<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Envirogen, Inc.
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(Name of Issuer)
Common Stock, par value $.01
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(Title of Class of Securities)
294040100
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(CUSIP Number of Class of Securities)
Reuben S. Leibowitz
E.M. Warburg Pincus & Co., LLC
466 Lexington Avenue
New York, New York 10017
(212) 878-0600
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
Copies to:
Steven J. Gartner
Willkie Farr & Gallagher
153 East 53rd Street
New York, NY 10022
(212) 821-8000
April 10, 1997
-------------------------------------------------------------
(Date of Event which Requires
Filing of this Schedule)
If the filing person has previously filed a statement on
Schedule 13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3)
or (4), check the following: |_|
Check the following box if a fee is being paid with this
statement:
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SCHEDULE 13D
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CUSIP No. 294040100 Page _____ of ____ Pages
---------
- ------------------------------- --------------------------------
- --------------------------------------------------------------------------------
1 NAME OF REPORT PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Warburg, Pincus Ventures, L.P. I.D. #13-3784037
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
0 shares of Common Stock
-----------------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 6,095,238 shares of Common Stock
OWNED BY -----------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0 shares of Common Stock
PERSON WITH -----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
6,095,238 shares of Common Stock
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
6,095,238 shares of Common Stock
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
26.3%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
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SCHEDULE 13D
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CUSIP No. 294040100 Page _____ of ____ Pages
---------
- ------------------------------- --------------------------------
- --------------------------------------------------------------------------------
1 NAME OF REPORT PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Warburg, Pincus & Co. I.D. #13-6358475
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
N/A
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
0 shares of Common Stock
-----------------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 6,095,238 shares of Common Stock
OWNED BY -----------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0 shares of Common Stock
PERSON WITH -----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
6,095,238 shares of Common Stock
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
6,095,238 shares of Common Stock
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
26.3%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
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CUSIP No. 294040100 Page _____ of ____ Pages
---------
- ------------------------------- --------------------------------
- --------------------------------------------------------------------------------
1 NAME OF REPORT PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
E.M. Warburg, Pincus & Co., LLC I.D. #13-3536050
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
N/A
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
0 shares of Common Stock
-----------------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 6,095,238 shares of Common Stock
OWNED BY -----------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0 shares of Common Stock
PERSON WITH -----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
6,095,238 shares of Common Stock
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
6,095,238 shares of Common Stock
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
26.3%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
This Schedule 13D is being filed on behalf of Warburg, Pincus Ventures,
L.P., a Delaware limited partnership ("Ventures"), Warburg, Pincus & Co., a New
York general partnership ("WP"), and E.M. Warburg, Pincus & Co., LLC, a New York
limited liability company ("EMW"), relating to the common stock, par value $.01
per share (the "Common Stock"), of Envirogen, Inc., a Delaware corporation (the
"Company"). Of the Reporting Entities (as defined below), only Ventures has
acquired direct ownership of the Common Stock.
Item 1. Security and Issuer.
This statement on Schedule 13D relates to the Common Stock, par value $.01
per share, of the Company, and is being filed pursuant to Rule 13d-1 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). The address of
the principal executive offices of the Company is Princeton Research Center,
4100 Quakerbridge Road, Lawrenceville, NJ 08648.
Item 2. Identity and Background.
(a) This statement is filed by Ventures, WP and EMW. The sole general
partner of Ventures is WP. EMW manages Ventures. Lionel I. Pincus is the
managing partner of WP and the managing member of EMW and may be deemed to
control both WP and EMW. WP has a 15% interest in the profits of Ventures as the
general partner, and also owns approximately 1.5% of the limited partnership
interests in Ventures. Ventures, WP and EMW are hereinafter collectively
referred to as the "Reporting Entities."
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The general partners of WP and the members of EMW are described in Schedule I
hereto.
(b) The address of the principal business and principal office of each of
the Reporting Entities is 466 Lexington Avenue, New York, New York 10017.
(c) The principal business of Ventures is that of a partnership engaged in
making venture capital and related investments. The principal business of WP is
acting as general partner of Ventures, Warburg Pincus Investors, L.P., Warburg,
Pincus Capital Company, L.P. and Warburg, Pincus Capital Partners, L.P. The
principal business of EMW is acting as manager of Ventures, Warburg, Pincus
Investors, L.P., Warburg, Pincus Capital Company, L.P. and Warburg, Pincus
Capital Partners, L.P.
(d) None of the Reporting Entities, nor, to the best of their knowledge, any
of the directors, executive officers, general partners or members referred to in
paragraph (a) has, during the last five years, been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors).
(e) None of the Reporting Entities nor, to the best of their knowledge, any
of the directors, executive officers, general partners or members referred to in
paragraph (a) above has, during the last five years, been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction and as
a result of such proceeding was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or
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mandating activities subject to, federal or state securities laws or finding any
violation with respect to such laws.
(f) Except as otherwise indicated on Schedule I hereto, each of the
individuals referred to in paragraph (a) above is a United States citizen.
Item 3. Source and Amount of Funds or Other Consideration.
The total amount of funds required by Ventures to purchase the Shares (as
defined below), pursuant to the Purchase Agreement described in Item 4, was
$15,999,999.75, and was furnished from the working capital of Ventures.
Item 4. Purpose of Transaction.
On January 14, 1997, the Company entered into a Stock Purchase Agreement
(the "Purchase Agreement") with Ventures pursuant to which Ventures agreed to
purchase 6,095,238 shares of Common Stock (the "Shares") for an aggregate
purchase price of $15,999,999.75 (the "Purchase"). Pursuant to the Purchase
Agreement, the Company agreed to issue the Shares to Ventures in consideration
of the purchase price and certain rights under the Purchase Agreement and the
Registration Rights Agreement (as defined), as described below. The closing of
the Purchase occurred on April 10, 1997 (the "Closing Date").
Registration Rights. Pursuant to a Registration Rights Agreement (the
"Registration Rights Agreement"), dated April 10, 1997, between Ventures, the
Company and the former shareholders of Fluid Management, Inc., a Wisconsin
corporation ("FMI"), the
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Company has agreed to file and cause to be declared effective, as soon as
practicable after the Closing Date, but in any event within nine months after
the Closing Date, a registration statement (the "Shelf Registration Statement")
pursuant to Rule 415 under the Securities Act of 1933, as amended (the
"Securities Act"), relating to the offer and sale of (i) the Shares by Ventures
and (ii) the shares (the "Merger Shares") of Common Stock acquired by the former
shareholders of FMI pursuant to the Merger Agreement (as defined).
The obligation of the Company to continue the effectiveness of the Shelf
Registration Statement shall terminate when, in the opinion of counsel to the
Company, all of the Shares and the Merger Shares could be sold by the holders
thereof in any 90-day period pursuant to Rule 144 under the Securities Act
(without giving effect to the provisions of Rule 144(k)).
Transfer of Shares. Pursuant to the terms of the Purchase Agreement,
Ventures has agreed that it will not sell or otherwise transfer any Shares
without the prior written consent of the Company for a period of one year after
the Closing Date.
Board Representation. Under the Purchase Agreement, for so long as Ventures
owns beneficially (within the meaning of Rule 13d-3 under the Exchange Act) at
least 7.5% of the issued and outstanding shares of the Common Stock, the Company
will nominate and use its best efforts to elect and to cause to remain as a
director on the Company's Board of Directors one individual as
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Ventures may designate. Any vacancy created by the death, disability, retirement
or removal of any such individual may be filled by Ventures. The initial
designee of Ventures was Robert S. Hillas, who is a general partner of WP and a
member of EMW. Mr. Hillas was elected on April 9, 1997 to the Company's Board of
Directors.
Merger Agreement. The proceeds of the Purchase were used by the Company
primarily to finance the acquisition of all the voting securities of FMI,
pursuant to a certain Agreement and Plan of Merger, dated January 14, 1997 (the
"Merger Agreement"), among the Company, FMI, and the shareholders of FMI. The
closing of the transactions contemplated by the Merger Agreement occurred
simultaneously with the closing of the Purchase.
The foregoing descriptions of the Purchase Agreement and the Registration
Rights Agreement are qualified in their entirety by reference to the Purchase
Agreement and the Registration Rights Agreement, which are attached hereto as
Exhibit 1 and Exhibit 2, respectively, and are incorporated herein by reference.
The purchase was effected because of the Reporting Entities' belief that the
Company represents an attractive investment. As contemplated by the terms of the
Purchase Agreement, Robert S. Hillas, who is a general partner of WP and a
member of EMW, was elected on April 9, 1997 to the Company's Board of Directors.
Mr. Hillas disclaims beneficial ownership (within the meaning of Rule 13d-3
under the Exchange Act) of the Common Stock owned by
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Ventures. The Reporting Entities presently expect to limit their involvement in
the management of the Company to representation on the Board of Directors.
The Reporting Entities may from time to time acquire additional shares of
Common Stock or dispose of shares of Common Stock through open market or
privately negotiated transactions or otherwise, depending on existing market
conditions and other considerations discussed below. The Reporting Entities
intend to review their investment in the Company on a continuing basis and,
depending upon the price and availability of shares of Common Stock, subsequent
developments affecting the Company, the Company's business and prospects, other
investment and business opportunities available to the Reporting Entities,
general stock market and economic conditions, tax considerations and other
factors considered relevant, may decide at any time not to increase, or to
decrease, the size of their investment in the Company.
Except as set forth herein or in Item 6, none of the Reporting Entities nor,
to the best of their knowledge, any person listed in Schedule I hereto, has any
plans or proposals which relate to or would result in: (a) the acquisition by
any person of additional securities of the Company, or the disposition of
securities of the Company; (b) an extraordinary corporate transaction, such as a
merger, reorganization or liquidation, involving the Company or any of its
subsidiaries; (c) a sale or
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transfer of a material amount of assets of the Company or any of its
subsidiaries; (d) any change in the present Board of Directors or management of
the Company, including any plans or proposals to change the number or term of
directors or to fill any existing vacancies on the board; (e) any material
change in the present capitalization or dividend policy of the Company; (f) any
other material change in the Company's business or corporate structure; (g)
changes in the Company's charter, By-Laws or instruments corresponding thereto
or other actions which may impede the acquisition of control of the Company by
any person; (h) causing a class of securities of the Company to be delisted from
a national securities exchange or to cease to beauthorized to be quoted in an
inter-dealer quotation system of a registered national securities association;
(i) a class of equity securities of the Company becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Exchange Act; or
(j) any action similar to any of those enumerated above.
Item 5. Interest in Securities of the Issuer.
(a) As of April 11, 1997, Ventures beneficially owned 6,095,238 shares
of Common Stock. By reason of their respective relationships with Ventures, each
of the Reporting Entities may be deemed under Rule 13d-3 under the Exchange Act
to own beneficially all of the shares of Common Stock which Ventures
beneficially owns. As of April 11, 1997, the shares of Common Stock held by the
Reporting Entities represented approximately 26.3% of the
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outstanding shares of Common Stock, based on 23,161,135 shares of Common Stock
reported to be outstanding as disclosed in the Company's report on Form 10-C to
The Nasdaq Stock Market, dated April 10, 1997.
(b) The Reporting Entities together share the power to vote or to direct the
vote, and to dispose or to direct the disposition of the Shares held by them.
(c) Except for the Purchase, none of the Reporting Entities nor, to the best
of their knowledge, any person listed in Schedule I hereto, has effected any
transactions in the Common Stock during the preceding 60 days.
(d) Except as set forth in this Item 5, no person other than each respective
record owner referred to herein of securities is known to have the right to
receive or the power to direct the receipt of dividends from, or the proceeds
from the sale of, such securities.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or
Relationships With Respect to Securities of the Issuer.
Pursuant to Rule 13d-1(f) promulgated under the Exchange Act, the Reporting
Persons have entered into an agreement with respect to the joint filing of this
statement, and any amendment or amendments hereto, which is being filed as
Exhibit 3 to this Schedule 13D and is incorporated herein by reference.
