1
EXHIBIT 10.23
(FORM OF FACE OF DEBENTURE)
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED WITHIN THE "UNITED STATES" OR TO "U.S. PERSONS"
(AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT) IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. THE HOLDER OF THIS SECURITY,
BY ITS ACCEPTANCE HEREOF, REPRESENTS, ACKNOWLEDGES AND AGREES FOR THE BENEFIT OF
THE COMPANY THAT: (I) IT HAS ACQUIRED A "RESTRICTED" SECURITY WHICH HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT; (II) IT WILL NOT OFFER, SELL OR OTHERWISE
TRANSFER THIS SECURITY, PRIOR TO THE DATE WHICH IS ONE YEAR AFTER THE DATE OF
ORIGINAL ISSUANCE HEREOF EXCEPT (A) TO BIO-PLEXUS, INC., (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) OUTSIDE THE UNITED STATES IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 904 UNDER THE SECURITIES ACT, OR (D) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AS CONFIRMED
IN AN OPINION OF COUNSEL ACCEPTABLE IN FORM AND SUBSTANCE TO THE ISSUER OF THIS
SECURITY AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF
ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION; AND (III)
IT WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT
OF THIS SECURITY OF THE RESALE RESTRICTIONS SET FORTH IN (II) ABOVE. ANY OFFER,
SALE OR OTHER DISPOSITION PURSUANT TO THE FOREGOING CLAUSE (II)(D) IS SUBJECT TO
THE RIGHT OF THE ISSUER OF THIS SECURITY TO REQUIRE THE DELIVERY OF AN OPINION
OF COUNSEL, CERTIFICATIONS OR OTHER INFORMATION ACCEPTABLE TO THEM IN FORM AND
SUBSTANCE.
2
BIO-PLEXUS, INC.
(Incorporated in the State of Connecticut)
6% CONVERTIBLE DEBENTURES DUE 2004
No. R-_______________ U.S. $____________
Bio-Plexus, Inc., a corporation duly incorporated and existing under
the laws of the State of Connecticut (the "Company"), for value received, hereby
promises to pay to
, or
registered assigns, the principal sum of United States Dollars on April 21, 2004
(the "Maturity Date"), subject to earlier redemption by the Company. The
Debentures will be convertible on or after the date of issuance. The Debentures
will accrue interest at a rate of 6% per annum, due and payable quarterly in
arrears, on the last day of March, June, September and December of each year,
commencing June 30, 1999, as described further under the Terms and Conditions of
the Debentures. Interest hereon shall be calculated on the basis of a 365 day
year.
Reference is hereby made to the further provisions of this Debenture
set forth under the Terms and Conditions of the Debentures on the reverse
hereof, which further provisions shall for all purposes have the same effect as
if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Debenture to be duly
executed in its corporate name by the manual or facsimile signature of a duly
authorized signatory, as attested to by another duly authorized signatory of the
Company.
Dated: April 21, 1999
BIO-PLEXUS, INC.
By:________________________________
Name:
Title:
ATTEST:
By:________________________________
Name:
Title:
2
3
[Form of Reverse]
Terms and Conditions of the Debentures
1. General.
(a) This Debenture is one of a duly authorized issue of Debentures
of the Company designated as its 6% Convertible Debenture due 2004 (herein
called the "DEBENTURES").
(b) The Debentures are issuable, without coupons, in denominations
of U.S. $1,000 and integral multiples thereof. The Securities, and transfers
thereof, shall be in registered form as provided in Paragraph 2 hereof. The
registered holder of a Debenture shall (to the fullest extent permitted by
applicable law) be treated at all times, by all persons and for all purposes as
the absolute owner of such Security, regardless of any notice of ownership,
theft or loss or of any writing thereon.
2. Interest. (a) Each Debenture shall be entitled to receive,
cumulative annual interest at the rate of 6.0% per annum on the principal amount
thereof. Such interest shall be due and payable quarterly in arrears on the last
day of March, June, September and December of each year (each, an "INTEREST
PAYMENT DATE"), commencing on June 30, 1999. Interest shall accumulate daily
from the Issuance Date (as defined herein), whether or not earned or declared,
until such Debenture has been converted or redeemed as herein provided. To the
extent interest is not paid on the applicable Interest Payment Date, such
interest shall be cumulative and shall compound quarterly until the date of
payment of such interest. The interest so payable will be paid to the person in
whose name the Debentures (or one or more predecessor shares) are registered on
the records of the Company regarding registration and transfers of the
Debentures (the "DEBENTURE"); provided, however, that the Company's obligation
to a transferee of a Debenture arises only if such transfer, sale or other
disposition is made in accordance with the terms and conditions hereof and the
Subscription Agreement, dated as of the Issuance Date, by and between the
Company and the Subscribers set forth on the signature pages thereof (the
"SUBSCRIPTION AGREEMENT").
(b) The interest is payable in such coin or currency of the United
States of America as at the time of payment is legal tender, to the persons in
whose names the applicable Debenture is duly registered on the Debenture
Register (each, a "HOLDER," collectively, the "HOLDERS") on the tenth day prior
to the applicable Interest Payment Date and at the address last appearing on the
Debenture Register as designated in writing by such Holder thereof from time to
time; provided, however, that, in lieu of paying such interest in coin or
currency, the Company may, at its option, in full or in part, pay interest on
the Debentures on any Interest Payment Date by increasing the Debentures by the
amount of such interest such that the sum of (i) the amount of such increase in
the principal amount and (ii) the amount of cash interest paid in part, if any,
is equal to the amount of the cash interest which would otherwise be paid on
such Interest Payment Date if such interest were paid entirely in cash. Any such
increase in the principal amount (plus
3
4
the amount of cash interest, if any, paid together therewith) shall constitute
full payment of such interest. When any interest is added to the principal
amount, such interest shall, for all purposes of the Debenture, be deemed to be
part of the principal amount for purposes of determining interest thereafter
payable hereunder and amounts thereafter convertible into Common Stock
hereunder, and all references herein to the principal amount shall mean the
principal amount, as adjusted pursuant to these provisions.
