SETTLEMENT AGREEMENT
This Agreement (including all exhibits and schedules, the
"Agreement") is made and entered into as of this 19th day of November 1997,
by and among SICPA Holding S.A., a company organized and existing under the
laws of Switzerland ("SICPA"), Optical Coating Laboratory, Inc., a
corporation organized and existing under the laws of the State of Delaware
("OCLI"), Flex Products, Inc., a corporation organized and existing under
the laws of the State of Delaware ("Flex"), Xxxxxxx X. Xxxxxx, Xx., Xxxx
XxXxxxxxxx, Xxxxx Xxxxxx (Messrs. Xxxxxx, XxXxxxxxxx and Xxxxxx
collectively, the "OCLI Designated Directors"), Xxxxxxx X. Xxxx and Xxxxxxx
Xxxxxx (Messrs. Amon and Beruff collectively, the "SICPA Designated
Directors").
RECITAL
WHEREAS the undersigned parties to this Agreement desire to
compromise and settle that certain litigation entitled SICPA Holding S.A.
v. Optical Coating Laboratory, Inc., Xxxxxxx X. Xxxxxx, Xx., Xxxx
XxXxxxxxxx, Xxxxx Xxxxxx and Flex Products, Inc., including counterclaims
entitled Optical Coating Laboratory, Inc. and Flex Products, Inc. v. SICPA
Holding S.A., Xxxxxxx X. Xxxx and Xxxxxxx Xxxxxx, in the Court of Chancery
of the State of Delaware in and for New Castle County, C.A. No. 15129 (the
"Litigation");
NOW THEREFORE, in consideration of the premises, and other good
and valuable consideration, the receipt of which is hereby acknowledged,
SICPA, OCLI , Flex, the SICPA Designated Directors and the OCLI Designated
Directors hereby agree as follows:
ARTICLE I
DEFINITIONS; INTERPRETATION
Section 1.01. Definitions. Except as otherwise specified herein
or as the context may otherwise require, the following terms have the
respective meanings set forth below for all purposes of this Agreement, and
the definitions of such terms are equally applicable both to the singular
and plural forms of such terms and to the masculine, feminine and neuter
genders of such terms. The definition of terms in this Agreement is not
intended to and shall not be construed to affect the construction of
similar terms in other agreements involving the Parties.
"Addendum No. 1" means that certain Addendum No. 1 to OCLI/SICPA
Agreement made and entered into by and between OCLI and SICPA, dated as of
May 1, 1997.
"Agreement" has the meaning set forth in the preamble of this
Agreement.
"Assigned Principal Amount" shall have the meaning set forth in
Section 3.02.
"Business Day" means a day other than a Saturday, Sunday, U.S.
federal legal holiday or Swiss national holiday.
"Common Stock" shall include any shares of Flex of any class or
series, which has no preference or priority in the payment of dividends or
in the distribution of assets upon any voluntary or involuntary
liquidation, dissolution or winding up of Flex and which is not subject to
redemption by Flex, and if at any time there shall be more than one such
class or series, all such shares, irrespective of class or series
designation, shall be treated as one class for purposes of calculating a
Flex Equity Interest.
"Effective Date" means the date first above written.
"Equity Ratio" means the ratio of the Flex Equity Interest of
OCLI divided by the Flex Equity Interest of SICPA.
"Financial Advisor" means the managing underwriter(s) or
placement agent(s) engaged to sell or place securities, including debt and
equity securities
"Flex" has the meaning set forth in the preamble of this
Agreement.
"Flex Equity Interest" of a person means the quotient of (i) the
number of shares of the Common Stock of Flex beneficially owned by such
person on the date of calculation, divided by (ii) the aggregate number of
shares of the Common Stock of Flex beneficially owned by OCLI and SICPA on
the date of calculation.
"Joint Acquisition Agreement" means that certain Agreement made
and entered into by and between OCLI and SICPA, dated as of December 13,
1994.
"Litigation" has the meaning set forth in the Recital of this
Agreement.
"Note Ratio" means the ratio of (i) the amount that is the sum of
the outstanding principal balance of the OCLI Note plus the unpaid balance
of the Assigned Principal Amount, divided by (ii) the amount that is the
remainder of the outstanding principal balance of the SICPA Note minus the
unpaid balance of the Assigned Principal Amount.
"OCLI" has the meaning set forth in the preamble of this
Agreement.
"OCLI Designated Directors" has the meaning set forth in the
preamble of this Agreement.
"OCLI-Flex License Agreement" means that certain License
Agreement made and entered into by and between OCLI and Flex, dated
December 19, 1988.
"OCLI Note" means that certain Multiple Advance Promissory Note,
Series 1997-II, No. 1, dated June 5, 1997, of the maximum principal amount
of $9,420,000 made by Flex to OCLI.
"OCLI's Proportionate Share" means the percentage obtained by
dividing (i) the unpaid balance of the Assigned Principal Amount by
(ii) the outstanding principal amount of the SICPA Note.
"OVI" means optically variable ink.
"OVP" means optically variable pigment.
"Parties" means OCLI, SICPA, Flex, the OCLI Designated Directors
and the SICPA Designated Directors.
"Public Offering" means a sale by Flex of any shares of Common
Stock in an underwritten public offering registered under the Securities
Act of 1933.
"Put-Call Agreement" means that certain Put and Call, Right of
First Refusal and Co-Sale Agreement by and between OCLI and SICPA, dated as
of May 8, 1995.
"Retained Principal Amount" shall have the meaning set forth in
Section 3.02.
"SICPA" has the meaning set forth in the preamble of this
Agreement.
"SICPA Designated Director" has the meaning set forth in the
preamble of this Agreement.
"SICPA-Flex License Agreement" means that certain License and
Supply Agreement by and among Flex and SICPA, dated December 2, 1994.
"SICPA Note" means that certain Multiple Advance Promissory Note,
Series 1997-II, No. 2, dated June 5, 1997, of the maximum principal amount
of $6,280,000 made by Flex to SICPA.
Section 1.02. Interpretation. All references in this Agreement
to designated Sections, Articles, Exhibits and Schedules are to the
designated sections and articles of and exhibits and schedules to this
Agreement, unless otherwise specified. The headings and captions used in
this Agreement are for convenience of reference only and do not define,
limit or describe the scope or intent of the provisions of this Agreement.
The terms "includes" or "including" are intended to be inclusive rather
than exclusive.
ARTICLE II
RELEASES; DISMISSAL
Section 2.01. Releases. Effective on the Effective Date, each
of OCLI, SICPA, Flex, each of the OCLI Designated Directors and each of the
SICPA Designated Directors hereby unconditionally releases and discharges
each of the other Parties and each of the predecessors, parents,
subsidiaries, corporate affiliates, officers, directors, employees,
stockholders, agents, attorneys, successors, assigns, heirs, administrators
and executors of each of the respective Parties from any and all claims,
causes of action, counterclaims or third party claims arising out of or in
any way relating to the subject matter of the Litigation, whether known or
unknown, which was, or could have been, asserted in the Litigation, now and
forever.
Section 2.02. Dismissal of Litigation. Promptly following the
Effective Date, but in no event later than the third Business Day following
the Effective Date, the Parties shall cause their respective counsel to
file such documents and take such other steps as may be necessary to cause
the Litigation to be dismissed, with prejudice.
ARTICLE III
COVENANTS
Section 3.01. Deletion of Put-Call. Effective upon the
Effective Date, SICPA and OCLI hereby agree to amend the Put-Call Agreement
to delete Section 6 of the Put-Call Agreement.
Section 3.02 Assignment of a Portion of SICPA Note Payments.
Effective upon the Effective Date, SICPA hereby assigns to OCLI the right
of SICPA to receive payments of principal and interest in respect of that
portion of the SICPA Note that is equal in principal amount to
$2,600,000.00 (the "Assigned Principal Amount") in consideration of the
payment by OCLI to SICPA of the amount of $2,600,000.00 (the "Purchase
Price"). OCLI shall pay the Purchase Price to SICPA on the Effective Date
by wire transfer of immediately available funds to an account designated by
SICPA. SICPA retains the right to receive payments of principal and
interest in respect of the remainder of the principal amount of the SICPA
Note. The right to receive all payments of interest on the Assigned
Principal Amount that are accrued but unpaid through but excluding the
Effective Date shall be and remain the property of SICPA. From and
including the Effective Date, all payments by Flex of interest accruing in
respect of the SICPA Note shall be allocated (i) to OCLI, in an amount
equal to the portion of such interest payment allocable to the remaining
unpaid balance of the Assigned Principal Amount and (ii) to SICPA, the
remainder. From and including the Effective Date, all payments of
principal on the SICPA Note shall be allocated (i) until the Equity Ratio
is first equal to or greater than the Note Ratio, to OCLI, in reduction of
the remaining unpaid balance of the Assigned Principal Amount, to the
extent necessary to cause the Equity Ratio to be equal to the Note Ratio,
and thereafter and at all other times (ii) (a) to OCLI, an amount equal to
OCLI's Proportionate Share of such payments, and (b) to SICPA, the
remainder, provided, that, in all events, OCLI's right to receive any
allocation of payments of principal on the SICPA Note shall cease when the
unpaid balance of the Assigned Principal Amount is reduced to zero (i.e.,
once OCLI has been allocated the amount of $2,600,000.00 of principal
payments). Flex shall, and SICPA hereby directs Flex to, make all payments
of principal and interest in respect of the SICPA Note in accordance with
the allocations set forth in this Section 3.02.
Section 3.03. Working Capital Loans.
(a) Effective upon the Effective Date, OCLI and SICPA agree to
amend the Joint Acquisition Agreement by adding the
following at the end of Section 3.d. thereof:
"Notwithstanding anything to the contrary in this
Section 3.d., SICPA shall have no obligation to provide
any Working Capital Loan to Flex from and after the
first date on which SICPA owns less than twenty percent
(20%) of the common stock of Flex (treating all classes
of Flex common stock as one class for purposes of this
calculation)."
(b) Subject to the approval of Flex's Financial Advisor, which
approval OCLI and Flex shall use good faith efforts to
obtain, Flex will, and OCLI will cause Flex to, use the
proceeds of any debt financing by Flex or sale of equity
securities (or rights exercisable for equity securities) by
Flex to redeem Flex's Series C Preferred Stock held by SICPA
and to repay the principal of Working Capital Loans (as
defined in the Joint Acquisition Agreement) held by SICPA
(with any redemption of Series C Preferred Stock or
repayment of Working Capital Loans to be made to OCLI and
SICPA on a pro rata basis in accordance with the proportions
of the Series C Preferred Stock and Working Capital Loans,
as the case may be, then held by each of OCLI and SICPA).
Section 3.04. SICPA-Flex License Agreement. On the Effective
Date, each of SICPA and Flex shall execute and deliver to the other the
Amendment to SICPA-Flex License Agreement attached hereto as Exhibit A and
incorporated by reference herein.
Section 3.05. Public Offering by Flex. In the event, at any
time, Flex shall undertake an initial Public Offering, OCLI and Flex will
take all necessary actions to permit SICPA, at SICPA's sole election, to
sell a portion of the shares of the Common Stock of Flex then held by SICPA
in such Public Offering at Flex's sole cost and expense (other than any
underwriting discounts or commissions allocable to the shares of Common
Stock sold by SICPA in such Public Offering and other than the fees and
disbursements of any counsel retained solely by SICPA), provided that the
number of shares of Flex Common Stock that SICPA shall be permitted to sell
in any such Public Offering shall be the number of shares that is not more
than the lesser of (i) twenty-five percent (25%) of the total number of
shares sold in such Public Offering and (ii) ten percent (10%) of Flex's
Common Stock issued and outstanding immediately prior to the Public
Offering.
Section 3.06. SICPA Registration Rights. Flex shall provide to
SICPA the registration rights (the "Registration Rights") set forth in
Exhibit B attached hereto and incorporated by reference herein.
Section 3.07. Flex Certificate of Incorporation. On the
Effective Date, Flex shall cause to be filed with the Secretary of State of
Delaware the Second Amended and Restated Certificate of Incorporation of
Flex attached hereto as Exhibit C and incorporated by reference herein. In
connection therewith, in order to minimize the number of shares of Class B
Common Stock (as defined in Exhibit C) that might be issued or issuable
pursuant to the exercise of employee stock options, Flex and OCLI agree
promptly following the Effective Date to use their best efforts to obtain
an amendment to Flex's permit from the California Commissioner of
Corporations covering Flex's Stock Option Plan to allow options to be
granted under the Plan that are exercisable for shares of Class A Common
Stock. In the event such a permit is obtained, OCLI and Flex agree that
all options granted under the Plan to acquire Class B Common Stock shall be
in an aggregate amount not to exceed 10% of Flex's issued and outstanding
Class B Common Stock at the time of grant of the options. In addition,
OCLI and Flex will make good faith reasonable efforts to cause the holders
of employee stock options exercisable to acquire Class B Common Stock to
convert such options to options exercisable to acquire Class A Common
Stock. In the event such a permit cannot be obtained, options to purchase
shares of Class B Common Stock in excess of 10% of the then issued and
outstanding Class B Common Stock may be granted under the Plan, and in that
event Flex agrees that it will exercise its right under the Plan to either
purchase from optionees options that are about to be exercised or purchase
shares of Class B Common Stock issued to optionees such that at no time
will there be shares of Class B Common Stock issued to optionees or former
optionees that exceed 10% of the issued and outstanding Class B Common
Stock. If, at any time, Flex shall undertake a Public Offering, OCLI, Flex
and SICPA will take all necessary action to cause Flex to file with the
Secretary of State of Delaware a further amended and restated Certificate
of Incorporation of Flex to delete from Flex's Certificate of Incorporation
all shareholder supermajority approval requirements effective upon the
closing of such Public Offering.
Section 3.08. Audit Committee. Effective upon the Effective
Date, the by-laws of Flex shall be amended to add to Flex's by-laws the
provisions of the By-Law Amendment attached as Exhibit D hereto and
incorporated by reference herein.
Section 3.09. OCLI-Flex License Agreement. On the Effective
Date, each of OCLI and Flex shall execute and deliver the Amendment to
OCLI-Flex License Agreement attached hereto as Exhibit E and incorporated
by reference herein.
Section 3.10. Flex's Future Operations. OCLI desires to have
better access to the use of Flex's roll-to-roll coating technology for
applications other than color-shifting pigments and other existing and
planned products of Flex and other than in security, anticounterfeiting and
solar control fields, in a manner that is fair to Flex, including through
revisions to the OCLI-Flex License Agreement that would permit OCLI, on a
shared, non-exclusive basis with Flex, to manufacture, use and sell
products using such roll-to-roll technology other than existing products of
Flex or extensions thereof and planned products for the security and
anticounterfeiting fields and for solar control. SICPA desires to preserve
for Flex exclusive rights to use roll-to-roll coating technology in the
manufacture, use and sale of color-shifting pigments and other existing and
planned products of Flex or extensions thereof and in the security and
anticounterfeiting fields and for solar control. Promptly following the
Effective Date, OCLI and SICPA agree to negotiate in good faith in an
effort to reach mutual agreement concerning the desires of OCLI and SICPA
set forth in this Section 3.10.
Section 3.11. Product Acceptance. Promptly following the
Effective Date, OCLI, SICPA and Flex will engage in good faith negotiations
involving the senior management and senior technical personnel of each of
OCLI, SICPA and Flex in an effort to resolve by mutual agreement the
acceptance by SICPA of OVP produced by Flex utilizing Flex's Beta III
equipment (and to resolve disputes concerning invoices for such product)
and to formulate on an expeditious basis a mutually agreeable objective
standard for measuring the acceptance criteria of OVP, in each case using
reasonable efforts and satisfying the requirements of SICPA's customers for
OVI. Flex shall not be deemed to have waived any rights it has under the
SICPA-Flex License Agreement based upon its agreement to negotiate in
accordance with this Section 3.11, but Flex hereby agrees not to exercise
any rights it may have pertaining to the subject matter of this Section
3.11 (i) with respect to the colors of green-to-blue and magenta-to-green,
for a period of thirty (30) days following the Effective Date and (ii) with
respect to the colors of Liberty Green (green-to-magenta), green-to-
magenta, gold-to-green and blue-to-red, for a period of four (4) months
following the Effective Date.
Section 3.12. Fourth Fiscal Quarter Orders. SICPA shall not make
any change to decrease below an aggregate of 1,590 kilograms the quantity
of OVP ordered by SICPA for Flex's current fourth fiscal quarter (i.e. for
the months of August, September and October 1997).
Section 3.13. Marketing Campaigns. OCLI and SICPA will consult
in good faith at SICPA's request to address and to cause Flex to address
significant sales opportunities for OVI, it being understood that SICPA
will have the burden of persuading OCLI whether or not to cooperate in
pursuing any such opportunity.
12
Section 3.14. Additional OVP Production Facilities. OCLI, Flex
and SICPA agree to negotiate in good faith, at SICPA's request, concerning
the establishment of an additional facility for the manufacture of OVP in
order to satisfy the demonstrated requirements of SICPA's customers and on
terms and conditions to be mutually agreed by OCLI, Flex and SICPA.
Section 3.15. Representations and Warranties True on the
Effective Date. The representations and warranties of each of the
respective Parties contained in Article IV shall be true and accurate on
the Effective Date as though made on the Effective Date.
Section 3.16. Strategic Technical Advisory Committee. Effective
upon the Effective Date, SICPA and OCLI hereby agree to amend and replace
Section 3.h. of the Joint Acquisition Agreement as follows:
"h. Strategic Technical Advisory Committee. Flex has
established a Strategic Technical Advisory Committee ("STAC").
