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FINANCING AGREEMENT
DATED AS OF SEPTEMBER 10, 1996
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TABLE OF CONTENTS
Page No.
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SECTION 1 - AUTHORIZATION, PURCHASE AND SALE OF THE NOTE 1
1.1 Authorization 1
1.2 Issuance of the Note 1
1.3 Certain Defined Terms 2
SECTION 2 - CLOSINGS, PAYMENT AND DELIVERY 2
2.1 Closing Dates and Place of Closings 2
2.2 Payment and Delivery 2
2.3 Termination by the Purchaser 2
SECTION 3 - REPRESENTATIONS AND WARRANTIES OF THE COMPANY 2
3.1 Organization and Standing; Articles and Bylaws 2
3.2 Corporate Power 2
3.3 Subsidiaries 3
3.4 Capitalization 3
3.5 Authorization 3
3.6 Contracts 4
3.7 Financial Information 5
3.8 Absence of Undisclosed Liabilities 5
3.9 Absence of Certain Changes 5
3.10 Taxes 6
3.11 Transactions with Related Parties 6
3.12 Litigation 6
3.13 Consents 6
3.14 Title to Properties; Liens and Encumbrances 7
3.15 Leases 7
3.16 Franchises, Licenses, Trademarks, Patents and Other Rights 7
3.17 Issuance Taxes 8
3.18 Offering 8
3.19 Compliance with Other Instruments 8
3.20 Employees 9
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3.21 Business of the Company 9
3.22 Use of Proceeds 9
3.23 Applicability of, and Compliance with, Other Laws 10
3.24 Disclosure 10
3.25 Warranties and Representations at Closing 11
3.26 Representations and Warranties in 1992 Agreement 11
SECTION 4 - REPRESENTATIONS AND WARRANTIES OF PURCHASER 11
4.1 Experience 11
4.2 Investment 11
4.3 Rule 144 11
4.4 Access to Data 11
4.5 Accredited Investor 12
SECTION 5 - CONDITIONS TO CLOSING OF PURCHASER 12
5.1 Representations and Warranties Correct 12
5.2 Performance 12
5.3 Compliance and Secretary's Certificates 12
5.4 Opinion of Company Counsel 12
5.5 Legal Investment 12
5.6 Qualifications 12
5.7 Proceedings and Documents 12
5.8 Collateral Assignment and Security Agreement 13
5.9 Warrant 13
5.10 Good Standing Certificates 13
5.11 Tax Matters 13
5.12 Insurance Certificates and Policies 13
5.13 Non-Competition and Proprietary Information Agreements 13
5.14 No Environmental Matters Pending 13
5.15 Officers' Agreement 14
5.16 Conflict of Interest Policy 14
SECTION 6 - CONDITIONS TO CLOSING OF COMPANY 14
6.1 Representations 14
6.2 Legal Investment 14
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SECTION 7 - COVENANTS OF THE COMPANY 14
7.1 Basic Financial Information 14
7.2 Additional Information and Rights 16
7.3 Prompt Payment of Taxes, etc. 17
7.4 Maintenance of Properties and Leases 17
7.5 Insurance 17
7.6 Accounts and Records 17
7.7 Compliance with Requirements of Governmental Authorities 17
7.8 Maintenance of Corporate Existence, etc. 18
7.9 Sale/Purchase of Assets; Merger 18
7.10 Availability of Stock for Conversion and Exercise 19
7.11 Confidentiality and Non-Competition Agreements; 19
Conflice of Interest Restrictions
7.12 Transactions with Affiliates 20
7.13 Compliance by Subsidiaries 20
7.14 Maintenance of Connecticut Presence 20
7.15 Connecticut Employment 20
7.16 Equal Opportunity 21
7.17 Certain Distributions/Payments 22
7.18 Employee Stock Purchases 22
7.19 Subordination Agreement 22
SECTION 8 -EVENTS OF DEFAULT 23
8.1 Events of Default 23
8.2 Annulment of Acceleration of Notes 25
8.3 Notice 25
8.4 Other Remedies 26
SECTION 9 - RIGHT TO PUT SHARES AND REQUIRE 26
REPAYMENT OF THE NOTE
9.1 Right to Put 26
9.2 Method of Exercise 26
9.3 Time of Exercise 26
9.4 Put Closing 26
9.5 Right to Require Repayment of the Note 27
9.6 Conversion of Note and Exercise and Warrant 27
SECTION 10 -DEFINITIONS 27
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SECTION 11 - REGISTRATION RIGHTS 31
11.1 Certain Definitions 31
11.2 Requested Registration 31
11.3 Company Registration 33
11.4 Registration Rights 34
11.5 Expenses of Registration 35
11.6 Registration Procedures 35
11.7 Indemnification 35
11.8 Information by Holder 37
11.9 Rule 144 Reporting 37
SECTION 12 - MISCELLANEOUS 37
12.1 Governing Law 37
12.3 Survival 37
12.3 Successors and Assigns 37
12.4 Entire Agreement; Amendment 38
12.5 Notices, etc. 38
12.6 Delays or Omissions 38
12.7 Separability 39
12.8 Agent's Fees and Services 39
12.9 Legal Fees and Expenses 39
12.10 Trial by Jury 39
12.11 Waiver 39
12.12 Titles and Subtitles 39
12.13 Counterpart 39
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SCHEDULES AND EXHIBITS
Schedule I - Schedule of Purchasers
Schedule II - Schedule of Exceptions/Disclosures
Exhibit A - Form of Note
Exhibit B - Form of Compliance Certificate
Exhibit C - Form of Secretary's Certificate
Exhibit D - Form of Opinion of Counsel to Company
Exhibit E - Form of Amendment to Collateral Assignment
Exhibit F - Form of Amendment to Security Agreement
Exhibit G - Form of Letter as to Warrant
Exhibit H - Form of Officers' and Directors' Agreement
Exhibit I - Form of Notice of Put
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FINANCING AGREEMENT
THIS FINANCING AGREEMENT (this "Agreement") is made and entered into as
of the 10th day of September, 1996, by and between BIOS Laboratories, Inc. (the
"Company"), a Delaware corporation, and the party listed on Schedule I hereto
(the "Schedule of Purchasers"). The party listed on the Schedule of Purchasers
is hereinafter referred to as the "Purchaser."
WHEREAS, the Company and the Purchaser are parties to a Loan Agreement
dated June 15, 1992 (the "1992 Loan Agreement") pursuant to which the Company
executed and delivered to the Purchaser a Consolidated Promissory Note dated
June 15, 1992 in the principal amount of $430,285 (the "1992 Note"); and
WHEREAS, the Company has requested that the Purchaser restructure the
loan (the "Loan") evidenced by the 1992 Loan Agreement and the 1992 Note;
WHEREAS, the Purchaser has approved the restructuring of the Loan upon
the terms and conditions hereinafter set forth in order to stimulate and
encourage the growth and development of the economy of the State of Connecticut
and to promote technology-based development in the State of Connecticut;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and conditions herein contained, the Company and the Purchaser hereby
agree as follows:
SECTION 1: AUTHORIZATION, PURCHASE AND SALE OF THE NOTE.
1.1 AUTHORIZATION. The Company has, or before the Closing (as defined
in Section 2.1 hereof) will have, authorized the issuance and sale of the Senior
Convertible Note in the principal amount of $473,778.71 due six (6) years from
the date of issuance thereof (the "Note"), substantially in the form set forth
in Exhibit A hereto.
1.2 ISSUANCE OF THE NOTE.
(a) Subject to the terms and conditions of this Agreement
and in reliance upon the representations, warranties and agreements
contained herein, the Company will issue to the Purchaser, in
substitution for the 1992 Note, a Note in the aggregate principal
amount of $417,017.91. Arrearages of interest owing on the 1992 Note in
the amount of $56,760.80 are included in the principal amount of the
Note and shall be deemed advanced by the Purchaser for purposes of the
Note.
(b) The Company and the Purchaser, having adverse
interests and as a result of arm's length bargaining, agree that the
Purchaser has not rendered or agreed to render
any services to the Company in connection with this Agreement or the
issuance of the Note.
1.3 CERTAIN DEFINED TERMS. Certain capitalized terms used in this
Agreement shall have the respective meanings ascribed to them in Section 10
hereof.
SECTION 2: CLOSINGS, PAYMENT AND DELIVERY
2.1 CLOSING DATES AND PLACE OF CLOSINGS. The closing (the "Closing") of
the issuance of the Note hereunder in the amount set forth in Section 1.2 hereof
shall be held on such date (the "Closing Date") that the Company fulfills the
conditions of closing set forth in Section 5 hereof, as shall have been agreed
to by the Company and the Purchaser. The place of the Closing (including the
place of delivery to the Purchaser by the Company of the Note) shall be at the
offices of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, One American Row, Hartford, Connecticut, or
such other place as shall have been agreed to by the Company and the Purchaser.
2.2 PAYMENT AND DELIVERY. At the Closing, the Company will deliver to
the Purchaser a Note in the principal amount of $473,778.71 and the Purchaser
will cancel the 1992 Note as payment for the Note.
2.3 TERMINATION BY THE PURCHASER. Notwithstanding any other provision
hereof, if the conditions of the Closing set forth in Section 5 hereof are not
fulfilled prior to October 1, 1996, the Purchaser may in its absolute discretion
at any time thereafter terminate its obligation hereunder and shall have no
further responsibilities hereunder.
SECTION 3: REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as expressly set forth (with reference to a subsection in this
Section 3) on Schedule II (the "Schedule of Exceptions/Disclosures") with a
specific reference to a subsection of this Section 3, the Company hereby
represents and warrants to the Purchaser as follows:
3.1 ORGANIZATION AND STANDING; ARTICLES AND BYLAWS. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. The Company has all requisite power to own the
properties owned by it and to conduct the business as it is being conducted by
it and as contemplated by the presentation material (the "Plan") prepared by the
Company and delivered to the Purchaser. The Company is duly qualified and
registered to do business in and is in good standing in every state in which the
property owned by it and/or the nature of its activities requires that it be so
qualified and registered.
The Company has furnished the Purchaser and special counsel for the
Purchaser with true, correct and complete copies of the Company's Certificate of
Incorporation and Bylaws, and all amendments thereto through and including the
Closing Date and copies of the minutes of all Board of Directors, Committees of
the Board, and shareholder meetings of the Company since November 1, 1994.
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3.2 CORPORATE POWER. The Company has all requisite corporate power to
enter into this Agreement and the other Financing Documents and will have on the
Closing Date all requisite corporate power to sell the Note and to carry out and
perform its obligations under the terms of this Agreement and the other
Financing Documents.
3.3 SUBSIDIARIES. The Company has no subsidiaries and, except as set
forth in SUBSECTION 3.3 OF THE SCHEDULE OF EXCEPTIONS/DISCLOSURES, does not own
of record or beneficially any capital stock or equity interest or investment in
any other corporation, partnership, association or business entity, or if the
Company has any subsidiary or subsidiaries, each subsidiary is listed on the
Schedule of Exceptions/Disclosures and each of the representations and
warranties set forth in this Section 3 is also made by the Company with respect
to each such subsidiary as if such subsidiary were the "Company" and the
Schedule of Exceptions/Disclosures shall apply to each such subsidiary in the
same manner as if such subsidiary were the "Company."
3.4 CAPITALIZATION. The Schedule of Exceptions/Disclosures contains a
true and correct list of all securities of the Company (including the amounts
thereof) outstanding immediately prior to the Closing, and the holders of any
interest in such securities. Immediately prior to the Closing, the Company's
authorized capital stock will consist of 750,000 shares of Common Stock, of
$.001 par value each, of which 204,460 shares will be issued and outstanding on
the Closing Date. Upon consummation of the Closing, all issued and outstanding
shares of capital stock of the Company will have been duly authorized and
validly issued, will be fully paid and nonassessable, will be owned of record
and beneficially by the shareholders and in the amounts set forth in the
Schedule of Exceptions/Disclosures and will have been offered, issued, sold and
delivered by the Company in compliance with applicable federal and state
securities laws. Except as set forth in the Schedule of Exceptions/Disclosures,
there are no outstanding preemptive or other preferential rights, conversion
rights or other rights, options, warrants or agreements granted or issued by or
binding upon the Company for the purchase or acquisition of any shares of its
capital stock. No holder of Common Stock has granted any option or other right
to purchase from such shareholder any interest in any share of Common Stock. The
Company holds 15,000 shares of its capital stock in its treasury.
