EXHIBIT 10.1
INFRAMETRICS, INC.
SHAREHOLDERS AGREEMENT
This Shareholders Agreement (the "Agreement") is made and entered into as
of March 19, 1999, among FLIR Systems, Inc., an Oregon corporation ("Acquiror"),
Inframetrics, Inc., a Delaware corporation ("Target") and each of the
shareholders of Target set forth on Appendix A hereto (each a "Shareholder" and
collectively, the "Shareholders").
This Agreement is entered into in connection with that certain Agreement
and Plan of Merger dated as of March 19, 1999 (the "Merger Agreement") by and
among Acquiror, Irabu Acquisition Corporation, Target and the Shareholders. The
Merger Agreement provides for the merger of Irabu Acquisition Corporation with
and into Target (the "Merger") in a transaction in which the issued and
outstanding shares of capital stock of Target (the "Target Stock") will be
converted into the right to receive shares of Common Stock, $.01 par value per
share, of Acquiror (the "Acquiror Stock") on the terms and conditions set forth
in the Merger Agreement. Capitalized terms used herein but not defined herein
shall have their defined meanings as set forth in the Merger Agreement.
1. Accounting Treatment. Each Shareholder understands and agrees that it
is intended that the Merger will be treated as a "pooling of interests" in
accordance with generally accepted accounting principles and the applicable
General Rules and Regulations published by the Securities and Exchange
Commission (the "SEC").
2. Reliance Upon Representations, Warranties and Covenants. Each
Shareholder has been informed that the treatment of the Merger as a "pooling of
interests" for financial accounting purposes is dependent upon the accuracy of
each Shareholder's representations and warranties set forth herein, and upon
each Shareholder's compliance with the covenants set forth herein, and that a
tax-free reorganization for federal income tax purposes requires, among other
factors, the accuracy of the representations contained herein. Each Shareholder
understands that the representations and warranties and covenants of such
Shareholder set forth herein will be relied upon by Acquiror, Target, their
respective counsel and accounting firms and other shareholders of Target.
3. Representations, Warranties and Covenants of Each Shareholder.
Each Shareholder represents, warrants and covenants as follows:
(a) Each Shareholder has full power and authority to execute this
Agreement, to make the representations and warranties and covenants herein
contained and to perform such Shareholder's obligations hereunder.
(b) Appendix A attached hereto sets forth all shares of Target Stock
owned by each Shareholder, including all Target Stock as to which such
Shareholder has sole or shared voting or investment power and all rights,
options and warrants to acquire Target Stock. Except
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as contemplated by the Merger Agreement, no other person or entity not a
signatory to this Agreement has a beneficial interest in or right to acquire all
or any portion of the shares of Target Stock set forth in Appendix A.
(c) Each Shareholder is acquiring the Acquiror Stock solely for the
Shareholder's own account, for investment and not with a view to any resale or
other distribution thereof in violation of the Securities Act.
(d) Each Shareholder acknowledges and understands that the terms of
the Merger have not been reviewed by the SEC or by any state securities
authorities, that the Acquiror Stock has not been registered under the
Securities Act, any state securities law or registered or qualified under any
other securities laws, based on, among other factors, that no distribution or
public offering has been effected and the Acquiror Stock will be issued by
Acquiror in connection with a transaction that does not involve any public
offering within the meaning of Section 4(2) of the Securities Act. Each
Shareholder understands that Acquiror is relying on such Shareholder's
representations as set forth herein for purposes of claiming such exemption,
including the bona fide nature of such Shareholder's investment intent as
expressed above. Each Shareholder acknowledges that, except as is set forth in
Section 7 of this Agreement, Acquiror is under no obligation to register the
Acquiror Stock under the Securities Act. As a result, unless an exemption from
such registration is then available, such Shareholder must hold the Acquiror
Stock until such time as Acquiror has registered the Acquiror Stock for resale
under the Securities Act and qualified the Acquiror Stock for resale under
applicable state securities laws.
