-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HENH1FoBl/eUZyr3N4B5ZyEpMenHHK/hYS9gjE17doRThac1PtW1LaAYpZcIfiP+ 9gHIBHsVl1DMNcliXBo8UA== /in/edgar/work/20000810/0000071241-00-000024/0000071241-00-000024.txt : 20000921 0000071241-00-000024.hdr.sgml : 20000921 ACCESSION NUMBER: 0000071241-00-000024 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000810 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEW BRUNSWICK SCIENTIFIC CO INC CENTRAL INDEX KEY: 0000071241 STANDARD INDUSTRIAL CLASSIFICATION: [3821 ] IRS NUMBER: 221630072 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-06994 FILM NUMBER: 691734 BUSINESS ADDRESS: STREET 1: 44 TALMADGE RD STREET 2: PO BOX 4005 CITY: EDISON STATE: NJ ZIP: 08818-4005 BUSINESS PHONE: 9082871200 MAIL ADDRESS: STREET 1: 44 TALMADGE ROAD STREET 2: PO BOX 4005 CITY: EDISON STATE: NJ ZIP: 08818-4005 10-Q 1 0001.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For The Quarter Ended June 30, 2000 Commission File No. 0-6994 ------ NEW BRUNSWICK SCIENTIFIC CO., INC. State of Incorporation - New Jersey E. I. #22-1630072 ----------- 44 Talmadge Road, Edison, N.J. 08818-4005 Registrant's Telephone Number: 732-287-1200 ------------ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding twelve (12) months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past ninety (90) days. Yes X No --- There are 6,068,755 Common shares outstanding as of August 3, 2000. Page1 NEW BRUNSWICK SCIENTIFIC CO., INC. Index
PAGE NO. ----------------------------- PART I. FINANCIAL INFORMATION: Consolidated Balance Sheets - June 30, 2000 and December 31, 1999 3 Consolidated Statements of Operations - Three and Six Months Ended June 30, 2000 and 1999 4 Consolidated Statements of Cash Flows - Six Months Ended June 30, 2000 and 1999 5 Consolidated Statements of Comprehensive Loss - Three and Six Months Ended June 30, 2000 and 1999 6 Notes to Consolidated Financial Statements 7 Management's Discussion and Analysis of Results of Operations and Financial Condition 11 PART II. OTHER INFORMATION 16
Page2 NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except for share and per share data) ASSETS ------
June 30, December 31, 2000 1999 ------------ ------------- Current Assets (Unaudited) - -------------------------------------------- Cash and cash equivalents $ 2,313 $ 2,111 Accounts receivable, net 10,539 13,769 Refundable income taxes 259 28 Deferred income taxes 85 85 Inventories: Raw materials and sub-assemblies 8,394 6,397 Work-in-process 3,481 3,669 Finished goods 5,889 4,931 ------------ ------------- Total inventories 17,764 14,997 Prepaid expenses and other current assets 865 719 ------------ ------------- Total current assets 31,825 31,709 ------------ ------------- Property, plant and equipment, net 6,511 7,023 Excess of cost over net assets acquired, net 4,579 4,751 Deferred income taxes 153 153 Other assets 1,633 2,390 ------------ ------------- $ 44,701 $ 46,026 ============ =============
LIABILITIES AND SHAREHOLDERS' EQUITY ------------------------------------
Current Liabilities - -------------------------------------------------- Current installments of long-term debt $ 242 $ 236 Advance payments from customers 1,693 462 Accounts payable and accrued expenses 7,497 7,831 -------- -------- Total current liabilities 9,432 8,529 -------- -------- Long-term debt, net of current installments 8,179 7,347 -------- -------- Other liabilities 316 380 Shareholders' equity: Common stock, $0.0625 par value per share, authorized 25,000,000 shares; outstanding, 2000 - 6,068,755; 1999 - 5,344,000 net of shares held in treasury, 2000 - 520,375 and 1999 - 473,069 380 334 Capital in excess of par 36,758 32,907 Accumulated deficit (8,541) (2,107) Accumulated other comprehensive loss (1,761) (1,032) Notes receivable from exercise of stock options (62) (332) -------- -------- Total shareholders' equity 26,774 29,770 -------- -------- $44,701 $46,026 ======== ========
See notes to consolidated financial statements. Page3 NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except share and per share amounts) (Unaudited)
Three Months Ended Six Months Ended June 30, June 30, -------------------- ------------------ 2000 1999 2000 1999 -------------------- ------------------ ----------- ---------- Net sales $ 11,811 $ 14,591 $ 22,196 $ 26,345 Operating costs and expenses: Cost of sales 6,963 8,396 12,826 16,111 Selling, general and administrative Expenses 4,019 3,949 8,028 7,619 Research, development and engineering Expenses 1,877 1,522 3,653 2,893 -------------------- ------------------ ----------- ---------- Total operating costs and expenses 12,859 13,867 24,507 26,623 -------------------- ------------------ ----------- ---------- Income (loss) from operations (1,048) 724 (2,311) (278) Other income (expense): Interest income 9 10 21 24 Interest expense (153) (13) (302) (15) Other income (expense), net (19) (23) (23) (16) Writedown of investment (800) - (800) - Equity in loss in joint venture company (3) (6) (6) (18) -------------------- ------------------ ----------- ---------- (966) (32) (1,110) (25) -------------------- ------------------ ----------- ---------- Income (loss) before income taxes (2,014) 692 (3,421) (303) Income tax benefit (64) - (93) - -------------------- ------------------ ----------- ---------- Net income (loss) $ (1,950) $ 692 $ (3,328) $ (303) ==================== ================== =========== ========== Basic earnings (loss) per share $ (.32) $ .12 $ (.56) $ (.05) ==================== ================== =========== ========== Diluted earnings (loss) per share $ (.32) $ .11 $ (.56) $ (.05) ==================== ================== =========== ========== Basic weighted average number of shares outstanding 6,054 5,837 5,993 5,814 ==================== ================== =========== ========== Diluted weighted average number of shares outstanding 6,054 6,034 5,993 5,814 ==================== ================== =========== ==========
See notes to consolidated financial statements. Page4 NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)
Six Months Ended June 30, ------------------ 2000 1999 ------------------ --------- Cash flows from operating activities: Net loss $ (3,328) $ (303) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 678 495 Writedown of investment 800 - Tax benefit related to exercise of stock options - 27 Change in related balance sheet accounts: Accounts receivable 2,894 (2,087) Refundable income taxes (231) 97 Inventories (2,894) 198 Prepaid expenses and other current assets (170) 153 Accounts payable and accrued expenses 213 (1,272) Advance payments from customers 1,245 (1,260) Other assets (380) - Other liabilities (64) - ------------------ --------- Net cash used in operating activities (1,237) (3,952) ------------------ --------- Cash flows from investing activities: Additions to property, plant and equipment (225) (717) Sale of equipment Increase in excess of cost over net assets acquired 3 25 related to acquisition costs (211) - ------------------ --------- Net cash used in investing activities (433) (692) ------------------ --------- Cash flows from financing activities: Repayment of long-term debt (110) (10) Borrowings under revolving credit facility 1,000 1,250 Proceeds from issue of common stock under stock purchase and option plans 791 378 Payments on notes receivable related to exercised stock options 270 26 ------------------ --------- Net cash provided by financing activities 1,951 1,644 ------------------ --------- Net effect of exchange rate changes on cash (79) (106) ------------------ --------- Net increase (decrease) in cash and cash equivalents 202 (3,106) Cash and cash equivalents at beginning of period 2,111 3,793 ------------------ --------- Cash and cash equivalents at end of period $ 2,313 $ 687 ================== ========= Supplemental disclosure of cash flow information: Cash paid during the period for: Interest $ 303 $ 19 Income taxes 238 75
See notes to consolidated financial statements. Page5 NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (In thousands) (Unaudited)
Three Months Ended Six Months Ended June 30, June 30, -------------------- ------------------ 2000 1999 2000 1999 -------------------- ------------------ -------- -------- Net income (loss) $ (1,950) $ 692 $(3,328) $ (303) Other comprehensive loss: Foreign currency translation adjustment (294) (348) (729) (818) -------------------- ------------------ -------- -------- Net comprehensive income (loss) $ (2,244) $ 344 $(4,057) $(1,121) ==================== ================== ======== ========
See notes to consolidated financial statements. Page6 NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands) (Unaudited) Note 1 - Interim results: In the opinion of the Company, the accompanying unaudited consolidated financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly, its financial position as of June 30, 2000 and the results of its operations and cash flows for the three and six months ended June 30, 2000. Interim results may not be indicative of the results that may be expected for the year. Note 2 - Segment Information as of and for the three and six months ended June 30, 2000 and 1999:
Three Months Ended Six Months Ended June 30 June 30 - ----------------------------------- ------------------ Laboratory Drug Laboratory Drug Research Lead Total Research Lead Total Equipment Discovery Segments Equipment Discovery Segments - ----------------------------------- ------------------ ------------ ----------- ----------- ---------- 2000 - ------------------ Net sales $ 11,694 $ 117 $ 11,811 $ 21,961 $ 235 $22,196 Percentage of sales 99.0% 1.0% 100% 98.9% 1.1% 100% Loss from operations (223) (825) (1,048) (751) (1,560) (2,311) Total assets (1) - - - 44,324 377 44,701 Capital expenditures 86 - 86 225 - 225 Depreciation and amortization (1) 439 - 439 678 - 678 1999 - ------------------ Net sales $ 12,991 $ 1,600 $ 14,591 $ 24,745 $ 1,600 $26,345 Percentage of sales 89.0% 11.0% 100% 93.9% 6.1% 100% Income (loss) from operations (104) 828 724 (466) 188 (278) Total assets (1) - - - 35,333 1,764 37,097 Capital expenditures 303 - 303 717 - 717 Depreciation and amortization (1) 236 - 236 495 - 495 (1) Fixed assets and depreciation related to the Drug Lead Discovery segment are not allocated to the segment as the assets are owned directly by New Brunswick Scientific Co., Inc. and are included in the Laboratory Research Equipment Segment. However, rental expense in lieu of depreciation expense is charged to the Drug Lead Discovery segment which is comprised of DGI BioTechnologies, the Company's drug lead discovery operation.
