EXHIBIT 4.2
BIOCIRCUITS CORPORATION
COMMON STOCK PURCHASE AGREEMENT
APRIL 15, 1997
NOTICE TO PURCHASERS IN ALL STATES:
IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF
THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS
INVOLVED. THESE SHARES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE
SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING
AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS
DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THESE SHARES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY
NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO
REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY WILL
BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE
PERIOD OF TIME.
COMMON STOCK PURCHASE AGREEMENT
THIS AGREEMENT ("Agreement") is made as of the 15th day of April, 1997 (the
"Effective Date"), by and among BIOCIRCUITS CORPORATION, a Delaware corporation
with its principal place of business at 0000 Xxxxxxxxxx Xxxxxxx, Xxxxxxxxx,
Xxxxxxxxxx 00000 (the "Company") and each of those entities, severally and not
jointly, listed as a Purchaser on the Schedule of Purchasers attached as
EXHIBIT A hereto. Such persons and entities are hereinafter collectively
referred to herein as "Purchasers" and each individually as a "Purchaser."
AGREEMENT
In consideration of the mutual covenants contained in this Agreement, and
for other good and valuable consideration, the receipt of which is hereby
acknowledged, the Company and each Purchaser (severally and not jointly) hereby
agree as follows:
SECTION 1. AUTHORIZATION OF SALE OF THE SHARES. Subject to the terms and
conditions of this Agreement, the Company has or before the First Closing (as
defined below) will have authorized the sale and issuance of up to 2,500,000
shares of its Common Stock (the "Common Stock").
SECTION 2. AGREEMENT TO SELL AND PURCHASE THE SHARES.
a. SALE OF SHARES.
i. At each Closing (as defined in Section 3), the Company will sell
to each Purchaser, and each Purchaser will purchase from the Company, at a
purchase price of one dollar ($1.00) per share, the number of shares of Common
Stock (the "Shares") set forth next to such Purchaser's name on the Schedule of
Purchasers attached hereto as EXHIBIT A (the "Schedule of Purchasers").
b. SEPARATE AGREEMENT. Each Purchaser shall severally, and not jointly,
be liable for only the purchase of the Shares that appear on EXHIBIT A hereto
and that relate to such Purchaser. The Company's agreement with each of the
Purchasers is a separate agreement, and the sale of Shares to each of the
Purchasers is a separate sale.
SECTION 3. CLOSING AND DELIVERY.
a. CLOSINGS. The first closing of the purchase and sale of the Shares
pursuant to this Agreement (the "First Closing") shall occur with respect to the
first 21.25% of the total number of Shares to be purchased and sold hereunder at
the offices of Xxxxxx Godward LLP, 5 Palo Alto Square, 0000 Xx Xxxxxx Xxxx, Xxxx
Xxxx, Xxxxxxxxxx, on April 15, 1997 or on such other date and place as may be
agreed to by the Company and the Purchasers.
The second closing of the purchase and sale of the Shares pursuant to this
Agreement (the "Second Closing") shall occur with respect to 47.5% of the total
number of Shares to be purchased and sold hereunder within five (5) days
following satisfaction or waiver of each of the applicable closing conditions
set forth in Sections 7, 8 and 9, or as soon as practicable thereafter;
provided, however, that the Second Closing shall occur no later than July 8,
1997.
The third closing of the purchase and sale of the Shares pursuant to this
Agreement (the "Third Closing") shall occur with respect to the remaining 31.25%
Shares to be purchased and sold hereunder within five (5) days following
satisfaction or waiver of each of the applicable closing conditions set forth in
Sections 7, 8 and 9, or as soon as practicable thereafter; provided, however,
that the Third Closing shall occur no later than January 8, 1998.
The First Closing, the Second Closing, and the Third Closing shall be
referred to herein as the "Closings" and singularly as a "Closing" and the date
of each closing is referred to herein as a "Closing Date."
The Company shall give at least three (3) business days prior written
notice of the Second Closing Date and of the Third Closing Date to the
Purchasers, in a manner provided for in Section 12 hereof, including the date,
time and location of the Closing. At or prior to each Closing, each Purchaser
shall execute any related agreements or other documents required to be executed
hereunder, dated as of the applicable Closing Date.
b. ISSUANCE OF THE SHARES AT THE CLOSING. At each Closing, the Company
shall cause to be issued to each Purchaser stock certificates registered in the
name of such Purchaser, or in such nominee name(s) as designated by such
Purchaser, representing the number of Shares to be purchased by such Purchaser
at such Closing as set forth in the Schedule of Purchasers. The Company shall
deliver such stock certificates to each Purchaser at the Closing or promptly
thereafter. The name(s) in which the stock certificates are to be issued to
each Purchaser are set forth in the Stock Certificate Questionnaire in the form
attached hereto as APPENDIX I, as completed by each Purchaser.
SECTION 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY.