As described in Item 4, Ventures and the Company have agreed, pursuant to
the Purchase Agreement and the Registration Rights
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<PAGE>
Agreement, to certain terms with respect to registration and sale of shares of
the Common Stock, as well as to rights of representation on the Company's Board
of Directors. The information set forth in Item 4 above is incorporated herein
by reference.
Except as described herein and by reference to Item 4 above, there are no
contracts, arrangements, understandings or relationships among the persons named
in Item 2 or between such persons and any other person with respect to any
securities of the Company.
By virtue of the relationships among the Reporting Entities as described in
Item 2, the Reporting Entities may be deemed to be a "group" under the Federal
securities laws. Lionel I. Pincus disclaims any beneficial ownership of the
Shares reported herein as being beneficially owned by the Reporting Entities.
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<PAGE>
Item 7. Material to be Filed as Exhibits.
1. Securities Purchase Agreement, dated January 14, 1997, by and between the
Company and Ventures.
2. Registration Rights Agreement, dated as of April 10, 1997, by and among
the Company, Ventures and the former shareholders of FMI.
3. Joint Filing Agreement, dated April 18, 1997, by and among the Reporting
Entities.
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SIGNATURES
After reasonable inquiry and to the best of our knowledge and belief, the
undersigned certify that the information set forth in this statement is true,
complete and correct.
Dated: April 18, 1997 WARBURG, PINCUS VENTURES, L.P.
By: Warburg, Pincus & Co.,
General Partner
By:/s/ Robert S. Hillas
-------------------------------
Robert S. Hillas
Partner
Dated: April 18, 1997 WARBURG, PINCUS & CO.
By:/s/ Robert S. Hillas
-------------------------------
Robert S. Hillas
Partner
Dated: April 18, 1997 E.M. WARBURG, PINCUS & CO., LLC
By:/s/ Robert S. Hillas
-------------------------------
Robert S. Hillas
Member
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<PAGE>
SCHEDULE I
Set forth below is the name, position and present principal occupation of
each of the general partners of Warburg, Pincus & Co. ("WP") and each of the
members of E.M. Warburg, Pincus & Co., LLC ("EMW"). The sole general partner of
Warburg, Pincus Ventures, L.P. ("Ventures") is WP. WP, EMW and Ventures are
hereinafter collectively referred to as the "Reporting Entities." Except as
otherwise indicated, the business address of each of such persons is 466
Lexington Avenue, New York, New York 10017, and each of such persons is a
citizen of the United States.
General Partners of WP
----------------------
Present Principal Occupation
Name in Addition to Position with WP
- ---- -------------------------------
Susan Black Managing Director and Member,
EMW
Christopher W. Brody Managing Director and Member,
EMW
Harold Brown Senior Managing Director and
Member, EMW
Errol M. Cook Managing Director and Member,
EMW
W. Bowman Cutler Managing Director and Member,
EMW
Elizabeth B. Dater Managing Director and Member,
EMW
Stephen Distler Managing Director, Member and
Treasurer, EMW
Harold W. Ehrlich Managing Director and Member,
EMW
Louis G. Elson Managing Director and Member,
EMW
John L. Furth Vice Chairman of the Board and
Member, EMW
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Stewart K.P. Gross Managing Director and Member,
EMW
Patrick T. Hackett Managing Director and Member,
EMW
Jeffrey A. Harris Managing Director and Member,
EMW
Robert S. Hillas Managing Director and Member,
EMW
A. Michael Hoffman Managing Director and Member,
EMW
William H. Janeway Managing Director and Member,
EMW
Douglas M. Karp Managing Director and Member,
EMW
Charles R. Kaye Managing Director and Member,
EMW
Henry Kressel Managing Director and Member,
EMW
Joseph P. Landy Managing Director and Member,
EMW
Sidney Lapidus Managing Director and Member,
EMW
Kewsong Lee Managing Director and Member,
EMW
Reuben S. Leibowitz Managing Director and Member,
EMW
Brady T. Lipp Managing Director and Member,
EMW
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Stephen J. Lurito Managing Director and Member,
EMW
Spencer S. Marsh III Managing Director and Member,
EMW
Lynn C. Martin Managing Director and Member,
EMW
Edward J. McKinley Managing Director and Member,
EMW
Rodman W. Moorhead III Senior Managing Director and
Member, EMW
Howard H. Newman Managing Director and Member,
EMW
Gary D. Nusbaum Managing Director and Member,
EMW
Anthony G. Orphanos Managing Director and Member,
EMW
Dalip Pathak Managing Director and Member,
EMW
Daphne D. Philpson Managing Director and Member,
EMW
Lionel I. Pincus Chairman of the Board, CEO, and
Managing Member, EMW; and
Managing Partner, Pincus & Co.
Eugene L. Podsiadlo Managing Director and Member,
EMW
Ernest H. Pomerantz Managing Director and Member,
EMW
Brian S. Posner Managing Director and Member,
EMW
Arnold M. Reichman Managing Director and Member,
EMW
Roger Reinlieb Managing Director and Member,
EMW
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John D. Santoleri Managing Director and Member,
EMW
Sheila N. Scott Managing Director and Member,
EMW
Peter Stalker III Managing Director and Member,
EMW
David A. Tanner Managing Director and Member,
EMW
James E. Thomas Managing Director and Member,
EMW
John L. Vogelstein Vice Chairman of the Board and
Member, EMW
Elizabeth H. Weatherman Managing Director and Member,
EMW
Joanne R. Wenig Managing Director and Member,
EMW
George U. Wyper Managing Director and Member,
EMW
Pincus & Co.*
NL & Co.**
* Pincus & Co. is a New York limited partnership whose primary activity is
ownership interest in WP and EMW.
** NL & Co. is a New York limited partnership whose primary activity is
ownership interest in WP.
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Members of EMW
--------------
Present Principal Occupation in
Name Addition to Position with EMW
- ---- -------------------------------
Susan Black Partner, WP
Christopher W. Brody Partner, WP
Harold Brown Partner, WP
Dale C. Christensen (1)
Errol M. Cook Partner, WP
W. Bowman Cutter Partner, WP
Elizabeth B. Dater Partner, WP
Stephen Distler Partner, WP
P. Nicholas Edwards(2)
Harold W. Ehrlich Partner, WP
Louis G. Elson Partner, WP
John L. Furth Partner, WP
Stewart K.P. Gross Partner, WP
Patrick T. Hackett Partner, WP
Jeffrey A. Harris Partner, WP
Robert S. Hillas Partner, WP
A. Michael Hoffman Partner, WP
William H. Janeway Partner, WP
Douglas M. Karp Partner, WP
____________________________
(1) Citizen of Canada
(2) Citizen of United Kingdom
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Charles R. Kaye Partner, WP
Richard H. King (2)
Henry Kressel Partner, WP
Joseph P. Landy Partner, WP
Sidney Lapidus Partner, WP
Kewsong Lee Partner, WP
Reuben S. Leibowitz Partner, WP
Brady T. Lipp Partner, WP
Stephen J. Lurito Partner, WP
Spencer S. Marsh III Partner, WP
Lynn C. Martin Partner, WP
Edward J. McKinley Partner, WP
Rodman W. Moorhead III Partner, WP
Howard H. Newman Partner, WP
Gary D. Nusbaum Partner, WP
Anthony G. Orphanos Partner, WP
Dalip Pathak Partner, WP
Philip C. Percival (2)
Daphne D. Philipson Partner, WP
Lionel I. Pincus Managing Partner, WP; and
Managing Partner, Pincus & Co.
Eugene L. Podsiadlo Partner, WP
Ernest H. Pomerantz Partner, WP
Brian S. Posner Partner, WP
Arnold M. Reichman Partner, WP
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Roger Reinlieb Partner, WP
John D. Santoleri Partner, WP
Sheila N. Scott Partner, WP
Dominic H. Shorthouse (2)
Peter Stalker III Partner, WP
Chang Q. Sun (3)
David A. Tanner Partner, WP
James E. Thomas Partner, WP
John L. Vogelstein Partner, WP
Elizabeth H. Weathermen Partner, WP
Joanne R. Wenig Partner, WP
George U. Wyper Partner, WP
Pincus & Co.*
* Pincus & Co. is a New York limited partnership whose primary activity is
ownership interest in WP and EMW.
___________________________
(3) Citizen of People's Republic of China
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- --------------------------------------------------------------------------------
SECURITIES PURCHASE AGREEMENT
between
WARBURG, PINCUS VENTURES, L.P.
and
ENVIROGEN, INC.
January 14, 1997
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<PAGE>
TABLE OF CONTENTS
PAGE
SECTION 1. PURCHASE AND SALE OF SECURITIES....................................2
1.1. Issuance of Common Stock........................................2
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY......................2
2.1. Corporate Organization..........................................2
2.2. Subsidiaries....................................................3
2.3. Capitalization..................................................3
2.4. Corporate Proceedings, etc......................................4
2.5. Consents and Approvals..........................................4
2.6. Absence of Defaults, Conflicts, etc.............................4
2.7. SEC Reports.....................................................4
2.8. Absence of Certain Developments.................................6
2.9. Compliance with Law.............................................6
2.10. Litigation.....................................................7
2.11. Material Contracts.............................................7
2.12. Absence of Undisclosed Liabilities.............................7
2.13. Employees......................................................8
2.14. Tax Matters....................................................8
2.15. Employee Benefit Plans.........................................8
2.16. Patents, Licenses, etc.........................................9
2.17. Title to Tangible Assets......................................10
2.18. Condition of Properties.......................................10
2.19. Insurance.....................................................10
2.20. Transactions with Related Parties.............................10
2.21. Interest in Competitors.......................................11
2.22. Registration Rights...........................................11
2.23. Private Offering..............................................11
2.24. Environmental.................................................11
2.25. Fluid Management Agreement Representations....................12
2.26. Brokerage.....................................................13
2.27. Illegal or Unauthorized Payments; Political
Contributions.................................................14
2.28. Takeover Statute..............................................14
2.29. Material Facts................................................14
SECTION 3. REPRESENTATIONS AND WARRANTIES OF WARBURG.........................14
SECTION 4. ADDITIONAL COVENANTS OF THE PARTIES...............................16
4.1. Resale of Securities...........................................16
4.2. Covenants Pending Closing......................................17
4.3. Further Assurance..............................................17
4.4. Board Nominee..................................................17
4.5. Hart-Scott-Rodino..............................................17
SECTION 5. WARBURG'S CLOSING CONDITIONS......................................18
5.1. Representations and Warranties.................................18
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5.2. Compliance with Agreement......................................18
5.3. Officer's Certificate..........................................18
5.4. Injunction.....................................................19
5.5. Counsel's Opinion..............................................19
5.6. Acquisition of Fluid Management................................19
5.7. Consents; Hart-Scott-Rodino....................................20
5.8. Election of Directors..........................................19
5.9. Registration Rights Agreement..................................19
5.10. Approval of Proceedings.......................................19
SECTION 6. COMPANY CLOSING CONDITIONS........................................20
6.1. Representations and Warranties.................................20
6.2. Compliance with Agreement......................................20
6.3. Warburg's Certificate..........................................20
6.4. Consents; Hart-Scott-Rodino....................................20
6.5. Injunction.....................................................20
6.6. Acquisition of Fluid Management................................19
SECTION 7. RESERVED..........................................................21
SECTION 8. COVENANTS.........................................................21
8.1. Confidentiality................................................21
8.2. Lost, etc. Certificates Evidencing Shares of
Common Stock; Exchange.........................................21
SECTION 9. INTERPRETATION OF THIS AGREEMENT..................................22
9.1. Terms Defined..................................................22
9.2. Accounting Principles..........................................23
9.3. Directly or Indirectly.........................................23
9.4. Governing Law..................................................23
9.5. Paragraph and Section Headings.................................24
SECTION 10. MISCELLANEOUS....................................................24
10.1. Notices.......................................................24
10.2. Expenses and Taxes............................................24
10.3. Reproduction of Documents.....................................25
10.4. Termination and Survival......................................25
10.5. Successors and Assigns........................................26
10.6. Entire Agreement; Amendment and Waiver........................26
10.7. Severability..................................................26
10.8. Limitation on Enforcement of Remedies.........................26
10.9. Counterparts..................................................26
EXHIBIT A Certificate of Incorporation of the Company
EXHIBIT B Bylaws of the Company
EXHIBIT C Form of Opinion of Company Counsel
ii
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ENVIROGEN, INC.
