1
STOCKHOLDER AGREEMENT, dated as of May 13, 1998 (this "Agreement"), among
FILTRONIC PLC, a public limited company incorporated under the laws of England
and Wales ("Parent"), FIL ACQUISITION CORP., a Massachusetts corporation and a
wholly owned subsidiary of Parent ("Merger Sub"), and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ (the
"Stockholder").
WHEREAS, Parent, Merger Sub and Sage Laboratories, Inc., a
Massachusetts corporation (the "Company"), propose to enter into an Agreement
and Plan of Merger dated as of the date hereof (as the same may be amended or
supplemented, the "Merger Agreement") providing for (i) the making of the Offer
(as defined in the Merger Agreement) by Parent or Merger Sub for all the
outstanding shares of common stock, par value $.10 per share, of the Company
("Company Common Stock") and (ii) the merger of Merger Sub and the Company (the
"Merger");
WHEREAS, the Stockholder is the record and beneficial owner of
254,180 shares of Company Common Stock; such shares of Company Common Stock, as
such shares may be adjusted by stock dividend, stock split, recapitalization,
combination or exchange of shares, merger, consolidation, reorganization or
other change or transaction of or by the Company, together with shares of
Company Common Stock that may be acquired after the date hereof by the
Stockholder, including shares of Company Common Stock issuable upon the exercise
of options or warrants to purchase Company Common Stock (as the same may be
adjusted as aforesaid), and such options to purchase shares of Company Common
Stock being collectively referred to herein as the "Shares"; and
WHEREAS, as a condition to their willingness to enter into the
Merger Agreement, Parent and Merger Sub have requested that the Stockholder
enter into this Agreement.
NOW, THEREFORE, to induce Parent and Merger Sub to enter into, and
in consideration of their entering into, the Merger Agreement, and in
consideration of the premises and the representations, warranties and agreements
contained herein, the parties agree as follows:
1. AGREEMENT
(a) Purchase and Sale of Shares.
Parent or Merger Sub hereby agrees to purchase, and the Stockholder hereby
agrees to sell, all of the Stockholder's Shares at a price per Share of $17.50,
subject only to the condition that Merger Sub shall have accepted for payment
and paid for shares of Company Common Stock pursuant to the Offer (the
"Purchase"). The closing of the Purchase shall be effected by the Stockholder
delivering all of its Shares, and by Parent or Merger Sub paying for such Shares
at the time of the consummation of the Offer. Parent agrees to make available to
Merger Sub the funds required to effect the Purchase.
1
2
(b) Break-Up Fee. In the event the Merger Agreement is
terminated under circumstances entitling Parent to a termination fee pursuant to
Section 12.4(b) of the Merger Agreement, the Stockholder shall pay to Merger Sub
an amount equal to (i) the cash consideration and Fair Market Value (as defined
below) of any non-cash consideration received by the Stockholder in exchange for
the Stockholder's Shares upon consummation within twelve (12) months of the date
of termination of the Merger Agreement, or pursuant to an agreement entered into
within twelve (12) months of the date of termination of the Merger Agreement, of
an Acquisition Proposal (as defined in the Merger Agreement) with a third party
that was announced or commenced subsequent to the date hereof and on or prior to
the date of termination of the Merger Agreement, less the sum of (i) the amount
equal to the price per share of the Offer made by the Merger Sub multiplied by
the number of Stockholder's Shares and (ii) the amount paid to Merger Sub
pursuant to Section 12.4(b) of the Merger Agreement multiplied by a fraction the
numerator of which is the number of Stockholder's Shares, and the denominator of
which is the total number of Shares of the Company Common Stock subject to a
Stockholder Agreement (as defined in the Merger Agreement); provided, that such
amount shall be payable only if such amount calculated pursuant to this
paragraph is greater than zero.