3.5 AUTHORIZATION. All action on the part of the Company, its directors
and shareholders necessary for the authorization, execution, delivery and
performance by the Company of this Agreement, and the other Financing Documents
and for the consummation of the transactions contemplated herein and therein,
and for the authorization, issuance and delivery of the Note and of the
Conversion Shares and the Warrant Shares has been taken or will be taken prior
to the Closing. This Agreement and the other Financing Documents are each a
valid and binding obligation of the Company, enforceable in accordance with
their respective terms. The execution and delivery by the Company of this
Agreement and the other Financing Documents and compliance herewith and
therewith, and the issuance and sale of the Note, the Conversion Shares and the
Warrant Shares will not with or without notice or the passage of time or both
result in any violation of and will not conflict with, or result in a breach of
any of the terms of, or constitute a default under any provision of, any state
or federal law to which the Company is
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subject, the Company's Certificate of Incorporation or Bylaws, as amended, or
any mortgage, indenture, agreement, instrument, judgment, decree, order, rule
or regulation or other restriction to which the Company is a party or by
which it or any of its property is bound, or may be affected, or (except as
provided in the Financing Documents) result in the creation of any mortgage,
pledge, lien, encumbrance or charge upon any of the properties or assets of
the Company pursuant to any such term or give to any other person or entity
the right to accelerate the time for performance of any obligation of the
Company. No shareholder has any preemptive rights or rights of first refusal
by reason of or in connection with the issuance of the Note. The Conversion
Shares and the Warrant Shares have been duly and validly reserved by action
of the Board of Directors (and are in addition to any other shares reserved
for any other purpose) and are not subject to any preemptive rights or rights
of first refusal, and, upon such issuance, will be validly issued, fully paid
and nonassessable, and will be free of any liens or encumbrances.
3.6 CONTRACTS.
(a) The Schedule of Exceptions/ Disclosures sets forth a
true and correct list of all material contracts, obligations,
commitments, agreements, plans and the like ("Contracts"), whether
written or oral, and all administrative, judicial and similar orders to
which the Company is a party or by which it or any of its properties
are bound, or affected, including, without limitation, the following:
(i) any employment, bonus or consulting
agreement, pension, profit sharing, deferred compensation,
stock bonus, retirement, stock option, stock purchase, phantom
stock or similar plan, or agreement evidencing rights to
purchase, phantom stock or similar plan, or agreement among
shareholders of the Company;
(ii) any loan or other agreement, note, indenture
or instrument relating to, or evidencing, indebtedness for
borrowed money, or mortgaging, pledging or granting or
creating a lien or security interest or other encumbrance on
any property of the Company or any agreement or instrument
evidencing any guaranty by the Company of payment or
performance by any other party;
(iii) any agreement with any dealer, sales
representative, broker or other distributor, jobber,
advertiser or sales agency;
(iv) any agreement with any labor union or
collective bargaining organization or any other labor
agreement;
(v) any contract for the furnishing , purchase
or lease of machinery, equipment, goods or services
(including, without limitation, any agreement with processors
and subcontractors) involving more than $10,000;
(vi) any indenture, agreement or other document
(including private placement brochures) relating to the future
sale or repurchase of securities;
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(vii) any agreement to register under the
Securities Act of 1933, as amended (the "Securities Act"), any
of the securities of the Company;
(viii) any joint venture contract or arrangement or
other agreement involving a sharing of profits or expenses;
(ix) any agreement (other than distributorship
agreements or similar agreements providing for the
distribution of Company products with dealers, distributors
and sales representatives of the Company) limiting the freedom
of the Company to compete in any line of business or in any
geographic area or with any party; and
(x) any agreement providing for disposition of
any line of business, assets or securities of the Company, or
any agreement with respect to the acquisition of any line of
business, assets or shares of any other business, any
agreement of merger or consolidation or letter of intent with
respect to any of the foregoing.
(b) A copy of each of the Contracts has been delivered to
the Purchaser and a summary of each oral agreement is listed in the
Schedule of Exceptions/Disclosures. The Company has complied with all
material provisions of each such Contract. No event has occurred and no
condition exists which with notice or the passage of time or both would
constitute a default under any such Contract. To the Company's
knowledge, no party to any such Contract has threatened to terminate or
has any intentions of terminating its obligations thereunder.
3.7 FINANCIAL INFORMATION. Copies of the Company's balance sheet dated
June 30, 1996 (the "Balance Sheet"), and the related statements of operations
and cash flows for the period from January 1, 1996 through June 30, 1996
(collectively, the "Financial Statements") have been delivered to the Purchaser,
present fairly the financial position of the Company as of such date, have been
prepared in accordance with generally accepted accounting principles,
consistently applied, and show all material liabilities, absolute or contingent,
of the Company required to be recorded thereon in accordance with generally
accepted accounting principles as of the date thereof.
3.8 ABSENCE OF UNDISCLOSED LIABILITIES. The Company does not have, and
does not know of, any liabilities (fixed or contingent, including without
limitation any tax liabilities due or to become due), which, either individually
or in the aggregate, are material and not disclosed on the Balance Sheet.
3.9 ABSENCE OF CERTAIN CHANGES. Since the date of the Balance Sheet,
there has not been:
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(a) any change in the condition, assets, liabilities,
prospects or business of the Company from that shown on the Balance
Sheet or other Financial Statements or as described in or contemplated
by the Plan which, either individually or in the aggregate, has been or
is reasonably likely to be materially adverse;
(b) any damage to, or destruction or loss of, any of the
properties or assets of the Company (whether or not covered by
insurance) materially adversely affecting the business or plans of the
Company or the Technology;
(c) any declaration, setting aside or payment of any
dividend or other distribution in respect of any of the Company's
capital stock, or any direct or indirect redemption, purchase or other
acquisition of any of such stock (or any warrant, option or other right
with respect to such stock) by the Company or any repayment of Company
debt held by any Related Party or by any Affiliate;
(d) any organizational activity, collective bargaining
activity, labor disputes or labor trouble; or
(e) any event or condition of any character, which,
either individually or in the aggregate, materially adversely affects
the business, operations or plans of the Company.
3.10 TAXES. The Company has filed or will file within the time
prescribed by law (including extensions of time approved by any appropriate
taxing authority) all tax returns and reports required to be filed with the
United States Internal Revenue Service or with the State of Connecticut, and
(except to the extent that the failure to file would not have a material adverse
effect on the condition or operations of the Company) with all other
jurisdictions where such filing is required by law; and the Company has paid all
taxes, interest, penalties, assessments or deficiencies due in connection
therewith.
3.11 TRANSACTIONS WITH RELATED PARTIES. There is no loan, lease or
other continuing transaction between the Company and any Related Party or any
Affiliate.
3.12 LITIGATION. Except as set forth on the Schedule of
Exceptions/Disclosures, there is neither pending nor threatened any action,
suit, proceeding or claim, whether or not purportedly on behalf of the Company,
to which the Company or any key employee of the Company is or may be named as a
party or to which the Company's or any such person's property is or may be
subject. To the best of the Company's knowledge and belief, there is no basis
for any such action, suit, proceeding or claim, in which an unfavorable outcome,
ruling or finding in any such matter or for more than one of such matters, taken
together, might have a material adverse effect on the condition, financial or
otherwise, operations or prospects of the Company or on the Technology. The
Company has no knowledge of any unasserted claim, the assertion of which is
likely and which, if asserted, will seek damages, an injunction or other legal,
equitable, monetary or nonmonetary relief which if granted would have a material
adverse effect on the condition, financial or otherwise, operations or prospects
of the Company.
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3.13 CONSENTS. Except as set forth on the Schedules of
Exceptions/Disclosures, no consent, approval or authorization of, or
designation, declaration or filing with, any governmental authority on the part
of the Company, including qualification under applicable state securities laws
of the offer and sale of the Note or of the issuance of the Conversion Shares
and the Warrant Shares is required in connection with the valid execution and
delivery of this Agreement, or the other Financing Documents, the offer, sale or
issuance of the Note, the conversion of the Note, the issuance of the Conversion
Shares upon such conversion, the exercise of the Warrant or the issuance of the
Warrant Shares upon such exercise or the consummation of any other transaction
contemplated on the Closing Date or by this Agreement.
3.14 TITLE TO PROPERTIES; LIENS AND ENCUMBRANCES. Except as set forth
on the Schedules of Exceptions/Disclosures, the Company has good and marketable
title to all of its properties and assets, free from all mortgages, pledges,
liens, security interests, conditional sale agreements, encumbrances or charges.
3.15 LEASES. Set forth in the Schedule of Exceptions/Disclosures is a
correct and complete list of all leases (including, with respect to each lease,
the material provisions of such lease, including the term, the amount of rent
called for and a description of the leased property) under which the Company is
a lessee other than leases of personal property requiring rental payments of
less than $10,000 per year. The Company enjoys peaceful and undisturbed
possession under all such leases, all of such leases are valid and subsisting
and none of them are in default in any respect, and no event has occurred and no
condition exists which with notice or the passage of time or both would
constitute such a default.
3.16 FRANCHISES, LICENSES, TRADEMARKS, PATENTS AND OTHER RIGHTS.
(a) All (i) franchises, permits, licenses and other
similar authority, (ii) patents, patent applications, patent rights,
service marks, trademarks, trademark applications, trademark rights,
trade names, trade name rights and copyrights (whether registered or
not), and (iii) know-how, technology and trade secrets, which, in any
case, are owned, possessed or used by any Related Party or which any
Related Party has the right to own, possess or use, and which in any
way are or may be usable now or in the future for the conduct of the
Company's business as now conducted or as planned to be conducted, have
been duly and validly transferred in full to the Company. The documents
and instruments evidencing such transfer are listed in the Schedule of
Exceptions/Disclosures, and a copy thereof has been delivered to
special counsel for the Purchaser.
(b) The Company has all franchises, permits, licenses and
other similar authority, necessary for the conduct of its business as
now being conducted by it and believes it can obtain any similar
authority necessary for the conduct of its business as planned to be
conducted, and it is not in violation, nor will the transactions
contemplated by this Agreement cause a violation of the terms or
provisions of any such franchise, permit, license or other similar
authority.
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(c) The Schedule of Exceptions/Disclosures lists all
patents, patent applications, patent rights, trademarks, trademark
applications, trademark rights, trade names, trade name rights, service
marks and copyrights (whether registered or not) owned or possessed by
the Company, (collectively, the "Listed Rights"). The Listed Rights
constitute all the patents, patent applications, patent rights,
trademarks, trademark applications, trademark rights, trade names,
trade name rights, service marks and copyrights (whether registered or
not) necessary to the conduct of the Company's business as now being
conducted, and the Company believes that it can obtain any such rights
necessary for the conduct of its business as planned to be conducted.
The Company has and possesses the know-how, technology and trade
secrets not included in the Listed Rights (such know-how, technology
and trade secrets being collectively called the "Intellectual
Property") which it believes to be necessary (i) to conduct the
Company's business as now being conducted and (ii) with additional
know-how, technology and trade secrets which the Company plans to
develop, for the conduct of its business as planned to be conducted.
(The Listed Rights and the Intellectual Property collectively
constitute the "Technology"). There is neither pending, nor, to the
best of the Company's knowledge and belief, threatened, any claim or
litigation against the Company contesting the validity or right to use
any of the Listed Rights or any of the Intellectual Property, nor is
the Company aware of any basis therefor, and the Company has received
no notice of infringement upon or conflict with any asserted right of
others. To the best of the Company's knowledge and belief, no person,
corporation or other entity is infringing or violating the Listed
Rights or any of the Intellectual Property. Except as set forth on the
Schedules of Exceptions/Disclosures, the Company does not have any
obligation to compensate others for the use of any Listed Right or any
Intellectual Property, nor has the Company granted any license or other
right to use, in any manner, any of the Listed Rights or Intellectual
Property, whether or not requiring the payment of royalties.
3.17 ISSUANCE TAXES. All taxes imposed by any state in connection with
the issuance, sale and delivery of the Note shall have been fully paid, and all
laws imposing such taxes shall have been fully complied with, prior to the
Closing Date.
3.18 OFFERING. Within the past six (6) months, the Company has not,
either directly or through any agent, offered the Note or any security or
securities similar to the Note for sale to, or solicited any offers to buy the
Note or any part thereof or any such similar security or securities from, or
otherwise approached or negotiated in respect thereof with, any party or parties
other than the Purchaser or institutional or other sophisticated investors, each
of which was offered all or a portion of the Note at private sale for
investment.