Note 3 - Earnings (loss) per Common share: Basic earnings (loss) per share is calculated by dividing net income (loss) by the weighted average number of shares outstanding. Diluted earnings (loss) per Page7 share is calculated by dividing net income (loss) by the sum of the weighted average number of shares outstanding plus the dilutive effect, if any, of stock options which have been issued by the Company. Note 4 - Long-term debt and credit agreement: On April 16, 1999, the Company entered into an agreement (the Bank Agreement) with First Union National Bank for a three year, $31 million secured line of credit. The Bank Agreement provides the Company with a $5 million revolving credit facility for both working capital and for letters of credit, a $1 million Revolving Line of Credit for equipment acquisition purposes, a $15 million credit line for acquisitions and a $10 million foreign exchange facility. There are no compensating balance requirements and any borrowings under the Bank Agreement bear interest at various rates based upon a function of the bank's prime rate or Libor at the discretion of the Company. All of the Company's domestic assets, which are not otherwise subject to lien have been pledged as security for any borrowings under the Bank Agreement. The Bank Agreement contains various business and financial covenants including among other things, a debt service coverage ratio, a net worth covenant, and a ratio of total liabilities to tangible net worth. The Bank Agreement was amended in November 1999 in connection with the acquisition of the DJM Cryo-Research Group. The Company was not in compliance with certain covenants at June 30, 2000, however, on August 3, 2000, the Company and the bank entered into an amendment to the Bank Agreement which waived such noncompliance at June 30, 2000, and amended certain financial covenants prospectively based upon certain financial information provided by the Company. At June 30, 2000, $7,652,000 was outstanding under the Bank Agreement. In November 1999, the Company issued notes in the amount of 250,000 ($392,500 at the date of acquisition) in connection with the acquisition of the DJM Cryo-Research Group. The notes bear interest at 6% which are payable annually and principal is payable in five equal annual installments commencing November 2004. At June 30, 2000 the balance of the notes was $379,000. Note 5 - Consolidated statements of shareholders' equity:
Six Months Ended June 30, ------------------ 2000 1999 ------------------ -------- (In thousands) Balance at beginning of period $ 29,770 $30,447 Net loss (3,328) (303) Other comprehensive loss (729) (818) Issuance of shares under stock purchase plan 52 49 Issuance of shares under stock option plans 739 329 Issuance of shares under stock option plans - 27 Tax benefit related to exercise of stock options stock options 270 26 ------------------ -------- Balance at end of period $ 26,774 $29,757 ================== ========
Page8 Note 6 - Stock dividend On February 28, 2000, the Company declared a 10% stock dividend, payable May 15, 2000 to shareholders of record as of April 14, 2000. Upon distribution of the stock dividend, the weighted average number of shares outstanding for the three and six months ended June 30, 1999 was retroactively restated. Note 7 - Investment in Organica, Inc. Since November 1994, the Company has invested $950,000 (less than a twenty-percent interest) in Organica, Inc. (Organica) which was formed in 1993 to develop and commercialize various "environmentally friendly" products produced via fermentation processes. Organica isolates and cultures naturally occurring microorganisms and fungi and blends them with various nutrient sources and carriers to create its products, which are offered as alternatives to various hazardous products. Organica has focused primarily on natural turf products, compost accelerators, hydrocarbon remediation products and non-caustic drain openers. As previously described in the Company's Annual Report on Form 10-K and quarterly reports, the Chief Executive Officer of Organica, Inc. left in the Spring of 1999, after which operations were consolidated at its Pennsylvania production facility. There are continuing uncertainties as to the future direction of Organica and it has continued to generate net losses. As a result of recent developments, Organica has lost one of its key employees and part of its customer base and faces the possible departure of another key employee. Consequently, management has concluded that a significant writedown of the Company's investment in Organica was warranted. Accordingly, in the second quarter, the Company recorded an $800,000 writedown to reduce its minority investment to a book value of $150,000. Organica is involved in evaluating certain strategic alternatives which, based on the information presently available, management believes will enable the Company to recover its remaining investment. Note 8 - Acquisition On November 23, 1999, the Company acquired all of the outstanding common stock of DJM Cryo Research Limited and the net assets of DJM Fabrications (collectively, "DJM Cryo Research Group"), a United Kingdom Corporation and Partnership under common control, respectively, located in Tollesbury, England (the Acquisition). The purchase price consisted of 3.5 million ($5.5 million) in cash, and 250,000 ($392,500) in term notes payable in annual installments over a five year period beginning in November 2004 with 6.00% interest payable annually. The source of the cash consideration paid was the Company's line of credit for acquisition purposes provided by First Union National Bank, payable in monthly installments of $52,513 with 8.14% fixed interest. DJM Cryo Research Group is in the business of designing, developing, and manufacturing ultra-low temperature freezers for laboratories. The acquisition has been accounted for by the purchase method and, accordingly, the results of operations of DJM Cryo Research Group have been included in the Company's consolidated financial statements from November 23, 1999. The excess of the purchase price over the fair value of net identifiable assets acquired has been recorded as goodwill and is being amortized on a straight-line basis over 25 years. The allocation of Page9 the purchase price is preliminary and will be completed in the fourth quarter after appraisals are finalized. The following unaudited pro forma financial information presents the combined results of operations of the Company and DJM Cryo Research Group as if the acquisition had occurred on January 1, 1999, after giving effect to certain adjustments, including amortization of goodwill, additional depreciation expense, increased interest expense on debt related to the acquisition, and related income tax effects. The unaudited pro forma financial information does not necessarily reflect the results of operations that would have occurred had the Company and DJM Cryo Research Group constituted a single entity during such period.
Three months ended Six months ended June 30, 1999 June 30, 1999 ------------------ ----------------- (in thousands, except per share amounts) ---------------------------------------- Net sales $ 14,625 $26,413 Net income (loss) $ 635 $ (417) Income (loss) per diluted share $ .11 $ (.07)
Note 9 - Reclassifications: Certain balance sheet reclassifications have been made to the prior year's presentation to conform to the 2000 presentation. Page10 NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION Forward-looking statements, within the meaning of Section 21E of the Securities Exchange Act of 1934, are made throughout this Management's Discussion and Analysis of Financial Condition and Results of Operations. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words "believes," "anticipates," "plans," "expects," "seeks," "estimates," and similar expressions are intended to identify forward-looking statements. There are a number of important factors that could cause the results of the Company to differ materially from those indicated by such forward-looking statements. The following is Management's discussion and analysis of significant factors that have affected the Company's operating results and financial condition during the quarter and six months ended June 30, 2000. Results of Operations --------------------- Quarter Ended June 30, 2000 vs. Quarter Ended June 30, 1999. - ---------------------------------------------------------------------- For the quarter ended June 30, 2000, net sales were $11,811,000 compared with net sales of $14,591,000 for the quarter ended June 30, 1999, a decrease of 19.1%. The net loss for the 2000 quarter of $1,950,000 or $.32 per diluted share compared with net income of $692,000 or $.11 per diluted share for the second quarter of 1999. The decrease in net sales for the quarter ended June 30, 2000 resulted primarily from the inclusion of $1,600,000 of DGI revenues in the 1999 quarter compared with $117,000 of DGI revenues in the 2000 quarter and a significant downturn in shipments by the Company's European subsidiaries as a result of what appears to be a short-term weakening in the European market. In addition, the sale of a custom bioprocess system in Europe in the amount of $800,000 was reflected in the 1999 period with no comparable sale in 2000. However, orders were strong, especially for custom bioprocess equipment as the order backlog increased to $13,096,000 from $10,327,000 at March 31, 2000. Excluding DGI revenues from the 2000 and 1999 quarters, gross margins increased to 40.5% from 35.4% in the second quarter of 1999 primarily as a result of the Company's acquisition of DJM Cryo-Research Limited (DJM) in November 1999, which prior to the acquisition was a supplier to the Company, as well as a more profitable mix of products sold in the 2000 quarter. The increase of 23.3% in research, development and engineering expenses is primarily attributable to increased spending by DGI BioTechnologies, the Company's drug lead discovery operation and expenses of DJM which was acquired in November 1999 and consequently was not included in the Company's results of operations for the 1999 quarter. Page11 Interest expense increased to $153,000 in the 2000 quarter compared with $13,000 for the 1999 quarter as a result of borrowings under the Company's line of credit for the acquisition of DJM and for working capital purposes. The writedown in investment during the 2000 quarter is a result of the Company's writedown of its investment in Organica, Inc. (See Other Matters - Investment in Organica, Inc.) No tax benefit was taken during the quarter for the losses incurred by the Company's U.S. operations, however, a tax benefit was provided for the losses of the Company's European subsidiaries due to those subsidiaries ability to carryback such losses if necessary. Six Months Ended June 30, 2000 vs. Six Months Ended June 30, 1999 - ----------------------------------------------------------------------------- For the six months ended June 30, 2000, net sales were $22,196,000 compared with net sales of $26,345,000 for the six months ended June 30, 1999, a decrease of 15.7%. The net loss for the 2000 period of $3,328,000 or $.56 per diluted share compared with a net loss of $303,000 or $.05 per diluted share for the comparable 1999 period. The decrease in net sales for the first six months of 2000 resulted primarily from the inclusion of $1,600,000 of DGI revenues in the 1999 period compared with $235,000 of DGI revenues for the first half of 2000 and a significant downturn in shipments by the Company's European subsidiaries as a result of what appears to be a short-term weakening in the European market. In addition, the sale of a custom bioprocess system in Europe in the amount of $800,000 was reflected in the 1999 period with no comparable sale in 2000. During the period the order backlog increased to $13,096,000 from $8,569,000 at December 31, 1999 primarily as a result of orders for custom bioprocess equipment which require six months or more to complete. The majority of the backlog is expected to be shipped during the second half of 2000. Excluding DGI revenues from the 2000 and 1999 periods, gross margins increased to 41.6% from 34.9% in the first half of 1999 primarily as a result of the Company's acquisition of DJM in November 1999, which prior to the acquisition was a supplier to the Company, as well as a more profitable mix of products sold in the 2000 period. The increase of 26.3% in research, development and engineering expenses is primarily attributable to increased spending by DGI BioTechnologies, the Company's drug lead discovery operation, expenses of DJM which was acquired in November 1999 and consequently not included in the Company's results of operations for the first six months of 1999 and a strengthening of the Company's engineering staff. Interest expense increased to $302,000 in the 2000 period compared with $15,000 for the first half of 1999 as a result of borrowings under the Company's line of credit for the acquisition of DJM and for working capital purposes. The writedown in investment during the 2000 period is a result of the Company's writedown of its investment in Organica, Inc. (See