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EXHIBIT 10.34
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AGREEMENT AND PLAN OF MERGER
BY AND AMONG
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ACCUMED INTERNATIONAL, INC.,
ACCUMED ACQUISITION CORP.
AND
AMPERSAND MEDICAL CORPORATION
DATED AS OF FEBRUARY 7, 2001
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TABLE OF CONTENTS
ARTICLE I THE MERGER AND RELATED MATTERS...................................................2
1.1 Merger...................................................................2
1.2 Merger Effective Time....................................................2
1.3 Conversion of Shares.....................................................2
1.4 Surviving Corporation in the Merger......................................4
1.5 Authorization for Issuance of Ampersand Common Stock; Exchange of
Certificates.............................................................5
1.6 No Fractional Shares.....................................................6
1.7 Stockholder Approvals....................................................7
1.8 AccuMed Stock Options....................................................7
1.9 Registration Statement; Prospectus/Proxy Statement.......................7
1.10 Cooperation; Regulatory Approvals........................................8
1.11 Closing..................................................................9
1.12 Ampersand Loan to AccuMed................................................9
ARTICLE II REPRESENTATIONS AND WARRANTIES.................................................11
2.1 Organization, Good Standing, Authority, Insurance, Etc..................11
2.2 Capitalization..........................................................11
2.3 Ownership of Subsidiaries...............................................12
2.4 Financial Statements and Reports........................................12
2.5 Absence of Changes......................................................13
2.6 Prospectus/Proxy Statement..............................................14
2.7 No Broker's or Finder's Fees............................................14
2.8 Litigation and Other Proceedings........................................14
2.9 Compliance with Law.....................................................14
2.10 Corporate Actions.......................................................15
2.11 Authority...............................................................15
2.12 Employment Arrangements.................................................16
2.13 Employee Benefits.......................................................16
2.14 Information Furnished...................................................17
2.15 Property and Assets.....................................................17
2.16 Agreements and Instruments..............................................18
2.17 Material Contract Default; Contingent Liabilities.......................18
2.18 Tax Matters.............................................................19
2.19 Environmental Matters...................................................19
2.20 Exceptions to Representations and Warranties............................20
ARTICLE III COVENANTS.....................................................................20
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3.1 Investigations; Access and Copies.......................................20
3.2 Conduct of Business.....................................................21
3.3 No Solicitation.........................................................23
3.4 Stockholder Approvals...................................................23
3.5 Accounting and Tax Treatment............................................23
3.6 Publicity...............................................................24
3.7 Cooperation Generally...................................................24
3.8 Additional Financial Statements and Reports.............................24
3.9 Employee Benefits and Agreements........................................24
3.10 Ampersand Lock-Up Agreements............................................25
ARTICLE IV CONDITIONS OF THE MERGER; TERMINATION OF AGREEMENT.............................25
4.1 Conditions to the Obligations of Each Party.............................25
4.2 Conditions to Obligations of AccuMed....................................28
4.3 Conditions to Obligations of Ampersand and Acquisition Sub..............28
4.4 Termination of Agreement................................................30
ARTICLE V TERMINATION OBLIGATIONS.........................................................32
5.1 Breach by AccuMed.......................................................32
5.2 Breach by Ampersand.....................................................32
5.3 Tender or Exchange Offer................................................32
5.4 Non-Fulfillment of AccuMed Obligations..................................32
5.5 Payment of Replacement Note.............................................33
ARTICLE VI CERTAIN POST-MERGER AGREEMENTS.................................................33
6.1 Indemnification.........................................................33
ARTICLE VII GENERAL.......................................................................34
7.1 Amendments..............................................................34
7.2 Confidentiality.........................................................35
7.3 Governing Law...........................................................35
7.4 Notices.................................................................35
7.5 No Assignment...........................................................36
7.6 Headings................................................................36
7.7 Counterparts............................................................36
7.8 Construction and Interpretation.........................................37
7.9 Binding Effect..........................................................37
7.10 Expenses................................................................37
7.11 Third Parties...........................................................37
7.12 Entire Agreement........................................................37
7.13 Waivers.................................................................37
7.14 Partial Invalidity......................................................37
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Schedules:
Schedule I Disclosure Schedules for AccuMed
Schedule II Disclosure Schedules for Ampersand and Acquisition Sub
Exhibits:
Exhibit A Form of AccuMed Voting Agreement
Exhibit B Form of Replacement Note
Exhibit C Budget Statement
Exhibit D List of Employees Whose Employment Agreements Will Be Terminated
Exhibit E Certificate of Designation, Preferences and Rights
of Series A Convertible Preferred Stock of Ampersand
Exhibit F Revised Budget Statement
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER ("Agreement") is made and entered into
as of February 7, 2001 (the "Execution Date"), by and among AccuMed
International, Inc., a Delaware corporation ("AccuMed"), AccuMed Acquisition
Corp., a Delaware corporation ("Acquisition Sub"), and Ampersand Medical
Corporation, a Delaware corporation ("Ampersand").
RECITALS
WHEREAS, as of the execution hereof, AccuMed has (i) 50,000,000
authorized shares of common stock, $.01 par value (the "AccuMed Common Stock"),
of which 5,733,935 shares are currently issued and outstanding, and (ii)
5,000,000 authorized shares of preferred stock, of which 581,339 shares of
Series A Convertible Preferred Stock, $.01 par value (the "AccuMed Preferred
Stock"), are currently issued and outstanding and convertible into 387,562
shares of AccuMed Common Stock; and
WHEREAS, as of the execution hereof, Ampersand has (i) 50,000,000
authorized shares of common stock, $.001 par value (the "Ampersand Common
Stock"), of which 30,056,468 shares are currently issued and outstanding, and
(ii) 5,000,000 authorized shares of preferred stock, none of which are currently
issued and outstanding; and
WHEREAS, as of the execution hereof, Acquisition Sub has 3,000 authorized
shares of common stock, without par value (the "Acquisition Sub Common Stock"),
of which 100 shares are currently issued and outstanding and owned by Ampersand;
and
WHEREAS, the parties hereto desire that AccuMed be merged with and into
Acquisition Sub in accordance with the terms and provisions of this Agreement,
with Acquisition Sub as the surviving corporation (such merger being referred to
hereinafter as the "Merger," and Acquisition Sub, after the Merger, being
sometimes referred to hereinafter as the "Surviving Corporation"); and
WHEREAS, it is intended that for federal income tax purposes the Merger
shall qualify as a reorganization within the meaning of Section 368 of the
Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"), and
this Agreement shall constitute a plan of reorganization pursuant to Section 368
of the Internal Revenue Code; and
WHEREAS, concurrently with the execution and delivery of this Agreement,
and as an inducement to and condition of the willingness of Ampersand and
Acquisition Sub to enter into this Agreement, each of the persons who are
currently officers and/or directors of AccuMed have entered into voting
agreements in the form attached hereto as Exhibit A; and
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WHEREAS, the Board of Directors of each of the parties hereto, at
meetings duly called and held, or pursuant to informal actions taken in
accordance with applicable law, have determined that this Agreement and the
transactions contemplated thereby are in the best interests of the respective
parties, and the Board of Directors of each of AccuMed and Acquisition Sub have
determined to recommend to their respective stockholders that they approve this
Agreement and the transactions contemplated thereby;
NOW, THEREFORE, in consideration of the premises and the representations,
warranties, covenants and agreements hereinafter set forth, the parties hereto
hereby agree as follows:
ARTICLE I
THE MERGER AND RELATED MATTERS
I.1 Merger. Subject to the terms and conditions of this Agreement and
pursuant to applicable law, at the Merger Effective Time (as such term is
hereinafter defined), (i) AccuMed shall be merged with and into Acquisition Sub,
(ii) the separate corporate existence of AccuMed shall cease, and (iii)
Acquisition Sub, which shall immediately change its name to "AccuMed
International, Inc.", as the Surviving Corporation, shall continue to be
governed by the laws of the State of Delaware.
I.2 Merger Effective Time. As soon as practicable after each of the
conditions set forth in Article IV hereof has been satisfied or waived, the
parties hereto will file, or cause to be filed, a certificate of merger with the
appropriate authorities of the State of Delaware for the Merger, which
certificate of merger shall be in the form required by and executed in
accordance with the applicable provisions of law. The Merger shall become
effective at the time and date that the Delaware certificate of merger is filed
with the appropriate authorities of the State of Delaware (the "Merger Effective
Time"), which shall be immediately following the Closing (as such term is
hereinafter defined) and on the same day as the Closing, if practicable, or at
such other date and time as may be agreed to by the parties and specified in the
certificate of merger in accordance with applicable law.
I.3 Conversion of Shares. At the Merger Effective Time, by virtue of the
Merger and without any action on the part of the parties hereto or the holders
of shares of AccuMed Common Stock, AccuMed Preferred Stock, Ampersand Common
Stock or Acquisition Sub Common Stock:
(a) Each share of AccuMed Common Stock issued and outstanding at
the Merger Effective Time (except for Dissenting Shares, if applicable, as
defined in Section 1.3(b) hereof), subject to Sections 1.3 (e) and 1.6 hereof,
shall cease to be outstanding, shall cease to exist and shall be converted into
and become six thousand five hundred fifty-two ten thousandths (.6552) of one
(1) share of Ampersand Common Stock, which ratio (the "Exchange Ratio") shall be
reduced if any AccuMed Derivative Securities (as defined in Section 1.3(c)
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hereof) are exchanged for or converted into shares of AccuMed Common Stock
between the Execution Date and the Merger Effective Time such that four million
(4,000,000) shares of Ampersand Common Stock will be, in the aggregate, (i)
exchanged for the AccuMed Common Stock, and/or (ii) reserved for issuance upon
future conversion of shares of Ampersand Preferred Stock (as such term is
hereinafter defined) into shares of Ampersand Common Stock.
(b) Each share of AccuMed Preferred Stock issued and outstanding
at the Merger Effective Time (except for Dissenting Shares, if applicable),
subject to Sections 1.3(e) and 1.6 hereof shall also cease to be outstanding,
shall also cease to exist and shall be converted into and become one (1) share
of Ampersand Series A Convertible Preferred Stock (the "Ampersand Preferred
Stock"), which shall have the rights and preferences set forth in the
Certificate of Designation, Preferences and Rights of Series A Convertible
Preferred Stock attached hereto as Exhibit E, including, but not limited to, the
right to be converted into shares of Ampersand Common Stock in accordance with
the Exchange Ratio.
(c) Any shares of AccuMed capital stock held by a holder who
dissents from the Merger in accordance with Section 262 of the Delaware General
Corporation Law (the "DGCL") shall be referred to herein as "Dissenting Shares."
Notwithstanding any other provision of this Agreement, any Dissenting Shares
shall not, after the Merger Effective Time, be entitled to vote for any purpose
or receive any dividends or other distributions and shall be entitled only to
such rights as are afforded with respect to Dissenting Shares pursuant to the
DGCL.
(4) Every AccuMed security, except shares of AccuMed Preferred
Stock, issued and outstanding at the Execution Date that is convertible into,
exchangeable for or exerciseable with respect to, shares of AccuMed Common
Stock, including all stock options, warrants and convertible debt instruments
(collectively, the "AccuMed Derivative Securities"), if not converted, exchanged
or exercised prior to the Merger Effective Time, shall, from and after the
Merger Effective Time, be instead convertible into, exchangeable for or
exerciseable with respect to Ampersand Common Stock at the Exchange Ratio upon
payment of the applicable consideration required in connection with such
conversion, exercise or exchange. The foregoing substitutions shall be
undertaken consistent with, and not in a manner that will constitute a
"modification" under, Section 424 of the Internal Revenue Code with respect to
any such stock option that is an "incentive stock option." Furthermore,
Ampersand shall make all filings required under federal and state securities
laws promptly after the Merger Effective Time so as to permit the conversion,
exchange or exercise of any such AccuMed Derivative Securities, and the sale of
the shares of Ampersand Common Stock received by the security holder upon such
conversion, exchange or exercise at and after the Merger Effective Time, and
Ampersand shall continue to make such filings thereafter as may be necessary to
permit the continued conversion, exchange or exercise of such securities and
sale of such shares.
(d) Any AccuMed securities that are owned or held by any party
hereto (other than in a fiduciary capacity) at the Merger Effective Time shall
cease to exist, the certificates for such securities shall as promptly as
practicable be cancelled, such securities shall not be converted
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into or evidence any securities of Ampersand Common Stock, and no shares of
capital stock of Ampersand shall be issued or exchanged therefor.
(e) Each share of Ampersand Common Stock issued and outstanding
immediately before the Merger Effective Time shall remain an outstanding share
of Ampersand Common Stock after the Merger Effective Time, and each share of
Acquisition Sub Common Stock issued and outstanding immediately before the
Merger Effective Time shall remain an outstanding share of Acquisition Sub
Common Stock after the Merger Effective Time.
(f) The holders of certificates evidencing shares of AccuMed
Common Stock, AccuMed Preferred Stock or any other securities of AccuMed shall
thereafter have no rights as stockholders of AccuMed (or Acquisition Sub),
except such rights, if any, as they may have pursuant to the DGCL.
I.4 Surviving Corporation in the Merger.
(a) The name of the Surviving Corporation in the Merger shall be
changed from "AccuMed Acquisition Corp." to "AccuMed International, Inc."
