AGREEMENT AND PLAN OF MERGER
DATED AS OF
MAY 6, 2000
AMONG
EPITOPE, INC.
▇▇▇▇▇▇ MERGER SUBSIDIARY, INC.
AND
STC TECHNOLOGIES, INC.
Table of Contents
Page
ARTICLE I DEFINITIONS.......................................................................2
ARTICLE II THE MERGERS......................................................................2
Section 2.1. STC MERGER.....................................................................2
Section 2.2. EPITOPE MERGER.................................................................7
Section 2.3. Exchange of Certificates......................................................10
Section 2.4. Affiliates....................................................................12
ARTICLE III REPRESENTATIONS AND WARRANTIES OF EPITOPE......................................12
Section 3.1. Corporate Existence and Power.................................................12
Section 3.2. Corporate Authorization.......................................................13
Section 3.3. Governmental Authorization....................................................13
Section 3.4. Non-Contravention.............................................................13
Section 3.5. Capitalization................................................................14
Section 3.6. Subsidiaries..................................................................14
Section 3.7. Epitope SEC Documents.........................................................15
Section 3.8. Financial Statements; No Material Undisclosed ..................................
Liabilities...............................................................15
Section 3.9. Information to be Supplied....................................................16
Section 3.10. Absence of Certain Changes...................................................16
Section 3.11. Litigation...................................................................17
Section 3.12. Taxes........................................................................17
Section 3.13. Employee Benefits............................................................18
Section 3.14. Compliance with Laws; Licenses, Permits and
Registrations......................................................19
Section 3.15. Title to Properties..........................................................20
Section 3.16. Intellectual Property........................................................20
Section 3.17. Environmental Matters........................................................21
Section 3.18. Finders' Fees; Opinions of Financial Advisor.................................22
Section 3.19. Required Vote; Board Approval................................................22
Section 3.20. State Takeover Statutes......................................................23
Section 3.21. Pooling Matters; Tax Treatment...............................................23
Section 3.22. Certain Agreements...........................................................23
Section 3.23. Epitope Rights Agreement.....................................................24
Section 3.24. Employment Agreements........................................................24
Section 3.25. Transactions With Directors, Officers
AND AFFILIATES............................................................24
Section 3.26. Material Contracts...........................................................24
Section 3.27. Certain Business Practices...................................................25
Section 3.28. Insurance....................................................................26
Section 3.29. Product Information..........................................................26
Section 3.30. Product Liability Claims.....................................................27
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF STC...........................................27
Section 4.1. Corporate Existence and Power.................................................27
Section 4.2. Corporate Authorization.......................................................28
Section 4.3. Governmental Authorization....................................................28
Section 4.4. Non-Contravention.............................................................28
Section 4.5. Capitalization................................................................29
Section 4.6. Subsidiaries..................................................................29
Section 4.7. Financial Statements; No Material Undisclosed
Liabilities...............................................................29
Section 4.8. Information to be Supplied....................................................30
Section 4.9. Absence of Certain Changes....................................................30
Section 4.10. Litigation...................................................................31
Section 4.11. Taxes........................................................................31
Section 4.12. Employee Benefits............................................................32
Section 4.13. Compliance with Laws; Licenses, Permits and
Registrations............................................................33
Section 4.14. Title to Properties..........................................................33
Section 4.15. Intellectual Property........................................................34
Section 4.16. Environmental Matters........................................................35
Section 4.17. Finders' Fees; Opinions of Financial Advisor.................................36
Section 4.18. Required Vote and Waiver; Board Approval.....................................36
Section 4.19. State Takeover Statutes......................................................36
Section 4.20. Pooling Matters; Tax Treatment...............................................37
Section 4.21. Certain Agreements...........................................................37
Section 4.22. Employment Agreements........................................................37
Section 4.23. Transactions With Directors, Officers and
Affiliates..............................................................37
Section 4.24. Material Contracts...........................................................38
Section 4.25. Certain Business Practices...................................................39
Section 4.26. Insurance....................................................................39
Section 4.27. Product Information..........................................................39
Section 4.28. Product Liability Claims.....................................................40
ARTICLE V REPRESENTATIONS AND WARRANTIES OF MERGER SUB.....................................40
Section 5.1. Organization..................................................................40
Section 5.2. Corporate Authorization.......................................................41
Section 5.3. Non-Contravention.............................................................41
Section 5.4. No Business Activities........................................................41
Section 5.5. Taxes.........................................................................41
ARTICLE VI COVENANTS OF EPITOPE............................................................41
Section 6.1. Epitope Interim Operations....................................................41
Section 6.2. Acquisition Proposals; Board Recommendation...................................44
ARTICLE VII COVENANTS OF STC...............................................................46
Section 7.1. STC Interim Operations........................................................46
Section 7.2. Acquisition Proposals; Board Recommendation...................................48
ARTICLE VIII COVENANTS OF STC AND EPITOPE..................................................49
Section 8.1. Reasonable Best Efforts.......................................................49
Section 8.2. Certain Filings; Cooperation in Receipt of Consents;
Listing...................................................................49
Section 8.3. Headquarters..................................................................51
Section 8.4. Public Announcements..........................................................51
Section 8.5. Access to Information; Notification of Certain
Matters...................................................................51
Section 8.6. Further Assurances............................................................52
Section 8.7. Tax and Accounting Treatment..................................................52
Section 8.8. Affiliates....................................................................53
Section 8.9. Confidentiality...............................................................53
Section 8.10. Benefit Matters..............................................................55
Section 8.11. Antitrust Matters............................................................55
Section 8.12. Exemption From Liability Under Section 16(b).................................56
Section 8.13. Indemnification and Insurance................................................57
ARTICLE IX CONDITIONS TO THE MERGER........................................................58
Section 9.1. Conditions to the Obligations of Each Party...................................58
Section 9.2. Conditions to the Obligations of Epitope and
Merger Sub.............................................................59
Section 9.3. Conditions to the Obligations of STC..........................................60
ARTICLE X TERMINATION......................................................................61
Section 10.1. Termination..................................................................61
Section 10.2. Effect of Termination........................................................63
Section 10.3. Fees and Expenses............................................................64
ARTICLE XI MISCELLANEOUS...................................................................64
Section 11.1. Notices......................................................................64
Section 11.2. Survival of Representations, Warranties and
Covenants After the Effective Time.......................................65
Section 11.3. Amendments; No Waivers.......................................................66
Section 11.4. Assignment...................................................................66
Section 11.5. Governing Law................................................................66
Section 11.6. Counterparts; Effectiveness..................................................66
Section 11.7. No Third Party Beneficiaries.................................................66
Section 11.8. Interpretation...............................................................66
Section 11.9. Enforcement..................................................................67
Section 11.10. Entire Agreement............................................................67
Section 11.11. Severability................................................................67
APPENDICES
Appendix I - Definitions
EXHIBITS
Exhibit A - Epitope Stockholders Agreement
Exhibit B - STC Stockholders Agreement
Exhibit C - Certificate of Merger for STC Merger
Exhibit D - Articles of Merger for Epitope Merger
Exhibit E - Certificate of Merger for Epitope Merger
Exhibit F - Certificate of Incorporation of Merger Sub
Exhibit G - Bylaws of Merger Sub
Exhibit H - Principal Officers of Surviving Corporation
Exhibit I - Epitope Representation Letter
Exhibit J - STC Representation Letter
Exhibit K - Form of STC Affiliate Agreement
Exhibit L - Form of Epitope Affiliate Agreement
Exhibit M - Indemnification Agreements
Exhibit N - List of Employees
Exhibit O - Merger Sub Representation Letter
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of May 6, 2000 (the "Agreement"),
by and among Epitope, Inc., an Oregon corporation ("Epitope"), ▇▇▇▇▇▇ Merger
Subsidiary, Inc., a Delaware corporation and a wholly-owned subsidiary of
Epitope ("Merger Sub") and SdTC Technologies, Inc., a Delaware corporation
("STC").
RECITALS:
WHEREAS, the Boards of Directors of Epitope and STC deem it advisable
and in the best interests of each corporation and its respective stockholders
that Epitope and STC engage in a business combination as peer firms in a
combination of equals in order to advance the long-term strategic business
interests of Epitope and STC;
WHEREAS, the combination of Epitope and STC shall be effected by the
terms of this Agreement through the mergers as outlined below;
WHEREAS, the respective Boards of Directors of STC and Merger Sub have
each (i) determined that the merger of STC with and into Merger Sub (the "STC
Merger") is fair to, and in the best interests of, their respective companies
and stockholders, (ii) have approved and declared the advisability of this
Agreement and (ii) have approved the STC Merger, and (iii) have recommended the
approval and adoption of this Agreement by their respective company's
stockholders;
WHEREAS, the respective Boards of Directors of Epitope and Merger Sub
have each (i) determined that the merger of Epitope with and into Merger Sub
(the "Epitope Merger"; the Epitope Merger and the STC Merger are referred to
collectively as the "Mergers") is fair to, and in the best interests of, their
respective companies and stockholders, (ii) have approved and declared the
advisability of this Agreement and the Epitope Merger, and (iii) have
recommended the approval and adoption of this Agreement by their respective
company's stockholders;
WHEREAS, for Federal income tax purposes, it is intended that each of
the Mergers shall qualify as a reorganization within the meaning of Section
368(a) of the Internal Revenue Code of 1986, as amended (a "368
Reorganization"), and the regulations promulgated thereunder;
WHEREAS, for accounting purposes, it is intended that each of the
Mergers shall be accounted for as a pooling of interests transaction under
United States generally accepted accounting principles applied on a consistent
basis ("GAAP"); and
WHEREAS, simultaneously with the execution and delivery of this
Agreement: (i) STC has entered into an agreement (the "STC Stockholders
Agreement") with certain stockholders of Epitope pursuant to which such Epitope
stockholders have agreed to vote the shares of Epitope Common Stock owned by
them in favor of the Epitope Merger under certain circumstances, which agreement
is accompanied by irrevocable proxies to vote such shares in accordance
therewith; and (ii) Epitope has entered into an agreement (the "Epitope
Stockholders Agreement" and, together with the STC Stockholders Agreement, the
"Stockholders Agreements," in the respective forms attached as Exhibits A and B
hereto) with certain stockholders of STC pursuant to which such STC stockholders
have agreed to vote the shares of STC Common Stock owned
by them in favor of the STC Merger under certain circumstances, which agreement
is accompanied by irrevocable proxies to vote such shares in accordance
therewith.
NOW, THEREFORE, in consideration of the premises, which are incorporated
into and made part of this Agreement, and of the mutual representations,
warranties, covenants, agreements and conditions set forth herein and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
For purposes of this Agreement, the capitalized terms used in this
Agreement shall have the meanings specified or referred to in Appendix I hereto
which is incorporated herein by reference.
ARTICLE II
THE MERGERS
SECTION 2.1. STC Merger.
(a) The STC Merger. Upon the terms and subject to the conditions of
this Agreement and in accordance with the Delaware General Corporation
Law of the State of Delaware (the "Delaware Law"), at the STC Effective
Time (as defined below), STC shall be merged with and into Merger Sub.
As a result of the STC Merger, the separate corporate existence of STC
shall cease and Merger Sub shall continue as the surviving corporation
of the STC Merger (the "Surviving Corporation").
(b) STC Effective Time. As soon as practicable after the Closing of
the STC Merger, the Certificate of Merger for the STC Merger ("STC
Certificate of Merger"), in substantially the form attached hereto as
Exhibit C, prepared and executed in accordance with the relevant
provisions of the Delaware Law, shall be filed with the Secretary of
State of Delaware. The parties hereto agree to take all such further
actions as may be required by law to make the Merger effective. The
Merger shall become effective in accordance with the terms of this
Agreement, the STC Certificate of Merger at the time and date
contemplated therein (such time and date being referred to herein as the
"STC Effective Time").
(c) The Closing. The Closing of the Mergers and transactions
contemplated by this Agreement will take place at 11:00 a.m. on a date
mutually agreed upon by the parties hereto, which shall be no later than
the third Business Day following the date on which all of the conditions
to the obligations of the parties hereunder set forth in Article VIII
hereof have been satisfied or waived. The place of Closing shall be at
such place as may be mutually agreed upon by the parties hereto.
(d) Effects of the STC Merger. At and after the STC Effective Time,
the STC Merger will have the effects set forth in the Delaware Law.
Without limiting the
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generality of the foregoing, and subject thereto, at the Effective Time
all the property, rights, privileges, powers and franchises of Merger
Sub and STC shall be vested in the Surviving Corporation, and all debts,
liabilities and duties of Merger Sub and STC shall become the debts,
liabilities and duties of the Surviving Corporation. In addition, the
STC Merger shall have the following effects:
(i) Articles of Incorporation. The Certificate of Incorporation
of Merger Sub as in effect as of the date hereof shall be amended
to change the name of Merger Sub to OraSure Technologies, Inc., but
otherwise shall read as set forth in Exhibit F and such Certificate
of Incorporation, as so amended, shall be the Certificate of
Incorporation of the Surviving Corporation (as set forth in Exhibit
F hereto) and the Certificate of Incorporation shall be the
Certificate of Incorporation of the Surviving Corporation.
(ii) Bylaws. The Bylaws of Merger Sub as in effect as of the
date hereof shall be amended to reflect the change of Merger Sub's
name to OraSure Technologies, Inc., but otherwise shall read as set
forth in Exhibit G and shall, as so amended, be the Bylaws of the
Surviving Corporation.
(iii) Board of Directors. At the STC Effective Time, the Board
of Directors of the Surviving Corporation shall consist of seven
(7) persons. Of the seven persons initially elected to the Board of
Directors of the Surviving Corporation, three (3) (the "STC
Designees") shall be persons named by the Board of Directors of STC
and three (3) (the "Epitope Designees") shall be persons named by
the Board of Directors of Epitope and one (1) shall be a person
mutually acceptable to both the Boards of Directors of STC and
Epitope. The Board of Directors of the Surviving Corporation shall
be divided into three classes, with the initial terms of office of
the first, second and third classes expiring at the first, second
and third annual meetings of the stockholders of the Surviving
Corporation, respectively. One STC Designee and one Epitope
Designee shall be placed in each class of the Board of Directors of
the Surviving Corporation. If, prior to the STC Effective Time, (i)
any of the individuals named by STC or Epitope to serve on the
Board of Directors of the Surviving Corporation following the STC
Effective Time resigns, retires or otherwise ceases to serve as a
director of STC or Epitope, as the case may be, or otherwise
becomes unable or unwilling to serve as a director of the Surviving
Corporation, or (ii) STC or Epitope shall determine to replace an
individual named by such party to serve on the Board of Directors
of the Surviving Corporation, the party that designated such
individual may name a replacement to become a director of the
Surviving Corporation. The persons named as members of the Board of
Directors of the Surviving Corporation pursuant to this Section
2.1.(d)(iii) shall be named in the Joint Proxy Statement/Prospectus
and the Registration Statement, subject to receipt of the consent
of such individuals to be so named.
(iv) Management. The principal officers of the Surviving
Corporation at the Effective Time shall be as listed on Exhibit H.
All other management
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positions of the Surviving Corporation shall be determined jointly
by the Surviving Corporation's President and Chief Executive
Officer.
(e) Effect on Capital Stock. At the STC Effective Time, by virtue
of the STC Merger and without any action on the part of the parties
hereto or their respective stockholders:
(i) STC Common Stock. Each share of STC Common Stock
outstanding immediately prior to the STC Effective Time (except for
shares of STC Common Stock held by persons who object to the STC
Merger and comply with all provisions of the Delaware Law
concerning the right of such holders to dissent from the STC Merger
and demand appraisal for their shares) shall be converted into and
become shares of Surviving Corporation Common Stock at an exchange
ratio (the "Exchange Ratio") determined as follows (together with
any cash in lieu of fractional shares of Surviving Corporation
Common Stock to be paid pursuant to Section 2.1(e)(iv) (the "Merger
Consideration") which fraction of a share shall be rounded to four
decimal places):
(A) If the Average Epitope Stock Price is greater than
$13.00, the Exchange Ratio shall be the quotient of (i) the
quotient of (x) $260 million divided by (y) the Average Epitope
Stock Price, divided by (ii) the sum of the number of shares of
STC Common Stock outstanding immediately prior to the STC
Effective Time and the number of shares of STC Common Stock
underlying STC Common Stock Equivalents; or
(B) If the Average Epitope Stock Price is equal to or less
than $13.00, but equal to or more than $10.00, the Exchange
Ratio shall be the quotient of 20 million shares divided by the
sum of the number of shares of STC Common Stock outstanding
immediately prior to the STC Effective Time and the number of
shares of STC Common Stock underlying STC Common Stock
Equivalents; or
(C) If the Average Epitope Stock Price is less than $10.00,
the Exchange Ratio shall be the quotient of (i) the quotient of
(x) $200 million divided by (y) the Average Epitope Stock
Price, divided by (ii) the sum of the number of shares of STC
Common Stock outstanding immediately prior to the STC Effective
Time and the number of shares of STC Common Stock underlying
STC Common Stock Equivalents; provided however, that in the
event the quotient in clause (i) of this subsection (C) exceeds
25 million shares, such quotient shall be deemed to be 25
million shares for the purposes of completing the calculation
set forth in this subsection (C), and; provided further, that
in the event that the Average Epitope Stock Price is less than
$6.00, STC shall have the termination rights provided in
Section 10.1(h).
(ii) STC Stock held by Merger Sub and STC. Each share of STC
Common Stock or STC Preferred Stock held by STC as treasury stock
or owned
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by Merger Sub immediately prior to the STC Effective Time shall be
cancelled without payment of any consideration therefor and shall
cease to exist.
(iii) Merger Sub Common Stock. Each share of common stock of
Merger Sub outstanding and each share held in treasury immediately
prior to the STC Effective Time shall be converted into and become
one share of Surviving Corporation Common Stock.
(iv) Fractional Shares. No fraction of a share of Surviving
Corporation Common Stock shall be issued in connection with the
conversion of STC Common Stock in the STC Merger and the
distribution of Surviving Corporation Common Stock in respect
thereof, but in lieu of such fraction, the Exchange Agent shall
make a cash payment (without interest and subject to the payment of
any applicable withholding Taxes) equal to the same fraction of the
market value of a full share of Surviving Corporation Common Stock,
computed on the basis of the mean of the high and low sales prices
of Surviving Corporation Common Stock as reported on NASDAQ on the
first full day on which Surviving Corporation Common Stock is
traded on the Nasdaq Stock Market after the STC Effective Time.
(f) Stock Options and Other Stock Compensation.
(i) On or prior to the STC Effective Time, STC will take all
action necessary such that each stock option or other stock related
right or other form of stock related incentive or deferred
compensation that was granted pursuant to the STC Employee Plans
(as defined in Section 4.12(a)) prior to the STC Effective Time and
which remains outstanding immediately prior to the STC Effective
Time shall cease to represent a right with respect to shares of STC
Common Stock and shall be converted, at the STC Effective Time,
into a right, on the same terms and conditions as were applicable
under such stock option or other stock related right or other form
of stock related incentive or deferred compensation, as applicable
(but taking into account any changes thereto (except that there
shall be no acceleration in the vesting or exercisability of such
option, right or incentive compensation by reason of this
Agreement, the STC Merger, the Epitope Merger or the other matters
contemplated by this Agreement), provided for in the STC Employee
Plans or in the terms of such right by reason of this Agreement or
the transactions contemplated hereby), with respect to that number
of shares of Surviving Corporation Common Stock determined by
multiplying the number of shares of STC Common Stock subject to
such stock option or other stock related right or other form of
stock related incentive or deferred compensation, as applicable, by
the Exchange Ratio, rounded, if necessary, to the nearest whole
share of Surviving Corporation Common Stock, at (in the case of a
stock option or stock appreciation right) a price per share
(rounded to the nearest one-hundredth of a cent) equal to the
per-share exercise price specified in such stock option or stock
appreciation right, as applicable, divided by the Exchange Ratio;
provided, however, that in the case of any stock option to which
Section 421 of the Code applies by reason of its qualification
under Section 422 of the Code, the
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option price, the number of shares subject to such option and the
terms and conditions of exercise of such option shall be determined
in a manner consistent with the requirements of Section 424(a) of
the Code.
(ii) As soon as practicable after the STC Effective Time, the
Surviving Corporation shall deliver to the holders of stock options
or other stock related rights or other forms of stock related
incentive or deferred compensation appropriate notices setting
forth such holders' rights pursuant to the STC Employee Plans
(except that there shall be no acceleration in the vesting or
exercisability of such option, right or incentive compensation by
reason of this Agreement, the STC Merger, the Epitope Merger or the
other matters contemplated by this Agreement) and the agreements
evidencing the grants of such stock options or other stock related
rights or other forms of stock related incentive or deferred
compensation shall continue in effect on the same terms and
conditions (subject to the adjustments required by this Section
2.1(f)(ii) after giving effect to the STC Merger and the Epitope
Merger and the terms of the STC Employee Plans (except that there
shall be no acceleration in the vesting or exercisability of such
option, right or incentive compensation by reason of this
Agreement, the STC Merger, the Epitope Merger or the other matters
contemplated by this Agreement)). To the extent permitted by law,
the Surviving Corporation shall comply with the terms of the STC
Employee Plans and shall take such reasonable steps as are
necessary or required by, and subject to the provisions of, such
STC Employee Plans, to have the stock options which qualified as
incentive stock options prior to the Effective Time continue to
qualify as incentive stock options of the Surviving Corporation
after the Effective Time.
(iii) The Surviving Corporation shall take all corporate action
necessary to reserve for issuance a sufficient number of shares of
Surviving Corporation Common Stock for delivery upon exercise of
stock options or other stock related rights or other forms of stock
related incentive or deferred compensation in accordance with this
Section 2.1(f). Promptly after the STC Effective Time, the
Surviving Corporation shall file a registration statement on Form
S-3 or Form S-8, as the case may be (or any successor or other
appropriate forms), with respect to the shares of Surviving
Corporation Common Stock subject to such stock options or other
stock related rights or other forms of stock related incentive or
deferred compensation, and shall use commercially reasonable
efforts to maintain the effectiveness of such registration
statement or registration statements (and maintain the current
status of the prospectus or prospectuses contained therein) for so
long as such stock options or other stock related rights or other
forms of stock related incentive or deferred compensation remain
outstanding. With respect to those individuals who subsequent to
the Mergers will be subject to the reporting requirements under
Section 16(a) of the Exchange Act, where applicable, the Surviving
Corporation shall administer the STC Employee Plans in a manner
consistent with the exemptions provided by Rule 16b-3 promulgated
under the Exchange Act.
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(g) Certain Adjustments. If, between the date of this Agreement and
the Effective Time, the outstanding STC Common Stock or Epitope Common
Stock shall have been changed into a different number of shares or
different class by reason of any reclassification, recapitalization,
stock split, reverse stock split, combination or exchange of shares, or
a stock dividend or dividend payable in any other securities shall be
declared with a record date within such period, or any similar event
shall have occurred, the Exchange Ratio shall each be appropriately
adjusted to provide to the holders of STC Common Stock the same economic
effect as contemplated by this Agreement prior to such event.
(h) Appraisal Rights. Notwithstanding Section 2.1(e), shares of STC
Common Stock outstanding immediately prior to the STC Effective Time and
held by a holder who has not voted in favor of the Mergers or consented
thereto in writing and who has demanded appraisal for such shares of STC
Common Stock, as the case may be, in accordance with the Delaware Law
shall not be converted into the shares of Surviving Corporation Common
Stock unless such holder fails to perfect or withdraws or otherwise
loses his right to appraisal. If after the STC Effective Time such
holder fails to perfect or withdraws or loses his right to appraisal,
such shares of STC Common Stock shall be treated as if they had been
converted as of the STC Effective Time into the shares of Surviving
Corporation Common Stock in accordance with Section 2.1(e). STC shall
give the Surviving Corporation prompt notice of any demands received by
STC for appraisal of shares of STC Common Stock, and the Surviving
Corporation shall have the right to participate in all negotiations and
proceedings with respect to such demands. STC shall not, except with the
prior written consent of the Surviving Corporation, make any payment
with respect to, or settle or offer to settle, any such demands.
SECTION 2.2. Epitope Merger.
(a) The Epitope Merger. Upon the terms and subject to the
conditions of this Agreement and in accordance with the Business
Corporation Act of the State of Oregon (the "Oregon Law"), and the
Delaware General Corporation Law of the State of Delaware (the "Delaware
Law"), at the Epitope Effective Time (as defined below), which shall be
immediately following the STC Effective Time, Epitope shall be merged
with and into Merger Sub. As a result of the Merger, the separate
corporate existence of Epitope shall cease and Merger Sub shall continue
as the surviving corporation of the Epitope Merger (the "Surviving
Corporation").
(b) Epitope Effective Time. As soon as practicable after the
Closing of the Mergers, the Articles of Merger for the Epitope Merger in
substantially the form attached hereto as Exhibit D, prepared and
executed in accordance with the relevant provisions of the Oregon Law,
shall be filed with the Secretary of State of Oregon, and the
Certificate of Merger for the Epitope Merger, in substantially the form
attached hereto as Exhibit E, prepared and executed in accordance with
the relevant provisions of the Delaware Law, shall be filed with the
Secretary of State of Delaware. The parties hereto agree to take all
such further actions as may be required by law to make the Epitope
Merger effective. The Epitope Merger shall become effective in
accordance with the terms of this Agreement, the Articles of Merger and
the Certificate of Merger at the time and date
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contemplated therein (such time and date being referred to herein as the
Epitope Effective Time or "Effective Time").
(c) Effects of the Epitope Merger. At and after the Epitope
Effective Time, the Epitope Merger will have the effects set forth in
the Delaware Law and the Oregon Law. Without limiting the generality of
the foregoing, and subject thereto, at the Epitope Effective Time all
the property, rights, privileges, powers and franchises of Epitope and
Merger Sub shall be vested in the Surviving Corporation, and all debts,
liabilities and duties of Epitope and Merger Sub shall become the debts,
liabilities and duties of the Surviving Corporation. In addition, the
Epitope Merger shall have the following effects:
(i) Certificate of Incorporation. The Certificate of
Incorporation of Merger Sub as in effect as of the date hereof
shall be amended to change the name of Merger Sub to OraSure
Technologies, Inc., but otherwise shall read as set forth in
Exhibit F and such Certificate of Incorporation, as so amended,
shall be the Certificate of Incorporation of the Surviving
Corporation.
(ii) Bylaws. The Bylaws of Merger Sub as in effect as of the
date hereof shall be amended to reflect the change of Merger Sub's
name to OraSure Technologies, Inc., but otherwise shall read as set
forth in Exhibit G and shall, as so amended, be the Bylaws of the
Surviving Corporation.
(iii) Board of Directors. At the Effective Time, the Board of
Directors of the Surviving Corporation shall consist of the seven
(7) persons and be divided into the classes specified in Section
2.1(d)(iii).
(iv) Management. The principal officers of the Surviving
Corporation at the Effective Time shall be as listed on Exhibit H.
All other management positions of the Surviving Corporation shall
be determined jointly by the Surviving Corporation's President and
Chief Executive Officer.
(d) Effect on Capital Stock. At the Epitope Effective Time, by
virtue of the Epitope Merger and without any action on the part of the
parties hereto or their respective stockholders:
(i) Epitope Common Stock. Each share of Epitope Common Stock
outstanding immediately prior to the Epitope Effective Time shall
be converted into and become one share (the "Epitope Exchange
Ratio") of Surviving Corporation Common Stock (the "Epitope Merger
Consideration").
(ii) Epitope Stock held by Epitope and Merger Sub. Each share
of Epitope Common Stock held by Epitope as treasury stock or owned
by Merger Sub immediately prior to the Epitope Effective Time shall
be cancelled without payment of any consideration therefor and
shall cease to exist.
(iii) Merger Sub Common Stock. Each share of Common Stock of
Merger Sub outstanding and each share held in treasury immediately
prior to the
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Epitope Effective Time shall be converted into and become one share
of Surviving Corporation Common Stock.
(e) Stock Options and Other Stock Compensation.
(i) On or prior to the Epitope Effective Time, Epitope will
take all action necessary such that each stock option or other
stock related right or other form of stock related incentive or
deferred compensation that was granted pursuant to the Epitope
Employee Plans (as defined in Section 4.12(a)) prior to the Epitope
Effective Time and which remains outstanding immediately prior to
the Epitope Effective Time shall cease to represent a right with
respect to shares of Epitope Common Stock and shall be converted,
at the Epitope Effective Time, into a right, on the same terms and
conditions as were applicable under such stock option or other
stock related right or other form of stock related incentive or
deferred compensation, as applicable (but taking into account any
changes thereto, provided for in the Epitope Employee Plans or in
the terms of such right by reason of this Agreement or the
transactions contemplated hereby), with respect to that number of
shares of Surviving Corporation Common Stock determined by
multiplying the number of shares of Epitope Common Stock subject to
such stock option or other stock related right or other form of
stock related incentive or deferred compensation, as applicable, by
the Epitope Exchange Ratio, at a price per share equal to the
per-share exercise price specified in such stock option or stock
appreciation right, as applicable.
(ii) As soon as practicable after the Epitope Effective Time,
the Surviving Corporation shall deliver to the holders of stock
options or other stock related rights or other forms of stock
related incentive or deferred compensation appropriate notices
setting forth such holders' rights pursuant to the Epitope Employee
Plans and the agreements evidencing the grants of such stock
options or other stock related rights or other forms of stock
related incentive or deferred compensation shall continue in effect
on the same terms and conditions (after giving effect to the Merger
and the terms of the Epitope Employee Plans. To the extent
permitted by law, the Surviving Corporation shall comply with the
terms of the Epitope Employee Plans and shall take such reasonable
steps as are necessary or required by, and subject to the
provisions of, such Epitope Employee Plans, to have the stock
options which qualified as incentive stock options prior to the
Effective Time continue to qualify as incentive stock options of
the Surviving Corporation after the Effective Time.
(iii) The Surviving Corporation shall take all corporate action
necessary to reserve for issuance a sufficient number of shares of
Surviving Corporation Common Stock for delivery upon exercise of
stock options or other stock related rights or other forms of stock
related incentive or deferred compensation in accordance with this
Section 2.2(d)(ii). Promptly after the Epitope Effective Time, the
Surviving Corporation shall file a registration statement on Form
S-3 or Form S-8, as the case may be (or any successor or other
appropriate forms), with respect to the shares of Surviving
Corporation Common Stock subject to such
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stock options or other stock related rights or other forms of stock
related incentive or deferred compensation, and shall use
commercially reasonable efforts to maintain the effectiveness of
such registration statement or registration statements (and
maintain the current status of the prospectus or prospectuses
contained therein) for so long as such stock options or other stock
related rights or other forms of stock related incentive or
deferred compensation remain outstanding. With respect to those
individuals who subsequent to the Merger will be subject to the
reporting requirements under Section 16(a) of the Exchange Act,
where applicable, the Surviving Corporation shall administer the
Epitope Employee Plans in a manner consistent with the exemptions
provided by Rule 16b-3 promulgated under the Exchange Act.
(f) Certain Adjustments. If, between the date of this Agreement
and the Epitope Effective Time, the outstanding common stock of
Merger Sub or Epitope Common Stock shall have been changed into a
different number of shares or different class by reason of any
reclassification, recapitalization, stock split, reverse stock
split, combination or exchange of shares, or a stock dividend or
dividend payable in any other securities shall be declared with a
record date within such period, or any similar event shall have
occurred, the Epitope Exchange Ratio shall be appropriately
adjusted to provide to the holders of STC Common Stock the same
economic effect as contemplated by this Agreement prior to such
event.
SECTION 2.3. Exchange of Certificates.
(a) Prior to the Effective Time, Epitope and STC shall cause the
Surviving Corporation, and the Surviving Corporation agrees, to appoint
the Exchange Agent to act as the exchange agent in connection with the
Mergers. Except as otherwise provided in this Article II, from and after
the Effective Time, each holder of a certificate that immediately prior
to the STC Effective Time or Epitope Effective Time, as the case may be,
represented outstanding shares of STC Common Stock or Epitope Common
Stock (collectively, the "Certificates") shall be entitled to receive in
exchange therefor, upon surrender thereof to the Exchange Agent, a
certificate or certificates representing the number of whole shares of
Surviving Corporation Common Stock into which such holder's shares were
converted in the STC Merger or Epitope Merger, as the case may be. Prior
to the Effective Time, the Surviving Corporation will deliver to the
Exchange Agent, in trust for the benefit of the holders of STC Common
Stock and Epitope Common Stock, (i) certificates representing shares of
Surviving Corporation Common Stock (such shares of Surviving Corporation
Common Stock together with any dividends or distributions with respect
thereto, being hereinafter referred to as the "Exchange Fund") and (ii)
cash in an amount sufficient for payment in lieu of fractional shares
necessary to make the exchanges contemplated by this Article II on a
timely basis.
(b) Promptly after the Effective Time, the Exchange Agent shall
mail to each record holder of STC Common Stock and Epitope Common Stock
as of the Effective Time, a letter of transmittal (which shall specify
that delivery shall be effected, and risk of loss and title to
Certificates shall pass, only upon proper delivery of the Certificates
to the Exchange Agent) and instructions for use in effecting the
surrender of Certificates in
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exchange for certificates representing shares of Surviving Corporation
Common Stock. Upon surrender to the Exchange Agent of a Certificate,
together with such letter of transmittal duly executed, and any other
required documents, the holder of such Certificate shall be entitled to
receive in exchange therefor, certificates representing shares of
Surviving Corporation Common Stock as set forth in this Article II, and
such Certificate shall forthwith be canceled. No holder of a Certificate
or Certificates shall be entitled to receive any dividend or other
distribution from the Surviving Corporation until the surrender of such
holder's Certificate for a certificate or certificates representing
shares of Surviving Corporation Common Stock. Upon such surrender, there
shall be paid to the holder the amount of any dividends or other
distributions (without interest) that theretofore became payable, but
that were not paid by reason of the foregoing, with respect to the
number of whole shares of Surviving Corporation Common Stock represented
by the certificates issued upon surrender, which amount shall be
delivered to the Exchange Agent by the Surviving Corporation from time
to time as such dividends or other distributions are declared. If
delivery of certificates representing shares of Surviving Corporation
Common Stock is to be made to a person other than the person in whose
name the Certificate surrendered is registered or if any certificate for
shares of Surviving Corporation Common Stock as the case may be, is to
be issued in a name other than that in which the Certificate surrendered
therefor is registered, it shall be a condition of such delivery or
issuance that the Certificate so surrendered shall be properly endorsed
or otherwise in proper form for transfer and that the person requesting
such delivery or issuance shall pay any transfer or other Taxes required
by reason of such delivery or issuance to a person other than the
registered holder of the Certificate surrendered or establish to the
satisfaction of the Surviving Corporation that such Tax has been paid or
is not applicable. Until surrendered in accordance with the provisions
of this Section 2.4, each Certificate shall represent for all purposes
only the right to receive shares of Surviving Corporation Common Stock
(and, in the case of Certificates theretofore representing STC Common
Stock, cash in lieu of fractional shares) as provided in this Article II
without any interest thereon.
(c) After the Effective Time, there shall be no transfers on the
stock transfer books of the Surviving Corporation of the shares of STC
Common Stock or Epitope Common Stock that were outstanding prior to the
Effective Time. If, after the Effective Time, Certificates are presented
to the Surviving Corporation for transfer, they shall be canceled and
exchanged for shares of Surviving Corporation Common Stock as provided
in this Article II, in accordance with the procedures set forth in this
Section 2.3.
(d) Any portion of the Exchange Fund and any cash in lieu of
fractional shares of Surviving Corporation Common Stock made available
to the Exchange Agent which remains undistributed to the former
stockholders of STC for one year after the STC Effective Time shall be
delivered to the Surviving Corporation, upon demand, and any
stockholders of STC who have not theretofore complied with this Article
II shall thereafter look only to the Surviving Corporation for payment
of their claim for Surviving Corporation Common Stock, any cash in lieu
of fractional shares of Surviving Corporation Common Stock and any
dividends or distributions with respect to Surviving Corporation Common
Stock. Any portion of the Exchange Fund which remains undistributed to
the former stockholders of Epitope for one year after the Epitope
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Effective Time shall be delivered to the Surviving Corporation, upon
demand, and any stockholders of Epitope who have not theretofore
complied with this Article II shall thereafter look only to the
Surviving Corporation for payment of their claim for Surviving
Corporation Common Stock, and any dividends or distributions with
respect to Surviving Corporation Common Stock.
(e) None of STC, Epitope, or the Surviving Corporation shall be
liable to any holder of shares of STC Common Stock or Epitope Common
Stock, as the case may be, for such shares (or dividends or
distributions with respect thereto) or cash in lieu of fractional shares
of Surviving Corporation Common Stock delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law.
Any amounts remaining unclaimed by holders of any such shares two years
after the Effective Time (or such earlier date immediately prior to such
time as such amounts would otherwise escheat to or become property of
any Governmental Entity) shall, to the extent permitted by applicable
law, become the property of the Surviving Corporation free and clear of
any claims or interest of any such holders or their successors, assigns
or personal representatives previously entitled thereto.
SECTION 2.4. Affiliates. Notwithstanding anything to the contrary
herein, to the fullest extent permitted by law and pooling of interests
accounting treatment, no certificates representing shares of Surviving
Corporation Common Stock or cash shall be delivered to a Person who may be
deemed an "affiliate" of STC or Epitope in accordance with Section 8.8 hereof
for purposes of Rule 145 under the Securities Act and, for purposes of
qualifying the Merger for pooling of interests accounting treatment under
Opinion 16 of the Accounting Principles Board and applicable rules and
regulations of the SEC, until such Person has executed and delivered a STC
Affiliate Agreement (as defined in Section 8.8(a)) or an Epitope Affiliate
Agreement (as defined in Section 8.8(b)), as the case may be, pursuant to
Section 8.8.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF EPITOPE
Except as disclosed in (i) the Epitope Disclosure Schedule delivered to
STC separately prior to, or contemporaneously with, the date hereof (each
section or subsection of which qualifies the correspondingly numbered
representation, warranty or covenant to the extent specified therein) or (ii)
the Epitope SEC Documents filed on or prior to the date hereof, Epitope
represents and warrants to STC that:
SECTION 3.1. Corporate Existence and Power. Epitope is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Oregon, and has all corporate powers required to carry on its business
as now conducted. Epitope is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where the character of
the property owned or leased by it or the nature of its activities makes such
qualification necessary, except where the failure to be so qualified,
individually or in the aggregate, would not be reasonably likely to have an
Epitope Material Adverse Effect. Epitope has heretofore made available to STC
true and complete copies of Epitope's articles of incorporation and bylaws as
currently in effect.
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SECTION 3.2. Corporate Authorization. The execution, delivery and
performance by Epitope of this Agreement and the consummation by Epitope of the
transactions contemplated hereby are within Epitope's corporate powers and,
except for the Epitope Stockholder Approval (as defined herein), have been duly
authorized by all necessary corporate action. Assuming that this Agreement
constitutes the valid and binding obligation of STC, this Agreement constitutes
a valid and binding agreement of Epitope, enforceable in accordance with its
terms, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws, now or hereafter in effect,
relating to or affecting creditors' rights and remedies generally and to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
SECTION 3.3. Governmental Authorization. The execution, delivery and
performance by Epitope of this Agreement and the consummation by Epitope of the
transactions contemplated hereby require no action by or in respect of, or
filing with, any Governmental Entity other than (a) the filing of (i) Articles
of Merger in accordance with the Oregon Law, (ii) a Certificate of Merger in
accordance with the Delaware Law, and (iii) appropriate documents with the
relevant authorities of other states or jurisdictions in which Epitope or any
Epitope Subsidiary is qualified to do business; (b) compliance with any
applicable requirements of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
▇▇▇▇ (▇▇▇ "▇▇▇ ▇▇▇") by stockholders of STC who will acquire the Surviving
Corporation Common Stock with a value in excess of $15 million as a result of
the Mergers and who do not have an exemption from the HSR Act therefor; (c)
compliance with any applicable requirements of the Securities Act and the
Exchange Act; (d) such as may be required under any applicable state securities
or blue sky laws; and (e) such other consents, approvals, actions, orders,
authorizations, registrations, declarations and filings that, if not obtained or
made, would not, individually or in the aggregate, (x) be reasonably likely to
have an Epitope Material Adverse Effect or (assuming for this purpose that the
Effective Time had occurred) a Surviving Corporation Material Adverse Effect, or
(y) prevent or materially impair the ability of Epitope to consummate the
transactions contemplated by this Agreement.
SECTION 3.4. Non-Contravention. The execution, delivery and performance
by Epitope of this Agreement and the consummation by Epitope of the transactions
contemplated hereby do not and will not (a) contravene or conflict with
Epitope's articles of incorporation or bylaws, (b) assuming compliance with the
matters referred to in Section 3.3, contravene or conflict with or constitute a
violation of any provision of any law, regulation, judgment, injunction, order
or decree binding upon or applicable to Epitope or any Epitope Subsidiary, (c)
constitute a default under or give rise to a right of termination, cancellation
or acceleration of any right or obligation of Epitope or any Epitope Subsidiary
or to a loss of any benefit or status to which Epitope or any Epitope Subsidiary
is entitled under any provision of any agreement, contract or other instrument
binding upon Epitope or any Epitope Subsidiary or any license, franchise, permit
or other similar authorization held by Epitope or any Epitope Subsidiary, or (d)
result in the creation or imposition of any Lien on any asset of Epitope or any
Epitope Subsidiary other than, in the case of each of (b), (c) and (d), any such
items that would not, individually or in the aggregate (x) be reasonably likely
to have an Epitope Material Adverse Effect or (y) prevent or materially impair
the ability of Epitope to consummate the transactions contemplated by this
Agreement.
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SECTION 3.5. Capitalization.
(a) The authorized capital stock of Epitope consists of 30,000,000
shares of Epitope Common Stock, and 1,000,000 shares of preferred stock, no par
value per share, of Epitope ("Epitope Preferred Stock"). At the close of
business on April 30, 2000, (i) 16,393,495 shares of Epitope Common Stock were
issued and outstanding, (ii) stock options ("Epitope Stock Options") and
warrants ("Epitope Warrants") to purchase an aggregate of 4,136,571 shares of
Epitope Common Stock were issued and outstanding (of which options and warrants
to purchase an aggregate of 3,012,999 shares of Epitope Common Stock were
exercisable), (iii) no shares of Epitope Common Stock were held in its treasury,
(iii) no shares of Epitope Preferred Stock were issued and outstanding, and (iv)
no shares of Epitope Series A Preferred Stock were reserved for issuance upon
exercise of the Epitope Stock Purchase Rights. All outstanding shares of capital
stock of Epitope have been duly authorized and validly issued and are fully paid
and nonassessable.
