-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, T9fsWku/IPmbojyIJTNPFEGEDR7BquWgmQdYxA1rRm+vkqzZvfUik2GxjmcpjyLn l08k+jy+vI4U5eZ95AhI6A== 0001095811-01-504598.txt : 20010828 0001095811-01-504598.hdr.sgml : 20010828 ACCESSION NUMBER: 0001095811-01-504598 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 20010827 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: MEDJET INC CENTRAL INDEX KEY: 0000932265 STANDARD INDUSTRIAL CLASSIFICATION: SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841] IRS NUMBER: 223283541 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-49675 FILM NUMBER: 1724389 BUSINESS ADDRESS: STREET 1: 1090 KING GEORGE POST RD STREET 2: STE 301 CITY: EDISON STATE: NJ ZIP: 08837 BUSINESS PHONE: 7327383990 MAIL ADDRESS: STREET 1: 1090 KING GEORGES POST ROAD STREET 2: SUITE 301 CITY: EDISON STATE: NJ ZIP: 08837 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: VISX INC CENTRAL INDEX KEY: 0000837991 STANDARD INDUSTRIAL CLASSIFICATION: ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS [3845] IRS NUMBER: 061161793 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 3400 CENTRAL EXPRESSWAY CITY: SANTA CLARA STATE: CA ZIP: 95051 BUSINESS PHONE: 4087332020 MAIL ADDRESS: STREET 1: VISX INC STREET 2: 3400 CENTRAL EXPRESSWAY CITY: SANTA CLARA STATE: CA ZIP: 95051-0703 FORMER COMPANY: FORMER CONFORMED NAME: TAUNTON TECHNOLOGIES INC DATE OF NAME CHANGE: 19901212 SC 13D 1 f75398sc13d.txt SCHEDULE 13D 1 Schedule 13D Page 1 of 7 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 Medjet Inc. - -------------------------------------------------------------------------------- (Name of Issuer) - -------------------------------------------------------------------------------- Common Stock, $0.001 Par Value - -------------------------------------------------------------------------------- (Title of Class of Securities) - -------------------------------------------------------------------------------- 58501K-107 - -------------------------------------------------------------------------------- (CUSIP Number) - -------------------------------------------------------------------------------- Timothy R. Maier, Executive Vice President and Chief Financial Officer VISX, Incorporated 3400 Central Expressway, Santa Clara, CA 95051, (408) 773-2020 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) - -------------------------------------------------------------------------------- August 17, 2001 - -------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) - -------------------------------------------------------------------------------- If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. [ ] 2 Schedule 13D Page 2 of 7 CUSIP No. 58501K-107 - -------------------------------------------------------------------------------- 1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). VISX, Incorporated. - -------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of a Group (See Instructions) (a) [ ] --------------------------------------------------------- (b) [ ] - -------------------------------------------------------------------------------- 3. SEC Use Only - -------------------------------------------------------------------------------- 4. Source of Funds (See Instructions) WC - -------------------------------------------------------------------------------- 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) n/a - -------------------------------------------------------------------------------- 6. Citizenship or Place of Organization Delaware - -------------------------------------------------------------------------------- Number of 7. Sole Voting Power 3,725,000 (1) Shares ---------------------------------------------------------------- Beneficially 8. Shared Voting Power 1,810,130 (1) Owned by Each ---------------------------------------------------------------- Reporting 9. Sole Dispositive Power 3,725,000 (1) Person With ---------------------------------------------------------------- 10. Shared Dispositive Power 1,810,130 (1) - -------------------------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned by Each Reporting Person 5,535,130 (1) - -------------------------------------------------------------------------------- 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) - -------------------------------------------------------------------------------- 13. Percent of Class Represented by Amount in Row (11) 70.1% (1) - -------------------------------------------------------------------------------- 14. Type of Reporting Person (See Instructions) CO ---------------------------------------------------------------- ---------------------------------------------------------------- ---------------------------------------------------------------- - -------------------------------------------------------------------------------- (1) These figures are qualified by reference to Items 3, 4 and 5 herein. 3 Schedule 13D Page 3 of 7 ITEM 1. SECURITY AND ISSUER This Statement on Schedule 13D (the "Statement") relates to shares of Common Stock, $0.001 par value per share, of Medjet Inc., a Delaware corporation ("Medjet" or the "Issuer"), including shares of Series B Convertible Preferred Stock that are convertible into Common Stock, warrants that are exercisable to purchase Common Stock and options that are exercisable for Common Stock. The principal executive offices of the Issuer are located at 1090 King Georges Post Road, Suite 301, Edison, New Jersey 08837. ITEM 2. IDENTITY AND BACKGROUND This Statement is filed by VISX, Incorporated, a Delaware corporation ("VISX"). The address of VISX's principal executive offices is 3400 Central Expressway, Santa Clara, CA 95051. VISX develops products and procedures to improve people's eyesight using refractive laser technology. Set forth on Schedule A is the name of each of the directors and executive officers of VISX, and their present occupation or employment, including the name, business and address of any corporation or other in which such employment is conducted, as of the date hereof to VISX's knowledge. Neither VISX, nor to VISX's knowledge, any person named on Schedule A hereto, is required to disclose proceedings pursuant to Items 2(d) or 2(e). To VISX's knowledge, except as set forth on Schedule A, each of the individuals identified on Schedule A is a citizen of the United States. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION (a) The Merger Agreement. On August 17, 2001, VISX, Medjet and Orion Acquisition Corp., a Delaware corporation and wholly-owned subsidiary of VISX ("Merger Sub"), entered into an Agreement and Plan of Merger and Reorganization (the "Merger Agreement"). Pursuant to the Merger Agreement, VISX has agreed, subject to its right to terminate the Merger Agreement at any time until August 17, 2002, and subject to the satisfaction or waiver of various closing conditions, to acquire all outstanding common stock of the Issuer in a merger transaction that would pay $2.00 cash for each share of outstanding Medjet Common Stock (the "Merger"). If the Merger is completed, the Merger Sub will merge with and into Medjet, with Medjet surviving as a wholly-owned subsidiary of VISX. If and when the Merger is consummated, the Merger Sub will cease to exist as a corporation, and all of the business, assets, liabilities and obligations of the Merger Sub will be transferred to Medjet as a matter of law with Medjet remaining as the surviving corporation (the "Surviving Corporation"). Concurrently with the execution of, and pursuant to, the Merger Agreement, VISX paid the Issuer $500,000, which price was paid for out of VISX's working capital. Pursuant to the Merger Agreement, VISX received warrants to purchase a total of 1,320,000 shares of Medjet's Common Stock, which are exercisable for $0.75 per share (the "Merger Warrants"). (b) The Voting Agreement and License Agreement. As an inducement to VISX to enter into the Merger Agreement, VISX and Dr. Eugene I. Gordon ("Gordon"), the founder and Chief Executive Officer of the Issuer, entered into a Voting and Stock Option Agreement, dated August 17, 2001 (the "Voting Agreement"). There are two main provisions to the Voting Agreement: a voting provision and a stock option provision. Pursuant to the voting aspect of the Voting Agreement, Gordon has agreed to the following: (i) to appear at all Medjet stockholder meetings and to cause his shares of Common Stock to be counted as present for purposes of establishing a quorum; (ii) to vote his shares of Common Stock in favor of the approval and adoption of the Merger Agreement and any action required in furtherance thereof; and (iii) to vote his shares of Common Stock against any 4 Schedule 13D Page 4 of 7 Alternative Transactions or Frustrating Transactions (as those terms are defined in the Voting Agreement) presented to Medjet's stockholders. Gordon has also granted a proxy to VISX to vote his shares in the manner described in the previous sentence (the "Proxy"). Currently, however, Gordon's shares of Common Stock are subject to certain restrictions on transfer imposed by the Department of Corporations of the State of California (the "Transfer Restrictions"), and the Proxy will take effect only upon the lifting of these restrictions. Pursuant to the stock option aspect of the Voting Agreement, VISX will receive an option (the "Option") to purchase (i) Gordon's shares of Common Stock, (ii) Gordon's stock options and warrants (to the extent such options and warrants can be transferred to VISX pursuant to the terms of the governing agreements or instruments), and (iii) any other shares of Common Stock or options or warrants acquired by Gordon after the date of the Voting Agreement. VISX may exercise the Option only upon the occurrence of certain events (each, an "Exercise Event"), which may not occur. In general, an Exercise Event may be deemed to occur: (i) if VISX terminates the Merger Agreement due to Medjet's Board of Directors withdrawing, modifying or changing its recommendation of the Merger Agreement or the Merger in a manner adverse to VISX, (ii) if VISX terminates the Merger Agreement due to Medjet's Board of Directors making a Company Adverse Recommendation Change (as defined in the Merger Agreement), (iii) if VISX terminates the Merger Agreement as a result of Medjet failing to comply with the non-solicitation provisions of the Merger Agreement in all material respects, (iv) if VISX terminates the Merger Agreement due to the announcement of a Takeover Proposal (as defined in the Merger Agreement) and Medjet's Board of Directors failing to recommend against acceptance of such by its stockholders or failing to reconfirm its approval and recommendation of the Merger Agreement, (v) if Medjet terminates the Merger Agreement pursuant to section 5.7(b) thereof, or (vi) if VISX makes, or indicates in writing its willingness to make, sufficient funds available to effect the Merger, and attempts to effect the Merger pursuant to the Merger Agreement and the Delaware General Corporation Law, but is unable to do so for any reason. As with the Proxy, the Option will take effect only upon the lifting of the Transfer Restrictions. In connection with the Merger, VISX and Medjet also entered into a Non-Exclusive License Agreement, dated as of August 17, 2001 (the "License Agreement"). Pursuant to the License Agreement, Medjet has agreed to grant VISX a non-exclusive license to all Medjet Technology and Medjet Patents (as those terms are defined in the License Agreement) at a five percent royalty rate. The License Agreement, however, shall not come into force and effect if, prior to the termination of the Merger Agreement, the Transfer Restrictions are lifted or removed sufficient to allow Gordon to transfer his shares of Common Stock to VISX pursuant to the Merger Agreement and the Voting Agreement. VISX did not make any additional payments to Medjet pursuant to the Voting Agreement or the License Agreement. In the event that VISX exercises the Option, VISX will pay Gordon, out of its working capital, a price per share of $2.00 in the case of shares of Common Stock and the difference between $2.00 and the exercise price per share (if less than $2.00) of each stock option or warrant. Gordon currently owns (i) 1,596,787 shares of Common Stock, (ii) vested options and warrants to purchase 205,009 shares of Common Stock, and (iii) options to purchase 8,334 shares of Common Stock that will become vested and exercisable within sixty days. (c) The Share Transfer Agreement. Concurrently with the execution of the Merger Agreement and the Voting Agreement, VISX entered into a Share Transfer Agreement with Adam Smith Investment Partners, L.P., Adam Smith Investments, Ltd., Richard and Ana Grossman JTWROS, Orin Hirschman, Paul Packer, Adam-Jack M. Dodick, MD General Partnership, Hershel Berkowitz and Adam Smith & Company, Inc. (collectively, the "Adam Smith Entities") and Medjet. Pursuant to the Share Transfer Agreement, VISX acquired from the Adam Smith Entities (i) 10,400 shares of Series B Convertible Preferred Stock (the "Series B Preferred"), each of which is convertible into one hundred shares of Common Stock (for an aggregate of 1,040,000 shares of Common Stock), and (ii) warrants to purchase a total of 1,365,000 shares of Common Stock, which are exercisable for $3.50 per share (the "Adam Smith Warrants"). The total purchase price for the Series B Preferred and the Adam Smith Warrants was $1,300,001, which price was paid for out of VISX's working capital. -4- 5 Schedule 13D Page 5 of 7 References to, and descriptions of, the Share Transfer Agreement, the Merger Agreement, the Voting Agreement and the License Agreement as set forth in this Item 3 are qualified in their entirety by reference to the copies of the Share Transfer Agreement, the Merger Agreement, the Voting Agreement and the License Agreement included as Exhibits 1, 2, 3 and 4, respectively, to this Schedule 13D, and are incorporated in this Item 3 in their entirety where such references and descriptions appear. ITEM 4. PURPOSE OF TRANSACTION (a)-(b) As described more fully under Item 3 herein, this Statement relates to a possible Merger by and among VISX, Medjet and Merger Sub and to the purchase of shares of Series B Preferred and the Adam Smith Warrants from the Adam Smith Entities. If the Merger is effected, VISX will acquire all outstanding shares of Medjet Common Stock for the consideration set forth in Item 3 above, the Merger Sub will merge with and into Medjet, with Medjet surviving and becoming a wholly-owned subsidiary of VISX. (c) Not applicable. (d) In connection with the Merger Agreement and the Share Transfer Agreement, Medjet has increased the number of members in Medjet's board of directors from five (5) to six (6), and appointed a new director who was designated by VISX. In addition, it is anticipated that upon consummation of the Merger, the directors of the Surviving Corporation shall be the directors of Merger Sub, and that the initial officers of the Surviving Corporation shall be the officers of Merger Sub. (e) Other than as a result of the Merger described in Item 3 above, not applicable. (f) Not applicable. (g) Upon consummation of the Merger, the Certificate of Incorporation of Medjet will be amended in the manner set forth in the Merger Agreement, and the Bylaws of Merger Sub, as in effect immediately prior to the Merger, shall be the Bylaws of the Surviving Corporation until thereafter amended. (h)-(i) If the Merger is consummated, the Medjet Common Stock will be deregistered under the Securities Exchange Act of 1934, as amended, and delisted from the Over-the-Counter Bulletin Board Market. (j) Other than described above, VISX currently has no plans or proposals which relate to, or may result in, any of the matters listed in Items 4(a) - (j) of this Schedule 13D (although VISX reserves the right to develop such plans). References to, and descriptions of, the Share Transfer Agreement, the Merger Agreement, the Voting Agreement and the License Agreement as set forth in this Item 4 are qualified in their entirety by reference to the copies of the Share Transfer Agreement, the Merger Agreement, the Voting Agreement and the License Agreement included as Exhibits 1, 2, 3 and 4 respectively, to this Schedule 13D, and are incorporated in this Item 4 in their entirety where such references and descriptions appear. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER (a) As a result of the Share Transfer Agreement, the Merger Agreement and the Voting Agreement, VISX may be deemed to be the beneficial owner of 5,535,130 shares of Medjet Common Stock (including options exercisable within sixty days of August 17, 2001). Such Medjet Common Stock constitutes 70.1% of the issued and outstanding shares of Medjet Common Stock based on the number of shares of Medjet Common Stock outstanding as of August 14, 2001 (as represented by Medjet in the Merger Agreement). VISX's beneficial ownership may be calculated as follows: (i) 1,040,000 shares of Common Stock that may be issued upon conversion of the Series B Preferred; (ii) 1,365,000 shares of Common Stock that may be issued upon exercise of the Adam Smith Warrants; (iii) 1,320,000 shares of Common Stock that may be issued upon exercise of the Merger -5- 6 Schedule 13D Page 6 of 7 Warrants; (iv) 1,596,787 shares of Common Stock owned by Gordon and subject to the Voting Agreement; (v) vested options and warrants, owned by Gordon and subject to the Voting Agreement, to purchase 205,009 shares of Common Stock; and (vi) options to purchase 8,334 shares of Common Stock owned by Gordon that will become vested and exercisable within sixty days of August 17, 2001. VISX expressly disclaims beneficial ownership of any of the shares of Medjet Common Stock, options or warrants covered by the Voting Agreement. (b) VISX may be deemed to have the sole power to vote or to direct the vote, and sole power to dispose or direct the disposition, of 3,725,000 shares of Common Stock of which VISX may be deemed to be the beneficial owner, calculated as follows: (i) 1,040,000 shares of Common Stock that may be issued upon conversion of the Series B Preferred; (ii) 1,365,000 shares of Common Stock that may be issued upon exercise of the Adam Smith Warrants; and (iii) 1,320,000 shares of Common Stock that may be issued upon exercise of the Merger Warrants. VISX may be deemed to have the shared power to vote or to direct the vote, and shared power to dispose or direct the disposition, of 1,810,130 shares of Common Stock of which VISX may be deemed to be the beneficial owner, calculated as follows: (i) 1,596,787 shares of Common Stock owned by Dr. Gordon and subject to the Voting Agreement; (ii) vested options and warrants, owned by Dr. Gordon and subject to the Voting Agreement, to purchase 205,009 shares of Common Stock; and (iii) options to purchase 8,334 shares of Common Stock owned by Dr. Gordon that will become exercisable within sixty days of August 17, 2001. VISX shares the power to vote or to direct the vote and to dispose or direct the disposition of the shares of Common Stock described in the foregoing sentence with Dr. Eugene I. Gordon, founder and Chief Executive Officer of the Issuer. Gordon's business address is 1090 King Georges Post Road, Suite 301, Edison, NJ 08837. To VISX's knowledge, Gordon is not required to disclose legal proceedings pursuant to Items 2(d) or 2(e). To VISX's knowledge, Gordon is a citizen of the United States of America. (c) To the knowledge of VISX, no transactions in the class of securities reported have been effected during the past sixty days by any person named pursuant to Item 2, except as set forth herein. (d) To the knowledge of VISX, no other person has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the securities of Medjet reported on herein. (e) Not Applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER To the knowledge of VISX, there are no contracts, arrangements, understandings or relationships among the persons named in Item 2 and between such persons and any person with respect to any securities of Medjet, including but not limited to transfer or voting of any of the securities, finder's fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies other than the following: (i) the Share Transfer Agreement and exhibits thereto, (ii) the Merger Agreement and exhibits thereto, including the Voting Agreement and License Agreement, and (iii) the three (3) Warrants, which are listed in Item 7 herein, to purchase a total of 2,685,000 shares of Medjet Common Stock. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS 1. Share Transfer Agreement, dated August 17, 2001, by and among VISX, Medjet and the Adam Smith Entities. 2. Agreement and Plan of Merger and Reorganization, dated August 17, 2001, by and among VISX, Medjet and the Merger Sub. 3. Voting and Stock Option Agreement, dated August 17, 2001, by and between VISX and Eugene I. Gordon. 4. Non-Exclusive License Agreement, dated August 17, 2001, by and between VISX and Medjet. 5. Warrant to purchase 1,040,000 shares of Medjet Common Stock, dated August 17, 2001. 6. Warrant to purchase 325,000 shares of Medjet Common Stock, dated August 17, 2001. 7. Warrant to purchase 1,320,000 shares of Medjet Common Stock, dated August 17, 2001 -6- 7 Schedule 13D Page 7 of 7 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. August 27, 2001 - -------------------------------------------------------------------------------- Date /s/ Timothy R. Maier - -------------------------------------------------------------------------------- Signature Timothy R. Maier, Executive Vice President and Chief Financial Officer - -------------------------------------------------------------------------------- Name/Title -7- 8 SCHEDULE A DIRECTORS AND EXECUTIVE OFFICERS OF VISX, INCORPORATED The following table sets forth the name, business address and present principal occupation or employment, if applicable, of each director and executive officer of VISX. Except as indicated below, the business address of each such person is 3400 Central Expressway, Santa Clara, CA 95051.
OFFICER NAME TITLE AND PRESENT PRINCIPAL OCCUPATION - ------------ -------------------------------------- Elizabeth H. Davila Chairman of the Board, President and Chief Executive Officer Timothy R. Maier Executive Vice President, Chief Financial Officer and Treasurer Douglas H. Post Executive Vice President, Operations Derek A. Bertocci Vice President, Controller Carol F.H. Harner, Ph.D. Vice President, Research and Development Frances L. Henville-Shannon Vice President, Human Resources John F. Runkel, Jr. Vice President, General Counsel and Secretary Donald L. Fagen Vice President, Sales Joaquin V. Wolff Vice President, Marketing Alan F. Russell Vice President of Clinical and Regulatory Affairs DIRECTOR NAME TITLE AND PRESENT PRINCIPAL OCCUPATION - ------------- -------------------------------------- Elizabeth H. Davila Chairman of the Board, President and Chief Executive Officer of VISX Glendon E. French Director of VISX John W. Galiardo Director of VISX Jay T. Holmes Attorney, Business Consultant and Director of VISX Richard B. Sayford President of Strategic Enterprises, Inc., and Director of VISX
9 EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION - ------- ----------- 1. Share Transfer Agreement, dated August 17, 2001, by and among VISX, Medjet and the Adam Smith Entities. 2. Agreement and Plan of Merger and Reorganization, dated August 17, 2001, by and among VISX, Medjet and the Merger Sub. 3. Voting and Stock Option Agreement, dated August 17, 2001, by and between VISX and Eugene I. Gordon. 4. Non-Exclusive License Agreement, dated August 17, 2001, by and between VISX and Medjet. 5. Warrant to purchase 1,040,000 shares of Medjet Common Stock, dated August 17, 2001. 6. Warrant to purchase 325,000 shares of Medjet Common Stock, dated August 17, 2001. 7. Warrant to purchase 1,320,000 shares of Medjet Common Stock, dated August 17, 2001
EX-1 3 f75398ex1.txt EXHIBIT 1 1 ================================================================================ SHARE TRANSFER AGREEMENT AUGUST 17, 2001 ================================================================================ 2 TABLE OF CONTENTS
PAGE ---- Section 1 Purchase and Sale of Stock.............................................................2 1.1 Sale of Stock.....................................................................2 1.2 Sale of Investment Banking Warrants...............................................2 1.3 Closing...........................................................................2 Section 2 Representations and Warranties of the Company..........................................3 2.1 Corporate Organization; Authority; Due Authorization..............................3 2.2 Capitalization....................................................................3 2.3 Common Stock Issuable upon Conversion of Series B Preferred and Exercise of Warrants and Investment Banking Warrants.......................................4 2.4 Brokers and Finders...............................................................4 2.5 No Conflict; Required Filings and Consents........................................4 2.6 Disclosure........................................................................5 2.7 Rights Agreement..................................................................5 2.8 Ownership of Preferred Stock......................................................5 2.9 Absence of Claims by the Company..................................................5 2.10 Agreements Valid..................................................................5 2.11 No Representation.................................................................6 Section 3 Representations and Warranties of the Sellers..........................................6 3.1 Formation and Status of Seller....................................................6 3.2 Due Authorization.................................................................6 3.3 No Violation......................................................................6 3.4 No Consent Needed.................................................................6 3.5 Tax and Legal Matters.............................................................7 3.6 Ownership of Company Shares.......................................................7 3.7 Absence of Claims by the Seller...................................................7 3.8 Offering..........................................................................7 3.9 Brokers or Finders................................................................8 3.10 Rights Agreement and Stock Ownership..............................................8 3.11 Investment Experience.............................................................8 3.12 Agreements Valid..................................................................8 3.13 No Representation.................................................................8 Section 4 Investment Representations of the Purchaser............................................8 Section 5 General Provisions....................................................................10 5.1 Governing Law....................................................................10 5.2 Entire Agreement; Amendment......................................................11 5.3 Notices..........................................................................11 5.4 Assignment.......................................................................11 5.5 No Waiver........................................................................12
-i- 3 5.6 Descriptive Headings.............................................................12 5.7 Counterparts.....................................................................12
Exhibit A Sellers Exhibit B Company Capitalization Exhibit C Amendment to Registration Rights Agreement Exhibit D Subscription Agreement Exhibit E Warrants Exhibit F Investment Banking Warrants Exhibit G Settlement Agreement Exhibit H Registration Rights Agreement 4 SHARE TRANSFER AGREEMENT THIS SHARE TRANSFER AGREEMENT (the "Agreement") is made as of August 17, 2001, by and among VISX, Incorporated, a Delaware corporation (the "Purchaser"), each of the eight sellers listed on Exhibit A hereto (each, a "Seller" and collectively, the "Sellers"), and Medjet Inc., a Delaware corporation (the "Company"). BACKGROUND A. The Company and all of the Sellers except Adam Smith & Company, Inc. ("Adam Smith") (the seven Sellers not including Adam Smith are sometimes referred to herein as the "Preferred Stock Sellers") are parties to that certain Subscription Agreement for Series B Convertible Preferred Stock and Warrants, dated December 3, 1999 (the "Subscription Agreement"), pursuant to which the Preferred Stock Sellers purchased from the Company 16,000 units, at a price of $125.00 per unit. Each unit consists of: (i) one (1) share of the Company's Series B Preferred Stock (the "Series B Preferred"), and (ii) one hundred (100) five-year warrants, each five-year warrant exercisable to purchase one share of the Company's Common Stock at a price of $3.50 per share (the "Warrants"). The aggregate price paid by the Preferred Stock Sellers was $2,000,000 for the 16,000 units (consisting of a total of 16,000 shares of Series B Preferred and 1,600,000 Warrants). B. The Company and Adam Smith entered into that certain Investment Banking Agreement, dated as of December 3, 1999 (the "Investment Banking Agreement"), pursuant to which the Company issued to Adam Smith 500,000 warrants to purchase the Company's Common Stock (the "Investment Banking Warrants"). C. The Company and the Sellers are parties to that certain Settlement Agreement, dated January 28, 2000 (the "Settlement Agreement"), pursuant to which: (i) the Company and the Preferred Stock Sellers rescinded, on a pro rata basis, the purchase of 5,600 shares of Series B Preferred and 560,000 Warrants; and (ii) the Company and Adam Smith reduced the number of Investment Banking Warrants by 175,000 and terminated the Investment Banking Agreement. D. As a result of the agreements set forth in paragraphs A -- C above, the Preferred Stock Sellers now own, in the specific amounts set forth on Exhibit A hereto, a total of 10,400 shares of Series B Preferred and the 1,040,000 Warrants. The 10,400 shares of Series B Preferred and the 1,040,000 Warrants are referred to herein collectively as the "Purchased Securities." In addition, Adam Smith owns 325,000 Investment Banking Warrants. E. The Preferred Stock Sellers now wish to sell, and the Purchaser wishes to purchase, the Purchased Securities for an aggregate purchase price of $1,300,000, or $125 per unit, and Adam Smith now wishes to sell, and the Purchaser wishes to purchase, the Investment Banking Warrants for an aggregate purchase price of $1.00. NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, the parties agree as follows: -1- 5 SECTION 1 PURCHASE AND SALE OF STOCK 1.1 Sale of Stock. The Preferred Stock Sellers hereby agree to sell the Purchased Securities to the Purchaser for a total purchase price of $1,300,000 (the "Purchase Price"), such Purchase Price to be paid to the Sellers in the amounts set forth under the column entitled "Total Price" on Exhibit A hereto. 1.2 Sale of Investment Banking Warrants. Adam Smith hereby agrees to sell the Investment Banking Warrants to the Purchaser for a total purchase price of $1.00 (the "Investment Banking Warrant Price"). 1.3 Closing. The purchase and sale of the Purchased Securities and the Investment Banking Warrants hereunder shall take place at a closing (the "Closing"; the date on which the Closing occurs is hereinafter referred to as the "Closing Date"). The Closing shall take place concurrently with the execution and delivery of this Agreement by the Sellers, the Purchaser and the Company. At the Closing: (a) the Purchaser shall deliver to each Preferred Stock Seller or its designee by wire transfer, cashier's check or certified checks from a bank acceptable to the Preferred Stock Seller, or such other method of payment as the Preferred Stock Seller shall approve, an amount equal to the Preferred Stock Seller's pro rata portion of the Purchase Price; (b) each Preferred Stock Seller shall deliver to the Purchaser a Stock Power, the stock certificate representing the shares of Series B Preferred held by each of them, the original Warrant held by each of them, and any other documents reasonably acceptable to the Purchaser evidencing the transfer of the Purchased Securities from each Preferred Stock Seller to Purchaser; (c) the Purchaser shall deliver to Adam Smith or its designee by wire transfer, cashier's check or certified checks from a bank acceptable to Adam Smith, or such other method of payment as Adam Smith shall approve, an amount equal to the Investment Banking Warrant Price; (d) Adam Smith shall deliver to the Purchaser the original Investment Banking Warrant and any other documents reasonably acceptable to the Purchaser evidencing the transfer of the Investment Banking Warrants from Adam Smith to the Purchaser; (e) upon the delivery by the Purchaser to the Company of the documents referred to in Section 1.3(b) and Section 1.3(d), the Company shall issue and deliver to the Purchaser (i) a stock certificate for 10,400 shares of Series B Preferred; (ii) a warrant to purchase 1,040,000 shares of Company Common Stock, with the same terms and conditions as the Warrants; and (iii) a warrant to purchase 325,000 shares of Company Common Stock, with the same terms and conditions as the Investment Banking Warrant; and -2- 6 (f) the Company, the Sellers and the Purchaser shall execute and deliver an amendment (the "Amendment") to that certain Registration Rights Agreement by and among the Company and the Sellers, dated December 3, 1999 (the "Rights Agreement"; and as amended, the "Amended Rights Agreement"), in the form attached as Exhibit C. SECTION 2 REPRESENTATIONS AND WARRANTIES OF THE COMPANY The Company hereby represents and warrants to the Purchaser as follows, subject to such exceptions as are specifically disclosed in writing in the disclosure schedule supplied by the Company to Purchaser dated as of the date hereof (the "Company Disclosure Letter"): 2.1 Corporate Organization; Authority; Due Authorization. (a) The Company (i) is a corporation duty organized, validly existing and in good standing under the laws of the State of Delaware, (ii) has the corporate power and authority to own or lease its properties as and in the places where such business is now conducted and to carry on its business as now conducted and (iii) is duly qualified and in good standing as a foreign corporation authorized to do business in every jurisdiction where the failure to so qualify, individually or in the aggregate, would have a material adverse effect on the operations, prospects, assets, liabilities, financial condition or business of the Company (a "Company Material Adverse Effect"). Certificates of state authorities as of a recent date evidencing such valid existence or due qualification, as the case may be, and good standing have been delivered to the Purchaser. (b) The Company (i) has the requisite corporate power and authority to execute, deliver and perform this Agreement and the other agreements and warrants contemplated hereby to which it is a party (collectively, the "Other Agreements") and to incur the obligations herein and therein and (ii) has been authorized by all necessary corporate action to execute, deliver and perform this Agreement and the Other Agreements and to consummate the transactions contemplated hereby and thereby (the "Contemplated Transactions"). This Agreement and each of the Other Agreements is a valid and binding obligation of the Company enforceable in accordance with its terms, except as such enforceability may be limited by principles of public policy and subject to the laws of general application relating to bankruptcy, insolvency and the relief of debtors and rules of law governing specific performance, injunctive relief or other equitable remedies. 2.2 Capitalization. As of August 14, 2001, the authorized capital of the Company consisted of (i) 30,000,000 shares of Common Stock, $.001 par value per share (the "Common Stock"), of which 3,901,431 shares of Common Stock were outstanding, and (ii) 1,000,000 shares of Preferred Stock, $.01 par value per share, which may be designated as Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, and Series B Convertible Preferred Stock. The Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock consist of an -3- 7 aggregate of not more than 400,000 shares, of which 110,000 are designated as Series A Preferred Stock. In addition, 16,000 shares of Company Preferred Stock are designated as Series B Convertible Preferred Stock, of which 10,400 shares are outstanding. The capitalization of the Company as of August 14, 2001 is set forth on Exhibit B. All outstanding shares were issued in compliance with all applicable Federal and state securities laws. Except as contemplated by this Agreement or as set forth in the Company Disclosure Letter, the Company has not granted (i) any outstanding subscriptions, warrants, options, conversion privileges or other rights or agreements to purchase or otherwise acquire or issue any shares of capital stock from the Company (or shares reserved for such purpose), (ii) any preemptive rights or rights of first refusal with respect to the issuance of additional shares of capital stock of the Company other than as set forth in the Warrants and Investment Banking Warrants, and (iii) any commitments or understandings (oral or written) of the Company to issue any shares, warrants, options or other rights. Exhibit B sets forth the Company warrants, options, convertible securities and other Company stock purchase rights outstanding as of August 14, 2001, the number of shares of common stock issuable thereunder and the exercise or conversion price thereof, as the case may be. To the best of the Company's knowledge, except as set forth in the Company Disclosure Letter, none of the shares of Common Stock are subject to any shareholders' agreement, voting trust agreement or similar arrangement or understanding. Except as set forth in the Company Disclosure Letter, the Company has no outstanding bonds, debentures, notes or other obligations the holders of which have the right to vote (or which are convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter. 2.3 Common Stock Issuable upon Conversion of Series B Preferred and Exercise of Warrants and Investment Banking Warrants. The issuance of the shares of Common Stock (the "Underlying Shares") issuable upon conversion of the Series B Preferred or upon exercise of the Warrants and the Investment Banking Warrants has been duly authorized and the Underlying Shares have been, and at all times prior to such conversion or exercise will have been, duly reserved for issuance upon such conversion or exercise and, when so issued, will be validly issued, fully paid and non-assessable. 2.4 Brokers and Finders. The Company has not retained any investment banker, broker or finder in connection with the Contemplated Transactions. 2.5 No Conflict; Required Filings and Consents. (a) The execution and delivery of this Agreement and the Other Agreements by the Company do not, and the performance of this Agreement and the Other Agreements and the consummation by the Company of the Contemplated Transactions will not, (i) conflict with or violate the Certificate of Incorporation or By-Laws or equivalent organizational documents of the Company, (ii) conflict with or violate any law, rule, regulation, order, judgment or decree applicable to the Company or by which any property or asset of the Company is bound or affected, or (iii) except as set forth in the Company Disclosure Letter, result in any material breach of or constitute a material default (or an event which with notice or lapse of time or both would become a -4- 8 material default) under, result in the loss of a material benefit under, or give to others any right of purchase or sale, or any right of termination, amendment, acceleration, increased payments or cancellation of, or result in the creation of a lien or other encumbrance on any property or asset of the Company pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation to which the Company is a party or by which the Company or any property or asset of the Company is bound or affected. (b) The execution and delivery of this Agreement and the Other Agreements by the Company do not, and the performance of this Agreement and the Other Agreements and the consummation by the Company of the Contemplated Transactions will not, require any consent, approval, authorization or permit of, or filing with or notification to, any governmental or regulatory authority, domestic or foreign (each a "Governmental Entity") except for applicable requirements, if any, of the Securities Exchange Act of 1934, as amended (the "Exchange Act") or any state securities or "blue sky" laws ("Blue Sky Laws"). 2.6 Disclosure. No representation or warranty of the Company herein or in the Company Disclosure Letter and no information disclosed in the forms and reports filed with the Securities and Exchange Commission contained, when made, any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements contained herein or therein, in light of the circumstances under which they were made, not misleading, when made. 2.7 Rights Agreement. The Company agrees that the Purchased Securities are subject to the terms and provisions of the Amended Rights Agreement, and the Company agrees that the Purchaser shall have all of the rights and privileges set forth in the Amended Rights Agreement as if a signatory thereto. 2.8 Ownership of Preferred Stock. The transfer of the Series B Preferred to the Purchaser pursuant to this Agreement is duly authorized, and the Series B Preferred are validly issued, fully paid and non-assessable. Assuming that the purchase and sale of the Series B Preferred is effected pursuant to the terms of this Agreement and the Contemplated Transactions, as a result of the Contemplated Transactions, the Purchaser will be the sole record holder of all issued and outstanding shares of Series B Preferred and there are no presently outstanding rights to acquire or receive any shares of Series B Preferred. 2.9 Absence of Claims by the Company. As of the Closing Date, the Company will have no claim against the Seller under any contract or on any other legal basis whatsoever arising out of the Seller's ownership of the Purchased Securities, except for any breaches of any representations, warranties, duties or covenants under this Agreement. 