EXHIBIT 2
December 30, 1996
To each of the Original Holders
listed on the signature
pages hereto
Dear Sirs:
This agreement is made in connection with the Agreement and Plan of
Merger, dated as of October 11, 1996 (the "Merger Agreement") by and between
Strategic Diagnostics Inc., a Delaware corporation ("SDI") and EnSys
Environmental Products, Inc., a Delaware corporation (the "Company"), pursuant
to which SDI shall be merged with and into the Company in accordance with the
applicable provisions of the Delaware General Corporation Law and the terms of
the Merger Agreement. The merger consideration received by the Original Holders
(as hereinafter defined) includes, common stock, par value $.01, of the Company
(the "Common Stock"), Series A Convertible Preferred Stock (the "Preferred
Stock"), par value $.01, of the Company that is convertible into shares of
Common Stock, and warrants (the "Warrants") to purchase shares of Common Stock.
The Company covenants and agrees with each of you (the "Original Holders") as
follows:
1. Certain Definitions. As used in this Agreement, 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.
"Common Stock" shall mean the Common Stock, $0.01 par value, of
the Company, as constituted as of the date of this Agreement.
"Conversion Shares" shall mean shares of Common Stock issued upon
conversion of the Preferred Shares, together with any shares of Common Stock
issued on or with respect to other Conversion Shares by way of a stock split,
stock dividend or the like.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Xxxxxx-Xxxxx Shares" shall mean 1,308,724 shares of Common Stock
issued pursuant to the Merger Agreement to The Xxxxxx-Xxxxx Corporation.
"Preferred Shares" shall mean an aggregate of 2,164,362 shares of
Preferred Stock issued pursuant to the Merger Agreement to DSV Partners IV,
Edison Venture Fund II, L.P. and Edison Venture Fund II-Pa, L.P.
"Registration Expenses" shall mean the expenses so described in
Section 8.
"Restricted Stock" shall mean the Conversion Shares, Xxxxxx-Xxxxx
Shares, and Warrant Shares, excluding Conversion Shares, Xxxxxx-Xxxxx Shares,
and Warrant Shares which (a) have been registered under the Securities Act
pursuant to an effective registration statement filed thereunder and disposed of
in accordance with the registration statement covering them or (b) are eligible
for public sale without limitation as to amount pursuant to Rule 144 or Rule 145
under the Securities Act.
"Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Selling Expenses" shall mean the expenses so described in
Section 8.
"Transfer" shall include any disposition of any Preferred Shares,
Xxxxxx-Xxxxx Shares, Conversion Shares and Warrant Shares or of any interest
therein which would constitute a sale thereof within the meaning of the
Securities Act.
"Warrant Shares" shall mean shares of Common Stock issued upon
exercise of the Warrants, together with any shares of Common Stock issued on or
with respect to other Warrant Shares by way of stock split, stock dividend or
the like.
2. Restrictive Legend. The Preferred Shares, Xxxxxx-Xxxxx Shares,
Conversion Shares and Warrant Shares shall not be transferable, except upon the
conditions specified in Sections 2 and 3 hereof, which conditions are intended
to ensure compliance with the provisions of the Securities Act in respect of the
Transfer thereof. Each certificate representing Preferred Shares, Xxxxxx-Xxxxx
Shares, Conversion Shares or Warrant Shares shall, except as otherwise provided
in this Section 2 or in Section 3, be stamped or otherwise imprinted with a
legend substantially in the following form:
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"THIS SECURITY HAS NOT BEEN REGISTERED FOR SALE UNDER THE SECURITIES
ACT OF 1933 AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT
IN COMPLIANCE WITH THAT CERTAIN REGISTRATION RIGHTS AGREEMENT, DATED
DECEMBER 30, 1996 AMONG THE COMPANY AND THE SIGNATORIES THERETO AND
THE SECURITIES ACT OF 1933, AS AMENDED."
