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Exhibit 1.1
PURCHASE AGREEMENT
This Agreement is made as of this __ day of April, 2000 between
Safeguard Scientifics, Inc., a Pennsylvania corporation ("Safeguard"), and each
of the entities listed in Schedule I hereto (each a "Purchaser" and
collectively, the "Purchasers), with reference to the following Recitals:
A. On the terms and conditions set forth herein,
Safeguard proposes to sell to each Purchaser the number of shares (the
"Purchased Shares") of Common Stock of Safeguard, par value $0.10 per
share (the "Common Stock") set forth opposite such Purchaser's name on
Schedule I at the price per Purchased Share set forth on Schedule I
("Per Share Purchase Price") and the Purchasers each desire to purchase
such Purchased Shares.
B. Safeguard has filed with the Securities and Exchange
Commission (the "SEC") the Registration Statement (hereinafter defined)
covering the registration of the offer and sale of the Purchased Shares
under the Securities Act of 1933, as amended (the "Securities Act").
Such Registration Statement became effective on April __, 2000 (the
"Effective Date").
C. Capitalized terms used herein shall have the meaning
ascribed thereto in Annex A.
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants, agreements and conditions set forth below, the parties
hereto, intending to be legally bound, hereby agree as follows:
ARTICLE I
PURCHASE AND SALE OF PURCHASED SHARES
SECTION 1.1 PURCHASE AND SALE OF PURCHASED SHARES. Subject to the
terms and conditions hereinafter set forth, at the Closing (hereinafter
defined), Safeguard shall sell to each Purchaser, severally and not jointly, and
each Purchaser shall purchase, severally and not jointly, from Safeguard the
number of Purchased Shares set forth in Schedule I opposite the name of such
Purchaser for the Per Share Purchase Price multiplied by the number of Purchased
Shares being purchased by such Purchaser. The number of Purchased Shares and the
Per Share Purchase Price shall be adjusted appropriately to reflect all stock
dividends, splits, combinations and similar transactions which affect the Common
Stock with a record date after the date hereof but prior to the Closing Date
(for the avoidance of doubt, the number of Purchased Shares and the Per Share
Purchase Price shall not be so adjusted with respect to the three for one stock
split effected in the form of a stock dividend to holders of shares of Common
Stock of record on March 13, 2000, which has already been reflected in the
Purchased Shares and Per Share Purchase Price set forth in Schedule I). This
Purchase Agreement may be one of a series of purchase agreements
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between Safeguard and a limited number of strategic investors under which
Safeguard may agree to sell during the period ending on April 28, 2000,
additional shares of Common Stock at a price based upon the closing price
per share of the Common Stock on the New York Stock Exchange on the
date of execution of such purchase agreement.
SECTION 1.2 CLOSING.
(a) Subject to the provisions of this Agreement, the
parties shall hold a closing (the "Closing") on the second business day after
the date hereof (such date, the "Closing Date"), at 9:00 A.M. at the offices of
▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, Pennsylvania,
or at such other time or place as the Purchasers and Safeguard may agree, but in
no case later than 15 business days following the Effective Date.
(b) The failure of any Purchaser to perform its
obligations hereunder and complete the purchase of the Purchased Shares of such
Purchaser shall not affect the obligations of any other Purchaser hereunder.
SECTION 1.3 DELIVERIES.
(a) At the Closing, Safeguard shall deliver, or shall
irrevocably instruct its transfer agent to deliver, to each Purchaser a
certificate or certificates for the Purchased Shares being purchased by such
Purchaser, which shall be validly issued, fully paid, nonassessable and free
and clear of all Liens, registered in the name of such Purchaser, and bearing
the legend described in Section 3.7 hereof, against payment by such Purchaser,
by wire transfer of immediately available funds to such bank account as
Safeguard shall designate, of an amount equal to the Per Share Purchase Price
multiplied by the number of Purchased Shares being purchased by such Purchaser.
(b) At the Closing, Safeguard shall also deliver to each
Purchaser, and each Purchaser shall deliver to Safeguard, as applicable, the
certificates and opinion referred to in Sections 5.2 and 5.3 hereof.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF
SAFEGUARD
Safeguard represents and warrants to the Purchasers the following:
SECTION 2.1 ORGANIZATION AND POWERS. Safeguard is a corporation
duly incorporated, validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania. Safeguard has all requisite corporate power and
authority to carry on its business as it has been and is now and as is currently
contemplated to be conducted and to own, lease and operate the properties and
assets used in connection therewith.