2.10 Agreements Valid. Each of the following agreements (each of which is attached hereto) is a true and correct copy of the final, executed version of each such agreement, and, as of immediately prior to the Closing, is in full force and effect and represents a valid and binding agreement between the parties thereto: the Subscription Agreement, attached as Exhibit D; the -5- 9 Warrants, each of which is attached as Exhibit E; the Investment Banking Warrants, attached as Exhibit F; the Settlement Agreement, attached as Exhibit G; and the Rights Agreement, attached as Exhibit H. 2.11 No Representation. The Company makes no representation as to the accuracy of the representations and warranties made by the Sellers in Section 3 and the Purchaser in Section 4 of this Agreement. SECTION 3 REPRESENTATIONS AND WARRANTIES OF THE SELLERS Each Seller hereby severally warrants to the Purchaser and the Company, and agrees to, the following: 3.1 Formation and Status of Seller. If the Seller is a corporation or other legal entity, the Seller is duly incorporated or formed and validly existing under the laws of its jurisdiction of incorporation or formation. 3.2 Due Authorization. This Agreement has been duly and validly authorized, executed and delivered by, or on behalf of, the Seller, and, assuming the due authorization, execution and delivery by the Purchaser and the Company, constitutes a valid and binding obligation of the Seller enforceable against the Seller in accordance with its terms except as such enforceability may be limited by principles of public policy and subject to the laws of general application relating to bankruptcy, insolvency and the relief of debtors and rules of law governing specific performance, injunctive relief or other equitable remedies. All other documents to be authorized, executed and delivered by the Seller will be duly authorized, executed and delivered by the Seller and will be valid and binding obligations of the Seller enforceable in accordance with their respective terms, except as such enforceability may be limited by principles of public policy and subject to the laws of general application relating to bankruptcy, insolvency and the relief of debtors and rules of law governing specific performance, injunctive relief or other equitable remedies. 3.3 No Violation. Neither the execution and delivery of this Agreement nor the performance by the Seller of its obligations hereunder or under the Other Agreements will conflict with any agreement or commitment to which the Seller is a party, or violate any statute or law or any judgment, decree, order, regulation or rule of any court or other Governmental Entity applicable to the Seller. There are no legal proceedings pending, or to the Seller's knowledge, threatened, against such Seller that questions the validity of the Agreement or would prevent consummation of the Contemplated Transactions. The Seller is not a party or subject to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality. 3.4 No Consent Needed. To Seller's knowledge, no consent, waiver, approval, order or authorization of, or declaration, filing or registration with, any Governmental Entity or any third -6- 10 party is required to be made or obtained by the Seller in connection with the execution and delivery by the Seller of this Agreement or the Other Agreements or the performance by the Seller of its obligations hereunder or the consummation by the Seller of the Contemplated Transactions. 3.5 Tax and Legal Matters. The Seller has had an opportunity to review with its own tax and legal advisors the tax and legal consequences to the Seller of the Contemplated Transactions. The Seller understands that it must rely solely on its advisors and not on any statements or representations by the Purchaser or the Company, or any of their agents. The Seller further understands that it shall be responsible for its own tax liability that may arise as a result of the Contemplated Transactions. 3.6 Ownership of Company Shares. Seller is the sole record and beneficial owner of the number of shares of Series B Preferred and the Warrants or the Investment Banking Warrants set forth next to its name on Exhibit A, and such securities are not and will not at any time prior to or at the Closing be subject to any lien or to any rights of first refusal of any kind. Except as set forth in this Agreement or a schedule hereto, there are no options, warrants, calls, rights, commitments or agreements of any character, written or oral, to which the Seller is a party or by which he, she or it is bound obligating the Seller to issue, deliver, sell, repurchase or redeem, or cause to be issued, delivered, sold repurchased or redeemed, any shares of Series B Preferred or Warrants or Investment Banking Warrants or obligating the Seller to grant or enter into any such option, warrant, call, right, commitment or agreement and there will be no such agreements at any time prior to or at the Closing. The Seller has or prior to the Closing will have good and valid title to, and has the sole right to transfer such shares of Series B Preferred and Warrants and Investment Banking Warrants. Such interests constitute all of shares of Series B Preferred and Warrants and Investment Banking Warrants owned, beneficially or of record, by the Seller. The Purchaser will receive good and valid title to such shares of Series B Preferred and Warrants and Investment Banking Warrants in accordance with the Contemplated Transactions, subject to no claim, or lien retained, granted or permitted by the Seller. Except as contemplated in this Agreement, the Seller has not engaged in any sale or other transfer of its shares of Series B Preferred or Warrants or Investment Banking Warrants in contemplation of the Contemplated Transactions. 3.7 Absence of Claims by the Seller. As of the Closing Date, the Seller will have no claim against the Company or the Purchaser under any contract or on any other legal basis whatsoever, except for a claim against the Purchaser for the Purchaser's failure, if any, to pay the Purchase Price and the Investment Banking Warrant Price as specified in Section 1.1 and Section 1.2. 3.8 Offering. Subject to the accuracy of the Purchaser's representations in Section 4 hereof, the offer, sale and issuance of the Purchased Securities and Investment Banking Warrants to be issued in conformity with the terms of this Agreement constitute transactions exempt from the registration requirements of Section 5 of the Securities Act of 1933, as amended (the "Securities Act") and from the qualification requirements of the California Corporate Securities Laws of 1968, as amended. -7- 11 3.9 Brokers or Finders. The Seller has not engaged any brokers, finders or agents, and the Purchaser has not incurred, and will not incur, directly or indirectly, as a result of any action taken by the Company, any liability for brokerage or finders' fees or agents' commissions or any similar charges in connection with the Agreement. In the event that the preceding sentence is in any way inaccurate, the Seller hereby agrees to indemnify and hold harmless the Purchaser and the Company from any liability for any such commission or compensation in the nature of a brokerage or finder's fee or agent's commission (and the costs and expenses of defending against such liability or asserted liability) for which the Purchaser or the Company or any of their respective officers, partners, employees or representatives is responsible. 3.10 Rights Agreement and Stock Ownership. The Seller agrees that, effective as of the Closing, the Seller will no longer have any of the rights set forth in the Rights Agreement and will no longer hold any: shares of Series B Preferred, shares of Company Common Stock, warrants or options to purchase any shares of Series B Preferred or Common Stock, or other securities of the Company. 3.11 Investment Experience. The Seller is experienced in evaluating the unregistered securities of companies, has such knowledge and experience in financial or business matters that the Seller is capable of evaluating the merits and risks of the sale of the Purchased Securities and the Investment Banking Warrants, and has made an informed decision to sell the Purchased Securities and the Investment Banking Warrants. The Seller is aware that the Purchaser and the Company are planning to enter into a Merger Agreement pursuant to which the Purchaser will have the option, in its sole discretion, to purchase shares of Company common stock at a per share price of $2.00. 3.12 Agreements Valid. Each of the following agreements to which such Seller is a party (each of which is attached hereto) is a true and correct copy of the final, executed version of each such agreement, and, as to such Seller, is in full force and effect and represents a valid and binding agreement between the parties thereto as of immediately prior to the Closing: the Subscription Agreement, attached as Exhibit D; the Warrants, each of which is attached as Exhibit E; the Investment Banking Warrants, attached as Exhibit F; the Settlement Agreement, attached as Exhibit G; and the Rights Agreement, attached as Exhibit H. 3.13 No Representation. The Seller makes no representation as to the accuracy of the representations and warranties made by the Company in Section 2 and the Purchaser in Section 4 of this Agreement. SECTION 4 INVESTMENT REPRESENTATIONS OF THE PURCHASER The Purchaser represents and warrants to the Sellers and to the Company, and agrees to, the following: -8- 12 4.1 The Purchaser is acquiring the Purchased Securities and the Investment Banking Warrants for investment for its own account, not as a nominee or agent and not with a view to, or for resale in connection with, any distribution thereof, and has no present intention of selling, granting participation in, or otherwise distributing the Purchased Securities and the Investment Banking Warrants. The Purchaser further represents that the Purchaser does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer, or grant participation to such person or to any third person, with respect to any of the Purchased Securities and the Investment Banking Warrants. The Purchaser understands that the Purchased Securities and the Investment Banking Warrants have not been registered under the Securities Act, and are not required to be registered by reason of a specific exemption from the registration provisions of the Securities Act which depends upon, among other things, the bona fide nature of the investment intent as expressed herein. 4.2 The Purchaser is experienced in evaluating and investing in the unregistered securities of companies, can bear the economic risk of this investment and has such knowledge and experience in financial or business matters that the Purchaser is capable of evaluating the merits and risks of the investment in the Purchased Securities and the Investment Banking Warrants. The Purchaser understands that an investment in the Company involves substantial risks. The Purchaser further understands all of the risks related to the purchase of the Purchased Securities and the Investment Banking Warrants and that the purchase of the Purchased Securities and the Investment Banking Warrants will be a highly speculative investment. The Purchaser is able, without impairing its financial condition, to hold the Purchased Securities and the Investment Banking Warrants for an indefinite period of time and to suffer a complete loss of its investment. 4.3 The Purchaser is an "accredited investor" as such term is defined under Rule 501 of Regulation D, promulgated under the Securities Act. 4.4 The Purchaser is aware of the Company's business affairs and financial condition, and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Purchased Securities and the Investment Banking Warrants. The Purchaser further represents and acknowledges that the Purchaser is solely responsible for its own due diligence investigation of the Company and for its own analysis of the terms, merits and risks of this investment. 4.5 The Purchaser understands that the certificate evidencing the securities will be imprinted with a legend which prohibits the transfer of the securities unless they are registered or such registration is not required in the opinion of counsel satisfactory to the Company, and any other legend required under applicable state securities laws. The Purchaser understands that all certificates representing any of the Purchased Securities and the Investment Banking Warrants subject to this Transfer shall have endorsed thereon legends substantially in the following form: "THE SHARES REPRESENTED BY THIS CERTIFICATE [SECURITIES REPRESENTED BY THIS WARRANT] HAVE BEEN ACQUIRED FOR -9- 13 INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. SUCH SHARES [WARRANTS] MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT." 4.6 The Purchaser is aware of the provisions of Rule 144, promulgated under the Securities Act which, in substance, permits limited public resale of "restricted securities" in a non-public offering subject to the satisfaction of certain conditions, including, in case the securities have been held for less than two years: (1) the resale occurring not less than one year after the party has purchased and paid for the securities to be sold; (2) the availability of certain public information about the Company; (3) the sale being made through a broker in an unsolicited "broker's transaction" or in transactions directly with a market maker (as that term is defined under the Securities Exchange Act of 1934); and (4) the amount of securities being sold during any three-month period not exceeding the specified limitations stated therein. 4.7 The Purchaser further understands that in the event all of the applicable requirements of Rule 144 are not satisfied, registration under the Securities Act or compliance with a registration exemption will be required; and that, notwithstanding the fact that Rule 144 is not exclusive, the staff of the Securities and Exchange Commission has expressed its opinion that persons proposing to sell private placement securities other than in a registered offering and otherwise than pursuant to Rule 144 will have a substantial burden of proof in establishing that an exemption from registration is available for such offers or sale, and that such persons and their respective brokers who participate in such transactions do so at their own risk. 4.8 The Purchaser agrees that the Purchased Securities are subject to the terms and provisions of the Amended Rights Agreement, and the Purchaser agrees to be bound by all of the terms of the Amended Rights Agreement as if a signatory thereto. 4.9 As of the Closing Date, the Purchaser will have no claim against the Seller under any contract or on any other legal basis whatsoever, except for any breaches of any representations, warranties, duties or covenants under this Agreement that have an adverse effect on the Purchaser's right to own the Purchased Securities and the Investment Banking Warrants free and clear of any claim by any party to this Agreement or by any other party. 4.10 The Purchaser makes no representation as to the accuracy of the representations and warranties made by the Company in Section 2 and the Sellers in Section 3 of this Agreement. SECTION 5 GENERAL PROVISIONS 5.1 Governing Law. This Agreement shall be governed in all respects by the internal laws of the State of Delaware without regard to principles of conflicts of law. -10- 14 5.2 Entire Agreement; Amendment. This Agreement (together with the Amended Rights Agreement) represents the entire agreement among the parties with respect to the purchase of Purchased Securities and the Investment Banking Warrants. Except as expressly provided herein, neither this Agreement nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument signed by the party against whom enforcement of any such amendment, waiver, discharge or termination is sought. The Sellers agree that any amendment, waiver, discharge or termination shall be binding upon and effective against all Sellers if such amendment, waiver, discharge or termination is signed by the Sellers selling a majority of the Purchased Securities. 5.3 Notices. Any notice, demand or request required or permitted to be given by the Seller, the Purchaser or the Company pursuant to the terms of this Agreement shall be in writing and shall be deemed given when delivered personally or, if sent by mail, at the earlier of its receipt or 72 hours after the same has been deposited in a regularly maintained receptacle for the deposit of the United States mail, addressed and mailed to the parties at the following addresses or such other address as a party may request by notifying the other in writing: If to the Purchaser: with a copy to: VISX, Incorporated Wilson Sonsini Goodrich & Rosati, PC 3400 Central Expressway 650 Page Mill Road Santa Clara, CA 95051-0703 Palo Alto, CA 94301 Facsimile: (408) 773-7051 Facsimile: (650) 493-6811 Attention: Derek Bertocci Attention: John V. Roos, Esq. If to the Sellers: with a copy to: At the address set forth on Exhibit A Hahn & Hessen LLP 350 Fifth Avenue New York, NY 10018 Facsimile: (212) 244-2078 Attention: James C. Kardon, Esq. If to the Company: with a copy to: Medjet Inc. Kelley Drye & Warren 1090 King George Post Road, Suite 301 101 Park Avenue Edison, NJ 08837 New York, NY 10178-0002 Facsimile: (732) 738-3984 Facsimile: (212) 808-7897 Attention: Dr. Eugene Gordon Attention: Jane E. Jablons, Esq.
5.4 Assignment. Subject to any restrictions on transferability set forth in the Amended Rights Agreement, the rights and benefits of the Purchaser under this Agreement shall be -11- 15 transferable to any one or more persons or entities, and all covenants and agreements hereunder shall inure to the benefit of, and be enforceable by the Purchaser's successors and assigns. 5.5 No Waiver. Either party's failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of any such provision or provisions, nor prevent that party thereafter from enforcing each and every other provision of this Agreement. The rights granted both parties herein are cumulative and shall not constitute a waiver of either party's right to assert all other legal remedies available to it under the circumstances. 5.6 Descriptive Headings. The descriptive headings herein have been inserted for convenience only and shall not be deemed to limit or otherwise affect the construction of any provisions hereof. 5.7 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original and all of which shall constitute the same instrument, but only one of which need be produced. [remainder of the page intentionally left blank] -12- 16 IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day and year first set forth above. SELLERS: ADAM SMITH INVESTMENT PARTNERS, L.P. By: Adam Smith Capital Management, L.L.C., General Partner By:_______________________________________ Name: Orin Hirschman Title: Partner ADAM SMITH INVESTMENTS, LTD By:_______________________________________ Name: Title: By:_______________________________________ Name: Title: RICHARD AND ANA GROSSMAN JTWROS By:_______________________________________ Name: Title: ORIN HIRSCHMAN __________________________________________ Orin Hirschman PAUL PACKER __________________________________________ Paul Packer [SIGNATURE PAGE TO SHARE TRANSFER AGREEMENT] 17 ADAM-JACK M. DODICK, MD GENERAL PARTNERSHIP By:_______________________________________ Name: Title: __________________________________________ HERSHEL P. BERKOWITZ Hershel P. Berkowitz ADAM SMITH & COMPANY, INC. By:_______________________________________ Name: Title: PURCHASER: VISX, INCORPORATED By:_______________________________________ Name: Derek A. Bertocci Title: Vice President, Controller THE COMPANY: MEDJET INC. By:_______________________________________ Name: Eugene Gordon Title: Chairman and Chief Executive Officer [SIGNATURE PAGE TO SHARE TRANSFER AGREEMENT] 18 EXHIBIT A SELLERS
SHARES OF SERIES B NUMBER OF PRICE PER SELLER PREFERRED HELD WARRANTS HELD UNIT TOTAL PRICE ------------------------------------------------------------------------------------------------------ Adam Smith Investment Partners, L.P. c/o Richard Grossman 259 Oakford Street West Hempstead, NY 11552 6,760 676,000 $125.00 $845,000 ------------------------------------------------------------------------------------------------------ Adam Smith Investments, Ltd. Tropic Isle Building P. O. Box 438 Road Town, Tortola British Virgin Islands 1,040 104,000 $125.00 $130,000 ------------------------------------------------------------------------------------------------------ Richard and Ana Grossman JTWROS 259 Oakford Street West Hempstead, NY 11552 520 52,000 $125.00 $65,000 ------------------------------------------------------------------------------------------------------ Orin Hirschman 1231 East 10th Street Brooklyn, NY 11230 494 49,400 $125.00 $61,750 ------------------------------------------------------------------------------------------------------ Paul Packer 785 Addison Street Woodmere, NY 11598 234 23,400 $125.00 $29,250 ------------------------------------------------------------------------------------------------------ Adam-Jack M. Dodick, MD General Partnership c/o Richard Grossman 259 Oakford Street West Hempstead, NY 11552 1,300 130,000 $125.00 $162,500 ------------------------------------------------------------------------------------------------------ Hershel P. Berkowitz 410 Yeshiva Lane Baltimore, MD 21208-1102 52 5,200 $125.00 $6,500 ------------------------------------------------------------------------------------------------------ Adam Smith & Company, Inc. c/o Richard Grossman 259 Oakford Street West Hempstead, NY 11552 325,000 $1 ------------------------------------------------------------------------------------------------------ TOTAL 10,400 1,365,000 $125.00 $1,300,001 ------------------------------------------------------------------------------------------------------
19 EXHIBIT B COMPANY CAPITALIZATION 20 EXHIBIT C AMENDMENT TO REGISTRATION RIGHTS AGREEMENT 21 EXHIBIT D SUBSCRIPTION AGREEMENT 22 EXHIBIT E WARRANTS 23 EXHIBIT F INVESTMENT BANKING WARRANTS 24 EXHIBIT G SETTLEMENT AGREEMENT 25 EXHIBIT H REGISTRATION RIGHTS AGREEMENT EX-2 4 f75398ex2.txt EXHIBIT 2 1 ================================================================================ AGREEMENT AND PLAN OF MERGER AND REORGANIZATION BY AND AMONG VISX, INCORPORATED, ORION ACQUISITION CORP. AND MEDJET INC. DATED AS OF AUGUST 17, 2001 ================================================================================ 2 TABLE OF CONTENTS
PAGE ---- ARTICLE I THE MERGER.............................................................................2 1.1 The Merger........................................................................2 1.2 Effective Time; Closing...........................................................2 1.3 Effects of the Merger.............................................................3 1.4 Certificate of Incorporation; Bylaws..............................................3 1.5 Directors and Officers............................................................3 1.6 Effect on Capital Stock...........................................................3 1.7 Dissenting Shares.................................................................4 1.8 Surrender of Certificates.........................................................5 1.9 No Further Ownership Rights in Company Common Stock...............................6 1.10 Lost, Stolen or Destroyed Certificates............................................6 1.11 Taking of Necessary Action; Further Action........................................6 ARTICLE II REPRESENTATIONS AND WARRANTIES OF COMPANY.............................................6 2.1 Organization and Qualification; Subsidiaries......................................6 2.2 Certificate of Incorporation and Bylaws...........................................7 2.3 Capitalization....................................................................7 2.4 Authority Relative to this Agreement..............................................9 2.5 No Conflict; Required Filings and Consents........................................9 2.6 Compliance; Permits..............................................................10 2.7 SEC Filings; Financial Statements................................................10 2.8 No Undisclosed Liabilities.......................................................11 2.9 Absence of Certain Changes or Events.............................................11 2.10 Absence of Litigation............................................................12 2.11 Employee Benefit Plans...........................................................12 2.12 Labor Matters....................................................................14 2.13 Proxy Statement..................................................................14 2.14 Restrictions on Business Activities..............................................14 2.15 Title to Property................................................................15 2.16 Taxes............................................................................15 2.17 Environmental Matters............................................................17 2.18 Brokers..........................................................................17 2.19 Intellectual Property............................................................17 2.20 Agreements, Contracts and Commitments............................................21 2.21 Insurance........................................................................22 2.22 Board Approval...................................................................22 2.23 Vote Required....................................................................22 2.24 State Takeover Statutes..........................................................22 ARTICLE III REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB.............................22 3.1 Organization and Qualification; Subsidiaries.....................................23
-i- 3 TABLE OF CONTENTS (CONTINUED)
PAGE ---- 3.2 Authority Relative to this Agreement..........................................................23 3.3 No Conflict; Required Filings and Consents....................................................23 3.4 Ownership of Merger Sub; No Prior Activities..................................................24 ARTICLE IV CONDUCT PRIOR TO THE EFFECTIVE TIME...............................................................24 4.1 Conduct of Business by the Company............................................................24 ARTICLE V ADDITIONAL AGREEMENTS..............................................................................27 5.1 Initial Payment...............................................................................27 5.2 Related Agreements............................................................................27 5.3 Parent Warrant................................................................................27 5.4 Proxy Statement...............................................................................28 5.5 Stockholder Meeting...........................................................................28 5.6 Confidentiality; Access to Information........................................................29 5.7 No Solicitation...............................................................................29 5.8 Parent Standstill.............................................................................32 5.9 Public Disclosure.............................................................................32 5.10 Reasonable Efforts; Notification..............................................................32 5.11 Third Party Consents..........................................................................33 5.12 401(k) Plan...................................................................................34 5.13 Disclosure Supplements........................................................................34 5.14 Indemnification...............................................................................34 ARTICLE VI CONDITIONS TO THE MERGER..........................................................................34 6.1 Conditions to Obligations of Each Party to Effect the Merger..................................34 6.2 Additional Conditions to Obligations of the Company...........................................35 6.3 Additional Conditions to the Obligations of Parent and Merger Sub.............................36 ARTICLE VII TERMINATION, AMENDMENT AND WAIVER................................................................37 7.1 Termination...................................................................................37 7.2 Notice of Termination.........................................................................39 7.3 Effect of Termination.........................................................................39 7.4 Fees and Expenses.............................................................................41 7.5 Amendment.....................................................................................41 7.6 Extension; Waiver.............................................................................41 ARTICLE VIII GENERAL PROVISIONS..............................................................................42 8.1 Survival of Representations and Warranties....................................................42 8.2 Notices.......................................................................................42 8.3 Interpretation; Definitions...................................................................43 8.4 Counterparts..................................................................................43 8.5 Entire Agreement; Third Party Beneficiaries...................................................43
-ii- 4 TABLE OF CONTENTS (CONTINUED)
PAGE ---- 8.6 Severability..................................................................................44 8.7 Other Remedies; Specific Performance..........................................................44 8.8 Governing Law.................................................................................44 8.9 Rules of Construction.........................................................................44 8.10 Assignment....................................................................................44
INDEX OF EXHIBITS Exhibit A Form of Voting Agreement Exhibit B Form of Non-Competition Agreement Exhibit C Form of License Agreement Exhibit D Form of Omnibus Waiver and Amendment Agreement Exhibit E Form of Parent Warrant Exhibit F Form of Certificate of Merger Exhibit G Form of Amended and Restated Certificate of Incorporation of the Company
-iii- 5 AGREEMENT AND PLAN OF MERGER AND REORGANIZATION This AGREEMENT AND PLAN OF MERGER AND REORGANIZATION is made and entered into as of August 17, 2001, by and among VISX, Incorporated, a Delaware corporation ("Parent"), Orion Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of Parent ("Merger Sub"), and Medjet Inc., a Delaware corporation (the "Company"). BACKGROUND A. Upon the terms and subject to the conditions of this Agreement (as defined in Section 1.2 below) and in accordance with the Delaware General Corporation Law ("Delaware Law"), Parent and the Company intend to enter into a business combination transaction. B. The Board of Directors of the Company (i) has determined that the Merger (as defined in Section 1.1) is advisable and in the best interests of the Company and its stockholders, (ii) has approved and declared advisable this Agreement, and has approved the Merger and the other transactions contemplated by this Agreement and (iii) has determined to recommend that the stockholders of the Company adopt and approve this Agreement and approve the Merger. C. The Boards of Directors of each of Parent and Merger Sub (i) have determined that the Merger is advisable and in the best interests of Parent, Merger Sub and their respective stockholders, and (ii) have approved this Agreement, the Merger and the other transactions contemplated by this Agreement. D. Each of the respective Boards of Directors of the Company, Parent and Merger Sub recognizes that it is a condition of this Agreement, as set forth in Section 7.1(a) below, that Parent may terminate this Agreement at any time, and for any reason or no reason. In consideration for such termination right, and as a material inducement to the Company to enter into this Agreement, Parent shall pay to the Company an amount equal to Five Hundred Thousand Dollars ($500,000.00), as described in Section 5.1 below, concurrently with the execution and delivery of this Agreement. E. Concurrent with the execution and delivery of this Agreement, as a material inducement to Parent and Merger Sub to enter into this Agreement, (i) Eugene I. Gordon (the "Principal Shareholder") is entering into a Voting Agreement, in substantially the form attached as Exhibit A (the "Voting Agreement"); (ii) the Principal Shareholder is entering into a Non-Competition Agreement, in substantially the form attached as Exhibit B (the "Non-Competition Agreement"); (iii) Parent and the Company are entering into a License Agreement, in substantially the form attached as Exhibit C (the "License Agreement"); and (iv) Parent and the Company are entering into an Omnibus Waiver and Amendment Agreement, in substantially the form attached as Exhibit D (the "Omnibus Waiver and Amendment Agreement"). The Voting Agreement, Non-Competition Agreement, License Agreement and Omnibus Waiver and Amendment Agreement are collectively referred to as the "Related Agreements." F. Concurrent with the execution and delivery of this Agreement, Parent is purchasing from entities affiliated with Adam Smith & Co. ("ASC"): (i) 10,400 shares of the Company's Series B Convertible Preferred Stock (the "Series B Preferred"), which represent all of the Company's 6 outstanding shares of Preferred Stock, (ii) warrants to purchase a total of 1,040,000 shares of the Company's Common Stock (the "Common Stock Warrants"), and (iii) a warrant to purchase a total of 325,000 shares of the Company's Common Stock (the "ASC Warrant"). At the Effective Time (as defined in Section 1.2 below), the 10,400 shares of Series B Preferred, the Common Stock Warrants and the ASC Warrant will be canceled and extinguished without any conversion or exercise thereof. If this Agreement is terminated pursuant to Article VII hereof, then certain of Parent's rights as the owner of the Series B Preferred, the Common Stock Warrants and ASC Warrant will be subject to certain limitations, as set forth more fully in Section 7.3 below. G. Concurrent with the execution and delivery of this Agreement, as a material inducement to Parent and Merger Sub to enter into this Agreement, the Company is issuing and delivering to Parent a three-year warrant, in the form attached as Exhibit E (the "Parent Warrant") to purchase 1,320,000 shares of Company Common Stock at a per share exercise price of seventy-five cents ($0.75), as described more fully in Section 5.3 below. At the Effective Time (as defined in Section 1.2 below), the Parent Warrant will be canceled and extinguished without any conversion or exercise thereof. NOW, THEREFORE, in consideration of the covenants, promises and representations set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: ARTICLE I THE MERGER 1.1 The Merger. At the Effective Time (as defined in Section 1.2) and subject to and upon the terms and conditions of this Agreement and the applicable provisions of Delaware Law, Merger Sub shall be merged with and into the Company (the "Merger"), the separate corporate existence of Merger Sub shall cease and the Company shall continue as the surviving corporation. The Company as the surviving corporation after the Merger is sometimes referred to as the "Surviving Corporation." 1.2 Effective Time; Closing. Subject to the provisions of this Agreement, the parties shall cause the Merger to be consummated by filing a Certificate of Merger, in the form attached as Exhibit F with the Secretary of State of the State of Delaware in accordance with the relevant provisions of Delaware Law (the "Certificate of Merger") (the time of such filing (or such later time, as may be agreed in writing by the Company and Parent and specified in the Certificate of Merger) being the "Effective Time") as soon as practicable on the Closing Date (as defined below). Unless the context otherwise requires, the term "Agreement" refers collectively to this Agreement and Plan of Merger and Reorganization and the Certificate of Merger. The closing of the Merger (the "Closing") shall take place at either (in Parent's option) the offices of Kelley Drye & Warren LLP, 101 Park Avenue, New York, New York or Wilson Sonsini Goodrich & Rosati, Professional Corporation, 245 Park Avenue, New York, New York, after satisfaction or waiver of all conditions to Closing set forth in Article VI, including without limitation satisfaction in Parent's sole discretion of the closing condition set forth in Section 6.3(m); provided, however, that the Closing shall occur no sooner than five business days after delivery of the written certificate referred to in such section (the "Closing Date"). -2- 7 1.3 Effects of the Merger. At the Effective Time, the effects of the Merger shall be as provided in this Agreement and the applicable provisions of Delaware Law. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time all the property, rights, privileges, powers and franchises of the Company and Merger Sub shall vest in the Surviving Corporation, and all debts, liabilities and duties of the Company and Merger Sub shall become the debts, liabilities and duties of the Surviving Corporation. 1.4 Certificate of Incorporation; Bylaws. (a) At the Effective Time, the Certificate of Incorporation of the Merger Sub, as in effect immediately prior to the Effective Time, shall be the Certificate of Incorporation of the Surviving Corporation until thereafter amended as provided by law and such Certificate of Incorporation of the Surviving Corporation; provided, however, that at the Effective Time the Certificate of Incorporation of the Surviving Corporation shall be amended and restated in the form attached as Exhibit G. (b) The Bylaws of Merger Sub, as in effect immediately prior to the Effective Time, shall be, at the Effective Time, the Bylaws of the Surviving Corporation until thereafter amended. 1.5 Directors and Officers. The initial directors of the Surviving Corporation shall be the directors of Merger Sub immediately prior to the Effective Time, until their respective successors are duly elected or appointed and qualified. The initial officers of the Surviving Corporation shall be the officers of Merger Sub immediately prior to the Effective Time, until their respective successors are duly appointed. 1.6 Effect on Capital Stock. Subject to the terms and conditions of this Agreement, at the Effective Time, by virtue of the Merger and without any action on the part of Merger Sub, the Company or the holders of any of the following securities, the following shall occur: (a) Conversion of Company Common Stock. At the Effective Time, each outstanding share of common stock of the Company ("Company Common Stock"), upon the terms and subject to the conditions set forth below and throughout this Agreement, will be canceled and extinguished and be converted automatically into the right to receive Two Dollars ($2.00) (the "Per Share Purchase Price"), upon the terms and subject to conditions set forth in this Section 1.6 and throughout this Agreement. The Per Share Purchase Price shall be appropriately adjusted to reflect fully the effect of any stock split, reverse stock split, stock dividend, reorganization, recapitalization or like change with respect to Company Common Stock occurring after the date hereof and prior to the Effective Time (a "Recapitalization"). (b) Cancellation of Parent-Owned Stock and Securities. Each share of Company capital stock and all warrants to purchase Company capital stock held by the Company or owned by Merger Sub, Parent or any direct or indirect wholly-owned subsidiary of the Company or of Parent immediately prior to the Effective Time shall be canceled and extinguished without any conversion thereof. -3- 8 (c) Stock Options and Warrants. At the Effective Time, each outstanding option to purchase shares of Company Common Stock (each, a "Company Stock Option") under the Company's 1994 Stock Option Plan (the "Company Option Plan") or otherwise and each outstanding warrant to purchase shares of Company Common Stock (each, a "Company Warrant") not exercised prior to the Effective Time shall be canceled and extinguished. Parent will pay to each holder of a Company Stock Option or a Company Warrant the difference between $2.00 and the exercise price per share (if less than $2.00) of Company Common Stock underlying such Company Stock Option or Company Warrant multiplied by the total number of shares of Company Common Stock underlying such Company Stock Option or Company Warrant (other than any Company Warrant held by Parent). Parent will not pay any amounts with respect to Company Stock Options or Company Warrants that have an exercise price of equal to or greater than $2.00. (d) Capital Stock of Merger Sub. Each share of common stock of Merger Sub (the "Merger Sub Common Stock") issued and outstanding immediately prior to the Effective Time shall be converted into one validly issued, fully paid and nonassessable share of common stock of the Surviving Corporation. Each certificate evidencing ownership of shares of Merger Sub Common Stock shall evidence ownership of such shares of capital stock of the Surviving Corporation. Accordingly, as a result of the Merger, Parent (as the owner of all outstanding shares of Merger Sub Common Stock immediately prior to the Effective Time) shall be the owner of all of the capital stock of the Surviving Corporation immediately after the Effective Time. (e) Shareholder Loans. In the event that any holder of Company Common Stock has outstanding loans owed to the Company as of the Effective Time, the consideration payable to such holder of Company Common Stock pursuant to this Section 1.6 shall be reduced by an amount equal to the outstanding principal plus accrued interest of such holder's loans as of the Effective Time. The reduction in the consideration contemplated in the preceding sentence is intended to effect a payment mechanism for the satisfaction and not the forgiveness of any such outstanding loan. 1.7 Dissenting Shares. (a) Notwithstanding any other provisions of this Agreement to the contrary, any shares of Company Common Stock held by a holder who has exercised and perfected appraisal rights for such shares in accordance with Section 262 of Delaware Law and who has not effectively withdrawn or lost such appraisal rights ("Dissenting Shares"), shall not be converted into or represent a right to receive the consideration for Company Common Stock set forth in Section 1.6 hereof, but the holder thereof shall only be entitled to such rights as are provided by Delaware Law. (b) Notwithstanding the provisions of Section 1.7(a) hereof, if any holder of Dissenting Shares shall effectively withdraw or lose (through failure to perfect or otherwise) such holder's appraisal rights under Delaware Law, then, as of the later of the Effective Time and the occurrence of such event, such holder's shares shall automatically be converted into and represent only the right to receive the consideration for Company Common Stock set forth in Section 1.6 hereof, without interest thereon, upon surrender of the certificate representing such shares. -4- 9 (c) The Company shall give Parent (i) prompt notice of any written demand for appraisal received by the Company pursuant to the applicable provisions of Delaware Law, and (ii) the opportunity to participate in all negotiations and proceedings with respect to such demands. The Company shall not, except with the prior written consent of Parent, make any payment with respect to any such demands or offer to settle or settle any such demands. 