(b) At the Merger Effective Time, subject to an amendment to
change the name of the Surviving Corporation in accordance with the provisions
of Section 1.4(a) hereof, the Certificate of Incorporation of Acquisition Sub as
then in effect shall be the Certificate of Incorporation of the Surviving
Corporation until further amended as provided therein or as otherwise permitted
by the DGCL.
(c) At the Merger Effective Time, the Bylaws of Acquisition Sub as
then in effect shall be the Bylaws of the Surviving Corporation until amended as
provided therein or as otherwise permitted by the DGCL.
(d) The directors and executive officers of Acquisition Sub as of
the Merger Effective Time shall remain as the directors and officers of the
Surviving Corporation following the Merger until such directors or officers are
replaced or additional directors or officers are elected or appointed in
accordance with the provisions of the Certificate of Incorporation and Bylaws of
the Surviving Corporation.
(e) From and after the Merger Effective Time:
(i) Acquisition Sub as the Surviving Corporation shall
possess all assets and property of every description, and every interest in the
assets and property, wherever located, and the rights, privileges, immunities,
powers, franchises and authority, of a public as well as of a private nature, of
each of AccuMed and Acquisition Sub, and all obligations belonging or due to
each of AccuMed and Acquisition Sub, all of which shall vest in the Surviving
Corporation without further act or deed. Title to any real estate or any
interest in real estate vested in AccuMed or Acquisition Sub shall not revert
nor in any way be impaired by reason of the Merger.
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(ii) The Surviving Corporation will be liable for all of
the obligations of each of AccuMed and Acquisition Sub. Any claim existing, or
action or proceeding pending, by or against AccuMed or Acquisition Sub, may be
prosecuted to judgment, with right of appeal, as if the Merger had not taken
place, and the Surviving Corporation may be substituted in its place.
(iii) All of the rights of creditors of each of AccuMed and
Acquisition Sub will be preserved unimpaired, and all of the liens upon the
property of AccuMed and Acquisition Sub will be preserved unimpaired only on the
property affected by such liens immediately before the Merger Effective Time.
I.5 Authorization for Issuance of Ampersand Common Stock; Exchange of
Certificates.
(a) Ampersand shall reserve for issuance a sufficient number of
shares of Ampersand Common Stock for the purpose of issuing such shares to (i)
the former holders of AccuMed Common Stock and AccuMed Preferred Stock, and (ii)
the holders of AccuMed Derivative Securities, all in accordance with this
Article I.
(b) After the Merger Effective Time, holders of certificates
theretofore evidencing outstanding AccuMed securities (other than as provided in
Section 1.3 hereof), upon surrender of such certificates to an exchange agent
appointed by Ampersand (the "Exchange Agent"), shall be entitled to receive
certificates for the Ampersand securities to be substituted for the aforesaid
AccuMed securities in accordance with the provisions of Section 1.3 hereof, and
cash payments in lieu of fractional shares, if any, as provided in Section 1.6
hereof. As soon as practicable after the Merger Effective Time, the Exchange
Agent will send a notice and transmittal form to each record holder of AccuMed
securities at the Merger Effective Time whose securities are being exchanged in
the manner provided herein, advising such holder of the effectiveness of the
Merger and the procedure for surrendering to the Exchange Agent outstanding
certificates formerly evidencing AccuMed securities in exchange for new
certificates evidencing the substituted Ampersand securities. Upon surrender,
each certificate formerly evidencing AccuMed securities shall be cancelled.
(c) Until surrendered as provided in this Section 1.5, all
outstanding certificates of a holder which, before the Merger Effective Time,
evidenced AccuMed securities (other than those evidencing Dissenting Shares and
shares cancelled at the Merger Effective Time pursuant to Section 1.3 hereof)
will be deemed for all corporate purposes to evidence the securities of
Ampersand exchanged for the AccuMed securities formerly evidenced thereby and
the right to receive cash in lieu of any fractional Ampersand Common Stock
interests the holder might otherwise have been entitled to receive hereunder.
However, until such outstanding certificates formerly evidencing AccuMed
securities are so surrendered, no dividend or distribution payable to holders of
record of Ampersand Common Stock shall be paid to any holder of such outstanding
certificates, but upon surrender of such outstanding certificates by such holder
there shall be paid to such holder the amount of any dividends or distribution,
without interest, theretofore paid with respect to such shares of Ampersand
Common Stock, but not paid to such holder, and which dividends or distribution
had a record date occurring on or after the Merger Effective Time and the
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amount of any cash, without interest, payable to such holder in lieu of a
fractional share interest pursuant to Section 1.6 hereof. After the Merger
Effective Time, there shall be no further registration of transfers on the
records of AccuMed of outstanding certificates formerly evidencing AccuMed
securities and, if a certificate formerly evidencing such securities is
presented to any party hereto, it shall be forwarded to the Exchange Agent for
cancellation and exchanged for a certificate evidencing Ampersand securities and
cash for any Ampersand Common Stock interests the holder might otherwise have
been entitled to receive hereunder as herein provided. Following six (6) months
after the Merger Effective Time, the Exchange Agent shall return to Ampersand
any certificates for Ampersand securities and cash remaining in the possession
of the Exchange Agent (together with any dividends in respect thereof) and
thereafter the former holders of AccuMed securities shall look exclusively to
Ampersand for Ampersand securities and cash to which they may be entitled
hereunder.
(d) All securities and cash in lieu of any fractional shares
issued or paid upon the exchange of AccuMed securities in accordance with the
above terms and conditions shall be deemed to have been issued or paid in full
satisfaction of all rights pertaining to such AccuMed securities.
(e) If any new certificate for Ampersand securities is to be
issued in a name other than that in which the certificate surrendered in
exchange therefor is registered, it shall be a condition of the issuance
therefor that the certificate surrendered in exchange shall be properly endorsed
and otherwise in proper form for transfer and that the person requesting such
transfer pay to the Exchange Agent any transfer or other taxes required by
reason of the issuance of a new certificate evidencing Ampersand securities in
any name other than that of the registered holder of the certificate
surrendered, or establish to the satisfaction of the Exchange Agent that such
tax has been paid or is not payable.
(f) In the event that any certificate evidencing AccuMed
securities shall have been lost, stolen or destroyed, the Exchange Agent shall
issue in exchange for such lost, stolen or destroyed certificate, upon the
making of an affidavit of that fact by the holder thereof, such Ampersand
securities and cash for any fractional share interest as may be required
pursuant hereto; provided, however, that Ampersand, the Surviving Corporation or
the Exchange Agent may, in the discretion of any of them, and as a condition
precedent to the issuance or payment thereof, require the owner of such lost,
stolen or destroyed certificate to deliver a bond in such sum as the requesting
party may direct as indemnity against any claim that may be made against
Ampersand, the Surviving Corporation, AccuMed, the Exchange Agent or any other
person with respect to the certificate alleged to have been lost, stolen or
destroyed.
I.6 No Fractional Shares. Notwithstanding any term or provision hereof,
no fractional shares of Ampersand Common Stock, and no certificates or scrip
therefor, or other evidence of ownership thereof, will be issued upon the
conversion of or in exchange for any AccuMed securities; no dividend or
distribution with respect to Ampersand Common Stock shall be payable on or with
respect to any fractional share interest; and no such fractional share interest
shall entitle the owner thereof to vote or to any other rights of a stockholder
of Ampersand or the Surviving Corporation. In lieu of such fractional share
interest, any holder of AccuMed securities
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who would otherwise be entitled to a fractional share of Ampersand Common Stock
will, upon surrender of such holder's certificate or certificates evidencing
AccuMed Common securities outstanding immediately before the Merger Effective
Time, be paid the applicable cash value of such fractional share interest, which
shall be equal to the product of the fraction of the share to which such holder
would otherwise have been entitled and the closing price of Ampersand Common
Stock on the trading day immediately prior to the date of the Merger Effective
Time. For the purpose of determining any such fractional share interest, all
AccuMed securities owned by a holder of AccuMed Common Stock shall be considered
in the aggregate so as to calculate the maximum number of whole shares of
Ampersand Common Stock issuable to such person.
I.7 Stockholder Approvals.
(a) AccuMed shall, at the earliest practicable date, but in no
event later than forty-five (45) days after the effective date of the
Registration Statement (as such term is defined in Section 1.9(a) hereof), hold
a meeting of its stockholders (the "AccuMed Stockholders' Meeting") to submit
this Agreement for adoption by its stockholders. The affirmative vote of that
number of holders of outstanding shares of AccuMed capital stock entitled to
vote on such matter pursuant to the provisions of AccuMed's Certificate of
Incorporation and the DGCL shall be required for such adoption.
(b) Ampersand, as the sole shareholder of Acquisition Sub, shall,
at the earliest practicable date, but in no event later than the date on which
the AccuMed Stockholders' Meeting is held, by informal action in accordance with
the provisions of the DGCL, cause this Agreement to be adopted on behalf of
Acquisition Sub.
I.8 AccuMed Stock Options.
At the Merger Effective Time, by virtue of the Merger and without
any action on the part of any holder of an option, each outstanding option under
the stock option plans of AccuMed, in existence at the Execution Date, whether
vested or unvested, shall continue outstanding as an option to purchase, in
place of the purchase of each share of AccuMed Common Stock, the number of
shares of Ampersand Common Stock as shall be determined by the Exchange Ratio.
I.9 Registration Statement; Prospectus/Proxy Statement.
(a) For the purposes (i) of holding the AccuMed Stockholders'
Meeting, and (ii) of registering with the Securities and Exchange Commission
("SEC") and with applicable state securities authorities the Ampersand Common
Stock to be issued to holders of AccuMed securities in connection with the
Merger, the parties shall cooperate in the preparation of an appropriate
registration statement (such registration statement, together with all and any
amendments and supplements thereto, is referred to herein as the "Registration
Statement"), including the Prospectus /Proxy Statement satisfying all applicable
requirements of applicable state laws, and of the Securities Act of 1933, as
amended (the "Securities Act"), and the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and the rules and regulations thereunder (such
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Prospectus/Proxy Statement, together with any and all amendments or supplements
thereto, is referred to herein as the "Prospectus/Proxy Statement").
(b) AccuMed shall furnish such information concerning AccuMed as
is necessary in order to cause the Prospectus/Proxy Statement, insofar as it
relates to AccuMed, to comply with Section 1.9(a) hereof. AccuMed agrees
promptly to advise Ampersand if at any time before the AccuMed Stockholders'
Meeting any information provided by AccuMed in the Prospectus/Proxy Statement
becomes incorrect or incomplete in any material respect and to provide the
information needed to correct such inaccuracy or omission. AccuMed shall also
furnish Ampersand with such supplemental information as may be necessary in
order to cause such Prospectus/Proxy Statement, insofar as it relates to
AccuMed, to comply with Section 1.9(a) hereof.
(c) Ampersand and Acquisition Sub shall furnish AccuMed with such
information concerning Ampersand as is necessary in order to cause the
Prospectus/Proxy Statement, insofar as it relates to Ampersand and Acquisition
Sub, to comply with Section 1.9(a) hereof. Ampersand and Acquisition Sub agree
promptly to advise AccuMed if at any time before the AccuMed Stockholders'
Meeting any information provided by Ampersand in the Prospectus/Proxy Statement
becomes incorrect or incomplete in any material respect and to provide AccuMed
with the information needed to correct such inaccuracy or omission. Ampersand
and Acquisition Sub shall furnish AccuMed with such supplemental information as
may be necessary in order to cause the Prospectus/Proxy Statement, insofar as it
relates to Ampersand and Acquisition Sub, to comply with Section 1.9(a).
(d) Ampersand shall promptly file with the SEC and applicable
state securities agencies the Registration Statement and all supplements or
amendments thereto that shall become necessary as a result of information
covered by the provisions of Sections 1.9(b) and (c) coming to the attention of
Ampersand. The parties hereto shall use all reasonable efforts to cause the
Registration Statement to become effective under the Securities Act and
applicable state securities laws at the earliest practicable date. AccuMed
authorizes Ampersand to utilize in the Registration Statement the information
provided by AccuMed in regard to itself for the purpose of inclusion in the
Prospectus/Proxy Statement. Ampersand shall advise AccuMed promptly when the
Registration Statement has become effective and of any supplements or amendments
thereto, and Ampersand shall furnish AccuMed with copies of all such documents.
Before the Merger Effective Time or the termination of this Agreement, each
party shall consult with the other with respect to any material (other than the
Prospectus/Proxy Statement) that might constitute a "prospectus" relating to the
Merger within the meaning of the Securities Act.
I.10 Cooperation; Regulatory Approvals. The parties shall cooperate, and
shall cause each of their respective affiliates to cooperate, in the preparation
and submission by them, as promptly as reasonably practicable, of such
applications, petitions and other filings as either of them may reasonably deem
necessary or desirable to or with (i) all regulatory or governmental authorities
having jurisdiction in regard to the Merger, (ii) the holders of shares of
AccuMed securities, and (iii) any other persons, for the purpose of obtaining
any approvals or consents necessary to consummate the Merger and the
transactions contemplated hereby. Each party will
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have the right to review and comment on such applications, petitions and filings
in advance and shall furnish to the other copies thereof promptly after
submission thereof. Any such materials must be acceptable to each of the parties
hereto prior to submission to any regulatory or governmental authority or to any
security holders or other third parties, except to the extent that the parties
hereto may be legally required to proceed prior to obtaining such acceptance of
the other parties hereto. Each party agrees to consult with the others with
respect to obtaining all necessary consents and approvals, and each will keep
the others apprised of the status of matters relating to such approvals and
consents and the consummation of the transactions contemplated hereby. At the
date hereof, none of the parties is aware of any reason that any regulatory
approval required to be obtained by it would not be obtained or would be
obtained subject to conditions that would have or result in a material adverse
effect on any of the parties hereto.