Subject in part to the truth and accuracy of the Purchaser's
representations set forth in this Agreement, the offer, sale and issuance of the
Note, the Conversion Shares and the Warrant Shares to the Purchaser as
contemplated by this Agreement are exempt from the registration requirements of
the Securities Act and all applicable state securities laws, and neither the
Company nor anyone acting on its behalf will take any action hereafter that
would cause the loss of such exemption.
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3.19 COMPLIANCE WITH OTHER INSTRUMENTS. The Company is not in violation
of any term of its Certificate of Incorporation or Bylaws, as amended. Neither
the Company nor any of its property is in violation of any term of any mortgage,
indenture, contract, agreement, instrument, judgment, decree, order, statute,
rule or regulation to which the Company or any of such property is subject.
3.20 EMPLOYEES.
(a) No employee of the Company and no Related Party is,
or is now expected to be, in violation of any term of any employment
contract, patent disclosure agreement, non-competition agreement, or
any other contract or agreement with any prior employer or any other
person, corporation, or other entity or any restrictive covenant in
such an agreement, or any obligation imposed by common law or
otherwise, relating to the right of any such employee or Related Party
to be employed by the Company or companies similarly situated because
of the nature of the business conducted or to be conducted by the
Company or companies similarly situated or relating to the use of trade
secrets or proprietary information of others, and the continued
employment of the Company's employees and/or Related parties does not
subject the Company or the Purchaser to any liability for any such
violation.
(b) Each of the Company's present or former employees who
has had access to proprietary information of the Company has executed a
confidentiality and non-disclosure agreement. To the best of the
Company's knowledge and belief, no employee or former employee of the
Company is, or is now expected to be, in violation of the terms of the
aforesaid agreement or of any other obligation relating to the use of
confidential or proprietary information of the Company. Each of such
confidentiality and non-disclosure agreements is in full force and
effect.
(c) To the best of the Company's knowledge, no officer or
key employee of the Company has any present intent of terminating his
or her employment with the Company.
(d) The Schedule of Exceptions/Disclosures contains a
List of Key Employees of the Company.
3.21 BUSINESS OF THE COMPANY. The Company has no knowledge or belief
that (i) there is pending or threatened any claim or litigation against or
affecting the Company contesting its right to manufacture, sell or use any
product or service presently manufactured, sold or used or planned to be
manufactured, sold or used by the Company in connection with its operations,
(ii) there exists, or there is pending or planned, any statute, rule, law,
regulation, standard or code which would materially adversely affect the
condition, financial or otherwise, the operations or the prospects of the
Company, or (iii) there is any other fact which in the future may materially
adversely affect the Company's condition, financial or otherwise, operations or
prospects. The Company currently intends to engage in the business of developing
and marketing innovative gene analysis technology for use in the
characterization of genes in normal and diseased states.
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3.22 USE OF PROCEEDS. None of the transactions contemplated in this
Agreement (including, without limitation, the use of the proceeds from the sale
of the Note, the Conversion Shares and the Warrant Shares) will violate or
result in a violation of Section 7 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or any regulations issued pursuant thereto,
including, without limitation, Regulations G, T and X of the Board of Governors
of the Federal Reserve System, 12 C.F.R., Chapter 11. The Company does not own
or intend to carry or purchase any "margin security" within the meaning of said
Regulation G, including margin securities originally issued by it. None of the
proceeds from the sale of the Note, the Conversion Shares or the Warrant Shares
will be used to purchase or carry (or refinance any borrowing the proceeds of
which were used to purchase or carry) any "security" within the meaning of the
Exchange Act.
3.23 APPLICABILITY OF, AND COMPLIANCE WITH, OTHER LAWS.
(a) The Company does not have or make contributions to
any pension plans, defined benefit plans or defined contribution plans
for its employees which are subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), except as set forth on the
Schedule of Exceptions/Disclosures. With respect to such plans, if any,
listed on the Schedule of Exceptions/Disclosures, the Company is in
compliance with the applicable provisions of ERISA. The Company has not
incurred any unremedied accumulated funding deficiency within the
meaning of ERISA or any unsatisfied liability to the Pension Benefit
Guaranty Corporation established under ERISA in connection with any
employee pension plan established or maintained by the Company under
the jurisdiction of ERISA. No Reportable Event or Prohibited
Transaction (as defined in Section 4043 of ERISA) has occurred with
respect to any plan administered by the Company.
(b) The Company's employment practices and policies are
in material compliance with (i) all applicable laws of the United
States and each applicable jurisdiction relating to equal employment
opportunity, and any rules, regulations, administrative orders and
Executive Orders relating thereto; and (ii) the applicable terms,
relating to equal opportunity, of any contract, agreement or grant the
Company has with, from or relating (by way of subcontract or otherwise)
to any other contract, agreement or grant of, any federal or state
governmental unit. The Company has not been the subject of any charge
of employment discrimination made against it by the United States Equal
Employment Opportunity Commission or any other governmental unit, and
is not presently subject to any formal or informal proceedings before,
or investigations by, such Commission or governmental unit. To the
Company's knowledge, neither the Company nor any of its employees nor
any Related Parties are presently under investigation by any commission
or governmental agency for purposes of security clearance or otherwise.
(c) To the best of the Company's knowledge, neither the
Company nor any property owned or occupied by the Company is in
violation of any Federal or State Environmental Law of any sort or in
violation of any Federal or State "OSHA" Law, so-
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called. The Schedule of Exceptions/Disclosures contains a list of all
environmental permits held by the Company.
3.24 DISCLOSURE. Neither this Agreement, the Schedule of
Exceptions/Disclosures, the Balance Sheet, the Financial Statements, the other
Financing Documents nor any other written statement furnished to the Purchaser
or its counsel in connection with the offer and sale of the Note, contains any
untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements contained therein or herein not misleading in
the light of the circumstances under which they were made. There is no fact
which the Company has not disclosed to the Purchaser in writing that materially
adversely affects or, so far as the Company can now foresee, will materially
adversely affect the properties, business, prospects, profits or condition
(financial or otherwise) of the Company or the ability of the Company to perform
this Agreement and the other Financing Documents. The forecasts, projections,
estimates and other forward-looking matters furnished to the Purchaser were
prepared on the basis of the Company's best estimates. The Company does not have
any reason to believe that any assumptions or statements of opinion contained in
such forecasts, projections, estimates or other forward-looking matters are
unreasonable or false, and the Company believes that the Purchaser may
reasonably rely thereon.
3.25 WARRANTIES AND REPRESENTATIONS AT CLOSING. All of the foregoing
warranties and representations are true, complete and correct as of the date
hereof and will be true, complete and correct at the Closing Date as if made at
the time thereof and with respect thereto.
3.26 REPRESENTATIONS AND WARRANTIES IN 1992 AGREEMENT. All of the
representations and warranties made by the Company in the 1992 Agreement were
true, complete and correct as of the date of the 1992 Agreement and as of the
date of the closing of the transactions contemplated thereby.
SECTION 4: REPRESENTATIONS AND WARRANTIES OF PURCHASER
The Purchaser represents and warrants to the Company as follows:
4.1 EXPERIENCE. It is experienced in evaluating and investing in
companies such as the Company.
4.2 INVESTMENT. It is acquiring the Note and any Conversion Shares and
Warrant Shares which it may acquire for investment for its own account and not
with the view to, or for resale in connection with, any distribution thereof. It
understands that the Note has not been registered under the Securities Act by
reason of an exemption from the registration provisions of the Securities Act
which depends upon, among other things, the bona fide nature of its investment
intent as expressed herein.
4.3 RULE 144. It acknowledges that the Conversion Shares and the
Warrant Shares must be held indefinitely unless they are subsequently registered
under the Act or an exemption from such registration is available. It has been
advised or is aware of the provisions of Rule 144
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promulgated under the Securities Act, which permits limited resale of shares
purchased in a private placement subject to the satisfaction of certain
conditions (which conditions cannot presently be satisfied).
4.4 ACCESS TO DATA. It has had an opportunity to discuss the Company's
business, management and financial affairs with the Company's management, and it
has been furnished with copies of documents which it has requested.
4.5 ACCREDITED INVESTOR. It is an "accredited investor" within the
meaning of Regulation D promulgated under the Securities Act.
SECTION 5: CONDITIONS TO CLOSING OF PURCHASER
The obligation of the Purchaser to accept the Note in substitution for
the 1992 Note at the Closing is subject to the fulfillment to its satisfaction
on or prior to the Closing Date of each of the following conditions:
5.1 REPRESENTATIONS AND WARRANTIES CORRECT. The representations and
warranties made by the Company in Section 3 hereof shall be true and correct
when made, and shall be true and correct in all respects at the Closing as if
made at and as of the Closing and with respect thereto, after giving effect to
the sale and issuance of the Note at the Closing.
5.2 PERFORMANCE. All covenants, agreements and conditions contained in
this Agreement to be performed or complied with by the Company on or prior to
the Closing Date shall have been so performed or complied with in all respects.
5.3 COMPLIANCE AND SECRETARY'S CERTIFICATES. The Company shall have
executed and delivered to the Purchaser a certificate, substantially in the form
of Exhibit B to this Agreement, dated the Closing Date, certifying to the
fulfillment of the conditions specified in Sections 5.1 and 5.2 of this
Agreement and such other matters as the Purchaser may reasonably request, and
the Purchaser shall have received a certificate from the Secretary of the
Company, substantially in the form of Exhibit C to this Agreement, dated the
Closing Date, with respect to the matters therein set forth.
5.4 OPINION OF COMPANY COUNSEL. The Purchaser shall have received from
▇▇▇▇▇▇▇▇ & ▇▇▇▇, counsel to the Company, an opinion addressed to it, dated the
Closing Date, to the effect and in substantially the form set forth in Exhibit D
hereto.
5.5 LEGAL INVESTMENT. At the time of the Closing, the purchase of the
Note to be purchased by the Purchaser hereunder and of the Conversion Shares and
the Warrant Shares shall be legally permitted by all laws and regulations to
which it and the Company are subject.
5.6 QUALIFICATIONS. All authorizations, approvals, consents or permits
of any governmental authority , regulatory body or third party that are required
in connection with the lawful issuance and sale of the Note pursuant to this
Agreement, the conversion of the Note, the
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issuance of the Conversion Shares upon such conversion, the exercise of the
Warrant or the issuance of the Warrant Shares upon such exercise shall have
been duly obtained and shall be effective on and as of the Closing Date,
including, if necessary, permits from applicable state securities authorities,
qualifying the offer and sale of the Note.
5.7 PROCEEDINGS AND DOCUMENTS. All corporate and other proceedings
taken by the Company in connection with the transactions contemplated hereby and
all documents and instruments incident to such transactions shall be
satisfactory in substance and form to the Purchaser and special counsel for the
Purchaser.
5.8 COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT. The Company shall
have duly executed and delivered to the Purchaser an Amendment to Collateral
Assignment (the "Amendment to Collateral Assignment"), amending that certain
Collateral Assignment and Security Agreement dated June 15, 1992 between the
Company and the Purchaser (as amended, the "Collateral Assignment") and an
Amendment to Security Agreement (the "Amendment to Security Agreement"),
amending that certain Security Agreement dated June 15, 1992 between the Company
and the Purchaser (as amended, the "Security Agreement") to the effect and
substantially in the forms set forth in Exhibit E and Exhibit F to this
Agreement, respectively, and shall have executed such other documents and
instruments as may be necessary, including, but not limited to UCC-1 financing
statements, to perfect the security interest of the Purchaser in the collateral
specified in the Security Agreement and the Collateral Assignment, including the
Company's Listed Rights and Intellectual Property.
5.9 WARRANT. The Company shall have executed and delivered to the
Purchaser a letter in the form of Exhibit G to this Agreement, amending the
Warrant dated June 15, 1992, issued by the Company to the Purchaser (the
"Warrant").
5.10 GOOD STANDING CERTIFICATES. The Company shall have delivered to
the Purchaser a certificate of recent date from the Secretary of State of the
State of Delaware with respect to the Company's and each subsidiary's due
incorporation, good standing, legal corporate existence, due authorization to
conduct business and the payment of all franchise taxes, and, certificates from
the Secretary of State in each jurisdiction in which the Company or any
subsidiary is required to be qualified to do business with respect to the
Company's or such subsidiary's good standing and due authorization to conduct
business therein and payment of all qualification fees.
5.11 TAX MATTERS. The Company shall have delivered to the Purchaser tax
status letters from the Connecticut Department of Revenue Services with respect
to the corporation business tax and sales and use tax respecting the Company and
each subsidiary.