Except as set forth on the Schedule of Exceptions attached hereto as
EXHIBIT B, the Company hereby represents and warrants to, and covenants with,
the Purchasers as follows:
a. ORGANIZATION AND QUALIFICATION. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite corporate power and authority to conduct its
business as it is currently being conducted.
b. DUE EXECUTION, DELIVERY AND PERFORMANCE OF THE AGREEMENT. The
Company's execution, delivery and performance of this Agreement have been duly
authorized under Delaware law by all requisite corporate action by the Company,
and will not violate (i) any law, (ii) the Company's Amended and Restated
Certificate of Incorporation, as amended, (iii) the Bylaws of the Company,
(iv) the Rules of the Nasdaq National Market (including rules relating to
listing criteria), or (v) any provision of any material indenture, mortgage,
agreement, contract or other material instrument to which the Company is a party
or by which the Company or any of its properties or assets is bound as of the
date hereof, or result in a breach of or constitute (upon notice or lapse of
time or both) a default under any such indenture, mortgage, agreement, contract
or other material instrument or result in the creation or imposition of any
lien, security interest, mortgage, pledge, charge or other encumbrance, of any
material nature whatsoever, upon any properties or assets of the Company. Upon
the execution and delivery, and assuming the valid execution and delivery of
this Agreement by each of the Purchasers, this Agreement will constitute a valid
and binding obligation of the Company, enforceable in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' and contracting
parties' rights generally and except as enforceability may be subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law) and except as the indemnification agreements
of the Company in Section 10.3 hereof may be legally unenforceable.
c. ISSUANCE, SALE AND DELIVERY OF THE SHARES. When issued and paid for
in accordance with this Agreement, the Shares will be validly issued and
outstanding, fully paid and non-assessable. In reliance on the Purchasers'
representations set forth in Section 5 hereof, the Company represents and
warrants that, when issued and paid for in accordance with this Agreement, the
Shares will be issued in compliance with all applicable federal and state
securities laws and the applicable rules of the National Association of
Securities Dealers.
d. ADDITIONAL INFORMATION. The Company represents and warrants that the
information contained in the following documents, which the Company has
furnished to the Purchasers, or will furnish if requested by the Purchasers
prior to the Closing, is or will be true and correct in all material respects as
of their respective filing dates:
i. the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995 (without exhibits unless specifically requested);
ii. the Company's Quarterly Reports on Form 10-Q required to be filed
with the SEC for the three month periods ended March 31, 1996, June 30, 1996 and
September 30, 1996 (without exhibits unless specifically requested);
iii. the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996 (without exhibits unless specifically requested) (to be
furnished when available, prior to the Second Closing), a draft of which has
been or will, upon request, be provided to the Purchasers prior to the First
Closing;
iv. Notice of Annual Meeting and Proxy Statement for the Company's
1996 Annual Meeting of Stockholders; and
v. Notice of Annual Meeting and Proxy Statement for the Company's
1997 Annual Meeting of Stockholders (to be furnished when available, prior to
the Second Closing).
In addition, the Company represents and warrants that any other information
provided by the Company to the Purchasers in writing in connection with the
transactions contemplated by this Agreement (the "Additional Written
Information") will not, as of the Closing Date, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein, or necessary to make the statements contained therein, in light of
the circumstances under which they were made, not misleading (other than
information relating to the Placement Agent furnished by the Placement Agent
expressly for use in the Agreement as to which the Company makes no
representation or warranty); provided, however, that the Company makes no
representations with respect to any projections contained in the Additional
Written Information except with respect to any non-projected factual
information contained in such projections.
e. NO MATERIAL CHANGE. There has been no material adverse change in the
financial condition, results of operations, business or prospects of the Company
since December 31, 1996, except as described in the draft of the Annual Report
on Form 10-K for the fiscal year ended December 31, 1996 described in
Section 4.4 hereof.
f. SEC REPORTS.
i. The Company has timely filed and will continue to timely file
with the Securities Exchange Commission (the "Commission") all reports ("SEC
Reports") required to be filed by it under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"). All of the SEC Reports filed by or to be filed
by the Company comply or will comply in all material respects with the
requirements of the Exchange Act. None of the SEC Reports contains or will
contain, as of the respective date thereof, any untrue statement of a material
fact or omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances under which they were made. All financial statements contained in
the SEC Reports have been prepared or will be prepared in accordance with
generally accepted accounting principles consistently applied throughout the
period indicated ("GAAP"). Each balance sheet presents or will present fairly
in accordance with GAAP the financial position of the Company as of the date of
such balance sheet, and each statement of operations, of stockholders' equity
and of cash flows presents or will present fairly in accordance with GAAP the
results of operations, the stockholders' equity and the cash flows of the
Company for the periods then ended.
ii. No event has occurred since December 31, 1996 requiring the
filing of an SEC Report that has not heretofore been filed and furnished to the
Purchasers.
iii. The SEC Reports and this Agreement taken together as a whole will
not, as of the Closing Date, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein, or necessary to
make the statements contained therein, in light of the circumstances under which
they were made, not misleading (other than information relating to the Placement
Agent furnished by the Placement Agent expressly for use in the Agreement as to
which the Company makes no representation or warranty).
g. MAINTENANCE OF LISTING. For so long as the Company is obligated to
keep in effect the Registration Statements provided under Section 10 hereof, the
Company will use its best efforts to maintain its listing on The National Market
of The Nasdaq Stock Market or a national securities exchange, as defined in the
Exchange Act.
h. NO MATERIAL ADVERSE CHANGE WITH RESPECT TO BUSINESS PLAN. Since
April 6, 1997, there has been no material adverse change in the Company's
financial condition, results of operations or prospects, with respect to the
Company's 1997 Business Plan, dated April 6, 1997.
i. REGISTRATION PURSUANT TO SECTION 10 HEREOF. To the Company's
knowledge, no fact or circumstance exists that will prevent the Company from
filing any Registration Statement required to be filed pursuant to Section 10
hereof.
j. SATISFACTION OF CLOSING CONDITIONS. The Company will use its best
efforts to cause the conditions to the Second Closing and the Third Closing set
forth in Section 9.2 and Section 9.3 hereof to be satisfied.
SECTION 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASERS.
a. INVESTMENT REPRESENTATIONS, WARRANTIES AND COVENANTS.