SECTION 2.2 AUTHORITY; BINDING EFFECT. Safeguard has all
requisite corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. All necessary action,
corporate or otherwise, required to have been taken by or on behalf of Safeguard
by Applicable Law, the amended and
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restated Articles of Incorporation and Bylaws of Safeguard (the "Safeguard
Charter Documents") or otherwise to authorize (a) the approval, execution and
delivery on its behalf of this Agreement and (b) its performance of its
obligations under this Agreement and the consummation of the transactions
contemplated hereby, has been taken. This Agreement constitutes the valid and
binding agreement of Safeguard, enforceable against Safeguard in accordance with
its terms, except (y) as the same may be limited by applicable bankruptcy,
insolvency, moratorium or similar laws of general application relating to or
affecting creditors' rights, including, without limitation, the effect of
statutory or other laws regarding fraudulent conveyances and preferential
transfers, and (z) for the limitations imposed by general principles of equity.
SECTION 2.3 NO CONFLICT; APPROVALS. The execution and delivery of
this Agreement do not, and the consummation of the transactions contemplated
hereby will not, (a) violate or conflict with the Safeguard Charter Documents or
any Court Order (b) result in a Default under any material Contract to which
Safeguard or any of its Subsidiaries is a party or by which it is bound, or (c)
subject to the consents, approvals, orders, authorizations, filings,
declarations and registrations referred to in Section 2.4 hereof or the
Registration Statement, and the approval by the New York Stock Exchange ("NYSE")
of the listing of the Purchased Shares, conflict with or result in a Default of
any License or any Applicable Law, except, in the case of clauses (b) and (c),
for any such Defaults or Liens which would not have a Safeguard Material Adverse
Effect and do not impair the ability of Safeguard to perform its obligations
under this Agreement or prevent or delay the consummation of any of the
transactions contemplated hereby.
SECTION 2.4 GOVERNMENTAL CONSENTS AND APPROVALS. Based in part
upon the representations and warranties of the Purchasers contained herein,
neither the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will require any notification to or License
from any Governmental Authority, except where the failure to obtain such
Licenses or to make such filings or notifications, would not prevent it from
performing its obligations under this Agreement and would not have a Safeguard
Material Adverse Effect.
SECTION 2.5 ISSUANCE OF SHARES. The issuance and sale of the
Purchased Shares have been duly authorized and, upon the issuance of such shares
in accordance with the provisions of this Agreement, such shares will be validly
issued and outstanding, fully paid and nonassessable shares of Common Stock,
free of preemptive or similar rights.
SECTION 2.6 REGISTRATION RIGHTS. Safeguard is not under any
obligation to register any of its securities under the Securities Act except (i)
as provided in this Agreement, (ii) as provided in the Transaction Agreement,
dated February 28, 2000 between Safeguard and Textron Inc., or (iii) pursuant
to the Registration Rights Agreement, dated June 3, 1999, between Safeguard
and Credit Suisse First Boston Corporation (the "1999 Notes Agreement").
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SECTION 2.7 The Registration Statement.
(a) The Registration Statement has become effective and no
stop order suspending the effectiveness of the Registration Statement has been
issued under the Securities Act nor, to the knowledge of Safeguard, have any
proceedings therefor been initiated or threatened by the Commission.
(b) The Registration Statement does not contain, as of the
Effective Date, any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
Registration Statement as of the date hereof omits the information contained
herein with respect to the number of Purchased Shares and Per Share Purchase
Price.
SECTION 2.8 Absence of Certain Changes; Liabilities.
(a) Except as disclosed in the Registration Statement, since
December 31, 1999, Safeguard and its Subsidiaries have not been subject to, and
have no knowledge of, any events or conditions of any character that would have
a Safeguard Material Adverse Effect or impair the ability of Safeguard to
perform its obligations under this Agreement or prevent or delay the
consummation of any of the transactions contemplated hereby.
(b) Except as disclosed in the Registration Statement, neither
Safeguard nor any of its subsidiaries had at December 31, 1999 or has incurred
since that date, any liabilities or obligations (whether absolute, accrued,
contingent or otherwise) of any nature, except (a) liabilities, obligations or
contingencies , (i) which are accrued or reserved against in the audited
consolidated financial statement of Safeguard for the year ended and as at
December 31, 1999 or reflected in the notes thereto or (ii) which were incurred
after December 31, 1999 in the ordinary course of business and consistent with
past practices, (b) liabilities, obligations or contingencies which (i) would
not reasonably be expected, individually or in the aggregate, to have a
Safeguard Material Adverse Effect, or (ii) have been discharged or paid in full
prior to the date hereof in the ordinary course of business, and (c)
liabilities, obligations and contingencies which are of a nature not required to
be reflected in the consolidated financial statements of Safeguard and its
Subsidiaries prepared in accordance with generally accepted accounting
principles consistently applied.