I.11 Closing. If (i) this Agreement has been duly approved by the
respective stockholders of AccuMed and Acquisition Sub, and (ii) all relevant
conditions of this Agreement have been satisfied or waived, a closing (the
"Closing") shall take place as promptly as practicable thereafter at the
principal office of Schwartz, Cooper, Greenberger & Krauss, Chartered, Chicago,
Illinois, or at such other place as the parties agree upon, at which the parties
will exchange certificates, opinions, letters and other documents as required
hereby and will make the filings described in Section 1.2 hereof. Such Closing
will take place within five (5) business days after the satisfaction or waiver
of all conditions and/or obligations precedent to Closing contained in Article
IV hereof, or at such other time as the parties agree upon. The parties shall
use their respective best efforts to cause the Closing to occur on or prior to
May 31, 2001 (the date of such Closing being hereinafter sometimes referred to
as the "Closing Date").
I.12 Ampersand Loan to AccuMed. (a) The parties acknowledge and agree
that upon execution of this Agreement by the parties, and as an additional
inducement to AccuMed's acceptance of this Agreement and its covenant to enter
into and consummate the Merger, Ampersand shall make a loan to AccuMed in the
aggregate principal amount of Eight Hundred Thousand Dollars ($800,000) (the
"Full Loan"), in immediately available funds, of which Three Hundred Thousand
Dollars ($300,000) (the "Interim Loan") was previously advanced by Ampersand to
AccuMed on September 22, 2000, as evidenced by a certain promissory note of said
date issued by AccuMed to Ampersand (the "Initial Note"). The Full Loan shall be
evidenced by AccuMed's delivery to Ampersand, at the Execution Date, of a new
promissory note (the "Replacement Note") substantially in the form of Exhibit B
attached hereto, which instrument shall replace the Initial Note and provide,
among other things, for repayment of the full Eight Hundred Thousand Dollars
($800,000) of principal, with interest at the Prime Rate from time to time
announced by LaSalle Bank National Association, plus two and one-half percent
(22 %). The Replacement Note shall be secured by the grant of a first perfected
security interest in, and lien against, the applicable collateral described in
that certain Security Agreement, dated contemporaneously herewith, by and
between AccuMed, as debtor thereunder, and Ampersand, as secured party
thereunder (the "Security Agreement"). In addition to the foregoing, Ampersand
and AccuMed agreed that the making of the Full Loan to AccuMed would be
specifically conditioned upon the delivery by AccuMed to Ampersand of (i) a
budget and projected cash flow statement (the "Budget Statement") for the six
(6) month period commencing on September 22, 2000, which Budget Statement would
be satisfactory to Ampersand in all respects, in Ampersand's
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sole discretion, and the parties hereto acknowledge and agree that such Budget
Statement has heretofore been delivered by AccuMed to Ampersand, and that such
Budget Statement (a copy of which is attached hereto as Exhibit C) has been
determined by Ampersand to be satisfactory, and (ii) a revised budget (the
"Revised Budget Statement") for the period from and after the Execution Date and
until the anticipated date of closing hereunder which sets forth the use of
proceeds from the Full Loan and any Additional Loans (as such term is
hereinafter defined) by AccuMed during such period and within which AccuMed will
operate and not deviate from without the prior written consent of Ampersand, not
to be unreasonably withheld (a copy of which Revised Budget Statement is
attached hereto as Exhibit F).
(b) Ampersand and AccuMed also hereby agree that (i) if by
February 28, 2001 the Merger and the transactions contemplated hereby have not
been consummated, then on the first day of each month thereafter, through May
31, 2001, Ampersand shall loan to AccuMed an additional Two Hundred Twenty-Five
Thousand Dollars ($225,000) (the "Additional Loans") on the same terms and
conditions as the Full Loan, provided that, simultaneously with the making of
each Additional Loan, (1) the collateral securing the Full Loan under the
Security Agreement shall be increased in accordance with the terms of the
Security Agreement in order to secure such Additional Loan as well, and (2)
AccuMed shall issue and deliver to Ampersand a new promissory note,
substantially in the form of the Replacement Note, evidencing such Additional
Loan; and (ii) if by May 31, 2001, the Merger and the transactions contemplated
hereby have not been consummated, but the parties hereto have mutually agreed to
extend the May 31, 2001 deadline contained in Section 4.4 hereof for effecting
the Merger and consummating such transactions, then the time period in which
Ampersand shall be obligated to make such monthly Additional Loans (in the same
amount and on the same terms and conditions) shall be automatically extended
until the Merger and the transactions contemplated hereby are consummated, or
this Agreement is terminated, whichever comes first; provided, however, that
prior to the making of each Additional Loan during such extended period, AccuMed
and Ampersand shall identify on a schedule or schedules to be attached to the
Security Agreement sufficient additional collateral to secure such Additional
Loans in accordance with the terms and conditions of the Security Agreement.
Each Additional Loan shall be made by wire transfer in immediately available
funds to a bank account specified in writing by AccuMed for such purpose. If the
first day of a month on which an Additional Loan is required to be made
hereunder occurs on a Saturday, Sunday or bank holiday in the State of Illinois,
such Additional Loan shall be made on the immediately preceding date which is
not a Saturday, Sunday or bank holiday. The parties hereto specifically
acknowledge and agree that the failure of Ampersand to make any Additional Loan
within five (5) banking days after the date on which such Additional Loan is
required to be made hereunder shall be an event of default hereunder, entitling
AccuMed to terminate this Agreement immediately upon delivery of written notice
thereof in accordance with the notice provisions of this Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
AccuMed hereby represents and warrants to Ampersand and Acquisition Sub,
and Ampersand and Acquisition Sub hereby jointly and severally represent and
warrant to AccuMed,
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except as disclosed in the Disclosure Schedules delivered by each of the parties
to the others pursuant to Section 2.20 hereof, as follows:
II.1 Organization, Good Standing, Authority, Insurance, Etc. It is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation. Section 2.1 of its Disclosure
Schedules lists each "subsidiary" (the term "subsidiary" when used with respect
to any party means any entity (including, without limitation, any corporation,
partnership, joint venture or other organization, whether incorporated or
unincorporated) which is consolidated with such party for financial reporting
purposes (individually a "Subsidiary" and collectively the "Subsidiaries"). Each
of its Subsidiaries is duly organized, validly existing and in good standing
under the laws of the jurisdiction under which it is organized, as set forth in
Section 2.1 of its Disclosure Schedules. It and each of its Subsidiaries has all
requisite power and authority, and to the extent required by applicable law, is
licensed to own, lease and operate its own properties and conduct its business
as now being conducted. It has delivered or made available to the other parties
a true, complete and correct copy of the articles of incorporation, certificate
of incorporation or other organizing document and of the bylaws, as in effect on
the date of this Agreement, of it and each of its Subsidiaries. Except as set
forth in Section 2.1 of its Disclosure Schedules, it and each of its
Subsidiaries is qualified to do business as a foreign corporation or entity and
is in good standing in each jurisdiction in which qualification is necessary
under applicable law, except to the extent that any failures to so qualify would
not, in the aggregate, have a material adverse effect on it. Its minute books
and those of each of its Subsidiaries contain complete and accurate records of
all meetings and other corporate actions taken by its stockholders and Boards of
Directors (including the committees of such Boards).
II.2 Capitalization.
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(a) Its authorized capital stock and the number of issued and
outstanding shares of its capital stock as of the date hereof are accurately set
forth in the recitals to this Agreement. All outstanding shares of its common
stock are duly authorized, validly issued, fully paid, nonassessable and free of
preemptive rights. Except as set forth in Section 2.2 of its Disclosure
Schedules, as of the date of this Agreement, there are no options, convertible
securities, warrants or other rights (preemptive or otherwise) to purchase or
acquire any of its capital stock from it and no oral or written agreement,
contract, arrangement, understanding, plan or instrument of any kind to which it
or any of its Subsidiaries is subject with respect to the issuance, voting or
sale of issued or unissued shares of its capital stock, and, with respect to any
such securities or rights disclosed by Ampersand, Ampersand represents and
warrants that there are no agreements with respect to such securities or rights,
and no terms or provisions of or relating to such securities or rights, the
effect of which would be to reduce the exercise price at which such securities
or rights may be converted into shares of Ampersand Common Stock as a
consequence of consummating the Merger or the transactions contemplated hereby.
A true and complete copy of each plan and agreement pursuant to which such
options, convertible securities, warrants or other rights have been granted or
issued, as in effect on the date of this Agreement, is included in Section 2.2
of its Disclosure Schedules. Only the holders of its common stock have the right
to vote at meetings of its stockholders on matters to be voted on thereat,
except that the holders of shares of AccuMed Preferred Stock possess the right
to vote on certain matters affecting the rights of such holders. The securities
of AccuMed held in AccuMed's corporate treasury are identified in Section 2.2 of
AccuMed's Disclosure Schedules.
(b) With respect to the shares of Ampersand Common Stock to be
issued in the Merger, Ampersand represents and warrants that such shares when so
issued in accordance with this Agreement will be duly authorized, validly
issued, fully paid and nonassessable and not subject to any preemptive rights.
II.3 Ownership of Subsidiaries. All outstanding shares or ownership
interests of its Subsidiaries are validly issued, fully paid, nonassessable and
owned beneficially and of record by it or one of its Subsidiaries, free and
clear of any lien, claim, charge, restriction, rights of third parties or
encumbrance (collectively, "Encumbrance"), except as set forth in Section 2.3 of
its Disclosure Schedules. There are no options, convertible securities, warrants
or other rights (preemptive or otherwise) to purchase or acquire any capital
stock or ownership interests of any of its Subsidiaries and no contracts to
which it or any of its Subsidiaries is subject with respect to the issuance,
voting or sale of issued or unissued shares of the capital stock or ownership
interests of any of its Subsidiaries. Neither it nor any of its Subsidiaries
owns more than two percent (2%) of the capital stock or other equity securities
(including securities convertible or exchangeable into such securities) of, or
more than two percent (2%) of the aggregate profit participations in, any entity
other than a Subsidiary or as otherwise set forth in Section 2.3 of its
Disclosure Schedules.
II.4 Financial Statements and Reports. With respect to Ampersand and
AccuMed:
(a) No registration statement, offering circular, proxy statement,
schedule or report filed by it or any of its Subsidiaries under various
securities laws and regulations ("Regulatory Reports"), on the date of its
effectiveness in the case of such registration statements,
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or on the date of filing in the case of such reports or schedules, or on the
date of mailing in the case of such proxy statements, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. For the past five
years, it and its Subsidiaries have timely filed all Regulatory Reports required
to be filed by them under various securities laws and regulations, except to the
extent that all failures to so file, in the aggregate, would not have a material
adverse effect on it; and all such documents, as finally amended, complied in
all material respects with applicable requirements of law and, as of their
respective dates or the dates as amended, did not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. Except to the extent
stated therein, all financial statements and schedules included in the
Regulatory Reports (or to be included in Regulatory Reports to be filed after
the date hereof) (i) are or will be (with respect to financial statements with
respect to periods ending after September 30, 2000), in accordance with its
books and records and those of its consolidated Subsidiaries, and (ii) present
(and in the case of financial statements with respect to periods ending after
September 30, 2000, will present) fairly the consolidated financial position and
consolidated results of operations or income, changes in the consolidated
stockholders' equity and cash flows of it and its Subsidiaries as of the dates
and for the periods indicated in accordance with generally accepted accounting
principles applied on a basis consistent with prior periods (except for the
omission of notes to unaudited statements and in the case of unaudited
statements to normal recurring year-end adjustments normal in nature and
amounts). Its audited consolidated financial statements at December 31, 1999 and
for the year then ended and the consolidated financial statements for all
periods thereafter up to the Closing reflect or will reflect, as the case may
be, all liabilities (whether accrued, absolute, contingent, unliquidated or
otherwise, whether due or to become due and regardless of when asserted) as of
such date of it and its Subsidiaries required to be reflected in such financial
statements in accordance with generally accepted accounting principles and
contain or will contain (as the case may be) adequate reserves for losses on
loans and properties acquired in settlement of loans, taxes and all other
material accrued liabilities and for all reasonably anticipated material losses,
if any, as of such date in accordance with generally accepted accounting
principles. There exists no set of circumstances that could reasonably be
expected to result in any liability or obligation material to it or its
Subsidiaries, taken as a whole, except as disclosed in such consolidated
financial statements at December 31, 1999 or for transactions effected or
actions occurring or omitted to be taken after December 31, 1999 (i) in the
ordinary course of business, (ii) as permitted by this Agreement, or (iii) as
disclosed in its Regulatory Reports filed after December 31, 1999 and before the
date of this Agreement. A true and complete copy of such December 31, 1999
financial statements has been delivered by it to the other parties.
