SCHEDULE 14C
(RULE 14c-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(c) OF THE SECURITIES
EXCHANGE ACT OF 1934

Check the appropriate box:

[ ] Preliminary information statement [ ] Confidential, for use of the Commission only
(as permitted by Rule 14c-5(d)(2))
[X] Definitive information statement

INOTEK TECHNOLOGIES CORP.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)

Payment of Filing Fee (Check the appropriate box):

[ ] No fee required

[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.

1) Title of each class of securities to which transaction applies:

COMMON STOCK, PAR VALUE $0.01 PER SHARE
- --------------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:

- --------------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):

$0.65 PER SHARE AS SET FORTH IN THE AGREEMENT AND PLAN OF MERGER
- --------------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:

$3,155,157.20
- --------------------------------------------------------------------------------
5) Total fee paid:

$631.03
- --------------------------------------------------------------------------------
[X] Fee paid previously with preliminary materials.

- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule And the date of its filing.

1) Amount Previously Paid:

- --------------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:

- --------------------------------------------------------------------------------
3) Filing Party:

- --------------------------------------------------------------------------------
4) Date Filed:

- --------------------------------------------------------------------------------
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INOTEK TECHNOLOGIES CORP.
11212 INDIAN TRAIL
DALLAS, TEXAS 75229

June 18, 2001

Dear Stockholder:

This information statement is being furnished to the holders of common
stock, par value $0.01 per share, of INOTEK Technologies Corp. in connection
with the proposed acquisition of the company by Davis Instruments, LLC. The
acquisition will be effected by the merger of a wholly-owned subsidiary of Davis
with Inotek pursuant to an Agreement and Plan of Merger dated as of May 15,
2001, among Inotek, Davis and the stockholders named therein.

Under the merger agreement, at the effective time of the merger, each
outstanding share of Inotek common stock, other than treasury shares and shares
as to which appraisal rights have been properly exercised, will be converted
into the right to receive $0.65 in cash.

The Board of Directors of Inotek unanimously support the merger. In
addition, Neal E. Young, David L. White and Dennis W. Stone, stockholders of
Inotek holding 72.2% of the outstanding voting stock of Inotek, have consented
in writing to the merger and adopted the merger agreement and have executed and
delivered irrevocable proxies in favor of Davis to vote their shares of Inotek
in favor of the adoption of the merger agreement and approval of the merger.
This action by our controlling stockholders is sufficient to ensure that a
majority of the stockholders of Inotek adopt the merger agreement and approve
the merger without the vote of any other stockholder of Inotek. Accordingly,
your approval is not required and is not being sought.

This information statement and the attached documents provide you with
detailed information about the merger. Please read these documents carefully in
their entirety. You may also obtain information about Inotek from publicly
available documents that have been filed with the Securities and Exchange
Commission.

Please do not send in your share certificates at this time. Promptly after
the merger is completed, you will receive a letter of transmittal for that
purpose.

We appreciate your support.

Very truly yours,

/s/ DENNIS STONE

DENNIS W. STONE
President and Chief Executive
Officer
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INOTEK TECHNOLOGIES CORP.
11212 INDIAN TRAIL
DALLAS, TEXAS 75229

INFORMATION STATEMENT

WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.

THIS INFORMATION STATEMENT IS DATED JUNE 18, 2001 AND IS FIRST BEING MAILED TO
STOCKHOLDERS ON OR ABOUT JUNE 19, 2001.

TABLE OF CONTENTS

SUMMARY TERM SHEET.......................................... 1
SUMMARY..................................................... 2
The Merger................................................ 2
The Companies............................................. 2
Reasons for the Merger.................................... 3
Interest of Executive Officers and Directors in the
Merger; Potential Conflicts of Interest................ 3
Opinion of Financial Advisor.............................. 3
Legal Documents........................................... 3
Merger Consideration...................................... 4
Stockholder Vote Required to Approve the Merger and Adopt
the Merger Agreement................................... 4
Conditions to the Merger.................................. 4
Termination............................................... 4
Material U.S. Federal Income Tax Consequences of the
Merger................................................. 5
Appraisal Rights.......................................... 5
THE MERGER.................................................. 5
General................................................... 5
Company Information....................................... 5
Background of the Transaction............................. 6
Inotek's Reasons for the Merger; Recommendation of the
Board of Directors of Inotek........................... 8
Opinion of Financial Advisor.............................. 9
THE MERGER AGREEMENT........................................ 13
Completion of the Merger.................................. 13
Merger Consideration...................................... 13
Surrender and Exchange of Share Certificates.............. 13
Stock Options............................................. 13
Representations and Warranties............................ 14
Agreements of Inotek...................................... 15
Agreements of Davis....................................... 16
Conditions Precedent to the Merger........................ 17
Termination............................................... 18
Expenses.................................................. 18
Indemnification and Escrow Agreement...................... 18
INTEREST OF EXECUTIVE OFFICERS AND DIRECTORS; POTENTIAL
CONFLICTS OF INTEREST..................................... 18
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES............... 19
APPRAISAL RIGHTS............................................ 19
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND
MANAGEMENT................................................ 22
WHERE YOU CAN FIND MORE INFORMATION......................... 22
Appendix A -- Agreement and Plan of Merger.................. A-1
Appendix B -- Indemnification and Escrow Agreement.......... B-1
Appendix C -- Opinion of Sanders Morris Harris Inc. ........ C-1
Appendix D -- Section 262 of the General Corporation Law of
the State of Delaware..................................... D-1

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INOTEK TECHNOLOGIES CORP.
11212 INDIAN TRAIL
DALLAS, TEXAS 75229

SUMMARY TERM SHEET

Q: WHAT TRANSACTION IS BEING PROPOSED?

A: We are proposing the acquisition of Inotek by Davis for $0.65 in cash per
share through the merger of a wholly-owned subsidiary of Davis with Inotek.

Q: WHAT IS THE REASON FOR THE MERGER?

A: In order to increase our capital and expand our capabilities in both our
current market and new markets, including calibration services, our
controlling stockholders, in conjunction with our Board of Directors,
conducted an extensive search for a company which could provide new capital
and assist our entry into new markets. Our Board believes that the merger
with a wholly-owned subsidiary of Davis is fair to and in the best
interests of our stockholders. Important factors in our Board's
determination included the recommendation by our controlling stockholders,
the fairness opinion by our financial advisor and the broad scope and
results of the search which was conducted for the sale of Inotek.

Q: WHAT WILL I RECEIVE IN THE MERGER?

A: After the merger is completed, you will be entitled to receive $0.65 in
cash in exchange for each of your shares of Inotek stock, after you comply
with the instructions in the letter of transmittal that will be sent to you
regarding surrender of your stock certificate(s).

Q: WHAT VOTE OF STOCKHOLDERS IS REQUIRED TO APPROVE THE MERGER AND ADOPT THE
MERGER AGREEMENT?

A: Approval of the merger and adoption of the merger agreement requires
approval by a majority of all outstanding shares of Inotek. Neal E. Young,
David L. White and Dennis W. Stone, our controlling stockholders, have
consented in writing to the merger and adopted the merger agreement and
have executed and delivered irrevocable proxies in favor of Davis to vote
their shares of Inotek stock in favor of approval of the merger and the
adoption of the merger agreement. This action by our controlling
stockholders is sufficient to obtain the stockholder vote necessary to
adopt the merger agreement and approve the merger without the approval of
any other stockholder of Inotek. Therefore, your vote is not required and
is not being sought.

Q: SHOULD I SEND IN MY STOCK CERTIFICATES NOW?

A: No. Promptly after the merger is completed, you will receive a letter of
transmittal for use in surrendering your stock certificates and obtaining
payment for your shares.

Q: DO I HAVE APPRAISAL RIGHTS?

A: Yes. If you so choose, you will be entitled to exercise appraisal rights
upon completion of the merger so long as you take all the steps required to
perfect your rights under Delaware law. These steps are described under
"Appraisal Rights" in this information statement.

Q: WHEN WILL THE MERGER BE COMPLETED?

A: We are working towards completing the merger as quickly as possible. We
expect to complete the merger on or about July 9, 2001.

Q: WHOM DO I CALL IF I HAVE QUESTIONS ABOUT THE MERGER?

A: If you have any questions, require assistance, or need additional copies of
this information statement or other related materials, please call Neal E.
Young at (972) 243-7000.

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SUMMARY

The following is a summary of the material information from this
information statement and may not contain all of the information that is
important to you. To understand the merger fully and for a more complete
description of the legal terms of the merger, you should carefully read this
information statement and the documents to which we refer you. Additional
information about Inotek has been filed with the SEC and is available upon
request without charge, as described under "Where You Can Find More Information"
on page 22.

THE MERGER

This information statement relates to the acquisition of Inotek by Davis
for $0.65 in cash per share of Inotek stock, through the merger of a
wholly-owned subsidiary of Davis with Inotek.

THE COMPANIES

INOTEK TECHNOLOGIES CORP.
11212 INDIAN TRAIL
DALLAS, TEXAS 75229

Inotek is a high technology distribution and service company. Inotek's base
distribution business covers a broad range of product lines from highly
engineered, technically advanced items to commodity oriented devices or
components where customers purchase single or multiple quantities of specific
products. Representative product lines are shipped by the manufacturer to the
end customer with Inotek receiving a commission for its marketing and support
effort. The industrial market place includes:

- process controls and instrumentation -- products utilized in the
manipulation of pressure, temperatures and flows and the measurement of
their physical properties;

- test equipment -- portable instrumentation used in diagnostic evaluation
of electronic, process or automation equipment; and

- information management -- the computer hardware and software,
programmable logic controller, responsible for the master control of a
factory process.

Among Inotek's major product lines are Action and OPTO22-process
instrumentation I/O, Fluke electronic test equipment, Tektronix oscilloscopes
and US Data factory automation software. Inotek provides technical service,
which involves the repair calibration of customer-owned manufactured equipment.
Technical services also are provided for products manufactured in a
semi-finished state (i.e., process control/information management products)
which require final configuration to meet the customer's specification.

DAVIS INSTRUMENTS, LLC
4701 MOUNT HOPE DRIVE
BALTIMORE, MARYLAND 21215

Davis Instruments, LLC, a privately owned Maryland-based company founded in
1912, is primarily engaged in the distribution and service of electronic
instrumentation that is used principally for measurement, indication and
transmission of information.

The principal products and services offered by Davis fall within three main
categories:

- Distribution -- Davis sells test, measurement and calibration equipment
through a catalog distributed in the United States and to more than 80
countries worldwide. Davis sells the products of approximately 450 other
manufacturers through a bi-annual catalog -- The Davis Sourcebook --
which offers more than 25,000 products and is more than 1,100 pages.
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- Calibration -- Davis offers world-class calibration services for
instruments from hundreds of manufacturers. These services can be
performed at Davis' lab in Baltimore or at customers' locations
throughout the United States.

- Manufacturing -- Since 1912, Davis has been the leading manufacturer of
mechanical vane anemometers. Anemometers are used to measure the air
speed or quantity of air passing through or leaving ducts, flues, fans,
shafts, etc. and for numerous tests and survey work in the air
conditioning, heating, ventilating and industrial fields.

Davis was acquired in December 1999 by JPB Enterprises, Inc., a privately
held investment holding company located in Columbia, Maryland.

REASONS FOR THE MERGER (SEE PAGE 8)

Our Board of Directors believes that the proposed merger is fair to and in
the best interest of Inotek and its stockholders. The Board of Directors of
Inotek unanimously

- approved the form, terms and provisions of the merger and the merger
agreement;

- determined that the merger is fair to and in the best interest of Inotek
and its public stockholders;

- approved and declared the merger and the merger agreement advisable; and

- recommended that Inotek's stockholders approve and adopt the merger and
the merger agreement.

Important factors in the Board of Director's determination included the
recommendation of our controlling stockholders, the fairness opinion of our
financial advisor and the broad scope and results of the search which was
conducted for the sale of Inotek.

INTEREST OF EXECUTIVE OFFICERS AND DIRECTORS IN THE MERGER; POTENTIAL CONFLICTS
OF INTEREST (SEE PAGE 18)

You should be aware that a number of Inotek officers and directors have
interests in the merger that are different from, or in addition to, yours. As a
result of the merger, our executive officers and directors will receive, in the
aggregate, approximately $307,645 in payments under the agreements described
under "Interests of Executive Officers and Directors; Potential Conflicts of
Interest." The Board of Directors of Inotek was aware of these interests and
considered them, among other matters, in approving the merger.

OPINION OF FINANCIAL ADVISOR (SEE PAGE 9)

In making its determination with respect to the merger and the merger
agreement, the Board of Directors of Inotek considered, among other factors, the
opinion of Sanders Morris Harris Inc., its financial advisor. The Board of
Directors of Inotek received a written opinion dated April 4, 2001, from Sanders
Morris Harris to the effect that the cash consideration to be received by Inotek
stockholders is fair from a financial point of view to the stockholders. The
opinion, which is attached as Appendix C to this information statement, sets
forth assumptions made, matters considered and limitations on the review
undertaken in connection with the opinion.

LEGAL DOCUMENTS (SEE APPENDIX A AND B)

The merger agreement is attached as Appendix A to this information
statement. The indemnification and escrow agreement is attached as Appendix B to
this information statement. We encourage you to read these agreements as they
are the legal documents that govern the merger.

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MERGER CONSIDERATION (SEE PAGE 13)

In the merger, each share of Inotek common stock outstanding immediately
prior to the completion of the merger, except for treasury shares and shares as
to which appraisal rights have been properly exercised, will be exchanged for
$0.65 in cash.

STOCKHOLDER VOTE REQUIRED TO APPROVE THE MERGER AND ADOPT THE MERGER AGREEMENT

Approval of the merger and adoption of the merger agreement requires
approval by a majority of the outstanding shares of Inotek common stock. Neal E.
Young, David L. White and Dennis W. Stone, stockholders of Inotek holding 72.2%
of the outstanding voting stock of Inotek, have consented in writing to the
merger and the terms of the merger agreement and have executed and delivered
irrevocable proxies in favor of Davis to vote their shares of Inotek in favor of
the approval of the merger and adoption of the merger agreement. The approval by
our controlling stockholders is the only approval from Inotek stockholders
required to approve the merger and adopt the merger agreement.

CONDITIONS TO THE MERGER (SEE PAGE 17)

The obligation of Inotek and Davis to complete the merger is subject to the
following conditions:

- approval of the merger agreement by Inotek's stockholders;

- the absence of any statute, decree or injunction prohibiting the
consummation of the merger;

- accuracy of the representations and warranties made by the other party to
the extent specified in the merger agreement;

- performance in all material respects by the other party of the
obligations required to be performed by it under the merger agreement;

- the receipt of legal opinions; and

- the receipt by Inotek of a fairness opinion of Sanders Morris Harris Inc.
to the effect that the transactions contemplated by the merger agreement
are fair to the stockholders of Inotek from a financial point of view.

TERMINATION (SEE PAGE 18)

Inotek and Davis may mutually agree, at any time prior to the completion of
the merger, to terminate the merger agreement. In addition, either Inotek or
Davis may terminate the merger agreement if:

- the merger has not been completed by September 12, 2001;

- there is a material breach of any of the representations and warranties
or agreements of Inotek or Davis, and the breaching party fails to cure
such breach within fifteen (15) days after receipt of notice of such
breach; or

- if any of the conditions to the obligations of a party are not satisfied
or waived on or prior to the closing, and if any applicable cure period
has lapsed.

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MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER (SEE PAGE 19)

The receipt by an Inotek stockholder of cash for Inotek shares will be a
taxable transaction for United States federal income tax purposes. An Inotek
stockholder will generally recognize gain or loss in an amount equal to the
difference between the cash received by the stockholder and the stockholder's
tax basis in the Inotek shares surrendered in the merger. That gain or loss will
be a capital gain or loss if the Inotek shares are held as a capital asset by
the stockholder. Because the tax consequences of the merger may vary depending
upon your particular circumstances, we recommend that you consult with your tax
advisor regarding the tax consequences of the merger.

APPRAISAL RIGHTS (SEE PAGE 19)

You will be entitled to appraisal rights under Section 262 of the Delaware
General Corporation Law in connection with the merger so long as you take all
steps necessary to protect those rights. Section 262 is reprinted in its
entirety as Appendix D to this information statement.

You are not required to take any action at this time to exercise your
appraisal rights. We will send you a notice of appraisal rights at a later date
that will describe the timing of any action you will be required to take to
exercise your appraisal rights.

THE MERGER

GENERAL

The Board of Directors of Inotek is using this information statement to
inform Inotek's public stockholders about the proposed acquisition of Inotek by
Davis. The Board of Directors of Inotek has unanimously approved the merger and
the merger agreement.

The proposed acquisition will occur pursuant to the Agreement and Plan of
Merger dated as of May 15, 2001, among Inotek, Davis, Neal E. Young, David L.
White and Dennis W. Stone. We refer to this agreement as the "merger agreement"
in this information statement. Under the merger agreement, Inotek will merge
with a wholly-owned subsidiary of Davis and all outstanding shares of Inotek,
other than treasury shares and shares as to which appraisal rights have been
properly exercised, will at the effective time of the merger be converted into
the right to receive $0.65 in cash per share. The separate existence of the
merger subsidiary will cease and Inotek will become a wholly-owned subsidiary of
Davis. Neal E. Young, David L. White and Dennis W. Stone, our controlling
stockholders, have consented in writing to the merger and the adoption of the
merger agreement and have executed and delivered irrevocable proxies in favor of
Davis to vote their shares of Inotek in favor of the approval and adoption of
the merger agreement and approval of the merger. Since the controlling
stockholders hold 72.2% of the outstanding voting stock of Inotek and the
favorable vote of a majority of the outstanding shares of Inotek stock is
required for stockholder approval and adoption of the merger agreement and the
merger, no approval by the Inotek public stockholders is required or will be
sought.

COMPANY INFORMATION

INOTEK Technologies Corp.

Inotek is a high technology distribution and service company. Inotek's base
distribution business covers a broad range of product lines from highly
engineered technically advanced items to commodity-oriented devices or
components where customers purchase single or multiple quantities of specific
products. Representative product lines are shipped by the manufacturer to the
end customer with Inotek receiving a commission for its marketing and support
effort. The industrial market place includes:

- process controls and instrumentation -- products utilized in the
manipulation of pressure, temperatures and flows and the measurement of
their physical properties;

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- test equipment -- portable instrumentation used in diagnostic evaluation
of electronic, process or automation equipment; and

- information management -- the computer hardware and software,
programmable logic controller, responsible for the master control of a
factory process.

Among Inotek's major product lines are Action and OPTO22 -- process
instrumentation I/O, Fluke electronic test equipment, Tektronix oscilloscopes
and US Data factory automation software. Inotek provides technical service,
which involves the repair and calibration of customer-owned manufactured
equipment. Technical services also are provided for products manufactured in a
semi-finished state (i.e., process control/information management products)
which require final configuration to meet the customer's specification.

Davis Instruments, LLC

The principal products and services offered by Davis fall within three main
categories:

Davis was acquired in December 1999 by JPB Enterprises, Inc., a privately
held investment holding company located in Columbia, Maryland.

BACKGROUND OF THE TRANSACTION

In early May 2000, Dennis Stone, our President and Chief Executive Officer,
contacted Jay Clark, Vice President of Davis, by telephone to determine whether
Davis had an interest in exploring a strategic relationship between the two
companies. Davis and Inotek were somewhat familiar with each other because of
the similarity of their respective markets.

On May 10, 2000, Lee Rudow, President of Davis, called Mr. Stone to discuss
his inquiry. Messrs. Rudow and Stone discussed the instrumentation business in
general and Inotek in particular. The parties decided that a meeting should take
place in Dallas, Texas to allow Davis' senior management to learn more about us,
visit our headquarters and determine if some type of strategic arrangement
between the two companies would make sense from Davis' perspective.