(b) As of the date hereof, except (i) as set forth in this Section 3.5,
and (ii) for changes since September 30, 1999, resulting from the exercise of
stock options or warrants outstanding on such date, there are no outstanding (x)
shares of capital stock or other voting securities of Epitope, (y) securities of
Epitope convertible into or exchangeable for shares of capital stock or voting
securities of Epitope, or (z) options or other rights to acquire from Epitope,
and no obligation of Epitope to issue, any capital stock, voting securities or
securities convertible into or exchangeable for capital stock or voting
securities of Epitope (the items in clauses (x), (y) and (z) being referred to
collectively as the "Epitope Securities"). There are no outstanding obligations
of Epitope or any Epitope Subsidiary to repurchase, redeem or otherwise acquire
any Epitope Securities. There are no outstanding contractual obligations of
Epitope to provide funds to, or make any investment (in the form of a loan,
capital contribution or otherwise) in, any other Person. There are no
stockholder agreements, voting trusts or other agreements or understandings to
which Epitope is a party, or of which Epitope is aware, relating to voting,
registration or disposition of any shares of capital stock of Epitope or
granting to any person or group of persons the right to elect, or to designate
or nominate for election, a director to the board of directors of Epitope.
SECTION 3.6. Subsidiaries.
(a) Each Significant Subsidiary of Epitope is a corporation duly
incorporated or an entity duly organized, and is validly existing and in good
standing under the laws of its jurisdiction of incorporation or organization,
has all powers and authority and all material governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted and is duly qualified to do business as a foreign entity and is in
good standing in each jurisdiction where the character of the property owned or
leased by it or the nature of its activities makes such qualification necessary,
in each case with such exceptions as, individually or in the aggregate, would
not be reasonably likely to have, an Epitope Material Adverse Effect.
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(b) All of the outstanding shares of capital stock of, or other
ownership interest in, each Epitope Subsidiary has been validly issued and is
fully paid and nonassessable. All of the outstanding capital stock of, or other
ownership interest in, each of Epitope's Subsidiaries, is owned, directly or
indirectly, by Epitope, is owned free and clear of any Lien and free of any
other limitation or restriction (including any limitation or restriction on the
right to vote, sell or otherwise dispose of such capital stock or other
ownership interests) with such exceptions as, individually or in the aggregate,
would not be reasonably likely to have, an Epitope Material Adverse Effect.
There are no outstanding (i) securities of Epitope or any of the Epitope
Subsidiaries convertible into or exchangeable or exercisable for shares of
capital stock or other voting securities or ownership interests in any of the
Epitope Subsidiaries, (ii) options, warrants or other rights to acquire from
Epitope or any of the Epitope Subsidiaries, and no other obligation of Epitope
or any of the Epitope Subsidiaries to issue, any capital stock, voting
securities or other ownership interests in, or any securities convertible into
or exchangeable or exercisable for any capital stock, voting securities or
ownership interests in, any of the Epitope Subsidiaries or (iii) obligations of
Epitope or any of the Epitope Subsidiaries to repurchase, redeem or otherwise
acquire any outstanding securities of any of the Epitope Subsidiaries or any
capital stock of, or other ownership interests in, any of the Epitope
Subsidiaries.
SECTION 3.7. Epitope SEC Documents.
(a) Epitope has made available to STC the Epitope SEC Documents.
Epitope has filed all reports, filings, registration statements and
other documents required to be filed by it with the SEC since September
30, 1997. No Epitope Subsidiary is required to file any form, report,
registration statement or prospectus or other document with the SEC.
(b) As of its filing date, each Epitope SEC Document complied as to
form in all material respects with the applicable requirements of the
Securities Act and/or the Exchange Act, as the case may be.
(c) No Epitope SEC Document filed pursuant to the Exchange Act
contained, as of its filing date, any untrue statement of a material
fact or omitted to state any material fact necessary in order to make
the statements made therein, in the light of the circumstances under
which they were made, not misleading. No Epitope SEC Document, as
amended or supplemented, if applicable, filed pursuant to the Securities
Act contained, as of the date such document or amendment became
effective, any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading.
SECTION 3.8. Financial Statements; No Material Undisclosed Liabilities.
(a) The audited consolidated financial statements and unaudited
consolidated interim financial statements of Epitope included in the
Epitope 10-K and the Epitope 10-Q fairly present in all material
respects, in conformity with GAAP consistently applied (except as may be
indicated in the notes thereto and except that financial
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statements on Form 10-Q do not contain all GAAP notes to such financial
statements), the consolidated financial position of Epitope and its
consolidated Subsidiaries as of the dates thereof and their consolidated
results of operations, consolidated cash flows and changes in
stockholders' equity for the periods then ended (subject to normal
year-end adjustments in the case of any unaudited interim financial
statements).
(b) There are no liabilities of Epitope or any Epitope Subsidiary
of any kind whatsoever, whether accrued, contingent, absolute,
determined, determinable or otherwise, in each case, that are required
by GAAP to be set forth on a consolidated balance sheet of Epitope,
other than:
(i) liabilities or obligations disclosed or provided for in the
Epitope Balance Sheet or disclosed in the notes thereto;
(ii) liabilities or obligations under this Agreement or
incurred in connection with the transactions contemplated hereby;
and
(iii) other liabilities or obligations that individually or in
the aggregate, would not be reasonably likely to have an Epitope
Material Adverse Effect.
(c) Epitope and the Epitope Subsidiaries keep proper accounting
records in which all material assets and liabilities, and all material
transactions, of Epitope and the Epitope Subsidiaries are recorded in
conformity with GAAP. No part of Epitope's or any Epitope Subsidiary's
accounting system or records, or access thereto, is under the control of
a Person who is not an employee of Epitope or such Subsidiary.
SECTION 3.9. Information to be Supplied.
(a) The information to be supplied by Epitope expressly for
inclusion or incorporation by reference in the Joint Proxy
Statement/Prospectus will (i) in the case of the Registration Statement,
at the time it becomes effective, not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading and (ii) in the case of the remainder of the Joint Proxy
Statement/Prospectus, at the time of the mailing thereof, and at the
time of the Special Meetings, not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light
of the circumstances under which they are made, not misleading. The
Joint Proxy Statement/Prospectus will comply (with respect to
information relating to Epitope) as to form in all material respects
with the provisions of the Securities Act and the Exchange Act.
(b) Notwithstanding the foregoing, Epitope makes no representation
or warranty with respect to any statements made or incorporated by
reference in the Joint Proxy Statement/Prospectus based on information
supplied by STC.
SECTION 3.10. Absence of Certain Changes. Since September 30, 1999,
except as otherwise expressly contemplated by this Agreement, Epitope and the
Epitope Subsidiaries have conducted their business in the ordinary course
consistent with past practice and there has not
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been (a) any damage, destruction or other casualty loss (whether or not covered
by insurance) affecting the business or assets of Epitope or any Epitope
Subsidiary that, individually or in the aggregate, has had or would be
reasonably likely to have an Epitope Material Adverse Effect, (b) any action,
event, occurrence, development or state of circumstances or facts that,
individually or in the aggregate, has had or would be reasonably likely to have
an Epitope Material Adverse Effect or (c) any incurrence, assumption or
guarantee by Epitope of any material indebtedness for borrowed money other than
in the ordinary course and in amounts and on terms consistent with past
practices.
SECTION 3.11. Litigation. Section 3.11 of the Epitope Disclosure
Schedule contains a list and description of each action, suit, investigation,
arbitration or proceeding pending against, or to the Knowledge of Epitope
threatened against, Epitope or any Epitope Subsidiary or any of their respective
assets or properties before any arbitrator or Governmental Entity. None of such
actions, suits, investigations, arbitrations or proceedings, individually or in
the aggregate, would be reasonably likely to have, an Epitope Material Adverse
Effect. There are no outstanding judgments, decrees, injunctions, awards or
orders against Epitope that would be reasonably likely to have, individually or
in the aggregate, an Epitope Material Adverse Effect.
SECTION 3.12. Taxes.
(a) All Tax returns, statements, reports and forms (collectively,
the "Epitope Returns") required to be filed with any taxing authority
by, or with respect to, Epitope and the Epitope Subsidiaries have been
filed in substantial compliance with all applicable laws.
(b) Epitope and the Epitope Subsidiaries have timely paid all Taxes
shown as due and payable on the Epitope Returns that have been so filed,
and all other Taxes not subject to reporting obligations, and, as of the
time of filing, the Epitope Returns correctly reflected the facts
regarding the income, business, assets, operations, activities and the
status of Epitope and the Epitope Subsidiaries (other than Taxes that
are being contested in good faith and for which adequate reserves are
reflected on the Epitope Balance Sheet).
(c) Epitope and the Epitope Subsidiaries have made provision for
all Taxes payable by them for which no Epitope Return has yet been
filed.
(d) The charges, accruals and reserves for Taxes with respect to
Epitope and the Epitope Subsidiaries reflected on the Epitope Balance
Sheet are adequate under GAAP to cover the Tax liabilities accruing
through the date thereof.
(e) There is no action, suit, proceeding, audit or claim now
proposed or pending against or with respect to Epitope or any of the
Epitope Subsidiaries in respect of any Tax that would be reasonably
likely to have an Epitope Material Adverse Effect.
(f) Neither Epitope nor any of the Epitope Subsidiaries has been a
member of an affiliated, consolidated, combined or unitary group other
than one of which Epitope was the common parent.
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(g) Neither Epitope nor any of the Epitope Subsidiaries holds any
asset subject to a consent under Section 341(f) of the Code.
(h) The representations and warranties contained in the Epitope
Representation Letter, attached hereto as Exhibit I, are true and
correct.
SECTION 3.13. Employee Benefits.
(a) Section 3.13(a) of the Epitope Disclosure Schedule contains a
correct and complete list identifying each material "employee benefit
plan", as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974 ("ERISA"), each employment, severance or similar
contract, plan, arrangement or policy and each other plan or arrangement
(written or oral) providing for compensation, bonuses, profit-sharing,
stock option or other stock related rights or other forms of incentive
or deferred compensation, vacation benefits, insurance coverage
(including any self-insured arrangements), health or medical benefits,
disability benefits, workers' compensation, supplemental unemployment
benefits, severance benefits and post-employment or retirement benefits
(including compensation, pension, health, medical or life insurance
benefits) that is maintained, administered or contributed to by Epitope
or any ERISA Affiliate (as defined below) of Epitope and covers any
employee or former employee of Epitope or any Epitope Subsidiary. Copies
of such plans (and, if applicable, related trust agreements) and all
amendments thereto and written interpretations thereof have been
furnished, or will be made available upon request, to STC together with
the most recent annual report (Form 5500 including, if applicable,
Schedule B thereto) and summary plan description prepared in connection
with any such plan. Such plans are referred to collectively herein as
the "Epitope Employee Plans". For purposes of this Section 3.13, "ERISA
Affiliate" of any Person means any other Person which, together with
such Person, would be treated as a single employer under Section 414 of
the Code.
(b) No Epitope Employee Plan is now or at any time has been subject
to Part 3, Subtitle B of Title I or ERISA or Title IV of ERISA. At no
time has Epitope or any of its ERISA Affiliates contributed to, or been
required to contribute to, any "multiemployer plan," as defined in
Section 3(37) or ERISA (a "Multiemployer Plan"), and neither Epitope nor
any of its ERISA Affiliates has, or ever has had, any liability
(contingent or otherwise) relating to the withdrawal or partial
withdrawal from a multiemployer Plan. To the Knowledge of Epitope, no
condition exists and no event has occurred that would be reasonably
likely to constitute grounds for termination of any Epitope Employee
Plan that is a Retirement Plan. To the Knowledge of Epitope, nothing has
been done or omitted to be done and no transaction or holding of any
asset under or in connection with any Epitope Employee Plan has occurred
that will make Epitope or any Epitope Subsidiary, or any officer or
director of Epitope or any Epitope Subsidiary, subject to any liability
under Title I of ERISA or liable for any tax pursuant to Section 4975 of
the Code (assuming the taxable period of any such transaction expired as
of the date hereof) that would be reasonably likely to have an Epitope
Material Adverse Effect.
(c) Each Epitope Employee Plan that is intended to be qualified
under Section 401(a) of the Code now meets, and at all time since its
inception have met, the
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requirements for such qualification, and each trust forming a part
thereof is now, and at all times since its inception has been, exempt
from tax pursuant to Section 501(a) of the Code. Each such plan has
received a determination letter from the Internal Revenue Service to the
effect that such plan is qualified and its related trust is exempt from
federal income taxes. Epitope has furnished, or will make available upon
request, to STC copies of the most recent Internal Revenue Service
determination letters with respect to each such Epitope Employee Plan.
Each Epitope Employee Plan has been maintained and administered in
substantial compliance with its terms (except that in any case in which
any Epitope Employee Plan is currently required to comply with a
provision of ERISA or of the Code, but is not yet required to be amended
to reflect such provision, such plan has been maintained and
administered in accordance with the provision) and with the requirements
prescribed by any and all statutes, orders, rules and regulations,
including but not limited to ERISA and the Code, which are applicable to
such Epitope Employee Plan. All material reports, returns and similar
documents with respect to each Epitope Employee Plan required to be
filed with any government agency or distributed to any Epitope Employee
Plan participant have been duly timely filed and distributed.
(d) There is no contract, agreement, plan or arrangement that, as a
result of the Mergers, would be reasonably likely to obligate Epitope to
make any payment of any amount that would not be deductible pursuant to
the terms of Section 162(m) or Section 280G of the Code.
(e) Except as disclosed in writing to STC prior to the date hereof,
there has been no amendment to, written interpretation or announcement
(whether or not written) relating to, or change in employee
participation or coverage under, any Epitope Employee Plan that would
increase materially the expense of maintaining such Epitope Employee
Plan above the level of the expense incurred in respect thereof for the
fiscal year ended September 30, 1999.
(f) No Epitope Employee Plan promises or provides post-retirement
medical, life insurance or other benefits due now or in the future to
current, former or retired employees of Epitope or any Subsidiary.
SECTION 3.14. Compliance with Laws; Licenses, Permits and Registrations.
(a) Neither Epitope nor any Epitope Subsidiary is in violation of,
or has violated, any applicable provisions of any laws, statutes,
ordinances, regulations, judgments, injunctions, orders or consent
decrees, except for any such violations that, individually or in the
aggregate, would not be reasonably likely to have an Epitope Material
Adverse Effect.
(b) Each of Epitope and the Epitope Subsidiaries has all permits,
licenses, approvals, authorizations of and registrations with and under
all federal, state, local and foreign laws, and from all Governmental
Entities required by Epitope and the Epitope Subsidiaries to carry on
their respective businesses as currently conducted, except where the
failure to have any such permits, licenses, approvals, authorizations or
registrations,
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individually or in the aggregate, would not be reasonably likely to have
an Epitope Material Adverse Effect.
SECTION 3.15. Title to Properties.
(a) Epitope and each Epitope Subsidiary have good and marketable
title to, or valid leasehold interests in, all their properties and
assets except for such as are no longer used or useful in the conduct of
their businesses or as have been disposed of in the ordinary course of
business and except for defects in title, easements, restrictive
covenants and similar Liens, encumbrances or impediments that do not
materially interfere with the ability of Epitope and its Subsidiaries to
use their respective assets and conduct their businesses, as currently
used or conducted. All such assets and properties, other than assets and
properties in which Epitope or any Epitope Subsidiary has leasehold
interests, are free and clear of all Liens, except for Liens that, in
the aggregate, do not and will not materially interfere with the ability
of Epitope and the Epitope Subsidiaries to use their respective assets
and conduct their businesses, as currently conducted.
(b) Epitope and each Epitope Subsidiary (i) are in substantial
compliance with the terms of all leases to which they are a party and
under which they are in occupancy, and all such leases are in full force
and effect and (ii) enjoy peaceful and undisturbed possession under all
such leases.
SECTION 3.16. Intellectual Property.
(a) Epitope and the Epitope Subsidiaries own or have a valid
license to use (i) all fictional business names, trading names,
registered and unregistered trademarks, service marks, domain names and
applications (collectively, "Marks"); (ii) all patents, patent
applications, and inventions and discoveries that may be patentable
(collectively, "Patents"); (iii) all copyrights in both published works
and unpublished works (collectively, "Copyrights"); (iv) all rights in
mask works (collectively, "Rights in Mask Works"); and (v) all know-how,
trade secrets, and confidential information, (such as, customer lists,
software, technical information, data, process technology, and plans)
(collectively, "Trade Secrets"); necessary to (x) carry on the business
of Epitope as currently conducted or as proposed to be conducted by the
Surviving Corporation, to (y) make, have made, use, distribute and sell
all products currently sold by Epitope and all products in development,
including all products proposed to be sold under the "OraSure" or
"OraQuick" trade names.
(b) There are no outstanding and, to Epitope's Knowledge, no
Threatened disputes or disagreements with respect to any agreement to
which Epitope or an Epitope subsidiary is a party, relating to any of
Epitope's Marks, Patents, Copyrights, Rights in Mask Works, or Trade
Secrets (collectively, "Epitope Intellectual Property").
(c) Epitope is the owner of all right, title, and interest in and
to the Epitope Intellectual Property, free and clear of all liens,
security interests, charges, encumbrances, equities, and other adverse
claims.
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(d) All former and current employees of Epitope have executed
written contracts with Epitope that assign to Epitope all rights to any
inventions, improvements, discoveries, or information relating to the
business of Epitope. To Epitope's knowledge, no employee of Epitope has
entered into any contract that restricts or limits in any way the scope
or type of work in which the employee may be engaged or requires the
employee to transfer, assign, or disclose information concerning his
work to anyone other than Epitope.
(e) All of the Patents are currently in compliance in all material
respects with formal legal requirements (including payment of filing,
examination, and maintenance fees and proofs of working or use), are
valid and enforceable, and are not subject to any maintenance fees or
taxes or actions that have not been paid when due.
(f) Epitope uses reasonable procedures to keep its Trade Secrets
confidential. Epitope's Trade Secrets have been disclosed only under
written agreements that require the recipient to hold such Trade Secrets
confidential.
(g) No Patent has been or is now involved in any interference,
reissue, reexamination, or opposition proceeding. To Epitope's
Knowledge, there is no potentially interfering patent or patent
application of any third party.
(h) No Patent is infringed or, to Epitope's Knowledge, has been
challenged or threatened in any way. To Epitope's Knowledge, none of the
products manufactured and sold or proposed to be sold, nor any process
or know-how used, by Epitope infringes or is alleged to infringe any
Patent or other proprietary right of any other Person.
(i) Epitope is not required to make any payments to any third
parties in connection with its use of Epitope Intellectual Property.
(j) All products made, used, or sold under the Patents have been
marked with the proper patent notice.
SECTION 3.17. Environmental Matters.
(a) To the Knowledge of Epitope, there has not been, as of the date
hereof, any (i) "release" (as defined in 42 U.S.C.ss.9601(22)) or threat
of a "release" of any "hazardous substances" (as defined in 42
U.S.C.ss.9601(14)) or oil or other petroleum related products on or
about any of the real property owned, operated or leased by Epitope or
any Epitope Subsidiary ("Epitope Real Property"), or (ii) release or
presence of any pollutant, contaminant or condition giving rise to a
cause of action under federal, state or local statutory or common law on
or about any of the Epitope Real Property other than such as would not
reasonably be expected to have an Epitope Material Adverse Effect.
(b) Neither Epitope nor any Epitope Subsidiary has any contract,
agreement or otherwise arranged for disposal or treatment, or arranged
with a transporter for transport for disposal or treatment, of hazardous
substances at any "facility" (as defined in 42 U.S.C. ss.9601(9)) owned
or operated by another Person.
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(c) Neither Epitope nor any Epitope Subsidiary has accepted any
hazardous substances for transport to disposal or treatment facilities
or sites selected by Epitope or any Epitope Subsidiary.
(d) To the Knowledge of Epitope, the Epitope Real Property and the
use thereof is in material compliance with, and each Epitope and each
Epitope Subsidiary is in compliance with, all applicable laws, statutes,
ordinances, rules and regulations of any Governmental Entity relating to
environmental protection, underground storage tanks, toxic waste,
hazardous waste, oil or hazardous substance handling, treatment,
storage, disposal or transportation, or arranging therefor, respecting
any products or materials previously or now located on, or in transit
from the Epitope Real Property, including without limitation the
Resource Conservation and Recovery Act, the Comprehensive Environmental
Response, Compensation and Liability Act, and the Superfund Amendments
and Reauthorization Act of 1986.
(e) The past disposal practices relating to hazardous substances
and hazardous wastes of Epitope and each Epitope Subsidiary (and their
respective predecessors, if any) have been accomplished in accordance
with all applicable laws, statutes, rules, regulations and ordinances.
(f) Neither Epitope nor any Epitope Subsidiary has been notified
of, nor, to the Knowledge of Epitope or any Epitope Subsidiary is there,
any basis for any potential liability of Epitope or any Epitope
Subsidiary with respect to the cleanup of any waste disposal site or
facility. Neither Epitope nor any Epitope Subsidiary has received any
notification to the effect that any site at which Epitope or any Epitope
Subsidiary has disposed of hazardous substances or oil has been or is
under investigation by any Governmental Entity.
(g) Neither Epitope nor any Epitope Subsidiary has received any
notification of releases or hazardous substances or oil from any
Governmental Entity.
SECTION 3.18. Finders' Fees; Opinions of Financial Advisor.
(a) Except for Deutsche Bank Securities Inc. (also operating as
Deutsche Banc Alex.▇▇▇▇▇), there is no investment banker, broker, finder
or other intermediary that has been retained by, or is authorized to act
on behalf of, Epitope or any Epitope Subsidiary who might be entitled to
any fee or commission from STC or any of its Affiliates upon
consummation of the transactions contemplated by this Agreement.
(b) The Board of Directors of Epitope has received the opinion of
Deutsche Bank Securities Inc., dated as of the date of this Agreement,
to the effect that, as of such date, the Exchange Ratio is fair, from a
financial point of view, to Epitope.
SECTION 3.19. Required Vote; Board Approval.
(a) The only votes of the holders of any class or series of capital
stock of Epitope required by law, rule, regulation or rule of the
National Association of Securities Dealers, Inc. to approve and adopt
this Agreement and/or any of the other transactions
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contemplated hereby, including the Mergers, are the affirmative vote of
the holders of more than fifty percent of all votes entitled to be cast
on the STC Merger and the Epitope Merger (the "Epitope Stockholder
Approval").
(b) Epitope's Board of Directors has unanimously (i) determined and
declared that this Agreement and the transactions contemplated hereby,
including the Merger, are advisable and in the best interests of Epitope
and its stockholders, (ii) approved and adopted this Agreement, the
Merger and the other transactions contemplated hereby and (iii) resolved
to recommend to such stockholders that they vote in favor of adopting
and approving this Agreement and the Mergers in accordance with the
terms hereof, subject to the Board's fiduciary duties under applicable
law, at a special meeting of the stockholders of Epitope duly held for
such purpose (the "Epitope Stockholders Meeting").
SECTION 3.20. State Takeover Statutes.
(a) Epitope has taken all actions required to be taken by it in
order to exempt this Agreement and the transactions contemplated hereby
from the provisions of Sections 60.801 through 60.845 of the Oregon Law,
and accordingly, such Sections do not apply to the Mergers or any of
such transactions. No other "control share acquisition," "business
combination," "fair price" or other anti-takeover laws or regulations
enacted under state or federal laws in the United States apply to this
Agreement or any of the transactions contemplated hereby.
SECTION 3.21. Pooling Matters; Tax Treatment.
(a) Epitope intends that the Mergers be accounted for under the
"pooling of interests" method under the requirements of Opinion No. 16
(Business Combinations) of the Accounting Principles Board of the
American Institute of Certified Public Accountants, the Financial
Accounting Standards Board, and the rules and regulations of the SEC.
Epitope will request a letter addressed to it from PriceWaterhouse
Coopers LLP, dated as of the Closing Date, and (if and when obtained) a
copy of it will be delivered to STC. Such letter (which may contain
customary qualifications and assumptions) shall state that
PriceWaterhouse Coopers LLP concurs with Epitope's management's
conclusion that no conditions exist that would preclude the Surviving
Corporation from accounting for the Mergers as a "pooling of interests,"
as described in the first sentence of this Section 3.21(a).
(b) Neither Epitope nor any of its Affiliates has taken or agreed
to take, or will take, any action or is aware of any fact or
circumstance that would prevent or impede the Mergers from qualifying
(i) for "pooling of interests" accounting treatment as described in
Section 3.21(a) above or (ii) as a 368 Reorganization or that would make
untrue any representation or warranty contained in the Representation
Letter attached as Exhibit I.
SECTION 3.22. Certain Agreements. None of Epitope, any Epitope
Subsidiary or any of their respective Affiliates (i) are parties to or otherwise
bound by any agreement or arrangement
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that limits or otherwise restricts Epitope, any Epitope Subsidiary, the
Surviving Corporation or any of their respective Affiliates from engaging or
competing in any line of business or in any locations, and (ii) except in the
ordinary course of business, have amended, modified or terminated any material
contract, agreement or arrangement of Epitope or any Epitope Subsidiary or
otherwise waived, released or assigned any material rights, claims or benefits
of Epitope or any Epitope Subsidiary thereunder.
SECTION 3.23. Epitope Rights Agreement. Merger Sub will, prior to the
Effective Time, take or cause to be taken all action so that each issued and
outstanding share of STC Common Stock (other than shares to be cancelled in
accordance with Section 2.1(e)(iii)), upon conversion of such shares into
Surviving Corporation Common Stock in accordance with Section 2.1(e)(i), shall
have associated rights to purchase the appropriate number of shares of Surviving
Corporation Series A Preferred Stock pursuant to the Merger Sub Rights
Agreement. Epitope has amended the Epitope Rights Agreement in accordance with
its terms to render it inapplicable to the transactions contemplated by this
Agreement so that the entering into of this Agreement and the consummation of
the transactions contemplated hereby do not and will enable or require the
Rights granted thereunder (the "Epitope Stock Purchase Rights") to be exercised,
distributed or triggered. Epitope has delivered to STC a true and complete copy
of the Epitope Rights Agreement, as amended, in effect as of the date of the
execution of this Agreement.
SECTION 3.24. Employment Agreements. There exists (i) no union, guild or
collective bargaining agreement to which Epitope or any Epitope Subsidiary is a
party, (ii) no employment, consulting or severance agreement between Epitope or
any Subsidiary of Epitope and any Person (except for consulting agreements that
individually, and in the aggregate, are not material to Epitope), and (iii) no
employment, consulting, severance or indemnification agreement or other
agreement or plan to which Epitope or any Epitope Subsidiary is a party that
would be altered or result in any bonus, golden parachute, severance or other
payment or obligation to any Person, or result in any acceleration of the time
of payment or in the provision or vesting of any benefits, as a result of the
execution or performance of this Agreement or as a result of the Mergers or the
other transactions contemplated hereby.
SECTION 3.25. Transactions With Directors, Officers and Affiliates.
Except for any of the following matters which would not be required to be
disclosed pursuant to Item 402 or Item 404 of Regulation S-K of the U.S.
Securities and Exchange Commission (the "Commission"), since September 30, 1999,
there have been no transactions between Epitope or any of its Subsidiaries and
any director, officer, employee, stockholder or "Affiliate" (as identified
pursuant to Section 8.8 hereof) of Epitope or any of its Subsidiaries,
including, without limitation, loans, guarantees or pledges to, by or for
Epitope or any of Epitope's Subsidiaries from, to, by or for any of such
Persons. Since September 30, 1999, none of the officers or directors of Epitope
or any of its Subsidiaries, and no spouse or relative of any of such Persons,
has been a director or officer of, or has had any material direct or indirect
interest in, any Person which during such period has been a supplier, customer
or sales agent of Epitope or any of its Subsidiaries or has competed with or
been engaged in any business of the kind being conducted by Epitope or any of
its Subsidiaries.
SECTION 3.26. Material Contracts. Schedule 3.26 delivered to STC by
Epitope prior to the execution of this Agreement lists all material contracts
and agreements to which, as of the
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date hereof, Epitope or any Epitope Subsidiary is a party or by which Epitope or
any Epitope Subsidiary is bound or under which Epitope or any Epitope Subsidiary
has or may acquire any rights, which were not filed prior to the date hereof as
exhibits to Epitope Commission Filings, which involve or relate to (i)
obligations of Epitope or any Epitope Subsidiary for borrowed money or other
indebtedness where the amount of such obligations exceeds $250,000 individually,
(ii) the lease by Epitope or any Epitope Subsidiary, as lessee or lessor, of
real property for rent of more than $250,000 per annum, (iii) the purchase or
sale of goods (other than raw material to be purchased by Epitope on terms that
are customary and consistent with the past practice of Epitope and in amounts
and at prices substantially consistent with past practices of Epitope) or
services with an aggregate minimum purchase price of more than $250,000 per
annum, (iv) rights to manufacture and/or distribute any product which accounted
for more than $250,000 of the consolidated revenues of Epitope and its
Subsidiaries during the fiscal year ended September 30, 1999 or under which
Epitope or any Epitope Subsidiary received or paid license or other fees in
excess of $250,000 during any year, (v) the purchase or sale of assets or
properties not in the ordinary course of business having a purchase price in
excess of $250,000, (vi) the right (whether or not currently exercisable) to
use, license (including any "in-license" or "outlicense"), sublicense or
otherwise exploit any intellectual property right or other proprietary asset of
Epitope or of any of Subsidiary of Epitope or any other Person which, when
considered together with all such other rights, is material to Epitope; (vii)
any material collaboration or joint venture or similar arrangement; (viii) the
restriction on the right or ability of Epitope or any Subsidiary of Epitope (A)
to compete with any other Person, (B) to acquire any product or other asset or
any services from any other Person, (C) to solicit, hire or retain any Person as
an employee, consultant or independent contractor, (D) to develop, sell, supply,
distribute, offer, support or service any product or any technology or other
asset to or for any other Person, (E) to perform services for any other Person,
or (F) to transact business or deal in any other manner with any other Person;
(ix) any currency hedging; or (x) individual capital expenditures or commitments
in excess of $250,000. All such contracts and agreements are duly and validly
executed by Epitope or such Epitope Subsidiary, and are in full force and
effect. Neither Epitope nor any of its Subsidiaries has violated or breached, or
committed any default under, any contract or agreement, and, to the knowledge of
Epitope, no other Person has violated or breached, or committed any default
under, any contract or agreement, which violation, breach or default (alone or
in combination with other violations, breaches or defaults under such contract
or agreement or under other contracts or agreements) has had or may reasonably
be expected to have an Epitope Material Adverse Effect. No event has occurred
which, after notice or the passage of time or both, would constitute a default
by Epitope or any Subsidiary of Epitope under any contract or agreement or give
any Person the right to (A) declare a default or exercise any remedy under any
contract or agreement, (B) receive or require a rebate, chargeback, penalty or
change in delivery schedule under any contract or agreement, (C) accelerate the
maturity or performance of any contract or agreement, or (D) cancel, terminate
or modify any contract or agreement, in each case which, together with all other
events of the types referred to in clauses (A), (B), (C) and (D) of this
sentence has had or may reasonably be expected to have an Epitope Material
Adverse Effect. All such contracts and agreements will continue, after the
Effective Time, to be binding in all material respects in accordance with their
respective terms until their respective expiration dates.
SECTION 3.27. Certain Business Practices. Neither Epitope, nor to the
Knowledge of Epitope any director, officer, agent or employee of Epitope, has
(i) used any funds for unlawful
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contributions, gifts, entertainment or other unlawful expenses relating to
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political parties or
campaigns or violated any provision of the Foreign Corrupt Practices Act of
1977, as amended, or (iii) made any other unlawful payment.
SECTION 3.28. Insurance. Epitope has made available to STC a summary of
all material insurance policies and all material self insurance programs and
arrangements relating to the business, assets and operations of Epitope and its
Subsidiaries. Each of such insurance policies is in full force and effect. Since
September 30, 1999, neither Epitope nor any of its Subsidiaries has received any
notice or other communication regarding any actual or possible (i) cancellation
or invalidation of any material insurance policy, (ii) refusal of any coverage
or rejection of any material claim under any insurance policy, or (iii) material
adjustment in the amount of the premiums payable with respect to any insurance
policy. There is no pending workers' compensation or other claim under or based
upon any insurance policy of Epitope or any of its Subsidiaries other than
claims incurred in the ordinary course of business.
SECTION 3.29. Product Information.
(a) Non- Exempt Products. The products of Epitope listed on Section
3.29(a) of the Disclosure Schedule (the "Epitope Non-Exempt Products")
are subject to the premarket approval requirements of the Medical Device
Amendments to the Federal Food, Drug and Cosmetic Act and all
premarketing approval letters received from Food and Drug Administration
(the "FDA") are identified on Section 3.29(a) of the Disclosure
Schedule.
(i) All Epitope Non-Exempt Products and all modifications or
changes to any Non-Exempt Product are in compliance in all material
respects with the premarketing and postmarking regulatory controls
of the Medical Device Amendments to the Federal Food, Drug and
Cosmetic Act.
(ii) All pre-market notification submissions and any
supplementary materials submitted therewith are accurate in all
material respects and each of the Epitope Non-Exempt Products is
suitable for its intended use.
(iii) During the five-year period prior to the date hereof,
there have been no adverse actions taken by the FDA or any other
Governmental Entity involving Non-Exempt Products including,
without limitation any recalls of any Epitope Non-Exempt Product.
For Epitope Non-Exempt Products, Epitope maintains a system
designed to keep records of complaints. There are no current
recalls or, to Epitope's or Epitope Knowledge, threatened recalls
of any Epitope Non-Exempt Product.
(iv) All Epitope Non-Exempt Products are manufactured in all
material respects in accordance with the good manufacturing
practices regulations of the Federal Food, Drug and Cosmetic Act.
All contract manufacturers and contract sterilizers have been,
during the five-year period prior to the date hereof, and are now
registered with the Food and Drug Administration and all facilities
used in
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the manufacture and sterilization of Epitope Non-Exempt Products
have been, during the five-year period prior to the date hereof,
and are now in compliance in all material respects with the
applicable regulations of the Food and Drug Administration.
(v) No Epitope Non-Exempt Products have been, during the
five-year period prior to the date hereof, or are now misbranded.
(vi) During the five-year period prior to the date hereof, for
all Epitope Non-Exempt Products, Epitope has either submitted to
the Food and Drug Administration all written information
disseminated on new uses in a supplemental application or submitted
an application for an exemption from submission of a supplemental
application.
(b) Neither Epitope nor any Epitope Subsidiary has any Knowledge of
any current investigations by any Governmental or Regulatory including,
without limitation, the Food and Drug Administration regarding Epitope
or any products of Epitope or any Epitope Subsidiary.
SECTION 3.30. Product Liability Claims. During the three-year period
preceding the date hereof, neither Epitope nor any Epitope Subsidiary has ever
been notified of or received a claim, informally or in a legal action filed with
a court, arbitrator, mediator or with any other adjudicatory body or incurred
any uninsured or insured liability, in the form of a judgment, settlement or
other payment or required activity or inactivity, for or based upon breach of
product warranty (other than warranty service and repair claims in the ordinary
course of business not material in amount of significance), strict liability in
tort, negligent design or manufacture of product, negligent provision of
instructions, warnings or services, fraudulent representations, deceptive trade
practices or any other allegation of liability, concerning a personal injury
(whether physical or emotional distress) or resulting in product recalls,
arising from the materials, design, testing, manufacture, packaging, labeling
(including instructions for use) or sale of its products or from the provision
of services (hereafter collectively referred to as "Product Liability"). To the
knowledge of Epitope, no basis for any claim based upon alleged Product
Liability exists which would have an Epitope Material Adverse Effect.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF STC
Except as disclosed in the STC Disclosure Schedule delivered to Epitope
separately prior to, or contemporaneously with, the date hereof (each section or
subsection of which qualifies the correspondingly numbered representation,
warranty or covenant to the extent specified therein), STC represents and
warrants to Epitope that:
SECTION 4.1. Corporate Existence and Power. STC is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware, and has all corporate powers required to carry on its business as
now conducted. STC is duly qualified to do business as a foreign corporation and
is in good standing in each jurisdiction where the character
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of the property owned or leased by it or the nature of its activities makes such
qualification necessary, except where the failure to be so qualified,
individually or in the aggregate, would not be reasonably likely to have a STC
Material Adverse Effect. STC has heretofore made available to Epitope true and
complete copies of STC's certificate of incorporation and bylaws as currently in
effect.
SECTION 4.2. Corporate Authorization. The execution, delivery and
performance by STC of this Agreement and the consummation by STC of the
transactions contemplated hereby are within STC's corporate powers and, except
for the STC Stockholder Approval (as defined herein), have been duly authorized
by all necessary corporate action. Assuming that this Agreement constitutes the
valid and binding obligation of Epitope, this Agreement constitutes a valid and
binding agreement of STC, enforceable in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and similar laws, now or hereafter in effect, relating to or
affecting creditors' rights and remedies generally and to general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law).
SECTION 4.3. Governmental Authorization. The execution, delivery and
performance by STC of this Agreement and the consummation by STC of the
transactions contemplated hereby require no action by or in respect of, or
filing with, any Governmental Entity other than (a) the filing of (i) the
Articles of Merger in accordance with the Oregon Law, (ii) the Certificate of
Merger in accordance with the Delaware Law, and (iii) appropriate documents with
the relevant authorities of other states or jurisdictions in which STC or any
STC Subsidiary is qualified to do business; (b) compliance with any applicable
requirements of the HSR Act by stockholders of STC who will acquire the
Surviving Corporation Common Stock with a value in excess of $15 million as a
result of the Mergers and who do not have an exemption from the HSR Act
therefor; (c) compliance with any applicable requirements of the Securities Act
and the Exchange Act; (d) such as may be required under any applicable state
securities or blue sky laws; and (e) such other consents, approvals, actions,
orders, authorizations, registrations, declarations and filings that, if not
obtained or made, would not, individually or in the aggregate, (x) be reasonably
likely to have a STC Material Adverse Effect or (assuming for this purpose that
the Effective Time had occurred) a Surviving Corporation Material Adverse
Effect, or (y) prevent or materially impair the ability of STC to consummate the
transactions contemplated by this Agreement.
SECTION 4.4. Non-Contravention. The execution, delivery and performance
by STC of this Agreement and the consummation by STC of the transactions
contemplated hereby do not and will not (a) contravene or conflict with STC's
certificate of incorporation or bylaws, (b) assuming compliance with the matters
referred to in Section 4.3, contravene or conflict with or constitute a
violation of any provision of any law, regulation, judgment, injunction, order
or decree binding upon or applicable to STC, (c) constitute a default under or
give rise to a right of termination, cancellation or acceleration of any right
or obligation of STC or any STC Subsidiary or to a loss of any benefit or status
to which STC is entitled under any provision of any agreement, contract or other
instrument binding upon STC or any STC Subsidiary or any license, franchise,
permit or other similar authorization held by STC, or (d) result in the creation
or imposition of any Lien on any asset of STC other than, in the case of each of
(b), (c) and (d), any such items that would not, individually or in the
aggregate (x) be reasonably likely to have a STC
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Material Adverse Effect or (y) prevent or materially impair the ability of STC
to consummate the transactions contemplated by this Agreement.
SECTION 4.5. Capitalization.
(a) The authorized capital stock of STC consists of 6,000,000
shares of STC Common Stock and 2,000,000 shares of STC Preferred Stock.
At the close of business on May 5, 2000, (i) 2,388,798 shares of STC
Common Stock were issued and outstanding, (ii) stock options ("STC Stock
Options") and warrants ("STC Warrants") to purchase an aggregate of
187,477 shares of STC Common Stock were issued and outstanding (of which
options and warrants to purchase an aggregate of 60,060 shares of STC
Common Stock were exercisable), (iii) 783,548 shares of STC Common Stock
were held in its treasury, (iv) 1,080,061 shares of STC Preferred Stock
were issued and outstanding, and (v) stock options and warrants to
purchase an aggregate of 0 shares of STC Preferred Stock were issued and
outstanding (of which options and warrants to purchase an aggregate of 0
shares of STC Preferred Stock were exercisable). All outstanding shares
of capital stock of STC have been duly authorized and validly issued and
are fully paid and nonassessable.
(b) As of the date hereof, except (i) as set forth in this Section
4.5, (ii) and (ii) for changes since December 31, 1999, resulting from
the exercise of stock options outstanding on such date, there are no
outstanding (x) shares of capital stock or other voting securities of
STC, (y) securities of STC convertible into or exchangeable for shares
of capital stock or voting securities of STC, or (z) options or other
rights to acquire from STC, and no obligation of STC to issue, any
capital stock, voting securities or securities convertible into or
exchangeable for capital stock or voting securities of STC (the items in
clauses (x), (y) and (z) being referred to collectively as the "STC
Securities"). There are no outstanding obligations of STC or any STC
Subsidiary to repurchase, redeem or otherwise acquire any STC
Securities. There are no outstanding contractual obligations of STC to
provide funds to, or make any investment (in the form of a loan, capital
contribution or otherwise) in, any other Person. There are no
stockholder agreements, voting trusts or other agreements or
understandings to which STC is a party, or of which STC is aware,
relating to voting, registration or disposition of any shares of capital
stock of STC or granting to any person or group of persons the right to
elect, or to designate or nominate for election, a director to the board
of directors of STC.
SECTION 4.6. Subsidiaries. STC does not have any subsidiaries and does
not own or control, directly or indirectly, any stock or equity interest in any
corporation or other Person.
SECTION 4.7. Financial Statements; No Material Undisclosed Liabilities.
(a) The audited consolidated balance sheets of STC as of December
31, 1997, 1998 and 1999, together with the related audited statements of
operations, stockholders' equity and cash flows for the fiscal years
then ended and the notes thereto and the unaudited balance sheet of STC
as of February 29, 2000, together with the related unaudited statements
of operations, stockholders' equity and cash flows for the period
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then ended (the "STC Financial Statements") fairly present in all
material respects, in conformity with GAAP consistently applied (except
as may be indicated in the notes thereto and except that the unaudited
interim financial statements do not contain all GAAP notes to such
financial statements), the financial position of STC as of the dates
thereof and its results of operations, stockholders' equity and
consolidated cash flows for the periods then ended (subject to normal
year-end adjustments in the case of any unaudited interim financial
statements).
(b) There are no liabilities of STC of any kind whatsoever, whether
accrued, contingent, absolute, determined, determinable or otherwise, in
each case, that are required by GAAP to be set forth on a balance sheet
of STC, other than:
(i) liabilities or obligations disclosed or provided for in the
STC Balance Sheet or disclosed in the notes thereto;
(ii) liabilities or obligations under this Agreement or
incurred in connection with the transactions contemplated hereby;
and
(iii) other liabilities or obligations that individually or in
the aggregate, would not be reasonably likely to have a STC
Material Adverse Effect.
(c) STC keeps proper accounting records in which all material
assets and liabilities, and all material transactions, of STC are
recorded in conformity with GAAP. No part of STC's accounting system or
records, or access thereto, is under the control of a Person who is not
an employee of STC.
SECTION 4.8. Information to be Supplied.
(a) The information to be supplied by STC expressly for inclusion
or incorporation by reference in the Joint Proxy Statement/Prospectus
will (i) in the case of the Registration Statement, at the time it
becomes effective, not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading and
(ii) in the case of the remainder of the Joint Proxy
Statement/Prospectus, at the time of the mailing thereof, and at the
time of the Special Meetings, not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light
of the circumstances under which they are made, not misleading. The
Joint Proxy Statement/Prospectus will comply (with respect to
information relating to STC) as to form in all material respects with
the provisions of the Securities Act and the Exchange Act.
