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EXHIBIT 2.4(*)
AGREEMENT AND PLAN OF MERGER
DATED AS OF NOVEMBER 3, 1998
BY AND AMONG
CARDIOVASCULAR DYNAMICS, INC.,
CVD/RMS ACQUISITION CORP.,
AND
RADIANCE MEDICAL SYSTEMS, INC.
(*) Pursuant to Rule 601 of Regulation S-K under the Securities Act of 1933, as
amended, the following schedules and exhibits to the Agreement and Plan of
Merger have not been filed: (i) Disclosure Schedule of Registrant;
(ii) Disclosure Schedule of Radiance Medical Systems, Inc.; (iii) Form of
Escrow Agreement; (iv) Form of Registration Rights Agreement; and (v) Form
of Employment Agreement. The Registrant agrees to furnish supplementally a
copy of such omitted schedules and exhibits to the Commission upon request.
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER, dated as of November 3, 1998 (this
"Agreement") is made and entered into by and among CardioVascular Dynamics,
Inc., a Delaware corporation ("CVD"), CVD/RMS Acquisition Corp., a Delaware
corporation and wholly-owned subsidiary of CVD ("Sub"), and Radiance Medical
Systems, Inc., a Delaware corporation ("Radiance")
WHEREAS, the Board of Directors of each of CVD, Sub and Radiance
believes it to be desirable and in the best interests of CVD, Sub and Radiance
and each of their respective stockholders to merge Radiance with and into Sub
(the "Merger"); and
WHEREAS, CVD, Sub and Radiance desire to make certain representations,
warranties and agreements in connection with the Merger and also to prescribe
various conditions to the Merger;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE 1
THE MERGER
1.1 The Merger. At the Effective Time (as defined in Section 1.2), upon
the terms and subject to the conditions set forth in this Agreement, Radiance
shall be merged with and into Sub in accordance with the provisions of the
Delaware General Corporation Law (the "DGCL"). Sub shall be the surviving
corporation in the Merger (the "Surviving Corporation"). Sub and Radiance are
sometimes referred to herein as the "Constituent Corporations". As a result of
the Merger, each outstanding share of capital stock of Radiance shall be
canceled and converted into the right to receive the Merger Consideration, in
the manner provided in Article 2 hereof.
1.2 Effective Time. At the Closing (as defined in Section 1.3), a
certificate of merger (the "Certificate of Merger") shall be executed by the
parties hereto and filed with the Secretary of State of the State of Delaware
(the "Secretary of State"). The Merger shall become effective at the time of
filing of the Certificate of Merger (the "Effective Time").
1.3 Closing. The closing of the Merger (the "Closing") shall take place
at the offices of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, at 10:00 a.m. on the date all of
the conditions set forth herein have been satisfied or waived in accordance with
this Agreement (the "Closing Date"). At the Closing, CVD, Sub and Radiance shall
deliver the certificates and other documents and instruments required to be
delivered hereunder.
1.4 Certificate of Incorporation and Bylaws of the Surviving
Corporation. At the Effective Time: (i) the Certificate of Incorporation of Sub
as in effect immediately prior to the Effective Time shall be the Certificate of
Incorporation of the Surviving Corporation until thereafter
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amended; and (ii) the Bylaws of Sub as in effect immediately prior to the
Effective Time shall be the Bylaws of the Surviving Corporation until thereafter
amended.
1.5 Directors and Officers of the Surviving Corporation. The directors
and officers of Sub immediately prior to the Effective Time shall be the
directors and officers of the Surviving Corporation from and after the Effective
Time, until their successors shall have been duly elected or appointed and
qualified or until their earlier death, resignation or removal in accordance
with the Surviving Corporation's Certificate of Incorporation and Bylaws.
1.6 Effects of the Merger. Subject to the foregoing, the effects of the
Merger shall be as provided in the applicable provisions of the DGCL.
1.7 Further Assurances. Each party hereto shall execute such further
documents and instruments and take such further actions as may reasonably be
requested by one or more of the others to consummate the Merger, to vest the
Surviving Corporation with full title to all assets, properties, rights,
approvals, immunities and franchises of either of the Constituent Corporations
or to effect the other purposes of this Agreement.
1.8 Tax Treatment. The parties intend that the Merger be treated as a
reorganization described in Section 368(a)(1)(A) and 368(a)(2)(D) of the
Internal Revenue Code of 1986, as amended (the "Code").
ARTICLE 2
EXCHANGE OF SHARES
2.1 Exchange of Shares. At the Effective Time, by virtue of the Merger
and without any action on the part of the holders of the capital stock of Sub or
Radiance:
(a) Cancellation of Treasury Stock and Stock Owned by CVD. All
shares of capital stock owned by Radiance as treasury stock and all shares of
capital stock of Radiance owned by CVD or Sub shall be canceled and retired and
shall cease to exist and no stock of CVD or other consideration shall be
delivered in exchange therefor.
(b) Determination of Merger Consideration. Each issued and
outstanding share of Radiance common stock, $0.001 par value ("Radiance Common
Stock"), and each issued and outstanding share of Radiance Series A Preferred
Stock, $0.001 par value ("Radiance Preferred Stock"), issued and outstanding
immediately prior to the Effective Time, except as otherwise provided in Section
2.1(a), shall be converted into the right to receive the Merger Consideration as
follows:
(i) Radiance Common Stock Merger Consideration. Each share
of Radiance Common Stock issued and outstanding immediately prior to the
Effective Time, without any action on the part of the holders thereof,
shall be entitled to receive: (A) that number of shares of CVD common
stock, par value $0.001 per share ("CVD Common Stock"), equal to Two
Dollars ($2.00) of CVD Common Stock (the "Common Primary
Consideration"), as determined in accordance with Section 2.1(b)(iii),
below; (B) any Adjusted Additional Consideration, as set forth in
Section 2.1(b)(iv); and (C) any Milestone
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Payments, as set forth in Section 2.1(b)(v) hereof. CVD shall pay all of
the Common Primary Consideration, and any Adjusted Additional
Consideration and Milestone Payments payable with respect to the
Radiance Common Stock, in the form of shares of CVD Common Stock.
(ii) Radiance Preferred Stock Merger Consideration. Each
share of Radiance Preferred Stock issued and outstanding immediately
prior to the Effective Time, without any action on the part of the
holders thereof, shall be entitled to receive: (A) that number of shares
of CVD Common Stock equal to Three Dollars ($3.00) of CVD Common Stock
(the "Preferred Primary Consideration"), as determined in accordance
with Section 2.1(b)(iii), below; (B) any Adjusted Additional
Consideration, as set forth in Section 2.1(b)(iv) hereof; and (C) any
Milestone Payments, as set forth in Section 2.1(b)(v) hereof. CVD may
elect to pay a portion of such consideration in cash, as set forth in
Sections 2.1(b)(iii) and 2.1(c). The Common Primary Consideration and
the Preferred Primary Consideration are collectively referred to as the
"Primary Consideration," as applicable, and together with any Adjusted
Additional Consideration and any Milestone Payments, the "Merger
Consideration."
(iii) Value of Stock; Election of Radiance Stockholders;
Form of Consideration. By December 15, 1998, each Radiance Stockholder
shall elect either the method set forth in subsection 2.1(b)(iii)(A)
below or subsection 2.1(b)(iii)(B) below to value the shares of CVD
Common Stock to be received as part of the Primary Consideration. Any
Radiance Stockholder who fails to make such election shall receive
shares of CVD Common Stock valued as set forth in subsection
2.1(b)(iii)(B) below.
(A) The value of the CVD Common Stock issued as
part of the Primary Consideration shall be Three and 33/100
Dollars ($3.33) per share, which is the average of the closing
prices of CVD Common Stock as reported on the Nasdaq National
Market System ("Nasdaq") for the twenty trading days ending on
the trading day preceding the date hereof (the "Average Signing
Price"); provided, however, if the average of the closing prices
of CVD Common Stock as reported on the Nasdaq for the twenty
trading days ending on the trading day preceding the closing (the
"Average Closing Price") shall be greater than Five Dollars
($5.00) or less than Two Dollars ($2.00) such value shall be
adjusted as follows:
(x) if the Average Closing Price is greater
than $5.00, the value of CVD Common Stock issued as part of the
Primary Consideration shall be a number equal to the Average
Closing Price multiplied by a fraction, the numerator of which is
the Average Signing Price and the denominator of which is $5.00 ;
and
(y) if the Average Closing Price is less
than $2.00, the value of CVD Common Stock issued as part of the
Primary Consideration shall be a number equal to the Average
Closing Price multiplied by a fraction, the numerator of which is
the Average Signing Price and the denominator of which is $2.00.
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In the event that the value of the CVD Common Stock
is adjusted pursuant to this Section 2.1(b)(iii)(x) or
2.1(b)(iii)(y), the adjusted value shall be defined as the
"Deemed Price."
(B) The value of the CVD Common Stock issued as
part of the Primary Consideration shall be the Average Closing
Price.
In addition, in the event that the Average Closing
Price is less than Five Dollars ($5.00), CVD, at its option,
subject to Section 2.1(d), may elect to pay up to thirty percent
(30%) of the Primary Consideration in cash, which cash shall be
allocated in accordance with and subject to the provisions of
Section 2.1(c) (the "CVD Cash Amount"). For purposes of
determining the CVD Cash Amount, each share of CVD Common Stock
which could be issued as part of the Primary Consideration shall
be valued, for Radiance stockholders electing the valuation
method of subsection 2.1(b)(iii)(B), at the Average Closing
Price, and for Radiance Stockholders electing the valuation
method in subsection 2.1 (b)(iii)(A), at the Average Signing
Price; provided, however, that if the value of the CVD Common
Stock is adjusted pursuant to this Section 2.1(b)(iii)(x) or
2.1(b)(iii)(y), the value of the CVD Common Stock shall be at the
Deemed Price.
(iv) Adjusted Additional Consideration. In the event that
the registration statement described in Section 6.2 below is declared
effective more than thirty (30) days after the Closing, and the closing
price of CVD Common Stock as reported on Nasdaq on the trading day
immediately preceding the effective date of the registration (the
"Registration Date Price") of the CVD Common Stock is less than the
Average Closing Price, CVD shall pay to each holder of Radiance Common
Stock and Radiance Preferred Stock the difference between the Average
Closing Price and the Registration Date Price per each share of CVD
Common Stock issued to such holder pursuant to Sections 2.1(b)(i) and
2.1(b)(ii) (the "Adjusted Additional Consideration"). Any Adjusted
Additional Consideration shall be paid by CVD to the holders of Radiance
Common Stock and Radiance Preferred Stock within ten (10) days of the
effective date of such registration, based upon the Registration Date
Price, and shall be payable: (A) with respect to Radiance Preferred
Stock, at CVD's option, in CVD Common Stock or cash, in accordance with
Sections 2.1(b)(iii) and 2.1(c) and subject to Section 2.1(d); and (B)
with respect to Radiance Common Stock, shall be payable by delivery of
CVD Common Stock.").
(v) Milestone Payments. Upon completion by CVD, Sub or
their successors or assigns of the following milestones (each, a
"Milestone") related to beta emitting balloon catheters for the
treatment or prevention of restenosis, CVD shall pay within ten (10)
days of achieving each Milestone to each holder of Radiance Common Stock
and Radiance Preferred Stock and each person who held a Radiance Option
immediately prior to the Effective Time the following milestone payments
(the "Milestone Payments"):
(A) $.4615 for each share of Radiance Common Stock
(including shares underlying Radiance Options ) and $.3079 for
each share of Radiance Preferred Stock, upon the approval of an
IDE for the initiation of human clinical trials in the United
States by April 30, 1999;
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(B) $.9231 for each share of Radiance Common Stock
(including shares underlying Radiance Options ) and $.6153 for
each share of Radiance Preferred Stock, upon CE ▇▇▇▇ approval by
June 30, 2000;
(C) $.9231 for each share of Radiance Common Stock
(including shares underlying Radiance Options ) and $.6153 for
each share of Radiance Preferred Stock, upon acceptance by the
FDA of a PMA filing in the United States by September 30, 2000;
and
(D) $.6923 for each share of Radiance Common Stock
(including shares underlying Radiance Options ) and $.4615 for
each share of Radiance Preferred Stock, upon PMA approval in the
United States by October 31, 2001;
provided, however, that each Milestone Payment will be increased by ten
percent (10%) for each thirty (30) day period that such Milestone is
achieved in advance of the respective achievement date, up to a maximum
of one hundred and thirty percent (130%) of such Milestone Payment, and
each Milestone Payment will be decreased by ten percent (10%) for each
thirty (30) day period that such Milestone is not achieved following the
respective achievement date. If a Milestone is not achieved on or before
one-hundred and twenty (120) days following the respective achievement
date, no payment shall be made with respect to such Milestone.
