<PAGE>
EXHIBIT 4.1 (a)
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of March 3, 2000,
by and between Stocker & Yale, Inc., a Massachusetts corporation (the
"Company"), and the investor named on the signature page hereof (the
"Investor").
W I T N E S S E T H
WHEREAS, the Company is offering for sale approximately 350,000 shares
(the "Shares") of its Common Stock (as defined below) at the price of $26.00 per
share of Common Stock (the "Per Share Purchase Price"), pursuant to a Private
Placement Memorandum dated March 1, 2000 (the "Memorandum"), this transaction
generally being herein referred to as the "Private Placement"; and
WHEREAS, the Investor desires to purchase from the Company shares of
Common Stock on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, and for good and valuable consideration the receipt of which
is hereby acknowledged, the parties agree as follows:
1. DEFINITIONS. Unless specifically defined herein, capitalized
terms used herein have the meaning ascribed to such terms in the Memorandum
except that, unless the context requires otherwise, the following terms have the
meanings indicated:
"Business Day" shall mean any day except Saturday, Sunday and any day
which shall be in Boston, Massachusetts a legal holiday or a day on which
banking institutions are authorized or required by law or other government
action to close.
"Common Stock" shall mean the Common Stock, par value $0.001 per share,
of the Company.
"Investor Shares" shall mean the shares of Common Stock subscribed for
hereunder by the Investor, together with any shares of Common Stock issued in
respect of such shares pursuant to a dividend or distribution, stock split,
recapitalization, or similar transaction.
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.
<PAGE>
2. PURCHASE OF COMMON STOCK; SUBSEQUENT SALE.
(a) PURCHASE. Subject and pursuant to the terms and conditions
set forth in this Agreement, the Company agrees that it will issue and sell to
the Investor and the Investor agrees that it will purchase from the Company, at
the Per Share Purchase Price, __________ shares of Common Stock. The aggregate
purchase price for the shares of Common Stock shall be $_______ (the "Aggregate
Purchase Price"). The shares of Common Stock are being offered pursuant to the
Memorandum.
(b) OTHER INVESTORS. The Company proposes to enter into a form
of Stock Purchase Agreement with other investors (the "Other Investors") on
terms no more favorable to such other Investors than the terms set forth herein.
The Investor and the Other Investors are hereinafter referred to collectively as
the "Investors."
3. DELIVERIES AT CLOSING.
(a) DELIVERIES BY THE INVESTOR. At the Closing of the
transactions contemplated hereby, the Investor shall deliver to the Company the
following:
(1) the Aggregate Purchase Price by wire transfer of
immediately available funds to an account designated by the Company as set forth
on ANNEX VI hereto, which funds will be delivered to the Company in
consideration of the Shares at the closing of the transaction contemplated
hereby;
(2) an executed Investor Questionnaire in the form
attached as ANNEX I;
(3) a executed Managed Account Representation Letter, if
applicable, in the form attached as ANNEX II;
(4) a completed copy of ANNEX III representing and
warranting as to shares beneficially owned prior to the consummation of the
transactions contemplated hereby; and
(5) a completed Registration Statement Questionnaire in
the form attached as ANNEX IV.
(b) DELIVERIES BY THE COMPANY. At the Closing of the
transactions contemplated hereby, one or more certificates representing the
Investor Shares registered in the name of the Investor or its nominee(s), as the
Investor has specified in writing to the Company.
4. REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS.
(a) INVESTOR REPRESENTATIONS, WARRANTIES AND COVENANTS. The
Investor represents, warrants and agrees as follows:
2
<PAGE>
(1) The Investor has received and reviewed a copy of the
Memorandum, and all appendices and supplements (if any) thereto, relating to the
Shares and understands that no Person has been authorized to give any
information or to make any representations that were not contained in the
Memorandum, and the Investor has not relied on any such other information or
representations in making a decision to purchase the Investor Shares. The
Investor has had access to such financial and other information and has had the
opportunity to ask questions and receive answers as deemed necessary in respect
of the decision to purchase the Shares, and has consulted with advisors
concerning the proposed investment in the Company. The Investor understands
that an investment in the Company involves a high degree of risk for the
reasons, among others, set forth under the caption "RISK FACTORS" in the
Memorandum.
(2) The Investor has decided to invest in the Shares
and, in making the decision to so invest, is not in any way relying on the fact
that any other Person has decided to invest in the Shares.
(3) The Investor represents that the Investor (or, if
applicable, each managed account on whose behalf the Investor Shares are being
purchased by such Investor) is a sophisticated investor or is an "accredited
investor" as defined in Rule 501 under the Securities Act of 1933, as amended
(the "Securities Act"), as certified by the Investor pursuant to the Investor
Questionnaire attached hereto as ANNEX I. The Investor further represents that
the Investor (or, if applicable, each managed account on whose behalf the
Investor Shares are being purchased) has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risk of an investment in the Shares and can bear the economic risk of loss of
the entire investment in the Shares being purchased.
(4) The Investor understands and expressly acknowledges
and agrees that none of the Shares has been, or will be, registered or qualified
under the Securities Act, or under any applicable securities laws of any State
of the United States ("Applicable State Law") and therefore may not be offered,
sold, transferred, assigned, pledged, hypothecated or otherwise disposed of,
directly or indirectly, unless subsequently registered or qualified under the
Securities Act and under Applicable State Law or unless any exemptions from the
registration requirements of the Securities Act and Applicable State Law are
available, in each case to the extent permitted by the terms of this Agreement.