3. Notice of Proposed Transfer. Prior to any proposed Transfer of
any Preferred Shares, Xxxxxx-Xxxxx Shares, Conversion Shares or Warrant Shares
(other than under the circumstances described in Sections 4 or 5), the holder
thereof shall give written notice to the Company of its intention to effect such
Transfer. Each such notice shall describe the manner of the proposed Transfer
and, if requested by the Company, shall be accompanied by an opinion of counsel
satisfactory to the Company to the effect that the proposed Transfer may be
effected without registration under the Securities Act, whereupon the holder of
such stock shall be entitled to Transfer such stock in accordance with the terms
of its notice; provided, however, that no such opinion of counsel shall be
required for a Transfer to one or more partners of an Original Holder (in the
case of an Original Holder that is a partnership) or to an affiliated
corporation of an Original Holder (in the case of an Original Holder that is a
corporation), if, with respect to such Transfer, the transferee agrees in
writing to be subject to the terms of Sections 2, 3 and 10 hereof, to the same
extent as if such transferee were originally a signatory to this Agreement.
Each certificate for Preferred Shares, Xxxxxx-Xxxxx Shares, Conversion Shares or
Warrant Shares transferred as above provided shall bear the legend set forth in
Section 2, except that such certificate shall not bear such legend if (i) such
Transfer is in accordance with the provisions of Rule 144 (or any other rule
permitting public sale without registration under the Securities Act) or (ii)
the opinion of counsel referred to above is to the further effect that the
transferee and any subsequent transferee (other than an affiliate of the
Company) would be entitled to Transfer such securities in a public sale without
registration under the Securities Act. The restrictions provided for in this
Section 3 shall not apply to securities which are not required to bear the
legend prescribed by Section 2 in accordance with the provisions of that
Section.
4. Required Registration. (a) At any time after the date which is
six (6) months from the date of this Agreement, any two (2) of the three (3)
holders of Restricted Stock acting together as a group may request on two (2)
separate occasions the Company to register under the Securities Act all or any
portion of the shares of Restricted Stock held by such requesting holders for
sale in the manner specified in such notice, provided that the shares of
Restricted Stock for which registration has been
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requested shall constitute at least the lesser of (i) 50% of the total shares
of Restricted Stock originally issued to such holders, or (ii) the remaining
shares of Restricted Stock held by such holders, but in any event not less
than 1,500,000 shares of Restricted Stock. For purposes of this Section 4
and Sections 5, 12(a) and 12(d), the term "Restricted Stock" shall be deemed
to include the number of shares of Restricted Stock which would be issuable
to a holder of Preferred Shares upon conversion of all shares of Preferred
Stock held by such holder at such time and the number of shares of Restricted
Stock which would be issuable to a holder of Warrants upon exercise of all
Warrants held by such holder at such time, provided, however, that the only
securities which the Company shall be required to register pursuant hereto
shall be shares of Common Stock, and provided, further, however, that, in any
underwritten public offering contemplated by this Section 4 or Section 5, the
holders of Preferred Shares and Warrants shall be entitled to sell such
Preferred Shares and Warrants to the underwriters for conversion or exercise,
respectively, and sale of the shares of Common Stock issued upon conversion
thereof. Notwithstanding anything to the contrary contained herein, no
request may be made under this Section 4 within 180 days after the effective
date of a registration statement filed by the Company covering a firm
commitment underwritten public offering in which the holders of Restricted
Stock shall have been entitled to join pursuant to Section 5 and in which
there shall have been effectively registered at least fifty percent (50%) of
the shares of Restricted Stock as to which registration shall have been
requested.
(b) Following receipt of any notice under this Section 4, the
Company shall immediately notify all holders of Restricted Stock from whom
notice has not been received and shall use all reasonable efforts to register
under the Securities Act, for public sale in accordance with the method of
disposition specified in such notice from requesting holders, the number of
shares of Restricted Stock specified in such notice (and in all notices received
by the Company from other holders within 30 days after the giving of such notice
by the Company). If such method of disposition shall be an underwritten public
offering, the Company may designate the managing underwriter of such offering,
subject to the approval of the holders of a majority of the shares of Restricted
Stock to be sold in such offering, which approval shall not be unreasonably
withheld, conditioned or delayed. The Company shall be obligated to register
Restricted Stock pursuant to this Section 4 on two occasions only, provided,
however, that such obligation shall be deemed satisfied only when a registration
statement covering at least the lesser of (i) 50% of the total shares of
Restricted Stock originally issued or (ii) 75% of the shares of Restricted Stock
specified in notices
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received as aforesaid, for sale in accordance with the method of disposition
specified by the requesting holders, shall have become effective; provided,
further, however, that any registration proceeding begun pursuant to this
Section 4 which is subsequently withdrawn at the request of the holders of a
majority of the shares of Restricted Stock requested to be registered shall
count toward such two registration statements which the holders of the shares
of Restricted Stock have the right to cause the Company to effect pursuant to
this Section 4.