On June 1, 2000, Messrs. Rudow and James R. Bolduc, Vice President of JPB
Enterprises, Inc., a privately held investment holding company that acquired
Davis in December 1999 ("JPBE"), met with Mr. Stone and Neal Young, the Chairman
of our Board, in Dallas. Messrs. Stone and Young presented an overview of Inotek
including a review of its budget for fiscal year 2001 and other internal
financial materials. In general, the meeting served as an introduction to Inotek
for Davis and initiated an internal effort by Davis to determine if a strategic
arrangement made sense. Based upon the results of this meeting, both parties

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determined to continue to explore a possible combination, albeit slowly because
of the fact that Davis had recently been acquired by JPBE.

During the month of June, Davis, with its financial and legal advisors,
explored a number of strategic alternatives. These alternatives included a
purchase of Inotek, a merger with Inotek as the surviving public company, a
joint venture or an equity investment in Inotek by Davis. Ultimately, Davis
determined that it would only be interested in proceeding with an acquisition of
at least a controlling interest in Inotek, but any transaction should be
deferred, as Davis had been recently purchased by JPBE, had significant debt on
its balance sheet and should improve its internal operating cash flow before
actively pursuing an acquisition.

From July through October, 2000, Messrs. Rudow and Stone spoke by phone at
frequent intervals, and we continued to provide Davis with financial and
operational information, as Davis continued to weigh the merits of an
acquisition of Inotek.

By early November, Davis decided that its cash flow had improved to the
point that an acquisition of Inotek on reasonable terms was financially feasible
and could probably be completed with partial external financing, and Davis
informed us of that decision. This led to a meeting on November 29, 2000, when
Messrs. Stone and Young and Mr. David White, our largest stockholder, traveled
to Columbia, Maryland for a meeting with Messrs. Rudow, J. Bolduc and J.P.
Bolduc, Chairman of the Board of Directors of both Davis and JPBE. The
discussion focused on the potential benefits of Davis' acquisition of Inotek and
the value of Inotek. The result of this meeting was that both parties agreed
that an acquisition of Inotek by Davis should be pursued, and a valuation range
of $0.65 -- $0.70 per share was established. At the end of this meeting, both
parties agreed to take some time to consider alternative ideas for a transaction
structure that would meet the financial goals of each party.

In early December, JPBE contacted attorneys for representation in
anticipation of beginning formal negotiations in early January. During the
middle of December and continuing until the beginning of January, Messrs. J.P.
Bolduc and Young had several telephone conversations in which they expressed
their views regarding the value of Inotek in an acquisition by Davis, with Mr.
Bolduc generally willing to offer $0.65 per share and Mr. Young asserting that
Inotek should be worth $0.70 or more.

On January 9, 2001, Messrs. Young, Stone, Rudow, J. Bolduc, and J.P. Bolduc
participated in a conference call. Davis' representatives took the position
that, due to a deterioration in Inotek's business, the decline in overall stock
market valuations, and Davis' ongoing analysis of costs associated with an
acquisition of Inotek, it would not agree to a merger price greater than $0.65
per share, and the parties ultimately agreed to that price, subject to Davis'
due diligence examination of Inotek and the receipt by Davis of a financing
commitment.

Davis instructed its legal counsel to prepare appropriate documentation,
and on January 17, 2001, we received forms of a binding letter agreement and
irrevocable proxies of Messrs. Young, White and Stone. These documents were
reviewed by our Board of Directors at a board meeting held on January 22, 2001,
and some modifications to the agreements were made. Final versions of the
binding letter agreement and proxies were prepared, authorized by the Board of
Directors of Davis and Inotek, and executed on January 22, 2001. Shortly
thereafter, Davis commenced a due diligence examination of our business,
operations and financial records, which was completed in March 2001.

During the course of its examination, Davis identified two issues that, in
the view of Davis' management, required special treatment. First, Davis learned
of the existence of a lawsuit involving one of our third party contractors, to
which we are not a party, which in Davis' view presented the risk of future
liability or loss to Inotek. Second, Davis concluded that, since the transaction
would be occurring approximately one year after the most recent audit of our
financial statements, Davis desired a mechanism to protect it against
unanticipated problems that might result from Davis' reliance on unaudited
financial information in its evaluation of Inotek. Mr. J.P. Bolduc called these
matters to the attention of Mr. Young and proposed that a portion of the merger
consideration be held back and placed in escrow for a period of time following
the closing of the merger to be used, if necessary, to indemnify Davis if any
losses were to arise from these two matters. Mr. Young expressed doubt that
there was any likelihood of loss but agreed to this proposal in

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principle. Because it would be burdensome and potentially expensive to provide
for an escrow of the consideration otherwise payable to our public stockholders,
and because Messrs. Young, White and Stone were to receive a substantial portion
of the aggregate merger consideration due to their relative stock ownership,
Messrs. J.P. Bolduc and Young agreed that only a percentage of the consideration
payable to the three "Principal Stockholders," as Messrs. Young, White and Stone
are identified in the indemnification and escrow agreement, would be subject to
the escrow arrangement.

Davis prepared a draft acquisition agreement which was first distributed to
us on April 3, 2001. A draft of the indemnification and escrow agreement with
the three principal stockholders was distributed to us on April 23, 2001. Inotek
made numerous suggestions with respect to both agreements, and subsequent drafts
of the agreements were distributed and reviewed over the next several weeks. In
seeking to resolve final issues that led to completion of the agreements,
particular attention was given to our insistence that Davis' obligation not be
subject to a financing contingency, which Davis had included in its proposed
agreement, and to the scope of the matters for which Davis could recover funds
pursuant to the indemnification and escrow agreement with the principal
stockholders and to the extent of certain representations and warranties in the
merger agreement.

After a series of discussions among the two companies, primarily involving
Messrs. J.P. Bolduc and Young, but at times also including Messrs. Stone, Rudow
and J. Bolduc, final agreements were distributed on May 14, 2001 and signed by
both Davis and Inotek on May 15, 2001.

INOTEK'S REASONS FOR THE MERGER; RECOMMENDATION OF THE BOARD OF DIRECTORS OF
INOTEK

The Board of Directors of Inotek unanimously determined that the merger is
fair to and in the best interests of Inotek's stockholders. The Board of
Directors of Inotek has unanimously approved and adopted the merger and the
merger agreement.

In the course of determining that the merger is fair to and in the best
interests of Inotek's stockholders, the Board of Directors of Inotek consulted
with Inotek's management, as well as its financial and legal advisors, and
considered a number of factors in making its determination, including:

- that David White is our largest stockholder and that it would be
difficult or impossible to pursue a transaction involving a sale or any
other strategic transaction requiring stockholder approval without Mr.
White's support and that Mr. White determined it was advantageous to
enter into the merger with Davis;

- that our management believed it was the appropriate time for a sale of
Inotek to occur because our ability to participate in the industry may be
limited due to our existing capitalization;

- the broad scope and the results of the search conducted by our management
and Board;

- the historical and current market price for our common stock;

- the opinion of our financial advisor that the cash consideration to be
received by our stockholders in the merger is fair to our stockholders
from a financial point of view;

- the fact that the merger agreement did not include a financing condition
and that, based upon information provided by Davis, Davis will be able to
provide the consideration to be paid to our stockholders; and

- the conclusion that the terms and conditions of the merger agreement were
reasonable and necessary to accomplish the merger.

In view of the wide variety of factors considered in connection with its
evaluation of the merger and the complexity of these matters, the Board of
Directors of Inotek did not find it useful to and did not attempt to quantify,
rank or otherwise assign relative weights to the factors considered in
connection with its determination. The Board of Directors of Inotek relied on
the experience and expertise of Sanders Morris Harris, its financial advisor,
for quantitative analysis of the financial terms of the merger, as described
under "Opinion of

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Sanders Morris Harris." In addition, the Board of Directors of Inotek did not
undertake to make any specific determination as to whether any particular factor
was essential to its ultimate determination, but rather the board conducted an
overall analysis of the factors described above, including thorough discussions
with and questioning of Inotek's management and legal and financial advisors. In
considering the factors described above, individual members of the Board of
Directors of Inotek may have given different weight to different factors or
reached different conclusions as to whether a specific factor weighed in favor
of or against approving the merger.

OPINION OF FINANCIAL ADVISOR

On February 20, 2001, Inotek retained Sanders Morris Harris to act as its
financial advisor with respect to a possible business combination involving
Inotek. As part of the engagement, the Board of Directors of Inotek requested
that Sanders Morris Harris consider whether the cash consideration to be
received by Inotek stockholders pursuant to the merger was fair from a financial
point of view to such stockholders. There were no limitations placed on the
scope of Sanders Morris Harris' review except that Sanders Morris Harris was not
authorized to solicit third-party indications of interest. The Board of
Directors of Inotek retained Sanders Morris Harris to act as its financial
advisor in connection with the merger because Sanders Morris Harris is a leading
investment banking and financial advisory firm with experience in the evaluation
of businesses and their securities in connection with mergers and acquisitions,
negotiated underwritings, secondary distributions of securities, private
placements and evaluations for corporate purposes.

Sanders Morris Harris rendered its oral opinion to Mr. Neal Young, Chairman
of our Board, who discussed it with the other members of the Board. Sanders
Morris Harris subsequently confirmed its opinion in writing on April 4, 2001, to
the effect that, as of that date and based upon the assumptions made, matters
considered and limits of their review, as set forth in their opinion, the cash
consideration to be received by Inotek's stockholders pursuant to the merger is
fair from a financial point of view to such holders.

The full text of Sanders Morris Harris' opinion, which sets forth material
information relating to Sanders Morris Harris' opinion that the cash
consideration to be received by Inotek's stockholders pursuant to the merger was
fair from a financial point of view to such stockholders, including the
assumptions made, matters considered and qualifications and limitations on the
scope of review undertaken by Sanders Morris Harris, is attached as Appendix C
to this information statement and is incorporated herein by reference. This
description of Sanders Morris Harris' opinion should be reviewed together with
the full text of the opinion, and you are urged to read the opinion and consider
it carefully. The following summary of Sanders Morris Harris' opinion is
qualified in its entirety by reference to the full text of the opinion. Sanders
Morris Harris has consented to the inclusion of its opinion in its entirety in
this information statement.

Sanders Morris Harris' opinion is addressed to the Board of Directors of
Inotek and evaluated only the fairness, from a financial point of view, of the
cash consideration to be received by Inotek's stockholders pursuant to the
merger to such stockholders. The terms of the merger, including the merger
consideration, were determined through negotiations between Inotek and Davis,
and were not determined by Sanders Morris Harris. Sanders Morris Harris' opinion
does not address the merits of the underlying decision to engage in the merger.

In arriving at its opinion, Sanders Morris Harris, among other things:

- reviewed certain publicly available business and financial information
relating to Inotek that Sanders Morris Harris deemed to be relevant;

- reviewed certain information, including financial forecasts, relating to
the business, earnings, cash flow, assets, liabilities and prospects of
Inotek;

- conducted discussions with members of senior management of Inotek
concerning the matters described in the two clauses above;

- reviewed the market prices and evaluation multiples for the Inotek shares
and compared them with those of certain publicly traded companies that
Sanders Morris Harris deemed to be relevant;

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- reviewed the results of operations of Inotek and compared them with those
of certain publicly traded companies that Sanders Morris Harris deemed to
be relevant;

- compared the proposed financial terms of the merger with the financial
terms of certain other transactions that Sanders Morris Harris deemed to
be relevant;

- participated in certain limited discussions among representatives of
Inotek, Davis and their respective legal and financial advisors;

- reviewed a draft of the merger agreement; and

- reviewed such other financial studies and analysis and took into account
such other matters Sanders Morris Harris deemed necessary, including
Sanders Morris Harris' assessment of general economic market and monetary
conditions.

In preparing its opinion, Sanders Morris Harris has assumed and relied on
the accuracy and completeness of all information supplied or otherwise made
available, discussed with, or reviewed by or for Sanders Morris Harris, or
publicly available, and Sanders Morris Harris has not assumed any responsibility
for independently verifying such information or undertaking an independent
evaluation or appraisal of any of the assets or liabilities of Inotek or been
furnished with any such evaluation or appraisal. In addition, Sanders Morris
Harris has not assumed any obligation to conduct, nor has Sanders Morris Harris
conducted, any physical inspection of the properties or facilities of Inotek.
With respect to the financial forecast information furnished to or discussed
with Sanders Morris Harris by Inotek, Sanders Morris Harris has assumed that
they have been reasonably prepared and reflect the best currently available
estimates and judgment of Inotek's management as to the expected future
financial performance of Inotek. Sanders Morris Harris has assumed that the
final form of the merger agreement is substantially similar to the last draft
reviewed by them. Sanders Morris Harris subsequently confirmed that the
differences between the executed agreements and the drafts reviewed by them at
the time it rendered its opinion would not have changed its opinion.

Sanders Morris Harris' opinion was necessarily based upon market, economic
and other conditions as they exist and can be evaluated on, and on the
information made available to Sanders Morris Harris as of April 4, 2001, the
date of the opinion.

In accordance with customary investment banking practice, Sanders Morris
Harris employed generally accepted evaluation methods in reaching its opinion.
The following is a summary of the material financial and comparative analyses
utilized by Sanders Morris Harris in arriving at its opinion.

Estimated fair market value analysis: Sanders Morris Harris estimated a
reasonable range for the current fair market value of each share of Inotek
common stock "given up" (including the potential value of 100% of the shares).
The mid-point of Sanders Morris Harris' estimated value per share of 100% of
Inotek's common stock "given up" was approximately $0.60, as compared to the
"cash value received" per share to be received from Davis of $0.65.

Premium analysis: Sanders Morris Harris reviewed the stock price and
trading volume for Inotek common stock over the 60 days preceding April 4, 2001
and determined that Inotek common stock had traded between $0.57 and $0.63 on
limited trading volume. Based on this price range, the proposed cash offer of
$0.65 per share represents a range of premiums of 3-14%, with an average of
approximately 8%. Sanders Morris Harris noted that this range is lower than the
20-40% average range for publicly announced premiums in 1999, as reported by
Mergerstat Review. In considering the small takeover premium, Sanders Morris
Harris noted the following:

- If individual investors were to liquidate their investments, not only
would it be somewhat difficult due to the limited trading volume of
Inotek common stock, but also the selling would most likely put downward
pressure on the price. As a result, these investors might receive a value
less than the current stock price and, perhaps, much lower than the cash
value offered by Davis.

- Premiums do not necessarily have to be in a 20-60% range for a
transaction to be fair to a company's stockholders. The critical factor
is whether another buyer would be willing to pay a higher premium.
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- Inotek's stockholders are receiving a certain, fixed value in cash
instead of an uncertain value in stock of another company.

In considering whether another buyer would be willing to pay a higher
premium, Sanders Morris Harris noted that the management of Inotek had made
efforts since July 1999 to solicit interest from other potential buyers with no
success. In addition, Sanders Morris Harris noted that management of Inotek and
the controlling stockholders have an excellent understanding of both the future
operating results of Inotek and the fair market value of Inotek's assets and
liabilities. Relying on this fact, Sanders Morris Harris concluded that Davis'
offer was the best alternative likely to be available in the foreseeable future
after analyzing all other reasonable possibilities.

Market price and trading volume analysis: Inotek's shares are publicly
traded on the OTC Bulletin Board under the symbol "INTK.OB" and have traded at
approximately $0.53-$0.72 per share recently. The average closing price for
Inotek shares in the past 30, 60, 90 and 120 days, as of March 1, 2001, had
generally been between $0.57 and $0.65. The highest trading price in the
preceding 120 days was $0.90 on November 14, 2000, and the lowest trading price
in the preceding 120 days was $0.47 on January 10, 2001. The average daily
trading volume of Inotek shares was less than 2,500 shares. After reviewing the
recent stock price history and volume, as well as past and current financial
information, Sanders Morris Harris concluded that the current fair market value
per share for small minority holdings of Inotek is approximately $0.50-$0.70.
This analysis does not take into account the premium value associated with
holding 100% of the outstanding shares of Inotek.

Liquidation analysis: Inotek's largest tangible assets consist of trade
receivables, inventories and property and equipment with book values of $2.3
million, $1.2 million and $801,553, respectively. Sanders Morris Harris
calculated the approximate value of Inotek to be $2.9 million after a
hypothetical liquidation of the assets and payment of all liabilities. Discounts
of 10%, 20% and 30% were applied to receivables, inventory and fixed assets,
respectively. In addition, since Inotek has no identifiable intangible assets,
goodwill was not considered. The discounts reflect the best estimate of the
actual market values Inotek would receive in the case of an actual liquidation.
Based on 4,959,288 fully diluted common shares outstanding as of March 28, 2001,
Inotek's liquidation value was $0.51 per share. The merger consideration would,
therefore, be a 28.7% premium over liquidation value per share.

Guideline publicly-traded company method: Sanders Morris Harris did not
consider ratios of comparable public companies to be important to the overall
analysis for valuing the common stock of Inotek because Inotek had negative
EBITDA and EBIT for the trailing 12 months ended November 30, 2000, and
therefore, applying multiples to these negative numbers would not be meaningful.
However, based on publicly available information, Sanders Morris Harris
calculated multiples of certain financial criteria, based on March 29, 2001
market prices, for the following comparable companies:

- Transmation

- Hathaway Corporation

- IFR Systems

- CE Franklin

- Hughes Supply

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The three key valuation multiples used for this analysis were (i)
enterprise value (i.e., market value of equity plus total debt less cash) to
revenues; (ii) price to book value; and (iii) price to tangible book value. In
addition to individual company multiples, mean (average), adjusted mean (average
excluding highest and lowest multiples) and median of each ratio. The following
chart sets forth these multiples:

COMPARABLE COMPANIES RATIO FOR
ADJUSTED MEAN INOTEK(1)
-------------------- ---------

Enterprise Value/Revenues................................ 0.4x 0.1x
Price/Book Value......................................... 1.0x 0.6x
Price/Tangible Book Value................................ 1.3x 0.9x

- ---------------

(1) Based on a value of $0.65 per share.

The following valuations would result from the application of the
comparable company adjusted mean multiples:

- $8.1 million (Inotek's trailing 12-month revenue of $19.1 million times
comparable companies' enterprise value/revenue multiple of 0.4x, plus the
balance sheet cash balance of $485,000), which gives a value of $1.63 per
share.

- $5.5 million (Inotek's 11/30/00 book value of $5.5 million times
comparable companies' price/book value multiple of 1.0x), which gives a
value of $1.11 per share.

- $4.7 million (Inotek's 11/30/00 tangible book value of $3.6 million times
comparable companies' price/tangible book value multiple of 1.3x), which
gives a value of $0.95 per share.

Sanders Morris Harris noted that each of Inotek's multiples were lower than
those of the comparable companies, and the $3.2 million valuation of Inotek by
Davis ($0.65 per share times 4,959,288 shares) is lower than the valuations
computed based on the comparable companies' multiples. However, Sanders Morris
Harris considered this analysis less meaningful based on the following factors:

- The comparable companies are not identical to Inotek. For example, some
of the comparable companies manufacture the products they distribute.
Therefore, comparisons can be distorted.

- The multiples compared do not consider profitability. Valuing a company
based on revenues generated while ignoring profit margins or using book
value or tangible book value without considering the return on equity
makes the multiples less meaningful.

As a result, although Sanders Morris Harris did consider the results of
this analysis, it was not given much weight.

The summary set forth above summarizes the material analyses performed by
Sanders Morris Harris. Sanders Morris Harris, however, believes that the
preparation of a fairness opinion is a complex process and is not necessarily
susceptible to partial analysis or summary description; therefore, Sanders
Morris Harris strongly believes that this description of the opinion should be
reviewed together with full text of the opinion. In arriving at its opinion,
Sanders Morris Harris considered the results of all its analyses. The analyses
performed by Sanders Morris Harris are not necessarily indicative of actual
values or actual future results, which may be significantly more or less
favorable than those suggested by Sanders Morris Harris' analyses. The analyses
do not purport to be appraisals or to reflect the prices at which Inotek might
actually be sold or the prices at which Inotek common stock may trade at any
time in the future. The analyses were prepared solely for the purposes of
Sanders Morris Harris providing its opinion to the Board of Directors of Inotek
as to the fairness, from a financial point of view, of the cash consideration to
be received pursuant to the merger by Inotek's stockholders to such
stockholders. Because the analyses are inherently subject to uncertainty, being
based upon numerous factors and events, including, without limitation, factors
related to general economic and competitive conditions beyond the control of the
parties or their respective advisors, none of Sanders Morris Harris, Inotek,
Davis or any other person assumes responsibility if future results or actual
values are

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materially different from those forecast. The foregoing summary is qualified by
reference to the written opinion dated as of April 4, 2001, of Sanders Morris
Harris, which is attached as Appendix C to this information statement.