(5) The Investor understands and agrees that all
certificates representing the Investor Shares shall bear a legend which will be
substantially in the form of the following:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT") AND SUCH SECURITIES MAY
NOT BE OFFERED, SOLD, PLEDGED, TRANSFERRED OR
HYPOTHECATED OR OTHERWISE
3
<PAGE>
ASSIGNED EXCEPT PURSUANT TO (1) A REGISTRATION STATEMENT WITH
RESPECT TO SUCH SECURITIES WHICH IS EFFECTIVE UNDER SUCH ACT OR
(2) RULE 144 OR 144A UNDER SUCH ACT OR ANY OTHER AVAILABLE
EXEMPTION FROM REGISTRATION UNDER SUCH ACT RELATING TO DISPOSITION
OF SECURITIES."
(6) The Investor (or, if applicable, each managed
account on whose behalf the Investor Shares are being purchased by the Investor)
will acquire the Investor Shares pursuant to this Agreement for its own account
for investment and not with a view to, or in connection with, the resale or
distribution thereof or in any arrangement or understanding with any other
persons regarding the distribution of such Shares in violation of the Securities
Act. The Investor hereby covenants and agrees to execute a lockup agreement,
containing a ninety (90) day restriction on the sale of Investor Shares, and
other standard terms and conditions, with any requesting underwriter
participating in a primary offering (as defined in Section 5.1(a)(1) below).
(7) The Investor hereby covenants and agrees with the
Company not to make any sale of the Investor Shares without causing the
prospectus delivery requirement under the Securities Act to be satisfied or
otherwise complying with the Securities Act, and the Investor acknowledges and
agrees that the Shares are not transferable on the books of the Company unless
the certificate submitted to the transfer agent evidencing the Investor Shares
is accompanied by (1) a separate certificate (i) in the form of ANNEX V hereto,
(ii) executed by an officer of, or other authorized person designated by, the
Investor, and (iii) to the effect that (A) the Investor Shares have been sold in
accordance with a registration statement pursuant to Section 5 and (B) the
requirement of delivering a current prospectus has been satisfied; or (2) an
opinion of counsel reasonably satisfactory to the Company stating that
registration is not required under the Securities Act. The Investor
acknowledges that there may be times when the Company may suspend the use of the
prospectus forming a part of a registration statement in the event and during
such period pending negotiations relating to, or consummation of, a transaction
or the occurrence of any other event that would require additional disclosure of
material information by the Company in the registration statement and disclosing
such information would adversely affect the Company (as to which the Company has
a BONA FIDE business purpose for preserving confidentiality) that would make it
impractical or inadvisable to cause the registration statement to be filed or to
become effective or to amend or supplement the registration statement or which
otherwise renders the Company unable to comply with the Securities and Exchange
Commission (the "Commission") requirements. In such event, the Company may
suspend the use of such prospectus until such time as an amendment to such
registration statement has been filed by the Company and declared effective by
the Commission, or until such time as the Company has filed an appropriate
report with the Commission pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). The Investor hereby covenants and agrees that it
will not sell any Investor Shares pursuant to said prospectus during the period
commencing at the time at which the Company gives the Investor written notice of
the suspension of the use of said prospectus and ending the
4
<PAGE>
date on which the Company gives the Investor written notice that the Investor
may thereafter effect sales pursuant to said prospectus.
(8) The execution and delivery of this Agreement by the
Investor and the performance of this Agreement and the consummation by the
Investor or the Investor's advisory clients, as the case may be, of the
transactions contemplated hereby have been duly authorized by all necessary
(corporate, in the case of a corporation) action of the Investor and, if
applicable, the Investor's advisory clients; and this Agreement, when duly
executed and delivered by the Investor, will constitute a valid and legally
binding instrument, enforceable in accordance with its terms against the
Investor or any of the Investor's advisory clients, as the case may be, except
as such enforceability may be limited by bankruptcy, insolvency, reorganization
or similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles (regardless of whether the issue of enforceability
is considered in a proceeding in equity or at law) and except as the
indemnification and contribution agreements of the Investor in Section 5(d)
hereof may be legally unenforceable.
(9) The Investor represents that:
(A) If the Investor is a corporation, it is a
corporation duly incorporated, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, with full power and authority
(corporate and other) to perform its obligations under this Agreement. If the
Investor is a limited liability company, it is a limited liability company duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, with full power and authority (limited
liability company and other) to perform its obligations under this Agreement.
The person executing this Agreement on behalf of the Investor is authorized to
act for the Investor in purchasing the Shares.
(B) If the Investor is a corporation acting in an
advisory capacity, it is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation, with full
power and authority (corporate and other) to act on behalf of its advisory
clients under this Agreement. If the Investor is a limited liability company
acting in an advisory capacity, it is a limited liability company duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, with full power and authority (corporate and
other) to act on behalf of its advisory clients under this Agreement
(C) If the Investor is a trust, the trustee
thereunder has been duly appointed as trustee of such Investor with full power
and authority to act on behalf of such Investor and to perform the obligations
of such Investor under this Agreement. Furthermore, the trustee under such
trust has independently determined that the purchase of the Investor Shares is a
suitable investment for such trust as authorized by the terms thereof and
applicable laws and regulations.
5
<PAGE>
(D) If the Investor is a limited partnership, it
is a limited partnership duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, with full power and
authority to perform its obligations under this Agreement.