"Fair Market Value" shall mean (i) in respect of any securities upon the
date such consideration is received by the Stockholder, the last sale price on
such day on the principal stock exchange (including the Nasdaq National Market)
on which such securities are then listed or admitted to trading, (ii) if no sale
takes place on such day on any such exchange, the average of the last reported
closing bid and asked prices on such day as officially quoted on any such
exchange, (iii) if the securities are not then listed or admitted to trading on
any stock exchange, the average of the last reported closing bid and asked
prices on such day in the over-the-counter market, as furnished by the National
Association of Securities Dealers Automatic Quotation System, the National
Quotation Bureau, Inc. or other similar firm then engaged in such business, (iv)
if there is no such firm, as furnished by any member of the National Association
of Securities Dealers, Inc., or any successor corporation thereto, selected by
Merger Sub and reasonably satisfactory to the Stockholder, or (v) if no such
quotation is available or the consideration paid is other than cash or
securities, then Fair Market Value shall be determined by a nationally
recognized investment banking or accounting firm selected by Parent or Merger
Sub and reasonably satisfactory to the Stockholder that does not have, or has
not within two years had, an indirect or direct material financial interest in
or pecuniary relationship with Parent, Merger Sub or Stockholder (other than
fees and expenses to be paid in respect of such appraisal). The fees and
expenses of such investment banking or accounting firm shall be borne by Parent.
2. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER. The
Stockholder hereby represents and warrants to Parent and Merger Sub as follows:
(a) Authority. The Stockholder has all requisite power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by the Stockholder. This Agreement has been duly executed
and delivered by the Stockholder and, assuming this
2
3
Agreement constitutes a valid and binding obligation of Parent and Merger Sub,
constitutes a valid and binding obligation of the Stockholder enforceable
against the Stockholder in accordance with its terms (except insofar as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally, or by principles governing the availability of equitable remedies).
Except for the informational filings with the Securities and Exchange Commission
and any consents, approval, clearances or authorizations identified in the
Merger Agreement, neither the execution, delivery or performance of this
Agreement by the Stockholder nor the consummation by the Stockholder of the
transactions contemplated hereby will require any filing with, or permit,
authorization, consent or approval of, any Federal, state or local government or
any court, tribunal, administrative agency or commission or other domestic
governmental or regulatory authority or agency (a "Governmental Entity").
(b) Conflicting Instruments; No Transfer. Neither the
execution, delivery or performance of this Agreement by the Stockholder nor the
consummation by the Stockholder of the transactions contemplated hereby will
result in a violation or breach of, or constitute (with or without due notice or
lapse of time or both) a default under, be in conflict with, or give rise to any
right of termination, amendment, cancellation or acceleration under, or result
in the creation of any pledge, claim, lien, charge, encumbrance or security
interest of any kind or nature whatsoever (a "Lien") upon any of the properties
or assets of the Stockholder under, any of the terms, conditions or provisions
of any contract, agreement or other instrument, or any judgment, injunction,
order, decree, law, regulation or arrangement to which the Stockholder is a
party or by which the Stockholder or any of the Stockholder's properties or
assets, including the Stockholder's Shares, may be bound, except for any breach,
violation, conflict, default, conflict or Lien which, individually or in the
aggregate, would not impair or affect the Stockholder's ability to sell, or to
deliver his proxy for, the Shares according to the terms of this Agreement and
to approve the Merger Agreement and the transactions contemplated thereby.
(c) The Shares. The Stockholder's Shares and the certificates
representing the Shares are now, and at all times during the term hereof will
be, held by the Stockholder, or by a nominee or custodian for the benefit of the
Stockholder, and the Stockholder has good and valid title to the Shares and will
deliver the Shares, free and clear of any Liens, proxies, voting trusts or
agreements, understandings or arrangements, except for any such Liens or proxies
arising hereunder. Except as set forth in the Company's SEC Documents (as
defined in the Merger Agreement), the Stockholder owns of record or beneficially
no shares of Company Common Stock other than the Stockholder's Shares.
(d) Brokers. Except as disclosed in the Merger Agreement, no
broker, investment banker, financial advisor or other person is entitled to any
broker's, finder's, financial advisor's or other similar fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Stockholder.
3
4
(e) Merger Agreement. The Stockholder understands and
acknowledges that Parent is entering into, and causing Merger Sub to enter into,
the Merger Agreement in reliance upon the Stockholder's execution and delivery
of this Agreement.
3. REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB. Parent
and Merger Sub hereby jointly and severally represent and warrant to the
Stockholder as follows:
(a) Authority. Parent and Merger Sub have the requisite
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution, delivery and
performance of this Agreement by Parent and Merger Sub and the consummation of
the transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Parent and Merger Sub. This Agreement has been
duly executed and delivered by Parent and Merger Sub and, assuming this
Agreement constitutes a valid and binding obligation of the Stockholder,
constitutes a valid and binding obligation of Parent and Merger Sub enforceable
in accordance with its terms (except insofar as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally, or by principles governing the
availability of equitable remedies).
(b) Securities Act. The Shares will be acquired in compliance
with, and neither Parent nor Merger Sub will offer to sell or otherwise dispose
of any Shares so acquired by it in violation of the registration requirements
of, the Securities Act of 1933, as amended.
4. COVENANTS OF THE STOCKHOLDER. The Stockholder agrees as follows:
(a) The Stockholder shall not, except as contemplated by the
terms of this Agreement, (i) sell, transfer, pledge, assign or otherwise dispose
of, or enter into any contract, option or other arrangement (including any
profit sharing arrangement) or understanding with respect to the sale, transfer,
pledge, assignment or other disposition of, the Shares (including any options or
warrants to purchase Company Common Stock) to any person other than Parent,
Merger Sub or Merger Sub's designee, (ii) enter into any voting arrangement,
whether by proxy, voting agreement, voting trust, power-of-attorney or
otherwise, with respect to the Shares or (iii) take any other action that would
in any way restrict, limit or interfere with the performance of its obligations
hereunder or the transactions contemplated hereby.
(b) Other than pursuant to a fiduciary duty as a director or
officer of the Company and as permitted in Sections 7.2 and 9.5 of the Merger
Agreement, until the Merger is consummated or the Merger Agreement is
terminated, the Stockholder shall not, nor shall the Stockholder permit any
investment banker, financial adviser, attorney, accountant or other
representative or agent of the Stockholder to, directly or indirectly (i)
solicit, initiate or encourage (including by way of furnishing nonpublic
information), or take any other action designed or reasonably likely to
facilitate, any inquiries or the making of any proposal which constitutes any
Acquisition Proposal (as defined in the Merger Agreement) or (ii) participate in
4
5
any discussions or negotiations regarding any Acquisition Proposal. Without
limiting the foregoing, it is understood that any violation of the restrictions
set forth in the preceding sentence by an investment banker, financial advisor,
attorney, accountant or other representative or agent of the Stockholder shall
be deemed to be a violation of this Section 4(b) by the Stockholder.
(c) At any meeting of stockholders of the Company called to
vote upon the Merger and the Merger Agreement or at any adjournment thereof or
in any other circumstances upon which a vote, consent or other approval
(including by written consent) with respect to the Merger and the Merger
Agreement is sought, the Stockholder shall, including by executing a written
consent if requested by Parent, vote (or cause to be voted) the Stockholder's
Shares in favor of the Merger, the adoption by the Company of the Merger
Agreement and the approval of the other transactions contemplated by the Merger
Agreement. At any meeting of Stockholders of the Company or at any adjournment
thereof or in any other circumstances upon which the Stockholder's vote, consent
or other approval is sought, the Stockholder shall vote (or cause to be voted)
the Stockholder's Shares against (i) any action or agreement that would result
in a breach in any material respect of any covenant, representation or warranty
or any other obligation or agreement of the Company under the Merger Agreement
or of the Stockholder hereunder, (ii) any action or agreement that would impede,
interfere with, delay, postpone or attempt to discourage the Merger, including,
but not limited to: (A) any Acquisition Proposal, (B) any amendment of the
Company's articles of organization or by-laws or other proposal or transaction
involving the Company or any of its subsidiaries, which amendment or other
proposal or transaction would in any manner impede, frustrate, prevent or
nullify the Merger, the Merger Agreement or any of the other transactions
contemplated by the Merger Agreement or change in any manner the voting rights
of any class of the Company's capital stock; (C) any change in the management or
board of directors of the Company; (D) any material change in the present
capitalization or dividend policy of the Company; and (E) any other material
change in the Company's corporate structure or business (collectively,
"Frustrating Transactions"). The Stockholder further agrees not to commit or
agree to take any action inconsistent with the foregoing.