(c) If the Company shall elect to pay any part of an interest
payment by increasing the principal amount as described in Paragraph 2(b), the
Company will provide notice setting forth the new principal amount to each
Holder (an "INTEREST NOTICE") on or prior to the applicable Interest Payment
Date.
(d) If the interest due hereunder is not paid or the Interest Notice
is not delivered to each Holder within ten (10) calendar days after the
applicable Interest Payment Date, the Company shall no longer have the right to
choose the method by which interest is to be paid, and each Holder may elect
either a cash interest payment or interest payable by increasing the principal
amount.
(e) Except as specifically provided herein, an election by the
Company to pay interest, in full or in part, in cash on any Interest Payment
Date shall not preclude the Company from electing any other available
alternative in respect of all or any portion of any subsequent interest payment.
(f) So long as any Debentures are outstanding, no dividends,
including, without limitation, dividends or distributions paid in shares of, or
options, warrants or rights to subscribe for, or purchase shares of, equity
securities of the Company (whether with respect to dividends or upon
liquidation, dissolution, winding up or otherwise), including Common Stock or
any debt securities on a parity with the Debentures (whether with respect to
dividends or upon liquidation, dissolution or winding up) (collectively, the
"PARITY SECURITIES"), shall be declared or paid or set apart for payment or
other distribution upon the equity securities or the Parity Securities, nor
shall any equity securities or Parity Securities be redeemed, purchased or
otherwise acquired for any consideration (or any monies to be paid to, or made
available for, a sinking fund for the redemption of any shares of any such
stock) by the Company, directly or indirectly (except by conversion to, or
exchange for, equity securities or Parity Securities, respectively), unless, in
each case, (i) the full cumulative interest on all outstanding Debentures have
been paid or (ii) otherwise consented to by the Holders of not less than
two-thirds (2/3) of the then outstanding aggregate principal amount of
Debentures; provided, however, the restrictions set forth in this Paragraph 1(f)
shall not apply to dividends payable in shares of Common Stock.
3. Rank.
(a) Without the prior express written consent of the Holders
of not less than two-thirds (2/3) of the then outstanding aggregate principal
amount of Debentures; the Company shall not hereafter (i) issue any Debentures,
(ii) authorize or issue any debt securities
4
5
of senior rank to the Debentures in respect of dividend rights or priority of
payment, (iii) authorize or issue any Parity Securities with terms and
conditions more favorable than the terms herein, or (iv) authorize or make any
amendment to the Company's Certificate of Incorporation or By-laws, which would
materially and adversely affect the rights or relative priority of the Holders
of the Debentures relative to the holders of Parity Securities or the holders of
any other class of capital stock.
(b) In the event of the merger, consolidation or other
business combination of the Company with or into another corporation, the
Debentures shall maintain their relative powers provided for herein and no
merger, consolidation or other business combination shall result inconsistent
therewith.
4. Transfers. The Debentures have been issued subject to investment
representations of the original purchaser of such Debentures and may be
transferred or exchanged only in compliance with the Securities Act of 1933, as
amended (the "ACT"), and applicable state securities laws. Prior to due
presentment for transfer of each Debenture, the Company may treat the Holder as
the owner thereof for the purpose of receiving payments as herein provided and
all other purposes, and the Company shall not be affected by notice to the
contrary.
5. Definitions. For purposes hereof the following definitions shall
apply:
"AGGREGATE PRINCIPAL AMOUNT" shall mean with respect to the
Debentures, the sum of (a) the principal amount thereof, plus (b) accumulated
but unpaid interest thereon (whether or not earned or declared).
"CLOSING PRICE" shall mean the price of one share of Common Stock
determined as follows:
(a) If the Common Stock is listed on the Nasdaq National
Market or The Nasdaq SmallCap Market (collectively, "NASDAQ"), the closing bid
price, as reported by Bloomberg, L.P. on the date of valuation (or, if there is
no closing bid price for such date, the most recent previous closing bid price);
(b) If the Common Stock is listed on a national securities
exchange, the last reported closing bid price on such exchange on the date of
valuation (or, if there is no last reported closing bid price on that date, the
most recent previous closing bid price);
(c) If neither (a) nor (b) apply, but the Common Stock is
quoted in the over-the-counter market on the pink sheets or bulletin board, the
closing bid price on the date of valuation; and
(d) If none of clause (a), (b) or (c) above applies, the
market value as determined by a nationally recognized investment banking firm or
other nationally recognized
5
6
financial advisor retained in good faith by the Board of Directors of the
Company for such purpose, taking into consideration among other factors, the
earnings history, book value and prospects for the Company, and the prices at
which shares or Common Stock recently have been traded. Such determination shall
be conclusive and binding on all persons.
"COMMON STOCK" shall mean the common stock, no par value, of the
Company.
"CONVERSION PRICE" shall mean an amount that is equal to the lesser
of (a) the Fixed Conversion Price or (b) the Floating Conversion Price, unless
otherwise specified herein.
"CONVERSION RATE" shall mean the number of shares of Common Stock
issuable upon conversion of each $1,000 Aggregate Principal Amount of the
Debentures as to such aggregate principal amount of Debentures as of the Holder
Conversion Date (as defined in Paragraph 8):
Aggregate Principal Amount
--------------------------
Conversion Price
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"FIXED CONVERSION PRICE" shall initially mean the amount of $3.06.
On each anniversary of the Issuance Date (the "ANNIVERSARY DATE") the Fixed
Conversion Price will be adjusted to equal the lesser of either: (i) the Fixed
Conversion Price, as measured on the previous Anniversary Date (or, for the
first Anniversary Date, the amount of $3.06) or (ii) the amount of 120% of the
average of the Closing Price during the 20 days prior to the current Anniversary
Date; provided, however, that if the Company offers, sells, contracts to sell or
otherwise issues or agrees to issue any convertible debt or convertible equity
securities of the Company, in a private placement transaction (other than
pursuant to any existing stock or option or similar existing equity-based
compensation plan for employees, officers, directors or consultants), with a
maximum conversion price per share of Common Stock of an amount less than the
Fixed Conversion Price, then the "Fixed Conversion Price" shall mean such lower
conversion price for the Debentures not yet converted. The Fixed Conversion
Price shall also be subject to adjustment from time to time ratably for any
events set forth in Paragraph 10 hereof.