(E) If the Investor is a limited partnership
acting in an advisory capacity, it is a limited partnership duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, with full power and authority to act on behalf of its advisory
clients under this Agreement.
(F) If the Investor is a corporation, limited
liability company, partnership, trust or other form of business entity, the
execution and delivery of this Agreement will not contravene or result in a
default under any provision of existing law or regulations to which the Investor
is subject, the provisions of its trust instrument, charter, by-laws or other
governing documents or any indenture, mortgage or other agreement or instrument
to which it is a party or by which it is bound and does not require on its part
any approval, authorization, license or filing from or with any foreign,
federal, state or municipal board or agency which has not been obtained or duly
made.
(G) If the Investor is an individual, the
Investor has full power and authority to perform its obligations under this
Agreement.
(10) The Investor agrees to complete and execute and
return to the Company (a) the Investor Questionnaire attached as ANNEX I to this
Agreement representing that the Investor is investing in Shares as an
"accredited investor;" (b) if the Investor is acting on behalf of a managed
account in the purchase of any Investor Shares, the Managed Accounts
Representation Letter attached as ANNEX II to this Agreement; and (c) the
Registration Statement Questionnaire attached as ANNEX IV, in each case together
with an executed signature page to this Agreement. The Investor represents and
warrants that the answers thereto are true and correct as of the date hereof and
will be true and correct as of the effective date of the Registration Statement
(as defined in Section 5). The Investor further represents and warrants that it
is not purchasing the Investor Shares on behalf of any managed account other
than as listed in the Managed Account Representation Letter.
(11) The Investor has not entered into any contracts,
arrangements, understandings or relationships (written or otherwise) with any
other Person or Persons (other than the Company or a limited partner/member or
affiliate of Investor, which in any case shall not violate any securities laws)
with respect to any securities of the Company (including but not limited to
transfer or voting of any of the securities, finder's fees, joint ventures, loan
or option arrangements, puts or calls, guarantees of profits, division of
profits or loss, or the giving or withholding of proxies) or the operations,
management or control of the Company; the Investor is not bound together, under
common control with, in a common enterprise with, or otherwise acting in concert
with, any other Person or Persons (other than a limited partner/member or
affiliate of Investor, which in any case shall not violate any securities laws)
6
<PAGE>
in connection with the transactions contemplated by this Agreement; and the
Investor does not own any securities of the Company which are pledged or
otherwise subject to a contingency the occurrence of which would give another
Person voting power or investment power over such securities.
(12) Except as otherwise set forth in ANNEX III, as of
the date hereof, the Investor does not beneficially own any shares of Common
Stock. The Company acknowledges that certain of the members/limited partners of
Investor may own shares of Common Stock; PROVIDED that such member/limited
partner is an "accredited investor" as defined in Rule 501 of the Securities
Act.
(13) No state, federal or foreign regulatory approvals,
permits, licenses or consents or other contractual or legal obligations are
required for the Investor to enter into this Agreement or otherwise purchase the
Investor Shares.
(b) COMPANY REPRESENTATIONS, WARRANTIES AND COVENANTS. The
Company hereby represents, warrants and agrees as follows:
(1) The Company has been duly organized and is validly
existing in good standing under the laws of the jurisdiction of its
organization, with full power and authority (corporate and other) to perform its
obligations under this Agreement and to consummate the transactions contemplated
hereby.
(2) The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby have been duly authorized by all necessary action of the
Company and the Agreement has been duly executed and delivered by the Company;
and this Agreement, when duly executed and delivered by the Investor, will
constitute a valid and legally binding instrument of the Company enforceable in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles (regardless
of whether the issue of enforceability is considered in a proceeding in equity
or at law) and except as the indemnification and contribution agreements of the
Company in Section 5(d) hereof may be legally unenforceable.
(3) The Investor Shares have been duly authorized by the
Company, and when issued and delivered by the Company against payment therefor
as contemplated hereby and in accordance with the terms of the Memorandum, the
Investor Shares will be validly issued, fully paid and nonassessable, free of
preemptive rights and free from all taxes, liens, charges and security interests
in respect of the issuance thereof.
(4) The execution and delivery of this Agreement, the
consummation by the Company of the transactions herein contemplated and the
compliance by the Company with the terms hereof do not and will not violate the
Articles of Organization of the Company,
7
<PAGE>
or the By-Laws of the Company, or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or to which any of their properties or assets are
subject, or any applicable statute or any order, judgment, decree, rule or
regulation of any court or governmental agency or body having jurisdiction over
the Company or any of its subsidiaries or any of their properties or assets; and
no consent, approval, authorization, order, registration or qualification of or
with any such court or governmental agency or body is required for the valid
authorization, execution, delivery and performance by the Company of this
Agreement, the issue of the Investor Shares or the consummation by the Company
of the other transactions contemplated by this Agreement, except for such
consents, approvals, authorizations, registrations or qualifications as may be
required under Federal or state securities or "blue sky" laws or, with respect
to requirements applicable to the Investor.
(5) The information contained in the following
documents, which the Company has furnished to the Investor does not contain any
untrue statement of material fact or omit to state any material fact necessary
in order to make the statements therein in light of the circumstances in which
they were made not misleading as of the respective final dates of the documents.
Each of the documents listed in (A) through (E) below complied as to form in all
material respects with the applicable requirements of the Securities Act or
Exchange Act.