5. GRANT OF IRREVOCABLE PROXY; APPOINTMENT OF PROXY. (a) The
Stockholder hereby irrevocably grants to, and appoints, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
and ▇▇▇▇ ▇▇▇▇▇▇, and any other individual who shall hereafter be designated by
Parent, and each of them, the Stockholder's proxy and attorney-in-fact (with
full power of substitution), for and in the name, place and stead of the
Stockholder, to vote the Stockholder's Shares, or grant a consent or approval in
respect of the Shares, at any meeting of Stockholders of the Company or at any
adjournment thereof or in any other circumstances upon which their vote, consent
or other approval is sought, in favor of the Merger, the adoption by the Company
of the Merger Agreement and the approval of the other transactions contemplated
by the Merger Agreement and against any Acquisition Proposal or Frustrating
Transaction, and for no other purpose.
(b) The Stockholder represents that any proxies heretofore given in
respect of the Stockholder's Shares are not irrevocable, and that any such
proxies are hereby revoked.
5
6
(c) The Stockholder hereby affirms that the irrevocable proxy set
forth in this Section 5 is given in connection with the execution of the Merger
Agreement, and that such irrevocable proxy is given to secure the performance of
the duties of the Stockholder under this Agreement. The Stockholder hereby
further affirms that the irrevocable proxy is coupled with an interest and may
under no circumstances be revoked, subject to Section 8. The Stockholder hereby
ratifies and confirms all that such irrevocable proxy may lawfully do or cause
to be done by virtue hereof.
6. FURTHER ASSURANCES. The Stockholder will, from time to time,
execute and deliver, or cause to be executed and delivered, such additional or
further transfers, assignments, endorsements, consents and other instruments as
Parent or Merger Sub may reasonably request for the purpose of effectively
carrying out the transactions contemplated by this Agreement and to vest the
power to vote the Stockholder's Shares as contemplated by Section 5. Parent and
Merger Sub jointly and severally agree to use reasonable efforts to take, or
cause to be taken, all actions necessary to comply promptly with all legal
requirements that may be imposed with respect to the transactions contemplated
by this Agreement.
7. ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
without the prior written consent of the other parties, except that Merger Sub
may assign, in its sole discretion, any or all of its rights, interests and
obligations hereunder to Parent or to any direct or indirect wholly owned
subsidiary of Parent. Subject to the preceding sentence, this Agreement will be
binding upon, inure to the benefit of and be enforceable by the parties and
their respective successors and assigns. The Stockholder agrees that this
Agreement and the obligations of the Stockholder hereunder shall attach to the
Stockholder's Shares and shall be binding upon any person or entity to which
legal or beneficial ownership of the Shares shall pass, whether by operation of
law or otherwise, including without limitation the Stockholder's heirs,
guardians, trustees, administrators or successors.
8. TERMINATION. This Agreement, and all rights and obligations of
the parties hereunder, shall terminate upon the earlier of the date upon which
the Merger Agreement is terminated pursuant to Section 11.1, the date that
Merger Sub shall have purchased and paid for all the Stockholders' Shares in the
Offer or pursuant to Section 1 and the date upon which the Offer is terminated.
Notwithstanding the foregoing, this sentence and Sections 1(b), 2, 6, 10, 11, 12
and 13 shall survive any termination of this Agreement
9. STOP TRANSFER. The Company agrees with, and covenants to, Parent
and Merger Sub that the Company shall not register the transfer of any
certificate representing the Stockholder's Shares unless such transfer is made
in accordance with the terms of this Agreement.
6
7
10. GENERAL PROVISIONS. (a) Payments. All payments required to be
made to any party to this Agreement shall be made by wire transfer of
immediately available funds to an account designated by such party at least one
trading day prior to such payment.