(c) The Company shall be entitled to include in any registration
statement referred to in this Section 4, for sale in accordance with the method
of disposition specified by the requesting holders, shares of Common Stock to be
sold by the Company for its own account, or any issued and outstanding shares of
Common Stock to be sold by others except as and to the extent that, in the
opinion of the managing underwriter (if such method of disposition shall be an
underwritten public offering), such inclusion would adversely affect the
marketing of the Restricted Stock to be sold.
5. Incidental Registration. If the Company at any time (other than
pursuant to Section 4) proposes to register any of its securities under the
Securities Act for sale to the public, whether for its own account or for the
account of other security holders or both (except with respect to registration
statements on Forms S-4 or another form not available for registering the
Restricted Stock for sale to the public), each such time it will give written
notice to all holders of outstanding Restricted Stock of its intention so to do.
Upon the written request of any such holder received by the Company within 30
days after the giving of any such notice by the Company, to register any of its
Restricted Stock (which request shall state the intended method of disposition
thereof), the Company will use all commercially reasonable efforts (subject to
the rights of any holders of securities of the Company, other than the Company,
included in such registration) to cause the Restricted Stock as to which
registration shall have been so requested to be included in the securities to be
covered by the registration statement proposed to be filed by the Company, all
to the extent requisite to permit the sale or other disposition by the holder
(in accordance with its written request) of such Restricted Stock so registered.
In the event that any registration pursuant to this Section 5 shall be, in whole
or in part, an underwritten public offering of Common Stock, the number of
shares of Restricted Stock as a group to be included in such an underwriting may
be reduced (pro rata among the holders of Restricted Stock based upon the number
of shares of Restricted Stock owned by such holders) if and to the extent that
the managing underwriter shall be of the opinion that such inclusion would
adversely affect the
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marketing of the securities to be sold by the Company or other holder of
securities of the Company. Notwithstanding the foregoing provisions, the
Company may withdraw any registration statement referred to in this Section 5
without thereby incurring any liability to the holders of Restricted Stock.
6. Holdback Agreement. If the Company at any time shall register
shares of Common Stock under the Securities Act (including any registration
pursuant to Sections 4 and 5) for sale to the public, the Original Holders shall
not sell publicly, make any short sale of, grant an option for the purchase of,
or otherwise dispose of, any shares of Restricted Stock (other than those shares
of Common Stock included in such registration pursuant to Sections 4 or 5)
without the prior written consent of the Company for a period designated by the
Company in writing to the holders of shares of Restricted Stock, which period
shall not begin more than 10 days prior to the effectiveness of the registration
statement pursuant to which such public offer will be made and shall not last
more than 180 days after the effective date of such registration statement.
7. Registration Procedures. If and whenever the Company is required
by the provisions of Sections 4 or 5 to use all reasonable efforts or all
commercially reasonable efforts to effect the registration of any shares of
Restricted Stock under the Securities Act, the Company will, as expeditiously as
possible:
(a) prepare and file with the Commission a registration
statement on Form S-1 or Form S-3 if available with respect to such securities
and use all reasonable efforts to cause such registration statement to become
and remain effective for the period of the distribution contemplated thereby
(determined as hereinafter provided) (subject, in the case of any Incidental
Registration, to the rights of the Company to abandon any such registration as
set forth in Section 5);
(b) with respect to any registration pursuant to Section 4,
prepare and file with the Commission such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective for the period specified
above and comply with the provisions of the Securities Act with respect to the
disposition of all Restricted Stock covered by such registration statement in
accordance with the sellers' intended method of disposition set forth in such
registration statement for such period;
(c) furnish to each seller of Restricted Stock and to each
underwriter such number of copies of the registration
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statement and the prospectus included therein (including each preliminary
prospectus) as such persons reasonably may request in order to facilitate the
public sale or other disposition of the Restricted Stock covered by such
registration statement;
(d) use all reasonable efforts to register or qualify the
Restricted Stock covered by such registration statement under the securities or
"blue sky" laws of such jurisdictions as the sellers of Restricted Stock or, in
the case of an underwritten public offering, the managing underwriter reasonably
