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EXHIBIT 2.9
PHOTONIC SENSOR SYSTEMS, INC.
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AMENDED AND RESTATED
PREFERRED STOCK PURCHASE AGREEMENT
OF UP TO
3,244,500 SHARES
OF
SERIES A CONVERTIBLE PREFERRED STOCK
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May 31, 2001
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TABLE OF CONTENTS
Page
ARTICLE 1. AMENDMENT AND RESTATEMENT; AUTHORIZATION AND
SALE OF THE SHARES...............................................1
1.1 Amendment and Restatement........................................1
1.2 Authorization....................................................1
1.3 Sale of the Shares...............................................2
ARTICLE 2. CLOSING; PURCHASES; DELIVERY.....................................3
2.1 Closing..........................................................3
2.2 Subsequent Purchases.............................................3
2.3 Deliveries.......................................................3
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY....................5
3.1 Organization and Qualification...................................5
3.2 Articles of Incorporation and Bylaws.............................5
3.3 Corporate Power..................................................5
3.4 Subsidiaries.....................................................5
3.5 Capitalization...................................................6
3.6 Authorization....................................................7
3.7 Title to Properties and Assets...................................7
3.8 Financial Statements.............................................7
3.9 Related-Party Transactions.......................................9
3.10 Permits..........................................................9
3.11 Intellectual Property............................................9
3.12 Material Contracts..............................................10
3.13 Compliance with Laws and Other Instruments......................10
3.14 Litigation......................................................11
3.15 Governmental Consent............................................11
3.16 Employees.......................................................11
3.17 Tax Returns, Payments, and Elections............................12
3.18 Warranty Claims.................................................12
3.19 Confidentiality and Nondisclosure Agreements....................12
3.20 Securities Act..................................................12
3.21 Employment Matters..............................................12
3.22 Employee Benefit Plans..........................................13
3.23 Environmental Laws and Regulations..............................14
3.24 No Bankruptcy Proceedings.......................................14
3.25 Disclosure......................................................14
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ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.................14
4.1 Experience......................................................14
4.2 Investment......................................................15
4.3 Rule 144........................................................15
4.4 No Public Market................................................15
4.5 Access to Data..................................................15
4.6 Authorization...................................................15
4.7 Accredited Investor.............................................16
4.8 Restrictions....................................................16
ARTICLE 5. CONDITIONS TO THE OBLIGATIONS OF PURCHASER......................16
5.1 Representations and Warranties..................................16
5.2 Covenants.......................................................16
5.3 Compliance Certificate..........................................16
5.4 Consents........................................................16
5.5 Reservation of Stock............................................17
5.6 No Litigation...................................................17
5.7 Shareholder's Agreement.........................................17
5.8 Registration Rights Agreement...................................17
5.9 Opinion of Counsel..............................................17
ARTICLE 6. CONDITIONS TO THE OBLIGATIONS OF THE COMPANY....................17
6.1 Representations and Warranties..................................17
6.2 Covenants.......................................................17
6.3 No Litigation...................................................18
6.4 Consents........................................................18
6.5 Shareholder's Agreement.........................................18
6.6 Registration Rights Agreement...................................18
ARTICLE 7. DISPUTE RESOLUTION..............................................18
7.1 Resolution by Advisory Board....................................18
7.2 Hearing.........................................................18
ARTICLE 8. INDEMNIFICATION.................................................19
8.1 Indemnification by the Company..................................19
8.2 Indemnification by the Purchaser................................19
8.3 Indemnification Procedures......................................19
8.4 Limitations on Indemnification..................................19
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ARTICLE 9. GENERAL PROVISIONS..............................................20
9.1 Governing Law...................................................20
9.2 Successors and Assigns; Third Party Beneficiaries...............20
9.3 Entire Agreement; Designation and Waiver........................20
9.4 Survival........................................................20
9.5 Notices, etc....................................................20
9.6 Delays or Omissions.............................................21
9.7 References......................................................21
9.8 Severability....................................................21
9.9 Pronouns........................................................21
9.10 Counterparts....................................................21
9.11 Remedies........................................................21
9.12 Certain Definitions.............................................22
9.13 Publicity.......................................................23
9.14 Fees and Expenses...............................................23
EXHIBIT INDEX
Exhibit A Certificate of Designation
Exhibit B Registration Rights Agreement
Exhibit C Shareholder's Agreement
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AMENDED AND RESTATED
PREFERRED STOCK PURCHASE AGREEMENT
THIS AMENDED AND RESTATED PREFERRED STOCK PURCHASE AGREEMENT
is made and entered into this 31st day of May, 2001, by and among PHOTONIC
SENSOR SYSTEMS, INC., a Georgia corporation (the "COMPANY"), and GENOMIC
SOLUTIONS INC., a Delaware corporation (the "PURCHASER").
W I T N E S S E T H:
WHEREAS, Purchaser and Seller have entered into that certain
Preferred Stock Purchase Agreement dated as of May 1, 2001 (the "ORIGINAL STOCK
PURCHASE AGREEMENT"), pursuant to which the Purchaser would purchase from the
Company, and the Company would issue and sell to the Purchaser, up to 3,244,500
shares of Preferred Stock of the Company, $.001 par value per share, on the
terms and conditions set forth therein; and
WHEREAS, the parties desire to amend and restate the Original
Stock Purchase Agreement as set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties, intending
to be legally bound, hereby agree as follows:
ARTICLE 1. AMENDMENT AND RESTATEMENT; AUTHORIZATION AND SALE OF THE SHARES
1.1 Amendment and Restatement.
In accordance with Section 9.3 of the Original Stock Purchase
Agreement, Purchaser and the Company hereby enter into this Amended and Restated
Preferred Stock Purchase Agreement, which shall be deemed to be effective as of
May 1, 2001, and which shall amend, modify, restate and supersede the Original
Stock Purchase Agreement for all purposes. From and after the execution of this
Amended and Restated Preferred Stock Purchase Agreement, the Original Stock
Purchase Agreement shall be of no further force or effect whatsoever.
1.2 Authorization
The Company shall authorize before the Closing (as defined below) the
issuance and sale of up to 3,244,500 shares of Series A Convertible Preferred
Stock of the Company, $.001 par value per share (the "SHARES"). The Shares shall
have the rights, preferences, privileges, and restrictions as set forth in the
Company's Certificate of Designation attached hereto as EXHIBIT "A" (the
"DESIGNATION") which shall be filed prior to the Closing to amend the Company's
Articles of Incorporation (as amended by the Designation, the "ARTICLES").
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1.3 Sale of the Shares
Subject to the terms and conditions hereof, the Company shall issue and
sell to the Purchaser, and the Purchaser shall purchase from the Company, at a
purchase price of $1.07875 per share, the number of Shares set forth below:
(a) Initially, the Company shall issue and sell to the
Purchaser, and the Purchaser will purchase from the Company, four hundred
sixty-three thousand five hundred (463,500) Shares for an aggregate purchase
price of Five Hundred Thousand Dollars ($500,000)(the "INITIAL PURCHASE").
(b) Concurrently with the execution of this Agreement, the
parties will enter into the Amended and Restated Research and Development
Agreement in the form mutually agreed upon by the parties (the "RESEARCH AND
DEVELOPMENT AGREEMENT"), which incorporates by reference the Development Plan
attached thereto as Exhibit "A" (the "DEVELOPMENT PLAN"). Within thirty (30)
days following receipt of the Company's written notice verifying that it has
achieved each of the development milestones (each referred to herein as a
"MILESTONE VERIFICATION NOTICE"), as described in the Development Plan
(collectively, the "DEVELOPMENT MILESTONES"), and subject to the procedures in
the Research and Development Agreement regarding rejection of such Milestone
Verification Notice, the Company shall issue and sell to the Purchaser, and the
Purchaser will purchase from the Company, the corresponding number of Shares set
forth below, for the aggregate purchase price set forth below (individually a
"MILESTONE PURCHASE" and collectively the "MILESTONE PURCHASES"):
MILESTONE PURCHASE PRICE NUMBER OF SHARES OUTSIDE COMPLETION DATE
--------- -------------- ---------------- -----------------------
Milestone 1 $750,000 695,250 shares September 30, 2001
Milestone 2 $1,000,000 927,000 shares January 31, 2002
Milestone 3 $1,250,000 1,158,750 shares July 31, 2002
The Milestone Purchases shall constitute the valid and legally binding
obligations of the Purchaser to pay the purchase price for the Shares as of
dates certain. Said obligations shall not be dependent upon any conditions
precedent other than the Company's delivery of the Milestone Verification Notice
for the respective Development Milestones, as provided in the Research and
Development Agreement. Without limiting the foregoing, the Purchaser's
obligations to complete the Milestone Purchases are not dependent upon the
Company's future financial performance or any other facts or circumstances that
would be material to an evaluation of the merits and risks of an investment in
the Company.
(c) In the event that the Company fails to meet any particular
Development Milestone by the Outside Completion Date set forth above, the
Purchaser shall have no obligation to complete any Milestone Purchase associated
with that Development Milestone or any subsequent Development Milestones, unless
such failure is waived by the Purchaser. The Purchaser's election to complete a
Milestone Purchase shall be deemed to be a waiver by the Purchaser of the
Company's failure to meet the applicable Development Milestone by the Outside
Completion Date.
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(d) Purchaser may elect at any time to cancel its
obligations with respect to future Milestone Purchases by giving written notice
to the Company (an "ELECTION TO CANCEL"). An Election to Cancel shall be
effective as of the earliest of the following: (i) immediately after completion
of the next Development Milestone and the associated Milestone Purchase;
(ii)upon the Company's delivery of express notice of abandonment of the next
Development Milestone; or (iii) one hundred eighty (180) days after the Outside
Completion Date for the next Development Milestone. If the Company completes a
Development Milestone before the effective date of the Election to Cancel, the
Purchaser shall be obligated to complete the associated Milestone Purchase.
ARTICLE 2. CLOSING; PURCHASES; DELIVERY
2.1 Closing
The initial purchase and sale of the Shares pursuant to SECTION 1.3(a)
of this Agreement (the "CLOSING") shall take place at the offices of ▇▇▇▇▇,
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLP, Suite 3100, Promenade II, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, at 10:00 a.m. (local time) on May 31, 2001 or at
such other date and time as the parties may agree (the "CLOSING DATE").
2.2 Subsequent Purchases
Subject to the Research and Development Agreement, any Milestone
Purchase, as described in SECTION 1.3(b), shall take place on the thirtieth
(30th) day after the Company's delivery of a Milestone Verification Notice for
the applicable Development Milestone, or at such other time as the parties may
agree.
2.3 Deliveries
(a) Simultaneously with the execution and delivery of
this Agreement, the Company and the Purchaser shall execute and deliver the
following documents:
(i) The Research and Development Agreement; and
(ii) the Amended and Restated License and
Distribution Agreement in the form mutually agreed upon by the
parties (the "LICENSE AGREEMENT").
In addition, the Company shall deliver to the Purchaser a consent from
the Georgia Tech Research Corporation and its assigns ("GEORGIA TECH")
consenting to the License Agreement.
(b) At the Closing, the Company and the Purchaser shall
execute and deliver the following documents:
(i) The Designation;
(ii) the Registration Rights Agreement in the form
attached as EXHIBIT "B" hereto (the "REGISTRATION RIGHTS
AGREEMENT");
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(iii) the Shareholder's Agreement in the form
attached as EXHIBIT "C" hereto (the "SHAREHOLDER'S
AGREEMENT"); and
(iv) all other agreements executed in connection
with the transactions contemplated hereby which by their terms
are to be executed at the Closing.
In addition, the Company shall deliver to the Purchaser an opinion of
counsel of ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLP in form reasonably satisfactory to the
Purchaser.
The agreements referred to in SECTION 2.3(A) and SECTION 2.3(B) above
are sometimes hereinafter referred to individually as an "ANCILLARY AGREEMENT"
and collectively as the "ANCILLARY AGREEMENTS."
(c) At the time of the Closing, the Purchaser shall pay
to the Company the purchase price set forth in SECTION 1.3(A) above, by wire
transfer of immediately available funds to an account designated by the Company,
and the Company shall deliver to the Purchaser a duly issued stock certificate
evidencing 463,500 Shares.
(d) At the time of each Milestone Purchase, the Purchaser
shall pay to the Company the appropriate purchase price for such Milestone
Purchase by wire transfer of immediately available funds to an account
designated by the Company, and the Company shall deliver to the Purchaser a duly
issued stock certificate for the appropriate number of Shares, all as set forth
in SECTION 1.3(B) above.
(e) The offer and sale of the Shares will be made
pursuant to an exemption from the registration requirements of the federal
Securities Act of 1933, as amended (the "SECURITIES ACT"), and such state
securities laws as shall be applicable. The Company may condition the purchase
and sale upon its receipt of such representations, factual assurances and legal
opinions as it shall reasonably deem necessary to determine and document the
availability of any such exemption and may further condition such exercise upon
such undertakings by the Purchaser or such restriction upon the transferability
of the Shares to be acquired hereunder as it shall reasonably determine to be
necessary to effectuate and protect the claim to any such exemption.
(f) The Company's delivery of a Milestone Verification
Notice shall constitute the Company's certification that, as of the date
thereof, (i) the Company is a corporation duly organized, validly existing, and
in good standing under the laws of its state of incorporation; (ii) that the
Company has the requisite corporate power and authority to own, lease, and
operate its assets, properties, and business and to carry on its business as it
is then being conducted or proposed to be conducted; (iii) the Company has all
requisite legal and corporate power and authority to issue and sell the Shares
and to carry out and perform its obligations under the terms of this Agreement;
(iv) the Shares, when issued, shall be free of any liens, claims, encumbrances,
or restrictions on transfer, except as specifically set forth in the
Shareholder's Agreement, the Registration Rights Agreement, and the Articles,
and except as set forth in SECTION 3.6 of the Disclosure Memorandum or as
otherwise expressly agreed by the Purchaser; and (v) subject to the accuracy of
the Purchaser's representations made pursuant to Section 2.3(e) and any filings
required under federal or state securities laws, the offer, sale, and
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issuance of the Shares in conformity with the terms of this Agreement constitute
transactions exempt from the registration requirements of Section 5 of the
Securities Act.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The representations and warranties set forth in this ARTICLE 3 are
modified and limited by the matters set forth in the Disclosure Memorandum dated
of even date herewith (the "DISCLOSURE MEMORANDUM") which the Company has
delivered to Purchaser. Any matter set forth in the Disclosure Memorandum shall
modify and/or limit the representations and warranties made under one or more
Sections of this ARTICLE 3 if such matter is set forth or cross-referenced in
the corresponding Section number of the Disclosure Memorandum, or if it is
reasonably apparent that the express disclosure made in one Section of the
Disclosure Memorandum modifies or limits a representation or warranty made in
another Section of this ARTICLE 3. Subject to the foregoing, the Company makes
the following representations and warranties to Purchaser as of the date of this
Agreement and (as to SECTIONS 3.1, 3.2, 3.3, 3.5, 3.6 AND 3.20 only) as of the
Closing Date.
3.1 Organization and Qualification
The Company is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Georgia and has the requisite
corporate power and authority to own, lease, and operate its assets, properties,
and business and to carry on its business as it is now being conducted or
proposed to be conducted. Except as set forth in SECTION 3.1 of the Disclosure
Memorandum, the Company is duly qualified as a foreign corporation to transact
business, and is in good standing, in each jurisdiction where it owns or leases
real property or maintains employees or where the nature of its activities make
such qualification necessary, except where the failure to be so qualified would
not have a Material Adverse Effect.