(b) To the extent permitted under applicable law, it has delivered
or made available to the other parties each Regulatory Report filed, used or
circulated by it with respect to periods since February 1, 1996 through the date
of this Agreement and will promptly deliver to the other parties each such
Regulatory Report filed, used or circulated after the date hereof, each in the
form (including exhibits and any amendments thereto) filed with the applicable
regulatory or governmental entity (or, if not so filed, in the form used or
circulated).
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II.5 Absence of Changes. With respect to Ampersand and AccuMed:
(a) Since the date on which a Report on Form 10-Q was most
recently filed by or on its behalf with the SEC, there has been no material
adverse change affecting it. There is no occurrence, event or development of any
nature existing or, to its best knowledge, threatened which may reasonably be
expected to have a material adverse effect upon it.
(b) Except as set forth in Section 2.5 of its Disclosure Schedules
or in its Regulatory Reports filed after December 31, 1999 and before the date
of this Agreement, since December 31, 1999, each of it and its Subsidiaries has
owned and operated its respective assets, properties and businesses in the
ordinary course and consistent with past practice.
II.6 Prospectus/Proxy Statement. At the time the Prospectus/Proxy
Statement is mailed to the AccuMed stockholders for the solicitation of proxies
for the approval referred to in Section 1.7(a) hereof and at all times after
such mailings up to and including the time of such approval, such
Prospectus/Proxy Statement (including any supplements thereto), with respect to
all information set forth therein relating to it (including its Subsidiaries)
and its stockholders, its securities, this Agreement, the Merger and the other
transactions contemplated hereby, will:
(a) Comply in all material respects with applicable provisions of
the Securities Act, the Exchange Act and the rules and regulations under such
Acts; and
(b) With respect to itself, and with respect to any information
supplied by it, 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 contained therein, in light of the circumstances under which
it is made, not misleading.
II.7 No Broker's or Finder's Fees. No agent, broker, investment banker,
person or firm acting on behalf or under authority of it or any of its
Subsidiaries is or will be entitled to any broker's or finder's fee or any other
commission or similar fee directly or indirectly in connection with the Merger
or any other transaction contemplated hereby, except as set forth in Section 2.7
of its Disclosure Schedules.
II.8 Litigation and Other Proceedings. Except for matters which would not
have a material adverse effect on it, or except as set forth in Section 2.8 of
its Disclosure Schedules, neither it nor any of its Subsidiaries is a defendant
in, nor is any of its property subject to, any pending or, to its best
knowledge, threatened claim, action, suit, investigation or proceeding or
subject to any judicial order, judgment or decree.
II.9 Compliance with Law. Except as set forth in Section 2.9 of its
Disclosure Schedules:
(a) It and each of its Subsidiaries are in compliance in all
material respects with all laws, regulations, ordinances, rules, judgments,
orders and decrees applicable to their respective operations and businesses, and
neither it nor any of its Subsidiaries has received notice from any
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federal, state or local government or governmental agency of any material
violation of, and does not know of any material violations of, any of the above;
(b) It and each of its Subsidiaries has all permits, licenses,
certificates of authority, orders and approvals of, and have made all filings,
applications and registrations with, all federal, state, local and foreign
governmental or regulatory bodies that are required in order to permit them to
carry on their respective businesses as they are presently being conducted;
(c) Other than with respect to those matters that have been cured
or corrected, neither it nor any of its Subsidiaries has received since February
1, 1996 any notification or communication from any governmental or regulatory
entity or the staff thereof (A) asserting that it or any of its Subsidiaries is
not in material compliance with any of the statutes, regulations or ordinances
that such governmental or regulatory entity administers or enforces; (B)
threatening to revoke any material license, franchise, permit or authorization;
or (C) threatening or contemplating any enforcement action by or supervisory or
other written agreement with a state or federal regulator (nor, to the knowledge
of its executive officers, do any grounds for any of the foregoing exist); and
(d) Neither it nor any of its Subsidiaries is required to give
prior notice to any regulatory agency of the proposed addition of an individual
to their respective Board of Directors or the employment of an individual as a
senior executive officer.
II.10 Corporate Actions.
(a) Its Board of Directors has (i) duly approved the Merger and
this Agreement, and authorized its officers to execute and deliver this
Agreement, and to take all action necessary to consummate the Merger and the
other transactions contemplated hereby, and (ii) authorized and directed the
submission for approval or adoption of this Agreement by all persons whose
consent or approval may be necessary or required in regard thereto.
(b) Its Board of Directors has taken all necessary action to
exempt this Agreement and the transactions contemplated hereby from, and this
Agreement and the transactions contemplated hereby are exempt from, (i) any
applicable state takeover laws, (ii) any state laws limiting or restricting the
voting rights of stockholders, (iii) any state laws requiring a stockholder
approval vote in excess of the vote normally required in transactions of a
similar type not involving a "related person," "interested stockholder" or
person or entity of a similar type, and (iv) any provision in its or any of its
Subsidiaries' articles of incorporation, certificate of incorporation, charter
or bylaws, (A) restricting or limiting stock ownership or the voting rights of
stockholders (other than the provisions of AccuMed's Certificate of
Incorporation that limit the voting rights of the holders of the AccuMed
Preferred Stock), or (B) requiring a stockholder approval vote in excess of the
vote normally required in transactions of a similar type not involving a
"related person," interested stockholder" or person or entity of a similar type.
II.11 Authority. Except as set forth in Section 2.11 of its Disclosure
Schedules, neither the execution nor delivery of, nor performance of any
obligations under, this Agreement
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by it, nor the consummation of the Merger, will violate any of the provisions
of, or constitute a breach or default under, or give any person the right to
terminate or accelerate payment or performance under, (i) its articles of
incorporation, certificate of incorporation or bylaws, or the articles of
incorporation, certificate of incorporation, charter or bylaws of any of its
Subsidiaries, (ii) any regulatory restraint on the acquisition of it or control
thereof, (iii) any law, rule, ordinance, regulation or judgment, decree, order,
award or governmental or non-governmental permit or license to which it or any
of its Subsidiaries is subject, or (iv) any agreement, lease, contract, note,
mortgage, indenture, arrangement or other obligation or instrument ("Contract")
to which it or any of its Subsidiaries is a party or is subject or by which any
of its or their properties or assets is bound and which provides for payments
by, on behalf of, or to it and/or any of its Subsidiaries in excess of either
$25,000 per annum or $100,000 over the term of such Contract. The parties
acknowledge that the consummation of the Merger and the other transactions
contemplated hereby is subject to various regulatory approvals. It has all
requisite corporate power and authority to enter into this Agreement and to
perform its obligations hereunder and thereunder, subject in the case of the
Merger to the approval or adoption of this Agreement by its stockholders under
applicable law. Other than (i) the receipt of Governmental Approvals (as defined
in Section 4.1(c)), (ii) the approval or adoption of this Agreement by its
stockholders, and (iii) except as set forth in Section 2.11 of its Disclosure
Schedules with respect to any Contract, no consents or approvals are required on
its behalf or on behalf of any of its Subsidiaries in connection with the
consummation of the transactions contemplated by this Agreement. This Agreement
constitutes the valid and binding obligations of it, enforceable in accordance
with their terms, except as enforceability may be limited by applicable laws
relating to bankruptcy, insolvency or creditors' rights generally and general
principles of equity.
II.12 Employment Arrangements. Except as set forth in Section 2.12 of its
Disclosure Schedules, there are no agreements, plans or other arrangements with
respect to employment, severance or other benefits with any current or former
directors, officers or employees of it or any of its Subsidiaries which may not
be terminated without penalty or expense (including any augmentation or
acceleration of benefits) on thirty (30) days' or less notice to any such
person. Except as set forth in Section 2.12 of its Disclosure Schedules, no
payments or benefits (including any augmentation or acceleration thereof) to
current or former directors, officers or employees of it or any of its
Subsidiaries resulting from the transactions contemplated hereby or the
termination of such person's service or employment within two (2) years after
completion of the Merger will cause the imposition of excise taxes under Section
4999 of the Internal Revenue Code or the disallowance of a deduction to it, the
Surviving Corporation, or any of their respective Subsidiaries pursuant to
Sections 162 or 280G, or any other section of the Internal Revenue Code.
II.13 Employee Benefits.
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(a) Neither it nor any of its Subsidiaries maintains any funded
deferred compensation plans (including profit sharing, pension, retirement
savings or stock bonus plans), unfunded deferred compensation arrangements or
employee benefit plans as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), other than any plans
("Employee Plans") set forth in Section 2.13 of its Disclosure Schedules (true
and correct copies of which it has delivered to the other parties). Neither it
nor any of its Subsidiaries has incurred or reasonably expects to incur any
liability to the Pension Benefit Guaranty Corporation, except for required
premium payments which, to the extent due and payable, have been paid. The
Employee Plans intended to be qualified under Section 401(a) of the Internal
Revenue Code are so qualified, and it is not aware of any fact which would
adversely affect the qualified status of such plans. Except as set forth in
Section 2.13 of its Disclosure Schedules, neither it nor any of its Subsidiaries
(a) provides health, medical, death or survivor benefits to any former employee
or beneficiary thereof, or (b) maintains any form of current (exclusive of base
salary and base wages) or deferred compensation, bonus, stock option, stock
appreciation right, benefit, severance pay, retirement, employee stock
ownership, incentive, group or individual health insurance, welfare or similar
plan or arrangement for the benefit of any single or class of directors,
officers or employees, whether active or retired (collectively "Benefit
Arrangements").
(b) Except as disclosed in Section 2.13 of its Disclosure
Schedules, all Employee Plans and Benefit Arrangements that are currently in
effect were in effect for substantially all of calendar year 1999 and there has
been no material amendment thereof (other than amendments required to comply
with applicable law) or increase in the cost thereof or benefits payable
thereunder on or after February 1, 1999.
(c) To its best knowledge, with respect to all Employee Plans and
Benefit Arrangements, it and each of its Subsidiaries are in substantial
compliance with the requirements prescribed by any and all statutes,
governmental or court orders or rules or regulations currently in effect,
including but not limited to ERISA and the Internal Revenue Code, applicable to
such Employee Plans or Benefit Arrangements. To its best knowledge, no condition
exists that could constitute grounds for the termination of any Employee Plan
under Section 4042 of ERISA; no "prohibited transaction," as defined in Section
406 of ERISA and Section 4975 of the Internal Revenue Code, has occurred with
respect to any Employee Plan, or any other employee benefit plan maintained by
it or any of its Subsidiaries which is covered by Title I of ERISA, which could
subject any person to liability under Title I of ERISA or to the imposition of
any tax under Section 4975 of the Internal Revenue Code; to its best knowledge,
no Employee Plan subject to Part III of Subtitle B of Title I of ERISA or
Section 412 of the Internal Revenue Code, or both, has incurred any "accumulated
funding deficiency," as defined in Section 412 of the Internal Revenue Code,
whether or not waived; neither it nor any of its Subsidiaries has failed to make
any contribution or pay any amount due and owing as required by the terms of any
Employee Plan or Benefit Arrangement. To its best knowledge, neither it nor any
of its Subsidiaries has incurred or expects to incur, directly or indirectly,
any liability under Title IV of ERISA arising in connection with the termination
of, or a complete or partial withdrawal from, any plan covered or previously
covered by Title IV of ERISA which could constitute a liability of the Surviving
Corporation or any of its Subsidiaries at or after the Merger Effective Time.
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II.14 Information Furnished. No statement contained in any schedule,
certificate or other document furnished (whether before, on or after the
Execution Date) or to be furnished in writing by or on behalf of it to the other
parties pursuant to this Agreement contains or will contain any untrue statement
of a material fact or any material omission. To its best knowledge, no
information that is material to the Merger and necessary to make the
representations and warranties herein not misleading has been withheld from the
other parties hereto.
II.15 Property and Assets. It and its Subsidiaries have good and
marketable title to all of their real property reflected in their financial
statements at December 31, 1999, referred to in Section 2.4 hereof or acquired
subsequent thereto, free and clear of all Encumbrances, except for (a) such
items shown in such financial statements or in the notes thereto, (b) liens for
current real estate taxes not yet delinquent, (c) customary easements,
restrictions of record and title exceptions that are not material to the value
or use of such property, (d) property sold or transferred in the ordinary course
of business since the date of such financial statements, (e) as otherwise
specifically indicated in its Regulatory Reports filed after December 31, 1999
and before the Execution Date or in Section 2.15 of its Disclosure Schedules. It
and its Subsidiaries enjoy peaceful and undisturbed possession under all
material leases for the use of real property under which they are the lessee;
all of such leases are valid and binding and in full force and effect, and
neither it nor any of its Subsidiaries is in default in any material respect
under any such lease. No default will arise under any material real property,
material personal property lease or material intellectual property license by
reason of the consummation of the Merger without the lessor's or licensor's
consent except as set forth in Section 2.15 of its Disclosure Schedules. There
has been no material physical loss, damage or destruction, whether or not
covered by insurance, affecting any of the real property or material personal
property of it or its Subsidiaries since December 31, 1999. All fixed assets
material to its or any of its Subsidiaries) respective businesses and currently
used by it or any of its Subsidiaries are, in all material respects, in good
operating condition and repair.