(A) the Company's Annual Report to Stockholders
on Form 10-KSB for the fiscal year ended December 31, 1998 (without exhibits);
(B) Amendment No. 1 to the Company's Annual
Report for the fiscal year ended December 31, 1998 on Form 10-KSB/A;
(D) Notice to Stockholders and Proxy Statement
for its Special Meeting in lieu of an Annual Meeting of Stockholders held May
20, 1999;
(E) the Company's Quarterly Report on Form 10-QSB
for the quarterly period ended September 30, 1999; and
(E) the Company's Quarterly Report on Form 10-QSB
for the quarterly period ended June 30, 1999.
(6) The balance sheets contained in the Company's
Quarterly Report on Form 10-QSB for the quarterly period ended September 30,
1999 have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis, are consistent in all material
respects with the books and records of the Company and accurately present in all
material respects the financial position of the Company and its subsidiaries as
of September 30, 1999. There has been no material adverse change in the
financial condition or business or results of operations of the Company or its
subsidiaries since September 30, 1999.
8
<PAGE>
(7) Except as disclosed in the documents referred to in
paragraph (5) above, there is no action, suit, proceeding, inquiry or
investigation before or by any court, public board or body pending or, to the
knowledge of the Company or any of its subsidiaries, threatened in writing
against the Company or any of its subsidiaries, wherein an unfavorable decision,
ruling or finding would have a material adverse effect on the properties,
business, condition (financial or other), or results of operations of the
Company and its subsidiaries taken as a whole or the transactions contemplated
by this Agreement or any of the documents contemplated hereby or which would
adversely affect the validity or enforceability of, or the authority or ability
of the Company to perform its obligations under this Agreement or any of such
other documents.
(c) SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
Notwithstanding any investigation made by any party to this Agreement, all
covenants, agreements, representations and warranties made by the Company and
the Investor herein and in the certificates for the Investor Shares delivered
pursuant hereto shall survive the execution of this Agreement, the delivery to
the Investor of the Investor Shares being purchased and the payment therefor.
5. REGISTRATION OF THE SHARES; COMPLIANCE WITH THE SECURITIES ACT.
(a) REGISTRATION RIGHTS; REGISTRATION PROCEDURES AND EXPENSES.
(1) If at any time or times after the date hereof, the
Company shall determine or be required to register any shares of its Common
Stock or other equity securities for sale under the Securities Act in exchange
for cash (whether in connection with a public offering of securities by the
Company (a "primary offering"), a public offering of securities by stockholders
of the Company (a "secondary offering") or both), but not in connection with a
registration effected solely to implement an employee benefit plan or a
transaction to which Rule 145 or any other similar rule of the Commission under
the Securities Act is applicable, the Company shall:
(i) Promptly give written notice thereof to each
of the Investors.
(ii) Use commercially reasonable efforts to effect
the registration under the Securities Act of all Investor Shares (but not any
other shares) which such Investors request to be registered in a writing
delivered to the Company within 10 days after such Investors' receipt of the
notice referred to above, subject to subparagraph (iii) below.
(iii) In the case of the registration of shares of
Common Stock by the Company in connection with an underwritten public offering,
(i) the Company shall not be required to include any Investor Shares in such
underwriting unless the Investors thereof accept the terms of the underwriting
as agreed upon between the Company and the underwriter
9
<PAGE>
or underwriters selected by it, and (ii) if the underwriter(s) determines that
marketing factors require a limitation on the number of Investor Shares to be
offered, the Company shall not be required to register Investor Shares of the
Investors in excess of the amount, if any, of shares of the capital stock which
the principal underwriter of such underwritten offering shall reasonably and in
good faith agree to include in such offering in excess of any amount to be
registered for the Company, and in the event of any such limitation the number
of Investor Shares of any Investor requesting inclusion in such registration
shall be based upon the relative holdings of Common Stock of all Investors
requesting such registration (and if any Investor would thus be entitled to
include more Investor Shares than such Investor requested to be registered, the
excess shall be allocated among other requesting Investors PRO RATA based upon
their relative holdings of Common Stock). All expenses relating to the
registration and offering of Investor Shares pursuant to this Section 5(a)(1)
and pursuant to Section 5(a)(2) below shall be borne by the Company, except that
the Investors shall bear underwriting and selling commissions attributable to
their Investor Shares being registered, any transfer taxes on shares being sold
by such Investors and the costs of any counsel or other professional advisors
engaged by the Investors.
(2) The Company shall:
(a) Subject to the provisions of Section 5(c)
below, prepare and file with the Commission within 120 days of the Closing a
registration statement (the "Registration Statement") to enable the public
offering and sale of the Investor Shares by the Investor from time to time
through the over-the-counter market or in privately-negotiated transactions or
otherwise.
(b) Use commercially reasonable efforts, subject
to receipt of necessary information from the Investor, to cause the Registration
Statement to become effective as promptly as practicable after filing thereof.
(c) Promptly prepare and file with the Commission
such amendments and supplements to the Registration Statement and the prospectus
used in connection therewith as may be necessary to keep the Registration
Statement effective for a period not exceeding the second anniversary of the
Closing, or such shorter period which will terminate on the earlier of the date
when (i) the Shares held by the Investor may be sold without registration under
the Securities Act or (ii) all of the Shares covered by such Registration
Statement have been sold pursuant to such Registration Statement or otherwise.
(d) Promptly furnish to the Investor with respect
to the Investor Shares registered under the Registration Statement (and to each
underwriter, if any, of such Investor Shares) such number of copies of the
Registration Statement and any amendment or supplement thereto and of
prospectuses and preliminary prospectuses in conformity with the requirements of
the Securities Act.