(b) Notwithstanding the foregoing, STC makes no representation or
warranty with respect to any statements made or incorporated by
reference in the Joint Proxy Statement/Prospectus based on information
supplied by Epitope.
SECTION 4.9. Absence of Certain Changes. Since December 31, 1999, except
as otherwise expressly contemplated by this Agreement, STC has conducted its
business in the ordinary course consistent with past practice and there has not
been (a) any damage, destruction
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or other casualty loss (whether or not covered by insurance) affecting the
business or assets of STC that, individually or in the aggregate, has had or
would be reasonably likely to have a STC Material Adverse Effect, (b) any
action, event, occurrence, development or state of circumstances or facts that,
individually or in the aggregate, has had or would be reasonably likely to have
a STC Material Adverse Effect or (c) any incurrence, assumption or guarantee by
STC of any material indebtedness for borrowed money other than in the ordinary
course and in amounts and on terms consistent with past practices.
SECTION 4.10. Litigation. Section 4.10 of the STC Disclosure Schedule
contains a list of each action, suit, investigation, arbitration or proceeding
pending against, or to the Knowledge of STC threatened against, STC or any of
its assets or properties before any arbitrator or Governmental Entity. None of
such actions, suits, investigations, arbitrations or proceedings, individually
or in the aggregate, would be reasonably likely to have a STC Material Adverse
Effect. There are no outstanding judgments, decrees, injunctions, awards or
orders against STC that would be reasonably likely to have, individually or in
the aggregate, a STC Material Adverse Effect.
SECTION 4.11. Taxes.
(a) All Tax returns, statements, reports and forms (collectively,
the "STC Returns") required to be filed with any taxing authority by, or
with respect to, STC have been filed in substantial compliance with all
applicable laws.
(b) STC has timely paid all Taxes shown as due and payable on the
STC Returns that have been so filed, and all other Taxes not subject to
reporting obligations, and as of the time of filing, the STC Returns
correctly reflected the facts regarding the income, business, assets,
operations, activities and the status of STC (other than Taxes that are
being contested in good faith and for which adequate reserves are
reflected on the STC Balance Sheet).
(c) STC has made provision for all Taxes payable by them for which
no STC Return has yet been filed.
(d) The charges, accruals and reserves for Taxes with respect to
STC reflected on the STC Balance Sheet are adequate under GAAP to cover
the Tax liabilities accruing through the date thereof.
(e) There is no action, suit, proceeding, audit or claim now
proposed or pending against or with respect to STC in respect of any Tax
that would be reasonably likely to have a STC Material Adverse Effect.
(f) STC has not been a member of an affiliated, consolidated,
combined or unitary group other than one of which STC was the common
parent.
(g) STC does not hold any asset subject to a consent under Section
341(f) of the Code.
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(h) The representations and warranties contained in the STC
Representation Letter, attached hereto as Exhibit J are true and
correct.
SECTION 4.12. Employee Benefits.
(a) Section 4.12(a) of the STC Disclosure Schedule contains a
correct and complete list identifying each material "employee benefit
plan", as defined in Section 3(3) of ERISA, each employment, severance
or similar contract, plan, arrangement or policy and each other plan or
arrangement (written or oral) providing for compensation, bonuses,
profit-sharing, stock option or other stock related rights or other
forms of incentive or deferred compensation, vacation benefits,
insurance coverage (including any self-insured arrangements), health or
medical benefits, disability benefits, workers' compensation,
supplemental unemployment benefits, severance benefits and
post-employment or retirement benefits (including compensation, pension,
health, medical or life insurance benefits) that is maintained,
administered or contributed to by STC or any of its ERISA Affiliates and
covers any employee or former employee of STC or any STC Subsidiary.
Copies of such plans (and, if applicable, related trust agreements) and
all amendments thereto and written interpretations thereof have been
furnished, or will be made available upon request, to Epitope together
with the most recent annual report (Form 5500 including, if applicable,
Schedule B thereto) and summary plan description prepared in connection
with any such plan. Such plans are referred to collectively herein as
the "STC Employee Plans". For purposes of this Section 4.12, "ERISA
Affiliate" of any Person means any other Person which, together with
such Person, would be treated as a single employer under Section 414 of
the Code.
(b) No STC Employee Plan is now or at any time has been subject to
Part 3, Subtitle B of Title I or ERISA or Title IV of ERISA. At no time
has STC or any of its ERISA Affiliates contributed to, or been required
to contribute to, any "multiemployer plan," as defined in Section 3(37)
of ERISA (a "Multiemployer Plan"), and neither STC nor any of its ERISA
Affiliates has, or ever has had, any liability (contingent or otherwise)
relating to the withdrawal or partial withdrawal from a Multiemployer
Plan. To the Knowledge of STC, no condition exists and no event has
occurred that would be reasonably likely to constitute grounds for
termination of any STC Employee Plan that is a Retirement Plan. To the
Knowledge of STC, nothing has been done or omitted to be done and no
transaction or holding of any asset under or in connection with any STC
Employee Plan has occurred that will make STC or any STC Subsidiary, or
any officer or director of STC or any STC Subsidiary, subject to any
liability under Title I of ERISA or liable for any tax pursuant to
Section 4975 of the Code (assuming the taxable period of any such
transaction expired as of the date hereof) that would be reasonably
likely to have a STC Material Adverse Effect.
(c) Each STC Employee Plan that is intended to be qualified under
Section 401(a) of the Code now meets, and at all times since its
inception have met, the requirements for such qualification, and each
trust forming a part thereof is now, and at all times since its
inception has been, exempt from tax pursuant to Section 501(a) of the
Code. Each such plan has received a determination letter from the
Internal Revenue Service to the effect that such plan is qualified and
its related trust is exempt from federal
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income taxes. STC has furnished, or will make available upon request, to
Epitope copies of the most recent Internal Revenue Service determination
letters with respect to each such STC Employee Plan. Each STC Employee
Plan has been maintained and administered in substantial compliance with
its terms (except that in any case in which any STC Employee Plan is
currently required to comply with a provision of ERISA or of the Code,
but is not yet to be amended to reflect such provision, such plan has
been maintained and administered in accordance with the provision) and
with the requirements prescribed by any and all statutes, orders, rules
and regulations, including but not limited to ERISA and the Code, which
are applicable to such STC Employee Plan. All material reports, returns
and similar documents with respect to each STC Employee Plan required to
be filed with any governmental agency or distributed to any STC Employee
Plan participant have been duly timely filed and distributed.
(d) There is no contract, agreement, plan or arrangement that, as a
result of the Mergers, would be reasonably likely to obligate STC to
make any payment of any amount that would not be deductible pursuant to
the terms of Section 162(m) or Section 280G of the Code.
(e) Except as disclosed in writing to Epitope prior to the date
hereof, there has been no amendment to, written interpretation or
announcement (whether or not written) relating to, or change in employee
participation or coverage under, any STC Employee Plan that would
increase materially the expense of maintaining such STC Employee Plan
above the level of the expense incurred in respect thereof for the
fiscal year ended December 31, 1999.
(f) No STC Employee Plan promises or provides post-retirement
medical, life insurance or other benefits due now or in the future to
current, former or retired employees of STC or any Subsidiary.
SECTION 4.13. Compliance with Laws; Licenses, Permits and Registrations.
(a) STC is not in violation of, nor has STC violated, any
applicable provisions of any laws, statutes, ordinances, regulations,
judgments, injunctions, orders or consent decrees, except for any such
violations that, individually or in the aggregate, would not be
reasonably likely to have a STC Material Adverse Effect.
(b) STC has all permits, licenses, approvals, authorizations of and
registrations with and under all federal, state, local and foreign laws,
and from all Governmental Entities required by STC to carry on its
business as currently conducted, except where the failure to have any
such permits, licenses, approvals, authorizations or registrations,
individually or in the aggregate, would not be reasonably likely to have
a STC Material Adverse Effect.
SECTION 4.14. Title to Properties.
(a) STC has good and marketable title to, or valid leasehold
interests in, all its properties and assets except for such as are no
longer used or useful in the conduct of its business or as have been
disposed of in the ordinary course of business and except for
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defects in title, easements, restrictive covenants and similar Liens,
encumbrances or impediments that do not materially interfere with the
ability of STC to conduct its business as currently conducted. All such
assets and properties, other than assets and properties in which STC has
leasehold interests, are free and clear of all Liens, except for Liens
that do not and will not materially interfere with the ability of STC to
conduct its business as currently conducted.
(b) STC (i) is in substantial compliance with the terms of all
leases to which it is a party and under which it is in occupancy, and
all such leases are in full force and effect and (ii) enjoys peaceful
and undisturbed possession under all such leases.
SECTION 4.15. Intellectual Property.
(a) STC owns or has a valid license to use (i) all Marks; (ii) all
Patents; (iii) all Copyrights; (iv) all Rights in Mask Works' and (v)
all Trade Secrets; necessary to (x) carry on the business of STC as
currently conducted or as proposed to be conducted by the Surviving
Corporation, to (y) make, have made, use, distribute and sell all
products currently sold by STC and all products in development.
(b) There are no outstanding and, to STC's Knowledge, no threatened
disputes or disagreements with respect to any agreement to which STC is
a party, relating to any of STC's Marks, Patents, Copyrights, Rights in
Mask Works, or Trade Secrets (collectively, "STC Intellectual
Property").
(c) STC is the owner of all right, title, and interest in and to
the STC Intellectual Property, free and clear of all liens, security
interests, charges, encumbrances, equities, and other adverse claims.
(d) All former and current employees of STC have executed written
contracts with STC that assign to STC all rights to any inventions,
improvements, discoveries, or information relating to the business of
STC. To STC's knowledge, no employee of STC has entered into any
contract that restricts or limits in any way the scope or type of work
in which the employee may be engaged or requires the employee to
transfer, assign, or disclose information concerning his work to anyone
other than STC.
(e) All of the Patents are currently in compliance with formal
legal requirements (including payment of filing, examination, and
maintenance fees and proofs of working or use), are valid and
enforceable, and are not subject to any maintenance fees or taxes or
actions that have not been paid when due.
(f) STC uses reasonable procedures to keep its Trade Secrets
confidential, STC's Trade Secrets have been disclosed only under written
agreements that require the recipient to hold such Trade Secrets
confidential.
(g) No Patent has been or is now involved in any interference,
reissue, reexamination, or opposition proceeding. To STC's Knowledge,
there is no potentially interfering patent or patent application of any
third party.
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(h) No Patent is infringed or, to STC's Knowledge, has been
challenged or threatened in any way. To STC's knowledge, none of the
products manufactured and sold or proposed to be sold, nor any process
or know-how used, by STC infringes or is alleged to infringe any Patent
or other proprietary right of any other Person.
(i) STC is not required to make any payments to any third parties
in connection with its use of the STC Intellectual Property.
(j) All products made, used, or sold under the Patents have been
marked with the proper patent notice.
SECTION 4.16. Environmental Matters.
(a) To the Knowledge of STC, there has not been, as of the date
hereof, any (i) "release" (as defined in 42 U.S.C.ss.9601(22)) or threat
of a "release" of any "hazardous substances" (as defined in 42
U.S.C.ss.9601(14)) or oil or other petroleum related products on or
about any of the real property owned, operated or leased by STC ("STC
Real Property"), or (ii) release or presence of any pollutant,
contaminant or condition giving rise to a cause of action under federal,
state or local statutory or common law on or about any of the STC Real
Property other than such as would not reasonably be expected to have an
STC Material Adverse Effect.
(b) STC has no contract or agreement or has not otherwise arranged
for disposal or treatment, or arranged with a transporter for transport
for disposal or treatment, of hazardous substances at any "facility" (as
defined in 42 U.S.C. ss.9601(9)) owned or operated by another Person.
(c) STC has not accepted any hazardous substances for transport to
disposal or treatment facilities or sites selected by STC.
(d) To the Knowledge of STC, the STC Real Property and the use
thereof is in material compliance with, and STC is in compliance with,
all applicable laws, statutes, ordinances, rules and regulations of any
Governmental Entity relating to environmental protection, underground
storage tanks, toxic waste, hazardous waste, oil or hazardous substance
handling, treatment, storage, disposal or transportation, or arranging
therefor, respecting any products or materials previously or now located
on, or in transit from the STC Real Property, including without
limitation the Resource Conservation and Recovery Act, the Comprehensive
Environmental Response, Compensation and Liability Act, and the
Superfund Amendments and Reauthorization Act of 1986.
(e) The past disposal practices relating to hazardous substances
and hazardous wastes of STC (and its predecessors, if any) have been
accomplished in accordance with all applicable laws, statutes, rules,
regulations and ordinances.
(f) STC has not been notified of nor, to the Knowledge of STC, is
there any basis for any potential liability of STC with respect to the
clean-up of any waste disposal site or facility. STC has received no
notification to the effect that any site at which STC
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has disposed of hazardous substances or oil has been or is under
investigation by any Governmental Entity.
(g) STC has not received any notification of releases of hazardous
substances or oil from any governmental or quasi-governmental agency.
SECTION 4.17. Finders' Fees; Opinions of Financial Advisor.
(a) Except for BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, there is no
investment banker, broker, finder or other intermediary that has been
retained by, or is authorized to act on behalf of, STC or who might be
entitled to any fee or commission from Epitope or any of its Affiliates
upon consummation of the transactions contemplated by this Agreement.
(b) STC has received the opinion of BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
dated as of the date hereof, to the effect that, as of such date, the
Exchange Ratio is fair, from a financial point of view, to STC and the
holders of shares of STC Common Stock (other than Merger Sub, any
affiliates of Epitope or Merger Sub, or any holders of STC Common Stock
who are officers or directors (or who have representatives serving as
directors) of STC).
SECTION 4.18. Required Vote and Waiver; Board Approval.
(a) Assuming satisfaction of the condition set forth in Section
9.3(g), the only vote or waiver of rights of the holders of any class or
series of capital stock of STC required by law, rule or regulation to
approve and adopt this Agreement and/or any of the other transactions
contemplated hereby, including the Mergers (collectively, the "STC
Stockholder Approval") is the affirmative vote of the holders of more
than fifty percent of the outstanding shares of STC Common Stock in
favor of the approval and adoption of this Agreement and approval of the
STC Merger.
(b) STC's Board of Directors has unanimously (i) determined and
declared that this Agreement and the transactions contemplated hereby,
including the Mergers, are advisable and in the best interests of STC
and its stockholders, (ii) approved and adopted this Agreement, the
Mergers and the other transactions contemplated hereby and (iii)
resolved to recommend to such stockholders that they vote in favor of
adopting and approving this Agreement and the Mergers in accordance with
the terms hereof at a special meeting of the stockholders of STC duly
held for such purpose (the "STC Stockholders Meeting").
SECTION 4.19. State Takeover Statutes. STC has taken all actions
required to be taken by it in order to exempt this Agreement and the
transactions contemplated hereby from the provisions of Section 203 of the
Delaware Law, and accordingly, such Section does not apply to the Mergers or any
of such transactions. No other "control share acquisition," "business
combination," "fair price" or other anti-takeover laws or regulations enacted
under state or federal laws in the United States apply to this Agreement or any
of the transactions contemplated hereby.
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SECTION 4.20. Pooling Matters; Tax Treatment.
(a) STC intends that the Mergers be accounted for under the
"pooling of interests" method under the requirements of Opinion No. 16
(Business Combinations) of the Accounting Principles Board of the
American Institute of Certified Public Accountants, the Financial
Accounting Standards Board, and the rules and regulations of the SEC.
STC will request a letter addressed to it from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP dated
as of the Closing Date, and (if and when obtained) a copy of it will be
delivered to Epitope. Such letter (which may contain customary
qualifications and assumptions) shall state that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
concurs with STC's management's conclusion that no conditions exist with
respect to STC that would preclude the Surviving Corporation from
accounting for the Mergers as a "pooling of interests" as described in
the first sentence of Section 4.20(a).
(b) Neither STC nor any of its Affiliates has taken or agreed to
take, or will take, any action or is aware of any fact or circumstance
that would prevent or impede the Mergers from qualifying (i) for
"pooling of interests" accounting treatment as described in Section
4.20(a) above or (ii) as a 368 Reorganization or that would make untrue
any representation or warranty contained in the Representation Letter
attached as Exhibit J.
SECTION 4.21. Certain Agreements. Neither STC nor any of its Affiliates
(i) are parties to or otherwise bound by any agreement or arrangement that
limits or otherwise restricts STC, the Surviving Corporation or any of their
respective Affiliates from engaging or competing in any line of business or in
any locations, and (ii) except in the ordinary course of business, have amended,
modified or terminated any material contract, agreement or arrangement of STC or
otherwise waived, released or assigned any material rights, claims or benefits
of STC thereunder.
SECTION 4.22. Employment Agreements. There exists (i) no union, guild or
collective bargaining agreement to which STC is a party, (ii) no employment,
consulting or severance agreement between STC and any Person (except for
consulting agreements that individually, and in the aggregate, are not material
to STC), and (iii) no employment, consulting, severance or indemnification
agreement or other agreement or plan to which STC is a party that would be
altered or result in any bonus, golden parachute, severance or other payment or
obligation to any Person, or result in any acceleration of the time of payment
or in the provision or vesting of any benefits, as a result of the execution or
performance of this Agreement or as a result of the Mergers or the other
transactions contemplated hereby.
SECTION 4.23. Transactions With Directors, Officers and Affiliates.
Except for any of the following matters which would not be required to be
disclosed pursuant to Item 402 or Item 404 of Regulation S-K of the Commission
(assuming STC was subject to such Items), since December 31, 1999, there have
been no transactions between STC or any of its Subsidiaries and any director,
officer, employee, stockholder or "Affiliate" (as identified pursuant to Section
8.8 hereof) of STC, including, without limitation, loans, guarantees or pledges
to, by or for STC, from, to, by or for any of such Persons. Except for any of
the following matters which would not be required to be disclosed pursuant to
Item 402 or Item 404 of Regulation S-K of the Commission (assuming that STC was
subject to such Items), since September 30, 1999, none of the officers or
directors of STC, and no spouse or relative of any of such Persons, has been a
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director or officer of, or has had any material direct or indirect interest in,
any Person which during such period has been a supplier, customer or sales agent
of STC or has competed with or been engaged in any business of the kind being
conducted by STC.
SECTION 4.24. Material Contracts. Schedule 4.24 delivered to Epitope by
STC prior to the execution of this Agreement lists all material contracts and
agreements to which, as of the date hereof, STC is a party or by which it is
bound or under which STC has or may acquire any rights, which involve or relate
to (i) obligations of STC for borrowed money or other indebtedness where the
amount of such obligations exceeds $250,000 individually, (ii) the lease by STC,
as lessee or lessor, of real property for rent of more than $250,000 per annum,
(iii) the purchase or sale of goods (other than raw material to be purchased by
STC on terms that are customary and consistent with the past practice of STC and
in amounts and at prices substantially consistent with past practices of STC) or
services with an aggregate minimum purchase price of more than $250,000 per
annum, (iv) rights to manufacture and/or distribute any product which accounted
for more than $250,000 of the consolidated revenues of STC during the fiscal
year ended September 30, 1999 or under which STC received or paid license or
other fees in excess of $250,000 during any year, (v) the purchase or sale of
assets or properties not in the ordinary course of business having a purchase
price in excess of $250,000, (vi) the right (whether or not currently
exercisable) to use, license (including any "in-license" or "outlicense"),
sublicense or otherwise exploit any intellectual property right or other
proprietary asset of STC or any other Person which, when considered together
with all such other rights, is material to STC; (vii) any material collaboration
or joint venture or similar arrangement; (viii) the restriction on the right or
ability of STC (A) to compete with any other Person, (B) to acquire any product
or other asset or any services from any other Person, (C) to solicit, hire or
retain any Person as an employee, consultant or independent contractor, (D) to
develop, sell, supply, distribute, offer, support or service any product or any
technology or other asset to or for any other Person, (E) to perform services
for any other Person, or (F) to transact business or deal in any other manner
with any other Person; (ix) any currency hedging; or (x) individual capital
expenditures or commitments in excess of $250,000. All such contracts and
agreements are duly and validly executed by STC and are in full force and
effect. STC has not violated or breached, or committed any default under, any
contract or agreement, and, to the Knowledge of STC, no other Person has
violated or breached, or committed any default under, any contract or agreement,
which violation, breach or default (alone or in combination with other
violations, breaches or defaults under such contract or agreement or under other
contracts or agreements) has had or may reasonably be expected to have a STC
Material Adverse Effect. No event has occurred which, after notice or the
passage of time or both, would constitute a default by STC under any contract or
agreement or give any Person the right to (A) declare a default or exercise any
remedy under any contract or agreement, (B) receive or require a rebate,
chargeback, penalty or change in delivery schedule under any contract or
agreement, (C) accelerate the maturity or performance of any contract or
agreement, or (D) cancel, terminate or modify any contract or agreement, in each
case which, together with all other events of the types referred to in clauses
(A), (B), (C) and (D) of this sentence has had or may reasonably be expected to
have a STC Material Adverse Effect. All such contracts and agreements will
continue, after the Effective Time, to be binding in all material respects in
accordance with their respective terms until their respective expiration dates.
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SECTION 4.25. Certain Business Practices. Neither STC nor to the
knowledge of STC any director, officer, agent or employee of STC has (i) used
any funds for unlawful contributions, gifts, entertainment or other unlawful
expenses relating to political activity, (ii) made any unlawful payment to
foreign or domestic government officials or employees or to foreign or domestic
political parties or campaigns or violated any provision of the Foreign Corrupt
Practices Act of 1977, as amended, (assuming for purposes of this Section 4.25
that STC is subject to Section 30A of the Exchange Act) or (iii) made any other
unlawful payment.
SECTION 4.26. Insurance. The Company has made available to Epitope a
summary of all material insurance policies and all material self insurance
programs and arrangements relating to the business, assets and operations of STC
. Each of such insurance policies is in full force and effect. Since December
31, 1999, STC has not received any notice or other communication regarding any
actual or possible (i) cancellation or invalidation of any material insurance
policy, (ii) refusal of any coverage or rejection of any material claim under
any insurance policy, or (iii) material adjustment in the amount of the premiums
payable with respect to any insurance policy. There is no pending workers'
compensation or other claim under or based upon any insurance policy of STC
other than claims incurred in the ordinary course of business.
SECTION 4.27. Product Information.
(a) Non-Exempt Products. The products of STC listed in Section
4.27(a) of the Disclosure Schedule (the "STC Non-Exempt Products") are
subject to the premarket notification (510(k)) requirements of the
Medical Device Amendments to the Federal Food, Drug and Cosmetic Act and
all marketing clearance/substantial equivalence letters received from
the FDA are identified in Section 4.27(a) of the Disclosure Schedule.
(i) All STC Non-Exempt Products and all modifications or
changes to any Non-Exempt Product are in compliance in all material
respects with the premarketing and postmarking regulatory controls
of the Medical Device Amendments to the Federal Food, Drug and
Cosmetic Act.
(ii) All pre-market notification submissions and any
supplementary materials submitted therewith are accurate in all
material respects and each of the STC Non-Exempt Products is
suitable for its intended use.
(iii) During the five-year period prior to the date hereof,
there have been no adverse actions taken by the FDA or any other
Governmental Entity involving Non-Exempt Products including,
without limitation any recalls of any STC Non-Exempt Product. For
STC Non-Exempt Products, STC maintains a system designed to keep
records of complaints. There are no current recalls or, to STC or
STC's Knowledge, threatened recalls of any STC Non-Exempt Product.
(iv) All STC Non-Exempt Products are manufactured in all
material respects in accordance with the good manufacturing
practices regulations of the Federal Food, Drug and Cosmetic Act.
All contract manufacturers and contract sterilizers have been,
during the five-year period prior to the date hereof, and are now
registered with the Food and Drug Administration and all facilities
used in
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the manufacture and sterilization of STC Non-Exempt Products have
been, during the five-year period prior to the date hereof, and are
now in compliance in all material respects with the applicable
regulations of the Food and Drug Administration.
(v) No STC Non-Exempt Products have been, during the five-year
period prior to the date hereof, or are now misbranded in any
material respect.
(vi) During the five-year period prior to the date hereof, for
all STC Non-Exempt Products, STC has either submitted to the Food
and Drug Administration all written information disseminated on new
uses in a supplemental application or submitted an application for
an exemption from submission of a supplemental application.
(b) STC has no Knowledge of any current investigations by any
Governmental Entity including, without limitation, the Food and Drug
Administration regarding STC or any products of STC.
SECTION 4.28. Product Liability Claims. During the three-year period
preceding the date hereof, STC has never been notified of or received a claim,
informally or in a legal action filed with a court, arbitrator, mediator or with
any other adjudicatory body or incurred any uninsured or insured liability, in
the form of a judgment, settlement or other payment or required activity or
inactivity, for or based upon breach of product warranty (other than warranty
service and repair claims in the ordinary course of business not material in
amount of significance), strict liability in tort, negligent design or
manufacture of product, negligent provision of instructions, warnings or
services, fraudulent representations, deceptive trade practices or any other
allegation of liability, concerning a personal injury (whether physical or
emotional distress) or resulting in product recalls, arising from the materials,
design, testing, manufacture, packaging, labeling (including instructions for
use) or sale of its products or from the provision of services (hereafter
collectively referred to as "Product Liability"). To the Knowledge of STC, no
basis for any claim based upon alleged Product Liability exists which would have
an STC Material Adverse Effect.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF MERGER SUB
Merger Sub represents and warrants to STC as follows:
SECTION 5.1. Organization. Merger Sub is a corporation duly
incorporated, validly existing and in good standing under the laws of Delaware.
Merger Sub is a direct wholly-owned subsidiary of Epitope. The authorized
capital stock of Merger Sub consists of 120,000,000 shares of common stock, par
value $0.000001 per share and 25,000,000 shares of preferred stock, par value
$0.000001 per share. As of the date hereof, 100 shares of Merger Sub common
stock are outstanding, all of which are held beneficially and of record by
Epitope. There are not now, and immediately prior to the ▇▇▇ Effective Time,
there will be no, options, warrants or other rights to purchase common stock of
Merger Sub.
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SECTION 5.2. Corporate Authorization. Merger Sub has all requisite
corporate power and authority to enter into this agreement and to consummate the
transaction contemplated by this Agreement. The execution, delivery and
performance by each of Merger Sub of this Agreement and the consummation of the
transactions contemplated by this Agreement have been duly authorized by all
necessary corporate action on the part of Merger Sub. This Agreement has been
duly executed and delivered by Merger Sub and constitutes a valid and binding
agreement of Merger Sub, enforceable against it in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting
creditors generally or by general equity principles.
SECTION 5.3. Non-Contravention. The execution, delivery and performance
by Merger Sub of this Agreement and the consummation by Merger Sub of the
transactions contemplated by this Agreement do not and will not contravene or
conflict with its certificate of incorporation or bylaws.
SECTION 5.4. No Business Activities. Merger Sub has not conducted any
activities other than in connection with the organization of Merger Sub, the
negotiation and execution of this Agreement and the consummation of the
transactions contemplated by this Agreement. Merger Sub has no subsidiaries.
SECTION 5.5. Taxes.
(a) The representations and warranties contained in the Merger Sub
Representation Letter attached hereto as Exhibit O are true and correct.
(b) Merger Sub has not taken or agreed to take, will not take, and
is not aware of any fact or circumstance that would prevent or impede
the Mergers from qualifying as 368 Reorganizations or that would make
untrue any representation or warranty contained in the Officer's
Certificate referred to in Section 5.5(a) hereof.
ARTICLE VI
COVENANTS OF EPITOPE
Epitope agrees that:
SECTION 6.1. Epitope Interim Operations. Except as expressly
contemplated or permitted by this Agreement, or as required by any Governmental
Entity of competent jurisdiction, without the prior consent of STC (which
consent shall not be unreasonably withheld or delayed), from the date hereof
until the Effective Time, Epitope shall, and shall cause each of the Epitope
Subsidiaries to, conduct their business in all material respects in the ordinary
course consistent with past practice and shall use commercially reasonable
efforts to (i) preserve intact its present business organization, (ii) maintain
in effect all material foreign, federal, state and local licenses, approvals and
authorizations, including, without limitation, all material licenses and permits
that are required for Epitope or any Epitope Subsidiary to carry on its business
and (iii) preserve existing relationships with its material customers, lenders,
suppliers and others having material business relationships with it. Without
limiting the generality of the foregoing, except as expressly contemplated or
permitted by this Agreement, or as required by a
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Governmental Entity of competent jurisdiction, from the date hereof until the
Effective Time, without the prior consent of STC (which consent shall not be
unreasonably withheld or delayed), Epitope shall not, nor shall it permit any
Epitope Subsidiary to:
(a) amend its articles of incorporation or by-laws;
(b) split, combine or reclassify any shares of capital stock of
Epitope or any less-than-wholly-owned Epitope Subsidiary or declare, set
aside or pay any dividend (except for dividends by any wholly-owned
Epitope Subsidiary) or other distribution (whether in cash, stock or
property or any combination thereof) in respect of its capital stock, or
redeem, repurchase or otherwise acquire or offer to redeem, repurchase,
or otherwise acquire any of its securities or any securities of any
Epitope Subsidiary;
(c) (i) issue, deliver or sell, or authorize the issuance, delivery
or sale of, any shares of its capital stock of any class or any
securities convertible into or exercisable for, or any rights, warrants
or options to acquire, any such capital stock or any such convertible
securities, other than (A) a number of shares of capital stock equal to
that number of shares underlying options forfeited prior to the Closing
by former Epitope employees, pursuant to the Epitope Employee Plans; or
(B) Epitope Common Stock upon the exercise of stock options or warrants
in accordance with their present terms or upon exercise of options
issued pursuant to clause (A) above of this Section 6.1(c)(i); or (ii)
amend in any respect any term of any outstanding security of Epitope or
any Epitope Subsidiary;
(d) other than in connection with transactions not prohibited by
Section 6.1(e), incur any capital expenditures or any obligations or
liabilities in respect thereof, except for those (i) contemplated by the
capital expenditure budgets for Epitope and the Epitope Subsidiaries
made available to STC, or (ii) incurred in the ordinary course of
business of Epitope and the Epitope Subsidiaries and consistent with
past practice;
(e) acquire (whether pursuant to cash merger, stock or asset
purchase or otherwise) in one transaction or series of related
transactions (i) any assets (including any equity interests) having a
fair market value in excess of $100,000, or (ii) all or substantially
all of the equity interests of any Person or any business or division of
any Person having a fair market value in excess of $100,000, but in no
event shall the expenditures, commitments, obligations or liabilities
made, incurred, or assumed, as the case may be, by Epitope and the
Epitope Subsidiaries pursuant to Section 6.1(d) and 6.1(e) exceed
$500,000 in the aggregate;
(f) sell, lease, out-license, encumber or otherwise dispose of any
assets, other than (i) sales of finished goods in the ordinary course of
business consistent with past practice, (ii) equipment and property no
longer used in the operation of Epitope's business and (iii) assets
related to discontinued operations of Epitope or any Epitope Subsidiary;
(g) (i) incur any indebtedness for borrowed money or guarantee any
such indebtedness, (ii) issue or sell any debt securities or warrants or
rights to acquire any debt
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securities of Epitope or any Epitope Subsidiary, (iii) make any loans,
advances or capital contributions to or investments in, any other
Person, or (iv) except in the ordinary course of business consistent
with past practice (which shall include, without limitation, borrowings
under Epitope's existing credit agreements and overnight borrowings and
loans and advances to wholly-owned Epitope Subsidiaries) guarantee any
debt securities or indebtedness of others, in any such case in an amount
in excess of $100,000;
(h) (i) enter into any agreement or arrangement that limits or
otherwise restricts Epitope, any Epitope Subsidiary or any of their
respective Affiliates or any successor thereto or that would, after the
Effective Time, limit or restrict Epitope, any Epitope Subsidiary or the
Surviving Corporation, or any of their respective Affiliates, from
engaging or competing in any line of business or in any location, or
(ii) enter into, amend, modify or terminate any material contract,
agreement or arrangement of Epitope or any Epitope Subsidiary or
otherwise waive, release or assign any material rights, claims or
benefits of Epitope or any Epitope Subsidiary thereunder; provided,
however, that this Section 6.1(h) shall not prevent Epitope from
entering into material contracts with customers, suppliers or
distributors, so long as such contracts are entered into in the ordinary
course and consistent with Epitope's past practice;
(i) (i) except as required by law or a written agreement existing
on or prior to the date hereof, increase the amount of compensation of
any director or executive officer or make any increase in or commitment
to increase any employee benefits, (ii) except as required by law, or a
written agreement existing on or prior to the date hereof or a written
Epitope severance policy existing as of the date hereof, grant any
severance or termination pay to any director, officer or employee of
Epitope or any Epitope Subsidiary, (iii) adopt any additional employee
benefit plan or, except in the ordinary course of business consistent
with past practice and containing only normal and customary terms, make
any contribution to any such existing plan or (iv) except as may be
required by law or a written agreement or written employee benefit plan
existing on or prior to the date hereof, or as contemplated by this
Agreement, enter into or amend in any respect or accelerate the vesting
under any Epitope Employee Plan employment agreement, option, license
agreement or retirement agreements, or (v) hire any employee with an
annual base salary in excess of $75,000;
(j) change (x) Epitope's methods of accounting in effect at
September 30, 1999, except as required by changes in GAAP or by
Regulation S-X of the Exchange Act, as concurred with by its independent
public accountants, (y) Epitope's fiscal year, or (z) make any material
Tax election, other than in the ordinary course of business consistent
with past practice and containing only normal and customary terms;
(k) (i) settle, propose to settle, or commence any litigation,
investigation, arbitration, proceeding or other claim that is material
to the business of Epitope and the Epitope Subsidiaries, taken as a
whole, other than the payment, discharge or satisfaction, in the
ordinary course of business consistent with past practice of liabilities
(x) recognized or disclosed in the most recent consolidated financial
statements (or the notes thereto) of Epitope included in the Epitope SEC
Documents or (y) incurred since the date of such financial statements in
the ordinary course of business consistent with past
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practice, or (ii) make any tax election or enter into any settlement or
compromise of any tax liability; or
(l) Epitope shall not, and shall not permit any of the Epitope
Subsidiaries to, enter into any new line of business;
(m) except to the extent required to comply with its obligations
hereunder, or required by law, Epitope shall not amend or propose to so
amend its Articles of Incorporation, Bylaws or other governing
documents;
(n) Epitope shall not amend, modify or waive (other than any
amendment or waiver required to consummate the transactions contemplated
by this Agreement) any provision of the Epitope Rights Agreement, and
shall not take any action to redeem the Epitope Stock Purchase Rights or
render the Epitope Stock Purchase Rights inapplicable to any transaction
(other than the transactions contemplated by this Agreement); or
(o) agree, resolve or commit to do any of the foregoing.
SECTION 6.2. Acquisition Proposals; Board Recommendation.
(a) Epitope agrees that it shall not, nor shall it permit any
Epitope Subsidiary to, and it shall direct and use its reasonable best
efforts to cause any officer, director, employee, investment banker,
attorney, accountant, agent or other advisor or representative of
Epitope or any Epitope Subsidiary, not to directly or indirectly, (i)
solicit, initiate or knowingly facilitate or encourage the submission of
any Acquisition Proposal for Epitope, (ii) participate in any
discussions or negotiations regarding, or furnish to any Person any
information with respect to or take any other action knowingly to
facilitate any inquiries or the making of any proposal that constitutes
an Acquisition Proposal for Epitope, (iii) grant any waiver or release
under any standstill or similar agreement with respect to any class of
Epitope's equity securities or (iv) enter into any agreement with
respect to an Acquisition Proposal for Epitope. Notwithstanding anything
in this Agreement to the contrary, Epitope or its Board of Directors
shall be permitted to (A) to the extent applicable, comply with Rule
14d-9 and Rule 14e-2 promulgated under the Exchange Act with regard to
an Acquisition Proposal for Epitope, (B) in response to an unsolicited
bona fide written Acquisition Proposal for Epitope by any Person,
recommend approval of such an unsolicited bona fide written Acquisition
Proposal for Epitope to its stockholders or effect an Adverse Change in
the Epitope Recommendation, or (C) engage in any discussions or
negotiations with, or provide any information to, any Person in response
to an unsolicited bona fide Acquisition Proposal for Epitope by any such
Person, if and only to the extent that Epitope (including for this
purpose, if authorized by Epitope, all Epitope Subsidiaries or any
officer, director, employee, investment banker, attorney, accountant,
agent or other advisor or representative of Epitope or any Epitope
Subsidiaries) have not violated in any material respect any of the
restrictions contained in Section 6.2(a) and, in any such case as is
referred to in clause (B) or (C), (i) the Epitope Stockholders Meeting
shall not have occurred, (ii) the Epitope Board of Directors (x) in the
case of clause (B) above, concludes in good faith after consultation
with its financial advisors and counsel, and
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taking into account, among other things, all legal, financial,
regulatory and other aspects of such Acquisition Proposal, and the
nature of the Person making the Acquisition Proposal, that such written
Acquisition Proposal for Epitope constitutes a Superior Proposal, and
provides written notice of termination of this Agreement pursuant to
Section 10.1(e) (provided that such termination shall not be effective
until such time as Epitope makes the payment to STC contemplated by
Section 10.2(b))or (y) in the case of clause (C) above concludes in good
faith after consultation with its financial advisors and counsel, and
taking into account, among other things, all legal, financial,
regulatory and other aspects of such Acquisition Proposal, and the
nature of the Person making the Acquisition Proposal, that such
Acquisition Proposal for Epitope would reasonably be expected to result
in a Superior Proposal, (iii) prior to providing any information or data
to any Person in connection with an Acquisition Proposal for Epitope by
any such Person, the Epitope Board of Directors receives from such
Person an executed confidentiality agreement containing confidentiality
terms at least as stringent as those contained in the confidentiality
agreement between Epitope and STC dated as of March 23, 2000 (the
"Confidentiality Agreement"), and (iv) prior to providing any
information or data to any Person or entering into discussions or
negotiations with any Person, Epitope notifies STC promptly of such
inquiries, proposals or offers received by, any such information
requested from, or any such discussions or negotiations sought to be
initiated or continued with, it, its subsidiaries, its or its
subsidiaries' officers or directors, or any of its agents or
representatives indicating, in connection with such notice, the name of
such Person and the material terms and conditions of any inquiries,
proposals or offers and shall furnish only information and data that has
been previously furnished to STC. Epitope will provide STC with a copy
of any written Acquisition Proposal or amendments or supplements
thereto, and shall thereafter inform STC on a prompt basis of any
changes to the terms and conditions of such Acquisition Proposal.
Epitope will take the necessary steps to inform promptly the individuals
or entities referred to in the first sentence of this Section 6.2(a) of
the obligations undertaken in this Section 6.2.
(b) "Superior Proposal" means a written proposal made by a Person
other than STC which is for (I)(i) a merger, reorganization,
consolidation, share exchange, business combination, recapitalization,
liquidation, dissolution or similar transaction involving Epitope as a
result of which either (A) Epitope's stockholders prior to such
transaction (by virtue of their ownership of Epitope's shares) in the
aggregate cease to own at least 50% of the voting securities of the
entity surviving or resulting from such transaction (or if there is an
ultimate parent entity of such surviving or resulting entity, then of
such ultimate parent entity) or (B) the individuals comprising the board
of directors of Epitope prior to such transaction do not constitute a
majority of the board of directors of the surviving or resulting entity
(or, if there is an ultimate parent entity of such surviving or
resulting entity, then of such ultimate parent entity), (ii) a sale,
lease, exchange, transfer or other disposition of at least 50% of the
assets of Epitope and its Subsidiaries, taken as a whole, in a single
transaction or a series of related transactions, or (iii) the
acquisition, directly or indirectly, by a Person of beneficial ownership
of 50% or more of the Epitope Common Stock whether by merger,
consolidation, share exchange, business combination, tender or exchange
offer or otherwise (other than a merger, consolidation, share exchange,
business combination, tender or exchange offer or other transaction upon
the consummation of which Epitope's stockholders would in the aggregate
beneficially own
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greater than 60% of the voting securities of such Person), and which is
(II) otherwise on terms which the board of directors of Epitope in good
faith concludes (after consultation with its financial advisors and
outside counsel and upon receipt of advice from its financial advisors),
taking into account, among other things, all legal, financial,
regulatory and other aspects of the proposal and the nature of the
Person making the proposal, (i) would, if consummated, result in a
transaction that is more favorable to its stockholders (in their
capacities as stockholders), from a financial point of view, than the
transactions contemplated by this Agreement (after giving effect, for
purposes of clause (ii) of Section 10.1(e), to any revised proposal made
by STC prior to the end of the three Business-Day period referred to in
Section 10.1(e)), and (ii) is reasonably capable of being completed;
provided, however, that any such Acquisition Proposal shall not be
deemed a Superior Proposal if any financing required to consummate the
transaction contemplated by such Acquisition Proposal is not committed
in writing as of the time the Epitope Board makes its determination that
it is a Superior Proposal.