The STAC shall consist of three (3) representatives appointed by
OCLI, three (3) representatives appointed by Flex, and two (2)
representatives appointed by SICPA. The STAC shall oversee
Flex's ongoing research and development activities, shall perform
those duties enumerated in the License Agreement and the Research
Development and Engineering Agreement described in Section 7.a.5.
and shall implement all of the provisions of the Memorandum of
Alliance between SICPA S.A. and Flex, dated March 9, 1993 and of
the Joint Venture Agreement between Flex and SICPA Industries of
America, Inc., dated as of July 1, 1993. The STAC shall meet at
least quarterly. The agenda for such meetings shall include, but
not be limited to, a review of intellectual property positions
and strategies and long-term supply and demand issues. If, at
any time, SICPA shall own less than twenty percent (20%) of
Flex's then issued and outstanding common stock (treating all
shares of Flex's common stock as one class for purposes of this
calculation), Flex shall have the option of whether or not to
continue the operation of STAC, provided that Flex shall
reinstate the Committee described in Section 1.1.1(b) of the
License and Supply Agreement by and among Flex and SICPA, dated
December 2, 1994, prior to amendment, in the event that Flex
elects to discontinue the operation of STAC."
Section 2.b. of Addendum No. 1 is deleted effective upon the
Effective Date.
Section 3.17. OCLI Services. OCLI and SICPA agree that it would
be desirable to administer the operations of Flex in a manner that permits
Flex to take advantage of certain common facilities, resources and
technologies between the operations of OCLI and Flex in a manner that is
cost effective for Flex and improves the value of Flex for all of its
shareholders. From and after the Effective Date, SICPA agrees that OCLI
may, without having to obtain shareholder approval from SICPA pursuant to
the provisions of Section VII.(xiv) of Flex's Second Amended and Restated
Certificate of Incorporation, take actions to implement these desired
objectives through the integration of Flex's administrative and research
and development operations with OCLI's administrative and research and
development operations, provided, that such actions (i) do not impair the
long term prospects of Flex or the ability of Flex to become an independent
public company, (ii) are implemented on commercially reasonable terms that
are fair to Flex, (iii) are no more costly to Flex than would be the case
if Flex provided the relevant service itself or obtained such service from
an unaffiliated third party, and (iv) will serve the best interests of all
of Flex's shareholders. It is understood that OCLI will consult in advance
with SICPA concerning OCLI's plan in connection with the settlement of the
Litigation to implement a restructuring of the administrative operations of
Flex in accordance with this Section 3.17. For purposes of determining
whether such restructuring satisfies the foregoing clause (iii), the cost
results for Flex of such restructuring shall be considered in the
aggregate.
Section 3.18. Confidentiality. The provisions and terms of this
Agreement shall be summarized in a press release to be mutually agreed by
OCLI, SICPA and Flex (the "Approved Press Release"). Except as may be
specifically disclosed in the Approved Press Release, the Parties and their
respective counsel shall keep and maintain confidential all terms and
provisions of this Agreement, the course, substance, details and
particulars of all settlement negotiations and all terms and conditions of
the settlement of the Litigation, and they shall not disclose any of the
provisions or terms of such settlement or this Agreement except as may be
required by applicable law after prior consultation with OCLI, Flex and
SICPA, and then only to the extent required by applicable law following
best efforts by the disclosing Party to secure confidential treatment of
any information required to be disclosed. In addition, the Parties agree
that the Amendment to SICPA-Flex License Agreement attached hereto as
Exhibit A and the Amendment to OCLI-Flex License Agreement attached hereto
as Exhibit E each contain sensitive confidential financial information that
shall be kept and maintained confidential and shall not be disclosed by any
Party except with the prior written consent (i) of SICPA as to the
Amendment to SICPA-Flex License Agreement, or (ii) of OCLI as to the
Amendment to OCLI-Flex License Agreement, which consent in each case may be
withheld in the sole discretion of SICPA or OCLI, as the case may be,
provided, that, in the event that OCLI or Flex determines that it is
required by U.S. federal securities law to file with the Securities and
Exchange Commission ("SEC") a copy of the Amendment to SICPA-Flex License
Agreement, then OCLI or Flex, as the case may be, shall be permitted to
make such filing but only after making best efforts to obtain confidential
treatment from the SEC of the Amendment to SICPA-Flex License Agreement to
the maximum extent possible (including, without limitation, as to pricing
and quantity terms).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01. Representations and Warranties of OCLI, Flex and
SICPA. Each of OCLI, Flex and SICPA hereby represents and warrants to the
other Parties that as of the date of this Agreement (and, for purposes of
Section 3.15, as of the Effective Date):
(a) Organization. It is a corporation or, in the case of SICPA,
a societe annonyme, duly organized, validly existing and in
good standing under the laws of its jurisdiction of
incorporation. It is duly licensed, registered or qualified
to do business and is in good standing in all jurisdictions
in which the character or nature of its business requires it
to be so licensed, registered or qualified and the failure
to be so licensed, registered or qualified would have a
material adverse effect on its business.
(b) Authority; Enforceability. It has the corporate power and
authority to enter into this Agreement and to carry out its
obligations hereunder. The execution and delivery of this
Agreement and the consummation and performance of the
transactions contemplated hereby have been duly authorized
by all necessary corporate action and no other proceeding on
its part is necessary to authorize the consummation or
performance of the transactions contemplated hereby. This
Agreement is legal, valid, binding and enforceable against
it in accordance with its terms, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors'
rights generally, and subject to general principles of
equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
(c) Consents. No consent, waiver, approval, authorization,
exemption, registration, license or declaration of or by, or
filing with, any other person or any national, federal,
state or local governmental or regulatory agency, bureau or
authority within or without the United States is required
with respect to it, other than those which have been
obtained, in connection with (i) the execution, delivery or
enforceability of this Agreement or (ii) the consummation or
performance of the transactions contemplated hereby.
(d) No Breach. The execution and delivery of this Agreement by
it and the consummation and performance of the transactions
provided for hereby does not and will not (i) conflict with
or result in any breach or violation of, or loss of benefit
under, any provision of its charter, certificate or articles
of incorporation, by-laws or other governing documents or
(ii) violate, conflict with or result in the breach of, or
loss of benefit under, or constitute a default or an event
which with notice, lapse of time, or both, would constitute
a default or event of default under (A) the terms of any
contract to which it is a party or by which it is bound, or
(B) any judgment, statute, law, ordinance, rule or
regulation or order of any governmental authority applicable
to it.
(e) No Litigation. There is no action, suit, proceeding,
inquiry or investigation, at law or in equity, or before any
court, public board or body pending, or to its knowledge
threatened, involving it, wherein an unfavorable decision,
ruling or finding would (i) materially and adversely affect
the transactions contemplated by this Agreement or
(ii) adversely affect the validity or enforceability of this
Agreement or any document necessary to consummate or perform
the transactions contemplated hereby.
Section 4.02. Representations and Warranties of OCLI-Designated
Directors and SICPA-Designated Directors. Each of the OCLI-Designated
Directors and the SICPA-Designated Directors hereby represents and warrants
to the other Parties that as of the date of this Agreement (and, for
purposes of Section 3.15, as of the Effective Date):
(a) Capacity. He has the legal capacity to enter into this
Agreement and to carry out his obligations hereunder and is
not suffering from any disability or impediment that
diminishes such legal capacity. This Agreement is legal,
valid, binding and enforceable against him in accordance
with its terms, subject to applicable bankruptcy, insolvency
and similar laws affecting creditors' rights generally, and
subject to general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or
at law).
(b) No consent, waiver, approval, authorization, exemption,
registration, license or declaration of or by, or filing
with, any other person or any national, federal, state or
local governmental or regulatory agency, bureau or authority
within or without the United States is required with respect
to him, other than those which have been obtained, in
connection with (i) the execution, delivery or
enforceability of this Agreement or (ii) the consummation or
performance of the transactions contemplated hereby.
(c) No Breach. The execution and delivery of this Agreement by
him and the consummation and performance of the transactions
provided for hereby does not and will not violate, conflict
with or result in the breach of, or loss of benefit under,
or constitute a default or event of default under (i) the
terms of any contract to which he is a party or by which he
is bound, or (ii) any judgment, statute, law, ordinance,
rule or regulation or order of any governmental authority
applicable to him.
(d) No Litigation. There is no action, suit, proceeding,
inquiry or investigation, at law or in equity, or before any
court, public board or body pending, or to his knowledge
threatened, involving him, wherein an unfavorable decision,
ruling or finding would materially and adversely affect the
transactions contemplated by this Agreement or adversely
affect the validity or enforceability of this Agreement or
any document necessary to consummate or perform the
transactions contemplated hereby.
ARTICLE V
MISCELLANEOUS
Section 5.01. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF DELAWARE
WITHOUT REGARD TO CONFLICTS OF LAWS PROVISIONS.
Section 5.02. Waivers and Amendments. No waiver shall be deemed
to have been made by any Party of any of its rights under this Agreement
unless the same shall be in writing and is signed on its behalf by an
authorized person. Any such waiver shall constitute a waiver only with
respect to the specific matter described in such writing and shall in no
way impair the rights of the Party granting such waiver in any other
respect or at any other time. Except as specifically provided herein, this
Agreement shall not be amended or modified except by an instrument in
writing signed by each Party.
Section 5.03. Costs and Expenses. Each of the Parties to this
Agreement shall bear its own expenses incurred in connection with the
negotiation, preparation, execution, closing and performance of this
Agreement.
Section 5.04. Successors. This Agreement shall be binding upon
and inure to the benefit of the Parties and their respective heirs and
successors.
Section 5.05. No Third Party Rights. This Agreement is intended
to be solely for the benefit of the Parties and is not intended to confer
any benefits upon, or create any rights in favor of, any person other than
the Parties.
Section 5.06. Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed an original, but
all of which together shall constitute a single instrument.
Section 5.07. Entire Agreement. This Agreement sets forth the
entire understanding and agreement between the Parties as to the matters
covered herein and supersedes and replaces any inconsistent prior
understanding, agreement or statement of intent, in each case, written or
oral, expressly addressed by this Agreement.
Section 5.08. Further Assurances. Each of the Parties hereby
agrees to execute and deliver all such other and additional instruments and
documents and to do all such other acts and things as may be reasonably
necessary more fully to effectuate this Agreement and consummate the
transactions contemplated herein.
Section 5.09. Notices. All notices to be delivered hereunder
shall be in writing and shall be sent by (i) hand delivery, against written
receipt thereof (ii) registered or certified mail, return receipt
requested, (iii) reputable overnight courier service, with receipt of
delivery acknowledged, or (iv) telecopier, to the other Parties at the
addresses shown below. Any such demand, notice or communication hereunder
shall be deemed to have been given on the date received or on the date
delivered and refused:
If to OCLI:
Optical Coating Laboratory, Inc.
0000 Xxxxxxxxxx Xxxxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000-0000
Telecopier: 000-000-0000
Attention: President
with a copy to:
General Counsel
Optical Coating Laboratory, Inc.
0000 Xxxxxxxxxx Xxxxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000-0000
Telecopier: 000-000-0000
If to Xxxxxxx X. Xxxxxx, Xx.:
Xx. Xxxxxxx X. Xxxxxx, Xx.
Optical Coating Laboratory, Inc.
0000 Xxxxxxxxxx Xxxxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000-0000
Telecopier: 000-000-0000
If to Xxxx XxXxxxxxxx:
Mr. Xxxx XxXxxxxxxx
Optical Coating Laboratory, Inc.
0000 Xxxxxxxxxx Xxxxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000-0000
Telecopier: 000-000-0000
If to Xxxxx Xxxxxx:
Xx. Xxxxx Xxxxxx
Optical Coating Laboratory, Inc.
0000 Xxxxxxxxxx Xxxxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000-0000
Telecopier: 000-000-0000
If to Flex:
FLEX Products Inc.
0000 Xxxxxxx Xxx
Xxxxx Xxxx, Xxxxxxxxxx 00000-0000
Telecopier: 000-000-0000
Attention: President
with a copy to:
General Counsel
Optical Coating Laboratory, Inc.
0000 Xxxxxxxxxx Xxxxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000-0000
Telecopier: 000-000-0000
If to SICPA:
SICPA Holding S.A.
Xxxxxx xx Xxxxxxxxxx 00
0000 Xxxxxx
Xxxxxxxxxxx
Telecopier: 011-41-21-627-5505
Attention: President
with a copy to:
Xxxxx X. Xxxxx
Cleary, Gottlieb, Xxxxx & Xxxxxxxx
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
Telecopier: 000-000-0000
If to Xxxxxxx X. Xxxx:
Xx. Xxxxxxx X. Xxxx
SICPA Holding S.A.
Xxxxxx xx Xxxxxxxxxx 00
0000 Xxxxxx
Xxxxxxxxxxx
Telecopier: 011-41-21-627-5915
If to Xxxxxxx Xxxxxx:
Xx. Xxxxxxx Xxxxxx
SICPA Industries of America, Inc.
0000 Xxxxxxxx Xxx
Xxxxxxxxxxx, Xxxxxxxx 00000
Telecopier: 000-000-0000
The address for any Party set forth above may be changed by written notice
to the other Parties in accordance with this Section 5.09.
IN WITNESS WHEREOF, the Parties have set their hands as
of the date first above written.
OPTICAL COATING LABORATORY, INC.
By: /s/Xxxxxx Xxxx
Name: Xxxxxx Xxxx
Title: Vice President,
General Counsel
and Corporate Secretary
FLEX PRODUCTS, INC.
By: /s/Xxxxxxx X. Xxxxxx, Xx.
Name: Xxxxxxx X. Xxxxxx,Xx.
Title: Chairman of the Board and
Chief Executive Officer
SICPA HOLDING S.A.
By: /s/Xxxxxxx Xxxx
Name: Xxxxxxx Xxxx
Title: Vice Chairman of the Board
By: /s/Xxxx X. Xxxxxxx
Name: Xxxx X. Xxxxxxx
Title: Chief Executive Officer
XXXXXXX X. XXXXXX, XX.
/s/Xxxxxxx X. Xxxxxx, Xx.
XXXX XxXXXXXXXX
/s/Xxxx XxXxxxxxxx
XXXXX XXXXXX
/s/Xxxxx Xxxxxx
XXXXXXX X. XXXX
/s/Xxxxxxx X. Xxxx
XXXXXXX XXXXXX
/s/Xxxxxxx Xxxxxx
EXHIBIT A
AMENDMENT TO SICPA-FLEX LICENSE AGREEMENT
FIRST AMENDMENT TO
LICENSE AND SUPPLY AGREEMENT
BY AND BETWEEN
FLEX PRODUCTS, INC.
AND
SICPA HOLDING S.A.
NOVEMBER 19, 1997
FIRST AMENDMENT TO
LICENSE AND SUPPLY AGREEMENT
FIRST AMENDMENT TO AGREEMENT dated November 19, 1997, by and between
Flex Products, Inc., a Delaware corporation ("Flex") and SICPA HOLDING
S.A., a Swiss corporation ("SICPA").
W I T N E S S E T H:
WHEREAS, Flex and SICPA are currently parties to a License and Supply
Agreement dated as of December 2, 1994 providing for the purchase and sale
of optically variable pigment ("OVP") (the "1994 Agreement");
WHEREAS, Flex and SICPA wish to amend the 1994 Agreement by means of
this First Amendment to the 1994 Agreement;
NOW, THEREFORE, in consideration of the mutual agreements hereinafter
set forth, the parties hereby agree as follows:
Section 1.1.1(b) shall be amended and replaced to read in full as
follows:
The parties agree to use the "STAC" referenced in Section 3.16
of the Settlement Agreement, dated November 19, 1997, by and between
SICPA, Flex, OCLI and the other parties named therein, during the
term of this Agreement, to implement all of the provisions of the
Memorandum of Alliance and the Joint Venture Agreement, copies of
which are attached hereto as Exhibits I and J, respectively. In the
event the STAC is discontinued the parties agree to re-establish the
Committee pursuant to the original provisions of Section 1.1.1(b)
prior to this Amendment. The parties agree that, notwithstanding the
existing terms of the Memorandum of Alliance and the Joint Venture
Agreement to the contrary, the Memorandum of Alliance and the Joint
Venture Agreement shall remain in effect during the Term of this
Agreement, and the parties shall execute such amendments thereto
which may be proper to extend the length of the respective terms of
the Memorandum of Alliance and the Joint Venture Agreement to conform
to length of the Term (as such term is defined in Section 13 below).
Section 3 of the 1994 Agreement shall be amended and replaced to read
in full as follows:
3. Changes to Price and Quantity. During the period from
March 1, 2000 through June 30, 2000 and the period March 1, 2005
through June 30, 2005, the parties shall discuss what the price and
quantity terms of this Agreement shall be for the period 11/1/2000
through 10/31/2005 and 11/1/2005 through 12/31/2009 respectively. In
the event that the parties cannot agree to any other provisions, the
price for OVP shall be the price set forth in Section 4, as adjusted
by Section 5.6 for periods after 10/31/2000, the minimum and maximum
quantities for the period 11/1/2000 through 10/31/2005 shall be the
same as for the year ended 10/31/2000, and the minimum and maximum
quantities for the period 11/1/2005 through 12/31/2009 shall be the
same as for the year ended 10/31/2005 (prorated on a month-for-month
basis for the period from 11/1/2009 to 12/31/2009).