Each Purchaser, severally and not jointly, represents and warrants to and
covenants with the Company that:
i. Purchaser, taking into account the personnel and resources it can
practically bring to bear on the purchase of the Shares contemplated hereby,
either alone or together with the advice of such Purchaser's purchaser
representative, is knowledgeable, sophisticated and experienced in making, and
is qualified to make, decisions with respect to investments in shares presenting
an investment decision like that involved in the purchase of the Shares,
including investments in shares issued by the Company and Purchaser has received
all information requested by such Purchaser in connection with Purchaser's
decision to purchase the Shares.
ii. Purchaser is acquiring the Shares being acquired by Purchaser
pursuant to this Agreement in the ordinary course of its business and for its
own account for investment only and with no present intention of distributing
any of such Shares or any arrangement or understanding with any other persons
regarding the distribution of such Shares, except in compliance with
Section 5(c).
iii. Purchaser will not, directly or indirectly, offer, sell, pledge,
transfer or otherwise dispose of (or solicit any offers to buy, purchase or
otherwise acquire or take a pledge of) any of the Shares purchased hereunder
except in compliance with the Securities Act of 1933, as amended (the
"Securities Act"), applicable blue sky laws, and the rules and regulations
promulgated thereunder.
iv. Purchaser has completed or caused to be completed the Stock
Certificate Questionnaire and the Registration Questionnaire, attached hereto as
APPENDIX I and APPENDIX II, respectively, for use in preparation of the
Registration Statements to be filed by the Company, and the answers thereto are
true and correct to the best knowledge of Purchaser as of the date hereof and
will be true and correct as of the effective date of the applicable Registration
Statement (provided that Purchaser shall be entitled to update such information
by providing notice thereof to the Company prior to the effective date of such
Registration Statement).
v. Purchaser has, in connection with its decision to purchase the
Shares, relied with respect to the Company and its affairs solely upon the
information delivered to Purchaser as described in Sections 4.4 and 5(a) above
and the representations and warranties of the Company contained herein.
vi. Purchaser is an "accredited investor" within the meaning of
Rule 501 of Regulation D promulgated under the Securities Act.
vii. Purchaser has full right, power, authority and capacity to enter
into this Agreement and to consummate the transactions contemplated hereby and
has taken all necessary action to authorize the execution, delivery and
performance of this Agreement. Upon the execution and delivery of this
Agreement by Purchaser, this Agreement shall constitute a valid and binding
obligation of Purchaser, enforceable in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' and contracting
parties' rights generally and except as enforceability may be subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law) and except as the indemnification agreements
of the Purchaser in Section 10.3 hereof may be legally unenforceable.
b. VOTING AGREEMENT. To the extent applicable, Purchaser agrees to vote
any shares of the Company's capital stock held by Purchaser in favor of any
proposal to approve the issuance of the Shares in the Second Closing and Third
Closing. Purchaser understands that, in accordance with the requirements of the
Nasdaq National Market, the Shares issued in the First Closing will not be
counted toward any such approval.
SECTION 6. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
Notwithstanding any investigation made by any party to this Agreement, all
covenants, agreements, representations and warranties made by the Company and
each Purchaser herein and in the certificates for the shares delivered pursuant
hereto shall survive the execution of this Agreement, the delivery to the
Purchasers of the Shares being purchased and the payment therefor.
SECTION 7. CONDITIONS TO COMPANY'S OBLIGATIONS AT EACH CLOSING. The
Company's obligation to complete the sale and issuance of the Shares and deliver
shares of Common Stock to each Purchaser, individually, as set forth in the
Schedule of Purchasers shall be subject to the following conditions to the
extent not waived by the Company:
a. RECEIPT OF PAYMENT. The Company shall have received payment, by check
or wire transfer of immediately available funds, in the full amount of the
purchase price for the number of Shares being purchased by such Purchaser at
each Closing as set forth in the Schedule of Purchasers.
b. REPRESENTATIONS AND WARRANTIES CORRECT. The representations and
warranties made by such Purchaser in Section 5 hereof shall be true and correct
when made, and shall be true and correct on the Closing Date.
c. COVENANTS PERFORMED. All covenants, agreements and conditions
contained herein to be performed by such Purchaser on or prior to the Closing
Date shall have been performed or complied with in all material respects.
SECTION 8. CONDITIONS TO PURCHASERS' OBLIGATIONS AT EACH CLOSING. Each
Purchaser's obligation to accept delivery of the Shares and to pay for the
Shares shall be subject to the following conditions to the extent not waived by
such Purchaser:
a. REPRESENTATIONS AND WARRANTIES CORRECT. The representations and
warranties made by the Company in Section 4 hereof shall be true and correct
when made, and shall be true and correct as of the Closing Date.
b. COVENANTS PERFORMED. All covenants, agreements and conditions
contained herein to be performed by the Company shall have been performed or
complied with in all material respects.
c. LEGAL OPINION. Purchasers shall have received from Xxxxxx
Godward LLP, counsel to the Company, an opinion letter addressed to the
Purchasers, dated as of the Closing Date, in form and substance reasonably
satisfactory to the Purchasers or their counsel.
d. OFFICER'S CERTIFICATE. Purchasers shall have received a certificate
of the Company executed by the Chief Executive Officer of the Company, dated the
Closing Date, to the effect that the representations and warranties of the
Company set forth in Section 4 of this Agreement are true and correct as of the
date of this Agreement and as of the Closing Date, and the Company has satisfied
all the conditions to be performed or satisfied by the Company on or prior to
such Closing Date.