shall request, provided, however, that the Company shall not for any such
purpose be required to qualify generally to transact business as a foreign
corporation in any jurisdiction where it is not so qualified, to consent to
general service of process in any such jurisdiction or submit to liability for
state or local taxes where it is not otherwise liable for such taxes;
(e) use all reasonable efforts to list the Restricted Stock
covered by such registration statement with any securities exchange on which the
Common Stock of the Company is then listed;
(f) immediately notify each seller of Restricted Stock and each
underwriter under such registration statement, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, of the
happening of any event of which the Company has knowledge as a result of which
the prospectus contained in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing;
(g) if the offering is underwritten and at the request of any
seller of Restricted Stock, use all reasonable efforts to furnish on the date
that Restricted Stock is delivered to the underwriters for sale pursuant to such
registration: (i) an opinion, dated such date, of the counsel representing the
Company for the purposes of such registration, in form and substance as is
customarily given to underwriters in an underwritten public offering, addressed
to the underwriters, if any, and to the seller or sellers making such request;
and (ii) at the request of either the underwriters or sellers of Restricted
Stock, a letter dated such date from the independent public accountants retained
by the Company, addressed to the underwriters and to such seller, stating that
they are independent public accountants within the meaning of the Securities Act
and that, in the opinion of such accountants, the financial statements of the
Company included in the registration statement or the prospectus, or any
amendment or supplement
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thereof, comply as to form in all material respects with the applicable
accounting requirements of the Securities Act, and such letter shall
additionally cover such other financial matters (including information as to
the period ending no more than five business days prior to the date of such
letter) with respect to such registration as such underwriters reasonably may
request; and
(h) make reasonably available for inspection by each seller of
Restricted Stock, any underwriter participating in any distribution pursuant to
such registration statement, and any attorney, accountant or other agent
retained by such seller or underwriter, all financial and other records,
pertinent corporate documents and properties of the Company, and use all
reasonable efforts to cause the Company's officers, directors and employees to
supply all information reasonably requested by any such seller, underwriter,
attorney, accountant or agent in connection with such registration statement, in
each case as and to the extent necessary to permit the sellers to conduct a
reasonable investigation within the meaning of the Securities Act. To minimize
disruption and expense to the Company during the course of the registration
process, the sellers will act through a single law firm and a single accounting
firm and will enter into confidentiality agreements with the Company in form and
substance reasonably satisfactory to the Company and the sellers prior to
receiving any confidential or proprietary information of the Company.
For purposes of Section 7(a) and 7(b) and of Section 4(c), the period
of distribution of Restricted Stock in a firm commitment underwritten public
offering shall be deemed to extend until each underwriter has completed the
distribution of all securities purchased by it, and the period of distribution
of Restricted Stock in any other registration shall be deemed to extend until
the earlier of the sale of all Restricted Stock covered thereby, or nine (9)
months after the effective date thereof.
In connection with each registration hereunder, the sellers of
Restricted Stock will furnish to the Company in writing such information with
respect to themselves and the proposed distribution by them as reasonably shall
be necessary in order to assure compliance with federal and applicable state
securities laws.
In connection with each registration pursuant to Sections 4 or 5
covering an underwritten public offering, the Company and each seller agree to
enter into a written agreement with the managing underwriter selected in the
manner herein provided in such form and containing such provisions as are
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customary in the securities business for such an arrangement between such
underwriter and companies of the Company's size and investment stature.
8. Expenses. All expenses (both third party and internal) incurred
by the Company in complying with Sections 4 and 5, including, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel and independent public accountants for the Company,
fees and expenses (including counsel fees) incurred in connection with complying
with state securities or "blue sky" laws, fees of the National Association of
Securities Dealers, Inc., transfer taxes, fees of transfer agents and
registrars, costs of insurance, but excluding any Selling Expenses, are called
"Registration Expenses". All underwriting discounts and selling commissions
applicable to the sale of Restricted Stock, and all fees and disbursements of
legal counsel for the sellers of Restricted Stock, are called "Selling
Expenses".