(e) Each Shareholder is familiar with Regulation D promulgated under
the Securities Act and is an "accredited investor" as defined in Rule 501(a) of
such Regulation D or such Shareholder, either alone or together with such
Shareholder's representative, has such knowledge and experience in financial,
investment and business matters that the Shareholder is capable of evaluating
the merits and risks of an investment in the Acquiror Stock. Each Shareholder
acknowledges that the Acquiror Stock are volatile securities that involve a high
degree of risk. Each Shareholder represents that it is capable of determining
what documents and information are necessary to evaluate the Merger and/or an
investment in the Acquiror Stock, and has the capacity to protect its own
interests in connection with the Merger and the acquisition of the Acquiror
Stock.
(f) Each Shareholder represents that its financial condition is such
that the Shareholder is able to bear any and all economic risks associated with
investment in the Acquiror Stock, including the risk of holding the Acquiror
Stock for an indefinite period of time. Each Shareholder represents that it can
also afford a complete loss of its investment in the Acquiror Stock, and has
adequate means of providing for the Shareholder's current needs and possible
personal contingencies; provided, however, that nothing contained herein shall
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relieve Acquiror from strict adherence to the terms of Section 7.
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(g) Until such time as the Acquiror Stock has been registered for
resale, each Shareholder understands and acknowledges that each stock
certificate representing the Acquiror Stock shall bear a legend in, or
substantially in, the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
RESTRICTIONS CONTAINED IN A SHAREHOLDERS AGREEMENT AND HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
UNDER ANY STATE SECURITIES LAWS. NEITHER SUCH SHARES NOR ANY
PORTION THEREOF OR INTEREST THEREIN MAY BE SOLD, ASSIGNED,
TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF (I) EXCEPT AS SET
FORTH IN THE SHAREHOLDERS AGREEMENT AND (II) UNLESS THE SAME ARE
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE STATE
SECURITIES LAWS OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE AND THE CORPORATION SHALL HAVE RECEIVED EVIDENCE OF
SUCH EXEMPTION REASONABLY SATISFACTORY TO THE CORPORATION (WHICH
MAY INCLUDE, AMONG OTHER THINGS, AN OPINION OF COUNSEL
SATISFACTORY TO THE CORPORATION)."
(h) Each Shareholder understands that Acquiror may maintain a "stop
transfer order" against the Acquiror Stock for the purpose of ensuring
compliance with applicable securities laws. Acquiror shall not be required (a)
to transfer or have transferred on its books any Acquiror Stock that has been
sold or otherwise transferred in violation of any of the provisions of this
Agreement or (b) to treat as an owner of such Acquiror Stock or to accord the
right to vote or pay dividends to any purchaser or other transferee to whom such
Acquiror Stock shall have been so transferred in violation of any provision of
this Agreement. Acquiror agrees that such stop transfer instructions and
legends will be promptly removed and transfers of Acquiror Common Stock will be
processed if the provisions of this Agreement and the Securities Act are
complied with.
(i) Each Shareholder has received a copy of the Inframetrics, Inc.
Information Statement dated March 17, 1999, including copies of Acquiror's
Annual Report on Form 10-K for the year ended December 31, 1997, Acquiror's 1998
Annual Report to Shareholders, Acquiror's Proxy Statement dated April 3, 1998,
Acquiror's Prospectus dated June 30, 1998 and Acquiror's Quarterly Reports on
Form 10-Q for the quarters ended March 31, 1998, June 30, 1998 and September 30,
1998 (collectively, the "Disclosure Materials"). The Shareholder, either alone
or together with the Shareholder's representative, has made such further
investigation as the Shareholder deems appropriate as to, and is fully familiar
with, and knowledgeable regarding, the financial condition, business affairs and
prospects of Acquiror. The Shareholder has been given the opportunity to ask
questions of, and receive answers from, the principal officers of Acquiror
concerning the business and financial affairs of Acquiror, and has had further
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opportunity to obtain any additional information necessary to verify the
accuracy of the foregoing information. To the extent any Shareholder has not
sought information regarding any particular matter, the Shareholder represents
that Shareholder had no interest in doing so and that such matters are not
material to the Shareholder in connection with this investment.
