Execution Copy
SECURITIES PURCHASE AGREEMENT
by and between
ANDLINGER CAPITAL XIII LLC
and
GALILEO CORPORATION
Dated as of December 22, 1998
TABLE OF CONTENTS
Page
ARTICLE I SALE AND PURCHASE OF SECURITIES......................................1
1.1 Sale and Purchase of Securities..........................1
1.2 Closing..................................................2
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE COMPANY.......................2
2.1 Organization and Qualification...........................2
2.2 Capitalization...........................................3
2.3 Authorization and Validity...............................4
2.4 Issuance of Shares.......................................4
2.5 Absence of Certain Changes...............................4
2.6 Reports..................................................5
2.7 Consents and Approvals; No Violation.....................6
2.8 Brokerage Fees and Commissions...........................6
2.9 Litigation...............................................6
2.10 Absence of Changes in Benefit Plans.....................6
2.11 ERISA Compliance........................................7
2.12 Taxes...................................................8
2.13 No Excess Parachute Payments; Termination Payments;
Section 162(m) of the Code.............. .............9
2.14 Compliance with Applicable Laws.........................9
2.15 Contracts; Debt Instruments............................11
2.16 Labor Matters..........................................12
2.17 Title to Properties....................................12
2.18 Insurance Policies.....................................12
2.19 Patents, Trademarks, Trade Names, Etc..................13
2.20 Antitakeover Statute...................................13
2.21 No Required Vote of Company Stockholders...............13
2.22 Disclosure.............................................13
2.23 Acknowledgment Regarding Investors' Purchase of
Securities...........................................13
2.24 No Integrated Offering.................................14
2.25 Fairness Opinion.......................................14
2.26 Nasdaq Listing.........................................14
2.27 Year 2000..............................................14
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE INVESTOR....................14
3.1 Authorization and Validity..............................14
3.3 Consents and Approvals; No Violation....................15
3.3 Private Placement.......................................15
3.4 Investment Intent.......................................15
ARTICLE IV COVENANTS..........................................................16
4.1 Conduct of Business of the Company......................16
4.2 No Solicitation.........................................17
4.3 Access to Information...................................19
4.4 Nasdaq Listing..........................................19
4.5 Board of Directors Matters..............................19
4.6 Reasonable Best Efforts.................................20
4.7 Public Announcements....................................20
4.8 Stockholder Litigation..................................20
4.9 Stock Options...........................................21
4.10 Certain Approval Rights................................21
4.11 No Integration.........................................21
ARTICLE V CONDITIONS TO CONSUMMATION OF THE INVESTMENT TRANSACTION............22
5.1 Conditions to Investors' Obligations for the Initial
Closing...............................................22
5.2 Conditions to the Company's Obligations for the
Closing...............................................24
ARTICLE VI TERMINATION; AMENDMENT; INDEMNITY..................................25
6.1 Termination.............................................25
6.2 Effect of Termination...................................26
6.3 Termination Fee and Expense Fee.........................26
6.4 Amendment...............................................27
6.5 Company's Obligation to Indemnify.......................27
6.6 Investor's Obligation to Indemnify......................27
6.7 Indemnity Procedures for Third Party Claims.............27
6.8 Indemnity Procedures for Claims by the Parties..........28
6.9 Effect of Insurance and Tax Benefits....................29
6.10 Limitations on Indemnification; Exclusive Remedy.......29
ARTICLE VII MISCELLANEOUS.....................................................30
7.1 Extension; Waiver.......................................30
7.2 Entire Agreement; Assignment............................30
7.3 Enforcement of the Agreement............................30
7.4 Validity................................................30
7.5 Notices.................................................30
7.6 Governing Law...........................................31
7.7 Descriptive Headings....................................32
7.8 Parties in Interest.....................................32
7.9 Counterparts............................................32
7.10 Expenses...............................................32
7.11 Certain Definitions....................................32
EXHIBITS
Exhibit A Form of Warrants for Common Stock
Exhibit B Form of Registration Rights Agreement
Exhibit C Form of Stockholders' Agreement
Exhibit D Form of Opinion of Counsel to the Company
DEFINED TERMS
1981 Plan......................................................................3
1991 Plan......................................................................3
Affiliate.....................................................................32
Agreement......................................................................1
Ancillary Agreements...........................................................4
Asserted Liability............................................................27
Bank Boston...................................................................23
Beneficial owner..............................................................32
Benefit Plans..................................................................7
Board of Directors.............................................................4
Claim Response................................................................28
Claims Notice.................................................................27
Closing........................................................................2
Closing Date...................................................................2
Code...........................................................................7
Common Stock...................................................................1
Company........................................................................1
Company Indemnified Party.....................................................27
Control.......................................................................32
Conversion Shares..............................................................1
D&O Policy....................................................................20
DGCL..........................................................................13
Directors Plan.................................................................3
Environmental Claim...........................................................11
Environmental Laws............................................................10
Environmental Liabilities.....................................................11
Environmental Permit...........................................................9
ERISA..........................................................................7
ERISA Affiliate................................................................7
Exchange Act...................................................................2
Expense Fee...................................................................26
Fully diluted.................................................................32
Galileo Corporation Disclosure Schedules.......................................2
Governmental Entity............................................................6
Hazardous Material............................................................10
Indebtedness..................................................................11
Indemnified Party.............................................................27
Indemnifying Party............................................................27
Initial Common Holdings.......................................................19
Intellectual Property.........................................................13
Investment Transactions........................................................1
Investor.......................................................................1
Investor Indemnified Parties..................................................27
Lenders.......................................................................23
Liens..........................................................................2
Litigation.....................................................................6
Loan Agreements...............................................................23
Losses........................................................................27
Material Adverse Effect.......................................................32
Notice of Superior Proposal...................................................18
Permits........................................................................9
Permitted.....................................................................33
Permitted Sale................................................................16
Person........................................................................33
Purchase Price.................................................................1
Registration Rights Agreement..................................................1
Release.......................................................................10
Required......................................................................21
Response Period...............................................................28
Sale..........................................................................17
SEC............................................................................5
SEC Documents..................................................................5
Securities.....................................................................1
Securities Act.................................................................1
Shares.........................................................................1
Stock Option Plans.............................................................3
Stock Purchase Plan............................................................3
Stockholders' Agreement........................................................1
Subsidiaries...................................................................2
Superior Proposal.............................................................18
Taxes..........................................................................9
Termination Fee...............................................................26
Warrants.......................................................................1
SECURITIES PURCHASE AGREEMENT
THIS IS A SECURITIES PURCHASE AGREEMENT, dated as of December 22, 1998
(the "Agreement"), by and between ANDLINGER CAPITAL XIII LLC, a Connecticut
limited liability company ("Investor"), and GALILEO CORPORATION, a Delaware
corporation (the "Company").
WHEREAS, the Company currently has issued and outstanding 8,071,250
shares of Common Stock, par value $.01 per share (the "Common Stock"), which are
currently listed on the Nasdaq National Market;
WHEREAS, Investor desires to purchase from the Company, and the
Company desires to sell to Investor, (i) two million (2,000,000) shares of
Common Stock (the "Shares") and (ii) warrants to purchase two million
(2,000,000) shares of Common Stock (the "Warrants") in the form of Exhibit A
hereto exercisable at an exercise price of $1.50 per share;
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Company, Investor and certain other stockholders of the Company
are entering into a registration rights agreement substantially in the form of
Exhibit B hereto (the "Registration Rights Agreement") providing for the
registration under the Securities Act of 1933, as amended (the "Securities Act")
of the Shares, the shares of Common Stock issuable upon exercise of the Warrants
(the "Conversion Shares") and shares of Common Stock owned by other stockholders
party to the Registration Rights Agreement;
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Company, Investor and certain stockholders of the Company are
entering into a stockholders' agreement substantially in the form of Exhibit C
hereto (the "Stockholders' Agreement") relating to the sale by such stockholders
of shares of Common Stock;
THEREFORE, in consideration of the mutual covenants contained herein,
and intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
SALE AND PURCHASE OF SECURITIES
1.1 Sale and Purchase of Securities. (a) Subject to the terms and
conditions set forth herein, at the Closing (as hereinafter defined), the
Company will issue and sell to Investor, and Investor will purchase, the Shares
and the Warrants. The Shares and the Warrants are referred to collectively
herein as the "Securities". The purchase and sale of the Securities pursuant to
this Agreement shall sometimes hereinafter be referred to as the "Investment
Transactions".
(b) The aggregate purchase price for the Shares to be paid by
Investor pursuant to this Agreement is six million dollars ($6,000,000.00) (the
"Purchase Price"). At Closing, Investor shall pay the Purchase Price for the
Shares by wire transfer of immediately available funds to an account designated
by the Company not less than two business days prior to the Closing. The
Purchase Price shall be allocated 95% as to the Shares and 5% as to the
Warrants.
1.2 Closing. (a) The closing of the Investment Transactions (the
"Closing") will take place on the first business day after the conditions to the
Closing set forth in Sections 5.1 and 5.2 hereof shall have been satisfied or
waived in writing, or on such other date as may be agreed by the parties hereto
(the "Closing Date").
(b) At Closing, the Company will deliver to the Investor one or
more certificates evidencing the Shares and the Warrants registered in
Investor's name (or the name of any nominee of Investor).
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Simultaneously with the execution and delivery of this Agreement, the
Company is delivering to Investor disclosure schedules (the "Galileo Corporation
Disclosure Schedules")setting forth the disclosures contemplated by certain
Sections of this Article II.
The Company hereby represents and warrants to Investor as follows:
2.1 Organization and Qualification.
(a) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and has the
requisite corporate power to carry on its business as it is now being conducted.
The Company is duly qualified as a foreign corporation to do business, and is in
good standing, in each jurisdiction where the character of its properties owned
or leased or the nature of its activities makes such qualification necessary,
except where the failure to be so qualified would not result in a Material
Adverse Effect (as hereinafter defined).
(b) Schedule 2.1(b) sets forth a true and complete list of each
of the Company's subsidiaries (as such term is defined in Rule 12b-2 promulgated
under the Securities Exchange Act of 1934, as amended (the "Exchange Act")
(collectively, the "Subsidiaries"). Each Subsidiary is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has the requisite corporate power to carry on
its business as it is now being conducted. Each Subsidiary is duly qualified as
a foreign corporation to do business, and is in good standing, in each
jurisdiction where the character of its properties owned or leased or the nature
of its activities makes such qualification necessary, except where the failure
to be so qualified would not result in a Material Adverse Effect. Except as set
forth on Schedule 2.1(b), all of the outstanding shares of capital stock of each
Subsidiary have been validly issued, are fully paid and non-assessable and are
wholly-owned, either directly or indirectly, by the Company, free and clear of
all pledges, claims, equities, options, liens, charges, rights of first refusal,
"tag" or "drag" along rights, encumbrances and security interests of any kind or
nature whatsoever (collectively, "Liens"). Except for the capital stock of its
Subsidiaries or as otherwise set forth in Schedule 2.1(b), neither the Company
nor any Subsidiary owns, directly or indirectly, any capital stock or other
ownership interest in any corporation, partnership, joint venture or other
entity.
(c) The Company has delivered to Investor complete and correct
copies of its Restated Certificate of Incorporation and Bylaws, in each case as
currently in effect.
2.2 Capitalization.
(a) The authorized capital stock of the Company consists of
36,000,000 shares of Common Stock and no other shares of capital stock. As of
the date hereof, (i) 8,071,250 shares of Common Stock are issued and
outstanding; (ii) options to purchase an aggregate of 757,400 shares of Common
Stock are outstanding under the Company's 1981 Stock Option Plan (the "1981
Plan"), 1991 Stock Option Plan (the "1991 Plan") and 1996 Directors Stock Option
Plan (the "Directors Plan") and, together with the 1981 Plan and 1991 Plan, the
"Stock Option Plans"), 757,400 shares of Common Stock are reserved for issuance
upon the exercise of outstanding options under the Stock Option Plans, 55,114
shares of Common Stock are reserved for issuance under the Company's 1997 Stock
Purchase Plan (the "Stock Purchase Plan"), and there are no stock appreciation
rights or limited stock appreciation rights outstanding other than those
attached to options under the Stock Option Plans; (iii) no shares of Common
Stock are held by the Company in its treasury; and (iv) no shares of capital
stock of the Company are held by the Company's Subsidiaries. The Company has no
outstanding bonds, debentures, notes or other obligations entitling the holders
thereof to vote (or which are convertible into or exercisable for securities
having the right to vote) with or separate from the stockholders of the Company
on any matter. Except as set forth on Schedule 2.2, since September 30, 1998,
the Company (i) has not issued any shares of Common Stock other than under the
Stock Purchase Plan or upon the exercise of options issued under the Stock
Option Plans, (ii) has granted options to purchase an aggregate of 79,000 shares
of Common Stock under the Stock Option Plans and (iii) has not split, combined
or reclassified any of its shares of capital stock. All issued and outstanding
shares of Common Stock are duly authorized, validly issued, fully paid,
nonassessable and free of preemptive rights. There are no other shares of
capital stock of the Company, no securities of the Company convertible or
exchangeable for shares of capital stock or voting securities of the Company,
and no existing options, warrants, calls, subscriptions, convertible securities,
or other rights, agreements or commitments which obligate the Company or any of
its Subsidiaries to issue, transfer or sell any shares of capital stock of, or
equity interests in, the Company or any of its Subsidiaries. There are no
outstanding obligations of the Company or any Subsidiaries to repurchase, redeem
or otherwise acquire any shares of capital stock of the Company and there are no
performance awards outstanding under the Stock Option Plans or any other
outstanding stock related awards. Other than under the Stock Purchase Plan or
upon the exercise of options issued under the Stock Option Plans, after the
Closing, neither the Company nor any Subsidiary will have any obligation to
issue, transfer or sell any shares of capital stock of the Company or any
Subsidiary pursuant to any Benefit Plan (as defined). There are no voting trusts
or other agreements or understandings to which the Company or any of its
Subsidiaries is a party with respect to the voting of capital stock of the
Company or any of its Subsidiaries.
(b) Except as may exist pursuant to this Agreement, any Ancillary
Agreement (as defined) or as set forth on Schedule 2.2, there are not any
outstanding contractual obligations of the Company or any Subsidiary to
repurchase, redeem or otherwise acquire, or providing preemptive or registration
rights with respect to, any shares of capital stock of the Company or any of its
Subsidiaries. There are no anti-dilution or price adjustment provisions
contained in any security issued by the Company (or in any agreement providing
rights to security holders) that will be triggered by the issuance of the
Securities or the Conversion Shares. The Company and the Subsidiaries do not
have outstanding any loans to any Person (as defined) in respect of the purchase
of securities issued by the Company and the Subsidiaries.
2.3 Authorization and Validity. The Company has the requisite
corporate power and authority to execute and deliver this Agreement and all
agreements and documents contemplated hereby or executed in connection herewith,
including without limitation the Registration Rights Agreement and the
Stockholders' Agreement (the "Ancillary Agreements") and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement and the Ancillary Agreements by the Company and the consummation by
the Company of the transactions contemplated hereby and thereby (including,
without limitation, the issuance of the Securities and the reservation of the
Conversion Shares) have been duly and validly authorized by the Board of
Directors of the Company (the "Board of Directors"), and no other corporate
proceedings on the part of the Company are necessary to authorize this Agreement
and the Ancillary Agreements or to consummate the transactions contemplated
hereby and thereby. This Agreement has been, and any Ancillary Agreement at the
time of execution will have been, duly and validly executed and delivered by the
Company, and (assuming this Agreement and such Ancillary Agreements each
constitutes a valid and binding obligation of Investor) constitutes and will
constitute the valid and binding obligations of the Company, enforceable in
accordance with their respective terms, subject to applicable bankruptcy,
insolvency, moratorium or other similar laws relating to creditors' rights and
general principles of equity.
2.4 Issuance of Shares. The Shares, upon issuance in accordance with
the terms of this Agreement, will be duly authorized, validly issued, fully paid
and non-assessable, and free from all taxes, liens, claims and encumbrances with
respect to the issue thereof and shall not be subject to preemptive rights or
other similar rights of stockholders of the Company and will not impose personal
liability upon the holder thereof. Upon completion of the transactions
contemplated hereby, the Conversion Shares will be duly authorized and reserved
for issuance, and, upon exercise of the Warrants in accordance with the terms
thereof, will be validly issued, fully paid and non-assessable, and free from
all taxes, liens, claims and encumbrances and will not be subject to preemptive
rights or other similar rights or stockholders of the Company and will not
impose personal liability upon the holder thereof.
2.5 Absence of Certain Changes. Except as disclosed in the SEC
Documents (as defined) or in a separate writing from the Company to Investor,
since September 30, 1998, the Company and its Subsidiaries have conducted their
business only in the ordinary course of such business consistent with past
practices, and there has not been (a) any Material Adverse Effect suffered by
the Company or any of its Subsidiaries; (b) any declaration, setting aside or
payment of any dividend or other distribution in respect of the capital stock of
the Company or any repurchase, redemption or other acquisition by the Company of
any shares of Common Stock or other equity securities of the Company; (c) any
entry into any agreement, commitment or transaction by the Company or any of its
Subsidiaries which is material to the Company and its subsidiaries taken as a
whole, whether or not in the ordinary course of business; (d) any split,
combination or reclassification of the Company's capital stock or any issuance
or the authorization of any issuance of any other securities in respect of, in
lieu of or in substitution for shares of its capital stock; (e)(i) any granting
by the Company or any of its Subsidiaries to any director, officer or employee
of the Company or any of its Subsidiaries of any increase in compensation,
except in the ordinary course of business consistent with prior practice or as
was required under employment agreements in effect as of the date of the most
recent audited financial statements included in the SEC Documents, (ii) any
granting by the Company or any of its Subsidiaries to any officer or employee of
any increase in severance or termination pay, except as was required under
employment, severance or termination agreements in effect as of the date of the
most recent audited financial statements included in the SEC Documents, or (iii)
any entry by the Company or any of its Subsidiaries into any employment,
severance or termination agreement with any officer or employee; (f) any damage,
destruction or loss, whether or not covered by insurance, that could reasonably
be expected to have a Material Adverse Effect; (g) any material change in
accounting methods, principles or practices by the Company; or (h) any
revaluation by the Company or any of its Subsidiaries of their respective
assets, including without limitation, write-downs of inventory or write-offs of
accounts receivable other than in the ordinary course of business consistent
with past practices.
2.6 Reports. (a) Since September 30, 1995, the Company has filed all
required forms, reports and documents with the Securities and Exchange
Commission (the "SEC") required to be filed by it pursuant to the federal
securities laws and the rules and regulations promulgated thereunder
(collectively, the "SEC Documents"), all of which have complied as of their
respective filing dates in all material respects with all applicable
requirements of the Securities Act and the Exchange Act, and the rules and
regulations promulgated thereunder. None of such forms, reports or documents at
the time filed contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading, provided, that, if any such form, report or document has
been amended by a later-filed SEC Document filed and publicly available prior to
the date hereof, then the representation contained in this sentence shall not
apply to such form, report or document, but shall apply to such later-filed SEC
Document at the time filed. Except to the extent that information contained in
any SEC Document has been revised or superseded by a later-filed SEC Document,
none of the SEC Documents contains any untrue statement of a material fact or
omits 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 were made, not misleading. The financial statements of the Company included
in the SEC Documents comply as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with generally accepted
accounting principles (except, in the case of unaudited statements, as permitted
by Form 10-Q of the SEC) applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto) and fairly present
the consolidated financial position of the Company and its Subsidiaries as of
the dates thereof and the consolidated results of their operations and cash
flows for the periods then ended (subject, in the case of unaudited statements,
to normal year-end audit adjustments), provided, that, if any such financial
statements have been restated in a later-filed SEC Document filed and publicly
available prior to the date hereof, then the representation contained in this
sentence shall not apply to such financial statements, but shall apply to such
restated financial statements in such later-filed SEC Document at the time
filed. All SEC Documents filed with the SEC by the Company on or after December
12, 1997 are listed on Schedule 2.6(a).
(b) Except for the absence of notes, the unaudited financial
statements of the Company as, at and for the fiscal year ended September 30,
1998, previously provided to Investor, comply as to form in all material
respects with applicable accounting requirements and the rules and regulations
of the SEC, have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis during the periods involved and fairly
present the consolidated financial position of the Company and its consolidated
subsidiaries as of the date thereof and the consolidated results of their
operations and cash flows for the periods then ended, subject in each case to
audit adjustments which shall not be material in amount except as set forth in
Schedule 2.6(b). Except as set forth in Schedule 2.6, neither the Company nor
any of its Subsidiaries has any liabilities or obligations, contingent or
otherwise, that would result in a Material Adverse Effect.
2.7 Consents and Approvals; No Violation. Neither the execution and
delivery of this Agreement or any of the Ancillary Agreements by the Company nor
the consummation of the transactions contemplated hereby or thereby (including
the issuance of the Securities and, upon exercise of the Warrants, the
Conversion Shares) will result in any violation of or default (with or without
notice or lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to loss of a material benefit
under, or result in the creation of any Lien upon any of the properties or
assets or the Company or any of its Subsidiaries under, (a) the Restated
Certificate of Incorporation, or Bylaws of the Company or the comparable charter
or organizational documents of any of its Subsidiaries, (b) any loan or credit
agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise or license applicable to the Company
or any of its Subsidiaries or their respective properties or assets or (c)
subject to the governmental filings and other matters referred to in the
following sentence, any judgment, order, decree, statute, law, ordinance, rule
or regulation applicable to the Company or any of its Subsidiaries or their
respective properties or assets, other than, in the case of clauses (b) or (c),
any such conflicts, violations, defaults, rights or Liens that would not have a
Material Adverse Effect. No consent, approval, order or authorization of, or
registration, declaration or filing with, any Federal, state or local government
or any court, administrative or regulatory agency or commission or other
governmental authority, entity or agency, domestic or foreign (including,
without limitation, the SEC and Nasdaq) (a "Governmental Entity"), is required
by the Company or any of its Subsidiaries in connection with the execution and
delivery of this Agreement or the Ancillary Agreements by the Company or the
consummation by the Company of the transactions contemplated hereby or thereby,
except for (i) the waiver by the Nasdaq Stock Market, Inc. of any requirement
for a vote of the stockholders in connection with the Investment Transactions
and (ii) such other consents, approvals, orders, authorizations, registrations,
declarations and filings the failure of which to be obtained or made would not
have a Material Adverse Effect.