The Company will pay all Registration Expenses in connection with each
registration statement under Sections 4 or 5. All Selling Expenses in connection
with each registration statement under Sections 4 or 5 shall be borne by the
participating sellers in proportion to the number of shares sold by each, or by
such participating sellers other than the Company (except to the extent the
Company shall be a seller) as they may agree.
9. Indemnification and Contribution. (a) In the event of a
registration of any of the Restricted Stock under the Securities Act pursuant to
Sections 4 or 5, the Company will indemnify and hold harmless each seller of
such Restricted Stock thereunder, each underwriter of such Restricted Stock
thereunder and each other person, if any, who controls such seller or
underwriter within the meaning of the Securities Act, against any losses,
claims, damages or liabilities, joint or several, to which such seller,
underwriter or controlling person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such Restricted Stock was registered under the Securities Act
pursuant to Sections 4 or 5, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereof, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each such seller, each such underwriter and each
such controlling person for any legal or other expenses reasonably incurred by
9
them in connection with investigating or defending any such loss, claim, damage,
liability or action, provided, however, that the Company will not be liable in
any such case if and to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission so made in conformity with information
furnished by any such seller, any such underwriter or any such controlling
person in writing specifically for use in such registration statement or
prospectus.
(b) In the event of a registration of any of the Restricted
Stock under the Securities Act pursuant to Sections 4 or 5, each seller of such
Restricted Stock thereunder, severally and not jointly, will indemnify and hold
harmless the Company, each person, if any, who controls the Company within the
meaning of the Securities Act, each officer of the Company who signs the
registration statement, each director of the Company, each underwriter and each
person who controls any underwriter within the meaning of the Securities Act,
against all losses, claims, damages or liabilities, joint or several, to which
the Company or such officer, director, underwriter or controlling person may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in the registration statement under which such Restricted Stock
was registered under the Securities Act pursuant to Sections 4 or 5, any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse the
Company and each such officer, director, underwriter and controlling person for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action,
provided, however, that such seller will be liable hereunder in any such case if
and only to the extent that any such loss, claim, damage or liability arises out
of or is based upon an untrue statement or alleged untrue statement or omission
or alleged omission made in reliance upon and in conformity with information
pertaining to such seller, as such, furnished in writing to the Company by such
seller specifically for use in such registration statement or prospectus, and
provided, further, however, that the liability of each seller hereunder shall
not in any event exceed the proceeds received by such seller from the sale of
Restricted Stock covered by such registration statement.
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(c) Promptly after receipt by an indemnified party hereunder of
notice of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying party hereunder,
notify the indemnifying party in writing thereof, but the omission so to notify
the indemnifying party shall not relieve it from any liability which it may have
to such indemnified party other than under this Section 9 and shall only relieve
it from any liability which it may have to such indemnified party under this
Section 9 if and to the extent the indemnifying party is prejudiced by such
omission. In case any such action shall be brought against any indemnified
party and it shall notify the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate in and, to the extent it
shall wish, to assume and undertake the defense thereof with counsel
satisfactory to such indemnified party, and, after notice from the indemnifying
party to such indemnified party of its election so to assume and undertake the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under this Section 9 for any legal expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation and of liaison with counsel so selected, provided,
however, that, if the defendants in any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be reasonable defenses available to it which are
different from or additional to those available to the indemnifying party or if
the interests of the indemnified party reasonably may be deemed to conflict with
the interests of the indemnifying party, the indemnified party shall have the
right to select a separate counsel and to assume such legal defenses and
otherwise to participate in the defense of such action, with the expenses and
fees of such separate counsel and other expenses related to such participation
to be reimbursed by the indemnifying party as incurred.