SECURITIES PURCHASE AGREEMENT
Dated as of January 14, 1997
Warburg, Pincus Ventures, L.P.
466 Lexington Avenue
New York, New York 10017
Dear Sirs:
Envirogen, Inc., a Delaware corporation (the "Company"),
hereby agrees with Warburg, Pincus Ventures, L.P., a Delaware limited
partnership ("Warburg"), as follows:
SECTION 1. PURCHASE AND SALE OF SECURITIES
-------------------------------
1.1. Issuance of Common Stock
------------------------
(a) Subject to the terms and conditions set forth in this Agreement
and in reliance upon the Company's and Warburg's representations set forth
below, on the Closing Date (as defined below) the Company shall sell to Warburg,
and Warburg shall purchase from the Company, 6,095,238 shares (the "Shares") of
the Company's Common Stock, par value $.01 per share (the "Common Stock"), at
the aggregate cash purchase price of $15,999,999.75 (the "Purchase Price"). Such
sale and purchase shall be effected on the Closing Date by the Company executing
and delivering to Warburg, duly registered in its name, a duly executed stock
certificate evidencing the Shares being purchased by it, against delivery by
Warburg to the Company of the Purchase Price by wire transfer of immediately
available funds to such account as the Company shall designate.
(b) The closing of such sale and purchase (the "Closing") shall take
place contemporaneously with the merger of Fluid Management, Inc. with and into
the Company pursuant to the Fluid Management Agreement, or such other date as
Warburg and the Company agree in writing (the "Closing Date"), at the offices of
Willkie Farr & Gallagher, 153 East 53rd Street, New York, New York, or such
other location as Warburg and the Company shall mutually select.
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SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
---------------------------------------------
The Company represents and warrants to Warburg that:
2.1. Corporate Organization
----------------------
(a) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware. Attached hereto as
Exhibits A and B, respectively, are true and complete copies of the Certificate
of Incorporation and Bylaws of the Company, each as amended through the date
hereof (collectively, the "Organizational Documents").
(b) The Company has all requisite power and authority and has all
necessary approvals, licenses, permits and authorization to own its properties
and to carry on its business as now conducted. The Company has all requisite
power and authority to execute and deliver this Agreement and to perform its
obligations hereunder.
(c) The Company has filed all necessary documents to qualify to do
business as a foreign corporation in, and the Company is in good standing under
the laws of, each jurisdiction in which the conduct of the Company's business or
the nature of the property owned requires such qualification, except where the
failure to so qualify would not have a material adverse affect on the business,
properties, prospects, profits or condition (financial or otherwise) of the
Company and its subsidiaries taken as a whole (a "Material Adverse Effect").
2.2. Subsidiaries
------------
Except as set forth on Schedule 2.2, the Company has no subsidiaries
and no interests or investments in any partnership, trust or other entity or
organization. Each subsidiary of the Company listed on Schedule 2.2 has been
duly incorporated, is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation, has the corporate power and
authority to own its properties and to conduct its business and is duly
registered, qualified and authorized to transact business and is in good
standing in each jurisdiction in which the conduct of its business or the nature
of its properties requires such registration, qualification or authorization,
except where the failure to so register, qualify or be authorized would not have
a Material Adverse Effect; all of the issued and outstanding capital stock of
each subsidiary has been duly authorized and validly issued, is fully paid and
non-assessable, and is owned by the Company free and clear of any mortgage,
pledge, lien, encumbrance, security interest, claim or equity.
2
<PAGE>
2.3. Capitalization
--------------
(a) On the date hereof, the authorized capital stock of the Company
consists of 20,000,000 shares of its Common Stock and 2,000,000 shares of its
preferred stock, par value $.01 per share (the "Preferred Stock"). As of the
Closing Date, the authorized capital stock of the Company will consist of
50,000,000 shares of its Common Stock and 2,000,000 shares of its Preferred
Stock. The issued and outstanding shares of capital stock of the Company on the
date hereof consist of 12,872,440 shares of Common Stock.
(b) All the outstanding shares of capital stock of the Company have
been duly and validly issued and are fully paid and non-assessable, and were
issued in accordance with the registration or qualification requirements of the
Securities Act and any relevant state securities laws or pursuant to valid
exemptions therefrom. Upon issuance, sale and delivery as contemplated by this
Agreement, the Shares will be duly authorized, validly issued, fully paid and
non-assessable shares of the Company, free of all preemptive or similar rights,
and entitled to the rights therein described.
(c) Except for the conversion rights which attach to the warrants,
options and convertible securities which are listed on Schedule 2.3 hereto, on
the Closing Date there will be no shares of Common Stock, Preferred Stock or any
other equity security of the Company issuable upon conversion or exchange of any
security of the Company nor will there be any rights, options or warrants
outstanding or other agreements to acquire shares of Common Stock or Preferred
Stock nor will the Company be contractually obligated to purchase, redeem or
otherwise acquire any of its outstanding shares. Schedule 2.3 sets forth the
exercise price, vesting provisions, expiration date and other material terms of
all warrants, options and convertible securities listed therein. No stockholder
of the Company is entitled to any preemptive or similar rights to subscribe for
shares of capital stock of the Company.
2.4. Corporate Proceedings, etc.
--------------------------
The Board of Directors of the Company has authorized the execution,
delivery, and performance of this Agreement and each of the transactions and
agreements contemplated hereby. No other corporate action (other than
stockholder approval) is necessary to authorize such execution, delivery and
performance of this Agreement, and this Agreement constitutes the valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, except that such enforcement may be subject to bankruptcy,
3
<PAGE>
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights and general principles of equity. The Board
of Directors of the Company has authorized the issuance and delivery of the
Shares in accordance with this Agreement.
2.5. Consents and Approvals
----------------------
The execution and delivery by the Company of this Agreement, the
performance by the Company of its obligations hereunder and the consummation by
the Company of the transactions contemplated hereby do not require the Company
or any of its subsidiaries to obtain any consent, approval or action of, or make
any filing with or give any notice to, any corporation, person or firm or any
public, governmental or judicial authority, except such approvals, consents, or
filings that have been made or obtained or as disclosed on Schedule 2.5.
2.6. Absence of Defaults, Conflicts, etc.
-----------------------------------
The execution and delivery of this Agreement do not, and the
fulfillment of the terms hereof by the Company, and the issuance of the Shares
will not, result in a breach of any of the terms, conditions or provisions of,
or constitute a default under, or permit the acceleration of rights under or
termination of, any material indenture, mortgage, deed of trust, credit
agreement, note or other evidence of indebtedness, or other material agreement
of the Company or any of its subsidiaries (collectively the "Key Agreements and
Instruments"), or the Organizational Documents, or any rule or regulation of any
court or federal, state or foreign regulatory board or body or administrative
agency having jurisdiction over the Company or any of its subsidiaries or over
their respective properties or businesses. No event has occurred and no
condition exists which, upon notice or the passage of time (or both), would
constitute a default under any such Key Agreements and Instruments or in any
license, permit or authorization to which the Company or any subsidiary is a
party or by which any of them may be bound.
2.7. SEC Reports
-----------
The Company has previously furnished Warburg with true and complete
copies of its (i) Annual Report on Form 10-K, as amended, for the fiscal year
ended December 31, 1995, as filed with the SEC, (ii) Quarterly Reports on Form
10-Q for the quarters ended March 31, 1996, June 30, 1996 and September 30,
1996, as filed with the SEC, (iii) proxy statements related to all meetings of
its stockholders (whether annual or special) since January 1, 1996 and (iv) all
other reports or registration statements filed by the Company with the SEC since
January 1,
4
<PAGE>
1996, except registration statements on Form S-8 relating to employee benefit
plans, which are all the documents (other than preliminary material) that the
Company was required to file with the SEC since that date (the documents
described in clauses (i) through (iv) being referred to herein collectively as
the "SEC Reports"). As of their respective dates, the SEC Reports complied in
all material respects with the requirements of the Securities Act or the
Exchange Act, as the case may be, and the rules and regulations of the SEC
thereunder applicable to such SEC Reports. As of their respective dates, the SEC
Reports did not contain any 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 light of the circumstances under which they were made,
not misleading. The audited consolidated financial statements and unaudited
interim financial statements of the Company included in the SEC Reports comply
as to form in all material respects with applicable accounting requirements and
with the published rules and regulations of the SEC with respect thereto. The
financial statements included in the SEC Reports: have been prepared in
accordance with generally accepted accounting principles ("GAAP") applied on a
consistent basis (except as may be indicated therein or in the notes thereto);
present fairly, in all material respects, the consolidated financial position of
the Company and its subsidiaries as at the dates thereof and the consolidated
results of their operations and cash flow for the periods then ended subject, in
the case of the unaudited interim financial statements, to normal year-end audit
adjustments and any other adjustments described therein and the fact that
certain information and notes have been condensed or omitted in accordance with
the Exchange Act and the rules promulgated thereunder; and are in all material
respects, in accordance with the books of account and records of the Company.
2.8. Absence of Certain Developments
-------------------------------
Except as disclosed in the SEC Reports or on Schedule 2.8, since
December 31, 1995, there has been no (i) material adverse change in the
condition, financial or otherwise, of the Company and its subsidiaries taken as
a whole or in their assets, liabilities, properties, or business or prospects,
(ii) declaration, setting aside or payment of any dividend or other distribution
with respect to the capital stock of the Company, (iii) issuance of capital
stock (other than pursuant to the exercise of options, warrants, or convertible
securities outstanding at such date) or options, warrants or rights to acquire
capital stock (other than the rights granted to Warburg hereunder), (iv)
material loss, destruction or damage to any property of the Company or any
subsidiary, whether or not insured, (v) acceleration or prepayment of any
indebtedness for
5
<PAGE>
borrowed money or the refunding of any such indebtedness, (vi) material labor
trouble involving the Company or any subsidiary or any material change in their
personnel or the terms and conditions of employment, (vii) waiver of any
valuable right, (viii) loan or extension of credit to any officer or employee of
the Company or any subsidiary or (ix) acquisition or disposition of any material
assets (or any contract or arrangement therefor), or any other material
transaction by the Company or any subsidiary otherwise than for fair value in
the ordinary course of business.
2.9. Compliance with Law
-------------------
(a) Neither the Company nor any of its subsidiaries is in material
violation of any laws, ordinances, governmental rules or regulations to which it
is subject, including without limitation laws or regulations relating to the
environment or to occupational health and safety, and no material expenditures
are or will be required in order to cause its current operations or properties
to comply with any such laws, ordinances, governmental rules or regulations.
(b) The Company and its subsidiaries have all licenses, permits,
franchises or other governmental authorizations necessary to the ownership of
their property or to the conduct of their respective businesses, which if
violated or not obtained is reasonably likely to have a Material Adverse Effect.
Neither the Company nor any subsidiary has finally been denied any application
for any such licenses, permits, franchises or other governmental authorizations
necessary to its business.
2.10. Litigation
` ----------
Except as disclosed in the SEC Reports or on Schedule 2.10, there is
no legal action, suit, arbitration or other legal, administrative or other
governmental investigation, inquiry or proceeding, whether federal, state, local
or foreign (collectively "Legal Proceedings"), pending or, to the best of the
Company's knowledge, threatened against or affecting the Company or any
subsidiary or any of their respective properties, assets or businesses, nor is
there any Legal Proceeding pending or, to the knowledge of the Company,
threatened, relating to this Agreement or the transactions contemplated hereby.
After reasonable inquiry of its officers, the Company is not aware of any fact
which might result in or form the basis for any Legal Proceeding which could
have a Material Adverse Effect. Neither the Company nor any subsidiary is
subject to any order, writ, judgment, injunction, decree, determination or award
of any court or of any governmental agency or instrumentality (whether federal,
state, local or foreign).