4. Negative Covenants of Shareholder.
(a) Notwithstanding any other provision of this Agreement to the
contrary, each Shareholder covenants and agrees that it will not, except in the
Merger, sell, transfer, exchange, pledge or otherwise dispose of (including by
way of distributions to underlying beneficial owners), or in any other way
reduce such Shareholder's risk of ownership or investment in, or make any offer
or agreement relating to any of the foregoing with respect to any shares of
Target Stock that such Shareholder owns or hereafter may acquire as set forth in
Appendix A, or any shares of Acquiror Stock that such Shareholder may acquire in
connection with the Merger, or any securities that may be paid as a dividend or
otherwise distributed thereon or with respect thereto or issued or delivered in
exchange or substitution therefor (all such shares and other securities of
Acquiror being herein sometimes collectively referred to as "Restricted
Securities"), (i) during the thirty (30) day period immediately preceding the
Effective Time of the Merger, and (ii) until the date (the "Pooling Report
Filing Date") that Acquiror files with the SEC a report (the "Pooling Report")
that includes the combined financial results of Acquiror and Target for a period
of at least thirty (30) days of combined operations of Acquiror and Target
within the meaning of Accounting Series Release No. 130, as amended, of the SEC.
Acquiror covenants and agrees that the Pooling Report shall be filed with the
SEC on or before May 17, 1999, provided, however, that if the Closing Date is on
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or after March 1, 1999, Acquiror shall file the Pooling Report with the SEC
within 60 days after the Closing Date.
(b) Each Shareholder covenants and agrees that it will not sell,
transfer, exchange, pledge, or otherwise dispose of, or make any offer or
agreement relating to any of the foregoing with respect to, any Restricted
Securities, or any option, right or other interest with respect to any
Restricted Securities, unless (i) such transaction is permitted pursuant to Rule
144 under the Securities Act, (ii) counsel representing such Shareholder, which
counsel is reasonably satisfactory to Acquiror, shall have advised Acquiror in a
written opinion letter satisfactory to Acquiror and Acquiror's legal counsel,
and upon which Acquiror and its legal counsel may rely, that no registration
under the Securities Act would be required in connection with the proposed sale,
transfer or other disposition, (iii) a registration statement under the
Securities Act covering the Acquiror Stock proposed to be sold, transferred or
otherwise disposed of, describing the manner and terms of the proposed sale,
transfer or other disposition, and containing a current prospectus, shall have
been filed with the SEC and made effective under the Securities Act, or (iv) an
authorized representative of the SEC shall have rendered written advice to such
Shareholder (sought by such Shareholder or counsel to such Shareholder, with a
copy thereof and all other related communications delivered to Acquiror) to the
effect that the SEC would take no action, or that the staff of the SEC would not
recommend that the SEC take action, with respect to the proposed disposition if
consummated. Notwithstanding the foregoing, each Shareholder covenants and
agrees that it will not sell, transfer, exchange, pledge or otherwise dispose
of, or
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make any offer or agreement relating to any of the foregoing with respect to,
any Restricted Securities, or any option, right or other interest with respect
to any Restricted Securities, in any transaction in which the purchaser or other
transferee (together with its or their Affiliates) is at the time of such
transaction the Beneficial Owner (as defined in Rule 13d-3 under the Exchange
Act) of more than 10 percent of the outstanding shares of Acquiror Common Stock,
in each case, except (x) pursuant to, and in accordance with, a transaction
approved by the Board of Directors of the Acquiror or (y) in an ordinary
brokerage transaction, in which the purchaser is not known by the Shareholder at
the time of such transaction to be the Beneficial Owner of more than 10 percent
of the outstanding shares of Acquiror Common Stock.
(c) Each Shareholder represents and warrants that it has no plan or
intention to sell, exchange or otherwise dispose of shares of Acquiror Stock
received in connection with the Merger.
5. Rule 144. From and after the Effective Time of the Merger and for
so long as is necessary in order to permit each Shareholder to sell the Acquiror
Stock held by it pursuant to Rule 144 under the Securities Act, Acquiror will
file on a timely basis all reports required to be filed by it pursuant to
Section 13 of the Exchange Act referred to in Paragraph (c)(1) of Rule 144 under
the Securities Act, in order to permit each Shareholder to sell the Acquiror
Stock held by it pursuant to the terms and conditions of Rule 144. Each
Shareholder understands that, except as provided in this Section 5 and in
Section 7 of this Agreement, Acquiror is under no obligation to register the
sale, transfer or other disposition of any Restricted Securities by or on behalf
of any Shareholder or to take any other action necessary in order to make
compliance with an exemption from registration available.