10
<PAGE>
(e) Promptly file documents required of the
Company for customary "blue sky" clearance in states specified in writing by the
Investor and reasonably required by the Investor in order to resell its Investor
Shares; PROVIDED, HOWEVER, that the Company shall not be required to qualify to
do business or consent to service of process in any jurisdiction in which it is
not now so qualified or has not so consented.
(f) Promptly inform the Investor when any stop
order by the Commission has been issued with respect to the Investor Shares and
use commercially reasonable efforts to promptly cause such stop order to be
withdrawn.
(g) Take such other actions as may reasonably be
necessary to effect the registration of the resale of the Investor Shares in
accordance with the terms of this Agreement and to allow such Investor Shares to
trade in the same market system or exchange where the Company's Common Stock
then trades.
(h) File the reports required to be filed by it
under the Securities Act and the Exchange Act (or, if the Company is not
required to file such reports, it will, upon the request of any holder of
Investor Shares, make publicly available other information so long as necessary
to permit sales under Rule 144 under the Securities Act), all to the extent
required from time to time to enable the Investor to sell Investor Shares
without registration under the Securities Act within the limitations provided by
(i) Rule 144 under the Securities Act, as such Rule may be amended from time to
time, or (b) any similar rule or regulation hereafter adopted by the Commission;
PROVIDED, HOWEVER, that nothing in this Agreement shall require the Company to
file reports under the Securities Act or the Exchange Act, to register any of
its securities under the Exchange Act, or to make publicly available any
information concerning the Company at any time when it is not required by law or
by any agreement by which it is bound to do any of the foregoing.
A questionnaire related to the Registration Statement to be completed by the
Investor is attached hereto as ANNEX IV.
(b) TRANSFER OF SHARES. The Investor agrees not to effect any
disposition of the Shares or the right to purchase the Shares that would
constitute a sale within the meaning of the Securities Act except as
contemplated in Sections 5(a)(1) and (2) or pursuant to an exemption from
registration under the Securities Act. The Investor agrees to promptly notify
the Company of any changes in the information set forth in any registration
statement regarding the Investor Shares or the Investor.
(c) The Investor hereby acknowledges and agrees that in the
event that the Company makes any filing with the SEC in connection with a
primary underwritten offering within 120 days following the Closing Date, the
time period for preparing and filing a Registration Statement as contemplated by
Section 5(a)(2) above shall be extended until December 31, 2000 and the Company
shall use commercially reasonable efforts, subject to the
11
<PAGE>
receipt of necessary information from the Investor, to cause the Registration
Statement to become effective as promptly thereafter as practicable.
(d) INDEMNIFICATION AND CONTRIBUTION. For the purpose of this
Section 5(d):
(1) The term "Selling Shareholder" shall include the
Investor, officers, directors, trustees, or any affiliate of such Investor and
each person, if any, who controls the Selling Shareholder within the meaning of
the Securities Act;
(2) The term "Registration Statement" shall include (i)
the Registration Statement and any final prospectus, exhibit, supplement or
amendment included in or relating to the Registration Statement and (ii) any
registration statement filed in connection with Section 5(a)(1) and any final
prospectus, exhibit, supplement or amendment included in or relating to such
registration statement; and
(3) The term "untrue statement" shall include any untrue
statement or alleged untrue statement, or any omission or alleged omission to
state in the Registration Statement a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
The Company agrees to indemnify and hold harmless each Selling
Shareholder from and against any losses, claims, damages or liabilities to which
such Selling Shareholder may become subject (under the Securities Act or
otherwise) insofar as such losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) arise out of, or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or the 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 arise out of any failure by the Company to fulfill any
undertaking included in the Registration Statement and the Company will
reimburse such Selling Shareholder for any reasonable legal or other expenses
reasonably incurred in investigating, defending or preparing to defend any such
action, proceeding or claim, PROVIDED, HOWEVER, that the Company shall not be
liable in any such case to the extent that such loss, claim, damage or liability
arises out of, or is based upon, any such untrue statement or omission made in
such Registration Statement in reliance upon information furnished to the
Company by or on behalf of such Selling Shareholder for use in preparation of
the Registration Statement, or the failure of such Selling Shareholder to comply
with the covenants and agreements contained in Sections 3(a) and 5(c) hereof
respecting sale of the Shares or any statement or omission in any prospectus
that is corrected or made not misleading in any subsequent prospectus that was
delivered to the Investor prior to the pertinent sale or sales by the Investor.
The Company will reimburse such Selling Shareholder, as the case may be, for any
legal or other expenses reasonably incurred in investigating, defending or
preparing to defend any such action, proceeding or claim.
12
<PAGE>
The Investor agrees to indemnify and hold harmless the Company (and each
person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act, each officer of the Company who signs the Registration Statement
and each director of the Company) from and against any losses, claims, damages
or liabilities to which the Company (or any such officer, director or
controlling person) may become subject (under the Securities Act or otherwise),
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon, any failure to
comply with the covenants and agreements contained in Sections 3(a) and 5(b)
hereof respecting sale of the Shares, or any untrue statement of a material fact
contained in the Registration Statement on the effective date thereof if such
untrue statement was made in reliance upon information furnished by or on behalf
of the Investor for use in preparation of the Registration Statement, PROVIDED,
HOWEVER, that such Investor shall not be liable in any such case to the extent
that the Investor has furnished in writing to the Company information expressly
for use in such Registration Statement or any amendment thereof or supplement
thereto which corrected or made not misleading information previously furnished
to the Company prior to the filing of the Registration Statement, and if
thereafter, has notified the Company of such information immediately upon its
occurrence or the Investor's knowledge of its occurrence. The Investor will
reimburse the Company (or such officer, director or controlling person), as the
case may be, for any legal or other expenses reasonably incurred in
investigating, defending or preparing to defend any such action, proceeding or
claim. In no event shall the liability of the Investor hereunder be greater in
amount than the dollar amount of the proceeds received by such Investor upon the
sale of the Shares giving rise to such indemnification obligation.