(vi) Acceleration on Change of Control. In the event of a
"Change of Control" of CVD, which is not approved by the CVD Board of
Directors, all Milestone Payments remaining to be earned shall be
accelerated and payable upon the Change of Control. In addition, in the
event of any other Change of Control, CVD shall cause the successor or
acquiring entity to assume all CVD's obligations hereunder, including
the obligation to pay Milestone Payments when due and to fund
development as required by Section 6.9 of this Agreement. For purposes
hereof, "Change in Control" shall mean a change in ownership or control
of CVD and/or the Surviving Corporation, or any successor thereto,
effected through any of the following transactions:
(A) the acquisition, directly or indirectly, by any
person or related group of persons (other than CVD or a person
that directly or indirectly controls, is controlled by, or is
under common control with, CVD), of beneficial ownership (within
the meaning of Rule 13d-3 of the ▇▇▇▇ ▇▇▇) of securities
possessing more than fifty percent (50%) of the total combined
voting power of CVD's outstanding securities pursuant to a tender
or exchange offer made directly to CVD's stockholders, or
(B) a change in the composition of the Board of
Directors of CVD over a period of thirty-six (36) consecutive
months or less such that a majority of the Board members ceases,
by reason of one or more contested elections for Board
membership, to be comprised of individuals who either (A) have
been Board members continuously since the beginning of such
period or (B) have been elected or nominated for election as
Board members during such period by at least a majority of
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the Board members described in clause (A) who were still in
office at the time the Board approved such election or
nomination; or
(C) a merger or consolidation in which securities
possessing more than fifty percent (50%) of the total combined
voting power of CVD's and/or the Surviving Corporation's
outstanding securities are transferred to a person or persons
different from the persons holding those securities immediately
prior to such transaction; or
(D) the sale, transfer or other disposition of all
or substantially all of CVD's and/or the Surviving Corporation's
assets; or
(E) the acquisition, directly or indirectly, by any
person or group of related persons (other than CVD or a
wholly-owned subsidiary of CVD) of securities possessing more
than fifty percent (50%) of the total combined voting power of
the Surviving Corporation's outstanding securities.
(vii) Form and Payment of Milestone Payment. Each
Milestone Payment shall be payable in CVD Common Stock, valued at
the average of the closing prices of CVD Common Stock as reported
on Nasdaq for the twenty (20) trading days ending on the trading
day preceding the day that a Milestone is achieved (with respect
to any particular Milestone, the "Average Milestone Price"). If
any Average Milestone Price is less than Five Dollars ($5.00),
CVD, at its option, subject to Section 2.1(d), may pay up to
thirty percent (30%) of such Milestone Payment in cash, which
cash shall be allocated in accordance with Section 2.1(c);
provided, however, that Milestone Payments with respect to
Radiance Common Stock and Radiance Options outstanding
immediately prior to the Effective Time shall be made only in
shares of CVD Common Stock.
(viii) Adjustments for Recapitalizations, Etc. If
prior to the payment of the last Milestone Payment hereunder the
outstanding shares of CVD Common Stock shall have been changed
into a different number of shares or different class, by reason
of a stock dividend, subdivision, reclassification,
recapitalization, split, combination or exchange of shares, the
Merger Consideration remaining to be paid shall be adjusted
correspondingly to reflect such stock dividend, subdivision,
reclassification, recapitalization, split, combination or
exchange of shares.
(ix) Potential Escrow of Milestone Payments. In the
event CVD has pending claims for CVD Indemnifiable Damages (as
that term is defined in Section 9.2(a)) made during the
Indemnification Period, then all or a portion of any subsequent
Milestone Payments shall be deposited in escrow, pursuant to the
terms of an Escrow Agreement, substantially in the form of
Exhibit A (the "Escrow Agreement"), by and among CVD, ▇▇▇▇▇▇▇
▇▇▇▇▇▇ as representative of the Radiance Stockholders) (the
"Representative") [Southern California Bank], as escrow agent
(the "Escrow Agent"). The total amount of such Milestone Payments
deposited shall not exceed the amount of the then pending claims,
with the CVD
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Common Stock valued at the applicable Average Milestone Price as
specified in Section 2.1(b)(vii). Any excess of Milestone
Payments over the amount of the then pending claims, and any
Milestone Payments payable at such time that no claims are
pending, shall be paid to the persons entitled thereto pursuant
to Section 2.1(b)(v). Any shares of CVD Common Stock included
with the Milestone Payments that are deposited into escrow shall
be registered in the names of the holders, immediately prior to
the Effective Time, of Radiance Preferred Stock, Radiance Common
Stock and Radiance Options, but shall be held by the Escrow
Agent, such deposit to constitute an escrow fund to be governed
by the terms set forth herein and in the Escrow Agreement. The
adoption and approval of the Merger by the Radiance stockholders
shall constitute initial approval of the Escrow Agreement and of
the appointment of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ as the Representative.
(c) Optional Cash or Stock Election. In the event that CVD elects
to pay a portion of the Merger Consideration in cash, as set forth in Sections
2.1(b)(iii), 2.1(b)(iv) and 2.1(b)(vii), and subject to the allocation and
election procedure set forth in this Section 2.1(c), each record holder of
shares of Radiance Preferred Stock immediately prior to the Effective Time will
be entitled to elect to receive all or a portion of such Merger Consideration in
cash (a "Cash Election"). All such elections shall be made concurrently with the
election set forth in Section 2.1(b)(iii) on a form designed for that purpose
and shall indicate the percentage of the Merger Consideration such holder
desires to receive in cash. If the aggregate amount of cash to be paid by CVD at
the time of any payment is insufficient to satisfy all Cash Elections, such cash
shall be distributed among the holders of Radiance Preferred Stock, pro rata, in
accordance with the relative amounts of cash indicated by such Cash Election. To
the extent that the amount of cash to be paid by CVD exceeds the aggregate
amount indicated by such Cash Elections, all such Cash Elections shall be
satisfied and the remaining cash shall be distributed, to all holders of
Radiance Preferred Stock immediately prior to the Effective Time, pro rata,
based on the number of shares of Radiance Preferred Stock held by each such
holder immediately prior to the Effective Time. Any holder of Radiance Preferred
Stock who does not submit a Form of Election prior to the Effective Date shall
be deemed to have made an election to receive cash in a percentage equal to the
percentage of cash which CVD has elected to pay pursuant to Sections
2.1(b)(iii), 2.1(b)(iv) and 2.1(b)(vii).
(d) Limit on Payment of Cash Consideration. Notwithstanding any
other provision in this Agreement, in no event shall the total amount of cash to
be paid by CVD as a component of the Merger Consideration, including any cash
paid pursuant to Sections 2.2 and 2.3, exceed thirty percent (30%) of the total
of all of the Merger Consideration, valuing each share of CVD Common Stock for
this purpose at its fair market value on the date each share is payable
hereunder, which fair market value shall be the closing price of CVD Common
Stock as reported on Nasdaq on the trading day immediately preceding the payment
date of such share reduced by a reasonable discount for the shares that are not
registered but are subject to registration as provided in this Agreement, which
discount shall be determined by CVD in its reasonable judgment.
2.2 Dissenting Shares.
(a) Notwithstanding anything to the contrary in this Agreement,
each share of Radiance Common Stock and Radiance Preferred Stock issued and
outstanding immediately prior to the Effective Time that is held by any
stockholder who has not voted in favor of the Merger, has
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perfected such holder's right to an appraisal of such holder's shares in
accordance with the applicable provisions of the DGCL and the California General
Corporation Law ("CGCL"), as applicable, and has not effectively withdrawn or
lost such right to appraisal (a "Dissenting Share"), shall not be converted into
the right to receive the Merger Consideration pursuant to Section 2.1(b), but
shall be entitled only to such rights as are granted by the applicable
provisions of the DGCL and CGCL, as applicable; provided, however, that any
Dissenting Share held by a person at the Effective Time who shall, after the
Effective Time, withdraw the demand for appraisal or lose the right of
appraisal, in either case pursuant to the DGCL and CGCL, as applicable, shall be
deemed to be converted into, as of the Effective Time, the right to receive the
Merger Consideration pursuant to Section 2.1(b).
(b) Radiance shall give CVD (i) prompt notice of any written
demands for appraisal, withdrawals of demands for appraisal and any other
instruments served pursuant to the applicable provision of the DGCL and CGCL, as
applicable, relating to the appraisal process received by Radiance and (ii) the
opportunity to direct all negotiations and proceedings with respect to demands
for appraisal under the DGCL and CGCL, as applicable, with the participation of
Radiance. Radiance will not voluntarily make any payment with respect to any
demands for appraisal and will not, except with the prior written consent of
CVD, settle or offer to settle any such demands.
2.3 Fractional Shares. No fractional shares of CVD Common Stock shall be
issued, but in lieu thereof each holder of shares of Radiance Common Stock,
Radiance Preferred Stock and Radiance Options who otherwise would be entitled to
receive a fraction of a share of CVD Common Stock (after aggregating all
fractional shares of CVD Common Stock to be received by such holder), shall
receive from CVD an amount of cash (rounded up to the nearest whole cent) equal
to the product of the fraction of a share of CVD Common Stock to which such
holder would otherwise be entitled, times the Average Closing Price.
2.4 Treatment of Radiance Options. Each Radiance Option shall accelerate
and vest immediately prior to the Closing and, to the extent not exercised at
the Closing, shall be assumed by CVD. Each Radiance Option to purchase one share
of Radiance Common Stock shall be converted into an option, at the same exercise
price, to purchase that number of shares of CVD Common Stock as equals Two
Dollars ($2.00), based upon the Average Closing Price.
2.5 Exchange of Certificates.
(a) Exchange Agent. Prior to the Effective Time, CVD shall
designate a bank or trust company reasonably acceptable to Radiance (the
"Exchange Agent"). On the Closing Date, CVD shall deposit with the Exchange
Agent a combination of cash and certificates representing the number of duly
authorized whole shares of CVD Common Stock issuable in connection with the
Merger which shall comprise the Merger Consideration as of the Closing Date,
plus an amount of cash equal to the aggregate amount payable in lieu of
fractional shares in accordance with Section 2.3, to be held for the benefit of
and distributed to such holders in accordance with this Section 2.5. The
Exchange Agent shall agree to hold such shares of CVD Common Stock and funds
(such shares of CVD Common Stock and funds, together with earnings thereon,
being referred to herein as the "Exchange Fund") for delivery as contemplated by
this Section 2.5 and upon such additional terms as may be agreed upon by the
Exchange Agent, Radiance and CVD before the
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Effective Time. If for any reason (including losses) the amount of cash in the
Exchange Fund is inadequate to pay the cash amounts to which holders of shares
of Radiance Common Stock and Radiance Preferred Stock shall be entitled pursuant
to Section 2.3, CVD shall make available to the Surviving Corporation additional
funds for the payment thereof.
(b) Radiance Stock Exchange Procedures. As soon as reasonably
practicable after the Effective Time, CVD shall cause the Exchange Agent to mail
to each holder of record of a certificate or certificates which, immediately
prior to the Effective Time, represented outstanding shares of Radiance Common
Stock and Radiance Preferred Stock (individually, a "Certificate" and
collectively, the "Certificates"), and whose shares are to be exchanged pursuant
to Section 2.1 into the right to receive the Merger Consideration: (i) a letter
of transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass only upon delivery of the
Certificates to the Exchange Agent and shall be in such form and have such other
provisions as CVD may reasonably specify) and (ii) instructions for use in
effecting the surrender of Certificates in exchange for certificates
representing shares of CVD Common Stock constituting the Merger Consideration
and cash (whether in lieu of fractional shares or as a component of the Merger
Consideration). Upon surrender of a Certificate for cancellation to the Exchange
Agent, together with such letter of transmittal duly executed and completed in
accordance with its terms, the holder of such Certificate shall be entitled to
receive in exchange therefor a certificate representing that number of whole
shares of CVD Common Stock constituting the Merger Consideration, any cash
component of the Merger Consideration and the cash amount payable in lieu of
fractional shares in accordance with Section 2.3, and the Certificate so
surrendered shall forthwith be canceled. In no event shall the holder of any
Certificate be entitled to receive interest on any funds to be received in the
Merger. In the event of a transfer of ownership of Radiance Common Stock or
Radiance Preferred Stock which is not registered in the transfer records of
Radiance, a certificate representing that number of whole shares of CVD Common
Stock constituting the Merger Consideration, any cash component of the Merger
Consideration and the cash amount payable in lieu of fractional shares in
accordance with Section 2.3, may be paid and issued to a transferee if the
Certificate representing such Radiance Common Stock or Radiance Preferred Stock
is presented to the Exchange Agent accompanied by all documents required to
evidence and effect such transfer and by evidence that any applicable stock
transfer taxes have been paid. Until surrendered as contemplated by this Section
2.5(b), each Certificate shall be deemed at any time after the Effective Time
for all corporate purposes of CVD, except as limited by paragraph (c) below, to
represent ownership of the number of shares of CVD Common Stock into which the
number of shares of Radiance Common Stock or Radiance Preferred Stock shown
thereon have been converted as contemplated by this Article 2.
(c) Distributions with Respect to Unexchanged Shares. No
dividends or other distributions declared or made after the Effective Time with
respect to CVD Common Stock with a record date on or after the Effective Time
shall be paid to the holder of any unsurrendered Certificate with respect to the
shares of CVD Common Stock represented thereby and no cash payment in lieu of
fractional shares shall be paid to any such holder pursuant to Section 2.3 until
the holder of record of such Certificate shall surrender such Certificate in
accordance with this Section 2.5. Subject to the effect of applicable laws,
following surrender of any such Certificate, there shall be paid to the record
holder of the certificates representing whole shares of CVD Common Stock issued
in exchange therefor, without interest, (i) at the time of such surrender, the
amount of dividends or other distributions, if any, with a record date on or
after the Effective Time which theretofore
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became payable, but which were not paid by reason of the immediately preceding
sentence, with respect to such whole shares of CVD Common Stock, and (ii) at the
appropriate payment date, the amount of dividends or other distributions with a
record date on or after the Effective Time but prior to surrender and a payment
date subsequent to surrender payable with respect to such whole shares of CVD
Common Stock.