5.12 INSURANCE CERTIFICATES AND POLICIES. The Company shall have
delivered to the Purchaser a certificate or certificates of insurance
establishing the existence of hazard insurance and liability insurance as
required by Section 7.5, which insurance shall name the Purchaser as an
additional insured as its interest may appear, together with copies of such
insurance policies.
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5.13 NON-COMPETITION AND PROPRIETARY INFORMATION AGREEMENTS. All Key
Employees of the Company and of each subsidiary shall have entered into
non-competition agreements, and all employees of the Company shall have entered
into proprietary information and invention agreements, in each case satisfactory
to the Purchaser, copies of which shall have been delivered to the Purchaser.
5.14 NO ENVIRONMENTAL MATTERS PENDING. The Company shall have delivered
to the Purchaser an affidavit in form and substance acceptable to the Purchaser
certifying that there are no actions involving the Department of Environmental
Protection pending against the Company or against any property owned or occupied
by the Company and that the environmental condition of the property upon which
the Company conducts its business, and the Company's activities thereon with
respect to the storage and handling of hazardous materials is in material
compliance with all environmental laws.
5.15 OFFICERS' AND DIRECTORS' AGREEMENT. The Purchaser shall have
received an Officers' and Directors' Agreement to the effect and substantially
in the form of Exhibit H, executed by ▇▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇ and
▇▇. ▇▇▇▇▇ ▇▇▇▇▇.
5.16 CONFLICT OF INTEREST POLICY. The Company's Board of Directors
shall have adopted a conflict of interest policy applicable to officers and
directors of the Company, satisfactory in form and substance to the Purchaser,
and each scientific advisor to the Company shall have entered into an agreement
in form and substance satisfactory to the Purchaser, acknowledging and agreeing
to restrictions similar to those included in Section 4 of that certain letter
agreement dated July 5, 1995 between the Company and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (the
"▇▇▇▇▇▇▇▇ Letter").
SECTION 6: CONDITIONS TO CLOSING OF COMPANY
The Company's obligation to issue the Note to the Purchaser at the
Closing is subject to the fulfillment to its satisfaction on or prior to the
Closing Date of each of the following conditions:
6.1 REPRESENTATIONS. The representations made by the Purchaser pursuant
to Section 4 hereof shall be true and correct when made and shall be true and
correct on the Closing Date.
6.2 LEGAL INVESTMENT. At the time of the Closing, the conditions set
forth in Sections 5.5 and 5.6 shall have occurred and the issuance of the Note
to the Purchaser shall be legally permitted by all laws and regulations to which
the Purchaser and the Company are subject.
SECTION 7: COVENANTS OF THE COMPANY
The Company hereby covenants and agrees, that so long as the Purchaser
owns any Note, 25% of the Conversion Shares, the Warrant or 25% of the Warrant
Shares.
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7.1 BASIC FINANCIAL INFORMATION. The Company will furnish the following
reports to the Purchaser:
(a) As soon as practicable after the end of each fiscal
year of the Company, and in any event within ninety (90) days
thereafter, a consolidated (and consolidating) balance sheet of the
Company and its subsidiaries, if any, as at the end of such fiscal
year, and consolidated (and consolidating) statements of income and
source and application of funds of the Company and its subsidiaries, if
any, for such year, prepared in accordance with generally accepted
accounting principles consistently applied and setting forth in each
case in comparative form the figures for the previous fiscal year, all
in reasonable detail and performed (without scope limitations imposed
by the Company) by independent public accountants of recognized
standing selected by the Company and satisfactory to the Purchaser;
(b) Beginning with the first fiscal year in which
Company's annual revenues exceed five million dollars ($5,000,000) and
continuing thereafter, as soon as practicable after the end of each
fiscal year of the Company, and in any event within ninety (90) days
thereafter, a consolidated (and consolidating) balance sheet of the
Company and its subsidiaries, if any, as at the end of such fiscal
year, and consolidated (and consolidating) statements of income and
source and application of funds of the Company and its subsidiaries, if
any, for such year, prepared in accordance with generally accepted
accounting principles consistently applied and setting forth in each
case in comparative form the figures for the previous fiscal year, all
in reasonable detail and audited (without scope limitations imposed by
the Company) by independent public accountants of recognized standing
selected by the Company and satisfactory to the Purchaser;
(c) As soon as practicable after the end of the first,
second and third quarterly accounting periods in each fiscal year of
the Company, and in any event within forty-five (45) days thereafter, a
consolidated (and consolidating) balance sheet of the Company and its
subsidiaries, if any, as of the end of each such quarterly period, and
consolidated (and consolidating) statements of income and source and
application of funds of the Company and its subsidiaries, if any, for
such period and for the current fiscal year to date, prepared in
accordance with generally accepted accounting principles consistently
applied and setting forth in comparative form the figures for the
corresponding periods of the previous fiscal year, subject to changes
resulting from year-end adjustments or year-end audit adjustments, as
the case may be, and setting forth any events which could reasonably be
expected to have an adverse effect upon the Company's finances or the
results of its operations, all in reasonable detail and certified by
the principal financial or accounting officer of the Company;
(d) From the date the Company becomes subject to the
reporting requirements of the Exchange Act, and in lieu of the
financial information required pursuant to Sections 7.1(a), (b), and
(c) but within the time periods required for the furnishing thereof,
copies of its reports filed on Form 10-K, Form 10-Q, Form 8-K, or any
successor form or forms;
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(e) Each set of financial statements delivered to the
Purchaser pursuant to Section 7.1 will be accompanied by a certificate
of the President or Treasurer of the Company setting forth:
(i) Covenant Compliance - any information
required in order to establish whether the Company was in
compliance with the requirements of this Section 7 during the
period covered by the income statement then being furnished;
and
(ii) Event of Default - that the signer has
reviewed the relevant terms of this Agreement and has made, or
caused to be made, under his or her supervision, a review of
the transactions and conditions of the Company and its
subsidiaries, if any, from the beginning of the accounting
period covered by the income statements being delivered
therewith to the date of the certificate and that such review
has not disclosed the existence during such period of any
condition or event which constitutes a breach or default under
this Agreement or any of the other Financing Documents or, if
any such condition or event existed or exists, specifying the
nature and period of existence thereof and what action the
Company has taken or proposes to take with respect thereto.
7.2 ADDITIONAL INFORMATION AND RIGHTS. The Company will:
(a) Permit the Purchaser (or its designated
representative) to visit and inspect any of the properties of the
Company, including its books of account, and to discuss its affairs,
finances and accounts with the Company's officers and its independent
public accountants, all at such reasonable times and as often as any
such party may reasonably request;
(b) Deliver to the Purchaser the reports and data
described below:
(i) As soon as available, information and data
on any material adverse changes in or any event or condition
which materially adversely affects the business, operations or
plans of the Company;
(ii) Immediately upon becoming aware of any
condition or event which constitutes a breach of this
Agreement or any of the other Financing Documents, written
notice specifying the nature and period of existence thereof
and what action the Company is taking or proposes to take with
respect thereto; and
(iii) With reasonable promptness, such other
information and data with respect to the Company and its
subsidiaries as the Purchaser may from time to time reasonably
request;
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(c) Hold meetings of its Directors at least quarterly and
will not hold any meetings of its Directors on less than ten (10) days'
written notice and will permit the Purchaser to send a representative
(without voting rights) to each meeting of the Board of Directors of
the Company and all committees of such Board, except in emergencies, in
which case the Purchaser shall receive notice no less favorable than
any other outside director. The Company shall give the Purchaser notice
of each such meeting in the form and manner such notice is given to the
Company's directors. The Company will not permit its directors or
shareholders to conduct any material business by written consent
without giving at least ten (10) days' written notice to the Purchaser,
which notice shall contain an exact copy of the consent resolution
proposed to be adopted.
(d) The Company will, at the request of the Purchaser,
form an "Advisory Board" on terms satisfactory to the Purchaser (which
Advisory Board shall not have the powers of the Company's Board of
Directors), and elect and maintain thereon one or more nominees of the
Purchaser so long as the Purchaser shall so desire.
7.3 PROMPT PAYMENT OF TAXES, ETC. The Company will promptly pay and
discharge, or cause to be paid and discharged, when due and payable, unless
contested by the Company in good faith, all lawful taxes, assessments and
governmental charges or levies imposed upon the income, profits, property or
business of the Company or any subsidiary. In the event any such taxes,
assessment and governmental charges or levies are contested in good faith by the
Company, the Company shall notify the Purchaser in writing prior to the date on
which they are due and payable.
7.4 MAINTENANCE OF PROPERTIES AND LEASES. The Company will keep its
properties in good repair, working order and condition, and from time to time
make all needful and proper, or legally required, repairs, renewals,
replacements, additions and improvements thereto; and the Company and its
subsidiaries, if any, will at all times materially comply with each provision of
all leases to which any of them is a party or under which any of them occupies,
or has possession of, any property .
7.5 INSURANCE. The Company will keep its assets and those of its
subsidiaries which are of an insurable character insured by financially sound
and reputable insurers, which are licensed to provide such insurance in the
State of Connecticut, against loss or damage by fire, extended coverage and
explosion in amounts sufficient to prevent the Company or any subsidiary from
becoming a co-insurer and not in any event less than the greater of (a) the
outstanding principal amount of the Notes plus any other indebtedness of the
Company to the Purchaser and (b) the replacement value of the property insured.
The Company will maintain, with financially sound and reputable insurers, which
are licensed to provide such insurance in the State of Connecticut, insurance
against other hazards and risks and liability to persons and property to the
extent and in the manner customary for companies in similar businesses similarly
situated. All such policies of insurance shall be occurrence policies with "tail
coverage" so-called respecting all prior "claims made" policies, all in a form
satisfactory to the Purchaser and shall name the Purchaser as an additional
insured as its interest may appear. All such policies shall also contain a
provision requiring that the insurer give the Purchaser a minimum of thirty (30)
days' written notice prior
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to any change therein or cancellation thereof and a provision that the
interest of the Purchaser shall not be impaired or invalidated by any act or
neglect of the Company nor by the occupation by the premises on which the
property is located for purposes more hazardous than are permitted by the
policy. The Company shall give immediate written notice to the Purchaser and
to insurers of loss or damage to the property and shall promptly file proof
of loss with insurers.
7.6 ACCOUNTS AND RECORDS. The Company will keep true records and books
of account in which full, true and correct entries will be made of all dealings
or transactions in relation to its business and affairs in accordance with
Generally Accepted Accounting Principles applied on a consistent basis.
7.7 COMPLIANCE WITH REQUIREMENTS OF GOVERNMENTAL AUTHORITIES. The
Company shall duly observe and conform to all requirements of governmental
authorities relating to the conduct of its business or to its property or
assets. Without limiting the generality of the foregoing, the Company will:
(a) Comply with all minimum funding requirements
applicable to any pension plans, employee benefit plans or employee
contribution plans which are subject to ERISA or to the Internal
Revenue Code of 1986, as amended (the "Code"), and comply in all other
respects with the provisions of ERISA and the provisions of the Code
applicable to such plans; and
(b) Comply with all applicable laws of the United States
and of each applicable jurisdiction relating to equal employment
opportunity, any rules, regulations, administrative orders and
Executive Orders relating thereto and the applicable terms, relating to
equal employment opportunity, of any contract, agreement or grant the
Company has with, from or relating (by way of subcontract or otherwise)
to any other contract, agreement or grant of, any federal or state
governmental unit; and keep all records required to be kept, and file
all reports, affirmative action plans and forms required to be filed,
pursuant to any such applicable law or the terms of any such government
contract.
(c) So conduct its business that neither the Company nor
any property owned or occupied by the Company is in violation of any
Federal or State Environmental Law of any sort or in violation of any
Federal or State "OSHA" Law so-called.
7.8 MAINTENANCE OF CORPORATE EXISTENCE, ETC. The Company shall:
(a) Maintain in full force and effect its corporate
existence, rights, government approvals and franchises and all licenses
and all Listed Rights and other rights to use patents, processes,
licenses, trademarks, trade names or copyrights owned or possessed by
it; and
(b) Not transfer, assign or license any of its Listed
Rights or Intellectual Property now owned or hereafter acquired by it
without the written consent of the
-18-
Purchaser, which consent the Purchaser may withhold in its
discretion; PROVIDED, HOWEVER, that such consent shall not be
unreasonably withheld in the event the Company proposes to sublicense
the Technology under the license granted to the Company under the
Collateral Assignment to a joint venture or strategic partner on a
non-exclusive basis, provided: (i) the sublicense, including, but not
limited to, any proceeds or payments of royalties thereunder, is
subject to the Secured Party's first priority security interest in
the Technology, and the sublicensee has acknowledged such first
priority security interest in writing, and (ii) there exists no Event
of Default nor any event that with the passage of time or the giving
of notice or both would ripen into an Event of Default.