Fee arrangement: Under the terms of the engagement letter dated February
20, 2001, Inotek will pay Sanders Morris Harris a total fee of $60,000, plus
reimbursement of reasonable out-of-pocket expenses incurred in connection with
providing its services and rendering its opinion. Inotek has also agreed to
indemnify Sanders Morris Harris, its affiliates and each of their respective
directors, officers, agents, employees and controlling persons against
liabilities, including liabilities under U.S. federal securities laws, related
to or arising out of the merger or the engagement of Sanders Morris Harris,
other than any such liabilities resulting from Sanders Morris Harris' bad faith
or gross negligence.

THE MERGER AGREEMENT

The following describes the material terms of the merger agreement and
indemnification and escrow agreement. The full text of these agreements are
attached to this information statement as Appendix A and B, respectively, and
are incorporated in this information statement by reference. We encourage you to
carefully read the entire agreements, as they are the legal documents governing
the terms of the merger.

COMPLETION OF THE MERGER

As soon as practicable after all of the conditions set forth in the merger
agreement have been satisfied or waived, the parties will file a certificate of
merger with the Secretary of State of the State of Delaware. The merger will be
completed at the time the certificate is filed or, if later, at the time
specified in the certificate.

MERGER CONSIDERATION

The merger agreement provides that each share of Inotek common stock
outstanding immediately prior to the completion of the merger, other than
treasury shares and shares as to which appraisal rights have been properly
exercised, will, at the completion of the merger, be converted into the right to
receive $0.65 per share in cash, without interest.

SURRENDER AND EXCHANGE OF SHARE CERTIFICATES

Promptly after the time the merger becomes effective, Davis will deliver
the applicable merger consideration to our shareholders in exchange for
surrendered Inotek stock certificates.

Promptly after the merger, Davis will cause an exchange agent to send
persons who held our common stock immediately before the merger became effective
a letter of transmittal containing instructions for use in effecting the
exchange of their Inotek stock certificates for the merger consideration payable
to them. If you held shares of our stock immediately before the effective time
of the merger, upon surrender to Davis of an outstanding certificate or
certificates which represented our shares and acceptance of such certificate by
Davis, Davis will deliver to you the merger consideration owed to you pursuant
to the merger agreement. No interest will be paid or accrue on any cash payable
to you.

If you do not have your share certificate, you may make an affidavit of
that fact. In addition, we may require that you post a bond in a reasonable
amount determined by us with respect to the missing share certificate. Upon
receipt of the affidavit and any required bond, Davis will issue the merger
consideration payable to you.

STOCK OPTIONS

At the effective time, each outstanding option to purchase our common stock
which was not exercised prior to the merger will be canceled.

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REPRESENTATIONS AND WARRANTIES

We made customary representations and warranties in the merger agreement
relating to various aspects of our business and financial statements and other
matters, including, among other things:

- our organization, capital stock and good standing;

- our authority to enter into and the validity and effectiveness of the
merger agreement and the absence of defaults under our certificate of
incorporation, bylaws and agreements;

- the lack of any subsidiaries;

- our financial information;

- the absence of recent material changes or events;

- regulatory enforcement matters;

- tax matters;

- litigation matters;

- our properties, contracts, employee benefit plans and other agreements;

- our investment portfolio;

- the documents and reports filed with the Securities and Exchange
Commission and the accuracy and completeness of the information contained
in those documents and reports;

- employee matters and the Employee Retirement Income Security Act of 1974;

- title to our properties, licenses and insurance;

- environmental matters;

- compliance with laws and regulations;

- brokers' fees;

- the absence of undisclosed liabilities;

- the documents and reports to be filed, including this information
statement, with the Securities and Exchange Commission and the accuracy
and completeness of the information contained in those documents and
reports;

- our commitments and contracts;

- material interests of our directors, officers and affiliates;

- our conduct to date;

- the execution and validity of the proxies delivered to Davis by Neal E.
Young, David L. White and Dennis W. Stone;

- our accounts receivable; and

- our minute books.

The merger agreement also contains representations and warranties of our
controlling stockholders, Neal E. Young, David L. White and Dennis W. Stone,
including, among other things:

- their ownership of our common stock;

- their authority to enter into the merger agreement;

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- the absence of breaches or violations of any agreement or applicable
laws; and

- the required consents of third parties.

The merger agreement also contains customary representations and warranties
of Davis relating to various aspects of their business, including, among other
things:

- their organization and good standing;

- their authority to enter into and the validity and effectiveness of the
merger agreement;

- litigation matters;

- the information supplied or to be supplied in connection with the
documents and reports filed, and to be filed, with the Securities and
Exchange Commission, including this information statement, and the
accuracy and completeness of the information contained in those documents
and reports; and

- the availability of adequate resources to pay the merger consideration.

The representations and warranties of each party will expire at the time
the merger occurs except as set forth in the merger agreement.

AGREEMENTS OF INOTEK

We have agreed, prior to the time the merger occurs, to operate our
business in the ordinary course of business consistent with our past practices.
In addition, the merger agreement places specific restrictions on our ability
to:

- declare or pay any dividend or other distribution with respect to our
capital stock;

- issue any capital stock or any securities convertible into or
exchangeable for capital stock, except for specific issuances permitted
in the merger agreement;

- directly or indirectly redeem, purchase or otherwise acquire our capital
stock;

- split, combine, recapitalize or reclassify any class of capital stock or
stock equivalent; and

- amend our organizational documents or enter into an agreement to merger
or consolidate with, or sell a significant portion of our assets to, any
person or entity.

We have agreed not to take the following actions without the prior written
consent of Davis:

- increase the compensation payable or to become payable by us to any of
our officers or employees, other than in the ordinary course of business
consistent with past practice, or grant any options or change any
agreement, payment or arrangement with any such persons;

- borrow or agree to borrow any amount of funds or increase the amount
available under any credit facility except for expenses incurred in the
ordinary course of business and expenses in connection with this
agreement;

- make or commit to make any loan or other extension of credit;

- enter into any agreement, contract or commitment having a term in excess
of three (3) months;

- mortgage, pledge or subject to lien or other encumbrance of any of our
properties;

- cancel or accelerate any material indebtedness owed to us;

- sell or otherwise dispose of any real property or any material amount of
any tangible or intangible personal property;

- commit or fail to do any act which will cause a breach of any agreement,
contract or commitment which would have a material adverse effect on our
business, financial condition or result of operations;
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- violate any law, statute, rule or government order which would have a
material adverse effect on our business, financial condition or results
of operations; and

- purchase any real or personal property or make any other capital
expenditure in excess of $5,000.

Without the prior written consent of Davis, we have agreed not to engage in
any transaction or take any action that would cause any of our representations
and warranties with respect to the transaction to become untrue in any material
respect. We also have agreed to notify Davis of any material matters or events
directly involving us that may adversely affect our business, operations,
properties, assets or conditions of Inotek.

We have also agreed that, prior to the merger, we will not solicit or
encourage, or hold discussions or negotiations with or provide information to
any person or entity in connection with any proposal for the acquisition of all
or a substantial portion of our business, assets or shares, and we will promptly
advise Davis of our receipt of any such proposal or inquiry.

Pursuant to the merger agreement, we will maintain cash and cash equivalent
balances of at least $750,000, less certain extraordinary expenses incurred by
Inotek in connection with the transaction. These extraordinary expenses include
the following: costs charged by Sanders Morris Harris Inc. for its fairness
opinion; legal, accounting and printing costs; and a severance payment to Dennis
Stone, our President and Chief Executive Officer. We will also maintain
inventory with a value of at least $1,200,000, and the value of our total
accounts receivable will exceed the value of our total accounts payable by at
least $1,000,000.

The merger agreement requires us to use our commercially reasonable best
efforts to obtain and deliver to Davis, at or before the closing of the merger,
certificates of good standing from each jurisdiction in which we own or lease
real property, have employees, sell products or services if we are required to
be qualified to do business.

Finally, we have made additional agreements that are customary for a
transaction of this nature, including, among other things, the following:

- to give prompt written notice to Davis of any breach of any
representation or agreement in connection with the transaction and use
our best efforts to prevent or promptly remedy any such situation;

- to deliver to Davis written consents, executed by Messrs. Young, White
and Stone, approving the transaction;

- to perform all required conditions and obligations under the merger
agreement;

- to obtain the necessary third party consents for the consummation of the
transaction; and

- to deliver to Davis our monthly unaudited balance sheets and profit and
loss statements.

AGREEMENTS OF DAVIS

Davis has made certain agreements that are customary for a transaction of
this nature, including among other things, the following:

- to refrain from, without our prior written consent, engaging in any
transaction or taking any action that would cause any of Davis'
representations and warranties with respect to the transaction to become
untrue in any material respect and to promptly notify us of any matter
that is known to and directly involving Davis, if that matter or event is
materially adverse to the ability of Davis to consummate the transaction;

- to give prompt written notice to us of any breach of any representation
or agreement in connection with the transaction and use its best efforts
to prevent or promptly remedy the situation;

- to perform all required conditions and obligations under the merger
agreement;

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- to obtain the necessary third party consents for the consummation of the
transaction; and

- to comply with financing terms or commitments which it intends to use to
pay any portion of the required consideration under the merger agreement.

CONDITIONS PRECEDENT TO THE MERGER

Conditions to the Obligations of Davis

Davis' obligation to effect the merger is subject to the satisfaction or
waiver of the following conditions:

- our representations and warranties contained in the merger agreement will
be true and correct in all material respects;

- Davis will have performed or complied with all agreements and covenants
required by the merger agreement to be performed or complied with by them
on or prior to the closing date;

- no court or governmental authority will have enacted, issued,
promulgated, enforced or entered any law, regulation or order, whether
temporary, preliminary or permanent, which is in effect and which has the
effect of making the merger illegal or otherwise prohibiting consummation
of the merger;

- Davis shall have received all approvals and consents of applicable courts
and/or governmental authorities required to consummate the merger;

- Davis will have received all documents to be received from us, including
all consents and an opinion, dated the closing date, from counsel to
Davis relating to the merger; and

- we shall have received a fairness opinion from Sanders Morris Harris, our
financial advisor, to the effect that the merger consideration is fair to
our stockholders, from a financial point of view.

Conditions to our Obligations

Our obligation to effect the merger is further subject to the satisfaction
or waiver of the following conditions:

- Davis' representations and warranties contained in the merger agreement
will be true and correct in all material respects;

- we will have performed or complied with all agreements and covenants
required by the merger agreement to be performed or complied with by us;

- no court or governmental authority shall have enacted, issued,
promulgated, enforced or entered any law, regulation or order, whether
temporary, preliminary or permanent, which is in effect and which has the
effect of making the merger illegal or otherwise prohibiting consummation
of the merger;

- we shall have received all approvals and consents of applicable courts
and/or governmental authorities required to consummate the merger,
including the approval of our stockholders and all regulatory approvals;

- we will have received all documents required to be received from Davis,
including an opinion, dated the closing date, from our counsel relating
to the merger; and

- we shall have received a fairness opinion of Sanders Morris Harris, our
financial advisor, to the effect that the merger is fair to our
stockholders from a financial point of view.

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TERMINATION

The merger agreement may be terminated and the merger may be abandoned at
any time prior to the effective time as follows:

- by mutual written consent of Davis and us;

- by either Davis or us, if the merger has not been consummated on or
before September 12, 2001; or

- by either Davis or us, if:

(1) either party breaches any covenant or agreement in the merger
agreement, which is not cured within fifteen (15) days after notice of such
breach; and

(2) the conditions to the obligation of either party are not satisfied
or waived and any applicable cure period has lapsed.

EXPENSES

Except as otherwise provided, each party will pay its own costs and
expenses incurred in connection with the merger agreement, including reasonable
legal and accounting fees, printing and filing costs and other similar
expenditures associated with the transaction, which may not exceed an aggregate
cost of $75,000 or such greater amount as may be agreed to by Davis.

INDEMNIFICATION AND ESCROW AGREEMENT

Davis, Inotek and Neal E. Young, David L. White and Dennis W. Stone entered
into an indemnification and escrow agreement at the time of signing the merger
agreement. The purpose of this agreement is for Messrs. Young, White and Stone
to indemnify Davis and its affiliates for all losses, liabilities, claims,
damages, fines, penalties and expenses incurred after the completion of the
merger arising from the following:

- any breach by Messrs. Young, White or Stone relating to Inotek's
accounting treatment of any transaction, asset or liability other than in
accordance with generally accepted accounting principals which result in
an adverse change to Inotek's financial condition;

- litigation costs from any such breach;

- costs and liabilities arising from certain ongoing litigation; and

- costs incurred in connection with Inotek's conducting business in certain
foreign jurisdictions. For the purpose of securing the obligations of
Messrs. Young, White and Stone, Davis will deposit into an escrow
account, out of the consideration that would otherwise be paid to them,
the amount of $257,000. Upon the earlier of the approval of Davis or
twelve months after the closing date of the merger and provided that no
unsettled claims to the escrowed funds are outstanding, the remaining
escrowed funds shall be distributed to Messrs. Young, White and Stone in
the following percentages: Mr. Young -- 43.4%, Mr. White -- 53% and Mr.
Stone -- 3.6%.

INTEREST OF EXECUTIVE OFFICERS AND DIRECTORS;
POTENTIAL CONFLICTS OF INTEREST

You should be aware that the executive officers and directors of Inotek
have interests in the merger that are different from, or in addition to, their
interest as stockholders of Inotek generally. Our Board of Directors was aware
of these interests and considered them, among other matters, in approving the
merger.

We have agreed to pay Dennis Stone, our Chief Executive Officer, $360,000,
less $52,355, the approximate net gain Mr. Stone will receive from the exercise
of his stock options, upon the sale or change in ownership of Inotek. Mr. Stone
has agreed to waive all termination compensation previously promised to him and
has agreed that all other offers of incentive compensation, including warrants
or stock purchase

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agreements, are null and void. Accordingly, upon consummation of the merger, we
will pay Mr. Stone approximately $307,645.

In a separate letter agreement entered into contemporaneously with the
merger agreement, Davis agreed that we would acquire a three year extension of
our insurance policy covering potential liabilities of our directors and
officers, provided that the cost of doing so does not exceed $50,000.

MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES

This summary of the material United States federal income tax consequences
to Inotek stockholders of the merger is based on the law as currently in effect.
This summary does not discuss all of the tax consequences that may be relevant
to an Inotek stockholder in light of its particular circumstances or to
stockholders subject to special rules, such as financial institutions,
broker-dealers, tax-exempt organizations, stockholders that hold their Inotek
shares as part of a straddle or a hedging or conversion transaction and
stockholders who acquired their Inotek shares through the exercise of an
employees stock option or otherwise as compensation. Inotek stockholders are
urged to consult their own tax advisors as to the particular tax consequences to
them of the merger, including the effect of United States state and local tax
laws or foreign tax laws.

In general, the receipt in the merger by a stockholder of cash for Inotek
shares will be a taxable transaction for United States federal income tax
purposes. An Inotek stockholder will recognize gain or loss in an amount equal
to the difference between the cash received by the stockholder in the merger and
the stockholder's tax basis in the Inotek shares surrendered in the merger. That
gain or loss will be a capital gain or loss if the Inotek shares are held as a
capital asset by the Inotek shareholder, and will be a long term capital gain or
loss if the Inotek shares have been held for more than one year at the time of
the merger.

An Inotek stockholder may be subject to backup withholding at a rate of 31%
unless, at the time it surrenders Inotek shares in the merger, it provides its
taxpayer identification number and certifies that the number is correct, or
unless an exemption is demonstrated to apply. Backup withholding is not an
additional tax. An amount so withheld can be refunded or credited against the
federal income tax liability of the stockholder, provided appropriate
information is forwarded to the Internal Revenue Service.

APPRAISAL RIGHTS

Under Section 262 of the Delaware General Corporation Law, or DGCL, if you
comply with the conditions established by Section 262, you will be entitled to
dissent and elect to have the "fair value" of your shares, exclusive of any
element of value arising from the accomplishment, or expectation of the merger,
together with a fair rate of interest, if any, judicially determined by the
Delaware Court of Chancery and paid to you in cash.

The following is a summary of the law pertaining to appraisal rights under
the DGCL and is qualified in its entirety by applicable Delaware case law and
the full text of Section 262, a copy of which is provided as Appendix D to this
information statement. All references in Section 262 and in this summary to a
"stockholder" are to the record holder of the shares of Inotek stock as to which
appraisal rights are asserted. If you have a beneficial interest in shares of
stock held of record in the name of another person, such as a broker or nominee,
you will be required to act promptly to cause the record holder to follow the
steps summarized below properly and in a timely manner to perfect your appraisal
rights.

Under Section 262, where a merger is accomplished by written consent
pursuant to Section 228 of DGCL, the corporation, either before or within 10
days after the completion of the merger, must notify each stockholder entitled
to appraisal rights of the approval of the merger and that appraisal rights are
available and include in the notice a copy of Section 262. We will send you such
a notice no more than 10 days after the completion of the merger. At that time,
if you wish to exercise your appraisal rights or wish to preserve the right to
do so, you should review carefully Section 262 and seek advice of legal counsel,
since failure to comply fully with the procedures of Section 262 will result in
the loss of appraisal rights.

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24

YOU ARE NOT PRESENTLY REQUIRED TO TAKE ACTION TO PERFECT YOUR APPRAISAL
RIGHTS. THE NOTICE WE WILL SEND TO YOU NO MORE THAN 10 DAYS AFTER THE COMPLETION
OF THE MERGER WILL DESCRIBE THE TIMING OF ANY ACTION YOU WILL BE REQUIRED TO
TAKE TO PERFECT YOUR APPRAISAL RIGHTS.

If you wish to exercise the right to dissent from the merger and demand
appraisal under Section 262, you will be required to deliver to Inotek a written
demand for appraisal of your shares of Inotek stock within 20 days after the
date of mailing of the notice of completion of the merger, which demand will be
sufficient if it reasonably informs Inotek of your identity and that you intend
to demand appraisal of your shares.

Only a holder of record of shares of Inotek stock issued and outstanding
immediately prior to the completion of the merger will be entitled to assert
appraisal rights for the shares of stock registered in that holder's name. A
demand for appraisal should be executed by or on behalf of the stockholder of
record, fully and correctly, as that stockholder's name appears on the stock
certificates, should specify the stockholder's name and mailing address, the
number of shares of stock owned and that the stockholder intends thereby to
demand appraisal of the stockholder's shares of Inotek stock.

If your shares of Inotek stock are owned of record in a fiduciary capacity,
such as by a trustee, guardian or custodian, execution of a written demand
should be made in that capacity. If your shares of Inotek stock are owned of
record by more than one person as in a joint tenancy or tenancy in common, the
demand should be executed by or on behalf of all owners. An authorized agent,
including one or more joint owners, may execute a demand for appraisal on behalf
of a stockholder; however, the agent must identify the record owner or owners
and expressly disclose the fact that, in executing the demand, the agent is
acting as agent for the owner or owners.

A record holder such as a broker who holds shares of Inotek stock as
nominee for several beneficial owners may exercise appraisal rights with respect
to the shares of Inotek stock held for one or more beneficial owners while not
exercising those rights with respect to the shares of Inotek stock held for one
or more other beneficial owners; in that case, the written demand should set
forth the number of shares of Inotek stock as to which appraisal is sought, and
where no number of shares is expressly mentioned, the demand will be presumed to
cover all shares of Inotek stock held in the name of the record owner. If you
hold your shares of Inotek stock in brokerage accounts or other nominee forms
and wish to exercise appraisal rights, you are urged to consult with the person
or entity holding the shares to determine the appropriate procedures for the
making of a demand for appraisal by the nominee.