2.8 Brokerage Fees and Commissions. No person is entitled to receive
from the Company or its Subsidiaries any investment banking, brokerage or
finder's fee in connection with this Agreement or the transactions contemplated
hereby, except for Xxxxxxx & Company, Inc. and Xxxxxx, Xxxxxx & Associates,
whose fees will be paid by the Company.
2.9 Litigation. Except as set forth in Schedule 2.9, (i) there are no
claims, actions, suits, proceedings, arbitrations, investigations or audits
(collectively, "Litigation") by a third party other than a Governmental Entity
pending or, to the knowledge of the Company, threatened against the Company or
any of its Subsidiaries, at law or in equity, other than those in the ordinary
course of business which would not result in a Material Adverse Effect, and (ii)
there is no Litigation by a Governmental Entity pending or, to the knowledge of
the Company, threatened against the Company or any of its Subsidiaries, at law
or at equity; nor does the Company or its Subsidiaries have knowledge of any
facts or circumstances that it believes would be likely to form the basis for
any Litigation described in the preceding clauses (i) and (ii). Except as set
forth in Schedule 2.9, no Governmental Entity has indicated an intention to
conduct any audit, investigation or other review with respect to the Company or
any of its Subsidiaries. Schedule 2.9 contains a complete and accurate
description of all existing Litigation, including whether such Litigation is
covered by insurance and the deductible, if any, applicable to such claim.
2.10 Absence of Changes in Benefit Plans. Except as disclosed in the
SEC Documents, since September 30, 1998, there has not been any adoption or
amendment by the Company or any of its Subsidiaries of any collective bargaining
agreement or any bonus, pension, profit sharing, deferred compensation,
incentive compensation, stock ownership, stock purchase, stock option, phantom
stock, retirement, vacation, severance, disability, death benefit,
hospitalization, medical or other plan, arrangement or understanding (whether or
not legally binding) providing benefits to any current or former employee,
officer or director of the Company or any of its Subsidiaries or for which the
Company or any of its Subsidiaries is liable which would materially increase
costs under such plan, arrangement or understanding or, as to any plan intended
to be qualified under section 401(a) of the Code (as hereafter defined),
adversely affect such plan's qualified status. Except as disclosed on Schedule
2.10 and in the SEC Documents, there exist no employment, consulting, severance,
termination or indemnification agreements, arrangements or understandings
between the Company or any of its Subsidiaries, on the one hand, and any officer
or employee, including any current or former officer or director of either of
the Company or any of its Subsidiaries, or for which the Company or any of its
Subsidiaries is liable.
2.11 ERISA Compliance. (a) Schedule 2.11(a) sets forth a complete list
of all "employee benefit plans" (as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")), employment
contracts, bonus, pension, profit sharing, deferred compensation, incentive
compensation, excess benefit, stock, stock option, severance, termination pay,
change in control or other employee benefit plans, programs or arrangements,
including, but not limited to, those providing medical, dental, vision,
disability, life insurance and vacation benefits (other than those required to
be maintained by law), whether written or unwritten, qualified or unqualified,
funded or unfunded, foreign or domestic currently maintained, or contributed to,
or required to be maintained or contributed to, by the Company or any other
person or entity that, together with the Company, is treated as a single
employer under Section 414 of the Internal Revenue Code of 1986, as amended (the
"Code") (each an "ERISA Affiliate") for the benefit of any current or former
employees, officers or directors of the Company or any of its Subsidiaries or
with respect to which the Company or any of its Subsidiaries has any liability
(collectively, the "Benefit Plans"). No Benefit Plan is a union sponsored
benefit plan or "multiemployer plan" (as defined in Section 3(37) of ERISA), and
neither the Company nor any ERISA Affiliate has at any time contributed to or
been required to contribute to any multiemployer plan. The Company will, make
available to Investor at its request true, complete and correct copies of each
Benefit Plan and related trust agreement and annuity contract and (to the extent
applicable) a copy of each Benefit Plan's current summary plan description. In
addition, to the extent applicable, the Company will provide to Investor where
reasonably requested by Investor a copy of the most recent IRS determination
letter issued to each Benefit Plan and a copy of the most recently filed IRS
Form 5500 together with all schedules, actuarial reports and accountants'
statements for each Benefit Plan.
(b) Each Benefit Plan has been administered in all material
respects in accordance with its terms. The Company, each ERISA Affiliate and all
the Benefit Plans are all in compliance in all material respects with the
applicable provisions of ERISA and the Code.
(c) Except as set forth on Schedule 2.11(c), all Benefit Plans
intended to be qualified under Section 401(a) of the Code have received
determination letters from the Internal Revenue Service to the effect that such
Benefit Plans are qualified and exempt from Federal income taxes under Section
401(a) and 501(a), respectively, of the Code and no such determination letter
has been revoked nor, to the knowledge of the Company, has revocation been
threatened, nor has any such Benefit Plan been amended since the date of its
most recent determination letter or application therefor in any respect that
would adversely affect its qualification or materially increase its costs.
(d) No Benefit Plan had, as of it most recent valuation date, an
"unfunded benefit liability" (as such term is defined in Section 4001(a)(18) of
ERISA) and neither the Company nor any of its Subsidiaries is aware of any facts
or circumstances that could adversely change the funded status of any such
Benefit Plans.
(e) None of the Company, any ERISA Affiliate, any officer of the
Company or any of its Subsidiaries or any of the Benefit Plans, any trusts
created thereunder or any trustee or administrator thereof, has engaged in a
non-exempt "prohibited transaction" (as such term is defined in Section 406 of
ERISA or Section 4975 of the Code) or any other breach of fiduciary
responsibility that could subject the Company, any ERISA Affiliate or any
officer of the Company or any of its Subsidiaries or Investor to tax or penalty
under ERISA, the Code or other applicable law. Neither any of such Benefit Plans
nor any of such trusts has been terminated during the last five years.
(f) With respect to any Benefit Plan that is an employee welfare
benefit plan (as defined in Section 3(1) of ERISA), (i) no such Benefit Plan is
funded through a "welfare benefit fund," as such term is defined in Section
419(e) of the Code, (ii) each such Benefit Plan that is a "group health plan,"
as such term is defined in Section 5000(b)(l) of the Code, complies in all
material respects with the applicable requirements of Section 4980B(f) of the
Code, (iii) no such Benefit Plan provides benefits, including without
limitation, death or medical benefits, beyond termination of employment or
retirement other than (A) coverage mandated by law or (B) death or retirement
benefits under a Benefit Plan qualified under Section 401(a) of the Code, and
(iv) each such Benefit Plan (including any such Plan covering retirees or other
former employees) may be amended or terminated at any time without material
liability to the Company or any of its Subsidiaries.
(g) Except as set forth on Schedule 2.11(g), neither the Company
nor any ERISA Affiliate has, at any time, (i) maintained or contributed to any
employee pension benefit plan subject to Title IV of ERISA or Code Section 412
or (ii) been required to contribute to, or incurred any withdrawal liability
within the meaning of ERISA Section 4201, including any contingent liability
within the meaning of ERISA Section 4201, to any multiemployer plan as defined
in ERISA Section 3(37).
(h) Except as set forth on Schedule 2.11(h), there are no pending
investigations by any Governmental Entity involving the Benefit Plans, no
termination proceedings involving the Benefit Plans, and no threatened or
pending claims (except for claims for benefits payable in the normal operation
of the Benefit Plans), suits or proceedings against any Benefit Plan or
asserting any rights or claims to benefits under any Benefit Plan which could
give rise to any material liability, nor, to the best of the Company's or any
affiliate's knowledge, are there any facts which could give rise to any material
liability in the event of any such investigation, claim, suit or proceeding.
2.12 Taxes. Except as set forth on Schedule 2.12,
(a) The Company and each of its Subsidiaries have filed all
Federal income tax returns and all other material tax returns and reports
required to be filed by it. All such returns are complete and correct in all
material respects. The Company and each of its Subsidiaries have paid (or the
Company has paid on their behalf) all taxes due for the periods for which such
returns were filed and all material taxes for which no return was required to be
filed, and the most recent financial statements contained in the SEC Documents
reflect an adequate reserve for all taxes payable by the Company and its
Subsidiaries for all taxable periods and portions thereof through the date of
such financial statements.
(b) No material deficiencies for any taxes have been proposed,
asserted or assessed against the Company or any of its Subsidiaries, and no
requests for waivers of the time to assess any such taxes are pending. The
Federal income tax returns of the Company and each of its Subsidiaries
consolidated in such returns have been examined by and settled with the Internal
Revenue Service for all years through 1993.
(c) As used in this Agreement, "Taxes" shall include all Federal,
state, local and foreign income, property, sales, excise and other taxes,
tariffs or governmental charges of any nature whatsoever including, without
limitation, interest, penalties and additions to tax with respect thereto.
(d) The Company is not a "real property holding corporation" as
defined in the Code.
2.13 No Excess Parachute Payments; Termination Payments; Section
162(m) of the Code. Any amount that could be received (whether in cash or
property or the vesting of property) by any employee, officer or director of
either of the Company or any of their affiliates who is a "disqualified
individual" (as is defined in proposed Treasury Regulation Section 1.280G-1)
under any employment, severance or termination agreement, other compensation
arrangement or Benefit Plan would not be characterized as an "excess parachute
payment" (as is defined in Section 280G(b)(1) of the Code). There are no
payments that the Company or any of its Subsidiaries is or would be required to
make to any of the Company's or any Subsidiary's current or former employees or
to any third party which payment is contingent upon a change of control of the
Company or any of its Subsidiaries or payable as a result of the transactions
contemplated by this Agreement. The disallowance of a deduction under Section
162(m) of the Code for employee remuneration will not apply to any amount paid
or payable by the Company or any of its Subsidiaries under any commitment,
program, arrangement or understanding.
2.14 Compliance with Applicable Laws. (a) The Company and its
Subsidiaries have in effect all Federal, state, local and foreign governmental
approvals, authorizations, certificates, filings, franchises, licenses, notices,
permits and rights ("Permits"), including without limitation any Permits
required by the U.S. Food and Drug Administration, necessary for them to own,
lease or operate their properties and assets and to carry on their business as
now conducted, and there has occurred no default under any such Permit, except
for the lack of Permits and for defaults under Permits which would not have a
Material Adverse Effect. Except as disclosed in the SEC Documents, each of the
Company and its Subsidiaries is in compliance with all applicable statutes,
laws, ordinances, rules, orders and regulations of any Governmental Entity,
except where the failure to be in compliance would not have a Material Adverse
Effect. The Company and its Subsidiaries have obtained and maintained all
Environmental Permits required with respect to their respective properties,
assets, businesses and operations, except where the failure to obtain or
maintain an Environmental Permit would not have a Material Adverse Effect. The
term "Environmental Permit" means any permit, license, approval or other
authorization required under any Environmental Law (as defined below).
(b) Each of the Company and its Subsidiaries and their respective
properties, assets, businesses and operations is, and has been, and each of the
Company's former subsidiaries, while subsidiaries of the Company and their
respective properties, assets, businesses and operations, was, in compliance
with all applicable Environmental Laws and Environmental Permits, except for
possible noncompliance which would not have a Material Adverse Effect. The term
"Environmental Laws" means any applicable Federal, state, local or foreign
statute, code, ordinance, rule, regulation, policy, guideline, permit, consent,
approval, license, judgment, order, writ, decree, injunction or other
authorization, including the requirement to register underground storage tanks,
relating to: (i) pollution or protection of health or the environment, the
Release or threatened Release of Hazardous Material (as hereinafter defined)
into the environment, including, without limitation, into ambient air, soil,
sediments, land surface or subsurface, buildings or facilities, surface water,
groundwater, publicly-owned treatment works, septic systems or land; or (ii) the
generation, treatment, storage, disposal, use, handling, manufacturing,
transportation or shipment of Hazardous Material.
(c) During the period of ownership or operation by the Company
and its subsidiaries of any of their respective current or previously-owned
properties, there have been no Releases of Hazardous Material in, on, under or
affecting such properties or any surrounding site, except in each case for those
which are not reasonably likely to have a Material Adverse Effect. Prior to the
period of ownership by the Company and its subsidiaries of any of their
respective current or previously-owned properties there were no releases of
Hazardous Material in, on, under or affecting any such property or any
surrounding site, except in each case for those which would not have a Material
Adverse Effect. The term "Release" means any release as defined in 42 U.S.C. ss.
9601(22) but excluding the exceptions in ss. 9601(22)(A) - (D), and the term
"Hazardous Material" means (i) hazardous materials, pollutants or contaminants,
medical, hazardous or infectious wastes, hazardous waste constituents, hazardous
chemicals, hazardous or toxic pollutants, and hazardous or toxic substances as
those terms are defined in or regulated by Environmental Laws, including the
following statutes and their implementing regulations: the Hazardous Materials
Transportation Act, 49 U.S.C. xx.xx. 1801 et seq., the Resource Conservation and
Recovery Act, 42 U.S.C. xx.xx. 6901 et seq., the Comprehensive Environmental
Response, Compensation and Liability Act, as amended by the Superfund Amendments
and Reauthorization Act, 42 U.S.C. xx.xx. 9601 et seq., the Toxic Substances
Control Act, 15 U.S.C. xx.xx. 2601 et seq., the Clean Water Act, 33 U.S.C.
xx.xx. 1251 et seq. and the Clean Air Act, 42 U.S.C. xx.xx. 7401 et seq., (ii)
petroleum, including crude oil and any fractions thereof, (iii) natural gas,
synthetic gas and any mixtures thereof, (iv) radioactive materials including,
without limitation, source byproduct or special nuclear materials and (v)
pesticides.
(d) Except as disclosed on Schedule 2.14(d), (i) the Company and
its Subsidiaries and their respective properties, assets, businesses and
operations have not received notice of, and to the best knowledge of the Company
and its Subsidiaries are not subject to any material Environmental Claims
(direct or contingent, and whether known or unknown) or material Environmental
Liabilities arising from or based upon any act, omission, event, condition or
circumstance occurring or existing on or prior to the date hereof, including
without limitation, any such Environmental Claims or Environmental Liabilities
arising from or based upon the ownership or operation of assets, businesses or
properties of the Company or any Subsidiary or their respective predecessors,
and (ii) neither the Company nor any of its Subsidiaries has received any notice
of any violation of any Environmental Law or Environmental Permit or any
Environmental Claim in connection with their respective assets, properties,
businesses or operations, or, in each case, those of their respective
predecessors, which could have a Material Adverse Effect. The Company has
disclosed on Schedule 2.14(d) all material environmental assessment reports
prepared by or for the Company's consultants since January 1, 1993 regarding the
environmental condition of the Company's properties or relating to its
activities. The term "Environmental Claim" means any third party (including
governmental agencies, regulatory agencies and employees) action, lawsuit,
claim, proceeding (including claims or proceedings under the Occupational Safety
and Health Act or similar laws relating to safety of employees) which seeks to
impose liability for (i) noise; (ii) pollution or contamination of the air,
surface water, ground water or land; (iii) solid, gaseous or liquid waste
generation, handling, treatment, storage, disposal or transportation; (iv)
exposure to Hazardous Material; (v) the safety or health of employees; or (vi)
the manufacture, processing, distribution in commerce, use, or storage of
chemical or other Hazardous Material. An "Environmental Claim" includes, but is
not limited, to, a common law action, as well as a proceeding to issue, modify
or terminate an Environmental Permit of the Company or any of its Subsidiaries,
or to adopt or amend a regulation to the extent that such a proceeding attempts
to redress violations of such an Environmental Permit as alleged by a Federal,
state or local executive, legislative, judicial, regulatory or administrative
agency, board or authority. The term "Environmental Liabilities" includes all
costs arising from any Environmental Claim or violation or alleged violation or
circumstance or condition which would give rise to a violation or liability
under any Environmental Permit or Environmental Law under any theory of
recovery, at law or in equity, and whether based on negligence, strict liability
or otherwise, including but not limited to: remedial, removal, response,
abatement, investigative, monitoring, personal injury and damage to property,
and any other related costs, expenses, losses, damages, penalties, fines,
liabilities and obligations, including reasonable attorney's fees and court
costs.
2.15 Contracts; Debt Instruments. (a) All contracts and agreements
binding on the Company or any of its Subsidiaries or any of their assets or
properties that is or was required to be filed with any SEC Document have been
so filed. Except as set forth on Schedule 2.15, neither the Company nor any of
its Subsidiaries is in violation of or in default under (nor does there exist
any event or condition which upon the passage of time or the giving of notice,
or both, would cause such a violation of or default under) any loan or credit
agreement, note, bond, mortgage, indenture, lease, or any other contract,
agreement, arrangement or understanding, to which it is a party or by which it
or any of its properties or assets is bound, except for violations or defaults
that would not have a Material Adverse Effect. Neither the Company nor any of
its Subsidiaries is a party to, or bound by, any contract or agreement that
materially limits the ability of the Company directly or through any of its
Subsidiaries to compete in any line of business or with any person in any
geographic area during any period of time. The Company is not aware of any
indemnification, breach of contract or similar claims by or against the Company
or any of its Subsidiaries which are pending or threatened (or which could be
reasonably expected to be made in the future) with respect to the acquisition of
any business by the Company.
(b) Set forth on Schedule 2.15(b) of this Agreement is (i) a list
of all loan or credit agreements, notes, bonds, mortgages, indentures and other
agreements and instruments pursuant to which any indebtedness of the Company or
any of its Subsidiaries in an aggregate principal amount in excess of $100,000
is outstanding or may be incurred and (ii) the respective principal amounts
currently outstanding thereunder. For purposes of this Section 2.15,
"indebtedness" shall mean, with respect to any Person, without duplication, (i)
all obligations of such person for borrowed money, or with respect to deposits
or advances of any kind to such person, (ii) all obligations of such person
evidenced by bonds, debentures, notes or similar instruments, (iii) all
obligations of such person upon which interest charges are customarily paid,
(iv) all obligations of such person under conditional sale or other title
retention agreements relating to property purchased by such person, (v) all
obligations of such person issued or assumed as the deferred purchase price of
property or services (excluding obligations of such person to creditors for raw
materials, inventory, services and supplies incurred in the ordinary course of
such person's business), (vi) all capitalized lease obligations of such person,
(vii) all obligations of others secured by any Lien on property or assets owned
or acquired by such person, whether or not the obligations secured thereby have
been assumed, (viii) all obligations of such person under interest rate or
currency hedging transactions (valued at the termination value thereof), (ix)
all letters of credit issued for the account of such person (excluding letters
of credit issued for the benefit of suppliers to support accounts payable to
suppliers incurred in the ordinary course of business) and (x) all guarantees
and arrangements having the economic effect of a guarantee of such Person of any
indebtedness of any other person.
2.16 Labor Matters. Except as set forth on Schedule 2.16 and as
disclosed in the SEC Documents, no employee of the Company or any of its
Subsidiaries is represented by any union or other labor organization. There is
no labor strike, dispute, material slowdown, representation campaign or material
work stoppage pending or, to the Company's knowledge, threatened against or
affecting the Company or any of its Subsidiaries, and neither the Company nor
any of its Subsidiaries has experienced any material work stoppage since
September 30, 1997.
2.17 Title to Properties. (a) The Company and its Subsidiaries have
good, valid and marketable title to, or valid leasehold interests in, all their
material properties and assets except for such as are no longer used or useful
in the conduct of its businesses or as have been disposed of in the ordinary
course of business and except for defects in title, easements, restrictive
covenants and similar encumbrances or impediments that, in the aggregate, do not
and will not materially interfere with its ability to conduct its business as
currently conducted. Except as set forth in Schedule 2.17(a), all such material
properties and assets, other than properties and assets in which the Company or
any of its Subsidiaries has leasehold interests, are free and clear of all
Liens, except for Liens that, in the aggregate, do not and will not materially
interfere with the ability of the Company and its Subsidiaries to conduct
business as currently conducted.
(b) Each of the Company and its Subsidiaries has complied in all
material respects with the terms of all material real property leases to which
it is a party and under which it is in occupancy, and all such leases are in
full force and effect. The Company and each of its Subsidiaries enjoy peaceful
and undisturbed possession under all such material real property leases.
2.18 Insurance Policies. The Company and each of its Subsidiaries
maintain in force insurance policies and bonds in such amounts and against such
liabilities and hazards as are consistent with industry practice. A complete
list of all material insurance policies, including deductibles applicable to
such policies, is set forth in Schedule 2.18. Neither the Company nor any of its
Subsidiaries is now liable, nor, to the Company's knowledge, will any of them
become liable, for any retroactive premium adjustment not reflected in the
September Balance Sheet. All policies are valid and enforceable and in full
force and effect, all premiums owing in respect thereof have been timely paid,
and neither the Company nor any of its Subsidiaries has received any notice of
premium increase or cancellation with respect to any of its insurance policies
or bonds. There are no claims pending as to which the insurer has denied
liability or is reserving its rights, and all claims have been timely and
properly filed. Within the last three years, neither the Company nor any of its
Subsidiaries has been refused any insurance coverage sought or applied for, and
the Company has no reason to believe that their existing insurance coverage
cannot be renewed as and when the same shall expire, upon terms and conditions
standard in the market at the time renewal is sought.
2.19 Patents, Trademarks, Trade Names, Etc. The Company and its
Subsidiaries own, or are licensed or otherwise have the right to use, all
patents, trademarks, trade names, copyrights, technology, know-how and processes
(collectively, "Intellectual Property") except where the lack of ownership,
license or right to use would not have a Material Adverse Effect. The
consummation of the transactions contemplated by this Agreement will not alter
or impair any Intellectual Property rights of the Company. Except as set forth
on Schedule 2.19, no claims have been asserted by, and to the knowledge of the
Company no claims are pending or have been threatened by, any Person to the use
of any Intellectual Property owned or used by the Company or its Subsidiaries or
challenging or questioning the validity or effectiveness of any license or
agreement relating thereto to which the Company or its Subsidiaries is a party
and which would have a Material Adverse Effect. Except as disclosed on Schedule
2.19, to the knowledge of the Company no Person infringes or has infringed upon
or acts or has acted adversely to any rights of the Company in and to
Intellectual Property owned or used by the Company.