1.8 Surrender of Certificates. (a) Exchange Agent. Parent shall select a bank or trust company reasonably acceptable to the Company to act as the exchange agent (the "Exchange Agent") in the Merger. (b) Parent to Provide Aggregate Consideration. Promptly after the Effective Time, Parent shall make available to the Exchange Agent for exchange in accordance with this Article I, the Aggregate Consideration payable pursuant to Section 1.6 in exchange for outstanding shares of Company Common Stock. "Aggregate Consideration" shall mean the sum total of the amounts payable in exchange for outstanding shares of Company Common Stock pursuant to Section 1.6. (c) Exchange Procedures. As soon as practicable after the Effective Time, Parent shall cause the Exchange Agent to mail to each holder of record (as of the Effective Time) of a certificate or certificates (the "Certificates"), which immediately prior to the Effective Time represented outstanding shares of Company Common Stock whose shares were converted into the right to receive the amounts payable pursuant to Section 1.6, (i) a letter of transmittal in customary form (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon delivery of the Certificates to the Exchange Agent and shall contain such other provisions as Parent may reasonably specify) and (ii) instructions for use in effecting the surrender of the Certificates in exchange for the amounts payable pursuant to Section 1.6. Upon surrender of Certificates for cancellation to the Exchange Agent or to such other agent or agents as may be appointed by Parent, together with such letter of transmittal, duly completed and validly executed in accordance with the instructions thereto, the holders of such Certificates shall be entitled to receive the amounts payable pursuant to Section 1.6, and the Certificates so surrendered shall forthwith be canceled. Until so surrendered, the outstanding Certificates will be deemed from and after the Effective Time, for all corporate purposes to evidence only the right to receive the amounts payable pursuant to Section 1.6. (d) Required Withholding. Any of the Exchange Agent, Parent or the Surviving Corporation, as the case may be, shall be entitled to deduct and withhold from any consideration payable or otherwise deliverable pursuant to this Agreement to any holder or former holder of Company Common Stock such amounts as may be required to be deducted or withheld therefrom under the Internal Revenue Code of 1986, as amended (the "Code") or under any provision of state, local or foreign tax law or under any other applicable legal requirement. To the extent such amounts are so deducted or withheld, such amounts shall be treated for all purposes under this Agreement as having been paid to the person to whom such amounts would otherwise have been paid. (e) No Liability. Notwithstanding anything to the contrary in this Section 1.8, neither the Exchange Agent, Parent, the Surviving Corporation nor any party shall be liable to a -5- 10 holder of shares of Company Common Stock for any amount properly paid to a public official pursuant to any applicable abandoned property, escheat or similar law. 1.9 No Further Ownership Rights in Company Common Stock. The Aggregate Consideration shall be deemed to have been paid in full satisfaction of all rights pertaining to shares of Company Common Stock, and there shall be no further registration of transfers on the records of the Surviving Corporation of shares of Company Common Stock that were outstanding immediately prior to the Effective Time. If, after the Effective Time, Certificates are presented to the Surviving Corporation for any reason, they shall be canceled and exchanged as provided in this Article I. 1.10 Lost, Stolen or Destroyed Certificates. In the event that any Certificates shall have been lost, stolen or destroyed, the Exchange Agent shall pay the amounts payable pursuant to Section 1.6 in exchange for such lost, stolen or destroyed Certificates, upon the making of an affidavit of that fact by the holder thereof; provided, however, that Parent may, in its reasonable discretion and as a condition precedent to the payment of the amounts payable pursuant to Section 1.6, require the owner of such lost, stolen or destroyed Certificates to deliver a bond in such sum as it may reasonably direct as indemnity against any claim that may be made against Parent, the Surviving Corporation or the Exchange Agent with respect to the Certificates alleged to have been lost, stolen or destroyed. 1.11 Taking of Necessary Action; Further Action. If, at any time after the Effective Time, any further action is necessary or desirable to carry out the purposes of this Agreement and to vest the Surviving Corporation with full right, title and possession to all assets, property, rights, privileges, powers and franchises of the Company and Merger Sub, the current officers and directors of the Company and Merger Sub will, to the extent reasonable and at the sole expense of the Surviving Corporation, take all such lawful and necessary action. ARTICLE II REPRESENTATIONS AND WARRANTIES OF COMPANY The Company represents and warrants to Parent and Merger Sub as follows, subject to such exceptions as are specifically disclosed in writing in the disclosure schedule supplied by the Company to Parent dated as of the date hereof (the "Company Schedule"). The Company Schedule shall be arranged in sections corresponding to the numbered and lettered paragraphs contained in this Article II, and the disclosure of any section of the Company Schedule shall qualify other paragraphs in this Article II only to the extent that it is reasonably apparent from a reading of such disclosure that it also qualifies or applies to such other paragraph. 2.1 Organization and Qualification; Subsidiaries. (a) The Company is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has the requisite corporate power and authority to own, lease and operate its assets and properties and to carry on its business as it is now being conducted. The Company is in possession of all franchises, grants, authorizations, licenses, permits, easements, consents, certificates, approvals and orders ("Approvals") necessary to own, lease and operate the properties it purports to own, operate or lease and to carry on its business -6- 11 as it is now being conducted, except where the failure to have such Approvals would not, individually or in the aggregate, be material to the Company. The Company is duly qualified or licensed as a foreign corporation to do business, and is in good standing, in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its activities makes such qualification or licensing necessary, except for such failures to be so duly qualified or licensed and in good standing that would not, either individually or in the aggregate, have a Material Adverse Effect on the Company. (b) The Company has no subsidiaries. The Company has not agreed nor is obligated to make nor be bound by any written, oral or other agreement, contract, subcontract, lease, binding understanding, instrument, note, option, warranty, purchase order, license, sublicense, insurance policy, benefit plan, commitment or undertaking of any nature, as of the date hereof or as may hereafter be in effect (a "Contract") under which it may become obligated to make, any future investment in or capital contribution to any other entity. The Company does not directly or indirectly own any equity or similar interest in or any interest convertible, exchangeable or exercisable for, any equity or similar interest in, any corporation, partnership, joint venture or other business, association or entity. 2.2 Certificate of Incorporation and Bylaws. The Company has previously furnished to Parent a complete and correct copy of its certificate of incorporation and bylaws as amended to date (together, the "Company Charter Documents"). Such Company Charter Documents are in full force and effect. The Company is not in violation of any of the provisions of the Company Charter Documents. 2.3 Capitalization. (a) The authorized capital stock of the Company consists of: 30,000,000 shares of Company Common Stock, and 1,000,000 shares of Preferred Stock ("Company Preferred Stock"), which may be designated as Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, and Series B Convertible Preferred Stock. The Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock consist of an aggregate of not more than 400,000 shares, of which 110,000 are designated as Series A Preferred Stock. In addition, 16,000 shares of Company Preferred Stock are designated as Series B Convertible Preferred Stock, each having par value $0.01 per share. At the close of business on August 14, 2001: (i) 3,901,431 shares of Company Common Stock were issued and outstanding, all of which are validly issued, fully paid and nonassessable; (ii) no shares of Series A Preferred Stock were issued or outstanding; (iii) no shares of Series B Preferred Stock were issued or outstanding; (iv) no shares of Series C Preferred Stock were issued or outstanding; (v) 10,400 shares of Series B Convertible Preferred Stock were issued and outstanding, all of which are validly issued, fully paid and nonassessable; -7- 12 (vi) 33,789 shares of Company Common Stock were held in treasury by the Company; (vii) 513,046 shares of Company Common Stock were reserved for issuance upon the exercise of outstanding options to purchase Company Common Stock under the Company Option Plan; (viii) no shares of Company Common Stock were reserved for issuance upon the exercise of other outstanding options to purchase Company Common Stock; (ix) 133,531 shares of Company Common Stock were available for future grant under the Company Option Plan; (x) 1,440,772 shares of Company Common Stock were reserved for future issuance upon conversion of warrants of the Company. (b) Section 2.3(b) of the Company Schedule sets forth the following information with respect to each Company Stock Option outstanding as of August 14, 2001: (i) the name of the optionee; (ii) the particular plan pursuant to which such Company Stock Option was granted; (iii) the number of shares of Company Common Stock subject to such Company Stock Option; (iv) the exercise price of such Company Stock Option; (v) the date on which such Company Stock Option was granted; (vi) the applicable vesting schedule; and (vii) the date on which such Company Stock Option expires. The Company has made available to Parent accurate and complete copies of all stock option plans pursuant to which the Company has granted such Company Stock Options that are currently outstanding and the form of all stock option agreements evidencing such Company Stock Options. Section 2.3(b) of the Company Schedule also sets forth the following information with respect to each Company Warrant outstanding as of August 14, 2001: (i) the name of the warrant holder; (ii) the number of shares of Company Common Stock subject to such Company Warrant; (iii) the exercise price of such Company Warrant; (iv) the date on which such Company Warrant was granted; (v) any applicable performance based provisions of such Company Warrant; (vi) the date on which such Company Warrant expires. All shares of Company Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instrument pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. Except as set forth in Section 2.3(b) of the Company Schedule, there are no commitments or agreements of any character to which the Company is bound obligating the Company to accelerate the vesting of any Company Stock Option or Company Warrants as a result of the Merger. All outstanding shares of Company Common Stock and all outstanding Company Stock Options have been issued and granted in compliance with (i) all applicable securities laws and other applicable Legal Requirements (as defined below) and (ii) all requirements set forth in applicable Contracts. For the purposes of this Agreement, "Legal Requirements" means any federal, state, local, municipal, foreign or other law, statute, constitution, principle of common law, resolution, ordinance, code, edict, decree, rule, regulation, ruling or requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Entity (as defined below). (c) Except as set forth in Section 2.3(b) of the Company Schedule, there are no subscriptions, options, warrants, equity securities, partnership interests or similar ownership -8- 13 interests, calls, rights (including preemptive rights), commitments or agreements of any character to which the Company is a party or by which it is bound obligating the Company to issue, deliver or sell, or cause to be issued, delivered or sold, or repurchase, redeem or otherwise acquire, or cause the repurchase, redemption or acquisition of, any shares of capital stock, partnership interests or similar ownership interests of the Company or obligating the Company to grant, extend, accelerate the vesting of or enter into any such subscription, option, warrant, equity security, call, right, commitment or agreement. As of the date of this Agreement, there are no registration rights and there is, except for the Voting Agreement, no voting trust, proxy, rights plan, antitakeover plan or other agreement or understanding to which the Company is a party or by which it is bound with respect to any equity security of any class of the Company. 2.4 Authority Relative to this Agreement. The Company has all necessary corporate power and authority to execute and deliver this Agreement and the Related Agreements and to perform its obligations hereunder and thereunder, subject to obtaining the approval of the stockholders of the Company of the Merger and this Agreement, to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby and the execution and delivery of the Related Agreements by the Company and the consummation by the Company of the transactions contemplated thereby have been duly and validly authorized by all necessary corporate action on the part of the Company, and no other corporate proceedings on the part of the Company are necessary to authorize this Agreement and the Related Agreements, or to consummate the transactions so contemplated (other than, with respect to the Merger, the approval and adoption of the Merger and this Agreement by a majority of the votes entitled to be cast by the holders of the Company Common Stock and Series B Convertible Preferred Stock (voting on an as-converted to Company Common Stock basis), voting together as a single class, in accordance with Delaware Law and the Company Charter Documents). This Agreement and the Related Agreements have been duly and validly executed and delivered by the Company and, assuming the due authorization, execution and delivery by Parent and Merger Sub, and subject to obtaining the approval of the Company's stockholders of the Merger and this Agreement, constitute legal and binding obligations of the Company, enforceable against the Company in accordance with their terms except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' and contracting parties' rights generally and except as enforceability may be subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). 2.5 No Conflict; Required Filings and Consents. (a) The execution and delivery of this Agreement and the Related Agreements by the Company do not, and the performance of this Agreement and the Related Agreements by the Company shall not, (i) conflict with or violate the Company Charter Documents, (ii) subject to obtaining the approval of the Company's stockholders of the Merger and this Agreement and compliance with the requirements set forth in Section 2.5(b) below, conflict with or violate any law, rule, regulation, order, judgment or decree applicable to the Company by which its properties is bound or affected, or (iii) 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 impair the Company's rights or alter the rights or obligations of any third party under, or give to others any rights of termination, amendment, -9- 14 acceleration or cancellation of, or result in the creation of a lien or encumbrance on any of the properties or assets of the Company pursuant to, any material note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation to which the Company is a party or by which the Company or its respective properties are bound or affected, except to the extent such conflict, violation, breach, default, impairment or other effect could not in the case of clauses (ii) or (iii), individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company. (b) The execution and delivery of this Agreement and the Related Agreements by the Company do not, and the performance of this Agreement and the Related Agreements by the Company shall not, require any consent, approval, authorization or permit of, or filing with or notification to, any court, administrative agency, commission, governmental or regulatory authority, domestic or foreign (a "Governmental Entity"), except (A) for applicable requirements, if any, of the Securities Act of 1933, as amended (the "Securities Act"), the Securities Exchange Act of 1934, as amended (the "Exchange Act"), state securities laws ("Blue Sky Laws"), the pre-merger notification requirements (the "HSR Approval") of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), the rules and regulations of Nasdaq, and the filing and recordation of the Certificate of Merger as required by Delaware Law and (B) where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not have a material adverse effect on the Company's ability to consummate the Merger or perform its obligations under this Agreement or the Related Agreements. 2.6 Compliance; Permits. (a) The Company is not in default or violation of, (i) any law, rule, regulation, order, judgment or decree (each, a "Law") applicable to the Company or by which its properties is bound or affected, or (ii) any material note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation to which the Company is a party or by which the Company or its properties is bound or affected, except for any defaults or violations that (individually or in the aggregate) would not have a Material Adverse Effect on the Company. To the Company's knowledge no investigation or review by any governmental or regulatory body or authority is pending or threatened against the Company, nor has any governmental or regulatory body or authority indicated an intention to conduct the same, other than, in each such case, those the outcome of which could not, individually or in the aggregate, reasonably be expected to have the effect of prohibiting or materially impairing any business practice of the Company, any acquisition of material property by the Company or the conduct of business by the Company in any material way. (b) The Company holds all permits, licenses, variances, exemptions, orders and approvals from governmental authorities ("Permits") that are material to operation of the business of the Company as currently conducted (collectively, the "Company Permits"); provided, however, that Permits that may be required for the future operation of the business have not been granted by the Food and Drug Administration or any comparable foreign governmental entity. The Company is in compliance in all material respects with the terms of the Company Permits. 2.7 SEC Filings; Financial Statements. -10- 15 (a) The Company has made available to Parent a correct and complete copy of each report, schedule, registration statement and definitive proxy statement filed by the Company with the Securities and Exchange Commission ("SEC") after January 1, 1999 (the "Company SEC Reports"), which are all the forms, reports and documents required to be filed by the Company with the SEC after January 1, 1999. The Company SEC Reports (A) were prepared in accordance with the requirements of the Securities Act or the Exchange Act, as the case may be, and filed on a timely basis and (B) did not at the time they were filed (and if amended or superseded by a filing prior to the date of this Agreement then on the date of such filing) contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. (b) Each set of consolidated financial statements (including, in each case, any related notes thereto) contained in the Company SEC Reports was prepared in accordance with generally accepted accounting principles ("GAAP") applied on a consistent basis throughout the periods involved (except as may be indicated in the notes thereto or, in the case of unaudited statements, for the absence of footnotes) and each fairly presents in all material respects the financial position of the Company at the respective dates thereof and the results of its operations and cash flows for the periods indicated, except that the unaudited interim financial statements were or are subject to normal adjustments and lack footnotes. 2.8 No Undisclosed Liabilities. The Company has no liabilities (absolute, accrued, contingent or otherwise) which are, individually or in the aggregate, material to the business, results of operations or financial condition of the Company taken as a whole, except (i) liabilities provided for in the Company's balance sheet as of December 31, 2000 (or described in the footnotes thereto), (ii) liabilities incurred since December 31, 2000 in the ordinary course of business, (iii) contractual and other liabilities incurred in the ordinary course of business which are not required by GAAP to be reflected on a balance sheet, and (iv) liabilities permitted under this Agreement and the transactions related to the Merger, and liabilities incurred pursuant to or in connection with any other agreement between the parties. 2.9 Absence of Certain Changes or Events. Since March 31, 2001, there has not been: (i) any declaration, setting aside or payment of any dividend on, or other distribution (whether in cash, stock or property) in respect of, any of the Company's capital stock, (ii) any purchase, redemption or other acquisition by the Company of (a) the Company's capital stock, (b) any other securities of the Company or (c) any options, warrants, calls or rights to acquire any such shares or other securities, except for repurchases from employees following their termination pursuant to the terms of their pre-existing stock option or purchase agreements, (iii) any split, combination or reclassification of any of the Company's capital stock, (iv) any granting by the Company of any increase in compensation or fringe benefits, except for normal increases of cash compensation to non-officer employees in the ordinary course of business consistent with past practice, or any payment by the Company of any bonus, except for bonuses made to non-officer employees in the ordinary course of business consistent with past practice, or any granting by the Company of any increase in severance or termination pay or any entry by the Company into any currently effective employment, severance, termination or indemnification agreement or any agreement the benefits of which are contingent or the terms of which are materially altered upon the occurrence of a transaction involving the Company of the nature contemplated hereby, (v) except for any agreements -11- 16 between Parent and the Company, entry by the Company into any licensing or other agreement with regard to the acquisition or disposition of any Company Intellectual Property (as defined in Section 2.19) other than any amendment or consent with respect to any licensing agreement filed or required to be filed by the Company with the SEC, (vi) any material change by the Company in its accounting methods, principles or practices, except as required by concurrent changes in GAAP, or (vii) any revaluation by the Company of any of its assets, including, without limitation, writing down the value of capitalized inventory or writing off notes or accounts receivable or any sale of assets of the Company other than in the ordinary course of business. 2.10 Absence of Litigation. There are no claims, actions, suits or proceedings ("Claims") pending or, to the knowledge of the Company, threatened against the Company or any properties or rights of the Company, before any court, arbitrator or administrative, governmental or regulatory authority or body, domestic or foreign, except for Claims that, individually or in the aggregate, would not have a Material Adverse Effect on the Company. 2.11 Employee Benefit Plans. (a) All employee compensation, incentive, fringe or benefit plans, programs, policies, commitments or other arrangements (whether or not set forth in a written document and including, without limitation, all "employee benefit plans" within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")) covering any active or former employee, director or consultant of the Company or any trade or business (whether or not incorporated) which is a member of a controlled group or which is under common control with the Company within the meaning of Section 414 of the Code (an "Affiliate"), or with respect to which the Company has or may in the future have liability, are listed in Section 2.11(a) of the Company Schedule (the "Plans"). The Company has provided to Parent: (i) correct and complete copies of all documents embodying each Plan, and management, employment, severance, consulting, relocation, repatriation, expatriation, visa, work permit or other agreement, contract or understanding between the Company and any Employee ("Employment Agreement"), including (without limitation) all amendments thereto, all related trust documents, and all material written agreements and contracts relating to each such Plan; (ii) the three (3) most recent annual reports (Form Series 5500 and all schedules and financial statements, if any, required to be attached thereto), if any, required under ERISA or the Code in connection with each Plan; (iii) the most recent summary plan description together with the summary(ies) of material modifications thereto, if any, required under ERISA with respect to each Plan; (iv) all IRS or DOL determination, opinion, notification and advisory letters; (v) all material correspondence to or from any governmental agency relating to any Plan; (vi) all COBRA forms and related notices; (vii) all discrimination tests for each Plan for the most recent three (3) plan years; (viii) the most recent annual actuarial valuations, if any required, prepared for each Plan; (ix) if the Plan is funded, the most recent annual and periodic accounting of Plan assets; (x) all material written agreements and contracts relating to each Plan, including, but not limited to, administrative service agreements, group annuity contracts and group insurance contracts; (xi) all material communications to employees or former employees regarding in each case, relating to any amendments, terminations, establishments, increases or decreases in benefits, acceleration of payments or vesting schedules or other events which would result in any material liability under any Plan or proposed Plan; (xii) all policies pertaining to fiduciary liability insurance covering the -12- 17 fiduciaries for each Plan; and (xiii) all registration statements, annual reports (Form 11-K and all attachments thereto) and prospectuses prepared in connection with any Plan. (b) The Company has performed in all material respects all obligations required to be performed by it under, is not in default or violation of, and has no knowledge of any default or violation by any other party to, each Plan, and each Plan has been maintained and administered in all material respects in compliance with its terms and with the requirements prescribed by any and all statutes, orders, rules and regulations (foreign or domestic), including but not limited to ERISA and the Code, which are applicable to such Plans. No suit, action or other litigation (excluding claims for benefits incurred in the ordinary course of Plan activities) has been brought, or to the knowledge of the Company is threatened, against or with respect to any such Plan. There are no audits, inquiries or proceedings pending or, to the knowledge of the Company, threatened by the Internal Revenue Service (the "IRS") or Department of Labor (the "DOL") with respect to any Plans. All contributions, reserves or premium payments required to be made or accrued as of the date hereof to the Plans have been timely made or accrued. Any Plan intended to be qualified under Section 401(a) of the Code and each trust intended to qualify under Section 501(a) of the Code (i) has either obtained a favorable determination, notification, advisory and/or opinion letter, as applicable, as to its qualified status from the IRS or still has a remaining period of time under applicable Treasury Regulations or IRS pronouncements in which to apply for such letter and to make any amendments necessary to obtain a favorable determination, and (ii) incorporates or has been amended to incorporate all provisions required to comply with the Tax Reform Act of 1986 and subsequent legislation. The Company does not have any plan or commitment to establish any new Plan, to modify any Plan (except to the extent required by law or to conform any such Plan to the requirements of any applicable law, in each case as previously disclosed to Parent in writing, or as required by this Agreement), or to enter into any new Plan. Each Plan can be amended, terminated or otherwise discontinued after the Effective Time in accordance with its terms, without liability to Parent, the Company or any of its Affiliates (other than ordinary administration expenses and expenses for benefits accrued but not yet paid). (c) Neither the Company nor any of its Affiliates has at any time ever maintained, established, sponsored, participated in, or contributed to any plan subject to Title IV of ERISA or Section 412 of the Code, and at no time has the Company contributed to or been requested to contribute to any "multiemployer plan," as such term is defined in ERISA or to any plan described in Section 413(c) of the Code. Neither the Company nor any officer or director of the Company is subject to any liability or penalty under Section 4975 through 4980B of the Code or Title I of ERISA. No "prohibited transaction," within the meaning of Section 4975 of the Code or Sections 406 and 407 of ERISA, and not otherwise exempt under Section 408 of ERISA, has occurred with respect to any Plan. (d) Neither the Company nor any of its Affiliates has, prior to the Effective Time and in any material respect, violated any of the health continuation requirements of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"), the requirements of the Family Medical Leave Act of 1993, as amended, the requirements of the Women's Health and Cancer Rights Act, as amended, the requirements of the Newborns' and Mothers' Health Protection Act of 1996, as amended, or any similar provisions of state law applicable to employees of the Company. None of the Plans promises or provides retiree medical or other retiree welfare benefits to -13- 18 any person except as required by applicable law, and the Company has not represented, promised or contracted (whether in oral or written form) to provide such retiree benefits to any employee, former employee, director, consultant or other person, except to the extent required by statute. (e) Except as disclosed in Section 2.11(e) of the Company Schedule, neither the execution and delivery of this Agreement, nor the consummation of the transactions contemplated hereby will (either alone or upon the occurrence of any additional or subsequent events) (i) constitute an event under any Plan, Employment Agreement, trust or loan that will or may result in any payment (whether of severance pay or otherwise), acceleration, forgiveness of indebtedness, vesting, distribution, increase in benefits or obligation to fund benefits with respect to any Employee; or (ii) result in any payment or benefit which will or may be made by the Company or its Affiliates with respect to any Employee will be characterized as a "parachute payment," within the meaning of Section 280G(b)(2) of the Code. (f) The Company has no employees outside the United States. 2.12 Labor Matters. (i) There are no material controversies pending or, to the knowledge of the Company, threatened, between the Company and any of its employees; (ii) the Company is not a party to any collective bargaining agreement or other labor union contract or arrangement with any labor union applicable to persons employed by the Company nor does the Company know of any activities or proceedings of any labor union to organize any such employees; and (iii) the Company has no knowledge of any labor disputes, strikes, slowdowns, work stoppages or lockouts, or threats thereof, by or with respect to any employees of the Company, and the Company has not experienced any labor interruptions over the past three (3) years. The Company is in compliance in all material respects with all applicable material foreign, federal, state and local laws, rules and regulations respecting employment, employment practices, terms and conditions of employment and wages and hours. 2.13 Proxy Statement. None of the information supplied or to be supplied by the Company for inclusion or incorporation by reference in the proxy statement to be filed with the SEC by the Company pursuant to Section 5.4 hereof, as the same may be amended from time to time (the "Proxy Statement") will, at the dates mailed to the stockholders of the Company and at the time of the stockholders meeting of the Company (the "Company Stockholders' Meeting") in connection with the transactions contemplated hereby, 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 Proxy Statement will comply as to form in all material respects with the provisions of the Exchange Act and the rules and regulations promulgated by the SEC thereunder. Notwithstanding the foregoing, the Company makes no representation or warranty with respect to any information supplied by Parent or Merger Sub that is contained in any of the foregoing documents. 2.14 Restrictions on Business Activities. There is no agreement, commitment, judgment, injunction, order or decree binding upon the Company or to which the Company is a party which has or could reasonably be expected to have the effect of prohibiting or materially impairing any business practice of the Company (including but not limited to research and development, sales, manufacturing, marketing and employment) or the conduct of business by the Company as such -14- 19 practice or business is currently conducted or presently anticipated by the Company to be conducted or pursued under any agreement between Parent and the Company. 2.15 Title to Property. The Company does not own any material real property. The Company has good and defensible title to all of its material properties and assets it purports to own, free and clear of all liens, charges and encumbrances except liens for taxes not yet due and payable, and such liens or other imperfections of title, if any, as do not materially detract from the value of or interfere with the present use of the property affected thereby. All leases pursuant to which the Company lease from others material real or personal property are in good standing, valid and effective in accordance with their respective terms, and there is not, under any of such leases, any existing material default or event of default (or any event which with notice or lapse of time, or both, would constitute a material default and in respect of which the Company has not taken adequate steps to prevent such default from occurring). All the plants, structures and equipment of the Company, except such as may be under construction, are in good operating condition and repair, in all material respects, subject to normal wear and tear. 2.16 Taxes. (a) For the purposes of this Agreement, "Tax" or "Taxes" "means (i) any and all federal, state, local and foreign taxes, including taxes based upon or measured by gross receipts, income, profits, sales, use and occupation, and value added, ad valorem, transfer, franchise, withholding, payroll, recapture, employment, excise and property taxes, together with all interest, penalties and additions imposed with respect to such amounts, (ii) any liability for the payment of any amounts of the type described in clause (i) as a result of being or ceasing to be a member of an affiliated, consolidated, combined or unitary group for any period (including, without limitation, any liability under Treasury Regulation Section 1.1502-6 or any comparable provision of foreign, state or local law), and (iii) any liability for the payment of any amounts of the type described in clause (i) or (ii) as a result of any express or implied obligation to indemnify any other person or as a result of any obligations under any agreements or arrangements with any other person with respect to such amounts and including any liability for taxes of a predecessor entity. (b) (i) The Company has timely filed (taking into account extensions) all federal, state, local and foreign returns, estimates, information statements and reports ("Returns") relating to Taxes required to be filed by the Company with any Tax authority, except such Returns which are not material to the Company. All such Returns were correct and complete in all material respects. The Company has paid all Taxes shown to be due on such Returns. (ii) The Company as of the Effective Time will have withheld with respect to its employees all federal and state income Taxes, Taxes pursuant to the Federal Insurance Contribution Act and other Taxes, if any, required to be withheld as of the Effective Time, except such Taxes which are not material to the Company, and have timely paid over to the proper governmental authorities all amounts required to be withheld and paid over under all applicable laws and will have paid all then due Taxes required to be paid pursuant to the Federal Unemployment Tax Act with respect to compensation paid to its employees. -15- 20 (iii) Except as disclosed in Section 2.16(b)(iii) of the Company Schedule, the Company has not been delinquent in the payment of any material Tax nor is there any material Tax deficiency outstanding, proposed or assessed against the Company, nor has the Company executed any unexpired waiver of any statute of limitations on or extending the period for the assessment or collection of any Tax. (iv) No audit or other examination of any Return of the Company by any Tax authority is presently in progress, nor has the Company been notified in writing of any request for such an audit or other examination. (v) No adjustment relating to any Returns filed by the Company has been proposed in writing by any Tax authority to the Company or any representative thereof. (vi) The Company has no liability for any material unpaid Taxes which has not been accrued for or reserved on the Company balance sheet dated December 31, 2000 in accordance with GAAP, whether asserted or unasserted, contingent or otherwise, which is material to the Company, other than any liability for unpaid Taxes that may have accrued since December 31, 2000 in connection with the operation of the business of the Company in the ordinary course. (vii) There is no contract, agreement, plan or arrangement to which the Company is a party as of the date of this Agreement, including but not limited to the provisions of this Agreement, covering any employee or former employee of the Company that, individually or collectively, would reasonably be expected to give rise to the payment of any amount that would not be deductible pursuant to Sections 280G, 404 or 162(m) of the Code. There is no contract, agreement, plan or arrangement to which the Company is a party or by which it is bound to compensate any individual for excise taxes paid pursuant to Section 4999 of the Code. (viii) The Company has not filed any consent agreement under Section 341(f) of the Code or agreed to have Section 341(f)(2) of the Code apply to any disposition of a subsection (f) asset (as defined in Section 341(f)(4) of the Code) owned by the Company. (ix) The Company is not party to and does not have any obligation under any tax-sharing, tax indemnity or tax allocation agreement or arrangement. (x) None of the Company's assets are tax exempt use property within the meaning of Section 168(h) of the Code. (xi) The Company has not constituted either a "distributing corporation" or a "controlled corporation" in a distribution of stock qualifying for tax-free treatment under Section 355 of the Code (i) in the two years prior to the date of this Agreement or (ii) in a distribution which could otherwise constitute part of a "plan" or "series of related transactions" (within the meaning of Section 355(e) of the Code) in conjunction with the Merger. (xii) Except as disclosed in Section 2.16(b)(xii) of the Company Schedule, the Company has not granted any power of attorney with respect to Taxes. -16- 21 (xiii) The Company is not, and has not been at any time, a "United States real property holding corporation" within the meaning of section 897(c) of the Code. 2.17 Environmental Matters. The Company (i) has obtained all applicable permits, licenses and other authorizations that are required under Environmental Laws the absence of which would have a Material Adverse Effect on the Company; (ii) is in compliance in all material respects with all material terms and conditions of such required permits, licenses and authorizations, and also is in compliance in all material respects with all other material limitations, restrictions, conditions, standards, prohibitions, requirements, obligations, schedules and timetables contained in such laws or contained in any regulation, code, plan, order, decree, judgment, notice or demand letter issued, entered, promulgated or approved thereunder; and (iii) has no knowledge of and has not received any written notice of any event, condition, circumstance, activity, practice, incident, action or plan that is reasonably foreseeably likely to interfere with or prevent continued compliance with any Environmental Law or that would give rise to any common law or statutory liability pursuant to any Environmental Law, except to the extent such non-compliance, liability or Environmental Claim could not reasonably be expected to have a Material Adverse Effect on the Company. To the Company's knowledge, no Hazardous Materials are present in, on or under any real properties owned, leased or used at any time (including both land and improvements thereon) by the Company, in such manner as would give rise to any liability or corrective or remedial obligation under any Environmental Laws. "Environmental Claim" means any written notice, claim, act, cause of action or investigation by any person alleging potential liability (including potential liability for investigatory costs, cleanup costs, governmental response costs, natural resources damages, property damages, personal injuries or penalties) arising out of, based on or resulting from (i) the presence, or release into the environment, of any Hazardous Materials or (ii) any violation, or alleged violation, of any Environmental Laws. "Environmental Laws" means all Federal, state, local and foreign laws and regulations in effect on the date hereof relating to pollution of the environment (including ambient air, surface water, ground water, land surface or subsurface strata) or the protection of human health and worker safety, including, without limitation, laws and regulations relating to emissions, discharges, releases or threatened releases of Hazardous Materials, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials. "Hazardous Materials" means chemicals, pollutants, contaminants, wastes, toxic substances, radioactive and biological materials, asbestos-containing materials, hazardous substances, petroleum and petroleum products or any fraction thereof, excluding, however, Hazardous Materials contained in products typically used for office, janitorial and/or landscaping purposes properly and safely maintained in accordance with Environmental Laws. 2.18 Brokers. The Company has not incurred, nor will it incur, directly or indirectly, any liability for brokerage or finders' fees or agents' commissions or any similar charges in connection with this Agreement or any transaction contemplated hereby based upon arrangements made by or on behalf of the Company. 