"FLOATING CONVERSION PRICE" shall mean the average of the five (5)
lowest Closing Prices during the Valuation Period.
"HIGH TRADE PRICE" shall mean the highest trade price, as reported
by Bloomberg, L.P. on the date of valuation.
"ISSUANCE DATE" shall mean the initial date of issuance of the
Debentures.
"PERSON" means and includes an individual, a partnership, a joint
venture, a corporation, a company, a trust, an unincorporated organization and a
government or any department or agency thereof.
6
7
"REGISTRATION RIGHTS AGREEMENT" shall mean the Registration Rights
Agreement, dated as of the Issuance Date, by and between the Company and the
purchasers named therein.
"REGISTRATION STATEMENT" shall mean the registration statement(s)
filed by the Company with the SEC to register the shares of Common Stock
issuable upon conversion of the Debentures and the Warrants.
"SEC" shall mean the Securities and Exchange Commission and any
successor entity thereto.
"TRIGGERING EVENT" means the occurrence of any of the following
events:
(a) the Common Stock is either delisted or suspended from
trading on NASDAQ, The New York Stock Exchange, Inc. or The American Stock
Exchange, Inc. for a period of five (5) consecutive trading days, for a period
of thirty (30) non-consecutive trading days within the last twelve (12) months,
or any such delisting or suspension is threatened in writing or pending
(excluding disruptions from business announcements that result in any halt(s) in
trading of not more than one day on each occasion and other than as a result of
the suspension of trading in securities on such market in general), provided,
however, that if such delisting or suspension is only threatened, the Company
shall have thirty (30) days to cure the threatened delisting or suspension; or
(b) any money judgment (including any arbitration award, but
only if reduced to a judgment, but excluding any arbitration award rewarded in
respect of such proceedings commenced pursuant to Paragraphs 5A(d) and 8(h)),
writ or warrant of attachment, or similar process in excess of Two Hundred and
Fifty Thousand Dollars ($250,000) in the aggregate shall be entered or filed
against the Company, its subsidiaries or any of their properties or other assets
and which shall remain unpaid, unvacated, unbonded or unstayed for a period of
sixty (60) days or in any event later than ten (10) days prior to the date of
any proposed sale thereunder; or
(c) the Company fails, as of the date of the Company's next
shareholders' meeting, to obtain shareholder approval of an increase in its
authorized capitalization to 25,000,000 shares of Common Stock; or
(d) any breach by the Company pursuant to Section 5.15 of the
Subscription Agreement.
"VALUATION PERIOD" shall mean the thirty-five (35) trading days
immediately preceding, but not including, the Holder Conversion Date (as defined
herein), subject to adjustment from time to time ratably for any events set
forth in Paragraph 10 hereof that occur during such thirty-five (35) trading day
period.
7
8
6. Paragraph 6 Transactions. (a) If at any time (i) there occurs any
merger, consolidation or other business combination of the Company, with or into
any other corporation, entity or person (whether or not the Company is the
surviving corporation) or there occurs any other corporate reorganization or
transaction or series of related transactions, and as a result thereof the
shareholders of the Company pursuant to such merger, consolidation,
reorganization or other transaction own in the aggregate less than 50% of the
voting power and common equity of the ultimate parent corporation or other
entity surviving or resulting from such merger, consolidation, reorganization or
other transaction, (ii) the Company transfers all or substantially all of the
Company's assets to another corporation or other entity or person, or (iii) a
purchase, tender or exchange offer is made to and accepted by the holders of
more than 50% of the outstanding shares of Common Stock (each of the foregoing
items (i) to (iii), a "PARAGRAPH 6 TRANSACTION"), then the Holders of the
Debentures then outstanding may participate in any such transaction as a class
with the common stockholders on the same basis as if the Debentures had been
converted one day prior to the announcement date (or record date for such
distribution, dividend or offer) of such transaction.
(b) At the option of each Holder, the Company shall redeem all
or any portion of such Holder's Debentures effective as of the effective date of
a Paragraph 6 Transaction, and the Holder shall be entitled to receive a
redemption price per $1,000 principal amount of Debentures being redeemed equal
to 130% of the aggregate value of the Debentures. Each Holder shall be entitled
to make an election for redemption at any time up to five (5) days prior to the
effective date of any Paragraph 6 Transaction; provided, however, at the
discretion of such Holder, such Holder may, at any time, elect to convert its
Debentures into fully paid, validly issued and nonassessable shares of Common
Stock in accordance with the terms of Paragraph 8 hereof, for such number of
shares of Common Stock as determined by the application of the Conversion Rate
so long as the Company has not redeemed such Debentures.
7. Redemption at the Option of the Company.
(a) To the extent the Company shall have funds legally
available for such redemption, the Company may, provided that the notice
provisions set forth in this Paragraph 7 hereof have been complied with, redeem,
at its option, the Debentures, at any time after the Issuance Date, in whole or
in part, at a redemption price per $1,000 Aggregate Principal Amount of
Debentures equal to the lesser of: (i) the sum of (A) 118% of the Aggregate
Principal Amount of the Debentures and, (B) an additional 1% of the Aggregate
Principal Amount of the Debentures for each month since the Issuance Date; or
(ii) the sum of (A) 130% of the Aggregate Principal Amount of the Debentures.
(b) Notice of the Company's intention to redeem the Debentures
pursuant to this Paragraph 7 shall be given not less than thirty (30) days prior
to the date of redemption by first class mail, postage prepaid, to the Holders.
Each such notice shall state: (i) a redemption date (each, a "REDEMPTION DATE");
(ii) the place or places where the certificates representing the Debentures are
to be surrendered for payment of the redemption price; and (iii) the redemption
price and the calculation of such price (the "COMPANY REDEMPTION NOTICE").
8
9
(c) After a Company Redemption Notice is given pursuant to
Paragraph 7(b), upon surrender in accordance with such notice of Debentures,
such Debentures shall be redeemed by the Company at the redemption price.