3.2 Articles of Incorporation and Bylaws
The Company has delivered to Purchaser true, correct, and complete
copies of the Company's Articles of Incorporation, as amended through the date
hereof, and Bylaws, as amended through the date hereof.
3.3 Corporate Power
The Company has all requisite legal and corporate power and authority
to execute and deliver this Agreement and the Ancillary Agreements, to issue and
sell the Shares hereunder, to issue the Conversion Stock, and to carry out and
perform its obligations under the terms of this Agreement, the Articles, and
each of the Ancillary Agreements.
3.4 Subsidiaries
The Company does not, directly or indirectly, own or control or have
any capital or other equity interest or participation in (or any interest
convertible into or exchangeable or exercisable for, any capital or other equity
interest or participation in), nor is the Company directly or
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indirectly, subject to any obligation or requirement to provide funds to or
invest in, any Person. The Company has no subsidiaries.
3.5 Capitalization
The authorized capital stock of the Company will, upon the filing of
the Designation, consist of 65,000,000 shares of which (i) 48,000,000 shares are
designated as Voting Common Stock, with a par value of $0.001 per share, (ii)
2,000,000 shares are designated as Non-Voting Common Stock, with a par value of
$0.001 per share, and (iii) 15,000,000 shares are designated as Preferred Stock,
par value $0.001 per share, of which 3,244,500 shares have been designated as
Series A Convertible Preferred Stock. Immediately prior to the Closing,
13,060,000 shares of Common Stock and no shares of Series A Convertible
Preferred Stock or other Preferred Stock will be issued and outstanding. Of the
authorized shares of Common Stock, 3,244,500 shares are reserved for issuance
upon conversion of the Series A Convertible Preferred Stock, 2,200,000 shares
are reserved for issuance upon the exercise of outstanding options and warrants
to purchase Common Stock pursuant to the Corporation's Employee Benefit Plans,
and no shares are reserved for issuance upon the exercise of the Purchaser's
Catch-Up Right, as defined in Section 4 of the Shareholder's Agreement. SECTION
3.5 of the Disclosure Memorandum sets forth (i) the capitalization of the
Company (including numbers of shares issued and outstanding and record holders),
and (ii) the capitalization of the Company as adjusted to reflect the issuance
of the Shares (and the conversion thereof) and the exercise of any outstanding
options, warrants, and rights, and the conversion of any outstanding convertible
securities and the issuance of any securities which the Company has agreed to
issue. All issued and outstanding shares of the Company's capital stock have
been duly authorized and validly issued, are fully paid and nonassessable, and
were issued in compliance with all applicable federal and state securities laws
and are owned of record, and to the knowledge of the Company beneficially, by
the shareholders in the amounts set forth in SECTION 3.5 of the Disclosure
Memorandum. The relative rights, privileges, and preferences of the Series A
Convertible Preferred Stock and Common Stock will be as stated in the Articles.
Except as set forth in SECTION 3.5 of the Disclosure Memorandum or with respect
to the conversion privileges of the Shares, there are no options, warrants,
conversion privileges, or preemptive or other rights or agreements presently
outstanding to purchase or otherwise acquire any authorized but unissued shares
of the capital stock or other securities of the Company. Except as set forth in
SECTION 3.5 of the Disclosure Memorandum, the Company is not a party or subject
to any agreement or understanding, and, except for the transactions contemplated
hereby and by the Ancillary Agreements, there is no agreement or understanding
that affects or relates to the voting or giving of written consents with respect
to any security, or the voting by a director, of the Company. Except as set
forth in SECTION 3.5 of the Disclosure Memorandum, to the knowledge of the
Company, no shareholder has granted options or other rights to purchase, or
entered into any agreement with respect to the purchase of, any shares of Common
Stock or other equity securities of the Company from such shareholder, and the
Company holds no shares of its capital stock in its treasury.
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3.6 Authorization
All corporate action on the part of the Company, its officers,
directors, and shareholders necessary for the authorization, execution,
delivery, and performance of this Agreement and the Ancillary Agreements by the
Company, the authorization, designation, issuance, sale, and delivery of the
Shares and the Conversion Stock and the performance of all of the Company's
obligations hereunder and thereunder have been taken or will be taken prior to
the Closing. This Agreement and each of the Ancillary Agreements, when executed
and delivered by the Company, will constitute a valid and legally binding
obligation of the Company, enforceable against the Company in accordance with
its terms, except that (i) such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditor's rights, and (ii) the remedy of specific
performance and injunctive and other forms of equitable remedies may be subject
to equitable defenses and to the discretion of the court before which
proceedings therefor may be brought. The Shares and the Conversion Stock, when
issued in accordance with this Agreement, will be duly authorized, validly
issued, fully paid, and nonassessable, and will have the rights, preferences,
privileges, and restrictions as set forth in the Articles. The Shares and the
Conversion Stock, when issued, will be free of any liens, claims, encumbrances,
or restrictions on transfer, except as specifically set forth in the
Shareholder's Agreement, the Registration Rights Agreement, and the Articles,
and except as set forth in SECTION 3.6 of the Disclosure Memorandum or as
otherwise expressly agreed by the Purchaser. The Shares and the Conversion Stock
are not, and except pursuant to the Shareholder's Agreement will not, become as
a result of the Closing, subject to any preemptive rights or rights of first
refusal, except as set forth in SECTION 3.6 of the Disclosure Memorandum or as
otherwise expressly agreed by the Purchaser or any transferee of the Shares.
3.7 Title to Properties and Assets
The Company does not own any real property. Except as set forth in
SECTION 3.7 of the Disclosure Memorandum, the Company has good, valid, and legal
title to all its properties and assets, and has good title to all its leasehold
interests, in each case subject to no mortgage, pledge, lien, lease, conditional
sale agreement, security interest, encumbrance, or charge, other than (i) liens
for current taxes not yet due and payable, and (ii) possible minor liens and
encumbrances which have arisen in the ordinary course of business (not in
respect of indebtedness for borrowed money) and which do not, in any one case or
in the aggregate, detract in any material respect from the value of the property
subject thereto or impair in any material respect the operations of the Company.
With respect to leased property, the Company is in compliance with such leases
in all material respects.
3.8 Financial Statements
(a) The Company has delivered to Purchaser draft
consolidated balance sheets of the Company as of December 31, 2000, and the
related statements of operations, shareholders' equity, and cash flow for the
year then ended, copies of which are attached to the Disclosure Memorandum. The
foregoing financial statements fairly present in all material respects the
financial position of the Company at such dates and the results of operations
and shareholder's equity and cash flows for the periods then ended in accordance
with generally accepted accounting principles (except that such financial
statements omit footnotes and are
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subject to normal year-end audit adjustments) applied on a consistent basis, and
the foregoing balance sheet shows all material liabilities, absolute or
contingent, as of the date thereof which are required by generally accepted
accounting principles to be reflected thereon. The foregoing financial
statements of the Company as at December 31, 2000, and for the twelve-month
period then ended, are hereinafter referred to collectively, as the
"FINANCIALS"; the balance sheet dated December 31, 2000 is hereinafter referred
to as the "BALANCE SHEET"; and December 31, 2000 is hereinafter referred to as
the "BALANCE SHEET DATE."
(b) The Company has delivered to Purchaser an unaudited
balance sheet of the Company as of March 31, 2001, and the related statements of
operations, and cash flow for the three-month period then ended. The foregoing
unaudited financial statements of the Company as of March 31, 2001, and for the
three-month period then ended are hereinafter referred to collectively, as the
"INTERIM FINANCIALS," and the balance sheet dated March 31, 2001 is hereinafter
referred to as the "INTERIM BALANCE SHEET." The Interim Financials accurately
set out and describe the financial position of the Company as of such date and
the results of operations and changes in cash flows of the Company as of such
date and for the period then ended in accordance with generally accepted
accounting principles (except that such Interim Financials omit footnotes and
are subject to normal year-end audit adjustments) applied on a consistent basis
with the Financials and show all material liabilities, absolute or contingent,
of the Company as of such date which are required by generally accepted
accounting principles to be reflected thereon.
(c) Since the Interim Balance Sheet Date, the Company has
conducted its business in the ordinary course, and there has not been any event
or condition of any character that has resulted in or might be expected to
result in a change in the assets, liabilities, financial condition, operating
results, or business of the Company from that reflected in the Financials,
except changes in the ordinary course of business and changes that could not
reasonably be expected, in the aggregate, to have a Material Adverse Effect.
Since the Balance Sheet Date, there has not been (i) any material change in any
compensation arrangement or agreement with any of the executive-level managers
or, except in the ordinary course of business, of any other employees, (ii) any
sale, assignment, or transfer of any Intellectual Property or any notice or
knowledge of any event giving rise to a claim or infringement or
misappropriation with respect to the Intellectual Property, (iii) receipt of
notice that there has been a loss of, or a material order cancellation by, any
major customer of the Company, (iv) any declaration, setting aside, or payment
or other distribution in respect of any of the Company's securities, or any
direct or indirect redemption, purchase, or other acquisition of any of such
securities by the Company, (v) any agreement or commitment by the Company to do
any of the foregoing things, or (vi) any loss, damage, or destruction to any of
the properties or assets of the Company, whether or not insured. For purposes of
this subsection, "material" means any amount in excess of $20,000.
(d) The Company has no liabilities, absolute or
contingent, which are, individually or in the aggregate, material to the
financial condition or operating results of the Company which are not (i)
reflected on the Financials or the Interim Balance Sheet, or (ii) set forth in
SECTION 3.8 of the Disclosure Memorandum.
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3.9 Related-Party Transactions
Except as set forth in SECTION 3.9 of the Disclosure Memorandum, no
employee, shareholder, officer, director, or consultant of the Company or member
of his or her immediate family is directly or indirectly indebted to the
Company, and the Company is not indebted to nor has it committed to make loans
or extend or guarantee credit to any of them, whether directly or indirectly. To
the knowledge of the Company, no employee, shareholder, officer, director, or
consultant of the Company or member of his or her immediate family has any
direct or indirect ownership interest in any entity with which the Company has a
business relationship, or any entity that competes with the Company except stock
ownership by employees, shareholders, officers, or directors of the Company and
members of their immediate families in publicly traded companies. Except as set
forth in SECTION 3.9 of the Disclosure Memorandum, no officer, shareholder, or
director of the Company or any member of their immediate families is, directly
or indirectly, interested in any material contract with the Company.
3.10 Permits
Except as set forth in SECTION 3.10 of the Disclosure Memorandum, the
Company has all material franchises, permits, licenses, authorizations,
approvals, and any similar authority ("PERMITS") necessary for the conduct of
their business as now being conducted and believes it can obtain, without undue
burden or expense, any similar authority for the conduct of its business as
planned to be conducted. The Company is not in violation in any material respect
of, or in default in any material respect under, any Permit.
3.11 Intellectual Property
Set forth in SECTION 3.11 of the Disclosure Memorandum is a list and
brief description of all domestic and foreign patents, patent rights, patent
applications, trademarks, trademark applications, service marks, service ▇▇▇▇
applications, trade names, and copyrights, and all applications for such which
are in the process of being prepared, owned by, or registered in the name of the
Company, or of which the Company is a licensor or licensee, and in each case a
brief description of the nature of such right; provided that in the case of
trademarks, service marks, trade names, and copyrights, and applications
therefor, such list includes only those that are material to the business of the
Company. The Company owns or possesses adequate licenses or other rights to use
all patents, patent applications, trademarks, trademark applications, service
marks, service ▇▇▇▇ applications, trade names, copyrights, manufacturing
processes, formulae, trade secrets, customer lists, and know-how (collectively,
"INTELLECTUAL PROPERTY") for which the failure to so own or possess would have a
Material Adverse Effect and no claim is pending or, to the knowledge of the
Company, threatened and to the Company's knowledge there is no basis for any
claim to the effect that the operations of the Company infringe upon or conflict
with the asserted rights of any other person under any Intellectual Property.
The Company has made all filings and recordations and has paid all fees and
taxes necessary to establish and to protect the Intellectual Property rights of
the Company for which the failure to do so would have a Material Adverse Effect.
No claim is pending or, to the knowledge of the Company threatened, and to the
Company's knowledge there is no basis for any claim to the effect that any such
Intellectual Property owned or licensed by the Company, or which the Company
otherwise has the right to use, is invalid or unenforceable by the Company.
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To the knowledge of the Company, all technical information developed by and
belonging to the Company which is material to the business of the Company and
which has not been patented has been kept confidential. Except as set forth in
SECTION 3.11 of the Disclosure Memorandum, the Company has not granted or
assigned to any other person or entity any right to manufacture, have
manufactured, assemble, or sell the current or proposed products or to provide
the current or proposed services of the Company. To the knowledge of the
Company, no Person has violated or infringed upon, and no Person is currently
violating or infringing upon, the Intellectual Property rights of the Company.
The Company is not in breach of any license or other agreements with respect to
the Intellectual Property, including, specifically, the Company's license
agreement with the Georgia Tech, as amended and currently in effect. The Company
is authorized to enter into the License Agreement and has obtained all required
consents.
3.12 Material Contracts
SECTION 3.12 of the Disclosure Memorandum identifies all Material
Contracts of the Company. Except as set forth in the Disclosure Memorandum, all
Material Contracts are valid, binding, and in full force and effect, without any
breach by the Company or, to the best of the Company's knowledge, any other
party thereto. "MATERIAL CONTRACTS" shall mean all existing agreements and
commitments of the Company, including without limitation all leases, consulting
contracts, agreements with suppliers or customers, personal property leases,
licenses, indentures, notes, bonds, mortgages, security agreements, loan
agreements, guarantees, and franchise agreements, which in any such case involve
future payments to or by the Company of more than $25,000.
3.13 Compliance with Laws and Other Instruments
The Company is not in violation or breach of any term of its Articles
of Incorporation or Bylaws (each as amended through the date hereof), or of any
judgment or decree. The Company is not in violation of any order, statute, rule,
or regulation (collectively, "LAWS") applicable to the Company and the Company
has conducted its business in compliance with all applicable Laws, except where
the failure to do so may not be reasonably expected to have a Material Adverse
Effect. The execution, delivery, and performance of, and compliance with this
Agreement and the Ancillary Agreements, the issuance and sale of the Shares, and
the consummation of the transactions contemplated hereby and thereby, have not
and will not (i) violate, conflict with or result in a breach of any provision
of or constitute a default (or an event which, with notice or lapse of time or
both, would constitute a default) under, or result in the termination of, or
accelerate the performance required by, or result in a creation of any liens,
claims or encumbrances upon any of the assets, properties or business of the
Company under, any of the terms, conditions or provisions of (x) the Articles or
the Bylaws of the Company, or (y) any Material Contract; or (ii) violate any
judgment, ruling, order, writ, injunction, award, decree, or law of any court or
foreign, federal, state, county, or local government or any other governmental,
regulatory, or administrative agency or authority which is applicable to the
Company, or any of its assets, properties or businesses; or (iii) result in the
suspension, revocation, impairment, forfeiture, or non-renewal of any Permit.
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3.14 Litigation
Except as set forth in SECTION 3.14 of the Disclosure Memorandum, there
are no actions, suits, proceedings, or investigations pending or, to the
knowledge of the Company, threatened against the Company or any of its
properties before any court or governmental agency (nor, to the knowledge of the
Company, is there any reasonable basis for any such action, suit, proceeding, or
investigation). The Company is not a party to, or to the knowledge of the
Company, named in any order, writ, injunction, judgment, or decree of any court,
government agency, or instrumentality. Except as set forth in SECTION 3.14 of
the Disclosure Memorandum, there is no action, suit, or proceeding by the
Company currently pending or that the Company currently intends to initiate.