SECTION 9. CONDITIONS TO SECOND AND THIRD CLOSINGS. Each Purchaser's
obligation and, unless otherwise indicated, the Company's obligation to complete
the Second and Third Closings shall additionally be subject to the following
conditions to the extent not waived by the Company and such Purchaser:
a. NO SALE OF THE COMPANY. The Company shall not have entered into any
agreement for a sale of a majority of its outstanding capital stock, a
consolidation or merger with another entity, or a sale of substantially all of
the Company's assets (any of the foregoing, a "Change in Control").
b. PLACEMENT OF GMP UNITS. With respect to the Second Closing, the
Company shall have installed in physicians' offices during the three month
period ended June 30, 1997 at least eighty-eight (88) GMP units of the IOS
system (instrument and disposable test cartridges) that were sold directly or
indirectly by the Company; provided, however, that the Company's obligation to
complete the Second Closing shall not be subject to this condition set forth in
this Section 9.2. With respect to the Third Closing, the Company shall have
installed in physicians' offices during the six month period ended December 30,
1997 at least two hundred thirty-five (235) GMP units of the IOS system
(instrument and disposable test cartridges) that were sold directly or
indirectly by the Company; provided, however, that the Company's obligation to
complete the Third Closing shall not be subject to this condition set forth in
this Section 9.2.
c. STOCKHOLDER APPROVAL. The Company's stockholders shall have approved
the sale of the Shares to be sold in the Second and Third Closing, to the extent
such approval is required by the Rules of the Nasdaq Stock Market.
SECTION 10. REGISTRATION OF THE SHARES; COMPLIANCE WITH THE SECURITIES ACT.
a. REGISTRATION PROCEDURES AND EXPENSES. The Company is obligated to do
the following:
i. Within two weeks of the First Closing Date, the Company shall
prepare and file with the Commission one or more registration statements in
order to register with the Commission the sale by the Purchasers, from time to
time, of the Shares issued in the First Closing for sale pursuant to such
registration statements (a "Registration Statement"). The Company shall use its
best efforts to cause such Registration Statement to become effective as soon as
practicable thereafter. Promptly after filing any such Registration Statement,
the Company will furnish to the Purchasers a copy of such Registration
Statement.
ii. Within two weeks of the Second Closing Date, the Company shall
prepare and file with the Commission one or more registration statements in
order to register with the Commission the sale by the Purchasers, from time to
time, of the Shares issued in the Second Closing for sale pursuant to such
registration statements (a "Registration Statement"). The Company shall use its
best efforts to cause such Registration Statement to become effective as soon as
practicable thereafter. Promptly after filing any such Registration Statement,
the Company will furnish to the Purchasers a copy of such Registration
Statement.
iii. Within two weeks of the Third Closing Date, the Company shall
prepare and file with the Commission one or more registration statements in
order to register with the Commission the sale by the Purchasers, from time to
time, of the Shares issued in the Third Closing for sale pursuant to such
registration statements (a "Registration Statement"). The Company shall use its
best efforts to cause such Registration Statement to become effective as soon as
practicable thereafter. Promptly after filing any such Registration Statement,
the Company will furnish to the Purchasers a copy of such Registration
Statement.
iv. The Company shall use reasonable best efforts to prepare and file
with the Commission (i) such amendments and supplements to each such
Registration Statement and the prospectus used in connection therewith, (ii)
such SEC Reports and (iii) such other filings required by the Commission, as may
be necessary to keep each Registration Statement continuously effective until
the second anniversary of the Third Closing Date; provided, however, that in the
event of a Suspension Period (as defined below) or a Stand-Off Period (as
defined in Section 10.6 hereof), the Company shall extend the period of
effectiveness of such Registration Statement by the aggregate number of days of
each such Suspension Period or Stand-Off Period. The Company may suspend use of
a prospectus when it deems necessary, in its reasonable judgment, until such
time as the Company subsequently authorizes use of such prospectus (each such
period, including any time period during which a stop order issued by the
Commission is in effect with respect to such prospectus or related Registration
Statement, a "Suspension Period"). Upon the declaration of a Suspension Period,
the Company shall use reasonable best efforts to end the Suspension Period as
quickly as possible. Notwithstanding the foregoing, the Company shall not allow
a Suspension Period to continue for more than 60 days unless the Company shall
deliver to the Purchasers a second notice, which shall have the effect of
extending the Suspension Period by up to an additional 30 days. In no event
shall the Company extend a Suspension Period beyond such 90 day period. The
Company shall not under any circumstances be entitled to exercise its rights
under
this subparagraph to effect a Suspension Period more than two times in any
12 month period. Each Purchaser agrees that such Purchaser will not sell any
Shares pursuant to a prospectus beginning at the time the Company gives such
Purchaser notice of the suspension of the prospectus and ending at the time the
Company gives such Purchaser notice of the termination of the Suspension Period.
Each Purchaser further agrees to promptly notify the Company of the sale of all
of such Purchaser's Shares.
v. In order to facilitate the public sale or other disposition of
all or any of the Shares by each Purchaser, the Company shall furnish to each
Purchaser with respect to the Shares registered under the Registration Statement
such number of copies of prospectuses and preliminary prospectuses as such
Purchaser reasonably requests in conformity with the requirements of the
Securities Act.
vi. The Company shall file documents required of the Company for blue
sky clearance in states specified in writing by each Purchaser; PROVIDED,
HOWEVER, that the Company shall not be required to qualify to do business or
consent to service of process in any jurisdiction in which it is not now so
qualified or has not so consented.
vii. Other than fees and expenses, if any, of counsel or other
advisers to the Purchasers, which fees and expenses shall be borne by the
Purchasers except as provided in the next sentence and under Section 13.8 below,
the Company shall bear all expenses (exclusive of underwriting discounts and
commissions) in connection with the procedures in paragraphs (a) through (e) of
this Section 10.1. The Company shall bear the expenses of reasonable fees and
disbursements of a single special counsel for the Purchasers (including any
purchasers pursuant to the Common Stock and Warrant Purchase Agreement of even
date herewith described in Section 13.9 hereof) reasonably acceptable to each of
the Purchasers in connection with each Registration Statement required to be
filed pursuant to this Section 10 not to exceed $15,000.
