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EXHIBIT 16
EXCHANGE AGREEMENT
This is an EXCHANGE AGREEMENT, dated as of October 30, 1996, by
and between OIS OPTICAL IMAGING SYSTEMS, INC., a Delaware corporation (the
"Company") and GUARDIAN INDUSTRIES CORP., a Delaware corporation ("Guardian").
Background
A. Guardian owns 35,000 shares of Series A Cumulative Preferred
Stock having an original issuance price of $1,000 per share (the "Series A
Preferred Stock"), par value $.01 per share, of the Company (the "Series A
Preferred Shares"), which were purchased for an aggregate purchase price of
$35,000,000. As of October 30, the accrued and unpaid dividends on the Series
A Preferred Shares will be $3,136,986 (the "Accumulated Dividends").
B. The parties hereto desire to exchange the nonvoting Series A
Preferred Shares plus the Accumulated Dividends for 38,137 shares of voting
Series B Cumulative Preferred Stock having an original issuance price of $1,000
per share (the "Series B Preferred Stock"), par value $.01, of the Company (the
Series B Preferred Shares") in accordance with this Agreement (the "Exchange").
C. Provided that the Exchange is consummated, GD Investments
Corp., a subsidiary of Guardian, is willing to provide financing to the Company
by purchasing approximately 19,000 additional shares Series B Preferred Stock
having an original issuance price of $1,000 per share from the Company for cash
to be used by the Company to retire outstanding indebtedness owed to Guardian
by the Company, provided, that, among other things, the Company agrees to
exchange the Series B Preferred Shares for the Series A Preferred Shares in
accordance with the terms of this Agreement.
D. Provided that the Exchange is consummated, Guardian and
certain Affiliates (as defined in Section 4(e) herein) are willing to enter
into a tax sharing agreement (the "Tax Sharing Agreement") whereby the Company
will be included as a member of an affiliated group under Section 1504(c) of
the Internal Revenue Code with Guardian and/or its Affiliates (collectively,
the "Guardian Group").
Terms
Intending to be legally bound, in consideration of the
foregoing premises and the mutual covenants and agreements set forth herein,
the parties hereto agree as follows:
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1. Exchange of Preferred Stock. Effective as of October
30, 1996, the Company hereby sells and issues to Guardian the Series B
Preferred Shares in exchange for the Series A Preferred Shares and the
Accumulated Dividends.
2. Deliveries. The Company herewith delivers to
Guardian, and Guardian hereby acknowledges receipt of a stock certificate
evidencing the Series B Preferred Shares, registered in the name of Guardian or
its designee. Guardian herewith delivers to the Company, and the Company
hereby acknowledges receipt of, stock certificates representing the Series A
Preferred Shares.
3. Representations and Warranties of the Company. The
Company represents and warrants to Guardian as follows:
(a) Organization, Standing, etc. The Company is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all requisite corporate power and
authority to own its assets and to carry on its business as presently
conducted. The Company has all requisite corporate power and authority to (i)
execute, deliver and perform its obligations under this Agreement, (ii) issue
the Series B Preferred Shares and (iii) execute, deliver and perform its
obligations under all other agreements and instruments executed and delivered
by it pursuant to or in connection with this Agreement.
(b) Authorization and Execution; Series B Preferred
Shares Validly Issued. The execution, delivery and performance by the Company
of this Agreement and the issuance of the Series B Preferred Shares hereunder
have been duly and validly authorized by all requisite corporate action of the
Company. This Agreement has been duly executed and delivered by the Company and
constitutes a valid and binding agreement of the Company, enforceable against
the Company in accordance with its terms. Upon the execution and delivery of
this Agreement, the Series B Preferred Shares will be validly issued and
outstanding, fully paid and nonassessable. The terms of the Series B Preferred
Shares are set forth in the Certificate of Designations, Preferences and Rights
of Series B Cumulative Preferred Stock of the Company, filed with the Office of
the Secretary of State of Delaware on October 30, 1996.
(c) Contravention. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby do not contravene or constitute a default under or violate
(i) any provision of applicable law or regulation the violation of which would
have a material adverse effect on the Company or on the Series B Preferred
Shares, (ii) the Certificate of Incorporation or Bylaws of the Company or (iii)
any agreement, judgment, injunction, order, decree or other instrument binding
upon the Company or its subsidiaries or any of their assets or properties, the
violation of which would have a material adverse effect on the Company or
result in the creation or imposition of any lien, security interest, pledge or
encumbrance of any kind (collective a "Lien") on any asset of the Company or on
the Series B Preferred Shares.