Section 4.3 of the 1994 Agreement shall be amended and replaced to
read in full as follows:
4.3 Price Adjustment. The price per kilogram set shall be as
set forth below without adjustment pursuant to Sections 4.2 and 5.6
from November 1, 1997 through October 31, 2000:
Base Price/Kg (before
increases pursuant to
Purchases per Year Sections 4.2 and 5.6)
[CONFIDENTIAL TREATMENT REQUESTED]
The table set forth in 5.1(a) of the 1994 Agreement shall be amended
and replaced to read in full as follows:
5.1 Minimum Annual Purchases.
5.1(a) Minimum Purchases Necessary to Maintain Exclusive
License. The parties agree that SICPA shall purchase from Flex
minimum amounts of OVP set forth below for the periods indicated:
Year Minimum Maximum
[CONFIDENTIAL TREATMENT REQUESTED]
Section 14 of the 1994 Agreement shall be amended and replaced
to read in full as follows:
14. [CONFIDENTIAL TREATMENT REQUESTED]
Section 17 of the 1994 Agreement shall be amended and replaced to
read in full as follows:
17. Notices. All notices hereunder shall be in writing and
shall be deemed to have been given either (i) when received, if
delivered in person or transmitted by tested telex or facsimile, or
(ii) three business days after having been mailed by registered or
certified mail addressed as follows:
To Flex: Flex Products, Inc.
0000 Xxxxxxx Xxx
Xxxxx Xxxx, Xxxxxxxxxx 00000-0000
Attn: Xxxxxxx Xxxxxxxx
FAX: (000) 000-0000
To SICPA: SICPA Holding S.A.
Xxxxxx xx Xxxxxxxxxx 00
0000 Xxxxxx
Xxxxxxxxxxx
Attention: President
FAX: 00-00-000-0000
or to such changed address as such party may have fixed by notice
provided that any notice of change of address shall be deemed to have
been given when received.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment to be duly executed, and intends this Agreement to be effective,
as of the date first set forth above.
FLEX PRODUCTS, INC., a Delaware corporation
By /s/Xxxxxxx X. Xxxxxx, Xx.
SICPA HOLDING S.A., a Swiss corporation
By /s/Xxxxxxx X. Xxxx
By /s/Xxxx X. Xxxxxxx
EXHIBIT B
REGISTRATION RIGHTS
1. Demand Registrations
a. Requests for Registration.
(i) Subject to the terms and conditions hereof, at any time and
from time to time after the date of the first Public Offering of Flex
Common Stock SICPA may request in writing registration under the
Securities Act of 1933, as amended (the "Securities Act"), of all or
part of its Common Stock (any such requested registration is
hereinafter referred to as a "Demand Registration"). The number of
Demand Registrations SICPA shall be entitled to request shall be two
(2).
(ii) An SEC registration of Common Stock shall not be counted as
a Demand Registration for purposes of the limit in Section 1.a.(i) of
this Exhibit B until such registration has become effective (unless
such Demand Registration has not become effective due solely to the
fault of SICPA). Each request for a Demand Registration shall specify
the approximate number of shares of Common Stock requested to be
registered and the anticipated per share price range for such
offering.
(iii) If, in connection with any Demand Registration, the
managing underwriter(s) to Flex in connection with such SEC
registration advises Flex in writing that, in its opinion, the number
of shares of Common Stock to be registered would materially and
adversely affect the success or price of the offering, then the number
of shares to be included in such Demand Registration shall be reduced
to the number recommended by such managing underwriter(s). Any such
reduction shall be effected by (1) first reducing or eliminating the
number of shares of Common Stock (if any) requested to be included in
such registration by any shareholders of Flex other than SICPA and (2)
then, if and to the extent further reductions are necessary, by
reducing the number of shares of Common Stock requested to be included
therein by SICPA. If by such reduction the number of shares of Common
Stock included in such registration for SICPA represents less than
one-third of the total number of shares requested to be registered by
SICPA, then such registration shall not be counted against the number
of Demand Registrations to which SICPA is entitled under Section
1.a.(i) hereof.
b. Best Efforts. Flex shall promptly and diligently use its best
efforts to effect the registration under the Securities Act of the Common
Stock which Flex has been so requested to register by SICPA. Flex shall
use its best efforts to effect such registration on whichever registration
form the Board of Directors of Flex shall determine in its discretion is
appropriate in accordance with the intended method of disposition of such
shares; provided, however, that Flex shall use its best efforts to effect
such registration on SEC Form S-3 (or any successor form to Form S-3) if so
requested by SICPA unless (1) Form S-3 (or any successor form to Form S-3)
is not available for such offering, (2) the aggregate net offering price
(after deducting any underwriting discounts and commissions) of the shares
to be so registered is less than $1,000,000, or (3) Flex shall notify SICPA
that, in the good faith judgment of the Board of Directors of Flex, it
would not be in the best interests of Flex and its stockholders for a Form
S-3 registration to be effective at that time.
c. Restrictions on Demand Registrations. Flex's obligation to use
its best efforts to effect a Demand Registration pursuant to this Section 1
is subject to each of the following limitations, conditions, qualifications
and provisions:
(i) Flex will not be obligated to effect any Demand Registration
within any time period (not to exceed six months) requested by the
managing underwriter(s) of any previous registered offering of Common
Stock.
(ii) Flex shall be entitled to postpone the filing of any
registration statement otherwise required to be prepared and filed by
Flex pursuant to any Demand Registration for a reasonable period of
time, but not in excess of 90 days, if Flex determines in its
reasonable judgment and in good faith that the registration and
distribution of Common Stock under such Demand Registration would have
an adverse effect on any pending or proposed equity or debt financing,
acquisition, merger, consolidation, tender offer, corporate
reorganization or similar transaction involving Flex or would require
premature disclosure thereof. In such event, Flex shall promptly give
SICPA written notice of such determination, containing a general
statement of the reasons for such postponement. If Flex shall so
postpone the filing of a registration statement, SICPA shall have the
right to withdraw the Demand Registration by giving written notice to
Flex within twenty (20) days after receipt of the postponement notice.
In the event of such withdrawal, such Demand Registration shall not be
counted for purposes of determining the number of Demand Registrations
to which SICPA is entitled under Section 1.a.(i) of this Exhibit B.
(d) Selection of Underwriters. Flex shall have the right to select
the managing underwriter(s) for any Demand Registration, subject to SICPA's
approval, which approval will not be unreasonably withheld.
2. Piggyback Registrations
a. Right to Piggyback. Subject to the limitations set forth in
Section 2.b. of this Exhibit B, at any time and from time to time after the
date of the first Public Offering of Flex Common Stock whenever Flex
proposes to register under the Securities Act any Common Stock, Flex will
give prompt written notice to SICPA of its intention to effect such a
registration and will use its best efforts to include in such registration
all shares of Common Stock with respect to which SICPA gives Flex written
request for inclusion therein within fifteen (15) days after the receipt of
Flex's notice (any such requested inclusion is hereinafter referred to as a
"Piggyback Registration").
b. Restrictions on Piggyback Registrations. Flex's obligation to
use its best efforts to effect any registration pursuant to this Section 2
is subject to each of the following limitations, conditions, qualifications
and provisions:
(i) If, at any time before or after giving written notice
pursuant to this Section 2 of its intention to register shares of
Common Stock and prior to the effective date of the registration
statement filed in connection with such registration, Flex shall
determine for any reason not to proceed with such registration, Flex
may give written notice of such determination to SICPA and thereupon
shall be relieved of its obligation to use its best efforts to
register any shares of Common Stock in connection with such
registration, but without prejudice to the rights of SICPA to request
that such registration be effected as a Demand Registration pursuant
to the terms and conditions of Section 1.
(ii) If, in the written opinion of the managing underwriter(s) of
Flex in connection with any registration pursuant to this Section 2,
the distribution of the additional securities requested to be included
in such registration by SICPA ("Piggyback Shares") would materially
and adversely affect the success or the price of the offering, then
the number of shares to be included in such registration shall be
reduced to the number recommended by such managing underwriter(s).
Any such reduction shall be effected by (1) first reducing or
eliminating the number of shares of Common Stock (if any) requested to
be included in such registration by any shareholders of Flex other
than SICPA, and (2) then, if and to the extent further reductions are
necessary, by reducing the number of Piggyback Shares.
(iii) Flex shall not be obligated to effect any Piggyback
Registration of Common Stock under this Section 2 incidental to the
registration of any shares of Common Stock (A) filed on SEC Form S-4
or any successor form thereto, (B) in connection with any merger,
consolidation, acquisition, exchange offer, recapitalization or other
reorganization of Flex or (C) in connection with any offering of
securities made solely to stockholders of Flex.
c. Selection of Underwriters. Flex shall have the right to select
the managing underwriter(s) for any Piggyback Registration, which selection
will be made by Flex in its sole discretion.
3. Holdback Agreements
SICPA agrees not to effect any public sale or distribution of Common
Stock during the seven (7) days prior to, and the ninety (90) day period
beginning on, the effective date of any Demand Registration or any
Piggyback Registration, as the case may be (except as part of such
registration), unless Flex and the underwriter(s) managing the registered
offering otherwise agree to a shorter period.
4. Registration Procedures
a. Flex's Efforts. Whenever SICPA requests that its shares of
Common Stock be registered pursuant to this Agreement, Flex will use its
best efforts to effect the registration and the sale of such shares in
accordance with the intended method of disposition thereof, and pursuant
thereto Flex will as expeditiously as possible:
(i) prepare and file with the SEC a registration statement with
respect to such shares of Common Stock and use its best efforts to
cause such registration statement to become effective (provided that,
before filing a registration statement or prospectus or any amendments
or supplements thereto, Flex will furnish to the counsel of SICPA such
registration statement and copies of all such other documents proposed
to be filed);
(ii) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective for a period of not less than ninety (90) days,
and comply with the provisions of the Securities Act with respect to
the disposition of all shares of Common Stock covered by such
registration statement during such period and until the earlier of
such time as all of such shares of Common Stock have been disposed of
in accordance with the intended methods of disposition by SICPA set
forth in such registration statement or the expiration of sixty (60)
days after such registration statement becomes effective, SICPA being
hereby required promptly to inform Flex in writing when the
distribution of such securities pursuant to such registration
statement has been completed);
(iii) furnish to SICPA such number of conformed copies of
such registration statement, each amendment and supplement thereto,
the prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as SICPA may
reasonably request in order to facilitate the disposition of the
shares of Common Stock owned by SICPA;
(iv) use its best efforts to register or qualify such shares of
Common Stock under such other securities or blue sky laws of such
jurisdictions as SICPA may reasonably request and do any and all other
acts and things which may be reasonably necessary or advisable to
enable SICPA to consummate the disposition of Common Stock in such
jurisdictions (provided that Flex will not be required to (A) qualify
generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this subparagraph, (B)
subject itself to taxation in any such jurisdiction or (C) consent to
general service of process in any such jurisdiction);
(v) use its best efforts to list all such shares of Common Stock
on each securities exchange or quotation service on which similar
securities issued by Flex are then listed, if any;
(vi) provide a transfer agent and registrar for all such shares
of Common Stock not later than the effective date of such registration
statement;
(vii) enter into such customary agreements (including
underwriting agreements in customary form) and take all such other
actions as SICPA may reasonably request in order to expedite or
facilitate the disposition of such shares of Common Stock (including,
without limitation, effecting a stock split or a combination of shares
applicable to all shareholders of Flex equally);
(viii) make available for inspection by SICPA, any
underwriter(s) participating in any disposition pursuant to such
registration statement, and any attorney, accountant or other agent
retained by SICPA or the underwriter(s), all financial and other
records, pertinent corporate documents and properties of Flex, and
cause Flex's officers, directors, employees and independent
accountants to supply all information reasonably requested by SICPA or
the underwriter(s), or any attorney, accountant or agent of SICPA or
the underwriter(s) in connection with such registration statement;
(ix) otherwise use its best efforts to comply with all applicable
rules and regulations of the SEC, and make available to its security
holders, as soon as reasonably practicable, an earnings statement
covering the period of at least twelve months beginning with the first
day of Flex's first full calendar quarter after the effective date of
the registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act;
(x) in the event of the issuance of any stop order suspending
the effectiveness of a registration statement, or of any order
suspending or preventing the use of any related prospectus or
suspending the qualification of any shares of Common Stock included in
such registration statement for sale in any jurisdiction, Flex will
use its best efforts promptly to obtain the withdrawal of such order;
(xi) obtain a cold comfort letter from Flex's independent public
accountants in customary form and covering such matters of the type
customarily covered by cold comfort letters as SICPA may reasonably
request; and
(xii) promptly notify SICPA: (A) when any registration
statement, any pre-effective amendment, the prospectus or any
prospectus supplement related thereto or post-effective amendment to
such registration statement has been filed, and, with respect to such
registration statement or any post-effective amendment, when the same
has become effective; (B) of any request by the SEC for amendments or
supplements to such registration statement or the prospectus related
thereto or for additional information; (C) of the issuance by the SEC
of any stop order suspending the effectiveness of such registration
statement or the initiation of any proceedings for that purpose; (D)
of the receipt by Flex of any notification with respect to the
suspension of the qualification of any of the shares of Common Stock
for sale under the securities or blue sky laws of any jurisdiction or
the initiation of any proceeding for such purpose; and (E) of the
existence of any fact of which Flex becomes aware which results in
such registration statement, the prospectus related thereto or any
document incorporated therein by reference containing an untrue
statement of a material fact or omitting to state a material fact
required to be stated therein or necessary to make any statement
therein in light of the circumstances under which they were made not
misleading; and, in the case of the notification relating to an event
described in clause (E) hereof, Flex shall promptly prepare and
furnish to SICPA and each underwriter, if any, a reasonable number of
copies of a prospectus supplemented or amended so that, as thereafter
delivered to the purchasers of any such Common Stock, such prospectus
shall not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein in the light of the circumstances under
which they were made not misleading.
b. SICPA's Efforts. SICPA shall cooperate with Flex in the
registration of any shares of Common Stock owned by SICPA by (1) furnishing
promptly to Flex such information regarding SICPA, the distribution of the
shares to be registered and any other information that Flex may reasonably
request in connection with the registration and (2) completing and
executing all questionnaires, powers of attorney, underwriting agreements
and other documents reasonably required in connection with the
registration. SICPA hereby agrees that, upon receipt of any notice of the
happening of: (x) any event of the kind described in clause (C) of Section
4.a.(xii), SICPA will discontinue its disposition of shares of Common Stock
pursuant to the registration statement relating to such shares until the
stop order shall have been lifted or rescinded; (y) any event of the kind
described in clause (D) of Section 4.a.(xii), SICPA will discontinue its
disposition of shares of Common Stock pursuant to the registration
statement relating to such shares in the jurisdiction with respect to which
the suspension of the qualification of any of the shares for sale has
occurred, until the suspension shall have been lifted or rescinded; and (z)
any event of the kind described in clause (E) of Section 4.a.(xii), SICPA
will discontinue its disposition of shares of Common Stock pursuant to the
registration statement relating to such shares until the receipt by SICPA
of the copies of the supplemented or amended prospectus contemplated by
Section 4.a.(xii) and, if so directed by Flex, will deliver to Flex (at
Flex's expense) all copies, other than permanent file copies, then in the
possession of SICPA of the prospectus relating to such shares of Common
Stock. In the case of a Demand Registration, if the disposition by SICPA
of its shares of Common Stock is discontinued pursuant to the foregoing
sentence, unless Flex extends the period of effectiveness of the
registration statement by the number of days during the period from and
including the date of the giving of such notice to and including the date
when either (I) the stop order or suspension of qualification shall have
been lifted or rescinded or (II) SICPA shall have received copies of the
supplemented or amended prospectus contemplated by Section 4.a.(xii), as
the case may be, and unless SICPA continues to participate in such
registration as extended, then SICPA shall be entitled to another Demand
Registration and such discontinued or extended registration shall not be
counted against the number of Demand Registrations to which SICPA is
entitled under Section 1.a.(i) hereof.
5. Registration Expenses
For purposes of this Exhibit B, "Registration Expenses" shall mean all
expenses incident to Flex's performance of or compliance with this Exhibit
B, including without limitation, (i) all registration and filing fees, (ii)
fees and expenses of compliance with securities or blue sky laws, (iii)
printing expenses, messenger and delivery expenses, (iv) fees for listing
the securities to be registered on securities exchanges or on the National
Association of Securities Dealers automated quotation system, (v) fees and
disbursements of counsel for Flex and all independent certified public
accountants, underwriters and other persons retained by Flex, and
(vi) underwriting discounts or commissions. All Registration Expenses will
be borne by Flex, except that (i) any underwriting discounts or commissions
with respect to shares of Common Stock included either in any Demand
Registration or in any Piggyback Registration will be borne by and
allocated to SICPA in proportion to its shares so registered, (ii) SICPA
shall bear the expense of the fees and disbursements of any counsel
retained solely by SICPA and (iii) in the case of any Demand Registration,
SICPA shall bear a portion of the Registration Expenses (other than any
Registration Expenses of the type described in clauses (i) and (ii), which
are to be determined in accordance with clauses (i) and (ii)), which
portion shall be allocated to SICPA in proportion to its shares so
registered.