6
<PAGE>
2.11. Material Contract
-----------------
Except as disclosed in the SEC Reports or on Schedule 2.11, there
are no material contracts, agreements, instruments, commitments and other
arrangements to which the Company or any subsidiary is a party or otherwise
relating to or affecting any of their respective assets, including without
limitation, employment, severance or consulting agreements; loan, credit or
security agreements; joint venture agreements and distribution agreements (each,
a "Contract"). Each such Contract is valid, binding and enforceable against the
Company or such subsidiary and, to the Company's best knowledge, the other
parties thereto, in accordance with its terms, except that such enforcement may
be subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights and
general principles of equity. Each such Contract is in full force and effect on
the date hereof.
2.12. Absence of Undisclosed Liabilities
----------------------------------
Except as disclosed in the SEC Reports or on Schedule 2.12, neither
the Company nor any of its subsidiaries has any debt, obligation or liability
(whether accrued, absolute, contingent, liquidated or otherwise, whether due or
to become due, whether or not known to the Company) arising out of any
transaction entered into at or prior to the Closing, or any act or omission at
or prior to the Closing, or any state of facts existing at or prior to the
Closing, including taxes with respect to or based upon the transactions or
events occurring at or prior to the Closing, and including, without limitation,
unfunded past service liabilities under any pension, profit sharing or similar
plan, except current liabilities incurred, and obligations under agreements
entered into, in the usual and ordinary course of business, none of which
(individually or in the aggregate) could have a Material Adverse Effect.
2.13. Employees
---------
(a) The Company and its subsidiaries are in compliance with all
applicable foreign, federal, state and local laws and regulations regarding
occupational safety and health standards except to the extent that noncompliance
will not have a Material Adverse Effect, and has received no complaints from any
foreign, federal, state or local agency or regulatory body alleging violations
of any such laws and regulations.
(b) The Company is not aware that any of its employees is obligated
under any contract (including licenses, covenants or commitments of any nature)
or other agreement, or subject to any
7
<PAGE>
judgment, decree or order of any court or administrative agency, that would
interfere with the use of such employee's best efforts to promote the interests
of the Company or that would conflict with the Company's business as proposed to
be conducted.
(c) The Company is not aware that any officer or key employee, or
that any group of key employees, intends to terminate their employment with the
Company, nor does the Company have a present intention to terminate the
employment of any of the foregoing.
2.14. Tax Matters
-----------
There are no federal, state, county or local taxes due and payable
by the Company or any of its subsidiaries which have not been paid. The
provisions for taxes on the audited and unaudited balance sheets contained in
the SEC Reports are sufficient for the payment of all accrued and unpaid
federal, state, county and local taxes of the Company whether or not assessed or
disputed as of the respective dates of such balance sheets. The Company and its
subsidiaries have duly filed all federal, state, county and local tax returns
required to have been filed by it and there are in effect no waivers of
applicable statutes of limitations with respect to taxes for any year. Neither
the Company nor any of its subsidiaries has been subject to a federal or state
tax audit of any kind.
2.15. Employee Benefit Plans
----------------------
Except as disclosed on Schedule 2.15, the Company and its
subsidiaries have no employee benefit plans (as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974) covering former and current
employees of the Company or any of its subsidiaries, or under which the Company
or any of its subsidiaries has any obligation or liability. True and complete
copies of all material plans, contracts, bonuses, commissions, profit-sharing,
savings, stock options, insurance, deferred compensation, or other similar
fringe or employee benefits covering former or current employees of the Company
or any of its subsidiaries or under which the Company or any of its subsidiaries
has any obligation or liability (each, a "Benefit Arrangement") have been
provided or made available to Warburg prior to the date hereof. The Benefit
Arrangements are and have been administered in compliance in all material
respects with their terms and with the requirements of applicable law. Except as
disclosed on Schedule 2.15, all payments to current or former employees of the
Company or any of its subsidiaries pursuant to the Benefit Arrangements are and
have been fully deductible under the Code.
8
<PAGE>
2.16. Patents, Licenses, etc.
----------------------
Except as provided on Schedule 2.16, the Company or one of its
subsidiaries owns, free and clear of all encumbrances, restrictions, liens,
security interests and charges, and has good and marketable title to, or holds
adequate licenses or otherwise possess all such rights as are necessary to use
all patents (and applications therefor), patent disclosures, trademarks, service
marks, trade names, copyrights (and applications therefor), inventions,
discoveries, processes, know-how, scientific, technical, engineering and
marketing data, formulae and techniques used or proposed to be used, in or
necessary for the conduct of its business as now conducted or as proposed to be
conducted (collectively, "Intellectual Property").
Except as provided on Schedule 2.16, neither the Company nor any of
its subsidiaries has received notice nor otherwise has reason to know of any
conflict or alleged conflict with the rights of others pertaining to the
Intellectual Property described in this Section 2.16. To the Company's best
knowledge, the Company's business, as presently conducted and as proposed to be
conducted, does not infringe upon or violate any patent rights or trade secrets
of others. To the Company's best knowledge, the Company and its subsidiaries
have the unrestricted right to use, free and clear of any rights or claims of
others, all trade secrets, processes, customer lists and other rights incident
to their respective businesses as now conducted or as proposed to be conducted.
Except as disclosed in the SEC Reports or on Schedule 2.16, neither the Company
nor any of its subsidiaries is currently obligated or under any existing
liability to make royalty or other payments to any owner of, licensor of, or
other claimant to, any patent, trademark, service names, trade names,
copyrights, or other intangible asset, with respect to the use thereof or in
connection with the conduct of its business as now conducted or as proposed to
be conducted, or otherwise. To the Company's best knowledge, no employee of the
Company or any of its subsidiaries has violated any employment agreement or
proprietary information agreement which he had with a previous employer or any
patent policy of such employer, or is a party to or threatened by any litigation
concerning any patents, trademarks, trade secrets, service names, trade names,
copyrights, licenses and the like.
2.17. Title to Tangible Assets
------------------------
Except as disclosed in the SEC Reports, the Company and its
subsidiaries have good title to their properties and assets and good title to
all their leasehold estates, in each case
9
<PAGE>
subject to no mortgage, pledge, lien, lease, encumbrance or charge, other than
or resulting from taxes which have not yet become delinquent and minor liens and
encumbrances which do not in any case materially detract from the value of the
property subject thereto or materially impair the operations of the Company and
its subsidiaries and which have not arisen otherwise than in the ordinary course
of business.
2.18. Condition of Properties
-----------------------
All facilities, machinery, equipment, fixtures, vehicles and other
properties owned, leased or used by the Company and its subsidiaries are in good
operating condition and repair, are reasonably fit and usable for the purposes
for which they are being used, are adequate and sufficient for the Company's or
such subsidiary's business and comply in all material respects with all
applicable ordinances, regulations and laws.
2.19. Insurance
---------
The Company and its subsidiaries and their respective properties are
insured in such amounts, against such losses and with such insurers as are
prudent when considered in light of the nature of the properties and businesses
of the Company and its subsidiaries. Schedule 2.19 sets forth a true and
complete listing of the insurance policies of the Company and its subsidiaries
as in effect on the date hereof, including in each case the applicable coverage
limits, deductibles and the policy expiration dates. No notice of any
termination or threatened termination of any of such policies has been received
and such policies are in full force and effect.
2.20. Transactions with Related Parties
---------------------------------
Except as disclosed in the SEC Reports or on Schedule 2.20, neither
the Company nor any subsidiary is a party to any agreement with any of the
Company's directors, officers or stockholders or any Affiliate or family member
of any of the foregoing under which it: (i) leases any real or personal property
(either to or from such Person), (ii) licenses technology (either to or from
such Person), (iii) is obligated to purchase any tangible or intangible asset
from or sell such asset to such Person, (iv) purchases products or services from
such Person or (v) has borrowed money from or lent money to such Person. Except
as set forth in Schedule 2.20, neither the Company nor any subsidiary employs as
an employee or engages as a consultant any family member of any of the Company's
directors, officers or stockholders. To the best knowledge of the Company, there
exist no agreements among stockholders of the Company to
10
<PAGE>
act in concert with respect to their voting or holding of Company securities.
2.21. Interest in Competitors
-----------------------
Neither the Company nor any of its officers or, to the best of its
knowledge, any of its directors, has any interest, either by way of contract or
by way of investment (other than as holder of not more than 2% of the
outstanding capital stock of a publicly traded Person) or otherwise, directly or
indirectly, in any Person other than the Company that (i) provides any services
or designs, produces or sells any product or product lines or engages in any
activity similar to or competitive with any activity currently proposed to be
conducted by the Company or any of its subsidiaries or (ii) has any direct or
indirect interest in any asset or property, real or personal, tangible or
intangible, of the Company.
2.22. Registration Rights
-------------------
Except as disclosed in the SEC Reports or on Schedule 2.22, or
pursuant to the Registration Rights Agreement, the Company will not, as of the
Closing Date, be under any obligation to register any of its securities under
the Securities Act of 1933, as amended (the "Securities Act").
2.23. Private Offering
----------------
Neither the Company nor anyone acting on its behalf has sold or has
offered any of the Shares for sale to, or solicited offers to buy from, or
otherwise approached or negotiated with respect thereto with, any prospective
purchaser, other than Warburg. Neither the Company nor anyone acting on its
behalf shall offer the Shares for issue or sale to, or solicit any offer to
acquire any of the same from, anyone so as to bring the issuance and sale of
such Shares within the provisions of Section 5 of the Securities Act. Based upon
the representations of Warburg set forth in Section 3, the offer, issuance and
sale of the Shares are exempt from the registration and prospectus delivery
requirements of the Securities Act, and have been registered or qualified (or
are exempt from registration and qualification) under the registration, permit
or qualification requirements of all applicable state securities laws.
2.24. Environmental
-------------
Except as disclosed in the SEC Reports or on Schedule 2.24,
11
<PAGE>
(a) except for such noncompliance which would not, individually or
in the aggregate, result in losses, costs, or liability in excess of $100,000,
the Company and its operations are in compliance with all applicable laws,
regulations and other requirements of governmental or regulatory authorities or
duties under the common law relating to toxic or hazardous substances, wastes,
pollution or to the protection of health, safety or the environment
(collectively, "Environmental Laws") and have obtained or filed timely
applications for and maintained in effect all licenses, permits and other
authorizations or registrations (collectively "Environmental Permits") required
under all Environmental Laws and are in compliance with all such Environmental
Permits.
(b) the Company has not performed or suffered any act which could
give rise to, or has otherwise incurred, liability to any person (governmental
or not) under the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. (beta) 9601 et seq. ("CERCLA"), or any other
Environmental Laws, nor has the Company received notice of any such liability or
any claim therefor or submitted notice pursuant to Section 103 of CERCLA to any
governmental agency with respect to any of its assets.
(c) during the period of the Company's ownership or lease, and to
the best of the Company's knowledge prior to that time, no hazardous substance,
hazardous waste, contaminant, pollutant or toxic substance (as such terms are
defined in any applicable Environmental Law and collectively referred to herein
as "Hazardous Materials") has been released, placed, dumped or otherwise come to
be located on, at, or beneath any of the assets or properties owned or leased by
the Company or any surface waters or groundwaters thereon or thereunder.
(d) the Company does not own or operate, and has never owned or
operated, aboveground or underground storage tanks or surface improvements
containing Hazardous Materials.
(e) with respect to any or all of the real properties leased by the
Company: (i) there are no asbestos-containing materials, urea formaldehyde
insulation, polychlorinated biphenyls or lead-based paints present at any such
properties; and (ii) there are no wetlands as defined under any Environmental
Law located on any such properties.