Within 120 days after the completion of the merger, but not thereafter,
either Inotek or any holder of dissenting shares of Inotek stock who has
complied with the requirements of Section 262 may file a petition in the
Delaware Chancery Court demanding a determination of the fair value of all
shares of Inotek stock held by dissenting stockholders. Inotek is under no
obligation to and has no present intent to file a petition for appraisal, and
you should not assume that Inotek will file a petition or that Inotek will
initiate any negotiations with respect to the fair value of the shares.
Accordingly, if you desire to have your shares appraised, you should initiate
any petitions necessary for the perfection for your appraisal rights within the
time periods and in the manner prescribed in Section 262.

Within 120 days after the completion of the merger, any stockholder who has
complied with the provisions of Section 262 will be entitled to receive from
Inotek, upon written request, a statement setting forth the aggregate number of
shares of Inotek stock for which demands for appraisal have been received by
Inotek and the aggregate number of holders of the shares. Inotek must mail this
statement to the stockholder within 10 days of receipt of a request or within 10
days after the expiration of the period for the delivery of demands as described
above, whichever is later.

Within 120 days after the effectiveness of the merger, any Inotek
stockholder complying with Section 262 and who is otherwise entitled to
appraisal rights may file a petition in the Delaware Chancery Court demanding a
determination of the value of the stock of all such holders. A stockholder
timely filing a petition for appraisal with the Delaware Chancery Court must
deliver a copy to Inotek, which will then be obligated within 20 days to provide
the Delaware Chancery Court with a duly verified list containing the names and

20
25

addresses of all stockholders who have demanded appraisal of their shares of
Inotek stock and with such stockholders agreements as to the value of their
Inotek shares have not been reached with Inotek. After notice to the
stockholders, the Delaware Chancery Court is empowered to conduct a hearing on
the petition to determine which stockholders are entitled to appraisal rights.
The Delaware Chancery Court may require stockholders who have demanded an
appraisal for their shares and who hold stock represented by certificates to
submit their certificates to the Register in Chancery for notation thereon of
the pendency of the appraisal proceedings, and if any stockholder fails to
comply with the requirement, the Delaware Chancery Court may dismiss the
proceedings as to that stockholder.

After determining the stockholders entitled to an appraisal, the Delaware
Chancery Court will appraise the "fair value" of their shares, exclusive of any
element of value arising from the accomplishment or expectation of the merger,
together with a fair rate of interest, if any, to be paid upon the amount
determined to be the fair value. The costs of the action may be determined by
the Delaware Chancery Court and taxed upon the parties as the Delaware Chancery
Court deems equitable. Upon application of a holder of dissenting shares of
Inotek stock, the Delaware Chancery Court may also order that all or a portion
of the expenses incurred by any stockholder in connection with the appraisal
proceeding, including, reasonable attorneys' fees and the fees and expenses of
experts, be charged pro rata against the value of all of the shares of Inotek
stock entitled to appraisal.

IF YOU CONSIDER SEEKING APPRAISAL, YOU SHOULD BE AWARE THAT THE FAIR VALUE
OF YOUR SHARES AS DETERMINED UNDER SECTION 262 COULD BE MORE THAN, THE SAME AS
OR LESS THAN THE MERGER CONSIDERATION YOU WOULD RECEIVE UNDER THE MERGER
AGREEMENT IF YOU DID NOT SEEK APPRAISAL OF YOUR SHARES.

In determining fair value and, if applicable, a fair rate of interest, the
Delaware Chancery Court is to take into account all relevant factors. In
Weinberger V. UOP, Inc., the Delaware Supreme Court discussed the factors that
could be considered in determining fair value in an appraisal proceeding,
stating that "proof of value by any techniques or methods which are generally
considered acceptable in the financial community and otherwise admissible in
court" should be considered, and that "fair price obviously requires
consideration of all relevant factors involving the value of a company." The
Delaware Supreme Court stated that, in making this determination of fair value,
the court must consider market value, asset value, dividends, earnings,
prospects, the nature of the enterprise and any other facts that could be
ascertained as of the date of the merger that throw any light on future
prospects of the merged corporation. In Weinberger, the Delaware Supreme Court
further stated that "elements of future value, including the nature of the
enterprise, which are known or susceptible of proof as of the date of the merger
and not the product of speculation, may be considered. "Section 262 provides
that a fair value is to be "exclusive of any element of value arising from the
accomplishment or expectation of the merger."

Any stockholder who has duly demanded appraisal in compliance with Section
262 will not, after the completion of the merger, be entitled to vote the shares
subject to this demand for any purpose or to receive payment of dividends or
other distributions on those shares (except dividends or other distributions
payable to holders of record of shares as of a record date prior to the
completion of the merger).

If any stockholder who demands appraisal of shares of Inotek stock under
Section 262 fails to perfect, or effectively withdraws or loses, the right to
appraisal, the stockholder's shares of Inotek stock will be converted into the
right to receive the merger consideration in cash in accordance with the merger
agreement, without interest. A stockholder will fail to perfect, or effectively
lose or withdraw, the right to appraisal if no petition for appraisal is filed
within 120 calendar days after the completion of the merger. A stockholder may
withdraw a demand for appraisal by delivering to Inotek a written withdrawal of
the demand for appraisal and acceptance of the merger consideration, except that
any such attempt to withdraw made more than 60 calendar days after the
completion of the merger will require the written approval of Inotek. Once a
petition for appraisal has been filed, the appraisal proceeding may not be
dismissed as to any stockholder, absent approval of the Delaware Chancery Court.

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26

SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT

The following table sets forth certain information regarding the beneficial
ownership of Inotek common stock held by each director of Inotek, by each of the
three most highly compensated executive officers of Inotek as required by SEC
rules and by all directors and executive officers of Inotek as a group. Except
as noted, the persons named in the table below have sole voting and investment
power over the shares. Information in the table is as of June 18, 2001.

SHARES OF COMMON STOCK
BENEFICIALLY OWNED
------------------------
NAME AND ADDRESS OF PERCENT
BENEFICIAL OWNER NUMBER OF CLASS
- ------------------- --------- --------

David L. White.............................................. 1,795,525 37.8%
4205 Lakeside Drive
Dallas, Texas 75219
Neal E. Young............................................... 1,495,915 31.5%
11212 Indian Trail
Dallas, Texas 75229
Dennis W. Stone............................................. 142,900(1) 3.0%
5908 Lennox Hill
Plano, Texas 75093
Wilson J. Prokosch.......................................... 8,000(2) *
7700 Chevy Chase Drive, Suite 200
Austin, Texas 78252
Jeff Johnson................................................ -0- --
2708 Park Run Drive
Arlington, Texas 76016
All officers and directors as a group (5 total)............. 3,442,340(1)(2) 72.4%

- ---------------

* Less than 1%

(1) Includes 141,500 shares of common stock issuable pursuant to options which
are currently exercisable.

(2) Includes 5,000 shares of common stock issuable pursuant to options which are
currently exercisable.

WHERE YOU CAN FIND MORE INFORMATION

Inotek files annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any reports, statements or
other information Inotek files at the SEC's public reference rooms in
Washington, D.C., New York, New York and Chicago, Illinois. Please call the SEC
at 1-800-SEC-0330 for further information on the public reference rooms. Our SEC
filings are also available to the public from commercial document retrieval
services and at the web site maintained by the SEC at "http://www.sec.gov."

YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE IN THIS INFORMATION STATEMENT. WE HAVE NOT AUTHORIZED ANYONE TO
PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT FROM WHAT IS CONTAINED IN THIS
INFORMATION STATEMENT. THIS INFORMATION STATEMENT IS DATED JUNE 18, 2001. YOU
SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN THE INFORMATION STATEMENT IS
ACCURATE AS OF ANY DATE OTHER THAN SUCH DATE, AND THE MAILING OF THIS
INFORMATION STATEMENT TO STOCKHOLDERS SHALL NOT CREATE ANY IMPLICATION TO THE
CONTRARY.

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27

APPENDIX A
AGREEMENT AND PLAN OF MERGER

BY AND AMONG

DAVIS INSTRUMENTS, LLC,
A MARYLAND LIMITED LIABILITY COMPANY,

INOTEK TECHNOLOGIES CORP.,
A DELAWARE CORPORATION,

AND

THE STOCKHOLDERS NAMED HEREIN

MAY 15, 2001
28

TABLE OF CONTENTS

PAGE
----

ARTICLE I -- TERMS OF THE MERGER & CLOSING; CONVERSION OF
SHARES
Section 1.01. The Merger.................................. A-1
Section 1.02. Effects of the Merger....................... A-1
Section 1.03. Conversion of Shares........................ A-1
Section 1.04. The Closing................................. A-2
Section 1.05. The Closing Date............................ A-2
Section 1.06. Actions At Closing.......................... A-2
Section 1.07. Exchange Procedures; Surrender of
Certificates........................................... A-2
ARTICLE II -- REPRESENTATIONS AND WARRANTIES OF INOTEK AND
THE PRINCIPAL STOCKHOLDERS
Section 2.01. Organization and Capital Stock; Standing and
Authority.............................................. A-3
Section 2.02. Authorization; No Defaults.................. A-3
Section 2.03. Subsidiaries................................ A-3
Section 2.04. Financial Information....................... A-3
Section 2.05. Absence of Changes.......................... A-4
Section 2.06. Regulatory Enforcement Matters.............. A-4
Section 2.07. Tax Matters................................. A-4
Section 2.08. Litigation.................................. A-4
Section 2.09. Properties, Contracts, Employee Benefit
Plans and Other Agreements............................. A-4
Section 2.10. Reports..................................... A-5
Section 2.11. Investment Portfolio........................ A-5
Section 2.12. Employee Matters and ERISA.................. A-5
Section 2.13. Title to Properties; Licenses; Insurance.... A-6
Section 2.14. Environmental Matters....................... A-6
Section 2.15. Compliance with Laws and Regulations........ A-7
Section 2.16. Brokerage................................... A-7
Section 2.17. No Undisclosed Liabilities.................. A-7
Section 2.18. Statements True and Correct................. A-7
Section 2.19. Commitments and Contracts................... A-7
Section 2.20. Material Interest of Certain Persons........ A-8
Section 2.21. Conduct to Date............................. A-8
Section 2.22. Irrevocable Proxies......................... A-9
Section 2.23. Accounts Receivable......................... A-9
Section 2.24. Minute Books................................ A-9
ARTICLE IIA -- ADDITIONAL REPRESENTATIONS AND WARRANTIES OF
THE PRINCIPAL STOCKHOLDERS
Section 2A.1. Ownership of Inotek Common.................. A-9
Section 2A.2. Authority................................... A-9
Section 2A.3. No Breach or Violation...................... A-9
Section 2A.4. Consents.................................... A-9
ARTICLE III -- REPRESENTATIONS AND WARRANTIES OF DAVIS
Section 3.01. Organization................................ A-10
Section 3.02. Authorization............................... A-10
Section 3.03. Litigation.................................. A-10
Section 3.04. Statements True and Correct................. A-10
Section 3.05. Availability of Resources................... A-10
ARTICLE IV -- AGREEMENTS OF INOTEK
Section 4.01. Business in Ordinary Course................. A-10

A-i
29

PAGE
----

Section 4.02. Breaches.................................... A-12
Section 4.03. Written Consents; Information Statement..... A-12
Section 4.04. Consummation of Agreement................... A-12
Section 4.05. Access to Information....................... A-13
Section 4.06. Consents of Third Parties................... A-13
Section 4.07. Subsequent Financial Statements............. A-13
ARTICLE V -- AGREEMENTS OF DAVIS
Section 5.01. Conduct of Business......................... A-13
Section 5.02. Breaches.................................... A-13
Section 5.03. Consummation of Agreement................... A-13
Section 5.04. Consents of Third Parties................... A-13
Section 5.05. Obtaining of Financing...................... A-13
ARTICLE VI -- CONDITIONS PRECEDENT TO THE MERGER
Section 6.01. Conditions to the Obligations of Davis...... A-14
Section 6.02. Conditions to the Obligations of Inotek..... A-14
ARTICLE VII -- TERMINATION
Section 7.01. Mutual Agreement............................ A-15
Section 7.02. Breach of Agreements........................ A-15
Section 7.03. Failure of Conditions....................... A-15
Section 7.04. Unilateral Termination...................... A-15
Section 7.05. Effect of Termination....................... A-15
ARTICLE VIII -- GENERAL PROVISIONS
Section 8.01. Confidential Information.................... A-15
Section 8.02. Publicity................................... A-16
Section 8.03. Return of Documents......................... A-16
Section 8.04. Notices..................................... A-16
Section 8.05. Survival of Representations, Warranties and
Agreements............................................. A-16
Section 8.06. Costs and Expenses.......................... A-17
Section 8.07. Entire Agreement............................ A-17
Section 8.08. Headings and Captions....................... A-17
Section 8.09. Waiver, Amendment or Modification........... A-17
Section 8.10. Rules of Construction....................... A-17
Section 8.11. Counterparts................................ A-17
Section 8.12. Successors and Assigns...................... A-17
Section 8.13. Governing Law............................... A-17
Signatures................................................ A-18

A-ii
30

AGREEMENT AND PLAN OF MERGER

This Agreement and Plan of Merger, dated as of May 15, 2001, is by and
among Davis Instruments, a Maryland limited liability company ("Davis"), INOTEK
Technologies Corp., a Delaware corporation ("Inotek") and Neal E. Young, David
L. White and Dennis W. Stone (the "Principal Stockholders"). This Agreement and
Plan of Merger is hereinafter referred to as the "Agreement."

In consideration of the mutual representations, warranties, agreements and
covenants contained herein, Davis, Inotek and the Principal Stockholders hereby
agree as follows:

ARTICLE I

TERMS OF THE MERGER & CLOSING; EXCHANGE OF SHARES

SECTION 1.01. The Merger. Davis will organize an interim subsidiary
("Newco") and, subject to the satisfaction or waiver of the conditions set forth
in Article VI of this Agreement, Davis will cause Newco to merge with and into
Inotek (the "Merger") pursuant to applicable corporate law ("Corporate Law"), in
a merger in which Inotek will be the surviving corporation.

SECTION 1.02. Effects of the Merger. (a) The Merger shall have all of the
effects provided by Corporate Law and this Agreement, and the separate corporate
existence of Newco shall cease on consummation of the Merger and be combined in
Inotek.

(b) The Certificate of Incorporation of Inotek from and after the Effective
Time shall be amended as set forth on Exhibit A attached hereto.

(c) The Bylaws of Inotek from and after the Effective Time shall be the
same as the Bylaws of Newco immediately prior to the Effective Time, except for
the corporate name which shall be "INOTEK Technologies Corp."

(d) The directors and officers of Newco immediately prior to the Effective
Time shall, without the necessity of any further corporate action, become the
directors and officers of Inotek from and after the Effective Time.

SECTION 1.03. Conversion of Shares. (a) At the Effective Time, subject to
the terms of this Agreement and the Escrow Agreement (as defined in Section
1.06(b)(iii), each share of common stock, $0.01 par value, of Inotek ("Inotek
Common") issued and outstanding immediately prior to the Effective Time shall be
converted into the right to receive $0.65 (the "Common Share Merger Price");
provided, however, that shares of Inotek Common held in the treasury of Inotek
or by any direct or indirect subsidiary of Inotek immediately prior to the
Effective Time shall be canceled.

(b) The stock transfer books of Inotek shall be closed, and no share
transfers will be permitted after the Effective Time. At the Effective Time, by
virtue of the Merger and without any action on the part of the holders thereof,
all of the shares of Inotek Common shall cease to be outstanding and be
canceled.

(c) If holders of Inotek Common are entitled to require appraisal of their
shares under applicable Corporate Law, shares held by a dissenting holder who
has perfected the right to obtain an appraisal of his shares shall not be
converted as described in this Section 1.03, but from and after the Effective
Time shall represent only the right to receive such consideration as may be
determined pursuant to applicable Corporate Law; provided, however, that each
share of Inotek Common outstanding immediately prior to the Effective Time and
held by a dissenting holder who after the Effective Time shall withdraw his
demand for appraisal or lose his right of appraisal shall thereafter have only
such rights as are provided under applicable Corporate Law.

(d) Any options to purchase shares of Inotek Common ("Inotek Options")
which are not exercised prior to the Effective Time shall be canceled at the
Effective Time.

(e) At the Effective Time, the outstanding shares of common stock of Newco
shall be converted into an equal number of shares of Inotek Common, so that
immediately following the effective time of the Merger,
A-1
31

the number of outstanding shares of Inotek Common shall be equal to the number
of outstanding shares of common stock of Newco immediately prior to the Merger.

SECTION 1.04. The Closing. The closing of the Merger (the "Closing") shall
take place at the offices of legal counsel for Davis or at such other location
as is mutually agreeable to the parties hereto at 10:00 a.m. local time on the
Closing Date described in Section 1.05 of this Agreement.

SECTION 1.05. The Closing Date. The Closing shall take place at a date and
time designated by Davis not later than five (5) business days following the
satisfaction or waiver of the conditions set forth in Sections 6.01 and 6.02, or
on such other date as Davis and Inotek may agree (the "Closing Date"). The
Merger shall be effective at the time specified in Corporate Law (the "Effective
Time").

SECTION 1.06. Actions At Closing. (a) At the Closing, Inotek shall deliver
to Davis:

(i) certified copies of the Certificate of Incorporation and Bylaws of
Inotek;

(ii) a certificate signed by the Chairman of the Board of Directors
and President of Inotek stating that (A) each of the representations and
warranties contained in Article II is true and correct in all material
respects at the time of the Closing with the same force and effect as if
such representations and warranties had been made at the Closing, and (B)
all of the conditions set forth in Section 6.01 have been satisfied or
waived as provided therein;

(iii) a certified copy of resolutions of the Board of Directors of
Inotek and of the stockholders of Inotek, establishing the requisite
approvals under applicable Corporate Law of this Agreement, the Merger and
the other transactions contemplated hereby;

(iv) the complete minute book of Inotek and access to complete stock
transfer records reflecting transfers of Inotek Common prior to the
Effective Time; and

(v) a certificate of Inotek's transfer agent, in form and substance
reasonably satisfactory to Davis, reflecting the capitalization of Inotek
as of the day preceding the Closing Date.

(b) At the Closing, Davis shall deliver to Inotek:

(i) a certificate signed by the President of Davis stating that (A)
each of the representations and warranties contained in Article III is true
and correct in all material respects at the time of the Closing with the
same force and effect as if such representations and warranties had been
made at the Closing, and (B) all of the conditions set forth in Section
6.02 have been satisfied or waived as provided therein;

(ii) a certified copy of resolutions of the Board of Directors of
Davis and Newco and of the stockholder of Newco, establishing the requisite
approvals under applicable Corporate Law of this Agreement, the Merger and
the other transactions contemplated hereby; and

(iii) evidence reasonably satisfactory to Inotek that Davis has
deposited into an escrow account the sum of $257,000.00 pursuant to the
terms of an Escrow Agreement of even date herewith by and among Davis,
Inotek and the Principal Stockholders (the "Escrow Agreement").

SECTION 1.07. Exchange Procedures; Surrender of Certificates. As soon as
reasonably practicable after the Effective Time, Davis shall mail to each record
holder of shares of Inotek Common a letter of transmittal in form reasonably
satisfactory to Inotek (which shall specify that delivery shall be effected, and
risk of loss and title to certificates shall pass, only upon proper delivery of
the certificates to Davis and shall be in such form and have such other
provisions as Davis may reasonably specify) and instructions for use in
effecting the surrender of certificates, and, after deducting the amount to be
deposited in an escrow account pursuant to Section 1.06(b)(iii), Davis shall
promptly pay the appropriate consideration to former holders of Inotek Common
who make proper delivery of certificates or comply with Davis's reasonable
instructions and requirements with respect to any certificate that has been lost
or stolen.

A-2
32

ARTICLE II

REPRESENTATIONS AND WARRANTIES
OF INOTEK AND THE PRINCIPAL STOCKHOLDERS

Inotek and the Principal Stockholders severally, but not jointly, represent
and warrant to Davis as follows:

SECTION 2.01. Organization and Capital Stock; Standing and Authority.

(a) Inotek is a corporation duly incorporated, validly existing and in
good standing under the laws of Delaware and has the power to own all of
its property and assets, to incur all of its liabilities and to carry on
its business as now conducted.