3.15 Governmental Consent
No consent, approval, or authorization of, or designation, declaration,
notification, or filing with any governmental authority on the part of the
Company is required in connection with the valid execution, delivery, and
performance of this Agreement or any of the Ancillary Agreements, the offer,
issuance, sale, or conversion of the Shares, or the consummation of any other
transaction contemplated hereby or by the Ancillary Agreements except the (i)
filing of the Designation with the Secretary of State of Georgia, and (ii) any
filings required under applicable federal securities laws, and (iii)
qualification (or the taking of such action as may be necessary to secure an
exemption from qualification, if available) of the offer and sale of the Shares
under applicable blue sky laws, which filings and qualifications, if required,
will be accomplished in a timely manner.
3.16 Employees
To the knowledge of the Company, no officer of the Company is or will
be in violation of any judgment, decree, or order, or any term of any employment
contract, patent disclosure agreement, confidentiality agreement, or other
contract or agreement relating to the relationship of any such officer with the
Company, or any other party because of the nature of the business conducted or
proposed to be conducted by the Company, or the use by the officer of his best
efforts with respect to such business. Except as set forth in SECTION 3.16 of
the Disclosure Memorandum, the Company is not a party to or bound by any
currently effective employment contract, deferred compensation agreement, bonus
plan, incentive plan, profit sharing plan, retirement plan or agreement, or
other employee compensation agreement. To the knowledge of the Company, no
officer or key employee, or any group of key employees, intends to terminate his
or their employment with the Company, nor does the Company have a present
intention to terminate the employment of any of the foregoing. Subject to the
employment agreements set forth in SECTION 3.16 of the Disclosure Memorandum,
and general principles related to wrongful termination of employees, the
employment of each officer and employee of the Company is terminable at the will
of the Company. No contract exists between the Company and a union representing
any employees of the Company, and, to the knowledge of the Company, no union has
attempted to organize or represent the labor force of the Company. Except as set
forth in SECTION 3.16 of the Disclosure Memorandum, to the knowledge of the
Company, no person (including, but not limited to, any foreign, federal, state,
county, or local government or other governmental, regulatory, or administrative
agency or authority) has any claim or basis for any
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suit, action, claim, proceeding, or investigation against the Company arising
out of an statute, law, ordinance, code, rule, or regulation relating to
discrimination in employment or employment practices or occupational safety and
health standards (including, without limitation, The Fair Labor Standards Act,
as amended, Title VII of the Civil Rights Act of 1964, as amended, the
Rehabilitation Act of 1973, as amended, the Age Discrimination in Employment Act
of 1967, as amended, or the Americans with Disabilities Act of 1990) which, in
each case, if upheld, would have a Material Adverse Effect.
3.17 Tax Returns, Payments, and Elections
The Company has filed (or obtained valid extensions to file) all tax
returns and reports as required by law. These returns and reports are true and
correct in all material respects. The Company has paid all taxes and other
assessments due, except those contested by it in good faith and shown on SECTION
3.17 of the Disclosure Memorandum.
3.18 Warranty Claims
The Company has not received notice of any warranty claims, product
liability claims, or similar claims with respect to products or services
previously licensed, sold, or provided by it to customers as a result of the
failure of any product or service that it has provided to meet any express or
implied warranty.
3.19 Confidentiality and Nondisclosure Agreements
Each employee and officer of the Company has executed a Confidentiality
and Nondisclosure Agreement substantially in the form or forms which have been
delivered to counsel for the Purchaser.
3.20 Securities Act
Subject to the accuracy of the Purchaser's representations in ARTICLE 4
and any filings required under federal or state securities laws, the offer,
sale, and issuance of the Shares and the Conversion Stock in conformity with the
terms of this Agreement constitute transactions exempt from the registration
requirements of Section 5 of the Securities Act.
3.21 Employment Matters
The Company is in compliance in all material respects with all
applicable foreign, federal, state and local laws, rules and regulations
respecting employment, employment practices, terms and conditions of employment
and wages and hours, in each case, in each location in which the Company employs
persons; (a) has withheld all amounts required by law or by agreement to be
withheld from the wages, salaries and other payments to Company employees; (b)
is not liable for any material arrears of wages or any material taxes or any
material penalty for failure to comply with any of the foregoing; and (c) is not
liable for any material payment to any trust or other fund or to any
governmental or administrative authority, with respect to unemployment
compensation benefits, social security or other benefits or
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obligations for Company employees (other than routine payments to be made in the
ordinary course of business and consistent with past practice).
3.22 Employee Benefit Plans
Each Employee Benefit Plan has, in all material respects, been
maintained and administered in compliance with its terms and with the
requirements prescribed by any and all statutes, orders, rules and regulations,
including, but not limited to, ERISA and the Code, which are applicable to such
plan, and there is no audit, investigation, dispute, arbitration, claim, suit,
or grievance pending or, to the knowledge of the Company, threatened, involving
an Employee Benefit Plan (other than routine claims for benefits), and, to the
knowledge of the Company, there is no basis for such a claim. There have been no
"prohibited transactions" (within the meaning of Section 4975 of the Code or
Section 406 of ERISA) with respect to any Employee Benefit Plan.
(a) Neither the Company nor any other corporation or other
trade or business that is or has been under common control with the Company (as
determined under Section 414(b), (c), (m) or (o) of the Code) has ever
maintained, contributed to or incurred any obligation or liability with respect
to (i) any "multiemployer plan", as defined in Section 3(37) or 4001(a)(3) of
ERISA or Section 414(f) of the Code (either as an employer or a joint employer)
or (ii) any other plan covered by Title IV of ERISA or subject to the
requirements of Section 412 of the Code, and the Company has no actual or
contingent liability under Title IV of ERISA or Section 412 of the Code to any
Person, including the Pension Benefit Guaranty Corporation, the Internal Revenue
Service (the "IRS"), any such plan or the participants (or their beneficiaries)
in any such plan and there is no basis for any such liability as the result of
or after the consummation of the transactions contemplated by this Agreement.
(b) Each Employee Benefit Plan that is intended to be
qualified under Section 401 of the Code is so qualified and has been so
qualified during the period from its adoption to date, and each trust forming a
part thereof is exempt from tax pursuant to Section 501 of the Code and all
contributions made thereto have been deductible by the Company. A favorable
determination letter has been issued by the IRS with respect to each such plan
and trust, which letter includes a determination with respect to the
qualification of the plan under the Tax Reform Act of 1986 and subsequent tax
legislation (or if such letter has not yet been received, an application has
been made to the IRS for such determination within the remedial amendment period
so that such letter will have retroactive effect to the effective date of such
legislation), and there are no facts and nothing has occurred that would
adversely affect the qualification of such plan.
(c) No Employee Benefit Plan is a "voluntary employees'
beneficiary association" within the meaning of Section 501(c)(9) of the Code and
there have been no other "welfare benefit funds" within the meaning of Section
419 of the Code relating to any of the employees or former employees of the
Company. No Employee Benefit Plan provides health, dental, life insurance or
other welfare benefits (whether on an insured or self-insured basis) to any of
such employees after their retirement or other termination of employment from
the Company (other than continuation coverage required under Section 601 through
609 of ERISA and Section 4980B of the Code that may be purchased at the sole
expense of the employee).
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(d) All contributions have been made under, and all
obligations to any of the employees or former employees of the Company
(including vacation entitlements) have been satisfied with respect to, each
Employee Benefit Plan for all periods up to the Closing, except as set forth in
the financial statements. The costs of all Employee Benefit Plans are fully
accrued and reflected in the financial statements of the Company.
3.23 Environmental Laws and Regulations
The Company has not, and, to the knowledge of the Company, no other
Person has, generated, used, treated, disposed of, released or stored Hazardous
Materials on, or transported Hazardous Materials in any material quantities to
or from, any real property owned or leased by the Company. The Company is in
compliance in all material respects with applicable Environmental Laws and the
requirements of any permits issued under such Environmental Laws with the
respect to any real property owned or leased by the Company. There are no
pending or, to the knowledge of the Company, threatened claims or other actions
relating to any Environmental Law with respect to any real property owned or
leased by the Company, nor is there a reasonable basis for any such actions.
3.24 No Bankruptcy Proceedings
There are no bankruptcy, insolvency or receivership proceedings
outstanding against the Company, the Company has not made any assignment for the
benefit of any creditors, and no execution or attachment has been levied against
the Company, on account of any lien or judicial process.
3.25 Disclosure
Neither this Agreement, the Ancillary Agreements, the Disclosure
Memorandum, the Financials, the Interim Balance Sheet or any Exhibit to this
Agreement, taken as a whole, contains an untrue statement of a material fact or
omits a material fact necessary to make the statements contained herein or
therein not misleading in light of the circumstances under which they were made.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby makes the following representations and warranties
to the Company with respect to the purchase of the Shares as of the date of this
Agreement and as of the Closing Date:
4.1 Experience
The Purchaser has substantial experience in evaluating and investing in
private placements of securities in companies similar to the Company and is
capable of evaluating the merits and risks of its investment in the Company and
has the capacity to protect its own interests. The Purchaser is aware that the
purchase of Shares involves substantial risk and that its financial condition
and investments are such that it is in a financial position to hold such
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securities for an indefinite period of time and to bear the economic risk of and
withstand a complete loss of such investment.
4.2 Investment
The Purchaser is acquiring the Shares for investment for its own
account, not as a nominee or agent, and not with the view to, or for resale in
connection with, any distribution thereof. The Purchaser understands that the
Shares have not been, and (except as provided in the Shareholder's Agreement)
will not be, registered under the Securities Act or the securities laws of any
state by reason of exemptions from the registration provisions of the Securities
Act and such laws which depend upon, among other things, the bona fide nature of
the investment intent and the accuracy of the Purchaser's representations as
expressed herein.
4.3 Rule 144
The Purchaser acknowledges that the Shares (and the Conversion Stock,
if issued) must be held indefinitely unless subsequently registered under the
Securities Act or an exemption from such registration is available. The
Purchaser is aware of the provisions of Rule 144 promulgated under the
Securities Act which permit the limited resale of securities purchased in a
private placement subject to the satisfaction of certain conditions, including,
among other things, (i) the existence of a public market for the securities,
(ii) the availability of certain current public information about the Company,
(iii) the resale occurring not less than one year after a party (who is not an
"AFFILIATE") has purchased and fully paid for the securities to be sold, (iv)
the sale being effected through a "BROKER'S TRANSACTION" or in transactions
directly with a "MARKET MAKER" (as provided by Rule 144(f)), and (v) the number
of securities being sold during any three-month period not exceeding specified
limitations.
4.4 No Public Market
The Purchaser understands that no public market now exists for any of
the securities issued by the Company and that there is no assurance that a
public market will ever exist for the Shares.
4.5 Access to Data
The Purchaser has also had an opportunity to ask questions of Company
management concerning the Company and its business and to conduct its own
independent due diligence investigation of the Company.
4.6 Authorization
This Agreement and the Ancillary Agreements, when executed and
delivered by the Purchaser, will constitute valid and legally binding
obligations of the Purchaser, enforceable in accordance with their respective
terms, subject to (i) laws of general application relating to bankruptcy,
insolvency, and the relief of debtors, and (ii) rules of law governing specific
performance, injunctive relief, or other equitable remedies. The Purchaser has
full corporate power and authority to enter into and to perform its obligations
under this Agreement and the
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Ancillary Agreements in accordance with their respective terms. Purchaser
represents that it has not been organized, reorganized or recapitalized
specifically for the purpose of investing in the Company.
4.7 Accredited Investor
The Purchaser is an accredited investor, as such term is defined in
Rule 501(a) of Regulation D promulgated under the Securities Act.
4.8 Restrictions
The Purchaser acknowledges that the Ancillary Agreements impose certain
restrictions on transfer of the Shares.
ARTICLE 5. CONDITIONS TO THE OBLIGATIONS OF PURCHASER
The obligations of the Purchaser to purchase the Shares at the Closing
is, at the option of the Purchaser, subject to the fulfillment on or prior to
the Closing Date of the following conditions:
5.1 Representations and Warranties
The representations and warranties made by the Company in to SECTIONS
3.1, 3.2, 3.3, 3.5, 3.6 and 3.20 of this Agreement shall have been true and
correct when made, and shall be true and correct in all material respects as of
the Closing Date.
5.2 Covenants
All covenants, agreements, and conditions contained in this Agreement
to be performed by the Company on or prior to the Closing shall have been fully
performed or complied with in all material respects.
5.3 Compliance Certificate
The Company shall have delivered to the Purchaser (a) a Compliance
Certificate, executed by an executive officer of the Company, dated the Closing
Date, and certifying to the fulfillment of the conditions specified in SECTIONS
5.1, 5.2, and 5.4, (b) certified copies of the resolutions adopted by the
Company's board of directors authorizing the execution, delivery, and
performance of the transactions contemplated by this Agreement and the Ancillary
Agreements, (c) certified copies of the Company's Articles and Bylaws as in
effect at the Closing, and (d) a certificate of incumbency identifying and
showing the signature of each officer of the Company as of the Closing.
5.4 Consents
The Company shall have obtained all consents, permits, and waivers
necessary to consummate the transactions contemplated by this Agreement and the
Ancillary Agreements.
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5.5 Reservation of Stock
The shares of Conversion Stock issuable upon conversion of the Shares
shall have been duly authorized and reserved for issuance upon such conversion.
5.6 No Litigation
No action, suit, or other proceeding shall be pending or threatened
before any court, tribunal, or governmental authority seeking or overtly
threatening to restrain or prohibit the consummation of the transactions
contemplated hereby, or seeking to obtain substantial damages in respect
thereof, or which would otherwise materially and adversely affect the Company,
its Subsidiaries, or their respective business, assets, prospects, or financial
condition.
5.7 Shareholder's Agreement
The Company and the Purchaser shall have entered into the Shareholder's
Agreement.
5.8 Registration Rights Agreement
The Company and the Purchaser shall have entered into the Registration
Rights Agreement.
5.9 Opinion of Counsel
The Purchaser shall have received from ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLP,
counsel for the Company, an opinion, dated the Closing Date, satisfactory in
form and substance to the Purchaser.
ARTICLE 6. CONDITIONS TO THE OBLIGATIONS OF THE COMPANY
The Company's obligation to issue and sell Shares at the Closing is, at
the option of the Company, subject to the fulfillment on or prior to the Closing
Date of the following conditions:
6.1 Representations and Warranties
The representations and warranties made by the Purchaser in Article 4
of this Agreement shall have been true and correct when made, and shall be true
and correct in all material respects as of the Closing Date.
6.2 Covenants
All covenants, agreements, and conditions contained in this Agreement
to be performed by the Purchaser on or prior to the Closing shall have been full
performed or complied with in all material respects.
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6.3 No Litigation
No action suit or other proceeding shall be pending or threatened
before any court, tribunal, or governmental authority seeking or threatening to
restrain or prohibit the consummation of the transactions contemplated hereby,
or seeking to obtain substantial damages in respect thereof or which would
otherwise materially and adversely affect the Company, its business, assets,
prospects, or financial condition.
6.4 Consents
The Purchaser shall have obtained all consents, permits, and waivers
necessary to consummate the transactions contemplated by this Agreement and the
Ancillary Agreements.
6.5 Shareholder's Agreement
The Company and the Purchaser shall have entered into the Shareholders'
Agreement.
6.6 Registration Rights Agreement
The Company and the Purchaser shall have entered into the Registration
Rights Agreement.