(d) No Further Ownership Rights in Radiance Stock and Radiance
Options. Each holder of Radiance Common Stock and/or Radiance Preferred Stock
that have been converted into the Merger Consideration, upon surrender to the
Exchange Agent of Certificates in accordance with the terms hereof, together
with a properly completed letter of transmittal and Form of Election covering
such Radiance Preferred Stock and other customary documentation, will be
entitled to receive the Merger Consideration payable in respect of such Radiance
Common Stock and/or Radiance Preferred Stock. As of the Effective Time, all such
Radiance Common Stock and/or Radiance Preferred Stock shall no longer be
outstanding and shall automatically be canceled and retired and shall cease to
exist, and each holder of Certificates previously representing any such Radiance
Common Stock and/or Radiance Preferred Stock shall cease to have any rights with
respect thereto, except the right to receive the Merger Consideration upon
surrender of the certificates representing such Radiance Common Stock and/or
Radiance Preferred Stock, as contemplated hereby. From and after the Effective
Time, the stock transfer books of Radiance shall be closed and there shall be no
further registration of transfers on the stock transfer books of the Surviving
Corporation of the shares of Radiance Common Stock and Radiance Options which
were outstanding immediately prior to the Effective Time. If, after the
Effective Time, Certificates are presented to the Surviving Corporation for any
reason, they shall be canceled and exchanged as provided in this Section 2.5.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF RADIANCE
Radiance represents and warrants to CVD and Sub that:
3.1 Organization and Qualification. Radiance is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite corporate power and authority to carry on its
business as now conducted and as proposed to be conducted. Radiance is duly
qualified or licensed to do business and is in good standing in each
jurisdiction in which the nature of its business or the ownership or leasing of
its properties makes such qualification or licensing necessary, other than in
such jurisdictions where the failure to be so qualified or licensed or to be in
good standing (individually or in the aggregate) would not have a materially
adverse effect on the business, condition (financial or otherwise), properties,
assets (including intangible assets), liabilities (including contingent
liabilities), prospects, or results of operations of Radiance (a "Material
Adverse Effect"). Subject to obtaining Radiance Stockholder's Approval, Radiance
has all requisite corporate power and authority to execute and deliver this
Agreement.
3.2 Subsidiaries. Radiance does not own, directly or indirectly, any
capital stock or other ownership interest in any corporation, partnership, joint
venture, or other entity.
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3.3 Authority Relative to this Agreement. Subject to obtaining Radiance
Stockholders' Approval, Radiance has full corporate power and authority to enter
into this Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement by Radiance and the consummation by Radiance of the transactions
contemplated hereby have been duly authorized and approved by the Board of
Directors of Radiance, the Board of Directors of Radiance has agreed to
recommend adoption of this Agreement by the stockholders of Radiance and
directed that this Agreement be submitted to the stockholders of Radiance for
their consideration, and no other corporate proceedings on the part of Radiance
or its stockholders are necessary to authorize the execution, delivery and
performance of this Agreement by Radiance and the consummation by Radiance of
the transactions contemplated hereby, other than obtaining Radiance
Stockholders' Approval. Radiance Stockholders' Approval means the requisite
approvals of the shareholders of Radiance of this Agreement and the Merger
required by the DGCL and the CGCL, as applicable, and the Certificate of
Incorporation and Bylaws of Radiance. Radiance has received and has provided to
CVD the voting agreements of the Radiance stockholders listed on Schedule 3.3 to
approve the Merger. Subject to obtaining Radiance Stockholders' Approval, this
Agreement has been duly authorized and validly executed by Radiance and
constitutes a valid and legally binding obligation of Radiance, enforceable in
accordance with its terms except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, and other laws of general application
affecting enforcement of creditors' rights generally, and (ii) as limited by
laws relating to the availability of specific performance, injunctive relief, or
other equitable remedies (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
3.4 Capital Stock of Radiance.
(a) The authorized capital stock of Radiance consists of
30,000,000 shares of Radiance Common Stock and 20,000,000 shares of Radiance
preferred stock, of which 2,700,000 shares are designated as Series A
Convertible Preferred and 2,250,000 of which are designated as Series B
Convertible Preferred Stock. As of the date hereof, 315,000 shares of Common
Stock, 2,325,930 shares of Series A Convertible Preferred Stock and 2,250,000
shares of Series B Convertible Preferred Stock, were issued and outstanding and
no shares of Common Stock are held by Radiance in its treasury. As of the date
hereof, there are outstanding Radiance Options to purchase approximately 550,000
shares of Radiance Common Stock and no unvested options; and 1,000,000 shares of
Radiance Common Stock are reserved for issuance upon the exercise of Radiance
Options. Except as disclosed in Section 3.4 of the Radiance Disclosure Schedule,
all outstanding shares of capital stock of Radiance are duly authorized, validly
issued, fully paid, and nonassessable and not subject to preemptive rights.
There are no bonds, debentures, notes, or other indebtedness of Radiance having
the right to vote (or convertible into securities having the right to vote) on
any matters on which stockholders of Radiance may vote. Except as set forth in
Section 3.4 of the Radiance Disclosure Schedule, as of the date hereof, there
are no securities, options, warrants, calls, rights, commitments, agreements,
arrangements, or undertakings of any kind to which Radiance is a party or by
which it is bound obligating Radiance to issue, deliver or sell, or cause to be
issued, delivered or sold, additional shares of capital stock or other voting
securities of Radiance or obligating Radiance to issue, grant, extend or enter
into any such security, option, warrant, call, right, commitment, agreement,
arrangement or undertaking (together, "Options"). Except as disclosed in Section
3.4 of the Radiance Disclosure Schedule, as of the date hereof, there are no
outstanding contractual obligations of Radiance to repurchase, redeem, or
otherwise acquire any
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shares of capital stock of Radiance. Radiance has furnished to CVD true and
correct copies of Radiance's Certificate of Incorporation and Bylaws as in
effect as of the date hereof. The offers and sales of all of the outstanding
shares of capital stock of Radiance were at all relevant times either registered
under the Securities Act of 1933, as amended (the "Securities Act"), and
applicable state securities laws or exempt from such requirements.
(b) Radiance acknowledges that the offering and sale of the CVD
Common Stock to be issued in exchange for all the outstanding shares of capital
stock of Radiance and upon exercise of Radiance Options have not been registered
with the Securities and Exchange Commission (the "SEC") or any state securities
laws and is intended to be exempt from registration under the Securities Act by
virtue of Section 4(2) of the Securities Act and the provisions of Regulation D
promulgated thereunder ("Regulation D"). To the actual knowledge of Radiance,
without investigation, the holders of all the outstanding shares of capital
stock of Radiance fulfill, and will fulfill as the Effective Time, the investor
suitability requirements under Section 4(2) of the Securities Act and Regulation
D. Radiance shall use its best efforts to obtain from each Radiance shareholder
a confirmation that such shareholder is an "accredited investor" as defined
under Regulation D. Notwithstanding anything herein to the contrary, Radiance
assumes no responsibility for CVD's compliance with the applicable federal and
state securities laws in connection with the Merger and issuance of CVD Common
Stock and CVD options. Radiance acknowledges that the shares of CVD Common Stock
are restricted securities and must be held indefinitely unless subsequently
registered under the Securities Act or unless an exemption from such
registration is available.
(c) Except as disclosed in Section 3.4(c) of the schedule
attached hereto (the "Radiance Disclosure Schedule"), there are no (i)
outstanding Options obligating Radiance or (ii) voting trusts, proxies or other
commitments, understandings, restrictions or arrangements in favor of any person
other than Radiance.
3.5 Non-Contravention; Approvals and Consents.
(a) Except as disclosed in Section 3.5 of Radiance Disclosure
Schedule, and except for the filing of the Agreement of Merger and other
appropriate merger documents required by the DGCL with the Secretary of State
and appropriate documents with the relevant authorities of other states in which
the Constituent Corporations are qualified to do business, the execution and
delivery of this Agreement by Radiance does not, and the performance by Radiance
of its obligations hereunder and the consummation of the transactions
contemplated hereby will not, conflict with, result in a violation or breach of,
constitute (with or without notice or lapse of time or both) a default under,
result in or give to any person any right of payment or reimbursement,
termination, cancellation, modification or acceleration of, or result in the
creation or imposition of any pledges, claims, liens, charges, encumbrances, and
security interests of any kind or nature whatsoever (collectively, "Liens") upon
any of the assets or properties of Radiance under, any of the terms, conditions
or provisions of (i) the Certificate of Incorporation or Bylaws of Radiance, or
(ii) (x) any statute, law, rule, regulation or ordinance (together, "Laws"), or
any judgment, decree, order, writ, permit or license (together, "Orders"), of
any court, tribunal, arbitrator, authority, agency, commission, official or
other instrumentality of the United States or any state, county, city or other
political subdivision (a "Governmental or Regulatory Authority"), applicable to
Radiance or any of its assets or properties, or (y) any note, bond, mortgage,
security agreement, indenture, license,
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franchise, permit, concession, contract, lease or other instrument, obligation
or agreement of any kind (together, "Contracts") to which Radiance is a party or
by which Radiance or any of its assets or properties is bound, excluding from
the foregoing clauses (x) and (y) conflicts, violations, breaches, defaults,
payments, reimbursements, terminations, cancellations, modifications,
accelerations and creations and impositions of Liens which, individually or in
the aggregate, could not reasonably be expected to have a Material Adverse
Effect on Radiance or on the ability of Radiance to consummate the transactions
contemplated by this Agreement.
(b) Other than obtaining Radiance Stockholder's Approval and
except as disclosed in Section 3.5 of Radiance Disclosure Schedule, no consent,
approval or action of, filing with or notice to any Governmental or Regulatory
Authority or other public or private third party is necessary or required under
any of the terms, conditions or provisions of any Law or Order of any
Governmental or Regulatory Authority or any contract to which Radiance is a
party or by which Radiance or any of its assets or properties is bound for the
execution and delivery of this Agreement by Radiance, the performance by
Radiance of its obligations hereunder or the consummation of the transactions
contemplated hereby, other than such consents, approvals, actions, filings and
notices which the failure to make or obtain, as the case may be, individually or
in the aggregate, could not reasonably be expected to have a Material Adverse
Effect on Radiance or on the ability of Radiance to consummate the transactions
contemplated by this Agreement.
3.6 Financial Statements. Radiance has delivered to CVD a true and
complete copy of the following financial statements: (i) the audited balance
sheets of Radiance as of December 31, 1997 and the related audited statement of
operations for the fiscal year then ended; and (ii) the unaudited balance sheet
of Radiance as of June 30, 1998 and the unaudited statement of operations for
such interim period (the "Radiance Financial Statements'). As of their
respective dates and for the respective periods then ended, the audited
financial statements and unaudited interim financial statements (including, in
each case, the notes, if any, thereto) included in Radiance Financial Statements
(A) were prepared in accordance with generally accepted accounting principles
applied on a consistent basis during the periods involved (except as may be
indicated therein or in the notes thereto) and (B) fairly present (subject, in
the case of the unaudited interim financial statements, to normal, recurring
year-end audit adjustments which are not expected to be, individually or in the
aggregate, materially adverse to Radiance and to the absence of certain footnote
disclosures) the financial position of Radiance as at the respective dates
thereof and the results of its operations and cash flows for the respective
periods then ended.
3.7 Absence of Changes. Except as disclosed in Section 3.7 of the
Radiance Disclosure Schedule and except for matters reflected or reserved
against in the balance sheet for the period ended December 31, 1997 included in
Radiance Financial Statements, since December 31, 1997 Radiance has conducted
its business only in the ordinary course, consistent with past practice and
there has been no change and no development in the business, properties,
operations, condition (financial or otherwise), or results of operations of
Radiance that had or could reasonably be expected to have a Material Adverse
Effect other than those occurring as a result of general economic or financial
conditions or other developments that are not unique to Radiance but also affect
other persons who participate or are engaged in the lines of business in which
Radiance participates or is engaged, or other than those occurring as a result
of this Agreement and the transactions contemplated hereby.
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3.8 Absence of Undisclosed Liabilities. Except for liabilities that are
disclosed in this Section 3 and/or in the Radiance Disclosure Schedule and
except for matters reflected or reserved against in the balance sheet for the
period ended December 31, 1997 or in the June 30, 1998 Radiance balance sheet
for the period ended June 30, 1998 included in Radiance Financial Statements,
Radiance did not have at such date, nor has Radiance incurred since that date,
any liabilities or obligations (whether absolute, accrued, contingent, fixed or
otherwise, or whether due or to become due) of any nature that would be required
by generally accepted accounting principles to be reflected on a balance sheet
of Radiance (including the notes thereto), except liabilities or obligations (i)
which were incurred in the ordinary course of business consistent with past
practice or (ii) which have not been, and could not be reasonably expected to
have a Material Adverse Effect on Radiance.