II.16 Agreements and Instruments. Except as set forth in its Regulatory
Reports filed after December 31, 1999 and before the Execution Date or in
Section 2.16 of its Disclosure Schedules, neither it nor any of its Subsidiaries
is a party to (a) any material agreement, arrangement or commitment not made in
the ordinary course of business, (b) any agreement, indenture or other
instrument relating to the borrowing of money by it or any of its Subsidiaries
or the guarantee by it or of its Subsidiaries of any such obligation, (c) any
agreements to make loans or for the provision, purchase or sale of goods,
services or property between it or any of its Subsidiaries and any director or
officer of it or any of its Subsidiaries or any affiliate or member of the
immediate family of any of the foregoing, (d) any agreements with or concerning
any labor or employee organization to which it or any of its Subsidiaries is a
party, (e) any agreements between it or any of its Subsidiaries and any five
percent (5%) or more stockholder of it, and (f) any agreements, directives,
orders or similar arrangements between or involving it or any of its
Subsidiaries and any state or regulatory authority.
II.17 Material Contract Default; Contingent Liabilities. Neither it nor
any of its Subsidiaries, nor any counterparty thereto, is in default in any
respect under any contract, agreement, commitment, arrangement, lease, insurance
policy or other instrument to which it or
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any Subsidiary of it is a party or by which its respective assets, business or
operations may be bound or affected or under which it or its respective assets,
business or operations receives benefits, which default is reasonably expected
to have, either individually or in the aggregate, a material adverse effect on
it, and, except as set forth in Section 2.17 of its Disclosure Schedules, there
has not occurred any event that, with the lapse of time or the giving of notice
or both, would constitute such a default, and neither it nor any of its
Subsidiaries has been given notice or is aware of any material, actual or
contingent liability of any kind or nature that has not been disclosed to the
other party hereunder, whether or not such type of liability is specifically
mentioned in any provision of this Agreement. Furthermore, without limiting the
generality of the foregoing, each party and its Subsidiaries has received all
payments due to it under any and all existing contracts or other business
arrangements in a timely fashion as of the Execution Date, and no payments under
any such contracts or arrangements are, or are reasonably expected to become, in
arrears from and after the date hereof and through and including the Merger
Effective Time.
II.18 Tax Matters.
(a It and each of its Subsidiaries has duly and properly filed all
federal, state, local and other tax returns and reports required to be filed by
it or them and has made timely payments of all taxes due and payable, whether
disputed or not; the current status of audits of such returns or reports by the
Internal Revenue Service and other applicable tax authorities is as set forth in
Section 2.18 of its Disclosure Schedules; and, except as set forth in Section
2.18 of its Disclosure Schedules, there is no agreement by it or any of its
Subsidiaries for the extension of time for the assessment or payment of any
taxes payable. Except as set forth in Section 2.18 of its Disclosure Schedules,
neither the Internal Revenue Service nor any other taxing authority is now
asserting or, to its best knowledge, threatening to assert any deficiency or
claim for additional taxes (or interest thereon or penalties in connection
therewith), nor is it aware of any basis for any such assertion or claim,
including, but not limited to, any notification from its independent auditors,
whether formal or informal, that any position taken by it or its Subsidiaries on
any return or information report is inconsistent with established precedent and
more likely than not to be challenged upon audit by the relevant taxing
authority. It and each of its Subsidiaries has complied in all material respects
with all applicable Internal Revenue Service backup withholding requirements. It
and each of its Subsidiaries has complied with all applicable state law tax
collection and reporting requirements.
(b Adequate provision for any unpaid federal, state, local or
foreign taxes due or to become due from it or any of its Subsidiaries for all
periods through and including September 30, 2000 has been made and is reflected
in its September 30, 2000 financial statements referred to in Section 2.4, and
has been or will be made with respect to periods ending after September 30,
2000.
II.19 Environmental Matters. To its best knowledge, neither it nor any of
its Subsidiaries owns, leases, or otherwise controls any property affected by
toxic waste, radon gas or other hazardous conditions or constructed in part with
the use of asbestos which requires removal or encapsulation. Neither it nor any
of its Subsidiaries is aware of, nor has it or any of its Subsidiaries received
written notice from any governmental or regulatory body of, any past, present or
future conditions, activities, practices or incidents which may interfere with
or prevent
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compliance or continued compliance with hazardous substance or other
environmental laws or any regulation, order, decree, judgment or injunction,
issued, entered, promulgated or approved thereunder or which may give rise to
any common law or legal liability or otherwise form the basis of any claim,
action, suit, proceeding, hearing or investigation based on or related to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling, or the emission, discharge, release or threatened release
into the environment, of any pollutant, contaminant, chemical or industrial,
toxic or hazardous substance or waste. There is no civil, criminal or
administrative claim, action, suit, proceeding, hearing or investigation pending
or, to its knowledge, threatened against it or any of its Subsidiaries relating
in any way to such hazardous substance laws or any regulation, order, decree,
judgment or injunction issued, entered, promulgated or approved thereunder.
II.20 Exceptions to Representations and Warranties.
(a On or before the date hereof, AccuMed has delivered to
Ampersand and Acquisition Sub, and Ampersand and Acquisition Sub have delivered
to AccuMed, their respective Disclosure Schedules, setting forth, among other
things, exceptions to any and all of their respective representations and
warranties contained in this Article II, provided that each exception set forth
in a Disclosure Schedule shall be deemed disclosed for purposes of all
representations and warranties if such exception is contained in a section of a
Disclosure Schedule corresponding to a Section in Article II, and provided
further that (i) no such exception is required to be set forth in a Disclosure
Schedule if its absence would not result in the related representation or
warranty being deemed untrue or incorrect under the standard established by
Section 2.20(b) hereof, and (ii) the mere inclusion of an exception in a
Disclosure Schedule shall not be deemed an admission by a party that such
exception represents a material fact, event or circumstance or would result in a
material adverse effect or material adverse change.
(b None of the representations or warranties of the parties hereto
contained in this Article II shall be deemed untrue or incorrect, and no party
shall be deemed to have breached its representations or warranties contained
herein, as a consequence of the existence of any fact, circumstance or event if
such fact, circumstance or event, individually or taken together with all other
facts, circumstances or events, would not have a material adverse effect or
material adverse change on such party. As used in this Agreement, the term
"material adverse effect" or "material adverse change" means an effect or change
which (i) is materially adverse to the financial condition of a party and its
respective Subsidiaries taken as a whole, (ii) significantly and adversely
affects the ability of AccuMed, Ampersand or Acquisition Sub to consummate the
transactions contemplated hereby or to perform its material obligations
hereunder, or (iii) enables any person to prevent the consummation of the
transactions contemplated hereby; provided, however, that any effect or change
resulting from (A) actions or omissions of the parties hereto contemplated by
this Agreement or taken with the prior consent of the other parties in
contemplation of the transactions provided for herein (including, without
limitation, conforming accounting adjustments), or (B) circumstances generally
affecting the industry or industries within which the parties operate (including
changes in laws or regulations, accounting principles or general levels of
interest rates) which do not adversely affect a party and its Subsidiaries,
taken as a whole, in a manner
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significantly different than the other parties hereto, shall be deemed not to be
or have a material adverse effect or result in a material adverse change.
ARTICLE III
COVENANTS
III.1 Investigations; Access and Copies. From and after the date of this
Agreement, and through and including the Merger Effective Time, each party
agrees to give to the other parties and their respective representatives and
agents full access (to the extent lawful) to all of the premises, books, records
and employees of it and its Subsidiaries at all reasonable times and to furnish
and cause its Subsidiaries to furnish to the other party and its respective
agents or representatives access to and true and complete copies of such
financial and operating data, all documents with respect to matters to which
reference is made in Article II hereof or on any list, schedule or certificate
delivered or to be delivered in connection herewith and such other documents,
records or information with respect to the businesses and properties of it and
its Subsidiaries as the other party or its respective agents or representatives
shall from time to time reasonably request; provided however, that any such
inspection (a) shall be conducted in such manner as not to interfere
unreasonably with the operation of the business of the entity inspected, and (b)
shall not affect any of the representations or warranties hereunder. Each party
will also give prompt written notice to the other parties of any event or
development which, (x) had it existed or been known on the date of this
Agreement, would have been required to be disclosed under this Agreement, (y)
would cause any of its representations and warranties contained herein to be
inaccurate or otherwise materially misleading, or (z) materially relates to the
satisfaction of the conditions set forth in Article IV hereof. Notwithstanding
anything to the contrary contained herein, none of the parties hereto nor any of
their respective Subsidiaries shall be required to provide access to or to
disclose information where such access or disclosure would jeopardize the
attorney-client privilege of the entity in possession or control of such
information or contravene any law, rule, regulation, order, judgment, decree,
fiduciary duty or binding agreement entered into prior to the date of this
Agreement or, in the event of any litigation or threatened litigation among the
parties over the terms of this Agreement, where access to information may be
adverse to the interests of such party. To the extent reasonably practicable,
the parties hereto will make appropriate substitute disclosure arrangements
under circumstances in which the restrictions of the preceding sentence apply.
III.2 Conduct of Business. From and after the date of this Agreement, and
through and including the Merger Effective Time or the termination of this
Agreement, each party agrees, on behalf of itself and each of its respective
Subsidiaries, except insofar as the Chief Executive Officer of each of the
parties shall otherwise consent in writing (which consent shall not be
unreasonably withheld):
(a That it and its Subsidiaries shall (i) except as contemplated
in this Agreement conduct their business only in the ordinary course consistent
with past practices, (ii) maintain their books and records in accordance with
past practices, and (iii) use all reasonable efforts to preserve intact their
business organizations and assets, to maintain their rights, franchises and
existing relations with customers, suppliers, employees and business associates
and to take no
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action that would (A) adversely affect the ability of any of them to obtain the
Governmental Approvals (as defined in Section 4.1(c) hereof) or which would
reasonably be expected to hinder or delay receipt of the Governmental Approvals,
or (B) adversely affect their ability to perform their obligations under this
Agreement;
(b That, except as specifically otherwise permitted herein,
neither it nor its Subsidiaries shall: (i) declare, set aside or pay any
dividend or make any other distribution with respect to its capital stock,
except for dividends or distributions by a wholly-owned Subsidiary of such party
to such party; (ii) reacquire or buy any of its outstanding shares; (iii) issue
or sell any shares of capital stock of it or any of its Subsidiaries, except
shares of its common stock issued pursuant to exercise or conversion of stock
options, warrants, convertible preferred stock or convertible notes outstanding
on the Execution Date, if any, and which have been identified in its Disclosure
Schedules; (iv) effect any stock split, stock dividend, reverse stock split or
other reclassification or recapitalization of its common stock; or (v) grant any
stock appreciation or other rights with respect to shares of capital stock of it
or of any of its Subsidiaries; or (vi) enter into any agreement, or make any
modification to any authorized or issued security, the effect of which is to
cause the exercise price of any security convertible into shares of Ampersand
Common Stock to be reduced upon consummation of the Merger or the transactions
contemplated hereby;
(c That, except as specifically otherwise permitted herein,
neither it nor its Subsidiaries shall: (i) sell, dispose of or pledge any
significant assets of it or of any of its Subsidiaries other than in the
ordinary course of business consistent with past practices or to borrow funds
consistent with the provisions hereinafter contained except as contemplated in
Schedule 3.2 of its Disclosure Schedules; (ii) merge or consolidate it or any of
its Subsidiaries into another entity or acquire any other entity or, except in
accordance with its written business plan in effect on the date hereof, acquire
any significant assets; (iii) sell or pledge or agree to sell or pledge or
permit any lien to exist on any stock of any of its Subsidiaries owned by it;
(iv) change the articles of incorporation or certificate of incorporation,
charter, bylaws or other governing instruments of it or any of its Subsidiaries,
except, in the case of Ampersand, with respect to the authorization of
additional shares of Ampersand Common Stock, or otherwise as contemplated by
this Agreement; (v) engage in any lending activities other than in the ordinary
course of business consistent with past practices; (vi) form any new subsidiary
or cause or permit a material change in the activities presently conducted by
any Subsidiary or make additional investments in subsidiaries in excess of
$100,000, except as contemplated in Schedule 3.2 of its Disclosure Schedules;
(vii) engage in any off balance sheet interest rate swap arrangement, (viii)
engage in any activity not contemplated by its written business plan in effect
on the Execution Date; (ix) purchase any equity securities or incur or assume
any indebtedness except in the ordinary and usual course of business; (x)
authorize capital expenditures other than in the ordinary and usual course of
business; or (xi) implement or adopt any change in its accounting principles,
practices or methods other than as may be required by generally accepted
accounting principles (the limitations contained in this Section 3.2 (c) shall
also be deemed to constitute limitations as to the making of any commitment with
respect to any of the matters set forth in this Section 3.2 (c)); and
(d That, except (i) for the Seventy-Five Thousand Dollar ($75,000)
aggregate bonus allocation to officers, directors and key employees heretofore
approved by the Board of
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Directors of AccuMed for the fiscal year ending on December 31, 2000, (ii) the
severance agreement heretofore entered into by AccuMed with Norman Pressman, and
(iii) as specifically otherwise permitted herein, neither it nor its
Subsidiaries shall: (w) grant any general increase in compensation or benefits
to its employees or officers or pay any bonuses to its employees or officers
except in accordance with policies in effect on the Execution Date; (x) enter
into, extend, renew, modify, amend or otherwise change any employment or
severance agreements with any of its directors, officers or employees; (y) grant
any increase in fees or other increases in compensation or other benefits to any
of its present or former directors in such capacity; or (z) establish or sponsor
any new Employee Plan or Benefit Arrangement or effect any change in its
Employee Plans or Benefit Arrangements.