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(d) Consents. No consent, approval, authorization
or order of, or registration or filing with, any third party, including, without
limitation, any governmental agency or body, is required for the consummation
of the transactions contemplated in this Agreement.
(e) Litigation, Proceedings, Defaults. (i) There
is no action, suit, investigation or proceeding pending against, or to the
knowledge of the Company threatened against or affecting, the Company or its
assets or any of the Series B Preferred Shares before or by any court or
arbitrator or any governmental body, agency, department, instrumentality or
official; (ii) the Company is not in violation of its Certificate of
Incorporation or Bylaws; and (iii) the Company is not in violation of, or in
default under, any provision of any applicable law or regulation or of any
agreement, judgment, injunction, order, decree or other instrument binding upon
the Company, which, in each case, would affect the validity of this Agreement or
the Series B Preferred Shares or any other document or agreement executed or to
be executed by the Company pursuant hereto or in connection herewith or would
impair the ability of the Company to perform in any material respect the
obligations which it has under this Agreement or any such other document or
agreement.
(f) Governmental Regulation. Except as may be
required pursuant to the Securities Act of 1933, as amended (the "Securities
Act"), the Securities Exchange Act of 1934, as amended (the "Exchange Act")
state securities laws, and the rules and regulations of the National Association
of Securities Dealers, Inc. Over-the-Counter market, the Company is not subject
to any federal or state law or regulation or other regulatory scheme limiting
its ability to issue the Series B Preferred Shares.
(g) Capitalization. The Company's authorized
capital stock consists of 125,000,000 shares of common stock, par value $.01,
of the Company (the "Common Stock"), 50,000 shares of Series A Preferred Stock
and 100,000 shares of Series B Preferred Stock. As of June 30, 1996,
97,103,790 shares of Common Stock were issued and outstanding. As of the date
of this Agreement, following the transactions contemplated herein, (i) 50,000
shares of Series A Preferred Stock will be authorized but unissued, and (ii)
38,137 shares of Series B Preferred Stock will be issued and outstanding. All
outstanding shares have been duly authorized, validly issued and are fully paid
and nonassessable.
(h) Brokers. The Company has not engaged any
broker or finder who might be entitled to any brokerage, finder's or other fee
or commission in connection with the sale of the Series B Preferred Shares.
4. Representations and Warranties of Guardian. Guardian
represents and warrants to the Company that:
(a) Organization, Standing, etc. Guardian is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all requisite corporate power and
authority to own its assets and to carry on its business as
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presently conducted. Guardian has all requisite corporate power and authority
to (i) execute, deliver and perform its obligations under this Agreement, and
(ii) execute, deliver and perform its obligations under all other agreements
and instruments executed and delivered by it pursuant to or in connection with
this Agreement.
(b) Authorization and Execution. The execution,
delivery and performance by Guardian of this Agreement have been duly and
validly authorized by all requisite corporate action of Guardian. This
Agreement has been duly executed and delivered by Guardian and constitutes a
valid and binding agreement of Guardian, enforceable against Guardian in
accordance with its terms.
(c) Contravention. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby do not contravene or constitute a default under or violate
(i) any provision of applicable law or regulation the violation of which would
have a material adverse effect on Guardian, (ii) the Certificate of
Incorporation or Bylaws of Guardian or (iii) any agreement, judgment,
injunction, order, decree or other instrument binding upon Guardian or its
subsidiaries or any of their assets or properties, the violation of which would
have a material adverse effect on Guardian or its subsidiaries or result in the
creation or imposition of any Lien on any asset of Guardian or its
subsidiaries.
(d) Litigation, Proceedings, Defaults. (i) There
is no action, suit, investigation or proceeding pending against, or to the
knowledge of the Guardian threatened against or affecting, Guardian or its
assets before or by any court or arbitrator or any governmental body, agency,
department, instrumentality or official; (ii) Guardian is not in violation of
its Certificate of Incorporation or Bylaws; and (iii) Guardian is not in
violation of, or in default under, any provision of any applicable law or
regulation or of any agreement, judgment, injunction, order, decree or other
instrument binding upon Guardian, which, in each case, would affect the
validity of this Agreement or any other document or agreement executed or to be
executed by Guardian pursuant hereto or in connection herewith or would impair
the ability of Guardian to perform in any material respect the obligations
which it has under this Agreement or any such other document or agreement.