2.20 Antitakeover Statute. From and after the date hereof, (i) Section
203 of the Delaware General Corporation Law (the "DGCL") will be inapplicable to
this Agreement and the Ancillary Agreements and the transactions contemplated
hereby and thereby, and (ii) any other takeover law in effect on the date hereof
which, if applicable, could affect the ability of Investor to consummate the
transactions contemplated hereby or have, either individually or in the
aggregate, a Material Adverse Effect or a material adverse effect on Investor,
shall be inapplicable to this Agreement and the Ancillary Agreements and the
transactions contemplated hereby and thereby.
2.21 No Required Vote of Company Stockholders. If the waiver from The
Nasdaq Stock Market Inc. contemplated in Article V is obtained, no vote of the
stockholders of the Company is required by any law, the Restated Certificate of
Incorporation or By-Laws of the Company or pursuant to the rules and regulations
of any Governmental Entity to approve the transactions contemplated by this
Agreement or the Ancillary Agreements.
2.22 Disclosure. This Agreement and the Schedules furnished by the
Company or any of its Subsidiaries pursuant hereto, taken as a whole, do not
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
contained herein, in the light of the circumstances under which they were made,
not misleading. The Company does not know of any information or fact which has
or would have a Material Adverse Effect which has not been disclosed to
Investor.
2.23 Acknowledgment Regarding Investors' Purchase of Securities. The
Company acknowledges and agrees that Investor is acting solely in the capacity
of an arm's length purchaser with respect to this Agreement, the Ancillary
Agreements and the transactions contemplated hereby and thereby. The Company
further acknowledges that Investor is not acting as a financial advisor of the
Company (or in any similar capacity) with respect to this Agreement, the
Ancillary Agreements and the transactions contemplated hereby and thereby and
any statement made by Investor or any of its respective representatives or
agents in connection with this Agreement, the Ancillary Agreements and the
transactions contemplated hereby and thereby is not advice or a recommendation
and is merely incidental to the Investor's purchase of securities hereunder. The
Company further represents to Investor that the Company's decision to enter into
this Agreement has been based solely on the independent evaluation by the
Company and its representatives.
2.24 No Integrated Offering. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf, has directly or
indirectly made any offers or sales in any security or solicited any offers to
buy any security under circumstances that would require registration under the
Securities Act of the issuance of the Securities or any of the Conversion Shares
to Investor. The issuance of the Securities and the Conversion Shares to
Investor will not be integrated with any other issuance of the Company's
securities (past, current or future) for purposes of any stockholder approval
provisions applicable to the Company or its securities.
2.25 Fairness Opinion. The Company has provided to Investor a copy of
the opinion of Xxxxxxx & Company, Inc. as to the fairness of the Investment
Transactions to the Company, which opinion has been executed and delivered to
the Board of Directors of the Company at or prior to the authorization and
approval by such board of the Investment Transactions.
2.26 Nasdaq Listing. None of (i) the entry into this Agreement or any
Ancillary Agreement or (ii) provided the waiver contemplated by Section 5.1(k)
is obtained, the consummation of the Investment Transactions, will violate or
conflict with any rule or regulation of Nasdaq or adversely affect the continued
listing of the Common Stock or the Shares on the Nasdaq National Market.
2.27 Year 2000. All computer software used by the Company and its
Subsidiaries in the conduct of their businesses is capable of accurately
processing, calculating, manipulating, and storing, and exchanging with other
software so capable, date/time data from, into and between the twentieth and
twenty-first centuries, including, without limitation, the years 1999 and 2000
and any leap year calculations, except as provided on Schedule 2.27 or where the
failure of such software to so perform will not result in a Material Adverse
Effect.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE INVESTOR
The Investor represents and warrants to the Company as follows:
3.1 Authorization and Validity. Investor is a duly organized and
validly existing limited liability company in good standing under the laws of
the State of Connecticut. Investor has the requisite corporate power and
corporate authority to execute and deliver this Agreement and all agreements and
documents contemplated hereby or executed in connection herewith, including
without limitation the Ancillary Agreements, and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this Agreement
and the Ancillary Agreements by Investor and the consummation by Investor of the
transactions contemplated hereby and thereby have been duly and validly
authorized by Investor, and no other proceedings on the part of Investor are
necessary to authorize this Agreement and the Ancillary Agreements or to
consummate the transactions contemplated hereby and thereby. This Agreement has
been, and any Ancillary Agreement at the time of execution will have been, duly
and validly executed and delivered by Investor, and (assuming this Agreement and
such Ancillary Agreements each constitutes a valid and binding obligation of the
Company) constitutes and will constitute the valid and binding obligations of
Investor, enforceable against Investor in accordance with their respective
terms, subject to applicable bankruptcy, insolvency, moratorium or other similar
laws relating to creditors' rights and general principles of equity.
3.2 Consents and Approvals; No Violation. Neither the execution and
delivery of this Agreement by such Investor nor the consummation of the
transactions contemplated hereby will result in any violation of or default
(with or without notice or lapse of time, or both) under, or give rise to a
right of termination, cancellation or acceleration of any obligation or to loss
of a material benefit under, or result in the creation of any Lien upon any of
the properties or assets of Investor under, (a) the organizational documents of
Investor, (b) any loan or credit agreement, note, bond, mortgage, indenture,
lease or other agreement, instrument, permit, concession, franchise or license
applicable to Investor or its properties or assets or (c) subject to the
governmental filings and other matters referred to in the following sentence,
any judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to Investor or its properties or assets, other than, in the case of
clauses (b) or (c), any such violations, defaults, rights or Liens that
individually or in the aggregate would not have a material adverse effect on the
ability of Investor to consummate the transactions contemplated hereby or by the
Ancillary Agreements. No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity, is required
by Investor in connection with the execution and delivery of this Agreement or
any of the Ancillary Agreements or the consummation of the transactions
contemplated hereby or thereby, except for any filing required under Sections
13(d) and 16(a) of the Exchange Act.
3.3 Private Placement . Investor is acquiring the Securities in a
transaction intended to be exempt from registration under the Securities Act by
virtue of the provisions of Section 4(2) of the Securities Act. Investor
understands and acknowledges that the Securities and any Conversion Shares must
be held indefinitely unless subsequently registered under the Securities Act and
any applicable state securities laws or unless an exemption from such
registration becomes or is available. Investor, and each member of Investor, is
an "accredited investor" as such term is defined in Rule 501(a) under the
Securities Act. Investor confirms that (i) it is familiar with the business of
the Company, (ii) it has had the opportunity to ask questions of officers and
directors of the Company and to obtain information about the business and
financial condition of the Company as it has reasonably requested, and (iii) it
has such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of the prospective investment in the
Securities. Investor acknowledges that all certificates representing Shares and
any Conversion Shares shall bear the following legend in addition to any other
legend required under applicable law or any Ancillary Agreement:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE AND
MAY NOT BE TRANSFERRED WITHOUT REGISTRATION UNDER THE SECURITIES ACT OR
STATE SECURITIES LAWS OR AN OPINION OF COUNSEL, SATISFACTORY TO THE
COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED.
3.4 Investment Intent. The Securities are being, and any Conversion
Shares will be, acquired by Investor for its own account, and not with a view to
any distribution thereof that would violate the Securities Act or the applicable
securities laws of any state. The Investor will not distribute the Securities or
any Conversion Shares in violation of the Securities Act or the applicable
securities laws of any state.
ARTICLE IV
COVENANTS
4.1 Conduct of Business of the Company.
(a) From the date of this Agreement to the Closing Date, unless
Investor has consented in writing thereto, the Company shall, and shall cause
each of its Subsidiaries to, (i) conduct its operations according to its usual,
regular and ordinary course of business consistent with past practice; (ii) use
its best efforts to preserve intact their business organizations and goodwill,
maintain in effect all existing qualifications, licenses, permits, approvals and
other authorizations, keep available the services of their officers and
employees and maintain satisfactory relationships with those persons having
business relationships with them; (iii) promptly notify Investor of the
existence of any breach of any representation or warranty contained herein or
the occurrence of any event that would cause any representation or warranty
contained herein no longer to be true and correct; and (iv) promptly deliver to
Investor true and correct copies of any report, statement or schedule filed with
the SEC subsequent to the date of this Agreement, any internal monthly reports
prepared for or delivered to the Board of Directors after the date hereof and
monthly financial statements for the Company and its Subsidiaries for and as of
each month end subsequent to the date of this Agreement.
(b) From and after the date of this Agreement to the Closing
Date, unless Investor has consented in writing thereto, the Company shall not,
and shall not permit any of its Subsidiaries to, (i) amend its Restated
Certificate of Incorporation or Bylaws or comparable governing instruments, or
propose any amendments to the foregoing, (ii) issue, sell or pledge any shares
of its capital stock or other ownership interest in the Company (other than
issuances of Common Stock upon the exercise of outstanding options granted
pursuant to a Stock Option Plan or pursuant to the Stock Purchase Plan) or any
of the Subsidiaries, or any securities convertible into or exchangeable for any
such shares or ownership interest, or any rights, warrants or options to acquire
or with respect to any such shares of capital stock, ownership interest, or
convertible or exchangeable securities; or accelerate any rights to convert or
exchange or acquire any securities of the Company or any of its Subsidiaries for
any such shares or ownership interest; (iii) effect any stock split or otherwise
change its capitalization as it exists on the date hereof; (iv) grant, confer or
award any option, warrant, convertible security or other right to acquire any
shares of its capital stock or take any action to cause to be exercisable any
otherwise unexercisable option under any existing stock option plan; (v)
declare, set aside or pay any dividend or make any other distribution or payment
with respect to any shares of its capital stock or other ownership interests
(other than such payments by a wholly-owned Subsidiary); (vi) directly or
indirectly redeem, purchase or otherwise acquire any shares of its capital stock
or capital stock of any of its Subsidiaries; (vii) sell, lease or otherwise
dispose of any of its assets (including capital stock of Subsidiaries), except
for (A) sales of inventory in the ordinary course of business, (B) dispositions
of other assets in an amount not to exceed $100,000 in book value in the
aggregate and (C) the sale by the Company to IRE-Xxxxx Group of certain real
estate in Sturbridge, Massachusetts together with the Company's
telecommunications business, all substantially upon the terms and conditions set
forth in a letter between the Company and such buyer dated December 8, 1998 and
previously provided to Investor (any such sale or disposition described in the
preceding clauses (A), (B) and (C) a "Permitted Sale"); (viii) settle or
compromise any pending or threatened Litigation, other than settlements which
involve solely the payment of money (without admission of liability) not to
exceed $250,000 in the aggregate; (ix) acquire by merger, purchase or any other
manner, any business or entity or otherwise acquire any assets that are
material, individually or in the aggregate, to the Company and its Subsidiaries
taken as a whole, except for purchases of inventory, supplies or capital
equipment in the ordinary course of business under the Company's existing credit
agreement; (xi) assume, guarantee or otherwise become liable or responsible
(whether directly, contingently or otherwise) for the obligations of any other
person except wholly owned Subsidiaries of the Company; (xii) make or forgive
any loans, advances or capital contributions to, or investments in, any other
person; (xiii) make any Tax election or settle any Tax liability, other than
those relating to audits described in Schedule 2.12 provided such settlements in
the aggregate will not exceed reserves reflected in the September Balance Sheet
by an amount that would have a Material Adverse Effect; (xiv) waive, amend or
allow to lapse any term or condition of any confidentiality or "standstill"
agreement to which the Company is a party; (xv) grant any stock related or
performance awards; (xvi) enter into any new employment, severance, consulting
or salary continuation agreements with any officers, directors or employees or
grant any increases in compensation or benefits to employees other than
increases in the ordinary course of business in accordance with regularly
scheduled periodic increases; (xvii) adopt, amend or terminate any employee
benefit plan or arrangement; (xviii) incur any fees or expenses in connection
with the transactions contemplated by this Agreement in excess of $350,000
(which amount shall not include any Expense Fee payable to Investor pursuant to
Section 6.3(a)); (xix) make any material changes in the type or amount of their
insurance coverages; (xx) make any new capital expenditures other than in
accordance with the Company's existing budget and not to exceed $25,000 for any
single expenditure and $100,000 in the aggregate; and (xxi) agree in writing or
otherwise to take any of the foregoing actions or to take any action which would
make any of the Company's representations or warranties in this Agreement untrue
or incorrect as if made at any time from the date of this Agreement to the
Closing Date.
4.2 No Solicitation.
(a) The Company shall not, nor shall it permit any of its
Subsidiaries to, nor shall it authorize or permit any officer, director or
employee of or any investment banker, attorney or other advisor or
representative of the Company or any of its Subsidiaries to, directly or
indirectly, (i) solicit, initiate or encourage (including by way of furnishing
non-public information), 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 Sale (as hereinafter defined) or (ii) participate in any
discussions or negotiations regarding, any Sale; provided, however, that as a
result of the exercise by the Board of Directors of fiduciary obligations under
applicable law (as determined in good faith by the Board of Directors and based
on the advice of outside counsel), the Company may upon receipt by the Company
of an unsolicited offer to effect a Sale that would constitute a Superior
Proposal (as hereinafter defined), following delivery to Investor of the notice
required pursuant to Section 4.2(d), participate in negotiations regarding such
proposed Sale and furnish information with respect to the Company pursuant to a
customary confidentiality agreement. Without limiting the foregoing, it is
understood that any violation of the restrictions set forth in the preceding
sentence by any officer, director or employee of the Company or any of its
Subsidiaries or any investment banker, attorney or other advisor or
representative of the Company or any of its Subsidiaries, whether or not such
person is purporting to act on behalf of the Company or any of its Subsidiaries
or otherwise, shall be deemed to be a breach of this Section 4.2(a) by the
Company. For purposes of this Agreement, "Sale" means any merger or other
business combination involving the Company or any of its Subsidiaries or any
acquisition in any manner (including through a joint venture with the Company),
directly or indirectly, of any equity interest in the Company or any interest in
the outstanding voting securities of the Company (except pursuant to the Stock
Option Plans or Stock Purchase Plan) or any of the assets of the Company or any
of its subsidiaries, except for Permitted Sales.
(b) Neither the Board of Directors nor any committee thereof
shall (i) withdraw or modify, or propose to withdraw or modify, in a manner
adverse to Investor, the approval or authorization by such Board of Directors or
any such committee of the transactions contemplated hereby, (ii) approve or
recommend, or propose to approve or recommend, any Sale or (iii) enter into any
agreement with respect to any Sale. Notwithstanding the foregoing, in the event
the Board of Directors of the Company receives an unsolicited offer or proposal
that, in the exercise of its fiduciary obligations (as determined in good faith
by the Board of Directors and based on the advice of outside counsel), it
determines to be a Superior Proposal, the Board of Directors may (subject to the
following sentences) withdraw or modify its approval or recommendation of this
Agreement, approve or recommend any such Superior Proposal, or terminate this
Agreement in order to enter into an agreement with respect to such a Superior
Proposal, in each case at any time after the fifth business day following the
Investor's receipt of written notice (a "Notice of Superior Proposal") advising
Investor that the Board of Directors has received a Superior Proposal,
specifying the material terms and conditions of such Superior Proposal and
identifying the person making such Superior Proposal. The Company may take any
of the foregoing actions pursuant to the preceding sentence only if (i) the
Company is not otherwise in material breach of this Agreement, (ii) the Company
pays to Investor the Expense Fee and the Termination Fee (each as hereinafter
defined) to the extent required by Section 6.3(a) and Section 6.3(b),
respectively, and (iii) the Board of Directors has considered in good faith any
alternative proposal delivered by the Investor to the Company within the
five-day period following Investor's receipt of the Notice of Superior Proposal.
For purposes of this Agreement, a "Superior Proposal" means any bona fide
proposal for the acquisition, whether by the sale or issuance of securities or
pursuant to an agreement of merger or consolidation, of more than 50% of the
outstanding voting securities of the Company (as determined prior to giving
effect to such proposed transaction), or the acquisition of more than 50% of the
consolidated assets of the Company measured by book value, in either case on
terms which the Board of Directors determines in its good faith reasonable
judgment (and based on the written advice of a financial advisor of nationally
recognized reputation) to be more favorable to the Company's stockholders than
the transactions contemplated hereby.
(c) Nothing contained in this Section 4.2 shall prohibit the
Company from at any time taking and disclosing to its stockholders a position
contemplated by Rule 14e-2(a) promulgated under the Exchange Act, provided,
however, that neither the Company nor its Board of Directors shall, except as
permitted by paragraph (b) of this section, propose to approve or recommend a
Sale.
(d) In addition to the obligations of the Company set forth in
paragraph (b) above, the Company shall promptly (but in any event within one
calendar day) advise Investor orally and in writing of any request for
information in connection with any Sale, or any inquiry with respect to or which
could lead to any Sale, the material terms and conditions of such request,
proposal or inquiry, and the identity of the person making any such proposal or
inquiry. The Company will keep Investor fully informed of the status and details
of any such requests, proposal or inquiry.
4.3 Access to Information. Between the date of this Agreement and the
Closing Date, the Company will upon reasonable notice (i) give Investor and its
authorized representatives access during regular business hours to all of the
Company's plants, offices, warehouses and other facilities and to all books and
records of it, (ii) permit Investor to make such inspections as they may require
(and the Company shall cooperate with Investor in any inspections, including,
without limitation, environmental due diligence), and (iii) cause its officers
and those of its Subsidiaries to furnish Investor with such financial and
operating data and other information with respect to the business and properties
of the Company and its Subsidiaries as Investor may from time to time request.
4.4 Nasdaq Listing. The Company will use its reasonable best efforts
to insure that the Shares and the Conversion Shares issuable upon conversion of
the Warrants are listed or authorized to be quoted on the Nasdaq National Market
or listed on any national securities exchange on which shares of Common Stock
are then listed.
4.5 Board of Directors Matters.
(a) On or before the Closing Date, the Company shall take such
action as is necessary to increase the size of its Board of Directors to seven
directors and shall cause three designees of Investor, who shall be designated
in writing to the Company within three business days prior to the Closing, to be
elected to the three newly created vacancies on the Board of Directors, such
elections to be effective as of the Closing Date. During such time after the
Closing as Investor and its affiliates shall continue to own in the aggregate
not less than 50% of its and their Initial Common Holdings, the Company will
support the nomination of, and the Company's nominating committee (or other
board committee exercising a similar function) shall recommend to the Board of
Directors, and the Board of Directors will use its good faith efforts to ensure,
that the slate of nominees recommended by the Board of Directors to stockholders
for election as directors at each annual meeting of stockholders of the Company,
commencing with the first annual meeting of stockholders after the date of this
Agreement, includes at least the number of designees of Investor equal to one
less than the number of directors that would constitute a majority of such board
following such election. In the event any designee of Investor hereunder shall
cease to serve as a director for any reason, the Board of Directors shall fill
the vacancy resulting thereby with a person designated by Investor. Any nominee
or designee to the Board of Directors of Investor or the Company shall be
reasonably satisfactory to the other party, and each party shall afford the
other a reasonable opportunity to review and comment upon the qualifications of
any such nominee or designee prior to recommending such nominee or designee for
election to the Board of Directors. During such time as Investor is entitled to
have designees on the Board of Directors, the Investor shall also be entitled to
have a designee serve on each committee of the Board of Directors, including any
special committee, and the Company agrees to cause such designee to be so
appointed; provided, however, that if such designee would not be considered
"independent" or "disinterested" or the equivalent (i) for purposes of any
applicable rule of The Nasdaq Stock Market, Inc. or any provision of the U.S.
federal securities laws (and the rules and regulations thereunder) or the Code
or (ii) for purposes of any special committee formed in connection with any
transaction or potential transaction involving the Company and Investor, then
such designee shall not be required to be appointed to such committee. As used
above, "Initial Common Holdings" means the aggregate of the number of Shares and
the number of Conversion Shares (as if issued on the Closing Date).
(b) Following the date hereof and prior to the Closing, the
Company shall use its reasonable best efforts to cause the coverage limit under
its current directors and officers insurance policy covering the directors and
officers of the Company immediately following the Closing and all former
directors and officers (the "D&O Policy") to be increased to at least $20
million, with terms that are substantially similar to those in the Company's
existing policy, but excluding claims made under the existing policy prior to
Closing.
4.6 Reasonable Best Efforts. (a) Subject to the terms and conditions
contained herein, the Company and Investor agree to use their reasonable best
efforts to take, or cause to be taken, all appropriate action, and to do, or
cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the transactions
contemplated by this Agreement. In case at any time after Closing Date any
further action is necessary or desirable to carry out the purposes of this
Agreement, the proper officers and directors of each party to this Agreement
shall take all such necessary action. Such reasonable best efforts shall
include, without limitation, (i) the obtaining of all necessary consents,
approvals or waivers from third parties and governmental authorities necessary
to the consummation of the transactions contemplated by this Agreement and the
Ancillary Agreements and (ii) opposing vigorously any litigation or
administrative proceeding relating to this Agreement and the Ancillary
Agreements or the transactions contemplated hereby or thereby, including,
without limitation, promptly appealing any adverse court or agency order.
Notwithstanding the foregoing or any other provisions contained in this
Agreement to the contrary, neither Investor nor any of its affiliates shall be
under any obligation of any kind to enter into any negotiations or to otherwise
agree with any Governmental Entity, including but not limited to any
governmental or regulatory authority with jurisdiction over the enforcement of
any applicable federal, state, local and foreign antitrust, competition or other
similar laws, or any other party to sell or otherwise dispose of, hold separate
(through the establishment of a trust or otherwise) particular assets or
categories of assets or businesses of any of the Company, Investor or any of
Investor's affiliates.
(b) The Company shall give and make all required notices and
reports to the appropriate persons with respect to the Permits and Environmental
Permits that may be necessary for the consummation of the Investment
Transactions.