6. Indemnification
a. By Flex. Flex agrees to indemnify and hold harmless, to the
fullest extent permitted by law, SICPA and each of SICPA's officers and
directors and each person, if any, who controls SICPA within the meaning of
the Securities Act (each such person being hereinafter referred to as an
"Indemnified Party"), against any losses, claims, damages, liabilities and
expenses, joint or several, to which such Indemnified Party may become
subject under the Securities Act or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions or proceedings in
respect thereof) arise out of or are based upon (i) any untrue statement of
any material fact contained in any registration statement under which such
shares of Common Stock were registered under the Securities Act, any
preliminary prospectus or final prospectus included therein, or any
amendment thereof or supplement thereto, or any document incorporated by
reference therein, or (ii) any omission to state therein a material fact
required to be stated therein or necessary to make the statements therein
not misleading, and Flex will reimburse such Indemnified Party for any
legal or other expenses reasonably incurred by it, as and when incurred, in
connection with investigating or defending any such loss, claim, liability,
action or proceeding; provided, however, that Flex shall not be liable in
any such case to the extent that any such loss, claim, damage, liability
(or action or proceeding in respect thereof) or expense arises out of or is
based upon or is caused by (A) an untrue statement or alleged untrue
statement or omission or alleged omission made in such registration
statement, any such preliminary prospectus, final prospectus, amendment or
supplement in reliance upon and in conformity with written information
furnished to Flex by or on behalf of such Indemnified Party expressly for
use in the preparation thereof, or (B) such Indemnified Party's failure to
deliver a copy of such registration statement, prospectus, amendment or
supplement after Flex has furnished such Indemnified Party with such number
of copies of the same as such Indemnified Party may reasonably request.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of such Indemnified Party and shall
survive the transfer of such securities by such Indemnified Party.
b. By SICPA. Flex may require, as a condition to including any of
SICPA's shares of Common Stock in any registration statement filed pursuant
to Section 1 or 2 hereof, that Flex shall have received an undertaking
reasonably satisfactory to it from SICPA to indemnify and hold harmless (in
the same manner and to the same extent as set forth in paragraph (a) of
this Section 6) Flex, each director of Flex, each person named as or about
to become a director of Flex, each officer of Flex and each other person,
if any, who controls Flex within the meaning of the Securities Act, with
respect to any statement in or omission from such registration statement,
any preliminary prospectus or final prospectus included therein, or any
amendment thereof or supplement thereto, if such statement or omission was
made in reliance upon and in conformity with written information expressly
furnished to Flex by or on behalf of SICPA for use in the preparation of
such registration statement, preliminary prospectus, final prospectus,
amendment or supplement; provided, however, that such indemnity shall be
limited to the amount of the net proceeds received by SICPA from the sale
of shares of Common Stock pursuant to such registration statement, except
in the case of any material misstatement or omission knowingly and
willfully made by SICPA in written information expressly furnished to Flex
or the underwriters by or on behalf of SICPA for use in the preparation of
such registration statement, preliminary prospectus, final prospectus,
amendment or supplement, as to which no such limitation shall apply. Such
indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of Flex or any such director, officer or
controlling person and shall survive the transfer of such securities by
SICPA.
c. Procedural Matters. A party from whom indemnity shall be sought
pursuant to the provisions of this Section 6 shall not be liable with
respect to such indemnity under paragraph (a) or (b) of this Section 6
unless the indemnified party shall have given written notice to such
indemnifying party of the nature of such claim promptly after receipt by
such indemnified party of notice of the commencement of any action or
proceeding involving such claim; provided, however, that the failure of any
indemnified party to give notice as provided herein shall not relieve such
indemnifying party from any liability which it may have to such indemnified
party (X) otherwise than on account of this Section 6 or (Y) except to the
extent that the failure to give such notice shall have been materially
prejudicial to such indemnifying party. Unless in the reasonable judgment
of the indemnified party a conflict of interest between such indemnified
and indemnifying parties may exist with respect to such claim, the
indemnifying party shall be entitled to participate in and to assume the
defense of any such claim, jointly with any other indemnifying party
similarly notified, to the extent that it may wish, with counsel reasonably
satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof. In the case
of conflict of interest as set forth above, the indemnifying party shall
pay the reasonable fees and expenses of one counsel for all parties
indemnified by such indemnifying party with respect to such claim. In no
event will the indemnifying party be subject to any liability for any
settlement made by any indemnified party without its consent.
7. Participation in Underwritten Registrations
SICPA may not participate in any registration hereunder which is
underwritten unless SICPA (a) agrees to sell its securities on the basis
provided in any underwriting arrangements approved by the person or persons
entitled to approve such arrangements and (b) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements
and other documents required under the terms of such underwriting
arrangements.
8. Definitions
Unless otherwise defined herein, all capitalized terms shall have the
meaning ascribed thereto in the Settlement Agreement to which these
Registration Rights are an Exhibit.
9. Assignment
SICPA may assign its rights and duties hereunder to any person who
acquires from SICPA shares of Common Stock.
EXHIBIT D
BY-LAW AMENDMENT
Audit Committee. The Board of Directors shall appoint an Audit
Committee, the responsibilities of which shall be (i) to review with
management and the corporation's independent public accountant the scope of
services required by its audit, significant accounting policies, and audit
conclusions regarding significant accounting estimates, (ii) to review with
management and the corporation's independent public accountant their
assessments of the adequacy of internal controls, and the resolution of
identified material weaknesses and reportable conditions in internal
controls, including the prevention or detection of management override or
compromise of the internal control system, (iii) to review with management
and the corporation's independent public accountant the institution's
compliance with applicable laws, (iv) to discuss with management the
selection and termination of the corporation's independent public
accountant and any significant disagreements between the accountants and
management, (v) to oversee the internal audit function, and (vi) such other
duties as the Board of Directors may designate. The Audit Committee shall
maintain minutes and other relevant records of its meetings, shall meet at
any time upon the request of any member of the Board of Directors and shall
make a report to the full Board of Directors at the meeting of the Board of
Directors next succeeding any meeting of the Audit Committee. The
composition of the Audit Committee shall be one director designated by
SICPA, one director designated by OCLI, and one member of senior management
of the corporation who is not otherwise employed by either SICPA or OCLI.
This provision may not be amended unless and until the corporation
consummates an underwritten public offering of its common stock registered
under the Securities Act of 1933.
EXHIBIT B
REGISTRATION RIGHTS
1. Demand Registrations
a. Requests for Registration.
(i) Subject to the terms and conditions hereof, at any time and
from time to time after the date of the first Public Offering of Flex
Common Stock SICPA may request in writing registration under the
Securities Act of 1933, as amended (the "Securities Act"), of all or
part of its Common Stock (any such requested registration is
hereinafter referred to as a "Demand Registration"). The number of
Demand Registrations SICPA shall be entitled to request shall be two
(2).
(ii) An SEC registration of Common Stock shall not be counted as
a Demand Registration for purposes of the limit in Section 1.a.(i) of
this Exhibit B until such registration has become effective (unless
such Demand Registration has not become effective due solely to the
fault of SICPA). Each request for a Demand Registration shall specify
the approximate number of shares of Common Stock requested to be
registered and the anticipated per share price range for such
offering.
(iii) If, in connection with any Demand Registration, the
managing underwriter(s) to Flex in connection with such SEC
registration advises Flex in writing that, in its opinion, the number
of shares of Common Stock to be registered would materially and
adversely affect the success or price of the offering, then the number
of shares to be included in such Demand Registration shall be reduced
to the number recommended by such managing underwriter(s). Any such
reduction shall be effected by (1) first reducing or eliminating the
number of shares of Common Stock (if any) requested to be included in
such registration by any shareholders of Flex other than SICPA and (2)
then, if and to the extent further reductions are necessary, by
reducing the number of shares of Common Stock requested to be included
therein by SICPA. If by such reduction the number of shares of Common
Stock included in such registration for SICPA represents less than
one-third of the total number of shares requested to be registered by
SICPA, then such registration shall not be counted against the number
of Demand Registrations to which SICPA is entitled under Section
1.a.(i) hereof.
b. Best Efforts. Flex shall promptly and diligently use its best
efforts to effect the registration under the Securities Act of the Common
Stock which Flex has been so requested to register by SICPA. Flex shall
use its best efforts to effect such registration on whichever registration
form the Board of Directors of Flex shall determine in its discretion is
appropriate in accordance with the intended method of disposition of such
shares; provided, however, that Flex shall use its best efforts to effect
such registration on SEC Form S-3 (or any successor form to Form S-3) if so
requested by SICPA unless (1) Form S-3 (or any successor form to Form S-3)
is not available for such offering, (2) the aggregate net offering price
(after deducting any underwriting discounts and commissions) of the shares
to be so registered is less than $1,000,000, or (3) Flex shall notify SICPA
that, in the good faith judgment of the Board of Directors of Flex, it
would not be in the best interests of Flex and its stockholders for a Form
S-3 registration to be effective at that time.
c. Restrictions on Demand Registrations. Flex's obligation to use
its best efforts to effect a Demand Registration pursuant to this Section 1
is subject to each of the following limitations, conditions, qualifications
and provisions:
(i) Flex will not be obligated to effect any Demand Registration
within any time period (not to exceed six months) requested by the
managing underwriter(s) of any previous registered offering of Common
Stock.
(ii) Flex shall be entitled to postpone the filing of any
registration statement otherwise required to be prepared and filed by
Flex pursuant to any Demand Registration for a reasonable period of
time, but not in excess of 90 days, if Flex determines in its
reasonable judgment and in good faith that the registration and
distribution of Common Stock under such Demand Registration would have
an adverse effect on any pending or proposed equity or debt financing,
acquisition, merger, consolidation, tender offer, corporate
reorganization or similar transaction involving Flex or would require
premature disclosure thereof. In such event, Flex shall promptly give
SICPA written notice of such determination, containing a general
statement of the reasons for such postponement. If Flex shall so
postpone the filing of a registration statement, SICPA shall have the
right to withdraw the Demand Registration by giving written notice to
Flex within twenty (20) days after receipt of the postponement notice.
In the event of such withdrawal, such Demand Registration shall not be
counted for purposes of determining the number of Demand Registrations
to which SICPA is entitled under Section 1.a.(i) of this Exhibit B.
(d) Selection of Underwriters. Flex shall have the right to select
the managing underwriter(s) for any Demand Registration, subject to SICPA's
approval, which approval will not be unreasonably withheld.
2. Piggyback Registrations
a. Right to Piggyback. Subject to the limitations set forth in
Section 2.b. of this Exhibit B, at any time and from time to time after the
date of the first Public Offering of Flex Common Stock whenever Flex
proposes to register under the Securities Act any Common Stock, Flex will
give prompt written notice to SICPA of its intention to effect such a
registration and will use its best efforts to include in such registration
all shares of Common Stock with respect to which SICPA gives Flex written
request for inclusion therein within fifteen (15) days after the receipt of
Flex's notice (any such requested inclusion is hereinafter referred to as a
"Piggyback Registration").
b. Restrictions on Piggyback Registrations. Flex's obligation to use
its best efforts to effect any registration pursuant to this Section 2
is subject to each of the following limitations, conditions, qualifications
and provisions:
(i) If, at any time before or after giving written notice
pursuant to this Section 2 of its intention to register shares of
Common Stock and prior to the effective date of the registration
statement filed in connection with such registration, Flex shall
determine for any reason not to proceed with such registration, Flex
may give written notice of such determination to SICPA and thereupon
shall be relieved of its obligation to use its best efforts to
register any shares of Common Stock in connection with such
registration, but without prejudice to the rights of SICPA to request
that such registration be effected as a Demand Registration pursuant
to the terms and conditions of Section 1.
(ii) If, in the written opinion of the managing underwriter(s) of
Flex in connection with any registration pursuant to this Section 2,
the distribution of the additional securities requested to be included
in such registration by SICPA ("Piggyback Shares") would materially
and adversely affect the success or the price of the offering, then
the number of shares to be included in such registration shall be
reduced to the number recommended by such managing underwriter(s).
Any such reduction shall be effected by (1) first reducing or
eliminating the number of shares of Common Stock (if any) requested to
be included in such registration by any shareholders of Flex other
than SICPA, and (2) then, if and to the extent further reductions are
necessary, by reducing the number of Piggyback Shares.
(iii) Flex shall not be obligated to effect any Piggyback
Registration of Common Stock under this Section 2 incidental to the
registration of any shares of Common Stock (A) filed on SEC Form S-4
or any successor form thereto, (B) in connection with any merger,
consolidation, acquisition, exchange offer, recapitalization or other
reorganization of Flex or (C) in connection with any offering of
securities made solely to stockholders of Flex.
c. Selection of Underwriters. Flex shall have the right to select
the managing underwriter(s) for any Piggyback Registration, which selection
will be made by Flex in its sole discretion.
3. Holdback Agreements
SICPA agrees not to effect any public sale or distribution of Common
Stock during the seven (7) days prior to, and the ninety (90) day period
beginning on, the effective date of any Demand Registration or any
Piggyback Registration, as the case may be (except as part of such
registration), unless Flex and the underwriter(s) managing the registered
offering otherwise agree to a shorter period.
4. Registration Procedures
a. Flex's Efforts. Whenever SICPA requests that its shares of
Common Stock be registered pursuant to this Agreement, Flex will use its
best efforts to effect the registration and the sale of such shares in
accordance with the intended method of disposition thereof, and pursuant
thereto Flex will as expeditiously as possible:
(i) prepare and file with the SEC a registration statement with
respect to such shares of Common Stock and use its best efforts to
cause such registration statement to become effective (provided that,
before filing a registration statement or prospectus or any amendments
or supplements thereto, Flex will furnish to the counsel of SICPA such
registration statement and copies of all such other documents proposed
to be filed);
(ii) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective for a period of not less than ninety (90) days,
and comply with the provisions of the Securities Act with respect to
the disposition of all shares of Common Stock covered by such
registration statement during such period and until the earlier of
such time as all of such shares of Common Stock have been disposed of
in accordance with the intended methods of disposition by SICPA set
forth in such registration statement or the expiration of sixty (60)
days after such registration statement becomes effective, SICPA being
hereby required promptly to inform Flex in writing when the
distribution of such securities pursuant to such registration
statement has been completed);
(iii) furnish to SICPA such number of conformed copies of
such registration statement, each amendment and supplement thereto,
the prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as SICPA may
reasonably request in order to facilitate the disposition of the
shares of Common Stock owned by SICPA;
(iv) use its best efforts to register or qualify such shares of
Common Stock under such other securities or blue sky laws of such
jurisdictions as SICPA may reasonably request and do any and all other
acts and things which may be reasonably necessary or advisable to
enable SICPA to consummate the disposition of Common Stock in such
jurisdictions (provided that Flex will not be required to (A) qualify
generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this subparagraph, (B)
subject itself to taxation in any such jurisdiction or (C) consent to
general service of process in any such jurisdiction);
(v) use its best efforts to list all such shares of Common Stock
on each securities exchange or quotation service on which similar
securities issued by Flex are then listed, if any;
(vi) provide a transfer agent and registrar for all such shares
of Common Stock not later than the effective date of such registration
statement;
(vii) enter into such customary agreements (including
underwriting agreements in customary form) and take all such other
actions as SICPA may reasonably request in order to expedite or
facilitate the disposition of such shares of Common Stock (including,
without limitation, effecting a stock split or a combination of shares
applicable to all shareholders of Flex equally);
(viii) make available for inspection by SICPA, any
underwriter(s) participating in any disposition pursuant to such
registration statement, and any attorney, accountant or other agent
retained by SICPA or the underwriter(s), all financial and other
records, pertinent corporate documents and properties of Flex, and
cause Flex's officers, directors, employees and independent
accountants to supply all information reasonably requested by SICPA or
the underwriter(s), or any attorney, accountant or agent of SICPA or
the underwriter(s) in connection with such registration statement;
(ix) otherwise use its best efforts to comply with all applicable
rules and regulations of the SEC, and make available to its security
holders, as soon as reasonably practicable, an earnings statement
covering the period of at least twelve months beginning with the first
day of Flex's first full calendar quarter after the effective date of
the registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act;
(x) in the event of the issuance of any stop order suspending
the effectiveness of a registration statement, or of any order
suspending or preventing the use of any related prospectus or
suspending the qualification of any shares of Common Stock included in
such registration statement for sale in any jurisdiction, Flex will
use its best efforts promptly to obtain the withdrawal of such order;
(xi) obtain a cold comfort letter from Flex's independent public
accountants in customary form and covering such matters of the type
customarily covered by cold comfort letters as SICPA may reasonably
request; and
(xii) promptly notify SICPA: (A) when any registration
statement, any pre-effective amendment, the prospectus or any
prospectus supplement related thereto or post-effective amendment to
such registration statement has been filed, and, with respect to such
registration statement or any post-effective amendment, when the same
has become effective; (B) of any request by the SEC for amendments or
supplements to such registration statement or the prospectus related
thereto or for additional information; (C) of the issuance by the SEC
of any stop order suspending the effectiveness of such registration
statement or the initiation of any proceedings for that purpose; (D)
of the receipt by Flex of any notification with respect to the
suspension of the qualification of any of the shares of Common Stock
for sale under the securities or blue sky laws of any jurisdiction or
the initiation of any proceeding for such purpose; and (E) of the
existence of any fact of which Flex becomes aware which results in
such registration statement, the prospectus related thereto or any
document incorporated therein by reference containing an untrue
statement of a material fact or omitting to state a material fact
required to be stated therein or necessary to make any statement
therein in light of the circumstances under which they were made not
misleading; and, in the case of the notification relating to an event
described in clause (E) hereof, Flex shall promptly prepare and
furnish to SICPA and each underwriter, if any, a reasonable number of
copies of a prospectus supplemented or amended so that, as thereafter
delivered to the purchasers of any such Common Stock, such prospectus
shall not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein in the light of the circumstances under
which they were made not misleading.
b. SICPA's Efforts. SICPA shall cooperate with Flex in the
registration of any shares of Common Stock owned by SICPA by (1) furnishing
promptly to Flex such information regarding SICPA, the distribution of the
shares to be registered and any other information that Flex may reasonably
request in connection with the registration and (2) completing and
executing all questionnaires, powers of attorney, underwriting agreements
and other documents reasonably required in connection with the
registration. SICPA hereby agrees that, upon receipt of any notice of the
happening of: (x) any event of the kind described in clause (C) of Section
4.a.(xii), SICPA will discontinue its disposition of shares of Common Stock
pursuant to the registration statement relating to such shares until the
stop order shall have been lifted or rescinded; (y) any event of the kind
described in clause (D) of Section 4.a.(xii), SICPA will discontinue its
disposition of shares of Common Stock pursuant to the registration
statement relating to such shares in the jurisdiction with respect to which
the suspension of the qualification of any of the shares for sale has
occurred, until the suspension shall have been lifted or rescinded; and (z)
any event of the kind described in clause (E) of Section 4.a.(xii), SICPA
will discontinue its disposition of shares of Common Stock pursuant to the
registration statement relating to such shares until the receipt by SICPA
of the copies of the supplemented or amended prospectus contemplated by
Section 4.a.(xii) and, if so directed by Flex, will deliver to Flex (at
Flex's expense) all copies, other than permanent file copies, then in the
possession of SICPA of the prospectus relating to such shares of Common
Stock. In the case of a Demand Registration, if the disposition by SICPA
of its shares of Common Stock is discontinued pursuant to the foregoing
sentence, unless Flex extends the period of effectiveness of the
registration statement by the number of days during the period from and
including the date of the giving of such notice to and including the date
when either (I) the stop order or suspension of qualification shall have
been lifted or rescinded or (II) SICPA shall have received copies of the
supplemented or amended prospectus contemplated by Section 4.a.(xii), as
the case may be, and unless SICPA continues to participate in such
registration as extended, then SICPA shall be entitled to another Demand
Registration and such discontinued or extended registration shall not be
counted against the number of Demand Registrations to which SICPA is
entitled under Section 1.a.(i) hereof.