b. TRANSFER OF SHARES AFTER REGISTRATION. Each Purchaser agrees that
such Purchaser will not effect any disposition of the Shares that would
constitute a sale within the meaning of the Securities Act, except:
(1) pursuant to a Registration Statement, in which case such
Purchaser shall submit the certificates evidencing the Shares to the transfer
agent accompanied by a separate "Purchaser's Certificate" (A) in the form of
APPENDIX III attached hereto, (B) executed by such Purchaser or by an officer
of, or other authorized person designated by, such Purchaser, and (C) to the
effect that (1) the Shares have been sold in accordance with the Registration
Statement and (2) the requirement of delivering a current prospectus has been
satisfied; or
(2) in a transaction exempt from registration under the
Securities Act, in which case such Purchaser shall, prior to effecting such
disposition, submit to the Company an opinion of counsel in form and substance
reasonably satisfactory to the Company to the effect that the proposed
transaction is in compliance with the Securities Act.
c. INDEMNIFICATION. As used in this Section 10.3 the following terms
shall have the following respective meanings:
i. "Selling Stockholder" shall mean a Purchaser of Shares under this
Agreement, and any transferee of such a Purchaser who is entitled to resell
Shares pursuant to the Registration Statement;
ii. "Registration Statement" shall include any final prospectus,
exhibit, supplement or amendment included in or relating to the Registration
Statements referred to in Section 10.1; and
iii. "Untrue Statement" shall include any untrue statement or alleged
untrue statement, or any omission or alleged omission to state in a Registration
Statement a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
The Company agrees to indemnify and hold harmless each Selling Stockholder
(and each person, if any, who controls such Selling Stockholder within the
meaning of Section 15 of the Securities Act, and each officer and director
of such Selling Stockholder and each broker or dealer to or through whom such
Selling Stockholder's Shares are sold) from and against any losses, claims,
damages or liabilities to which such Selling Stockholder (or such controlling
person, officer or director or broker or dealer, as the case may be) may become
subject (under the Securities Act or otherwise) insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) arise out
of, or are based upon, any Untrue Statement on or after the effective date of a
Registration Statement, or arise out of any failure by the Company to fulfill
any undertaking included in a Registration Statement and the Company will
reimburse such Selling Stockholder (or such controlling person, officer or
director or broker or dealer, as the case may be) for any reasonable legal or
other expenses reasonably incurred in investigating, defending or preparing to
defend any such action, proceeding or claim; PROVIDED, HOWEVER, that the Company
shall not be liable to such Selling Stockholder (or such controlling person,
officer or director or broker or dealer) in any such case to the extent that
such loss, claim, damage or liability arises out of, or is based upon, an Untrue
Statement made in such Registration Statement in reliance upon and in conformity
with written information furnished to the Company by or on behalf of such
Selling Stockholder (or such controlling person, officer or director or broker
or dealer), specifically for use in preparation of such Registration Statement,
or the failure of such Selling Stockholder to comply with the covenants and
agreements contained in Section 10.1 or 10.2 hereof respecting sale of the
Shares or any statement or omission in any prospectus that is corrected in any
subsequent prospectus that was delivered to the Selling Stockholder prior to the
pertinent sale or sales by the Selling Stockholder.
Each Purchaser, severally and not jointly, agrees to indemnify and hold
harmless the Company (and each person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act, each officer of the Company who
signs a Registration Statement and each director of the Company) from and
against any losses, claims, damages or liabilities to which the Company (or any
such officer, director or controlling person) may become subject (under the
Securities Act or otherwise), insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of, or are
based upon, any failure to comply with the covenants and agreements contained in
Section 10.1 or 10.2 hereof respecting sale of the Shares, or any Untrue
Statement contained in a Registration Statement on or after the effective date
thereof if such Untrue Statement was made in reliance upon and in conformity
with written information furnished by or on behalf of such Purchaser
specifically for use in preparation of such Registration Statement, and such
Purchaser will reimburse the Company (or such officer, director or controlling
person), as the case may be, for any legal or other expenses reasonably incurred
in investigating, defending or preparing to defend any such action, proceeding
or claim; PROVIDED that in no event shall any indemnity by a Purchaser under
this Section 10.3 exceed the gross proceeds received by such Purchaser from the
sale of Shares covered by such Registration Statement.
Promptly after receipt by any indemnified person of a notice of a claim or
the beginning of any action in respect of which indemnity is to be sought
against an indemnifying person pursuant to this Section 10.3, such indemnified
person shall notify the indemnifying person in writing of such claim or of the
commencement of such action, and, subject to the provisions hereinafter stated,
in case any such action shall be brought against an indemnified person and such
indemnifying person shall have been notified thereof, such indemnifying person
shall be entitled to participate therein, and, to the extent it shall wish, to
assume the defense thereof, with counsel reasonably satisfactory to such
indemnified person. After notice from the indemnifying person to such
indemnified person of its election to assume the defense thereof, such
indemnifying person shall not be liable to such indemnified person for any legal
expenses subsequently incurred by such indemnified person in connection with the
defense thereof; PROVIDED, HOWEVER, that if there exists or shall exist a
conflict of interest that would make it prejudicial, in the opinion of counsel
to the indemnified person, for the same counsel to represent both the
indemnified person and such indemnifying person or any affiliate or associate
thereof, the indemnified person shall be entitled to retain its own counsel at
the expense of such indemnifying person; PROVIDED, HOWEVER, that no indemnifying
person shall be responsible for the fees and expenses of more than one separate
counsel for all indemnified parties.