2.19 Intellectual Property. For the purposes of this Agreement, the following terms have the following definitions: "Intellectual Property" shall mean: (i) all United States and foreign patents and applications therefor and all reissues, divisions, renewals, extensions, provisionals, continuations and -17- 22 continuations-in-part thereof ("Patents"); (ii) all inventions (whether patentable or not), invention disclosures, improvements, trade secrets, proprietary information, know how, technology, technical data and customer lists, and all documentation (or in the case of know how, proprietary documentation) relating to any of the foregoing; (iii) all copyrights, copyright registrations and applications therefor and all other rights corresponding thereto throughout the world; (iv) all industrial designs and any registrations and applications therefor throughout the world; (v) all trade names, logos, common law trademarks and service marks; trademark and service mark registrations and applications therefor and all goodwill associated therewith throughout the world; (vi) all databases and data collections and all rights therein throughout the world related to research, design and development of the Company's Products; (vii) all computer software including all source code, object code, firmware, development tools, files, records and data, all media on which any of the foregoing is recorded, all Web addresses, sites and domain names; and (viii) any similar, corresponding or equivalent rights to any of the foregoing. "Company Intellectual Property" shall mean any Intellectual Property that is owned by or exclusively licensed to the Company. Without in any way limiting the generality of the foregoing, Company Intellectual Property includes all Intellectual Property owned by or exclusively licensed to the Company related to or necessary to develop, market or otherwise exploit the Company's products. "Registered Intellectual Property" shall mean all United States, international and foreign: (i) patents and patent applications (including provisional applications); (ii) registered trademarks, applications to register trademarks, intent-to-use applications, or other registrations or applications related to trademarks; (iii) registered copyrights and applications for copyright registration; (iv) domain name registrations; and (v) any other application, certificate, filing, registration or other document issued by, filed with, or recorded by, any state, government or other public legal authority. "Company Registered Intellectual Property" means all of the Registered Intellectual Property owned by, or filed in the name of, the Company. (a) Section 2.19(a) of the Company Schedule is a complete and accurate list of all Company Registered Intellectual Property and specifies, where applicable, the jurisdictions in which each such item of Company Registered Intellectual Property has been issued or registered and lists any proceedings or actions before any court, tribunal (including the United States Patent and Trademark Office (the "PTO") or equivalent authority anywhere in the world) related to any of the Company Registered Intellectual Property, and any actions with respect thereto that should be taken within one hundred twenty (120) days after the date of this Agreement. (b) Section 2.19(b) of the Company Schedule is a complete and accurate list (by name and version number, if applicable) of all products or service offerings of the Company ("Company Products") that have been distributed or provided in the five (5) year period preceding the date hereof or which the Company presently intends to distribute or provide in the next three (3) years, including any products or service offerings under development. -18- 23 (c) No Company Intellectual Property owned by the Company, no Company Product, and to the Company's knowledge, no Company Intellectual Property exclusively licensed by the Company, is subject to any proceeding or outstanding decree, order, judgment, contract, license, agreement, or stipulation restricting in any manner the use (in accordance with the Company's current practices), transfer, or licensing thereof by the Company, or which may adversely affect the use (in accordance with the Company's current practices) or enforceability of such Company Intellectual Property or Company Product. (d) To the Company's knowledge, each item of Company Registered Intellectual Property is valid and subsisting, all necessary registration, maintenance and renewal fees currently due in connection with such Company Registered Intellectual Property have been made and all necessary documents, recordations and certificates in connection with such Company Registered Intellectual Property have been filed with the relevant patent, copyright, trademark or other authorities in the United States or foreign jurisdictions, as the case may be, for the purposes of maintaining such Company Registered Intellectual Property. (e) The Company owns and has good and exclusive title to, or exclusively licenses, each item of Company Intellectual Property free and clear of any lien or encumbrance on such owned Company Intellectual Property or on any license to such licensed Company Intellectual Property. Without limiting the foregoing: (i) the Company is the exclusive owner of all trademarks and trade names used in connection with the operation or conduct of the business of the Company, including the sale, distribution or provision of any Company Products by the Company; (ii) the Company owns exclusively, and has good title to, all copyrighted works that are Company Products or which the Company otherwise purports to own; and (iii) to the extent that any Patents would be infringed by any Company Products currently under development or currently proposed, to the Company's knowledge the Company is the exclusive owner of such Patents. (f) To the extent that any technology, hardware, software or Intellectual Property has been developed or created in whole or in part by a third party specifically for the Company or to the extent any Intellectual Property is incorporated into or necessary to make, use or sell any of the Company Products, the Company owns or has the unrestricted perpetual, non-terminable (except for breach) license to use such third party's Intellectual Property in such work, material or invention to the extent required for or incident to the development, manufacture, operation or sale of the Company Products. (g) Except as contemplated by any agreement between the Company and Parent, the Company has not transferred ownership of, or granted any exclusive license with respect to, any Intellectual Property that is Company Intellectual Property, to any third party, or permitted the Company's rights in such Company Intellectual Property to lapse or enter the public domain. (h) Section 2.19(h) of the Company Schedule lists all contracts, licenses and agreements to which the Company is a party: (i) with respect to Company Intellectual Property currently licensed or transferred to any third party; or (ii) pursuant to which a third party licenses or has transferred any Intellectual Property to the Company. -19- 24 (i) All contracts, licenses and agreements relating to either (i) Company Intellectual Property (other than end-user licenses in the ordinary course) or (ii) Intellectual Property of a third party licensed to the Company or used in the business of the Company in the manner currently contemplated, are in full force and effect. The consummation of the transactions contemplated by this Agreement will neither violate nor result in the breach, modification, cancellation, termination or suspension of such contracts, licenses and agreements. The Company is in material compliance with, and has not materially breached any term of any such contracts, licenses and agreements and, to the knowledge of the Company, all other parties to such contracts, licenses and agreements are in compliance with, and have not materially breached any term of, such contracts, licenses and agreements. Following the Closing Date, the Surviving Corporation will be permitted to exercise all of the Company's rights under such contracts, licenses and agreements to the same extent the Company would have been able to had the transactions contemplated by this Agreement not occurred and without the payment of any additional amounts or consideration other than ongoing fees, royalties or payments which the Company would otherwise be required to pay. Neither this Agreement nor the transactions contemplated by this Agreement will (as a result of agreements or commitments to which the Company is a party) result in (i) either Parent's or the Merger Sub's granting to any third party any right to or with respect to any Intellectual Property right owned by, or licensed to, either of them, (ii) either the Parent's or the Merger Sub's being bound by, or subject to, any non-compete or other restriction on the operation or scope of their respective businesses, or (iii) either the Parent's or the Merger Sub's being obligated to pay any royalties or other amounts to any third party in excess of those payable by Parent or Merger Sub, respectively, prior to the Closing. (j) To the Company's knowledge, the operation of the business of the Company as such business currently is conducted, including (i) the Company's design, development, manufacture, distribution, reproduction, marketing or sale of the products or services of the Company (including Company Products) and (ii) the Company's use of any product, device or process, has not and does not infringe or misappropriate the Intellectual Property of any third party or constitute unfair competition or trade practices under the laws of any jurisdiction. (k) The Company has not received notice from any third party that the operation of the business of the Company or any act, product or service of the Company, infringes or misappropriates the Intellectual Property of any third party or constitutes unfair competition or trade practices under the laws of any jurisdiction. (l) To the knowledge of the Company, no person has infringed or misappropriated or is infringing or misappropriating any Company Intellectual Property. (m) The Company has taken reasonable steps to protect the Company's rights in the Company's confidential information and trade secrets that it wishes to protect or any trade secrets or confidential information of third parties provided to the Company, and, without limiting the foregoing, the Company has and enforces a policy requiring each employee and consultant to execute a proprietary information/confidentiality agreement substantially in the form provided to Parent and all current and former employees and consultants of the Company have executed such an agreement. -20- 25 2.20 Agreements, Contracts and Commitments. As of the date hereof, except as set forth in Section 2.20 of the Company Schedule, the Company is not a party to or is bound by: (a) any employment or consulting agreement, contract or commitment with any officer or director of the Company, other than those that are terminable by the Company on no more than thirty (30) days' notice without liability or financial obligation to the Company; (b) any agreement of indemnification or any guaranty other than any agreement of indemnification entered into in connection with the purchase or license for use by the Company of software products or services in the ordinary course of business; (c) any agreement, contract or commitment containing any covenant limiting in any respect the right of the Company to engage in any line of business or to compete with any person or granting any exclusive distribution rights; (d) any agreement, contract or commitment currently in force relating to the disposition or acquisition by the Company after the date of this Agreement of a material amount of assets not in the ordinary course of business or pursuant to which the Company has any material ownership interest in any corporation, partnership, joint venture or other business enterprise; (e) any dealer, distributor, joint marketing or development agreement currently in force under which the Company has continuing material obligations to jointly market any product, technology or service and which may not be canceled without penalty upon notice of ninety (90) days or less, or any material agreement pursuant to which the Company has continuing material obligations to jointly develop any intellectual property that will not be owned, in whole or in part, by the Company and which may not be canceled without penalty upon notice of ninety (90) days or less; (f) any agreement, contract or commitment currently in force to provide source code to any third party for any product or technology that is material to the Company taken as a whole; (g) any agreement, contract or commitment currently in force to license any third party to manufacture or reproduce any Company product, service or technology or any agreement, contract or commitment currently in force to sell or distribute any Company products, service or technology except agreements with distributors or sales representatives in the normal course of business cancelable without penalty upon notice of ninety (90) days or less and substantially in the form previously provided to Parent; (h) any mortgages, indentures, guarantees, loans or credit agreements, security agreements or other agreements or instruments relating to the borrowing of money or extension of credit; (i) any material settlement agreement entered into within five (5) years prior to the date of this Agreement; or (j) any other agreement, contract or commitment under which the Company is contractually obligated to make or entitled to receive payments of $100,000 or more individually. -21- 26 The Company, nor to the Company's knowledge any other party to a Company Contract (as defined below), is not in breach, violation or default under, and the Company has not received written notice that it has breached, violated or defaulted under, any of the material terms or conditions of any of the agreements, contracts or commitments to which the Company is a party or by which it is bound that are required to be disclosed in the Company Schedule (any such agreement, contract or commitment, a "Company Contract") in such a manner as would permit any other party to cancel or terminate any such Company Contract, or would permit any other party to seek material damages or other remedies (for any or all of such breaches, violations or defaults, in the aggregate). 2.21 Insurance. The Company maintains insurance policies and fidelity bonds covering the assets, business, equipment, properties, operations, employees, officers and directors of the Company (collectively, the "Insurance Policies") which are of the type and in amounts customarily carried by persons conducting businesses similar to those of the Company. There is no material claim by the Company pending under any of the material Insurance Policies as to which coverage has been questioned, denied or disputed by the underwriters of such policies or bonds. 2.22 Board Approval. The Board of Directors of the Company has, as of the date of this Agreement, unanimously (i) approved and declared advisable this Agreement and the Related Agreements and has approved the Merger and the other transactions contemplated hereby and thereby, (ii) determined that the Merger is fair to, and in the best interests of, the Company and its stockholders and (iii) determined to recommend that the stockholders of the Company adopt and approve this Agreement and approve the Merger. 2.23 Vote Required. The affirmative vote of the holders of a majority of the votes entitled to be cast with respect to the Merger by the holders of the Company Common Stock and Series B Convertible Preferred Stock (voting on an as-converted to Company Common Stock basis), voting together as a single class, is the only vote of the holders of any class or series of the Company's capital stock necessary to approve this Agreement and the transactions contemplated hereby. 2.24 State Takeover Statutes. Neither Section 203 of the Delaware Law nor, to the Company's knowledge, any other state takeover statute or similar statute or regulation applies to the Merger, this Agreement, the Related Agreements or the transactions contemplated hereby and thereby. ARTICLE III REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB Parent and Merger Sub represent and warrant to the Company, subject to such exceptions as are specifically disclosed in writing in the disclosure schedule supplied by Parent to the Company dated as of the date hereof (the "Parent Schedule") as follows. The Parent Schedule shall be arranged in sections corresponding to the numbered and lettered paragraphs contained in this Article III and the disclosure in any section of the Parent Schedule shall qualify other paragraphs in this Article III only to the extent that it is reasonably apparent from a reading of such disclosure that it also qualifies or applies to such other paragraph. -22- 27 3.1 Organization and Qualification; Subsidiaries. Each of Parent and its subsidiaries is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has the requisite corporate power and authority to own, lease and operate its assets and properties and to carry on its business as it is now being conducted, except where the failure to do so would not, individually or in the aggregate, have a Material Adverse Effect on Parent or Merger Sub. Each of Parent and its subsidiaries is in possession of all Approvals necessary to own, lease and operate the properties it purports to own, operate or lease and to carry on its business as it is now being conducted, except where the failure to have such Approvals would not, individually or in the aggregate, be material to Parent or Merger Sub. Each of Parent and its subsidiaries is duly qualified or licensed as a foreign corporation to do business, and is in good standing, in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its activities makes such qualification or licensing necessary, except for such failures to be so duly qualified or licensed and in good standing that would not, either individually or in the aggregate, have a Material Adverse Effect on Parent or Merger Sub. 3.2 Authority Relative to this Agreement. Each of Parent and Merger Sub has all necessary corporate power and authority to execute and deliver this Agreement and the applicable Related Agreements and to perform its obligations hereunder and thereunder, and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement by Parent and Merger Sub and the consummation by Parent and Merger Sub of the transactions contemplated hereby and the execution and delivery of the applicable Related Agreements by Parent and the consummation by Parent of the transactions contemplated thereby have been duly and validly authorized by all necessary corporate action on the part of Parent and Merger Sub, and no other corporate proceedings on the part of Parent or Merger Sub are necessary to authorize this Agreement and the applicable Related Agreements, or to consummate the transactions so contemplated. This Agreement and the Related Agreements have been duly and validly executed and delivered by Parent and Merger Sub and, assuming the due authorization, execution and delivery by the Company, constitute legal and binding obligations of Parent and Merger Sub, enforceable against Parent and Merger Sub in accordance with their terms. 3.3 No Conflict; Required Filings and Consents. (a) The execution and delivery of this Agreement and the applicable Related Agreements by Parent and Merger Sub do not, and the performance of this Agreement and the applicable Related Agreements by Parent and Merger Sub shall not, (i) conflict with or violate the Certificate of Incorporation, Bylaws or equivalent organizational documents of Parent or any of its subsidiaries, (ii) subject to compliance with the requirements set forth in Section 3.3(b) below, conflict with or violate any Law applicable to Parent or any of its subsidiaries or by which its or any of their respective properties are bound or affected, or (iii) 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 impair Parent's or any of its subsidiaries' rights or alter the rights or obligations of any third party under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a lien or encumbrance on any of the properties or assets of Parent or any of its subsidiaries pursuant to, any material note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation to which Parent or any of its subsidiaries is a party or by which Parent or any of its subsidiaries or its or any of their respective properties are -23- 28 bound or affected, except to the extent such conflict, violation, breach, default, impairment or other effect would not in the case of clauses (ii) or (iii), individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Parent or Merger Sub. (b) The execution and delivery of this Agreement and the applicable Related Agreements by Parent and Merger Sub do not, and the performance of this Agreement and the applicable Related Agreements by Parent and Merger Sub shall not, require any consent, approval, authorization or permit of, or filing with or notification to, any Governmental Entity except (i) for applicable requirements, if any, of the Securities Act, the Exchange Act, Blue Sky Laws, the pre-merger notification requirements of the HSR Act, the rules and regulations of Nasdaq, and the filing and recordation of the Certificate of Merger as required by Delaware Law and (ii) where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not have a Material Adverse Effect on the Parent's or Merger Sub's ability to consummate the Merger or perform their obligations under this Agreement and the Related Agreements. 3.4 Ownership of Merger Sub; No Prior Activities. The Merger Sub is a direct, wholly-owned subsidiary of Parent and was formed solely for the purpose of engaging in the transactions contemplated by this Agreement. Except for obligations or liabilities incurred in connection with its incorporation or organization and the transactions contemplated by this Agreement and except for this Agreement and any other agreements or arrangements contemplated by this Agreement, the Merger Sub has not and will not have incurred, directly or indirectly, through any subsidiary or affiliate, any obligations or liabilities or engaged in any business activities of any type or kind whatsoever or entered into any agreements or arrangements with any person or entity which could adversely affect the ability of Merger Sub or Parent to consummate the transactions contemplated hereby. ARTICLE IV CONDUCT PRIOR TO THE EFFECTIVE TIME 4.1 Conduct of Business by the Company. Except as expressly permitted by this Section 4.1 or required by the terms of this Agreement, and except as provided in Section 4.1 of the Company Schedule, without the prior written consent of Parent, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, the Company shall carry on its business, in the ordinary course, in substantially the same manner as previously conducted and in material compliance with all applicable laws and regulations, pay its material debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its present officers and employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has business dealings. In addition, except as expressly permitted or contemplated by the terms of this Agreement, and except as provided in Section 4.1 of the Company Schedule, without the prior written consent of Parent, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, the Company shall not do any of the following: -24- 29 (a) Waive any stock repurchase rights, accelerate (except in connection with the termination of the Company Option Plan), amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans; (b) Grant any severance or termination pay to any officer or employee except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing or made available to Parent, or adopt any new severance plan; (c) Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual Property, or enter into grants to transfer or license to any person future patent rights; (d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock; (e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company, except repurchases of unvested shares at cost in connection with the termination of the employment relationship with any employee pursuant to stock option or purchase agreements in effect on the date hereof or granted hereafter; (f) Issue, deliver, sell, authorize, pledge or otherwise encumber any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than: (x) the issuance, delivery and/or sale of shares of Company Common Stock pursuant to the exercise of Company Stock Options or Company Warrants outstanding as of the date of this Agreement or granted pursuant to clause (y) hereof; and (y) the granting of stock options to purchase up to seventy-five thousand (75,000) shares in the aggregate (and the issuance of Company Common Stock upon exercise thereof), in the ordinary course of business and consistent with past practices; (g) Cause, permit or propose any amendments to the Company Charter Documents; (h) Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any assets (other than in the ordinary course of business) or enter into any joint ventures, strategic partnerships or alliances; (i) Sell, lease, license, encumber or otherwise dispose of any properties or assets except sales of inventory and the grant of end-user licenses in the ordinary course of business consistent with past practice, except for the sale, lease or disposition (other than through licensing) -25- 30 of property or assets which are not material, individually or in the aggregate, to the business of the Company; (j) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than (i) in connection with the financing of ordinary course trade payables consistent with past practice or (ii) in a principal amount not to exceed $150,000 in the aggregate; (k) Adopt or amend any employee benefit plan, policy or arrangement, any employee stock purchase or employee stock option plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director or employee, or increase the salaries or wage rates (except for increases in the ordinary course of business for non-officer employees) or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants; (l) (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) or litigation (whether or not commenced prior to the date of this Agreement), other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities recognized or disclosed in the most recent consolidated financial statements (or the notes thereto) of the Company included in the Company SEC Reports or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or fail to enforce (without resorting to litigation) any confidentiality or similar agreement to which the Company is a party or of which the Company is a beneficiary; (m) Make any individual or series of related payments outside of the ordinary course of business (including payments to financial, legal, accounting or other professional service advisors) in excess of $100,000 per month (except that such limit shall be $500,000 for the first month following the execution of this Agreement and except that the $100,000 limit shall not apply to amounts owed to the Principal Shareholder or for legal services performed through the date of this Agreement); (n) Except in the ordinary course of business consistent with past practice, materially modify, amend or terminate any material contract or agreement to which the Company is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder; (o) Enter into or materially modify any contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of the Company's products or products licensed by the Company; -26- 31 (p) Revalue any of its assets or, except as required or permitted by GAAP, make any change in accounting methods, principles or practices; (q) Incur or enter into any agreement, contract or commitment outside of the ordinary course of business requiring payments by the Company in excess of $100,000 individually; (r) Make any tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the tax liability or tax attributes of the Company or settle or compromise any material income tax liability; provided, however, that nothing in this Section 4.1(r) or elsewhere in this Agreement shall prohibit the Company from selling state tax losses to the extent permitted by applicable taxing authorities. (s) Amend or terminate any or all of the Related Agreements; or (t) Agree in writing or otherwise to take any of the actions described in Section 4.1(a) through Section 4.1(s) above. In the event the Company shall request Parent to consent in writing to an action pursuant to this Section 4.1, Parent shall not unreasonably delay its determination as to whether to withhold such consent. ARTICLE V ADDITIONAL AGREEMENTS 5.1 Initial Payment. Concurrently with the execution and delivery of this Agreement, and as a material inducement to the Company to enter into this Agreement, Parent shall pay to the Company, by wire transfer, an amount equal to Five Hundred Thousand Dollars ($500,000.00) (the "Initial Payment"). Without limiting the Company's obligations pursuant to Section 7.3, in no event shall the Company be required to repay the Initial Payment to Parent, including without limitation regardless of whether the Agreement is terminated and the Merger is abandoned. 5.2 Related Agreements. Concurrently with the execution and delivery of this Agreement, and as a material inducement to Parent and Merger Sub to enter into this Agreement, (i) the Principal Shareholder is entering into a Voting Agreement, in substantially the form attached as Exhibit A; (ii) the Principal Shareholder is entering into a Non-Competition Agreement, in substantially the form attached as Exhibit B; (iii) Parent and the Company are entering into a License Agreement, in substantially the form attached as Exhibit C; and (iv) Parent and the Company are entering into an Omnibus Waiver and Amendment Agreement, in substantially the form attached as Exhibit D. 5.3 Parent Warrant. Concurrently with the execution of this Agreement, and as a material inducement to Parent and Merger Sub to enter into this Agreement, the Company shall issue and deliver to Parent the Parent Warrant, in the form attached as Exhibit E. In connection with the issuance of the Parent Warrant, Parent hereby waives on behalf of itself and all future holders of the Series B Convertible Preferred Stock, the ASC Warrant and the Common Stock Warrants and the shares issued or issuable thereunder any and all "anti-dilution" provisions set forth in Section 5.D of the Certificate of Designations of Series B Convertible Preferred Stock of Medjet Inc. (the -27- 32 "Certificate of Designations"), Sections 7.1, 7.2 and 7.3 of the Common Stock Warrants and Sections 7.1, 7.2 and 7.3 of the ASC Warrant that might be triggered by the issuance of the Parent Warrant and the shares issued or issuable thereunder. 5.4 Proxy Statement. (a) As promptly as practicable after the execution of this Agreement, the Company shall prepare and file with the SEC the Proxy Statement. Parent shall have the right to review and comment thereon, but in all cases subject to the control of the Company except with respect to information relating to the Parent or Merger Sub. Parent shall furnish all information concerning Parent as the Company may reasonably request in connection with such actions and the preparation of the Proxy Statement. As promptly as practicable after the filing of the definitive Proxy Statement, the Proxy Statement shall be mailed to the stockholders of the Company. The Company shall cause the Proxy Statement to comply as to form and substance in all material respects with the applicable requirements of (i) the Exchange Act, (ii) the Securities Act, and (iii) the rules and regulations of the Nasdaq (applicable to the Over-The-Counter market). (b) The Proxy Statement shall solicit the approval of this Agreement and the Merger, and subject to the right of the Board of Directors to change its recommendation if it determines in good faith (after consultation with outside counsel) it is required to do so by its fiduciary duties to the stockholders of the Company under applicable law, shall include the recommendation of the Board of Directors of the Company to the Company's stockholders that they vote in favor of approval of this Agreement and the Merger. Without limiting the generality of the foregoing, the Company's obligations pursuant to the first sentence of this Section 5.4(b) shall not be affected by the commencement, public proposal, public disclosure or communication to the Company of any Takeover Proposal (as defined in Section 5.7). (c) Whenever any event occurs that is required to be set forth in an amendment or supplement to the Proxy Statement, Parent or the Company, as the case may be, will promptly inform the other party of such occurrence and cooperate in filing with the SEC or its staff or any other government officials, and/or mailing to stockholders of the Company, such amendment or supplement, at the expense of Parent. The Company shall promptly amend or supplement, at the expense of Parent, the Proxy Statement to the extent required by law to do so, and Parent shall cooperate with respect to any amendment or supplement. Parent shall have the right to review and comment on any amendment or supplement, but in all cases subject to the control of the Company except with respect to information relating to the Parent or Merger Sub. Each of the parties shall advise the other parties, promptly after it receives notice thereof, of any request by the SEC for amendment of the Proxy Statement or comments thereon and responses thereto or requests by the SEC for additional information. 5.5 Stockholder Meeting. The Company shall call and hold the Company Stockholders' Meeting as promptly as practicable after the date hereof for the purpose of voting upon the approval of this Agreement and the Merger pursuant to the Proxy Statement. Subject to Section 5.7(b), the Company shall use all commercially reasonable efforts to solicit from its stockholders proxies in favor of the approval of this Agreement and the Merger pursuant to the Proxy Statement and shall take all other action necessary or advisable to secure the vote or consent of stockholders required by -28- 33 Delaware Law or applicable stock exchange requirements to obtain such approval. The Company shall take all other action, at the expense of Parent, necessary or advisable to promptly and expeditiously secure any vote or consent of stockholders required by applicable Law and the Company's Certificate of Incorporation and Bylaws to effect the Merger. Notwithstanding the foregoing, the obligation of the Company to call, give notice of, convene and hold the Company Stockholders' Meeting in accordance with this Section 5.5 shall not be limited or otherwise affected by the disclosure, announcement or submission to the Company of any Takeover Proposal or by the withdrawal, amendment or modification of the recommendation of the Board of the Directors of the Company with respect to the Merger. The obligations set forth in this Section 5.5 shall in no event require the Company's Board of Directors to recommend the transactions contemplated by this Agreement to the Company's stockholders under circumstances in which the Board of Directors has changed its recommendation in accordance with Section 5.4(b). 5.6 Confidentiality; Access to Information. (a) The parties acknowledge that the Company and Parent have previously executed a Mutual Nondisclosure Agreement, dated as of May 25, 2001 (the "Nondisclosure Agreement"), which Nondisclosure Agreement will continue in full force and effect in accordance with its terms. (b) The Company will afford Parent and Parent's accountants, counsel and employees reasonable access to its properties, books, records and personnel during the period prior to the Effective Time to obtain all information concerning its business as Parent may reasonably request. 