Other Matters - Investment in Organica, Inc.) Page12 No tax benefit was taken during the period for the losses incurred by the Company's U.S. operations, however, a tax benefit was provided for the losses of the Company's European subsidiaries due to those subsidiaries' ability to carryback such losses if necessary. Financial Condition ------------------- Liquidity and Capital Resources - ---------------------------------- Working capital decreased from $23,180,000 at December 31, 1999 to $22,393,000 at June 30, 2000 and cash and cash equivalents increased from $2,111,000 at December 31, 1999 to $2,313,000 at June 30, 2000. During the period ended June 30, 2000, accounts receivable decreased to $10,539,000 from $13,769,000 at December 31, 1999 due to the lower level of net sales in the June quarter compared with the quarter ended December 31, 1999. The cash proceeds related to the decrease in accounts receivable was partially offset by an increase in inventories to $17,764,000 at June 30, 2000 compared with $14,997,000 at December 31, 1999. The increase in inventories resulted from lower than planned shipments during the period in conjunction with a build cycle anticipated to meet a higher inflow of orders of standard products. On April 16, 1999, the Company entered into an agreement (the Bank Agreement) with First Union National Bank for a three year, $31 million secured line of credit. The Bank Agreement provides the Company with a $5 million revolving credit facility for both working capital and for letters of credit, a $1 million Revolving Line of Credit for equipment acquisition purposes, a $15 million credit line for acquisitions and a $10 million foreign exchange facility. There are no compensating balance requirements and any borrowings under the Bank Agreement bear interest at various rates based upon a function of the bank's prime rate or Libor at the discretion of the Company. All of the Company's domestic assets, which are not otherwise subject to lien have been pledged as security for any borrowings under this Bank Agreement. The Bank Agreement contains various business and financial covenants including among other things, a debt service coverage ratio, a net worth covenant, and a ratio of total liabilities to tangible net worth. The Bank Agreement was amended in November 1999 in connection with the acquisition of DJM Cryo-Research Group. The Company was not in compliance with certain covenants at June 30, 2000, however, on August 3, 2000, the Company and the bank entered into an amendment to the Bank Agreement which waived such noncompliance at June 30, 2000, and amended certain financial covenants prospectively based upon certain financial information provided by the Company. Management believes that the Company will be in compliance with all covenants through December 31, 2000. In November 1999, the Company issued notes in the amount of 250,000 ($392,500 at the date of acquisition) in connection with the acquisition of the DJM Cryo-Research Group. The notes bear interest at 6% which are payable annually and principal is payable in five equal annual installments commencing November 2004. At June 30, 2000 the balance of the notes was $379,000. Cash Flows from Operating Activities - ---------------------------------------- During the six months ended June 30, 2000 and 1999 net cash used in operating activities amounted to $2,037,000 and $3,952,000, respectively. The primary Page13 reasons for the $1,915,000 net change from 1999 to 2000 were a decrease in accounts receivable in 2000 of $2,894,000 vs. an increase of $2,087,000 in 1999 an increase in accounts payable and accrued expenses of $213,000 in 2000 vs. a decrease of $1,245,000 in 1999 and an increase in advance payments from customers of $1,245,000 in 2000 vs. a decrease of $1,260,000 in 1999 partially offset by (i) a net loss in 2000 of $3,328,000 compared with a net loss of $303,000 in 1999, (ii) an increase in refundable income taxes of $231,000 in 2000 vs. a decrease of $97,000 in 1999, (iii) an increase in inventories of $2,894,000 in 2000 vs. a decrease of $198,000 in 1999 and (iv) an increase in prepaid expenses and other current assets of $170,000 in 2000 vs. decrease of $153,000 in 1999. During the six months ended June 30, 2000, the Company wrote down its minority investment in Organica, Inc. by $800,000 to a book value of $150,000. Cash Flows from Investing Activities - ---------------------------------------- Net cash provided by investing activities amounted to $367,000 in 2000 vs. cash used of $692,000 in 1999. The 2000 period consisted of expenditures for property, plant and equipment and additional goodwill related to additional acquisition costs of DJM Cryo-Research. The 1999 period consisted primarily of expenditures for property, plant and equipment. Cash Flows from Financing Activities - ---------------------------------------- Net cash provided by financing activities amounted to $1,951,000 in 2000 vs. $1,644,000 in 1999. The 2000 and the 1999 periods include $791,000 and $378,000, respectively, from the issuance of Common stock under stock purchase and option plans and $1,000,000 and $1,250,000, respectively, from borrowings under the Company's revolving credit facility. The 2000 period also includes $270,000 of repayments on notes receivable related to exercised stock options. The proceeds in both periods were partially offset by the repayment of long-term debt. Management believes that the resources available to the Company, including its line of credit are sufficient to meet its near and intermediate-term needs, including its funding commitments for DGI BioTechnologies. Other Matters ------------- Recently Issued Accounting Standards - --------------------------------------- In June 1998, SFAS No. 133 "Accounting for Derivative Instruments and Hedging Activities" (SFAS No. 133), was issued to establish standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. It requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. This statement was amended so that it is effective for all quarters of fiscal years beginning after June 15, 2000. The Company does not believe that this statement will have a material impact on the consolidated financial statements. Drug-Lead Discovery Business - ------------------------------ In October 1995, the Company entered the drug-lead discovery business by forming a new company to develop a novel, small molecule drug discovery platform. The Page14 company, DGI BioTechnologies (DGI), is majority-owned and fully funded by the Company and occupies specially designed laboratory space at the Company's headquarters facility in Edison, New Jersey. DGI's operations have had a significant negative impact on the Company's 2000 and 1999 earnings and will continue to do so. During the six months ended June 30, 2000 and 1999, $1,795,000 and $1,412,000, respectively, of research and development expenses were charged to operations. During the 2000 and 1999 periods DGI also recorded $235,000 and $1,600,000, respectively, of revenues primarily for services and licensing fees related to the Research and License Agreement with Novo Nordisk A/S. Management believes DGI needs to become financially self-sufficient in 2000 and all options are being explored, including pursuing additional alliances as well as actively seeking strategic partners. Investment in Organica, Inc. - ------------------------------- Since November 1994, the Company has invested $950,000 (less than a twenty-percent interest) in Organica, Inc. (Organica) which was formed in 1993 to develop and commercialize various "environmentally friendly" products produced via fermentation processes. Organica isolates and cultures naturally occurring microorganisms and fungi and blends them with various nutrient sources and carriers to create its products, which are offered as alternatives to various hazardous products. Organica has focused primarily on natural turf products, compost accelerators, hydrocarbon remediation products and non-caustic drain openers. As previously described in the Company's Annual Report on Form 10-K and quarterly reports, the Chief Executive Officer of Organica, Inc. left in the Spring of 1999, after which operations were consolidated at its Pennsylvania production facility. There are continuing uncertainties as to the future direction of Organica and it has continued to generate net losses. As a result of recent developments, Organica has lost one of its key employees and part of its customer base and faces the possible departure of another key employee. Consequently, Management has concluded that a significant writedown of the Company's investment in Organica was warranted. Accordingly, in the second quarter, the Company recorded an $800,000 writedown to reduce its minority investment to a book value of $150,000. Organica is involved in evaluating certain strategic alternatives which, based on the information presently available, Management believes will enable the Company to recover its remaining investment. Page15 NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K - ------------------------------------------------ The exhibits to this report are listed on the Exhibit Index included elsewhere herein. No reports on Form 8-K have been filed during the quarter ended June 30, 2000. Page16 SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. NEW BRUNSWICK SCIENTIFIC CO., INC. -------------------------------------- (Registrant) Date: August 11, 2000 /s/ David Freedman -------------------- David Freedman Chairman (Chief Executive Officer) /s/ Samuel Eichenbaum ----------------------- Samuel Eichenbaum Vice President - Finance (Principal Accounting Officer) Page17
NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES EXHIBIT INDEX - --------------------------------------------------- Exhibit No. Exhibit Page No. - ---------- -------- --------- 3 (3ii)(e)* By-Laws of the Company as amended and restated as of May 30, 2000. 10.24* Indemnification Agreements with Jerome Birnbaum, Lee Eppstein and Carol Freedman 10.25* First and Second Amendments to the Credit Agreement between New Brunswick Scientific Co., Inc. and First Union Nation dated April 1, 1999 and August 3, 2000, respectively 27 Financial Data Schedule (Filed electronically with SEC only)
* Filed herewith. Page18 EX-3 2 0002.txt 3II(E) 9 NEW BRUNSWICK SCIENTIFIC CO., INC. BY-LAWS (AS AMENDED AND RESTATED ON MAY 30, 2000) ARTICLE I OFFICES Section 1. The registered office of the corporation shall be at 44 Talmadge Road, Edison, New Jersey. Section 2. The corporation may have such other offices either within or without the state as the Board of Directors may designate or as the business of the corporation may require from time to time. Section 3. ARTICLE II SEAL Section 1. The corporate seal shall have inscribed thereon the name of the corporation, the year of its creation and the words "Corporate Seal, New Jersey". Section 2. ARTICLE III SHAREHOLDERS' MEETING Section 1. Meeting Location. All meetings of the shareholders ----------------- shall be held at the corporation's registered office, or at such other place or places either within or without the State of New Jersey as may from time to time be selected by the Board of Directors. Section 2. Annual Meeting. The annual meeting of shareholders --------------- shall be held on the fourth Tuesday of May in each year if not a 1egal holiday, and if a legal holiday, then on the next full business day following at 10:00 o'clock A.M. when they shall elect, by a plurality vote, persons to serve on the Board of Directors, and transact such other business as may properly be brought before the meeting. Section 3. If the annual meeting for election of directors in not held on the day designated therefor, the directors shall cause the meeting to be held as soon thereafter as convenient. 