(f) during the period of the Company's ownership or lease, and to
the best of the Company's knowledge prior to that time, none of the real
properties leased by the Company: (i) has been used or is now used for the
generation, transportation, storage, handling, treatment or disposal of any
Hazardous
12
<PAGE>
Materials except in the ordinary course of the Company's business and in
compliance with Environmental Laws, except for noncompliance which would not,
individually or in the aggregate, result in losses, costs, or liability in
excess of $100,000; or (ii) is identified on a federal, state or local listing
of sites which require or might require environmental investigation, mitigation,
remediation or corrective action.
(g) no condition exists on any of the real properties leased by the
Company or, to the best of the Company's knowledge, existed prior to the
Company's lease of such property, that upon the failure to act, the passage of
time or the giving of notice would give rise to liability or the imposition of a
lien under any Environmental Law.
(h) there are no ongoing investigations or negotiations, pending or,
to the best of the Company's knowledge, threatened administrative, judicial or
regulatory proceedings, or consent decrees or other agreements in effect that
relate to environmental conditions or Hazardous Materials in, on, under, about
or related to the Company, its operations or the real properties leased by the
Company.
(i) neither the Company nor its operations is subject to reporting
requirements under the federal Emergency Planning and Community Right-to-Know
Act, 42 U.S.C. (beta) 11001 et seq., or analogous state statutes and related
regulations.
2.25. Fluid Management Agreement Representations
------------------------------------------
All representations and warranties of the Company and, to the best
of the Company's knowledge, all the representations and warranties of Fluid
Management, Inc. contained in the Fluid Management Agreement are true and
correct in all material respects.
2.26. Brokerage
---------
There are no claims for brokerage commissions or finder's fees or
similar compensation in connection with the transactions contemplated by this
Agreement based on any arrangement made by or on behalf of the Company (other
than Allen & Company Incorporated, whose fees and expenses shall be the sole
responsibility of the Company) and the Company agrees to indemnify and hold
Warburg harmless against any costs or damages incurred as a result of any such
claim.
13
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2.27. Illegal or Unauthorized Payments; Political Contributions
---------------------------------------------------------
Neither the Company or any of its subsidiaries nor, to the best of
the Company's knowledge (after reasonable inquiry of its officers and
directors), any of the officers, directors, employees, agents or other
representatives of the Company or any of its subsidiaries or any other business
entity or enterprise with which the Company or any subsidiary is or has been
affiliated or associated, has, directly or indirectly, made or authorized any
payment, contribution or gift of money, property, or services, whether or not in
contravention of applicable law, (a) as a kickback or bribe to any Person or (b)
to any political organization, or the holder of or any aspirant to any elective
or appointive public office except for personal political contributions not
involving the direct or indirect use of funds of the Company or any of its
subsidiaries.
2.28. Takeover Statute
----------------
Assuming Warburg and its "associates" and "affiliates" (as defined
in Section 203 of the Delaware Code) collectively beneficially own and have
beneficially owned at all times during the three year period prior to the date
hereof less than fifteen percent (15%) of the Common Stock outstanding, Section
203 of the Delaware Code is, and shall be, inapplicable to this Agreement and
the transactions contemplated hereby.
2.29. Material Facts
--------------
This Agreement, the schedules furnished contemporaneously herewith,
and the other agreements, documents, certificates or written statements
furnished or to be furnished to Warburg through the Closing Date by or on behalf
of the Company in connection with the transactions contemplated hereby taken as
a whole, do not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements contained therein or herein, in
light of the circumstances in which they were made, not misleading. There is no
fact which is known to the Company (other than general economic or industry
conditions) and which has not been disclosed herein or otherwise by the Company
to Warburg which may materially adversely affect the business, properties,
assets or condition, financial or otherwise, of the Company and its subsidiaries
taken as a whole.
14
<PAGE>
SECTION 3. REPRESENTATIONS AND WARRANTIES OF WARBURG
Warburg represents and warrants to the Company as follows:
(a) It has full power and legal right to execute and deliver this
Agreement and to perform its obligations hereunder.
(b) It is a validly existing limited partnership, duly organized and
in good standing under the laws of Delaware.
(c) It has taken all action necessary for the authorization,
execution, delivery, and performance of this Agreement and its obligations
hereunder. This Agreement has been duly and validly executed and delivered by
Warburg and constitutes the valid and binding obligation of Warburg, enforceable
against Warburg in accordance with its terms, except that such enforcement may
be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights and
general principles of equity.
(d) There are no claims for brokerage commissions or finder's fees
or similar compensation in connection with the transactions contemplated by this
Agreement based on any arrangement made by or on behalf of Warburg (other than
Ivan Burns and Alan Craft, whose fees and expenses shall be the sole
responsibility of Warburg) and Warburg agrees to indemnify and hold the Company
harmless against any costs or damages incurred as a result of any such claim.
(e) The execution and delivery by Warburg of this Agreement, the
performance by Warburg of its obligations hereunder and the consummation by
Warburg of the transactions contemplated hereby do not require Warburg to obtain
any consent, approval or action of, or make any filing with or give any notice
to, any corporation, person or firm or any public, governmental or judicial
authority, other than consents, approvals, actions, filings or notices in
connection with the HSR Act.
(f) It understands (subject to the express obligations of the
Company to register the Shares as provided in the Registration Rights Agreement)
that the issuance of the Shares is exempt from registration pursuant to Section
4(2) of the Securities Act and/or Regulation D promulgated under the Securities
Act ("Regulation D"), and that the reliance of the Company on such exemptions is
predicated in part on its representations, warranties, covenants and
acknowledgments set forth in this Section.
15
<PAGE>
(g) It is an Accredited Investor, as that term is defined in
Regulation D, and has such knowledge and experience in financial and business
matters that it is fully capable of evaluating the risks and merits of its
investment in the Shares. The Shares will be acquired by it for its own account,
not as a nominee or agent, for investment and without a view to resale, transfer
or other distribution within the meaning of the Securities Act and the rules and
regulations thereunder, and it will not distribute nor transfer any of the
Shares in violation of the Securities Act. It is a resident of the State of New
York for purposes of state securities laws.
(h) It: (i) acknowledges that the Shares are not registered under
the Securities Act and must be held indefinitely by it unless the Shares are
subsequently registered under the Securities Act (in accordance with the
Registration Rights Agreement or otherwise) or an exemption from registration is
available, (ii) is aware that any routine sales of the Shares made under Rule
144 of the Securities and Exchange Commission under the Securities Act may be
made only in limited amounts and in accordance with the terms and conditions of
that Rule and that in such cases where the Rule is not applicable, registration
or compliance with some other registration exemption will be required, (iii) is
aware that Rule 144 is not presently, and for a period of at least two years
following the Closing Date hereof probably will not be, available for use by it
for resale of the Shares, and (iv) is aware that the Company is not obligated to
register any sale, transfer or other disposition of the Shares except in
accordance with the provisions of the Registration Rights Agreement.
(i) It acknowledges receipt of the SEC Reports and such other
documents, agreements and information as it has required and confirms and
acknowledges that: (i) the Company has afforded it the opportunity to ask
questions of and receive answers from the Company's officers and directors
concerning the terms and conditions of this Agreement and its investment in the
Shares and to obtain such additional information as it has requested, and (ii)
it has availed itself of such opportunity to the extent it deems necessary and
has received the information requested.
(j) It acknowledges and agrees that the certificates representing
the Shares issuable to it will contain a restrictive legend noting the
restrictions on transfer described in this Section 3 and Section 4.1(a) hereof
and under federal and applicable state securities laws, and that appropriate
"stop-transfer" instructions will be given to the Company's stock transfer
agent.
16
<PAGE>
SECTION 4. ADDITIONAL COVENANTS OF THE PARTIES
4.1. Resale of Securities
(a) Subject to the provisions of Section 3 hereof, Warburg covenants
that it will not sell or otherwise transfer any Shares until one (1) year after
the Closing Date without the written consent of the Company.
(b) In order to ensure compliance with the provisions of Section 3
hereof, Warburg covenants and agrees that, after the Closing, it will not sell,
transfer or otherwise dispose of any of the Shares or any interest therein
(unless such sale, transfer or disposition has been registered under the
Securities Act in accordance with the provisions of Section 7 hereof or
otherwise) or otherwise without there first having been compliance with either
of the following conditions:
(i) the Company shall have received a written opinion of counsel
in form and substance reasonably satisfactory to the Company, which
counsel shall include Willkie Farr & Gallagher, or a copy of a
"no-action" or interpretive letter of the SEC, specifying the nature
and circumstances of the proposed transfer and indicating that the
proposed transfer will not be in violation of any of the provisions
of the Securities Act and the rules and regulations promulgated
thereunder; or
(ii) the Company shall have received an opinion from its own
counsel to the effect that the proposed transfer will not be in
violation of any of the provisions of the Securities Act and the
rules and regulations promulgated thereunder.
4.2. Covenants Pending Closing
-------------------------
Pending the Closing the Company will not, without Warburg's prior
written consent, take any action which would result in any of the
representations or warranties contained in this Agreement not being true at and
as of the time immediately after such action, or in any of the covenants
contained in this Agreement becoming incapable of performance. The Company will
promptly advise Warburg of any action or event of which it becomes aware which
has the effect of making incorrect any of such representations or warranties or
which has the effect of rendering any of such covenants incapable of
performance.
17
<PAGE>
4.3. Further Assurance
-----------------
Each of the parties shall execute such documents and other papers
and take such further actions as may be reasonably required or desirable to
carry out the provisions hereof and the transactions contemplated hereby. Each
such party shall use its reasonable efforts to fulfill or obtain the fulfillment
of the conditions to the Closing as promptly as practicable.
4.4. Board Nominee
-------------
For so long as Warburg owns beneficially (within the meaning of Rule
13d-3 under the Exchange Act) at least 7.5% of the issued and outstanding shares
of the Company's Common Stock, the Company will nominate and use its best
efforts to elect and to cause to remain as a director on the Company's Board of
Directors one individual as Warburg may designate. Any vacancy created by the
death, disability, retirement or removal of any such individual may be filled by
Warburg. The initial nominee of Warburg shall be Robert S. Hillas.
4.5. Hart-Scott-Rodino
-----------------
As promptly as practicable following the execution and delivery of
this Agreement by the parties, the Company and Warburg shall each prepare and
file, or shall cause its "ultimate parent" (as defined in the HSR Act) to
prepare and file, any required notification and report form under the HSR Act,
in connection with the transactions contemplated hereby, each party paying its
own filing fees; the Company and Warburg shall, or shall cause their ultimate
parents to, take or cause to be taken all actions and do or cause to be done all
things necessary, proper or advisable to obtain prompt termination of the
waiting period under the HSR Act.
SECTION 5. WARBURG'S CLOSING CONDITIONS
The obligation of Warburg to purchase and pay for the Shares on the
Closing Date, as provided in Section 1 hereof, shall be subject to the
performance by the Company of its agreements theretofore to be performed
hereunder and to the satisfaction, prior thereto or concurrently therewith, of
the following further conditions:
5.1. Representations and Warranties
The representations and warranties of the Company contained in this
Agreement shall be true on and as of the Closing Date as though such warranties
and representations were
18
<PAGE>
made at and as of such date, except as otherwise affected by the transactions
contemplated hereby.
5.2. Compliance with Agreement
-------------------------
The Company shall have performed and complied with all agreements,
covenants and conditions contained in this Agreement which are required to be
performed or complied with by the Company prior to or on the Closing Date.
5.3. Officer's Certificate
---------------------
Warburg shall have received a certificate, dated the Closing Date,
signed on behalf of the Company by each of the President and the Controller of
the Company, certifying that the conditions specified in the foregoing Sections
5.1 and 5.2 hereof have been fulfilled.
5.4. Injunction
----------
There shall be no effective injunction, writ, preliminary
restraining order or any order of any nature issued by a court of competent
jurisdiction directing that the transactions provided for herein or any of them
not be consummated as herein provided.
5.5. Counsel's Opinion
-----------------
Warburg shall have received from the Company's counsel, Drinker
Biddle & Reath, an opinion, dated the Closing Date, substantially in the form of
Exhibit C hereto.