ARTICLE VII
COVENANTS OF STC
STC agrees that:
SECTION 7.1. STC Interim Operations. Except as expressly contemplated or
permitted by this Agreement, or as required by any Governmental Entity of
competent jurisdiction, without the prior consent of Epitope (which consent
shall not be unreasonably withheld or delayed), from the date hereof until the
Effective Time, STC shall conduct its business in all material respects in the
ordinary course consistent with past practice and shall use commercially
reasonable efforts to (i) preserve intact its present business organization,
(ii) maintain in effect all material foreign, federal, state and local licenses,
approvals and authorizations, including, without limitation, all material
licenses and permits that are required for STC to carry on its business and
(iii) preserve existing relationships with its material customers, lenders,
suppliers and others having material business relationships with it. Without
limiting the generality of the foregoing, except as expressly contemplated or
permitted by this Agreement, or as required by a Governmental Entity of
competent jurisdiction, from the date hereof until the Effective Time, without
the prior consent of Epitope (which consent shall not be unreasonably withheld
or delayed), STC shall not:
(a) amend its certificate of incorporation or by-laws;
(b) split, combine or reclassify any shares of capital stock of STC
or declare, set aside or pay any dividend or other distribution (whether
in cash, stock or property, or any combination thereof) in respect of
its capital stock or redeem, repurchase or otherwise acquire or offer to
redeem, repurchase, or otherwise acquire any of its securities;
(c) (i) issue, deliver or sell, or authorize the issuance, delivery
or sale of, any shares of its capital stock of any class or any
securities convertible into or exercisable for, or any rights, warrants
or options to acquire, any such capital stock or any such
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convertible securities, other than (A) a number of shares of capital
stock equal to that number of shares underlying options forfeited prior
to the Closing by former STC employees, pursuant to the STC Employee
Plans, (B) STC Common Stock upon the exercise of stock options or
warrants in accordance with their present terms or upon exercise of
options issued pursuant to clause (A) of this Section 7.1(c)(i); or (C)
STC Common Stock upon the conversion of the STC Notes; or (ii) amend in
any respect any term of any outstanding security of STC;
(d) other than in connection with transactions not prohibited by
Section 7.1(e), incur any capital expenditures or any obligations or
liabilities in respect thereof, except for those (i) contemplated by the
capital expenditure budgets for STC made available to Epitope, or (ii)
incurred in the ordinary course of business of STC and consistent with
past practice;
(e) acquire (whether pursuant to cash merger, stock or asset
purchase or otherwise) in one transaction or series of related
transactions (i) any assets (including any equity interests) having a
fair market value in excess of $100,000, or (ii) all or substantially
all of the equity interests of any Person or any business or division of
any Person having a fair market value in excess of $100,000, but in no
event shall the expenditures, commitments, obligations or liabilities
made, incurred or assumed, as the case may be, by STC pursuant to
Sections 7.1(d) and 7.1(e) exceed $500,000 in the aggregate;
(f) sell, lease, out-license, encumber or otherwise dispose of any
assets, other than (i) sales of finished goods in the ordinary course of
business consistent with past practice, (ii) equipment and property no
longer used in the operation of STC's business and (iii) assets related
to discontinued operations of STC or any STC Subsidiary;
(g) (i) incur any indebtedness for borrowed money or guarantee any
such indebtedness, (ii) issue or sell any debt securities or warrants or
rights to acquire any debt securities of STC, (iii) make any loans,
advances or capital contributions to or investments in, any other
Person, or (iv) except in the ordinary course of business consistent
with past practice (which exception shall include, without limitation,
borrowings under STC's existing credit agreements and overnight
borrowings) guarantee any debt securities or indebtedness of others in
any such case in an amount in excess of $100,000;
(h) (i) enter into any agreement or arrangement that limits or
otherwise restricts STC or any of its Affiliates or any successor
thereto or that would, after the Effective Time, limit or restrict STC
or the Surviving Corporation, or any of their respective Affiliates,
from engaging or competing in any line of business or in any location,
or (ii) enter into, amend, modify or terminate any material contract,
agreement or arrangement of STC or otherwise waive, release or assign
any material rights, claims or benefits of STC thereunder; provided,
however, that this Section 7.1(h) shall not prevent STC from entering
into material contracts with customers, suppliers or distributors, so
long as such contracts are entered into in the ordinary course and
consistent with STC's prior practice;
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(i) (i) except as required by law or a written agreement existing
on or prior to the date hereof, increase the amount of compensation of
any director or executive officer or make any increase in or commitment
to increase any employee benefits, (ii) except as required by law, a
written agreement existing on or prior to the date hereof, or a written
STC severance policy existing as of the date hereof, grant any severance
or termination pay to any director, officer or employee of STC or, (iii)
adopt any additional employee benefit plan or, except in the ordinary
course of business consistent with past practice and containing only
normal and customary terms, make any contribution to any existing such
plan or (iv) except as may be required by law or a written agreement or
written employee benefit plan existing on or prior to the date hereof,
or as contemplated by this Agreement, enter into, amend in any respect,
or accelerate the vesting under any STC Employee Plan, employment
agreement, option, license agreement or retirement agreements, or (v)
hire any employee with an annual base salary in excess of $75,000;
(j) change (x) STC's methods of accounting in effect at December
31, 1999 except as required by changes in GAAP, as concurred with by its
independent public accountants, (y) STC's fiscal year, or (z) make any
material Tax election, other than in the ordinary course of business
consistent with past practice and containing only normal and customary
terms;
(k) (i) settle, propose to settle or commence, any litigation,
investigation, arbitration, proceeding or other claim that is material
to the business of STC, other than the payment, discharge or
satisfaction, in the ordinary course of business consistent with past
practice of liabilities (x) recognized or disclosed in the STC Financial
Statements (or the notes thereto) or (y) incurred since the date of such
Financial Statements in the ordinary course of business consistent with
past practice, or (ii) make any Tax election or enter into any
settlement or compromise of any Tax liability;
(l) enter into any new material line of business;
(m) except to the extent required to comply with its obligations
hereunder or required by law, STC shall not amend or propose to so amend
its Certificate of Incorporation, Bylaws or other governing documents;
or
(n) agree, resolve or commit to do any of the foregoing.
SECTION 7.2. Acquisition Proposals; Board Recommendation. STC agrees
that it shall not, and it shall use its reasonable best efforts to cause any
officer, director, employee, investment banker, attorney, accountant, agent or
other advisor or representative of STC, not to directly or indirectly, (i)
solicit, initiate or knowingly facilitate or encourage the submission of any
Acquisition Proposal for STC, (ii) participate in any discussions or
negotiations regarding, or furnish to any Person any information with respect
to, or take any other action knowingly to facilitate any inquiries or the making
of any proposal that constitutes an Acquisition Proposal for STC, (iii) grant
any waiver or release under any standstill or similar agreement with respect to
any class of STC equity securities or (iv) enter into any agreement with respect
to any Acquisition Proposal for STC.
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ARTICLE VIII
COVENANTS OF STC AND EPITOPE
The parties hereto agree that:
SECTION 8.1. Reasonable Best Efforts. Subject to the terms and
conditions hereof, each party will use reasonable best efforts to take, or cause
to be taken, all actions and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to consummate the
transactions contemplated by this Agreement as promptly as practicable.
SECTION 8.2. Certain Filings; Cooperation in Receipt of Consents;
Listing. As promptly as reasonably practicable after the date hereof, STC and
Epitope shall prepare and Epitope shall file with the SEC the Registration
Statement, in which the Joint Proxy Statement/Prospectus will be included as
Epitope's prospectus. Each of STC and Epitope shall use all reasonable efforts
to have the Registration Statement declared effective under the Securities Act
as promptly as reasonably practicable after such filing and to keep the
Registration Statement effective as long as is necessary to consummate the
Merger and the transactions contemplated thereby. Each of STC and Epitope shall
mail the Joint Proxy Statement/Prospectus to their respective stockholders as
promptly as reasonably practicable after the Registration Statement is declared
effective under the Securities Act and, if necessary, after the Joint Proxy
Statement/Prospectus shall have been so mailed, promptly circulate amended,
supplemental or supplemented proxy material, and, if required in connection
therewith, resolicit proxies. Epitope and STC shall take any action (other than
qualifying to do business in any jurisdiction in which it is not now so
qualified or to file a general consent to service of process) required to be
taken under any applicable state securities or blue sky laws in connection with
the issuance of shares of Surviving Corporation Common Stock in the Mergers.
(a) No amendment or supplement to the Joint Proxy
Statement/Prospectus will be made by STC or Epitope without the approval
of the other party, which will not be unreasonably withheld or delayed.
Each party will advise the other party, promptly after it receives
notice thereof, of (i) the time when the Registration Statement has
become effective or any supplement or amendment has been filed, (ii) the
issuance of any stop order, (iii) the suspension of the qualification of
the shares of Surviving Corporation Common Stock issuable in connection
with the Mergers for offering or sale in any jurisdiction, or (iv) any
request by the SEC for amendment of the Joint Proxy Statement/Prospectus
or comments thereon and responses thereto or requests by the SEC for
additional information, in each case, whether orally or in writing. If
at any time prior to the Effective Time, STC or Epitope discovers any
information relating to either party, or any of their respective
Affiliates, officers or directors, that should be set forth in an
amendment or supplement to the Joint Proxy Statement/Prospectus, so that
such document would not include any misstatement of a material fact or
omit to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, the party that discovers such information shall promptly
notify the other party hereto and an appropriate amendment or supplement
describing such information shall be promptly filed with respect
thereto, and with respect
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to the Registration Statement, as the case may be, with the SEC and, to
the extent required by law or regulation, disseminated to the
stockholders of STC or Epitope.
(b) STC and Epitope shall cooperate with one another in (i)
determining whether any other action by or in respect of, or filing
with, any Governmental Entity is required, or any actions, consents,
approvals or waivers are required to be obtained from parties to any
material contracts, in connection with the consummation of the
transactions contemplated hereby, (ii) seeking any such other actions,
consents, approvals or waivers or making any such filings, furnishing
information required in connection therewith and seeking promptly to
obtain any such actions, consents, approvals or waivers, (iii) setting a
mutually acceptable date for the Special Meetings, so as to enable them
to occur, to the extent practicable, on the same date, and (iv) taking
all lawful action to call, give notice of, convene and hold a meeting of
its stockholders for the purpose of obtaining the requisite votes to
approve and adopt this Agreement, the Mergers and the other matters
contemplated by this Agreement. The Board of Directors of Epitope shall,
subject to its fiduciary duties under applicable law, declare the
advisability of and recommend adoption and approval of this Agreement,
the Merger and the other matters contemplated by this Agreement by the
stockholders of Epitope, and shall not, subject to its fiduciary duties
under applicable law, withdraw, modify or materially qualify in any
manner adverse to STC such recommendation or take any action or make any
statement in connection with the Epitope Stockholder Meeting materially
inconsistent with such recommendation (any such withdrawal,
modification, qualification or statement (whether or not required), an
"Adverse Change in the Epitope Recommendation"). The Board of Directors
of STC shall, subject to its fiduciary duties under applicable law,
declare the advisability of and recommend adoption and approval of this
Agreement, the Merger and the other matters contemplated by this
Agreement by the stockholders of STC, and shall not, subject to its
fiduciary duties under applicable law, withdraw, modify or materially
qualify in any manner adverse to Epitope to such recommendation or take
any action or make any statement in connection with the STC Stockholders
Meeting materially inconsistent with such recommendation (any such
withdrawal, modification, qualification or statement (whether or not
required), an "Adverse Change in the STC Recommendation").
(c) Each party shall permit the other party to review any
communication given by it to, and consult with each other in advance of
any meeting or conference with, any Governmental Entity or, in
connection with any proceeding by a private party, with any other
Person, and to the extent permitted by the applicable Governmental
Entity or other Person, give the other party the opportunity to attend
and participate in such meetings and conferences, in each case in
connection with the transactions contemplated hereby.
(d) Epitope and STC agree to use their respective reasonable best
efforts to cause the shares of Surviving Corporation Common Stock to be
issued upon conversion of shares of Epitope Common Stock and STC Common
Stock in accordance with this Agreement, the Articles of Merger and the
Certificates of Merger to be approved for listing upon issuance on the
Nasdaq Stock Market.
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SECTION 8.3. Headquarters. The parties intend that, by January 1, 2001,
the Surviving Corporation shall maintain its principal corporate offices and
headquarters in Bethlehem, Pennsylvania.
SECTION 8.4. Public Announcements. Epitope and STC shall use reasonable
best efforts to develop a joint communications plan and each party shall use
reasonable best efforts (i) to ensure that all press releases and other public
statements with respect to the transactions contemplated hereby shall be
consistent with such joint communications plan, and (ii) unless otherwise
required by applicable law or by obligations pursuant to any rules of the Nasdaq
Stock Market, to consult with each other before issuing any press release or, to
the extent practical, otherwise making any public statement with respect to this
Agreement or the transactions contemplated hereby.
SECTION 8.5. Access to Information; Notification of Certain Matters.
(a) From the date hereof until the Effective Time and subject to
applicable law, STC and Epitope shall (i) give to the other party, its
counsel, financial advisors, auditors and other authorized
representatives reasonable access during normal business hours to the
offices, properties, books, records, contracts, commitments, officers
and employees and all other information concerning it and its business,
properties, assets, condition (financial or otherwise) or prospects of
such party, (ii) consistent with its legal obligations, furnish or make
available to the other party, its counsel, financial advisors, auditors
and other authorized representatives such financial and operating data
and other information as such Persons may reasonably request and (iii)
instruct its employees, counsel, financial advisors, auditors and other
authorized representatives to cooperate with the reasonable requests of
the other party in its investigation. Any investigation pursuant to this
Section 8.5 shall be conducted in such manner as not to interfere
unreasonably with the conduct of the business of the other party. Unless
otherwise required by law, each of Epitope and STC will hold, and will
cause its respective officers, employees, counsel, financial advisors,
auditors and other authorized representatives to hold, any nonpublic
information obtained in any such investigation in confidence in
accordance with Section 8.9. No information or knowledge obtained in any
investigation pursuant to this Section 8.5 shall affect or be deemed to
modify any representation or warranty made by any party hereunder.
(b) Each party hereto shall give prompt notice to each other party
hereto of:
(i) the receipt by such party or any of such party's
Subsidiaries of any notice or other communication from any Person
alleging that the consent of such Person is or may be required in
connection with the transactions contemplated by this Agreement.
(ii) the receipt by such party or any of such party's
Subsidiaries of any notice or other communication from any
Governmental Entity in connection with any of the transactions
contemplated by this Agreement; and
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(iii) such party's obtaining Knowledge of any actions, suits,
claims, investigations or proceedings commenced, threatened
against, relating to or involving or otherwise affecting any of STC
or Epitope, as the case may be, or any Epitope Subsidiary which
relate to the consummation of the transactions contemplated by this
Agreement; and
(iv) such party's obtaining Knowledge of the occurrence, or
failure to occur, of any event which occurrence or failure to occur
will be likely to cause (A) any representation or warranty
contained in this Agreement o be untrue or inaccurate in any
material respect, or (B) any material failure of any party to
comply with or satisfy any covenant, condition or agreement o be
complied with or satisfied by it under this Agreement; provided,
however, that no such notification shall limit or otherwise affect
the representations, warranties, obligations or remedies of the
parties to the conditions to the obligations of the parties
hereunder.
SECTION 8.6. Further Assurances. At and after the STC Effective Time or
Epitope Effective Time, as the case may be, the officers and directors of the
Surviving Corporation will be authorized to execute and deliver, in the name and
on behalf of Epitope, STC or Merger Sub, any deeds, bills of sale, assignments
or assurances and to take and do, in the name and on behalf of Epitope, STC or
Merger Sub, any other actions and things to vest, perfect or confirm of record
or otherwise in the Surviving Corporation any and all right, title and interest
in, to and under any of the rights, properties or assets of STC, Epitope or
Merger Sub acquired or to be acquired by the Surviving Corporation as a result
of, or in connection with the Mergers.
SECTION 8.7. Tax and Accounting Treatment.
(a) Prior to the Effective Time, each party shall cooperate with
the other party and shall use its reasonable best efforts to cause the
Mergers to qualify as 368 Reorganizations, and will not take any action
reasonably likely to cause the Mergers not so to qualify. The Surviving
Corporation shall not take any action after the Effective Time that
would cause the Mergers not to qualify as 368 Reorganizations.
(b) Each party shall cooperate with the other party and shall use
its reasonable best efforts to cause the Mergers to qualify for "pooling
of interest" accounting treatment as described in Section 3.21 and
Section 4.20, and shall not take any action reasonably likely to cause
the Mergers not so to qualify. Epitope shall use reasonable best efforts
to cause to be delivered to STC two letters from Epitope's independent
public accountants, one dated approximately the date on which the
Registration Statement shall become effective and one dated the Closing
Date, each addressed to Epitope and STC, in form and substance
reasonably satisfactory to STC and customary in scope and substance for
comfort letters delivered by independent public accountants in
connection with registration statements similar to the Registration
Statement. STC shall use reasonable best efforts to cause to be
delivered to Epitope two letters from STC's independent public
accountants, one dated approximately the date on which the Registration
Statement shall become effective and one dated the Closing Date, each
addressed to Epitope and STC, in form and substance reasonably
satisfactory to Epitope and customary in scope and
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substance for comfort letters delivered by independent public
accountants in connection with registration statements similar to the
Registration Statement.
(c) Each party shall cooperate with the other party and shall use
its reasonable best efforts to obtain the opinions referred to in
Sections 9.2(b) and 9.3(b) and in connection therewith, each of Epitope,
STC and Merger Sub shall deliver to such counsel customary
representation letters substantially in the forms attached hereto as
Exhibit I, Exhibit J and Exhibit O (the "Epitope Representation Letter",
the "STC Representation Letter", and the "Merger Sub Representation
Letter" respectively) or otherwise in form and substance reasonably
satisfactory to such counsel.
SECTION 8.8. Affiliates.
(a) Not less than 45 days prior to the Effective Time, STC shall
deliver to Epitope a letter identifying all persons who, in the
reasonable judgment of STC, may be deemed at the time this Agreement is
submitted for adoption by the stockholders of STC, "affiliates" of STC
for purposes of Rule 145 under the Securities Act or for purposes of
qualifying the Mergers for pooling of interests accounting treatment
under Opinion 16 of the Accounting Principles Board and applicable SEC
rules and regulations, and such list shall be updated as necessary to
reflect changes from the date hereof. STC shall use reasonable best
efforts to cause each Person identified on such list to deliver to
Epitope not less than 30 days prior to the STC Effective Time, a written
agreement substantially in the form attached as Exhibit K hereto (a "STC
Affiliate Agreement").
(b) Not less than 45 days prior to the Effective Time, Epitope
shall deliver to STC a letter identifying all persons who, in the
reasonable judgment of Epitope, may be deemed at the time this Agreement
is submitted for adoption by the stockholders of Epitope, "affiliates"
of Epitope for purposes of qualifying the Mergers for pooling of
interests accounting treatment under Opinion 16 of the Accounting
Principles Board and applicable SEC rules and regulations, and such list
shall be updated as necessary to reflect changes from the date hereof.
Epitope shall use reasonable best efforts to cause each person
identified on such list to deliver to Epitope not less than 30 days
prior to the Effective Time, a written agreement substantially in the
form attached as Exhibit L (an "Epitope Affiliate Agreement").
(c) The Surviving Corporation shall use its reasonable best efforts
to publish no later than 90 days after the end of the first month after
the Effective Time in which there are at least 30 days of combined
operations following the Mergers (which month may be the month in which
the Effective Time occurs), combined sales and net income figures as
contemplated by and in accordance with the terms of SEC Accounting
Series Release No. 135.
SECTION 8.9. Confidentiality.
(a) Prior to the Effective Time and after any termination of this
Agreement each party hereto will hold, and will use its reasonable best
efforts to cause its officers, directors, employees, accountants,
counsel, consultants, advisors, affiliates (as such term
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is used in Rule 12b-2 under the Exchange Act) and representatives
(collectively, the "Representatives"), to hold, in confidence all
confidential documents and information concerning the other parties
hereto and its Subsidiaries furnished to such party in connection with
the transactions contemplated by this Agreement, including, without
limitation, all analyses, compilations, studies or records prepared by
the party receiving the information or by such party's Representatives,
that contain or otherwise reflect or are generated from such information
(collectively, the "Confidential Material"). The party furnishing any
Confidential Material is herein referred to as the "Delivering Company"
and the party receiving any Confidential Material is herein referred to
as the "Receiving Company."
(b) The Receiving Company agrees that the Confidential Material
will not be used other than for the purpose of the transactions
contemplated by this Agreement, and that such information will be kept
confidential by the Receiving Company and its Representatives; provided,
however, that (i) any of such information may be disclosed to the
Representatives who need to know such information for the purpose
described above (it being understood that (a) each such Representative
shall be informed by the Receiving Company of the confidential nature of
such information, shall be directed by the Receiving Company to treat
such information confidentially and not to use it other than for the
purpose described above and shall agree to be bound by the terms of this
Section 8.9, and (b) in any event, the Receiving Company shall be
responsible for any breach of this Agreement by any of its
Representatives), and (ii) any other disclosure of such information may
be made if the Delivering Company has, in advance, consented to such
disclosure in writing. The Receiving Company will make all reasonable,
necessary and appropriate efforts to safeguard the Confidential Material
from disclosure to anyone other than as permitted hereby.
(c) Notwithstanding the foregoing, if the Receiving Company or any
of its Representatives is requested or required (by oral question or
request for information or documents in legal proceedings,
interrogatories, subpoena, civil investigative demand or similar
process) to disclose any Confidential Material, the Receiving Company
will promptly notify the Delivering Company of such request or
requirement so that the Delivering Company may seek an appropriate
protective order and/or waive the Receiving Company's compliance with
the provisions of this Agreement. If, in the absence of a protective
order or the receipt of a waiver hereunder, the Receiving Company or any
of its Representatives is nonetheless, in the reasonable written opinion
of the Receiving Company's counsel, compelled to disclose Confidential
Material to any tribunal, the Receiving Company or such Representative,
after notice to the Delivering Company, may disclose such information to
such tribunal. The Receiving Party shall exercise reasonable efforts to
obtain reliable assurance that confidential treatment will be accorded
the Confidential Material so disclosed. The Receiving Company or such
Representative shall not be liable for the disclosure of Confidential
Material hereunder to a tribunal compelling such disclosure unless such
disclosure to such tribunal was caused by or resulted from a previous
disclosure by the Receiving Company or any of its Representatives not
permitted by this Agreement.
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(d) This Section 8.9 shall be inoperative as to particular portions
of the Confidential Material if such information (i) is or becomes
generally available to the public other than as a result of a disclosure
by the Receiving Company or its Representatives, (ii) was available to
the Receiving Company on a non-confidential basis prior to its
disclosure to the Receiving Company by the Delivering Company or the
Delivering Company's Representatives, or (iii) becomes available to the
Receiving Company on a non-confidential basis from a source other than
the Delivering Company or the Delivering Company's Representatives,
provided that such source is not known by the Receiving Company, after
reasonable inquiry, to be bound by a confidentiality agreement with the
Delivering Company or the Delivering Company's Representatives and is
not otherwise prohibited from transmitting the information to the
Receiving Company by a contractual, legal or fiduciary obligation. The
fact that information included in the Confidential Material is or
becomes otherwise available to the Receiving Company or its
Representatives under clauses (i) through (iii) above shall not relieve
the Receiving Company or its Representatives of the prohibitions of the
confidentiality provisions of this Section 8.9 with respect to the
balance of the Confidential Material.
(e) If this Agreement is terminated, each party hereto will, and
will use its reasonable best efforts to cause its officers, directors,
employees, accountants, counsel, consultants, advisors and agents to,
destroy or deliver to the party from whom such Confidential Material was
obtained, upon request, all documents and other materials, and all
copies thereof, obtained by such party or on its behalf from any such
other parties in connection with this Agreement that are subject to such
confidence.
SECTION 8.10. Benefit Matters. Epitope and STC will work together to
design benefit plans to be adopted by the Surviving Corporation for the benefit
of its employees as soon as practicable following the Mergers. Until such
adoption, the Surviving Corporation shall cause all Epitope Employee Plans and
all STC Employee Plans to be maintained in full force and effect.
SECTION 8.11. Antitrust Matters.
(a) The parties hereto promptly will complete all documents
required to be filed with the Federal Trade Commission and the
Department of Justice in order to permit stockholders who will acquire
Surviving Corporation Common Stock with a value in excess of $15 million
as a result of the Mergers and who do not have exemption from the HSR
Act therefor to comply with the HSR Act and, together with the Persons
who are required to join in such filings, will file the same with the
appropriate Governmental Entities. The parties hereto promptly will
furnish all materials thereafter required by any of the Governmental
Entities having jurisdiction over such filings and will take all
reasonable actions and file and use all reasonable efforts to have
declared effective or approved all documents and notifications with any
such Governmental Entities, as may be required under the HSR Act for the
consummation of the Mergers.
(b) The parties hereto will use their reasonable best efforts to
resolve such objections, if any, as may be asserted with respect to the
transactions contemplated by this Agreement under any antitrust,
competition or trade regulatory laws, rules or
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regulations of any domestic or foreign Governmental Entity ("Antitrust
Laws"). If any suit is threatened or instituted challenging the Mergers
as violating any Antitrust Law, the parties hereto will take such action
as may be reasonably required (i) by the applicable Governmental Entity
in order to resolve such objections as such Governmental Entity may have
to such transaction under such Antitrust Law or (ii) by any domestic or
foreign court or similar tribunal, in any suit brought by a private
party or governmental authority challenging the Merger as violating any
Antitrust Law, in order to avoid the entry of, or to effect the
dissolution of, any injunction, temporary restraining order or other
order that has the effect of preventing the consummation of the Merger.
Nothing in this Section 8.11 shall require any of Epitope and its
Subsidiaries or STC to sell, hold separate or otherwise dispose of or
conduct their business in a specified manner, or agree to sell, hold
separate or otherwise dispose of or conduct their business in a
specified manner, or permit the sale, holding separate or other
disposition of, any assets of Epitope, STC or any Epitope Subsidiary or
the conduct of their business in a specified manner, whether as a
condition to obtaining any approval from a Governmental Entity or any
other Person or for any other reason, if such sale, holding separate or
other disposition or the conduct of their business in a specified manner
is not conditioned on the Closing or would reasonably be expected to
have a Material Adverse Effect on the Surviving Corporation and its
Subsidiaries, taken together, after giving effect to the Mergers.
(c) Each party promptly will inform the others of any material
communication from the Federal Trade Commission, the Department of
Justice or any other domestic or foreign Governmental Entity regarding
any of the transactions contemplated by this Agreement. If any party or
any Affiliate thereof receives a request for additional information or
documentary material from any such government or authority with respect
to the transactions contemplated by this Agreement, such party will
endeavor in good faith to make, as soon as reasonably practicable and
after consultation with the other parties, an appropriate response to
such request. Each party hereto promptly will advise the other parties
hereto in respect of any understandings, undertakings or agreements
which the advising party proposes to make or enter into with the Federal
Trade Commission, the Department of Justice or any other domestic or
foreign Governmental Entity in connection with the transactions
contemplated by this Agreement.
SECTION 8.12. Exemption From Liability Under Section 16(b).
(a) Provided that STC delivers to the Surviving Corporation the
Section 16 Information with respect to STC prior to the Effective Time,
the Board of Directors of the Surviving Corporation, or a committee of
Non-Employee Directors thereof (as such term is defined for purposes of
Rule 16b-3(d) under the Exchange Act), shall adopt a resolution in
advance of the STC Effective Time providing that the receipt by the STC
Insiders of Surviving Corporation Common Stock in exchange for shares of
STC Common Stock, and of options to purchase Surviving Corporation
Common Stock upon assumption and conversion by the Surviving Corporation
of options to purchase STC Common Stock, in each case pursuant to the
transactions contemplated hereby and to the extent such securities are
listed in the Section 16 Information, are intended to be exempt from
liability pursuant to Rule 16b-3 under the Exchange Act.
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(b) "Section 16 Information" shall mean information accurate in all
respects regarding the STC Insiders, the number of shares of STC Common
Stock, or other STC equity securities, deemed to be beneficially owned
by each such STC Insider and expected to be exchanged for Surviving
Corporation Common Stock in connection with the Mergers.
(c) "STC Insiders" shall mean those officers and directors of STC
who are subject to the reporting requirements of Section 16(a) of the
Exchange Act who are listed in the Section 16 Information.
SECTION 8.13. Indemnification and Insurance.
(a) The Surviving Corporation agrees to assume the agreements
listed in Exhibit M, which agreements will survive the Mergers and will
continue in full force and effect for a period of not less than six (6)
years from the Effective Time. In the event any claim is asserted or
made within such six-year period, all rights to indemnification in
respect of any such claim will continue until final disposition thereof.
An "Indemnified Party" shall mean any Person who is at the Effective
Time or prior thereto has been an employee, agent, director or officer
of either STC or Epitope as provided in their respective charters,
bylaws or resolutions.
(b) From and after the Effective Time, the Surviving Corporation
shall indemnify all Indemnified Parties to the fullest extent permitted
by the Delaware Law with respect to all acts and omissions arising out
of such individuals' services as officers, directors, employees or
agents of either STC or Epitope or as trustees or fiduciaries of any
plan for the benefit of employees, or otherwise on behalf of, either STC
or Epitope, occurring at or prior to the Effective Time, including the
transactions contemplated by this Agreement. In the event any
Indemnified Party is or becomes involved in any capacity in any action,
proceeding or investigation in connection with any such matter occurring
at or prior to the Effective Time, the Surviving Corporation will pay as
incurred such Indemnified Party's legal and other expenses (including
the cost of any investigation and preparation) incurred in connection
therewith. The Surviving Corporation will pay all expenses, including
attorneys' fees, that may be incurred by any Indemnified Party in
enforcing the indemnity and other obligations provided for in this
Section 8.13.
(c) The Surviving Corporation will cause to be maintained in effect
for not less than six (6) years from the Effective Time directors' and
officers' liability insurance covering the directors and officers of STC
and Epitope similar in scope and coverage to the directors' and
officers' liability insurance maintained by STC and Epitope for their
directors and officers.
(d) The provisions of this Section 8.13 are intended to be for the
benefit of, and shall be enforceable by, each Indemnified Party, his or
her heirs and his or her personal representatives and shall be binding
on all successors and assigns of the Surviving Corporation.
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ARTICLE IX
CONDITIONS TO THE MERGER
SECTION 9.1. Conditions to the Obligations of Each Party. The respective
obligations of STC, Epitope and Merger Sub to consummate the Mergers are subject
to the satisfaction or waiver on or prior to the Closing Date of the following
conditions:
(a) Stockholder Approval. Each of the Epitope Stockholder Approval
and the STC Stockholder Approval shall have been obtained;
(b) Securities Laws. (i) The Registration Statement shall have
become effective in accordance with the provisions of the Securities
Act, no stop order suspending the effectiveness of the Registration
Statement shall have been issued by the SEC and no proceedings for that
purpose shall have been initiated or threatened by the SEC and not
concluded or withdrawn and (ii) all state securities or blue sky
authorizations necessary to carry out the transactions contemplated
hereby shall have been obtained and be in effect;
(c) Nasdaq Stock Market Listing. The shares of Surviving
Corporation Common Stock to be issued in the Mergers shall have been
approved for listing upon issuance on the Nasdaq Stock Market, subject
to official notice of issuance;
(d) Antitrust. (i) Any applicable waiting period under the HSR Act
contemplated by Section 8.11 hereof shall have expired or been earlier
terminated and (ii) if required by applicable law, the parties shall
have received a decision from the Commission on the European Communities
(the "European Commission") under Regulation 4064/89 (with or without
the initiation of proceedings under Article 6(1)(c) thereof) that the
proposed Mergers and any matters arising therefrom fall within either
Article 6.l(a) or Article 6. l(b) of such Regulation and that, in any
event, the Mergers will not be referred to any competent authority or
dealt with by the European Commission pursuant to Article 9.3 of such
Regulation;
(e) Other Regulatory Approvals. Other than the filings provided for
by Article II, all authorizations, consents, orders or approvals of, or
declarations or filings with, or expirations of waiting periods imposed
by, any Governmental Entity the failure of which to obtain would have a
STC Material Adverse Effect, an Epitope Material Adverse Effect or a
Surviving Corporation Material Adverse Effect, shall have been filed,
occurred or been obtained;
(f) No Injunctions or Restraints; Illegality. No Laws shall have
been adopted or promulgated, and no temporary restraining order,
preliminary or permanent injunction or other order issued by a court or
other Governmental Entity of competent jurisdiction shall be in effect,
(i) having the effect of making the Mergers illegal or otherwise
prohibiting, enjoining or restraining consummation of the Mergers or
(ii) which otherwise would reasonably be expected to have a Surviving
Corporation Material Adverse Effect after giving effect to the Mergers;
provided, however, that the provisions of this
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Section 9.1(f) shall not be available to any party whose failure to
fulfill its obligations pursuant to Sections 8.1 and 8.2 shall have been
the cause of, or shall have resulted in, such order or injunction.
(g) Pooling. (i) Epitope shall have received a letter (which may
contain customary qualifications and assumptions) from PriceWaterhouse
Coopers LLP dated as of the Closing Date and addressed to Epitope,
stating that PriceWaterhouse Coopers LLP concurs with Epitope's
management's conclusion that no conditions exist that would preclude the
Surviving Corporation from accounting for the Mergers as a "pooling of
interests" in conformity with GAAP as described in Accounting Principles
Board Opinion No. 16 and applicable rules and regulations of the SEC and
such letter shall not have been withdrawn or modified in any material
respect and (ii) STC shall have received a letter (which may contain
customary qualifications and assumption) from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP dated
as of the Closing Date and addressed to STC, stating that ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP concurs with STC's management's conclusion that no
conditions exist with respect to STC that would preclude the Surviving
Corporation from accounting for the Mergers as a "pooling of interests"
in conformity with GAAP as described in Accounting Principles Board
Opinion No. 16 and applicable rules and regulations of the SEC and such
letter shall not have been withdrawn or modified in any material
respect.
SECTION 9.2. Conditions to the Obligations of Epitope and Merger Sub.
The obligations of Epitope and Merger Sub to consummate the Mergers are subject
to the satisfaction, or waiver by Epitope and Merger Sub, on or prior to the
Closing Date, of the following further conditions:
(a) Representations and Covenants. (i) STC shall have performed in
all material respects all of its obligations hereunder required to be
performed by it at or prior to the time of the filing of the Articles of
Merger and the Certificates of Merger; (ii) the representations and
warranties of STC in this Agreement that are qualified as to
materiality, STC Material Adverse Effect or Surviving Corporation
Material Adverse Effect shall be accurate, and any such representations
and warranties that are not so qualified shall be accurate, in all
material respects, as of the date of this Agreement and as of the
Effective Time (except for representations and warranties that address
matters only as of a specific date, in which case such representations
and warranties qualified as to materiality, STC Material Adverse Effect
or Surviving Corporation Material Adverse Effect shall be true and
correct, and those not so qualified shall be true and correct in all
material respects, on and as of such earlier date); and (iii) Epitope
shall have received a certificate signed by the Chief Executive Officer
or Chief Financial Officer of STC to the foregoing effect;
(b) Tax Opinion. Epitope shall have received an opinion of ▇▇▇▇▇▇▇,
Mag & Fizzell, P.C. in form and substance reasonably satisfactory to
Epitope, on the basis of certain facts, representations and assumptions
set forth in such opinion, dated as of the date of the filing of the
Articles of Merger and the Certificates of Merger, to the effect that
the Mergers will qualify for federal income tax purposes as 368
Reorganizations and that each of Epitope, STC and Merger Sub will be a
party to a reorganization within the meaning of Section 368(b) of the
Code. In rendering such opinion, such counsel shall be entitled to rely
upon representations of officers of Epitope, STC and Merger Sub;
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(c) Employment Agreements. The employees identified in Exhibit N
hereto shall have executed and delivered to the Surviving Corporation
employment agreements in the respective forms delivered to Epitope and
Merger Sub on or prior to the date hereof;
(d) Affiliate Agreements. Epitope shall have received from each
Person named in the letter referred to in Section 8.8(b) an executed
copy of an Epitope Affiliate Agreement and a STC Affiliate Agreement
substantially in the form of Exhibit L and Exhibit M, respectively, to
this Agreement;
(e) Fairness Opinion. The opinion described in Section 3.18(b)
shall not have been withdrawn or materially modified in an adverse
manner;
(f) No Material Adverse Change. There shall have been (i) no
material adverse change in the financial condition, results of
operations or cash flows or assets, liabilities, business or prospects
of STC from the date of the STC Balance Sheet through the Closing Date
and (ii) no action taken by the FDA with respect to STC's products,
operations or facilities that would be reasonably expected to have a STC
Material Adverse Effect;
(g) FDA Action. There shall have been no adverse action taken by
the Food and Drug Administration that would, or would be reasonably
expected to, prohibit or significantly limit the manufacture, sale,
promotion or distribution of any products of STC or the operation of
STC; and
(h) Epitope Rights Agreement. The Epitope Stock Purchase Rights
shall not have become exercisable or been distributed or triggered.
SECTION 9.3. Conditions to the Obligations of STC. The obligations of
STC to consummate the Merger are subject to the satisfaction, or waiver by STC,
on or prior to the Closing Date, of the following further conditions:
(a) Representations and Covenants. (i) Epitope shall have performed
in all material respects all of its obligations hereunder required to be
performed by it at or prior to the time of the filing of the Articles of
Merger and the Certificates of Merger; (ii) the representations and
warranties of Epitope and Merger Sub in this Agreement that are
qualified as to materiality, Epitope Material Adverse Effect or
Surviving Corporation Material Adverse Effect shall be accurate, and any
such representations and warranties that are not so qualified shall be
accurate, in all material respects, as of the date of this Agreement and
as of the Effective Time (except for representations and warranties
which address matters only as of a specific date, in which case such
representations and warranties qualified as to materiality, Epitope
Material Adverse Effect or Surviving Corporation Material Adverse Effect
shall be true and correct, and those not so qualified shall be true and
correct in all material respects, on and as of such earlier date); and
(iii) STC shall have received a certificate signed by the Chief
Executive Officer or Chief Financial Officer of Epitope and Merger Sub
to the foregoing effect;
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(b) Tax Opinion. STC shall have received an opinion of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP in form and substance reasonably satisfactory to STC, on
the basis of certain facts, representations and assumptions set forth in
such opinion, dated as of the date of the filing of the Articles of
Merger and the Certificates of Merger, to the effect that the Mergers
will qualify for federal income tax purposes as 368 Reorganizations and
that each of Epitope, STC and Merger Sub will be a party to a
reorganization within the meaning of Section 368(b) of the Code. In
rendering such opinion, such counsel shall be entitled to rely upon
representations of officers of Epitope, STC and Merger Sub;
(c) Employment Agreements. The employees identified in Exhibit N
hereto shall have executed and delivered to the Surviving Corporation
employment agreements in the respective forms delivered to STC on or
prior to the date hereof;
(d) No Material Adverse Change. There shall have been no material
adverse change in the financial condition, results of operations or cash
flows or assets, liabilities, business or prospects of Epitope from the
date of the Epitope Balance Sheet through the Closing Date;
(e) FDA Action. There shall have been no adverse action taken by
the Food and Drug Administration that would, or would reasonably be
expected to, prohibit or significantly limit the manufacture, sale,
promotion or distribution of any products of Epitope or the operations
of Epitope;
(f) Epitope Rights Agreement. The Epitope Stock Purchase Rights
shall not have become exercisable or been distributed or triggered; and
(g) STC Preferred Stock. The holders of all shares of STC Preferred
Stock shall have converted all of their shares into STC Common Stock.
ARTICLE X
TERMINATION
SECTION 10.1. Termination. This Agreement may be terminated at any time
prior to the Effective Time by written notice by the terminating party to the
other party (except if such termination is pursuant to Section 10.1(a)),
notwithstanding approval thereof by the respective stockholders of Epitope and
STC:
(a) by mutual written agreement of Epitope and STC;
(b) by either STC or Epitope, if
(i) the Mergers shall not have been consummated by October 31,
2000 (the "Expiration Date"); provided, however, that (x) the right
to terminate this Agreement under this Section 10.1(b)(i) shall not
be available to any party whose breach of any provision of this
Agreement has resulted in the failure of the Mergers to occur on or
before the Expiration Date, and (y) such termination shall
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not limit any obligation to make any payment or reimbursement
required under Section 10.2(b);
(ii) there shall be any Law that makes consummation of the
Mergers illegal or otherwise prohibited or any judgment,
injunction, order or decree of any Governmental Entity having
competent jurisdiction enjoining Epitope, STC or the Merger Sub
from consummating the Mergers is entered and such judgment,
injunction, judgment or order shall have become final and
nonappealable and, prior to such termination, the parties shall
have used reasonable best efforts to resist, resolve or lift, as
applicable, such law, regulation, judgment, injunction, order or
decree; or
(iii) the holders of Epitope Common Stock do not approve this
Agreement.
(c) by Epitope, (i) if there shall have occurred an Adverse Change
in the STC Recommendation (or the Board of Directors of STC have
resolved or publicly proposed to take such action); (ii) if there shall
have occurred a willful and material breach of Section 7.2 by STC or any
of its officers, directors, employees, advisors or agents; (iii) if a
breach of any representation, warranty, covenant or agreement on the
part of STC set forth in this Agreement shall have occurred that would
cause the condition set forth in Section 9.2(a) not to be satisfied, and
such condition shall be incapable of being satisfied or, if capable of
being satisfied, shall not have been satisfied within 20 days after
written notice thereof shall have been received by STC; (iv) STC shall
have failed to include in the Joint Proxy Statement the recommendation
of the Board of Directors of STC in favor of the adoption and approval
of this Agreement and the approval of the Merger; (v) the Board of
Directors of STC shall have approved, endorsed or recommended any
Acquisition Proposal; (vi) a tender or exchange offer relating to
securities of STC shall have been commenced and STC shall not have sent
to its security holders, within ten business days after the commencement
of such tender or exchange offer, a statement disclosing that STC
recommends rejection of such tender or exchange offer; or (vii) STC or
STC's Board of Directors or any committee thereof shall have resolved to
do or permit any of the foregoing;
(d) by STC, (i) if there shall have occurred an Adverse Change in
the Epitope Recommendation (or the Board of Directors of Epitope have
resolved or publicly proposed to take such action); (ii) if there shall
have occurred a willful and material breach of Section 6.2 by Epitope,
any Epitope Subsidiary or any of their respective officers, directors,
employees, advisors or agents; or (iii) if a breach of any
representation, warranty, covenant or agreement on the part of Epitope
set forth in this Agreement shall have occurred that would cause the
condition set forth in Section 9.3(a) not to be satisfied, and such
condition is incapable of being satisfied or, if capable of being
satisfied, shall not have been satisfied within 20 days after written
notice thereof shall have been received by Epitope; (iv) Epitope shall
have failed to include in the Joint Proxy Statement the recommendation
of the Board of Directors of Epitope in favor of the adoption and
approval of this Agreement and the approval of the Merger; (v) the Board
of Directors of Epitope shall have approved, endorsed or recommended any
Acquisition
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Proposal; (vi) a tender or exchange offer relating to securities of
Epitope shall have been commenced and Epitope shall not have sent to its
security holders, within ten business days after the commencement of
such tender or exchange offer, a statement disclosing that Epitope
recommends rejection of such tender or exchange offer; or (vii) Epitope
or Epitope's Board of Directors or any committee thereof shall have
resolved to do or permit any of the foregoing;
(e) by Epitope at any time prior to its required stockholders
approval, upon three Business Days' prior notice to STC, if the Epitope
Board of Directors shall have determined as of the date of such notice
that an Acquisition Proposal is a Superior Proposal and has entered into
(subject to termination of this Agreement) a definitive agreement for
such Superior Proposal; provided, however, that (i) Epitope shall have
complied with Section 6.2, (ii) the Board of Directors of Epitope shall
have concluded in good faith, as of the effective date of such
termination, after taking into account any revised proposal by STC
during such three Business Day period, that an Acquisition Proposal is a
Superior Proposal and (iii) Epitope shall have made the payment and
reimbursement set forth in Section 10.2(b);
(f) automatically if the transactions contemplated herein are
enjoined by a court of competent jurisdiction for a period extending
beyond 90 days;
(g) by STC, if a Share Acquisition Date shall have occurred
pursuant to the Epitope Rights Agreement;
(h) by STC, if the Epitope Average Price shall be less than $6.00;
or
(i) by STC, if the Epitope meeting of stockholders is canceled or
is otherwise not held or if a final vote of Epitope's stockholders has
not been taken with respect to the Mergers prior to October 31, 2000,
except as a result of a judgment, injunction, order or decree of any
competent authority or events or circumstances beyond the reasonable
control of Epitope.
SECTION 10.2. Effect of Termination.
(a) If this Agreement is terminated pursuant to Section 10.1, this
Agreement shall forthwith become void and there shall be no liability or
obligation on the part of Epitope or STC or their respective officers or
directors except with respect to the provisions of Sections 8.9, 10.2,
12.1, 12.4, 12.5, 12.10 and 12.11 of this Agreement which provisions
shall remain in full force and effect and survive any termination of
this Agreement, and except that, notwithstanding anything to the
contrary contained in this Agreement, neither Epitope nor STC shall be
relieved or released from any liabilities or damages arising out of its
willful material breach of this Agreement or any obligations under
Section 10.2(b).