7.9 SALE/PURCHASE OF ASSETS; MERGER. Subject to Section 9 hereof, the
Company will not (without the written consent of the Purchaser, which consent
the Purchaser may withhold in its discretion):
(a) Sell or otherwise dispose of the capital stock in any
subsidiary or of all or a substantial part of the Company's assets or
business or of all or a substantial part of the assets or business of
any subsidiary (whether by sale of assets, exclusive license or
otherwise);
(b) Consolidate with or merge into or with any other
person or entity or permit any other person or entity to consolidate
with or merge into it (except that a 100% Subsidiary may consolidate
with or merge into the Company or another 100% Subsidiary) or a
controlling interest in the Company or any subsidiary is acquired by
one or more parties (through merger, consolidation or otherwise);
provided that the foregoing restriction does not apply to the merger of
another corporation into the Company, if:
(i) The Company is the surviving corporation and
more than 50% of the outstanding common stock of the surviving
corporation is owned by persons who prior to such merger owned
Common Stock of the Company;
(ii) After giving effect to the proposed merger
or consolidation the surviving corporation will be engaged in
substantially the same lines of business; and
(iii) Immediately after the consummation of the
transaction, and after giving effect thereto, no default under
this Agreement or any other Financing Document would exist.
7.10 AVAILABILITY OF STOCK FOR CONVERSION AND EXERCISE. The Company
will, from time to time, in accordance with the laws of the state of its
incorporation, increase the authorized amount of Common Stock if at any time the
number of shares of Common Stock remaining unissued and available for issuance
shall be insufficient to permit conversion in full of the Note (or the
unconverted portion thereof) and the exercise in full of the Warrant (or the
unexercised portion thereof).
-19-
7.11 CONFIDENTIALITY AND NON-COMPETITION AGREEMENTS; CONFLICT OF
INTEREST RESTRICTIONS.
(a) The Company will require all officers, department
heads and those performing similar functions, and all other persons now
or hereafter employed by the Company or a subsidiary who may be deemed
to be a "Key Employee" to execute a non-competition agreement, and all
employees, officers and consultants of the Company to execute a
proprietary information and non-disclosure agreement, in favor of the
Company and the Purchaser, all in form and substance satisfactory to
the Purchaser, in each case as a condition precedent to the employment
of such individuals and to induce the Purchaser to enter into this
Agreement, and in each case Purchaser shall under the terms thereof
have the right to enforce the same if the Company shall fail to do so
to the Purchaser's satisfaction.
(b) The Company will cause all technological
developments, inventions, discoveries or improvements made by employees
of the Company and its subsidiaries to be fully documented in notebooks
in accordance with the best prevailing professional standards, and
where possible and appropriate, cause all employees to file and
prosecute United States and foreign patent applications relating to and
protecting such developments.
(c) The Company will cause each scientific advisor to the
Company to enter into an agreement, agreeing to restrictions similar to
those included in Section 4 of the ▇▇▇▇▇▇▇▇ Letter.
7.12 TRANSACTIONS WITH AFFILIATES. The Company will not enter into any
transaction, including, without limitation, the purchase, sale or exchange of
property or the rendering of any service, with any Affiliate except in the
ordinary course of and pursuant to the reasonable requirements of the Company's
business and upon fair and reasonable terms no less favorable to the Company
than would obtain in a comparable arm's-length transaction with a person not an
Affiliate.
7.13 COMPLIANCE BY SUBSIDIARIES. The Company will cause any subsidiary
which it may now have and/or which it may organize or acquire in the future to
comply fully with all terms and provisions of Section 7 to the same extent as if
such subsidiary or subsidiaries were the "Company" herein.
7.14 MAINTENANCE OF CONNECTICUT PRESENCE. The Company shall not
relocate (as that term is defined in Section 32-5a of the Connecticut General
Statutes) outside of the State of Connecticut so long as the Purchaser owns any
Note, the Warrant, any Conversion Shares or any Warrant Shares. The Company will
maintain a "Connecticut Presence" so long as the Purchaser owns any Note. A
Connecticut Presence shall mean (a) maintaining the Company's principal place of
business (including its executive offices and officers) in the State of
Connecticut, (b) basing a majority of its employees and those of its
subsidiaries in the State of Connecticut, (c) conducting a majority of its
operations and those of its subsidiaries, including manufacturing
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activities conducted directly or through subcontractors and vendors, in the
State of Connecticut, and (d) maintaining the Company's and each subsidiary's
principal bank accounts in the State of Connecticut.
7.15 CONNECTICUT EMPLOYMENT. For so long as the Purchaser owns any
Note, 25% of the Conversion Shares, the Warrant or 25% of the Warrant Shares:
(a) The Company shall create jobs in the State of
Connecticut and shall use its best efforts to employ residents of
Connecticut in these jobs.
(b) The Company shall not relocate (as that term is
defined in Section 32-5a of the Connecticut General Statutes) within
the State of Connecticut without first obtaining the express written
consent of the Purchaser, which consent the Purchaser may withhold in
its discretion. If the Company relocates within the State of
Connecticut, it will offer employment at its new location to its
employees from the original location if such employment is available.
(c) The Company shall furnish to the Purchaser copies of
the quarterly reports filed by the Company and any of its subsidiaries
with the Connecticut Department of Labor and upon request, employment
records and such other personnel records to the extent permitted by law
as the Purchaser may reasonably request to verify the creation or
retention of Connecticut employment.
(d) The Company hereby authorizes the Purchaser to
examine, and will at any time at the request of the Purchaser provide
Purchaser with such additional authorization satisfactory to the
Connecticut Department of Labor as may be necessary to enable the
Purchaser to examine all records of said Department relating to the
Company and/or any of its subsidiaries.
7.16 EQUAL OPPORTUNITY. The Company agrees and warrants that it is an
equal opportunity employer and that it does not discriminate. The Company
further agrees and warrants that:
(a) The Company will not discriminate or permit
discrimination against any employee or applicant for employment because
of sex, sexual orientation, race, color, religious creed, age, martial
status, mental retardation, physical disability, national origin, or
ancestry. Such action shall include, but not be limited to, the
following: Employment upgrading, demotion or transfer; recruitment
advertising; lay-off or termination; rates of pay or other forms of
compensation; and selection for training, including apprenticeship.
(b) The Company agrees to take affirmative action to
insure that applicants with job-related qualifications are employed.
(c) The Company will, in its solicitation for employees,
state that it is an "affirmative action-equal opportunity employer."
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(d) The Company agrees to provide each labor union or
representative of workers with which the Company has a collective
bargaining agreement or other contract or understanding and each vendor
with which the Company has a contract or understanding, a notice to be
provided by the Commission of Human Rights and Opportunities (the
"CHRO") and to post copies of the notice in conspicuous places
available to employees and applicants for employment.
(e) The Company agrees to cooperate with the Purchaser,
the State of Connecticut and/or any of its agencies and the CHRO to
insure that the purpose of this equal opportunity clause is being
carried out.
(f) The Company agrees to comply with all relevant
regulations and orders issued by the CHRO, to provide the CHRO with
such information as it may request, and to permit the CHRO access to
pertinent books, records, and accounts concerning the contractor's
employment practices and procedures.
(g) The Company agrees to comply with all of the
requirements set out by Section 4a-60 of the Connecticut General
Statutes, as it may be amended.
(h) The Company agrees to post a notice of this
acceptance of the foregoing equal employment opportunity provisions at
its place of business, clearly visible, in such form as is satisfactory
to the Purchaser.
7.17 CERTAIN DISTRIBUTIONS/PAYMENTS. The Company will not and will not
permit any Subsidiary (except a 100% Subsidiary) to make any (i) declaration,
setting aside or payment of any dividend or other distribution in respect of any
of the Company's capital stock, or (ii) direct or indirect redemption, purchase
or other acquisition of any of such stock (or any warrant, option or other right
with respect to such stock) except in any case stock, warrants, options or other
rights owned by the Purchaser, or (iii) any repayment of Company debt held by
any Related Party or by any Affiliate or subsidiary debt held by any Related
Party or by any Affiliate.
7.18 EMPLOYEE STOCK PURCHASES. The Company will not issue (which term
shall, for the purpose of this Section 7.18, include without limitation the
issuance of any shares of, or the grant of any warrants, options or other rights
to purchase any shares of, or any commitment to issue) any shares of its capital
stock (which term shall, for the purpose of this Section 7.20, include without
limitation, securities convertible into capital stock, or rights to acquire
capital stock), to employees or officers or directors of the Company or any
subsidiary thereof, except the number of shares of Common Stock (as adjusted for
stock dividends, stock splits and similar corporate events) issued or reserved
for issuance pursuant to any option plan disclosed on the Schedule of
Exceptions/Disclosures and then only at prices no less than 50% of the Current
Market Value of such stock at the time of the grant of option, provided,
however, the Company may issue (as such term is used in this Section 7.18)
shares of its capital stock to ▇▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ at the prices and in the
amounts set forth on Section 7.18 of the Schedule of Exceptions/Disclosures
without violating this Agreement.
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7.19 SUBORDINATION AGREEMENT. The Company will comply with the terms of
that certain Officers' Subordination Agreement dated June 15, 1992 executed and
delivered in connection with the Loan, which Agreement remains in full force and
effect.