SECTION 2.9 ABSENCE OF LITIGATION; CLAIMS. There are no claims,
actions, suits, proceedings or investigations pending or, to the knowledge of
Safeguard, threatened against Safeguard or any of its Subsidiaries, or any
properties or rights of Safeguard or any of its Subsidiaries, before any
Governmental Authority or arbitrator, which are reasonably expected to have a
Safeguard Material Adverse Effect or impair the ability of Safeguard to perform
its obligations under this Agreement or prevent or delay the consummation of any
of the transactions contemplated hereby, nor is there any Court Order or
judgment, decree,
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injunction, ruling or order of any arbitrator outstanding against Safeguard or
any of its Subsidiaries having or which, insofar as reasonably can be foreseen,
in the future would have a Safeguard Material Adverse Effect.
SECTION 2.10 CAPITALIZATION. As of the date hereof, the authorized
and outstanding shares of capital stock of Safeguard is as shown in the
Registration Statement. All outstanding shares of capital stock of Safeguard are
duly authorized and have been validly issued and are fully paid, nonassessable
and free of any liens or encumbrances other than any liens or encumbrances
created by or imposed upon the holders thereof. There are as of the date hereof
no outstanding obligations of Safeguard to issue or deliver or to repurchase,
redeem or otherwise acquire any Safeguard securities.
SECTION 2.11 BROKERS AND FINDERS. Neither Safeguard nor any of its
respective officers, directors or employees has employed any broker or finder or
incurred any liability for any brokerage fees, commissions or finder's fees in
connection with the transactions contemplated hereby.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
THE PURCHASERS
Each Purchaser, severally and not jointly, represents and warrants to
Safeguard the following:
SECTION 3.1 ORGANIZATION AND POWERS. Such Purchaser is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation.
SECTION 3.2 AUTHORITY; BINDING EFFECT. Such Purchaser has all
requisite corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. All necessary action,
corporate or otherwise, required to have been taken by or on behalf of such
Purchaser by Applicable Law, the Certificate or Articles of Incorporation and
Bylaws or comparable governing documents of each Purchaser (the "Purchaser's
Charter Documents") or otherwise to authorize (a) the approval, execution and
delivery on its behalf of this Agreement, and (b) its performance of its
obligations under this Agreement and the consummation of the transactions
contemplated hereby, has been taken. This Agreement constitutes the valid and
binding agreement of such Purchaser, enforceable against such Purchaser in
accordance with its terms, except (y) as the same may be limited by applicable
bankruptcy, insolvency, moratorium or similar laws of general application
relating to or affecting creditors' rights, including, without limitation, the
effect of statutory or other laws regarding fraudulent conveyances and
preferential transfers, and (z) for the limitations imposed by general
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principles of equity.
SECTION 3.3 NO CONFLICT; APPROVALS. The execution and delivery of
this Agreement do not, and the consummation of the transactions contemplated
hereby will not, (a) violate or conflict with such Purchaser's Charter
Documents, (b) result in a Default under any material Contract to which such
Purchaser or any of such Purchaser's Subsidiaries is a party or by which it is
bound, or (c) subject to the consents, approvals, orders, authorizations,
filings, declarations and registrations specified in Section 3.4, conflict with
or result in a Default of any License or any Applicable Law, except, in the case
of clauses (b) and (c), for any such Default or Liens which would not impair the
ability of such Purchaser to perform such Purchaser's obligations under this
Agreement or prevent or delay the consummation of any of the transactions
contemplated hereby.
SECTION 3.4 GOVERNMENTAL CONSENTS AND APPROVALS. Neither the
execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will require any notification to or License
from any Governmental Authority, except where the failure to obtain such
Licenses or to make such filings or notifications, would not prevent it from
performing its obligations under this Agreement.
SECTION 3.5 BROKERS AND FINDERS. Neither such Purchaser nor any
of its respective officers, directors or employees has employed any broker or
finder or incurred any liability for any brokerage fees, commissions or finder's
fees in connection with the transactions contemplated hereby, which in either
case would require a payment by Safeguard.
SECTION 3.6 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇. Such Purchaser hereby warrants,
represents and covenants that based on the requirements and standards set forth
in the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended (the
"HSR Act") and the regulations promulgated by the Federal Trade Commission
thereunder at 16 C.F.R. Parts ▇▇▇-▇▇▇ (▇▇▇ "▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇"), such Purchaser's
acquisition of Purchased Shares is made solely for the purpose of investment,
and pursuant to 16 C.F.R. Section 801.1(i)(1), such Purchaser has no intention
of participating in the formulation, determination, or direction of the basic
business decisions of Safeguard. Capitalized terms used in this paragraph but
not defined in this Agreement shall have the meanings assigned to them in the
HSR Act and the HSR Regulations. Such Purchaser hereby agrees to indemnify and
hold harmless Safeguard from any claim, proceeding, fine, penalty or other
liability, and from all related expenses (including attorney's fees), which it
may incur by reason of its reliance on any of such Purchaser's warranties,
representations, and covenants contained in this Section 3.7.