(b) Expenses. Except as expressly set forth herein, all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses.
(c) Amendments. This Agreement may not be amended except by an
instrument in writing signed by each of the parties hereto.
(d) Notice. All notices and other communications hereunder shall be
in writing and shall be deemed given if delivered personally, telecopied (which
is confirmed), sent by overnight courier (providing proof of delivery) or mailed
by registered or certified mail (return receipt requested) to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
(i) if to Parent, to
Filtronic plc
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇▇▇▇▇, Esq.
▇▇▇▇, Scholer, Fierman, ▇▇▇▇ & Handler, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
and
(ii) if to Stockholder, to:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
c/o Sage Laboratories, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ Natick Industrial Park
Natick, MA 01760
7
8
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ & Dodge LLP
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
(e) Interpretation. When a reference is made in this Agreement to a
Section, such reference shall be to a Section of this Agreement unless otherwise
indicated. The headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Wherever the words "include", "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation".
(f) Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when two or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
(g) Entire Agreement; No Third-Party Beneficiaries. This Agreement
and the Merger Agreement (including the documents and instruments referred to
herein and therein) (i) constitute the entire agreement and supersede all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof and (ii) are not intended to confer upon
any person other than the parties hereto any rights or remedies hereunder.
(h) Publicity. Except as otherwise required by law or as
contemplated or provided in the Merger Agreement, for so long as this Agreement
is in effect, none of the Stockholder, Merger Sub or Parent shall, nor shall
Parent or Merger Sub permit any of its subsidiaries to, issue or cause the
publication of any press release or other public announcement with respect to
the transactions contemplated by this Agreement or the Merger Agreement without
the consent of the other parties.
11. STOCKHOLDER CAPACITY. No person executing this Agreement who is
or becomes during the term hereof a director or officer of the Company makes any
agreement or understanding herein in his or her capacity as such director or
officer. The Stockholder signs solely in his or her capacity as the record
holder and beneficial owner of, or the trustee of a trust whose beneficiaries
are the beneficial owners of, the Stockholder's Shares and nothing herein shall
limit or affect any actions taken by the Stockholder in its capacity as an
officer or director of the Company to the extent specifically permitted by the
Merger Agreement or required by applicable law.
8
9
12. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS. (a)
This Agreement shall be construed in accordance with and governed by the law of
the Commonwealth of Massachusetts without regard to any applicable conflicts of
law principles.
(b) Each party to this Agreement hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement in
any Massachusetts court, or any Federal court sitting in the Massachusetts
District. Each party hereby irrevocably waives, to the fullest extent permitted
by law, the defense of an inconvenient forum to the maintenance of such suit,
action or proceeding in any such court and further waives the right to object,
with respect to such suit, action or proceeding, that such court does not have
jurisdiction over such party.
13. PERFORMANCE BY MERGER SUB. Parent covenants and agrees for the
benefit of the Stockholder that it shall cause Merger Sub to perform in full
each obligation of Merger Sub set forth in this Agreement.
14. ENFORCEMENT. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with its specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement, without any bond or other security
being rendered, in any court of the United States located in the Commonwealth of
Massachusetts or any Massachusetts court, this being in addition to any other
remedy to which they are entitled at law or in equity. In addition, each of the
parties hereto waives any right to trial by jury with respect to any claim or
proceeding related to or arising out of this Agreement or any of the
transactions contemplated hereby.
IN WITNESS WHEREOF, each of Parent and Merger Sub has caused this
Agreement to be signed by its officer thereunto duly authorized and the
Stockholder has signed this Agreement, all as of the date first written above.
FILTRONIC PLC
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Company Secretary and Solicitor
9
10
FIL ACQUISITION CORP.
By: /s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------
Name: Professor J. ▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Clerk
STOCKHOLDER:
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
ACKNOWLEDGED AND AGREED TO AS TO SECTION 9 AS OF THE DATE FIRST WRITTEN ABOVE:
SAGE LABORATORIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President, Research and Development
10