5. Registration Expenses
For purposes of this Exhibit B, "Registration Expenses" shall mean all
expenses incident to Flex's performance of or compliance with this Exhibit
B, including without limitation, (i) all registration and filing fees, (ii)
fees and expenses of compliance with securities or blue sky laws, (iii)
printing expenses, messenger and delivery expenses, (iv) fees for listing
the securities to be registered on securities exchanges or on the National
Association of Securities Dealers automated quotation system, (v) fees and
disbursements of counsel for Flex and all independent certified public
accountants, underwriters and other persons retained by Flex, and
(vi) underwriting discounts or commissions. All Registration Expenses will
be borne by Flex, except that (i) any underwriting discounts or commissions
with respect to shares of Common Stock included either in any Demand
Registration or in any Piggyback Registration will be borne by and
allocated to SICPA in proportion to its shares so registered, (ii) SICPA
shall bear the expense of the fees and disbursements of any counsel
retained solely by SICPA and (iii) in the case of any Demand Registration,
SICPA shall bear a portion of the Registration Expenses (other than any
Registration Expenses of the type described in clauses (i) and (ii), which
are to be determined in accordance with clauses (i) and (ii)), which
portion shall be allocated to SICPA in proportion to its shares so
registered.
6. Indemnification
a. By Flex. Flex agrees to indemnify and hold harmless, to the
fullest extent permitted by law, SICPA and each of SICPA's officers and
directors and each person, if any, who controls SICPA within the meaning of
the Securities Act (each such person being hereinafter referred to as an
"Indemnified Party"), against any losses, claims, damages, liabilities and
expenses, joint or several, to which such Indemnified Party may become
subject under the Securities Act or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions or proceedings in
respect thereof) arise out of or are based upon (i) any untrue statement of
any material fact contained in any registration statement under which such
shares of Common Stock were registered under the Securities Act, any
preliminary prospectus or final prospectus included therein, or any
amendment thereof or supplement thereto, or any document incorporated by
reference therein, or (ii) any omission to state therein a material fact
required to be stated therein or necessary to make the statements therein
not misleading, and Flex will reimburse such Indemnified Party for any
legal or other expenses reasonably incurred by it, as and when incurred, in
connection with investigating or defending any such loss, claim, liability,
action or proceeding; provided, however, that Flex shall not be liable in
any such case to the extent that any such loss, claim, damage, liability
(or action or proceeding in respect thereof) or expense arises out of or is
based upon or is caused by (A) an untrue statement or alleged untrue
statement or omission or alleged omission made in such registration
statement, any such preliminary prospectus, final prospectus, amendment or
supplement in reliance upon and in conformity with written information
furnished to Flex by or on behalf of such Indemnified Party expressly for
use in the preparation thereof, or (B) such Indemnified Party's failure to
deliver a copy of such registration statement, prospectus, amendment or
supplement after Flex has furnished such Indemnified Party with such number
of copies of the same as such Indemnified Party may reasonably request.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of such Indemnified Party and shall
survive the transfer of such securities by such Indemnified Party.
b. By SICPA. Flex may require, as a condition to including any of
SICPA's shares of Common Stock in any registration statement filed pursuant
to Section 1 or 2 hereof, that Flex shall have received an undertaking
reasonably satisfactory to it from SICPA to indemnify and hold harmless (in
the same manner and to the same extent as set forth in paragraph (a) of
this Section 6) Flex, each director of Flex, each person named as or about
to become a director of Flex, each officer of Flex and each other person,
if any, who controls Flex within the meaning of the Securities Act, with
respect to any statement in or omission from such registration statement,
any preliminary prospectus or final prospectus included therein, or any
amendment thereof or supplement thereto, if such statement or omission was
made in reliance upon and in conformity with written information expressly
furnished to Flex by or on behalf of SICPA for use in the preparation of
such registration statement, preliminary prospectus, final prospectus,
amendment or supplement; provided, however, that such indemnity shall be
limited to the amount of the net proceeds received by SICPA from the sale
of shares of Common Stock pursuant to such registration statement, except
in the case of any material misstatement or omission knowingly and
willfully made by SICPA in written information expressly furnished to Flex
or the underwriters by or on behalf of SICPA for use in the preparation of
such registration statement, preliminary prospectus, final prospectus,
amendment or supplement, as to which no such limitation shall apply. Such
indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of Flex or any such director, officer or
controlling person and shall survive the transfer of such securities by
SICPA.
c. Procedural Matters. A party from whom indemnity shall be sought
pursuant to the provisions of this Section 6 shall not be liable with
respect to such indemnity under paragraph (a) or (b) of this Section 6
unless the indemnified party shall have given written notice to such
indemnifying party of the nature of such claim promptly after receipt by
such indemnified party of notice of the commencement of any action or
proceeding involving such claim; provided, however, that the failure of any
indemnified party to give notice as provided herein shall not relieve such
indemnifying party from any liability which it may have to such indemnified
party (X) otherwise than on account of this Section 6 or (Y) except to the
extent that the failure to give such notice shall have been materially
prejudicial to such indemnifying party. Unless in the reasonable judgment
of the indemnified party a conflict of interest between such indemnified
and indemnifying parties may exist with respect to such claim, the
indemnifying party shall be entitled to participate in and to assume the
defense of any such claim, jointly with any other indemnifying party
similarly notified, to the extent that it may wish, with counsel reasonably
satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof. In the case
of conflict of interest as set forth above, the indemnifying party shall
pay the reasonable fees and expenses of one counsel for all parties
indemnified by such indemnifying party with respect to such claim. In no
event will the indemnifying party be subject to any liability for any
settlement made by any indemnified party without its consent.
7. Participation in Underwritten Registrations
SICPA may not participate in any registration hereunder which is
underwritten unless SICPA (a) agrees to sell its securities on the basis
provided in any underwriting arrangements approved by the person or persons
entitled to approve such arrangements and (b) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements
and other documents required under the terms of such underwriting
arrangements.
8. Definitions
Unless otherwise defined herein, all capitalized terms shall have the
meaning ascribed thereto in the Settlement Agreement to which these
Registration Rights are an Exhibit.
9. Assignment
SICPA may assign its rights and duties hereunder to any person who
acquires from SICPA shares of Common Stock.
EXHIBIT A
FIRST AMENDMENT TO
LICENSE AND SUPPLY AGREEMENT
BY AND BETWEEN
FLEX PRODUCTS, INC.
AND
SICPA HOLDING S.A.
NOVEMBER 19, 1997
FIRST AMENDMENT TO
LICENSE AND SUPPLY AGREEMENT
FIRST AMENDMENT TO AGREEMENT dated November 19, 1997, by and between
Flex Products, Inc., a Delaware corporation ("Flex") and SICPA HOLDING
S.A., a Swiss corporation ("SICPA").
W I T N E S S E T H:
WHEREAS, Flex and SICPA are currently parties to a License and Supply
Agreement dated as of December 2, 1994 providing for the purchase and sale
of optically variable pigment ("OVP") (the "1994 Agreement");
WHEREAS, Flex and SICPA wish to amend the 1994 Agreement by means of
this First Amendment to the 1994 Agreement;
NOW, THEREFORE, in consideration of the mutual agreements hereinafter
set forth, the parties hereby agree as follows:
Section 1.1.1(b) shall be amended and replaced to read in full as
follows:
The parties agree to use the "STAC" referenced in Section 3.16
of the Settlement Agreement, dated November 19, 1997, by and between
SICPA, Flex, OCLI and the other parties named therein, during the
term of this Agreement, to implement all of the provisions of the
Memorandum of Alliance and the Joint Venture Agreement, copies of
which are attached hereto as Exhibits I and J, respectively. In the
event the STAC is discontinued the parties agree to re-establish the
Committee pursuant to the original provisions of Section 1.1.1(b)
prior to this Amendment. The parties agree that, notwithstanding the
existing terms of the Memorandum of Alliance and the Joint Venture
Agreement to the contrary, the Memorandum of Alliance and the Joint
Venture Agreement shall remain in effect during the Term of this
Agreement, and the parties shall execute such amendments thereto
which may be proper to extend the length of the respective terms of
the Memorandum of Alliance and the Joint Venture Agreement to conform
to length of the Term (as such term is defined in Section 13 below).
Section 3 of the 1994 Agreement shall be amended and replaced to read
in full as follows:
3. Changes to Price and Quantity. During the period from
March 1, 2000 through June 30, 2000 and the period March 1, 2005
through June 30, 2005, the parties shall discuss what the price and
quantity terms of this Agreement shall be for the period 11/1/2000
through 10/31/2005 and 11/1/2005 through 12/31/2009 respectively. In
the event that the parties cannot agree to any other provisions, the
price for OVP shall be the price set forth in Section 4, as adjusted
by Section 5.6 for periods after 10/31/2000, the minimum and maximum
quantities for the period 11/1/2000 through 10/31/2005 shall be the
same as for the year ended 10/31/2000, and the minimum and maximum
quantities for the period 11/1/2005 through 12/31/2009 shall be the
same as for the year ended 10/31/2005 (prorated on a month-for-month
basis for the period from 11/1/2009 to 12/31/2009).
Section 4.3 of the 1994 Agreement shall be amended and replaced to
read in full as follows:
4.3 Price Adjustment. The price per kilogram set shall be as
set forth below without adjustment pursuant to Sections 4.2 and 5.6
from November 1, 1997 through October 31, 2000:
Base Price/Kg (before
increases pursuant to
Purchases per Year Sections 4.2 and 5.6)
[CONFIDENTIAL TREATMENT REQUESTED]
The table set forth in 5.1(a) of the 1994 Agreement shall be amended
and replaced to read in full as follows:
5.1 Minimum Annual Purchases.
5.1(a) Minimum Purchases Necessary to Maintain Exclusive
License. The parties agree that SICPA shall purchase from Flex
minimum amounts of OVP set forth below for the periods indicated:
Year Minimum Maximum
[CONFIDENTIAL TREATMENT REQUESTED]
Section 14 of the 1994 Agreement shall be amended and replaced
to read in full as follows:
14. [CONFIDENTIAL TREATMENT REQUESTED]
Section 17 of the 1994 Agreement shall be amended and replaced to
read in full as follows:
17. Notices. All notices hereunder shall be in writing and
shall be deemed to have been given either (i) when received, if
delivered in person or transmitted by tested telex or facsimile, or
(ii) three business days after having been mailed by registered or
certified mail addressed as follows:
To Flex: Flex Products, Inc.
0000 Xxxxxxx Xxx
Xxxxx Xxxx, Xxxxxxxxxx 00000-0000
Attn: Xxxxxxx Xxxxxxxx
FAX: (000) 000-0000
To SICPA: SICPA Holding S.A.
Xxxxxx xx Xxxxxxxxxx 00
0000 Xxxxxx
Xxxxxxxxxxx
Attention: President
FAX: 00-00-000-0000
or to such changed address as such party may have fixed by notice
provided that any notice of change of address shall be deemed to have
been given when received.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment to be duly executed, and intends this Agreement to be effective,
as of the date first set forth above.
FLEX PRODUCTS, INC., a Delaware corporation
By
SICPA HOLDING S.A., a Swiss corporation
By
EXHIBIT B
REGISTRATION RIGHTS
1. Demand Registrations
a. Requests for Registration.
(i) Subject to the terms and conditions hereof, at any time and
from time to time after the date of the first Public Offering of Flex
Common Stock SICPA may request in writing registration under the
Securities Act of 1933, as amended (the "Securities Act"), of all or
part of its Common Stock (any such requested registration is
hereinafter referred to as a "Demand Registration"). The number of
Demand Registrations SICPA shall be entitled to request shall be two
(2).
(ii) An SEC registration of Common Stock shall not be counted as
a Demand Registration for purposes of the limit in Section 1.a.(i) of
this Exhibit B until such registration has become effective (unless
such Demand Registration has not become effective due solely to the
fault of SICPA). Each request for a Demand Registration shall specify
the approximate number of shares of Common Stock requested to be
registered and the anticipated per share price range for such
offering.
(iii) If, in connection with any Demand Registration, the
managing underwriter(s) to Flex in connection with such SEC
registration advises Flex in writing that, in its opinion, the number
of shares of Common Stock to be registered would materially and
adversely affect the success or price of the offering, then the number
of shares to be included in such Demand Registration shall be reduced
to the number recommended by such managing underwriter(s). Any such
reduction shall be effected by (1) first reducing or eliminating the
number of shares of Common Stock (if any) requested to be included in
such registration by any shareholders of Flex other than SICPA and (2)
then, if and to the extent further reductions are necessary, by
reducing the number of shares of Common Stock requested to be included
therein by SICPA. If by such reduction the number of shares of Common
Stock included in such registration for SICPA represents less than
one-third of the total number of shares requested to be registered by
SICPA, then such registration shall not be counted against the number
of Demand Registrations to which SICPA is entitled under Section
1.a.(i) hereof.
b. Best Efforts. Flex shall promptly and diligently use its best
efforts to effect the registration under the Securities Act of the Common
Stock which Flex has been so requested to register by SICPA. Flex shall
use its best efforts to effect such registration on whichever registration
form the Board of Directors of Flex shall determine in its discretion is
appropriate in accordance with the intended method of disposition of such
shares; provided, however, that Flex shall use its best efforts to effect
such registration on SEC Form S-3 (or any successor form to Form S-3) if so
requested by SICPA unless (1) Form S-3 (or any successor form to Form S-3)
is not available for such offering, (2) the aggregate net offering price
(after deducting any underwriting discounts and commissions) of the shares
to be so registered is less than $1,000,000, or (3) Flex shall notify SICPA
that, in the good faith judgment of the Board of Directors of Flex, it
would not be in the best interests of Flex and its stockholders for a Form
S-3 registration to be effective at that time.
c. Restrictions on Demand Registrations. Flex's obligation to use
its best efforts to effect a Demand Registration pursuant to this Section 1
is subject to each of the following limitations, conditions, qualifications
and provisions:
(i) Flex will not be obligated to effect any Demand Registration
within any time period (not to exceed six months) requested by the
managing underwriter(s) of any previous registered offering of Common
Stock.
(ii) Flex shall be entitled to postpone the filing of any
registration statement otherwise required to be prepared and filed by
Flex pursuant to any Demand Registration for a reasonable period of
time, but not in excess of 90 days, if Flex determines in its
reasonable judgment and in good faith that the registration and
distribution of Common Stock under such Demand Registration would have
an adverse effect on any pending or proposed equity or debt financing,
acquisition, merger, consolidation, tender offer, corporate
reorganization or similar transaction involving Flex or would require
premature disclosure thereof. In such event, Flex shall promptly give
SICPA written notice of such determination, containing a general
statement of the reasons for such postponement. If Flex shall so
postpone the filing of a registration statement, SICPA shall have the
right to withdraw the Demand Registration by giving written notice to
Flex within twenty (20) days after receipt of the postponement notice.
In the event of such withdrawal, such Demand Registration shall not be
counted for purposes of determining the number of Demand Registrations
to which SICPA is entitled under Section 1.a.(i) of this Exhibit B.
(d) Selection of Underwriters. Flex shall have the right to select
the managing underwriter(s) for any Demand Registration, subject to SICPA's
approval, which approval will not be unreasonably withheld.
2. Piggyback Registrations
a. Right to Piggyback. Subject to the limitations set forth in
Section 2.b. of this Exhibit B, at any time and from time to time after the
date of the first Public Offering of Flex Common Stock whenever Flex
proposes to register under the Securities Act any Common Stock, Flex will
give prompt written notice to SICPA of its intention to effect such a
registration and will use its best efforts to include in such registration
all shares of Common Stock with respect to which SICPA gives Flex written
request for inclusion therein within fifteen (15) days after the receipt of
Flex's notice (any such requested inclusion is hereinafter referred to as a
"Piggyback Registration").
b. Restrictions on Piggyback Registrations. Flex's obligation to
use its best efforts to effect any registration pursuant to this Section 2
is subject to each of the following limitations, conditions, qualifications
and provisions:
(i) If, at any time before or after giving written notice
pursuant to this Section 2 of its intention to register shares of
Common Stock and prior to the effective date of the registration
statement filed in connection with such registration, Flex shall
determine for any reason not to proceed with such registration, Flex
may give written notice of such determination to SICPA and thereupon
shall be relieved of its obligation to use its best efforts to
register any shares of Common Stock in connection with such
registration, but without prejudice to the rights of SICPA to request
that such registration be effected as a Demand Registration pursuant
to the terms and conditions of Section 1.
(ii) If, in the written opinion of the managing underwriter(s) of
Flex in connection with any registration pursuant to this Section 2,
the distribution of the additional securities requested to be included
in such registration by SICPA ("Piggyback Shares") would materially
and adversely affect the success or the price of the offering, then
the number of shares to be included in such registration shall be
reduced to the number recommended by such managing underwriter(s).