ARTICLE 7. DISPUTE RESOLUTION
7.1 Resolution by Advisory Board
All disputes, controversies, or claims arising out of or relating to
this Agreement or the Ancillary Agreements ("Disputes") shall be referred to an
Advisory Board (such Board to consist of two (2) designees from each of the
parties) prior to escalation to senior management. The Advisory Board shall meet
within five (5) business days, or as soon thereafter as reasonably practicable,
of receiving notice of a Dispute. In the event that the Advisory Board is unable
to resolve, or does not anticipate resolving, the Dispute within ten (10)
business days of the date of the meeting during which such Dispute was
considered, the Advisory Board shall notify the senior executive selected by
each party pursuant to SECTION 7.2 below. No Dispute under this Agreement shall
be the subject of any formal legal proceeding between the parties before being
considered by the Advisory Board and senior management, except for an action to
seek injunctive relief to stay a breach of this Agreement.
7.2 Hearing
Either party may, upon notice and within five (5) business days of
receipt of a notice from the Advisory Board pursuant to SECTION 7.1, elect to
utilize a non-binding resolution procedure whereby each presents its case at a
hearing (the "Hearing") before a panel consisting of a senior executive of each
of the parties. If a party elects to use the procedure set forth in this SECTION
7.2, the other party shall participate. The Hearing will occur as soon as
reasonably practicable after a party serves notice to use the procedure set
forth in this SECTION 7.2. Each party may be represented at the Hearing by
lawyers. If the matter cannot be resolved at the Hearing, each party may pursue
whatever legal remedies are available to them. No arbitration or
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other legal proceeding may commence concerning the Dispute until ten (10)
business days have elapsed from the first day of the Hearing. The parties shall
each bear their respective costs incurred in connection with the procedure set
forth in this SECTION 7.2, except that they shall share equally the cost of any
facility used for the Hearing.
ARTICLE 8. INDEMNIFICATION
8.1 Indemnification by the Company.
The Company shall defend and hold harmless the Purchaser, its
affiliates and all officers, directors, employees and agents thereof against and
from any and all claims, costs, awards, or damages of any kind or nature,
including attorney fees and related expenses, based upon, arising out of or in
any way related to:
(a) Any breach of the representations and warranties of the
Company contained in this Agreement; or
(b) Any breach of any covenant, agreement or obligation of
the Company contained in this Agreement.
8.2 Indemnification by the Purchaser.
The Purchaser shall defend and hold harmless the Company, its
affiliates and all officers, directors, employees and agents thereof against and
from any and all claims, costs, awards, or damages of any kind or nature,
including attorney fees and related expenses, based upon, arising out of or in
any way related to
(a) Any breach of the representations and warranties of the
Purchaser in this Agreement; or
(b) Any breach of any covenant, agreement or obligation of
the Purchaser contained in this Agreement.
8.3 Indemnification Procedures.
The party seeking indemnification above (the "Indemnified Party")
hereby agrees that (i) the Indemnified Party shall give the other party (the
"Indemnifying Party") prompt written notice of each such claim; (ii) the
Indemnifying Party shall have sole control and authority with respect to the
defense or settlement of any such claim; and (iii) the Indemnified Party shall
cooperate fully with the Indemnifying Party, at the Indemnifying Party's sole
cost and expense, in the defense of any such claim. Any settlement of any such
claim that imposes any liability or limitation on the Indemnified Party shall
not be entered into without the prior written consent of the Indemnified Party.
8.4 Limitations on Indemnification.
Notwithstanding the foregoing, the Purchaser shall not be entitled to
make any claim against the Company pursuant to Section 8.1 unless and until the
total of all such claims exceeds
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$50,000.00, and then only with respect to the claims in excess of $50,000.00.
Furthermore, the aggregate amount of all claims which may be made against the
Company pursuant to Section 8.1 shall be limited to the aggregate purchase price
actually paid by the Purchaser for the Shares.
ARTICLE 9. GENERAL PROVISIONS
9.1 Governing Law
All or part of this Agreement and the legal relations between the
parties hereto has been negotiated in the State of Georgia and will be enforced
under the laws of the State of Georgia without regard to its conflicts of laws
provisions.
9.2 Successors and Assigns; Third Party Beneficiaries
Except as otherwise expressly limited herein, the provisions hereof
shall inure to the benefit of, and be binding upon, the successors, assigns,
heirs, executors, and administrators of the parties hereto. Nothing in this
Agreement, expressed or implied, is intended to confer upon any party other than
the parties hereto and their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement.
9.3 Entire Agreement; Designation and Waiver
This Agreement and the Ancillary Agreements constitute the full and
entire understanding and agreement between the parties with regard to the
subject matter hereof and thereof and supersede all prior agreements among the
parties. All prior negotiations and agreements shall be merged into this
Agreement. Any term of this Agreement may be amended, and the observance of any
term hereof may be waived (either generally or in a particular instance) only
with the written consent of Purchaser and the Company. Any amendment or waiver
effected in accordance with this SECTION 9.3 shall be binding upon each of the
parties hereto.
9.4 Survival
The representations, warranties, covenants, indemnifications, and
agreements made herein shall survive the closing of the transactions
contemplated hereby for a period of two years, except for claims, if any,
asserted in writing prior to such date which shall survive until resolved and
satisfied in full.
9.5 Notices, etc.
All notices and other communications required or permitted hereunder
shall be in writing and shall be (a) mailed by registered or certified mail,
postage prepaid, (b) delivered by reliable overnight courier service, or (c)
otherwise delivered by hand, by messenger, or by telecopier, addressed (i) if to
Purchaser, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
President, telecopier ▇▇▇-▇▇▇-▇▇▇▇, with a copy to ▇▇▇▇ ▇▇▇▇▇▇, General Counsel,
or (ii) if to the Company at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: President, Telecopier No. ▇▇▇-▇▇▇-▇▇▇▇, or at such other
address as the Company shall have furnished to the Purchaser, with a copy to
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLP, Suite
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3100, Promenade II, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇, Telecopier No. ▇▇▇-▇▇▇-▇▇▇▇.
9.6 Delays or Omissions
No delay or omission to exercise any right, power, or remedy accruing
to any party upon any breach or default under this Agreement, shall be deemed a
waiver of any other breach or default theretofore or thereafter occurring. Any
waiver, permit, consent, or approval of any kind or character on the part of any
party of any breach or default under this Agreement, or any waiver on the part
of any party of any provisions or conditions of this Agreement, must be in
writing and shall be effective only to the extent specifically set forth in such
writing. All remedies, either under this Agreement or by law or otherwise
afforded to any of the parties, shall be cumulative and not alternative.
9.7 References
Unless the context otherwise requires, any reference to a "Section"
refers to a section of this Agreement. Any reference to "this Section" refers to
the whole number section in which such reference is contained.
9.8 Severability
If any provision of this Agreement is held to be unenforceable under
applicable law, then such provision shall be excluded from this Agreement and
the balance of this Agreement shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms. The court in its
discretion may substitute for the excluded provision an enforceable provision
which in economic substance reasonably approximates the excluded provision.
9.9 Pronouns
All pronouns and any variations thereof refer to the masculine,
feminine, or neuter, singular or plural, as the identity of the person or
persons may require.
9.10 Counterparts
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original and enforceable against the parties actually
executing such counterpart, and all of which, when taken together, shall
constitute one instrument.
9.11 Remedies
The parties to this Agreement acknowledge and agree that a breach of
any of the covenants of the Company or the Purchaser set forth in this Agreement
may not be compensable by payment of money damages and, therefore, that the
covenants of the foregoing parties set forth in this Agreement may be enforced
in equity by a decree requiring specific performance.
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9.12 Certain Definitions
As used in this Agreement, the following terms shall have the following
meanings unless the context otherwise requires:
(a) "AFFILIATE" shall mean a person that, directly or
indirectly, controls or is controlled by, or is under common control with, any
Person.
(b) "CONTROL" (including, with correlative meaning, the
terms "CONTROLLED BY" and "UNDER COMMON CONTROL WITH") as used with respect to
any person, means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such person, whether
through ownership of voting securities or by contract or otherwise.
(c) "CONVERSION STOCK" shall mean the number of shares of
Common Stock of the Company issuable upon conversion of the Series A Convertible
Preferred Stock, as more particularly set forth in SECTION 3.5 hereof.
(d) "EMPLOYEE BENEFIT PLAN" shall mean any employee benefit
plan, policy, arrangement or agreement (including, without limitation, any
savings, retirement, fringe benefit, stock option, bonus, incentive
compensation, deferred compensation, excess, supplemental executive
compensation, employee stock purchase, vacation, sickness or disability,
severance or separation, restricted stock plan, policy or arrangement) or
employment or consulting contracts or agreements (including without limitation,
any "employee benefit plan", as defined in ERISA) of any Company, whether or not
subject to ERISA, whether written or oral.
(e) "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended, together with the regulations promulgated
thereunder.
(f) "ENVIRONMENTAL LAWS" shall mean any federal, state,
local or foreign statue, law, rule, regulation, ordinance, code, permit, policy,
order or rule of common law now in effect and in each case as amended to date
and any judicial or administrative interpretation thereof relating to Hazardous
Materials, environmental matters, the protection of public health and safety
from environmental or health concerns or otherwise relating to environmental
conditions.
(g) "HAZARDOUS MATERIALS" shall mean all hazardous
substances, wastes, materials or constituents, solid wastes, special wastes,
toxic substances, pollutants, contaminants, petroleum or petroleum derived
substances or wastes, radioactive materials, urea formaldehyde, polychlorinated
biphenyls, radon gas and related materials, including, without limitation, any
such materials defined, listed, identified under or described in any applicable
Environmental Laws.
(h) "MATERIAL ADVERSE EFFECT" means a material adverse
effect on the business, assets, properties, operations, results of operations or
condition (financial or otherwise) of the Company.
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(i) "PERSON" means any individual, corporation, general or
limited partnership, limited liability company, firm, joint venture,
association, enterprise, joint stock company, trust, unincorporated organization
or other entity.
(j) "SUBSIDIARY" shall mean any Person as to which the
Company, directly or indirectly, owns or has the power to vote, or to exercise a
controlling influence with respect, fifty percent (50%) or more of the
securities of any class of such person, the holders of which class are entitled
to vote for the election of directors (or persons performing similar functions)
of such person.
9.13 Publicity
Neither Party shall release any information to any third party (except
its board members, employees, consultants, agents, shareholders, accountants,
lenders and legal counsel) with respect to the terms of this Agreement or the
transactions contemplated hereby without the prior written consent of the other
party, other than as may be required by applicable law or court order or
Securities and Exchange Commission or other governmental agency regulation or
requirement..
9.14 Fees and Expenses
Each party shall pay its own fees, costs, and expenses incurred in
connection with this Agreement and the transactions contemplated hereby.
Executed effective as of the date first set forth above.
THE COMPANY:
PHOTONIC SENSOR SYSTEMS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Title: President
------------------------------
PURCHASER:
GENOMIC SOLUTIONS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Title: Executive Vice President
------------------------------
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EXHIBIT "A"
CERTIFICATE OF DESIGNATIONS, RIGHTS AND PREFERENCES
OF SERIES B CONVERTIBLE PREFERRED STOCK
OF
PHOTONIC SENSOR SYSTEMS, INC.
WE, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇, being the President and Secretary
of PHOTONIC SENSOR SYSTEMS, INC., a corporation organized and existing under the
laws of the State of Georgia (the "CORPORATION"), DO HEREBY CERTIFY that,
pursuant to authority conferred upon the Board of Directors by the Articles of
Incorporation of the Corporation and SECTION 14-2-602 of the Georgia Business
Corporation Code (the "GBCC"), the Board of Directors of the Corporation by
unanimous written consent pursuant to SECTION 14-2-821 of the GBCC duly adopted
the following resolution providing for the issuance of a series of Preferred
Stock:
RESOLVED, that, pursuant to authority expressly granted to and vested
in the Board of Directors of the Corporation by the Articles of Incorporation,
as amended, of this Corporation, the Board of Directors hereby creates, from the
15,000,000 shares of Preferred Stock, par value $0.001 per share, of the
Corporation authorized to be issued pursuant to the Articles of Incorporation, a
series of Preferred Stock designated as "SERIES B CONVERTIBLE PREFERRED STOCK,"
consisting of 3,244,500 shares and hereby fixes the voting powers, designations,
preferences and relative participating, optional or other special rights and the
qualifications, limitations or restrictions of the shares of such Series B
Convertible Preferred Stock, which shall be in addition to those specified in
the Articles of Incorporation, as follows:
(1) Dividend Rights. The holders of Series B Convertible Preferred
Stock shall be entitled to receive dividends when, if and as declared by the
Board of Directors out of funds legally available therefor. No cash dividend
shall be paid on the Common Stock unless an equal dividend is paid with respect
to all outstanding shares of Series B Convertible Preferred Stock in an amount
for each such share of Series B Convertible Preferred Stock equal to the amount
which would have been paid to the holders thereof if such share had been
converted into Common Stock immediately before the record date for the dividend
paid on the Common Stock.
(2) Liquidation Preference. In the event of any liquidation,
dissolution or winding up of the Corporation, either voluntary or involuntary,
the holders of the Series B Convertible Preferred Stock shall be entitled to
receive any of the assets or surplus funds of the Corporation only after and in
subordination to payment in full of the liquidation preferences of all other
series and classes of Preferred Stock having liquidation preferences that are
prior and in preference to the Common Stock. After the payment in full of such
liquidation preferences, the holders of Series B Convertible Preferred Stock, by
reason of their ownership thereof, shall be entitled to receive payment of up to
$1.07875 per share, as adjusted for any combinations, consolidations, stock
distributions or stock dividends with respect to such shares (the "SUBSCRIPTION
PRICE"), prior and in preference to, but without participation in, any
distribution to the holders of the Common Stock. However, if the holders of the
Series B Convertible Preferred Stock would receive a greater distribution out of
the remaining assets and surplus funds of the Corporation
29
legally available for distribution upon conversion of the shares of Series B
Convertible Preferred Stock then held by them, then the remaining assets and
surplus funds of the Corporation shall be distributed as though the Series B
Convertible Preferred Stock was converted to Common Stock immediately prior to
such distribution. For purposes of this SECTION 2, a liquidation, dissolution or
winding up of this Corporation shall be deemed to be occasioned by, and to
include, (A) the acquisition of this Corporation by another entity by means of
any transaction or series of related transactions (including, without
limitation, any reorganization, merger or consolidation); or (B) a sale of all
or substantially all of the assets of this Corporation (including, for purposes
of this section, intellectual property rights which, in the aggregate,
constitute substantially all of this Corporation's material assets); unless in
each case, (x) this Corporation's stockholders of record as constituted
immediately prior to such acquisition or sale will, immediately after such
acquisition or sale (by virtue of securities issued as consideration for this
Corporation's acquisition or sale or otherwise) hold in the aggregate at least
fifty percent (50%) of the voting power of the surviving or acquiring entity, or
(y) the holders of outstanding shares of Series B Preferred, representing at
least a majority of the voting power of all then outstanding shares of Series B
Preferred, voting separately as a class (on an as-converted into Common Stock
basis) elect not to have such transaction deemed a liquidation, dissolution or
winding up of this Corporation.