(c) The Company and its Board of Directors shall (i) take all
action necessary to ensure that no state takeover statute or similar statute or
regulation is or becomes applicable to this Agreement or any of the transactions
hereby and (ii) if any state takeover statute or similar statute or regulation
becomes applicable to this Agreement or any of the transactions contemplated
hereby, take all action necessary to ensure that the 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 transactions contemplated by this Agreement.
4.7 Public Announcements. The Company and Investor shall consult with
each other before issuing any press release or otherwise making any public
statement with respect to the transactions contemplated hereby and shall not
issue any such press release or make any such public statement prior to such
consultation.
4.8 Stockholder Litigation. Each of the parties to this Agreement
shall give the other the opportunity to participate in the defense or settlement
of any stockholder litigation relating to any of the transactions contemplated
by this Agreement, whether before of after the Closing. No settlement in any
such litigation shall be agreed to without Investor's consent, which consent
shall not be unreasonably withheld; and no settlement requiring a payment by a
director shall be agreed to without such director's consent.
4.9 Stock Options. The Company will not take any action to accelerate
the exercisability or vesting of any outstanding options to purchase Common
Stock or modify any other terms of such options as a result of the transactions
contemplated hereby.
4.10 Certain Approval Rights. The Company shall not, without the
consent of the Required Directors (as defined below) at the time of such
proposed action, (a) amend, alter or repeal any provision of the Restated
Certificate of Incorporation or Bylaws of the Company, or file any certificate
of designation relating to any preferred stock; (b) sell, convey, transfer,
abandon, lease or otherwise dispose of or encumber all or substantially all of
its property or business or effect a material change in the nature of its
business; (c) sell, convey, transfer, abandon, lease or otherwise dispose of or
encumber any of the capital stock of Leisegang Medical, Inc. or Optical Filter
Corporation, or sell all or substantially all of the property or business of
either of those corporations, whether or not they constitute all or
substantially all of the property or business of the Company, (d) purchase,
lease or otherwise acquire all or substantially all of the properties or assets
of any other corporation or entity (whether through the purchase of stock or
assets); (e) merge or consolidate with or into any other corporation,
corporations, entity or entities; (f) voluntarily dissolve, liquidate, or wind
up or carry out any partial liquidation or dissolution or transaction in the
nature of a partial liquidation or dissolution; (g) issue any shares of Common
Stock or any class or series of capital stock, or any options, warrants, bonds,
debentures, notes or other obligations or securities convertible into or
exchangeable for, or having optional rights to purchase, Common Stock (other
than issuances of Common Stock upon the exercise of outstanding options or
future awards granted pursuant to a Stock Option Plan or pursuant to the Stock
Purchase Plan) or adopt any new Stock Option Plan or Stock Appreciation Plan,
amend any Stock Option Plan or amend or reprice any award or grant thereunder or
(h) incur any indebtedness (other than accounts payable arising in the ordinary
course of business) except as permitted, at the time of such incurrence, by the
Company's existing credit facility as amended or restated at such time;
provided, however, that the supermajority voting requirements provided for in
this Section 4.10 shall terminate on the first date that Investor and its
Permitted Transferees beneficially own in the aggregate less than 98% of their
Initial Common Holdings. On or before the Closing Date, the Company shall take
such action as is necessary to cause the Bylaws of the Company to be amended so
as to permit, pursuant to Section 141(b) of the Delaware General Corporation
Law, the supermajority voting requirements of this Section 4.10, and to ensure
that, so long as this Section 4.10 shall be in effect, the provision in the
Bylaws as so amended relating to such voting requirements may not be amended
without the affirmative vote of the Required Directors. "Required Directors"
means that number of directors of the Company's Board of Directors equal to the
quotient obtained by dividing (x) five times the number of directors
constituting all directors at the time of such determination by (y) seven, and,
if such quotient is not a whole number, rounding such quotient up to the nearest
whole number so that, for example, if the number of all directors on the board
is seven, the number of Required Directors would be five, and if the number of
all directors is nine, the number of Required Directors would be seven.
4.11 No Integration. The Company shall not make any offers or sales of
any security (other than the securities to be issued pursuant to the Investment
Transactions) prior to the Closing under circumstances that would require
registration of the securities being offered or sold hereunder under the
Securities Act or cause the offering of securities being offered or sold
hereunder to be integrated with any other offering of securities by the Company
for the purpose of any stockholder approval provision applicable to the Company
or its securities.
4.12 Nasdaq Waiver Application. On or before December 23, 1998, the
Company shall promptly prepare and file with The Nasdaq Stock Market, Inc.
("Nasdaq"), a proper application to obtain the waiver of the requirement of any
vote of the stockholders of the Company under Nasdaq Rule 4310(c)(25), and any
other applicable rules and regulations. The Company shall afford Investor a
reasonable opportunity to review and participate in the preparation of such
application, and shall provide prompt notice to Investor of the filing of
application and any related response or comments of Nasdaq. If and when the
Company receives such waiver, the Company shall promptly mail to all the
stockholders of the Company the notice required by Rule 4310(c)(25)(H)(ii)(b) of
the Nasdaq Rules.
ARTICLE V
CONDITIONS TO CONSUMMATION OF THE INVESTMENT TRANSACTION
5.1 Conditions to Investor's Obligations for the Closing. The
obligations of Investor to effect the Investment Transactions are subject to the
satisfaction or written waiver of the following conditions:
(a) the representations and warranties of the Company contained
in this Agreement (each of which, for all purposes of this paragraph, shall be
read as though none contains any qualification as to materiality or Material
Adverse Effect) shall be true and correct in all material respects on and as of
the Closing Date (irrespective of any notice delivered after the date hereof);
(b) the Company shall have performed in all material respects all
of its obligations under this Agreement required to be performed prior to the
Closing Date;
(c) there shall not have occurred after the date hereof any
Material Adverse Effect;
(d) Investor shall have received a certificate of the President
of the Company, and such other officers of the Company as are designated by
Investor, on behalf of the Company, certifying as to the fulfillment of the
conditions set forth in clauses (a), (b) and (c) above;
(e) no statute, rule, regulation, judgment, order or injunction
shall be enacted, entered, promulgated or enforced, threatened or proposed (i)
challenging the transactions contemplated hereby, seeking to restrain or
prohibit the Investment Transactions or any other transactions contemplated
hereby or seeking any damages from the Company or Investor, (ii) seeking to
impose limitations on the ability of Investor to acquire or hold, or exercise
full rights of ownership of, any Securities or the Conversion Shares, including
the right to vote the Shares (or Conversion Shares), or (iii) which otherwise
would be reasonably likely to have a Material Adverse Effect;
(f) Investor shall have been provided with evidence satisfactory
to the Investor in its discretion that the Board of Directors has approved the
transactions contemplated by this Agreement for purposes of Section 203 of the
DGCL;
(g) Investor shall have received a certificate, dated the Closing
Date, duly executed by the Secretary of the Company certifying as to (i) the
attached copy of resolutions of the Board of Directors authorizing and approving
the execution, delivery and performance of this Agreement and the Ancillary
Agreements and the consummation of the transactions contemplated hereby and
thereby and stating that such resolutions have not been modified, amended,
revoked or rescinded and (ii) the incumbency, authority and specimen signature
of each officer of the Company executing this Agreement and any Ancillary
Agreement and any other instrument delivered in connection herewith.
(h) Investor shall have received a certificate of the Company's
organization, valid existence and good standing as a domestic corporation in the
State of Delaware as of a date not more than five days prior to the Closing
Date;
(i) Investor shall have received an opinion of counsel to the
Company, dated the Closing Date, in the form attached hereto as Exhibit D;
(j) the Company shall have received (and furnished to Investor
evidence thereof reasonably satisfactory to Investor) any necessary or required
approvals or consents from all Governmental Entities and other third parties
necessary or required to complete the transactions contemplated by this
Agreement and the Ancillary Agreements, and such approvals and consents shall
not have been withdrawn or expired as of the Closing Date;
(k) the Company shall have received a waiver from The Nasdaq
Stock Market, Inc. as to any requirement for a vote of the stockholders of the
Company in connection with the Investment Transactions;
(l) (1) the three designees of Investor shall have been elected
to the Board of Directors, (2) the Company shall have amended its Bylaws to
permit the supermajority voting requirements of directors contemplated by
Section 4.10, and (3) the Company shall have entered into an Indemnification
Agreement with each of such designees providing benefits no less favorable to
the indemnitees than are provided under the Indemnification Agreement previously
entered into by the Company and its directors;
(m) with respect to the Loan Agreement, dated January 27, 1998,
between the Company and Bank Boston, N.A. ("Bank Boston") and the Master Lease
Agreement, dated March 20, 1998, between the Company and BancBoston Leasing,
Inc. (with Bank Boston, the "Lenders") (each a "Loan Agreement" and
collectively, the "Loan Agreements"), Investor shall have received evidence
satisfactory to it that (i) the Company has obtained from Lenders (A) a waiver
of all defaults or events of default that occurred under the Loan Agreements on
or before September 30, 1998 or that are continuing and (B) all consents and
approvals necessary to consummate the transactions contemplated by this
Agreement and the Ancillary Agreements and (ii) the Loan Agreements have been
amended such that (A) the Company's independent auditors will not be precluded
from issuing reports in connection with the Company's financial statements
without qualification as to the Company's status as a going concern, (B) without
further modification, all of the Company's outstanding debt under the Loan
Agreements as at September 30, 1999 may be accounted for on the Company's
consolidated balance sheets as of such date, in accordance with generally
accepted accounting principles, as long-term debt (except for current maturities
and any amounts accelerated as a result of defaults or events of default after
the Closing Date) and (C) the terms of such Loan Agreements, as amended,
including without limitation any financial covenants and financial ratios, would
not, given the financial position and business prospects of the Company at and
following the Closing, reasonably be expected to result in a default or an event
of default under either of the Loan Agreements, or result in facts or
circumstance that, with the passage of time or the giving or notice or both,
would result in a default or an event of default under either of the Loan
Agreements;
(n) the Company shall have obtained the additional coverage under
the D&O Policy as provided in Section 4.5(b);
(o) no Litigation (i) by or on behalf of the stockholders or
former stockholders of the Company or by or on behalf of the Company
derivatively or (ii) which could result in a Material Adverse Effect, in
addition in either case to that disclosed on Schedule 2.9, shall have been
initiated, nor shall any existing Litigation so disclosed have been amended in a
manner so as to materially increase the aggregate potential liability of the
Company, its Subsidiaries and its or their respective directors and officers;
(p) Investor shall have received a certificate from the transfer
agent for the Common Stock certifying the number of shares of Common Stock
issued and outstanding as of the close of business on the day before the Closing
Date, which number shall not be more than 8,071,250 increased by the number of
shares of Common Stock issued in compliance with Section 4.1(b) hereof; and
(q) the Company shall have delivered certificates representing
the Securities to Investor.
5.2 Conditions to the Company's Obligations for the Closing. The
obligations of the Company to effect the Investment Transactions are subject to
the satisfaction or written waiver of the following conditions:
(a) the representations and warranties of Investor contained in
this Agreement shall be true and correct in all material respects, on and as of
the Closing Date (irrespective of any notice delivered after the date hereof),
and Investor shall have performed in all material respects all of its
obligations under this Agreement required to be performed prior to the Closing
Date; and
(b) the Company shall have received a certificate, dated the Closing Date, duly
executed by the president or another executive officer of Investor, certifying
as to the fulfillment of the condition set forth in clause (a) above;
(c) the Company shall have received a certificate, dated the Closing Date, duly
executed by the president or other executive officer of Investor, certifying as
to (i) the correctness and completeness of a copy the Articles of Organization
of Andlinger Capital XIII LLC, which shall be attached as an exhibit to such
certificate, (ii) the due authorization and approval by Investor of the
Investment Transactions and any other transactions contemplated hereby, (iii)
such officer's incumbency, and the incumbency of any other officer of Investor
who has executed this Agreement or any Ancillary Agreement, and (iv) the
authority of each of them to execute, deliver and perform on behalf of Investor
and in Investor's name this Agreement and the Ancillary Agreements and to
consummate the transactions contemplated hereby and thereby;
(d) the Company shall have received a waiver from The Nasdaq Stock
Market, Inc. as to any requirement for a vote of the stockholders of the Company
in connection with the Investment Transactions; and
(e) Investor shall have delivered the Purchase Price to the Company.
ARTICLE VI
TERMINATION; AMENDMENT; INDEMNITY
6.1 Termination. This Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to the Closing Date:
(a) by mutual written consent of the Company and Investor;
(b) by either the Company or Investor:
(i) if the Closing does not occur by 5:00 p.m. Eastern Time
on January 31, 1999; provided, however, that the right to terminate this
Agreement pursuant to this Section 6.1(b)(i) shall not be available to any party
whose failure to fulfill any of its obligations under this Agreement results in
the failure of this condition;
(ii) if any court of competent jurisdiction or any other
governmental body shall have issued an order, decree or ruling or taken any
other action permanently enjoining, restraining or otherwise prohibiting the
Investment Transactions and the other transactions contemplated hereby and such
order, decree, ruling or other action shall have become final and nonappealable;
or
(c) by Investor (i) if the Board of Directors of the Company
withdraws or modifies, or proposes to withdraw or modify, in a manner adverse to
Investor, the approval or authorization by such Board of Directors or any
committee of such board of the transactions contemplated by this Agreement, or
if such board approves or recommends, or proposes to approve or recommend, any
Sale or if such board enters into any agreement with respect to any Sale, (ii)
if the Company fails to perform in any material respect any of its obligations
under this Agreement, and such failure has not been cured within seven business
days after written notice of the failure from Investor to the Company, (iii) at
any time when the condition set forth in Section 5.1(a) is not satisfied
(regardless of whether such decision is based on any event or circumstance
Investor knows or could be deemed to know as of the date hereof), provided,
that, if such non-satisfaction is curable, Investor may terminate pursuant to
this clause (iii) only if such condition remains unsatisfied seven business days
after Investor gives notice of such non-satisfaction to the Company or (iv) if
shares of Common Stock are no longer listed or authorized for quotation on the
Nasdaq National Market, or there is some reasonable likelihood that the Common
Stock, after giving effect to the transactions contemplated hereby, will no
longer be listed or authorized for quotation on the Nasdaq National Market.
(d) by the Company (i) as provided in Section 4.2 in respect of a
Superior Proposal (provided the Company shall have paid the Termination Fee and
the Expense Fee to the extent required by Section 6.3(b)), (ii) if Investor
fails to perform in any material respect any of its obligations under this
Agreement, and such failure has not been cured within seven business days after
written notice of the failure from Company to Investor or (iii) if Investor
breaches in any material respect any of its representations and warranties
hereunder.
6.2 Effect of Termination. In the event of the termination and
abandonment of this Agreement pursuant to Section 6.1, this Agreement, except
for the provisions of this Section 6.2 and Sections 6.3, 6.5, 6.6 and 7.10 (and
except for any other sections, schedules or provisions referred to in such
sections to the extent necessary to give them effect) shall forthwith become
void and have no effect, without any liability on the part of any party or its
directors, officers or shareholders, provided, however, that nothing in this
Section 6.2 shall relieve any party to this Agreement of liability for breach of
this Agreement.
6.3 Termination Fee and Expense Fee.
(a) In addition to any other amounts which may be payable or
become payable pursuant to this Agreement, the Company shall, at the Closing and
from time to time after the Closing, or in the case of any termination of this
Agreement other than termination by the Company pursuant to Section 6.1(d)(ii)
or (iii), promptly, but in no event later than five business days after such
termination, reimburse Investor for all out-of-pocket expenses and fees
(including, without limitation, fees payable to all banks, investment banking
firms and other financial institutions, and their respective agents and counsel,
and all fees of counsel, accountants, experts and consultants to Investor and
its affiliates), in an amount not to exceed $100,000 except as provided in
Section 6.3(d), whether incurred prior to, on or after the date hereof, in
connection with the Investment Transactions and the consummation of all
transactions contemplated by this Agreement (such fee, the "Expense Fee").
(b) If this Agreement shall have been terminated by Investor
pursuant to Section 6.1(c)(i) or by the Company pursuant to Section 6.1(d)(i),
and on or prior to one year from the date hereof any Superior Proposal shall
have been consummated, then the Company shall promptly, but in no event later
than five business days after the event giving rise to such payment, pay
Investor a fee of $600,000 in cash (the "Termination Fee"), which amount shall
be payable in same day funds. No amount payable pursuant to any of the other
provisions of this Agreement shall reduce the amount of the Termination Fee
payable pursuant to this Section 6.3(b).
(c) In addition to the other provisions of this Section 6.3, in
the event an Expense Fee or Termination Fee is or becomes payable, the Company
agrees promptly, but in no event later than five business days following written
notice thereof, together with related bills or receipts, to reimburse Investor
for all reasonable out-of-pocket costs, fees and expenses, including, without
limitation, the reasonable fees and disbursements of counsel and the expenses of
litigation, incurred in connection with collecting such Expense Fee and
Termination Fee as a result of any breach by the Company of its obligations
under this Section 6.3.
(d) If expenses are incurred that would be included in the
Expense Fee but for the $100,000 limitation set forth in Section 6.3(a), and
such expenses are in any way related to any Superior Proposal received by the
Company (including any tender offer made to stockholders of the Company), then
the Expense Fee payable hereunder shall be increased by the amount of such
expenses, but only to the extent that the proceeds received by the Company or
its stockholders from the related transaction exceed the Purchase Price payable
hereunder.
6.4 Amendment. This Agreement may not be amended except by an
instrument in writing signed by all the parties.
6.5 Company's Obligation to Indemnify. From and after the Closing, and
subject to the limitations contained in Sections 6.10(a) and 6.10(b), the
Company shall indemnify, defend and hold harmless Investor, its affiliates and
each person, if any, who controls Investor, or any of its affiliates, and the
respective agents, employees, officers and directors of Investor, its affiliates
and any controlling person of any of them (the "Investor Indemnified Parties"),
to the fullest extent lawful, from and against any and all claims, losses,
settlements, fines, liabilities, damages, deficiencies, costs or expenses
(including, as incurred and without limitation, reasonable costs of
investigating, preparing or defending any of the foregoing) (any of the
foregoing, "Losses") suffered, sustained or incurred, directly or indirectly, or
required to be paid by, any Investor Indemnified Party, but only to the extent
that such Losses are due to, based upon, arise out of or otherwise relate to (a)
any inaccuracy in, or any breach of, any representation or warranty of the
Company contained in this Agreement (or any disclosure schedules hereto or any
certificate or other documents delivered on behalf of the Company hereunder),
(b) any breach of any covenant or agreement of the Company contained in this
Agreement or (c) in connection with any Litigation by stockholders or on behalf
of stockholders of the Company, or by or on behalf of the Company derivatively,
which in any such case arises as a result of the entry into this Agreement or
the consummation of the transactions contemplated hereby, provided, that, the
Company shall have no obligation hereunder to any Investor Indemnified Party
with respect to Losses arising from the gross negligence, bad faith or willful
misconduct on the part of such Investor Indemnified Party. With respect to the
indemnity provided by clause (c), no waiver by Investor of the condition set
forth in Section 5.1(o) shall be deemed to waive the application of such
indemnity.
6.6 Investor's Obligation to Indemnify. From and after the Closing,
and subject to the limitations contained in Sections 6.10(a) and 6.10(c),
Investor shall indemnify, defend and hold harmless the Company and its
affiliates, and their respective directors, officers, employees and
representatives (each, a "Company Indemnified Party"), from and against any and
all Losses suffered, sustained, incurred or required to be paid by any such
Company Indemnified Party due to, based upon, arising out of or otherwise in
respect of (a) any inaccuracy in, or any breach of, any representation or
warranty of Investor contained in this Agreement (or any disclosure schedules
hereto or any certificate or other document delivered on behalf of Investor
hereunder) or (b) any breach of any covenant or agreement of Investor contained
in this Agreement.
6.7 Indemnity Procedures for Third Party Claims. The obligations and
liabilities of any party hereto against which indemnification is sought
hereunder with respect to claims resulting from the assertion of liability by
third parties shall be subject to this Section 6.7.
(a) Promptly (but in no event later than 30 days) after receipt
by any indemnified party hereunder (an "Indemnified Party") of notice of any
demand or claim or the commencement (or threatened commencement) of any action,
proceeding or investigation (an "Asserted Liability") that could reasonably be
expected to result in a Loss, the Indemnified Party shall give written notice
thereof (a "Claims Notice") to any other party obligated to provide
indemnification pursuant to Section 6.5 or 6.6 (each, an "Indemnifying Party").
Each Claims Notice shall describe the Asserted Liability in reasonable detail,
and shall indicate the amount (estimated, if necessary) of the Loss that has
been or may be suffered by the Indemnified Party. The rights of any Indemnified
Party to be indemnified hereunder shall not be adversely affected by its failure
to give, or its failure to timely give, a Claims Notice with respect thereto
unless, and if so, only to the extent that, the Indemnifying Party is prejudiced
thereby.
(b) The Indemnifying Party may elect to compromise or defend, at
its own expense and by its own counsel, any Asserted Liability; provided,
however, that if the parties in any action shall include both an Indemnifying
Party and an Indemnified Party, and the Indemnified Party shall have reasonably
concluded that counsel selected by the Indemnifying Party has a conflict of
interest because of the availability of different or additional defenses to the
Indemnified Party, the Indemnified Party shall have the right to select separate
counsel to participate in the defense of such action on its behalf, at the
expense of the Indemnifying Party. If the Indemnifying Party elects to
compromise or defend such Asserted Liability, it shall within 30 days (or
sooner, if the nature of the Asserted Liability so requires) notify the
Indemnified Party of its intent to do so. An Indemnifying Party shall not,
without the prior written consent of the Indemnified Party, (i) settle or
compromise any Asserted Liability or consent to the entry of any judgment which
does not include as an unconditional term thereof the delivery by the claimant
or plaintiff to the Indemnified Party of a written release from all liability in
respect of such Asserted Liability or (ii) settle or compromise any Asserted
Liability in any manner that would reasonably be expected to have a material
adverse effect on the Indemnified Party. If the Indemnifying Party elects not to
compromise or defend the Asserted Liability or fails to notify the Indemnified
Party of its election as herein provided, the Indemnified Party may pay,
compromise or defend such Asserted Liability. The Indemnified Party and the
Indemnifying Party may participate, at their own expense, in the defense of any
Asserted Liability as to which such party does not control the defense or
settlement. If the Indemnifying Party chooses to defend any claim, the
Indemnified Party shall, subject to receipt of a reasonable confidentiality
agreement, make available to the Indemnifying Party any books, records or other
documents within its control, and the reasonable assistance of its employees,
for which the Indemnifying Party shall be obliged to reimburse the Indemnified
Party the reasonable out-of-pocket expenses of making them available.