1 Section 4. Special Meetings. Special meetings of the shareholders ---------------- may be called by the Chairman of the Board or the Board of Directors. Section 5. Notice of Shareholders' Meetings. Written notice of ---------------------------------- the time, place and purpose or purposes of every meeting of shareholders shall be given not less 10 days than nor more than sixty days before the date of the meeting, either personally or by mail, to each shareholder of record entitled to vote at the meeting, unless a greater period of notice is required by statute in a particular case. Section 6. When a meeting is adjourned to another time or place, it shall not be necessary to give notice of the adjourned meeting if the time and place to which the meeting is adjourned are announced at the meeting at which the adjournment is taken and at the adjourned meeting only such business is transacted as might have been transacted at the original meeting. However, if after the adjournment, the Board fixes a new record date for the adjourned meeting, a notice of the adjourned meeting shall be given to each shareholder of record on the new record date. Section 7. SECTION 5. Waiver of Notice. Notice of a meeting need not ---------------- be given to any shareholder who signs a waiver of such notice, in person or by proxy, whether before or after the meeting. The attendance of any shareholder at a meeting, in person or by proxy, without protesting prior to the conclusion of the meeting the lack of notice of such meeting, shall constitute a waiver of notice by him. Section 8. Whenever shareholders are authorized to take any action after the lapse of a prescribed period of time, the action may be taken without such lapse if such requirement is waived in writing, in person or by proxy, whether before or after the meeting, taking of such action by every shareholder entitled to vote thereon and at the date of the taking at such action. Section 9. SECTION 6. Fixing Record Date. For the purposes of -------------------- determin-ing the shareholders entitled to notice of, or to vote, at any meeting of shareholders or any adjournment thereof, or for the purpose of determining shareholders entitled to receive payment of any dividend or allotment of any right, or for the purpose of any other action, the Board may fix in advance, a date as the record date for any such determination of shareholders. Such date 2 shall not be more than sixty nor less than ten days before the date of such meeting, nor more than sixty days prior to any other action. If no record date is fixed, the record date for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders shall be the close of business on the day next preceding the day on which notice in given, or, if no notice is given, the day next preceding the day on which the meeting is held, and the record date for determining shareholders for any other purpose shall be at the close of business on the date on which the resolution of the board relating thereto is adopted. When a determination of shareholders of record entitled to notice of or to vote at any meeting of shareholders, has been made as provided in this Section, such determination shall apply to any adjournment thereof, unless the Board fixes a new record date under this section for the adjourned meeting. SECTION 7. Voting List. The officer or agent having charge of the stock ------------ transfer books for shares of the corporation shall make and certify a complete list of shareholders entitled to vote at a shareholders' meeting or any adjournment thereof. Such list shall be arranged a1phabetically within each class and series, with the address of, and the number of shares held by each shareholder; be produced at the time and place of the meeting; be subject to the inspection of any shareholder during the whole time of the meeting; and be prima facie evidence as to who are the shareholders entitled to examine such list or to vote at any meeting. If the requirements of this Section have not been complied with, the meeting shall, on the demand of any shareholder in person or by proxy, be adjourned until the requirements are complied with. Failure to comply with the requirements of this section shall not affect the validity of any action taken at such meeting prior to the making of any such demand. SECTION 8. Quorum. Unless otherwise provided in the Certificate of ------ Incorporation or by statute, the holders of shares entitled to cast a majority of the votes at a meeting shall constitute a quorum at such meeting. The shareholders present in person or by proxy at a duly organized meeting may 3 continue to do business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum. Less than a quorum may adjourn the meeting. Whenever the holders of any class or series of shares are entitled to vote separately on a specified item of business, the provisions of this section shall apply to determining the presence of a quorum of such class or series for the transaction of such specified item of business. SECTION 9. Voting. Each holder of shares with voting rights shall be ------ entitled to one vote for each such share registered in his name, except as otherwise provided in the Certificate of Incorporation. Whenever any action, other than the election of directors, is to be taken by vote of the shareholders, it shall be authorized by a majority of the votes cast at a meeting of shareholders by the holders of shares entitled to vote thereof, unless a greater plurality is required by statute or by the Certificate of Incorporation. Every shareholder entitled to vote at a meeting of shareholders may authorize another person or persons to act for him by proxy. Every proxy shall be executed in writing by the shareholder or his agent. No proxy shall be valid after eleven months from the date of its execution, unless a longer time is expressly provided therein, but in no event shall a proxy be valid after three years from the date of execution. Unless it is coupled with an interest, a proxy shall be revocable at will. A proxy shall not be revoked by the death or incapacity of the shareholder, but such proxy shall continue in force until revoked by the personal representative or guardian of the shareholder. The presence at any meeting of any shareholder who has given a proxy shall not revoke such proxy unless the shareholder shall file written notice of such revocation with the secretary of the meeting prior to the voting of such proxy. SECTION 10. Election of Directors. At each election of directors every ----------------------- shareholder entitled to vote at such election shall have the right to vote the number of shares owned by him for as many persons as there are directors to be elected and for whose election he has a right to vote. Directors shall be elected by a plurality of the votes cast at the election, except as otherwise provided by the Certificate of Incorporation. 4 Elections of directors need not be by ballot unless a shareholder demands election by ballot at the election and before the voting begins. SECTION 11. Inspectors of Election. The Board may, in advance of any ----------------------- shareholder meeting, appoint one or more inspec-tors to act at the meeting or any adjournment thereof. If inspectors are not so appointed or shall fail to qualify, the person presiding at the meeting may, and on the request of any shareholder entitled to vote thereat, shall make such appointment. Each inspector, before entering upon the discharge of his duties shall take and sign an oath faithfully to execute the duties of inspector at the meeting with strict impartiality and according to the best of his ability. No person shall be elected a director at a meeting at which he has served as an inspector. ARTICLE IV - DIRECTORS SECTION 1. The business of this corporation shall be conducted by its Board of Directors, which shall consist of not less then three nor more than 10 directors, and the exact number of directors shall be determined from time to time by resolution adopted by affirmative vote of a majority of the entire Board of Directors. The directors shall be divided into three classes designated Class I, Class II, and Class III. Each class shall consist as nearly as may be possible, of one-third of the total number of directors constituting the entire Board of Directors. At each annual meeting of shareholders, successors to the class of directors whose term expires at that annual meeting shall be elected for a three--year term. It the number of directors is changed, any increase and decrease shall be apportioned among the classes so as to maintain the number of directors in each class as nearly equal as possible, and any additional director of any class elected to fill a vacancy resulting from an increase in such class shall hold office for a term that shall coincide with the remaining term of that class, but in no case will a decrease in the number of directors shorten the term of any incumbent director. A director shall hold office until the annual meeting for the year in which his term expires and until his successor shall be elected and shall qualify, subject, however, to prior death, resignation, retirement, disqualification or removal from office. Any vacancy on the Board 5 of Directors that results from an increase in the number of directors may be filled by a majority of the Board of Directors then in office, although less than a quorum, or by a sole remaining director. Any directors elected to fill a vacancy not resulting from an increase in the number of directors shall have the same remaining term as that of his predecessor. SECTION 2. Regular Meetings. Regular meetings of the Board shall be held ---------------- without notice immediately after the Annual Meeting of Shareholders at the registered office of the corporation, or at such other time and place as shall be determined by the Board. SECTION 3. Quorum. A majority of the entire Board, or of any committee ------ thereof, as then constituted, shall constitute a quorum for the transaction of business, and the act of the majority present at a meeting at which a quorum is present shall be the act of the Board or of the committee. SECTION 4. Action Without Meeting. Any action required or permitted to be ---------------------- taken pursuant to authorization voted at a meeting of the Board or any committee thereof, may be taken without a meeting if, prior or subsequent to such action, all members of the Board or of such committee, as the case may be, consent thereto in writing and such written consents are filed with the minutes of the proceedings of the Board or committee. SECTION 5. Special Meetings. Special meetings of the Board may be called ---------------- by the Chairman of the Board, or the majority of the Board on three days' notice to each director, personally, by mail, facsimile transmission, e-mail or other reasonable method. SECTION 6. Waiver of Notice. Notice of any meeting need not be given to ----------------- any director who signs a waiver of notice, whether before or after the meeting. The attendance of any director at a meeting without protesting prior to the conclusion of the meeting the lack of notice of such meeting shall constitute a waiver of notice by him. Neither the business to be transacted at, nor the purposes of, any meeting of the Board need be specified in the notice or waiver of notice of such meeting. Notice of an adjourned meeting need not be given it the period of adjournment does not exceed ten days in any one adjournment. 6 SECTION 7. Powers of Directors. The Board of Directors shall manage the -------------------- business of the corporation. In addition to the powers and authorities expressly conferred upon them by these Bylaws, the Board may exercise all such powers of the corporation and do all such lawful acts and things as are not by statute or by these By-Laws directed or required to be exercised or done by the shareholders. SECTION 8. Compensation of Directors. The Board, by the affirmative vote ------------------------- of a majority of directors in office and irrespective of any personal interest of any of them, shall have authority to establish reasonable compensation of directors for services to the corporation as directors, officers, or otherwise. SECTION 9. Committees of the Board of Directors. ----------------------------------------- A. The Board of Directors, by resolution adopted by a majority of the entire Board, shall appoint from among its members the following committees: 1. An Executive Committee, which shall be comprised of at least three members of the Board of Directors, one of whom shall be the Chairman of the Board. The Executive Committee shall be the decision-making body of the Board of Directors during the period between the meetings of the Board of Directors. Board approval of the actions of the Executive Committee shall not be required. 2. A Nominating Committee, which shall be comprised of at least three members of the Board of Directors. The Committee shall evaluate prospective candidates for election to the Board of Directors and recommend nominees for consideration at the annual meeting. 3. An Audit Committee, which shall be comprised of at least three members of the Board of Directors. The Committee shall meet with management and independent auditors on matters pertaining to the corporation's financial statements and internal accounting controls. 7 4. A Compensation Committee, which shall be comprised of at least three members of the Board of Directors. The Committee shall review the corporation's policies concerning employment, compensation and deferred compensation including pension benefits and stock option plans, and recommend modifications to such policies. B. If deemed advisable, the Board of Directors, by resolution adopted by a majority of the entire Board, may appoint from among its members additional committees, with the members and the purpose of each such committee to be established by resolution of the Board. C. Each of the committees established under subparagraphs A and B shall have and may exercise all of the authority of the Board, to the extent granted to each such committee, except that no such committee shall: 1. make, alter or repeal any By-Law of the corporation; 2. elect or appoint any director, or remove any officer or director; 3. submit to shareholders any action that requires shareholders' approval; or 4. amend or repeal any resolution theretofore adopted by the Board. D. Action taken at a meeting of any committee established under subparagraphs A and B shall be reported to the Board at its next meeting following such committee meeting; except that, when the meeting of the Board is held within two days after the committee meeting, such report shall, if not made at the first meeting, be made to the Board at its second meeting following such committee meeting. 