(b) As of the date hereof, the authorized capital stock of Inotek
consists solely of 10,000,000 shares of Inotek Common, of which 4,754,088
are outstanding and 100,000 are held as treasury stock. All of the
outstanding shares of Inotek Common are duly and validly issued, fully paid
and non-assessable. None of the outstanding shares of Inotek Common has
been issued in violation of any preemptive rights.

(c) Except as set forth in Section 2.01(b), and except as disclosed in
Section 2.01(c) of that certain document delivered by Inotek to Davis,
entitled the "Disclosure Schedule" and executed by Inotek and Davis
concurrently with the execution and delivery of this Agreement (the
"Disclosure Schedule"), there are no shares of capital stock or other
equity securities of Inotek issued or outstanding and no outstanding
options, warrants, rights to subscribe for, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into
or exchangeable for, shares of capital stock of Inotek or contracts,
commitments, understandings or arrangements by which it is or may be
obligated to issue additional shares of capital stock.

SECTION 2.02. Authorization; No Defaults. The Board of Directors of Inotek
has by all requisite action approved this Agreement, the Merger and the Proxies
(as defined in Section 2.22), and it has authorized the execution and delivery
of this Agreement and the Proxies on behalf of Inotek by duly authorized
officers and the performance of Inotek's obligations hereunder and thereunder.
Nothing in the Certificate of Incorporation or Bylaws of Inotek or, except as
disclosed in Section 2.02 of the Disclosure Schedule, any other agreement,
instrument, decree, proceeding, law or regulation (except as specifically
referred to in or contemplated by this Agreement) by or to which Inotek is bound
or subject would prohibit or inhibit it from consummating this Agreement and the
Merger on the terms and conditions contained herein. Inotek has duly and validly
executed and delivered this Agreement, which constitutes a legal, valid and
binding obligation of Inotek, enforceable in accordance with its terms. Inotek
is not in default under nor in violation of any provision of its Certificate of
Incorporation or Bylaws, nor is it in default under or in violation of any
promissory note, indenture or any evidence of indebtedness or security therefor,
nor is it in default under or in violation of any material lease, contract or
other material commitment or agreement.

SECTION 2.03. Subsidiaries. Inotek has no direct or indirect subsidiaries,
nor does it own any equity interest in any corporation or other entity.

SECTION 2.04. Financial Information. The audited balance sheets of Inotek
as of May 31, 2000 and related income statements and statements of changes in
shareholders' equity and of cash flows for the three years ended May 31, 2000,
together with the notes thereto, included in Inotek's Annual Report on Form 10-K
for the year ended May 31, 2000 as currently on file with the Securities and
Exchange Commission (the "SEC"); and the unaudited balance sheets of Inotek as
of February 28, 2001 and related income statements and statements of changes in
shareholders' equity and of cash flows for the nine months ended February 28,
2001, together with the notes thereto, included in Inotek's Quarterly Report on
Form 10-Q for the three months ended February 28, 2001 as currently on file with
the SEC (such financial statements and notes collectively referred to herein as
the "Inotek Financial Statements"), have been prepared, except as described in
Note 1 to the February 28, 2001 financial statements, in accordance with
generally accepted accounting principles applied on a consistent basis and
fairly present the financial position and results of operations, changes in
shareholders' equity and cash flows of Inotek as of the dates and for the
periods indicated. The

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internal financial statements of Inotek as of January 31, 2001, which were
provided to Davis in connection with its due diligence examination of Inotek
were prepared in accordance with applicable requirements, consistently applied,
and in reasonable detail accurately reflect the transactions and disposition of
the assets of Inotek for the periods covered by such statements.

SECTION 2.05. Absence of Changes. Since May 31, 2000 there has not been
any material adverse change in the financial condition, the results of
operations or the business of Inotek, nor have there been any events or
transactions having such a material adverse effect which should be disclosed in
order to make the Inotek Financial Statements not misleading.

SECTION 2.06. Regulatory Enforcement Matters. Except as disclosed in
Section 2.06 of the Disclosure Schedule, Inotek is not subject to, nor has it
received any notice or advice that it may become subject to, any order,
agreement, proceeding or other regulatory enforcement action with or by any
federal, state or local governmental agency.

SECTION 2.07. Tax Matters. (a) Except as disclosed in Section 2.15 of the
Disclosure Schedule, Inotek has filed all federal, state, local and foreign
income, franchise, excise, sales, use, real and personal property and other tax
returns required to be filed. All such returns fairly reflect the information
required to be presented therein. All provisions for accrued but unpaid taxes
contained in the Inotek Financial Statements were made in accordance with
generally accepted accounting principles and in the aggregate do not fail to
provide for material tax liabilities.

(b) Inotek has not (i) executed an extension or waiver that is currently in
effect with respect to any statute of limitations on the assessment or
collection of any tax; (ii) entered into any tax sharing or tax allocation
agreement or been a part of a consolidated group filing a consolidated tax
return; (iii) become liable for a tax of any other person or entity pursuant to
Treasury Regulation 1.1502-6 (or any similar provision of state, local or
foreign laws) as a transferee or successor or by contract or otherwise; or (iv)
made any payment, become obligated to make any payment or been party to a
contract or agreement that would obligate it to make any payment that would be
disallowed as a deduction under Section 280G or 162(m) of the Internal Revenue
Code.

(c) There has not been any ownership change of Inotek, as defined in
Section 382(g) of the Internal Revenue Code, that occurred during or after any
taxable period in which Inotek incurred a net operating loss that carries over
to any taxable period ending after 1999.

(d) All material elections with respect to taxes affecting Inotek have been
and will be timely made.

SECTION 2.08. Litigation. Except as disclosed in Section 2.08 of the
Disclosure Schedule, there is no litigation, claim or other proceeding pending
or, to the knowledge of Inotek, threatened against Inotek or to which the
property of Inotek is or would be subject.

SECTION 2.09. Properties, Contracts, Employee Benefit Plans and Other
Agreements. Section 2.09 of the Disclosure Schedule specifically identifies the
following:

(a) all loan and credit agreements, conditional sales contracts and
security agreements relating to obligations or assets of Inotek;

(b) all agreements, loans, contracts, leases, guaranties, letters of
credit, lines of credit or commitments of Inotek not referred to elsewhere
in this Section 2.09 which:

(i) involve payment by Inotek of more than $5,000;

(ii) involve payments based on Inotek's profits;

(iii) relate to the future purchase of goods or services in excess
of the requirements of its respective business at current levels or for
normal operating purposes;

(iv) were not made in the ordinary course of business;

(v) materially affect Inotek's business or financial condition; or

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(vi) require the consent or approval of any third party for the
Merger to be consummated or impose any cost or penalty on Inotek as a
result of the Merger.

(c) all contracts, agreements, plans and arrangements by which any
profit sharing, group insurance, hospitalization, stock option, pension,
retirement, bonus, deferred compensation, stock bonus, stock purchase,
collective bargaining agreements, contracts or arrangements under which
pensions, deferred compensation or other retirement benefits is being paid,
or plans or arrangements established or maintained, sponsored or undertaken
by Inotek for the benefit of officers, directors or employees, including
each trust or other agreement with any custodian or any trustee for funds
held under any such agreement, plan or arrangement, and in respect to any
of them, the latest reports or forms, if any, filed with the Department of
Labor and Pension Benefit Guaranty Corporation under ERISA (as defined
below), any current financial or actuarial reports and any currently
effective IRS private ruling or determination letters obtained by or for
the benefit of Inotek;

(d) all leases, subleases or licenses with respect to real or personal
property, whether as lessor, lessee, licensor or licensee, with annual
rental or other payments due thereunder in excess of $25,000;

(e) all agreements for the employment, retention or engagement, or
with respect to the severance, of any officer, employee, agent, consultant
or other person or entity which by its terms is not terminable by Inotek on
thirty (30) days written notice or less without any payment by reason of
such termination; and

(f) the name and annual compensation of each employee of Inotek as of
March 31, 2001 and the name and a description of the annual compensation
and all other benefits paid in the calendar year 2000 and payable as of
March 31, 2001 to each director of Inotek.

Copies of each document, plan or contract identified in Section 2.09 of the
Disclosure Schedule are appended to the Disclosure Schedule and are hereby
incorporated therein.

SECTION 2.10. Reports. Inotek has filed all reports and statements,
together with any amendments required to be made with respect thereto, required
to be filed with the SEC and all other governmental authorities with
jurisdiction over Inotek. Except as set forth in Section 2.10 of the Disclosure
Schedule, as of the dates indicated thereon, each of such reports and documents,
including any financial statements, exhibits and schedules thereto, complied in
all material respects with the relevant statutes, rules and regulations enforced
or promulgated by the authority with which they were filed, and did not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.

SECTION 2.11. Investment Portfolio. All United States Treasury securities
and other investment securities held by Inotek, as reflected in the latest
balance sheet of Inotek included in the Inotek Financial Statements and in its
accounting books and records, are carried in accordance with generally accepted
accounting principles.

SECTION 2.12. Employee Matters and ERISA. (a) Except as disclosed in
Section 2.12 (a) of the Disclosure Schedule, Inotek has not entered into any
collective bargaining agreement with any labor organization with respect to any
group of employees, and there is no present effort nor existing proposal to
attempt to unionize any group of employees of Inotek.

(b)(i) Inotek has been and is in material compliance with all applicable
laws respecting employment and employment practices, terms and conditions of
employment and wages and hours, including, without limitation, any laws
respecting employment discrimination and occupational safety and health
requirements, and Inotek is not engaged in any unfair labor practice; (ii) there
is no unfair labor practice complaint against Inotek pending or, to the
knowledge of Inotek, threatened before the National Labor Relations Board; (iii)
there is no labor dispute, strike, slowdown or stoppage actually pending or
threatened against or directly affecting Inotek; and (iv) Inotek has not
experienced any work stoppage or other material labor difficulty during the past
five years.

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(c) Except as disclosed in Sections 2.01(c) and 2.12(c) of the Disclosure
Schedule, Inotek does not maintain, contribute to or participate in or have any
liability under any employee benefit plans, as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or any
nonqualified employee benefit plans or deferred compensation, bonus, stock or
incentive plans, or other employee benefit or fringe benefit programs for the
benefit of former or current employees (collectively, the "Employee Plans"). No
present or former employee of Inotek has been charged with breaching nor has
breached a fiduciary duty under any Employee Plan. Inotek does not participate
in, nor has it in the past five years participated in, nor has it any present or
future obligation or liability under, any multiemployer plan (as defined at
Section 3(37) of ERISA). Except as separately disclosed in Section 2.12(c) of
the Disclosure Schedule, Inotek does not maintain, contribute to, or participate
in any plan that provides health, major medical, disability, life insurance,
severance, salary continuation or other benefits to one or more former employees
or consultants.

(d) All liabilities of the Employee Plans have been funded on the basis of
consistent methods in accordance with sound actuarial assumptions and practices,
and no Employee Plan, at the end of any plan year, or at February 28, 2001 had
an accumulated funding deficiency. No actuarial assumptions have been changed
since the last written report of actuaries on the Employee Plans. All insurance
premiums (including premiums to the Pension Benefit Guaranty Corporation) have
been paid in full, subject only to normal retrospective adjustments in the
ordinary course. Except as reflected in the Inotek Financial Statements, Inotek
has no contingent or actual liabilities under Title IV of ERISA. No accumulated
funding deficiency (within the meaning of Section 302 of ERISA or Section 412 of
the Internal Revenue Code of 1986, as amended (the "Code")) has been incurred
with respect to any Employee Plan, whether or not waived. No reportable event
(as defined in Section 4043 of ERISA) has occurred with respect to any Employee
Plan as to which a notice would be required to be filed with the Pension Benefit
Guaranty Corporation. No claim is pending, threatened or imminent with respect
to any Employee Plan (other than a routine claim for benefits for which plan
administrative review procedures have not been exhausted) for which Inotek would
be liable, except as is reflected in the Inotek Financial Statements. Inotek has
no liability for excise taxes under Sections 4971, 4975, 4976, 4977, 4979 or
4980B of the Code or for a fine under Section 502 of ERISA with respect to any
Employee Plan. All Employee Plans have in all material respects been operated,
administered and maintained in accordance with the terms thereof and in
compliance with the requirements of all applicable laws, including, without
limitation, ERISA.

SECTION 2.13. Title to Properties; Licenses; Insurance. (a) Inotek does
not own any interest in any real property;

(b) all leasehold interests for real property and any material personal
property used by Inotek in its business are held pursuant to lease agreements
which are valid and enforceable in accordance with their terms;

(c) to the best of Inotek's knowledge, all real property occupied or used
by Inotek complies in all material respects with all applicable zoning
requirements and other laws and regulations relating thereto, and there are no
condemnation proceedings pending or threatened with respect to any of such
properties;

(d) Inotek has valid title or other ownership rights under licenses to all
material intangible personal or intellectual property used by Inotek in its
business, free and clear of any material claim, defense or right of any other
person or entity, subject only to rights of the licensors pursuant to applicable
license agreements, which rights do not materially and adversely interfere with
the use of such property; and

(e) all material insurable properties owned or held by Inotek are
adequately insured by financially sound and reputable insurers in such amounts
and against fire, earthquake and other risks insured against by extended
coverage and public liability insurance, in amounts and on terms customary with
companies of similar size.

SECTION 2.14. Environmental Matters. As used in this Agreement,
"Environmental Laws" means all local, state and federal environmental, health
and safety laws and regulations in all jurisdictions in which Inotek has done
business or owned, leased or operated property, including, without limitation,
the Federal Resource Conservation and Recovery Act, the Federal Comprehensive
Environmental Response, Compensa-

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tion and Liability Act, the Federal Clean Water Act, the Federal Clean Air Act,
and the Federal Occupational Safety and Health Act.

To the best of Inotek's knowledge, neither the conduct nor operation of
Inotek nor any condition of any property presently or previously owned, leased
or operated in any capacity by Inotek violates or violated any Environmental
Law, and no condition or event has occurred with respect to any property that,
with notice or the passage of time, or both, would constitute a violation
material to the business of Inotek of any Environmental Law or obligate (or
potentially obligate) Inotek to remedy, stabilize, neutralize or otherwise alter
the environmental condition of any property. Inotek has not received notice from
any person or entity that Inotek, or the operation or condition of any property
ever owned, leased or operated in any capacity by Inotek, are or were in
violation of any Environmental Law, or that Inotek is responsible (or
potentially responsible) for remedying, or the cleanup of, any pollutants,
contaminants, or hazardous or toxic wastes, substances or materials at, on or
beneath any such property.

SECTION 2.15. Compliance with Laws and Regulations. Except as disclosed in
Section 2.15 of the Disclosure Schedule, Inotek has all licenses, franchises,
permits and other governmental authorizations that are legally required to
enable it to conduct its business, is qualified to conduct business in every
jurisdiction in which such qualification is required and is in compliance in all
material respects with all applicable laws, ordinances and regulations.

SECTION 2.16. Brokerage. Except for fees payable by Inotek to Sanders
Morris Harris Inc., there are no existing claims or agreements for brokerage
commissions, investment banking fees, financial advisory fees, finders' fees or
similar compensation payable by Inotek in connection with the transactions
contemplated by this Agreement.

SECTION 2.17. No Undisclosed Liabilities. Inotek does not have any
material liability, whether known or unknown, asserted or unasserted, absolute
or contingent, accrued or unaccrued, liquidated or unliquidated, and whether due
or to become due (and there is no past or present fact, situation, circumstance,
condition or other basis for any present or future action, suit or proceeding,
hearing, charge, complaint, claim or demand against Inotek giving rise to any
such liability), except (i) liabilities reflected in the Inotek Financial
Statements,(ii) liabilities of the same type incurred in the ordinary course of
business since February 28, 2001, and (iii) liabilities described in Section
4.01(f)(i)(A), (B) and (C) hereof.

SECTION 2.18. Statements True and Correct. None of the information
supplied or to be supplied by Inotek for inclusion in any document to be filed
with the SEC or any regulatory authority in connection with the transactions
contemplated hereby, at the respective times such documents are filed, and, in
the case of the Information Statement (as defined in Section 4.03), when mailed
to the stockholders of Inotek, will be false or misleading with respect to any
material fact, omit to state any material fact necessary in order to make the
statements therein not misleading or omit to state any material fact required to
be stated in order to correct any statement in any earlier communication. All
documents that Inotek is responsible for filing with the SEC in connection with
the transactions contemplated hereby will comply in all material respects with
the provisions of applicable law and the rules and regulations thereunder.

SECTION 2.19. Commitments and Contracts. Except as disclosed in Sections
2.09 and 2.19 of the Disclosure Schedule (and with a true and correct copy of
the document or other item referred to being attached as an exhibit to the
Disclosure Schedule), Inotek is not a party or subject to any of the following
(whether written or oral, express or implied):

(i) any agreement, arrangement or commitment not made in the ordinary
course of business;

(ii) any agreement, indenture or other instrument not reflected in the
Inotek Financial Statements relating to the borrowing of money by Inotek or
the guarantee by Inotek of any obligation (except trade payables or
instruments related to transactions entered into in the ordinary course of
business, in each case properly reflected in the appropriate books and
records of Inotek); or

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(iii) any contract containing covenants which limit Inotek's right or
ability to compete in any line of business or with any person or containing
any restriction of the geographical area in which, or method by which,
Inotek may carry on its business.

SECTION 2.20. Material Interest of Certain Persons. (a) No officer or
director of Inotek or any "associate" (as such term is defined in Rule 14a-1
under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) of
any such officer or director has any material interest in any material contract
or property (real or personal, tangible or intangible), used in or pertaining to
the business of Inotek.

(b) There are no outstanding loans from Inotek to any present officer,
director, employee or any associate or related interest of any person referred
to in subsection (a).

SECTION 2.21. Conduct to Date. From and after May 31, 2000 through the
date of this Agreement, except for entering into this Agreement and performing
its obligations hereunder, and except as disclosed in Section 2.21 of the
Disclosure Schedule, Inotek has not done the following:

(i) failed to conduct its business in the ordinary and usual course
consistent with past practices;

(ii) issued, sold, granted, conferred or awarded any common or other
stock, or any corporate debt securities properly classified under generally
accepted accounting principles applied on a consistent basis as long-term
debt;

(iii) effected any stock split or adjusted, combined, reclassified or
otherwise changed its capitalization;

(iv) declared, set aside or paid any cash or stock dividend or other
distribution in respect of its capital stock, or purchased, redeemed,
retired, repurchased, or exchanged, or otherwise directly or indirectly
acquired or disposed of any of its capital stock;

(v) incurred any material obligation or liability (absolute or
contingent), except as contemplated by Section 4.01(f)(i)(A), (B) and (C)
hereof and normal trade or business obligations or liabilities incurred in
the ordinary course of business, or subjected to lien any of its assets or
properties other than in the ordinary course of business consistent with
past practice and as properly reflected in Inotek's books and records;

(vi) discharged or satisfied any material lien or paid any material
obligation or liability (absolute or contingent), other than in accordance
with its terms in the ordinary course of business, except as contemplated
by Section 4.01(f)(i)(A), (B) and (C) hereof;

(vii) sold, assigned, transferred, leased, exchanged, or otherwise
disposed of any of its properties or assets other than for a fair
consideration in the ordinary course of business;

(viii) except as required by contract, (A) increased the rate of
compensation of, or paid any bonus to, any of its directors, officers, or
other employees, except merit or promotion increases in accordance with
existing policy, (B) except as contemplated by Section 4.01(f)(i)(C)
hereof, entered into any new, or amended or supplemented any existing,
employment, management, consulting, deferred compensation, severance or
other similar contract, (C) entered into, terminated or substantially
modified any of the Employee Plans or (D) except as contemplated by Section
4.01(f)(i)(C) hereof, agreed to do any of the foregoing;

(ix) suffered any material damage, destruction or loss, whether as the
result of fire, explosion, earthquake, accident, casualty, labor trouble,
taking of property by any governmental authority, flood, windstorm,
embargo, riot, act of God, act of war or other casualty or event, whether
or not covered by insurance;

(x) canceled or compromised any debt, except for debts charged off or
compromised in accordance with past practice;

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(xi) entered into any material transaction, contract or commitment
outside the ordinary course of its business; or

(xii) made or guaranteed any loan to any of the Employee Plans.