6.8 Indemnity Procedures for Claims by the Parties. In the event that
any party incurs or suffers any Losses with respect to which indemnification may
be sought by such party pursuant to this Article VI (other than in respect of
third party claims), the Indemnified Party must assert the claim by a Claims
Notice to the Indemnifying Party. The Claims Notice must state the nature and
basis of the claim in reasonable detail based on the information available to
the Indemnified Party. Each Indemnifying Party to whom a Claims Notice is given
shall respond to any Indemnified Party that has given a Claims Notice (a "Claim
Response") within 30 days (the "Response Period") after the date that the Claims
Notice is received. Any Claim Response shall specify whether or not the
Indemnifying Party giving the Claim Response disputes the claim described in the
Claims Notice (including as to whether the Indemnifying Party is required to
provide indemnification hereunder). If any Indemnifying Party elects not to
dispute a claim described in a Claims Notice, whether by failing to give a
timely Claim Response or otherwise, then the amount of such claim shall be
deemed to be an obligation of such Indemnifying Party. If the Indemnifying Party
disputes the claim, the parties will try in good faith for a period not to
exceed 60 days to settle the dispute by mediation in Boston, Massachusetts (or
other location agreeable to the parties) administered by the American
Arbitration Association under its Commercial Mediation Rules. Thereafter, any
party hereto will be free to pursue litigation or any other remedies available
to such party in accordance with applicable law.
6.9 Effect of Insurance and Tax Benefits. In computing an Indemnified
Party's Losses hereunder, full allowance shall be made for any proceeds actually
recovered by such party from such party's insurance policies and for any tax
benefits received by such party (net of any tax burdens imposed on the
Indemnified Party as a result of the proceeds of any indemnity hereunder).
6.10 Limitations on Indemnification; Exclusive Remedy. (a) Any claim
for indemnification by an Investor Indemnified Party pursuant to Section 6.5(a)
or by a Company Indemnified Party pursuant to Section 6.6(a) shall be received
by the applicable Indemnifying Party in writing within 36 months following the
Closing Date (and any such claim received after such date shall be null and
void), except that (i) claims for indemnification relating to the
representations and warranties contained in Sections 2.11, 2.12 and 2.14 may be
made until the expiration of the statute of limitations applicable to such
matters, (ii) claims for indemnification relating to the representations and
warranties contained in Sections 2.1, 2.2, 2.3, 2.4 and 3.1 may be made forever
and (iii) there shall be no time limit for making any claim for such
indemnification if the representation or warranty on which such claim is based
was made with actual knowledge that it contained an untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements or facts contained therein not misleading. The covenants contained in
this Agreement shall survive forever.
(b) The Company shall not be liable to Investor Indemnified
Parties for indemnification claims under Section 6.5(a) until the cumulative
amount of Investor Indemnified Party Losses relating to such claims exceeds
$50,000, at which time the Company shall be liable only for such Losses in
excess of such amount; provided, that, the foregoing condition and limitation on
liability shall not apply to claims pertaining to a breach of the
representations or warranties contained in Sections 2.1, 2.2, 2.3 and 2.4 and
provided, further, that the foregoing condition and limitation on liability
shall not apply to the breach of any of the representations and warranties of
the Company contained herein if such representation or warranty was made with
actual knowledge that it contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the statements or facts
contained therein not misleading.
(c) Investor shall not be liable to Company Indemnified Parties
for indemnification claims under Section 6.6(a) until the cumulative amount of
Company Indemnified Party Losses relating to such claims exceeds $50,000, at
which time Investor shall be liable only for such Losses in excess of such
amount; provided, that, the foregoing condition and limitation on liability
shall not apply to claims pertaining to a breach of the representations or
warranties contained in Section 3.1 and provided, further, that the foregoing
condition and limitation on liability shall not apply to the breach of any of
the representations and warranties of Investor contained herein if such
representation or warranty was made with actual knowledge that it contained an
untrue statement of a material fact or omitted to state a material fact
necessary to make the statements or facts contained therein not misleading.
(d) The indemnification provisions of this Article VI shall be
the exclusive remedy hereunder following the Closing, except for the remedy of
specific performance as provided in Section 7.3 or unless there has been an
instance of fraud or willful breach of the provisions hereof. In no event shall
any officer of Investor be personally liable as a result of Investor's entry
into, or the consummation of the transactions contemplated by, this Agreement.
In the event of willful breach by the Company of its obligations hereunder prior
to the Closing, Investor shall be entitled to recover from the Company
Investor's costs and reasonable attorneys' fees in connection with any suit to
recover damages suffered in connection with such breach.
ARTICLE VII
MISCELLANEOUS
7.1 Extension; Waiver. The parties hereto, may (a) extend the time for
the performance of any of the obligations or other acts of the other parties
hereto, (b) waive any inaccuracies in the representations and warranties
contained herein by any other applicable party or in any document, certificate
or writing delivered pursuant hereto by any other applicable party or (c) waive
compliance with any of the agreements or conditions contained herein. Any
agreement on the part of any 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.
7.2 Entire Agreement; Assignment. This Agreement (including the
Schedules hereto), the Ancillary Agreements and the other documents and
instruments contemplated hereby, (a) constitute the entire agreement among the
parties with respect to the subject matter hereof and supersede all other prior
agreements and understandings, both written and oral, among the parties or any
of them with respect to the subject matter hereof and (b) shall not be assigned
by operation of law or otherwise, provided that Investor may assign any of its
rights and obligations to any affiliate of Investor, but no such assignment
shall relieve Investor of its obligations hereunder, and provided further that
Investor may assign its rights and obligations to any of its members or any
affiliates of its members so long as such assignment does not require the
Company to make any filing under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended, in connection with such assignment and the transactions
contemplated hereby.
7.3 Enforcement of the Agreement. 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 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 in any Federal or state
court located in the State of Delaware (as to which the parties agree to submit
to jurisdiction for the purposes of such or any other action), this being in
addition to any other remedy to which they are entitled at law or in equity.
7.4 Validity. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
7.5 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 Investor:
Andlinger Capital XIII LLC
c/o Andlinger & Company, Inc.
000 Xxxxx Xxxxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Fax: 000-000-0000
with a required copy to:
Dechert Price & Xxxxxx
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxx, Esq.
Fax: 000-000-0000
if to the Company:
Galileo Corporation
Galileo Park
X.X. Xxx 000
Xxxxxxxxxx, XX 00000-0000
Attention: President
Fax: 000-000-0000
with a copy to:
Xxxxxx & Dodge LLP
Xxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, Xx., Esq.
Fax: 000-000-0000
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).
7.6 Governing Law. This Agreement shall be governed by and construed
in accordance with the substantive laws of the State of Delaware regardless of
the laws that might otherwise govern under principles of conflicts of laws
applicable thereto.
7.7 Descriptive Headings. The descriptive headings herein are inserted
for convenience of reference only and are not intended to be part of or to
affect the meaning or interpretation of this Agreement.
7.8 Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to confer upon any other person any rights or
remedies of any nature whatsoever under or by reason of this Agreement.
7.9 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
7.10 Expenses. Except as otherwise provided herein, all costs and
expenses incurred in connection with the transactions contemplated by this
Agreement and the Ancillary Agreements shall be paid by the party incurring such
expenses.
7.11 Certain Definitions. For purposes of this Agreement, the
following terms shall have the meanings ascribed to them below:
(a) "affiliate" of a person shall mean (i) a person that directly
or indirectly, through one or more intermediaries, controls, is controlled by,
or is under common control with, the first-mentioned person and (ii) an
"associate" shall have the meaning set forth in Rule 12b-2 promulgated under the
Exchange Act as in effect on the date of this Agreement.
(b) "beneficial owner" (including the term "beneficially own" or
correlative terms) with respect to any securities means a person that shall be
deemed to be the beneficial owner of such securities (i) that such person or any
of its affiliates beneficially owns, directly or indirectly, (ii) that such
person or any of its affiliates has, directly or indirectly, (A) the right to
acquire (whether such right is exercisable immediately or only after the passage
of time), pursuant to any agreement, arrangement or understanding or upon the
exercise of consideration rights, exchange rights, warrants or options, or
otherwise, or (B) the right to vote pursuant to any agreement, arrangement or
understanding or (iii) that are beneficially owned, directly or indirectly, by
any other person with which such person or any of its affiliates has any
agreement, arrangement or understanding for the purpose of acquiring, holding,
voting or disposing of any of such securities.
(c) "control" (including the terms "controlling," "controlled by"
and "under common control" with or correlative terms) shall mean the possession,
direct or indirect, of the power to direct or cause the direction of the
management and policies of a person, whether through ownership of voting
securities, by contract, or otherwise.
(d) "fully diluted" in reference to the shares of Common Stock
means all outstanding securities entitled generally to vote in the election of
directors of the Company on a fully diluted basis, after giving effect to the
exercise or conversion of all options, rights and securities exercisable or
convertible into such voting securities.
(e) "Material Adverse Effect" shall mean (i) a material adverse
change in the business, operations, results of operations, assets, prospects or
condition (financial or otherwise) of the Company and its Subsidiaries taken as
a whole, (ii) a material adverse change in the ability of the Company and its
Subsidiaries to conduct their business after the Closing in a manner consistent
with past practice, and (iii) any impairment of the Company's ability to perform
its obligations under this Agreement and the Ancillary Agreements, provided,
that, any decrease or series of decreases in the trading price of the Company's
Common Stock shall not, in and of itself, be deemed to be a Material Adverse
Effect and provided, further, that (1) net losses of the Company incurred after
September 30, 1998 and prior to December 31, 1998 (as determined in accordance
with generally accepted accounting principles) that do not exceed $4,850,000 in
the aggregate, (2) net losses of the Company incurred after September 30, 1998
and prior to January 31, 1999 (as determined in accordance with generally
accepted accounting principles) that do not exceed $5,120,000 in the aggregate,
or (3) the issuance of an audit report with respect to the September 30, 1998
financial statements which includes a going concern qualification shall not, in
and of itself, be deemed to be a Material Adverse Effect hereunder. When used in
connection with representations, warranties, covenants and conditions, such term
means the individual effect of the item to which it relates and also the
aggregate effect of all similar items, unless the context indicates otherwise.
(f) "Permitted Transferee", for the purposes of this Agreement,
shall have the meaning given such term in the Stockholders' Agreement, whether
or not the Stockholders' Agreement is in effect.
(g) "Person" shall mean a natural person, company, corporation,
partnership, association, trust, unincorporated organization or "group" (as
referred to in Section 13(d)(3) of the Exchange Act).
IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be executed on its behalf by its officers thereunto duly authorized, on the day
and year first above written.
GALILEO CORPORATION
By /s/ W. Xxx Xxxxxx
-----------------
Name: W. Xxx Xxxxxx
Title: President
ANDLINGER CAPITAL XIII LLC
By /s/ Xxxxxxx X. Xxxxxx
----------------------
Xxxxxxx X. Xxxxxx
Title: Manager
Exhibit A
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE HEREUNDER HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE TRANSFER OF THIS WARRANT AND
THE SECURITIES UNDERLYING THIS WARRANT IS RESTRICTED, AND NO TRANSFER, EXERCISE
OR SURRENDER FOR EXCHANGE OF THIS WARRANT OR TRANSFER OF SUCH UNDERLYING
SECURITIES SHALL BE VALID OR EFFECTIVE UNLESS AND UNTIL THERE SHALL HAVE BEEN
COMPLIANCE WITH THE TERMS AND CONDITIONS OF ARTICLE III OF THIS WARRANT.
GALILEO CORPORATION
------------------------------
WARRANT FOR COMMON STOCK
Warrant No. W-___ No. of Shares: 2,000,000
THIS IS TO CERTIFY THAT, for value received, ANDLINGER CAPITAL XIII
LLC, or its assigns, is entitled to purchase from GALILEO CORPORATION, a
Delaware corporation (the "Corporation"), at any time or from time to time after
the date hereof, at the place where the Warrant Office to which reference is
hereinafter made is located, at a purchase price of $1.50 per share, subject to
adjustment as hereinafter provided (such price, as adjusted from time to time
being hereinafter referred to as to "Exercise Price"), TWO MILLION (2,000,000)
shares, subject to adjustment as hereinafter provided (the "Shares"), of duly
authorized, validly issued, fully paid and nonassessable shares of Common Stock,
par value $.01 per share (the "Common Stock"), of the Corporation. The right of
the holder of this Warrant to purchase any Shares under this Warrant shall
terminate at 5:00 p.m. (New York City time) on [insert date 7 1/2 years after
Original Issue Date] hereunder (except as to any purchase rights under this
Warrant exercised before such time).
The holder of this Warrant shall be entitled to receive together with
the Shares, for the purchase price per share set forth above, any shares of
capital stock or securities, any convertible or exchangeable securities, and any
rights or options to subscribe for or to purchase shares of capital stock or
securities or convertible or exchangeable securities to which the holder of this
Warrant shall hereafter be entitled by reason of any transaction of the type
described in Article IV hereof.
This Warrant is one of one or more warrants (the "Warrants") of the
same form and having the same terms (except as to the number of shares of Common
Stock purchasable thereunder) as this Warrant, entitling the holders initially
to purchase up to an aggregate of two million shares of Common Stock. Certain
terms used in this Warrant are defined in Article V.
ARTICLE I
EXERCISE OF WARRANTS
1.01 Method of Exercise. This Warrant may be exercised in whole or in
any partial exercise aggregating at least 1,000 shares of Common Stock. To
exercise this Warrant, the holder hereof shall deliver to the Corporation, at
the Warrant Office designated pursuant to Section 2.01,
(i) a written notice, in substantially the form of the
Exercise Notice attached as an exhibit hereto, of such holder's
election to exercise this Warrant, which notice shall specify the
number of Shares to be purchased,
(ii) an amount equal to the aggregate Exercise Price for the
number of Shares being purchased, payable by check (subject to
collection) payable to the order of the Corporation, and
(iii) this Warrant.
The Corporation shall, as promptly as practicable, and in any event within 10
days thereafter, execute and deliver or cause to be executed and delivered, in
accordance with said notice, a certificate or certificates representing the
aggregate number of Shares specified in said notice, together with any other
consideration required to be delivered in accordance with Article IV hereof. The
certificate or certificates so delivered shall be in such denominations as may
be specified in said notice and shall be issued in the name of such holder or
such other name as shall be designated in said notice. Such certificate or
certificates shall be deemed to have been issued, and such holder or holders or
any other person so designated to be named therein shall be deemed for all
purposes to have become a holder of record of such Shares, as of the date said
notice is received by the Corporation as aforesaid. If this Warrant shall have
been exercised only in part, the Corporation shall, at the time of delivery of
said certificate or certificates, deliver to such holder a new Warrant
evidencing the rights of such holder to purchase the remaining Shares called for
by this Warrant, which new Warrant shall in all other respects be identical with
this Warrant, or, at the request of such holder, appropriate notation may be
made on this Warrant and the same returned to such holder. The Corporation shall
pay all expenses, taxes and other charges payable in connection with the
preparation, issuance and delivery of such certificates and new Warrants, except
that, in case such certificates or new Warrants shall be registered in a name or
names other than the name of the holder of this Warrant, funds sufficient to pay
all stock transfer taxes which shall be payable upon the issuance of such
certificate or certificates or new Warrants shall be paid by the holder hereof
at the time of delivering the notice of exercise mentioned above or promptly
upon receipt of a written request of the Corporation for payment of the same.
1.02 Warrant Shares to be Fully Paid and Nonassessable. All shares of
Common Stock and other securities of the Corporation issued upon the exercise of
this Warrant shall be validly issued, fully paid and nonassessable and, if the
Common Stock or other securities are then listed on a securities exchange
(including The Nasdaq Stock Market, Inc.), shall be duly listed thereon.
1.03 No Fractional Shares to be Issued. The Corporation shall not be
required upon any exercise of this Warrant to issue a certificate representing
any fraction of a share of Common Stock, but, in lieu thereof, shall pay to the
holder of this Warrant cash in an amount equal to a corresponding fraction
(calculated to the nearest 1/100 of a share) of the Current Market Price (or, if
no Current Market Price then exists, the Exercise Price) of one share of Common
Stock as of the date of receipt by the Corporation of notice of exercise of this
Warrant.
1.04 Legend on Warrant Shares. Each certificate for Warrant Shares
initially issued upon exercise of this Warrant, unless at the time of exercise
such Warrant Shares are registered under the Act, shall bear the following
legend (and any additional legend required by any securities exchange upon which
such Warrant Shares may, at the time of such exercise, be listed):
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended. The transfer
of the securities represented hereby is subject to the restrictions set
forth in Article III of the Warrant pursuant to which such securities
were issued, a copy of which Warrant is available for inspection at the
office of Corporation."
Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend (except a new certificate issued upon completion
of a public distribution of the securities represented thereby pursuant to a
registration statement under the Act) shall also bear such legend unless, in the
written opinion reasonably acceptable to the Corporation of counsel reasonably
acceptable to the Corporation, the securities represented thereby need no longer
be subject to the restrictions contained in said Article III. The provisions of
said Article III shall be binding upon all subsequent holders of this Warrant.
1.05 Acknowledgment of Continuing Obligation. The Corporation will, at
the time of any exercise of this Warrant in whole or in part, upon request of
the holder hereof, acknowledge in writing its continuing obligation to such
holder in respect of all rights (including without limitation any right to
registration of the Shares issued upon such exercise) to which such holder shall
continue to be entitled after such exercise in accordance with this Warrant;
provided, however, that the failure of such holder to make any such request
shall not affect the continuing obligations of the Corporation to such holder in
respect of such rights.
ARTICLE II
WARRANT OFFICE; TRANSFER,
DIVISION OF COMBINATION OF WARRANTS
2.01 Warrant Office. The Corporation shall maintain an office for
certain purposes specified herein (the "Warrant Office"), which office shall
initially be the Corporation's office at Galileo Park, X.X. Xxx 000, Xxxxxxxxxx,
Xxxxxxxxxxxxx 00000, and may subsequently be such other office of the
Corporation or of any transfer agent of the Common Stock in the continental
United States as to which written notice has previously been given to all of the
Warrantholders.
2.02 Ownership of Warrant. The Corporation may deem and treat the
person in whose name this Warrant is registered as the holder and owner hereof
(notwithstanding any notations of ownership or writing hereon made by anyone
other than the Corporation) for all purposes and shall not be affected by any
notice to the contrary, until presentation of this Warrant for registration of
transfer as provided in this Article II.
2.03 Transfer of Warrants. The Corporation agrees to maintain at the
Warrant Office books for the registration and transfer of the Warrants, and,
subject to the provisions of Article III, this Warrant and all rights hereunder
are transferable, in whole or in part, at any time and from time to time, on
said books at said office upon surrender of this Warrant at said office,
together with a written assignment of this Warrant duly executed by the holder
hereof or its duly authorized agent or attorney and funds sufficient to pay any
transfer taxes payable upon the making of such transfer. Upon such surrender and
payment the Corporation shall execute and deliver a new Warrant or Warrants in
the name of the assignee or assignees and in the denominations specified in such
instrument of assignment, and this Warrant shall promptly be canceled. A Warrant
may be exercised by a new holder for the purchase of Shares without having a new
Warrant issued.
2.04 Division or Combination of Warrants. This Warrant may be divided
or combined with other Warrants upon presentation hereof and of any Warrant or
Warrants with which this Warrant is to be combined at the Warrant Office,
together with a written notice specifying the names and denominations in which
new Warrants are to be issued, signed by the holders hereof and thereof or their
respective duly authorized agents or attorneys. Subject to compliance with
Section 2.03 as to any transfer which may be involved in such division or
combination, the Corporation shall execute and deliver a new Warrant or Warrants
in exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice. Notwithstanding the foregoing provisions in this Section 2.04,
the Corporation shall not be obligated to divide an outstanding Warrant if there
are more than 40 Warrants then outstanding.
2.05 Expenses of Delivery of Warrants. The Corporation shall pay all
expenses, taxes (other than transfer taxes) and other charges payable in
connection with the preparation, issuance and delivery of Warrants hereunder.
ARTICLE III
RESTRICTIONS ON TRANSFER;
REGISTRATION RIGHTS
3.01 Restrictions on Transfer. This Warrant shall not be exercisable
or transferable and the related Warrant Shares shall not be transferable except
upon the conditions specified in this Article III, which conditions are
intended, among other things, to insure compliance with the provisions of the
Act in respect of the exercise or transfer of such Warrant or transfer of such
Warrant Shares. The holder of this Warrant, by acceptance hereof, agrees that
such holder will not (i) transfer this Warrant prior to delivery to the
Corporation of an opinion of counsel (as described in Section 3.02), or transfer
such Warrant Shares prior to delivery to the Corporation of an opinion of
counsel (as described in Section 3.02) or until registration of such Warrant
Shares under the Act has become effective.
3.02 Opinion of Counsel. If in the opinion of counsel to the
Corporation or other counsel designated by a majority of the Warrantholders and
reasonably acceptable to the Corporation, the proposed transfer of this Warrant
and/or the proposed transfer of such Warrant Shares will be exempt from the
registration requirements under the Act, the holder of this Warrant shall be
entitled to transfer this Warrant and/or transfer such Warrant Shares in
accordance with the proposed method of disposition, and the Corporation shall
take such action as shall be reasonably requested by the Warrantholders to
effect such transfer.