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SECTION 8: EVENTS OF DEFAULT
8.1 EVENTS OF DEFAULT. If any of the following events ("Events of
Default") shall occur and be continuing:
(a) The Company shall fail to pay any installment of
principal or interest on any of the Notes within ten (10) days after
the date such payment is due; or
(b) Any representation or warranty made by the Company in
this Agreement or the 1992 Agreement or by the Company or any Related
Party or Affiliate in any of the other Financing Documents or by the
Company (or by any Related Party or Affiliate) in any certificate,
instrument or written statement contemplated by or made or delivered
pursuant to or in connection with this Agreement, the 1992 Agreement,
any of the other Financing Documents, or any document executed in
connection with the 1992 Agreement shall prove to have been incorrect
when made; or
(c) The Company shall fail to perform or observe any
other term, covenant or agreement contained in this Agreement, any of
the Notes or in any of the other Financing Documents on its part to be
performed or observed and any such failure remains unremedied for 15
business days after such failure becomes known to an officer of the
Company or to a director of the Company or to a holder of 10% or more
of the common stock in the Company; or
(d) The Company or any subsidiary shall fail to pay any
indebtedness for borrowed money (other than as evidenced by the Notes)
owing by the Company or such subsidiary (as the case may be) or any
interest or premium thereon, when due (or, if permitted by the terms of
the relevant document, within any applicable grace period) whether such
indebtedness shall become due by scheduled maturity, by required
prepayment, by acceleration, by demand or otherwise, or shall fail to
perform any term, covenant or agreement on its part to be performed
under any agreement or instrument (other than this Agreement or the
Notes) evidencing or securing or relating to any indebtedness owing by
the Company or any subsidiary, as the case may be, when required to be
performed (or, if permitted by the terms of the relevant document,
within any applicable grace period) if the effect of such failure to
pay or perform is to accelerate, or to permit the holder or holders of
such indebtedness or the trustee or trustees under any such agreement
or instrument to accelerate, the maturity of such indebtedness; or
(e) The Company or any subsidiary shall be involved in
financial difficulties as evidenced (i) by its admitting in writing its
inability to pay its debts generally as they become due; (ii) by its
commencement of a voluntary case under Chapter 7 or 11 (or any similar
provision) of the United States Bankruptcy Code as from time to time in
effect, or by its authorizing, by appropriate proceedings of its Board
of Directors or other governing body, the commencement of such a
voluntary case; (iii) by its filing an answer or other pleading
admitting or failing to deny the material allegations of a petition
filed against it commencing an involuntary case under said Chapter 7 or
11 (or any similar
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provision) or seeking, consenting to or acquiescing in the relief
therein provided, or by its failing to controvert timely the material
allegations of any such petition; (iv) by the entry of an order for
relief in any involuntary case commenced under said Chapter 7 or 11 (or
any similar provision); (v) by its seeking relief as a debtor under any
applicable law, other than said Chapter 7 or 11 (or any similar
provision) of any jurisdiction relating to the liquidation or
reorganization of debtors or to the modification or alteration of the
rights of creditors, or by its consenting to or acquiescing in such
relief; (vi) by the entry of an order by a court of competent
jurisdiction (a) finding it to be bankrupt or insolvent, (b) ordering
or approving its liquidation, reorganization or any modification or
alteration of the rights of its creditors, or (c) assuming custody of
or appointing a receiver or other custodian for all or a substantial
part of its property; (vii) by its making an assignment for the benefit
of, or entering into a composition with, creditors, or appointing or
consenting to the appointment of a receiver or other custodian for all
or a substantial part of its property; or (viii) by it taking any
formal corporate action in furtherance of the foregoing; or
(f) Any judgment, writ, warrant of attachment or
execution or similar process shall be issued or levied against a
material portion of the property of the Company or any subsidiary and
such judgment, writ, or similar process shall not be released, vacated
or fully bonded within 60 days after its issue or levy; or
(g) Any undischarged final judgment in excess of $10,000
shall be entered against the Company, which judgment is not paid in
full within 60 days of its entry; or
(h) If any collateral securing any Note or the
performance of the other Financing Documents is substantially damaged
in any manner and is not covered by insurance on which Purchaser is a
loss payee and which is deemed adequate by the Purchaser; or
(i) If the United States of America, any state, or any
agency or subdivision thereof, imposes a tax, levy, or assessment on or
concerning any of the Notes, which the Company cannot lawfully or does
not pay when due; or
(j) If title to any portion or all of the collateral
securing the Notes or the performance of the other Financing Documents
becomes vested in other than the Company, or is encumbered by financing
without the Purchaser's prior written consent; or
(k) If any Related Party or Affiliate shall fail to
perform or observe any term, covenant or agreement contained in any of
the Financing Documents on the part of such Related Party or Affiliate
to be performed and any such failure remains unremedied for 15 business
days after such failure becomes known to an officer of the Company or
to a director of the Company or to a holder of 10% or more of the
common stock in the Company; or
(l) If any party to any of the non-competition agreements
or any of the proprietary information and non- disclosure agreements
referred to above shall fail to
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perform or observe any term covenant or agreement contained therein
and the Company shall fail to commence the enforcement thereof within
15 business days after such failure becomes known to an officer of the
Company or to a director of the company or to a holder of 10% or more
of the common stock in the Company and thereafter to proceed with such
enforcement in a diligent manner;
then, and in any such event, while such event shall be continuing, any holder
of any of the Notes then outstanding may, by notice to the Company, declare the
entire unpaid principal amount of the Notes and all interest accrued and unpaid
thereon to be forthwith due and payable, whereupon the Notes, all such accrued
interest and all such amounts shall become and be forthwith due and payable
(unless there shall have occurred an Event of Default under subsection 8.1(e)
in which case all such amounts shall automatically become due and payable),
without presentment, demand, protest or further notice of any kind, all of
which are hereby expressly waived by the Company; and the Company shall
forthwith pay to such holder the entire principal of and interest accrued on
such Notes. In the event the Company fails to maintain a Connecticut Presence
pursuant to Section 7.14, in addition to the other remedies available to the
Purchaser hereunder, at law or in equity, the Purchaser shall be entitled to
demand from the Company the entire principal of and interest accrued on such
Notes plus an amount calculated to yield a twenty-five percent (25%) annually
compounded rate of return from the Closing Date on the Investment, which
amounts shall be immediately due and payable and secured by the Financing
Documents.
8.2 ANNULMENT OF ACCELERATION OF NOTES. If a declaration is made
pursuant to Section 8.1 by any holder or holders of the Notes, then and in
every such case, the holders of greater than 50% in aggregate principal amount
of the Notes then outstanding (exclusive of Notes then directly or indirectly
owned by the Company, any of its subsidiaries, any Affiliates and/or any
Related Person) may, by written instrument filed with the Company, rescind and
annul such declaration, and the consequences thereof, provided that at the time
such declaration is annulled and rescinded:
(a) no judgment or decree has been entered for the
payment of any monies due pursuant to the Notes or this Agreement or
any other Financing Document;
(b) all arrears of interest upon all the Notes and all
other sums payable under the Notes and under this Agreement and under
any Financing Document (except any principal, interest or premium on
the Notes which has become due and payable by reason of such
declaration) shall have been duly paid; and
(c) each and every other default and Event of Default
shall have been waived pursuant to the Agreement or any other Financing
Document or otherwise made good or cured; and provided further that no
such rescission and annulment shall extend to or affect any subsequent
default or Event of Default or impair any right consequent thereon.
8.3 NOTICE. If an Event of Default occurs, the Company shall give
prompt notice thereof to the holders of all Notes.
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8.4 OTHER REMEDIES. Notwithstanding the provisions of Section 8.1
above, if any Event of Default shall occur, the holder or holders of greater
than 50% in principal amount of Notes then outstanding shall be entitled inter
alia to request and obtain injunctive relief and such other remedies as may be
appropriate to cure any outstanding Event of Default and/or to bar or forestall
further Events of Default, all of which remedies shall be cumulative and
non-exclusive, and the exercise of any rights, power or remedies shall not
preclude the right to exercise any other rights, powers or remedies available at
law or in equity.
SECTION 9: RIGHT TO PUT CONVERSION SHARES AND REQUIRE REPAYMENT OF THE NOTE
9.1 RIGHT TO PUT. The Purchaser shall have the right to sell to the
Company, and the Company agrees to purchase from the Purchaser, in one or more
transactions, the Conversion Shares, for the Put Price on the terms and
conditions herein set forth (the "Put").
9.2 METHOD OF EXERCISE. On the terms and conditions herein set forth,
the Purchaser may exercise its rights hereunder to sell all or any part of the
Conversion Shares by delivering to the Company a notice of Put (a "Notice of
Put") in the form attached hereto as Exhibit I.
9.3 TIME OF EXERCISE. The rights of the Purchaser to Put any or all of
the Conversion Shares shall become exercisable:
(a) At any time, and each time, upon the occurrence of,
or upon the taking of action by the Board of
Directors, stockholders, or officers of the Company
to authorize, any of the following events:
(i) the Company ceases to maintain a Connecticut
Presence; or
(ii) prior to the time the Company issues any of
its shares of capital stock pursuant to a
registration statement declared effective by
the Securities and Exchange Commission under
the Securities Act, the Company engages in
the activity or activities prohibited by the
terms of Section 7.9, whether or not
consented to by the Purchaser.
(b) At any time after seven (7) years from the date
hereof.
(c) At any time, in a single transaction or in a series
of related transactions, the Company disposes of any
securities of another entity or business enterprise
and receives in connection therewith gross proceeds
of $500,000 or more unless, prior to selling such
securities, the Company receives from the Purchaser
its written agreement that the proceeds of such
securities will not be subject to the provisions of
this Section 9.3(c) (which agreement the Purchaser
may give or withhold in its sole discretion).
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9.4 PUT CLOSING. The closing (the "Put Closing") of the purchase and
sale of the Conversion Shares pursuant to this Section 9 shall be held on the
date (the "Put Date") which is the thirtieth (30th) business day after delivery
of the Notice of Put. At the Put Closing, the Purchaser will deliver the
Conversion Shares to be purchased to the Company, and the Company will deliver
to the Purchaser the Put Price for the Conversion Shares made the subject of the
Notice of Put in cash, certified or bank check, or by wire transfer. If the
Purchaser shall have sold less than all of its Conversion Shares, the Company
shall deliver to the Purchaser a new stock certificate (as requested by the
Purchaser) evidencing that portion of the Conversion Shares not made the subject
of the Notice of Put.
9.5 RIGHT TO REQUIRE REPAYMENT OF NOTE. At any time when the
Purchaser's right to put any or all of the Conversion Shares shall become
exercisable, other than pursuant to Section 9.3(b), the Purchaser shall also
have the right, by written notice to the Company, to demand from the Company the
entire outstanding principal of, and interest accrued ]on, the Notes, plus an
amount calculated to yield a twenty-five percent (25%) annually compounded rate
of return from the Closing Date on the Investment, which amounts shall be
immediately due and payable and secured by the Financing Documents.
9.6 CONVERSION OF NOTE AND EXERCISE OF WARRANT. Without limiting the
Purchaser's rights to convert the Notes to Common Stock in accordance with the
terms of the Note, at any time when the Purchaser has the right to Put all or
any portion of the Conversion Shares or require repayment of the Note under
Section 9.5, the Purchaser shall have the opportunity and option of converting
the Note in connection therewith.
SECTION 10: DEFINITIONS
As used in this Agreement, capitalized terms shall have the respective
meanings set forth in this Agreement or set forth below or in the Section of
this Agreement referred to below:
AFFILIATE shall mean a person (other than a subsidiary) (1) which
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, the Company, (2) which
beneficially owns or holds 5% or more of any class of the voting stock of the
Company or (3) 5% or more of the voting stock (or in the case of a person which
is not a corporation, 5% or more of the equity interest) of which is
beneficially owned or held by the Company or one of its subsidiaries. The term
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a person, whether
through the ownership of voting securities, by contract or otherwise.
AGREEMENT shall mean this Financing Agreement.
AMENDMENT TO COLLATERAL ASSIGNMENT - Section 5.8.
AMENDMENT TO SECURITY AGREEMENT - Section 5.8.
BALANCE SHEET - Section 3.7.
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CHRO - Section 7.16.
CLOSING(S) - Section 2.1.
CLOSING DATE(S) - Section 2.1.
CODE shall mean the Internal Revenue Code of 1986, as amended.
COLLATERAL ASSIGNMENT - Section 5.8.
COMMON STOCK shall mean the common stock of the Company, par value
$.001.
COMPANY shall mean BIOS Laboratories, Inc., a Delaware corporation.
CONNECTICUT PRESENCE - Section 7.14.
CONTRACTS - Section 3.6.
CONVERSION SHARES - shall mean, at any time, shares of Common Stock (i)
issued and then outstanding upon conversion of the Note, (ii) issuable upon
conversion of the Note, and (iii) issued and then outstanding or issuable in
respect of the Common Stock referred to in clauses (i) and (ii) of this
definition upon any stock split, stock dividend, recapitalization or similar
event.
CURRENT MARKET VALUE - as to a share of Common Stock shall mean on any
date:
(a) the average of the daily closing prices for the
thirty (30) consecutive business days ending no more than fifteen (15)
business days before the day in question (as adjusted for any stock
dividend, split, combination or reclassification that took effect
during such 30 business day period) with the closing price for each day
being the last reported sales price regular way or, in case no such
reported sales took place on such day, the average of the last reported
bid and asked prices regular way, in either case on the principal
national securities exchange on which the Common Stock is listed or
admitted to trading (or if the Common Stock is not at the time listed
or admitted for trading on any such exchange, then such price as shall
be equal to the average of the last reported bid and asked prices, as
reported by the National Association of Securities Dealers Automated
Quotations System ("Nasdaq") on such day, or if, on any day in
question, the security shall not be quoted on Nasdaq, then such price
as shall be equal to the average of the last reported bid and asked
prices on such day as reported by The National Quotation Bureau
Incorporated or any similar reputable quotation and reporting service,
if such quotation is not reported by The National Quotation Bureau
Incorporated); or
(b) if the Common Stock is not traded in such manner that
the quotations referred to in clause (a) above are available for the
period required hereunder, the value determined in good faith by the
Board of Directors of the Company or, if such
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determination cannot be made or is reasonably objected to by the
Purchaser within twenty (20) days of its notification thereof, by a
nationally recognized independent investment banking firm (which has
no past or present relationship with the Company or the Purchaser)
selected in good faith by the Board of Directors of the Company, or if
such selection cannot be made or is reasonably objected to by the
Purchaser within twenty (20) days of its notification thereof, by a
nationally recognized independent investment banking firm selected by
the American Arbitration Association in Hartford, Connecticut in
accordance with its rules.
ERISA shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.
EVENT OF DEFAULT - Section 8.1.
EXCHANGE ACT shall mean the Securities Exchange Act of 1934, as amended
from time to time.
FINANCIAL STATEMENTS - Section 3.7.
FINANCING DOCUMENTS shall mean this Agreement, the Note, the Warrant,
the Security Agreement, the Collateral Assignment and all other documents set
forth in any of the other schedules and exhibits hereto (other than Exhibit D)
or otherwise executed and delivered in connection with the Loan Agreement, under
which, upon execution thereof, the Company or any Related Party shall have any
obligation to the Purchaser, all in the respective forms thereof as executed and
as amended from time to time.