(b) Epitope agrees to pay STC (A) a fee in immediately available
funds equal to $3,000,000 in the event that this Agreement is terminated
by STC pursuant to clauses (i), (iv), (v), (vi) or (vii) of Section
10.1(d) or pursuant to Section 10.1(i), (B) together with an additional
payment of $2,000,000 plus reimbursement to STC of its reasonable
Expenses (as defined in Section 10.3) up to a maximum amount of
$1,000,000, if (x) an Acquisition Proposal had been made prior to the
actions referenced in clauses (i), (iv), (v), (vi) or (vii) of Section
10.1(d) or Section 10.1(i), and (y) within twelve months following such
termination by STC, Epitope enters into a definitive agreement with the
party that made such Acquisition Proposal. Epitope agrees to (i) pay STC
a fee in immediately available funds equal to $5,000,000, and (ii) to
reimburse STC for its reasonable Expenses (as defined in Section 10.3)
up to a maximum amount of $1,000,000, in the event this Agreement is
terminated by Epitope pursuant to Section 10.1(e), which payment and
reimbursement shall be reduced by the amount of all payments, and
reimbursements made by Epitope pursuant to the first sentence of this
Section 10.2(b). The payment of the first $3,000,000 required by clause
(A) of the first sentence of this Section 10.2(b) shall be made not
later than the close of business on the second Business Day after STC
has terminated this Agreement pursuant to the provisions referred to in
such sentence. The combined payment and reimbursement of up to an
additional $3,000,000 required by clause (B) of the first sentence of
this Section 10.2(b) shall be made contemporaneously with entering into
a definitive agreement with the third party that made the Acquisition
Proposal referred to in that sentence. The termination of this
Agreement, and the payment and reimbursement required by the second
sentence of this Section 10.2(b) shall be made contemporaneously with a
termination of this Agreement by Epitope.
(c) The remedy provided for in Section 10.2(b) shall be the
exclusive remedy at law or in equity that STC shall have in the event of
a termination of this Agreement (A) by STC pursuant to clauses (i),
(iv), (v), (vi) or (vii) of Section 10.1(d) or Section 10.1(i), or (B)
by Epitope pursuant to Section 10.1(e).
(d) Epitope acknowledges that the agreements contained in this
Section 10.2 are an integral part of the transactions contemplated by
this Agreement, and that, without these agreements STC would not have
entered into this Agreement.
SECTION 10.3. Fees and Expenses. Except as set forth in this Section
10.2(b), all fees and expenses incurred in connection herewith and the
transactions contemplated hereby shall be paid by the party incurring such
expenses, whether or not the Mergers are consummated. As used in this Agreement,
"Expenses" includes all out-of-pocket expenses (including, without limitation,
all fees and expenses of counsel, accountants, investment bankers, experts and
consultants to a party hereto and its affiliates) incurred by a party or on its
behalf in connection with or related to the authorization, preparation,
negotiation, execution and performance of this Agreement and the transactions
contemplated hereby, including the preparation, printing, filing and mailing of
the Joint Proxy Statement/Prospectus and the solicitation of stockholder
approvals and all other matters related to the transactions contemplated hereby.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed duly given (a) on the date of delivery
if delivered personally, or by
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telecopy or telefacsimile, upon confirmation of receipt, in each case, if on a
Business Day, and otherwise on the next Business Day, (b) on the first service,
or (c) on the fifth Business Day following the date of mailing if delivered by
registered or certified mail, return receipt requested, postage prepaid. All
notices hereunder shall be delivered as set forth below, or pursuant to such
other instructions as may be designated in writing by the party to receive such
notice:
if to the Surviving Corporation, to the address set forth below
for Epitope and STC, including copies;
if to Epitope, to:
Epitope, Inc.
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
and Chief Executive Officer
with a copy to:
▇▇▇▇▇▇▇, Mag & Fizzell, P.C.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
if to STC to:
STC Technologies, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇, President
and Chief Executive Officer
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
SECTION 11.2. Survival of Representations, Warranties and Covenants
After the Effective Time. The representations, warranties, covenants and other
agreements contained herein and in any certificate or other instrument delivered
pursuant hereto, including any rights arising out of any breach of such
representations, warranties, covenants and other agreements, shall not survive
the Effective Time.
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SECTION 11.3. Amendments; No Waivers.
(a) Any provision of this Agreement may be amended or waived prior
to the Effective Time if, and only if, such amendment or waiver is in
writing and signed, in the case of an amendment, by Epitope and STC or
in the case of a waiver, by the party against whom the waiver is to be
effective; provided that (i) after the Epitope Stockholder Approval, no
such amendment or waiver shall, without the further approval of such
stockholders, be made that would require such approval under any
applicable law, rule or regulation and (ii) after the STC Stockholder
Approval, no such amendment or waiver shall, without the further
approval of such stockholders, be made that would require such approval
under any applicable law, rule or regulation.
(b) No failure or delay by any party in exercising any right, power
or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.
SECTION 11.4. Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto, in whole or in part (whether by operation of law or otherwise), without
the prior written consent of the other party, and any attempt to make any such
assignment without such consent shall be null and void. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and assigns.
SECTION 11.5. Governing Law. This Agreement shall be construed in
accordance with and governed by the internal laws of the State of Delaware
without regard to any principles of conflicts or choice of law.
SECTION 11.6. Counterparts; Effectiveness. This Agreement may be
executed in one or more counterparts, all of which shall be considered one and
the same agreement and shall become effective when one or more counterparts have
been signed by each of the parties and delivered to the other party, it being
understood that both parties need not sign the same counterpart. This Agreement
shall become effective when each party hereto shall have received counterparts
hereof signed by all of the other parties hereto.
SECTION 11.7. No Third Party Beneficiaries. This Agreement shall be
binding upon and inure solely to the benefit of each party hereto, and nothing
in this Agreement, express or implied, is intended to or shall confer upon any
other Person any right, benefit or remedy of any nature whatsoever under or by
reason of this Agreement, other than Section 8.13 (which is intended to be for
the benefit of the Persons covered thereby and may be enforced by such Persons).
SECTION 11.8. Interpretation. When a reference is made in this Agreement
to Sections, Exhibits or Schedules, such reference shall be to a Section of or
Exhibit or Schedule to this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or
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interpretation of this Agreement. Whenever the words "include," "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation."
SECTION 11.9. Enforcement. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms. It is accordingly agreed that
the parties shall be entitled to specific performance of the terms hereof, this
being in addition to any other remedy to which they are entitled at law or in
equity.
SECTION 11.10. Entire Agreement. This Agreement (together with the
exhibits and schedules hereto) constitutes the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior
agreements and understandings, both oral and written, between the parties with
respect to the subject matter hereof.
SECTION 11.11. Severability. If any term, provision, covenant or
restriction set forth in this Agreement is held by a court of competent
jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions set forth in this Agreement shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated so long as the economic or legal substance of the transactions
contemplated hereby is not deemed by a party (acting reasonably and in good
faith) to be materially adverse to that party. Upon such a determination, the
parties shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in order that the
transactions contemplated hereby may be consummated as originally contemplated
to the fullest extent possible.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
EPITOPE, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President and Chief Executive Officer
STC TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President and Chief Executive Officer
-
▇▇▇▇▇▇ MERGER SUBSIDIARY, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
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APPENDIX I
DEFINITIONS
"Acquisition Proposal for Epitope" means any offer or proposal for a
merger, consolidation, share, exchange, business combination, reorganization,
recapitalization, issuance of securities, acquisition of securities,
liquidation, dissolution, tender offer or exchange offer or other similar
transaction or series of transactions involving, or any purchase of 10% or more
of the assets, or directly or indirectly acquires beneficial ownership of
securities representing, or exchangeable for or convertible into, more than 10%
of the outstanding securities of any class of voting securities of, Epitope or
any Significant Subsidiary of Epitope or in which Epitope or any Significant
Subsidiary of Epitope issues securities representing 10% of the outstanding
securities of any class of voting securities of Epitope or any significant
subsidiary of Epitope, other than the transactions contemplated by this
Agreement.
"Acquisition Proposal for STC" means any offer or proposal for a merger,
consolidation, share exchange, business combination, reorganization,
recapitalization, issuance of securities, liquidation, dissolution, tender offer
or exchange offer or other similar transaction or series of transactions
involving, or any purchase of 10% or more of the assets, or directly or
indirectly acquires beneficial ownership of securities representing, or
exchangeable for or convertible into, more than 10% of the outstanding
securities of any class of voting securities of STC or in which STC issues
securities representing 10% of the outstanding securities of any class of voting
securities of STC, other than the transactions contemplated by this Agreement.
"Action" means any action, suit, proceeding or investigation by or
before any Governmental Entity or arbitrator.
"Affiliate" means, with respect to any Person, any other Person,
directly or indirectly, controlling, controlled by, or under common control
with, such Person. For purposes of this definition, the term "control"
(including the correlative terms "controlling", "controlled by" and "under
common control with") means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, or partnership or other
ownership interests, by contract, or otherwise.
"Articles of Merger" means the Articles of Merger of Epitope with and
into Merger Sub, in substantially the form attached hereto as Exhibit D.
"Average Epitope Stock Price" means the average of the closing sales
price per share of Epitope Common Stock as reported by NASDAQ on each of the 20
consecutive trading days immediately preceding the third trading day prior to
the Determination Date.
"Business Day" means any day other than a Saturday, Sunday or one on
which banks are authorized by law to close in the City of New York.
"Certificate of Merger" means either (i) the Certificate of Merger of
STC with and into Merger Sub, in substantially the form attached hereto as
Exhibit C, or (ii) the Certificate of
A-1
Merger of Epitope with and into Merger Sub, in substantially the form of Exhibit
E, as the case may be.
"Certificates of Merger" includes both of such Certificates.
"Closing" means the closing of the Mergers contemplated in this
Agreement.
"Closing Date" means the date on which the Closing occurs.
"Code" means the Internal Revenue Code of 1986, as amended.
"Consequential Damages" means Damages arising out of any interruption of
business, loss of profits, loss of use of facilities, claims of customers, loss
of goodwill or any indirect, incidental or special Damages.
"Damages" means all losses, claims, damages, costs, fines, penalties,
obligations, payments and liabilities (including those arising out of any
Action), together with all reasonable costs and expenses (including reasonable
outside attorneys' fees and reasonable out-of-pocket expenses) incurred in
connection with any of the foregoing.
"Determination Date" means the date on which the last of the following
occurs: (i) the effective date (including the expiration of any applicable
waiting period by law) of the last required consent or order of any Governmental
Entity having authority over and approving or exempting the Merger, and (ii) the
date on which the stockholders of both Epitope and STC have approved the Merger.
"Epitope Balance Sheet" means Epitope's consolidated balance sheet
included in the Epitope 10-K relating to its fiscal year ended on September 30,
1999.
"Epitope Common Stock" means the common stock of Epitope, no par value
per share, including the associated rights (the "Epitope Stock Purchase Rights")
to purchase shares of Series A Junior Participating Cumulative Preferred Stock
of Epitope (the "Epitope Series A Preferred Stock") pursuant to the Rights
Agreement, dated as of December 15, 1997, between Epitope and ChaseMellon
Shareholder Services, L.L.C., as Rights Agent, as proposed to be amended as
contemplated by Section 3.23 hereof (the "Epitope Rights Agreement"). All
references in this Agreement to Epitope Common Stock to be received pursuant to
the Merger shall be deemed to include the Epitope Stock Purchase Rights.
"Epitope Disclosure Schedule" means the schedule delivered to STC by
Epitope pursuant to Article III hereof containing exceptions to the
representations and warranties of Epitope set forth in such Article III.
"Epitope SEC Documents" means (i) Epitope's annual report on Form 10-K
for its fiscal year ended September 30, 1999 (the "Epitope 10-K"), (ii)
Epitope's quarterly report on Form 10-Q (the "Epitope 10-Q") for its fiscal
quarter ended December 31, 1999, (iii) Epitope's proxy or information statements
relating to meetings of, or actions taken without a meeting by, Epitope's
stockholders held since September 30, 1999, and (iv) all other reports, filings,
registration statements and other documents filed by it with the SEC since
September 30, 1999.
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"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"Exchange Agent" means the agent to be agreed upon by Epitope and STC
and engaged by the Surviving Corporation to effect the exchange of the
Certificates pursuant to Section 2.3 of this Agreement.
"Governmental Entity" means any federal, state or local governmental
authority, any transgovernmental authority or any court, tribunal,
administrative or regulatory agency or commission or other governmental
authority or agency, domestic or foreign.
"Joint Proxy Statement/Prospectus" means the joint proxy
statement/prospectus included in the Registration Statement relating to the
Special Meetings, together with any amendments or supplements thereto.
"Knowledge" means, with respect to the matter in question, if any of (i)
in the case of Epitope or Merger Sub, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President and Chief
Executive Officer, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Vice President and Chief Financial Officer,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Senior Vice President, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Vice President and
Chief Science Officer, ▇▇▇▇▇▇▇ ▇. Block, Vice President of Marketing and Sales,
and ▇▇▇ ▇▇▇▇▇▇, Vice President of Regulatory Affairs and Quality Assurance, and
(ii) in the case of STC, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President and Chief Executive
Officer, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Executive Vice President, R. STC ▇▇▇▇▇▇▇▇,
Executive Vice President, and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chief Financial Officer, has
actual knowledge of such matter.
"Law" means any federal, state, local, municipal, foreign,
international, multinational, or other judicial or administrative order,
judgment, decree, constitution, statute, rule, regulation, treaty, ordinance or
principle of common law.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
"Material Adverse Effect" means a material adverse effect on the
financial condition, business, results of operations or prospects of a Person
and its Subsidiaries, taken as a whole, but shall exclude any material adverse
effect arising out of any change or development relating to (i) U.S. or global
economic or industry conditions (including, without limitation, conditions
applicable generally to the oral specimen collection business), (ii) changes in
U.S. or global financial markets or conditions, and/or (iii) any generally
applicable change in Law or GAAP or interpretation of any thereof. "Epitope
Material Adverse Effect" means a Material Adverse Effect in respect of Epitope,
"STC Material Adverse Effect" means a Material Adverse Effect in respect of STC
and "Surviving Corporation Material Adverse Effect" means a Material Adverse
Effect in respect of the Surviving Corporation.
"Merger" or "Mergers" has the meaning specified in the Recitals to this
Agreement.
"Merger Consideration" means the total number of shares of Surviving
Corporation Common Stock issued pursuant to the STC Merger or the Epitope
Merger, as the case may be,
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issued pursuant to Article II, together with any cash in lieu of fractional
shares of Surviving Corporation Common Stock to be paid pursuant to Section
2.1(d)(iv).
"Person" means an individual, a corporation, a limited liability
company, a partnership, an association, a trust or any other entity or
organization, including any Governmental Entity.
"Registration Statement" means the Registration Statement on Form S-4
registering under the Securities Act the Surviving Corporation Common Stock
issuable in connection with the Merger.
"STC Balance Sheet" means STC's audited balance sheet relating to its
fiscal year ended on December 31, 1999.
"STC Common Stock" means the common stock of STC, $0.000001 par value
per share, and all references in this Agreement to STC Common Stock shall be
deemed to include both the Class A Common Stock and the Class B Common Stock of
STC.
"STC Common Stock Equivalent" means all rights and options to purchase
or acquire STC Common Stock.
"STC Disclosure Schedule" means the schedule delivered to Epitope by STC
pursuant to Article IV hereof containing exceptions to the representations and
warranties of STC set forth in such Article IV.
"STC Preferred Stock" means the Series A Convertible Preferred Stock of
STC, $0.000001 par value per share.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Significant Subsidiary" means any Subsidiary that constitutes a
"significant subsidiary" of such Person with the meaning of Rule 1-02 of
Regulation S-X of the Exchange Act.
"Subsidiary" means, with respect to any Person, any corporation or other
entity of which securities or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other Persons performing
similar functions are directly or indirectly owned by such Person. "Epitope
Subsidiary" means a Subsidiary of Epitope.
"Surviving Corporation Common Stock" means the common stock of Merger
Sub, $0.000001 par value per share, including the associated rights (the
"Surviving Corporation Stock Purchase Rights") to purchase shares of Series A
Preferred Stock of the Surviving Corporation (the "Surviving Corporation Series
A Preferred Stock") pursuant to the Rights Agreement between the Surviving
Corporation and ChaseMellon Shareholder Services, L.L.C., as Rights Agent (the
"Surviving Corporation Rights Agreement"). All references in this Agreement to
Surviving Corporation Common Stock to be received pursuant to the Merger shall
be deemed to include the Surviving Corporation Stock Purchase Rights.
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"Tax" or "Taxes" means any federal, state, county, local or foreign
taxes, charges, levies, imposts, duties, other assessments or similar charges of
any kind whatsoever, including any interest, penalties and addition imposed
thereon or with respect thereto.
In addition to the definitions set forth above, each of the following
terms is defined in the Section set forth opposite such term:
TERMS Section
----- -------
Adverse Change in the Epitope Recommendation 8.2(b)
Adverse Change in the STC Recommendation 8.2(b)
Certificates 2.3(a)
Confidentiality Agreement 6.2(a)
Confidential Material 8.9(a)
Delaware Law 2.1(a)
Delivering Company 8.9(a)
Effective Time 2.2(b)
Epitope Preamble
Epitope Designees 2.4(d)
Epitope Employee Plans 3.13(a)
Epitope Intellectual Property 3.16(b)
Epitope Preferred Stock 3.5
Epitope Representation Letter 8.7(c)
Epitope Returns 3.12
Epitope Securities 3.5(b)
Epitope Stockholder Approval 3.19(a)
Epitope Stockholders Agreement Recitals
Epitope Stockholders Meeting 3.19(b)
Epitope Stock Options 3.5(a)
Epitope Warrants 3.5(a)
ERISA 3.13(a)
ERISA Affiliate 3.13(a)
European Commission 9.1(d)
Exchange Ratio 2.1(e)
Expenses 10.3
Expiration Date 10.1(b)
GAAP Recitals
HSR Act 3.3
Mergers Recitals
Merger Consideration 2.1(e)
Multiemployer Plan 3.13(b)
Oregon Law 2.2(a)
Receiving Company 8.9(a)
Representatives 8.9(a)
STC Preamble
STC Designees 2.4(d)
STC Financial Statements 4.7(a)
STC Insiders 8.12(c)
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TERMS Section
----- -------
STC Intellectual Property 4.15(b)
STC Representation Letter 8.7(c)
STC Returns 4.11(a)
STC Securities 4.5(b)
STC Stockholder Approval 4.18(a)
STC Stockholders Agreement Recitals
STC Stockholders Meeting 4.18(b)
STC Stock Options 4.5(a)
STC Warrants 4.5(a)
Section 16 Information 8.12(b)
Stockholders Agreements Recitals
Superior Proposal 6.2(b)
Surviving Corporation 2.1(a)
368 Reorganization Recitals
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EXHIBIT A
STOCKHOLDER AGREEMENT
STOCKHOLDER AGREEMENT (this "Agreement") dated as of May --,
2000 among Epitope, Inc., an Oregon corporation ("Epitope"), ▇▇▇▇▇▇ Merger
Subsidiary, Inc., a Delaware corporation and a wholly-owned subsidiary of
Epitope ("Merger Sub"), and the stockholders of STC Technologies, Inc., a
Delaware corporation ("STC" or the "Company"), named on Schedule I hereto
(individually, a "Stockholder" and collectively, the "Stockholders").
WHEREAS, Epitope and Merger Sub propose to enter into an
Agreement and Plan of Merger dated as of the date hereof (as amended from time
to time, the "Merger Agreement"; capitalized terms used but not defined herein
shall have the meanings set forth in the Merger Agreement) with STC which
provides, among other things, that STC will merge with and into Merger Sub (the
"STC Merger") and immediately thereafter Epitope will merge with and into Merger
Sub (the "Epitope Merger") (the STC Merger and the Epitope Merger are sometimes
collectively referred to herein as the "Mergers"); and
WHEREAS, as of the date hereof, each Stockholder owns of
record or beneficially the respective number of shares of STC Common Stock and
STC Preferred Stock set opposite such Stockholder's name on Schedule I hereto;
and
WHEREAS, as an essential condition to the willingness of
Epitope and Merger Sub to enter into the Merger Agreement, Epitope and Merger
Sub have requested that each Stockholder agree, and in order to induce Epitope
and Merger Sub to enter into the Merger Agreement, each Stockholder has agreed,
to enter into this Agreement with respect to (i) all the shares of STC Common
Stock and STC Preferred Stock owned beneficially and of record by such
Stockholder as of the date hereof or of which such Stockholder may hereafter
acquire record or beneficial ownership (the "Shares") and (ii) any other
securities owned of record or beneficially by such Stockholder as of the date
hereof or of which such Stockholder may hereafter acquire ownership of record or
beneficially which may be voted by or at the direction or on behalf of the
Stockholder at any meeting of STC stockholders or with respect to which action
taken without a meeting may be authorized by or at the direction or on behalf of
such Stockholder by written consent (the "Other Securities");
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements contained herein and intending to be legally
bound hereby, the parties hereto agree as follows:
ARTICLE I
VOTING AGREEMENT
SECTION 1.1 Voting Agreement. Each Stockholder hereby agrees
that, with respect to the STC Stockholders Meeting and any other meeting of STC
stockholders or any action to be taken by written consent the Stockholder shall:
(a) appear in person or by proxy (or use its reasonable best
efforts to cause the holder of record on any applicable record date to
appear in person or by proxy) for the
purpose of obtaining a quorum at the STC Stockholders Meeting and at
any adjournment or postponement thereof;
(b) vote (or cause to be voted) the Shares and the Other
Securities (or, as applicable, shall execute or cause to be executed
written consents in respect of the Shares and the Other Securities) in
favor of the approval and adoption of the Merger Agreement, the Mergers
and, any other transactions or matters contemplated by the Merger
Agreement, and any actions required in furtherance thereof and hereof;
and
(c) not encourage any holder of securities of STC to vote
against the approval and adoption of the Merger Agreement, the Mergers
or any other transactions or matters contemplated by the Merger
Agreement.
SECTION 1.2 Irrevocable Proxy. In order to ensure that the
voting agreement set forth in Section 1.1 and the other obligations of each
Stockholder hereunder will be carried out, each Stockholder hereby grants an
irrevocable proxy, coupled with an interest, in the form attached hereto as
Exhibit A (the "Irrevocable Proxy") to, and hereby constitutes and appoints
Epitope and each of its officers as such Stockholder's sole and exclusive
attorney and proxy pursuant to the provisions of Section 212(c) of the General
Corporation Law of the State of Delaware, with full power of substitution, (a)
to vote and otherwise act (by written consent or otherwise) with respect to the
Shares and the Other Securities which such Stockholder is entitled to vote at
the STC Stockholders Meeting and any other meeting of STC Stockholders, or
pursuant to any written consent in lieu of a meeting of STC Stockholders, and at
any adjournment or postponement thereof on the matters and in the manner
specified in Section 1.1. THIS PROXY AND POWER OF ATTORNEY IS IRREVOCABLE AND
COUPLED WITH AN INTEREST. Such Stockholder hereby revokes all other proxies and
powers of attorney with respect to the Shares and the Other Securities that such
Stockholder may have heretofore appointed or granted that would prevent such
Stockholder from performing its obligations hereunder. All authority herein
conferred or agreed to be conferred shall survive the death or incapacity of any
Stockholder and any obligation of such Stockholder under this Agreement shall be
binding upon the transferees, heirs, personal representatives, successors and
assigns of such Stockholder.
SECTION 1.3 Evaluation of Investment. Each Stockholder, by
reason of such Stockholder's knowledge and experience in financial and business
matters, is capable of evaluating the merits and risks of the investment in
Epitope Common Stock to be received pursuant to the STC Merger and the Common
Stock of Merger Sub following the Epitope Merger ("Surviving Corporation Common
Stock"), contemplated by the Merger Agreement.
SECTION 1.4 Documents Delivered. The Stockholder acknowledges
receipt of copies of the following documents:
(a) the Merger Agreement and all schedules and exhibits
thereto;
(b) Epitope's Annual report on Form 10-K for the fiscal year
ended September 30, 1999;
(c) Epitope's Proxy Statement dated January 11, 2000;
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(d) each report filed with the Securities and Exchange
Commission by Epitope on Forms 8-K and 10-Q since September 30, 1999;
and
(e) any other information requested by any Stockholder
concerning an evaluation of an investment in Epitope Common Stock and
Surviving Corporation Common Stock.
Each Stockholder also acknowledges that it possesses the information relating to
STC which such Stockholder deems relevant to its investment in Epitope Common
Stock and the Surviving Corporation Common Stock should the Mergers be
consummated.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
SECTION 2.1 Representations and Warranties of Each
Stockholder. Except as set forth on the disclosure letter attached hereto, each
Stockholder represents and warrants to Epitope and Merger Sub as follows:
(a) Each Stockholder (if it is a corporation, general or
limited partnership, limited liability company or other legal entity)
is duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation or organization. Such
Stockholder has the requisite power and authority (and if a natural
person, the legal capacity) to execute and deliver this Agreement and
to perform its obligations hereunder. The execution and delivery of
this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by such Stockholder and no other
proceedings on the part of such Stockholder are necessary to authorize
this Agreement and the consummation of the transactions contemplated
hereby. This Agreement has been duly executed and delivered by such
Stockholder and, assuming that this Agreement constitutes a valid and
binding agreement of Epitope, is a legal, valid and binding obligation
of such Stockholder, enforceable against such Stockholder in accordance
with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and similar laws,
now or hereafter in effect, relating to or affecting the rights and
remedies of creditors generally, and to general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or a law) and to general principles governing the
duties of fiduciaries.
(b) The execution and delivery of this Agreement by such
Stockholder do not, and the performance of this Agreement by such
Stockholder will not conflict with, result in any breach of or
constitute a default (or an event that with notice or lapse of time or
both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or require
payment under, or result in the creation of any Encumbrances (as
defined below) on any of the assets of such Stockholder pursuant to any
contract or other instrument to which such Stockholder is a party or by
which such Stockholder or any of such Stockholder's assets are bound,
except for any thereof that would not reasonably be expected to
materially impair the ability of
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such Stockholder to perform such Stockholder's obligations hereunder or
to consummate the transactions contemplated hereby.
(c) The execution and delivery of this Agreement by such
Stockholder do not, and the performance of this Agreement by such
Stockholder will not, require such Stockholder to obtain any consent,
approval, authorization or permit of, or to make any filing with or
notification to, any Governmental Entity based on any federal, state,
local or foreign law, statute, ordinance, rule, regulation, permit,
injunction, writ, judgment, decree or order (collectively, "Laws") of
any Governmental Entity, except (i) pursuant to the Exchange Act, the
Securities Act and the HSR Act; and (ii) where the failure to obtain
such consents, approvals, authorizations or permits, or to make such
filings or notifications, could not reasonably be expected to
materially impair the ability of such Stockholder to perform such
Stockholder's obligations hereunder or to consummate the transactions
contemplated hereby.
(d) There is no suit, action, investigation or proceeding
pending or, to the knowledge of such Stockholder, threatened against
such Stockholder at law or in equity before or by any Governmental
Entity that would reasonably be expected to materially impair the
ability of such Stockholder to perform such Stockholder's obligations
hereunder or to consummate the transactions contemplated hereby.
(e) Such Stockholder owns beneficially and of record the
shares of STC Common Stock and STC Preferred Stock set forth opposite
such Stockholder's name on Schedule I hereto (the "Existing Shares").
The Existing Shares constitute all the shares of STC Common Stock and
STC Preferred Stock owned of record or beneficially by such
Stockholder. Such Stockholder has sole voting power, sole power of
disposition and all other stockholder rights with respect to all the
Existing Shares, with no restrictions, other than pursuant to
applicable securities laws, on such Stockholder's rights of disposition
pertaining thereto. Such Stockholder owns options or warrants to
purchase or other securities convertible or exchangeable into or
exercisable for the number of shares of such Common Stock set forth
opposite such Stockholder's name on Schedule I hereto (collectively,
the "Derivative Securities"). None of the Existing Shares or Derivative
Securities is subject to (i) any right of first refusal or first offer,
(ii) right to purchase, acquire or vote, or (iii) proxy or power of
attorney, except in the case of clause (ii) or (iii) any rights created
by this Agreement. Such Stockholder has good and valid title to all the
Existing Shares, free and clear of all Encumbrances (other than any
Encumbrance created by this Agreement) except as disclosed on Schedule
II hereto.
(f) Such Stockholder (i) is not a party to any agreement,
arrangement or understanding with respect to voting, holding or
disposing of any Shares, Other Securities, shares of Epitope Common
Stock or the shares of Surviving Corporation Common Stock, either as of
the date hereof or at any time after the Mergers, and (ii) is not a
member of a "group" within the meaning of Section 13(d)(3) of the
Exchange Act and Rule 13d-5(b) thereunder, with respect to Shares,
Other Securities, shares of Epitope Common Stock, or shares of STC
Preferred Stock, except for this Agreement.
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ARTICLE III
COVENANTS OF THE STOCKHOLDER
SECTION 3.1 No Solicitation. Each Stockholder and its
Representatives shall immediately cease and cause to be terminated all existing
discussions or negotiations to which the Stockholder or its officers, directors,
employees, agents, accountants, counsel, advisors or consultants (collectively,
"Representatives") are a part relating to an Acquisition Proposal for STC or any
transaction referred to in Section 3.1 or 3.3 with any parties conducted
heretofore. From the date hereof until the Effective Time or, if earlier, the
termination of the Merger Agreement pursuant to Article X thereof, each
Stockholder shall not, whether directly or indirectly through Representatives or
other intermediaries, and will instruct such Stockholder's Representatives not
to, whether directly or indirectly through Representatives or other
intermediaries, initiate, solicit or encourage (including by way of furnishing
information or assistance), or take any other action to facilitate, any
inquiries or the making of any proposal regarding a potential Acquisition
Proposal for STC or any transaction referred to in Section 3.1 or 3.3, or agree
to or endorse any Acquisition Proposal for STC or any transaction referred to in
Section 3.1 or 3.3, or disclose any non-public information relating to STC to
any person that has made or may reasonably be expected to make a proposal
regarding an Acquisition Proposal for STC or any transaction referred to in
Section 3.1 or 3.3 or that has advised STC that it is or may be interested in
making a proposal regarding an Acquisition Proposal for STC or any transaction
referred to in Section 3.1 or 3.3, or authorize or permit any of such
Stockholder's Representatives to take any such action, and each Stockholder
shall use such Stockholder's reasonable best efforts to cause such Stockholder's
Representatives not to take any such action, and each Stockholder shall promptly
notify Epitope if any such inquiries or proposals are made regarding a potential
Acquisition Proposal for STC or any transaction referred to in Section 3.1 or
3.3, and each Stockholder shall promptly inform Epitope as to the terms and
details of any such inquiry or proposal (including the identity of the true
party in interest making such inquiry or proposal) and, if in writing, promptly
deliver or cause to be delivered to Epitope a copy of such inquiry or proposal,
and each Stockholder shall keep Epitope informed, on a current basis, of the
status, terms and details of any such inquiries or such proposals. Anything in
this Section 3.1 to the contrary notwithstanding, nothing in this Section 3.1
shall limit any individual Stockholder who is also a director of the Company,
from exercising or performing any of such Stockholder's rights or duties solely
in such Stockholder's capacity as a director of the Company.
SECTION 3.2 Pooling. Each Stockholder agrees that from and
after the date hereof, such Stockholder shall not knowingly take any action, or
knowingly fail to take any action, which action or inaction is reasonably likely
to jeopardize the treatment of the Merger as a "pooling of interests" under
GAAP.
SECTION 3.3 Legend. Each Stockholder will request the Company
to have the certificates evidencing those shares which are owned of record or
beneficially by such Stockholder to bear substantially the following legend and
to request the Company to instruct its transfer agent to stop the transfer of
any certificates bearing such legend that is not made in accordance with this
Agreement:
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THE VOTING OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO
THE PRIOR RIGHTS AND LIMITATIONS IMPOSED BY THE STOCKHOLDER AGREEMENT
DATED AS OF -----------------, 2000 AMONG EPITOPE, AN OREGON
CORPORATION, EPITOPE MERGER SUBSIDIARY, INC., A DELAWARE CORPORATION,
AND CERTAIN STOCKHOLDERS WHO ARE SIGNATORIES THERETO AND THE
IRREVOCABLE PROXY ATTACHED THERETO. A COPY OF SUCH AGREEMENT AND
IRREVOCABLE PROXY WILL BE FURNISHED BY THE COMPANY'S SECRETARY UPON
WRITTEN REQUEST AND WITHOUT CHARGE.
ARTICLE IV
CONVERSION OF STC PREFERRED STOCK
SECTION 4.1 Conversion of STC Preferred Stock. Each
Stockholder that is directly or indirectly the record or beneficial owner of any
shares of STC Preferred Stock agrees to convert, or cause to be converted, all
such shares into STC Common Stock prior to the Effective Time of the STC Merger.
ARTICLE V
SURVIVAL
SECTION 5.1 Survival. All provisions of this Agreement shall
survive any termination of the Merger Agreement and shall remain in full force
and effect, except as otherwise provided in Sections 5.2 and 5.3. In the event
that the Merger is consummated, only Section 3.2 of this Agreement shall survive
such consummation and shall remain in full force and effect.
SECTION 5.2 Termination. Articles I, II, III, and IV shall
terminate upon any termination of the Merger Agreement in accordance with
Article X thereof.
SECTION 5.3 Effect of Termination. In the event that any part
of this Agreement shall terminate pursuant to this Article V, such part of this
Agreement shall thereafter be void and the parties hereto shall have no further
rights or obligations with respect thereto, except as a result of any prior
breach thereof.
ARTICLE VI
DEFINITIONS
SECTION 6.1 Definitions. For purposes of this Agreement:
(a) "beneficially own" or "beneficial ownership" with respect
to any securities shall mean having "beneficial ownership" of such
securities (as determined pursuant to Rule 13d-3 under the Exchange
Act), including pursuant to any agreement, arrangement or
understanding, whether or not in writing. Securities beneficially owned
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by one Person shall include securities beneficially owned by all other
Persons with whom such Person would constitute a "group" within the
meaning of Section 13(d)(3) of the Exchange Act and Rule 13d-5(b)
thereunder.
(b) "Person" shall mean an individual, corporation,
partnership, joint venture, association, trust, unincorporated
organization or other entity.
(c) "Encumbrance" means any pledge, security interest, lien,
claim, encumbrance, mortgage, charge, hypothecation, option, right of
first refusal or offer, community property right, other marital right,
preemptive right, voting agreement, voting trust, proxy, power of
attorney, escrow, option, forfeiture, penalty, action at law or in
equity, security agreement, shareholder agreement or other agreement,
arrangement, contract, commitment, understanding or obligation, or any
other restriction, qualification or limitation on the use, transfer,
right to vote, right to dissent, and seek appraisal, receipt of income
or other exercise of any attribute of ownership, except for those which
do not or could not reasonably be expected to, individually or in the
aggregate, impair the ability of such Stockholder to perform such
Stockholder's obligations hereunder or to consummate the transactions
contemplated hereby.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1 Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule of
law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of this Agreement is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the terms of this Agreement remain as originally contemplated to the
fullest extent possible.
SECTION 7.2 Entire Agreement. This Agreement constitutes the
entire agreement between Parent and each Stockholder with respect to the subject
matter hereof and supersedes all prior agreements and understandings, both
written and oral, between Epitope and such Stockholder with respect to the
subject matter hereof.
SECTION 7.3 Counterparts. This Agreement may be executed and
delivered (including by facsimile transmission) in one or more counterparts, and
by the different parties hereto in separate counterparts, each of which when
executed and delivered shall be deemed to be an original but all of which taken
together shall constitute one and the same instrument.
SECTION 7.4 Assignment. Neither this Agreement nor any rights
or interests hereunder shall be assigned by any Stockholder (whether by
operation of law or otherwise) without the prior written consent of Epitope,
except that any Stockholder may transfer the Shares or Other Securities subject
to the Voting Agreement set forth in Section 1.1 hereof and the
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Irrevocable Proxy attached hereto as Exhibit A. Epitope may assign, in its sole
discretion, its rights hereunder to any direct or indirect wholly owned
subsidiary or affiliate of Epitope, but no such assignment shall relieve Epitope
of its obligations hereunder if such assignee does not perform such obligations.
SECTION 7.5 Amendments. This Agreement may not be amended,
supplemented, waived or otherwise modified or terminated, except upon the
execution and delivery of a written agreement executed by the parties hereto.
SECTION 7.6 Notices. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be given (and
shall be deemed to have been duly received if so given) by hand delivery,
facsimile transmission, mail (registered or certified mail, postage prepaid,
return receipt requested), or courier service providing proof of delivery. All
communications hereunder shall be delivered to the respective parties at the
following addresses:
If to Stockholder, in accordance with the information set
forth on Schedule I hereto.
If to Epitope:
Epitope, Inc.
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
and Chief Executive Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
copies to:
▇▇▇▇▇▇▇, Mag & Fizzell, P.C.
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telephone (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as the person to whom notice is given may have
previously furnished the others in writing in the manner set forth above.
SECTION 7.7 No Third Party Beneficiaries. This Agreement is
not intended to be for the benefit of, and shall not be enforceable by, any
person or entity not a party hereto.
SECTION 7.8 Specific Performance. Each of the parties hereto
acknowledges that a breach by it of any agreement contained in this Agreement
may cause the other party to sustain damage for which it may not have an
adequate remedy at law for money damages, and therefore each of the parties
hereto agrees that in the event of any such breach the aggrieved
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party may be entitled to the remedy of specific performance of such agreement
and injunctive and other equitable relief in addition to any other remedy to
which it may be entitled, at law or in equity.
SECTION 7.9 Remedies Cumulative. All rights, powers and
remedies provided under this Agreement or otherwise available in respect hereof
at law or in equity shall be cumulative and not alternative, and the exercise of
any thereof by any party shall not preclude the simultaneous or later exercise
of any other such right, power or remedy by such party.
SECTION 7.10 No Waiver. The failure of any party hereto to
exercise any right, power or remedy provided under this Agreement or otherwise
available in respect hereof at law or in equity, or to insist upon strict
compliance by any other party hereto with its obligations hereunder, and any
custom or practice of the parties at variance with the terms hereof, shall not
constitute a waiver by such party of its right to exercise any such or other
right, power or remedy or to demand such compliance.
SECTION 7.11 Governing Law.
(a) This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware, without giving
effect to the principles of conflicts of law thereof.
(b) Each party hereby irrevocably submits to the exclusive
jurisdiction of the Court of Chancery in the State of Delaware in any
action, suit or proceeding arising in connection with this Agreement,
and agrees that any such action, suit or proceeding shall be brought
only in such court (and waives any objection based on forum non
conveniens or any other objection to venue therein); provided, however,
that such consent to jurisdiction is solely for the purpose referred to
in this subsection (b) and shall not be deemed to be a general
submission to the jurisdiction of such court or in the State of
Delaware other than for such purposes.
SECTION 7.12 Waiver of Jury Trial. EACH OF EPITOPE, MERGER SUB
AND EACH STOCKHOLDER HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF PARENT
OR SUCH STOCKHOLDER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND
ENFORCEMENT THEREOF.
[This space left intentionally blank]
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SECTION 7.13 Descriptive Headings. The descriptive headings
used herein are inserted for convenience of reference only and are not intended
to be part of or to affect the meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
------------------------------------- EPITOPE, INC.
Stockholder
By ---------------------------------- By ----------------------------------
Name: Name:
Title: Title:
-------------------------------------
Stockholder ▇▇▇▇▇▇ MERGER SUBSIDIARY, INC.
By ---------------------------------- By ----------------------------------
Name: Name:
Title: Title:
-------------------------------------
Stockholder
-------------------------------------
Stockholder
-------------------------------------
Stockholder
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SCHEDULE I
Shares Owned and Derivative Securities
---------------- ---------------------
Name of Stockholder Certificate Number(s) Owned Address for Notices
------------------- --------------------- ----- -------------------
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SCHEDULE II
Each of ▇. ▇▇▇▇▇▇▇, ▇. ▇▇▇▇▇▇▇▇, and ▇. ▇▇▇▇▇▇▇▇ entered into Pledge Agreements
with Lafayette Ambassador Bank (the "Bank") on December 17, 1998, pursuant to
which each pledged certain of the shares of STC stock to the Bank.
-12-
EXHIBIT A
IRREVOCABLE PROXY COUPLED WITH AN INTEREST
The undersigned hereby irrevocably appoint(s) Epitope, Inc., an Oregon
corporation ("Epitope"), as the proxy of the undersigned and hereby grant(s) to
Epitope this irrevocable proxy coupled with an interest ("Irrevocable Proxy")
with respect to ----------- shares (the "Shares"), which term shall include any
and all other shares of capital stock or securities or rights issued or issuable
in respect thereof on or after the date hereof) of the Common Stock, par value
$0.000001 per share (the "Common Stock"), of STC Technologies, Inc., a Delaware
corporation (the "Company"), that the undersigned own(s) of record, or otherwise
has the right to vote, with all power and authority to vote and to execute and
deliver written consents, in each case, in the name, place and stead of the
undersigned, and at any annual or special meeting of stockholders of the
Company, or at any adjournment or postponement thereof, or as to any action that
can be taken by written consent, in favor of approval and adoption of the
Agreement and Plan of Merger dated the date hereof among Epitope, STC and ▇▇▇▇▇▇
Merger Subsidiary, Inc., a Delaware corporation ("Merger Sub"), as may be
amended from time to time, the ("Merger Agreement"), the Mergers, any other
transactions or matters contemplated by the Merger Agreement, and any actions
required in furtherance of any of the foregoing, in such manner as Epitope may
determine in its sole and unlimited discretion, in each case to the same extent
and with the same effect as the undersigned might or could do under any
applicable law or regulation governing the rights and powers of stockholders of
a Delaware corporation, irrespective of whether the undersigned is present at
such meeting.
This Irrevocable Proxy constitutes a valid and effective irrevocable
proxy coupled with an interest of Epitope in the Shares, within the meaning of
Section 212(e) of the Delaware General Corporation Law, of the undersigned in
respect of the foregoing Shares of Common Stock of the Company; revokes any
proxy or proxies heretofore given by the undersigned in respect of any Shares of
Common Stock of the Company; this Irrevocable Proxy shall remain in full force
and effect until the earlier of (i) termination of the Merger Agreement in
accordance with Article X thereof, or (ii) the consummation of the Mergers.
Unless otherwise defined herein, all capitalized terms shall have the meaning
set forth in the Merger Agreement.
This Irrevocable Proxy shall continue to cover the Shares sold,
transferred or otherwise disposed of after the date hereof through the time
period referred to in the last clause of the immediately preceding paragraph.
Dated: ----------------------------, 2000 -----------------------------------
Name: -----------------------------
STATE OF --------------------)
) ss.
COUNTY OF -------------------)
Sworn to and subscribed before me this ---- day of -------------,
2000 and acknowledged before me as being the free act and deed of the above
signatory.