Promptly after receipt by any indemnified person of a notice of a claim
or the beginning of any action in respect of which indemnity is to be sought
against an indemnifying person pursuant to this Section 5(d), such indemnified
person shall notify the indemnifying person in writing of such claim or of the
commencement of such action, and, subject to the provisions hereinafter stated,
in case any such action shall be brought against an indemnified person and such
indemnifying person shall be entitled to participate therein, and, to the extent
it shall wish, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified person. After notice from the indemnifying
person to such indemnified person of its election to assume the defense thereof,
such indemnifying person shall not be liable to such indemnified person for any
legal expenses subsequently incurred by such indemnified person in connection
with the defense thereof, PROVIDED, HOWEVER, that if there exists or shall exist
a conflict of interest that would make it inappropriate, in the opinion of
counsel to the indemnified person, for the same counsel to represent both the
indemnified person and such indemnifying person or any affiliate or associate
thereof, the indemnified person shall be entitled to retain its own counsel at
the expense of such indemnifying person; PROVIDED, HOWEVER, that no indemnifying
person shall be responsible for the fees and expenses of more than one separate
counsel for all indemnified parties.
If the indemnification provided for in this Section 5(d) from the
indemnifying person is unavailable to an indemnified person hereunder in respect
of any losses, claims, damages,
13
<PAGE>
liabilities or expenses referred to herein, then the indemnifying person, in
lieu of indemnifying such indemnified person, shall contribute to the amount
paid or payable by such indemnified person as a result of such losses, claims,
damages, liabilities or expenses in such proportion as is appropriate to reflect
the relative fault of the indemnifying person and indemnified persons in
connection with the actions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative fault of such indemnifying person and indemnified persons shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact, has been
made by, or relates to information supplied by, such indemnifying person or
indemnified persons, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount paid
or payable by a party as a result of the losses, claims, damages, liabilities
and expenses referred to above shall be deemed to include, subject to the
limitations set forth in this Section 5(d), any reasonable legal or other fees
or expenses reasonably incurred by such party in connection with any
investigation or proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), no Investor shall be
required to contribute any amount in excess of the dollar amount of the proceeds
received by such Investor upon the sale of the Shares giving rise to such
contribution obligation. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(e) TERMINATION OF CONDITIONS AND OBLIGATIONS. The conditions
precedent imposed by Section 2 or this Section 5 upon the transferability of the
Investor Shares shall cease and terminate as to any particular number of the
Investor Shares when such Investor Shares shall have been effectively registered
under the Securities Act and sold or otherwise disposed of in accordance with
the intended method of disposition set forth in the registration statement
covering such Investor Shares or at such time as an opinion of counsel
satisfactory to the Company shall have been rendered to the effect that such
conditions are not necessary in order to comply with the Securities Act.
(f) INFORMATION AVAILABLE. So long as a registration statement
is effective covering the resale of the Investor Shares, the Company will
furnish to the Investor:
(1) As soon as practicable after available (but in the
case of the Company's Annual Report to Shareholders, within one hundred twenty
(120) days after the end of each fiscal year of the Company), one copy of (i)
its Annual Report to Shareholders (which Annual Report shall contain financial
statements audited in accordance with generally accepted accounting principles
by a national firm of certified public accountants), (ii) if not included in
14
<PAGE>
substance in the Annual Report to Shareholders, its Annual Report on Form 10-K
or equivalent form, (iii) its Quarterly Reports to Shareholders, (iv) if not
included in substance in its Quarterly Reports to Shareholders, its quarterly
reports on Form 10-Q or equivalent form, and (v) a full copy of the particular
registration statement covering the Shares (the foregoing, in each case,
excluding exhibits);
(2) Upon the reasonable request of the Investor, all
exhibits excluded by the parenthetical to subparagraph (i) of this Section 5(f)
and all other information that is made available to shareholders; and
(3) Upon the reasonable request of the Investor, an
adequate number of copies of the prospectuses to supply to any other party
requiring such prospectuses;
and the Company, upon the reasonable request of the Investor, will meet with the
Investor or a representative thereof at the Company's headquarters to discuss
all information relevant for disclosure in the registration statement covering
the Investor Shares and will otherwise cooperate with any Investor conducting an
investigation for the purpose of reducing or eliminating such Investor's
exposure to liability under the Securities Act, including the reasonable
production of information at the Company's headquarters.
8. MISCELLANEOUS.
(a) FEES AND EXPENSES. Each of the parties hereto shall be
responsible for their own expenses incurred in connection with the transactions
contemplated hereby. The Company shall reimburse the Investor for its
reasonable out-of-pocket expenses incurred in connection with the procedures in
Section 5(a)(2)(a) through (h) hereof, other than fees and expenses, if any, of
counsel or other advisors to the Investor upon delivery to the Company of
reasonable documentation setting forth such out-of-pocket expenses.