6. Restrictions on Resales. Each Shareholder agrees and acknowledges
that, in addition to the restrictions imposed under Section 4 of this Agreement,
the provisions of the Securities Act prohibit the public resale of Restricted
Securities (except in a transaction registered under the Securities Act) until
such time as such Shareholder has beneficially owned, within the meaning of SEC
Rule 144(d), the Restricted Securities for a period of at least one (1) year
after the date of the Merger. Each Shareholder acknowledges that such
Shareholder is familiar with Rule 144 and agrees to comply with the provisions
of such rule as applicable to the Restricted Securities.
7. Registration of Shares Issued in the Merger.
(a) Registrable Shares. For purposes of this Agreement, "REGISTRABLE
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SHARES" shall mean the shares of Acquiror Common Stock issued in the Merger,
including any and all Escrow Shares, but excluding shares of Acquiror Common
Stock issued in the Merger that have been sold or otherwise transferred by the
shareholders of Target who initially received such shares in the Merger prior to
the effective date of the Registration Statement (as defined below)
(collectively, the "HOLDERS") and excluding shares of Acquiror Common Stock
issuable upon exercise of Target Options (the issuance of which will be
registered on Form S-8); provided however, that a distribution of shares of
Acquiror Common Stock issued in the Merger without
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additional consideration, to underlying beneficial owners (such as the general
and limited partners, shareholders or trust beneficiaries of a Holder) shall not
be deemed such a sale or transfer for purposes of this Section 7 and such
underlying beneficial owners shall be entitled to the same rights under this
Section 7 as the initial Holder from which the Registrable Shares were received
and shall be deemed a Holder for the purposes of this Section 7; and provided
further that, in the case of Elbit Limited, the sale or transfer of the Acquiror
Common Stock issued in the Merger by operation of law in a transaction in which
all of the outstanding equity interests of Elbit are acquired by another party
shall not be deemed such a sale or transfer and such party shall be entitled to
the same rights under this Section 7 as Elbit Limited and shall be deemed a
Holder for the purposes of this Section 7.
(b) Required Registration. Acquiror shall prepare and file with the
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Commission a shelf registration statement on Form S-3 (or such successor or
other appropriate form) under the Securities Act with respect to the Registrable
Shares (the "REGISTRATION STATEMENT") and to effect all such registrations,
qualifications and compliances (including, without limitation, obtaining
appropriate qualifications under applicable state securities or "blue sky" laws
and compliance with any other applicable governmental requirements or
regulations) as any selling Holder may reasonably request (it being understood
that each Holder hereby requests qualification or other clearance for the sale
of the Registrable Shares in the states of the United States) and that would
permit or facilitate the sale of Registrable Shares (provided however that
Acquiror shall not be required in connection therewith to qualify to do business
or to file a general consent to service of process in any such state or
jurisdiction), in each case so that the Registration Statement shall become
effective not later than May 17, 1999, and all other such registrations,
qualifications and compliances may become effective on or prior to the later of
May 17, 1999 or thirty (30) days after the date a Holder requested such
additional registration, qualification or compliance. Acquiror will maintain
the effectiveness of the Registration Statement and other applicable
registrations, qualifications and compliances for up to eighteen (18) months
from the date that the Registration Statement first becomes effective (the
"REGISTRATION EFFECTIVE PERIOD"). Following the later to occur of the Pooling
Report Filing Date and the date the Registration Statement is first declared
effective, the Holders will be permitted (subject in all cases to the provisions
of paragraph (c) of this Section 7) to offer and sell Registrable Shares during
the Registration Effective Period in the manner described in the Registration
Statement provided that the Registration Statement remains effective and has not
been suspended.
(c) Suspension Right. Notwithstanding any other provision of this
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Section 7, Acquiror shall have the right at any time to require that all Holders
suspend further open market offers and sales of Registrable Shares whenever, and
for so long as, in the reasonable judgment of Acquiror after consultation with
counsel, the use of the Registration Statement and the prospectus related
thereto must be suspended due to the happening of any event as a result of which
the prospectus included in the Registration Statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances then existing (the "SUSPENSION
RIGHT"). In the event Acquiror exercises the Suspension Right, such suspension
will continue for the period of time reasonably necessary for disclosure to
occur
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at a time that is not detrimental to Acquiror and its shareholders or, if
earlier, until such time as the information or event is no longer material, each
as determined in good faith by Acquiror after consultation with counsel.