5.7 No Solicitation. (a) From and after the date of this Agreement until the Effective Time or termination of this Agreement pursuant to Article VII, the Company will not, nor will it authorize or permit any of its officers, directors, affiliates or employees or any investment banker, attorney or other advisor or representative retained by it to, directly or indirectly, (i) solicit, initiate, encourage or induce the making, submission or announcement of any Takeover Proposal (as defined below), (ii) participate in any discussions or negotiations regarding, or furnish to any person any information with respect to, or take any other action to facilitate any inquiries or the making of any proposal that constitutes or may reasonably be expected to lead to, any Takeover Proposal, (iii) engage in discussions with any person with respect to any Takeover Proposal, (iv) approve, endorse or recommend any Takeover Proposal or (v) enter into any letter of intent or similar document or any contract, agreement or commitment contemplating or otherwise relating to any Acquisition Transaction (as defined below). The Company will immediately cease any and all existing activities, discussions or negotiations with any parties conducted heretofore with respect to any Takeover Proposal. Without limiting the foregoing, it is understood that any violation of the restrictions set forth in this Section 5.7 by any officer, director or employee of the Company or any investment banker acting on behalf of the Company, attorney or other advisor or representative of the Company shall be deemed to be a breach of this Section 5.7 by the Company. Notwithstanding the foregoing, in response to a Takeover Proposal that the Board of Directors of the Company determines in good faith (after consultation with outside counsel) constitutes a Superior Proposal (as defined below) and -29- 34 which Takeover Proposal was unsolicited and made after the date hereof and did not otherwise occur as a result of a breach of this Section 5.7, the Company may, subject to compliance with Section 5.7(c) and only to the extent in any such case the Board of Directors of the Company determines in good faith (after consultation with outside counsel) that the failure to take such actions are reasonably likely to constitute a breach of the Board's fiduciary duties to the stockholders of the Company under applicable law, (x) furnish information with respect to the Company to the person making such Takeover Proposal (and its representatives) pursuant to a customary confidentiality agreement containing provisions not less restrictive of such person than the Nondisclosure Agreement, provided that all such information has previously been provided to Parent or is provided to Parent prior to or at the time it is provided to such person and (y) participate in discussions or negotiations with the person making such Takeover Proposal (and its representatives) regarding such Takeover Proposal. (b) Neither the Board of Directors of the Company nor any committee thereof shall (i) recommend, adopt or approve, or propose publicly to recommend, adopt or approve, any Takeover Proposal or Superior Proposal or (ii) approve or recommend, or propose to approve or recommend, or allow the Company to execute or enter into, any letter of intent, memorandum of understanding, agreement in principle, merger agreement, acquisition agreement, option agreement, joint venture agreement, partnership agreement or other similar agreement (each, an "Acquisition Agreement") constituting or related to any Takeover Proposal (any action described in the foregoing clauses (i) or (ii) of this Section 5.7(b) being referred to as a "Company Adverse Recommendation Change"). Notwithstanding the foregoing, the Board of Directors of the Company may make a Company Adverse Recommendation Change, if such Board of Directors determines in good faith (after consultation with outside counsel) it is required to do so by its fiduciary duties to the stockholders of the Company under applicable law; provided, however, that no Company Adverse Recommendation Change may be made until after five business days following Parent's receipt of written notice (a "Notice of Adverse Recommendation") from the Company advising Parent that the Board of Directors of the Company intends to make such a Company Adverse Recommendation Change and specifying the terms and conditions of the applicable Superior Proposal (it being understood and agreed that any amendment to the financial terms or any other material term of such Superior Proposal shall require a new Notice of Adverse Recommendation and a new five-day period). Following receipt of a Notice of Adverse Recommendation, Parent shall have the opportunity to present to the Board of Directors of the Company revised terms for the consummation of the Merger, including any proposed amendments or modifications to this Agreement in respect of such revised terms. The Board of Directors of the Company shall consider in good faith any such revised terms and amendments or modifications submitted to it by Parent. In determining whether to make a Company Adverse Recommendation Change in response to a Superior Proposal, the Board of Directors of the Company shall take into account Parent's revised terms and any proposed changes to the terms of this Agreement proposed by Parent in response to a Notice of Adverse Recommendation or otherwise. Before making any Company Adverse Recommendation Change, the Board of Directors of the Company shall consider whether the revised terms offered by Parent are reasonably equivalent or superior (based upon the factors set forth in the definition of Superior Proposal below) from the financial point of view of the Company's stockholders to the terms of the Superior Proposal and, if such terms are determined by a vote of the Board of Directors to be reasonably equivalent or superior from the financial point of view of the Company's stockholders to -30- 35 the terms of the Superior Proposal, the Board of Directors of the Company shall accept at a meeting duly called and held, duly adopted resolutions (x) approving and declaring advisable the terms of any such revised proposal by Parent and any definitive agreement proposed in connection therewith, (y) directing that the adoption of the terms of any such revised proposal by Parent and any definitive agreement proposed in connection therewith be submitted to a vote at a meeting of the stockholders of the Company and (z) recommending that the stockholders of the Company approve and adopt the terms of any such revised proposal by Parent and any definitive agreement proposed in connection therewith. If the Company has elected to make a Company Adverse Recommendation Change following receipt of a Superior Proposal and complying with the procedures set forth in this Section 5.7(b) and after determining by a vote of the Board of Directors that any revised terms and proposed changes of Parent are not reasonably equivalent or superior from the financial point of view of the Company's stockholders to the terms of the Superior Proposal, the Company shall deliver to Parent (i) a written notice of termination of this Agreement pursuant to this Section 5.7(b), (ii) a wire transfer of immediately available funds in the amount of the Termination Fee (as defined in Section 7.3(a)), (iii) the License Agreement (if required pursuant to Section 7.3(a)) and (iv) a written acknowledgment that the Company and the Board of Directors have complied with all of their covenants and obligations pursuant to this Section 5.7(b) and that the Company is obligated to pay the Termination Fee and effect the License Grant (if required). (c) In addition to the obligations of the Company set forth in Section 5.7(a) and Section 5.7(b), the Company as promptly as practicable, and in any event within 24 hours, shall advise Parent in writing of: any request for information which the Company reasonably believes would lead to a Takeover Proposal; any request for information with respect to any Takeover Proposal; any inquiry with respect to or which the Company reasonably should believe would lead to any Takeover Proposal; the material terms and conditions of such request, Takeover Proposal or inquiry; and the identity of the person or group making any such request, Takeover Proposal or inquiry. The Company will keep Parent informed in all material respects of the status and details (including material amendments or proposed amendments) of any such request, Takeover Proposal or inquiry. (d) Nothing contained in this Section 5.7 shall prohibit the Company from (i) taking and disclosing to its stockholders a position contemplated by Rule 14e-2(a) or Item 1012(a) of Regulation M-A promulgated under the Exchange Act if, in the good faith judgment of the Board of Directors of the Company (after consultation with outside counsel) failure to so disclose would constitute a violation of applicable law or regulation; provided, however, that in no event as a result of this Section 5.7(d) shall the Company or its Board of Directors or any committee thereof take, or agree or resolve to take, any action prohibited by Section 5.7(b). For purposes of this Agreement, "Takeover Proposal" shall mean any offer or proposal (other than an offer or proposal by Parent) relating to any Acquisition Transaction. For the purposes of this Agreement, "Acquisition Transaction" shall mean any transaction or series of related transactions other than the transactions contemplated by this Agreement involving: (A) any acquisition or purchase from the Company by any person or "group" (as defined under Section 13(d) of the Exchange Act and the rules and regulations thereunder) of more than a 15% interest in the total outstanding voting securities of the Company or any tender offer or exchange offer that if consummated would result in any person or "group" (as defined under Section 13(d) of the Exchange -31- 36 Act and the rules and regulations thereunder) beneficially owning 15% or more of the total outstanding voting securities of the Company or any merger, consolidation, business combination or similar transaction involving the Company pursuant to which the stockholders of the Company immediately preceding such transaction hold less than 85% of the equity interests in the surviving or resulting entity of such transaction; (B) any sale, lease (other than in the ordinary course of business), exchange, transfer, license (other than in the ordinary course of business), acquisition or disposition of more than 15% of the assets of the Company; or (C) any liquidation, dissolution, recapitalization or other significant corporate reorganization of the Company. For purposes of this Agreement, a "Superior Proposal" means any bona fide, written Takeover Proposal made by a third party if the proposal is on terms which the Board of Directors of the Company, determines in its good faith judgment to be (x) superior to the Company's stockholders from a financial point of view to the Merger (taking into account all the terms and conditions of such proposal and this Agreement (including any changes to the financial terms of this Agreement proposed by Parent in response to such offer or otherwise)), (y) for which financing, to the extent required, is then committed or which, in the good faith judgment of the Board of Directors of the Company, is reasonably capable of being obtained by such third party and (z) reasonably capable of being completed, taking into account all financial, legal, regulatory and other aspects (other than the need to perform customary due diligence) of such proposal. 5.8 Parent Standstill. From the date of execution of this Agreement until one year after the termination of this Agreement under Section 7.1, neither Parent nor any of its affiliates will directly or indirectly purchase, contract to purchase, purchase any option or contract to purchase, sell, offer to purchase, contract to sell, make any short sale, sell any contract to purchase, purchase any contract to sell, grant any option, right or warrant to purchase, hedge or otherwise transfer or dispose of any share or securities of the Company, other than on the terms set forth in and pursuant to the Agreement and the Related Agreements or with the prior consent of the Board of Directors of the Company; provided, however, that Parent may exercise the Parent Warrant, the Common Stock Warrants and the ASC Warrant in accordance with their respective terms; and provided further, however, that Parent may convert the 10,400 shares of Series B Convertible Preferred Stock into Company Common Stock accordance with the terms of the Certificate of Designations. Notwithstanding the foregoing, the Section 5.8 shall not apply if the Merger is terminated pursuant to Section 7.1(e) or Section 7.1(g). 5.9 Public Disclosure. Parent and the Company will consult with each other and agree before issuing any press release or otherwise making any public statement with respect to the Merger, this Agreement or a Takeover Proposal and will not issue any such press release or make any such public statement prior to such agreement, except as may be required by law or any listing agreement with a national securities exchange or with Nasdaq, in which case reasonable efforts to consult with the other party will be made prior to any such release or public statement. The parties have agreed to the text of the joint press release announcing the signing of this Agreement. 5.10 Reasonable Efforts; Notification. (a) Upon the terms and subject to the conditions set forth in this Agreement, each of the parties agrees to use all commercially reasonable efforts to take, or cause to be taken, all -32- 37 actions, and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the Merger and the other transactions contemplated by this Agreement, including using commercially reasonable efforts to accomplish the following: (i) the taking of all reasonable acts necessary to cause the conditions precedent set forth in Article VI to be satisfied, (ii) the obtaining of all necessary actions or nonactions, waivers, consents, approvals, orders and authorizations from Governmental Entities and the making of all necessary registrations, declarations and filings (including registrations, declarations and filings with Governmental Entities, if any) and the taking of all commercially reasonable steps as may be necessary to avoid any suit, claim, action, investigation or proceeding by any Governmental Entity, (iii) the obtaining of all necessary consents, approvals or waivers from third parties, (iv) the defending, at Parent's expense, of any suits, claims, actions, investigations or proceedings, whether judicial or administrative, challenging this Agreement or the consummation of the transactions contemplated hereby, including seeking to have any stay or temporary restraining order entered by any court or other Governmental Entity vacated or reversed and (v) the execution or delivery of any additional instruments necessary to consummate the transactions contemplated by, and to fully carry out the purposes of, this Agreement. In connection with and without limiting the foregoing, the Company and its Board of Directors shall, if any state takeover statute or similar statute or regulation is or becomes applicable to the Merger, this Agreement or any of the transactions contemplated by this Agreement, use all commercially reasonable efforts to ensure that the Merger and the other transactions contemplated by this Agreement may be consummated as promptly as practicable on the terms contemplated by this Agreement and otherwise to minimize the effect of such statute or regulation on the Merger, this Agreement and the transactions contemplated hereby. Notwithstanding anything to the contrary in this Agreement, nothing in this Agreement shall be deemed to require Parent or the Company or any subsidiary or affiliate thereof to agree to any divestiture by itself or any of its affiliates of shares of capital stock or of any business, assets or property, or the imposition of any material limitation on the ability of any of them to conduct their business or to own or exercise control of such assets, properties and stock. (b) The Company shall give prompt written notice to Parent of any representation or warranty made by it contained in this Agreement becoming untrue or inaccurate in any material respect, or any failure of the Company to comply with or satisfy in any respect any covenant, condition or agreement to be complied with or satisfied by it under this Agreement; provided, however, that no such notification shall affect the representations, warranties, covenants or agreements of the parties or the conditions to the obligations of the parties under this Agreement. (c) Parent shall give prompt written notice to the Company of any representation or warranty made by it or Merger Sub contained in this Agreement becoming untrue or inaccurate in any material respect, or any failure of Parent or Merger Sub to comply with or satisfy in any respect any covenant, condition or agreement to be complied with or satisfied by it under this Agreement; provided, however, that no such notification shall affect the representations, warranties, covenants or agreements of the parties or the conditions to the obligations of the parties under this Agreement. 5.11 Third Party Consents. As soon as practicable following the date hereof, Parent and the Company will each use its commercially reasonable efforts to obtain any consents, waivers and approvals under any of its or its subsidiaries' respective material agreements, contracts, licenses or -33- 38 leases required to be obtained in connection with the consummation of the transactions contemplated hereby. 5.12 401(k) Plan. The Company agrees to terminate its 401(k) plan immediately prior to Closing, unless the Parent, in its sole and absolute discretion, agrees to sponsor and maintain such plan by providing the Company with written notice of such election at least three (3) business days before the Effective Time. Unless the Parent provides such notice to the Company, the Parent shall receive from the Company evidence that the Company's 401(k) plan has been terminated pursuant to resolution of the Company's Board of Directors (the form and substance of which resolutions shall be subject to review and approval of the Parent), effective as of the day immediately preceding the Closing Date. 5.13 Disclosure Supplements. From time to time prior to the Closing, the Company may supplement or amend the Company Schedule with respect to any matter arising or discovered after the date of this Agreement which, if existing or occurring or discovered at or prior to the date of this Agreement, would have been required to be set forth or described in the Company Schedule or which is necessary to complete or correct any information in the Company Schedule or in any representation or warranty of the Company which has been rendered inaccurate thereby. Any such supplements or amendments of which Parent receives written notice at or prior to the Closing shall not affect Parent's termination rights, but if the Closing shall occur notwithstanding any such supplement or amendment, each such supplement or amendment shall be deemed to modify the Company Schedule for all purposes of this Agreement and the Merger. 5.14 Insurance; Indemnification. (a) Parent will pay to the Company approximately $244,800 in respect of premiums for a six-year run out of the Company's $5 million directors' and officers' liability insurance policy. (b) After the Effective Time, Parent (i) will not take or permit to be taken any action to alter or impair any exculpatory or indemnification provisions now existing in the certificate of incorporation, by-laws or indemnification and employment agreements of the Company or any of its subsidiaries for the benefit of any individual who served as a director or officer of the Company or any of its subsidiaries at any time prior to the Effective Time (except as may be required by applicable law), and (ii) shall cause the Surviving Corporation to honor and fulfill such provisions until the date which is six years from the Effective Time (except as may be required by applicable law); provided, however, in the event any claim or claims are asserted within such period, all rights to indemnification in respect of such claim or claims shall continue until the final disposition thereof. ARTICLE VI CONDITIONS TO THE MERGER 6.1 Conditions to Obligations of Each Party to Effect the Merger. The respective obligations of each party to this Agreement to effect the Merger shall be subject to the satisfaction (or waiver) at or prior to the Closing Date of the following conditions: -34- 39 (a) No Order. No Governmental Entity shall have enacted, issued, promulgated, enforced or entered any statute, rule, regulation, executive order, decree, injunction or other order (whether temporary, preliminary or permanent) which is in effect and which has the effect of making the Merger illegal or otherwise prohibiting consummation of the Merger. (b) Stockholder Approval. This Agreement shall have been approved and adopted, and the Merger shall have been duly approved, by the requisite vote under applicable law and the Company Charter Documents, by the stockholders of the Company. 6.2 Additional Conditions to Obligations of the Company. The obligation of the Company to consummate and effect the Merger shall be subject to the satisfaction at or prior to the Closing Date of each of the following conditions, any of which may be waived, in writing, exclusively by the Company: (a) Representations and Warranties. The representations and warranties of Parent and Merger Sub contained in this Agreement (i) shall have been true and correct as of the date of this Agreement and (ii) shall be true and correct on and as of the Closing Date with the same force and effect as if made on the Closing Date, except for those representations and warranties which address matters only as of a particular date (which representations shall have been true and correct as of such particular date) and except, in all such cases, where the failure to be so true and correct (without regard to any materiality standards contained therein), individually or in the aggregate, have not had, and are not reasonably likely to have, a Material Adverse Effect on Parent (it being understood that for purposes of determining the accuracy of such representations and warranties, any update of or modification to the Parent Schedule made or purported to have been made after the date of this Agreement shall be disregarded). The Company shall have received a certificate with respect to the foregoing signed on behalf of Parent by a duly authorized officer of Parent. (b) Agreements and Covenants. Parent and Merger Sub shall have performed or complied in all material respects with all agreements and covenants required by this Agreement to be performed or complied with by them on or prior to the Closing Date, and the Company shall have received a certificate to such effect signed on behalf of Parent by a duly authorized officer of Parent. (c) Certificate of Secretary of Parent and Merger Sub. The Company shall have received certificates, validly executed by the Secretary of Parent and Merger Sub, certifying as to the valid adoption of resolutions of the Board of Directors of Parent and Merger Sub approving this Agreement and the applicable Related Agreements and the consummation of the transactions contemplated hereby. (d) Certificate of Good Standing. The Company shall have received certificates of good standing of Parent and Merger Sub from the Secretary of State of the State of Delaware, dated within a reasonable period prior to the Closing. (e) Omnibus Waiver and Amendment Agreement. Parent shall have executed and delivered to the Company the Omnibus Waiver and Amendment Agreement, in substantially the form attached as Exhibit D. The Omnibus Waiver and Amendment Agreement shall be in full force and effect. -35- 40 6.3 Additional Conditions to the Obligations of Parent and Merger Sub. The obligations of Parent and Merger Sub to consummate and effect the Merger shall be subject to the satisfaction at or prior to the Closing Date of each of the following conditions, any of which may be waived, in writing, exclusively by Parent: (a) Representations and Warranties. The representations and warranties of the Company contained in this Agreement (i) shall have been true and correct as of the date of this Agreement and (ii) shall, as updated pursuant to Section 5.13, be true and correct on and as of the Closing Date with the same force and effect as if made on and as of the Closing Date, except for those representations and warranties which address matters only as of a particular date (which representations shall have been true and correct as of such particular date) and except, in all such cases, where the failure to be so true and correct (without regard to any materiality standards contained therein), individually or in the aggregate, have not had, and are not reasonably likely to have, a Material Adverse Effect on the Company. Parent shall have received a certificate with respect to the foregoing signed on behalf of the Company by the Chief Executive Officer of the Company. (b) Agreements and Covenants. The Company shall have performed or complied in all material respects with all agreements and covenants required by this Agreement to be performed or complied with by it at or prior to the Closing Date, and Parent shall have received a certificate to such effect signed on behalf of the Company by the Chief Executive Officer of the Company. (c) Continuation of Agreements. Those agreements listed on Schedule 6.3(c) to this Agreement shall be unmodified in any manner from the date of this Agreement and be in full force and effect. (d) Consents. The Company shall have obtained all consents, waivers and approvals required in connection with the consummation of the transactions contemplated hereby in connection with the agreements, contracts, licenses or leases set forth on Schedule 6.3(d). (e) Resignation of Directors. Parent shall have received a written resignation from each of the directors of the Company effective as of the Effective Time. (f) No Material Adverse Change. There shall not have occurred any event or condition of any character that has had or is reasonably likely to have a Material Adverse Effect on the Company since the date of this Agreement. (g) Related Agreements. The Principal Shareholder shall have executed and delivered to Parent the Voting Agreement, in substantially the form attached as Exhibit A, and the Non-Competition Agreement, in substantially the form attached as Exhibit B. The Voting Agreement and the Non-Competition Agreement shall be in full force and effect. (h) Termination of 401(k) Plan. To the extent required by Section 5.12, Parent shall have received from the Company evidence that the Company's 401(k) plan has been terminated pursuant to resolution of the Company's Board of Directors (the form and substance of which shall -36- 41 have been subject to review and approval of Parent), effective as of the day immediately preceding the Closing Date. (i) Termination of Company Stock Options and Company Warrants. Parent shall have received from the Company evidence that the Company canceled all outstanding Company Stock Options and Company Warrants in accordance with the terms of Section 1.6(c). (j) Certificate of Secretary of the Company. Parent shall have received a certificate, validly executed by the Secretary of the Company, certifying as to (i) the terms and effectiveness the articles of incorporation and the bylaws of the Company, and (ii) the valid adoption of resolutions of the Board of Directors of the Company and the holders of the Company's stockholders approving this Agreement and the License Agreement and the consummation of the transactions contemplated hereby. (k) Certificate of Good Standing. Parent shall have received certificates of good standing of the Company from (i) the Secretary of State of the State of Delaware; (ii) the Secretary of State of the State of New Jersey; and (iii) the Franchise Tax Board of the State of New Jersey, each dated within a reasonable period prior to the Closing. (l) Removal of Liens. The Company shall have removed all material Liens pursuant to the Uniform Commercial Code on the property of the Company. (m) Sole Discretion. Parent shall have elected, in its sole discretion, to consummate the Merger and shall have delivered a certificate signed by a duly authorized officer of the Parent that Parent elects to proceed with the Merger. Notwithstanding the foregoing Section 6.3(a) through Section 6.3(l), Parent need not consummate and effect this Agreement and the transactions contemplated hereby even if the conditions set forth in the foregoing Section 6.3(a) through Section 6.3(l) are satisfied by the Company. ARTICLE VII TERMINATION, AMENDMENT AND WAIVER 7.1 Termination. This Agreement may be terminated and the Merger may be abandoned at any time prior to the Effective Time, whether before or after the requisite approval of the stockholders of the Company: (a) by Parent, for any reason or no reason; (b) by mutual written agreement of Parent and the Company; (c) by Parent or the Company, if the Merger shall not have been consummated by August 17, 2002 (the "Outside Date") for any reason, unless the parties agree to extend such date; provided, however, that the right to terminate this Agreement under this Section 7.1(c) shall not be available to any party if any action or failure to act by that party has been a principal cause of or resulted in the failure of the Merger to occur on or before such date and such action or failure to act constitutes a material breach of any agreement or covenant of such party pursuant to this Agreement (a "Preventing Act"); and provided further, however, Parent will not be able to prevent the Company -37- 42 from terminating this Agreement pursuant to this Section 7.1(c) based on a Preventing Act by the Company without waiving the condition to closing set forth in Section 6.3(m) and waiving its right to terminate this Agreement based upon Section 7.1(a); (d) by Parent or the Company, if a Governmental Entity shall have issued an order, decree or ruling or taken any other action, in any case having the effect of permanently restraining, enjoining or otherwise prohibiting the Merger, which order, decree, ruling or other action is final and nonappealable; (e) by Parent, if (i) the Board of Directors of Company, whether or not permitted pursuant to the terms hereof, withdraws, modifies or changes its recommendation of this Agreement or the Merger in a manner adverse to Parent, (ii) the Board of Directors of Company, whether or not permitted pursuant to the terms hereof, shall have made a Company Adverse Recommendation Change, (iii) the Company fails to comply with Section 5.7 in all material respects, (iv) a Takeover Proposal shall have been announced or otherwise become publicly known and the Board of Directors of Company shall have, within ten business days thereafter (A) failed to recommend against acceptance of such by its stockholders (including by taking no position, or indicating its inability to take a position, with respect to the acceptance by its stockholders of a Takeover Proposal involving a tender offer or exchange offer) or (B) failed to reconfirm its approval and recommendation of this Agreement and the transactions contemplated hereby, or (v) the Board of Directors of Company resolves to take any of the actions described above; (f) by Parent or the Company at any time after the Company Stockholders' Meeting in the event that the Company's stockholders do not approve this Agreement and the Merger contemplated herein by the requisite vote under applicable law and the Company Charter Documents; provided, however, that the right to terminate this Agreement pursuant to this Section 7.1(f) shall not be available to the Company if Parent submits a notice in writing to the Company, within ten (10) days after the Company Stockholders' Meeting (or within ten (10) days of any other meeting of the Company's stockholders thereafter convened to vote on this Agreement and the Merger), stating that it intends to re-solicit a stockholder vote on this Agreement and the Merger; and provided further, however, that Parent's right to re-solicit such a stockholder vote shall not be available to Parent after the Company's stockholders twice vote not to approve this Agreement and the Merger; (g) by the Company, in accordance with Section 5.7(b); provided, however, in order for the termination of this Agreement pursuant to this Section 7.1(g) to be deemed effective, the Company shall have complied in all material respects with all provisions contained in Section 5.7, including the notice provisions therein, and with applicable requirements of Section 7.3, including the payment of the Termination Fee and the effectiveness of the License Grant (if applicable); (h) by the Company, upon a breach of any representation, warranty, covenant or agreement on the part of Parent or Merger Sub set forth in this Agreement, or if any representation or warranty of Parent or Merger Sub shall have become untrue, in either case such that the conditions set forth in Section 6.2(a) or Section 6.2(b) would not be satisfied as of the time of such breach or as of the time such representation or warranty shall have become untrue, provided, however, that if such -38- 43 inaccuracy in Parent's representations and warranties or breach by Parent is curable by Parent, then the Company may not terminate this Agreement under this Section 7.1(h) for thirty (30) days after delivery of written notice from the Company to Parent of such breach, provided Parent continues to exercise best efforts to cure such breach (it being understood that the Company may not terminate this Agreement pursuant to this Section 7.1(h) if such breach by Parent is cured during such thirty (30)-day period); or (i) by Parent, upon a breach of any representation, warranty, covenant or agreement on the part of the Company set forth in this Agreement, or if any representation or warranty of the Company shall have become untrue, in either case such that the conditions set forth in Section 6.3(a) or Section 6.3(b) would not be satisfied as of the time of such breach or as of the time such representation or warranty shall have become untrue, provided, however, that if such inaccuracy in the Company's representations and warranties or breach by the Company is curable by the Company, then Parent may not terminate this Agreement under this Section 7.1(i) for thirty (30) days after delivery of written notice from Parent to the Company of such breach, provided the Company continues to exercise best efforts to cure such breach (it being understood that Parent may not terminate this Agreement pursuant to this Section 7.1(i) if such breach by the Company is cured during such thirty (30)-day period). 7.2 Notice of Termination. Any termination of this Agreement under Section 7.1 above will be effective immediately upon the delivery of written notice of the terminating party to the other parties (or such later time as may be required by Section 7.1). 7.3 Effect of Termination. (a) The Company shall (x) pay Parent a fee of $500,000 (the "Termination Fee"), which amount shall be payable by wire transfer of same day funds to a bank account designated by Parent, and (y) subject to the proviso set forth below, grant to Parent a non-exclusive license pursuant to the License Agreement, in substantially the form attached hereto as Exhibit C (the "License Grant") (provided, however, that the License Grant shall not come into force and effect if, prior to the termination of the Merger Agreement, the restrictions on transferability of, or the restrictive legends on, the shares of Company Common Stock owned by the Principal Shareholder (the "Shares"), are lifted or removed, as the case may be, by the California Department of Corporations sufficient to allow the transfer of interests in the Shares to Parent pursuant to the transactions contemplated by this Agreement and pursuant to the Voting Agreement), in the event that: (i) (A) any Person shall have made a Takeover Proposal to the Company or to its stockholders or publicly announces any Takeover Proposal relating to the Company after the date hereof and such Takeover Proposal shall not have been withdrawn and thereafter this Agreement is terminated by either party pursuant to Section 7.1(f), and (B) within one year after the termination of this Agreement any Acquisition Transaction involving the Company shall have been consummated or any Acquisition Agreement with respect to an Acquisition Transaction involving the Company shall have been entered into, (ii) this Agreement is terminated by Parent pursuant to Section 7.1(e) or -39- 44 (iii) this Agreement is terminated by the Company pursuant to Section 7.1(g). (b) The Termination Fee shall be paid and the License Grant (if applicable) shall be effected no later than (A) the date an Acquisition Agreement is entered into with respect to an Acquisition Transaction involving the Company, or if no such agreement is entered into, upon the date of consummation of an Acquisition Transaction involving the Company, in the case of a termination described in Section 7.3(a)(i), or (B) two days after such termination, in the case of a termination described in Section 7.3(a)(ii) or (C) concurrently with such termination, in the case of a termination described in Section 7.3(a)(iii). (c) Parent shall pay to Company a fee of: (A) $200,000, if such termination occurs within nine months after the date of this Agreement; (B) $300,000, if such termination occurs between nine and ten months after the date of this Agreement; (C) $400,000, if such termination occurs between ten and eleven months after the date of this Agreement; and (D) $500,000, if such termination occurs after the end of the eleventh month after the date of this Agreement (which fee shall be payable immediately by wire transfer of same day funds to a bank account designated by the Company), in the event that: (i) Parent terminates this Agreement pursuant to Section 7.1(a); (ii) Parent terminates this Agreement pursuant to Section 7.1(c); or (iii) the Company terminates this Agreement pursuant to Section 7.1(c); provided, however, that Parent shall not be obligated to make payment of such fee pursuant to this clause (iii) if Parent shall have given notice of termination pursuant to Section 7.1(i) prior to the Company's termination pursuant to Section 7.1(c) and the cure period in Section 7.1(i), if a cure period is applicable, shall not have expired, unless the breach or inaccuracy in respect of which such notice was given has been cured. (d) Each of the parties acknowledges that the agreements contained in this Section 7.3 are an integral part of the transactions contemplated in this Agreement and that, without these agreements, the parties would not enter into this Agreement; accordingly, if (i) the Company fails to promptly pay the Termination Fee or effect the License Grant (if applicable), and in order to obtain such Termination Fee or License Grant, the Parent commences a suit which results in a judgment for the Termination Fee and/or the License Grant set forth in this Section 7.3, the Company shall pay to Parent its costs and expenses (including reasonable attorneys' fees) in connection with such suit or (ii) Parent fails to promptly pay the amount provided for in Section 7.3(c), and in order to obtain such amount, the Company commences a suit which results in a judgment for such amount, Parent shall pay to the Company its costs and expenses (including reasonable attorneys' fees) in connection with such suit. (e) In the event of the termination of this Agreement as provided in Section 7.1, this Agreement shall be of no further force or effect, and the parties shall have no further liability or obligation hereunder, except (i) as set forth in this Section 7.3, Section 5.1, Section 5.3, Section 5.6(a), Section 7.4 and Article VIII, each of which shall survive the termination of this -40- 45 Agreement, and (ii) nothing in this Agreement shall relieve any party from liability for fraud in connection with, or any willful breach of, this Agreement. (f) Effective upon the termination of this Agreement as provided in any subsection of Section 7.1 except Section 7.1(e) and Section 7.1(g), Parent hereby: (i) waives Section 3.B(iv) of the Certificate of Designations to the extent that such provision would hinder the Company from raising equity financing; (ii) waives any "demand" registration rights as set forth in Section 2.1 of the Registration Rights Agreement, dated as of December 3, 1999, by and among the Company, ASC and the Stockholders listed therein, as amended by the First Amendment to the Registration Rights Agreement, dated as of August 17, 2001, by and among the Company, ASC, the Stockholders and Parent and the Second Amendment to the Registration Rights Agreement, dated as of August 17, 2001, by and between the Company and Parent (collectively, the "Rights Agreement"), for a period of one year after such termination; and (iii) amends Section 7 of the Common Stock Warrant and Section 7 of the ASC Warrant to provide that upon an equity financing in which the price per share (as determined in accordance with the applicable provisions of the Common Stock Warrants and the ASC Warrant) is less than the "Purchase Price per share" (as defined in the Common Stock Warrants and the ASC Warrant), the "anti-dilution" rights contained in the Common Stock Warrants and the ASC Warrant will be limited to decreasing the "Purchase Price per share" of the Common Stock Warrants and the ASC Warrant to equal the lowest price per share at which the additional equity financing is raised, but will not result in an increase in the number of shares of Company Common Stock that can be purchased pursuant to the Common Stock Warrants and the ASC Warrant; such waiver and amendment to be effected pursuant to the Omnibus Waiver and Amendment Agreement, in substantially the form attached as Exhibit D. 7.4 Fees and Expenses. Except as set forth in this Section 7.4, all fees and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such expenses whether or not the Merger is consummated; provided, however, that Parent shall bear all fees and expenses (including without limitation the Company's reasonable attorneys' and accountants' fees and expenses) incurred in relation to the printing and filing of the Proxy Statement (including any preliminary materials related thereto) and any amendments or supplements thereto. 7.5 Amendment. Subject to applicable law, this Agreement may be amended by the parties at any time by execution of an instrument in writing signed on behalf of each of Parent, Merger Sub and the Company. 7.6 Extension; Waiver. At any time prior to the Effective Time, any party may, to the extent legally allowed, (i) extend the time for the performance of any of the obligations or other acts of the other parties, (ii) waive any inaccuracies in the representations and warranties made to such party contained in this Agreement or in any document delivered pursuant hereto and (iii) waive -41- 46 compliance with any of the agreements or conditions for the benefit of such party contained herein. Any agreement on the part of a party to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. Delay in exercising any right under this Agreement shall not constitute a waiver of such right. ARTICLE VIII GENERAL PROVISIONS 8.1 Survival of Representations and Warranties. The representations and warranties of the Company, Parent and Merger Sub contained in this Agreement shall terminate at the earlier of (a) the date of termination pursuant to Section 7.1 or (b) the Effective Time, and only the covenants that by their terms survive such date shall survive. 8.2 Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally or by commercial delivery service, or sent via telecopy (receipt confirmed) to the parties at the following addresses or telecopy numbers (or at such other address or telecopy numbers for a party as shall be specified by like notice): (a) if to Parent or Merger Sub, to: VISX, Incorporated 3400 Central Expressway Santa Clara, California 95051-0703 Attention: Chief Financial Officer Telephone No.: (408) 773-7003 Facsimile No.: (408) 773-7201 with a copy to: Wilson Sonsini Goodrich & Rosati Professional Corporation 650 Page Mill Road Palo Alto, California 94304 Attention: John V. Roos, Esq. Telephone No.: (650) 493-9300 Facsimile No.: (650) 493-6811 (b) if to the Company, to: Medjet Inc. 1090 King George Post Road, Suite 301 Edison, NJ 08837 Attention: Eugene I. Gordon Telephone No.: (732) 738-3990 Facsimile No.: (732) 738-3984 with a copy to: -42- 47 Kelley Drye & Warren LLP 101 Park Avenue New York, NY 10178-0002 Attention: Jane E. Jablons, Esq. Telephone No.: (212) 808-7800 Facsimile No.: (212) 808-7897 8.3 Interpretation; Definitions. (a) When a reference is made in this Agreement to Exhibits, such reference shall be to an Exhibit to this Agreement unless otherwise indicated. When a reference is made in this Agreement to Sections, such reference shall be to a Section of this Agreement. Unless otherwise indicated the words "include," "includes" and "including" when used in this Agreement shall be deemed in each case to be followed by the words "without limitation." 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 interpretation of this Agreement. When reference is made in this Agreement to "the business of" an entity, such reference shall be deemed to include the business of all direct and indirect subsidiaries of such entity. Reference to the subsidiaries of an entity shall be deemed to include all direct and indirect subsidiaries of such entity. (b) For purposes of this Agreement: (i) the term "knowledge" means with respect to a party hereto, with respect to any matter in question, the actual knowledge of the executive officers of such party after reasonable inquiry; (ii) the term "Material Adverse Effect" when used in connection with an entity means any change, event, violation, inaccuracy, circumstance or effect that is, or could reasonably be expected to be, materially adverse to the business, assets, liabilities, financial or other condition, or results of operations of such entity and its subsidiaries taken as a whole; (iii) the term "person" shall mean any individual, corporation (including any non-profit corporation), general partnership, limited partnership, limited liability partnership, joint venture, estate, trust, company (including any limited liability company or joint stock company), firm or other enterprise, association, organization, entity or Governmental Entity. 8.4 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 of the parties and delivered to the other party, it being understood that all parties need not sign the same counterpart. 8.5 Entire Agreement; Third Party Beneficiaries. This Agreement and the documents and instruments and other agreements among the parties as contemplated by or referred to in this Agreement, including the Related Agreements, the Parent Warrant, the Company Schedule and the Parent Schedule: (a) constitute the entire agreement among the parties with respect to the subject -43- 48 matter hereof and supersede all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof, it being understood that the Nondisclosure Agreement shall continue in full force and effect until the Closing and shall survive any termination of this Agreement; and (b) are not intended to confer upon any other person any rights or remedies hereunder (except as provided in Section 5.14 with respect to the directors and officers of the Company). 8.6 Severability. In the event that any provision of this Agreement, or the application thereof, becomes or is declared by a court of competent jurisdiction to be illegal, void or unenforceable, the remainder of this Agreement will continue in full force and effect and the application of such provision to other persons or circumstances will be interpreted so as reasonably to effect the intent of the parties. The parties further agree to replace such void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the economic, business and other purposes of such void or unenforceable provision. 8.7 Other Remedies; Specific Performance. Except as otherwise provided in this Agreement, any and all remedies expressly conferred upon a party will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon such party, and the exercise by a party of any one remedy will not preclude the exercise of any other remedy. 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 or were otherwise breached. It is accordingly agreed that the parties shall be entitled to seek an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in any court of the United States or any state having jurisdiction, this being in addition to any other remedy to which they are entitled at law or in equity. 8.8 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of law thereof. 8.9 Rules of Construction. The parties agree that they have been represented by counsel during the negotiation and execution of this Agreement and, therefore, waive the application of any law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such agreement or document. 8.10 Assignment. No party may assign either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval of the other parties. Any purported assignment without the consent required pursuant to the preceding sentence shall be null and void. Subject to the second preceding sentence, this Agreement shall be binding upon and shall inure to the benefit of the parties and their respective successors and permitted assigns. [remainder of the page intentionally left blank] -44- 49 IN WITNESS WHEREOF, Parent, Merger Sub and the Company have caused this Agreement to be signed, all as of the date first written above. VISX, INCORPORATED By: -------------------------------------- Name: Derek A. Bertocci Title: Vice President, Controller ORION ACQUISITION CORPORATION By: -------------------------------------- Name: Derek A. Bertocci Title: Vice President, Chief Financial Officer MEDJET INC. By: -------------------------------------- Name: Eugene I. Gordon Title: Chief Executive Officer [SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER AND REORGANIZATION] 50 INDEX OF EXHIBITS
