Execution Copy
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: /s/ W. Xxx Xxxxxx
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Name: W. Xxx Xxxxxx
Title: President
ANDLINGER CAPITAL XIII LLC
By: /s/ Xxxxxxx X. Xxxxxx
---------------------
Xxxxxxx X. Xxxxxx
Title: Manager
/s/ Xxxx X. Xxxxx, Xx.
----------------------
Xxxx X. Xxxxx, Xx.
/s/ W. Xxx Xxxxxx
-----------------
W. Xxx Xxxxxx