3.9 Legal Proceedings. Except as disclosed in Section 3.9 of Radiance
Disclosure Schedule, (i) there are no actions, suits, arbitrations or
proceedings pending or, to the knowledge of Radiance, threatened against,
relating to or affecting, nor to the knowledge of Radiance are there any
Governmental or Regulatory Authority investigations or audits pending or
threatened against, relating to or affecting, Radiance or any of its assets and
properties which could reasonably be expected to have a Material Adverse Effect
on Radiance or on the ability of Radiance to consummate the transactions
contemplated by this Agreement, and (ii) Radiance is not subject to any Order of
any Governmental or Regulatory Authority which is having or could be reasonably
expected to have a Material Adverse Effect on Radiance, or on the ability of
Radiance to consummate the transactions contemplated by this Agreement.
3.10 Contracts and Commitments. Section 3.10 of Radiance Disclosure
Schedule contains a true and complete list of each of the following written, or
to Radiance's knowledge, oral, contracts (the "Material Contracts') to which
Radiance is a party: (i) all Contracts (excluding Radiance Employee Benefit
Plans which can be terminated at will without subjecting Radiance to cost or
penalty) providing for a commitment for employment or consultation services for
a specified or unspecified term to, or otherwise relating to employment or the
termination of employment of, any employee; (ii) all Contracts with any Person
containing any provision or covenant prohibiting or limiting the ability of
Radiance to engage in any business activity or compete with any Person in
connection with its business or prohibiting or limiting the ability of any
Person to compete with Radiance in connection with its business; (iii) all
partnership, joint venture, stockholders' or other similar Contracts with any
Person in connection with Radiance's business; (iv) all Contracts relating to
the future disposition or acquisition of assets of Radiance, other than as
contemplated by this Agreement or dispositions or acquisitions in the ordinary
course of business; (v) all other Contracts with respect to Radiance that (A)
involve the payment or potential payment, pursuant to the terms of any such
Contract, by or to Radiance of more than $25,000 annually and (B) cannot be
terminated within sixty (60) days after giving notice of termination without
resulting in any material cost or penalty to Radiance. To the knowledge of
Radiance, there is no default or event that with notice or lapse of time, or
both, would constitute a material default by Radiance under any of the Material
Contracts to which it is a party. Radiance has not received notice of a default
under any Material Contract by any party thereto. Each of the Material Contracts
is enforceable against Radiance in accordance with its terms, except as such
enforceability may be limited by general principles of equity or by bankruptcy,
insolvency or other similar laws relating to rights of creditors. Radiance has
not received notice that any party to any of the Material Contracts intends to
cancel or terminate
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any of the Material Contracts or to exercise or not exercise any options under
any of the Material Contracts.
3.11 Taxes. Radiance has filed all tax returns that are required to have
been filed by it in any jurisdiction for all periods ending on or prior to the
date hereof and to the knowledge of Radiance such tax returns are true, correct
and complete in all material respects, and to its knowledge Radiance has paid
all taxes shown to be due and payable on such returns and all other taxes and
assessments payable by it to the extent the same have become due and payable and
before they have become delinquent, except for any taxes and assessments the
amount, applicability or validity of which is currently being contested in good
faith by appropriate proceedings and with respect to which Radiance has set
aside on its books reserves (segregated to the extent required by generally
accepted accounting principles, consistently applied throughout the specified
period and in the immediately comparable period) deemed by it in its reasonable
discretion to be adequate. Radiance has no knowledge of any proposed material
tax assessment, obligation or other claim against Radiance. There are no
material liens for taxes upon any property or assets of Radiance, except for
liens for taxes not yet due. There are no unresolved issues of law or fact
arising out of a notice of deficiency, proposed deficiency or assessment from
the Internal Revenue Service ("IRS") or any other governmental taxing authority
with respect to taxes of Radiance which, if decided adversely would have a
Material Adverse Effect on Radiance. Radiance is not a party to any agreement
providing for the allocation or sharing of taxes with any entity other than
agreements the consequences of which are adequately reserved for in Radiance
Financial Statements. Radiance has not, with regard to any assets or property
held, acquired or to be acquired by it, filed a consent to the application of
Section 341(f) of the Code.
3.12 Employee Benefit Plans.
(a) Except as set forth in Section 3.12 of Radiance Disclosure
Schedule, Radiance has no Employee Benefit Plan or other Plan, except for such
Employee Benefit Plans and other Plans which are provided and maintained by CVD.
(b) As used herein:
(i) "Employee Benefit Plan" means any Plan entered into,
established, maintained, contributed to or required to be contributed to
by Radiance and existing on the date of this Agreement or at any time
subsequent thereto and on or prior to the Effective Time and, in the
case of a Plan which is subject to Part 3 of Title I of ERISA, Section
412 of the Code or Title IV of ERISA, at any time during the five-year
period preceding the date of this Agreement; and
(ii) "Plan" means any employment, bonus, incentive
compensation, deferred compensation, pension, profit sharing,
retirement, stock purchase, stock option, stock ownership, stock
appreciation rights, phantom stock, leave of absence, layoff, vacation,
day or dependent care, legal services, cafeteria, life, health, medical,
accident, disability, workers' compensation or other insurance,
severance, separation, termination, change of control or other benefit
plan, agreement, practice, policy or arrangement of any kind, whether
written or oral, including, but not limited to any "employee benefit
plan" within the meaning of Section 3(3) of ERISA.
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3.13 Title to Assets. Radiance is in possession of and has good title
to, or has valid leasehold interests in or valid rights under contract to use,
all of its properties and assets primarily used in its business and material to
the condition (financial or other) of such business, free and clear of all
Liens, except (i) the lien for current taxes, payments of which are not yet
delinquent, (ii) such imperfections in title and easements and encumbrances, if
any, as are not substantial in character, amount or extent and do not materially
detract from the value of or interfere with the present use of the property
subject thereto or affected thereby, or otherwise materially impair Radiance's
business operations (in the manner presently carried on by Radiance) or (iii) as
disclosed in Radiance Financial Statements, and except for such matters which,
individually or in the aggregate, would not have a Material Adverse Effect on
Radiance. All leases under which Radiance leases any substantial amount of real
or personal property have been made available to CVD and are in good standing,
valid and effective in accordance with their respective terms, and there is not,
under any of such leases, any existing default by Radiance or to the knowledge
of Radiance any event which with notice or lapse of time or both would become a
default by Radiance other than defaults under such leases which in the aggregate
would not have a Material Adverse Effect on Radiance.
3.14 Permits, Etc. Radiance owns or validly holds all material licenses,
permits, certificates of authority, registrations, franchises and similar
consents granted or issued by any applicable Governmental or Regulatory
Authority, used or held for use which are required to conduct and material to
the condition of its business.
3.15 Compliance with Laws. To the knowledge of Radiance, Radiance is not
in violation of, nor has it violated, any applicable provisions of any Laws or
any term of any Order binding against it, except for violations which do not
have and would not have, a Material Adverse Effect on Radiance. Section 3.15 of
Radiance Disclosure Schedule sets forth a complete list of Radiance's licenses,
permits and authorizations ("Permits") other than those not material to the
business or operations of Radiance. Since December 31, 1997, no state or federal
governmental entity has revoked or materially limited any license or certificate
of authority of Radiance material to its business, and no investigation or
proceeding is pending or, to Radiance's knowledge, threatened, which involves
the revocation or material limitation of any of such licenses or certificates.
Radiance has no knowledge of any information which would lead Radiance to
believe that any licenses or permits necessary to the conduct of the business of
Radiance as presently conducted will not remain in full force and effect for the
complete duration of their terms. Radiance has made available to CVD all
material filings made to, and all inspection or compliance reports or
correspondence received from, Governmental Entities for the last three years and
will make available to CVD all other Permits as requested by CVD. To the
knowledge of Radiance, each of such filings was in material compliance with all
applicable laws and regulations.
3.16 FDA Matters. Except as otherwise set forth in Section 3.16 of
Radiance Disclosure Schedule:
(a) To the knowledge of Radiance, Radiance is in compliance in
all material respects with all current applicable laws, statutes, rules,
regulations, standards, guides or orders administered, issued or enforced by the
FDA or any other Governmental or Regulatory Authority having regulatory
authority or jurisdiction over the products and operations of Radiance.
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(b) Radiance has not received from the FDA or any other
Governmental or Regulatory Authority, and Radiance has no knowledge of any facts
which would furnish any reasonable basis for, any notice of adverse findings,
FDA Form 483 inspectional observations, regulatory letters, notices of
violations, warning letters, Section 305 criminal proceeding notices under the
Federal Food, Drug and Cosmetic Act or other similar communication from the FDA
or other Governmental or Regulatory Authority, and to the knowledge of Radiance
there have been no seizures conducted or threatened by the FDA or other
Governmental or Regulatory Authority.
(c) To the knowledge of Radiance, there are no facts which are
reasonably likely to cause (i) the non-approval or non clearance, denial,
withdrawal, recall or require suspension or additional approvals or clearances
of any products intended to be sold by Radiance, or (ii) a change in the
manufacturing, marketing classification, labeling or intended use of any such
products.
3.17 Labor Controversies.
(a) There are no material controversies pending or, to the
knowledge of Radiance, threatened between Radiance and any representatives of
any of Radiance's employees.
(b) To the knowledge of Radiance, there are no material
organizational efforts presently being made involving any of the presently
unorganized employees of Radiance.
(c) To the knowledge of Radiance, Radiance has complied in all
material respects with all laws relating to the employment of labor, including
without limitation, any provisions thereof relating to wages, hours, collective
bargaining, and the payment of social security and similar taxes, with respect
to its employees on the Radiance payroll.
(d) To the knowledge of Radiance, no person has asserted that
Radiance is liable in any material amount for any arrears of wages or any taxes
or penalties for failure to comply with any of the foregoing (subject to the
proviso set forth in subparagraph (a) above), except for such controversies,
organizational efforts, non-compliance and liabilities which, individually or in
the aggregate, could not be reasonably expected to have a Material Adverse
Effect on Radiance.
3.18 Insurance. Section 3.18 of Radiance Disclosure Schedule lists all
policies of fire, liability, life and employee health, environmental, errors and
omissions, workers' compensation and other forms of insurance currently held and
maintained by Radiance (the "Insurance Policies"). Radiance believes that such
Insurance Policies are commercially reasonable in amount and coverage. To the
knowledge of Radiance, all of the Insurance Policies are in full force and
effect, all billed premiums with respect thereto covering all periods up to and
including the Closing Date have been paid or will have been paid on or prior to
the Closing Date and no written notice of cancellation or termination has been
received with respect to any such Policy, except for failures to pay or
cancellations or terminations which would not reasonably be expected to have a
Material Adverse Effect on Radiance.
3.19 Guaranties. Radiance has not executed any guaranty or otherwise
agreed to be a guarantor of any liability or obligation (including indebtedness)
of any other person.
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3.20 Tax-Free Reorganization. Radiance has not taken and has not agreed
to take any action that would interfere with the ability of CVD to treat the
Merger as a tax-free reorganization within the meaning of Section 368(a)(1)(A)
and 368(a)(2)(D) of the Code.
3.21 Board of Directors and Stockholder Approval. The Board of Directors
has approved and adopted this Agreement and has authorized the officers of
Radiance to enter into this Agreement and to submit it to the Radiance
stockholders for their approval.
3.22 Brokers and Finders. Other than ▇▇▇▇▇▇▇ Mitani Capital, LLC,
Radiance has not employed any broker, finder, consultant or intermediary in
connection with the transactions contemplated by this Agreement who would be
entitled to a broker's, finder's or similar fee or commission in connection
therewith or upon the consummation thereof. Radiance is solely responsible for
the payment of any fee, commission or reimbursement that may be due to or become
payable to ▇▇▇▇▇▇▇ Mitani Capital, LLC, in connection with the transactions
contemplated by this Agreement.
3.23 Full Disclosure. No information furnished by or on behalf of
Radiance to CVD pursuant to this Agreement and any information contained in
Radiance Disclosure Schedule and other Schedules to this Agreement, at any time
prior to the Closing Date, contains nor will contain any untrue statement of a
material fact and does not and will not omit to state any material fact
necessary to make any statement, in light of the circumstances under which such
statement is made, not misleading.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF CVD AND SUB
CVD and Sub jointly and severally represent and warrant to Radiance as
follows:
4.1 Organization of Buyer. Each of CVD and Sub is an entity duly
organized, validly existing and in good standing under the laws of its
respective jurisdiction. CVD and Sub has full corporate power and authority to
own or lease and to operate and use its properties and assets and to carry on
its business as now conducted and as proposed to be conducted pursuant to this
Agreement. CVD is duly qualified or licensed to do business and is in good
standing in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties make such qualification or licensing
necessary, other than in such jurisdictions where the failure to be so qualified
or licensed or to be in good standing (individually or in the aggregate) would
not have a materially adverse effect on the business, condition (financial or
otherwise), properties, assets, including intangible assets, liabilities
(including contingent liabilities), prospects, or results of operations of CVD
(a "Material Adverse Effect").