8 SECTION 10. Conduct of Meetings. Any meeting of the Board or of any --------------------- committee may include participation by any director or committee member not physically present who is able to participate in a meaningful way in all or any part of the meeting through the use of means of communication to the fullest extent authorized by New Jersey corporation law. ARTICLE V - OFFICERS SECTION 1. The officers of the corporation shall consist of a Chairman of the Board, a President, a Secretary, a Treasurer, and, if desired, a Vice Chairman of the Board, a Chief Executive Officer, one or more Vice Presidents, and such other officers as may be required. They shall be annually chosen by the Board of Directors and shall hold office for one year and until their successors are chosen and quality. The Board may also choose such employees and agents as it shall deem necessary, who shall hold their offices for such terms and shall have such authority and shall perform such duties as from time to time shall be prescribed by the Board. Any two or more offices may be held by the same person but no officer shall execute, acknowledge, or verify any instrument in more than one capacity if such instrument is required by law or by these By-Laws to be executed, acknowledged, or verified by two or more officers. SECTION 2. Salaries. The salaries of all officers, employees and agents -------- of the corporation shall be fixed by the Board of Directors, SECTION 3. Removal. Any officer elected or appointed by the Board of ------- Directors may be removed by the Board with or without cause. An officer elected by the shareholders may be removed, with or without cause, only by vote of the shareholders but his authority to act as an officer may be suspended by the Board for Cause. SECTION 4. Chairman of the Board. The Chairman of the Board shall preside --------------------- at all meetings of the shareholders and of the directors. The Chairman of the Board shall lead the Board of Directors in managing the business of the corporation including devising strategies for profitable growth., The Chairman of the Board shall chair the executive committee and shall serve as an Ex -- Officio member of all other committees established by the Board with the - exception of the Audit Committee. - 9 SECTION 5. The President. The President shall manage the affairs of the -------------- corporation in accordance with the law, the corporate By-Laws and the policies and procedures established by the Board, to optimize growth, profitability and shareholders' equity of the corporation. The President shall report to the Board via the Chairman of the Board. SECTION 6. Secretary. The secretary shall keep full minutes of --------- all meetings of the shareholders and directors; he shall be an EX-OFFICIO Secretary of the Board of Directors; he shall attend all sessions of the Board, shall act an clerk thereof, and record all votes and the minutes or all proceedings in a book to be kept for that purpose; and shall perform like duties for the standing committees when required. He shall give or cause to be given, notices of all meetings of the shareholders of the corporation and of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors or the Chairman of the Board, under whose supervision he shall be. SECTION 7. Treasurer. The Treasurer shall deposit all moneys and other --------- valuable effects in the name and to the credit of the corporation, in such depositories as may be designated by the Board or Directors. He shall disburse the funds of the corporation as may be ordered by the Board, taking proper vouchers for such disbursements, and shall render to the Chairman of the Board, President, and Directors, at the regular meetings of the Board, or whenever they may require it, an account of all his transactions as Treasurer. SECTION 8. Vice President, Finance. The Vice President, Finance is the ------------------------- Chief Financial Officer and shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation. He shall render to the Chairman of the Board, President, and Direc-tors, at the regular or any special meetings of the Board, an account of the financial condition of the corporation, and shall submit a full financial report at the annual meeting of the shareholders. SECTION 9. Additional officers may be appointed by the Board, including Vice Chairman of the Board, Chief Executive Officer, one or more Vice Presidents, and such other officers as may be required. They shall have the 10 responsibility and authority defined in their position descriptions adopted by the Board's resolution in creating such positions. ARTICLE VI - VACANCIES, RESIGNATION, REMOVAL SECTION 1. Director. Subject to further provision in the Certificate of -------- Incorporation, any directorship not filled at the annual meeting and any vacancy, however caused, occurring on the Board may be filled by the affirmative vote of a majority of the remaining directors even though less than a quorum of the Board, or by a sole remaining director. A director so elected by the Board shall hold office until the next succeeding annual meeting of shareholders and until his successor shall have been elected and qualify. SECTION 2. Officers. Any vacancy occurring among the officers, however -------- caused, may be filled by the Board of Directors. SECTION 3. Resignations. Any director or other officer may resign by ------------ written notice to the corporation. The resignation shall be effective upon receipt thereof by the corporation or at such subsequent time as shall have been specified in the notice of resignation. SECTION 4. Removal. So long as the Certificate of Incorpora-tion so ------- provides, the Board of Directors shall have the power to remove directors for cause and to suspend directors pending a final determination that cause exists for removal. ARTICLE VII- SHARE CERTIFICATES SECTION 1. Form. The share certificates of the corporation shall be ---- numbered and registered in the transfer records of the corporation as they are issued. They shall bear the corporate seal, or a facsimile thereof, and be signed by the Chairman of the Board and the Secretary. SECTION 2. Transfers. All transfers of the shares of the corporation --------- shall be made upon the books of the corporation by the holder of the shares in person, or by his legal representative. Share certificates shall be surrendered, properly endorsed and canceled at the time of transfer. 11 SECTION 3. Lost Certificates. In the event that a share certificate shall ----------------- be lost, destroyed or mutilated, a new certificate may be issued therefor upon such terms and indemnity to the corporation as the Board of Directors may prescribe. ARTICLE VIII - BOOKS AND ACCOUNTS' SECTION 1. The corporation shall keep books and records of account and minutes of the proceedings of the shareholders, Board of Directors and executive committee, if any. Such books, records and minutes may be kept outside this State. The corporation shall keep at its registered office, or at the office of a transfer agent in this State, a record or records containing the names and addresses of all shareholders, the number, class and series of shares held by each and the dates when they respectively became the owners of record thereof, except that in the case of shares listed on a national securities exchange, the records of the holders of such shares may be kept at the office of a transfer agent within or without this State. SECTION 2. Inspection. Any person who shall have been a shareholder of ---------- record of the corporation for at least six months immediately preceding his demand, or any person holding, or so authorized in writing by the holders of, at least five percent of the outstanding shares of any class, upon at least five days' written demand shall have the right for any proper purpose to examine in person or by agent or attorney, during usual business hours, the minutes of the proceedings of the shareholders and record of shareholders, and to make extracts therefrom, at the places where the same are kept. ARTICLE LX - MISCELLANEOUS PROVISIONS SECTION 1. Monetary Disbursements. All checks or demands for money and ----------------------- notes of the corporation shall be signed by such officer or officers as the Board of Directors may from time to time designate. SECTION 2. Fiscal Year. The fiscal year of the Corporation shall begin on ----------- the date selected from time to time by the Board of Directors. 12 SECTION 3. Dividends. The Board of Directors may declare and pay --------- dividends upon the outstanding shares of the corporation from time to time and to such extent as they deem advisable, in the manner and upon the terms and conditions provided by statute and the Certificate of Incorporation. SECTION 4. Reserve. Before payment of any dividend there may be set aside ------- such sum or sums as the directors, from time to time, in their absolute discretion, think proper as a reserve fund to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the directors shall think conducive to the interests of the corporation, and the directors may abolish any such reserve in the manner in which it was created. SECTION 5. Giving Notice. Whenever written notice is required to be given ------------- to any person, it may be given to such person either personally or by sending a copy thereof through the mail. If notice is given by mail, the notice shall be deemed to be given when deposited in the mail addressed to the person to whom it is directed at his last address as it appears on the records of the corporation, with postage prepaid thereon, or in the event no address is available, the notice shall be deemed to have been given when addressed to general delivery in the area where the person is suspected of residing or when the company has made any other reasonable attempt to give notice to such person. Such notice shall specify the place, day and hour of the meeting, and in the case of a shareholders' meeting, the general nature of the business to be transacted. In computing the period of time for the giving of any notice required or permitted by statute, or by the Certificate of Incorporation or these By-Laws or any resolution of directors of shareholders, the day on which the notice is given shall be excluded, and the day on which the matter noticed is to occur shall be included. ARTICLE X - INDEMNIFICATION SECTION 1. The corporation shall indemnify to the full extent permitted by law any person made, or threatened to be made, a party to an action, suit or 13 proceeding (whether civil, criminal, administrative or investigative), by reason of the fact that he is or was a director, officer or employee of the corporation or serves or served any other enterprise at the request of the corporation. ARTICLE X1 - LOANS TO OFFICERS, DIRECTORS OR EMPLOYEES SECTION 1. The corporation may lend money to, or guarantee any obligation of, or otherwise assist, any officer or other employee of the corporation or of any subsidiary, whenever, in the judgment of the directors, such loan, guarantee or assistance, may reasonably be expected to benefit the corporation; provided, however, that the corporation shall not lend money to, guarantee any obligation of, or otherwise assist, any officer or other employee who is also a director, of the corporation unless such loan, guarantee or assistance is authorized by a majority of the entire board. The loan, guarantee or other assistance may be made with or without interest, and may be unsecured, or secured in such manner as the Board shall approve including, without limitation, a pledge of shares of the corporation, and may be made upon such other terms and conditions as the board may determine. ARTICLE XII - AMENDMENTS SECTION L. The Board of Directors shall have the power to make, alter and repeal these By-Laws, but By-Laws made by the Board may be altered or repealed, and new By-Laws may be made, by the shareholders. 14 EX-10.24 3 0003.txt INDENIFICATION AGREEMENT ------------------------ AGREEMENT dated as of April 11, 2000, between NEW BRUNSWICK SCIENTIFIC CO., INC., a New Jersey corporation (the "Corporation") and Jerome Birnbaum (the "Director"). WHEREAS, the Director is a member of the board of directors of the Corporation and an officer of the Corporation; and WHEREAS, proceedings based upon the Director's performance of his duties may be brought from time to time against or involving him; and WHEREAS, the Corporation recognizes that the threat of such proceedings might inhibit the Director in his performance of his duties and/or cause the Director to cease serving as a director of the Corporation; and WHEREAS, to reduce any such inhibition, the Corporation wishes to indemnify the Director against liabilities he may incur as a result of certain proceedings, as well as expenses he may incur in his defense in such proceedings; and WHEREAS, in certain proceedings involving claims relating to the Employee Retirement Income Security Act of 1974, as amended, Federal law may apply to limit the permissible scope of indemnification; and NOW, THEREFORE, the parties hereto, for valuable consideration, incident to the Director's service to, and to induce the continued service of the Director to the Corporation, agree as follows: 1 ARTICLE I --------- DEFINITIONS ----------- 1.1 Proceeding. "Proceeding" shall mean any pending, threatened or ---------- completed civil, criminal, administrative or arbitrative action, suit or proceeding, any appeal from any such action, suit or proceeding, and any inquiry or investigation which could lead to any such action, suit or proceeding. 