5.6. Acquisition of Fluid Management
-------------------------------
All conditions to the consummation of the transactions contemplated
by the Fluid Management Agreement shall have been satisfied or waived with the
consent of Warburg in its sole and absolute discretion.
5.7. Consents; Hart-Scott-Rodino
---------------------------
All consents, approvals and actions which are listed on Schedule 2.5
hereto shall have been obtained or performed, and all applicable waiting periods
(and any extensions thereof) under the HSR Act shall have expired or otherwise
been terminated.
19
<PAGE>
5.8. Election of Directors
---------------------
Robert S. Hillas (in accordance with Section 4.4 hereof) and William
C. Smith shall have been elected to the Board of Directors of the Company,
effective upon the Closing.
5.9. Registration Rights Agreement
-----------------------------
The Company, Warburg and the shareholders of Fluid Management, Inc.
shall have entered into the Registration Rights Agreement, the terms of which
shall be satisfactory to the Company and Warburg.
5.10. Approval of Proceedings
-----------------------
All proceedings to be taken in connection with the transactions
contemplated by this Agreement, and all documents incident thereto, shall be
satisfactory in form and substance to Warburg and its special counsel, Willkie
Farr & Gallagher; and Warburg shall have received copies of all documents or
other evidence which it and Willkie Farr & Gallagher may request in connection
with such transactions and of all records of corporate proceedings in connection
therewith in form and substance satisfactory to Warburg and Willkie Farr &
Gallagher.
SECTION 6. COMPANY CLOSING CONDITIONS
The obligation of the Company to issue and deliver the Shares on the
Closing Date, as provided in Section 1 hereof, shall be subject to the
performance by Warburg of its agreements theretofore to be performed hereunder
and to the satisfaction, prior thereto or concurrently therewith, of the
following further conditions:
6.1. Representations and Warranties
------------------------------
The representations and warranties of Warburg contained in this
Agreement shall be true on and as of the Closing Date as though such warranties
and representations were made at and as of such date, except as otherwise
affected by the transactions contemplated hereby.
6.2. Compliance with Agreement
-------------------------
Warburg shall have performed and complied with all agreements,
covenants and conditions contained in this Agreement which are required to be
performed or complied with by it prior to or on the Closing Date.
20
<PAGE>
6.3. Warburg's Certificate
---------------------
The Company shall have received a certificate from Warburg, dated
the Closing Date, signed by a duly authorized representative of Warburg,
certifying that the conditions specified in the foregoing Sections 6.1 and 6.2
hereof have been fulfilled.
6.4. Consents; Hart-Scott-Rodino
---------------------------
All consents, approvals and actions which are listed on Schedule 2.5
hereto shall have been obtained or performed, and all applicable waiting periods
(and any extensions thereof) under the HSR Act shall have expired or otherwise
been terminated.
6.5. Injunction
----------
There shall be no effective injunction, writ, preliminary
restraining order or any order of any nature issued by a court of competent
jurisdiction directing that the transactions provided for herein or any of them
not be consummated as herein provided.
6.6. Acquisition of Fluid Management
-------------------------------
All conditions to the consummation of the transactions contemplated
by the Fluid Management Agreement shall have been satisfied or waived.
SECTION 7. RESERVED
SECTION 8. COVENANTS
8.1. Confidentiality
---------------
As to so much of the information and other material furnished under
or in connection with this Agreement (whether furnished before, on or after the
date hereof, including without limitation information furnished pursuant to
Section 8.1 hereof) as constitutes or contains confidential business, financial
or other information of the Company or any subsidiary, Warburg covenants for
itself and its directors, officers and partners that it will use due care to
prevent its officers, directors, partners, employees, counsel, accountants and
other representatives from disclosing such information to Persons other than
their respective authorized employees, counsel, accountants, partners and other
authorized representatives; provided, however, that Warburg may disclose or
deliver any information or other material disclosed to or received by it should
Warburg be advised
21
<PAGE>
by its counsel that such disclosure or delivery is required by law, regulation
or judicial or administrative order. In the event of termination of this
Agreement for any reason, upon the written request of the Company, Warburg will
promptly return or cause to be returned to the Company, or promptly destroy or
cause to be destroyed, all such information and material obtained from the
Company, and any copies made of such information and materials. For purposes of
this Section 8.1, "due care" means at least the same level of care that Warburg
would use to protect the confidentiality of its own sensitive or proprietary
information, and this obligation shall survive termination of this Agreement.
8.2. Lost, etc. Certificates Evidencing Shares of Common Stock;
Exchange
--------------------------------------------------------------
Upon receipt by the Company of evidence reasonably satisfactory to
it of the loss, theft, destruction or mutilation of any certificate evidencing
any shares of Common Stock owned by Warburg, and (in the case of loss, theft or
destruction) of an unsecured indemnity satisfactory to it, and upon
reimbursement to the Company of all reasonable expenses incidental thereto, and
upon surrender and cancellation of such certificate, if mutilated, the Company
will make and deliver in lieu of such certificate a new certificate of like
tenor and for the number of shares evidenced by such certificate which remain
outstanding. Warburg's agreement of indemnity shall constitute indemnity
satisfactory to the Company for purposes of this Section 8.2. Upon surrender of
any certificate representing any shares of Common Stock for exchange at the
office of the Company, the Company at its expense will cause to be issued in
exchange therefor new certificates in such denomination or denominations as may
be requested for the same aggregate number of shares of Common Stock, as the
case may be, represented by the certificate so surrendered and registered as
such holder may request. The Company will also pay the cost of all deliveries of
certificates for such shares to the office of Warburg (including the cost of
insurance against loss or theft in an amount satisfactory to the holders) upon
any exchange provided for in this Section 8.2.
SECTION 9. INTERPRETATION OF THIS AGREEMENT
9.1. Terms Defined
As used in this Agreement, the following terms have the respective
meanings set forth below or set forth in the Section hereof following such term:
22
<PAGE>
Affiliate: means any Person or entity, directly or indirectly,
controlling, controlled by or under common control with such Person or entity.
Business Day: shall mean a day other than a Saturday, Sunday or
other day on which banks in the State of New York are required or authorized to
close.
Closing: shall have the meaning set forth in Section 1.1(b).
Closing Date: shall have the meaning set forth in Section 1.1(b).
Code: shall mean the Internal Revenue Code of 1986, as amended.
Common Stock: shall have the meaning set forth in Section 1.1(a).
Exchange Act: shall mean the Securities Exchange Act of 1934, as
amended.
Fluid Management Agreement: shall mean the Agreement and Plan of
Merger among the Company, Fluid Management, Inc. and William C. Smith, Douglas
W. Jacobson, Gary W. Hawk and Richard W. Schowengerdt, dated January 14, 1997.
GAAP: shall have the meaning set forth in Section 2.7.
HSR Act: refers to the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended.
Intellectual Property: shall have the meaning set forth in Section
2.16.
Material Adverse Effect: shall have the meaning set forth in Section
2.1(c).
Person: shall mean an individual, partnership, joint-stock company,
corporation, limited liability company, trust or unincorporated organization,
and a government or agency or political subdivision thereof.
Registration Rights Agreement: shall mean a registration rights
agreement to entered into by the Company, Warburg and Fluid Management, Inc.
relating to the registration of the Shares and shares of Common Stock to be
acquired by the shareholders of Fluid Management, Inc., pursuant to the
23
<PAGE>
preparation and filing of a registration statement in compliance with the
Securities Act.
SEC: shall mean the Securities and Exchange Commission.
SEC Reports: shall have the meaning set forth in Section 2.7.
Securities Act: shall mean the Securities Act of 1933, as amended.
Subsidiary: shall mean a corporation of which a Person owns,
directly or indirectly, more than 50% of the Voting Stock.
Voting Stock: shall mean securities of any class or classes of
a corporation the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the corporate directors (or
Persons performing similar functions).
9.2. Accounting Principles
---------------------
Where the character or amount of any asset or amount of any asset or
liability or item of income or expense is required to be determined or any
consolidation or other accounting computation is required to be made for the
purposes of this Agreement, this shall be done in accordance with GAAP at the
time in effect, to the extent applicable, except where such principles are
inconsistent with the requirements of this Agreement.
9.3. Directly or Indirectly
----------------------
Where any provision in this Agreement refers to action to be taken
by any Person, or which such Person is prohibited from taking, such provision
shall be applicable whether such action is taken directly or indirectly by such
Person.
9.4. Governing Law
-------------
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York applicable to contracts made and to be
performed entirely within such State.
9.5. Paragraph and Section Headings
------------------------------
The headings of the sections and subsections of this Agreement are
inserted for convenience only and shall not be deemed to constitute a part
thereof.
24
<PAGE>
SECTION 10. MISCELLANEOUS
10.1. Notices
-------
(a) All communications under this Agreement shall be in writing and
shall be delivered by hand or mailed by overnight courier or by registered mail
or certified mail, postage prepaid:
(1) if to Warburg, at 466 Lexington Avenue, New York, New York
10017, marked for attention of Robert S. Hillas, or at such other address as
Warburg may have furnished the Company in writing,
(2) if to the Company, at 4100 Quakerbridge Road, Lawrenceville, NJ
08648, marked for the attention of Harch S. Gill, or at such other address as it
may have furnished in writing to Warburg.
(b) Any notice so addressed shall be deemed to be given: if
delivered by hand, on the date of such delivery; if mailed by courier, on the
first business day following the date of such mailing; and if mailed by
registered or certified mail, on the third business day after the date of such
mailing.
10.2. Expenses and Taxes
------------------
(a) The Company agrees to pay fifty percent (50%) of the fee
required to be paid under the HSR Act in connection with the transaction
contemplated hereby and the reasonable fees and disbursements of Willkie Farr &
Gallagher, special counsel for Warburg, incurred in connection with the
negotiation, preparation, execution and delivery of this Agreement and the other
instruments and agreements entered into pursuant to this Agreement, and any
amendments to the same, in an amount not to exceed $50,000.00, said payment to
be made no later than 30 days after a bill for such fees and/or disbursements
has been sent to the Company (provided, however, that in no event shall said
payment be required to be made by the Company prior to the Closing Date).
Notwithstanding the foregoing, (i) the Company shall be required to pay fifty
percent (50%) of such legal fees and expenses in an amount not to exceed $25,000
in the event that the transactions contemplated by the Fluid Management
Agreement are not consummated as a result of the failure by Fluid Management,
Inc. or its stockholders to satisfy the conditions set forth in Section 6.02 of
the Fluid Management Agreement on or prior to the Closing Date and (ii) the
Company shall not be required to pay any such legal fees and expenses in the
event that the transactions contemplated hereby are not consummated as a result
of the failure by Warburg to satisfy the conditions set
25
<PAGE>
forth in Sections 6.1, 6.2, 6.3, 6.4, or 6.5 hereto on or prior to the Closing
Date.
(b) The Company will pay, and save and hold Warburg harmless from
any and all liabilities (including interest and penalties) with respect to, or
resulting from any delay or failure in paying, stamp and other taxes (other than
income taxes), if any, which may be payable or determined to be payable on the
acquisition by Warburg of the Shares.
10.3. Reproduction of Documents
-------------------------
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications which may hereafter
be executed, (b) documents received by Warburg on the Closing Date (except for
certificates evidencing the Shares themselves), and (c) financial statements,
certificates and other information previously or hereafter furnished to Warburg,
may be reproduced by Warburg by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process and Warburg may
destroy any original document so reproduced. All parties hereto agree and
stipulate that any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding (whether or not the
original is in existence and whether or not such reproduction was made by
Warburg in the regular course of business) and that any enlargement, facsimile
or further reproduction of such reproduction shall likewise be admissible in
evidence.
10.4. Termination and Survival
------------------------
Unless the Closing has occurred prior thereto, this Agreement and,
except as herein provided, all the rights of the parties hereto, shall terminate
on May 31, 1997 (unless such date is extended by mutual written consent).