(e) Purchase for Investment.
(i) The Series B Preferred Shares
purchased by Guardian have been acquired by Guardian solely for Guardian's own
account or the account of its Affiliates (as such term is defined in Rule 405
of the Securities Act and which are also members of its consolidated group for
federal income tax purposes), for investment, and not with a view to any
distribution thereof; and Guardian will not distribute the Series B Preferred
Shares in violation of the Securities Act or the applicable securities laws of
any state. For purposes of this Section 4(e) the term "Guardian" shall include
the Affiliates of Guardian.
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(ii) Guardian is financially able to hold
the Series B Preferred Shares for long-term investment, believes that the
nature and amount of the Series B Preferred Shares purchased by Guardian is
consistent with Guardian's overall investment program and financial position,
recognizes that there are substantial risks involved in the purchase of the
Series B Preferred Shares, and can afford a complete loss of such investment.
(iii) Guardian has been provided by the
Company with full access to, and opportunity to ask questions of, the Company's
executive officers and full access to financial and other information relating
to the Company and Guardian has entered into this Agreement and has purchased
the Series B Preferred Shares based on Guardian's own review of the Company,
its assets, business and prospects, and not on any representation or warranty
of the Company or any other person which has or has not been made, whether in
this Agreement or otherwise.
(f) Brokers. Guardian has not engaged any broker
or finder who might be entitled to any brokerage, finder's or other fee or
commission in connection with the sale of the Series B Preferred Shares.
5. Miscellaneous.
(a) Notices. All notices, requests, claims,
demands and other communications hereunder shall be in writing and shall be
deemed to have been duly given when delivered in person, by cable, telegram,
facsimile transmission with confirmation of receipt, or telex, or by registered
or certified mail (postage prepaid, return receipt requested) to the respective
parties as follows:
If to the Company:
OIS Optical Imaging Systems, Inc.
00000 Xxxx Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: President
To Guardian:
Guardian Industries Corp.
0000 Xxxxxx Xxxx
Xxxxxx Xxxxx, Xxxxxxxx 00000
Attention: General Counsel
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above
(provided that notice of any change of address shall be effective only upon
receipt thereof).
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(b) Expenses; Documentary Taxes. Each party
hereto agrees to pay its own fees and disbursements in connection with the
purchase and sale of the Series B Preferred Shares as contemplated by this
Agreement.
(c) Successors and Assigns. Except as expressly
provided in this Agreement (i) the rights and obligations of Guardian under
this Agreement may not be assigned to any person other than to an affiliate of
Guardian and the rights and obligations of the Company under this Agreement may
not be assigned to any person other than to an Affiliate of the Company, and
(ii) this Agreement shall not be construed so as to confer any right or benefit
upon any person other than the parties to this Agreement, and their respective
successors and assigns. This Agreement shall be binding upon the Company and
Guardian and their respective successors and permitted assigns.
(d) Governing Law. This Agreement shall be
governed by and construed in accordance with the internal laws of the State of
Delaware without giving effect to principles of conflicts of law.
(e) Severability. If any term, provision,
covenant or restriction of this Agreement or the application of any provision
hereof is otherwise declared to be illegal, invalid, void or otherwise
unenforceable by a court of competent jurisdiction, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated
except to the extent necessary to delete such illegal, invalid, void or
unenforceable provision unless such provision to be deleted shall substantially
impair the benefits of the remaining portions of this Agreement.
(f) Counterparts; Effectiveness. This Agreement
may be executed in two or more counterparts each of which shall be deemed an
original, but which shall constitute one and the same instrument.
(g) Entire Agreement. This Agreement supersedes
all prior oral and written agreements and understandings of the parties hereto
with respect to the subject matter hereof.
(h) Headings. The headings of the Sections and
subsections hereof are inserted as a matter of convenience and for reference
only and in no way define, limit or describe the scope of this Agreement or the
meaning of any provision hereof.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
OIS OPTICAL IMAGING SYSTEMS, INC.
By: / Xxxxxxx X. Xxxxxx /
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Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President and
Chief Financial Officer
GUARDIAN INDUSTRIES CORP.
By: / Xxxxx X. Xxxxx /
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Name: Xxxxx X. Xxxxx
Title: Vice President/Corporate Finance &
Acquisitions and Treasurer