Notwithstanding the foregoing, Acquiror shall not impose the Suspension Right at
any time for more than thirty (30) consecutive days or more than a total of
ninety (90) days during any twelve (12) month period. Acquiror will promptly
give the Holders written notice of any such suspension and will use all
reasonable efforts to minimize the length of the suspension. The Registration
Effective Period shall be extended by a period of time equal to the duration of
any period during which the Suspension Right is imposed.
(d) Further Obligations of Acquiror.
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1. Acquiror shall furnish to the Holders such reasonable number of
copies of the Registration Statement, each amendment and supplement
thereto, the prospectus included in the Registration Statement (including
each preliminary prospectus), any documents incorporated by reference into
the Registration Statement and such other documents as they may reasonably
request in order to facilitate the disposition of Registrable Shares owned
by them.
2. Acquiror will use its best efforts to diligently prepare and file
with the SEC such amendments and supplements to the Registration Statement
and the prospectus used in connection with the Registration Statement as
may be necessary to comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by the Registration
Statement.
3. Acquiror shall file on a timely basis with the SEC all information
that the SEC may require under either of Section 13 or Section 15(d) of the
Exchange Act and, so long as it is required to file such information, shall
take all action that may be required as a condition to the availability of
Rule 144 under the Securities Act (or any successor exemptive rule
hereinafter in effect) with respect to Acquiror Stock. Acquiror shall
furnish to any Holder forthwith upon request (i) a written statement by
Acquiror as to its compliance with the reporting requirements of Rule 144,
(ii) a copy of the most recent annual or quarterly report of Acquiror as
filed with the SEC, and (iii) any other reports and documents that a Holder
may reasonably request in availing itself of any rule or regulation of the
SEC allowing a Holder to sell any such Registrable Shares without
registration.
4. Acquiror shall notify the Holders promptly (i) when a prospectus or
any prospectus supplement or post-effective amendment has been filed, and
with respect to the Registration Statement or post-effective amendment,
when the same has become effective, (ii) of any request by the SEC or any
other federal or state governmental authority for amendments or supplements
to the Registration Statement or prospectus or for additional information,
(iii) of the issuance by the SEC or any other federal or state governmental
authority of any
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stop order suspending the effectiveness of the Registration Statement or
the initiation of any proceeding for that purpose, and (iv) of the receipt
by Acquiror of any notification with respect to the suspension of the
qualification of any of the Registrable Securities for sale in any
jurisdiction or the initiation of any proceeding for that purpose.
5. Acquiror shall use commercially reasonable efforts to prevent the
issuance of any stop order suspending the effectiveness of the Registration
Statement, and if one is issued, will use commercially reasonable efforts
to obtain the withdrawal of any stop order suspending the effectiveness of
the Registration Statement, or the lifting of any suspension of the
qualification (or exemption from qualification) of any Registrable
Securities for sale in any jurisdiction at the earliest possible time.
(e) Obligations of Holders.
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1. Each Holder covenants and agrees that it shall promptly
furnish to Acquiror such information regarding themselves or the
Registrable Securities held by them, and the intended method of disposition
of such securities, as shall be reasonably requested by Acquiror in order
to effect the registration of its Registrable Securities. Each Holder
agrees that it will not effect any disposition of its Registrable
Securities that would constitute a sale within the meaning of the
Securities Act (including a disposition which qualifies for an exemption
from registration thereunder) except in compliance with the Securities Act
and the regulations thereunder, including all applicable prospectus
delivery requirements.
2. Each Holder covenants and agrees that it will promptly advise
the Company of any changes in the information concerning each Holder
contained in the Registration Statement or any other registration statement
required by this Agreement and that such Holder will not make any sale of
Registrable Securities pursuant to the Registration Statement without
complying with the prospectus delivery requirements of the Securities Act.