Notwithstanding the termination of this Agreement, Section 8.1 hereof shall
survive the termination of this Agreement. All warranties, representations, and
covenants made by Warburg to the Company, or by the Company to Warburg, herein
or in any certificate or other instrument delivered by Warburg or the Company
under this Agreement shall be considered to have been relied upon by the Company
or Warburg, as the case may be, and shall survive all deliveries to Warburg of
the Shares, or payment to the Company for such Shares, until the thirtieth day
following the date on which Warburg receives the Company's audited financial
statements for the fiscal year ending December 31, 1997, except for the
warranties and representations set forth in Sections 2.14 and 2.24 herein, which
shall survive until expiration of any applicable statute of limitations,
regardless of any
27
<PAGE>
investigation made by the Company or Warburg, as the case may be, or on the
Company's or Warburg's behalf. All statements in any such certificate or other
instrument shall constitute warranties and representations by the Company and
Warburg, as the case may be, hereunder.
10.5. Successors and Assigns
----------------------
This Agreement shall inure to the benefit of and be binding upon the
successors and assigns of each of the parties.
10.6. Entire Agreement; Amendment and Waiver
--------------------------------------
This Agreement constitutes the entire understandings of the parties
hereto and supersede all prior agreements or understandings with respect to the
subject matter hereof among such parties. This Agreement may be amended, and the
observance of any term of this Agreement may be waived, with (and only with) the
written consent of the Company and Warburg.
10.7. Severability
------------
In the event that any part or parts of this Agreement shall be held
illegal or unenforceable by any court or administrative body of competent
jurisdiction, such determination shall not effect the remaining provisions of
this Agreement which shall remain in full force and effect.
10.8. Limitation on Enforcement of Remedies
-------------------------------------
The Company hereby agrees that it will not assert against the
limited partners of Warburg any claim it may have under this Agreement by reason
of any failure or alleged failure by Warburg to meet its obligations hereunder.
10.9. Counterparts
------------
This Agreement may be executed in one or more counterparts, both of
which shall be deemed an original and all of which together shall be considered
one and the same agreement.
Very truly yours,
ENVIROGEN, INC.
By:/s/ Harcharan S. Gill
-----------------------
Name: Harcharan S. Gill
Title: President and Chief
Executive Officer
28
<PAGE>
WARBURG, PINCUS VENTURES, L.P.
By: WARBURG, PINCUS & CO.,
General Partner
By:
/s/ Robert S. Hillas
Name: Robert S. Hillas
Title: Partner
29
<PAGE>
ENVIROGEN, INC.
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of April 10, 1997, among the
investors listed on Schedule I hereto (the "Investors") and Envirogen, Inc., a
Delaware corporation (the "Company").
R E C I T A L S
WHEREAS, Warburg, Pincus Ventures, L.P., a Delaware limited partnership
("Warburg"), has agreed, pursuant to the terms of the Securities Purchase
Agreement, dated as of January 14, 1997, by and between Warburg and the Company
(the "Purchase Agreement"), to purchase 6,095,238 shares of the common stock,
par value $0.01 per share, of the Company (the "Common Stock") at the aggregate
cash purchase price of $15,999,999.75; and
WHEREAS, the Company has agreed, as a condition precedent to the
Warburg's obligations under the Purchase Agreement, to grant Warburg certain
registration rights; and
WHEREAS, pursuant to the Agreement and Plan of Merger, dated January
14, 1997 (the "Merger Agreement"), by and among the Company, Fluid Management,
Inc., a Wisconsin corporation ("Fluid Management"), and William C. Smith,
Douglas W. Jacobson, Gary W. Hawk and Richard W. Schowengerdt (Messrs. Smith,
Jacobson, Hawk and Schowengerdt collectively, the "Other Investors"), the Other
Investors shall receive, collectively, 4,190,477 shares of Common Stock in
connection with the transactions contemplated by the Merger Agreement and
WHEREAS, the Company has agreed, as a condition precedent to Fluid
Management's and the Other Investor's obligations under the Merger Agreement, to
grant the Other Investors certain registration rights; and
WHEREAS, the Investors and the Company desire to define the
registration rights of the Investors on the terms and subject to the conditions
herein set forth.
NOW, THEREFORE, in consideration of the foregoing premises and for
other good and valuable consideration, the parties hereby agree as follows:
<PAGE>
1. DEFINITIONS
-----------
As used in this Agreement, the following terms have the respective
meaning set forth below:
Commission: shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act;
Exchange Act: shall mean the Securities Exchange Act of 1934, as
amended;
Holder: shall mean any holder of Registrable Securities;
Person: shall mean an individual, partnership, joint-stock company,
corporation, trust or unincorporated organization, and a government or agency or
political subdivision thereof;
register, registered and registration: shall mean to a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act (and any post-effective amendments filed or required to be filed)
and the declaration or ordering of effectiveness of such registration statement;
Registrable Securities: shall mean (A) shares of Common Stock acquired
by Warburg pursuant to the Purchase Agreement and shares of Common Stock
acquired by the Other Investors pursuant to the Merger Agreement, and (B) any
common stock of the Company issued as a dividend or other distribution with
respect to, or in exchange for or in replacement of, the shares of Common Stock
referred to in clause (A);
Registration Expenses: shall mean all expenses incurred by the Company
in compliance with Section 2 hereof, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel for the Company, fees and expenses of one counsel for all the Holders in
an amount not to exceed $15,000 in connection with an underwritten transaction
or $5,000 in connection with a non-underwritten transaction, blue sky fees and
expenses and the expense of any special audits incident to or required by any
such registration (but excluding the compensation of regular employees of the
Company, which shall be paid in any event by the Company);
Security, Securities: shall have the meaning set forth in Section 2(1)
of the Securities Act;
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Securities Act: shall mean the Securities Act of 1933, as amended; and
Selling Expenses: shall mean all underwriting discounts and selling commissions
applicable to the sale of Registrable Securities and all fees and disbursements
of counsel for each of the Holders other than fees and expenses of one counsel
for all the Holders in an amount not to exceed $15,000 in connection with an
underwritten transaction or $5,000 in connection with a non-underwritten
transaction.
2. REGISTRATION RIGHTS
-------------------
(a) Shelf Registration.
------------------
(i) As soon as practicable after the Closing Date, but in any
event within nine (9) months after the Closing Date, the Company shall
file with the Commission and cause to be declared effective a
registration statement pursuant to Rule 415 under the Securities Act (a
"Shelf Registration Statement") relating to the offer and sale of
Registrable Securities by the Holders thereof from time to time in
accordance with the methods of distribution elected by such Holders and
set forth in such Shelf Registration Statement.
(ii) The Company shall supplement or amend, if necessary, the
Shelf Registration Statement as required by the applicable registration
form or by the Securities Act or the rules and regulations promulgated
thereunder or as reasonably requested by the Holders of a majority of
the Registrable Securities (the "Majority Holders"), and the Company
shall furnish to the holders of the Registrable Securities to which the
Shelf Registration Statement relates copies of any such supplement or
amendment prior to its being used and/or filed with the Commission.
(b) Expenses of Registration. All Registration Expenses incurred
in connection with any registration, qualification or compliance pursuant to
this Section 2 shall be borne by the Company, and all Selling Expenses shall be
borne by the Holders of the securities so registered pro rata on the basis of
the number of their shares so registered.
(c) Registration Procedures. In connection with the Shelf
Registration Statement filed pursuant to this Section 2, the Company will keep
the Holders, as applicable, advised in writing as to the initiation of such
registration and as to the completion thereof. Subject to Section 2(g) hereof,
at its expense, the Company will, as expeditiously as possible:
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(i) 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
and to comply with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities covered by such registration
statement or as may be reasonably requested by the Majority Holders, until
such time (x) as all of such Registrable Securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof set forth in such registration statement or (y) as set forth in
Section 2(h) hereof;
(ii) use its best efforts (x) to register or qualify all
Registrable Securities and other securities covered by such registration
statement under such other securities or blue sky laws of such States of the
United States of America where an exemption is not available and as the
sellers of Registrable Securities covered by such registration statement
shall reasonably request, (y) to keep such registration or qualification in
effect for so long as such registration statement remains in effect, and (z)
to take any other action which may be reasonably necessary or advisable to
enable such sellers to consummate the disposition in such jurisdictions of
the securities to be sold by such sellers, except that the Company shall not
for any such purpose be required to qualify generally to do business as a
foreign corporation in any jurisdiction wherein it would not but for the
requirements of this subdivision (ii) be obligated to be so qualified,
subject itself to taxation in any such jurisdiction or to consent to general
service of process in any such jurisdiction;
(iii) use its best efforts to cause all Registrable Securities
covered by such registration statement to be registered with or approved by
such other federal or state governmental agencies or authorities as may be
necessary in the opinion of counsel to the Company and counsel to the seller
or sellers of Registrable Securities to enable the seller or sellers thereof
to consummate the disposition of such Registrable Securities;
(iv) promptly notify each Holder of Registrable Securities covered
by such registration statement at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, upon discovery
that, or upon the happening of any event as a result of which, the
prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact
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<PAGE>
or omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, in the light of the
circumstances under which they were made, and at the request of any such
Holder promptly prepare and furnish to it a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so
that, as thereafter delivered to the purchasers of such securities, 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 tomake
the statements therein not misleading in the light of the circumstances
under which they were made;
(v) furnish, on the date that such Registrable Securities are
delivered to the underwriters for sale, if such securities are being sold
through underwriters, (1) an opinion, dated as of such date, of the counsel
representing the Company for the purposes of such registration, in form and
substance as is customarily given to underwriters in an underwritten public
offering and reasonably satisfactory to a majority in interest of the
Holders participating in such registration, addressed to the underwriters
and to the Holders participating in such registration and (2) a letter,
dated as of such date, from the independent certified public accountants of
the Company, in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public
offering and reasonably satisfactory to a majority in interest of the
Holders participating in such registration, addressed to the underwriters,
and if permitted by applicable accounting standards, to the Holders
participating in such registration; and
(vi) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its security
holders, as soon as reasonably practicable, an earnings statement covering
the period of at least twelve months, but not more than eighteen months,
beginning with the first full calendar month after the effective date of
such registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 promulgated
thereunder, and promptly furnish to each Holder of Registrable Securities a
copy of any amendment or supplement to such registration statement or
prospectus.
Notwithstanding the foregoing, if any such registration or
comparable statement refers to any Holder by name or otherwise as the holder of
any securities of the Company and in its sole and exclusive judgment such Holder
is or might be deemed to be a
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<PAGE>
controlling person of the Company, such Holder shall have the right to require
the insertion therein of language, in form and substance reasonably satisfactory
to such Holder and the Company, to the effect that the holding by such Holder of
such securities is not to be construed as a recommendation by such Holder of the
investment quality of the Company's securities covered thereby and that such
holding does not imply that such Holder will assist in meeting any future
financial requirements of the Company.
(d) Indemnification.
---------------
(i) The Company will indemnify each of the Holders, as applicable,
each of its officers, directors and partners, and each person controlling
each of the Holders, with respect to the registration which has been
effected pursuant to this Section 2, and each underwriter, if any, and each
person who controls any underwriter, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained
in any prospectus, offering circular or other document (including any
related registration statement, notification or the like) incident to any
such registration, qualification or compliance, or based on any omission (or
alleged omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, or any
violation by the Company of the Securities Act or any rule or regulation
thereunder applicable to the Company and relating to action or inaction
required of the Company in connection with any such registration,
qualification or compliance, and will reimburse each of the Holders, each of
its officers, directors and partners, and each person controlling each of
the Holders, each such underwriter and each person who controls any such
underwriter, for any reasonable legal and any other expenses incurred in
connection with investigating and defending any such claim, loss, damage,
liability or action, provided that the Company will not be liable in any
such case to the extent that any such claim, loss, damage, liability or
expense arises out of or is based on any untrue statement or omission based
upon written information furnished to the Company by the Holders or
underwriter and stated to be specifically for use therein.