1.2 Expenses. "Expenses" shall mean reasonable costs, disbursements and -------- counsel fees. 1.3 Liabilities. "Liabilities" shall mean amounts paid or incurred in ----------- satisfaction or settlements, judgments, fines and penalties. 1.4 Derivative Suit. "Derivative Suit" shall mean a Proceeding against the ---------------- Director brought by or in the right of the Corporation, which involves the Director by reason of his being or having been a director, officer or agent of the Corporation or a subsidiary thereof. 1.5 Breach Of The Director's Duty of Loyalty. "Breach Of The Director's -------------------------------------------- Duty Of Loyalty" shall mean an act or omission which that person knows or believes to be contrary to the best interests of the Corporation or its Shareholders in connection with a matter in which he has a material conflict of interest. 1.6 ERISA Suit. "ERISA Suit" shall mean a proceeding against the Director ----------- brought by or on behalf of a participant(s) or beneficiary of any employee welfare or pension benefit plan by reason of his being or having been a Trustee or fiduciary of such plan, or by reason of his actions with respect to the plan which he has taken in his capacity as a Director. 2 ARTICLE II ---------- INDEMNIFICATION --------------- 2.1 Personal Liability. The Director shall not be personally liable to ------------------ the Corporation or its stockholders for damages for breach of any duty owed to the Corporation or its stockholders unless such breach of duty is based upon an act or omission (a) in Breach Of The Director's Duty Of Loyalty to the Corporation or its stockholders; (b) not in good faith or involving a knowing violation of law; or (c) resulting in receipt by the Director of an improper personal benefit. 2.2 Expenses. Unless otherwise expressly prohibited by law, the Corporation -------- shall indemnify the Director against his Expenses and all Liabilities in connection with any Proceeding involving the Director, including a proceeding by or in the right of the Corporation, unless such breach of duty is based upon an act or omission (a) in Breach Of The Director's Duty Of Loyalty to the Corporation or its stockholders; (b) not in good faith or involving a knowing violation of law; or (c) resulting in receipt by the Director of an improper personal benefit. 2.3 Advancement of Expenses. The Corporation shall advance or pay those ------------------------- Expenses incurred by the Director in a Proceeding as and when incurred, provided, however, that the Director shall, as a condition to receipt of such ------- advances, undertake to repay all amounts advanced if it shall finally be adjudicated that the breach of duty by the Director was based on an act or omission (a) in Breach Of The Director's Duty Of Loyalty to the Corporation or its stockholders; (b) not in good faith or involving a knowing violation of the law; or (c) resulting in receipt of an improper personal benefit. 3 ARTICLE III ----------- INDEMNIFICATION FOR ERISA SUITS ------------------------------- 3.1 Indemnification. The Corporation shall, to the extent --------------- indemnification is not available to the Director under Article II of this Agreement, indemnify the Director against any and all Liabilities and Expenses which he may incur in connection with any ERISA Suit, if: (a) he acted in good faith, and (b) in a manner which did not constitute a breach of fiduciary obligations as defined by the Employee Retirement Income Security Act, 29 U.S.C. 1101-1114. 3.2 No Presumption. The termination of any proceeding in connection --------------- with any ERISA Suit by judgment, order or settlement should not of itself create a presumption that the Director did not meet the applicable standards of conduct set forth in subparagraphs (a) and (b) above. 3.3 Determination. Any determination concerning whether the Director met ------------- the standards of conduct set forth in subparagraphs 3.1(a) and (b) above shall be made: (a) by the Board of Directors of the Corporation or a committee thereof acting by a majority vote of a quorum consisting of directors who were not parties to or otherwise involved in the proceeding; or (b) by the Shareholders, if provided by the Certificate of Incorporation, the by-laws of the Corporation, or a resolution of either the Board of Directors or the Shareholders of the Corporation; or (c) by independent legal counsel in a written opinion, if a quorum of the Board of Directors cannot be obtained, or if a quorum of the Board of Directors or a committee thereof by a majority vote of the disinterested 4 directors so directs. Such counsel shall be designated by the Board of Directors. ARTICLE IV ---------- MISCELLANEOUS ------------- 4.1 Agreement Effective Despite Service Prior to Effective Date and ------------------------------------------------------------------- After Termination of Director. This Agreement shall be effective without regard -------------------------- to the service of the Director as a Director of the Corporation prior to the date hereof and this Agreement shall remain effective notwithstanding the removal, resignation, death or other termination of the Director from any position with the Corporation. 4.2 Binding Effect Upon Successors of Corporation. This Agreement shall ------------------------------------------------- bind the Corporation, its successors and assigns. 4.3 Insurance. The Corporation, at its sole discretion, may purchase and --------- maintain insurance on behalf of the Director. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. ATTEST: NEW BRUNSWICK SCIENTIFIC CO., INC. ______________________ By:__________________________________ Samuel Eichenbaum David Freedman Assistant Secretary Chairman __________________________________ Jerome Birnbaum 5 INDEMNIFICATION AGREEMENT -------------------------- AGREEMENT dated as of February 22, 2000, between NEW BRUNSWICK SCIENTIFIC CO., INC., a New Jersey corporation (the "Corporation") and LEE EPPSTEIN (the "Officer"). WHEREAS, the Officer is an officer of the Corporation holding the position of Vice President - Technology; and WHEREAS, proceedings based upon the Officer's performance of his duties as a officer of the Corporation or on the governing board of another business entity or both may be brought from time to time against or involving him; and WHEREAS, the Corporation recognizes that the threat of such proceedings might inhibit the Officer in his performance of his duties, cause the Officer to cease serving as an officer of the Corporation and/or make him unwilling to serve on the governing board of another business entity as requested by the Corporation; and WHEREAS, to reduce any such inhibition, the Corporation wishes to indemnify the Officer against liabilities he may incur as a result of certain proceedings, as well as expenses he may incur in his defense in such proceedings; and WHEREAS, in certain proceedings involving claims relating to the Employee Retirement Income Security Act of 1974, as amended, Federal law may apply to limit the permissible scope of indemnification; and NOW, THEREFORE, the parties hereto, for valuable consideration, incident to the Officer's service to, and to induce the continued service of the Officer to the Corporation and on the governing boards of such other business entities as the Corporation may direct, agree as follows: 6 ARTICLE I ---------- DEFINITIONS ----------- 1.1 Proceeding. "Proceeding" shall mean any pending, threatened or ---------- completed civil, criminal, administrative or arbitrative action, suit or proceeding, any appeal from any such action, suit or proceeding, and any inquiry or investigation which could lead to any such action, suit or proceeding. 1.2 Expenses. "Expenses" shall mean reasonable costs, disbursements and -------- counsel fees. 1.3 Liabilities. "Liabilities" shall mean amounts paid or incurred in ----------- satisfaction or settlements, judgments, fines and penalties. 1.4 Derivative Suit. "Derivative Suit" shall mean a Proceeding against the ---------------- Officer brought by or in the right of the Corporation and/or an Affiliate (hereinafter defined), which involves the Officer by reason of his being or having been a director, officer or agent of the Corporation, an Affiliate or a subsidiary thereof. 1.5 Breach Of The Officer's Duty of Loyalty. "Breach Of The Officer's Duty ---------------------------------------- Of Loyalty" shall mean an act or omission which that person knows or believes to be contrary to the best interests of the Corporation and/or an Affiliate or its Shareholders in connection with a matter in which he has a material conflict of interest. 1.6 ERISA Suit. "ERISA Suit" shall mean a proceeding against the Officer ----------- brought by or on behalf of a participant(s) or beneficiary of any employee welfare or pension benefit plan by reason of his being or having been a Trustee or fiduciary of such plan, or by reason of his actions with respect to the plan which he has taken in his capacity as a Officer. 7 1.7 Affiliate. "Affiliate" shall mean a business or corporate entity --------- in which the Corporation owns or holds debt or equity securities or otherwise has an economic interest and on whose governing board the Corporation has requested that the Officer serve. ARTICLE II ---------- INDEMNIFICATION --------------- 2.1 Personal Liability. The Officer shall not be personally liable to ------------------- the Corporation, an Affiliate or its stockholders for damages for breach of any duty owed to the Corporation, an Affiliate or its stockholders unless such breach of duty is based upon an act or omission (a) in Breach Of The Officer's Duty Of Loyalty to the Corporation, an Affiliate or its stockholders; (b) not in good faith or involving a knowing violation of law; or (c) resulting in receipt by the Officer of an improper personal benefit. 2.2 Expenses. Unless otherwise expressly prohibited by law, the Corporation -------- shall (to the extent (i) not indemnified by an Affiliate or (ii) such indemnification is not funded or (iii) not covered by directors and officers liability insurance obtained by an Affiliate) indemnify the Officer against his Expenses and all Liabilities in connection with any Proceeding involving the Officer, including a proceeding by or in the right of the Corporation and/or an Affiliate, unless such breach of duty is based upon an act or omission (a) in Breach Of The Officer's Duty Of Loyalty to the Corporation, an Affiliate or its stockholders; (b) not in good faith or involving a knowing violation of law; or (c) resulting in receipt by the Officer of an improper personal benefit. 2.3 Advancement of Expenses. The Corporation shall (to the extent (i) ------------------------ an Affiliate does not advance or (ii) funds are not advanced under directors and 8 officers liability insurance obtained by an Affiliate) advance or pay those Expenses incurred by the Officer in a Proceeding as and when incurred, provided, however, that the Officer shall, as a condition to receipt of such advances, undertake to repay all amounts advanced if it shall finally be adjudicated that the breach of duty by the Officer was based on an act or omission (a) in Breach Of The Officer's Duty Of Loyalty to the Corporation, an Affiliate or its stockholders; (b) not in good faith or involving a knowing violation of the law; or (c) resulting in receipt of an improper personal benefit. ARTICLE III ------------ INDEMNIFICATION FOR ERISA SUITS ---------------------------------- 3.1 Indemnification. The Corporation shall, to the extent --------------- indemnification is not available to the Officer under Article II of this Agreement (including indemnification by an Affiliate), and to the extent coverage is not available under fiduciary liability insurance obtained by the Corporation or an Affiliate, indemnify the Officer against any and all Liabilities and Expenses which he may incur in connection with any ERISA Suit, if: (a) he acted in good faith, and (b) in a manner which did not constitute a breach of fiduciary obligations as defined by the Employee Retirement Income Security Act, 29 U.S.C. 1101-1114. 3.2 No Presumption. The termination of any proceeding in connection --------------- with any ERISA Suit by judgment, order or settlement should not of itself create a presumption that the Officer did not meet the applicable standards of conduct set forth in subparagraphs (a) and (b) above. 