3.03 Registration Rights. This Warrant and the Warrant Shares are
entitled to the benefits of that certain Registration Rights Agreement of even
date herewith, the terms and provisions of which are hereby incorporated herein
by reference.
ARTICLE IV
ANTIDILUTION PROVISIONS
4.01 Adjustments. The number of shares of Common Stock and other
securities purchasable under this Warrant shall be subject to adjustment from
time to time as provided in this Article IV.
4.02 Effect of "Splitups" and Stock Dividends. In case at any time or
from time to time the Corporation shall subdivide as a whole, by
reclassification, by the issuance of a stock dividend on the Common Stock
payable in Common Stock, or otherwise, the number of shares of Common Stock then
outstanding into a greater number of shares of Common Stock, with or without par
value, the number of shares of Common Stock which may be purchased hereunder
shall be increased proportionately. The issuance of such a stock dividend shall
be treated as a subdivision of the whole number of shares of Common Stock
outstanding immediately prior to such dividend into a number of shares equal to
such whole number of shares so outstanding plus the number of shares issued as a
stock dividend.
4.03 Effect of Certain Dividends. In case on any date the Corporation
makes a distribution to holders of its Common Stock of evidences of its
indebtedness or assets (including without limitation any such distribution made
in connection with a consolidation or merger in which the Corporation is the
surviving corporation, but excluding one cash dividend per fiscal quarter of the
Corporation which dividend shall not exceed an amount per share equal to 1.25%
of the Current Market Price on the date such dividend is declared), the number
of shares of Common Stock theretofore purchasable hereunder shall be adjusted as
at the close of business on said date to a number determined by multiplying the
number of shares theretofore purchasable hereunder by a fraction, the numerator
of which shall be the lesser of the Current Market Price or Exercise Price at
such date and the denominator of which shall be an amount equal to the lesser of
such Current Market Price or Exercise Price, less the fair market value of the
portion of the evidences of indebtedness or assets so to be distributed in
respect of one share of Common Stock.
4.04 Effect of Merger; Consolidation; Etc. In case the Corporation
shall, while this Warrant remains outstanding, enter into any consolidation with
or merger into any other corporation wherein the Corporation is not the
surviving corporation, or wherein securities of a corporation other than the
Corporation are distributable to holders of Common Stock, or sell or convey its
property as an entirety or substantially as an entirety, and in connection with
such consolidation, merger, sale or conveyance, shares of stock or other
securities shall be issuable or deliverable in exchange for the Common Stock,
then, as a condition of such consolidation, merger, sale or conveyance, lawful
and adequate provision shall be made whereby the holder of this Warrant shall
thereafter be entitled to purchase pursuant to this Warrant (in lieu of the
number of shares of Common Stock which such holder would have been entitled to
purchase immediately prior to such consolidation, merger, sale or conveyance)
the shares of stock or other securities to which such number of shares of Common
Stock would have been entitled at the time of such consolidation, merger, sale
or conveyance, at an aggregate purchase price equal to that which would have
been payable if such number of shares of Common Stock had been purchased by
exercise of this Warrant immediately prior thereto. In case of any such
consolidation, merger, sale or conveyance, appropriate provision shall be made
with respect to the rights and interests thereafter of the holders of Warrants,
to the end that all the provisions of the Warrants (including without limitation
the provisions of this Article IV) shall thereafter be applicable, as nearly as
practicable, to such stock or other securities thereafter deliverable upon the
exercise of the Warrants. The Corporation shall not effect any such
consolidation, merger, sale or conveyance unless prior to or simultaneously with
the consummation thereof the successor corporation (if other than the
Corporation) resulting from such consolidation or merger or purchasing or
acquiring such assets shall assume by written instrument, executed and mailed or
delivered to each holder of Warrants, the obligation to deliver to such holder
such shares of stock, securities or assets as, in accordance with the foregoing
provisions, such Warrantholder may be entitled to receive, which instrument
shall contain the express assumption by such successor corporation of the due
and punctual performance and observance of every provision of this Warrant to be
performed and observed by the Corporation and of all liabilities and obligations
of the Corporation hereunder. Nothing in this Section 4.04 shall impair any
otherwise available right of a Warrantholder to exercise this Warrant, whether
pursuant to Section 4.06 or otherwise.
4.05 Reorganization or Reclassification. In case of any capital
reorganization or any reclassification of the capital stock of the Corporation
(except as provided in Section 4.02) while this Warrant remains outstanding,
then, as a condition of such capital reorganization or reclassification, lawful
and adequate provision shall be made whereby the holder of this Warrant shall
thereafter be entitled to purchase pursuant to this Warrant (in lieu of the
number of shares of Common Stock specified in the first paragraph of this
Warrant which such holder would have been entitled to purchase immediately prior
to such reorganization or reclassification) the shares of stock of any class or
classes or other securities or property to which such number of shares of Common
Stock would have been entitled at the time of such reorganization or
reclassification, at an aggregate purchase price equal to that which would have
been payable if such number of shares of Common Stock specified in the first
paragraph of this Warrant had been purchased immediately prior to such
reorganization or reclassification. In case of any such capital reorganization
or reclassification, appropriate provision shall be made with respect to the
rights and interests thereafter of the holders of the Warrants, to the end that
all the provisions of the Warrants (including without limitation the provisions
of this Article IV) shall thereafter be applicable, as nearly as practicable, to
such stock or other securities or property thereafter deliverable upon the
exercise of the Warrants.
4.06 Effect of Below Market Issuances. (a) In case the Corporation
shall at any time issue additional shares of Common Stock, or rights, options or
warrants containing the right to subscribe for or purchase shares of Common
Stock or securities convertible into or exchangeable for Common Stock
("Convertible Securities") for a price per share of Common Stock in the case of
the issuance of Common Stock, or for a price per share of Common Stock
deliverable upon exercise, conversion or exchange of such securities in the case
of Convertible Securities, less than the then Current Market Price per share of
Common Stock on the date the Corporation fixed the offering price of such
additional shares, the number of Warrant Shares thereafter purchasable upon the
exercise of each Warrant shall be determined by multiplying the number of
Warrant Shares theretofore purchasable upon exercise of this Warrant by a
fraction, of which the numerator shall be the number of shares of Common Stock
outstanding on such date plus the number of additional shares of Common Stock
offered for subscription, exchange or purchase, and of which the denominator
shall be the number of shares of Common Stock outstanding on such date plus the
number of shares which the aggregate offering price of the total number of
shares of Common Stock so offered would purchase at the then Current Market
Price per share of Common Stock at such date. For purposes of this Section 4.06,
if the Corporation issues Common Stock or Convertible Securities for
consideration other than cash, then the fair value of the consideration so
received shall be determined in good faith by the Board of Directors of the
Corporation, provided that if such determination is objected to by the holders
of Warrants representing a Majority of the Warrant Shares, such determination
shall be made by a qualified independent appraiser mutually selected by the
Board of Directors and a majority in interest of the Warrantholders. The
consideration for any Common Stock issuable pursuant to any Convertible
Securities shall be the consideration received or receivable by the Corporation
for issuing such Convertible Securities, plus the additional consideration
payable upon the exercise of such Convertible Securities. The sale or other
disposition of any Common Stock owned or held by or for account of the
Corporation shall be deemed an issuance thereof by the Corporation. The
provisions of this Section 4.06 shall not apply to the issuance of or exercise
of Excluded Securities.
(b) If, at any time after any adjustment shall have been made pursuant
to this Section 4.06 on the basis of the issuance of Convertible Securities:
(1) such Convertible Securities or a portion thereof shall
expire and shall not have been exercised, or
(2) the consideration per share for which additional shares
of Common Stock are issuable pursuant to such Convertible Securities
shall be increased solely by virtue of provisions therein contained
for an automatic increase in such consideration per share upon the
arrival of a specified date or the happening of a specified event,
such previous adjustment shall be rescinded and annulled and the
additional shares of Common Stock which were deemed to have been
issued by virtue of the computation made in connection with the
adjustment so rescinded and annulled shall no longer be deemed to have
been issued by virtue of such computation. Thereupon, a recomputation
shall be made of the effect of such Convertible Securities on the
basis of
(3) treating the number of additional shares of Common
Stock, if any, theretofore actually issued or possible pursuant to the
previous exercise of such Convertible Securities, as having been
issued on the date or dates of such issuance as determined for
purposes of such previous adjustment and for the consideration
actually received and receivable therefor, and
(4) treating any such Convertible Securities which then remain
outstanding as having been granted or issued immediately after the time
of such increase of the consideration per share for such shares of
Common Stock as are issuable under such Convertible Securities,
and, if and to the extent called for by the foregoing provisions of this Article
IV on the basis aforesaid, a new adjustment of the number of shares issuable
upon the exercise hereof shall be made, which new adjustment shall supersede the
previous adjustment so rescinded and annulled.
4.07 No Dilution Generally. The Corporation shall not take any action,
directly or indirectly, to avoid or seek to avoid the observance or performance
of any of the terms of this Article IV, but shall at all times in good faith
assist in carrying out all of such terms and in the taking of all such action as
may be necessary, appropriate or desirable in order to protect the rights of the
holder of this Warrant, it being the intent of this Section 4.07 that the holder
of this Warrant shall at all times after the date hereof be entitled to receive
upon exercise of this Warrant no less than the same proportionate ownership of
all of the outstanding shares of the capital stock and other securities of the
Corporation (including without limitation proportionate voting rights) as the
holder of this Warrant would receive if such exercise rights would have been
exercised on the date hereof.
4.08 Statement of Adjustment of Unit. Upon each adjustment of the
number of shares of Common Stock purchasable hereunder, and in the event of any
change in the rights of the holder of this Warrant by reason of other events
herein set forth, then and in each case, the Corporation will promptly (i)
prepare a schedule setting forth the adjusted number of shares purchasable
hereunder, or specifying the other shares of stock, securities or assets and the
amount thereof receivable as a result of such change in rights, and setting
forth in reasonable detail the method of calculation and the facts upon which
such calculation is based, and (ii) promptly mail a copy of such schedule,
certified as correct by the Chief Executive or Chief Financial Officer of the
Corporation.
4.09 Determinations by the Board of Directors. All determinations by
the Board of Directors of the Corporation under the provisions of this Warrant
shall be made in good faith with due regard to the interests of the holder of
this Warrant and in accordance with good financial practice, and all valuations
made by the Board of Directors of the Corporation under the terms of this
Warrant must be made with due regard to any market quotations of securities
involved in, or related to, the subject of such valuation.
4.10 Notifications by the Corporation. In case at any time the
Corporation proposes
(i) to pay any dividend payable in stock (of any class or
classes) or in securities convertible into or exchangeable for shares
of Common Stock or in rights or options to subscribe for or purchase
shares of Common Stock or convertible or exchangeable securities or to
make any distribution (other than cash dividends in an amount per
share not greater than the next preceding cash dividend) to the
holders of the Common Stock,
(ii) to make an offer for subscription pro rata to the
holders of Common Stock of additional shares of stock of any class or
other rights or to grant to the holders of Common Stock generally any
rights or options,
(iii) to effect any stock split, stock distribution,
reorganization or reclassification of the Corporation or any of the
capital stock of the Corporation, or consolidation or merger of the
Corporation with, or sale or transfer of all or substantially all of
its assets to, another corporation, or
(iv) to effect a voluntary or involuntary dissolution,
liquidation or windingup of the Corporation,
then, in any one or more such cases, the Corporation shall give written notice
to the registered holder of this Warrant of the date on which (A) the transfer
books of the Corporation shall close or a record shall be taken for such
dividend, distribution, subscription rights or grant, (B) a record shall be
taken to determine stockholders entitled to notice of and to vote at any meeting
of stockholders at which any such proposed reorganization, reclassification,
consolidation, merger, sale or transfer of assets, dissolution, liquidation or
windingup is to be considered, or (C) such reorganization, reclassification,
consolidation, merger, sale or transfer of assets, dissolution, liquidation or
windingup shall take place, as the case may be. Such notice shall also specify
the date as of which the holders of Common Stock of record shall participate in
such dividend, distribution or subscription rights, or shall be entitled to vote
on or exchange their Common Stock for securities or other property deliverable
upon such reorganization, reclassification, consolidation, merger, sale or
transfer of assets, dissolution, liquidation or winding up, as the case may be.
Such written notice shall be given not less than 20 days and not more than 90
days prior to such date on which the transfer books of the Corporation shall
close or a record shall be taken or any event shall occur, as the case may be,
and such notice may state that any such action will be taken only if certain
events specified in such notice (such as the clearing of proxy material by the
Commission or an affirmative vote of stockholders) occur prior thereto.
ARTICLE V
CERTAIN DEFINITIONS
For all purposes of this Warrant, unless the context otherwise
requires, the following terms shall have the following respective meanings:
"Act": the Securities Act of 1933, as amended, or any similar Federal
statute, and the rules and regulations of the Commission promulgated thereunder,
all as the same shall be in effect at the time.
"Andlinger XIII Warrantholder": Andlinger Capital XIII LLC.
"Commission": the Securities and Exchange Commission or any other
Federal agency then administering the Act.
"Common Stock": the Corporation's authorized Common Stock, par value
$.01 per share, and any other securities as to which this Warrant becomes
exercisable pursuant to Article IV, including the stock of the Corporation of
any class thereafter authorized which ranks, or is entitled to a participation
as to assets or dividends substantially on a parity, with the Common Stock.
"Corporation": Galileo Corporation, a Delaware corporation, and any
other corporation assuming or required to assume the Warrants pursuant to
Section 4.04.
"Current Market Price": per share of Common Stock at any date: the
average of the daily market prices over a period of 20 consecutive business days
before such date. The market price for each such business day shall be the last
sale price on such day on the principal securities exchange on which the Common
Stock is then listed or admitted to trading, or, if no sale takes place on such
day on any such exchange, the average of the closing bid and asked prices on
such day as officially quoted on any such exchange, or if the Common Stock is
not then listed or admitted to trading on any stock exchange, the market price
for each such business day shall be the average of the closing bid and asked
prices on such day in the over--the--counter market, as reported through NASDAQ.
If and so long as there shall be no exchange or over--the--counter market for
the Common Stock during the 20--day period prior on which Current Market Price
is to be determined, the Current Market Price shall be determined by the Board
of Directors in good faith and on a reasonable basis; provided, however, that in
case the Corporation makes an underwritten public offering of shares of Common
Stock, for purposes of the adjustment, if any, pursuant to Article IV, the
Current Market Price with respect to such shares shall be deemed to be the price
to the public shown in the final prospectus used in connection with such public
offering.
"equity security" or "equity securities": as such term is defined by
the Exchange Act or the rules and regulations of the Commission promulgated
thereunder.
"Exchange Act": the Securities Exchange Act of 1934, as amended, or
any similar Federal statute, and the rules and regulations of the Commission
promulgated thereunder, all as the same shall be in effect at the time.
"Excluded Securities": Common Stock or other securities issued (i)
pursuant to the exercise of the Warrants, (ii) pursuant to a bona fide
underwritten public offering registered under the Securities Act, (iii) pursuant
to the exercise of options or rights granted or available to employees of the
Corporation pursuant to a Corporation stock option plan or stock purchase plan
in existence on December 22, 1998 or thereafter duly approved by the
stockholders of the Corporation and (iv) pursuant to any acquisition agreement
or plan of merger or consolidation that provides for the acquisition by the
Corporation of capital stock or assets if either (A) the number of shares of
Common Stock issued pursuant to this clause (iv) in any given acquisition
transaction does not exceed 20% of the number of shares of Common Stock
outstanding immediately prior to giving effect to such issuance, or (B) the
issuance of Common Stock in such acquisition transaction is approved by the
holders of a majority of the outstanding Common Stock of the Corporation.
"Original Issuance Date": _____________, 1998.
"Outstanding": when used with reference to the Common Stock at any
date, all issued shares of the Common Stock at such date, except shares then
held in the treasury of the Corporation.
"person": any individual, corporation, partnership, trust,
unincorporated organization and any government, and any political subdivision,
instrumentality or agency thereof.
"Warrant Office": see Section 2.01.
"Warrant Shares": the shares of the Common Stock and any other
securities purchasable or purchased by the Warrantholders upon the exercise of
the Warrants.
"Warrantholder": the registered holder of a Warrant or Warrants or any
related Warrant Shares.
"Warrants": the Warrants (of which this Warrant is one) originally
issued by the Corporation on the Original Issuance Date, and evidencing the
right initially to purchase an aggregate of 2,000,000 (Two Million) shares of
the Common Stock of the Corporation at an initial exercise price of $1.50 per
share (subject to adjustment), and all warrants issued in substitution,
combination or subdivision of any thereof.
ARTICLE VI
CERTAIN COVENANTS OF THE CORPORATION
The Corporation covenants and agrees that:
(a) it will reserve and set apart and have at all times,
free from preemptive rights, a number of shares of authorized but
unissued Common Stock or other securities or property deliverable upon
the exercise of the Warrants sufficient to enable it at any time to
fulfill all its obligations thereunder;
(b) if any shares of the Common Stock or other securities
required to be reserved for the purposes of exercise of this Warrant
require registration with or approval of any governmental authority
under any Federal law (other than the Act) or under any state law
before such shares or other securities may be issued upon exercise of
this Warrant, the Corporation will at its expense, as expeditiously as
possible, take reasonable steps to cause such shares or other
securities to be duly registered or approved, as the case may be;
(c) if and so long as the Common Stock is listed on any
securities exchange (as defined in the Exchange Act), it will, at its
expense, obtain and maintain the approval for listing upon official
notice of issuance of all shares of Common Stock issuable upon the
exercise of the Warrants at the time outstanding and maintain the
listing of such shares after their issuance; and the Corporation will
so list on such securities exchange and will register under the
Exchange Act (or any similar statute then in effect), and will
maintain such listing of, any other securities that at any time are
issuable upon exercise of the Warrants if, and at the time that, any
securities of the same class shall be listed on such securities
exchange by the Corporation;
(d) this Warrant shall be binding upon any corporation
succeeding to the Corporation by merger, consolidation or acquisition
of all or substantially all of the Corporation's property and assets;
and
(e) the exercise of this Warrant and the performance of the
Corporation's obligations hereunder shall be subject to and shall be
in compliance with all applicable federal and state securities laws.
ARTICLE VII
MISCELLANEOUS
7.01 Entire Agreement. This Warrant contains the entire agreement
between the Warrantholder and the Corporation with respect to the purchase of
the Warrant Shares and the related transactions and supersedes all prior
arrangements or understandings with respect thereto.
7.02 Governing Law. This Warrant shall be governed by and construed in
accordance with the internal laws of the State of Delaware.
7.03 Waiver and Amendment. Any term or provision of this Warrant may
be waived at any time by the party which is entitled to the benefits thereof and
any term or provision of this Warrant may be amended or supplemented at any time
by agreement of the Warrantholder and the Corporation, except that any waiver of
any term or condition, or any amendment or supplementation, of this Warrant must
be in writing. A waiver of any breach or failure to enforce any of the terms or
conditions of this Warrant shall not in any way affect, limit or waive a party's
rights hereunder at any time to enforce strict compliance thereafter with every
term or condition of this Warrant.
7.04 Illegality. In the event that any one or more of the provisions
contained in this Warrant shall be determined to be invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in any other respect and the remaining
provisions of this Warrant shall not, at the election of the party for whom the
benefit of the provision exists, be in any way impaired.
7.05 Filing of Warrant. A copy of this Warrant shall be filed in the
minute book and among the records of the Corporation.
7.06 Notice. Any notice or other document required or permitted to be
given or delivered to the Warrantholders shall be delivered at, or sent by
certified or registered mail to, each such holder at the last address shown on
the books of the Corporation maintained at the Warrant Office for the
registration and transfer of the Warrants or at any more recent address of which
any Warrantholder shall have notified the Corporation in writing. Any notice or
other document required or permitted to be given or delivered to holders of
record of outstanding Warrant Shares shall be delivered at, or sent by certified
or registered mail to, each such holder at such holder's address as the same
appears on the stock records of the Corporation. Any notice or other document
required or permitted to be given or delivered to the Corporation, other than
such notice or documents required to be delivered to the Warrant Office, shall
be delivered at, or sent by certified or registered mail to, the office of the
Corporation at Galileo Park, X.X. Xxx 000, Xxxxxxxxxx, Xxxxxxxxxxxxx 00000,
Attention: Corporate Secretary or such other address within the continental
United States of America as shall have been furnished by the Corporation to the
Warrantholders and the holders of record of Warrant Shares.
7.07 Loss, Destruction, Etc. of Warrants. Upon receipt of evidence
satisfactory to the Corporation of the loss, theft, mutilation or destruction of
any Warrant, and in the case of any such loss, theft or destruction upon
delivery of a bond of indemnity in such form and amount as shall be reasonably
satisfactory to the Corporation, or in the event of such mutilation upon
surrender and cancellation of the Warrant, the Corporation will make and deliver
a new Warrant, of like tenor, in lieu of such lost, stolen, destroyed or
mutilated Warrant; provided, however, that any Andlinger XIII Warrantholder
shall not be required to provide any such bond or indemnity. Any warrant issued
under the provisions of this Section 7.07 in lieu of any Warrant alleged to be
lost, destroyed or stolen, or in lieu of any mutilated Warrant, shall constitute
an original contractual obligation on the part of the Corporation.
7.08 Certain Expenses. Any Warrantholder shall be entitled to
reimbursement from the Corporation of such Warrantholder's reasonable legal and
other expenses in enforcing its rights hereunder against the Corporation,
provided and to the extent that the Corporation shall have been determined by a
final order of a court of appropriate jurisdiction to have defaulted in its
obligations under or in connection with this Warrant.
IN WITNESS WHEREOF, the Corporation has caused this Warrant to be
executed on its behalf and its corporate seal to be hereunto affixed and
attested by its officers thereunto duly authorized.