4.2 Authorization. Each of CVD and Sub has full corporate power and
authority to execute, deliver and perform this Agreement and the Related
Agreements and to consummate the transactions contemplated hereby and thereby.
The execution, delivery and performance of this Agreement and the Related
Agreements by CVD have been duly authorized and approved by the Board of
Directors of CVD and does not require any further authorization or consent of
CVD other than approval by its stockholders. This Agreement has been duly
authorized, validly executed and
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delivered by CVD and constitutes the legal, valid and binding obligations of CVD
enforceable in accordance with its terms, except as the enforceability thereof
may be subject to or limited by (i) bankruptcy, insolvency, reorganization,
arrangement, moratorium or other similar laws now or hereafter in effect
relating to or affecting creditors' rights, and (ii) general equitable
principles, regardless of whether the issue of enforceability is considered in a
proceeding in equity or at law.
4.3 Capital Stock of CVD and Sub.
(a) The authorized capital stock of CVD consists of 30,000,000
shares of CVD Common Stock and 7,560,000 shares of preferred stock. As of
October 29, 1998, 9,536,557 shares of Common Stock and no shares of preferred
stock, were issued and outstanding and 685,975 shares of CVD Common Stock are
held by CVD in its treasury. As of the Effective Time, there will be outstanding
options to purchase approximately 1,455,000 shares of CVD Common Stock (the "CVD
Options"); and 291,000 shares of CVD Common Stock are reserved for issuance upon
the exercise of the CVD Options. All outstanding shares of capital stock of CVD
are duly authorized, validly issued, fully paid, and nonassessable and not
subject to preemptive rights and such capital stock has been issued in full
compliance with all applicable federal and state securities laws. There are no
bonds, debentures, notes, or other indebtedness of CVD having the right to vote
(or convertible into securities having the right to vote) on any matters on
which stockholders of CVD may vote. Except as set forth above, as of the date
hereof, there are no securities, options, warrants, calls, rights, commitments,
agreements, arrangements, or undertakings of any kind to which CVD is a party or
by which it is bound obligating CVD to issue, deliver or sell, or cause to be
issued, delivered or sold, additional shares of capital stock or other voting
securities of CVD or obligating CVD to issue, grant, extend or enter into any
such security, option, warrant, call, right, commitment, agreement, arrangement
or undertaking (together, "Options"). As of the date hereof, there are no
outstanding contractual obligations of CVD to repurchase, redeem, or otherwise
acquire any shares of capital stock of CVD. CVD has furnished to Radiance true
and correct copies of CVD's Certificate of Incorporation and Bylaws as in effect
as of the date hereof. The authorized capital stock of Sub consists of 100
shares of common stock, $.001 par value, of which 100 shares are issued and
outstanding and owned of record by CVD. There are no outstanding options,
warrants, or other rights to subscribe for or purchase from CVD any capital
stock of Sub, or securities convertible into Sub.
(b) Except as disclosed in Section 4.3(b) of the schedule
attached hereto (the "CVD Disclosure Schedule"), there are no (i) outstanding
Options obligating CVD or (ii) voting trusts, proxies or other commitments,
understandings, restrictions or arrangements in favor of any person other than
CVD.
4.4 Non-Contravention; Approvals and Consents.
(a) Except as disclosed in Section 4.4 of CVD Disclosure
Schedule, and except for the filing of the Agreement of Merger and other
appropriate merger documents required by the DGCL with the Secretary of State
and appropriate documents with the relevant authorities of other states in which
the Constituent Corporations are qualified to do business, the execution and
delivery of this Agreement by CVD does not, and the performance by CVD of its
obligations hereunder and the consummation of the transactions contemplated
hereby will not, conflict with, result in a violation or breach of, constitute
(with or without notice or lapse of time or both) a default under,
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result in or give to any person any right of payment or reimbursement,
termination, cancellation, modification or acceleration of, or result in the
creation or imposition of any pledges, claims, liens, charges, encumbrances, and
security interests of any kind or nature whatsoever (collectively, "Liens") upon
any of the assets or properties of CVD under, any of the terms, conditions or
provisions of (i) the Certificate of Incorporation or Bylaws of CVD, or (ii) (x)
any statute, law, rule, regulation or ordinance (together, "Laws"), or any
judgment, decree, order, writ, permit or license (together, "Orders"), of any
court, tribunal, arbitrator, authority, agency, commission, official or other
instrumentality of the United States or any state, county, city or other
political subdivision (a "Governmental or Regulatory Authority"), applicable to
CVD or any of its assets or properties, or (y) any note, bond, mortgage,
security agreement, indenture, license, franchise, permit, concession, contract,
lease or other instrument, obligation or agreement of any kind (together,
"Contracts") to which CVD is a party or by which CVD or any of its assets or
properties is bound, excluding from the foregoing clauses (x) and (y) conflicts,
violations, breaches, defaults, payments, reimbursements, terminations,
cancellations, modifications, accelerations and creations and impositions of
Liens which, individually or in the aggregate, could not reasonably be expected
to have a material adverse effect on the business, condition (financial or
otherwise), properties, assets (including intangible assets), liabilities
(including contingent liabilities), prospects, or results of operations of CVD
(a "Material Adverse Effect") on CVD or on the ability of CVD to consummate the
transactions contemplated by this Agreement.
(b) Except as disclosed in Section 4.4 of CVD Disclosure
Schedule, no consent, approval or action of, filing with or notice to any
Governmental or Regulatory Authority or other public or private third party is
necessary or required under any of the terms, conditions or provisions of any
Law or Order of any Governmental or Regulatory Authority or any contract to
which CVD is a party or by which CVD or any of its assets or properties is bound
for the execution and delivery of this Agreement by CVD, the performance by CVD
of its obligations hereunder or the consummation of the transactions
contemplated hereby, other than such consents, approvals, actions, filings and
notices which the failure to make or obtain, as the case may be, individually or
in the aggregate, could not reasonably be expected to have a Material Adverse
Effect on CVD or on the ability of CVD to consummate the transactions
contemplated by this Agreement.
4.5 No Litigation or Regulatory Action. There are no lawsuits, claims,
suits, proceedings or investigations pending or, to CVD's knowledge, threatened
which (i) question the legality of the transactions contemplated by this
Agreement or (ii) could reasonably be expected to have a material adverse effect
on CVD's ability to perform its obligations under this Agreement. There is no
action, suit, proceeding or investigation by CVD currently pending or which it
intends to initiate. CVD is not subject to any Order of any Governmental or
Regulatory Authority which is having or could reasonably be expected to have a
Material Adverse Effect on CVD, or on the ability of CVD or Sub to consummate
the transactions contemplated by this Agreement.
4.6 SEC Documents. CVD has delivered or made available to Radiance true
and correct copies of each registration statement, report, definitive proxy
statement or definitive information statement and all exhibits thereto filed
(including exhibits and any amendments thereto) since January 1, 1997 with the
SEC under or pursuant to the Securities Act of 1933, as amended (the "Securities
Act") or the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
(collectively, the "CVD Reports"). As of their respective dates, or as
subsequently amended prior to the Closing Date, the CVD Reports complied in all
material respects with the requirements of the
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Exchange Act applicable to such CVD Reports, and none of the CVD Reports
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The financial statements of CVD included in the CVD Reports comply
in all material respects with applicable accounting requirements in the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with GAAP applied on a consistent basis (except as maybe
indicated in the notes thereto) and fairly present the consolidated financial
position of CVD and its consolidated subsidiaries as of the dates thereof and
the consolidated results of their operations and cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal year-end audit
adjustments, the absence of notes and as permitted by Form 10-Q of the Exchange
Act). As of their respective dates, the CVD Reports complied as to form in all
material respects with the applicable requirements of the Securities Act and/or
the Exchange Act.
4.7 Brokers and Finders. Other than Wedbush ▇▇▇▇▇▇, CVD has not employed
any broker, finder, consultant or intermediary in connection with the
transactions contemplated by this Agreement who would be entitled to a broker's,
finder's or similar fee or commission in connection therewith or upon the
consummation thereof. CVD is solely responsible for the payment of any fee,
commission or reimbursement that may be due to or become payable to Wedbush
▇▇▇▇▇▇ in connection with the transactions contemplated by this Agreement.
4.8 Taxes.
(a) Prior to the Merger, CVD will be in control of Sub within the
meaning of Section 368(c) of the Code. CVD will not cause or permit Sub to issue
additional shares of its stock that would result in CVD losing control of Sub
within the meaning of Section 368(c) of the Code. No stock of Sub will be issued
in the Merger.
(b) During its corporate existence, Sub has owned no assets, and
prior to the Merger shall not own any assets other than the shares of CVD to be
distributed in the Merger.
(c) As of the date hereof and as of the Effective Time, CVD has
no plan or intention to reacquire any of its stock to be distributed in the
Merger.
4.9 CVD Stock Issued in Merger. The shares of CVD Common Stock to be
issued in the Merger will, when issued and delivered to the shareholders of
Radiance as a result of the Merger and pursuant to the terms of this Agreement,
be duly and validly authorized and issued, fully paid, non-assessable and free
of preemptive rights of any securityholder of CVD, and issued in compliance with
applicable federal and state securities laws.
4.10 Full Disclosure. No information furnished by or on behalf of CVD to
Radiance pursuant to this Agreement and any information contained in the CVD
Disclosure Schedule and other Schedules to this Agreement, at any time prior to
the Closing Date, contains nor will contain any untrue statement of a material
fact and does not and will not omit to state any material fact necessary to make
any statement, in light of the circumstances under which such statement is made,
not misleading.
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ARTICLE 5
COVENANTS
5.1 Covenants of Radiance. At all times from and after the date hereof
until the Effective Time, Radiance covenants and agrees as to itself that
(except as expressly contemplated or permitted by this Agreement, or to the
extent that CVD and Sub shall otherwise consent in writing):
(a) Radiance shall conduct its business only in, and Radiance
shall not take any action except in, the ordinary course consistent with past
practice.
(b) Without limiting the generality of paragraph (a) of this
Section, except as otherwise disclosed in Section 5.1 of Radiance Disclosure
Schedule, as applicable, and except as contemplated or permitted by this
Agreement, (i) Radiance shall use all commercially reasonable efforts to
preserve intact in all material respects its present business organization and
reputation, to keep available the services of its key officers and employees, to
maintain its respective assets and properties in good working order and
condition, ordinary wear and tear excepted, to maintain insurance on its
tangible assets and business in such amounts and against such risks and losses
as are currently in effect, to preserve its relationships with customers and
suppliers and others having significant business dealings with it and to comply
in all material respects with all Laws and Orders of all Governmental or
Regulatory Authorities applicable to them, and (ii) Radiance shall not:
(A) amend or propose to amend its Certificate of
Incorporation or Bylaws;
(B) (w) declare, set aside or pay any dividends on
or make other distributions in respect of any of its capital
stock, (x) split, combine, reclassify or take similar action with
respect to any of its capital stock or issue or authorize or
propose the issuance of any other securities in respect of, in
lieu of or in substitution for shares of its capital stock, (y)
adopt a plan of complete or partial liquidation or resolutions
providing for or authorizing such liquidation or a dissolution,
merger, consolidation, restructuring, recapitalization or other
reorganization or (z) directly or indirectly purchase, redeem or
otherwise acquire any shares of its capital stock or any Option
with respect thereto, except for the repurchase of capital stock
from employees pursuant to existing agreements providing for the
repurchase of such shares of capital stock upon termination of
employment at the employee's cost therefor;
(C) except for x) the grant of stock and/or stock
options which have not been granted pursuant to the 1,000,000
shares currently authorized under the 1997 Radiance Stock Option
Plan and y) the issuance of Radiance capital stock upon exercise
or conversion of presently outstanding warrants, options, rights
or convertible securities in accordance with their present terms,
issue, deliver or sell, or authorize or propose the issuance,
delivery or sale of, any shares of its capital stock or any
Option with respect thereto, or modify or amend any right of any
holder of outstanding shares of capital stock or Options with
respect thereto;
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(D) acquire (by merging or consolidating with, or
by purchasing a substantial equity interest in or a substantial
portion of the assets of, or by any other manner) any business or
any corporation, partnership, association or other business
organization or division thereof or otherwise acquire or agree to
acquire any assets which are material, individually or in the
aggregate, to Radiance;
(E) other than dispositions of assets which are not
individually or in the aggregate, material to Radiance, sell,
lease, grant any security interest in or otherwise dispose of or
encumber any of its assets or properties;
(F) except to the extent required by applicable
law, (x) permit any material change in (A) any pricing,
marketing, purchasing, investment, accounting, financial
reporting, inventory, credit, allowance or tax practice or policy
or (B) any method of calculating any bad debt, contingency or
other reserve for accounting, financial reporting or tax purposes
or (y) make any material tax election or settle or compromise any
material income tax liability with any Governmental or Regulatory
Authority;
(G) (x) incur any indebtedness for borrowed money
or guarantee any such indebtedness other than in the ordinary
course of its business consistent with past practice in an
aggregate principal amount exceeding $50,000 (net of any amounts
of any such indebtedness discharged during such period), or (y)
voluntarily purchase, cancel, prepay or otherwise provide for a
complete or partial discharge in advance of a scheduled repayment
date with respect to, or waive any right under, any indebtedness
for borrowed money other than in the ordinary course of its
business consistent with past practice in an aggregate principal
amount exceeding $50,000;
(H) enter into, adopt, amend in any material
respect (except as may be required by applicable law) or
terminate any Radiance Employee Benefit Plan or any other
agreement or arrangement, plan or policy between Radiance and one
or more of its directors, officers or employees, or, except for
normal increases in the ordinary course of business consistent
with past practice that, in the aggregate, do not result in a
material increase in benefits or compensation expense to
Radiance, increase in any manner the compensation or fringe
benefits of any director, officer or employee or pay any benefit
not required by any plan or arrangement in effect as of the date
hereof;
(I) enter into any contract or amend or modify any
existing contract, or engage in any new transaction, outside the
ordinary course of business consistent with past practice or not
on an arm's length basis, with any affiliate of Radiance;
(J) make any capital expenditures or commitments
for additions to plant, property or equipment constituting
capital assets except in the ordinary course of business
consistent with past practice in an aggregate amount exceeding
$100,000;
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(K) make any change in the lines of business in
which it participates or is engaged;
(L) take any action to cause the Merger not to be
treated as a tax-free reorganization within the meaning of
Section 368(a)(1)(A) and 368(a)(2)(D) of the Code; or
(M) enter into any contract, agreement, commitment
or arrangement to do or engage in any of the foregoing.