SECTION 2.22. Irrevocable Proxies. Inotek has delivered to Davis the valid
and binding irrevocable proxies of Neal E. Young, David L. White and Dennis W.
Stone (the "Proxies") in the form of Exhibit 2.22. To the best of Inotek's
knowledge, the Proxies are legal, valid and binding obligations of the persons
granting proxies therein, enforceable in accordance with their terms.

SECTION 2.23. Accounts Receivable. (a) Inotek has made available to Davis
a list of all accounts receivable of Inotek as of January 31, 2001 ("Accounts
Receivable") reflecting a range of days elapsed since invoice.

(b) All Accounts Receivable arose in the ordinary course of business and
are collectible except to the extent of reserves therefor set forth in Inotek's
accounting books and records. Except for a security interest held by Bank One,
Texas, N. A. in connection with Inotek's credit facility in the amount of
$500,000 (none of such amount being outstanding as of the date of this
Agreement), no person has a lien on or security interest in any of such Accounts
Receivable, and no request or agreement for deduction or discount has been made
with respect to any of such Accounts Receivable.

SECTION 2.24. Minute Books. The minutes of Inotek made available to Davis
are the only minutes of Inotek and contain a reasonably accurate summary of all
meetings of the Board of Directors or committees thereof and of its stockholders
for the periods covered by such minutes.

ARTICLE IIA

ADDITIONAL REPRESENTATIONS AND WARRANTIES
OF THE PRINCIPAL STOCKHOLDERS

Each Principal Stockholder, severally but not jointly, further represents
and warrants to Davis as follows:

2A.1 Ownership of Inotek Common. Such Principal Stockholder is the
sole record and beneficial owner of the Inotek Common designated as being
owned by such Principal Stockholder opposite such Principal Stockholder's
name in Section 2A.1 of the Disclosure Schedule. Such Inotek Common
constitutes all of the Inotek Common owned, beneficially or of record, by
such Principal Stockholder, and such Principal Stockholder, except as set
forth in Section 2.09 of the Disclosure Schedule, has no options, warrants
or other rights to acquire Inotek Common.

2A.2 Authority. Such Principal Stockholder has all requisite power
and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by such Principal Stockholder, and constitutes the valid and
binding obligation of such Principal Stockholder, enforceable in accordance
with its terms.

2A.3 No Breach or Violation. The execution and delivery by such
Principal Stockholder of this Agreement do not, and, the consummation of
the transactions contemplated hereby will not, breach or violate (i) any
mortgage, indenture, lease, contract or other agreement or instrument,
permit, concession, franchise or license to which such Principal
Stockholder or any of his properties or assets is subject, or (ii) any
judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to such Principal Stockholder or his properties or assets.

2A.4 Consents. No consent, waiver, approval, order or authorization
of, or registration, declaration or filing with, any governmental entity or
any third party, including a party to any agreement with such Principal
Stockholder (so as not to trigger any conflict), is required by or with
respect to such Principal Stockholder in connection with the execution and
delivery of this Agreement or the consummation of the transactions
contemplated hereby, except for (i) such consents, waivers, approvals,
orders, authorizations,

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registrations, declarations and filings as may be required under applicable
securities laws, and (ii) the filing of a Merger Certificate pursuant to
the Corporate Law.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF DAVIS

Davis represents and warrants to Inotek as follows:

SECTION 3.01. Organization. Davis is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Maryland.

SECTION 3.02. Authorization. The Board of Directors of Davis has by all
requisite action approved this Agreement and the Merger and authorized the
execution hereof on its behalf by duly authorized officers and the performance
of its obligations hereunder. Nothing in the Articles of Organization or
Operating Agreement governing Davis or any other agreement, instrument, decree,
proceeding, law or regulation (except as specifically referred to in this
Agreement) by or to which Davis is bound or subject prohibits or inhibits Davis
from consummating this Agreement and the Merger on the terms and conditions
herein contained. This Agreement has been duly and validly executed and
delivered by Davis and constitutes a legal, valid and binding obligation,
enforceable in accordance with its terms.

SECTION 3.03. Litigation. There is no litigation, claim or other
proceeding pending or, to the best of the knowledge of Davis, threatened that
would prohibit Davis from consummating the transactions contemplated by this
Agreement.

SECTION 3.04. Statements True and Correct. None of the written information
supplied or to be supplied by Davis for inclusion in any document to be filed
with the SEC or any regulatory authority in connection with the transactions
contemplated hereby will, at the respective times such documents are filed and,
in the case of the Information Statement (as defined in Section 4.03), when
mailed to the stockholders of Inotek, be false or misleading with respect to any
material fact, omit to state any material fact necessary in order to make the
statements therein not misleading or omit to state any material fact required to
be stated in order to correct any statement in any earlier communication. All
documents that Davis is responsible for filing with the SEC and any other
regulatory authority in connection with the transactions contemplated hereby
will comply with applicable laws, rules and regulations.

SECTION 3.05. Availability of Resources. Davis has sufficient financial
resources to perform its obligations pursuant to this Agreement, including,
without limitation, the ability to pay the consideration contemplated by Section
1.03 hereof.

ARTICLE IV

AGREEMENTS OF INOTEK

SECTION 4.01. Business in Ordinary Course. Inotek agrees that, except as
contemplated by this Agreement and as necessary to consummate the transactions
contemplated hereby, from the date of this Agreement until the earlier of the
Closing Date or the termination of this Agreement in accordance with its terms:

(a) Inotek shall continue to carry on its business and the discharge
or incurrence of obligations and liabilities only in the usual, regular and
ordinary course of business, as heretofore conducted, and by way of
amplification and not limitation, Inotek will not:

(i) declare or pay any dividend or make any other distribution to
stockholders, whether in cash, stock or other property; or

(ii) issue any common stock or other capital stock or any options,
warrants, or other rights to subscribe for or purchase common stock or
any other capital stock or any securities convertible into

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or exchangeable for any capital stock (except for the issuance of Inotek
Common pursuant to the valid exercise of Inotek Options identified in
Section 2.01(c) of the Disclosure Schedule); or

(iii) directly or indirectly redeem, purchase or otherwise acquire
any Inotek Common or any other capital stock of Inotek; or

(iv) effect a reclassification, recapitalization, split up,
exchange of shares, readjustment or other similar change in or to any
capital stock, or otherwise reorganize or recapitalize; or

(v) change its certificate of incorporation or bylaws, nor enter
into any agreement to merge or consolidate with, or sell a significant
portion of its assets to, any person or entity;

(b) Inotek will not, without the prior written consent of Davis:

(i) grant any increase (other than ordinary and normal increases
consistent with past practices) in the compensation payable or to become
payable to officers or salaried employees, grant any stock options or,
except as required by law, adopt or make any change in any bonus,
insurance, pension, or other Employee Plan, agreement, payment or
arrangement made to, for or with any of such officers or employees;

(ii) borrow or agree to borrow any amount of funds or increase the
amount available under any credit facility, except pursuant to its
existing $500,000.00 line of credit to pay (A) expenses incurred in the
ordinary course of business and (B) expenses in connection with the
negotiation, preparation, execution and delivery of this Agreement and
as necessary to perform its obligations in accordance with the terms
hereof and to consummate the transactions contemplated hereby, or
directly or indirectly guarantee or agree to guarantee any obligations
of others;

(iii) make or commit to make any loan or other extension of credit;

(iv) enter into any agreement, contract or commitment having a term
in excess of three (3) months;

(v) place on any of its assets or properties any mortgage, pledge,
lien, charge, or other encumbrance;

(vi) cancel or accelerate any material indebtedness owing to Inotek
or any claim which Inotek may possess, or waive any material rights of
substantial value; (viii) sell or otherwise dispose of any real property
or any material amount of any tangible or intangible personal property,
other than properties acquired in foreclosure or otherwise in the
ordinary collection of indebtedness;

(ix) commit any act or fail to do any act which will cause a breach
of any agreement, contract or commitment and which will have a material
adverse effect on the business, financial condition or results of
operations of Inotek;

(x) violate any law, statute, rule, governmental regulation or
order, which violation will have a material adverse effect on the
business, financial condition, or results of operations of Inotek; or

(xi) purchase any real or personal property or make any other
capital expenditure where the amount paid or committed therefor is in
excess of $5,000;

(c) Inotek shall not, without the prior written consent of Davis,
engage in any transaction or take any action that would render untrue in
any material respect any of the representations and warranties of Inotek
contained in Article II hereof, if such representations and warranties were
given immediately following such transaction or action;

(d) Inotek shall promptly notify Davis of the occurrence of any matter
or event known to and directly involving Inotek that is materially adverse
to the business, operations, properties, assets, or condition (financial or
otherwise) of Inotek;

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(e) Inotek shall not solicit or encourage, or hold discussions or
negotiations with or provide information to any person or entity in
connection with any proposal for the acquisition of all or a substantial
portion of the business, assets, shares of Inotek Common or other
securities or assets of Inotek. Inotek shall promptly advise Davis of its
receipt of any such proposal or inquiry and the substance thereof;

(f)(i) Inotek will maintain cash and cash equivalent balances of not
less than $750,000.00, less the following extraordinary expenses actually
incurred by Inotek in connection with the Merger: (A) fees and expenses
charged by Sanders Morris Harris Inc. with respect to the fairness opinion
referred to in Section 6.01(g), in the amounts set forth in Section 4.01(f)
of the Disclosure Schedule; (B) reasonable nonrecurring legal and
accounting fees, printing and filing costs and other similar expenditures
associated with the transaction, not exceeding an aggregate cost of
$75,000.00 or such greater amount as may be agreed to by Davis; and (C) a
severance payment to be made by Inotek to Dennis Stone in accordance with
the letter dated May 25, 2000 included in Section 2.09 of the Disclosure
Schedule. In determining compliance with this provision, to the extent that
holders of Inotek Options (other than Dennis Stone) exercise any of such
options prior to the Closing on a "net" or "cashless" basis (i.e., upon
exercise, the optionee delivers to Inotek in payment of the exercise price
that number of shares of Inotek common that, when multiplied by the current
market value of the Inotek Common, equal the aggregate exercise price),
thereby reducing the aggregate cash payments required to be made by Davis
in payment of the Common Share Merger Price, an amount equal to the number
of Inotek Common shares received by Inotek upon such exercises of options
multiplied by the Common Share Merger Price shall be added to Inotek's cash
and cash equivalent balances; provided further, that a "net" or "cashless"
exercise by Dennis Stone using the foregoing procedures shall not be given
such effect in calculating Inotek's cash and cash equivalent balances; and

(ii) Inotek will maintain inventory with a value equal to or exceeding
$1,200,000.00, and the value of Inotek's total accounts receivable will
exceed the value of its total accounts payable by $1,000,000.00 or more
(the amounts of inventory, accounts receivable and accounts payable to be
determined in accordance with generally accepted accounting principles,
consistently applied); and

(g) Inotek will use its commercially reasonable best efforts to obtain
and deliver to Davis, at or prior to the Closing, certificates of good
standing from each jurisdiction in which Inotek (i) owns or leases real
property, has employees, sells products or renders services and (ii) is
required to be qualified to do business.

SECTION 4.02. Breaches. Inotek shall, in the event it has knowledge of the
occurrence, or impending or threatened occurrence, of any event or condition
which would cause or constitute a breach (or would have caused or constituted a
breach had such event occurred or been known prior to the date hereof) of any of
its representations or agreements contained or referred to herein, give prompt
written notice thereof to Davis and use its best efforts to prevent or promptly
remedy the same.

SECTION 4.03. Written Consents; Information Statement. Concurrently with
the execution of this Agreement, Inotek has delivered to Davis a true copy of
written consents executed by Neal E. Young, David L. White and Dennis W. Stone
and delivered to Inotek approving the Merger and the other transactions
contemplated by this Agreement. As soon as reasonably practicable and within
applicable time limitations, Inotek shall (i) prepare and file with the SEC an
Information Statement (the "Information Statement") with respect to the Merger
and the other transactions contemplated by this Agreement, (ii) cause such
Information Statement to be mailed to all Inotek stockholders and (iii) perform
all other actions required by Section 14 of the Exchange Act, and the rules and
regulations thereunder. Prior to filing the Information Statement with the SEC,
Inotek shall provide a draft thereof to Davis and its counsel, allow Davis a
reasonable period of time to review and comment on the contents of such draft,
and consider in good faith any comments submitted by Davis.

SECTION 4.04. Consummation of Agreement. Inotek shall perform and fulfill
all conditions and obligations on its part to be performed or fulfilled pursuant
to this Agreement and to effect the Merger in

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accordance with the terms and provisions hereof. Inotek shall furnish to Davis
in a timely manner all information, data and documents reasonably requested by
Davis and shall cooperate fully with Davis in seeking such approvals and in
consummating the transactions contemplated by this Agreement.

SECTION 4.05. Access to Information. Inotek shall permit Davis reasonable
access, in a manner which will avoid undue disruption or interference with its
normal operations, to Inotek's properties. Inotek shall disclose and make
available to Davis all books, documents, papers and records relating to the
assets, stock ownership, properties, operations, obligations and liabilities of
Inotek including, but not limited to, all books of account (including the
general ledger), tax records, minute books of directors' and stockholders'
meetings, organizational documents, material contracts and agreements, loan
files, filings with any regulatory authority, accountants' workpapers (if
available and subject to the respective independent accountants' consent),
litigation files, plans affecting employees, and any other business activities
or prospects in which Davis may have a reasonable and legitimate interest in
furtherance of the transactions contemplated by this Agreement. Davis will hold
any such information which is nonpublic in confidence in accordance with the
provisions of Section 8.01 hereof.

SECTION 4.06. Consents of Third Parties. Inotek shall use its commercially
reasonable best efforts to obtain all consents of third parties necessary or
desirable for the consummation of the transactions contemplated by this
Agreement.

SECTION 4.07. Subsequent Financial Statements. As soon as available after
the date hereof, Inotek shall deliver to Davis monthly unaudited balance sheets
and profit and loss statements of Inotek prepared for its internal use and all
other financial reports or statements submitted to regulatory authorities after
the date hereof (collectively, the "Subsequent Financial Statements"). The
Subsequent Financial Statements shall be prepared on a basis consistent with
past accounting practices, shall fairly present the financial condition and
results of operations for the dates and periods presented and shall not include
any material assets or omit to state any material liabilities, absolute or
contingent, or other facts, which inclusion or omission would render such
financial statements misleading in any material respect.

ARTICLE V

AGREEMENTS OF DAVIS

SECTION 5.01. Conduct of Business. Davis shall not, without the prior
written consent of Inotek, engage in any transaction or take any action that
would render untrue in any material respect any of the representations and
warranties of Davis contained in Article III hereof, if such representations and
warranties were given immediately following such transaction or action. Davis
shall promptly notify Inotek of the occurrence of any matter or event known to
and directly involving Davis that is materially adverse to the ability of Davis
to consummate the transactions contemplated by this Agreement.

SECTION 5.02. Breaches. Davis shall, in the event it has knowledge of the
occurrence, or impending or threatened occurrence, of any event or condition
which would cause or constitute a breach (or would have caused or constituted a
breach had such event occurred or been known prior to the date hereof) of any of
its representations or agreements contained or referred to herein, give prompt
written notice thereof to Inotek and use its best efforts to prevent or promptly
remedy the same.

SECTION 5.03. Consummation of Agreement. Davis shall use its best efforts
to perform and fulfill all conditions and obligations on their parts to be
performed or fulfilled under this Agreement and to effect the Merger in
accordance with the terms and conditions of this Agreement.

SECTION 5.04. Consents of Third Parties. Davis shall use its commercially
reasonable best efforts to obtain all consents of third parties necessary or
desirable for the consummation of the transactions contemplated by this
Agreement.

SECTION 5.05. Obtaining of Financing. Davis shall use its commercially
reasonable best efforts to comply with the terms of any financing, or
commitments therefor, which it intends to use to pay any portion of the required
consideration in the Merger.
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ARTICLE VI

CONDITIONS PRECEDENT TO THE MERGER

6.01 Conditions to the Obligations of Davis. The obligations of Davis to
effect the Merger and the other transactions contemplated by this Agreement
shall be subject to the satisfaction (or waiver by Davis) prior to or on the
Closing Date of the following conditions:

(a) the representations and warranties made by Inotek in this
Agreement shall be true in all material respects on and as of the Closing
Date with the same effect as though such representations and warranties had
been made or given on and as of the Closing Date;

(b) Inotek shall have performed and complied in all material respects
with all of its obligations and agreements required to be performed prior
to the Closing Date;

(c) no temporary restraining order, preliminary or permanent
injunction or other order issued by any court of competent jurisdiction or
other legal restraint or prohibition preventing the consummation of the
Merger shall be in effect, nor shall any proceeding by any regulatory
authority or other person seeking any of the foregoing be pending. There
shall not be any action taken, or any statute, rule, regulation or order
enacted, entered, enforced or deemed applicable to the Merger which makes
the consummation thereof illegal;

(d) all necessary approvals, consents and authorizations required by
law for consummation of the Merger, including the requisite approvals of
the stockholders of Inotek and all legally required regulatory approvals,
shall have been obtained, and all waiting periods required by law shall
have expired;

(e) On or prior to the Closing Date, Davis shall have received all
documents required to be received from Inotek, including without limitation
the consents referred to in Section 4.06, and a legal opinion of counsel to
Inotek dated the Closing Date with respect to the matters listed on Exhibit
6.01(e) attached hereto, all in form and substance reasonably satisfactory
to Davis; and

(f) Inotek shall have received a fairness opinion of Sanders Morris
Harris Inc., financial advisor to Inotek, to the effect that the
transactions contemplated by this Agreement are fair to the stockholders of
Inotek from a financial point of view.

SECTION 6.02. Conditions to the Obligations of Inotek. The obligations of
Inotek to effect the Merger and the other transactions contemplated by this
Agreement shall be subject to the satisfaction (or waiver by Inotek) prior to or
on the Closing Date of the following conditions:

(a) the representations and warranties made by Davis in this Agreement
shall be true in all material respects on and as of the Closing Date with
the same effect as though such representations and warranties had been made
or given on the Closing Date;

(b) Davis shall have performed and complied in all material respects
with all of its obligations and agreements hereunder required to be
performed prior to the Closing Date;

(d) all necessary approvals, consents and authorizations required by
law for consummation of the Merger shall have been obtained, and all
waiting periods required by law shall have expired;

(e) on or prior to the Closing Date, Inotek shall have received all
documents required to be received from Davis and a legal opinion of counsel
to Davis dated the Closing Date with respect to the matters listed on
Exhibit 6.02(e) attached hereto, all in form and substance reasonably
satisfactory to Inotek; and

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ARTICLE VII

TERMINATION

SECTION 7.01. Mutual Agreement. This Agreement may be terminated by the
mutual written agreement of the parties at any time prior to the Closing Date,
regardless of whether approval of this Agreement and the Merger by the
stockholders of Inotek shall have been previously obtained.

SECTION 7.02. Breach of Agreements. In the event that there is a material
breach of any of the representations and warranties or agreements of Davis or
Inotek, which breach is not cured within 15 days after notice to cure such
breach is given to the breaching party by the non-breaching party, then the non-
breaching party, regardless of whether approval of this Agreement and the Merger
by the stockholders of Inotek shall have been previously obtained, may terminate
and cancel this Agreement by providing written notice of such action to the
other party hereto.

SECTION 7.03. Failure of Conditions. In the event that any of the
conditions to the obligations of a party are not satisfied or waived on or prior
to the Closing Date, and if any applicable cure period provided in Section 7.02
hereof has lapsed, then such party may, regardless of whether approval of the
transactions contemplated by this Agreement by the stockholders of Inotek shall
have been previously obtained, terminate and cancel this Agreement by delivery
of written notice of such action to the other party.

SECTION 7.04. Unilateral Termination. If the Closing Date shall not have
occurred on or prior to the day which is 120 days after the date of this
Agreement, then this Agreement may be terminated by any party by giving written
notice to the other party.