--------------------------------------
Notary Public
My Commission expires: ---------------
EXHIBIT B
STOCKHOLDER AGREEMENT
STOCKHOLDER AGREEMENT (this "Agreement") dated as of May --, 2000
among STC Technologies, Inc., a Delaware corporation ("STC"), and the
stockholders of Epitope, Inc., an Oregon corporation ("Epitope"), named on
Schedule I hereto (individually, a "Stockholder" and collectively, the
"Stockholders").
WHEREAS, Epitope and ▇▇▇▇▇▇ Merger Subsidiary, Inc., a Delaware
corporation and a wholly-owned subsidiary of Epitope ("Merger Sub"), propose to
enter into an Agreement and Plan of Merger dated as of the date hereof (as
amended from time to time, the "Merger Agreement"; capitalized terms used but
not defined herein shall have the meanings set forth in the Merger Agreement)
with STC which provides, among other things, that STC will merge with and into
Merger Sub (the "STC Merger") and immediately thereafter Epitope will merge with
and into Merger Sub (the "Epitope Merger") (the STC Merger and the Epitope
Merger are sometimes collectively referred to herein as the "Mergers"); and
WHEREAS, as of the date hereof, each Stockholder owns of record
or beneficially the respective number of shares of Epitope Common Stock set
opposite such Stockholder's name on Schedule I hereto; and
WHEREAS, as an essential condition to the willingness of STC to
enter into the Merger Agreement, STC has requested that each Stockholder agree,
and in order to induce STC to enter into the Merger Agreement, each Stockholder
has agreed, to enter into this Agreement with respect to (i) all the shares of
Epitope Common Stock owned beneficially and of record by such Stockholder as of
the date hereof or of which such Stockholder may hereafter acquire record or
beneficial ownership (the "Shares") and (ii) any other securities owned of
record or beneficially by such Stockholder as of the date hereof or of which
such Stockholder may hereafter acquire ownership of record or beneficially which
may be voted by or at the direction or on behalf of the Stockholder at any
meeting of Epitope stockholders or with respect to which action taken without a
meeting may be authorized by or at the direction or on behalf of such
Stockholder by written consent (the "Other Securities");
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein and intending to be legally bound
hereby, the parties hereto agree as follows:
ARTICLE I
VOTING AGREEMENT
SECTION 1.1 Voting Agreement. Each Stockholder hereby agrees
that, with respect to the Epitope Stockholders Meeting and any other meeting of
Epitope stockholders or any action to be taken by written consent the
Stockholder shall:
(a) appear in person or by proxy (or use its reasonable best
efforts to cause the holder of record on any applicable record date to
appear in person or by proxy) for the purpose of obtaining a quorum at
the Epitope Stockholders Meeting and at any adjournment or postponement
thereof;
(b) vote (or cause to be voted) the Shares and the Other
Securities (or, as applicable, shall execute or cause to be executed
written consents in respect of the Shares and the Other Securities) in
favor of the approval and adoption of the Merger Agreement, the Mergers
and, any other transactions or matters contemplated by the Merger
Agreement, and any actions required in furtherance thereof and hereof;
and
(c) not encourage any holder of securities of Epitope to vote
against the approval and adoption of the Merger Agreement, the Mergers
or any other transactions or matters contemplated by the Merger
Agreement.
SECTION 1.2 Irrevocable Proxy. In order to ensure that the voting
agreement set forth in Section 1.1 and the other obligations of each Stockholder
hereunder will be carried out, each Stockholder hereby grants an irrevocable
proxy, coupled with an interest, in the form attached hereto as Exhibit A (the
"Irrevocable Proxy") to, and hereby constitutes and appoints STC and each of its
officers as such Stockholder's sole and exclusive attorney and proxy, with full
power of substitution, (a) to vote and otherwise act (by written consent or
otherwise) with respect to the Shares and the Other Securities which such
Stockholder is entitled to vote at the Epitope Stockholders Meeting and any
other meeting of Epitope Stockholders, or pursuant to any written consent in
lieu of a meeting of Epitope Stockholders, and at any adjournment or
postponement thereof on the matters and in the manner specified in Section 1.1.
THIS PROXY AND POWER OF ATTORNEY IS IRREVOCABLE AND COUPLED WITH AN INTEREST.
Such Stockholder hereby revokes all other proxies and powers of attorney with
respect to the Shares and the Other Securities that such Stockholder may have
heretofore appointed or granted that would prevent such Stockholder from
performing its obligations hereunder. All authority herein conferred or agreed
to be conferred shall survive the death or incapacity of any Stockholder and any
obligation of such Stockholder under this Agreement shall be binding upon the
transferees, heirs, personal representatives, successors and assigns of such
Stockholder.
SECTION 1.3 Evaluation of Investment. Each Stockholder, by reason
of such Stockholder's knowledge and experience in financial and business
matters, is capable of evaluating the merits and risks of the investment in the
Common Stock of Merger Sub following the Epitope Merger ("Surviving Corporation
Common Stock"), contemplated by the Merger Agreement.
SECTION 1.4 Documents Delivered. The Stockholder acknowledges
receipt of copies of the following documents:
(a) the Merger Agreement and all schedules and exhibits
thereto;
(b) Epitope's Annual report on Form 10-K for the fiscal year
ended September 30, 1999;
(c) Epitope's Proxy Statement dated January 11, 2000;
(d) each report filed with the Securities and Exchange
Commission by Epitope on Forms 8-K and 10-Q since September 30, 1999;
and
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(e) any other information requested by any Stockholder
concerning an evaluation of an investment in Surviving Corporation
Common Stock.
Each Stockholder also acknowledges that it possesses the information relating to
STC which such Stockholder deems relevant to its investment in the Surviving
Corporation Common Stock should the Mergers be consummated.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
SECTION 2.1 Representations and Warranties of Each Stockholder.
Except as set forth on the disclosure letter attached hereto, each Stockholder
represents and warrants to STC as follows:
(a) Each Stockholder (if it is a corporation, general or
limited partnership, limited liability company or other legal entity) is
duly organized, validly existing and in good standing under the laws of
the jurisdiction of its incorporation or organization. Such Stockholder
has the requisite power and authority (and if a natural person, the
legal capacity) to execute and deliver this Agreement and to perform its
obligations hereunder. The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby have been duly
authorized by such Stockholder and no other proceedings on the part of
such Stockholder are necessary to authorize this Agreement and the
consummation of the transactions contemplated hereby. This Agreement has
been duly executed and delivered by such Stockholder and, assuming that
this Agreement constitutes a valid and binding agreement of STC, is a
legal, valid and binding obligation of such Stockholder, enforceable
against such Stockholder in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and similar laws, now or hereafter in effect, relating to or
affecting the rights and remedies of creditors generally, and to general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or a law) and to general principles
governing the duties of fiduciaries.
(b) The execution and delivery of this Agreement by such
Stockholder do not, and the performance of this Agreement by such
Stockholder will not conflict with, result in any breach of or
constitute a default (or an event that with notice or lapse of time or
both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or require
payment under, or result in the creation of any Encumbrances (as defined
below) on any of the assets of such Stockholder pursuant to any contract
or other instrument to which such Stockholder is a party or by which
such Stockholder or any of such Stockholder's assets are bound, except
for any thereof that would not reasonably be expected to materially
impair the ability of such Stockholder to perform such Stockholder's
obligations hereunder or to consummate the transactions contemplated
hereby.
(c) The execution and delivery of this Agreement by such
Stockholder do not, and the performance of this Agreement by such
Stockholder will not, require such
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Stockholder to obtain any consent, approval, authorization or permit of,
or to make any filing with or notification to, any Governmental Entity
based on any federal, state, local or foreign law, statute, ordinance,
rule, regulation, permit, injunction, writ, judgment, decree or order
(collectively, "Laws") of any Governmental Entity, except (i) pursuant
to the Exchange Act, the Securities Act and the HSR Act; and (ii) where
the failure to obtain such consents, approvals, authorizations or
permits, or to make such filings or notifications, could not reasonably
be expected to materially impair the ability of such Stockholder to
perform such Stockholder's obligations hereunder or to consummate the
transactions contemplated hereby.
(d) There is no suit, action, investigation or proceeding
pending or, to the knowledge of such Stockholder, threatened against
such Stockholder at law or in equity before or by any Governmental
Entity that would reasonably be expected to materially impair the
ability of such Stockholder to perform such Stockholder's obligations
hereunder or to consummate the transactions contemplated hereby.
(e) Such Stockholder owns beneficially and of record the
shares of Epitope Common Stock set forth opposite such Stockholder's
name on Schedule I hereto (the "Existing Shares"). The Existing Shares
constitute all the shares of Epitope Common Stock owned of record or
beneficially by such Stockholder. Such Stockholder has sole voting
power, sole power of disposition and all other stockholder rights with
respect to all the Existing Shares, with no restrictions, other than
pursuant to applicable securities laws, on such Stockholder's rights of
disposition pertaining thereto. Such Stockholder owns options or
warrants to purchase or other securities convertible or exchangeable
into or exercisable for the number of shares of such Common Stock set
forth opposite such Stockholder's name on Schedule I hereto
(collectively, the "Derivative Securities"). None of the Existing Shares
or Derivative Securities is subject to (i) any right of first refusal or
first offer, (ii) right to purchase, acquire or vote, or (iii) proxy or
power of attorney, except in the case of clause (ii) or (iii) any rights
created by this Agreement. Such Stockholder has good and valid title to
all the Existing Shares, free and clear of all Encumbrances (other than
any Encumbrance created by this Agreement).
(f) Such Stockholder (i) is not a party to any agreement,
arrangement or understanding with respect to voting, holding or
disposing of any Shares, Other Securities, shares of Epitope Common
Stock or the shares of Surviving Corporation Common Stock, either as of
the date hereof or at any time after the Mergers, and (ii) is not a
member of a "group" within the meaning of Section 13(d)(3) of the
Exchange Act and Rule 13d-5(b) thereunder, with respect to Shares, Other
Securities, shares of Epitope Common Stock, except for this Agreement.
ARTICLE III
COVENANTS OF THE STOCKHOLDER
SECTION 3.1 No Solicitation. Each Stockholder and its
Representatives shall immediately cease and cause to be terminated all existing
discussions or negotiations to which the Stockholder or its officers, directors,
employees, agents, accountants, counsel, advisors or
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consultants (collectively, "Representatives") are a part relating to an
Acquisition Proposal for Epitope or any transaction referred to in Section 3.1
or 3.3 with any parties conducted heretofore. From the date hereof until the
Effective Time or, if earlier, the termination of the Merger Agreement pursuant
to Article X thereof, each Stockholder shall not, whether directly or indirectly
through Representatives or other intermediaries, and will instruct such
Stockholder's Representatives not to, whether directly or indirectly through
Representatives or other intermediaries, initiate, solicit or encourage
(including by way of furnishing information or assistance), or take any other
action to facilitate, any inquiries or the making of any proposal regarding a
potential Acquisition Proposal for Epitope or any transaction referred to in
Section 3.1 or 3.3, or agree to or endorse any Acquisition Proposal for Epitope
or any transaction referred to in Section 3.1 or 3.3, or disclose any non-public
information relating to Epitope to any person that has made or may reasonably be
expected to make a proposal regarding an Acquisition Proposal for Epitope or any
transaction referred to in Section 3.1 or 3.3 or that has advised Epitope that
it is or may be interested in making a proposal regarding an Acquisition
Proposal for Epitope or any transaction referred to in Section 3.1 or 3.3, or
authorize or permit any of such Stockholder's Representatives to take any such
action, and each Stockholder shall use such Stockholder's reasonable best
efforts to cause such Stockholder's Representatives not to take any such action,
and each Stockholder shall promptly notify STC if any such inquiries or
proposals are made regarding a potential Acquisition Proposal for Epitope or any
transaction referred to in Section 3.1 or 3.3, and each Stockholder shall
promptly inform STC as to the terms and details of any such inquiry or proposal
(including the identity of the true party in interest making such inquiry or
proposal) and, if in writing, promptly deliver or cause to be delivered to STC a
copy of such inquiry or proposal, and each Stockholder shall keep STC informed,
on a current basis, of the status, terms and details of any such inquiries or
such proposals. Anything in this Section 3.1 to the contrary notwithstanding,
nothing in this Section 3.1 shall limit any individual Stockholder who is also a
director of the Epitope, from exercising or performing any of such Stockholder's
rights or duties solely in such Stockholder's capacity as a director of the
Epitope.
SECTION 3.2 Pooling. Each Stockholder agrees that from and after
the date hereof, such Stockholder shall not knowingly take any action, or
knowingly fail to take any action, which action or inaction is reasonably likely
to jeopardize the treatment of the Merger as a "pooling of interests" under
GAAP.
SECTION 3.3 Legend. Each Stockholder will request the Epitope to
have the certificates evidencing those shares which are owned of record or
beneficially by such Stockholder to bear substantially the following legend and
to request the Company to instruct its transfer agent to stop the transfer of
any certificates bearing such legend that is not made in accordance with this
Agreement:
THE VOTING OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO
THE PRIOR RIGHTS AND LIMITATIONS IMPOSED BY THE STOCKHOLDER AGREEMENT
DATED AS OF -----------------, 2000 AMONG STC, A DELAWARE CORPORATION,
EPITOPE MERGER SUBSIDIARY, INC., A DELAWARE CORPORATION, AND CERTAIN
STOCKHOLDERS WHO ARE SIGNATORIES THERETO AND THE IRREVOCABLE PROXY
ATTACHED THERETO. A COPY OF SUCH
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AGREEMENT AND IRREVOCABLE PROXY WILL BE FURNISHED BY THE COMPANY'S
SECRETARY UPON WRITTEN REQUEST AND WITHOUT CHARGE.
ARTICLE IV
SURVIVAL
SECTION 4.1 Survival. All provisions of this Agreement shall
survive any termination of the Merger Agreement and shall remain in full force
and effect, except as otherwise provided in Sections 4.2 and 4.3. In the event
that the Merger is consummated, only Section 3.2 of this Agreement shall survive
such consummation and shall remain in full force and effect.
SECTION 4.2 Termination. Articles I, II and III shall terminate
upon any termination of the Merger Agreement in accordance with Article X
thereof.
SECTION 4.3 Effect of Termination. In the event that any part of
this Agreement shall terminate pursuant to this Article IV, such part of this
Agreement shall thereafter be void and the parties hereto shall have no further
rights or obligations with respect thereto, except as a result of any prior
breach thereof.
ARTICLE V
DEFINITIONS
SECTION 5.1 Definitions. For purposes of this Agreement:
(a) "beneficially own" or "beneficial ownership" with respect
to any securities shall mean having "beneficial ownership" of such
securities (as determined pursuant to Rule 13d-3 under the Exchange
Act), including pursuant to any agreement, arrangement or understanding,
whether or not in writing. Securities beneficially owned by one Person
shall include securities beneficially owned by all other Persons with
whom such Person would constitute a "group" within the meaning of
Section 13(d)(3) of the Exchange Act and Rule 13d-5(b) thereunder.
(b) "Person" shall mean an individual, corporation,
partnership, joint venture, association, trust, unincorporated
organization or other entity.
(c) "Encumbrance" means any pledge, security interest, lien,
claim, encumbrance, mortgage, charge, hypothecation, option, right of
first refusal or offer, community property right, other marital right,
preemptive right, voting agreement, voting trust, proxy, power of
attorney, escrow, option, forfeiture, penalty, action at law or in
equity, security agreement, shareholder agreement or other agreement,
arrangement, contract, commitment, understanding or obligation, or any
other restriction, qualification or limitation on the use, transfer,
right to vote, right to dissent, and seek appraisal, receipt of income
or other exercise of any attribute of ownership, except for those which
do not or could not reasonably be expected to, individually or in the
aggregate, impair the ability
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of such Stockholder to perform such Stockholder's obligations hereunder
or to consummate the transactions contemplated hereby.
ARTICLE VI
MISCELLANEOUS
SECTION 6.1 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of this Agreement is not affected in any manner materially adverse to
any party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in a mutually acceptable manner in order that the
terms of this Agreement remain as originally contemplated to the fullest extent
possible.
SECTION 6.2 Entire Agreement. This Agreement constitutes the
entire agreement between Parent and each Stockholder with respect to the subject
matter hereof and supersedes all prior agreements and understandings, both
written and oral, between STC and such Stockholder with respect to the subject
matter hereof.
SECTION 6.3 Counterparts. This Agreement may be executed and
delivered (including by facsimile transmission) in one or more counterparts, and
by the different parties hereto in separate counterparts, each of which when
executed and delivered shall be deemed to be an original but all of which taken
together shall constitute one and the same instrument.
SECTION 6.4 Assignment. Neither this Agreement nor any rights or
interests hereunder shall be assigned by any Stockholder (whether by operation
of law or otherwise) without the prior written consent of STC, except that any
Stockholder may transfer the Shares or Other Securities subject to the Voting
Agreement set forth in Section 1.1 hereof and the Irrevocable Proxy attached
hereto as Exhibit A. STC may assign, in its sole discretion, its rights
hereunder to any direct or indirect wholly owned subsidiary or affiliate of STC,
but no such assignment shall relieve STC of its obligations hereunder if such
assignee does not perform such obligations.
SECTION 6.5 Amendments. This Agreement may not be amended,
supplemented, waived or otherwise modified or terminated, except upon the
execution and delivery of a written agreement executed by the parties hereto.
SECTION 6.6 Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given (and shall
be deemed to have been duly received if so given) by hand delivery, facsimile
transmission, mail (registered or certified mail, postage prepaid, return
receipt requested), or courier service providing proof of delivery. All
communications hereunder shall be delivered to the respective parties at the
following addresses:
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If to Stockholder, in accordance with the information set forth
on Schedule I hereto.
If to STC:
STC Technologies, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ ▇ ▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
copies to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telephone (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as the person to whom notice is given may have
previously furnished the others in writing in the manner set forth above.
SECTION 6.7 No Third Party Beneficiaries. This Agreement is not
intended to be for the benefit of, and shall not be enforceable by, any person
or entity not a party hereto.
SECTION 6.8 Specific Performance. Each of the parties hereto
acknowledges that a breach by it of any agreement contained in this Agreement
may cause the other party to sustain damage for which it may not have an
adequate remedy at law for money damages, and therefore each of the parties
hereto agrees that in the event of any such breach the aggrieved party may be
entitled to the remedy of specific performance of such agreement and injunctive
and other equitable relief in addition to any other remedy to which it may be
entitled, at law or in equity.
SECTION 6.9 Remedies Cumulative. All rights, powers and remedies
provided under this Agreement or otherwise available in respect hereof at law or
in equity shall be cumulative and not alternative, and the exercise of any
thereof by any party shall not preclude the simultaneous or later exercise of
any other such right, power or remedy by such party.
SECTION 6.10 No Waiver. The failure of any party hereto to
exercise any right, power or remedy provided under this Agreement or otherwise
available in respect hereof at law or in equity, or to insist upon strict
compliance by any other party hereto with its obligations hereunder, and any
custom or practice of the parties at variance with the terms hereof, shall not
constitute a waiver by such party of its right to exercise any such or other
right, power or remedy or to demand such compliance.
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SECTION 6.11 Governing Law.
(a) This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware, without giving
effect to the principles of conflicts of law thereof.
(b) Each party hereby irrevocably submits to the exclusive
jurisdiction of the Court of Chancery in the State of Delaware in any
action, suit or proceeding arising in connection with this Agreement,
and agrees that any such action, suit or proceeding shall be brought
only in such court (and waives any objection based on forum non
conveniens or any other objection to venue therein); provided, however,
that such consent to jurisdiction is solely for the purpose referred to
in this subsection (b) and shall not be deemed to be a general
submission to the jurisdiction of such court or in the State of Delaware
other than for such purposes.
SECTION 6.12 Waiver of Jury Trial. EACH OF STC AND EACH
STOCKHOLDER HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE)
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF PARENT OR SUCH
STOCKHOLDER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT
THEREOF.
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SECTION 6.13 Descriptive Headings. The descriptive headings used
herein are inserted for convenience of reference only and are not intended to be
part of or to affect the meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the date first above written.
STC TECHNOLOGIES, INC.
By -------------------------------------
Name:
Title:
----------------------------------------
Stockholder
----------------------------------------
Stockholder
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SCHEDULE I
Shares Owned and Derivative Securities
---------------- ---------------------
Name of Stockholder Certificate Number(s) Owned Address for Notices
------------------- --------------------- ----- -------------------
EXHIBIT A
IRREVOCABLE PROXY COUPLED WITH AN INTEREST
The undersigned hereby irrevocably appoint(s) STC Technologies, Inc., a
Delaware corporation ("STC"), as the proxy of the undersigned and hereby
grant(s) to STC this irrevocable proxy coupled with an interest ("Irrevocable
Proxy") with respect to ----------- shares (the "Shares"), which term shall
include any and all other shares of capital stock or securities or rights issued
or issuable in respect thereof on or after the date hereof) of the Common Stock,
no par value per share (the "Common Stock"), of Epitope, Inc., an Oregon
corporation (the "Company"), that the undersigned own(s) of record, or otherwise
has the right to vote, with all power and authority to vote and to execute and
deliver written consents, in each case, in the name, place and stead of the
undersigned, and at any annual or special meeting of stockholders of the
Company, or at any adjournment or postponement thereof, or as to any action that
can be taken by written consent, in favor of approval and adoption of the
Agreement and Plan of Merger dated the date hereof among Epitope, STC and ▇▇▇▇▇▇
Merger Subsidiary, Inc., a Delaware corporation ("Merger Sub"), as may be
amended from time to time, the ("Merger Agreement"), the Mergers, any other
transactions or matters contemplated by the Merger Agreement, and any actions
required in furtherance of any of the foregoing, in such manner as Epitope may
determine in its sole and unlimited discretion, in each case to the same extent
and with the same effect as the undersigned might or could do under any
applicable law or regulation governing the rights and powers of stockholders of
an Oregon corporation, irrespective of whether the undersigned is present at
such meeting.
This Irrevocable Proxy constitutes a valid and effective irrevocable
proxy coupled with an interest of Epitope in the Shares of the undersigned in
respect of the foregoing Shares of Common Stock of the Company; revokes any
proxy or proxies heretofore given by the undersigned in respect of any Shares of
Common Stock of the Company; this Irrevocable Proxy shall remain in full force
and effect until the earlier of (i) termination of the Merger Agreement in
accordance with Article X thereof, or (ii) the consummation of the Mergers.
Unless otherwise defined herein, all capitalized terms shall have the meaning
set forth in the Merger Agreement.
This Irrevocable Proxy shall continue to cover the Shares sold,
transferred or otherwise disposed of after the date hereof through the time
period referred to in the last clause of the immediately preceding paragraph.
Dated: -----------------------, 2000 -----------------------------------
Name: -----------------------------
STATE OF --------------------)
) ss.
COUNTY OF -------------------)
Sworn to and subscribed before me this ---- day of -------------,
2000 and acknowledged before me as being the free act and deed of the above
signatory.
----------------------------------
Notary Public
My Commission expires: --------------------
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EXHIBIT C
CERTIFICATE OF MERGER
OF
STC TECHNOLOGIES, INC.
INTO
ORASURE TECHNOLOGIES, INC.
(PURSUANT TO SECTION 251 OF THE GENERAL CORPORATION LAW
OF THE STATE OF DELAWARE)
Pursuant to the provisions of the Delaware General Corporation Law, the
undersigned corporation certifies as follows:
1. The constituent corporations to the merger are STC Technologies,
Inc., a Delaware corporation, and OraSure Technologies, Inc., a Delaware
corporation.
2. STC Technologies, Inc. and OraSure Technologies, Inc. have
entered into an Agreement and Plan of Merger, dated as of May 6, 2000 (the
"Merger Agreement"), which has been approved, adopted, certified, executed and
acknowledged by STC Technologies, Inc. and ▇▇▇▇▇▇ Merger Subsidiary, Inc. in
accordance with Section 251(c) of the Delaware General Corporation Law.
3. The surviving corporation is OraSure Technologies, Inc.
4. The Certificate of Incorporation of the surviving corporation, in
the form set forth as Exhibit A hereto, shall be its certificate of
incorporation.
5. The executed Merger Agreement is on file at the office of the
surviving corporation located at ▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇.
6. A copy of the Merger Agreement will be furnished by the surviving
corporation, on request and without cost, to any stockholder of any constituent
corporation.
IN WITNESS WHEREOF, this Certificate of Merger has been executed on
behalf of the surviving corporation by its authorized officer as of August --,
2000.
OraSure Technologies, Inc.,
a Delaware corporation
By: --------------------------------
Name: ---------------------------
Title: --------------------------
Attest:
-----------------------------------
EXHIBIT D
ARTICLES OF MERGER
OraSure Technologies, Inc., the surviving corporation in a merger
effected pursuant to ORS 60.481-60.501, submits the following articles of merger
for filing pursuant to ORS 60.494:
1. The names of the constituent corporations in the merger are Epitope,
Inc., an Oregon corporation (Oregon Registry No. ------------) and OraSure
Technologies, Inc., a Delaware corporation.
2. The surviving corporation in the merger is OraSure Technologies, Inc.
3. A copy of the plan of merger is attached as Exhibit A.
4. The plan of merger was approved by the holders of common stock of
OraSure Technologies, Inc. voting as a single voting group, such approval being
the only shareholder approval required on the part of OraSure Technologies, Inc.
At the date of the shareholder vote, there were 100 shares of common stock of
OraSure Technologies, Inc. outstanding, all of which were entitled to be cast
with respect to approval of the merger. ---------- shares were voted for the
plan of merger and ---------- shares were voted against approval of the plan of
merger.
5. The plan of merger was approved by the holders of common stock of
Epitope, Inc. voting as a single voting group, such approval being the only
shareholder approval required on the part of Epitope, Inc. At the date of the
shareholder vote, there were -------- shares of common stock of Epitope, Inc.
outstanding, all of which were entitled to be cast with respect to approval of
the merger. --------- shares were voted for the plan of merger and ---------
shares were voted against approval of the plan of merger.
6. The merger shall be effective at the date and time of filing of these
articles of merger.
IN WITNESS WHEREOF, the undersigned constituent corporations have
executed these articles of merger on the ------- day of August, 2000.
Epitope, Inc. OraSure Technologies, Inc.
By: ------------------------------- By: -------------------------------
Name: Name:
Title: Title:
Person to contact about this filing: Name: --------------------------
Telephone: ---------------------
EXHIBIT E
CERTIFICATE OF MERGER
OF
EPITOPE, INC.
INTO
ORASURE TECHNOLOGIES, INC.
(PURSUANT TO SECTION 252 OF THE GENERAL CORPORATION LAW
OF THE STATE OF DELAWARE)
Pursuant to the provisions of the Delaware General Corporation Law, the
undersigned corporation certifies as follows:
1. The constituent corporations to the merger are Epitope, Inc., an
Oregon corporation, and OraSure Technologies, Inc., a Delaware corporation.
2. Epitope, Inc. and OraSure Technologies, Inc. have entered into an
Agreement and Plan of Merger, dated as of May 6, 2000 (the "Merger Agreement"),
which has been approved, adopted, certified, executed and acknowledged by
Epitope, Inc. and OraSure Technologies, Inc. in accordance with Section 252(c)
of the Delaware General Corporation Law.
3. The surviving corporation is OraSure Technologies, Inc.
4. The Certificate of Incorporation, in the form set forth as Exhibit A
hereto, shall be its certificate of incorporation.
5. The executed Merger Agreement is on file at the office of the
surviving corporation located at ▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇.
6. A copy of the Merger Agreement will be furnished by the surviving
corporation, on request and without cost, to any stockholder of any constituent
corporation.
7. The authorized capital stock of Epitope, Inc. consists of 30,000,000
shares of common stock, no par value per share and 1,000,000 shares of preferred
stock, no par value per share.
IN WITNESS WHEREOF, this Certificate of Merger has been executed on
behalf of the surviving corporation by its authorized officer as of August ---,
2000.
OraSure Technologies, Inc.,
a Delaware corporation
By: --------------------------------
Name: -------------------------
Title: ------------------------
Attest:
--------------------------------------
EXHIBIT F
CERTIFICATE OF INCORPORATION
OF
▇▇▇▇▇▇ MERGER SUBSIDIARY, INC.
ARTICLE I
The name of this Corporation is: ▇▇▇▇▇▇ Merger Subsidiary, Inc.
ARTICLE II
The registered office of the Corporation in the State of Delaware is
located at Corporation Trust Center, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. The Registered Agent at such address is The Corporation
Trust Company.
ARTICLE III
The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware.
ARTICLE IV
A. The total number of shares of capital stock which the Corporation
shall have authority to issue is 145,000,000, of which (i) 25,000,000 shares
shall be preferred stock, of the par value of $.000001 per share (hereinafter
referred to as "Preferred Stock"), and (ii) 120,000,000 shares shall be common
stock, of the par value of $.000001 per share (hereinafter referred to as
"Common Stock"). All shares of Common Stock and Preferred Stock shall be fully
paid up when issued and shall be non-assessable.
B. The preferences, limitations, and relative rights of the shares
of each class of capital stock of the Corporation shall be as follows:
1. Preferred Stock.
a. Division into Series. The Board of Directors shall
have authority to divide the Preferred Stock into as many series
as the Board of Directors shall from time to time determine, and
to issue the Preferred Stock in such series. The Board of
Directors shall determine the number of shares comprising each
series, which number may, unless otherwise provided by the Board
of Directors in creating such series, be increased or decreased
from time to time by action of the Board of Directors. Each
series shall be so designated as to distinguish the shares
thereof from the shares of all other series.
b. Authority of Board of Directors to Determine
Preferences, Limitations, and Relative Rights. The Board of
Directors shall have authority to determine, except as otherwise
prescribed in this Article IV or by law, the preferences,
limitations, and relative rights, including voting rights, of the
shares of Preferred Stock before the issuance of any shares of
such class or the
preferences, limitations, and relative rights, including voting
rights, of the shares of any series of Preferred Stock before the
issuance of any shares of such series. All shares of any such
series shall have preferences, limitations, and relative rights,
including voting rights, identical with those of other shares of
the same series and, except to the extent otherwise provided in
the description of such series, of those of other series of the
Preferred Stock.
2. Common Stock.
Subject to the preferences, limitations, and relative rights of
the Preferred Stock, or any series thereof, the holders of Common Stock
shall have all rights of stockholders, including, without limitation,
(i) unlimited voting rights on all corporate matters on the basis of one
vote per share, except as such voting rights may be limited or required
to be shared together with another class or series as provided by law,
and (ii) the right to receive the net assets of the corporation upon
dissolution. Shares of Common Stock may be issued from time to time as
the Board of Directors shall determine and on such terms and for such
consideration as shall be fixed by the Board of Directors.
3. Denial of Preemptive Rights.
No stockholder shall have any preemptive right to acquire
additional shares of this Corporation, whether of shares originally
authorized or other shares which may subsequently be authorized.
ARTICLE V
A. Any action required or permitted to be taken by the stockholders
of the Corporation must be effected at a duly called annual or special meeting
of stockholders, and may not be effected by any consent in writing by such
stockholders, unless such consent is unanimous.
B. Except as otherwise required by law and subject to the rights, if
any, of the holders of Preferred Stock or any series thereof, special meetings
of the stockholders of the Corporation may be called only by the Chairman of the
Board of Directors, the President of the Corporation or the Board of Directors
pursuant to a resolution approved by a majority of the whole Board of Directors.
ARTICLE VI
A. The Corporation shall indemnify and hold harmless, to the fullest
extent permitted by applicable law as it presently exists or may hereafter be
amended, any person who was or is made or is threatened to be made a party or is
otherwise involved in any action, suit or proceeding, whether civil, criminal,
administrative or investigative (a "Proceeding") by reason of the fact that he
or she, or a person for whom he or she is the legal representative, is or was a
director or officer of the Corporation or is or was serving at the request of
the Corporation as a director, officer, partner, trustee, employee or agent of
another corporation, partnership, limited liability company, joint venture,
trust, enterprise or nonprofit entity, including service with respect to
employee benefit plans (an "Indemnitee"), against all liability and loss
suffered and
2
expenses (including attorneys' fees) incurred by such person. The Corporation
shall be required to indemnify a person in connection with a proceeding (or part
thereof) initiated by such person only if the proceeding (or part thereof) was
authorized by the Board of Directors of the Corporation.
B. The right to indemnification conferred by this ARTICLE VI shall
be presumed to have been relied upon by the Indemnitee and shall be enforceable
as a contract right. The Corporation may enter into contracts to provide
individual Indemnitees with specific rights of indemnification to the fullest
extent permitted by applicable law and may create trust funds, grant security
interests, obtain letters of credit, purchase and maintain insurance or use
other means to ensure the payment of such amounts as may be necessary to effect
the rights provided in this ARTICLE VI or in any such contract. The right to
indemnification conferred by this ARTICLE VI shall be in addition to any other
similar rights to indemnification which may be provided by contract, the Bylaws
of the Corporation or applicable law.
C. Upon making a request for indemnification, the Indemnitee shall
be presumed to be entitled to indemnification under this ARTICLE VI and the
Corporation shall have the burden of proof to overcome that presumption in
reaching any contrary determination. Such indemnification shall include the
right to receive payment in advance of any expenses incurred by the Indemnitee
in connection with any Proceeding, consistent with the provisions of applicable
law.
ARTICLE VII
A. The number of Directors of this Corporation shall not be less
than three nor more than twelve as may be determined from time to time by the
affirmative vote of the majority of the Board of Directors. The Directors shall
be divided into three classes, designated Class I, Class II and Class III. Each
class shall consist, as nearly as may be possible, of one-third of the total
number of Directors constituting the entire Board of Directors. At the
organizational meeting of the sole incorporator of this Corporation, Class I
Directors shall be elected for a one-year term, Class II Directors shall be
elected for a two-year term and Class III Directors shall be elected for a
three-year term. At each annual meeting of stockholders, beginning in 2001,
successors to the class of Directors whose term expires at that annual meeting
shall be elected for a three-year term. A Director shall hold office until the
annual meeting for the year in which his or her term expires and until his or
her successor shall be elected and shall qualify, subject, however, to prior
death, resignation, retirement, disqualification or removal from office.
If the number of Directors is changed, any increase or decrease shall be
apportioned among the classes so as to maintain the number of Directors in each
class as nearly equal as possible, and any additional Director of any class
elected to fill a vacancy resulting from an increase in such class shall hold
office for a term that shall coincide with the remaining term of that class, but
in no case will a decrease in the number of Directors shorten the term of any
incumbent Director. Any Director elected to fill a vacancy not resulting from an
increase in the number of Directors shall have the same remaining term as that
of his or her predecessor. Any vacancy on the Board of Directors that results
from an increase in the number of Directors may be filled by the affirmative
vote of a majority of the Board of Directors then in office, and any other
vacancy occurring on the Board of Directors may be filled by the affirmative
vote of a
3
majority of the Directors then in office, although less than a quorum, or by a
sole remaining Director.
Notwithstanding the foregoing, whenever the holders of any one or more
classes or series of Preferred Stock issued by the Corporation shall have the
right, voting separately by class or series, to elect Directors at an annual or
special meeting of stockholders, the election, term of office, filling of
vacancies and other features of such directorships shall be governed by the
terms of this Certificate of Incorporation applicable thereto, and such
Directors so elected shall not be divided into classes pursuant to this ARTICLE
VII unless expressly provided by such terms.
B. There shall be no qualifications for election as a Director of
the Corporation; except that no person shall be eligible to stand for election
as a Director if such person has been convicted of a felony by a court of
competent jurisdiction where such conviction is no longer subject to direct
appeal.
C. Except to the extent prohibited by law, the Board of Directors
shall have the right (which, to the extent exercised, shall be exclusive) to
establish the rights, powers, duties, rules and procedures that from time to
time shall govern the Board of Directors and each of its members, including
without limitation the vote required for any action by the Board of Directors,
and that from time to time shall affect the Directors' power to manage the
business and affairs of the Corporation; and no Bylaw shall be adopted by
stockholders which shall impair or impede the implementation of the foregoing.
D. A Director may be removed only for cause, and only by the
affirmative vote of the holders of a majority of shares of stock entitled to
vote in an election of Directors. No Director so removed may be reinstated so
long as the cause for removal continues to exist. For purposes of this Section D
of this ARTICLE VII, "cause" shall be limited to: (i) conviction of a felony;
(ii) declaration of unsound mind by order of a court; (iii) gross dereliction of
duty; (iv) commission of a crime involving moral turpitude; or (v) commission of
an action which constitutes intentional misconduct or a knowing violation of law
if such action in either event results both in an improper substantial personal
benefit to the Director and a material injury to the Corporation.
E. Advance notice of nominations for the election of Directors
otherthan nominations made by the Board of Directors or a committee thereof, as
well as advance notice of any proposals or other matters to be presented at any
meeting of the Corporation's stockholders, shall be given to the Corporation in
the manner provided in the Bylaws.
ARTICLE VIII
In discharging the duties of their respective positions, the Board of
Directors and/or a committee or committees of the Board and/or individual
Directors (collectively or individually, as the case may be, a "Director" or
"Directors") when evaluating any Acquisition Proposal (as defined below) or
presenting any related matter to the stockholders of the Corporation, shall, in
connection with the exercise of such Directors' judgment in determining what is
in the best interests of the Corporation as a whole, be authorized to give due
consideration to such factors as the Directors determine to be relevant,
including without limitation:
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1. the consideration being offered in the Acquisition
Proposal in relation to such Directors' estimate of: (i) the current
value of the Corporation and/or its equity securities (or relevant
portion of such equity securities) and/or its assets (or relevant
portion of its assets) in a freely negotiated or independent
transaction, whether in the form of a merger, consolidation, sale of
assets or securities, reorganization, recapitalization, or any
combination of the foregoing; (ii) the current value of the Corporation
and/or its equity securities (or relevant portion of such equity
securities) and/or its assets (or relevant portion of its assets) if
orderly liquidated in a complete or partial liquidation; (iii) the
future value of the Corporation and/or its equity securities (or
relevant portion of such equity securities) and/or its assets (or
relevant portion of its assets) over a period of years if the
Corporation remained an independent entity, in each case discounted to
current value at a discount rate reflective of the relevant risk or
risks involved; (iv) premiums over market prices for the equity
securities of other corporations in similar transactions; (v) the future
prospects of the Corporation, the earnings potential and growth in asset
value of the Corporation over a period of years, the Corporation's
short-term and/or long-term plans and/or the likelihood of increasing or
enhancing any or all of the foregoing if such short-term and/or
long-term plans are achieved; (vi) other alternatives that may be
available to the Corporation for increasing the current or future value
of the Corporation and/or its equity securities (or relevant portion of
its equity securities) and/or its assets (or relevant portion of its
assets); and (vii) opinions or advice rendered by investment bankers,
appraisers and other valuation professionals retained by the Corporation
with respect to such of the matters set forth in (i)-(vi) above as may
be relevant;
2. then existing political, economic and other factors
bearing on security prices or asset values generally or the current
market value of the Corporation's securities or assets in particular;
3. whether the Acquisition Proposal might violate federal,
state or local laws;
4. social, legal and economic effects on any or all groups
affected, including, without limitation, stockholders, employees,
suppliers, customers, creditors and others having similar relationships
with the Corporation, and the communities in which the Corporation
conducts its businesses;
5. the financial condition and earning prospects of the
Person (as defined below) making the Acquisition Proposal including such
Person's ability to service its debts and other existing or likely
financial obligations;
6. the competence, experience, integrity, intent and conduct
(past, stated and potential) of the Person (as defined below) making the
Acquisition Proposal;
7. the short-term and long-term interests of the Corporation,
including without limitation benefits that may accrue to the Corporation
from its short-term and/or long-term plans and the possibility that
these interests may be best served by the continued independence of the
Corporation; and
5
8. all other pertinent factors.
In considering the foregoing factors, including any other pertinent
factors not listed above, such Directors shall not be required, in considering
the best interests of the Corporation, to regard any corporate interest or the
interest of any particular group affected by such action, including, without
limitation, the interests of stockholders of the Corporation, as a dominant or
controlling interest or factor.
For the purposes of this ARTICLE VIII, the term "Acquisition Proposal"
shall mean a proposal or offer of any Person (it being understood that a
"Person" shall mean any individual, firm, corporation or other entity): (a) to
make a tender offer, exchange offer or other comparable offer for any equity
security of the Corporation; (b) to effect a merger, consolidation,
reorganization or recapitalization with or involving another Person (as defined
above); (c) to effect any purchase, sale, lease, exchange, mortgage, pledge,
transfer or other disposition (in one transaction or a series of transactions)
of all or substantially all of the assets or equity securities of the
Corporation with or involving another Person (as defined above); (d) to effect a
complete or partial liquidation or dissolution of the Corporation; or (e) to
effect a "business combination" (as defined in Section 203(c)(3) of the General
Corporation Law of Delaware, as amended from time to time).
ARTICLE IX
No Director of the Corporation shall be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty by such Director as a Director; provided, however, that this ARTICLE IX
shall not eliminate or limit the liability of a Director to the extent provided
by applicable law: (i) for any breach of the Director's duty of loyalty to the
Corporation or its stockholders; (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law; (iii) under
Section 174 of the General Corporation Law of Delaware; or (iv) for any
transaction from which the Director derived an improper personal benefit. No
amendment to or repeal of this ARTICLE IX shall apply to or have any effect on
the liability or alleged liability of any Director of the Corporation for or
with respect to any acts or omissions of such Director occurring prior to such
amendment or repeal.
ARTICLE X
Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this Corporation under
the provisions of Section 291 of Title 8 of the Delaware Code (relating to the
General Corporation Law of the State of Delaware) or on the application of
trustees in dissolution or of any receiver or receivers appointed for this
Corporation under the provisions of Section 279 of Title 8 of the Delaware Code
(relating to the General Corporation Law of the State of Delaware) order a
meeting of the creditors or class of creditors, and/or of the stockholders or
class of stockholders of this Corporation, as the case may be, to be summoned in
such manner as such court directs. If a majority in number representing
three-fourths in value of the creditors or class of creditors,
6
and/or of the stockholders or class of stockholders of this Corporation, as the
case may be, agree to any compromise or arrangement and to any reorganization of
this Corporation as a consequence of such compromise or arrangement, such
compromise or arrangement and such reorganization shall, if sanctioned by the
court to which such application has been made, be binding on all the creditors
or class of creditors, and/or on all the stockholders or class of stockholders,
of this Corporation, as the case may be, and also on this Corporation.
ARTICLE XI
A. The original Bylaws of this Corporation shall be adopted in any
manner provided by law.
B. In furtherance, and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized to make, adopt, alter,
amend or repeal the Bylaws of the Corporation by the vote of not less than a
majority of the whole Board of Directors.
C. Notwithstanding any other provisions in this Certificate of
Incorporation or the Bylaws of the Corporation (and notwithstanding the fact
that some lesser percentage may be specified by law), the stockholders of the
Corporation shall also have the power, to the extent such power is at the time
in question conferred on them by applicable law, to make, adopt, alter, amend or
repeal the Bylaws of the Corporation only upon the affirmative vote of
two-thirds (66.6%) or more of the combined voting power of the then outstanding
shares of stock of all classes and series of the Corporation entitled to vote
generally in the election of directors ("Voting Stock"), voting together as a
single class.