8. Conversion at the Option of the Holder. Subject to the
limitations of Paragraph 15, the Holder shall have the following conversion
rights:
(a) Holder's Right to Convert. Debentures shall be convertible
at any time on or after the Issuance Date, in whole or in part, at the option of
the Holder thereof, into fully paid, validly issued and nonassessable shares of
Common Stock in accordance with the terms herein for such number of shares of
Common Stock as determined by the application of the Conversion Rate.
(b) Mechanics of Conversion. In order to convert any
Debentures (in whole or in part) into full shares of Common Stock, the
applicable Holder shall surrender to the Transfer Agent the certificate(s)
representing the Debentures to be converted, by either overnight courier or
two-day courier, to the principal office of the Transfer Agent, and shall give
written notice in the form of Exhibit 2 (the "CONVERSION NOTICE") by facsimile
(with the original of such notice forwarded with the foregoing courier) to both
the Transfer Agent and the Company at such office to the effect that such Holder
elects to have converted principal amount of Debentures (plus accumulated but
unpaid interest thereon) specified therein (such notice and election shall be
irrevocable by the Holder); provided, however, that the Company shall not be
obligated to issue certificate(s) evidencing shares of Common Stock issuable
upon such conversion unless either the certificate(s) evidencing the Debentures
being converted is delivered to the Company as provided above, or if the Holder
notifies the Company that such certificate(s) has been lost, stolen or
destroyed, such Holder follows such procedures as are set forth in Paragraph 19.
If less than all of the principal amount represented by such certificate or
certificates is to be converted, the Company shall issue and deliver to or on
the order of the Holder thereof, at the expense of the Company, a new
certificate or certificates representing the unconverted principal amount, to
the same extent as if the certificate theretofore representing such unconverted
principal amount had not been surrendered on conversion. The effective date of
conversion (the "HOLDER CONVERSION DATE") shall be deemed to be the date on
which the Company receives by facsimile the Conversion Notice.
(c) The Company shall use its best efforts to issue and
deliver within three (3) business days after receipt by the Company of such
certificate(s) evidencing the Debentures being converted, to such Holder, or to
its designee, certificates for the number of shares of Common Stock to which
such Holder shall be entitled hereunder or, if requested by the Holder, issue
such shares in electronic format (i.e., DWAC), together with a certificate,
certified by an appropriate officer of the Company, setting forth the
calculation of the Conversion Rate and, if appropriate, a certificate evidencing
the principal amount of Debentures covered by the submitted for conversion. The
person or persons entitled to receive the shares of Common Stock issuable upon
such conversion shall be treated for all purposes as the record holder of such
shares of
9
10
Common Stock on the Holder Conversion Date.
(d) Each certificate representing Debentures surrendered to
the Company for conversion pursuant to this Paragraph 8 shall, on the Holder
Conversion Date and subject to issuance of the shares of Common Stock issuable
upon conversion thereof, be canceled and retired by the Company. Upon issuance
of the shares of Common Stock issuable upon conversion of the Debentures
pursuant to this Paragraph 8, the Debentures formerly represented thereby shall
be deemed to be canceled and shall no longer be considered to be issued and
outstanding for any purpose, including without limitation, for purposes of
accumulating interest thereon. Such principal amount outstanding shall be
retired and shall not be subject to reissuance by the Company.
(e) Notwithstanding the foregoing, if upon receipt by the
Company of a Conversion Notice it is determined that the Conversion Price on the
Holder Conversion Date is less than $1.75 (the "FLOOR PRICE"), then the Company
may, if written notice pursuant to Paragraph 8(f) had been previously delivered
to the Holder, in lieu of issuing shares of Common Stock pursuant to this
Paragraph 8, pay the Holder the "equivalent value" of the shares of Common Stock
in United States Dollars (the "EQUIVALENT VALUE ELECTION"). "EQUIVALENT VALUE"
for purposes of this paragraph 8 is defined as:
High Trade Price on the Holder Conversion Date
----------------------------------------------
Conversion Price
(f) If at anytime, the Conversion Price is determined to be
less than the Floor Price and the Company intends, if it were to receive
Conversion Notice from any Holder, to exercise its Equivalent Value Election
pursuant to Paragraph 8(e), the Company must provide the Holder one (1) day's
written notice (the "FLOOR PRICE NOTICE") prior to making such an election. The
Company will not be entitled to exercise its Equivalent Value Election unless
Floor Price Notice was delivered to the Holder in a timely manner.
9. Maturity.
(a) On the date that is the fifth anniversary of the Issuance
Date, or such later date to which such date has been extended pursuant to
Paragraph 10 hereof (the "MATURITY DATE"), the Company shall redeem all of the
Debentures then outstanding at a redemption price per $1,000 Aggregate Principal
Amount of Debentures equal to 110% of the Aggregate Principal Amount of the
Debentures outstanding.
(b) Upon redemption of the outstanding Debentures, the Company
shall give the Holders written notice of such redemption not less than ten (10)
days prior to the Maturity Date, and such written notice shall specify (i) the
Maturity Date, (ii) the place or places to which certificates representing the
Debentures are to be surrendered for redemption, and (iii) the redemption price,
which shall be equal to the aggregate value of the Debentures per $1,000
principal amount of Debentures as of the Maturity Date. In order to redeem any
Debentures, the
10
11
applicable Holder shall surrender the stock certificate(s) representing the
Debentures called for redemption, by either overnight courier or two-day
courier, to the place or places specified in the written notice of redemption,
including the written notice in the form of Exhibit 1 herein, and the Company
shall redeem such Debentures (plus any accumulated but unpaid interest thereon)
on the Maturity Date; provided, however, that the Company shall not be obligated
to pay the applicable redemption price unless either the certificate evidencing
the Debentures being redeemed is delivered to the Company as provided above, or
if the Holder notifies the Company that such certificate(s) has been lost,
stolen or destroyed and follows such procedures as are set forth in Paragraph
19.