5.2 Covenants of CVD. At all times from and after the date hereof until
the Effective Time, CVD covenants and agrees as to itself and its Subsidiaries
that (except as expressly contemplated or permitted by this Agreement, or to the
extent that Radiance shall otherwise consent in writing): (i) CVD shall not make
any material changes to its business or structure which could reasonably be
expected to have a material adverse effect on the consideration to be received
by Radiance's stockholders, except that CVD shall be permitted to sell assets
relating to CVD's vascular access business; (ii) CVD shall use all reasonable
efforts to take all such actions as are necessary to effectuate the transactions
contemplated hereby and to fulfill and cause to be fulfilled the conditions to
Closing under this Agreement; (iii) CVD agrees to make all filings it is
required to make pursuant to the Exchange Act on a timely basis; and (iv) CVD
shall not, nor shall it permit Sub to take any action to cause the Merger not to
be treated as a tax-free reorganization within the meaning of Section
368(a)(1)(A) and 368(a)(2)(D) of the Code.
5.3 Advice of Changes. Except with respect to the sale by CVD of assets
relating to CVD's vascular access business, each party shall confer on a regular
and frequent basis with the other with respect to its business and operations
and other matters relevant to the Merger, and shall promptly advise the other,
orally and in writing, of any change or event, including, without limitation,
any complaint, investigation or hearing by any Governmental or Regulatory
Authority (or communication indicating the same may be contemplated) or the
institution or threat of litigation, having, or which, insofar as can be
reasonably foreseen, could have, a Material Adverse Effect on Radiance, or CVD
and its Subsidiaries taken as a whole, as the case may be, or on the ability of
Radiance or CVD and Sub, as the case may be, to consummate the transactions
contemplated hereby.
ARTICLE 6
ADDITIONAL AGREEMENTS
6.1 Access to Information; Confidentiality.
(a) Each of Radiance and CVD shall, and shall cause each of its
Subsidiaries, if any, to, throughout the period from the date hereof to the
Effective Time, (i) provide the other party and its directors, officers,
employees, legal, investment banking and financial advisors, accountants and any
other agents and representatives (collectively, "Representatives") with full
access, upon reasonable prior notice, and during normal business hours, to
Radiance or CVD and its Subsidiaries, as the case may be, and their respective
assets, properties, books and records, but only to the extent that such access
does not unreasonably interfere with the business and operations of Radiance or
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CVD and its Subsidiaries, as the case may be, and (ii) furnish promptly to such
persons (x) a copy of each report, statement, schedule and other document filed
or received by Radiance and its Subsidiaries or CVD and its Subsidiaries, as the
case may be, pursuant to the requirements of federal or state securities laws or
filed with any other Governmental or Regulatory Authority, and (y) all other
information and data (including, without limitation, copies of Contracts,
Radiance Employee Benefit Plans or CVD Employee Benefit Plans, as the case may
be, and other books and records) concerning the business and operations of
Radiance or CVD, as the case may be, as the other party or any of such other
persons reasonably may request. No investigation pursuant to this paragraph or
otherwise shall affect any representation or warranty contained in this
Agreement or any condition to the obligations of the parties hereto.
(b) Each party will hold, and will use its best efforts to cause
its Representatives to hold, in strict confidence, unless (i) compelled to
disclose by judicial or administrative process or by-other requirements of
applicable Laws or Governmental or Regulatory Authorities (including, without
limitation, in connection with obtaining the necessary approvals of this
Agreement or the transactions contemplated hereby of Governmental or Regulatory
Authorities), or (ii) disclosed in an action or proceeding brought by a party
hereto in pursuit of its rights or in the exercise of its remedies hereunder,
all documents and information concerning the other party and its Subsidiaries
furnished to it by such other party or its Representatives in connection with
this Agreement or the transactions contemplated hereby, except to the extent
that such documents or information can be shown to have been (x) previously
known by Radiance or CVD, as the case may be, or its Representatives, (y) in the
public domain (either prior to or after the furnishing of such documents or
information hereunder) through no fault of Radiance or CVD, as the case may be,
and its Representatives or (z) later acquired by Radiance or CVD, as the case
may be, or its Representatives from another source if the recipient is not aware
that such source is under an obligation to Radiance or CVD, as the case may be,
to keep such documents and information confidential. In the event that this
Agreement is terminated without the transactions contemplated hereby having been
consummated, upon the request of Radiance or CVD, as the case may be, the other
party will, and will cause its Representatives to, promptly (and in no event
later than five (5) business days after such request) redeliver or cause to be
redelivered all copies-of documents and information furnished by Radiance or
CVD, as the case may be, or its Representatives to such party and its
Representatives in connection with this Agreement or the transactions
contemplated hereby and destroy or cause to be destroyed all notes, memoranda,
summaries, analyses, compilations and other writings related thereto or based
thereon prepared by Radiance or CVD, as the case may be, or its Representatives.
6.2 Registration of CVD Common Stock. CVD shall register for re-sale the
shares of CVD Common Stock issued pursuant to the payment of the Merger
Consideration and shall file a registration statement with respect to such
registration with the SEC within five (5) business days after the Closing Date;
provided, however, Radiance shall use its best efforts to have the holders of
shares of Radiance Common Stock and/or Radiance Preferred Stock enter into (i) a
registration rights agreement with CVD in the form of Exhibit B hereto (the
"Registration Rights Agreements"); and (ii) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, M.D. shall enter lock-up agreements (the "Lock-Up Agreements") with
CVD prior to the Effective Time which shall restrict the re-sale of CVD Common
Stock issued pursuant to the payment of the Merger Consideration for a period of
180 days after the date of this Agreement.
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6.3 Nasdaq Listing. CVD shall file an application for original listing
of the shares of CVD Common Stock on the Nasdaq National Market to be issued in
the Merger in accordance with this Agreement prior to the registration of the
CVD Common Stock as provided in Section 6.2.
6.4 Approval of Stockholders. CVD shall use its reasonable best efforts
to obtain approval of this Agreement by its stockholders (the "CVD Stockholder
Approval") as soon as reasonably practicable after the date hereof. Subject to
the exercise of fiduciary obligations under applicable law as advised by
independent counsel, CVD, through its Boards of Directors, shall recommend to
its stockholders that it is in the best interest of the stockholders that the
stockholders of CVD approve this Agreement and the transactions contemplated
hereby.
6.5 Regulatory and Other Approvals. Subject to the terms and conditions
of this Agreement and without limiting the provisions of Sections 6.3 and 6.4,
each of Radiance and CVD will proceed diligently and in good faith and will use
all commercially reasonable efforts to do, or cause to be done, all things
necessary, proper or advisable to, as promptly as practicable, (i) obtain all
consents, approvals or actions of, make all filings with and give all notices to
Governmental or Regulatory Authorities or any other public or private third
parties required of CVD, Radiance or any of their Subsidiaries to consummate the
Merger and the other matters contemplated hereby, and (ii) provide such other
information and communications to such Governmental or Regulatory Authorities or
other public or private third parties as the other party or such Governmental or
Regulatory Authorities or other public or private third parties may reasonably
request in connection therewith.
6.6 Employment Agreements. At and upon the Effective Time, CVD shall
have entered into an employment agreement with each of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇
▇▇▇▇▇▇▇▇ on substantially the terms as set forth in the forms of employment
agreements attached hereto as Exhibit C (the "Employment Agreements").
6.7 Noncompetition Agreements. At and upon the Effective Time, CVD shall
have entered into a noncompetition agreement with each of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, M.D., and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ in a form mutually agreeable to
such parties (the "Noncompetition Agreements").
6.8 Medical Director. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, M.D., shall be appointed
Medical Director of CVD on terms mutually agreed by the parties for a period of
four (4) years on a consulting basis and be entitled to receive stock options
commensurate with such position.
6.9 Management Committee. As soon as possible after the Effective Time,
CVD shall cause the Surviving Corporation to appoint a Radiation Management
Committee, to be composed of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, M.D., to oversee the operations of the Company with respect to the
development of radiation therapy products. The composition of such committee may
be changed by the Board of Directors of CVD. Such committee will meet at least
quarterly with the Board of Directors of CVD, and shall serve under the
direction of the Board of Directors of CVD. ▇▇. ▇▇▇▇▇▇ will serve as Chairman of
the Radiation Management Committee and shall schedule committee meetings. In
addition, CVD agrees to spend at least $10,000,000 on research and the
development of radiation therapy products during the 24 months following the
Closing, with a majority of such spending directed toward completion of matters
included in the
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Milestones, subject to the exercise of the business judgment of the Board of
Directors. Notwithstanding the foregoing, the operations of CVD at all times
shall be under the direction and control of the Board of Directors of CVD which
shall manage such operations in accordance with its fiduciary duty to the
stockholders of CVD.
6.10 Expenses. All costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such cost or expense. If the Merger is not consummated due to either
party's failure to obtain Stockholder Approval, the party unable to obtain such
approval shall reimburse the expenses of the other party incurred in connection
with this Agreement and the Merger, up to a maximum of Thirty Thousand Dollars
($30,000).
6.11 Indemnification of Officers and Directors.
(a) From and after the Effective Time, CVD shall, to the fullest
extent authorized by the DGCL or any other applicable law as the same exists or
may hereafter be amended (but, in the case of any such amendment, only to the
extent that such amendment permits CVD to provide broader indemnification rights
than such law permitted CVD to provide prior to such amendment), indemnify all
directors and officers of Radiance as of the Closing against any liability or
losses (including reasonable attorney's fees for counsel who are reasonably
acceptable to CVD) any of them may incur from any action, proceeding or
investigation brought against such individuals by existing stockholders and
option holders of Radiance immediately prior to the Merger as a result of the
Merger, or any of the transactions contemplated by this Agreement. The right to
indemnification conferred in this Section shall be a contract right and shall
include the right to be paid by CVD any expenses incurred in defending any such
proceeding in advance of its final disposition; provided, however, that, if so
required by the DGCL, such advance shall be made only upon delivery to CVD of an
undertaking, by or on behalf of such director or officer, to repay all amounts
so advanced if it shall ultimately be determined that such director or officer
is not entitled to be indemnified under this Section 6.11 or otherwise. CVD
shall not be liable for any settlement effected without its written consent
(which consent shall not be unreasonably withheld). CVD shall not be obligated
pursuant to this Section 6.11 to pay the fees and disbursements of more than one
counsel for all officers and directors in any single action, except to the
extent that, in the opinion of counsel for the officers and directors, two or
more of such officers and directors have conflicting interests in the outcome of
such action, or one or more of such officers and directors and CVD have
conflicting interests in the outcome of such action. CVD may obtain directors'
and officers' liability insurance covering its obligations under this Section
6.11.
(b) The provisions of this Section 6.11 are intended to be for
the benefit of, and shall be enforceable by, each officer and director of
Radiance as of the Closing, and his or her heirs and legal representatives, and
shall be in addition to any other rights an officer and director of Radiance may
have under the Certificate of Incorporation or Bylaws of the Surviving
Corporation, under the DGCL or otherwise.
(c) In the event CVD or the Surviving Corporation, or any of
their respective successors or assigns, (i) consolidates with or merges into any
other person and shall not be the continuing or surviving corporation or entity
of such consolidation or merger or (ii) transfers all or substantially all of
its properties and assets to any person, then, and in each such case, proper
provision shall be made so that the successors and assigns of CVD or the
Surviving Corporation, as
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the case may be, or at CVD's option, CVD, shall assume the obligations set forth
in paragraph (a) of this Section 6.11.
(d) In the event CVD or the, Surviving Corporation, or any of
their respective successors or assigns, obtains directors' and officers'
liability insurance covering any of their directors or officers, such insurance
shall also cover the directors and officers of Radiance as of the date hereof
with respect to the obligations hereunder.