EXHIBIT DESCRIPTION ------- ----------- Exhibit A Form of Voting Agreement Exhibit B Form of Non-Competition Agreement Exhibit C Form of License Agreement Exhibit D Form of Omnibus Waiver and Amendment Agreement Exhibit E Form of Parent Warrant Exhibit F Form of Certificate of Merger Exhibit G Form of Amended and Restated Certificate of Incorporation of the Company
51 EXHIBIT A FORM OF VOTING AGREEMENT 52 EXHIBIT B FORM OF NON-COMPETITION AGREEMENT 53 EXHIBIT C FORM OF LICENSE AGREEMENT 54 EXHIBIT D FORM OF OMNIBUS WAIVER AND AMENDMENT AGREEMENT 55 EXHIBIT E FORM OF PARENT WARRANT 56 EXHIBIT F FORM OF CERTIFICATE OF MERGER 57 EXHIBIT G FORM OF AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF THE COMPANY EX-3 5 f75398ex3.txt EXHIBIT 3 1 VOTING AND STOCK OPTION AGREEMENT This VOTING AND STOCK OPTION AGREEMENT (the "Agreement") is made and entered into as of August 17, 2001 by and between VISX, Incorporated, a Delaware corporation ("Parent"), and Eugene I. Gordon, the undersigned stockholder ("Stockholder") of Medjet Inc., a Delaware corporation (the "Company"). BACKGROUND A. Concurrently with the execution of this Agreement, Parent, Orion Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of Parent ("Merger Sub") and the Company have entered into an Agreement and Plan of Merger and Reorganization, dated as of August 17, 2001 (as the same may be amended from time to time, the "Merger Agreement"), which provides, subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, for the merger (the "Merger") of Merger Sub with and into the Company. Capitalized terms not otherwise defined herein have the meanings given to such terms in the Merger Agreement. B. Pursuant to the Merger, all of the issued and outstanding shares of capital stock of the Company, except those shares owned by Parent, will be converted into the right to receive the consideration set forth therein, all upon the terms and subject to the conditions set forth in the Merger Agreement. C. Stockholder is the beneficial owner (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) of the number of shares of outstanding common stock of the Company ("Company Common Stock") and the number of vested options and/or warrants to purchase Company Common Stock (the "Stock Options"), as set forth on the Schedule A. The Company Common Stock owned by the Stockholder as of the date hereof, together with any common or preferred stock of the Company acquired by the Stockholder after the date of this Agreement whether upon the exercise of Stock Options or otherwise, are referred to herein as the Stockholder's "Shares." The Stock Options owned by the Stockholder as of the date hereof, together with any Stock Options acquired by the Stockholder after the date of this Agreement (including the vesting of Stock Options unvested as of the date of this Agreement), are referred to herein as the Stockholder's "Total Options." The Shares and the Total Options are referred to herein as the Stockholder's "Securities." D. As an inducement and a condition to Parent's execution of the Merger Agreement, the Company and the Stockholder are entering into this Agreement. NOW, THEREFORE, in consideration of the execution and delivery by Parent of the Merger Agreement and the mutual covenants, conditions and agreements herein contained, the parties hereto hereby agree as follows: 1. Voting Agreement. The Stockholder agrees that, during the time this Agreement is in effect, at any meeting of the stockholders of the Company (a "Company Stockholders' Meeting"), however called, and at every adjournment or postponement thereof, he, she or it shall: 2 (a) appear at the meeting or otherwise cause his, her or its Shares to be counted as present thereat for purposes of establishing a quorum; (b) vote, or execute consents in respect of, his, her or its Shares, or cause his, her or its Shares to be voted, or consents to be executed in respect thereof, in favor of the approval and adoption of the Merger Agreement (including any revised or amended Merger Agreement), and any action required in furtherance thereof; (c) vote, or execute consents in respect of, his, her or its Shares, or cause his, her or its Shares to be voted, or consents to be executed in respect thereof, against (i) any agreement or transaction relating to any Takeover Proposal or transaction or occurrence that if proposed and offered to the Company or its stockholders (or any of them) would constitute a Takeover Proposal (collectively, "Alternative Transactions") or (ii) any amendment of the Company's Certificate of Incorporation or By-laws or other proposal, action or transaction involving the Company or any of its Subsidiaries or any of its stockholders, which amendment or other proposal, action or transaction could reasonably be expected to prevent or materially impede or delay the consummation of the Merger or the other transactions contemplated by the Merger Agreement or the consummation of the transactions contemplated by this Agreement, or change in any manner the voting rights of the Company Common Stock (collectively, "Frustrating Transactions") presented to the Stockholders of the Company (regardless of any recommendation of the Board of Directors of the Company) or in respect of which vote or consent of the Stockholder is requested or sought. 2. Irrevocable Proxy. As security for the Stockholder's obligations under Section 1, effective immediately upon the removal of legends from, or the lifting of transfer restrictions on, the Stockholder's Shares by the California Department of Corporations, sufficient to allow the transfer of interests in the Shares to Parent pursuant to the Merger and this Agreement (the "Proxy Effective Time"), the Stockholder hereby irrevocably constitutes and appoints Parent as his, her or its attorney and proxy in accordance with Delaware General Corporation Law, with full power of substitution and resubstitution, to cause the Stockholder's Shares to be counted as present at any Company Stockholders Meetings to vote his, her or its Shares at any Company Stockholders' Meeting, however called, and execute consents in respect of his, her or its shares as and to the extent provided in Section 1. THIS PROXY AND POWER OF ATTORNEY UPON ITS EFFECTIVENESS WILL BE IRREVOCABLE AND COUPLED WITH AN INTEREST. The Stockholder hereby revokes all other proxies and powers of attorney with respect to his, her or its Shares that he, she or it may have heretofore appointed or granted, and no subsequent proxy or power of attorney shall be granted, in each case to the extent such prior or subsequent proxies or powers of attorney would prevent the Stockholder from complying with such Stockholder's obligations under this Agreement. 3. Option. (a) Subject to the terms and conditions set forth in this Agreement, effective immediately upon the Proxy Effective Time, the Stockholder hereby grants to Parent an irrevocable option (the "Option") to purchase (i) the number of shares of Company Common Stock set forth next to the Stockholder's name on Schedule A hereto (as adjusted as set forth herein) and any other shares of Company Common Stock or Company Preferred Stock owned by the Stockholder -2- 3 beneficially or acquired after the date of this Agreement, at a per share purchase price equal to $2.00 (as adjusted as set forth herein), and (ii) the number of Stock Options set forth next to the Stockholder's name on Schedule A hereto (as adjusted as set forth herein) and any other Stock Options owned by the Stockholder beneficially or acquired after the date of this Agreement, at a per share purchase price equal to the difference between $2.00 and the exercise price per share (if less than $2.00) of each Stock Option (as adjusted as set forth herein), provided that such Stock Options can be transferred to Parent pursuant to the terms of the governing agreements or instruments thereof. The total price to be paid by Parent to the Stockholder for all such Shares and Total Options is herein referred to as the "Purchase Price." (b) The Option may be exercised by Parent, in whole (but not in part): (i) if after the date hereof the Merger Agreement shall be terminated pursuant to Section 7.1(e) or Section 7.1(g) of the Merger Agreement; or (ii) if after the date hereof, and prior to the termination of the Merger Agreement, Parent (A) makes, or indicates in writing its willingness to make, sufficient funds available to effect the Merger, and (B) attempts to effect the Merger pursuant to the Merger Agreement and the Delaware General Corporation Law, but is unable to do so for any reason (including but not limited to the failure of the Company to call or hold a Company Stockholders' Meeting). (c) In the event that Parent wishes to exercise the Option, it shall send to the Stockholder a written notice (the date of each such notice being herein referred to as a "Notice Date") setting forth its irrevocable election to that effect, which notice also specifies a date not earlier than three business days nor later than 30 business days from the Notice Date for the closing of such purchase (an "Option Closing Date"); provided, however, that (i) if the closing of a purchase and sale pursuant to the Option (an "Option Closing") cannot be consummated by reason of any applicable judgment, decree, order, law or regulation, the period of time that otherwise would run pursuant to this sentence shall run instead from the date on which the restriction on consummation has expired or been terminated and (ii) without limiting the foregoing, if prior notification to or approval of any regulatory authority is required in connection with the purchase, Parent and the Stockholder shall promptly file the required notice or application for approval and shall cooperate in the expeditious filing of such notice or application, and the period of time that otherwise would run pursuant to this sentence shall run instead from the date on which, as the case may be, (A) any required notification period has expired or been terminated or (B) any required approval has been obtained, and in either event, any requisite waiting period has expired or been terminated. Each of Parent and the Stockholder agrees to use commercially reasonable efforts to cooperate with and provide information to the other, for the purpose of any required notice or application for approval. Any exercise of the Option shall be deemed to occur on the Notice Date relating thereto. The place of any Option Closing shall be at the offices of Parent, which address is set forth in the Merger Agreement, and the time of the Option Closing shall be 10:00 a.m. (Pacific Time) on the Option Closing Date. -3- 4 (d) At the Option Closing, Parent shall pay to the Stockholder in immediately available funds by wire transfer to a bank account designated in writing by the Stockholder an amount equal to the Purchase Price; provided, that failure or refusal of the Stockholder to designate a bank account shall not preclude Parent from exercising the Option. (e) At the Option Closing, simultaneously with the delivery of immediately available funds as provided above, the Stockholder shall deliver to Parent a certificate or certificates representing its Securities to be purchased at such Option Closing, which Securities shall be free and clear of all liens, claims, charges and encumbrances of any kind whatsoever, except as set forth on Schedule B hereto. (f) In the event of any change in the Company Common Stock by reason of a stock dividend, split-up, merger, recapitalization, combination, exchange of shares or similar transaction, the type and number of Securities subject to the Option, and the per share purchase price therefor, shall be adjusted appropriately, so that Parent shall receive upon exercise of the Option the number and class of shares or other securities or property that Parent would have received if the Option had been exercised immediately prior to such event or the record date therefor, as applicable. (g) After Parent attempts to exercise the Option, in the event the Stockholder is unable to comply with the provisions of this Section 3 due to any restrictions on transferability placed on the Securities by any governmental authority, the Stockholder will use best efforts to promptly remove such restrictions, and at Parent's request, will place the Securities in escrow and will not attempt to transfer the Securities to any other party pursuant to any agreement to sell, merger or otherwise. 4. Termination. This Agreement shall terminate upon the earliest of: (a) the Effective Time of the Merger; (b) the termination of the Merger Agreement for reasons other than those described in Section 4(c) below; and (c) 20 days following the termination of the Merger Agreement pursuant to Section 7.1(e) or Section 7.1(g) thereof (except that Section 1 and Section 2 hereof shall terminate upon termination of the Merger Agreement pursuant to Section 7.1(e) or Section 7.1(g) thereof). Notwithstanding the foregoing, if the Option cannot be exercised by reason of any applicable judgment, decree, order, law or regulation, the Option shall remain exercisable and shall not terminate until the earlier of (x) the date on which such impediment shall become final and not subject to appeal, and (y) 5:00 p.m. Pacific Time, on the tenth (10th) business day after such impediment shall have been removed. Notwithstanding the termination of the Option or this Agreement, Parent shall be entitled to purchase the Securities if it has exercised the Option in accordance with the terms hereof prior to such termination and such termination shall not affect any rights hereunder which by their terms do not terminate or expire prior to or as of such termination. -4- 5 5. Representations and Warranties of Parent. Parent represents and warrants to the Stockholder as follows: (a) Organization; Due Authorization; Enforceability. Parent is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. (b) Authority Relative to this Agreement. Parent has full corporate power and authority to execute and deliver this Agreement. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by the Board of Directors of Parent, and no other corporate proceedings on the part of Parent are necessary to authorize this Agreement or to consummate the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by Parent and constitutes a valid and binding agreement of Parent, enforceable against Parent in accordance with its terms, subject to applicable bankruptcy, insolvency, moratorium or other similar laws relating to creditors' rights and to general principles of equity. 6. Representations and Warranties of the Stockholder. The Stockholder hereby represents and warrants to Parent as follows: (a) Organization; Due Authorization; Enforceability. The Stockholder has full power and authority to execute and deliver this Agreement. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by all necessary action on the part of the Stockholder, and no other proceedings on the part of the Stockholder are necessary to authorize this Agreement or to consummate the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by the Stockholder and constitutes a valid and binding agreement of the Stockholder, enforceable against such Stockholder in accordance with its terms, subject to applicable bankruptcy, insolvency, moratorium or other similar laws relating to creditors' rights and to general principles of equity. (b) Ownership of Securities; Voting Rights. The Stockholder owns, of record and beneficially, the shares of Company Common Stock and Stock Options set forth opposite the Stockholder's name on Schedule A. The Stockholder has sole voting power with respect to his or her shares of Company Common Stock. Except pursuant to this Agreement or as set forth on Schedule B, the Stockholder's shares of Company Common Stock are not subject to any voting trust agreement or other contract, agreement, arrangement, commitment or understanding to which the Stockholder is a party restricting or otherwise relating to the voting, dividend rights or disposition of such shares of Company Common Stock. The Company Common Stock are the only equity securities of the Company owned by the Stockholder. The Stockholder does not have any option or other right to acquire any equity securities of the Company other than the Stock Options. (c) No Encumbrances. Except as set forth on Schedule B, upon the exercise of the Option and the delivery to Parent by Stockholder of a certificate or certificates, or other similar document, evidencing the Shares and Total Options, Parent will receive good, valid and marketable title to the Shares and Total Options, free and clear of all security interests, liens, claims, pledges, -5- 6 options, rights of first refusal, agreements, limitations on Parent's voting rights, charges and other encumbrances of any nature whatsoever (except any security interest created by Parent). (d) No Conflicts. Except as set forth on Schedule B, no authorization, consent or approval of, or filing with, any court or any public body or authority is necessary for the consummation by the Stockholder of the transactions contemplated by this Agreement. The execution, delivery and performance of this Agreement by the Stockholder will not constitute a breach, violation or default (or any event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or accelerate the performance required by, or result in a right of termination or acceleration under, or result in the creation of any lien or encumbrance upon any of the properties or assets of such Stockholder under, any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument to which such Stockholder is a party or by which his, her or its properties or assets are bound, other than breaches, violations, defaults, terminations, accelerations or creation of liens and encumbrances which, in the aggregate, would not materially impair the ability of such Stockholder to perform his, her or its obligations hereunder. (e) Brokers. No broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the transactions contemplated hereby based upon arrangements made by or on behalf of the Stockholder. 7. Stockholder Covenants. The Stockholder hereby covenants and agrees as follows: (a) The Stockholder hereby agrees, while this Agreement is in effect, and except as contemplated hereby, not to sell, transfer, pledge, encumber, assign or otherwise dispose of, or enter into any contract, option or other arrangement or understanding with respect to the sale, transfer, pledge, encumbrance, assignment or other disposition of (all of the foregoing, "Sell," "Sold" or "Sale," as the case may be), any of the Securities; provided, however, that Stockholder may transfer any of the Shares to a trust of which there are no beneficiaries other than the parents, spouse or children of Stockholder, or otherwise make transfers for estate planning purposes, so long as the trust and the trustees, or other transferee, thereof, deliver a signed copy of this Agreement to Parent, agreeing to be bound by the restrictions set forth herein. (b) The Stockholder hereby agrees, while this Agreement is in effect, to promptly notify Parent of the number of new shares of capital stock or Stock Options of the Company acquired by such Stockholder, if any, after the date of this Agreement. (c) The Stockholder shall immediately cease any discussions or negotiations with any parties other than Parent that may be ongoing with respect to a Takeover Proposal. While this Agreement is in effect, the Stockholder shall not, directly or indirectly, (i) solicit, initiate or encourage, or take any other action to facilitate, any inquiries or the making of any Acquisition Transaction or Frustrating Transaction, (ii) execute or enter into any Acquisition Agreement with respect to any Alternative Transaction or Frustrating Transaction, or (iii) enter into, engage in, continue or otherwise participate in any discussions or negotiations regarding, or provide any information or data to any person or otherwise cooperate in any way with, any Acquisition -6- 7 Transaction or Frustrating Transaction, except to the extent such discussions or negotiations are participated in by the Stockholder in his or her capacity as a director or officer of the Company in accordance with the terms of the Merger Agreement. (d) The Stockholder agrees not to engage in any action or omit to take any action which would have the effect of preventing or disabling Stockholder from delivering its Securities to Parent or otherwise performing its obligations under this Agreement. 8. Miscellaneous. (a) Fees and Expenses. Except as otherwise provided in the Merger Agreement, all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be borne by the party incurring such expenses. (b) Amendment. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties. (c) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO ITS CONFLICT OF LAWS RULES OR PRINCIPLES. (d) Notices. All notices or other communications under this Agreement shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by cable, telegram, telex or other standard form of telecommunications, or by registered or certified mail, postage prepaid, return receipt requested, addressed as follows: If to Parent, to: VISX, Incorporated 3400 Central Expressway Santa Clara, California 95051-0703 Attention: Chief Financial Officer Telephone No.: (408) 773-7003 Facsimile No.: (408) 773-7201 with a copy to: Wilson Sonsini Goodrich & Rosati, P.C. 650 Page Mill Road Palo Alto, California 94304 Attention: John V. Roos, Esq. Telephone No.: (650) 493-9300 Facsimile No.: (650) 493-6811 If to Stockholder: To the address for notice set forth on Schedule A. with a copy to: Kelley Drye & Warren LLP 101 Park Avenue New York, NY 10178-0002 -7- 8 Attention: Jane E. Jablons, Esq. Telephone No.: (212) 808-7800 Facsimile No.: (212) 808-7897 or to such other address as any party may have furnished to the other parties in writing in accordance with this Section. (e) Assignment; Binding Effect; No Third Party Beneficiaries. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto (whether by operation of law or otherwise) without the prior written consent of the other parties. Any purported assignment without the consent required pursuant to the preceding sentence shall be null and void. Subject to the second preceding sentence, this Agreement (including, without limitation, the obligations of the Stockholder under Section 1 and Section 2 hereof) shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. Notwithstanding anything contained in this Agreement to the contrary, nothing in this Agreement, expressed or implied, is intended to confer on any person other than the parties hereto or their respective successors and assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement. Notwithstanding the foregoing, Parent may assign this agreement to one or more of its affiliates. (f) Enforcement. THE PARTIES HERETO 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 OR WERE OTHERWISE BREACHED. IT IS ACCORDINGLY AGREED THAT, SUBJECT TO THE NEXT SENTENCE, THE PARTIES SHALL BE ENTITLED TO AN INJUNCTION OR INJUNCTIONS TO PREVENT BREACHES OF THIS AGREEMENT AND TO ENFORCE SPECIFICALLY THE TERMS AND PROVISIONS HEREOF SOLELY IN THE COURTS OF THE STATE OF DELAWARE, THIS BEING IN ADDITION TO ANY OTHER REMEDY TO WHICH THEY ARE ENTITLED AT LAW OR IN EQUITY. EACH OF THE PARTIES HERETO (I) CONSENTS TO SUBMIT ITSELF TO THE PERSONAL JURISDICTION OF ANY FEDERAL COURT LOCATED IN THE STATE OF DELAWARE OR ANY DELAWARE STATE COURT IN THE EVENT ANY DISPUTE ARISES OUT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, (II) AGREES THAT IT SHALL NOT ATTEMPT TO DENY OR DEFEAT SUCH PERSONAL JURISDICTION BY MOTION OR OTHER REQUEST FOR LEAVE FROM ANY SUCH COURT, AND (III) AGREES THAT IT SHALL NOT BRING ANY ACTION RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT IN ANY COURT OTHER THAN A FEDERAL COURT SITTING IN THE STATE OF DELAWARE OR A DELAWARE STATE COURT. (g) Severability. In the event that any provision of this Agreement, or the application thereof, becomes or is declared by a court of competent jurisdiction to be illegal, void or unenforceable, the remainder of this Agreement will continue in full force and effect and the application of such provision to other persons or circumstances will be interpreted so as reasonably to effect the intent of the parties. The parties further agree to replace such void or unenforceable -8- 9 provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the economic, business and other purposes of such void or unenforceable provision. (i) Counterparts. This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument. Each counterpart may consist of a number of copies hereof each signed by less than all, but together signed by all of the parties hereto. (j) Further Assurances. Each party hereto shall perform such further acts and execute such further documents as may reasonably be required to carry out the provisions of this Agreement. [Remainder of Page Intentionally Left Blank] -9- 10 IN WITNESS WHEREOF, the undersigned have executed this Agreement on the date first above written. VISX, INCORPORATED By:_____________________________________ Name: Derek A. Bertocci Title: Vice President, Controller STOCKHOLDER ________________________________________ Dr. Eugene I. Gordon [SIGNATURE PAGE TO VOTING AND STOCK OPTION AGREEMENT] 11 SCHEDULE A
STOCK OPTIONS STOCKHOLDER COMPANY COMMON STOCK (INCLUDING WARRANTS) ----------- -------------------- -------------------- Eugene I. Gordon 1,596,787 205,009 c/o Medjet Inc. 1090 King Georges Post Rd., Suite 301 Edison, NJ 08837
12 SCHEDULE B Item 1 of Section 2.5 of the Company Schedule to the Merger Agreement, which is incorporated herein by reference, specifies certain encumbrances placed by the California Department of Corporations upon the Company Common Stock owned by Eugene I. Gordon and certain other stockholders of the Company. EX-4 6 f75398ex4.txt EXHIBIT 4 1 NON-EXCLUSIVE LICENSE AGREEMENT THIS NON-EXCLUSIVE LICENSE AGREEMENT (the "Agreement") is entered into as of August 17, 2001, by and between VISX, Incorporated ("VISX"), a Delaware corporation, and Medjet Inc. ("Medjet"), a Delaware corporation. BACKGROUND Concurrently with the execution of this Agreement, VISX, Orion Acquisition Corp., a Delaware corporation and wholly owned subsidiary of VISX ("Merger Sub") and Medjet have entered into an Agreement and Plan of Merger and Reorganization, dated as of August 17, 2001 (as the same may be amended from time to time, the "Merger Agreement"), which provides, subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, for the merger (the "Merger") of Merger Sub with and into Medjet. NOW, THEREFORE, in consideration of the execution and delivery by VISX of the Merger Agreement and the mutual covenants, conditions and agreements herein contained, the parties hereto hereby agree as follows, effective as of the Commencement Date (as defined below): 1. DEFINITIONS. 1.1 "Affiliate" means any corporation or other entity that is directly or indirectly controlling, controlled by or under the common control with a party hereto for so long as such control exists. For the purpose of this Agreement, "control" shall mean the direct or indirect ownership of fifty percent (50%) or more of the outstanding shares or other voting rights of the subject entity to elect directors, or if not meeting the preceding, any entity owned or controlled by or owning or controlling at the maximum control or ownership right permitted in the country where such entity exists. 1.2 "Licensee" means a third party to whom VISX has granted a license or sublicense under the Medjet Patents, to make, have made, import, use, sell, offer for sale or otherwise exploit a Product. "Licensee" includes a third party to whom VISX has granted the right to distribute a Product. 1.3 "Medjet Patents" means (i) all patents owned by Medjet or licensed to Medjet (to the extent Medjet may grant a license or sublicense to such patent) as of the date hereof with the right to grant sublicenses; and (ii) all patents issued to Medjet claiming an invention first reduced to practice prior to the expiration of the R&D Period. 1.4 "Medjet Technology" means technological models, algorithms, manufacturing processes, design drawings (whether manual or electronic), design processes, prototypes, behavioral models, schematics, test vectors, know-how, computer and electronic data processing and other apparatus programs and software, databases and documentation thereof, trade secrets, technical information, specifications, drawings, records, documentation, works of authorship or other creative works, ideas, knowledge, data or the like that is owned by or licensed to Medjet (to the extent Medjet may grant a license or sublicense to such intellectual property) as of the date hereof, 2 including without limitation information useful to the practice of the inventions claimed in the Medjet Patents. 1.5 "Net Sales" means the amounts received by VISX or its Affiliates or Licensees for the use or sale of Products to bona fide independent third parties, less (i) normal and customary rebates, and cash, trade and quantity discounts; (ii) sales, use and/or other excise taxes or duties; (iii) the actual cost of any packaging and shipping, including insurance; and (iv) amounts actually allowed or credited due to defects, returns, rejections, wholesale chargebacks or retroactive price reductions. 1.6 "Products" means any equipment, products, processes or methods covered by or that exploit or make use of one or more Valid Claims or that exploit or make use of the Medjet Technology. 1.7 "R&D Period" means the period beginning on the date hereof and continuing for one year hereafter. 1.8 "Valid Claim" means a claim of any Medjet patent that has not expired, lapsed, or been held invalid, unpatentable or unenforceable. 2. LICENSE GRANTS. 2.1 Medjet Technology. Subject to the provisions of Section 6, Medjet hereby grants VISX a non-exclusive, worldwide, perpetual, irrevocable license, with the right to grant non-exclusive sublicenses, to use, reproduce, translate, distribute (by any means known or hereafter developed, including electronic distribution), market, make derivative works of and otherwise exploit the Medjet Technology. 2.2 Medjet Patents. Subject to the provisions of Section 6, Medjet hereby grants VISX a non-exclusive, worldwide, perpetual, irrevocable license, with the right to grant non-exclusive sublicenses, under the Medjet Patents, to make, sell, offer for sale, import and use products, and to perform processes and methods, that embody the inventions described in the Medjet Patents. 3. CONSIDERATION. 3.1 Royalty on Net Sales. VISX shall pay to Medjet a royalty of five (5%) of Net Sales of Products. 3.2 Computation of Royalties. All sales of Products between VISX and any of its Affiliates (other than for end use with patients or customers) will be disregarded for purposes of computing Net Sales and royalties due Medjet under this Section 3, and in such instances royalties will be payable only upon sales or licenses to, or other use by, independent third parties. Nothing herein shall obligate VISX to pay Medjet royalties more than once on any unit of a Product. -2- 3 4. PAYMENTS; REPORTS AND RECORDS. 4.1 Timing of Payments. All amounts due Medjet pursuant to Section 3 shall be paid every 3 months ("Quarterly Period") within 30 days after the last day of each Quarterly Period. 4.2 Royalty Reports. VISX shall deliver to Medjet with each royalty payment a report setting forth the total Net Sales of the Products for the Quarterly Period and the computation of the royalty amount. Such reports shall be confidential information of VISX. 4.3 Inspection of Books and Records. Not more than once in any 12 month period, Medjet may have VISX's and its Affiliates' relevant books and records for the prior 12-month period audited, by an independent certified public accounting firm of Medjet's choosing and reasonably acceptable to VISX, to verify the accuracy of VISX's royalty payments. The independent certified public accounting firm must enter into a confidentiality agreement reasonably acceptable to VISX and may not disclose any information learned in the course of such audit other than the existence and amount of underpayment, if any. Such audit must be conducted during VISX's normal business hours in a manner that does not unduly interfere with VISX's normal business activities. If any audit discloses underpayment of royalties, VISX shall promptly pay Medjet the royalties due plus interest at an annual rate of 6%. Medjet is responsible for all expenses it incurs in connection with any audit unless the audit discloses an underpayment of royalties in excess of 15%, in which case, VISX shall promptly reimburse Medjet for all of such audit expenses. 4.4 Taxes. All royalty amounts required to be paid to Medjet pursuant to this Agreement may be paid with deduction for withholding for or on account of any taxes (other than taxes imposed on or measured by net income) or similar governmental charge ("Withholding Taxes"). At Medjet's request, VISX shall provide Medjet a certificate evidencing payment of any Withholding Taxes hereunder and shall reasonably assist Medjet to obtain the benefit of any applicable tax treaty. 5. TERM. This Agreement shall commence (the date of such commencement being herein referred to as the "Commencement Date") upon termination of the Merger Agreement in accordance with the applicable provisions and circumstances described in Section 7.3(a) of the Merger Agreement, and will continue in full force and effect until the expiration of the last to expire of the Medjet Patents; provided, however, that VISX's license to the Medjet Technology will survive the expiration (but not the earlier termination) of this Agreement if this Agreement were otherwise in effect on the date of the last of the Medjet patents to expire. 6. BREACH. If VISX shall breach any of its material obligations hereunder, which breach shall continue uncured for more than 30 days after written notice thereof, the licenses granted under Section 2 shall immediately terminate. Termination shall not affect VISX's obligations to pay any amounts due or payable to Medjet for Net Sales made prior to the date of termination. -3- 4 7. MISCELLANEOUS PROVISIONS. 7.1 Governing Law. This Agreement, and any dispute arising from the performance or breach hereof, will be governed by and construed and enforced in accordance with the laws of the State of California, without reference to conflicts of laws principles. The prevailing party in any legal action to enforce or interpret this Agreement shall be entitled to reasonable costs and attorneys' fees and expenses in connection therewith. 7.2 Independent Contractors. The relationship of the parties hereto is that of independent contractors. The parties hereto are not deemed to be agents, partners or joint venturers of the others for any purpose as a result of this Agreement or the transactions contemplated hereby. 7.3 Assignment. Neither party may assign this Agreement without the prior written consent of the other party, except that either party may assign this Agreement without such consent to an entity that acquires all or substantially all of the business or assets of such party pertaining to the subject matter hereof, whether by merger, reorganization, acquisition, sale or otherwise. Any other attempted assignment of this Agreement will be void. Subject to the foregoing, this Agreement will be binding upon and inure to the benefit of the parties and their successors, heirs and assigns. 7.4 Notices. All notices, requests and other communications hereunder will be in writing and will be personally delivered or sent by telecopy or other electronic facsimile transmission or by registered or certified mail, return receipt requested, postage prepaid, or overnight courier, in each case to the respective address appearing below each party's signature, or such other address as may be specified in writing to the other party hereto. 7.5 Partial Invalidity. If any provision of this Agreement is held to be invalid by a court of competent jurisdiction, then the remaining provisions will remain, nevertheless, in full force and effect. The parties agree to renegotiate in good faith any provision held invalid and to be bound by the mutually agreed substitute provision in order to give the most approximate effect originally intended by the parties. 7.6 Severability. In the event that any provisions of this Agreement are determined to be invalid or unenforceable by a court of competent jurisdiction, the remainder of the Agreement will remain in full force and effect without said provision. In such event, the parties will in good faith negotiate a substitute clause for any provision declared invalid or unenforceable, which will most nearly approximate the intent of the parties in entering this Agreement. 7.7 Waiver. It is agreed that no waiver by either party hereto of any breach or default of any of the covenants or agreements herein set forth will be deemed a waiver as to any subsequent and/or similar breach or default. 7.8 Complete Agreement. This Agreement (together with the applicable provisions of the Merger Agreement) constitutes the entire agreement, both written and oral, between the parties with respect to the subject matter hereof, and that all prior agreements respecting -4- 5 the subject matter hereof, either written or oral, expressed or implied, are merged and canceled, and are null and void and of no effect. No amendment or change hereof or addition hereto will be effective or binding on either of the parties hereto unless reduced to writing and duly executed on behalf of both parties hereto. 7.9 Headings. The captions to the Sections hereof are not a part of this Agreement, but are included merely for convenience of reference only and will not affect its meaning or interpretation. 7.10 Counterparts. This Agreement may be executed in counterparts, each of which will be deemed an original and which together will constitute one instrument. 