(d) Each certificate representing Debentures surrendered to
the Company for redemption pursuant to this Paragraph 9 shall, on the Maturity
Date and subject to payment or setting aside for payment of the redemption price
payable upon redemption, be canceled and retired by the Company. Upon payment or
setting aside for payment of the redemption price payable upon redemption of the
Debentures pursuant to this Paragraph 9, the shares of Debentures formerly
represented thereby shall be deemed to be canceled and shall no longer be
considered to be issued and outstanding for any purpose, including without
limitation, for purposes of accruing interest thereon.
10. Stock Splits; Dividends; Adjustments; Reorganizations.
(a) Stock Splits and Combinations. The Company shall not
effect any stock split, subdivision or combination with an effective date within
thirty (30) trading days of the Maturity Date.
(b) Certain Dividends and Distributions. The Company shall not
make, or fix a record date for the determination of holders of Common Stock or
other securities entitled to receive, a dividend or other distribution payable
in additional shares of Common Stock, with an effective date within thirty (30)
trading days of the Maturity Date.
(c) Adjustment for Other Dividends and Distributions. In the
event the Company at any time or from time to time after the Issuance Date
makes, or fixes a record date for the determination of holders of Common Stock
entitled to receive, a dividend or other distribution payable in securities of
the Company other than shares of Common Stock, then and in each such event,
provision shall be made so that the Holders shall receive upon conversion of
their Debentures pursuant to Paragraphs 8 hereof, in addition to the number of
shares of Common Stock receivable thereupon, the amount of such other securities
of the Company to which a Holder on the relevant record or payment date, as
applicable, of the number of shares of Common Stock so receivable upon
conversion would have been entitled, plus any dividends or other distributions
which would have been received with respect to such securities had such Holder
thereafter, during the period from the date of such event to and including the
Holder Conversion Date, retained such securities, subject to all other
adjustments called for during such period under this Paragraph 10 with respect
to the rights of the Holders. For purposes of this Paragraph 10(c), the number
of
11
12
shares of Common Stock so receivable upon conversion by the Holder shall be
deemed to be that number which the Holder would have received upon conversion of
the Debentures if the Holder Conversion Date had been the day preceding the date
upon which the Company announced the making of such dividend or other
distribution.
(d) Adjustment of Floating Conversion Price upon Issuance of
Convertible Securities. If the Company in any manner issues or sells securities
that are convertible into or exchangeable for Common Stock at a price which
varies with the market price of the Common Stock (the formulation for such
variable price being herein referred to as the "VARIABLE PRICE") and such
Variable Price is not calculated using the same formula used to calculate the
Floating Conversion Price in effect immediately prior to the time of such issue
or sale, the Company shall provide written notice thereof via facsimile and
overnight courier to each holder of the Debentures ("VARIABLE NOTICE") on the
date of issuance of such convertible securities. If the holders of shares of
Debentures representing at least two-thirds (2/3) of the outstanding principal
amount of the Debentures then outstanding provide written notice via facsimile
and overnight courier (the "VARIABLE PRICE ELECTION NOTICE") to the Company
within five (5) business days of receiving a Variable Notice that such holders
desire to replace the Floating Conversion Price then in effect with the Variable
Price described in such Variable Notice, then from and after the date of the
Company's receipt of the Variable Price Election Notice the Floating Conversion
Price will automatically be replaced with the Variable Price (together with such
modifications to this Form of Debenture as may be required to give full effect
to the substitution of the Variable Price for the Floating Conversion Price). In
the event that a holder delivers a Conversion Notice at any time after the
Company's issuance of convertible securities with a Variable Price but before
such holder's receipt of the Company's Variable Notice, then such holder shall
have the option by written notice to the Company to rescind such Conversion
Notice or to have the Conversion Price be equal to such Variable Price for the
conversion effected by such Conversion Notice.
(e) Adjustment for Reclassification, Exchange and
Substitution. In the event that at any time or from time to time after the
Issuance Date, the Common Stock issuable upon the conversion of the Debentures
is changed into the same or a different number of shares of any class or classes
of stock, whether by recapitalization, reclassification or otherwise (other than
a subdivision or combination of shares or stock dividend or reorganization
provided for elsewhere in this Paragraph 10 or a merger, consolidation or other
business transaction provided for in Paragraph 6), then and in each such event
each Holder shall thereafter have the right upon conversion to receive the kind
and amount of shares of stock and other securities, cash and property receivable
upon such recapitalization, reclassification or other change, by holders of the
number of shares of Common Stock which the Holder of Debentures would have
received had it converted such shares immediately prior to such
recapitalization, reclassification or other change, at the Conversion Price then
in effect (the kind, amount and price of such stock and other securities to be
subject to adjustments as herein provided). Prior to the consummation of any
recapitalization, reclassification or other change contemplated hereby, the
Company will make appropriate provision (in form and substance satisfactory to
the Holders of a majority of the Debentures then outstanding) to ensure that
each of the Holders of the Debentures will thereafter have the right to acquire
and receive in lieu of or in addition to (as the case may be) the shares of
Common Stock
12
13
otherwise acquirable and receivable upon the conversion of such Holder's
Debentures, such shares of stock, securities or assets that would have been
issued or payable in such recapitalization, reclassification or other change
with respect to or in exchange for the number of shares of Common Stock which
would have been acquirable and receivable upon the conversion of such Holder's
Debentures had such recapitalization, reclassification or other change not taken
place (without taking into account any limitations or restrictions on the timing
or amount of conversions). In the event of such recapitalization,
reclassification or other change, the formulae set forth herein for conversion
and redemption shall be equitably adjusted to reflect such change in number of
shares or, if shares of a new class of stock are issued, to reflect the market
price of the class or classes of stock (applying the same factors used in
determining the Conversion Price for shares of Common Stock) issued in
connection with the above described events.