SECTION 7.05. Effect of Termination. Each party's right of termination
under this Article VII is in addition to any other rights it may have under this
Agreement or otherwise, and the exercise of a right of termination shall not
constitute an election of remedies. If this Agreement is terminated pursuant to
Section 7.01, 7.02, 7.03 or Section 7.04, all further obligations of the parties
under this Agreement will terminate, except that (i) the obligations in Sections
8.01, 8.03 and 8.06 will survive, and (ii) if this Agreement is terminated by a
party pursuant to Section 7.02 or 7.03 because of a breach of this Agreement by
the other party or because one or more of the conditions to the terminating
party's obligations hereunder has not been satisfied as a result of the other
party's failure to comply with any of its obligations under this Agreement, any
legal remedies to which the parties are entitled will survive such termination.

ARTICLE VIII

GENERAL PROVISIONS

SECTION 8.01 Confidential Information. The parties acknowledge the
confidential and proprietary nature of the "Information" (as herein defined)
which has heretofore been exchanged and which will be received from each other
hereunder and agree to hold and keep the same confidential. Such Information
will include any and all financial, technical, commercial, marketing, customer
or other information concerning the business, operations and affairs of a party
that may be provided to the others, irrespective of the form of the
communications, by such party's employees or agents. Such Information shall not
include information which is or becomes generally available to the public other
than as a result of a disclosure by a party or its representatives in violation
of this Agreement. The parties agree that the Information will be used solely
for the purposes contemplated by this Agreement and that such Information will
not be disclosed to any person other than employees and agents of a party who
are directly involved in implementing the Merger, who shall be informed of the
confidential nature of the Information and directed individually to abide by the
restrictions set forth in this Section 8.01. The Information shall not be used
in any way detrimental to a party, including use directly or indirectly in the
conduct of the other party's business or any business or enterprise in which
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such party may have an interest, now or in the future, and whether or not now in
competition with such other party. Neither Davis nor Inotek will purchase or
sell any security issued by the other party for so long as this Agreement
remains in effect.

SECTION 8.02. Publicity. Davis and Inotek shall cooperate with each other
in the development and distribution of all news releases and other public
disclosures concerning this Agreement and the Merger. No party shall issue any
news release or make any other public disclosure without the prior consent of
the other party, unless such is required by law upon the written advice of
counsel or is in response to published newspaper or other mass media reports
regarding the transactions contemplated hereby, in which latter event the
parties shall consult with each other to the extent practicable regarding such
responsive disclosure.

SECTION 8.03. Return of Documents. Upon termination of this Agreement
without the Merger becoming effective, each party shall deliver to the others
originals and all copies of all Information made available to such party and
will not retain any copies, extracts or other reproductions, in whole or in
part, of such Information.

SECTION 8.04. Notices. Any notice or other communication shall be in
writing and shall be deemed to have been given or made on the date of delivery,
in the case of hand delivery, or three (3) business days after deposit in the
United States Registered Mail, postage prepaid, or upon receipt if transmitted
by facsimile telecopy or any other means, addressed (in any case) as follows:

(a) if to Davis:

Lee D. Rudow, President
Davis Instruments, LLC
4701 Mount Hope Drive
Baltimore, Maryland 21215
Facsimile: (410) 764-8237

with a copy to:

John S. Daniels
Attorney at Law
6440 North Central Expressway, Suite 503
Dallas, Texas 75206
Facsimile: (214) 368-9094

(b) if to Inotek:

INOTEK Technologies Corp.
11212 Indian Trail
Dallas, Texas 75229
Attention: Neal E. Young
Facsimile: (972) 210-1601

with a copy to:

Bruce A. Cheatham, Esq.
Winstead Sechrest & Minick P.C.
5400 Renaissance Tower
1201 Elm Street
Dallas, Texas 75270
Facsimile: (214) 745-5867

or to such other address as any party may from time to time designate by notice
to the others.

SECTION 8.05. Nonsurvival of Representations, Warranties and Agreements.
The representations, warranties and agreements of Davis, Inotek and the
Principal Stockholders contained herein shall terminate at the Effective Time,
except as otherwise provided in the Escrow Agreement with respect to certain
breaches of
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Section 2.04 hereof. The obligations of Davis and the Principal Stockholders in
the Escrow Agreement shall be contingent on the consummation of the Merger and
shall become effective only upon such consummation.

SECTION 8.06. Costs and Expenses. Except as may be otherwise provided
herein, each party shall pay its own costs and expenses incurred in connection
with this Agreement and the matters contemplated hereby, including without
limitation all fees and expenses of attorneys, accountants, brokers, financial
advisors and other professionals. In the event of termination of this Agreement,
the obligation of each party to pay its own expenses will be subject to any
rights of such party arising from a breach of this Agreement by another party.

SECTION 8.07. Entire Agreement. This Agreement, together with the Proxies,
constitutes the entire agreement between the parties and supersedes and cancels
any and all prior discussions, negotiations, undertakings, agreements in
principle and other agreements between the parties relating to the subject
matter hereof.

SECTION 8.08. Headings and Captions. The captions of Articles and Sections
hereof are for convenience only and shall not control or affect the meaning or
construction of any of the provisions of this Agreement.

SECTION 8.09. Waiver, Amendment or Modification. The conditions of this
Agreement which may be waived may only be waived by a written instrument
delivered to the other party. The failure of any party at any time or times to
require performance of any provision hereof shall in no manner affect the right
at a later time to enforce the same. This Agreement may not be amended or
modified except by a written document duly executed by the parties hereto.

SECTION 8.10. Rules of Construction. Unless the context otherwise
requires: (a) a term has the meaning assigned to it; (b) an accounting term not
otherwise defined has the meaning assigned to it in accordance with generally
accepted accounting principles; (c) "or" is not exclusive; and (d) words in the
singular may include the plural and in the plural include the singular.

SECTION 8.11. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which shall
be deemed one and the same instrument.

SECTION 8.13. Governing Law. This Agreement shall be governed by the laws
of the State of Texas.

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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their respective officers thereunto duly authorized, all as of the date first
written above.

DAVIS INSTRUMENTS, LLC

By: /s/ LEE D. RUDOW
----------------------------------
Lee D. Rudow
President

INOTEK TECHNOLOGIES CORP.

By: /s/ NEAL E. YOUNG
----------------------------------
Neal E. Young
Chairman

/s/ NEAL E. YOUNG
------------------------------------
Neal E. Young

/s/ DAVID L. WHITE
------------------------------------
David L. White

/s/ DENNIS W. STONE
------------------------------------
Dennis W. Stone

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APPENDIX B

INDEMNIFICATION AND ESCROW AGREEMENT

This INDEMNIFICATION AND ESCROW AGREEMENT, dated as of May 15, 2001 (the
"Escrow Agreement"), is by and among Davis Instruments, LLC, a Maryland limited
liability company ("Davis"), INOTEK Technologies Corp., a Delaware corporation
("Inotek"), and Neal E. Young, David L. White and Dennis W. Stone (collectively,
the "Indemnifying Persons"). This Escrow Agreement is entered into in connection
with the merger contemplated by the Agreement and Plan of Merger of even date
herewith (the "Merger Agreement") among Davis, Inotek and the Indemnifying
Persons. Capitalized terms used but not defined in this Escrow Agreement shall
have the meanings ascribed to such terms in the Merger Agreement.

A. In accordance with the Merger Agreement, Davis will acquire Inotek
pursuant to a merger of a subsidiary of Davis with and into Inotek, with Inotek
as the surviving corporation.

B. The Indemnifying Persons are holders of approximately 66% of the
outstanding voting stock of Inotek. As a condition of Davis' determination to
enter into and consummate the Merger Agreement, the Indemnifying Persons have
agreed (i) to indemnify certain parties to the extent provided in Section 2
hereof, and (ii) to secure the performance by the Indemnifying Persons of such
obligations by causing the Escrowed Amount (as defined in Section 1 hereof) to
be held back from the consideration otherwise payable to the Indemnifying
Persons at the Closing (in the amounts shown on Exhibit A attached hereto) and
to be held and distributed in accordance with this Escrow Agreement.

NOW, THEREFORE, in consideration of the mutual covenants herein and other
valuable consideration, including the benefits to be derived by Davis and the
Indemnifying Persons as a result of the closing of the Merger, Davis, Inotek and
the Indemnifying Persons hereby agree as follows:

1. Definitions. The following terms shall have the following
meanings:

"Business Day" shall mean any day other than Saturday, Sunday, or any
day which is a bank holiday in Texas.

"Escrowed Amount" shall mean two hundred fifty seven thousand dollars
($257,000.00).

2. Indemnification. Subject to the terms and conditions of this
Escrow Agreement and the Merger Agreement, from and after the Closing Date,
the Indemnifying Persons indemnify and hold harmless Davis and its
officers, directors, employees, agents and subsidiaries (including Inotek)
(collectively, the "Indemnified Persons"), and the Indemnifying Persons
shall reimburse the Indemnified Persons out of the Escrow Fund (as
hereinafter defined) for all losses, liabilities, claims, damages, fines,
penalties and expenses incurred after the Closing by any of the Indemnified
Persons and arising from (i) any breach by Inotek or the Indemnifying
Persons of the representations set forth in Section 2.04 of the Merger
Agreement, but only to the extent that such breach is caused by Inotek's
accounting treatment of any transaction, asset or liability other than in
accordance with generally accepted accounting principles applicable to such
item and the correcting entries relating to such item in Inotek's
accounting records and related financial statements result in an adverse
change in the reported financial condition or results of operations of
Inotek; (ii) costs arising after the Closing in litigation relating to one
or more breaches described in clause (i) above; (iii) costs, expenses,
liabilities or other charges (including but not limited to attorney's fees
and expenses) arising after the Closing directly or indirectly from the
facts involved in the case identified by Inotek in Section 2.08 of the
Disclosure Schedule and incurred by Inotek after the Closing in connection
with a legal proceeding in which Inotek is a party; or (iv) costs,
expenses, fines and penalties, if any, incurred by Inotek after the Closing
as a result of Inotek's conducting business in one or more jurisdictions
prior to the Closing without having taken all actions necessary to be
qualified to do so, without having paid all required fees, taxes, and other
charges imposed by such jurisdiction, or without obtaining all necessary
licenses, franchises, permits or other governmental authorizations legally
required by such jurisdiction (collectively, "Covered Costs"); provided,
however, that, except for any liability arising from a breach of this
Escrow Agreement, in no event shall the Indemnifying Persons' aggregate
liability hereunder exceed the amount of the Escrow Fund; provided further,
that the maximum liability
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of each of the Indemnifying Persons hereunder shall be limited to such
Indemnifying Person's pro rata portion of the Escrow Fund, as reflected on
Exhibit A attached hereto; and provided further, that clause (iv) above
shall not be applicable if, at or prior to the Closing, Inotek shall
deliver to Davis a legal opinion, in form and substance reasonably
satisfactory to Davis, to the effect that Inotek has, as of the Closing
Date, the corporate power and authority to carry on its business in the
jurisdictions in which it does business. Covered Costs shall include,
without limitation, reasonable attorneys' fees and expenses, expenses of
investigation and costs relating to claims against Davis, Inotek or any
other Davis subsidiary or affiliate by any current or former officer,
director or agent of any of such entities for indemnification or
reimbursement or advancement of expenses, to the extent that such claims
are described in clauses (i), (ii), (iii) or (iv) above.

3. The Escrowed Amount; Investment. For the purpose of securing the
obligation of the Indemnifying Persons set forth in Section 2 hereof, the
Escrowed Amount shall be deposited by Davis into an escrow account (the
"Escrow Account") pursuant to Section 1.06(b)(iii) of the Merger Agreement.
The terms governing the Escrow Account shall be mutually acceptable to Neal
E. Young and J. P. Bolduc (who shall act as the exclusive representatives
of the Indemnifying Persons and Davis, respectively, with respect to the
Escrow Account). Messrs. Young and Bolduc are referred to jointly herein as
the "Escrow Representatives." No disbursement may be made from the Escrow
Account except pursuant to the written authorization of both of the Escrow
Representatives or in accordance with Section 5 of this Escrow Agreement.

During the term of this Escrow Agreement, the Escrowed Amount and all
earnings and proceeds thereof, less any payments required to be made
pursuant to this Escrow Agreement (such net amount as of any date being the
"Escrow Fund" as of such date) shall be held in the Escrow Account. During
the term of this Escrow Agreement, no portion of the Escrow Fund shall be
deemed to be the property of either Davis or the Indemnifying Persons. The
Escrow Fund shall be invested and reinvested in any investments approved by
both of the Escrow Representatives.

4. Payment for Indemnification. (a) Should a Covered Cost be incurred
by an Indemnified Person during the term of this Escrow Agreement, Davis
shall deliver a notice to each of the Indemnifying Persons (a "Notice of
Demand," with the date such Notice of Demand is delivered referred to
herein as a "Notice Date"), executed by Davis. A Notice of Demand shall:

(i) demand payment from the Escrow Fund, stating the amount thereof
and the factual basis for the demand, in reasonable detail; and

(ii) certify that Davis has delivered a copy of the Notice of
Demand to each Indemnifying Person.

(b) Except as otherwise provided in Section 5, the Escrow
Representatives shall transfer the amount demanded (the "Escrow Payment")
from the Escrow Fund to an account designated by Davis, on behalf of and in
satisfaction of the rights of the Indemnified Persons, by 10:00 a.m.
Central time on the date fifteen (15) Business Days after the applicable
Notice Date (the "Payment Date").

5. Objection. (a) If, after a Notice of Demand pursuant to Section 4
has been delivered to each of the Indemnifying Persons and prior to the
applicable Payment Date, Neal E. Young (who is hereby empowered to act
exclusively on behalf of the Indemnifying Persons with respect to this
Escrow Agreement) shall deliver a notice to Davis conforming to the
requirements of this Section 5 to the effect that the Indemnifying Persons
object to payment of all or part of such Escrow Payment (an "Objection
Notice,"), the Escrow Representatives shall cause to be paid to Davis out
of the Escrow Account only the undisputed portion of such Escrow Payment on
the Payment Date and shall not pay the disputed portion (the "Disputed
Amount"), except as otherwise provided in this Section 5. Each Objection
Notice shall be executed by Neal E. Young and shall state the amount of the
demanded Escrow Payment which is disputed and the factual basis for such
dispute, in reasonable detail.

(b) If Davis has received an Objection Notice prior to the applicable
Payment Date, the Disputed Amount shall not be paid out of the Escrow
Account to Davis unless (i) the Escrow Representatives shall
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have both executed a certificate (a "Joint Instruction"), or (ii) an
Arbitration Order (as defined below) shall have been entered determining
that all or a portion of the Disputed Amount is a Covered Cost (each, a
"Dispute Resolution Notice"). Upon execution by the Escrow Representatives
of a Joint Instruction or the entry of an Arbitration Order, the Escrow
Representatives shall promptly cause to be paid to Davis out of the Escrow
Fund, on behalf of and in satisfaction of the rights of the Indemnified
Persons, the lesser of (i) the Disputed Amount or, if applicable, that
portion of the Disputed Amount determined to be a Covered Cost in such
Dispute Resolution Notice, plus simple interest thereon from the Notice
Date until the date of such payment at the variable rate of interest per
annum published in the Wall Street Journal (identified therein as the
"Prime Rate") and defined therein as "the base rate on corporate loans
posted by at least 75% of the nation's 30 largest banks," or any successor
to such rate published by the Wall Street Journal, plus any fees, costs and
expenses payable to Davis pursuant to Section 6 hereof, or (ii) the amount
then remaining in the Escrow Fund.

6. Arbitration. In the event an Objection Notice shall have been
delivered to Davis prior to payment of an Escrow Payment and a Joint
Instruction shall not have been executed within 15 Business Days after the
date on which the Objection Notice shall have been delivered to Davis, then
either (i) once the Disputed Amount exceeds $25,000.00, or, (ii) if the
Disputed Amount does not exceed $25,000.00 prior to the first anniversary
of the Effective Time, then on such anniversary or as soon thereafter as
practicable, Davis and the Indemnifying Persons shall submit the subject
dispute to arbitration in accordance with applicable rules and procedures
of the American Arbitration Association then in effect. No such arbitration
shall require Davis or the Indemnifying Persons to provide any deposit or
indemnity bond. The arbitration shall be conducted in Dallas, Texas. Each
party agrees to use its commercially reasonable best efforts to achieve a
resolution of such proceedings as promptly as practicable.

The prevailing party or parties in such a proceeding shall be entitled
to recover from the opposing party or parties attorneys' fees, witness
costs and expenses and other costs and expenses reasonably incurred by such
party in connection with such proceeding. The parties agree that their
agreement to arbitrate, any judgment rendered with respect to an
arbitration award and the obligations of the Escrow Representatives set
forth in this Escrow Agreement shall be specifically enforceable. Upon a
final determination in an arbitration proceeding hereunder, the arbitration
panel shall notify Davis and the Indemnifying Persons thereof (such notice
being the "Arbitration Order"). Jurisdiction of such arbitration panel
shall be exclusive as to disputes between Davis and any of the Indemnifying
Persons with respect to the Escrow Fund, and an Arbitration Order shall be
final and binding upon Davis and all of the Indemnifying Persons. Neither
Davis nor any of the Indemnifying Persons shall have the right to appeal
any determination by an arbitration panel or otherwise to submit a dispute
or controversy regarding the Escrow Fund to a court of law or any other
forum, except that each party shall have the right to institute a civil
action for damages and/or equitable relief based solely upon a failure by
any of the parties to comply with the terms of this Escrow Agreement.

7. Final Release of Funds. The balance in the Escrow Fund, if any,
shall be distributed in the percentages shown on Exhibit A to such accounts
as Neal E. Young may designate in writing, upon the earlier to occur of the
following:

(i) the time at which Davis provides a written notice to Neal E.
Young to the effect that, in the exercise of reasonable business
judgment, Davis is satisfied that no further costs, charges or other
expenses are likely to be asserted for which the Escrow Fund may be
charged pursuant to this Escrow Agreement; or

(ii) twelve months after the Effective Time; provided, however,
that if at the expiration of such period a Notice of Demand has been
made by Davis which remains unpaid and with respect to which a final
resolution has not been made (an "Unsettled Amount"), then the Unsettled
Amount shall be held in the Escrow Account until the Notice of Demand
has been resolved. Any Unsettled Amount, together with any interest
thereon as provided in Section 5(b) hereof, shall be released to

B-3
51

the appropriate party as soon as practicable following a final
resolution in accordance with this Escrow Agreement.

8. Maintenance of Escrow Fund. The Escrow Representatives shall not
permit the removal of any amount from the Escrow Account, except as
permitted under this Escrow Agreement.

9. Cost of Maintaining Escrow Account. Davis shall pay all account
maintenance fees and other charges payable in connection with the
establishment and maintenance of the Escrow Account.

10. Termination. This Escrow Agreement shall terminate on the
delivery of all of the assets in the Escrow Account to Davis and/or the
Indemnifying Persons in accordance with the terms hereof.

11. Waiver and Amendments. No provision of this Escrow Agreement
shall be deemed waived, amended, or modified except by the written
agreement of all of the parties hereto.

12. Notices. Any notice or other communication in connection herewith
shall be in writing and, addition to any other method of delivery utilized
by the party giving the notice, such party shall transmit a copy thereof by
facsimile to each of the other parties for whom a facsimile number is
listed below. If a copy is so transmitted, it shall be deemed to have been
delivered or made on the date of delivery, in the case of hand delivery, or
three (3) business days after deposit in the United States Registered Mail,
postage prepaid, or upon receipt if transmitted by facsimile or any other
means, addressed (in any case) as follows:

(a) if to Davis:

Davis Instruments, LLC
4701 Mount Hope Drive
Baltimore, Maryland 21215
Attention: Mr. Lee D. Rudow, President
Facsimile: (410) 764-8237

with a copy to:

John S. Daniels
Attorney at Law
6440 North Central Expressway, Suite 503
Dallas, Texas 75206
Facsimile: (214) 368-9094

(a) if to Inotek:

INOTEK Technologies Corp.
11212 Indian Trail
Dallas, Texas 75229
Attention: Neal E. Young
Facsimile: (972) 210-1601

with a copy to:

Bruce A. Cheatham, Esq.
Winstead, Sechrest & Minick P.C.
5400 Renaissance Tower
1201 Elm Street
Dallas, Texas 75270
Facsimile: (214) 745-5867

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52

Mr. Neal E. Young
4 Brigade Ct.
Dallas, Texas 75225
Facsimile: (214) 210-1601

Mr. David L. White
4205 Lakeside Drive
Dallas, Texas 75219
Facsimile: (214) 521-4293

Mr. Dennis W. Stone
5908 Lennox Hill
Plano, Texas 75093

or to such other address as any party may from time to time designate by
written notice to the others.