7.11 Expiration. This Agreement shall expire and be of no force and effect in the event the Merger Agreement is terminated and the provisions set forth in Section 7.3(a) of the Merger Agreement are not applicable. [remainder of the page intentionally left blank] -5- 6 IN WITNESS WHEREOF, the undersigned have executed this Agreement on the date first above written. VISX, INCORPORATED By:____________________________________ Name: Derek A. Bertocci Title: Vice President, Controller Address for VISX, Incorporated: With a copy to: VISX, Incorporated Wilson Sonsini Goodrich & Rosati 3400 Central Expressway 650 Page Mill Road Santa Clara, CA 95051-0703 Palo Alto, CA 94304-1050 Facsimile: (408) 773-7051 Facsimile: (650) 493-6811 Attention: Derek A. Bertocci Attention: John V. Roos, Esq. MEDJET INC. By:____________________________________ Name: Dr. Eugene I. Gordon Title: Chief Executive Officer Address for Medjet Inc.: With a copy to: Medjet Inc. Kelley Drye & Warren LLP 1090 King George Post Road, Suite 301 101 Park Avenue Edison, New Jersey 08837 New York, New York 10178-0002 Facsimile: (732) 738-3984 Facsimile: (212) 808-7897 Attention: Dr. Eugene A. Gordon Attention: Jane E. Jablons, Esq. [SIGNATURE PAGE TO NON-EXCLUSIVE LICENSE AGREEMENT] EX-5 7 f75398ex5.txt EXHIBIT 5 1 EXHIBIT 5 Warrant No. __________ to acquire 1,040,000 shares THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THIS WARRANT AND SUCH SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT. THIS WARRANT AND SUCH SHARES MAY NOT BE TRANSFERRED EXCEPT UPON THE CONDITIONS SPECIFIED IN THIS WARRANT, AND NO TRANSFER OF THIS WARRANT OR SUCH SHARES SHALL BE VALID OR EFFECTIVE UNLESS AND UNTIL SUCH CONDITIONS SHALL HAVE BEEN COMPLIED WITH. THIS WARRANT IS SUBJECT TO THE TERMS AND CONDITIONS OF THE OMNIBUS WAIVER AND AMENDMENT AGREEMENT, DATED AS OF AUGUST 17, 2001, BY AND BETWEEN MEDJET INC. AND VISX, INCORPORATED. MEDJET INC. COMMON STOCK PURCHASE WARRANT Medjet Inc. (the "Company"), having its principal office at 1090 King Georges Post Road, Edison, New Jersey 08837, hereby certifies that, for value received, VISX, Incorporated (the "Holder"), is entitled, subject to the terms set forth below, to purchase from the Company at any time on or from time to time after August 17, 2001 and before the earlier of (i) the Effective Time (as defined herein) or (ii) 5:00 P.M., New York City time, on December 3, 2004 (the "Expiration Date"), One Million Forty Thousand (1,040,000) fully paid and non-assessable shares of Common Stock of the Company, at the initial Purchase Price per share (as defined below) of $3.50. The number and character of such shares of Common Stock and the Purchase Price per share are subject to adjustment as provided herein. As used herein the following terms, unless the context otherwise requires, have the following respective meanings: The term "Company" includes the Company and any corporation which shall succeed to or assume the obligations of the Company hereunder. 2 The term "Common Stock" includes all stock of any class or classes (however designated) of the Company, authorized upon the Original Issue Date or thereafter, the holders of which shall have the right, without limitation as to amount, either to all or to a share of the balance of current dividends and liquidating dividends after the payment of dividends and distributions on any shares entitled to preference, and the holders of which shall ordinarily, in the absence of contingencies, be entitled to vote for the election of a majority of directors of the Company (even though the right so to vote has been suspended by the happening of such a contingency). The term "Effective Time" means the time of filing of a Certificate of Merger with the Secretary of State of the State of Delaware by the Company and the Holder or its affiliates. The term "Exchange Act" means the Securities Exchange Act of 1934 as the same shall be in effect at the time. The term "Holder" includes the Holder and any corporation which shall succeed to or assume the obligations of the Holder hereunder. The term "Nasdaq" shall mean the OTC Bulletin Board, the Nasdaq SmallCap Market or other principal market on which the Common Stock is traded. The "Original Issue Date" is August 17, 2001. The term "Other Securities" refers to any stock (other than Common Stock) and other securities of the Company or any other person (corporate or otherwise) which the Holder at any time shall be entitled to receive, or shall have received, upon the exercise of the Warrant, in lieu of or in addition to Common Stock, or which at any time shall be issuable or shall have been issued in exchange for or in replacement of Common Stock or Other Securities pursuant to Section 6 or otherwise. The term "Purchase Price per share" shall be the then applicable exercise price hereunder for one share of Common Stock. The terms "registered" and "registration" refer to a registration effected by filing a registration statement in compliance with the Securities Act, to permit the disposition of Common Stock (or Other Securities) issued or issuable upon the exercise of the Warrant, and any post-effective amendments and supplements filed or required to be filed to permit any such disposition. The term "Securities Act" means the Securities Act of 1933 as the same shall be in effect at the time. The term "Series B Preferred Stock" shall mean the shares of Series B Convertible Preferred Stock of the Company, par value $.01 per share. The term "Underlying Securities" shall mean any Common Stock or Other Securities issued or issuable upon exercise of the Warrant. -2- 3 The term "Warrant" shall mean, as applicable, this Warrant or each right as set forth in this Warrant to purchase one share of Common Stock, as adjusted. 1. Registration, etc. The Holder shall have the rights to registration of Underlying Securities issuable upon exercise of the Warrant that are set forth in the Registration Rights Agreement, dated December 3, 1999, as amended, between the Company and the Holder (the "Amended Registration Rights Agreement"). 2. Sale or Exercise Without Registration. If, at the time of any exercise, transfer or surrender for exchange of a Warrant or of Underlying Securities previously issued upon the exercise of a Warrant, such Warrant or Underlying Securities shall not be registered under the Securities Act, the Company may require, as a condition of allowing such exercise, transfer or exchange, that the Holder or transferee of such Warrant or Underlying Securities, as the case may be, furnish to the Company a satisfactory opinion of counsel to the effect that such exercise, transfer or exchange may be made without registration under the Securities Act, provided that the disposition thereof shall at all times be within the control of such Holder or transferee, as the case may be, and provided further that nothing contained in this Section 2 shall relieve the Company from complying with any request for registration pursuant to the Amended Registration Rights Agreement. The Holder of this Warrant, by acceptance hereof, represents to the Company that it is acquiring the Warrant for investment and not with a view to the distribution thereof. 3. Exercise of Warrant. 3.1 Exercise in Full. Subject to the provisions hereof, this Warrant may be exercised in full by the Holder hereof by surrender of this Warrant, with the form of subscription at the end hereof duly executed by such Holder, to the Company at its principal office accompanied by payment, in cash or by certified or official bank check payable to the order of the Company, in the amount obtained by multiplying the number of shares of Common Stock called for on the face of this Warrant (without giving effect to any adjustment therein) by the Purchase Price per share. 3.2 Partial Exercise. Subject to the provisions hereof, this Warrant may be exercised in part by surrender of this Warrant in the manner and at the place provided in Section 3.1 except that the amount payable by the Holder upon any partial exercise shall be the amount obtained by multiplying (a) the number of shares of Common Stock (without giving effect to any adjustment therein) designated by the Holder in the subscription at the end hereof by (b) the Purchase Price per share. Upon any such partial exercise, the Company at its expense will forthwith issue and deliver to or upon the order of the Holder hereof a new Warrant or Warrants of like tenor, in the name of the Holder hereof or as such Holder (upon payment by such Holder of any applicable transfer taxes) may request, calling in the aggregate on the face or faces thereof for the number of shares of Common Stock equal (without giving effect to any adjustment therein) to the number of such shares called for on the face of this Warrant minus the number of such shares designated by the Holder in the subscription at the end hereof. 3.3 Exercise by Surrender of Warrant or Shares of Common Stock. In addition to the method of payment set forth in Sections 3.1 and 3.2 and in lieu of any cash -3- 4 payment required thereunder, the Holder shall have the right at any time and from time to time to exercise the Warrant in full or in part by surrendering shares of Common Stock, Series B Preferred Stock, the Warrant Certificate or other securities issued by the Company in the manner and at the place specified in Section 3.1 as payment of the aggregate Purchase Price per share for the Warrant to be exercised. The number of Warrants or shares of Common Stock to be surrendered in payment of the aggregate Purchase Price for the Warrant to be exercised shall be determined by multiplying the number of Warrants to be exercised by the Purchase Price per share, and then dividing the product thereof by an amount equal to the Market Price (as defined below) . The number of shares of Series B Preferred Stock or such other securities to be surrendered in payment of the aggregate Purchase Price for the Warrant to be exercised shall be determined in accordance with the preceding sentence as if the Series B Preferred Stock or other securities had been converted into Common Stock immediately prior to exercise or, in the case the Company has issued other securities which are not convertible into Common Stock, at the Market Price thereof. 3.4 Definition of Market Price. As used herein, the phrase "Market Price" at any date shall be deemed to be (i) if the principal trading market for such securities is an exchange, the average of the last reported sale prices for the last five previous trading days in which a sale was reported, as officially reported on any consolidated tape, (ii) if the principal market for such securities is the over-the-counter market, the average of the high bid prices on such trading days as set forth by Nasdaq or, (iii) if the security is not quoted on Nasdaq, the average of the high bid prices on such trading days as set forth in the National Quotation Bureau sheet listing such securities for such day. Notwithstanding the foregoing, if there is no reported closing price or high bid price, as the case may be, on any of the ten trading days preceding the event requiring a determination of Market Price hereunder, then the Market Price shall be determined in good faith by resolution of the Board of Directors of the Company, based on the best information available to it. 3.5 Company to Reaffirm Obligations. The Company will, at the time of any exercise of this Warrant, upon the request of the Holder hereof, acknowledge in writing its continuing obligation to afford to such Holder any rights (including, without limitation, any right to registration of the Underlying Securities) to which such Holder shall continue to be entitled after such exercise in accordance with the provisions of this Warrant, provided that if the Holder of this Warrant shall fail to make any such request, such failure shall not affect the continuing obligation of the Company to afford such Holder any such rights. 4. Delivery of Stock Certificates, etc., on Exercise. As soon as practicable after the exercise of this Warrant in full or in part, and in any event within three business days thereafter, the Company at its own expense (including the payment by it of any applicable issue taxes) will cause to be issued in the name of and delivered to the Holder hereof, or as such Holder (upon payment by such Holder of any applicable transfer taxes) may direct, a certificate or certificates for the number of fully paid and non-assessable shares of Common Stock or Other Securities to which such Holder shall be entitled upon such exercise, plus, in lieu of any fractional share to which such Holder would otherwise be entitled (after aggregation of all shares issuable upon such exercise), cash equal to such fraction multiplied by the then current Market Price of one full share, together with any other stock or other securities and property (including -4- 5 cash, where applicable) to which such Holder is entitled upon such exercise pursuant to Section 5 or otherwise. 5. Adjustment for Dividends in Other Stock, Property, etc. Reclassification, etc. In case at any time or from time to time after the Original Issue Date the holders of Common Stock (or Other Securities) shall have received, or (on or after the record date fixed for the determination of stockholders eligible to receive) shall have become entitled to receive, without payment therefor: (a) other or additional stock or other securities or property (other than cash) by way of dividend, or (b) any cash paid or payable (including, without limitation, by way of dividend), or (c) other or additional (or less) stock or other securities or property (including cash) by way of spin-off, split-up, reclassification, recapitalization, combination of shares or similar corporate rearrangement, then, and in each such case the Holder of this Warrant, upon the exercise hereof as provided in Section 3, shall be entitled to receive the amount of stock and other securities and property (including cash in the cases referred to in subdivisions (b) and (c) of this Section 5) which such Holder would hold on the date of such exercise if on the Original Issue Date such Holder had been the Holder of record of the number of shares of Common Stock called for on the face of this Warrant and had thereafter, during the period from the Original Issue Date to and including the date of such exercise, retained such shares and all such other or additional (or less) stock and other securities and property (including cash in the cases referred to in subdivisions (b) and (c) of this Section 5) receivable by such Holder as aforesaid during such period, giving effect to all adjustments called for during such period by Sections 6 and 7 hereof. 6. Reorganization, Consolidation, Merger, etc. In case the Company after the Original Issue Date shall (a) effect a reorganization, (b) consolidate with or merge into any other person, or (c) transfer all or substantially all of its properties or assets to any other person under any plan or arrangement contemplating the dissolution of the Company, then, in each such case, the Holder of this Warrant, upon the exercise hereof as provided in Section 3 at any time after the consummation of such reorganization, consolidation or merger or the effective date of such dissolution, as the case may be, shall be entitled to receive (and the Company shall be entitled to deliver), in lieu of the Underlying Securities issuable upon such exercise prior to such consummation or such effective date, the stock and other securities and property (including cash) to which such Holder would have been entitled upon such consummation or in connection with such dissolution, as the case may be, if such Holder had so exercised this Warrant immediately prior thereto, all subject to further adjustment thereafter as provided in Sections 5 and 7 hereof. The Company shall not effect any such reorganization, consolidation, merger or sale, unless prior to or simultaneously with the consummation thereof, the successor corporation resulting from such consolidation or merger or the corporation purchasing such assets or the appropriate corporation or entity shall assume, by written instrument, the obligation to deliver to the Holder the shares of stock, cash, other securities or assets to which, in accordance with the foregoing -5- 6 provisions, the Holder may be entitled to and all other obligations of the Company under this Warrant. This Section 6 shall not apply to any reorganization, consolidation, merger or sale, which is consummated between the Company and the Holder (or any of the Holder's affiliates). 7. Other Adjustments. 7.1 General. In any case to which Sections 5 and 6 hereof are not applicable, where the Company shall issue or sell shares of its Common Stock after the Original Issue Date for a consideration per share less than the Purchase Price per share in effect pursuant to the terms of this Warrant at the time of issuance or sale of such additional shares (the "Lower Price"), then the Purchase Price in effect hereunder shall simultaneously with such issuance or sale be reduced to an amount equal to the Lower Price. In the event of an adjustment to the Purchase Price under this Section 7, the number of shares of Underlying Securities issuable upon exercise hereof shall be increased so that the aggregate exercise price of this Warrant is not reduced as a result of such reduction of Purchase Price. 7.2 Convertible Securities. (a) In case the Company shall issue or sell any securities convertible into Common Stock of the Company ("Convertible Securities") after the date hereof, there shall be determined the price per share for which Common Stock is issuable upon the conversion or exchange thereof, such determination to be made by dividing (i) the total amount received or receivable by the Company as consideration for the issue or sale of such Convertible Securities, plus the minimum aggregate amount of additional consideration, if any, payable to the Company upon the conversion or exchange thereof, by (ii) the maximum number of shares of Common Stock of the Company issuable upon the conversion or exchange of all of such Convertible Securities. (b) If the price per share so determined shall be less than the applicable Purchase Price per share, then such issue or sale shall be deemed to be an issue or sale for cash (as of the date of issue or sale of such Convertible Securities) of such maximum number of shares of Common Stock at the price per share so determined, provided that, if such Convertible Securities shall by their terms provide for an increase or increases or decrease or decreases, with the passage of time, in the amount of additional consideration, if any, to the Company, or in the rate of exchange, upon the conversion or exchange thereof, the adjusted Purchase Price per share shall, forthwith upon any such increase or decrease becoming effective, be readjusted to reflect the same, and provided further, that upon the expiration of such rights of conversion or exchange of such Convertible Securities, if any thereof shall not have been exercised, the adjusted Purchase Price per share shall forthwith be readjusted and thereafter be the price which it would have been had an adjustment been made on the basis that the only shares of Common Stock so issued or sold were issued or sold upon the conversion or exchange of such Convertible Securities, and that they were issued or sold for the consideration actually received by the Company upon such conversion or exchange, plus the consideration, if any, actually received by the Company for the issue or sale of all of such Convertible Securities which shall have been converted or exchanged. 7.3 Rights and Options. (a) In case the Company shall grant any rights or options to subscribe for, purchase or otherwise acquire Common Stock, there shall be determined the price per share for which Common Stock is issuable upon the exercise of such -6- 7 rights or options, such determination to be made by dividing (i) the total amount, if any, received or receivable by the Company as consideration for the granting of such rights or options, plus the minimum aggregate amount of additional consideration payable to the Company upon the exercise of such rights or options, by (ii) the maximum number of shares of Common Stock of the Company issuable upon the exercise of such rights or options. (b) If the price per share so determined shall be less than the applicable Purchase Price per share, then the granting of such rights or options shall be deemed to be an issue or sale for cash (as of the date of the granting of such rights or options) of such maximum number of shares of Common Stock at the price per share so determined, provided that, if such rights or options shall by their terms provide for an increase or increases or decrease or decreases, with the passage of time, in the amount of additional consideration payable to the Company upon the exercise thereof, the adjusted Purchase Price per share shall, forthwith upon any such increase or decrease becoming effective, be readjusted to reflect the same, and provided, further, that upon the expiration of such rights or options, if any thereof shall not have been exercised, the adjusted Purchase Price per share shall forthwith be readjusted and thereafter be the price which it would have been had an adjustment been made on the basis that the only shares of Common Stock so issued or sold were those issued or sold upon the exercise of such rights or options and that they were issued or sold for the consideration actually received by the Company upon such exercise, plus the consideration, if any, actually received by the Company for the granting of all such rights or options, whether or not exercised. 7.4 Combination of Shares. If the number of shares of Common Stock outstanding at any time after the date hereof is decreased by a combination or reverse stock split of the outstanding shares of Common Stock of the Company, the Purchase Price shall be increased and the number of shares of Common Stock purchasable under this Warrant shall be decreased in proportion to such decrease in outstanding shares of Common Stock. 7.5 Exceptions. This Section 7 shall not apply to (a) the issuance of the Series B Preferred Stock, (b) the issuance of shares of Common Stock upon conversion of the Series B Preferred Stock, (c) upon the exercise of warrants aggregating not in excess of 1,365,000 shares, (d) issuances of Common Stock, Convertible Securities, rights and options that have been approved by the holders of not less than a majority of the outstanding shares of Series B Preferred Stock, (e) issuances of Common Stock pursuant to the exercise of options, warrants and rights outstanding on the date hereof or issued pursuant to the Company's existing stock option plan or a plan which has been approved by the holders of not less than a majority of the outstanding shares of Series B Preferred Stock or (f) the issuance of warrants to a lender pursuant to a loan to the Company with a term of at least four years and in an amount of not less than $10,000,000 (and the issuance of shares of Common Stock on the exercise of such lender warrants). 8. Further Assurances. The Company will take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable shares of stock upon the exercise of the Warrant. 9. Accountants' Certificate as to Adjustments. In each case of any adjustment or readjustment in the shares of Common Stock (or Other Securities) issuable upon -7- 8 the exercise of the Warrant, the Company at its expense will promptly cause the Company's regularly retained auditor to compute such adjustment or readjustment in accordance with the terms of the Warrant and prepare a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based, and the number of shares of Common Stock outstanding or deemed to be outstanding. The Company will forthwith mail a copy of each such certificate to the Holder. 10. Notices of Record Date, etc. In the event of (a) any taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution, or any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any other securities or property, or to receive any other right, or (b) any capital reorganization of the Company, any reclassification or recapitalization of the capital stock of the Company or any transfer of all or substantially all the assets of the Company to or consolidation or merger of the Company with or into any other person, or (c) any voluntary or involuntary dissolution, liquidation or winding-up of the Company, or then and in each such event the Company will mail or cause to be mailed to the Holder a notice specifying (i) the date on which any such record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character of such dividend, distribution or right, or (ii) the date on which any such reorganization, reclassification, recapitalization, transfer, consolidation, merger, dissolution, liquidation or winding-up is to take place, and the time, if any, as of which the holders of record of Underlying Securities shall be entitled to exchange their shares of Underlying Securities for securities or other property deliverable upon such reorganization, reclassification, recapitalization, transfer, consolidation, merger, dissolution, liquidation or winding-up. Such notice shall be mailed at least twenty (20) days prior to the date therein specified. 11. Reservation of Stock, etc., Issuable on Exercise of Warrant. The Company will at all times reserve and keep available, solely for issuance and delivery upon the exercise of the Warrant, all shares of Common Stock (or Other Securities) from time to time issuable upon the exercise of the Warrants. 12. Listing on Securities Exchanges; Registration. In furtherance and not in limitation of any other provision of this Warrant, if the Company at any time shall list any Common Stock on any national securities exchange and shall register such Common Stock under the Exchange Act, the Company will, at its expense, simultaneously list on such exchange or Nasdaq, upon official notice of issuance upon the exercise of the Warrant, and maintain such listing of all shares of Common Stock from time to time issuable upon the exercise of the Warrants; and the Company will so list on any national securities exchange or Nasdaq, will so register and will maintain such listing of, any Other Securities if and at the time that any -8- 9 securities of like class or similar type shall be listed on such national securities exchange or Nasdaq by the Company. 13. Exchange of Warrants. Subject to the provisions of Section 2 hereof, upon surrender for exchange of any Warrant, properly endorsed, to the Company, as soon as practicable (and in any event within three business days) the Company at its own expense will issue and deliver to or upon the order of the Holder a new Warrant or Warrants of like tenor, in the name of the Holder or as such Holder (upon payment by such Holder of any applicable transfer taxes) may direct, calling in the aggregate on the face or faces thereof for the number of shares of Common Stock called for on the face or faces of the Warrant or Warrants so surrendered. 14. Replacement of Warrant. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of any Warrant and, in the case of any such loss, theft or destruction, upon delivery of an indemnity agreement reasonably satisfactory in form and amount to the Company or, in the case of any such mutilation, upon surrender and cancellation of such Warrant, the Company at its expense will execute and deliver, in lieu thereof, a new Warrant of like tenor. 15. Warrant Agent. The Company may, by written notice to the Holder, appoint an agent having an office in New York, New York, for the purpose of issuing Common Stock (or Other Securities) upon the exercise of the Warrant pursuant to Section 3, exchanging the Warrant pursuant to Section 13, and replacing the Warrant pursuant to Section 14, or any of the foregoing, and thereafter any such issuance, exchange or replacement, as the case may be, shall be made at such office by such agent. 16. Remedies. The Company stipulates that the remedies at law of the Holder of this Warrant in the event of any default or threatened default by the Company in the performance of or compliance with any of the terms of this Warrant are not and will not be adequate, and that such terms may be specifically enforced by a decree for the specific performance of any agreement contained herein or by an injunction against a violation of any of the terms hereof or otherwise. 17. Negotiability, etc. Subject to Section 2 above, this Warrant is issued upon the following terms, to all of which the Holder or owner hereof by the taking hereof consents and agrees: (a) subject to the provisions hereof, title to this Warrant may be transferred by endorsement (by the Holder hereof executing the form of assignment at the end hereof) and delivery in the same manner as in the case of a negotiable instrument transferable by endorsement and delivery; (b) subject to the foregoing, any person in possession of this Warrant properly endorsed is authorized to represent himself as absolute owner hereof and is empowered to transfer absolute title hereto by endorsement and delivery hereof to a bona fide purchaser hereof for value; each prior taker or owner waives and renounces all of his equities or rights in this Warrant in favor of each such bona -9- 10 fide purchaser and each such bona fide purchaser shall acquire absolute title hereto and to all rights represented hereby; and (c) until this Warrant is transferred on the books of the Company, the Company may treat the registered Holder hereof as the absolute owner hereof for all purposes, notwithstanding any notice to the contrary. 18. Notices, etc. All notices and other communications from the Company to the Holder of this Warrant shall be mailed by first class registered or certified mail, postage prepaid, at such address as may have been furnished to the Company in writing by such Holder, or, until an address is so furnished, to and at the address of the last Holder of this Warrant who has so furnished an address to the Company. 19. Miscellaneous. This Warrant and any term hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought. This Warrant is being delivered in the State of New York and shall be construed and enforced in accordance with and governed by the laws of such State. The headings in this Warrant are for purposes of reference only, and shall not limit or otherwise affect any of the terms hereof. 20. Assignability. Subject to Section 2 hereof, this Warrant is fully assignable at any time. Dated: August ___, 2001 MEDJET INC. By:________________________________________ Eugene I. Gordon Chairman of the Board and Chief Executive Officer [Corporate Seal] Attest:______________________ Cheryl Blake Secretary -10- 11 FORM OF SUBSCRIPTION (To be signed only upon exercise of Warrant) To: MEDJET INC. The undersigned, the Holder of the within Warrant, hereby irrevocably elects to exercise the purchase right represented by such Warrant for, and to purchase thereunder, shares of Common Stock of Medjet Inc., and herewith makes payment of $ * therefor, and requests that the certificates for such shares be issued in the name of, and delivered to, , whose address is . Dated: (Signature must conform in all respects to name of Holder as specified on the face of the Warrant) (Address) * Insert here the number of shares called for on the face of the Warrant (or, in the case of a partial exercise, the portion thereof as to which the Warrant is being exercised), in either case without making any adjustment for additional Common Stock or any other stock or other securities or property or cash which, pursuant to the adjustment provisions of the Warrant, may be deliverable upon exercise. -11- 12 FORM OF ASSIGNMENT (To be signed only upon transfer of Warrant) For value received, the undersigned hereby sells, assigns and transfers unto _____________________________ the right represented by the within Warrant to purchase ___________ of Common Stock of Medjet Inc. to which the within Warrant relates, and appoints _______________________________________________ Attorney to transfer such right on the books of Medjet Inc. with full power of substitution in the premises. Dated: ----------------------------------------------------------- (Signature must conform in all respects to name of Holder as specified on the face of the Warrant) ---------------------------------------------------------- (Address) - -------------------------------------- Signature guaranteed by a Bank or a Trust Company having its principal office in New York City or by a Member Firm of the New York or American Stock Exchange -12- EX-6 8 f75398ex6.txt EXHIBIT 6 1 EXHIBIT 6 Warrant No. __________ to acquire 325,000 shares THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THIS WARRANT AND SUCH SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT. THIS WARRANT AND SUCH SHARES MAY NOT BE TRANSFERRED EXCEPT UPON THE CONDITIONS SPECIFIED IN THIS WARRANT, AND NO TRANSFER OF THIS WARRANT OR SUCH SHARES SHALL BE VALID OR EFFECTIVE UNLESS AND UNTIL SUCH CONDITIONS SHALL HAVE BEEN COMPLIED WITH. THIS WARRANT IS SUBJECT TO THE TERMS AND CONDITIONS OF THE OMNIBUS WAIVER AND AMENDMENT AGREEMENT, DATED AS OF AUGUST 17, 2001, BY AND BETWEEN MEDJET INC. AND VISX, INCORPORATED. MEDJET INC. COMMON STOCK PURCHASE WARRANT Medjet Inc. (the "Company"), having its principal office at 1090 King Georges Post Road, Edison, New Jersey 08837, hereby certifies that, for value received, VISX, Incorporated (the "Holder"), is entitled, subject to the terms set forth below, to purchase from the Company at any time on or from time to time after August 17, 2001 and before the earlier of (i) the Effective Time (as defined herein) or (ii) 5:00 P.M., New York City time, on December 3, 2004 (the "Expiration Date"), Three Hundred Twenty Five Thousand (325,000) fully paid and non-assessable shares of Common Stock of the Company, at the initial Purchase Price per share (as defined below) of $3.50. The number and character of such shares of Common Stock and the Purchase Price per share are subject to adjustment as provided herein. As used herein the following terms, unless the context otherwise requires, have the following respective meanings: The term "Company" includes the Company and any corporation which shall succeed to or assume the obligations of the Company hereunder. 2 The term "Common Stock" includes all stock of any class or Classes (however designated) of the Company, authorized upon the Original Issue Date or thereafter, the holders of which shall have the right, without limitation as to amount, either to all or to a share of the balance of current dividends and liquidating dividends after the payment of dividends and distributions on any shares entitled to preference, and the holders of which shall ordinarily, in the absence of contingencies, be entitled to vote for the election of a majority of directors of the Company (even though the right so to vote has been suspended by the happening of such a contingency). The term "Effective Time" means the time of filing of a Certificate of Merger with the Secretary of State of the State of Delaware by the Company and the Holder or its affiliates. The term "Exchange Act" means the Securities Exchange Act of 1934 as the same shall be in effect at the time. The term "Holder" includes the Holder and any corporation which shall succeed to or assume the obligations of the Holder hereunder. The term "Nasdaq" shall mean the OTC Bulletin Board, the Nasdaq SmallCap Market or other principal market on which the Common Stock is traded. The "Original Issue Date" is August 17, 2001. The term "Other Securities" refers to any stock (other than Common Stock) and other securities of the Company or any other person (corporate or otherwise) which the Holder at any time shall be entitled to receive, or shall have received, upon the exercise of the Warrant, in lieu of or in addition to Common Stock, or which at any time shall be issuable or shall have been issued in exchange for or in replacement of Common Stock or Other Securities pursuant to Section 6 or otherwise. The term "Purchase Price per share" shall be the then applicable exercise price hereunder for one share of Common Stock. The terms "registered" and "registration" refer to a registration effected by filing a registration statement in compliance with the Securities Act, to permit the disposition of Common Stock (or Other Securities) issued or issuable upon the exercise of the Warrant, and any post-effective amendments and supplements filed or required to be filed to permit any such disposition. The term "Securities Act" means the Securities Act of 1933 as the same shall be in effect at the time. The term "Series B Preferred Stock" shall mean the shares of Series B Convertible Preferred Stock of the Company, par value $.01 per share. The term "Underlying Securities" shall mean any Common Stock or Other Securities issued or issuable upon exercise of the Warrant. -2- 3 The term "Warrant" shall mean, as applicable, this Warrant or each right as set forth in this Warrant to purchase one share of Common Stock, as adjusted. 1. Registration, etc. The Holder shall have the rights to registration of Underlying Securities issuable upon exercise of the Warrant that are set forth in the Registration Rights Agreement, dated December 3, 1999, as amended, between the Company and the Holder (the "Amended Registration Rights Agreement"). 2. Sale or Exercise Without Registration. If, at the time of any exercise, transfer or surrender for exchange of a Warrant or of Underlying Securities previously issued upon the exercise of a Warrant, such Warrant or Underlying Securities shall not be registered under the Securities Act, the Company may require, as a condition of allowing such exercise, transfer or exchange, that the Holder or transferee of such Warrant or Underlying Securities, as the case may be, furnish to the Company a satisfactory opinion of counsel to the effect that such exercise, transfer or exchange may be made without registration under the Securities Act, provided that the disposition thereof shall at all times be within the control of such Holder or transferee, as the case may be, and provided further that nothing contained in this Section 2 shall relieve the Company from complying with any request for registration pursuant to the Amended Registration Rights Agreement. The Holder of this Warrant, by acceptance hereof, represents to the Company that it is acquiring the Warrant for investment and not with a view to the distribution thereof. 3. Exercise of Warrant. 3.1 Exercise in Full. Subject to the provisions hereof, this Warrant may be exercised in full by the Holder hereof by surrender of this Warrant, with the form of subscription at the end hereof duly executed by such Holder, to the Company at its principal office accompanied by payment, in cash or by certified or official bank check payable to the order of the Company, in the amount obtained by multiplying the number of shares of Common Stock called for on the face of this Warrant (without giving effect to any adjustment therein) by the Purchase Price per share. 3.2 Partial Exercise. Subject to the provisions hereof, this Warrant may be exercised in part by surrender of this Warrant in the manner and at the place provided in Section 3.1 except that the amount payable by the Holder upon any partial exercise shall be the amount obtained by multiplying (a) the number of shares of Common Stock (without giving effect to any adjustment therein) designated by the Holder in the subscription at the end hereof by (b) the Purchase Price per share. Upon any such partial exercise, the Company at its expense will forthwith issue and deliver to or upon the order of the Holder hereof a new Warrant or Warrants of like tenor, in the name of the Holder hereof or as such Holder (upon payment by such Holder of any applicable transfer taxes) may request, calling in the aggregate on the face or faces thereof for the number of shares of Common Stock equal (without giving effect to any adjustment therein) to the number of such shares called for on the face of this Warrant minus the number of such shares designated by the Holder in the subscription at the end hereof. 3.3 Exercise by Surrender of Warrant or Shares of Common Stock. In addition to the method of payment set forth in Sections 3.1 and 3.2 and in lieu of any cash -3- 4 payment required thereunder, the Holder shall have the right at any time and from time to time to exercise the Warrant in full or in part by surrendering shares of Common Stock, Series B Preferred Stock, the Warrant Certificate or other securities issued by the Company in the manner and at the place specified in Section 3.1 as payment of the aggregate Purchase Price per share for the Warrant to be exercised. The number of Warrants or shares of Common Stock to be surrendered in payment of the aggregate Purchase Price for the Warrant to be exercised shall be determined by multiplying the number of Warrants to be exercised by the Purchase Price per share, and then dividing the product thereof by an amount equal to the Market Price (as defined below) . The number of shares of Series B Preferred Stock or such other securities to be surrendered in payment of the aggregate Purchase Price for the Warrant to be exercised shall be determined in accordance with the preceding sentence as if the Series B Preferred Stock or other securities had been converted into Common Stock immediately prior to exercise or, in the case the Company has issued other securities which are not convertible into Common Stock, at the Market Price thereof. 3.4 Definition of Market Price. As used herein, the phrase "Market Price" at any date shall be deemed to be (i) if the principal trading market for such securities is an exchange, the average of the last reported sale prices for the last five previous trading days in which a sale was reported, as officially reported on any consolidated tape, (ii) if the principal market for such securities is the over-the-counter market, the average of the high bid prices on such trading days as set forth by Nasdaq or, (iii) if the security is not quoted on Nasdaq, the average of the high bid prices on such trading days as set forth in the National Quotation Bureau sheet listing such securities for such day. Notwithstanding the foregoing, if there is no reported closing price or high bid price, as the case may be, on any of the ten trading days preceding the event requiring a determination of Market Price hereunder, then the Market Price shall be determined in good faith by resolution of the Board of Directors of the Company, based on the best information available to it. 3.5 Company to Reaffirm Obligations. The Company will, at the time of any exercise of this Warrant, upon the request of the Holder hereof, acknowledge in writing its continuing obligation to afford to such Holder any rights (including, without limitation, any right to registration of the Underlying Securities) to which such Holder shall continue to be entitled after such exercise in accordance with the provisions of this Warrant, provided that if the Holder of this Warrant shall fail to make any such request, such failure shall not affect the continuing obligation of the Company to afford such Holder any such rights. 