3. Each Holder acknowledges that occasionally there may be times
(as described in paragraph (c) of this Section 7) when Acquiror must
temporarily suspend the use of the prospectus forming a part of the
Registration Statement until such time as an amendment to the Registration
Statement has been filed by Acquiror and declared effective by the SEC, the
relevant prospectus supplemented by Acquiror or until such time as Acquiror
has filed an appropriate report with the SEC pursuant to the 1934 Act.
During any period in which sales are suspended, each Holder covenants and
agrees that it will not offer or sell any such Registrable Securities
pursuant to the Registration Statement or any such prospectus.
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(f) Expenses. Acquiror agrees to bear the costs and expenses for any
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registration pursuant to this Section 7. The costs and expenses to be borne by
Acquiror for purposes of this Section 7 shall include, without limitation,
printing expenses (including a reasonable number of prospectuses for circulation
by the selling Holders), legal fees and disbursements of counsel for Acquiror,
legal fees and disbursements of one counsel for the Holders in an amount not to
exceed $25,000, "blue sky" expenses, accounting fees and filing fees, but shall
not include underwriting commissions or similar charges.
(g) Indemnification.
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1. Acquiror will indemnify and hold harmless each Holder, its
officers, directors, shareholders or partners and each person, if any, who
controls such Holder within the meaning of the Securities Act or the
Exchange Act, against any losses, claims, damages, or liabilities (joint or
several) to which they may become subject under the Securities Act, the
Exchange Act or other federal or state law, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereof) arise out of or are
based upon any of the following statements, omissions or violations
(collectively a "VIOLATION"): (A) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement,
including any preliminary prospectus or final prospectus contained therein
or any amendments or supplements thereto, (B) 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 (C) any
violation or alleged violation by Acquiror of the Securities Act, the
Exchange Act, any state securities law or any rule or regulation
promulgated under the Securities Act, the Exchange Act or any state
securities law; and Acquiror will pay to each such Holder (and its
officers, directors, employees, shareholders or partners), or controlling
person, any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the indemnity agreement
contained in this paragraph (g) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability, or action if such
settlement is effected without the consent of Acquiror; nor shall Acquiror
be liable in any such case for any such loss, claim, damage, liability, or
action to the extent that it arises out of or is based upon (a) a Violation
which occurs in reliance upon and in conformity with written information
furnished expressly for use in the Registration Statement by any such
Holder, or (b) a Violation that would not have occurred if such Holder had
delivered to the purchaser the version of the Prospectus most recently
provided by Acquiror to the Holder prior to the date of such sale.
2. Each selling Holder will indemnify and hold harmless
Acquiror, each of its directors, each of its officers who has signed the
Registration Statement, each person, if any, who controls Acquiror within
the meaning of the Securities Act, any other Holder selling securities
pursuant to the Registration Statement and any controlling person of any
such other Holder, against any losses, claims, damages, or liabilities
(joint or several) to which any of the foregoing persons may become
subject, under the Securities Act, the Exchange Act or other federal or
state law, insofar as such losses, claims,
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damages, or liabilities (or actions in respect thereto) arise out of or are
based upon any Violation (which includes without limitation the failure of
the Holder to comply with the prospectus delivery requirements under the
Securities Act, and the failure of the Holder to deliver the most current
prospectus provided by Acquiror prior to such sale), in each case to the
extent (and only to the extent) that such Violation occurs in reliance upon
and in conformity with written information furnished by such Holder
expressly for use in the Registration Statement or such Violation is caused
by the Holder's failure to deliver to the purchaser of the Holder's
Registrable Shares a prospectus (or amendment or supplement thereto) that
had been made available to the Holder by Acquiror prior to such sale; and
each such Holder will pay any legal or other expenses reasonably incurred
by any person intended to be indemnified pursuant to this paragraph (g) in
connection with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the indemnity agreement
contained in this paragraph (g) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder.
3. Each person entitled to indemnification under this paragraph
(g) (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 and any litigation resulting therefrom, provided that
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counsel for the Indemnifying Party who conducts 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,
and provided further that the failure of any Indemnified Party to give
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notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this paragraph (g) unless the Indemnifying Party is
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 that 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.
4. To the extent that the indemnification provided for in this
paragraph (g) 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,
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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.