d. TERMINATION OF CONDITIONS AND OBLIGATIONS. The conditions precedent
imposed by Subsections 5.1(c) and (d) or Section 10.1(c) and Section 10.2 upon
the transferability of the Shares shall cease and terminate as to any particular
number of the Shares when such Shares shall have been sold or otherwise disposed
of in accordance with the intended method of disposition set forth in the
Registration Statement covering such Shares or at such time as an opinion of
counsel satisfactory to the Company shall have been rendered to the effect that
such conditions are not necessary in order to comply with the Securities Act.
e. INFORMATION AVAILABLE. So long as a Registration Statement is
required to be effective pursuant to this Section 10 covering the resale of
Shares owned by the Purchasers, the Company will furnish to the Purchasers:
i. as soon as practicable after available (but in the case of the
Company's Annual Report to Stockholders, within 120 days after the end of each
fiscal year of the Company), one copy of (i) its Annual Report to Stockholders
(which Annual Report shall contain financial statements audited in accordance
with generally accepted auditing standards certified by a national firm of
certified public accountants); (ii) its Annual Report on Form 10-K; (iii) its
quarterly reports on Form 10-Q (the foregoing, in each case, excluding
exhibits); and (iv) its current reports on Form 8-K, if any;
ii. upon the request of any Purchaser, all exhibits excluded by the
parenthetical to subparagraph (a)(iii) of this Section 10.5, in the form
generally available to the public; and
iii. upon the reasonable request of any Purchaser, an adequate number
of copies of prospectuses to supply to any other party requiring such
prospectuses.
f. MARKET STAND-OFF. If requested by the underwriters in any proposed
underwritten public offering by the Company of Common Stock, Purchasers, or any
assignees thereof or transferees who are affiliates thereof, will not sell any
of the Shares for up to 90 days following the effective date of the registration
statement relating to such public offering (each such time period a "Stand-Off
Period").
g. CHANGES IN PURCHASER INFORMATION. Each Purchaser agrees to promptly
notify the Company of any changes in the information set forth in a Registration
Statement regarding Purchaser or such Purchaser's plan of distribution set forth
in such Registration Statement.
SECTION 11. BROKER'S FEE. The Company and each Purchaser (severally and
not jointly) hereby represent that, except for amounts to be paid to Pacific
Growth Equities, Inc., as Placement Agent (the "Placement Agent") by the Company
as described in Section 13.8 hereof, there are no brokers or finders entitled to
compensation in connection with the sale of the Units, and shall indemnify each
other for any such fees for which they are responsible.
SECTION 12. NOTICES. All notices, requests, consents and other
communications hereunder shall be in writing, shall be sent by confirmed
facsimile or mailed by first-class registered or certified airmail, or
nationally recognized overnight express courier, postage prepaid, and shall be
deemed given when so sent in the case of facsimile transmission, or when so
received in the case of mail or courier, and addressed as follows:
1. if to the Company, to:
Biocircuits Corporation
0000 Xxxxxxxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxxx
Facsimile: (000) 000-0000
with a copy so mailed to:
Xxxxxx Godward LLP
Five Palo Alto Square
0000 Xx Xxxxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
or to such other person at such other place as the Company shall
designate to the Purchasers in writing; and
ii. if to the Purchasers, at the address as set forth at the end of
this Agreement, or at such other address or addresses as may have been furnished
to the Company in writing.
SECTION 13. MISCELLANEOUS.
a. WAIVERS AND AMENDMENTS. Neither this Agreement nor any provision
hereof may be changed, waived, discharged, terminated, modified or amended
except upon the written consent of the Company and holders of at least a
majority of the Shares.
b. HEADINGS. The headings of the various sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed to be
part of this Agreement.
c. SEVERABILITY. In case any provision contained in this Agreement
should be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
d. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California as applied to contracts
entered into and performed entirely in California by California residents,
without regard to conflicts of law principles.
e. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument, and shall become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other parties.
f. 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.
g. ENTIRE AGREEMENT. This Agreement and other documents delivered
pursuant hereto, including the exhibits, constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof.
h. PAYMENT OF FEES AND EXPENSES. Subject to Section 10.1(g) hereof, each
of the Company and the Purchasers shall bear its own expenses and legal fees
incurred on its behalf with respect to this Agreement and the transactions
contemplated hereby. (The transactions contemplated hereby and by the Common
Stock and Warrant Purchase Agreement described in Section 13.9 hereof are
jointly referred to herein as the "Offering"). The Purchasers understand and
acknowledge that the Company shall reimburse the Placement Agent for all
reasonable out-of-pocket expenses incurred by the Placement Agent in connection
with the Offering and the reasonable fees and expenses of Howard, Rice,
Nemerovski, Canady, Xxxx & Rabkin in connection with its acting as counsel to
the Placement Agent, in an amount up to $50,000 in the aggregate. Purchasers
acknowledge that the Placement Agent will receive a commission, to be paid by
the Company, equal to six percent (6%) of the purchase price of the Units or
shares of Common Stock sold in the Offering, except for any Shares sold to the
Sprout Group or any affiliate thereof, plus six percent (6%) of the exercise
price of any Warrants exercised. Purchasers further acknowledge that, in the
event that the First Closing takes place on or before April 15, 1997 and the
Second Closing does not take place as a result of a Change in Control, the
Placement Agent will receive an additional commission to be paid by the Company
equal to $360,000 minus the amount of any commission paid to the Placement Agent
in connection with the sale of Units or Shares in the First Closing (including
the first closing of the transactions described in Section 13.9 hereof). If any
action at law or in equity is necessary to enforce or interpret the terms of
this Agreement, the prevailing party shall be entitled to reasonable attorney's
fees, costs and necessary disbursements in addition to any other relief to which
such party may be entitled.