(ii) Each of the Holders severally will, if Registrable Securities
held by it are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify the Company, each
of its directors and officers and each underwriter, if any, of the Company's
securities covered by such registration
-6-
<PAGE>
statement, each person who controls the Company or such underwriter and each
of their officers, directors, and partners against all claims, losses,
damages and liabilities (or actions in respect thereof) arising out of or
based on any untrue statement (or alleged untrue statement) of a material
fact contained in such registration statement, prospectus, offering circular
or other document made by such Holder, or any omission (or alleged omission)
to state therein a material fact required to be stated therein or necessary
to make the statements by such Holder therein not misleading, and will
reimburse the Company and such directors, officers, partners, persons,
underwriters or control persons for any legal or any other expenses
reasonably incurred in connection with investigating or defending any such
claim, loss, damage, liability or action, in each case to the extent, but
only to the extent, that such untrue statement (or alleged untrue statement)
or omission (or alleged omission) is made in such registration statement,
prospectus, offering circular or other document in reliance upon and in
conformity with written information furnished to the Company by such Holder
and stated to be specifically for use therein; provided, however, that the
obligations of each of the Holders hereunder shall be limited to an amount
equal to the net proceeds to such Holder of securities sold as contemplated
herein.
(iii) Each party entitled to indemnification under this Section
2(d) (the "Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity
may be sought, and shall permit the Indemnifying Party to assume the defense
of any such claim or any litigation resulting therefrom; provided that
counsel for the Indemnifying Party, who shall conduct the defense of such
claim or any litigation resulting therefrom, shall be approved by the
Indemnified Party (whose approval shall not unreasonably be withheld) and
the Indemnified Party may participate in such defense at such party's
expense (unless the Indemnified Party shall have reasonably concluded that
there may be a conflict of interest between the Indemnifying Party and the
Indemnified Party in such action, in which case the fees and expenses of
counsel shall be at the expense of the Indemnifying Party, provided that in
such event the Indemnifying Party shall not be responsible for the fees of
more than one counsel (plus one local counsel) to the Indemnified Parties),
and provided further that the failure of any Indemnified Party to give
notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Section 2 unless the Indemnifying Party is
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<PAGE>
materially prejudiced thereby. No Indemnifying Party, in the defense of any
such claim or litigation shall, except with the consent of each Indemnified
Party, consent to entry of any judgment or enter into any settlement which
does not include as an unconditional term thereof the giving by the claimant
or plaintiff to such Indemnified Party of a release from all liability in
respect to such claim or litigation. Each Indemnified Party shall furnish
such information regarding itself or the claim in question as an
Indemnifying Party may reasonably request in writing and as shall be
reasonably required in connection with the defense of such claim and
litigation resulting therefrom.
(iv) If the indemnification provided for in this Section 2(d) is
held by a court of competent jurisdiction to be unavailable to an
Indemnified Party with respect to any loss, liability, claim, damage or
expense referred to herein, then the Indemnifying Party, in lieu of
indemnifying such Indemnified Party hereunder, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such loss,
liability, claim, damage or expense in such proportion as is appropriate to
reflect the relative fault of the Indemnifying Party on the one hand and of
the Indemnified Party on the other in connection with the statements or
omissions which resulted in such loss, liability, claim, damage or expense,
as well as any other relevant equitable considerations. The relative fault
of the Indemnifying Party and of the Indemnified Party shall be determined
by reference to, among other things, whether the untrue (or alleged untrue)
statement of a material fact or the omission (or alleged omission) to state
a material fact relates to information supplied by the Indemnifying Party or
by the Indemnified Party and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission.
(v) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with any underwritten public offering
contemplated by this Agreement are in conflict with the foregoing
provisions, the provisions in such underwriting agreement shall be
controlling.
(vi) The foregoing indemnity agreement of the Company and the
Holders is subject to the condition that, insofar as they relate to any
loss, claim, liability or damage made in a preliminary prospectus but
eliminated or remedied in the amended prospectus on file with the Commission
at the time the registration statement in
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<PAGE>
question becomes effective or the amended prospectus filed with the
Commission pursuant to Rule 424(b) (the "Final Prospectus"), such indemnity
agreement shall not inure to the benefit of (i) any underwriter if a copy of
the Final Prospectus was furnished to the underwriter and was not furnished
to the person asserting the loss, liability, claim or damage at or prior to
the time such action is required by the Securities Act and (ii) any Holder
if the loss, claim, liability or damage relates to a transaction pursuant to
which shares of Common Stock were not distributed pursuant to an
underwritten offering and if a copy of the Final Prospectus was furnished to
the Holder and was not furnished to the person asserting the loss,
liability, claim or damage at or prior to the time such action is required
by the Securities Act.
(e) Information by the Holders. Each of the Holders holding
securities included in any registration shall furnish to the Company such
information regarding such Holder and the distribution proposed by such Holder
as the Company may reasonably request in writing and as shall be reasonably
required in connection with any registration, qualification or compliance
referred to in this Section 2.
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<PAGE>
(f) Rule 144 Reporting.
------------------
With a view to making available the benefits of certain rules and
regulations of the Commission which may permit the sale of restricted securities
to the public without registration, the Company agrees to:
(i) make and keep public information available as those terms are
understood and defined in Rule 144 under the Securities Act ("Rule 144");
(ii) use its best efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act; and
(iii) so long as the Holder owns any Registrable Securities,
furnish to the Holder upon request, a written statement by the Company as to
its compliance with the reporting requirements of Rule 144 and of the
Securities Act and the Exchange Act, a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents so
filed as the Holder may reasonably request in availing itself of any rule or
regulation of the Commission allowing the Holder to sell any such securities
without registration.
(g) Holdback Periods. Notwithstanding anything in this Agreement
to the contrary if (i) the Company shall determine in good faith that it would
be significantly disadvantageous to the Company and its stockholders for any
such Shelf Registration Statement to be amended or supplemented, and (ii) the
need for such an amendment or supplement is not caused by a proposed public
offering of any securities of the Company by any of its securityholders (other
than an offering made pursuant to a registration on Form S-8), the Company may
defer such amending or supplementing of such Shelf Registration Statement for
not more than 60 days and in such event, upon appropriate notice to the Holders,
the Holders shall be required to discontinue disposition of any Registrable
Securities covered by such Shelf Registration Statement during such period;
provided, however, that this right may not be exercised by the Company more than
once in any twelve-month period.
(h) Termination. The registration rights set forth in this Section
2 shall not be available to any Holder if, in the opinion of counsel to the
Company, all of the Registrable Securities then owned by such Holder could be
sold in any 90-day period pursuant to Rule 144 under the Securities Act (without
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<PAGE>
giving effect to the provisions of Rule 144(k)). Upon termination of such
registration rights in accordance with this Section 2(h), the obligations of the
Company to continue the effectiveness of the Shelf Registration Statement shall
terminate.
3. MISCELLANEOUS
-------------
(a) Directly or Indirectly. Where any provision in this Agreement
refers to action to be taken by any Person, or which such Person is prohibited
from taking, such provision shall be applicable whether such action is taken
directly or indirectly by such Person.
(b) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed entirely within such State.
(c) Section Headings. The headings of the sections and subsections
of this Agreement are inserted for convenience only and shall not be deemed to
constitute a part thereof.
(d) Notices.
-------
(i) All communications under this Agreement shall be in writing
and shall be delivered by hand or mailed by overnight courier or by
registered or certified mail, postage prepaid:
(A) if to the Company, to 4100 Quakerbridge Road,
Lawrenceville, NJ 08648, Attention: Harch S. Gill, or at such other
address as it may have furnished in writing to the Investors;
(B) if to the Investors, at the addresses listed on Schedule
I hereto, or at such other addresses as may have been furnished the
Company in writing.
(iii) Any notice so addressed shall be deemed to be given: if
delivered by hand, on the date of such delivery; if mailed by courier, on
the first business day following the date of such mailing; and if mailed by
registered or certified mail, on the third business day after the date of
such mailing.
(e) Reproduction of Documents. This Agreement and all documents
relating thereto, including, without limitation, any consents, waivers and
modifications which may hereafter be executed may be reproduced by the Investor
by any
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<PAGE>
photographic, photostatic, microfilm, microcard, miniature photographic or other
similar process and the Investors may destroy any original document so
reproduced. The parties hereto agree and stipulate that any such reproduction
shall be admissible in evidence as the original itself in any judicial or
administrative proceeding (whether or not the original is in existence and
whether or not such reproduction was made by theInvestors in the regular course
of business) and that any enlargement, facsimile or further reproduction of such
reproduction shall likewise be admissible in evidence.
(f) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties.
(g) Entire Agreement; Amendment and Waiver. This Agreement
constitutes the entire understanding of the parties hereto and supersedes all
prior understanding among such parties. This Agreement may be amended, and the
observance of any term of this Agreement may be waived, with (and only with) the
written consent of the Company and the Investors holding a majority of the then
outstanding Registrable Securities.
(h) Severability. In the event that any part or parts of this
Agreement shall be held illegal or unenforceable by any court or administrative
body of competent jurisdiction, such determination shall not effect the
remaining provisions of this Agreement which shall remain in full force and
effect.
(i) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.
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<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first set forth above.
ENVIROGEN, INC.
/s/ Harcharan S. Gill
By:_________________________________
Harcharan S. Gill
President
INVESTORS:
WARBURG, PINCUS VENTURES, L.P.
By: Warburg, Pincus & Co.,
General Partner
/s/ Robert S. Hillas
By:_________________________________
Robert S. Hillas
Partner
/s/ William C. Smith
____________________________________
WILLIAM C. SMITH
/s/ Douglas W. Jacobson
____________________________________
DOUGLAS W. JACOBSON
/s/ Gary W. Hawk
____________________________________
GARY W. HAWK
/s/ Richard W. Schowengerdt
____________________________________
RICHARD W. SCHOWENGERDT
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<PAGE>
SCHEDULE I
Name and Address
of Investor
- -----------
Warburg, Pincus Ventures, L.P.
466 Lexington Avenue
New York, NY 10017
Attention: Robert S. Hillas
William C. Smith
S38 W33688 Highway D
Dousman, WI 53118
Douglas W. Jacobson
2518 N. 81st Street
Wauwatosa, WI 53213
Gary W. Hawk
W272 N1347 Spring Hill Drive
Pewaukee, WI 53072
Richard W. Schowengerdt
250 N. Summit Moors Drive
Oconomowoc, WI 53066
<PAGE>
JOINT FILING AGREEMENT
This Joint Filing Agreement dated as of April 18, 1997 among Warburg,
Pincus Ventures, L.P., a Delaware limited partnership; Warburg, Pincus & Co., a
New York general partnership; and E.M. Warburg, Pincus & Co., LLC, a New York
limited liability company (collectively, the "Reporting Entities").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, the Reporting Entities may be required to file a statement,
and amendments thereto, containing the information required by Schedule 13D
pursuant to Section 13(d) of the Securities Exchange Act of 1934 (the "Exchange
Act"), and Rule 13d-1 promulgated thereunder, in connection with the acquisition
of shares of common stock of Envirogen, Inc., a Delaware corporation; and
WHEREAS, pursuant to Paragraph (f) of Rule 13d-1, the undersigned
desire to satisfy any Schedule 13D filing obligation under Rule 13d-1 by a
single joint filing.
NOW, THEREFORE, in consideration of the premises, the undersigned
hereto agree as follows:
1. The undersigned agree that any Statement on Schedule 13D to which
this Agreement is attached, and any Amendments to such Statement, are filed on
behalf of each one of them.
2. This Agreement may be executed in any number of counterparts and all
of such counterparts taken together shall be deemed to constitute one and the
same instrument.
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
duly executed and delivered on the date above indicated.
WARBURG, PINCUS VENTURES, L.P.
By: Warburg, Pincus & Co.,
General Partner
By:/s/ Robert S. Hillas
---------------------------
Robert S. Hillas
Partner
WARBURG, PINCUS & CO.
By:/s/ Robert S. Hillas
---------------------------
Robert S. Hillas
Partner
E.M. WARBURG, PINCUS & CO., LLC
By:/s/ Robert S. Hillas
---------------------------
Robert S. Hillas
Member
2