(b) BINDING AGREEMENT; ASSIGNMENT. This Agreement shall be
binding upon, and shall inure solely to the benefit of, each of the parties
hereto, and each of their respective heirs, executors, administrators,
successors and permitted assigns, and no other person shall acquire or have any
right under or by virtue of this Agreement. The Investor may not assign any of
its rights or obligations hereunder to any other person or entity without the
prior written consent of the Company.
(c) ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement among the parties hereto with respect to the subject matter hereof and
may be amended only by written execution by both parties. By executing this
Agreement below, the Investor agrees to be bound by all of the terms,
provisions, warranties, covenants and conditions contained herein. Upon
acceptance by the Company, this Agreement shall be binding on both parties
hereto.
15
<PAGE>
(d) CONSENT TO JURISDICTION. THIS AGREEMENT SHALL BE ENFORCED,
GOVERNED AND CONSTRUED IN ALL RESPECTS IN ACCORDANCE WITH THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS, WITHOUT GIVING EFFECT TO ITS CONFLICTS OF LAWS
PRINCIPLES. FURTHERMORE, EACH INVESTOR HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS AND THE UNITED
STATES OF AMERICA FOR THE DISTRICT OF MASSACHUSETTS IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT.
(e) NOTICES. All notices, requests, consents and other
communication hereunder shall be in writing, shall be mailed by first class
registered or certified mail, or nationally recognized overnight express courier
postage prepaid, and shall be deemed given when so mailed and shall be delivered
as addressed as follows:
if to the Company, to:
Stocker & Yale, Inc.
32 Hampshire Road
Salem, New Hampshire 03079
Attn: Mark W. Blodgett
Chief Executive Officer
with a copy mailed to:
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, Massachusetts 02109
Attn: Stuart M. Cable, P.C.
or to such other person at such other place as the Company shall designate to
the Investor in writing; and
if to the Investor, at its address as set forth at the end of this Agreement, or
at such other address or addresses as may have been furnished to the Company in
writing.
(f) COUNTERPARTS. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one in the same agreement.
[Remainder of Page Intentionally Left Blank]
16
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
STOCKER & YALE, INC.
By:
------------------------------
Name:
Title:
Accepted and Agreed as of the date
first above written:
-----------------------------------
Name of Investor (Print)
By:
----------------------------
Name:
Title
Address:
---------------------------
---------------------------
---------------------------
Telephone:
-------------------------
Facsimile:
-------------------------
Nominee (name in which Investor
Shares are to be registered, if
different than name of Investor)
-----------------------------------
Address of Nominee:
-----------------------------------
-----------------------------------
-----------------------------------
Taxpayer I.D. Number:______________
(if acquired in the name of a nominee,
the taxpayer I.D. number of such
nominee)
S-1
<PAGE>
(CONTINUED ON NEXT PAGE)
Designated Bank_____________________
Address_____________________________
ABA No._____________________________
Account No._________________________
Attention___________________________
EACH INVESTOR EXECUTING THESE PURCHASE AGREEMENT
SIGNATURE PAGES ON BEHALF OF ONE OR MORE MANAGED
ACCOUNTS SHOULD PROVIDE THE NAME OF, AND FOREGOING
INFORMATION WITH RESPECT TO, EACH SUCH MANAGED
ACCOUNT.
S-2
<PAGE>
ANNEX I
INVESTOR QUESTIONNAIRE
The Shares are being offered for sale to "accredited investors" as that
term is defined in Rule 501 under the Securities Act of 1933, as amended (the
"Act").
The undersigned entity certifies that it (and each managed account on
whose behalf Investor Shares are being purchased by it) is an "accredited
investor" because it is (check one or more items below):
_______ i. a bank as defined in section 3(a)(2) of the Act whether
acting in its individual or fiduciary capacity;
_______ ii. a savings and loan association or other institution as
defined in section 3(a)(5)(A) of the Act whether acting in
its individual or fiduciary capacity;
_______ iii. a broker dealer registered pursuant to section 15 of the
Securities Exchange Act of 1934, as amended;
_______ iv. an insurance company as defined in section 2(13) of the
Act;
_______ v. an investment company registered under the Investment
Company Act of 1940, as amended (the "1940 Act");
_______ vi. a business development company as defined in section
2(a)(48) of the 1940 Act;
_______ vii. a Small Business Investment Company licensed by the U.S.
Small Business Administration under section 301(c) or (d)
of the Small Business Investment Act of 1958;
_______ viii. a plan established and maintained by a state or its
political subdivision for the benefit of its employees,
provided that such plan has total assets in excess of
$5,000,000;
_______ ix. an employee benefit plan within the meaning of Title I of
the Employee Retirement Income Security Act of 1974
("ERISA"), provided that the investment decision is made by
a plan fiduciary, as defined in section 3(21) of ERISA, and
the plan fiduciary is either a bank, savings and loan
association, insurance company or registered investment
adviser or provided that the employee benefit plan has
total assets in excess of $5,000,000; or if a self-directed
plan, with investment decisions made solely by persons that
are accredited investors;
<PAGE>
ANNEX I
Page 2
_______ x. a private business development company as defined in
section 202(a)(22) of the Investment Advisers Act of 1940;
_______ xi. an organization described in section 501(c)(3) of the
Internal Revenue Code, not formed for the specific purpose
of acquiring the Investor Shares, with total assets in
excess of $5,000,000;
_______ xii. a director or executive officer, or general partner of the
Company;
_______ xiii. a corporation, Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of
acquiring the Investor Shares, with total assets in excess
of $5,000,000;
_______ xiv. a trust, with total assets in excess of $5,000,000, not
formed for the specific purpose of acquiring the Investor
Shares, and the purchase of the Investor Shares is directed
by a sophisticated person as described in Rule
506(b)(2)(ii) under the Act;
_______ xv. a natural person whose individual net worth, or joint net
worth with that person's spouse, at the time of his
purchase exceeds $1,000,000;
_______ xvi. a natural person who had an individual income in excess of
$200,000 in each of 1998 and 1999 or joint income with that
person's spouse in excess of $300,000 in each of those
years and has a reasonable expectation of reaching the same
income level in 2000;
_______ xvii. an entity in which all of the equity owners are accredited
investors (described in any of (i) - (xvi) above).