INTELLECTUAL PROPERTY - Section 3.16.
INVESTMENT - shall mean an amount equal to $473,778.71.
KEY EMPLOYEES shall mean any employee who makes or has made a material
contribution to the Technology owned by the Company and/or to its marketing
and/or to its management.
LISTED RIGHTS - Section 3.16.
LOAN - Recitals.
1992 AGREEMENT - Recitals.
1992 NOTE - Recitals.
NOTE(S) - Section 1.1.
NOTICE OF PUT - Section 9.2.
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OFFICER'S AGREEMENT - Section 5.18.
PLAN - Section 3.1.
PURCHASER shall mean the party listed on Schedule I hereto.
PUT - Section 9.1. The term "Put," when used as a verb, shall also mean
the exercise of the Put.
PUT CLOSING - Section 9.4.
PUT DATE - Section 9.4.
PUT PRICE shall mean the greater of (a) the aggregate Current Market
Value of the Conversion Shares on the Put Date, and (b) an amount which yields a
return of the aggregate amount of the Investment plus an amount calculated to
yield a twenty five percent (25%) annually compounded rate of return from the
Closing Date on the Investment, unless, in either case, the Put is exercised for
less than all of the Conversion Shares, in which case the Put Price shall be
multiplied by a fraction, the numerator of which is the number of Conversion
Shares being Put and the denominator of which is the number of Conversion Shares
initially issued.
RELATED PARTY shall mean any officer, director, significant employee or
consultant of the Company or any holder of 5% or more of any class of capital
stock of the Company or any member of the immediate family of any such officer,
director, employee, consultant or shareholder or any entity controlled by any
such officer, director, employee, consultant or shareholder or a member of the
immediate family of any such officer, director, employee, consultant or
shareholder.
SCHEDULE OF EXCEPTIONS/DISCLOSURE shall mean Schedule II attached
hereto.
SCHEDULE OF PURCHASERS shall mean Schedule I attached hereto.
SECURITIES ACT shall mean the Securities Act of 1933, as amended from
time to time.
SECURITY AGREEMENT - Section 5.8.
SHARES - shall mean the Warrant Shares and the Conversion Shares,
collectively.
TECHNOLOGY - Section 3.16(c).
100% SUBSIDIARY shall mean an entity all of the capital stock or other
ownership interests in which are owned directly or indirectly by the Company.
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WARRANTS shall mean the rights to purchase shares of Common Stock under
the Warrant, with each share issuable under the Warrant being one share for
purposes of this definition.
WARRANT SHARES shall mean, at any time, shares of Common Stock (i)
issued and then outstanding upon exercise of the Warrant, (ii) issuable upon
exercise of the Warrant, and (iii) issued and then outstanding or issuable in
respect of the Common Stock referred to in clauses (i) and (ii) of this
definition upon any stock split, stock dividend, recapitalization or similar
event.
SECTION 11. REGISTRATION RIGHTS
11.1. CERTAIN DEFINITIONS. As used in this Section 11, the following
terms shall have the following respective meanings:
"Commission" shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
"Registrable Securities" shall mean the Shares less any Shares
theretofore sold to the public or in a private placement.
The terms "register," "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the effectiveness of such registration statement.
"Registration Expenses" shall mean all expenses incurred by the Company
in compliance with Section 11.2 hereof, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel for the Company, blue sky fees and expenses, and the expense of any
special audits incident to or required by any such registration (but excluding
the compensation of regular employees of the Company, which shall be paid in any
event by the Company).
"Selling Expenses" shall mean all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities, all fees and
disbursements of counsel for any Holder and any blue sky fees and expenses
excluded from the definition of "Registration Expenses."
"Holder" shall mean any holder of outstanding Conversion Shares or
Registrable Securities which (except for purposes of determining "Holders" under
Section 11.7 hereof) have not been sold to the public.
"Other Shareholders" shall mean holders of securities of the Company
who are entitled by contract with the Company or who are permitted by the
Company to have securities included in a registration of the Company's
securities.
11.2. REQUESTED REGISTRATION.
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(a) REQUEST FOR REGISTRATION. If at any time the Company
shall receive from any Holder a written request that the Company effect a
registration with respect to all or a part of the Registrable Securities, the
Company will:
(i) promptly give written notice of the proposed
registration to all other Holders; and
(ii) as soon as practicable, use its diligent
best efforts to effect such registration (including, without limitation, the
execution of an undertaking to file post-effective amendments, appropriate
qualification under applicable blue sky or other state securities laws and
appropriate compliance with applicable regulations issued under the Securities
Act) as may be so requested and as would permit or facilitate the sale and
distribution of all or such portion of such Registrable Securities as are
specified in such request, together with all or such portion of the Registrable
Securities of any Holder or Holders joining in such request as are specified in
a written request given by such Holder or Holders within thirty (30) days after
receipt of such written notice from the Company; provided that the Company shall
not be obligated to effect, or to take any action to effect, any such
registration pursuant to this Section 11.2:
(A) after the Company has effected
three (3) such registrations pursuant to this Section 11.2(a) and such
registrations have been declared or ordered effective and the sales of such
Registrable Securities shall have closed, provided, however, that any such
registration shall not be counted as a registration for purposes of this clause
(A) if the securities of directors, officers or Other Shareholders, if any,
included therein comprise greater than fifty percent (50%) of all securities
included in such registration;
(B) prior to the date the Company
issues any of its shares pursuant to a registration statement declared effective
by the Commission under the Securities Act; or
(C) if, in the opinion of counsel for
the Company, which opinion shall be reasonably satisfactory to the Holder, the
Holder has the right to sell the Registrable Securities immediately under Rule
144(k) of the Securities Act.
Subject to the foregoing clauses (A), (B) and (C), the Company shall file a
registration statement covering the Registrable Securities so requested to be
registered as soon as practicable after receipt of the request or requests of
the Holder.
The registration statement filed pursuant to the request of the Holder
may, subject to the provisions of Section 11.2(b) below, include other
securities of the Company which are held by officers or directors of the Company
or which are held by parties who, by virtue of agreements with the Company, are
entitled to include their securities in any such registration.
(b) UNDERWRITING. If the Holder intends to distribute the
Registrable Securities covered by its request by means of an underwriting, it
shall so advise the Company as a part of its request made pursuant to this
Section 11.2 and the Company shall include such
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information in the written notice referred to in Section 11.2(a)(i) above. The
right of any Holder to registration pursuant to this Section 11.2 shall be
conditioned upon such Holder's participation in such underwriting and the
inclusion of such Holder's Registrable Securities in the underwriting to the
extent provided herein.
If officers or directors of the Company holding other securities of the
Company shall request inclusion in any registration pursuant to this Section
11.2, or if Other Shareholders request such inclusion, the Holder shall, on
behalf of all Holders, offer to include the securities of such officers,
directors and Other Shareholders in the underwriting and may condition such
offer on their acceptance of all applicable provisions of this Section 11. The
Company shall (together with all Holders, officers, directors and Other
Shareholders proposing to distribute their securities through such underwriting)
enter into an underwriting agreement in customary form with the representative
of the underwriter or underwriters selected for such underwriting by the Holder
and reasonably acceptable to the Company.
Notwithstanding any other provision of this Section 11.2, if the
representative of the underwriter or underwriters advises the Holder in writing
that marketing factors make it advisable to impose a limitation on the number of
shares to be underwritten, the securities of the Company (other than Registrable
Securities) held by officers or directors of the Company and by Other
Shareholders shall be excluded from such registration to the extent so required
by such limitation and if a limitation of the number of shares is still
required, the Holder shall so advise all Holders of Registrable Securities whose
securities would otherwise be underwritten pursuant hereto, and the number of
shares of Registrable Securities that may be included in the registration and
underwriting shall be allocated among all such Holders in proportion, as nearly
as practicable, to the respective amounts of Registrable Securities held by such
persons at the time of filing the registration statement. No Registrable
Securities or any other securities excluded from the underwriting by reason of
the underwriter's marketing limitation shall be included in such registration.
If any Holder of Registrable Securities, officer, director or Other
Shareholder above disapproves of the terms of the underwriting, such party may
elect to withdraw therefrom by written notice to the Company, the underwriter
and the Holder. The securities so withdrawn shall also be withdrawn from
registration.
If the underwriter has not limited the number of Registrable Securities
or other securities to be underwritten, the Company may include its securities
for its own account in such registration if the underwriter so agrees and if the
number of Registrable Securities and other securities which would otherwise have
been included in such registration and underwriting will not thereby be limited.
11.3. COMPANY REGISTRATION.
(a) NOTICE OF REGISTRATION. If the Company shall
determine to register any of its securities either for its own account or the
account of a security holder or holders, other than a registration relating
solely to employee benefit plans, or a registration relating solely to a
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Commission Rule 145 transaction, or a registration on any registration form
which does not permit secondary sales, the Company will:
(i) promptly give to each Holder written notice
thereof (which shall include a list of the jurisdictions in which the Company
intends to attempt to qualify such securities under the applicable blue sky or
other state securities laws); and
(ii) include in such registration (and any
related qualification under blue sky laws or other compliance), and in any
underwriting involved therein, all the Registrable Securities specified in a
written request or requests, made by any Holder within fifteen (15) days after
receipt of the written notice from the Company described in clause (i) above,
subject to any limitations on the number of shares as set forth in Section
11.3(b) below.
(b) UNDERWRITING. If the registration of which the
Company gives notice is for a registered public offering involving an
underwriting, the Company shall so advise the Holders as part of the written
notice given pursuant to Section 11.3(a)(i). In such event, the right of any
Holder to registration pursuant to Section 11.3 shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute their securities through such underwriting shall
(together with the Company, directors and officers and the Other Shareholders
distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for underwriting by the Company.
Notwithstanding any other provision of this Section 11.3, if the
underwriter determines that marketing factors require a limitation on the number
of shares to be underwritten, the underwriter may (subject to the allocation
priority set forth below) exclude from such registration and underwriting some
or all of the Registrable Securities which would otherwise be underwritten
pursuant hereto. The Company shall so advise all holders of securities
requesting registration, and the number of shares of securities that are
entitled to be included in the registration and underwriting shall be allocated
in the following manner. The number of shares that may be included in the
registration and underwriting on behalf of such Holders, directors and officers
and Other Shareholders shall be allocated among such Holders, directors and
officers and Other Shareholders in proportion, as nearly as practicable, to the
respective amounts of Registrable Securities and other securities which they had
requested to be included in such registration at the time of filing the
registration statement.
If any Holder of Registrable Securities or any officer, director or
Other Shareholder disapproves of the terms of any such underwriting, it, he or
she may elect to withdraw therefrom by written notice to the Company and the
underwriter. Any Registrable Securities or other securities excluded or
withdrawn from such underwriting shall be withdrawn from such registration.
11.4. REGISTRATION RIGHTS. In the event that the Company grants
registration rights, including demand registration rights, to any other holder
of securities of the Company who owns
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or acquires, in the aggregate, less than One Million Dollars ($1,000,000) of
the Company's securities, the Company will promptly give to the Holder
written notice thereof and, if in the opinion of the Holder such registration
rights are more favorable than the registration rights provided under this
Agreement, the Holder shall so notify the Company within thirty (30) days of
receipt of the foregoing notice from the Company, whereupon such registration
rights shall automatically be deemed to be incorporated in this Agreement.
11.5. EXPENSES OF REGISTRATION. The Company shall bear all
Registration Expenses incurred in connection with any registration,
qualification and compliance by the Company pursuant to Section 11.2 hereof. All
Selling Expenses shall be borne by the holders of the securities so registered
pro rata on the basis of the number of their shares so registered.
11.6. REGISTRATION PROCEDURES. In the case of each registration
effected by the Company pursuant to this Section 11, the Company will keep each
Holder advised in writing as to the initiation of each registration and as to
the completion thereof. The Company will, at its expense:
(a) keep such registration effective for a period of one
hundred twenty (110) days or until the Holder or Holders have completed the
distribution described in the registration statement relating thereto, whichever
first occurs;
(b) furnish such number of prospectuses and other
documents incident thereto as a Holder from time to time may reasonably request;
and
(c) use its best efforts to register or qualify the
Registrable Securities under the securities laws or blue-sky laws of such
jurisdictions as any Holder may request; provided, however, that the Company
shall not be obligated to register or qualify such Registrable Securities in any
particular jurisdiction in which the Company would be required to execute a
general consent to service of process in order to effect such registration,
qualification or compliance, unless the Company is already subject to service in
such jurisdiction and except as may be required by the Securities Act or
applicable rules or regulations thereunder.