Dated: ____________, 1998
GALILEO CORPORATION
By _____________________________
Name: W. Xxx Xxxxxx
Title: President
Attest:
_____________________
Secretary
(Corporate Seal)
EXERCISE NOTICE
The undersigned, the holder of the foregoing Warrant, hereby elects to
exercise rights represented by said Warrant for, and to purchase thereunder,
_______ shares of the Common Stock covered by said Warrant and herewith makes
payment in full therefor of $________ by check (subject to collection) payable
to the order of the Corporation in the amount of $_______ , and requests (i)
that certificates for such shares (and any securities or other property issuable
upon such exercise) be issued in the name of and delivered to ____________ whose
address is _________________ and (ii) if such shares shall not include all of
the shares issuable as provided in said Warrant, that a new Warrant of like
tenor and date for the balance of the shares issuable thereunder be delivered to
the undersigned.
____________________________________
Signature Guaranteed:
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _____________ the rights to __________ represented by the
foregoing Warrant of [ ], and appoints ____________ attorney to transfer said
rights on the books of said corporation, with full power of substitution in the
premises.
_____________________________
Signature Guaranteed:
Dated:
Exhibit B
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated December
22, 1998, is entered into by and among GALILEO CORPORATION, a Delaware
corporation (the "Company"), ANDLINGER CAPITAL XIII LLC, a Connecticut limited
liability company ("Investor"), XXXX X. XXXXX, XX. ("Xxxxx") and W. XXX XXXXXX
("Speyer"). Investor, Xxxxx and Xxxxxx are sometimes referred to hereinafter
individually as a "Stockholder" and collectively as the "Stockholders."
Background
The Company and Investor are entering into a Securities Purchase
Agreement and the Company and the Stockholders are entering into a Stockholders'
Agreement, each dated the date hereof. In connection with the entry into those
agreements, and as an inducement to the Stockholders to enter into such
agreements, the Company is granting the registration rights provided in this
Agreement.
Terms
In consideration of the mutual covenants contained herein and
intending to be legally bound hereby, the parties hereto agree as follows:
1. Definitions
As used in this Agreement, the following capitalized terms shall have
the following meanings:
"Affiliate" has the meaning set forth in Rule 12b-2 of the Rules
promulgated under the Securities Exchange Act of 1934, as amended.
"Common Stock" means the common stock, par value $.01 per share, of
the Company.
"Permitted Transferee" shall have the meaning given such term in the
Stockholders' Agreement for so long as that agreement is in effect and, when
such agreement is no longer in effect, any permitted transferee.
"Person" means a natural person, partnership, limited liability
company, corporation, trust or unincorporated organization, or a government or
agency or political subdivision thereof.
"Registrable Securities" shall mean any Common Stock issued to and or
owned by Investor or any of its Affiliates, by Xxxxx or Speyer, or by the
Permitted Transferees of any of the foregoing, and any Common Stock which may be
issued or distributed in respect of such Common Stock by way of conversion,
stock dividend or stock split, or other distribution, recapitalization, or
reclassification. As to any particular Registrable Securities, once issued, such
securities shall cease to be Registrable Securities when (i) a registration
statement with respect to the sale of such securities shall have become
effective under the Securities Act and such securities shall have been disposed
of in accordance with such registration statement, (ii) such securities shall
have been distributed to the public pursuant to Rule 144 or 144A (or any
successor provisions) under the Securities Act, (iii) such securities shall have
been otherwise transferred, new certificates for them not bearing a legend
restricting further transfer shall have been delivered by the Company and
subsequent disposition of such securities shall not require registration or
qualification under the Securities Act or any state securities or blue sky law
then in force, or (iv) such securities shall have ceased to be outstanding.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended from
time to time.
"Stockholders' Agreement" means the Stockholders' Agreement dated the
date hereof among the Company, Investor, Xxxxx and Xxxxxx.
"Stock Purchase Agreement" means the Securities Purchase Agreement
dated the date hereof between the Company and Investor.
"underwritten registration or "underwritten offering" means a
registration in which securities of the Company are sold to an underwriter for
reoffering to the public.
2. Demand Registrations
(a) Upon the written request of (i) Investor, (ii) Stockholders
holding shares of Common Stock representing at least 50% of the outstanding
shares of Common Stock held by the Stockholders (the "Majority Stockholders") or
(iii) Xxxxx or Speyer so long as such request of Xxxxx or Xxxxxx is made after
December 31, 2001 (any of the foregoing, a "Requesting Stockholder"), requesting
that the Company effect the registration under the Securities Act of all or part
of the particular Requesting Stockholder's Registrable Securities and specifying
the intended method of disposition thereof, the Company will, as expeditiously
as possible, use its best efforts to effect the registration under the
Securities Act of (i) the Registrable Securities which the Company has been so
requested to register by the Requesting Stockholder so as to permit the
disposition (in accordance with the intended method thereof as aforesaid) of the
Registrable Securities so to be registered; provided, however, that the Company
may delay the filing of the registration statement for up to a single 90-day
period if the Board determines that such filing should not be made due to a
valid need not to disclose confidential information or because it would
materially interfere with any material financing, acquisition, corporate
reorganization, or merger involving the Company. So long as the Company does not
breach any of its obligations in respect of the demand registration (other than
a breach which would not adversely affect the Requesting Stockholder's rights)
with respect to each holder, the Company shall only be required to comply with
three (3) requests by Investor and/or the Majority Stockholders and one (1)
request by each of Xxxxx and Speyer for demand registration. The Company shall
give written notice to all Stockholders other than the Requesting Stockholder of
its intention to file a registration statement pursuant to this paragraph at
least 30 days prior to the filing thereof, and if requested in writing by such
other Stockholders within 30 days after receipt of such notice, the Company will
include in such registration statement any shares of Common Stock held by the
other Stockholders. All of the Stockholders whose shares of Common Stock will be
included in a registration statement (whether a Requesting Stockholder or other
Stockholder electing to participate) pursuant to any "demand" or "piggyback"
registration under this Agreement are referred to herein as the "Participating
Stockholders."
(b) A registration requested pursuant to Section 2(a) will not be
deemed to have been effected unless it has become effective; provided, that if,
within 135 days after it has become effective, the offering of Registrable
Securities pursuant to such registration is interfered with by any stop order,
injunction, or other order or requirement of the SEC or other governmental
agency or court prior to the sale of all the Registrable Securities registered
thereunder, such registration will be deemed not to have been effected.
Notwithstanding the preceding sentence, if any such stop order is rescinded, the
effective period shall continue upon such rescission and be extended by the
number of days by which such stop order delayed the filing.
(c) Each requested registration shall involve either a firm or best
efforts underwritten public offering. The Requesting Stockholder causing the
registration statement shall have the right to select an underwriter or
underwriters of nationally recognized standing satisfactory to the Company to
administer the offering.
(d) If the managing underwriter in a requested registration advises
the Company in writing that, in its opinion, the number of securities requested
to be included in such registration (including securities of the Company which
are not Registrable Securities) exceeds the number (the "Maximum Amount") which
can be sold in such offering so as to be likely to have an adverse effect on
such offering as contemplated by the Requesting Stockholder (including the price
at which the Requesting Stockholder proposes to sell such securities), the
registration statement shall only include shares of the Requesting Stockholder
and, to the extent such shares are less than the Maximum Amount, shares of the
other Participating Stockholders in amounts to be allocated among them based on
the relative number of Registrable Securities then held by them. In the event
that the number of Registrable Securities requested to be included in such
registration exceeds the Maximum Amount, the Requesting Stockholder may elect to
withdraw the registration request and such registration statement shall not be
deemed to have been effected.
(e) The Company shall not at any time grant any other person rights to
register securities of the Company on terms which could restrict in any way the
ability of the Company fully to perform its obligations to the holders pursuant
to this Section.
3. Piggyback Registrations.
(a) If the Company at any time after the date hereof proposes to
register its Common Stock under the Securities Act (other than a registration
statement on Forms S-8 or S-4 or any similar or successor form or any other
registration statement relating to an exchange offer or an offering of
securities solely to the Company's employees or security holders), whether or
not for sale for its own account, pursuant to a registration statement on which
it is permissible to register Registrable Securities for sale to the public
under the Securities Act, it will each such time give written notice to all
Stockholders of its intention to do so at least 30 days prior to the date of
filing the proposed registration statement and of such Stockholder's rights
hereunder. Upon the written request of a Stockholder made within 25 days after
the receipt of any such notice (which request shall specify the Registrable
Securities intended to be disposed of by such Stockholder), the Company will use
its reasonable best efforts to effect the registration under the Securities Act
of all Registrable Securities which the Company has been so requested to
register. If a registration requested involves an underwritten public offering,
a Participating Stockholder may elect, in writing prior to the effective date of
the registration statement filed in connection with such registration, not to
register such securities in connection with such registration. The Company may
terminate its efforts to register such securities, including the Registrable
Securities, at any time without liability to any Participating Stockholder.
(b) If a registration involves an underwritten offering and the
managing underwriter advises the Company in writing that, in its opinion, the
amount of securities requested to be included in such registration by all
selling holders exceeds the amount which can be sold in such offering, so as to
be likely to have an adverse effect on such offering as contemplated by the
Company (including the price at which the Company proposes to sell such
securities), then the Company will include in such registration (i) first, 100%
of either (A) the Common Stock the Company proposes to sell on a primary basis
or (B) the Common Stock a holder proposes to sell upon exercise of "demand"
registration rights pursuant to Section 2, (ii) second, to the extent of the
amount of Registrable Securities requested to be included in such registration
which, in the opinion of such managing underwriter, can be sold without having
the adverse effect referred to above, the amount of Registrable Securities which
the holders have requested to be included in such registration, such amount to
be allocated pro rata among holders exercising "piggyback" registration rights
on the basis of the relative number of shares of securities then held by each
such holder (provided, that any securities thereby allocated to any such holder
that exceed such holder's request will be reallocated among the remaining
requesting holders in like manner).
4. Registration Expenses.
The Company shall be responsible for any and all expenses incident to
performance of or compliance with the registration rights set forth in this
Agreement, including, without limitation, (i) all SEC and stock exchange or
National Association of Securities Dealers, Inc. registration and filing fees,
(ii) all fees and expenses of complying with securities or blue sky laws
(including fees and disbursements of counsel for the underwriters in connection
with blue sky qualifications), (iii) all printing, messenger, and delivery
expenses, (iv) all fees and expenses incurred in connection with the listing of
the securities on any securities exchange or The Nasdaq Stock Market, (v) the
fees and disbursements of counsel for the Company and of its independent public
accountants, including the expenses of any special audits and/or "cold comfort"
letters required by or incident to such performance and compliance, (vi) the
reasonable fees and disbursements of one counsel selected by the Participating
Stockholders to represent them in connection with each such registration, and
(vii) any fees and disbursements of underwriters customarily paid by the issuers
or sellers of securities, including liability insurance if the Company so
desires, and the reasonable fees and expenses of any special experts retained in
connection with the requested registration, but excluding underwriting discounts
and commissions and transfer taxes, if any.
5. Registration Procedures.
If and whenever the Company is required to use its best efforts to
effect or cause the registration of any Registrable Securities under the
Securities Act as provided in this Agreement, the Company will as expeditiously
as possible:
(a) prepare and, in any event within 60 days after the end of the
period within which all other requests for registration may be given to the
Company, file with the SEC a registration statement with respect to such
Registrable Securities and use its best efforts to cause such registration
statement to become effective;
(b) prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection therewith as
may be necessary to keep such registration statement effective for a period not
in excess of 135 days and to comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such registration
statement during such period in accordance with the intended methods of
disposition by the seller or sellers thereof set forth in such registration
statement; provided, that before filing a registration statement or prospectus,
or any amendments or supplements thereto, the Company will furnish to one
counsel selected by the holders of a majority of the Registrable Securities
covered by such registration statement to represent all holders of Registrable
Securities covered by such registration statement, copies of all documents
proposed to be filed, which documents will be subject to the review of such
counsel;
(c) furnish to each seller of such Registrable Securities such number
of copies of such registration statement and of each amendment and supplement
thereto (in each case including all exhibits), such number of copies of the
prospectus included in such registration statement (including each preliminary
prospectus and summary prospectus), in conformity with the requirements of the
Securities Act, and such other documents as such seller may reasonably request
in order to facilitate the disposition of the Registrable Securities by such
seller;
(d) use its best efforts to register or qualify such Registrable
Securities covered by such registration statement under such other securities or
blue sky laws of such jurisdictions where such registration or qualification is
required and which seller shall reasonably request, and do any and all other
acts and things which may be reasonably necessary or advisable to enable such
seller to consummate the disposition in such jurisdictions of the Registrable
Securities owned by such seller, except that the Company shall not for any such
purpose be required to qualify generally to do business as a foreign Company in
any jurisdiction where, but for the requirements of this clause (d), it would
not be obligated to be so qualified, to subject itself to taxation in any such
jurisdiction, or to consent to general service of process in any such
jurisdiction;
(e) use its best efforts to cause such Registrable Securities covered
by such registration statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the seller or
sellers thereof to consummate the disposition of such Registrable Securities;
(f) immediately notify the Participating Stockholders at any time when
a prospectus relating thereto is required to be delivered under the Securities
Act within the appropriate period mentioned in clause (b), of the Company's
becoming aware that the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing, and at the request of a Participating Stockholder, prepare and furnish
to such Participating Stockholder a reasonable number of copies of an amended or
supplemental prospectus as may be necessary so that, as thereafter delivered to
the purchasers of such Registrable Securities, such prospectus shall not include
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
in the light of the circumstances then existing. If the Board determines that
such amended or supplemental prospectus should not be prepared and filed due to
a valid need not to disclose confidential information or because either would
materially interfere with any material financing, acquisition, corporate
reorganization, or merger involving the Company, then the Company shall have the
right, upon giving the notice under this Section 5(f), to postpone such
requirement to deliver an amended or supplemental prospectus for a single 60-day
period, provided, that, (i) the period during which the Company is obligated to
keep the registration statement effective under Section 5(b) shall be extended
by the duration of such postponement and (ii) the Company states in such notice
that it is postponing its delivery of such amended or supplemental prospectus
pursuant to this sentence;
(g) otherwise use its best efforts to comply with all applicable rules
and regulations of the SEC, and make available to its security holders, as soon
as reasonably practicable (but not more than 15 months) after the effective date
of the registration statement, an earnings statement which shall satisfy the
provisions of Section 11(a) of the Securities Act and the rules and regulations
promulgated thereunder;
(h) use its best efforts to list such Registrable Securities on any
securities exchange (including without limitation the Nasdaq National Market) on
which the Common Stock is then listed, if such Registrable Securities are not
already so listed and if such listing is then permitted under the rules of such
exchange, and to provide a transfer agent and registrar for such Registrable
Securities covered by such registration statement not later than the effective
date of such registration statement;
(i) enter into such customary agreements (including an underwriting
agreement in customary form) and take such other actions customarily taken by
registrants as sellers of a majority of such Registrable Securities or the
underwriters, if any, reasonably request in order to expedite or facilitate the
disposition of such Registrable Securities;
(j) use commercially reasonable efforts to obtain a "cold comfort"
letter or letters from the Company's independent public accountants in customary
form and covering matters of the type customarily covered by "cold comfort"
letters as the seller or sellers of a majority of such Registrable Securities
shall reasonably request; and
(k) make available for inspection by any seller of such Registrable
Securities covered by such registration statement, by any underwriter
participating in any disposition to be effected pursuant to such registration
statement and by any attorney, accountant, or other agent retained by any such
seller or any such underwriter, all pertinent financial and other records,
pertinent corporate documents, and properties of the Company, and cause all of
the Company's officers, directors, and employees to supply all information
reasonably requested by any such seller, underwriter, attorney, accountant, or
agent in connection with such registration statement.
As a condition to the Company's obligation under this Section 5 to
cause a registration statement or an amendment to be filed, or Common Stock to
be included in the registration statement, each Participating Stockholder shall
provide such information and execute such documents (including any agreement or
undertaking relating to expenses, indemnification or other matters to the extent
consistent with the provisions of this Agreement) as may reasonably be required
by the Company in connection with such registration. In addition, Participating
Stockholders shall provide counsel for the Company with such documents and
information as may be reasonably requested by counsel for the Company.
6. Indemnification.
(a) In the event of any registration of any securities of the Company
under the Securities Act, the Company will, and it hereby does, indemnify and
hold harmless, to the extent permitted by law, all Participating Stockholders,
each of their affiliates, and their respective directors and officers, general
and limited partners or members (and the directors, officers, affiliates, and
controlling Persons thereof), each other Person who participates as an
underwriter in the offering or sale of such securities and each other Person, if
any, who controls such seller or any such underwriter within the meaning of the
Securities Act (collectively, the "Indemnified Parties"), against any and all
losses, claims, damages, or liabilities, joint or several, and expenses to which
such seller, any such director or officer, general or limited partner, or member
or affiliate or any such underwriter or controlling Person may become subject
under the Securities Act, common law or otherwise, insofar as such losses,
claims, damages, or liabilities (or actions or proceedings in respect thereof,
whether commenced or threatened, and whether or not such Indemnified Party is a
party thereto) arise out of or are based upon (a) any untrue statement or
alleged untrue statement of any material fact contained in any registration
statement under which such securities were registered under the Securities Act,
any preliminary, final, or summary prospectus contained therein or any amendment
or supplement thereto, or (b) any omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, and the Company will reimburse such
Indemnified Party for any legal or any other expenses reasonably incurred by it
in connection with investigating or defending any such loss, claim, liability,
action, or proceeding; provided, that the Company shall not be liable to any
Indemnified Party in any such case to the extent that any such loss, claim,
damage, liability (or action or proceeding in respect thereof), or expense
arises out of or is based upon (i) any untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement or
amendment or supplement thereto or in any such preliminary, final, or summary
prospectus in reliance upon and in conformity with written information with
respect to a Participating Stockholder furnished to the Company by such
Participating Stockholder for use in the preparation thereof, or (ii) an untrue
statement or alleged untrue statement, omission or alleged omission in a
prospectus if such untrue statement or alleged untrue statement, omission or
alleged omission is corrected in an amendment or supplement to such prospectus
which amendment or supplement is delivered to such Participating Stockholder in
a timely manner and such Participating Stockholder thereafter fails to deliver
such prospectus as so amended or supplemented prior to or concurrently with the
sale of such Registrable Securities to the Person asserting such damages. The
indemnity agreements shall not apply to amounts paid in settlement of claims if
such settlement is effectuated without the consent of the Company (which shall
not be unreasonably withheld). Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of such seller or
any Indemnified Party and shall survive the transfer of such securities by such
seller.
(b) In the event of any registration of any securities of the Company
under the Securities Act, each prospective seller thereunder will, and it hereby
does, indemnify and hold harmless (in the same manner and to the same extent as
set forth in Section 6(a)) the Company, with respect to any statement or alleged
statement in or omission or alleged omission from such registration statement,
any preliminary, final, or summary prospectus contained therein, or any
amendment or supplement, if such statement or alleged statement or omission or
alleged omission was made in reliance upon and in conformity with written
information with respect to such seller furnished to the Company by such seller
for use in the preparation of such registration statement, preliminary, final or
summary prospectus or amendment or supplement, or a document incorporated by
reference into any of the foregoing; provided, however, that the indemnity
agreement contained in this Section 6(b) shall not apply to amounts paid in
settlement of any loss, claim, damage, liability, or action arising pursuant to
a registration if such settlement is effected without the consent of such seller
(which consent shall not be unreasonably withheld). Such indemnity shall remain
in full force and effect regardless of any investigation made by or on behalf of
the Company or any of the prospective sellers, or any of their respective
affiliates, directors, officers, or controlling Persons and shall survive the
transfer of such securities by such seller.
(c) Promptly after receipt by an indemnified party hereunder of
written notice of the commencement of any action or proceeding with respect to
which a claim for indemnification may be made pursuant to this Section 6, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party, give written notice to the latter of the commencement of
such action; provided, that the failure of the indemnified party to give notice
as provided herein shall not relieve the indemnifying party of its obligations
under this Section 6, except to the extent that the indemnifying party is
actually prejudiced by such failure to give notice. In case any such action is
brought against an indemnified party, unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, the indemnifying party
will be entitled to participate in and to assume the defense thereof, jointly
with any other indemnifying party similarly notified to the extent that it may
wish, with counsel reasonably satisfactory to such indemnified party, and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party will not be liable to such
indemnified party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof. No indemnifying party will
consent to entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof, the giving by the claimant or
plaintiff to such indemnified party of a release from all liability in respect
to such claim or litigation.
(d) Indemnification similar to that specified herein (with appropriate
modifications) shall be given by the Company and each seller of Registrable
Securities with respect to any required registration or other qualification of
securities under any federal or state law or regulation or governmental
authority other than the Securities Act.
7. Hold-Back Agreements
In connection with each public offering, each Stockholder and the
Company shall agree not to effect any public sale or distribution, including any
sale pursuant to Rule 144 under the Securities Act, of any equity securities of
the Company, or of any security convertible into or exchangeable or exercisable
for any equity security of the Company (in each case, other than as part of such
underwritten public offering), within seven days before or 90 days (or such
lesser period as the managing underwriters may permit) after the effective date
of such registration; provided that a Stockholder shall be so limited only if
notice of the effective date of such registration statement has been given to
such Stockholder. The Company hereby also agrees to use its best efforts to
cause as the managing underwriters may require each other holder ("Non-Public
Holders") of any equity security, or of any security convertible into or
exchangeable or exercisable for any equity security, of the Company purchased
from the Company (at any time other than in a public offering) to so agree. The
foregoing provisions shall not apply to any holder of Registrable Securities if
such holder is prevented by applicable statute or regulation from entering into
any such agreement; provided, however, that any such holder shall undertake, in
its request to participate in any such underwritten offering, not to effect any
public sale or distribution of Registrable Securities (except as part of such
underwritten registration) during such period unless it has provided 45 days
prior written notice of such sale or distribution to the managing underwriter or
underwriter.
8. Miscellaneous
(a) Amendment and Modification. This Agreement may be amended only in
a writing executed by all the parties hereto. No course of dealing between or
among any Persons having any interest in this Agreement will be deemed effective
to modify, amend or discharge any part of this Agreement or any rights or
obligations of any person under or by reason of this Agreement.
(b) Successors and Assigns; Entire Agreement. This Agreement and all
of the provisions hereof shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns and
executors, administrators and heirs. In addition, whether or not any express
assignment has been made, the provisions of this Agreement which are for the
benefit of purchasers or holders of Registrable Securities are also for the
benefit of, and enforceable by, any subsequent holder of Registrable Securities.