In any of such events specified in this SECTION 2 above, if
the consideration received by this Corporation is other than cash or securities,
its value will be deemed to be its fair market value, as determined in good
faith by this Corporation's Board of Directors. Any securities shall be valued
as follows:
(a) if traded on a securities exchange or through the Nasdaq
Stock Market, by averaging the closing prices of the securities over
the thirty (30)-day period ending three (3) days prior to the closing;
(b) if actively traded over-the-counter, by averaging the
closing bid or sale prices (whichever are applicable) over the thirty
(30)-day period ending three (3) days prior to the closing; and
(c) if there is no active public market, at the fair market
value thereof, as mutually determined by the Corporation and the
holders of a majority of the then outstanding Series B Convertible
Preferred Stock.
The method of valuation of the fair market value determined as
above in clauses (a), (b) or (c) shall not include a discount for minority
ownership interest or illiquidity of the securities to be delivered to the
holders of the Series B Convertible Preferred Stock.
(3) Voting Rights.
(a) General. Except as otherwise expressly provided herein or
as required by law, the holder of each share of the Series B
Convertible Preferred Stock shall be entitled to the number of votes
equal to the number of shares of Common Stock into which such share of
Series B Convertible Preferred Stock would be convertible under the
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30
circumstances described in SECTION (4) hereof on the record date for
the vote or consent of stockholders, and shall otherwise have voting
rights and powers equal to the voting rights and powers of the Common
Stock, voting together with holders of the Common Stock as a single
class.
(b) Board of Directors. The holders of Series B Convertible
Preferred Stock shall vote with respect to the election of the Board of
Directors as follows:
(i) Until such time as the Corporation has issued
3,244,500 shares of Series B Convertible Preferred Stock, as
adjusted for any combinations, consolidations, stock
distributions or stock dividends with respect to such shares,
the holders of Series B Convertible Preferred Stock shall vote
together with the holders of Common Stock as a single class,
in accordance with the general provisions of SUBSECTION (3)(A)
above.
(ii) Upon the issuance of 3,244,500 authorized shares
of Series B Convertible Preferred Stock, as adjusted for any
combinations, consolidations, stock distributions or stock
dividends with respect to such shares, the original holders of
Series B Convertible Preferred Stock shall vote as a separate
class to elect one (1) member of the Board of Directors, but
shall not have the right to vote with respect to the election
of any other members of the Board of Directors. A vacancy in
the directorship elected solely by the holders of Series B
Convertible Preferred Stock shall be filled only by a vote of
the holders of Series B Convertible Preferred Stock, voting as
a single class. The right to vote as a separate class shall
continue, but only as to the original holders, until the
occurrence of any of the following: (A) the sale of all or
substantially all of the assets of the Corporation; (B) the
issuance or sale of more than half of the Corporation's equity
securities in a single transaction or series of related
transactions; or (C) the occurrence of any event or series of
events as a result of which the issued and outstanding shares
of Series B Convertible Preferred Stock and any other shares
of capital stock of the Corporation that the original
subscribers of the Series B Convertible Preferred Stock own or
have the right to purchase collectively cease to represent ten
percent (10%) or more of the issued and outstanding equity of
the Corporation. Thereafter, the holders of Series B
Convertible Preferred Stock shall again vote together with the
holders of Common Stock as a single class in accordance with
the general provisions of SUBSECTION (3)(A) above.
(4) Conversion. The Series B Convertible Preferred Stock shall be
convertible into shares of Common Stock as provided in this SUBSECTION (4).
(a) Optional. Each share of Series B Convertible Preferred
Stock shall be convertible, at the option of the holder thereof, at any
time after the date of issuance of such share at the office of the
Corporation or any transfer agent for the Series B Convertible
Preferred Stock, into Common Stock. The number of shares of Common
Stock to which a holder of Series B Convertible Preferred Stock shall
be entitled upon
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conversion shall be the product obtained by multiplying the Conversion
Rate of the Series B Convertible Preferred Stock (determined as
provided in SUBSECTION (4)(E) below) by the number of shares of Series
B Convertible Preferred Stock being converted. Such conversion shall be
deemed to have been made immediately prior to the close of business on
the date of the surrender of the shares of Series B Convertible
Preferred Stock to be converted in accordance with the procedures
described in SUBSECTION (4)(D) below.
(b) Automatic. Each and every share of outstanding Series B
Convertible Preferred Stock held by all holders of Series B Convertible
Preferred Stock shall automatically be converted into Common Stock at
the then effective Conversion Rate immediately upon: (A) the
consummation of a bona fide sale of more than fifty percent (50%) of
the Corporation's issued and outstanding equity to a third party; (B)
the vote or written consent of the holders of at least fifty percent
(50%) of the then outstanding shares of Series B Convertible Preferred
Stock; (C) the date as of which less than 200,000 shares of Series B
Convertible Preferred Stock remain outstanding; or (D) the consummation
of a public offering of the Corporation's Common Stock in a firm
commitment underwriting pursuant to a registration statement on Form
S-1, Form SB-1, Form SB-2, or their then equivalents, filed under the
Securities Act of 1933, as amended, provided that (i) the total gross
proceeds to the Corporation are at least thirty million dollars
($30,000,000), and (ii) upon consummation of such offering, the
Corporation meets any quantitative listing criteria for initial listing
of the Corporation's Common Stock on the New York Stock Exchange or
other national stock exchange or on the National Association of
Securities Dealers' Automated Quotation National Market System. Such
conversion shall be automatic, without need for any further action by
the holders of shares of Series B Convertible Preferred Stock and
regardless of whether the certificates representing such shares are
surrendered to the Corporation or its transfer agent; provided,
however, that the Corporation shall not be obligated to issue
certificates evidencing the shares of Common Stock issuable upon such
conversion unless certificates evidencing such shares of Series B
Convertible Preferred Stock so converted are surrendered to the
Corporation in accordance with the procedures described in SUBSECTION
(4)(D) below. Upon the conversion of the Series B Convertible Preferred
Stock pursuant to this SUBSECTION (4)(B)(I), the Corporation shall
promptly send written notice thereof, to each holder of record of
Series B Convertible Preferred Stock at his or its address then shown
on the records of the Corporation, which notice shall state that
certificates evidencing shares of Series B Convertible Preferred Stock
must be surrendered at the office of the Corporation (or of its
transfer agent for the Common Stock, if applicable) in the manner
described in SUBSECTION (4)(D) below.
(c) Fractional Shares. No fractional shares of Common Stock
shall be issued upon conversion of Series B Convertible Preferred
Stock, and any shares of Series B Convertible Preferred Stock
surrendered for conversion that would otherwise result in a fractional
share of Common Stock shall be redeemed at the then effective
Conversion Price per share, payable as promptly as possible when funds
are legally available therefor.
(d) Mechanics of Conversion. Before any holder of Series B
Convertible Preferred Stock shall be entitled to receive certificates
representing the shares of
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Common Stock into which shares of Series B Convertible Preferred Stock
are converted in accordance with SUBSECTIONS (4)(A) OR (4)(B) above,
such holder shall surrender the certificate or certificates for such
shares of Series B Convertible Preferred Stock duly endorsed, at the
office of the Corporation or of any transfer agent for the Series B
Convertible Preferred Stock, and shall give written notice to the
Corporation at such office of the name or names in which such holder
wishes the certificate or certificates for shares of Common Stock to be
issued, if different from the name shown on the books and records of
the Corporation. Said conversion notice shall also contain such
representations as may reasonably be required by the Corporation to the
effect that the shares to be received upon conversion are not being
acquired and will not be transferred in any way that might violate the
then applicable securities laws and are subject to restrictions upon
such shares imposed by law or agreement of the holder or his or its
predecessors. The Corporation shall, as soon as practicable thereafter
and in no event later than thirty (30) days after the delivery of said
certificates, issue and deliver at such office to such holder of Series
B Convertible Preferred Stock, or to the nominee or nominees of such
holder as provided in such notice, a certificate or certificates for
the number of shares of Common Stock to which such holder shall be
entitled as aforesaid. The person or persons entitled to receive the
shares of Common Stock issuable upon a conversion pursuant to
SUBSECTIONS (4)(A) OR (4)(B) shall be treated for all purposes as the
record holder or holders of such shares of Common Stock as of the
effective date of conversion specified in such Subsection. All
certificates issued upon the exercise or occurrence of the conversion
shall contain a legend governing restrictions upon such shares imposed
by law or agreement of the holder or his or its predecessors.
(e) Conversion Rate. In the event of conversion of the Series
B Convertible Preferred Stock pursuant to SUBSECTION (4)(A) OR (4)(B)
above, each share of Series B Convertible Preferred Stock shall be
converted into one (1) share of Common Stock (the "CONVERSION RATE").
Such Conversion Rate shall be subject to adjustment as provided in
SUBSECTION (4)(F) hereof.
(f) Adjustment for Subdivisions or Combinations of Common
Stock. In the event the Corporation at any time or from time to time
after the original issue date effects a subdivision, stock split, stock
for stock dividend, reverse stock split, or combination of the
outstanding Common Stock into a greater or lesser number of shares
without a proportionate and corresponding subdivision or combination of
the outstanding Series B Convertible Preferred Stock, then and in each
such event the Conversion Rate shall be increased or decreased
proportionately.
(g) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Conversion Rate pursuant to this
SUBSECTION (4), the Corporation at its expense shall promptly compute
such adjustment or readjustment in accordance with the terms hereof and
prepare and furnish to each holder of Series B Convertible Preferred
Stock a certificate setting forth such adjustment or readjustment and
showing in detail the facts upon which such adjustment or readjustment
is based. The Corporation shall, upon the written request at any time
of any holder of Series B Convertible Preferred Stock, furnish or cause
to be furnished to such holder a like certificate setting forth (A)
such
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adjustments and readjustments, (B) the Conversion Rate at that time in
effect, and (C) the number of shares of Common Stock and the amount, if
any, of other property that at that time would be received upon the
conversion of Series B Convertible Preferred Stock.
(h) Reservation of Stock Issuable Upon Conversion. The
Corporation shall at all times use reasonable efforts to reserve and
keep available out of its authorized but unissued shares of Common
Stock solely for the purpose of effecting the conversion of the shares
of the Series B Convertible Preferred Stock such number of its shares
of Common Stock as shall from time to time be sufficient to effect the
conversion of all outstanding shares of the Series B Convertible
Preferred Stock; and if at any time the number of authorized but
unissued shares of Common Stock shall be insufficient to effect the
conversion of all then outstanding shares of the Series B Convertible
Preferred Stock, the Corporation shall use reasonable efforts to take
such corporate action as may, in the opinion of its counsel be
necessary to increase its authorized but unissued shares of Common
Stock to such number of shares as shall be sufficient for such purpose.
(5) Additional Series. The Board of Directors of the Corporation may
subsequently adopt and approve one or more other series or class of preferred
shares with powers, rights, limitations, preferences and privileges that are
equal or superior to those of the Series B Convertible Preferred Stock. The
Corporation shall not, by amendment of its Articles of Incorporation or Bylaws
or through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, take any
action that has the effect of abrogating, circumventing or altering the rights
of the Series B Convertible Preferred Stock set forth in this Certificate or
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Corporation, but shall at all times in
good faith assist in the carrying out of all the provisions of this Certificate.
(6) Notices. Any notice required by the provisions hereof to be given
to the holders of shares of Series B Convertible Preferred Stock shall be deemed
given on the third business day following (and not including) the date on which
such notice is deposited in the United States Mail first-class, postage prepaid,
and addressed to each holder of record at his address appearing on the books of
the Corporation. Notice by any other means shall not be deemed effective until
actually received.
(7) Amendment. Any term relating to the Series B Convertible Preferred
Stock may be amended and the observance of any term relating to the Series B
Convertible Preferred Stock may be waived (either generally or in a particular
instance and either retroactively or prospectively) only upon the consent of the
Board of Directors and the vote or written consent of holders of more than fifty
percent (50%) of all Series B Convertible Preferred Stock then outstanding. Any
amendment or waiver so effected shall be binding upon the Corporation and any
holder of Series B Convertible Preferred Stock.
(8) No Reissuance of Series B Convertible Preferred Stock. No share or
shares of Series B Convertible Preferred Stock acquired by the Corporation by
reason of redemption, purchase, conversion or otherwise shall be reissued, and
all such shares shall be returned to the status of undesignated shares of
Preferred Stock.
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(9) Definition. As used in this Certificate, the term "issued and
outstanding equity" shall mean any and all shares of the Corporation's capital
stock that are issued and outstanding, including Voting and Non-Voting Common
Stock and Preferred Stock (the latter on an as-converted basis), but shall
exclude any stock subject to outstanding stock options issued for value or
authorized for issuance under any current or future "Compensatory Benefit Plan"
of the Corporation, as such term is defined in Rule 701 promulgated under the
Securities Act of 1933, as amended.
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
executed in its name by the undersigned duly authorized officers of the
Corporation, this 31st day of May, 2001.
By:
-----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President and Chief Executive Officer
ATTEST:
By:
-------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Secretary
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EXHIBIT "B"
SERIES A CONVERTIBLE PREFERRED STOCK
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") is made and
entered into this 31st day of May, 2001, by and among PHOTONIC SENSOR SYSTEMS,
INC., a Georgia corporation (the "COMPANY"), and GENOMIC SOLUTIONS INC., a
Delaware corporation (the "PURCHASER").
W I T N E S S E T H :
WHEREAS, the Company and the Purchaser have entered into that certain
Amended and Restated Preferred Stock Purchase Agreement dated of even date
herewith (the "PURCHASE AGREEMENT"), pursuant to which the Company will sell to
the Purchaser up to 3,244,500 shares of the Company's Series A Convertible
Preferred Stock, par value $0.001 per share (collectively, the "SHARES");
WHEREAS, the obligations of the Purchaser to purchase Shares under the
Purchase Agreement are conditioned upon, among other things, the execution and
delivery by the Company of this Agreement;
WHEREAS, the Purchase Agreement provides for the Purchaser to make
certain investments in the Company in a series of four tranches in the aggregate
amount of $3,500,000 (the "FULL INVESTMENT").
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties, intending to be legally
bound, hereby agree as follows:
1. CERTAIN DEFINITIONS. As used in this Agreement, the following terms
shall have the following respective meanings:
"1934 ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"COMMISSION" shall mean the Securities and Exchange Commission
or any successor agency.
"HOLDER" shall mean the Purchaser and any transferee of
Registrable Securities who, pursuant to SECTION 13 below, is entitled to
registration rights hereunder.
"OTHER HOLDERS" means persons who hold Other Registrable
Securities.
36
"OTHER REGISTRABLE SECURITIES" means shares of Common Stock,
other than the Registrable Securities, that are subject to registration rights.
The terms "REGISTER," "REGISTERED" and "REGISTRATION" refer to
a registration effected by preparing and filing a registration statement in
compliance with the Securities Act (as hereinafter defined), and the declaration
or ordering of the effectiveness of such registration statement.
"QUALIFIED OFFERING" shall mean a public offering by the
Company of its Common Stock pursuant to the Securities Act of 1933, as amended
(the "1933 ACT"), provided that (i) the total gross proceeds to the Company are
at least thirty million dollars ($30,000,000), and (ii) upon consummation of
such offering, the Company meets any quantitative listing criteria for initial
listing of the Company's Common Stock on the New York Stock Exchange or other
national stock exchange or on the National Association of Securities Dealers'
Automated Quotation National Market System.
"QUALIFIED REGISTRATION" means the registration of Common
Stock which could reasonably be expected to result in at least $1,000,000 of net
proceeds.