III.3 No Solicitation. Each party agrees, on behalf of itself and each of
its Subsidiaries, that, from and after the date hereof, it will not authorize or
permit any officer, director, employee, investment banker, financial consultant,
attorney, accountant or other representative of it or any of its Subsidiaries,
directly or indirectly, to initiate contact with any person or entity in an
effort to solicit, initiate or encourage any Takeover Proposal (as such term is
defined below). Except as the fiduciary duties of its Board of Directors may
otherwise require (as determined in good faith after consultation with legal
counsel), each party agrees that it will not authorize or permit any officer,
director, employee, investment banker, financial consultant, attorney,
accountant or other representative of it or any of its Subsidiaries, directly or
indirectly, (i) to cooperate with, or furnish or cause to be furnished any
non-public information concerning its business, properties or assets to, any
person or entity in connection with any Takeover Proposal; (ii) to negotiate any
Takeover Proposal with any person or entity; or (iii) to enter into any
agreement, letter of intent or agreement in principle as to any Takeover
Proposal. Each party agrees that it shall promptly give written notice to the
other upon becoming aware of any Takeover Proposal, such notice to contain, at a
minimum, the identity of the persons submitting the Takeover Proposal, a copy of
any written inquiry or other communication, the terms of any Takeover Proposal,
any information requested or discussions sought to be initiated and the status
of any requests, negotiations or expressions of interest. As used in this
Agreement, "Takeover Proposal" shall mean any proposal, other than as
contemplated by this Agreement, for a merger or other business combination
involving any of the parties hereto or any of their respective Subsidiaries, or
for the acquisition of an equity interest in any of the parties hereto that
would give rise to a filing requirement with the SEC (as mandated by federal
securities law), or for the acquisition of an equity interest greater than five
percent (5%) in any of their respective Subsidiaries, or for the acquisition of
a substantial portion of the assets of any party hereto or any of their
respective Subsidiaries.
III.4 Stockholder Approvals. AccuMed shall call the AccuMed Stockholders'
Meeting, and Ampersand, as the sole shareholder of Acquisition Sub, shall, by
informal action, approve this Agreement and the transactions contemplated
hereby, in accordance with the provisions of Section 1.7 hereof. In connection
with the AccuMed Stockholders' Meeting, the Board of Directors of AccuMed shall
recommend approval of this Agreement and, the transactions contemplated hereby
(and such recommendation shall be contained in the Prospectus/Proxy Statement),
unless as a result of an unsolicited Takeover Proposal received by a party after
the date hereof the Board of Directors of AccuMed determines in good faith,
after consultation with its legal counsel, that to approve or to recommend
approval by the stockholders of this Agreement and
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the transactions contemplated hereby would constitute a breach of the fiduciary
duties of such Board of Directors to the stockholders of AccuMed. AccuMed shall
use its best efforts to solicit from its stockholders proxies in favor of
approval and to take all other action necessary or helpful to secure a vote of
the AccuMed stockholders in favor of this Agreement and the transactions
contemplated hereby, except as the fiduciary duties of its Board of Directors
may otherwise require.
III.5 Accounting and Tax Treatment. After execution of this Agreement,
none of the parties hereto shall take any action which would prevent the Merger
and the other transactions contemplated hereby from qualifying as a
reorganization within the meaning of Section 368 of the Internal Revenue Code.
III.6 Publicity. From and after the Execution Date, and through and
including the Merger Effective Time, none of the parties hereto nor any of their
respective Subsidiaries shall, without the prior approval of the other parties
hereto, issue or make, or permit any of its directors, employees, officers or
agents to issue or make, any press release, disclosure or statement to the press
or any third party with respect to the Merger or the other transactions
contemplated hereby, except as required by law. The parties hereto shall
cooperate when issuing or making any press release, disclosure or statement with
respect to the Merger or the other transactions contemplated hereby.
III.7 Cooperation Generally. From and after the Execution Date, and
through and including the Merger Effective Time, the parties hereto and their
respective Subsidiaries shall, in conformance with the provisions of this
Agreement, use their best efforts, and take all actions necessary or
appropriate, to consummate the Merger and the other transactions contemplated
hereby at the earliest practicable date.
III.8 Additional Financial Statements and Reports. As soon as reasonably
practicable after they become publicly available, Ampersand and AccuMed shall
furnish to each other their respective statements of financial condition,
statements of operations or statements of income, statements of cash flows and
statements of changes in stockholders' equity at all dates and for all periods
before the Closing. Such financial statements will be prepared in conformity
with generally accepted accounting principles applied on a consistent basis and
fairly present the financial condition, results of operations and cash flows of
the respective parties (subject, in the case of unaudited financial statements,
to (i) normal year-end audit adjustments, (ii) any other adjustments described
therein, and (iii) the absence of notes which, if presented, would not differ
materially from those included with its most recent audited consolidated
financial statements), and all of such financial statements will be prepared in
conformity with the requirements of Form 10-Q or Form 10-K, as and if
applicable, under the Exchange Act. As soon as reasonably practicable after they
are filed, each of Ampersand and AccuMed shall, to the extent permitted under
applicable law, furnish to the other its own Regulatory Reports.
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III.9 Employee Benefits and Agreements.
(a Following the Merger Effective Time, Ampersand or the Surviving
Corporation shall honor, in accordance with their respective terms, all Benefit
Arrangements and all provisions for vested benefits or other vested amounts
theretofore earned or accrued under the Employee Plans of each of the parties
hereto.
(b The aforesaid Employee Plans shall not be terminated by reason
of the Merger but shall continue thereafter as plans of Ampersand or the
Surviving Corporation until such time as the Employee Plans are integrated,
subject to the terms and conditions specified in such plans and to such changes
therein as may be necessary to reflect the consummation of the Merger. Ampersand
or the Surviving Corporation shall take such steps as are necessary as soon as
practicable following the Merger Effective Time to integrate the Employee Plans,
with (i) full credit for prior service with AccuMed or Ampersand or any of the
AccuMed or Ampersand Subsidiaries for purposes of vesting and eligibility for
participation (but not benefit accruals under any Employee Plan) and co-payments
and deductibles, and (ii) waiver of all waiting periods and pre-existing
condition exclusions or penalties.
III.10 Ampersand Lock-Up Agreements. Ampersand shall cause each officer
and director of Ampersand, and Acquisition Sub shall cause each officer and
director of Acquisition Sub, to furnish to AccuMed, on or prior to the Closing
Date, a letter, in form and substance satisfactory to counsel for AccuMed,
pursuant to which each such person shall agree not to offer for sale, sell,
distribute or otherwise dispose of any shares of Ampersand Common Stock during
the sixty (60) days following the Closing Date.
ARTICLE IV
CONDITIONS OF THE MERGER; TERMINATION OF AGREEMENT
IV.1 Conditions to the Obligations of Each Party. The obligations of each
party to effect the Merger shall be subject to the satisfaction (or written
waiver by such party, to the extent such condition is waivable) of the following
conditions before the Merger Effective Time:
(a Stockholder Approval. The respective stockholders of AccuMed
and Acquisition Sub shall have approved or adopted this Agreement as specified
in Section 1.7 hereof or as otherwise required by applicable law.
(b No Proceedings. No order shall have been entered and remain in
force restraining or prohibiting the Merger in any legal, administrative,
arbitration, investigatory or other proceedings by any governmental or judicial
or other authority.
(c Governmental Approvals. To the extent required by applicable
law or regulation, all approvals of or filings with any governmental or
regulatory authority (collectively, "Governmental Approvals") shall have been
obtained or made, and any waiting periods shall have expired in connection with
the consummation of the Merger; provided, however, that none of the
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preceding shall be deemed obtained or made if it shall be conditioned or
restricted in a manner that would have or result in a material adverse effect on
the Surviving Corporation as the parties hereto shall reasonably and in good
faith agree. All other statutory or regulatory requirements for the valid
consummation of the Merger shall have been satisfied.
(d Registration Statement. The Registration Statement shall have
been declared effective and shall not be subject to a stop order of the SEC (and
no proceedings for that purpose shall have been initiated or threatened by the
SEC) and, if the offer and sale of the Ampersand Common Stock in the Merger
pursuant to this Agreement is subject to the securities laws of any state, shall
not be subject to a stop order of any state securities authority.
(e Legal Opinions. AccuMed shall have received the opinion letter
of Schwartz, Cooper, Greenberger & Krauss, Chartered, counsel to Ampersand and
Acquisition Sub, and Ampersand and Acquisition Sub shall have received the
opinion letter of Joyce L. Wallach, Esq., counsel to AccuMed, in each case in
form and substance satisfactory to the party or parties to whom addressed and to
counsel for such party or parties, with respect to those matters customarily the
subject of such opinion letters in transactions of the nature and magnitude of
the transactions contemplated by this Agreement.
(f Federal Tax Opinion. Ampersand and Acquisition Sub shall have
received an opinion of tax counsel, dated as of the Closing Date, to the effect
that for federal income tax purposes:
(i The Merger will qualify as a "reorganization" under
Section 368(a) of the Internal Revenue Code;
(ii No gain or loss will be recognized by any party hereto
by reason of the Merger;
(iii The basis of the Ampersand Common Stock received by
each holder of AccuMed Common Stock who exchanges AccuMed Common Stock
for Ampersand Common Stock, and the basis of the Ampersand Preferred
Stock received by each holder of AccuMed Preferred Stock who exchanges
AccuMed Preferred Stock for Ampersand Preferred Stock, in the Merger will
be the same as the basis of the AccuMed security surrendered in exchange
therefor (subject, in the case of the AccuMed Common Stock, to any
adjustments required as the result of receipt of cash in lieu of a
fractional share of Ampersand Common Stock);
(iv The holding period of the Ampersand Common Stock
received by a holder of AccuMed Common Stock, and the holding period of
the Ampersand Preferred Stock received by a holder of AccuMed Preferred
Stock, in the Merger will include the holding period of the AccuMed
Common Stock surrendered in exchange therefor, provided that such shares
of AccuMed Common Stock or AccuMed Preferred Stock, as the case may be,
were held as a capital asset by such stockholder at the Merger Effective
Time; and
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(v Cash received by an AccuMed stockholder in lieu of a
fractional share interest of Ampersand Common Stock as part of the Merger
will be treated as having been received as a distribution in full payment
in exchange for the fractional share interest of Ampersand Common Stock
which such stockholder would otherwise be entitled to receive and will
qualify as capital gain or loss (assuming the AccuMed Common Stock was a
capital asset in such stockholder's hands at the Merger Effective Time).
(g Third Party Consents. All consents or approvals of all persons
required for the execution, delivery and performance of this Agreement and the
consummation of the Merger, including, but not limited to, the consents or
approvals of all counterparties to existing material business contracts that
contain provisions requiring that such consent or approval be given, and the
Governmental Approvals referenced in Section 4.1(c) hereof shall have been
obtained and shall be in full force and effect, unless the failure to obtain any
such consent or approval is not reasonably likely to have, individually or in
the aggregate, a material adverse effect on the Surviving Corporation as the
parties shall reasonably and in good faith agree.
(h Material Business Contracts. In its Disclosure Schedules, each
party hereto shall have delivered to the others a list of all material business
contracts to which the listing party is a party or by which it is bound or from
which it benefits, which list shall be true and complete as of the Closing.
(i Due Diligence Reviews.
(i) During the period from the Execution Date through the
Closing Date, Ampersand and Acquisition Sub shall be given the
opportunity by AccuMed, at all reasonable times during normal business
hours, to conduct a due diligence review of AccuMed and its business
operations, which shall include but not be limited to, a review of all
books and records and the opportunity to talk to such employees and
contract counterparties as the parties shall reasonably agree upon, and,
at the same time, AccuMed will be given the opportunity by Ampersand and
Acquisition Sub to conduct a similar due diligence review of Ampersand
and Acquisition Sub and their respective business operations.
(ii) In the event that Ampersand or Acquisition Sub, on the
one hand, or AccuMed, on the other hand, should identify during the
course of the due diligence review being conducted by it hereunder, any
matter or matters that, alone or in the aggregate, may have a material
adverse effect on the party that is the subject of such due diligence
review, or such party's business, or such party's ability to satisfy its
representations, warranties or covenants under this Agreement, or that
would impair the ability of such party to consummate this Agreement or
the transactions contemplated hereby, then the parties hereto shall
discuss such matter in good faith and use their respective best efforts
to negotiate a mutually satisfactory solution to any differences of
opinion with respect to the materiality of such matter or matters and/or
the effect that such matter or matters is likely to have with respect to
the ability of the reviewed party or parties to consummate this Agreement
and the transactions contemplated hereby in the manner anticipated by the
parties hereto, provided that if the parties hereto are, after all such
discussions and
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negotiations have ended, unable to resolve their differences concerning
such matter or matters, then the reviewing party shall have the right,
exerciseable in its sole discretion, for a period of five (5) business
days after such discussions and negotiations have concluded, to terminate
this Agreement without penalty therefor, but without prejudice to the
right of the other party or parties, among other things, to seek judicial
review of, or other remedies in regard to, the reasonableness of the
terminating party or parties in regard to terminating this Agreement;
provided, however, that in the case of Ampersand and Acquisition Sub, the
right to terminate this Agreement pursuant to this subsection shall
extend only until February 28, 2001, and in the case of AccuMed, the
right to terminate this Agreement pursuant to this subsection shall
extend only until the twenty-eighth (28th) day after the date on which
Ampersand and Acquisition Sub have completed the delivery to AccuMed of a
true and correct copy of each document responsive to the due diligence
request submitted by AccuMed to Ampersand in a written memorandum dated
September 29, 2000, a copy of which Ampersand acknowledges having
received on or about such date.