INVESTOR:
By:
-------------------------------------
Name:
Title:
<PAGE>
ANNEX II
[Form of Managed Accounts Representation Letter]
Stocker & Yale, Inc.
32 Hampshire Road
Salem, New Hampshire 03079
Attn: Mark W. Blodgett
Chief Executive Officer
Ladies and Gentlemen:
Reference is hereby made to that certain Stock Purchase Agreement, dated
as of February __, 2000 (the "Agreement"), by and between you and the
undersigned relating to the purchase of shares of the common stock, par value
$0.001 per share (the "Common Stock"), of Stocker & Yale, Inc. ("Stocker").
Capitalized terms used herein that are not defined herein have the meaning set
forth in the Agreement.
The undersigned has executed or is executing the Agreement as an
Investor.
This Managed Accounts Representation Letter will serve to advise you that
in executing the Agreement, the undersigned has acted for or on behalf of one or
more persons ("Accounts") pursuant to authority granted to the undersigned by
each such Account.
The undersigned hereby represents and warrants to, and covenants and
agrees with, you that:
i. the shares of Common Stock being purchased under the
Agreement by or for an Account are being purchased for the
benefit of the Account and the undersigned is not acting
for itself but is acting as a fiduciary on behalf of such
Account;
ii. the representations and warranties of the Investor set
forth in Section 3(a)(iii) of the Agreement are true and
correct as to each Account and the Investor Shares being
purchased by or for such Account;
iii. each such Account will be fully bound by and subject to the
Agreement in all respects as an Investor;
iv. the undersigned is fully authorized by each such Account to
enter into the Agreement with full authority regarding the
investment in and disposition of the Investor Shares, the
evaluation of the merits and risks of the investment and to
execute this Managed Accounts Representation Letter for or
on behalf of such Account;
<PAGE>
v. the undersigned is registered or licensed as either an
investment adviser or a dealer or broker and is in
compliance with all investment adviser or dealer and broker
requirements, as the case may be, in connection with the
sale of the Investor Shares and with all the statutes,
rules and regulations with respect to registration or
licensing in each state in which the Investor Shares are
sold by the undersigned; and
Executed as of the date as of which the Agreement is executed by the
undersigned.
ACCOUNT MANAGER:
-------------------------------------
By:
------------------------------
Name:
Title:
On behalf of the following accounts:
<PAGE>
ANNEX III
NUMBER OF SHARES BENEFICIALLY OWNED
<PAGE>
ANNEX IV
REGISTRATION STATEMENT QUESTIONNAIRE
In connection with the preparation of the Registration Statement, please
provide us with the following information:
1. Pursuant to the "Selling Shareholder" section of the Registration
Statement, please state your or your organization's name exactly as it should
appear in the Registration Statement:
2. Please provide the following information, as of the Closing Date:
(1) (2)
Number of shares
Number of Shares if any, which will
which are being be owned after
included in the completion of sale
Registration of Shares included
Statement (if all in the Registration
purchased, put all) Statement
------------------ ---------
3 Have you or your organization had any position, office or other
material relationship within the past three (3) years with the Company or its
affiliates other than as disclosed in the Memorandum?
Yes No
----- -----
If yes, please indicate the nature of any such relationship below:
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
<PAGE>
ANNEX V
Attention:
INVESTOR'S CERTIFICATE OF SUBSEQUENT SALE
The undersigned, [an officer of, or other person duly authorized by]
______________ [fill in official name of individual or institution] hereby
certifies that he/she [said institution] is the Investor in the shares evidenced
by the attached certificate, and as such, sold such shares on ___________ [date]
in accordance with registration statement number _________________________ [fill
in the number of or otherwise identify registration statement] and the
requirement of delivering a current prospectus and current annual and
quarterly reports by the Company has been complied with in connection with
such sale.
Print or Type:
Name of Investor
(Individual or
Institution)
------------------------------------
Name of Individual
representing
Investor (if an
Institution):
------------------------------------
Title of Individual
representing
Investor (if an
Institution):
------------------------------------
Signature by:
Individual Investor or
Individual representing
Investor:
------------------------------------
<PAGE>
ANNEX VI
WIRE INSTRUCTIONS
FUNDS TO BE WIRED TO:
Citibank New York
ABA 021000089
f/a 09253792
n/o Lewco Securities Corp (as agent for Schroder & Co. Inc.)
for further credit to account W03-0000335
n/o KS Securities Syndicate Account
CHECK PAYMENTS TO / PHYSICAL DELIVERIES:
Schroder & Co. Inc.
Attn: Barbara Canton-Jackson
Equitable Center
787 Seventh Avenue
New York, NY 10019-6016
Phone: (212) 492-6853
Fax: (212) 492-7273
f/a W03-0000335
n/o KS Securities Syndicate account