"REGISTRABLE SECURITIES" shall mean the shares of the
Company's Common Stock issuable upon the conversion of the Shares now or
hereafter sold to Purchaser by the Company pursuant to the Purchase Agreement,
as well as any shares of Common Stock that are issued to the Purchaser pursuant
to the Catch-Up Right set forth in that certain Shareholder's Agreement of even
date herewith; provided, however, that said shares of Common Stock shall be
treated as Registrable Securities and shall be subject to the provisions of this
Agreement only if and so long as they have not been (i) sold through a broker,
dealer, or underwriter in a public distribution or public securities
transaction, or (ii) sold in a transaction exempt from the registration and
prospectus delivery requirement of the Securities Act under SECTION 4(1) thereof
so that all transfer restrictions and restrictive legends with respect thereto
are removed upon the consummation of such sale.
"REGISTRATION EXPENSES" shall mean all expenses incurred by
the Company in complying with SECTIONS 5 AND 6 hereof, including, without
limitation, all registration, qualification and filing fees, printing expenses,
escrow fees, fees and disbursements of counsel for the Company, blue sky fees
and expenses, fees and disbursements of one counsel for the selling Holder or
Holders selected by them (which the Company may request be the Company's counsel
if such counsel is reasonably acceptable to such selling Holders) and the
expense of any special audits incident to or required by any such registration.
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended.
"SELLING EXPENSES" shall mean all underwriting discounts and
selling commissions applicable to the securities registered by the Holders.
"STOCK PLANS" shall include, without limitation, any of the
Company's 1992 Stock Option Plan, 2000 Stock Incentive Plan, or any other
"Compensatory Benefit Plan" (as
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defined in Rule 701 promulgated under the Securities Act) that is approved after
the date of this Agreement by the Corporation's Board of Directors and
shareholders.
2. RESTRICTIONS ON TRANSFERABILITY. The Registrable Securities shall
not be transferable except upon the conditions specified in this Agreement,
which conditions are intended to ensure compliance with the provisions of the
Securities Act. Except as provided in SECTIONS 4, 5 AND 6 below, each Holder of
Registrable Securities will cause any proposed transferee of the Registrable
Securities held by such Holder to agree to take and hold such Registrable
Securities subject to the provisions and upon the conditions specified in this
Agreement.
3. RESTRICTIVE LEGEND. Each certificate representing Registrable
Securities shall (unless otherwise permitted by the provisions of ▇▇▇▇▇▇▇ ▇, ▇
▇▇▇ ▇ ▇▇▇▇▇) ▇▇ stamped or otherwise imprinted with a legend in the following
form (in addition to any legend required under applicable state securities
laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933. THESE SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT OR UNLESS
SOLD PURSUANT TO RULE 144 OF SAID ACT.
4. NOTICE OF TRANSFERS PURSUANT TO EXEMPTION. The Holder of each
certificate representing Registrable Securities by acceptance thereof agrees to
comply in all respects with the provisions of this SECTION 4. Prior to any
proposed transfer of any Registrable Securities, unless there is in effect a
registration statement under the Securities Act covering the proposed transfer,
the Holder thereof shall give written notice to the Company of such Holder's
intention to effect such transfer. Each such notice shall describe the manner
and circumstances of the proposed transfer in sufficient detail, and shall, if
the Company so requests, be accompanied (except in transactions in compliance
with Rule 144) by a written opinion of legal counsel (in the case of Purchaser,
its general counsel) who shall be reasonably satisfactory to the Company,
addressed to the Company and reasonably satisfactory in form and substance to
the Company's counsel, to the effect that the proposed transfer of the
Registrable Securities may be effected without registration under the Securities
Act, whereupon the Holder of such Registrable Securities shall be entitled to
transfer such Registrable Securities in accordance with the terms of the notice
delivered by the Holder to the Company; provided, however, that no opinion need
be obtained with respect to a transfer to an "AFFILIATE" of a Holder of
Registrable Securities as that term is defined in Rule 405 promulgated by the
Commission under the Securities Act. Each certificate evidencing the Registrable
Securities transferred as above provided shall bear the appropriate restrictive
legend set forth in SECTION 3 above, except that such certificate shall not bear
such restrictive legend if in the opinion of counsel for the Company such legend
is not required in order to establish compliance with any provisions of the
Securities Act.
5. REQUESTED REGISTRATION. The provisions of this SECTION 5 shall take
effect and shall be enforceable against the Company only upon completion of the
Full Investment.
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5.1 Request for Registration. Any Holder or group of Holders
holding a majority of the Registrable Securities may, at any time during the
period commencing as of one (1) year after an initial public offering of the
Company's Common Stock and ending three (3) years after an initial public
offering of the Company's Common Stock, make written request that the Company
effect one Qualified Registration with respect to such Registrable Securities.
Upon timely receipt of such request, the Company will:
(a) promptly give written notice of the proposed
registration to all Holders and Other Holders;
(b) as soon as practicable, use its best efforts to
effect such registration (including, without limitation, the
execution of an undertaking to file post-effective amendments,
appropriate qualification under applicable blue sky or other
state securities laws and appropriate compliance with
applicable regulations issued under the Securities Act and any
other governmental requirements or regulations) as may be so
requested and as would permit or facilitate the sale and
distribution of all or such portion of such Registrable
Securities or Other Registrable Securities as are specified in
such request, together with all or such portion of the
Registrable Securities of any Holder or Holders and the Other
Registrable Securities of any Other Holder or Other Holders
joining in such request as are specified in a written request
received by the Company within twenty (20) business days after
receipt of such written notice from the Company.
(c) Notwithstanding the foregoing, the Company shall
not be obligated to take any action to effect any such
registration pursuant to this SECTION 5.1:
(i) In any particular jurisdiction in which
the Company would be required to execute a general
consent to service of process in effecting such
registration, qualification or compliance unless the
Company is already subject to service in such
jurisdiction and except as may be required by the
Securities Act;
(ii) After the Company has effected one such
registration pursuant to this SECTION 5.1 and such
registration has been declared or ordered effective;
or
(iii) During the period starting sixty (60)
days prior to the Company's estimated date of filing
of and ending on the date one hundred eighty (180)
days following the effective date of a registration
statement previously filed by the Company.
Subject to the foregoing paragraph, the Company shall file a
registration statement covering the Registrable Securities and Other Registrable
Securities so requested to be registered as soon as practicable after receipt of
the request or requests of any Holder(s) and/or Other Holder(s). If, however,
the Company shall furnish to the Holder(s) and/or Other Holder(s) requesting a
registration statement pursuant to this SECTION 5 a certificate signed by the
President
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39
of the Company stating that, in the good faith judgment of the Board
of Directors of the Company, it would be detrimental to the Company and its
shareholders for such registration statement to be filed and it is therefore
essential to defer the filing of such registration statement, the Company shall
have the right to defer such filing for a period of not more than one hundred
eighty (180) days after receipt of the request of the Holder(s) and/or Other
Holder(s) requesting such registration; provided, however, that the Company may
not utilize this right more than once in any consecutive twelve-month period.
In addition to the registration required above, the Company shall, upon
written request of any Holder or group of Holders holding a majority of the
Registrable Securities, effect one (1) registration per year on Form S-3 (or any
successor form), if available. Any such short-form registration may be requested
without regard to expected net proceeds and shall not be counted as a Qualified
Registration. Such registrations shall be effected in accordance with and
subject to the foregoing provisions of this SECTION 5.1.
5.2 Underwriting. If the Holders and/or Other Holders intend
to distribute the Registrable Securities and/or Other Registrable Securities
covered by their request by means of an underwriting, they shall so advise the
Company as a part of their request made pursuant to SECTION 5.1 and the Company
shall include such information in the written notice referred to in SECTION 5.1.
The right of any Holder and/or Other Holder to registration pursuant to SECTION
5.1 shall be conditioned upon such Holder's or Other Holder's participation in
such underwriting and the inclusion of such Holder's Registrable Securities or
the Other Holder's Other Registrable Securities in the underwriting to the
extent requested (unless otherwise mutually agreed by a majority in interest of
the Holders and the Other Holders) to the extent provided herein.
The Company shall (together with all Holders and Other Holders
proposing to distribute their securities through such underwriting) enter into
an underwriting agreement in customary form with the managing underwriter
selected for such underwriting by the mutual written agreement of the Company
and a majority in interest of the Holders and Other Holders. Notwithstanding any
other provision of this SECTION 5, if the managing underwriter advises the
Holders and Other Holders in writing that marketing factors require a limitation
of the number of shares to be underwritten, then the Company shall so advise all
Holders and Other Holders and the number of shares of Registrable Securities and
Other Registrable Securities that may be included in the registration and
underwriting shall be allocated among all Holders and Other Holders requesting
inclusion in the registration in proportion, as nearly as practicable, to the
respective amounts of Registrable Securities held by such Holders and Other
Holders at the time of filing the registration statement. No Registrable
Securities or Other Registrable Securities excluded from the underwriting by
reason of the managing underwriter's marketing limitation shall be included in
such registration.
If any Holder or Other Holder disapproves of the terms of the
underwriting, such person may elect to withdraw therefrom by written notice to
the Company, the managing underwriter and the Holders and Other Holders. The
Registrable Securities and/or Other Registrable Securities so withdrawn by the
Holder or Other Holder from such underwriting shall also be withdrawn from
registration; provided, however, that if by the withdrawal of such Registrable
Securities or Other Registrable Securities a greater number of Registrable
Securities and Other
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40
Registrable Securities held by the remaining Holders and Other Holders may be
included in such registration (up to the maximum of any limitation imposed by
the underwriters), then the Company shall offer to all Holders and Other Holders
who have included Registrable Securities or Other Registrable Securities in the
registration the right to include additional Registrable Securities or Other
Registrable Securities in the same proportion used in determining the
underwriter limitation in this SECTION 5.2.
5.3 Inclusion of Other Common Stock. The Company shall be
entitled to include in any registration statement referred to in this SECTION 5
for sale in accordance with the method of disposition specified by the Holder(s)
and Other Holder(s), shares of Common Stock to be sold by the Company for its
own account and for the accounts of other shareholders, except as and to the
extent that in the opinion of the managing underwriter (if such method of
disposition shall be an underwritten public offering), such inclusion would
adversely affect the marketing of the Registrable Securities and Other
Registrable Securities included in the offering. The Holders acknowledge that
the Company has granted or may hereafter grant separate demand registration
rights to the Other Holders which do not allow for the pro rata participation by
the Holders in an offering by such Other Holders, and that the Holders'
participation therein may be limited as set forth in the piggyback registration
rights provided in Section 6 hereof.
6. COMPANY REGISTRATION.
6.1 Notice of Registration. If the Company shall determine to
register any of its securities, either for its own account or the account of a
security holder or holders, other than a registration relating solely to
employee benefit plans, or a registration relating solely to a Commission Rule
145 transaction, the Company will:
(a) promptly give to each Holder and Other Holder
written notice thereof; and
(b) include in such registration (and any related
qualification under blue sky laws or other compliance), and in
any underwriting involved therein, all the Registrable
Securities and Other Registrable Securities specified in a
written request or requests, made within twenty (20) business
days after receipt of such written notice from the Company, by
any Holder(s) and/or Other Holder(s), provided that to the
extent so advised by the underwriters, the Company may limit
the amount of Registrable Securities and Other Registrable
Securities to be included by the Holder(s) and/or Other
Holder(s) in any registration and to the extent so advised by
the underwriters, all Registrable Securities and Other
Registrable Securities entirely from the registration relating
to the Company's initial public offering.
6.2 Underwriting. If the registration of which the Company
gives notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders and the Other Holders by written notice. All
Holders and Other Holders proposing to distribute their securities through such
underwriting shall (together with the Company) enter into an underwriting
agreement in customary form with the underwriter or underwriters selected by the
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41
Company. Notwithstanding any other provision of this SECTION 6, if the
representative of the underwriters advises the Company in writing that, in its
opinion, inclusion of the full number of Registrable Securities and Other
Registrable Securities requested to be included in the registration by Holders
and Other Holders would adversely affect the underwriting, the representative
may limit the number of shares of Registrable Securities and Other Registrable
Securities to be included in the registration and underwriting. The Company
shall so advise all Holders and Other Holders requesting registration of
Registrable Securities and Other Registrable Securities of the limitation and
the number of Registrable Securities and Other Registrable Securities to be
included in the registration by reason of the limitation imposed by the
representative. The number of shares of Registrable Securities and Other
Registrable Securities to be included in the registration shall be allocated
first to all Other Holders having express priority as to piggyback registration
rights and then pro rata among the Holders and Other Holders based on the ratio
that the number of Registrable Securities or Other Registrable Securities (as
applicable) held by such Holder or Other Holder and proposed to be registered
bears to the total number of Registrable Securities and Other Registrable
Securities proposed to be registered by the Holders and Other Holders in the
registration. No Registrable Securities or Other Registrable Securities excluded
from the underwriting by reason of the managing underwriter's marketing
limitation shall be included in such registration.
6.3 Withdrawal by Holders and Other Holders. If any Holder or
Other Holder who has requested inclusion in such registration as provided above
disapproves of the terms of the underwriting, such person may elect to withdraw
therefrom by written notice to the Company and the underwriter. The securities
so withdrawn shall also be withdrawn from registration.
6.4 Withdrawal by the Company. Notwithstanding the foregoing,
the Company may, in its sole discretion and without the consent of or prior
notice to any Holders or Other Holders, withdraw any registration statement
referred to in this SECTION 6 and abandon the proposed offering at anytime
without thereby incurring any liability to any Holder or Other Holder.
7. EXPENSES OF REGISTRATION. The Company will pay all Registration
Expenses incurred in connection with the registrations allowed pursuant to
SECTIONS 5 AND 6; provided, however, that if the registration request pursuant
to SECTION 5.1 hereof is subsequently withdrawn at the request of the Holder,
the Holder shall forfeit its right to its one Qualified Registration pursuant to
SECTION 5.1, unless the Holder elects to reimburse the Company for the expenses
incurred by the Company attributable to the registration of the Registrable
Securities within ninety (90) days of such withdrawal, in which case the Holder
shall not be deemed to have exercised its right to require the Company to
register Registrable Securities pursuant to SECTION 5.1; provided further,
however, that if at the time of such withdrawal, the Holder has learned of a
material adverse change in the condition, business, or prospects of the Company
which was not disclosed by the Company and not known to the Holder at the time
of its request and the Holder has withdrawn the request with reasonable
promptness following disclosure by the Company of such material adverse change,
then the Holder shall not be required to pay any of the Registration Expenses
and shall retain its rights pursuant to SECTION 5.1. All Selling Expenses
relating to securities registered by the Holders shall be borne by the Holders
of such securities pro rata on the basis of the number of shares so registered.
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8. REGISTRATION PROCEDURES. The Company will keep each Holder advised
in writing as to the initiation of each registration, qualification and
compliance effected by the Company pursuant to this Agreement, and as to the
completion thereof. Without limiting the foregoing, that Company will, at its
expense, observe the procedures set forth in this SECTION 8.
8.1 Maintenance of Registration. The Company shall keep such
registration, qualification, or compliance effective for a period of 120 days or
until the Holder or Holders have completed the distribution described in the
registration statement relating thereto, whichever first occurs; provided,
however, that such 120-day period shall be extended for a period of time equal
to the period the Holder refrains from selling any securities included in such
registration at the request of the Company or an underwriter of Common Stock (or
other securities) of the Company. In the case of any registration of Registrable
Securities on Form S-3 which are intended to be offered on a continuous or
delayed basis, such 120-day period shall be extended, if necessary, to keep the
registration statement effective until all such Registrable Securities are sold,
provided that: (i) Rule 415, or any successor rule under the Securities Act,
permits an offering on a continuous or delayed basis; and (ii) applicable rules
under the Securities Act governing the obligation to file a post-effective
amendment permit, in lieu of filing a post-effective amendment, the
incorporation by reference of information contained in periodic reports filed
pursuant to Section 13 or 15(d) of the 1934 Act. Notwithstanding the foregoing,
the Company may, at any time cause the suspension of sales for up to forty-five
(45) days on each such occasion by notifying (on two (2) days' advance written
notice) the Holders whose Registrable Securities are the subject matter of such
registration statement that the Company is exercising its rights under this
clause and that sales must be suspended because the Company reasonably believes
it possesses material information, disclosure of which in the Company's judgment
would not be in the Company's best interests.