(iii) In the event that any matter as described in the
immediately preceding subparagraph shall be discovered by a party after
its respective cut-off date, as set forth in said subparagraph, such
party shall thereafter have such rights with respect thereto and to the
breach or anticipatory breach of this Agreement as shall be otherwise
provided hereunder or by law.
IV.2 Conditions to Obligations of AccuMed. The obligations of AccuMed to
effect the Merger and the other transactions contemplated hereby shall be
subject to the satisfaction or written waiver by AccuMed of the following
additional conditions before the Merger Effective Time:
(a No Material Adverse Effect. From and after the Execution Date,
and through and including the Merger Effective Time, neither Ampersand nor
Acquisition Sub shall have been affected by any event or change which has had or
caused a material adverse effect or material adverse change on it.
(b Representations and Warranties to be True; Fulfillment of
Covenants and Conditions. (i) The representations and warranties of Ampersand
and Acquisition Sub shall be true and correct (subject to Section 2.20 hereof)
as of the Execution Date and at the Merger Effective Time with the same effect
as though made at the Merger Effective Time (or on the date when made in the
case of any representation or warranty which specifically relates to an earlier
date) except where the failure to be true and correct would not have, or would
not reasonably be expected to have, a material adverse effect, on Ampersand or
Acquisition Sub; (ii) each of Ampersand and its Subsidiaries, including
Acquisition Sub, shall have performed all obligations and complied with each
covenant, in all material respects, and satisfied all conditions under this
Agreement on its part to be satisfied at or before the Merger Effective Time;
and (iii) each of Ampersand and Acquisition Sub shall have delivered to AccuMed
a certificate, dated the Merger Effective Time and signed by its Chief Executive
Officer and President, certifying as to the satisfaction of clauses (i) and (ii)
hereof.
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(c No Litigation. Other than as set forth in its Disclosure
Schedules, neither Ampersand or Acquisition Sub, nor any other Ampersand
Subsidiary, shall be subject to any pending litigation which, if determined
adversely to Ampersand or any Ampersand Subsidiary, would have a material
adverse effect on Ampersand or such Subsidiary.
IV.3 Conditions to Obligations of Ampersand and Acquisition Sub. The
obligations of Ampersand and Acquisition Sub to effect the Merger and the other
transactions contemplated hereby shall be subject to the satisfaction or written
waiver by Ampersand and Acquisition Sub of the following additional conditions
before the Merger Effective Time:
(a No Material Adverse Effect. From and after the Execution Date,
and through and including the Merger Effective Time, AccuMed shall not have been
affected by any event or change which has had or caused a material adverse
effect or material adverse change on AccuMed.
(b Representations and Warranties to be True; Fulfillment of
Covenants and Conditions. (i) The representations and warranties of AccuMed
shall be true and correct (subject to Section 2.20 hereof) as of the Execution
Date and at the Merger Effective Time with the same effect as though made at the
Merger Effective Time (or on the date when made in the case of any
representation or warranty which specifically relates to an earlier date) except
where the failure to be true and correct would not have, or would not reasonably
be expected to have, a material adverse effect on AccuMed; (ii) AccuMed and its
Subsidiaries shall have performed all obligations and complied with each
covenant, in all material respects, and satisfied all conditions under this
Agreement on its part to be satisfied at or before the Merger Effective Time;
and (iii) AccuMed shall have delivered to Ampersand a certificate, dated the
Merger Effective Time and signed by its Chief Executive Officer and President,
certifying as to the satisfaction of clauses (i) and (ii) hereof.
(c No Litigation. Other than as disclosed in its Disclosure
Schedules, neither AccuMed nor any AccuMed Subsidiary shall be subject to any
pending litigation which, if determined adversely to AccuMed or any AccuMed
Subsidiary, would have a material adverse effect on AccuMed.
(d Voting Agreements. Ampersand and Acquisition Sub shall have
received from AccuMed, substantially in the form of Exhibit A attached hereto,
the voting agreements of all officers and directors of AccuMed, as contemplated
by this Agreement.
(e Employment Agreements. Prior to Closing, AccuMed shall have
terminated the employment agreements of those employees of AccuMed and/or its
Subsidiaries identified and listed by Ampersand on Exhibit D attached hereto, in
accordance with the applicable termination provisions contained in such
agreements as of the Execution Date, or, in the absence of such provisions, upon
such terms and conditions as shall be reasonably acceptable to Ampersand and
Acquisition Sub.
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(f Dissenting Shares. No more than five percent (5%) of the issued
and outstanding shares of each class of AccuMed capital stock shall be
Dissenting Shares as of the final date on which such shares may become
Dissenting Shares under the DGCL.
(g Compliance with Budget Statement. A certificate shall have been
delivered by AccuMed to Ampersand, signed by AccuMed's Chief Executive Officer,
certifying that, without the prior written approval of Ampersand and Acquisition
Sub, no material expenditures of cash, other than the items set forth in the
Budget Statement, have been made or committed to by AccuMed or its Subsidiaries
during that portion of the time period covered by the Budget Statement that has
preceded the Closing.
IV.4 Termination of Agreement.
(a Methods of Termination. This Agreement may be terminated at any
time prior to the Merger Effective Time, whether before or after approval of
this Agreement by the stockholders of AccuMed or Acquisition Sub, in the
following manner:
(i) by the mutual consent, in writing, of all of the
parties hereto; or
(ii) by AccuMed, by giving written notice of such
termination to the other parties hereto if, upon the taking of the vote of
AccuMed's stockholders required by the provisions of Section 1.7(a) hereof, the
required approval of the AccuMed stockholders shall not be obtained, provided
that the Board of Directors of AccuMed recommended, and used its best efforts to
obtain, the adoption of this Agreement and approved of the transaction
contemplated hereby prior to the taking of such vote; or
(iii) by AccuMed, by giving written notice of such
termination to Ampersand and Acquisition Sub, (A) if there has been (I) a
material breach of any agreement herein on the part of Ampersand or Acquisition
Sub which has not been cured or adequate assurance of cure given, in either case
within twenty (20) calendar days following notice of such breach from AccuMed
(subject, however, to the provisions of Section 1.12(b) hereof), or (II) a
breach of a representation or warranty of Ampersand or Acquisition Sub herein
which (individually or, together with such other breaches, in the aggregate)
would reasonably be expected to materially impair the ability of Ampersand or
Acquisition Sub to perform its obligations under this Agreement and which, in
the reasonable opinion of AccuMed, by its nature cannot be cured prior to May
31, 2001, or (B) if there shall have occurred or been proposed after the date of
this Agreement (I) any change in any law, rule or regulation, or (II) there
shall have been any decision or action by any court, government or governmental
agency, that could reasonably be expected to prevent consummation of the Merger
or delay such consummation beyond May 31, 2001, or that would have a material
adverse effect on Ampersand or Acquisition Sub; or
(iv) by Ampersand or Acquisition Sub, by giving written
notice of such termination to AccuMed, (A) if there has been (I) a material
breach of any agreement herein on the part of AccuMed which has not been cured
or adequate assurance of cure given, in either case within twenty (20) calendar
days following notice of such breach from Ampersand or Acquisition
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Sub, or (II) a breach of a representation or warranty of AccuMed herein which
(individually or, together with other such breaches, in the aggregate) would
reasonably be expected to materially impair the ability of AccuMed to perform
its obligations under this Agreement and which, in the reasonable opinion of
Ampersand or Acquisition Sub, by its nature cannot be cured prior to May 31,
2001, (B) if any Takeover Proposal (as defined in Section 3.3 hereof) with
respect to AccuMed, other than as contemplated by this Agreement, shall have
been proposed by any third party (and such proposal is not opposed in writing by
AccuMed within twenty (20) calendar days after AccuMed shall have first received
or become aware of such proposal, or AccuMed or its Board of Directors at any
time shall cease to oppose such proposal or shall take, or permit any of its
Subsidiaries to take, any action which is not consistent with opposition to such
proposal), or shall have been agreed to or consummated, or (C) if there shall
have occurred or been proposed after the Execution Date (I) any change in any
law, rule or regulation, or (II) there shall have been any decision or action by
any court, government or governmental agency, that could reasonably be expected
to prevent consummation of the Merger or delay such consummation beyond May 31,
2001, or that would have a material adverse effect on AccuMed; or
(v) by any party, by giving written notice of such
termination to the other parties, if the Merger shall not have been consummated
on or before May 31, 2001 (or such later date as the parties hereto may, from
time to time, establish as the termination date hereof by Amendment hereto),
unless the failure of the Closing to occur by such date shall be due to the
failure of the party seeking to terminate this Agreement to perform or observe
the covenants and agreements of such party set forth herein; or
(vi) by the reviewing party or parties pursuant to the
terms and provisions of Section 4.1(i) hereof, provided that said party or
parties shall have given timely notice of such termination to the other parties
hereto in writing in accordance with the provisions of Section 7.4 hereof.
(b Further Liability. If this Agreement is terminated for any
reason, none of the parties hereto shall have any further liability hereunder of
any nature whatsoever to the other parties; provided, however, that,
notwithstanding the foregoing, (i) this Section 4.4(b) shall not preclude
liability from attaching to a party who has caused the termination hereof by a
willful act or a willful failure to act in violation of the terms and provisions
hereof, and (ii) termination of this Agreement shall not terminate or affect the
agreements of the parties contained in Section 2.7 (No Broker's or Finder's
Fees), Section 3.6 (Publicity), Article V (Termination Obligations) and Section
7.2 (Confidentiality) hereof, the provisions of all of which shall survive any
termination of this Agreement; provided, however, that any aggrieved party,
without terminating this Agreement, shall be entitled to specifically enforce
the terms hereof against the breaching party or parties in order to cause the
Merger to be consummated. Each party hereto acknowledges that there is not an
adequate remedy at law to compensate the other parties with respect to relating
to the non-consummation of the Merger. To this end, each party, to the extent
permitted by law, irrevocably waives any defense it might have based on the
adequacy of a remedy at law that might be asserted as a bar to specific
performance, injunctive relief or other equitable relief.
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(c) No Survival of Representations, Warranties or Agreements. The
representations, warranties and agreements set forth in this Agreement shall not
survive the Merger Effective Time and shall be terminated and extinguished at
the Merger Effective Time, and from and after the Merger Effective Time no party
hereto shall have any liability to the other parties on account of any breach or
failure of any of those representations, warranties or agreements; provided,
however, that the foregoing clause (i) shall not apply to agreements of the
parties which by their terms are intended to be performed after the Merger
Effective Time by the Surviving Corporation or otherwise, and (ii) shall not
relieve any party or person for liability for fraud, deception or intentional
misrepresentation.
ARTICLE V
TERMINATION OBLIGATIONS
V.1 Breach by AccuMed. If this Agreement is terminated by Ampersand or
Acquisition Sub pursuant to Section 4.4(a)(iv)(B) hereof, AccuMed shall pay to
Ampersand and Acquisition Sub, jointly, the aggregate amount of $500,000
immediately upon such termination.
V.2 Breach by Ampersand. If this Agreement is terminated by AccuMed
pursuant to Section 4.4(a)(iii)(A) hereof, Ampersand and Acquisition Sub,
jointly, shall pay to AccuMed the aggregate amount of $500,000 immediately upon
such termination.
V.3 Tender or Exchange Offer. If any person or group of persons, other
than Ampersand or Acquisition Sub, or any of their respective affiliates, shall
commence a tender or exchange offer for ten percent (10%) or more of any class
of securities of AccuMed, or if there shall be commenced by any person or group
of persons, other than Ampersand or Acquisition Sub, or any of their respective
affiliates, of a proxy contest with respect to AccuMed, or solicitation by any
person or group of persons, other than Ampersand, Acquisition Sub, or any of
their respective affiliates, of proxies with respect to securities of AccuMed
prior to the Closing, and, as a consequence, the Merger is not approved by the
AccuMed stockholders as and in the manner contemplated by this Agreement, and if
thereafter (i) any agreement is entered into by AccuMed to effect a merger, sale
of assets or other transaction intended to cause a change of control of AccuMed,
or a tender or exchange offer is made to the AccuMed stockholders for the same
purpose, and (ii) neither Ampersand, Acquisition Sub, nor any of their
respective affiliates is a party thereto, and (iii) the making of such agreement
or the initiation of such tender or exchange offer occurs within twelve (12)
months after the latest date on which the AccuMed Stockholders Meeting should
have been held in accordance with the provisions of Section 1.7(a) of this
Agreement, AccuMed shall pay to Ampersand and Acquisition Sub, jointly, the
aggregate amount of $500,000. Such amount shall be due at the closing of the
transaction contemplated by such agreement or tender or exchange offer. If,
however, Ampersand or Acquisition Sub, or any of their respective affiliates, is
a party to such transaction, then the $500,000 provided for in this Section 5.3
will not be payable to Ampersand and Acquisition Sub hereunder.