6.12 Notice and Cure. Each of CVD, Sub and Radiance will notify the
other in writing of, and contemporaneously will provide the other with true and
complete copies of any and all information or documents relating to, and will
use best efforts to cure before the Closing, any event, transaction or
circumstance, as soon as practical after it becomes known to such party,
occurring after the date of this Agreement that causes or will cause any
covenant or agreement of CVD, Sub or Radiance, as the case may be, under this
Agreement to be breached or that renders or will render untrue any
representation or warranty of CVD, Sub or Radiance, as the case may be,
contained in this Agreement as if the same were made on or as of the date of
such event, transaction or circumstance. Each of CVD, Sub and Radiance also will
notify the other in writing of, and will use best efforts to cure, before the
Closing, any violation or breach, as soon as practical after it becomes known to
such party, of any representation, warranty, covenant or agreement made by CVD,
Sub or Radiance, as the case may be, in this Agreement, whether occurring or
arising prior to, on or after the date of this Agreement. No notice given
pursuant to this Section 6.12 shall have any effect on the representations,
warranties, covenants or agreements contained in this Agreement for purposes of
determining satisfaction of any condition contained herein.
6.13 Fulfillment of Conditions. Subject to the terms and conditions of
this Agreement, each of CVD, Sub and Radiance will take or cause to be taken all
steps necessary or desirable and proceed diligently and in good faith to satisfy
each condition to the other's obligations contained in this Agreement and to
consummate and make effective the transactions contemplated by this Agreement,
and neither CVD nor Radiance will, nor will it permit any subsidiary, if any,
to, take or fail to take any action that could be reasonably expected to result
in the nonfulfillment of any such condition.
6.14 No Solicitations. Radiance agrees that unless specifically
permitted in writing by CVD until the earlier of (i) February 1, 1999 or such
later date as determined in accordance with Section 8.1(c)(i), or (ii) receipt
of written notice from CVD of its intent not to proceed with the proposed
transaction, Radiance will not, directly or indirectly, through any officer,
director, affiliate or agent of Radiance, or otherwise, (i)solicit, initiate,
entertain, or encourage any proposals or offers from any third party relating to
(a) any possible acquisition of Radiance (whether by way of merger, purchase of
capital stock, purchase of assets or otherwise), (b) any acquisition of its
assets, technology or securities, or (c) the grant of any license, distribution
or other commercial rights in Radiance's technology or its proposed products; or
(ii) enter into, or continue, any discussions or arrangements with, otherwise
cooperate with, facilitate or encourage any effort or attempt by, any third
party with respect to any of the foregoing, or furnish to any person any
information with respect to, or any person to do or seek any of the foregoing.
Radiance shall immediately cease and cause to be terminated any such contacts or
negotiations with third parties.
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ARTICLE 7
CONDITIONS
7.1 Conditions to Each Party's Obligation to Effect the Merger. The
respective obligation of each party to effect the Merger is subject to the
fulfillment, at or prior to the Closing, of each of the following conditions:
(a) No Injunctions or Restraints. No court of competent
jurisdiction or other competent Governmental or Regulatory Authority shall have
enacted, issued, promulgated, enforced or entered any Law or Order (whether
temporary, preliminary or permanent) which is then in effect and has the effect
of making illegal or otherwise restricting, preventing or prohibiting
consummation of the Merger or the other transactions contemplated by this
Agreement.
(b) Governmental and Regulatory Consents and Approvals. Other
than the filing provided for by Section 1.2, all consents, approvals and actions
of, filings with and notices to any Governmental or Regulatory Authority or any
other public or private third parties or CVD or Radiance stockholders required
of CVD, Radiance or any Subsidiary which are to be taken prior to the Effective
Time to consummate the Merger and the other matters contemplated hereby, the
failure of which to be obtained or taken could be reasonably expected to have a
Material Adverse Effect on CVD and its Subsidiary taken as a whole, or the
Surviving Corporation, or on the ability of CVD and Radiance to consummate the
transactions contemplated hereby shall have been obtained.
7.2 Conditions to Obligation of CVD and Sub to Effect the Merger. The
obligation of CVD and Sub to effect the Merger is further subject to the
fulfillment, at or prior to the Closing, of each of the following additional
conditions (all or any of which may be waived in whole or in part by CVD and Sub
in their sole discretion):
(a) Representations and Warranties. Each of the representations
and warranties made by Radiance in this Agreement shall be true and correct in
all material respects as of the Closing Date as though made on and as of the
Closing Date or, in the case of representations and warranties made as of a
specified date earlier than the Closing Date, on and as of such earlier date,
and Radiance shall have delivered to CVD a certificate, dated the Closing Date
and executed on behalf of Radiance by its Chairman of the Board, Chief Executive
Officer, President or any Executive or Senior Vice President, to such effect.
(b) Performance of Obligations. Radiance shall have performed and
complied with, in all material respects, each agreement, covenant and obligation
required by this Agreement to be so performed or complied with by Radiance at or
prior to the Closing, and Radiance shall have delivered to CVD a certificate,
dated the Closing Date and executed on behalf of Radiance by its Chairman of the
Board, President or any Executive or Senior Vice President, to such effect.
(c) Orders and Laws. There shall not have been issued, enacted,
promulgated or deemed applicable to Radiance, the Surviving Corporation or the
transactions contemplated by this Agreement any Order or Law of any Governmental
or Regulatory Authority which is then in effect and which could be reasonably
expected to result in a material diminution of the benefits of the Merger to
CVD, and there shall not be pending or threatened on the Closing Date any
action, suit or
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proceeding in, before or by any Governmental or Regulatory Authority which could
be reasonably expected to result in any such issuance, enactment, promulgation
or deemed applicability of any such Order or Law or of any Order or Law.
(d) Contractual Consents. Radiance shall have received all
consents (or in lieu thereof waivers) from parties to each Contract to the
extent required pursuant to the terms of each such contract disclosed pursuant
to Sections 3.5 and 3.10.
(e) No Material Adverse Change. Since the date of this Agreement,
there shall have been no changes in the business, condition (financial or
otherwise), properties, assets (including intangible assets), liabilities
(including contingent liabilities) or results of operations of Radiance, which
have had or may be reasonably expected to have, a Material Adverse Effect on
Radiance.
(f) Proceedings. All proceedings to be taken on the part of
Radiance in connection with the transactions contemplated by this Agreement and
all documents incident thereto shall be reasonably satisfactory in form and
substance to CVD, and CVD shall have received copies of all such documents and
other evidences as CVD may reasonably request in order to establish the
consummation of such transactions and the taking of all proceedings in
connection therewith.
(g) Opinion of Counsel. CVD shall have received the opinion of
▇▇▇▇▇ & ▇▇▇▇▇▇, counsel to Radiance, dated the Closing Date, in form reasonably
acceptable to CVD.
(h) Employment Agreements. The Employment Agreements shall have
been entered into by and between CVD and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇▇.
(i) Noncompetition Agreements. The Noncompetition Agreements
shall have been entered into by and between CVD and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, M.D., and ▇▇▇▇ ▇▇▇▇▇▇▇▇.
(j) Registration Rights Agreement. CVD shall have received signed
Registration Rights Agreements in the form of Exhibit B from the holders of
shares of Radiance Common Stock, Radiance Preferred Stock and Radiance Options.
(k) Lock-Up Agreements. CVD shall have received signed Lock-Up
Agreements from ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, M.D.
(l) Escrow Agreement. CVD shall have received a signed Escrow
Agreement from the Escrow Agent and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ as representative of the
Radiance Stockholders.
7.3 Conditions to Obligation of Radiance to Effect the Merger. The
obligation of Radiance to effect the Merger is further subject to the
fulfillment, at or prior to the Closing, of each of the following additional
conditions (all or any of which may be waived in whole or in part by Radiance in
its sole discretion):
(a) Representations and Warranties. Each of the representations
and warranties made by CVD and Sub in this Agreement shall be true and correct
in all material respects as of the Closing Date as though made on and as of the
Closing Date or, in the case of representations and warranties made as of a
specified date earlier than the Closing Date, on and as of such earlier date,
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and CVD and Sub shall each have delivered to Radiance a certificate, dated the
Closing Date and executed on behalf of CVD by its Chairman of the Board, Chief
Executive Officer, President or any Executive or Senior Vice President and on
behalf of Sub by its President or any Vice President, to such effect.
(b) Performance of Obligations. CVD and Sub shall have performed
and complied with, in all material respects, each agreement, covenant and
obligation required by this Agreement to be so performed or complied with by
CVD, or Sub at or prior to the Closing, and CVD and Sub shall each have
delivered to Radiance a certificate, dated the Closing Date and executed on
behalf of CVD by its Chairman of the Board, President or any Executive or Senior
Vice President and on behalf of Sub by its Chairman of the Board, President or
any Vice President, to such effect.
(c) Orders and Laws. There shall not have been issued, enacted,
promulgated or deemed applicable to the CVD, its Subsidiaries, the Surviving
Corporation or the transactions contemplated by this Agreement any Order or Law
of any Governmental or Regulatory Authority which is then in effect and which
could be reasonably expected to result in a material diminution of the benefits
of the Merger to Radiance or its stockholders, and there shall not be pending or
threatened on the Closing Date any action, suit or proceeding in, before or by
any Governmental or Regulatory Authority which could be reasonably expected to
result in any such issuance, enactment, promulgation or deemed applicability of
any such Order or Law or of any Order or Law.
(d) Registration Rights Agreement. The Registration Rights
Agreements in the form of Exhibit B shall have been entered into by CVD.
(e) No Material Adverse Change. Since the date of this Agreement,
there shall have been no changes in the business, condition (financial or
otherwise), properties, assets (including intangible assets), liabilities
(including contingent liabilities) or results of operations of CVD and its
Subsidiaries taken as a whole, which have had or may be reasonably expected to
have, a Material Adverse Effect on CVD and its Subsidiaries taken as a whole.
(f) Proceedings. All proceedings to be taken on the part of CVD
and Sub in connection with the transactions contemplated by this Agreement and
all documents incident thereto shall be reasonably satisfactory in form and
substance to Radiance, and Radiance shall have received copies of all such
documents and other evidences as Radiance may reasonably request in order to
establish the consummation of such transactions and the taking of all
proceedings in connection therewith.
(g) Opinion of Counsel. Radiance shall have received the opinion
of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇, counsel to CVD and Sub, dated the Closing
Date, in form reasonably acceptable to Radiance.
(h) Employment Agreement. The Employment Agreements shall have
been executed by CVD and delivered to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
(i) Escrow Agreement. The Escrow Agreement shall have been
executed by CVD are delivered to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, as representative of the
Radiance Stockholders.
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ARTICLE 8
TERMINATION, AMENDMENT AND WAIVER
8.1 Termination. This Agreement may be terminated, and the transactions
contemplated hereby may be abandoned, at any time prior to the Effective Time:
(a) by mutual written agreement of the parties hereto duly
authorized by action taken by or on behalf of their respective Boards of
Directors;
(b) by CVD, if the Average Closing Price is one and one-half
dollars ($1.50) or less;
(c) by either Radiance or CVD upon notification to the
non-terminating party by the terminating party:
(i) at any time after February 1, 1999, if the Merger
shall not have been consummated on or prior to such date and such
failure to consummate the Merger is not caused by a breach of this
Agreement by the terminating party, provided however, that if CVD has
filed with the Securities and Exchange Commission its proxy statement
with respect to seeking approval of the Merger from its stockholders by
December 15, 1998, CVD may extend such February 1, 1999 date to the
earlier of the date on which all conditions to Closing have been met or
April 30, 1999, by delivery to Radiance of One Million Dollars
($1,000,000) in exchange for a promissory note from Radiance. Such
promissory note shall (i) accrue simple interest at six percent (6%) per
annum, with all interest and principal payable three(3) years after the
issuance of such note, (ii) not be prepayable by Radiance, and (iii)
subject to the rights of holders of Radiance stock existing on the date
hereof, may be converted, at CVD's option into equity securities of
Radiance in Radiance's next equity financing, at the price and on the
terms of such financing.
(ii) if any Governmental or Regulatory Authority, the
taking of action by which is a condition to the obligations of either
Radiance or CVD to consummate the transactions contemplated hereby,
shall have determined not to take such action and all appeals of such
determination shall have been taken and have been unsuccessful;
(iii) if there has been a material breach of any
representation, warranty, covenant or agreement on the part of the
non-terminating party set forth in this Agreement which breach has not
been cured within ten (10) business days following receipt by the
non-terminating party of notice of such breach from the terminating
party or assurance of such cure reasonably satisfactory to the
terminating party shall not have been given by or on behalf of the
non-terminating party within such ten (10) business day period; or
(iv) if any court of competent jurisdiction or other
competent Governmental or Regulatory Authority shall have issued an
Order making illegal or otherwise restricting, preventing or prohibiting
the Merger and such Order shall have become final and nonappealable.
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(v) If the requisite shareholder vote of Radiance,
including approval of holders of a majority of the Series A Preferred
Stock who will receive no consideration or benefit, other than the
Merger Consideration, or CVD approving the principal terms of this
Agreement, the Agreement of Merger and the Merger in accordance with
applicable law and the Certificate of Incorporation and Bylaws of
Radiance or CVD, as applicable, is not obtained.