(d) In order to provide for just and equitable contribution to
joint liability under the Securities Act in any case in which either (i) any
holder of Restricted Stock exercising rights under this Agreement, or any
controlling person of any such holder, makes a claim for indemnification
pursuant to this Section 9 but it is judicially determined (by the entry of a
final judgment or decree by a court of competent jurisdiction and the expiration
of time to appeal or the denial of the last right of appeal) that such
indemnification may not be enforced in such case notwithstanding the fact that
this Section 9 provides for indemnification in such case, or (ii) contribution
under the Securities Act may be required on the part of any such selling holder
or any such controlling person in circumstances for which indemnification is
provided under this Section 9; then, and in
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each such case, the Company and such holder will contribute to the aggregate
losses, claims, damages or liabilities to which they may be subject (after
contribution from others) as is appropriate to reflect the relative fault of
the Company and such holder in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities, as well as the
relative benefit received by the Company and such holder as a result of the
offering in question, it being understood that the parties acknowledge that
the overriding equitable consideration to be given effect in connection with
this provision is the ability of one party or the other to correct the
statement or omission which resulted in such losses, claims, damages or
liabilities, and that it would not be just and equitable if contribution
pursuant hereto were to be determined by pro rata allocation or by any other
method of allocation which does not take into consideration the foregoing
equitable considerations; provided, however, that, in any such case, (A) no
such holder will be required to contribute any amount in excess of the public
offering price of all such Restricted Stock offered by it pursuant to such
registration statement; and (B) no person or entity guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
will be entitled to contribution from any person or entity who was not guilty
of such fraudulent misrepresentation.
10. Removal of Legends, Etc. Notwithstanding the foregoing
provisions of Sections 2 through 9 hereof, the restrictions imposed by Sections
2 through 9 on the transferability of any Preferred Shares, Conversion Shares,
Warrant Shares and Xxxxxx-Xxxxx Shares shall cease and terminate when (a) any
such Preferred Shares, Xxxxxx-Xxxxx Shares, Conversion Shares or Warrant Shares
are sold or otherwise disposed of in accordance with the intended method of
disposition by the seller or sellers thereof set forth in a registration
statement or such other method contemplated by Section 3 hereof that does not
require that the securities transferred bear the legend set forth in Section 2
hereof, or (b) the holder of such Preferred Shares, Xxxxxx-Xxxxx Shares,
Conversion Shares or Warrant Shares has met the requirements for transfer
pursuant to subparagraph (k) of Rule 144 (as amended from time to time)
promulgated by the Commission under the Securities Act. Whenever the
restrictions imposed by Sections 2 through 9 hereof have terminated, a holder of
a certificate for such Preferred Shares, Xxxxxx-Xxxxx Shares, Conversion Shares
or Warrant Shares as to which such restrictions have terminated shall be
entitled to receive from the Company, without expense, a new certificate not
bearing the restrictive legend set forth in Section 2 hereof and not containing
any other reference to the restrictions imposed by this Agreement.
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11. Changes in Common Stock or Preferred Stock. If, and as often as,
there is any change in the Common Stock or the Preferred Stock by way of a stock
split, stock dividend, combination or reclassification, or through a merger,
consolidation, reorganization or recapitalization, or by any other means,
appropriate adjustment shall be made in the provisions hereof so that the rights
and privileges granted hereby shall continue with respect to the Common Stock or
the Preferred Stock as so changed.
12. Rule 144 Reporting. With a view to making available the benefits
of certain rules and regulations of the Commission which may at any time permit
the sale of the Restricted Stock to the public without registration, at all
times 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;
(b) use all reasonable efforts to file with the Commission in a
timely manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act; and
(c) furnish to each holder of Restricted Stock forthwith upon
request a written statement by the Company as to its compliance with the
reporting requirements of such Rule 144 and of the Securities Act and the
Exchange Act, a copy of the most recent annual or quarterly report of the
Company, and such other reports and documents so filed by the Company as such
holder may reasonably request in availing itself of any rule or regulation of
the Commission allowing such holder to sell any Restricted Stock without
registration.
13. Representations and Warranties of the Company. The Company
represents and warrants to each of the Original Holders as follows:
(a) The execution, delivery and performance of this Agreement by
the Company have been duly authorized by all requisite corporate action and will
not violate any provision of law, any order of any court or other agency of
government, the Charter or By-laws of the Company or its subsidiaries or any
provision of any indenture, agreement or other instrument to which it or its
subsidiaries or any or their properties or assets is bound, or conflict with,
result in a breach of or constitute (with due notice or lapse of time or both) a
default under any such indenture, agreement or other instrument or result in the
creation or imposition of any lien, charge or encumbrance of any
13
nature whatsoever upon any of the properties or assets of the Company or its
subsidiaries.
(b) This Agreement has been duly executed and delivered by the
Company and constitutes the legal, valid and binding obligation of the Company,
enforceable in accordance with its terms.