11.7. INDEMNIFICATION.
(a) The Company, with respect to each registration,
qualification and compliance effected pursuant to this Section 11, will
indemnify and hold harmless each Holder, each of its officers, directors,
partners, and agents, and each party controlling such Holder, and each
underwriter, if any, and each party who controls any underwriter, against all
claims, losses, damages and liabilities (or actions in respect thereof) arising
out of or based on any untrue statement (or alleged untrue statement) of a
material fact contained in any prospectus, offering circular or other document
(including any related registration statement, notification or the like)
incident to any such registration, qualification or compliance, or based on any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
any violation by the Company of the Securities Act or any rule or regulation
thereunder applicable to the Company and relating to action or
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inaction required of the Company in connection with any such registration,
qualification or compliance, and will reimburse each such Holder, each of its
officers, directors, partners, and agents, and each party controlling such
Holder, each such underwriter and each party who controls any such
underwriter, for any legal and any other expenses incurred in connection with
investigating or defending any such claim, loss, damage, liability or action,
provided that the Company will not be liable in any such case to the extent
that any such claim, loss, damage, liability or expense arises out of or is
based on any untrue statement or omission based solely upon written
information furnished to the Company by such Holder or underwriter, as the
case may be, and stated to be specifically for use in any prospectus,
offering circular or other document (including any related registration
statement, notification or the like) incident to any such registration,
qualification or compliance.
(b) Each Holder and Other Shareholder will, if
Registrable Securities held by it, him or her are included in the securities as
to which such registration, qualification or compliance is being effected,
indemnify and hold harmless the Company, each of its directors and officers and
each underwriter, if any, of the Company's securities covered by such a
registration statement, each party who controls the Company or such underwriter,
each other such Holder and Other Shareholder and each of their respective
officers, directors, partners, and agents, and each party controlling such
Holder or Other Shareholder, against all claims, losses, damages and liabilities
(or actions in respect thereof) arising out of or based on any untrue statement
(or alleged untrue statement) of a material fact contained in any such
registration statement, prospectus, offering circular or other document, or any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse the Company and such Holders, Other Shareholders, directors,
officers, partners, agents, parties, underwriters or control persons for any
legal or any other expenses reasonably incurred in connection with investigating
or defending any such claim, loss, damage, liability or action, in each case to
the extent, but only to the extent, that such untrue statement (or alleged
untrue statement) or omission (or alleged omission) is made in such registration
statement, prospectus, offering circular or other document solely in reliance
upon and in conformity with written information furnished to the Company by such
Holder or Other Shareholder and stated to be specifically for use in any
prospectus, offering circular or other document (including any related
registration statement, notification or the like) incident to any such
registration, qualification or compliance; provided, however, that the
obligations of such Holders and Other Shareholders hereunder shall be limited to
an amount equal to the proceeds to each such Holder or Other Shareholder of
securities sold as contemplated herein.
(c) Each party entitled to indemnification under this
Section 11.7 (the "Indemnified Party") shall give notice to the party required
to provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of any
such claim or any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or any
litigation resulting therefrom, shall be approved by the Indemnified Party
(whose approval shall not unreasonably be withheld), and the Indemnified Party
may participate in such defense at such party's expense (unless the Indemnified
Party shall have been advised by counsel that actual or potential differing
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interests or defenses exist or may exist between the Indemnifying Party and the
Indemnified Party, in which case such expense shall be paid by the Indemnifying
Party), and provided further that the failure of any Indemnified Party to give
notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Section 11. No Indemnifying Party, in the defense of any
such claim or litigation, shall, except with the consent of each Indemnified
Party, consent to entry of any judgment or enter into any settlement which does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
to such claim or litigation. Each Indemnified Party shall provide such
information as may be reasonably requested by an Indemnifying Party in order to
enable such Indemnifying Party to defend a claim as to which indemnity is
sought.
11.8. INFORMATION BY HOLDER. Each Holder of Registrable Securities,
and each Other Shareholder holding securities included in any registration,
shall furnish to the Company such information regarding such Holder or Other
Shareholder as the Company may reasonably request in writing and as shall be
reasonably required in connection with any registration, qualification or
compliance referred to in this Section 11.
11.9. RULE 144 REPORTING. With a view to making available the
benefits of certain rules and regulations of the Commission which may permit the
sale of the Registrable Securities to the public without registration, the
Company agrees to:
(a) Make and keep public information available, as those
terms are understood and defined in Rule 144 under the Securities Act, at all
times from and after ninety (90) days following the effective date of the first
registration under the Securities Act filed by the Company for an offering of
its securities to the general public;
(b) File with the Commission in a timely manner all
reports and other documents required of the Company under the Securities Act and
the Securities Exchange Act at any time after it has become subject to such
reporting requirements; and
(c) So long as the Holder owns any Registrable
Securities, furnish to the Holder forthwith upon request a written statement by
the Company as to its compliance with the reporting requirements of Rule 144 (at
any time from and after ninety (90) days following the effective date of the
first registration statement in connection with an offering of its Securities to
the general public), and of the Securities Act and the Exchange Act (at any time
after it has become subject to such reporting requirements), a copy of the most
recent annual or quarterly report of the Company, and such other reports and
documents so filed as the Holder may reasonably request in availing itself of
any rule or regulation of the Commission allowing the Holder to sell any such
securities without registration.
SECTION 12: MISCELLANEOUS
12.1 GOVERNING LAW. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Connecticut.
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12.2 SURVIVAL. The representations, warranties, covenants and
agreements made herein shall survive the Closing and any investigation made by
the Purchaser in the manner set forth herein.
12.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto; provided, however, that the Company may not assign its rights
hereunder.
12.4 ENTIRE AGREEMENT; AMENDMENT. This Agreement (including the
Schedules and Exhibits hereto) and the other documents delivered pursuant hereto
constitute the full and entire understanding and agreement between the parties
with regard to the subjects hereof and thereof. Except as otherwise expressly
provided herein, neither this Agreement nor any term hereof may be amended,
waived, discharged or terminated, except by a written instrument signed by the
Company and the holders of sixty-six and two thirds percent (66 2/3%) or more of
the aggregate principal amount of the Notes, but in no event shall this Section
12.4 be amended or the obligation of the Purchaser hereunder increased, except
upon the written consent of the Purchaser.
12.5 NOTICES, ETC.
(a) All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by
first-class, registered or certified mail, postage prepaid, or
delivered either by hand or by messenger, or sent via telex,
telecopier, computer mail or other electronic means if confirmed by
telephone, addressed (a) if to the Purchaser, as indicated on the
Schedule of Purchasers attached hereto, or at such other address as the
Purchaser shall have furnished to the Company in writing, or (b) if to
any other holder of any Note at such address as such holder shall have
furnished to the Company in writing, or, until any such holder so
furnishes an address to the Company, then to and at the address of the
last holder thereof who has so furnished an address to the Company, or
(c) if to the Company, at ▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇
▇▇▇▇▇, or at such other address as the Company shall have furnished to
the Purchaser and each such other holder in writing.
(b) Any notice or other communications so addressed and
mailed, postage prepaid, by registered or certified mail (in each case,
with return receipt requested) shall be deemed to be given when so
mailed. Any notice so addressed and otherwise delivered shall be deemed
to be given when actually received by the addressee.
12.6 DELAYS OR OMISSIONS. No delay or omission to exercise any
right, power or remedy accruing to any holder of any Note or Shares, upon any
breach or default of the Company under this Agreement or any of the other
Financing Documents, shall impair any such right, power or remedy of such holder
nor shall it be construed to be a waiver of any such breach or default, or an
acquiescence therein, or of or in any similar breach or default thereafter
occurring; nor shall any waiver of any single breach or default be deemed a
waiver of any other breach or default
- 39 -
theretofore or thereafter occurring. Any waiver, permit, consent or approval
of any kind or character on the part of any holder of any breach or default
under this Agreement, or any waiver on the part of any holder of any
provisions or conditions of this Agreement must be made in writing and shall
be effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement or any of the other Financing Documents
or by law or otherwise afforded to any holder, shall be cumulative and not
alternative.
12.7 SEPARABILITY. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
12.8 AGENT'S FEES AND SERVICES. The Company represents and warrants
that neither it nor any subsidiary has retained any finder or broker or other
person or firm in connection with the transactions contemplated by this
Agreement. The Company accepts sole responsibility for and agrees to pay all
agent's fees to any broker, finder or other person or firm claiming the right to
receive compensation of any sort in connection with the transactions
contemplated herein. In addition, the Company hereby agrees to indemnify and to
hold the Purchaser harmless of and from any liability for any commission or
compensation in the nature of an agent's fee to any broker, finder or other
person or firm (and the costs and expenses of defending against such liability
or asserted liability) claiming the right to receive compensation of any sort
arising from any act by the Company or any of its employees or representatives.
12.9 LEGAL FEES AND EXPENSES. The Company shall bear its own
expenses and legal fees incurred on its behalf with respect to this Agreement
and the transactions contemplated hereby, whether or not a closing takes place.
On the Closing Date (or if no closing shall take place, within thirty (30) days
of receiving any statement or invoice therefor), the Company will pay the
reasonable legal fees and out-of-pocket expenses of the Purchaser and special
counsel to the Purchaser with respect to this Agreement and the transactions
contemplated hereby. The Company shall also pay the reasonable legal fees and
the fees of experts and consultants engaged by the Purchaser incurred with
respect to the enforcement of any of the Financing Documents and/or with respect
to responding to any request made by the Company for the consent of the
Purchasers to any action that the Company wishes to take that is either barred
under terms of any Financing Document or requires the consent of the Purchaser
therefor.
12.10 TRIAL BY JURY. THE COMPANY HEREBY WAIVES ITS RIGHT TO CLAIM A
TRIAL BY JURY WITH RESPECT TO ANY ACTION BY OR AGAINST PURCHASER ARISING
HEREUNDER.
12.11 WAIVER. THE COMPANY ACKNOWLEDGES THAT THE TRANSACTION OF WHICH
THIS AGREEMENT IS A PART IS A COMMERCIAL TRANSACTION, AND TO THE EXTENT ALLOWED
UNDER CONNECTICUT GENERAL STATUTES SECTION 52-278a TO 52-278g INCLUSIVE, OR BY
ANY OTHER APPLICABLE LAW, STATE OR FEDERAL, HEREBY WAIVES ITS RIGHTS TO NOTICE
AND HEARING WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH ANY PURCHASER, AND/OR
THE SUCCESSORS OR ASSIGNS OF ANY PURCHASER MAY DESIRE TO USE.
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12.12 TITLES AND SUBTITLES. The titles of the sections and subsections
of this Agreement are for convenience or reference only and are not to be
considered in construing this Agreement.
12.13 COUNTERPARTS. This Agreement may be executed in counterparts,
each of which when so executed and delivered shall constitute a complete and
original instrument but all of which together shall constitute one and the same
agreement, and it shall not be necessary when making proof of this Agreement or
any counterpart thereof to account for any other counterpart.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered by their proper and duly authorized officers as of the
day and year first written above.
BIOS LABORATORIES, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Title Vice President
--------------------------------
CONNECTICUT INNOVATIONS,
INCORPORATED
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Title President and Executive Director
--------------------------------
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SCHEDULE I
SCHEDULE OF PURCHASERS
NAME AND ADDRESS
Connecticut Innovations,
Incorporated
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Executive Director
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EXHIBIT I
NOTICE OF PUT
1. In accordance with a Financing Agreement (the "Agreement") dated as of
August , 1996 between the undersigned (the "Holder") and BIOS
Laboratories, Inc. (the "Company"), the undersigned hereby exercises
its right to sell, and does hereby sell upon receipt of the Put Price,
_______________________ (__________) Shares.
2. Attached hereto is/are certificate number(s) _____ representing _____
Shares held by the Holder, which certificate(s) is/are either duly
endorsed in favor of the Company or accompanied by a separate stock
power in favor of the Company.
3. The Put Price is to be paid in the manner set forth in the Agreement.
4. All capitalized terms used herein and not otherwise defined herein
shall have the respective meanings assigned to them in the Agreement.
5. If this Notice of Put does not relate to all Shares held by the Holder,
the name in which a new certificate is to be issued for the shares of
Common Stock not covered hereby is:
6. Other Instructions:
CONNECTICUT INNOVATIONS,
INCORPORATED
By:
--------------------------------------
Title:
-----------------------------------
Dated:
-----------------------------------