SECTION 3.7 RESTRICTIVE LEGEND. Such Purchaser hereby
acknowledges and agrees that certificates representing the Purchased Shares may
bear the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN VOTING AND TRANSFER RESTRICTIONS SET FORTH IN ARTICLE
6 OF A
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PURCHASE AGREEMENT, DATED APRIL __, 2000 BETWEEN THE
ISSUER AND THE ENTITIES LISTED IN SCHEDULE I THERETO.
SECTION 3.8 REGISTRATION STATEMENT. Such Purchaser has received
and reviewed a copy of the Registration Statement.
ARTICLE IV
OTHER AGREEMENTS
SECTION 4.1 REASONABLE BEST EFFORTS. Except as otherwise provided
herein, each of the parties hereto agrees to use its reasonable best efforts to
take, or cause to be taken, all appropriate action, and to do, or cause to be
done, all things necessary, proper or advisable under Applicable Law to
consummate and make effective the transactions contemplated hereby in the most
expeditious manner practicable, including, without limitation, the satisfaction
of all conditions to the obligations of the parties to consummate the Closing as
promptly as practicable, but in no event later than 15 business days after the
Effective Date.
SECTION 4.2 PUBLIC ANNOUNCEMENTS. The parties hereto shall not,
and shall not permit their representatives to, make any public announcements or
otherwise communicate with any news media with respect to this Agreement or any
of the transactions contemplated hereby without prior consultation with the
other parties as to the timing and contents of any such announcement as may be
reasonable under the circumstances; provided, that nothing contained herein
shall prevent any party from promptly making all filings with Governmental
Authorities and all disclosure as may, in its good faith judgment, be required
or advisable in connection with the execution and delivery of this Agreement or
the consummation of the transactions contemplated hereby (in which case the
disclosing party shall advise the other parties and provide them with a copy of
the proposed disclosure or filing prior to making the disclosure or filing).
SECTION 4.3 NOTIFICATION. Each party hereto shall, in the event
of, or promptly after obtaining knowledge of the occurrence or threatened
occurrence of, any fact or circumstance that would cause or constitute a breach
of any of its representations and warranties set forth herein, give notice
thereof to the other parties and shall use its best efforts to prevent or
promptly to remedy such breach.
SECTION 4.4 REGULATORY AND OTHER AUTHORIZATIONS. Each party
hereto agrees to use commercially reasonable efforts to comply with all legal
requirements which may be imposed on such party with respect to the transactions
contemplated hereby and to obtain all consents of Governmental Authorities and
non-governmental third parties that may be or become necessary with respect to
its respective execution and delivery of, and the performance of its respective
obligations pursuant to this Agreement, and each party will
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cooperate fully with the other parties in promptly seeking to obtain all such
consents.
ARTICLE V
CONDITIONS TO CLOSING
SECTION 5.1 CONDITIONS TO THE OBLIGATIONS OF SAFEGUARD AND THE
PURCHASERS. The respective obligations of Safeguard and the Purchasers to
consummate the transactions contemplated hereby are subject to the requirements
that
(a) Effectiveness of Registration Statement. No stop order
suspending the effectiveness of the Registration Statement shall have been
issued under the Securities Act nor shall have any proceedings therefor been
initiated or threatened by the Commission.
(b) Illegality. No action shall have been taken by a
Governmental Authority nor any Applicable Law shall have been enacted, entered,
promulgated or enforced by any Governmental Authority or arbitrator, which is in
effect and has the effect of making the transaction contemplated hereby illegal
or otherwise prohibiting the consummation of the transaction contemplated
hereby.
(c) NYSE Listing. Approval for listing by NYSE upon official
notice of issuance of the Purchased Shares shall have been received by
Safeguard.
SECTION 5.2 CONDITIONS TO THE OBLIGATIONS OF THE PURCHASERS. The
obligations of the Purchasers to consummate the transactions contemplated hereby
are subject to the further requirements that:
(a) Representations and Warranties. The representations and
warranties of Safeguard contained in this Agreement or in any other document
delivered pursuant hereto shall be true and correct in all material respects
(except to the extent that such representations and warranties are qualified by
materiality in which case, to the extent of such qualification, they shall be
true and correct in all respects) on and as of the Closing Date with the same
effect as if made on and as of the Closing Date, and at the Closing, Safeguard
shall have delivered to the Purchasers a certificate to that effect.
(b) Performance of Obligations. Each of the obligations of
Safeguard to be performed on or before the Closing Date pursuant to the terms of
this Agreement shall have been duly performed in all material respects on or
before the Closing Date, and at the Closing, Safeguard shall have delivered to
the Purchasers a certificate to that effect.