ARTICLE XII
A. In addition to any requirements of any other provisions of this
Certificate of Incorporation (and notwithstanding the fact that a lesser
percentage may be specified by law or this Certificate of Incorporation), the
affirmative vote, at an annual or special meeting of the stockholders, of the
holders of two-thirds (66.6%) or more of the combined voting power of the then
outstanding shares of Voting Stock (as defined in Section C of ARTICLE XI),
voting together as a single class, shall be required to amend, alter or repeal,
or adopt any provision inconsistent with, ARTICLES V, VII, VIII and XI.
B. In addition to any requirements of any other provisions of this
Certificate of Incorporation (and notwithstanding the fact that a lesser
percentage may be specified by law or this Certificate of Incorporation), the
affirmative vote, at an annual or special meeting of the stockholders, of the
holders of two-thirds (66.6%) or more of the combined voting power of the then
outstanding shares of Voting Stock voting together as a single class shall be
required to amend, alter or repeal, or adopt any provision in this Certificate
of Incorporation inconsistent with the Bylaws of the Corporation.
C. In addition to any requirements of any other provisions of this
Certificate of Incorporation (and notwithstanding the fact that a lesser
percentage may be specified by law or this Certificate of Incorporation), none
of Sections A or B of this ARTICLE XII may be amended, altered or repealed, nor
may any provision inconsistent therewith be adopted, unless the respective
percentage or more of the combined voting power specified therein of the
7
outstanding shares of Voting Stock, voting together as a single class, votes in
favor thereof, nor may this Section C of this ARTICLE XII be amended, altered or
repealed, nor may any provision inconsistent herewith be adopted unless the
holders of two-thirds (66.6%) or more of the combined voting power of the then
outstanding shares of Voting Stock, voting together as a single class, vote in
favor thereof.
IN WITNESS WHEREOF, this Certificate of Incorporation has been executed
on behalf of the Corporation by its Incorporator as of May 5, 2000, and each of
them does hereby affirm and acknowledge that this Certificate of Incorporation
is the act and deed of the Corporation and that the facts stated herein are
true.
------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, Incorporator
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
EXHIBIT G
BYLAWS
OF
▇▇▇▇▇▇ MERGER SUBSIDIARY, INC.
ARTICLE I
NAME AND LOCATION
SECTION 1. Name. The name of the Corporation shall be the name set forth
in the Certificate of Incorporation.
SECTION 2. Principal Office. The principal office of the Corporation is
located at ▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇.
SECTION 3. Additional Offices. Other offices for the transaction of
business of the Corporation may be located at such place or places as the Board
of Directors may from time to time determine.
ARTICLE II
CAPITAL STOCK
SECTION 1. Stock Certificates. All certificates of stock shall be signed
by the Chairman of the Board of Directors, the President or a Vice President and
the Secretary or an Assistant Secretary, and sealed with the corporate seal.
SECTION 2. Stock Transfers. Transfers of stock shall be made on the
books of the Corporation upon the surrender of the old certificate properly
endorsed, and said old certificate shall be canceled before a new certificate is
issued.
SECTION 3. Lost or Destroyed Stock Certificates. A new certificate of
stock may be issued in the place of any certificate theretofore issued, alleged
to have been lost or destroyed, and the Corporation may, in its discretion,
require the owner of the lost or destroyed certificate, or its legal
representative, to give a bond sufficient to indemnify the Corporation against
any claim that may be made against it on account of the alleged loss of any
certificate.
SECTION 4. Preemptive Rights Denied. No holder of shares of any class of
the Corporation, or holder of any securities or obligations convertible into
shares of any class of the Corporation, shall have any preemptive right
whatsoever to subscribe for, purchase or otherwise acquire shares of the
Corporation of any class, whether now or hereafter authorized; provided,
however, that nothing in this SECTION 4 shall prohibit the Corporation from
granting, contractually or otherwise, to any such holder, the right to purchase
additional securities of the Corporation.
ARTICLE III
STOCKHOLDERS' MEETINGS
SECTION 1. Annual Meeting. The annual meeting of the stockholders of the
Corporation shall be held, either within or without the State of Delaware, on
such date and at
such time as may from time to time be determined by the Board of Directors. At
such meeting the stockholders shall elect directors in the manner provided in
the Certificate of Incorporation of the Corporation. The stockholders may
transact such other business at such annual meetings as may properly come before
the meeting.
SECTION 2. Special Meeting. A special meeting of the holders of any one
or more classes of the capital stock of the Corporation entitled to vote as a
class or classes with respect to any matter, as required by law or as provided
by the Certificate of Incorporation, may be called at any time and place, either
within or without the state of Delaware, only by the Chairman of the Board, the
President or the Board of Directors.
SECTION 3. Notice. Notice of the time and place of all annual meetings
and of the time, place and purpose of all special meetings shall be mailed by
the Secretary to each stockholder at his or her last known post office address
as it appears on the records of the Corporation at least ten (10) days before
the date set for such meeting.
SECTION 4. Nomination of Directors. Nomination of persons for election
to the Board of Directors of the Corporation at a meeting of the stockholders
may be made by or at the direction of the Board of Directors or may be made at a
meeting of stockholders by any stockholder of the Corporation entitled to vote
for the election of Directors at the meeting in compliance with the notice
procedures set forth in this SECTION 4 of ARTICLE III. Such nomination, other
than those made by or at the direction of the Board, shall be made pursuant to
timely notice in writing to the Secretary of the Corporation. To be timely, a
stockholder's notice shall be delivered to or mailed and received at the
principal executive offices of the Corporation not less than fifty (50) days nor
more than seventy-five (75) days prior to the meeting; provided, however, that
in the event that less than sixty-five (65) days' notice or prior public
disclosure of the date of the meeting is given or made to stockholders, notice
by the stockholder to be timely must be so received no later than the close of
business on the fifteenth (15th) day following the day on which such notice of
the date of the meeting was mailed or such public disclosure was made, whichever
first occurs. Such stockholder's notice to the Secretary shall set forth: (a) as
to each person whom the stockholder proposes to nominate for election or
re-election as a Director, (i) the name, age, business address and residence
address of the person, (ii) the principal occupation or employment of the
person, (iii) the class and number of shares of capital stock of the Corporation
which are beneficially owned by the person, and (iv) any other information
relating to the person that is required to be disclosed in solicitations for
proxies for election of Directors pursuant to Regulation 14A under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"); and (b) as to
the stockholder giving the notice; (i) the name and record address of the
stockholder; and (ii) the class and number of shares of capital stock of the
Corporation which are beneficially owned by the stockholder. The Corporation may
require any proposed nominee to furnish such other information as may reasonably
be required by the Corporation to determine the eligibility of such proposed
nominee to serve as a Director of the Corporation. No person shall be eligible
for election as a Director of the Corporation at a meeting of the stockholders
unless such person has been nominated in accordance with the procedures set
forth herein. If the facts warrant, the Chairman of the meeting shall determine
and declare to the meeting that a nomination does not satisfy the requirements
set forth in the preceding sentence and the defective nomination shall be
disregarded. Nothing in this SECTION 4
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shall be construed to affect the requirements for proxy statements of the
Corporation under Regulation 14A of the Exchange Act.
SECTION 5. Presentation of Business at Stockholders' Meetings. At any
meeting of the stockholders, only such business shall be conducted as shall have
been properly brought before the meeting. To be properly brought before a
meeting, business must be: (a) specified in the notice of meeting (or any
supplement thereto) given by or at the direction of the Board of Directors, (b)
otherwise properly brought before the meeting by or at the direction of the
Board of Directors, or (c) otherwise properly brought before the meeting by a
stockholder. For business to be properly brought before a meeting by a
stockholder, the stockholder must have given timely notice thereof in writing to
the Secretary of the Corporation. To be timely, a stockholder's notice shall be
delivered to or mailed and received at the principal executive offices of the
Corporation not less than fifty (50) days nor more than seventy-five (75) days
prior to the meeting; provided, however, that in the event that less than
sixty-five (65) days' notice or prior public disclosure of the date of the
meeting is given or made to stockholders, notice by the stockholder to be timely
must be so received no later than the close of business on the fifteenth (15th)
day following the day on which such notice of the date of the meeting was mailed
or such public disclosure was made, whichever first occurs. Such stockholder's
notice to the Secretary shall set forth: (a) as to each matter the stockholder
proposes to bring before the meeting, a brief description of the business
desired to be brought before the meeting and the reasons for conducting such
business at the meeting, and (b) as to the stockholder giving the notice, (i)
the name and record address of the stockholder, (ii) the class and number of
shares of capital stock of the Corporation which are beneficially owned by the
stockholder and (iii) any material interest of the stockholder in such business.
No business shall be conducted at a meeting of the stockholders unless proposed
in accordance with the procedures set forth herein. The Chairman of the meeting
shall, if the facts warrant, determine and declare to the meeting that business
was not properly brought before the meeting in accordance with the foregoing
procedure and such business shall not be transacted. To the extent this SECTION
5 shall be deemed by the Board of Directors or the Securities and Exchange
Commission, or finally adjudged by a court of competent jurisdiction, to be
inconsistent with the right of stockholders to request inclusion of a proposal
in the Corporation's proxy statement pursuant to Rule 14a-8 promulgated under
the Exchange Act, such rule shall prevail.
SECTION 6. Presiding Officials. The Chairman of the Board of Directors,
or in his or her absence or inability to act, the President, or in his or her
absence or inability to act, any Vice President, shall preside at all
stockholders' meetings.
SECTION 7. Voting. Except as otherwise provided in the Certificate of
Incorporation of the Corporation, at each meeting of the stockholders, each
stockholder shall be entitled to cast one vote for each share of voting stock
standing of record on the books of the Corporation, in his or her name, and may
cast such vote either in person or by proxy. All proxies shall be in writing and
filed with the Secretary of the meeting.
SECTION 8. Quorum; Adjournment. At any meeting held for the purpose of
electing directors, the presence in person or by proxy of the holders of at
least a majority of the then outstanding voting shares of the Corporation shall
be required and be sufficient to constitute a quorum for the election of
directors. At a meeting held for any purpose other than the election of
3
directors, shares representing a majority of the votes entitled to be cast on
such matter, present in person or represented by proxy, shall constitute a
quorum. In the absence of the required quorum at any meeting of stockholders, a
majority of such holders present in person or by proxy shall have the power to
adjourn the meeting, from time to time, without notice (except as required by
law) other than an announcement at the meeting, until a quorum shall be present.
SECTION 9. Annual Statement of Business. At each of the annual
stockholders' meetings, one of the executive officers of the Corporation shall
submit a statement of the business done during the preceding year, together with
a report of the general financial condition of the Corporation.
ARTICLE IV
DIRECTORS
SECTION 1. Powers of the Board. The business and property of the
Corporation shall be managed by a Board consisting of such number of Directors
as is determined from time to time in accordance with the provisions of the
Certificate of Incorporation of the Corporation. The Board of Directors may
elect one of their number to act as Chairman of the Board.
SECTION 2. Qualification. Each Director upon his or her election shall
qualify by filing his or her written acceptance with the Secretary or an
Assistant Secretary and by fulfilling any prerequisite to qualification that may
be set forth in the Certificate of Incorporation of the Corporation.
SECTION 3. Annual Meetings. The annual meeting of the Board of Directors
shall be held immediately after the adjournment of each annual meeting of the
stockholders and in the event a quorum is not present, said meeting shall be
held within ten (10) days after adjournment upon proper notice by the Chairman
of the Board of Directors, the President or a Vice President.
SECTION 4. Special Meetings. Special meetings of the Board of Directors
may be called at any time or place by the Chairman of the Board or by the
President, and in the absence or inability of either of them to act, by any Vice
President, and may also be called by any two members of the Board of Directors.
By unanimous consent of the Directors, special meetings of the Board may be held
without notice, at any time and place.
SECTION 5. Notice; Telephonic Attendance; Unanimous Consent. Notice of
all regular and special meetings of the Board of Directors or the Executive
Committee or any committee established pursuant to this ARTICLE IV (an "Other
Committee") shall be sent to each Director or member of such committee, as the
case may be, by the Secretary or any Assistant Secretary, by a means reasonably
calculated to be received at least seven (7) days prior to the time fixed for
such meeting, or notice of special meetings of the Board of Directors or the
Executive Committee or any Other Committee may be given by telephone, telegraph,
telefax or telex to each Director or member of such committee, as the case may
be, at least twenty-four (24) hours prior to the time fixed for such meeting, or
on such shorter notice as the person or persons calling the meeting may
reasonably deem necessary or appropriate in the circumstances. To the extent
provided in the notice of the meeting or as otherwise determined by the Chairman
of the Board or the Board of Directors, Directors may participate in any regular
or special meeting by means
4
of conference telephone, videoconference or similar communications equipment
which allows all persons participating in such meeting to hear each other, and
participation in such meeting by means of such a device shall constitute
presence in person at such meeting. Attendance of a director at any meeting
shall constitute a waiver of notice of such meeting except where a director
attends a meeting for the express purpose of objecting to the transaction of any
business because the meeting is not lawfully called or convened.
If all the directors shall severally or collectively consent in writing
to any action to be taken by the directors, such consents shall have the same
force and effect as a unanimous vote of the directors at a meeting duly held.
The Secretary shall file such consents with the minutes of the meetings of the
Board of Directors.
SECTION 6. Quorum; Adjournment. Except as otherwise provided in the
Certificate of Incorporation of the Corporation, a quorum for the transaction of
business at any meeting of the directors shall consist of a majority of the
members of the Board, but the directors present, although less than a quorum,
shall have the power to adjourn the meeting from time to time or to some future
date.
SECTION 7. Election of Officers. The directors shall elect the officers
of the Corporation and fix their salaries and other compensation. Such election
shall be made at the Directors' meeting following each annual stockholders'
meeting.
SECTION 8. Advisers to the Board of Directors. The Board of Directors
from time to time, as they may deem proper, shall have authority to appoint a
general manager, counsel or attorneys and other employees for such length of
time and upon such terms and conditions and at such salaries and other
compensation as they may deem necessary and/or advisable.
SECTION 9. Compensation; Reimbursement of Expenses. The members of the
Board of Directors shall receive compensation for their services in such amount
as may be reasonable and proper and consistent with the time and service
rendered. The members of the Board of Directors shall receive the reasonable
expenses necessarily incurred in the attendance of meetings and in the
transaction of business for the Corporation.
SECTION 10. Indemnification; Insurance.
(a) Indemnification.
(1) Actions Other than Those by or in the Right of the
Corporation. To the extent permitted by Delaware law from time to time
in effect and subject to the provisions of paragraph (c) of this Section
10, the Corporation shall indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the
Corporation) by reason of the fact that such person is or was a
director, officer, employee or agent of the Corporation, or is or was
serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably
incurred by such person in connection with
5
such action, suit or proceeding if such person acted in good faith and
in a manner such person reasonably believed to be in or not opposed to
the best interests of the Corporation (or such other corporation or
organization), and, with respect to any criminal action or proceeding,
had no reasonable cause to believe such person's conduct was unlawful.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent shall not, of itself, create a presumption that the person
did not act in good faith and in a manner which such person reasonably
believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that such person's conduct was unlawful.
(2) Action by or in the Right of the Corporation. To the extent
permitted by Delaware law from time to time in effect and subject to the
provisions of paragraph (c) of this Section 10, the Corporation shall
indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action or suit by or in
the right of the Corporation to procure a judgment in its favor by
reason of the fact that such person is or was a director, officer,
employee or agent of the Corporation or is or was serving at the request
of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees) actually and reasonably
incurred by such person in connection with the defense or settlement of
such action or suit if such person acted in good faith and in a manner
such person reasonably believed to be in or not opposed to the best
interests of the Corporation (or such other corporation or organization)
and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged
to be liable to the Corporation (or such other corporation or
organization) unless and only to the extent that the court in which such
action or suit was brought shall determine upon application that,
despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled
to indemnity for such expenses which such court shall deem proper.
(3) Successful Defense of Action. Notwithstanding, and without
limitation of, any other provision of this SECTION 10, to the extent
that a director, officer, employee or agent of the Corporation has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in sub-paragraph (1) or (2) of this paragraph
(a), or in defense of any claim, issue or matter therein, such director,
officer, employee or agent shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by such
person in connection therewith.
(4) Determination Required. Any indemnification under
sub-paragraph (1) or (2) of this paragraph (a) (unless ordered by a
court) shall be made by the Corporation only as authorized in the
specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because such
director, officer, employee or agent has met the applicable standard of
conduct set forth in said sub-paragraph. Such determination shall be
made: (i) by the Board of Directors by a majority vote of a quorum
consisting of directors who were not parties to the particular action,
suit or proceeding, or (ii) if such a quorum is not obtainable, or, even
if
6
obtainable, a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion, or (iii) by the
stockholders.
(b) Insurance. The Corporation may, when authorized by the Board of
Directors, purchase and maintain insurance on behalf of any person who is or was
a director, officer, employee or agent of the Corporation, or is or was serving
at the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against such person and incurred by such person
in any such capacity, or arising out of such person's status as such, whether or
not the Corporation would have the power to indemnify him against such liability
under the provisions of this SECTION 10. The risks insured under any insurance
policies purchased and maintained on behalf of any person as aforesaid or on
behalf of the Corporation shall not be limited in any way by the terms of this
SECTION 10 and to the extent compatible with the provisions of such policies,
the risks insured shall extend to the fullest extent permitted by law, common or
statutory.
(c) Advancement of Expenses; Nonexclusivity; Duration. Expenses
(including attorneys' fees) incurred by an officer or director in defending any
civil, criminal, administrative or investigative action, suit or proceeding
shall be paid by the Corporation in advance of the final disposition of such
action, suit or proceeding upon receipt of an undertaking by or on behalf of
such officer or director to repay such amount if it shall ultimately be
determined that such person is not entitled to be indemnified by the Corporation
as authorized in this SECTION 10. Such expenses (including attorneys' fees)
incurred by other employees and agents may be so paid by the Corporation upon
such terms and conditions, if any, as the Board of Directors deems appropriate.
The indemnifications, advancement of expenses and rights provided by, or granted
pursuant to, this SECTION 10 shall not be deemed exclusive of any other
indemnifications, advancement of expenses, rights or limitations of liability to
which any person seeking indemnification or advancement of expenses may be
entitled under any Bylaw, agreement, vote of stockholders or disinterested
directors, or otherwise, either as to action in such person's official capacity
or as to action in another capacity while holding office, and they shall
continue although such person has ceased to be a director, officer, employee or
agent and shall inure to the benefit of such person's heirs, executors and
administrators. The authorization to purchase and maintain insurance set forth
in paragraph (b) shall likewise not be deemed exclusive.
SECTION 11. Committees.
(a) The Board of Directors may, by resolution or resolutions adopted by
a majority of the whole Board, designate two or more directors of the
Corporation to constitute one or more committees in addition to those committees
required by SECTIONS 12, 13 and 14 of this ARTICLE IV. Each such committee, to
the extent provided in such resolution or resolutions, shall have and may
exercise all of the authority of the Board in the management of the Corporation;
provided, however, that the designation of each such committee and the
delegation thereto of authority shall not operate to relieve the Board, or any
member thereof, of any responsibility imposed upon it or such member by law.
(b) Notwithstanding any other provision of these Bylaws, no committee of
the Board of Directors shall have the power or authority of the Board with
respect to (i) amending the Certificate of Incorporation, (ii) approving or
recommending to stockholders any type or form of
7
"business combination" (as defined in Section 203 of the General Corporation Law
of Delaware as in effect on January 1, 1996), (iii) approving or recommending to
the stockholders a dissolution of the Corporation or a revocation of a
dissolution, (iv) amending these Bylaws, (v) declaring a dividend or making any
other distribution to the stockholders, (vi) authorizing the issuance of stock
otherwise than pursuant to the grant or exercise of a stock option under
employee stock options of the Corporation or in connection with a public
offering of securities registered under the Securities Act of 1933, as amended,
or (vii) appointing any member of any committee of the Board.
(c) Each such committee shall keep regular minutes of its proceedings,
which minutes shall be recorded in the minute book of the Corporation. The
Secretary or an Assistant Secretary of the Corporation may act as Secretary for
each such committee if the committee so requests.
SECTION 12. Executive Committee. The Chief Executive Officer of the
Corporation, together with no more than five additional Directors selected by
the Board shall constitute an Executive Committee of the Board of Directors. The
Executive Committee between regular meetings of the Board of Directors shall
manage the business and property of the Corporation and shall have the same
power and authority as the Board of Directors; provided, however, the Executive
Committee shall not act (other than to make a recommendation) in those cases
where it is provided by law or by the Certificate of Incorporation of the
Corporation that any vote or action in order to bind the Corporation shall be
taken by the Directors. Members of the Executive Committee may participate in
any meeting of the Executive Committee by means of conference telephone or
videoconference or similar communications equipment which allows all persons
participating in the meeting to hear each other, and participation in a meeting
by means of such a device shall constitute presence in person at such meeting.
The Executive Committee shall keep a record of its proceedings and may
hold meetings upon one (1) day's written notice or upon waiver of notice signed
by the members either before or after said Executive Committee meeting.
A majority of the Executive Committee shall constitute a quorum for the
transaction of business at any meeting for which notice has been given to all
members in accordance with ARTICLE IV, SECTION 5 hereof or for which notice has
been waived by all members.
The Executive Committee or any Other Committee may act by unanimous
written consent as provided in ARTICLE IV, SECTION 5.
SECTION 13. Audit Committee. The Board of Directors at the annual or any
regular or special meeting of the directors shall, by resolution adopted by a
majority of the whole Board, designate two or more directors to constitute an
Audit Committee and appoint one of the directors so designated as the chairman
of the Audit Committee. Membership on the Audit Committee shall be restricted to
those directors who are independent of the management of the Corporation and are
free from any relationship that, in the opinion of the Board, would interfere
with the exercise of independent judgment as a member of the committee.
Vacancies in the committee may be filled by the Board at any meeting thereof.
Each member of the committee shall hold office until such committee member's
successor has been duly elected and qualified, or
9
until such committee member's resignation or removal from the Audit Committee by
the Board, or until such committee member otherwise ceases to be a director. Any
member of the Audit Committee may be removed from the committee by resolution
adopted by a majority of the whole Board. The compensation, if any, of members
of the committee shall be established by resolution of the Board.
The Audit Committee shall be responsible for: recommending to the Board
the appointment or discharge of independent auditors; reviewing with the
management and the independent auditors the terms of engagement of independent
auditors, including the fees, scope and timing of the audit and any other
services rendered by the independent auditors; reviewing with the independent
auditors and management the Corporation's policies and procedures with respect
to internal auditing, accounting and financial controls; reviewing with the
management the independent statements, audit results and reports and the
recommendations made by any of the auditors with respect to changes in
accounting procedures and internal controls; reviewing the results of studies of
the Corporation's system of internal accounting controls; and performing any
other duties or functions deemed appropriate by the Board. The Audit Committee
shall have the powers and rights necessary or desirable to fulfill these
responsibilities, including the power and right to consult with legal counsel
and to rely upon the opinion of legal counsel. The Audit Committee is authorized
to communicate directly with the Corporation's financial officers and employees,
internal auditors and independent auditors as it deems desirable and to have the
internal auditors or independent auditors perform any additional procedures as
it deems appropriate.
All actions of the Audit Committee shall be reported to the Board at the
next meeting of the Board. The minute books of the Audit Committee shall at all
times be open to the inspection of any director.
The Audit Committee shall meet at the call of its chairman or of any two
members of the Audit Committee (or if there shall be only one other member, then
at the call of that member). A majority of the Audit Committee shall constitute
a quorum for the transaction of business (or if there shall only be two members,
then both must be present), and the act of a majority of those present at any
meeting at which a quorum is present (or if there shall be only two members,
then they must act unanimously) shall constitute the act of the Audit Committee.
SECTION 14. Compensation Committee. The Board of Directors at the annual
or any regular or special meeting shall, by resolution adopted by a majority of
the whole Board, designate two or more directors to constitute a Compensation
Committee. Membership on the Compensation Committee shall be restricted to
disinterested persons which for this purpose shall mean any director who, during
the time such director is a member of the Compensation Committee is not
eligible, and has not at any time within one year prior thereto been eligible,
for selection to participate (other than in a manner as to which the
Compensation Committee has no discretion) in any of the compensation plans
administered by the Compensation Committee. Vacancies in the committee may be
filled by the Board at any meeting. Each member of the committee shall hold
office until such committee member's successor has been duly elected and
qualified, or until such committee member's resignation or removal from the
Compensation Committee by the Board, or until such committee member otherwise
ceases to be a director or a disinterested person. Any member of the
Compensation Committee may be removed by
9
resolution adopted by a majority of the whole Board. The compensation, if any,
of the members of the Compensation Committee shall be established by resolution
of the Board.
The Compensation Committee shall, from time to time, recommend to the
Board the compensation and benefits of the executive officers of the
Corporation. The Compensation Committee shall have the power and authority
vested in the Board by any benefit plan of the Corporation. The Compensation
Committee shall also make recommendations to the Board with regard to the
compensation of the Board and its committees, with the exception of the
Compensation Committee.
All actions of the Compensation Committee shall be reported to the Board
at the next meeting of the Board. The minute books of the Compensation Committee
shall at all times be open to the inspection of any director.
The Compensation Committee shall meet at the call of the chairman of the
Compensation Committee or of any two members of the Compensation Committee (or
if there shall be only one other member, then at the call of that member). A
majority of the Compensation Committee shall constitute a quorum for the
transaction of business (or if there shall be only two members, then both must
be present), and the act of a majority of those present at any meeting at which
a quorum is present (or if there shall be only two members, then they must act
unanimously) shall be the act of the Compensation Committee.
SECTION 15. Alternate Committee Members. The Board of Directors, by
resolution adopted by a majority of the whole Board, may designate one or more
additional directors as alternate members of any committee to replace any absent
or disqualified member at any meeting of that committee, and at any time may
change the membership of any committee or amend or rescind the resolution
designating the committee. In the absence or disqualification of a member or
alternate member of a committee, the member or members thereof present at any
meeting and not disqualified from voting, whether or not the member or members
constitute a quorum, may unanimously appoint another director to act at the
meeting in the place of any such absent or disqualified member, provided that
the director so appointed meets any qualifications stated in these Bylaws or the
resolution designating the committee or any amendment thereto.
SECTION 16. Committee Procedures. Unless otherwise provided in these
Bylaws or in the resolution designating any committee, any committee may fix its
rules or procedures, fix the time and place of its meetings and specify what
notice of meetings, if any, shall be given.
ARTICLE V
OFFICERS
SECTION 1. Designations. The officers of this Corporation shall be a
Chairman of the Board of Directors, a President, as many Vice Presidents as the
Board of Directors may from time to time deem advisable and one or more of which
may be designated Executive Vice President or Senior Vice President, a
Secretary, a Treasurer, and such Assistant Secretaries and Assistant Treasurers
as the Board of Directors may from time to time deem advisable, and such other
officers as the Board of Directors may from time to time deem advisable and
designate. The Chairman of the Board of Directors shall be a member of and be
elected by the Board of
10
Directors. All other officers shall be elected by the Board of Directors. All
officers shall hold office until their respective successors are elected and
shall have qualified. Any two offices may be held by one person except the
office of President and Vice President.
SECTION 2. Chairman of the Board. The Chairman of the Board of Directors
shall preside at all meetings of the Directors and stockholders at which he or
she is present and shall have such other duties, power and authority as may be
prescribed by the Board of Directors from time to time or elsewhere in these
Bylaws. The Board of Directors may designate the Chairman of the Board as the
Chief Executive Officer of the Corporation with all of the powers otherwise
conferred upon the President of the Corporation under these Bylaws, or it may,
from time to time, divide the responsibilities, duties and authority for the
general control and management of the Corporation's business and affairs between
the Chairman of the Board and the President.
SECTION 3. President and Chief Executive Officer. Unless the Board of
Directors otherwise provides, the President shall be the Chief Executive Officer
of the Corporation with such general executive powers and duties of supervision
and management as are usually vested in such office and shall perform such other
duties as are authorized by the Board of Directors. The Chairman of the Board or
the President shall sign contracts, certificates and other instruments of the
Corporation as authorized by the Board of Directors. If the Chairman of the
Board is designated as the Chief Executive Officer of the Corporation, the
President shall perform such duties as may be delegated to him or her by the
Board of Directors and as are conferred by law exclusively upon such office.
Unless the Board of Directors otherwise provides, the President, or any person
designated in writing by the President, shall have full power and authority on
behalf of the Corporation to: (i) attend and to vote or take action at any
meeting of the holders of securities of corporations in which the Corporation
may hold securities, and at such meetings shall possess and may exercise any and
all rights and powers incident to being a holder of such securities, and (ii)
execute and deliver waivers of notice and proxies for and in the name of this
Corporation with respect to securities of any such corporation held by this
Corporation.
SECTION 4. Vice Presidents. A Vice President shall have the right and
power to perform all duties and exercise all authority of the President, in case
of the absence of the President or upon vacancy in the office of President or
delegation by the Board of Directors, until the Board of Directors otherwise
provides, and shall have all power and authority usually enjoyed by a person
holding the office of Vice President.
SECTION 5. Secretary and Assistant Secretaries. The Secretary shall
issue notices of all directors' and stockholders' meetings, and shall attend and
keep the minutes of the same; shall have charge of all corporate books, records
and papers; shall be custodian of the corporate seal; shall attest with his or
her signature, which may be a facsimile signature if authorized by the Board of
Directors, and impress with the corporate seal, all stock certificates and
written contracts of the Corporation; and shall perform all other duties as are
incident to his or her office. Any Assistant Secretary, in the absence or
inability of the Secretary, shall perform all duties of the Secretary and such
other duties as may be required.
SECTION 6. Treasurer and Assistant Treasurers. The Treasurer shall have
custody of all money and securities of the Corporation and shall give bond in
such sum and with such
11
sureties as the directors may specify, conditioned upon the faithful performance
of the duties of his or her office. He or she shall keep regular books of
account and shall submit them, together with all of his or her records and other
papers, to the directors for their examination and approval annually; and
quarterly or as and when directed by the Board of Directors, he or she shall
submit to each director a statement of the condition of the business and
accounts of the Corporation; and shall perform all such other duties as are
incident to his or her office. An Assistant Treasurer, in the absence or
inability of the Treasurer, shall perform all the duties of the Treasurer and
such other duties as may be required.
SECTION 7. Bonding. Any officer or employee of the Corporation shall
give such bond for the faithful performance of his or her duties in such sum, as
and when the Board of Directors may direct.
ARTICLE VI
DIVIDENDS
SECTION 1. Dividends shall be paid out of the net income or earned
surplus of the Corporation, determined after making proper provision for
required sinking fund deposits for debt obligations and proper provisions for
working capital and such reserves as may be required by good and generally
accepted accounting practice, when declared from time to time by resolution of
the Board of Directors. No such dividends shall be declared or paid which will
impair the capital of the Corporation.
ARTICLE VII
AMENDMENTS
SECTION 1. Except as otherwise provided in the Certificate of
Incorporation of the Corporation, these Bylaws may be amended, altered or
repealed by the affirmative vote of a majority of the Board of Directors,
subject to the power of stockholders to amend, alter or repeal the Bylaws, or as
otherwise may from time to time be authorized by the laws of the State of
Delaware.
ARTICLE VIII
CORPORATE SEAL
SECTION 1. The corporate seal of this Corporation shall have inscribed
thereon the name of the Corporation and its state of incorporation.
----------------------------------------
----------------------, Secretary
EXHIBIT H
PRINCIPAL OFFICERS OF SURVIVING CORPORATION
Name Title
---- -----
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Chief Executive Officer
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ President and Chief Operating Officer
R. ▇▇▇ ▇▇▇▇▇▇▇▇ Executive Vice President and Chief
Scientific Officer
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Ph.D. Senior Vice President of Research and
Development, Infectious Disease
▇▇▇▇▇▇▇ ▇. Block Senior Vice President of Sales
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Vice President of Marketing
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Vice President and Chief Financial
Officer
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Vice President of Product Support and
Development
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Vice President of Operations
▇▇▇▇▇▇ ▇▇▇▇▇▇ Vice President of Regulatory Affairs
and Quality Assurance
EXHIBIT I
[To be typed on letterhead of Epitope, Inc.]
D R A F T
[Closing Date]
▇▇▇▇▇▇▇, Mag & Fizzell, P.C.
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
RE: Tax Opinion in Connection with Mergers of STC
Technologies, Inc. and Epitope, Inc. with and into
OraSure Technologies, Inc.
Ladies and Gentlemen:
This letter is provided to you in connection with the tax opinion
you are rendering with respect to the proposed merger (the "▇▇▇ Merger") of STC
Technologies, Inc. ("STC") with and into OraSure Technologies, Inc. ("Merger
Sub") and the proposed merger (the "▇▇▇▇▇▇ Merger") of Epitope, Inc. ("Epitope")
with and into Merger Sub pursuant to the Agreement and Plan of Merger dated as
of May 6, 2000 among Epitope, Merger Sub (hereinafter referred to as "Surviving
Corporation") and STC (the "Agreement"). Recognizing that you will rely on this
letter and the representations herein in rendering your tax opinion, we hereby
make and certify the following representations:
1. The facts concerning the ▇▇▇ Merger and the ▇▇▇▇▇▇ Merger
described in the Proxy Statement included as part of the
Registration Statement on Form S-4 are true, correct and
complete in all material respects as of the date hereof.
2. The ▇▇▇ Merger and the ▇▇▇▇▇▇ Merger will be consummated in
compliance with the terms of the Agreement and will be
statutory mergers in accordance with the applicable laws of
the State of Delaware and the State of Oregon.
3. None of the terms and conditions of the Agreement have been
waived or modified, and Surviving Corporation and Epitope
have no plan or intention to waive or modify any such term or
condition.
4. Valid business purposes exist for both the ▇▇▇ Merger and the
▇▇▇▇▇▇ Merger.
5. The fair market value of the Surviving Corporation Common
Stock, par value $0.000001 per share ("Surviving Corporation
Common Stock"), and other consideration received by each STC
shareholder
will be approximately equal to the fair market value of the
STC Common Stock, par value $0.000001 per share ("STC Common
Stock"), surrendered in the exchange, and the fair market
value of the Surviving Corporation Common Stock and other
consideration received by each Epitope shareholder will be
approximately equal to the fair market value of the Epitope
Common Stock, no par value per share ("Epitope Common
Stock"), surrendered in the exchange.
6. Neither Surviving Corporation nor a person related to
Surviving Corporation within the meaning of Treasury
Regulation ss. 1.368-1(e)(3) has acquired or has any plan or
intention to acquire any STC Common Stock prior to and in
connection with the ▇▇▇ Merger or any Epitope Common Stock
prior to and in connection with the ▇▇▇▇▇▇ Merger.
7. Surviving Corporation has no plan or intention to reacquire
any of its stock issued in the ▇▇▇ Merger or the ▇▇▇▇▇▇
Merger.
8. A person related to Surviving Corporation within the meaning
of Treasury Regulation ss. 1.368-1(e)(3) has no plan or
intention to acquire any Surviving Corporation Common Stock
issued in the ▇▇▇ Merger or the ▇▇▇▇▇▇ Merger.
9. Surviving Corporation has no plan or intention to sell or
otherwise dispose of any of the assets of STC or Epitope
acquired in the transaction, except for dispositions made in
the ordinary course of business or transfers described in
section 368(a)(2)(C) of the Internal Revenue Code.
10. The liabilities of Epitope assumed by Surviving Corporation
and the liabilities to which the transferred assets of
Epitope are subject were incurred by Epitope in the ordinary
course of its business.
11. Following the ▇▇▇ Merger and the ▇▇▇▇▇▇ Merger, Surviving
Corporation will continue the historic businesses of STC and
Epitope or use a significant portion of STC and Epitope's
historic business assets in a business.
12. Surviving Corporation, STC, Epitope and the shareholders of
STC and Epitope will pay their respective expenses, if any,
incurred in connection with the ▇▇▇ Merger and the ▇▇▇▇▇▇
Merger.
13. There is no intercorporate indebtedness existing between
Surviving Corporation and STC or between Surviving
Corporation and Epitope that was issued, acquired, or will be
settled at a discount.
2
14. Neither Surviving Corporation nor Epitope are investment
companies as defined in section 368(a)(2)(F) of the Internal
Revenue Code.
15. Epitope is not under the jurisdiction of a court in a Title
11 or similar case within the meaning of section 368(a)(3)(A)
of the Internal Revenue Code.
16. The fair market value of the assets of STC to be transferred
to Surviving Corporation will equal or exceed the sum of the
liabilities assumed by Surviving Corporation, plus the amount
of liabilities, if any, to which the transferred assets are
subject, and the fair market value of the assets of Epitope
to be transferred to Surviving Corporation will equal or
exceed the sum of the liabilities assumed by Surviving
Corporation, plus the amount of liabilities, if any, to which
the transferred assets are subject.
17. None of the compensation received by any
shareholder-employees of STC or Epitope will be separate
consideration for, or allocable to, any of their shares of
STC Common Stock or Epitope Common Stock surrendered in the
exchanges, and the compensation paid to such
shareholder-employees will be for services actually rendered
and will be commensurate with amounts paid to third parties
bargaining at arms-length for similar services. None of the
Surviving Corporation Common Stock received in the ▇▇▇ Merger
or ▇▇▇▇▇▇ Merger by any shareholder-employees of STC or
Epitope will be separate consideration for, or allocable to,
any compensation owed to such employee.
18. The payment of cash in lieu of fractional shares of Surviving
Corporation Common Stock with respect to both the ▇▇▇ Merger
and the ▇▇▇▇▇▇ Merger is solely for the purpose of avoiding
the expense and inconvenience to Surviving Corporation of
issuing fractional shares and does not represent separately
bargained-for consideration. The total cash consideration
that will be paid in the ▇▇▇ Merger to the shareholders of
STC instead of issuing fractional shares of Surviving
Corporation Common Stock will not exceed one percent of the
total consideration that will be issued in the ▇▇▇ Merger to
the shareholders of ▇▇▇ in exchange for their shares of STC
Common Stock, and the total cash consideration that will be
paid in the ▇▇▇▇▇▇ Merger to the shareholders of Epitope
instead of issuing fractional shares of Surviving Corporation
Common Stock will not exceed one percent of the total
consideration that will be issued in the ▇▇▇▇▇▇ Merger to the
shareholders of Epitope in exchange for their shares of
Epitope Common Stock. The fractional share interests of each
shareholder of STC and Epitope will be aggregated, and no
shareholder of STC or Epitope will receive cash for
fractional shares in an amount equal to or
3
greater than the value of one full share of Surviving
Corporation Common Stock.
19. After the ▇▇▇ Merger and the ▇▇▇▇▇▇ Merger, no dividends or
distributions will be made to the former STC shareholders or
the former Epitope shareholders by Surviving Corporation,
other than regular or normal dividend distributions made with
regard to all shares of Surviving Corporation Common Stock.
To the best of his knowledge and belief, the undersigned certifies that the
above representations are correct and that the factual statements upon which
they are based are true, correct and complete.
Very truly yours,
EPITOPE, INC.
By: -----------------------------------
Name:
Title:
4
EXHIBIT J
[To be typed on letterhead of STC Technologies, Inc.]
D R A F T
[Closing Date]
▇▇▇▇▇▇▇, Mag & Fizzell, P.C.
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
RE: Tax Opinion in Connection with Merger
of STC Technologies, Inc. with and into
OraSure Technologies, Inc.
Ladies and Gentlemen:
This letter is provided to you in connection with the tax opinion
you are rendering with respect to the proposed merger (the "▇▇▇ Merger") of STC
Technologies, Inc. ("STC") with and into OraSure Technologies, Inc. ("Merger
Sub") pursuant to the Agreement and Plan of Merger dated as of May 6, 2000 among
Epitope, Inc. ("Epitope"), Merger Sub, (hereinafter referred to as "Surviving
Corporation") and STC (the "Agreement"). Recognizing that you will rely on this
letter and the representations herein in rendering your tax opinion, we hereby
make and certify the following representations:
1. The facts concerning the ▇▇▇ Merger described in the Proxy
Statement included as part of the Registration Statement on
Form S-4 are true, correct and complete in all material
respects as of the date hereof.
2. The ▇▇▇ Merger will be consummated in compliance with the
terms of the Agreement and will be a statutory merger in
accordance with the applicable laws of the State of Delaware.
3. None of the terms and conditions of the Agreement have been
waived or modified, and STC has no plan or intention to waive
or modify any such term or condition.
4. A valid business purpose exists for the ▇▇▇ Merger.
5. The fair market value of the Surviving Corporation Common
Stock, par value $0.000001 per share ("Surviving Corporation
Common Stock"), and other consideration received by each STC
shareholder will be approximately equal to the fair market
value of the STC Common Stock, par value $0.000001 per share
("STC Common
Stock"), surrendered in the exchange.
6. The liabilities of STC assumed by Surviving Corporation and
the liabilities to which the transferred assets of STC are
subject were incurred by STC in the ordinary course of its
business.
7. Surviving Corporation, STC and the shareholders of STC will
pay their respective expenses, if any, incurred in connection
with the ▇▇▇ Merger.
8. There is no intercorporate indebtedness existing between
Surviving Corporation and STC that was issued, acquired, or
will be settled at a discount.
9. STC is not an investment company as defined in section
368(a)(2)(F) of the Internal Revenue Code.
10. STC is not under the jurisdiction of a court in a Title 11 or
similar case within the meaning of section 368(a)(3)(A) of
the Internal Revenue Code.
11. The fair market value of the assets of STC to be transferred
to Surviving Corporation will equal or exceed the sum of the
liabilities assumed by Surviving Corporation, plus the amount
of liabilities, if any, to which the transferred assets are
subject.
12. None of the compensation received by any
shareholder-employees of STC will be separate consideration
for, or allocable to, any of their shares of STC Common Stock
surrendered in the exchange, and the compensation paid to
such shareholder-employees will be for services actually
rendered and will be commensurate with amounts paid to third
parties bargaining at arms-length for similar services. None
of the Surviving Corporation Common Stock received in the ▇▇▇
Merger by any shareholder-employees of STC will be separate
consideration for, or allocable to, any compensation owed to
such employee.
13. The payment of cash in lieu of fractional shares of Surviving
Corporation Common Stock is solely for the purpose of
avoiding the expense and inconvenience to Surviving
Corporation of issuing fractional shares and does not
represent separately bargained-for consideration. The total
cash consideration that will be paid in the ▇▇▇ Merger to the
shareholders of STC instead of issuing fractional shares of
Surviving Corporation Common Stock will not exceed one
percent of the total consideration that will be issued in the
▇▇▇ Merger to the shareholders of STC in exchange for their
shares of STC Common Stock. The fractional share interests of
each shareholder of
2
STC will be aggregated, and no shareholder of STC will
receive cash for fractional shares in an amount equal to or
greater than the value of one full share of Surviving
Corporation Common Stock.
14. No dividends or distributions, other than regular or normal
dividends or distributions, have been made or will be made
with respect to any STC Common Stock prior to and in
connection with the ▇▇▇ Merger.