8. Termination of Prior Agreement. Each party hereto agrees and consents
to the termination of the Shareholders' Agreement dated as of September 30, 1996
by and among Elbit Systems, Inc., Elbit Limited and The Investors (as defined
therein), with such termination to be effective on the execution of this
Agreement.
9. Notices. All notices, requests, demands or other communications which
are required or may be given pursuant to the terms of this Agreement shall be in
writing and shall be deemed to have been duly given (i) upon receipt, if
delivered by hand, (ii) one (1) business day after deposit with a nationally-
recognized overnight courier service, with delivery charges prepaid or otherwise
satisfied, or (iii) three (3) days after deposit in the United States mail,
postage prepaid, certified or registered mail, addressed to a party as follows:
IF TO ACQUIROR: FLIR Systems, Inc.
16505 S.W. 72nd Avenue
Portland, OR 97224
Attn: James A. Fitzhenry, Esq.
With a copy to: Ater Wynne LLP
222 SW Columbia, Suite 1800
Portland, OR 97201
Attn: Gregory E. Struxness
IF TO THE At the address set forth beneath each
SHAREHOLDERS: Shareholder's signature below
IF TO TARGET: Inframetrics, Inc.
16 Esquire Road
N. Billerica, MA 01862
Attn: President
Fax No: 978-670-2667
Telephone No: 978-901-8344
11
With a copy to: Goodwin, Procter & Hoar, LLP
Exchange Place
53 State Street
Boston, MA 02109
Attn: Kevin M. Dennis, Esq.
Fax No: 617-305-6550
Telephone No: 617-570-1528
or to such other address as any part may designate for itself by notice given as
provided in this Agreement, except that notices of change of address shall only
be effective upon receipt.
10. Termination. This Agreement shall terminate and shall be of no
further force and effect upon the termination of the Merger Agreement.
11. Counterparts. This Agreement shall be executed in one or more
counterparts, any of which may be a facsimile copy, each of which shall be
deemed an original, and all of which together shall constitute one instrument.
12. Binding Agreement. This Agreement will inure to the benefit of and be
binding upon and enforceable against the parties and their successors and
assigns, including administrators, executors, representatives, heirs, legatees
and devisees of each Shareholder and any pledgee holding Restricted Securities
as collateral.
13. Waiver. No waiver by any part hereto of any condition or of any
breach of any provision of this Agreement shall be effective unless in writing
and signed by each party hereto.
14. Governing Law. This Agreement shall be governed by and construed,
interpreted and enforced in accordance with the laws of the State of Delaware.
15. Integration. This Agreement constitutes the entire understanding of
the parties hereto with respect to the subject matter of the Agreement.
16. Attorneys' Fees. In the event of any legal action or proceeding to
enforce or interpret the provisions hereof, the prevailing party shall be
entitled to reasonable attorneys' fees, and disbursements whether or not the
proceeding results in a final judgment.
17. Effect of Headings. The section headings herein are for convenience
only and shall not affect the construction or interpretation of this Agreement.
18. Third-Party Reliance. Counsel to and accountants for the parties shall
be entitled to rely upon this Agreement.
12
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed on the day and year first written above.
FLIR SYSTEMS, INC.
By:/s/ J. Kenneth Stringer III
----------------------------------------
J. Kenneth Stringer III
President and
INFRAMETRICS, INC.