(c) Opinion of Counsel. The Purchasers shall have received the
written opinion dated the Closing Date of counsel for Safeguard substantially in
the form of Annex B hereto.
SECTION 5.3 CONDITIONS TO THE OBLIGATIONS OF SAFEGUARD. The
obligations of
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Safeguard to consummate the transactions contemplated hereby are subject to the
further requirements that:
(a) Representations and Warranties. The representations and
warranties of the Purchasers contained in this Agreement or in any other
document delivered pursuant hereto shall be true and correct in all material
respects (except to the extent that such representations and warranties are
qualified by materiality in which case, to the extent of such qualification,
they shall be true and correct in all respects) on and as of the Closing Date
with the same effect as if made on and as of the Closing Date, and at the
Closing, each Purchaser shall have delivered to Safeguard a certificate to that
effect.
(b) Performance of Obligations. Each of the obligations of the
Purchasers to be performed on or before the Closing Date pursuant to the terms
of this Agreement shall have been duly performed in all material respects on or
before the Closing Date, and at the Closing, each Purchaser shall have delivered
to Safeguard a certificate to that effect.
ARTICLE VI
TRANSFER AND VOTING RESTRICTIONS
SECTION 6.1 Transfer Restrictions.
(a) One Year Restrictions. Until the first anniversary of the
date hereof, each Purchaser agrees not to, directly or indirectly, make any
Transfer of the Purchased Shares. "Transfer" shall mean any (i) offer, pledge,
sale, contract to sell, sale of any option or contract to purchase, purchase of
any option or contract to sell, grant of any option, right or warrant for the
sale of, or other disposition or transfer of any of the Purchased Shares or (ii)
any swap or any other agreement or any transaction that transfers, in whole or
in part, directly or indirectly, the economic consequences of ownership of the
Purchased Shares. The foregoing transfer restriction shall not apply to the
Transfer by the Purchaser, or any affiliate of the Purchaser, to an affiliate of
the Purchaser, provided that any such transferee has agreed in writing for the
benefit of Safeguard to be bound by this Section 6.1(a), provided and to the
extent this section is then applicable, and any Transfer by an affiliate of the
Purchaser (other than to another affiliate of the Purchaser) shall be treated as
a Transfer by the Purchaser for purposes of the foregoing transfer restriction.
For purposes of this Section 6.1(a), an "affiliate" of the Purchaser shall mean
any (i) entity more than 50% of the outstanding equity interests of which are
owned, directly or indirectly, by the Purchaser, (ii) ERISA plans sponsored,
maintained or contributed to by the Purchaser of its subsidiaries and (iii)
charitable fund or foundation supported by the Purchaser.
(b) No Distribution. Each Purchaser agrees that it will not
engage in a "distribution" within the meaning of Rule 100 of Reg. M promulgated
under the Exchange Act with respect to the Purchased Shares.
SECTION 6.2 Right of First Refusal.
(a) If any Purchaser desires to Transfer any Purchased Shares
(except in sales made in compliance with the volume and manner of sale
limitations set forth in Rule 144(e), (f), (g) or (k) of the Securities Act,
such sales being referred to herein as "Market Sales"), such Purchaser shall
give at least 30 days written notice to Safeguard ("Sales Notice") of such
intention. The Sales Notice shall set forth the (x) number of Purchased Shares
proposed to be transferred (the "Offered Shares"), (y) the amount of
consideration to be paid for the Purchased Shares (the "Offered Price") and (z)
the name of the proposed purchaser of such Offered Shares (the "Proposed
Purchaser").
(b) The Sales Notice shall constitute an irrevocable offer
(the "Offer")
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by such Purchaser to sell to Safeguard the Offered Shares at the Offered Price.
Safeguard shall have the right (the "Right of First Refusal"), exercisable by
written notice given by Safeguard to such Purchaser ("Exercise Notice") within
15 days after receipt of such Sales Notice, to purchase all, but not a part of,
the Offered Shares specified in such Sales Notice for cash at the Offered Price.
(c) If Safeguard elects to purchase the Offered Shares, the
closing of the purchase of the Offered Shares shall take place on a mutually
acceptable closing date which shall be not more than 30 days after delivery of
the Exercise Notice. The closing shall take place at a time and place as the
parties mutually agree.
(d) On the closing date, such Purchaser shall deliver the
certificates representing the Offered Shares and such other documents as
Safeguard may reasonably request. The Offered Price shall be paid by wire
transfer of immediately available funds on the closing date.