3.3 Determination. Any determination concerning whether the Officer met the ------------- standards of conduct set forth in subparagraphs 3.1(a) and (b) above shall be made: 9 (a) by the Board of Directors of the Corporation or a committee thereof acting by a majority vote of a quorum consisting of directors who were not parties to or otherwise involved in the proceeding; or (b) by the Shareholders, if provided by the Certificate of Incorporation, the by-laws of the Corporation, or a resolution of either the Board of Directors or the Shareholders of the Corporation; or (c) by independent legal counsel in a written opinion, if a quorum of the Board of Officers cannot be obtained, or if a quorum of the Board of Directors or a committee thereof by a majority vote of the disinterested directors so directs. Such counsel shall be designated by the Board of Directors. ARTICLE IV ---------- ASSERTION OF CLAIMS --------------------- 4.1 Claims. An Officer serving at the request of the Corporation on ------ the board of directors of an Affiliate shall make reasonable and timely efforts to obtain indemnification from the Affiliate and to invoke the coverage of any applicable insurance obtained by the Affiliate. 4.2 Subrogation. To the extent indemnification from an Affiliate or ----------- insurance coverage was available for the Officer serving at the request of the Corporation on the board of directors of an Affiliate and the Corporation expended funds on behalf of the Officer, the Corporation shall be subrogated to the rights of the Officers to such indemnification and/or insurance. The Officer shall cooperate as reasonably required by the Corporation in connection with the Corporation's rights under this section. 10 ARTICLE V ---------- MISCELLANEOUS ------------- 5.1 Agreement Effective Despite Service Prior to Effective Date and ------------------------------------------------------------------- After Termination of Officer. This Agreement shall be effective without regard -------------------------- to the service of the Officer as an Officer of the Corporation and/or an Affiliate prior to the date hereof and this Agreement shall remain effective notwithstanding the removal, resignation, death or other termination of the Officer from any position with the Corporation. 5.2 Binding Effect Upon Successors of Corporation. This Agreement -------------------------------------------------- shall bind the Corporation, its successors and assigns. 5.3 Insurance. The Corporation, at its sole discretion, may purchase and --------- maintain insurance on behalf of the Officer. 5.4 Scope. The scope of this Agreement and the indemnification ----- provided hereunder shall not exceed that provided to the Officer under any other agreements. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. ATTEST: NEW BRUNSWICK SCIENTIFIC CO., INC. ______________________ By:______________________________ Samuel Eichenbaum David Freedman Assistant Secretary Chairman By:______________________________ Lee Eppstein Vice President - Technology 11 INDEMNIFICATION AGREEMENT -------------------------- AGREEMENT dated as of January 1, 1990, between NEW BRUNSWICK SCIENTIFIC CO., INC., a New Jersey corporation (the "Corporation") and CAROL FREEDMAN (the "Officer"). WHEREAS, the Officer is an officer of the Corporation holding the position of Assistant Treasurer; and WHEREAS, proceedings based upon the Officer's performance of his duties as a officer of the Corporation or on the governing board of another business entity or both may be brought from time to time against or involving him; and WHEREAS, the Corporation recognizes that the threat of such proceedings might inhibit the Officer in his performance of his duties, cause the Officer to cease serving as an officer of the Corporation and/or make him unwilling to serve on the governing board of another business entity as requested by the Corporation; and WHEREAS, to reduce any such inhibition, the Corporation wishes to indemnify the Officer against liabilities he may incur as a result of certain proceedings, as well as expenses he may incur in his defense in such proceedings; and WHEREAS, in certain proceedings involving claims relating to the Employee Retirement Income Security Act of 1974, as amended, Federal law may apply to limit the permissible scope of indemnification; and NOW, THEREFORE, the parties hereto, for valuable consideration, incident to the Officer's service to, and to induce the continued service of the Officer to the Corporation and on the governing boards of such other business entities as the Corporation may direct, agree as follows: 12 ARTICLE I ---------- DEFINITIONS ----------- 1.1 Proceeding. "Proceeding" shall mean any pending, threatened or ---------- completed civil, criminal, administrative or arbitrative action, suit or proceeding, any appeal from any such action, suit or proceeding, and any inquiry or investigation which could lead to any such action, suit or proceeding. 1.2 Expenses. "Expenses" shall mean reasonable costs, disbursements and -------- counsel fees. 1.3 Liabilities. "Liabilities" shall mean amounts paid or incurred in ----------- satisfaction or settlements, judgments, fines and penalties. 1.4 Derivative Suit. "Derivative Suit" shall mean a Proceeding against the ---------------- Officer brought by or in the right of the Corporation and/or an Affiliate (hereinafter defined), which involves the Officer by reason of his being or having been a director, officer or agent of the Corporation, an Affiliate or a subsidiary thereof. 1.5 Breach Of The Officer's Duty of Loyalty. "Breach Of The Officer's Duty ---------------------------------------- Of Loyalty" shall mean an act or omission which that person knows or believes to be contrary to the best interests of the Corporation and/or an Affiliate or its Shareholders in connection with a matter in which he has a material conflict of interest. 1.6 ERISA Suit. "ERISA Suit" shall mean a proceeding against the Officer ----------- brought by or on behalf of a participant(s) or beneficiary of any employee welfare or pension benefit plan by reason of his being or having been a Trustee or fiduciary of such plan, or by reason of his actions with respect to the plan which he has taken in his capacity as a Officer. 13 1.7 Affiliate. "Affiliate" shall mean a business or corporate entity --------- in which the Corporation owns or holds debt or equity securities or otherwise has an economic interest and on whose governing board the Corporation has requested that the Officer serve. ARTICLE II ---------- INDEMNIFICATION --------------- 2.1 Personal Liability. The Officer shall not be personally liable to ------------------- the Corporation, an Affiliate or its stockholders for damages for breach of any duty owed to the Corporation, an Affiliate or its stockholders unless such breach of duty is based upon an act or omission (a) in Breach Of The Officer's Duty Of Loyalty to the Corporation, an Affiliate or its stockholders; (b) not in good faith or involving a knowing violation of law; or (c) resulting in receipt by the Officer of an improper personal benefit. 2.2 Expenses. Unless otherwise expressly prohibited by law, the Corporation -------- shall (to the extent (i) not indemnified by an Affiliate or (ii) such indemnification is not funded or (iii) not covered by directors and officers liability insurance obtained by an Affiliate) indemnify the Officer against his Expenses and all Liabilities in connection with any Proceeding involving the Officer, including a proceeding by or in the right of the Corporation and/or an Affiliate, unless such breach of duty is based upon an act or omission (a) in Breach Of The Officer's Duty Of Loyalty to the Corporation, an Affiliate or its stockholders; (b) not in good faith or involving a knowing violation of law; or (c) resulting in receipt by the Officer of an improper personal benefit. 2.3 Advancement of Expenses. The Corporation shall (to the extent (i) ------------------------ an Affiliate does not advance or (ii) funds are not advanced under directors and 14 officers liability insurance obtained by an Affiliate) advance or pay those Expenses incurred by the Officer in a Proceeding as and when incurred, provided, -------- however, that the Officer shall, as a condition to receipt of such advances, - ------- undertake to repay all amounts advanced if it shall finally be adjudicated that - --- the breach of duty by the Officer was based on an act or omission (a) in Breach Of The Officer's Duty Of Loyalty to the Corporation, an Affiliate or its stockholders; (b) not in good faith or involving a knowing violation of the law; or (c) resulting in receipt of an improper personal benefit. ARTICLE III ------------ INDEMNIFICATION FOR ERISA SUITS ---------------------------------- 3.1 Indemnification. The Corporation shall, to the extent --------------- indemnification is not available to the Officer under Article II of this Agreement (including indemnification by an Affiliate), and to the extent coverage is not available under fiduciary liability insurance obtained by the Corporation or an Affiliate, indemnify the Officer against any and all Liabilities and Expenses which he may incur in connection with any ERISA Suit, if: (a) he acted in good faith, and (b) in a manner which did not constitute a breach of fiduciary obligations as defined by the Employee Retirement Income Security Act, 29 U.S.C. 1101-1114. 3.2 No Presumption. The termination of any proceeding in connection --------------- with any ERISA Suit by judgment, order or settlement should not of itself create a presumption that the Officer did not meet the applicable standards of conduct set forth in subparagraphs (a) and (b) above. 3.3 Determination. Any determination concerning whether the Officer met the ------------- standards of conduct set forth in subparagraphs 3.1(a) and (b) above shall be made: 15 (a) by the Board of Directors of the Corporation or a committee thereof acting by a majority vote of a quorum consisting of directors who were not parties to or otherwise involved in the proceeding; or (b) by the Shareholders, if provided by the Certificate of Incorporation, the by-laws of the Corporation, or a resolution of either the Board of Directors or the Shareholders of the Corporation; or (c) by independent legal counsel in a written opinion, if a quorum of the Board of Officers cannot be obtained, or if a quorum of the Board of Directors or a committee thereof by a majority vote of the disinterested directors so directs. Such counsel shall be designated by the Board of Directors. ARTICLE IV ---------- ASSERTION OF CLAIMS --------------------- 4.1 Claims. An Officer serving at the request of the Corporation on ------ the board of directors of an Affiliate shall make reasonable and timely efforts to obtain indemnification from the Affiliate and to invoke the coverage of any applicable insurance obtained by the Affiliate. 4.2 Subrogation. To the extent indemnification from an Affiliate or ----------- insurance coverage was available for the Officer serving at the request of the Corporation on the board of directors of an Affiliate and the Corporation expended funds on behalf of the Officer, the Corporation shall be subrogated to the rights of the Officers to such indemnification and/or insurance. The Officer shall cooperate as reasonably required by the Corporation in connection with the Corporation's rights under this section. 16 ARTICLE V ---------- MISCELLANEOUS ------------- 5.1 Agreement Effective Despite Service Prior to Effective Date and ------------------------------------------------------------------- After Termination of Officer. This Agreement shall be effective without regard -------------------------- to the service of the Officer as an Officer of the Corporation and/or an Affiliate prior to the date hereof and this Agreement shall remain effective notwithstanding the removal, resignation, death or other termination of the Officer from any position with the Corporation. 5.2 Binding Effect Upon Successors of Corporation. This Agreement -------------------------------------------------- shall bind the Corporation, its successors and assigns. 5.3 Insurance. The Corporation, at its sole discretion, may purchase and --------- maintain insurance on behalf of the Officer. 5.4 Scope. The scope of this Agreement and the indemnification ----- provided hereunder shall not exceed that provided to the Officer under any other agreements. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. ATTEST: NEW BRUNSWICK SCIENTIFIC CO., INC. ______________________ By:______________________________ Samuel Eichenbaum David Freedman Assistant Secretary Chairman By:______________________________ Carol Freedman Assistant Treasurer 17 EX-10.25 4 0004.txt FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT This First Amendment to Loan and Security Agreement made as of the 22nd day of November, 1999 (this "Amendment") by and between NEW BRUNSWICK SCIENTIFIC CO., INC. (the "Borrower"), a corporation organized under the laws of the State of New Jersey, having an address at 44 Talmadge Road, Edison, New Jersey 08818-4005 and FIRST UNION NATIONAL BANK (the "Bank"), a national banking association formed under the laws of the United States of America, having an office at 370 Scotch Road, West Trenton, New Jersey 08628. W I T N E S S E T H: ------------------- WHEREAS, the Bank and the Borrower previously entered into commercial lending arrangements in accordance with the terms and conditions of a certain Loan and Security Agreement dated April 1, 1999 (the "Agreement"); and WHEREAS, in connection with the Borrower receiving a certain Incremental Term Loan (as defined in the Agreement), and subject to the terms and conditions hereinafter set forth, the parties hereto have agreed to amend the terms of the Agreement. NOW, THEREFORE, for and in consideration of mutual covenants and agreements herein contained, and other good and valuable consideration, receipt of which is hereby acknowledged, it is agreed as follows: 1. The following definitions are hereby added to Subsection 1.1 of the Agreement to read as follows: "First Amendment": That certain First Amendment to Loan and Security Agreement ---------------- dated November 22, 1999 by and between the Borrower and the Bank. "Borrower's Guaranty": That certain Guaranty dated November 22, 1999 from the -------------------- 1 Borrower in favor of the Bank with respect to the obligations of New Brunswick Scientific of Delaware, Inc. "Second Mortgage": The Mortgage executed by the Borrower, substantially in the ---------------- form of Exhibit A to the First Amendment, as may be amended, restated, substituted for and/or extended from time to time. 2. The following definitions contained in Subsection 1.1 of the Agreement is hereby amended to read as follows: "Loan Documents": This Agreement, the Master Note, the Incremental Term Notes, --------------- the Equipment Line of Credit Note, the Equipment Term Notes, the Power of Attorney, the Mortgage, the Second Mortgage, the Assignment of Rents, each Landlord's/Warehousemen's Agreement, the UCC-1 Financing Statements, the Borrower's Guaranty, and any other document, instrument or writing executed and delivered pursuant hereto or thereto (excluding Swap Agreements), and all as amended, restated, substituted for and/or extended from time to time. "Permitted Liens": (i) Liens with respect to equipment which is the subject of ---------------- capitalized leases or purchase money financing to the extent permitted by the terms of Subsection 9.23(a)(ii), (ii) those Liens described in Schedule 1.1 ------------ annexed hereto, (iii) Liens with respect to assets which are the subject of an acquisition permitted by the terms hereof and securing indebtedness permit under Subsection 9.23(a)(iii) hereof and (iv) any Liens in favor of the Bank. "Premises": The real estate located at 44 Talmadge Road, Edison, New Jersey, as -------- more particularly described on Schedule A to the Mortgage and the Second Mortgage, which description is incorporated herein by reference. 3. Subsection 8.9 of the Agreement is hereby amended to read as follows: 8.9 Title to Properties, Priority of Liens. The Borrower has good and - ------------------------------------------------ marketable title in all of its properties and assets which it purports to own, - -------- free of all Liens except for Permitted Liens, and the Borrower has granted, subject to the provisions of Subsection 6.1 hereof, to the Bank a valid perfected first lien in the Collateral (exclusive of the Premises). With respect to the Premises, the Borrower has granted, pursuant to the Mortgage and the Second Mortgage, first and second mortgage liens, respectively. Since the Mortgage and the Second Mortgage are Permitted Liens, language in the Mortgage or the Second Mortgage stating that the Borrower is to "promptly discharge all liens, claims and encumbrances on the Premises" is not intended to apply to the Mortgage and the Second Mortgage. 2 4. The last sentence of Subsection 9.6 of the Agreement is hereby amended to read as follows: Notwithstanding the foregoing, the Borrower shall, subject to the terms, conditions and limitations of the Mortgage and Second Mortgage, have the right to utilize certain insurance proceeds to repair or replace damaged or destroyed improvements at the Premises. 5. The first sentence of Subsection 9.23(o) of the Agreement is hereby amended to read as follows: Borrower shall, at all times, maintain a ratio of Total Net Assets of Borrower divided by Total Assets of Borrower and Subsidiaries of not less than .60 to 1.00. 6. Borrower shall pay on demand all reasonable expenses and expenditures of the Bank, including, without limitation, reasonable attorneys' fees and expenses incurred or paid by the Bank in connection with this Amendment and all other documents delivered in connection herewith. 7. This Amendment has been duly executed and delivered by the parties hereto, and the Agreement, as amended hereby, and all other documents executed in connection with the Agreement and this Amendment, as amended, constitute legal, valid and binding obligations of the parties thereto in accordance with their terms. 8. The parties hereto confirm and agree that, except as modified or changed by virtue of this Amendment and the other documents delivered in connection herewith, the Agreement and the other documents executed in connection with the Agreement and this Amendment are and shall remain in full force and effect, and that the parties hereto each are and shall be entitled to all rights and interests and subject to all liabilities created thereunder and hereunder. 9. All capitalized terms contained in this Amendment shall have the same meanings ascribed to them in the Agreement. 3 10. This Amendment may be executed in one or more counterparts, each of which shall constitute one and the same Amendment. IN WITNESS WHEREOF, the parties hereunto set their hands and cause these presents to be signed by the authorized officers on the date and year first above mentioned. NEW BRUNSWICK SCIENTIFIC CO., INC. BY:____________________________________ EZRA WEISMAN, President FIRST UNION NATIONAL BANK BY:_____________________________________ 4 SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT This Second Amendment to Loan and Security Agreement made as of the 3rd day of August, 2000 (this "Amendment") by and between NEW BRUNSWICK SCIENTIFIC CO., INC. (the "Borrower"), a corporation organized under the laws of the State of New Jersey, having an address at 44 Talmadge Road, Edison, New Jersey 08818-4005 and FIRST UNION NATIONAL BANK (the "Bank"), a national banking association formed under the laws of the United States of America, having an office at 370 Scotch Road, West Trenton, New Jersey 08628. W I T N E S S E T H: ------------------- WHEREAS, the Bank and the Borrower previously entered into commercial lending arrangements in accordance with the terms and conditions of a certain Loan and Security Agreement dated April 1, 1999, as amended by that certain First Amendment to Loan and Security Agreement dated as of November 22, 1999 between the same parties (the "Agreement"); WHEREAS, the Borrower is not in compliance with certain financial covenants and anticipates not being in compliance with certain other financial covenants contained in the Agreement as a result of unanticipated operating losses and a certain non-cash write-down involving a certain investment of the Borrower; and WHEREAS, the Borrower has requested the Bank, and the Bank has agreed, to waive said noncompliance and to amend certain of said covenants, subject to the terms and conditions hereinafter set forth. NOW, THEREFORE, for and in consideration of mutual covenants and agreements herein contained, and other good and valuable consideration, receipt of which is hereby acknowledged, it is agreed as follows: 5 1. The following definitions are hereby added to Subsection 1.1 of the Agreement to read as follows: "Second Amendment": That certain Second Amendment to Loan and Security ----------------- Agreement dated as June 30, 2000 by and between the Borrower and the Bank. ------- 2. Subsection 9.23(l) of the Agreement is hereby amended to read as follows: (l) Debt Service Coverage Ratio of Borrower and Subsidiaries. Borrower and --------------------------------------------------------- its Subsidiaries, on a consolidated basis, shall, at all times, maintain a Debt Service Coverage Ratio of not less than 1.30 to 1.00; provided that the Bank shall not measure such Debt Service Coverage Ratio as of September 30, 2000. For the purposes of this Subsection 9.23(l), "Debt Service Coverage Ratio" shall be computed on a rolling four quarter basis (excluding, however, the losses for DGI for the fiscal year ending 1998) and shall mean the sum of net income (adjusted for any noncash losses, to the extent of the Borrower's investment in DGI, resulting from equity offerings of the Borrower's ownership interest in DGI, whereby said interest is reduced from 80% to between 50% and 20%) plus interest expense plus income tax expense minus income tax benefit plus depreciation and amortization plus rental or lease (capital and operating) payments payable or guaranteed by the Borrower, minus dividends paid for the previous four consecutive quarters, plus the non-cash write-down related to the Borrower's investment in Organica, Inc. in an amount up to $967,000 divided by interest expense for the previous four consecutive quarters plus the current maturities of long term debt plus current maturities of capital leases, plus rental or lease (capital or operating) payments payable or guaranteed by the Borrower for the previous four consecutive quarter, as reflected on the Borrower's current financial statements. This ratio shall be tested quarterly. 3. Subsection 9.23(m) of the Agreement is hereby amended to read as follows: (m) Net Worth of Borrower and Subsidiaries. Borrower and its Subsidiaries, ---------------------------------------- on a consolidated basis, shall at all times maintain a Net Worth of at least (i) $28,500,000 for the period commencing on the date hereof and ending December 31, 2000 and (ii) for each fiscal year thereafter, the minimum Net Worth of the Borrower and its Subsidiaries, on a consolidated basis, shall increase by not less than 85% of net income for the immediately preceding fiscal year just ended (with no reduction for losses), provided that with respect to the quarterly period ending September 30, 2000 the Net Worth of the Borrower and its Subsidiaries, on a consolidated basis, shall be no less than $27,750,000. For 6 the purposes of this Subsection 9.23(m), "Net Worth" shall mean total assets, plus negative or minus positive "currency translation adjustment" as reflected on the Borrower's balance sheet as of the end of the fiscal quarter being tested minus Total Liabilities (as defined in Subsection 9.23(n) hereof). For the purposes of this calculation, loans (except as permitted by Subsection 9.23(h)(i) and advances, investments and contributions to persons other than the Borrower, shall be subtracted from total assets. This ratio shall be tested quarterly. 4. Notwithstanding anything contained in the Agreement, based upon the Borrower's letter dated June 30, 2000 to the Bank and accompanying work sheet dated June 12, 2000, the Bank hereby agrees to waive the Borrower's failure to comply with the provisions of Subsections 9.23(l) and (m) of the Agreement as of June 30, 2000. This waiver is specifically limited to such covenants as of such date. 5. Borrower shall pay on demand all reasonable expenses and expenditures of the Bank, including, without limitation, reasonable attorneys' fees and expenses incurred or paid by the Bank in connection with this Amendment and all other documents delivered in connection herewith. 6. This Amendment has been duly executed and delivered by the parties hereto, and the Agreement, as amended hereby, and all other documents executed in connection with the Agreement and this Amendment, as amended, constitute legal, valid and binding obligations of the parties thereto in accordance with their terms. 7. The parties hereto confirm and agree that, except as modified or changed by virtue of this Amendment and the other documents delivered in connection herewith, the Agreement and the other documents executed in connection with the Agreement and this Amendment are and shall remain in full force and effect, and that the parties hereto each are and shall be entitled to all rights and interests and subject to all liabilities created thereunder and hereunder. 7 8. All capitalized terms contained in this Amendment shall have the same meanings ascribed to them in the Agreement. 9. This Amendment may be executed in one or more counterparts, each of which shall constitute one and the same Amendment. IN WITNESS WHEREOF, the parties hereunto set their hands and cause these presents to be signed by the authorized officers on the date and year first above mentioned. NEW BRUNSWICK SCIENTIFIC CO., INC. BY:__________________________________ FIRST UNION NATIONAL BANK BY:__________________________________ 8 EX-27 5 0005.txt
5 1000 6-MOS DEC-31-2000 JAN-01-2000 JUN-30-2000 2313 0 10539 0 17764 31825 6511 0 44701 9432 0 380 0 0 26394 44701 22196 22196 12826 24507 (808) 0 302 (3421) (93) (3328) 0 0 0 (3328) (.56) (.56)
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