i. SIMULTANEOUS COMMON STOCK FINANCING. Purchasers acknowledge that the
Company intends to enter into a Common Stock and Warrant Purchase Agreement
pursuant to which the Company will issue and sell up to 5,500,000 Units at a
purchase price of $1 per Unit, with each Unit consisting of one (1) share of
Common Stock and one (1) Warrant to purchase one (1) share of Common Stock at an
exercise price of $.75 per share.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
COMPANY: PURCHASERS:
BIOCIRCUITS CORPORATION
Purchaser:
-------------------------------
By: /s/ Xxxx Xxxxxx
--------------------------------
Xxxx Xxxxxx By:
Chief Executive Officer --------------------------------------
Address: 0000 Xxxxxxxxxx Xxxxxxx Title:
Xxxxxxxxx, XX 00000 -----------------------------------
Facsimile: (000) 000-0000 Address:
---------------------------------
-----------------------------------------
-----------------------------------------
Facsimile:
-------------------------------
Total Investment Amount: $
---------------
First Closing Investment Amount (21.25%
of total amount): $
----------------------
COMMON STOCK PURCHASE AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
COMPANY: PURCHASERS:
BIOCIRCUITS CORPORATION Purchaser: Sprout Capital VII, L.P.
-------------------------------
By: DLJ Capital Corporation
By: --------------------------------------
-------------------------------
Xxxx Xxxxxx Title: Managing General Partner
Chief Executive Officer -----------------------------------
By: /s/ Xxxxxx X. Xxxxx
Address: 0000 Xxxxxxxxxx Xxxxxxx --------------------------------------
Xxxxxxxxx, XX 00000
Title: Attorney-In-Fact
Facsimile: (000) 000-0000 -----------------------------------
Address: Sprout Group 4-270
---------------------------------
0000 Xxxx Xxxx Xxxx
-----------------------------------------
Xxxxx Xxxx, XX 00000
-----------------------------------------
Facsimile: (000) 000-0000
-----------------------------------------
Purchaser: ML Venture Partners, II, L.P.
-------------------------------
By: DLJ Capital Management Corporation
--------------------------------------
Title: Sub-Manager
-----------------------------------
By: /s/ Xxxxxx X. Xxxxx
--------------------------------------
Title: Authorized Officer
-----------------------------------
Purchaser: Sprout Capital VI, L.P.
-------------------------------
By: DLJ Capital Corporation
--------------------------------------
Title: Managing General Partner
-----------------------------------
By: /s/ Xxxxxx X. Xxxxx
--------------------------------------
Title: Attorney-In-Fact
-----------------------------------
Purchaser: DLJ Capital Corporation
-------------------------------
By: /s/ Xxxxxx X. Xxxxx
--------------------------------------
Title: Attorney-In-Fact
-----------------------------------
COMMON STOCK PURCHASE AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
COMPANY: PURCHASERS:
BIOCIRCUITS CORPORATION
Purchaser: Xxxxx Xxxxxxxx
------------------------------
By:
-------------------------- By: /s/ Xxxxx Xxxxxxxx
Xxxx Xxxxxx --------------------------------------
Chief Executive Officer
Address: 0000 Xxxxxxxxxx Xxxxxxx Title:
Xxxxxxxxx, XX 00000 -----------------------------------
Address: 00 Xxxx Xxxxx
---------------------------------
Facsimile: (000) 000-0000
Xxxxxxxxxx, X.X. 00000
-----------------------------------------
-----------------------------------------
Facsimile: (000) 000-0000
-------------------------------
Total Investment Amount: $ 250,000.00
--------------
First Closing Investment Amount (21.25%
of total amount): $ 53,125.00
---------------------
COMMON STOCK PURCHASE AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
COMPANY: PURCHASERS:
BIOCIRCUITS CORPORATION
Purchaser: Lambda Financial Service
Corporation
------------------------------
By:
-------------------------- By: /s/ Xxxxxx Xxx
Xxxx Xxxxxx --------------------------------------
Chief Executive Officer
Address: 0000 Xxxxxxxxxx Xxxxxxx Title: Chief Executive Officer
Xxxxxxxxx, XX 00000 -----------------------------------
Address: X.X. Xxx 000
---------------------------------
Facsimile: (000) 000-0000
Lyndhurst, N.J. 07071
-----------------------------------------
-----------------------------------------
Facsimile: (000) 000-0000
-------------------------------
Total Investment Amount: $ 250,000.00
--------------
First Closing Investment Amount (21.25%
of total amount): $ 53,125.00
---------------------
COMMON STOCK PURCHASE AGREEMENT
EXHIBIT A
SCHEDULE OF PURCHASERS
FIRST CLOSING SECOND CLOSING THIRD TOTAL
CLOSING
ML Venture Partners, II, L.P. $106,250 $237,500 $156,250 $500,000
Sprout Capital VI, L.P. $104,142 $232,788 $153,150 $490,080
Sprout Capital VII, L.P. $198,116 $442,847 $291,347 $932,310
DLJ Capital Corporation $16,492 $36,865 $24,253 $77,610
Xxxxx Xxxxxxxx $53,125 $118,750 $78,125 $250,000
Lambda Financial Service Corporation $53,125 $118,750 $78,125 $250,000
TOTAL: $531,250 $1,187,500 $781,250 $2,500,000
EXHIBIT B
SCHEDULE OF EXCEPTIONS
THE INCLUSION OF ANY MATTER AS PART OF THIS SCHEDULE SHOULD NOT BE
INTERPRETED AS INDICATING THAT THE COMPANY HAS DETERMINED THAT SUCH MATTER IS
NECESSARILY MATERIAL TO THE PURCHASER.