13. Governing Law. This Agreement shall be governed by the laws of
the State of Texas.

14. Severability. If any provision of this Escrow Agreement shall,
for any reason, be adjudicated by any body of competent jurisdiction to be
invalid or unenforceable, such judgment shall not affect, impair or
invalidate the remainder of this Escrow Agreement but shall be confined in
its operation to the provision of this Escrow Agreement directly involved
in the controversy in which such judgment shall have been rendered.

15. Counterparts. This Escrow Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which
shall be deemed one and the same instrument.

16. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors
and assigns. Except for the Indemnified Persons who are not parties to this
Escrow Agreement, there shall be no third party beneficiaries hereof.

IN WITNESS WHEREOF, this Escrow Agreement is duly executed by the
undersigned as of the date first above written.

DAVIS INSTRUMENTS, LLC

By: /s/ LEE D. RUDOW
----------------------------------
Its: President
----------------------------------

INOTEK TECHNOLOGIES CORP.

By: /s/ NEAL E. YOUNG
----------------------------------
Its: Chairman
----------------------------------

/s/ NEAL E. YOUNG
------------------------------------
Neal E. Young

/s/ DAVID L. WHITE
------------------------------------
David L. White

/s/ DENNIS W. STONE
------------------------------------
Dennis W. Stone

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53

EXHIBIT A

INDEMNIFYING PERSON AMOUNT CONTRIBUTED PERCENTAGE OF ESCROW FUND
- ------------------- ------------------ -------------------------

Neal E. Young $111,459 43.4%
David L. White $136,265 53.0%
Dennis W. Stone $9,276 3.6%

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54

APPENDIX C

April 4, 2001

PERSONAL AND CONFIDENTIAL

Special Committee of the Board of Directors
INOTEK Technologies Corporation
11212 Indian Trail
Dallas, TX 75229

Attention: Mr. Neal E. Young
Chairman of the Board

Gentlemen:

You have advised Sanders Morris Harris, Inc. ("SMH") that Davis
Instruments, LLC ("Davis") has proposed to acquire via a merger 100% of the
outstanding common stock of INOTEK Technologies Corporation ("INOTEK") pursuant
to a definitive agreement (the "Agreement"). Under the Agreement, Davis proposes
to pay a price $0.65 per share in cash. The terms of the transaction are set
forth in the January 22, 2001 Letter of Intent from Davis.

You have requested that SMH act as financial advisor to the Board of
Directors of INOTEK and issue an opinion ("Opinion") as to the fairness, from a
financial point of view, to the public, non-control common shareholders of
INOTEK of the terms of the proposed transaction.

SMH, as part of its investment banking business, is frequently engaged in
the valuation of businesses and their securities in connection with mergers and
acquisitions, negotiated underwritings, secondary distributions of listed and
unlisted securities, private placements, and valuations for estate, corporate
and other purposes.

In arriving at our Opinion, we have, among other things:

1. Reviewed a Letter of Intent from Davis dated January 22, 2001;

2. Reviewed INOTEK audited financials and annual reports for the
fiscal years ended May 31, 2000 and May 31, 1999;

3. Reviewed INOTEK unaudited financial statements for the quarters
ended November 30, 2000 and August 31, 2000;

4. Reviewed INOTEK management's budget for the year ending May 31,
2001;
55
INOTEK
April 4, 2001
Page 2

5. Reviewed historical market prices and trading volume for common
stock of INOTEK; and

6. Discussed with management various assets, liabilities and
operations of INOTEK.

With your permission, we have assumed and relied upon, without assuming any
responsibility for verification, the accuracy and completeness of all of the
financial and other information provided to, discussed with, or reviewed by or
for us, or publicly available, for purposes of this Opinion, and have further
relied upon the assurances of management of INOTEK that it is not aware of any
facts that will make such information inaccurate or misleading in any respect
material to our analysis. We have neither made nor obtained any independent
evaluations or appraisals of the assets or liabilities of INOTEK, nor have we
conducted a physical inspection of the properties and facilities of INOTEK. We
have assumed that the financial forecasts provided to us by INOTEK have been
reasonably determined on bases reflecting the best currently available estimates
and judgment of INOTEK's management as to INOTEK's future financial performance.
We have further assumed in our analyses that, in, all material respects, such
forecasts and projections will be realized in the amounts and times indicated
thereby. We express no view as to such forecasts or the assumptions on which
they were based. We have relied as to all legal, accounting and tax matters with
respect to the transaction on legal counsel, accountants and other financial
advisors of INOTEK. We were not authorized to negotiate the terms of the
transaction, and we have based our opinion solely upon the proposed Agreement as
negotiated by others. We were not asked to, and we did not, solicit third party
offers to acquire all or part of INOTEK.

For purposes of rendering our Opinion, we have assumed, in all respects
material to our analysis, that the representations and warranties of each party
contained in the Agreement are true and correct, that each party will perform
all of the covenants and agreements required to be performed by it under the
Agreement and that all conditions to the consummation of the transaction will be
satisfied without waiver thereof. We have also assumed that all material
governmental, regulatory or other consents and approvals will be obtained and
that in the course of obtaining any necessary governmental, regulatory or other
consents and approvals, or any amendments, modifications or waivers to any
documents to which either INOTEK or Davis are party, as contemplated by the
Agreement, no restrictions will be imposed or amendments, modifications or
waivers made that would have any material adverse effect on the consideration to
be received by the public shareholders or the time of such receipt.

Our Opinion is limited to the fairness, from a financial point of view, of
the proposed transaction to INOTEK's public, non-control common shareholders,
and we express no opinion as to the merits of the underlying decision by INOTEK
to engage in the transaction. This Opinion does not constitute a recommendation
to any shareholder of INOTEK as to how such shareholder should vote with respect
to the transaction. Our Opinion necessarily is based upon market, economic and
other conditions as they exist and can be evaluated on the date hereof, and we
assume no responsibility to update or revise our Opinion based upon
circumstances or events occurring after the date hereof.
56
INOTEK
April 4, 2001
Page 3

We have acted as financial advisor to the Board of Directors of INOTEK in
connection with the transaction and will receive a fee for our services,
including for rendering this Opinion. In addition, INOTEK has agreed to
indemnify us for certain liabilities arising out of our engagement. As we have
previously advised you, in the ordinary course of business, we or our affiliates
may trade in INOTEK's common stock for our own accounts and for the accounts of
our customers and, accordingly, may at any time hold a long or short position in
such securities.

Based upon and subject to the foregoing, it is our Opinion that, as of the
date hereof, the financial terms of the proposed transaction are fair to the
public, non-control common shareholders of INOTEK from a financial point of
view.

SANDERS MORRIS HARRIS INC.

By: /s/ G. CLYDE BUCK
----------------------------------
G. Clyde Buck
Managing Director
57

APPENDIX D

SECTION 262 OF THE GENERAL CORPORATION
LAW OF THE STATE OF DELAWARE

SECTION 262 -- APPRAISAL RIGHTS

(a) Any stockholder of a corporation of this State who holds shares of stock
on the date of the making of a demand pursuant to subsection (d) of this
section with respect to such shares, who continuously holds such shares
through the effective date of the merger or consolidation, who has
otherwise complied with subsection (d) of this section and who has neither
voted in favor of the merger or consolidation nor consented thereto in
writing pursuant to sec. 228 of this title shall be entitled to an
appraisal by the Court of Chancery of the fair value of the stockholder's
shares of stock under the circumstances described in subsections (b) and
(c) of this section. As used in this section, the word "stockholder" means
a holder of record of stock in a stock corporation and also a member of
record of a nonstock corporation; the words "stock" and "share" mean and
include what is ordinarily meant by those words and also membership or
membership interest of a member of a nonstock corporation; and the words
"depository receipt" mean a receipt or other instrument issued by a
depository representing an interest in one or more shares, or fractions
thereof, solely of stock of a corporation, which stock is deposited with
the depository.

(b) Appraisal rights shall be available for the shares of any class or series
of stock of a constituent corporation in a merger or consolidation to be
effected pursuant to sec. 251 (other than a merger effected pursuant to
sec. 251(g) of this title), sec. 252, sec. 254, sec. 257, sec. 258, sec.
263 or sec. 264 of this title.

(1) Provided, however, that no appraisal rights under this section
shall be available for the shares of any class or series of stock, which
stock, or depository receipts in respect thereof, at the record date fixed
to determine the stockholders entitled to receive notice of and to vote at
the meeting of stockholders to act upon the agreement of merger or
consolidation, were either (i) listed on a national securities exchange or
designated as a national market system security on an interdealer quotation
system by the National Association of Securities Dealers, Inc. or (ii) held
of record by more than 2,000 holders; and further provided that no
appraisal rights shall be available for any shares of stock of the
constituent corporation surviving a merger if the merger did not require
for its approval the vote of the stockholders of the surviving corporation
as provided in subsection (f) of sec. 251 of this title.

(2) Notwithstanding paragraph (1) of this subsection, appraisal rights
under this section shall be available for the shares of any class or series
of stock of a constituent corporation if the holders thereof are required
by the terms of an agreement of merger or consolidation pursuant to sec.
251, 252, 254, 257, 258, 263 and 264 of this title to accept for such stock
anything except:

a. Shares of stock of the corporation surviving or resulting from
such merger or consolidation, or depository receipts in respect thereof;

b. Shares of stock of any other corporation, or depository receipts
in respect thereof, which shares of stock (or depository receipts in
respect thereof) or depository receipts at the effective date of the
merger or consolidation will be either listed on a national securities
exchange or designated as a national market system security on an
interdealer quotation system by the National Association of Securities
Dealers, Inc. or held of record by more than 2,000 holders;

c. Cash in lieu of fractional shares or fractional depository
receipts described in the foregoing subparagraphs a. and b. of this
paragraph; or

d. Any combination of the shares of stock, depository receipts and
cash in lieu of fractional shares or fractional depository receipts
described in the foregoing subparagraphs a., b. and c. of this
paragraph.

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(3) In the event all of the stock of a subsidiary Delaware corporation
party to a merger effected under sec. 253 of this title is not owned by the
parent corporation immediately prior to the merger, appraisal rights shall
be available for the shares of the subsidiary Delaware corporation.

(c) Any corporation may provide in its certificate of incorporation that
appraisal rights under this section shall be available for the shares of
any class or series of its stock as a result of an amendment to its
certificate of incorporation, any merger or consolidation in which the
corporation is a constituent corporation or the sale of all or
substantially all of the assets of the corporation. If the certificate of
incorporation contains such a provision, the procedures of this section,
including those set forth in subsections (d) and (e) of this section,
shall apply as nearly as is practicable.

(d) Appraisal rights shall be perfected as follows:

(1) If a proposed merger or consolidation for which appraisal rights
are provided under this section is to be submitted for approval at a
meeting of stockholders, the corporation, not less than twenty (20) days
prior to the meeting, shall notify each of its stockholders who was such on
the record date for such meeting with respect to shares for which appraisal
rights are available pursuant to subsections (b) or (c) hereof that
appraisal rights are available for any or all of the shares of the
constituent corporations, and shall include in such notice a copy of this
section. Each stockholder electing to demand the appraisal of such
stockholder's shares shall deliver to the corporation, before the taking of
the vote on the merger or consolidation, a written demand for appraisal of
such stockholder's shares. Such demand will be sufficient if it reasonably
informs the corporation of the identify of the stockholder and that the
stockholder intends thereby to demand the appraisal of such stockholder's
shares. A proxy or vote against the merger or consolidation shall not
constitute such a demand. A stockholder electing to take such action must
do so by a separate written demand as herein provided. Within ten (10) days
after the effective date of such merger or consolidation, the surviving or
resulting corporation shall notify each stockholder of each constituent
corporation who has complied with this subsection and has not voted in
favor of or consented to the merger or consolidation of the date that the
merger or consolidation has become effective; or

(2) If the merger or consolidation was approved pursuant to sec. 228
or sec. 253 of this title, each constituent corporation, either before the
effective date of the merger or consolidation or within ten days
thereafter, shall notify each of the holders of any class or series of
stock of such constituent corporation who are entitled to appraisal rights
of the approval of the merger or consolidation and that appraisal rights
are available for any or all shares of such class or series of stock of
such constituent corporation, and shall include in such notice a copy of
this section; provided that, if the notice is given on or after the
effective date of the merger or consolidation, such notice shall be given
by the surviving or resulting corporation to all such holders of any class
or series of stock of a constituent corporation that are entitled to
appraisal rights. Such notice may, and, if given on or after the effective
date of the merger or consolidation, shall, also notify such stockholders
of the effective date of the merger or consolidation. Any stockholder
entitled to appraisal rights may, within twenty (20) days after the date of
mailing of such notice, demand in writing from the surviving or resulting
corporation the appraisal of such holder's shares. Such demand will be
sufficient if it reasonably informs the corporation of the identify of the
stockholder and that the stockholder intends thereby to demand the
appraisal of such holder's shares. If such notice did not notify
stockholders of the effective date of the merger or consolidation, either
(i) each such constituent corporation shall send a second notice before the
effective date of the merger or consolidation notifying each of the holders
of any class or series of stock of such constituent corporation that are
entitled to appraisal rights of the effective date of the merger or
consolidation or (ii) the surviving or resulting corporation shall send
such a second notice to all such holders on or within ten (10) days after
such effective date; provided, however, that if such second notice is sent
more than twenty (20) days following the sending of the first notice, such
second notice need only be sent to each stockholder who is entitled to
appraisal rights and who has demanded appraisal of such holder's shares in
accordance with this subsection. An affidavit of the secretary or assistant
secretary or of the transfer agent of the corporation that is required to
give either notice that such notice has been give shall, in the absence of
fraud, be prima facie evidence of the facts stated therein. For purposes of
determining the stockholders entitled to receive

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59

either notice, each constituent corporation may fix, in advance, a record
date that shall be not more than ten (10) days prior to the date the notice
is given, provided, that if the notice is given on or after the effective
date of the merger or consolidation, the record date shall be such
effective date. If no record date is fixed and the notice is given prior to
the effective date, the record date shall be the close of business on the
day next preceding the day on which the notice is given.

(e) Within one hundred twenty (120) days after the effective date of the
merger or consolidation, the surviving or resulting corporation or any
stockholder who has complied with subsections (a) and (d) hereof and who
is otherwise entitled to appraisal rights, may file a petition in the
Court of Chancery demanding a determination of the value of the stock of
all such stockholders. Notwithstanding the foregoing, at any time within
sixty (60) days after the effective date of the merger or consolidation,
any stockholder shall have the right to withdraw such stockholder's demand
for appraisal and to accept the terms offered upon the merger or
consolidation, any stockholder who has complied with the requirements of
subsections (a) and (d) hereof, upon written request, shall be entitled to
receive from the corporation surviving the merger or resulting from the
consolidation a statement setting forth the aggregate number of shares not
voted in favor of the merger or consolidation and with respect to which
demands for appraisal have been received and the aggregate number of
holders of such shares. Such written statement shall be mailed to the
stockholder within ten (10) days after such stockholder's written request
for such a statement is received by the surviving or resulting corporation
or within ten (10) days after expiration of the period for delivery of
demands for appraisal under subsection (d) hereof, whichever is later.

(f) Upon the filing of any such petition by a stockholder, service of a copy
thereof shall be made upon the surviving or resulting corporation, which
shall within twenty (20) days after such service file in the office of the
Register in Chancery in which the petition was filed a duly verified list
containing the names and addresses of all stockholders who have demanded
payment for their shares and with whom agreements as to the value of their
shares have not been reached by the surviving or resulting corporation. If
the petition shall be filed by the surviving or resulting corporation, the
petition shall be accompanied by such a duly verified list. The Register
in Chancery, if so ordered by the Court, shall give notice of the time and
place fixed for the hearing of such petition by registered or certified
mail to the surviving or resulting corporation and to the stockholders
shown on the list at the addresses therein stated. Such notice shall also
be given by one (1) or more publications at least one (1) week before the
day of the hearing, in a newspaper of general circulation published in the
City of Wilmington, Delaware or such publication as the Court deems
advisable. The forms of the notices by mail and by publication shall be
approved by the Court, and the costs thereof shall be borne by the
surviving or resulting corporation.

(g) At the hearing on such petition, the Court shall determine the
stockholders who have complied with this section and who have become
entitled to appraisal rights. The Court may require the stockholders who
have demanded an appraisal for their shares and who hold stock represented
by certificates to submit their certificates of stock to the Register in
Chancery for notation thereon of the pendency of the appraisal
proceedings; and if any stockholder fails to comply with such direction,
the Court may dismiss the proceedings as to such stockholder.

(h) After determining the stockholders entitled to an appraisal, the Court
shall appraise the shares, determining their fair value exclusive of any
element of value arising from the accomplishment or expectation of the
merger or consolidation, together with a fair rate of interest, if any, to
be paid upon the amount determined to be the fair value. In determining
such fair value, the Court shall take into account all relevant factors.
In determining the fair rate of interest, the Court may consider all
relevant factors, including the rate of interest which the surviving or
resulting corporation would have had to pay to borrow money during the
pendency of the proceeding. Upon application by the surviving or resulting
corporation or by any stockholder entitled to participate in the appraisal
proceeding, the Court may, in its discretion, permit discovery or other
pretrial proceedings and may proceed to trial upon the appraisal prior to
the final determination of the stockholder entitled to an appraisal. Any
stockholder whose name appears on the list filed by the surviving or
resulting corporation pursuant to subsection (f) of this section and who
has submitted such stockholder's certificates of stock to the Register in
Chancery, if
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60

such is required, may participate fully in all proceedings until it is
finally determined that such stockholder is not entitled to appraisal
rights under this section.

(i) The Court shall direct the payment of the fair value of the shares,
together with interest, if any, by the surviving or resulting corporation
to the stockholders entitled thereto. Interest may be simple or compound,
as the Court may direct. Payment shall be so made to each such
stockholder, in the case of holders of uncertificated stock forthwith, and
the case of holders of shares represented by certificates upon the
surrender to the corporation of the certificates representing such stock.
The Court's decree may be enforced as other decrees in the Court of
Chancery may be enforced, whether such surviving or resulting corporation
be a corporation of this State or any state.

(j) The costs of the proceeding may be determined by the Court and taxed upon
the parties as the Court deems equitable in the circumstances. Upon the
application of a stockholder, the Court may order all or a portion of the
expenses incurred by any stockholder in connection with the appraisal
proceeding, including, without limitation, reasonable attorney's fees and
the expenses of experts, to be charged pro rata against the value of all
the shares entitled to an appraisal.

(k) From and after the effective date of the merger or consolidation, no
stockholder who has demanded appraisal rights as provided in subsection
(d) of this section shall be entitled to vote such stock for any purpose
or to receive other distributions payable to stockholders of record at a
date which is prior to the effective date of the merger or consolidation);
provided, however, that if no petition for an appraisal shall be filed
within the time provided in subsection (e) of this section, or if such
stockholder shall deliver to the surviving or resulting corporation a
written withdrawal of such stockholder's demand for an appraisal and an
acceptance of the merger or consolidation, either within sixty (60) days
after the effective date of the merger or consolidation as provided in
subsection (e) of this section or thereafter with the written approval of
the corporation, then the right of such stockholder to an appraisal shall
cease. Notwithstanding the foregoing, no appraisal proceeding in the Court
of Chancery shall be dismissed as to any stockholder without the approval
of the Court, and such approval may be conditioned upon such terms as the
Court deems just.

(l) The shares of the surviving or resulting corporation to which the shares
of such objecting stockholders would have been converted had they assented
to the merger or consolidation shall have the status of authorized and
unissued shares of the surviving or resulting corporation. (Last amended
by Ch. 339, L. '98, eff. 7-1-98).

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