8.2 Effect of Termination. If this Agreement is validly terminated by
either Radiance or CVD pursuant to Section 8.1, this Agreement will forthwith
become null and void and there will be no liability or obligation on the part of
either Radiance or CVD (or any of their respective Representatives or
affiliates), except (i) that the provisions of Sections 6.1(b) and 6.10 will
continue to apply following any such termination and (ii) that nothing contained
herein shall relieve any party hereto from liability for willful breach of its
representations, warranties, covenants or agreements contained in this
Agreement.
8.3 Amendment. This Agreement may be amended, supplemented or modified
by action taken by or on behalf of the respective Boards of Directors of the
parties hereto at any time prior to the Effective Time. No such amendment,
supplement or modification shall be effective unless set forth in a written
instrument duly executed by or on behalf of each party hereto.
8.4 Waiver. At any time prior to the Effective Time any party hereto, by
action taken by or on behalf of its Board of Directors, may to the extent
permitted by applicable law (i) extend the time for the performance of any of
the obligations or other acts of the other parties hereto, (ii) waive any
inaccuracies in the representations and warranties of the other parties hereto
contained herein or in any document delivered pursuant hereto or (iii) waive
compliance with any of the covenants, agreements or conditions of the other
parties hereto contained herein. No such extension or waiver shall be effective
unless set forth in a written instrument duly executed by or on behalf of the
party extending the time of performance or waiving any such inaccuracy or
non-compliance. No waiver by any party of any term or condition of this
Agreement, in any one or more instances, shall be deemed to be or construed as a
waiver of the same or any other term or condition of this Agreement on any
future occasion.
ARTICLE 9
GENERAL PROVISIONS
9.1 Survival of Representations, Warranties, Covenants and Agreements.
The representations, warranties, covenants and agreements contained in this
Agreement or in any instrument delivered pursuant to this Agreement shall
survive the Effective Time and shall continue in full force and effect for a
period of one year following the Effective Time (the "Indemnification Period").
9.2 Indemnification.
(a) Indemnification of CVD. Subject to the provisions of this
Article 9, Radiance shall indemnify CVD from and against any and all damage,
loss, liability and expense (including without limitation reasonable expenses of
investigation and reasonable attorneys' fees and
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reasonable expenses in connection with any action, suit or proceeding) incurred
or suffered by CVD arising out of any breach of the representations, warranties,
covenants or agreements of Radiance set forth herein (the "CVD Indemnifiable
Damages"). Notwithstanding the foregoing, CVD shall not be entitled to
indemnification hereunder until the CVD Indemnifiable Damages exceed $100,000
and thereafter shall be entitled to indemnification for all CVD Indemnifiable
Damages. CVD may obtain indemnification for any CVD Indemnifiable Damages to
which this Section 9.2(a) relates only if it makes a claim for indemnification
within the Indemnification Period defined in Section 9.1, and only to the extent
such claim arose from activities of Radiance outside the control and management
of CVD.
(b) Indemnification by CVD of Radiance. Subject to the provisions
of this Article IX, CVD agrees to indemnify the stockholders of Radiance after
the Effective Time from and against any and all damage, loss, liability and
expense (including without limitation reasonable expenses of investigation and
reasonable attorneys' fees and reasonable expenses in connection with any
action, suit or proceeding) incurred or suffered by the stockholders of Radiance
arising out of any breach of the representation, warranties, covenants or
agreements of CVD and Sub set forth herein (the "Radiance Indemnifiable
Damages"). Notwithstanding the foregoing, Radiance shall not be entitled to
indemnification hereunder until the Radiance Indemnifiable Damages exceed
$100,000 and thereafter shall be entitled to indemnification for all Radiance
Indemnifiable Damages, up to an amount which shall not exceed the Merger
Consideration received by the Stockholders. The Stockholders of Radiance may
obtain indemnification for any Radiance Indemnifiable Damages to which this
Section 9.2(b) relates only if a Stockholder or Stockholders of Radiance makes a
claim for indemnification within the Indemnification Period defined in Section
9.1.
(c) Indemnification Procedures. A party seeking indemnification
(the "Indemnitee") shall use its best efforts to minimize any liabilities,
damages, deficiencies, claims, judgments, assessments, costs and expenses in
respect of which indemnity may be sought under this Agreement. The Indemnitee
shall give prompt written notice to the party from whom indemnification is
sought (the "Indemnitor") of the assertion of a claim for indemnification, but
in no event longer than twenty (20) days after service of process in the event
litigation is commenced against the Indemnitee by a third party, or sixty (60)
days after the assertion of such claim, whichever shall first occur. No such
notice of assertion of a claim shall satisfy the requirements of this Section
9.2(c) unless it describes in reasonable detail and in good faith the facts and
circumstances upon which the asserted claim for indemnification is based. If any
action or proceeding shall be brought in connection with any liability or claim
to be indemnified hereunder, the Indemnitee shall provide the Indemnitor twenty
(20) calendar days to decide whether to defend such liability or claim. During
such period, the Indemnitee shall take all necessary steps to protect the
interests of itself and the Indemnitor, including the filing of any necessary
responsive pleadings, the seeking of emergency relief or other action necessary
to maintain the status quo, subject to reimbursement from the Indemnitor of its
expenses in doing so. The Indemnitor shall (with, if necessary, reservation of
rights) defend such action or proceeding at its expense, using counsel selected
by the insurance company insuring against any such claim and undertaking to
defend such claim, or by other counsel selected by it and approved by the
Indemnitee, which approval shall not be unreasonably withheld or delayed. The
Indemnitor shall keep the Indemnitee fully apprised at all times of the status
of the defense and shall consult with the Indemnitee prior to the settlement of
any indemnified matter. The Indemnitee agrees to use reasonable efforts to
cooperate with the Indemnitor in connection with its defense of indemnifiable
claims. In the event the Indemnitee has a
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claim or claims against any third party arising out of or connected with the
indemnified matter, then upon receipt of indemnification, the Indemnitee shall
fully assign to the Indemnitor the entire claim or claims to the extent of the
indemnification actually paid by the Indemnitor and the Indemnitor shall
thereupon be subrogated with respect to such claim or claims of the Indemnitee.
(d) No Liability of Radiance Stockholders. CVD agrees that the
sole and exclusive remedy of CVD after the Effective Time for any damage, loss,
liability or expense under this Agreement, including, without limitation, for
CVD Indemnifiable Damages, pursuant to Article 9, or in connection with the
transactions contemplated hereunder shall be limited to the stock and other
property held in escrow, pursuant to the terms of the Escrow Agreement, provided
however, any such claims must be brought by CVD within the Indemnification
Period.
9.3 Knowledge. With respect to any representations or warranties
contained herein which are made to the knowledge of Radiance or CVD or any
Subsidiary, as the case may be, the actual knowledge of the officers and
directors of Radiance or CVD, as the case may be, shall be imputed to Radiance
or CVD, as the case may be.
9.4 Notices. All notices, requests and other communications hereunder
must be in writing and will be deemed to have been duly given only if delivered
personally or by facsimile transmission or nationally recognized overnight
courier service (such as Federal Express) or mailed (first class postage
prepaid) to the parties at the following addresses or facsimile numbers:
If to CVD, Sub or the Surviving Corporation, to:
CardioVascular Dynamics, Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Executive Officer
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Radiance, to:
Radiance Medical Systems, Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Executive Officer
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to:
▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ Dallas, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section, be deemed given upon receipt, and (iii) if delivered
by nationally recognized overnight courier or by mail in the manner described
above to the address as provided in this Section 9.4, be deemed given upon
receipt (in each case regardless of whether such notice, request or other
communication is received by any other person to whom a copy of such notice,
request or other communication is to be delivered pursuant to this Section 9.4).
Any party from time to time may change its address, facsimile number or other
information for the purpose of notices to that party by giving notice specifying
such change to the other parties hereto.
9.5 Entire Agreement. This Agreement, together with the Registration
Rights Agreements, and the provisions of Sections 2 (last paragraph only) , 4,
7-10, and 13 of that certain Letter of Intent between CVD and Radiance dated
September 23, 1998, supersedes all prior discussions and agreements among the
parties hereto with respect to the subject matter hereof and contains the sole
and entire agreement among the parties hereto with respect to the subject matter
hereof.
9.6 Public Announcements. Except as otherwise required by law or the
rules of The Nasdaq National Market, so long as this Agreement is in effect, CVD
and Radiance will not, and will not permit any of their respective
Representatives to, issue or cause the publication of any press release or make
any other public announcement or otherwise cause or permit the release in any
manner which could reasonably be expected to cause such information to be known
to the public with respect to the transactions contemplated by this Agreement
without the written consent of the other party, which consent shall not be
unreasonably withheld, provided however, that the parties may make such
announcements and releases to the extent the content of such announcements or
releases was contained in a prior approved announcement or release. CVD and
Radiance will cooperate with each other in the development and distribution of
all press releases and other public announcements with respect to this Agreement
and the transactions contemplated hereby, and will furnish the other with drafts
of any such releases and announcements as far in advance as practicable.
9.7 No Third Party Beneficiary. The terms and provisions of this
Agreement are intended solely for the benefit of each party hereto and their
respective successors or permitted assigns, and except as provided in Sections
2.1 to 2.5, 6.2, 6.3, 6.8, 6.9, 6.11, 9.2, 9.7 and 9.8 (which are intended to be
for the benefit of the persons entitled to therein, and may be enforced by any
of such persons), it is not the intention of the parties to confer third-party
beneficiary rights upon any other person.
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9.8 No Assignment; Binding Effect. Prior to Closing, neither this
Agreement nor any right, interest or obligation hereunder may be assigned by any
party hereto without the prior written consent of the other parties hereto and
any attempt to do so will be void, except that Sub may assign any or all of its
rights, interests and obligations hereunder to another direct or indirect
wholly-owned Subsidiary of CVD. Subject to the preceding sentence, this
Agreement is binding upon, inures to the benefit of and is enforceable by the
parties hereto and the third party beneficiaries to the extent set forth in
Section 9.7 and their respective successors and assigns, provided however, that
CVD shall cause any such successor or assign to either (i) pay all Milestone
Payments remaining to be earned if not assumed within 10 days of such
assignment, or (ii) expressly assume in writing all CVD's obligations hereunder,
including the obligation to pay Milestone Payments when due and to fund
development as required by Section 6.9 of this Agreement.
9.9 Headings. The headings used in this Agreement have been inserted for
convenience of reference only and do not define or limit the provisions hereof
9.10 Invalid Provisions. If any provision of this Agreement is held to
be illegal, invalid or unenforceable under any present or future law, and if the
rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby, (i) such provision will be fully
severable, (ii) this Agreement will be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof,
(iii) the remaining provisions of this Agreement will remain in full force and
effect and will not be affected by the illegal, invalid or unenforceable
provision or by its severance herefrom and (iv) in lieu of such illegal, invalid
or unenforceable provision, there will be added automatically as a part of this
Agreement a legal, valid and enforceable provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible.
9.11 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California applicable to a contract
executed and performed in such State, without giving effect to the conflicts of
laws principles thereof.
9.12 Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
9.13 Arbitration. All claims, controversies, differences or disputes
between or among any of the parties hereto arising from or relating to this
Agreement shall be determined solely and exclusively by arbitration in
accordance with the rules of commercial arbitration then in effect of the
American Arbitration Association, or any successors hereto ("AAA"), in Orange
County, California, unless the parties otherwise agree in writing. Each of the
parties consents to venue for such arbitrations in Orange County, California and
to service of process by certified or registered mail. Upon commencement of any
arbitration pursuant hereto, the parties shall jointly select an arbitrator. In
the event the parties fail to agree upon an arbitrator within twenty (20) days,
then each party shall select an arbitrator and such arbitrators shall then
select a third arbitrator to serve as the sole arbitrator; provided that if
either party, in such event, fails to select an arbitrator within seven (7)
days, such arbitrator shall be selected by the AAA upon application of either
party. Judgment upon the award of the agreed upon arbitrator or the so chosen
third arbitrator, as the case may be, shall be binding and shall be entered into
by a court of competent jurisdiction. The parties agree to abide by
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any decision rendered in any such arbitration as final and binding and waive the
right to submit the dispute to a public tribunal for a jury or nonjury trial.
The Civil Discovery Act of 1986 contained in Article 3 (commencing with Section
2016) of Chapter 3 of Title III of Part IV of the California Code of Civil
Procedure shall be applicable to such arbitration proceedings, and all rights,
remedies, obligations, liabilities and procedures set forth in said Article 3
shall be available to the parties. Each party shall be entitled to discovery
which shall be conducted in accordance with the provisions of Section 2020 and
2025 of the California Code of Civil Procedures. The prevailing party shall be
entitled to reasonable attorney fees in connection with such arbitration.
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IN WITNESS WHEREOF, each party hereto has caused this Agreement to be
signed by its officer thereunto duly authorized as of the date first above
written.
CARDIOVASCULAR DYNAMICS, INC.
By:
---------------------------------
Name:
Title:
CVD/RMS ACQUISITION CORP.
By:
---------------------------------
Name:
Title:
RADIANCE MEDICAL SYSTEMS, INC.
By:
---------------------------------
Name:
Title:
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EXHIBIT A
ESCROW AGREEMENT
A-1
42
EXHIBIT B
REGISTRATION RIGHTS AGREEMENT
B-1
43
EXHIBIT C
EMPLOYMENT AGREEMENT
C-1