SECTIONS 4.4; 4.5 AND 4.6
ADDITIONAL INFORMATION; NO MATERIAL CHANGE; SEC REPORTS
In accordance with Rule 12b-25 promulgated under the Securities Exchange
Act of 1934, as amended, the Company intends to file its Annual Report on
Form 10-K for the fiscal year ended December 31, 1996 not later than April 15,
1997.
SUMMARY INSTRUCTION SHEET FOR PURCHASER
(TO BE READ IN CONJUNCTION WITH THE ENTIRE
PURCHASE AGREEMENT WHICH FOLLOWS)
(a) Complete the following items on the Purchase Agreement, copies of which are
attached hereto for your convenience:
(i) Signature Page.
(ii) Appendix I - Stock Certificate Questionnaire:
Provide the information requested by the Stock Certificate
Questionnaire.
(iii) Appendix II - Registration Statement Questionnaire:
Provide the information requested by the Registration Statement
Questionnaire.
(iv) Return the properly completed and signed Purchase Agreement
including the properly completed and signed Appendix I and
Appendix II to:
Xxxxxx Godward LLP
Five Palo Alto Square
0000 Xx Xxxxxx Xxxx
Xxxx Xxxx, XX 00000-0000
Attn: Xxxxxxx X. Xxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
PLEASE RETURN THE COMPLETED AND SIGNED PURCHASE AGREEMENT BY
FACSIMILE WITH ALL OF THE ORIGINAL DOCUMENTS FOLLOWING BY
OVERNIGHT COURIER OR MAIL.
(b) The purchase price for the Shares may be paid by wire transfer as follows:
WIRING INSTRUCTIONS
Cupertino National Bank
0 Xxxx Xxxx Xxxxxx, #000
Xxxx Xxxx, XX 00000
Bank Contact Person: Xx. Xxxxx Xxxxxxxxx at (000) 000-0000
Routing #: 000000000
Account Name: Biocircuits Corporation
Account: 003104087
(c) Upon the resale of the Shares by the Purchasers after the Registration
Statement covering the Shares is effective as described in the Purchase
Agreement, each Purchaser:
a) must deliver a current prospectus, and annual, quarterly and
current reports of the Company (Forms 10-K, 10-Q and 8-K) to
the buyer (prospectuses, and annual, quarterly and current
reports may be obtained from the Company at the Purchaser's
request); and
b) must send a letter in the form of Appendix III to the Company
so that the Shares may be properly transferred.
APPENDIX I
BIOCIRCUITS CORPORATION
STOCK CERTIFICATE QUESTIONNAIRE
Pursuant to Section 3 of the Agreement, please provide us with the
following information:
1. The exact name that your Shares
are to be registered in (this is
the name that will appear on
your stock certificate(s). You
may use a nominee name if
appropriate: -----------------------------------
2. The relationship between the -----------------------------------
Purchaser of the Shares and the
Registered Holder listed in
response to item 1 above:
3. The mailing address of the
Registered Holder listed in
response to item 1 above: -----------------------------------
-----------------------------------
-----------------------------------
4. The Social Security Number or
Tax Identification Number of the
Registered Holder listed in the
response to item 1 above: -----------------------------------
Signature:
-----------------------------------
Print Name:
-----------------------------
Title:
-----------------------------
APPENDIX II
BIOCIRCUITS CORPORATION
REGISTRATION STATEMENT QUESTIONNAIRE
In connection with the preparation of the Registration Statement, please
provide us with the following information:
1. Please state your or your organization's name exactly as it should
appear in the Registration Statement:
2. Please provide the following information, as of April 7, 1997:
(a) Number of shares you are purchasing which are to be included in
the Registration Statement: _________________.
(b) Number of shares of the Company's Common Stock and Series A
Preferred Stock (excluding the shares you are purchasing) that
you own:_________________ (Common Stock); ______________
(Preferred Stock).
(c) Number of shares of the Company's Common and Preferred Stock
subject to warrants you own:________________ (Common Stock
Warrants); ____________ (Preferred Stock Warrants).
3. Have you or your organization had any position, office or other
material relationship within the past three years with the Company or its
affiliates other than as disclosed in the Proxy Statement in connection with the
Company's most recent Annual Meeting of Stockholders?
Yes ___ No ___
If yes, please indicate the nature of any such relationships: _____________
_______________________________________________________________________________
4. In what states do you request the Company qualify the shares for resale
(i.e. in what states do you plan to sell the Shares)? _________________________
Signature: ___________________________________
Print Name: ___________________________________
Title: ___________________________________
APPENDIX III
CERTIFICATE OF SUBSEQUENT SALE
The undersigned, duly authorized by ____________________________, hereby
certifies (1) that ___________________________ is the Purchaser of the Shares
evidenced by Common Stock Certificate No. ______ for _________________ shares (A
COPY OF WHICH, FRONT AND BACK, IS ATTACHED HERETO), (2) that said Purchaser sold
__________________ of such Shares on _________________ in accordance with
registration statement number ______________________ and (3) that the
requirement of delivering a current prospectus and current annual, quarterly and
reports (Forms 10-K, 10-Q, and 8-K) by the Company has been complied with in
connection with such sale.
PRINT OR TYPE:
Name of Purchaser
(Individual or Institution)
selling the Shares: ------------------------------
Name of Individual representing
Purchaser selling the Shares
(if an Institution): ------------------------------
Title of Individual representing
Purchaser selling the Shares
(if an Institution): ------------------------------
SIGNATURE BY:
Individual Purchaser selling the
Shares or Individual representing
Purchaser selling the Shares: ------------------------------