(e) If Safeguard fails to elect to purchase the Offered Shares
within 15 days after receiving a Sales Notice, then such Purchaser may transfer
the Purchased Shares identified in the Sales Notice to the Proposed Purchaser
within 30 days following the expiration of the Right of First Refusal upon the
terms set forth in the Sales Notice, but the transferee must as a condition to
the transfer, agree in writing to be bound by all the terms and provisions of
this Agreement. Offered Shares not so transferred within such 30-day period
shall remain subject to this Agreement.
SECTION 6.3 VOTING RESTRICTIONS. Whenever any Purchaser, or any
transferee to which any Purchaser transferred Purchased Shares (other than
transferees in Market Sales), shall have the right to vote any Purchased Shares,
such shareholder shall vote or caused to be voted all Purchased Shares
beneficially owned by it in the manner recommended by Safeguard's Board of
Directors, if such a recommendation is given, except that during any period or
at any time when there shall be in full force and effect a valid order or
judgment of a court of competent jurisdiction or a ruling, pronouncement or
requirement of the New York Stock Exchange ("NYSE"), to the effect that the
foregoing provision of this Section 6.3 is invalid, void, unenforceable or not
in accordance with NYSE policy, then such shareholder will, if so requested by
Safeguard's Board of Directors, vote or cause to be voted all Purchased Shares
beneficially owned by it in the same proportion as the votes cast by or on
behalf of the other holders of Common Stock.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
SECTION 7.1 TERMINATION. This Agreement may be terminated (by
written notice by the terminating party to the other parties) and the
transactions contemplated hereby may
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be abandoned at any time prior to the Closing Date:
(a) By mutual written consent of each of Safeguard and the
Purchasers;
(b) By either Safeguard or the Purchasers if the Closing shall
not have occurred on or before the fifteenth business day following the
Effective Date (the "Termination Date"); provided, however, that the right to
terminate this Agreement under this Section 7.1(b) shall not be available to any
party whose failure to fulfill any obligation under this Agreement has been the
cause of, or resulted in, the failure of the Closing to occur on or before the
Termination Date;
(c) By Safeguard if the Purchasers shall have breached, or
failed to comply with, in any material respect any of their obligations under
this Agreement or any representation or warranty made by a Purchaser shall have
been incorrect in any material respect when made or shall have since ceased to
be true and correct in any material respect and such breaches, failures or
misrepresentations, individually or in the aggregate, result or would reasonably
be expected to impair the ability of the Purchasers to perform their obligations
under this Agreement, and by the Purchasers if Safeguard shall have breached, or
failed to comply with, in any material respect any of its obligations under this
Agreement or any representation or warranty made by Safeguard shall have been
incorrect in any material respect when made or shall have since ceased to be
true and correct in any material respect and such breaches, failures or
misrepresentations, individually or in the aggregate, result or would reasonably
be expected to impair the ability of Safeguard to perform its obligations under
this Agreement.
SECTION 7.2 EFFECT OF TERMINATION. If this Agreement is
terminated as permitted by Section 7.1, such termination shall be without
liability of any party (or any Affiliate or representative of such party) to any
other party, except that nothing herein shall relieve any party for willful
breach or non-performance. The provisions of Section 4.2 shall survive any
termination of this Agreement pursuant to Section 7.1.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 ENTIRE AGREEMENT. This Agreement constitutes the
entire agreement among the parties with respect to the subject matter hereof and
supersedes all prior written and oral and all contemporaneous oral agreements
and understandings with respect to the subject matter hereof. This Agreement may
not be amended except by an instrument in writing signed by the parties hereto.
SECTION 8.2 WAIVER. At any time before the Effective Time, any
party hereto may (a) extend the time for the performance of any of the
obligations or other acts of the other parties, (b) waive any inaccuracies in
the representations and warranties contained herein or in any document delivered
pursuant hereto and (c) waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of a party to any
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such extension or waiver shall be valid only as against such party and only if
set forth in an instrument in writing signed by such party.
SECTION 8.3 NOTICES. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given when
delivered in person, by telecopy, or by registered or certified mail (postage
prepaid, return receipt requested) or by overnight courier service to the
respective parties as follows:
if to Safeguard:
Safeguard Scientifics, Inc.
800 The Safeguard Building
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
with a copy to:
▇▇▇▇▇▇, ▇▇▇▇▇ & Bockius LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: N. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esquire
if to the Purchasers:
to their respective addresses set forth on Schedule I or to such other address
as the party to whom notice is given may have previously furnished to the others
in writing in the manner set forth above. Any notice or communication delivered
in person shall be deemed effective on delivery. Any notice or communication
sent by telecopy shall be deemed effective on the first business day at the
place of which such notice or communication is received following the day on
which such notice or communication was sent. Any notice or communication sent by
registered or certified mail shall be deemed effective on the fifth business day
at the place from which such notice or communication was mailed following the
day in which such notice or communication was mailed.