14. Miscellaneous.
(a) All covenants and agreements contained in this Agreement by
or on behalf of any of the parties hereto shall bind and inure to the benefit of
the respective successors and assigns of the parties hereto (including without
limitation transferees of any Preferred Shares or Restricted Stock), whether so
expressed or not, provided, however, that registration rights conferred herein
on the holders of Preferred Shares, Xxxxxx-Xxxxx Shares, Warrants, or Restricted
Stock, shall only inure to the benefit of a transferee of Preferred Shares,
Xxxxxx-Xxxxx Shares, Warrants, or Restricted Stock, if (i) there is transferred
to such transferee at least 20% of the total shares of Restricted Stock
originally issued pursuant to the Merger Agreement to the direct or indirect
transferor of such transferee or (ii) such transferee is a partner, shareholder
or affiliate of a party hereto.
(b) All notices, requests, consents and other communications
hereunder shall be in writing and shall be mailed by certified or registered
mail, return receipt requested, postage prepaid, or telexed, in the case of
non-U.S. residents, addressed as follows:
if to the Company, at:
Strategic Diagnostics Inc.
000 Xxxxx Xxxxx
Xxxxxx, XX 00000-0000
Attn: President
if to any Original Holder, at the most recent address given
by such party to the Company;
if to any subsequent holder of Preferred Shares,
Xxxxxx-Xxxxx Shares, Warrants, or Restricted Stock, to it at such address as may
have been furnished to the Company in writing by such holder;
or, in any case, at such other address or addresses as shall have been furnished
in writing to the Company (in the case of a holder of Preferred Shares,
Xxxxxx-Xxxxx Shares or Restricted Stock) or
14
to the holders of Preferred Shares, Xxxxxx-Xxxxx Shares or Restricted Stock
(in the case of the Company) in accordance with the provisions of this
paragraph.
(c) This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
(d) This Agreement may not be amended or modified, and no
provision hereof may be waived, without the written consent of the Company and
the holders of at least two-thirds of the outstanding shares of Restricted
Stock. In addition, the Agreement may not be amended in a manner that is
materially adverse to the rights of the parties hereunder without the written
consent of the holders of at least a majority of the outstanding shares of
Restricted Stock.
(e) This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
(f) The obligations of the Company to register shares of
Restricted Stock under Sections 4 or 5 shall terminate on the fifth anniversary
of the date of this Agreement.
(g) Notwithstanding the provisions of Section 6(a), the
Company's obligation to file a registration statement, or cause such
registration statement to become and remain effective, shall be suspended for a
period not to exceed 90 days in any 12-month period if there exists at the time
material non-public information relating to the Company which, in the reasonable
opinion of the Company, should not be disclosed.
(h) From the date of this Agreement, the Company shall not grant
to any third party any registration rights more favorable than any of those
contained herein, so long as any of the registration rights under this Agreement
remains in effect.
(i) If any provision of this Agreement shall be held to be
illegal, invalid or unenforceable, such illegality, invalidity or
unenforceability shall attach only to such provision and shall not in any manner
affect or render illegal, invalid or unenforceable any other provision of this
Agreement, and this Agreement shall be carried out as if any such illegal,
invalid or unenforceable provision were not contained herein.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
15
Please indicate your acceptance of the foregoing by signing and
returning the enclosed counterpart of this letter, whereupon this Agreement
shall be a binding agreement between the Company and you.
Very truly yours,
ENSYS ENVIRONMENTAL
PRODUCTS, INC.
By: /s/Xxxxxx X. Xxxxx
-----------------------------
Title: President and Chief
Executive Officer
AGREED TO AND ACCEPTED as of
the date first above written.
DSV PARTNERS IV
By: DSV Management, Ltd.,
its general partner
By: /s/Xxxx Xxxxxxx
----------------------------
General Partner
EDISON VENTURE FUND II, L.P.
By: Edison Partners II, L.P.,
General Partner
By: /s/Xxxxxxx X. Xxxxxxx
----------------------------
General Partner
EDISON VENTURE FUND II-PA, L.P.
By: Edison Partners II, L.P.,
General Partner
By: /s/Xxxxxxx X. Xxxxxxx
----------------------------
General Partner
THE XXXXXX-XXXXX CORPORATION
By: /s/Xxxxxxx X. Xxxxxx
----------------------------