4. Delivery of Stock Certificates, etc., on Exercise. As soon as practicable after the exercise of this Warrant in full or in part, and in any event within three business days thereafter, the Company at its own expense (including the payment by it of any applicable issue taxes) will cause to be issued in the name of and delivered to the Holder hereof, or as such Holder (upon payment by such Holder of any applicable transfer taxes) may direct, a certificate or certificates for the number of fully paid and non-assessable shares of Common Stock or Other Securities to which such Holder shall be entitled upon such exercise, plus, in lieu of any fractional share to which such Holder would otherwise be entitled (after aggregation of all shares issuable upon such exercise), cash equal to such fraction multiplied by the then current Market Price of one full share, together with any other stock or other securities and property (including -4- 5 cash, where applicable) to which such Holder is entitled upon such exercise pursuant to Section 5 or otherwise. 5. Adjustment for Dividends in Other Stock, Property, etc. Reclassification, etc. In case at any time or from time to time after the Original Issue Date the holders of Common Stock (or Other Securities) shall have received, or (on or after the record date fixed for the determination of stockholders eligible to receive) shall have become entitled to receive, without payment therefor: (a) other or additional stock or other securities or property (other than cash) by way of dividend, or (b) any cash paid or payable (including, without limitation, by way of dividend), or (c) other or additional (or less) stock or other securities or property (including cash) by way of spin-off, split-up, reclassification, recapitalization, combination of shares or similar corporate rearrangement, then, and in each such case the Holder of this Warrant, upon the exercise hereof as provided in Section 3, shall be entitled to receive the amount of stock and other securities and property (including cash in the cases referred to in subdivisions (b) and (c) of this Section 5) which such Holder would hold on the date of such exercise if on the Original Issue Date such Holder had been the Holder of record of the number of shares of Common Stock called for on the face of this Warrant and had thereafter, during the period from the Original Issue Date to and including the date of such exercise, retained such shares and all such other or additional (or less) stock and other securities and property (including cash in the cases referred to in subdivisions (b) and (c) of this Section 5) receivable by such Holder as aforesaid during such period, giving effect to all adjustments called for during such period by Sections 6 and 7 hereof. 6. Reorganization, Consolidation, Merger, etc. In case the Company after the Original Issue Date shall (a) effect a reorganization, (b) consolidate with or merge into any other person, or (c) transfer all or substantially all of its properties or assets to any other person under any plan or arrangement contemplating the dissolution of the Company, then, in each such case, the Holder of this Warrant, upon the exercise hereof as provided in Section 3 at any time after the consummation of such reorganization, consolidation or merger or the effective date of such dissolution, as the case may be, shall be entitled to receive (and the Company shall be entitled to deliver), in lieu of the Underlying Securities issuable upon such exercise prior to such consummation or such effective date, the stock and other securities and property (including cash) to which such Holder would have been entitled upon such consummation or in connection with such dissolution, as the case may be, if such Holder had so exercised this Warrant immediately prior thereto, all subject to further adjustment thereafter as provided in Sections 5 and 7 hereof. The Company shall not effect any such reorganization, consolidation, merger or sale, unless prior to or simultaneously with the consummation thereof, the successor corporation resulting from such consolidation or merger or the corporation purchasing such assets or the appropriate corporation or entity shall assume, by written instrument, the obligation to deliver to the Holder the shares of stock, cash, other securities or assets to which, in accordance with the foregoing -5- 6 provisions, the Holder may be entitled to and all other obligations of the Company under this Warrant. This Section 6 shall not apply to any reorganization, consolidation, merger or sale, which is consummated between the Company and the Holder (or any of the Holder's affiliates). 7. Other Adjustments. 7.1 General. In any case to which Sections 5 and 6 hereof are not applicable, where the Company shall issue or sell shares of its Common Stock after the Original Issue Date for a consideration per share less than the Purchase Price per share in effect pursuant to the terms of this Warrant at the time of issuance or sale of such additional shares (the "Lower Price"), then the Purchase Price in effect hereunder shall simultaneously with such issuance or sale be reduced to an amount equal to the Lower Price. In the event of an adjustment to the Purchase Price under this Section 7, the number of shares of Underlying Securities issuable upon exercise hereof shall be increased so that the aggregate exercise price of this Warrant is not reduced as a result of such reduction of Purchase Price. 7.2 Convertible Securities. (a) In case the Company shall issue or sell any securities convertible into Common Stock of the Company ("Convertible Securities") after the date hereof, there shall be determined the price per share for which Common Stock is issuable upon the conversion or exchange thereof, such determination to be made by dividing (i) the total amount received or receivable by the Company as consideration for the issue or sale of such Convertible Securities, plus the minimum aggregate amount of additional consideration, if any, payable to the Company upon the conversion or exchange thereof, by (ii) the maximum number of shares of Common Stock of the Company issuable upon the conversion or exchange of all of such Convertible Securities. (b) If the price per share so determined shall be less than the applicable Purchase Price per share, then such issue or sale shall be deemed to be an issue or sale for cash (as of the date of issue or sale of such Convertible Securities) of such maximum number of shares of Common Stock at the price per share so determined, provided that, if such Convertible Securities shall by their terms provide for an increase or increases or decrease or decreases, with the passage of time, in the amount of additional consideration, if any, to the Company, or in the rate of exchange, upon the conversion or exchange thereof, the adjusted Purchase Price per share shall, forthwith upon any such increase or decrease becoming effective, be readjusted to reflect the same, and provided further, that upon the expiration of such rights of conversion or exchange of such Convertible Securities, if any thereof shall not have been exercised, the adjusted Purchase Price per share shall forthwith be readjusted and thereafter be the price which it would have been had an adjustment been made on the basis that the only shares of Common Stock so issued or sold were issued or sold upon the conversion or exchange of such Convertible Securities, and that they were issued or sold for the consideration actually received by the Company upon such conversion or exchange, plus the consideration, if any, actually received by the Company for the issue or sale of all of such Convertible Securities which shall have been converted or exchanged. 7.3 Rights and Options. (a) In case the Company shall grant any rights or options to subscribe for, purchase or otherwise acquire Common Stock, there shall be determined the price per share for which Common Stock is issuable upon the exercise of such -6- 7 rights or options, such determination to be made by dividing (i) the total amount, if any, received or receivable by the Company as consideration for the granting of such rights or options, plus the minimum aggregate amount of additional consideration payable to the Company upon the exercise of such rights or options, by (ii) the maximum number of shares of Common Stock of the Company issuable upon the exercise of such rights or options. (b) If the price per share so determined shall be less than the applicable Purchase Price per share, then the granting of such rights or options shall be deemed to be an issue or sale for cash (as of the date of the granting of such rights or options) of such maximum number of shares of Common Stock at the price per share so determined, provided that, if such rights or options shall by their terms provide for an increase or increases or decrease or decreases, with the passage of time, in the amount of additional consideration payable to the Company upon the exercise thereof, the adjusted Purchase Price per share shall, forthwith upon any such increase or decrease becoming effective, be readjusted to reflect the same, and provided, further, that upon the expiration of such rights or options, if any thereof shall not have been exercised, the adjusted Purchase Price per share shall forthwith be readjusted and thereafter be the price which it would have been had an adjustment been made on the basis that the only shares of Common Stock so issued or sold were those issued or sold upon the exercise of such rights or options and that they were issued or sold for the consideration actually received by the Company upon such exercise, plus the consideration, if any, actually received by the Company for the granting of all such rights or options, whether or not exercised. 7.4 Combination of Shares. If the number of shares of Common Stock outstanding at any time after the date hereof is decreased by a combination or reverse stock split of the outstanding shares of Common Stock of the Company, the Purchase Price shall be increased and the number of shares of Common Stock purchasable under this Warrant shall be decreased in proportion to such decrease in outstanding shares of Common Stock. 7.5 Exceptions. This Section 7 shall not apply to (a) the issuance of the Series B Preferred Stock, (b) the issuance of shares of Common Stock upon conversion of the Series B Preferred Stock, (c) upon the exercise of warrants aggregating not in excess of 1,365,000 shares, (d) issuances of Common Stock, Convertible Securities, rights and options that have been approved by the holders of not less than a majority of the outstanding shares of Series B Preferred Stock, (e) issuances of Common Stock pursuant to the exercise of options, warrants and rights outstanding on the date hereof or issued pursuant to the Company's existing stock option plan or a plan which has been approved by the holders of not less than a majority of the outstanding shares of Series B Preferred Stock or (f) the issuance of warrants to a lender pursuant to a loan to the Company with a term of at least four years and in an amount of not less than $10,000,000 (and the issuance of shares of Common Stock on the exercise of such lender warrants). 8. Further Assurances. The Company will take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable shares of stock upon the exercise of the Warrant. 9. Accountants' Certificate as to Adjustments. In each case of any adjustment or readjustment in the shares of Common Stock (or Other Securities) issuable upon -7- 8 the exercise of the Warrant, the Company at its expense will promptly cause the Company's regularly retained auditor to compute such adjustment or readjustment in accordance with the terms of the Warrant and prepare a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based, and the number of shares of Common Stock outstanding or deemed to be outstanding. The Company will forthwith mail a copy of each such certificate to the Holder. 10. Notices of Record Date, etc. In the event of (a) any taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution, or any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any other securities or property, or to receive any other right, or (b) any capital reorganization of the Company, any reclassification or recapitalization of the capital stock of the Company or any transfer of all or substantially all the assets of the Company to or consolidation or merger of the Company with or into any other person, or (c) any voluntary or involuntary dissolution, liquidation or winding-up of the Company, or then and in each such event the Company will mail or cause to be mailed to the Holder a notice specifying (i) the date on which any such record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character of such dividend, distribution or right, or (ii) the date on which any such reorganization, reclassification, recapitalization, transfer, consolidation, merger, dissolution, liquidation or winding-up is to take place, and the time, if any, as of which the holders of record of Underlying Securities shall be entitled to exchange their shares of Underlying Securities for securities or other property deliverable upon such reorganization, reclassification, recapitalization, transfer, consolidation, merger, dissolution, liquidation or winding-up. Such notice shall be mailed at least twenty (20) days prior to the date therein specified. 11. Reservation of Stock, etc., Issuable on Exercise of Warrant. The Company will at all times reserve and keep available, solely for issuance and delivery upon the exercise of the Warrant, all shares of Common Stock (or Other Securities) from time to time issuable upon the exercise of the Warrants. 12. Listing on Securities Exchanges; Registration. In furtherance and not in limitation of any other provision of this Warrant, if the Company at any time shall list any Common Stock on any national securities exchange and shall register such Common Stock under the Exchange Act, the Company will, at its expense, simultaneously list on such exchange or Nasdaq, upon official notice of issuance upon the exercise of the Warrant, and maintain such listing of all shares of Common Stock from time to time issuable upon the exercise of the Warrants; and the Company will so list on any national securities exchange or Nasdaq, will so register and will maintain such listing of, any Other Securities if and at the time that any -8- 9 securities of like class or similar type shall be listed on such national securities exchange or Nasdaq by the Company. 13. Exchange of Warrants. Subject to the provisions of Section 2 hereof, upon surrender for exchange of any Warrant, properly endorsed, to the Company, as soon as practicable (and in any event within three business days) the Company at its own expense will issue and deliver to or upon the order of the Holder a new Warrant or Warrants of like tenor, in the name of the Holder or as such Holder (upon payment by such Holder of any applicable transfer taxes) may direct, calling in the aggregate on the face or faces thereof for the number of shares of Common Stock called for on the face or faces of the Warrant or Warrants so surrendered. 14. Replacement of Warrant. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of any Warrant and, in the case of any such loss, theft or destruction, upon delivery of an indemnity agreement reasonably satisfactory in form and amount to the Company or, in the case of any such mutilation, upon surrender and cancellation of such Warrant, the Company at its expense will execute and deliver, in lieu thereof, a new Warrant of like tenor. 15. Warrant Agent. The Company may, by written notice to the Holder, appoint an agent having an office in New York, New York, for the purpose of issuing Common Stock (or Other Securities) upon the exercise of the Warrant pursuant to Section 3, exchanging the Warrant pursuant to Section 13, and replacing the Warrant pursuant to Section 14, or any of the foregoing, and thereafter any such issuance, exchange or replacement, as the case may be, shall be made at such office by such agent. 16. Remedies. The Company stipulates that the remedies at law of the Holder of this Warrant in the event of any default or threatened default by the Company in the performance of or compliance with any of the terms of this Warrant are not and will not be adequate, and that such terms may be specifically enforced by a decree for the specific performance of any agreement contained herein or by an injunction against a violation of any of the terms hereof or otherwise. 17. Negotiability, etc. Subject to Section 2 above, this Warrant is issued upon the following terms, to all of which the Holder or owner hereof by the taking hereof consents and agrees: (a) subject to the provisions hereof, title to this Warrant may be transferred by endorsement (by the Holder hereof executing the form of assignment at the end hereof) and delivery in the same manner as in the case of a negotiable instrument transferable by endorsement and delivery; (b) subject to the foregoing, any person in possession of this Warrant properly endorsed is authorized to represent himself as absolute owner hereof and is empowered to transfer absolute title hereto by endorsement and delivery hereof to a bona fide purchaser hereof for value; each prior taker or owner waives and renounces all of his equities or rights in this Warrant in favor of each such bona fide purchaser and each such bona -9- 10 fide purchaser shall acquire absolute title hereto and to all rights represented hereby; and (c) until this Warrant is transferred on the books of the Company, the Company may treat the registered Holder hereof as the absolute owner hereof for all purposes, notwithstanding any notice to the contrary. 18. Notices, etc. All notices and other communications from the Company to the Holder of this Warrant shall be mailed by first class registered or certified mail, postage prepaid, at such address as may have been furnished to the Company in writing by such Holder, or, until an address is so furnished, to and at the address of the last Holder of this Warrant who has so furnished an address to the Company. 19. Miscellaneous. This Warrant and any term hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought. This Warrant is being delivered in the State of New York and shall be construed and enforced in accordance with and governed by the laws of such State. The headings in this Warrant are for purposes of reference only, and shall not limit or otherwise affect any of the terms hereof. 20. Assignability. Subject to Section 2 hereof, this Warrant is fully assignable at any time. Dated: August ___, 2001 MEDJET INC. By:________________________________________ Eugene I. Gordon Chairman of the Board and Chief Executive Officer [Corporate Seal] Attest:______________________ Cheryl Blake Secretary -10- 11 FORM OF SUBSCRIPTION (To be signed only upon exercise of Warrant) To: MEDJET INC. The undersigned, the Holder of the within Warrant, hereby irrevocably elects to exercise the purchase right represented by such Warrant for, and to purchase thereunder, shares of Common Stock of Medjet Inc., and herewith makes payment of $ * therefor, and requests that the certificates for such shares be issued in the name of, and delivered to, , whose address is . Dated: (Signature must conform in all respects to name of Holder as specified on the face of the Warrant) (Address) * Insert here the number of shares called for on the face of the Warrant (or, in the case of a partial exercise, the portion thereof as to which the Warrant is being exercised), in either case without making any adjustment for additional Common Stock or any other stock or other securities or property or cash which, pursuant to the adjustment provisions of the Warrant, may be deliverable upon exercise. -11- 12 FORM OF ASSIGNMENT (To be signed only upon transfer of Warrant) For value received, the undersigned hereby sells, assigns and transfers unto _____________________________ the right represented by the within Warrant to purchase ___________ of Common Stock of Medjet Inc. to which the within Warrant relates, and appoints _______________________________________________ Attorney to transfer such right on the books of Medjet Inc. with full power of substitution in the premises. Dated: -------------------------------------------------- (Signature must conform in all respects to name of Holder as specified on the face of the Warrant) -------------------------------------------------- (Address) - ------------------------------- Signature guaranteed by a Bank or a Trust Company having its principal office in New York City or by a Member Firm of the New York or American Stock Exchange -12- EX-7 9 f75398ex7.txt EXHIBIT 7 1 EXHIBIT 7 THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE PURSUANT TO IT HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH SECURITIES MAY NOT BE SOLD, TRANSFERRED OR PLEDGED IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL (WHICH MAY BE COUNSEL FOR THE COMPANY) REASONABLY ACCEPTABLE TO IT STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT. MEDJET INC. COMMON STOCK PURCHASE WARRANT August 17, 2001 1. Number and Price of Shares Subject to Warrant. Subject to the terms and conditions set forth herein, VISX, Incorporated (the "Holder"), is entitled to purchase from Medjet Inc., a Delaware corporation (the "Company"), at any time after the date hereof and on or before the date of termination of this Warrant provided for in Section 13 hereof, up to One Million Three Hundred Twenty Thousand (1,320,000) shares (which number of shares is subject to adjustment and certain conditions as described below) of fully paid and nonassessable Common Stock of the Company (the "Shares") upon surrender hereof at the principal office of the Company, and upon payment of the purchase price at said office in cash or by check. Subject to adjustment as provided below, the purchase price of one share of Common Stock (or such securities as may be substituted for one share of Common Stock pursuant to the provisions set forth below) shall be Seventy-Five Cents ($0.75). The purchase price of one share of Common Stock (or such securities as may be substituted for one share of Common Stock pursuant to the provisions set forth below) payable from time to time upon the exercise of this Warrant (whether such price be the price specified above or an adjusted price determined as provided below) is referred to herein as the "Warrant Price." 2. Merger Agreement. This Warrant is issued in connection with the execution and delivery of that certain Agreement and Plan of Merger and Reorganization, by and among the Holder, the Company, and a wholly-owned subsidiary of the Holder (the "Merger Sub"), dated as of August 17, 2001, (as the same may be amended from time to time, the "Merger Agreement"), which provides, subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, for the merger (the "Merger") of Merger Sub with and into the Company. 3. Adjustment of Warrant Price and Number of Shares. The number and kind of securities issuable upon the exercise of this Warrant shall be subject to adjustment from time to time, and the Company agrees to provide notice upon the happening of certain events as follows: (a) Adjustment for Dividends in Stock. In case at any time or from time to time on or after the date hereof, the holders of the Common Stock of the Company (or any shares of stock or other securities at the time receivable upon the exercise of this Warrant) shall have received, or, 2 on or after the record date fixed for the determination of eligible stockholders, shall have become entitled to receive, without payment therefor, other or additional securities or other property of the Company (except for cash from the proceeds of the Merger) by way of dividend or distribution, then and in each case, Holder shall, upon the exercise hereof, be entitled to receive, in addition to the number of shares of Common Stock receivable thereupon, and without payment of any additional consideration therefor, the amount of such other or additional securities or other property of the Company which Holder would hold on the date of such exercise had it been the holder of record of such Common Stock on the date hereof and had thereafter, during the period from the date hereof to and including the date of such exercise, retained such shares and/or all other additional securities or other property receivable by it as described above during such period, giving effect to all adjustments called for during such period by this Section 3(a) and Section 3(b) and Section 3(c). (b) Adjustment for Reclassification or Reorganization. In case of any reclassification or change of the outstanding Common Stock of the Company or of any reorganization of the Company on or after the date hereof (other than the Merger contemplated by the Merger Agreement), then and in each such case the Company shall give Holder at least ten (10) days notice of the proposed effective date of such transaction, and Holder, upon the exercise hereof at any time after the consummation of such reclassification, change or reorganization, shall be entitled to receive, in lieu of the stock or other securities and property receivable upon the exercise hereof prior to such consummation, the stock or other securities or property to which Holder would have been entitled upon such consummation if Holder had exercised this Warrant immediately prior thereto, all subject to further adjustment as provided in Section 3(a), Section 3(b) and Section 3(c); in each such case, the terms of this Section 3 shall be applicable to the shares of stock or other securities properly receivable upon the exercise of this Warrant after such consummation. (c) Stock Splits and Reverse Stock Splits. If at any time on or after the date hereof, the Company shall subdivide its outstanding shares of Common Stock into a greater number of shares, the Warrant Price in effect immediately prior to such subdivision shall thereby be proportionately reduced and the number of shares receivable upon exercise of the Warrant shall thereby be proportionately increased; and, conversely, if at any time on or after the date hereof the outstanding number of shares of Common Stock shall be combined into a smaller number of shares, the Warrant Price in effect immediately prior to such combination shall thereby be proportionately increased and the number of shares receivable upon exercise of this Warrant shall thereby be proportionately decreased. 4. No Fractional Shares. No fractional shares of Common Stock or any other security will be issued in connection with any exercise or conversion hereunder. In lieu of any fractional shares that would otherwise be issuable (after aggregation of all shares being issued upon such exercise or conversion), the Company shall pay cash equal to the product of such fraction multiplied by the fair market value of one share of such security on the date of exercise, as determined in good faith by the Company's Board of Directors. 5. No Shareholder Rights. This Warrant as such shall not entitle Holder to any of the rights of a stockholder of the Company. -2- 3 6. Reservation of Stock. The Company covenants that during the period this Warrant is exercisable, the Company will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of Common Stock upon the exercise of this Warrant. The Company agrees that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for shares of Common Stock upon the exercise of this Warrant. 7. Exercise of Warrant. (a) Manner of Exercise. This Warrant may be exercised, in whole or in part, by Holder by the surrender of this Warrant (with the notice of exercise form attached as Attachment A and the Investment Representation Statement attached as Attachment C duly executed) at the principal office of the Company, accompanied by payment in full of the purchase price of the Shares purchased thereby, as described above. (b) Right to Convert Warrant. This Warrant may be converted into Shares in whole or in part, by Holder by the surrender of this Warrant (with the notice of conversion form attached as Attachment B and the Investment Representation Statement attached as Attachment C duly executed) at the principal office of the Company. Upon conversion of this Warrant, Holder shall be entitled to receive that number of Shares of the Company equal to (x) the number of shares of Common Stock specified by Holder in its Notice of Conversion up to the maximum number of shares of Common Stock subject to this Warrant (less any shares previously issued upon exercise or conversion hereof) (the "Specified Number") less (y) the number of shares of Common Stock equal to the quotient obtained by dividing (A) the product of the Specified Number and the then existing Warrant Price by (B) the Fair Market Value, as defined below. "Fair Market Value" of a Share shall mean the fair value as determined in good faith, subject to the reasonable agreement of the Holder, by the Company's Board of Directors; provided, however, that where there exists a public market for the Company's Shares at the time of Holder's exercise of this conversion right, the Fair Market Value per Share shall be the average of the closing bid and asked prices of the Shares quoted in the Over-The-Counter Market Summary or the last reported sale price of the Common Stock or the closing price quoted on the Nasdaq National Market, Nasdaq SmallCap Market or on any exchange on which the Shares are listed, whichever is applicable, as published in The Wall Street Journal for the five (5) trading days prior to the date of conversion. (c) Issuance of Shares. This Warrant shall be deemed to have been exercised or converted immediately prior to the close of business on the date of its surrender for exercise or conversion in accordance with Section 7(a) or Section 7(b), and the person entitled to receive the Shares or other securities issuable upon such exercise shall be treated for all purposes as the holder of record of such securities as of the close of business on such date. As promptly as practicable and in any event within fifteen (15) days after such date, the Company shall issue and deliver to the person or persons entitled to receive the same a certificate or certificates for the number of full shares of Common Stock or other security issuable upon such exercise, together with cash in lieu of any fraction of a share as provided above, and a Warrant in like tenor as this Warrant to purchase the -3- 4 number of Shares in respect of which this Warrant shall not have been exercised, converted or waived. 8. Certificate of Adjustment. Whenever the Warrant Price or the number or type of securities issuable upon exercise of this Warrant is adjusted, as herein provided, the Company shall promptly deliver to Holder a certificate of an officer of the Company setting forth the nature of such adjustment and a brief statement of the facts requiring such adjustment. 9. Registration Rights. Any Shares issued upon exercise or conversion of this Warrant shall be deemed to be "Registrable Securities" as defined in that certain Registration Rights Agreement, dated as of December 3, 1999, by and among the Company, Adam Smith & Co. ("ASC") and the Stockholders listed therein, as amended (the "Rights Agreement"), and shall be subject to all of the registration rights as set forth in the Rights Agreement. 10. Transfer of Warrant. Any transfer of the Warrant by the Holder will require an opinion of counsel reasonably acceptable to the Company stating that such transfer is exempt from the registration requirements of the Securities Act of 1933; provided, however, that no opinion of counsel will be required upon transfer of the Warrant to any of the Holder's "affiliates," as such term is defined by Rule 144 of the Securities Act of 1933, as amended (the "Act"); provided further, however, that in the event of a transfer to the Holder's affiliates, (i) such transfer shall be limited to no more than ten such affiliates, each of whom must be an "accredited investor" as defined by Rule 215 of the Act, (ii) such affiliates must agree to be bound by the provisions of this Warrant, including but not limited to Section 11, and (iii) such affiliates must agree to sign the Investment Representation Statement attached as Attachment C upon exercise or conversion of the Warrant. No such transfer shall be effective as against the Company until this Warrant shall have been surrendered to the Company along with transfer instructions duly executed by Holder. Within 15 days of the fulfillment of the foregoing requirements of this Section 10, the Company will issue to the transferee of this Warrant a new Warrant in like tenor for such number of Shares or other securities as this Warrant is then exercisable. 11. Market Standoff Agreement. Except when Holder is exercising its registration rights as described in Section 9 of this Warrant (provided that Holder cannot exercise its "demand" registration rights set forth in Section 2.1 of the Rights Agreement from the date hereof until one year after the termination of the Merger Agreement), Holder agrees in connection with any registration of the Company's securities (other than a registration of debt securities, securities in a Rule 145 transaction or with respect to an employee benefit plan), upon notice by the Company or the underwriters managing any underwritten public offering of the Company's securities, not to sell, make any short sale of, loan, pledge (or otherwise encumber or hypothecate), grant any option for the purchase of, or otherwise directly or indirectly dispose of this warrant or any Shares without the prior written consent of the Company and such managing underwriters for such period of time as the Board of Directors establishes pursuant to its good faith negotiations with such managing underwriters, which period shall not exceed 90 days. Holder hereby consents to the placement of stop transfer orders with the Company's transfer agent in order to enforce the foregoing provision and agrees to enter into a market standoff agreement with such managing underwriters in customary form consistent with the provisions of this Section 11. This market standoff agreement shall be -4- 5 binding upon any transferee who receives, in a private transaction, this Warrant or any securities issued upon exercise hereof. 12. Restrictive Legends. Each certificate representing (i) the Shares, and (ii) any other securities issued in respect of the Shares upon any stock split, stock dividend, recapitalization, merger, consolidation or similar event, shall be stamped or otherwise imprinted with legends in the following form (in addition to any legend required under applicable state securities laws): "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "SECURITIES ACT"). SUCH SHARES MAY NOT BE SOLD, TRANSFERRED OR PLEDGED IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL (WHICH MAY BE COUNSEL FOR THE COMPANY) REASONABLY ACCEPTABLE TO IT STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE SECURITIES ACT." "THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A MARKET STANDOFF AGREEMENT IN THE EVENT OF A PUBLIC OFFERING, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY." 13. Termination. This Warrant (and the right to purchase securities upon exercise hereof) shall terminate on the earlier of (a) the closing of the Merger or (b) August 17, 2004. 14. Miscellaneous. This Warrant shall be governed by the laws of the State of Delaware. The headings in this Warrant are for purposes of convenience of reference only, and shall not be deemed to constitute a part hereof. Neither this Warrant nor any term hereof may be changed, waived, discharged or terminated orally but only by an instrument in writing signed by the Company and Holder. All notices and other communications from the Company to Holder shall be delivered personally, sent by facsimile or mailed by overnight mail, first class mail, postage prepaid, to the address furnished to the Company in writing by Holder who shall have furnished an address to the Company in writing. If delivered personally, such notice shall be deemed given upon the date delivered. If sent by facsimile or overnight mail, such notice shall be deemed given one day after the facsimile or overnight mailing. If mailed by first class mail, postage prepaid, such notice shall be deemed given five days after deposit in the U.S. Mail. MEDJET INC. a Delaware corporation --------------------------------------- By: Eugene I. Gordon Title: Chairman of the Board and Chief Executive Officer -5- 6 ATTACHMENT A NOTICE OF EXERCISE TO: MEDJET INC. 1. The undersigned hereby elects to purchase ____________ shares of Common Stock of Medjet Inc. pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price of such shares in full, together with all applicable transfer taxes, if any. 2. Please issue a certificate or certificates representing said shares of stock in the name of the undersigned or in such other name as is specified below: -------------------------------------- (Name) -------------------------------------- (Address) -------------------------------------- 3. The undersigned represents that the above shares of stock are being acquired for the account of the undersigned for investment and not with a view to, or for resale in connection with, the distribution of such shares and that the undersigned has no present intention of distributing or reselling such shares. In support thereof, the undersigned has executed an Investment Representation Statement included herewith. Date: --------------------- VISX, INCORPORATED By: ------------------------------------- Name: Title: Address: 3400 Central Expressway Santa Clara, CA 95051-0703 A-1 7 ATTACHMENT B NOTICE OF CONVERSION TO: MEDJET INC. 1. The undersigned hereby elects to convert its right to purchase __________ shares of Common Stock pursuant to the attached Warrant into such number of shares of Common Stock of Medjet Inc. as is determined pursuant to Section 7(b) of such Warrant, which conversion shall be effected pursuant to the terms of the attached Warrant. 2. Please issue a certificate or certificates representing said shares of stock in the name of the undersigned or in such other name as is specified below: -------------------------------------- (Name) -------------------------------------- (Address) -------------------------------------- 3. The undersigned represents that the above shares of stock are being acquired for the account of the undersigned for investment and not with a view to, or for resale in connection with, the distribution of such shares and that the undersigned has no present intention of distributing or reselling such shares. In support thereof, the undersigned has executed an Investment Representation Statement included herewith. Date: ----------------------- VISX, INCORPORATED By: -------------------------------------- Name: Title: Address: 3400 Central Expressway Santa Clara, CA 95051-0703 B-1 8 ATTACHMENT C INVESTMENT REPRESENTATION STATEMENT PURCHASER : VISX, INCORPORATED COMPANY : MEDJET INC. SECURITY : COMMON STOCK AMOUNT : DATE : In connection with the purchase of the above-listed securities (the "Securities"), I, the Purchaser, represent to the Company the following: (a) I am aware of the Company's business affairs and financial condition, and have acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Securities. I am purchasing these Securities for my own account for investment purposes only and not with a view to, or for the resale in connection with, any "distribution" thereof for purposes of the Securities Act of 1933, as amended ("Securities Act"). (b) I understand that the Securities will be issued with the restrictive legends described in Section 12 of the Warrant and will be subject to the market standoff agreement described in Section 11 of the Warrant. (c) I understand that the Securities have not been registered under the Securities Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of my investment intent as expressed herein. In this connection, I understand that, in the view of the Securities and Exchange Commission ("SEC"), the statutory basis for such exemption may be unavailable if my representation was predicated solely upon a present intention to hold these Securities for the minimum capital gains period specified under tax statutes, for a deferred sale, for or until an increase or decrease in the market price of the Securities, or for a period of one year or any other fixed period in the future. (d) I further understand that the Securities must be held indefinitely unless subsequently registered under the Securities Act or unless an exemption from registration is otherwise available. Moreover, I understand that the Company is under no obligation to register the Securities, except as set forth in that certain Registration Rights Agreement, dated as of December 3, 1999, by and among the Company, Adam Smith & Co. ("ASC") and the Stockholders listed therein, as amended by the First Amendment to the Registration Rights Agreement, dated as of August __, 2001, by and among the Company, ASC, the Stockholders and the Holder and the Second Amendment to the Registration Rights Agreement, dated as of August __, 2001, by and between the Company and the Holder (collectively, the "Rights Agreement"). In addition, I understand that the C-1 9 certificate evidencing the Securities will be imprinted with a legend which prohibits the transfer of the Securities unless they are registered or such registration is not required in the opinion of counsel for the Company. (e) I am aware of the provisions of Rule 144, promulgated under the Securities Act, which, in substance, permits limited public resale of "restricted securities" acquired, directly or indirectly, from the issuer thereof (or from an affiliate of such issuer), in a non-public offering subject to the satisfaction of certain conditions. I understand that there can be no assurance that the such conditions will ever be satisfied. (f) I further understand that at the time I wish to sell the Securities there may be no public market upon which to make such a sale. (g) I further understand that in the event all of the requirements of Rule 144 are not satisfied, registration under the Securities Act, compliance with Regulation A, or some other registration exemption will be required; and that, notwithstanding the fact that Rule 144 is not exclusive, the Staff of the SEC has expressed its opinion that persons proposing to sell private placement securities other than in a registered offering and otherwise than pursuant to Rule 144 will have a substantial burden of proof in establishing that an exemption from registration is available for such offers or sales, and that such persons and their respective brokers who participate in such transactions do so at their own risk. Date: ------------------------ VISX, INCORPORATED By: ------------------------------------ Name: Title: Address: 3400 Central Expressway Santa Clara, CA 95051-0703 C-2 -----END PRIVACY-ENHANCED MESSAGE-----