Any such reduction shall be effected by (1) first reducing or
eliminating the number of shares of Common Stock (if any) requested to
be included in such registration by any shareholders of Flex other
than SICPA, and (2) then, if and to the extent further reductions are
necessary, by reducing the number of Piggyback Shares.
(iii) Flex shall not be obligated to effect any Piggyback
Registration of Common Stock under this Section 2 incidental to the
registration of any shares of Common Stock (A) filed on SEC Form S-4
or any successor form thereto, (B) in connection with any merger,
consolidation, acquisition, exchange offer, recapitalization or other
reorganization of Flex or (C) in connection with any offering of
securities made solely to stockholders of Flex.
c. Selection of Underwriters. Flex shall have the right to select
the managing underwriter(s) for any Piggyback Registration, which selection
will be made by Flex in its sole discretion.
3. Holdback Agreements
SICPA agrees not to effect any public sale or distribution of Common
Stock during the seven (7) days prior to, and the ninety (90) day period
beginning on, the effective date of any Demand Registration or any
Piggyback Registration, as the case may be (except as part of such
registration), unless Flex and the underwriter(s) managing the registered
offering otherwise agree to a shorter period.
4. Registration Procedures
a. Flex's Efforts. Whenever SICPA requests that its shares of
Common Stock be registered pursuant to this Agreement, Flex will use its
best efforts to effect the registration and the sale of such shares in
accordance with the intended method of disposition thereof, and pursuant
thereto Flex will as expeditiously as possible:
(i) prepare and file with the SEC a registration statement with
respect to such shares of Common Stock and use its best efforts to
cause such registration statement to become effective (provided that,
before filing a registration statement or prospectus or any amendments
or supplements thereto, Flex will furnish to the counsel of SICPA such
registration statement and copies of all such other documents proposed
to be filed);
(ii) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective for a period of not less than ninety (90) days,
and comply with the provisions of the Securities Act with respect to
the disposition of all shares of Common Stock covered by such
registration statement during such period and until the earlier of
such time as all of such shares of Common Stock have been disposed of
in accordance with the intended methods of disposition by SICPA set
forth in such registration statement or the expiration of sixty (60)
days after such registration statement becomes effective, SICPA being
hereby required promptly to inform Flex in writing when the
distribution of such securities pursuant to such registration
statement has been completed);
(iii) furnish to SICPA such number of conformed copies of
such registration statement, each amendment and supplement thereto,
the prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as SICPA may
reasonably request in order to facilitate the disposition of the
shares of Common Stock owned by SICPA;
(iv) use its best efforts to register or qualify such shares of
Common Stock under such other securities or blue sky laws of such
jurisdictions as SICPA may reasonably request and do any and all other
acts and things which may be reasonably necessary or advisable to
enable SICPA to consummate the disposition of Common Stock in such
jurisdictions (provided that Flex will not be required to (A) qualify
generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this subparagraph, (B)
subject itself to taxation in any such jurisdiction or (C) consent to
general service of process in any such jurisdiction);
(v) use its best efforts to list all such shares of Common Stock
on each securities exchange or quotation service on which similar
securities issued by Flex are then listed, if any;
(vi) provide a transfer agent and registrar for all such shares
of Common Stock not later than the effective date of such registration
statement;
(vii) enter into such customary agreements (including
underwriting agreements in customary form) and take all such other
actions as SICPA may reasonably request in order to expedite or
facilitate the disposition of such shares of Common Stock (including,
without limitation, effecting a stock split or a combination of shares
applicable to all shareholders of Flex equally);
(viii) make available for inspection by SICPA, any
underwriter(s) participating in any disposition pursuant to such
registration statement, and any attorney, accountant or other agent
retained by SICPA or the underwriter(s), all financial and other
records, pertinent corporate documents and properties of Flex, and
cause Flex's officers, directors, employees and independent
accountants to supply all information reasonably requested by SICPA or
the underwriter(s), or any attorney, accountant or agent of SICPA or
the underwriter(s) in connection with such registration statement;
(ix) otherwise use its best efforts to comply with all applicable
rules and regulations of the SEC, and make available to its security
holders, as soon as reasonably practicable, an earnings statement
covering the period of at least twelve months beginning with the first
day of Flex's first full calendar quarter after the effective date of
the registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act;
(x) in the event of the issuance of any stop order suspending
the effectiveness of a registration statement, or of any order
suspending or preventing the use of any related prospectus or
suspending the qualification of any shares of Common Stock included in
such registration statement for sale in any jurisdiction, Flex will
use its best efforts promptly to obtain the withdrawal of such order;
(xi) obtain a cold comfort letter from Flex's independent public
accountants in customary form and covering such matters of the type
customarily covered by cold comfort letters as SICPA may reasonably
request; and
(xii) promptly notify SICPA: (A) when any registration
statement, any pre-effective amendment, the prospectus or any
prospectus supplement related thereto or post-effective amendment to
such registration statement has been filed, and, with respect to such
registration statement or any post-effective amendment, when the same
has become effective; (B) of any request by the SEC for amendments or
supplements to such registration statement or the prospectus related
thereto or for additional information; (C) of the issuance by the SEC
of any stop order suspending the effectiveness of such registration
statement or the initiation of any proceedings for that purpose; (D)
of the receipt by Flex of any notification with respect to the
suspension of the qualification of any of the shares of Common Stock
for sale under the securities or blue sky laws of any jurisdiction or
the initiation of any proceeding for such purpose; and (E) of the
existence of any fact of which Flex becomes aware which results in
such registration statement, the prospectus related thereto or any
document incorporated therein by reference containing an untrue
statement of a material fact or omitting to state a material fact
required to be stated therein or necessary to make any statement
therein in light of the circumstances under which they were made not
misleading; and, in the case of the notification relating to an event
described in clause (E) hereof, Flex shall promptly prepare and
furnish to SICPA and each underwriter, if any, a reasonable number of
copies of a prospectus supplemented or amended so that, as thereafter
delivered to the purchasers of any such Common Stock, such prospectus
shall not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein in the light of the circumstances under
which they were made not misleading.
b. SICPA's Efforts. SICPA shall cooperate with Flex in the
registration of any shares of Common Stock owned by SICPA by (1) furnishing
promptly to Flex such information regarding SICPA, the distribution of the
shares to be registered and any other information that Flex may reasonably
request in connection with the registration and (2) completing and
executing all questionnaires, powers of attorney, underwriting agreements
and other documents reasonably required in connection with the
registration. SICPA hereby agrees that, upon receipt of any notice of the
happening of: (x) any event of the kind described in clause (C) of Section
4.a.(xii), SICPA will discontinue its disposition of shares of Common Stock
pursuant to the registration statement relating to such shares until the
stop order shall have been lifted or rescinded; (y) any event of the kind
described in clause (D) of Section 4.a.(xii), SICPA will discontinue its
disposition of shares of Common Stock pursuant to the registration
statement relating to such shares in the jurisdiction with respect to which
the suspension of the qualification of any of the shares for sale has
occurred, until the suspension shall have been lifted or rescinded; and (z)
any event of the kind described in clause (E) of Section 4.a.(xii), SICPA
will discontinue its disposition of shares of Common Stock pursuant to the
registration statement relating to such shares until the receipt by SICPA
of the copies of the supplemented or amended prospectus contemplated by
Section 4.a.(xii) and, if so directed by Flex, will deliver to Flex (at
Flex's expense) all copies, other than permanent file copies, then in the
possession of SICPA of the prospectus relating to such shares of Common
Stock. In the case of a Demand Registration, if the disposition by SICPA
of its shares of Common Stock is discontinued pursuant to the foregoing
sentence, unless Flex extends the period of effectiveness of the
registration statement by the number of days during the period from and
including the date of the giving of such notice to and including the date
when either (I) the stop order or suspension of qualification shall have
been lifted or rescinded or (II) SICPA shall have received copies of the
supplemented or amended prospectus contemplated by Section 4.a.(xii), as
the case may be, and unless SICPA continues to participate in such
registration as extended, then SICPA shall be entitled to another Demand
Registration and such discontinued or extended registration shall not be
counted against the number of Demand Registrations to which SICPA is
entitled under Section 1.a.(i) hereof.
5. Registration Expenses
For purposes of this Exhibit B, "Registration Expenses" shall mean all
expenses incident to Flex's performance of or compliance with this Exhibit
B, including without limitation, (i) all registration and filing fees, (ii)
fees and expenses of compliance with securities or blue sky laws, (iii)
printing expenses, messenger and delivery expenses, (iv) fees for listing
the securities to be registered on securities exchanges or on the National
Association of Securities Dealers automated quotation system, (v) fees and
disbursements of counsel for Flex and all independent certified public
accountants, underwriters and other persons retained by Flex, and
(vi) underwriting discounts or commissions. All Registration Expenses will
be borne by Flex, except that (i) any underwriting discounts or commissions
with respect to shares of Common Stock included either in any Demand
Registration or in any Piggyback Registration will be borne by and
allocated to SICPA in proportion to its shares so registered, (ii) SICPA
shall bear the expense of the fees and disbursements of any counsel
retained solely by SICPA and (iii) in the case of any Demand Registration,
SICPA shall bear a portion of the Registration Expenses (other than any
Registration Expenses of the type described in clauses (i) and (ii), which
are to be determined in accordance with clauses (i) and (ii)), which
portion shall be allocated to SICPA in proportion to its shares so
registered.
6. Indemnification
a. By Flex. Flex agrees to indemnify and hold harmless, to the
fullest extent permitted by law, SICPA and each of SICPA's officers and
directors and each person, if any, who controls SICPA within the meaning of
the Securities Act (each such person being hereinafter referred to as an
"Indemnified Party"), against any losses, claims, damages, liabilities and
expenses, joint or several, to which such Indemnified Party may become
subject under the Securities Act or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions or proceedings in
respect thereof) arise out of or are based upon (i) any untrue statement of
any material fact contained in any registration statement under which such
shares of Common Stock were registered under the Securities Act, any
preliminary prospectus or final prospectus included therein, or any
amendment thereof or supplement thereto, or any document incorporated by
reference therein, or (ii) any omission to state therein a material fact
required to be stated therein or necessary to make the statements therein
not misleading, and Flex will reimburse such Indemnified Party for any
legal or other expenses reasonably incurred by it, as and when incurred, in
connection with investigating or defending any such loss, claim, liability,
action or proceeding; provided, however, that Flex shall not be liable in
any such case to the extent that any such loss, claim, damage, liability
(or action or proceeding in respect thereof) or expense arises out of or is
based upon or is caused by (A) an untrue statement or alleged untrue
statement or omission or alleged omission made in such registration
statement, any such preliminary prospectus, final prospectus, amendment or
supplement in reliance upon and in conformity with written information
furnished to Flex by or on behalf of such Indemnified Party expressly for
use in the preparation thereof, or (B) such Indemnified Party's failure to
deliver a copy of such registration statement, prospectus, amendment or
supplement after Flex has furnished such Indemnified Party with such number
of copies of the same as such Indemnified Party may reasonably request.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of such Indemnified Party and shall
survive the transfer of such securities by such Indemnified Party.
b. By SICPA. Flex may require, as a condition to including any of
SICPA's shares of Common Stock in any registration statement filed pursuant
to Section 1 or 2 hereof, that Flex shall have received an undertaking
reasonably satisfactory to it from SICPA to indemnify and hold harmless (in
the same manner and to the same extent as set forth in paragraph (a) of
this Section 6) Flex, each director of Flex, each person named as or about
to become a director of Flex, each officer of Flex and each other person,
if any, who controls Flex within the meaning of the Securities Act, with
respect to any statement in or omission from such registration statement,
any preliminary prospectus or final prospectus included therein, or any
amendment thereof or supplement thereto, if such statement or omission was
made in reliance upon and in conformity with written information expressly
furnished to Flex by or on behalf of SICPA for use in the preparation of
such registration statement, preliminary prospectus, final prospectus,
amendment or supplement; provided, however, that such indemnity shall be
limited to the amount of the net proceeds received by SICPA from the sale
of shares of Common Stock pursuant to such registration statement, except
in the case of any material misstatement or omission knowingly and
willfully made by SICPA in written information expressly furnished to Flex
or the underwriters by or on behalf of SICPA for use in the preparation of
such registration statement, preliminary prospectus, final prospectus,
amendment or supplement, as to which no such limitation shall apply. Such
indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of Flex or any such director, officer or
controlling person and shall survive the transfer of such securities by
SICPA.
c. Procedural Matters. A party from whom indemnity shall be sought
pursuant to the provisions of this Section 6 shall not be liable with
respect to such indemnity under paragraph (a) or (b) of this Section 6
unless the indemnified party shall have given written notice to such
indemnifying party of the nature of such claim promptly after receipt by
such indemnified party of notice of the commencement of any action or
proceeding involving such claim; provided, however, that the failure of any
indemnified party to give notice as provided herein shall not relieve such
indemnifying party from any liability which it may have to such indemnified
party (X) otherwise than on account of this Section 6 or (Y) except to the
extent that the failure to give such notice shall have been materially
prejudicial to such indemnifying party. Unless in the reasonable judgment
of the indemnified party a conflict of interest between such indemnified
and indemnifying parties may exist with respect to such claim, the
indemnifying party shall be entitled to participate in and to assume the
defense of any such claim, jointly with any other indemnifying party
similarly notified, to the extent that it may wish, with counsel reasonably
satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof. In the case
of conflict of interest as set forth above, the indemnifying party shall
pay the reasonable fees and expenses of one counsel for all parties
indemnified by such indemnifying party with respect to such claim. In no
event will the indemnifying party be subject to any liability for any
settlement made by any indemnified party without its consent.
7. Participation in Underwritten Registrations
SICPA may not participate in any registration hereunder which is
underwritten unless SICPA (a) agrees to sell its securities on the basis
provided in any underwriting arrangements approved by the person or persons
entitled to approve such arrangements and (b) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements
and other documents required under the terms of such underwriting
arrangements.
8. Definitions
Unless otherwise defined herein, all capitalized terms shall have the
meaning ascribed thereto in the Settlement Agreement to which these
Registration Rights are an Exhibit.
9. Assignment
SICPA may assign its rights and duties hereunder to any person who
acquires from SICPA shares of Common Stock.
EXHIBIT C
SECOND AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
FLEX PRODUCTS, INC.
XXXXXX X. XXXX, Secretary of FLEX PRODUCTS, INC., a corporation
organized and existing under the laws of the State of Delaware, hereby
certifies as follows:
A. The name of the corporation is FLEX PRODUCTS, INC. FLEX
PRODUCTS, INC. was originally incorporated in the State of Delaware under
the same name, and the original Certificate of Incorporation of the
corporation was filed with the Delaware Secretary of State on October 28,
1988.
B. Pursuant to Sections 242 and 245 of the General Corporation Law
of the State of Delaware, this Restated Certificate of Incorporation
restates and integrates and further amends the provisions of the
Certificate of Incorporation of this corporation.
C. This Second Amended and Restated Certificate of Incorporation was
duly adopted by the Board of Directors with approval by the stockholders of
the corporation by the necessary number of shares as required by statute.
D. The text of the Certificate of Incorporation as heretofore
amended or supplemented is hereby restated and further amended to read in
its entirety as follows:
I.
NAME
The name of the corporation is FLEX PRODUCTS, INC. (the
"Corporation").
II.
AUTHORIZED BUSINESS
The nature of the business or purposes to be conducted or promoted by
the Corporation is to engage in any lawful act or activity for which
corporations may be organized under the General Corporation Law of Delaware
(the "Delaware Law").
III.
CAPITAL STOCK
1. This Corporation is authorized to issue two classes of shares
designated respectively as "Common Stock" and one class of shares
designated as "Preferred Stock," and referred to herein as Class A Common
Stock or Class A Common shares, Class B Common Stock or Class B Common
shares and Preferred Stock or Preferred shares, respectively. The number
of shares of Class A Common Stock is 20,000,000, the number of shares of
Class B Common Stock is 12,500,000 and the number of shares of Preferred
Stock is 1,000. Each share of Class A Common Stock, Class B Common Stock
and Preferred Stock shall have a par value of $.01. Each share of common
stock of this Corporation, par value $.01, formerly issued and outstanding
immediately prior to the effective time of this Second Amended and Restated
Certificate of Incorporation is by this means reclassified and changed into
100 shares of Class B Common Stock, and the stated capital of this
Corporation shall be increased accordingly by an appropriate transfer from
earned surplus.
2. The Preferred shares may be issued from time to time in one or
more series. Except for the Series B Preferred Stock and the Series C
Preferred Stock, the rights, privileges and preferences of which are set
forth in Section III.3 and III.4 below, respectively, the Board of
Directors is hereby authorized to fix or alter the dividend rights,
dividend rate, conversion rights, voting rights, rights and terms of
redemption (including sinking fund provisions), the redemption price or
prices, and the liquidation preferences of any wholly unissued series of
Preferred shares, and the number of shares constituting any such series and
the designation thereof, or any of them; and to increase or decrease the
number of shares of any series subsequent to the issue of shares of that
series, but not below the number of shares of such series then outstanding.
In case the number of shares of any series shall be so decreased, the
shares constituting such decrease shall resume the status in which they had
prior to the adoption of the resolution originally fixing the number of
shares of such series.