(f) Reorganization. If at any time or from time to time after
the Issuance Date there is a capital reorganization of the Common Stock (other
than a recapitalization, subdivision, combination, reclassification or exchange
of shares provided for elsewhere in this Paragraph 10) then, as a part of such
reorganization, provisions shall be made so that the Holders shall thereafter be
entitled to receive upon conversion of its Debentures the number of shares of
stock or other securities or property to which a holder of the number of shares
of Common Stock deliverable upon conversion would have been entitled to receive
had the holder of Debentures converted such shares immediately prior to such
capital reorganization, at the Conversion Price then in effect. In any such
case, appropriate adjustments shall be made in the application of the provisions
of this Paragraph 10 with respect to the rights of the Holders after such
capital reorganization to the extent that the provisions of this Paragraph 10
shall be applicable after that event and be as equivalent as may be practicable,
including, by way of illustration and not limitation, by equitably adjusting the
formulae set forth herein for conversion and redemption to reflect the market
price of the securities or property (applying the same factors used in
determining the Conversion Price for shares of Common Stock) issued in
connection with the above described events.
(g) Certain Events. If any event occurs of the type
contemplated by the provisions of this Paragraph 10 but not expressly provided
for by such provisions, then the Company's Board of Directors will make an
appropriate adjustment in the Conversion Price so as to protect the rights of
the holders of the Debentures; provided, however, that no such adjustment will
increase the Conversion Price as otherwise determined pursuant to this Paragraph
10.
(h) Dispute. In the event of a dispute between a Holder and
the Company with respect to any of the adjustments required pursuant to the
provisions of this Paragraph 10, such Holder shall be entitled to receive the
number of shares of Common Stock as to which no dispute exists and, within sixty
(60) days of receipt of the Schedule of Computations (as defined below), to
submit such dispute to the American Arbitration Association for resolution
according to the then applicable rules thereof, which determination shall be
final and binding on all parties. If it shall be determined that a Holder should
have received additional shares of Common Stock or other securities upon such
conversion (the "UNDELIVERED SHARES") then, within three (3) trading days of
receipt of written notice of such determination, the Company shall issue to such
13
14
Holder that number of additional shares of Common Stock or other securities as
shall have a value, based upon the then Conversion Price for shares of Common
Stock, as shall equal the Undelivered Shares times the Conversion Price for
shares of Common Stock on the date of conversion. The cost of such proceeding
shall be shared 50% by the Holder involved in such dispute and 50% by the
Company, except that the prevailing party, as determined by the arbitrator
presiding over the arbitration, shall be entitled to recover reasonable
attorney's fees, in addition to other costs and expenses and any other available
remedy.
(i) Schedule of Computations. The Company shall provide
written notice to the Holders of all adjustments pursuant to this Paragraph 10
shall be notified within three (3) trading days of the occurrence thereof and
such notice shall be accompanied by a schedule setting forth a detailed
calculation of such adjustments (the "SCHEDULE OF COMPUTATIONS"). If so
requested by a Holder, the Company shall provide to such Holder within ten (10)
trading days of its request therefor a certificate of concurrence to the
Schedule of Computations by the independent certified public accountants of the
Company. Any dispute between the Company and the Holders with respect to the
matters set forth in such Schedule of Computations may at the option of the
Holders be submitted to one of the national accounting firms currently known as
the "big five" selected by the holders of a majority in interest of the
principal amount of the Debentures then outstanding, provided, however, that the
Company shall have ten (10) days after receipt of notice from such Holders of
their selection of such firm to object thereto, in which case the holders of a
majority in interest of the principal amount of Debentures then outstanding
shall select another firm and the Company shall have no right of objection. The
firm selected by the holders of a majority in interest of the principal amount
of the Debentures then outstanding as provided in the preceding sentence shall
be instructed to deliver a written opinion as to such matters to the Company and
the Holders within thirty (30) days after submission to it of such dispute. Such
opinion shall be final and binding on the parties hereto. The fees and expenses
of such accounting firm shall be paid 50% by the Company and 50% by the Holders.
11. Fractional Shares. No fractional shares of Common Stock or strip
representing fractional shares of Common Stock shall be issuable hereunder. The
number of shares of Common Stock that are issuable upon any conversion shall be
rounded up or down to the nearest whole share.
12. Reservation of Stock; Conversion Default.
(a) Reservation Requirement. The Company shall at all times
reserve and keep available out of its authorized but unissued shares of Common
Stock such number of shares of Common Stock as shall be necessary for the
purpose of effecting the conversion of Debentures, which shares shall be free of
preemptive rights, for the purpose of enabling the Company to satisfy any
obligation to issue shares of its Common Stock, or other securities, upon
conversion of all Debentures pursuant hereto. The Company shall initially
reserve a number of shares of Common Stock equal to two times the number of
shares necessary to satisfy its obligations on conversion of the Debentures if
all such shares were converted on the Issuance Date.
14
15
(b) Default. If the Company (i) notifies a Holder via
facsimile or pursuant to a public disclosure, including, but not limited to a
press release, that the Company cannot, or does not intend to, or (ii) fails to,
issue shares of Common Stock registered for resale under the Registration
Statement for any reason (a "CONVERSION DEFAULT"), including, without
limitation, because the Company (x) is either (1) unable to have a Registration
Statement declared effective by the SEC within 150 days of the Issuance Date, as
provided for in Section 2 of the Registration Rights Agreement or (2) subject to
a Triggering Event, as set forth in Paragraph 5 hereof, (y) does not have a
sufficient number of shares of Common Stock or other securities authorized and
available, or (z) is otherwise prohibited by applicable law or by the rules and
regulations of any stock exchange, interdealer quotation system or other
self-regulatory organization with jurisdiction over the Company or its
securities, including without limitation the Exchange Cap (as defined in
Paragraph 15), from issuing all of the Common Stock which is to be issued to a
Holder, then the Company shall issue as many shares of Common Stock as it is
able to issue in accordance with such Holder's Conversion Notice, and with
respect to the unconverted principal amount of Debentures, notify the Holder of
such failure (a "DEFAULT NOTICE") which notice shall indicate (I) the reason why
the Company is unable to fully satisfy such holder's Conversion Notice, (II) the
principal amount of Debentures which cannot be converted and (III) the
applicable mandatory redemption price (as calculated pursuant to the terms
below). Such Holder may, after receipt of such Default Notice or becoming aware
of such Conversion Default, deliver written notice via facsimile to the Company
("REMEDIES NOTICE") of its election pursuant to this Paragraph 12.