By:/s/ Jay Teich
----------------------------------------
Name:______________________________________
Title:_____________________________________
SHAREHOLDERS
Advent Direct Investment Program Limited
Partnership
By:/s/ Dennis R. Costello
----------------------------------------
Name:______________________________________
Title:_____________________________________
Address:c/o Advent International Corporation
75 State Street, 29th Floor
Boston, MA 02109
Attn: Dennis R. Costello
Advent Israel Limited Partnership
By:/s/ Dennis R. Costello
----------------------------------------
Name:______________________________________
Title:_____________________________________
Address:c/o Advent International Corporation
75 State Street, 29th Floor
Boston, MA 02109
Attn: Dennis R. Costello
13
Advent Israel (Bermuda) Limited Partnership
By:/s/ Dennis R. Costello
----------------------------------------
Name:______________________________________
Title:_____________________________________
Address:c/o Advent International Corporation
75 State Street, 29th Floor
Boston, MA 02109
Attn: Dennis R. Costello
EnviroTech Investment Fund I Limited
Partnership
By:/s/ Dennis R. Costello
----------------------------------------
Name:______________________________________
Title:_____________________________________
Address:c/o Advent International Corporation
75 State Street, 29th Floor
Boston, MA 02109
Attn: Dennis R. Costello
Global Private Equity II Limited Partnership
By:/s/ Dennis R. Costello
----------------------------------------
Name:______________________________________
Title:_____________________________________
Address:c/o Advent International Corporation
75 State Street, 29th Floor
Boston, MA 02109
Attn: Dennis R. Costello
Commonwealth Capital Ventures Limited
Partnership
By:/s/ Jeffrey M. Hurst
----------------------------------------
Name:______________________________________
Title:_____________________________________
Address: 20 William Street, Suite 225
Wellesley, MA 02481
Attn: Jeffrey M. Hurst
14
Orion Capital Holdings, Limited Partnership
By:/s/ Steve Kandarian
----------------------------------------
Name:______________________________________
Title:_____________________________________
Address: c/o Orion Partners, L.P.
20 William Street, Suite 145
Wellesley, MA 02481
Attn: Steve Kandarian
M-K I Partnership, Limited Partnership
By:/s/ Steve Kandarian
----------------------------------------
Name:______________________________________
Title:_____________________________________
Address: c/o Orion Partners, L.P.
20 William Street, Suite 145
Wellesley, MA 02481
Attn: Steve Kandarian
The Parthenon Group, Inc.
By:/s/ Kelley Murphy
----------------------------------------
Name:______________________________________
Title:_____________________________________
Address: 200 State Street, 14th Floor
Boston, MA 02109
Attn: Kelley Murphy
Inframetrics Investment Limited Partnership
By:/s/ Jay Teich
----------------------------------------
Name:______________________________________
Title:_____________________________________
Address: c/o Inframetrics, Inc.
16 Esquire Road
North Billerica, MA 01862-2598
Attn: Jay Teich and Azriel Biberstain
15
Elbit Limited
By:/s/ Joseph A. Parini
----------------------------------------
Name:______________________________________
Title:_____________________________________
Address: P.O. Box 539
Advanced Technology Center
Haifa 31053 - Israel
Attn: Emanual Gill
/s/ Azriel Biberstain
-------------------------------------------
Azriel Biberstain
Address: 16 Fairhaven Road
Newton, MA 02159
/s/ Dan Manitakos
-------------------------------------------
Dan Manitakos
Address: 22 Intervale Avenue
Peabody, MA 01960
/s/ Detlev Suderow
-------------------------------------------
Detlev Suderow
Address: 44 Forest Street
Lexington, MA 02173
/s/ Jay Teich
-------------------------------------------
Jay Teich
Address: 64 Webster Road
Weston, MA 02193
/s/ Andy Teich
-------------------------------------------
Andy Teich
Address: 10 Mellen Lane
Wayland, MA 01778
16
/s/ Charlie Torrielli
-------------------------------------------
Charlie Torrielli
Address: 48 Harris Street
Acton, MA 01720
17
APPENDIX A
Target Stock held by Each Shareholder:
Outstanding Outstanding
Shareholder Class B Stock Common Stock Stock Options
- ---------- ------------- ------------ -------------
Advent Direct Investment Program 7,956
Limited Partnership
Advent Israel Limited Partnership 1,870
Advent Israel (Bermuda) Limited 231
Partnership
EnviroTech Investment Fund I 7,235
Limited Partnership
Global Private Equity II Limited 21,127
Partnership
Commonwealth Capital Ventures 6,576
Limited Partnership
Orion Capital Holdings, Limited 11,124
Partnership
M-K I Partnership, Limited 3,612
Partnership
The Parthenon Group, Inc. 2,040
Inframetrics Investment Limited 6,229
Partnership
Elbit Limited 200,000
Azriel Biberstain 3,000 14,000
Dan Manitakos 3,000 14,000
Detlev Suderow 500 2,400
Jay Teich 6,250 23,750
Andy Teich 3,000 14,000
Charlie Torrielli 2,500 0
18