8.2 Prospectuses. The Company shall furnish such number of
prospectuses and other documents incident thereto as Holders from time to time
may reasonably request in order to facilitate the disposition of securities
owned by them.
8.3 Supplements to Registration Statement. The Company shall
prepare and file with the Commission such amendments and supplements to such
registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement.
8.4 Blue Sky Compliance. The Company shall use its best
efforts to register and qualify the securities covered by such registration
statement under such other securities or blue sky laws of such jurisdictions as
shall be reasonably requested by the Holders, provided that the Company shall
not be required in connection therewith or as a condition thereto to qualify to
do business or to file a general consent to service of process in any such
states or jurisdictions.
8.5 Underwriting Agreement. In the event of any underwritten
public offering, the Company shall enter into and perform its obligations under
an underwriting agreement, in usual and customary form, with the managing
underwriter of such offering. Each
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Holder participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
8.6 Notification of Material Events. The Company shall notify
each Holder of Registrable Securities covered by such registration statement at
any time when a prospectus relating thereto is required to be delivered under
the Securities Act of the happening of any event as a result of which 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 light of the circumstances then existing.
9. TERMINATION OF REGISTRATION RIGHTS. Notwithstanding any contrary
provision in SECTION 5 of this Agreement, the registration rights granted
pursuant to this Agreement shall terminate as to all Holders upon the fifth
anniversary of the closing of any Qualified Offering. In addition to and not in
limitation of the foregoing, the Holders' demand registration rights in SECTION
5.1 hereof shall terminate upon the earlier to occur of the following: (i) the
sale of all or substantially of the Company's assets; (ii) the sale of more than
half of the Company's issued and outstanding equity securities at any time after
the date of this Agreement in a single transaction or series of related
transactions; (iii) any event or series of events as a result of which the
Purchaser ceases to own or have the right to purchase equity securities equal to
ten percent (10%) or more of the issued and outstanding equity; or (iv) the
third anniversary of the closing of any Qualified Offering. As used in this
SECTION 9, the term "issued and outstanding equity" shall mean any and all
shares of the Company's capital stock that are issued and outstanding, including
Voting and Non-Voting Common Stock and Preferred Stock (the latter on an
as-converted basis), and any shares of Common Stock the Purchaser has the right
to purchase, but shall exclude any stock subject to outstanding stock options
issued for value or authorized for issuance under the Company's Stock Plans.
10. INDEMNIFICATION.
10.1 Indemnification by the Company. To the extent permitted
by law, the Company will indemnify each Holder, each of its officers, directors
and partners and such Holder's legal counsel and independent accountants, and
each person controlling such Holder within the meaning of SECTION 15 of the
Securities Act, with respect to which registration, qualification or compliance
has been effected pursuant to this Agreement, and each underwriter, if any, and
each person who controls any underwriter within the meaning of SECTION 15 of the
Securities Act, against all expenses, claims, losses, damages and liabilities
(or actions in respect thereof), including any of the foregoing incurred in
settlement of any litigation, arising out of or based on any untrue statement
(or alleged untrue statement) of a material fact contained in any registration
statement, prospectus, offering circular or other document, or any amendment or
supplement thereto, incident to any such registration, qualification or
compliance, or based on any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they were made, not misleading,
or any violation by the Company of any rule or regulation promulgated under the
Securities Act or the 1934 Act applicable to the Company and relating to action
or inaction required of the Company in connection with any such registration,
qualification or compliance,
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44
and will reimburse each such Holder, each of its officers, directors and
partners and such Holder's legal counsel and independent accountants, and each
person controlling such Holder, each such underwriter and each person who
controls any such underwriter, for any legal and any other expenses reasonably
incurred in connection with investigating, preparing or defending any such
claim, loss, damage, liability or action, provided that the Company will not be
liable in any such case to the extent that any such claim, loss, damage,
liability or expense arises out of or is based on any untrue statement or
omission or alleged untrue statement or omission, made in reliance upon and in
conformity with written information furnished to the Company by an instrument
duly executed by such Holder or underwriter and stated to be specifically for
use therein.
10.2 Indemnification by the Holders. To the extent permitted
by law, each Holder will, if Registrable Securities held by such Holder are
included in the securities as to which such registration, qualification or
compliance is being effected, indemnify the Company, each of its directors and
officers and its legal counsel and independent accountants, each underwriter, if
any, of the Company's securities covered by such a registration statement, each
person who controls the Company or such underwriter within the meaning of
SECTION 15 of the Securities Act, and each other such Holder, each of its
officers and directors and each person controlling such Holder within the
meaning of Section 15 of the Securities Act, against all claims, losses, damages
and liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus, offering circular or other
document, or 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 will reimburse the Company, such Holders, such directors,
officers, legal counsel, independent accountants, underwriters or control
persons for any legal or any other expenses reasonably incurred in connection
with investigating or defending any such claim, loss, damage, liability or
action, in each case to the extent, but only to the extent, that such untrue
statement (or alleged untrue statement) or omission (or alleged omission) is
made in such registration statement, prospectus, offering circular or other
document in reliance upon and in conformity with written information furnished
to the Company by an instrument duly executed by such Holder and stated to be
specifically for use therein; provided, however, that the obligations of such
Holders hereunder shall be limited to an amount equal to the gross proceeds
before expenses and commissions to each such Holder of Registrable Securities
sold as contemplated herein.
10.3 Indemnification Procedures. Each party entitled to
indemnification under this SECTION 10 (the "INDEMNIFIED PARTY") shall give
notice to the party required to provide indemnification (the "INDEMNIFYING
PARTY") promptly after such Indemnified Party has actual knowledge of any claim
as to which indemnity may be sought, and shall permit the Indemnifying Party to
assume the defense of any such claim or any litigation resulting therefrom,
provided that counsel for the Indemnifying Party, who shall conduct the defense
of such claim or litigation, shall be approved by the Indemnified Party (whose
approval shall not be unreasonably withheld), and the Indemnified Party may
participate in such defense at such party's expense, and provided further that
the failure of any Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under this Agreement, except
to the extent, but only to the extent, that the Indemnifying Party's ability to
defend against such claim or litigation is
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45
impaired as a result of such failure to give notice. No Indemnifying Party, in
the defense of any such claim or litigation, shall, except with the consent of
each Indemnified Party, 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.
10.4 Unavailability of Indemnification. If the indemnification
provided for in this SECTION 10 is held by a court of competent jurisdiction to
be unavailable to an Indemnified Party with respect to any loss, liability,
claim, damage, or expense referred to therein, then the Indemnifying Party, in
lieu of indemnifying such Indemnified Party hereunder, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such loss,
liability, claim, damage, or expense in such proportion as is appropriate to
reflect the relative fault of the Indemnifying Party on the one hand and of the
Indemnified Party on the other in connection with the statement or omissions
that resulted in such loss, liability, claim, damage, or expense as well as any
other relevant equitable considerations. The relative fault of the Indemnifying
Party and of the Indemnified Party shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission to state a material fact relates to information supplied by the
Indemnifying Party or by the Indemnified Party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
11. INFORMATION BY HOLDER. The Holder or Holders of Registrable
Securities included in any registration shall furnish to the Company such
information regarding such Holder or Holders and the distribution proposed by
such Holder or Holders as the Company may reasonably request in writing and as
shall be required in connection with any registration, qualification or
compliance referred to in this Agreement.
12. RULE 144 REPORTING. With a view to making available the benefits of
certain rules and regulations of the Commission which may at any time permit the
sale of the Registrable Securities to the public without registration, after
such time as a public market exists for the Common Stock of the Company, the
Company agrees observe the Rule 144 reporting procedures set forth in this
SECTION 12.
12.1 Public Information. The Company shall make and keep
public information available, as those terms are understood and defined in Rule
144 under the Securities Act, at all times after the effective date of the first
registration under the Securities Act filed by the Company for an offering of
its securities to the general public.
12.2 1934 Act Reporting. The Company shall file with the
Commission in a timely manner all reports and other documents required of the
Company under the Securities Act and the 1934 Act (at any time after it has
become subject to such reporting requirements).
12.3 Assistance to Holders. The Company shall furnish to
Holders of Registrable Securities forthwith upon request, a written statement by
the Company as to its compliance with the reporting requirements of Rule 144 (at
any time after 90 days after the effective date of the first registration
statement filed by the Company for an offering of its
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46
securities to the general public), and of the Securities Act and the 1934 Act
(at any time after it has become subject to such reporting requirements), a copy
of the most recent annual or quarterly report of the Company, and such other
reports and documents of the Company as a Holder of Registrable Securities may
reasonably request in availing itself of any rule or regulation of the
Commission allowing such Holder to sell any such securities without
registration.
13. TRANSFER OF REGISTRATION RIGHTS. The right to cause the Company to
register securities granted the Holders hereunder may be assigned to a
transferee or assignee with the transfer or assignment of the Registrable
Securities, provided the (i) such transfer or assignment complies with SECTION 4
hereof; and (ii) such transferee or assignee acquires at least twenty percent
(20%) of the Registrable Securities.
14. LOCK-UP. Each of the Holders hereby agrees not to offer, sell, make
any short sale of, loan, grant any option for the purchase of, or otherwise
dispose of any of the Company's Common Stock held of record or beneficially
owned by such person during the period of time (not to exceed 180 days)
determined by the Board of Directors of the Company upon advice of its managing
underwriter, from and after the effective date of any registration statement
(other than shares of Common Stock included therein).
15. GOVERNING LAW. This Agreement and the legal relations between the
parties arising hereunder shall be governed by and interpreted in accordance
with the laws of the State of Georgia, without giving effect to the conflict of
laws provisions thereof. The parties hereto agree to submit to the jurisdiction
of the federal and state courts of the State of Georgia with respect to the
breach or interpretation of this Agreement or the enforcement of any and all
rights, duties, liabilities, obligations, powers, and other relations between
the parties arising under this Agreement.
16. ENTIRE AGREEMENT; AMENDMENT. This Agreement contains the entire
agreement of the parties with respect to the subject matter hereof; all previous
agreements and discussions relating to the same or similar subject matter being
merged herein. The parties acknowledge and agree that neither of them has made
any representation with respect to the subject matter of this Agreement or any
representations inducing the execution and delivery hereof except as
specifically set forth herein. Each of the parties hereto acknowledges that it
has relied on its own judgment in entering into this Agreement. This Agreement
may not be changed, amended, modified, terminated or waived including
specifically the provisions of this SECTION 16 except by a writing signed by
both parties hereto. Neither this Agreement nor the provisions of this Section
16 may be changed, amended, modified, terminated or waived as a result off any
failure to enforce any provision or the waiver of any specific breach or
breaches thereof or any course of conduct of the parties.
17. NOTICES, ETC. All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed effectively given
upon delivery to the party to be notified in person or by courier service or
five days after deposit with the United States mail, by registered or certified
mail, postage prepaid, addressed to the party at the address set forth on the
signature page hereof or at such other address as the party may request by
notifying the other party in writing.
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18. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which may be executed by less than all parties hereto,
each of which shall be enforceable against the parties actually executing such
counterparts, and all of which together shall constitute one instrument.
19. SEPARATE COUNSEL. By signing this Agreement, the parties hereto
acknowledge that they have been advised and had the opportunity to obtain legal
counsel and advice regarding this Agreement and that they have read and
understand this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Registration
Rights Agreement as of the date first set forth above.
COMPANY:
PHOTONIC SENSOR SYSTEMS, INC.
By: (SEAL)
--------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
Address: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
INVESTOR:
GENOMIC SOLUTIONS INC.
By: (SEAL)
--------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President and General
Counsel
Address: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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EXHIBIT "C"
SERIES A CONVERTIBLE PREFERRED STOCK
SHAREHOLDER'S AGREEMENT
THIS SHAREHOLDER'S AGREEMENT (the "Agreement") is made and entered into
this 31st day of May 2001, by and among PHOTONIC SENSOR SYSTEMS, INC., a Georgia
corporation (the "COMPANY") and GENOMIC SOLUTIONS INC., a Delaware corporation
(the "PURCHASER").
W I T N E S S E T H:
WHEREAS, the Company and the Purchaser have entered into that certain
Amended and Restated Preferred Stock Purchase Agreement dated of even date
herewith (the "PURCHASE AGREEMENT"), pursuant to which the Company is selling to
the Purchaser shares of the Company's Series A Convertible Preferred Stock
("SHARES");
WHEREAS, the obligations of the Purchaser to purchase Shares under the
Purchase Agreement are conditioned upon, among other things, the execution and
delivery by the Company of this Agreement; and
WHEREAS, the Purchase Agreement provides for the Purchaser to make
certain investments in the Company in a series of four tranches in the aggregate
amount of $3,500,000 (the "FULL INVESTMENT").
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties, intending to be legally
bound, hereby agree as follows:
1. CERTAIN DEFINITIONS. As used in this Agreement, the following terms
shall have the following respective meanings:
"ISSUED AND OUTSTANDING EQUITY" shall mean any and all shares
of the Company's capital stock that are issued and outstanding, including Voting
and Non-Voting Common Stock and Preferred Stock (the latter on an as-converted
basis), but shall exclude any stock subject to outstanding stock options issued
for value or authorized for issuance under the Company's Stock Plans (as defined
in SECTION 3.3 below).
"QUALIFIED OFFERING" shall mean a public offering by the
Company of its Common Stock pursuant to the Securities Act of 1933, as amended
(the "1933 ACT"), provided that (i) the total gross proceeds to the Company are
at least thirty million dollars ($30,000,000), and (ii) upon consummation of
such offering, the Company meets any quantitative listing criteria for initial
listing of the Company's Common Stock on the New York Stock Exchange or other
national stock exchange or on the National Association of Securities Dealers'
Automated Quotation National Market System.
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2. CONDITION PRECEDENT. The Purchaser's Preemptive Rights set forth in
SECTION 3 and Catch-Up Right set forth in SECTION 4 shall not be exercisable
unless and until the Purchaser has made the Full Investment (which for all
purposes under this Agreement shall be deemed to have occurred as of the date
the Purchaser tenders payment of the purchase price for all 3,244,500 Shares
issuable pursuant to the Purchase Agreement).
3. PREEMPTIVE RIGHTS.
3.1 Grant of Rights. Except as set forth in SECTION 3.3
hereof, the Company shall not issue or sell any shares of Common Stock or other
equity securities, any rights or options to purchase Common Stock or other
equity securities, or any debt or shares convertible into or exchangeable for
Common Stock or other equity securities, whether now or hereafter authorized and
whether unissued or in the treasury (collectively, "NEW SECURITIES"), unless the
Purchaser shall first have been given the right to acquire, at a price no less
favorable than that at which such New Securities are to be offered to others, a
portion of the New Securities, as determined in accordance with SECTION 3.2
below.