15. STC has no redeemed and has no plan or intention to redeem
any STC Common Stock prior to and in connection with the ▇▇▇
Merger.
16. A person related to STC within the meaning of Treasury
Regulation ss.1.368-1(e)(3) has not acquired and has no plan
or intention to acquire any STC Common Stock prior to and in
connection with the ▇▇▇ Merger.
To the best of his knowledge and belief, the undersigned certifies that the
above representations are correct and that the factual statements upon which
they are based are true, correct and complete.
Very truly yours,
STC TECHNOLOGIES, INC.
By: -------------------------
Name:
Title:
3
EXHIBIT K
FORM OF STC TECHNOLOGIES, INC. AFFILIATE LETTER
Ladies and Gentlemen:
I have been advised that as of the date of this letter I may be
deemed to be an "Affiliate" of STC Technologies, Inc., a Delaware corporation
("STC" or the "Company"), as the term "Affiliate" is (i) defined for purposes of
paragraphs (c) and (d) of Rule 145 of the rules and regulations (the "Rules and
Regulations") of the Securities and Exchange Commission ("the "Commission")
under the Securities Act of 1933, as amended (the "Act"), and/or (ii) used in
and for purposes of Accounting Series Releases 130 and 135, as amended, of the
Commission. Pursuant to the terms of the Agreement and Plan of Merger dated as
of May ---, 2000, as it may be amended from time to time (the "Merger
Agreement"), among STC, Epitope, Inc., an Oregon corporation ("Epitope"), and
▇▇▇▇▇▇ Merger Subsidiary, Inc., a Delaware corporation ("Merger Sub" or
following the Mergers (as defined below) the "Surviving Corporation"). STC will
be merged with and into Merger Sub ("STC Merger") and immediately thereafter
Epitope will be merged with and into Merger Sub ("Epitope Merger") (the STC
Merger and the Epitope Merger are referred to collectively herein as the
"Mergers").
As a result of the Mergers, the shares of Common Stock of STC
("STC Common Stock") which I own would be converted into shares of common stock,
par value $0.000001 per share, of the Surviving Corporation ("Surviving
Corporation Common Stock").
I represent, warrant and covenant to Epitope and Merger Sub that
in the event I receive any Surviving Corporation Common Stock as a result of the
Mergers:
A. I will not make any sale, transfer or other disposition of
the Surviving Corporation Common Stock in violation of the Act or the Rules and
Regulations.
B. I have carefully read this letter and the Merger Agreement
and discussed the requirements of such documents and other applicable
limitations upon my ability to sell, transfer or otherwise dispose of Surviving
Corporation Common Stock, to the extent I felt necessary, with my counsel or
counsel for STC.
C. I have been advised that the issuance of Surviving
Corporation Common Stock to me pursuant to the Mergers has been or will be
registered with the Commission under the Act on a Registration Statement on Form
S-4. However, I have also been advised that, because I may be deemed to have
been an Affiliate of STC at the time the Mergers were submitted for a vote of
the stockholders of STC, I may not sell, transfer or otherwise dispose of the
Surviving Corporation Common Stock issued to me in the Mergers unless (i) such
sale, transfer or other disposition has been registered under the Act, (ii) such
sale, transfer or other disposition is made in conformity with the volume and
other limitations of Rule 145 promulgated by the Commission under the Act, or
(iii) in the opinion of counsel reasonably acceptable to the Surviving
Corporation, such sale, transfer or other disposition is otherwise exempt from
registration under the Act.
D. I agree that during the Pooling Period (as defined below)
I will not sell, transfer, or otherwise dispose of my interests in, or reduce my
risk relative to, any of the
(i) shares of STC Common Stock or shares of Surviving Corporation Common Stock
over which I have or share voting or dispositive power or other form of
Beneficial Ownership (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934, as amended (the "Exchange Act") with respect thereto or (ii) other
securities which are converted upon consummation of the Mergers or upon the
exercise of any options or other rights to acquire STC Common Stock or Surviving
Corporation Common Stock which I Beneficially Own. For purposes of this
Affiliate Letter, "Pooling Period" shall mean the period commencing thirty (30)
days prior to the Effective Time and ending on the date which is one business
day after publication by the Surviving Corporation of its results of operations
following the Mergers for the period which includes at least thirty (30) days of
combined operations of Epitope and STC following the Mergers whether by issuance
of a quarterly earnings report on Form 10-Q or other public issuance (such as a
press release) that includes such information. Epitope and Merger Sub agree to
make such filing or announcement as soon as reasonably practical following the
Effective Time of the Merger. I understand that reducing my risk relative to
such STC Common Stock or Surviving Corporation Common Stock includes, but is not
limited to, using such shares to secure a loan, purchasing a put option to sell
such shares or otherwise entering a put agreement with respect to such shares.
E. Except as set forth in the Stockholders' Agreement, dated
March 30, 1999, among the Company and certain stockholders thereto, I understand
that the Surviving Corporation is under no obligation to register the sale,
transfer or other disposition of the Surviving Corporation Common Stock by me or
on my behalf under the Act or to take any other action necessary in order to
make compliance with an exemption from such registration available.
F. I also understand that stop transfer instructions will be
given to the Surviving Corporation's transfer agents with respect to the
Surviving Corporation Common Stock and that there will be placed on the
certificates for the Surviving Corporation Common Stock issued to me, or any
substitutions therefor, a legend stating in substance:
"THE SHARES EVIDENCED BY THIS CERTIFICATE WERE ISSUED IN A
TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE SECURITIES
ACT OF 1933 APPLIES. THE SHARES EVIDENCED BY THIS CERTIFICATE MAY
ONLY BE TRANSFERRED IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT
DATED -------------------, 2000 BETWEEN THE REGISTERED HOLDER
HEREOF AND ---------------, A COPY OF WHICH AGREEMENT IS ON FILE
AT THE PRINCIPAL OFFICES OF THE ISSUER."
G. I also understand that unless the transfer by me of my
Surviving Corporation Common Stock has been registered under the Act or is a
sale made in conformity with the provisions of Rule 145, the Surviving
Corporation reserves the right to place the same legend set forth in paragraph
F. above on the certificates issued to my transferee.
The undersigned understands and agrees that the legends set forth
in paragraphs F and G above shall be removed by delivery of substitute
certificates without such legend if the undersigned shall have delivered to the
Surviving Corporation a copy of a letter from the staff of
-2-
the Commission, or an opinion of counsel in form and substance reasonably
satisfactory to the Surviving Corporation, to the effect that such legend is not
required for purposes of the Act.
H. The shares of STC Common Stock which I Beneficially Own
are free and clear of all Encumbrances (as defined below; other than any
Encumbrance created by this Agreement). The term "Encumbrance" means any pledge,
security interest, lien, claim, encumbrance, mortgage, charge, hypothecation,
option, right of first refusal or offer, community property right, other marital
right, preemptive right, voting agreement, voting trust, proxy, power of
attorney, escrow, option, forfeiture, penalty, action at law or in equity,
security agreement, stockholder agreement or other agreement, arrangement,
contract, commitment, understanding or obligation, or any other restriction,
qualification or limitation on the use, transfer, right to vote, right to
dissent, and seek appraisal, receipt of income or other exercise of any
attribute of ownership.
Execution of this letter should not be considered an admission on
my part that I am an "Affiliate" of STC as described in the first paragraph of
this letter, or as a waiver of any rights I may have to object to any claim that
I am such an Affiliate on or after the date of this letter.
By Epitope's acceptance of this letter, Epitope and Merger Sub
hereby agree with me as follows:
(i) For so long as and to the extent necessary to permit
me to sell the Surviving Corporation Common Stock pursuant to Rule 145 and, to
the extent applicable, Rule 144 under the Act, the Surviving Corporation shall
(A) use its reasonable efforts to (1) file, on a timely basis, all reports and
data required to be filed with the Commission by it pursuant to Section 13 of
the Exchange Act, and (2) furnish to me upon reasonable request a written
statement as to whether the Surviving Corporation has complied with such
reporting requirements during the twelve (12) months preceding any proposed sale
of the Surviving Corporation Common Stock by me under Rule 145, and (B)
otherwise use its reasonable efforts to permit such sales pursuant to Rule 145
and Rule 144. Epitope hereby represents to me that it has filed all reports
required to be filed with the Commission under Section 13 of the 1934 Act during
the preceding twelve (12) months.
(ii) It is understood and agreed that certificates with
the legends set forth in paragraphs F and G above will be substituted by
delivery of certificates without such legends if (A) one year shall have elapsed
from the date the undersigned acquired the Surviving Corporation Common Stock
received in the Mergers and the provisions of Rule 145(d)(2) are then available
to the undersigned, (B) two years shall have elapsed from the date the
undersigned acquired the Surviving Corporation Common Stock received in the
Mergers and the provisions of Rule 145(d)(3) are then applicable to the
undersigned, or (C) the Surviving Corporation has received either an opinion of
counsel, which opinion and counsel shall be reasonably satisfactory to the
Surviving Corporation, or a "no-action" letter obtained by the undersigned from
the staff of the Commission, to the effect that the restrictions imposed by Rule
145 under the Act no longer apply to the undersigned.
-3-
Notwithstanding the foregoing provisions of this letter, if the
undersigned is a corporation, limited partnership or another form of entity, the
shares of Surviving Corporation Common Stock may be distributed after the
expiration of the Pooling Period to stockholders, partners or other owners, as
the case may be, thereof (collectively, the "Distributees"), provided that (i)
such shares shall remain subject to any applicable requirements of Rule 145, and
(ii) the Surviving Corporation reserves the right to place the legend
contemplated by paragraph G of this letter on the certificates issued to the
Distributees.
Very truly yours,
------------------------------------
Name: ------------------------------
Accepted this ---- day of
----------------, 2000 by
EPITOPE, INC.
By: --------------------------------
Name:
Title:
▇▇▇▇▇▇ MERGER SUBSIDIARY, INC.
By: --------------------------------
Name:
Title:
-4-
EXHIBIT L
FORM OF EPITOPE, INC. AFFILIATE LETTER
Ladies and Gentlemen:
I have been advised that as of the date of this letter I may be
deemed to be an "Affiliate" of Epitope, Inc., an Oregon corporation ("Epitope"
or the "Company"), as the term "Affiliate" is used in and for purposes of
Accounting Series Releases 130 and 135, as amended, of the Securities and
Exchange Commission ("Commission"). Pursuant to the terms of the Agreement and
Plan of Merger dated as of May --, 2000, as it may be amended from time to time
(the "Merger Agreement"), among STC Technologies, Inc., a Delaware corporation
("STC"), Epitope and ▇▇▇▇▇▇ Merger Subsidiary, Inc., a Delaware corporation
("Merger Sub" or following the Mergers (as defined below) the "Surviving
Corporation"). STC will be merged with and into Merger Sub ("STC Merger") and
immediately thereafter Epitope will be merged with and into Merger Sub ("Epitope
Merger") (the STC Merger and the Epitope Merger are referred to collectively
herein as the "Mergers").
As a result of the Mergers, the shares of Common Stock of Epitope
("Epitope Common Stock") which I own would be converted into shares of common
stock, par value $0.000001 per share, of the Surviving Corporation ("Surviving
Corporation Common Stock").
I represent, warrant and covenant to Epitope and Merger Sub that
in the event I receive any Surviving Corporation Common Stock as a result of the
Mergers:
A. I agree that during the Pooling Period (as defined below)
I will not sell, transfer, or otherwise dispose of my interests in, or reduce my
risk relative to, any of the (i) shares of Epitope Common Stock or shares of
Surviving Corporation Common Stock over which I have or share voting or
dispositive power or other form of Beneficial Ownership (as defined in Rule
13d-3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act")
with respect thereto or (ii) other securities which are converted upon
consummation of the Mergers or upon the exercise of any options or other rights
to acquire Epitope Common Stock or Surviving Corporation Common Stock which I
Beneficially Own. For purposes of this Affiliate Letter, "Pooling Period" shall
mean the period commencing thirty (30) days prior to the Effective Time and
ending on the date which is one business day after publication by the Surviving
Corporation of its results of operations following the Mergers for the period
which includes at least thirty (30) days of combined operations of Epitope and
STC following the Mergers whether by issuance of a quarterly earnings report on
Form 10-Q or other public issuance (such as a press release) that includes such
information. Epitope and Merger Sub agree to make such filing or announcement as
soon as reasonably practical following the Effective Time of the Merger. I
understand that reducing my risk relative to such Epitope Common Stock or
Surviving Corporation Common Stock includes, but is not limited to, using such
shares to secure a loan, purchasing a put option to sell such shares or
otherwise entering a put agreement with respect to such shares.
B. I also understand that stop transfer instructions will be
given to the Surviving Corporation's transfer agents with respect to the
Surviving Corporation Common
Stock and that there will be placed on the certificates for the Surviving
Corporation Common Stock issued to me, or any substitutions therefor, a legend
stating in substance:
"THE SHARES EVIDENCED BY THIS CERTIFICATE MAY ONLY BE TRANSFERRED
IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT DATED
-------------------, 2000 BETWEEN THE REGISTERED HOLDER HEREOF
AND ---------------, A COPY OF WHICH AGREEMENT IS ON FILE AT THE
PRINCIPAL OFFICES OF THE ISSUER."
C. The undersigned understands and agrees that the legend set
forth in paragraph B above shall be removed by delivery of substitute
certificates without such legend following the expiration of the Pooling Period
D. The shares of Epitope Common Stock which I Beneficially
Own are free and clear of all Encumbrances (as defined below; other than any
Encumbrance created by this Agreement). The term "Encumbrance" means any pledge,
security interest, lien, claim, encumbrance, mortgage, charge, hypothecation,
option, right of first refusal or offer, community property right, other marital
right, preemptive right, voting agreement, voting trust, proxy, power of
attorney, escrow, option, forfeiture, penalty, action at law or in equity,
security agreement, stockholder agreement or other agreement, arrangement,
contract, commitment, understanding or obligation, or any other restriction,
qualification or limitation on the use, transfer, right to vote, right to
dissent, and seek appraisal, receipt of income or other exercise of any
attribute of ownership.
Execution of this letter should not be considered an admission on
my part that I am an "Affiliate" of Epitope as described in the first paragraph
of this letter, or as a waiver of any rights I may have to object to any claim
that I am such an Affiliate on or after the date of this letter.
Very truly yours,
------------------------------------
Name: ------------------------------
-2-
Accepted this ---- day of
----------------, 2000 by
EPITOPE, INC.
By: -----------------------------------
Name:
Title:
▇▇▇▇▇▇ MERGER SUBSIDIARY, INC.
By: -----------------------------------
Name:
Title:
-3-
EXHIBIT M
INDEMNIFICATION AGREEMENT
THIS AGREEMENT is made this ---- day of ---------, 2000, between OraSure
Technologies, Inc., a Delaware corporation (the "Company"), and
------------------------- ("Indemnitee").
WHEREAS, it is important to the Company to attract and retain as
directors and officers the most capable persons available; and
WHEREAS, the Bylaws of the Company (the "Bylaws") provide for the
indemnification of the directors, officers, employees and agents of the Company
as authorized by Delaware General Corporation Law Section 145 (the "State
Statute"); and
WHEREAS, such Bylaws and the State Statute specifically provide that
they are not exclusive, and thereby contemplate that contracts may be entered
into between the Company and its directors and officers with respect to
indemnification of such directors and officers; and
WHEREAS, in accordance with the authorization provided by the State
Statute and the Bylaws, the Company may purchase a policy or policies of
Directors and Officers Liability Insurance ("D&O Insurance"), covering certain
liabilities which may be incurred by its directors and officers in the
performance of their services for the Company; and
WHEREAS, recent developments with respect to the terms and availability
of D&O Insurance and with respect to the application, amendment and enforcement
of statutory and bylaw indemnification provisions generally have raised
questions concerning the adequacy and reliability of the protection afforded to
directors and officers thereby; and
WHEREAS, in order to resolve such questions and thereby induce
Indemnitee to agree to serve or continue to serve as a director and/or officer
of the Company, the Company has determined and agreed to enter into this
contract with Indemnitee;
NOW, THEREFORE, in consideration of the premises and of Indemnitee's
agreeing to serve or continuing to serve as a director and/or officer of the
Company, the parties hereto agree as follows:
1. Indemnity. The Company hereby agrees to hold harmless and
indemnify Indemnitee to the full extent permitted by law:
(a) Against any and all expenses (including attorneys' fees),
judgments, fines, penalties and amounts paid in settlement (including,
without limitation, all interest, assessments and other charges paid or
payable in connection therewith) actually and reasonably incurred by
Indemnitee in connection with any threatened, pending or completed
action, suit or proceeding, whether brought by or in the right of the
Company or otherwise and whether civil, criminal, administrative or
investigative, to which Indemnitee is, was or at any time becomes a
party, or is threatened to be made a party, by reason of the fact that
Indemnitee is, was or at any time becomes a director, officer, employee,
agent or fiduciary of the Company, or is or was serving at the request
of the Company as a director, officer, employee, agent or fiduciary of
another corporation,
partnership, joint venture, employee benefit plan, trust or other entity
or enterprise, or by reason of anything done or not done by Indemnitee
in any such capacity, whether prior to or subsequent to the date of this
Agreement; and
(b) Against any and all expenses (including attorneys' fees)
actually and reasonably incurred by Indemnitee in serving or preparing
to serve as a witness or other participant in any threatened, pending or
completed action, suit or proceeding, whether brought by or in the right
of the Company or otherwise and whether civil, criminal, administrative
or investigative, if Indemnitee is such a witness or participant by
reason of the fact that Indemnitee is, was or at any time becomes a
director, officer, employee, agent or fiduciary of the Company or is or
was serving at the request of the Company as a director, officer,
employee, agent or fiduciary of another corporation, partnership, joint
venture, employee benefit plan, trust or other entity or enterprise.
2. Specific Limitations on Indemnity. Indemnitee shall not be
entitled to indemnification under this Agreement:
(a) In respect to remuneration paid to or advantage gained by
Indemnitee if it shall be determined by a final judgment or other final
adjudication that Indemnitee was not legally entitled to such
remuneration or advantage;
(b) On account of Indemnitee's conduct which is determined by
a final judgment or other final adjudication to have been knowingly
fraudulent, deliberately dishonest or willful misconduct;
(c) Prior to a Change in Control (as defined in Section 4(e)),
in respect of any action, suit or proceeding initiated by Indemnitee
against the Company or any director or officer of the Company (unless
the Company has joined in or consented to the initiation of such action,
suit or proceeding), except (i) as set forth in Section 12(b) hereof,
(ii) in respect of any counterclaims made against Indemnitee in any such
action, suit or proceeding, and (iii) to the extent Indemnitee seeks
contribution or apportionment of an award or settlement against
Indemnitee and against the Company and/or any other director or officer
of the Company;
(d) On account of any matter determined by a final judgment or
other final adjudication to be a violation by Indemnitee of the
provisions of Section 16 of the Securities Exchange Act of 1934, as
amended (the "Act"), or the rules and regulations promulgated
thereunder, as amended from time to time; or
(e) With respect to any matter if it shall be determined by a
final judgment or other final adjudication that such indemnification is
not lawful.
3. Advance of Expenses and Payment of Indemnification. Upon the
written request of Indemnitee, expenses that are subject to indemnification
under this Agreement shall be advanced by the Company within five (5) business
days of receipt of such request. Subject to Section 4(a), indemnification shall
be made under this Agreement no later than sixty (60) days after receipt by the
Company of the written request of Indemnitee, which written request shall
identify the judgments, fines, penalties and amounts paid in settlement that are
subject to
2
indemnification under this Agreement and for which indemnification is requested.
Written request shall be deemed received three days after the date postmarked if
sent by prepaid mail properly addressed to the Company at the address set forth
in Section 11 hereof.
4. Determination of Indemnification.
(a) Notwithstanding any other provision of this Agreement (i) the
obligations of the Company under Section 1 shall be subject to the condition
that the Reviewing Party (as defined in Section 4(f)) shall have determined (in
a written opinion, in any case in which the Independent Legal Counsel (as
defined in Section 4(g)) is involved) that Indemnitee would be permitted to be
indemnified under this Agreement, (ii) the obligation of the Company to make an
expense advance pursuant to Section 3 shall be subject to the condition that,
if, when and to the extent that it is finally determined that Indemnitee would
not be permitted to be indemnified for such expenses under this Agreement, the
Company shall be entitled to be reimbursed by Indemnitee (who hereby agrees and
undertakes to reimburse the Company) for all such amounts theretofore paid, and
(iii) the obligation of the Company to make an expense advance pursuant to
Section 3 shall be made without regard to Indemnitee's ability to repay the
amount advanced and without regard to Indemnitee's ultimate entitlement to
indemnification under this Agreement or otherwise. Indemnitee's obligation to
reimburse the Company for expense advances shall be unsecured and no interest
shall be charged thereon.
(b) The Reviewing Party shall be selected by the Board of Directors,
provided, however, that if there has been a Change in Control (other than a
Change in Control which has been approved by a majority of the Company's Board
of Directors who were directors immediately prior to such Change in Control) the
Reviewing Party shall be the Independent Legal Counsel. If there has been no
determination by the Reviewing Party within the sixty (60) day period referred
to in Section 3, the Reviewing Party shall be deemed to have made a
determination that it is permissible to indemnify Indemnitee under this
Agreement.
(c) The Company agrees that if there is a Change in Control of the
Company (other than a Change in Control which has been approved by a majority of
the Company's Board of Directors who were directors immediately prior to such
Change in Control) then Independent Legal Counsel shall be selected by
Indemnitee and approved by the Company (which approval shall not unreasonably be
withheld) and such Independent Legal Counsel shall determine whether the
director or officer is entitled to indemnification for expenses, judgments,
fines, penalties and amounts paid in settlement (including, without limitation,
all interest, assessments and other charges paid or payable in connection
therewith) under this Agreement or any other agreement or the Certificate of
Incorporation or Bylaws of the Company now or hereafter in effect relating to
indemnification. Such Independent Legal Counsel shall render its written opinion
to the Company and Indemnitee as to whether and to what extent Indemnitee will
be permitted to be indemnified for expenses, judgments, fines, penalties and
amounts paid in settlement (including, without limitation, all interest,
assessments and other charges paid or payable in connection therewith). The
Company agrees to pay the reasonable fees of the Independent Legal Counsel and
to indemnify fully such Independent Legal Counsel against any and all expenses
(including attorneys' fees), claims, liabilities and damages arising out of or
relating to this Agreement or the engagement of Independent Legal Counsel
pursuant hereto.
3
(d) If a determination denying Indemnitee's claim is made by a
Reviewing Party (other than Independent Legal Counsel), notice of such
determination shall disclose with particularity the reasons for such
determination. If a determination denying Indemnitee's claim is made by
Independent Legal Counsel, the notice shall include a copy of the related legal
opinion of such counsel.
(e) "Change in Control" shall be deemed to have occurred if (i) any
"person" (as such term is used in Sections 13(d) and 14(d) of the Act), other
than a trustee or other fiduciary holding securities under an employee benefit
plan of the Company or a corporation owned directly or indirectly by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company, is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Act), directly or indirectly, of securities of
the Company representing 15% or more of the total voting power represented by
the Company's then outstanding Voting Securities (as defined in Section 4(h)),
or (ii) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board of Directors of the Company and
any new director whose election by the Board of Directors or nomination for
election by the Company's stockholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were directors
at the beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority thereof,
or (iii) the stockholders of the Company approve a merger or consolidation of
the Company with any other corporation, other than a merger or consolidation
which would result in the Voting Securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into Voting Securities of the surviving
entity) at least 85% of the total voting power represented by the Voting
Securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation, or the stockholders of the Company approve a plan
of complete liquidation of the Company or an agreement for the sale or
disposition by the Company (in one transaction or a series of transactions) of
all or substantially all of the assets of the Company.
(f) "Reviewing Party" shall mean any appropriate person or body
consisting of a member or members of the Board of Directors of the Company or
any other person or body appointed by the Board who is not a party to the
particular action, suit or proceeding with respect to which Indemnitee is
seeking indemnification, or Independent Legal Counsel.
(g) "Independent Legal Counsel" shall mean an attorney, selected in
accordance with the provisions of Section 4(c), who shall not have otherwise
performed services for the Company or Indemnitee within the last five years
(other than in connection with seeking indemnification under this Agreement).
Independent Legal Counsel shall not be any person who, under the applicable
standards of professional conduct then prevailing, would have a conflict of
interest in representing either the Company or Indemnitee in an action to
determine Indemnitee's rights under this Agreement, nor shall Independent Legal
Counsel be any person who has been sanctioned or censured for ethical violations
of applicable standards of professional conduct.
(h) "Voting Securities" shall mean any securities of the Company
which vote generally in the election of directors.
4
5. Partial Indemnity. If Indemnitee is entitled under any provision
of this Agreement to indemnification by the Company for some or a portion of the
expenses, judgments, fines, penalties and amounts paid in settlement (including,
without limitation, all interest, assessments and other charges paid or payable
in connection therewith) incurred by Indemnitee, but not for the total amount
thereof, the Company shall indemnify Indemnitee for the portion thereof to which
Indemnitee is entitled. Notwithstanding any other provision of this Agreement,
to the extent that Indemnitee has been successful on merits or otherwise in
defense of any or all actions, suits or proceedings relating in whole or in part
to an event subject to indemnification hereunder or in defense of any issue or
matter therein, including dismissal without prejudice, Indemnitee shall be
indemnified against expenses incurred in connection with such action, suit,
proceeding, issue or matter, as the case may be.
6. Non-exclusivity. The rights of Indemnitee under this Agreement
shall be in addition to any other rights Indemnitee may have under the
Certificate of Incorporation, the Bylaws, any other agreement of the Company,
the Delaware General Corporation Law ("DGCL"), D&O Insurance or otherwise. To
the extent that any change in the DGCL (whether by statute or judicial decision)
permits greater indemnification by agreement than would be afforded currently
under the Certificate of Incorporation and the Bylaws of the Company and this
Agreement, it is the intent of the parties hereto that Indemnitee shall by this
Agreement be entitled to the greater benefits so afforded by such change.
7. Liability Insurance. To the extent the Company maintains D&O
Insurance, the Company shall maintain coverage for Indemnitee under such policy
or policies, in accordance with its or their terms, to the maximum extent of the
coverage provided under such policy or policies in effect for any other director
or officer of the Company.
8. No Duplication of Payments. The Company shall not be liable under
this Agreement to make any payment in connection with any claim against
Indemnitee to the extent Indemnitee has otherwise actually received payment
(under any insurance policy, Bylaw or otherwise) of the amounts otherwise
indemnifiable hereunder or to the extent that Indemnitee is entitled to be
indemnified directly by any insurance company under the individual directors'
and officers' liability provisions of any D&O Insurance maintained by the
Company.
9. No Presumption. For purposes of this Agreement, the termination
of any claim, actions, suit or proceeding by judgment, order, settlement
(whether with or without court approval) or conviction, or upon a plea of nolo
contendere, or its equivalent, shall not of itself create a presumption that
Indemnitee did not meet any particular standard of conduct or have any
particular belief or that a court has determined that indemnification is not
permitted by applicable law.
10. Continuation of Indemnity. All agreements and obligations of the
Company contained herein shall continue during the period Indemnitee is a
director, officer, employee, agent or fiduciary of the Company, or is serving at
the request of the Company as a director, officer, employee, agent or fiduciary
of another corporation, partnership, joint venture, trust or other entity or
enterprise, and shall continue thereafter so long as Indemnitee shall be subject
to any possible claim or threatened, pending or completed action, suit or
proceeding, whether civil,
5
criminal or investigative, by reason of the fact that Indemnitee was a director
or officer of the Company or serving in any other capacity referred to herein.
11. Notification of Proceedings; Consent to Settlements; Defense.
(a) Promptly after receipt by Indemnitee of notice of the
commencement of any action, suit or proceeding, Indemnitee shall, if a claim in
respect thereof is to be made against the Company under this Agreement, notify
the Company of the commencement thereof. Notice shall be in writing and shall be
addressed as follows:
OraSure Technologies, Inc.
▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
Such notice shall be deemed received if sent by prepaid mail properly
addressed. Indemnitee and the Company shall cooperate fully with each other in
the defense of any such action, suit or proceeding and each shall provide the
other with such information as the other may reasonably require. The Company
shall not be liable to indemnify Indemnitee under this Agreement for any amounts
paid in settlement of any action, suit or proceeding effected without its prior
written consent (which consent shall not unreasonably be withheld).
(b) The Company shall be entitled to participate in the action, suit
or proceeding at its own expense.
(c) Except as otherwise provided below, the Company may, at its
option, assume the defense of such action, suit or proceeding with legal counsel
reasonably satisfactory to Indemnitee. After notice from the Company to
Indemnitee of its election to assume the defense of an action, suit or
proceeding, the Company will not be liable to Indemnitee for expenses incurred
by Indemnitee in connection with such action, suit or proceeding under this
Agreement, including Section 3 hereof, other than Indemnitee's reasonable costs
of investigation or participation in such action, suit or proceeding (including,
without limitation, travel expenses) and except as provided below. Indemnitee
shall have the right to employ Indemnitee's own counsel in any such action, suit
or proceeding, but the fees and expenses of such counsel incurred after notice
from the Company of its assumption of the defense of such action, suit or
proceeding shall be at the expense of Indemnitee, unless (i) the employment of
counsel by Indemnitee has been authorized by the Company, (ii) Indemnitee shall
have reasonably concluded that there may be a conflict of interest between the
Company and Indemnitee in the conduct of the defense of such action, suit or
proceeding, or (iii) the Company shall not in fact have employed counsel to
assume the defense of such action, suit or proceeding, in each of which cases
the fees and expenses of Indemnitee's counsel shall be advanced by the Company
as provided in Section 3 hereof. The Company shall not be entitled to assume the
defense of any such action, suit or proceeding brought by or on behalf of the
Company.
(d) If two or more persons, including Indemnitee, may be entitled to
indemnification from the Company as parties to any action, suit or proceeding,
the Company may require Indemnitee to use the same legal counsel as the other
parties. Indemnitee shall have the right to
6
use separate legal counsel in such action, suit or proceeding, but the Company
shall not be liable to Indemnitee under this Agreement, including Section 3
hereof, for the fees and expenses of separate legal counsel incurred after
notice from the Company of the requirement to use the same legal counsel as the
other parties, unless Indemnitee reasonably concludes that there may be a
conflict of interest between Indemnitee and any of the other parties required by
the Company to be represented by the same legal counsel.
(e) Indemnitee shall permit the Company to settle any action, suit or
proceeding that the Company assumes the defense of, except that the Company
shall not, without Indemnitee's written consent, settle any action, suit or
proceeding unless such settlement includes a provision whereby the parties to
the settlement unconditionally release Indemnitee from all liabilities, damages,
fines, penalties, costs and expenses in respect of claims by reason of the
settlement or release of the parties in such action, suit or proceeding.
12. Enforcement.
(a) The Company expressly confirms and agrees that it has entered
into this Agreement and assumed the obligations imposed on it hereby in order to
induce Indemnitee to agree to serve or to continue to serve as a director and/or
officer of the Company and acknowledges that Indemnitee is relying upon this
Agreement in agreeing to serve or continuing to serve in such capacity.
(b) The right to indemnification provided by this Agreement shall be
enforceable by Indemnitee in any court in the State of Delaware having subject
matter jurisdiction thereof and in which venue is proper. Indemnitee shall have
the right to commence litigation in any such court challenging any determination
by the Reviewing Party or any aspect thereof, or the legal or factual bases
therefor. The Company shall reimburse Indemnitee for any and all reasonable
expenses (including attorneys' fees) incurred by Indemnitee in connection with
any claim asserted or action brought by Indemnitee to enforce rights or to
collect moneys due under this Agreement, the Certificate of Incorporation or the
Bylaws of the Company or any other agreement with the Company nor or hereafter
in effect relating to indemnification, or any D&O Insurance purchased and
maintained by the Company, regardless of whether Indemnitee ultimately is
determined to be entitled to such indemnification, advance expense payment or
insurance coverage, as the case may be, unless the court determines that the
claim or action is frivolous or that assertions made therein were made with no
reasonable basis.
(c) In connection with any determination by the Reviewing Party or
otherwise as to whether Indemnitee is entitled to be indemnified hereunder, the
burden of proof shall be on the Company to establish that Indemnitee is not so
entitled.
13. Separability. Each of the provisions of this Agreement is a
separate and distinct agreement and independent of the others, so that if any
provision hereof shall be held to be invalid or unenforceable for any reason,
such invalidity or unenforceability shall not affect the validity or
enforceability of the other provisions hereof.
7
14. Governing Law; Binding Effect; Amendment and Termination.
(a) This Agreement shall be interpreted and enforced in accordance
with the laws of the State of Delaware without giving effect to the principles
of conflicts of laws thereof.
(b) This Agreement shall be binding upon Indemnitee and upon the
Company, its successors and assigns (including any transferee of all or
substantially all of the assets of the Company and any successor by merger or
operation of law), and shall inure to the benefit of Indemnitee, his or her
heirs, personal representatives and assigns and to the benefit of the Company,
its successors and assigns. The Company shall require and cause any successor to
all or substantially all of its assets, by written agreement in form and
substance satisfactory to Indemnitee, expressly to assume and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform if no succession had taken place.
(c) No amendment, modification, termination or cancellation of this
Agreement shall be effective unless in writing signed by both parties hereto. No
waiver of any provision of this Agreement shall be deemed or shall constitute a
waiver of any other provision hereof, and no such waiver shall constitute a
continuing waiver.
15. Subrogation. In the event of payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of such Indemnitee, who shall execute all papers required and shall
do everything that may be necessary to secure such rights, including the
execution of such documents necessary to enable the Company effectively to bring
suit to enforce such rights.
16. Change in Other Rights. The Company will not adopt any amendment
to the Certificate of Incorporation or Bylaws of the Company the effect of which
would be to deny, diminish or encumber Indemnitee's rights to indemnification,
advancement of expenses, exculpation or maintenance of the D & O Insurance
hereunder, under such other documents or under applicable law, as applied to any
act or failure to act occurring in whole or in part prior to the date upon which
any such amendment was approved by the Board of Directors or the stockholders,
as the case may be. Notwithstanding the foregoing, if the Company adopts any
amendment to the Certificate of Incorporation or Bylaws the effect of which is
to so deny, diminish or encumber such rights, such amendment will apply only to
acts or failures to act occurring entirely after the effective date thereof.
17. Savings Clause. If this Agreement or any provision hereof is
invalidated on any ground by any court of competent jurisdiction, the Company
shall nevertheless indemnify Indemnitee as to any expenses, judgments, fines,
penalties and amounts paid in settlement actually and reasonably incurred by
Indemnitee in connection with any action, suit or proceeding to the fullest
extent permitted by any applicable provision of this Agreement that has not been
invalidated and to the fullest extent permitted by Delaware law.
18. Deposit of Funds in Trust. In the event that the Company decides
to voluntarily dissolve or to file a voluntary petition for relief under
applicable bankruptcy, moratorium or similar laws, then not later than ten (10)
days prior to such dissolution or filing, the Company shall deposit in trust for
the exclusive benefit of Indemnitee a cash amount equal to all amounts
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previously authorized to be paid to Indemnitee hereunder, such amounts to be
used to discharge the Company's obligations to Indemnitee hereunder. Any amount
in such trust not required for such purpose shall be returned to the Company.
19. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each
party and delivered to the other.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
ORASURE TECHNOLOGIES, INC.
By: --------------------------------
President
-----------------------------------
[NAME]
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LIST OF PARTIES WHO WILL EXECUTE INDEMNIFICATION AGREEMENTS
Name Title
---- -----
10
EXHIBIT N
LIST OF EMPLOYEES REQUIRED TO ENTER EMPLOYMENT AGREEMENTS
Name Title
---- -----
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Chief Executive Officer
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ President and Chief Operating Officer
R. ▇▇▇ ▇▇▇▇▇▇▇▇ Executive Vice President and Chief
Scientific Officer
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Ph.D. Senior Vice President of Research and
Development, Infectious Disease
▇▇▇▇▇▇▇ ▇. Block Senior Vice President of Sales
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Vice President of Marketing
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Vice President of Operations
EXHIBIT O
[To be typed on letterhead of OraSure Technologies, Inc.]
D R A F T
[Closing Date]
▇▇▇▇▇▇▇, Mag & Fizzell, P.C.
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
RE: Tax Opinion in Connection with Mergers of STC
Technologies, Inc. and Epitope, Inc. with and into
OraSure Technologies, Inc.
Ladies and Gentlemen:
This letter is provided to you in connection with the tax opinion
you are rendering with respect to the proposed merger (the "▇▇▇ Merger") of STC
Technologies, Inc. ("STC") with and into OraSure Technologies, Inc. ("Merger
Sub") and the proposed merger (the "▇▇▇▇▇▇ Merger") of Epitope, Inc. ("Epitope")
with and into Merger Sub pursuant to the Agreement and Plan of Merger dated as
of May 6, 2000 among Epitope, Merger Sub (hereinafter referred to as "Surviving
Corporation") and STC (the "Agreement"). Recognizing that you will rely on this
letter and the representations herein in rendering your tax opinion, we hereby
make and certify the following representations:
1. The facts concerning the ▇▇▇ Merger and the ▇▇▇▇▇▇ Merger
described in the Proxy Statement included as part of the
Registration Statement on Form S-4 are true, correct and
complete in all material respects as of the date hereof.
2. The ▇▇▇ Merger and the ▇▇▇▇▇▇ Merger will be consummated in
compliance with the terms of the Agreement and will be
statutory mergers in accordance with the applicable laws of
the State of Delaware and the State of Oregon.
3. None of the terms and conditions of the Agreement have been
waived or modified, and Surviving Corporation and Epitope
have no plan or intention to waive or modify any such term or
condition.
4. Valid business purposes exist for both the ▇▇▇ Merger and the
▇▇▇▇▇▇ Merger.
5. The fair market value of the Surviving Corporation Common
Stock, par value $0.000001 per share ("Surviving Corporation
Common Stock"), and other consideration received by each STC
shareholder
will be approximately equal to the fair market value of the
STC Common Stock, par value $0.000001 per share ("STC Common
Stock"), surrendered in the exchange, and the fair market
value of the Surviving Corporation Common Stock and other
consideration received by each Epitope shareholder will be
approximately equal to the fair market value of the Epitope
Common Stock, no par value per share ("Epitope Common
Stock"), surrendered in the exchange.
6. Neither Surviving Corporation nor a person related to
Surviving Corporation within the meaning of Treasury
Regulation ss. 1.368-1(e)(3) has acquired or has any plan or
intention to acquire any STC Common Stock prior to and in
connection with the ▇▇▇ Merger or any Epitope Common Stock
prior to and in connection with the ▇▇▇▇▇▇ Merger.
7. Surviving Corporation has no plan or intention to reacquire
any of its stock issued in the ▇▇▇ Merger or the ▇▇▇▇▇▇
Merger.
8. A person related to Surviving Corporation within the meaning
of Treasury Regulation ss. 1.368-1(e)(3) has no plan or
intention to acquire any Surviving Corporation Common Stock
issued in the ▇▇▇ Merger or the ▇▇▇▇▇▇ Merger.
9. Surviving Corporation has no plan or intention to sell or
otherwise dispose of any of the assets of STC or Epitope
acquired in the transaction, except for dispositions made in
the ordinary course of business or transfers described in
section 368(a)(2)(C) of the Internal Revenue Code.
10. The liabilities of Epitope assumed by Surviving Corporation
and the liabilities to which the transferred assets of
Epitope are subject were incurred by Epitope in the ordinary
course of its business.
11. Following the ▇▇▇ Merger and the ▇▇▇▇▇▇ Merger, Surviving
Corporation will continue the historic businesses of STC and
Epitope or use a significant portion of STC and Epitope's
historic business assets in a business.
12. Surviving Corporation, STC, Epitope and the shareholders of
STC and Epitope will pay their respective expenses, if any,
incurred in connection with the ▇▇▇ Merger and the ▇▇▇▇▇▇
Merger.
13. There is no intercorporate indebtedness existing between
Surviving Corporation and STC or between Surviving
Corporation and Epitope that was issued, acquired, or will be
settled at a discount.
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14. Neither Surviving Corporation nor Epitope are investment
companies as defined in section 368(a)(2)(F) of the Internal
Revenue Code.
15. Epitope is not under the jurisdiction of a court in a Title
11 or similar case within the meaning of section 368(a)(3)(A)
of the Internal Revenue Code.
16. The fair market value of the assets of STC to be transferred
to Surviving Corporation will equal or exceed the sum of the
liabilities assumed by Surviving Corporation, plus the amount
of liabilities, if any, to which the transferred assets are
subject, and the fair market value of the assets of Epitope
to be transferred to Surviving Corporation will equal or
exceed the sum of the liabilities assumed by Surviving
Corporation, plus the amount of liabilities, if any, to which
the transferred assets are subject.
17. None of the compensation received by any
shareholder-employees of STC or Epitope will be separate
consideration for, or allocable to, any of their shares of
STC Common Stock or Epitope Common Stock surrendered in the
exchanges, and the compensation paid to such
shareholder-employees will be for services actually rendered
and will be commensurate with amounts paid to third parties
bargaining at arms-length for similar services. None of the
Surviving Corporation Common Stock received in the ▇▇▇ Merger
or ▇▇▇▇▇▇ Merger by any shareholder-employees of STC or
Epitope will be separate consideration for, or allocable to,
any compensation owed to such employee.
18. The payment of cash in lieu of fractional shares of Surviving
Corporation Common Stock with respect to both the ▇▇▇ Merger
and the ▇▇▇▇▇▇ Merger is solely for the purpose of avoiding
the expense and inconvenience to Surviving Corporation of
issuing fractional shares and does not represent separately
bargained-for consideration. The total cash consideration
that will be paid in the ▇▇▇ Merger to the shareholders of
STC instead of issuing fractional shares of Surviving
Corporation Common Stock will not exceed one percent of the
total consideration that will be issued in the ▇▇▇ Merger to
the shareholders of ▇▇▇ in exchange for their shares of STC
Common Stock, and the total cash consideration that will be
paid in the ▇▇▇▇▇▇ Merger to the shareholders of Epitope
instead of issuing fractional shares of Surviving Corporation
Common Stock will not exceed one percent of the total
consideration that will be issued in the ▇▇▇▇▇▇ Merger to the
shareholders of Epitope in exchange for their shares of
Epitope Common Stock. The fractional share interests of each
shareholder of STC and Epitope will be aggregated, and no
shareholder of STC or Epitope will receive cash for
fractional shares in an amount equal to or
3
greater than the value of one full share of Surviving
Corporation Common Stock.
19. After the ▇▇▇ Merger and the ▇▇▇▇▇▇ Merger, no dividends or
distributions will be made to the former STC shareholders or
the former Epitope shareholders by Surviving Corporation,
other than regular or normal dividend distributions made with
regard to all shares of Surviving Corporation Common Stock.
To the best of his knowledge and belief, the undersigned certifies that the
above representations are correct and that the factual statements upon which
they are based are true, correct and complete.
Very truly yours,
ORASURE TECHNOLOGIES, INC.
By: -------------------------
Name:
Title:
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