SECTION 8.4 GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York regardless of
the laws that might otherwise govern under principles of conflicts of laws
applicable thereto. The parties waive all right to trial by jury in any action,
suit or proceeding to enforce or defend any rights or remedies under this
Agreement.
SECTION 8.5 DESCRIPTIVE HEADINGS. The descriptive headings herein
are inserted
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for convenience of reference only and are not intended to be part of or to
affect the meaning or interpretation of this Agreement.
SECTION 8.6 COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
SECTION 8.7 EXPENSES. Except as otherwise provided 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.
SECTION 8.8 BINDING EFFECT; ASSIGNMENT. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective heirs, executors, legal representatives and successors. This
Agreement may not be assigned by any party hereto without the prior written
consent of the other parties.
SECTION 8.9 SEVERABILITY. If any provision of this Agreement or
the application thereof to any person or circumstance is held invalid or
unenforceable in any jurisdiction, the remainder hereof, and the application of
such provision to such person or circumstance in any other jurisdiction or to
other persons or circumstances in any jurisdiction, shall not be affected
thereby, and to this end the provisions of this Agreement shall be severable.
SECTION 8.10 FURTHER ASSURANCES. After Closing, the parties shall
execute, acknowledge and deliver, or cause to be executed, acknowledged and
delivered, such instruments and shall take such other action as may be necessary
or advisable to carry out their obligations under this Agreement and under any
exhibit, document, certificate or other instrument delivered pursuant to this
Agreement.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its officers thereunto duly authorized on the day and
year first above written.
SAFEGUARD SCIENTIFICS, INC.
By:_________________________________
Name:
Title:
[INSERT PURCHASER SIGNATURE BLOCKS]
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By:_________________________________
Name:
Title:
15
SCHEDULE I
PER SHARE PURCHASE PRICE . . . . . . . . . . . . . . . . . . .$_________
-------------------------
TABLE OF PURCHASERS
---------------------------------------- -------------------------------------- --------------------------------------
NAME ADDRESS AND TAX IDENTIFICATION NUMBER OF PURCHASED SHARES AGGREGATE PURCHASE PRICE
NUMBER OF PURCHASER
---------------------------------------- -------------------------------------- --------------------------------------
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ANNEX A
DEFINITIONS
The following terms, as used in this Agreement, have the following
meanings:
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
such other Person
"Applicable Law" means, with respect to any Person, any domestic or
foreign, federal, state or local statute, law, ordinance, rule, administrative
interpretation, regulation, order, writ, injunction, directive, judgment, decree
or other requirement of any Governmental Authority applicable to such Person or
any of its Affiliates or any of their respective properties, assets or
Representatives (in connection with such Representative's activities on behalf
of such Person or any of its Affiliates).
"Business Day" means a day other than a Saturday, Sunday or other day
on which commercial banks in New York, New York are authorized or required by
law to close.
"Contracts" means all contracts, agreements, undertakings, leases,
licenses, commitments, sales and purchase orders and other instruments of any
kind, whether written or oral.
"Court Order" means any judgment, decree, injunction, order or ruling
of any Governmental Authority that is binding on any person or its property
under Applicable Law.
"Default" means (1) a violation, breach of or default under any
Contract, License, Court Order or Applicable Law, (2) the occurrence of an event
that with the passage of time or the giving of notice or both would constitute a
violation, breach of or default under any Contract, License, Court Order or
Applicable Law, or (3) the occurrence of an event that with or without the
passage of time or the giving of notice or both would give rise to a right of
termination, renegotiation or acceleration under any Contract or License.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Governmental Authority" means any foreign, domestic, federal,
territorial, state or local governmental authority, quasi-governmental
authority, instrumentality, court, government or self-regulatory organization,
commission, tribunal or organization or any regulatory, administrative or other
agency, or any political or other subdivision, department or branch of any of
the foregoing.
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"Lien" means, with respect to any property or asset, any mortgage,
lien, pledge, charge, security interest, encumbrance or other adverse claim of
any kind in respect of such property or asset.
"Licenses" means licenses, franchises, permits, certificates,
approvals, easements, rights and other authorizations.
"Litigation" means any lawsuit, action, arbitration, administrative or
other proceeding, criminal prosecution or governmental investigation or inquiry
involving or affecting the named Person, to which the named Person is a party or
by which it or any of such businesses, assets or liabilities may be bound or
affected.
"Person" means an individual, corporation, partnership, limited
liability company, joint venture, association, trust or other entity or
organization, including a Governmental Authority.