3.2 Number of Shares. The Purchaser shall have the right
("PREEMPTIVE RIGHT") to purchase a portion of any issuance of New Securities
determined by multiplying the number of New Securities being issued by a
fraction, the numerator of which is the number of shares of Common Stock held by
the Purchaser as a result of conversion of the Purchaser's shares of Series A
Convertible Preferred Stock, plus the number of shares of Common Stock issuable
to the Purchaser assuming conversion of shares of Series A Convertible Preferred
Stock held by the Purchaser, plus the number of shares of Common Stock held by
the Purchaser as a result of the Purchaser's exercise of the Catch-Up Right
pursuant to Section 4 hereof, if any, all of which to be determined on the date
of the Company's written notice pursuant to SECTION 3.4 hereof, and the
denominator of which is the number of shares of issued and outstanding equity.
3.3 Exceptions. The restrictions contained in, and preemptive
rights granted under, this SECTION 3 shall not apply with respect to any of the
following: (i) issuance or any conversion of the Series A Convertible Preferred
Stock; (ii) conversion of any convertible security or exercise of any option or
warrant that is issued before the Purchaser is eligible to exercise its
Preemptive Right, (iii) conversion of any convertible security or exercise of
any option or warrant after such convertible security, option or warrant has
been offered to the Purchaser pursuant to this SECTION 3; (iv) issuance of
securities pursuant to the acquisition of another corporation by the Company by
merger, purchase of substantially all the assets of the Company or other
reorganization whereby the Company acquires more than fifty percent (50%) of the
voting power of such corporation; (v) issuance of equity securities not to
exceed, in the aggregate, five percent (5%) of the outstanding capital stock of
the Company or securities exercisable for or convertible into such amount of
capital stock, or any combination thereof, in connection with any borrowings,
direct or indirect, from financial or other institutions regularly engaged in
the business of lending of money; (vi) issuance of equity securities, or
options, warrants or rights convertible into or otherwise related to equity
securities, or any combination thereof, issued pursuant to any current or future
"Compensatory Benefit Plan," as such term is defined in Rule 701 promulgated
under the 1933 Act, including, without limitation, any of the foregoing issued
or issuable pursuant to the Company's 1992 Stock Option Plan or 2000 Stock
Incentive Plan (collectively, the "STOCK PLANS"); (vii) issuance of securities
pursuant to any stock
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dividend, stock split, combination or other reclassification by the Company of
any of its capital stock; (viii) issuance of securities in connection with
strategic alliances approved by the Company's Board of Directors; (ix) issuance
of securities pursuant to the anti-dilution provisions associated with any
capital stock of the Company or securities exercisable for or convertible into
capital stock, or (x) the issuance of any equity securities to the Purchaser
pursuant to SECTION 4 below.
3.4 Notice and Exercise. In the event the Company proposes to
undertake an issuance of New Securities, it shall give the Purchaser written
notice of its intention, describing the quantity and type of New Securities and
the price and the general terms upon which the Company proposes to issue the
same. Purchaser shall have twenty (20) days from the date of any such notice to
exercise its Preemptive Right in accordance with this SECTION 3 by giving
written notice to the Company. Purchaser's notice must state the quantity of New
Securities to be purchased, which quantity shall not be greater than the
quantity permitted in SECTION 3.2 above, and shall confirm that Purchaser will
purchase the New Securities for the price and upon the general terms specified
in the Company's notice.
3.5 Closing. If the Purchaser does not elect to purchase the
New Securities during the time set forth in SECTION 3.4 above, the Company shall
have ninety (90) days following the expiration of the period after its notice to
the Purchaser in which to sell the New Securities described in such notice, at a
price and upon general terms no more favorable to the purchasers thereof than
the price and terms specified in the Company's notice. In the event the Company
has not sold all such New Securities within said ninety (90) day period, the
Company shall not thereafter issue or sell any of the remainder, without
offering such securities to the Purchaser in the manner provided herein.
3.6 Termination of Preemptive Right. The Purchaser's
Preemptive Right shall terminate upon the earliest to occur of the following:
(i) the sale of all or substantially all of the Company's assets; (ii) the sale
of more than half of the Company's issued and outstanding equity securities at
any time after the date of this Agreement in a single transaction or series of
related transactions; (iii) the occurrence of any event or series of events as a
result of which the Purchaser ceases to own or have the right to purchase equity
securities equal to ten percent (10%) or more of the issued and outstanding
equity of the Company; or (iv) immediately prior to the effectiveness of the
registration statement for any Qualified Offering.
4. CATCH-UP RIGHT.
4.1 Grant of Right. The Purchaser is hereby granted a one-time
right (the "CATCH-UP RIGHT") to purchase additional shares of Common Stock so
that, upon issuance thereof and when added to the other shares of Common Stock
and Preferred Stock then held by the Purchaser, the Purchaser would own nineteen
and nine-tenths percent (19.9%) of the issued and outstanding equity of the
Company. For the purpose of determining the number of additional shares of
Common Stock issuable upon exercise of the Catch-Up Right, the Purchaser shall
be deemed to be the record holder of all 3,244,500 Shares issuable to the
Purchaser pursuant to the Purchase Agreement (regardless of whether said Shares
are held of record by the Purchaser, redeemed by the Company, or transferred to
another shareholder). The Purchaser may exercise the Catch-Up Right as to all or
less than all of said additional shares of Common Stock. The
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purchase price for such shares of Common Stock shall be $1.07875 per share
("PURCHASE PRICE").
4.2 Notice and Exercise. Within ten (10) business days
following the date the Purchaser has made the Full Investment, the Company shall
give written notice to the Purchaser of the percentage of the issued and
outstanding equity of the Company represented by the Shares and the number of
additional shares of Common Stock, if any, that the Purchaser is entitled to
purchase pursuant to the Catch-Up Right. The Company shall also notify the
Purchaser of any subsequent changes in the number of additional shares of Common
Stock issuable upon exercise of the Catch-Up Right due to the issue or
redemption of capital stock between the date of the Company's initial notice and
the date the additional shares of Common Stock are issued to the Purchaser
hereunder. The Purchaser shall have ninety (90) days after the effective date of
the Company's initial notice in which to exercise the Catch-Up Right by
delivering to the Company the Exercise Agreement attached hereto as EXHIBIT A,
duly completed and executed by the Purchaser, and payment of the Purchase Price,
which shall be made at the option of the Purchaser by wire transfer of
immediately available funds to an account designated by the Company.
4.3 Adjustments. If at any time the Company shall (i) pay a
dividend in shares of Common Stock, (ii) subdivide any outstanding shares of
Common Stock into a greater number of shares of Common Stock, (iii) combine its
outstanding shares of Common Stock into a smaller number of shares of Common
Stock, or (iv) issue, by reclassification of its shares of Common Stock, any
other shares of its capital stock, then the purchase price per share and, if
applicable, the type of capital stock purchasable upon the exercise of this
Catch-Up Right shall be adjusted accordingly.
4.4 Securities Law Restrictions. If at any time during which
this Catch-Up Right is exercisable according to its terms there is no effective
registration statement on file with the Securities and Exchange Commission
covering the shares of Common Stock then issuable hereunder, the offer and sale
of the shares of Common Stock issuable upon the exercise of the Catch-Up Right
to Purchaser must be exempt from the registration requirements of the 1933 Act,
and such state securities laws as shall be applicable. The Company may condition
such exercise upon its receipt of such representations, factual assurances and
legal opinions as it shall reasonably deem necessary to determine and document
the availability of any such exemption and may further condition such exercise
upon such undertakings by the Purchaser or such restriction upon the
transferability of the shares of Common Stock to be acquired hereunder as it
shall reasonably determine to be necessary to effectuate and protect the claim
to any such exemption.
4.5 Valid Issuance. The Company covenants and agrees that all
shares of Common Stock which may be issued upon the exercise of this Catch-Up
Right will, upon issuance, be duly authorized, validly issued, fully paid and
non-assessable, free from all preemptive rights of any stockholder and free of
all taxes, liens and charges with respect to the issue thereof.
4.6 Reserved Shares. The Company covenants and agrees that
during the period within which this Catch-Up Right may be exercised, the Company
will at all times use its reasonable efforts to have authorized and reserved,
for the purpose of issue upon exercise of this
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Catch-Up Right, a sufficient number of shares of authorized but unissued Common
Stock when and as required to provide for the exercise in full of this Catch-Up
Right. If at any time the total number of shares of Common Stock issuable
pursuant hereto, together with the maximum number of shares of Common Stock
issuable upon conversion, exchange or exercise of (i) all then-outstanding
securities (whether debt or equity) of the Company convertible or exchangeable
for Common Stock and (ii) all then-outstanding warrants and options to purchase
Common Stock, would exceed the total number of authorized but unissued shares of
Common Stock, the Company shall use its reasonable efforts to obtain stockholder
approval to amend, and upon receipt of such approval shall, as soon as is
practicable amend, its Articles of Incorporation to increase the number of
authorized shares of Common Stock such that there shall be a sufficient number
of authorized and unissued shares of Common Stock available at all times to
effect the exercise hereof.
4.7 Termination of Catch-Up Right. The Catch-Up Right shall
terminate upon the earliest to occur of the following: (i) a sale of all or
substantially all of the assets of the Company; (ii) the sale of more than half
of the Company's issued and outstanding equity securities at any time after the
date of this Agreement in a single transaction or series of related
transactions; (iii) immediately prior to the effectiveness of the registration
statement for any Qualified Offering; (iv) ninety (90) days after the Company
has given the notice described in SECTION 4.2 above; or (v) December 1, 2003.
5. SPECIFIC PERFORMANCE. The rights of the parties under this Agreement
are unique and, accordingly, the parties shall, in addition to such other
remedies as may be available to any of them at law or in equity, have the right
to enforce their rights hereunder by actions for specific performance to the
extent permitted by law.
6. GOVERNING LAW. This Agreement and the legal relations between the
parties arising hereunder shall be governed by and interpreted in accordance
with the laws of the State of Georgia, without giving effect to the conflict of
laws provisions thereof. The parties hereto agree to submit to the jurisdiction
of the federal and state courts of the State of Georgia with respect to the
breach or interpretation of this Agreement or the enforcement of any and all
rights, duties, liabilities, obligations, powers, and other relations between
the parties arising under this Agreement.
7. ENTIRE AGREEMENT; AMENDMENT. This Agreement contains the entire
agreement of the parties with respect to the subject matter hereof; all previous
agreements and discussions relating to the same or similar subject matter being
merged herein. The parties acknowledge and agree that neither of them has made
any representation with respect to the subject matter of this Agreement or any
representations inducing the execution and delivery hereof except as
specifically set forth herein. Each of the parties hereto acknowledges that it
has relied on its own judgment in entering into this Agreement. This Agreement
may not be changed, amended, modified, terminated or waived including
specifically the provisions of this SECTION 7 except by a writing signed by both
parties hereto. Neither this Agreement nor the provisions of this SECTION 7 may
be changed, amended, modified, terminated or waived as a result off any failure
to enforce any provision or the waiver of any specific breach or breaches
thereof or any course of conduct of the parties.
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8. SEVERABILITY. In the case any one or more of the provisions
contained in this Agreement shall for any reason to be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement and such
invalid, illegal and unenforceable provision shall be reformed and construed so
that it will be valid, legal, and enforceable to the maximum extent permitted by
law.
9. NOTICES, ETC. All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed effectively given
upon delivery to the party to be notified in person or by courier service or
five days after deposit with the United States mail, by registered or certified
mail, postage prepaid, addressed to the party at the address set forth on the
signature page hereof or at such other address as the party may request by
notifying the other party in writing.
10. DELAYS OR OMISSIONS. Any party's failure to enforce any provision
or provisions of this Agreement shall not in any way be construed as a waiver of
any such provision or provisions, nor prevent that party thereafter from
enforcing each and every other provision of this Agreement. The rights granted
all parties herein are cumulative and shall not constitute a waiver of either
party's right to assert all other legal remedies available to it under the
circumstances.
11. INTENT. Each party agrees to execute upon request any further
documents or instruments reasonably necessary to carry out the purposes or
intent of this Agreement.
12. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which may be executed by less than all parties hereto,
each of which shall be enforceable against the parties actually executing such
counterparts, and all of which together shall constitute one instrument.
13. SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, the
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties and their
transferees, if any. Nothing in this Agreement, express or implied, is intended
to confer upon any party other than the parties hereto or their respective
successors and assigns any rights, remedies, obligations, or liabilities under
or by reason of this Agreement, except as expressly provided in this Agreement.
Notwithstanding the foregoing, the Preemptive Right and Catch-Up Right set forth
herein are nonassignable, except that (i) such rights are assignable by the
Purchaser to any wholly owned subsidiary or parent of, or to any corporation,
entity or other person that is, within the meaning of the 1933 Act, controlling,
controlled by or under common control with, the Purchaser, and (ii) such rights
are assignable in connection with any transfer of Series A Convertible Preferred
Stock by the Purchaser.
14. TERMINATION. Unless earlier terminated by mutual agreement of the
parties, this Agreement will terminate as of the earliest to occur of the
following: (i) upon the termination of the Purchaser's Preemptive Rights and
Catch-Up Rights in accordance with SECTIONS 3.6 AND 4.7 ABOVE, respectively;
(ii) upon the effective date of the Purchaser's Election to Cancel under the
Purchase Agreement; or (iii) the tenth anniversary of the date hereof. In
addition, and
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notwithstanding the foregoing, this Agreement shall terminate upon conversion of
the Preferred Shares.
15. SEPARATE COUNSEL. By signing this Agreement, the parties hereto
acknowledge that they have been advised and had the opportunity to obtain legal
counsel and advice regarding this Agreement and that they have read and
understand this Agreement.
IN WITNESS WHEREOF, the parties have executed this Shareholder's
Agreement under seal as of the day and year first set forth above.
COMPANY:
PHOTONIC SENSOR SYSTEMS, INC.
By: (SEAL)
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
Address: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
PURCHASER:
GENOMIC SOLUTIONS INC.
By: (SEAL)
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President and
General Counsel
Address: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇
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EXHIBIT A
PHOTONIC SENSOR SYSTEMS, INC.
EXERCISE AGREEMENT
This Exercise Agreement is made this day of , by GENOMIC
SOLUTIONS INC., a Delaware corporation ("Purchaser").
Purchaser hereby agrees as follows:
1. PURCHASE OF SHARES. On this date and subject to the terms and
conditions of this Exercise Agreement, Purchaser hereby exercises the Catch-Up
Right granted to Purchaser pursuant to the Shareholder's Agreement (the
SHAREHOLDER'S AGREEMENT"), dated as of , 2001, between the Company
and Purchaser, with respect to the purchase of ( )
shares of Common Stock of the Company (the "CATCH-UP SHARES") at an aggregate
price per share of Dollars ($ ). Purchaser
herewith delivers to the Company the aggregate purchase price for the number of
Catch-Up Shares purchased.
2. RESTRICTIONS. Purchaser acknowledges that the purchase of the
Catch-Up Shares is subject to the conditions set forth in the Shareholder's
Agreement and that the Catch-Up Shares shall be subject to the restrictions on
transfer set forth in that certain Registration Rights Agreement between the
Company and Purchaser, dated as of , 2001.
3. ENTIRE AGREEMENT. The Shareholder's Agreement is incorporated herein
by reference. This Exercise Agreement and the Shareholder's Agreement and
Registration Rights Agreement constitute the entire agreement of the parties and
supersede in their entirety all prior undertakings and agreements of the Company
and Purchaser with respect to the subject matter hereof, and are governed by
Georgia law except for that body of law pertaining to conflict of laws.
Submitted by: Accepted by:
GENOMIC SOLUTIONS INC. PHOTONIC SENSOR SYSTEMS, INC.
By: By:
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Title: Title:
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Address:
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