This Agreement, together with the Stock Purchase Agreement, Stockholders'
Agreement and the ancillary agreements and instruments entered into in
connection herewith and therewith, sets forth the entire agreement and
understandings among the parties as to the subject matter hereof and thereof and
merges and supersedes all prior discussions and understandings of any and every
nature among them.
(c) Separability. In the event that any provision of this Agreement or
the application of any provision hereof is declared to be illegal, invalid or
otherwise unenforceable by a court of competent jurisdiction, the remainder of
this Agreement shall not be affected except to the extent necessary to delete
such illegal, invalid or unenforceable provision unless that provision held
invalid shall substantially impair the benefits of the remaining portions of
this Agreement.
(d) 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, to:
Galileo Corporation
Galileo Park
X.X. Xxx 000
Xxxxxxxxxx, XX 00000-0000
Attention: President
Fax: 000-000-0000
with a copy to:
Xxxxxx & Dodge LLP
Xxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, Xx., Esq.
Fax: 000-000-0000
if to Investor, to:
Andlinger Capital XIII LLC
c/o Andlinger & Company, Inc.
000 Xxxxx Xxxxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Fax: 000-000-0000
with a required copy to:
Dechert Price & Xxxxxx
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxx, Esq.
Fax: 000-000-0000
If to Xxxxx, to:
Xxxx X. Xxxxx, Xx.
Optical Filter Corporation
Xxx Xxxxxx Xxxx
Xxxxxx, XX 00000
Fax: 000-000-0000
If to Speyer, to:
W. Xxx Xxxxxx
Leisegang Medical, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxx Xxxxx, XX 00000
Fax: 000-000-0000
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).
(e) Governing Law. The validity, performance, construction and effect
of this Agreement shall be governed by and construed in accordance with the
internal law of Delaware, without giving effect to principles of conflicts of
laws.
(f) Headings. The headings in this Agreement are for convenience of
reference only and shall not constitute a part of this Agreement, nor shall they
affect their meaning, construction or effect.
(g) Counterparts. This Agreement may be executed in two or more
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original, and all of which taken
together shall constitute one and the same instrument.
(h) Further Assurances. Each party shall cooperate and take such
action as may be reasonably requested by another party in order to carry out the
provisions and purposes of this Agreement and the transactions contemplated
hereby.
(i) Effectiveness; Termination. This Agreement shall be effective upon
the consummation of the transactions contemplated by the Stock Purchase
Agreement and, unless sooner terminated, shall terminate ten years after the
date of this Agreement and any additional period permitted by law, provided that
the indemnification rights and obligations set forth in Section 6 hereof shall
survive the termination of this Agreement.
(j) Remedies. In the event of a breach or a threatened breach by any
party to this Agreement of its obligations under this Agreement, any party
injured or to be injured by such breach, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Agreement, it being
agreed by the parties that the remedy at law, including monetary damages, for
breach of such provision will be inadequate compensation for any loss and that
any defense in any action for specific performance that a remedy at law would be
adequate is waived.
(k) Party No Longer Owning Registrable Securities. If a party hereto
ceases to own any Registrable Securities, such party will no longer be deemed to
be a Stockholder for purposes of this Agreement; provided that the
indemnification rights and obligations set forth in Section 6 hereof shall
survive any such cessation of ownership.
(l) Pronouns. Whenever the context may require, any pronouns used
herein shall be deemed also to include the corresponding neuter, masculine or
feminine forms.
(m) No Effect on Employment. Nothing herein contained shall confer on
any Stockholder the right to remain in the employ of the Company or any of its
subsidiaries or Affiliates.
IN WITNESS WHEREOF, the parties hereto have executed this Registration
Rights Agreement as of the day and year first above written.
GALILEO CORPORATION
By: ________________________________
Name: W. Xxx Xxxxxx
Title: President
ANDLINGER CAPITAL XIII LLC
By: ________________________________
Xxxxxxx X. Xxxxxx
Title: Manager
____________________________________
Xxxx X. Xxxxx, Xx.
____________________________________
W. Xxx Xxxxxx
Exhibit C
STOCKHOLDERS' AGREEMENT
This is a STOCKHOLDERS' AGREEMENT ("Agreement"), dated December 22, 1998,
among GALILEO CORPORATION, a Delaware corporation (the "Company"), ANDLINGER
CAPITAL XIII LLC, a Connecticut limited liability company ("Investor"), XXXX X.
XXXXX, XX. ("Xxxxx") and W. XXX XXXXXX ("Speyer") (Xxxxx, Speyer and Investor
are sometimes referred to hereinafter individually as a "Stockholder" and
collectively as the "Stockholders").
Background
A. The Company and the Investor have entered into a Securities Purchase
Agreement dated the date hereof (the "Stock Purchase Agreement") pursuant to
which, among other things, the Company will sell to the Investor, and the
Investor will purchase from the Company, certain Shares of and Warrants for
Common Stock of the Company, as such terms are defined in, and upon the terms
and subject to the conditions set forth in, the Stock Purchase Agreement.
B. The Stockholders wish to enter into this Agreement to set forth, among
other things, certain limitations with respect to their ownership and transfer
of Securities upon the terms and subject to the conditions set forth herein.
Terms
In consideration of the promises, covenants and agreements set forth herein
and in the Stock Purchase Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
each of the parties hereto, intending to be legally bound hereby, agrees as
follows:
1. Term
1.1 Term. This Agreement shall become effective concurrently with the
closing of the transactions contemplated by the Stock Purchase Agreement and
shall remain in effect for a period of three years thereafter (such period being
the "Term").
2. Covenants
2.1 Covenants. During the Term, without the prior written consent of each
of the other Stockholders party hereto, no Stockholder or any Permitted
Transferee of such Stockholder shall Transfer any Securities, except
(a) pursuant to a bona fide underwritten public offering registered
under the Securities Act which provides for a widely distributed public
offering;
(b) pursuant to transactions involving Securities registered under the
Securities Act pursuant to "demand" or "piggyback" registration rights under the
Registration Rights Agreement;
(c) to a Permitted Transferee;
(d) during each fiscal quarter of the Company, Xxxxx and his Permitted
Transferees may (i) Transfer in the aggregate up to 75,000 shares of Common
Stock in one or more transactions and (ii) pledge in the aggregate up to an
additional 50,000 shares of Common Stock in one or more pledges provided, that
(A) the pledgee is either reasonably satisfactory to the Company or a financial
institution, (B) the obligations secured by such pledge provide for full
recourse against Xxxxx and (C) if at any time Xxxxx defaults on any obligation
secured by a pledge of Common Stock of the Company, then upon and following such
default and until such default is cured or waived, Xxxxx may no longer pledge
shares of Common Stock pursuant to this clause (ii) and the aggregate number of
shares of Common Stock that may be Transferred pursuant to clause (i) above
shall be reduced to 50,000 per fiscal quarter of the Company;
(e) during each fiscal quarter of the Company, Speyer and his
Permitted Transferees may Transfer an aggregate of up to 10,000 shares of Common
Stock in one or more transactions;
(f) pursuant to a tender offer made to all the holders of the
Company's Common Stock; and
(g) pursuant to any transaction duly approved by the stockholders of
the Company.
The number of shares permitted to be Transferred or pledged pursuant
to paragraphs (d) and (e) shall in each case be adjusted to take into account
the pro rata effect of stock dividends, stock distributions, stock splits,
reverse stock splits, stock combinations, recapitalizations, reclassifications,
subdivisions, conversions or similar transactions in respect of Common Stock.
2.2 Certain Transferees To Be Bound. No Stockholder or Permitted Transferee
may effect any Transfer to a Permitted Transferee unless such Permitted
Transferee executes an agreement pursuant to which such Permitted Transferee
agrees to be bound by the terms and provisions of this Agreement applicable to
the transferor. Any purported Transfer in violation of this Section 2.2 shall be
null and void and of no force and effect and the purported transferee shall have
no rights or privileges in or with respect to the Company. The Company shall not
register or record or permit a transfer agent to register or record on the stock
record books of the Company any purported Transfer to a Permitted Transferee
unless and until it has received evidence that such Transfer and the parties
thereto have complied with this Section 2.2. In no event shall any Transferee of
Securities other than a Transferee pursuant to Section 2.1(c) be subject to this
Section 2.2.
2.3 Other Restrictions May Apply. Each Stockholder (and Permitted
Transferee who becomes subject to this Agreement) acknowledges that the
restrictions set forth herein are in furtherance and not in limitation of any
other restrictions that may be imposed by the Securities Act, the Exchange Act
or other U.S. federal securities laws and the rules and regulations thereunder,
state securities laws and the rules and regulations thereunder, any other
governmental authority or any rules and regulations of The Nasdaq Stock Market,
Inc. or the National Association of Securities Dealers, Inc.
3. Definitions.
For purposes of this Agreement, the following terms shall have the
following meanings:
3.1 Affiliate. An "Affiliate" of a person shall have the meaning set forth
in Rule 12b-2 of the Exchange Act as in effect on the date hereof and, in
addition, shall include "Associates" (as defined in Rule 12b-2 of the Exchange
Act as in effect on the date hereof) of such Person and its Affiliates.
3.2 Common Stock. "Common Stock" means the common stock, par value $.01 per
share, of the Company.
3.3 Exchange Act. "Exchange Act" means the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder as in effect
from time to time.
3.4 Permitted Transferee. "Permitted Transferee" means
(a) in the case of Xxxxx or any Permitted Transferee of Xxxxx, (i)
Xxxxx'x spouse or children or grandchildren (in each case, natural or adopted)
or any trust for the sole benefit of Xxxxx or Xxxxx'x spouse or children or
grandchildren (in each case, natural or adopted) and (ii) the heirs, executors,
administrators or personal representatives upon the death of Xxxxx or upon the
incompetency or disability of Xxxxx for purposes of the protection and
management of his assets;
(b) in the case of Speyer or any Permitted Transferee of Speyer, (i)
Speyer's spouse or children or grandchildren (in each case, natural or adopted)
or any trust for the sole benefit of Speyer or Speyer's spouse or children or
grandchildren (in each case, natural or adopted) and (ii) the heirs, executors,
administrators or personal representatives upon the death of Speyer or upon the
incompetency or disability of Speyer for purposes of the protection and
management of his assets;
(c) in the case of Investor or any Permitted Transferee of Investor,
(i) the members of Investor, (ii) the spouse or children or grandchildren (in
each case, natural or adopted) or any trust for the sole benefit of the spouse
or children or grandchildren (in each case, natural or adopted) of any member of
Investor, (iii) the heirs, executors, administrators or personal representatives
upon the death of any member of Investor or upon the incompetency or disability
of any member of Investor for purposes of the protection and management of the
assets of such member; and (iv) any Affiliate of Investor or its members.
3.5 Person. "Person" means any natural person, group, corporation, limited
liability company, partnership, business association, trust, firm, government or
agency or political subdivision thereof, or other entity of whatever nature.
3.6 Registration Rights Agreement. "Registration Rights Agreement" means
the Registration Rights Agreement dated the date hereof among the Company and
the Stockholders.
3.7 Securities. "Securities" means the shares of Common Stock held by any
party hereto and all other securities of the Company (or a successor to the
Company) received on account of ownership of such shares of Common Stock,
including all securities issued in connection with any stock dividend, stock
distribution, stock split, reverse stock split, stock combination,
recapitalization, reclassification, subdivision, conversion or similar
transaction in respect thereof, but excluding any securities received on account
of such ownership in any merger or consolidation.
3.8 Securities Act. "Securities Act" means the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder as in effect from
time to time.
3.9 Transfer. "Transfer" means the making of any sale, exchange,
assignment, hypothecation, gift, security interest, pledge or other encumbrance,
or any contract therefor, any voting trust or other agreement or arrangement
with respect to the transfer of voting rights or any other beneficial interest
in any of the Securities, the creation of any other claim thereto or any other
transfer or disposition whatsoever, whether voluntary or involuntary, affecting
the right, title, interest or possession in or to such Securities.
4. Miscellaneous
4.1 Legends. Each certificate or instrument representing Securities subject
to the terms of this Agreement will bear the following legends in addition to
any other legend required by law:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND
CONDITIONS OF A STOCKHOLDERS' AGREEMENT AMONG THE COMPANY AND THE HOLDERS
SPECIFIED THEREIN, A COPY OF WHICH AGREEMENT IS ON FILE AT THE PRINCIPAL
OFFICE OF THE COMPANY. THE SALE, TRANSFER OR OTHER DISPOSITION OF THE
SECURITIES IS SUBJECT TO THE TERMS OF SUCH AGREEMENT AND THE SECURITIES ARE
TRANSFERABLE ONLY UPON PROOF OF COMPLIANCE THEREWITH.
4.2 Governing Law; Severability. This Agreement shall be governed by the
laws of the State of Delaware without giving effect to conflicts of law
principles thereof. If any provision of this Agreement shall be declared invalid
or unenforceable by a court of competent jurisdiction, the remaining provisions
hereof shall remain valid and shall continue in effect.
4.3 Binding Effect on Successor. This Agreement shall be binding upon and
inure to the benefit of the Company and the Stockholders, and to their
respective successors and permitted assigns, including any successors to the
Company or the Stockholders or their businesses or assets as the result of any
merger, consolidation, reorganization, transfer of assets or otherwise, and any
subsequent successor thereto, without the execution or filing of any instrument
or the performance of any act.
4.4 Specific Performance. The Stockholders and the Company acknowledge and
agree that irreparable injury to the other party would occur in the event any of
the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached and that such injury would not be
compensable in damages. It is accordingly agreed that each part hereto (the
"Moving Party") shall be entitled to specific enforcement of, and injunctive
relief to prevent any violation of the terms hereof, and the other parties
hereto will not take action, directly or indirectly, in opposition to the Moving
Party seeking such relief on the grounds that any other remedy or relief is
available at law or in equity. The parties further agree that no bond shall be
required as a condition to the granting of any such relief.
4.5 No Waiver. Any waiver by any party of a breach of any provision of this
Agreement shall not operate as or be construed to be a waiver of any other
breach of such provision or of any breach of any other provision of this
Agreement. The failure of a party to insist upon strict adherence to any term of
this Agreement on one or more occasions shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement.
4.6 Entire Agreement; Amendments. This Agreement, together with the Stock
Purchase Agreement and other agreements entered into in connection herewith and
therewith, constitute the entire understanding of the parties with respect to
the subject matter hereof and thereof. This Agreement may be amended only by a
written instrument duly executed by the parties or their respective successors
or assigns.
4.7 Headings. The section headings contained in the Agreement are for
reference purposes only and shall not effect in any way the meaning or
interpretation of this Agreement.
4.8 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by hand delivery, facsimile, mail
(registered or certified, postage prepaid, return receipt requested) or
recognized express carrier or delivery service to the respective parties as
follows:
If to the Company, to:
Galileo Corporation
Galileo Park
X.X. Xxx 000
Xxxxxxxxxx, XX 00000-0000
Attention: President
Fax: 000-000-0000
with a copy to:
Xxxxxx & Dodge LLP
Xxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, Xx., Esq.
Fax: 000-000-0000
if to Investor, to:
Andlinger Capital XIII LLC
c/o Andlinger & Company, Inc.
000 Xxxxx Xxxxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Fax: 000-000-0000
with a required copy to:
Dechert Price & Xxxxxx
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxx, Esq.
Fax: 000-000-0000
If to Xxxxx, to:
Xxxx X. Xxxxx, Xx.
Optical Filter Corporation
Xxx Xxxxxx Xxxx
Xxxxxx, XX 00000
Fax: 000-000-0000
If to Speyer, to:
W. Xxx Xxxxxx
Leisegang Medical, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxx Xxxxx, XX 00000
Fax: 000-000-0000
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.
4.9 Further Assurances. From time to time on and after the date hereof, the
Company and the Stockholders, as the case may be, shall deliver or cause to be
delivered to the other party hereto such further documents and instruments and
shall do and cause to be done such further acts as the other party hereto shall
reasonably request to carry out more effectively the provisions and purposes of
this Agreement, to evidence compliance herewith or to assure that it is
protected in acting hereunder.
4.10 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original and all of which together shall be deemed one
and the same instrument.
4.11 IN WITNESS WHEREOF, the Company and the Stockholders have executed
this Agreement, or have caused this Agreement to be executed by duly authorized
officers, as of the day and year first above written.
GALILEO CORPORATION
By: _______________________________
Name: W. Xxx Xxxxxx
Title: President
ANDLINGER CAPITAL XIII LLC
By: _______________________________
Xxxxxxx X. Xxxxxx
Title: Manager
______________________________
Xxxx X. Xxxxx, Xx.
______________________________
W. Xxx Xxxxxx
Exhibit D
Form of Opinion of Counsel to the Company
The opinion will be to the following effect with such customary
qualifications as to scope as are reasonably satisfactory to counsel for the
Purchaser. Capitalized terms used herein which are not otherwise defined herein
shall have the meanings ascribed to them in the Securities Purchase Agreement,
dated December __, 1998, by and among Andlinger Capital XIII Trust ("Purchaser")
and [Public Co.] (the "Agreement").
1. The Company is a corporation validly existing and in good standing under the
laws of the State of Delaware and has the requisite corporate power to carry on
its business as it is now being conducted.
2. Each of Leisegang Medical, Inc. and Optical Filter Corporation is a
corporation validly existing and in good standing under the laws of its
jurisdiction of incorporation and has the requisite corporate power to carry on
its business as it is now being conducted. Except as set forth on Schedule
2.1(b) of the Agreement, all of the outstanding shares of capital stock of each
such subsidiary have been validly issued, are fully paid and nonassessable and
are owned of record by the Company or by another wholly owned subsidiary of the
Company.
3. The authorized capital stock of the Company consists solely of __________
shares of Common Stock. As of the date hereof, ___________ shares of Common
Stock are reserved in the aggregate for issuance pursuant to the Company's Stock
Option Plans, and _________ shares of Common Stock are reserved for issuance
pursuant to the Warrants.
4. The Company has all requisite corporate power and authority to execute and
deliver the Agreement and to consummate the transactions contemplated thereby.
The execution and delivery of the Agreement by the Company and the consummation
by the Company of the transactions contemplated thereby (including, without
limitation, the issuance of the Shares, the Warrants and the Conversion Shares)
have been duly and validly authorized by the Board of Directors of the Company,
and no other corporate proceedings on the part of the Company are necessary to
authorize this Agreement or to consummate the transactions so contemplated. The
Agreement has been duly and validly executed and delivered by the Company, and,
assuming the Agreement constitutes a valid and binding obligation of the
Investor, the Agreement constitutes a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms, subject
to applicable bankruptcy, insolvency, reorganization, moratorium and other laws
affecting creditors rights generally and to general principles of equity.
5. The Shares, upon issuance in accordance with the terms of the Agreement, will
be duly authorized, validly issued, fully paid and nonassessable, and free from
all issuance taxes, liens, claims and encumbrances with respect to the issue
thereof and shall not be subject to preemptive rights of stockholders of the
Company and will not impose personal liability upon the holder thereof. The
Conversion Shares are duly authorized and reserved for issuance, and, upon the
exercise of the Warrant from time to time in accordance with the terms thereof,
will be validly issued, fully paid and nonassessable, and if issued on the date
hereof in accordance with the terms thereof would be free from all issuance
taxes, liens, claims and encumbrances with respect to the issue thereof and
would not be subject to preemptive rights of stockholders of the Company and
would not impose personal liability upon the holder thereof.
6. Except as set forth in Schedule 2.8 of the Agreement, neither the execution
and delivery of the Agreement by the Company nor the consummation of the
transactions contemplated thereby (including the issuance of the Shares, the
Warrant and the Conversion Shares) will result in any violation of or default
(with or without notice or lapse of time, or both) under, or give rise to a
right of termination, cancellation or acceleration of any obligation, or result
in the creation of any Lien upon any of the properties or assets or the Company
or any of its subsidiaries under, (a) the Certificate of Incorporation, as
amended, or Bylaws of the Company or the comparable charter or organizational
documents of any of its subsidiaries, (b) any instrument, contract or agreement
listed in any schedule to the Agreement to which the Company or any of its
subsidiaries is a party or by which any of their assets or properties is bound,
or (c) subject to the governmental filings and other matters referred to in the
following sentence, any judgment, order, decree, statute, law, ordinance, rule
or regulation known to us applicable to the Company or any of its subsidiaries
or their respective properties or assets, other than, in the case of clauses (b)
or (c), any such violations, defaults, rights or Liens that individually or in
the aggregate could not reasonably be expected to have a Material Adverse
Effect.
7. No consent, approval, order or authorization of, or registration, declaration
or filing with, any Governmental Entity, is required by the Company or any of
its subsidiaries in connection with the execution and delivery of the Agreement
by the Company or the consummation by the Company of the transactions
contemplated by the Agreement (including the issuance of the Shares and the
Conversion Shares), except for the NASDAQ waiver contemplated by Section 5.1(k)
of the Agreement, which has been obtained.
8. Except as disclosed in the SEC Documents or as set forth in Schedule of the
Agreement, to our knowledge there is no suit, action or proceeding pending or,
to our knowledge, threatened against the Company or any of its subsidiaries that
could reasonably be expected to have a Material Adverse Effect, nor to our
knowledge, is there any judgment, decree, injunction, rule or order of any
Governmental Entity or arbitrator outstanding against the Company or any of its
subsidiaries that could reasonably be expected to have a Material Adverse
Effect.
9. The Board of Directors of the Company has taken all action necessary to
approve the acquisition of shares of Common Stock by each Investor pursuant to
this Agreement (which shares represent 15% or more of the voting stock of the
Company) in accordance with and pursuant to Section 203(a)(1) of the DGCL.
10. Based upon the factual representations and warranties made by the Investor
in the Agreement, including without limitation, in Section 3.4 of the Agreement,
the offer, issue, sale and delivery of the Shares and the Warrant Agreement
under the circumstances contemplated by the Agreement constitute exempted
transactions under the Securities Act of 1933, as amended.
