action
(including the execution and delivery of such further instruments and documents)
as any other party reasonably may request, including that each Seller shall
cooperate with Newco by executing any necessary document requiring his signature
and by cooperating in the prosecution of any item of Intellectual Property
listed on Schedule 3(n) for purposes of obtaining Letter Patent regarding such
item and to cooperate and assist in the prosecution of any Interference or
Litigation (including infringement or misappropriation claims) with respect to
which Sellers' cooperation is necessary. The cost and expense of the foregoing
shall be that of the requesting party (unless the requesting party is entitled
to such action hereunder).
(b) Press Releases and Public Announcements. Prior to the Closing, no
party shall issue any press release or make any public announcement relating to
the subject matter of this Agreement without the prior written approval of MTFI
and ▇▇▇▇▇▇ acting on behalf of the Sellers; provided, however, that MTFI will
prepare and file with the Securities and Exchange Commission a Current Report on
Form 8-K regarding this Agreement and the transactions herein and MTFI may make
any public disclosure it believes in good faith is required by applicable law
(in which case MTFI will advise Sellers prior to making the disclosure).
(c) No Third Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any Person other than the parties signatory hereto and
their respective successors and permitted assigns.
(d) Entire Agreement. This Agreement, including the Exhibits and
Schedules referred to herein and the documents delivered at the Closing,
constitutes the entire agreement among the parties with regard to the subject
hereof and thereof and supersedes any prior understandings, agreements,
negotiations or representations by or among any of the parties, written or oral,
with respect to such subject matter. No party hereto shall be bound or liable
to any other party by any agreements, representations, warranties or covenants
previously delivered by any party except as specifically set forth in this
Agreement, the Exhibits, Schedules, and other documents delivered at the
Closing.
(e) Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties named herein and their respective successors and
permitted assigns. No party may assign or delegate this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of MTFI and ▇▇▇▇▇▇ acting on behalf of the Sellers.
(f) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument and shall be binding upon
the party executing the same. Any party may execute a counterpart of this
Agreement or any other Exhibit or other document contemplated to be executed
hereunder by signature transmitted by telecopier or similar device. Documents
so executed shall (when delivered) be binding upon the party executing the same
and all other parties may rely on such documents as though they were originally
executed.
(g) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(h) Form 10 Filing. After the Closing, MTFI will promptly make a Form 10
filing with the Securities and Exchange Commission on behalf of Photogen
Technologies, Inc. with a view to effecting registration of the company under
Section 12(g) of the Securities Exchange Act.
(i) Notices. All notices, requests, demands, claims, and other
communications hereunder shall be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given (i) three
business days after it is sent by registered or certified mail, return receipt
requested, postage prepaid, (ii) one business day after being sent by reputable
overnight courier service providing for receipted delivery, or (iii) upon
receipt if sent by telecopier with a report showing the transmission, in each
case addressed to the intended recipient as set forth below.
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If to any of the Sellers, Photogen or Newco:
▇▇. ▇▇▇▇ ▇▇▇▇▇▇
Photogen L.L.C.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
If to MTFI or Merging Corp.: Copy to:
M T Financial Group, Inc. ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Suite 3600
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Process Agent:
CT Corporation System
▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(j) Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Illinois without giving effect
to any choice or conflict of law provision or rule (whether of the State of
Illinois or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Illinois; provided, however, that
matters relating to the Merger shall be governed by and construed in accordance
with the Corporation Law and matters relating to internal corporate governance
of MTFI shall be governed by and construed in accordance with Nevada General
Corporation Law.
(k) Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by all
the parties thereto and dated after the date hereof. No waiver by any party of
any default, misrepresentation, or breach of warranty or covenant hereunder,
whether intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
(l) Severability. Any term or provision of this Agreement or any
agreement, document or instrument delivered pursuant to this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction. If the final judgment of a court of
competent jurisdiction declares that any term or provision hereof is invalid or
unenforceable, the parties agree that the court making the determination of
invalidity or unenforceability shall have the power to reduce the scope,
duration, or area of the term or provision, to delete specific words or phrases,
or to replace any invalid or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision, and this Agreement
shall be enforceable as so modified after the expiration of the time within
which the judgment may be appealed.
(m) Expenses. In the event the transactions contemplated are not
consummated, The parties will bear their own respective costs and expenses
(including legal fees and expenses) incurred in connection with this Agreement.