"Registration Statement" means the registration statement on Form S-3
(No. 333-________) filed by Safeguard with the SEC on March 15, 2000, including
all amendments thereto and any prospectus filed in accordance with the
provisions of Rule 430A and paragraph (b) of Rule 424 of the rules and
regulations promulgated under the Securities Act, and including the exhibits
thereto, schedules thereto, if any, and the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the Securities Act, at the time it
became effective.
"Safeguard Material Adverse Effect" means any fact, condition, event,
development or occurrence which, individually or when taken together with all
other such facts, conditions, events, developments or occurrences, could
reasonably be expected to have a material adverse effect on the financial
condition, operating results or business of Safeguard and its Subsidiaries,
taken as a whole.
"Subsidiary" means, with respect to any Person, any corporation or
other entity of which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other Persons
performing similar functions are at the time directly or indirectly owned by
such Person.
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ANNEX B
FORM OF COUNSEL OPINION
April __, 2000
[Names and Addresses of Purchasers]
Re: Purchase Agreement, dated April __, 2000, between Safeguard
Scientifics, Inc. and the Purchasers listed on Schedule I thereto
Ladies and Gentlemen:
We have acted as counsel for Safeguard Scientifics, Inc., a
Pennsylvania corporation ("Safeguard"), in connection with the above captioned
Purchase Agreement, dated April __, 2000 (the "Agreement"), between Safeguard
and the Purchasers listed on Schedule I thereto. All capitalized terms used
herein without definition are used herein with the respective meanings ascribed
to them in the Agreement. This opinion is being delivered to you pursuant to
Section 5.2(c) of the Agreement.
In rendering this opinion, we have examined executed counterparts or
copies certified or otherwise identified to our satisfaction, of the Agreement.
As to various questions of fact material to our opinion, we have relied, without
independent investigation, upon the representations set forth in the Agreement
of the parties thereto, and upon such certificates of officers and
representatives of such parties as we have deemed relevant, as well as upon the
certificates delivered in connection with the Closing under the Agreement. We
have made no independent factual investigation with respect to such matters.
We have also assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals and the conformity
with originals of all documents submitted to us as copies. We have also assumed
with respect to each party other than Safeguard (i) that the Agreement has been
duly authorized, executed and delivered by each party thereto, (ii) that each
such party has full power and authority to execute, deliver and perform
Agreement, and (iii) that the Agreement is the legal, valid and binding
obligation of each such party, enforceable against each such party under
applicable law.
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In connection with the foregoing, we have made no independent review or
investigation of any nature as to the assumptions set forth or referred to
herein or as to the representations upon which we are relying, and no inference
as to any knowledge of these legal or factual matters by this Firm should be
drawn from our representation of Safeguard.
Based on the foregoing and subject to the qualifications and
limitations set forth below, we are of the opinion that:
1. The Purchased Shares to be issued in the transactions contemplated
by the Agreement have been duly authorized, and, upon consummation of the
transactions contemplated hereby, that such Purchased Shares will be validly
issued, fully paid and nonassessable shares of Common Stock of Safeguard.
2. The Agreement constitutes the valid and binding agreement of
Safeguard, enforceable against Safeguard in accordance with its terms, except
(a) to the extent that the rights of a party to indemnification or contribution
thereunder may be limited by applicable securities laws, (b) as the same may be
limited by applicable bankruptcy, insolvency, moratorium or similar laws of
general application relating to or affecting creditors' rights, including,
without limitation, the effect of statutory or other laws regarding fraudulent
conveyances and preferential transfers, (c) for the limitations imposed by
general principles of equity.
3. Safeguard is not, and after giving effect to sale of the Purchased
Shares and the application of the proceeds therefrom will not be required to
register as an "investment company" as such term is defined in the Investment
Company Act of 1940, as amended.
Our opinion contained in numbered paragraph 3 is based solely upon the
opinion, of even date herewith, of ▇▇▇▇▇, Polk & ▇▇▇▇▇▇▇▇, a copy of which is
attached hereto.
The opinion expressed herein is limited to matters governed by the
federal laws of the United States, the laws of the Commonwealth of Pennsylvania
and the State of New York; provided, however, that no opinion is given in
respect of the adequacy of disclosure provided in connection with the offer or
sale of the Purchased Shares. Except as specified in the next sentence, to the
extent that any opinion herein relates to matters governed by any laws other
than the laws to which the opinions expressed herein are limited, we have
assumed that such laws are the same in all relevant respects as the laws of the
Commonwealth of Pennsylvania.
The foregoing opinion is given as of the date hereof, and we assume no
obligation to update or supplement the foregoing opinion to reflect any facts or
circumstances which may hereafter come to our attention or any changes in laws
which may hereafter occur.
This opinion is solely for the benefit of the addressees hereof for use
in connection
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with the transactions contemplated by the Agreement and may not be relied upon
by any other person or for any other purpose without our express written
consent.
Very truly yours,
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