(c) Each Holder pursuant to such Default Notice shall have the
following options, at its election: (i) the right to demand from the Company
immediate redemption of its Debentures in cash at 130% of the Aggregate Value;
(ii) if the Company's inability to fully convert Debentures is pursuant to
Paragraph 12(b)(ii)(y) above, require the Company to issue restricted shares of
Common Stock in accordance with such Holder's Conversion Notice; (iii) void its
Conversion Notice and have returned the nonconverted Debentures that were to be
converted pursuant to such Holder's Conversion Notice; or (iv) if the Company's
inability to fully convert the Debentures is pursuant to the Exchange Cap
described in Paragraph 12(b)(ii)(z), require the Company to use its best efforts
to take all steps necessary in order to exceed such Exchange Cap; provided,
however, the Holder may elect any of the other options set forth in this
Paragraph 12(c) if the Company shall fail to be able to exceed such Exchange Cap
within 45 days of the Company's receipt of the applicable Remedies Notice.
Notwithstanding the foregoing, no Remedies Notice may be delivered by a Holder
subsequent to receipt by such Holder of notice from the Company (sent by
overnight or two-day courier with a copy sent by facsimile) of the availability
of sufficient shares of Common Stock or other securities to perfect conversion
(a "POST-DEFAULT CONVERSION") of all the Debentures; provided that such rights
as set forth herein and election as set forth in the Remedies Notice shall be
reinstated if the Company shall thereafter fail to perfect such Post-Default
Conversion by delivery of Common Stock certificates or certificates representing
other securities in accordance with the applicable provisions hereof and payment
of all accumulated and unpaid interest in cash with respect thereto within five
(5) days of delivery of the notice of Post-Default Conversion.
15
16
(d) In addition to the foregoing, upon a Conversion Default,
the interest rate on all of the Debentures (including Debentures for which a
Conversion Notice has not yet been sent), shall for the period during which such
Debentures have not been duly converted or redeemed as herein provided, be
increased by 2.0% (i.e., from 6.0% to 8.0%) commencing on the first day of the
thirty (30) day period (or part thereof) following a Conversion Default and an
additional 1.0% commencing on the first day of each thirty (30) day period or
periods (or part thereof) thereafter until such Debentures have been duly
converted or redeemed as herein provided; provided, however, that if the
Company's inability to fully convert Debentures is pursuant to Paragraph
12(b)(ii)(z) above, the Company shall have sixty (60) days to cure such default
prior to giving rise to the right of the Holder to exercise remedies pursuant to
this Paragraph 12, including, without limitation, the right to receive interest
at the higher rate. Any such interest which is not paid when due shall
accumulate interest until paid at the rate from time to time applicable to
interest on the Debentures as to which the Conversion Default has occurred.
13. Taxes. The Company shall pay any and all taxes attributable to
the issuance and delivery of Common Stock or other securities upon conversion of
the Debentures.
14. Voting Rights. The Holders shall have no voting rights, except
as required by law, including but not limited to the Connecticut General
Corporation Law, and as expressly provided herein.
15. Limitation on Number of Conversion Shares. (a) The Company shall
not be obligated to issue upon conversion of the Debentures, in the aggregate,
more than a number of shares of Common Stock equal to 19.99% of the number of
shares of Common Stock outstanding on the Issuance Date (such amount to be
proportionately and equitably adjusted from time to time in the event of stock
splits, stock dividends, combinations, reverse stock splits, reclassification,
capital reorganization and similar events relating to the Common Stock) (the
"EXCHANGE CAP"), if issuance of a larger number of shares of Common Stock would
constitute a breach of the Company's obligations under the rules or regulations
of NASDAQ or any other principal securities exchange or market upon which the
Common Stock is or becomes traded. The Exchange Cap shall be allocated among the
Holders pro rata based on the total principal amount outstanding of the
Debentures. Assuming the Company has not previously obtained (or attempted to
obtain) Shareholder Approval (as defined below), then the Company shall issue to
any Holder so requesting conversion of Debentures its pro rata portion of the
Exchange Cap in the same ratio that the principal amount of Debentures held by
any such Holder bears to the aggregate principal amount of Debentures then
outstanding and, with respect to the aggregate principal amount of the
Debentures that remains outstanding after such issuance (the "REMAINING
PRINCIPAL AMOUNT"), the Company shall at the Holder's request, (x) as promptly
as possible but in no event later than 60 days after such Conversion Date,
convene a meeting of the holders of the Common Stock and use its best efforts to
obtain the Shareholder Approval or a waiver of such approval from the
appropriate exchange and (y) as promptly as possible from time to time, after a
written request by the Holder, issue shares of Common Stock at a Conversion
Price equal to the Closing Price on the trading day immediately preceding the
date of such
16
17
request for all or a portion of Remaining Principal Amount (plus any unpaid and
accrued interest thereon) held by such Holder (whether or not subject to the
Conversion Notice). "SHAREHOLDER APPROVAL" means the approval by a majority of
the total votes cast on the proposal, in person or by proxy, at a meeting of the
shareholders of the Company held in accordance with the Company's certificate of
incorporation and by-laws, of the issuance by the Company of shares of Common
Stock exceeding the Exchange Cap as a consequence of the conversion of the
Debentures into Common Stock at a price less than the greater of the book or
market value on the Issuance Date.
(b) Notwithstanding anything to the contrary contained herein,
after giving effect to the issuance of Common Stock pursuant to each Conversion
Notice, the total number of shares of Common Stock deemed beneficially owned by
the Holder submitting such Conversion Notice (excluding shares that might
otherwise be deemed beneficially owned by reason of the conversion right in the
Debentures owned by such Holder), together with all shares of Common Stock
deemed beneficially owned by such Holder's "affiliates" as defined in Rule 144
of the Securities Act, shall not exceed 4.99% of the total issued and
outstanding shares of the Common Stock; provided, however, that the Holder may
waive the restrictions of this Paragraph 15(b) upon written notice to the
Company delivered sixty-one (61) days prior to the effective date of such
waiver.