V.4 Non-Fulfillment of AccuMed Obligations. If AccuMed shall have
withdrawn, or not included in the Prospectus/Proxy Statement, the recommendation
of its Board of Directors
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with respect to the Merger as provided for in this Agreement, or shall not have
held the AccuMed Stockholders Meeting on, or by, the latest date provided for in
Section 1.7(a) of this Agreement and, as a consequence, the Merger is not
approved by the AccuMed stockholders as and in the manner contemplated by this
Agreement, or the Merger does not close notwithstanding the fulfillment of all
of the conditions of Section 4.2 hereof, and if thereafter any agreement is
entered into by AccuMed to effect a merger, sale of assets or other transaction
intended to cause a change of control of AccuMed, or a tender or exchange offer
for ten percent (10%) or more of any class of securities of AccuMed is made to
the AccuMed stockholders for the same purpose, and neither Ampersand nor
Acquisition Sub, nor any of their respective affiliates, is a party thereto, and
the making of such agreement or the initiation of such tender or exchange offer
occurs within twelve (12) months after the latest date on which the AccuMed
Stockholders Meeting should have been held in accordance with the provisions of
Section 1.7(a) of this Agreement, AccuMed shall pay to Ampersand and Acquisition
Sub, jointly, the aggregate amount of $500,000. Such amount shall be due at the
closing of the transaction contemplated by such agreement, tender or exchange
offer. If, however, Ampersand or Acquisition Sub or any of their respective
affiliates, is a party to such transaction, then the $500,000 provided for in
this Section 5.4 will not be payable to Ampersand and Acquisition Sub hereunder.
V.5 Payment of Replacement Note. The full principal amount of the
Replacement Note, together with all accrued but unpaid interest thereon, shall
become due and payable to the holder thereof immediately upon the earlier to
occur of (i) termination, for any reason, of this Agreement and the transactions
contemplated hereby, and (ii) May 31, 2001, or such later date as the parties
hereto may, from time to time, establish as the termination date hereof and
thereof by amendment hereto; provided, however, that if this Agreement is
terminated by AccuMed pursuant to the provisions of Section 4.4(a)(iii)(A)
hereof, and AccuMed becomes entitled to payment of the $500,000 amount provided
for in Section 5.2 hereof, then AccuMed shall have the right to offset such
$500,000 amount against any payments due to the holder of the Replacement Note
under this Section 5.5, and the payment of any balance thereafter remaining due
and payable under the Replacement Note shall instead become due and payable on
the sixtieth (60th) day following the date on which the termination of this
Agreement became effective.
ARTICLE VI
CERTAIN POST-MERGER AGREEMENTS
VI.1 Indemnification.
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(a) From and after the Merger Effective Time, Ampersand and the
Surviving Corporation shall indemnify, defend and hold harmless each person who
is now, or who has been at any time before the Execution Date or who becomes
before the Merger Effective Time, an officer or director of any of the parties
hereto or any of their respective Subsidiaries (the "Indemnified Parties")
against all losses, claims, damages, costs, expenses (including reasonable
attorney's fees), liabilities, judgments or amounts that are paid in settlement
(which settlement shall require the prior written consent of Ampersand and the
Surviving Corporation, which consent shall not be unreasonably withheld) of or
in connection with any claim, action, suit, proceeding or investigation, whether
civil, criminal or administrative (each a "Claim"), in which an Indemnified
Party is, or is threatened to be made, a party based in whole or in part on or
arising in whole or in part out of the fact that such person is or was a
director or officer of any of the parties hereto or any of their respective
Subsidiaries if such Claim pertains to any matter or fact arising, existing at
or occurring before the Merger Effective Time (including, without, limitation,
the Merger and the other transactions contemplated hereby), regardless of
whether such Claim is asserted or claimed before, or at or after, the Merger
Effective Time (the "Indemnified Liabilities"), to the fullest extent permitted
under applicable state or federal law in effect as of the Execution Date or as
amended applicable to a time before the Merger Effective Time, and Ampersand or
the Surviving Corporation shall pay expenses in advance of the final disposition
of any such action or proceeding to each Indemnified Party to the fullest extent
permitted by applicable state or federal law in effect as of the Execution Date
or as amended applicable to a time before the Merger Effective Time upon receipt
of any undertaking required by applicable law. Any Indemnified Party wishing to
claim indemnification under this Section 6.1(a), upon learning of any Claim,
shall notify Ampersand and the Surviving Corporation (but the failure so to
notify Ampersand and the Surviving Corporation shall not relieve either of them
from any liability which it may have under this Section 6.1(a), except to the
extent such failure materially prejudices Ampersand or the Surviving
Corporation) and shall deliver to Ampersand and the Surviving Corporation the
undertaking, if any, required by applicable law. Ampersand and the Surviving
Corporation shall ensure, to the extent permitted under applicable law, that all
limitations of liability existing in favor of the Indemnified Parties as
provided in their respective governing entity documents, as in effect as of the
Execution Date, or allowed under applicable state or federal law as in effect as
of the Execution Date or as amended applicable to a time before the Merger
Effective Time, with respect to claims or liabilities arising from facts or
events existing or occurring before the Merger Effective Time (including,
without limitation, the transactions contemplated hereby), shall survive the
Merger.
(b) For a period of six (6) years from and after the Merger
Effective Time, Ampersand and the Surviving Corporation shall cause to be
maintained in effect the current policies of directors' and officers' liability
insurance (if any) maintained by AccuMed and its Subsidiaries (provided that
they may substitute therefor policies from financially capable insurers of at
least the same coverage and amounts and containing terms and conditions that are
carried by Ampersand and its Subsidiaries in the ordinary course of business)
with respect to claims arising from facts or events which occurred before the
Merger Effective Time.
(c) The obligations of Ampersand and the Surviving Corporation
provided under paragraphs (a) and (b) of this Section 6.1 are intended to be
enforceable against Ampersand
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and the Surviving Corporation directly by the Indemnified Parties and shall be
binding on all respective successors and permitted assigns of Ampersand and the
Surviving Corporation.
ARTICLE VII
GENERAL
VII.1 Amendments. Subject to applicable law, this Agreement may be
amended, whether before or after any stockholder approval hereof, by an
agreement in writing executed in the same manner as this Agreement and
authorized or ratified by the Boards of Directors of the parties hereto,
provided that after the approval of this Agreement by the stockholders of either
AccuMed or Acquisition Sub, no such amendment may change the amount or form of
the consideration to be delivered hereunder pursuant to Section 1.3 hereof
without the further approval of such stockholders.
VII.2 Confidentiality. All information disclosed by any party hereunder
or in connection herewith, whether prior or subsequent to the date of this
Agreement, including, without limitation, any information obtained pursuant to
Section 3.1 hereof, shall be kept confidential by the person receiving such
information and shall not be used by such person otherwise than as herein
contemplated, all in accordance with the terms of Paragraph 13 of that certain
Confidential Term Sheet (the "Term Sheet") between Ampersand and AccuMed, dated
September 22, 2000, which confidentiality terms the parties hereto acknowledge
and agree shall have a continuing, binding effect notwithstanding the
termination of all other provisions of said Term Sheet. In the event of the
termination of this Agreement, each party hereto shall use all reasonable
efforts to return, upon request, to the other parties hereto all documents (and
reproductions thereof) received from such other parties (and, in the case of
reproductions, all such reproductions) that include information subject to the
confidentiality requirements set forth above in this Section 7.2 and the Term
Sheet.
VII.3 Governing Law. This Agreement and the legal relations among the
parties hereto shall be governed by and construed in accordance with the laws of
the State of Illinois, without taking into account any provisions regarding
choice of law, except to the extent certain matters may be governed by federal
law by reason of preemption.
VII.4 Notices. Any notices or other communications required or permitted
hereunder shall be sufficiently given if it is in writing and either personally
served, sent by confirmed facsimile transmission, air courier guaranteeing next
business day delivery or certified or registered United States mail, postage
prepaid, and shall be deemed delivered upon receipt if personally served, or
upon confirmation of receipt if sent by facsimile transmission, or the next
business day, if sent by air courier guaranteeing next business day delivery,
or, if sent by mail, there (3) business days after deposit in the United States
mail with postage prepaid and properly addressed. For purposes hereof, the
addresses of the parties hereto shall be as follows:
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If to AccuMed, to
AccuMed International, Inc.
920 North Franklin Street
Suite 402
Chicago, Illinois 60610
Attention: Paul F. Lavallee,
Chairman of the Board and Chief Executive Officer
Telecopier: (312) 642-8684
Confirmation: (312) 642-9200
with a copy to:
Joyce L. Wallach, Esq.
1500 7th Avenue
Sacramento, California 95818
Telecopier: (916) 341-0256
Confirmation: (916) 341-0255
If to Ampersand or Acquisition Sub, to
Ampersand Medical Corporation
(or AccuMed Acquisition Corp., as the case may be)
414 North Orleans
Suite 510
Chicago, Illinois 60610
Attention: Peter P. Gombrich,
Chairman of the Board and Chief Executive Officer
Telecopier: (312) 222-9580
Confirmation: (312-222-9550
with a copy to:
Schwartz, Cooper, Greenberger & Krauss, Chartered
180 North LaSalle Street
Suite 2700
Chicago, Illinois 60601
Attention: Richard J. Firfer, Esq. or
Robert A. Smoller, Esq.,
Telecopier: (312) 782-8416
Confirmation: (312) 346-1300
or to such other address as shall be furnished in writing by any party to the
others in accordance with the provisions of this Section 7.4.
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VII.5 No Assignment. This Agreement may not be assigned by any party
hereto, by operation of law or otherwise, except as contemplated hereby.
VII.6 Headings. The descriptive headings of the several Articles and
Sections of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
VII.7 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original and all of which shall
be considered one and the same agreement and shall become effective when one or
more counterparts have been signed by each of the parties hereto and delivered
to the others.
VII.8 Construction and Interpretation. Except as the context otherwise
requires, all references herein to any state or federal regulatory agency shall
also be deemed to refer to any predecessor or successor agency, and all
references to state and federal statutes or regulations shall also be deemed to
refer to any successor statute or regulation, as amended.
VII.9 Binding Effect. This Agreement and every representation, warranty,
covenant, agreement and provision hereof shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, legal representatives,
beneficiaries, officers, directors, stockholders, employees, agents, successors
and permitted assigns.
VII.10 Expenses. In the event that the Merger and the transactions
contemplated hereby are not consummated, each of the parties hereto shall be
responsible for its own expenses incident thereto.
VII.11 Third Parties. The parties hereto acknowledge and agree that by
entering into this Agreement they do not intend to confer any benefits, rights,
privileges, actions or remedies on any person or entity under any third party
beneficiary theory or otherwise, except that after the Merger Effective Time,
the beneficiaries of any representations, warranties or covenants of any of the
parties hereto that survive the Merger may enforce such representations,
warranties and covenants,
VII.12 Entire Agreement. This Agreement, including the schedules,
exhibits, certificates and other writings delivered in connection herewith,
contains the entire understanding and agreement of the parties hereto with
respect to the subject matter hereof, and supercedes all prior and
contemporaneous agreements, understandings, proposals, letters of intent, term
sheets, representations, warranties and covenants in regard thereto, except as
otherwise stated herein.
VII.13 Waivers. Any term or provision of this Agreement may be waived, or
the time for its performance may be extended by the party or parties entitled to
the benefit thereof. Any such waiver shall be validly and sufficiently given for
the purposes of this Agreement if, as to any party, it is in writing and signed
by an authorized representative of such party. The failure of any party hereto
to enforce at any time any provision of this Agreement shall not be construed to
be a waiver of such provision, nor in any way to affect the validity of such
provision. No waiver of any breach of this Agreement shall be held to constitute
a waiver of any other or subsequent breach.
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VII.14 Partial Invalidity. Wherever possible, each provision hereof shall
be interpreted in such manner as to be effective and valid under applicable law,
but in case any one or more of the provisions contained herein shall, for any
reason, be held to be invalid, illegal or unenforceable in any respect, such
provision shall be ineffective to the extent, but only to the extent, of such
invalidity, illegality or unenforceability without invalidating the remainder of
such provision or provisions or any other provisions hereof, unless such a
construction would be unreasonable.
[Signature Page Follows]
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IN WITNESS WHEREOF, each party has caused this Agreement to be executed
on its behalf by its duly authorized officer as of the date first hereinabove
set forth.
ACCUMED INTERNATIONAL, INC. AMPERSAND CORPORATION
By: /s/ PAUL F. LAVALLEE By: /s/ PETER P. GOMBRICH
--------------------------------- -------------------------------------
Paul F. Lavallee, Peter P. Gombrich,
Chairman of the Board Chairman of the Board
and Chief Executive Officer and Chief Executive Officer
ACCUMED ACQUISITION CORP.
By: /s/ PETER P. GOMBRICH
-------------------------------------
Peter P. Gombrich,
President
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