3. Of the Preferred shares, a total of 12 are designated as Series B
Preferred Stock, with the specific rights, privileges and preferences as
follows:
a. Voting Rights. Except as otherwise provided in Sections
III.3.f and III.3.g below, the holders of Series B Preferred shares shall
have no voting rights.
b. Redemptions.
i. Mandatory Redemptions. The Corporation will redeem all
or such lesser number of its Series B Preferred shares (or fractions
thereof), as, whenever and to the full extent that funds became lawfully
available therefor (but only to the extent of current or retained earnings
determined in accordance with generally accepted accounting principles
consistently applied) at a price per share of $150,000 (the "Redemption
Price"). The Corporation shall not declare or pay dividends on, make any
other distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of any other class or series of its capital stock
other than a redemption of shares of Series C Preferred Stock until such
time as all Series B Preferred shares have been redeemed. If the funds of
the Corporation legally available for redemption of Series B Preferred
Stock at the time of any such redemption are insufficient to redeem the
Series B Preferred shares in full, those funds which are legally available
shall be used to redeem the maximum number legally possible of shares or
fractions thereof of Series B Preferred Stock.
ii. Determination of Number of Redeemable Shares. The
number of shares to be set forth in the redemption notice described in
Section III.3.b.iii below to be redeemed from each holder of Series B
Preferred Stock in redemptions under this Section III.3.b will be the
number of shares determined, as nearly as practicable to the nearest full
share, by multiplying the total number of Series B Preferred shares to be
redeemed times a fraction, (1) the numerator of which is the total number
of outstanding Series B Preferred shares then held by such holder and
(2) the denominator of which is the total number of Series B Preferred
shares then outstanding.
iii. Notice of Redemption. Notice of any redemption of
Series B Preferred Stock pursuant to this Section III.3.b specifying the
time and place of redemption and the redemption price will be mailed by
certified or registered mail, return receipt requested, to each holder of
record of Series B Preferred Stock at the address of such holder shown on
the Corporation's records, not more than 60 days nor less than 30 days
prior to the date on which such redemption is to be made. If less than all
Series B Preferred Stock owned by a holder is then to be redeemed, the
notice will also specify the number of shares and the certificate numbers
thereof which are to be redeemed. Upon mailing any such notice of
redemption, the Corporation will become obligated to redeem on the date of
redemption specified therein all Series B Preferred Stock specified
therein. In case less than all Series B Preferred Stock represented by any
certificate are redeemed in any redemption pursuant to this Section
III.3.b, a new certificate will be issued representing the unredeemed
Series B Preferred Stock without cost to the holder thereof.
iv. Method of Redemption. If on, prior to or after any
date fixed for redemption of the Series B Preferred Stock, the Corporation
shall deposit, with any bank or trust company in the State of California,
as a trust fund, a sum sufficient to redeem, as of the date fixed for
redemption thereof, the shares called for redemption, with irrevocable
instructions and authority to the bank or trust company to pay, on or after
the date fixed for redemption, the redemption price of the shares to their
respective holders upon surrender of their share certificates, then from
and after the later of the date fixed for redemption or the date of
deposit, but not until such date, the shares so called shall be redeemed
and dividends shall cease to accrue after the date fixed for redemption.
The deposit shall constitute full payment of the shares to their holders,
and from and after the date of the deposit the shares shall no longer be
outstanding, and the holders thereof shall cease to be stockholders with
respect to such shares, and shall have no rights with respect thereto
except the right to receive from the bank or trust company payment of the
redemption price of the shares without interest, upon the surrender of
their certificates therefor. If the holders of Series B Preferred shares
so called for redemption shall not have claimed, at the end of six months
from the date fixed for redemption, any funds so deposited, such bank or
trust company shall thereupon pay over to the Corporation such unclaimed
funds, and such bank or trust company shall thereafter be relieved of all
responsibility in respect thereof to such holders, and such holders shall
look only to the Corporation for payment of the redemption price.
c. Conversion. The Series B Preferred shares shall not be
convertible.
d. Reacquired Shares. Any Series B Preferred shares purchased
or otherwise acquired by the Corporation in any manner whatsoever shall be
retired and cancelled promptly after the acquisition thereof. All such
shares shall, upon their cancellation, become authorized but unissued
Preferred shares and may be reissued as part of a new series of Preferred
Stock to be created by resolution or resolutions of the Board of Directors,
subject to the conditions and restrictions on issuance set forth herein.
e. Liquidation, Dissolution, Winding Up or Merger, etc. upon
any liquidation (voluntary or otherwise), dissolution or winding up of the
Corporation, no distribution shall be made to the holders of shares of any
other class or series of capital stock until all then outstanding Series B
Preferred shares shall have been redeemed (the "Series B Liquidation
Preference"); provided however, that the Series B Liquidation Preference
may only be paid out of, and only ranks prior to all other classes and
series of stock to the extent of current or retained earnings determined in
accordance with generally accepted accounting principles consistently
applied.
f. Ranking. Except as set forth in Section III.4.f with
respect to the Corporation's Series C Preferred Stock, the Series B
Preferred Stock shall rank prior to all other series and classes of the
Corporation's capital stock as to the payment of dividends and the
distribution of assets, but only to the extent provided herein, and the
Corporation may not create any series or class of capital stock ranking
prior to or, as to the Series B Liquidation Preference or the preference of
the Series B Preferred Stock as to dividends and distributions, on a parity
with the Series B Preferred Stock unless the terms of any such series or
class shall first be approved by not less than 66 2/3% of the outstanding
shares of Series B Preferred Stock, voting separately as a class.
g. Amendment. The Certificate of Incorporation of the
Corporation shall not be further amended in any manner which would
materially alter or change the powers, preferences or special rights of the
Series B Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of not less than 66 2/3% of the outstanding
Series B Preferred shares, voting separately as a class.
h. Fractional Shares. Series B Preferred Stock may be issued
in fractions of a share, which shall entitle the holder thereof, in
proportion to such holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to have the benefit of
all of the rights of holders of shares of Series B Preferred Stock.
4. Of the Preferred shares, a total of 10 are designated Series C
Preferred Stock, with the specific rights, privileges and preferences as
follows:
a. Voting Rights. Except as otherwise provided in Section
III.4.f and III.4.g below, the holders of Series C Preferred Shares shall
have no voting rights.
b. Redemptions.
i. Mandatory Redemption. The Corporation will redeem, at
a price per share of One Hundred Fifty Thousand Dollars ($150,000) (the
"Redemption Price") as soon as, whenever, and to the full extent that funds
become lawfully available therefor after February 1, 1998 (but only to the
extent of current or retained earnings determined in accordance with
generally accepted accounting principles consistently applied) shares of
Series C Preferred Stock (or fractions thereof). The Corporation shall not
declare or pay dividends on, make any other distributions on, or redeem or
purchase or otherwise acquire for consideration any shares of any other
class or series of its capital stock other than a redemption of shares of
Series B Preferred Stock until such time as all shares of Series C
Preferred Stock have been redeemed. If the funds of the Corporation
legally available for redemption of Series C Preferred Stock at the time of
any such redemption are insufficient to redeem the shares of Series C
Preferred Stock in full, those funds which are legally available shall be
used to redeem the maximum number legally possible of shares (or fractions
thereof) of Series C Preferred Stock.
ii. Determination of Number of Redeemable Shares. The
number of shares to be set forth in the redemption notice described in
Section III.4.b.iii below to be redeemed from each holder of Series C
Preferred Stock in redemptions under this Section III.4.b will be the
number of shares determined, as nearly as practicable to the nearest share,
by multiplying the total number of shares of Series C Preferred Stock to be
redeemed times a fraction, (i) the numerator of which is the total number
of outstanding shares of Series C Preferred Stock then held by such holder
and (ii) the denominator of which is the total number of shares of Series C
Preferred Stock then outstanding.
iii. Notice of Redemption. Notice of any redemption of
Series C Preferred Stock pursuant to this Section III.4.b specifying the
time and place of redemption and the redemption price will be mailed by
certified or registered mail, return receipt requested, to each holder of
record of Series C Preferred Stock at the address of such holder shown on
the Corporation's records, not more than sixty (60) nor less than thirty
(30) days prior to the date on which such redemption is to be made. If
less than all Series C Preferred Stock owned by a holder is then to be
redeemed, the notice will also specify the number of shares and the
certificate numbers thereof which are to be redeemed. Upon mailing any
such notice of redemption, the Corporation will become obligated to redeem
on the date of redemption specified therein all Series C Preferred Stock
specified therein. In case less than all Series C Preferred Stock
represented by any certificate is redeemed in any redemption pursuant to
this Section III.4.b, a new certificate will be issued representing the
unredeemed Series C Preferred Stock without cost to the holder thereof.
iv. Method of Redemption. If on, prior to or after any
date fixed for redemption of the Series C Preferred Stock, the Corporation
shall deposit, with any bank or trust company in the State of California,
as a trust fund, a sum sufficient to redeem, as of the date fixed for
redemption thereof, the shares called for redemption, with irrevocable
instructions and authority to the bank or trust company to pay, on or after
the date fixed for redemption, the redemption price of the shares to their
respective holders upon surrender of their share certificates, then from
and after the later of the date fixed for redemption or the date of
deposit, but not until such date, the shares so called shall be redeemed
and dividends shall cease to accrue after the date fixed for redemption.
The deposit shall constitute full payment of the shares to their holders,
and from and after the date of the deposit the shares shall no longer be
outstanding, and the holders thereof shall cease to be stockholders with
respect to such shares, and shall have no rights with respect thereto
except the right to receive from the bank or trust company payment of the
redemption price of the shares without interest, upon the surrender of
their certificates therefor. If the holders of shares of Series C
Preferred Stock so called for redemption shall not have claimed, at the end
of six (6) months from the date fixed for redemption, any funds so
deposited, such bank or trust company shall thereupon pay over to the
Corporation such unclaimed funds, and such bank or trust company shall
thereafter be relieved of all responsibility in respect thereof to such
holders, and such holders shall look only to the Corporation for payment of
the redemption price.
c. Conversion. The shares of Series C Preferred Stock shall
not be convertible.
d. Reacquired Shares. Any shares of Series C Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All
such shares shall upon their cancellation become authorized but unissued
shares of Preferred Stock and may be reissued as part of a new series of
Preferred Stock to be created by resolution or resolution of the Board of
Directors, subject to the conditions and restrictions on issuance set forth
herein.
e. Liquidation, Dissolution, Winding Up or Merger, etc. Upon
any liquidation (voluntary or otherwise), dissolution or winding up of the
Corporation, no distribution shall be made to the holders of shares of any
other class or series of capital stock until all then outstanding shares of
Series C Preferred Stock shall have been redeemed (the "Series C
Liquidation Preference"); provided, however, that the Series C Liquidation
Preference may only be paid out of, and only ranks prior to all other
classes and series of stock to the extent of, current or retained earnings
determined in accordance with generally accepted accounting principles
consistently applied.
f. Ranking. Except as set forth in Section III.3.f. with
respect to the Corporation's Series B Preferred Stock, the Series C
Preferred Stock shall rank prior to all other series and classes of the
Corporation's capital stock as to the payment of dividends and the
distribution of assets, but only to the extent provided herein, and the
Corporation may not create any series or class of capital stock ranking
prior to or, as to the Series C Liquidation Preference or the preference of
the Series C Preferred Stock as to dividends and distributions, on a parity
with the Series C Preferred Stock unless the terms of any such series or
class shall be approved by not less than sixty-six and two-thirds percent
(66 2/3%) of the outstanding shares of Series C Preferred Stock, voting
separately as a class.
g. Amendment. The Certificate of Incorporation of the
Corporation shall not be further amended in any manner which would
materially alter or change the powers, preferences or special rights of the
Series C Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of not less than sixty-six and two-thirds
percent (66 2/3%) of the outstanding shares of Series C Preferred Stock,
voting separately as a class.
h. Fractional Shares. Series C Preferred Stock may be issued
in fractions of a share which shall entitle the holder thereof, in
proportion to such holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to have the benefit of
all of the rights of holders of shares of Series C Preferred Stock.
5. Each share of the Class A Common Stock, par value $.01 (the
"Class A Common Stock), and each share of the Class B Common Stock, par
value $.01 per share (the "Class B Common Stock"), of the Corporation
shall, except as otherwise provided in this paragraph 5, be identical in
all respects and shall have equal rights and privileges.
a. Voting Rights. Holders of Class A Common Stock shall be
entitled to one vote for each share of such stock held, and holders of
Class B Common Stock shall be entitled to ten votes for each share of such
stock held on all matters presented to such stockholders. Except as may
otherwise be required by the laws of the State of Delaware or in the
instrument creating or evidencing any class or series of Preferred Stock,
the holders of shares of Class A Common Stock and the holders of shares of
Class B Common Stock shall vote with the holders of Preferred stock, if
any, as one class with respect to the election of directors and with
respect to all other matters to be voted on by stockholders of the
Corporation (including, without limitation, any proposed amendment to this
Certificate that would increase the number of authorized shares of Class A
Common Stock, of Class B Common Stock or of any class or series of stock
(but not below the number of shares thereof then outstanding), and no
separate vote or consent of the holders of shares of Class A Common Stock,
the holders of shares of Class B Common Stock or the holders of shares of
Preferred Stock shall be required for the approval of any such matter.
b. Conversion Rights. Each share of Class B Common Stock shall
be convertible, at the option of the holder thereof, into one share of
Class A Common Stock. Any such conversion may be effected by any holder of
Class B Common Stock by surrendering such holder's certificate or
certificates for the Class B Common Stock to be converted, duly endorsed,
at the office of the Corporation or any transfer agent for the Class B
Common Stock, together with a written notice to the Corporation at such
office that such holder elects to convert all or a specified number of
shares of Class B Common Stock represented by such certificate and stating
the name or names in which such holder desires the certificate or
certificates for Class A Common Stock to be issued. If so required by the
Corporation, any certificate for shares surrendered for conversion shall be
accompanied by instruments of transfer, in form satisfactory to the
Corporation, duly executed by the holder of such shares or the duly
authorized representative of such holder. Promptly thereafter, the
Corporation shall issue and deliver to such holder or such holder's
nominees, a certificate or certificates for the number of shares of Class A
Common Stock to which such holder shall be entitled as herein provided.
Such conversion shall be deemed to have been made at the close of business
on the date of receipt by the Corporation or any such transfer agent of the
certificate or certificates, notice and, if required, instruments of
transfer referred to above, and the person or persons entitled to receive
the Class A Common Stock issuable on such conversion shall be treated for
all purposes as the record holder or holders of such Class A Common Stock
on that date. A number of shares of Class A Common Stock equal to the
number of shares of Class B Common Stock outstanding from time to time
shall be set aside and reserved for issuance upon conversion of shares of
Class B Common Stock. Shares of Class B Common Stock that have been
converted hereunder shall remain treasury shares to be disposed of by
resolution of the Board of Directors. Shares of Class A Common Stock shall
not be convertible into shares of Class B Common Stock.
c. Dividends. Subject to paragraph d. of this paragraph 5,
whenever a dividend is paid to the holders of Class A Common Stock, the
Corporation also shall pay to the holders of Class B Common Stock a
dividend per share at least equal to the dividend per share paid to the
holders of the Class A Common Stock. Subject to paragraph d. of this
paragraph 5, whenever a dividend is paid to the holders of Class B Common
Stock, the Corporation shall also pay to the holders of the Class A Common
Stock a dividend per share at least equal to the dividend per share paid to
the holders of the Class B Common Stock. Dividends shall be payable only
as and when declared by the Board of Directors.
d. Share Distributions. If at any time a distribution on the
Class A Common Stock or Class B Common Stock is to be paid in Class A
Common Stock, Class B Common Stock or any other securities of the
Corporation (hereinafter sometimes called a "share distribution"), such
share distribution may be declared and paid only as follows:
(i) a share distribution consisting of Class A Common Stock
to holders of Class A Common Stock and Class B Common Stock, on an equal
per share basis; or to holders of Class A Common Stock only, but in such
event there shall also be a simultaneous share distribution to holders of
Class B Common Stock consisting of shares of Class B Common Stock on an
equal per share basis:
(ii) a share distribution consisting of Class A Common Stock
and Class B Common Stock, respectively, to holders of Class A Common Stock
and Class B Common Stock, respectively, on an equal per share basis;
(iii) a share distribution consisting of Class B Common
Stock to holders of Class B Common Stock only, but in such event there
shall also be a simultaneous share distribution to holders of Class A
Common Stock consisting of shares of Class A Common Stock on an equal per
share basis; and
(iv) a share distribution consisting of any class of
securities of the Corporation other than Common Stock, to the holders of
Class A Common Stock and the holders of Class B Common Stock, on an equal
per share basis.
The Corporation shall not reclassify, subdivide or combine one
class of its Common Stock without reclassifying, subdividing or combining
the other class of Common Stock, on an equal per share basis.
e. Liquidation and Mergers. Subject to the prior payment in
full of the preferential amounts to which any Preferred Stock is entitled,
the holders of Class A Common Stock and the holders of Class B Common Stock
shall share equally, on a share for share basis, in any distribution of the
Corporation's assets upon any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, after payment or provisions
71
for payment of the debts and other liabilities of the Corporation. Neither
the consolidation or merger of the Corporation with or into any other
corporation or corporations nor the sale, transfer or lease of all or
substantially all of the assets of the Corporation shall itself be deemed
to be a liquidation, dissolution or winding up of the Corporation within
the meaning of this subparagraph e.
IV.
DIRECTORS
The number of directors which will constitute the whole Board of
Directors of the Corporation shall be specified or determined in the manner
provided in the Bylaws of the Corporation.
V.
STOCKHOLDER MEETINGS, RECORDS
Meetings of stockholders may be held within or without the State of
Delaware, as the Bylaws may provide. The books of the Corporation may be
kept (subject to any provision contained in the Delaware Law) outside the
State of Delaware at such place or places as may be designated from time to
time by the Board of Directors or in the Bylaws of the Corporation.
VI.
CUMULATIVE VOTING
At all elections of directors of the Corporation, each holder of stock
entitled to vote for the election of directors shall be entitled to as many
votes as shall equal the number of votes which (except for this provision
72
as to cumulative voting) he would be entitled to cast for the election of
directors with respect to his shares of stock multiplied by the number of
directors to be elected by him, and he may cast all of such votes for a
single director or may distribute them among the number to be voted for, or
for any two or more of them as he may see fit.