(c) Notwithstanding anything to the contrary contained herein,
upon exercise of each Holder's conversion option, pursuant to Paragraph 8, each
Holder may, for the first 30,000 shares of the Company's Common Stock traded on
NASDAQ on the Holder Conversion Date, only convert Debentures into shares of
Common Stock equal to 25% of the Company's trading volume on NASDAQ on the
Holder Conversion Date. There are no conversion restrictions on the conversion
of Debentures into shares of Common Stock after the first 30,000 shares of the
Company's Common Stock traded on the Holder Conversion Date.
16. No Reissuance of Debentures. No shares of Debentures acquired by
the Company by reason of redemption, purchase, conversion or otherwise shall be
reissued.
17. No Impairment. The Company shall not intentionally take any
action which would impair the rights and privileges of the Debentures set forth
herein or the rights of the Holders thereof.
18. Registration Suspension. In the event that at any time or from
time to time any Registration Statement is suspended or trading in the Common
Stock on NASDAQ is suspended for a period of time (excluding disruptions from
business announcements that result in any halt(s) in trading of not more than
one (1) day on each occasion) and other suspension of trading on such market in
general (each, a "BLACKOUT PERIOD"), the Maturity Date hereunder shall, at the
option of each Holder, be extended for a period equal to 1.5 times the number of
days in such Blackout Period. Furthermore, additional provisions pertaining to
the suspension of effectiveness of such registration statement set forth in
Paragraph 5A of the Registration Rights
17
18
Agreement shall be applicable in the event of a Blackout Period, and such
provisions as specifically incorporated by reference herein.
19. Replacement Certificate. In the event that any Holder notifies
the Company that a stock certificate evidencing Debentures has been lost,
stolen, destroyed or mutilated, the Company shall issue a replacement stock
certificate evidencing the Debentures identical in tenor and date (or if such
certificate is being issued for shares not covered in a redemption or
conversion, in the applicable tenor and date) to the original stock certificate
evidencing the Debentures, provided that the Holder executes and delivers to the
Company an affidavit of lost stock certificate and an agreement reasonably
satisfactory to the Company to indemnify the Company from any loss incurred by
it in connection with such Debenture certificate; provided, however, the Company
shall not be obligated to re-issue replacement certificates if the Holder
contemporaneously requests the Company to convert or redeem the full principal
amount evidenced by such lost, stolen, destroyed or mutilated certificate.
20. Notices. All notices to the holders of Debentures will be mailed
to registered holders of Debentures at their registered addresses as the same
shall appear in the Debenture Register on the day fifteen days prior to such
mailing.
21. Governing Law. The Debentures shall be governed by and construed
in accordance with the laws of the State of New York, without giving effect to
principles of conflicts of law.
22. Countersignature and Registration. This Debenture shall not
become valid or obligatory for any purpose until the certificate representing
this Debenture shall have been duly executed by the Company and such signature
attested to by an authorized Officer thereof.
23. Warranty of the Company. The Company hereby certifies and
warrants that all acts, conditions and things required to be done and performed
and to have happened precedent to the creation and issuance of this Debenture,
and to constitute the same legal, valid and binding obligations of the Company
enforceable in accordance with their terms, have been done and performed and
have happened in due and strict compliance with all applicable laws.
24. Descriptive Headings. The descriptive headings appearing herein
are for convenience of reference only and shall not alter, limit or define the
provisions hereof.
[SIGNATURE PAGES TO FOLLOW]
18
19
IN WITNESS WHEREOF, the Company has caused this Debenture to be duly
executed by an officer thereunto duly authorized this 21st day of April, 1999.
BIO-PLEXUS, INC.
By: _______________________________
Name:
Title:
19
20
EXHIBIT 1
REDEMPTION NOTICE
Reference is made to the Debenture to which this exhibit is appended (the
"DEBENTURE CERTIFICATE") of Bio-Plexus, Inc., a Connecticut corporation (the
"COMPANY"). In accordance with and pursuant to the Debentures, the undersigned
hereby elects to have the Company redeem the principal amount of 6% Convertible
Debentures due 2004 (the "DEBENTURE") of the Company, indicated below by
tendering the certificate(s) representing the Debentures specified below as of
the date specified below.
Date of Redemption: ___________________________________
Principal Amount of Debentures
to be redeemed: ___________________________________
Certificate no(s). of Debentures to be
redeemed: ___________________________________
Please confirm the following information:
Redemption Price: ___________________________________
The undersigned holder hereby represents, warrants and reaffirms to the Company,
as of the date hereof, the accuracy of the representations and warranties made
by it in Article 2 of the Subscription Agreement dated April 21, 1999 executed
by the undersigned and accepted by the Company.
Please issue any check drawn on an account of the Company into which the
Debentures are being redeemed, and, if applicable, issue any Debentures, in the
following name and to the following address:
Pay to: ___________________________________
___________________________________
___________________________________
___________________________________
Facsimile Number: ___________________________________
Authorization: ___________________________________
By: _______________________________
Title: ____________________________
Dated: ___________________________________
21
EXHIBIT 2
CONVERSION NOTICE
Reference is made to the debenture certificate (the "DEBENTURE CERTIFICATE") of
Bio-Plexus, Inc., a Connecticut corporation (the "COMPANY"). In accordance with
and pursuant to the Debenture Certificate, the undersigned hereby elects to have
the Company convert the principal amount of 6% Convertible Debentures due 2004
(the "DEBENTURES"), of the Company, indicated below into shares of Common Stock,
no par value (the "COMMON STOCK"), of the Company, by tendering the
certificate(s) representing the Debentures specified below as of the date
specified below.
Date of Conversion: ___________________________________
Principal amount of Debentures to be redeemed: _________________________________
Certificate no(s). of Debentures to be converted: __________
Please confirm the following information:
Redemption Price: ___________________________________
Please issue the Common Stock and, if applicable, any check drawn on an account
of the Company into which the Debentures are being converted in the following
name and to the following address:
Issue to: ___________________________________
___________________________________
___________________________________
___________________________________
Facsimile Number: ___________________________________
Authorization: ___________________________________
By: _______________________________
Title: ____________________________
Dated: ___________________________________