If the transactions contemplated are consummated, MTFI shall be responsible for
all of Sellers', Photogen's, Newco's and MTFI's and Merging Corp.'s respective
reasonable costs and expenses (including legal fees) and the broker's fee set
forth in Schedule 3(f).
(n) Construction. Any reference to any federal, state, local, or foreign
statute or law shall be deemed also to refer to all rules and regulations
promulgated thereunder, unless the context requires otherwise. Any reference of
the masculine person shall include the feminine and neuter; and any reference to
the neuter pronoun shall include the masculine and feminine. Any reference to
the plural of any noun shall include the singular and vice-versa. The word
"including" shall mean "including without limitation." The parties intend that
each representation, warranty, and covenant contained herein shall have
independent significance. If any party has
-18-
breached any representation, warranty, or covenant contained herein in any
respect, the fact that there exists another representation, warranty, or
covenant relating to the same subject matter (regardless of the relative
levels of specificity) which the party has not breached shall not detract
from or mitigate the fact that the party is in breach of the first
representation, warranty, or covenant.
(o) Incorporation of Recitals, Exhibits, and Schedules. The Recitals,
Exhibits and Schedules identified in this Agreement are incorporated herein by
reference and made a part hereof.
(p) Specific Performance. Each of the parties acknowledges and agrees
that the other parties would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, each of the parties agrees that
the other parties shall be entitled to seek an injunction or injunctions to
prevent breaches of the provisions of this Agreement and to enforce specifically
this Agreement and the terms and provisions hereof in any action instituted in
any court of the United States or any state thereof having jurisdiction over the
parties and the matter (subject to the provisions in 10(q) below), in addition
to any other remedy to which they may be entitled, at law or in equity.
(q) Submission to Jurisdiction. Each of the parties submits to the
jurisdiction of any state or federal court sitting in Chicago, Illinois, in any
action or proceeding arising out of or relating to this Agreement and agrees
that all claims in respect of the action or proceeding may be heard and
determined in any such court. Each of the parties waives any defense of
inconvenient forum to the maintenance of any action or proceeding so brought and
waives any bond, surety, or other security that might be required of any other
party with respect thereto. Each party appoints CT Corporation System, ▇▇▇ ▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Process Agent") as its agent to
receive on its behalf service of copies of the summons and complaint and any
other process that might be served in the action or proceeding. Any party may
make service on any other party by sending or delivering a copy of the process
(i) to the party to be served at the address and in the manner provided for the
giving of notices in Section 10(i) or (ii) to the party to be served in care of
the Process Agent at the address and in the manner provided for the giving of
notices in Section 10(i) above. Nothing in this Section 10(q), however, shall
affect the right of any party to serve legal process in any other manner
permitted by law or at equity.
(r) Appointment of Representative.
(i) By execution and delivery of this Agreement, each Seller hereby
irrevocably constitutes and appoints ▇▇▇▇▇▇ as his true and lawful agent and
attorney-in-fact (the "Representative"), with full power of substitution to act
in such Seller's name, place and stead in all events in the Representative's
sole and absolute discretion, including, without limitation, the power:
(1) to do or refrain from doing any act or deed on behalf of
such Seller as provided for in this Agreement, as fully and completely as such
Seller could do if personally present; and
(2) to receive all notices on behalf of such Seller in
connection with any claims or matters under this Agreement.
(ii) MTFI and Merging Corp. and any other person may conclusively and
absolutely rely, without inquiry, upon any action of the Representative on
behalf of such Seller in all matters referred to herein. All notices delivered
by MTFI, Merging Corp. or Newco to the Representative (whether pursuant hereto
or otherwise) for the benefit of the Sellers shall constitute notice to such
Seller.
(iii) The appointment of the Representative hereunder shall be
deemed coupled with an interest and shall be irrevocable, shall survive the
death or disability of any Seller, and shall be binding upon the executors,
heirs, legal representatives, successors and assigns of each Seller.
[The remainder of this page is intentionally blank]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
M T Financial Group, Inc.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman
M T Merging Corp.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Pres.
Photogen, Inc.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
Title: President
Photogen, L.L.C.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
Title: President
Sellers:
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Ph.D.
/s/ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, Ph.D.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Ph.D.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, Ph.D.
/s/ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
The undersigned join in the execution of this Agreement for the
purpose of obligating themselves to the recapitalization of the common stock of
MTFI as set forth in Exhibit A to the Agreement.
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, M.D.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