VII.
SUPERMAJORITY PROVISIONS
The consent of holders of at least 67% of the then issued and
outstanding Common Stock of the Corporation shall be required, either in
writing or by vote at a meeting of stockholders called for the purpose, in
order to do or effect any of the following:
i. Amendments to the Second Restated Certificate of
Incorporation (other than for purposes of authorizing additional shares of
Class A Common Stock to be issued in an underwritten initial public
offering registered pursuant to the Securities Act of 1933, as amended, or
to be issued upon the exercise of stock options granted in accordance with
Section VII.x. hereof), any Certificate of Designations or the Bylaws of
the Corporation.
ii. Material changes in or departures from the nature of the
Corporation's business of manufacturing or selling products made by
depositing one or more layers of materials onto flexible substrates by
Roll-to-Roll Coating. For this purpose, "Roll-to-Roll Coating" shall mean
the serial steps of (1) the unwinding of a flexible substrate from a first
roll, (2) the deposition of one or more layers of materials onto the
flexible substrate and (3) the winding of the substrate onto a second roll,
provided that "Roll-to-Roll Coating" shall not include the deposition of
more than one layer of material to an area of the substrate during any
period that the substrate is motionless.
iii. Merger or consolidation or other corporate reorganization.
iv. Sale of all or substantially all of the Corporation's assets
and business.
v. Redemptions of any of the Corporation's capital stock, other
than its Series B Preferred shares, and other than from any stockholders
holding more than 5% of the Corporation's voting capital stock.
vi. Unbudgeted borrowings or assumptions of liabilities in
excess of US $2,000,000 in any single transaction or related group of
transactions, unless the Corporation shall have provided prior written
notice to each of its stockholders describing any such proposed transaction
in detail as approved by the Corporation's Board of Directors and
requesting approval of the proposed transaction with specific reference to
this Section XXX.xx. and no stockholder shall have objected to such
proposed transaction within ten (10) days after receipt of such notice (in
which event, such proposed transaction may be consummated, without further
stockholder approval, in accordance with the detailed description of such
transaction contained in the notice).
vii. Unbudgeted long term lease obligations or material capital
expenditures, or other material contracts, which obligate the Corporation
to expenditures of over US $1,000,000 per year, or US $2,500,000 in the
aggregate, unless the Corporation shall have provided prior written notice
to each of its stockholders describing any such proposed transaction in
detail as approved by the Corporation's Board of Directors and requesting
approval of the proposed transaction with specific reference to this
Section VII.vii. and no such stockholder shall have objected to such
proposed transaction within ten (10) days after receipt of such notice (in
which event, such proposed transaction may be consummated, without further
stockholder approval, in accordance with the detailed description of such
transaction contained in the notice).
viii. The licensing or sale of any of the Corporation's
technology, any joint ventures, or shared research and development
projects, for uses involving the manufacture or sale of products made by
depositing one or more layers of materials onto flexible substrates by
Roll-to-Roll Coating.
ix. The issuance of any shares of the capital stock of the
Corporation, other than in an underwritten initial public offering of Class
A Common Stock registered pursuant to the Securities Act of 1933, as
amended, except upon the exercise of stock options granted in accordance
with Section VII.x hereof and except upon the exercise of warrants or other
securities convertible into Class A Common Stock, provided, that the number
of shares of Class A Common Stock issued in the aggregate upon all such
exercises may not reduce by more than seven percent (7%) the percentage of
ownership held of record by any stockholder of the Corporation on October
31, 1997 of the Class A Common Stock and Class B Common Stock, taken
together as one class for purposes of this calculation, issued and
outstanding on October 31, 1997.
x. The adoption of a stock option plan or other program
conferring rights to acquire shares of the Corporation's capital stock,
except for adoption of an employee stock option plan pursuant to which
options granted to purchase shares of the Corporation's Common Stock shall
conform to the following: (A)(x) all options granted under such a
permitted plan shall be in an aggregate amount not to exceed 20% of the
Corporation's aggregate issued and outstanding Class A Common Stock and
Class B Common Stock at the time of grant of the options, (y) shares of
Class B Common Stock issued upon exercise of options granted under such a
permitted plan shall not exceed 10% of the Corporation's issued and
outstanding Class B Common Stock at any time, and (z) all options granted
under such a permitted Plan may be granted to employees and consultants but
not directors of the Corporation. (B) All such options shall be
exercisable at an exercise price no less than fair market value on the date
of grant, and shall permit the option recipient to have the options vest no
more rapidly than ratably over a four-year period from the date of grant,
or in the alternative shall not permit the recipient to retain, free from
the Corporation's right of repurchase, any shares purchased by the option
recipient upon exercise of the option except pursuant to a vesting schedule
whereby the Corporation's right to repurchase such shares shall expire no
faster than ratably over a four-year period from the date of the grant.
(C) All of such option grants shall further provide for a right of first
refusal for the Corporation to purchase any of the shares offered for sale
by the option recipient or, if the Corporation should decline, then its
stockholders other than the option recipient, each pro rata to its
stockholdings, with the right to oversubscribe for any shares not purchased
by the other stockholders.
xi. The adoption of an annual budget, or the adoption of any
changes thereto, which anticipates a loss (provided, that for purposes of
determining whether an annual budget anticipates a loss, up to $1 million
of extraordinary losses shall be ignored) or which calls for capital
expenditures in excess of the total Operating Cash Flow for the year just
concluded and as projected for the current year, and the adoption of any
budget which allocates less funds to optically variable pigment research
and development for the current year than 3% of the optically variable
pigment sales for the preceding year. "Operating Cash Flow" for this
purpose shall mean the total of operating earnings, depreciation and
amortization.
xii. Any declaration of dividends or other stockholder
distributions.
xiii. Any election to dissolve the Corporation except where
grounds for an involuntary dissolution exist, or where the electing
stockholder has first offered its shares to the other stockholders at a
price to be negotiated or determined by a neutral appraisal, and the other
stockholders have rejected the offer to purchase the electing stockholder's
shares.
xiv. The execution of any contract or entering into of any
agreement between the Corporation and a stockholder or affiliate of a
stockholder.
VIII.
PREEMPTIVE RIGHTS
Except as provided below in this Article VIII, the Corporation shall
not offer, issue or sell, or enter into any agreements or commitments
pursuant to which it may become obligated to issue, any shares of its
Common Stock or any warrants, options or other securities convertible into
shares of its capital stock, unless the Corporation shall first offer to
sell to each of the holders of its Common Stock, on the same terms and
conditions and at the same price, all such securities proposed to be
offered by the Corporation, each pro rata to its proportionate ownership of
such stock. Each holder of Common Stock, without right of assignment,
shall have the right to purchase up to its pro rata interest of the shares
proposed to be offered by the Corporation. Such offer shall remain
outstanding for at least 30 days following the date of notice. The
foregoing preemptive rights shall not apply to the issuance by the
Corporation of (1) any stock options or stock bonuses to any employees,
directors or consultants of the Corporation or any stock sold to any
employees of the Corporation pursuant to an employee stock purchase plan;
(2) shares of stock issued pursuant to the exercise of any stock options
granted to employees, directors or consultants of the Corporation; or
(3) any shares of the Common Stock of the Corporation which are offered and
issued in an underwritten initial public offering and registered pursuant
to the Securities Act of 1933, as amended.
IX.
REGISTERED AGENT
The address of the Corporation's registered office in the State of
Delaware is Corporation Trust Center, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxx
Xxxxxx Xxxxxx, 00000. The name of the Corporation's Registered Agent at
such address is The Corporation Trust Company.
X.
LIMITATION OF LIABILITY OF DIRECTORS
A director of the Corporation shall not be liable to the Corporation
or its stockholders for monetary damages for breach of fiduciary duty as
director except for liability which, by express provision of Delaware Law
cannot be eliminated. Any repeal or amendment of the provisions of this
Article X shall not adversely affect any right or protection of any
director in respect of any act or omission occurring prior to the time of
such repeal or amendment.
XI.
INDEMNIFICATION
78
The Corporation is authorized to provide indemnification to the
fullest extent permitted by Section 145 of the General Corporation Law of
Delaware, as the same may be amended and supplemented, to any and all
persons whom it shall have power to indemnify under said section, and to
advance expenses, as is provided in such section, including reasonable
attorney's fees, of any and all such persons, through Bylaw provisions, by
agreement or otherwise.
IN WITNESS WHEREOF, this Restated Certificate of Incorporation has
been signed under the seal of the Corporation on November 19, 1997.
(Seal)
/s/Xxxxxx X. Xxxx
Xxxxxx X. Xxxx, Secretary
EXHIBIT D
By-Law Amendment
Audit Committee. The Board of Directors shall appoint an Audit
Committee, the responsibility of which shall be (i) to review with
management and the corporation's independent public accountant the scope of
services required by its audit, significant accounting policies, and audit
conclusions regarding significant accounting estimates, (ii) to review with
management and the corporation's independent public accountant their
assessments of the adequacy of internal controls, and the resolution of
identified material weaknesses and reportable conditions in internal
controls, including the prevention or detection of management override or
compromise of the internal control systems, (iii) to review with management
and the corporation's independent public accountant the institution's
compliance with applicable laws, (iv) to discuss with management the
selection and termination of the corporation's independent public
accountant and any significant disagreements between the accountants and
management, (v) to oversee the internal audit function, and (vi) such other
duties as the Board of Directors may designate. The Audit Committee shall
maintain minutes and other relevant records of its meetings, shall meet at
any time upon the request of any member of the Board of Directors and shall
make a report to the full Board of Directors at the meeting of the Board of
Directors next succeeding any meeting of the Audit Committee. The
composition of the Audit Committee shall be one director designated by
SICPA, one director designated by OCLI, and one member of senior management
of the corporation who is not otherwise employed by either SICPA or OCLI.
This provision may not be amended unless and until the corporation
consummates an underwritten public offering of its common stock registered
under the Securities Act of 1933.
EXHIBIT E
FIRST AMENDMENT TO LICENSE AGREEMENT
BY AND BETWEEN
OPTICAL COATING LABORATORY, INC.
AND
FLEX PRODUCTS, INC.
NOVEMBER 19, 1997
FIRST AMENDMENT TO LICENSE AGREEMENT
FIRST AMENDMENT TO LICENSE AGREEMENT, made and entered into this 19th
day of November, 1997, by and between Optical Coating Laboratory, Inc., a
Delaware corporation, having its principal office at 0000 Xxxxxxxxxx
Xxxxxxx, Xxxxx Xxxx, Xxxxxxxxxx 00000-0000 (hereinafter referred to as
"OCLI") and Flex Products, Inc., a Delaware corporation, having its
principal place of business at 0000 Xxxxxxx Xxx, Xxxxx Xxxx, Xxxxxxxxxx
00000-0000 (hereinafter referred to as "FLEX").
W I T N E S S E T H:
WHEREAS, OCLI and FLEX are currently parties to a License Agreement
dated as of December 19, 1988 (the "License Agreement"); and
WHEREAS, OCLI and Flex wish to amend the License Agreement.
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, OCLI and FLEX agree as follows:
Section 2.2 of the License Agreement is hereby amended and replaced to
read in full as follows:
2.2. License to OCLI. FLEX hereby grants to OCLI, in
perpetuity, a worldwide and nontransferable (except such transfers as
are provided for in Section 7.3 hereof as to OCLI) license and right
under the FLEX TECHNOLOGY and FLEX RIGHTS exclusively in the OCLI
FIELD and nonexclusively in the SHARED FIELD; and FLEX hereby further
grants (subject to clause (ii) below) to OCLI, in perpetuity, a
worldwide license and right under the FLEX TECHNOLOGY and FLEX RIGHTS
(i) (A) on a transferable basis, to manufacture and subsequently sell
on an exclusive basis products by means of multi-layer automatic
continuous coating ("MAC") technology on rolls of extruded sheet
aluminum and (B) on a nontransferable basis (except as provided below)
to manufacture and subsequently sell on a nonexclusive basis
antireflective film for display devices using roll-to-roll coating,
and (ii) on an exclusive and nontransferable basis to manufacture and
subsequently sell products within the United States which, but only
for so long as, FLEX may neither manufacture nor sell under the laws
of the United States, provided, however, that such license under this
Section 2.2(ii) shall continue (but on a nonexclusive basis) for as
long as necessary to allow OCLI to complete performance of any
contract entered into during the period of the exclusive license. The
rights granted pursuant to Section 2.2(i)(B) may be sublicensed by
OCLI, without the right to further sublicense or transfer on the part
of the sublicensee, for the limited purpose of manufacturing for OCLI;
provided, however, that any such sublicense shall contain reasonable
confidentiality covenants and restrictions on use of the licensed
technology to prevent competition with FLEX; and further provided that
OCLI shall give SICPA notice of any such sublicense promptly after
execution.
Article IV of the License Agreement is hereby amended and replaced to
read in full as follows:
ARTICLE IV
ROYALTIES
4.1. FLEX Running Royalties. FLEX shall pay OCLI running
royalties as set forth below based on Net Sales of FLEX:
Contract Year (Commencing December 19, 1988)
Royalty
One 10% of Net Sales during
year one
Two 8% of Net Sales during
year two
Three 6% of Net Sales during
year three
Four 5% of Net Sales during
year four
Five and thereafter 4% of Net Sales during
year five and any
year thereafter
Royalty payments, in accordance with this Section 4.1, shall,
regardless of the TERM, continue to be paid by FLEX until such time as
cumulative royalties equal to Thirteen Million Seven Hundred Thousand
Dollars ($13,700,000) have been paid by FLEX to OCLI, at which time
the license granted to FLEX under this Agreement shall be fully paid
up. FLEX shall have the right at any time to accelerate the payment
of the foregoing royalties.
4.2 OCLI Running Royalties. OCLI shall pay to FLEX running
royalties based on sales by OCLI and its affiliates of products
pursuant to the license granted under Section 2.2(i)(B) as follows:
Annual Net Sales Royalty
Up to $6,000,000 0%
$6,000,000 to $8,000,000 3%
Greater then $8,000,000 2%
Royalty payments, in accordance with this Section 4.2, shall,
regardless of the TERM, continue to be paid by OCLI until October 31,
2007. OCLI shall also pay, at its sole cost and expense, all research
and development costs incurred after October 31, 1997 relating to the
technology covered by the license granted under Section 2.2(i)(B).
4.3. Net Sales Determination. Net Sales shall be as determined
in accordance with United States generally accepted accounting
principles applied on a consistent basis.
4.4. Royalty Payments Due. Royalty payments by FLEX shall be
paid quarterly based upon financial statements for the respective
periods, such quarterly payments to be due and payable forty-five (45)
days and ninety (90) days after the close of each of the first three
fiscal quarters and the fourth quarter, respectively. Royalty
payments by OCLI shall be paid annually ninety (90) days after the
close of OCLI's fiscal year.
4.5. Maintenance of Records. FLEX and OCLI shall keep, as long
as the obligation to pay royalties continues, true and accurate
records, files and books of account containing all of the data
reasonably required for the full computation and verification of the
amounts to be paid and the information to be given in the statements
provided for herein. FLEX shall, during usual business hours, permit
representatives designated by OCLI, at OCLI's expense and by prior
arrangement, adequately to inspect the same for the purpose of
determining the amounts payable to OCLI pursuant to this Article IV.
OCLI shall, during usual business hours, permit representatives
designated by FLEX, at FLEX's expense and by prior arrangement,
adequately to inspect the same for the purpose of determining the
amounts payable to FLEX pursuant to this Article IV.
4.6. Finance Charge for Payments Past Due. Without prejudice to
any other rights and remedies, in law or in equity, or under the
provisions hereof, to which either party may be entitled, each party
shall pay an amount to the other party from the date due to the date
of payment upon any and all amounts overdue and payable hereunder at a
rate or rates which are one percent (1%) per year above the prime
interest rate or rates prevailing at the Bank of America, San
Francisco, California, from time to time during the period that any
such amounts are overdue, provided that if such rate or rates shall be
in excess of any legal limit thereon, then the rate shall be reduced
to the highest rate legally allowed.
4.7. Payment in U.S. Currency. All amounts payable hereunder
shall be paid in United States Dollars, and shall be made at such
places within the United States as OCLI may direct in writing from
time to time.
4.8. Single Royalty Payment4.8. Single Royalty Payment. FLEX
and OCLI shall only be required to make one royalty payment on any
unit of product.
4.9. Allocation of Royalties for Products Incorporating AR
Products. Royalties due under Section 4.2 for products manufactured
and sold under the license granted to OCLI pursuant to Section
2.2(i)(B) shall be based on Net Sales of antireflective film by OCLI
and its affiliates to non-affiliated customers. In the event
antireflective film manufactured under the license granted pursuant to
Section 2.2(i)(B) is incorporated as a component into other products
which are then sold by OCLI, the royalties due under Section 4.2 for
the antireflective film utilized in the manufacture of such other
products shall be based upon the weighted average price of
antireflective film sold by OCLI to non-affiliated customers during
the annual period for which royalties are due. In the event there are
no sales of antireflective film by OCLI to non-affiliated customers
during such annual period, the royalty due under Section 4.2 shall be
determined by multiplying the Net Sales of such other products by a
fraction the numerator of which is the cost of manufacture of the
antireflective film utilized in the manufacture of such other products
and the denominator is the total cost of manufacture of the components
of such other products. For the purpose of this section, "cost" shall
be determined in accordance with generally accepted cost accounting
standards utilized by OCLI in the performance of United States
government contracts.
IN WITNESS WHEREOF, OCLI and FLEX have caused this First Amendment to
License Agreement to be executed by their duly authorized officers and
representatives as of the date set forth above.
OPTICAL COATING LABORATORY, INC.
By /s/Xxxxxx Xxxx
FLEX PRODUCTS, INC.
By /s/Xxxxxxx X. Xxxxxx, Xx.
